UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of March, 2014
Commission File Number 000-51138
GRAVITY Co., Ltd.
(Translation of registrant’s name into English)
15F, 396 World Cup buk-ro, Mapo-gu, Seoul 121-795, Korea
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F: x Form 20-F o Form 40-F
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): o
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): o
RESULTS OF THE ANNUAL GENERAL MEETING OF SHAREHOLDERS AND THE BOARD MEETING OF GRAVITY CO., LTD.
Gravity Co., Ltd. (the “Company”) held its Annual General Meeting of Shareholders (the “AGM”) at the Conference Room located at 15F, 396 World Cup buk-ro, Mapo-gu, Seoul 121-795 Korea at 10:00 a.m. on March 26, 2014.
The AGM was held with a quorum present and the agenda items were resolved by the shareholders in accordance with the Korean Commercial Code and the Company’s Articles of Incorporation as follows:
· Agendum 1: the shareholders approved the Company’s non-consolidated and consolidated financial statements as of and for the years ended December 31, 2013 and 2012 prepared in accordance with Accounting Standards for Non-Public Entities in Korea, or KAS-NPE, and audited in accordance with Generally Accepted Auditing Standards in Korea, or K-GAAS.
· Agendum 2: the shareholders approved the reappointment of seven directors, Messrs. Hyun Chul Park, Yoshinori Kitamura, Kazuki Morishita, Kazuya Sakai (who are inside directors) and Messrs. Jong Gyu Hwang, Doo Hyun Ryu and Jung Yoo (who are independent directors).
· Agendum 3: the shareholders approved the amount of KRW 1,400,000,000 as the maximum amount of compensation payable to directors as a group for fiscal year 2014.
Furthermore, the Company’s 2013 Annual Business Report was presented to the shareholders at the AGM.
The Company’s Board of Directors, consisting of the seven reelected directors, held a meeting immediately following the AGM (the “Board Meeting”). At the Board Meeting, Mr. Hyun Chul Park was reappointed as Chief Executive Officer and Mr. Yoshinori Kitamura was reappointed as Chairman of the Board of Directors.
Messrs. Jong Gyu Hwang, Doo Hyun Ryu and Jung Yoo were reappointed as Audit Committee members at the Board Meeting.
The Company expects to file the Company’s non-consolidated and consolidated financial statements, including the notes thereto, which are prepared in the Korean language prepared in accordance with KAS-NPE and audited in accordance with K-GAAS as of and for the years ended December 31, 2013 and 2012 (“2013/2012 KAS-NPE non-consolidated and consolidated financial statements”) with the Financial Supervisory Service of Korea on April 3, 2014. The condensed English translation version of the 2013/2012 KAS-NPE non-consolidated and consolidated financial statements is expected to be submitted to the United States Securities and Exchange Commission on Form 6-K at the same time.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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GRAVITY CO., LTD. | |
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By: |
/s/ Heung Gon Kim |
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Name: |
Heung Gon Kim |
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Title: |
Chief Financial Officer |
Date: March 26, 2014
Exhibit Index
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Exhibit No. |
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Description |
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99. 1 |
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Gravity Reports Non-consolidated Financial Results for 2013 |
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99. 2 |
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Gravity Reports Consolidated Financial Results for 2013 |
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99. 3 |
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2013 Annual Business Report |
Exhibit 99.1
GRAVITY REPORTS NON-CONSOLIDATED FINANCIAL RESULTS FOR 2013
Seoul, South Korea, March 26, 2014 - GRAVITY Co., Ltd. (NasdaqGM: GRVY) (“Gravity’“ or the “Company’“), an online game developer and publisher based in South Korea, announces its non-consolidated financial results for the fiscal year ended December 31, 2013, prepared in accordance with Accounting Standards for Non-Public Entities in Korea. Financial statements are available on Edgar at http://www.sec.gov.
REVIEW OF FINANCIAL RESULTS
Revenues and Cost of Revenues
Revenues for 2013 were KRW 26,257 million (US$ 24,882 thousand), representing a 34.5% decrease from KRW 40,105 million for 2012.
Royalties and licensing fees revenue for 2013 was KRW 22,060 million (US$ 20,905 thousand), representing a 27.6% decrease from KRW 30,486 million for 2012. This decrease primarily resulted from decreased revenues from Ragnarok Online in Japan and the strengthening of the Korean Won against the Japanese Yen. Such decrease was partially offset by the revenues from Ragnarok Online II, which was launched in Singapore, Malaysia, the United States, Canada, Indonesia, Thailand and 53 other countries and markets during 2013, and the revenues from Ragnarok Online in China where the game was relaunched in February 2013.
Subscription revenue decreased by 55.0% to KRW 2,446 million (US$ 2,318 thousand) in 2013 from KRW 5,438 million in 2012. The decrease resulted mainly from the significant decrease in revenues from Finding Neverland Online, which the Company ceased offering in July 2013.
Mobile game revenue for 2013 was KRW 544 million (US$ 516 thousand), representing a 64.0% decrease from KRW 1,512 million for 2012.
Character merchandising and other revenue was KRW 1,207 million (US$ 1,143 thousand) in 2013, representing a 54.8% decrease from KRW 2,669 million in 2012. The decrease was mostly attributable to decreased revenues from Ragnarok Odyssey, a PS Vita game, which was released in 2012.
Cost of revenues was KRW 20,047 million (US$ 18,997 thousand) in 2013, representing a 1.3% decrease from KRW 20,304 million in 2012. The decrease in cost of revenues was mainly attributable to decreased outsourcing fees related to game development.
As a result of the foregoing factors, gross profit for 2013 was KRW 6,210 million (US$ 5,885 thousand), representing a 68.6% decrease from KRW 19,801 million for 2012. The gross profit ratio decreased to 23.7% in 2013 from 49.4% in 2012.
Selling, General & Administrative Expenses (“SG&A”)
The Company’s total SG&A decreased 27.7% to KRW 14,163 million (US$ 13,421 thousand) in 2013 compared with KRW 19,601 million in 2012. This decrease in SG&A was mostly attributable to decrease in advertising expenses mainly due to decreased marketing expenses for Ragnarok Online, and for open beta testing and commercial launch of Finding Neverland Online and Ragnarok Online II, which did not occur in 2013.
Based on the foregoing factors, the Company recorded an operating loss of KRW 7,953 million (US$ 7,536 thousand) in 2013, compared to an operating income of KRW 200 million in 2012.
Non-operating Income and Non-operating Expenses
Non-operating income for 2013 was KRW 2,243 million (US$ 2,126 thousand) compared with KRW 4,494 million in 2012 representing a 50.1% decrease, which was primarily due to gain on valuation of equity-method investment in 2012, which did not occur in 2013.
Non-operating expenses for 2013 were KRW 6,466 million (US$ 6,127 thousand), a 57.4% decrease from KRW 15,171 million in 2012, which was due primarily to decreased impairment loss on equity method investments related to Gravity Games Corporation and loss on valuation of equity-method investment.
Loss before income tax for 2013 was KRW 12,176 million (US$ 11,537 thousand), compared with loss before income tax of KRW 10,477 million in 2012.
Gravity recorded a net loss of KRW 17,955 million (US$ 17,015 thousand) in 2013 compared with a net loss of KRW 14,298 million in 2012.
The balance of cash and cash equivalents and short-term financial instruments was KRW 41,402 million (US$ 39,234 thousand) as of December 31, 2013.
Note: For convenience purposes only, the KRW amounts have been expressed in U.S. dollars at the rate of KRW 1,055.25 to US$1.00, the noon buying rate in effect on December 31, 2013 as quoted by the Federal Reserve Bank of New York.
Exhibit 99.2
GRAVITY REPORTS CONSOLIDATED FINANCIAL RESULTS FOR 2013
Seoul, South Korea, March 26, 2014 - GRAVITY Co., Ltd. (NasdaqGM: GRVY) (“Gravity’“ or the “Company’“), an online game developer and publisher based in South Korea, announces its consolidated financial results for the fiscal year ended December 31, 2013, prepared in accordance with Accounting Standards for Non-Public Entities in Korea. The consolidated subsidiary as of December 31, 2012 and as of December 2013 is NeoCyon, Inc., or Neo Cyon. The other subsidiaries of the Company are not subject to consolidation under Enforcement Decree of the Act on External Audit of Stock Companies of Korea and are accounted for as equity method investments. Financial statements are available on Edgar at http://www.sec.gov.
REVIEW OF FINANCIAL RESULTS
Revenues and Cost of Revenues
Revenues for 2013 were KRW 42,438 million (US$ 40,216 thousand), representing an 18.3% decrease from KRW 51,951 million for 2012.
Royalties and licensing fees revenue for 2013 was KRW 22,224 million (US$ 21,060 thousand), representing a 28.8% decrease from KRW 31,211 million for 2012. This decrease primarily resulted from decreased revenues from Ragnarok Online in Japan and the strengthening of the Korean Won against the Japanese Yen. Such decrease was partially offset by the revenues from Ragnarok Online II, which was launched in Singapore, Malaysia, the United States, Canada, Indonesia, Thailand and 53 other countries and markets during 2013, and the revenues from Ragnarok Online in China where the game was relaunched in February 2013.
