You are on page 1of 165

Annual Report of Celltrion GSC in 2011

1 January 2011 to 31 December 2011

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
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I. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
3. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
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4. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
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. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
5. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
6. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
II. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11
III. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
IV. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .55
V. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .57
VI. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .60
1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .60
2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .62
3. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .62
4. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .63
VII. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .64
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .65
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .66
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .67
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .68
VIII. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .69
1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .69
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .70
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .71
2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .71
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .72
IX. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .73
X. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .75
XI. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .77
XII. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .78
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .79
1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .79
2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .79

Content
Annual report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . .4
Confirmation of Executives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
I. Company Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
1. Company profile. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . .7
2. Company history . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . .7
3. Change in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . .. . . . . . . . . .9
Status of outstanding convertible bonds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Status of outstanding bonds with warrants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . 13
4. Total number of shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . 15
Status of the total number of shares .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . .. . 15
Status of the acquisition and disposal of its own shares. . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . 17
5. Status of the voting rights. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . 19
6. Dividend payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . .21
II. Business Overview. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23
III. Financial Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .49
IV. Auditors Opinions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . .. 130
V. Operational diagnosis and Analytic Opinions of the Chief Excecutive Officer. . . . . . . . . . .. . . ..133
VI. Related issues about the Company Departments (i.e. board of directors) and Subsidiaries ...138
1. Board of Directors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . .138
2. Supervision system. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .141
3. The voting rights of shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .143
4. Status of subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .144
VII. Issues concerning shareholders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145
The shareholding status of majority shareholder and related parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . .145
Changes in the shareholding of majority shareholder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .145
Status of shareholding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . .145
Minority shareholders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .145
VIII. Executives and Staff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . 147
1. Status of executives and staff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .147
2. Remuneration of executives. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .148
IX. Transactions with stakeholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .151
X. Necessary Measures to Protect Other Investors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155
XI. Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .159
XII. Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . .161
Confirmation of experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .163
1. Confirmation of experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . .164
2. The interests of experts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 164

( 12 )

2011 01 01

2011 12 31


30

:
:

2012

13-3
5 ( )032-850-6464
() http://

( )

( )

( )032-850-6464

03

Annual Report
12th period

Financial year:
Company:
CEO:
Headquarter location:
Reporting Director:
Tel:

1 January 2011 to 31 December 2011


Celltrion GSC Corporation
Kim Tae-ku
13-35th floor of Songdo-dong, Yeonsu-gu, Incheon (Tel) 032-850-6464
Lee Byeong-lyur
032-850-6464

Page | 5

Page | 6

Executive Confirmation

As executives of the company and the people in charge of the preparation of the financial statements, we have
paid significant attention to the content of the financial statements of this financial year. After direct
confirmation and discussions, we confirm that no record or note of major events was omitted and there was no
false record or note. Therefore, the contents of the report will not lead to major misunderstandings for users.

Moreover, we confirm that the company has set up an internal accounting management system according to the
second and third paragraph of the second article of The Law Concerning the External Audit of Corporations. And
the company has operated in compliance with this system.

March 30th 2012 Celltrion GSC Corp.


CEO: Kim Tae-ku
Reporting Director: Lee Byeong-lyur

Page | 7

I.
1.
. . :
. : 2000.06.14
. : 13-3
5 : 032 - 850 - 6464
. :
. :

1.

2.
3. , , , , ,

4.
5.
6.
7.
8.

() ,
, ,

2.
.
(1)

2008.12.30

: () ()
1

2009.01.12

2009.02.01
2009.02.27

(5,000 ) ( 1129-22
7-50) 2

2009.03.19

(7,000 )

2009.04.02

( )

2010.11.30

2 (2 @5,000)

2011.08.01

( 7-50 13-3)

2008.03.31

(2)
- 2009 3 19
() () .
dart.fss.or.kr

Page 4

I
1

Company Introduction
Company profile

a) Legal name and business name of the company: Celltrion GSC Corperation
bDate of establishment: 14 June 2000
c Headquarter location: 13-3 5th floor of Songdo-dong, Yeonsu-gu, Incheon (tel) 032-850-6464
dScale: small to medium enterprise
eMajor business: business purposes in the Article of Association
Business purposses
1. Manufacture of excipients for medicine production
2. Research and development for materials localization
3. Trade and trade agency for medicine, pharmaceutical raw materials, chemicals,
medicines for external use, basic compounds and excipients for medicine
production
4. Overall business related to each phase
5. Wholesale of equipment (machinery), parts and accessories
6. Manufacture of pharmaceutical raw materials, chemicals, and basic compounds
7. Procurement and logistics consultancy
8. Procurement agency

Remarks
-

Company history

a) Company history
(1) Changes after company establishment
Time
31 Mar 2008
Jan 12 2009
Feb 1 2009
Feb 27 2009
Mar 19 2009
Apr 2 2009

Process and major changes


Change of CEO: changed from Seo Jung-jin to Kim Tae-ku
For the first time the company issued unsecured convertible bonds with a value of KRW
5 BN
For the first time the company issued bearer bonds with non-detachable warrants with a
value of KRW 5 BN
The head office was moved from 1129-22 Guwol-dong, Namdong-gu, Incheon to 7-50
Songdo-dong, Yeonsu-gu, Incheon
The company issued unsecured convertible bonds with a value of KRW 7 BN for the
second time
The company name was changed from Nexolbiotech to Celltrion GSC
The company issued unsecured convertible bonds with a value of KRW 5 BN for the third
time

Nov 30 2010

Equity investment from TOMATO 2 Savings Bank (2 million shares with a price of KRW
5,000 per share)

Aug 1 2011

The head office was moved from 7-50 Songdo-dong, Yeonsu-gu, Incheon to 13-3
Songdo-dong, Yeonsu-gu, Incheon

(2) The change in company name


The company name was changed from Nexolbiotech to Celltrion GSC through a regular
shareholders meeting on 19 March 2009

3.
()
( :

2011 12 31

( : , )
()

()

()

2000
06

()

10,000

5,000

5,000 -

2001
04

()

40,000

5,000

5,000 -

2001
04

()

20,000

5,000

5,000 -

2001
09

()

16,000

5,000

5,000 -

2001
10

()

114,000

5,000

5,000 -

2002
03

( 3 )

84,700

5,000

159,400 -

()

2002
04

2,607,48
0

5,000

5,000 -

2002
10

1,159,80
0

5,000

4,676 -

Changes in Capital
Capital increase/decrease
(Base date: 31 December 2011)

Unit: KRW, per share


Stock Issurance/Decrease

Date of Share
Issurance/Decrease

Form of
Issuance/Decrease

Category

Capital increase with


consideration (rights
offering)

Common
stock

Apr 4 2001

Capital increase with


consideration (rights
offering)

Jun 22 2000

Quantity

Par Value
per Share

Issurance/
Decrease Price Remarks
per Share

10,000

5,000

5,000

Common
stock

40,000

5,000

5,000

Apr 17 2001

Capital increase with


consideration (rights
offering)

Common
stock

20,000

5,000

5,000

Slep 25 2001

Capital increase with


consideration (rights
offering)

Common
stock

16,000

5,000

5,000

Oct 31 2001

Capital increase with


consideration (rights
offering)

Common
stock

114,000

5,000

5,000

Capital increase with


consideration (the 3rd
offering)

Common
stock

84,700

5,000

159,400

Capital increase
without consideration

Common
stock

2,607,480

5,000

5,000

Capital reduction

Common
stock

1,159,800

5,000

4,676

Mar 23 2002

Apr 24 2002
Oct 10 2002

( :

2011 12 31

( : ,
)

(%)

2008

2012

12

30

12
29

2009

2013

02

27

02
26

2009

2013

04

02

04
01

5,000 2010.3.1~ 100

35,752

5,000 139,852

37,600

7,000 186,170

100

37,600

5,000 132,978

12,000 459,000

2012.12.2
8

7,000 2010.3.1~ 100

2013.02.2
5

5,000

2010.04.0
2~

2013.04.0
1

12,000

(*) .

Status of Outstanding Convertible Bonds


Base date: December 31 2011

Date of
Issurance

Class

Date of
Maturity

Total
Book
Value

First
unsecured

Dec 30
convertible 2008

Dec 29
2012

5,000

Feb 6
2013

7,000

Apr 1
2013

5,000

12,000

Unit: KRW MN per share


Period for

Conversion conditions

Type of Shares

Possible

for Conversion

Conversion

Shares for
Total
Conversion Conversion Book Possible
Price
Rate
Value Conversion

Claims

Registered

Mar 1 2010~

conmmon stock

Dec 28 2012

Registered

Mar 1 2010~

common stock

Feb 25 2013

Registered
common stock

Apr 2 2010~

Outstanding Bonds
Remarks

100

35,752

5,000

139,852

100

37,600

7,000

186,170

100

37,600

5,000

132,978

12,000 459,000

bonds

Second
unsecured

Feb 27
convertible 2009
bonds
Third
unsecured
convertible
bonds
Total

Apr 2
2009

Apr 1 2013

(*) Bondholders have the full exercise of the stock options


( :

2011 12 31

( : ,
)

2009
01
12

2013
01
11

(%)

5,000 2010.01
.13~20
13.01.1
0
5,000

(*) .

10

100 35,752 5,000 139,852

- 5,000 139,852

Status of Outstanding Bonds with Warrants


Base date: Dec 31 2011

Class

Unit: KRW MN per share

Total
Book
Value

Type of
Shares

Period for
Possible
Exercise of
Options

Registered
common
stock

Jan 13 2010~
Jan 10 2013

Date of
Issue

Date of
Maturity

Jan 12
2009

Jan 11
2013

5,000

5,000

Exercise
Conditions

Bonds which
Have Not been
Exercised

Remarks

Total Shares for


Exercise Exercise Book Possible
Price
Rate
Value Exercise

First
unregistered
bonds with
detachable

100

35,752 5,000

139,852

139,852

warrants
Total

(*) Shareholders have the full exercise of the stock options

11

5,000

4.

( :

2011 12 31

( : )

4,000,000

4,000,000

2,892,180

2,892,180

1,159,800

1,159,800

1,159,800

1,159,800

2.

3.

4.

1,732,380

1,732,380

233

233

1,732,147

1,732,147

1.

. (-)
.
. (-)

12

The total number of shares


Status of Total Number of Shares
Base date: Dec 31 2011

Unit: per share


Type of Share

Remarks

Division

Common Stock

. Total number of issued shares


. Total number of shares issued to date

4,000,000

4,000,000

2,892,180

2,892,180

1,159,800

1,159,800

1,159,800

1,159,800

1,732,380

1,732,380

233

233

1,732,147

1,732,147

. Total number of shares which


decreased to date
1. Capital reduction
2. Profit redemption
3. Repayment of redeemable shares
4. Others
. Total number of outstanding shares
. Self-owned shares
. Number of outstanding shares

13

Total


( :

2011 12 31 )

( : )


(+)

(-)

(-)

(a)

233

233

233

233

(b)

(c)

(a+b+c)

( 1) 2002 4 24

14

( 1)

Status of the acquisition and disposal of own shares


Base date: Dec 31 2011

Unit: per share

Acquistion Method

Legal
acquisition
in capital
market

Acquistion
through
trust

Redemption Quantity

Remark
s

Common stock

Preferred
stock

Exercise of Common stock


share
Preferred
purchase
stock
rights

Common stock

Subtotal

Preferred
stock

Quantity
held by
trustees
Current
holding
quantity

Common stock
Preferred
stock
Common stock

Subtotal

Preferred
stock

Common stock
Preferred
stock

233

233

Note 1

Common stock

233

233

Preferred
stock

agreement

Acquisition through other methods

Total

Final

Public
purchase
acquisition

Quantity change
Basic
Quantity Acquisition Disposal

Common stock
Preferred
stock

Acquisition
from
exchange

Direct

Type of Stocks

Preferred
stock
Common stock

Note 1: acquired through capital increase without consideration on 24 April 2002

15

5.

( :

2011 12 31

( : )

1,732,380

233

(C)

(D)

1,732,147

(A)

(B)


(E = A - B - C + D)

16

Status of Voting Rights

Base date: Dec 31 2011

Unit: per share

Division
Total number of issued shares (A)
Number of shares without voting rights (B)
Number of shares with limited
voting rights according to other
laws (C)
Number of shares with resurrected voting
rights (D)
Number of shares with voting rights
(E = A - B - C + D)

Number of Shares

Remarks

Common stock
Preferred stock
Common stock
Preferred stock
Common stock

1,732,380
233

Preferred stock

Common stock

Preferred stock
Common stock
Preferred stock

1,732,147
-

17

6.
3

12

()

11

10

5,000

5,000

5,000

()

-6,256

6,830

7,315

()

-3,612

3,943

4,223

()

()

(%)

(%)

(%)

()

()

18

Dividend Repayment
Dividend Repayment in the Past 3 Years

Division
Par value per share (KRW)
Net profit of the period (million KRW)
Earnings per share
Total cash dividends (million KRW)
Total stock dividends
Cash dividend payout
Common stock
Preferred stock
Common stock
Stock dividend yield (%)
Preferred stock
Cash dividend per share Common stock
(KRW)
Preferred stock
Stock dividend per share Common stock
(per share)
Preferred stock
Cash dividend yield

12th Period
5,000
-6,256
-3,612
-

19

11th Period
5,000
6,830
3,943
-

10th Period
5,000
7,315
4,223
-

II.
1.
.
, 2~3%
15% ,
25%, 35%,
65% .
. .
,

.
Generic
,
Original
.


Project
Project (, ) ,
,
Bio Project Project
,

Business Model ,
Bio Project ,




21 Bio
.

20

II
1

II. Business Overview


Business Overview

a) Industry Status
In recent years, investments in R&D in domestic pharmaceuticals and life science companies have accounted
for 2-3% of their revenues, far below the R&D investment of multi-national pharmaceutical businesses, in which
R&D accounts for nearly 15% of their revenue. Technically, the development of new material technologies is
only 25% that of developed countries. Our production technology is underdeveloped. The development of
domestic bioengineering and biotechnology is only 35-65% that of developed countries. Many bioventure
companies have emerging during these years mainly thanks to the governments encouragement to develop
this venture industry. These companies are committed to research and development on the basis of unique
technologies. In addition, large domestic pharmaceutical companies have developed revolutionary medicine. To
be accepted into the international market, they have conducted clinical experiments on human subjects in
specialized international clinical research organizations. However, they are inexperienced and face many
difficulties at the moment.
Granted the exclusive patents of advanced pharmaceutical companies in South Korea, we focus on the
development of generic medicine in the domestic market and maintaining stable sales and profit. However,
due to the recent medical reform separating the prescribing and dispensing of drugs, prescriptions for foreign
original medicine have increased. As a result, domestic pharmaceutical companies are in a worse situation with
decreasing R&D investment and may even lose opportunities to develop new medicines.
To avoid this dire situation and to promote the development of the domestic biological industry:
South Korean companies should take advantage of its own high-quality talent and low production structure
to set up a domestic production base through coorperation with foreign companies which possess
advanced technologies and products. They can also make a profit through projects that are under
development or are undergoing commercialization, as well as through direct or indirect investments in
products (medicine, medicine for external use, etc.).
We should seek out profitable overseas bio projects and create opportunities for domestic investors to
participate in them. This way, investors can make a profit, and at the same time technology transfers will
become possible.
We should see to it that excellent domestic bioventure companies possessing their own technologies
receive adequate financial support by attracting investment, so that their business models can be scaled
and industrialized.
We should help domestic bioventures, which possess self-developed technologies, to attract investment,
which helps them industrialize their business.
We should promote our business through direct or indirect investments in profitable domestic and overseas bio
projects, and by securing elusive patents in other countries and regions. On one hand, we should do research on
basic bioengineering technologies and make investments in production infrastructure; on the other hand, we
should attract advanced foreign companies to build local bases for mass production and gradually advance the
development of profitable technology. In this way, we can upgrade the biological industry the sunrise industry
with high added value in the 21st century into a mainstream national industry boasting competitive strength.

21

.
-
2000 6 ,
, ,


,

, ,
,
.
1 (VaxGen)
(Mammalian Cell-Culture Technology)
(Therapeutic Proteins) ,
()

,
,
.
-

,

.

, 2
. ,
,
,
, Cold- Chain ,
,
.
-

.
1 .

..

COLDCHAIN CRO

22

b) Our Company Status

Biotechnology investment projects

Established in June 2000, our company relies on international talent with years of experience in the planning
and proproposal of overseas projects. We focus on developed coutries and regions, including the US, Europe
and Japan.
Our company is seeking companies engaged in great biotechnology projects, appraising their research
programs, investing directly and maintaining investments from domestic investors.
Our company combines foreign companies which possess advanced biotechnology with domestic capital, and
plans and promotes the establishment of joint ventures in South Korea.
Our company is engaged in the procurement of raw materials for biopharmaceutical production from
domestic and overseas suppliers, as well as the distribution of these products.
Our companys first investment project is a good example. In order to develop various therapeutic proteins for
the production of vaccines and anticancer drugs, it used the Mammalian Cell-Culture Technology of the VaxGen
Company, and established a joint venture named Celltrion. Our company will build on this achievement and
continue to promote profitable new projects.

