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Contents
Audit Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Report of Independent Auditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Financial Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Statement of Profit or Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Statement of Changes in Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Statement of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Notes to Financial Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Opinions on the Internal Accounting Management System Audit . . . . . . . . . . . . . . . . . . . . . . . . . . 71

Celltrion Healthcare Co., Ltd.

Financial Statement

12
2011 01 01
2011 12 31

11
2010 01 01
2010 12 31

Audit Report

The 12th period


From 1 January 2011 to 31 December 2011

The 11th period


From 1 January 2010 to 31 December 2010

Sam Young Accountancy Firm

2012 03 02

2011 12 31 2010 12
31 ,
.

.
.

.
.

.
.
2011 12 31
2010 12 31
.

Report of Independent Auditors

Celltrion Healthcare Co., Ltd.


To the Board of Directors and Shareholders

March 2nd 2012

We have audited the accompanying statements of the financial position of Celltrion Healthcare Co., Ltd. as of
December 31,2011 and 2010, and the related statements of income, comprehensive income, changes in equity and
cash flows for the relevant years, expressed in KRW.These financial statements are the responsibility of the groups
management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the Republic of Korea. Those
standards require that we plan and perform the audit to obtain reasonable assurances about whether the
financial statements are free of material misstatements. An audit includes examining, on an empirical basis,
evidence supporting the figures and disclosures enumerated in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by the companys management, as well as
evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for
our opinion.
In our opinion, the financial statement, referred to above, fairly presents, in all material respects, the financial
position of Celltrion Healthcare Co., Ltd. as of 31 December 2011 and 2010, and its financial performance and cash
flows for the years ends, in accordance with the International Financial Reporting Standards, as adopted by the
Republic of Korea (Korean-IFRS)

111-13, 2
6

(2012 03 02 ) .


.

Gangnam-gu, Seoul 111-13 Nonhyun, Nobel sixth floor Building 2


Sam Young
Accounting Legal Person
Representative Director
Kim Duck

This report is effective as of 2 March 2012, the audit report date. Certain subsequent events or circumstances, which
may occur between the audit report date and the time of reading this report, could have a material impact on the
accompanying financial statements and notes covered in the report. Accordingly, the readers of the audit report
should understand that there is a possibility that the enclosed audit report may have to be revised to reflect the
impact of such subsequent events or circumstances, if they occur.

Financial Statement


12 2011 12 31
11 2010 12 31
( : )

12()

11()

476,962,083,658

199,826,314,012

(1)

73,922,083,658

54,626,314,012

1. ( 10)

1,015,787,392

13,613,385,713

2. ( 3)

11,000,000,000

(110,000,000)

3. ( 10)

68,321,030,000

26,490,814,000

(683,210,300)

(739,089,900)

45,280,754

1,137,992,703

(11,061,357)

5.

81,907,302

508,363,961

3,456,348

4.

6.
7.
8.

1,830,501,370

9. ( 15)

2,367,084,150

648,294,536

10. ( 15)

2,344,291,353

683,569,645

(2)
1.

403,040,000,000
403,040,000,000

.
(1)

145,200,000,000
145,200,000,000

25,141,035,620

48,007,603,988

83,277,741

2,000,000

1. ( 4 10)

63,957,488

2,000,000

2. ( 5)

19,320,253

(2) ( 6)

666,529,942

130,189,300

(3) ( 7)

7,877,000

10,612,333

24,383,350,937

47,864,802,355

(4)
1. ( 10)

2.
3.
4. ( 15)

24,219,300,000

47,418,176,000

(242,193,000)

180,272,544

28,020,544

4,170,033

221,801,360

418,605,811
502,103,119,278

247,833,918,000

Statement of Financial Position

The 12th period


The 11th period

31 December 2011
31 December 2010

Celltrion Healthcare Co., Ltd.


Subject

(Unit:KRW)
The 12th period (Present)

The 11th period (Previous)

Assets
I. Current assets

476,962,083,658

(1) Quick assets

199,826,314,012

73,922,083,658

1.Cash and cash equivalents (Note 10)

1,015,787,392

2.Short term investment assets ( Note 3)


Allowance for bad debts

54,626,314,012
13,613,385,713
11,000,000,000

(110,000,000)

68,321,030,000

26,490,814,000

(683,210,300)

(739,089,900)

45,280,754

1,137,992,703

Allowance for bad debts

(11,061,357)

5. Accrued revenue

81,907,302

508,363,961

3,456,348

1,830,501,370

9. Current tax assets (Note 15)

2,367,084,150

648,294,536

10. Liquidity deferred tax assets (Note 15)

2,344,291,353

683,569,645

3.Trade receivables (Note 10)


Allowance for bad debts
4.Account receivables

6. Advance payments
7. Prepaid expenses
8. Value-added taxes

(2) Inventory assets


1. Commodities

403,040,000,000
403,040,000,000

145,200,000,000
145,200,000,000

. Non-current assets

25,141,035,620

48,007,603,988

(1) Investment assets

83,277,741

2,000,000

1. Long-term investment assets (Note 4 to10)

63,957,488

2,000,000

2. Available for sale assets (Note 5)

19,320,253

(2) Tangible assets (Note 6)


(3) Intangible assets (Note 7)
(4) Other non-current assets
1. Long- term trade receivables (Note 10)

666,529,942

130,189,300

7,877,000

10,612,333

24,383,350,937

47,864,802,355

24,219,300,000

47,418,176,000

Allowance for bad debts

(242,193,000)

2. Cash deposit for lease

180,272,544

28,020,544

4,170,033

221,801,360

418,605,811

3. Long-term accrued revenue


4. Non-current deferred tax assets (Note 15)
Total assets

502,103,119,278

247,833,918,000

226,087,252,015

.
1. ( 19)

100,261,710,996

159,500,000,000

80,960,000,000

2. ( 10 19)

1,486,052,434

1,870,435,761

3.

1,669,855,889

2,132,892,313

62,900,000,000

15,252,202,711

531,343,692

46,180,211

4. ( 8,11 19)
5.

262,128,624,636

.
1. ( 11)
2. ( 19)

191,068,624,636

97,433,647,090

71,060,000,000

46,200,000,000

3. ( 9)

144,463,087,982

829,440,892
488,215,876,651

244,724,798,978

1,841,815,000

1,657,630,000

. ( 12)
1.

1,500,000,000

1,500,000,000

2.

341,815,000

157,630,000

. ( 12)
1.

36,623,117,416
36,623,117,416

19,809,451,795
19,809,451,795

(59,368,782,893)

.
1. ( 12)

(59,368,782,893)

(59,368,782,893)
34,791,093,104

.
1. ( 12)

(59,368,782,893)

34,791,093,104

41,010,820,120
41,010,820,120

13,887,242,627

3,109,119,022

502,103,119,278

247,833,918,000

Liabilities
226,087,252,015

. Current liabilities
1. Trade payable (Note19)

100,261,710,996

159,500,000,000

80,960,000,000

2. Accounts payable (Note 10 and 19)

1,486,052,434

1,870,435,761

3. Accrued expenses

1,669,855,889

2,132,892,313

62,900,000,000

15,252,202,711

531,343,692

46,180,211

4. Short term loans (Note8, 11 and 19)


5. Deposits
. Non-current liabilities

262,128,624,636

1. Long term advances received (Note 11)


2. Long term trade payables (Note19)
3. Retirement benefits (Note 9)

144,463,087,982

191,068,624,636

97,433,647,090

71,060,000,000

46,200,000,000

829,440,892

Total liabilities

488,215,876,651

244,724,798,978

1,841,815,000

1,657,630,000

Capital
. Capital stock (Note 12)
1. Ordinary share capital
2. Preference share capital

1,500,000,000

1,500,000,000

341,815,000

157,630,000
36,623,117,416

. Capital surplus (Note 12)


1. Share premiums

36,623,117,416

. Capital adjustments

19,809,451,795
19,809,451,795

(59,368,782,893)

1. Impairment losses (Note 12)

(59,368,782,893)

(59,368,782,893)
(59,368,782,893)

34,791,093,104

. Retained earnings
1. Unrealized retained earningsNote12)

34,791,093,104

41,010,820,120
41,010,820,120

Total capital

13,887,242,627

3,109,119,022

Total liabilities and equity

502,103,119,278

247,833,918,000

The accompanying notes are an integral part of this financial statement.