Subscription revenue decreased by 55.0% to KRW 2,446 million (US$ 2,318 thousand) for 2013 from KRW 5,438 million for 2012. The decrease resulted mainly from the significant decrease in revenues from Finding Neverland Online, which the Company ceased offering in July 2013.
Mobile game revenue for 2013 was KRW 14,504 million (US$ 13,745 thousand), representing a 75.6% increase from KRW 8,262 million for 2012. The increase was mostly driven by the revenues from NeoCyon’s mobile game operation service for a third party and the revenues from Ragnarok Online — Uprising: Valkyrie.
Character merchandising and other revenue was KRW 3,264 million (US$ 3,093 thousand) for the 2013, representing a 53.6% decrease from KRW 7,040 million in 2012. The decrease was mostly attributable to decreased revenues from Ragnarok Odyssey, a PS Vita game, which was released in 2012, and the revenues from sales of goods related to mobile phones in 2012, which did not occur in 2013.
Cost of revenues was KRW 30,924 million (US$ 29,305 thousand) for 2013, representing a 7.9% increase from KRW 28,671 million for 2012. The increase in cost of revenues was mainly attributable to increased commission paid mostly related to our service provided to third parties, and for digital storefronts where our mobile games are offered, as well as increased salaries resulting from commercial launch of some of our mobile games and increased number of mobile game developers of
NeoCyon. Such increase was substantially offset by decreased outsourcing fees, which is mostly related to development of online and mobile games, and cost of goods sold associated with sales of goods related to mobile phones in 2012, which did not occur in 2013.
As a result of the foregoing factors, gross profit for 2013 was KRW 11,514 million (US$ 10,911 thousand), representing a 50.5% decrease from KRW 23,280 million for 2012. The gross profit ratio decreased to 27.1% in 2013 from 44.8% in 2012.
Selling, General & Administrative Expenses (“SG&A”)
The Company’s total SG&A decreased 10.2% to KRW 20,242 million (US$ 19,182 thousand) for 2013 compared with KRW 22,552 million for 2012. This decrease in SG&A was mostly attributable to decrease in advertising expenses mainly due to decreased marketing expenses for Ragnarok Online, and for open beta testing and commercial launch of Finding Neverland Online and Ragnarok Online II, which did not occur in 2013.
Based on the foregoing factors, the Company recorded an operating loss of KRW 8,728 million (US$ 8,271 thousand) in 2013, compared to an operating income of KRW 728 million for 2012.
Non-operating Income and Non-operating Expenses
Non-operating income for 2013 was KRW 2,291 million (US$ 2,171 thousand) compared with KRW 3,515 million in 2012 representing a 34.8% decrease, which was primarily due to gain on valuation of equity-method investment in 2012, which did not occur in 2013.
Non-operating expenses for 2013 were KRW 6,309 million (US$ 5,979 thousand), a 59.3% decrease from KRW 15,491 million in 2012, which was due primarily to decreased impairment loss on equity method investments related to Gravity Games Corporation and loss on valuation of equity-method investment.
Loss before income tax for 2013 was KRW 12,746 million (US$ 12,079 thousand), compared with loss before income tax of KRW 11,248 million in 2012.
Gravity recorded a net loss of KRW 17,984 million (US$ 17,042 thousand) for 2013 compared with a net loss of KRW 14,229 million for 2012.
The balance of cash and cash equivalents and short-term financial instruments was KRW 47,725 million (US$ 45,226 thousand) as of December 31, 2013.
Notes:
1) The Company reclassified certain revenue within Mobile games revenue as Character merchandising and other revenue in 2013 as this better represents the nature of the revenue. The same reclassification has been made to 2012 to conform to the presentation of 2013. The reclassification has no effect on the Company’s previously reported total net revenue and other line items on the consolidated financial statements.
2) For convenience purposes only, the KRW amounts have been expressed in U.S. dollars at the rate of KRW 1,055.25 to US$1.00, the noon buying rate in effect on December 31, 2013 as quoted by the Federal Reserve Bank of New York.
Exhibit 99.3
2013 Annual Business Report
Table of Contents
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1. |
Business Overview |
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(1) |
Business Results and Financial Statements for the Past Three Fiscal Years (2011 — 2013) |
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2. |
Company Overview |
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(1) |
Registered Purpose of the Company |
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(2) |
Description of Primary Business |
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(3) |
Problems Confronting the Company |
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(4) |
Business Offices and Game Development Facilities |
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(5) |
Stock |
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(6) |
Debenture |
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(7) |
Major Shareholders |
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(8) |
Investment in Other Companies |
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(9) |
Directors Holding Concurrent Positions |
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(10) |
Material Transactions with Related Parties |
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(11) |
Significant Creditors |
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(12) |
Employees |
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(13) |
Directors and Auditors |
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(14) |
Material Events after the End of Fiscal Year 2013 |
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3. |
Non-Consolidated Financial Statements as of and for the fiscal years ended December 31, 2013 and 2012 |
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(1) |
Balance Sheets |
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(2) |
Income Statements |
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(3) |
Statements of Disposition of Accumulated Deficit |
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(4) |
Statements of Changes in Equity |
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(5) |
Statements of Cash Flows |
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(6) |
Notes to Non-Consolidated Financial Statements |
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4. |
Consolidated Financial Statements as of and for the fiscal years ended December 31, 2013 and 2012 |
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(1) |
Consolidated Balance Sheets |
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(2) |
Consolidated Income Statements |
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(3) |
Consolidated Statements of Changes in Equity |
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(4) |
Consolidated Statements of Cash Flows |
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(5) |
Notes to Consolidated Financial Statements |
1. Business Overview
(1) Business Results and Financial Statements for the Past Three Fiscal Years (2011 — 2013)
(In Korean Won)
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Category |
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2013 |
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2012 |
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2011 |
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Current assets |
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47,505,633,406 |
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55,717,624,294 |
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61,944,250,781 |
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· Quick assets |
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47,505,633,406 |
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55,717,624,294 |
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61,944,250,781 |
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Non-current assets |
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35,940,889,480 |
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48,466,233,817 |
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56,759,120,403 |
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· Investment asset |
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10,391,266,236 |
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13,658,241,648 |
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21,072,545,640 |
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· Tangible asset |
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651,534,949 |
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1,007,535,695 |
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1,261,672,069 |
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· Intangible asset |
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13,573,210,684 |
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19,286,513,607 |
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19,905,123,988 |
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· Other non-current asset |
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11,324,877,611 |
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14,513,942,867 |
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14,519,778,706 |
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Total assets |
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83,446,522,886 |
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104,183,858,111 |
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118,703,371,184 |
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Current liabilities |
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7,914,388,543 |
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8,611,856,040 |
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9,847,425,028 |
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Non-current liabilities |
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6,725,211,896 |
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8,748,925,892 |
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7,531,044,348 |
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Total liabilities |
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14,639,600,439 |
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17,360,781,932 |
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17,378,469,376 |
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Common stock |
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3,474,450,000 |
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3,474,450,000 |
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3,474,450,000 |
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Additional paid-in capital |
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75,380,209,013 |
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75,380,209,013 |
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75,380,209,013 |
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Retained earnings (Accumulated deficit) |
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(11,419,602,518 |
) |
6,535,090,813 |
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20,833,492,247 |
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Accumulated other comprehensive income and loss |
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1,371,865,952 |
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1,433,326,353 |
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1,636,750,548 |
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Total equity |
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68,806,922,447 |
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86,823,076,179 |
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101,324,901,808 |
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Revenues |
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26,257,395,408 |
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40,104,850,485 |
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40,224,258,623 |
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Operating income (loss) |
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(7,952,560,429 |
) |
200,286,936 |
|
8,462,252,055 |
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Income (loss) before income tax |
|
(12,175,488,665 |
) |
(10,477,026,633 |
) |
7,987,324,201 |
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Net income (loss) |
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(17,954,693,331 |
) |
(14,298,401,434 |
) |
14,771,572,441 |
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2. Company Overview
(1) Registered Purpose of the Company
1) Software consulting, development and supply
2) Development and sales of software and CD
3) Information-technology-related software development
4) Production, development, distribution, sales and consulting of digital contents, including game software, as well as corresponding licensing
5) Online network game services
6) Applied package-related software development
7) Production and sales of computer programs
8) Import and export of software
9) E-commerce
10) Character development business
11) Animation business
12) Real estate leasing
13) Service-area restaurant business
14) Media-related business
15) Printing and publication
16) Record & video production and distribution
17) Any other businesses incidental to the above businesses
(2) Description of Primary Business
Gravity Co., Ltd. (the “Company”) is the developer of Ragnarok Online, an MMORPG, which was launched in August 2002 and is commercially offered in 60 markets worldwide, including Korea, Japan, Taiwan, Southeast Asia, the United States and Europe as of December 31, 2013. Requiem, which was commercially launched in October 2007, is currently serviced worldwide including the United States and Russia. In March 2012, the Company released Ragnarok Online II, which is currently serviced in 60 markets, including the Unites States and Europe as of December 31, 2013.
