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Annual Report of Celltrion Pharm in 2014

From 1 January 2014


To
31 December 2014

Contents
.................................................................................................................... 2
.................................................................................................... 2
1. ............................................................... Error! Bookmark not defined.
I. .................................................................................................................... 5
2. .............................................................................................................. 7
3. ......................................................................................................11
4. .........................................................................................................13
5. .............................................................................................................17
6. .................................................................................................19
II. ..................................................................................................................21
1. .............................................................................................................21
2. .........................................................................................27
3. .........................................................................................29
4. .....................................................................................................33
5. ................................................................................................36
6. ...............................................................................................43
7. ...........................................................................................................45
1. ...........................................................................................................53
III. .........................................................................................................53
2. ...........................................................................................................59
3. ...................................................................................................72
4. ............................................................................................................... 204
5. ........................................................................................................ 213
6. ........................................................................................... 348
IV. ................................................................................................. 351
V. ....................................................................................... 353
VI. ............................................................................. 357
1. ................................................................................................ 358
2. ............................................................................................. 362
3. ............................................................................. 362
VII. ...................................................................................................... 364
VIII. .................................................................................... 368
1. ............................................................................................... 378
2. ....................................................................................................... 380
IX. ............................................................................................ 386
X. ............................................................................................ 387
XI. .................................................................. 389
1. ........................................................................................................ 402
........................................................................................................ 402
2. .............................................................................................. 402

Contents
Company History..................................................................................................................... 8
Changes in capital ..................................................................................................................12
The total number of shares .....................................................................................................14
Status of Voting Rights ...........................................................................................................18
Items Related to Dividend Distribution .....................................................................................20
Items related to output and facilities........................................................................................30
Sales related Issues................................................................................................................34
Main business contracts ..........................................................................................................44
Research and Development.....................................................................................................46
Bio&Chemical World Pharmaceutical Institute (2013.04~2014.04) ..............................................52
Consolidated financial statements ............................................... Error! Bookmark not defined.
Consolidated Financial Statements comment ............................................................................73

( 15 )

2014 01 01

2014 12 31

2015 3 31

:
:

()

706-1 17
( ) 02-2216-3611
() http://www.celltrionph.com

( )
( ) 02-2216-3611

( )

Annual Report
(15th period)
Accounting period
From January1st, 2014 to December 31st, 2014

To whom it may concern in the Financial Services Commission and Korea Stock Exchange:
March 31th, 2015
Company type:

Sovereign Listed Companies

Exemptions :

None

Company Name :

Celltrion Pharmaceutical

CEO:

Kim Manhoon

Address of Head

17 Story, Building LG Dacom,

Office :

Yeoksam-dong, Gangnam-gu

Telephone number:

02-2216-3611

Company website:

http://www.celltrionph.com

Contact Person :

( Position ) Director of Management Support


( Name ) Oh Dongsuk
( Phone ) 02-2216-3611

Confirmation of Representative Directors

Confirmation of representative directors and signature


CONFIRMATION
As representatives of the company's directors and Director of Business Declaration, we have paid considerable
attention to the contents of our public files. After direct confirmation and discussions we confirm that no record or note of
major events was omitted and there was no false records or notes. Therefore, the contents of the report will not lead to major
misunderstandings for the referrers.
Additionally, I affirm that, in accordance with the relevant laws and regulations of the external audit conducted on the
company, our company has built up and executed its internal accounting function.
(The legally-backed independent audit was carried out in accordance with the relevant laws and regulations of the
companys external auditing company)
March 31st, 2015
Celltrion Pharm
Kim Manhoon
CEO: Kim Manhoon
Oh Dongsuk
Reporting Director: Director of Management SupportOh Dongsuk

I.
1. ( ,
)
( : )

Celltrion
Pharma USA

2008-01-25

10535 wilshire Blvd. #D-04 Los Angeles, CA

90024

1028

2 7

Inc
()

2009-08-05

352

3,994

50%

50%

1-1.

I. Company Profile

1.1. Status of Consolidated Subsidiaries only includes companies with quarterly interim reports
Or consolidated financial statements and annual reports)
(Unit: KRW MN)

Company
Name

Registration
Date

Celltrion
Pharma USA
Inc.
Celltrion
Chemical
Research
Institute

2008-01-25

Address

10535 Wilshire Blvd. #D-04 Los Angeles,


CA
9
0
7F, Daewoo Frontier
Valley 2complex,
1028, Jung-dong,
Giheung-gu, Yongin-si,
Kyungkido, Korea
[445 743]

2009-08-05

Main Business

Service
Industry

Research and
development
of fine
chemicals

Total assets at
the end of last
business year

Subsidiary
Ownership

Pharm?

Owns more
than half the
shares

352

3,994

of Celltrion

Owns more
than half the
shares

Yes

Yes

1-1. Changes in consolidated companies


Category

Subsidiary company name

Reason

Acquisition
of
Subsidiary

Disposal of
Subsidiary
company

Not applicable.

2.
.
2000. 11.
2005. 08.
2005. 12.
2006. 02.
2007. 07. ( )
2009. 07. ( )
2009. 08. ( : )
2009. 10. 46 300
2010. 07. 2
2011. 10. 48 500
2014. 08. MOU
.
2002. 07
2004. 04
2005. 12
2006. 04
2006. 11
2010. 04
2010. 12


()

ISO 9001
2006 ()

( )

2. Company History
2. 1.

Major Changes since the Companys Establishment

2000. 11. Founded the Mbiznetworks Inc.


2005. 08. Registered with the Financial Supervisory Service and summited preliminary application review to
KOSDAQ
2005. 12. Passed KOSDAQs preliminary review
2006. 02. Listed its common stock on KOSDAQ
2007. 07. Changed its trade name to Codinus Inc.
2008. 01. Established Celltrion Pharm USA Inc.
2009. 07. Changed its trade name to Celltrion Pharmaceutical
2009. 08. Merged with Hanseo Pharmaceutical Inc.
2009. 10. Won USD 3,000,000, the Export Tower Reward in its 46th day of trading.
2010. 07. Entered second industrial park (Ochang) and signed land purchase contract
2011. 10. Won USD 5,000,000 as the Export Tower Reward on the 48th day of trading
2014. 08. Signed MOU agreement with Academic-Industrial Collaboration with Chonnam National University
2.2

Changes in major subsidiary companies history

2002. 07 Founded Cairo Genics Inc.


2004. 04
2005. 12
2006. 04
2006. 11
2010. 04
2010. 12

Certified as high-tech company (sophisticated technologies)


Won excellent venture company award
Obtained ISO 9001 certification
Won 2006 Republic of Korea War Prize (Presidential Award)
Company name changed to Celltrion Chemical Co., Ltd.
Headquarters and research institute moved to Yongin-si, Gyeonggi-do

.

.

2012.03.22

2013.03.25

2014.03.28

2009.07.20

3 ( )

()

2010.11.29

()

()

2013.04.19

()

()

2007.07.20

()

()

2009.07.03

()

()

. , (), ,
.
.
.

2.3. HQ Address/Location Change

No change
2.4. Major management changes:
Date

Before Changes

After Changes

Deputy Board of Directors: Seo Jeongjin


Board of Directors: Kim Hyeongji
External Board of Directors: Han Jinho
External Board of Directors: Park Namchun
Auditor: Im Dongho

Deputy Board of Directors: Seo Jeongjin


Board of Directors: Kim Hyeongji
External Board of Directors: Jang Pongu
External Board of Directors: Kim Haeng Ok
Auditor: Im Dongho

Mar 25th 2013

Deputy Board of Directors: Seo Jeongjin


Board of Directors: Kim Hyeongji
External Board of Directors: Jang Dongwoo
External Board of Directors: Kim Haengok
Auditor: Im Dongho

Deputy Board of Directors: Seo Jeongjin


Board of Directors: Kim Hyeongji
Board of Directors: Jang Dongwoo
External Board of Directors: Kim Gyeongyeop
External Board of Directors: Kim Haengok
Auditor: Im Dongho

Mar 28th 2014

Deputy Board of Directors: Seo Jeongjin


Deputy Board of Directors: Seo Jeongjin
Board of Directors: Kim Manhoon
Board of Directors: Kim Hyeongji
Board of Directors: Kim Hyeongji
Board of Directors: Jang Dongwoo
External Board of Directors: KimGyeongyeop
External Board of Directors: KimGyeongyeop
External Board of Directors: Lee Gwangmin
External Board of Directors: Kim Haengok
Auditor: Im Dongho
Auditor: Im Dongho

Mar 22

nd

2012

Notes

2.5. Majority Shareholder Changes


Date

Before Changes

After Changes

Notes

Three people except for Kim Yeongjip


Jul 20th 2009 (including special related parties)

Celltrion Healthcare Inc.

Nov 29th 2010 Celltrion Healthcare Inc.

Special related parties, except for


Celltrion Holdings Inc.

Others related parties asides from Celltrion Others related parties asides from
Apr 19th 2013 Holdings Inc.
Celltrion Inc.

2.6.Change of the trade name


Date

Notes

Before Changes

After Changes

Jul 20th 2007

Mbiznetworks Global Inc.

Codinus Inc.

Jul 3rd 2009

Codinus Inc.

Celltrion Pharm Inc.

2.7. Merger, segmentation (merger), total stock swaps, stock transfers, and assignment of important business
Not applicable.
2.8. Major business objective changes
Not applicable.
10

3.
()
( :

2014 12 31

()

( : , )
()

()

()

2012 04 19

298,700

500

11,185

2012 05 15

13,664

500

5,671

2012 07 16

9,555

500

11,185

2012 08 08

254,237

500

11,800

2012 12 10

1,271,186

500

11,800

2013 07 03

85,587

500

11,684

2013 07 31

85,587

500

11,684

2013 08 06

85,587

500

11,684

4,494,382

500

8,900

2014 12 23


( :

2014 12 31

( : , )

(%)
4

2014 04 18

10,000

2019 04 18

10,000

2015 4 18 ~

2019 4 17

100

12,460

10,000

802,568

100

12,460

10,000

802,568


( :

2014 12 31

( : , )

(%)
1

2013 12

2018 02

19

18

60,000
60,000

2014.12.19~
2018.12.18
-

100

10,650

60,000 5,633,802

60,000 5,633,802

11

3. Changes in Capital
Capital Increase (decrease) Status
st

(Base date: December 31 2014 )


Date

(Unit: KRW, per share)


Details of shares ( Decrease)
Issue
Category Number of Shares
Par value
Notes

Issue Form

April 19th 2014


May 15th 2012
July 16th 2012
August 8th 2012
December 10th 2012
July 3rd 2013
July 31st 2013
August 6th 2013
December 23rd 2014

Stock option exercise Common


Stock option exercise
Stock option exercise
Exercise conversion

298,700
13,664
9,555
254,237
1,271,186
85,587
85,587
85,587
4,494,382

11,1
5,6
11,1
11,8
11,8
11,6
11,6
11,6
8,9

500
500
500
500
500
500
500
500
500

Status of Outstanding Convertible Bonds


(Base date: December 31st 2014)

(Unit: KRW MN, per share)

Conversion Condition
Category

Issuance Date

Matu
rity

Type

Book Value

Convertible Period

Notes
Conver
sion

Conversion
Price

ratio
The 4th
Convertible
bonds

April 18th 2014

Total

April 18th
2019

10,000

10,000

Registered April 18th, 2015~


Common
April 19th,2019
stocks
-

Bond repayment

Total
Book
Value

Convertible
shares

100

12,460

10,000

802,568

100

12,460

10,000

802,568

Status of Outstanding Bonds with Warrants


(Base date: December 31st 2014 )
(Unit: KRW MN, per share)
Period of
Category Issuance
Date

First
unregistered
bonds with
detachable
warrants

Maturity

Decem
ber 31st
2013

Book
Value

Februar
y 18th
2018

warrants
Type

Bonds which Notes


Exercise Condition Have Not been
Exercised

exercise

60,000 Register 2014.12.1


ed
9~
Common 2018.12.1
stocks 8

Exercise Exercise Book Converti


ratio (%) Price
Value ble
shares

100

60,00 5,633,80
10,650
0
2

12

60,000

60,00 5,633,80
0
2

Total

4.

( :

2014 12 31

( : )

65,000,000

15,000,000

19,380,667

80,000,000

19,380,667

490,907

490,907

1.

490,907

490,907

2.

3.

4.

. (-)
.
. (-)

18,889,760

18,889,760

1,131

1,131

18,888,629

18,888,629

13

4. The total Number of Shares


Status of the total number of shares

(Base date: December 31st,2014)

(Unit: Shares)
Types of shares

Category

Ordinary
shares

Preferred stock

Notes
Total
-

. The total number of issued


shares

65,000,000

. The total number of shares


issued

19,380,667

19,380,667

. The total number of shares


decreased

490,907

490,907

1. Capital decrease

490,907

490,907

2. Profit redemption

3. Repayment of redeemable
shares
4. Others

15,000,000

80,000,000

. The total number of outstanding


shares (-)

18,889,760

18,889,760

. Number of self-owned stock shares

1,131

1,131

18,888,629

18,888,629

.Number of shares in circulation


(-)

14


( :

2014 12 31 )

(-)

1,131

1,131

1,131

1,131

(-)
-

(a)

(+)
-

( : )

(b)

(c)

(a+b+c)

( 1)

( 1) 2009 5 21 () 4,087,193
(1:0.303634) 1,241,010 .

15

Status of the Acquisition and Disposal of Own Shares


st
(Base date: December 31 2014)

Acquisition Approach

Types of Numbe
stocks
r of
Shares
Common
stock

Direct
Acquisition
s

Legal

Trading
market

acquisition
in

capital

markets

Public
tender
offers
Exercising
the
subscription
right

Subtotal

Acquisitio
ns
through
trust

Trustees
Retention
volume

agreemen
ts

Spot stock
holding
volume

Subtotal (b)

Other acquisition methods (c)

Total(a+b+c)

(Unit: Shares)
Quantity changes
Acquisitio
n (+)
-

Number
Disposal Redemption of
(-)
(-)
Shares
-

Note
s
-

Preferred
stock

Common
stock
Preferred
stock

Common
stock

Preferred
stock

Common
stock

Preferred
stock

Common
stock

Preferred
stock

Common
stock

Preferred
stock

Common
stock

Preferred
stock

Common
stock

Common
1,131 stock

Preferred
stock
Common
stock

Preferred
stock
Common
1,131
stock

1,131
1,131

(Note1)
-

16

Preferred
stock

Preferred
stock

(Note 1) These 4,087,193 shares were acquired through merger with Hanseo Pharm Co. on May 21st
2009 under merger ratio of 1:0.303634

5.
( :

2014 12 31

( : )

18,889,760

1,131


(C)


(D)

18,888,629

(A)
(B)

(E)

(F = A - B - C - D + E)

17

5 Status of Voting Rights


(Base date: December 31st 2014)
Category

(Unit: Share)
Types of shares Number of shares

Notes

Common stock

18,889,760

Preferred stock

Common stock

1,131

Preferred stock

Common stock

Preferred stock

(D) Shares with voting rights


limited by other laws

Common stock

Preferred stock

(E) Number of shares with the


resurrection of voting rights

Common stock

Preferred stock
Common stock

18,888,629

Preferred stock

(A) Number of shares


(B) Number of shares without voting
rights

(C) Voting shares excluded by the


Articles of Association

Number of shares with voting rights


(F = A - B - C - D + E)

18

6.
3

14

13

12

()

500

500

500

()()

2,613

3,551

3,434

()

183

280

279

()

()

()(%)

(%)
(%)
()
()

19

6. Items Related to Dividend Distribution


Dividend distribution for the three successive accounting years previous:
Types of shares 14th period

Category

Par value per share (KRW)

13th period

12th period

500

500

500

2,613

3,551

3,434

183

280

279

Total cash dividends (KRW MN)

Total dividends (KRW MN)

(Consolidated) Net Income (KRW MN)


Earnings per share (KRW)

Consolidated Pay-out Ratio

Cash Dividend Yeild


(%)

Stock Dividend Yeild


(%)

Cash Dividend per


Share (KRW)

Stock Dividend per


Share (Share)

20

II.
1.
.
(1)



.

.
.
(2)

,
.
FTA,
, .


.
(3)

.


,
.

21

II. Business Introduction


1. General business information
A. Market Conditions and Brief Summary
(1)Characteristics of the Pharmaceutical Industry
The pharmaceutical industry is closely related to human life and healthcare. As a knowledge-based industry with
high added value, it covers the whole process from the production and sale of the raw materials and end user
drugs to research and development of new products. It is classified as a highly knowledge-intensive industry with
great growing potential which can generate high value through newly-developed products. The main
characteristic of the pharmaceutical industry is that a companys performance is closely bound with long-term
research, development and investment. Time and money must be invested to develop new products and new
medicine. Therefore, the pharmaceutical industry is featured to have a higher proportion of research and
development compared to other industries.
(2) Industrial Growth
The medical expenses have increased due to the aging of the general population. Therefore, the demand for
healthcare-related industries grows rapidly year on year, especially in the Chinese pharmaceutical market. As a
result, the world pharmaceutical market is facing a steady growth in the future. Influenced by the drug-price-cut
policies, U.S.-Korea Free Trade Agreement, positive list system, and government controls such as drug price
reassessments, the prescription drug industry is enduring some hardships. Whats worse, government control
might be further intensified and the pharmaceutical industry may therefore face even more difficult challenges.
Along with the increasing trend of the general population aging in the developed world and the increased number
of chronic patients, the demand for pharmaceuticals will continue to maintain growth at a certain level. Still, the
policies to reduce the use of or lower the price of medicines will remain. In summary, it is predictable that the
prescription drug market will continue to slump.
(3) Characteristics and Seasonality of Economic Change
The pharmaceutical industry is directly related to national health. Therefore it is relatively insensitive to economic
changes and seasonal factors, with an inclination towards low flexibility. Regarding the different types of
pharmaceuticals, there are generally two categories: prescription drugs and over-the-counter drugs (OTC).
Prescription drugs could only be acquired followed by a doctors diagnosis and prescription. Over-the-counter
drugs are different, even ordinary people can choose and buy them. The market condition for generic drugs is
more or less affected by climate changes and economic fluctuations. However, prescription drugs are relatively
insensitive to economic fluctuations and maintain a relatively stable growth.

Generic Pharmaceuticals

More or less sensitive to economic fluctuations and seasonal factors.

Specialized
pharmaceutics

Inflexible due to its direct relationship with health.

22

(4)
, 600
.

.
, , cGMP
,

.

2 ,
.
""
.
,
.

.
.
(1)
KGMP(Korea Good Manufacturing Practice:
) ,
, , , 40 .

DDB , ,
() 2 , 3 5
.
2007 100
2013 266 ,

.
2009 '3 '
2011 '5 ' .

23

4Domestic and Foreign Market Conditions and Competitive Factors


The pharmaceutical industry generally forms a competitive structure composed of domestic first-class
pharmaceutical enterprises and multinational pharmaceutical groups, and 600 domestic pharmaceutical SMEs.
Since domestic pharmaceutical companies have weaker R&D capabilities and invest less compared to those of
developed countries, most of the companies are devoted to developing generic pharmaceuticals on products
whose patents are about to be expire. Compared to other industries, the competition among pharmaceutical
enterprises is rather fierce. Therefore, it becomes increasingly important for a corporation to obtain a rich variety
of products, professional management, sound brand recognition and production facilities which comply with cGMP
standards. In fact, equipped with these competitive factors, multinational pharmaceutical groups and domestic
first-class pharmaceutical companies have a growing dominance in the market. However, the polarization of the
pharmaceutical market is becoming increasingly serious due to small enterprises weak production and
management.
Therefore, in addition to the Jincheon-gun and Chungcheongbuk-do production factories, the Company has also
completed the construction of Ochang-eup Chungchengbuk-do which is equipped with excellent international
standard pharmaceutical production facilities. This new factory caters to the Companys needs to enter overseas
markets including US and Europe. Whats more, Celltrion has researched, developed, and produced an
autoimmune therapeutic agent Remsima, which is the worlds first antibody biosimilar. This new product is sold
domestically, leads to the construction of a new chemical production line and strengthens its market dominance.
Biosimilars prove to have the same effect with original biological drugs and they provide patients with more oppor
tunities for treatment, hence they are greatly anticipated to increase patients welfare. It is estimated that biologic
al pharmaceutical markets will expand, sharply centered on biosimilars due to the expiry of original patents, mark
et demand and other factors.
B. Present Situation of the Company
(1) Summary of Operations
The company is designated as the KGMP (Korea Good Manufacturing Practice: Excellent Pharmaceutical Productio
n and the Quality Control Standard) Qualified Corporation by the Ministry of Health and Welfare. As an excellent p
harmaceutical enterprise with top production facilities and quality control in Jincheon-gun, Chungcheongbuk-do, t
he company currently produces and sells over 40 kinds of products including tablets, hard capsules, soft capsules
and injections.
Among these, the Companys featured product is a newly-modified capsule named Gortex. Based on the existing
liver disease therapeutic agent hepadif and DDB, the Company found out the optimum ratio that facilitates these
two drugs to give play to their best results, and conducted second and third round clinical experiments to test
Gortexs effectiveness and safety in addition to zoopery, toxicity tests and safety tests. After five whole years, the
Company managed to produce the perfect product.
With such extraordinary performance and effectiveness, sales volumes reached KRW 100 BN in 2007, and kept
sustainable growth in the following years. The Companys sales performance reached KRW 266 BN in 2013,
making Celltrion Pharm a blockbuster in the pharmaceutical industry. The Company adopted a growth strategy to
constantly conduct clinical trials of Gastroenterology and Endocrinology diseases. In such a large and overheated
domestic supply market, in order to reinforce the Companys market competitiveness and promote polygonization,
the Company actively explored export markets. The Company finally won the "USD 3,000,000 Export Award" and
the "USD 5,000,000 Export Award" in 2009 and 2011, respectively.

24

(2)
647 29.2%
. 222 , OTC
119 , 76
'', ' 45
.
"" 900

2012 7 (MFDS) .
2012
.
(3)

. 'III.
1. ' .
( : )

15

41,014

14

40,559

19,393

4,200

2,036

2,574

4,153

5,258

148

66

66,744

52,657

25

2) Sales Department
Sales volumes reached KRW 64.7 BN, growing by 29.2% compared with the same period last year. Categorized in
accordance with the drug variety, the Companys featured product, hepatopathy curative Cortex, OTC products a
nd Remsima led the growth of the whole industry with a total sales value of KRW 22.2 BN, KRW 11.9 BN and KR
W 7.6 BN, respectively. Another 45 items, including mixed vitamin "tamiful" and the blood circulation medicine "s
mex tab", helped balance the growth situation.
The autoimmune therapeutic agent "Remsima" developed by Celltrion was trialed globally on more than 900
people from all over the world. After the comparison of the clinical results, it showed that "Remsima" has the
same efficacy and safety as original products. Consequently, the Company acquired product licenses from Korea
Food and Drug Safety (MFDS) in July, 2012. The company then officially began marketing and sales activities
focused on large hospitals and first prescribed the drugs at the end of 2012.
(3) Business Divisions and Financial Information
As the Company specializes in pharmaceutical manufacturing and sales, the financial statements of other
business divisions are now vacant.
For information on reports such as the Companys financial statements from recent years, please refer to III.
Financial Matters 1. Abstract of financial information

(Unit: KRW 000)


Category
Domestic
consumption

15th period

14th period

Products

Except Gortex

41,014

40,559

Commodities

Except
Remsima

19,393

4,200

2,036

2,574

4,153

5,258

148

66

66,744

52,657

Services
Exports

Main products

Products
Commodities
Total

Except Hepadi

26

2.
.

.
( : )

22,235

33.31%

70

0.10%

4,512

6.76%

1,597

2.39%

12,600

18.88%

41,014

61.45%

7,573

11.35%

11,820

17.71%

19,393

29.06%

4,153

6.22%

148

0.22%

2,036

3.05%

66,744

100.00%

()

()

( : )

.

300C

(%)

2014

2013

2012

433

433

433

1,728

1,728

1,858

50iu

192

192

192

4mg

284

284

284

10mg

612

612

612

27

2. Status of Featured Products


A. Status of Major Products
The company manufactures and sells pharmaceutical products. Since this report was written, the sales conditions
of the Companys featured pharmaceuticals and the portion that its sales amount accounts for are listed below:
(Unit:KRW 000)
Business
sectors

Sales Type

Product

Sales

Specific Applications
Price

Gortex
Others
Domestic Tamifel
sales(prod
Somex
ucts)
Others

Medicine
sales

Liver disease solvent

22,235

33.31%

70

0.10%

Nourishing tonic

4,512

6.76%

Cardiovascular solvent

1,597

2.39%

Other generic

12,600

18.88%

41,014

61.45%

7,573

11.35%

11,820

17.71%

19,393

29.06%

4,153

6.22%

148

0.22%

2,036

3.05%

66,744

100.00%

Assorted generics

Subtotal
Domestic
sales
(merchandi
se)

Remsima
Others

Ratio (%)

Autoimmune
treatment

disease

assorted products

Subtotal

Product Exports
Commodity Exports
Research services revenue
Total
B.Changes in Prices of Main Products

(Unit: KRW)
Items
Godex 300c

2014

2013

2012

433

433

433

1,728

1,728

1,858

Somax 50 IU

192

192

192

Glime 4 mg

284

284

284

Tovastin 10mg

612

612

612

Tamipool

28

(1)

(2)
(PLS), ,

( : )

95

2.44%

86

2.21%

293

7.52%

474

12.17%

697

17.90%

547

14.05%

2,176

55.88%

3,420

87.83%

3,894

100%

3.
.
(1)

( : )
2014

2013

2012

339,897,600

339,897,600

339,897,600

152,409,600

152,409,600

152,409,600

492,307,200

492,307,200

492,307,200

(2)

( : )
1

1,348,800

21

604,800

21

28,324,800
12,700,800

: 492,307,200 (1 21 12 )

29

(1) Output Based on Calculations


Insurance drug price standards
(2) Main Reasons for Price Changes
Affected by the Positive List System, the patented drugs price is lowered. The market price in real transactions is
affected by the governments price control policies such as the market price reimbursement system.
C. Status of raw materials, etc.
Business
sectors

(Unit: KRW 000)

Purchase
Types

Items

Materials

Purchases

Remarks

Containers

95

2.44%

Labels

86

2.21%

293

7.52%

474

12.17%

697

17.90%

547

14.05%

Other

2,176

55.88%

Subtotal

3,420

87.83%

3,894

100%

Other
Sub-total

Medicine

Ratio (%)

Carnitine Orotate
Raw materials Biphenyl dimethyl dicarboxylic acid

Total
. 3. Items Related to Output and Facilities
A. Output capacity and grounds for output
(1) Output capacity
Business sector
Factories

(Unit: piece)
Items
Pill

Offices
Pill
Department

Capsule
Capsule Room
Total

2014

2013

339,897,600

339,897,600

339,897,600

152,409,600

152,409,600

152,409,600

492,307,200

492,307,200

492,307,200

(2) Grounds for Output


Item

2012

(Unit: piece)
Unit

Production
day

per Average
WorkingProductivity
Days per month
Month

Refine

Pill

1,348,800

21 days

Capsule

Capsule

604,800

21 days

per

28,324,800
12,700,800

Annual production capacity: 492,307,200 (production per day 21 days 12 months )

30

.
(1)

( : )

2014

2013

2012

97,623,682

91,991,731

87,309,086

120,158,691

113,128,294

102,855,592

217,782,373

205,120,025

190,164,678

(2)

( : , %)

()

1,008

1,099

114%

1,008

1,099

114%

8 360 =2,880
.
(1)
[2014 12 31 ]

( : )

588-2

(9,723.6)

840,323

840,323

(1,433.58)

2,906,099

103,520

2,802,579

2,020,383

16,500

107,097

1,929,786

2,006,243

20,500

9,088

357,022

1,660,633

84

25,652

4,786

20,950

164,806

17,065

70,014

111,857

7,937,938

79,717

9,088

642,439

7,366,128

31

B. Production Performance and Capacity Utilization


(1) Production Performance
(Unit: piece)
Business sectors

Items

Offices

Pill

Purification
office

97,623,682

91,991,731

87,309,086

Capsule

Capsule
office

120,158,691

113,128,294

102,855,592

217,782,373

205,120,025

190,164,678

Factories

2014

Total

2013

(2) Capacity Utilization


Business Division

2012

(Unit: hours, %)
The average capacity
Actual working hours
utilization rate

Potential working hours

Factory

1,008

1,099

114%

Total

1,008

1,099

114%

8 hours 360 days =2,880 hours

C. Status of the Production Equipment, etc.


(1) Current Status of Production Equipment
[Dec 31st, 2014]
Business
Division

Form

(Unit: KRW 000)


Cat
Location ego
ry
Land(9,7
23.6)

Factories

Sagok-ri Iwol- Buildings


myeon;Jincheo (1,433.5
Domestic n8)
gun ;Chungche Structure
ongbuk-do 588- s
2 et
Machiner
y
Vehicle
Transpor
tation
Spare
Tool

Total

Changes

Basic
book
value

Increas
e

Depreciati Final Book


value
on

Decrea
se

Note
-

840,32
3

840,32
3

2,906,09
9

103,52
0

2,802,57
9

2,020,38
3

16,50
0

107,09
7

1,929,78
6

2,006,24
3

20,50
0

9,08
8

357,02
2

1,660,63
3

84

25,65
2

4,78
6

20,95
0

164,80
6

17,06
5

70,01
4

111,85
7

7,937,938

79,71
7

9,08
8

642,43
9

7,366,12
8

32

4.
( : )

15

14

627

1,311

22,235

23972

22,862

25,283

232

322

4,512

3,566

4,745

3,888

3,294

3,668

14,267

12,978

17,560

16,646

4,153

5,301

41,015

40,516

45,168

45,817

148

23

19,393

4,234

19,541

4,266

2,036

2,574

4,301

5,324

62,444

47,333

66,744

52,657

33

4. Sales Related Issues


A. Sales Performance
Business
sectors

(Unit: KRW MN)

Sales
Type

Items

15th period

Exports
Medicine

Product

Codex

627

1,311

Internal demand

22,235

23972

Total

22,862

25,283

232

322

Internal demand

4,512

3,566

Total

4,745

3,888

Exports

3,294

3,668

14,267

12,978

17,560

16,646

4,153

5,301

Internal demand

41,015

40,516

Total

45,168

45,817

148

23

Internal demand

19,393

4,234

Total

19,541

4,266

Internal demand

2,036

2,574

Exports

4,301

5,324

Internal demand

62,444

47,333

Total

66,744

52,657

Exports
Tamipool

Other generics Internal demand


Total
Exports
Subtotal

Exports
Products

Service sales

Total

14th period

34

.
(1)

- (1 ~6 )

(LOCAL)

Buyer()

- Master L/C
- T/T
- Local L/C

(2)
- ()
- New Generic / IMD
- (BD : Co-promotion, License In/out)
-
(3)

35

B. Sale Channels and Sales Methods


(1) Sales Channels
Category

Sale Channels

Conditions of Sale

Domestic sales

company pharmacy
consumer

- Cash and foreign sales

companyWholesale

merchant

- Collections through cash and notes receivable


(one six months)

pharmacy consumer
company Wholesale merchant
hospital consumer
companyhospital consumer
Direct exports

Exports
orders)

through

Indirect exports
(LOCAL)

Selling through
enterprises

buyers

(direct

tradespecialized

- Master L/C
- T/T
- Local L/C

Sales Strategies
- Develop ultra-large, long-term products that are based on blockbusters (codex).
- Research, develop and sell New Generics / IMD.
- Aggressively expand new businesses (BD: Co-promotion, License In/out)
- Expand existing overseas markets, and develop new markets.
(3) Sales Organization

36

5.

( 3 , )

.
, ,
, , ,
.
, , ,
.
.
.
.
BBB(S&P) .

.

.
(1)

,
.
.
.
( : )

2,336,908

11,615,179

38,696,326

34,685,001

10,402,208

10,268,688

1,305,760

1,305,760

52,741,202

57,874,628

(2)

,
.

,
.

.
37

5. Market Risk and Risk Management (Below is the third quarter, a comprehensive review
might be needed)
A. Risk Management
As the main target of risk management in the Group, financial assets consist of cash, cash assets, available-forsale financial assets, account receivables and other bonds. The financial debt includes account payables, loans,
corporate bonds and other debt.
The Group may face risks from assets, debts, and fluctuations of the interest rate, market price and the
exchange rate that may affect future trades. The goal of risk management is to control market risk in business
activities and financial activities. Based on the risk evaluation, the selective derivative or non-derivative risk
avoidance methods are used to achieve this goal. The Group only applies risk avoidance to risks in cash flows of
the corporation. To effectively manage credit risks, risk avoidance transactions are only run by financial
institutions with a credit rating higher than BBB(S&P).
In addition, based on the credit of clients, the Group set up relative and absolute amounts against risks to
manage risky financial tools.
To control such risk factors, the Group will implement continuous monitoring and forecasts based on different
kinds of risk, making and carrying out corresponding risk management policies.
(1) Credit Risk Management
To manage credit risk, the Group only deals with dealers who have credits higher than a certain level. To conduct
credit risk management of financial assets, the Group clearly grasps whether balances are normally settled every
month and understands the possibility of trade debtors disability to pay. The Group adjusts the goods supply of
sales customers in trouble to minimize the level of credit risk.
The highest final credit risk standards of financial assets at the end of the current quarter and last period are
below:
(Unit:KRW)
Category

End of the current quarter

End of last period

Cash and cash assets

2,336,908

11,615,179

Accounts Receivable

38,696,326

34,685,001

Other receivables

10,402,208

10,268,688

1,305,760

1,305,760

52,741,202

57,874,628

Available-for-sale financial assets


Total
(2) Liquidity Risk Management

In order to manage liquidity risk, the Group makes short-term and long-term capital management plans, and
analyzes and reviews actual total cash outflows. In this plan, cash flow and financial liabilities can match the
maturity structure of financial assets.
The Group thinks it can repay the financial liability through operational cash flow and financial assets cash inflow.
In addition, to manage the liquidity risk caused by temporary or unusual economic environments, the Group signs
contracts with financing institutions regarding bond discounts and conditional (limited) debt contracts of trade
finance.
Maturity of Financial Liabilities related to the maturity analysis content at the end of current quarter and last
period is below.

38

<>
( : )

1 ~5

1,490,780

1,490,780

1,490,780

7,752,381

7,752,381

7,752,381

83,807,264

95,489,960

28,564,099

66,925,861

50,000,000

52,371,521

52,371,521

9,299,863

13,169,426

150,000

13,019,426

56,805,768

78,566,554

900,000

77,666,554

209,156,056

248,840,622

91,228,781

157,611,841

<>
( : )

1 ~5

936,448

936,448

936,448

5,790,182

5,790,182

5,790,182

69,366,186

81,585,960

21,985,960

59,600,000

50,000,000

56,900,000

3,450,000

53,450,000

11,373,580

13,460,908

360,000

13,100,908

54,196,903

79,241,554

900,000

78,341,554

191,663,299

237,915,052

33,422,590

204,492,462

39

<End of the current period>


(Unit:KRW)
Category

Carrying amount

Contractual
flow

cash

Within a year

1~5 years

Trade payables

1,490,780

1,490,780

1,490,780

Other debt
payments

7,752,381

7,752,381

7,752,381

Financial institution
Loans

83,807,264

95,489,960

28,564,099

66,925,861

Other loans

50,000,000

52,371,521

52,371,521

9,299,863

13,169,426

150,000

13,019,426

56,805,768

78,566,554

900,000

77,666,554

209,156,056

248,840,622

91,228,781

157,611,841

Convertible bonds
Bonds with stock
purchase warrants
Total
<End of the last period>
(Unit: KRW 000)
Category
Accounts payable

Book value

Contractual
flow

cash

Within a year

1-5 years

936,448

936,448

936,448

5,790,182

5,790,182

5,790,182

69,366,186

81,585,960

21,985,960

59,600,000

Other loans

50,000,000

56,900,000

3,450,000

53,450,000

Convertible bonds

11,373,580

13,460,908

360,000

13,100,908

54,196,903

79,241,554

900,000

78,341,554

191,663,299

237,915,052

33,422,590

204,492,462

Other debt payments


Financial
loans

institution

Bonds with Warrants


Total

40

(3)

. ,
.
()
USD
,
,
.
, .
.
10%
. ,
.
( : )

10%

USD

162,952

10%

10%

(162,952)

10%

253,855

(253,855)

()

,
.
.


.
.
.
.
( : )

210,274,821

192,941,205

2,338,588

11,619,425

207,936,233

181,321,780

173,369,215

168,412,367

119.94%

107.67%

. (/)

41

(3) Market Risk Management


Market risk management of the Group lies in minimizing the risk regarding group income. Market risk reflects the
changes of the interest rate, exchange rate and other market factors decrease the revenue or value of securities
portfolios owned by the Group.

A. Exchange rate risk management


In the output and related aspects of raw material purchasing, the Group faces USD exchange risks. In order to
minimize the exchange risk in operating activities, during frequent transactions, such as import and export, and
cash transaction, as well as deposits and borrowing, the Group tries to restrain oversold positions or
overbought positions through the principle of using local currency to trade, transfer and unify spending.

The Group measures KRW exchange risk regularly. When changes of functional currency exchange rates of
different foreign currencies vary 10% or more, effects of foreign exchange conversion of financial assets and
financial liabilities marked in foreign currency on income and loss before income taxes are as follows. The
numbers below reflect the final quarter. However, it does not reflect effects of changes of interest rates.

(Unit: KRW 000)


Current period
Category

10% rise

USD

Last period

10% fall
162,952

10% rise
(162,952)

10% fall
253,855

(253,855)

B. Interest rate risk


The Group issues fixed rate bonds to raise funds so that the future cash flow will not be affected by exchange
rates. Meanwhile, the Group considers that change in fair value interest rate risk is not very important.
A. Capital Risk Management
The aim of the Group's capital management is to provide the ability to offer benefits to shareholders and
interested parties continuously through operating self-protection and to reduce the cost of capital through
maintaining optimal capital structures.
The Group uses debt ratio as an indicator for capital management. The ratio is calculated by dividing total
liabilities by the total assets. And the total liabilities and total assets are calculated by the figure abstracted from
the comprehensive financial statement.
Debt ratio of the Group during the end of the current quarter and the last period is listed below.
(Unit:KRW)
Category

End of current quarter

End of last period

. Net liabilities
Total liabilities

210,274,821

192,941,205

2,338,588

11,619,425

Net liabilities

207,936,233

181,321,780

. Capital

173,369,215

168,412,367

119.94%

107.67%

Cash and cash equivalents

.Asset-liability ratio/

42

6.

()

2008.10

10


()

2011.01

()

2011.01

10

()

2011.03

10

(, Entercavir and Godex)


( )
(API , Global Generic
)

2011.03

(Piperazine dithioctate )

()

2011.05

()

2011.06

2011.07

(SIT, GNP study)

()

2011.07

()

2011.07

()

2011.07

2011.11

2011.11

2011.12

()

2012.01

2012.02

2012.03

()

2012.05

2012.07

2012.08

( )

2012.08

( )

(),

2012.10

( 400mg)

()

2012.11

( 5/10mg)

2013.06

2013.07

()

2013.09

()

2014.01

2014.02

2014.03

2014.06

()

(API , Global Generic


)

43

6. Main Business Contracts


Contract partner

Contract date

Celltrion Healthcare

2008.10

Term

Main contents

10 years since the products Exclusive agency of biosimilars and other new drugs,
which have been developed or will be developed in the
were launched
future.

CHA
Hospital/Kangbuk
Samsung
Hospital/ Kyungpook National University
Hospital

2011.01

2 years

Celltrion Chemistry Institute Inc.

2011.01

10months

Celltrion Chemistry Institute Inc.

2011.03

10months

Clinical research contract (Researchers-oriented Entercavi


r and Godex)
Contract for research and development (development of
the improved imatinib)
Contract for research and development (API developmen
t, development of global generics and some improved dru
)

Korea and Drug Testing Laboratory

Clinical research contract (Piperazine dithioctate


p epa ations)
Service contract about biochemical congruency (Celltrion
Encavir Tab)

2011.03

Biomedieng Co.

2011.05

WoogeneB&G Co.

2011.06

Asan Medical Center, Seoul, Korea

2011.07

Biomedieng Co.

2011.07

Industry-academy Cooperation team of


Korea University.

2011.07

Service contract about biochemical congruency (Celltrion


Encavir Tab)
Forerunner industry in Economic Region, rearing
enterprise (technology development ) contract

Seoul St. Marys


University of Korea

2011.07

Service contract for entrusted research

Boramae Hospital

2011.11

Service contract for entrusted research

Hangyang University Medical Centre

2011.11

Service contract for entrusted research

2011.12

Service contract for entrusted research

2012.01

Common clinical trial contract

2012.02

Service contract for entrusted research

2012.03

Service contract for entrusted research

2012.05

Business commission contract

2012.07

Clinical research contract (Piperazinedithioc Tab)

Samsung Seoul Hospital

2012.08

Modification of contract for clinical research Godex


Capsule

Asan Medical Center, Seoul, Korea

2012.08

Modification of contract for clinical research Godex


Capsule

SLS Seon Ham Hospital

2012.10

Service contract about biochemical congruencyPentoxin


SR Tab.400mg

Biacore

2012.11

Service contract about biochemical congruency (Cayenne


Tab.5/10mg)

Busan National University Hospital

2013.06

Godex Clinical research contract

Inje University Busan Paik Hospital

2013.07

Godex Clinical research contract

2013.09

Commission contract of Remsima clinical experiment

Hospital/Catholic

Samsung Medical Centre


Mmpharm
Eulji University Hospital
Seoul St. Marys
University of Korea

Hospital/Catholic

Medical Excellence
Korea Drug
Institute

Testing

and

Research

Medical Excellence
Celltrion Chemistry Institute Inc.
Surgery Hospital
University

attached

to

Inha

1year

Commissioned experiment contract streptokinase


Clinical research contract (SIT, GNP study)

2014.01

1year

2014.02

1year

Contract
for
research
and
development
(API
development, development of global generic and some
Contract of Remsima basic industry-academia joint
research

Chonnam National University Hospital

2014.03

Contract of Remsima basic industry-academia joint


research

Asian University Hospital

2014.06

Contract of Remsima basic industry-academia joint


research

44

7.
.
'(Godex)'
()

.
.
- : ()

45

7. Research and Development

A. Summary of the R&D


Through improving new liver disease treatment medicine Godex, the Company manifests research and
development ability. The subsidiary Celltrion- institute of chemistry and the central research institute of the
company are promoting the development strategy of the generic product. And the strategy of large-scale
improvement of new drugs will be continuously promoted in the mid-and-long term.
B. R&D Organization
-Form of organization and name: Celltrion Pharmaceutical Central Laboratory

Research
Director

Head of R&D

Product Planning
Group

Clinical/license
Authorization
Group

PM Group

Research and
Development
Group

46

.
.

15

( : )
14

13

672,683

498,102

958,595

2,196,541

1,773,631

2,441,496

413,138

400,663

266,371

6,219,930

2,802,674

4,445,589

2,473,203

1,012,790

1,120,978

11,975,495

6,487,860

9,233,029

788,367

1,892,932

1,480,344

275,812

535,329

783,462

10,911,316

4,059,599

6,969,223

17.94%

12.32%

19.66%

()

/
[
100]

- .
.
(1) 20 ()

(2006.09~2007.09)

- 20 .
- , ,
-
''

47

C. Research and Development Expenses


Research and development expenses of the company are below
(Unit: KRW 000)
Category

15th period

Raw material costs

14th period

13th period

Notes

672,683

498,102

958,595

2,196,541

1,773,631

2,441,496

413,138

400,663

266,371

6,219,930

2,802,674

4,445,589

2,473,203

1,012,790

1,120,978

11,975,495

6,487,860

9,233,029

788,367

1,892,932

1,480,344

Accounting Manufacturing expenses


adjustments

275,812

535,329

783,462

Development
costs
(intangible assets)

10,911,316

4,059,599

6,969,223

17.94%

12.32%

19.66%

Labor costs
Depreciation
Entrusted labor costs
Other
R&D cost
Sales expenses
and
administrative
expenses

R&D cost/ sales revenue


[R&D costs net sales
100]
-

The financial information is based on the international accounting standards with South Korea (K - IFRS).

D Research and Development Achievements


(1)R&D of Peptic ulcer solvent Rabeprazole Sodium Tab. 20 (Rabeprazole)
Category

Contents

Research Projects Bioequivalence Study


Research institutes Biomedieng (2006.09~2007.09)

Research Results

- Proved to be equivalent to control medicine, Korean Janssen Pariet Tab.20mg.


- Submitted bioequivalence test plan to the Food and Pharmaceuticals Safety Hall and
acquired Conditional Permission
- Substituted dispensing is allowed without prior agreement of the doctor

Commercialization On sale as "Eolsara Tab"

48

(2) () ()

(2007.02~2008.01)
- 10 .

-
''

(3) 20mg() ()

, (2007.03~2008.02)

- 20mg
-

''

(4) , (+ )

(2007.05~2008.04)

''

(5)

Formulation, ,

(2008.09~2009.04)

'' (2015 7 )

49

(2)R&D of Hyperlipidemia therapeutic drugs Tovastin Tab. (Atorvastatin) (Joint initiative)


Category

Contents

Research
Projects

Bioequivalence Research

Research
institute

Kyung Hee University (2007.02~2008.01)


- proved to be equivalent to control medicine, Korean Janssen Pariet Tab.20mg
-Substitute dispense is allowed without prior agreement of the doctor

Research
findings

Commercialization On sale in the name of "Eolsara Tab" currently


(3) R&D of rheumatoid arthritis Rualba Tab. 20mg (leflunomide) (Joint initiative)
Category

Contents

Research
Projects
Research
institute

Bioequivalence Study

ibiopharm, Pharmapia (2007.03~2008.02)

- proved to be equivalent to control medicine, Korean Janssen Pariet Tab.20mg


Research findings - Substituted dispensing is allowed without prior agreement of the doctor
Commercializatio
On sale as "Lualba.Tab"
n
(4) R&D of analgesic Arapen Tab. Arapen Semi Tab. (tramadol+acetaminophen compound preparation)
Category
Research Projects

Contents
Formula Research & Development

Research institute

GL Pharmtech (2007.05~2008.04)

Research findings

proved to be equivalent to control medicine, Korean Janssen Ultracet Semi Tab

Commercialization

On sale as " Arapen Semi Tab "

(5) R&D of pepticulcer solvent stoma Tab.


Category

Contents

Research
Projects

Bioequivalence Study

Research
institute

Celltrion Institution of Chemistry (2008.09~2009.04)

Research
findings
Commercialization

Proved to be equivalent to the control medicine, StillenTab of DongaST

Waiting for sales in the market by the name of "Barracan Tab"(scheduled in July 2015 for
sale)
50

(6) 1/250 , 2/500

(2009.11~2010.4)

1/250mg, 2/500mg

" 1/250 , 2/500 "

(7) 0.5mg, 1mg

Formulation, ,

(2012.8~2012.12)

0.5mg, 1.0mg

'' (2015 10 )

(8) 5/80 , 5/160

Formulation, ,

(2013.04~2013.12)

5/80mg, 5/160mg

" 5/80 , 5/160 "

(9) 500mg, 1g

(2013.04~2014.04)

500mg, 1g

' 500mg, 1g'

51

(6) R&D of Diabetes drug Amaryl-M 1/250mg, 2/500mg


Category

Contents

Research
Projects

The study of bioequivalence.

