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Annual Report of Celltrion Holdings in 2014

From 1 January 2011


To
31 December 2011

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Contents
Independent Audit Report .......................................................................................................................... 4
Independent Auditors Report ..................................................................................................................... 6
(Attachment) Consolidated Financial Statements.10
Statement of Financial Position12
Consolidated Statement of Comprehensive Income ............................................................................... 18
Consolidated Statement of Change in Equity ........................................................................................ 20
Consolidated Statement of Cash Flows................................................................................................. 22
Notes to Financial Statements ................................................................................................................... 28
External Audit's Content ......................................................................................................................... 124

15()
2014 01 01

2014 12 31

14()
2013 01 01

2013 12 31

Celltrion Healthcare Co., Ltd. and its subsidiaries

Consolidated financial statement


Independent Audit Report

15th

Period

From 1 January 2014


To
31 December 2014

14th Period
From 25 November 2013
To
31 December 2013

Sam Young Accounting Firm


. 2014 12 31 2013 12 31 ,
,
.


,
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.

.
.

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.


2014 12 31 2013 12 31 ,

.

Independent Auditors Report


Celltrion Healthcare Co., Ltd.
To the Board of Directors and Shareholders
March 19, 2015
We have audited the consolidated Financial Statements of Celltrion Healthcare Co.,Ltd and its subsidiaries. The
accounting period starts from December 31,2013 and ends on December 31,2014. This report includes the
Consolidated Statement of Financial Position, the Consolidated Statement of Comprehensive Income, the
Consolidated Statement of Changes in Equity, and the Consolidated Statement of Cash Flows for the current
period, along with the summary of accounting policies and some explanations related.
Directors' responsibility
The directors of the Group are responsible for the preparation of these financial statements in accordance with
the International Financial Reporting Standards adopted by the Republic of Korea (Korean-IFRS). This
responsibility includes: designing, implementing and maintaining internal control relevant to the preparation of
financial statements that are free from material misstatement, whether due to error or fraud, selecting and
applying appropriate accounting policies; and making accounting estimates that are reasonable in the
circumstances.
Auditors responsibility
The auditing report will strictly comply with the provisions of the audit laws of the Republic of Korea. The
report also has the responsibility to present fair notations to the consolidated financial statements. No distorted
comments will be made under any condition of false records, misleading statements or materials omissions.
Meanwhile, this report is also responsible for any necessary decisions made during the companys internal
control.
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our
auditing in accordance with auditing standards generally accepted in the Republic of Korea. Those standards
require that we comply with ethical requirements and plan and perform the audit to obtain reasonable
assurances about whether the financial statements are free of material misstatement. At the same time, we are
also responsible for the results conducted from the Groups internal control.
The amount and disclosures in the consolidated financial statements have been audited in procedures to obtain
audit evidence.The procedures selected depend on auditors judgment, including the assessment of the risks of
material misstatement of the consolidated financial statements, whether due to fraud or error. In the
assessments of risks, the auditors consider the internal control relevant to the entitys preparation of the
consolidated financial statements in order to design appropriate audit procedures. However, this method is not
for expressing an opinion on the effectiveness of the entitys internal control. The audit report not only provides
comprehesive notations to the consolidated financial statements, but also evaluates the appropriateness of
accounting policies used and the reasonableness of accounting estimates made by the directors. We believe
that our audits provide a reasonable basis for our opinion.
Audit opinion
In our opinion, in the accounting period between November 31, 2013 and Novemeber 31, 2014, the
consolidated financial statements, together with the consolidated statement of comprehensive income, the
consolidated statement of changes in equity and the consolidated statement of cash flows, of Celltrion
Healthcare and its subsidiaries are provided fairly in accordance with general International Financial Reporting
Standards (IFRS).
Other matters

2013 12 31
,
,
.

10

2015 3 19

(2015 3 19 ) .

As of November 31, 2013, Celltrion Healthcare was audited in line with the previous auditing standards.
Therefore the subsidiaries are not included in the financial statement of the parent company. The subsidiaries
financial reports were not included in the parent companys financial report. For comparison, the financial
statements of the subsidiaries are attached at the end of the consolidated financial statements of Celltrion
Healthcare Co., Ltd.

10, Gukjegeumyung-ro, Yeongdeungpo-gu, Seoul, Korea


Sam Young accounting firm
Representative DirectorHam Jongho
March 19, 2015
This report is effective as of March 19, 2015, the audit report day. Certain subsequent events or circumstances,
which may occur between the audit report date and the time of reading this report, could have a material impact
on the accompanying consolidated financial statements and notes thereto. Accordingly, there will be some
adjustments to correct the financial statements.

()

15()
2014 01 01

2014 12 31

14()
2013 01 01

2013 12 31

" ."

()
( )

51 19
032-850-6400

(Attachment) Consolidated Financial Statements

Celltrion Healthcare Co., Ltd. and its subsidiaries

15th

Period

From 1 January 2014


To
31 December 2014

14th Period
From 25 November 2013
To
31 December 2013

"Attached consolidated financial statements are


provided by the Group"
Celltrion Healthcare Co., Ltd. CEO Seo Jung-jin

Headquarters:

(Address) 19, Academy-ro 51beon-gil, Yeonsu-gu, Incheon, Korea


(Tel) 032-850-6400

10


15 2014 12 31
14 2013 12
31
( : )

15()

14()

I.
(1)

1,047,460,180,68

72,359,236,652

1. ( 13)

2,942,990,324

2. ( 13,14)

1,252,918,803

3. ( 8,9,13,14,22)

1,246,300,999,08

115,856,201,148
26,635,352,566
-

41,529,089,792

71,999,051,726

(487,212,705)

(90,533,132)

61,402,608

28,775,840

(16,382,040)

(16,382,040)

48,648,787

6,506,050

6.

344,346,688

426,022,727

7.

264,196,111

33,081,079

8,459,365,825

12,300,790,557

15,359,500

16,956,370

17,944,512,959

4,516,579,405

4. ( 13,14)

5. ( 13,14)

8.
9. ( 18)
10. ( 18)

1,173,941,762,43

(2) ( 4,21,22,25)

931,603,979,538

II.
(1)

40,312,471,368

24,927,014,396

3,810,101,406

1,933,659,422

1. ( 3)

2,000,000

2. ( 13,14)

269,537,359

3. ( 5)

3,810,101,406

1,662,122,063

(2) ( 6)

262,687,693

410,609,077

(3) ( 7)

119,379,873

136,364,852

36,120,302,396

22,446,381,045

(4)
1. ( 8,9,13,22)

47,012,784,000

28,250,381,000

(3,930,298,423)

(5,840,267,643)

(7,618,277,103)

6,045,708

5,000,000

2. ( 13)
3. ( 13,14)
4. ( 18)

708,302

650,048,214

30,559,386

11

Statement of Financial Position


15thPeriod December 31, 2014
14thPeriod December 31, 2013
Celltrion Healthcare Co., Ltd. and its subsidiaries
Subject

(Unit: KRW)
Period 15

Period 14

Assets
I. Working capital

1,246,300,999,083

1,047,460,180,686

(1) Current assets

72,359,236,652

115,856,201,148

1. Cash and cash equivalents (note 13)

2,942,990,324

26,635,352,566

2. Short-term loans (notes 13,14)

1,252,918,803

41,529,089,792

71,999,051,726

(487,212,705)

(90,533,132)

61,402,608

28,775,840

(16,382,040)

(16,382,040)

48,648,787

6,506,050

6. Advance payments

344,346,688

426,022,727

7. Prepaid expense

264,196,111

33,081,079

8,459,365,825

12,300,790,557

15,359,500

16,956,370

17,944,512,959

4,516,579,405

3. Trade receivables (notes


8,9,13,14,22)
Allowance for bad debts
4. Accounts receivable (notes 13,14)
Allowancefor bad debts
5. Accrued revenue (notes 13,14)

8. Value-added tax payment


9. Current tax assets (note 18)
10. Deferred tax assets (note 18)
(2) Inventories (notes 4,21,22,25)
II. Non-current assets
(1) Investment assets
1. Long-term investment securities (note
3)
2. Long-term loans (notes 13,14)
3. Equity method investment (note 5)

1,173,941,762,431

931,603,979,538

40,312,471,368

24,927,014,396

3,810,101,406

1,933,659,422

2,000,000

269,537,359

3,810,101,406

1,662,122,063

(2) Tangible assets (note 6)

262,687,693

410,609,077

(3) Intangible assets (note 7)

119,379,873

136,364,852

36,120,302,396

22,446,381,045

(4) Other non-current assets


1. Long-term trade receivables (note
s8,9,13,22)
Allowance for bad debts
Present value after discount
2. Cash deposit for lease (note 13)
3. Long-term accrued income (notes
13,14)
4. Deferred tax assets (note 18)

47,012,784,000

28,250,381,000

(3,930,298,423)

(5,840,267,643)
-

(7 618 277 103)


6,045,708

5,000,000

708,302

650,048,214

30,559,386
12

1,286,613,470,45

1,072,387,195,08

I.
1. ( 8,14,23)

755,918,268,368

358,117,965,046

327,200,000,000

332,600,000,000

(1,172,798,730)

(163,670,794)

2. ( 13,14,23)

17,405,453,626

3,961,258,355

3. ( 14,23)

16,884,188,403

12,461,689,409

186,116,091,114

9,201,095,815

4. ( 14,22)
5. ( 10,13,22,23)

10,992,000,000

1,087,414,488

57,592,261

7. ( 11,14,23)

90,000,000,000

13,084,031,250

(8,646,358,497)

8. ( 11,14,23)

90,000,000,000

13,084,031,250

(8,646,358,497)

8,530,573,961

6.

9. ( 18)
II.

283,575,409,857

454,601,358,925

1. ( 8,14,23)

60,000,000,000

(8,868,817,504)

2. ( 14,22)

84,634,946,645

3. ( 13,14)

7,079,700,000

4. ( 11,14,23)

208,340,000,000

90,000,000,000
-

224,108,136,515

13,084,031,250

(17,543,855,819)

(13,403,011,293)

5. ( 11,14,23)

90,000,000,000

13,084,031,250

(13,403,011,293)

6. ( 18)

1,064,619,031

1,039,493,678,22

812,719,323,971

I.

247,119,792,226

259,667,871,111

2,392,215,000

2,392,215,000

1. ( 15)

1,657,630,000

1,500,000,000

2. ( 15)

734,585,000

892,215,000

II.
1. ( 15)

304,251,371,953
290,078,862,896

293,092,240,680
290,078,862,896

13

Total assets

1,286,613,470,451

1,072,387,195,082

755,918,268,368

358,117,965,046

Liabilities
I. Current liabilities
1. Trade payable (notes 8,14,23)

327,200,000,000

332,600,000,000

Present value after discount

(1,172,798,730)

(163,670,794)

2. Accounts payable (notes 13,14,23)

17,405,453,626

3,961,258,355

3. Accrued expenses (notes 14,23)

16,884,188,403

12,461,689,409

4. Advance payment (notes 14,22)

186,116,091,114

9,201,095,815

10,992,000,000

1,087,414,488

57,592,261

7. Convertible bonds (notes 11,14,23)

90,000,000,000

Bond repayment premium

13,084,031,250

Adjustment of conversion rights


(8,646,358,497)
8. Bonds with attached warrants (notes
90,000,000,000
11,14,23)
Bond repayment premium
13,084,031,250

Adjustment of warrants

(8,646,358,497)

8,530,573,961

5. Short-term loans (notes


10,13,22,23)
6. Deposits

9. Current income tax liability (note 18)


II. Non-current liabilities

283,575,409,857

454,601,358,925

1. Long-term payable (notes 8,14,23)

60,000,000,000

Present value after discount

(8,868,817,504)

2. Long-term advance payments (notes


84,634,946,645
14,22)

224,108,136,515

3. Performance bonds (notes 13,14)

7,079,700,000

4. Convertible bonds (notes 11,14,23) 208,340,000,000

90,000,000,000

Bond repayment premium

13,084,031,250

(17,543,855,819)

(13,403,011,293)

5. Bonds with attached warrants (notes


11,14,23)

90,000,000,000

Bond repayment premium

13,084,031,250

Adjustment of warrants
6. Deferred income tax liabilities (note
18)

(13,403,011,293)

1,064,619,031

Adjustment of conversion rights

Total liability

1,039,493,678,225

812,719,323,971

247,119,792,226

259,667,871,111

2,392,215,000

2,392,215,000

Equity
Parent company shares
I. Capital
1. Ordinary shares (note 15)

1,657,630,000

1,500,000,000

2. Preferred shares (note 15)

734,585,000

892,215,000

II. Total capital surplus


1. Share premium (note 15)

304,251,371,953
290,078,862,896

293,092,240,680
290,078,862,896
14

2. ( 11)
3. ( 11)

12,665,820,165

1,506,688,892

1,506,688,892

1,506,688,892

III.
1. ( 15)
2. ( 17)

(53,024,885,909)
(59,368,782,893)

(59,368,782,893)

6,343,896,984

3,973,039,685

IV. ( 16)

17,038,403,398

1. ( 5)
2. ( 5)
3.

3,641,721

(380,381,744)

(205,492,460)

17,418,785,142

(23,537,312,216)

19,781,009,378

(23,537,312,216)

19,781,009,378
-

(201,850,739)

V.
1.

(55,395,743,208)

247,119,792,226

259,667,871,111

1,286,613,470,45

1,072,387,195,08

15

2. Consideration for conversion rights


(note 11)
3. Consideration for warrants (note 11)

12,665,820,165

1,506,688,892

1,506,688,892

1,506,688,892

III. Consolidated capital adjustment


1. Loss from capital reduction (note 15)
2. Stock options (note 17)

(53,024,885,909)
(59,368,782,893)

(59,368,782,89)

6,343,896,984

3,973,039,685

IV. Accumulated other comprehensive


income (note 16)
1. Equity method investment (note 5)
2. Negative equity method investment
(note 5)
3. Gain or loss on overseas operations
translation

17,038,403,398
3,641,721

(380,381,744)

(205,492,460)

17,418,785,142

(23,537,312,216)

(23,537,312,216)

Liability and shareholders equity

19,781,009,378
19,781,009,378

Non-controlling interests
Total equity

(201,850,739)

V. Accumulated retained earnings


1. Unappropriated retained earnings

(55,395,743,208)

247,119,792,226

259,667,871,111

1,286,613,470,451

1,072,387,195,082

See notes

16


15 2014 1 1 2014 12
31 14 2013 1 1 2013
12 31
( : )

15()

14()

I. ( 14,22,24)

166,953,093,555

145,287,553,714

II. ( 14,25)

88,182,522,817

77,651,241,763

III.

78,770,570,738

67,636,311,951

44,017,013,230

28,320,443,196

34,753,557,508

39,315,868,755

8,205,923,350

1,764,623,652

IV. (
6,7,9,12,14,17,21,26,27)
V.
VI.
1. ( 9,14)

2,386,573,785

2. ( 14)
3.

1,149,559,906
-

4,100,130

3,180,818

4.

1,405,232,610

5. ( 13)

4,410,065,743

152,123,638
218,549,882

6.

93,080,011

7. ( 14)

661,085

112,084,303

8.

209,309

35,125,782

VII.

36,166,518,458

14,782,719,774

1. ( 14)

30,558,835,166

2.

7,397,690

3. ( 7)

2,833,333

4.
5. ( 13)

3,493,914,554

8.

481,393,635

465,024,644

6.
7. ( 5)

12,046,025,250

814,416,216

118,378,404

1,638,508,320

1,322,414,215

4,751

92,054

VIII.

6,792,962,400

26,297,772,633

IX. ( 18)

3,354,735,570

7,014,835,505

X.

3,438,226,830

19,282,937,128

1.

3,438,226,830

19,282,937,128

2.