Having strong global network and success from Ragnarok Online, the Company is expanding its business areas from online game development and publishing to cultural contents business based on various platforms, such as development of games for smartphones, console and IPTV, and animation and game character merchandising.
In addition, in order to strengthen its presence in the overseas markets, the Company has subsidiaries in the United States and Japan, and joint venture companies in France. The Company also has subsidiaries in Korea, such as NeoCyon, Inc. and Gravity Games Corp.
(3) Problems Confronting the Company
Since the Company operates in a highly competitive industry, the Company is making every effort to enhance its development capacity and to maintain and increase its market share in overseas markets to preserve its competitive advantage.
Due to its high dependence on Ragnarok Online, the Company is in need of diversified revenue structure, global market expansion and new business initiatives for sustainable revenue growth. The Company is doing its best to build its next game line-up through enhancing mobile game business.
(4) Business Offices and Game Development Facilities
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Classification |
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Location |
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Head Office |
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(Nuritkum Square Business Tower) 15F, 396 World Cup buk-ro, Mapo-gu, Seoul 121-795, Korea |
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Game Development Facilities |
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(Nuritkum Square R&D Tower) 15F, 396 World Cup buk-ro, Mapo-gu, Seoul 121-795, Korea |
(5) Stock
1) Total number of shares
(As of December 31, 2013)
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Total number of shares authorized |
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Total number of shares issued |
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Total number of shares unissued |
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40,000,000 shares |
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6,948,900 shares |
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33,051,100 shares |
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2) Type of Stock issued (Par value per share: KRW 500)
(As of December 31, 2013)
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Type |
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Number of shares |
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Total par value |
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% |
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Registered common stock |
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6,948,900 shares |
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KRW |
3,474,450,000 |
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100 |
% |
(6) Debenture: None.
(7) Major Shareholders
(As of December 31, 2013)
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Shareholder |
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Shares owned |
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% |
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Transaction with the Company |
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GungHo Online Entertainment, Inc. |
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4,121,739 |
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59.31 |
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* |
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Others |
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2,827,161 |
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40.69 |
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— |
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Total |
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6,948,900 |
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100.00 |
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— |
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* Refer to “(10) Material Transactions with Related Parties.”
(8) Investment in Other Companies
(As of December 31, 2013)
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Companies |
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Relationship with the Company |
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Name |
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Location |
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Common Stock |
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Main business |
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Shares owned |
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% |
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Relationship |
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Gravity Interactive, Inc. |
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California, US |
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USD |
5,040,000 |
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Gaming Service |
|
100,000 |
|
100.00 |
% |
Subsidiary |
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Gravity Entertainment Corp. |
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Tokyo, Japan |
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JPY |
167,850,000 |
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Animation making/service |
|
1,000 |
|
100.00 |
% |
Subsidiary |
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|
Gravity Middle East & Africa FZ-LLC* |
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Dubai, U.A.E. |
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AED |
7,800,000 |
|
Gaming Service |
|
7,800 |
|
100.00 |
% |
Subsidiary |
|
|
NeoCyon, Inc. |
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Seoul, Korea |
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KRW |
964,005,000 |
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Mobile game development |
|
185,301 |
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96.11 |
% |
Subsidiary |
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Gravity Games Corp. |
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Seoul, Korea |
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KRW |
1,134,730,000 |
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Online game development |
|
194,035 |
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85.50 |
% |
Subsidiary |
|
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Gravity EU SAS |
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Paris, France |
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EUR |
1,000,000 |
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Gaming Service |
|
2,500 |
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25.00 |
% |
Joint Venture |
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* The liquidation of Gravity Middle East & Africa FZ-LLC was in progress as of December 31, 2013.
(9) Directors Holding Concurrent Positions
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Company | ||||
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Name |
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Name |
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Position |
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Responsibility |
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Hyun Chul Park |
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Gravity Co., Ltd. |
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CEO |
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Overall management |
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|
NeoCyon, Inc. |
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Executive Director |
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Chief Operating Officer | |
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|
Gravity Games Corp. |
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Executive Director |
|
— | |
|
Yoshinori Kitamura |
|
Gravity Co., Ltd. |
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Executive Director |
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Chief Operating Officer |
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|
Gravity Interactive, Inc. |
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CEO |
|
Overall management | |
|
|
Gravity Entertainment Corp. |
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CEO |
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Overall management | |
|
|
NeoCyon, Inc. |
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CEO |
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Overall management | |
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|
Gravity Games Corp. |
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Executive Director |
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— | |
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Gravity EU SAS |
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Executive Director |
|
— | |
(10) Material Transactions with Related Parties
① Sales and purchases
(In thousands of Korean Won)
|
|
|
|
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2013 |
|
2012 |
| ||||
|
Nature |
|
Related companies |
|
Sales |
|
Purchases |
|
Sales |
|
Purchase |
|
|
Parent company |
|
GungHo Online Entertainment, Inc. |
|
13,073,185 |
|
974,019 |
|
25,341,971 |
|
2,766,976 |
|
|
Subsidiaries |
|
Gravity Interactive, Inc. |
|
1,481,564 |
|
1,346 |
|
887,986 |
|
— |
|
|
|
NeoCyon. Inc. |
|
705,324 |
|
1,567,000 |
|
1,739,398 |
|
1,896,145 |
| |
|
|
Gravity Games Corp. |
|
153,139 |
|
207,525 |
|
16,706 |
|
288,633 |
| |
|
|
Gravity CIS Co., Ltd. |
|
— |
|
— |
|
6,950 |
|
120,361 |
| |
|
Equity-method investee |
|
Ingamba LLC |
|
— |
|
— |
|
137,803 |
|
— |
|
|
|
Gravity EU SAS |
|
351,812 |
|
— |
|
433,401 |
|
— |
| |
|
|
|
Total |
|
15,765,024 |
|
2,749,890 |
|
28,564,215 |
|
5,072,115 |
|
② Receivables and Payables
- 2013
(In thousands of Korean Won)
|
|
|
|
|
Receivables |
|
Payables |
| ||||||
|
Nature |
|
Related companies |
|
Accounts |
|
Loans |
|
Other |
|
Accounts |
|
Other |
|
|
Parent company |
|
GungHo Online Entertainment, Inc. |
|
915,357 |
|
— |
|
43,718 |
|
278,967 |
|
5,445,033 |
|
|
Subsidiaries |
|
Gravity Interactive, Inc. |
|
1,223,146 |
|
1,606,650 |
|
— |
|
52,894 |
|
— |
|
|
|
Gravity Middle East & Africa FZ-LLC |
|
— |
|
— |
|
— |
|
— |
|
1,820,301 |
| |
|
|
NeoCyon. Inc. |
|
201,918 |
|
— |
|
78,189 |
|
111,100 |
|
117,799 |
| |
|
|
Gravity Games Corp. |
|
28,361 |
|
1,972,000 |
|
1,981,541 |
|
37,821 |
|
33,180 |
| |
|
Equity-method investee |
|
Gravity EU SAS |
|
61,879 |
|
— |
|
19,356 |
|
— |
|
31,414 |
|
|
|
|
Total |
|
2,430,661 |
|
3,578,650 |
|
2,122,804 |
|
480,782 |
|
7,447,727 |
|
- 2012
(In thousands of Korean Won)
|
|
|
|
|
Receivables |
|
Payables |
| ||||||
|
Nature |
|
Related companies |
|
Accounts |
|
Loans |
|
Other |
|
Accounts |
|
Other |
|
|
Parent company |
|
GungHo Online Entertainment, Inc. |
|
2,126,772 |
|
— |
|
62,620 |
|
563,225 |
|
5,892,473 |
|
|
Subsidiaries |
|
Gravity Interactive, Inc. |
|
555,071 |
|
1,606,650 |
|
3,323 |
|
— |
|
— |
|
|
|
Gravity Middle East & Africa FZ-LLC |
|
— |
|
— |
|
— |
|
— |
|
1,820,301 |
| |
|
|
NeoCyon. Inc. |
|
509,149 |
|
— |
|
38,655 |
|
290,941 |
|
79,243 |
| |
|
|
Gravity Games Corp. |
|
3,669 |
|
1,154,000 |
|
2,003,697 |
|
— |
|
75,245 |
| |
|
Equity-method investee |
|
Gravity EU SAS |
|
147,272 |
|
— |
|
19,356 |
|
— |
|
106,806 |
|
|
|
|
Total |
|
3,341,933 |
|
2,760,650 |
|
2,127,651 |
|
854,166 |
|
7,974,068 |
|
(11) Significant Creditors: The Company had no significant creditors as of December 31, 2013.