12 2011 1 1 2011 12 31
11 2010 1 1 2010 12 31
( : )

12()

11()

31,600,000,000

97,287,270,000

. ( 13)

26,400,000,000

66,000,000,000

5,200,000,000

31,287,270,000

. ( 14)

11,941,264,625

8,995,795,467

. ()

(6,741,264,625)

22,291,474,533

1,849,076,659

50,515,045,692

.
1.

513,135,067

1,186,053,559

2.

30,823,676,871

3.

18,108,161,327

4.

469,167,512

349,947,814

5. ( 10)

721,460,480

47,120,000

6.

121,061,357

24,252,243

86,121

7.

2,791,456,307

.
1.
2.

1,938,792,104

8,127,666,685
5,558,459,285

38,731,360

24,403,288

1,275,347

823,356,275

966,850,049

3,918,521

1,099,164,026

6.

461,773,967

7.

500,000

8.

986,119

912,651

3.
4.
5. ( 10)

. ()

(7,683,644,273)

64,678,853,540

. ( 15)

(1,463,917,257)

10,042,784,665

. ()

(6,219,727,016)

54,636,068,875

Statement of Profit or Loss


The 12th period
The 11th period

From 1 January 2011 to 31 December 2011


From 1 January 2010 to 31 December 2010

Celltrion Healthcare Co. Ltd.


Subject

(Unit:KRW)
The 12th period (Present)

The 11th period (Previous)

. Revenue

31,600,000,000

97,287,270,000

. Cost of sales (Note13)

26,400,000,000

66,000,000,000

5,200,000,000

31,287,270,000

. Sales and adm inistrative expenses (Notes 14)

11,941,264,625

8,995,795,467

. Operating profits (losses)

(6,741,264,625)

22,291,474,533

1,849,076,659

50,515,045,692

. Total sales revenue

. Non-operating income
1. Financial income

513,135,067

1,186,053,559

2.Gains on disposal of equity method investment

30,823,676,871

3. Gains on equity method

18,108,161,327

4. Foreign currency exchange

469,167,512

349,947,814

5.Gains on foreign currency exchange (Note10)

721,460,480

47,120,000

6.Reversal of allowance for bad debts

121,061,357

24,252,243

86,121

7. Other comprehensive income


. Non-business expenditures
1. Interest expenses

2,791,456,307

8,127,666,685

1,938,792,104

5,558,459,285

38,731,360

24,403,288

1,275,347

823,356,275

966,850,049

3,918,521

1,099,164,026

6.Other allowance for bad debts

461,773,967

7. Donation

500,000

986,119

912,651

2. Commission expenses
3.Loss on disposal of tangible assets
4. Foreign currency exchanges
5.Foreign currency exchange losses (Note10)

8. Other comprehensive losses


. Net profit (loss) of corporate tax expenses

(7,683,644,273)

64,678,853,540

. Corporate tax expenses

(1,463,917,257)

10,042,784,665

. Net incom e (loss)

(6,219,727,016)

54,636,068,875

The accompanying notes are integral part of this financial statement.


12 2011 1 1 2011 12 31
11 2010 1 1 2010 12 31
( : )

2010.01.01 ()


3,315,265,000

19,809,451,795

(5,403,051,700) (13,625,248,755)

4,096,416,340

21,449,429,914

21,449,429,914

4,983,888,084

4,983,888,084

(1,657,635,000)

54,636,068,875

- (59,368,782,893) (21,030,266,298)

54,636,068,875

- (82,056,684,191)

2010.12.31 ()

1,657,630,000

19,809,451,795

(59,368,782,893)

41,010,820,120

3,109,119,022

2011.01.01 ()

1,657,630,000

19,809,451,795

(59,368,782,893)

41,010,820,120

3,109,119,022

184,185,000

16,813,665,621

2011.12.31 ()

1,841,815,000

36,623,117,416

(6,219,727,016)

(6,219,727,016)

34,791,093,104

13,887,242,627

(59,368,782,893)

16,997,850,621

Statement of Changes in Equity


The 12th period
The 11th period

From 1 January 2011 to 31 December 2011


From 1 January 2010 to 31 December 2010

Celltrion Healthcare Co., Ltd.


Accounting Subject

Capital Stock

(Unit:KRW)
Capital Surplus

Other Accumulated
Comprehensive Income

Capital Adjustment

Retained Earnings

Total

1 Jan 2010 (report


amount)

3,315,265,000

19,809,451,795

(5,403,051,700)

(13,625,248,755)

4,096,416,340

Current net profits

54,636,068,875

54,636,068,875

Changes in equity

21,449,429,914

21,449,429,914

Negative changes of
equity capital

4,983,888,084

4,983,888,084

(1,657,635,000)

(59,368,782,893)

(21,030,266,298)

(82,056,684,191)

31 Dec 2010 (end of the


previous period)

1,657,630,000

19,809,451,795

(59,368,782,893)

41,010,820,120

3,109,119,022

1 Jan 2011 (report


amount)

1,657,630,000

19,809,451,795

(59,368,782,893)

41,010,820,120

3,109,119,022

184,185,000

16,813,665,621

16,997,850,621

(6,219,727,016)

(6,219,727,016)

1,841,815,000

36,623,117,416

(59,368,782,893)

34,791,093,104

13,887,242,627

Stock splits

Paid capital increases


Current net loss
31 Dec 2011 (end of the
period)

The accompanying notes are an integral part of this financial statement.

12 2011 1 1 2011 12 31
11 2010 1 1 2010 12 31
( : )

12()
(87,382,561,871

.
1. ()

11()
(6,731,771,247

(6,219,727,016)

54,636,068,875

603,570,734

2,072,572,762

62,506,882

31,877,510

2,735,333

3,190,333

186,313,400

739,089,900

323,701,424

835,365,705

2.
.
.

3,910,407
-

.
.
3.

461,773,967

24,403,288

1,275,347

(842,521,822)

(48,931,838,198)

30,823,676,871

18,108,161,327

721,460,465

121,061,357

4.

(80,923,883,767)

(17,909,900,000)

(26,490,814,000)

1,092,711,949

(1,135,488,363)

81,907,302

863,953,632

(508,363,961)

163,867

(3,456,348)

38,731,360

1,830,501,370

(1,814,091,149)

(1,718,789,614)

(628,849,856)

(1,660,721,708)

(683,569,645)

196,804,451
(257,840,000,000)

(418,605,811)

. ()
.
. ()
. ()
. ()

. ()
.
.

(4,170,033)

(14,508,574,686)

(118,800,000,000)
-

Statement of Cash Flows


The 12th period

From 1 January 2011 to 31 December 2011

The 11th period

From 1 January 2010 to 31 December 2010

Celltrion Healthcare Co., Ltd.


Subject

(Unit:KRW)
The 12th period (Present)

. Cash flows from operating activities


1. Net profits (losses)
2. Expenses occurred without cash flows

The 11th period (Previous)


(6,731,771,247
)

(87,382,561,871)
(6,219,727,016)

54,636,068,875

603,570,734

2,072,572,762

62,506,882

31,877,510

2,735,333

3,190,333

(a).

Depreciation

(b).

Intangible assets depreciation

(c).

Allowance for bad debts

186,313,400

739,089,900

(d).

Retirement benefits

323,701,424

835,365,705

(e).

Foreign currency exchange losses

3,910,407

(f).

Other loan losses paid

461,773,967

(g).

Losses from disposal of tangible assets

24,403,288

1,275,347

(842,521,822)

(48,931,838,198)

3. Earnings reduction without cash flows


(a).

Gains on disposal of investment shares based on the


equity method

(b).

Profit based on the equity method

(c).

Gains on foreign currency exchange

721,460,465

(d).

Reversal of allowance for bad debts

121,061,357

30,823,676,871
18,108,161,327
-

4. Changes of capital and liability from operating activities

(80,923,883,767)

(14,508,574,686)

(a).

Proceeds from the disposal of shares

(17,909,900,000)

(26,490,814,000)

(b).

Decreases (increases) in trade receivables

1,092,711,949

(1,135,488,363)

(c).

Decreases of accrued income

81,907,302

863,953,632

(d).

Decreases (increases) in advances

(508,363,961)

163,867

(e).

Decreases (increases) in advances expenses

(3,456,348)

38,731,360

(f).

