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Annual Report of Celltrion Holdings in 2012

From 1 January 2012


To
31 December 2012

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Contents
Audit Report................................................................ ................................. ........................1
External Audit Report.......................................................... ...................................................2
Consolidated Financial Statement............................................. ................................... ...........4
Notes to Consolidated Financial Statement..................... ........... ........... .......... .......................1

3
2012 01 01

2012 12 31

Celltrion Holdings and its Subsidiaries

Audit Report of Consolidated Financial Statement

The Third period

From Jan. 1st, 2012 to Dec. 31st, 2012

SamYoung Accounting Coporation

2013 03 22

2012 12 31
, ,
.

. 2011 12 31
2011 1 1
. 2012 12 31 74.72%
.
.

.
.

.

.

External Audit Report

To the Board of Directors and Shareholders


In Celltrion Holdings
March 22th , 2013

We have audited the consolidated financial statement of Celltrion Holdings Co, Ltd. and its subsidiaries. This
statement comprises consolidated balance sheets, consolidated income statements, consolidated statements of
owners equity, statements of cash flow, accounting policies and instructions as of 1st, Dec. 2012.
The management of the Company is responsible for the preparation of this financial statement. The auditors are
in charge of auditing the financial statement and giving the opinion on the financial statement based on their
audit.The contract information on the financial statement as of 31st.Dec.2011 and the financial statement of
1st,Jan. 2011 are out of audit. By the end of 2012, the investment in Celltrion Inc. and Celltrion Pharmceutical
accounts for 74.42% of the total assets. For information about the audit report of balance sheet, please refer to
other companies audits.
Our audit strictly follows the auditing standards generally accepted in the Republic of Korea. Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The audit is based on the figures and disclosures in the financial
statements. We audit the disclosures in financial report, along with the accounting principles and accounting
estimation that are suitable for managements preparation on financial report.


2012 12 31
.

111-13 2 6

(2013 03 22 ) .

.

We have audited the balance sheets, income statements, statements of changes in equity and cash flow
statements of Celltrion Holdings Inc. as of the year endings of 2012 and 2012, in accordance with Korean
Auditing Standards for general Korean Enterprises.

6th storey, building No.2, 111-13, Nonhyeon-dong, Gangnam-gu, Seoul


SamYoung Accounting Corporation
Legal Representative: Kim Duck Yi
This report is effective until the audit report day. Certain subsequent events or circumstances, which may occur
between the audit report date and the time of reading this report, could have a material impact on the
accompanying consolidated finical statements and notes . Accordingly, the readers of the audit report should
understand that there is a possibility that the above audit report may have to be revised to reflect the impact of
such subsequent events or circumstances, if any.

Consolidated Financial Statement


3 2012 12 31
2 2011 12
31 2 2011
01 01
( : )

I.
1.
2.
3.

3()

2()

2()

( ) ( )

99,223,647,149

51,748,394,776

35,711,812,427

4,5

45,908,672,121

430,832,075

2,096,383,615

4,6,30

29,965,534,867

24,274,363,000

23,950,385,000

579,299,000

28,025,800

41,614,100

21,153,371,282

26,722,351,410

9,459,912,731

1,616,769,879

292,822,491

163,516,981

381,321,305,299

263,289,567,338

212,892,505,313

4,7

4.

4,7,31

5.

II.
1.

4,9,31

13,990,652,000

13,300,673,023

12,748,500,632

2.

10,30

359,058,614,859

246,616,332,038

195,361,615,834

3.

4,11

761,703,469

4.

12,30

2,722,543,389

2,467,010,357

38,197,878

5.

13

875,272,131

887,711,920

4,058,891,319

4,14

153,520,000

17,840,000

685,299,650

3,758,999,451

6.

7.

15

1.

480,544,952,448

315,037,962,114

248,604,317,740

268,246,208,328

122,017,140,359

102,845,394,901

4,16,30,31

263,272,382,801

119,797,264,554

99,261,017,904

2.

4,17

489,429,485

3.

4,17

4,463,723,655

4.

18

II.
1.
2.

I.

2,219,875,805

20,672,387

165,000,000
3,419,376,997

99,716,640,539

95,890,020,617

57,418,081,243

4,16,30

67,643,839,075

71,821,522,581

36,872,785,740

22

32,072,801,464

24,068,498,036

20,545,295,503

367,962,848,867

217,907,160,976

160,263,476,144

I.

Consolidated Balance Sheet


The end of Third Period: Dec. 31st, 2012
The end of Second Period: Dec. 31st, 2011
The beginning of Second Period: Jan. 1st, 2011

Celltrion Holdings Co., Ltd. and its subsidiaries


Accounting Subject

Notes

(Unit: KRW)

The End of the Third


Accounting Period

Assets
I. Current Assets

The End of the Second


(Previous) Accounting
Period (undudited)

The Beginning of the


Second (Previous)
Accounting Period

51,748,394,776

35,711,812,427

4,5

99,223,647
149
45,908,672,121

430,832,075

2,096,383,615

2. Short-term financial
assets

4,6,30

29,965,534,867

24,274,363,000

23,950,385,000

3. Accounts Receivable

4,7

579,299,000

28,025,800

41,614,100

4,7,31

21,153,371,282

26,722,351,410

9,459,912,731

1,616,769,879

292,822,491

163,516,981

381,321,305,299

263,289,567,338

212,892,505,313

4,9,31

13,990,652,000

13,300,673,023

12,748,500,632

10,30

359,058,614,859

246,616,332,038

195,361,615,834

3. Other financial assets

4,11

761,703,469

4. Tangible assets

12,30

2,722,543,389

2,467,010,357

38,197,878

1. Cash and cash


equivalents

4. Other receivables
5. Other current assets
II. Non-current assets
1. Available-for-sale
financial assets
2. Investments

5. Intangible assets

13

875,272,131

887,711,920

4,058,891,319

6. Other long-term
receivables

4,14

153,520,000

17,840,000

685,299,650

3,758,999,451

480,544,952,448

315,037,962,114

248,604,317,740

I. Current Liabilities

268,246,208,328

122,017,140,359

102,845,394,901

1. Short-term financial 4,16,30,31


liabilities

263,272,382,801

119,797,264,554

99,261,017,904

7. Other non-current
assets

15

Total assets
Liabilities

2. Trade payables

4,17

489,429,485

165,000,000

3. Account payables

4,17

4,463,723,655

2,219,875,805

3,419,376,997

20,672,387

4,16,30

99,716,640,539
67,643,839,075

95,890,020,617
71,821,522,581

57,418,081,243
36,872,785,740

22

32,072,801,464

24,068,498,036

20,545,295,503

367,962,848,867

217,907,160,976

160,263,476,144

4. Other Current
Liabilities
II. Non-current
1. Long-term financial
liabilities
2. Deferred tax
liTotal
bilitiLiabilities

18

Equity
I. Shareholdings of the
Parent Company

10

1.

19

1,500,000,000

1,500,000,000

1,500,000,000

2.

19

44,927,001,287

44,927,001,287

44,927,001,287

3.

19

1,789,510,466

2,756,305,245

371,327,882

4.

19

(330,800,351)

(174,417,866)

25,254,707,502

5.

20

64,696,392,179

50,083,360,031

16,764,725,041

(1,961,447,559)

(476,920,116)

II.

112,582,103,581

97,130,801,138

88,340,841,596

480,544,952,448

315,037,962,114

248,604,317,740

11

1. Capital

19

1,500,000,000

1,500,000,000

1,500,000,000

2. Capital surplus

19

44,927,001,287

44,927,001,287

44,927,001,287

3. Other capital items

19

1,789,510,466

2,756,305,245

371,327,882

4. Accumulated other

19

(330,800,351)

(174,417,866)

25,254,707,502

5. Retained earnings

20

64,696,392,179

50,083,360,031

16,764,725,041

(1,961,447,559)

(476,920,116)

II. Non-controlling

Total

112,582,103,581

97,130,801,138

88,340,841,596

Total liabilities and

480,544,952,448

315,037,962,114

248,604,317,740

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

12


3 2012 01 01 2012 12
31 2 2011 01 01 2011
12 31
( : )

I.

23,31

II.

23,25,31

III.
IV.

24,25,28

V.

2()

3()

( )

38,690,324,085

33,900,743,135

5,075,331,914

1,464,270,620

33,614,992,171

32,436,472,515

2,522,194,673

2,613,249,439

31,092,797,498

29,823,223,076

VI.

26,31

178,175

980,909,756

VII.

26,31

749,299,772

3,057,702,733

VIII.

27,31

10,505,901,648

940,026,957

IX.

27,31

19,168,879,449

13,878,009,025

21,680,698,100

14,808,448,031

8,120,199,637

6,280,392,380

13,560,498,463

8,528,055,651

14,053,032,148

10,012,583,094

(492,533,685)

(1,484,527,443)

X.
XI.

22

XII.
1.

2.
XIII.

21
46,843

33,375

13

Consolidated Income Statement

The third Period: From Jan. 1st, 2012 to Dec. 31st, 2012
The second Period: From Jan. 1st, 2011 to Dec. 31st, 2011
Celltrion Holdings Co., Ltd. and its subsidiaries
Accounting Subject
Note

I. Revenue
II. Cost of goods sold

(Unit: KRW)
The Second (Previous) Accounting
Period unaudited)

23,31

38,690,324,085

33,900,743,135

23,25,31

5,075,331,914

1,464,270,620

33,614,992,171

32,436,472,515

2,522,194,673

2,613,249,439

31,092,797,498

29,823,223,076

III. Gross profit


IV. Selling and administrative

The Third (Current)


Accounting Period

24,25,28

V. Operating profit
VI. Other income

26,31

178,175

980,909,756

VII. Other costs

26,31

749,299,772

3,057,702,733

VIII. Financial income

27,31

10,505,901,648

940,026,957

IX. Financial expenses

27,31

19,168,879,449

13,878,009,025

21,680,698,100

14,808,448,031

8,120,199,637

6,280,392,380

13,560,498,463

8,528,055,651

14,053,032,148

10,012,583,094

(492,533,685)

(1,484,527,443)

46,843

33,375

X. Income before income taxes


XI. Income tax expense

22

XII. Net Income


1. Shareholdings of the
Parent Company
2. Non-controlling interests
XIII. Earnings per share for the
ownership of the Parent
Basic earnings per share

21

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

14


3 2012 01 01 2012 12
31 2 2011 01 01 2011
12 31
( : )

I.
II.

9,19,22
19

( )

13,560,498,463

8,528,055,651

(156,382,485)

(2,123,073,472)

962,275,860

1,183,089,180

(1,118,658,345)

(26,612,214,548)


III.

2()

3()

23,306,051,896

13,404,115,978

6,404,982,179

13,896,649,663

7,889,509,622

(492,533,685)

(1,484,527,443)

15

Consolidated Comprehensive Income Statement


The third Period: From Jan. 1st, 2012 to Dec. 31st, 2012
The second Period: From Jan. 1st, 2011 to Dec. 31st, 2011

Celltrion Holdings Co., Ltd. and its subsidiaries


Accounting Subject

Note

I. Net Income
II. Other comprehensive
income
Valuation gains on availablefor-sale financial assets
Other comprehensive income
related to enterprise equity
Interest in retained earnings
of the associates
III. Total net comprehensive
income
Shareholdings of the Parent
Compan
Non-controlling interests

9,19,22
19

(Unit: KRW)
The Third Current
Accounting Period

The Second (Previous) Accounting


Period (unaudited)

13,560,498,463

8,528,055,651

(156,382,485)

(2,123,073,472)

962,275,860

1,183,089,180

(1,118,658,345)

(26,612,214,548)
-

23,306,051,896

13,404,115,978

6,404,982,179

13,896,649,663

7,889,509,622

(492,533,685)

(1,484,527,443)

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

16


3 2012 01 01 2012 12
31 2 2011 01 01 2011
12 31
( : )

(476,920,116)

88,340,841,596

2 (2011.1.1)

44,927,001,28

1,500,000,000

371,327,882

( )

1,183,089,180

()

2 (2011.12.31)

1,500,000,000

( )

3 (2012.1.1)

1,500,000,000

()

44,927,001,28
7

44,927,001,28

2,756,305,24

(174,417,866)

(147,950,500

962,275,860

- (1,118,658,345)

8,528,055,651
1,183,089,180

(174,417,866)

(1,484,527,443

23,306,051,89

10,012,583,09

8)

2,384,977,36
3
2,756,305,24

(26,612,214,54

16,764,725,04

25,254,707,502

50,083,360,03

(1,961,447,559

50,083,360,03

(1,961,447,559

560,000,000

23,306,051,896

(26,612,214,548
)

2,384,977,363
97,130,801,138

97,130,801,138

1,961,447,559

2,373,497,059

(492,533,685)

13,560,498,463

962,275,860

- (1,118,658,345)

14,053,032,14
8

(326,310,594

(326,310,594)

492,533,685

)
(492,533,685
)

17

Consolidated Statement of Change in Equity


The third Period: From Jan. 1st, 2012 To Dec. 31st, 2012
The second Period: From Jan. 1st, 2011 To Dec. 31st, 2011
Celltrion Holdings Co., Ltd. and its subsidiaries
Accounting
Subject

(Unit: KRW)

Shareholdings of the Parent Company


Capital

Capital
Surplus

Accumulated
Other
Comprehensive
Income

Other Capital

The beginning of 1,500,000,000 44,927,001,287 371,327,882


the second
accounting
period
(2011.1.1)
(I didnt audit
the statement of
financial
-

NonControlling
Interests

Retained
Earnings

Total
Equity

16,764,725,04
25,254,707,502

(476,920,116) 88,340,841,596
1

10,012,583,09

Net Income
(Loss)

Valuation gains
on available-forl fi
i l

1,183,089,180

Interest in
retained earnings
of the associates
Other
comprehensive
income related to
enterprise equity

Conversion right

(1,484,527,443

8,528,055,651
4
-

)
1,183,089,180

23,306,051,89
- 23,306,051,896
6
(26,612,214,54
-

(26,612,214,548
-

8)

2,384,977,363
-

44,927,001,287
The end of the
1,500,000,000
second
accounting
period
(2011.12.31)
(I didnt audit
the statement of
financial
44,927,001,287
The beginning of 1,500,000,000
the third
accounting
period

2,756,305,245

2,384,977,363

50,083,360,03 (1,961,447,559
(174,417,866)

97,130,801,138
1

2,756,305,245

50,083,360,03 (1,961,447,559
(174,417,866)

97,130,801,138
1

(147,950,500)
Consolidation
scope changes

Net income
(loss)

Valuation gains
on available-forsale financial
Other
comprehensive
income related to

Conversion right

Increased
investment on
subsidiaries due
to fluctuation

560,000,000 1,961,447,559

2,373,497,059

14,053,032,14
-

(492,533,685) 13,560,498,463

962,275,860

8
-

(1,118,658,345)

- (1,118,658,345)

(326,310,594)

492,533,685

962,275,860

(326,310,594
)
(492,533,685
)

18

3 (2012.12.31)

1,500,000,000

44,927,001,28

1,789,510,46

(330,800,351)

64,696,392,17
9

112,582,103,58
1

19

44,927,001,287 1,789,510,46
The end of the third
accounting period
(2012.12.31)

1,500,000,00
0

(330,800,351)

64,696,392,1
7

112,582,103,58
-

1
9

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

20


3 2012 01 01 2012 12 31
2 2011 01 01 2011 12 31
( : )

3()

I. ( 29)
1.

( )

(6,841,137,602)
(6,841,137,602)

II.
1.

2()
(1,700,481,698)
(1,700,481,698)

(71,715,958,895)

(47,324,129,509)

33,768,864,493

16,977,850,309

884,679,697

933,423,453

2,305,371,700

1,679,753,850

7,850,000,000

22,728,813,096

9,576,356,374

600,000,000

3,316,632

4,185,000,000

2.

(105,484,823,388)

(64,301,979,818)

(9,000,000,000)

(1,343,500,000)

(16,589,171,786)

(27,035,951,552)

(786,380,560)

(17,279,856,164)

(500,000,000)

(5,000,000)

(61,138,151,710)

(32,938,191,610)

(508,854,952)

(2,460,636,656)

(7,790,000)

(18,700,000)

(174,618,216)


III.

124,034,936,543

47,359,059,667

1.

188,282,049,500

103,931,935,658

186,180,000,000

58,631,935,658

2,102,049,500

45,300,000,000
-

21

Consolidated Cash Flow


The third Period from Jan. 1st, 2012 To Dec. 31st, 2012,
The second period from Jan. 1st, 2011 to Dec. 31st, 2011
Celltrion Holdings Co., Ltd. and its subsidiaries
Accounting Subject

(Unit: KRW)

The Third (Current)


Accounting Period

I. Cash flows from operating activities


(Note 29)
1. Cash generated from operations

Accounting Period (unaudited)


(6,841,137,602)

(6,841,137,602)

II. Cash flows


1. Cash flows from investing activities

The Second (Previous)


(1,700,481,698)
(1,700,481,698)
(71,715,958,895)

(47,324,129,509)

33,768,864,493

16,977,850,309

Interest received

884,679,697

933,423,453

Dividend received

2,305,371,700

1,679,753,850

Decrease in short-term financial assets

7,850,000,000

Decrease in other receivables

22,728,813,096

9,576,356,374

Decrease in other long-term receivables

600,000,000

Decrease in available-for-sale financial


assets

3,316,632

Decrease in investments of related


parties
2. Cash outflows from investing activities

4,185,000,000

(105,484,823,388)

(64,301,979,818)

Increase in short-term financial assets

(9,000,000,000)

(1,343,500,000)

Increase in other receivables

(16,589,171,786)

(27,035,951,552)

(786,380,560)

Increase in available-for-sale financial


assets

(17,279,856,164)

(500,000,000)

Increase in held-to-maturity financial


assets

(5,000,000)

Increase in investments of associates

(61,138,151,710)

(32,938,191,610)

(508,854,952)

(2,460,636,656)

(7,790,000)

(18,700,000)

(174,618,216)

Other increases in financial assets

Acquisition of tangible assets


Acquisition of intangible assets
Cash decreased due to consolidation
scope changes
III. Cash flow from financing activities

124,034,936,543

47,359,059,667

1. Cash inflows from financing activities

188,282,049,500

103,931,935,658

Increase in short-term financial liabilities

186,180,000,000

58,631,935,658

Increase in long-term financial liabilities

45,300,000,000

2,102,049,500

Capital increase

22

2.