(12) Employees
(As of December 31, 2013)
|
Category |
|
Directors & Officers |
|
Developers |
|
Marketing/Operating |
|
Finance/Administration |
|
Total |
|
Employees |
|
9 |
|
210 |
|
39 |
|
36 |
|
294 |
(13) Directors and Auditors
|
Name |
|
Position |
|
Main work |
|
Transaction with the |
|
Hyun Chul Park |
|
CEO |
|
Chief Executive Officer |
|
— |
|
Yoshinori Kitamura |
|
Executive Director |
|
Chief Operating Officer |
|
— |
|
Kazuki Morishita |
|
Executive Director |
|
— |
|
— |
|
Kazuya Sakai |
|
Executive Director |
|
— |
|
— |
|
Jong Gyu Hwang |
|
Independent Director |
|
Member of audit committee |
|
— |
|
Doo Hyun Ryu |
|
Independent Director |
|
Member of audit committee |
|
— |
|
Jung Yoo |
|
Independent Director |
|
Member of audit committee |
|
— |
(14) Material Events after the end of fiscal year 2013: N/A
3. Non-Consolidated Financial Statements as of and for the fiscal year ended December 31, 2013 and 2012
(1) Balance Sheets
|
GRAVITY CO., LTD. |
(In Korean Won) |
|
|
|
2013 |
|
2012 |
| ||||
|
Assets |
|
|
|
|
|
|
|
|
|
|
Current Assets |
|
|
|
47,505,633,406 |
|
|
|
55,717,624,294 |
|
|
Quick assets |
|
|
|
47,505,633,406 |
|
|
|
55,717,624,294 |
|
|
Cash and cash equivalents |
|
23,402,391,895 |
|
|
|
29,078,231,109 |
|
|
|
|
Short-term financial instruments |
|
18,000,000,000 |
|
|
|
17,500,000,000 |
|
|
|
|
Accounts receivable |
|
3,777,634,986 |
|
|
|
4,645,298,139 |
|
|
|
|
Allowance for doubtful accounts |
|
(18,290,031 |
) |
|
|
(8,715,590 |
) |
|
|
|
Short-term loans |
|
893,273,661 |
|
|
|
254,999,874 |
|
|
|
|
Allowance for doubtful accounts |
|
(860,495,832 |
) |
|
|
(200,000,000 |
) |
|
|
|
Other accounts receivable |
|
565,553,353 |
|
|
|
507,409,890 |
|
|
|
|
Allowance for doubtful accounts |
|
(334,984,189 |
) |
|
|
(256,598,537 |
) |
|
|
|
Accrued income |
|
359,668,942 |
|
|
|
342,863,925 |
|
|
|
|
Allowance for doubtful accounts |
|
(115,151,736 |
) |
|
|
— |
|
|
|
|
Advance payments |
|
1,813,278,112 |
|
|
|
3,091,968,755 |
|
|
|
|
Allowance for doubtful accounts |
|
(1,500,000,000 |
) |
|
|
(1,500,000,000 |
) |
|
|
|
Prepaid expenses |
|
304,317,584 |
|
|
|
449,669,356 |
|
|
|
|
Current deferred tax assets |
|
366,000,000 |
|
|
|
633,000,000 |
|
|
|
|
Prepaid income taxes |
|
694,558,607 |
|
|
|
963,145,295 |
|
|
|
|
Refund of income taxes receivable |
|
157,878,054 |
|
|
|
216,352,078 |
|
|
|
|
Non-current Assets |
|
|
|
35,940,889,480 |
|
|
|
48,466,233,817 |
|
|
Investment assets |
|
|
|
10,391,266,236 |
|
|
|
13,658,241,648 |
|
|
Equity method investments |
|
10,377,516,269 |
|
|
|
11,811,902,502 |
|
|
|
|
Long-term available-for-sale securities |
|
— |
|
|
|
647,061,335 |
|
|
|
|
Long-term loans |
|
3,931,904,135 |
|
|
|
3,805,927,811 |
|
|
|
|
Allowance for doubtful accounts |
|
(3,918,154,168 |
) |
|
|
(2,606,650,000 |
) |
|
|
|
Tangible assets |
|
|
|
651,534,949 |
|
|
|
1,007,535,695 |
|
|
Computer and equipment |
|
6,454,419,316 |
|
|
|
10,110,035,435 |
|
|
|
|
Accumulated depreciation |
|
(5,819,516,561 |
) |
|
|
(9,147,422,722 |
) |
|
|
|
Vehicles |
|
28,110,738 |
|
|
|
28,110,738 |
|
|
|
|
Accumulated depreciation |
|
(28,110,738 |
) |
|
|
(28,110,738 |
) |
|
|
|
Furniture and fixtures |
|
843,767,187 |
|
|
|
876,559,441 |
|
|
|
|
Accumulated depreciation |
|
(827,134,993 |
) |
|
|
(833,007,293 |
) |
|
|
|
Leasehold improvements |
|
745,967,319 |
|
|
|
745,967,319 |
|
|
|
|
Accumulated depreciation |
|
(745,967,319 |
) |
|
|
(744,596,485 |
) |
|
|
|
Intangible assets |
|
|
|
13,573,210,684 |
|
|
|
19,286,513,607 |
|
|
Capitalized R&D cost, net |
|
12,542,369,221 |
|
|
|
16,992,155,328 |
|
|
|
|
Software |
|
864,482,024 |
|
|
|
1,375,034,002 |
|
|
|
|
Other intangible assets, net |
|
166,359,439 |
|
|
|
919,324,277 |
|
|
|
|
Other non-current assets |
|
|
|
11,324,877,611 |
|
|
|
14,513,942,867 |
|
|
Leasehold deposits |
|
1,250,166,550 |
|
|
|
1,374,231,810 |
|
|
|
|
Long-term prepaid expenses |
|
48,666,664 |
|
|
|
66,666,660 |
|
|
|
|
Non-current deferred tax assets |
|
5,728,000,000 |
|
|
|
8,905,000,000 |
|
|
|
|
Other non-current assets |
|
4,298,044,397 |
|
|
|
4,168,044,397 |
|
|
|
|
Total assets |
|
|
|
83,446,522,886 |
|
|
|
104,183,858,111 |
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
7,914,388,543 |
|
|
|
8,611,856,040 |
|
|
Accounts payable |
|
2,747,370,416 |
|
|
|
4,094,502,416 |
|
|
|
|
Advances received |
|
1,920,365,988 |
|
|
|
1,920,365,988 |
|
|
|
|
Withholdings |
|
131,308,618 |
|
|
|
148,737,099 |
|
|
|
|
Deferred income |
|
2,968,959,784 |
|
|
|
2,203,565,249 |
|
|
|
|
Income tax payable |
|
146,383,737 |
|
|
|
244,685,288 |
|
|
|
|
|
|
2013 |
|
2012 |
| ||||
|
Non-current liabilities |
|
|
|
6,725,211,896 |
|
|
|
8,748,925,892 |
|
|
Long-term deferred income |
|
6,475,232,037 |
|
|
|
8,495,437,880 |
|
|
|
|
Asset retirement obligation |
|
99,000,000 |
|
|
|
99,000,000 |
|
|
|
|
Leasehold deposit received |
|
150,979,859 |
|
|
|
154,488,012 |
|
|
|
|
Total liabilities |
|
|
|
14,639,600,439 |
|
|
|
17,360,781,932 |
|
|
Equity |
|
|
|
|
|
|
|
|
|
|
Common stock |
|
|
|
3,474,450,000 |
|
|
|
3,474,450,000 |
|
|
Common stock |
|
3,474,450,000 |
|
|
|
3,474,450,000 |
|
|
|
|
Capital surplus |
|
|
|
75,380,209,013 |
|
|
|
75,380,209,013 |
|
|
Additional paid-in capital |
|
73,255,072,627 |
|
|
|
73,255,072,627 |
|
|
|
|
Other capital surplus |
|
2,125,136,386 |
|
|
|
2,125,136,386 |
|
|
|
|
Accumulated other comprehensive income and loss |
|
|
|
1,371,865,952 |
|
|
|
1,433,326,353 |
|
|
Net accumulated comprehensive income of equity method investees |
|
1,532,202,141 |
|
|
|
1,484,906,049 |
|
|
|
|
Net accumulated comprehensive loss of equity method investees |
|
(160,336,189 |
) |
|
|
(51,579,696 |
) |
|
|
|
Retained earnings (accumulated deficit) |
|
|
|
(11,419,602,518 |
) |
|
|
6,535,090,813 |
|
|
Unappropriated retained earnings (undisposed accumulated deficit) |
|
(11,419,602,518 |
) |
|
|
6,535,090,813 |
|
|
|
|
Total equity |
|
|
|
68,806,922,447 |
|
|
|
86,823,076,179 |
|
|
Total liabilities and equity |
|
|
|
83,446,522,886 |
|
|
|
104,183,858,111 |
|
(2) Income Statements
|
GRAVITY CO., LTD. |
(In Korean Won) |
|
|
|
2013 |
|
2012 |
| ||||
|
Revenues |
|
|
|
26,257,395,408 |
|
|
|
40,104,850,485 |
|
|
Online games-subscription revenue |