Decreases (increases) in value-added tax on capital

1,830,501,370

(1,814,091,149)

(g).

Increase in corporate tax assets

(1,718,789,614)

(628,849,856)

(h).

Increase in current deferred corporate tax assets

(1,660,721,708)

(683,569,645)

(i).

Decrease (increase) in non-current deferred corporate tax


assets

196,804,451

(418,605,811)

(j).

Increases in inventory assets

(257,840,000,000)

(118,800,000,000)

(k).

Increases in long-term accrued revenues

(4,170,033)

(47,418,176,000)

.
45,540,000,000

54,560,000,000
-

389,730,391

. ()

(384,369,462)

1,286,482,320

. ()

(463,036,424)

1,390,162,795

485,163,481

26,229,251

93,634,977,546

72,433,647,090

57,860,000,000

46,200,000,000

.
.

5,697,844,245

(1,153,142,316)

(5,924,813)
10,139,315,640

7,413,028,489

1.

30,208,657,090

32,196,789,538

30,200,000,000

19,694,258,174
-

12,499,995,000

909,090

536,364

7,748,000

2,000,000

.
.
.
2.

(20,069,341,450

(24,783,761,049

19,200,000,000

65,861,295

19,320,253

3,316,632

624,159,902

96,911,118

5,540,000

160,000,000

22,272,544

24,655,720,755

64,645,647,910

.
1.

112,785,169,150

12,719,565,831
63,168,430,639

16,997,850,621

95,787,318,529

2.

(48,139,521,240

(50,448,864,808

.
.
. ()(++)

63,168,430,639

48,139,521,240

50,177,894,945
-

270,969,863
(12,597,598,321

13,400,823,073

)
.

13,613,385,713

212,562,640

1,015,787,392

13,613,385,713

(l).

Increases in long-term bond sales

(47,418,176,000)

(n).

Increases in advanced payments

389,730,391

(o).

Increases (decreases) in trade payables

(384,369,462)

1,286,482,320

(p).

Increases (decreases) in accrued liabilities

(463,036,424)

1,390,162,795

(q).

Increases in advance payments

485,163,481

26,229,251

(r).

Increases in long term deposits received

93,634,977,546

72,433,647,090

(s).

Increases in long term trade receivables

57,860,000,000

46,200,000,000

(t).

Increases in non-currency deferred corporate tax


liabilities

5,697,844,245

(u).

Payments of gratuity

(1,153,142,316)

(5,924,813)

. Cash flows from investing activities

10,139,315,640

7,413,028,489

1. Cash inflows from investing activities

30,208,657,090

32,196,789,538

(a).

Decreases in short-term investment assets

30,200,000,000

19,694,258,174

(b).

Disposal of investment shares based on the equity method

12,499,995,000

(c).

Disposal of tangible assets

909,090

536,364

(d).

Decrease of cash deposits

7,748,000

2,000,000

(20,069,341,450)

(24,783,761,049)

19,200,000,000

24,655,720,755

2. Cash out flows from investment activities


(a).

Increases in short-term investment assets

(b).

Increases in long-term investment assets

65,861,295

(c).

Increases in available for sale financial assets

19,320,253

3,316,632

(d).

Acquisition of tangible assets

624,159,902

96,911,118

(e).

Acquisition of intangible assets

5,540,000

(f).

Increases in cash deposits

160,000,000

22,272,544

. Cash flows from financing activities


1. Cash inflows from financing activities

64,645,647,910

12,719,565,831

112,785,169,150

63,168,430,639

(a).

Increases in paid-in capital

16,997,850,621

(b).

Increases in short term loans

95,787,318,529

63,168,430,639

(48,139,521,240)

(50,448,864,808)

48,139,521,240

50,177,894,945

2. Cash outflows from financing activities


(a).

Short term borrowing

(b).

Decreases in short-term loans of shareholders and


employees

270,969,863

. Increases (decreases) in cash

(12,597,598,321)

13,400,823,073

. Cash at the beginning balance

13,613,385,713

212,562,640

1,015,787,392

13,613,385,713

. Cash at the ending balance

The accompanying notes are an integral part of this financial statement.


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

1. :
( "") 1999 12 29 ,
,
.
2010 11 25
.
2. :
2011 1 1
.
' ' 2.4 2.89

.
.

. .
,
, ,
.
.

Notes to Financial Statement


The 12th period
The 11th period

31 December 2011
31 December 2010

Celltrion Healthcare Co., Ltd


1. Company Profile:
Celltrion Healthcare Co., Ltd. was established on December29th 1999. Its main business scope is
manufacturing, processing and selling medical supplies. The company is located in Inchon City, South Korea.

On November 25th, 2010, the company divided its investment department into a new legal entity, Celltrion
Holdings.

2. Significant accounting policies


The principal accounting policies were applied to the present accounting period on January 1st 2011. Therefore,
the statement of profits or losses which have been written according to the previous Enterprise Accounting
Standards is disclosed in paragraph 2.4 and paragraph 2.89, as well as its notes on the general enterprise
accounting principle. Beyond that, the accounting policies have no effect on the operating results, financial
conditions and notices.
The content of the significant accounting policies applied in the financial statements is as follows:
Significant accounting policies

A. Revenue recognition criteria


The Company use fair value to forecast the revenue generated from the sale of goods, rendering of services,
and use of the assets. When forecast the revenue, the value-added taxes, sale allowance, rebates and
discounts was subtracted. The Company recognizes revenue when the amount of revenue can be reliably
measured and it is probable that future economic benefits will flow to the entity.

.

( ) 3
.
.
, ,

.
d

.
,

.
, .
,
.
.

,

,
.
,
.

B. Cash and cash equivalents


For the securities and short term financial products held by the entity without large transaction costs, which
are easy to convert to cash and have a relatively stable value under the change of interest rate,if the
contract period (repayment period) is less than three months, were recognized as cash and cash
equivalents.
C. Allowance for bad debts
The Company separately analyzed the recovery possibility of the balance of the bonds, loans and trade
receivables before the report termination date, and set the loan loss measurement as reserves for bad debt
according to previous experience with loan loss prediction.

D. Inventory
The entity used FIFO to assess the inventory by acquisition cost. The inventory amount and sum of money
were calculated using the continuing record method at the year end.
Inventoried are measured at the lower of cost and net realizable value. In addition, we reverse the
impairment within the limits of initial book value when the market value of impaired inventories exceeds
the carrying amount.

E. Securities
Due to frequent buying and selling, the securities bought by the Company for short-term profit should be
called as trading financial assets. Securities with definite repayment date are called held-to-maturity
investment. Whether trading financial assets or held-to-maturity investment, they are categorized as
securities.
The acquisition cost of securities should be mainly based on market price, which includes the additional
expenses of acquisition, while the acquisition cost of short-term trading financial assets should be mainly
based on the fair value.


,
.
.
. ,

.
,
()

.
()

,
.
.


(, , ) .
,
, .
,
.

In terms of held-to-maturity investments, the difference between acquisition cost and face value on the
maturity date should be depreciated under real interest method after repayments, and added the sum of
procurement costs and interest income. The cost with depreciation should be ultimately added into the sum
of statements of financial positions.
Trading financial assets and available-for-sale assets should be evaluated by fair value. The market value of
securities with market features should refer to the fair value, while the market value should refer to the final
price on the ending date of the report.
However, for available-for-sale financial assets, when the fair value of stocks cannot be precisely measured,
it should be evaluated by the acquisition costs. For trading financial assets evaluated by the fair value, the
unrealized gain or loss should be recognized in gain or loss for the period. While for the available-for-sale
financial assets, the unrealized gain or loss should be evaluated as other comprehensive gain or loss. The
aggregated value of gain or loss of available-for-sale financial assets can be recognized in the
available-for-sale financial assets, or it may be recognized as gain or loss for the period.
The recoverable amount of securities, if less than the acquisition costs (considering depreciation) of
securities or acquisition costs of equity, with objective proof to prove when the loss occurs and there is no
other proof to affirm the loss is unnecessary, should be recognized in gain or loss for the period.