(64,247,112,957)

(56,572,875,991)

(13,773,280,277)

(9,477,186,983)

(50,473,832,680)

(47,095,689,008)

IV. ()
V.
VI.

45,477,840,046

(1,665,551,540)

430,832,075

2,096,383,615

45,908,672,121

430,832,075

23

2. Cash outflows from financing


activities

(64,247,112,957)

(56,572,875,991)

Payment of interest

(13,773,280,277)

(9,477,186,983)

Decrease in short-term financial


liabilities

(50,473,832,680)

(47,095,689,008)

IV. Increase (Decrease) in cash and


cash equivalents

45,477,840,046

(1,665,551,540)

V. Cash and cash equivalents of the


beginning of the period

430,832,075

2,096,383,615

45,908,672,121

430,832,075

VI. Cash and cash equivalents of the


end of the period

24


3 2012 1 1 2012 12
31 2 2011 1 1 2011
12 31

1.
( '') (
'') .
(1)
2010 11 25 .
, .
(2)
.
()

(%)

100

12

()
()

()(*)
()

(%)

100

12

47.62

12

(*) . ( 34 )
(3)
( : ).
()

()
()

()
8,776,220
894,305
7,881,915
4,037,200
(1,970,135)
(1,970,135)
25

Notes to the Consolidated Financial Statement

The third Period From Jan. 1st, 2012 To Dec. 31st, 2012
The second Period From Jan. 1st, 2011 To Dec. 31st, 2011

Celltrion Holdings Co., Ltd. and its subsidiaries

(Unit: KRW)

1. General Matters
The general matters of Celltrion Holdings Inc (abbreviated as the Company) and its subsidiaries and other related
enterprises are as follows:
(1) Overview of the Parent Company

Celltrion Holdings was established on November 25, 2010 after spinning off from Celltrion Healthcare. It is a
holding corporation, specializing in investment business. The Company is headquartered in Guwol-dong,
Namdong-gu, Incheon.
2The current situations of the subsidiaries of Celltrion Holdings
The situation as of the end of the reporting period, is as follow:
The current period

Subsidiaries

Shareholdings (%)

Dreame&m

100

Location

Settlement

Sector

Korea

December

My work program

The previous period

Subsidiaries
Celltrion Venture Capital(*)
Celltrion ST

Shareholdings (%)

Location

Settlement

Sector

100

Korea

December

My work program

47.62

Korea

December

System Integration
Services

(*) There was a company merger in the last period. Please refer to Note 34
3Overview of the Financial Information of the subsidiaries
The brief versions of balance sheet and the comprehensive income statement of the subsidiaries are as follow.
The current period
Subject
Assets
Liabilities
Equity
Revenue
Net income (loss)

(Unit: KRW 000)


Dreame&m.
8,776,220
894,305
7,881,915
4,037,200
(1,970,135)
26

Total comprehensive income (loss)

(1,970,135)

()

()

()

315,725

84,586,156

4,146,192

48,220,441

(3,830,466)

5,437,695

1,191,506

4,160,859

()

(2,834,149)

4,441,716

()

(2,834,149)

3,895,938

(4)

.

()

()

27

The last period


Accounting Subject
Assets

Celltrion ST

Celltrion Venture Capital

315,725

84,586,156

4,146,192

48,220,441

(3,830,466)

5,437,695

1,191,506

4,160,859

Net income (loss)

(2,834,149)

4,441,716

Total comprehensive income (loss)

(2,834,149)

3,895,938

Liabilities
Equity
Revenue

(4) The changes in the scope of the merged party


Subsidiaries recently included into the consolidated financial statement and the subsidiaries excluded from the
consolidated financial statement as of the end of the current period are as follow,
The company recently included in the consolidated financial statement in the current period
Company Name
Dreame&m

Reason
New investment

The companies excluded from the consolidated financial statement in the current period
Company Name
Celltrion ST

Reason
Loss of dominance as a result of the capital increase and
changes in shareholdings.

28

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2011 1 1 .
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29

(5) The changes in the scope of the merged party as a result of the transition to K-IFRS
According to the Note 2, the company started to prepare the consolidated financial statement in accordance with
the K-IFRS at the beginning of the current period. The transition date was Jan.1st, 2011. As a result, there are
some changes in the subsidiaries recording at the end and the beginning of the previous period, compared with
the recording based on the previous accounting standard. The changes are as follow

Division

Consolidate
d
subsidiaries

The end of the second accounting period (*1)


Korea International
Financial Reporting
Standards
Celltrion ST

The beginning of the second accounting period


(*2)
The previous accounting Korea International The previous accounting
standards
Financial Reporting
standards
Standards
Celltrion ST, Celltrion Celltrion DBI, Celltrion
Venture Capital
Venture Capital

(1*) According to the previous accounting standard, Celltrion ST is not listed as the audit object as the Act on
External Audit regulatesand it is not included in the subsidiaries within the consolidated financial statement.
But according to K-IFRS, the provisions above are not applicable. Celltrion ST should be included as the
subsidiaries within the consolidated financial statement. As a result, the previous financial statement is not
included into the consolidated statements beacaue of the lack of information of the subsidiaries. Therefore,
the current financial statement and renewed previous financial statements presented for comparison are
prepared in accordance with the K-IFRS
(*2) In accordance with the previous accounting standard, this company, meanwhile, the greatest
shareholder holds 31% stocks of CELLTRION DBI. Therefore, CELLTRION DBI is included in the consolidated
financial statement. However, according to K-IFRS, the company is incapable to take control over CELLTRION
DBI. A a result, CELLTRION DBI is not included in the consolidated financial statement.

30

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2. Preparation basis of the financial statement


(1) The application of accounting standard
The company has prepared the financial statement based on the accounting standard regulated by International
accounting standard committee in the provisions of Item 13, Article 1, No.1 of in Act on External Audit at the
beginning of the current period.
According to K-IFRS No.1101 the initial application, the conversion date to K-IFRS is Jan.1st, 2011. According
to K-IFRS, following items and further information should be listed in the note 33. The items include, accounting
policies of company that prepares financial statements in accordance with K-IFRS; and the effect of the financial
situation, financial performance and the cash flow as a result of the transition to K-IFRS.
Items on the consolidated financial statement, except for those major items on the listed balance sheets, are all
prepared with historical cost.
The derivatives measured at fair value.
The financial instruments which are measured at fair value and whose changes are recognized into current gain
(loss) .
- Derivatives are measured at fair value
- Financial assets measured at fair value through profit and loss of current period
- Available-for-sale financial instruments are measured at fair value

(2) Functional currency and quoted currency


The consolidated financial statement is prepared with the functional currency (A currency of the primary
economic environment in which the entity operates).
The financial statement is prepared and presented with the fuctional currency and quoted currency,
namely, Korean won as to the parent company, the subject of this report.
The preparation basement of financial statement
When the company prepares the consolidated financial statement, the transactions among currencies out of
functional currency are measured with the exchange rates on the exchange date. Foreign-currency assets and
liabilities are discounted according to the current exchange rate of the functional and presentation currency at
the end of the reporting period. The exchange differences are included gain (loss) in current period.

32

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(3) Estimates and judgement
K-IFRS requires that the management of the company should choose the most suitable accounting policies, and
the most suitable judgement standard to estimate and hypothesize the current assets, liabilities, income as well
as expenses at the end of the period .The result of related estimate and assumptions according to the most
suitable judgement might differ from the actual circumstances or actual results. The estimates and accounting
assumptions that might affect the book value of the assets and liabilities of the next fiscal year are as follows.

Income tax
The company should estimate the income tax that might be recognized in the future as of the end of the
current period. After reasonable estimation, income tax cost should be recognized as the current income tax
and deferred income tax. But the estimation might not be precise. The final tax effect caused by such
differences may influence the confirmation of assets and liabilities of deferred income tax when the final tax
effect is recognized.

The fair value of the financial instruments


The fair value of financial instruments that are not traded in an active market is confirmed by using the valuation
method in principle. As of the end of the reporting period, the consolidated company conducts judgments with a
variety of methods and assumptions based on currently critical market conditions.
The estimation and related assumptions are continued being assessed. The change of accounting estimation
is confirmed between change period and future influenced period.

(4) The confirmation date of financial statement


The consolidated financial statements of the company shall be confirmed on stockholders' meeting on March
29th, 2013

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35

3. Important Accounting Policies


The principal accounting policies applied in the financial statement according to K-IFRS are as follows. If not
specially noted, the accounting policy shall be consistently used in current period.

(1) Merger
The company prepares this consolidated financial statement in accordance with the explanation of the
corporation accounting standard, No.1027 consolidation and separate financial statement

The subsidiaries
The subsidiaries are all the companies (including companies with special purpose) that the holding company has
the power to decide their financial and operating policies. The holding company has more than 50% voting
power. Whether the executable or convertable potential voting power exist or not, at the report period is the
judgement standard of whether one company has control of the other company. At the same time, if the
companys voting power accounts for less than 50%, whether it has the actual control power or not should be
evaluated on its subsidiaries financial and operating policies.
The Company's subsidiaries are included in consolidated statements from the date when the company takes
charge of it, and it is excluded from consolidated statements, when the company loses control over it.
The initial measurement of the Company is accounted by the acquisition method. The valuable consideration is
the sum of the assets paid at the acquisition, equity instruments issued, and the fair value of the liabilities
incurred or acquired. The fair values of the assets and liabilities related to conditional payment contracts are
included in the valuable consideration. Identifiable assets, liabilities and contingent liabilities acquired in a
business combination are measured initially at their fair values at the acquisition date. The Company estimates
the minority shareholders equities according to the proportionate of net assets or the fair value. The minority
equities are measured at fair value if there are no special requirements. Acquisition-related costs are recognized
as current profits and loss in the event.
When the business combination is conducted step by step, the shares interests held in the previous case should
be re-measured at their fair value at the acquisition date, and the changes should be recognized as current
profit or loss.

36

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The contingent consideration paid by the Company is recognized at fair value at the acquisition date.
Subsequent changes in the fair value of the contingent consideration estimated at an asset or liability are
recognized as current profit and loss or as other comprehensive income according to IFRS 1039. Contingent
consideration classified as equity is not remeasured, and then be accounted within equity items in subsequent
calculation.
Goodwill is recognized when the total amount of non-controlling interest of investee and the fair value of
previously held equity of investee, exceeds the net identifiable assets. In addition, the difference amount is
recognized as current gain or loss if the previous consideration amount is lower than the fair value of acquired
subsidiaries net assets.

The inter-transactions and balances , revenues , expenses and unrealized gains should be offset between the
Parent company and the subsidiary company. Unrealised losses should be eliminated in advance taking into
consideration that whether it has caused loss to transferred assets. Accounting policies of associates should be
changed when necessary to ensure consistency with the accounting policies of the Parent Company.
the fluctuations of the shares of subsidiaries without change of control
The transactions with the minority shareholders that do not cause a loss of control should be accounted as the
capital transactions, which are the transactions between the majority shareholders and the controlling
shareholders. The difference between the fair value of the consideration and the book value of the net assets
of subsidiaries should be recognized as impairment loss. Gain or loss in disposal of the minority equity is also
recognized as equity items.
Disposal of subsidiaries
When the Company loses the control of the subsidiaries, the continuing held shares of the Company should be
remeasured at fair value at the same time, and the related difference should be recognized in current profit or
loss. This fair value is the book value on initial recognition of the subsequent measurements of associates,
jointly controlled companies or financial assets. In addition, the amount recognized in other comprehensive
income because of these subsidiaries should be accounted for in the same way when the Company deals with
the related assets and liabilities. Therefore, items that were recognized previous in other comprehensive
income should be reclassified in the current profit or loss.
Associated Enterprises
The associates are the enterprises that can be significantly influenced but not controlled by the Company.
Typically, 20% to 50% of the associates voting shares is held by the Company. The equity investments on
associates are initially recognized at acquisition cost and accounted for using the equity method. The
investments on associates include goodwill identified upon the acquisition, and should be displayed the net
amount after deducting impairment losses.
When the investments on associates decrease but the definition of associates is still satisfied, the amount that
was recognized in other comprehensive income previously should be reclassified as current profits and loss
according to the proportion of decrease.
The amount corresponding to the shares of the associate held by the Company should be recognized as
current profit and loss according to the proportion of shares, and changes in other comprehensive income of
the associates should be recognized as other comprehensive income of the Company. Cumulative postacquisition amount should be adjusted based on the book value of the investment company. The shares of the
Company is corresponding to the impairment loss of the associates. If the impairment loss equals to or exceeds
the investment amount including any other unsecured receivables, the Company wont recognize the related
impairment loss except for taking the obligations of the associates.

38

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39

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The unrealized profits from the transactions between the Company and its associates should be offset to the
extent of the share of the associate held by the Company.The unrealized loss should be dealt in the same way
when there is no impairment loss during the transfer of related assets. Accounting policies of associates should
be changed when necessary to ensure consistency with the accounting policies of the Company. Decrease of
equity ownership held by the Company should be recognized in current profit or loss if the Company still has
significant influence on the associates.
Cash held by the companydemand deposits, and investment assets that have a very high liquidity, Cash that
can be converted into determine amount, investment assets with low risk of fluctuation on value and has a due
date within three months are classified as cash and cash equivalents. Although the equity instruments are
excluded from cash and cash equivalents, the preferred stock with certain redemption date or the time period
between the acquision and expiration is short should be recognized in cash equivalents.

40

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41

2Cash and cash equivalent


Subsidiaries classifies financial assets as a cash and cashable assets in these cases: cash in possession,
demand deposits, easy to convert into cash with high liquidity, the risk of value change is small and the
maturity date is within 3 months from the acquisition date. Equity instrument is excluded from cashable assets.
However, equity instrument is included in cashable assets in three cases: it has repayment date, the repayment
date from the acquisition date is short, it is actually cashable assets like preferred share.

(3)Financial assets
1Classification
The financial assets of the Company are classified as financial assets that measured at fair value and changes
recognized in current profit or loss, available-for-sale financial assets, loans and receivables, and held-tomaturity financial assets depending on the acquisition purpose and nature of financial assets. The managers
determine the classification of these financial products at initial recognition.

Financial assets that measured at fair value and changes recognized in current profit or loss
Financial assets that measured at fair value and changes recognized in current profit or loss are financial
instruments held for short-term trading. The financial instruments acquired by the Company principally for the
purpose of selling in the short term are classified as held for trading financial assets. In addition, the derivatives
products separated from the embedded derivative financial instruments and non-target for hedge tools should
also be categorized as held for trading financial assets. Financial assets that measured at fair value and changes
recognized in current profit or loss are classified as current assets.
Loans and receivables
Loans and receivables are non-derivated financial assets with certain payment amount and exist in active
markets. The loans and receivables that exceed expire date more than 12 months are classified as non-current
assets, and others are classified as current assets. The loans and receivables of the Company are classified
as"cash and cash equivalents", "Short-term financial assets", "bonds issued", "Other receivables", "other longterm receivables" and "other financial assets" in the balance sheet.

Held-to-maturity financial assets

Held-to-maturity financial assets are non-derivated financial assets with certain payment amount and due to a
fixed date. The Company has the positive intent and ability to hold them to maturity. If the Company sell its
held-to-maturity financial assets over determine degree, the assets would be reclassified as available-for-sale
financial assets. The held-to-maturity financial assets that would expire within 12 months at the reporting period
are classified as current assets, and others are classified as non-current assets.
Available-for-sale financial assets
Available-for-sale financial assets are non-derivative financial assets that are designated as vailable-for-sale
financial assets or the financial assets that are not included in other categories. The available-for-sale financial
assets that would expire within 12 months at the reporting period are classified as current assets, and others
are classified as non-current assets.
2) Recognition and measurement

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The typical trading of financial assets is recognized on the trade date. All financial assets, except for financial
assets, which are measured at fair value and changes recognized in current profit or loss, are recognized at fair
value plus transaction costs on initial recognition. In the case of financial assets which measured at fair value
and changes recognized in current profit or loss, the transaction costs are recognized as expenses. 3) Removal
The available-for-sale financial assets and financial assets that measured at fair value and changes recognized
in current profit or loss shall be subsequently estimated at fair value. However, equity instruments that there is
no quoted market price in an active market and their fair value cannot be reliably measured should be
estimated with original price. Loans, receivables and held to maturity financial assets are estimated at amortized
cost applying the effective interest method.
The gain (loss) of the changes of fair value and interest income of the financial assets that measured at fair
value and changes recognized in current profit or loss should be recognized in "finance income" during the
current period. Net dividend of financial assets measured at fair value and changes recognized in current profit
or loss is recognized in "Finance income" on the income statement at the time when the related rights are
established for dividends.
The changes in the fair value of available-for-sale financial assets classified as monetary and non-monetary
securities are recognized in other comprehensive income. When the investment on available-for-sale financial
assets is disposed or impaired, the accumulated fair value adjustments recognized in equity amounts previously
are transferred in the income statement as "Finance income" or "Financial expenses".

The available-for-sale financial assets and held-to-maturity financial assets are calculated by applying the
effective interest and recognized in the income statement as a "finance income". The dividend of available-forsale financial assets is recognized in "Finance income" at the time when the related dividend rights are
recognized.

44

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3Offsetting
Financial assets and financial liabilities should be settled and recognized based on the net value when there is a
legally right to offset the financial assets and liabilities. At the same time, they can be offset and displayed in
the balance statement as net value if there is a positive intention to settle the related liability.
4) Remove
The recognition of financial assets should be removed when the right of getting the current flow incurred in
financial assets has disappeared or been transferred, and the majority of the rewards of the risk have been
transferred or the control of it has been lost even the related risks and rewars are not maintained or transferred.
(4) Impairment losses of financial assets
1Assets measured by the end amortizated balance
At the end of the reporting period, the company evaluates the objective evidence of whether the companys
financial asset and asset group is impaired. One or more events constitute objective evidence of
impairment losses ("loss events") occurred after the initial recognition of the companys financial asset or
asset group,and can reasonably speculate the influence of the future cash flow of financial assets, it should
confirm the relevant financial impairment loss.
Criteria applied to the objective evidences on the impairment of the company's financial assets are as
follows.
-Issuers or payment obligors of the financial assets have significant financial difficulties
-Interest payments or principal repayments have been overdue for three months or more
-Related debt covenants have been unfavorably changed for economic or legal reasons that associated with
the borrowers financial difficulties.
-The borrower has high possibility of bankruptcy or other debt restructuring.
-An active market no longer exists for the financial assets because of financial difficulties
-Although the expected decrease of future cash flow cant be recognized for an individual financial asset
included in a group of assets, the expected decrease of future cash flow can be recognized for the entire
group of assets after the initial recognition.
The borrowers payment capacity has worsened for the group of assets.
The economic situation of countries and regions that are unable to complete the oligation vested in the
group of assets or of other counterparts for the assets group.
The impairment loss is measured by the difference between book balance of the asset and the present value
of future cash flows discounted by effective interest rate (unconfirmed future losses not included).
Impairment loss is deducted from book value of the asset and recognized into current period profits and
losses. For financial assets measured by floating interest rate, the impairment loss is calculated using effective
interest rate set in the contract. The company can use observable market price as the fair value of financial
instruments and the impairment loss is measured on this basis.
If the amount of impairment loss is reduced in subsequent periods, and the reduction is objectively associated
with incidents which happened after the recognition of impairment losses (e.g. the debtor's credit rating rises)
then the impairment loss can be reversed and recognized as current period profits and losses.2

46

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47

2) Available-for-sale financial assets


If there is any objective evidence showing that an impairment loss has occurred for available-for-sale financial
assets, the accumulated loss measured by the difference between purchasing cost and current fair value should
be accounted into other comprehensive income (loss), and other parts should be reclassified from equity
accounts to current period profits and losses. Impairment loss of available-for-sale equity investments cannot be
reversed once its accounted into current profits and losses. However, if the fair value of available-for-sale debt
investments rises in subsequent periods and that increase is associated with previous recognized impairment
loss, then the impairment loss can be reversed and accounted into current profits and losses.