The localization of excipients for biopharmaceutical production

The demand for equipment for biopharmaceutical production is increasing sharply worldwide, and the market
for raw materials and excipients will expand along with it. It is necessary to purchase raw materials for
biopharmaceutical production from domestic and foreign suppliers, and upgrade the relevant distribution
channels.
In order to adjust to the change in business structure and maintain quality and price competivemess, our
company is planning to carry out its second round of commercial projects, aiming at the localization of
excipients for biopharmaceutical production.
To this end, since most raw materials and excipients for basic biopharmaceutical production are imported from
overseas, our company plans to promote cooperation with overseas companies to establish joint efforts to
promote the technologies necessary for the development of these materials. Meanwhile, it will advance the
localization of these materials and expand its Asian market through the diversification of material production,
investment in cold-chain logistics, and the construction of domestic bases for material production.

Procurement of reference drug

In physical and chemical comparison tests and clinical trials with originators, control tests are crucial for the
development of biosimilars. Notably, the number of reference drugs used in the clinical trials of biosimilars is
even larger than the total of those used in several Eastern European countries over an entire year. It is a well
known fact that the pharmaceutical companies from which drugs originate from usually restrict the purchase of
reference drugs in order to impede the development of biosimilars.
Since its establishment, our company has run overseas projects for many years. With networks and
coldchain operation capabilities, we first started the business of the bulk purchasing reference drugs with a
price advantage, which is hard to achieve even for specialized international clinical research organizations.
Moreover, we continue to supply the development and clinical use of biosimilars. Recently, we have
expanded our business in Japan, including the supply of reference drugs for domestic clinical use and
ordering products from Japanese pharmaceutical companies.

23

,
.
, COLDCHAIN
KNOWHOW COLDCHAIN
GLOBAL .
-

90% '98
80%
.
,
.

24

Since many domestic and foreign companies may eventually transition towards biosimilar production, our
company plans to increase its purchases of reference drugs, as well as its global coldchain distribution
capabilities through its overseas network and reference drug supplies.

Agricultural goods supply to Russia

The main crop of Russia is grain, though vegetables and fruits are also grown. Due to severely inadequate
production, 90% percent of the fruits and vegetables consumed in Russia are imported. Since 1998, the
consumption of fruits and vegetables has increased by more than 80%. The agricultural producers in Russia
are advancing plastic greenhouse agriculture in large areas.Therefore, after signing agreements with local
legal personnel in Russia, our company is supplying goods to them and plans to increase capabilities within
this area.

25

2.
.
( : , %)

()

()

Air fillter

5,030(18.07)

840(41.90)

19,790(71.12)

840(41.90)

352(1.26)

24(1.20)

API

55(0.19)

4(0.20)

2,597(9.33)

297(14.81)

27,824(100)

2,005(100)

.
( : , %)

12

11

1,537

8.11

1,537

8.11

17,427

91.89

27,824

100.00

27,824

100.00

17,427

91.89

27,824

100.00

18,964

100.00

26

Sales details

a) Status of Major Products


Unit: KRW MN
Business Sectors

Gross Profit
(percentage)

Sales (Percentage)

Remarks

Air filter

5,030 (18.07%)

840 (41.90%)

Biosimilars

19,790 (71.12%)

840 (41.90%)

Chemical generics

352 (1.26%)

24 (1.20%)

API

55 (0.19%)

4 (0.20%)

Machinery

2,597 (9.33%)

297 (14.81%)

Total

27,824 (100%)

2,005 (100%)

b) Sales Breakdown by Sales Methods


Unit: KRW MN, %
Categories

12th period
Sales

Percentage

Sales

Percentage

1,537

8.11

1,537

8.11

17,427

91.89

Sales of self-produced products

Sales of agent products

Others

Sales of products not produced


by Celltrion GSC
Sales of self-produced products
Export sales Sales of agent products
Others
Subtotal
Sales of products not produced
by Celltrion GSC
Domestic
Sales

11th period

Subtotal
Total

27,824

100.00

27,824

100.00

17,427

91.89

27,824

100.00

18,964

100.00

27

.
(1)
AIR FILTER

(2)

28

c) Sales Channels and Sales Methods


(1) Sales organization
Air Filter

In-house direct sales

Reference drugs, etc.

In-house direct sales

Plastic greenhouse materials

In-house direct sales

(2) Sales channels


Suppliers (domestic and overseas)
Korean branches of foreign
companies

The Company

29

Clients

(3)
- :
- : (15 1 ) 15

(4)
-
-

30

(3)Sles methods and conditions


Sales methods: supplies based on supply contracts or orders from customers
Payment terms: after settling sales with customers (within 15 days to one month), cash payment should
be made within 15 days; after monthly sales settlement with customers, cash payment should be made
no later than the last day of the next month
(4) Sales strategy
Cooperate with target corporate clients and expand market by expanding the variety of applicable products
Strict quality control and just-in-time management of the import and supply chain

31

3.
. ()

( : , %)
12

11

Air fillter

5,030

18.07

3,782

19.94

19,790

71.12

13,645

71.95

352

1.26

1,537

8.11

API

55

0.19

2,597

9.33

27,824

100

18,964

100

32

Sales status
a) Export (domestic sales) by category

Item

Categories

Air filter

Biosimilars

Chemical generics

Machinery

12th period

11th period

Amount

Percentage (%)

Amount

Export

Domestic sales

5,030

18.07

3,782

19.94

Export

Domestic sales

19,790

71.12

13,645

71.95

Export

1,537

8.11

Domestic sales

Export
Plastic greenhouse
materials
Domestic sales
API

Unit: KRW MN,%

352

Percentage (%)
-

1.26

Export

Domestic sales

55

0.19

Export

Domestic sales

2,597

9.33

27,824

100

18,964

100

Total

33

( : , %)

. ()
12

11

Air fillter

4,457

16.74

2,792

16.47

19,271

72.40

13,131

77.44

15

0.06

328

1.23

1,034

6.09

API

136

0.51

49

0.18

1,242

4.66

1,119

4.20

26,617

100.00

16,957

100

34

b) Import (domestic purchase) by category

Item

Categories

Air filter

Biosimilars

Chemical generics

Plastic greenhouse
materials

API

Machinery
Total

Unit: KRW MN, %


12th period

11th period

Amount

Percentage (%)

Amount

Percentage (%)

Import

Domestic
purchase

4,457

16.74

2,792

16.47

Import

19,271

72.40

13,131

77.44

Domestic
purchase

15

0.06

Import

328

1.23

Domestic
purchase

Import

Domestic
purchase

1,034

6.09

Import

136

0.51

Domestic
purchase

49

0.18

Import

1,242

4.66

Domestic
purchase

1,119

4.20

26,617

100

16,957

100

35

. ()
( : , % )

Air fillter

API

5,030

18.07

19,790

71.12

352

1.26

55

0.19

2,597

9.33

27,824

100.00

36

c) Export (domestic sales) by business region


Unit: KRW MN, %
Item

Categories

Target country

Amount

Percentage

Domestic

5,030

18.07

Domestic

19,790

Domestic

352

1.26

Domestic

55

0.19

Domestic

2,597

9.33

27,824

100.00

Export
Air filter

Biosimilars
Chemical
generics
API

Machinary

Domestic sales
Export
Domestic sales

71.12

Export
Domestic sales
Export
Domestic sales
Export
Domestic sales
Total

37

Remarks

. ()
( : , %)

Air fillter

4,457

16.74

447

1.68

18,779

70.55

44

0.17

15

0.06

328

1.23

API

136

0.51

50

0.19

823

3.09

206

0.77

152

0.57

61

0.23

1,119

4.20

26,617

100.00

38

d) Import (domestic purchase) by business region

Item
Air filter

Categories

Target country

Amount

Percentage

Import

Domestic purchase

Domestic

4,457

16.74

Germany

447

1.68

U.K.

18,779

70.55

Switzerland

44

0.17

Domestic purchase

Domestic

15

0.06

Import

U.S.

328

1.23

Domestic purchase

Domestic

Import

India

136

0.51

Domestic purchase

Domestic

50

0.19

Import

Germany

823

3.09

Japan

206

0.77

U.S.

152

0.57

Italy

61

0.23

Domestic

1,119

4.20

26,617

100.00

Import

Biosimilars

Chemical generics
API

Unit: KRW MN,%

Machinary

Domestic purchase
Total

39

Remarks

4.
.
(1)
( : , )

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

75

20

25

30

75

20

25

30

13 14 15

40

Status of operation equipment

a) Status of Commercial Equipment


(1) Domestic
Unit: KRW MN
Category

Location

Land

Building

Total

Total

Number of employees

Remarks

* The rented HQ office is in use


(2) Overseas
No related issue
(3) Plans for new branches establishment
No related issue
b) Other Commercial Equipment
No related issue
c) Plans for Purchasing New Equipment
(1) Ongoing investment
No related issue
(2) Future investment plans
Business
Sector

Name of Plan

The Total Expected


Investment
Assets from

Equipment
Total

Equipment,
etc.

Expected Investment by Period

Amount 13th Period 14th Period 15th Period


75

20

25

30

75

20

25

30

41

Investment
Effect
Improved office
efficiency

Remarks

5.
()
,
.( : )

2010.01.05

140,000

()

762,477

-226,512 14 12

762,477

-226,512

6.

2011.04.2

()

9
2011.05.0

CELLTRION DON LLC (

2011.05.3

CELLTRION CO.,LTD.

0
2011.06.2

9
2011.06.2 Master Supply Agreement
9

7.
( )

42

Nippon Kayaku

Details on derivative goods

This year, we signed a contract with Woori Bank to guarantee a certain amount of return for investors who
sell the stocks of Celltrion, and to allocate the excessive return to them should the scenario arise. The relevant
balances are as follows: (Unit: KRW 000)
Signing Date

Counterparty

Target Shares

Trading Profit

Gains (Losses)

Jan 5 2010

Individual

140,000 shares

762,477

-226,512

762,477

-226,512

Total

120,000 out of 140,000


shares were sold

Major operating contracts, etc.

6
Category

Remarks

Date of contract

Content of contract

Counterparty

Project
construction
contract

Apr 29 2011

Contracts for plastic greenhouse


construction and supplementary
services in Russia

Project
construction
contract

May 5 2011

Service contract for plastic


greenhouse construction in Russia

Russian legal person

Purchase
contract

May 30 2011

Purchase contract for generics

CELLTRION CO.,LTD.

Trust contract for


assets
management

Jun 29 2011

Trust contract for the management


of fixed benefit pensions

Purchase
contract

Jun 29 2011

Master Supply Agreement

Research and development activities


No related issue

43

Bogwang Construction Corporation

Hana Bank

Nippon Kayaku

8.
.
[]

( : )

23,024

23,024

11,000

11,000

2,435

14,000

16,435

36,459

14,000

11,000

39,459

()

()

22,000

22,000

()

8,662

()

()

()

30,662

30,662

8,662

5,400

5,400

72,521

14,000

11,000

75,521

( )

22,000

. 3
( )

44

Other information necessary for investment decisions

a) Summary of external financing


Domestic Financing

Unit: KRW MN
Beginning
Balance

New Financing

Reduction
through
Repayment

23,024

23,024

Insurance companies

Comprehensive financial companies

Commercial credit companies

Mutual savings bank

11,000

11,000

Other financial institutions

2,435

14,000

16,435

Subtotal of financial institutions

36,459

14,000

11,000

39,459

Corporate bonds (private placement)

22,000

22,000

Share offering (public offering)

8,662

Share offering (private placement)

Asset securization (public offering)

Asset securization (private placement)

Others

Subtotal of capital market


Shareholders, executives, subsidiary
borrowings
Other

30,662

30,662

5,400

5,400

Total

72,521

14,000

11,000

75,521

Financing Source
Banks

Corporate bonds (public offering)

(Reference) total number of corporate bonds issued in this period


Public offering:
KRW MN
Private placement: KRW 22,000 MN
b) Credit rating in the past three years
(N/A)

45

End Balance Remarks

8,662

III.
1.
( : )

12

11

10

[]

51,407,776,236

47,870,957,844

31,442,415,558

50,609,602,339

47,870,957,844

31,435,888,043

798,173,897

6,527,515

[]

380,440,887,128

367,923,832,370

170,894,495,670

380,439,397,058

367,915,574,500

170,885,685,000

1,203,334

413,334

723,334

286,736

529,536

772,336

7,315,000

7,315,000

431,848,663,364

415,794,790,214

202,336,911,228

[]

82,992,980,938

83,675,715,991

66,206,511,960

[]

81,748,492,374

69,044,215,132

27,611,485,523

164,741,473,312

152,719,931,123

93,817,997,483

8,661,900,000

8,661,900,000

8,661,900,000

597,333,772

597,333,772

597,333,772

-130,144,180

-194,633,770

103,664,934,481

261,769,792,184

251,390,266,799

-4,210,620,738

-3,791,691,724

2,619,992,290

-194,633,770

267,107,190,052

263,074,859,091

108,518,913,745

27,824,376,329

18,964,664,043

7,612,635,120

903,419,671

1,169,411,422

1,514,557,299

-7,101,232,091

9,466,252,286

4,623,247,608

-6,347,194,424

6,830,613,028

7,315,282,573

[]
[]
[]
[]
[]

46

I
III Financial summary
1
Financial details
Unit: KRW
Classification

12th Period

11th Period

10th Period

Current assets

51,407,776,236

47,870,957,844

31,442,415,558

Quick assets

50,609,602,339

47,870,957,844

31,435,888,043

Inventories

798,173,897

6,527,515

Non-current assets

380,440,887,128

367,923,832,370

170,894,495,670

Investment assets

380,439,397,058

367,915,574,500

170,885,685,000

1,203,334

413,334

723,334

286,736

529,536

772,336

7,315,000

7,315,000

431,848,663,364

415,794,790,214

202,336,911,228

Current liabilities

82,992,980,938

83,675,715,991

66,206,511,960

Non-current liabilities

81,748,492,374

69,044,215,132

27,611,485,523

164,741,473,312

152,719,931,123

93,817,997,483

8,661,900,000

8,661,900,000

8,661,900,000

597,333,772

597,333,772

597,333,772

-130,144,180

-194,633,770

103,664,934,481

261,769,792,184

251,390,266,799

-4,210,620,738

-3,791,691,724

2,619,992,290

-194,633,770

267,107,190,052

263,074,859,091

108,518,913,745

27,824,376,329

18,964,664,043

7,612,635,120

903,419,671

1,169,411,422

1,514,557,299

Profit from continuous


operation

-7,101,232,091

9,466,252,286

4,623,247,608

Net profit

-6,347,194,424

6,830,613,028

7,315,282,573

Tangible assets
Intangible assets
Other non-current assets
Total assets

Total liabilities
Equity
Captial surplus
Capital adjustment
Other accumulated
comprehensive income
Retained earnings
Total equity
Sales revenue
Operating income

47

\2.
(1)
2011 1 1
.
' ' 2.4 2.89
.
. .
.
,

.
.
,
3
, .
.

.
.
1 ,
,
.
.
,
. ,
() ,
.
,
,
.

48

Attention in the use of financial statements


(1) Summary of significant accounting policies
Since the beginning of this financial period, the Company has adopted the General Corporate Accounting
Standards which was applicable to the financial years after 1 January 2011. Therefore, the statements of
retained earnings prepared before in accordance with the previous GAAP are publicized as notes of financial
statements in compliance with paragraphs 2.4 and 2.89 of Preparation and Presentation of Financial Statements
of the General Corporate Accounting Standards. The adoption has no influence on the business performance,
financial status and announcements of the Company.The significant accounting policies in the Company's
financial statements are as follows:
a) Revenue recognition criteria
The Company recognizes revenue on a delivery basis. Other revenues are recognized when the amount can be
reliably measured and when it is probable that future economic benefits will flow to the Company.
b) Cash and cash equivalents
The Company classifies the marketable securities and short-term financial instruments, which the repayment
period is less than three months, the value dont change laregely with the interest fluctuation, can be converted
into cash without large transaction cost, as cash and cash equivalent. The cash flow statements use the same
cretiria.
c) Allowance for bad debts

The Company has set an allowance based on the expected amount and rate of bad debts, which is derived
from past experience.
d) Financial instruments
The Company classifies time deposits for the purpose of short-term capital operations, time deposits, and
periodical deposits of financial institutions with a maturity date less than 1 year as short-term financial
instruments. Financial instruments which do not belong to current assets are classified as long-term financial
instruments.

