Celltrion GSC 2011 AR

7/24/2019 Celltrion GSC 2011 AR

1/165

Annual Report of Celltrion GSC in 2011

1 January 2011 to 31 December 2011


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Content

Annual report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . .4Confirmation of Executives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . .. . . . . . . . .6

I. Company Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .71. Company profile. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . .72. Company history . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . .73. Change in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . .. . . . . . . . . .9

Status of outstanding convertible bonds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . 11Status of outstanding bonds with warrants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . 13

4. Total number of shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . 15Status of the total number of shares .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . .. . 15Status of the acquisition and disposal of its own shares. . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . 17

5. Status of the voting rights. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . 196. Dividend payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . .21

II. Business Overview. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23

III. Financial Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .49

IV. Auditors Opinions.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . .. . . . .. 130

V. Operational diagnosis and Analytic Opinions of the Chief Excecutive Officer. . . . . . . . . . .. . . ..133

VI. Related issues about the Company Departments (i.e. board of directors) and Subsidiaries...1381. Board of Directors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . .1382. Supervision system. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1413. The voting rights of shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .143

4. Status of subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .144

VII. Issues concerning shareholders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145The shareholding status of majority shareholder and related parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . .145Changes in the shareholding of majority shareholder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .145Status of shareholding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . .145Minority shareholders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .145

VIII. Executives and Staff. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . 1471. Status of executives and staff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1472. Remuneration of executives. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .148

IX. Transactions with stakeholders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .151

X. Necessary Measures to Protect Other Investors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155

XI. Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .159

XII. Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . .161

Confirmation of experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1631. Confirmation of experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . .1642. The interests of experts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 164


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Page | 5

Annual Report

12thperiod

Financial year: 1 January 2011 to 31 December 2011Company: Celltrion GSC CorporationCEO: Kim Tae-kuHeadquarter location: 13-35thfloor of Songdo-dong, Yeonsu-gu, Incheon (Tel) 032-850-6464Reporting Director: Lee Byeong-lyurTel: 032-850-6464


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Executive Confirmation

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

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

March 30th2012 Celltrion GSC Corp.

CEO: Kim Tae-ku

Reporting Director: Lee Byeong-lyur


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I Company Introduction

Company profile

a) Legal name and business name of the company: Celltrion GSC Corperation

bDate of establishment: 14 June 2000

cHeadquarter location: 13-3 5thfloor of Songdo-dong, Yeonsu-gu, Incheon (tel) 032-850-6464

dScale: small to medium enterpriseeMajor business: business purposes in the Article of Association

Business purposses Remarks

1. Manufacture of excipients for medicine production

2. Research and development for materials localization

3. Trade and trade agency for medicine, pharmaceutical raw materials, chemicals,

medicines for external use, basic compounds and excipients for medicine

production

4. Overall business related to each phase

5. Wholesale of equipment (machinery), parts and accessories

6. Manufacture of pharmaceutical raw materials, chemicals, and basic compounds7. Procurement and logistics consultancy

8. Procurement agency

-

Company history

a) Company history

(1) Changes after company establishment

Time Process and major changes

31 Mar 2008Change of CEO: changed from Seo Jung-jin to Kim Tae-ku

For the first time the company issued unsecured convertible bonds with a value of KRW

5 BN

Jan 12 2009

Feb 1 2009

Feb 27 2009

Mar 19 2009

Apr 2 2009

For the first time the company issued bearer bonds with non-detachable warrants with avalue of KRW 5 BNThe head office was moved from 1129-22 Guwol-dong, Namdong-gu, Incheon to 7-50

Songdo-dong, Yeonsu-gu, Incheon

The company issued unsecured convertible bonds with a value of KRW 7 BN for the

second time

The company name was changed from Nexolbiotech to Celltrion GSC

The company issued unsecured convertible bonds with a value of KRW 5 BN for the thirdtime

Nov 30 2010Equity investment from TOMATO 2 Savings Bank (2 million shares with aprice of KRW5,000 per share)

Aug 1 2011The head office was moved from 7-50 Songdo-dong, Yeonsu-gu, Incheon to 13-3Songdo-dong, Yeonsu-gu, Incheon

(2) The change in company name

The company name was changed from Nexolbiotech toCelltrion GSC through a regular

shareholders meeting on 19 March 2009


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# Changes in Capital

Capital increase/decrease(Base date: 31 December 2011) Unit: KRW, per share

Date of Share

Issurance/Decrease

Form of

Issuance/Decrease

Stock Issurance/Decrease

Category Quantity Par Value

per Share

Issurance/

Decrease Price

per Share

Remarks

Jun 22 2000

Capital increase withconsideration (rights

offering)

Commonstock

10,000 5,000 5,000 -

Apr 4 2001


offering)

Commonstock 40,000 5,000 5,000 -

Apr 17 2001


offering)

Commonstock 20,000 5,000 5,000 -

Slep 25 2001


offering)

Commonstock

16,000 5,000 5,000 -

Oct 31 2001


offering)

Commonstock 114,000 5,000 5,000 -

Mar 23 2002Capital increase with

consideration (the 3rd

offering)

Common

stock 84,700 5,000 159,400 -

Apr 24 2002Capital increase

without considerationCommon

stock 2,607,480 5,000 5,000 -

Oct 10 2002Capital reduction Common

stock 1,159,800 5,000 4,676 -


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Status of Outstanding Convertible Bonds

Base date: December 31 2011 Unit: KRW MN per share

Class

Date of

Issurance

Date of

Maturity

Total

BookValue

Type of Shares

for Conversion

Period for

Possible

Conversion

Claims

Conversion conditions Outstanding Bonds

RemarksConversion

Rate

ConversionPrice

TotalBookValue

Shares for

Possible

Conversion

First

unsecured

convertible

bonds

Dec 302008

Dec 292012

5,000Registered

conmmon stock

Mar 1 2010~

Dec 28 2012100 35,752 5,000 139,852 -

Secondunsecured

convertible

bonds

Feb 272009

Feb 62013

7,000Registered

common stock

Mar 1 2010~

Feb 25 2013100 37,600 7,000 186,170 -

Third

unsecured

convertible

bonds

Apr 22009

Apr 12013

5,000Registered

common stock

Apr 2 2010~

Apr 1 2013100 37,600 5,000 132,978 -

Total - - 12,000 - - - - 12,000 459,000 -

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


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Status of Outstanding Bonds with Warrants