7,372

40,042

XI.
1. ( 19)

17

Consolidated Statement of Comprehensive Income


Period 15: From January 1 2014 to December 31 2014
Period 14: From January 1 2013 to December 31 2013
Celltrion Healthcare Co., Ltd. and its subsidiaries

(Unit: KRW)

Subject

Period 15

I. Revenue (notes 14,22,24)

Period 14

166,953,093,555

145,287,553,714

II. Cost of sales (notes 14,25)

88,182,522,817

77,651,241,763

III. Gross profit

78,770,570,738

67,636,311,951

IV. Sales and administrative expenses (notes


6,7,9,12,14,17,21,26,27)

44,017,013,230

28,320,443,196

V. Operating profit

34,753,557,508

39,315,868,755

VI. Operating income


1. Interest income (notes 9,14)

8,205,923,350

1,764,623,652

2,386,573,785

1,149,559,906

4,100,130

3,180,818

4. Currency arbitrage

1,405,232,610

152,123,638

5. Foreign currency translation gains (note 13)

4,410,065,743

218,549,882

93,080,011

7. Other service revenue (note 14)

661,085

112,084,303

8. Miscellaneous revenue

209,309

35,125,782

2. Dividend income (note 14)


3. Proceeds from disposal of tangible assets

6. Gains on disposal of trading securities

VII. Non-operating expenses


1. Interest expenses (note 14)

36,166,518,458

14,782,719,774

30,558,835,166

12,046,025,250

2. Loss on disposal of tangible assets

7,397,690

3. Impairment of intangible assets (note 7)

2,833,333

3,493,914,554

481,393,635

465,024,644

814,416,216

118,378,404

1,638,508,320

1,322,414,215

4,751

92,054

4. Loss on foreign currency transactions


5. Loss on foreign currency translation (note
13)
6. Loss on disposal of trading securities
7. Equity method loss (note 5)
8. Miscellaneous losses
VIII. Income before income tax

6,792,962,400

26,297,772,633

IX. Income tax expenses (note 18)

3,354,735,570

7,014,835,505

X. Net income

3,438,226,830

19,282,937,128

1. Parent company interest income


2. Non-controlling interests
XI. Earnings per share

3,438,226,830
-

19,282,937,128
-

7,372 KRW

40,042 KRW

1. Basic earnings per share (note 19)

See

notes
18


15 2014 1 1 2014 12
31 14 2013 1 1 2013
12 31
( : )

2013.1.1 ()

2,392,215,000

(57,440,550,211

290,078,862,896

498,072,250

- 235,528,599,935

2,044,807,003

2,044,807,003

1,506,688,892

1,506,688,892

1,506,688,892

1,506,688,892

3,641,721

3,641,721

(205,492,460)

(205,492,460)

19,282,937,128

19,282,937,128

(201,850,739)

19,781,009,378

- 259,667,871,111

(201,850,739)

19,781,009,378

- 259,667,871,111

2013.12.31 ()

2,392,215,000

293,092,240,680

2014.1.1 ()

2,392,215,000

293,092,240,680

(55,395,743,208
)
(55,395,743,208
)

(46,756,548,424

2,370,857,299

2,370,857,299

11,159,131,273

(174,889,284)

(174,889,284)

17,415,143,421

17,415,143,421

3,438,226,830

3,438,226,830

2014.12.31 ()

2,392,215,000

11,159,131,273

304,251,371,953

(53,024,885,909
)

17,038,403,398

(23,537,312,216
)

(46,756,548,424

- 247,119,792,226

19

Consolidated Statement of Change in Equity


Period 15: From January 1 2014 to December 31 2014
Period 14: From January 1 2013 to December 31 2013
Celltrion Healthcare Co., Ltd. and its subsidiaries
Subject
2013.1.1
(report
amount)

Accumulated
other
comprehensive

Capital
adjustment

Capital stock Capital surplus

2,392,215,000 290,078,862,896

(57,440,550,21)

- 2,044,807,003

(Unit: KRW)
Noncontrolling
Total
interests

Retained
earnings
-

498,072,250

- 235,528,599,935

2,044,807,003

Stock options

Consideration
right

1,506,688,892

1,506,688,892

Warrant

1,506,688,892

1,506,688,892

Equity
method
investment

3,641,721

3,641,721

Loss on
valuation of
equity
method

(205,492,460)

(205,492,460)

Net income

2013.12.31
(End of the
previous
period)

2,392,215,000 293,092,240,680

2014.1.1
(reported
amount)

2,392,215,000 293,092,240,680

(55,395,743,20)

(55,395,743,20)

- 19,282,937,128
(201,850,739) 19,781,009,378

(201,850,739) 19,781,009,378

- 19,282,937,128

259,667,871,111

- 259,667,871,111

Consolidation
scope
changes

Stock options

- 2,370,857,299

Conversion
right

- 11,159,131,273

- 11,159,131,273

Negative
equity
method
investment

(174,889,284)

Foreign
operations
translation
differences

- 17,415,143,421

- 17,415,143,421

Net income

2014.12.31
(Current
period
ending)

2,392,215,000 304,251,371,953

(53,024,885,90)

17,038,403,398

(46,756,548,424)

- (46,756,548,42)

3,438,226,830

(23,537,312,216)

2,370,857,299

(174,889,284)

3,438,226,830

247,119,792,226

See notes
20


15 2014 1 1 2014 12
31 14 2013 1 1 2013
12 31
( : )

15()

I.
1.

14()

(248,897,567,440

(150,077,779,106

3,438,226,830

19,282,937,128

25,555,651,144

16,604,275,107

492,683,960

574,599,791

156,311,977

158,410,844

35,304,966

21,837,623

126,442,075

5,126,935,230

464,389,163

813,421,810

118,378,404

7,397,690

2,833,333

2.

1,638,508,320

1,322,414,215

2,370,857,299

2,044,807,003

( )

20,260,922,361

6,423,470,187

3.

(6,216,572,966)

(1,307,921,780)

4,402,283,123

171,548,323

93,080,011

3,180,818

( )
4.

1,811,109,025

1,043,293,446

(271,674,872,448

(184,657,069,561

(32,042,229,979)

16,008,487,492

()

(32,446,638)

4,002,042

()

(13,457,730)

15,588,554

(47,498,238)

(117,099,063)

(231,115,032)

(16,966,632)

()

3,843,278,940

(5,064,029,416)

()

21

Consolidated Statement of Cash Flows


Period15: from 1 January 2014 to 31 December 2014
Period14: from 1 January 2013 to 31 December 2013
Celltrion Healthcare Co., Ltd. and its subsidiaries
Subject

(Unit: KRW)
Period 15 (present)

I. Cash flow from operating activities


1. Net profit

Period 14 (previous)
(150,077,779,106)

(248,897,567,440)
3,438,226,830

19,282,937,128

25,555,651,144

16,604,275,107

Retirement benefits

492,683,960

574,599,791

Depreciation

156,311,977

158,410,844

Amortization

35,304,966

21,837,623

Bad debts

126,442,075

5,126,935,230

Foreign currency exchange loss

464,389,163

813,421,810

118,378,404

Loss on disposal of tangible assets

7,397,690

Impairment of intangible assets

2,833,333

Loss on equity method investment

1,638,508,320

1,322,414,215

Shares compensation

2. Expenses occured without cash


flows

Loss on disposal of trading securities

2,370,857,299

2,044,807,003

Interest expenses (current value


discount amortization)

20,260,922,361

6,423,470,187

3. Earnings reduction without cash


flows

(6,216,572,966)

(1,307,921,780)

4,402,283,123

171,548,323

93,080,011

3,180,818

1,811,109,025

1,043,293,446

4. Changes in assets and liabilities from


(271,674,872,448)
operating activities

(184,657,069,561)

Gains on foreign currency exchange


Gains on trading securites
Gains on disposal of tangible assets
Interest income (present value
discount amortization)

Decrease (increase) in trade


receivables
Decrease (increase) in account
receivables
Decrease (increase) in accrued income

(32,042,229,979)

16,008,487,492

(32,446,638)

4,002,042

(13,457,730)

15,588,554

Increase in advance payments

(47,498,238)

(117,099,063)

Increase in prepaid expenses

(231,115,032)

(16,966,632)

Decreases (increases) in value-added


tax

3,843,278,940

(5,064,029,416)

22


()

584,950

248,492,534

(3,155,698,259)

6,993,157,405

(180,661,331,253

(252,756,269,122

(28,139,463)

(714,244)

(65,400,000,000)

(34,993,390,314)

12,918,646,913

(305,807,071)

4,408,488,880

4,431,082,566

8,495,905,871

617,309,027

(573,571)

76,235,236,819

9,201,095,815




()

()

()

21,139,290,759

(100,669,564,534

51,131,182,496

7,077,900,000

(2,498,058,762)

(492,683,960)

(574,599,791)

II.

3,211,423,267

1.

20,345,619,459

12,150,000,000

7,353,721,010
8,704,177,462
-

8,167,988,705

360,000,000

1,882

3,305,818

4,978,875

171,208,000

2,000,000

8,190,313,641





2.

(17,134,196,192)

(1,350,456,452)

12,150,000,000

3,941,883,147

961,311,675

15,029,612

9,787,272

21,166,299

109,027,475

593,835

1,005,523,299

270,330,030

III.
1.

219,044,940,000

150,000,000,000

220,498,557,000

219,700,000,000

12,158,557,000

39,700,000,000

208,340,000,000

90,000,000,000

23

Decrease in current income tax assets

584,950

248,492,534

(3,155,698,259)

6,993,157,405

(180,661,331,253)
(28,139,463)

=(252,756,269,12
2)
(714,244)

(65,400,000,000)

(34,993,390,314)

12,918,646,913

(305,807,071)

Increase in accrued expenses

4,408,488,880

4,431,082,566

Increase in current tax liabilities

8,495,905,871

Increase (decrease) in deposits

617,309,027

(573,571)

76,235,236,819

9,201,095,815

(100,669,564,534)

21,139,290,759

51,131,182,496

7,077,900,000

(2,498,058,762)

(492,683,960)

(574,599,791)

Decrease (increase) in deferred tax


assets
Increase of inventories
Increase of long-term accrued income
Decrease in trade payables
Increase (decrease) in account payable

Increase in advance payments


Increase (decrease) in long-term
advance payments
Increase in long-term payable
Increase in performance bonds
Decrease in deferred tax liabilities
Payment of severance
II. Cash flow from investing activities

3,211,423,267

7,353,721,010

1. Cash inflows from investing activities

20,345,619,459

8,704,177,462

Decrease in short-term loans

12,150,000,000

Disposal of trading securities

8,167,988,705

Disposal of current assets

360,000,000

Disposal of shares based on equity


method investment

1,882

3,305,818

4,978,875

171,208,000

2,000,000

8,190,313,641

(17,134,196,192)

(1,350,456,452)

12,150,000,000

3,941,883,147

961,311,675

Acquisition of tangible assets

15,029,612

9,787,272

Acquisition of intangible assets

21,166,299

109,027,475

593,835

1,005,523,299

270,330,030

Disposal of tangible assets


Reduction of rent deposit
Disposal of long-term investment
assets
Net Cash flow from corporate
acquisition
2. Cash outflows from investing
activities
Increase in short-term loans
Acquisition based on equity method
investment

Increase in leasehold deposit


Increase in long-term loans
III. Cash flow from financing activities
1. Cash inflow from financing activities
Increase in short-term loans
Issuance of convertible bonds

219,044,940,000

150,000,000,000

220,498,557,000

219,700,000,000

12,158,557,000

39,700,000,000

208,340,000,000

90,000,000,000

24


2.

IV. ()(++)
V.

90,000,000,000

(1,453,617,000)

(69,700,000,000)

1,453,617,000

69,700,000,000
(26,641,204,173)

7,275,941,904

26,635,352,566

19,359,410,662

VI.

2,948,841,931

VII.

2,942,990,324

26,635,352,566

25

Issuance of bond warrants


2. Cash outflow from financing
activities
Decrease in short-term loans

90,000,000,000

(1,453,617,000)

(69,700,000,000)

1,453,617,000

69,700,000,000

IV. Increase (decrease) in cash


(I+II+III)

(26,641,204,173)

7,275,941,904

26,635,352,566

19,359,410,662

VI. Changes in cash and cash


equivalents arising from changes in
exchange rate

2,948,841,931

VII. Cash at ending balance

2,942,990,324

26,635,352,566

V. Cash basis

See notes

26


15 2014 1 1 2014 12 31
14 2013 1 1 2013 12 31

1.
(1)
( "") 1999 12 29
, ,
.
2010 11 25
.
1,657,630 , 734,585 ,
.

ONE EQUITY PARTNERS IV,L.P.


ION INVESTMENT B.V.
OEP PARTNERS CO-INVEST,
L.P.

()

257,663

53.85%

106,809

22.33%

15,763

36,837

3.29%

7.70%

3,271

0.68%

58,100

12.15%

331,526

146,917

69.29%

30.71%

27

Notes to Financial Statements


Period 15: from 1 January 2014 to 31 December 2014
Period 14: from 1 January 2013 to 31 December 2013
Celltrion Healthcare Co., Ltd. and its subsidiaries
1.

Overview of the Group and its Subsidiaries

(1) Overview of the parent company


The parent company, Celltrion Healthcare (referred to as the parent company), was established on December 29,
1999. Its main business is the manufacturing, processing and selling of pharmaceuticals. The head office is
located on Academy Street, Yeonsu-gu, Incheon, Korea
On November 25, 2010, the parent company split its investment department in accordance with the new spinoff
law into a new legal entity, Celltrion Holdings.
At the end of the audit report date, equity capital includes ordinary shares of 1,657,630,000 KRW and Preferred
shares of 734,585,000,000 KRW. The main contents are as follows:

Names of shareholders
Seo Jung-jin
ONE EQUITY PARTNERS IV, L.P.
ION INVESTMENT B.V.
OEP PARTNERS CO-INVEST, L.P.
Other shareholders
Total

Owned shares (shares)


Common shares

Ownership (%)

Preferred shares

Common shares

Preferred shares

257,663

53.85%

106,809

22.33%

15,763

36,837

3.29%

7.70%

3,271

0.68%

58,100

12.15%

331,526

146,917

69.29%

30.71%

28

(2)
.
( : )

Celltrion Healthcare Hungary,

93,826

Kft.

100.00%

Hungary

12

(3) .

Celltrion Healthcare Hungary,


Kft.

100
100

(4)
( : )


Celltrion Healthcare Hungary,
Kft.

1,203,418,054

909,805,293

293,612,761

196,416,480

20,601,641

131,908,950

134,738,959

(2,830,009)

(3,577,271)

2.
2015 3 11 , 2015 3
27 .
2011 1 1
. ' '
.
2013 12 31
,
.

29

(2) Overview of consolidated subsidiaries


As of the end of reporting period, the invested amount and shareholding ratio of the consolidated subsidiaries are
as follows:
(Unit: KRW 000)
Company name

Investment amount Ownership

Celltrion Healthcare Hungary, Kft.

93,826

100.00%

Location

Closing date

Industry

Hungary

12 months

Drug retail and


wholesale

(3) The new consolidated subsidiaries in the current accounting period are as follows:
Company name

Reasons

By the end of the previous period, the total assets of the Group were below
KRW 10 BN, thus the group was excluded from the subsidiaries. By the end
Celltrion Healthcare Hungary, Kft.
of this period, the total asset of the group was above KRW 10 BN, and was
thus included in the listing of subsidiaries.
(4) Main financial data of the parent company and its subsidiaries
(Unit: KRW 000)
Company name

Total assets

Liabilities

Net assets

Revenue

Celltrion Healthcare Co., Ltd.

1,203,418,054

909,805,293

293,612,761

196,416,480

Celltrion Healthcare Hungary,


Kft.

131,908,950

134,738,959

(2,830,009)

2.

Net income

20,601,641
(3,577,271)

Standards of financial statement and significant accounting policies

The consolidated financial statements were authorized to be issued on March 11, 2015 and are expected to be
approved on the shareholders meeting on March 27, 2015. General accounting standards were applied to the
financial statements of the Group since January 1, 2011.
General accounting standards are applicable to the companies which adopt the External Audit Law but without
the K-IFRS accounting treatment.
At the end of December 31, 2013, the financial statement of the parent company does not include the
subsidiaries. For comparison, the financial statements of the subsidiary are attached at the end of the
consolidated financial statements of this period.
The main principals of the accounting policies applied for the consolidated financial statements are as follows:

30

.
(1)
1)

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2)

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31

(1) Basis of consolidated financial statements


1) The elimination of the investment account and the capital account
At the end of the accounting period, the investment account of the parent company and the corresponding
capital of the subsidiary should be eliminated on the basis of fair value acquisition date.
2) Treatment of the difference in consolidation
The investment account of the parent Company and the corresponding capital account of the subsidiary should
be deducted on the basis of the fair value at acquisition date. From the acquisition date to now, the difference
between the parent companys ownership of the fair value of subsidiarys assets & liabilities and the investment
amount of the parent company is recognized as the non-operating profit or negative goodwill. In the first 5
years after acquisition, the goodwill should be amortized by straight-line method in every accounting period
and recognized as current profit or loss.
3) The elimination of internal unrealized gain or loss.
Due to the internal transactions, the receivables, payables and profit and loss were all eliminated between
groups. The inventories, non-current asset and other products including unrealized profits were deducted with
the calculation of average profit margin in the consolidated financial statements.
On the other hand, the unrealized profits caused by parent Company sold products to the subsidiary should be
deducted. If subsidiary sold goods to the parent or other companies, all the unrealized profits should be
deducted and allocated between the parent and subsidiary in accordance with the proportion of equity.
4)

Non-controlling interest

The remaining subsidiaries equity, which is not held by the parent Company, is recognized as non-controlling
interest.

32

5)
2014 12 31
. 2014
12 31 .
(2)
,

( ) 3
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(3)
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33

5)

Date basis of the consolidated financial statements

The consolidated financial statements were provided based on the parent companys settlement day, which is
December 31, 2014. The settlement date of subsidiaries is the same as the parent companys and the report
uses the financial statements on December 31, 2014.