(5) Derivative financial instruments


The financial derivatives are initially recognized by fair value when signing the financial derivatives contracts,
and subsequently measured by fair value. The changes in the fair value of financial derivatives that does not
qualify as hedging instruments are recognized in the comprehensive income statement as other comprehensive
income (expense) or financial income (expense) depending on the nature of the transactions.
(6) Tangible assets
Tangible assets are measured by historical cost in initial recognition. Historical cost includes the costs directly
attributable to bringing the asset to the location and condition necessary for it to be capable of operating in
the manner intended by management and the initial estimate of the costs for dismantling, removing or
reconstructing the asset after natural disasters.
In subsequently measurement, fixed assets are measured by the balance between the original price
subtracts the accumulated amortization and accumulated impairment losses.
All assets except for land subtract the residual value at the acquisition cost, and will be amortized according
to the following useful lives using fixed-amount method (straight-line method) which best reflects the way
future economic bebefits are expected to be consumed.

Tha disposal income (losses) of tangible assets is measured by the difference between net disposal amount
and carrying amount.
Meanwhile, tangible assets are depreciated according to the following useful lives using fixed-amount method
(straight-line method).
Division

Training content

Building

40 years

Machinery

5 years

Fixtures

5 years

Improvement property of leased


fixed assets

2 years

At the end of each reporting period, the company will rediscuss the residual value, expected useful lives and
the depreciation method of assests. If the results of the discussion suggest changed be made, we will conduct
those changes in accounting estimates.

48

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7Intangible Assets
Intangible assets (except goodwill) are measured by historical cost in initial recognition. In subsequently
measurement, intangible assets (except goodwill) are measured by the original price subtracts the
accumulated amortization and accumulated impairment losses.
Intangible assets are amortized from the time they are ready for use on the basis of the original price
subtracting the residual value using reasonably estimated useful lives and straight-line method. Some
intangible assets have indefinite useful lives and therefore are not compliant with the above-mentioned rules.
Those assets are tested for impairment each year and are measured by the original price subtracts the
impairment loss.

Division

The estimated useful lives

Software

5 years

The useful lives and depreciation method of intangible assets with limited useful lives will be re-evaluated at
the end of each reporting period. For intangible assets with indefinite useful lives, the company with rediscuss
the indefiniteness of there useful lives. Any changes suggested by the result will be conducted as changes in
accounting estimates.
Subsequent expenses will be capitalized only when future economic benefits related to specific related assets
flow into the company. Internally created goodwill, trademark privileges and other costs will be expensed
when happened.
(8) Non-financial Assets impairment Losses
Goodwill and intangible assets with indefinite useful lives should be conducted with impairment test rather
than being amortized in each year. As the end of the current reporting period, amortized assets should be
conducted with impairment test when changes of the environment or events occur that could affect the
recoverable amount. The impairment loss is measured by the difference between the carrying amount exceeds
the recoverable amount.The recoverable amount is determined by the higher one of the net fair value and the
value in use.To conduct the impairment test, assets are classified by the minimal binding (cash generation
units) of identifiable independent cash flow. All non-financial assets except goodwill are tested the possibility
of reversing the impairment losses at the end of each reporting period.

50

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9Financial Labilities
According to the essence of the agreement and the definition of financial liabilities, financial liabilities are
classified as financial liabilities at fair value through profit or loss and other financial liabilities. Financial
liabilities are recognized in the balance sheet at the time when the company becomes the agreement
counterpart.
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss are classified as transactional financial liabilities and
financial liabilities designated at fair value through profit or loss. Financial liabilities at fair value through profit or
loss are measured by fair value after initial recognition and changes in fair value are accounted into current
profits and losses. Meanwhile, transaction fees related to initial recognition are accounted into current profits
and losses when happened.
Financial liabilities measured by amortized cost at the end of the reporting period
Transactional financial liabilities, financial guarantee contracts, and all the non-derivative financial liabilities
except for the financial liabilities incurred from the transfer of financial assets that is not qualified for
derecognition, are measured by cost deducting depreciation and classified as financial liabilities. In the
financial statements, they are presented as the "Short-term financial liabilities", "Long-term financial liabilities"
and "Other debt payable".
If the current obligations of financial liabilities are removed, canceled, expired or the terms of an existing
financial liability is substantially changed, then the financial liability would be removed and derecognized in the
financial statement.
Borrowings are initially recognized by fair value subtracts transaction costs, and are subsequently measured
by amortized cost at the end of each period. After deducting transaction costs, the difference between
actually received amount and the repayment amount is recognized as interest cost in the income statement
using effective interest rate during the loan term. At the end of the reporting period, if the company doesnt
possess the right to extend the loan for more than 12 months, then the loan should be classified as current
liabilities.
Preferred shares that are mandatory to be redeemed on a particular date are classified as liabilities.
The interest expenses generated from those preferred shares are recognized as Financial expenses in the
income statement.

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10Financial guarantee contracts


Financial guarantee contracts require the guarantor to pay for the losses in advance when a certain debtor
cannot make the repayment on redemption date and contribute to creditors losses in accordance with the
original or revised terms of the debt instrument.
Financial guarantee contracts are measured by fair value initially and are subsequently measured by the
higher one of the following two amounts that are recognized as the "short-term financial liabilities" and "longterm financial liabilities".
-The amount is determined according to K-IFRS No. 1037: Provisions, Contingent Liabilities and Contingent
Assets.
-The initially recognized amount deducts the accumulated amortized amount that is recognized according to
K-IFRS No.1018 Revenue.
(11) Compound Financial Instruments
Compound financial instruments issued by the company are classified into financial liabilities and equity
accounts according to the essence of the agreement. Compound financial instruments issued by the company
are the convertible bonds that can be converted into equity by the choice of the holder, and the convertible
shares cannot be changed with the change of fair value.
The liability component of that compound financial instrument is initially recognized by fair value of a financial
liability with no conversion rights and subsequently measured by end-of-period amortized cost to the
conversion date or the maturity date.The equity component is initially recognized as the difference between
the fair value of the convertible bonds and the fair value of the liability component, without remeasurement
later. Direct trade expenses are distributed in proportion of the book value of liability and equity components.
(12) Employee compensation

Short-term employee compensation


The short-term employee compensation that should be paid within 12 months after the end of reporting
period in which the employees render the related service are recognized as current period profits and losses
at the time point when the services are provided. Short-term employee compensation is not discounted in the
recognition.
Retirement benefits: defined contribution plan
In a defined contribution plan, the contributions payed in return for the services provided by the employees
during a certain amount of time should be accounted into current profits and losses except for those included
in the cost of the assets. The difference between payable amount and paid amount (unpaid amount) is
recognized as liability. Meanwhile, if the paid amount exceeds the payable amount for prior rendered service
by the end of the reporting period, the balance should be recognized as an asset (advanced payment) to
offset future payments.
(13) Provisions
A provision should be recognised when an entity has a present obligation as a result of a past event and it is
probable that an outflow of resources embodying economic benefits will be required to settle the obligation and
a reliable estimate can be made of the amount of the obligation. Future operating loss should not be recognized
as provisions.

54

,

.
(14)
.
,
.
, .

55

Contingent liabilities are measured by the present value of the expected payments required to settle the
obligation. The discount rate should be the pre-tax interest rate reflecting the inherent risks of liabilities and
the time value of money in the current market. The increase in book value with the passage of time is
recognized as interest expenses.
(14) Paid-in capital
Common shares are recognized as equity account, and the redeemable preference shares are recognized as
liabilities.
When the company acquires the common stocks from their subsidiary companies, the payment consideration,
including the transaction cost, should be deducted from capital until those common stocks are cancelled or
reissued. When those stocks are reissued, the consideration gained should be recognized as the capital, which
belongs to the companys shareholders.

56

(15)

.
,
,
. ,
.

.
, ,

.


,
.

.
,
. .

57

15Revenue recognition
Revenue refers to the interest income gained in recurring operating activities of the company, as well as the fair
value of the received or to be received considerations from sales and services.
Only when the revenue of the company can be measured reliably, the future economic benefits are probably
flowing into the company, and the following conditional features of the companys activities are satisfied can the
revenue be recognized. The judgements are based on historical data including the types of customers, the types
of transactions, and the individual transaction terms.
Sales
The revenue related to sales should be recognized at the time point when the products were transferred to
the buyers. The transfer can be compeleted only when the products have arrived at aimed places, the risk of
discard loss has been transferred, and the buyers claim the products according to the purchases and sales
contract or the confirmation period expires or the consolidated company satisfies the objective conditions of
claiming those products.
Labour services
The revenue of providing services can be recognized only when the related payment can be measured reliably.
If not, the revenue can only be recognized within the part with high possibility of recovering the costs to the
extent of the expenses spent.
Interest income
The interest income should be recognized using the effective annual interest rate over the passage of time.
When the bond suffers impairment losses, the amortized amount should be adjusted to the recoverable
amount. The increased book value over time should be recognized as interest income. Interest income of the
bond after impairment loss is measured using the initial effective annual interest rate.

58

(16)
,
.

.

.
.


. ,

.

, .
,
. ,
,
.

,
. ,
,
.
,

.


.
.
,

.

.
59

16Income tax
Income tax expense consists of current income tax and deferred income tax. The income tax related to other
comprehensive income or equity will be recognized directly in such related accounts, while others will be
accounted into current profits and losses.
Current income tax
Current income tax is measured based on the current taxable income. Taxable income is the pretax income in
the other comprehensive income sheet deducting the amount of other losses and profits during this period,
non-taxable items or non-recognizable losses; therefore, it differs from the pretax income in the other
comprehensive income sheet. Companys unpaid income tax relevant to current period income tax is measured
by affirmed amount or effective tax rate.
Deferred income tax
The measurement of deferred tax liabilities and deferred tax assets shall reflect the tax consequences that
would follow from the manner in which the entity expects, at the end of the reporting period, to recover or
settle the carrying amount of its assets and liabilities. Therefore, the deferred income tax assets and liabilities
related to investment property are measured by the tax consequence of selling and recovering.
Deferred income tax is recognized base on the difference between book value and tax basis of assets or
liabilities, and it can be confirmed by balance sheet approach. Deferred income tax liability recognizes all the
temporary taxable differences while deferred income tax assets are recognized only when deductable temporary
differences occurred have high possibilities to be reversed to the extent that sufficient taxable income is
available. There is no need to recognize deferred income tax as for the temporary difference caused by goodwill
as well as initial recognition of an asset or liability (other than those happened in business combinations) which
doesnt affect current accounting earnings or income tax.
The taxable temporary differences related to investements in associates and joint ventures are recognized as
deferred income tax liabilities except that the taxable temporary differences are not expected to be reversed in
the future. On the other hand, the deductible temporary differences will be recoginized as deffered income tax
assets if there is high possibility that future deductable temporary differences will be reversed.
The book value of deferred income tax assets should be teasted at the end of each reporting period. The book
value of deferred income tax assets should be deducted when the related benefits are unlikely to be realized.
Deferred tax assets and liabilities shall be measured at the tax rates that are expected to apply to the period
when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or
substantively enacted by the end of the reporting period. Deferred income tax assets and liabilities reflect the
tax consequences by the way the book value of relevant assets and liabilities are recoved or settled at the end
of the reporting period.
Deferred income tax assets and liabilities represent the legal right of the company to recognize the amortized
amount related to the income tax imposed by the corresponding tax administration. They can only be amortized
when the company has the intention to offset the income tax liabilities and assets.
If there are supplemental income tax expenses related to dividend payout, then the payment should be
recognized at the time point when relevant liabilities are confirmed.

60

(17)
2012 1 1
.
.
1110 ''

. 2013 1 1
. .
1111 ''
, .
,
()
. , ,
,
. 2013 1 1
.
.
1112 ' '
, ,
.
,
. 2013 1 1
.
.
1019 ' '
, ()
()
. , ()
. 2013 1 1 .

.
1113 ' '

. 2013 1 1
.
.

61

(17) The revised accounting standards that are not yet applied
The accounting standards that are published but have not been implemented formally during the accounting
period starting from 1st January 2012 are as follows. Those revised accounting standards are not applicable to
the companys financial statement.
NO.1110 article of the corporation accounting standard: The consolidated financial statement
This standard defines the control principle, and applies it to the enterprises included in the consolidated financial
statement. This standard is planned to be implemented from the accounting year which starts from 1st January
2013. The company is discussing how the above revised accounting standard will influence the financial
statement.
NO.1111 article of the corporation accounting standard: Joint arrangements
The joint arrangements include jointly controlled operations and jointly controlled entities. Joint arrangements
refer to the contract in which parties owning interest in joint ventures receive rights and obligations about joint
venture assets and liabilities. Joint operators recognize self-relevant shares, assets and expenses of specific
assets, liabilities, earnings and expenses in accordance with K-IFRS. The cooperative enterprise participants
recognize and measure the invested assets using the equity method. This standard takes effect since the
accounting year starting from 1st January 2013. The company expects that the above revised accounting
standard have no significant effect on the financial statement.
NO.1112 article of the corporation accounting standard: Disclosure on related parties
This standard formulated regulation on the disclosure items of subsidiaries, associates, joint ventures and other
non-consolidated business groups. This standard requires the disclosure of the nature of equity investments in
related parties and relevant risks desired by the users of financial statements, as well as the effect on the
companys financial position, financial results and cash flow. This standard comes into effect from the accounting
year beginning at 1st January 2013. Company is discussing how the above revised accounting standard will
influence its financial statement.
NO.1019 article of the corporation accounting standard: Employee Compensation
The changes (profits and losses of insurance accepted) of post-employment welfare obligaitons caused by
salary growth rate, interest rate and so on, can be recognized as the current period or deferred according to the
unrevised accounting standard, but can only be recognized in the current period according to the revised
accounting standard. Meanwhile, this standard requires to use blue-chip companies bond yields to calculate the
net interest income (expenses) of external assets accumulative amount. This standard takes into effect since
the accounting year starting from 1st January 2013. Company predicts that the above revised accounting
standard has no effect on its financial statement.
NO.1113 article of the corporation accounting standard: the fair value measurement
This standard unifies the separate relevant regulations of fair value measurement, and regulates the specific
contents of fair value measurement. This standard takes into effect from the accounting year beginning at 1st
January 2013. Company is discussing how the above revised accounting standard will influence its financial
statement.

62

1001 '
" " "
"
. 2012 7 1 .

.
4.
(1)
(, ),
.

.
,
.
1)

,
. USD .
.

.
(:USD, ).

USD

( )

( )

USD

241

258

USD

USD


1,126.88

1,071.10

63

NO.1001 article of the corporation accounting standard: The financial statement


Other comprehensive incomes are classified into other comprehensive income that wont be reclassified as
current losses and profits in the subsequent measurement and other comprehensive income that can be
reclassified as current losses and profits in the subsequent measurement. This standard takes into effect since
the accounting year beginning at 1st July 2012. Company predicts that the above revised accounting standard
has no effect on its financial statement.
4. Financial risk management
(1). Financial risk management elements
The company is facing market risks (price risk, cash flow rick, interest rate risk of fair value), credit risk, liquidity
risk and other financial risks due to various activities. The overall risk management policies of the company
focuses on unpredictability of financial markets as well as minimizing the effects that can be potentially
detrimental to the financial performance.
Risk management is about some activities including formulation of risk management policies, recognition and
assessment of financial risk, hedging and so on, which is approved by the Board of Directors.
1) Market risk
Foreign exchange risk
The Company is exposed to foreign exchange risk because of sales, purchase and borrowing that are presented
in a currency other than the functional currency (KRW). Those reansactions are mainly presented in US dollars.
Managers are supposed to formulate management policies, which aims at managing foreign exchange risk of
each functional currency.
Foreign exchange risk is supposed to be managed and controlled except for those caused by the affirmative
assets and liabilities in forward exchange transactions between the company and its subsidiaries
Foreign exchange risk is supposed to be managed and controlled except for those caused by the affirmative
assets and liabilities in forward exchange transactions between the company and its subsidiaries

Foreign exchange risks of the company are as follows: (Unit: USD, KRW 000)

Divis
ion

The end of the


current
accounting period
USD

Accounts receivable

The end of the


previous accounting
period (unaudited)
KRW

241

USD
258

The beginning of the


previous accounting
period (unaudited)

KRW
-

USD
-

KRW
-

Exchange rates of current period are as follows


Divisi
on
USD

Average exchange rate

Ending Currency
1,126.88

1,071.10

64

.
10% (:
).

10%

10%

USD

26

(26)



.
.
.

. 30%
(: ).

2011

2012
30%

30%
-

30%
-

2011

2012

( )

30%
-

30%
-

150,000

( )

30%
(150,000)

30%
313,112

30%
(313,112)

65

The company regularly measures the risk of exchange rate fluctuate internally. As of the end of the reporting
period, the influence on current profits and losses are as follows when the rate of change (foreign currency to
KRW) reaches up to 10%. (KRW 000)

The current accounting period

Divisi
on
USD

10% Increase

10% Decrease
26

(26)

Price risk
The company is exposed to price risk due to equity investments that are classified as available-for-sale
financial assets. To manage the price risks arising from the equity investments, the company invested in
portfolios to diversify risks in accordance with the rules. Portfolio is determined by the company.
The shares held by the company are all recognized as non-listed shares that are not traded in the open market.
The rises and falls on stock price would influence income after tax and equity, the influences are as follows.
Here we analyze the influence when the unlisted stock price increases or decreases by 30%.

Impact on net profit


Index

Impacet on
the capital

2011

2012

2011
(unaudited)

2012

(unaudited)
30%
Unlisted
shares

30% Drop
-

30%

30% Drop
-

30%
150,00
0

30% Drop
(150,00
0)

30%
313,11
2

30% Drop
(313,11
2)

66


.

.
(
: ).

( )

( )

:
2,500,000

1,385,000

41,500

231,137,222

139,927,787

79,848,804

233,637,222

141,312,787

79,890,304

99,779,000

51,691,000

56,285,000

99,779,000

51,691,000

56,285,000


. 0.5%
(: ).

0.5%

( )

498,895

0.5%
(498,895)

0.5%
258,455

0.5%
(258,455)

. ,
, .
.
.
.

67

Interest rate risk


The interest rate risk of cash flows was generated from borrowings. Borrowings were based on floating
interest rate; therefore the company may be faced with interest rate risk. At the meantime, cash and cash
equivalents could offset a part of the risk generated from floating interest rate, as the cash and cash
equivalents could be measured by the floating interest rate.
As of the end of the reporting period, the book value of interest-bearing financial instruments of the
consolidated company are as follows: (Unit: KRW 000)
Until the end of
the current
accounting period

Division

The end of the previous


accounting period
(unaudited)

The beginning of the


previous accounting
period (unaudited)

Fixed interest rate:


Short-term financial assets

2,500,000

1,385,000

41,500

Financial liabilities

231,137,222

139,927,787

79,848,804

Total

233,637,222

141,312,787

79,890,304

Interest rate changes:


Financial liabilities

99,779,000

51,691,000

56,285,000

Total

99,779,000

51,691,000

56,285,000

The company is exposed to interest rate risk because it finances through some floating rate debts. When the
interest rate of the current accounting period and the previous accounting period changes by 0.5%, the
influences on profits and losses are as follows: (Unit: KRW 000)
The current accounting
period
Divisi
on
Interest expense

0.5% Increase
498,895

The previous accounting period


(unaudited)
0.5% Drop
(498,895)

0.5% Increase
258,455

0.5% Drop
(258,455)

The company has conducted a comprehensive analysis of the exposure to the interest rates. Conversion, issue,
exhibition of existing debts, general financing, and risk avoidance were brought into the analytical framework.
The company would define interest rate fluctuations according to the analytical framework and measure its
influence on profit and loss. The changes on interest rates would be applicable to different kinds of currencies
when facing different situations. It mainly reflects the influence on interest-bearing liabilities.