Research
institute

Sanaguamu Clinical Research Institute of Montreal (2009.11~2010.4)

Research
findings

Proved to be equivalent to the control medicine, Amaryl M Tab1/250mg, 2/500mg of


Handok

Commercialization On sale in the name of "GLM1/250mg2/500mg" currently


(7) R&D of liver disease treatment solvent Celltrion BaracludeTab.0.5mg, 1mg
Category

Contents

Research
Projects

Formulation, Manufacturing Process Research, Ensuring bioequivalence

Research
institutes

Dasan Medichem research institution (2012.8~2012.12)

Research
findings

Proved to be equivalent to control medicine, Korean BMSK Pharms Baraclude Tab0.5mg,


1.0mg

Waiting to sell in the market under the name of "Barracan Tab"(scheduled in October 2015 fo
Commercializatio
r sale)
n
(8) R&D of antihypertension solvent Maxforge Tab.5/80mg, 5/160mg
Category

Contents

Research
Projects

Formulation, Manufacturing, Process Research, Ensuring bioequivalence

Research
institutes

Bio&Chemical World Pharmaceutical Institute (2013.04~2013.12)

Research
findings

Proved to equivalent to, cExpogi Tab5/80mg, 5/160mg of Korean Novatis

Commercializatio Currently on sale as "Expogi Tab5/80mg, 5/160mg".


n

(9) R&D of antibiotic CellpenemTab 500mg, 1g


Category
Research Projects

Contents
Formulation, Manufacturing Process Research, Ensuring bioequivalence

Research institute

Bio&Chemical World Pharmaceutical Institute (2013.04~2014.04)

Research findings

Proved equivalent to Mephem Inj. 500mg,1g of Korean Bio&Chemical World

Commercialization

Currently on sale as "CellpenemTab500mg, 1g"


52

III.
1.
( : )

15

14

13

12

146,423,716,060

140,894,912,008

143,045,691,458

101,245,034,647

3,564,132,678

11,619,424,502

5,489,047,002

3,687,056,563

252,077,886

3,240,937,209

39,657,293,520

34,685,000,643

29,789,826,809

26,168,194,814

19,390,077,851

5,893,668,688

6,577,607,180

6,884,051,563

5,582,500,000

5,424,820,421

75,925,522,371

82,315,461,632

84,372,086,361

49,797,060,608

7,886,689,640

6,381,356,543

10,982,546,220

6,042,913,469

264,740,994,379

220,458,659,647

187,998,152,029

114,834,247,371

948,569,000

6,057,336,535

4,375,018,455

1,497,167,705

1,712,479,923

305,760,032

1,305,760,032

1,503,033,255

1,734,937,497

196,120,294,796

145,624,157,389

115,746,603,857

49,093,225,979

56,723,206,387

46,245,190,820

41,962,645,403

34,830,814,369

5,534,396,629

3,448,532,951

5,048,701,809

3,582,240,603

19,460,000,000

22,240,000,000

22,931,980,000

411,164,710,439

361,353,571,655

331,043,843,487

216,079,282,018

111,559,887,356

26,622,023,298

108,808,946,525

54,309,825,571

863,947,756

936,448,102

64,432,909,449

35,858,598,312

25,843,330,585

5,790,182,273

20,522,653,998

15,089,484,484

84,253,322,775

19,366,185,948

23,641,575,001

3,109,334,993

599,286,240

529,206,975

211,808,077

252,407,782

85,179,126,033

166,319,181,522

64,988,814,949

33,501,419,343

84,400,766,146

165,570,483,063

64,065,429,067

32,757,464,911

698,079,475

693,792,951

651,451,004

606,964,885

80,280,412

54,905,508

271,934,878

136,989,547

196,739,013,389

192,941,204,820

173,797,761,474

87,811,244,914

182,652,853,207

140,293,814,081

136,634,536,646

111,097,685,474

23,244,313,422

17,374,865,707

14,761,806,260

11,209,868,888

8,528,530,421

10,743,687,047

5,849,739,107

5,960,482,742

214,425,697,050

168,412,366,835

157,246,082,013

128,268,037,104

411,164,710,439

361,353,571,655

331,043,843,487

216,079,282,018

53

III. Finance & Related Matters


1. Comprehensive Financial Information
(Unit: KRW)

1.1. Consolidated Balance Sheet

Category

15th period

14th period

13th period

12th period

146,423,716,060

Assets
Current assets

140,894,912,008

143,045,691,458

101,245,034,647

Cash and cash equivalents 3,564,132,678

11,619,424,502

5,489,047,002

3,687,056,563

Deposits
from
financial institutions
Accounts Receivable

252,077,886

3,240,937,209

39,657,293,520

34,685,000,643

29,789,826,809

26,168,194,814

Other receivables

19,390,077,851

5,893,668,688

6,577,607,180

6,884,051,563

5,582,500,000

5,424,820,421

Other financial assets

Inventories

75,925,522,371

82,315,461,632

84,372,086,361

49,797,060,608

Other current assets

7,886,689,640

6,381,356,543

10,982,546,220

6,042,913,469

Non-current assets

264,740,994,379

220,458,659,647

187,998,152,029

114,834,247,371

948,569,000

6,057,336,535

4,375,018,455

1,497,167,705

1,712,479,923

Available-for-sale financial
305,760,032
assets

1,305,760,032

1,503,033,255

1,734,937,497

Tangible assets

196,120,294,796

145,624,157,389

115,746,603,857

49,093,225,979

Intangible assets

56,723,206,387

46,245,190,820

41,962,645,403

34,830,814,369

Deposits
from
financial institutions
Other receivables

Deferred
income
tax
5,534,396,629
assets
Other non-current assets -

3,448,532,951

5,048,701,809

3,582,240,603

19,460,000,000

22,240,000,000

22,931,980,000

Total assets

411,164,710,439

361,353,571,655

331,043,843,487

216,079,282,018

Current liabilities

111,559,887,356

26,622,023,298

108,808,946,525

54,309,825,571

Accounts payable

863,947,756

936,448,102

64,432,909,449

35,858,598,312

Other payments

25,843,330,585

5,790,182,273

20,522,653,998

15,089,484,484

Short-term borrowing

84,253,322,775

19,366,185,948

23,641,575,001

3,109,334,993

Other current liabilities

599,286,240

529,206,975

211,808,077

252,407,782

Non-current liabilities

85,179,126,033

166,319,181,522

64,988,814,949

33,501,419,343

Long-term borrowing

84,400,766,146

165,570,483,063

64,065,429,067

32,757,464,911

Provisions

698,079,475

693,792,951

651,451,004

606,964,885

80,280,412

54,905,508

271,934,878

136,989,547

196,739,013,389

192,941,204,820

173,797,761,474

87,811,244,914

182,652,853,207

140,293,814,081

136,634,536,646

111,097,685,474

Retained earnings

23,244,313,422

17,374,865,707

14,761,806,260

11,209,868,888

Other capital

8,528,530,421

10,743,687,047

5,849,739,107

5,960,482,742

Total equity

214,425,697,050

168,412,366,835

157,246,082,013

128,268,037,104

Liabilities and
Shareholder

411,164,710,439

361,353,571,655

331,043,843,487

216,079,282,018

Liability

Retirement benefit
obligations
Total liabilities
Capital
Paid-in capital

54

( : )

15

14

13

12

66,744,353,876

52,657,248,020

46,967,596,162

46,494,421,845

8,349,704,138

7,493,294,238

5,079,202,472

6,114,027,518

5,909,854,866

3,622,353,632

3,383,326,662

3,529,397,052

5,869,447,715

2,613,059,447

3,551,937,372

3,434,230,867

5,869,447,715

2,613,059,447

3,551,937,372

3,434,230,867

405

183

280

279

2.
, ,
'XI. ' .

3.
( : )

.
15

14

13

12

145,086,493,795

137,318,114,434

140,615,319,662

99,025,555,911

2,546,271,163

10,071,947,222

2,989,438,922

1,381,157,535

252,077,886

3,240,937,209

39,362,493,520

34,685,000,643

29,789,826,809

25,838,194,814

19,365,589,771

5,893,668,688

6,577,607,180

6,884,051,563

5,582,500,000

5,424,820,421

75,925,522,371

80,129,309,501

84,372,086,361

49,001,377,785

7,886,616,970

6,538,188,380

11,051,782,504

7,255,016,584

267,580,987,376

222,669,692,080

189,460,464,245

115,224,210,648

948,569,000

5,983,114,035

4,300,795,955

1,261,472,705

1,498,662,923

305,760,032

1,305,760,032

1,503,033,255

1,734,937,497

7,301,905,855

7,301,905,855

7,301,905,855

7,944,565,855

195,498,894,396

144,860,958,371

114,870,320,814

48,274,183,004

53,101,137,879

42,112,437,015

37,381,389,012

29,455,736,465

5,390,175,179

3,327,834,852

4,902,342,604

3,127,555,904

19,460,000,000

22,240,000,000

22,240,000,000

412,667,481,171

359,987,806,514

330,075,783,907

214,249,766,559

55

1.2. Consolidated Statement of Comprehensive Income (Unit: KRW)

15th period

Category
Sales

14th period

13th period

12th period

66,744,353,876

52,657,248,020

46,967,596,162

46,494,421,845

Operating income

8,349,704,138

7,493,294,238

5,079,202,472

6,114,027,518

Pre-tax profit

5,909,854,866

3,622,353,632

3,383,326,662

3,529,397,052

Net Income

5,869,447,715

2,613,059,447

3,551,937,372

3,434,230,867

5,869,447,715

2,613,059,447

3,551,937,372

3,434,230,867

Non-controlling interests

Basic earnings per share

405

183

280

279

Dominant
holding

owners

2. Attention: Financial Information


The setting of standards for financial statements are adjusted by the K-IFRS, International Financial Reporting
Standards in Korea. Regarding other detailed elements of financial statements and other aspects, please refer to
the XI. Financial Statements, etc.

3. Details about Individual Financial Statements


1. Simple Balance Sheet (Unit: KRW)
15th period

14th period

13th period

12th period

Assets
Current assets

145,086,493,795

137,318,114,434

140,615,319,662

99,025,555,911

2,546,271,163

10,071,947,222

2,989,438,922

1,381,157,535

252,077,886

3,240,937,209

Accounts Receivable

39,362,493,520

34,685,000,643

29,789,826,809

25,838,194,814

Other receivables

19,365,589,771

5,893,668,688

6,577,607,180

6,884,051,563

5,582,500,000

5,424,820,421

75,925,522,371

80,129,309,501

84,372,086,361

49,001,377,785

7,886,616,970

6,538,188,380

11,051,782,504

7,255,016,584

267,580,987,376

222,669,692,080

189,460,464,245

115,224,210,648

948,569,000

5,983,114,035

4,300,795,955

1,261,472,705

1,498,662,923

305,760,032

1,305,760,032

1,503,033,255

1,734,937,497

7,301,905,855

7,301,905,855

7,301,905,855

7,944,565,855

195,498,894,396

144,860,958,371

114,870,320,814

48,274,183,004

53,101,137,879

42,112,437,015

37,381,389,012

29,455,736,465

5,390,175,179

3,327,834,852

4,902,342,604

3,127,555,904

19,460,000,000

22,240,000,000

22,240,000,000

412,667,481,171

359,987,806,514

330,075,783,907

214,249,766,559

Cash and cash equivalents


Financial institution Deposits

Other financial assets


Inventories
Other current assets
Non-current assets
Financial institution Deposits
Other receivables
Available-for-sale financial assets
Investments in subordinate entities
and affiliates
Tangible assets
Intangible assets
Deferred tax assets
Other non-current assets
Total assets
Liabilities

56

113,680,748,689

26,254,164,413

108,892,591,669

53,975,864,417

804,062,180

826,128,074

64,388,287,635

35,797,810,838

28,024,077,494

5,555,885,908

20,770,803,164

14,949,925,437

84,253,322,775

19,366,185,948

23,641,575,001

3,109,334,993

599,286,240

505,964,483

91,925,869

118,793,149

85,167,784,505

166,318,153,660

64,966,902,712

33,464,844,568

84,400,766,146

165,570,483,063

64,065,429,067

32,757,464,911

698,079,475

693,792,951

651,451,004

606,964,885

68,938,884

53,877,646

250,022,641

100,414,772

198,848,533,194

192,572,318,073

173,859,494,381

87,440,708,985

182,652,853,207

140,293,814,081

136,634,536,646

111,097,685,474

22,577,038,022

16,307,289,914

13,664,661,400

9,728,184,873

8,589,056,748

10,814,384,446

5,917,091,480

5,983,187,227

213,818,947,977

167,415,488,441

156,216,289,526

126,809,057,574

412,667,481,171

359,987,806,514

330,075,783,907

214,249,766,559

57

Current liabilities

113,680,748,689

26,254,164,413

108,892,591,669

53,975,864,417

804,062,180

826,128,074

64,388,287,635

35,797,810,838

Other repayments of loans

28,024,077,494

5,555,885,908

20,770,803,164

14,949,925,437

Borrowing

84,253,322,775

19,366,185,948

23,641,575,001

3,109,334,993

599,286,240

505,964,483

91,925,869

118,793,149

Non-current liabilities

85,167,784,505

166,318,153,660

64,966,902,712

33,464,844,568

Borrowing

84,400,766,146

165,570,483,063

64,065,429,067

32,757,464,911

Provisions

698,079,475

693,792,951

651,451,004

606,964,885

68,938,884

53,877,646

250,022,641

100,414,772

198,848,533,194

192,572,318,073

173,859,494,381

87,440,708,985

182,652,853,207

140,293,814,081

136,634,536,646

111,097,685,474

22,577,038,022

16,307,289,914

13,664,661,400

9,728,184,873

8,589,056,748

10,814,384,446

5,917,091,480

5,983,187,227

Total equity

213,818,947,977

167,415,488,441

156,216,289,526

126,809,057,574

Liabilities and Shareholders' Equity

412,667,481,171

359,987,806,514

330,075,783,907

214,249,766,559

Trades payable

Other current liabilities

Retirement benefit obligations


Total liabilities
Capital
Paid-in capital
Retained earnings
Other capital

58

( : )

15

14

13

12

64,708,353,876

50,083,248,020

44,707,596,162

42,273,146,845

8,758,792,395

7,456,923,103

5,083,772,146

5,001,419,870

6,292,914,005

3,552,827,215

3,327,916,489

2,772,074,162

6,269,748,108

2,642,628,514

3,936,476,527

2,401,324,435

432

185

310

195

4.
, ,
'XI. ' .

2.


15

2014.12.31

14

2013.12.31

13

2012.12.31
( : )

15

14

13

146,423,716,060

140,894,912,008

143,045,691,458

3,564,132,678

11,619,424,502

5,489,047,002

59

2. Simple list of profit and loss settlements (Unit: KRW)


15th period

Category
Sales

14th period

13th period

12th period

64,708,353,876

50,083,248,020

44,707,596,162

42,273,146,845

Operating profits

8,758,792,395

7,456,923,103

5,083,772,146

5,001,419,870

Profits before income tax

6,292,914,005

3,552,827,215

3,327,916,489

2,772,074,162

Net Income

6,269,748,108

2,642,628,514

3,936,476,527

2,401,324,435

432

185

310

195

Basic earnings per share

4. Detail of Financial Statements


The standards of financial statements are adjusted by the K-IFRS, International Financial Reporting
Standards in Korea. Regarding other detailed elements for financial statements and other aspects, please refer
to the XI. Financial Statements, etc.

2. ConsolidatedFinancial Statements
Consolidated Balance Sheet
15th period

2014.1.1-2014.12.31

14th period

2013.1.1-2013.12.31

13th period

2012.1.1-2012.12.31

(Unit: KRW)
15th period

14th period

13th period

Assets
Current assets
Cash and cash equivalents

146,423,716,060

140,894,912,008

143,045,691,458

3,564,132,678

11,619,424,502

5,489,047,002

60

252,077,886

39,657,293,520

34,685,000,643

29,789,826,809

19,390,077,851

5,893,668,688

6,577,607,180
5,582,500,000

75,925,522,371

82,315,461,632

84,372,086,361

7,886,689,640

6,381,356,543

10,982,546,220

264,740,994,379

220,458,659,647

187,998,152,029

6,057,336,535

4,375,018,455

1,497,167,705

305,760,032

1,305,760,032

1,503,033,255

196,120,294,796

145,624,157,389

115,746,603,857

56,723,206,387

46,245,190,820

41,962,645,403

5,534,396,629

3,448,532,951

5,048,701,809

19,460,000,000

22,240,000,000

411,164,710,439

361,353,571,655

331,043,843,487

111,559,887,356

26,622,023,298

108,808,946,525

863,947,756

936,448,102

64,432,909,449

25,843,330,585

5,790,182,273

20,522,653,998

84,253,322,775

19,366,185,948

23,641,575,001

599,286,240

529,206,975

211,808,077

85,179,126,033

166,319,181,522

64,988,814,949

84,400,766,146

165,570,483,063

64,065,429,067

698,079,475

693,792,951

651,451,004

80,280,412

54,905,508

271,934,878

196,739,013,389

192,941,204,820

173,797,761,474

182,652,853,207

140,293,814,081

136,634,536,646

23,244,313,422

17,374,865,707

14,761,806,260

8,528,530,421

10,743,687,047

5,849,739,107

214,425,697,050

168,412,366,835

157,246,082,013

411,164,710,439

361,353,571,655

331,043,843,487

()

61

Financial
institution
Deposits
Accounts Receivable
Other receivables
Other financial assets
Inventories

252,077,886
39,657,293,520
19,390,077,851

34,685,000,643
5,893,668,688

75,925,522,371
7,886,689,640
264,740,994,379

82,315,461,632
6,381,356,543
220,458,659,647

29,789,826,809
6,577,607,180
5,582,500,000
84,372,086,361
10,982,546,220
187,998,152,029

6,057,336,535

4,375,018,455

1,497,167,705

305,760,032
196,120,294,796
56,723,206,387
5,534,396,629
411,164,710,439

1,305,760,032
145,624,157,389
46,245,190,820
3,448,532,951
19,460,000,000
361,353,571,655

1,503,033,255
115,746,603,857
41,962,645,403
5,048,701,809
22,240,000,000
331,043,843,487

111,559,887,356
863,947,756

26,622,023,298
936,448,102

108,808,946,525
64,432,909,449

25,843,330,585

5,790,182,273

20,522,653,998

84,253,322,775

19,366,185,948

23,641,575,001

599,286,240

529,206,975

211,808,077

Non-current liabilities

85,179,126,033

166,319,181,522

64,988,814,949

Long-term borrowing

84,400,766,146

165,570,483,063

64,065,429,067

698,079,475

693,792,951

651,451,004

80,280,412

54,905,508

271,934,878

196,739,013,389

192,941,204,820

173,797,761,474

182,652,853,207

140,293,814,081

136,634,536,646

23,244,313,422

17,374,865,707

14,761,806,260

8,528,530,421

10,743,687,047

5,849,739,107

214,425,697,050

168,412,366,835

157,246,082,013

411,164,710,439

361,353,571,655

331,043,843,487

Other current assets


Non-current assets
Financial
institution
Deposits
Available-for-sale financial
assets
Other financial assets
Tangible assets
Intangible assets
Deferred tax assets
Other non-current assets
Total assets
Liabilities
Current liabilities
Trades payable
Other debt payments
Short-term borrowing
Other current liabilities

Provisions
Retirement benefit
obligations
Total liabilities
Capital
Paid-in capital
Retained
earnings
(accumulated deficit)
Other capital
Non-controlling interests
Total equity
Total
Equity

Liability

and

62


15 2014.01.01 2014.12.31
14 2013.01.01 2013.12.31
13 2012.01.01 2012.12.31
( : )
15

14

13

()

66,744,353,876

52,657,248,020

46,967,596,162

23,495,314,130

17,083,909,155

15,166,127,368

43,249,039,746

35,573,338,865

31,801,468,794

34,110,968,673

26,187,112,075

24,458,459,849

788,366,935

1,892,932,552

2,263,806,473

8,349,704,138

7,493,294,238

5,079,202,472

524,541,923

576,780,600

354,086,654

113,928,146

754,510,809

2,275,596,004

805,223,722

1,215,822,502

1,646,295,074

3,655,686,771

4,909,032,899

1,420,661,534

()

5,909,854,866

3,622,353,632

3,383,326,662

40,407,151

(1,009,294,185)

168,610,710

5,869,447,715

2,613,059,447

3,551,937,372

10,171,072

(3,345,026)

(44,647,888)

5,879,618,787

2,609,714,421

3,507,289,484

5,869,447,715

2,613,059,447

3,551,937,372

5,879,618,787

2,609,714,421

3,507,289,484

()

405

183

280

()

383

144

280

()

()

()

63

Consolidated Statement of Profit or Loss


15th period from 2014.01.01 to 2014.12.31
14th period from 2013.01.01 to 2013.12.31
13th period from 2012.01.01 to 2012.12.31
15th period

(Unit: KRW)

14th period

13th period

Revenues (Sales)

66,744,353,876

52,657,248,020

46,967,596,162

Cost of sales

23,495,314,130

17,083,909,155

15,166,127,368

Gross profit

43,249,039,746

35,573,338,865

31,801,468,794

Selling and administrative


expenses

34,110,968,673

26,187,112,075

24,458,459,849

788,366,935

1,892,932,552

2,263,806,473

8,349,704,138

7,493,294,238

5,079,202,472

Other operational income

524,541,923

576,780,600

354,086,654

Other operational costs

113,928,146

754,510,809

2,275,596,004

Financial gains

805,223,722

1,215,822,502

1,646,295,074

Financial costs

3,655,686,771

4,909,032,899

1,420,661,534

Pretax
(tax
on
enterprise) net profits
(losses)
Income tax expenses

5,909,854,866

3,622,353,632

3,383,326,662

40,407,151

(1,009,294,185)

168,610,710

5,869,447,715

2,613,059,447

3,551,937,372

10,171,072

(3,345,026)

(44,647,888)

5,879,618,787

2,609,714,421

3,507,289,484

5,869,447,715

2,613,059,447

3,551,937,372

5,879,618,787

2,609,714,421

3,507,289,484

405

183

280

383

144

280

Research
and
development expenses
Operation profit (loss)

Net income (loss)


Other profits and
losses in total
Profits and losses in total

Current net income (loss)


distribution
Parent company holdings
Non-controlling interests
Total
income(loss)distributi
on
Parent company holdings
Non-controlling interests
Earnings per share
Basic earnings per share
(loss)
Diluted earnings per share
(loss)

64


15 2014.01.01 2014.12.31
14 2013.01.01 2013.12.31
13 2012.01.01 2012.12.31

(: )

2012.01.01 ()

6,145,637
,500

104,952,04
7,974

11,209,86
8,888
3,551,937
,372

5,960,482
,742

(
)

(44,647,
888)

160,959
,500
(762,711,
500)

4,456,746
,815
(20,156,43
3,357)

7,069,308
,500
7,069,308
,500

129,565,22
8,146
129,565,22
8,146

128,268,03
7,104
3,551,937
,372
(44,647,
888)

1,030,061
,599
(1,096,157
,346)

1,030,061
,599
3,521,548
,969
20,919,14
4,857

5,849,729
,107
5,849,739
,107

(3,345,
026)

157,246,08
2,013
157,246,08
2,013
2,613,059
,447
(3,345,
026)

281,364
,607

281,364
,607

4,615,928
,359

3,659,277
,435
4,615,928
,359

2012.12.31 ()
2013.01.01 ()

(
)

14,761,80
6,260
14,761,80
6,260
2,613,059
,447

128,380
,500

3,530,896
,935

7,197,689
,000
7,197,689
,000

2013.12.31 ()
2014.01.01 ()

133,096,12
5,081
133,096,12
5,081

(
)

17,374,86
5,707
17,374,86
5,707
5,869,447
,715

10,743,68
7,047
10,743,68
7,047

10,171,
072

168,412,36
6,835
168,412,36
6,835
5,869,447
,715
10,171,
072

104,635
,035

104,635
,035

(3,077,285
,573)
747,322
,840
8,528,530
,421

39,281,72
3,553
747,322
,840
214,425,69
7,050

2,247,191
,000

40,111,81
8,126

9,444,880
,000

173,207,94
3,207

2014.12.31 ()

23,244,31
3,422

65

Consolidated Statement of Changes in Equity


15th period from 2014.01.01 to 2014.12.31
14thperiod from 2013.01.01 to 2013.12.31
13thperiod from 2012.01.01 to 2012.12.31
(Unit: KRW)
Capital

Capital

Equity attributable to owners of parent company


Share issue
Equity
Profit reserves Other capital
premium

Noncontrolling
interests

Total capital

Total
2012.01.01 (Based capital)
Net income (loss)

Changes
equity

104,952,04
7,974

Total
method
compreh Equity
investments
ensive
Overseas transfers
in income

11,209,868
,888
3,551,937,
372

Changes
in
capital
shareholding
Holding stock options
Consideration of conversion
rights
2012.12.31 (Ending capital)
2013.01.01 (Beginning capital)

5,960,482,
742

(44,647,8
88)

Stock option Recognition


Stock option exercise

Changes
equity

6,145,637,
500

160,959,
500
(762,711,
500)

4,456,746,
815
(20,156,433
,357)

7,069,308,
500
7,069,308,
500

129,565,22
8,146
129,565,22
8,146

Net
income
(loss)
Equity
Total
comprehensiv method
e income
Overseas
in
transfers

14,761,806
,260
14,761,806
,260
2,613,059,
447

Stock option Recognition

128,268,03
7,104
3,551,937,
372
(44,647,8
88)

1,030,061,
599
(1,096,157,
346)

1,030,061,
599
3,521,548,
969
20,919,144
,857

5,849,729,
107
5,849,739,
107

(3,345,0
26)

157,246,08
2,013
157,246,08
2,013
2,613,059,
447
(3,345,0
26)

281,364,
607

281,364,
607

4,615,928,
359

3,659,277,
435
4,615,928,
359

Stock options exercised


Changes
in
shareholdings

capital

128,380,
500

3,530,896,
935

Holding stock options


Consideration of conversion
right
7,197,689,
000
7,197,689,
000

2013.12.31 (final capital))


2014.01.01 (Beginning capital)

Changes
equity

133,096,12
5,081
133,096,12
5,081

Net
income
(loss)
Equity
Total
comprehensiv method
Overseas
e income
in
transfers

17,374,865
,707
17,374,865
,707
5,869,447,
715

Stock option Recognition

10,743,687
,047
10,743,687
,047

10,171,
072

168,412,36
6,835
168,412,36
6,835
5,869,447,
715
10,171,
072

104,635,
035

104,635,
035

(3,077,285,
573)
747,322,
840

39,281,723
,553
747,322,
840

8,528,530,
421

214,425,69
7,050

Stock option exercise


Changes
in
shareholdings

capital
40,111,818
,126

Holding stock options


Consideration of conversion
rights
2014.12.31 (final capital)

9,444,880,
000

173,207,94
3,207

23,244,313
,422

66


15 2014.01.01 2014.12.31
14 2013.01.01 2013.12.31
13 2012.01.01

2012.12.31
( : )

15

14

13

17,325,774,736

(72,377,186,539)

(5,881,811,465)

17,621,134,073

(67,655,960,703)

(1,927,413,418)

70,092,354

353,723,574

688,920,099

41,626,000

()

1,036,633,903

(4,869,118,732)

(3,341,960,849)

(1,402,085,594)

(205,830,678)

(1,342,983,297)

(44,566,614,111)

(27,211,638,841)

(66,397,939,506)

5,541,414,400

41,698,047,229

67

Consolidated Statement of Cash Flow


15th period 2014.01.01 to 2014.12.31
14th period 2013.01.01 to 2013.12.31
13th period 2012.01.01 to 2012.12.31

(Unit:KRW)
15th period

14th period

13th period

Cash flow from operating


activities

17,325,774,736

(72,377,186,539)

(5,881,811,465)

Cash generated from operatio

17,621,134,073

(67,655,960,703)

(1,927,413,418)

70,092,354

353,723,574

688,920,099

Interest received
Dividends received

41,626,000

Interest payable

1,036,633,903

(4,869,118,732)

(3,341,960,849)

Income tax paid

(1,402,085,594)

(205,830,678)

(1,342,983,297)

(44,566,614,111)

(27,211,638,841)

(66,397,939,506)

5,541,414,400

41,698,047,229

Cash flows
Decrease in deposits in
financial institutions

69

2,122,685,095

5,378,358,596

372,872,193

1,119,375,000

143,599,906

167,377,095

743,796,491

1,460,747,328

1,050,000

121,045,755

2,071,561

1,818,182

10,000,000

1,145,154

2,928,439

56,690

110,030,420

399,710,000

554,358,833

(5,283,620,520)

(37,760,618,906)
(5,376,100,498)

(2,528,000,000)

(38,387,500)

(277,617,440)

(411,570,282)

(3,000,000,000)

(603,306,071)

(533,489,910)

(818,041,387)

(670,024,200)

(16,500,000)

(1,248,020,533)

(4,500,000)

(174,127,349)

(1,053,334,236)

(3,290,524,802)

(144,847,660)

(1,900,000)

(94,228,400)

(99,982,599)

(196,553,989)

(373,819,516)

(24,636,211,126)

(14,675,669,274)

(53,531,797,915)

(8,616,702,376)

(4,070,102,174)

(6,559,946,624)

(276,217,302)

(155,314,613)

(314,426,130)

(
)

(10,128,791,186)

(6,484,411,442)

(4,679,974,865)

19,156,237,722

105,725,930,677

74,117,203,682

3,521,548,969

33,714,257,101

70,303,892,184

40,188,062,474

20,000,000,000

110,000,000,000

50,000,000,000

10,000,000,000
(33,192,302,239)

(74,577,086,507)

(19,588,476,961)

(13,412,750)

(875,000)

(3,930,800)

29,309,829

(6,727,797)

(35,462,272)

()

(8,055,291,824)

6,130,377,500

1,801,990,439

11,619,424,502

5,489,047,002

3,687,056,563

3,564,132,678

11,619,424,502

5,489,047,002

(11,352,304,390)

70

Proceeds from disposal of short-term


financial assets
Proceeds from disposal of availablefor-sale financial assets
Decrease in short-term loans

2,122,685,095

5,378,358,596

372,872,193

1,119,375,000

143,599,906

167,377,095

743,796,491

1,460,747,328

1,050,000

121,045,755

2,071,561

Proceeds from disposal of vehicles

1,818,182

10,000,000

Proceeds from disposal of equipment

1,145,154

2,928,439

Proceeds from disposal of machinery

Decrease in long-term loans


Decrease in deposits
Increase in deposits in financial
institutions
Acquisition of short-term financial
instruments

56,690
110,030,420

399,710,000

554,358,833

(5,283,620,520)

(37,760,618,906)
(5,376,100,498)

Increase in short-term loans


Increase in deposits

(2,528,000,000)
(38,387,500)

Increase in Long-term loans

(277,617,440)

(411,570,282)

(3,000,000,000)

Acquisition of land

(603,306,071)

(144,847,660)

Acquisition of properties

(533,489,910)

(818,041,387)

(670,024,200)

Acquisition of structures

(16,500,000)

(1,248,020,533)

(4,500,000)

Acquisition of machinery

(174,127,349)

(1,053,334,236)

(3,290,524,802)

Acquisition of Facilities

(1,900,000)

Acquisition of vehicles

(94,228,400)

Acquisition of Facilities

(99,982,599)

(196,553,989)

(373,819,516)

Assets under construction

(24,636,211,126)

(14,675,669,274)

(53,531,797,915)

(8,616,702,376)

(4,070,102,174)

(6,559,946,624)

(276,217,302)

(155,314,613)

(314,426,130)

(10,128,791,186)

(6,484,411,442)

(4,679,974,865)

19,156,237,722

105,725,930,677

74,117,203,682

Acquisition of R & D
Acquisition of other intangible
assets
Interest expenses(Borrowing capital)
Cash flow from financing activities
Exercise of stock options
Increases in short-term borrowing
Increase in long-term borrowing
Issuance of convertible
bonds
Decrease in short-term borrowing
Exercise of share options
Repayment of convertible
bonds
Impact of exchange rate
fluctuations on cash and cash
Net increase(decrease) in cash and
cash equivalents
Cash and cash equivalents at the
beginning of year
Cash and cash equivalents at the end
of year

3,521,548,969
33,714,257,101

70,303,892,184

40,188,062,474

20,000,000,000

110,000,000,000

50,000,000,000

(33,192,302,239)

(74,577,086,507)

(19,588,476,961)

(13,412,750)

(875,000)

(3,930,800)

29,309,829

(6,727,797)

(35,462,272)

(8,055,291,824)

6,130,377,500

1,801,990,439

11,619,424,502

5,489,047,002

3,687,056,563

3,564,132,678

11,619,424,502

5,489,047,002

10,000,000,000

(11,352,304,390)

71

3.

15() 2014 12 31
14() 2013 12 31

1.
(1)
( "") 2000 11 17
, 2009
. , 2009
, .
2006 ,
9,444,880 .
.

()

9,103,074

48.19%

1,131

5.98%

9,785,555

45.83%

18,889,760

100.00%

(2) .

Celltrion Pharma USA,


Inc.
()

,

,

12 31

100.00%

12 31

100.00%

72

3. Consolidated Financial Statement Comments

15th period 2014.01.01 to 2014.12.31


14th period 2013.01.01 to 2013.12.31
Celltrion Pharmaceutical Co., Ltd. and its subsidiaries
1. Company Profile
(1)Overview of the Parent Company
Celltrion Pharmaceutical Co., Ltd. (here after called "Our company") was established on November 17, 2000
and its main activity is software development. After the merger with Hanseo Pharmaceutical Co., Ltd. in 2009,our
company is mainly engaged in the manufacturing and marketing of pharmaceuticals. In addition, in 2009,our
company set its headquarters at Yeoksam-dong, Gangnam-gu, Seoul, and the name of our company changed
from Kodineoseu to Celltrion Pharmaceutical.
Our company was listed on the Korea Exchange and KOSDAQ market in 2006, and the total capital is
9,444,880 thousand won by the end of the current period after having gone through free or paid capital increases
and deductions several times since its establishment.
Details of the major shareholders by the end of the current period are as follows:
Name of Shareholder

Number of shares owned

Celltrion Co., Ltd.

% of Ownership

9,103,074 shares

48.19%

1,131 shares

5.98%

Others

9,785,555 shares

45.83%

Total

18,889,760 shares

100.00%

Treasury stock

(2)On December 31st, 2010, the subsidiary status was as follows:

Company Name
Celltrion
Inc.

Pharma

Location
USA,

USA

Republic
Celltrion Chemical Laboratory
Korea

Main Business

Settlement % of Ownership
Decembe
r 31st

100.00%

Research and development of new December


of drugs and fine chemicals-related
31st
technologies, Technical Sales

100.00%

Services, Retail and Wholesale

73

(3) ( ) .
<>
( : )

Celltrion Pharma USA, Inc.

257,332

(53,811)

(43,640)

5,006,598

889,432

8,223,040

149,642

149,642

<>
( : )

Celltrion Pharma USA,


Inc.

300,972

(53,112)

(56,457)

4,493,455

525,932

4,496,720

464,538

464,538

2.
13 1 1

.
2015 3 6 , 2015 3 26
.
(1)

.
.
.

74

(3)The summary financial information of subsidiaries


<Current period>
(Unit:KRW 000)

Company name

Total assets

Celltrion Pharma USA, Inc.


Celltrionm
Laboratory

Chemical

Total liabilities

Total
Profit or loss comprehensive
income

Sales

257,332

(53,811)

(43,640)

5,006,598

889,432

8,223,040

149,642

149,642

<Last period>
(Unit:KRW 000)
Company name
Celltrion
Inc.

Pharma

Total assets
USA,

Celltrionm Chemical
Laboratory

Total liabilities

Sales

Profit or loss

300,972

4,493,455

525,932

4,496,720

Total
comprehensive
income

(53,112)

(56,457)

464,538

464,538

2. Basis for preparation of the consolidated financial statements


For the preparation of financial statements in the External Audit, the company adopts the
International Accounting Standards (IAS), which are established by the International Accounting
Standards Committee (IASC), and Article 13, Item 1 from South Koreas Accounting Standards.
Our financial statements have been approved by the Board of Directors on March 6, 2015 and
approved at the Shareholders Meeting.
(1) Measurement standard
Except for the major items listed in the following financial statements, the others are prepared on the
basis of historical cost.
. Available-for-sale financial instruments are measured at fair value.
. Business combination that is measured at fair value requires contingent consideration.

75

(2)

.
.
(3)
,
, ,
.

.
,
.


.
12: -

25:
16 29: -


, .
3
,
.

76

(2) Functional and quoted currency


Items in our financial statements are indicated by the currency KRW (functional currency) that is used
in our operating activities, which is also the quoted currency in preparing financial statements.
(3) Estimates and judgements
According to K-IFRS, in preparing financial statements, matters that affect assets, liabilities and
revenues before the end of the reporting period, the application of accounting policies and reported
amount of costs require the judgements of management. Actual results may change under different
circumstances.
The basic assumption for estimates are constantly being reviewed. Changes in the accounting
estimates are recognized as the potential influence in the future.
Uncertainties of assumptions and estimates
Information about the uncertainties of assumptions and estimates that have significant risks from
possible adjustment within the reporting period are as follows:
Note 12: Impairment Test-main assumptions about deducing the recoverable amout,
including the reacoverability of goodwill and development cost.
Note 25: The recognition of deferred tax assets.
Note 16&29: Provisions and contingent liabilityan assumption about the possible outflow and the
amount of resources.

Fair value measurement


Our accounting policies and disclosures are required for most financial and non-financial assets and the
fair value measurement of liabilities. The Company is in the process of establishing a fair value
evaluation policy and procedure, which is responsible for the evaluation of department administration.
It includes all important fair value measurements at Level 3 of the fair value hierarchy. The results will
be directly reported to the financial executive.

77


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The evaluation department regularly reviews important inputs that cannot be observed. If third-party
information such as rating agencies are used in fair value measurements, the evaluation department
will include these assessment based on the third-partys valuation with respect to the fair value
hierarchy. And it will estimate whether they meet the requirements of the standard documents.
When measuring the fair value of assets or liability, the group uses the observable input amount to
determine the fair value. The fair value depends on the earlier input amount in the estimation.
Level 1: It is possible for the group to acquire unadjusted prices of identical assets or liability in the
active market on the recognition date.
Level 2: In addition to quoted prices in Level 1, directly or indirectly observable input variables of
assets or liability should also be measured.
Level 3: Non-observable input variable related to assets or liability.
When assessing the fair value of assets or liability, we decide the amount of input variable according
to the lowest level in which it belongs to. We should also recognize to what extent does the fair value
moved through the hierarchy at the end of the period in which the adjustment occurred.
Note 4: Scale of financial products and fair
value
(4) Changes in Accounting policy
In current financial statements and financial statements of the last period that are used for comparison,
except for those have applied the revised standard documents that were effective from January 1, 2014
(described below), the Company applies the same accounting policies.
Investment Company (K-IFRS No. 1110, "Consolidated Financial Statements", No. 1112, Disclosure
in the equity of other company and No.1027, amendment of separate financial statements)
Offsetting financial assets and financial liabilities. (K-IFRS No. 1032 Financial Instruments:
Amendment)
Disclosure in the recoverable amount of non-financial assets: (Amendment of K-IFRS No.
1036 impairment loss on assets)
Financial Accounting Standards No. 2121 Amortization
The changes in the accounting policy do not affect the consolidated financial statement by any
reasonable amount.

79


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Offsetting financial assets and financial liabilities


The amendment of K-IFRS No. 1032 Financial Instrument: presentation shall be applied to this
company after Jan. 1st, 2014. This Standard prescribes a legally enforceable right for the Company to
set off the recognized assets and liabilities. If the Company intends either to settle on a net basis, or
to realize the assets and settle the liabilities simultaneously, financial assets and liabilities shall be
offset and the net amount presented in the statements of financial position.
Legally enforceable right to offset should not be dependent on future events. If the Company and the
other party are both in nominal business relations, in the case of insolvency or bankruptcy, it should be
legally enforced. The amendment to K-IFRS 1032 does not have a significant impact on our financial
statements.
Impairment loss disclosure
For financial years that begin after January 1, 2014, the company applies the amendment to IFRS
1036 Impairment of Assets. This Standard amends the recoverable impairment loss (or reversal)
recognized by impairment loss (or reversal), which is disclosed by individual assets or cash-generating
units. The amendment to IFRS 1036 does not have a significant impact on our financial statements.
Investment Company
Amendment of Investment Company
If a qualified investment company gets control over the other companies, the company can not
combine its subsidiaries (except for the condition that the subsidiaries offer labor services to the
projects of the investment company) and apply to the K-IFRS No.1103 Bisiness Combination. In
addition, the asset invested in the subsidiaries shall be measured at the fair value and reflected in
the current gain and loss in accordance with the K-IFRS No.1039 Financial Instrument: recognition
and measurement. However, if the parent company of the investment company is not an investment
firm itself, we need to combine all applicable companies in control, including the companies
controlled by subsidiaries.
Transitional provision in IFRS article 10 will not affect the groups consolidated financial report to a
significant extent.
Contribution
In accordance with IFRS No. 2121, the 'contribution' is defined as the activity that caused the
contribution payment obligations specified in the incident, which recognizes the contribution liability law.
If the duty incident occurred regularly, the contributed liabilities should be recognized gradually over a
period of time.
If the incident reaching the minimum activity threshold is mandatory, the liabilities corresponding to
this should be recognized before reaching the threshold. Also, assets should be recognized when the
contributions are paid in advance and the company has no responsibility to pay its dues immediately.
Even if it is impossible not to take responsibility, according to this explanation, the contribution shall
not be recognized as a liability until the obligation occurs.
Transitional provision in IFRS article 2121 will not affect the groups consolidated financial report to a
significant extent.

81

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3. Significant accounting policies


To accord with the K-IFRS, the company accounts the significant policies that are applied in preparing
financial statements in the following part. Except for the changes in accounting policy that are
explained in Note 2. (4), current financial statements and financial statements of the last period that
are used for comparison applies the same accounting policies.

(1) Combination
Business Combination
A business combination must be accounted for by applying the acquisition method, unless it is a
combination involving entities or businesses under common control.
If the transfer cost measured at fair value is in accordance with the observable acquisition of the net
asset, the transfer cost should be measured at fair value. If any goodwill, occurs as a result of the
business merger, an annual impairment loss test should be conducted. Bargain purchase gain should
be recognized as current gain and loss immediately.
In accordance with the K-IFRS No. 1032 and No. 1039, after excluding the recognized issue costs of
security and bonds, merger-related costs should be recognized during the labor service period.
The Consideration transferred does not include the amounts related to the settlement of existing
relationships. Settlement amounts of existing relationships are generally recognized in profit or loss.
Contingent consideration is measured at fair value on the acquisition date. If contingent consideration
is classified as equity, it will not be re-measured and its subsequent settlement will be accounted for
within equity. If contingent consideration is not classified as equity, its subsequent recognized changes
of fair value are treated as fair value through profit or loss.
In case of an acquisitors stock-option based compensation which is in exchange for the acquired
company employees compensation, the compensation presented as standard in the acquisitors
market, as part or as a whole, shall be included in the measurement of transfering reward of the
business combination.
For compensation which is a part of the acquirers transferred costs and labor payment after the
merger, are determined by the market standard of compensation of the acquirers and the labor
compensation substitute before the merger.

83


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Subsidiary
The subsidiaries are under the control of their parent companies. This is only if the group is able to
affect or fluctuate the benefit of its invested enterprises. From the day that the parent company
acquires the controlling power until it loses such power, the financial statement of subsidiaries is
consistently included in the consolidated financial statements.

Loss of control
Subsidiaries assets and liabilities should be excluded from the consolidated financial statement if the
parent company loses control over it. The profit and loss occurred as a result of the loss of control shall
be recognized immediately. If control is lost, the parent company shall recognize the residual
investment regarding its subsidiaries at the fair value.
Elimination of intercompany transactions
All intercompany transactions, including balances, revenue and expense related to them, are eliminated
in preparing the consolidated financial statements when profits are not realized. Meanwhile, the
unrealized profits incurred from transactions between the Company and the investee companies are
eliminated in the same way unless there is asset impairment evidence proving unrealized losses.
(2) Cash and cash equivalent
The Companys cash is comprised of cash on hand and demand deposits. For short-term, highly liquid
investments that are readily convertible to known amounts of cash and which are subject to an
insignificant risk of changes in value are classified as cash equivalents.
(3) Inventory
Inventories shall be measured using the lower of cost and net realizable value. The cost of inventories
shall be assigned by using the first-in, first out (FIFO) formula. Acquisition cost includes purchase cost,
conversion cost and all other costs incurred in bringing the inventories to their present conditions.
When inventories are sold, the carrying amount of those inventories shall be recognized as an expense
in the period in which the related revenue is recognized. The amount of any write-downs of inventories
to net realizable value and all losses of inventories shall be recognized as expenses in the periods in
which the write-downs or losses occur. The amount of any reversal of a write-down of inventories
arising from an increase in the net realizable value shall be recognized as a reduction in the amount of
inventories recognized as an expense in the period in which the reversal occurs.
(4) Non-derivative financial assets
With regards to recognition and measurement of financial assets, the company is recognizing when
the company is an integral part of the contract and the company is classifying the assets into four
categories: finanacial assets at fair value through profit or loss, held-to-maturity, loans & receivables,
and available-for-sale.
Financial assets are measured at a fair value in the initial mearsurment. If it is not financial assets at
fair value through profit or losses, the company is adjusting fair value of assets by adding or
85

subtracting the initially recognized acquisition cost that is the direct transaction expenses of acquisition
of assets.



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1. Financial Assets at Fair Value Through Profit or Loss


If it is Avaiable-for-sale or catergorized as a Financial Assets at Fair Value Through Profit or Loss at
the initial recognition date, it is classified as Financial Assets at Fair Value Through Profit or Loss
2. Held-To-Maturity
If it has fixed maturity date or payment amount, it is a non-derivative fianancial assets with decision
rights and the intention of holding until the maturity date, it is classified as Held-To-Maturity.
3. Loans and Receivables
The amount is fixed or can be decided and the non-derivative financial assets without price in the
market is classified as Loans and Receivables, it is estimated as amortized cost with effective interest
rate method after the initial recognition.
4. Available-For-Sale
Available-For-Sale is the non-derivative financial assets that are classified as Available-For-Sale, or that
are not classified as Financial Assets at Fair Value through Profit or Loss, Held-To-Maturity, Loans and
Receivables. It is valued at a fair price after the initial recognition.
5. Disposal of financial assets
Financial assets are disposed of under two circumstances. The first one happens when the possibility of
future cash inflows terminates or the claim right to future cash inflows is transferred, which results in
the transfer of most of the risks and rewards that ownership posed to the Group's financial assets.
Under the second circumstance, the Group cannot control the financial asset even though there has
been no transfer of the risks and rewards that its ownership poses to the Groups financial assets.
If the group company sold the rights of cash flows, the group company will continue to recognize the
received amount as a liability if the group company has the most of the risk and rewards of acquiring
financial assets
6. Setoff of financial assets and liabilities
The group company does setoff only if there is a legal right to setoff the assets and liabilities or there is
a intention to settle liabilities and realize the assets at the same time.
(5) Non-derivative financial liability
According to the substantial contents on the contract and definition of financial liabilities, the Group has
classified financial liabilities either as financial liabilities recognized as current profits or losses or as
other financial liabilities. The Group will only confirm and combine balance sheets when becoming party
to a contract.

87



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a) Financial liabilities recognized as current profits or losses measured by fair value.


Short-term financial liabilities and current profit or loss financial liabilities that are recognized on the
initial day, are categorized as current profit or loss financial liabilities, initially recognized issue and
directly related transaction cost are to be calculated into current profit or loss. Financial liabilities
recognized as current profits or losses are initially measured using fair value and, when changes in fair
value occur, they are also to be recognized as current profits or losses. Also, issuing cost and related
transaction cost that were incurred upon initial recognition shall be immediately recognized as current
profit or loss in the period in which they are incurred.
b) Other financial liabilities
Non-derivative financial liabilities that are not classified as financial liabilities recognized as current
profits or losses are classified as other financial liabilities. Other financial liabilities are measured at fair
value, after deducting issuing costs and related transaction costs that are incurred upon initial
recognition. Other subsequent financial liabilities are measured using their cost after depreciation
through the effective-interest method, while the interest expense also applies the effective-interest
method.
Only when the financial liabilities are disposed of (i.e. when contractual obligations are discharged,
cancelled, or expired) can they be removed from the combined balance sheet.
(6) Derivative financial instrument
Derivative commodity is measured at fair value upon initial recognition on the signing date of the
contract, while subsequent derivative commodity using fair value at the end of each reporting
period. Estimated loss arising from the change in the fair value of the derivative commodity shall
be recognized with the following:
a)

Hedge accounting

The Company signs derivative contract to hedge exchange risk and designates some derivate as hedge
instuments to hedge exchange risks that are very likely to happen in future assets and liabilities
transactions.
At the inception of the hedge there is formal designation and documentation of the hedging
relationship and the entitys risk management objective and strategy for undertaking the hedge. That
documentation shall include identification of the hedging instrument, the hedged item or transaction,
the nature of the risk being hedged and how the entity will assess the hedge instruments
effectiveness in offsetting the exposure to changes in the hedged items fair value or cash flows
attributable to the hedged risk.