Base date: Dec 31 2011 Unit: KRW MN per share

ClassDate of

Issue

Date of

Maturity

Total

Book

Value

Type of

Shares

Period for

Possible

Exercise ofOptions

ExerciseConditions

Bonds which

Have Not been

ExercisedRemarks

Exercise

Rate

Exercise

Price

Total

Book

Value

Shares for

Possible

Exercise

First

unregistered

bonds with

detachable

warrants

Jan 122009

Jan 112013

5,000

Registered

common

stock

Jan 13 2010~Jan 10 2013

100 35,752 5,000 139,852 -

Total - - 5,000 - - - - 5,000 139,852 -

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


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The total number of shares

Status of Total Number of Shares

Base date: Dec 31 2011 Unit: per share

DivisionType of Share

RemarksCommon Stock Total

. Total number of issued shares 4,000,000 - 4,000,000 -

. Total number of shares issued to date2,892,180 - 2,892,180 -

. Total number of shares which

decreased to date1,159,800 - 1,159,800 -

1. Capital reduction1,159,800 - 1,159,800 -

2. Profit redemption

- - - -3. Repayment of redeemable shares

- - - -

4. Others - - - -

. Total number of outstanding shares1,732,380 - 1,732,380 -

. Self-owned shares 233 - 233 -

. Number of outstanding shares 1,732,147 - 1,732,147 -


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15

Status of the acquisition and disposal of own shares


Acquistion Method Type of StocksBasic

Quantity

Quantity change Final

QuantityRemark

sAcquisition Disposal Redemption

Legal

acquisitionin capital

market

Direct

acquisition

Acquisitionfromexchange

Common stock - - - - - -

Preferredstock

- - - - - -

Publicpurchase


Preferredstock

- - - - - -

Exercise of

share

purchase

rights


Preferredstock

- - - - - -

Subtotal


Preferredstock

- - - - - -

Acquistion

through

trust

agreement

Quantityheld bytrustees


Preferred - - - - - -

Currentholdingquantity


Preferredstock

- - - - - -

Subtotal


Preferredstock

- - - - - -

Acquisition through other methods

Common stock 233 - - - 233 Note 1

Preferredstock

- - - - - -

Total

Common stock 233 - - - 233 -

Preferredstock

- - - - - -

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


20/165

16

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21/165

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% Status of Voting Rights


Division Number of Shares Remarks

Total number of issued shares (A)Common stock 1,732,380 -

Preferred stock - -

Number of shares without voting rights (B) Common stock - -Preferred stock - -

Number of shares with limitedvoting rights according to otherlaws (C)

Common stock 233 -

Preferred stock - -

Number of shares with resurrected votingrights (D)

Common stock - -

Preferred stock - -

Number of shares with voting rights

(E = A - B - C + D)

Common stock 1,732,147 -

Preferred stock - -


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18

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&

Dividend Repayment

Dividend Repayment in the Past 3 Years

Division 12thPeriod 11thPeriod 10thPeriod

Par value per share (KRW) 5,000 5,000 5,000

Net profit of the period (million KRW) -6,256 6,830 7,315

Earnings per share -3,612 3,943 4,223Total cash dividends (million KRW) - - -

Total stock dividends - - -

Cash dividend payout - - -

Cash dividend yieldCommon stock - - -

Preferred stock - - -

Stock dividend yield (%)Common stock - - -

Preferred stock - - -

Cash dividend per share(KRW)

Common stock

Preferred stock

Stock dividend per share

(per share)

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Preferred stock


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20

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21

II II. Business Overview

Business Overview

a) Industry Status

In recent years, investments in R&D in domestic pharmaceuticals and li fe science companies have accountedfor 2-3% of their revenues, far below the R&D investment of multi-national pharmaceutical businesses, in which

R&D accounts for nearly 15% of their revenue. Technically, the development of new material technologies is

only 25% that of developed countries. Our production technology is underdeveloped. The development of

domestic bioengineering and biotechnology is only 35-65% that of developed countries. Many bioventure

companies have emerging during these years mainly thanks to the governments encouragement to develop

this venture industry. These companies are committed to research and development on the basis of unique

technologies. In addition, large domestic pharmaceutical companies have developed revolutionary medicine. To

be accepted into the international market, they have conducted clinical experiments on human subjects in

specialized international clinical research organizations. However, they are inexperienced and face many

difficulties at the moment.

Granted the exclusive patents of advanced pharmaceutical companies in South Korea, we focus on thedevelopment of generic medicine in the domestic market and maintaining stable sales and profit. However,

due to the recent medical reform separating the prescribing and dispensing of drugs, prescriptions for foreign

original medicine have increased. As a result, domestic pharmaceutical companies are in a worse situation with

decreasing R&D investment and may even lose opportunities to develop new medicines.

To avoid this dire situation and to promote the development of the domestic biological industry:

South Korean companies should take advantage of its own high-quality talent and low production structure

to set up a domestic production base through coorperation with foreign companies which possess

advanced technologies and products. They can also make a profit through projects that are under

development or are undergoing commercialization, as well as through direct or indirect investments inproducts (medicine, medicine for external use, etc.).

We should seek out profitable overseas bio projects and create opportunities for domestic investors to

participate in them. This way, investors can make a profit, and at the same time technology transfers will

become possible.

We should see to it that excellent domestic bioventure companies possessing their own technologies

receive adequate financial support by attracting investment, so that their business models can be scaled

and industrialized.

We should help domestic bioventures, which possess self-developed technologies, to attract investment,which helps them industrialize their business.

We should promote our business through direct or indirect investments in profitable domestic and overseas bio

projects, and by securing elusive patents in other countries and regions. On one hand, we should do research on

basic bioengineering technologies and make investments in production infrastructure; on the other hand, we

should attract advanced foreign companies to build local bases for mass production and gradually advance the

development of profitable technology. In this way, we can upgrade the biological industry the sunrise industry

with high added value in the 21st century into a mainstream national industry boasting competitive strength.


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22

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27/165

23

b) Our Company Status

' Biotechnology investment projects

Established in June 2000, our company relies on international talent with years of experience in the planning

and proproposal of overseas projects. We focus on developed coutries and regions, including the US, Europe

and Japan.

Our company is seeking companies engaged in great biotechnology projects, appraising their researchprograms, investing directly and maintaining investments from domestic investors.

Our company combines foreign companies which possess advanced biotechnology with domestic capital, and

plans and promotes the establishment of joint ventures in South Korea.

Our company is engaged in the procurement of raw materials for biopharmaceutical production from

domestic and overseas suppliers, as well as the distribution of these products.