49

.

,
,

.

.
,
.

.
,
,
.

.

.

.
.

.

50

e) Inventories
The Companys inventories are determined on the basis of the perpetual inventory method and regular inventory
inspection. The inventory value is calculated by the total average method and is recorded as a purchase cost.
The market value of inventory is recorded in the financial statements by inventory classification. When the
market value of the inventory is lower than the purchase costs, the valuation loss of inventories is included into
costs of goods sold and at the same time is recorded in the balance account of inventories. However, when there
is no devaluation in the inventory value and the market value is higher than the book value but lower than the
purchase costs, the valuation loss is reversed and deducted from costs of goods sold.
f)

Classification and valuation of marketable securities

Marketable securities purchased for short-swing profits, when transactions happen frequently, are classified as
short-term trading securities. Securities with specific maturity dates and specified repayment amounts, and the
company had the intention and ability to hold to maturity, are classified as held-to-maturity investments. Those
excluded from the above two categories are classified as available-for-sale financial assets.
The acquisition cost of marketable securities equals the market price paid at the acquisition, using the moving
average cost method, plus the incidental cost.
Short-term trading securities and assets available for sale are appraised at the fair value. Since the fair value of
non-marketable equity securites in the available-for-sale financial assets cannot be reliably measured, they are
appraised at the acquisition cost. For securities without a market price, its fair value equals the future cash flows
calculated by the discount rates set by authoritative independent credit rating institutions according to different
credit ratings.
Unrealized gains of short-term trading securities are included into the current profit or loss, whereas the
accumulated gain or loss of the available for-sale securities is recognized as a gain or loss on the balance sheet
after disposal of the securities or recognition of impaired loss. When a marketable securitys recoverable amount
is lower than the acquisition cost after depreciation for securities or the acquisition cost for equity securities, they
are included into asset impairment losses and are reflected in the current profit or loss.
Held-to-maturity investments are valued at acquisition cost after depreciation. During the depreciation period, the
spread between the acquisition cost and the Book Value at the date of maturity is discounted by the effective
interest rate method and is deducted fromthe acquisition cost, then added by the interest income.
When a marketable securitys recoverable amount is lower than the acquisition cost after depreciation for
securities or the acquisition cost for equity securities, is it included into the asset impairment losses and reflected
in the current profit or loss.
g) Valuation and depreciation of tangible assets

The Companys tangible assets are measured by the acquisition cost minus the assets impairment loss and
accumulated depreciation calculated based on the expected useful life and the depreciation method in the
following chart:
Classification

Useful life

Depreciation method

Facility

5 years

Straight-line method

51


,
.
,

. ,

.
.

,
.

,

. ,

.
.
1

.
,


. , .

52

If an expenditure on tangible assets at acquisition or after installation can increase the future economic benefits,
it is treated as a capital expenditure. Otherwise, it is treated as an expense of the period.
In addition, when the future economic benefits of tangible assets are significantly lower than their book value
due to obsolescence or a sharp market valuation decrease, asset impairment losses are recognized as the
difference between the book value and the recoverable value. However, when the recoverable amount of the
impaired assets in the next period is higher than the book value, the excess amount above the book value but
lower than the initial carrying amount after deducting depreciation, was reverse in the asset impairment losses.
h) Valuation and depreciation of intangible assets

The cost of the Companys intangible assets is measured with the production cost or the purchase cost in that
year plus the incidental cost and minus depreciation calculated on the basis of the expected useful life and
depreciation method in the following chart:
Classification
Right for trademark

Depreciation
Straight-line method

Expected useful life


5 years

In addition, in the event that the recoverable amount of intangible assets is significantly lower than the book
value due to obsolescence or sharp market value decrease, the book value shall be adjusted to the recoverable
amount, and the difference shall be recorded in the account of impairment losses for intangible assets under the
current profit or loss. When the recoverable amount of the assets whose values have been deducted by
impairment losses is higher than the book value, the excess amounts that lower than the initial carrying amount
after amortization, were reversed in the asset impairment losses.
i)

Pension benefit liabilities

The Company has a defined contribution plan. According to the regulations on employee pension payments, the
estimated total amount of pension which needs to be paid to retirees who used to be full-time employees of the
Company for at least 1 year before the end of the report date is set as a pension benefit liability.
The Company has deposited the defined benefit pension in Hana Bank. The Companys contribution is recorded
as a pension plan asset and is deducted from pension benefit liabilities. When the pension plan assets exceed the
total amount of pension benefit liabilities, the excess amount is recorded in the investment assets account. In
addition, the pension plan assets are composed of time deposits, etc.

53

.

. ,
.

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


,
.
.
,
.

.
,

.
.


. ,


.
54

j)

Convertible corporate bonds and bonds with warrants

The Company separates the liabilities equity parts in the accounting treatment of convertible corporate bonds
and bonds with warrants. The liabilities are recognized at the fair value of ordinary corporate bonds without
conversion rights or warrants, and the fair value is measured by the present value of the expected future cash
flows. The value of conversion rights or warrants is derived by deducting the value of bonds in the liabilities part
from the total value of corporate bonds, and is recorded into capital surplus.The liabilities part is discounted by
the effective interest rate method, whereas the equity part will not be measured after initial recognition.
k) The conversion of foreign currencies and liabilities
The Company converts foreign currencies and liabilities based on the closing exchange rate at the end of the
reporting period, and gains or losses via foreign currency conversion are included in the current profit or loss.
l)

Amortization of discount on capital stock

In the first three years after the stock issuance year or the capital increase year, the discount on capital stock
is amortized by the same amount every period. This amount is included in the appropriation of retained
earnings. In the event that the retained earnings are negative or less than the amortization amount, the
amount will be amortized the following year.
m) Income tax expense and deferred income tax assets (liabilities)
The Company, according to Income Tax Law, calculates its income tax expense as the total of income tax
payable and additional tax of the business year plus or minus the change in the deferred income tax of the
business year. The deferred income tax assets and liabilities are respectively determined by the difference
between their book value and tax bases.
The deferred income tax assets and liabilities are respectively measured at the reduced amount and extra
amount of income tax in the future due to the disappearance of the temporary difference. The effect of the
temporary difference on income tax is reflected on income tax expenses, whereas the effect on equity is directly
reflected on the equity account. Deferred income tax assets are treated as assets when they can reduce the tax
on taxable income.
Deferred income tax assets and liabilities are divided into current and non-current accounts. When the deferred
income tax assets and liabilities in the same current and non-current accounts are filed to the same tax authority,
they are balanced against each other and are marked.
n) Contigent liabilities
As the Company performs the present obligations because of past events or transactions, when it is probable
that recources will flow out and when the loss can be reliably measured, the loss is included into liabilities.In
addition, contigent liabilities are recorded when the Company recognizes potential obligations according to past
events or uncertain future events. If present obligations exist because of past events or transactions, contigent
liabilities are also recorded if it is not probable for resources to flow out or when the amount of the obligations
cannot be reliably measured.

55

(2)
( )
(3)
( )

3.
.
(1) 3
( : , %)

12

1,334

13

0.97%

32,609

326

0.99%

720

0.97%

34,663

346

0.99%

588

1.02%

21,726

217

1.00%

2,502

25

1.00%

24,816

248

0.99%

102

0.98%

28,942

289

1.00%

29,044

290

1.00%

11

10

(2) 3
( : )

12

11

10

1.

248

290

2. ()

43
-

17

()

12

3. ()

99

4.

347
56

42

264

248

290

(2) Any violation of accounting standards


(3) Other matters worth attention: N/A
3.

Matters concerning accounting information

a) Status of allowance for bad debts


(1) The allowance for bad debts in the past three business years by account
(Unit: KRW MN, %)
Classification

12th period

Account

Total Liabilities

Allowance for Bad Debts

Loan Loss Reserve Ratio

Accounts receivable

1,334

13

0.97%

Short-term loans

32,609

326

0.99%

Accrued income

720

0.97%

34,663

346

0.99%

588

1.02%

Short-term loans

21,726

217

1.00%

Accrued income

2,502

25

1.00%

Total

24,816

248

0.99%

102

0.98%

Short-term loans

28,942

289

1.00%

Total

29,044

290

1.00%

Total
Accounts receivable
11th period

Accounts receivable
th

10 period

(2) Status of change in allowance for bad debt in the past three business years
Classification
1. Beginning balance of allowance for bad debts
2. Net bad debt expense()

(Unit: KRW MN)

12th Period

11th Period

10th Period

248

290

43

17

Bad debt expense (book value of bad debts)


Recovery amount of bad debts

12

Other changes

3. Allowance for bad debts (reversal)

99

42

264

4.Total ending balance of allowance for bad debts

347

248

290

57

(3)
-
.
(4)
( : )
6

6
1

1
3

1,334

1,334

1,334

1,334

100

100

.
(1) 3
( : , %)

12

11

10

336

AIR FILLER

267

API

134

61

798

(%)
[100]

0.185%

0.000%

0.003%

()
[ {()2}]

69.7

6321.7

1268.8

58

(3) Policy on the setting of allowance for bad debts related to accounts receivable
For accounts receivable balance, the allowance for bad debts is set by the bad debt rate based on past
experience and expected bad debt rate.
(4)Status of the balance of accounts receivable by age at the end of the period
(Unit: KRW MN)
Classification

<6 Months

6 Months to 1 Year

1-3 Years

>3 Years

Total

General

Amount Special party

1,334

1,334

Total

1,334

1,334

100

100

Proportion

b) The holding and physical inspection history of inventories


(1).Status of inventory holding by business sector in the past three business years
(Unit: KRW MN, %)
Accounts

12th Period

11th Period

10th Period

Biosimilars

Goods

336

Air Fillter

Goods

267

Chemical generic

Goods

API

Goods

134

Machinery

Goods

61

Total

798

Business Sector

The ratio of inventories to total assets (%)


[inventories total assets at the end
of the period 100]
Inventory turnover (times)
[annual cost of goods sold
{(beginning inventory + closing
inventory) 2}]

Remarks

0.185%

69.7

59

0.000%

6321.7

0.003%

1268.8

(2)
-
, .
()
,
. ,

,
.
-

.
. 5

2008

. 5
( : )

12

(6,347)

() 2

(4,324)

(587)

launchig

.

60

(2) The physical inspecition history of inventories, etc


- The quantity of inventories at the end of the period is determined on the basis of the perpetual inventory
system and regular physical inspections. The value of inventories is measured by the total average method and
is recorded as purchase cost. When the market value of inventories is lower than the purchase cost, the
difference (net realizable value) is included into the balance sheet by inventory classification while the loss on
valuation of inventories is included into the balance account of inventories and is added into cost of goods sold.
However, when such situation that inventories are devaluated disappeared and the new market value is higher
than the book value, but do not exceed the initial carrying amount,reverse the loss from cost of goods sold and
marked it at the same time.
- Other matters
The inventory difference between the inspection date and the balance sheet date is recognized by the
Companys goods delivery certificates and goods reception certificates
c) Change in accounting standards in recent 5 business years and the reasons

Financial year
2008

Accounting change

Reason for change

The investment evaluated by the equity method in

The significant influence was forfeited and

the last period was reclassified as available-for-sale was therefore reclassified as available-forsecurities

sale securities

d) The losses in recent 5 business years and the reasons

Business years

Loss in this period

The 12th period

(6,347)

(Unit: KRW MN)

The reason
On the closing date of this report, Tomato Bank believed that it was
difficult for the invested enterprise to recover the net assets, so the
impairment loss is recognized in the current period.

The 9th period

(4,324)

The 8th period

(587)

The launch of the new goods still keeps on. Due to the change in
the investment fund, financial cost was recognized as a loss in the
current period.

61

. 5 30%

( : )

11

6,830 1~2 1

10

7,315 2006 ,
2008 8

62

e) The introduction of recent 5 business years, in which the YoY growth of net profits increased by 30% or in
which the net profits turned to positive; reasons for changes in net profits
(Unit: KRW MN)
Business
years
The 11th
period

The 10th
period

Net profits

6,830

The reason
The net profits in current period increased thanks to the profits in acquisition of
stock options, including the first and second convertible bonds and the first
corperate bonds with warrants.

In 2006, the transaction of call and put options, through which Woori Bank and
Celltrion sell the stocks, were recognized as short-term liabilities; the net profits
increased due to the disposal of investments in back-door listing in August 2008.
7,315

63

4.
.

12

2011. 12. 31

11

2010. 12. 31
( : )

12 ()

11 ()

(1)

1. ( 9,15)

8,735,970,950

51,407,776,23

47,870,957,84

50,609,602,33

47,870,957,84

4
11,199,550,69
8

2. ( 3,15)

32,609,343,36

21,725,573,97

(326,092,934)

(217,255,240)

3. ( 15)

1,333,776,270

587,529,360

(13,337,763)

(5,875,294)

4. ( 15)

719,968,873

2,501,786,858

(7,199,689)

(25,017,869)

5.

4,095,518,833

6.

2,970,934,014

4,799,906,564

115,355,272

1,377,588,940

4,470,883,982

1,831,651,017

7. ( 12)
8. ( 8)
9. ( 12)

64

4. Financial statement
Balance sheet
The 12th period: 2011.12.31
The 11th period: 2011.12.31
(Unit: KRW MN)
Accounting

The 12th period

The 11th period

Asset
51,407,776,236

.Current assets
(1)Quick assets

47,870,957,844

50,609,602,339

47,870,957,844

1. Cash and cash equivelent

8,735,970,950

11,199,550,698

2. Short-term Investment (note 3,15)

32,609,343,364

21,725,573,977

(326,092,934)

(217,255,240)

1,333,776,270

587,529,360

(13,337,763)

(5,875,294)

719,968,873

2,501,786,858

(7,199,689)

(25,017,869)

Provision for bad debt


3. Account receivable(note 15)
Bad debt provision for Account receivable

4. Net value of Accounts receivable (note


15)
Allowance for doubtful accounts
5. Other receivable
6. Prepayment
7. Accrued tax assets (note 12)

2,970,934,014

4,799,906,564

115,355,272

8. Derivative commoditives(note 8)
9. Liquid deferred income tax assets (note
12)

4,095,518,833

4,470,883,982

65

1,377,588,940
1,831,651,017

(2)

798,173,897

1.

798,173,897

(1)

1. ( 4,7,18)

2.

380,440,887,1

367,923,832,3

28

70

380,439,397,0

367,915,574,5

58

00
367,915,574,5

87

00

78,409,471
1,203,334

1.

7,310,000

(7,306,666)

(6,896,666)

(4)
1.

286,736

529,536

7,315,000

413,334

8,510,000

(3)( 6)

380,360,987,5

(2)( 5)

7,315,000
431,848,663,3

415,794,790,2

64

14

82,992,980,93

83,675,715,99

1. ( 9,19)

1,758,224,734

959,715,998

2. ( 7,18,19)

37,335,000,00

34,335,000,00

3. ( 19)

360,065,878

255,416,728

4.

471,079,901

707,485,144

20,604,408

2,859,918

275,206,791

302,471,255

3,385,362,371

6,119,703,503

2,709,630,958

17,000,000,00

17,000,000,00

(1,565,874,986

(2,783,676,88

3)

13,860,937,19

14,856,082,57

(4,641,480,893

(9,044,704,76

2)

10. ( 7,18,19)

5,000,000,000

5,000,000,000

(300,335,585)

(575,532,727)

5.
6. ( 15,19)
7. ( 15)
8. ( 12)
9. ( 7,15,18,19)

(2) Inventories
1. Finished goods

798,173,897
798,173,897

380,440,887,128

. Non-current assets
(1) Long-term investment
1. Available-for-sale securities (note
4,7,18)
2. Pension

380,439,397,058
380,360,987,587

367,915,574,500

367,923,832,37
0
367,915,574,50
0

78,409,471

(2) Tangible assets (note 5)


1. Consumption goods
Accumulated depreciation

1,203,334

413,334

8,510,000

7,310,000

(7,306,666)

(6,896,666)

(3) Intangible assets(note 6)

286,736

(3) Other non-current assets

529,536
-

1. cash deposit
Total assets

7,315,000
7,315,000

431,848,663,364

415,794,790,214

82,992,980,938

83,675,715,991

Liabilities
.Current liabilities
1. Accounts payable (note 9,19)
2. Short-term loans

1,758,224,734

959,715,998

37,335,000,000

34,335,000,000

3. Provision for expenses (note 19)

360,065,878

255,416,728

4. Additional tax expenses

471,079,901

707,485,144

20,604,408

2,859,918

275,206,791

302,471,255

3,385,362,371

6,119,703,503

5. Advances from customers


6. Accounts payable (note 15,19)
7. Advance payment(note 15)

8.Income Tax payable (note 12)


9. Convertible bonds(note 7,15,18,19)
Corporate bonds discounts
Repayment premium
Adjustment of conversion
10. Corporate bonds with warrants(note
7,18,19)
Corporate bonds discounts

2,709,630,958

17,000,000,000

17,000,000,000

(1,565,874,986)

(2,783,676,883)

13,860,937,199

14,856,082,570

(4,641,480,893)

(9,044,704,762)

5,000,000,000

5,000,000,000

(300,335,585)

(575,532,727)

3,360,850,392

4,369,436,050

(850,659,272)

(2,552,182,62
5)

11.
12. ( 7,18,19)

4,490,010,864

7,524,000,000

7,524,000,000

1. ( 10)

2. ( 12)

81,748,492,37

69,044,215,13

23,875,480

(23,875,480)

81,748,492,37

69,044,215,13

164,741,473,3

152,719,931,1

12

23

8,661,900,000

8,661,900,000

.( 1,11)
1.