68

2)

.
,
.
.
.
(: ).

( )

( )

27,465,535

22,889,363

23,908,885

27,465,535

22,889,363

23,908,885

13,990,652

13,300,673

12,748,501

500,000

1,043,708

2,003,317

13,490,652

12,256,965

10,745,184

71,056,565

28,584,049

12,324,711

45,908,672

430,832

2,096,384

2,500,000

1,385,000

41,500

579,299

28,026

41,614

21,153,371

26,722,351

9,459,913

761,703

153,520

17,840

685,300

112,512,752

64,774,085

48,982,097


(: ).

( )

( )

11,827,147

24,140,000

7,594,857

59,229,419

4,444,049

4,729,853

71,056,566

28,584,049

12,324,710

69

2) Credit risk

Credit risk is the risk that one party to a financial instrument will cause a loss for the other party by failing to
pay for its obligation. Cash and cash equivalents, derivatives and deposits might have credit risks, apart from
accounts receivables and confirmed contracts. The company saves the majority deposits in Woori Bank and
similar renowned commercial banks; therefor the credit risk is limited.
The book value of financial assets represents its maximum credit risk. As of the end of the reporting period, the
maximum credit risks of various divisions of financial assets are as follows: (Unit: KRW 000)
Division

Until The Current


Accounting Period

The end of the


previous accounting
period (unaudited)

The beginning of
the previous
accounting period
(unaudited)

The current accounting period

27,465,535

22,889,363

23,908,885

Short-term financial assets

27,465,535

22,889,363

23,908,885

Available-for-sale financial assets

13,990,652

13,300,673

12,748,501

500,000

1,043,708

2,003,317

Convertible bonds

13,490,652

12,256,965

10,745,184

Loans and receivables

71,056,565

28,584,049

12,324,711

Cash and cash equivalents

45,908,672

430,832

2,096,384

Short-term financial assets

2,500,000

1,385,000

41,500

579,299

28,026

41,614

21,153,371

26,722,351

9,459,913

Other financial assets

761,703

Other long-term receivables

153,520

17,840

685,300

112,512,752

64,774,085

48,982,097

Equity securities

Accounts Receivable
Other receivables

Total

As of the end of the reporting period, the maximum credit risks of some debts, such as outstanding creditors
rights and borrowings are as follow, they are itemized based on types of transaction objects. (Unit: KRW 000)

Division

Until The Current


Accounting Period

The end of the


previous accounting
period (unaudited)

The beginning of the


previous accounting
period (unaudited)

Related party loans

11,827,147

24,140,000

7,594,857

Other accounts

59,229,419

4,444,049

4,729,853

Total

71,056,566

28,584,049

12,324,710

70


(: ).

( )

( )

52,229,581

25,793,351

4,915,514

6 ~1

13,694,578

(59,679)

1,084,952

(3,092)

1,237,054

(90,288)

6,402,561

(1,210,475)

2,372,653

(663,815)

7,005,173

(742,744)

72,326,720

(1,270,154)

29,250,956

(666,907)

13,157,741

(833,032)

3)

.
, ,
.
,
.
(: ) .
.
, (: ).

2012.12.31

6-12

1-2

2-5

253,297,383

259,273,202

169,241,791

90,031,411

9,000,000

9,645,975

4,894,763

4,751,212

975,000

975,000

975,000

6,000,000

6,240,200

6,240,200

61,643,839

82,542,928

876,000

19,851,936

1,752,000

60,062,992

489,429

489,429

489,429

4,463,724

4,463,724

4,463,724

335,869,375

363,630,458

175,987,554

119,587,712

7,992,200

60,062,992

71

As of the end of the reporting period, the rest fixed numbers of years and bond balances of some debts such as
outstanding creditors rights and borrowings are as follows:

Until the current


accounting period
Divis
ion

Less than 6 months

Balance of
accounts
receivable
52,229,581

6 months to 1 year

13,694,578

More than 1 year

6,402,561

Total

72,326,720

(Unit: KRW 000)


The beginning of the
previous accounting
period (unaudited)

The end of the


previous accounting
period (unaudited)
Damaged
amount
(59,67
9)
(1,210,47
5)
(1,270,15
4)

Balance of
accounts
receivable
25,793,35
1
1,084,95
2
2,372,65

3
29,250,95
6

Damaged
amount

Balance of
accounts
receivable
4,915,51
4

(3,092
(663,815)
)
(666,907
)

1,237,05
4
7,005,17

3
13,157,74
1

Damaged
amount
(90,288
(742,744)
)
(833,032
)

3) Liquidity risk
Liquidity risk is the risk that an entity will have difficulties in paying its financial liabilities. The corporation
management of liquidity include: the management of the loss when have difficulity in paying for the liabilities or
keepping enough liquity before the date of paying liabilities.
The company controls the cash flow through mid-to-long term business plans and short-term business
strategies, and holds enough cash to maintain general operation. Here potential influences that are from
unpredictable situations are not included.
As of the end of the current and previous reporting period, the maturity conditions of financial liabilities are as
follows. Relevant amount includes interest; effects of contract offset are not included. (Unit: KRW 000)
Book value
2012.12.31

Contractua
l cash flow

Less than 6
months

6-12 months 1-2 years

2-5 years

Financial liabilities measured at amortized cost


Short-term borrowings

253,297, 259,273,20
383
2

169,241,79
1

90,031,41
1

Long-term current liabilities

9,000,
000

9,645,97
5

4,894,76
3

4,751,21
2

Financial guarantee liabilities

975,
000
6,000,
000

975,00
0
6,240,20
0

975,00
0
-

6,240,20
0

61,643,
839

82,542,92
8

876,00
0

19,851,93
6

1,752,00
0

60,062,99
2

489,
429
4,463,

489,42
9
4,463,72

489,42
9
4,463,72

7,992,20
0

60,062,99
2

Long-term borrowings
Redeemable convertible
precedence shares and
convertible bonds
Accounts payable
Other liabilities payments
Total

724
4
335,869, 363,630,45
375
8

175,987,55
4

4
119,587,71
2

72

2011.12.31 (

6-12

1-2

2-5

)

104,797,265

107,709,596

83,030,771

24,678,825

15,000,000

16,433,176

11,394,863

5,038,313

15,000,000

15,886,175

9,645,975

6,240,200

56,821,523

84,294,929

876,000

876,000

20,727,936

61,814,993

2,219,876

2,219,876

2,219,876

193,838,664

226,543,752

95,301,634

32,813,014

30,373,911

68,055,193

,
.
(2)

,
.
(: ).

( )

( )

367,962,849

217,907,161

160,263,476

45,908,672

430,832

2,096,384

322,054,177

217,476,329

158,167,092

112,582,104

97,130,801

88,340,842

112,582,104

97,130,801

88,340,842

224%

179%

286%

73

2011.12.31
(unaudited)

Less than 6 6-12 months


months

Contractual
Book value cash flow

1-2 years

2-5 years

Financial liabilities measured at amortized cost


Short-term borrowings

104,797,26
5

107,709,59
6

83,030,77
1

24,678,82
5

long-term current
liabilities
Long-term borrowings

15,000,00
0
15,000,00
0

16,433,17
6
15,886,17
5

11,394,86
3
-

5,038,31
3
-

9,645,97
5

6,240,20
0

56,821,52
3

84,294,92
9

876,00
0

876,00
0

20,727,93
6

61,814,99
3

2,219,87

2,219,87

2,219,87

193,838,66

226,543,75

95,301,63

32,813,01

30,373,91

68,055,19

Redeemable convertible
precedence shares and
convertible bonds
Other liabilities payments
Tota

The company does not expect this cash flow to generate too early, nor expects it to cause significant change in
amount.
(2)Capital Risk Management
The company has reached and maintained a sound capital structure by capital management, and the optimal
capital structure has been reached with the aim of maximizing the interests of shareholders. So the company
adjusts the debt ratio and net debt-to-equity ratio to carry out the improved project of capital structure
optimization.
The debt ratio in the end of the current and previous reporting period and the
beginning of previous reporting period is as follows (Unit: KRW 000)
Divisi
on

Total liabilities

Until the
current
accounting
period

The end of the


previous accounting
period (unaudited)

The beginning of the


previous accounting
period (unaudited)

367,962,849

217,907,161

160,263,476

45,908,672

430,832

2,096,384

Adjusted liabilities

322,054,177

217,476,329

158,167,092

Total equity

112,582,104

97,130,801

88,340,842

112,582,104

97,130,801

88,340,842

286%

224%

179%

Less: cash and cash equivalents

Capital adjustment related to cash flow


hedge
Adjusted equity
Adjusted liability-to-equity ratio

74

(3)
.
.
- ( ) ( 1)
- (: ) (: ) ,
. 1 ( 2)
- , (
) ( 3)

1) (:
).

( )

( )

- 27,465,535

- 22,889,363

- 23,908,885

- 13,490,652

- 27,465,535

13,490,652

- 12,256,965

- 22,889,363

12,256,965

- 10,740,184

- 23,908,885

10,740,184


. , , , ,
,
, .
. 1 . 1
KOSPI , KOSDAQ
.
(: )
.
. ,
2 .

3 .
.
-
-

75

(2) Fair value measurement


The financial instruments measured at fair value are assessed by the valuation techniques provided in the table
below. The related defined criterions are as follows.
-The quoted price (unadjusted) in active market for identical assets or liabilities
(Standard 1)
-The input variable (Standard 2), of directly (e.g. prices), or indirectly (e.g. factors other than price) observable
asset, or liability excluding the quoted price in standard 1.
- The inputs for the assets or liabilities that are not based on observable market data. (Unobservable input
variable) (Standard 3)
1) As the end of current period, the details of financial assets and financial liabilities assessed by fair value
are as follows. (Unit: KRW 000)
Until the current
accounting period
Divi
sion

Level 1

Level 2

The end of the


previous
acconuting period
Level 3
Level 1
Level 2

The beginning of
the previous
accounting period
Level 3
Level 1
Level 2

Level 3

Financial assets:
Financial assets at fair value through profit or loss
Derivatives

27,465,5

22,889,3

23,908,8

Available-for-sale financial assets:


Convertible
bonds
Total

27,465,5

13,490,6
52
13,490,6

12,256,9
65
22,889,3 12,256,9

10,740,1
84
23,908,8 10,740,1

The fair value of financial instruments traded in active markets is determined by the market price reported in the
end of the reporting period. Active market is defined as the market that regular trading with public prices can be
done through trading places, sellers, intermediaries, industry groups, evaluation agencies and supervising
instituitions and the trades with public prices happen regularly among independent business entities.The reported
market price of financial assets that are belonged to the consolidated company is the buying price. This type of
commodity is included in Standard 1. Instruments that are included in Standard 1 are mainly listed shares of
trading financial instruments and available-for-sale financial instruments, and these shares are listed in KOSPI or
KOSDAQ.
The fair values of the financial instruments, which are not traded in active market, such as the over-the-counter
financial derivatives, are determined by the evaluation methods. These evaluation methods make the maximum
use of observable market information and the minimum use of the company-specific information. All the input
variables required by the measurement of the fair value of the corresponding instruments are included in
Standard 2.
If more than one input variables are not based on the market information, then the corresponding instruments
should be included in Standard 3.
The evaluation methods of measuring the fair value of the financial instruments are as follows.
-The public market price or dealer price of similar instruments
-The fair value of interest rate swap is calculated by the present value of the cash flow estimated from the
observable yield curve.

76

-
, ,
.
(: %).

( )

( )

6.64 - 12.94

7.16 - 12.06

6.64 - 12.94

6.64 - 12.94

7.16 - 12.06

6.64 - 12.94

2) 3 (: ).

( )

12,256,965

10,740,184

3 /

1,233,687

1,516,781

13,490,652

12,256,965

77

-The fair value of the forward exchange is calculated by the present value discounted from the current
reference exchange as of the end of the reporting period.
-The fair value of other financial instruments is measured by the discounted cash flow method and other methods.
Moreover, to measure the fair value of the above-mentioned financial instruments, the interest rate used for
discounting expected cash flows is equal to the sum of the yield rate of the national debt (as of the end of
the reporting period) and the risk premium. The current and previous interest rates adopted by the
consolidated company are as follows. (Unit: %)
Until the current
acconting period

Divisi
on

The end of the previous


accounting period
(unaudited)

The beginning of the


previous accounting
period (unaudited)

Derivatives

6.64 - 12.94

7.16 - 12.06

6.64 - 12.94

Convertible bonds

6.64 - 12.94

7.16 - 12.06

6.64

- 12.94

2Changes in product corresponding to Level 3 are as follows: (Unit: KWR 000).

Division
Balance at the beginning

Available-for-sale financial assets

The current accounting


period

The previous accounting


period(unaudited)

12,256,965

10,740,184

Acquisition Cost

Disposal amount

Inflow/Outflow to Level 3

The gain or loss recognized in profit or loss

1,233,687

1,516,781

13,490,652

12,256,965

The gain or loss recognized in other


comprehensive income
Balance at the end of year
Total income recognized in current profit
or loss for the possession of assets at the
end of reporting period

78

3)
(: ).

( )

( )

500,000

500,000

543,708

2,000,000

3,317

500,000

1,043,708

2,003,317

()(*1),(*2)

()(*1),(*2)

5,000

5,000

500,000

1,043,708

2,008,317

(*1)
(*1),(*2)

Celltrion Healthcare
Hungary.K(*1),(*3)

(*1)
.
(*2) 543,708 , 1,461,292
.
(*3) Celltrion Healthcare Hungary.K .

79

3As the end of the current reporting period, the details of aviliable-for-sale financial assets
that measured by the original price are as follows. (Unit: KRW 000)
Category of financial
products

Division

Until the
current
accounting
period

The end of the


previous accounting
period (unaudited)

The beginning of the


previous accounting
period (unaudited)

Available-for-sale financial assets

Equity securities

Yonhap TV News (*1)

500,000

500,000

Secure-net (*1), (*2)

543,708

2,000,000

3,317

500,000

1,043,708

2,003,317

Celtrion ST (*1), (*2)

Picosnet (*1), (*2)

5,000

5,000

500,000

1,043,708

2,008,317

Celltrion Healthcare
Hungary.K (*1), (*3)
Subtotal

Convertible bonds

Subtotal
Total

(*1) The equity investment that is not listed for transactions is measured by the acquisition cost, as no public
prices in the active markets are available and the fair value cannot be estimated reliably.
(*2) The possibility of recovering the impairment loss of net asstes is small, so the impairment losses in the
previous accounting period and before the previous accounting period are respectively KRW 543,708,000 and
KRW 1,461,292,000.
(*3) Celltrion Healthcare Hungary.K has been fully dispoed in the previous period.

80

5.
(: ).

( )

( )

487

1,187

1,789,298

417,477

2,095,196

44,119,374

12,868

45,908,672

430,832

2,096,383

CMA

6.

(: ).

( )

( )

2,500,000

1,385,000

41,500

(*1)

27,465,535

22,889,363

23,908,885

29,965,535

24,274,363

23,950,385

( 30)

(*1)
.

7.
. (:
).

( )

( )

579,299

579,299

28,026

28,026

41,614

41,614

22,423,525

(1,270,153)

21,153,371

27,389,259

(666,907)

26,722,351

10,286,945

(827,032)

9,459,913

20,310,316

(463,477)

19,846,839

26,254,912

(463,478)

25,791,434

8,727,657

(619,278)

8,108,379

506,220

(476,392)

29,828

587,523

(126,358)

461,164

1,102,875

(123,266)

979,609

1,606,989

(330,284)

1,276,704

546,824

(77,071)

469,753

456,413

(84,488)

371,925

23,002,824

(1,270,153)

21,732,670

27,417,285

(666,907)

26,750,377

10,328,559

(827,032)

9,501,527

81

5. Cash and cash equivalent


As the end of the current reporting period, the details of the companys cash and cash equivalent are as follows:
(Unit: KRW 000)
Until the current
accounting period

Divisi
on

The end of the previous


accounting period
(unaudited)

Cash on hand
Ordinary deposits
CMA etc.
Total

The beginning of the


previous accounting
period (unaudited)

487

1,187

1,789,298

417,477

2,095,196

44,119,374

12,868

45,908,672

430,832

2,096,383

6. Short-term financial assets


As the end of current the reporting period, the details of the companys short-term financial assets are as follows:
(Unit: KRW 000)
Until the
current
accounting
period

Divisi
on

Time deposits
Derivatives (*1)
Total

The end of the


previous accounting
period (unaudited)

The beginning of
the previous
accounting period
(unaudited)

2,500,000

1,385,000

41,500

27,465,535

22,889,363

23,908,885

29,965,535

24,274,363

23,950,385

Note

Collateral (30
comments)

(*1) It consists of the fair value of the option contract for indemnity and excess profit sharing and stock-trading
value of the conversion rights embedded in convertible bonds.
7. Issued bonds and others liabilities
(a)As of the end of the reporting period, the issued bonds and others liabilities of the consolidated company are
as follows. (Unit: KRW 000)
Divisi
on

Trade
receivable
Other
receivables
Short-term
loans
Accounts
receivable
Accrued
income
Total

Until the current


accounting period
Gross book
value
579,299

The end of the previous accounting


period (unaudited)

Allowance
for bad
debts

Net book
value

Gross book
value

Allowance
for bad
debts

Net book
value

The beginning of the previous


accounting period (unaudited)
Gross book
value

Allowance
for bad
debts

Net book
value

579,299

28,026

28,026

41,614

41,614

22,423,525 (1,270,153)

21,153,371

27,389,259

(666,907)

26,722,351

10,286,945

(827,032)

9,459,913

20,310,316

(463,477)

19,846,839

26,254,912

(463,478)

25,791,434

8,727,657

(619,278)

8,108,379

506,220

(476,392)

29,828

587,523

(126,358)

461,164

1,102,875

(123,266)

979,609

1,606,989

(330,284)

1,276,704

546,824

(77,071)

469,753

456,413

(84,488)

371,925

23,002,824 (1,270,153)

21,732,670

27,417,285

(666,907)

26,750,377

10,328,559

(827,032)

9,501,527

As the current and previous period, the changes of bad debt provision are as follows

82

. (: ).

( )

666,907

827,032

603,246

642

(159,020)

(1,747)

1,270,153

666,907

8.

(: ).

( )

( )

109,981

111,176

50

1,246,660

18,203

9,560

157

160,128

172,086

145,107

100,000

1,616,769

292,822

163,517

9.

. (: ).

(*1)
(*2)

( )

( )

500,000

1,043,708

2,003,317

13,490,652

12,256,965

10,745,184

13,990,652

13,300,673

12,748,501

(*1)

543,708 , 1,456,292 .

83

(b)As the current and previous period, the changes of bad debt provision are as follows

Division

The current
accounting period

(Unit: KRW 000)

The previous accounting period


(unaudited)

Beginning balance

666,907

827,032

Ordinary deposits

603,246

642

Reversal

(159,020)

Etc.