Our companys first investment project is a good example. In order to develop various therapeutic proteins for

the production of vaccines and anticancer drugs, it used the Mammalian Cell-Culture Technology of the VaxGen

Company, and established a joint venture named Celltrion. Our company will build on this achievement and

continue to promote profitable new projects.

' The localization of excipients for biopharmaceutical production

The demand for equipment for biopharmaceutical production is increasing sharply worldwide, and the market

for raw materials and excipients will expand along with it. It is necessary to purchase raw materials for

biopharmaceutical production from domestic and foreign suppliers, and upgrade the relevant distribution

channels.

In order to adjust to the change in business structure and maintain quality and price competivemess, our

company is planning to carry out its second round of commercial projects, aiming at the localization ofexcipients for biopharmaceutical production.

To this end, since most raw materials and excipients for basic biopharmaceutical production are imported from

overseas, our company plans to promote cooperation with overseas companies to establish joint efforts to

promote the technologies necessary for the development of these materials. Meanwhile, it will advance the

localization of these materials and expand its Asian market through the diversification of material production,

investment in cold-chain logistics, and the construction of domestic bases for material production.

' Procurement of reference drug

In physical and chemical comparison tests and clinical trials with originators, control tests are crucial for thedevelopment of biosimilars. Notably, the number of reference drugs used in the clinical trials of biosimilars is

even larger than the total of those used in several Eastern European countries over an entire year. It is a well

known fact that the pharmaceutical companies from which drugs originate from usually restrict the purchase of

reference drugs in order to impede the development of biosimilars.

Since its establishment, our company has run overseas projects for many years. With networks and

coldchain operation capabilities, we first started the business of the bulk purchasing reference drugs with a

price advantage, which is hard to achieve even for specialized international clinical research organizations.

Moreover, we continue to supply the development and clinical use of biosimilars. Recently, we have

expanded our business in Japan, including the supply of reference drugs for domestic clinical use and

ordering products from Japanese pharmaceutical companies.


28/165

24

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29/165

25

Since many domestic and foreign companies may eventually transition towards biosimilar production, our

company plans to increase its purchases of reference drugs, as well as its global coldchain distribution

capabilities through its overseas network and reference drug supplies.

' Agricultural goods supply to Russia

The main crop of Russia is grain, though vegetables and fruits are also grown. Due to severely inadequate

production, 90% percent of the fruits and vegetables consumed in Russia are imported. Since 1998, the

consumption of fruits and vegetables has increased by more than 80%. The agricultural producers in Russia

are advancing plastic greenhouse agriculture in large areas.Therefore, after signing agreements with local

legal personnel in Russia, our company is supplying goods to them and plans to increase capabilities within

this area.


30/165

26

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31/165

27

Sales details

a) Status of Major Products

Unit: KRW MN

Business Sectors Sales (Percentage) Gross Profit(percentage) Remarks

Air filter 5,030 (18.07%) 840 (41.90%) -

Biosimilars 19,790 (71.12%) 840 (41.90%) -

Chemical generics 352 (1.26%) 24 (1.20%) -

API 55 (0.19%) 4 (0.20%) -

Machinery 2,597 (9.33%) 297 (14.81%) -

Total 27,824 (100%) 2,005 (100%) -

b) Sales Breakdown by Sales Methods

Unit: KRW MN, %

Categories12thperiod 11thperiod

Sales Percentage Sales Percentage

Export sales

Sales of products not producedby Celltrion GSC 1,537 8.11

Sales of self-produced products - -

Sales of agent products - -

Others - -

Subtotal 1,537 8.11

DomesticSales

Sales of products not producedby Celltrion GSC

27,824 100.00 17,427 91.89

Sales of self-produced products - -

Sales of agent products - -

Others - -

Subtotal 27,824 100.00 17,427 91.89

Total 27,824 100.00 18,964 100.00


32/165

28

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33/165

29

c) Sales Channels and Sales Methods

(1) Sales organization

(2) Sales channels

Air Filter In-house direct sales

Reference drugs, etc. In-house direct sales

Plastic greenhouse materials In-house direct sales

Supp iers omestic an overseas

Korean ranc es o oreigncompanies

T e Company C ients

,&-


34/165

30

,&-

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35/165

31

(3)Sles methods and conditions

' Sales methods: supplies based on supply contracts or orders from customers

' Payment terms:after settling sales with customers (within 15 days to one month), cash payment should

be made within 15 days;after monthly sales settlement with customers, cash payment should be made

no later than the last day of the next month

(4) Sales strategy' Cooperate with target corporate clients and expand market by expanding the variety of applicable products

' Strict quality control and just-in-time management of the import and supply chain


36/165

32

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37/165

33

# Sales status

a) Export (domestic sales) by categoryUnit: KRW MN,%

Item Categories 12

th

period 11

th

periodAmount Percentage (%) Amount Percentage (%)

Air filterExport - - - -

Domestic sales 5,030 18.07 3,782 19.94

BiosimilarsExport - - - -

Domestic sales 19,790 71.12 13,645 71.95

Chemical genericsExport - - - -

Domestic sales 352 1.26

Plastic greenhousematerials

Export - - 1,537 8.11

Domestic sales - - - -

API

Export - - - -

Domestic sales 55 0.19 - -

MachineryExport - - - -

Domestic sales 2,597 9.33 - -

Total 27,824 100 18,964 100

# ,- )& 3 7*


38/165

34

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39/165

35

Unit: KRW MN, %

Item Categories12thperiod 11thperiod

Amount Percentage (%) Amount Percentage (%)