8,661,900,000

8,661,900,000
597,333,772

1. ( 11)

597,333,772

597,333,772
597,333,772

(130,144,180)

(194,633,770)

1.

(128,979,180)

(193,468,770)

2. ( 11)

(1,165,000)

(1,165,000)

1. ( 4,12,13)

261,769,792,1

251,390,266,7

84

99

261,769,792,1

251,390,266,7

84

99

.()( 11)

(3,791,691,724

2,619,992,290

)
1. ()

(3,791,691,724

2,619,992,290

dart.fss.or.kr

267,107,190,0

263,074,859,0

52

91

431,848,663,3

415,794,790,2

64

14

Page 30

Repayment premium

3,360,850,392

4,369,436,050

(850,659,272)

(2,552,182,62

Adjustment of subscription right


11. Options payables
12. Long-term current liability(note

5)
-

4,490,010,864

7,524,000,000

7,524,000,000

. Non-current liability
1.Retirement allowance liabilities(note10)
Retirement pension
Deferred income tax liability(note 12)

81,748,492,37

69,044,215,13

23,875,480

(23,875,480)

81,748,492,37

69,044,215,13

Total liabilities

164,741,473,3

152,719,931,1

12

23

8,661,900,000

8,661,900,000

Equity
. Paid-in Capital (note 1,11)
1. Common capital stock

8,661,900,000

. Capital reserves
1. Reduction of capital premium(Note11)

597,333,772
597,333,772

. Adjustment of capital
1. Corporate bonds discounts
Self-owned Shares(Note11)

597,333,772
597,333,772

(130,144,180)

(194,633,770)

(128,979,180)

(193,468,770)

(1,165,000)

(1,165,000)

. Other comprehensive income


Available-for-sale securities (Note4,12,13)

8,661,900,000

261,769,792,1

251,390,266,7

84

99

261,769,792,1

251,390,266,7

84

99

. Benefit (Loss) (Note 11)

(3,791,691,724

2,619,992,290

)
Undistributed surplus

(3,791,691,724

2,619,992,290

)
Total equity
Total liabilities & equity

dart.fss.or.kr

267,107,190,0

263,074,859,0

52

91

431,848,663,3

415,794,790,2

64

14

Page 31

12 2011 1 1 2011 12 31
11 2010 1 1 2010 12 31

( : )
12 ()

11 ()

.( 15)

27,824,376,329

18,964,664,043

.( 16)

25,818,905,015

16,963,692,158

2,005,471,314

2,000,971,885

.( 15)

1,102,051,643

831,560,463

903,419,671

1,169,411,422

11,129,773,751

20,754,950,919

.
.
1.( 15)

2,899,655,527

1,855,549,359

2.

800,303,475

3.

82,549,962

36,351,195

8,749,315

59

47,145,960

6,295,403,556

8,530,332,119

7.( 8)

762,477,395

8,700,424,873

8.( 8)

1,377,588,940

280,593,079

207,555,117

41,442

3,297

4.
5.
6.( 4)

9.( 15)
10.
.

19,134,425,513

12,458,110,055

1.

8,599,786,747

8,456,590,896

2.

212,789,229

59,760,605

168,122

4,148,577

92,019,514

3,730,615,629

3.
4.
5.
6.( 8)
7.
8.
9.
.()
.( 12)
.()( 13,14)

dart.fss.or.kr

226,512,120
9,907,539,513
96,261,800

206,474,539

348,468

519,809
(7,101,232,091)

9,466,252,286

(754,037,667)

2,635,639,258

(6,347,194,424)

6,830,613,028

Page 32

Income statement
Income statement
The12thperiod:2011.1.1-2011.12.31
The 11th period: 2010.1.1-2010.12.31
Celltrion GSC
Accounting
I.Revenue (note 12)

Unit: KRW
The 12th period

The 11th period


27,824,376,329

18,964,664,043

25,818,905,015

16,963,692,158

. Gross profits

2,005,471,314

2,000,971,885

. Selling and administration


expenses (note 15)

1,102,051,643

831,560,463

903,419,671

1,169,411,422

11,129,773,751

20,754,950,919

. Cost of sales (note 16)

. Operating income
. Other income
1.Interest income (note 15)
1. Dividends
2. Earnings from Foreign
exchange trading

2,899,655,527

1,855,549,359

800,303,475
82,549,962

36,351,195

3. Earnings from conversion of


foreign currency

8,749,315

59

5.Reversal of bad debt provision

47,145,960

6,295,403,556

8,530,332,119

762,477,395

8,700,424,873

1,377,588,940

280 593 079


41,442

207 555 117


3,297

6. Income from disposal of


available-for-sale securities (note 4)
7.Income from transaction of
derivative commodity (Note8)
8. Income from derivative
commodity (note 8)
Commission Income (note 15)
8. Other income
. Non-operating expenditures
1.Interest expenses
1. Losses from Foreign exchange
trading
2. Losses from conversion of
foreign currency
3. Other bad debt and
4. Loss of evaluation of Option

19,134,425,513
8,599,786,747

8,456,590,896

212,789,229

59,760,605

168,122

4,148,577

92,019,514

6. Loss of evaluation of derivatioe


commodity(note 8)

226,512,120

7.Impairment of available-for-sale
securities

9,907,539,513

8. Commission fees
9. Other loss

12,458,110,055

3,730,615,629

96,261,800

206,474,539

348,468

519,809

. Less:profit/loss before income

(7,101,232,091)

9,466,252,286

. Income tax expense(note 12)

(754,037,667)

2,635,639,258

(6,347,194,424)

6,830,613,028

. Net income (loss) (note 13,14)


dart.fss.or.kr

Page 33

.
12 2011 1 1 2011 12 31 11 2010 1 1 2010 12
31

( : )

2010.01.01( 8,661,900,000

597,333,772 (194,633,770) 103,664,934,4 (4,210,620,73 108,518,913,7

81

8)

45

- 147,725,332,3

- 147,725,332,3

18

18

2010.12.31

8,661,900,000

- 6,830,613,028 6,830,613,028

597,333,772 (194,633,770) 251,390,266,7 2,619,992,290 263,074,859,0


99

2011.01.01( 8,661,900,000

597,333,772 (194,633,770) 251,390,266,7 2,619,992,290 263,074,859,0

91

99
-

64,489,590

91
(64,489,590)

- (6,347,194,42 (6,347,194,42
4)

2011.12.31

8,661,900,000

- 10,379,525,38

- 10,379,525,38

597,333,772 (130,144,180) 261,769,792,1 (3,791,691,72 267,107,190,0


84

dart.fss.or.kr

4)

4)

52

Page 34

Statement of changes in equity


Statement of changes in equity
The 12th period: 2011.1.12011.12.31
The 11th period: 2010.1.12010.12.31
Celltrion GSC

Accounting

2010.01.01

Unit: KRW

Capital

Capital reserves

8,661,900,000

597,333,772

Adjustment of

Other

capital

comprehensive

(194,633,770)

103,664,934,481

Total

(4,210,620,738)

108,518,913,7
45

(reported
amounts)
Net income in this
period

6,830,613,028

6,830,613,028

Income from

147,725,332,318

147,725,332,3
18

the evaluation
of available-forsale securities
2010.12.31

8,661,900,000

597,333,772

(194,633,770)

251,390,266,799

263,074,859,0
91

8,661,900,000

597,333,772

(194,633,770)

251,390,266,799

2,619,992,290

263,074,859,0
91

64,489,590

(64,489,590)

Net income in this


period

(6,347,194,42
4)

(6,347,194,42
4)

Income from

10,379,525,38

10,379,525,38

2011.01.01(report
ed amounts)

Corporate bonds
discounts

the evaluation

of available-forsale securities
2011.12.31

dart.fss.or.kr

8,661,900,000

597,333,772

(130,144,180)

261,769,792,1

(3,791,691,724

267,107,190,0

84

52

Page 35

12 2011 1 1 2011 12 31 11 2010


1 1 2010 12 31

( : )
11 ()

10 ()

2,914,114,639

4,679,672,728

1.()

(6,347,194,424)

6,830,613,028

2.

15,851,077,128

9,415,241,775

23,875,480

7,462,469

4,854,776

410,000

310,000

242,800

242,800

5,594,015,232

5,679,218,570

91,019,514

.
.

dart.fss.or.kr

Page 36

Cash flow statement

Cash flow statement


The 12th period: 2011.1.12011.12.31
The 11th period: 2010.1.12010.12.31
Celltrion GSC
accounting

Unit: KRW
The 11th period

Cash flows from operating activities

The 10th period


2,914,114,
639

4,679,672,72
8

1. Net income in this period

(6,347,194,424)

6,830,613,028

2. Total non-cash expenses

15,851,077,128

9,415,241,775

23,875,480

2.provision for bad debt

7,462,469

4,854,776

3.Depreciation expense

410,000

310,000

4.Amortization

242,800

242,800

5.Interest cost

5,594,015,232

5,679,218,570

91,019,514

1.Retirement pay

6. Other provision for bad debt

dart.fss.or.kr

Page 37

.
.
.
3.

3,730,615,629

226,512,120
9,907,539,513
(6,295,403,556)

(14,045,911,322
)

47,145,960

6,295,403,556

8,530,332,119

4,090,844,303

1,377,588,940

4.

(294,364,509)

2,479,729,247

(746,246,910)

(485,477,520)

. ()

1,781,817,985

(1,647,204,306)

. ()

4,095,518,833

(3,896,910)

. ()

1,828,972,550

(3,787,397,367)

21,644,384

1,180,790,520

. ()

(115,355,272)

84,004,510

(2,639,232,965)

(1,526,353,437)

(798,173,897)

6,324,891

202,624

798,508,736

716,374,579

104,649,150

173,669,697

(236,405,243)

540,283,997

17,744,490

(66,650)

(56,978,164)

281,081,121

. ()

(2,734,341,132)

4,870,903,203

. ()

(2,709,630,958)

2,709,630,958

36,282,719

526,005,473

(102,284,951)

. ()
. ()
.

. ()
. ()
. ()

.
.
.

(8,377,694,387)

5,731,374,952

1.

48,888,808,243

18,407,829,267

46,381,533,243

9,907,837,267

2,499,960,000

8,499,992,000

7,315,000

(57,266,502,630

(12,676,454,315

57,265,302,630

2,676,454,315

.
2.

7.Loss of the option evaluation

8.Loss of the evaluation of derivative commodities

226,512,120

9.Impairment loss of avabliable-for-sale securities

9,907,539,513

3.

Non-cash income
1.Reversal of bad debt provision

2.Income of avabliable-for-sales securities


3.Income of derivative commodity
4. Income of the evaluation of derivative commodity

4.Changes in assets and liabilities through operating


activities

3,730,615,629

(14,045,911,322)

(6,295,403,556)
-

47,145,960

6,295,403,556

8,530,332,119
4,090,844,303

1,377,588,940

(294,364,509)

2,479,729,247

1.Increase in accounts receivable

(746,246,910)

(485,477,520)

2. Increase(decrease) in uncollected income

1,781,817,985

(1,647,204,306)

4,095,518,833

(3,896,910)

1,828,972,550

(3,787,397,367)

1,180,790,520

21,644,384

6.Decrease(increase) in derivative commodity


7.Decrease(increase) in tax refund

(115,355,272)

84,004,510

(2,639,232,965)

(1,526,353,437)

(798,173,897)

6,324,891

3.Decrease(increase) in accounts receivable


4.Decrease(increase) in advance payment
5.Decrease(increase) in prepaid expense

8.decrease(increase) in liquid deferred tax assets


9.Decrease(increase) in goods
10.Decrease(increase) in goods receivable
11.Increase(decrease) in accounts payable

202,624

798,508,736

716,374,579

104,649,150

173,669,697

(236,405,243)

540,283,997

17,744,490

(66,650)

(56,978,164)

281,081,121

2.Increase(decrease) in deposit received

(2,734,341,132)

4,870,903,203

3.Increase(decrease) in withholding tax

(2,709,630,958)

2,709,630,958

36,282,719

526,005,473

(102,284,951)

12.Increase in accrued expenses


13.Increase(decrease) in advanced additional tax
14.Decrease(increase) in deposit received
1. Increase(decrease) in accounts payable

4.Increase in non-liquid deferred tax liability


5.Increase in retirement assets
. Cash flows from investing activities

(8,377,694,38
7)

5,731,374,952

Cash received from disposal of investment

48,888,808,243

18,407,829,267

1.Decrease in short-term investment assets

46,381,533,243

9,907,837,267

2,499,960,000

8,499,992,000

7,315,000

(57,266,502,630)

(12,676,454,315

57,265,302,630

2,676,454,315

2.The dispose of available-for-sale securities


3.Decrease in cash deposit
1.Cash received from disposal of investment

)
3.Increase in short-term investment assets

.
.

10,000,000,000

1,200,000

3,000,000,000

400,000,000

1.

14,000,000,000

12,600,000,000

14,000,000,000

12,600,000,000

(11,000,000,000

(12,200,000,000

11,000,000,000

5,200,000,000

7,000,000,000

2.

.
.
. ()(++)

(2,463,579,748)

10,811,047,680

11,199,550,698

388,503,018

8,735,970,950

11,199,550,698

4.The purchase of available-for-sale


security
5.The purchase of consumption goods

10,000,000,000

1,200,000

3,000,000,000

.Cash flows from financing activities


1. Cash received from financing activities 14,000,000,000
1. Increase in short-term loans

400,000,000
12,600,000,000

14,000,000,000

12,600,000,000

2. Cash outflows from financing activities (11,000,000,00


0)

(12,200,000,000
)

1. Repayment of Short-term loans

11,000,000,000

5,200,000,000

2. Repayment of liquid long-term

7,000,000,000

loans

. Increase(decrease) of cash (I+II+III)


. Cash at the beginning of period
. Cash at the end of period

(2,463,579,748)

10,811,047,680

11,199,550,69
8

388,503,01
8

8,735,970,95
0

11,199,550,69
8

(1)
1).
(:).

(%)
2011.12.31

6.0

50

50

8.5

32,609,293

21,725,524

32,609,343

21,725,574

( 13 ).

2)
.
(:).
()

()
() 2

(%)

(*)

10,475,717

8.99

34,925,794 380,268,527 380,268,527 345,342,734

2,000,000

9.90

10,000,000

92,460

92,460

9,907,540

44,925,794 380,360,987 380,360,987 345,342,734

9,907,540

(*) () ,
() 2
.

(1) The summary of the accounting processing content


1). Short-tern investment assets
The content of current investment assets at the end of accounting period are as follows:

Amount of money

2011.12.31
Annual interest rate (%)

Classification

(Unit: KRW 000)

The end of this period

The end of last period

Government bond

6.0

50

50

Short-term loan

8.5

32,609,293

21,725,524

32,609,343

21,725,574

Total
Short-term loans are loans to the companys related parties. (Note 13)
2) Available-for-sale securities
a. The content of Available-for-sale securities

The content of Available-for-sale securities at the end of the accounting period is as follows:
(Unit: KRW 000)
At the end of current period

The name of
Shareholding
the company

Ownership
rate
(%)

Purchase
cost

Fair value(*) Book value

Total
Impairment
unrealized
loss
loss

Celltrion

10,475,717

8.99

34,925,79 380,268,52 380,268,52


345,342,734
4
7
7

Tomato bank

2,000,000

9.90

10,000,00
0

Total

92,46
0

92,46
0

9,907,540

44,925,79 380,360,98 380,360,98


345,342,734
4
7
7

9,907,540

The price of Celltrion Stock at the end of accounting period is applied in this report. Tomatobank believes that
it is difficult to recover the net assets, so impairment loss is verified in this accounting period.

()

()
() 2

(%)

(*)

10,684,047

9.21

35,620,361 357,915,575 357,915,575 322,295,214

2,000,000

9.90

10,000,000

45,620,361 367,915,575 367,915,575 322,295,214

10,000,000

10,000,000

, 2009
() ,

6,295,404
. .

(:).