(1,747)

1,270,153

666,907

Ending Amount

8. Other current assets


As the end of the current reporting periodthe companys other current assets are as follow. (Unit KRW 000)
Division

Until The current


accounting period

Prepayments

The end of the previous


accounting period
(unaudited)
109,981

Prepaid expenses

111,176

1,246,660

Value added tax payment

Current tax assets

160,128

Etc.

100,000
Total

The beginning of the


previous accounting
period (unaudited)

1,616,769

50
-

18,203

9,560

157

172,086

145,107
-

292,822

163,517

9. Avaliable-for-sale financial assets


(a)As the end of the current reporting date, the companys available-for-sale financial assets are as follow (Unit:
KRW 000)
Division

Until the current


accounting
period

The end of the


previous accounting
period (unaudited)

The beginning of the


previous accounting
period (unaudited)

Non-marketable equity
securities(*1)

500,000

1,043,708

2,003,317

Convertible bonds(*2)

13,490,652

12,256,965

10,745,184

13,990,652

13,300,673

12,748,501

Total

(*1) The non-marketable equity securities are measured by the acquisition cost, as no public prices in active
markets are available and the fair values cannot be estimated reliably.
The possibility of recovering the impairment loss of net assets is low, so the impairment losses in the previous
accounting period and before the previous accounting period are respectively 543,708,000 KRW and
1,456,292,000 KRW.

84

(*2)
.

. 5,000
.
. (: ).

( )

13,300,673

12,748,501

17,279,856

500,000

1,233,687

1,516,781

(17,279,856)

3,317

543,708

1,461,292

13,990,652

13,300,673

( )

(*)

(*)
.
10.
. (:
).

(%)

( )

(%)

(%)

()(*1)

20.91

36,140,680

288,161,653

20.01

214,432,045

19.31%

164,616,006

()(*2)

31.63

4,471,612

70,896,962

17.65

32,184,287

()(*3)

35.60

112,200

()(*4)

( )

359,058,615

15.06

31.00

246,616,332

24,020,480
6,725,130
195,361,616

(*1) () 20% ,
()
. ()
() () .
(*2) () 20%
()
.

85

(*2) Using the appropriate estimates and a reasonable valuation model based on the professional judgment of
independent external rating agencies to assess the fair value of the calculation amount. The external rating
agencies will use the cash flow in the financial statements as base to evaluate and calculate the fair value.
Meanwhile, the impairment losses in the previous period of convertible bonds with low possibility in reversal of
the net value of the assets are 5,000,000 KRW.
(b)As the current and previous period, the changes of the companys available for sale financial assets are as
follow. (Unit: KRW 000)
Divisi
on

Until the current


accounting period

The previous accounting period


(unaudited)

Beginning balance

13,300,673

12,748,501

Acquisition cost

17,279,856

500,000

1,233,687

1,516,781

(17,279,856)

3,317

543,708

1,461,292

13,990,652

13,300,673

Valuation gain (pre-tax)


Investments in alternative
Disposal amount
Impairment loss (*)
Balance figure

(*) The shares that are non-marketable with low possibility of the net asset value recovery and convertible
bonds confirm loss provisions
10. The investment of associated company
(a) As of the end of the current reporting period, the investment situation of associated company is as
follows: (Unit: KRW 000)
Company Name

The current accounting


period
Shareholdi
ngs (%)

Number of
shares

Book value

The end of the previous


accounting period
(unaudited)

The beginning of the


previous accounting period
(unaudited)

Shareholdin
gs (%)

Shareholdin
gs (%)

Book value

Celltrion(*1)

20.91

36,140,680

288,161,653

Celltrion Pharm(*2)

31.63

4,471,612

70,896,962

Celtrion ST(*3)

35.60

112,200

Celltrion DBI(*4)
Total

359,058,615

20.01

214,432,045

17.65

32,184,287

246,616,332

Book value

19.31%

164,616,006

15.06

24,020,480

31.00

6,725,130
195,361,616

*1 ssociated corperations include the company who owns less than 20% the shares of Celltrion or the
Company and Co. CEO of Celltrion are able to exercise significant influence on the decisions of the investee
company in the prior beginning of current period. In addition, Celltrion Venture Investment Co. Ltd is a
subsidiary in the beginning of the previous period, so the shares of Celltrion are included in the table.
*2 The associated corperations include the company who owns less than 20% the shares of Celltrion
Phram or the Company and Co. CEO of Celltrion is able to exercise significant influence on the decisions of the
investee company in the prior beginning of current period.

86

(*3) 50%
50%
.
. , ()
.
(*4) ,
1,432,070 .
. (: ).

( )
246,616,332

195,361,616

61,138,152

32,938,192

(*1)

34,069,111

32,691,193

(*2)

17,235,020

(7,649,539)

(6,725,130)

359,058,615

246,616,332

(*1) .
(*2) .
. (: ).
()

()
()
()(*)

()

1,732,913,897

682,765,148

350,196,210

174,431,166

331,043,843

173,797,761

46,967,596

3,551,937

1,084,571

4,469,952

4,036,466

45,086

()

()
()

()

1,407,313,302

507,766,814

279,041,704

167,808,722

216,079,282

87,811,245

46,494,422

3,434,231

87

(*3) The companies that hold less than 50% at the beginning and the end of the period or that the Celltrion ST
stocks owned by the company after conversion accounts for more than 50% belong to subsidiaries. However,
because the paid added-value activities reduce the companys shares, it changes into associate company. At the
same time, the accumulated loss of Celltrion ST overcomes the book value of the associate companys
investment shares, so the list of the associate companys financial feasibility has been disturbed.
(*4) All the CELLTRION DBI holdings were sold out at the early time. The loss of associate companys
investment disposal was 1,432,070,000 KRW.
bInvestment changes of associates of current and previous period are as follows: (Unit: KRW 000)
Division

The current
accounting period

Beginning balance

The previous accounting period


(unaudited)
246,616,332

195,361,616

Acquisition

61,138,152

32,938,192

Share of profit or loss (*1)

34,069,111

32,691,193

Other changes (*2)

17,235,020

(7,649,539)

(6,725,130)

359,058,615

246,616,332

Disposal
The amount till the end of the
reported period

*1The profits and losses of associates include the profits and losses of the change of shares and
the disposal of related stock investments.
*2The other comprehensive profits and losses of associates, the change in the retained earnings
and other capital reserves are included.
(c)As of the end of the current reporting period, the brief financial information of the associates is as follows (Unit:
KRW 000)
Company Name
Celltrion
Celltrion Pharm
Celtrion ST(*)

Total assets

Total liabilities

Revenu
e

Net income (loss)

1,732,913,897

682,765,148

350,196,210

174,431,166

331,043,843

173,797,761

46,967,596

3,551,937

1,084,571

4,469,952

4,036,466

45,086

As of the end of the previous period


Company Name
Celltrion
Celltrion Pharm

Total assets

Total liabilities

Revenue

Net income (loss)

1,407,313,302

507,766,814

279,041,704

167,808,722

216,079,282

87,811,245

46,494,422

3,434,231

88

()

()

()

1,140,215,449

359,385,383

180,978,908

109,077,525

178,787,432

55,104,350

41,825,109

5,666,139

39,943,238

21,708,929

80,117,917

2,057,418

()
()

(*) ,
.
.
(: ).

( )

943,271,748

288,161,653

836,849,963

214,432,045

76,017,404

70,896,962

46,421,864

32,184,287

1,019,289,152

359,058,615

883,271,827

246,616,332

.
(: )
2012 1 1

(1,824,068)

2012 12 31

618,992

(1,205,196)

11.
(: ).

( )

761,703

( )
-

89

As of the beginning of the previous period


Company Name

Total assets

Celltrion

Total liabilities

Revenue

Net income (loss)

1,140,215,449

359,385,383

180,978,908

109,077,525

178,787,432

55,104,350

41,825,109

5,666,139

39,943,238

21,708,929

80,117,917

2,057,418

Celltrion Pharm
Celltrion DBI

(*) The financial information mentioned above is temporarily settled amount of financial statement. The company
analyzes and practice reliability test program on the possible differences between temporarily settled financial
statement and the audited financial statement.
(d)Market prices of investment of associated companies with market transactions in the
current and previous periods are as follows: (Unit: KRW 000)
Divisio
n

The current accounting period

The previous accounting period


(unaudited)

Market price
Celltrion

Book value

Market price

Book value

943,271,748

288,161,653

836,849,963

214,432,045

Celltrion Pharm

76,017,404

70,896,962

46,421,864

32,184,287

Total

1,019,289,152

359,058,615

883,271,827

246,616,332

(e)Current and accumulated share changes that cannot be affirmed because of stock price reaction interrupt
caused by associated enterprises financial movements are as follows. (Unit: KRW 000)
Jan. 1, 2012

Increase/Decrease

Dec. 31, 2012

Divisi
on
Unrealized loss

Celltrion ST

Unrealized other
capital items

(1,824,068)

Unrealized loss

618,992

Unrealized
other capital
items

Unrealized loss

Unrealized
other capital
items

(1,205,196)

11. Other financial assets


As of the end of the current reporting period, other financial assets of the company are as
follows (Unit: KRW 000)
Divisi
on
Long-term savings
insurance

The current
accounting period

The end of the previous


accounting period
(unaudited)
761,703

The beginning of the


previous accounting
period (unaudited)
-

90

12.
.
839,987 .
.
(:).
()

1,058,088

220,201

1,187,822

35,679

2,501,790

(26,150)

(33,704)

(59,854)

281,191

87,664

160,672

529,527

1,058,088

220,201

1,442,863

89,639

160,672

2,971,463

(5,505)

(149,333)

(13,746)

(80,336)

(248,920)

1,058,088

214,696

1,293,530

75,893

80,336

2,722,543

5,505

149,333

13,347

80,336

248,521

( 16 30 ).
()

/




( )

136,874

128,342

265,216

1,058,088

220,201

1,161,672

20,676

2,460,637

(110,724)

(113,338)

(224,062)

1,058,088

220,201

1,187,822

35,680

2,501,791

(20,920)

(13,860)

(34,780)

1,058,088

220,201

1,166,902

21,820

2,467,011

5,230

8,553

13,783

.
(:
).

NH

1,450,000


1,450,000 ( 30 ).

91

12. Tangible assets


(a) The official price of the holding lands.
As of the end of the reporting period, the official value of the lands held by the company is 839,987,000 KRW
bThe changes in the tangible assets
The changes in the tangible assets of the company in the current and previous periods are
as follows (Unit: KRW 000)
The current period
Divisi
on
Beginning balance of
acquisition cost

Land

buildi
ng

Machinery

Fixtu
re

Improvement
property of
leased fixed

Total

1,058,088

220,201

1,187,822

35,679

2,501,790

Consolidation scope
changes

(26,150)

(33,704)

(59,854)

Acquisition / capital
expenditure

281,191

87,664

160,672

529,527

1,058,088

220,201

1,442,863

89,639

160,672

2,971,463

(5,505)

(149,333)

(13,746)

(80,336)

(248,920)

1,058,088

214,696

1,293,530

75,893

80,336

2,722,543

5,505

149,333

13,347

80,336

248,521

Ending cost
Ending accumulated
depreciation
Ending book value
Depreciation

Mortgaged lands, buildings, and machine equipment provided for loaning are as follows.
The previous period
Divisi
on

Beginning balance of
acquisition cost
Acquisition / capital
expenditure
Disposal
Ending cost
Ending accumulated
depreciation
Ending book value
(unaudited)
Depreciation

Land

buildi
ng

Machinery

Fixtu
re

Total

136,874

128,342

265,216

1,058,088

220,201

1,161,672

20,676

2,460,637

(110,724)

(113,338)

(224,062)

1,058,088

220,201

1,187,822

35,680

2,501,791

(20,920)

(13,860)

(34,780)

1,058,088

220,201

1,166,902

21,820

2,467,011

5,230

8,553

13,783

(c)Insurance assets
As of the end of the current period, the insurance value for the fixed assets of the company is as
follows (Unit: KRW 000)
Insurance Types

Insured property

Fire insurance

Buildings and machinery

Insurance company
NH Fire Life

Amount insured
1,450,000

The acceptance right of above insurance benefit is relevant to borrowings, and set mortgage, the mortgage is
defined as KRW 1,450,000 KRW 000. (Note 30)
92

13.
(: ).
()

868,700

868,700

19,012

7,790

(1,218)

(19,012)

6,572

887,712

7,790

(1,218)

(19,012)

875,272

(*)

()

( )

( )

850,000

18,700

868,700

3,180,374

(3,180,374)

28,518

(9,506)

19,012

4,058,892

18,700

(3,189,880)

887,712

(*)

(*)
.
14.
(:
).

( )

( )

153,520

17,840

91,300

594,000

153,520

17,840

685,300

15.

(:).

3,758,999

( )

( )
-

93

13. Intangible Assets


The changes of the intangible assets in the company in the current and previous periods
are as follows (Unit: KRW 000)
The current period
Division

Beginning

Facilities ticket (*)


Software
Total

Acquisition

Disposal

Amortization
/Impairment loss

Consolidation
scope changes

Endin
g

868,700

868,700

19,012

7,790

(1,218)

(19,012)

6,572

887,712

7,790

(1,218)

(19,012)

875,272

The previous period


Divisi
on

Beginning (unaudited) Acquisition

Facilities ticket (*)


Research and
development
Software
Total

Disposal

Amortization
/Impairment loss

Ending (unaudited)

850,000

18,700

868,700

3,180,374

(3,180,374)

28,518

(9,506)

19,012

4,058,892

18,700

(3,189,880)

887,712

(*) In the result of impairment test of Golf VIPs who have limitless service life, the impairment loss is not
confirmed in the current and previous period.
14. Other long-term receivables
As of the end of the current period, other long-term receivables of the company are as follows (Unit: KRW 000)

Divisi
on

The current
accounting period

Deposits
Loans
Total

The end of the previous


accounting period
(unaudited)
153,520

17,840

The beginning
of the previous
accounting period
(unaudited)
91,300

594,000

153,520

17,840

685,300

15. Other non-current assets


As of the end of the reporting period, details of other non-current assets of the company are as follows: (Unit:
KRW 000).

Divisi
on
Long-term prepaid
expenses

The current
accounting period

The end of the previous


accounting period
(unaudited)
3,758,999

The beginning of the


previous accounting
period (unaudited)
-

94

16.
(:).
.

( )

( )

253,297,383

104,797,265

88,761,018

9,000,000

15,000,000

10,500,000

975,000

263,272,383

119,797,265

99,261,018

6,000,000

15,000,000

22,500,000

43,650,446

40,742,337

17,993,393

16,079,186

14,372,786

67,643,839

71,821,523

36,872,786

330,916,222

191,618,788

136,133,804

95

16. Financial liabilities


As of the end of the reporting period, details of financial liabilities of the company are as
follows: (Unit: KRW 000).
(a)Financial liabilities

Divisi
on

The end of the


current
accounting
period

The end of the


previous accounting
period (unaudited)

The beginning of the


previous accounting
period (unaudited)

Short-term financial liabilities


Short-term borrowings
Long - term liabilities
Financial guarantee liabilities
Subtotal

253,297,383

104,797,265

88,761,018

9,000,000

15,000,000

10,500,000

975,000

263,272,383

119,797,265

99,261,018

Long-term financial liabilities


Long-term borrowings

6,000,000

15,000,000

22,500,000

Convertible bonds

43,650,446

40,742,337

Redeemable convertible
preference shares

17,993,393

16,079,186

14,372,786

Subtotal

67,643,839

71,821,523

36,872,786

330,916,222

191,618,788

136,133,804

Total

96

.
2012.12.31

(%)

CD+3.55

( )

34,991,000

28,991,000

28,991,000

7,000,000

7,000,000

7,000,000

( )

5.2

15,000,000

15,000,000

10,000,000

8.5

19,203,559

7,133,293

4,238,300

10,000,000

8,000,000

200,000

288,000

5.7~6.5

9,000,000

1,000,000

6.9

2,999,924

2,999,924

6.1

NH

7,000,000

7,000,000

5,000,000

12,000,000

12,000,000

7,000,000

7,000,000

48,000,000

6.5

4.57~5.23

CD+2.61

40,000,000

5.7

40,000,000

3MB+1.1

1,000,000

NP-0.4

10,000,000

1,170,000

11,611,380

0~8.5

102,900
253,297,383

16,473,048

2,462,338

104,797,265

88,761,018


,
( 30 ).
.

2012.12.31

(%)

CD+4.55

5.33

13,500,000
-

( )

( )

22,500,000

27,000,000

6,000,000

6,000,000

1,500,000

1,500,000

15,000,000

30,000,000

33,000,000

(9,000,000)

(15,000,000)

(10,500,000)

6,000,000

15,000,000

22,500,000

()
( 30 ).

97

(b)Short-term borrowings
Borrowing
sources

2012.12.31

Amount of money

Annual interest rate


(%)
CD+3.55
8

Woori Bank
Shinhan Capital
Samsung Securities
Celltrion GSC

The
The end of the previous The beginning of the
current
accounting period
previous accounting
34,991,000
28,991,000
28,991,000
7,000,000
7,000,000
7,000,000

5.2
8.5

15,000,000
19,203,559

15,000,000
7,133,293

10,000,000
4,238,300

Katy Capital

10,000,000

Ace Savings Bank


Shinhan Bank

200,000

8,000,000
288,000

Hyundai Securities
Meritz Securities

5.7~6.5
6.9

9,000,000
2,999,924

1,000,000
2,999,924

Hanwha Securities
NH Capital

6.1
7

7,000,000
12,000,000

7,000,000
12,000,000

5,000,000
-

Eugene Investment &


Securities
National Agricultural
Cooperative
Korea Securities
Daewoo Securities
Korea Exchange Bank
Gyeongnam Bank
Metropolitan Mutual
Savings Bank
Celltrion Healthcare
Officers, etc.
Total

6.5

7,000,000

7,000,000

4.57~5.23

48,000,000

CD+2.61
5.7
3MB+1.1
NP-0.4
-

40,000,000
40,000,000
1,000,000
10,000,000
-

1,170,000

0~8.5

102,900
253,297,383

16,473,048
104,797,265

11,611,380
2,462,338
88,761,018

Concerning the debts above, the company takes tangible assets like land, part of the shares of Celltrion, and the
attached amount of fire insurance benefit attached to tangible assets as collateral.
(c)Long-term borrowing
2012.12.31
Amount of money
Annual interest
The current
rate (%)
accounting
period

Borrowin
g
sources
Hana Bank

CD+4.55

Woori Bank

National
Agricultural
Cooperative
Federation

5.33

Total
Less: portion of long-term debt
Balance

The end of the


previous accounting
period (unaudited)

13,500,000

The beginning of the


previous accounting
period (unaudited)

Repayment
method

22,500,000

27,000,000

Amortization

6,000,000

6,000,000

Expiration date

1,500,000

1,500,000

Expiration date

15,000,000

30,000,000

33,000,000

(9,000,000)

(15,000,000)

(10,500,000)

6,000,000

15,000,000

22,500,000

Part of the long-term borrowings takes the shares of Celltrion of associated enterprises as collateral. (Note 30)
98

(%)

2011.12.27

2016.12.27

9.0

:
:

( )

43,800,000

43,800,000

12,877,490

12,220,369

(13,027,044)

(15,278,032)

43,650,446

40,742,337

.
: 4%, 3
: 9%
: 36,837 ( 5,000 )
: 1
: 1,189,000
: 2015 1 1

: 2013 1 1

:
,

:
: 2012 1 1 2017 1 1
50%

99

(d)Convertible bonds
Division

Date of issue

First issue without


guarantee

2011.12.27

Repayment date Guaranteed


returns (%)
2016.12.27

9.0

Add: reimbursement premiums


Less: Discount on bonds
Total

The current
accounting
period

The end of the


previous
accounting period
(unaudited)
43,800,000
43,800,000
12,877,490

12,220,369

(13,027,044)

(15,278,032)

43,650,446

40,742,337

Details of the issuance of convertible bonds above are as follows:


Interest rate and interest payment period: annual interest rate of 4%, 3 months extendible period.
Repayment: If there is no conversion or early redemption, the bonds should be repaid at 9%
annual return for one time.
Type and number of shares issued at the time of conversion: 36,837 named common stocks
(5,000 KRW par value)
Conversion time: One year after the issue date to the last trading day before the maturity
Conversion price: KRW 1,189,000.
Early repayment of principal claimed by the debtee: from January 1st, 2015 to the date of
maturity, it is feasible to get early redemption according to the amount specified in the
agreement on every interest payment date.