Air filter

Import - - - -

Domesticpurchase

4,457 16.74 2,792 16.47

Biosimilars

Import 19,271 72.40 13,131 77.44

Domesticpurchase

15 0.06 - -

Chemical generics

Import 328 1.23 - -

Domesticpurchase

- - - -

Plastic greenhousematerials

Import - - - -

Domesticpurchase

- - 1,034 6.09

API

Import 136 0.51 - -

Domesticpurchase

49 0.18 - -

Machinery

Import 1,242 4.66 - -

Domesticpurchase

1,119 4.20 - -

Total 26,617 100 16,957 100

,-


40/165

36

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41/165

37

c) Export (domestic sales) by business region

Unit: KRW MN, %

Item Categories Target country Amount Percentage Remarks

Air filter

Export - -

Domestic sales Domestic 5,030 18.07

BiosimilarsExport


Chemical

generics

Export

Domestic sales Domestic 352 1.26

API

Export

Domestic sales Domestic 55 0.19

MachinaryExport


Total 27,824 100.00


42/165

38

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43/165

39

d) Import (domestic purchase) by business regionUnit: KRW MN,%

Item Categories Target country Amount Percentage Remarks

Air filterImport - - -

Domestic purchase Domestic 4,457 16.74

BiosimilarsImport

Germany 447 1.68

U.K. 18,779 70.55

Switzerland 44 0.17

Domestic purchase Domestic 15 0.06

Chemical genericsImport U.S. 328 1.23

Domestic purchase Domestic - -

APIImport India 136 0.51

Domestic purchase Domestic 50 0.19

Machinary Import Germany 823 3.09

Japan 206 0.77

U.S. 152 0.57

Italy 61 0.23

Domestic purchase Domestic 1,119 4.20

Total 26,617 100.00


44/165

40

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41

$

Status of operation equipment

a) Status of Commercial Equipment

(1) Domestic

Unit: KRW MN

Category Location Land Building Total Number of employees Remarks

- - -

Total - - -

* The rented HQ office is in use

(2) Overseas

No related issue

(3) Plans for new branches establishment

No related issue

b) Other Commercial Equipment

No related issue

c) Plans for Purchasing New Equipment

(1) Ongoing investment

No related issue(2) Future investment plans

Business

SectorName of Plan

The Total ExpectedInvestment

Expected Investment by PeriodInvestment

EffectRemarks

Assets from Amount 13thPeriod 14thPeriod 15thPeriod

EquipmentEquipment,

etc.75 20 25 30

Improved officeefficiency

Total 75 20 25 30

(#

,-


46/165

42

4

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This year, we signed a contract with Woori Bank to guarantee a certain amount of return for investors who

sell the stocks of Celltrion and to allocate the excessive return to them should the scenario arise The relevant


47/165

43

sell the stocks of Celltrion, and to allocate the excessive return to them should the scenario arise. The relevant

balances are as follows: (Unit: KRW 000)

Signing Date Counterparty Target Shares Trading Profit Gains (Losses) Remarks

Jan 5 2010 Individual 140,000 shares 762,477 -226,512

120,000 out of 140,000

shares were sold

Total 762,477 -226,512

& Major operating contracts, etc.

Category Date of contract Content of contract Counterparty

Projectconstruction

contract

Apr 29 2011

Contracts for plastic greenhouseconstruction and supplementaryservices in Russia

Bogwang Construction Corporation

Projectconstruction

contractMay 5 2011

Service contract for plasticgreenhouse construction in Russia Russian legal person

Purchasecontract

May 30 2011 Purchase contract for generics CELLTRION CO.,LTD.

Trust contract forassets

managementJun 29 2011

Trust contract for the managementof fixed benefit pensions

Hana Bank

Purchasecontract Jun 29 2011 Master Supply Agreement Nippon Kayaku

(

Research and development activities

No related issue

1#

#


48/165

44

[\ )& *

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a) Summary of external financing

Domestic Financing Unit: KRW MN


49/165

45

Financing SourceBeginningBalance

New FinancingReductionthrough

RepaymentEnd Balance Remarks

Banks 23,024 0 0 23,024

Insurance companies 0 0 0 0

Comprehensive financial companies 0 0 0 0

Commercial credit companies 0 0 0 0

Mutual savings bank 11,000 0 11,000 0

Other financial institutions 2,435 14,000 0 16,435

Subtotal of financial institutions 36,459 14,000 11,000 39,459

Corporate bonds (public offering) 0 0 0 0

Corporate bonds (private placement) 22,000 0 0 22,000

Share offering (public offering) 8,662 0 8,662

Share offering (private placement) 0 0 0 0

Asset securization (public offering) 0 0 0 0

Asset securization (private placement) 0 0 0 0

Others 0 0 0 0

Subtotal of capital market 30,662 0 0 30,662

Shareholders, executives, subsidiary 0 0 0 0

Other 5,400 0 0 5,400

Total 72,521 14,000 11,000 75,521

(Reference) total number of corporate bonds issued in this periodPublic offering: KRW MNPrivate placement: KRW 22,000 MN

b) Credit rating in the past three years

(N/A)

"""#

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50/165

46

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I

III Financial summary

Financial detailsUnit: KRW


51/165

47

Unit: KRW

Classification 12thPeriod 11thPeriod 10thPeriod

Current assets 51,407,776,236 47,870,957,844 31,442,415,558

Quick assets 50,609,602,339 47,870,957,844 31,435,888,043Inventories 798,173,897 - 6,527,515

Non-current assets 380,440,887,128 367,923,832,370 170,894,495,670

Investment assets 380,439,397,058 367,915,574,500 170,885,685,000

Tangible assets 1,203,334 413,334 723,334

Intangible assets 286,736 529,536 772,336

Other non-current assets 7,315,000 7,315,000

Total assets 431,848,663,364 415,794,790,214 202,336,911,228

Current liabilities 82,992,980,938 83,675,715,991 66,206,511,960

Non-current liabil ities 81,748,492,374 69,044,215,132 27,611,485,523

Total liabil ities 164,741,473,312 152,719,931,123 93,817,997,483

Equity 8,661,900,000 8,661,900,000 8,661,900,000

Captial surplus 597,333,772 597,333,772 597,333,772

Capital adjustment -130,144,180 -194,633,770 103,664,934,481

Other accumulatedcomprehensive income

261,769,792,184 251,390,266,799 -4,210,620,738

Retained earnings -3,791,691,724 2,619,992,290 -194,633,770

Total equity 267,107,190,052 263,074,859,091 108,518,913,745Sales revenue 27,824,376,329 18,964,664,043 7,612,635,120

Operating income 903,419,671 1,169,411,422 1,514,557,299

Profit from continuousoperation

-7,101,232,091 9,466,252,286 4,623,247,608

Net profit -6,347,194,424 6,830,613,028 7,315,282,573

[%#


52/165

48

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53/165

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Attention in the use of financial statements(1) Summary of significant accounting policies

Since the beginning of this financial period, the Company has adopted the General Corporate Accounting

Standardswhich was applicable to the financial years after 1 January 2011. Therefore, the statements of

retained earnings prepared before in accordance with the previous GAAP are publicized as notes of financial

statements in compliance with paragraphs 2.4 and 2.89 of Preparation and Presentation of Financial Statements

of theGeneral Corporate Accounting Standards.The adoption has no influence on the business performance,

financial status and announcements of the Company.The significant accounting policies in the Company's

financial statements are as follows:

a) Revenue recognition criteria

The Company recognizes revenue on a delivery basis. Other revenues are recognized when the amount can be

reliably measured and when it is probable that future economic benefits will flow to the Company.

b) Cash and cash equivalents

The Company classifies the marketable securities and short-term financial instruments, which the repayment

period is less than three months, the value dont change laregely with the interest fluctuation, can be converted

into cash without large transaction cost, as cash and cash equivalent. The cash flow statements use the samecretiria.

c) Allowance for bad debts

The Company has set an allowance based on the expected amount and rate of bad debts, which is derived

from past experience.

d) Financial instruments

The Company classifies time deposits for the purpose of short-term capital operations, time deposits, and

periodical deposits of financial institutions with a maturity date less than 1 year as short-term financial

instruments. Financial instruments which do not belong to current assets are classified as long-term financial

instruments.