322,295,214

(6,284,488)

29,332,008

345,342,734

(70,904,947)

1,382,587

(14,050,582)

(83,572,942)

251,390,267

(4,901,901)

15,281,426

261,769,792

.
(
16 ).

The end of last period

The name of
company

Ownership
Shareholding
rate

Purchase
Fair value(*) Book value
cost

Total
unrealized Impairment
loss
loss

(%)

Celltrion

10,684,047

9.21

35,620,36 357,915,575 357,915,575 322,295,21


1
4

Tomato bank

2,000,000

9.90

10,000,00 10,000,000
0

45,620,36 367,915,575 367,915,575 322,295,21


1
4

Total

10,000,000

Moreover, the Company gave options to bondholders who held convertible bond and corporation bonds with
warrants issued in 2009, to purchase the options of Celltrion stock held by the Company. After exercising the
remaining options, the disposal earnings are KRW 6,295 MN.
b. The changes in the evaluation of Available-for-sale securities are as follows:
The changes of evaluation of available-for-sale securities at the end of this period are as follows: (Unit: KRW
000)
Classification

The beginning of
the period

Liquidation

Increase/decrease

The end of the


period

Income from the evaluation


of available-for-sale
securities

322,295,214

(6,284,488)

29,332,008

345,342,734

The influence of income tax

(70,904,947)

1,382,587

(14,050,582)

(83,572,942)

251,390,267

(4,901,901)

15,281,426

261,769,792

Total differences

c.

Available-for-sale securities which provide guarantees

Some of the available-for-sale securities which the company held have been mortgaged in Woori Bank at the
end of this accounting period. (Note 16)

3)
(:).
.

413

410

1,200

1,203

7,307

4)

723

310

413

6,897

,
(:).

1,202

1,202

1,202

1,202

(916)

(673)

286

529

243

243

3) Tangible assets
The changes of the book value of companys tangible assets in current period and last period are as follows
(Unit: KRW 000)
a)

This accounting period


Book value at the
beginning of the
period

Classification
Convenience
goods
b)

413

Depreciation
cost

Purchase/dispo Book value at the Total depreciation cost


sition
end of the period at the end of the period

410

1,200

1,203

7,307

Last accounting period

Classification

Book value at the


beginning of the
period

Convenience
goods

723

Depreciation
cost

Purchase/dispo Book value at the Total depreciation cost


sition
end of the period at the end of the period

310

413

6,897

4) Intangible assets
The companys intangible assets are trademarks right; the change of the companys intangible assets in this
period and last period. (Unit: KRW 000)
Classification

Current period

Last period

1,202

1,202

Purchase cost /capital expenses

Purchase cost at the end of the


period

1,202

1,202

Accumulateddepreciation cost at the end of the period

(916)

(673)

Book value at the end of the period

286

529

Depreciation cost of intangible


assets

243

243

Purchase cost at the beginning of


the period

5)
.
(:).

(%)
2011.12.31

7.00

2,435,000

2,435,000

CD+5.72

8,500,000

8,500,000

11,000,000

IBK

6.90

11,000,000

8.00

7,000,000

7,000,000

6.30

3,000,000

4.00

5,400,000

5,400,000

37,335,000

34,335,000

7,524,000

7,524,000

(7,524,000)

(7,524,000)

CD+3.55

()

.
(1)
(:).

(%)
2011.12.31

(1~3 )

17.00

17,000,000

17,000,000

(1 )

17.00

5,000,000

5,000,000

22,000,000

22,000,000

(1,866,211)

(3,359,210)

17,221,788

19,225,519

(4,641,481)

(9,044,705)

(850,659)

(2,552,183)

9,863,437

4,269,421

31,863,437

26,269,421

5) Loans
a)

.Long-term and short-term loan

The long-term and short-term loans at the end of accounting period (Unit: KRW 000)
Source of loans

Classification

Short-term loan

2011.12.31
Interest rate (%)

Amount
Current period

Hana daetoo security

7.00

2,435,000

2,435,000

Hana Bank

CD+5.72

8,500,000

8,500,000

Tomato bank

IBKinvestment security

6.90

11,000,000

8.00

7,000,000

Samsung security

6.30

3,000,000

Individuals

4.00

5,400,000

5,400,000

37,335,000

34,335,000

7,524,000

7,524,000

(7,524,000)

(7,524,000)

Shinhan Capital

Total
Woori bank

CD+3.55

Liquid transfer

Long-term loan

Total
b)

Last period

11,000,000
7,000,000
-

Convertible bonds and bonds with warrants

(1) The convertible bonds and bonds with warrants at the end of the accounting period (Unit: KRW 000)
2011.12.31
Interest rate (%)

Classification

Amount
The end of the period

st

Convertible bonds (the 1 -3


issurances)

rd

Bonds with warrants(the 1st


issurance)
Total
Corporate bonds discounts
Premium of the bond repayment
Change in conversion right
Adjustment of warrants
Sum of differences
Sum of book value

The end of the last period

17.00

17,000,000

17,000,000

17.00

5,000,000

5,000,000

22,000,000

22,000,000

(1,866,211)

(3,359,210)

17,221,788

19,225,519

(4,641,481)

(9,044,705)

(850,659)

(2,552,183)

9,863,437

4,269,421

31,863,437

26,269,421

(2)
-1
:5,000
: 2008 12 30
: 2012 12 29
:
: 2010 12 23 17%, 2010 12 23
11%
: 3 1
3 . 2010 12
23 17%, 2010 12 23 11%
.
: 2010 1 1 ~ 2012 12 28
: 35,752
: () () 573,439
: 2009 8 18
2009 8 19 2010 8 18 ()
() 50% 12,000
(208,333 ) , 2010 .
- 2
: 7,000
: 2009 2 27
: 2013 2 26
:
: 17%
: 3 1
3 .
17% .
: 1
: 37,600
: 2009 11 27
2009 11 30 2010 11 29
() () 50% 12,000
(291,667 ) , 2010 .

(2) The condition of the convertible bonds and bonds with warrants
-The 1st issuance of convertible bonds
Book value: KRW 5000 MN
The issue date: 2008.12.30
The maturity date: 2012.12.29
The way of repayment: one-time payments
The repayment of company bonds: From the issue date to the day before 2010.12.23, the interest rate
is 17%. From 2010.12.23 to the end of accounting period, the interest rate is 11%.
Bonds repayment option: bondholders can exercisethe right to sell the bonds to the Company or the
third party designated by the Company during the period from the third month after the issurance to
the end of the period. In this case, from the issue date to the day before 2010.12.23, the interest rate
is 17%. From 2010.12.23 to the transfer date, the interest rate is 11%. The earnings were added to
cash and paid to bondholders.
Conversion period: 2010.1.12012.12
Conversion price: 35,752
Secured assets: The 573,439 stocks of Celltrion held by the Company and Celltrion Holdings
Stock purchase options: If bondholdings who hold convertible bonds don not exercise their share
option until 2009.8.18, the company will give them the right to sell bonds at a price at KRW 12000 per
bond (208,333 shares) from 2009.8.19 to 2010.8.18, the upper limit is 50% of the convertible bonds.
They should exercise the right in 2010.

The 2nd issurance of convertible securities


Book value: KRW 7,000 MN
The issue Date: 2009.2.27
The Maturity date: 2013.2.26
The way of repayment: one-time payments at the maturity date
The sum of the repayment of companys bonds: is calculated by the annual compound interest rate
17%, from the issuing date to the maturity date.
The repayment of Option: bondholders can exercise the right to sell the bonds to the Company or the
third party designated by the Company during the period from the third month after the issurance to
the end of the period. In this case, from the issue date to the transfer date, the annual compound
interest rate is 17%, the earnings were added to cash and paid to bondholders.
Conversion period: from the date 1 year after the issurance to one day before maturity
Conversion price: KRW 37,600
Stock purchase options: If bondholdings who hold convertible bonds don not exercise their share
option until 2009.11.27, the company will give them the right to sell bonds at a price at KRW 12000 per
bond (291,667 shares) from 2009.11.30 to 2010.11.29, the upper limit is 50% of the convertible bonds.
They should exercise the right in 2010.

- 3
: 5,000
: 2009 4 2
: 2013 4 1
:
: 17%
: 3 1
3 . .
17% .
: 1
: 37,600
: 2010 2 27
2010 2 28 2011 2 27 ()
() 50% 12,000
(208,330 ) . .

- 1
: 5,000
: 2009 1 12
: 2013 1 11
:
: 2010 12 23 17%, 2010 12 23
11%
: 3 1
3 . 2010
12 23 17%, 2010 12 23 11%
.
: 2010 1 13 ~ 2013 1 10
: 35,752
: () 570,486
: 2009 8 18
2009 8 19 2010 8 18
() () 50% 12,000
(208,333
), 2010 .

The 3rd issurance of convertible bonds


Book value: KRW 5,000 MN
Issue date: 2009.4.2
Maturity date: 2013.4.1
The way of repayment: one-time payments at the maturity date
The sum of the repayment of companys bonds: is calculated by the annual compound interest rate
17%, from the issuing date to the maturity date.
The Repayment of Option: bondholders can exercise the right to sell the bonds to the Company or
the third party designated by the Company during the period from the third month after the issurance
to the end of the period. In this case, from the issue date to the transfer date, the annual compound
interest rate is 17%, the earnings were added to cash and paid to bondholders.
Conversion period: from the date 1 year after the issurance to one day before maturity
Conversion price: KRW 37,600
Stock purchase options: If bondholdings who hold convertible bonds don not exercise their share
option until 2010.2.27, the company will give them the right to sell bonds at a price at KRW 12000
per bond (208,330 shares) from 2010.2.28 to 2011.2.27, the upper limit is 50% of the convertible
bonds. They should exercise the right in 2010.
The 1st issurance of corporate bonds with warrants
Book value: KRW 5000 MN
Issue date: 2009.1.12
Maturity date: 2013.1.11
The repayment of companys bonds
The sum of the repayment of companys bonds: is calculated by the annual compound interest rate
17%, from the issuing date to the day before 2010.12.23. From 2010.12.23 to the maturity date, the
annual compound interest rate is 11%.
The repayment of option: bondholders can exercise the right to sell the bonds to the Company or the
third party designated by the Company during the period from the third month after the issurance to
the end of the period. In this case, from the issue date to the day before 2010.12.23, the annual
compound interest rate is 17%; from 2010.12.23 to the transfer date, the annual compound interest
rate is 11%. The earnings were added to cash and paid to bondholders.
The period of exercising the subscription right of shares: 2010.1.132013.1.10
The price of the subscription right of shares: KRW 35,752
Secured assets: the 570,486 stocks of Celltrion held by Company
Stock purchase options: if bondholdings who hold convertible bonds don not exercise their share
option until 2009.8.18, the company will give them the right to sell bonds at a price at KRW 12000
per bond (208,333 shares) from 2009.8.19 to 2010.8.18. The upper limit is 50% of the convertible
bonds. They should exercise the right in 2010.

6)
()
,
.
( )
(

2010.01.05

140,000

2010.01.05

600,000

4,609,581

2010.01.25

ORIX Corporaion

600,000

4,090,844

762,477

(226,512) 14 12

( )

8,700,425

1,377,589 60 46
-
1,377,589

7)
(:).

USD 3,676.19

4,240

USD

252,962

222,110.41

EUR 51.61

77

EUR 1.98

USD 3,676.19

4,317

USD

252,965

222,110.41
EUR 51.61

EUR 1.98

USD 59,831.43

69,004

EUR
163,949.00

244,956

GPB 5,500.42

9,776

CHF 35,254.15

43,217

USD 59,831.43

366,953

EUR
163,949.00

GPB 5,500.42

CHF 35,254.15

6) Derivatives trading
Company has signed a contract that give buyers income compensation or share bonus when Woori Bank
transfers the celltrions stock. Profit and loss of current period and previous period are as follows:
Current period
Contract date

Trading object

Deal stock

Earnings

Appraisal profit
(Loss)

Note

2010.01.05

Individual

140,000shares

762,477

(226,512)

120,000 shares of 140,000


shares

Trading object

Deal stock

Earnings

Appraisal profit

Note

Previous period
Contact date
2010.01.05

Individual

600,000shares

4,609,581

1,377,589

460,000 shares of
600,000 shares

2010.01.25

ORIX Corporaion

600,000shares

4,090,844

The end of trade

8,700,425

1,377,589

Total

7) Foreign currency assets and foreign exchange liabilities


Up until the end of accounting period, changes of companys foreign currency assets and liabilities are as follows:
(Unit: KRW 000)
This period
Account

Cash and cash equivilent

Total assets

KRW

Foreign currency
amount

KRW

USD 3,676.19

4,240

USD 222,110.41

252,962

EUR 51.61

77

EUR 1.98

Foreign currency amount

USD 3,676.19
EUR 51.61

Accounts payable

Last period

USD 222,110.41
4,317

252,965

USD 59,831.43

69,004

EUR163,949.00

244,956

GPB 5,500.42

9,776

CHF 35,254.15

43,217

USD 59,831.43
Total liabilities

EUR 1.98

EUR 163,949.00
GPB 5,500.42
CHF 35,254.15

366,953

8)
( : ).

23,875

23,875

9)
.
4,000,000 (1 :5,000 )
( : 1%, 15%) 20%
.
2011 12 31
1,732,380 . .
.
.
(233 , 1,165 )
, .
.
.

12
01

=====================
2011 01
11

2010 01 01
2010 12 31

2011 12
31

2012 3 30

2011 3 31



()

( : )

(3,791,691)

2,619,992

2,555,503

(4,210,621)

()

(6,347,194)

6,830,613

64,489

()

8) Retirement pension liabilities


Changes of retirement pension liabilities in current period and the last period are as follows: (Unit: KRW 000)
Division

Current period

Last period

Initial balance

Payments during the period

Standard value In the period

23,875

Final balance

23,875

9) Capital
a) The number of authorized shares and the number of the issue of ordinary shares
According to the rule of company: the sum of stock that company can issue is 4,000,000 shares (the price:
KRW 5,000 per share), the non-voting preferred shares in registered form (preferred shares rate: 1%-15%)
can be issued up to 20% of the sum of shares.
Until 2011.12.31, the issue of ordinary shares is 1,732,380 shares.
b) Premium of the decrease in capital
Premium of the reduction of capital can not be used for other purposes except meeting a deficit and
transfering to capital.
c) Share holding
In order to dispose the shares related to non-paid capital increase (223 shares, KRW 1.2 MN), the
Company planed to include the acquisition cost of self-owned shares into adjustment of equity.
d) Statement of losses disposal
The details of statement of losses disposal are as follows:
Statement of losses disposal
====================
The 11th period
The 12th period
2011.1.12011.12.31
2010.1.12010.12.31
Scheduled date of disposal 2012.3.30
Real date of disposal 2011.3.31
Celltrion GSC

Division
Undistributed loss
Undistributed profit in current period (undistributed
Net income(loss)
Retained earnings

(Unit: KRW 000)

Current quarter

Last quarter

(3,791,691)

2,619,992

2,555,503

(4,210,621)

(6,347,194)

6,830,613

64,489


()

64,489

(3,791,691)

2,555,503

10)
.
(:).

1,848,913

3,635,987

10,065,044

40,665,771

(12,667,995)

(41,666,119)

(754,038)

2,635,639

.
( :).

(7,101,232)

9,466,252

(1,744,898)

2,264,433

990,860

371,206

(:2,324 ,
:1,751

562,455

423,807

428,405

(52,601)

(/)

(754,038)

2,635,639

27.84%

. ()
() (
:).