Early repayment of principal of the company: from January 1st 2013 to the date of maturity, it is
feasible to get early redemption according to the amount specified in the agreement on every
interest payment date.
The initial dividends of the shares and interests came from conversion: it should be seen as a
conversion that happens at the end of the fiscal year in which the conversion request day
belongs to. Interests should be calculated and paid by the days from the first interest
payment date to the conversion request date.
Joint Guarantee: the CEO
Other Commitments: From January 1st, 2012 to January 1st, 2017, the CEO and others have the right to
transfer their Celltrion shares at the price of 50% of the par value of convertible bonds held by bond-holders.

100

(%)

2009.7.7

11%

:
:

( )

( )

12,500,037

12,500,037

12,500,037

6,475,899

6,475,899

6,475,899

(982,543)

(2,896,750)

(4,603,150)

17,993,393

16,079,186

14,372,786

.
:
: 11%
: 31,527 ( 5,000 )
: 2009.11.30 ~ 2010.11.30
: 396,493
: 1 11%

.
1
1
11%
17.
(: ).

( )

( )

489,429

165,000

4,463,724

2,219,876

3,419,376

3,026,305

812,794

2,506,273

1,272,878

1,194,981

900,556

164,541

212,101

12,547

4,953,153

2,219,876

3,584,376

101

(e)Preference shares
Division

Date of issue

Redeemable convertible
preference shares

Guaranteed returns (%) The current


accounting
period

2009.7.7

11%

The end of
the previous
acconuting
period
(unaudited)

The beginning
of the
previous
accounting
period
(unaudited)

12,500,037

12,500,037

12,500,037

Add: reimbursement premiums

6,475,899

6,475,899

6,475,899

Less: issue difference of debenture

(982,543)

(2,896,750)

(4,603,150)

17,993,393

16,079,186

14,372,786

Total

Details of the issuance of convertible preference


shares above are as follows:
Category: cumulative participating redeemable convertible preference shares.
Repayment: If there is no early redemption or conversion, the bonds should be repaid at the rate
of annual guaranteed return of 11% for one time.
The type and number of shares issued came from conversion: 31,527 named common shares
(KRW 5,000 par value).
Conversion period: 2009.11.30 ~ 2010.11.30
Conversion price: KRW 396,493 per share.
Repayment price per share: the issue price per share and the amount of the compound interest calculated at
the rate of annual 9% from issuance date to maturity date should be recognized as the dividend of
redeemable convertible preference shares, and they also should be recognized as the compound interest from
the payment date of dividend to the date of redemption.
When there is no distributable dividend, the reimbursement amount per share is the continuously calculated
reimbursement amount per share from the reimbursement date plus the compound interest calculated at the
annual rate of 11% to the date when the dividend can be distributed.
17. Accounts payable and other payables
As of the end of the reporting period, the details of accounts payable and other payables of the
company are as follows. (Unit: KRW 000)
Divisi
on
Trade payables

The current
accounting period

The end of the previous


accounting period
(unaudited)
489,429

The beginning of the


previous accounting
period (unaudited)
165,000

Liabilities payments

4,463,724

2,219,876

3,419,376

Accounts Payable

3,026,305

812,794

2,506,273

Accrued expenses

1,272,878

1,194,981

900,556

164,541

212,101

12,547

4,953,153

2,219,876

3,584,376

Deposits
Total

102

18.
(: ).

(*)

20,672

20,672


, .
19.
. (: ,).

( )

( )

20,000,000

20,000,000

20,000,000

5,000

5,000

5,000

300,000

300,000

300,000

1,500,000,000

1,500,000,000

1,500,000,000

. (: ).

( )

300,000

300,000

300,000

300,000

300,000

300,000

300,000

300,000

103

18. Other current liabilities


As of the end of the current reporting period, the details of other current liabilities of the company are as follows.
(Unit: KRW 000)
Divisi
on

The beginning
of the
accounting
period

Changes

Recovery provisions (*)

The end of the


accounting
period

20,672

20,672

As of the end of the current reporting period, the expense of indoor decoration in buildings rented by
subsidiary companies are included in reestablishment or liabilities, while its not included in the end and
beginning of the last period.
19. Capital
(a)As of the end of the current reporting period, the details of the capital of the company are as following. (Unit:
share, KRW).
Divisi
on

The current
accounting period

The end of the previous


accounting period
(unaudited)

Authorized shares

20,000,000

20,000,000

20,000,000

5,000

5,000

5,000

300,000

300,000

300,000

1,500,000,000

1,500,000,000

1,500,000,000

Per share amounts


Circulating shares
Ordinary shares

The beginning of the


previous accounting period
(unaudited)

(b)The changes in the number of outstanding shares of the company in the current and previous accounting
periods are as follows: (unit: share)
Divis
ion

The current accounting


period
Circulating
shares

The previous accounting period (unaudited)

Treasury
shares

Number of
circulating
shares

Circulating
shares

Treasury
shares

Number of
circulating
shares

Basic circulating
shares

300,00
0

300,00
0

300,00
0

300,00
0

Issued shares at
the end of this
period

300,00
0

300,00
0

300,00
0

300,00
0

104

. (:
).

( )

( )

44,927,001

44,927,001

44,927,001

2,058,666

2,384,977

371,328

371,328

371,328

(147,951)

(492,533)

1,789,510

2,756,305

371,328

46,716,511

47,683,306

45,298,329

()
()

. (: ).

( )

( )

(8,589,299)

(7,470,641)

19,141,574

8,258,499

7,296,223

6,113,134

(330,800)

(174,418)

25,254,708

20.

105

(c)As of the end of the current reporting period, the details of the capital reserves and other capital accounts
of the company are as follows: (Unit: KRW 000)
The current
accounting period

Division

The end of the previous


accounting period
(unaudited)

The beginning of the


previous accounting
period (unaudited)

Capital surplus
Share premium

44,927,001

44,927,001

44,927,001

Conversion Price(Convertible bonds)

2,058,666

2,384,977

Conversion Price(Preference shares)

371,328

371,328

371,328

Consolidation scope changes

(147,951)

Changes due to increase of subsidiaries


investment

(492,533)

Subtotal

1,789,510

2,756,305

371,328

46,716,511

47,683,306

45,298,329

Other capital items

Total

As of the end of the current reporting period, the accumulated amounts of other comprehensive income of the
company are as follows: (Unit: KRW 000).
The current
accounting period

Division

Equity with regards to related parties


other comprehensive income

The end of the previous


accounting period
(unaudited)

The beginning of the


previous accounting period
(unaudited)

(8,589,299)

(7,470,641)

19,141,574

Available-for-sale financial assets, gains

8,258,499

7,296,223

6,113,134

Total

(330,800)

(174,418)

25,254,708

20. Retained earnings


As of the end of the current reporting period, retained earnings are sum non-disposal retained earnings.

106

21.
.
(:
,).
(1)

( )

14,053,032,148

10,012,583,094

300,000

300,000

46,843

33,375

(2)

1 1

( )
300,000

300,000

300,000

300,000


12 31

.
.
22.
.
(:).

( 1)
( 2)

( )

8,004,302

3,523,202

115,898

2,757,190

8,120,200

6,280,392

107

21. Earnings per share


1) Basic earning per share
The datials of the basic earnings per share of share holdings of the consolidated company are as follows (Unit:
share, KRW).

Detail
s

The current
accounting period

Ownership interest in net income of the


Parent Company

The previous accounting period


(unaudited)
14,053,032,148

10,012,583,094

300,000

300,000

46,843

33,375

The weighted average number of


common circulating shares
Basic earnings per share
1

Weighted average number of common shares

Details

The current
accounting period

Ordinary shares issued on Jan.1st


Effects of treasury stock
The weighted average number of common
circulating shares on Dec. 31st

The previous accounting period


(unaudited)
300,000

300,000

300,000

300,000

bEarnings per diluted share


There is no influence of dilution in the current and the previous accounting periods, so the earnings per diluted
share equal to the basic earnings per share.
22. Income tax
expenses
Configuration details of income tax expense
The details of income tax expenses of the company in the current and the previous accounting periods are as
follows: (Unit: KRW 000)

Category
Tax burden
Movements in deferred taxes due to temporary differences
(Note 1)
Reflected directly in equity Income tax expense (Note 2)
Income tax expense

Current Period Last Period (not audited)


-

8,004,302

3,523,202

115,898

2,757,190

8,120,200

6,280,392

(Note 1) Changes in deferred income taxes due to temporary differences: (Unit: KRW 000)
(Note 2) Changes in deferred income taxes accounted directly into capital (Unit: KRW 000)

108

( )

21,680,698

14,808,448

4,769,754

3,583,643

3,350,446

2,696,749

296,364

181,571

3,054,082

1,926,222

588,956

8,120,200

6,280,392

37.45%

42.41%


( )

. ()
() (:
).

109

(b)The relationship between earnings before tax and expenses of income tax
The relationship between earnings before tax and expenses of income tax is as follows. (Unit: KRW 000)
Divisio
n
Income before tax

The current
accounting
period

The previous accounting


period (unaudited)
21,680,698

14,808,448

Corporate income tax resulted from applicable tax

4,769,754

3,583,643

Adjustments

3,350,446

2,696,749

296,364

181,571

3,054,082

1,926,222

588,956

8,120,200
37.45%

6,280,392
42.41%

Unauthorized expenses
Unrecognized deferred tax assets
Others (rate difference, etc.)
Income tax expense
The effective tax rate

(c)Details of the fluctuation of temporary differences and deferred income tax assets (liabilities)
Details of the fluctuation of temporary differences and deferred income tax assets (liabilities) are as follows:
(Unit: KRW 000)

110

()

12

12

( )
666,907

666,907

1,180,822

1,180,822

259,781

259,781

3,121,292

543,708

3,665,000

806,300

806,300

18,500

18,500

4,070

4,070

9,577,745

1,434,177

11,011,922

2,422,623

2,422,623

12,220,369

538,624

12,758,993

2,806,978

2,806,978

24,677

24,677

5,429

5,429

()

8,822

8,822

1,941

1,941

6,475,899

6,475,899

1,424,698

1,424,698

12,500,037

12,500,037

2,750,008

2,750,008

7,000,000

7,000,000

1,540,000

1,540,000

2,364,872

2,364,872

520,272

520,272

()
()

46,667

46,667

10,267

10,267

204,472

204,472

68,313

68,313

15,029

15,029

20,672

20,672

4,548

4,548

100,000

100,000

22,000

22,000

2,975,512

2,975,512

17,027,200

12,718,851

29,746,051

6,544,131

6,544,131

74,152,805

3,846,891

16,685,336

86,991,250

19,138,076

298,752

18,839,324

11,836,866

298,752

11,538,114

7,301,210

7,301,210

7,301,210

7,301,210

(20,376,017)

( )
(35,458,458)

(92,618,261)

(20,376,017)

(29,788,574)

(6,553,486)

(6,553,486)

(295,763)

(1,111,121)

(1,111,121)

(244,447)

(244,447)

2,297,697

(12,980,335)

(2,855,674)

(2,855,674)

(358,238)

(358,238)

(78,812)

(78,812)

(525,425)

(525,425)

(115,594)

(115,594)

(2,896,750)

(1,914,207)

(982,543)

(216,159)

(216,159)

(57,159,803)

(29,788,574)
(295,763)
(15,278,032)

()

111

The current accounting period


Temporary difference
Accounting Subject

Total Assets

Decrease

Increase

Balance at the
end of period

Deferred tax assets


(liabilities)

Deductible temporary differences


Allowances for impairment
losses
Impairment of available-for-sale
financial assets
Held-to-maturity financial
assets impairment
Other comprehensive income of
related enterprise equity

Bond repayment premium

Within
12
months

After 12
months

666,907

666,907

1,180,822

1,180,822

259,781

259,781

3,121,292

543,708

3,665,000

806,300

806,300

18,500

18,500

4,070

4,070

9,577,745

1,434,177

11,011,922

2,422,623

2,422,623

12,220,369

538,624

12,758,993

2,806,978

2,806,978

Other financial asset


impairment losses

24,677

24,677

5,429

5,429

Accrued Expenses (annual)

8,822

8,822

1,941

1,941

6,475,899

6,475,899

1,424,698

1,424,698

12,500,037

12,500,037

2,750,008

2,750,008

Held-to-maturity financial
assets

7,000,000

7,000,000

1,540,000

1,540,000

Long-term accrued interest

2,364,872

2,364,872

520,272

520,272

Foreign currency translation


loss

Improvement of leasehold
property rights

46,667

46,667

10,267

10,267

204,472

204,472

68,313

68,313

15,029

15,029

20,672

20,672

4,548

4,548

2,975,512

2,975,512

100,000
-

100,000
-

22,000
-

22,000
-

Loss carried forward

17,027,200

12,718,851

29,746,051

6,544,131

6,544,131

Sub-total

74,152,805

3,846,891

16,685,336

86,991,250

19,138,076

298,752

18,839,324

11,836,866

298,752

11,538,114

Recognized deferred tax asset

7,301,210

7,301,210

Deferred tax assets

7,301,210

7,301,210

(35,458,458 (92,618,261)
)
- (29,788,574)

(20,376,017)

(20,376,017)

(6,553,486)

(6,553,486)

(1,111,121
(1,111,121)
)
2,297,697 (12,980,335)

(244,447)

(244,447)

Repayment premiums
(preferred shares)
Convertible bonds (preferred
shares)

Account payable
Recovery provisions
Other current assets
Research and development

Unrecognized deferred tax asset

Taxable temporary differences


Investments
Equity with regards to related
parties earned surplus

Accrued Income
Discount bonds
Derivative gains
Account receivable
Convertible right adjustment
(preference shares)

(57,159,803
)
(29,788,574
)

(295,763)

(295,763)

(15,278,032
)
-

(2,855,674)

(2,855,674)

(358,238)

(358,238)

(78,812)

(78,812)

(525,425)

(525,425)

(115,594)

(115,594)

(2,896,750
)

(1,914,207
)

(982,543)

(216,159)

(216,159)

112

(GSC)

(22,889,363)

4,217,934

(27,107,297)

(5,963,605)

(5,963,605)

(GSC)

(12,256,965)

1,233,687

(13,490,652)

(2,967,943)

(2,967,943)

(20,672)

(10,336)

(2,274)

(2,274)

(35,176,217) (178,972,782)

(39,374,011)

(360,041)

(39,013,970)

(10,336)

(140,565,250)

3,231,315

(39,374,011)

(360,041)

(39,013,970)

(39,374,011)

(360,041)

(39,013,970)

()

(32,072,801)

(360,041)

(31,712,759)

()

12

12

( )
( )

825,529

826,332

667,710

666,907

146,720

146,720

786,957

1,444,273

657,316

565,000

2,556,292

3,121,292

686,684

686,684

8,500

10,000

18,500

4,070

4,070

(37,317,954)

(1,625,966)

45,269,734

9,577,746

2,107,104

2,107,104

12,220,369

12,220,369

2,688,481

2,688,481

6,475,899

6,475,899

1,424,698

1,424,698

12,500,037

12,500,037

2,750,008

2,750,008

7,000,000

7,000,000

1,540,000

1,540,000

2,364,872

2,364,872

520,272

520,272

2,975,512

2,975,512

654,613

654,613

204,472

204,472

44,984

44,984

()
()

10,079,135

6,948,065

17,027,200

3,745,984

3,745,984

3,492,447

644,639

71,304,998

74,152,806

16,313,618

146,720

16,166,898

9,457,761

146,720

9,311,041

6,855,857

6,855,857

6,855,857

6,855,857

( )

()
(GSC)

(25,232,363)

14,198,978

(17,728,462)

(57,159,803)

(12,575,157)

(12,575,157)

(453,335)

(30,241,909)

(29,788,574)

(6,553,486)

(6,553,486)

(950,043)

(892,262)

(237,982)

(295,763)

(65,068)

(65,068)

(15,278,032)

(15,278,032)

(3,361,167)

(4,603,150)

(1,706,400)

(2,896,750)

(637,285)

(637,285)

(23,908,885)

(1,019,522)

(22,889,363)

(5,035,660)

(5,035,660)

(3,361,167)

113

Convertible rights valuation


(Celltrion GSC)

(22,889,363
)

4,217,93
4

(27,107,297
)

(5,963,605
)

(5,963,605
)

Available-for-sale securities
(Celltrion GSC)

(12,256,965
)

1,233,68
7

(13,490,652
)

(2,967,943
)

(2,967,943
)

(10,336
)

(20,672
)

(10,336
)

(2,274
)

(2,274
)

(140,565,250
)

3,231,31
5

(35,176,217 (178,972,782
)
)

(39,374,011
)

(360,041
)

(39,013,970
)

(39,374,011
)
(39,374,011
)
(32,072,801
)

(360,041
)
(360,041
)
(360,041
)

(39,013,970
)
(39,013,970
)
(31,712,759
)

Improvement of leasehold
property rights
SubTotal

Unrecognized deferred tax liabilities


Recognized deferred tax liabilities
Deferred tax liabilities
Deferred tax assets (liabilities)

The previous accouting period


Temporary difference
Accounting Subject Balance at the
beginning of
year

Decrease

Balance at the
Increase end of period

Deferred tax
assets(liabilities)
(unaudited)

Within 12 After 12 months


months

Deductible temporary differences


Allowances for impairment
l
Accrued expenses

825,529

826,332

667,710

666,907

146,720

146,720

786,957

1,444,273

657,316

Impairment of available-forsale financial assets

565,000

2,556,292

3,121,292

686,684

686,684

8,500

10,000

18,500

4,070

4,070

(37,317,954)

(1,625,966)

45,269,734

9,577,746

2,107,104

2,107,104

12,220,369

12,220,369

2,688,481

2,688,481

6,475,899

6,475,899

1,424,698

1,424,698

12,500,037

12,500,037

2,750,008

2,750,008

Held-to-maturity Investment

7,000,000

7,000,000

1,540,000

1,540,000

Long-term accrued interest

2,364,872

2,364,872

520,272

520,272

R&D Expense

2,975,512

2,975,512

654,613

654,613

Account payable

204,472

204,472

44,984

44,984

10,079,135

6,948,065

17,027,200

3,745,984

3,745,984

3,492,447

644,639

71,304,998

74,152,806

Held-to-maturity financial
assets impairment

Other comprehensive income


of related enterprise equity
Bond repayment premium
Reimbursement
expense(preference shares)
Convertible corporate
Bonds(preference shares)

Loss carried forward


Sub-Total

16,313,618

146,720

16,166,898

Unrecognized deferred tax asset

9,457,761

146,720

9,311,041

Recognized deferred tax asset

6,855,857

6,855,857

Deferred tax assets

6,855,857

6,855,857

Taxable temporary differences


Investments
Equity of subsidiariess
earnings
Accrued Income
Discount bonds
Convertible right adjustment
(preference shares)
Convertible rights valuation
(Celltrion GSC)

(25,232,363)

14,198,978

(17,728,462)

(57,159,803)

(12,575,157)

(12,575,157)

(453,335)

(30,241,909)

(29,788,574)

(6,553,486)

(6,553,486)

(950,043)

(892,262)

(237,982)

(295,763)

(65,068)

(65,068)

(15,278,032)

(15,278,032)

(3,361,167)

(3,361,167)

(4,603,150)

(1,706,400)

(2,896,750)

(637,285)

(637,285)

(23,908,885)

(1,019,522)

(22,889,363)

(5,035,660)

(5,035,660)

114

(GSC)

(10,740,184)

1,516,781

(12,256,965)

(2,696,532)

(2,696,532)

(65,434,625)

11,644,240

(63,486,385)

(140,565,250)

(30,924,355)

(65,068)

(30,859,287)

(30,924,355)

(65,068)

(30,859,287)

(30,924,355)

(65,068)

(30,859,287)

()

(24,068,498)

(65,068)

(24,003,430)

.