89



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b) Cash Flow Hedge


If the fair value hedge for a derivative instrument meets the conditions for cash flow hedge accounting,
the effective portion shall be capitalized, while the ineffective portion will be recognized in current gain
or loss.
Cash flow hedge is not recognized as a type of hedging relationship in the corporation. It will not be
derecognized when a hedging instrument is expired, sold, liquidated or exercised, or when it no longer
satisfies the conditions for cash flow hedge accounting. When the cash flow hedge is derecognized,
cumulative gains or losses for derivative instruments that are previously capitalized shall be recognized
as current profit or loss of the reporting period when the expected transaction occurs. Only when the
expected transaction is estimated not to occur shall the cumulative gains or losses for derivative
instruments that are previously capitalized be immediately recognized as current profit or loss.
c) Other derivative instruments
Apart from derivative instuments designated as effective hedges, any other derivative instruments shall
be measured at fair value and. When changes in fair value occur, they are recognized as current
profits or losses.
(7) Impairment losses on financial assets
We assess at the end of each reporting period whether there is any objective evidence that a financial
asset, except for financial assets at fair value through profit or loss, are impaired. If there is more than
one objective evidences and that the impairment loss has an effect on the future cash flow of the
financial asset, the impairment loss for the financial asset shall be recognized. However, estimated
impairment loss arising from any future events shall not be recognized.
If any such evidence exists, an impairment loss shall be measured and recognized as follows:
1) Amortized cost of the carrying amount of financial assets
As for financial assets measured at amortized cost, its impairment loss is estimated using the
difference between the book value and the current value of estimated future cash flows amortized on
the basis of the initial effective interest rate (effective interest rate calculated at the initial recognition).
For practical reasons, the impairment losses for financial instruments are measured at fair value, using
observable market price.
An impairment loss is directly charged against the book value of the current asset or against the
allowance account.
In later periods, the value of the impairment loss may decline. If the reduction is objectively related to
incidents happening after the recognition of the loss, the recognized impairment loss should be
charged directly, or adjusted for, by reducing provisions, and recognized as a current loss.
2) Costs of carrying amounts of financial assets
As for financial assets measured at cost, the impairment loss shall be measured using the difference
between the assetss carrying amount, and the present value of estimated future cash flows
discounted at the current effective interest rate for similar financial assets, and shall be recognized as
a current gain or loss. This kind of impairment loss should not be charged.
3) Available-for-sale financial assets
For the available-for-sale financial assets whose loss in the fair value is recognized in other
comprehensive income, when there is objective evidence that this loss exists, the difference between
the acquisition cost and the current fair value shall be recognized as a cumulative loss in other
comprehensive income.
Impairment loss previously recognized in other comprehensive income according to the current profit
and loss shall be reclassified according to current profit or loss.
Impairment loss for available-for-sale equity instruments recognized according to current profit of loss
shall not be reversed. When an impairment loss is confirmed and an increase in the fair value of
available-for-sale debt instruments in the following accounting period is objectively related to some
future events, it should be reversed as a current profit.
91

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(8) Tangible assets


Tangible assets are measured at cost upon initial recognition. The cost of tangible assets includes
related cost needed for operating the asset according to the will of the management and and the cost
of asset liquidation, disposal and maintenance.
After initial recognition, the cumulative depreciation amount and cumulative impairment loss are
deducted from the cost in arriving at the carrying amount of tangible assets.
Land is not considered to depreciate in value. For other tangible assets, residual value is deducted
from the acquisition cost, using the following service lives and straight line method which can best
reflect the expected realization from future economic benefit of related property.
For the cost that is related to the formation of tangible assets and significant to the total cost of
tangible assets, depreciation should be calculated separately.
The profit or loss arising from de-recognition of tangible assets is determined by the difference
between the net income obtained from the disposal and the carrying amount. The difference shall
be recognized as current profit or loss.
Estimated useful lives for tangible assets in the current period and the previous period are as follows:
category
Estimated useful lives
Buildings
30 years
Construction materials
20-30 years
Mechanical devices
515 years
Other tangible assets
5 years
Residual value, useful life and depreciation methods shall be reevaluated at the end of the
reporting period. . If changes are needed, such changes shall be accounted for and reflected in
accounting estimates.
(9) Borrowing cost
Borrowing costs that are directly attributable to the acquisition, construction or production of an
eligible asset shall be capitalized as part of the cost of that asset. Other borrowing costs are
recognized as an expense. An eligible asset is an asset that necessarily takes a substantial period of
time to get ready for its intended use or sale. Financial assets and inventories produced in a short term
or by other means are not classified as eligible assets. Assets that are ready for its intended use or
sale at the time when they are obtained are not classified as eligible assets.
Among the funds borrowed specifically for obtaining a qualifying asset, the company determines
capitalizable borrowing cost by deducting the amount of investment income from the temporary use of
loan payable from the amount of actually realized borrowing costs during the reporting periods. The
company is estimating the capitalizable borrowing costs by applying capitalization rate on the assets
related expenses for borrowing funds the purpose of acquiring eligible assets. Capitalization rate is
estimated by using weighted average on the realized borrowing costs of borrowed funds (except
borrowing funds for the specific purpose of acquiring eligible assets) during reporting periods. During
the reporting period, capitalized borrowing costs cannot exceed the actual borrowing costs that
occurred in the period.

93

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(10) Intangible Assets


An intangible asset shall be measured initially at cost. After initial recognition, the cumulative value of
depreciation and impairment losses are subtracted from the cost of the intangible asset and the result
is treated as the book value of the intangible asset.
The residual value of an intangible asset is the estimated amount that an entity would currently obtain
from the disposal of the asset, after deducting the estimated costs of disposal, if the asset were
already of the age and in the condition expected at the end of its useful life. The residual value of an
intangible asset with a finite useful life shall be assumed to be zero unless such intangible assets have
no definite useful life and predictable depreciation.
Our estimated useful lives of intangible assets of the current and last period are as follows:
The estimated useful lives and amortization methods
division
Goodwill

Indefinite

Memberships

Indefinite

Other intangible assets

5 years Straight-line

R&D

(*)

(*)Taking its useful life cycle into consideration, the development cost of capitalization is amortized
accordingly.
The amortization period and the amortization method for an intangible asset with a finite useful life
shall be reviewed at least at each financial year-end. If the expected useful life of the asset is different
from previous estimates, the amortization period shall be changed accordingly. If there has been a
change in the expected pattern of consumption of the future economic benefits embodied in the asset,
the amortization method shall be changed to reflect the changed pattern. Such changes shall be
accounted for as changes in accounting estimates in accordance with IAS 8 Accounting Policies,
Changes in Accounting Estimates and Errors.
1) Research and Development
Expenditure on research (or on the research phase of an internal project) shall be recognized as an
expense when it is incurred.
An intangible asset arising from development (or from the development phase of an internal project)
shall be recognized if, and only if, an entity can demonstrate all of the following:
(a) The technical feasibility of completing the intangible asset so that it will be available for use or sale.
(b) Its intention to complete the intangible asset and use or sell it.
(c) How the intangible asset will generate probable future economic benefits.
If the other development expendatures can be reliably measured and recognized as intangible assets,
it should be recognized as an expense as incurred.
2) Subsequent expenditures
Particular subsequent expenditure facilitating the economic benefits inflow should be recognized as the
cost of capitalization. Other expenditures such as internally generated goodwill and brand should be
recognized as incurred.

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(11) Non-financial asset impairment


An entity shall assess at the end of each reporting period whether there is any indication that the nonfinancial assets may be impaired. (Inventories and deferred income tax assets not included) If any
such indication exists, the entity shall estimate the recoverable amount of the asset. Irrespective of
whether there is any indication of impairment, an entity shall also test an intangible asset with an
indefinite useful life for impairment annually by comparing its carrying amount with its recoverable
amount.
The recoverable amount is measured in different ways according to different types of the assets. If
the recoverable amount of some particular asset cannot be precisely estimated, in replace of the
recoverable amount, the cash-generating unit is estimated instead. The recoverable amount of an
asset or a cash-generating unit is the higher of its fair value less the cost to sell and its value in use.
Value in use is the present value of future cash flows expected to be derived from an asset or cashgenerating unit. Unpredictable risks should be discounted appropriately in accordance with the time
value of money, represented by the current market risk-free rate of interest.If, and only if, the
recoverable amount of an asset or cash-generating unit is less than its carrying amount, the carrying
amount of the asset shall be reduced to its recoverable amount. The carrying amount is recognized as
the current gain and loss.
For the purpose of impairment testing, goodwill acquired in a business combination shall, from the
acquisition date, be allocated to each of the acquirers cash-generating unit, or groups of cashgenerating units, that are expected to benefit from the synergies of the combination, irrespective of
whether other assets or liabilities of the acquirers are assigned to those units or groups of units.
An impairment loss recognized for goodwill shall not be reversed in a subsequent period. An entity
shall assess at the end of each reporting period whether there is any indication that an impairment
loss recognized in prior periods for an asset other than goodwill may no longer exist or may have
decreased. If any such indication exists, the entity shall estimate the recoverable amount of that asset.
An impairment loss recognized in prior periods for an asset other than goodwill shall be reversed if,
and only if, there has been a change in the estimates used to determine the assets recoverable
amount since the last impairment loss was recognized.
Different cash-generating units may be tested for impairment at different times. However, if some or
all of the goodwill allocated to a cash-generating unit was acquired in a business combination during
the current annual period, that unit shall be tested for impairment before the end of the current annual
period. The increased carrying amount of an asset attributable to a reversal of an impairment loss shall
not exceed the carrying amount that would have been determined (net of amortization or depreciation)
had no impairment loss been recognized for the asset in prior years.
(12) Government Grants
Government grants shall not be recognized until there is reasonable assurance that:
(a) The entity will comply with the conditions attaching to them; and
(b) The grants will be received.
A government grant that becomes receivable as compensation for expenses or losses already incurred
or for the purpose of giving immediate financial support to the entity with no future related costs shall
be recognized in profit or loss of the period in which it becomes receivable.
Grants related to assets are government grants whose primary condition is that an entity qualifying for
them should purchase, construct or otherwise acquire long-term assets. They should be presented in
the statement of financial position is a systematic and reasonable way.
Other government grants are used to compensate the expense or loss of entity.
Government grants used to compensate the expense incurring in the subsequent periods shall be
recognized in profit or loss when the related cost is recognized as expense. Besides, the related
expense should be deducted from the government grants.
A government grant that becomes receivable as compensation for expenses or losses already incurred
or for the purpose of giving immediate financial support to the entity with no future related costs shall
be recognized in profit or loss of the period in which it becomes receivable.
97

(13)

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(13) Employee Benefits


1) Short-term employee benefits

Short-term employee benefits are employee benefits that are due to be settled within twelve months

after the end of the period in which the employees render the related service. When an employee has
rendered service to an entity during an accounting period, the entity shall recognize the undiscounted
amount of short-term employee benefits expected to be paid in exchange for that service.
2) Other long-term employee benefits

Other long-term employee benefits are employee benefits that are not due to be settled within twelve
months after the end of the period in which the employees render the related service. The future
benefits are discounted in accordance with the equivalent service value that the employee has
rendered in the current and past period.

Liabilities are determined after discounting the estimated future cash flows using a rate of return on
high quality corporate bonds with a maturity similar to the expiry of the relevant benefits. Losses
arising from actuarial assumption changes and experiential adjustments are recognized in full in profit
or loss when incurred.
As a liability (accrued expense), after deducting any contribution already paid. If the contribution
already paid exceeds the contribution due for service before the end of the reporting period, an entity
shall recognize that excess as an asset (prepaid expense) to the extent that the prepayment will lead
to, for example, a reduction in future payments or a cash refund
3) Post-employment benefits: defined benefit plans
The company operates a defined benefit plan. As the defined benefit plan depicts, employees deposit
fixed money into the independent fund of the company. The company bears the legal or constructive
obligation to estimate the condition of payment and determine the payable amount of the retirement
pension in accordance with the deposited amount and the investment profit of respective periods.
After rendering service for a considerable time period, the employees service can be exchanged into
the payables to offset their payments in the defined benefit plan. The residual amount can be
recognized as the retirement pension liability. If the amount already paid exceeds the undiscounted
amount of the benefits, an entity shall recognize that excess as an asset (prepaid expense) to the
extent that the prepayment will lead to, for example, a reduction in future payments or a cash refund.
In accordance with the K-IFRS, except for respective asset cost, the others are recognized as expense.
For employees who work less than 1 year and cannot be listed as the retirement applicant, we are
setting allowance for severance liability.

99

(14)
,
,
.


.
.
3

.
,
.
.
.
(15)
()
.
.
,
.


.

, .

100

(14) Provisions
A provision should be recognized when:
(a) An entity has a present obligation (legal or constructive) as a result of a past event;
(b) It is probable that an outflow of resources embodying economic benefits will be required to settle
the obligation; and
(c) A reliable estimate can be made of the amount of the obligation.
If these conditions are not met, no provision shall be recognized.
Unavoidability and uncertainty of risks in related with the provisions recognized should be taken into
consideration. In order to fulfill the current obligation at the end of the accounting period and
recognize a precise estimated amount of the contingent items. We should take the time value of
currency and the discounted value of payment into consideration.
The amount recognized as a provision shall be the best estimate of the expenditure required to settle
the present obligation at the end of the reporting period. The best estimate of the expenditure
required to settle the present obligation is the amount that an entity would rationally pay to settle the
obligation at the end of the reporting period or to transfer it to a third party at that time.
We check the residual amount of the estimated liability of each accounting period and adjust it to the
best estimate of the expenditure. As for items that might lead to profit outflow, the estimated liability
related with them will be offset if there shall be no more outflow.
The estimated liability is recognized as cost expense upon the initial recognition.
(15) Foreign currency
A foreign currency transaction shall be recorded and translated using the closing exchange rate at the
date of the transaction.
At the end of each reporting period:
(a) foreign currency monetary items shall be translated using the closing rate;
(b) non-monetary items that are measured in terms of historical cost in a foreign currency shall be
translated using the exchange rate at the date of the transaction; and
(c) non-monetary items that are measured at fair value in a foreign currency shall be translated
using the exchange rates at the date when the fair value was determined.
All exchange margins arising from the translation of non-monetary items shall be accounted into
current profit and loss. But there are 3 exceptions. Exchange margins arising from the monetary items,
arising from liability assigned to mitigate risk, arising from net investment in a foreign operation should
not be factored into current gain and loss.
In terms of gain and loss arising from translation of non-monetary items accounted into other
comprehensive income, currency translation difference generated by the Changes in Foreign Exchange

Rates related is also accounted into current gain and loss.

Related currency translation differences accounted into current gain and loss is accounted.
101

(16)

.

.
.
.
(17)

.
,
,
.

( )

,
,

.


.

102

(16) Paid-up capital


Common shares are considered as capital. For incremental costs that are directly related to capital
transactions, the net value, in which tax payable costs are deducted, is considered paid-up capital.
When the Company reacquires its own equity instruments, the equity instruments are considered as
treasury stocks and directly deducted from the equity. Profit and loss caused by buying, selling or
cancelling its own equity instruments are not accounted for in current profit and loss. The paid or
received amounts in acquiring or holding treasury stocks are recognized as capital directly.
(17) Share-based payment
Goods or services received in the share-based payment transactions shall be recognized on the date
recievied. The goods and services received from equity-settled share-based payment transactions shall
be recognized as the corresponding increase in capital. The goods or services received from cashsettled share-based payment transactions shall be recognized as the corresponding increase in
liabilities. The goods and services received from share-based payment transactions shall be recognized
as expenses if they fail to satisfy the conditions of being recognized as share-based payment.
a) Equity-settled share-based payment
For a share-based payment transaction in which the Group receives good or services as consideration
for equity instruments of the entity (including shares and share options), or in which the entity fails to
fulfill the obligation to settle the transaction after receiving these goods or services, the entity shall
measure the goods or services received, and the corresponding increase in equity, directly, at the fair
value of the goods or services received. If the entity cannot estimate reliably the fair value of the
goods or services received, the entity is required to measure the goods or services received and the
corresponding increase in equity, indirectly, at the fair value of the equity instruments granted. If only
services acquired in the specific period are as consideration for equity instruments granted, services
corresponding to equity instruments shall be distributed in the vesting period and recognized as the
increase of equity.

103






.
.
( )
,


.


,
.

( )
( )


,

.

104

Vesting conditions, other than market condition, are taken into account by adjusting the number of
equity instruments included in the measurement of the transaction amount. Ultimately, the amount
recognized for goods or services received as consideration for the equity instruments granted is based
on the number of equity instruments that eventually vest. Hence, on a cumulative basis, the number of
equity instruments granted shall be renewed if the equity instruments granted do not vest because of
failure to satisfy a vesting condition. The fair value of equity instruments granted shall be based on
market prices.
Apart from the deficiency of vesting conditions (other than market condition) and the failure of
equity instruments granted, whether to change the granting conditions of equity instruments is not
associative with whether to cancel or to liquidate the equity instruments. The services received shall
be measured at the fair value estimated by the smallest equity instrument on the measurement date.
The change shall be recognized if the conditions are changed to be beneficial for employees by
increasing the fair value of equity payment agreement.
If the equity instruments granted are canceled or liquidated during the vesting period, these equity
instruments shall be recognized as vesting ahead. Conversely, recognizing the amount of services
received in the rest of vesting period at present. The amount paid for employees during cancellation or
liquidation shall be recognized as a repurchase of equity instruments and a reduction in the amount of
repurchase, and recognized in expenses during the period.
b) Cash-settled share-based payment
The entity acquires goods or services by incurring cash or liabilities to the supplier of those goods
or services for amounts that are based on the price (or value) of the entitys equity instruments
(share or share options). For cash-settled, share-based payment transactions, the entity is required
to measure the goods or services acquired and the liability incurred at the fair value of the liability at
each reporting date. Until the liability is settled, the entity is required to re-measure the fair value of
the liability at each reporting date and at the date of settlement, with any changes in value
recognized in profit or loss for the period. The services acquired by employees and incurred liability
shall be recognized during the working period.

105

(18)

.

,

, ,
,
.

.
,
,
, ,
,
.

.


.

106

(18) Revenue
Revenue shall be measured at the fair value of the consideration received or receivable taking into account the
amount of any discounts and volume rebates allowed by the entity.
a)
Sale of goods
The entity has transferred to the buyer the significant risks and rewards of ownership of the goods. The entity
retains neither continuing managerial involvement to the degree usually associated with ownership nor effective
control over the goods sold. The amount of revenue can be measured reliably. It is probable that the economic
benefits associated with the transaction will flow to the entity. And the costs incurred or to be incurred in respect
of the transaction can be measured reliably.
b)
Lease income
Lease income shall be recognized over the lease period on an accrual basis.
c)
Interest income, dividend income
It is probable that the economic benefits associated with interest received from transferring assets to others and
dividends received from associated economic transactions will flow to the entity. The revenue shall be recognized
if the amount can be measured reliably. Interest shall be recognized using the effective interest method.
Dividends shall be recognized when the shareholders right to receive payment is established.
d) Providing services
The profit from providing services is recognized by the completion progress of the service that provided. In
order to estimate reliably, the group company estimates the percentage rate of completion of the service that
provided depending on the nature of transactions and the analysis of service provide completion percentage.

107

(19)
,
, ,
.
,
.
, ,
.
.
(20)
,

.

.

.
.


, .
,
.

,
.

108

(19) Financial income and expenses


Financial income includes interest income, investment income from subsidiaries and associates
(except dividends from the investment of the company), sellable financial assets, profit or loss from
the disposal of financial assets and profit or loss produced by hedge instruments. Interest shall be
recognized as profit or loss in the period using the effective interest method. Dividends shall be
recognized when the shareholders right to receive payment is established.
Financial expenses include interest of borrowing, the amortization charge of liabilities and valuation
difference of hedge instruments recognized as profit or loss in the period. Interest of borrowing shall
be calculated using the effective interest method and recognized in profit or loss in the period.
(20)Corporate tax
Income tax
Income taxes consist of current income taxes and deferred income taxes. Apart from transactions and
events that are directly recognized as other comprehensive income or assets and taxes produced by
business combination, income taxes shall be recognized in profit or loss in the period.
Current income taxes
Current income taxes shall be measured based on taxable profits. Taxable profits add or deduct other
forms of profit or loss, untaxable items and non-deductible items in the period in the income statement.
It is different from the profit or loss in the income statement. The accrued income taxes of the
company associated with current income taxes shall be measured using the tax rates that have been
enacted.
Deferred income tax
Deferred income taxes are based on the differences between taxable profits and the carrying amount
of liabilities that are recognized in an entitys statement of financial position. Deferred tax liabilities
recognize the taxable temporary differences. The company recognizes all deductible temporary
differences as deferred income tax. However, deferred income tax from the following situations are not
recognized as liabilities: a) it is initially recognized as goodwill; b) the assets and liabilities are not from
business combination transactions, and do not affect the accounting income or taxable income (tax
loss) of investment assets of branches and associates; c) it is related to joint venture stock investment,
and the investors and participants of the company can control it at reverse point; d) in the foreseeable
future, it is of high possibility not to reverse.

109


,
. ,

,
.
,

.


.

.


.
(21)

.

110

For potential taxable temporary differences associated with the equity of subsidiaries and associates,
the reversal time of temporary differences are able to be controlled. Temporary differences of the
predictable future would not expire, otherwise it shall be recognized as a liability. In addition, it is
probable that deferred tax assets produced by deductible temporary differences are able to be reversed
in a predictable period. It shall be recognized when the possibility for taxable profits to produce
temporary differences is high.
The carrying amount of a deferred tax asset shall be reviewed at the end of each reporting period. An
entity shall reduce the carrying amount of a deferred tax asset to the extent that it is no longer
probable that sufficient taxable profit will be available to allow the benefit of part or all of that deferred
tax asset to be utilized.
Deferred tax assets and liabilities shall be recognized at the end of the accounting period or measured
at the expected amount to be paid to the taxation authorities, using the tax rates that have been
enacted or substantively enacted. The measurement of deferred tax assets and liabilities shall follow
the law that would follow from the manner in which the entity expects to recover or settle its assets
and liabilities.
Deferred tax assets and liabilities are levied by the same taxation authority. The company has the
legal right to recognize the amount of reduction only if the entity has the intention to settle deferred
tax assets and liabilities on a net basis.
(21)Earnings per share
The company presents in the statement of other comprehensive income, basic and diluted earnings
per share. Basic earnings per share shall be calculated by dividing current net profits of ordinary equity
holders by the weighted average number of ordinary shares outstanding during the period. For the
purpose of calculating diluted earnings per share, an entity shall adjust profit or loss and the weighted
average number of shares outstanding, in consideration of the effects of all potential common stock
which have diluent effect.

111

(22)
2014 1 1
.
.
.
1019 ''
3 ,

.
,
. 2014 7 1
.
1027 ''
, ,
1039
. 2016 1 1 .

112

(22) Unapplied standards


After establishment and publishing, for the accounting years beginning on or after January 1, 2014,
the standards worked out and amended that would not be adopted are noted below. The company did
not adopt those particular accounting standards in the early preparation of financial statements. The
company judges that the standards worked out and amended have little influence on financial
statements.
Enterprise accounting standards 1019 employee benefits
For employee benefits of third party payments that satisfy the conditions, the company amends
corresponding accounting standards to enable itself to deduct the contributions from the service cost
during the period in which the services are provided. Current net service cost and payable liabilities are
taken into account for the calculation of employee benefits associated with services. The employee
benefits shall be calculated using the distribution system and recognized on a straight-line basis.
The accounting standard shall be conducted for accounting years beginning on or after July 1,2014.
Enterprise accounting standards 1027 separate financial statements
When an entity presents separate financial statements, investments in subsidiaries, jointly controlled
entities and associates must be accounted for at cost in accordance with the Enterprise Accounting
Standards 1039 or at equity.
The regulation shall be conducted for the accounting years beginning on or after January 1, 2016.

113

4.
(1)
( : )

3,564,133

3,564,133

11,619,424

11,619,424

39,657,294

39,657,294

34,685,001

34,685,001

25,447,414

25,447,414

10,268,688

10,268,688

305,760

305,760

1,305,760

1,305,760

68,668,841

305,760

68,974,601

56,573,113

1,305,760

57,878,873

(2)
( : )

863,948

863,948

936,448

936,448

25,843,331

25,843,331

5,790,182

5,790,182

168,654,089

168,654,089

184,936,669

184,936,669

195,361,368

195,361,368

191,663,299

191,663,299

(3)
1)

.

( )

(
)

114

. Categories and fair value of financial instruments


(1) Scope of financial assets
(Unit:KRW 000)
Current period
Category

Financial assets
at fair value
through profit
or loss

Loans and
receivables
Cash and cash
equivalents

Last period

Availablefor-sale
financial
assets

Total

Loans
and
receivables

Financial
assets at fair
value
through
profit or loss

Availablefor-sale
financial
assets

Total

3,564,133

3,564,133

11,619,424

11,619,424

Accounts Receivable

39,657,294

39,657,294

34,685,001

34,685,001

Other receivables

25,447,414

25,447,414

10,268,688

10,268,688

Available-for-sale
financial assets

305,760

305,760

1,305,760

1,305,760

68,668,841

305,760

68,974,601

56,573,113

1,305,760

57,878,873

Total

(2) Scope of financial liabilities

(Unit:KRW 000)
Current period
Category

Financial
liabilities at fair
value through
profit or loss

Financial liabilities
measured at
amortized cost

Trade payables

Other debt payments

Borrowings

195,361,368

Total

863,948

Last period

Total

Financial
liabilities at
fair value
through
profit
or

Financial
liabilities
measured
amortized
cost

at

936,448

Total

863,948

936,448

25,843,331

25,843,331

5,790,182

5,790,182

168,654,089

168,654,089

184,936,669

184,936,669

195,361,368

191,663,299

191,663,299

(3) Fair value of financial instruments

1) Fair value hierarchy


Financial instruments for which the fair value is measured are categorized within the fair value hierarchy based
on the inputs used in the measurement of fair value
Category

The significance of the inputs

Level 1

quoted prices(Unadjusted) in active markets for identical assets or liabilities

Level 2

Inputs observable for the asset or liability either directly or indirectly

Level 3

Unobservable inputs for the assets or liabilities

115

2)

. , , , ,

, .
. 1
. 1 KOSPI
, KOSDAQ .

.
. ,
2 .

3 .
.
-
-

-

-

116

2) Assessments and presumptions for measurement of fair value


Fair value of financial instruments trading in active markets is calculated based on the market price at the end
of reporting period. A market is active if it is easy to depict public price through exchanges, sellers, brokers, i
ndustrial groups, rating agencies or supervision. Another case is that there exists actual and regular
transactions between independent parties with prices that can be regularly used. The discolosure of market
prices of financial assets the company hold is buyer bids, which are included in level 1. The majority of level 1
goods are constituted of equity instruments listed on KOSPI stock index and KOSDAQ stock index, which are
for short-term trades or available for sell.
For financial instruments that are not traded in active markets, we use valuation techniques for which sufficient
data is available to measure fair value, maximising the use of relevant observable inputs and minimising the
use of unobservable inputs. If all significant inputs of fair value are observable, the goods are included in level
2.
The goods are included in level 3 if more than one significant unobservable inputs are used to measure fair
value.

Measurement approaches of fair value of financial instruments are as follows:


- Quoted prices for similar goods or dealer price
- Fair value of interest swap is the present value of the future cash flows based on yield curves
observable
- Fair value of forward exchange is the present value of related cash flows conversed by
forward exchange rate at the end of reporting period
- Other measurement approaches such as discounted cash flow method for other financial products

117

3)
. .
<>
( : )

305,760 -

305,760

2
-

3
305,760

<>
( : )

1,305,760 -

1,305,760

2
-

3
1,305,760

. 3 .
( : )

1,305,760

(1,000,000)

305,760

4)
( : )

9,445,592

9,769,071

11,373,580

11,870,936

19,240,894

19,904,245

54,196,903

54,201,297

28,686,486

29,673,316

65,570,483

66,072,233

118

3) Fair value at different levels


A. Fair values of financial instruments classified by levels are as follows.
<Current period>
(Unit:KRW 000)
Category
Available-for-sale
financial assets

Carrying
amount

Fair value
Subtotal

305,760

Level 1

305,760 -

Level 2

Level 3

305,760

<Last period>
(Unit:KRW 000)
Category
Available-for-sale
financial assets

Carrying
amount

Fair value
Subtotal

1,305,760

Level 1

1,305,760 -

Level 2

Level 3

1,305,760

B. Changes of fair value at the current period, which are determined as level 3, are as follows..

(Unit:KRW 000)
Category

Available-for-sale
financial assets

Foundation

Acquisition

1,305,760

Disposal
-

December 31, 2010

(1,000,000)

305,760

4) Book value and fair value of financial instruments which are not subsequently measured at fair value.

(Unit:KRW 000)

Category

The end of current peri


od
Carrying amount

The end of last period


Fair value

Carrying amount

Fair value

Borrowings
Convertible bonds

9,445,592

9,769,071

11,373,580

11,870,936

bond with warrant

19,240,894

19,904,245

54,196,903

54,201,297

Total

28,686,486

29,673,316

65,570,483

66,072,233

Management has estimated fair value similar as book value of financial instruments that are not recorded in the
previous report and are recognized as amortised cost of a financial asset or financial liability in the finanicial
statements.

119

(4)
<>
( : )

(*1)

(*2)

<>

411,952

(290)

20,229

431,891

(127,128)

(127,128)

411,952

(127,418)

20,229

304,763

(3,075,764)

(79,462)

(3,155,226)

< >

(*1)

() + () + ()

(*2)

() + ()

<>
( : )

<>
383,734

83,578

(24,555)

442,757

(3,459,815)

(3,459,815)

824,159

824,159

383,734

(2,552,078)

(24,555)

(2,192,899)

<>

(1,443,520)

(2,314)

2,195

(1,443,639)

120

(4) Net profits and losses of financial instruments by category


<Current period>
(Unit:KRW 000)
Category

Interest income

Income
Dividends

Trading profit
Valuation (*2)
(*1)

Total

<Financial assets>
Loans and receivables
Available-for-sale financial
assets
Total

411,952

(290)

20,229

431,891

(127,128)

(127,128)

411,952

(127,418)

20,229

304,763

< Financial liabilities>


Financial liabilities measured
(3,075,764)
(79,462)
(3,155,226)
at amortized cost
(*1) Foreign exchange gains (losses) on financial assets + trading profits (loss) + financial asset impairment
losses (reversals)
(*2) Foreign currency conversion profits (losses) on financial assets + financial assets valuation profits (losses)
<Last period>
(Unit:KRW 000)
Category

Interest income Income DividendTrading profit

Valuation

Total

<Financial assets>
Loans and receivables
Financial assets at fair value
through profit or loss
Available-for-sale financial
assets
Total

383,734

83,578

(24,555)

442,757

(3,459,815)

(3,459,815)

824,159

824,159

383,734

(2,552,078)

(24,555)

(2,192,899)

(1,443,520)

(2,314)

2,195

(1,443,639)

<Financial liabilities>
Financial liabilities measured
at amortized cost

121

(5)

.
( : )

<>

22,240,000

2,780,000

19,460,000

19,460,000

3,606,128

2,780,000

826,128

826,128

<>

5.
.

.

.
( : )

8,934,623

6,093,779

660,030

552,264

9,600,653

6,646,043

122

(5) Offsetting of financial assets and liabilities


The details of balance of financial assets and liabilities at the end of previous period are as follows.
(Unit:KRW 000)

Category

Total financial

Offsetting

Financial

instruments

that amount

instruments, net

NonDeductib
le
Amount

Net amount

<Financial assets>
Long-term
prepayments

22,240,000

2,780,000

19,460,000

19,460,000

3,606,128

2,780,000

826,128

826,128

<Financial liabilities>
Trade payables

5. Transfer of Financial Assets


The company has collected account receivables by transferring to others or giving discounts to some of the
other receivables. When recovering at the end of current period, transferable or discounted with recourse
accounts receivable are not recorded in the balance sheet, but are recorded in short-term borrowings and
account payables.
Th details of financial discount and other customer endorsement in outstanding accounts receivables at the end
of current and previous period are as follows.

(Unit:KRW 000)
Category

December 31, 2010

December 31

Trade receivables discount

8,934,623

6,093,779

Accounts receivable endorsement

660,030

552,264

9,600,653

6,646,043

Total

123

6.
.
( : )

1,026

4,245

3,563,107

11,615,179

3,564,133

11,619,424

7.
(1) .
( : )

42,920,051

(3,262,757)

39,657,294

37,308,106

(2,623,105)

34,685,001

8,343,016

(4,481,616)

3,861,400

10,264,354

(4,481,616)

5,782,738

15,636,832

(537,373)

15,099,459

521,686

(518,891)

2,795

429,219

429,219

108,136

108,136

24,409,067

(5,018,989)

19,390,078

10,894,176

(5,000,507)

5,893,669

67,329,118

(8,281,746)

59,047,372

48,202,282

(7,623,612)

40,578,670

70,295

(70,295)

100,671

(100,671)

4,753,904

4,753,904

2,999,943

2,999,943

1,450,956

(147,524)

1,303,432

1,522,599

(147,524)

1,375,075

6,275,155

(217,819)

6,057,336

4,623,213

(248,195)

4,375,018

73,604,273

(8,499,565)

65,104,708

52,825,495

(7,871,807)

44,953,688

124

6. Cash and cash assets


Details of cash and cash equivalants at the end of current and previous period are as follows.
(Unit:KRW 000)
Category

December 31, 2010

December 31

Cash
Savings account
Total

1,026

4,245

3,563,107

11,615,179

3,564,133

11,619,424

7. Trade and other receivables


(1) Details of account receivables and other receivables at the end of current and previous period are as follows:
(Unit:KRW 000)
December 31, 2010
Category
Accounts
Receivable

Amount
of bonds

December 31th

Allowance for
doubtful
accounts

amount
of bonds

Carrying
amount

Allowance for
doubtful
accounts

Carrying
amount

42,920,051

(3,262,757)

39,657,294

37,308,106

(2,623,105)

34,685,001

8,343,016

(4,481,616)

3,861,400

10,264,354

(4,481,616)

5,782,738

15,636,832

(537,373)

15,099,459

521,686

(518,891)

2,795

429,219

429,219

108,136

108,136

Sub-total

24,409,067

(5,018,989)

19,390,078

10,894,176

(5,000,507)

5,893,669

Total

67,329,118

(8,281,746)

59,047,372

48,202,282

(7,623,612)

40,578,670

70,295

(70,295)

100,671

(100,671)

Long-term loans

4,753,904

4,753,904

2,999,943

2,999,943

Deposit

1,450,956

(147,524)

1,303,432

1,522,599

(147,524)

1,375,075

6,275,155

(217,819)

6,057,336

4,623,213

(248,195)

4,375,018

73,604,273

(8,499,565)

65,104,708

52,825,495

(7,871,807)

44,953,688

Other receivables
Current

Loans
Accounts receivab
Accrued income

Other receivables
Noncurrent

Bankruptcy bill

Total
Total

125

(2) .
<>
( : )

3 ~

6 ~

22,528,514

12,621,933

4,298,199

3,471,405

42,920,051

8,343,016

8,343,016

540,232

11,220

15,085,380

15,636,832

80,078

81,218

159,787

108,136

429,219

620,310

81,218

171,007

23,536,532

24,409,067

23,148,824

12,703,151

4,469,206

27,007,937

67,329,118

70,295

70,295

4,753,904

4,753,904

12,122

26,265

1,412,569

1,450,956

12,122

26,265

6,236,768

6,275,155

23,148,824

12,715,273

4,495,471

33,244,705

73,604,273

<>
( : )

3 ~

6 ~

19,568,037

9,400,260

5,351,023

2,988,786

37,308,106

1,146,245

2,359,993

2,276,500

4,481,616

10,264,354

2,554

519,132

521,686

14,189

93,947

108,136

1,162,988

2,359,993

2,370,447

5,000,748

10,894,176

20,731,025

11,760,253

7,721,470

7,989,534

48,202,282

100,671

100,671

2,999,943

2,999,943

30,000

748,454

744,145

1,522,599

30,000

3,748,397

844,816

4,623,213

20,761,025

11,760,253

11,469,867

8,834,350

52,825,495

126

(2) Aging schedule of account receivables and other receivables as of the end of the period and before the final
are as below.
<Current period>
(Unit:KRW 000)
Category
Accounts
Receivable
Other receivables
Current

More than three


6 months 3 months or less months -6 monthsone year
or less

More than 1 years

Total

22,528,514

12,621,933

4,298,199

3,471,405

42,920,051

8,343,016

8,343,016

540,232

11,220

15,085,380

15,636,832

80,078

81,218

159,787

108,136

429,219

620,310

81,218

171,007

23,536,532

24,409,067

23,148,824

12,703,151

4,469,206

27,007,937

67,329,118

Bankruptcy bill

70,295

70,295

Long-term loans

4,753,904

4,753,904

Deposit

12,122

26,265

1,412,569

1,450,956

12,122

26,265

6,236,768

6,275,155

23,148,824

12,715,273

4,495,471

33,244,705

73,604,273

Loans
Accounts
receivable
Accrued income
Sub-total
Total
Other receivables

Noncurrent

Total
Total

< Last period>


(Unit:KRW 000)
More than three
3 months or less months -6 months 6 months one year
or less

Category
Accounts
Receivable

More than 1 years

Total

19,568,037

9,400,260

5,351,023

2,988,786

37,308,106

1,146,245

2,359,993

2,276,500

4,481,616

10,264,354

2,554

519,132

521,686

14,189

93,947

108,136

1,162,988

2,359,993

2,370,447

5,000,748

10,894,176

20,731,025

11,760,253

7,721,470

7,989,534

48,202,282

Bankruptcy bill

100,671

100,671

Long-term loans

2,999,943

2,999,943

30,000

748,454

744,145

1,522,599

30,000

3,748,397

844,816

4,623,213

20,761,025

11,760,253

11,469,867

8,834,350

52,825,495

Other receivables
Current

Loans
Accounts
receivable
Accrued income
Sub-total
Total
Other receivables

Noncurrent

Deposit
Total
Total

127

(3) .
<>
( : )

2,623,105

639,652

3,262,757

4,481,616

4,481,616

518,891

18,482

537,373

5,000,507

18,482

5,018,989

7,623,612

658,134

8,281,746

100,671

85,701

(116,077)

70,295

147,524

147,524

248,195

85,701

(116,077)

217,819

7,871,807

743,835

(116,077)

8,499,565

<>
( : )

1,199,564

1,423,541

2,623,105

4,537,675

(56,059)

4,481,616

616,989

(98,098)

518,891

5,154,664

(154,157)

5,000,507

6,354,228

1,423,541

(154,157)

7,623,612

5,261

95,410

100,671

147,524

147,524

152,785

95,410

248,195

6,507,013

1,518,951

(154,157)

7,871,807

128

(3) Changes of the allowance for bad debts of the current and previoous period are as follows
<Current period>
(Unit:KRW 000)
Category
Accounts Receivable

Beginning
Balance

Provision

Write-off

End of Period

2,623,105

639,652

3,262,757

4,481,616

4,481,616

518,891

18,482

537,373

Accrued income

5,000,507

18,482

5,018,989

Sub-total

7,623,612

658,134

8,281,746

100,671

85,701

(116,077)

70,295

Deposit

147,524

147,524

Total

248,195

85,701

(116,077)

217,819

7,871,807

743,835

(116,077)

8,499,565

Other receivables
Loans

Current

Accounts receivable

Other receivables
Non-current

Bankcrupcy bill

Total
<Last period>

(Unit:KRW 000)
Category

Openning balance

Provi
sion

Write-off

Closing balance

1,199,564

1,423,541

2,623,105

4,537,675

(56,059)

4,481,616

616,989

(98,098)

518,891

Sub-total

5,154,664

(154,157)

5,000,507

Total

6,354,228

1,423,541

(154,157)

7,623,612

5,261

95,410

100,671

147,524

147,524

152,785

95,410

248,195

6,507,013

1,518,951

(154,157)

7,871,807

Accounts Receivable
Other receivables
Current

Loans
Accounts receivable

Other receivables
Noncurrent

Dishonored bill
Deposit
Total
Total

129

8.
(1) .
( : )

305,760

1,305,760

(2) .
1)
( : )

()(*1)

200,000

12.99%

1,000,000

1,000,000

()

111,200

1.65%

556,000

207,817

207,817

()(,) (*2)

200,000

1.96%

1,000,000

1.26%

97,943

97,943

97,943

2,653,943

305,760

1,305,760

Almapharm Invest, LLP

(*1) () ,
500,000 .
(*2) .
2)
( : )

(*)

2010.12.18

660,000

510,974

(*)

2010.04.01

900,000

900,000

1,560,000

1,410,974

(*) . (
) 373 .

130

8. Available-for-sale financial assets


(1) Details of non-current available-for-sale financial assets at the end of current and previous period.

(Unit:KRW 000)
The
end
of
current period

Category
Non-current

Non-marketable
securities

equity

The end of last


period
305,760

1,305,760

(2) Contents of Available-for-sale financial assets at the end of current and previous period.
1) Nonmarketable Equity securities
(Unit:KRW 000)

Category

Ownership

Ka Gyeong DEVELOPMENT-ORIENTED
REAL ESTATE INVESTMENT TRUST 200,000shares
INC (*1)
YTN DMB
winnerstudy(previously
acstudy) (*2)

callled

The end of
last period

The end of current period

Number of
shares

Acquisition cost

Book value

Book value

12.99%

1,000,000

1,000,000

111,200shares

1.65%

556,000

207,817

207,817

200,000shares

1.96%

1,000,000

1.26%

97,943

97,943

97,943

2,653,943

305,760

1,305,760

Almapharm Invest, LLP

Total

(*1) In the current period, shares of developing specific real estate investment companies are processed.
Therefore, the resulting 500,000 Opes loss of process are confirmed as the available-for-sale security
processing loss.

(*2) the total loss owning to capital encroachment of the investment companies is confirmed as loss in full.
2)Nonmarketable debt and security

(Unit:KRW 000)
The end of current period
Category

Maturity

Temasek (*)

2010.12.18

OPES (*)

2010.04.01
Total

Par value
660,0
00
900,0
00
1,560,0
00

Acquisition cost

The end of last period


Book value

Book value

510,974

900,000

1,410,974

(*)Confirmation of total loss results from delisting and insolvency before prior periods. Collect 373,000,000 Opes
in last period, and confirm according to impairment reversals of available-for-sale financial assets.

131

9.
.
( : )

71,182,180

71,182,180

75,491,008

75,491,008

2,852,669

(6,287)

2,846,382

1,831,079

(47,823)

1,783,256

841,433

(32,742)

808,691

1,462,372

(8,030)

1,454,342

96,328

(7,974)

88,354

223,602

(9,110)

214,492

71,649

(6,845)

64,804

86,355

(5,129)

81,226

15,495

15,495

236,901

236,901

919,616

919,616

868,085

868,085

2,186,152

2,186,152

75,979,370

(53,848)

75,925,522

82,385,554

(70,092)

82,315,462

10.
.
( : )

7,128,426

5,416,398

219,877

339,114

538,387

625,845

7,886,690

6,381,357

19,460,000

7,886,690

25,841,357

(*)

(*) ()
, 14,460

132

9. Inventories
The following are the details of inventories from last period to current period.

(Unit:KRW 000)
Last period
Category
Goods

Current Period

Valuation
allowance

Acquisition
cost

Acquisition
cost

Book value

Valuation
allowance

Book value

71,182,180

71,182,180

75,491,008

75,491,008

2,852,669

(6,287)

2,846,382

1,831,079

(47,823)

1,783,256

Raw material

841,433

(32,742)

808,691

1,462,372

(8,030)

1,454,342

Sub material

96,328

(7,974)

88,354

223,602

(9,110)

Supplies

71,649

(6,845)

64,804

86,355

(5,129)

Transit goods

15,495

15,495

236,901

919,616

919,616

868,085

214,49
2
81,22
6
236,90
1
868,08
5

2,186,152

2,186,152

75,979,370

(53,848)

75,925,522

82,385,554

(70,092)

82,315,462

Product

Semi-finished
goods
Unfinished
labor service
Total

10. Other Assets


The following are the details of other assets from last period to current period.

(Unit:KRW 000)
The
end
of
current period

Category
Advance payments
Prepaid expenses
VAT

Liquid assets

Subtotal
Illiquid assets

Advance payments(*)
Total

The end of last period

7,128,426

5,416,398

219,877
538,387

339,114
625,845

7,886,690

6,381,357

19,460,000

7,886,690

25,841,357

(*)The advance payments of current period in illiquid assets are paid to Celltrion Healthcare to ensure
the domestic franchise rights of Biosimilar products. Payables and the 14,460,000,000 Opes balace are
confirmed as accrued assets.

133

11.
(1) .
( : )

18,925,593

18,925,593

18,322,287

18,322,287

99,767,398

(657,343)

99,110,055

3,187,792

(281,693)

2,906,099

8,457,363

(267,138)

8,190,225

2,154,231

(133,848)

2,020,383

10,669,003

(3,907,234)

6,761,769

10,503,965

(3,081,112)

7,422,853

170,018

(81,633)

88,385

75,790

(66,276)

9,514

2,626,995

(1,987,255)

639,740

2,527,013

(1,606,037)

920,976

62,404,527

62,404,527

114,022,045

114,022,045

203,020,897

(6,900,603)

196,120,294

150,793,123

(5,168,966)

145,624,157

(2) .
<>
( : )

18,322,287

603,306

18,925,593

2,906,099

533,490

(375,650)

96,046,116

99,110,055

2,020,383

16,500

(133,290)

6,286,632

8,190,225

7,422,853

174,127

(9,089)

(826,122)

6,761,769

9,514

94,228

(15,357)

88,385

920,976

99,982

(381,218)

639,740

114,022,045

50,715,230

(102,332,748)

62,404,527

145,624,157

52,236,863

(9,089)

(1,731,637)

196,120,294

()

134

11. Tangible Assets


(1) The following are the book values of tangible assets from last period to current period.

(Unit:KRW 000)
The end of current period
Category

Acquisition cost

Accumulated

The end of last period

Book value

depreciation

Acquisition cost

Accumulated

Book value

depreciation

Land

18,925,593

18,925,593

18,322,287

18,322,287

Buildings

99,767,398

(657,343)

99,110,055

3,187,792

(281,693)

2,906,099

8,457,363

(267,138)

8,190,225

2,154,231

(133,848)

2,020,383

Machinery

10,669,003

(3,907,234)

6,761,769

10,503,965

(3,081,112)

7,422,853

Vehicles

170,018

(81,633)

88,385

75,790

(66,276)

9,514

Fixtures

2,626,995

(1,987,255)

639,740

2,527,013

(1,606,037)

920,976

62,404,527

62,404,527

114,022,045

114,022,045

203,020,897

(6,900,603)

196,120,294

150,793,123

(5,168,966)

145,624,157

Structures

Assets under
construction
Total

(2) The following are changes in tangible assets during the year.
<Current period>

(Unit:KRW 000)
Category

Beginning book
Acquisition cost
value

Disposal

Other increases
(decreases)

Depreciation

Ending book
value

Land

18,322,287

603,306

18,925,593

Buildings

2,906,099

533,490

(375,650)

96,046,116

99,110,055

Structures

2,020,383

16,500

(133,290)

6,286,632

8,190,225

Machinery

7,422,853

174,127

(9,089)

(826,122)

6,761,769

Vehicles

9,514

94,228

(15,357)

88,385

Fixtures

920,976

99,982

(381,218)

639,740

114,022,045

50,715,230

(102,332,748)

62,404,527

145,624,157

52,236,863

(9,089)

(1,731,637)

196,120,294

Assets under
construction
Total

135

<>
( : )

18,322,287

18,322,287

1,806,596

818,042

(108,385)

389,846

2,906,099

352,780

1,248,020

(64,037)

483,620

2,020,383

7,185,165

1,053,334

(265,252)

(890,419)

340,025

7,422,853

24,707

(35)

(15,158)

9,514

1,097,410

196,554

(998)

(372,109)

119

920,976

86,957,658

28,277,997

(1,213,610)

114,022,045

115,746,603

31,593,947

(266,286)

(1,450,108)

145,624,157

()

(3)
2 ,
.
( : )

8,891,782

6,484,411

7.08%

6.09%

(*) 1,237,009 .
(4) ,
( 29 ).