The difference of stock issue discount


Undistributed profit in next period(undistributed loss)

64,489

(3,791,691)

2,555,503

10) Income tax expenses


a) The detail of income tax expenses
The details of income tax expenses in current period and last period
Detail

(Unit: KRW 000)

Current period

Income tax
The change of deferred income tax liabilities due to
temporary difference
Deferred income tax reflected on the capital

Last period

1,848,913

3,635,987

10,065,044

40,665,771

(12,667,995)

(41,666,119)

(754,038)

2,635,639

Income tax expenses

b) The relation between net profit and loss before income tax and income tax expenses
The relation between net profit and loss before income tax and income tax expenses are as follows(Unit: KRW
000)
category

Current period

Last period

Net profit and loss before income tax

(7,101,232)

9,466,252

Income tax according to applicable tax rate

(1,744,898)

2,264,433

990,860

371,206

Adjustment
Non tax exemption Expenses(current period:
KRW 232 4 MN l t
i d KRW 1 751 MN)
Difference in other tax rate
Income tax expenses
Effective tax rate (income tax expenses/ net
profit and loss before income tax)

562,455

423,807

428,405

(52,601)
(754,038)

2,635,639

27.84%

c) The increase and decrease of temporary differences and deferred income tax assets (liabilities)
The increase and decrease of temporary differences and deferred income tax assets (liabilities) in this period and
previous period (Unit: KRW 000)

(1)

()

()

()

153,364

153,364

333,293

333,293

73,324

14,856,083

995,146

13,860,937

3,049,406

4,369,436

1,008,586

3,360,850

739,387

226,512

226,512

49,833

9,907,540

9,907,540

2,179,659

4,149

4,149

168

168

37

29,450

29,450

4,490,012

4,490,012

17,907

17,907

3,939

8,457,872

164,921

8,292,951

1,824,449

32,360,366

6,845,628

10,486,630

36,001,368

6,091,646

1,828,388

(2,783,677)

(1,217,802)

(1,565,875)

(344,492)

(575,533)

(275,197)

(300,336)

(66,074)

(9,044,705)

(4,403,224)

(4,641,481)

(1,021,126)

(2,552,182)

(1,701,523)

(850,659)

(187,145)

(89,042,652) (112,090,172) (345,342,734)

(83,572,941)

-
-


()
-
-

(322,295,214)
(1,377,589)

(1,377,589)

(8,749)

(8,749)

(1,925)

(17,907)

(17,907)

(3,939)

(98,017,987) (112,098,921) (352,709,834)

(1,620,762)

(83,576,880)

4,470,884

(81,748,492)

()-

(338,628,900)

This period
Liquid
Nonliquid
deferred
deferred
Balance at income tax income tax
the end of assets(liabili assets(liabiliti
ties)
the period
es)

temporary differences
category

Balance at the
beginning of
the period

Decrease

Increase

Deductable temporary
differences
Provision for bad debt
Premium of repayment-Convertible bonds
Premium of repayment-corporate bonds with warrantss
Evaluation loss of derivative
commodity
The impairment loss of
available-for-sale securities
The loss of foreign exchange
translation
Accrued expenses
Options payables
Pension payables
Available-for-sale securities
Total

153,364

153,364

14,856,083

995,146

4,369,436

1,008,586

333,293

73,324

- 13,860,937

3,049,406

3,360,850

739,387

226,512

226,512

49,833

9,907,540

9,907,540

2,179,659

4,149

4,149

168

168

37

29,450

29,450

4,490,012

4,490,012

17,907

17,907

8,457,872

164,921

32,360,366

333,293

8,292,951

6,845,628 10,486,630 36,001,368

3,939
1,824,449

6,091,646

1,828,388

(1,565,875)

(344,492)

(300,336)

(66,074)

(4,641,481) (1,021,126)

Accured temporary differences


Issurance discount -convertible
bonds

(2,783,677)

(1,217,802)

Issurance discount -bonds with


stock option

(575,533)

(275,197)

Adjustment of conversion
options

(9,044,705)

(4,403,224)

of subscribtion right

(2,552,182)

(1,701,523)

(850,659)

The profit and loss of evaluation (322,295,214) (89,042,652) (112,090,17 (345,342,73


of available for-sale securities
2)
4)
The profit and loss of evaluation
of derivative commodity

(1,377,589)

(1,377,589)

Earnings of foreign exchange


conversion

Pension contributions

Total

- (83,572,941)

(8,749)

(8,749)

(1,925)

(17,907)

(17,907)

(338,628,900) (98,017,987)

Deferred income tax assets(liabilities)-net amount

(187,145)

(3,939)

(112,098,92 (352,709,83
(1,620,762) (83,576,880)
1)
4)
4,470,884 (81,748,492)

(2)

()

()

()

279,294

279,294

153,364

153,364

37,114

14,856,083

14,856,083

3,595,172

4,369,436

4,369,436

1,057,404

161

161

4,149

4,149

1,004

29,450

29,450

7,127

3,151,298

2,391,902

3,730,616

4,490,012

1,086,583

9,018,613

560,741

8,457,872

1,860,732

1,070,798

1,070,798

32,745,683

4,302,896

3,888,129

32,360,366

5,784,404

1,860,732

(3,893,594)

(1,109,917)

(2,783,677)

(673,650)

(835,954)

(260,421)

(575,533)

(139,279)

-
-


()
-
-

(12,358,387)

(3,313,682)

(9,044,705)

(2,188,819)

(3,547,381)

(995,199)

(2,552,182)

(617,628)

(132,903,762)

(8,263,418)

(197,654,870)

(322,295,214)

(70,904,947)

(1,377,589)

(1,377,589)

(333,377)

(153,539,078)

(13,942,637)

(199,032,459)

(338,628,900)

(3,952,753)

(70,904,947)

()-

1,831,651

(69,044,215)

Previous period
Liquid
Nonliquid
deferred
deferred
income tax
income tax
assets(liabiliti assets(liabiliti
Balance at the
es)
es)
end of the
period

Temporary differences
Category

Balance at the
beginning of
the period

Decrease

Increase

Deductable temporary differences


Provision for bad debt

279,294

279,294

153,364

153,364

37,114

Premium of repayment--convertible
bonds

14,856,083

14,856,083

3,595,172

Premium of repayment--corporate
bonds with warrants

4,369,436

4,369,436

1,057,404

161

161

4,149

4,149

1,004

29,450

29,450

7,127

3,151,298

2,391,902

3,730,616

4,490,012

1,086,583

9,018,613

560,741

8,457,872

1,860,732

1,070,798

1,070,798

32,745,683

4,302,896

3,888,129

32,360,366

5,784,404

1,860,732

Issurance discount -convertible


bonds

(3,893,594)

(1,109,917)

(2,783,677)

(673,650)

Issurance discount bonds with


warrants

(835,954)

(260,421)

(575,533)

(139,279)

Adjustment of conversion option

(12,358,387)

(3,313,682)

(9,044,705)

(2,188,819)

(3,547,381)

(995,199)

(2,552,182)

(617,628)

The loss of foreign exchange


conversion
Accrued expenses
Option payables
Avaiable-for-sale securities
Loss carried forward
Total
Accured temporary differences

Adjustment of subscribtion right

The profit and loss of evaluation of


(132,903,762)
available-for-sale securities
The profit and loss of evaluation of
derivative commodity
Total

(8,263,418) (197,654,870) (322,295,214)


-

(1,377,589)

(1,377,589)

- (70,904,947)
(333,377)

(153,539,078) (13,942,637) (199,032,459) (338,628,900) (3,952,753) (70,904,947)


Deferred income tax assets(liabilities)-net amount

1,831,651 (69,044,215)

.
(:
).

345,342,734 (83,572,942) 261,769,792 322,295,214 (70,904,947) 251,390,267

. (:)

1,964,268

926,356

(1,848,913)

(3,635,987)

115,355

(2,709,631)

()
11)

(:).

()

(6,347,194)

6,852,936

10,379,525

147,725,332

( :

10,379,525

147,725,332

4,032,331

154,578,268

: 12,667,995
: 41,666,199 )

12)
1
( : , ).

()
(*1)

(6,347,194,424)

6,830,613,028

1,732,147

1,732,147

(3,664)

3,943

d) Explainations of addtion and deduction of deferred tax assets


The details of addtion and deduction of deferred tax assets at the end of accounting period are as follows (Unit:
KRW 000)
category

This period
The amount Influence of
before income income tax

Previous period
The amount The amount Influence of The amount
after income before income income tax after income

345,342,734 (83,572,942) 261,769,792 322,295,214 (70,904,947) 251,390,267

The profit and loss of


evaluation of avalibale-forsales securities

e) Income tax assets and income tax liabilities before offset in this period (Unit: KRW 000)
Accounting

This period

Income tax assets before deduction


Income tax liabilities before deduction
Net income tax assets(liabilities) after deduction

Previous period

1,964,268

926,356

(1,848,913)

(3,635,987)

115,355

(2,709,631)

11) Statement of comprehensive income


Details of comprehensive income of current and previous period are as follows: (Unit: KRW 000)
Division
Net income (loss)
Other comprehensive income
Available-for-sale securities
valuation gains
(Tax effect:

Current period

Previous period
(6,347,194)

6,852,936

10,379,525

147,725,332

10,379,525

147,725,332

4,032,331

154,578,268

Current period: 12,667,995


Previous period: 41,666,199)
Net comprehensive income

12) Basic Earnings Per Share


Basic earnings per share is calculated according to the profit of one common share, the details of which are as
follows (Unit: KRW, share)
Division
Net income per common share (loss)
Weighted average number of common
shares
Basic Earnings Per Share

Current period

Previous period

(6,347,194,424)

6,830,613,028

1,732,147

1,732,147

(3,664)

3,943

(*1) ,
.
13)
.
.

2011

2010

()

()

()

()

()

()

()

()

()

()

()(*1)

()(*1)

CELLTRION DON

CELLTRION DON

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


690,620

30,551,930

31,242,550

()


158,131

20,823,746

20,981,877

(*1) The weighted average number of common share has deducted the company-owned shares in stock
issuance; the number of common shares of current period stays the same as that of previous period.
13) Related party transaction
Related parties and the transactions between related parties during current as well as previous period are as
follows:
a) Related parties

Division

2011

2010

General manager Seo Jung-Jin

Seo Jung-Jin

Other related
parties

Celltrion Holdings

Celltrion Holdings

Celltrion Healthcare

Celltrion Healthcare

Celltrion

Celltrion

Celltrion Pharm

Celltrion Pharm

Celltrion Chemical Laboratory

Celltrion Chemical Laboratory

Celltrion Venture Capital(*1)

Celltrion Venture Capital(*1)

Shareholders and executive employees

Shareholders and executive employees

Celltrion DON

Celltrion DON

(*1) Celltrion Venture Capital megered with Celltrion Holdings in this period.
b) Main transcation between related parties (Unit: KRW 000)
(Current period)
Division

Sold

General manager

Purchased
690,620

Other related parties

30,551,930

Total

31,242,550

(Previous period)
Division
General manager

Sold

Purchased
158,131

Other related parties

20,823,746-

Total

20,981,877-

. (:)
()

25,436,986

254,370

9,185,134

91,852

13,967,318

34,622,120

346,222

13,967,318

()

2,045,021

20,450

22,769,818

227,698

14,456,083

24,814,839

248,148

14,456,083

. (:)
()

(%)

(*1)

8.50%

24,833,000

8.50%

7,736,293

17.00%

10,382,301

(*1) () 13,990 .
()

(%)

(*1)

8.50%

2,045,021

8.50%

19,680,503

17.00%

8,329,621

c) Credits and debts generated from transactions between related parties


(Unit: KRW 000)
(Current period)

Company
General manager
Other related parties
Total

Credit
Amount

Debt

Reserves for bad debt

Amount

25,436,986

254,370

9,185,134

91,852

13,967,318

34,622,120

346,222

13,967,318

(Previous period)

Company
General manager

Credit
Amount

Debt

Reserves for bad debt

Amount

2,045,021

20,450

Other related parties

22,769,818

227,698

14,456,083

Total

24,814,839

248,148

14,456,083

d) Credits and debts on financial arrangements with related parties

(Unit: KRW 000)

(Current period)
Division
Credit
Debt

Short-term
investment asset
Convertible bond

Transaction parties

Profit rate

Amount

General manager (*1)

8.50%

24,833,000

Other related parties

8.50%

7,736,293

Other related parties

17.00%

10,382,301

(*1) Guarantee of long-term loan is provided by Celltrion Healcare with 13,990 share of stock
(Previous period)
Division
Credit
Debt

Holder

Profit rate

Amount

Short-term
investment assets

General manager (*1)

8.50%

2,045,021

Other related parties

8.50%

19,680,503

Convertible bond

Oher related parties

17.00%

8,329,621

14)
( : ).
(1)

6,325

26,617,079

16,957,367

26,617,079

16,963,692

798,174

25,818,905

16,963,692

(2)

1.


701,638

106,282

2.

23,876

3.

24,426

10,069

4.

7,463

4,855

5.

173,934

442,732

6.

21,419

18,559

7.

410

310

8.

243

243

9.

1,643

636

10.

1,714

665

190

53

12.

8,276

6,189

13.

16,763

10,558

14.

4,053

164

15.

1,771

1,330

69,407

220,500

17.

3,788

435

18.

40,738

7,980

300

1,102,052

831,560

11.

16.

19.

14) Cost of goods sold and selling and administrative expenses


The cost of goods sold and selling and administrative expenses of current as well as previous period are as
follows: (Unit: KRW 000)
(1) Cost of goods sold
Division

Current period

Previous period

Beginning inventory

6,325

Purchase this period

26,617,079

16,957,367

Total

26,617,079

16,963,692

798,174

25,818,905

16,963,692

Ending inventory
Cost of goods sold (COGS)

(2) Selling, general and administrative expenses (SG&A)


Division
1. Salaries

Current period

Previous period
701,638

106,282

2. Salary of retirement

23,876

3. Welfare expense

24,426

10,069

7,463

4,855

173,934

442,732

21,419

18,559

7. Depreciation expense

410

310

8. Mortization of intangible assets

243

243

9. Tax and addition

1,643

636

10. Books and printing

1,714

665

190

53

8,276

6,189

13. Vehicle maintainance expenses

16,763

10,558

14. Education and training expenses

4,053

164

15. Communication expenses

1,771

1,330

69,407

220,500

3,788

435

40,738

7,980

300
1,102,052

4. Serves for bad debt


5. Delivery cost
6. Entertainment expenses

11. Consumables
12. Travel and transportation expenses

16. Commisions
17. Issurance premium
18. Rental cost
19. Others
Total

831,560

15)
(:).

23,047,520

189,391,452

12,667,995

41,666,119

16) :
. (:)

2,051,546

(*1)

7,524,000

500,000

(*1)

460,000

(*2)

7,000,000

299,989

2,435,000

700,000

IBK

11,000,00
0

IBK

935,000

8,500,000

256,960

3,000,000

200,000

1,012,253

180,000

()

USANCE L/C

14,502,55
2

1
1

5,400,000

(*1) 42,515,000
.
(*2) 14,000,000
.

dart.fss.or.kr

Page 72

15) Cash flow statement


Important non-cash transactions are as follows (unit: KRW 000)
Division

Current period

Previous period

Valuation gains of available-for-sale securities

23,047,520

189,391,452

Reversal of deferred tax liabilities in valuation of available-for-sale


securities

12,667,995

41,666,119

16) Contingent liabilities and commitments


a) Guarantees and collaterals of company assets (unit: KRW 000)
Account
Collaterals
Available-for-sale
2,051,546
financial assets
share
500,000 share

Loan provider
Woori Bank (*1)

Debt balance
7,524,000

Woori Bank (*1)

Details
Loan guarantee from Woori Bank

Guarantee provided by Celltrion Holdings

460,000 share

(*2)Shinhan
Capital Co., Ltd.

7,000,000

299,989 share

Hana Daetoo
Securities Co., Ltd

Loan guarantee from Hana Daetoo


2,435,000 Securities

700,000 share

Ibk Investment &


Securities Co., Ltd

Loan guarantee from IBK Investment &


11,000,000 Securities Co., Ltd

935,000
share
256,960
share
200,000
share

1,012,253
share

Hana Bank

Loan guarantee from Shinhan Capital

Loan guarantee from Hana Bank


8,500,000

Samsung
Securities Co., Ltd
National
Agricultural
Cooperative
Federation
Petra 2 private
equity investment

3,000,000
-

Loan guarantee from Samsung Securities


USANCE L/C
Collateral arrangements

One time convertible company bonds


14,502,552 and one time bond warrants as
collateral

fund
180,000
share

Individual

5,400,000

Individual loan guarantee

(*1) Company and Celltrion Holdings have borrowed KRW 42,515,000 from Woori Bank, have joint guarantee
obligation
(*2) Company and Celltrion Holdings have borrowed KRW 14,000,000 from Woori Bank, have joint guarantee
obligation

dart.fss.or.kr

Page 73

. (:)

(*1)

, ()

()

9,028,800 () 2,430,389
() 60,000
() 60,000
()

()

()

6,978,584

7,209,856

11,050,000

3,600,000

(*1)

7,292,696 () 131,672

7,000,000 () 460,000

(*1) ()
( 16 ).

() 13,990 .
. (:)

()

()
2,551,546 (*1)

28,991,000

()

()
460,000 (*2)

7,000,000

(*1) ()
( 16 ).
(*2) ()
( 16 ).
.