11,836,866 9,457,761 .
.

(:).

2008

2,626,682

2013 12 31

2009

4,307,204

2019 12 31

2010

3,145,249

2020 12 31

2011

6,948,065

2021 12 31

2012

12,718,851

2022 12 31

29,746,051

.
(:
).

( )

18,776,652

(4,130,863)

20,210,829

(4,446,382)

(12,758,993)

2,806,978

(12,220,369)

2,688,481

12,980,335

(3,407,876)

15,278,032

(3,361,167)

2,750,468

(605,103)

1,516,781

(333,692)

21,748,462

(4,784,693)

(5,770,791)

(5,452,760)

115

Available-for-sale securities
(Celltrion GSC)
SubTotal

(10,740,184
)
(65,434,625
)

1,516,78
1
11,644,24
0

(12,256,965
)
(63,486,385 (140,565,250
)
)

Unrecognized deferred tax liabilities


Recognized deferred tax liabilities
Deferred tax liabilities
Deferred tax assets (liabilities)

(2,696,532
)
(30,924,355
)

(65,068
)

(2,696,532
)
(30,859,287
)

(30,924,355
)
(30,924,355
)
(24,068,498
)

(65,068
)
(65,068
)
(65,068
)

(30,859,287
)
(30,859,287
)
(24,003,430
)

(d)Details of feasibility study of realization of deferred income tax assets


According to the feasibility study of the defferd income tax assets, the uncertain defferd income
tax assets in the current and the previous accounting period are respectively 11,836,866 KRW 000
and 9,457,761 KRW 000.
The amount and due date of deductible tax losses that have not been recognized as deferred tax
assets.
The amount and due date of deductible tax losses that have not been recognized as deferred tax
assets are as follows: (Unit: KRW 000)
Issued year

Amount

Maturity date

2008

2,626,682

Dec. 31st, 2013

2009

4,307,204

Dec. 31st, 2019

2010

3,145,249

Dec. 31st, 2020

2011

6,948,065

Dec. 31st, 2021

2012

12,718,851

Dec. 31st, 2022

Total

29,746,051

The details about deferred income taxes directly applied to or deducted from the capital projects
As of the end of the current reporting period, the deferred income taxes directly applied to or deducted from the
capital projects. (Unit: KRW 000)
The current accounting period
Accounting subject
Investments

Amount

The previous accounting period

Deferred income tax Amount

Deferred income tax

18,776,652

(4,130,863)

20,210,829

(4,446,382)

Bond repayment premium

(12,758,993)

2,806,978

(12,220,369)

2,688,481

Discount on issuance of
corporate Bond
Available-for-sale financial
assets

12,980,335

(3,407,876)

15,278,032

(3,361,167)

2,750,468

(605,103)

1,516,781

(333,692)

Total

21,748,462

(4,784,693)

(5,770,791)

(5,452,760)

116

23.
. (: ).

( )
34,444,106

32,709,237

209,019

23,415

1,168,091

1,359,390

2,677,809

38,690,324

33,900,743

. (: ).

( )
374,995

18,044

1,432,070

14,157

2,047,949

2,652,388

5,075,332

1,464,271

117

23. Sales revenues and sales costs


The sales revenues of the company in the current and the previous accounting periods are as follows: (Unit:
KRW 000)
Accounting
Current accounting period
Previous accounting period
(unaudited)

Equity increase with respect to related


parties profit or loss

34,444,106

32,709,237

209,019

Product revenue

23,415

Service revenue

1,168,091

Broadcasting revenue

1,359,390

Event revenue

2,677,809

38,690,324

33,900,743

Gain on disposal of investment in


subsidiaries

Total

The sales costs of the company in the current and the previous accounting periods are as follows: (Unit: KRW
000)
Accounting subject

Loss from associates

Current accounting period

Previous accounting period


(audited)
374,995

18,044

Loss from disposal of investments in


associates

1,432,070

Cost of goods sales

14,157

Broadcasting Cost of goods sold

2,047,949

Event Cost of goods sold

2,652,388

Total

5,075,332

1,464,271

118

24.
(: ).

( )
1,085,553

1,532,178

233,919

87,583

75,854

104,672

24,977

48,629

93,096

47,896

14,303

42,971

25,017

213,073

13,783

234,478

85,370

15,336

12,688

77,633

44,237

11,280

76,764

1,218

214,368

111,929

36,485

286,574

283,579

2,522,194

2,613,249

119

24. Sales and administrative expenses


The sales and administrative expenses of the company in the current and previous periods are as follows (KRW
000)
Accounting subjects
Salary

Current accounting period

Previous accounting period


(unaudited)

1,085,553

1,532,178

Retirement Benefits

233,919

87,583

Employee benefits

75,854

104,672

Travel transportation

24,977

48,629

Entertainment

93,096

47,896

Electricity fee

14,303

Tax and Dues

42,971

25,017

Depreciation

213,073

13,783

Rent payments

234,478

85,370

Premium

15,336

12,688

Vehicle Maintenance

77,633

44,237

Fees

11,280

76,764

Amortization

1,218

214,368

Service fees

111,929

36,485

Etc.

286,574

283,579

2,522,194

2,613,249

Total

120

25.
(: ).

( )
-

14,157

1,859,118

1,724,433

3,140,166

36,485

449,457

245,805

42,971

25,017

783,106

85,370

248,521

13,783

1,218

214,368

697,973

267,989

7,222,530

2,627,407

26.

(: ).

( )

159,020

178

821,889

178

980,909

11,000

50,000

603,246

642

27,900

18,041

2,975,512

100,000

7,153

13,508

749,299

3,057,703

121

25. Expenses division


The expenses divisions of the company in the current and previous periods are as follows (Unit: KRW 000)
Division
Current accounting
Previous accounting period
period
Changes in inventories

Employee benefits

1,859,118

Service fees

3,140,166

Fees

14,157
1,724,433
36,485

449,457

245,805

42,971

25,017

Rent fees

783,106

85,370

Depreciation

248,521

13,783

Amortization

1,218

214,368

697,973

267,989

Tax and Dues

Other fees
Total

7,222,530

2,627,407

26. Other incomes and costs


The other incomes and costs of the company in the current and previous periods are as follows (Unit: KRW 000)

Division

Current accounting
period

Previous accounting period

Other Revenue
Reverse of bad debt allowance

159,020

Miscellaneous revenue

178

821,889

Total

178

980,909

11,000

50,000

603,246

642

27,900

Loss on disposal of tangible assets

18,041

Impairment loss of intangible assets

2,975,512

100,000

7,153

13,508

749,299

3,057,703

Other costs
Donations
Other bad debt expenses
Service fees

Other current assets impairment


Other losses
Total

122

27.
. (: ).

( )

1,909,447

938,018

3,694,718

4,576,172

325,000

565

2,009

10,505,902

940,027

. (: ).

( )
18,275,395

11,392,195

24,677

1,019,522

543,708

1,461,292

5,000

325,000

96

19,168,879

13,878,009

. (: ).

/(*1)

6,368,1
69

(
)
(121,12
2)

3,151,0
10

(1,456,29
2)

1,791,9
97

(
)
898,40
0

(543,70
8)

(
)

(
)
(1,019,52
2)

4,576,1
72

(1,461,29
2)

3,694,7
18

(5,00
0)

(5,00
0)

93,23
8

41,62
7

117,45
0

39,61
8

(24,67
7)

465

2,009

(18,275,3
94)
(8,662,97
7)

(11,392,1
95)

(18,275,3
94)

(11,392,1
95)

(12,937,9
82)

(16,365,9
47)

(10,454,1
77)

(568,38
5)

(1,466,29
2)

8,271,3
55

(1,017,51
3)

(*1) / .

123

27. Financial Incomes and costs


The financial incomes in the current and the previous periods are as follows (Unit: KRW 000)
Division

Current accounting
period

Previous accounting period


(unaudited)

Interest income

1,909,447

938,018

Profit from conversion

3,694,718

Derivative gains

4,576,172

325,000

565

2,009

10,505,902

940,027

Financial guarantee income


Currency arbitrage
Total

The financial costs in the current and the previous periods are as follows (Unit: KRW 000)
Division

Current accounting
period

Interest expense

Previous accounting period


(unaudited)
18,275,395

11,392,195

24,677

1,019,522

Impairment loss of available-forsale financial assets

543,708

1,461,292

Held-to-maturity financial assets


impairment

5,000

325,000

96

19,168,879

13,878,009

Other financial asset impairment


losses
Loss on valuation of derivatives

Financial guarantee expenses


Foreign currency translation loss
Loss on foreign currency
transactions
Total

The financial income and costs in the current and the previous periods are as follows (Unit: KRW 000)

Division
Current profit
and loss of
financial assets
Available-forsale financial
Held-to-maturity
financial assets

Net profit loss


Interest income /
Impairment
Curren
Curre
Curre Previou
Previous
Previous
t
nt
nt
accounti
accounti
s
accou
accou
accou accounti
ng
ng
6,368,
(121,1
1,791,
898,
169
22)
997
400

Other income /
Curre Previous
nt
accounti
accou ng
- 4,576,
(1,019,
172
522)

3,151,
010

(1,456,
292)

(543,7
08)

(1,461,
292)

3,694,
718

(5,0
00)

(5,0
00)

Loans and
Financial
liabilities

93,2
(18,275,
394)

41,6
117,
(11,392, (18,275,
195)
394)

39,6
(11,392,
195)

(24,6
-

465
-

2,009
-

Total

(8,662,
977)

(12,937, (16,365,
982)
947)

(10,454, (568,3
177)
85)

(1,466,
292)

8,271,
355

(1,017,
513)

*1It includes the interest incomes/costs caused by the effective interest rate depreciation
124

28.
(: ).

( )
1,467,342

1,474,978

16,933

54,000

9,556

3,200

233,919

87,583

131,368

104,672

1,859,118

1,724,433

29.

. (: ).

( )
13,560,498

8,528,056

248,521

13,783

1,218

214,368

2,975,511

603,246

642

(4,576,172)

1,019,522

(159,020)

543,708

1,461,292

5,000

1,432,070

(34,444,106)

(32,709,237)

374,995

18,044

(209,019)

(3,694,718)

18,041

24,677

100,000

(1,909,447)

(938,018)

125

28. Employee Compensation


The employee compensations of the company in the current and previous periods are as follows (Unit: KRW 000)
Division
Current accounting
Previous accounting period
period
(unaudited)
Salary

1,467,342

1,474,978

16,933

54,000

Sundry payments

9,556

3,200

Retirement Salary

233,919

87,583

Employee benefits

131,368

104,672

1,859,118

1,724,433

Bonuses

Total
29. Details of the Cash Flow Statement

Adjustment of operating cash flow and net working capital changes are as follows: (Unit KRW 000)

Accounting subject
Net Income

Current accounting period

Previous accounting
period(unaudited)

13,560,498

8,528,056

Depreciation

248,521

13,783

Amortization

1,218

214,368

2,975,511

603,246

642

(4,576,172)

Loss on valuation of derivatives

1,019,522

Reverse of bad debt allowance

(159,020)

543,708

1,461,292

Held-to-maturity financial assets impairment

5,000

Loss on disposal of investments in associates

1,432,070

(34,444,106)

(32,709,237)

374,995

18,044

(209,019)

(3,694,718)

18,041

24,677

100,000

(1,909,447)

(938,018)

Adjustment Items:

Impairment of intangible assets


Other bad debt expenses
Derivative gains

Available-for-sale financial assets impirement

Equity with regards to related parties profit


Equity with regards to related parties loss
Gain on disposal of investment in subsidiaries
Profit from conversion
Loss on disposal of tangible assets
Other financial asset impairment losses
Other current assets impairment
Interest income

126

18,275,395

11,392,195

8,120,200

6,280,392

(16,541,499)

(8,975,415)

(579,298)

13,588

98,127

521,520

(4,208,792)

(129,306)

489,429

(165,000)

340,397

(1,493,925)

(3,860,137)

(1,253,123)

(6,841,138)

(1,700,482)

. (:).

( )

17,279,856

2,250,000

9,000,000

9,000,000

46,709

(672,686)

127

Interest expense

18,275,395

11,392,195

8,120,200

6,280,392

(16,541,499)

(8,975,415)

(579,298)

13,588

98,127

521,520

(4,208,792)

(129,306)

Trade payables

489,429

(165,000)

Other debt payments

340,397

(1,493,925)

Total changes in net working capital

(3,860,137)

(1,253,123)

Cash generated from operations

(6,841,138)

(1,700,482)

Foreign currency translation loss


Income tax expense
Total adjustment items
Changes in net working capital
Accounts Receivable
Other receivables
Other current assets

The important trades without cash flow in the current and the previous periods are as follows (Unit: KRW 000)

Division

Transition to Investments in available-for-sale financial


assets

Current
accounting
period

Previous accounting
period (unaudited)

17,279,856

Accounts payables at the time of acquiring stock


investment of subsidiaries

2,250,000

Alternative liquidity of long-term debt

9,000,000

9,000,000

46,709

(672,686)

Consideration for conversion rights recognized as


deffered

128

30.
.
(:).

() 4,395,583

(*1)

34,991,000

(*2)

7,000,000

() 2,000,000

13,500,000

() 1,582,304

15,000,000

() 289,856
() 390,244

9,000,000

() 200,000

2,999,924

() 354,882

7,000,000

() 825,000

NH

12,000,000

() 880,000

7,000,000

() 3,210,000

48,000,000

() 2,200,000

40,000,000

() 2,763,386

40,000,000

() 750,470

10,000,000

1,500,000

() 690,000

, , (*3)
() 31,500

- 3

1,000,000 (*3)

- 3

247,990,924

(*1) ()
42,515,000 .
(*2) ()
14,000,000 .
(*3) 1,920,000 ,
1,200,000 .

129

30. Mortgage Assets


Details of the Mortgage assets of the company
As of the end of the current accounting period, the mortgage assets are as follows (Unit: KRW 000)
Mortgage assets
4,395,583 shares of Celltrion stock
690,000shares of Celltrion stock

Mortgage
providers
Wori Bank(*1)
Shinhan Capital(*2)

Debt Balance

Details

34,991,000
7,000,000

Mortgage loans
Mortgage loans

2,000,000 shares of Celltrion stock

Hana Bank

13,500,000

Mortgage loans

1,582,304 shares of Celltrion stock

Samsung
Securities

15,000,000

Mortgage loans

9,000,000

Mortgage loans

2,999,924

Mortgage loans

7,000,000

Mortgage loans

12,000,000

Mortgage loans

7,000,000

Mortgage loans

National
Agricultural
Cooperative
Federation
Korea Securities
Finance

48,000,000

Mortgage loans

40,000,000

Mortgage loans

Daewoo Securities

40,000,000

Mortgage loans

10,000,000

Mortgage loans

1,500,000

Mortgage loans

289,856 shares of Celltrion stock


390,244 shares of Celltrion Pharm
stock
200,000 shares of Celltrion stock

Hyundai Securities

354,882 shares of Celltrion stock

Eugene Investment
& Securities

Meritz Securities

825,000 shares of Celltrion stock

NH CAPITAL

880,000 shares of Celltrion stock

Hanwha
Securities

3,210,000 shares of Celltrion stock

2,200,000 shares of Celltrion stock


2,763,386 shares of Celltrion stock
750,470 shares of Celltrion stock

Kyungnam
Bank

Land, buildings , machinery (*3)

National
Agricultural
Cooperative
Federation

31,500 shares of Celltrion stock

Ace Savings Bank

- Third party guarantee

Time deposits KRW 1 BN(*3)

National
Agricultural
Cooperative
Federation

- Third party guarantee

Total

247,990,924

(*1) Related to the mortgage assets above, the company and the Celltrion GSC have joint guarantee
obligations on the KRW 42,515,000 KRW 000 borrowed from the Woori Bank.
(*2) Related to the mortgage assets above, the company and the Celltrion GSC have joint guarantee obligations
on the 14,000,000 KRW 000 borrowed from the New Korea Capital.
(*3) The Debts ceiling of the above mortgage assets such as the land is 1,920,000 KRW 000. The mortgage
quota of the fixed deposit is 1,200,000 KRW 000.
130

.
(:).

()

() 3,827,319 (*1)

() 60,000

()

() 690,000 (*2)

34,991,000

7,000,000

(*1) ()
3,077,319 750,000 3,827,319
.
(*2) ()
.

() 5,636 .
.
(:).

() 31,500

()

1,000,000

() 3,645,583 (*)

() 690,000 (*)

(*) ()
.

131

(b)As of the end of the current period, the collateral received from others are as follows (Unit: KRW 000)

Mortgage
Providers
Celltrion GSC
CEO

Collateral
details

Borrowing
Sources

3,827,319 shares of Celltrion (*1)

Wori Bank

34,991,000 Mortgage loans

Shinhan Capital

7,000,000 Mortgage loans

60,000 shares of Celltrion Healthcare

Celltrion GSC

690,000 shaes of Celltrion(*2)

Loan amount Details

(*1) GSC provided 3,077,319 shares as the collateral of joint guarantee obligations on borrowing. With the
other 750,000 shares, there are 3,827,319 shares in total.
(*2) The collateral related to borrowing on joint guarantee obligations between the company and Celltrion GSC.
In addition to the above collateral obtained by the financial institutions, the CEO and others provided 5,636
shares of Celltrion Healthcare as the collateral of the loans.
Details of the collateral provided to others
As of the end of the current period, the collateral provided to others are as follows. (Unit: KRW 000)
Receiver
A third party
A third party

Celltrion GSC

Collateral
details
31,500 shares of Celltrion

Borrowing
Sources

Details

Ace Savings Bank

Mortgage loans

National
Agricultural
Cooperative
Federation
3,645,583 shares of Celltrion
Wori Bank

Mortgage loans

Time deposits 1 BN

690,000 shares of Celltrion

Shinhan

Mortgage loans
Mortgage loans

(*) The collateral related to borrowing on joint guarantee obligations between the company and Celltrion GSC

132

.
(:).