136

<Last period>

(Unit:KRW 000)
Beginning book
Acquisition cost
value

Category

Price

Other increases
(decreases)

Depreciation

Ending book
value

Land

18,322,287

18,322,287

Buildings

1,806,596

818,042

(108,385)

389,846

2,906,099

Structures

352,780

1,248,020

(64,037)

483,620

2,020,383

Machinery

7,185,165

1,053,334

(265,252)

(890,419)

340,025

7,422,853

Vehicles

24,707

(35)

(15,158)

9,514

Fixtures

1,097,410

196,554

(998)

(372,109)

119

920,976

Assets under
construction

86,957,658

28,277,997

(1,213,610)

114,022,045

115,746,603

31,593,947

(266,286)

(1,450,108)

145,624,157

Total

(3) Capitalized financial expenses


The company has a new factory, Chungbuk Ochang second Industrial Complex, under construction, the
influence of capitalized financial expenses in the financial statement is as follows

(Unit:KRW 000)
Category
Capitalized borrowing costs
Capitalization rate

Current period

Last period

8,891,782

6,484,411

7.08%

6.09%

(*) The capitalized financial expenses of development during the year are 1,237,009 thousand.
(4) At the end of current period, the company provides land buildings and structures as collateral for
financial institutions borrowing arrangements (see note 29

137

12.
(1) .
( : )

32,912,453

32,912,453

32,912,453

32,912,453

1,434,773

(274,234)

1,160,539

1,434,773

(274,234)

1,160,539

1,530,585

(967,967)

562,618

1,275,352

(773,822)

501,530

180,426

(85,632)

94,794

175,442

(68,924)

106,518

16,000

(2,533)

13,467

21,979,335

21,979,335

11,564,151

11,564,151

58,053,572

(1,330,366)

56,723,206

47,362,171

(1,116,980)

46,245,191

(2) .
<>
( : )

32,912,453

1,160,539

501,530

106,518

11,564,151

46,245,191

255,233

4,984

16,000

10,415,184

10,691,401

(194,145)

(16,708)

(2,533)

(213,386)

32,912,453

1,160,539

562,618

94,794

13,467

21,979,335

56,723,206

<>
( : )

32,912,453

1,434,773

529,940

116,257

6,969,223

41,962,646

148,283

7,031

4,594,928

4,750,242

(176,693)

(16,770)

(193,463)

(274,234)

(274,234)

32,912,453

1,160,539

501,530

106,518

11,564,151

46,245,191

138

12. Intangible Assets


(1)The carring amount of intangible assets by the end of current period and last period is as follows.

(Unit:KRW 000)
The end of current period
Category

Goodwill

Acquisition cost Accumulated

The end of last period

Book value

Acquisition cost Accumulated

Book value

amortization &

amortization &

impairment

impairment

32,912,453

32,912,453

32,912,453

32,912,453

Membership

1,434,773

(274,234)

1,160,539

1,434,773

(274,234)

1,160,539

Software

1,530,585

(967,967)

562,618

1,275,352

(773,822)

501,530

Industrial
property

180,426

(85,632)

94,794

175,442

(68,924)

106,518

Licenses

16,000

(2,533)

13,467

Development

21,979,335

21,979,335

11,564,151

11,564,151

Total

58,053,572

(1,330,366)

56,723,206

47,362,171

(1,116,980)

46,245,191

(2) Changes of intangible assets in current and last period are as follows
<Current period>

(Unit:KRW 000)
Category
Beginning
book value

Goodwill

Membership

Industrial
property

Software

Licenses

Development

Total

32,912,453

1,160,539

501,530

106,518

11,564,151

46,245,191

255,233

4,984

16,000

10,415,184

10,691,401

Amortization

(194,145)

(16,708)

(2,533)

(213,386)

Ending book
value

32,912,453

1,160,539

562,618

94,794

13,467

21,979,335

56,723,206

Gain

<Last period>

(Unit:KRW 000)
Category
Beginning
book value
Gain
Amortization
Loss
Ending book
value

Goodwill

Membership

Industrial
property

Software

Development

Total

32,912,453

1,434,773

529,940

116,257

6,969,223

41,962,646

148,283

7,031

4,594,928

4,750,242

(176,693)

(16,770)

(193,463)

(274,234)

(274,234)

32,912,453

1,160,539

501,530

106,518

11,564,151

46,245,191

139

(3) 2009 ()
.
(Cash Generating Unit) .
5
.
.
1) : .
2) : 2014 5
.
3) :
.
4) : (4.35%) .

.

, .

13.
.
( : )

863,948

936,448

23,019,759

3,161,162

2,788,973

2,594,023

34,599

34,997

25,843,331

5,790,182

26,707,279

6,726,630

140

(3) Individually significant intangible assets by the end of last period and the goodwill that occurred in
the merger with Hanseo Pharmaceutical in 2009 apply to the indefinite useful life, shall be tested for
repairment annually instead of being amortised. The goodwill shall be allocated by the cashgenerating unit of our group.

The recoverable amount of our CGU was determined by the value in use, which is calculated by using
the estimated cash flows based on the 5 years business plans approved by the management.
Calculation of the value in use was based on the key assumption below:
1) Cash generating unit: in regards to the company, including the affiliated enterprises without
ability to generate cast flow as a cash-generating unit
2) Cash flow: based on past experience practical business results are estimated according to the
business plan 5 years from 2014
3) Growth: based on the market size and market share of products currently in development and
scheduled for release. reflect and estimate the expected sales.
4) Discount rate: weighted average cost of capital (4.35%) of the assumed current capital structure.
These estimates of cash flow and key assumptions are based on the primary judgement of the
management by the end of current period, and may deviate from the the actual results. By
comparing the value in use ofcarrying amount of the cash generating unit with the goodwill and
the assumed calcuation,the result of the impairment test is that the carrying amount of the cash
generating unit does not exceed the recoverable amount, therefore,the impairment loss shall not be
recognised.
13. Payables and other liabilities
Up until the end of this and the previous accounting period, the amount of payables and other liabilities are as
follows.

Category
Trade payables

(Unit:KRW 000)
The end of current
period

The end of last


period
863,948

936,448

Accounts Payable

23,019,759

3,161,162

Accrued expenses

2,788,973

2,594,023

34,599

34,997

Sub-total

25,843,331

5,790,182

Total

26,707,279

6,726,630

Other debt payments


Current

Deposits

141

14.
(1) .
( : )

<>
()

4.97%

2,000,000

2,000,000

5.01%

1,738,296

3,000,000

4.83%

4,000,000

4,000,000

4.86%

997,571

2,996,483

()

5.53%

1,000,000

10,231,736

7,369,703

19,967,603

19,366,186

()

6.11%

14,285,720

()

6.90%

50,000,000

64,285,720

84,253,323

19,366,186

<>

()

6.11%

35,714,280

50,000,000

()

50,000,000

5.33%

20,000,000

55,714,280

100,000,000

11,373,580

1.50%

9,445,592

()

1.50%

19,240,894

54,196,903

28,686,486

65,570,483

84,400,766

165,570,483


( 11,28,29 ).

142

14. Long-term and short-term borrowings

(1) Up until the end of this and the previous accounting period, the details of borrowings are as follows.
(Unit:KRW 000)

Category

History

The end of
current period

Borrowing Sources Interest rate

The end of last period

<Floating debt>
Woori Bank

Short-term
borrowings

Working
Capital

SME Bank
Kookmin Bank

Discounted bills, etc.

SME Bank

4.97%

2,000,000

2,000,000

5.01%

1,738,296

3,000,000

4.83%

4,000,000

4,000,000

4.86%

997,571

2,996,483

5.53%

1,000,000

10,231,736

7,369,703

19,967,603

19,366,186

Subtotal
Portion of
long-term

Financing facilities

Woori Bank

6.11%

14,285,720

Working Capital

Celltrion

6.90%

50,000,000

64,285,720

84,253,323

19,366,186

6.11%

35,714,280

50,000,000

50,000,000

5.33%

20,000,000

55,714,280

100,000,000

11,373,580

1.50%

9,445,592

1.50%

19,240,894

54,196,903

28,686,486

65,570,483

84,400,766

165,570,483

Sub-total

debt
Total
<Non-current liabilities>

Long-term
borrowings

Financing facilities

Woori Bank

Working capital

Celltrion

Working capital

Korea Development
Bank
Sub-total

Holding
company

Convertible bonds

Neptune Co., Ltd.

Convertible bonds

Korea Development
Bank

Bond with warrants

Celltrion
Sub-total

Total

The real estate and representative directors payments are collateral for the lending agreements signed
between our group and the financial institutions. (See note 11, 28, 29)

143

(2)
1) .
( : )

3 (*)
4

(%)

(%)

2010-08-17

2015-08-16

2014-04-18

2019-04-18

1.50

5.90

9,000,000

10,000,000

2,456,925

3,831,648

(3,011,333)

(1,458,068)

9,445,592

11,373,580

(*) 3 .
2) 4 .

100%

1 ~

12,460

(3)
1) .
( : )

2013-12-19

2018-12-18

(%) (%)
1.50

5.90

20,000,000

60,000,000

4,913,851

14,741,554

(5,672,958)

(20,544,651)

19,240,893

54,196,903

144

(2) Convertible bonds


1) Up until the end of this and the previous accounting period, the details of convertible bonds are as follows.
(Unit:KRW 000)

Issued
date

Category

Guaranteed
Coupon rate
Expiration
interest rate
(%)
date
(%)
2015-08-16

3rd unsecure convertiable


2010-08-17
corporate bonds (*)
4th unsecure convertiable
2014-04-18
2019-04-18
corporate bonds
Add redemption
premium

1.50

5.90

Less: convertion right adjustment


Net of write-down

The end of
The end of last
current
period
period
-

9,000,000

10,000,000

2,456,925

3,831,648

(3,011,333)

(1,458,068)

9,445,592

11,373,580

(*)The Group made an early repayment of unsecured convertible bonds for the third time in this accounting
period.
2) The issue conditions of registered unsecured convertible bonds the fourth time of this accounting period
are as follows:

Content

Category
Issue price

100% face value of corporation bonds

Issue shares

Registered common stocks

Repayment method

Expiration date and repayment time

Excersice period
for
conversion
i h
Conversion price
(3)

1 year after issued ~ the date of maturity


KRW 12,460

Bonds with warrants

1) Up until the end of this and the previous accounting period, the details of bonds with warrants are as
below:
(Unit:KRW 000)
Category

1st unsecure
convertible

Issued date

2013-12-19

Coupon
Expiration
rate (%)
date
2018-12-18

1.50

Guarantee

The
end
ofThe end of last
interest current period period
rate (%
d

5.90

20,000,000

60,000,000

4,913,851

14,741,554

Less: convertion right adjustment

(5,672,958)

(20,544,651)

Decrease in rent cost

19,240,893

54,196,903

corporate bonds
Add: redemption premium

145

2) .

100%

1 ~

8,900

15.
.
( : )

40,709

62,134

558,577

467,072

599,286

529,206

16.
,
.
( : )

693,793

651,451

263,556

304,867

85,424

87,518

348,980

392,385

315,300

285,006

29,394

65,037

344,694

350,043

698,079

693,793

146

2) The issue conditions of bonds with warrants of this accounting period are as below:

Category

Contents

Issue price

100% face value of corporation bonds

Issue shares

Registered common shares

Repayment method

Redemption at maturity

Excersice period for


conversion right
Exercise price

1 year after issued ~ the date of maturity


KRW 8,900

15. Other current liabilities


Up until the end of this and the previous accounting period, the details of other current liabilities are as
follows.

(Unit: KRW 000)


Category

The end of current period

Advances received
Unpaid tax
Total

The end of last period

40,709

62,134

558,577

467,072

599,286

529,206

16. Provisions
In case of returned goods, the group sets provision for liabilities. During this and the previous accounting
period, the changes of provision are as below:

(Unit:KRW 000)
Category
Base value
Increase

Last period
693,793

651,451

Estimated gross profit

263,556

304,867

Estimated disposal loss

85,424

87,518

348,980

392,385

Actual gross profit

315,300

285,006

Actual disposal loss

29,394

65,037

344,694

350,043

698,079

693,793

Sub-total

Decrease

Current period

Sub-total
Ending value

147

17.
, 1
1
.
.
( : )

54,905

271,934

386,377

274,928

904,257

738,034

43,900

38,572

346,329

351,776

113,162

123,002

104,769

1,803,865

1,621,241

(1,778,490)

(1,539,534)

(298,736)

80,280

54,905

18.
(1) .
( : )

80,000,000

80,000,000

500

500

18,889,760

14,395,378

9,444,880,000

7,197,689,000

148

17. Retirement benefits liabilities


The company set Contribution Retirement Pension for employees. The related pension of employees who work
more than a year is considered as part of the company pension. The related pension of employees who work
less than a year is considered as retirement benefits liabilities.

The changes of retirement benefits liabilities before the end of current and last period are as below:

(Unit:KRW 000)
Category

Current period

Base value

Last period
54,905

271,934

386,377

274,928

904,257

738,034

43,900

38,572

346,329

351,776

113,162

123,002

104,769

1,803,865

1,621,241

Pension payment

(1,778,490)

(1,539,534)

Retiree payments

(298,736)

80,280

54,905

Cost of sale
Selling and administrative
expenses
Ordinary research and
development costs

Service cost

Assets under construction


Immature Service
Development
Sub-total

Ending balance

18. Paid-in capital

1The details of capital items before the end of the current period and the end of the last period are as follows

(Unit: KRW)
Category
The total number of shares to be
issued
Par value per share
Issued shares
Common Stock

Current period

Last period

80,000,000 shares

80,000,000 shares

500

500

18,889,760 shares

14,395,378 shares

9,444,880,000

7,197,689,000

149

(2) .
( : , )

2013-01-01

14,138,617

7,069,309

129,565,228

2013-07-03

85,587

42,793

1,172,092

2013-07-31

85,587

42,793

1,178,730

2013-08-06

85,587

42,794

1,180,075

2013-12-31

14,395,378

7,197,689

133,096,125

2014-01-01

14,395,378

7,197,689

133,096,125

2014-12-23

4,494,382

2,247,191

40,111,848

2014-12-31

18,889,760

9,444,880

173,207,973

19.
(1) .
( : )

(*)

(13,670)

(13,670)

3,955,386

3,955,386

1,972,044

1,867,410

366,028

355,857

()

(37,224)

(37,224)

1,538,643

4,615,928

747,323

8,528,530

10,743,687

(*) 1,311 2009 8 5 .

150

2The details of paid-in capital before the end of current period and the end of last period are as follows

(Unit: Shares, KRW 000)


Category

Date

Outstanding shares

Capital

Share premium

Last period
Beginning of previous
period
Exercise of conversion
rights
Exercise of conversion
rights
Exercise of conversion
rights

2013-01-01

14,138,617

7,069,309

129,565,228

2013-07-03

85,587

42,793

1,172,092

2013-07-31

85,587

42,793

1,178,730

2013-08-06

85,587

42,794

1,180,075

2013-12-31

14,395,378

7,197,689

133,096,125

Beginning of current
period

2014-01-01

14,395,378

7,197,689

133,096,125

Use of
rights

2014-12-23

4,494,382

2,247,191

40,111,848

2014-12-31

18,889,760

9,444,880

173,207,973

End of previous period


Current period

preemptive

End of current period

19. Other capital


1The details of Other capital before the end of current period and the end of last period are as follows

(Unit:KRW 000)
Category
Treasury stock (*)

Current period

Last period
(13,670)

(13,670)

Gain on disposal of treasury


shares

3,955,386

3,955,386

Stock options

1,972,044

1,867,410

Equity method investments

366,028

355,857

Available-for-sale securities
valuation gains (losses)

(37,224)

(37,224)

1,538,643

4,615,928

747,323

8,528,530

10,743,687

Warrants consideration
Coversion rights
Total

(*)Treasury Stock is obtained in the form of sporadic shares in merger in August 5, 2009.

151

(2)
1)

,
.
1 (*)

2008 3 25

2010 3 22

2011 3 25

2012 3 22

2013 3 25

2014 3 28

2010 3 25

2012 3 22

2013 3 25

2014 3 22

2015 3 25

2016 3 28

~2015 3 24 ~2020 3 21 ~2023 3 24 ~2024 3 21 ~2025 3 24 ~2026 3 27


5,671

11,185

16,933

19,139

17,350

11,437

(*) 2009 ()
.
2)
.
( : , )

3,034

1,800

304,000

28,500

23,500

360,834

17,011

17,000

17,000

11,437

(2,500)

(6,000)

(7,000)

(15,500)

14,968

3,034

1,800

304,000

26,000

17,500

10,000

362,334

16,837

152

(2) Share-based Compensation


1) Share-based payment
The company will base on the special vote of the shareholders' meeting or Council Resolution to give sharebased payment to staff contributing to the foundation,domestic or overseas operation,ortechnological innovation
of the company
Category First(*)
Grant date

Payment methods

Event Period

March 25, 2008

Third

Fourth

Fifth

Sixth

Seventh

March 22, 2010

March 25, 2011

March 22, 2012

March 25, 2013

March 28, 2014

Equity-settled

March 25,2010~
March 24,2015

Exercise price

Issue of new
shares

Equity-settled

March 22,2012~
March 21,2020

KRW 5,671

March 25,2013~
March 24,2023

KRW 11,185

March 22,2014~
March 21,2024

KRW 16,933

Event
possible
conditions

Issue of new
shares

Issue of new
shares

March 25,2015~
March 24,2025

KRW 19,139

Issue of new
shares

March 28,2016~
March 27,2026

KRW 17,350

KRW 11,437

2 years after grant date

(*)During the merger in 2009, the conditions of stock options the incorporated company once paid to
employees did not change the staff could inherit directly

2) After the rights conferred day, the change details of the amount of exercisable stock options and weighted
pre-buy price are as follows

(Unit: share, KRW)


Weighted

Quantity

average
Category

First

Third

Fourth

Fifth

Sixth

Seventh

exercise

Total

price
Base value

Grant
Cancellation /
extinction

Event
Ending balance

3,034

1,800

304,000

28,500

23,500

360,834

17,011

17,000

17,000

11,437

(2,500)

(6,000)

(7,000)

(15,500)

14,968

3,034

1,800

304,000

26,000

17,500

10,000

362,334

16,837

153

3) .

( Black Scholes Model)

12,100

11,400

17,000

18,400

16,100

11,100

5,671

11,185

16,933

19,139

17,350

11,437

2.38%

3.23%

3.57%

3.59%

2.58%

2.76%

0.64

58.50%

45.77%

52.98%

52.69%

63.38%

81.87%

6,590

3,259

5,428

5,559

5,447

4,937

4) .
( : )

350,175

38,353

388,528

2,016,235

442,425

483,814

104,627

3,047,101

37,541

19,960

21,799

25,333

104,633

13,578

22,981

1,895

3,162

41,616

2,417,529

523,719

507,508

133,122

3,581,878

154

3) The hypothesis and method of calculating fair value of stock options are as follows:
Category

First

Third

Fouth

Fifth

Sixth

Seventh

The fair value approach

Calculation method
Share price on
entitlement day
Exercise price

(Black Scholes Model of option pricing model)

KRW 12,100

KRW 11,400

KRW 17,000

KRW 18,400

KRW 16,100

KRW 11,100

KRW 5,671

KRW 11,185

KRW 16,933

KRW 19,139

KRW 17,350

KRW 11,437

Risk-free
interest
2.38%
rate
Expected
exercise 0.64years
period
Expected volatility
58.50%
Expected
yield
Fair value

dividend

KRW 6,590

3.23%

3.57%

3.59%

2 years

2 years

2 years

45.77%

52.98%

52.69%

63.38%

KRW 3,259

KRW 5,428

2.58%

2.76%

2 years

KRW 5,559

2 years
81.87%
-

KRW 5,447

KRW 4,937

4) The details of compensation costs recognized as expenses which are related to stock-based compensation
are as follows:
(Unit: KRW 000)
Selling
and
administrativ
e expenses

Category
Succession of stock options
Recognized
compensation
costs
Compensation costs
Compensation
recognized,

cost

to

Total compensation cost

be

Manufacturi
ng costs

Construction
in process

R&D costs

Total

350,175

38,353

388,528

2,016,235

442,425

483,814

104,627

3,047,101

37,541

19,960

21,799

25,333

104,633

13,578

22,981

1,895

3,162

41,616

2,417,529

523,719

507,508

133,122

3,581,878

155

20.
(1) .
( : )

80,155

80,155

23,164,158

17,294,711

23,244,313

17,374,866

(2)
50%
10% .
,
.

156

20. Retained earnings


(1) The details of retained earnings before the end of current period and the end of last period are as follows:

(Unit:KRW 000)
Category

The end of current period

Legal reserve

The end of last period


80,155

80,155

Retained earnings

23,164,158

17,294,711

Total

23,244,313

17,374,866

(2) Legal reserves


In accordance with the provisions of the Commercial Law, the company must withdrawal legal surplus which
equals to 10% of annual profit before the legal surplus as much as 50% of the paidup capital. The legal
surplus reserve can not be distributed by cash, but can offset losses or be transferred into capital based on
resolutions of shareholders meeting
(3) Statement of profit distribution
(Unit:KRW
000)
Category

Current
period

Last
period

Disposal date: March 26, 2015


I.Retained earning before
appropriation
Retained earnings carried over from
prior period
Net Income

22,496,883

16,227,135

16,227,135

13,584,506

6,269,748

2,642,629

II. Appropriated retained earnings


Dividends

Scheduling verifications disposal:


March 24, 2014

(472,216)

(472,216)

(472,216)

Category
(Dividend per share (rate)
Current period: KRW 25 (5%)
Last period: -KRW (- %)
III. Retained earnings at the end of
the period

22,024,667

16,227,135

157

21.
.
( : )

9,029,818

8,190,689

904,256

738,034

1,731,392

1,567,263

68,115

42,042

767,870

642,169

70,578

63,153

110,947

129,269

751,768

714,993

1,233,293

1,354,095

6,847

5,303

60,761

86,928

275,291

86,273

8,232,342

1,222,789

1,560,151

760,059

873,807

909,474

14,640

10,284

35,602

41,951

7,537

19,160

89,584

23,731

176,724

174,004

158

21. Sales expense and management costs


The details of sales expense and management costs before the end of the current period and the end of the last
period are as follows

(Unit:KRW 000)
Category
Salary

Current period

Last period
9,029,818

8,190,689

904,256

738,034

1,731,392

1,567,263

68,115

42,042

Entertainment

767,870

642,169

Consumables

70,578

63,153

Communication costs

110,947

129,269

Tax and Dues

751,768

714,993

1,233,293

1,354,095

Water Utilities

6,847

5,303

Book printing

60,761

86,928

Transportation costs

275,291

86,273

Advertising expenses

8,232,342

1,222,789

Fees

1,560,151

760,059

Rent

873,807

909,474

Repairs

14,640

10,284

Premium

35,602

41,951

7,537

19,160

89,584

23,731

176,724

174,004

Retirement Benefits
Employee benefits
Vehicle Maintenance

Travel transportation

Power Ratio
Samples expense
Depreciation

159

725,354

1,518,951

196,573

176,646

6,401,415

6,515,965

49,161

161,964

206,647

187,272

177,777

382,661

269,997

272,779

82,722

189,211

34,110,969

26,187,112

160

Bad debt expenses

725,354

1,518,951

Export costs

196,573

176,646

6,401,415

6,515,965

49,161

161,964

Amortization of intangible fixed


t
Convention expenses

206,647

187,272

177,777

382,661

Building expenses

269,997

272,779

82,722

189,211

34,110,969

26,187,112

Sales commission
Education costs

Others
Total

161

22.
( ,
) .
( : )

1,247,558

(741,536)

4,573,397

4,027,893

7,054,953

2,469,717

15,627,636

14,947,777

(*2)

8,414,243

8,536,017

8,232,342

1,222,789

6,533,945

3,845,114

1,857,486

1,209,633

1,155,205

1,355,640

998,339

878,640

1,145,374

1,027,927

788,367

2,428,262

765,805

3,956,081

58,394,650

45,163,954

(*1)

(*1) .
( : )

12,343,369

11,679,201

1,158,368

1,049,425

2,068,397

2,047,862

57,502

171,289

15,627,636

14,947,777

(*2) , .

162

22. Operating expenses classified by the nature


The details of operating expenses (the sum of sales expense. management costs and ordinary development
expenses in Comprehensive Income Statement) classified by the nature before the end of current period and the
end of last period are as follows

(Unit:KRW 000)
Category

Current period

Last period

Semi-finished products and changes

1,247,558

(741,536)

Consumption of auxiliary materials and


inventories

4,573,397

4,027,893

Fluctuations in commodity

7,054,953

2,469,717

Employee benefits(*1)

15,627,636

14,947,777

Sales-related costs(*2)

8,414,243

8,536,017

Advertising expenses

8,232,342

1,222,789

Outsourced processing costs

6,533,945

3,845,114

Fees

1,857,486

1,209,633

Rent payments

1,155,205

1,355,640

Tax and Dues

998,339

878,640

1,145,374

1,027,927

Research and development

788,367

2,428,262

Other costs

765,805

3,956,081

58,394,650

45,163,954

Depreciation and amortization

Total operating expenses


(*1) The details of clerks wages are as follows

(Unit:KRW 000)
Category
Salary

Current period

Last period
12,343,369

11,679,201

Retirement Benefits

1,158,368

1,049,425

Employee benefits

2,068,397

2,047,862

57,502

171,289

15,627,636

14,947,777

Stock-based compensation costs


Total

(*2) Sales-related costs, including travel expenses, entertainment expenses and sales charges

163

23.
(1) .
( : )

411,952

383,734

171

20,229

2,195

5,735

824,159

372,872

805,224

1,215,823

(2) .
( : )

3,075,764

1,443,521

461

2,314

79,462

3,383

3,459,815

500,000

3,655,687

4,909,033

164

23. Finance income and finance costs

(1) The details of finance income during the current period and the last period are as follows

(Unit:KRW 000)
Category

Current period

Last period

Interest income
Currency arbitrage
Foreign
currency
translation
i
Gains on trading securities
Gain on disposal of available-forsale securities
Reversal of impairment losses on
available-for-sale securities
Total

411,952

383,734

171

20,229

2,195

5,735

824,159

372,872

805,224

1,215,823

(2) The details of finance expenses during current period and last period are as follows

(Unit:KRW 000)
Category
Interest expense
Loss
on
foreign
currency
transactions
Foreign currency translation loss
Loss on disposal of trading
securities
Loss on disposal of available-forsale securities
Total

Current period

Last period
3,075,764

1,443,521

461

2,314

79,462

3,383

3,459,815

500,000

3,655,687

4,909,033

165

24.
(1) .
( : )

256,449

260,421

126,478

108,571

109,230

154,157

1,050

4,953

31,335

43,751

4,928

524,542

576,781

(2) .
( : )

48,445

30,728

21,216

147,230

3,740

224,729

274,234

45,122

17,400

49,900

2,962

2,734

113,929

754,511

166

24. Other income and other expenses


(1) Other income details of current and previous terms are as follows:.

(Unit:KRW 000)
Category

Current period

Last period

Rental income

256,449

260,421

Currency arbitrage

126,478

108,571

Foreign
currency
translation
gains
Other Reversal of allowance for
doubtful accounts
Gain on disposal of tangible
assets
Miscellaneous revenue

109,230

154,157

1,050

4,953

31,335

43,751

4,928

524,542

576,781

Electrical Repair profit


Total

(2) Details of other expenses in the current and previous terms are as follows:.

(Unit:KRW 000)
Category
Loss
on
foreign
transactions

Current period
currency

Last period
48,445

30,728

21,216

147,230

3,740

Inventory disposal loss

224,729

Impairment of intangible assets

274,234

Other bad debt expenses

45,122

Donations

17,400

49,900

2,962

2,734

113,929

754,511

Foreign currency translation loss


Loss on disposal of tangible
assets
Loss on disposal of inventories

Miscellaneous loss
Total

167

25.
(1) .
( : )

1,052,601

711,054

(2,085,864)

1,600,169

657,169

(1,301,929)

416,501

40,407

1,009,294

(2) .
( : )

(867,952)

1,301,929

210,783

(657,169)

1,301,929

(3) .
( : )

5,909,448

3,622,354

1,300,079

796,918

53,384

1,498,277

(1,227,328)

(1,292,306)

416,501

41,215

(502,229)

(34,810)

40,407

1,009,294

0.68%

27.86%

()

( )

168

25. Income tax expense


(1) Details of Income tax expenses in the current and the last periods are as follows:

(Unit:KRW 000)
Category

Current period

Tax burden
Movements in deferred taxes due to
temporary differences
Income tax expense reflected directly in
equity

Last period
1,052,601

711,054

(2,085,864)

1,600,169

657,169

(1,301,929)

416,501

40,407

1,009,294

Corporate tax
Income tax expense

(2) Income tax expense information directly reflected in the capital is as follows:

(Unit:KRW 000)
Category

Current period

Last period

Warrants consideration

(867,952)

1,301,929

Conversion right price

210,783

(657,169)

1,301,929

Total

(3) .The relationship between tax expense and profit or loss before income tax expense is as follows:

(Unit:KRW 000)
Category

Current period

Last period

Income before income taxes

5,909,448

3,622,354

In accordance with the applicable tax rate

1,300,079

796,918

53,384

1,498,277

(1,227,328)

(1,292,306)

416,501

41,215

(502,229)

(34,810)

Income tax expense

40,407

1,009,294

The effective tax rate

0.68%

27.86%

Adjustments
Unauthorized expenses (income)
Tax credits and tax reduction
corporate tax

Others (rate difference, etc.)

169

(4) () .
<>
( : )


(108,135)

(321,083)

(429,218)

693,793

4,287

698,080

7,394,559

451,420

7,845,979

1,500,000

2,370,650

(1,490,924)

2,379,726

642,660

642,660

376,846

274,821

651,667

54,906

25,374

80,280

70,092

(16,244)

53,848

21,241

(3,789)

17,452

(1,712)

1,712

(1,374,722)

2,456,925

3,831,647

(426,554)

(426,554)

(1,458,068)

(1,553,266)

(3,011,334)

(575,879)

(46,239)

(622,118)

(222,973)

(222,973)

(84,025)

84,025

4,614,241

(372,874)

4,241,367

47,723

47,723

274,234

(1)

274,233

(20,544,651)

14,871,694

(5,672,957)

14,741,554

(9,827,703)

4,913,851

(5,917,857)

5,917,857

4,707,540

2,586,755

706,494

5,917,857

13,918,646

2,412,874

59,421

2,472,295

3,448,533

569,085

214,850

1,301,929

5,534,397


, . ,

.

170

(4) Source and Changes in deferred tax assets (liabilities) are as follows:
<The current period>
(Unit:KRW 000)
Balance
beginning
year

Category

at
of

Differences
based
adjustment

on

Reflecting
capital

Loss

Balance at end of year

Temporary differences
Accrued income

(108,135)

(321,083)

(429,218)

Return reserves

693,793

4,287

698,080

Allowance for doubtful accounts

7,394,559

451,420

7,845,979

Loss on valuation of equity method

1,500,000

2,370,650

(1,490,924)

2,379,726

642,660

642,660

376,846

274,821

651,667

Retirement benefit liabilities

54,906

25,374

80,280

Valuation loss

70,092

(16,244)

53,848

Government grants

21,241

(3,789)

17,452

Government
subsidies
temporarily amortization

(1,712)

1,712

(1,374,722)

2,456,925

Equity method investment securities


impairment
Accrued expenses

Dishonored bill
Bond repayment premium

3,831,647

Equity method investments

(426,554)

(426,554)

(1,458,068)

(1,553,266)

(3,011,334)

Stock-based compensation costs

(575,879)

(46,239)

(622,118)

Impairment of land

(222,973)

(222,973)

(84,025)

84,025

Impairment losses on available-forsale securities

4,614,241

(372,874)

4,241,367

Loss on valuation of available-forsale securities

47,723

47,723

274,234

(1)

274,233

(20,544,651)

14,871,694

(5,672,957)

14,741,554

(9,827,703)

4,913,851

5,917,85
7
5,917,85
7

Adjust conversion rights

Temporary depreciation allowance

Impairment of intangible assets


Adjustment of warrants
Repayment premiums
Warrants consideration
The total temporary differences
Unused
forward.

deduction

Deferred tax assets / liabilities

carried

(5,917,857)

4,707,540

2,586,755

706,494

2,412,874

59,421

2,472,295

3,448,533

569,085

214,850

1,301,92
9

5,534,397

13,918,646

After consideration, the company forcasts that it is able to obtain enough income to deduct deferred tax assets
from the next year. However, if there is not enough income according to the situation of investment assets
subsidiary companies, the company can not recongnise deferred tax assets.

171

<>
( : )

(78,125)

(30,010)

(108,135)

651,451

42,342

693,793

6,030,998

68,086

1,295,475

7,394,559

(391,570)

391,570

1,500,000

1,500,000

435,045

(58,199)

376,846

271,935

(217,029)

54,906

161,979

(91,887)

70,092

142,040

(120,799)

21,241

(4,645)

2,933

(1,712)

5,108,863

(1,277,216)

3,831,647

(3,043,435)

1,585,367

(1,458,068)

(398,178)

(81,729)

(95,972)

(575,879)

(222,973)

(222,973)

(228,070)

144,045

(84,025)

5,319,025

(704,784)

4,614,241

47,723

47,723

274,234

274,234

(20,544,651)

(20,544,651)

14,741,554

14,741,554

(5,917,857)

(5,917,857)

15,302,067

(13,643)

(4,663,027)

(5,917,857)

4,707,540

1,682,247

85,742

644,885

2,412,874

5,048,702

82,741

(380,981)

(1,301,929)

3,448,533

(5) () .
( : )

1,490,924

2,586,757

(27,601,453)

(27,601,453)

(26,110,529)

(25,014,696)

172

<The last period>


(Unit:KRW 000)
Balance at
beginning of
year

Category

Differences
based
adjustment

Reflecting
capital

Loss

on

Balance
at
end of year

Temporary differences
Accrued income

(78,125)

(30,010)

(108,135)

Return reserves

651,451

42,342

693,793

6,030,998

68,086

1,295,475

7,394,559

Trading securities gains

(391,570)

391,570

Equity method loss

1,500,000

1,500,000

Accrued expenses

435,045

(58,199)

376,846

Retirement benefit liabilities

271,935

(217,029)

54,906

Valuation loss

161,979

(91,887)

70,092

Government Grants

142,040

(120,799)

21,241

(4,645)

2,933

(1,712)

5,108,863

(1,277,216)

3,831,647

Allowance
accounts

for

doubtful

Government
subsidies
temporarily amortization
Dishonored bill
Bond repayment premium
Adjust conversion rights

(3,043,435)

1,585,367

(1,458,068)

Stock-based compensation
costs

(398,178)

(81,729)

(95,972)

(575,879)

Impairment of land

(222,973)

(222,973)

(228,070)

144,045

(84,025)

5,319,025

(704,784)

4,614,241

47,723

47,723

274,234

274,234

(20,544,651)

(20,544,651)

Repayment premiums

14,741,554

14,741,554

Warrants consideration

(5,917,857)

(5,917,857)

temporary

15,302,067

(13,643)

(4,663,027)

(5,917,857)

4,707,540

Unused deduction carried


forward.

1,682,247

85,742

644,885

2,412,874

Deferred
liabilities

5,048,702

82,741

(380,981)

(1,301,929)

3,448,533

Temporary depreciation
allowance
Impairment
losses
on
available-for-sale securities
Loss on valuation of
available-for-sale securities
Impairment of intangible
assets
Adjustment of warrants

The
total
differences

tax

assets

(5) Temporary differences can not be recongnised as deferred tax assets (liabilities) in the current period and
the last period are as follows

(Unit:KRW 000)
Category
Subsidiaries
Goodwill
Total

The end of current period

The end of last period

1,490,924

2,586,757

(27,601,453)

(27,601,453)

(26,110,529)

(25,014,696)
173

26.
(1) .
( : , )

(1)

5,869,447,715

2,613,059,447

14,505,067

14,250,977

405

183

(2) (*)
(1 2)

(*)
( : )

(1)

14,395,378

14,252,108

(2)

(1,131)

(1,131)

110,820

14,505,067

14,250,977

(3)
(1 + 2 + 3)

174

26. Earnings per share


(1) The Basic earnings per share for the current and the last accounting period are as follows:

(Unit:KRW,Share)
Categor

Current period

Net income shares(1)

Last period

5,869,447,715

2,613,059,447

14,505,067

14,250,977

405

183

The weighted average number of


outstanding common shares (2) (*)
Basic earnings per share(1 2)

(*) The weighted average number of outstanding common shares calculation

(Unit: Shares)
Category
The weighted average number of shares
outstanding (1)
Weighted average number of treasury
shares(2)
Rights issue of shares(3)
The weighted average number of
common shares outstanding(1 + 2 + 3)

Current period

Last period
14,395,378

14,252,108

(1,131)

(1,131)

110,820

14,505,067

14,250,977

175

(2)
.
( : )

2,247,191

5,633,802

802,568

10,096

1,436

2,139

3,051,195

5,646,037


.
(3)
.
( : )

5,869,447,715

2,861,042,267

15,307,635

19,886,918

383

144

() (*)

(*) ()
( : )

(1)
(2)
(3)
(4)
(1 + 2 + 3 + 4)

14,505,067

14,250,977

5,633,802

802,568

2,139

15,307,635

19,886,918

176

(2) Common stocks chargeable securities


Dilutive Potential Common stock
Up until the end of this and the previous accounting period, the details of dilutive potential Common stock are as
below:

(Unit:Share)
Category

Current period

Last period

Warrants
Conversion right

2,247,191

5,633,802

802,568

10,096

1,436

2,139

3,051,195

5,646,037

Stock options
Total

Preemptive right and stock options did not cause the dilutive effect during the current accounting period.
Therefore the weighed average numbers of issued common shares were not taken into account when calculating
the diluted earnings per share.
(3) Diluted earnings per share
The details of diluted earnings per share during the current and the last accounting period are as follows:

(Unit:KRW)
Category

Current period

Net income after adjustments


Weighted average number of
shares outstanding (diluted) (*)

Last period

5,869,447,715

2,861,042,267

15,307,635

19,886,918

383

144

Diluted earnings per share

(*) The weighted average number of common trading shares (diluted)

(Unit:shares)
Category
The weighted average number of Common
stocks distribution (1)
Warrants (2)
Conversion rights (3)
Stock options (4)
The weighted average number of common
shares outstanding (1 + 2 + 3 + 4)

Current period

Last period
14,505,067

14,250,977

5,633,802

802,568

2,139

15,307,635

19,886,918

177

27.
.
( : )

1.

5,869,448

2,613,059

1,334,534

1,164,697

57,502

172,830

3,459,815

500,000

979,933

862,902

725,354

1,518,951

45,122

207,015

187,419

147,230

(50,137)

22,404

19

(5,735)

(824,159)

(372,872)

(154,157)

(1,050)

(4,953)

(91,887)

274,234

(389,941)

(383,734)

3,075,760

1,443,521

40,407

1,009,294

6,151,627

8,798,691

()

(8,598,989)

(5,927,056)

()

(95,410)

5,000,000

()

(20,631)

26,211

()

(1,838,296)

(541,817)

()

119,237

(176,954)

()

244,504

5,124,765

()

6,389,939

2,148,512

()

(72,500)

(60,716,461)

2.


3.

()

178

27. Statement of Cash Flow


The details of the cash flow statement during the current and the last accounting period are as follows:

(Unit:KRW 000)
Category

Current period

1. Net Income
2. Adjustment Items
Retirement Benefits

Last period
5,869,448

2,613,059

1,334,534

1,164,697

57,502

172,830

3,459,815

500,000

979,933
725,354
45,122
207,015
(50,137)
-

862,902
1,518,951
187,419
147,230
22,404
19

(5,735)

(824,159)

(372,872)

(154,157)

(1,050)

(4,953)

(91,887)

274,234

Interest income

(389,941)

(383,734)

Interest expense

3,075,760

1,443,521

40,407

1,009,294

6,151,627

8,798,691

Decrease in trade receivables (Increase)

(8,598,989)

(5,927,056)

Reduction of the dishonored bill(increase

(95,410)

5,000,000

(20,631)
(1,838,296)
119,237

26,211
(541,817)
(176,954)

244,504

5,124,765

6,389,939
(72,500)

2,148,512
(60,716,461)

Stock-based compensation costs


Loss on disposal of financial assets held
for trading
Loss on disposal of available-for-sale
financial assets
Depreciation
Bad debt expenses
Other bad debt expenses
Amortization
Loss on disposal of tangible assets
Foreign currency translation
Miscellaneous profit
Gain on disposal of short-term financial
instruments
Gain on disposal of financial assets held
for trading
Reversal of impairment losses on
available-for-sale securities
Reversal of allowance for doubtful
accounts
Gain on disposal of tangible assets
Writing off the allowance of impairment
loss on inventory.

Impairment of intangible assets

Income tax expense


Sub-total
3. From operating activities Changes in assets and liabilities

Reduction of long-term prepayments


(Increase)
Decrease in receivables (increase)
Decrease in prepayments (Increase)
Decrease in prepaid expenses (increase)
Decrease (increase) in Value added
Tax refundable
Decrease in inventories (Increase)
Increase in trade payables (Decrease)

179

()

(398)

(18,952)

()

(21,425)

(42,869)

6,170,911

(17,140,570)

1,910

38,580

50,241

(1,778,490)

(1,838,272)

4,287

42,342

5,600,059

(79,067,710)

17,621,134

(67,655,960)

()
()
()

()

4. (1+2+3)

(2)
.
( : )

8,891,782

1,237,009

16,465,081

180

Deposits increased (decreased)

(398)

(18,952)

Increase in advance payments (decrease)

(21,425)

(42,869)

Increase in accounts payable (Decrease)

6,170,911

(17,140,570)

Increase in accrued expenses (Decrease)

1,910

38,580

50,241

(1,778,490)

(1,838,272)

4,287

42,342

5,600,059

(79,067,710)

17,621,134

(67,655,960)

Increase in VAT deposits (decrease)


Pension payments
Return liabilities increase (decrease)
Sub-total
4. Total(1+2+3)
(2) Non-cash transaction
The details of important non-cash inflow and outflow are as follows:

(Unit:KRW 000)
Trading Content
Interest expense recognized in assets under
construction
Interest expense recognized in development
Tangible assets Acquisition-related payables
changes

Sum amount of money


8,891,782
1,237,009
16,465,081

181

28.
(1) .

()

(2) .
(:)

()

()

519,60

173,61

86,80
7
-

85,208

909

256,449 2,036,867 7,978,28

36,10

()

171,241 2,036,867 7,978,28

()

556,60

260,42

2,574,0 2,441,00

595,49

2,574,0 2,441,00

595,49

(3)
.
( : )

()

294,800

14,804

1,956,066

1,978,406

91,107

47,901

50,000,000

50,000,000

19,240,894

54,196,903

14,460,000

19,460,000

14,769,604

71,288,067

19,460,000

106,223,210

()

182

28. Related party transaction


(1) Till the end of the current period, the Parent Company of the Group is as follow.

Relation

Company Name

Parent Company

Celltrion

(2) During the current and the last accounting period, the details of transations between the related parties are
as follows:
(Unit:KRW 000)

Special

Current period
Related party

relations

Profit
Rent
Income

hip
CParent
t
Company

Celltrion

Interest
expense

Sales

Profit

Commissions,
etc.

Rent
Income

Expense
Interest
expense

Sales

Commissions,
etc.

2,036,867

7,978,280

519,600

173,614

2,574,000

2,441,001

595,495

85,208

86,807

909

36,100

256,449

2,036,867

7,978,280

556,609

260,421

2,574,000

2,441,001

595,495

Hanskin
Dreamem

Total

Expense

171,241

Celltrion
Healthcare
Others

Last period

(3) Up until the end of the current and the last accounting period, the details of payables and receivables
between the reporting company and its related parties are as follows:
(Unit: KRW 000)
Special
relationship
Category

Parent
Company

Others

Related
party

Celltrion

Celltrion
Healthcare

receiveables

Last period

payables

receiveables

payables

Accounts
Receivable

294,800

Accounts
receivable

14,804

Accrued expenses

1,956,066

1,978,406

Accounts Payable

91,107

47,901

Portion of
term debt

50,000,000

Long-term
borrowings

50,000,000

Bond with warrants

19,240,894

54,196,903

14,460,000

19,460,000

14,769,604

71,288,067

19,460,000

106,223,210

Accounts
receivable
Long-term
prepayments

Total

Current period

Accounts

long-

183

(4) .
( : )

()

()

10,000,000

50,000,000

110,000,000

23,000,000

23,000,000

10,000,000

50,000,000

133,000,000

23,000,000

(5)
.
( : )

6,000,000

()

2012.3.20 ~ 2015.2.27

20,000,000

2014.4.18 ~ 2016.4.18

10,000,000

2014.4.18 ~ 2019.4.18

1,200,000

()

2014.6.9 ~ 2015.6.9

184

(4) During the current and the last accounting period, the amounts of important borrowings from the related
parties are as follows:
(Unit:KRW 000)
Special
relationship
Category

Current period
Related party

Parent Company
Others

Borrowing

Celltrion

Repayment

Borrowing

Repayment

10,000,000

50,000,000

110,000,000

23,000,000

23,000,000

10,000,000

50,000,000

133,000,000

23,000,000

Celltrion Holdings
Total

Last period

(5) Up until the end of the current accounting period, the details of the guaranteed payment from the related
parties are as follows:
(Unit:KRW 000)
Providers

Representative
director
Representative
director
Representative
director
Representative
director

Price Guarantee
6,000,000

Warranty

Woori Bank

2012.3.20 ~ 2015.2.27

Debt Guarantees

2014.4.18 ~ 2016.4.18

Debt Guarantees

2014.4.18 ~ 2019.4.18

Debt Guarantees

2014.6.9 ~ 2015.6.9

Debt Guarantees

20,000,000

Korea
Bank

Development

10,000,000

Korea
Bank

Development

1,200,000

Warranty details

Warranty processing

National Bank

185

(6) .


()
-2008 10 24

1 -2010 5 17 , 2 -2010 10 5 ,
3 -2012 12 31
2009 6 30 15 , 3
, 5 .
, ()

()
()
() .

25,000
25,000 () 9
2,780 (, CT-P06 2,760 ), ()
()
. , 2014
2014 12 31
14,460 ()
.

() .
() 2010
() , () 2009 1

186

(6) Up until the end of the current accounting period, the main agreements between the reporting company and
the related parties are as follows:

Category
Agreement Name

Contract partner

Contents
Primary dealership contract and grant contract modifications

Celltrion Healthcare

Contract date

The first contract date Oct.24th,2008


The first contract revision date May 17th, 2010
The second contract revision date Oct. 5th, 2010
The third contract revision date Dec.31st,2012
In 15 years since Jun. 30th, 2009, contracts could be automatically extended for five
years if no written indications are made by the either party until three months before
the expiry.

Term

The Celltrion Phram is given the following rights: the rights to sell within the
domestic market various new drugs that are being or will-be developed by Celltrion,
including biosimilar drugs and therapeutic antibodies, and specific products that
Celltrion Healthcare has obtained from Celltrion the monopoly rights to sell.

Agreement

Dealership
consideration

give

Dealership
consideration
Settlement

give

Mortgage offer

Notes

KRW 25,000 MN

The advance money of KRW 25,000 MN is pre-paid for Celltrions products of 9 kinds.
Each product is paid for KRW 2,780 MN, except for CT-P06 (which is paid for KRW
2,760 MN). The cash paid by consumers should, in prior, be deducted with the
amount of money paid to Celltrion Healthcare. In addition, till the end of 2014, the
unliquidated advance money was primarily deducted from the cargo loans of other
outbound products. According to the agreement that the unliquidated advance
money of KRW 14,460 MN till the end of 2014 should be repaied to Cellitrion, this
advance money should be recognized as the receivables.

The agreed guaranteed asset should be offered to Celltrion Phram before the
advance money, served as a compensation for the dealership, is settled.