(2) Cash and cash equivalents


Currency substitute securities including checks issued by others' checking accounts, bank deposits and part of
the short-term investment are recognized as cash and cash equivalents. Notably, the securities and short term
financial products, which can be easily converted to cash without large transaction costs and have a relatively
stable value under the change of interest rates, are recognized as cash and cash equivalents if the contract
period (repayment period) is less than three months.
(3) Allowance for bad debts
The group separately analyzed the recovery possibility of the bonds, loans and trade receivables before the
report termination date, and set estimated loan loss as reserves for bad debt according to previous experience
of loan loss prediction
(4) Inventories
The Group uses the moving average method to assess the inventories by acquisition cost, except for the
unarrived segment. The quantities and amounts of inventories are calculated by the perpetual inventory
method. Inventory examinations are conducted and modifications are recorded at the end of the period.
In addition, as of the end of the reporting period, if the market value of the inventories is lower than the
acquisition cost, inventories should be stated at the market value. The inventories are stated by the low cost
method, the lower amount between the cost and net realizable value (NRV) is listed, and this revaluation loss
should be added in the cost of sales.

On the other hand, the amount of any reversal of any write-down of inventories, arising from an increase in
net realizable value, should be reversed to the previous allowance account within the scope of the initial
amount. This write-downs of revaluation loss is eliminated from the cost of sales.

34

(5) ( )

(
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, ,
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, .
.
1)

(
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2)


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35

(5) Securities (excluding equity method investments)


On the initial recognition of the marketable securities, the market value of the securities plus the transaction cost
should be recognized as the fair value of the securities (excluding the short-term securities which take the
changes of fair value as current gain or loss after initial recognition).
In addition, securities can be classified as short-term trading securities, held-to-maturity securities, or availablefor-sale securities based on the aims and properties. On the other hand, the cost of different securities is
determined by specific methods on the initial recognition. The Group uses identification methods to identify the
prices of securities and uses the moving average method to measure the held securities.
Details of the accounting treatments applicable to different types of securities are as follows

1)

Short-term trading securities

The marketable securities that the Group buys and sells frequently in order to acquire short-term trading
differences are recognized as short-term trading securities (include trading securities aimed for short-term profit).
The short-term trading securities are valued at a fair value. During the evaluation, the unrealized valuation
reserves should be added to or deducted from the trading securities valuation gains (losses) account and
recognized as non-operating income.
2)

Held-to-maturity securities

The held-to-maturity securities are non-derivative financial assets that have either fixed or determinable
payments and a fixed maturity, which the Group Company has both the ability and the intention to hold to its
maturity.
However, if the time to maturity is within one year, held-to-maturity securities are classified as current assets.
The value of held-to-maturity securities based on the amortization cost method will be recognized in the financial
statement. The differences between the book value and the par value should be amortized based on the
effective interest method. The amortized difference will be added or subtracted from the acquisition cost and
interest income.
3)

Available-for-sale securities

The Group classifies the securities, which are not classified as short-term trading securities or held-to-maturity
securities, into available-for-sale securities. However, the available-for-sale securities to be disposed in one year
from the reporting date are classified as current assets.
The Group recognizes the fair value of available-for-sale securities in the financial statement. The unrealized
gains and losses of available-for-sale securities are presented in the available-for-sale securities valuation subject
and recognized as other comprehensive income. The accumulated profit or loss of the available-for-sale
securities will be recognized as the available-for-sale securities disposal profit or loss after disposal, or
recognized as accumulated impairment loss. However, when the fair value of non-marketable equity security, as
a part of available-for-sales securities, cannot be measured, the value shall be measured by the acquisition cost.

36

4)



( ) . ,
,
(
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5)

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37

4)

Securities Impairment

The Group assesses the occurrence of impairment loss at each deadline of the report. If the recoverable
amount of the security is less than the acquisition cost of the equity securities or the amortized cost of the debt
securities, the impairment loss of the held-to-maturity securities (or available-for-sale securities) is classified as
non-operating expenses. If the recovery of the impairment is objectively related to an event occurring after the
recording of the impairment loss, the reversal amount of the held-to-maturity or available-for-sale securities
shall be classified as the impairment loss reversals and be recorded in the account of non-operating income.
If the book amount after recovery does not exceed the original amount of the amortized cost, it should not be
recorded in the current restoration (in the case of available-for-sale securities is the acquisition cost).
And the fair value of the available-for-sale securities should be extended based on the impairment loss recorded
previously and the recovered amount should be classified as the impairment loss reversal and recorded in nonoperating income.
5)

Reclassification of securities

Short-term trading securities cannot be classified to the securities subject, and other securities subjects cannot
be reclassified to the short-term trading securities. But there are rare circumstances in which the short-term
trading securities can be classified as available-for-sale securities.
When reclassified the short-term trading securities as available-for-sale securities or held-to-maturity securities,
the fair value from the reclassified date can be recorded as the new acquisition cost, and the unrecorded gains
and losses until the reclassified date should be recorded in the current period.
(6) Equity method investments
The Group has evaluated the equity investments of the investee companies which have significant influences
(hereinafter referred to as "investee companies") using the equity method.
1) Accounting treatment for change of shares
When using the equity method, the amount of the Group's shareholding in net assets change of the investee
company (hereinafter referred to as "movements in equity"), can be treated as the source of fluctuations in net
asset value of the investee companies.
Besides,
fluctuations arising from the net profit (loss) of investee companies at the current period are classified into
the subject of profit (loss) and recorded as operating income (expense);
fluctuations arising from the retained earnings of investee companies at the last period are classified into
the subject of retained earning changes and recorded as retained earnings at the last period;
fluctuations arising from both increases and decreases in capital surplus, excluding the net profit (loss) at
the current period and retained earnings at the last period of investee companies, are classified into the
subject of stock right transfer and recorded as other comprehensive income.

38

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3)



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39

However, under the equity method, if the investees changes of retained earnings carried forward arising from
corrections of significant accounting errors do not have a significant impact on the Groups consolidated financial
statements, changes in long-term equity investment should be classified into the subject of investment income
(loss), treated as non-operating income. If the accounting policies in the investee company change, the impact of
movements in accounting policies, accounting estimations and corrections of errors on long-term equity
investments should be reflected in the accumulated retained earnings carried forward subject according to the
Accounting Standards.
On the other hand, when the investee determines to distribute its dividends, in terms of distribution resolution,
the dividends receivables of the Group should be subtracted directly from the book value of long-term equity
investment.
2) Accounting treatment for investment difference
Using the equity method, when the Group obtains long-term equity investment, the difference between the
initial investment cost of long-term equity investment and the fair value of the holding shares of identifiable net
assets of the invested unit (the following abbreviations "Investment difference") can be seen as goodwill. The
accounting treatment for the goodwill is based on the accounting standards which are related to equity
combination. Therefore, the goodwill should be amortized in 20 years according to a rational and systematic
method. The recoverable amount of it should be assessed at each balance sheet date, so as to determine the
impairment loss. The goodwill cannot be restored after impairment.
When the difference occurs at the time of acquisition, it should be confirmed as current profit or loss at the date
it was obtained.
In addition, if the invested company increases its capital (including paid capital reduction, unpaid capital increase,
free capital reduction referred to as "paid capital increase") under the equity method, when the Group
increases its shareholdings, the change of capital should be recognized as a capital change. Otherwise, if its
stake decreases, the difference between the changes in capital should be confirmed as gains or losses on
disposal of assets. However, in case the investee companies are subsidiaries of the investing company under the
equity method, changes in long-term equity investment due to paid capital increase should be treated as capital
reserves (capital adjustment).
3) Accounting treatment under the equity method for the difference between fair value of net assets of
investee companies and book value
Under the equity method, when the investing company obtains the long-term equity investment, the difference
between fair value of net assets of investee companies and book value, which belongs to the Group company
proportionately, should be depreciated and reversed in proper methods of investee company and reflected in
current gains or losses under the equity method.

40

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41

4) The deduction of unrealized gains and losses from internal transactions


Under the equity method, the obtained amount of the Group companys stake ratio multiplied by gains and
losses from internal transactions between the Group company and the invested company, from the balance
sheet date to the present, should be reflected in the book value of goods and seen as the group company's
unrealized gains and losses. Under these circumstances, unrealized gains and losses should be deducted from
the long-term equity investment income.
However, in the case where the investee company is one of the subsidiaries of the Group company, the
unrealized profits, which are generated from the transaction of assets sales (downstream sales) between the
Group and its subsidiaries, should be removed in full.
5) Consistency of accounting policies
For the same or similar transactions and events, the accounting policies of related enterprises and the Group
company's accounting policies should be consistent. Therefore, the financial statements should be revised
properly and apply the equity method. However, if The Group and related enterprises apply to affiliated
subsidiaries accounting treatment exception and K-IFRS (Including International Accounting Standards), the
financial statements do not need modification even if the accounting policies are inconsistent.
6) Consistency of net assets of subsidiaries
Under the equity method, when the investee is a subsidiary, the balance of investment account becomes "0". In
the accounting treatment, if the equity method is not applied, the net profits and net assets in the individual
financial statements of the parent company should be consistent with net profits and net assets in the parent
company's consolidated financial statements proportionally.
7) Impairment of long-term equity investment under the equity method
If there is objective evidence that the recoverable amount of long-term equity investment is lower than the book
value, the long-term equity investments have been impaired and the impairment loss is reflected in operating
expenses (impairment loss of long-term equity investment under the equity method).
When confirming the impairment loss of the long-term equity investment under the equity method, if there is
unamortized investment difference, the investment difference should be deducted first. On the other hand,
after the recognition of the impairment loss, if the long-term equity investment could be recovered, the
recovered amount should be less the impairment loss that previously recognized. The recovered amount
should be recognized as current profit or loss. But after the reversal, the book value of long-term equity
investment should not exceed the previous carrying value before the impairment. However, the impairment
loss belonged to the investment difference balance is not allowed to be turned back.
8) Overseas business
In order to incorporate the offshore companies annual reports by the equity method, The Group should convert
the balance sheet items of the foreign enterprises with the exchange rate at the end of the reporting period, and
convert the income and items in the income statement with the exchange rate on the trading date (or average
rates). After the translation, the balance of foreign currency translation should be reflected under the "Other
comprehensive income" account on the balance sheet.

42

(7)
(

) , , ,
. ,
,
,

.

,

. , .
(
)
. .


5
5~7

43

(7) Tangible assets


The Group recognized the acquisition costs (acquisition costs consist of purchase costs, production costs and so
on, which are planned by the relevant board. If there are discounts on purchases, the amount of the discounts
should be deducted) as the initial cost of tangible assets. The initial cost of some tangible assets which are
obtained by physical investments, donations and by other free means are their fair values. The initial cost of
assets acquired through non-monetary asset exchange is calculated in accordance with the fair value of received
assets. If the fair value of the received asset is uncertain, its initial cost can be calculated by the fair value of the
surrendered assets.
The Group recognizes tangible assets as capital expenditure when it can bring an influx of economic benefits in
the future and its cost can be measured reliably. Under appropriate circumstances, for the asset replacement,
the replaced assets should be removed from the balance sheet. At the same time, maintenance costs are
recognized as a current profit or loss.
Depreciation on tangible assets is recorded by the straight-line method in accordance with asset-specific useful
lives below (the location and condition necessary for such an asset are in a manner that management intended)
when the assets are available. For each period, the depreciations are recognized as selling or administrative
expenses.
Division

Estimated Useful Lives

Vehicles

5 years

Equipment

5~7years

44

(8) ( )
(
)
.
() 5
, .
(9)
, ,
.


. ,
(
)
.
,

.

(
)
.
( )
( )
,
, (0) .

45

(8) Intangible assets (goodwill exclusive)


When the Group acquired intangible assets alone, the acquisition cost (purchase price and the spending which
turns the intangible asset into the intended conditions for use) should be recognized as the initial book value.
Intangible assets (software) are amortized over five years by the straight-line method. The book value is
presented as the balance after accumulated amortization. Amortization of intangible assets is recognized as
administrative expenses and selling expenses.
(9) Impairment of Assets
Intangible assets (software) are amortized over five years by the straight-line amortization method, taking book
balance which is deducted by accumulated amortization as book value. Amortization of intangible assets is
recognized as administrative expenses and selling expenses.
Moreover, whether there are signs of impairment, tests for impairment should be conducted towards the unused
intangible assets and assets which are waiting for disposal at each end of the reporting period.
The Group estimates the recoverable amount for individual assets. If it is not possible to estimate the
recoverable amount of the individual asset, then the recoverable amount is determined by the cash-generating
unit (the smallest identifiable asset class that is independent and able to generate cash inflows) to which the
asset belongs. If the recoverable amount of the cash-generating unit is less than its carrying amount, an
impairment loss should be recognized. The impairment loss shall be allocated to reduce the carrying amount of
the assets of the unit (group of units) in the following order: (a) first, to reduce the carrying amount of any
goodwill allocated to the cash-generating unit (group of units); and (b) then, to the other assets of the unit
(group of units) pro rata on the basis of the carrying amount of each asset in the unit (group of units). However,
an entity shall not reduce the carrying amount of an asset below the highest of: (a) its fair value less costs to
sell (if determinable); (b) its value in use (if determinable); and (c) zero

46

(10)
,

.
( ) ,
( ) .
,
( )

.
(11)
,
,

.
(12)
1)

.
2)
()
. ,
.

,
.
,
. ,
.

47

(10) Long-term payables


Long-term payables include the extended payment transactions, long-term loan transactions or other similar
transactions which have a relationship of debt and credit. The cost of acquisition assets should be recognized
with the present value of its extended payment because of the large difference between the nominal value and
the fair value, which has the financing substance. The difference between actual payment and the purchasing
price (unrecognized finance cost), should be amortized by the actual interest rate. However, loans which have
specific usage purposes (such as the entity offering a housing fund loan with low or no interest to its
employees, the loan would be limited in use or required to be repaid in rules) or lease deposits, are not
included in this scope.
(11) Debts reconstruction
According to the agreement between the debtor and the creditor or the court procedure, under the condition of
creditors in the event of financial difficulties, the difference between the book value of original debt and the
debt after agreement should be recognized as non-operating income (debt restructuring gains) or nonoperating expenses (debt restructuring loss).
(12) Foreign currency exchange rate effects
1) Functional currency and presentation currency
KRW is the main currency used in operating activities and used in financial statements.
2) Foreign exchange trading
For the transactions accomplished not in functional currency, the Group shall use the exchange rate at the date
of transaction. Non-monetary foreign currency items measured at historical cost are translated with the
exchange rate at the date of the transaction. And non-monetary items measured at fair value are translated at
the exchange rate at the fair value determined date. If the gain or loss of non-monetary item is recognized as
other accumulated comprehensive income, the exchange rate fluctuation effect contained in the profit or loss
shall be also recognized as other accumulated comprehensive income. When the gain or loss of non-monetary
items is recognized, the exchange rate fluctuation shall also be recognized as a current profit or loss.
In addition, monetary foreign currency assets and liabilities are translated with the exchange rate at the end of
the reporting period. The profit and loss arising from foreign exchange is recognized as profit or loss in the
current period. However, in the case of available-for-sale debt securities in foreign currency, the same amount
is recognized in other accumulated comprehensive income.

48

3)

.
,
,

.

,
.
4)



.
(13)
,
.
.
(14)


.

.
3

.

49

3) Foreign operations
If the functional currency of the foreign operation is different from the presentation currency of the Group, the
translation from functional currency into the presentation currency of the financial statement and income
statement are as follows:
The assets and liabilities in financial statements are translated at the exchange rate at the reporting date.
The revenues and expenses in income statement are translated at the exchange rate of the
transaction date. Exchange differences arising from translation are recognized in financial statement as other
comprehensive income. The other comprehensive income on the disposal of overseas companies is reclassified
as current profit or loss.
The goodwill and the differences between the book value and fair value of assets and liabilities that are
generated from the acquisition of overseas companies are recognized in assets and liabilities of overseas
companies and translated at the exchange rate of the reporting date of financial statements.
4) Translation of overseas net investment
The monetary items obtained from or paid to the foreign operations, which will not be settled or cannot be
settled, are classified as part of the net investment of foreign operations.
The relevant foreign currency differences are recognized as net profit of the current period in the foreign
operation financial statement.
(13) Retirement benefit liabilities
The parent company conducts a defined contribution plan. It should contribute a certain amount of money,
regardless of the operating results. During the accounting year, the amount should be identified as paid
retirement benefits.
(14) Provisions
When the Group has a present obligation (legal or constructive) as a result of a past transaction or event
which must be confirmed by the occurrence of an uncertain event in the future, if it is likely that an outflow of
resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be
made of the amount of the obligation, it should be recognized as a provision. If these conditions are not met,
no provision shall be recognized.
When it is certain that there is reimbursement from a third party, the amount of reimbursement is recognized
as separate assets. In this situation, the amount of earnings from the reimbursement is set off with the
calculated expenses on the income statement in accordance with the recognition of provisions.

50

(15)

.
,
.
.
, .

(16)
,
.
,

,
, .

, ,
.