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2

3

3

2

2

3

2

2

3

3

2

2

2

2

2

2

(


55/165

51

e) Inventories

The Companys inventories are determined on the basis of the perpetual inventory method and regular inventory

inspection. The inventory value is calculated by the total average method and is recorded as a purchase cost.

The market value of inventory is recorded in the financial statements by inventory classification. When the

market value of the inventory is lower than the purchase costs, the valuation loss of inventories is included into

costs of goods sold and at the same time is recorded in the balance account of inventories. However, when there

is no devaluation in the inventory value and the market value is higher than the book value but lower than the

purchase costs, the valuation loss is reversed and deducted from costs of goods sold.

f) Classification and valuation of marketable securities

Marketable securities purchased for short-swing profits, when transactions happen frequently, are classified asshort-term trading securities. Securities with specific maturity dates and specified repayment amounts, and thecompany had the intention and ability to hold to maturity, are classified as held-to-maturity investments. Thoseexcluded from the above two categories are classified as available-for-sale financial assets.

The acquisition cost of marketable securities equals the market price paid at the acquisition, using the movingaverage cost method, plus the incidental cost.

Short-term trading securities and assets available for sale are appraised at the fair value. Since the fair value ofnon-marketable equity securites in the available-for-sale financial assets cannot be reliably measured, they are

appraised at the acquisition cost. For securities without a market price, its fair value equals the future cash flowscalculated by the discount rates set by authoritative independent credit rating institutions according to differentcredit ratings.

Unrealized gains of short-term trading securities are included into the current profit or loss, whereas theaccumulated gain or loss of the available for-sale securities is recognized as a gain or loss on the balance sheetafter disposal of the securities or recognition of impaired loss. When a marketable securitys recoverable amountis lower than the acquisition cost after depreciation for securities or the acquisition cost for equity securities, theyare included into asset impairment losses and are reflected in the current profit or loss.

Held-to-maturity investments are valued at acquisition cost after depreciation. During the depreciation period, thespread between the acquisition cost and the Book Value at the date of maturity is discounted by the effective

interest rate method and is deducted fromthe acquisition cost, then added by the interest income.

When a marketable securitys recoverable amount is lower than the acquisition cost after depreciation forsecurities or the acquisition cost for equity securities, is it included into the asset impairment losses and reflectedin the current profit or loss.

g) Valuation and depreciation of tangible assets

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

Classification Useful life Depreciation method

Facility 5 years Straight-line method


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52

3

2

3

2 3

2

2

3

2

(

3

2 3

2

2

$

2

3

2 3 2


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53

If an expenditure on tangible assets at acquisition or after installation can increase the future economic benefits,

it is treated as a capital expenditure. Otherwise, it is treated as an expense of the period.

In addition, when the future economic benefits of tangible assets are significantly lower than their book value

due to obsolescence or a sharp market valuation decrease, asset impairment losses are recognized as the

difference between the book value and the recoverable value. However, when the recoverable amount of the

impaired assets in the next period is higher than the book value, the excess amount above the book value but

lower than the ini tial carrying amount after deducting depreciation, was reverse in the asset impairment losses.

h) Valuation and depreciation of intangible assets

The cost of the Companys intangible assets is measured with the production cost or the purchase cost in that

year plus the incidental cost and minus depreciation calculated on the basis of the expected useful life and

depreciation method in the following chart:

Classification Depreciation Expected useful life

Right for trademark Straight-line method 5 years

In addition, in the event that the recoverable amount of intangible assets is significantly lower than the book

value due to obsolescence or sharp market value decrease, the book value shall be adjusted to the recoverable

amount, and the difference shall be recorded in the account of impairment losses for intangible assets under the

current profit or loss. When the recoverable amount of the assets whose values have been deducted by

impairment losses is higher than the book value, the excess amounts that lower than the initial carrying amount

after amortization, were reversed in the asset impairment losses.

i) Pension benefit liabilities

The Company has a defined contribution plan. According to the regulations on employee pension payments, the

estimated total amount of pension which needs to be paid to retirees who used to be full-time employees of the

Company for at least 1 year before the end of the report date is set as a pension benefit liability.

The Company has deposited the defined benefit pension in Hana Bank. The Companys contribution is recorded

as a pension plan asset and is deducted from pension benefit l iabilities. When the pension plan assets exceed the

total amount of pension benefit liabilities, the excess amount is recorded in the investment assets account. In

addition, the pension plan assets are composed of time deposits, etc.

2

2 3


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54

2

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%

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j) Convertible corporate bonds and bonds with warrants

The Company separates the liabilities equity parts in the accounting treatment of convertible corporate bonds


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55

The Company separates the liabilities equity parts in the accounting treatment of convertible corporate bonds

and bonds with warrants. The liabilities are recognized at the fair value of ordinary corporate bonds without

conversion rights or warrants, and the fair value is measured by the present value of the expected future cash

flows. The value of conversion rights or warrants is derived by deducting the value of bonds in the liabilities part

from the total value of corporate bonds, and is recorded into capital surplus.The liabilities part is discounted by

the effective interest rate method, whereas the equity part will not be measured after initial recognition.

k) The conversion of foreign currencies and liabilities

The Company converts foreign currencies and liabilities based on the closing exchange rate at the end of the

reporting period, and gains or losses via foreign currency conversion are included in the current profit or loss.

l) Amortization of discount on capital stock

In the first three years after the stock issuance year or the capital increase year, the discount on capital stock

is amortized by the same amount every period. This amount is included in the appropriation of retained

earnings. In the event that the retained earnings are negative or less than the amortization amount, theamount will be amortized the following year.

m) Income tax expense and deferred income tax assets (liabilities)

The Company, according to Income Tax Law, calculates its income tax expense as the total of income taxpayable and additional tax of the business year plus or minus the change in the deferred income tax of thebusiness year. The deferred income tax assets and liabilities are respectively determined by the differencebetween their book value and tax bases.