In the year of 2010, Celltrion Healthcare transplanted its investment department to


the Celltrion Holdings in the way of spinoff. On Jan.23rd, 2009, the biggest
shareholder of Celltrion Holdings, Seo Jung-Jin, was elected as the representative
director of Cellrion.
187

2008 () " "


25,000 , 2012 12 " "
CT-P06 9 2014 12 .
25,000 5,540 ,
19,460 5,000 .
14,460 2015
.
() "CT-P06 " "CT-P13
" 2010 2012 .
CT-P06 CT-P13 13,000 57,996 .
()
3.52% 17.27%.
, ()
() 50,000 ()
50,000 .

188

In 2008, the Group signed the Basic agreement of dealership with Celltrion Healthcare and paid the
long-term advance money of KRW 25,000 MN. According to the All-round revised agreement of
dealership signed on December, 2012, all advance money paid for the nine kinds of products except
CT-P06 should be settled by the end of December, 2014. Therefore, KRW 5,540 MN out of the KRW
25,000 MN long-term advance money should be offset with the accounts payable.
Until the end of the current accounting period, KRW 5,000 MN out of the unliquidated KRW19, 460 MN
will be recovered in cash. All the uncovered KRW 14,460 MN will be covered in 2015 as agreed upon
and be classified under the heading of accounts receivable.
In addition, according to the CT-P06 supply contract and CT-P13 supply contract with Celltrion
Healthcare, the Group bought the inventory assets from 2010 to 2012. Therefore, until the end of the
current accounting period, the inventory assets of CT-P06 and CT-P13 respectively are 13,000 MN and
57,996 MN.
Until the end of the current accounting period, the amount of receivables and inventory assets, offset
by the dealership and product supply contracts signed between the Group and Celltrion Healthcare,
accounted for 3.52% and 17.27%, respectively, of the total assets.
In addition, the representative director of the Parent Company, the largest shareholder of Celltrion
Holdings, offers 50,000 shares of Celltrion Holdings and 50,000 shares of Celltrion Healthcare to the
Group as a guarantee for receivables.

189

(6)

( ) ,
.
( : )

2,152,908

2,127,199

297,810

350,096

2,450,718

2,477,295

29.
(1)
.

50,000

2014 7 3
,

.

190

(6) Key management personnel compensation


Key management personnel bear the rights and responsibility to plan, direct and control
the groups activities, in either a direct or an indirect way. All the directors, whether they
are business executive directors or not, are to be included. The details of the key
management personnel compensation are as below:

(Unit: KRW 000)


Category

Current period

Short-term employee benefits

Last period
2,152,908

2,127,199

297,810

350,096

2,450,718

2,477,295

Retirement Benefits
Total

29. Emergency and other agreements


(1) Pending litigation

Until the end of the current accounting period, the details of the pending litigation where the company served as
the defendant are as below:
Types of events

Litigation amounts

Patent infringement claims KRW 50,000,000


and claims prevention

Prosecutor
Roche Diagnostics
GmbH-Mannheim,

Competent court
The Seoul Central
District Court

Progress
Before the first
trial verdict

Germany

As for the lawsuit, for damages mentioned above, the judgment made on July 3rd, 2014 dismissed the plaintiffs
claim. As for the lawsuit for patent infringement, it is not reflected on the financial statement because no
reasonable prediction could be made as to the final result.

191

(2)
.
( : , USD)

KRW

9,000,000

8,984,923

KRW

3,000,000

997,571

KRW

4,000,000

4,000,000

(D/A)

USD

2,000,000

1,114,314

USD

177,200

(1,630

USD

300,000

USD 250,600)

USD

400,000

132,498

KRW

3,000,000

1,738,296

KRW

2,000,000

2,000,000

(60 )

KRW

50,000,000

50,000,000

KRW

20,000,000

20,000,000
(360 )

KRW

10,000,000

10,000,000

()


(600 )


(300 )

()

KRW

1,000,000

1,000,000

KRW

102,000,000

98,720,790

USD

2,877,200

1,246,812


(12 )

192

(2) Financial Institutions Credit Ceiling Agreement

Until the end of the current accounting period, the companys important agreements with the financial institutions
are as below:

(Unit: KRW 000, USD)


Financial
Institutions

SME Bank

Woori Bank

Category

Currency

Spinning liquid

Discount Bills

KRW

9,000,000

8,984,923

General corporate loans

KRW

3,000,000

997,571

KRW

No credit system (D / A)

USD

2,000,000

Foreign check collection

USD

177,200

Import letters of credit at


sight

USD

300,000

Imports letters of longterm credit

USD

400,000

132,498

General retail banking


loans

KRW

3,000,000

1,738,296

Driving
general
corporate loans

KRW

2,000,000

2,000,000

4,000,000

Collateral
information

Establishment of
4,000,000 Rights to Real estate

Circulation of corporate
funds

Collateral (KRW
1,114,314 1,630 MN and USD
250,600)

CEO payment
guarantees (KRW 6
BN)

Corporate Loan Facility

KRW

50,000,000

Real estate collateral


50,000,000rights (KRW 60 BN)

Business
loans

KRW

20,000,000

20,000,000

10,000,000

Guarantees (KRW 30
10,000,000BN)

operating

Korea
Development
Acquisition of Privately
Bank
Placed Bond in Korean
Currency (won)

Kookmin
Bank

Limit
commitments

Corporate
general
working capital loans

Sum

KRW

Real estate collateral


rights (KRW 36 BN)
CEO payment

CEO payment
1,000,000guarantees (KRW 1.2
BN)

KRW

1,000,000

KRW

102,000,000

98,720,790

USD

2,877,200

1,246,812

193

30.
1108 ""
.
(1)
.
( : )

:
22,862,382

26,595,095

1,703,752

2,336,407

4,744,927

3,888,159

1,596,745

2,197,607

14,259,906

10,800,002

7,573,114

4,200,178

11,967,528

65,800

2,036,000

2,574,000

66,744,354

52,657,248

(2) .
( : )

62,443,766

47,332,994

2,461,545

2,552,765

1,286,295

1,705,346

552,748

1,066,143

66,744,354

52,657,248

194

30. Business Department


The company has reported the Business Department separately according to K-IFRS No.1108.
The information about each department on the Companys general level is as below:
(1) The goods and services operating income occurring in the current and the last
accounting period is as below:
(Unit: KRW 000)
Category

Current period

Last period

Product sales :
Godex

22,862,382

26,595,095

Hepadif

1,703,752

2,336,407

Tamipool

4,744,927

3,888,159

Somax

1,596,745

2,197,607

Others

14,259,906

10,800,002

7,573,114

4,200,178

11,967,528

65,800

2,036,000

2,574,000

66,744,354

52,657,248

Product sales :
Ram Island
Others
Service sales
Total

(2) The information about departments in different regions in the current and the last accounting period is as
follows:

(Unit: KRW 000)


Category
Domestic

Current period

Last period
62,443,766

47,332,994

Kazakhstan

2,461,545

2,552,765

Philippines

1,286,295

1,705,346

552,748

1,066,143

66,744,354

52,657,248

Overseas

Others
Total

195

31.
(1)
, ,
, , ,
.
, , ,
.
.
.
.
BBB(S&P) .

.

.
1)

,
.
.

196

31. Risk Management


(1)
Financial risk management
The Companys risk management focuses on financial assets and financial liabilities. The financial assets consist of
cash, financial assets available for sale, account receivable and other bonds. The financial liabilities consist of
account payable, borrowed funds, corporate bonds and other debts.
The Company is exposed to the risks of changeable exchange rates, interest rates and market prices, which will
influence the value of assets, liabilities and forecasted transactions. The purpose of risk management is to control
the market exposure in operating activities and financing activities. The Company takes methods to avoid both
derived and non-derived risks in cash flow in accordance with risk evaluation outcome. To realize effective credit
risk management, the Company only hedges with financial institutions rated up to BBB standards (S&P). In
addition, the Company also evaluates the trading partners relative credit and sets an absolute amount to manage
the credit risk of financial instruments.
In order to manage exposure elements of this kind of risk, the Company executes long-lasting monitoring and
forecasting on all kinds of liability prospects and carries out relevant risk management policies.
1) Credit risk management
The company has several ways to manage credit risks. It only conducts transactions with business partners with a
credit rating above certain level. It also knows of whether or not there is a monthly settlement of financial assets
and the customer's ability to pay. Through these management processes, the Company can adjust the supply for
the customer and consequently minimizes the credit risk.

197

.
( : )

3,564,133

11,615,179

42,920,051

34,685,001

30,684,222

15,517,389

305,760

1,305,760

77,474,166

63,123,329

2)

,
.

,
.
.
<>
( : )

1 ~5

863,948

863,948

863,948

25,843,331

25,843,331

25,843,331

89,967,603

101,967,630

20,213,030

81,754,600

50,000,000

53,447,164

53,447,164

9,445,592

13,131,926

150,000

12,981,926

19,240,894

26,113,851

300,000

25,813,851

195,361,368

221,367,850

100,817,473

120,550,377

198

The biggest exposures to the credit risks of financial assets at the end of the current and the last accounting
periods are as follows:

(Unit: KRW 000)


Category

The end of current period

Cash and cash equivalents

The end of last period

2,336,908

11,615,179

Accounts Receivable

38,696,326

34,685,001

Other receivables

10,402,208

10,268,688

1,305,760

1,305,760

52,741,202

57,874,628

Available-for-sale financial assets


Total

2) Liquidity risk management

In order to manage liquidity risks, the Company has developed short and long-term capital management plans,
analyzes and reviews the total actual cash outflow and matches the maturity time of financial assets and liabilities
with that cash flow.
The Company holds that the financial liabilities could be repaid by the incoming cash from financial assets and
cash flow from operating activities. In addition, in order to manage liquidity risks caused by temporary or
abnormal business environment, the group has signed with financial institutions using discount bond agreements
and conditional loan contracts based on varied trading patterns.
Until the end of the current and as of the last accounting periods, the maturity analysis of remaining financial
liabilities contracts is as follows:

< The end of current period>


(Unit: KRW 000)
Category

Carrying amount

Contractual cash flow Within a year

1~5 years

Trade payables

1,490,780

1,490,780

1,490,780

Other debt payments

7,752,381

7,752,381

7,752,381

83,807,264

95,489,960

28,564,099

66,925,861

Other borrowings

50,000,000

52,371,521

52,371,521

Convertible bonds

9,299,863

13,169,426

150,000

13,019,426

56,805,768

78,566,554

900,000

77,666,554

209,156,056

248,840,622

91,228,781

157,611,841

Financial
borrowings

institutio

Bonds with warrants


Total

199

<>
( : )

1 ~5

936,448

936,448

936,448

5,790,182

5,790,182

5,790,182

69,366,186

81,585,960

21,985,960

59,600,000

50,000,000

56,900,000

3,450,000

53,450,000

11,373,580

13,460,908

360,000

13,100,908

54,196,903

79,241,554

900,000

78,341,554

191,663,299

237,915,052

33,422,590

204,492,462


.
3)

. ,
.
.
USD
,
,
.
, .
.
10%
. ,
.

200

< The end of last period >


(Unit: KRW 000 )
Category
Trade payables

Carrying amount

Contractual cash flow

Within a year

1-5 years

936,448

936,448

936,448

5,790,182

5,790,182

5,790,182

Financial institutions
borrowings

69,366,186

81,585,960

21,985,960

59,600,000

Other borrowings

50,000,000

56,900,000

3,450,000

53,450,000

Convertible bonds

11,373,580

13,460,908

360,000

13,100,908

Bond with warrants

54,196,903

79,241,554

900,000

78,341,554

191,663,299

237,915,052

33,422,590

204,492,462

Other debt payments

Total

The maturity analyses above are based on the earliest payment date of the non-discounted
nominal cash flow.
3) Market risk management
The Company minimizes uncertainty on revenues and risk exposures through market risk management. Market
risk refers to the danger of the devaluation or shrinkage of asset portfolios caused by changeable interest rates,
foreign exchange and other market factors.

(a)Exchange rate risk management


The Company faces the exchange rate risk of USD from goods transactions and raw materials purchases. In
order to minimize this prospect, the Company uses the domestic currency in frequent transactions and money
transfers to avoid oversold position losses. The Company forbids speculative foreign exchange trading and
regularly oversees, assesses and manages the exchange rate risks.
The Company regularly measures the exchange rate exposure of Korean Won. Up until the end of the current and
as of the last accounting period, when different foreign functional currency exchange rates fluctuated by 10%,
the influence on pre-tax income gained by converting foreign currency of financial assets and liabilities is as
follows. Note though. The influence caused by the interest rate fluctuation is not included.

201

( : )

10%

USD

154,977

10%

10%

(154,977)

10%

253,855

(253,855)

.

,
.
(2)


.
.
.
.
( : )

.
196,739,013

192,941,205

3,564,133

11,619,425

193,174,880

181,321,780

214,425,697

168,412,367

90.09%

107.67%

. (/)

202

(Unit: KRW 000)


Category

Current period
10% rise

USD

154,977

Last period

10% drop

10% rise
(154,977)

10% drop

253,855

(253,855)

(b). Interest rate risk


Because the Company issues fixed-rate corporate bonds for fund financing, no interest rate risks lie inside cash
flow. The Company holds that the standard that measures fair value interest rate exposure is considered
unimportant.

2Capital risk management


The purpose of capital management is to continue to protect the Companys long-lasting
operation, deliver profits to shareholders and stakeholders, reduce the cost of capital and
maintain an optimal capital structure.
The Company uses the liability ratio to indicate the level of capital management. This ratio is
calculated by dividing the net debt to the total asset. The net debt and the total asset are
calculated based on the exposed amount in the financial statement.
Up until the end of the current and as of the last accounting period, the Companys liability
ratio is as below:
(Unit: KRW 000)
Category

Current period

Last period

. Net debt
Total liabilities

196,739,013

192,941,205

3,564,133

11,619,425

Net debt

193,174,880

181,321,780

. Capital

214,425,697

168,412,367

90.09%

107.67%

Cash and cash equivalents

. Debt(/)

203

32.
2015 1 20 2
50,000 ,
() 50,000 .
2015 2 13 5
30,000 .

4.

15

2014.12.31

14

2013.12.31

13

2012.12.31
( : )

15

14

13

145,086,493,795

137,318,114,434

140,615,319,662

2,546,271,163

10,071,947,222

2,989,438,922

252,077,886

39,362,493,520

34,685,000,643

29,789,826,809

19,365,589,771

5,893,668,688

6,577,607,180
5,582,500,000

75,925,522,371

80,129,309,501

84,372,086,361

7,886,616,970

6,538,188,380

11,051,782,504

267,580,987,376

222,669,692,080

189,460,464,245

5,983,114,035

4,300,795,955

1,261,472,705

305,760,032

1,305,760,032

1,503,033,255

7,301,905,855

7,301,905,855

7,301,905,855

195,498,894,396

144,860,958,371

114,870,320,814

53,101,137,879

42,112,437,015

37,381,389,012

5,390,175,179

3,327,834,852

4,902,342,604

19,460,000,000

22,240,000,000

412,667,481,171

359,987,806,514

330,075,783,907

113,680,748,689

26,254,164,413

108,892,591,669

804,062,180

826,128,074

64,388,287,635

204

32. Events after the balance sheet day


On the January 20th, 2015 council meeting, the Company decided to issue the second
unregistered private non-separable convertible bonds with warrants for KRW 50,000 MN and
to fully offset the borrowings from Celltrion.
In addition, on the February 13th, 2015 council meeting, the Company decided to issue the
fifth unregistered private convertible bonds for KRW 30,000 MN.

4. Financial Statements
15th period

14th period

13th period

Assets
Working capital
Cash and cash equivalents

145,086,493,795

137,318,114,434

140,615,319,662

2,546,271,163

10,071,947,222

2,989,438,922

Financial institutions Deposits

252,077,886

Accounts Receivable

39,362,493,520

34,685,000,643

29,789,826,809

Other receivables

19,365,589,771

5,893,668,688

6,577,607,180

Other financial assets


Inventories

5,582,500,000
75,925,522,371

80,129,309,501

84,372,086,361

7,886,616,970

6,538,188,380

11,051,782,504

267,580,987,376

222,669,692,080

189,460,464,245

5,983,114,035

4,300,795,955

1,261,472,705

305,760,032

1,305,760,032

1,503,033,255

7,301,905,855

7,301,905,855

7,301,905,855

195,498,894,396

144,860,958,371

114,870,320,814

53,101,137,879

42,112,437,015

37,381,389,012

5,390,175,179

3,327,834,852

4,902,342,604

19,460,000,000

22,240,000,000

412,667,481,171

359,987,806,514

330,075,783,907

Current liabilities

599,286,240

26,254,164,413

108,892,591,669

Trade payables

804,062,180

826,128,074

64,388,287,635

Other current assets


Non-current assets
Financial institutions
Deposits
Other receivables
Available-for-sale financial assets
Investments in subsidiaries
and corporate relations
Tangible assets
Intangible assets
Deferred tax assets
Other non-current assets
Total assets
Liabilities

205

28,024,077,494

5,555,885,908

20,770,803,164

84,253,322,775

19,366,185,948

23,641,575,001

599,286,240

505,964,483

91,925,869

85,167,784,505

166,318,153,660

64,966,902,712

84,400,766,146

165,570,483,063

64,065,429,067

698,079,475

693,792,951

651,451,004

68,938,884

53,877,646

250,022,641

198,848,533,194

192,572,318,073

173,859,494,381

182,652,853,207

140,293,814,081

136,634,536,646

22,577,038,022

16,307,289,914

13,664,661,400

8,589,056,748

10,814,384,446

5,917,091,480

213,818,947,977

167,415,488,441

156,216,289,526

412,667,481,171

359,987,806,514

330,075,783,907

()

206

Other debt payments

28,024,077,494

5,555,885,908

20,770,803,164

Short-term borrowings

84,253,322,775

19,366,185,948

23,641,575,001

Other current liabilities

599,286,240

505,964,483

91,925,869

Non-current liabilities

85,167,784,505

166,318,153,660

64,966,902,712

Long-term borrowings

84,400,766,146

165,570,483,063

64,065,429,067

698,079,475

693,792,951

651,451,004

68,938,884

53,877,646

250,022,641

198,848,533,194

192,572,318,073

173,859,494,381

182,652,853,207

140,293,814,081

136,634,536,646

22,577,038,022

16,307,289,914

13,664,661,400

8,589,056,748

10,814,384,446

5,917,091,480

Total equity

213,818,947,977

167,415,488,441

156,216,289,526

Total equity and liabilities

412,667,481,171

359,987,806,514

303,075,783

Provisions
Retirement benefit obligations
Total liabilities
Capital
Paid-up capital
Retained earnings
(accumulated deficit)
Other capital

207


15

2014.01.01 2014.12.31

14

2013.01.01 2013.12.31

13

2012.01.01 2012.12.31
( : )

15

14

13

()

64,708,353,876

50,083,248,020

44,707,596,162

21,920,487,146

15,384,857,148

13,484,037,607

42,787,866,730

34,698,390,872

31,223,558,555

33,240,707,400

25,799,537,805

24,008,782,064

788,366,935

1,441,929,964

2,131,004,345

8,758,792,395

7,456,923,103

5,083,772,146

520,116,923

571,848,031

301,429,754

113,784,483

754,463,958

2,241,820,656

783,011,488

1,187,507,812

1,604,885,344

3,655,222,318

4,908,987,773

1,420,350,099

6,292,914,005

3,552,827,215

3,327,916,489

23,165,897

910,198,701

(608,560,038)

6,269,748,108

2,642,628,514

3,936,476,527

6,269,748,108

2,642,628,514

3,936,476,527

()

432

185

310

()

410

145

310

()

()

()

208

Statement of Changes in equity


The 15th period

from 2014.01.01 to 2014.12.31

The 14th period

from 2013.01.01 to 2013.12.31

The 13th period

from 2012.01.01 to 2012.12.31


(Unit: KRW)
Capital

capital
2012.01.01 (Beginning capital)

6,145,637,500

Share issue
104,952,04

Net income

Changes
in equity

Profit reserves
9,728,184,873

Other
5,983,18

3,936,476,527

Equity
Total
comprehensiv Overseas
business
e income
translation
Stock option Recognition

The total capital


126,809,057,574
3,936,476,527

1,030,06

1,030,061,599

(1,096,15

3,521,548,969

Stock option exercise

160,959,500

4,456,746

Conversion claim events

762,711,500

20,156,43

2012.12.31 (Ending capital)

7,069,308,500

129,565,22

13,664,661,400

5,917,09

156,216,289,526

2013.01.01 (Beginning capital)

7,069,308,500

129,565,22

13,664,661,400

5,917,09

156,216,289,526

20,919,144,857

Bond warrants issued


Conversion right price

Net income

Changes
in equity

2,642,628,514

2,642,628,514

Equity
Total
comprehensiv Overseas
e income
business
281,36

Stock option Recognition

281,364,607

Stock option exercise


Conversion claim events

128,380,500

3,530,896

3,659,277,435

Bond warrants issued

4,615,92

4,615,928,359

Conversion right price


2013.12.31 (Ending capital)

7,197,689,000

133,096,12

16,307,289,914

10,814,38

167,415,488,441

2014.01.01 (Beginning capital)

7,197,689,000

133,096,12

16,307,289,914

10,814,38

167,415,488,441

Net income

Changes
in equity

6,269,748,108

6,269,748,108

Equity
Total
comprehensiv Overseas
e income
business
Stock option Recognition

104,63

104,635,035

(3,077,28

39,281,753,553

747,32

747,322,840

8,589,05
6,748

213,818,947,977

Stock option exercise


Conversion claim events
Bond warrants issued

2,247,191,000

40,111,84

Conversion right price


2014.12.31 (Ending capital)

9,444,880,
000

173,207,97
3,207

22,577,038,022

209


15 2014.01.01 2014.12.31
14 2013.01.01 2013.12.31
13 2012.01.01 2012.12.31
(: )

6,145,63
104,952,0

2012.01.01 ()

5,983,18

3,936,47
6 527

9,728,18

126,809,0
3,936,47
6 527

160,959

4,456,74

762,711
00

20,156,43
33

2012.12.31 ()

7,069,30

2013.01.01 ()

7,069,30

129,565,2
28 6
129,565,2

1,030,06

1,030,06

(1,096,15

3,521,54
20,919,14
8

5,917,09

13,664,66

5,917,09

2,642,62
8

13,664,66

156,216,2
89 26
156,216,2
2,642,62
8

128,380
00

3,530,89
6 93

281,364
607

281,364
607

4,615,92

3,659,27
3
4,615,92
83 9

7,197,68
9 000
7,197,68

2013.12.31 ()
2014.01.01 ()
(

9 000

133,096,1
25 081
133,096,1
25 081

16,307,28
9 914
16,307,28
99
6,269,74
8 08

10,814,38
4 446
10,814,38

167,415,4
88 441
167,415,4

104,635
03

104,635
03

(3,077,28
3)
747,322

39,281,75
3 3
747,322

8,589,05
6 8

213,818,9
9

88 441
6,269,74
8 08

2014.12.31 ()

2,247,19
000

40,111,84
8 26

9,444,88
0 000

173,207,9
3 20

22,577,03
8 022

210

Statement of Changes in equity


The 15th period

from 2014.01.01 to 2014.12.31

The 14th period

from 2013.01.01 to 2013.12.31

The 13th period

from 2012.01.01 to 2012.12.31

(Unit: KRW)

Capital
capital

2012.01.01 (Beginning capital)

6,145,637,500

Share issue
104,952,04

Net income
Equity
Total
comprehensiv Overseas
business
Change e income
translation
s in
Stock option Recognition
equity
Stock option exercise

Profit reserves
9,728,184,873

Other

The total

5,983,18

126,809,057,5
3,936,476,5

3,936,476,527

1,030,06

1,030,061,5

(1,096,15

3,521,548,9

160,959,500

4,456,746

762,711,500

20,156,43

2012.12.31 (Ending capital)

7,069,308,500

129,565,22

13,664,661,400

5,917,09

156,216,289,5

2013.01.01 (Beginning capital)

7,069,308,500

129,565,22

13,664,661,400

5,917,09

156,216,289,5

Conversion claim events

20,919,144,8

Bond warrants issued


Conversion right price

Net income
Equity
Total
comprehensiv Overseas
e income
business
Change
Stock
option
Recognition
s in
equity Stock option exercise
Conversion claim events

2,642,628,5

2,642,628,514

281,36
128,380,500

3,530,896

281,364,60
3,659,277,4

Bond warrants issued

4,615,92

4,615,928,3

Conversion right price


2013.12.31 (Ending capital)

7,197,689,000

133,096,12

16,307,289,914

10,814,38

167,415,488,4

2014.01.01 (Beginning capital)

7,197,689,000

133,096,12

16,307,289,914

10,814,38

167,415,488,4

Net income

6,269,748,1

6,269,748,108

Equity

Total
comprehensiv Overseas
e income
business
Change
Stock option Recognition
s in
equity Stock option exercise

104,63

104,635,03

(3,077,28

39,281,753,5

747,32

747,322,84

8,589,05
6,748

213,818,947,9
77

Conversion claim events


Bond warrants issued

2,247,191,000

40,111,84

Conversion right price


2014.12.31 (Ending capital)

9,444,880,
000

173,207,97
3,207

22,577,038,022

211


15 2014.01.01 2014.12.31
14 2013.01.01 2013.12.31
13 2012.01.01 2012.12.31

()
























( )

15
18,344,095,288
18,560,078,239
68,858,328

14
(70,873,447,760)
(66,251,315,857)
325,408,884

1,036,637,452
(1,321,478,731)
(45,046,207,400)

(4,869,117,593)
(78,423,194)
(27,766,635,833)
5,541,414,400
2,122,685,095
1,119,375,000
56,690
743,796,491
121,045,755
1,818,182
1,145,154
238,237,500
(5,283,620,520)

372,872,193
167,377,095
1,050,000

110,030,420

(38,387,500)

(277,617,440)
(3,000,000,000)

(: )
13
(5,541,000,792)
(1,782,726,172)
647,510,369
41,626,000
(3,341,960,849)
(1,105,450,140)
(66,961,566,554)
41,698,047,229
5,378,358,596
143,599,906
1,460,747,328
2,071,561
10,000,000
2,928,439
554,358,833
(37,760,618,906)
(2,528,000,000)
(5,376,100,498)
(389,692,282)

(603,306,071)
(533,489,910)
(16,500,000)
(160,127,349)
(94,228,400)
(97,444,245)
(24,636,211,126)
(9,112,834,019)

(818,041,387)
(1,248,020,533)
(1,042,834,236)

(144,847,660)
(670,024,200)
(4,500,000)
(3,181,018,802)

(166,614,989)
(14,675,669,274)
(4,511,097,501)

(289,170,026)
(53,531,797,915)
(7,399,660,668)

(276,217,302)

(148,282,778)

(256,272,624)

(10,128,791,186)

(6,484,411,442)

(4,679,974,865)

19,156,237,722

105,725,930,677

74,117,203,682

70,303,892,184
110,000,000,000

3,521,548,969
40,188,062,474
50,000,000,000

(74,577,086,507)
(875,000)

(19,588,476,961)
(3,930,800)

(3,338,784)
7,082,508,300
2,989,438,922
10,071,947,222

(6,354,949)
1,608,281,387
1,381,157,535
2,989,438,922

33,714,257,101
20,000,000,000
10,000,000,000
(33,192,302,239)
(13,412,750)
(11,352,304,390)
20,198,331
7,525,676,059)
10,071,947,222
2,546,271,163

212

Statement of cash Flow


The 15th period from 2014.01.01 to 2014.12.31
The 14th period from 2013.01.01 to 2013.12.31
The 13th period From2012.01.01 to 2012.12.31
(Unit: KRW)
The 15th period
Cash flow from operating
Cash from operating activities
Interest received
Dividends received
Payment of interest
Income tax payments (refunds)
Cash flows
Decrease in short-term financial
Disposal of financial assets
Disposal of available-for-sale
Reduction of long-term loans
Decrease in short-term loans
Disposal of machinery
Disposal of vehicles
Disposal of
Reduction of deposit
Increase in short-term financial
Increase in short-term loans
Increase in trading financial
Increase in deposits
Increase in long-term loans
Acquisition of land
Acquisition of property
Acquisition of construction
Acquisition of machinery
Acquisition of vehicles
Acquisition of public equipment
Acquisition of assets under
Acquisition of Research and
Acquisition of other intangible
Capitalization of borrowing
Cash flows from financing
Stock option exercise
Increase in short-term
Increase in long-term debts
Issuance of convertible bonds
Decrease in short-term
Exercise conversion right
Repayments of convertible
Effects caused by exchange
Net increase in cash and cash
Based on cash and cash
Ending cash and cash

The 14th period

The 13th period

18,344,095,288
18,560,078,239

(70,873,447,760)
(66,251,315,857)

(5,541,000,792)
(1,782,726,172)

68,858,328

325,408,884

1,036,637,452
(1,321,478,731)
(45,046,207,400)

(4,869,117,593)
(78,423,194)
(27,766,635,833)
5,541,414,400
2,122,685,095
1,119,375,000
56,690
743,796,491
121,045,755
1,818,182
1,145,154
238,237,500
(5,283,620,520)

647,510,369
41,626,000
(3,341,960,849)
(1,105,450,140)
(66,961,566,554)
41,698,047,229
5,378,358,596
143,599,906

372,872,193
167,377,095
1,050,000

110,030,420

(38,387,500)
(603,306,071)
(533,489,910)
(16,500,000)
(160,127,349)
(94,228,400)
(97,444,245)
(24,636,211,126)
(9,112,834,019)
(276,217,302)
(10,128,791,186)
19,156,237,722

(277,617,440)
(3,000,000,000)
(818,041,387)
(1,248,020,533)
(1,042,834,236)
(166,614,989)
(14,675,669,274)
(4,511,097,501)
(148,282,778)
(6,484,411,442)
105,725,930,677

1,460,747,328
2,071,561
10,000,000
2,928,439
554,358,833
(37,760,618,906)
(2,528,000,000)
(5,376,100,498)
(389,692,282)
(144,847,660)
(670,024,200)
(4,500,000)
(3,181,018,802)

33,714,257,101
20,000,000,000
10,000,000,000
(33,192,302,239)
(13,412,750)
(11,352,304,390)
20,198,331
(7,525,676,059)

70,303,892,184
110,000,000,000

(289,170,026)
(53,531,797,915)
(7,399,660,668)
(256,272,624)
(4,679,974,865)
74,117,203,682
3,521,548,969
40,188,062,474
50,000,000,000

(74,577,086,507)
(875,000)

(19,588,476,961)
(3,930,800)

(3,338,784)
7,082,508,300

(6,354,949)
1,608,281,387

10,071,947,222
2,546,271,163

2,989,438,922
10,071,947,222

1,381,157,535
2,989,438,922
213

5.
15() 2014 12 31
14() 2013 12 31

1.
( "") 2000 11 17
, 2009
. , 2009
, .
2006 ,
9,444,880 .
.

()

9,103,074

48.19%

1,131

5.98%

9,785,555

45.83%

18,889,760

100.00%

214

5. Financial Statements comment

The 15th period


The 14th period

from 2014.01.01 to 2014.12.31


from 2013.01.01 to 2013.12.31

Celltrion Pharmaceutical Co., Ltd.


1. Company Profile
Celltrion Pharmaceutical Co., Ltd. (hereafter called "Our Company") was established on November 17, 2000 with
our main activities being software development. After the merger with Hanseo Pharmaceutical Co., Ltd. in 2009,
our company primarily engaged in the manufacturing and marketing of pharmaceuticals. In 2009, the
headquarters of our company was established at Yeoksam-dong, Gangnam-gu, Seoul, changing the name of our
company from Kodineoseu to Celltrion Pharmaceutical.
Our company was listed on the Korea Exchange and KOSDAQ market in 2006, with total capital being
9,444,880,000 KRW by the end of the current period, having gone through free or paid capital increases and
deduction several times since the establishment of the company.
Details of the major shareholders by the end of the current period are as follows:

Name of shareholder
Celltrion.Co.,Ltd
Treasury stock
Others
Total

Amount of shares owned

Ownership

9,103,074 shares

48.19%

1,131 shares

5.98%

9,785,555 shares

45.83%

18,889,760 shares

100.00%

215

2.
(1)
13 1 1

.
1027 ''
,
.
2015 3 6 , 2015 3
26 .
(2)

.
.
.
(3)

() .
(4)
,
, ,
.

.

216

2. Basis of preparation of the financial statements


1Application of accounting standard
For the preparation of financial statements in the External Audit, the company adopts the International
Accounting Standards (IAS), which are established by the International Accounting Standards Committee
(IASC), and Article 13, Item 1 from South Koreas Accounting Standards.
The financial statements of the parent company are separate financial statements, which are prepared in
accordance with IFRS 1027 Separate Financial Statements. The relationship between investors and
participants of the joint venture indicates that the investment in financial statements are based on direct
equity interest rather than on the operating results and net assets of the investee.
Our financial statements have been approved by the Board of Directors on March 6, 2015 and approved at the
Shareholders Meeting.
(2) Measurement standard
Except for the major items listed in the following financial statements, the others are prepared on the basis of
historical cost.
Available-for-sale financial instruments are measured at fair value.
Contingent consideration that is acquired in business combination that is measured at fair value.
(3) Functional currency and quoted currency
Items in our financial statements are indicated by the currency KRW (functional currency), used in our
operating activities, which is also the quoted currency in preparing financial statements.
(4) Estimates and judgments.
According to K-IFRS, in preparing financial statements, matters that affect assets, liabilities and revenues
before the end of the reporting period, the application of accounting policies and reported amount of cost
require the optimal judgements of management. Actual results may differ under different circumstances.

217

,
.

.
13 :
17 :
26 :
30 :
(5)

, .
3
,
.

. 3 ,
3

.
(6)
2014 1 1
.

2014 1 1 1032 ':
' .

218

The basic assumption for estimates is constantly being reviewed. Changes in accounting estimates recognize
the potential influence in the future.
Estimates that could have apparent influence and uncertainty of important adjustments within the reporting
period are as follows:
1)

Note 13: Intangible assets

2)

Note 17: Return liabilities

3)

Note 26: Income tax expense

4)

Note 30: Commitments and contingent liabilities

5)

Fair value measurement

Our accounting policies and disclosures are required to measure the most financial and non-financial assets
and liabilities at a fair value. The Company is currently establishing a fair value evaluation policy and
procedure, which is responsible for the evaluation of the departmental administration. It includes all important
fair value measurements at Level 3 in the fair value hierarchy. The results will be directly reported to the
financial executive.
Our evaluation department regularly reviews important inputs that cannot be observed. If third-party
information such as rating agencies are used in fair value measurements, the evaluation department will
include the assessment based on the third-partys evaluation in the fair value hierarchy, estimating whether
they meet the requirements of standard documents.
(6) Changes in accounting policies
In current financial statements and financial statements for the last period used for comparison, except for
those that have applied the revised standard documents that were exercised from January 1, 2014 (described
below), the Company applies the same accounting policies.
1)

Offsetting of financial assets and financial liabilities


For financial years that begin after January 1, 2014, the company applies the amendment to K-IFRS
1032 Financial Instruments: Presentation.

219


,

.
,
,
. 1032
.

2014 1 1 1036 '
' . ( )
.
1036 .

3.

, 2.(6)
.
(1)
1027 .
1027
. ,
.

220

This standard enforces the Company to currently hold a legally enforceable right of set-off with the
assets and liabilities that the Company recognizes. If the Company intends either to settle on a net
basis, or to realize the assets and settle the liabilities simultaneously, financial assets and liabilities
shall be offset, and the net amount presented in the statements of financial position.
The legally enforceable right to offset should not be dependent on future events. If the Company and
the other party are both in a nominal state of business, in the case of insolvency or bankruptcy, it
should be legally enforced. The amendment to K-IFRS 1032 does not have a significant impact on our
financial statements.
2)

Impairment loss disclosure


For financial years that begin after January 1, 2014, the company applies the amendment to IFRS
1036 Impairment of Assets. This Standard amends the recoverable impairment loss (or reversal)
recognized by impairment loss (or reversal), which is disclosed by individual assets or cash-generating
units. The amendment to IFRS 1036 does not have a significant impact on our financial statements.

3)

Significant accounting policies


In accordance with the K-IFRS, the Company accounts the significant policies that are applied in
preparing financial statements in the following part (see below). Except for the changes in
accounting policy that are explained in Note 2. (6), current financial statements and financial
statements of the last period that are used for comparison applies the same accounting policies.
a)

Subsidiaries and associates investment shares


The Companys financial statements are prepared in accordance with IFRS 1027 Separate

Financial Statements. The Company accounts for investments in subsidiaries and associates at
cost in accordance with IFRS 1027. Dividends gained from subsidiaries and associates should
be recognized as current profit (loss) when the right to receive dividends is confirmed.

221

(2)
,
.
(3)
.
( ) ,

.
,
,
. ,

.
(4)
, ,
,
.
,
.


.
, . ,
.

222

b)

Cash and cash equivalents include cash on hand, demand deposits, cash with high liquidity that
can be easily converted to a known amount as well as short-term investment assets.

c)

Inventories
Inventories are measured at the lower of cost and net realizable value. The cost of inventories
comprises all costs of purchase, costs of conversion, and other costs incurred in bringing the
inventories to their present location and condition.
When inventories are sold, the carrying amounts of those inventories are recognized as costs
of purchase during the period in which the related revenue is recognized. The valuation loss
and other all impairment loss, arising from a decrease in the net realizable value, are
recognized as an expense in the impairment period and devaluation occurs.
In addition, the reversal of the valuation loss caused by the increase in the net realizable value
of inventories is deducted from the cost of sales of inventories in the period in which the
reversal occurs.

d)

Non-derivative financial assets


Based on recognition and measurement, financial assets are classified in following categories:
financial assets at fair value through profit or loss, held-to-maturity-financial assets, loans and
receivables, and available-for-sale financial assets. They are recognized in the balance sheet at
the time of becoming a contracting party.
At initial recognition, financial assets are measured at fair value. For financial assets that are not
carried at fair value through profit or loss, their initial recognized costs comprise of transaction
costs directly associated with the acquisition of financial assets and fair value.

a)

Financial assets at fair value through profit or loss


After the initial recognition, financial assets at fair value through profit or loss are carried at
their fair value. Transaction costs that are related to the acquisition at initial recognition are
recognized through profit or loss

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a)

Held-to-maturity financial assets


Held-to-maturity financial assets are non-derivative financial assets with fixed maturity and
determinable payment amount. The Group has the intention and capability to hold the assets to
maturity. After the initial recognition, the assets are valued at amortized cost using the effective
interest method.

b)

Loans and receivables


Non-derivative financial assets with fixed or determinable payment amounts and without quoted
prices in an active market are classified as loans and receivables. After the initial recognition, the
assets are valued at amortized cost using the effective interest method.

c)

Available-for-sale financial assets


Available-for-sale items, or non-derivative financial assets that cannot be categorized into
financial assets at fair value through profit or loss, held-to-maturity financial assets, or loans and
receivables, are classified as available-for-sale financial assets. After the initial recognition, they
are measured at fair value and the changes in fair value are recognized in other comprehensive
income. However, equity instruments such as market prices that are not quoted in an active
market cannot be reliably measured at cost, but measured at cost.

d)

De-recognition of financial assets


De-recognition of financial assets occurs when contractual rights concerning cash flow have
expired, or rights concerning financial assets are transferred, or risks and rewards of owning
financial assets are largely transferred. Failing to retain most of the risks and rewards of
owning financial assets, the Company will remove the control of financial assets, which will
further result in de-recognition. Continuing to hold these financial assets, the Company will
recognize related financial assets depending on its involvement in financial assets and
recognize related liabilities.
If the rights concerning the cash flow of financial assets are transferredmost of the risks and
rewards of owning financials assets are retained by the Company, the recognition of related
financial assets will be continued and the received sale amounts will be recognized as liabilities.

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b)

Offsets of financial assets by financial liabilities

The company reserves the legal right to offset recognized assets with financial liabilities, when using net
value to settle assets. If there are also liabilities to be settled, financial assets can be offset by financial
liabilities and displayed in combined form on the balance sheet as a net value.
(5)Non-derivative financial liability
According to the substantial contents on the contract and definition of financial liabilities, the Group has
classified financial liabilities either as financial liabilities recognized as current profits or losses or as other
financial liabilities. They only confirm and combine balance sheets when becoming party to a contract.
a)

Financial liabilities recognized as current profits or losses measured by fair value.

Short-term financial liabilities and current profit or loss financial liabilities that are recognized on the initial
day, are categorized as current profit or loss financial liabilities, initially recognized issue and directly related
transaction cost are to be calculated into current profit or loss. Financial liabilities recognized as current
profits or losses are initially measured using fair value and, when changes in fair value occur, they are also
recognized as current profits or losses. Also, issuing cost and related transaction cost that incurred upon
initial recognition shall be immediately recognized as current profit or loss in the period in which they are
incurred.
b)

Other financial liabilities

Non-derivative financial liabilities that are not classified as financial liabilities recognized as current profits or
losses are classified as other financial liabilities. Other financial liabilities are measured at fair value, after
deducting issuing cost and related transaction cost that are incurred upon initial recognition. Other
subsequent financial liabilities are measured using their cost after depreciation through the effective-interest
method, while the interest expense also applies the effective-interest method.
Only when financial liabilities are disposed of (i.e. when contractual obligations are discharged, cancelled, or
expired) can they be removed from the combined balance sheet.
(6). Derivative financial instrument
Derivative commodity is measured at fair value upon initial recognition on the signing date of the contract,
while subsequent derivative commodity uses fair value at the end of each reporting period. Estimated loss
arising from the change in the fair value of derivative commodity shall be recognized in the following ways:

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a)

Hedge accounting
The Company signs derivative contract to hedge exchange risk and designates some derivate as a
hedging instrument to hedge exchange risks that are very likely to happen in future assets and
liabilities transactions.
At the inception of the hedge, there is formal designation and documentation of the hedging
relationship and the entitys risk management objective and strategy for undertaking the hedge.
That documentation shall include identification of the hedging instrument, the hedged item or
transaction, the nature of the risk being hedged and how the entity will assess the hedging
instruments effectiveness in offsetting the exposure to changes in the hedged items fair value or
cash flows attributable to the hedged risk.

b)

Cash Flow Hedge


If the fair value hedge for a derivative instrument meets the conditions for cash flow hedge
accounting, the effective portion shall be capitalized, while the ineffective portion is recognized in
current gain or loss.
Cash flow hedge is not recognized as a type of hedge relationship in the corporation. The
Company will stop the cash flow hedge accounting when a hedge instrument is expired, sold,
liquidated or exercised, or when it no longer satisfies the conditions for cash flow hedge
accounting. When the cash flow hedge is derecognized, the cumulative gains or losses for the
derivative instrument that are previously capitalized shall be recognized as current profit or loss of
the reporting period when the expected transaction occurs. Only when the expected transaction is
estimated that it will not occur shall the cumulative gains or losses for derivative instrument that
are previously capitalized be immediately recognized as current profit or loss.

c)

Other derivative instruments


Apart from derivative instruments designated as effective hedges, any other derivative
instruments shall be measured at fair value. When changes in fair value occur, they are
recognized as current profits or losses.

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(7)

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(7). Impairment losses on financial assets


We assess at the end of each reporting period whether there is any objective evidence that a financial asset,
except for financial asset at fair value through profit or loss, is impaired. If there is more than one objective
evidences and that the impairment loss has an effect on the future cash flow of the financial asset, the
impairment loss for that financial asset shall be recognized. However, estimated impairment loss arising from
future events shall not be recognized.
If any such evidence exists, an impairment loss shall be measured and recognized with the following:
1)

Amortized cost of the carrying amount of financial assets


As for financial assets measured at amortized cost, its impairment loss is estimated using the
difference between the book value and the current value of the estimated future cash flows
amortized on the basis of the initial effective interest rate (effective interest rate calculated at the
initial recognition).
For practical reasons, the impairment losses for financial instruments are measured at fair value,
using observable market prices.
An impairment loss is directly charged against the book value of the current asset or against the
allowance account.
In later periods, the value of the impairment loss may decline. If the reduction is objectively
related to incidents happening after the recognition of the loss, the recognized impairment loss
should be charged directly or adjusted for by reducing provisions, and recognized as a current loss.

2)

Costs of carrying amounts of financial assets


As for financial assets measured at cost, the impairment loss shall be measured using the
difference between the assets carrying amount and the present value of estimated future cash
flows discounted at the current effective interest rate for similar financial assets, and shall be
recognized as current gain or loss. This kind of impairment loss should not be charged.

3)

Available-for-sale financial assets


For the available-for-sale financial assets whose fair value loss is recognized in other
comprehensive income, when there is objective evidence that this loss exists, the difference
between the acquisition cost and the current fair value shall be recognized as cumulative loss in
other comprehensive income.
Impairment loss previously recognized in other comprehensive income according to the current
profit and loss shall be reclassified according to current profit or loss.
Impairment loss for available-for-sale equity instruments recognized according to current profit or
loss shall not be reversed. When an impairment loss is confirmed and an increase in the fair value
of available-for-sale debt instruments in the following accounting period is objectively related to
some future events, it should be reversed as a current profit.

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(8). Tangible assets


Tangible assets are measured at cost upon initial recognition. The cost of tangible assets includes the related
cost needed for operating the asset according to the will of the management and the cost for asset
liquidation, disposal and maintenance.
After initial recognition, cumulative depreciation amount and cumulative impairment loss are deducted from
the cost in arriving at the carrying amount of tangible assets.
Land is not considered to depreciate in value. For other tangible assets, residual value is deducted from the
acquisition cost, using the following service lives and straight line method which can best reflect the expected
realization of future economic benefit of related property.
For the part of the cost that is related to the formation of tangible assets and significant to the total cost of
tangible assets, depreciation should be calculated separately.
The profit or loss arising from de-recognition of tangible assets is determined by the difference between
the net income obtain from the disposal of the asset, and the carrying amount. The difference shall be
recognized as current profit or loss.
Estimated useful lives for tangible assets in the current period and the previous period are as follows:
category

Estimated useful lives

Buildings

30 years

Construction materials

20-30 years

Mechanical devices

515 years

Other tangible assets

5 years

Residual value, useful life and depreciation method shall be reevaluated at the end of reporting period. . If
changes are needed, such changes shall be accounted for and reflected in changes in accounting estimates.

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(9) Borrowing cost


Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset
shall be capitalized as part of the cost of that asset. Other borrowing costs are recognized as an expense. A
qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use or
sale. Financial assets and inventories that are produced in a short term or by other ways, are not eligible to be
classified as a qualifying asset. Assets that are ready for its intended use or sale at the time when they are
obtained are not eligible for capitalization.

(10). Intangible Assets


An intangible asset shall be measured initially at cost. After initial recognition, the cumulative value of
depreciation and impairment losses are subtracted from the cost of the intangible asset and the result will be
treated as the book value of the intangible asset.
The residual value of an intangible asset is the estimated amount that an entity would currently obtain from the
disposal of the asset, after deducting the estimated costs of disposal, if the asset were already of the age and in
the condition expected at the end of its useful life. The residual value of an intangible asset with a finite useful life
shall be assumed to be zero unless such intangible assets have no definite useful life and predictable depreciation.
Our estimated useful lives of intangible assets of the current and from the last period are as follows:

division
Goodwill
Memberships
Other intangible assets
R&D

The estimated useful lives and amortization


methods
Indefinite

Indefinite
5 years Straight-line
(*)

(*)Taking its useful life cycle into consideration, the development cost of capitalization is amortized
accordingly.

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The amortization period and the amortization method for an intangible asset with a finite useful life shall be
reviewed at least at the end of each financial year. If the expected useful life of the asset is different from
previous estimates, the amortization period shall be changed accordingly. If there has been a change in the
expected pattern of consumption of the future economic benefits embodied in the asset, the amortization
method shall be changed to reflect the changed pattern. Such changes shall be accounted for in accounting
estimates in accordance with IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors.
1)

Research and Development


Expenditure on research (or on the research phase of an internal project) shall be recognized as
an expense when it is incurred.
An intangible asset arising from development (or from the development phase of an internal
project) shall be recognized if, and only if, an entity can demonstrate all of the following:
(a) The technical feasibility of completing the intangible asset so that it will be available for use
or sale.
(b) Its intention to complete the intangible asset and use or sell it.
(c) How the intangible asset will generate probable future economic benefits.
If the other development expenditure can be reliably measured and recognized as intangible
assets, it should be recognized as an expense as incurred.