.
(17)

,
,

.
() ()
() () ,


,

.
51

(15) Convertible bonds and warrants bonds


The value of the issue price of bonds generally deducting the liability component is recognized as conversion
present value. The liability component is amortized in accordance with the effective interest rate method. The
initial recognition of the equity component is not changed.
For the convertible bonds and bonds with warrants, the liability component and the equity component should be
accounting treated separately. The liability component should be generally recognized with its fair value without
conversion rights or warrants. The fair value of the bonds is generally the present value of future cash flows.
The issue price of general bonds deducting the value of liability component, is recognized as the value of
conversion rights or warrants, included in other equity instruments subject. The liability component is amortized
in accordance with the effective interest rate method. The equity component cannot change once the initial
recognition is done.
(16) Revenue recognition
Income is equal the amount of product sales and provision of services, deducting sales allowances, discounts
and sales returns.
The income is recognized when the significant risks and rewards of ownership of the goods have been
transferred to the buyer, not retaining continuing managerial involvement associated with the ownership, the
amount of revenue can be measured reliably, relevant economic benefits are likely to flow into the Group, it has
been associated with the occurrence of the cost can be measured reliably.
The income generated from services should be recognized by the percentage of completion method when the
transaction can be reliably forecast.
When the Group is an agent of the supplier to a transaction, rather than a party to the transaction, the amount
of fees charged from customer after deducting the amount to be paid to the actual supplier of the goods or
services is recognized as revenue.
(17) Income tax accounting
The Group may have temporary differences, which generated deferred tax assets and deferred tax liabilities,
due to differences between book value of assets and liabilities and the tax base. If these temporary differences
dont belong to the income tax accounting standards in exceptional items, it should be recognized in full. When
the deductible temporary differences are likely to have the effect of tax-deductible in future periods, it should
be recognized as deferred tax assets.
Deferred tax assets (liabilities) in accordance with the classification criteria for assets (liabilities) project, are
divided into current assets (current liabilities) or non-current assets (non-current liabilities) on the statement of
financial position. According to the tax, the deferred tax assets can be recognized as the early loss. Therefore,
deferred tax assets and deferred tax liabilities which are unrelated to the assets or liabilities items on the balance
sheet can be divided into current items and non-current items in accordance with the expected the
disappearance time of temporary differences. When the classification of deferred tax assets and deferred tax
liabilities in liquidity are related to the provisions of tax authorities, the Group should fully communicate with the
tax authorities.

52

, ()
, ()
( ) ()
.
(
) .
(18)
,
(
) .

() .


.
(19)

, ,
. , , ,
.
.

53

Current income tax and deferred income tax are recorded as income tax payable in income statement. In this
case, the amount (income tax payable or tax refund) recognized in the period is treated as the current income
tax expenses (corporate income tax credit), included in income tax expenses. The current or early periods
temporary differences which can be directly recongnized as owner's equity or goodwill can be directly
subtracted.
(18) Share-based compensation
The Group grants stock options or shares to employees and others who provide similar services. The
compensatory payments based on the shares should be recorded as the fair value of the compensation cost
and capital adjustment. If the fair value of the goods or service cannot be reliably measured, then use the fair
value of the share based compensation in accounting treatment as compensation cost of capital (capital
adjustment). If the conditions of the equity instruments granted are very complex and cannot be reliably
measured at fair value on the measurement date, the estimates are changed to measure the intrinsic value of
the vested equity instruments based on its quantity.
(19) Application of Estimation
In accordance with the General Accounting Standards of the Republic of Korea, the Group established the
financial statement with respect to the amount of assets and liabilities as well as the disclosure of the liabilities.
The Group also made a number of reasonable estimates and assumptions with respect to the measurement of
revenues and costs. This includes the valuation of the book value of tangible assets, traded bonds, inventories,
deferred income tax assets, etc. Actual amounts may differ from these assessments, and there is a possibility
that these assessments will be adjusted accordingly.

54

3.
.
( : )


2,000

4.
.
( : )


1,173,941,762

931,603,980


1,173,941,762

931,603,980

()

234,653,939
( 22 )

55

3.

Use of restricted deposits

So far from the end of the accounting period, the details related to the use-restricted deposits of the Group are as
follows.
(Unit: KRW 000)
Accounts

Current Period

Last Period

Restriction content

Long-term investment securities

2,000

Current account deposit

4. Evaluation of inventories
So far from the end of the accounting period, the inventory valuation of the Group, based on the net realizable
method, is as follows.
(Unit: KRW 000)
Subject
Commodity

Acquisition cost
Current Period
1,173,941,762

Last Period

Losses (losses reversed)


Current Period

931,603,980 1,173,941,762

Last Period
931,603,980

Current Period

Last Period

So far from the end of the accounting period, the carrying amount of the Group's products is 234,653,939,000
KRW, consisting of convertible bonds and security deposits (see note 22)

56

5.
.
(1)

()

( : )

Celltrion Healthcare India Privated Limited(*1)(*2)


Celltrion Healthcare ILAC SANAYI TICARET LIMITED
SIRKETI(*3)
Celltrion Healthcare Philippines Inc.(*3)

4,998

99.96%

12,240

521

12,240

135,099

100.00%

12

3,403,719

2,913,217

2,821,454

84,995

99.99%

12

227,392

59,084

50,441

Celltrion Healthcare Malaysia SDN BHD(*1)

105,889

100.00%

12

39,119

1,875

39,119

Celltrion Healthcare Hong Kong Limited(*1)

746,895

100.00%

12

105,531

52,272

105,531

Celltrion Healthcare (Thailand) Co., Ltd.(*1)

599,997

100.00%

12

107,999

(88,059)

107,999

3,609,095

100.00%

12

2,673,907

(464,636)

177,437

200,000

100.00%

12

178,945

129,288

178,945

4,880

99.98%

12

213,686

29,498

213,686

Celltrion Healthcare Japan K.K.(*1)

700

100.00%

12

70,182

(110,499)

70,182

Celltrion Healthcare Switzerland Sarl(*1)

200

100.00%

12

22,887

22,229

22,887

10,000

100.00%

12

Celltrion Healthcare Distribuicao de Produtos Farmaceuticos do


Brasil LTDA(*3)

Celltrion Healthcare Singapore Private Limited(*1)


Celltrion Healthcare Mexico, S.A. DE C.V.(*1)

CTHC USA Co., Ltd(*1)

(*1)

10,180

8,136

10,180

7,065,787

2,552,926

3,810,101

(*2)
(*3)

Celltrion Healthcare India Privated Limited .


.

57

5.

Equity method investments

So far from the end of the accounting period, the details of the Group's equity method investments are as
follows.
(1) Shareholding ratios of the investee companies presented by equity method.
(Current Period)
Company name
Celltrion Healthcare India Privated Limited
(*1) (*2)
Celltrion Healthcare ILAC SANAYI TICARET
LIMITED
Celltrion Healthcare Philippines Inc. (*3)

(Unit: KRW 000)


Number of
Ownership
shares
4,998

3 months

Acquisition
Equity
Book value
cost
investment
12,240

521

12,240

135,099 100.00% 12 months 3,403,719

2,913,217

2,821,454

99.99% 12 months

227,392

59,084

50,441

Celltrion Healthcare Malaysia SDN BHD (*1)

105,889 100.00% 12 months

39,119

1,875

39,119

Celltrion Healthcare Hong Kong Limited (*1)

746,895 100.00% 12 months

105,531

52,272

105,531

Celltrion Healthcare (Thailand) Co., Ltd. (*1)

599,997 100.00% 12 months

107,999

(88,059)

107,999

3,609,095 100.00% 12 months 2,673,907

(464,636)

177,437

178,945

129,288

178,945

99.98% 12 months

213,686

29,498

213,686

Celltrion Healthcare Japan K.K. (*1)

700 100.00% 12 months

70,182

(110,499)

70,182

Celltrion Healthcare Switzerland Sarl (*1)

200 100.00% 12 months

22,887

22,229

22,887

10,000 100.00% 12 months

10,180

8,136

10,180

7,065,787

2,552,926

3,810,101

Celltrion Healthcare Distribuicao de Produtos


Farmaceuticos do
Brasil LTDA (*3)
Celltrion Healthcare Singapore Private Limited
(*1)
Celltrion Healthcare Mexico, S.A. DE C.V. (*1)

CTHC USA Co., Ltd (*1)


Total

84,995

99.96%

Holding
period

200,000 100.00% 12 months


4,880

(*1) The Group is not using the equity method since it is not significiant to the shareholding changes of the investee
companies and the method is only applicable to companies which are not related to the external audit.
(*2) So far from the reporting day, Celltrion Healthcare India Privated Limited is under the process of liquidation.
(*3) The Group uses the equity method since it is significiant to the shareholding changes of the investee
companies.

58

()

( : )

Celltrion Healthcare India Privated Limited(*1)


Celltrion Healthcare ILAC SANAYI TICARET LIMITED
SIRKETI(*1)
Celltrion Healthcare Hungary, Kft.(*2)

4,998

99.96%

12,240

2,581

12,240

6,099

99.98%

12

191,619

7,735

191,619

100.00%

12

81,976

412,206

84,995

99.99%

12

227,392

134,521

105,287

Celltrion Healthcare Malaysia SDN BHD(*1)

105,889

100.00%

12

39,119

11,477

39,119

Celltrion Healthcare Hong Kong Limited(*1)

75,090

100.00%

12

11,264

(3,250)

11,264

Celltrion Healthcare (Thailand) Co., Ltd.(*1)

599,997

100.00%

12

107,999

(7,953)

107,999

2,546,121

100.00%

12

2,169,505

179,771

849,321

200,000

100.00%

12

178,945

142,785

178,945

3,699

99.97%

12

166,328

77,023

166,328

3,186,387

956,896

1,662,122

Celltrion Healthcare Philippines Inc.(*2)

Celltrion Healthcare Distribuicao de Produtos Farmaceuticos do


Brasil LTDA(*2)

Celltrion Healthcare Singapore Private Limited(*1)


Celltrion Healthcare Mexico, S.A. DE C.V.(*1)

(*1)

(*2)

59

(Last Period)

(Unit: KRW 000)


Company name

Number of
Holding
Ownership
shares
period

Acquisition
Equity
Book value
cost
investment

Celltrion Healthcare India Privated Limited


(*1)

4,998

99.96% 3 months

12,240

2,581

12,240

Celltrion Healthcare ILAC SANAYI TICARET


LIMITEDSIRKETI (*1)

6,099

99.98% 12 months

191,619

7,735

191,619

- 100.00% 12 months

81,976

412,206

99.99% 12 months

227,392

134,521

105,287

Celltrion Healthcare Malaysia SDN BHD (*1)

105,889 100.00% 12 months

39,119

11,477

39,119

Celltrion Healthcare Hong Kong Limited (*1)

75,090 100.00% 12 months

11,264

(3,250)

11,264

Celltrion Healthcare (Thailand) Co., Ltd. (*1)

599,997 100.00% 12 months

107,999

(7,953)

107,999

2,546,121 100.00% 12 months 2,169,505

179,771

849,321

178,945

142,785

178,945

166,328

77,023

166,328

3,186,387

956,896

1,662,122

Celltrion Healthcare Hungary, Kft. (*2)


Celltrion Healthcare Philippines Inc. (*2)

Celltrion Healthcare Distribuicao de Produtos


Farmaceuticos do
Brasil LTDA (*2)
Celltrion Healthcare Singapore Private Limited
(*1)
Celltrion Healthcare Mexico, S.A. DE C.V. (*1)
Total

84,995

200,000 100.00% 12 months


3,699

99.97% 12 months

(*1)The Group is not using the equity method since it is not significant to the shareholding changes of the investee
companies and the method is only applicable to companies which are not related to the external audit.
(*2) The Group uses the equity method since it is significant to the shareholding changes of the investee
companies.

60

(2)

()

( : )

()

(*)

Celltrion Healthcare India Privated Limited

12,240

12,240

191,619

3,212,100

(404,629)

(177,636)

2,821,454

105,287

(56,504)

1,658

50,441

39,119

39,119

Celltrion Healthcare Hong Kong Limited

11,264

74,774

19,493

105,531

Celltrion Healthcare (Thailand) Co., Ltd.

107,999

107,999

849,321

504,402

(1,177,375)

1,089

177,437

Celltrion Healthcare Singapore Private Limited

178,945

178,945

Celltrion Healthcare Mexico, S.A. DE C.V.

Celltrion Healthcare ILAC SANAYI TICARET


LIMITEDSIRKETI
Celltrion Healthcare Philippines Inc.
Celltrion Healthcare Malaysia SDN BHD

Celltrion Healthcare Distribuicao de Produtos


Farmaceuticos do Brasil LTDA

166,328

47,358

213,686

Celltrion Healthcare Japan K.K.

70,182

70,182

Celltrion Healthcare Switzerland Sarl

22,887

22,887

CTHC USA Co., Ltd

10,180

10,180

1,662,122

3,941,883

(1,638,508)

(174,889)

19,493

3,810,101

(*)

Celltrion Healthcare Hong Kong Limited .

61

(2) Assessment details of the Equity Method


In the current and the last period, the assessment details of the Equity Method with respect to different
companies are as follows.
(Current period)
(Unit: KRW 000)

Company name

Beginning

(decrease) in
Other
Equity
equity method increase or
method loss
investment
decrease

Acquisition

Ending

Celltrion Healthcare India Privated


Limited

12,240

12,240

Celltrion Healthcare ILAC SANAYI


TICARETLIMITEDSIRKETI

191,619

3,212,100

(404,629)

(177,636)

2,821,454

Celltrion Healthcare Philippines Inc.

105,287

(56,504)

1,658

50,441

Celltrion Healthcare Malaysia SDN BHD

39,119

39,119

Celltrion Healthcare Hong Kong Limited

11,264

74,774

19,493

105,531

Celltrion Healthcare (Thailand) Co., Ltd.

107,999

107,999

504,402 (1,177,375)

1,089

177,437

Celltrion Healthcare Distribuicao de


ProdutosFarmaceuticos do Brasil LTDA
Celltrion Healthcare Singapore Private
Limited
Celltrion Healthcare Mexico, S.A. DE C.V.

849,321
178,945

178,945

166,328

47,358

213,686

Celltrion Healthcare Japan K.K.

70,182

70,182

Celltrion Healthcare Switzerland Sarl

22,887

22,887

CTHC USA Co., Ltd

10,180

10,180

Total

1,662,122
3,941,883
(1,638,508)
(174,889)
19,493
3,810,101
(*)The net increase equity of Celltrion Healthcare Hong Kong Limited by the conversion of convertible bonds to
equity

62

()

( : )
()

Celltrion Healthcare India Privated Limited


Celltrion Healthcare ILAC SANAYI TICARET
LIMITEDSIRKETI
Celltrion Healthcare Hungary, Kft.

12,242

(2)

12,240

118,265

73,354

191,619

81,976

(85,618)

3,642

227,392

(104,467)

(17,638)

105,287

Celltrion Healthcare Malaysia SDN BHD

39,119

39,119

Celltrion Healthcare Hong Kong Limited

11,264

11,264

Celltrion Healthcare (Thailand) Co., Ltd.

107,999

107,999

1,447,875

721,630

(1,132,329)

(187,855)

849,321

178,945

178,945

Celltrion Healthcare Philippines Inc.

Celltrion Healthcare Distribuicao de


Produtos Farmaceuticos do Brasil LTDA
Celltrion Healthcare Singapore Private
Limited
Celltrion Healthcare Mexico, S.A. DE C.V.

166,328

166,328

2,225,077

961,312

(2)

(1,322,414)

(201,851)

1,662,122

(3)
"0"
.
( : )

Celltrion Healthcare Hungary,


Kft.

(*)

(*)
57,697,671

(57,697,671)

Celltrion Healthcare Hungary, Kft.


.

63

(Last period)

Company name

(Unit: KRW 000)

Beginning

Acquisition

Loss on
Equity
valuation of
method loss
equity
method

Disposal

Ending

Celltrion Healthcare India Private


Limited

12,242

(2)

12,240

Celltrion Healthcare ILAC SANAYI


TICARETLIMITEDSIRKETI

118,265

73,354

191,619

Celltrion Healthcare Hungary, Kft.

81,976

(85,618)

3,642

227,392

(104,467)

(17,638)

105,287

Celltrion Healthcare Malaysia


SDN BHD

39,119

39,119

Celltrion Healthcare Hong Kong


Limited

11,264

11,264

Celltrion Healthcare (Thailand)


Co., Ltd.

107,999

107,999

1,447,875

721,630

- (1,132,329)

(187,855)

849,321

178,945

178,945

166,328

166,328

2,225,077

961,312

(2) (1,322,414)

(201,851)

1,662,122

Celltrion Healthcare Philippines


Inc.

Celltrion Healthcare Distribuicao


de Produtos Farmaceuticos do
Brasil LTDA
Celltrion Healthcare Singapore
Private Limited
Celltrion Healthcare Mexico, S.A.
DE C.V.
Total

(3) Unrecorded shareholding changes due to the termination of the Equity Method
The investment account balance changes to zero. The change amount in the current period and the
accumulated amount before the last period of unrecorded shareholdings due to the termination of the Equity
Method are as follows.
(Unit: KRW 000)
Company name
Celltrion Healthcare Hungary, Kft.

Net changes in equity (*)


57,697,671

The movements before


accumulated equity registered

Total

(57,697,671)

(*) For Celltrion Healthcare Hungary, the accumulation of the unregistered shareholding change before using
the Equity Method should be registered in the current period.