|
2,446,493,355 |
|
|
|
5,437,988,285 |
|
|
|
|
Online games-royalties and license fees |
|
22,060,067,331 |
|
|
|
30,485,995,147 |
|
|
|
|
Mobile games |
|
544,160,209 |
|
|
|
1,511,693,503 |
|
|
|
|
Character merchandising, animation and other revenue |
|
1,206,674,513 |
|
|
|
2,669,173,550 |
|
|
|
|
Cost of revenues |
|
|
|
20,046,866,670 |
|
|
|
20,303,476,269 |
|
|
Cost of revenues-games |
|
20,046,866,670 |
|
|
|
20,303,476,269 |
|
|
|
|
Gross profit |
|
|
|
6,210,528,738 |
|
|
|
19,801,374,216 |
|
|
Selling and administrative expenses |
|
|
|
14,163,089,167 |
|
|
|
19,601,087,280 |
|
|
Salaries |
|
4,906,162,523 |
|
|
|
5,778,272,364 |
|
|
|
|
Severance benefits |
|
382,561,480 |
|
|
|
409,454,270 |
|
|
|
|
Employee benefits |
|
821,735,973 |
|
|
|
977,961,165 |
|
|
|
|
Transportation |
|
174,133,984 |
|
|
|
337,661,961 |
|
|
|
|
Entertainment |
|
37,689,239 |
|
|
|
57,963,948 |
|
|
|
|
Communication |
|
87,572,827 |
|
|
|
82,971,839 |
|
|
|
|
Taxes and dues |
|
263,962,950 |
|
|
|
289,822,610 |
|
|
|
|
Depreciation |
|
140,906,865 |
|
|
|
161,664,102 |
|
|
|
|
Rent |
|
743,624,537 |
|
|
|
929,417,181 |
|
|
|
|
Insurance premium |
|
141,256,213 |
|
|
|
156,260,760 |
|
|
|
|
Vehicles maintenance |
|
4,399,000 |
|
|
|
3,207,100 |
|
|
|
|
Freight expenses |
|
1,767,053 |
|
|
|
3,297,250 |
|
|
|
|
Repairs expenses |
|
4,818,000 |
|
|
|
3,807,600 |
|
|
|
|
Training expenses |
|
1,920,000 |
|
|
|
11,380,001 |
|
|
|
|
Books & subscription |
|
7,325,563 |
|
|
|
17,334,461 |
|
|
|
|
Office supplies |
|
29,446,553 |
|
|
|
36,121,300 |
|
|
|
|
Commission paid |
|
2,784,967,695 |
|
|
|
3,298,959,172 |
|
|
|
|
Advertising |
|
526,740,024 |
|
|
|
4,124,411,894 |
|
|
|
|
Research and development |
|
2,798,864,229 |
|
|
|
2,692,107,705 |
|
|
|
|
Bad debt |
|
87,960,093 |
|
|
|
5,901,168 |
|
|
|
|
Amortization on intangible assets |
|
215,274,366 |
|
|
|
223,109,429 |
|
|
|
|
Operating income (loss) |
|
|
|
(7,952,560,429 |
) |
|
|
200,286,936 |
|
|
Non-operating income |
|
|
|
2,243,247,967 |
|
|
|
4,493,589,205 |
|
|
Interest income |
|
1,380,337,408 |
|
|
|
1,570,694,695 |
|
|
|
|
Gain on foreign currency translation |
|
19,784,229 |
|
|
|
31,568,664 |
|
|
|
|
Gain on foreign exchange transactions |
|
465,239,559 |
|
|
|
406,126,770 |
|
|
|
|
Gain on valuation of equity-method investments |
|
— |
|
|
|
1,709,803,616 |
|
|
|
|
Gain on disposal of property and equipment |
|
1,482,680 |
|
|
|
7,188,410 |
|
|
|
|
Other income |
|
376,404,091 |
|
|
|
768,207,050 |
|
|
|
|
Non-operating expenses |
|
|
|
6,466,176,203 |
|
|
|
15,170,902,774 |
|
|
Other bad debt |
|
2,087,151,736 |
|
|
|
2,067,279,776 |
|
|
|
|
Loss on foreign currency translation |
|
205,682,412 |
|
|
|
395,764,469 |
|
|
|
|
Loss on foreign exchange transactions |
|
577,647,108 |
|
|
|
764,069,778 |
|
|
|
|
Loss on valuation of equity-method investments |
|
2,102,172,982 |
|
|
|
4,180,478,516 |
|
|
|
|
Loss on disposal of securities under equity method |
|
— |
|
|
|
333,389,213 |
|
|
|
|
Loss on impairment of securities under equity method |
|
70,792,850 |
|
|
|
6,732,616,544 |
|
|
|
|
Loss on disposal of long-term available-for-sale securities |
|
67,834,609 |
|
|
|
— |
|
|
|
|
Loss on impairment of long-term available-for-sale securities |
|
— |
|
|
|
399,404,898 |
|
|
|
|
Loss on disposal of intangible assets |
|
— |
|
|
|
923,838 |
|
|
|
|
Loss on impairment of intangible assets |
|
1,344,119,878 |
|
|
|
291,094,431 |
|
|
|
|
Loss on disposal of other non-current assets |
|
— |
|
|
|
5,880,000 |
|
|
|
|
Other losses |
|
10,774,628 |
|
|
|
1,311 |
|
|
|
|
|
|
2013 |
|
2012 |
| ||||
|
Loss before income tax |
|
|
|
(12,175,488,665 |
) |
|
|
(10,477,026,633 |
) |
|
Income tax expense |
|
|
|
5,779,204,666 |
|
|
|
3,821,374,801 |
|
|
Net loss |
|
|
|
(17,954,693,331 |
) |
|
|
(14,298,401,434 |
) |
|
Loss per share* |
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
|
|
(2,584 |
) |
|
|
(2,058 |
) |
* Each ADS represents one-fourth of one share of our common stock. Therefore, earnings (loss) per ADS is one-fourth of earnings per share.
(3) Statements of Disposition of Accumulated Deficit
|
GRAVITY CO., LTD. |
(In Korean Won) |
|
|
|
2013 |
|
2012 |
| ||||
|
|
|
Confirmed disposition date: |
|
Confirmed appropriation date: |
| ||||
|
Accumulated deficit before disposition (retained earnings before appreciation) |
|
|
|
11,419,602,518 |
|
|
|
(6,535,090,813 |
) |
|
Unappropriated retained earnings carried over from prior year |
|
6,535,090,813 |
|
|
|
20,833,492,247 |
|
|
|
|
Net loss |
|
(17,954,693,331 |
) |
|
|
(14,298,401,434 |
) |
|
|
|
Disposition of accumulated deficit |
|
|
|
11,419,602,518 |
|
|
|
— |
|
|
Transfer from capital surplus |
|
11,419,602,518 |
|
|
|
— |
|
|
|
|
Undisposed accumulated deficit (unappropriated retained earnings) carried forwards to subsequent year |
|
|
|
— |
|
|
|
(6,535,090,813 |
) |
(4) Statements of Changes in Equity
|
GRAVITY CO., LTD. |
(In Korean Won) |
|
|
|
Capital Stock |
|
Capital Surplus |
|
Accumulated |
|
Retained |
|
Total |
|
|
Balance at January 1, 2012 |
|
3,474,450,000 |
|
75,380,209,013 |
|
1,636,750,548 |
|
20,833,492,247 |
|
101,324,901,808 |
|
|
Net loss |
|
— |
|
— |
|
— |
|
(14,298,401,434 |
) |
(14,298,401,434 |
) |
|
Changes in equity-method investees with accumulated comprehensive income |
|
— |
|
— |
|
(151,844,499 |
) |
— |
|
(151,844,499 |
) |
|
Changes in equity-method investees with accumulated comprehensive loss |
|
— |
|
— |
|
(51,579,696 |
) |
— |
|
(51,579,696 |
) |
|
Balance at December 31, 2012 |
|
3,474,450,000 |
|
75,380,209,013 |
|
1,433,326,353 |
|
6,535,090,813 |
|
86,823,076,179 |
|
|
Balance at January 1, 2013 |
|
3,474,450,000 |
|
75,380,209,013 |
|
1,433,326,353 |
|
6,535,090,813 |
|
86,823,076,179 |
|
|
Net loss |
|
— |
|
— |
|
— |
|
(17,954,693,331 |
) |
(17,954,693,331 |
) |
|
Changes in equity-method investees with accumulated comprehensive income |
|
— |
|
— |
|
47,296,092 |
|
— |
|
47,296,092 |
|
|
Changes in equity-method investees with accumulated comprehensive loss |
|
— |
|
— |
|
(108,756,493 |
) |
— |
|
(108,756,493 |
) |
|
Balance at December 31, 2013 |
|
3,474,450,000 |
|
75,380,209,013 |
|
1,371,865,952 |
|
(11,419,602,518 |
) |
68,806,922,447 |
|