USD 3,000,000

USANCE L/C

(*) () 200,000 ,
( 16 , ).

dart.fss.or.kr

Page 74

b) Details of guarantees and collaterals provided by other parties (unit: KRW 000)

Loan source
Woori Bank

Collateral source
Celltrion Holdings
Celltrion Healthcare

Guarantee details

Amount

Provide guarantee

9,028,800

Details
2,430,389 shares of elltrion stock
60,000 shares of Celltrion Healthcare

Joint guarantee

stock
60,000 shares of Celltrion Holdings
stock
340,000 shares of CelltrionGSC stock
Once convertible bonds Celltrion Holdings

Provide guarantee

7,292,696 131,672 shares of Celltrion stock

Majority shareholder Joint-guarantee


Shinhan Capital

Celltrion Holdings

Provide guarantee

7,000,000 460,000 shares of Celltrion stock

Majority shareholder Joint guarantee


Three convertible
bonds

Majority shareholder Joint guarantee

1st BWs

Majority shareholder Joint guarantee

Hana Bank

Majority shareholder Joint guarantee

National Agricultural
Cooperative

Majority shareholder Joint guarantee

6,978,584

7,209,856

11,050,000

3,600,000

(*1) To guarantee every loan that has joint repayment obligation with Celltrion Holdings (see note 16)
Above mentioned loans to financial institutions, except for guarantees provided by other parties,
company loans are guaranteed by 13,990 shares of Celltrion Healthcare stock provided by majority
shareholders.
c) Details of collaterals to provide for others (unit: KRW 000)
Borrower
Celltrion Holdings

Collateral details
(*1) 2,551,546 shares of Celltrion

Loan source
Woori Bank

Amount

Note

28,991,000 Loan guarantee

stock
Celltrion Holdings

(*2) 460,000 shares of Celltrion

Shinhan

stock

Capital

7,000,000

Loan guarantee

(*1) Guarantee for loan from Woori Bank that has joint guarantee obligation with company and Celltrion
Holdings (Refer to note 16 )
(*2) Guarantee for loan from Shinhan Capital that has joint guarantee obligation with company and Celltrion
Holdings (Refer to note 16 )
d) Agreement with financial institutions
Contractor
NH

Limitation agreed
USD 3,000,000

Amount excercized

Agreement details
-

USANCE L/C

(*) According to the above agreement, company uses 200,000 shares of Celltrion stock as collateral, and
credit guarantee is provided by related parties.
dart.fss.or.kr

Page 75

17)
.
.
-
.
- .
,
,
.
- ( )
.
, ,

.
.
(1)
( :
).
()

1~5

1,758,225

1,758,225

37,335,000

37,335,000

360,066

360,066

275,207

275,207

7,292,696

17,360,885

24,653,581

7,209,856

7,209,856

7,524,000

7,524,000

54,545,194

24,570,741

79,115,935

dart.fss.or.kr

Page 76

17) Financial commodity


a) Important assumption of deciding the fair value of financial commodities
Methods of deciding the fair value of financial assets and financial debts are as follows:
- The fair value of financial assests and financial liabilities that exist within standard transaction conditions
and active market is decided according to market price.
- The fair value of derivative commodity is decided according to announced price. If there is no announced
price available to refer to, a) when it comes to option-free derivative commodity, we should use a proper
revenue curve, and decide the fair value according to the time limit and the analysis of the cash flow that
has already discounted; and b) when it comes to option derivative commodity, we use the option pricing
model.
- (Other than above mentioned financial assets and liabilities) The fair value of other financial assets and
liabilities, is decided according to option pricing model, on the basis of analysis of the cash flow that has
already discounted.
However, up until the end of current period, as for the adjustmets of marketable securities, derivatives,
credits and debts, as well as the liquid assets and liquid liabilities that are not calculated in the profit or
loss of current period, we dont differentiate their discounted cash flow and acquisition cost; we use their
fair value at acquisition.

b) Analysis of the maturity value of financial liabilities as well as administration of liquidity risk
(1) Analysis of the maturity value of financial liabilities
The analysis of the end-of-term value of financial liabilities that are settled after financial assets transactions
are completed, such as cash, is as follows. (Unit: KRW 000)
(The end of current period)
Division
Trade payables
Short-term loan
Accrued expenses
Accounts payable
Convertible company bonds
Bonds with warrants
Current portion of long-term
debt
Total

dart.fss.or.kr

Under 1 year

1-5 years

Over 5 years

Total

1,758,225

1,758,225

37,335,000

37,335,000

360,066

360,066

275,207

275,207

7,292,696

17,360,885

24,653,581

7,209,856

7,209,856

7,524,000

7,524,000

54,545,194

24,570,741

79,115,935

Page 77

()

1~5

959,716

959,716

34,335,000

34,335,000

255,417

255,417

302,471

302,471

20,027,701

20,027,701

6,241,721

6,241,721

4,490,011

4,490,011

7,524,000

7,524,000

47,866,615

26,269,422

74,136,037


(2)


.

.
18)
(:
).

701,638

106,282

23,875

24,426

10,069

410

310

243

243

1,643

636

40,738

4,380

792,973

121,920

dart.fss.or.kr

Page 78

(The end of previous period)


Division
Trade payables
Short-term loan
Accrued expenses
Accounts payable

Under 1 year

1-5 years
-

959,716

34,335,000

34,335,000

255,417

255,417

302,471

302,471

20,027,701

20,027,701

6,241,721

6,241,721

4,490,011

4,490,011

7,524,000

7,524,000

47,866,615

26,269,422

74,136,037

Bond with warrants

Long-term liquid liabilities


Total

Total

959,716

Convertible company bonds

Options payables

Over 5 years

(2) Administration of liquidity risk


Board of directors will take the main responsibility of the administration of liquidity risk and formulate
fundamental policy so as to properly control short-term as well as long-term financing and liquidity. The
company will administrate liquidity risk by keeping affluent reserves and credit limit, keeping observing
predicted cash flow and actual cash flow in correspondence to the end-of-term structure of financial assets and
liabilities.

18) Accounts needed for calculating added value


Accounts needed for calculating added value of the SG&A are as follows.
Accounts
Salary
Salary of retirement
Welfare expense
Depreciation expense
Amortization of intangible assets
Tax and addition
Rental cost
Total

dart.fss.or.kr

Current period

(Unit: KRW 000)


Previous period

701,638

106,282

23,875

24,426

10,069

410

310

243

243

1,643

636

40,738

4,380

792,973

121,920

Page 79

5.
( )
.
( : )

11

10

[]

[]

[]

[]

[]

[]

[]

[]

[]

[]

[ (-) ]

dart.fss.or.kr

Page 80

5. Consolidated Financial Statements


(No relevant items)

a) Overviews of Condolidated Financial Statements


(Units: KRW MN)
The 11th
period

The 10th
period

Current Assets

Quick Assets

Inventory Assets

Non-current Assets

Investment Assets

Tangible Assets

Intangible Assets

Other Non-Current Assets

Current Liabilities

Non-current Liabilities

Capital Stock

Consolidated Capital Surplus

Consolidated Capital Adjustment

Accumulated Other Comprehensive


Income
Retained Earnings

Minority Stockholders' Equity

Revenue

Operating Profit

Continuous Operating Profit

Total Net Income

Net Profit of Parent Company

The number of companies included


in consolidation

Division

Total Assets

Total Liabilities

Total Equity

The 9th period The 8th period The 7th period

[ is negtive (-)]
dart.fss.or.kr

Page 81

.
.
(1)

XX XXXX. XX. XX
XX XXXX. XX. XX
XX XXXX. XX. XX
( : )

XX

XX

XX

(2)

XX (XXXX. XX. XX XXXX. XX. XX )


XX (XXXX. XX. XX XXXX. XX. XX )
XX (XXXX. XX. XX XXXX. XX. XX )
( : )

dart.fss.or.kr

XX

XX

XX

Page 82

b) Considerations on the use of the consolidated financial statements


c) Condolidated Financial Statement
(1) Consolidated Balance Sheet
Consolidated Balance Sheet
The xx period Until XXXX. XX. XX
The xx period Until XXXX. XX. XX
The xx period Until XXXX. XX. XX
Accounting Subject

(Units: KRW MN)

The xx period

The xx period

The xx period

(2) Consolidated Income Statement


Consolidated Income Statement
The xx period (from XXXX. XX. XX to XXXX. XX. XX)
The xx period (from XXXX. XX. XX to XXXX. XX. XX)
The xx period (from XXXX. XX. XX to XXXX. XX. XX)

Accounting Subject

dart.fss.or.kr

(Units: KRW
000,000)

The xx period

The xx period

The xx period

Page 83

(3)

XX (XXXX. XX. XX XXXX. XX. XX )


XX (XXXX. XX. XX XXXX. XX. XX )
XX (XXXX. XX. XX XXXX. XX. XX )
( : )

XXXX.XX.XX
()

XXXX.XX.XX
()

(4)

XX (XXXX. XX. XX XXXX. XX. XX )


XX (XXXX. XX. XX XXXX. XX. XX )
XX (XXXX. XX. XX XXXX. XX. XX )
( : )

XX

XX

XX

(5)
.
6.
( )
.
(1)
( : )

XX

XX

XX

dart.fss.or.kr

Page 84

(3) Consolidated Statements of Changes in Equity


Consolidated Statements of Changes in Equity
The xx period (from XXXX. XX. XX to XXXX. XX. XX)
The xx period (from XXXX. XX. XX to XXXX. XX. XX)

(Units: KRW 000,000)

The xx period (from XXXX. XX. XX to XXXX. XX. XX)


Accounting Subject

Capital
Stock

XXXX.XX.XX

Consolidated onsolidated
Capital
Capital
Surplus
Adjustment

Accumulated Retained
Earnings
Other
Comprehensi
ve Income

Minority
Total

Sharehold
ers Equity

(in the beginning o


the accounting
period)

XXXX.XX.XX
(in the end of the
accounting period)

(4) Consolidated Statements of Cash Flows


Consolidated Statements of Cash Flows
The xx period (from XXXX. XX. XX to XXXX. XX. XX)

(Units: KRW 000,000)

The xx period (from XXXX. XX. XX to XXXX. XX. XX)


The xx period (from XXXX. XX. XX to XXXX. XX. XX)

Accounting
Subject

The xx period

The xx period

The xx period

(5) Notes to Cosolidated Financial Statements in the Current Accounting Year


D. Matters not included
6. The Department Financial Conditions
(No relevant items)
a) Business information of Business Division
(1) Business information of
Business Division
(Units : )
Division

The xx period

The xx period

The xx period

Business Division A
dart.fss.or.kr

Page 85

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

XX

XX

XX

()

(5)
(6)
7.
( )
.
.
.
.


( : )

(c-a)/a

(d-b)/b

dart.fss.or.kr

Page 86

(2)Publics Selling and Administrative Expenses and Assets


(3)Adjusted operating income
(4)Other Business Divisions Conditions
b) Regional Financial Information
(1)Regional Division
(2)Disclosure of targeted regional division
(3)Conditions of regional divisions
(4)Regional Financial Statements
(Units :)
The xx period

Division

The xx period

The xx period

Country Name
(5)Public Selling and Administrative Expenses and Assets
(6)Adjusted operating income
7. Financial Statements before Consolidation and after Consolidation
a)
b)
c)
d)

Overviews of Consolidation
Financial Statements before Consolidation and after Consolidation
Related issues of consolidation
Comparison between predicted and actual financial statements before and after backdoor listing
(Units :)

Division

Years
before
Merger

Predicted Value
before being listed

Actual Value after being listed

The first

The Second

The first

Ratio

The second

year(a)

Year (b)

year(c)

(c-a)/a

year(d)

Ratio
(d-b)/b

Assets

Liabilities

Equity

Total Equity

Operating Profit

Profit befor

Growth rate of sales


volume

Growth Ratio of
Operating Profit

Revenue

Income Tax
Gross Profit
Liability Ratio
Ratio of profit to
owner capital

dart.fss.or.kr

Page 87

IV.
1. ()
.
12

11

10

. ( )
-
.

12

11

10

12

11

20,982 . ,
24,815
13,126 . ,
8,699 ,
29,899

10

2. ()
( )

3. 3

dart.fss.or.kr

Page 88

e) Causes of differences between predicted and actual financial statements


IV Audit Opinions of Auditors, etc.
1. Audit opinions of auditors (certified public accountant), etc.
a)

Auditors

Period No.12
Samyoung accounting corporation

Period No. 11

Period No.10

Samyoung accounting corporation

amyoung accounting corporation

b) Notes to the annual audit (or review) process of the current accounting year
- No relevant matters

c) Audit opinions
Fiscal Year

Audit Opinions

Period No.12

No opinion

nothing

Period No.11

No opinion

nothing

Period No.10

No opinion

nothing

Summary of opinions

d) Summary of special matters


Fiscal Year
Period No.12
Period No.11

Period No.10

Special Matters
In this accounting periods, revenue from related parties is KRW 20,982 MN. As of the
end of this acconting period, credits and debts of related parties are 24,815 million KRW
and KRW 13,126 MN respectively.
In the previous accounting period, revenue from related parties is 8,699 million KRW.
As of the end of the previous accounting period, credits and debts of related parties are
KRW 29,899 MN and KRW 1,261 MN respectively

2. The annual audit (internal) opinions of the current accounting year (no relevant matters)
3.

Remuneration of external auditors in the recent 3 accounting years and relevant matters

dart.fss.or.kr

Page 89

.
( : )

12

30

344

11

29

320

10

27

310

.
( )

4.
( )

dart.fss.or.kr

Page 90

a) Contract conditions of audit service


(Units: KRW: MN)
Fiscal Year

Auditor

Contents

Remunerati Total Time


on

Period No.12 Samyoung


accounting
corporation

External audit contract that complies with Act on


External Audit of Stock Companies

30

344 hours

Period No.11 Samyoung


accounting
corporation

External audit contract that complies with Act on


External Audit of Stock Companies

29

320hours

Period NO.10 Samyoung


accounting
corporation

External audit contract that complies with Act on


External Audit of Stock Companies

27

310hours

b) Non-audit contract with external auditors


(No relevant matters)
4. Others
(No relevant matters)

dart.fss.or.kr

Page 91

V.
1.
,
.
2.
,
( : , %)

2011

2010

27,824

18,965

8,859

46.71

25,819

16,964

8,855

52.19

2,005

2,001

0.19

1,102

862

240

27.84

903

1,169

-266

-22.75

11,130

20,755

-9,504

-45.79

19,134

12,458

6,678

53.60

-7,101

9,466

-16,447

-173.74

-6,347

6,831

-13,087

-191.58

2011 27,824 903


(2)

(:)

12

11

431,849

415,795

16,144

3.88

164,741

152,720

12,021

7.87

267,107

263,075

4,123

1.56

431,849

415,795

16,144

3.88

3.
2 .
(:)
dart.fss.or.kr

Page 92

Operational diagnosis and Analytic Opinions of the Chief Excecutive Officer

1. Relevant matters about predicted information


Attention please, the predicted information included here is based on expectation of internal markets and
working conditions of the company.
2. Business Performance
As of the end of the latest accounting year, the business performance is as follows,
(Units: KRW MN)

Division

2011

Increase or
Decrease

2010

Ratio of increase
or decrease

Revenue

27,824

18,965

8,859

46.71

Cost of sales

25,819

16,964

8,855

52.19

Gross profit

2,005

2,001

0.19

Selling and administrative


expenses

1,102

862

240

27.84

903

1,169

-266

-22.75

Other income

11,130

20,755

-9,504

-45.79

non-operating expense

19,134

12,458

6,678

53.60

Profit before income tax

-7,101

9,466

-16,447

-173.74

Profit for the year

-6,347

6,831

-13,087

-191.58

Operating income

In 2011, the company revenue is KRW 27,824 MN, operating profit is KRW 903 MN.
(2) Financial status

(Units: KRW MN)


Accounting
Subject
Total assets
Total liabilities
Total equity
Totao liabilities and equity

The 12 period

The 11 period

Increase or
Decrease

Ratio of Increase or
Decrease

431,849

415,795

16,144

3.88

164,741

152,720

12,021

7.87

267,107

263,075

4,123

1.56

431,849

415,795

16,144

3.88

3. Procurement of liquidity and funding, etc.


As of the the end of the previous two accounting years, the cash flow is as follows: (Units: KRW MN)

dart.fss.or.kr

Page 59

12

11

2,914

4,680

-1,766

-37.73

-8,378

5,731

14,109

246.18

3,000

400

-2,600

-650.00

. (++)

-2,464

10,811

13,275

122.79

11,200

389

10,811

2,779.17

8,736

11,200

-2,464

-22.00

4.
.
5.
" " "
2. " .

dart.fss.or.kr

Page 60

Accounting Subject

The 12 period

The 11 period

Increase or
Decrease

Ratio of increase or
decrease

. Cash flows from operating activities

2,914

4,680

-1,766

-37.73

. Cash flows from investing activities

-8,378

5,731

14,109

246.18

. Cash flow from financing activities

3,000

400

-2,600

-650.00

. Increase in cash (++)

-2,464

10,811

13,275

122.79

. Opening cash balance

11,200

389

10,811

2,779.17

. Closing cash balance

8,736

11,200

-2,464

-22.00

4. Important changes of accounting policy and accounting valuation


No relevant issues until the end of companys annual report
5. Other issues concerning investment decision
Please refer to note 2 improtant accounting guidelines in audit report in appendix for important changes of
accounting policy and accounting valuation

VI.
1.
.
1 , 2

3 .
.
( )
.
()

.