F. Tangible asset measurement and depreciation method


The tangible assets are valued at acquisition costs or manufacturing costs. The relevant expenses that the
plant needed and maintenance expenses should be priced at acquisition cost (capital contribution in kind,
donation and other assets without costs shall be priced at fair value).
In addition, the expenditure of procurement or manufacture of tangible assets, if meeting the requirements
of recognition as tangible assets, it is recorded as capital expenditure; otherwise it is recognized as
expenses occurred in the period.
On the other hand, in terms of depreciation of tangible assets, the expenses is accrued in accounts as
calculated and allocated using straight-line method according to the chart of estimated useful lives below
Division

Estimated Useful Lives

Depreciation Method

Vehicle

5 years

Straight-line method

Equipment

5 years

Straight-line method



. ,
.
,
.

.
, ,

.

()
. ,
.
.
,
.
,
.

G. Intangible asset measurement and depreciation method


Intangible assets acquired separately are recognized at acquisition cost and intangible assets acquired in a
business combination are measured at fair value at the acquisition date. After the acquisition, the book
value will be directly reversed and marked as an accumulated depreciation amount and accumulated
impairment loss.
In addition, aside from development expenses, expenses of intangible assets generated internally are
included in current profits or losses when occurring.
Division

Estimated Useful Lives

Amortization Method

Other intangible assets

5 years

Straight-line method

H. Asset impairment losses


Besides the companys assets that are valued at fair value, with assets with a recovery value which falls
below the carrying amount due to the obsolescence of tangible and intangible assets and physical damage,
the decreased value from the carrying amount should be recognized as an impairment loss. Regardless of
assets which are evaluated at fair value, the probable amount of the recovery price might be lower than the
carrying amount, which is a result of obsolescence, physical damages and market price dropping. When
this happens, the balance between the recovery price and the carrying amount should be recognized as an
impairment loss
When the recoverable amount of the assets that recognized an impairment loss in the later period exceeds
the carrying amount, the impairment loss under the limit of the present value of the carrying amount before
impairment is reversed. However, in the case of available-for-sale securities, the amount recovered
afterwards should be included in the reversal of the impairment loss within the limit of the
previously-recognized impairment loss. The probable recovery amount should be recognized as the reversal
of the impairment loss, but the discounting balance of the carrying amount (before its defined as the loss)
is the limit.

I. Retirement benefit liabilities


The Company operates a defined contribution plan. The related payment obligation should be recognized
as retirement benefit that is accounting to Current profit and loss in relevant payment dates. If the
company is indebted to the contribution, an equal amount of unpaid contributions will be included in the
liabilities; if the contribution payment is larger than expected, reduce the future contribution payment or
return in cash. The excess payments were included into assets.


,
.

.
,


.
.
( \ 1,153.3 /US$, \
1,494.1/, \ 1,138.90/US$, \ 1,513.60/) ,
. ,
,
.
.

.

. ,

.


,

.

() () ,
.
.
31
.
1)

.

J. Provision and contingent liabilities


When the Company is fulfilling its current obligation, which generated by past events and transactions and
doesnt have certain payback time and payment amount, there is a high possibility for resource outflow. When
the cost of the obligation can be reliably measured, it should be recognized in the provision. Additionally, when
the difference between the provisions nominal price and present value is large, in order to fulfill the obligation,
the expenditure amount should be assessed by the present value.
Additionally, the potential obligations measured according to past or future events with an uncertain rate of
occurrence or existing obligations generated by past events or transaction outcomes, if there is little possibility
of resource outflow or if the cash required to fulfill the obligation cant be reliably measured, should be
recognized as a contingent liability.
K. Foreign currency translations
The companys monetary assets and liabilities are converted according to the reporting period end closing rate
(current period \ 1,153.3 / US $, \1,494.1 / , previous period \ 1,138.90 / US $, \ 1,513.60 / ). The translation
differences from the conversion are recognized in the current profits or losses. On the other hand,
non-monetary items that are measured at their historical costs are converted based on the exchange rate at the
date of the transaction. Non-monetary items which are measured by fair value should be converted at the
historical exchange rates when fair value was measured.

L. Income tax expenses


The temporary difference between the carrying amount of assets, liabilities and the amount of tax should be
measured as deferred tax asset and deferred tax liability. The deferred tax asset and deferred tax liability
are measured at the increase or decrease of the income tax amount generated by the fluctuating temporary
difference.

The feasibility of the deferred corporate taxes assets was examined each time at the end of the reporting
date. It can be identified as an asset when taxable income is confirmable, and the tax reduction on deferred
corporate tax assets is expected to be realized. For tax credits and tax deductions, if the deduction amount
is within the taxable income amount, then the amount should be recognized as a deferred corporate taxes
asset.
Deferred corporate taxes assets and deferred corporate liabilities have been classified as current assets
(current liabilities) and other non-current assets (non-current liabilities) according to asset subjects and
liability subjects on the balance sheet. Report and mark the deferred corporate taxes assets and liabilities
separately if they are related to the same authorities
Regulations on SME accounting treatment
As the SME confirming the basic law for SMEs, we accommodate for the special regulations of accounting
treatment for SMEs in accordance with Article 31, GAAP
(1) Long term deferred payment transactions
The liabilities which generated by long term deferred payment transactions and long term money loans
were reported by nominal values.

3. :
(:).

(%)
2011.12.31

8.5

11,000,000

( 17 ).
(:).

(%)
2011.12.31

8.5

2,000

2,000

61,957

63,957

2,000

.
, ( 17 ).
5. :

(: ).

Celltrion Healthcare Hungary Kft


Celltrion Healthcare India Private Limited
Celltrion Healthcare ILAC SANAYI VE
TICARET

(%)
()

-

100.00

3,317

3,317

4,999

99.98

12,242

12,242

99.00

3,761

3,761

19,320

19,320

3. Short term investment assets


The content of the companys short term investment assets up to the end date of the report are as follows (Unit:
KRW 000)
Amount

Annual Interest Rate(%)


2011.12.31

Division
Short-term loans

Current Period

8.5

Last Period
-

11,000,000

Short term debts up to the end of the last period all come from related partys full credit.

4. Long term investment assets


The content of the companys long term investment assets up to the end date of the report are as follows (Unit:
KRW 000)
Annual Interest Rate
(%)
31 Dec 2011

Division
Long term financial
instruments
Long term debts

Amount
Current Period

Notes

Last Period

2,000

2,000

8.5

61,957

63,957

2,000

Total

Mortgage deposit
-

The long-term financial instruments above will not be used as a mortgage deposit.
Additionally, the long term loans above all come from the related partys full credit.
5. Financial assets available for sale

Up to the end of the reporting period, available-for-sale securities are all non-marketable equity securities.
Details are as follows: (Unit: KRW 000)

Names

Number of Shares Held


(Shares)

Ownership
(%)

Current Period
Acquisition
Cost

Book
Value

Last
Period
Book
Value

Celltrion Healthcare Hungary Kft

100.00

3,317

3,317

Celltrion Healthcare India Private


Limited

4,999

99.98

12,242

12,242

Celltrion Healthcare ILAC SANAYI


VE TICARET

99.00

3,761

3,761

19,320

19,320

Total

20%
,

6.

( : )
. ()

43,956

193,243

237,199

624,160

624,160

(72,224)

(72,224)

43,956

745,179

789,135

43,955

78,650

122,605

666,529

666,530

62,507

62,507

()

43,956

204,030

247,986

96,911

96,911

(107,698)

(107,698)

43,956

193,243

237,199

43,955

63,055

107,010

130,188

130,189

7,324

24,554

31,878

The long term equity investment ratios of the available-for-sale securities mentioned above all exceed 20%.
The equity method cannot be used on unrelated items of the external review. Fair vale cannot be reliably
measured because of a lack of basic documents and experience, so the available-for-sale securities are
assessed according to acquisition cost.
6. Tangible assets
Changes in the current and last periods tangible assets are as follows: (Unit:KRW 000; net)
(Current period)
Division

Vehicle

Equipment

Total

Acquisition costs at the beginning


balance

43,956

193,243

237,199

Acquisition / capital expenditures

624,160

624,160

Disposal

(72,224)

(72,224)

Acquisition costs at the ending


balance

43,956

745,179

789,135

Accumulated depreciation
amount at the end of the period

43,955

78,650

122,605

Carrying amount at the end of the


period

666,529

666,530

Depreciation

62,507

62,507

Last period
Division
Acquisition costs at the
beginning balance

Vehicle

Equipment

Total

43,956

204,030

247,986

Acquisition / capital
expenditures

96,911

96,911

Disposal

(107,698)

(107,698)

Acquisition costs at the


ending balance

43,956

193,243

237,199

Accumulated depreciation
amount at the ending
balance

43,955

63,055

107,010

130,188

130,189

7,324

24,554

31,878

Carrying amount at the end


of the period
Depreciation

7.