2)

Subsequent expenditures
Particular subsequent expenditures facilitating the economic benefits inflow should be recognized
as the cost of capitalization. Other expenditures such as internally generated goodwill and brand
should be recognized as incurred.

(11) Non-financial asset impairment


An entity shall assess at the end of each reporting period whether there is any indication that the nonfinancial assets may be impaired. (Inventories and deferred income tax assets not included) If any such
indication exists, the entity shall estimate the recoverable amount of the asset. Irrespective of whether
there is any indication of impairment, an entity shall also test an intangible asset with an indefinite
useful life for impairment annually by comparing its carrying amount with its recoverable amount.

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The recoverable amount is measured in different ways according to different types of assets. If the
recoverable amount of some particular asset cannot be precisely estimated, in replace of the recoverable
amount, the cash-generating unit is estimated instead. The recoverable amount of an asset or a cashgenerating unit is the higher of its fair value, less selling cost and its value in use. Value in use is the present
value of the future cash flows expected and time value of money to be derived from an asset or cashgenerating unit. Unpredictable risks should be discounted appropriately by the current market risk-free rate of
interest.
If the recoverable amount of an asset or cash-generating unit is less than its carrying amount, the carrying
amount of the asset shall be reduced to its recoverable amount. The carrying amount is recognized as the
current gain and loss.
For the purpose of impairment testing, goodwill acquired in a business combination shall, from the acquisition
date, be allocated to each of the acquirers cash-generating units, or groups of cash-generating units, that is
expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of
the acquirers are assigned to those units or groups of units.
An impairment loss recognized for goodwill shall not be reversed in a subsequent period. An entity shall
assess at the end of each reporting period whether there is any indication that an impairment loss recognized
in prior periods for an asset other than goodwill may no longer exist or may have decreased. If any such
indication exists, the entity shall estimate the recoverable amount of that asset. An impairment loss
recognized in prior periods for an asset other than goodwill shall be reversed if, and only if, there has been a
change in the estimates used to determine the assets recoverable amount since the last impairment loss was
recognized.
Different cash-generating units may be tested for impairment at different times. However, if some or all of
the goodwill allocated to a cash-generating unit was acquired in a business combination during the current
annual period, that unit shall be tested for impairment before the end of the current annual period. The
increased carrying amount of an asset attributable to a reversal of an impairment loss shall not exceed the
carrying amount that would have been determined (net of amortization or depreciation) had no impairment
loss been recognized for the asset in prior years.
(12) Government Grants
Government grants shall not be recognized until there is reasonable assurance that:
(a) The entity will comply with the conditions attaching to them; and(b) the grants w ill be received.
A government grant that becomes receivable as compensation for expenses or losses already incurred or for
the purpose of giving immediate financial support to the entity with no future related costs shall be
recognized in profit or loss of the period in which it becomes receivable.

Grants related to assets are government grants whose primary condition is that an entity qualifying for them
should purchase, construct or otherwise acquire long-term assets. These should be presented in the
statement of financial position is a systematic and reasonable manner.
Other government grants are used to compensate the expense or loss of entity.
Government grants used to compensate the expenses incurring in subsequent periods shall be recognized in
profit or loss when the related cost is recognized as expense. Also, the related expense should be deducted
from the government grants.
A government grant that becomes receivable as compensation for expenses or losses already incurred or for
the purpose of giving immediate financial support to the entity with no future related costs shall be
recognized in profit or loss of the period in which it becomes receivable.

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(13)

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(13) Employee Benefits


1)

Short-term employee benefits

Short-term employee benefits are employee benefits that are due to be settled within twelve
months after the end of the period in which the employees render the related service. When an
employee has rendered service to an entity during an accounting period, the entity shall recognize
the undiscounted amount of short-term employee benefits expected to be paid in exchange for
that service.
2)

Other long-term employee benefits

Other long-term employee benefits are employee benefits that are not due to be settled within
twelve months after the end of the period in which the employees render the related service. The
future benefits are discounted in accordance with the equivalent service value that the employee
has rendered in the current and past period.
Liabilities are determined after discounting the estimated future cash flows using a rate of return
on high quality corporate bonds with a maturity similar to the expiry of the relevant benefits.
Losses arising from actuarial assumption changes and experiential adjustments are recognized in
full in profit or loss when incurred.
As a liability (accrued expense), after deducting any contribution already paid if the contribution
already paid exceeds the contribution due for service before the end of the reporting period, an
entity shall recognize that excess as an asset (prepaid expense) to the extent that the prepayment
will lead to, for example, a reduction in future payments or a cash refund.
3)

Post-employment benefits: defined benefit plans


The company operates a defined benefit plan. As the defined benefit plan depicts, employees
deposit fixed money into the independent fund of the company. The company bears the legal or
constructive obligation to estimate the condition of payment and determine the payable amount of
the retirement pension in accordance with the deposited amount and the investment profit of
respective periods.
After rendering service for a considerable time period, the employees service can be exchanged
into the payables to offset their payments in the defined benefit plan. The residual amount can be
recognized as the retirement pension liability. If the amount already paid exceeds the
undiscounted amount of the benefits, an entity shall recognize that excess as an asset (prepaid
expense) to the extent that the prepayment will lead to, for example, a reduction in future
payments or a cash refund. In accordance with the K-IFRS, except for respective asset cost, the
others are recognized as expense.
241

For employees who work less than 1 year and cannot be listed as the retirement applicant, we are
setting an allowance for severance liability.

(14)
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(14) Provisions
A provision should be recognized when:
(a) An entity has a present obligation (legal or constructive) as a result of a past event;
(b) It is probable that an outflow of resources embodying economic benefits will be required to
settle the obligation; and
(c) A reliable estimate can be made of the amount of the obligation.
If these conditions are not met, no provision shall be recognized.
Unavoidability and uncertainty of risks in related with the provisions recognized should be taken into
consideration. In order to fulfill the current obligation at the end of the accounting period and recognize a
precise estimated amount of the contingent items, we should take the time value of currency and the
discounted value of payment into consideration.
The amount recognized as a provision shall be the best estimate of the expenditure required to settle the
present obligation at the end of the reporting period. The best estimate of the expenditure required to
settle the present obligation is the amount that an entity would rationally pay to settle the obligation at
the end of the reporting period or to transfer it to a third party at that time.
We check the residual amount of the estimated liability of each accounting period and adjust it to the best
estimate of the expenditure. The estimated liability related with them will be offset if the possibility that
resource with economic benefits is going outflow, is low.
The estimated liability is recognized as cost expense upon the initial recognition.

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(15) Foreign currency


A foreign currency transaction shall be recorded and translated using the closing exchange rate at
the date of the transaction.

At the end of each reporting period:


(a) foreign currency monetary items shall be translated using the closing rate;
(b) non-monetary items that are measured in terms of historical cost in a foreign currency shall be
translated using the exchange rate at the date of the transaction; and
(c) non-monetary items that are measured at fair value in a foreign currency shall be translated using
the exchange rates at the date when the fair value was determined.
All exchange margins arising from the translation of monetary items shall be accounted into current
profit and loss. There are 3 exceptions. Exchange differences arising from the monetary items at the
time of transactions, differences arising from net investment in a foreign operation should not be
accounted into current gain and loss, and differences arising from liability that is classified to be hedged.
In terms of gain and loss arising from translation of non-monetary items accounted into other
comprehensive income, currency translation difference generated by the Changes in Foreign Exchange

Rates related is also accounted into current gain and loss.


Related currency translation differences accounted into current gain and loss is accounted.
(16) Paid-up capital
Common shares are considered as capital. For incremental costs that are directly related to capital
transactions, the net value, in which tax payable costs are deducted, is paid-up capital.
When the Company reacquires its own equity instruments, the equity instruments are considered as
treasury stocks and directly deducted from the equity. Profit and loss caused by buying, selling or
cancelling its own equity instruments are not accounted into current profit and loss. The paid or
received amounts in acquiring or holding treasury stocks are recognized as capital directly.
(17) Share-based payment
Goods or services received in the share-based payment transactions shall be recognized on the day
of reception. The goods and services received from equity-settled share-based payment
transactions shall be recognized as the corresponding increase in capital. The goods or services
received from cash-settled, share-based payment transactions shall be recognized as the
corresponding increase in liabilities. The goods and services received from share-based payment
transactions shall be recognized as expenses if they fail to satisfy the conditions of being
recognized as share-based payment.

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a)

Equity-settled share-based payment


For a share-based payment transactions in which The Group receives good or services as
consideration for equity instruments of the entity (including shares and share options), or
in which the entity fails to fulfill the obligation to settle the transaction after receiving
goods or services, the entity shall measure the goods or services received, and the
corresponding increase in equity, directly, at the fair value of the goods or services
received. If the entity cannot estimate reliably the fair value of the goods or services
received, the entity is required to measure the goods or services received and the
corresponding increase in equity, indirectly, at the fair value of the equity instruments
granted. If only services acquired in the specific period are considered for equity
instruments granted, services corresponding to equity instruments shall be distributed in
the vesting period and recognized as the increase of equity.
Vesting conditions, other than market condition, are taken into account by adjusting the
number of equity instruments included in the measurement of the transaction amount.
Ultimately, the amount recognized for goods or services received as consideration for the
equity instruments granted is based on the number of equity instruments that eventually
vest. Hence, on a cumulative basis, the number of equity instruments granted shall be
renewed if the equity instruments granted do not vest because of failure to satisfy a
vesting condition. The fair value of equity instruments granted shall be based on market
prices.
Apart from the deficiency of vesting conditions (other than market condition) and the
failure of equity instruments granted, whether to change the granting conditions of
equity instruments is not associative with whether to cancel or to liquidate the equity
instruments. The services received shall be measured at the fair value estimated by
the smallest equity instrument on the measurement date. The change shall be
recognized if the conditions are changed to the benefit of employees by increasing
the fair value of equity payment agreement.
If the equity instruments granted are canceled or liquidated during the vesting period,
these equity instruments shall be recognized as vesting ahead. Conversely, we recognize
the amount of services received in the rest of vesting period at present. The amount paid
for employees during cancellation or liquidation shall be recognized as a repurchase of
equity instruments and a reduction in the amount of repurchase, and recognized in
expenses during the period.

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b)

Cash-settled share-based payment


The entity acquires goods or services by incurring cash or liabilities to the supplier of
those goods or services for amounts that are based on the price (or value) of the entitys
equity instruments (share or share options). For cash-settled, share-based payment
transactions, the entity is required to measure the goods or services acquired and the
liability incurred at the fair value of the liability at each reporting date. Until the liability is
settled, the entity is required to re-measure the fair value of the liability at each reporting
date and at the date of settlement, with any changes in value recognized in profit or loss
for the period. The services acquired by employees and incurred liability shall be
recognized during the working period.

(18) Revenue
Revenue shall be measured at the fair value of the consideration received or receivable,
taking into account the amount of any discounts and volume rebates allowed by the entity.
a)

Sale of goods
The entity has transferred to the buyer the significant risks and rewards of
ownership of the goods. The entity retains neither continuing managerial
involvement to the degree usually associated with ownership nor effective control
over the goods sold. The amount of revenue can be measured reliably. It is
probable that the economic benefits associated with the transaction will flow to the
entity. And the costs incurred or to be incurred in respect of the transaction can be
measured reliably.

b)

Lease income
Lease income shall be recognized over the lease period on an accrual basis.

c) Interest income, dividend income


It is probable that the economic benefits associated with interest received from
transferring assets to others and dividends received from associated economic
transactions will flow to the entity. The revenue shall be recognized if the amount
can be measured reliably. Interest shall be recognized using the effective interest
method. Dividends shall be recognized when the shareholders right to receive
payment is established.

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d)
Interest income, dividend income
It is probable that the economic benefits associated with interest received from transferring assets to
others and dividends received from associated economic transactions will flow to the entity. The
revenue shall be recognized if the amount can be measured reliably. Interest shall be recognized using
the effective interest method. Dividends shall be recognized when the shareholders right to receive
payment is established.
(19) Financial income and expenses
Financial income includes interest income, investment income from subsidiaries and associates
(except dividends from the investment of the company), sellable financial assets, profit or loss from
the disposal of financial assets and profit or loss produced by hedge instruments. Interest shall be
recognized as profit or loss in the period using the effective interest method. Dividends shall be
recognized when the shareholders right to receive payment is established.
Financial expenses include interest of borrowing, the amortization charge of liabilities and valuation
difference of hedge instruments recognized as profit or loss in the period. Interest of borrowing shall
be calculated using the effective interest method and recognized in profit or loss in the period.
(20)Corporate tax
Income tax
Income taxes consist of current income taxes and deferred income taxes. Apart from transactions and
events that are directly recognized as other comprehensive income or assets and taxes produced by
business combination, income taxes shall be recognized in profit or loss in the period.
Current income taxes
Current income taxes shall be measured based on taxable profits. Taxable profits add or deduct other
forms of profit or loss, untaxable items and non-deductible items in the period in the income statement.
It is different from the profit or loss in the income statement. The accrued income taxes of the
company associated with current income taxes shall be measured using the tax rates that have been
enacted.

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Deferred income tax


Deferred income taxes are based on the differences between taxable profits and the carrying amount
of liabilities that are recognized in an entitys statement of financial position. Deferred tax liabilities
recognize the taxable temporary differences. The company recognizes all deductible temporary
differences as deferred income tax. However, deferred income tax from the following situations are not
recognized as liabilities: a) it is initially recognized as goodwill; b) the assets and liabilities are not from
business combination transactions, and do not affect the accounting income or taxable income (tax loss)
of investment assets of branches and associates; c) it is related to joint venture stock investment, and
the investors and participants of the company can control it at reverse point; d) in the foreseeable
future, it is of high possibility not to reverse.
For potential taxable temporary differences associated with the equity of subsidiaries and associates,
the reversal time of temporary differences are able to be controlled. Temporary differences of the
predictable future would not expire, otherwise it shall be recognized as a liability. In addition, it is
probable that deferred tax assets produced by deductible temporary differences are able to be reversed
in a predictable period. It shall be recognized when the possibility for taxable profits to produce
temporary differences is high.
The carrying amount of a deferred tax asset shall be reviewed at the end of each reporting period. An
entity shall reduce the carrying amount of a deferred tax asset to the extent that it is no longer
probable that sufficient taxable profit will be available to allow the benefit of part or all of that deferred
tax asset to be utilized.
Deferred tax assets and liabilities shall be recognized at the end of the accounting period or measured
at the expected amount to be paid to the taxation authorities, using the tax rates that have been
enacted or substantively enacted. The measurement of deferred tax assets and liabilities shall follow
the law that would follow from the manner in which the entity expects to recover or settle its assets
and liabilities.
Deferred tax assets and liabilities are levied by the same taxation authority. The company has the
legal right to recognize the amount of reduction only if the entity has the intention to settle deferred
tax assets and liabilities on a net basis.

253

(21)

.


.
(22)
2014 1 1
.
.
.
1019 ''
3 ,

.
,
. 2014 7 1
.
1027 ''
, ,
1039
. 2016 1 1 .

254

21)Earnings per share


The company presents in the statement of other comprehensive income, basic and diluted earnings
per share. Basic earnings per share shall be calculated by dividing current net profits of ordinary equity
holders by the weighted average number of ordinary shares outstanding during the period. For the
purpose of calculating diluted earnings per share, an entity shall adjust profit or loss and the weighted
average number of shares outstanding, in consideration of the effects of all potential common stock
which have diluent effect.
(22) Unapplied standards
After establishment and publishing, for the accounting years beginning on or after January 1, 2014,
the standards worked out and amended that would not be adopted are noted below. The company did
not adopt those particular accounting standards in the early preparation of financial statements. The
company judges that the standards worked out and amended have little influence on financial
statements.
Enterprise accounting standards 1019 employee benefits
For employee benefits of third party payments that satisfy the conditions, the company amends
corresponding accounting standards to enable itself to deduct the contributions from the service cost
during the period in which the services are provided. Current net service cost and payable liabilities are
taken into account for the calculation of employee benefits associated with services. The employee
benefits shall be calculated using the distribution system and recognized on a straight-line basis.
The accounting standard shall be conducted for accounting years beginning on or after July 1,2014.
Enterprise accounting standards 1027 separate financial statements
When an entity presents separate financial statements, investments in subsidiaries, jointly controlled
entities and associates must be accounted for at cost in accordance with the Enterprise Accounting
Standards 1039 or at equity.
The regulation shall be conducted for the accounting years beginning on or after January 1, 2016.

255

4.
(1)
( : )

2,546,271

2,546,271

10,071,947

10,071,947

39,362,494

39,362,494

34,685,001

34,685,001

25,348,704

25,348,704

10,194,465

10,194,465

305,760

305,760

1,305,760

1,305,760

67,257,469

305,760

67,563,229

54,951,413

1,305,760

56,257,173

(2)
( : )

804,062

804,062

826,128

826,128

28,024,077

28,024,077

5,555,886

5,555,886

168,654,089

168,654,089

184,936,669

184,936,669

197,482,228

197,482,228

191,318,683

191,318,683

(3)
1)

.

( )

, (
)

256

4. Category and fair value of financial instruments


(1) Scope of financial assets
(Unit: KRW 000)
The end of current period
Category
Loans and
Receivables

Cash
and
equivalents

cash

The end of last period

Financial
Assets At
Fair Value
Through
Profit or
Loss

Financial
Assets
Available
For Sale

Loans and
Sum

Receivables

Financial
Assets At
Fair Value
Through
Profit 0r
Loss

Financial
Assets
Available
For Sale

Sum

2,546,271

2,546,271

10,071,947

10,071,947

Accounts Receivable

39,362,494

39,362,494

34,685,001

34,685,001

Other receivables

25,348,704

25,348,704

10,194,465

10,194,465

Available-for-sale
financial assets

305,760

305,760

1,305,760

1,305,760

67,257,469

305,760

67,563,229

54,951,413

1,305,760

56,257,173

Sum

(2) Scope of financial liabilities


(Unit: KRW 000)
The end of current period
Category

Financial
Assets At
Fair Value
Through
Profit or
Loss

The end of last period

Financial
Liabilities
Measured
At
Amortize
d Cost

Sum

Financial
Liabilities
At Fair
Value
Through
Profit or
Loss

Financial
Liabilities
Measured
At
Amortize
d Cost

Sum

Accounts payable

804,062

804,062

826,128

826,128

Other debt payments

28,024,077

28,024,077

5,555,886

5,555,886

Borrowings

168,654,089

168,654,089

184,936,669

184,936,669

Sum

197,482,228

197,482,228

191,318,683

191,318,683

(3) Fair value of financial instruments


1) Fair value hierarchy

Financial instruments for which the fair value is measured are categorized within the fair value hierarchy based
on the inputs used in the measurement of fair value

Division

The significance of the inputs

Level 1

Quoted prices(unadjusted) in active markets for identical assets or liabilities

Level 2

Inputs that are observable for the asset or liability either directly or indirectly

Level 3

Unobservable inputs for the assets or liabilities

257

2)

. , , , ,

, .
. 1
. 1 KOSPI
, KOSDAQ .

.
. ,
2 .

3 .
.
-
-

-

-

258

2) Assessments and presumptions for measurement of fair value


Fair value of financial instruments trading in active markets is calculated based on the market price at the end
of reporting period. Through exchanges, sellers, brokers, industrial groups, rating agencies or supervision
department, there exist actual regular transactions between independent parties with regularly used prices. The
disclosure of market prices of financial assets that we hold is buyer bids, which is included in level 1. The
majority of level 1 goods constitute equity instruments listed on KOSPI stock index and KOSDAQ stock index,
which are for short-term trades or available for sale.
For financial instruments that are not traded in active markets, we use valuation techniques for which sufficient
data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the
use of unobservable inputs. If all significant inputs of fair value are observable, the goods are included in level 2.
The goods are included in level 3 if more than one significant unobservable input is used to measure the fair
value
Measurement approaches of fair value of financial instruments are as follows.
- Quoted prices for similar goods or dealer price
- Fair value of interest swap is the present value of the future cash flows based on observable yield
curves
- Fair value of forward exchange is the present value of related cash flows converted by the
forward exchange rate at the end of reporting period
- Fair value of forward exchange is the present value of related cash flows converted by the forward exchange
rate at the end of reporting period

259

3)
. .
<>
( : )

305,760

305,760

305,760

<>
( : )

1,305,760

1,305,760

1,305,760

. 3 .
( : )

1,305,760

(1,000,000)

305,760

4)
( : )

9,445,592

9,769,071

11,373,580

11,870,936

19,240,894

19,904,245

54,196,903

54,201,297

28,686,486

29,673,316

65,570,483

66,072,233

260

3) Fair value classified at different levels


A. Fair values of financial instruments classified by levels are as follows.
<Current period>
(Unit: KRW 000)
Category

Book Value

Fair value
Subtotal

Level 1

Level 2

Level 3

Assets
Available-for-sale financial
assets

305,760

305,760

305,760

<Last period>
(Unit: KRW 000)
Category

Book Value

Fair value
Subtotal

Level 1

Level 2

Level 3

Assets
Available-for-sale financial
assets

1,305,760

1,305,760

1,305,760

B. Changes of fair value at the current period, which are determined as level 3, are as below.
(Unit: KRW 000)
Category

Foundation

Acquisition

Disposal

December
31, 2010
Available-for-sale financial
1,305,760
(1,000,000)
305,760
t
4) Book value and fair value of financial instruments which are not subsequently measured at fair value.
(Unit: KRW 000)
Category

The End Of Current Period


Carrying
Amount

The End Of Current Period

Fair value

Carrying
Amount

Fair Value

Borrowings
Convertible bonds

Bond with warrant


Sum

9,445,592

9,769,071

11,373,580

11,870,936

19,240,894

19,904,245

54,196,903

54,201,297

28,686,486

29,673,316

65,570,483

66,072,233

The management has estimated fair value similarly as the book value of the financial instruments that are
not recorded in the previous report and are recognized at amortized cost of a financial asset or

financial liability in the financial statements.

261

(4)
<>
( : )

(*1)

(*2)

389,941

20,198

410,139

(127,128)

(127,128)

389,941

(127,128)

20,198

283,011

(3,075,760)

(79,462)

(3,155,222)

(*1)

() + () + ()

(*2)

() + ()

<>
( : )

355,419

83,625

(24,555)

414,489

(3,459,815)

(3,459,815)

824,159

824,159

355,419

(2,552,031)

(24,555)

(2,221,167)

(1,443,520)

(2,314)

2,195

(1,443,639)

262

(4) Net profits and losses of financial instruments by category


<Current period>
(Unit: KRW 000)
Category

Interest
Income

Income
Dividends

Trading Profit
(* 1)

Valuation (*2)

Sum

Financial assets
Loans and receivables

389,941

20,198

410,139

(127,128)

(127,128)

389,941

(127,128)

20,198

283,011

(3,075,760)

(79,462)

(3,155,222)

Available-for-sale financial
assets
Sum
Financial liabilities
Financial liabilities measured
at amortized cost

(*1) foreign exchange gains (losses) + financial asset transaction gains (losses) +
financial asset impairment losses (write down)
(*2) foreign currency conversion profits (losses) + financial asset valuation profits
(losses)

< Last period >


(Unit: KRW 000)
Category

Interest
revenue

Income
Dividends

Trading
Profit

Valuation

Sum

Financial assets
Loans and receivables

355,419

83,625

(24,555)

414,489

Financial assets at fair value


through profit or loss

(3,459,815)

(3,459,815)

Available-for-sale financial
assets

824,159

824,159

355,419

(2,552,031)

(24,555)

(2,221,167)

(1,443,520)

(2,314)

2,195

(1,443,639)

Sum
Financial liabilities
Financial liabilities measured
at amortized cost

263

(5)


.
( : )

22,240,000

2,780,000

19,460,000

19,460,000

3,606,128

2,780,000

826,128

826,128

5.
.

.

.
( : )

8,984,923

6,093,779

666,030

552,264

9,650,953

6,646,043

264

(5) The balance of financial


assets and financial liabilities
The details of balance of financial assets and liabilities at the end of previous period are as follows.
(Unit: KRW 000)
Total Financial
Instruments

Category

Reverse
Amount

Financial
Write-down
Instruments(Net) amount

The Net
Amount

Financial assets:
Long-term
prepayments
Financial liabilities:

22,240,000

2,780,000

19,460,000

19,460,000

3,606,128

2,780,000

826,128

826,128

Trade payables

5. Transfer of
financial assets
Parts of the accounts receivables are transferred or discounted. Among them, transferable bonds and
discounted bonds that are outstanding at maturity with claims for repayment are recognized as short-term debt
and payables.
The details of financial discount and other customer endorsement in outstanding accounts receivables at the
end of current and previous period are as follows:
(Unit: KRW 000)
Category
Trade receivables discount
Accounts receivable endorsement
Sum

The end of current period

The end of current period


8,984,923

6,093,779

666,030

552,264

9,650,953

6,646,043

265

6.
.
( : )

1,747,837

8,816,140

798,434

1,255,807

2,546,271

10,071,947

7.
(1) .
( : )

42,625,251

(3,262,757)

39,362,494

37,308,106

(2,623,105)

34,685,001

8,343,016

(4,481,616)

3,861,400

10,264,354

(4,481,616)

5,782,738

15,612,344

(537,373)

15,074,971

521,686

(518,891)

2,795

429,219

429,219

108,136

108,136

24,384,579

(5,018,989)

19,365,590

10,894,176

(5,000,507)

5,893,669

67,009,830

(8,281,746)

58,728,084

48,202,282

(7,623,612)

40,578,670

70,295

(70,295)

100,671

(100,671)

4,753,904

4,753,904

2,999,943

2,999,943

1,376,734

(147,524)

1,229,210

1,448,376

(147,524)

1,300,852

6,200,933

(217,819)

5,983,114

4,548,990

(248,195)

4,300,795

73,210,763

(8,499,565)

64,711,198

52,751,272

(7,871,807)

44,879,465

266

6. Cash and cash assets


Details of cash and cash equivalents at the end of current and previous period are as follows.
(Unit: KRW 000)
Category

The end of current period

Savings Account
Foreign Currency Savings
Sum

The end of last period


1,747,837

8,816,140

798,434

1,255,807

2,546,271

10,071,947

7. Accounts receivables and other receivables


(1) Details of accounts receivables and other receivables
at the end of current and previous period are as follows.
(Unit: KRW 000)
Category

Accounts
Receivable

The End of Current Period


Amount of
Bonds

The End of Last Period

Allowance
For Doubtful
Accounts

Book Value

Amount of
Bonds

Allowance
For Doubtful
Accounts

Book Value

42,625,251

(3,262,757)

39,362,494

37,308,106

(2,623,105)

34,685,001

8,343,016

(4,481,616)

3,861,400

10,264,354

(4,481,616)

5,782,738

Accounts
Receivable

15,612,344

(537,373)

15,074,971

521,686

(518,891)

2,795

Accrued
Revenue

429,219

429,219

108,136

108,136

Sub-total

24,384,579

(5,018,989)

19,365,590

10,894,176

(5,000,507)

5,893,669

Sum

67,009,830

(8,281,746)

58,728,084

48,202,282

(7,623,612)

40,578,670

70,295

(70,295)

100,671

(100,671)

Long-Term
Loans

4,753,904

4,753,904

2,999,943

2,999,943

Deposit

1,376,734

(147,524)

1,229,210

1,448,376

(147,524)

1,300,852

Sum

6,200,933

(217,819)

5,983,114

4,548,990

(248,195)

4,300,795

73,210,763

(8,499,565)

64,711,198

52,751,272

(7,871,807)

44,879,465

Other
Current Receivables
Loans

Other
Receivables
Noncurrent

Bankruptcy Bill

Sum

267

(2) .
<>
( : )

3 ~

6 ~

22,233,714

12,621,933

4,298,199

3,471,405

42,625,251

8,343,016

8,343,016

515,744

11,220

15,085,380

15,612,344

80,078

81,218

159,787

108,136

429,219

595,822

81,218

171,007

23,536,532

24,384,579

22,829,536

12,703,151

4,469,206

27,007,937

67,009,830

70,295

70,295

4,753,904

4,753,904

12,122

26,265

1,338,347

1,376,734

12,122

26,265

6,162,546

6,200,933

22,829,536

12,715,273

4,495,471

33,170,483

73,210,763

<>
( : )

3 ~

6 ~

19,568,037

9,400,260

5,351,023

2,988,786

37,308,106

1,146,245

2,359,993

2,276,500

4,481,616

10,264,354

2,554

519,132

521,686

14,189

93,947

108,136

1,162,988

2,359,993

2,370,447

5,000,748

10,894,176

20,731,025

11,760,253

7,721,470

7,989,534

48,202,282

100,671

100,671

2,999,943

2,999,943

30,000

748,454

669,922

1,448,376

30,000

3,748,397

770,593

4,548,990

20,761,025

11,760,253

11,469,867

8,760,127

52,751,272

268

(2) Aging schedule of accounts receivables and other receivables of the end of current period
are as below.
< The end of current period >
(Unit: KRW 000)
Category
Accounts Receivable

3 months or
less

6 months~

3-6 months

More than 1
year

1 year

Sum

22,233,714

12,621,933

4,298,199

3,471,405

42,625,251

8,343,016

8,343,016

515,744

11,220

15,085,380

15,612,344

80,078

81,218

159,787

108,136

429,219

595,822

81,218

171,007

23,536,532

24,384,579

22,829,536

12,703,151

4,469,206

27,007,937

67,009,830

Bankruptcy Bill

70,295

70,295

Long-Term Loans

4,753,904

4,753,904

Deposit

12,122

26,265

1,338,347

1,376,734

12,122

26,265

6,162,546

6,200,933

22,829,536

12,715,273

4,495,471

33,170,483

73,210,763

Other Receivables
Loans
Current Accounts Receivable
Accrued Income
Sub-total
Sum
Other Receivables
Noncurrent

Sum
Sum

<The end of last period>


(Unit: KRW 000)
Category
Accounts Receivable

3 months or
less

6 months~

3-6 months

More than 1
year

1 year

Sum

19,568,037

9,400,260

5,351,023

2,988,786

37,308,106

1,146,245

2,359,993

2,276,500

4,481,616

10,264,354

2,554

519,132

521,686

14,189

93,947

108,136

1,162,988

2,359,993

2,370,447

5,000,748

10,894,176

20,731,025

11,760,253

7,721,470

7,989,534

48,202,282

Bankruptcy Bill

100,671

100,671

Long-Term Loans

2,999,943

2,999,943

30,000

748,454

669,922

1,448,376

30,000

3,748,397

770,593

4,548,990

11,760,253

11,469,867

8,760,127

52,751,272

Other Receivables
Loans
Current Accounts Receivable
Accrued Income
Sub-Total
Sum
Other Receivables
Noncurrent

Deposit
Sum
Sum

269

(3) .
<>
( : )

2,623,105

639,652

3,262,757

4,481,616

4,481,616

518,891

18,482

537,373

5,000,507

18,482

5,018,989

7,623,612

658,134

8,281,746

100,671

85,701

(116,077)

70,295

147,524

147,524

248,195

85,701

(116,077)

217,819

7,871,807

743,835

(116,077)

8,499,565

<>
( : )

1,199,564

1,423,541

2,623,105

4,537,675

(56,059)

4,481,616

616,989

(98,098)

518,891

5,154,664

(154,157)

5,000,507

6,354,228

1,423,541

(154,157)

7,623,612

5,261

95,410

100,671

147,524

147,524

152,785

95,410

248,195

6,507,013

1,518,951

(154,157)

7,871,807

270

(3) Changes of the allowance for bad debts of the current and previous periods are as follow
< Current period>
(Unit: KRW 000)

Category

Beginning Balance

Provision

Write-Off

End Of Period

2,623,105

639,652

3,262,757

4,481,616

4,481,616

518,891

18,482

537,373

5,000,507

18,482

5,018,989

7,623,612

658,134

8,281,746

Bankruptcy Bill

100,671

85,701

70,295

Long-Term Loans

147,524

(116,
077)
-

Deposit

248,195

85,701

7,871,807

743,835

Accounts Receivable
Other Receivables
Current

Loans
Accounts Receivable
Accrued Income
Sub-Total
Other Receivables

Noncurrent

Sum

(116,
077)
(116,
077)

147,524
217,819
8,499,565

<Last period>
(Unit: KRW 000)

Category

Beginning Balance

Provision

Write-off

End of Period

1,199,564

1,423,541

2,623,105

4,537,675

4,481,616

616,989

Accrued Income

5,154,664

Sub-Total

6,354,228

1,423,541

(56,
059)
(98,
098)
(154,
157)
(154,
157)

5,261

95,410

100,671

147,524

147,524

152,785

95,410

248,195

1,518,951

(154,
157)

7,871,807

Accounts Receivable
Other Receivables
Current

Loans
Accounts Receivable

Other Receivables
Noncurrent

Bankruptcy Bill
Long-Term Loans
Deposit

Sum

518,891
5,000,507
7,623,612

271

8.
(1) .
( : )

305,760

1,305,760

(2) .
1)
( : )

()(*1)

200,000

12.99%

1,000,000

1,000,000

()

111,200

1.65%

556,000

207,817

207,817

()(,) (*2)

200,000

1.96%

1,000,000

Almapharm Invest, LLP

1.26%

97,943

97,943

97,943

2,653,943

305,760

1,305,760

(*1) () ,
500,000 .
(*2) .
2)
( : )

() (*)

2010.12.18

660,000

510,974

() (*)

2010.04.01

900,000

900,000

1,560,000

1,410,974

(*) . (
) 373 .

272

8. Available-for-sale financial assets


(1) Details of non-current available-for-sale financial assets at the end of current and previous period.
(Unit: KRW 000)
Category

The End of Current Period

Non-marketable equity securities

The End of Last Period


305,760

1,305,760

(2) Contents of available-for-sale financial assets at the end of current and previous periods.
1) Non-marketable equity securities
(Unit: KRW 000)
Category

Amount of
Shares

The End
Ownership Period

of

Current

Acquisition Cost

The End of
Last Period

Book Value

Book Value

Ka Gyeong DEVELOPMENT-ORIENTED
REAL ESTATE INVESTMENT TRUST INC
(*1)

200,000

12.99%

1,000,000

1,000,000

YTN DMB

111,200

1.65%

556,000

207,817

207,817

Winnerstudy(acstudy) (*2)

200,000

1.96%

1,000,000

1.26%

97,943

97,943

97,943

2,653,943

305,760

1,305,760

Almapharm Invest, LLP

Sum

(*1) In the current period, shares of developing specific real estate investment companies are processed.
Therefore, the resulting 500,000 Opes loss of process are confirmed as the available-for-sale security
processing loss.

(*2) The total loss owing to capital encroachment of the investment companies is confirmed as loss in full..

2) Nonmarketable deal securities


(Unit: KRW 000)

Category

Maturity

Face Value

The End of Current


Period
Acquisition Cost

Temasek.,Ltd(*)
OPES.,Ltd(*)
Sum

The End of Last


Period
Book Value

Book Value

2010.12.18

660,000

510,974

2010.04.01

900,000

900,000

1,560,000

1,410,974

(*)Confirmation of total loss results from delisting and insolvency before prior periods.
Collect 373,000,000 Opes in last period, and confirm according to impairment reversals
of available- for-sale financial assets.
273

9.
.
( : )

71,182,180

71,182,180

75,491,008

75,491,008

2,852,669

(6,287)

2,846,382

1,831,079

(47,823)

1,783,256

841,433

(32,742)

808,691

1,462,372

(8,030)

1,454,342

96,328

(7,974)

88,354

223,602

(9,110)

214,492

71,649

(6,845)

64,804

86,355

(5,129)

81,226

15,495

15,495

236,901

236,901

919,616

919,616

868,085

868,085

75,979,370

(53,848)

75,925,522

80,199,402

(70,092)

80,129,310

10.
.
( : )

7,128,353

5,416,184

219,877

339,114

538,387

782,891

7,886,617

6,538,189

19,460,000

7,886,617

25,998,189

(*)

(*) ()
, 14,460

274

9. Inventory
Details of inventory by the end of last period and prior
period are as followed.
(Unit: KRW 000)
Category

The End of Current Period

Goods

Acquisition
Cost

The End of Last Period

Valuation
Allowance

Book Value

Acquisition
Cost

Valuation
Allowance

Book Value

71,182,180

71,182,180

75,491,008

75,491,008

Products

2,852,669

(6,287)

2,846,382

1,831,079

(47,823)

1,783,256

Materials

841,433

(32,742)

808,691

1,462,372

(8,030)

1,454,342

Sub materials

96,328

(7,974)

88,354

223,602

(9,110)

214,492

Supplies

71,649

(6,845)

64,804

86,355

(5,129)

81,226

15,495

15,495

236,901

236,901

919,616

919,616

868,085

868,085

75,979,370

(53,848)

75,925,522

80,199,402

(70,092)

80,129,310

Goods in
Transit
Semimanufactures
Sum

10. Other assets


Contents of other assets by the end of last period and prior period are as follows.
(Unit: KRW 000)
Category

Advance payments
Current

The End of Last


Period

7,128,353

5,416,184

Prepaid expenses

219,877

339,114

VAT

538,387

782,891

7,886,617

6,538,189

19,460,000

7,886,617

25,998,189

Subtotal
Non-current

The End of Current


Period

Prepayments (*)
Sum

(*)The non-current advances by the end of prior periods to ensure the domestic exclusive marketing right of
bio-similar. The money paid to Celltrion Healthcare, the payables, and the non even surplus by the end of last
period, about 14,460 million reclassification accounting.

275

11.
.
( : )

Celltrion Pharma USA,

Inc.
()

100%

803,368

100%

803,368

100%

6,498,538

100%

6,498,538

7,301,906

7,301,906

12.
(1) .
( : )

18,925,593

18,925,593

18,322,287

18,322,287

99,767,398

(657,343)

99,110,055

3,187,792

(281,693)

2,906,099

8,457,363

(267,138)

8,190,225

2,154,231

(133,848)

2,020,383

9,647,248

(3,410,231)

6,237,017

9,496,210

(2,689,321)

6,806,889

170,018

(81,633)

88,385

75,790

(66,276)

9,514

2,330,227

(1,787,135)

543,092

2,232,783

(1,459,042)

773,741

62,404,527

62,404,527

114,022,045

114,022,045

201,702,374

(6,203,480)

195,498,894

149,491,138

(4,630,180)

144,860,958

276

11. Investment of subsidiary enterprise


Details of the shares affiliated to company investments by the end of last period and prior
period are as follows.
(Unit: KRW 000)
Company Name

Location

Celltrion Pharm USA,

USA

Inc.

Major Business Activities

Services, Retail and Wholesale

The End of
Current Period

The End of Last


Period

Ownership Book value

Ownership

Book value

100%

803,368

100%

803,368

100%

6,498,538

100%

6,498,538

Research and Development of


Republic of
New Drugs and Fine
Korea
Chemicals-Related

Ltd. Celltrion Chemical


Laboratory

Technologies, Technical Sales

Sum

7,301,906

7,301,906

12. Tangible assets


(1) Book value of tangible assets by the end of last period and previous period.

(Unit: KRW 000)


The End of Current Period
Category

Accumulated
Depreciation

The End of Current Period

Book Value

Accumulated

Accumulated

Depreciation

Depreciation

Accumulated

Book Value

Depreciation

Land

18,925,593

18,925,593

18,322,287

18,322,287

Building

99,767,398

(657,343
)
(267,138
)

99,110,055

3,187,792

(281,693)

2,906,099

8,190,225

2,154,231

(133,848)

2,020,383

6,237,017

9,496,210

(2,689,321)

6,806,889

88,385

75,790

(66,276)

9,514

543,092

2,232,783

(1,459,042)

773,741

Structures
Machinery
Vehicles

Fixtures
Assets under
construction
Sum

8,457,363
9,647,248
170,018
2,330,227

(3,410,231
)
(81,633
)
(1,787,135
)

62,404,527

62,404,527

114,022,045

114,022,045

201,702,374

(6,203,480
)

195,498,894

149,491,138

(4,630,180)

144,860,958

277

(2) .
<>
( : )

()

18,322,287

603,306

18,925,593

2,906,099

533,490

(375,650)

96,046,116

99,110,055

2,020,383

16,500

(133,290)

6,286,632

8,190,225

6,806,889

160,127

(729,999)

6,237,017

9,514

94,228

(15,357)

88,385

773,741

97,444

(328,093)

543,092

114,022,045

50,715,230

(102,332,748)

62,404,527

144,860,958

52,220,325

(1,582,389)

195,498,894

<>
( : )

18,322,287

18,322,287

1,806,596

818,042

(108,385)

389,846

2,906,099

352,780

1,248,020

(64,037)

483,620

2,020,383

6,478,718

1,042,835

(265,253)

(789,436)

340,025

6,806,889

24,707

(35)

(15,158)

9,514

927,575

166,615

(998)

(319,570)

119

773,741

86,957,658

28,277,997

(1,213,610)

114,022,045

114,870,321

31,553,509

(266,286)

(1,296,586)

144,860,958

()

(3)
2 ,
.
( : )

8,891,782

6,484,411

7.08%

6.09%

(*) 1,237,009 .
(4) ,
( 30 ).

278

(2) Contents of differences concerning tangible investment assets during last period and
previous period are as follows.

<Current period>
(Unit: KRW 000)
Category

Accumul
ated

Accumul

Book value

depreci
Land

Accumul

ated

ated

depreci

depreci

Accumul

Book Value

ated
depreci

18,322,287

603,306

18,925,593

Buildings

2,906,099

533,490

(375,650)

96,046,116

99,110,055

Structures

2,020,383

16,500

(133,290)

6,286,632

8,190,225

Machinery

6,806,889

160,127

(729,999)

6,237,017

Vehicles

9,514

94,228

(15,357)

88,385

Fixtures

773,741

97,444

(328,093)

543,092

114,022,045

50,715,230

(102,332,748)

62,404,527

144,860,958

52,220,325

(1,582,389)

195,498,894

Assets under
construction
Sum

<Last period>
Category

Land

Book Value

(Unit: KRW
000)
Disposal

Acquisition
Cost

Deprecitation

Other Increase
(Decrease)

Ending Book
Value

18,322,287

18,322,287

1,806,596

818,042

(108,385)

389,846

2,906,099

352,780

1,248,020

(64,037)

483,620

2,020,383

Buildings
Nonbuilding
structures
Machines

6,478,718

1,042,835

(265,253)

(789,436)

340,025

6,806,889

Vehicles

24,707

(35)

(15,158)

9,514

Fixtures

927,575

166,615

(998)

(319,570)

119

773,741

86,957,658

28,277,997

(1,213,610)

114,022,045

114,870,321

31,553,509

(266,286)

(1,296,586)

144,860,958

Assets under
construction
Sum

(3) Capitalization of financial expenses.


The factory in Chungbuk Ochang Second Industrial Complex is under construction, andthe
effects of capitalized financial expenses in the financial statement are as follows.
(Unit: KRW
000)
Category

Capitalized borrowing
costs
Capitalization rate

Current
Period

Last Period

8,891,782

6,484,411
7.08%

6.09%

(*) Capitalized financial expenses of development costs during the year are 1,237,009,000
KRW.
(4) At the end of current period, the company has pledged lands, buildings, and structures
as collateral for borrowing agreements with financial institutions (see note 30).
279

13.
(1) .
( : )

27,601,454

27,601,454

27,601,454

27,601,454

1,434,773

(274,234)

1,160,539

1,434,773

(274,234)

1,160,539

1,530,585

(967,967)

562,618

1,275,352

(773,822)

501,530

27,172

(20,288)

6,884

22,188

(18,134)

4,054

16,000

(2,533)

13,467

23,756,176

23,756,176

12,844,860

12,844,860

54,366,160

(1,265,022)

53,101,138

43,178,627

(1,066,190)

42,112,437

(2) .
<>
( : )

27,601,454

1,160,539

501,530

4,054

12,844,860

42,112,437

255,233

4,984

16,000

10,911,316

11,187,533

(194,145)

(2,154)

(2,533)

(198,832)

27,601,454

1,160,539

562,618

6,884

13,467

23,756,176

53,101,138

<>
( : )

27,601,454

1,434,773

529,940

6,285

7,808,937

37,381,389

148,283

5,035,923

5,184,206

(176,693)

(2,231)

(178,924)

(274,234)

(274,234)

27,601,454

1,160,539

501,530

4,054

12,844,860

42,112,437

280

13. Intangible assets


(1) Until the end of the current period and last period, the carrying amounts of intangible
assets are as follows..
(Unit: KRW
000)
Current
Period

Last
Period

Accumulated
Amortization

Category

Acquisition Cost

Book Value

and

Acquisition Cost

Impairment
Goodwill

Accumulated
Amortization

Book Value

and
Impairment

27,601,454

27,601,454

27,601,454

27,601,454

Membership

1,434,773

(274,234)

1,160,539

1,434,773

(274,234)

1,160,539

Software

1,530,585

(967,967)

562,618

1,275,352

(773,822)

501,530

27,172

(20,288)

6,884

22,188

(18,134)

4,054

16,000

(2,533)

13,467

23,756,176

23,756,176

12,844,860

12,844,860

54,366,160

(1,265,022)

53,101,138

43,178,627

(1,066,190)

42,112,437

Intellectual
Property
License
Development
Sum

(2) Changes of intangible assets during the year are as follows.


<Current period>
(Unit: KRW
000)
History
Beginning Book
Value
Acquisition

Goodwill

Membership

Intellectual
Property

Software

License

Development

Sum

27,601,454

1,160,539

501,530

4,054

12,844,860

42,112,437

255,233

4,984

16,000

10,911,316

11,187,533

Amortization

(194,145)

(2,154)

(2,533)

(198,832)

Ending Book
Value

27,601,454

1,160,539

562,618

6,884

13,467

23,756,176

53,101,138

<Last period>
(Unit: KRW 000)
History
Beginning
Book Value
Acquisition

Goodwill

Membership

Intellectual
property

Software

Development

Sum

27,601,454

1,434,773

529,940

6,285

7,808,937

37,381,389

148,283

5,035,923

5,184,206

Amortization

(176,693)

(2,231)

(178,924)

Impairment

(274,234)

(274,234)

Ending Book
Value

27,601,454

1,160,539

501,530

4,054

12,844,860

42,112,437
281

(3) 2009 ()
.
(Cash Generating Unit) .
5
.
.
1) : ( )
.
2) : 2014 5
.
3) :
.
4) : (4.35%) .

.

, .

282

(3) The goodwill occurred during the combination of some important intangible investment by the end
of last period and Hanseo Pharmacy applies to unlimited durable years and is not depreciated but shall
be distributed by the CGU of our company.
The recoverable amount of our CGU was determined by the value in use, which is calculated by using
the estimated cash flows based on the 5 year business plans approved by the management.
Calculation of the value in use was based on the key assumptions below.

1) Cash generating unit: regarding the company, including the affiliated enterprises without ability to
generate cash flow as a cash-generating unit
2) Cash flow: based on past experience and practical business results according to the business plan
covering 5 years from 2014
3) Growth: based on the scale and market share of indevelopment or post-marketing products,
reflects and presumes the expected sales.
4) Discount rate: adopts the weighted average cost of the current capital structure.
The presumption and main assumption of the cash flow is based on the primary judgment of the
managers by the end of the last period. The presumption and assumption could be different from the
actual results. By comparing the use value of book amount of the cash generating unit of the
goodwill and the assumed calcuation it comes out that the book value of the cash generating unit
cannot overweigh the recoverable amount, therefore, the value of the loss can not be confirmed.