(5) Statements of Cash Flows
|
GRAVITY CO., LTD. |
(In Korean Won) |
|
|
|
2013 |
|
2012 |
| ||||
|
Cash flows from operating activities |
|
|
|
(2,169,269,828 |
) |
|
|
5,575,999,596 |
|
|
Net loss |
|
(17,954,693,331 |
) |
|
|
(14,298,401,434 |
) |
|
|
|
Addition of expenses not involving cash outflows |
|
12,313,160,868 |
|
|
|
19,839,438,456 |
|
|
|
|
Depreciation |
|
478,006,082 |
|
|
|
490,034,669 |
|
|
|
|
Amortization on intangible assets |
|
5,988,100,766 |
|
|
|
5,179,797,645 |
|
|
|
|
Bad debt |
|
87,960,093 |
|
|
|
5,901,168 |
|
|
|
|
Other bad debt |
|
2,087,151,736 |
|
|
|
2,067,279,776 |
|
|
|
|
Loss on foreign currency translation |
|
87,021,872 |
|
|
|
152,637,758 |
|
|
|
|
Loss on valuation of equity-method investments |
|
2,102,172,982 |
|
|
|
4,180,478,516 |
|
|
|
|
Loss on disposal of securities under equity method |
|
— |
|
|
|
333,389,213 |
|
|
|
|
Loss on impairment of securities under equity method |
|
70,792,850 |
|
|
|
6,732,616,544 |
|
|
|
|
Loss on disposal of long-term available-for-sale securities |
|
67,834,609 |
|
|
|
— |
|
|
|
|
Loss on impairment of long-term available-for-sale securities |
|
— |
|
|
|
399,404,898 |
|
|
|
|
Loss on disposal of intangible assets |
|
— |
|
|
|
923,838 |
|
|
|
|
Loss on impairment of intangible assets |
|
1,344,119,878 |
|
|
|
291,094,431 |
|
|
|
|
Loss on disposal of other non-current assets |
|
— |
|
|
|
5,880,000 |
|
|
|
|
Deduction of revenues not involving cash inflows |
|
(21,266,909 |
) |
|
|
(1,748,560,690 |
) |
|
|
|
Gain on foreign currency translation |
|
19,784,229 |
|
|
|
31,568,664 |
|
|
|
|
Gain on valuation of equity-method investments |
|
— |
|
|
|
1,709,803,616 |
|
|
|
|
Gain on disposal of property and equipment |
|
1,482,680 |
|
|
|
7,188,410 |
|
|
|
|
Changes in assets and liabilities arising from operating activities |
|
3,493,529,544 |
|
|
|
1,783,523,264 |
|
|
|
|
Decrease in trade accounts receivable |
|
780,689,775 |
|
|
|
2,314,422,600 |
|
|
|
|
Decrease (increase) in accounts receivable |
|
(58,152,223 |
) |
|
|
188,141,724 |
|
|
|
|
Increase in accrued income |
|
(16,805,017 |
) |
|
|
(6,293,686 |
) |
|
|
|
Decrease (increase) in advance payments |
|
740,900,327 |
|
|
|
(580,422,612 |
) |
|
|
|
Decrease in prepaid expenses |
|
164,685,108 |
|
|
|
137,535,960 |
|
|
|
|
Decrease in current portion of deferred tax assets |
|
267,000,000 |
|
|
|
606,000,000 |
|
|
|
|
Decrease (increase) in prepaid income taxes |
|
268,586,688 |
|
|
|
(65,698,687 |
) |
|
|
|
Decrease (increase) in refund of income taxes receivable |
|
58,474,024 |
|
|
|
(28,163,007 |
) |
|
|
|
Decrease (increase) in long-term prepaid expenses |
|
(1,333,340 |
) |
|
|
42,460,171 |
|
|
|
|
Decrease (increase) in non-current deferred tax assets |
|
3,177,000,000 |
|
|
|
(107,000,000 |
) |
|
|
|
Increase in other non-current assets |
|
(130,000,000 |
) |
|
|
— |
|
|
|
|
Decrease in accounts payable |
|
(383,466,305 |
) |
|
|
(1,044,782,763 |
) |
|
|
|
Decrease in withholdings |
|
(17,428,481 |
) |
|
|
(61,948,058 |
) |
|
|
|
Decrease in deferred income |
|
(215,300,056 |
) |
|
|
(1,638,872,574 |
) |
|
|
|
Decrease in income tax payable |
|
(98,301,551 |
) |
|
|
(67,417,206 |
) |
|
|
|
Increase (decrease) in long-term deferred income |
|
(1,039,511,252 |
) |
|
|
2,085,297,672 |
|
|
|
|
Increase in leasehold deposits received |
|
(3,508,153 |
) |
|
|
10,263,730 |
|
|
|
|
Cash flows from investing activities |
|
|
|
(3,506,569,386 |
) |
|
|
(8,238,332,931 |
) |
|
Cash inflows from investing activities |
|
41,099,813,399 |
|
|
|
31,132,142,574 |
|
|
|
|
Proceeds from disposal of short-term financial instruments |
|
39,500,000,000 |
|
|
|
30,000,000,000 |
|
|
|
|
Collection of short-term loans receivable |
|
870,694,331 |
|
|
|
176,249,892 |
|
|
|
|
Proceeds from disposal of short-term available-for-sale securities |
|
— |
|
|
|
905,280,000 |
|
|
|
|
Proceeds from disposal of long-term available-for-sale securities |
|
579,226,726 |
|
|
|
— |
|
|
|
|
Collection of long-term loans receivable |
|
23,055,558 |
|
|
|
12,777,772 |
|
|
|
|
|
|
2013 |
|
2012 |
| ||||
|
Proceeds from disposal of computer and equipment |
|
1,313,487 |
|
|
|
4,194,510 |
|
|
|
|
Proceeds from disposal of furniture and fixtures |
|
1,458,037 |
|
|
|
3,006,400 |
|
|
|
|
Decrease in leasehold deposits |
|
124,065,260 |
|
|
|
2,634,000 |
|
|
|
|
Proceeds from disposal of other non-current assets |
|
— |
|
|
|
28,000,000 |
|
|
|
|
Cash outflows from investing activities |
|
(44,606,382,785 |
) |
|
|
(39,370,475,505 |
) |
|
|
|
Increase in short-term financial instruments |
|
40,000,000,000 |
|
|
|
32,500,000,000 |
|
|
|
|
Increase in short-term loans receivable |
|
800,000,000 |
|
|
|
— |
|
|
|
|
Acquisition of securities under equity method |
|
800,040,000 |
|
|
|
— |
|
|
|
|
Increase in long-term loans receivable |
|
858,000,000 |
|
|
|
2,965,600,000 |
|
|
|
|
Acquisition of computer and equipment |
|
118,453,272 |
|
|
|
252,664,561 |
|
|
|
|
Acquisition of furniture and fixtures |
|
3,277,808 |
|
|
|
6,686,000 |
|
|
|
|
Increase in development costs |
|
464,919,300 |
|
|
|
2,080,916,374 |
|
|
|
|
Acquisition of software |
|
1,195,901,970 |
|
|
|
890,657,570 |
|
|
|
|
Acquisition of other intangible assets |
|
365,790,435 |
|
|
|
645,681,000 |
|
|
|
|
Increase in leasehold deposits |
|
— |
|
|
|
270,000 |
|
|
|
|
Acquisition of other non-current assets |
|
— |
|
|
|
28,000,000 |
|
|
|
|
Cash flows from financing activities |
|
|
|
— |
|
|
|
— |
|
|
Cash inflows from financing activities |
|
— |
|
|
|
— |
|
|
|
|
Cash outflows from financing activities |
|
— |
|
|
|
— |
|
|
|
|
Decrease in cash |
|
|
|
(5,675,839,214 |
) |
|
|
(2,662,333,335 |
) |
|
Cash at beginning of year |
|
|
|
29,078,231,109 |
|
|
|
31,740,564,444 |
|
|
Cash at end of year |
|
|
|
23,402,391,895 |
|
|
|
29,078,231,109 |
|
(6) Notes to Non-Consolidated Financial Statements
* For the notes to the non-consolidated financial statements, please refer to the condensed English translation version of the Company’s KAS-NPE non-consolidated financial statements as of and for the years ended December 31, 2013 and 2012 and the independent auditor’s report to be submitted to the United States Securities and Exchange Commission on Form 6-K on April 3, 2014.