64

(4)

()

( : )

Celltrion Healthcare India Privated Limited

1,823

1,302

521

(4,116)

13,648,664

10,735,403

2,913,261

509,563

(137,556)

174,191

115,104

59,087

207,092

(77,280)

Celltrion Healthcare Malaysia SDN BHD

4,389

2,514

1,875

(9,611)

Celltrion Healthcare Hong Kong Limited

52,801

529

52,272

(31,479)

Celltrion Healthcare (Thailand) Co., Ltd.

25,391

113,450

(88,059)

(74,844)

71,722

536,358

(464,636)

(1,140,686)

135,942

6,654

129,288

(11,515)

Celltrion Healthcare ILAC SANAYI TICARET LIMITED


SIRKETI
Celltrion Healthcare Philippines Inc.

Celltrion Healthcare Distribuicao de Produtos


Farmaceuticos
do Brasil LTDA
Celltrion Healthcare Singapore Private Limited
Celltrion Healthcare Mexico, S.A. DE C.V.
Celltrion Healthcare Japan K.K.
Celltrion Healthcare Switzerland Sarl

29,504

29,504

(55,421)

540,440

650,939

(110,499)

(189,365)

22,229

22,229

8,136

8,136

(110)

2,552,979

716,655

(1,731,983)

CTHC USA Co., Ltd

(*)

14,715,232

12,162,253

,
.

65

(4) Financial information summary of the investee Company


(Current period)
Company name
Celltrion Healthcare India Privated Limited
Celltrion Healthcare ILAC SANAYI TICARET
LIMITEDSIRKETI
Celltrion Healthcare Philippines Inc.

(Unit: KRW 000)


Assets
1,823

Liabilities

Net assets

Sales

Net income

1,302

521

(4,116)

13,648,664 10,735,403

2,913,261

509,563

(137,556)

174,191

115,104

59,087

207,092

(77,280)

Celltrion Healthcare Malaysia SDN BHD

4,389

2,514

1,875

(9,611)

Celltrion Healthcare Hong Kong Limited

52,801

529

52,272

(31,479)

Celltrion Healthcare (Thailand) Co., Ltd.

25,391

113,450

(88,059)

(74,844)

Celltrion Healthcare Distribuicao de Produtos


Farmaceuticos do Brasil LTDA

71,722

536,358

(464,636)

Celltrion Healthcare Singapore Private Limited

135,942

6,654

129,288

(11,515)

29,504

29,504

(55,421)

540,440

650,939

(110,499)

(189,365)

22,229

22,229

8,136

8,136

(110)

14,715,232 12,162,253

2,552,979

716,655

Celltrion Healthcare Mexico, S.A. DE C.V.


Celltrion Healthcare Japan K.K.
Celltrion Healthcare Switzerland Sarl
CTHC USA Co., Ltd
Total

- (1,140,686)

(1,731,983)
(*) The above financial statements and financial information are unaudited temporary settlement amounts.
Reliability verification procedures have been performed to analyze the differences between the statements and
the audited financial statements.

66

()

( : )

Celltrion Healthcare India Privated Limited


Celltrion Healthcare ILAC SANAYI TICARET LIMITED
SIRKETI
Celltrion Healthcare Hungary, Kft.
Celltrion Healthcare Philippines Inc.
Celltrion Healthcare Malaysia SDN BHD

3,889

1,307

2,582

(2,206)

17,791

10,055

7,736

(95,174)

122,699,633

122,287,427

412,206

393,876

179,635

45,101

134,534

272,213

(28,488)

13,879

2,402

11,477

(14,378)

Celltrion Healthcare Hong Kong Limited

6,451

9,701

(3,250)

(3,798)

Celltrion Healthcare (Thailand) Co., Ltd.

24,889

32,842

(7,953)

(77,466)

446,586

266,815

179,771

(943,123)

149,447

6,662

142,785

(14,035)

77,359

315

77,044

(75,660)

956,932

272,213

(860,452)

Celltrion Healthcare Distribuicao de Produtos


Farmaceuticos
do Brasil LTDA
Celltrion Healthcare Singapore Private Limited
Celltrion Healthcare Mexico, S.A. DE C.V.

123,619,559

122,662,627

(*) ,
.

67

(Last period)

(Unit: KRW 000)


Company

Assets

Liabilities

Net assets

Sales

Net income

Celltrion Healthcare India Privated Limited

3,889

1,307

2,582

(2,206)

Celltrion Healthcare ILAC SANAYI TICARET


LIMITEDSIRKETI

17,791

10,055

7,736

(95,174)

122,699,633 122,287,427

412,206

393,876

Celltrion Healthcare Hungary, Kft.


Celltrion Healthcare Philippines Inc.

179,635

45,101

134,534

272,213

(28,488)

Celltrion Healthcare Malaysia SDN BHD

13,879

2,402

11,477

(14,378)

Celltrion Healthcare Hong Kong Limited

6,451

9,701

(3,250)

(3,798)

Celltrion Healthcare (Thailand) Co., Ltd.

24,889

32,842

(7,953)

(77,466)

Celltrion Healthcare Distribuicao de Produtos


Farmaceuticos do Brasil LTDA

446,586

266,815

179,771

(943,123)

Celltrion Healthcare Singapore Private Limited

149,447

6,662

142,785

(14,035)

77,359

315

77,044

(75,660)

123,619,559 122,662,627

956,932

272,213

(860,452)

Celltrion Healthcare Mexico, S.A. DE C.V.


Total

(*) The above financial statements and financial information are unaudited temporary settlement amounts.
Reliability verification procedures have been performed to analyze the differences between the statements and
the audited financial statements.

68

6.
.
()

( : )

(1)

15,030

(7,722)

(156,312)

(163)

1,247

262,688

789,747

(527,059)

410,609

15,030

(7,723)

(156,312)

(163)

1,247

262,688

789,747

(527,059)

()

( : )

43,956

(43,955)

564,211

9,787

(4,979)

(158,411)

410,608

800,486

(389,878)

564,212

9,787

(4,979)

(158,411)

410,609

844,442

(433,833)

410,608

7.
.
()

( : )

136,365

21,166

(*)

(35,305)

(2,833)

(13)

119,380

193,562

(71,349)

(2,833)



, 2,833
.

(*)

()

( : )

49,175

109,028

(21,838)

136,365

178,288

(41,923)

69

6.
Tangible assets
The details of changes in book value of tangible assets of the Group in the current period and last period are as
follows.
(Current period)
(Unit: KRW 000)

Division

Foreign
Consolidation
currency
Acquisition Accumulated
Beginning Acquisition Disposal Depreciation
scope
Ending
translation
cost
amortization
changes
differences

Vehicles
Equipment
Total

410,608
410,609

(1)

15,030 (7,722)
15,030 (7,723)

(156,312)
(156,312)

(163)
(163)

1,247 262,688
1,247 262,688

789,747
789,747

(527,059)
(527,059)

(Last period)

Division

(Unit: KRW 000)

Beginning

Vehicles

Acquisition

Disposal

Depreciation

Acquisition
cost

Ending

Accumulated
amortization

43,956

(43,955)

Equipment

564,211

9,787

(4,979)

(158,411)

410,608

800,486

(389,878)

Total

564,212

9,787

(4,979)

(158,411)

410,609

844,442

(433,833)

7.

Intangible assets

The details of changes in book value of intangible assets of the Group in current period and last period are as
follows.
(Current period)
(Unit: KRW 000)
Title of
account

Beginning Acquisition

Software

136,365

Depreciati Impairment
on
losses (*)

21,166

(35,305)

Foreign
currency
translation

(2,833)

Ending

(13) 119,380

Acquisition Accumulated Impairment


cost
amortization
losses
193,562

(71,349)

(2,833)

(*) The Group's recoverable value of the software, such as the obsolescence with respect to some software for
machinery, is lower than the book value. So the difference, totaling 2,833,000 KRW, can be noted as impairment
loss of intangible assets account.
(Last period)
Title of account
Software

(Unit: KRW 000)


Beginning
49,175

Acquisition
109,028

Depreciation
(21,838)

Ending
136,365

Acquisition cost
178,288

Accumulated
amortization
(41,923)

70

8.

, .
( : )

(*2)

7.68% ~ 17.38%

7.68%

8.33%

7.68% ~ 8.33%

53,827,823

29,516,741

30,000,000

79,800,000

41,792,035

23,585,940

28,827,201

70,767,512

(7,618,277)

(1,172,799)

(9,032,488)

(4,417,511)

(5,930,801)

(*1)

(*1)

(*2)


.( 9 )

,
.
( : )

()

53,827,823

29,516,741

30,000,000

79,800,000

(7,618,277)

(1,172,799)

(9,032,488)

(4,417,511)

(5,930,801)

6,815,040

1,266,360

30,000,000

19,800,000

(1,172,799)

(163,670)

(487,213)

(90,533)

35,464,208

22,410,113

51,131,182

:


()

71

8.

Assessment of present value for bond debt.

At the end of the current accounting period, the present value assessment of the long-term trade receivables
and payables are as follows.
(Unit: KRW 000)
Long-term trade receivables (* 2)

Long-term payables

Division
Current period
Applicable interest rate (* 1)

Last period

Current period

Last period

7.68% ~ 17.38%

7.68%

8.33%

7.68% ~ 8.33%

Nominal amount

53,827,823

29,516,741

30,000,000

79,800,000

Present value

41,792,035

23,585,940

28,827,201

70,767,512

Present value discount

(7,618,277)

(1,172,799)

(9,032,488)

Allowance for bad debt

(4,417,511)

(5,930,801)

(*1) The weighted average borrowing rate of the Group was applied to the discount rate.
(*2) Long-term account receivables and allowances for bad debt accounts reflect the adjustment of the extension
of the payback period of the accounts receivable and accounts payable (see note 9).
On the other hand, at the end of the accounting period, the classifications of the long-term receivables and
payables with respect to liquidity are as follows.
(Unit: KRW 000)
Long-term receivables

Long-term payables

Division
Current period

Last period

Current period

Last period

Long-term assets and liabilities


(notional principal amount)

53,827,823

29,516,741

30,000,000

79,800,000

Deduction: total current value


discounts

(7,618,277)

(1,172,799)

(9,032,488)

Total loan loss provisions

(4,417,511)

(5,930,801)

6,815,040

1,266,360

30,000,000

19,800,000

(1,172,799)

(163,670)

(487,213)

(90,533)

35,464,208

22,410,113

51,131,182

Reduction: Liquidity Assets and


Liabilities
Liquidity Present Value Discount
Allowance adjustment
Long-term assets and liabilities (net)

72

9.
30,969,789 ,
.
( : )


30,969,789 2017 12
31
.

(*)

(*)

30,969,789


126,442 5,759,659 .

1,811,109 329,511 .

, .
( : )

5,930,801

536,621

126,442

5,759,659

(1,811,109)

(329,511)

171,377

(35,968)

4,417,511

5,930,801

10.
.
( : )

KDB BANK EUROPE LTD(*)

(%)
7M Libor+5%

10,992,000

(*)
( 22 ).

73

9.

Adjustment of bonds and debts

The recovery condition with respect to the bond's principal value in the receivables, accounted by 30,969,789,
000 KRW, has been adjusted and shown as follows.
(Unit: KRW 000)
Division

Reconciliations

Amount

The Group agrees that recovery condition with


respect to the bond's principal value in the
receivables, accounted by 30,969,789,000 KRW,
can be adjusted until 31 December 2017

Maturity extension (*)

30,969,789

(*) The effective interest rate at the bond issuance was applied to the maturity-extended bonds. The additional
allowance for doubtful accounts in the current period and last period were recognized by 126,442,000 KRW and
5,759,659,000 KRW respectively. The effective interest rate is applied to the carrying amounts after the valuation,
the interest recognized in the current period and last period is 1,811,109,000 KRW and 329,511,000 KRW
respectively.
On the other hand, the changes in bad debt reserves of the maturity-extended bonds in the current and the last
period are as follows.
(Unit: KRW 000)
Division

Current period

Beginning

Last period

5,930,801

536,621

Bad debt expense

126,442

5,759,659

Bad debt recovery

(1,811,109)

(329,511)

171,377

(35,968)

4,417,511

5,930,801

Foreign currency translation


Ending

10. Short-term loans


At the end of the accounting period, the details of the short-term loans of the Group are as follows.
(Unit: KRW 000)
Borrowing source
KDB BANK EUROPE LTD (*)

Interest rate (%)


7M Libor+5%

Current period
10,992,000

Last period
-

(*) The above short-term debts were guaranteed by other related parties (note 22).

74

11.
(1) .
( : )

298,340,000

90,000,000

(26,190,214)

(8,646,358)

13,084,031

13,084,031

90,000,000

90,000,000

(8,646,358)

(8,646,358)

13,084,031

13,084,031

190,796,144

(2) .
1

2013.8.16

2014.9.30

2016.8.16

2019.9.30

90,000,000

208,340,000

90,000,000

204,767,960

3%

6%

7.5%()

6%()


114.54%

100%

39,003 ( 5,000 )

39,872 ( 5,000 )

2,307,500

5,225,167

75

11. Convertible bonds and warrants bonds


(1) At the end of the accounting period, currently subscribed convertible bonds and bonds with warrants are as
follows:
(Unit: KRW 000)
Division

Convertible bonds

Bond warrants

Face value

298,340,000

90,000,000

Adjustment of conversion right/warrant

(26,190,214)

(8,646,358)

13,084,031

13,084,031

Convertible bonds / warrants bonds

90,000,000

90,000,000

Conversion rights adjustment / warrants adjustment

(8,646,358)

(8,646,358)

Bond repayment premium

13,084,031

13,084,031

190,796,144

Bond repayment premium


Re-evaluation of Long-term assets and liabilities:

Long-term bonds convertible bonds and warrants balance

(2) The issued conditions and other details of the issued convertible bonds are as follows:
Division

First convertible bond

Second convertible bond

Date of issue

2013.8.16

2014.9.30

Date of maturity

2016.8.16

2019.9.30

Face value

KRW 90,000 MN

KRW 208,340 MN

Issue price

KRW 90,000 MN

KRW 204,767.96 MN

Interest payment
conditions

Denomination annual interest at 3%

Denomination annual interest at 6%

Guaranteed returns

The extended bond interest rate at 7.5%


(Annual compound interest rate)

The extended bond interest rate at 6%


(Annual compound interest rate)

Repayment method

The repayment should be 114.5% of the


bonds if the convertible bonds were not
repaid after maturity.

If not converted, expires according to the


amount of 100% of the face value of onetime reimbursement

Type and the amount of Registered common shares: 39,003 Shares Registered common shares: 39,872 shares
shares issued
(Face Value 5,000 KRW)
(Face Value 5,000 KRW)
Conversion billing period

From the issue date before the expired


date

From the issue date to 3 days before the


expired date

Conversion price

2,307,500 KRW

5,225,167 KRW

76

(3) .

2013.8.16

2016.8.16

90,000,000

90,000,000

3%

7.5%()

114.54%

39,003 ( 5,000 )

2,307,500

(4)
.
,
.

12.

.
.
.
492,684 ( : 574,600 )

. .

77

(3) The issued conditions and other details of bond warrants are as follows:
Division

Bond warrants

Date of issue

2013.8.16

Date of maturity

2016.8.16

Face value

90,000,000,000 KRW

Issue price

90,000,000,000 KRW

Interest payment
conditions

Denomination annual interest 3%

Guaranteed returns

The expired date7.5%(annual compound rate)

Repayment method

If not converted, or not repaid in advance, expire according to the amount of


114.54% of the face value of one-time reimbursement

Type of shares and


number of shares that
will be issued if

Registered common shares: 39,003 Shares (Face Value 5,000 KRW)

exercised
Promotion Period
Exercise price

From the issue date before the repayment date


2,307,500 KRW

(4) The fair value of convertible bonds and the liability component of warrants bonds are calculated by
applying the market interest rate of bonds without conversion rights under the same conditions. The
residual value after the value of the conversion rights is the issue price deducted by the liability component
from the issue price is, equivalent to the value of the conversion rights. The value amount, net of tax
effect, was recorded as consideration of conversion rights and warrants.
12. Retirement benefit plans
The parent company has implemented a defined contribution plan for all qualified employees. External assets
have been operated independently from the assets of the parent company in the form of fund under the
management of a trustee. If employees leave the company before they meet the vesting conditions of the
defined contribution, the amount of contributions that parent company has to pay will be reduced by the
defined contribution amount that employee was meant to get if they stayed.
The current period cost recognized in the income statement at 492,684,000 KRW (prior period: 574,600,000
KRW), is the amount included in the contribution, calculated by the parent company according to the
proportion set in the pension plans. There are currently no unpaid retirement benefits by the end of the
reporting date.

78

13.