283

14.
.
( : )

804,062

826,128

25,355,907

3,080,184

2,662,215

2,469,175

5,956

6,527

28,024,078

5,555,886

28,828,140

6,382,014

15.
(1) .
( : )

<>
4.97%

2,000,000

2,000,000

5.01%

1,738,296

3,000,000

4.83%

4,000,000

4,000,000

4.86%

997,571

2,996,483

()

5.53%

1,000,000

10,231,736

7,369,703

()

19,967,603

19,366,186

()

6.11%

14,285,720

()

6.90%

50,000,000

64,285,720

84,253,323

19,366,186

35,714,280

50,000,000

50,000,000

20,000,000

55,714,280

100,000,000

11,373,580

<>

()

6.11%

()

5.33%

1.50%

9,445,592

()

1.50%

19,240,894

54,196,903

28,686,486

65,570,483

84,400,766

165,570,483

284

14. Payables and other liabilities.


Until the end of this and the previous accounting period, the amount of payables and other
liabilities are as follows.
(Unit: KRW
000)
Category

Current
period

Trade Payables

Last
period

804,062

826,128

Other Payables
Account Payables

25,355,907

3,080,184

2,662,215

2,469,175

5,956

6,527

Sub-total

28,024,078

5,555,886

Sum

28,828,140

6,382,014

Current Accured Expenses


Deposits

15. Long-term and short-term liability.


(1) Until the end of this and the previous accounting period, the details of liabilities are as
follows.
(Unit: KRW
000)
Category

Histo
ry

Borrow
ers

Interest
rate

Current
Period

Last
Period

<Current Liabilities>
Woori Bank
Working Capital

SME Bank

Short-term
liabilities

Kookmin Bank
Discounted Bills And
Others

SME Bank

4.97%

2,000,000

2,000,000

5.01%

1,738,296

3,000,000

4.83%

4,000,000

4,000,000

4.86%

997,571

2,996,483

5.53%

1,000,000

10,231,736

7,369,703

Sub-total
Part of longterm liabilities

Equipment Funds
Working Capital

19,967,603

19,366,186

National Bank

6.11%

14,285,720

Celltrion

6.90%

50,000,000

Sub-total
Sum

64,285,720

84,253,323

19,366,186

35,714,280

50,000,000

50,000,000

20,000,000

55,714,280

100,000,000

11,373,580

<Non-current Liabilities>

Long-Term
Liabilities

Equipment Funds

Woori Bank

6.11%

Working capital

Celltrion

Korea
Bank

Working capital

Development

5.33%

Sub-total
Neptune
Limited company

Convertible Bonds
Corporation
Bonds

Convertible Bonds

Korea
Development
Bank

1.50%

9,445,592

Bonds with Warrants

Celltrion

1.50%

19,240,894

54,196,903

Sub-total
Sum

28,686,486

65,570,483

84,400,766

165,570,483

285

(, , )
( 12,29,30 ).
(2)
1) .
( : )

3
2010-08-17
(*)
4 2014-04-18

(%)

(%)

2015-08-16

2019-04-18

1.50

5.90

9,000,000

10,000,000 -

2,456,925

3,831,648

(3,011,333)

(1,458,068)

9,445,592

11,373,580

(*) 3 .
2) 4 .

100%

1 ~

12,460

286

The real estate (property, plant and equipment) and representative directors payments are
collateral of the lending agreements signed between our company and the financial
institutions. (See note 12, 29, 30)
(2) Convertible Corporate Bonds
1) Until the end of this and the previous accounting period, the details of convertible
corporate bonds are as follows.
(Unit: KRW
000)

Category

Issued Date

3rd unsecure convertible


2010-08-17
corporate bonds (*)
th
4 unsecure convertible
2014-04-18
corporate bonds

Expiration
Date

Coupon
Rate (%)

Guaranteed
Interest
Rate (%)

2015-08-16

2019-04-18

1.50

5.90

Add: redemption premium


Less: conversion right adjustment

Net of Write-off

The End of Current


Period

The End of Last


Period

9,000,000
10,000,000 2,456,925

3,831,648

(3,011,333)

(1,458,068)

9,445,592

11,373,580

(*)The Group made an early repayment of unsecured convertible bonds for the third time in
this accounting period.
2) The issue conditions of registered unsecured convertible corporate bonds the fourth time of
this accounting period are as follows.
Category

Contents

Issue price

100% face value of corporation bonds

Issue shares

Registered common shares

Repayment method

Redemption at maturity

Excercise period for


conversion right

1 year after issued ~ the date of maturity

Conversion price

KRW 12,460

287

(3)
1) .
( : )

(%)

(%)

2013-12-19

2018-12-18

1.50

5.90

20,000,000

60,000,000

4,913,851

14,741,554

(5,672,958)

(20,544,651)

19,240,893

54,196,903

2) .

100%

1 ~

8,900

288

(3) Bonds with warrant


1) Until the end of this and the previous accounting period, the details of Bonds with warrant
are as follows.

(Unit:
000)

Category

Issued Date

Expiration
Date

KRW

Coupon
Rate (%)

Guaranteed
Interest
Rate (%)

The End of
Current Period

The End of Last


Period

1st unsecure
convertible corporate
bonds

2013-12-19

2018-12-18

1.50

5.90

Add redemption premium

Less: conversion right adjustment


Net of Write-off

20,000,000

60,000,000

4,913,851

14,741,554

(5,672,958)

(20,544,651)

19,240,893

54,196,903

2) The issue conditions of bond with warrants of this accounting period are as follows.
Contents

Category
ssue price

100% face value of corporation bonds

Issue shares

Registered common shares

Repayment method

Redemption at maturity

Exercise period for


conversion right

1 year after issued ~ the date of maturity

289

16.
.
( : )

40,709

54,246

558,577

451,718

599,286

505,964

17.
,
.
( : )

693,793

651,451

263,556

304,867

85,424

87,518

348,980

392,385

315,300

285,006

29,394

65,037

344,694

350,043

698,079

693,793

290

16. Other current liabilities.


Until the end of this and the previous accounting period, the details of other current liabilities
are as follows.
(Unit: KRW 000)

Category

The end of current period

Advances received
Unpaid tax
Sum

The end of last period

40,709

54,246

558,577

451,718

599,286

505,964

17. Provisions
In case of returned goods, the company sets a provision for liabilities. During this and the
previous accounting period, the changes of the provision are as follows.
(Unit:KRW 000)
Category

Current period

Base
Value
Estimated Gross Profit
Increase

Estimated Disposal Loss


Sum
Actual Gross Profit

Decrease

Actual Disposal Loss


Sum
Ending
Value

Last period

693,793

651,451

263,556

304,867

85,424

87,518

348,980

392,385

315,300

285,006

29,394

65,037

344,694

350,043

698,079

693,793

291

18.
, 1
1
.
.
( : )

53,877

250,022

173,836

143,141

892,436

734,164

43,900

38,572

346,329

351,776

123,002

104,769

1,579,503

1,372,422

(1,564,441)

(1,539,534)

(29,033)

68,939

53,877

19.
(1) .
( : )

80,000,000

80,000,000

500

500

18,889,760

14,395,378

9,444,880,000

7,197,689,000

292

18. Retirement benefits liabilities.


The company has defined a Contribution Retirement Pension for employees. The related
pensions of employees who work more than a year are considered as part of the company
pension. The related pensions of employees who work less than a year are considered as
retirement benefits liabilities.
The changes of retirement benefits liabilities before the end of current period and the end of
last period are as follows.
(Unit:KRW 000)
Category

Current period

Base Value

Last period

53,877

250,022

173,836

143,141

892,436

734,164

43,900

38,572

Construction In Process

346,329

351,776

R&D Costs

123,002

104,769

1,579,503

1,372,422

Pension Payments

(1,564,441)

(1,539,534)

Retiree Payments

(29,033)

68,939

53,877

Manufacturing Costs
Current Service
Costs

Selling and Administrative


Expenses
Ordinary R&D Costs

Sub-total

Ending Balance

19. Paid-in capital


(1) The details of capital items before the end of current period and the end of last period are
as follows.
(Unit: KRW 000)

Category
The Total Number of Shares to
Be Issued
Par Value per Share
Issued Shares
Common Stock

Current period

Last period

80,000,000 shares

80,000,000
shares

500

500

18,889,760
h
9,444,880,000

14,395,378
h
7,197,689,000

293

(2) .
( : , )

2013-01-01

14,138,617

7,069,309

129,565,228

2013-07-03

85,587

42,793

1,172,092

2013-07-31

85,587

42,793

1,178,730

2013-08-06

85,587

42,794

1,180,075

2013-12-31

14,395,378

7,197,689

133,096,125

2014-01-01

14,395,378

7,197,689

133,096,125

2014-12-23

4,494,382

2,247,191

40,111,848

2014-12-31

18,889,760

9,444,880

173,207,973

20.
(1) .
( : )

(*)

(13,670)

(13,670)

3,955,386

3,955,386

1,972,044

1,867,410

426,554

426,554

()

(37,224)

(37,224)

1,538,643

4,615,928

747,323

8,589,056

10,814,384

(*) 1,311 2009 8 5 .

294

(2) The details of paid-in capital before the end of current period and the end of last period
are as follows.
(Unit: shares, KRW 000)
Category

Date

Outstanding
Shares

Capital

Share Premium

Last period
Beginning of Previous
Period
Exercise of Conversion
Rights

2013-01-01

14,138,617

7,069,309

129,565,228

2013-07-03

85,587

42,793

1,172,092

2013-07-31

85,587

42,793

1,178,730

2013-08-06

85,587

42,794

1,180,075

2013-12-31

14,395,378

7,197,689

133,096,125

Current Period

2014-01-01

14,395,378

7,197,689

133,096,125

Use of Preemptive Rights

2014-12-23

4,494,382

2,247,191

40,111,848

End of Current Period

2014-12-31

18,889,760

9,444,880

173,207,973

Exercise of Conversion
Rights
Exercise of Conversion
Rights
End of Previous Period
Current Period

20. Other capital


(1) The details of other capital before the end of current period and the end of last period are
as follows.
(Unit: KRW 000)

Category
Treasury Stock (*)

Current period

Last period
(13,670)

(13,670)

Gain on Disposal of Treasury Stock

3,955,386

3,955,386

Stock Options

1,972,044

1,867,410

426,554

426,554

(37,224)

(37,224)

1,538,643

4,615,928

747,323

8,589,056

10,814,384

Equity Method Investments


Available-for Sale Securities
Valuation Gains (Losses)
Warrants Consideration
Conversion Rights
Sum

(*)Treasury Stock is obtained in the form of sporadic shares in merger in August 5, 2009.

295

(2)
1)


.

1 (*)

2008 3 25 2010 03 22 2011 03


25

2012 03
22

2013 03
25

2014 3 28

2010 3
2012 3
2013 3
2014 3
2015 3
2016 3
25 ~2015 3 22 ~2020 3 25 ~2023 3 22 ~2024 3 25 ~2025 3 28 ~2026 3
24
21
24
21
24
27
5,671

11,185

16,933

19,139

17,350

11,437

(*) 2009 ()
.
2)
.
( : , )

3,034

1,800

304,000

28,500

23,500

360,834

17,011

17,000

17,000

11,437

(2,500)

(6,000)

(7,000)

(15,500)

14,968

3,034

1,800

304,000

26,000

17,500

10,000

362,334

16,837

3) .

( Black Scholes Model)

12,100

11,400

17,000

18,400

16,100

11,100

5,671

11,185

16,933

19,139

17,350

11,437

2.38%

3.23%

3.57%

3.59%

2.58%

2.76%

0.64

58.50%

45.77%
-

6,590

2
52.98%
-

3,259

2
52.69%
-

5,428

2
63.38%
-

5,559

2
81.87%
-

5,447

4,937

296

(2) Share-based compensation.


1) Share-based payment.
The company will use the special vote of the shareholders' meeting or Council Resolution to
give share-based payment to staff contributing to the foundation,domestic or overseas
operation, and technological innovation of the company
1st (*)

Category
Grant date

March 25, 2008

Payment
Methods
Event Period

3rd
March 22, 2010

Equity-Settled

Issue of New
Shares
March 25,2013 ~
March 24,2023

March 22, 2012 ~


March 21,2012

KRW 5,671

5th

March 25, 2011

Equity-Settled

March 25,2010~
March 24, 2015

Exercise Price

4th

KRW 11,185

6th

March 22, 2012

March 25, 2013

Issue of New
Shares

March 28, 2014

Issue of New
Shares
March 25, 2015 ~
March 24, 2025

March 22, 2014 ~


March 21, 2024

KRW 16,933

7th

KRW 19,139

Issue of New
Shares
March 28, 2016 ~
March 27, 2026

KRW 17,350

KRW 11,437

2 years after grant date

Event Possible
Conditions

(*)In the merger in 2009, the conditions of stock options the incorporated company once paid to
employees did not change, the staff could inherit directly.

2) After the rights conferred day, the change details of the amount of exercisable stock
options and weighted pre-buy price are as follows.
(Unit: shares,
KRW 000)
Category

Weighted
Average
Exercise
Price

Quantity
First

Base Value

Third

Fifth

Sixth

Seventh

Total

3,034

1,800

304,000

28,500

23,500

360,834

17,011

17,000

17,000

11,437

(2,500)

(6,000)

(7,000)

(15,500)

14,968

3,034

1,800

304,000

26,000

17,500

10,000

362,334

16,837

Grant
Cancellation /
Extinction
Exercise
Ending Balance

Fourth

3) The way and hypothesis of calculating fair value of stock options are as follows
Category

First

Third

Fourth

Fifth

Sixth

Seventh

The Fair Value Approach

Calculation Method

(Black Scholes Model of option pricing model )

Share Price on
Entitlement Day

KRW 12,100

KRW 11,400

KRW 17,000

KRW 18,400

KRW 16,100

KRW 11,100

Exercise Price

KRW 5,671

KRW 11,185

KRW 16,933

KRW 19,139

KRW 17,350

KRW 11,437

Risk-Free Interest
Rate
Expected Exercise
Period
Expected Volatility
Expected Dividend
Yield
Fair Value

2.38%

3.23%

3.57%

3.59%

2 years

2 years

2 years

58.50%

45.77%

52.98%

52.69%

63.38%

0.64years

KRW 6,590

KRW 3,259

KRW 5,428

KRW 5,559

2.58%
2 years

KRW 5,447

2.76%
2 years
81.87%
KRW 4,937
297

4) .
( : )

350,175

38,353

388,528

2,016,235

442,425

483,814

104,627

3,047,101

37,541

19,960

21,799

25,333

104,633

13,578

22,981

1,895

3,162

41,616

2,417,529

523,719

507,508

133,122

3,581,878

21.
(1) .
( : )

80,155

80,155

22,496,883

16,227,135

22,577,038

16,307,290

(2)
50%
10% .
,
.

298

4) The details of compensation costs recognized as expenses which are related to stockbased compensation are as follows.
(Unit: KRW 000)
Category
Succession of Stock Options

Selling and
Manufacturing
Administrative
Costs
Expenses

Construction
in Process

R&D Costs

Total

350,175

38,353

388,528

2,016,235

442,425

483,814

104,627

3,047,101

37,541

19,960

21,799

25,333

104,633

Compensation Cost to Be
Recognized

13,578

22,981

1,895

3,162

41,616

Total Compensation Cost

2,417,529

523,719

507,508

133,122

3,581,878

Recognized Compensation
Costs
Compensation Costs

21. Retained earnings.


(1) The details of retained earnings before the end of current period and the end of last period
are as follows.
(Unit: KRW 000)

Category
Legal Reserve
Retained Earnings
Sum

The End of Current


Period

The End of Last


Period
80,155

80,155

22,496,883

16,227,135

22,577,038

16,307,290

(2)Legal reserves.
In accordance with the provisions of the Commercial Law, the company must withdraw any legal surplus which
equals 10% of annual profit before the legal surplus, up to 50% of the paidup capital. The Legal Surplus
reserve cannot be distributed by cash, but can offset losses or transfer to capital based on resolutions of
shareholders meetings.

299

(3)
( : )

: 2015 3 26

: 2014 3 24

I.

22,496,883
16,227,135

13,584,506

6,269,748

2,642,629

II.

16,227,135

(472,216)

(472,216)

(472,216)

(() : 25 (5%)
: -(-%))
III.

22,024,667

16,227,135

300

(3) Statement of profit distribution


(Unit:KRW
000)
Current Period
Category

Disposal Date: March 26, 2015

I. Retained earnings before


appropriation
Retained earnings carried over from
prior period
Net Income

Scheduling Verifications Disposal:


March 24, 2014

22,496,883

16,227,135

16,227,135

13,584,506

6,269,748

2,642,629

II. Appropriated retained earnings


Dividends

Last Period

(472,216)

(472,216)

(472,216)

Category
(Dividend per share (rate))
Current period: KRW 25 (5%)
Last period: -KRW (- %)
III.
Retained earnings at the end of the
period

22,024,667

16,227,135

301

22.
.
( : )

8,385,018

8,029,918

892,436

734,164

1,669,630

1,538,498

60,736

28,884

767,870

641,456

57,857

59,446

108,761

124,039

748,510

714,062

1,232,330

1,346,041

5,598

5,257

59,785

86,237

275,286

86,250

8,232,342

1,222,789

1,487,586

701,485

858,919

852,074

3,709

3,103

34,041

29,062

7,537

19,160

89,584

23,731

169,065

165,931

302

22. Sales expense and management costs.


The details of sales expense and management costs before the end of the current period and
the end of the last period are as follows.

Category
Salary

(Unit:KRW 000)
Current period

Last period

8,385,018

8,029,918

892,436

734,164

1,669,630

1,538,498

60,736

28,884

Entertainment

767,870

641,456

Consumables

57,857

59,446

Communication Costs

108,761

124,039

Tax and Dues

748,510

714,062

1,232,330

1,346,041

Water Utilities

5,598

5,257

Book Printing

59,785

86,237

Transportation Costs

275,286

86,250

Advertising Expenses

8,232,342

1,222,789

Fees

1,487,586

701,485

Rent

858,919

852,074

3,709

3,103

34,041

29,062

7,537

19,160

89,584

23,731

169,065

165,931

Retirement Benefits
Employee Benefits
Vehicle Maintenance

Travel Transportation

Repairs
Premium
Power Ratio
Samples Expense
Depreciation

303

725,354

1,518,951

196,573

176,646

6,401,415

6,515,965

48,176

160,662

192,093

172,733

177,777

381,005

269,997

272,779

82,722

189,211

33,240,707

25,799,539

304

Bad Debt Expenses

725,354

1,518,951

Export Costs

196,573

176,646

6,401,415

6,515,965

48,176

160,662

Amortization of Intangible Fixed


Assets
Conference Expenses

192,093

172,733

177,777

381,005

Building Expenses

269,997

272,779

82,722

189,211

33,240,707

25,799,539

Sales Commission
Education Costs

Others
Sum

307

23.
( ,
) .
( : )

1,247,558

1,444,616

4,425,752

4,027,893

7,054,953

2,469,717

13,983,177

12,510,022

(*2)

8,410,456

8,513,646

8,232,342

1,222,789

6,533,945

3,845,114

1,722,461

914,346

930,596

903,115

994,855

875,266

1,014,058

882,259

788,367

1,441,930

611,041

3,575,612

55,949,561

42,626,325

(*1)

(*1) .
( : )

10,986,409

9,746,114

1,066,272

877,305

1,872,994

1,715,314

57,502

171,289

13,983,177

12,510,022

(*2) , .

308

23. Operating expenses classified by nature.


The details of operating expenses (the sum of sales expense, management costs and ordinary
development expenses in the Comprehensive Income Statement) classified by nature before
the end of current period and the end of last period are as follows.
(Unit: KRW 000)
Category

Current Period

Last Period

Semi-finished products and Changes

1,247,558

1,444,616

Raw materials

4,425,752

4,027,893

Fluctuations in Commodity

7,054,953

2,469,717

Employee Benefits (*1)

13,983,177

12,510,022

Sales-related Costs (*2)

8,410,456

8,513,646

Advertising Expenses

8,232,342

1,222,789

Outsourced Processing Costs

6,533,945

3,845,114

Fees

1,722,461

914,346

Rent Payments

930,596

903,115

Tax and Dues

994,855

875,266

1,014,058

882,259

Research and Development

788,367

1,441,930

Other Costs

611,041

3,575,612

55,949,561

42,626,325

Depreciation and Amortization

Total Operating Expenses


(*1) The details of employees wages are as follows.

(Unit: KRW 000)


Category
Salary

Current Period

Last Period

10,986,409

9,746,114

Retirement Benefits

1,066,272

877,305

Employee Benefits

1,872,994

1,715,314

57,502

171,289

13,983,177

12,510,022

Stock-based Compensation Costs


Sum

(*2) Sales-related costs, including travel expenses, entertainment expenses, and sales charges.

309

24.
(1) .
( : )

389,941

355,419

20,198

2,195

5,735

824,159

372,872

783,011

1,187,508

(2) .
( : )

3,075,760

1,443,520

2,314

79,462

3,339

3,459,815

500,000

3,655,222

4,908,988

310

24. Finance income and finance costs


(1) The details of finance income during the current period and the last period are as follows.
(Unit: KRW 000)
Category

Current Period

Last Period

Interest Income

389,941

355,419

Foreign Currency Translation


Gains

20,198

2,195

Gain on Disposal of Short-term


Financial Instruments

5,735

Gain on Disposal of Available-forsale Securities

824,159

372,872

783,011

1,187,508

Reversal of Impairment Losses


on Available-for-sale securities
Sum

(2) The details of finance expenses during the current period and the last period are as follows.
(Unit: KRW 000)
Category
Interest Expense
Loss On Foreign Currency
Transactions
Foreign Currency Translation
Loss
Loss On Disposal Of Trading
Securities
Loss On Disposal Of AvailableFor-Sale Securities
Sum

Current Period

Last Period
3,075,760

1,443,520

2,314

79,462

3,339

3,459,815

500,000

3,655,222

4,908,988

311

25.
(1) .
( : )

256,449

260,421

126,478

108,571

109,230

154,157

1,050

4,953

26,910

43,746

520,117

571,848

(2) .
( : )

48,445

30,681

21,216

45,122

147,230

274,234

3,740

224,729

17,400

49,900

2,818

2,734

113,785

754,464

312

25. Other income and other expenses.


(1) Other income details of the current and the previous periods are as follows.
(Unit: KRW 000)
Category

Current Period

Last Period

Rental Income

256,449

260,421

Currency Arbitrage

126,478

108,571

109,230

154,157

1,050

4,953

26,910

43,746

520,117

571,848

Foreign Currency
Translation Gains
Gain On Disposal Of Tangible
Assets
Job Gains
Sum

(2) Details of other expenses in the current and the previous periods are as follows.
(Unit: KRW 000)
Category

Current Period

Last Period

Loss
On
Foreign
CurrencyTransactions
Foreign Currency Translation
Loss

48,445

30,681

21,216

Other Bad Debt Expenses

45,122

Loss On Disposal Of Tangible


Assets

147,230

Impairment Of Intangible Assets

274,234

Loss On Disposal Of Inventories

3,740

Loss On Disposal Of Inventory

224,729

17,400

49,900

2,818

2,734

113,785

754,464

Donations
Other Losses
Sum

313

26.
(1) .
( : )

1,033,128

637,619

(2,062,340)

1,574,508

657,169

(1,301,929)

395,209

23,166

910,198

(2) .
( : )

(867,952)

1,301,929

210,783

(657,169)

1,301,929

(3) .
( : )

6,292,914

3,552,827

1,384,441

781,622

53,384

1,498,277

(1,227,328)

(1,292,306)

395,209

(582,540)

(77,395)

23,166

910,198

0.37%

25.62%

()

( )

314

26. Income tax expense


(1) Details of income tax expense for current and previous terms are as follows.
(Unit: KRW 000)
Category

Current Period

Income tax
Movements in deferred taxes due to
temporary differences
Income tax expense reflected directly in
equity

Last Period
1,033,128

637,619

(2,062,340)

1,574,508

657,169

(1,301,929)

395,209

23,166

910,198

Corporate tax
Income tax expense

(2) The details of income tax expense reflected in the capital during the current period and the last
period are as follows.
(Unit: KRW 000)
Category

Current Period

Last Period

Warrants consideration

(867,952)

1,301,929

Conversion Right Price

210,783

(657,169)

1,301,929

Sum

(3) The relationship between income before income tax during the year and electricity costs
or loss and income tax expense are as follows.
(Unit: KRW 000)
Category

Current Period

Last Period

Income before income taxes

6,292,914

3,552,827

In accordance with the applicable tax rate

1,384,441

781,622

53,384

1,498,277

(1,227,328)

(1,292,306)

395,209

(582,540)

(77,395)

Income tax expense

23,166

910,198

The effective tax rate

0.37%

25.62%

Adjustments
Unauthorized expenses (nontaxable income)
Tax credits and tax reduction
Corporate tax
Others (rate difference, etc.)

315

(4) () .
<>
( : )

693,793

4,287

698,080

7,394,559

451,420

7,845,979

642,660

642,660

1,500,000

2,370,650

(1,490,924)

2,379,726

348,776

176,132

524,908

53,878

15,061

68,939

70,092

(16,244)

53,848

1,711

(1,711)

(1,711)

1,711

4,114,241

(372,872)

3,741,369

47,723

47,723

274,234

(1)

274,233

14,741,554

(9,827,703)

4,913,851

3,831,647

(1,374,722)

2,456,925

(108,135)

(321,083)

(429,218)

(426,554)

(426,554)

(575,879)

(46,239)

(622,118)

(222,973)

(222,973)

(84,025)

84,025

(20,544,651)

14,871,694

(5,672,957)

(5,917,857)

5,917,857

(1,458,068)

(1,553,266)

(3,011,334)

4,158,913

2,586,755

599,571

5,917,857

13,263,096

2,412,874

59,421

2,472,295

3,327,835

569,086

191,327

1,301,928

5,390,176


. ,

.

316

(4) The source and change details of deferred tax assets (liabilities) during the current period and the
last period are as follows.
<The current period>
(Unit: KRW 000)
Category

Balance at
beginning of year

Adjustment
based on
differences

Losses

Capital

Balance at
end of year

Temporary Differences
Return Reserves

693,793

4,287

698,080

7,394,559

451,420

7,845,979

642,660

642,660

1,500,000

2,370,650

(1,490,924)

2,379,726

348,776

176,132

524,908

Retirement Benefit Liabilities

53,878

15,061

68,939

Losses On Valuation

70,092

(16,244)

53,848

Government Grants

1,711

(1,711)

(1,711)

1,711

4,114,241

(372,872)

3,741,369

47,723

47,723

274,234

(1)

274,233

14,741,554

(9,827,703)

4,913,851

Bond Repayment Premium

3,831,647

(1,374,722)

2,456,925

Accrued Income

(108,135)

(321,083)

(429,218)

Equity Method Investments

(426,554)

(426,554)

Stock-Based Compensation
Costs

(575,879)

(46,239)

(622,118)

Impairment Of Land

Allowance For Doubtful


Accounts
Investment Securities
Impairment On Equity
Method
Loss On Valuation Of Equity
Method
Accrued Expenses

Government Subsidies
Temporarily Amortization
Dishonored Bill
Impairment Losses On
Available-For-Sale Securities
Loss On Valuation Of
Available-For-Sale Securities
Impairment Of Intangible
Assets
Repayment Premiums

(222,973)

(222,973)

Temporary Depreciation
Allowance

(84,025)

84,025

Adjustment Of Warrants

(20,544,651)

14,871,694

(5,672,957)

Warrants Consideration

(5,917,857)

5,917,857

Adjust Conversion Rights

(1,458,068)

(1,553,266)

(3,011,334)

4,158,913

2,586,755

599,571

5,917,857

13,263,096

2,412,874

59,421

2,472,295

3,327,835

569,086

191,327

1,301,928

5,390,176

The Total Temporary


Differences
The Unused Rental
Deduction Carried Forward
Deferred Tax Assets /
Liabilities

After consideration, the company forecasts that it is able to obtain enough income to deduct deferred tax assets
from the next year. However, if there is not enough income according to the status of investment assets
subsidiary companies, the company cannot recognize deferred tax assets.

317

<>
( : )

(78,125)

(30,010)

(108,135)

651,451

42,342

693,793

6,030,998

68,086

1,295,475

7,394,559

(391,570)

391,570

1,500,000

1,500,000

313,297

35,479

348,776

250,023

(196,145)

53,878

161,979

(91,887)

70,092

120,431

(118,720)

1,711

(4,645)

2,933

(1,711)

5,108,863

(1,277,216)

3,831,647

(3,043,435)

1,585,367

(1,458,068)

(398,178)

(81,729)

(95,972)

(575,879)

(222,973)

(222,973)

(228,070)

144,045

(84,025)

4,819,025

(704,784)

4,114,241

47,723

47,723

274,234

274,234

(20,544,651)

(20,544,651)

14,741,554

14,741,554

(5,917,857)

(5,917,857)

14,636,798

(13,643)

(4,546,386)

(5,917,857)

4,158,913

1,682,247

85,742

644,885

2,412,874

4,902,343

82,741

(355,320)

(1,301,929)

3,327,835

(5) () .
( : )

1,490,924

2,586,757

(27,601,453)

(27,601,453)

(26,110,529)

(25,014,696)

318

<The last period>


(Unit: KRW 000)
Category

Balance At
Beginning Of Year

Adjustment
Based On
Difference

Losses

Capital

Balance At
End Of Year

Temporary Differences
Accrued Income

(78,125)

(30,010)

(108,135)

651,451

42,342

693,793

6,030,998

68,086

1,295,475

7,394,559

Trading Securities Gains

(391,570)

391,570

Equity Method Loss

1,500,000

1,500,000

Accrued Expenses

313,297

35,479

348,776

Retirement Benefit Liabilities

250,023

(196,145)

53,878

Loss On Valuation

161,979

(91,887)

70,092

Government Grants

120,431

(118,720)

1,711

(4,645)

2,933

(1,711)

5,108,863

(1,277,216)

3,831,647

(3,043,435)

1,585,367

(1,458,068)

(398,178)

(81,729)

(95,972)

(575,879)

(222,973)

(222,973)

(228,070)

144,045

(84,025)

4,819,025

(704,784)

4,114,241

47,723

47,723

274,234

274,234

Adjustment Of Warrants

(20,544,651)

(20,544,651)

Repayment Premiums

14,741,554

14,741,554

Warrants Consideration

(5,917,857)

(5,917,857)

14,636,798

(13,643)

(4,546,386)

(5,917,857)

4,158,913

1,682,247

85,742

644,885

2,412,874

4,902,343

82,741

(355,320)

(1,301,929)

3,327,835

Return Reserves
Allowance
Accounts

For

Government
Temporarily

Doubtful

Subsidies

Dishonored Bill
Bond Repayment Premium
Adjust Conversion Rights
Stock-Based
Costs

Compensation

Impairment Of Land
Temporary
Depreciation
Allowance
Impairment
Losses
On
Available-For-Sale Securities
Loss On Valuation Of
Available-For-Sale Securities
Impairment Of Intangible
Assets

The Total Temporary


Differences
The Unused Rental
Deduction Carried Forward
F

Deferred Tax Assets /
Liabilities

(5) Temporary differences that cannot be recognized as deferred tax assets (liabilities) in the current
period and the last period are as follows.
(Unit: KRW 000)
Category
Subsidiaries
Goodwill
Sum

The end of current period

The end of last period

1,490,924

2,586,757

(27,601,453)

(27,601,453)

(26,110,529)

(25,014,696)
319

27.
(1) .
( : , )

(1)
(2) (*)

6,269,748,108

2,642,628,514

14,505,067

14,250,977

432

185

(1 2)

(*)
( : )

(1)

14,395,378

14,252,108

(2)

(1,131)

(1,131)

110,820

14,505,067

14,250,977

(3)
(1 + 2 + 3)

(2)
.
( : )

2,247,191

5,633,802

802,568

10,096

1,436

2,139

3,051,195

5,646,037

320

27. Earnings per share


(1)The basic earnings per share for the current and the last accounting period are as follows.
(Unit: KRW, share)
Category

Current Period

Net income shares (1)

Last Period

6,269,748,108

2,642,628,514

14,505,067

14,250,977

432

185

The weighted average number of


common shares outstanding (2) (*)
Basic earnings per share (1 2)
(*)Weighted average number of outstanding common share.

(Unit: shares)
Category

Current period

Last period

The weighted average number of trading


shares (1)

14,395,378

14,252,108

Weighted average number of treasury


shares(2)

(1,131)

(1,131)

110,820

14,505,067

14,250,977

Rights issue of shares (3)


The weighted average number of common
trading shares (1 + 2 + 3)

(2) Dilutive Potential Common stock


Until the end of the current and the last accounting period, the details of dilutive potential common
stock are as follows.
(Unit: shares)
Category
Warrants
Conversion Right
Stock Options
Sum

Current period

Last period
2,247,191

5,633,802

802,568

10,096

1,436

2,139

3,051,195

5,646,037

Preemptive right and stock options did not cause a dilutive effect during the current accounting period.
Therefore they are not taken into account in the weighted average number of issued common shares
when calculating the diluted earnings per share.

321

(3)
.
( : )

6,269,748,108

2,890,611,334

15,307,635

19,886,918

410

145

()(*)

(*) ()
( : )

(1)
(2)
(3)
(4)
(1 + 2 + 3 + 4)

14,505,067

14,250,977

5,633,802

802,568

2,139

15,307,635

19,886,918

322

(3) Diluted earnings per share


The details of diluted earnings per share during the current and the last accounting period are as follows.

(Unit: shares)
Category

Current period

Net income after adjustments


Weighted average number of
trading shares (diluted)*

Last period

6,269,748,108

2,890,611,334

15,307,635

19,886,918

410

145

Diluted earnings per share


(*) The weighted average number of common trading shares (diluted)

(Unit: shares)
Category
The weighted average number of Common
stocks distribution (1)
Warrants (2)
Conversion rights (3)
Stock options (4)
The weighted average number of common
shares outstanding (1 + 2 + 3 + 4)

Current period

Last period
14,505,067

14,250,977

5,633,802

802,568

2,139

15,307,635

19,886,918

323

28.
.
( : )

1.

6,269,748

2,642,629

1,110,172

915,877

57,502

172,830

3,459,815

500,000

821,597

709,379

725,354

1,518,951

192,461

172,880

45,121

(49,966)

22,360

(372,872)

(5,735)

(154,157)

(1,050)

(4,953)

2.

324

28. Statement of Cash Flow.


The details of the cash flow statement during the current and the last accounting period are as
follows.
(Unit: KRW
000)

Accounting subject
1. Net Income
2. Adjustment Items
Retirement Benefits
Stock-based compensation costs
Loss on disposal of financial assets held for trading
Loss on disposal of available-for-sale financial
assets trading

Current
Period
6,269,748

Last Current
2,642,6
29
1,110,172
57,502
-

915,877
172,830
3,459,8
15

500,000

821,597
725,354
192,461

709,379
1,518,9
172,880

45,121

(49,966)

22,360

(372,872)

Gain on disposal of short-term financial instruments

(5,735)

Reversal of allowance for doubtful accounts of


other

(154,15
7)

(1,050)

(4,953)

Depreciation expense
Bad debt expenses

Amortization
Other bad debt expenses
Foreign currency translation

Reversal of impairment losses on available-forsale securities

Gain on disposal of tangible assets

325

147,230

274,234

(824,159)

19

(389,941)

(355,419)

3,075,760

1,443,520

23,166

910,199

5,737,304

8,310,984

()

(5,305,237)

(6,339,776)

()

(95,410)

(20,631)

26,211

(1,838,436)

(541,694)

()

119,237

(176,954)

()

4,203,787

4,334,664

()

5,000,000

()

(22,066)

(60,782,160)

()

5,746,131

(17,205,767)

244,504

5,124,765

(571)

(20,380)

35,479

(13,537)

(37,680)

(1,564,442)

(1,568,568)

()

4,287

42,342

6,553,026

(77,204,928)

18,560,078

(66,251,315)


3.

()
()

()
()
()
()

4. (1+2+3)

326

Loss on disposal of tangible assets

147,230

Impairment of intangible assets

274,234

Gain on disposal of available-for-sale financial


assets

(824,159)

Miscellaneous profit

19

Interest income

(389,941)

(355,419)

Interest expense

3,075,760

1,443,520

23,166

910,199

5,737,304

8,310,984

(5,305,237)
-

(6,339,77
6)
(95,410)

(20,631)

26,211

(1,838,436)

(541,69
4)
(176,95
4)
4,334,6
64
-

Income tax expense


Sub-total

3.

Changes in assets and liabilities in operating activities

Decrease in trade receivables (Increase)

Reduction of the bankruptcy bill (increase or


decrease)
Accounts receivable decrease (increase)

Decrease in prepayments (Increase)


Decrease in prepaid expenses (increased)

119,237

Decrease in inventories (Increase)

4,203,787

Long-term prepayments increased (decreased)

5,000,000

Increase in trade payables (Decrease)


Increase in accounts payable (Decrease)
Decrease of value added of tax refundables

Deposits increased (decreased)


An increase in accrued expenses (Decrease)
Increase in advance payments (decrease)
Pension payments
Return liabilities increase (decrease)

(22,066)
5,746,131
244,504

Sub-total

(571)
(13,537)
(1,564,442)
4,287
6,553,026

4. The sum (1 + 2 + 3)

18,560,078

(60,782,16
0)
(17,205,76
7)
5,124,7
65
(20,380)
35,479
(37,680)
(1,568,56
42,342
(77,204,92
8)
(66,251,31
5)

327

(2)
.
( : )

8,891,782

1,237,009
16,465,081

29.
(1) .

()

(), Celltrion Pharma USA, Inc

(2) .
( : )

171,241

867

7,978,280

173,614

2,441,001

199,720

85,208

86,807

()

909

()

36,100

256,449

867

7,978,280

37,009

260,421

2,441,001

199,720

()
()

()

() , ()
.
6,187 1,923 .

328

(2) Non-cash transaction


The details of important non-cash inflow and outflow are as follows.

(Unit: KRW
000)
Trading Content

Amount

Capitalization of interest costs in assets under


construction
I

Tangible
changes

assets

di d

acquisition-related

8,891,782

payables

16,465,081

29. Related party transaction


(1) Until the end of the current accounting period, the details of the Companys subsidiary companies are as
follows.
Relation
Compa
ny
Name

Parent Company

Celltrion

Subsidiaries

Celltrion Chemical Laboratory, Celltrion Pharm USA, Inc

(2) During the current and the last accounting period, the details of translations between the related parties are
as follows:

(Unit: KRW 000)


Current period
Profit

Special

p Category

Rent
Income

Celltrion

Profit

Expense

Interest Commissions
Rent
expense
, etc.
Income

sales

Interest Commissions,
expense
etc.

171,241

867

7,978,280

173,614

2,441,001

199,720

85,208

86,807

Hanskin

909

Dreamenm

36,100

256,449

867

7,978,280

37,009

260,421

2,441,001

199,720

Celltrion
Subsidiary Chemical
Laboratory
Celltrion
Healthcare
Others

Expense

Related
Party

Relationshi

Parent
Company

Last period

Sum

(Note) According to the commissioned research services contract signed by the Company and the Celltrion
Chemical Laboratory, the commission fee is recognized as the R&D expenses. The recognized expenses for the
current and the last accounting period respectively are KRW 6,187 MN and KRW 1,923 MN.
329

(3) .
( : )

14,804

43,477

1,956,066

1,978,406

50,000,000

50,000,000

19,240,894

54,196,903

2,998,952

()

14,460,000

19,460,000

14,474,804

74,239,389

()

()

19,460,000 106,175,309

(4) .
( : )

()

()

10,000,000

50,000,000

110,000,000

23,000,000

23,000,000

10,000,000

50,000,000

133,000,000

23,000,000

(5)
.
( : )

6,000,000

()

2012.3.20 ~ 2015.2.27

20,000,000

2014.4.18 ~ 2016.4.18

10,000,000

2014.4.18 ~ 2019.4.18

1,200,000

()

2014.6.9 ~ 2015.6.9

330

(3) Until the end of the current and the last accounting period, the details of payables and receivables between
the reporting company and its related parties are as follows.
(Unit:KRW 000)

Special
Relationship
Category

Current Period
Related party

Receiveable
Payables
s

Subsidiary

43,477

1,956,066

1,978,406

50,000,000

50,000,000

Bond with Warrants

19,240,894

54,196,903

Accounts Payable

2,998,952

14,460,000

19,460,000

14,474,804

74,239,389

19,460,000

106,175,309

Accrued Expenses
Portion Of LongTerm Debt
Long-term Borrowings

Celltrion
Chemical
Laboratory

Others

Payables

Accounts Payable

Celltrion

Receiveables

14,80
4
-

Accounts Receivable
Parent
Company

Last Period

Accounts

Celltrion
Healthcare

Accounts receivable
Long-term
prepayments

Sum

(4) During the current and the last accounting period, the amounts of important borrowings from the related
parties are as follows.

(Unit:KRW 000)
Special
relationship
Category

Related party

Celltrion

Parent
Company

Others

Current period
Borrowing

Repayment

Borrowing

Repayment

10,000,000

50,000,000

110,000,000

23,000,000

23,000,000

10,000,000

50,000,000

133,000,000

23,000,000

Celltrion Holdings
Sum

Last period

(5) Until the end of the current accounting period, the details of the guaranteed payment from the related parties
are as follows.

(Unit : KRW 000)


Providers
Representative
director

Price Guarantee Warranty processing

6,000,000

Debt Guarantees

Korea Development

2014.4.18 ~ 2016.4.18

Debt Guarantees

Korea Development

2014.4.18 ~ 2019.4.18

Debt Guarantees

National Bank

2014.6.9 ~ 2015.6.9

Debt Guarantees

20,000,000 Bank

Representative
director

10,000,000 Bank
1,200,000

Warranty details

2012.3.20 ~ 2015.2.27

Woori Bank

Representative
director

Representative
director

Warranty

331

(6) .


()
-2008 10 24

1 -2010 5 17 , 2 -2010 10 5 ,
3 -2012 12 31

2009 6 30 15 , 3
, 5 .

()
()

, ()

() .

25,000
25,000 () 9
2,780 (, CT-P06 2,760 ), ()

()
. , 2014
2014 12 31
14,460 ()
.

() .
() 2010
() , () 2009 1
23 () .

2008 () " "


25,000 , 2012 12 " "
CT-P06 9 2014 12 .
25,000 5,540 ,
19,460 5,000 .
14,460 2015
.

332

(6) Until the end of the current accounting period, the main agreements between the reporting company and the
related parties are as follows.
Category

Contents

Agreement Name

Primary dealership contract and grant contract modifications

Contract Partner

Celltrion Healthcare
The first contract date Oct.24th,2008

Contract date

Term

Agreement

Dealership give
consideration

The first contract revision date May 17th, 2010


The second contract revision date Oct. 5th, 2010
The third contract revision date Dec.31st,2012
In 15 years since Jun. 30th, 2009, contracts could be automatically extended for five
years if no written indications are made by the either party until three months before
the expiry.
Celltrion Pharm is given the dealership of following products: the various new drugs,
including therapeutic antibodies and biosimilar drugs that are being or will be
developed by Celltrion; the franchising of specific products of Celltrion and Celltrion
Healthcare; and the sale right of specific products within the domestic market.

KRW 25,000 MN

The advance money of KRW 25,000 MN is pre-paid for Celltrions products of 9


kinds. Respectively, each product is paid for KRW 2,780 MN, except for CT-P06
(KRW 2,760 MN). The cash paid by consumers should, in prior, be deducted with the
amount of money paid to Celltrion Healthcare. In addition, until the end of 2014, the
Dealership give
consideration Settlement unliquidated advance money was deducted from the cargo loans of other outbound
products. According to the agreement that the unliquidated advance money of KRW
14,460 MN until the end of 2014 should be repaid to Cellitrion, this advance money
should be recognized as the receivables.

Mortgage offer

Remark

The agreed guaranteed asset should be offered to Celltrion Pharm before the
advance money, served as a compensation for the dealership, is settled.

In the year of 2010, Celltrion Healthcare transplanted its investment department to


the Celltrion Holdings via a spinoff. On Jan.23rd, 2009, the biggest shareholder of
Celltrion Holdings, Seo Jung-Jin, was elected as the representative director of
Celltrion.

In 2008, the Company signed the Basic Agreement Of Dealership with Celltrion Healthcare and paid the longterm advance money of KRW 25,000 MN. According to the All-Round Revised Agreement Of Dealership signed
in December, 2012, all the advance money paid for the 9 kinds of products, except for the CT-P06, should be
settled by the end of December, 2014.Therefore, KRW 5,540 MN out of the KRW 25,000 MN long-term advance
money should be countervailed with the accounts payable. Until the end of the current accounting period, KRW
5,000 MN out of the unliquidated KRW19, 460 MN will be recovered in cash. All the uncovered KRW 14,460 MN
will be covered in 2015 as agreed and be classified to accounts receivable.

333

() "CT-P06 " "CT-P13


" 2010 2012 .
CT-P06 CT-P13 13,000 57,996 .
()
3.50% 17.20%.
, ()
() 50,000 ()
50,000
.
(6)

( ) ,
.
( : )

2,047,908

2,127,199

289,060

350,096

2,336,968

2,477,295

334

Until the end of the current accounting period, the amount of receivables and inventory assets, offset by the
dealership and product supplay contracts signed between the Company and Celltrion Healthcare, accounted for
3.50% and 17.20%, respectively, of the total asset
In addition, the representative director of the Company, who is also the biggest sharesholder of Celltrion Holdings,
offers 50,000 shares of Celltrion Holdings and 50,000 shares of Celltrion Healthcare to the Company as the
guarantee of the receivables.
(6)Key management personnel compensation
Key management personnel bear the rights and responsibility to plan, direct and control the corporate activities,
in either direct or indirect way. All the directors, whether or not they are business executive directors, are
included. The details of the key management personnel compensation are as follows.

Category
Short-term employee benefits
Retirement Benefits

Sum

(Unit: KRW
Current 000)
period

Last period

2,047,908

2,127,199

289,060

350,096

2,336,968

2,477,295

335

30.
(1)
.

50,000

2014 7 3
,

.
(2)
.
( : , USD)

KRW

9,000,000

8,984,923

KRW

3,000,000

997,571

KRW

4,000,000

4,000,000

(D/A)

USD

2,000,000

1,114,314

USD

177,200

USD

300,000

USD

400,000

132,498

KRW

3,000,000

1,738,296

KRW

2,000,000

2,000,000

(60 )

KRW

50,000,000

50,000,000

KRW

20,000,000

20,000,000
(360 )

KRW

10,000,000

10,000,000

(1,630
USD 250,600)

()

()

(600 )


(300 )

KRW

1,000,000

1,000,000

KRW

102,000,000

98,720,790

USD

2,877,200

1,246,812

(12 )

336

30. Emergency and other agreements


(1) Pending litigation.
Until the end of the current accounting period, the details of the pending litigation where the company served as
the defendant are as follows.
Types of events

Plaintiff

Litigation
amounts

Patent infringement claims KRW 50,000,000


and claims prevention

Competent
court

Progress

Roche Diagnostics GmbH- The Seoul Central Before the first trial
Mannheim ,Germany

District Court

verdict

As for the lawsuit for damage mentioned above, the judgment made on July 3rd, 2014 dismissed the plaintiffs
claim. As for the lawsuit for patent infringement, there is no reflection on the financial statement because no
reasonable prediction could be made for the final result of the lawsuit.
(2) Financial Institutions Credit Ceiling Agreement.
Until the end of the current accounting period, the companys pertinent agreements with the financial institutions
are as follows.

(Unit : KRW 000, USD)

Financial
Institutions

SME Bank

Woori Bank

Category

Currency

Limited
commitments

Spinning liquid

8,984,923Real estate collateral


rights (KRW 1,630 MN
997,571
and USD 250,600)

Discount Bills

KRW

9,000,000

General corporate loans

KRW

3,000,000

Rotation
funds

KRW

4,000,000

4,000,000

No credit system (D / A)

USD

2,000,000

1,114,314

Foreign check collection

USD

177,200

Import letters of credit at


sight

USD

300,000

Import letters of longterm credit

USD

400,000

132,498

General retail banking


loans

KRW

3,000,000

1,738,296

Driving
general
corporate loans

KRW

2,000,000

2,000,000

Corporate Loan Facility

KRW

50,000,000

50,000,000

Business
loans

of

corporate

operating

KRW

20,000,000

KRW

10,000,000

Corporate
general
working capital loans

KRW

1,000,000

KRW

102,000,000

98,720,790

USD

2,877,200

1,246,812

Sum

CEO payment
guarantees (KRW 6
BN)

Real estate collateral


rights (KRW 60 BN)
Real estate collateral
20,000,000
rights (KRW 36 BN)
CEO payment

Korea
Development Convertible Bond & Bond
Bank
with Warrant

Kookmin
Bank

Collateral information

10,000,000

Guarantees (KRW 30

BN)
CEO payment
1,000,000guarantees (KRW 1.2
BN)

337

31.
1108 ""
.
(1) .
( : )


22,862,382

26,595,095

1,703,752

2,336,407

4,744,927

3,888,159

1,596,745

2,197,607

14,259,906

10,800,002

7,573,114

4,200,178

11,967,528

65,800

64,708,354

50,083,248

(2) .
( : )

60,407,766

44,758,994

2,461,545

2,552,765

1,286,295

1,705,346

552,748

1,066,143

64,708,354

50,083,248

338

31. Business Department.


The company reported the Business Department separately according to K-IFRS No.1108. The details of each
department on the Companys general level is as follows.
(1) The goods and services operating income occurring in the current and the last accounting period is as follows.

unit : (Unit: KRW 000)


Category

Current period

Last period

Product sales

Godex

22,862,382

26,595,095

Hepadif

1,703,752

2,336,407

Tamipool

4,744,927

3,888,159

Somax

1,596,745

2,197,607

Others

14,259,906

10,800,002

7,573,114

4,200,178

11,967,528

65,800

64,708,354

50,083,248

Product sales
Ram Island
Others
Sum

(2) The details of the departments in each location in the current and the last accounting period is as follows.