3. Consolidated Financial Statements as of and for the fiscal year ended December 31, 2013 and 2012
(1) Consolidated Balance Sheets
|
GRAVITY CO., LTD. and a Subsidiary |
(In Korean Won) |
|
|
|
2013 |
|
2012 |
| ||||
|
Assets |
|
|
|
|
|
|
|
|
|
|
Current Assets |
|
|
|
57,024,971,668 |
|
|
|
65,595,030,136 |
|
|
Quick assets |
|
|
|
57,024,971,668 |
|
|
|
65,595,030,136 |
|
|
Cash and cash equivalents |
|
29,724,747,844 |
|
|
|
35,467,760,770 |
|
|
|
|
Short-term financial instruments |
|
18,000,000,000 |
|
|
|
17,500,000,000 |
|
|
|
|
Accounts receivable |
|
6,120,828,372 |
|
|
|
6,974,173,803 |
|
|
|
|
Allowance for doubtful accounts |
|
(18,290,031 |
) |
|
|
(8,715,590 |
) |
|
|
|
Short-term loans |
|
893,273,661 |
|
|
|
254,999,874 |
|
|
|
|
Allowance for doubtful accounts |
|
(860,495,832 |
) |
|
|
(200,000,000 |
) |
|
|
|
Other accounts receivable |
|
716,872,354 |
|
|
|
518,234,607 |
|
|
|
|
Allowance for doubtful accounts |
|
(344,434,189 |
) |
|
|
(266,048,537 |
) |
|
|
|
Accrued income |
|
374,399,353 |
|
|
|
361,904,336 |
|
|
|
|
Allowance for doubtful accounts |
|
(115,151,736 |
) |
|
|
— |
|
|
|
|
Advance payments |
|
2,022,317,298 |
|
|
|
3,122,840,851 |
|
|
|
|
Allowance for doubtful accounts |
|
(1,500,000,000 |
) |
|
|
(1,500,000,000 |
) |
|
|
|
Prepaid expenses |
|
658,091,014 |
|
|
|
731,290,937 |
|
|
|
|
Current deferred tax assets |
|
474,018,019 |
|
|
|
1,425,995,882 |
|
|
|
|
Prepaid income taxes |
|
699,857,607 |
|
|
|
996,241,125 |
|
|
|
|
Refund of income taxes receivable |
|
178,937,934 |
|
|
|
216,352,078 |
|
|
|
|
Non-current Assets |
|
|
|
29,947,263,622 |
|
|
|
40,838,688,584 |
|
|
Investment assets |
|
|
|
1,671,505,922 |
|
|
|
4,206,205,165 |
|
|
Equity method investments |
|
1,657,755,955 |
|
|
|
2,359,866,019 |
|
|
|
|
Long-term available-for-sale securities |
|
— |
|
|
|
647,061,335 |
|
|
|
|
Long-term loans |
|
3,931,904,135 |
|
|
|
3,805,927,811 |
|
|
|
|
Allowance for doubtful accounts |
|
(3,918,154,168 |
) |
|
|
(2,606,650,000 |
) |
|
|
|
Tangible assets |
|
|
|
912,194,786 |
|
|
|
1,313,983,034 |
|
|
Computer and equipment |
|
6,682,673,741 |
|
|
|
10,334,944,860 |
|
|
|
|
Accumulated depreciation |
|
(6,011,839,745 |
) |
|
|
(9,332,515,938 |
) |
|
|
|
Vehicles |
|
28,110,738 |
|
|
|
28,110,738 |
|
|
|
|
Accumulated depreciation |
|
(28,110,738 |
) |
|
|
(28,110,738 |
) |
|
|
|
Furniture and fixtures |
|
1,826,251,555 |
|
|
|
1,737,529,330 |
|
|
|
|
Accumulated depreciation |
|
(1,584,890,765 |
) |
|
|
(1,427,346,052 |
) |
|
|
|
Leasehold improvements |
|
745,967,319 |
|
|
|
745,967,319 |
|
|
|
|
Accumulated depreciation |
|
(745,967,319 |
) |
|
|
(744,596,485 |
) |
|
|
|
Intangible assets |
|
|
|
13,668,811,418 |
|
|
|
19,659,547,419 |
|
|
Capitalized R&D cost, net |
|
12,542,369,221 |
|
|
|
17,387,029,387 |
|
|
|
|
Software |
|
960,082,758 |
|
|
|
1,428,794,140 |
|
|
|
|
Other intangible assets, net |
|
166,359,439 |
|
|
|
843,723,892 |
|
|
|
|
Other non-current assets |
|
|
|
13,694,751,496 |
|
|
|
15,658,952,966 |
|
|
Leasehold deposits |
|
1,250,166,550 |
|
|
|
1,374,231,810 |
|
|
|
|
Long-term prepaid expenses |
|
48,666,664 |
|
|
|
66,834,074 |
|
|
|
|
Non-current deferred tax assets |
|
8,095,543,885 |
|
|
|
9,844,792,685 |
|
|
|
|
Other non-current assets |
|
4,300,374,397 |
|
|
|
4,373,094,397 |
|
|
|
|
Total assets |
|
|
|
86,972,235,290 |
|
|
|
106,433,718,720 |
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
10,964,637,877 |
|
|
|
10,146,253,560 |
|
|
Accounts payable |
|
4,417,582,140 |
|
|
|
5,350,029,507 |
|
|
|
|
Advances received |
|
1,921,398,364 |
|
|
|
1,921,231,604 |
|
|
|
|
Withholdings |
|
201,798,840 |
|
|
|
325,093,424 |
|
|
|
|
Deferred income |
|
4,277,474,796 |
|
|
|
2,305,213,737 |
|
|
|
|
Income tax payable |
|
146,383,737 |
|
|
|
244,685,288 |
|
|
|
|
|
|
2013 |
|
2012 |
| ||||
|
Non-current liabilities |
|
|
|
6,847,747,407 |
|
|
|
9,081,822,942 |
|
|
Long-term deferred income |
|
6,715,567,037 |
|
|
|
8,907,577,454 |
|
|
|
|
Asset retirement obligation |
|
99,000,000 |
|
|
|
99,000,000 |
|
|
|
|
Leasehold deposit received |
|
33,180,370 |
|
|
|
75,245,488 |
|
|
|
|
Total liabilities |
|
|
|
17,812,385,284 |
|
|
|
19,228,076,502 |
|
|
Equity |
|
|
|
|
|
|
|
|
|
|
Parent interest |
|
|
|
68,806,922,447 |
|
|
|
86,823,076,179 |
|
|
Common stock |
|
|
|
3,474,450,000 |
|
|
|
3,474,450,000 |
|
|
Common stock |
|
3,474,450,000 |
|
|
|
3,474,450,000 |
|
|
|
|
Consolidated capital surplus |
|
|
|
75,380,209,013 |
|
|
|
75,380,209,013 |
|
|
Additional paid-in capital |
|
73,255,072,627 |
|
|
|
73,255,072,627 |
|
|
|
|
Other capital surplus |
|
2,125,136,386 |
|
|
|
2,125,136,386 |
|
|
|
|
Consolidated accumulated other comprehensive income and loss |
|
|
|
1,371,865,952 |
|
|
|
1,433,326,353 |
|
|
Accumulated comprehensive income of equity method investees |
|
1,532,202,141 |
|
|
|
1,484,906,049 |
|
|
|
|
Accumulated comprehensive loss of equity method investees |
|
(160,336,189 |
) |
|
|
(51,579,696 |
) |
|
|
|
Consolidated retained earnings (consolidated accumulated deficit) |
|
|
|
(11,419,602,518 |
) |
|
|
6,535,090,813 |
|
|
Unappropriated consolidated retained earnings (undisposed consolidated accumulated deficit) |
|
(11,419,602,518 |
) |
|
|
6,535,090,813 |
|
|
|
|
Non-controlling interest in consolidated subsidiary |
|
|
|
352,927,559 |
|
|
|
382,566,039 |
|
|
Total equity |
|
|
|
69,159,850,006 |
|
|
|
87,205,642,218 |
|
|
Total liabilities and equity |
|
|
|
86,972,235,290 |
|
|
|
106,433,718,720 |
|
(2) Consolidated Income Statements
|
GRAVITY CO., LTD. and a Subsidiary |
(In Korean Won) |
|
|
|
2013 |
|
2012 |
| ||||
|
Revenues |
|
|
|
42,437,954,760 |
|
|
|
51,951,081,797 |
|
|
Online games-subscription revenue |
|
2,446,493,355 |
|
|
|
5,437,988,285 |
|
|
|
|
Online games-royalties and license fees |
|
22,223,575,496 |
|
|
|
31,211,154,620 |
|
|
|
|
Mobile games |
|
14,503,971,352 |
|
|
|
8,261,501,430 |
|
|
|
|
Character merchandising, animation and other revenue |
|
3,263,914,557 |
|
|
|
7,040,437,462 |
|
|
|
|
Cost of revenues |
|
|
|
30,924,395,914 |
|
|
|
28,671,332,710 |
|
|
Cost of revenues-games |
|
30,924,395,914 |
|
|
|
28,671,332,710 |
|
|
|
|
Gross profit |
|
|
|
11,513,558,846 |
|
|
|
23,279,749,087 |