.
()

( : )

USD

187,996

206,646

USD

977,082

1,031,114

EUR

1,312,444

1,754,107

EUR

15,229,517

22,178,136

RON

133

39

RON

133

43

PLN

148

46

PLN

148

52

VEF

560

98

VEF

560

93

GBP

135

231

GBP

BRL

2,340

968

BRL

USD

37,777,106

41,524,595

USD

23,408,520

24,703,011

EUR

3,363

4,495

EUR

32,477,745

47,296,041

USD

1,487

1,635

USD

EUR

4,330

5,787

EUR

USD

394,996

434,180

USD

THB

2,950,000

98,648

THB

TRY

200,000

94,396

TRY

JPY

68,000,000

625,695

JPY

USD

12,479

13,717

USD

THB

66,120

2,211

THB

TRY

23,538

11,109

TRY

JPY

247,126

2,274

JPY

USD

42,770,000

47,012,784

USD

26,770,000

28,250,381

79

13. Monetary foreign assets and foreign liabilities


At the end of the accounting period, the details of the monetary assets and liabilities in foreign currencies of
the Group are as follows:
(Assets)
(Unit: KRW 000)
Current period
Subject

Cash and cash


equivalents

Foreign currency amount

Last period
KRW
equivalent

KRW
equivalent

Foreign currency amount

USD

187,996

206,646

USD

977,082

1,031,114

EUR

1,312,444

1,754,107

EUR

15,229,517

22,178,136

RON

133

39

RON

133

43

PLN

148

46

PLN

148

52

VEF

560

98

VEF

560

93

GBP

135

231

GBP

BRL

2,340

968

BRL

USD

37,777,106

41,524,595

USD

23,408,520

24,703,011

EUR

3,363

4,495

EUR

32,477,745

47,296,041

USD

1,487

1,635

USD

EUR

4,330

5,787

EUR

USD

394,996

434,180

USD

THB

2,950,000

98,648

THB

TRY

200,000

94,396

TRY

JPY

68,000,000

625,695

JPY

USD

12,479

13,717

USD

THB

66,120

2,211

THB

TRY

23,538

11,109

TRY

JPY

247,126

2,274

JPY

USD

42,770,000

47,012,784

USD

26,770,000

28,250,381

Trade receivable

Accounts receivable

Short-term loans

Accrued income

Long-term account
receivables

80

USD

USD

230,945

243,716

HKD

HKD

70,000

9,526

THB

THB

507,000

16,295

USD

USD

447

472

HKD

HKD

1,285

175

THB

THB

1,920

62

USD

550

605

USD

HUF

103,800

441

HUF

91,794,707

123,729,117

()

( : )

USD

144,079

158,372

USD

15,605

16,468

EUR

52,929

70,741

EUR

118,700

172,858

CAD

CAD

60,000

59,451

GBP

755

1,291

GBP

USD

10,000,000

10,992,000

USD

TRY

15,000,000

7,079,700

TRY

18,302,104

248,777

4,410,066 ( : 218,550 )
465,025 ( : 814,416 ) .

81

Long-term loans

Long-term accrued
income

USD

USD

230,945

243,716

HKD

HKD

70,000

9,526

THB

THB

507,000

16,295

USD

USD

447

472

HKD

HKD

1,285

175

THB

THB

1,920

62

USD

550

605

USD

HUF

103,800

441

HUF

Leasehold deposits

Total assets

91,794,707

123,729,117

(Liabilities)

(Unit: KRW 000)


Current period

Subject

Last period
KRW
equivalent

Foreign currency amount

KRW
equivalent

Foreign currency amount

USD

144,079

158,372

USD

15,605

16,468

EUR

52,929

70,741

EUR

118,700

172,858

CAD

CAD

60,000

59,451

GBP

755

1,291

GBP

Short-term borrowing

USD

10,000,000

10,992,000

USD

Performance bonds

TRY

15,000,000

7,079,700

TRY

Accounts payable

Liabilities total

18,302,104

248,777

According to the above exchange rate, the discounted gains of the foreign currency exchange is 4,410,066
KRW000 (last period: 218,550 KRW000) and the discounted loss of the foreign currency exchange is 465,025
KRW000 (prior period: 814,416 KRW000), which are recognized as non-operating income.

82

14.
.
(1)

OEP PARTNERS CO-INVEST, L.P.


ONE EQUITY PARTNERS IV,L.P.
ION INVESTMENTS B.V.
2
Celltrion Healthcare India Privated Limited
Celltrion Healthcare ILAC SANAYI TICARET LIMITED SIRKETI
Celltrion Healthcare Philippines Inc.
Celltrion Healthcare Malaysia SDN BHD
Celltrion Healthcare Hong Kong Limited
Celltrion Healthcare (Thailand) Co., Ltd.
Celltrion Healthcare Distribuicao de Produtos Farmaceuticos do
Brasil LTDA
Celltrion Healthcare Singapore Private Limited
Celltrion Healthcare Mexico, S.A. DE C.V
Celltrion Healthcare Japan K.K.
Celltrion Healthcare Switzerland Sarl
CTHC USA Co., Ltd.
()

()
()
()
()
()
()

83

14. Related Party Disclosures


Related party disclosures of the Group and the related information are shown as follows:
Special relationships between the parent company and related companies

Manager Company Name

Division
Manager

Seo Jung-jin

Companies having significant OEP PARTNERS CO-INVEST, L.P.


impact on the parent
ONE EQUITY PARTNERS IV, L.P.
company
ION INVESTMENTS B.V.
Petra Private Equity Fund

Subsidiaries

Other related parties

Celltrion Healthcare India Privated Limited


Celltrion Healthcare ILAC SANAYI TICARET LIMITED SIRKETI
Celltrion Healthcare Philippines Inc.
Celltrion Healthcare Malaysia SDN BHD
Celltrion Healthcare Hong Kong Limited
Celltrion Healthcare (Thailand) Co., Ltd.
Celltrion Healthcare Distribuicao de Produtos Farmaceuticos do Brasil LTDA
Celltrion Healthcare Singapore Private Limited
Celltrion Healthcare Mexico, S.A. DE C.V
Celltrion Healthcare Japan K.K.
Celltrion Healthcare Switzerland Sarl
CTHC USA Co., Ltd.

Celltrion Holdings Ltd.


Celltrion GSC Ltd.
Celltrion Ltd.
Celltrion Pharm Co., Ltd.
CelltrionST
Dreamenm
Hanskin Ltd.

84

(2)
()

( : )

OEP PARTNERS CO-INVEST, L.P.

61,259

ONE EQUITY PARTNERS IV,L.P.

3,366,585

ION INVESTMENTS B.V.

6,493,642

455,322

2,811,825

11,298

120,001

407

2,081

12,645

Celltrion Healthcare Japan K.K.

2,291

()

145,458

4,521,703

()

635

277,480,343

22,494,246

()

85,208

()

24,310

()

98,700

()

1,792

2,931,826

174,815

277,480,343

37,602,767

Celltrion Healthcare ILAC SANAYI


TICARET LIMITED SIRKETI
Celltrion Healthcare Philippines Inc.
Celltrion Healthcare Hong Kong Limited
Celltrion Healthcare (Thailand) Co.,
Ltd.
Celltrion Healthcare Distribuicao de
Produtos Farmaceuticos do Brasil
LTDA

(*) .

85

(2) Transactions with related parties


(Current period)
Related party division

(Unit: KRW 000)


Sales, etc.
Sales

Purchases, etc.
Others

Purchase

Others

OEP PARTNERS CO-INVEST, L.P.

61,259

ONE EQUITY PARTNERS IV,L.P.

3,366,585

ION INVESTMENTS B.V.

6,493,642

Petra Private Equity Fund

455,322

2,811,825

11,298

120,001

407

2,081

Celltrion Healthcare ILAC SANAYI


TICARET LIMITED SIRKETI
Celltrion Healthcare Philippines Inc.
Celltrion Healthcare Hong Kong
Limited
Celltrion Healthcare (Thailand) Co.,
Ltd.
Celltrion Healthcare Distribuicao de
Produtos Farmaceuticos do Brasil
LTDA

12,645
-

Celltrion Healthcare Japan K.K.

2,291

Celltrion GSC

145,458

4,521,703

Celltrion

635

277,480,343

22,494,246

Celltrion Pharm

85,208

CelltrionST

24,310

Dreamenm

98,700

Hanskin

1,792

2,931,826

174,815

277,480,343

37,602,767

Total

(*) Each of the Groups has been included under related parties.

86

()

( : )

OEP PARTNERS CO-INVEST, L.P.

22,118

ONE EQUITY PARTNERS IV,L.P.

1,215,508

164,394

113,436,918

253,949

180

62

472

()

1,251

118,631

()

2,497,023

()

6,655

331,131,182

11,766,508

()

86,807

()

18,006

()

220,591

()

1,673

2,923

113,690,867

10,293

331,131,182

16,112,509

Celltrion Healthcare Hungary, Kft.


Celltrion Healthcare Philippines Inc.
Celltrion Healthcare Hong Kong Limited
Celltrion Healthcare (Thailand) Co.,
Ltd.
Celltrion Healthcare Distribuicao de
Produtos Farmaceuticos do Brasil
LTDA

(3)
()

( : )

(*1)

(*1)

OEP PARTNERS CO-INVEST,

8,334

L.P.
ONE EQUITY PARTNERS IV,L.P.

458,003

87

(Last period)

(Unit: KRW 000)

Related party division

Sale, etc.
Sale

Purchases, etc.
Others

Purchase

Others

OEP PARTNERS CO-INVEST, L.P.

22,118

ONE EQUITY PARTNERS IV,L.P.

1,215,508

Petra Private Equity Fund

164,394

113,436,918

253,949

180

62

472

Celltrion Holdings

1,251

118,631

Celltrion GSC

2,497,023

Celltrion

6,655

331,131,182

11,766,508

Celltrion Pharmaceutical

86,807

CelltrionST

18,006

Dreamenm

220,591

Hanskin

1,673

2,923

113,690,867

10,293

331,131,182

16,112,509

Celltrion Healthcare Hungary, Kft.


Celltrion Healthcare Philippines Inc.
Celltrion Healthcare Hong Kong
Limited
Celltrion Healthcare (Thailand) Co.,
Ltd.
Celltrion Healthcare Distribuicao de
Produtos Farmaceuticos do Brasil
LTDA

Total

(3) Accounts receivables and payables with related parties


(Current period)

(Unit: KRW 000)


Receivables, etc. (* 1)

Related party division

Accounts receivable

Payables, etc. (*1)

Others

Trade payables

Others

OEP PARTNERS CO-INVEST, L.P.

8,334

ONE EQUITY PARTNERS IV,L.P.

458,003

88

ION INVESTMENTS B.V.(*2)

883,419

61,944

11,109

9,768,430

101,566

28,291

556

2,211

13,717

Celltrion Healthcare Japan K.K.

2,274

()

615,149

()

13,586

326,027,201

15,546,310

()

14,460,000

101,566

43,453

326,027,201

41,829,880

Celltrion Healthcare ILAC SANAYI


TICARET LIMITED SIRKETI
Celltrion Healthcare Philippines Inc.
Celltrion Healthcare Hong Kong
Limited
Celltrion Healthcare (Thailand) Co.,
Ltd.
Celltrion Healthcare Distribuicao de
Produtos Farmaceuticos do Brasil
LTDA


(*1)

(*2)

()

( : )

OEP PARTNERS CO-INVEST,

(*)

(*)

8,395

L.P.
ONE EQUITY PARTNERS IV,L.P.

461,346

62,396

45,500,057

175

62

472

619,640

Celltrion Healthcare Hungary, Kft.


Celltrion Healthcare Hong Kong
Limited
Celltrion Healthcare (Thailand) Co.,
Ltd.
Celltrion Healthcare Distribuicao de
Produtos Farmaceuticos do Brasil
LTDA
()

89

ION INVESTMENTS B.V.(*2)

883,419

Petra Private Equity Fund

61,944

Celltrion Healthcare ILAC SANAYI


TICARET LIMITED SIRKETI

11,109

9,768,430

101,566

28,291

Celltrion Healthcare Hong Kong


Limited

556

Celltrion Healthcare (Thailand) Co.,


Ltd.

2,211

Celltrion Healthcare Distribuicao de


Produtos Farmaceuticos do Brasil LTDA

13,717

Celltrion Healthcare Japan K.K.

2,274

Celltrion GSC

615,149

Celltrion

13,586

326,027,201

15,546,310

Celltrion Pharm

14,460,000

101,566

43,453

326,027,201

41,829,880

Celltrion Healthcare Philippines Inc.

Total
(*1) Cash-related transactions are not included

(*2) Each of the Groups has been included in related parties.


(Last period)

(Unit: KRW 000)


Bonds, etc. (* 1)

Related party division

Accounts
Receivable

Debt, etc. (*1)


Accounts
Receivable

Others

Others

OEP PARTNERS CO-INVEST,

8,395

LP
ONE EQUITY PARTNERS IV, L.P.

461,346

Petra Private Equity Fund

62,396

45,500,057

175

62

472

619,640

Celltrion Healthcare Hungary, Kft.


Celltrion Healthcare Hong Kong
Limited
Celltrion Healthcare (Thailand) Co.,
Ltd.
Celltrion Healthcare Distribuicao de
Produtos Farmaceuticos do Brasil
Celltrion GSC

90

()

1,293

383,567,512

3,249,193

()

19,460,000

()

1,640

()

480

45,500,057

2,002

383,567,512

23,863,090

(*) .

(4) .
()

( : )

OEP II PARTNERS CO-INVEST, L.P.

(*1)

737,493

39,116

776,609

ONE EQUITY PARTNERS IV,L.P.

(*1)

40,530,064

2,149,701

42,679,765

ION INVESTMENTS B.V.(*2)

(*1)

82,322,914

82,322,914

(*1)

5,481,583

290,741

5,772,324

9,526

9,968

(19,494)

16,295

82,353

98,648

243,716

190,464

434,180

94,396

94,396

625,695

625,695

9,650,000

(9,650,000)

2,887,292

Celltrion Healthcare Hong Kong


Limited
Celltrion Healthcare (Thailand) Co.,
Ltd.
Celltrion Healthcare Distribuicao de
Produtos Farmaceuticos do Brasil
LTDA
Celltrion Healthcare ILAC SANAYI
TICARET LIMITED SIRKETI
Celltrion Healthcare Japan K.K.
()

(*1)

54,436,441

57,323,733

(*1) , .
(*2) .

91

Celltrion

1,293

383,567,512

3,249,193

Celltrion Pharmaceutical

19,460,000

Dream e&m

1,640

Hanskin

480

45,500,057

2,002

383,567,512

23,863,090

Total
(*) Cash-related transactions are not included

(4) Details of transactions with related parties in the current period and last period are as follows
(Current period)
Related party division
OEP II PARTNERS
CO-INVEST, L.P.

(Unit: KRW 000)


Trading
information

Basis

Increment

Decrement

Ending

Borrowing (*)

737,493

39,116

776,609

ONE EQUITY PARTNERS IV,L.P. Borrowing (*)

40,530,064

2,149,701

42,679,765

ION INVESTMENTS B.V. (*2)

Borrowing (*)

82,322,914

82,322,914

Petra Private Equity Fund

Borrowing (*)

5,481,583

290,741

5,772,324

Rental

9,526

9,968

(19,494)

Rental

16,295

82,353

98,648

Rental

243,716

190,464

434,180

Celltrion Healthcare ILAC


SANAYI TICARET LIMITED
SIRKETI

Rental

94,396

94,396

Celltrion Healthcare Japan K.K.

Rental

625,695

625,695

Rental

9,650,000

(9,650,000)

54,436,441

2,887,292

57,323,733

Celltrion Healthcare Hong Kong


Limited
Celltrion Healthcare (Thailand)
Co., Ltd.
Celltrion Healthcare Distribuicao
de Produtos Farmaceuticos do
Brasil LTDA

Celltrion GSC
Borrowing (*)

(*1) Convertible bonds and bond warrants are included.


(*2) Each of the Groups has been included in related parties.

92

()

( : )

(*)

54,436,441

OEP II PARTNERS CO-INVEST, L.P.

(*)

737,493

737,493

ONE EQUITY PARTNERS IV,L.P.

(*)

40,530,064

40,530,064

(*)

5,481,583

5,481,583

9,526

9,526

16,295

16,295

243,716

243,716

7,000,000

(7,000,000)

(*)

87,136,441

(32,700,000)

Celltrion Healthcare Hong Kong


Limited
Celltrion Healthcare (Thailand) Co.,
Ltd.

(54,436,441)

Celltrion Healthcare Distribuicao de


Produtos Farmaceuticos do Brasil
LTDA
()
()

54,436,441

(*) , .

15.
(1)
.


1
:

20,000,000

20,000,000

5,000

5,000

331,526
146,917

300,000
178,443

93

(Last period)

(Unit: KRW 000)

Related party division

Trading
information

Basis

Increment

Decrement

Ending

Seo Jung-jin

Borrowing (*)

54,436,441

(54,436,441)

OEP II PARTNERS CO-INVEST,


L.P.

Borrowing (*)

737,493

737,493

ONE EQUITY PARTNERS IV,L.P. Borrowing (*)

40,530,064

40,530,064

Petra Private Equity Fund

Borrowing (*)

5,481,583

5,481,583

Rental

9,526

9,526

Rental

16,295

16,295

Rental

243,716

243,716

Borrowing

7,000,000

(7,000,000)

Borrowing (*)

87,136,441

(32,700,000)

54,436,441

Celltrion Healthcare Hong Kong


Limited
Celltrion Healthcare (Thailand)
Co., Ltd.
Celltrion Healthcare Distribuicao
de Produtos Farmaceuticos do
Brasil LTDA
Celltrion Holdings
Celltrion GSC

(*) Convertible bonds and bond warrants are included.