Unit:KRW 000)
Category

Current period

Last period
60,407,766

44,758,994

Kazakhstan

2,461,545

2,552,765

The Philippines

1,286,295

1,705,346

552,748

1,066,143

64,708,354

50,083,248

Domestic
Overseas

Others
Sum

339

32.
(1)
, ,
, , ,
.
, , ,
.
.
.
. ,
BBB(S&P) . ,
,
.

.
1)

,
.
.

340

32. Risk Management.


(1) Financial risk management.
The Companys risk management focuses on financial assets and financial liabilities. The financial assets consist of
cash, financial assets available for sale, accounts receivable, and other bonds. The financial liabilities consist of
accounts payable, borrowed funds, corporate bonds, and other debts.
The Company is exposed to the risks of changeable exchange rates, interest rates, and market prices, which will
influence the value of assets, liabilities and forecasted transactions. The purpose of risk management is to control
the market risks in operating activities and financing activities. The Company takes measures to avoid derived
risks and non-derived risks in cash flow in accordance with risk evaluation outcome. To realize effective credit risk
management, the Company only does hedging with financial institutions rated at least up to BBB (S&P). In
addition, the Company also evaluates the trading partners relative credit and sets an absolute amount to manage
the credit risk of financial instruments.
In order to manage risk elements of this kind of risk, the Company executes long-lasting monitoring and
forecasting on every kind of risk and carries out relevant risk management policies.
1) Credit risk management.
The company has taken several steps to manage credit risks. It only conducts transactions with business partners
with credit ratings above a certain level. It also has knowledge of whether or not there is a monthly settlement of
financial assets and the customer's ability to pay. Through these management methods, the Company can adjust
the supply for the customer and consequently minimizes the credit risk.

341

.
( : )

2,546,271

10,071,947

42,625,251

37,308,106

30,585,511

15,443,166

305,760

1,305,760

70,825,986

56,257,173

2)

, .

,
.
.
<>
( : )

1 ~5

804,062

804,062

804,062

28,024,077

28,024,077

28,024,077

89,967,603

101,967,630

20,213,030

81,754,600

50,000,000

53,447,164

53,447,164

9,445,592

13,131,926

150,000

12,981,926

19,240,894

26,113,851

300,000

25,813,851

197,482,228

223,488,710

102,938,333

120,550,377

342

The biggest exposures to the credit risk of financial assets at the end of the current and the last accounting
periods are as follows.

(Unit: KRW 000)


Category

The end of current period

Cash and cash equivalents

The end of last period

2,546,271

10,071,947

Accounts Receivable

42,625,251

37,308,106

Other receivables

30,585,511

15,443,166

305,760

1,305,760

70,825,986

56,257,173

Available-for-sale financial assets


Sum

2) Liquidity risk management

In order to manage liquidity risks, the Company develops short-term and long-term capital management plans,
analyzes and reviews the total actual cash outflow and matches the maturity time of financial assets and liabilities
to their cash flow.
The Company holds that the financial liabilities could be repaid by the cash inflow of financial assets and cash
flows from operating activities. In addition, in order to manage liquidity risks caused by a temporary or abnormal
business environment, the group signed discount bond agreements and conditional loan contracts with financial
institutions, based on varied trading patterns.
Until the end of the current and the last accounting period, the maturity analysis of remaining financial liabilities
contract are as follows.

<The end of current period>


(Unit: KRW 000)
Category
Trade payables

Carrying amount

Contractual cash flow

Within a year

1-5 years

804,062

804,062

804,062

Other debt
payments

28,024,077

28,024,077

28,024,077

Financial institutions
Borrowings

89,967,603

101,967,630

20,213,030

81,754,600

Other borrowings

50,000,000

53,447,164

53,447,164

Convertible bonds

9,445,592

13,131,926

150,000

12,981,926

19,240,894

26,113,851

300,000

25,813,851

197,482,228

223,488,710

102,938,333

120,550,377

Bond with warrants


Sum

343

<>
( : )

1 ~5

826,128

826,128

826,128

5,555,886

5,555,886

5,555,886

69,366,186

81,585,960

21,985,960

59,600,000

50,000,000

56,900,000

3,450,000

53,450,000

11,373,580

13,460,908

360,000

13,100,908

54,196,903

79,241,554

900,000

78,341,554

191,318,683

237,570,436

33,077,974

204,492,462


.
3)

. ,
.
.
USD .
,
,
. ,
.
.
10%
. ,
.
( : )

USD

10%
128,817

10%
(128,817)

10%
223,348

10%
(223,348)

344

<The end of last period>


Unit: KRW 000)
Category

Carrying amount

Trade payables

Contractual cash flow

Within a year

1-5 years

826,128

826,128

826,128

Other debt
payments
Financial
institutions
Other borrowings

5,555,886

5,555,886

5,555,886

69,366,186

81,585,960

21,985,960

59,600,000

50,000,000

56,900,000

3,450,000

53,450,000

Convertible bonds

11,373,580

13,460,908

360,000

13,100,908

Bonds with
warrants
Sum

54,196,903

79,241,554

900,000

78,341,554

191,318,683

237,570,436

33,077,974

204,492,462

The maturity analyses above are based on the earliest payment date of the non-discounted nominal cash flow.
3) Market risk management
The Company minimizes the risks on revenues and risk exposures through market risk management. Market risk
refers to the risks of the devalued or shrunk asset portfolios caused by changeable interest rates, foreign
exchange, and other market factors.
(a)Exchange rate risk management
The Company faces the exchange rate risk of USD from goods transactions and raw materials purchase. In order
to minimize the risk, the Company uses domestic currency in frequent transactions and money transfers to avoid
oversold position losses. The Company forbids speculative foreign exchange trading and regularly overviews,
assesses, and manages the exchange rate risks.
The Company regularly measures the exchange rate risk of Korean Won. Until the end of the current and the last
accounting period, when different foreign functional currency exchange rates fluctuate by 10%, the influence on
the income and loss before income taxes exerted from the conversion of foreign currency of financial assets and
liabilities is as follows. Note, here the influence caused by the interest rate fluctuation is not included.

(Unit:
000)
Current period

Category

10% rise
USD

128,817

KRW
Last period

10% drop
(128,817)

10% rise
223,348

10% drop
(223,348)

345

.

,
.
(2)

.

.

.
.
( : )

.
198,848,533

192,572,318

(2,546,271)

(10,071,947)

196,302,262

182,500,371

213,818,948

167,415,488

91.81%

109.01%

. (/)

33.
2015 1 20 2
50,000 ,
() 50,000 .
2015 2 13 5
30,000 .

346

(b). Interest rate risk.


Because the Company issues fixed-rate corporate bonds for funding financing, no interest rate risks lie in the cash
flow. Meanwhile, the Company holds that the fair value of interest rate risk fluctuation is not very important.
(2) Capital risk management.
The purpose of capital management is to continue to protect the Companys long-lasting operation, deliver profits
to shareholders, reduce the cost of capital and maintain an optimal capital structure.
The Company uses the liability ratio to indicate the level of capital management. This ratio is calculated by
dividing the net debt (excluding cash and cash asset from the total liabilities) to the total asset. The net debt and
the total asset are calculated based on the exposed number in the financial statement.
Until the end of the current and the last accounting period, the Companys liability ratio is as follows.

(Unit:KRW 000)
Category
. Net debt

Current period

Last period

198,848,533

192,572,318

(2,546,271)

(10,071,947)

Net debt

196,302,262

182,500,371

. Capital

213,818,948

167,415,488

91.81%

109.01%

Total liabilities
Cash and cash equivalents

. Debt ratio ( / )

33. Events after the balance sheet day.


On the Jan.20th 2015 council meeting, the Company decided to issue the second unregistered private nonseparable convertible bonds with warrants for KRW 50,000 MN and estimated to fully offset the borrowings from
Celltrion.
In addition, on the Feb. 13rd 2015 council meeting, the Company decided to issue the fifth unregistered private
convertible bonds for KRW 30,000 MN.

347

6.

( :

2014 12 31 )

( : , %)

2014 04
18
2013 12
19
-

10,000

1.5

60,000

1.5

70,000

()

2019 04
18
2018 12
18
-


( :

2014 12 31
10

( : )

10

30

90

180

30

90

180

.

( :

2014 12 31
10

( : )

10

30

90

180

30

90

180

348

6. Other finance related issues


Debt securities issued performance
( Date: December 31, 2014) (Unit: KRW MN)
Couns
Ratings
Intere
els
st
(Rating

Issuing
Securitie How to
Issued on
Company s type
publish
Celltrion
Debent
Privat April 18, 2014
Pharmaceut ure
e
ical
Equity
Celltrion
Debent
Privat December 19,
Pharmaceut ure
e
2013
i lSum
-

Expiration
date

Repay
Or not

Organiz
ed by

10,000

1.5

April 18, 2019

Outsta
nding

60,000

1.5

December 18,
2018

Outsta
nding

70,000

Outstanding balance of
Commercial Paper
(Date: December 31, 2014

Residual
Less
maturity
than 10
Collu
Outst
Priva
andi
Sum

More
than 10
days

()

More
than 30
days

More
than 90
days

More
than180
days
-

More
than 1
years

More
than
two

More
than 3

Sum

Not applicable.

Outstanding balance of
Asset Backed ShortTerm Bond
(Date :

December 31, 2014

Residual
maturity

Less than
10 days

()

More than More than More than


10 days
30 days 90 days
Less than Less than 180 days
30 days
90 days or less

Outst
andi
ng

More
than180
days

Sum
maturit
y

Issue limit The


remaining
limit

Up to

Collus
ion
Privat

Sum

No related issues.

349


( :

2014 12 31 )
1

( : )

10

10

20,000

10,000

30,000

20,000

10,000

30,000


( :

2014 12 31
1

( : )

10

15

20

10

15

20

30

30

.

( :

2014 12 31
1

( : )

10

20

10

20

30

30

350

Outstanding balance of
corporate bond
(Date :

December 31, 2014

()

More than More than More than More than More than
Residual
Up to one 1year
More
2years
3years
4years
5years
maturity
year
than 10
Less than Less than Less than Less than Less than
Collusi
Outst
Privat
20,000
10,000
andin
Sum
20,000
10,000
g

Sum
30,000
30,000

Outstanding balance of hybrid


bonds
(Date :

December 31, 2014 )


()
More
than
More
than
More
than
More
than
More
Residual
Up to one than
More
Sum
5years Less 10years
15years
25years
maturity
year
than 30
than
Less than Less than Less than
1year
Collusi
Outst
Privat
andi
Sum
ng

No related issues

Outstanding balance of
Contingent convertible bonds
(Date :

December 31, 2014

Residual
maturity

Outst
andi

()

More than
2years
Less than
3years

More
than 1
years2 years

Up to
one
year

More
More
More
More
More
More
than
than
than
than
than
3years 4years 5years 10years 20years than 30
Less than Less than Less than Less than Less than
4years 5years 10years 20years 30years

Sum

Collusi

Privat

Sum

No related issues.

351

IV.
1.

15

14

13

2.

15 ()

50

460

14 ()

50

460

13 ()

47

488

3.

15 ()

14 ()

13 ()

352

IV. Audit opinions and Others

1. Names opinions of auditors


Fiscal Year
15th annual period

Auditors

Audit opinion

Reasonable

Audit Report remarks

No deficiencies

14th annual period

Reasonable

No deficiencies

13th annual period

Reasonable

No deficiencies

2. Status of audit service contract

Fiscal Year

Auditors

15th annual period

Ryan
Accounting
firm

14th annual period

Ryan
Accounting
firm
Ryan
Accounting
firm

13th annual period

conte
t
Review of interim financial
statements, the
audit of such financial statements ending

Rem

Total Time
50

460

Review of interim financial statements, the


audit of such financial statements ending

50

460

Review of interim financial statements, the


audit of such financial statements ending

47

488

3. Status of non-audit service contracts with external auditors


Fiscal Year
Contract date
Service
Service Period
information
15th annual period
-

Repair
services
-

Rema
rk
-

14th annual period

13th annual period

No related issues.

353

V.
1.
, ,
.
,
.
,
, .


.
,
.
,
.
2.
2009 8
26.8%
667 , 11.4% 84 .
2010 7 2 ,
cGMP , 100
.
8 6000
cCMP EU-GMP
, 60
.

354

V. Managements opinions and analysis of operations


1. Notes on forward-looking statements
Forward-looking statements provide current expectations of future events based on many assumptions which
are related to the future operating environment. However, those assumptions, like the difference between
predictions and actual results inclusive ofuncertainties and other risks, may turn out to be inaccurate Forwardlooking statements are not guarantees of future performance and the Companys actual results may differ
significantly from the results discussed in the forward-looking statements. Factors that might cause such
differences include, but are not limited to, internal operations and external environments. Because of these
factors affecting the Companys financial condition and operating results, past financial performance should not
be considered to be a reliable indicator of future performance, and investors should not use historical trends to
anticipate results or trends in future periods.
All information presented herein is based on the Companys fiscal calendar. The Company assumes no
obligation to revise or update any forward-looking statements for any reason, except as required by law..
2. Overview
Pharmaceutical manufacturing and sales became the companys major business after merging with a
pharmaceutical company in August 2009. Net sales rose 26.8% to 66.7 billion KRW during 2009 compared to
2008, while operating income rose 11.4% to 8.4 billion KRW.
In July 2010, with the aim of worldwide market, the company signed a settle-in agreement for the most
advanced production facilities that meet with cGMP standards in Chungbuk Ochang second Industrial Complex,
and set up a production line with a capacity of more than 10 billion pharmaceutical products annually.
Covering an area of 86000 square meters, reaching cCMP and EU-GMP standards, and owning the all
equipment and the ability to export to developed countries, Ochang factory is second to none among
pharmaceutical production companies in Korea. Ochang factory plans to gradually increase production to more
than 60 kinds of generic medicines, which accounts for a large amount of the world market, to overseas
markets

355

3.
.
4,112 9.2% 1,929
11.0% .
.
.
'III. , 1. '
.
.
2013 526 13.8% 2007
. 222
, '',
' 40
.
"" 900

2012 7 (MFDS)

2012 .
3.
2013 131.25% 2

.

356

3. Financial conditions and operating performance


1. Financial conditions
Total assets increased by 9.2% to 411.2 billion KRW, while total liabilities increased by 11% to 192.9 billion
KRW. The growth in assets mainly because of new factory construction while the growth of liabilities is due to
rise in borrowing costs for plant construction. For other details please refer to III. Finance related issues 1.
Overview of financial information.
2 Operating performance
Sales have kept rising since 2007, with an increase by 13.8% to 52.6 billion KRW in 2013 compared with 2012.
This was driven by an increase in sales of Godex as a featured product, which reached 22.2 billion KRW in 2013.
In addition, sales of more than 40 kinds of drugs including mixed Vitamin Tamipool and the blood circulation
drug, Somax, also increased, making a contribution to the overall growth.
Autoimmune diseases treatment, Remsima, developed at Celltrion, proved its safety and efficacy to be on par
with the original, based on more than 900 clinical trials worldwide, and was granted sales license and rights by
MFDS in July 2012. Our company has carried out marketing campaigns focused on general hospitals and largescale hospitals, which helped maintain the increasing trend of Remsima sales from the end of 2012.
3lLquidity, funding, and expenditures
At the end of 2013, the current ratio is 131.25%. By the end of the report submission period, our company
has issued and allocated convertible bonds and bonds with warrants for Chungbuk Ochang Second Industrial
Complex

357

VI.
1.
.
2 , 3 , 3
8 .
.
"VIII.
" "1. " .
.

2014. 01. 28

2014. 02. 25

-
- ()
3

2014.03. 12

- ()
- ()

- ()
- 14
4

2014. 04. 18

2014. 04. 18

- 4

2014. 04. 28

- /

2014. 04. 30

2014. 09. 04

- /

2014. 12. 19

358

VI. Relevant issues concerning company departments (i.e.


board of directors) and subsidiaries
1. Relevant issues concerning board of directors
a) General introduction of board of directors
Upon the filing of the annual report, the companys board of directors consisted of three people, including one
permanent director and two nonpermanent directors.
b) Outside directors
To identify the members of the outside directors, please refer to 1.Remuneration of the executives in VIII
Executives and Staff.
c) Relevant issues concerning the operation of board of directors

Number

Date

Content

2014. 01. 28 -Approval of short-term borrowings


2014. 02. 25 - Approval of issuance of financial statements
- Approval of changes in articles of association
- Recommendation of backup directors
- Decision on the salary limits of directors
2014.03. 12
- Decision on the salary limits of auditors
- Decision on granted share options
- Calling of the 14th general meeting
2014. 04. 18 - Approval of loan

2014. 04. 18 - Issue the 4th convertible bond

2014. 04. 28 - Approval of the transactions between subsidiaries

2014. 04. 30 - Prolonging the time of investment in the facilities

8
9

2014. 09. 04 - Approval of the transactions between subsidiaries


2014. 12. 19 - Decision of dividend policy

1
2

Approval Status

Approv

Approv
ed
Approv
ed
Approv
ed
Approv
Approv
ed
Approv
Approv

359

( 1)

( 1)

(: 100%)

(: 100%)

(: 100%)

2014. 01. 28

2014. 02. 25

2014.03. 12

14

2014. 04. 18

2014. 04. 18

2014. 04. 28

2014. 04. 30

2014. 09. 04

2014. 12. 19

( 1) , 2014 3 14

.

360

d) Attendance rate and pros and cons of the board of directors


Name of the external director

Number

Date

Content

Kim Haengok
(Note1)
(Attendance:
100%)

Kim
Lee Gwangmin
Gyeongyeop
(Note1)
(Attendance: (Attendance :
100%)
100%)
Approval
Status

2014. 01. 28 -Approval of short-term borrowings

Approved

Approved

2014. 02. 25 - Approval of issuance of financial


statements

Approved

Approved

2014.03. 12 - Calling of the 14th general meeting

Approved

Approved

2014. 04. 18 - Approval of loan

Approved

Approved

2014. 04. 18 - Issuance the 4th convertible bond

Approved

Approved

2014. 04. 28 - Approval of the transactions between


subsidiaries

Approved

Approved

2014. 04. 30 - Prolongment of the time of investment


in the facilities

Approved

Approved

2014. 09. 04 - Approval of the transactions between


subsidaries

Approved

Approved

2014. 12. 19 - Decision of dividend policy

Approved

Approved

(Note 1: Kim Haengok was the original outside director, and now he has moved out of the position.Furthermore,
he was elected as the non-executive director in the general meeting of the stockholders in March 2014. And Lee
Gwang-ming was elected as the new outside director.)

361

2.
.
1 .


.
.
"VIII. " "1. "
.
.

( : 100%)

- 14

-
2014-1

2014.03.12

- ()
- ()

- ()
- ()
- 14

3.
.
33 3 2 , 382 2
.
.
.
.

362

2. Relevant issues concerning supervision system


a) Relevant issues concerning executive supervisors
By the filing date of this report, the company now has one executive supervisor, operating the supervision
and accounting business independently and voicing opinions in the meetings of the board of directors.
b) Human resources

Please refer to 1. Appendix 11: Status of directors as of 31 December 2014 under VIII.
Relevant Issues Concerning Directors and Employees.
c) Job description
Statement of
Auditing
Year

Date

Agenda

Status

Im Dongho
(Attendance: 100%)
Status

- Approval of 14th financial report and holding of


a regular general meeting
- Approval of partial adjustments to regulations
2014-1

March 12nd
2014

- Nomination (proposal of) director candidates


- Agreement on (proposal of) directors payment
range

Approved

Approved

- Agreement on (proposal of) auditors payment


-Agreement on (proposal of) the endowment of
stock options
- Holding of the 14th regular directors meeting

3. Relevant issues concerning shareholders voting rights


a) Whether cumulative voting is adopted

According to Article 33, Item 3 of the Companys regulations, centralized voting mentioned in Commercial
Law Article 382, Item 2 does not apply to situations when more than two directors are elected.
b) Whether a written or an electrical voting system is adopted
Non-related matters
c) Whether minority stockholders right is exercised
Non-related matters

363

VII.

( :

2014 12 31

( : , %)

4,608,692

32.02

9,103,074

48.19

34,580

0.24

34,580

0.18

20,000

0.14

20,000

0.11

29,773

0.21

29,773

0.16

19,209

0.13

19,209

0.10

16,317

0.11

16,317

0.09

20,223

0.14

20,223

0.11

5,115

0.04

5,115

0.03

13,534

0.09

13,534

0.07

6,700

0.05

6,700

0.04

2,600

0.02

2,600

0.01

2,946

0.02

2,946

0.02

2,000

0.01

2,000

0.01

1,767

0.01

0.00

12,116

0.08

11,116

0.06

11,816

0.08

11,816

0.06

1,500

0.01

1,500

0.01

16,128

0.11

16,128

0.09

3,801

0.03

3,801

0.02

4,828,817

33.55

9,320,432

49.36

364

VII. Relevant issues concerning shareholders


Current shareholding status of major shareholders and special related persons

(Base date:

December 31st 2014

(Unit: share, %)
Number of shares and proportion of shareholding

Name

Relationship

Stock

Initial balance

Notes

type
Number of
shares

Celltrion
Co., Ltd.

Park Yeongjun
Kim Hyeonggi
Kim Hakno
Jo Heungtaek
Choi Seungjae
Choi Eunseok
Chae Hojin
Gwon Seok
Yu Heonyeong
Choi Seunghui
Kim Manhun
Gu Yunmo
Im Dongseok
Kim Gwangsik
Kim Taejin
Jang Jin
Cheon Okjin
Kim Useong
Sum

Final balance

Number of
shares

Stake

Stake

Largest
sharehol
der

Common
stocks

4,608,692

32.02

9,103,074

48.19
-

Other
parties

related

Common
stocks

34,580

0.24

34,580

0.18

Other
parties
Other
pa ties
Other
pa ties
Other
pa ties
Other
pa ties
Other
pa ties
Other
pa ties
Other
pa ties
Other
pa ties
Other
pa ties
Other
parties

related

Common
stocks

20,000

0.14

20,000

0.11

related

Common
stocks
Common
stocks
Common
stocks
Common
stocks
Common
stocks
Common
stocks
Common
stocks
Common
stocks
Common
stocks
Common
stocks

29,773

0.21

29,773

0.16

19,209

0.13

19,209

0.10

16,317

0.11

16,317

0.09

20,223

0.14

20,223

0.11

5,115

0.04

5,115

0.03

13,534

0.09

13,534

0.07

6,700

0.05

6,700

0.04

2,600

0.02

2,600

0.01

2,946

0.02

2,946

0.02

2,000

0.01

2,000

0.01

Other
pa ties
Other
pa ties
Other
pa ties
Other
pa ties
Other
pa ties
Other
pa ties

related

Common
stocks
Common
stocks
Common
stocks
Common
stocks
Common
stocks
Common
stocks
-

1,767

0.01

0.00

12,116

0.08

11,116

0.06

11,816

0.08

11,816

0.06

1,500

0.01

1,500

0.01

16,128

0.11

16,128

0.09

3,801

0.03

3,801

0.02

4,828,817

33.55

9,320,432

49.36

related
related
related
related
related
related
related
related
related

related
related
related
related
related

365


( :

2014 12 31

( : , %)

2010 11 25

()

4,471,612

31.63

2013 04 19

()

9,103,074

48.19


( :

5%

2014 12 31
)

9103074

48.19

161,119

0.85

( : )

( :

2014 12 31

( : )

6,613

99.95%

9,334,666

49.42

366

Changes in largest shareholder

(Date: December 31, 2014 )


Changing date
Nov 25th 2010

(Unit: Share, %)

the largest
shareholder

Number of
shares

Celltrion Holdings

th

Celltrion Co., Ltd.

Apr 19 2013

Notes

Stake

4,471,612

31.63

9,103,074

48.19

Shareholdings
(Date: December 31st 2014)
Category

(Unit: Share)

Shareholders with
more than 5% share

Celltrion Pharm

9103074

48.19

161,119

0.85

ESOP

(Date: December 31st 2014

Status of minority shareholders


)

(Unit: Share)

Shareholders

Category

Minority stockholders

Notes

Number of shares Stake

Stockholder

Number of
shareholders
6,613

Shareholding
As a percentage
Number of shares
of all
shareholders

99.95%

9,334,666

Stake

49.42

Notes

368

VIII.
1.

( :

2014 12 31

( : )

1957

10

- )
- )
- )

1958
10

1965
05

- )
-
- )
-
-

2,946

2011.10.01 ~ 2016 03

27

20,000

2009.01.23 ~ 2015 03

21

2009.01.23 ~ 2015 03

21

2014.03.28 ~ 2015 03

27

1951
12


()

- )
- University of Maryland

-

1956

06

- )()
- )()
- ()

1957

04

1959

- ()

1963
08

- ()
- ()

2013.03.25 ~ 2015 03

27

2014.03.28 ~ 2015 03

27

29,7

- 2009.08.05 ~

5,115

2011.01.03 ~

1968

- ()

20,2

- 2007.09.01 ~

1963

- ()

- 2012.05.01 ~

1966
03

16,317

2010.01.04 ~

1962

- ()

(P1 - ()

- 2009.08.05 ~

1961
04

- G.S.K()

19,209

2009.08.05 ~

13,5

1962

2 - ()

11,1

- 2012.07.01~

1963

- ()

11,8

- 2012.07.01~

1968

(P2 - ()

- 2013.10.01~

1965
03

3,801

2014.01.01~

- () JPC

378

VIII. Relevant Issues Concerning Directors and


Employees
1. Issues concerning directors and employees
Status of directors
(Base date:
Name

Gender

December 31st 2014)


Date of Birth

Title

(Unit: Share)
Status of

Attendance

Responsibilities

registration as a

Seo Jeongjin

Gim manhun

Male

Male

Oct 1957

CEO

Male

Shares
Full-time

May 1965

Non-

Executive
Executive

Full-time
Part-time

executive

Gim haengok

Male

Operating supervision

Oct 1958
Preside
nt

Gim hyeonggi

director
Executive

Dec 1951

director
Non-

Business
management
Major business
decisions

Yi Kwang Min

Gim Hangno
Chae Hojin

Male

Male

Male
Male

Jun 1956

Apr 1957

Nov 1959
Aug 1963

Choe Eunseok

Male

Jun 1968

Wang Jingyu

Male

Oct 1963

Choe Seungjae Male


Gwon Seok

Male

Mar 1966
Feb 1962

Male
Joe Hungtaek

Apr 1961

Gim Gwangsik

Male

Feb 1962

Tae Jin Kim

Male

Apr 1963

Yunhyeong
Male
Kim Woo Seong Male

Jul 1968
Mar 1965

director
Nonexecutive
director

Nonexecutive
director
Managing
Director
Managing
Director

- Current CEO of Celltrion


- Current CEO of Celltrion Holdings
- Current CEO of Celltrion Pharm
- Current director of Celltrion Pharm

2,946

- CEO of Henkel Homecare Korea


- Current Senior Vice President of
Celltrion
- Director at Neksol
- Leader of Daewoos strategic-planning
team

20,000

Executive

Part-time

Business Consulting

- Seoul National University Law School


Graduation
- Hyundai Finance (State) audit manager
- Chohung Bank Branch Manager
- Shinhan Bank Branch Manager

Executive

Part-time

Business guidance

- Current professor at Seoul School of


Integrated Sciences & Technologies
- Ph.D. in economics from University of
Maryland
- Policy analyst of Daewoo Economic
Research Institute
- Deputy of Korea International Trade
Association
- Current CEO of Sender Global Co., Ltd.
- Current managing director of Seobon
Construction Co., Ltd.
- Geunyoung Construction Co., Ltd.
- Hanseo Pharmaceutical Co., Ltd.

29,773

20,223

executive

Gim
Gyeongyeop

Numbe
Voting
Rights

Career
milestones

and control

Executive

Part-time

Business guidance
and control

Non-executive
Non-executive

Full-time
Full-time

Domestic Business
Category
Superintendent

Managing
Director
Managing
Director
Managing
Director

Non-executive

Full-time

Production Support

- UKPalm Co., Ltd.


- Wyeth Korea Co Ltd
- Polyvision Co., Ltd

Non-executive

Full-time

Technical assistance

- Celltrion Co., Ltd

Full-time

Domestic Business
Category

16,317

Executive dir

Non-executive

Full-time

Production (P1)

- Handok Pharmaceuticals
- Sanofi Aventis
- Hanseo Pharmaceutical Co., Ltd.

Non-executive

Full-time

Marketing Sales
Support

- Geunhwa Pharmaceuticals
- G.S.K Korea Co., Ltd.

19,209

- Prestigious Pharmaceutical

11,116

Full-time

The Metropolitan
Category 2
Yeungnam industry

-Hanseo Pharmaceutical Co., Ltd.

11,816

Full-time
Full-time

Quality (P2)
Overseas

- Hanol Bio-Pharma Co., Ltd.

Executive dir
ector
Executive
Director
Executive
Director
Executive
Executive
Director

Non-executive

Non-executive
Non-executive
Non-executive
Non-executive

Full-time

5,115

13,534

- Ilyang Pharm Co., Ltd


d
CC
d

3 801

379


( :

2014 12 31

( : )

216

14

230 4 10

85

31

118

301

45

348

10,883

47

4 4

3,557

30

4 8

14,440

41

2.
< >
1.
( : )

1,500

300

2.
( : )

614

154

72

36

54

54

740

106

< >
1.
( : )

380

Status of employees

December 31st 2014 )

(Base date :
Business
sectors

Gender

(Unit : KRW)

Number of people
Fulltime

The

Contrac Etc
t worker

Total

average
length of

Sum

Averag

annual
pay

Remar
k

e
paym

service

ent
per
perso
n

Pharmac Male
euticals
Pharmac Fem
euticals ale
Sum

216

14

85

31

301

45

230 4year10mon
ths
118 4year4mont
hs
348 4year8mont
hs

10,883

47

3,557

30

14,440

41

2. Payment and other issue concerning the directors and


auditor
< Payment status of the directors>
1. Payment approved by general shareholders meeting
Number of
people

Category

(Unit: KRW MN)

Shareholders' Meeting approved


amount

Remark

Director

1,500

Audit

300

2. Amount of payment
Categ
ory
Registered Directors
Outside Directors

Number
of people
4
2

Members of audit
committee and
audits

Sum

Total payment

Title

(Unit: KRW MN)


Remark

614
72

154
36

54

54

740

106

< Payment of the directors>


1. Individual payments
Name

Average payment per


person

Total
remunera

(Unit: KRW MN)


Maintenance is not included in the
total remuneration
381

2.
< >
< 1>
(: )

220

220

382

2. Criteria and methods of calculation


No related matters
<Status of the stock option grant and exercise>
<Table 1>

(Unit: KRW MN)


Category
Registered
Directors
Outside
Directors
Members of audit
committee and
audits

Sum

Number of
people
4

Total fair value of stock options

Note
220

220

383

< 2>
( :

2014 12 31 )

( : , )

45

148

57

2012 03 22

2011 03 25

2011 03 25

2011 03 25

2011 03 25

2011 03 25

2011 03 25

2011 03 25

2011 03 25

2013 03 25

2014 03 28

2014 03 28

2008 03 25

2010 03 22

2011 03 25

2012 03 22

2013 03 25

2014 03 28

20,000

20,000

20,000

20,000

15,000

15,000

10,000

10,000

10,000

10,000

7,000

7,000

7,000

7,000

7,000

7,000

10,000

10,000

7,000

7,000

7,000

7,000

7,000

7,000

203,739

84,262

116,443

3,034

291,300

272,800

16,700

1,800

220,000

2,000

218,000

26,500

18,000

8,500

19,000

2,500

16,500

3,000

3,000

2014.03.22 ~
2024.03.21
2013.03.25 ~
2023.03.24
2013.03.25 ~
2023.03.24
2013.03.25 ~
2023.03.24
2013.03.25 ~
2023.03.24
2013.03.25 ~
2023.03.24
2013.03.25 ~
2023.03.24
2013.03.25 ~
2023.03.24
2013.03.25 ~
2023.03.24
2015.03.25 ~
2025.03.24
2016.03.28 ~
2026.03.27
2016.03.28 ~
2026.03.27
2010.03.25 ~
2015.03.25
2012.03.22 ~
2022.03.21
2013.03.25 ~
2023.03.24
2014.03.22 ~
2024.03.21
2015.03.25 ~
2025.03.24
2016.03.28 ~
2026.03.27

19,139

16,933

16,933

16,933

16,933

16,933

16,933

16,933

16,933

17,350

11,436

11,436

5,671

11,185

16,933

19,139

17,350

11,436

384

<Table 2>
(Base date: December 31st 2014
Granted
Parties

Relation

Grant
date

Kim Manhun

Executive 2012/03/22

Kim
Hyeonggi

Executive 2011/03/25

Kim Changjin

Kim Hakno

Nonexecutive

2011/03/25

)
Method

(Unit: KRW, share)


Stock
type
Grant

Quantity
changes
Exercise Cancel

Exercise
period

New
shares
d
New
shares

Common
stocks

20,000

20,000

Common
stocks

20,000

20,000

New
shares
d
New
shares

Common
stocks

15,000

15,000

Common
stocks

10,000

10,000

Nonexecutive

2011/03/25

Choi
Eunseok

Nonexecutive

2011/03/25

New
shares

Common
stocks

10,000

10,000

Gwon
Seok

Nonexecutive

2011/03/25

Common
stocks

7,000

7,000

Jo
Heungtaek

Nonexecutive

New
shares
d

2011/03/25

Common
stocks

7,000

7,000

Choi
Seungjae

Nonexecutive

2011/03/25

Common
stocks

7,000

7,000

Chae Hojin

Nonexecutive

2011/03/25

Common
stocks

10,000

10,000

Im Dongseok Nonexecutive

2013/03/25

Common
stocks

7,000

7,000

NonI Eonhyeong executive

2014/03/28

Common
stocks

7,000

7,000

Choi
Yunjeong

2014/03/28

New
shares
d
New
shares
d
New
shares
d
New
shares
d
New
shares
d
New
shares
d
New
shares
issued

Common
stocks

7,000

7,000

Common
stocks

203,739

84,262 116,443

3,034

2010/03/22

New
shares
issued

Common
stocks

291,300 272,800

57 people
Employee
including Kim
Gwangsik

2011/03/25

New
shares
issued

Common
stocks

220,000

5 people
Employee
including Sin
Junhyeon

2012/03/22

New
shares
issued

Common
stocks

6 people
Employee
including An
Dalgeun

2013/03/25

New
shares
issued

2014/03/28

New
shares
d

Nonexecutive

45 people
Employee
including
Gwon
Hyeokseong

148 people
including Gi
Hyeonju

Han
Seungho

Employee

Employee

2008/03/25

16,700

1,800

2,000

218,000

26,500

18,000

8,500

Common
stocks

19,000

2,500

16,500

Common
stocks

3,000

3,000

Period

2014.03.22 ~
2024.03.21
2013.03.25 ~
2023.03.24
2013.03.25 ~
2023.03.24
2013.03.25 ~
2023.03.24
2013.03.25 ~
2023.03.24
2013.03.25 ~
2023.03.24
2013.03.25 ~
2023.03.24
2013.03.25 ~
2023.03.24
2013.03.25 ~
2023.03.24
2015.03.25 ~
2025.03.24
2016.03.28 ~
2026.03.27
2016.03.28 ~
2026.03.27
2010.03.25 ~
2015.03.25

2012.03.22 ~

strike
price

19,139

16,933

16,933

16,933

16,933

16,933

16,933

16,933

16,933

17,350

11,436

11,436

5,671

11,185

2022.03.21

2013.03.25 ~
2023.03.24

2014.03.22 ~
2024.03.21

2015.03.25 ~
2025.03.24
2016.03.28 ~
2026.03.27

16,933

19,139

17,350

11,436

385

IX.

.
[ : 2014 12 31 ]

()

()

()

()

20.08

2.23

22.79

()

93.86

93.86

()

53.85

53.85

()

68.42

68.42

()

4.28

62.07

66.35

100.0
0
100.0
0
100.0
0
48.19

100.0
0
100.0
0
100.0
0
32.02
100.0
0
100.0
0
80.00
100.0
0
100.0
0

()

()

80.00

100.0
0
100.0
0
-

100.0
0
0.02

()
( )

0.02

99.96

.
( :

2014 12 31

( : , , %)

Celltrion
Pharma
()

2008 01
25

2009 08
05

1,899

6,675

1,000,000

(
()

100

803

1,000,000

100

803

352

-18

173,934

100

6,499

173,934

100

6,499

3,994

46

1,173,934

7,302

1,173,934

7,302

386

IX. Issues concerning subsidiary companies


A. Issues concerning subsidiary companies
[Date Due : 2014/12/31 ]
Investor
Series
Company

Seo Jeong Jin

Ltd. Celltrion

Ltd. Celltrion

Ltd.
Celltrion

Ltd.
Celltrion

Holdings

Health Care

Ltd.
Celltrion

Ltd.
Celltrion
Pharm

Mr. GS

Total

20.08

2.23

22.79

Ltd. Celltrion Holdings

93.86

93.86

Ltd. Celltrion Healthcare

53.85

53.85

Ltd. Mr. GS Celltrion

68.42

68.42

Co., Estee Celltrion

4.28

62.07

66.35

Celltrion Europe

100.00

100.00

Celltrion money

100.00

100.00

Celltrion example Jia bra

100.00

100.00

Celltrion Pharmaceutical

48.19

32.02

Ltd. Celltrion Chemical Laboratory

100.00

100.00

Celltrion Palm
yueseueyi
Hanskin

100.00

100.00

80.00

80.00

Dream e&m

100.00

100.00

0.02

99.96

Ltd. a subsidiary Celltrion Healthcare


(India)

0.02

100.00

Status concerning the investment of other entities


(Date Due: 2014/12/31

(Unit: KRW million, state, %)


Balance at
beginning of year

Initial

Increase
(decrease)

Investment

Company
name

Celltrion Pharm

The first
acquisition
objective
date

Qty

n Price

Owner
ship

Tenon Acquisition
(disposal)
Price Qty
Pric
e

Evaluati
Qty
on
Profits
and
losses

Financial
Statements

Owner
ship

Book
Value Total
assets

Net
Or loss

Business
2008/01/25

USA Inc
Ltd. Celltrion
Chemical

Acquisitio

Balance at end
of year

2009/08/05
Total

diversificati
Managemen
t

1,899 1,000,000

100

803

1,000,000

100

803

352

-18

6,675

100

6,499

173,934

100

6,499

3,994

46

7,302

1,173,934

173,934
1,173,934

7,302

387

X.
1.
.
2.
.
3.
.
4.
.
( : )

6,000,000

()

2012.3.20 ~ 2015.2.27

20,000,000

2014.4.18 ~ 2016.4.18

10,000,000

2014.4.18 ~ 2019.4.18

1,200,000

()

2014.6.9 ~ 2015.6.9

5.
.
6.
.

388

X. Contents of transactions between stakeholders


1. Credit offering concerning the shareholders
Not applicable
2. The assets acceptance and transferring of the shareholders
Not applicable
3. Contacts of the shareholders
Not applicable
4. Deals with the interests of stakeholders other than the major stakeholders
Historical guarantees received from related parties are as follows.
(Unit:KRW 000)
Providers

Price Guarantee

CEO
CEO

6,000,000 Ltd. Woori Bank


20,000,000 Korea Development
Bank
10,000,000 Korea Development
Bank
1,200,000 Ltd. Bank

Warranty

Warranty details

2012.3.20 ~ 2015.2.27

Debt Guarantees

2014.4.18 ~ 2016.4.18

Debt Guarantees

2014.4.18 ~ 2019.4.18

Debt Guarantees

2014.6.9 ~ 2015.6.9

Debt Guarantees

5. Other records concerning the acquisition of objective companies


No related issues.
6. Other issues
No related issues

389

XI.
1.

2.
< 1>
( : , )
(
)

9,383,235

550,026,630

9,383,235

550,026,630

390

XI. Necessary issues concerning protection of the


investors
1. Status of mortgage notes, secured notes and cheques Not applicable
2. Price difference status concerning Short-swing Trading
<Table 1>
Occurrence and restitution of Short-swing Trading (Period: 2011.01.01 ~ 2014.12.31)

Securities and Futures


Commission(Financial Supervisory
Service)

restitution

non- restitution

Amount

9,383,235

550,026,630

Total

9,383,235

550,026,630

391

< 2>

(: 2011.01.01 ~ 2014.12.31)
(: )

550

2011 03
02

550

2011 03
02 ~

2012 11
19

2012 11
19

560

10

55

( 3

( )

, 2
() ( 197 )

392

<Table 2>
Non-restitution of Short-swing Trading (Period: 2011.01.01 ~ 2014.12.31)
(Unit: KRW 1MN)
reporting
Relationship between date
the gains acquirer and
the company
Gain on
acquisition Current
Date

Executives

Executives

Executives
Total

March 2,
Retireme 2011
nt

Retireme
nt

Executive
s

reporting

onWhether
Restitution
amount
restitution Claim

amount

claim
measures

limitation Whether
Disclosure

amount
550

550

Restitution
Claim
plans

Disclosure at
March the first page
2, 2011 (http://www.celltri
-March on.com)
29,
2013 Disclosure at the
- first page
(http://www.celltr
ion.com)
Disclosure at
- the first page
(http://www.
celltrion.com)

560

10

550

The related shareholders, including the owners of non-stock securities or depository receipts. The legal
person should claim for restitution to the gains acquirer. If the requirements are not carried out within 2
months from the date the legal person claims, the shareholders have the right to put forward the request on
behalf of the company.(bill 197, the enforcement ordinance of Capital Market and Financial Investment
Business Act.)

393


( :

2014 12 31

( : )

2013 12 19

60,000

2014 04 18

10,000

: 150

: 150

450

450

- : 100

- : 100

3.
4.

394

3. Details of Private Equity


(Unit : KRW 1 MN)

(Expiration date : 12/ 31/ 2014)

Category
The first
Warrants with bond

Collection
date
12/19/2013

Payment
Amount
60,000

Reason for
Using funding plan

Actual funding Usage

Plant facility funds : 150

Plant facility funds : 150

Working capital :

Billion

450 Billion

difference
-

Working capital :450


Billion

The fourth
Warrants with
bond

04/18/2014

New plant construction


10,000
Funds spent
Construction
Contractors : 100 Billion

New plant construction


Funds spent-Construction
Contractors: 100 Billion

3. The status of transfer and change of the disclosures

No related issues.
4. The status of the overseas subsidiary companies
No related issues.

395

5.

14

(2014.03.28)

13

(2013.03.25)

1 : 14

2 :

3 :

4 :

5 :

6 :
1 : 13

2 :

3 :

4 :

5 :

6 :
1 : 12 ,


12

2 :

3 :

(2012.03.22)

4 :

5 :

6 :

396

5. Summary of the stockholders meeting


Shareholders'
Meeting Date

Agenda

The first bill : Approval of the 14th


The 14th Annual
General Meeting
of
Shareholders(2014
.03.28)

period financial statements


The second bill : Approval of some
changes in regulations
The third bill : Appointment of Director
The fourth bill : Approval of the
remuneration Directors
The fifth bill: Approval of the
remuneration Audit
The sixth bill : Endowment of stock
options

Resolutions
details

Remarks

- Approved
according to the
original bill
- Approved
according to the
original bill

- Approved
according to the
original bill
- Approved
according to the
original bill
- Approved
according to the
original bill
- Approved
according to the
original bill

The first bill : Approval of the 13th


The 13th Annual
General Meeting
of
Shareholders(2013
.03.25)

period financial statements


The second bill : Appointment of
Director
The third bill : Appointment of Audit
The fourth bill : Approval of the
remuneration Directors
The fifth bill : Approval of the
remuneration Audit
The sixth bill : Endowment of stock
options

The first bill : Approval of the 12th


The 12th Annual

period financial statements The

General Meeting

second bill : Approval of some

of

changes

Shareholders(2012

The third bill : Appointment of

.03.22)

Director
The fourth bill :Approval of the
remuneration Directors
The fifth bill : Approval of the
remuneration Audit
The sixth bill : Endowment of stock
options

- Approved
according to the
original bill
- Approved
according to the
original bill

- Approved
according to the
original bill
- Approved
according to the
original bill
- Approved
according to the
original bill
- Approved
according to the
original bill
- Approved
according to the
original bill
- Approved
according to the
original bill

- Approved
according to the
original bill
- Approved
according to the
original bill
- Approved
according to the
original bill
-Approved
according to the
original bill
397

6.
.
7.
(1)
.

50,000

1) ,
.
(2)
.
( : , USD)

KRW

9,000,000

8,984,923

KRW

3,000,000

997,571

KRW

4,000,000

4,000,000

(D/A)

USD

2,000,000

1,114,314

USD

177,200

USD

300,000

USD

400,000

132,498

KRW

3,000,000

1,738,296

KRW

2,000,000

2,000,000

(60 )

()

(1,630
USD 250,600)

KRW

50,000,000

50,000,000

KRW

20,000,000

20,000,000
(360 )

KRW

10,000,000

10,000,000

KRW

1,000,000

1,000,000

KRW

102,000,000

98,720,790

USD

2,877,200

1,246,812

()

(600 )


(300 )

(12 )

398

6. Status of financial
guarantees
Not applicable.
7. Other Contingent Liabilities and
Commitments
(1) Pending litigation
The company is the defendant in a lawsuit under trail. The details of the lawsuit are as follows.
Types of events

Litigation amounts plaintiff


50,000 thousand
won

Claims for Patent


infringement and

Competent court

Roche Diagnostics GmbH

Progress

The Seoul Central


District Court(

Before the first


trial verdict

prevention

Note1: The final judgment of the lawsuit mentioned above ca not be predicted by the end of the balance
sheet date. The effects brought by the final judgment will not be reflected in the annual financial statement.

(2) Financial institutions credit limit agreement

The details of the primary convenents of the companies and financial organization are as follows.
(Unit : One thousand won, USD)
Financial
Institutions

SME Bank

Category

Limited
commitments

Collateral
information

Spinning liquid

note receivable discount

KRW

9,000,000

8,984,923

General corporate loans

KRW

3,000,000

997,571

Rotating loan fund


company

KRW

4,000,000

Non-credit scheme(D/A)

USD

2,000,000

Foreign check collection

USD

177,200

Import letter of credit at


sight(

USD

300,000

Gihanbu import letters of


credit(

USD

400,000

132,498

General retail banking


loans

KRW

3,000,000

1,738,296

Driving general
corporate loans(

KRW

2,000,000

2,000,000

Woori Bank

Corporate Facility Loans

KRW

50,000,000

Business operating loans

KRW

20,000,000

KRW

10,000,000

Korea
Development
private enquity purchase
Bank
without bonds

(Week)National
Bank

Currency

Corporate general
working
capital
loans
Sum

KRW
KRW

1,000,000
102,000,000

4,000,000
real estate right to
1,114,314collateral security
- (1,630million and USD
250,600)
-

President Guarantee
(60 hundred million
won)

president payment
guarantee (600
50,000,000
hundred million won)
20,000,000President Guarantee
(360 hundred million
won)
10,000,000
President Guarantee
1,000,000(12 hundred million
won)

98,720,790
399

8.
.
9.
.
10.
.
11.
.

400

8. The status of sanction


No related issues.

9. Issues after the publication of the report


No related issues.
10. SmallBusinessCriteria reviewTable
No related issues.

11. Details concerning the


merger and acquisition
No related issues.

401


1.

2.

Confirmation of experts
1.

Confirmation of experts
No related issues.

2.

Stake with the experts


No related issues.

403