( : ).
()

18,260

(7,647)

10,613

(2,736)

(2,736)

18,260

(10,383)

7,877

()

12,720

(4,457)

8,263

5,540

(3,190)

2,350

18,260

(7,647)

10,613

,
.
8. :
( : ).

(%)
2011.12.31

(*1)

6.2

40,000,000

()

8.5

22,600,000

()

8.5

15,252,203

8.5

300,000

62,900,000

15,252,203

(*1) ( 11 ).

7. Intangible assets
Changes in the current and last periods intangible assets (Unit: KRW 000)
Current period
Division

Acquisition Cost

Beginning balance

Book Value

18,260

(7,647)

10,613

(2,736)

(2,736)

18,260

(10,383)

7,877

Appreciation
Ending balance

Accumulated Amortization

Last period
Division

Acquisition Cost

Beginning balance
Appreciation
Ending balance

Accumulated Amortization

Book Value

12,720

(4,457)

8,263

5,540

(3,190)

2,350

18,260

(7,647)

10,613

Intangible assets are composed of software. Expenses base for amortization consist of sales costs and
management expenses.
8. Short term liabilities
The content of the short term liabilities up to the end of the reporting date are as follows (Unit: KRW 000)

Annual Interest Rate (%)


31 Dec 2011

Creditor

Amount
Current Period

Last Period

Exchange bank (*1)

6.2

40,000,000

Celltrion Holdings Co., Ltd.

8.5

22,600,000

Celltrion GSC Co., Ltd.

8.5

15,252,203

Representative Director

8.5

300,000

62,900,000

15,252,203

Total

(*1) Special related personnel have taken payment guarantees to exchange the bank short-term liability
amounts mentioned above (Notes 11)

9. :
(:).

829,441

323,701

835,366

(56,455)

(5,925)

(1,096,687)

829,441

,
323,701 1,096,687
.
10. :

(:). ()

EUR

1.00

RON

133.00

46

(2)

PLN

147.80

50

(6)

USD

1.00

EUR

41,468.10

61,957

(3,904)

USD

50,100,000.00

57,780,330

721,440

EUR
RON
PLN
USD

41,469.10
133.00
147.80
50,100,001.00

57,842,385

717,528

USD

14,026.85

4,946

14

USD

14,026.85

4,946

14

9. Retirement benefit liabilities


The content of changes in current and last periods pension liabilities (Unit: KRW 000)
Division

Current Period

Last Period

Beginning balance

829,441

Retirement payable

323,701

835,366

Retirement payment

(56,455)

(5,925)

(1,096,687)

829,441

Retirement payment plan


Ending balance

The company has introduced a defined retirement payment plan in the current period. Before the introduction
the retirement payment liabilities balance was KRW 1,096,687,000 including KRW 323,701,000 in retirement
payments which were recognized in the current period and paid to the related financial authority.
10. Foreign currency assets
The content of the conversion of monetary current assets and liabilities measured in foreign currencies are as
follows: (Unit: KRW 000)
Current period
Subject

Korean won

Profit and Loss on


Exchange

EUR

1.00

RON

133.00

46

(2)

PLN

147.80

50

(6)

USD

1.00

EUR

41,468.10

61,957

(3,904)

USD

50,100,000.00

57,780,330

721,440

Total

EUR
RON
PLN
USD

41,469.10
133.00
147.80
50,100,001.00

57,842,385

717,528

Accounts payable

USD

14,026.85

4,946

14

Total

USD

14,026.85

4,946

14

Cash and cash


equivalents

Long term
Foreign currency investment assets
assets
Long term and
short term trade
receivables

Foreign currency
liabilities

Foreign Currency Amount

USD

6,212,846.71

7,075,811

(469,163)

EUR

13.12

20

(1)

USD

59,100,000

67,308,990

(582,880)

USD
EUR

65,312,846.71
13.12

74,384,821

(1,052,044)

11. , :
.
40,000,000
.

.
(1) (
) ( 22 )
(2) 57,491,000 (
71,239,200 )
7,524,000 ( 9,028,800 ) .
.
() ()
.
.
(1)
.
(2) .

Last period
Subject

Foreign Currency Amount

Profit and Loss on


Exchange

USD

6,212,846.71

7,075,811

(469,163)

EUR

13.12

20

(1)

Long term and short


term trade receivables

USD

59,100,000

67,308,990

(582,880)

Total

USD
EUR

65,312,846.71
13.12

74,384,821

(1,052,044)

Cash and cash


equivalents
Foreign
current
assets

Korean won

11. Provide guarantee details, contingent liability and protocol matters.


A. Guarantee details offered by others
From the Representative Directors, the Company received a joint guarantee for a derivatives basic contract
and KRW 40,000 MN loan from the exchange bank.
B. Contents of the guarantee provided for others
(1)

The Company is responsible for providing joint guarantee for the debt of the new split company
Celltrion Holdings and the debt before split (including contingent liabilities before the split).

(2)

The Company provides joint guarantee for Celltrion Holdings KRW 57,491 MN borrowings from
financial institution (Debts cap at KRW 71,239.2 MN) and Celltrion GSCs KRW 7,524 MN borrowings
from financial institution (Debts cap at KRW 9,028.8 MN)

C. Contents of the guarantee provided for others


The representative director provided collaterals for Celltrion Healthcareslong-term borrowings from
Celltrion Pharm.
D. Commitment
(1) At the end of the reporting date, the company has no remaining balance from the exchange banks
line of credit or basic contract for derivatives.
(2) The company is signing contracts in order to engage in sales and distribution with other domestic
and foreign pharmaceutical companies.

(: ).

()

, (),

8,100,000

12. :
.
20,000,000 (1 :5,000 )
2011
12 31 368,363 ( 300,000 , 68,363 )
1,841,815 .
.


1 : - 1%
2 : - 0.01%

1 : 2009 7 10
2 : 2011 8 31

(1)
1 : 4

2 : 5

(2)

(1) : 1 1
(2) :
(3) :
1 : 1
2 : 5

E. Pending litigation
The Companys lawsuits till the end of the period are as follows: (Unit: KRW)
Prosecutor

Defendant

Events

Litigation Cost

Poly Vision Co., Ltd.

Celltrion Phama Co., Ltd.

Cancel deceptive action, etc.

8,100,000

For the litigation cases going on mentioned above, we cant accurately predict the final results. Therefore, the
influence generated by the lawsuit results is not reflected in the financial statement.

12. Capital:
A. Capital stock
According to the articles of association, the total number of shares issued by the company was 20,000,000
(5,000 KRW per share), at the end of 31 December 2011. The number of shares issued is 368,363 (300,000
ordinary shares, 68,363 preferred share). The paid-in capital is KRW 1,841,815,000.
The content of last periods preference share is as follows.
Subject

Content

Accumulated participating redeemable and convertible preference shares


First preference share: lowest annual interest rate - 1% of the issue price of redeemable
Preference shares
and convertible preference share
by category
Second preference share: lowest annual interest rate 0.01% of par value the
redeemable and convertible preference share
Date of increase in First preference share: 10 July 2009
paid-in capital
Second preference share: 31 August 2011
Voting rights

Have voting rights

Note about
Redemption

(1) Redemption date


1. First preference share: Four years after the issue date, can be redeemed when the
redemption conditions occur
2. Second preference share: Five years after the issue date, can be redeemed when the
redemption conditions occur
(2) Redemption amount
Based on redemption reasons and redeemed at a reasonable price

Conversion
requirements

(1) Conversion ratio: the initial exchange rate is 1:1 between redeemable and convertible
preference share and ordinary share
(2) Conversion price: the issue price of each preference share
(3) Required conversion period:
First preference share: Start from one year after the issue date
Second preference share: Five years within the issue date

157,630

19,809,452

19,967,082

184,185

16,813,665

16,997,850 2011.8.30

341,815

36,623,117

36,964,932

(2011.8.31)

.
2010 11 25
1,500,000 157,635 , 59,368,783
( 22 ).
.
.