The deferred income tax assets and liabilities are respectively measured at the reduced amount and extra

amount of income tax in the future due to the disappearance of the temporary difference.The effect of thetemporary difference on income tax is reflected on income tax expenses, whereas the effect on equity is directly

reflected on the equity account.Deferred income tax assets are treated as assets when they can reduce the tax

on taxable income.

Deferred income tax assets and liabilities are divided into current and non-current accounts. When the deferredincome tax assets and liabilities in the same current and non-current accounts are filed to the same tax authority,they are balanced against each other and are marked.

n) Contigent liabilities

As the Company performs the present obligations because of past events or transactions, when it is probable

that recources will flow out and when the loss can be reliably measured, the loss is included into liabilities.Inaddition, contigent liabilities are recorded when the Company recognizes potential obligations according to past

events or uncertain future events. If present obligations exist because of past events or transactions, contigent

liabilities are also recorded if it is not probable for resources to flow out or when the amount of the obligations

cannot be reliably measured.

,%-

,-

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(2) Any violation of accounting standards

(3) Other matters worth attention: N/A


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57

3. Matters concerning accounting information

a) Status of allowance for bad debts

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

Classification Account Total Liabilities Allowance for Bad Debts Loan Loss Reserve Ratio

12thperiod

Accounts receivable 1,334 13 0.97%

Short-term loans 32,609 326 0.99%

Accrued income 720 7 0.97%

Total 34,663 346 0.99%

11thperiod

Accounts receivable 588 6 1.02%


Accrued income 2,502 25 1.00%

Total 24,816 248 0.99%

10thperiod

Accounts receivable 102 1 0.98%


Total 29,044 290 1.00%

(2) Status of change in allowance for bad debt in the past three business years(Unit: KRW MN)

Classification 12thPeriod 11thPeriod 10thPeriod

1. Beginning balance of allowance for bad debts 248 290 43

2. Net bad debt expense() - - 17

Bad debt expense (book value of bad debts)

Recovery amount of bad debts 12

Other changes 5

3. Allowance for bad debts (reversal) 99 42 264

4.Total ending balance of allowance for bad debts 347 248 290

,&-

0


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58

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(3) Policy on the setting of allowance for bad debts related to accounts receivable


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59

For accounts receivable balance, the allowance for bad debts is set by the bad debt rate based on past

experience and expected bad debt rate.

(4)Status of the balance of accounts receivable by age at the end of the period (Unit: KRW MN)

Classification 3 Years Total

Amount

General - - - - -

Special party 1,334 - - - 1,334

Total 1,334 - - - 1,334

Proportion 100 - - - 100

b) The holding and physical inspection history of inventories

(1).Status of inventory holding by business sector in the past three business years

(Unit: KRW MN, %)

Business Sector Accounts 12thPeriod 11thPeriod 10thPeriod Remarks

Biosimilars Goods 336 - -

Air Fillter Goods 267 - - -

Chemical generic Goods - - 6 -

API Goods 134 -

Machinery Goods 61

Total 798 6

The ratio of inventories to total assets (%)[inventories total assets at the end

of the period !100]0.185% 0.000% 0.003% -

Inventory turnover (times)[annual cost of goods sold {(beginning inventory + closing

inventory) 2}]

69.7 6321.7 1268.8 -

,%-


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61

(2) The physical inspecition history of inventories, etc

- The quantity of inventories at the end of the period is determined on the basis of the perpetual inventory

system and regular physical inspections. The value of inventories is measured by the total average method andis recorded as purchase cost. When the market value of inventories is lower than the purchase cost, the

difference (net realizable value) is included into the balance sheet by inventory classification while the loss on

valuation of inventories is included into the balance account of inventories and is added into cost of goods sold.

However, when such situation that inventories are devaluated disappeared and the new market value is higher

than the book value, but do not exceed the initial carrying amount,reverse the loss from cost of goods sold and

marked it at the same time.

- Other matters

The inventory difference between the inspection date and the balance sheet date is recognized by the

Companys goods delivery certificates and goods reception certificates

c) Change in accounting standards in recent 5 business years and the reasons

Financial year Accounting change Reason for change

2008 The investment evaluated by the equity method in

the last period was reclassified as available-for-sale

securities

The significant influence was forfeited and

was therefore reclassified as available-for-

sale securities

d) The losses in recent 5 business years and the reasons(Unit: KRW MN)

Business years Loss in this period The reason

The 12thperiod (6,347)

On the closing date of this report, Tomato Bank believed that it was

difficult for the invested enterprise to recover the net assets, so the

impairment loss is recognized in the current period.

The 9thperiod (4,324)

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

The 8thperiod (587)


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62

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e) The introduction of recent 5 business years, in which the YoY growth of net profits increased by 30% or in


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63

) y , g p ywhich the net profits turned to positive; reasons for changes in net profits

(Unit: KRW MN)

Businessyears

Net profits The reason

The 11thperiod 6,830

The net profits in current period increased thanks to the profits in acquisition ofstock options, including the first and second convertible bonds and the firstcorperate bonds with warrants.

The 10th

period7,315

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


68/165

64

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4. Financial statement

Balance sheet

The 12thperiod: 2011.12.31

The 11thperiod: 2011.12.31

(U it KRW MN)


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65

(Unit: KRW MN)

Accounting The 12thperiod The 11thperiodAsset

.Current assets 51,407,776,236 47,870,957,844

(1)Quick assets 50,609,602,339 47,870,957,844

1. Cash and cash equivelent 8,735,970,950 11,199,550,698

2. Short-term Investment (note 3,15) 32,609,343,364 21,725,573,977

Provision for bad debt (326,092,934) (217,255,240)

3. Account receivable(note 15) 1,333,776,270 587,529,360

Bad debt provision for Account receivable(13,337,763) (5,875,294)

4. Net value of Accounts receivable (note15)

719,968,873 2,501,786,858

Allowance for doubtful accounts(7,199,689) (25,017,869)

5. Other receivable - 4,095,518,833

6. Prepayment 2,970,934,014 4,799,906,564

7. Accrued tax assets (note 12) 115,355,272 -

8. Derivative commoditives(note 8) - 1,377,588,940

9. Liquid deferred income tax assets (note12)

4,470,883,982 1,831,651,017

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(2) Inventories 798,173,897 -