2 1
.
.

- .
.
- .
.
- .

,
.
()

VI Relevant issues concerning Company Departments (i.e. board of directors) and Subsidiaries
1. Board of directors

a) General introduction of board of directors


Till the end of the annual report, the companys board of directors consists of three people, including one
permanent director and two nonpermanent directors.

b) 1.2. Outside directors


N/A

c) 1.3. Relevant issues concerning the operation of board of directors


(a) main content
composition of board of directors
Board of directors consists of all directors. The president is its chairman.
To convene a meeting
The meeting is held under the request of representative director or at least two directors. All directors and
supervisors need to be informed one day before the meeting.
decision process
-The proposal will be passed with more than half attendance when more than half of attended directors
approve . When the number of approvals equals disapprovals, the final decision right will leave to chairman.
-Directors must attend the meeting personally. The forms of simultaneous audio and video participation are
allowed.
-Attendant who has special interest involved in the proposal is not allowed to vote.
Meeting records
Records should contain issues discussed in the meeting and be filed after attended directors and supervisors
signed and sealed.

(b) Meeting details

Year

Date

Content

Whether approved

Notes

2111 2011.02.2
5

()

. 2010 , ,
. 70

2011.03.2
9

2011.03.3
1

. 2010 , , .

11

. (75 ,1 )

1
2011.06.2

(),

2011.03.3

. ( 7-50 13-3)

2011.07.2
2
2011.09.1
9

. (, 220 )_
62,000
. (, 12.2 )
.
. 70
. (, 83 )

2011.09.2
2
2011.09.2
9
2011.09.3
0
2011.11.2
9
2011.12.2
6
2010 2010.01.2

. ()

( : ORIX CORPORATION )

2010.03.1 10
9

2010.03.3
1
2010.06.2
9

. 2009 , ,
. 2009 , ,
. _75 ,1
. ( 3 )

. 70

2010.10.0
6
2010.11.2
9
2010.12.2
9

()
( )

2011

2011.02.25

Submitting the proposal of approving general


stakeholders meeting

2011.03.29
2011.03.31 Voting on the proposal of relevant issues
concerning the modification of Celtrion Holdings
2011.03.31
loans
th
2011.06.27 11 general stakeholders

2011.07.22

meeting
appointment of representative

2011.09.19 director
2011.09.22
2011.09.29

rediscussion of loan modification issues


Headquater address change issues
To hold extraordinary general
meeting

2011.09.30

Approved Shinhan Capital 7 billion joint gurantee


agreement
Passed 2010 financial report , regulation
modification, appointment of directors and
supervisors and payment limits
Approved the appointment of representative director
Agreed the extension of WooriBanks
loan(7.5billion, 1 year)
Headquater address change(InchonYeonsu district,
pine island hole7-50InchonYeonsu district, pine
island hole13-3)
Agree to hold extraordianary general meeting for
regulation changes

external loan payment related


issues

2011.11.29 external loan payment related


2011.12.26

Passed the 2010 closing report, appointed directors


and supervisors and relevant payment limits

issues
regulation change related issues
Rediscussion of lending issues
External loans payment

Approve external loans (Seo Jung-Jin, 22billion)Collateral Celltrion Healthcare 62,000 stocks
Approve external loan(Celltrion Healthcare,
1.22billion)

Agree on the regulation change


Shinhan Capital7 billion
Agree on external loan(Park hyeong-jun, 8.3billion)

2010

2010.01.25 gurantee offering issues


2010.03.19 submitting the proposal approval on holding
General stakeholders meeting
2010.03.31
10th annual general stakeholders meeting
2010.06.29
2010.10.06

issues related to short-term loan


extension

issues related to foreign exchange


2010.11.29 trade agreement
2010.12.29 Approve on operating capital loan
Issues related to the change of joint guarantee
creditor after Celltrion Healthcare spinoff

(c) Meeting details of outside directors

. In the block deal between Bank and Celltrion,


the latter provided its stocks as gurantees
passed 2009 final report and payment limit of
directors and supervisors
Passed 2009 financial report and payment limit of
directors and supervisors
Woori Bank loan extended (7.5billion, 1year)

Set up National Agricultural Cooperative Federation


NACFimport L/C (USD 3MN)

Shinhan Capital 7billion


Proposal of joint guarantee creditor change

() ( )
()
( )

2.
.
() () ,
,
1 .
() ()
1) ,
.
2) ,
.
3) .
() ()

2004.1-2004.12 ()
2005.1-2005.12 () IT

. ()

2011

2011.02.25
2011.03.31

(d) composition of internal committee


N/A
(e) internal committee meeting details
N/A
2. Supervision system

a) Relevant issues concerning supervision system


(a) The setting of supervision system, the ways of organization and others
No supervision committee has been specially set till the submitting of annual report so far. A supervisor is
selected to perform supervision duties to companys accounting and business.
(b) The internal mechanism for the committee to acquire operating information needed for supervision
1) The supervisor supervises directors dutiful behaviors and having the right to ask directors for
business report and to check on companys business
2) The supervisor should precheck the proposals submitted to the general stockholders meeting and state on
the meeting whether there is any procedures or issues against regulations
3) The supervisor should record his supervision work and sign and seal

(c) Personal information of the committee(supervisor)

Name

Major experience

Hwang Sokyong

Notes

2004.1-2004.12 Representative director of Global Education Cultural Exchange


Co.
2005.1-2005.12
Director of Gangbuk computer education for the professional school of IT

b) Meeting details of the committee (supervisor)


Year
2011

Date
2011.02.25
2011.03.31

Content
submit the proposal of agree to convene general
stockholders meeting

Whether
Approved
Yes

Notes
-

appointment of representative director


Yes

3.
.
( )
.
( )
.
( )

4.

( : 2011 12 31 )

( : , , %)

()

()

2002

50 10,68

9.21 357,91

-208 2,50

2010

10,00 2,000

9.90 10,000

02

10,380 10,476

8.99 380,269 1,407,313

167,809

9.90

92 1,248,286

-54,619

- 380,361 2,655,599

113,190

26

12

29

2,000

12,68 19.11 367,91


4

-208 2500

10,380 12,476

3. Relevant issues concerning exercising voting rights of shareholders


a) The application of cumulative Voting System
(N/A)
b) The application of written or electronic voting system
c) The exercise of Minority stokeholders right

4. Status of subsidiaries
Funding status of other legal person

(Base date: Dec 31st, 2011)

(Unit: KRW MN, %)


Beginning balance

Name

Funding
Funding Fudning
date
purpose amount
Amount

Celltrion 2002.2.
26

share
investm
ent

50

10,68

Equity
ratio

Book
value

9.21

357,
91

Increase(decrease)
Overweight
(underweight)

2010.12 share
investm
.29
ent

2,50

Equity
ratio

Amount

Book
value

Last years financial


status

Total assets

Current
term of
profit and
loss

10,380

10,476

8.99

380,269 1,407,313 167,809

4
Tomato
bank

Monetary
amount

Amount

-208

Valuation

Ending balance

6
10,00

2,000

9.90

10,0
00

2,000

9.90

92

1,248,286 -54,619

12,68
4

19.11

367,
916

-208

2500

10,380

12,476

380,361 2,655,599 113,190

Total

VII.

( :

2011 12 31

( :
, %)
()

1,125,489

64.97

1,160,327

66.98

425,477

24.56

425,477

24.56

1,550,966

89.53

1,585,804

91.54


( :

2011 12 31

( :
, %)

2011 12 30

1,160,327

66.98


( :

2011 12 31

( :
)

5%

1,160,327

66.98

109,703

6.33

( :

2011 12 31

( :
)

dart.fss.or.kr

16

55.17

146576

8.46

Page 70

VII Issues concerning shareholders


Status of major shareholders and relatives
(Base date: Dec 31st 2011)

(Unit: Share, %)
Number of shares

Name

Relation

Beginning

Type of stock

Amount
Seo Jung-Jin

Oneself

individuals

Affliate

Total

End of period

Equity ratio

Amount

Notes

Equity ratio

Common stock

1,125,489

64.97

1,160,327

66.98

Common stock

425,477

24.56

425,477

24.56

Common stock

1,550,966

89.53

1,585,804

91.54

Preferred stock

Others

Details of majority stockholders change


(Base date: Dec 31st 2011)

(Unit: Share, %)

Changing date

Major stockholder

Amount of
stockholding

Equity ratio

Notes

1,160,327

66.98

2011.12.30
Seo Jung-Jin

Status of shareholding
(Base date: Dec 31st 2011)

(Unit: Share, %)

Categories

Stockholder

Stockholding amount

Equity ratio

1,160,327

66.98

109,703

6.33

Shareholders with
Seo Jung-Jin
more than 5% share
Hong In-pyo
Conference of Share Holding Employees

Notes

Status of minority stockholders


(Base date: Dec 31st 2011)

(Unit: Share, %)
Stockholder

Category
Minority stockholder

dart.fss.or.kr

Amount of
stockholding
16

Amount ot stockholding

Equity ratio
55.17

Amount of
stockholding
146576

Notes
Equity ratio
8.46

Page 71

VIII.
1.

( :

2011 12 31 )

( :
)

1941

09

1962

11

1970

04

-() -

- 2008.3.31~

27,164

('98~'99)

-()

-() ('00~'03)

-()


( :

2011 12 31

( :
)

13

15

0.69

319,795

2,244

0.72

222,209

2,428

22

24

0.70

542,004

4,672

2.
1.
( : )

dart.fss.or.kr

2,000

2,000

Page 72

VIIIExecutives and staff


1.

Status of executives and staff

Status of executives
(Base date: Dec 31st 2011)
Name

Date of
birth

Position

(Unit: share)
Whether
registered

Full time

Duty

Major
experience

Amount of stockholding
Common
stock

Gimtaegu

1941.09

Yibyeongryu 1962.11
l

Representativ Registered
e director
executive

Full time

Registered
executive

Part time

Registered
executive

Part time

Jeon yil bu
1970.04

All

Representativ e director of
Daewoo
Motor
Company
('98~'99)

Director of
Neksol
Finance

Director EM
M
Investments
Ltd CEO

Time on
the job

End of term

Preferred
stock
-

2008.3.31~
-

27,164

Status of staffs
(Base date: Dec 31st 2011)

(Unit: KRW 000)

Division of
Gender Regular
business
staffs

Number of staffs

Average
working
years
Other Total

contracted
workers

Total annual
payment

Average salary
Note
per capita

Male

13

15

0.69

319,795

2,244

Female

0.72

222,209

2,428

22

24

0.70

542,004

4,672

Total

2. Remuneration of executives
1. Approval amount of shareholders general meeting
(Unit: KRW MN)
Catalogue

dart.fss.or.kr

Number of
people

Approved amount

Note

Director

2,000 -

Auditor

2,000 -

Page 73

2.
( : )


( :

2011 12 31 )

( : , )

( )

dart.fss.or.kr

Page 74

2. Payments
(Unit: KRW MN)
Number
Total payments
of people

catalogue

payment per
capita

Total fair value of stock


options

Note

Executive director

Non-executive directors

Audit committee or aduit

Total

Status of granting and exercising stock option


(Based day: 31st Dec 2011)
Recipient Relationship
-

(Unit: KRW/share)

Date of
Grant

Quantity changes
Types of
Number of
stocks Grant Exercise cancel unexercised

method
of grant
-

Exercising
period
-

Exercising
price
-

(No related matter)

dart.fss.or.kr

Page 75

IX.
.
.

2011

2010

()

()

()

()

()

()

()

()

()

()

()(*1)

()(*1)

CELLTRION DON

CELLTRION DON

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


690,620

30,587,795

2,052,681

31,278,415

2,052,681

()


158,131

20,823,746

183,662

20,981,877

183,662

dart.fss.or.kr

Page 76

IX Transactions with stackholders

Related party and related party transactions in current quarter and last quarter.
a) Related party
Catalogue

2011

2010

General manager

Seo Jung-Jin

Seo Jung-Jin

Other related
party

Celltrion Holdings
Celltrion Healthcare
Celltrion
Celltrion Pharm
Celltrion Chemical Laboratory
(*1) Celltrion venture capital
CELLTRION DON
Sharehold executive employees

Celltrion Holdings
Celltrion Healthcare
Celltrion
Celltrion Pharm
Celltrion Chemical Laboratory
Celltrion venture capital
CELLTRION DON
Sharehold executive employees

(*1) Celltrion venture capital Co., Lted has merged with Celltrion Holding in current quarter.

b) Main transactions with related parties. (Unit: KRW 000)


(Current quarter)
Catalogue

Sell

General manager

buy
690,620

Other related parties

30,587,795

2,052,681

total

31,278,415

2,052,681

(Last quarter)
Catalogue
General manager

Sell

Buy
158,131

Other related parties

20,823,746

183,662

Total

20,981,877

183,662

dart.fss.or.kr

Page 77

. (:)
()

25,436,986

254,370

9,185,134

91,852

13,967,318

34,622,120

346,222

13,967,318

()

2,045,021

20,450

22,769,818

227,698

14,456,083

24,814,839

248,148

14,456,083

. (:)
()

(%)

(*1)

8.50%

24,833,000

8.50%

7,736,293

17.00%

10,382,301

(*1) () 13,990 .
()

(%)

8.50%

2,045,021

8.50%

19,680,503

17.00%

8,329,621

dart.fss.or.kr

Page 78

c) The main bond and debt in related transactions. (unit: KRW 000)
(Current quarter)
Bond
Company
General manager

Amount

Allowance for bad debt

Amount

25,436,986

254,370

9,185,134

91,852

13,967,318

34,622,120

346,222

13,967,318

Other related parties


Total

Debt

(Last quarter)
Bond
Company

Amount

General manager

Debt

Allowance for bad debt

Amount

2,045,021

20,450

Other related parties

22,769,818

227,698

14,456,083

Total

24,814,839

248,148

14,456,083

d) Credits and debts on financial loan with special related party (unit: KRW 000)
(Current quarter)
Catalogue

Holder

Interest rate

Amount

Bond

Short-term
investment asset

General manager(*1)

8.50%

24,833,000

Other related parties

8.50%

7,736,293

Debt

Convertible bonds

Other related parties

17.00%

10,382,301

(*1) celltrion healthcare has provided 13,990 shares as collateral against the long-term loan.
(Last quarter)
Catalogue
Bond

Short-term
investment asst

Debt

Convertible
bonds

dart.fss.or.kr

Holder

Interest rate

Amount

General manager

8.50%

2,045,021

Other related parties

8.50%

19,680,503

Other related parties

17.00%

8,329,621

Page 79

X.

( )
( : )

( : )

()

()

( )

( :

2011 12 31

( : )

( )

( :

2011 12 31

( )

( )

( : )

Necessary Measures to Protect Other Investors.

Status of bills and checks for mortgage or collateral


(No related matter)

(Based date :)

(Unit: KRW)

Issued party

Buy

Amount

Note

Bank
Financial insititutions (bank
exclusive)
Corporation
Other (individual)
Status of un-refunded margin of short term trading
Relationship between
margin acquirer and
company

notified occurrence time of


Short term trading margin

Notified price of Short


term trading margin

period of exclusion

( No related matter)
Details of IPO funds usage
(Based date:

31st Nov 2011)

Catalogue

Payment date

Actual received
amount

funds usage plan


declared

Actual funding
usage

(Unit: KRW)
Reason of
difference
-

(No related matter)

Details of private funds usage


(Based date:
Catalogue

31st Nov 2011)


Payment date

(No related matter)


Status of foreign holding subsidiaries
(No related matter)

(Unit: KRW)
Actual received
Funds usage plan
amount
-

Actual funding
usage

Reason of
difference

( : 2011.12.31)

( : )

...

(
(

dart.fss.or.kr

Page 76

(Based date:

31st Nov 2011)

Catalogue

A holding
company

(Unit: KRW)

B
C
Dcorporation
corporation corporation

Adjustment/co Amount after


mbination
combination

...

sales
Internal sales

(
(

Net sales

operation profit
and loss

Income from
continuing
operation

Profit or loss in
current quarter

Total debts

Owned capital

Capital

Total assets

auditors

Audit opinion

note

dart.fss.or.kr

Page 77

XI.

dart.fss.or.kr

Page 78

XI Financial statement
-No related matter as non-listing corporate

dart.fss.or.kr

Page 79

XII.
-

dart.fss.or.kr

Page 80

XII Appendix
-No related matter as non-listing corporate

dart.fss.or.kr

Page 81


1.
( )

2.
( )

dart.fss.or.kr

Page 82

Confirmation of Experts
1. Confirmation of experts
(Not applicable)

2. Interest of experts
(Not applicable)

dart.fss.or.kr

Page 83