12

==================
===
2011 01 01
11
01
2011 12 31

2010 01
2010 12 31

2012 3 23
2011 3 31

( : )

I.

34,791,093

41,010,820

1. ()

41,010,820

(13,625,249)

2. ()

(6,219,727)

54,636,069

34,791,093

41,010,820

II.
III.

Division

Capital Stock of
Preferred Shares

Share Premium

Total

Notes

Beginning balance

157,630

19,809,452

19,967,082

Increase in paid-in
capital

184,185

16,813,665

16,997,850

Ending balance

341,815

36,623,117

36,964,932

30 Aug 2011
board of directors

B. Spin-off
The company conducted a spin-off on 25 November 2010. The capital of ordinary shares and preference
shares decreased by KRW 1,500,000,000 and KRW 157,635,000 respectively, and generated KRW
59,368,783,000 loss from capital reduction (Notes 22).
C. Statement of retained earnings
The current and last periods retained earnings are as follows:

The 12th period:

1 Jan 2011
To 31 Dec 2011

Statement of Retained Earnings


==================
===
The 11th period:

Expected disposal date: 23 Mar 2012

1 Jan 2010
To 31 Dec 2010
The 11th period:
Determined disposal date: 31 Mar 2011
Unit: KRW 000

Division

Current Period

Last Period

I. Unappropriated retained earnings

34,791,093

41,010,820

1. Last periods retained earnings carried forward

41,010,820

(13,625,249)

2. Net profit (loss) in the current period

(6,219,727)

54,636,069

34,791,093

41,010,820

II. Appropriated retained earnings


III. Unappropriated retained earnings carried forward in
the next period

13. :
(:).

26,400,000

66,000,000

145,200,000

26,400,000

284,240,000

184,800,000

(403,040,000)

(145,200,000)

14. :

(:).

3,536,121

3,520,131

323,701

835,366

380,964

316,634

1,564,913

623,827

421,756

235,231

148,445

66,674

16,657

4,689

62,507

31,878

2,736

3,190

343,007

179,640

93,555

97,311

53,033

19,343

2,012,929

1,494,617

2,143,960

515,173

186,313

739,090

91,105

103,736

41,015

15,676

442,899

102,720

75,649

90,869

11,941,265

8,995,795

13. Cost of sales


Content of the cost of sale in current and last period: (Unit: KRW 000)
Division

Current Period

Sales cost

Last Period
26,400,000

66,000,000

Inventory at the beginning


balance

145,200,000

26,400,000

Acquisition

284,240,000

184,800,000

(403,040,000)

(145,200,000)

Inventory at the ending


balance

14. Sales and administrative expenses


Content of current and last periods sales and administrative expenses are as follows: (Unit: KRW 000)
Division
Salaries

Current Period

Last Period
3,536,121

3,520,131

Retirement Payments

323,701

835,366

Welfare Expenses

380,964

316,634

1,564,913

623,827

Reception Expenses

421,756

235,231

Communication Expenses

148,445

66,674

Tax Expenses

16,657

4,689

Depreciation

62,507

31,878

Amortization

2,736

3,190

343,007

179,640

Vehicle Maintenance Expenses

93,555

97,311

Book Printing Expenses

53,033

19,343

Commission Expenses

2,012,929

1,494,617

Advertising Expenses

2,143,960

515,173

Bad Debt Expenses

186,313

739,090

Training Expenses

91,105

103,736

Building Maintenance Expenses

41,015

15,676

442,899

102,720

75,649

90,869

11,941,265

8,995,795

Travel Expenses

Rental Expenses

Outsourcing Expenses
Other Sales and Administrative
Expense
Total

15. :
() .
.
(:).

5,461,867

(1,463,917)

10,512,532

(5,931,614)

(1,463,917)

10,042,785


()

.
(:).

(5,931,614)

.

( :).

()

(7,683,644)

64,678,854

(1,690,402)

15,652,283

226,485

(5,609,498)

187,442

(269,409)

(71,410)

(3,419,657)

(1,908,512)

(23,100)

(69,300)

62,143

128,790

(1,463,917)

10,042,785

15. Income tax expenses


The details of income tax and deferred income tax assets (liabilities) are as follows:
The details of the main composition of the corporate tax
The details of the main composition of the corporate tax in the current and last periods are as follows (Unit:
KRW 000)
Division

Current Period

Current income tax payable


Changes in deferred corporate tax assets caused by
temporary differences

5,461,867

(1,463,917)

10,512,532

(5,931,614)

(1,463,917)

10,042,785

Income tax expenses reflected directly in capital


Income tax expenses (income)

Last Period

A. Income tax expenses after directly adding and subtracting capital


The contents of corporate tax expenses after directly adding and subtracting capital are as follows
(Unit: KRW 000)
Division

Current Period

Last Period

Investments on equity method

(5,931,614)

B. Relationship between tax expenses and profits or losses before income tax expenses
The relationship between tax expenses and profits or losses before income tax expenses in the current and
last periods are as follows.
Division

Current Period

Last Period

Profit and loss before income taxes

(7,683,644)

64,678,854

Income tax in accordance with the applicable


tax rate

(1,690,402)

15,652,283

226,485

(5,609,498)

Adjustments
Expenses not deductible for tax purposes

187,442

(269,409)

Amount of unrecognized deferred tax due to


temporary differences

(71,410)

Recognized deferred tax reserves at the


beginning of the period

(3,419,657)

(1,908,512)

(23,100)

(69,300)

62,143

128,790

Recognized loss carry forward in this period


Tax Credits
Effects of Changes in tax rates
Income tax expenses

(1,463,917)

10,042,785

() ( :
).
()

()

120,743

120,743

5,127

2,886

118

2,359

519

1,549,500

1,549,500

340,890

1,099,164

220,003

560,367

758,800

166,936

1,131,200

121,200

1,010,000

222,200

771,554

771,554

()

1,646,754

1,646,754

1,029,203

1,029,203

226,425

7,422,887

7,422,887

1,633,035

21,000

21,000

23,100

4,774,542

220,003

3,223,504

10,022,708

11,793,749

2,390,386

222,719

2,390,386

222,719

(*1)
()

(47,120)

(220,003)

(57,603)

(209,520)

(46,095)

(4,170)

(4,170)

(918)

(47,120)

(220,003)

(57,603)

(4,170)

(213,690)

(46,095)

(918)

(46,095)

(918)

2,344,291

221,801

(*1)
.

C. Increased or decreased breakdown of temporary differences and deferred tax assets (liabilities)
Content of the increased or decreased deferred tax assets (liabilities) of temporary differences are as follows:
(Unit: KRW 000)
(Current period)
Temporary Difference
Division

Adjustmen
t at the
Beginning

Beginning
Balance

(Deductible
temporary
differences)
Allowance for bad
debts

Decrease

Liquidity

Ending
Balance

Increase

Illiquidity

120,743

120,743

5,127

2,886

118

2,359

519

1,549,500

1,549,500

340,890

1,099,164

220,003

560,367

166,936

1,131,200

121,200

1,010,000

222,200

771,554

771,554

1,646,754

1,646,754

1,029,203

1,029,203

226,425

Deficit carried
forward

7,422,887

7,422,887 1,633,035

Tax credits

21,000

4,774,542

220,003

Depreciation
Unpaid expenses
Foreign currency
exchange losses
Long term
prepayments
Retirement
payments
liabilities
Unpaid expenses
(piece wages)

Total

758,800

21,000

23,100

3,223,504 10,022,708 11,793,749 2,390,386

222,719

2,390,386

222,719

Deferred tax assets (*1)


Taxable temporary
differences
Foreign currency
conversion gains

(47,120) (220,003)

Long term accrued


income
Total

(47,120) (220,003)

Deferred tax liabilities


Deferred tax assets- net

(57,603)

(57,603)

(209,520)

(46,095)

(4,170)

(4,170)

(918)

(4,170)

(213,690)

(46,095)

(918)

(46,095)

(918)

2,344,291

221,801

(*1) In the period that the deductible temporary difference exists, if there is sufficient taxable income to be
expected, then the deductible temporary difference must be recognized as a deferred tax asset.