1. Finished goods 798,173,897 -

. Non-current assets380,440,887,128 367,923,832,37

(1) Long-term investment 380,439,397,058 367,915,574,50

1 Available-for-sale securities (note 380 360 987 587 367 915 574 500


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1. Available for sale securities (note4,7,18

380,360,987,587 367,915,574,500

2. Pension 78,409,471

(2) Tangible assets (note 5) 1,203,334 413,334

1. Consumption goods 8,510,000 7,310,000

Accumulated depreciation(7,306,666) (6,896,666)

(3) Intangible assets(note 6) 286,736 529,536

(3) Other non-current assets - 7,315,000

1. cash deposit - 7,315,000

Total assets431,848,663,364 415,794,790,214

Liabilities

.Current liabilities 82,992,980,938 83,675,715,991

1. Accounts payable (note 9,19) 1,758,224,734 959,715,998

2. Short-term loans 37,335,000,000 34,335,000,000

3. Provision for expenses (note 19) 360,065,878 255,416,728

4. Additional tax expenses 471,079,901 707,485,144

5. Advances from customers 20,604,408 2,859,918

6. Accounts payable (note 15,19) 275,206,791 302,471,255

7. Advance payment(note 15) 3,385,362,371 6,119,703,503

8.Income Tax payable (note 12)- 2,709,630,958

9. Convertible bonds(note 7,15,18,19) 17,000,000,000 17,000,000,000

Corporate bonds discounts (1,565,874,986) (2,783,676,883)

Repayment premium13,860,937,199 14,856,082,570

Adjustment of conversion(4,641,480,893) (9,044,704,762)

10. Corporate bonds with warrants(note7,18,19)

5,000,000,000 5,000,000,000

Corporate bonds discounts(300,335,585) (575,532,727)

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.Capital reserves (543%%%344" (543%%%344"

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74/165


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Income statement

Income statement

The12thperiod:2011.1.1-2011.12.31

The 11thperiod: 2010.1.1-2010.12.31

Celltrion GSC Unit: KRW

Accounting The 12thperiod The 11thperiod

I Revenue (note 12)


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I.Revenue (note 12)27,824,376,329 18,964,664,043

.Cost of sales note 16 25 818 905 015 16 963 692 158

.Gross profits 2,005,471,314 2,000,971,885

.Selling and administrationex enses note 15

1,102,051,643 831,560,463

.Operating income 903,419,671 1,169,411,422

.Other income 11,129,773,751 20,754,950,919

1.Interest income note 152,899,655,527 1,855,549,359

1. Dividends 800,303,475

2. Earnings from Foreignexchange trading

82,549,962 36,351,195

3. Earnings from conversion offoreign currency

8,749,315 59

5.Reversal of bad debt provision - 47,145,960

6. Income from disposal ofavailable-for-sale securities (note 4)

6,295,403,556 8,530,332,119

7.Income from transaction ofderivative commodity (Note8)

762,477,395 8,700,424,873

8. Income from derivative

commodity (note 8)

- 1,377,588,940

8. Other income 41,442 3,297

.Non-operating expenditures 19,134,425,513 12,458,110,055

1.Interest expenses 8,599,786,747 8,456,590,896

1. Losses from Foreign exchange 212,789,229 59,760,605

2. Losses from conversion offorei n currenc

168,122 4,148,577

3. Other bad debt and 92,019,514 -

4. Loss of evaluation of Option - 3,730,615,629

6. Loss of evaluation of derivatioecommodit note 8

226,512,120

7.Impairment of available-for-salesecurities

9,907,539,513

8. Commission fees 96,261,800 206,474,539

9. Other loss348,468 519,809

.Less:profit/loss before income (7,101,232,091) 9,466,252,286

.Income tax ex ense note 12 754,037,667 2,635,639,258

.Net income (loss) (note 13,14) (6,347,194,424) 6,830,613,028

#

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

31

) & *


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)& *

"#$#2#$2#$)

*

+3,,$35##3### (543%%%344" )$5-3,%%344#* $#%3,,-35%-3-

+$

)-3"$#3,"#34%

+*

$#+3($+35$%34

-(

' ' ' ' ,3+%#3,$%3#"+ ,3+%#3,$%3#"+

' ' ' $-434"(3%%"3%

$+

' $-434"(3%%"3%

$+

"#$#2$"2%$ +3,,$35##3### (543%%%344" )$5-3,%%344#* "($3%5#3",,34

55

"3,$5355"3"5# ",%3#4-3+(53#

5$

"#$$2#$2#$)

*

+3,,$35##3### (543%%%344" )$5-3,%%344#* "($3%5#3",,34

55

"3,$5355"3"5# ",%3#4-3+(53#

5$

' ' ,-3-+53(5# ' ),-3-+53(5#* '

' ' ' ' ),3%-43$5-3-"

-*

),3%-43$5-3-"

-*

' ' ' $#3%453("(3%+

(

' $#3%453("(3%+

(

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("

Statement of changes in equity

Statement of changes in equityThe 12thperiod: 2011.1.12011.12.31

The 11thperiod: 2010.1.12010.12.31



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Accounting CapitalCapital reserves

Adjustment of

capital

Other

comprehensiveTotal

2010.01.01

(reported

amounts)

8,661,900,000 597,333,772 (194,633,770) 103,664,934,481 (4,210,620,738) 108,518,913,7

45

Net income in this

period

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

Income from

the evaluation

of available-for-

sale securities

- - - 147,725,332,318 - 147,725,332,3

18

2010.12.31 8,661,900,000 597,333,772 (194,633,770) 251,390,266,799 263,074,859,0

91

2011.01.01(report

ed amounts)

8,661,900,000 597,333,772 (194,633,770) 251,390,266,799 2,619,992,290 263,074,859,0

91

Corporate bondsdiscounts

- - 64,489,590 - (64,489,590) -

Net income in thisperiod

- - - - (6,347,194,424)

(6,347,194,424)

Income from

the evaluation

of available-for-

sale securities

- - - 10,379,525,38

5

- 10,379,525,38

5

2011.12.31 8,661,900,000 597,333,772 (130,144,180) 261,769,792,1

84

(3,791,691,724

)

267,107,190,0

52

#

$" "#$$ $ $ "#$$ $" %$ $$ "#$#

$ $ "#$# $" %$

)& *


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$$ )* $# )*

. "35$-3$$-3,%5 -3,453,4"34"+

$2)* ),3%-43$5-3-"-* ,3+%#3,$%3#"+

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2 "%3+4(3-+# '