15. Capital
(1) Details of Capital
As of the end of the reporting date, the details about the capital of the parent company are as follows.
Division
The total number of shares issued
Face value per share
The number of issued shares:
Common shares
Preferred shares

Current period

Last period

20,000,000 KRW

20,000,000 KRW

5,000 shares

5,000 shares

331,526 KRW
146,917 KRW

300,000 KRW
178,443 KRW

94

(2)
.
( : )

1,500,000

892,215

290,078,863

1,500,000

892,215

290,078,863

157,630

(157,630)

1,657,630

734,585

290,078,863

(*)

(*) 2014 4 8 1 31,526 ,


157,630 .

(3)

2 : - 0.01%
3 : - 0.01%

2 : 2011 8 31
3 : 2012 1 31

(1)
2 : 5

3 : 5
(2)

(1) : 1 1
(2) :

(3) :
2 : 5
3 : 5

(*)

1 .

(4)
2010 11 25 , 59,368,783
.
95

(2) The changes in capital and share premium


Changes in capital stock and share premium of the Parent Company in the current period and last period are as
follows:
(Unit: KRW 000)
Capital

Division

Common shares

Preferred shares

Share issue premium

Last period beginning

1,500,000

892,215

290,078,863

Last period ending

1,500,000

892,215

290,078,863

157,630

(157,630)

1,657,630

734,585

290,078,863

Conversion shares (*)


Current period beginning

(*) On April 08, 2014, 31,526 shares of preferred shares were converted to ordinary shares for the first time. The amount
of preferred stock capital replaced by common stock was equal to 157,630,000 KRW.
(3) Redeemable convertible preferred shares
Subject

Content
Accumulative participating redeemable and convertible preferred shares
Second preferred shares: lowest annual yield of dividend 0.01% of the par value of
Preferred shares by redeemable and convertible preferred shares per year
category
Third preferred shares: lowest annual yield of dividend 0.01% of the par value of
redeemable and convertible preferred shares per year
Date of increase in Second preferred sharess: August 31 2011
paid-in capital Third preferred share: January 31, 2012
Voting rights
condition

With voting rights

(1) Redemption date


Second preferred share: can be redeemed within five years from the issue date
Details regarding
Third preferred share: can be redeemed within five years from the issue date
redemption
(2) Redemption amount
Based on redemption reasons and redeemed at a fair value

Details on
Conversion

(1) Conversion ratio: the initial conversion rate is 1:1 between redeemable and convertible
preferred shares and ordinary shares
(2) Conversion price: the issue price of each preferred share
(3) Conversion period:
Second preferred shares: Within five years from the issue date
Third preferred shares: Within five years from the issue date

(*) The entire first phase redeemable convertible preferred shares are converted to ordinary shares at current
period.
(4) Losses on capital reduction
The Losses on capital reduction in the current period were 59,368,783,000 KRW due to the spin-off of the
parent company on November 25, 2010.
96

16.
.

===========
==
15 2014 1 1 2014 12
31 14 2013 1 1 2013
12 31
( : )

3,438,226,830

19,282,937,128

3,641,721

(174,889,284)

(205,492,460)

17,415,143,421

20,678,480,967

19,081,086,389

20,678,480,967

19,081,086,389

17.
(1) .
1

2012 03 23

2013 03 22

3
3 40%, 4
30%, 5 30%

14,990

1,940

2,307,500

2,307,500

97

16. Statement of Comprehensive Income


Details of the statement of comprehensive income of current period and last period are as follows:
Statement of Comprehensive Income
============
15th
14th

period: From January 1, 2014 to December 31, 2014


period: From January 1, 2013 to December 31, 2013
(Unit: KRW 1)

Division

Current period

Current period net profit

Last period

3,438,226,830

19,282,937,128

3,641,721

Loss on valuation of equity method

(174,889,284)

(205,492,460)

Overseas business translation gains

17,415,143,421

Comprehensive income

20,678,480,967

19,081,086,389

Parent Company Equity


comprehensive income

20,678,480,967

19,081,086,389

Equity method investments

Non-controlling interests
Comprehensive income
17. Share-based compensation

(1) As of the end of reporting date, the Groups share-based compensation arrangements assigned are as follows:
Division

First

Second

Granted time

March 23, 2012

Exercising period

The shares of executives (incumbent only) at parent company can be


exercised three years after the date granted. 40% of initial shares granted
can be exercised after 3 years. 30% of remaining initial shares granted can
be exercised after 4 years. 30% of remaining initial shares granted can be
exercised after 5 years.

Number of shares issued


Exercise price
Granted method

March 22, 2013

14,990 shares

1,940 shares

2,307,500 KRW

2,307,500 KRW

type of shares issued

type of shares issued

98


, .

3.73%~3.88%

2.61%~2.74%

4~6

4~6

33.20%~35.36%

28.07%~32.65%

0%

0%

2,307,500

2,307,500

(2)
.

()

()

14,850

2,307,500

2,307,500

770

2,307,500

14,080

2,307,500

2,307,500 (:
2,307,500 ), 2.2 (: 3.2 ).

(3) .
( : )

8,726,325

8,726,325

3,973,040

1,928,233

2,370,857

2,044,807

6,343,897

3,973,040

99

The compensation for granted stock options is measured at fair value and assumptions are as follows:
Division
Risk-free interest rate
Expected exercise period
Expected volatility
Expected dividend yield
Fair value

First

Second

3.73%~3.88%

2.61%~2.74%

4~6 years

4~6 years

33.20%~35.36%

28.07%~32.65%

0%

0%

2,307,500 KRW

2,307,500 KRW

(2) As of the end of reporting date, detailed changes of granted stock options are as follows:

Division
Beginning balance

Stock options
Quantity (shares)

Weighted average exercise price (KRW)


14,850

2,307,500

2,307,500

770

2,307,500

14,080

2,307,500

Granted
Cancel
Current period ending balance
Probability of exercising from
current period until now

As of the end of the reporting date, the weighted average exercising price for stock options was KRW 2,307,500
(last period: KRW 2,307,500), the weighted average remaining period was 2.2 years (last period: 3.2 years).

(3) Details of the compensation costs incurred during each period are as follows:
(Unit: KRW 000)
Division

Current period

Last period

Total compensation costs

8,726,325

8,726,325

Recognized compensation costs of stock


options

3,973,040

1,928,233

Recognized costs of sales in current


period

2,370,857

2,044,807

Accumulated recognized cost of sales till


the end of current period

6,343,897

3,973,040

100

18.
()
.
(1)
.
( : )

8,982,029

21,678

(884,113)

(2,981,049)

(1,458,798)

11,214,393

301,231

(278,131)

(22,935)

6,917,414

7,976,891

(3,562,678)

(962,055)

3,354,736

7,014,836

(2)

.
( : )

(A)

6,792,962

26,297,773

2,333,832

5,902,061

(123,407)

(55,650)

( 2,896,438 , 2,155,254 )

700,938

521,571

301,231

(278,131)

:
( 509,945 , 229,962 )

101

18. Income tax expenses and deferred income tax


The details of income tax expenses and deferred income tax assets (liabilities) in the current and last period
are as follows:
(1) Details of income tax expenses
The details of income tax expenses in the current period and last period are as follows:
(Unit: KRW 000)
Division

Current period

Net Income

Last period

8,982,029

21,678

Changes in deferred taxes due to temporary


differences.

(884,113)

(2,981,049)

Changes in deferred taxes due to tax losses

(1,458,798)

11,214,393

Changes in deferred taxes due to retained tax

301,231

(278,131)

Foreign currency exchange differences, etc.

(22,935)

6,917,414

7,976,891

(3,562,678)

(962,055)

3,354,736

7,014,836

Additional Payment of Corporate Income Taxes

Total tax effect


Income tax expenses reflected directly in equity
Income tax expense

(2) 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 current and last
period are as follows:
(Unit: KRW 000)
Details
Income before income taxes (A)

Current period

Last period

6,792,962

26,297,773

2,333,832

5,902,061

(123,407)

(55,650)

Unauthorized expenses (current period 2,896,438,000 KRW, last


period 2,155,254,000 KRW)

700,938

521,571

Tax deduction

301,231

(278,131)

Tax according to the applicable tax rate


Adjustments:
Non-taxable income (current period 509 945,000 KRW, last period
229,962, 000 KRW)

102

424,518

262,000

937

21,678

(*)

(283,313)

641,307

(B)

3,354,736

7,014,836

49.4%

26.7%

(B/A)
(*)

(3) ()

() .
()

( : )

(*1)

()

58,109,877

16,773,017

74,882,894

74,882,894

1,694

9,180

800

10,074

10,074

120,597

151,060

120,597

151,060

151,060

10,299,448

14,685,265

10,299,448

14,685,265

14,685,265

4,934,725

4,934,725

758,800

81,927

(5,069)

835,658

758,800

76,858

13,084,031

13,084,031

13,084,031

13,084,031

13,084,031

13,084,031

205,492

174,890

380,382

380,382

()

335,055

335,055

335,055

1,322,414

(412,206)

1,667,924

29,415

2,548,717

2,548,717

320,924

(320,924)

320,924

320,924

320,924

1,692,665

356,574

10,481,682

2,049,239

(647,874)

9,833,808

9,833,808

45,824,821

35,650

57,697,671

44,680,924

17,434,224

(652,943)

130,151,899

90,478,019

39,673,880

(*2)

44,738,535

35,650

57,697,671

42,603,512

17,434,224

(652,938)

126,988,206

90,478,019

36,510,187

19.9%

(*3)

22.8%

18,001,770

8,320,111

273,846

(982)

1,822

274,686

(*2)

273,846

(982)

1,822

274,686

( )

103

Temporary differences not reflected

424,518

262,000

937

21,678

Others (*)

(283,313)

641,307

Income tax expenses (B)

3,354,736

7,014,836

49.4%

26.7%

Additional Income Tax payments

The effective tax rate (B / A)

(*)The Others mentioned above are the modified amount based on the tax rate difference and rectification
claims.
(3) Details of increases or decreases in temporary differences and deferred tax assets (liabilities)
Increases or decreases of temporary differences in the current & last period and of deferred tax assets
(liabilities) until the end of the reporting date are as follows:
(Current period)
Division

(Unit: KRW 000)


Beginning Structural Consolidation
Increase
balance
adjustment scope changes

Foreign
currency

Decrease

Ending
balance

Liquidity

Illiquidity

(Deductible temporary
differences)
Inventories
Depreciation
Accrued expenses (annual
allowance)
Accrued expenses
Allowance for bad debts
Foreign currency
exchange loss
Convertible bond
repayment premium
Bond warrants repayment
premium
Loss on valuation of
equity method
Negative retained
earnings
Equity method loss
Deemed dividend
Deficit carried forward

58,109,877

16,773,0
17

1,694

9,180

800

10,074

10,074

120,597

- 151,060

120,597

151,060

151,060

10,299,448

14,685,2
65

10,299,448

14,685,265 14,685,265

4,934,725

4,934,725

758,800

81,927

(5,069)

835,658

758,800

76,858

13,084,031

13,084,031

13,084,031

13,084,031

13,084,031

13,084,031

205,492

- 174,890

380,382

380,382

- 335,055

335,055

335,055

1,322,414

1,667,92
4

29,415

2,548,717

2,548,717

- 320,924

320,924

320,924

2,049,239

(647,874)

9,833,808

9,833,808

17,434,224

(652,943) 130,151,899 90,478,019

39,673,880

17,434,224

(652,938) 126,988,206 90,478,019

36,510,187

19.9%

22.8%

18,001,770

8,320,111

320,924 (320,924)
1,692,665

356,574

Sub-total

45,824,821

35,650

Recognized deferred tax


assets (*2)

44,738,535

35,650

(412,206)

10,481,6
82
44,680,9
57,697,671
24
42,603,5
57,697,671
12
-

74,882,894 74,882,894

Tax rate (* 3)
Deferred tax assets
(temporary differences,

Tax retained

273,846

(982)

1,822

274,686

Recognized deferred tax


assets (*2)

273,846

(982)

1,822

274,686

104

18,001,770

8,320,111

()

()

()

(16,382)

(16,382)

(16,382)

(163,671)

(163,671)

(6,506)

(19,337)

(6,506)

(19,337)

(19,337)

(200,880)

(6,357,292)

392,954

(6,165,218)

(200,880)

(5,964,338)

(3,642)

3,642

(3,642)

(323,205)

(326,847)

(326,847)

(13,403,011)

(14,118,259)

(4,756,653)

(22,764,617)

(22,764,617)

(13,403,011)

(4,756,653)

(8,646,358)

(8,646,358)

(27,197,103)

(20,818,093)

(9,683,483)

392,954

(37,938,759)

(236,599)

(37,702,160)

(27,193,461)

(20,494,888)

(9,683,483)

392,954

(37,611,912)

(236,599)

(37,375,313)

24.2%

23.4%

(57,257)

(8,734,682)

17,944,513

(414,571)

(*3)
( )
() -

()

( : )

(*1)

()

()

()

802

1,218

326

1,694

1,694

91,614

120,597

91,614

120,597

120,597

7,423,901

10,299,448

7,423,901

10,299,448

10,299,448

713,782

713,782

16,218

4,934,725

16,218

4,934,725

4,934,725

758,800

758,800

758,800

13,084,031

13,084,031

13,084,031

13,084,031

13,084,031

13,084,031

205,492

205,492

205,492

1,322,414

1,322,414

1,322,414

320,924

320,924

320,924

48,033,133

(740,936)

45,599,532

1,692,665

1,692,665

57,038,250

(740,936)

43,372,880

53,845,373

45,824,821

17,806,235

28,018,586

(*2)

57,038,250

(740,936)

42,257,180

53,845,373

44,738,535

17,806,235

26,932,301

105

Deferred tax assets (Tax


deduction)
Deferred tax assets

18,001,770

8,320,111

(Taxable temporary
differences)
Accounts receivable
Present value discount
(payables)

(16,382)

(16,382)

(16,382)

(163,671)

(163,671)

(6,506)

- (19,337)

(6,506)

(19,337)

(19,337)

392,954

(6,165,218) (200,880)

(5,964,338)

3,642

(3,642)

(326,847)

(326,847)

Accrued income

Foreign currency
(200,880)
exchange gains
Equity method
(3,642)
investments
Foreign operations
translation
Adjustment of conversion
(13,403,011)
rights
Adjustment of warrants

(13,403,011)

Sub-total

(27,197,103)

Recognized deferred tax


assets

(27,193,461)

(6,357,29
(323,205)
(14,118,2
(20,818,0
(20,494,8

(4,756,653)

- (22,764,617)

- (22,764,617)

(4,756,653)

(8,646,358)

(9,683,483)

392,954 (37,938,759)

(236,599) (37,702,160)

(9,683,483)

392,954 (37,611,912)

(236,599) (37,375,313)

Tax rate (*3)


Deferred tax liabilities
(temporary differences,
Deferred tax assets
(liabilities), net

(Last period)
Division

(8,646,358)

24.2%

23.4%

(57,257)

(8,734,682)

17,944,513

(414,571)

(Unit: KRW 000)


Structural
adjustment
(*1)

Beginning

Increment

Decrement

Ending

Liquidity

Illiquidity

(Deductible temporary differences)


Depreciation
Accrued expenses (annual
allowance)
Accrued expenses
Present value discount (accounts
receivable)
Allowance for bad accounts
Foreign currency exchange loss

802

1,218

326

1,694

1,694

91,614

120,597

91,614

120,597

120,597

7,423,901 10,299,448 10,299,448

7,423,901

- 10,299,448

713,782

713,782

16,218

4,934,725

16,218

4,934,725

4,934,725

758,800

758,800

758,800

Convertible bond repayment


premium

- 13,084,031

- 13,084,031

- 13,084,031

Bond warrants repayment premium

- 13,084,031

- 13,084,031

- 13,084,031

Loss on valuation of equity method

205,492

205,492

205,492

Equity method loss

1,322,414

1,322,414

1,322,414

Consent dividend

320,924

320,924

320,924

Deficit carring forward

48,033,133

(740,936)

- 45,599,532

1,692,665

1,692,665

Sub-total

57,038,250

(740,936) 43,372,880 53,845,373 45,824,821 17,806,235 28,018,586

Recognized deferred tax assets (*2)

57,038,250

(740,936) 42,257,180 53,845,373 44,738,535 17,806,235 26,932,301

106

(*3)

24.2%

24.2%

4,309,108

6,517,616

21,000

190,501

62,345

273,846

273,846

(*2)

21,000

190,501

62,345

273,846

273,846

301,231

4,610,339

6,517,616

( )

()

()

()

(1,973,432)

(1,973,432)

(16,382)

(16,382)

(16,382)

(3,249,669)

(163,671)

(3,249,669)

(163,671)

(163,671)

(22,095)

(6,506)

(22,095)

(6,506)

(6,506)

(209,520)

(8,640)

(200,880)

(200,880)

(3,642)

(3,642)

(3,642)

(15,071,747)

(1,668,736)

(13,403,011)

(13,403,011)

(15,071,747)

(1,668,736)

(13,403,011)

(13,403,011)

(5,471,098)

(30,317,313)

(8,591,308)

(27,197,103)

(387,439)

(26,809,664)

(5,471,098)

(30,313,671)

(8,591,308)

(27,193,461)

(387,439)

(26,806,022)

24.2%

24.2%

(93,760)

(6,487,057)

4,516,579

30,559

(*3)
( )
() -

(*1)

() .