()

()

475,850

475,850

929,068

808,325

120,743

29,220

560,000

560,000

(52,794,122)

18,506,324

76,063,863

4,763,417

3,130

3,130

5,127

5,127

1,240

1,061,804

(1,061,804)

1,099,164

1,099,164

265,998

1,131,200

1,131,200

248,864

771,554

771,554

169,742

()

1,646,754

1,646,754

398,515

4,774,542

694,973

418,606

694,973

418,606

7,969,704

7,969,704

28,576,812

84,512,547

9,284,480

(51,425,797)

(*1)
()
(37,392)

(37,392)

(47,120)

(47,120)

(11,403)

(37,392)

(37,392)

(47,120)

(47,120)

(11,403)

(11,403)

683,570

418,606

(*1)
.

(Current period)
Temporary Differences
Division

Beginning
Balance

Decrease

Increase

(Deductible temporary
differences)
Allowance for bad
475,850
475,850
debts
Impairment losses in
560,000
available for sale
b
d investments
Share
applicable for equity 18,506,324 76,063,863
methods
Depreciation
3,130
3,130
Option payable

1,061,804

Decrease
Arising from
Spin-off

Illiquidit
y

Liquidity

Ending
Balance

929,068

808,325

120,743

29,220

560,000

4,763,417

(52,794,122
)

5,127

5,127

1,240

- (1,061,804)

265,998

Foreign currency
exchange losses

1,099,164

1,099,164

Long term prepayment

1,131,200

1,131,200

- 248,864

Retirement payments

771,554

771,554

- 169,742

Unpaid expenses
(piece wages)

Deficit carried forward


Total

1,646,754

7,969,704 7,969,704

28,576,812 84,512,547

Deferred income tax assets (*1)

1,646,754

398,515

9,284,480 (51,425,797
)

4,774,542

Taxable
temporary
Uncollected
interest
Foreign currency
conversion gains

(37,392)

(37,392)

(47,120)

Total

(37,392)

(37,392)

(47,120)

694,973 418,606
694,973 418,606

(47,120) (11,403)

(47,120) (11,403)

Deferred tax liabilities

(11,403)

Deferred tax assets- net amount

683,570 418,606

(*1) In the period that the deductible temporary difference exists, if there is sufficient taxable income to be
expected, then the deductible temporary difference is recognized as a deferred tax asset.

.
(:).

2,367,084

6,110,161

5,461,867

2,367,084

648,294

(*)

(*) .
16. :
(:).

()

(6,219,727)

54,636,069

(6,219,727)

54,636,069

()
17. :


. .

2011

2010

Celltrion Healthcare Hungary Kft

Celltrion Healthcare India Private Limited


Celltrion Healthcare ILAC SANAYI VE
TICARET
()

()

()

()

()

()

()

()

()(. )

()

()(*1)

()

(*1) () () .

D. Current income tax assets and current income tax liabilities before the deduction
The details of the current income tax assets and current income tax liabilities before the offset up to the end of
the reporting date (Unit:KRW 000)
Subject

Current Period

Current income tax assets before the offset (*)

Last Period

2,367,084

6,110,161

5,461,867

2,367,084

648,294

Current income tax liabilities before the offset


Current income tax assets after the offset

(*) Current interim prepaid tax amount and interest equal the total amount of tax withheld.
16. Statement of comprehensive income
Profits and losses in the current and last periods are as follows. (Unit:KRW 000)
Division

Current Period

Current net profits (losses)

Last Period

(6,219,727)

54,636,069

(6,219,727)

54,636,069

Other comprehensive income


Current total comprehensive income
(losses)

17. Related party transactions


Special related entities in the current and last periods and transactions with special related personnel are as
follows:
A. Related party:
Division

2011

2010

Manager

Jung-jin Seo

Subsidiary

Celltrion Healthcare Hungary Kft


Celltrion Healthcare India Private Limited
Celltrion Healthcare ILAC SANAYI VE TICARET

Celltrion Holdings., Ltd.


Celltrion GSC., Ltd
Celltrion., Ltd
Other
Celltrion Pharm., Ltd.
stakeholders
Celltrion
Celltrionstpreviousnexoltelecom
Celltrion Venture Capital (*1)

Jung-jin Seo

Celltrion Holdings., Ltd


Celltrion GSC., Ltd
Celltrion. Ltd
Celltrion Pharm., Ltd.
Celltrion Holdings entrepreneurship
Shareholders and employees

(*1) Celltrion Venture Capital combined with Celltrion Holdings in the current period.

. (:)
()

1,188

4,170

32,047,509

286,212,667

32,051,679

286,213,855

()


435,809

2,669

13,687,890

186,290,213

14,123,699

186,292,882

. (:)
()

301,188

66,128

34,760,000

347,600

275,411,417

34,826,128

347,600

275,712,605

()

14,519

12,194,043

121,061

169,572,965

12,194,043

121,061

169,587,484

B. Contents of transaction with related parties (Unit:KRW 000)


(Current period)
Division

Sale

Purchase

Manager

1,188

4,170

Stakeholder

32,047,509

286,212,667

Total

32,051,679

286,213,855

Subsidiary

(Last period)

Division

Sale

Purchase

Manager

435,809

2,669

Stakeholder

13,687,890

186,290,213

Total

14,123,699

186,292,882

C.

The main contents receivables and payables resulting from the transactions with related parties
(Unit:KRW 000)

(Current period)
Receivables
Division

Allowance for bad


debts

Amount

Manager

Payables
Amount

301,188

66,128

Other Related Parties

34,760,000

347,600

275,411,417

Total

34,826,128

347,600

275,712,605

Subsidiary

(Last period)
Receivables
Division

Allowance for bad


debts

Amount
Manager

Payables
Amount

14,519

Other Related Parties

12,194,043

121,061

169,572,965

Total

12,194,043

121,061

169,587,484

.
(:) ()

(%)

8.5

61,957

8.5

22,600,000

8.5

300,000

()

(%)

8.5

11,000,000

8.5

15,252,203

18. :
(:).

23,501,276

33,000,000

19. :
.


.
, ,

.

D. Receivables and payables on financial arrangements with related parties (Unit:KRW 000)
(Current period)
Subject

Division

Interest Rate
(%)

Amount

Receivabl Long term


Other Related Parties
es
investment assets

8.5

61,957

Other Related Parties

8.5

22,600,000

Manager

8.5

300,000

Short-term
Payables
borrowing

Last period
Subject

Division

Interest Rate
(%)

Amount

Receivabl
es

Short term
investment asset

Other Related Parties

8.5

11,000,000

Payables

Short-term
borrowings

Other Related Parties

8.5

15,252,203

18. Statement of cash flows


Significant transactions without cash inflow and outflow in the current and last periods are as follows
(Unit: KRW 000)
Division

Current Period

Last Period

Alternative liquidity of long term receivables

23,501,276

Alternative liquidity of long term payables

33,000,000

19. Financial instruments


A.

Main assumptions on the determination of financial instruments fair value

For the companys financial instruments which dont have an active market with a standard transaction
conditions, the fair value were calculated by using generally accepted pricing models based on the
discounted cash flows method, and refer to the fair value of other financial instruments and financial
liabilities.
Additionally, the companys financial instruments are current assets and liabilities instead of securities that
included in profit and losse subject. Therefore, the difference between discounted cash flows and
purchase costs has of no effect on the balance sheet. The financial instrument should be assessed using
the fair value when purchased.

.
(1)

( : ).
()

1,486,052

1,486,052

22,900,000

40,000,000

62,900,000

66,440,000

93,060,000

71,060,000

230,560,000

90,826,052

133,060,000

71,060,000

294,946,052

()

1,870,436

1,870,436

15,252,203

15,252,203

36,960,000

44,000,000

46,200,000

127,160,000

38,830,436

59,252,203

46,200,000

144,282,639

(2)

.

.