34,991,000

, ()

() 7,524,000

()

7,000,000

, ()

13,500,000

, ()

43,800,000

() 7,000,000

, () (
) .
31.
.
.

()
()
()

()
()
()

()
()

()

()

()

()

()

()

. (:)

( )

3,545,588

229,291

1,916,252

10,090

961,469

1,164,430

482,532

1,404,461

4,507,057

1,393,721

2,398,783

1,414,551

133

(d) The payment collateral


As of the end of the current period, the payment collateral recieved from others are as follows (Unit: KRW 000)
Borrowing
Sources

Amoun
t

Woori
Bank

Insurance provider

34,991,
000

Shinhan
Capital

7,000,0
00

Hana
Bank

13,500,
000

Convertible
bonds

43,800,
000

Details

CEO of Celltrion GSC and Celltrion


Healthcare
CEO of Celltrion GSC

Celltrion GSC borrowings of 7,524,000 and


responsibility of joint and several guarantee

Celltrion GSC borrowings of 7,524,000 and


responsibility of joint and several guarantee

CEO of Celltrion Healthcare


CEO of this
company

The company undertakes the joint guarantee obligation for Celltrion Healthcare and the loans before spinning off
(including contingent liabilities before spinning off). Celltrion Holdings is the remaining enterprise of the
consolidated company after the spin-off.
31. Transactions with special related parties
Special related parties in the current and the previous period and the transactions with them are
as follows:
(a)Special related parties
Division

Corporate Relations

Current
accounting period

End of previous
accounting period

Celltr
ion
Celltrion
Pharm
Celltrio
n ST

Celltrion
Celltrion
Pharm

Celltrion
Healthcare
Celltrion GSC
Shareholders
and Employees

Etc.

Beginning of
previous
accounting period
Celltrion
Celltrion Pharm
Celltrion DBI

Celltrion Healthcare
Celltrion GSC
Shareholders and
Employees

Celltrion Healthcare
Celltrion GSC
Shareholders and
Employees

(b)Major transactions with special related parties (Unit: KRW 000)


Division

Current accounting period


Revenues

Corporate Relations
Other related parties
Total

Previous accounting period (unaudited)


Costs

Revenues

Costs

3,545,588

229,291

1,916,252

10,090

961,469

1,164,430

482,532

1,404,461

4,507,057

1,393,721

2,398,783

1,414,551
134

. (:)

( )

23,375

17,408

102,448

26,337,075

19,867,255

36,543,582

23,382,145

18,653,126

17,436,468

26,360,450

19,867,255

36,560,990

23,484,593

18,653,126

17,436,468

( )

. (:)

(%)
8.5

( )

( )
-

11,827,147

24,140,000

7,594,857

(363,478)

11,827,147

24,140,000

7,594,857

65,229

485,957

45,726

24,273

(65,229)

485,957

45,726

24,273

13,490,652

12,256,965

10,740,184

19,306,459

21,600,291

11,109,134

6.9~8.5
-

363,478

(*)

6.9

(*) ()
.
.
() 60,000 , ()
4,517,319 , ()
5,636 ( 30 ).
.
() 4,335,583 ( 30
).

135

(c)Details of the main receivables and payables resulting from the transactions with special related parties (Unit:
KRW 000)
Division

Current accounting
period

Bonds
Corporate Relations

The end of previous accounting period The beginning of previous accounting


(unaudited)
period (unaudited)

Debts

Bonds

Debts

Bonds

Debts

23,375

17,408

102,448

Other related parties

26,337,075

19,867,255

36,543,582

23,382,145

18,653,126

17,436,468

Total

26,360,450

19,867,255

36,560,990

23,484,593

18,653,126

17,436,468

(d)Receivables and payables on the financial arrangements with special related partiesUnit: KRW 000
Subject

Division

Current
accounting
period
Interest
rate (%)

11,827,147

24,140,000

7,594,857

(363,478)

11,827,147

24,140,000

7,594,857

65,229

Other related
parties

485,957

45,726

24,273

Allowance for
doubtful accounts

(65,229)

Subtotal

485,957

45,726

24,273

13,490,652

12,256,965

10,740,184

19,306,459

21,600,291

11,109,134

Other related
parties

8.5
6.9~8.5

Allowance for
doubtful accounts

Bonds

Subtotal
Corporate Relations
Accrued income

Available-for-sale
financial assets
Debts

The beginning of the


previous accounting
period (unaudited)

363,478

Corporate Relations
Loans

The end of the


The end of the
current accounting previous accounting
period
period (unaudited)

Other related
parties

Short-term borrowings Other related


parties

6.9

(*)Stocks of Celltrion Healthcare are used as collateral of short-term loans to other special related parties
(e)Details of collateral and guarantees received from special related parties
As of the end of the current period, the company acquires 60,000 Celltrion Healthcare shares from special related
parties and 4,517,319 Celltrion Healthcare shares for the purpose of guaranteeing the borrowings, and acquires
5,636 Celltrion Healthcare shares for the purpose of guaranteeing the short-term loans (See Note 30 for
reference).
(f)Guarantees provided to special related parties
As of the end of current period, 4,335,583 shares of Celltrion are provided to special related parties as collateral.
(See Note 30 for reference)
136

.
(: ).

( )
1,151,851

1,633,650

75,854

87,583

1,227,705

1,721,233

32.

(1)
2,500,000
25% , 100%
.
2,007,466 . 2,007,466
492,534 .
(2)
.
33.
2 , 1101
' '
.
3 2012 12 31
2011 12
31 2011 1 1 ( )
.
. 1101


1101
, .
(1)

.

137

(g)Compensation for key management personnel


Compensation for key management personnel of the Company during the previous and the current period are as
follows: (Unit: KRW 000)
Division
Current accounting
Previous accounting period
period
(unaudited)
Salary and other short-term employee
benefits
Retirement Salary
Total

1,151,851

1,633,650

75,854

87,583

1,227,705

1,721,233

32. Transaction with minority stakes


(1) Acquiring additional shares in subsidiaries
At the end of the current period, the company acquires additional 25% shares of Dreamenms nondominated
equity of Celltrion Holdings with KRW 2,500,000,000. So the company has 100% shares of Dreamenm. The
book value of the investment [Minority stake (non-dominated equity)] to Dreamenm of Celltrion Holdings is
KRW 2,007,466,000. This amount is eliminated from the financial statement because of the transaction
above. The value of KWB 492,534,000 (From holding companies) is eliminated from the capital belonging to
minority shareholders in the holdings.
2When disposing the subsidiaries shares without loss of control, there is no transaction with minority equity
(Nondominated equity) in the current and previous period.
33. Conversion to the K-IFRS
According to Note 2, No.1101 article of corporation accounting standard the initial adoption of K-IFRS is
applied to the financial statement.

The accounting policies are applied to the financial statement ending at Dec. 31st, 2012, the comparative
information in the financial statement ending at Dec. 31st, 2011 and the public list of the financial statement
of K-IFRS on Jan.1st, 2011.
(a)The selective application of exemptions in No.1101 article in K-IFRS
According to K-IFRS, we can choose one or more exemptions in No.1101 article of corporation accounting
standard to make the financial statement with K-IFRS accouting standard.
The exemptions chosen by the company are as follows:
(1) The company
consolidation
The company consolidation before the convension date of K-IFRS will not be made into forms.

138

(2)

.
.
.
(1)
2004 1 1

1039 ': ' . 2004 1 1


,
.
(2)
(2011 1 1 )

( ) .
.

.
(1) 2011 1 1
(: ).

255,306,196

159,406,721

95,899,475

(31,986,075)

(20,091,246)

(11,894,828)

23,908,885

23,908,885

1,375,312

1,375,312

(*4)

14,372,786

(14,372,786)

(*5)

6,575,216

(6,575,216)

(6,701,878)

856,756

(7,558,633)

248,604,318

160,263,477

88,340,842

:
(*1)
(*2)
(*3)

139

(2) The investment shares of the subsidiaries and associated companies


As one of the holding companies, the company prepares the separate financial statement (the investment
shares of the subsidiaries and the related companies) according to K-IFRS and the fair value on the
conversion date is taken as the original price to measure.
The application of compulsory exceptional projects in the negative application of other articles of corporation
accounting standard
33. Conversion to the K-IFRS
The following provisions are applied to the company
(1)

Derecognition of financial assets

As for the transfer transactions of financial assets which occur after Jan.1st in 2004, the derecognition
requirements in No. 1039, "Financial Instruments: Recognition and Measurement" are applied to the company.
So the disposal of the financial assets according to GAAP before Jan.1st, 2004 will not be traced back to change
if the K-IFRS is not applied.

(2)
The exception of the estimation
At the conversion date of K-IFRS (Jan 1st,2011), the estimation applies to K-IFRS. If there is no evidence
showing something wrong, we will continue using the accounting standard in the previous period.

The difference modification of capital caused by conversion of K-IFRS


Influences on the financial situation of company induced by the conversion from GAAP to K-IFRS are as
follows.
The K-IFRS conversions influence on the companys financial situation on the conversion date Jan.1st, 2011
are as follows: (Unit: KRW 000)
Division
Total assets
Total liabilities
Total equity
Generally accepted accounting principles in the past,
South Korea
Adjustments:
Consolidation scope changes (1)
Embedded derivatives valuation (* 2)
The fair value assessment of available-for-sale financial
assets (*3)
Financial liabilities for the redeemable convertible
preference shares (* 4)
Deferred income tax changes and tax effects (* 5)
Adjustments Total
Korea International Financial Reporting Standards

255,306,19
6

159,406,72
1

95,899,47
5

(31,986,075
23,908,88)

(20,091,246
-)

(11,894,828
23,908,88)

5
1,375,31
2
-

(6,701,878
248,604,31)
8

14,372,78
6

5
1,375,31
2
(14,372,786
)

6,575,21
6
856,75

(6,575,216
(7,558,633)

6
160,263,47
7

88,340,84)
2

140

(*1)
(*2) ()
(*3)
(*4)
(*5)
(2) 2011 12 31
(: ).

277,777,067

190,340,805

87,436,262

(99,972)

2,630,494

(2,730,466)

(*2)

11,579,411

11,579,411

(*3)

22,889,363

22,889,363

2,892,093

2,892,093

(*5)

16,079,186

(16,079,186)

(*6)

8,856,676

(8,856,676)

37,260,895

27,566,356

9,694,539

315,037,962

217,907,161

97,130,801

:
(*1)

(*4)

(*1)
(*2)
(*3) ()
(*4)
(*5)
(*6)
(3) 2011
(: ).

9,538,352

339,216

(23,216,702)

2,110,009

(1,734,149)

18,515,606

(*2)

18,174,862

18,174,862

18,174,862

(*3)

(1,019,522)

(1,019,522)

(*4)

1,183,089

(*5)

(1,706,400)

(1,706,400)

(*6)

(5,525,952)

(5,525,952)

20,284,871

8,188,839

29,621,683

29,823,223

8,528,055

6,404,981


:
(*1)

141

(*1) The change of the subsidiaries caused by K-IFRS


(*2) Estimate and confirm the fair value on the combined financial instruments interior derivatives the value
of conversion rights
(*3) Estimate and confirm the fair value of the available-for-sale financial assests.
(*4) Assess the fair value of the preferred stocks and confirm related financial liabilities
(*5) The modification of deffered income tax caused by the difference between the previous accounting policies
and the K-IFRS
(2) The influences on the companys financial situation induced by the introduction of K-IFRS in the current
period on Dec.31st, 2011 are as follows. (Unit: KRW 000)
Division
Total assets
Total liabilities
Total equity
Generally accepted accounting principles in the past,
South Korea
Adjustments:

277,777,06
7

190,340,80
5

87,436,26
2

(99,972
11,579,41)

2,630,49
4
-

(2,730,466
11,579,41)

Consolidation scope changes (*1)


Investments Changes (*2)

1
22,889,36
3
2,892,09

Embedded derivatives valuation (*3)


The fair value assessment of available-for-sale financial
assets (*4)
Financial liabilities for the redeemable convertible
preference shares (* 5)
Deferred income tax changes and tax effects (* 6)
Adjustments total
Korea International Financial Reporting Standards

3
37,260,89
5
315,037,96
2

1
22,889,36
3
2,892,09

16,079,18
6
8,856,67
6
27,566,35

3
(16,079,186
)
(8,856,676
9,694,53)

6
217,907,16
1

9
97,130,80
1

(*1) The change of the subsidiaries cansed by K-IFRS


(*2) The unimpaired goodwill caused by the associate
companies investment
(*3) Estimate and confirm the fair value on the combined financial instruments interior
derivatives the value of conversion rights
(*4) Assess the fair value of the preferred stocks and confirm related financial liabilities
(*5) Assess the fair value of the preferred stocks and confirm related financial liabilities
(*6) The modification of deffered income tax caused by the difference between the previous accounting policies
and the K-IFRS
2The influences on the companys operating outcomes in 2011-the base year-induced by the introduction
of K-IFRS are as follows. (Unit: KRW 000)
Division

Operating profit Net income


and loss
9,538,35
2

339,21
6

(23,216,702
)

2,110,00
9
18,174,86

(1,734,149
)18,174,86

18,515,60
6
18,174,86

Generally accepted accounting principles in the past,


South Korea
Adjustments:
Consolidation scope changes (*1)
Related company investments Changes (*2)
Embedded derivatives valuation (*3)

Korea International Financial Reporting Standards

The fair value assessment of available-for-sale financial


assets (*4)
Financial liabilities for the redeemable convertible
preference shares (* 5)
Deferred income tax changes and tax effects (* 6)
Total adjustments

Total
comprehensive
income

20,284,87
1
29,823,22
3

2
(1,019,522
)
(1,706,400
)
(5,525,952
) 8,188,83
9
8,528,05
5

2
(1,019,522
) 1,183,08
9
(1,706,400
)
(5,525,952
)29,621,68
36,404,98
1

142

(*1)
(*2)
(*3) ()
(*4)
(*5)
(*6)
.

, , ()
() .

.
34.
.
.

2011 8 16


. 2011 8 16 2005 9 12
100%
.
.
.
36,365,714 .
.
.

.
.
.

.
143

(*1) The change of the subsidiaries caused by K-IFRS


(*2) The unimpaired goodwill caused by the associate
companies investment
(*3) Estimate and confirm the fair value on the combined financial instruments interior
derivatives the value of conversion rights
(*4) Assess the fair value of the preferred stocks and confirm related financial liabilities
(*5) Assess the fair value of the preferred stocks and confirm related financial liabilities
(*6) The modification of deffered income tax caused by the difference between the previous accounting policies
and the K-IFRS
The explanation of some important modification of the cash flow statement
According to the K-IFRS, we should modify some cash flow of related income (expenses) and assets (liabilities)
when putting the interests collection, payment and income tax, which were not separately listed according to
the previous accounting standard, into separate list of the cash flow statement.
Except the difference above, there is no difference between the cash flow statement according to the
International Accounting Standards (K-IFRS) and the cash flow statement presented in accordance with
previous accounting guidelines adopted in Korea.
34. Business combination
(a) M&A transactions
The consolidated transactions in the previous period are as follow.
The merged company
Celltrion Venture Capital

Major business activities


Small business investment

Merger days
Aug. 16th, 2011

As a holding company, to satisfy the requirement of the Fair Trading Act at the previous period, the company
consolidates the Celltrion Holdings. The consolidation date was Aug.16th, 2011. However, the company didnt
have the actual 100% controlling stake until Sep.12nd, 2005. Therefore, we finished the consolidation between
companies under the same control at this time.
(b)The fair value of the merger price
The company did not issue new stocks when consolidating. Therefore, the book value of the Celltrion Holdings
associate company investment owned before -KRW 36,365,714,000 was eliminated when consolidating. In
addition, this merger transaction did not lead to the net cash outflow.
The fair value of obtained assets and received liabilities caused by consolidation on the acquision day
(c) Fair value of assets and liabilities acquired for M&A
The consolidation between the holdings and subsidiaries happening in the previous period belonged to the
consolidations under the same control and would be treated with the cost method. Therefore, the value of
obtained assets and received liabilities are consistent with the book value on the consolidated companys financial
statement on the combination date.
(d)The Goodwill induced by the merger transaction
Because the goodwill of Celltrion Holdings is fully depreciated, there is no goodwill to be recognized during the
merger period.

144

.

(:).
(1)

2011 8 16

2010 12 31
478,352

554,357

84,107,804

78,824,767

84,586,156

79,379,124

43,594,352

42,867,383

4,626,089

4,041,964

48,220,441

46,909,347

5,437,695

5,437,695

9,557,198

9,557,198

9,491,616

9,584,060

11,879,206

7,890,824

36,365,715

32,469,777

84,586,156

79,379,124

(2)

2011 1 1

2010 1 1

2011 8 16

2010 12 31

7,378,123

20,224,853

181,109

282,918

7,197,014

19,941,935

32,326

86,163

2,049,561

4,459,665

5,179,779

15,568,433

738,063

1,148,324

4,441,716

14,420,109

()
. ,
,
.

145

(e)The summaries of the balance sheet and the income statement of the consolidated companies
The summaries of the balance sheet and the income statement of the consolidated companies from the
previous period to the merger day are as follows (KRW 000):
(1) Summary of the Balance Sheet
Accounting
subject
Working capital

Aug. 16th, 2011

Dec. 31st, 2010


478,352

554,357

Non-current assets

84,107,804

78,824,767

Total assets

84,586,156

79,379,124

Floating debt

43,594,352

42,867,383

4,626,089

4,041,964

48,220,441

46,909,347

Capital

5,437,695

5,437,695

Capital surplus

9,557,198

9,557,198

Accumulated other
comprehensive income

9,491,616

9,584,060

Retained earnings

11,879,206

7,890,824

Total equity

36,365,715

32,469,777

Liabilities and Shareholders'


Equity

84,586,156

79,379,124

Non-current liabilities
Total liabilities

(2) Summary of the Income Statement


Accounting
subject
Operating income

Jan. 1st, 2011

Jan. 1st, 2010

Aug. 16th, 2011

Dec. 31st, 2010


7,378,123

20,224,853

181,109

282,918

7,197,014

19,941,935

32,326

86,163

Non-operating expenses

2,049,561

4,459,665

Income before income


tIncome tax expense

5,179,779

15,568,433

738,063

1,148,324

The net profit of current


accounting period

4,441,716

14,420,109

Operating expenses
Operating profit
Operating Income

During the current accounting period, profits and losses in Celltrion Holdings after the acquisition date will not
be managed separately, thus there is no calculation.
Meanwhile, the financial statements above equal to the results after temporary liquidation, and related reliability
tests about the difference analysis between temporary liquidation financial statement and financial statement
audited under K-IFRS have been conducted.

146