2 43-,"3-,5 -3+(-344,

2 -$#3### %$#3###

2 "-"3+## "-"3+##

2 (3(5-3#$(3"%" (3,453"$+3(4#

2 5$3#$53($- '

Cash flow statement

Cash flow statement

The 12thperiod: 2011.1.12011.12.31

The 11thperiod: 2010.1.12010.12.31


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accounting The 11thperiod The 10thperiod

Cash flows from operating activities 2,914,114,639

4,679,672,728

1. Net income in this period (6,347,194,424) 6,830,613,028

2. Total non-cash expenses 15,851,077,128 9,415,241,775

1.Retirement pay 23,875,480 -

2.provision for bad debt 7,462,469 4,854,776

3.Depreciation expense 410,000 310,000

4.Amortization 242,800 242,800

5.Interest cost 5,594,015,232 5,679,218,570

6. Other provision for bad debt 91,019,514 -

2 ' %34%#3,$(3,"5

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2 535#43(%53($%

%2 ),3"5(3-#%3((,* )$-3#-(35$$3%""

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2

' -43$-(35,#

2 ,3"5(3-#%3((, +3(%#3%%"3$$5

2 ' -3#5#3+--3%#%

2 ' $3%443(++35-#

-2 )"5-3%,-3(#5* "3-4534"53"-4

2 )4-,3"-,35$#* )-+(3-443("#*

2 )* $34+$3+$435+( )$3,-43"#-3%#,*

2 )* -3#5(3($+3+%% )%3+5,35$#*

2 )* $3+"+354"3((# )%34+43%543%,4*

2 ' "$3,--3%+-

2 $3$+#345#3("# '

2 )* )$$(3%((3"4"* +-3##-3($#

2 )* )"3,%53"%"35,(* )$3(",3%(%3-%4*

2 )* )45+3$4%3+54* ,3%"-3+5$

2 ' "#"3,"-

2 45+3(#+34%, 4$,3%4-3(45

2 $#-3,-53$(# $4%3,,53,54

2 )* )"%,3-#(3"-%* (-#3"+%3554

2 )* $434--3-5# ),,3,(#*

2 )* )(,354+3$,-* "+$3#+$3$"$

2 )* )"34%-3%-$3$%"* -3+4#35#%3"#%

2 )* )"34#53,%#35(+* "34#53,%#35(+

2 %,3"+"34$5 (",3##(3-4%

2 )$#"3"+-35($* '

. )+3%443,5-3%+4* (34%$3%4-35("

$2 -+3+++3+#+3"-% $+3-#43+"53",4

2 -,3%+$3(%%3"-% 535#43+%43",4

2 "3-5535,#3### +3-55355"3###

2 43%$(3### '

"2 )(43",,3(#"3,%#

*

)$"3,4,3-(-3%$(

*

2 (43",(3%#"3,%# "3,4,3-(-3%$(

7.Loss of the option evaluation - 3,730,615,629

8.Loss of the evaluation of derivative commodities 226,512,120

9.Impairment loss of avabliable-for-sale securities 9,907,539,513

3. Non-cash income (6,295,403,556)(14,045,911,322)

1.Reversal of bad debt provision - 47,145,960


81/165

p , ,

2.Income of avabliable-for-sales securities6,295,403,556 8,530,332,119

3.Income of derivative commodity-

4,090,844,303

4. Income of the evaluation of derivative commodity-

1,377,588,940

4.Changes in assets and liabilities through operatingactivities

(294,364,509) 2,479,729,247

1.Increase in accounts receivable (746,246,910) (485,477,520)

2. Increase(decrease) in uncollected income1,781,817,985 (1,647,204,306)

3.Decrease(increase) in accounts receivable

4,095,518,833 (3,896,910)4.Decrease(increase) in advance payment1,828,972,550 (3,787,397,367)

5.Decrease(increase) in prepaid expense- 21,644,384

6.Decrease(increase) in derivative commodity 1,180,790,520-

7.Decrease(increase) in tax refund (115,355,272) 84,004,510

8.decrease(increase) in liquid deferred tax assets(2,639,232,965) (1,526,353,437)

9.Decrease(increase) in goods (798,173,897) 6,324,891

10.Decrease(increase) in goods receivable-

202,624

11.Increase(decrease) in accounts payable798,508,736 716,374,579

12.Increase in accrued expenses 104,649,150 173,669,697

13.Increase(decrease) in advanced additional t ax(236,405,243) 540,283,997

14.Decrease(increase) in deposit received 17,744,490 (66,650)

1. Increase(decrease) in accounts payable (56,978,164) 281,081,121

2.Increase(decrease) in deposit received (2,734,341,132) 4,870,903,203

3.Increase(decrease) in withholding tax (2,709,630,958) 2,709,630,958

4.Increase in non-liquid deferred tax liability 36,282,719 526,005,473

5.Increase in retirement assets (102,284,951) -

. Cash flows from investing activities (8,377,694,38

5,731,374,952

Cash received from disposal of investment 48,888,808,243 18,407,829,267

1.Decrease in short-term investment assets 46,381,533,243 9,907,837,267

2.The dispose of available-for-sale securities2,499,960,000 8,499,992,000

3.Decrease in cash deposit7,315,000 -

1.Cash received from disposal of investment (57,266,502,630) (12,676,454,315

3.Increase in short-term investment assets 57,265,302,630 2,676,454,315

2 ' $#3###3###3###

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)$$3###3###3###*

)$"3"##3###3###*

2 $$3###3###3### (3"##3###3###

2 ' 43###3###3###

.))(++) )"3-,%3(4534-+* $#3+$$3#-43,+#

. $$3$553((#3,5+ %++3(#%3#$+

. +34%(354#35(# $$3$553((#3,5+

4.The purchase of available-for-sale - 10,000,000,000

5.The purchase of consumption goods 1,200,000 -

.Cash flows from financing activities 3,000,000,000 400,000,000


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1. Cash received from financing activities 14,000,000,000 12,600,000,000

1. Increase in short-term loans 14,000,000,000 12,600,000,000

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

(12,200,000,000

)

1. Repayment of Short-term loans 11,000,000,000 5,200,000,000

2. Repayment of liquid long-term

loans

- 7,000,000,000

.Increase(decrease) of cash (I+II+III) (2,463,579,748) 10,811,047,680

.Cash at the beginning of period 11,199,550,698

388,503,018

.Cash at the end of period 8,735,970,950

11,199,550,698

Celltrion GSC 2011 AR

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Transcript of Celltrion GSC 2011 AR