B. Maturity analysis of financial liabilities and the liquidity risk management


(1) Maturity analysis of financial liabilities
The analyses of financial liabilities after they have been transferred and liquidated at the due date by
category are as follows: (Unit: KRW 000)
(Ending balance at current period)

Division

Within 3 Months 3 Months -1 year

1-2 Years

2-5 Years

Total

Accounts Payable

1,486,052

1,486,052

Borrowings

22,900,000

40,000,000

62,900,000

Trade Payables

66,440,000

93,060,000

71,060,000

230,560,000

Total

90,826,052

133,060,000

71,060,000

294,946,052

1-2 Years

2-5 Years

Total

(Ending balance at last period)

Division
Accounts Payable
Borrowings

Within 3 Months 3 Months -1 year


1,870,436

1,870,436

15,252,203

15,252,203

Trade Payables

36,960,000

44,000,000

46,200,000

127,160,000

Total

38,830,436

59,252,203

46,200,000

144,282,639

(2) Liquidity Risk Management


The board of directors is responsible for liquidity risk management, which made basic policies for short
term and long term financing activities and obey liquidity risk management regulations. The company
maintains adequate reserves and borrowing limits, continues to observe the predicted cash flows and
actual cash flows, and adjusts the maturity of financial assets and financial liabilities to manage the
liquidity risk.

dart.fss.or.kr

20. :
(: ).

3,536,121

3,520,131

323,701

835,366

380,964

316,634

62,507

31,878

2,736

3,190

16,657

4,689

343,007

179,640

4,665,693

4,891,528

21. :

2012 1 30 , 2012 2 1
110,080 2,307,500 .
22. :
.
2010 9 17 2010 10 22 ,
2010 11 25 ,
() .
.
(1)
530 2 530 12
, .


.
() ()
1 1 .
,
.

dart.fss.or.kr

20. Necessary subjects when calculating value-added:


Necessary subjects needed to calculate the current and last periods values added are as follows. (Unit: KRW
000)
Subject
Salary

Current Period

Last Period
3,536,121

3,520,131

Retirement benefits

323,701

835,366

Employee benefits

380,964

316,634

Depreciation

62,507

31,878

Amortization

2,736

3,190

16,657

4,689

343,007

179,640

4,665,693

4,891,528

Tax and public tax


Rent payments
Total
21. Event after the report termination date

According to the resolution of the board of directors on 31 January 2012, the company decided to choose 1
February 2012 as the capital stock pay-up day, issuing 110,080 preferential shares, at 2,307,500 KRW per
share.
22. Equity spin-off
A.

Overview of equity spin-off

According to the company Board of Directors decision on 17 September 2010, and the approval of the
Extraordinary General Meeting of Shareholders on 22 October 2010, the retail pharmaceutical business
division and investment division were transferred to the newly established Celltrion Holdings Inc. under
the spin-off method.
B.

Methods and contents of spin-off

(1)

The companys spin-off method

The spin-off company Celltrion Healthcare Co., Ltd. branched off its investment department and
established a new company and transferred its related assets and liabilities according to regulation 530th
2-12 of the business law. The new spin-off company issues shares within the spread between assets and
liabilities, which is the net asset value. After the company separated itself completely, shares were
distributed to shareholders under the spin-off method. For shareholders on the list of Celltrion Healthcare
Co., Ltd., shares held by Celltrion Holdings will be distributed at the rate of one share for one share.
Additionally, the spin-off company and the newly established spin-off company take joint responsibility
for liabilities before the spin-off, respectively.

dart.fss.or.kr

(2)

2010 10 22
,
.
.
(3)
,
.
(4)

.
(5)

( : ).

102,118,370

164,527,120

40,147,452

82,496,197

( )

7,829,634

49,119,319

( )
23. :

3,768,204

48,931,838

2012 3 14

dart.fss.or.kr

(2)

The new company and the value of the property before spin-off

According to the Inheritance Object Subject attached on the Spin-off Business Proposal which was
approved in the extraordinary general shareholders meeting held on 22 October 2010, the assets and
liabilities transferred to the newly established company should be adjusted in accordance with changes
of property in the relevant departments. The transferred assets and liability should be included in the
newly established company.
(3)

Items regarding the inheritance of rights and obligations

The spin-off companys assets that transferred actively or passively, rights and obligations, as well as
other items, were all transferred to the newly established company at the date of the spin-off.
(4)

Items regarding employee inheritance and retirement payments

Department employees and their pensions transferred from the previous company to the newly
established company will be inherited by the newly established company as of the spin-off date.
(5)

Assets and liabilities, sales and operating profits should be transferred due to the spin-off

As of the end of the previous accounting years and the spin-off date, the departments assets and
liabilities, sales and operating profit are as follows: (Unit: KRW 000)

Division
Assets

Financial Year before Spin-off

Financial Year after the Spin-off

102,118,370

164,527,120

40,147,452

82,496,197

Sales (equity-related income)

7,829,634

49,119,319

Operating profit (equity-related income)

3,768,204

48,931,838

Liabilities

23. Date and constitution for the approval of the financial statement
In order to submit the financial statement of the current account period in the regular general meeting of
stockholders, it was prepared to be confirmed by the board of directors on 14 March 2012

2011 12
31

2 3
.

: 1.
2.

Opinions on the Internal Accounting Management System


Audit
Celltrion Healthcare Co., Ltd.

The internal accounting management system audit report by the external auditor is the annual audit of the
financial statement for Celltrion Healthcare Co., Ltd. as of 31 December 2011.The result of the internal
accounting management system audit is operated based on the internal accounting control system and Item 3,
Article 2 of the relevant laws of external supervision.

Appendix: 1- Internal accounting management system audit report by external auditor


2- Operating condition assessment report by internal accounting management system auditor


===================================

2012

03

02

2011 12 31
. ,
,
.
"2011 12 31
, 2011 12 31

" .

.

.


. ,
6 ''

2 2
.
'14. ' .

Internal Accounting Management System Audit Report by External Auditor

Celltrion Healthcare Co., Ltd.


To the Representative Director
2 March 2012
We audited the operating situation of Celltrion Healthcare Co.s internal accounting management system up to 31
December 2011. Celltrion Healthcare Co., Ltd. is responsible for setting up its internal accounting management
system and preparing the operating condition assessment report. We are responsible for the audit and report results
for the same report content. In the internal accounting management system assessment report, the companys
operator wrote: as of 31 December 2011, the results of the internal accounting management system operating
condition states that our companys internal accounting management system is preparing for internal accounting
management regulations and organization as well as strictly obeying the relevant control procedures of internal
accounting management.
We conducted the audit according to internal accounting management system audit standards. The standard
starts from a material review, and we carried audit procedures and lower-standard recognitions on the internal
accounting management system operating condition assessment report submitted by operators. The audit should
fairly convey the companys internal accounting management system, including questions on the internal accounting
management system operating condition report, while recognizing that the content is only relevant within the
limited range of its prescribed scope. However, compared with the listed SMEs, the non-listed ones enjoy relatively
looser political restrictions in terms of the structure and operation of their internal accounting control systems. These
private companies only need to structure their internal accounting control systems based on the related laws of
external supervision and the control procedures of the internal accounting control system, in accordance with the
Supplementary Article, in the 6th Chapter of the Internal Accounting Control System Standards.
Internal accounting regulations and organizations (management and operation) are established in order to
collect reliable accounting information and open it to the public, and also confirm that the financial statement
functions in accordance with the accounting principles that are generally accepted in Korea. However, because of
the essential limitations of the internal accounting control system, vital misstatements might not be found out and
avoided. Besides, when predicting future content based on the operating assessment reports of the internal
accounting control system, we must consider that possible changes might happen due to different situations, or
improper conditions resulting from a failure to observe certain procedures and policies. We must watch out for the
risk inherent in assessment changes and predicted content in the future.

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Internal accounting regulations and organizations (management and operation) are established in
order to collect reliable accounting information and open it to the public, and also confirm that the
financial statement functions in accordance with the accounting principles that are generally accepted in
Korea. However, because of the essential limitations of the internal accounting control system, vital
misstatements might not be found out and avoided. Besides, when predicting future content based on the
operating assessment reports of the internal accounting control system, we must consider that possible
changes might happen due to different situations, or improper conditions resulting from a failure to
observe certain procedures and policies. We must watch out for the risk inherent in assessment changes
and predicted content in the future.
For the internal accounting management system operating condition report submitted by operators,
our audit result states that: the operation condition report, seen it from the view of content, is in
accordance with Chapter 6 of the regulation Applicable to SMEs in the internal accounting management
system model standard, and therefore we affirm the preparation.
Our audit targeted the internal accounting control regulations up to 31 December 2011, but is not
responsible for this regulation after 31 December 2011. This audit report was made based on the
relevant laws for external audits of joint-stock companies, so it may not be proper for other purposes or
users.
Sam Young Accountancy
Representative Director
Kim Duck

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