(*2)

,
.

(*3)

(*4)

107

Tax rate (*3)


Deferred tax assets (temporary
differences, etc.)

24.2%

24.2%

4,309,108

6,517,616

Taxes retained

21,000

190,501

62,345

273,846

273,846

Recognized deferred tax assets (*2)

21,000

190,501

62,345

273,846

273,846

301,231

4,610,339

6,517,616

(16,382)

(16,382)

(163,671) (3,249,669)

(163,671)

(163,671)

Deferred tax assets (Tax deduction)


Deferred tax assets
Taxable temporary differences
Trading securities gains

(1,973,432)

- (1,973,432)

(16,382)

(3,249,669)

(22,095)

(6,506)

(22,095)

(6,506)

(6,506)

(209,520)

(8,640)

(200,880)

(200,880)

Equity method investments

(3,642)

(3,642)

(3,642)

Adjustment of conversion rights

- (15,071,747) (1,668,736) (13,403,011)

- (13,403,011)

Adjustment of warrants

- (15,071,747) (1,668,736) (13,403,011)

- (13,403,011)

Sub-total

(5,471,098)

- (30,317,313) (8,591,308) (27,197,103)

(387,439) (26,809,664)

Recognized deferred tax assets

(5,471,098)

- (30,313,671) (8,591,308) (27,193,46)

(387,439) (26,806,022)

Accounts receivable
Present Value Discount (payables)
Accrued income
Foreign currency translation gains

Tax rate (*3)


Deferred tax liabilities (temporary
differences, etc.)
Deferred tax assets (liabilities), net

24.2%

24.2%

(93,760) (6,487,057)
4,516,579

30,559

(*1) Differences arise during the tax adjustment confirmation (rectification claims) in the last period.
From the end of the reporting date to now, the deferred income tax assets cost-cutting effect is certain.
(*2) The temporary differences, loss on tax and retained tax, which can be achieved and deducted in advance,
are recognized.
(*3) The deferred income tax assets and liabilities are recognized by the expected margin tax rate, which is
determined on the basis of a fixed tax rate and excludes the temporary differences from the end of the reporting
period to now.
(4) Write-down of temporary differences (which are not recognized as deferred income tax assets).
As of the end of the reporting date, the details of the write-down of temporary differences, which are not
recognized as deferred income tax assets, are as follows:

108

( : )

2,448,260

880,794
205,492

380,382

2,828,642

1,086,286

(5)

.
( : )

(3,642)

(6)
( : )

:
14,721,809

14,721,809

(3,562,678)

11,159,131

(3,562,678)

11,159,131

1,987,716

(481,027)

1,506,689

1,987,716

(481,027)

1,506,689

3,975,432

(962,054)

3,013,378

19.
1 .
( : )

(-)

(*)


3,438,227

19,282,937

(1,055,838)

(7,270,305)

2,382,389

12,012,632

323,148

300,000

7,372

40,042

109

(Unit: KRW 000)


Write-down of temporary differences Current period
Equity method loss

Last period

2,448,260

Loss on Valuation of Securities for


using the equity method
Total

Reason for exclusion

880,794

No dividend or disposal plan to the investee


205,492company

380,382
2,828,642

1,086,286

(5) Add-up of temporary differences (which are not recognized as deferred income tax liabilities).
As of the end of the reporting date, the details of add-up of temporary differences, which are not recognized as
deferred income tax liabilities, are as follows:
(Unit: KRW 000)
Add-up of temporary
Current period
Last period
Reason for exclusion
differences.
Equity method investments

(3,642)

No dividend or disposal plan to the investee


company

(6) Details of current income tax and deferred income tax are as follows:
The details of the differences added to or deducted from income tax and the differences added to deferred
income tax on capital directly are as follows:
(Unit: KRW 000)
Current period
Subject

Pre-tax
amount

Last period
After-tax
amount

Tax effect

Pre-tax
amount

Tax effect

After-tax
amount

The acceleration of deferred


tax directly to equity
Conversion right consideration
Warrant consideration
Total

14,721,809 (3,562,678) 11,159,131

1,987,716

(481,027)

1,506,689

1,987,716

(481,027)

1,506,689

14,721,809 (3,562,678) 11,159,131

3,975,432

(962,054)

3,013,378

19. Basic earnings per share


The basic earnings per share is calculated as the profit on one ordinary share. The details of basic earnings per
share are as follows:
(Unit: KRW 000)
Division
Net profit
(-)Preferred share dividends
Net income of ordinary shares
Weighted average amount of ordinary shares (*)
Basic earnings per share

Current period

Last period

3,438,227

19,282,937

(1,055,838)

(7,270,305)

2,382,389

12,012,632

323,148 shares

300,000 shares

7,372 KRW

40,042 KRW
110

(*)
( : )

300,000

300,000

23,148

323,148

300,000

20.
,
.
( : )

28,672,689

23,083,200

5,276,500

60,000,000

105,179,785

94,437,673

94,437,673

, .

21.
.
( : )

1,256,100,000

192,654

,
.

111

(*) The calculation of weighted average amount of ordinary shares is as follows:

Division

Current period

Beginning balance
Numbers of converted preferred shares to
common shares
Weighted average amount of common stock

(Unit: share)
Last period

300,000

300,000

23,148

323,148

300,000

20. Cash Flow Statement


The cash flow statement is generated from the operating activities of the Group by indirect method. Significant
transactions without cash inflow and outflow are as follows:
(Unit: KRW 000)
Subject

Current period

Bonds debt adjustment

Last period
-

28,672,689

Long-term receivables

23,083,200

Long-term receivables

5,276,500

60,000,000

105,179,785

Convertible bonds

94,437,673

New shares of bonds with warrants

94,437,673

Long-term payables
Long-term advance payments

Notably, the cash in the cash flow statement equals the cash and cash equivalents in the financial statement.

21. Insurance Assets


At the end of the accounting period, the Group's insurance history is as follows:
Insurance assets

Insurance types

Insurance company

Domestic
distributed/kept
inventories

Comprehensive property
insurance and
transportation insurance

Meritz Fire & Marine


Insurance

(Unit: KRW 000)


Insurance
Amount insured
premium
1,256,100,000

192,654

Apart from the insurance mentioned above, employee injury insurance is provided by LIG Insurance.

112

22.
(1)
.
()
.
(2)
.

USD

92,400

92,400

92,400

TRY

5,792,800

5,792,800

5,792,800

USD

563,025,852

251,507,001

311,518,851

257,780,456

305,245,396

EUR

109,099,539

109,099,539

106,164,519

2,935,020

(3) .
( : )

Hospira Inc.

2014.10.15

234,653,939

357,204,000

(4) .
( : USD, : )

()
()


14,460,000
USD 10,000,000

(5) (
) .
(6) .
.

113

22. Details of contingent liabilities and main contracts


(1) The Group has signed contracts to hold the global right to sales and distribution for the products with
Celltrion Ltd as co-developers. Additionally, the contract contains the signed agreements about sales and
distribution right between supply companies and related parties: Celltrion Pharmaceuticals Ltd and other
Pharmaceutrical companies.
(2) According to the Groups product supply agreement, as of the end of the reporting date, the current
progressing order forms under Statement of Work (SOW) are as follows:
Division

Currency

Related special
party

Non-related
special party

Revenue recognition

Amount

Recognized

Payment collection

Unrecognized

Collected

Uncollected

USD

92,400

92,400

92,400

TRY

5,792,800

5,792,800

5,792,800

USD

563,025,852

251,507,001

311,518,851

257,780,456

305,245,396

EUR

109,099,539

109,099,539

106,164,519

2,935,020

(3) As of the end of reporting date, the details of collateral provided by the Group are as follows:
(Unit: KRW 000)
Division

Details

Date

Collateral assets

Book value

Hospira Inc.

Secondary convertible
bonds

2014.10.15

Inventories

234,653,939

Bond maximums
357,204,000

(4) As of the end of the reporting date, the details of guarantees provided to Company are as follows:
(Foreign Currency Unit: USD, currency unit: KRW 000 ')
Division

Warranty content

Warranty Provider

Warranty price

Manager

Provide collateral for advance


payments

Celltrion Pharmaceutical

14,460,000

Provide joint collateral for short-term


Celltrion Holdings
USD 10,000,000
borrowing
(5) The Group has a guarantee obligation to the pre-existing debt of the newly spun off company, Celltrion
Holdings Co., Ltd. (including contingent liabilities that occurred prior to the spinoff).
Other related party

(6) As of the end of the reporting period, the report cannot be used to predict the final outcome of the parent
companys pending litigation as defendant, in which the Group is accused of infringement of formulation
patents.

114

23.
(1)
.
(2)
1)

.
()

( : )

3 ~1

1 ~2

2 ~5

60,000,000

267,200,000

327,200,000

8,678,367

8,727,087

17,405,454

10,992,000

10,992,000

3,125,100

113,243,856

12,500,400

242,716,100

371,585,456

103,868,556

103,868,556

7,079,700

7,079,700

71,803,467

504,031,499

19,580,100

242,716,100

838,131,166

()

( : )

3 ~1

1 ~2

2 ~5

88,000,000

244,600,000

60,000,000

392,600,000

1,018,841

2,942,417

3,961,258

2,700,000

103,868,556

106,568,556

2,700,000

103,868,556

106,568,556

89,018,841

252,942,417

267,737,112

609,698,370

115

23. Financial instruments


(1) The fair value of financial instruments
Data provided at the end of reporting date does not stand for the subsequent measurement of the fair value of
financial instruments.
(2) Maturity analysis and liquidity risk management of financial liabilities
1) Maturity analysis of financial liabilities
The details of maturity analysis of financial liabilities settled by cash and cash equivalents are as follows:
(Current period)
Division
Trade payable

(Unit: KRW 000)


Less than 3 months 3 months - 1 year 1 year - 2 years 2 year - 5 years

Total

60,000,000

267,200,000

- 327,200,000

8,678,367

8,727,087

17,405,454

10,992,000

10,992,000

3,125,100

113,243,856

12,500,400

242,716,100 371,585,456

Bonds attached with


warrant

103,868,556

- 103,868,556

Performance bonds

7,079,700

71,803,467

504,031,499

19,580,100

Accounts payable
Short-term borrowing
Convertible bonds

Total
(Last period)
Division
Trade payable

7,079,700

242,716,100 838,131,166
(Unit: KRW 000)

Less than 3 months 3 months - 1 year 1 year - 2 years 2 year - 5 years

Total

88,000,000

244,600,000

60,000,000

Accounts payable

1,018,841

2,942,417

Convertible bonds

2,700,000

103,868,556

- 106,568,556

Bonds attached with


warrant

2,700,000

103,868,556

- 106,568,556

89,018,841

252,942,417

267,737,112

- 609,698,370

Total

- 392,600,000
-

3,961,258

116

2)

.

.

24.
.
( : )

166,953,094

145,287,554

25.
.
( : )

88,182,523

77,651,242

931,603,980

678,847,710

55,327,040

272,000,000

331,131,183

5,480,343

2,287,078

723,671

1,173,941,762

931,603,980

117

2) Liquidity risk management


The board of directors has the ultimate responsibility for liquidity risk management. The main tasks are to
perform short-term and long-term capital allocation, implement provisions of liquidity management and formulate
related policies. The Group has to maintain adequate reserves and borrowing limits and continuously pay
attention to the forecasted cash flow and actual cash flow. At the same time, the Group has to regulate the
relationship between the financial assets, liabilities and their term structure to perform effective liquidity risk
management.
24. Sales
Details of the Groups sales are as follows:

Division
Sales

(Unit: KRW 000)


Current period
166,953,094

Last period
145,287,554

25. Cost of goods sold


Details of the Groups cost of goods sold are as follows:

Division
Cost of goods sold

(Unit: KRW 000)


Cost of product sales
Current period

Last period

88,182,523

77,651,242

931,603,980

678,847,710

55,327,040

272,000,000

331,131,183

Amount transferred from other accounts

5,480,343

Amount transferred to other accounts

2,287,078

723,671

1,173,941,762

931,603,980

Inventories at the beginning of accounting


period
Consolidation scope changes
Goods purchased in current period

Inventories at the end of the accounting


period

118

26.
.
( : )

6,831,272

6,205,026

492,684

574,600

729,939

787,722

109,815

128,979

147,963

169,813

32,960

38,580

156,312

158,411

460,108

491,352

81,213

112,823

796,321

422,418

25,055,362

7,714,418

1,716,183

1,644,091

126,442

5,126,935

178,962

181,552

35,305

21,838

1,786,026

1,202,507

170,847

252,234

2,164,583

484,299

2,370,857

2,044,807

573,859

558,038

44,017,013

28,320,443

119

26. Sales and administrative expenses


Details of the Group's sales and administrative expenses are as follows:
(Unit: KRW 000)
Accounting subject
Salaries

Sales and administrative expenses


Current period

Last period

6,831,272

6,205,026

Retirement salaries

492,684

574,600

Employee benefits

729,939

787,722

Entertainment expenses

109,815

128,979

Communications costs

147,963

169,813

Tax expenses

32,960

38,580

Depreciation

156,312

158,411

Rent payments

460,108

491,352

Vehicle maintenance

81,213

112,823

Transportation costs

796,321

422,418

25,055,362

7,714,418

1,716,183

1,644,091

Bad debt expenses

126,442

5,126,935

Building expenses

178,962

181,552

35,305

21,838

1,786,026

1,202,507

170,847

252,234

Research expenses

2,164,583

484,299

Shares compensation

2,370,857

2,044,807

573,859

558,038

44,017,013

28,320,443

Fees
Advertising expenses

Amortization
Overseas travel expenses
Service expenses

Other sales and administrative expenses


Total

120

27.
.
( : )

6,831,272

6,205,026

492,684

574,600

729,939

787,722

460,108

491,352

156,312

158,411

32,960

38,580

8,703,275

8,255,691

121

27. The conditions requiring value-added calculations


The conditions requiring value-added calculations including sales and administrative expenses of the Group are as
follows:
(Unit: KRW 000)
Sales and administrative expenses
Accounting subject
Current period
Salary

Last period

6,831,272

6,205,026

Retirement Benefits

492,684

574,600

Employee benefits

729,939

787,722

Rent payments

460,108

491,352

Depreciation

156,312

158,411

Tax expenses

32,960

38,580

8,703,275

8,255,691

Total

122


7 2
.

1.


2014 01 01

2014 12 31

2.

( )

()

12

24

34

440

172

670

24

34

440

172

670

( : , )

123

External Audit's Content


Related laws regarding external auditsContent of external audits is performed in accordance with the
provisions of Article 7, Act 2.

1. Audit target
Company name
Audited fiscal year

Celltrion Healthcare Co., Ltd.


January 1, 2014

From

December 31, 2014

Until

2. Numbers of auditors and audit time involved.


(Unit: people, time)
Auditor / Number of
people and time

Number of people

Total

12

Audit

24

34

440

172

670

Sum

24

34

440

172

670

Stage/mid-term
review
Time

Responsible auditing accountant


Experts of
QC reviews
calculation
(Hearing Director (Business Registered
audit tax
Trainee
room, etc.)
management
Chartered
accountants valuation
director)
Accountants

124

3.

()

2014.04.23~2014.11.29

2014.11.3~2014.11.7
2015.02.09~2015.02.1

6
()
()

2015.01.05

()

()

()
()

2015.01.05

()

()

2015.03.19

125

3. Main audit content


Division
Overall audit plan
(Start-up of audit)

Details
Period performed
Main Content

2014.04.23~2014.11.29

Day

Identify audit risks and establish acting plan of mid-term and end-term
audit work
Auditors involved

Performing period
Site audit
main content

Main audit content


Resident

Non-resident

2014.11.3~2014.11.7 5 Day

Intermediate inspection and internal


management system inspection

2015.02.09~2015.02.
7 Day
16

Independent and joint audit and


IACS Review

Due Diligence
(witness) time

Inventories Due
Due Diligence
Diligence
(witness) Location
(witness)
Due Diligence
(enrollment) Target

Financial due
diligence
(witness)

External reviews

2015.01.05

1 Day

Company inventory warehouse


Company inventories

Due Diligence
(witness) time

2015.01.05

1 Day

Due Diligence
(witness) Location

Company offices

Due Diligence
(enrollment) Target

Company cash and other important factors

Financial transaction
review
Other opinion

Numbers of
Communication communication
with governing
agencies
Date performed

Bonds/debts opinion O

Lawyer opinion

Confirmation of inventory in other places


1
2015.03.19

126