|
|
Selling and administrative expenses |
|
|
|
20,241,905,388 |
|
|
|
22,552,040,578 |
|
|
Salaries |
|
5,704,531,983 |
|
|
|
6,532,986,229 |
|
|
|
|
Severance benefits |
|
441,574,550 |
|
|
|
487,148,730 |
|
|
|
|
Employee benefits |
|
1,009,974,401 |
|
|
|
1,089,617,936 |
|
|
|
|
Transportation |
|
193,168,546 |
|
|
|
351,749,842 |
|
|
|
|
Entertainment |
|
49,853,327 |
|
|
|
76,824,610 |
|
|
|
|
Communication |
|
114,443,477 |
|
|
|
111,511,374 |
|
|
|
|
Taxes and dues |
|
320,844,660 |
|
|
|
337,989,648 |
|
|
|
|
Depreciation |
|
162,468,649 |
|
|
|
189,676,360 |
|
|
|
|
Rent |
|
762,661,536 |
|
|
|
944,154,805 |
|
|
|
|
Insurance premium |
|
141,256,213 |
|
|
|
156,260,760 |
|
|
|
|
Vehicles maintenance |
|
4,887,610 |
|
|
|
9,423,450 |
|
|
|
|
Freight expenses |
|
2,469,053 |
|
|
|
3,932,250 |
|
|
|
|
Repairs expenses |
|
4,818,000 |
|
|
|
3,807,600 |
|
|
|
|
Training expenses |
|
1,920,000 |
|
|
|
11,380,001 |
|
|
|
|
Books & subscription |
|
11,189,337 |
|
|
|
21,591,561 |
|
|
|
|
Office supplies |
|
35,177,522 |
|
|
|
41,181,741 |
|
|
|
|
Commission paid |
|
2,240,534,516 |
|
|
|
2,595,232,352 |
|
|
|
|
Advertising |
|
2,624,032,798 |
|
|
|
4,366,436,421 |
|
|
|
|
Research and development |
|
6,223,318,919 |
|
|
|
5,134,051,331 |
|
|
|
|
Bad debt |
|
87,960,093 |
|
|
|
5,901,168 |
|
|
|
|
Amortization on intangible assets |
|
104,820,198 |
|
|
|
81,182,409 |
|
|
|
|
Operating income (loss) |
|
|
|
(8,728,346,542 |
) |
|
|
727,708,509 |
|
|
Non-operating income |
|
|
|
2,291,150,906 |
|
|
|
3,515,449,105 |
|
|
Interest income |
|
1,526,497,859 |
|
|
|
1,797,228,669 |
|
|
|
|
Gain on foreign currency translation |
|
22,694,283 |
|
|
|
41,153,170 |
|
|
|
|
Gain on foreign exchange transactions |
|
509,829,389 |
|
|
|
451,668,994 |
|
|
|
|
Gain on valuation of equity-method investments |
|
— |
|
|
|
492,910,895 |
|
|
|
|
Gain on disposal of property and equipment |
|
1,482,680 |
|
|
|
7,596,428 |
|
|
|
|
Other income |
|
230,646,695 |
|
|
|
724,890,949 |
|
|
|
|
Non-operating expenses |
|
|
|
6,308,788,648 |
|
|
|
15,491,596,277 |
|
|
Other bad debt |
|
2,087,151,736 |
|
|
|
2,076,729,776 |
|
|
|
|
Loss on foreign currency translation |
|
207,760,320 |
|
|
|
562,342,501 |
|
|
|
|
Loss on foreign exchange transactions |
|
741,851,401 |
|
|
|
886,687,416 |
|
|
|
|
Loss on valuation of equity-method investments |
|
1,369,896,813 |
|
|
|
4,180,478,516 |
|
|
|
|
Loss on disposal of securities under equity method |
|
— |
|
|
|
333,389,213 |
|
|
|
|
Loss on impairment of securities under equity method |
|
70,792,850 |
|
|
|
6,732,616,544 |
|
|
|
|
Loss on disposal of long-term available-for-sale securities |
|
67,834,609 |
|
|
|
— |
|
|
|
|
Loss on impairment of long-term available-for-sale securities |
|
— |
|
|
|
399,404,898 |
|
|
|
|
Loss on disposal of intangible assets |
|
— |
|
|
|
923,838 |
|
|
|
|
Loss on impairment of intangible assets |
|
1,741,855,188 |
|
|
|
291,094,431 |
|
|
|
|
Loss on disposal of other non-current assets |
|
— |
|
|
|
5,880,000 |
|
|
|
|
Other losses |
|
21,645,731 |
|
|
|
22,049,144 |
|
|
|
|
|
|
2013 |
|
2012 |
| ||||
|
Loss before income tax |
|
|
|
(12,745,984,284 |
) |
|
|
(11,248,438,663 |
) |
|
Income tax expense |
|
|
|
5,238,347,527 |
|
|
|
2,980,709,700 |
|
|
Net loss |
|
|
|
(17,984,331,811 |
) |
|
|
(14,229,148,363 |
) |
|
Parent interest |
|
(17,954,693,331 |
) |
|
|
(14,278,401,434 |
) |
|
|
|
Minority interest |
|
(29,638,480 |
) |
|
|
49,253,071 |
|
|
|
|
Per share data for parent interest |
|
|
|
|
|
|
|
|
|
|
Loss per share* |
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
|
|
(2,584 |
) |
|
|
(2,055 |
) |
* Each ADS represents one-fourth of one share of our common stock. Therefore, earnings (loss) per ADS is one-fourth of earnings per share.
(3) Consolidated Statements of Changes in Equity
|
GRAVITY CO., LTD. and a Subsidiary |
(In Korean Won) |
|
|
|
Capital stock |
|
Consolidated |
|
Consolidated |
|
Consolidated |
|
Non-controlling |
|
Total |
|
|
Balance at January 1, 2012 |
|
3,474,450,000 |
|
75,380,209,013 |
|
1,636,750,548 |
|
20,813,492,247 |
|
333,312,968 |
|
101,638,214,776 |
|
|
Net income (loss) |
|
— |
|
— |
|
— |
|
(14,278,401,434 |
) |
49,253,071 |
|
(14,229,148,363 |
) |
|
Changes in equity-method investees with accumulated comprehensive income |
|
— |
|
— |
|
(151,844,499 |
) |
— |
|
— |
|
(151,844,499 |
) |
|
Changes in equity-method investees with accumulated comprehensive loss |
|
— |
|
— |
|
(51,579,696 |
) |
— |
|
— |
|
(51,579,696 |
) |
|
Balance at December 31, 2012 |
|
3,474,450,000 |
|
75,380,209,013 |
|
1,433,326,353 |
|
6,535,090,813 |
|
382,566,039 |
|
87,205,642,218 |
|
|
Balance at January 1, 2013 |
|
3,474,450,000 |
|
75,380,209,013 |
|
1,433,326,353 |
|
6,535,090,813 |
|
382,566,039 |
|
87,205,642,218 |
|
|
Net loss |
|
— |
|
— |
|
— |
|
(17,954,693,331 |
) |
(29,638,480 |
) |
(17,984,331,811 |
) |
|
Changes in equity-method investees with accumulated comprehensive income |
|
— |
|
— |
|
47,296,092 |
|
— |
|
— |
|
47,296,092 |
|
|
Changes in equity-method investees with accumulated comprehensive loss |
|
— |
|
— |
|
(108,756,493 |
) |
— |
|
— |
|
(108,756,493 |
) |
|
Balance at December 31, 2013 |
|
3,474,450,000 |
|
75,380,209,013 |
|
1,371,865,952 |
|
(11,419,602,518 |
) |
352,927,559 |
|
69,159,850,006 |
|
(4) Consolidated Statements of Cash Flows
|
GRAVITY CO., LTD. and a Subsidiary |
(In Korean Won) |
|
|
|
2013 |
|
2012 |
| ||||
|
Cash flows from operating activities |
|
|
|
(2,100,005,973 |
) |
|
|
5,699,392,626 |
|
|
Net loss |
|
(17,984,331,811 |
) |
|
|
(14,229,148,363 |
) |
|
|
|
Addition of expenses not involving cash outflows |
|
12,223,151,909 |
|
|
|
20,085,259,849 |
|
|
|
|
Depreciation |
|
647,791,405 |
|
|
|
671,355,233 |
|
|
|
|
Amortization on intangible assets |
|
6,061,641,604 |
|
|
|
5,193,522,943 |
|
|
|
|
Bad debt |
|
87,960,093 |
|
|
|
5,901,168 |
|
|
|
|
Other bad debt |
|
2,087,151,736 |
|
|
|
2,076,729,776 |
|
|
|
|
Loss on foreign currency translation |
|
88,227,611 |
|
|
|
193,963,289 |
|
|
|
|
Loss on valuation of equity-method investments |
|
1,369,896,813 |
|
|
|
4,180,478,516 |
|
|
|
|
Loss on impairment of securities under equity method |
|
70,792,850 |
|
|
|
6,732,616,544 |
|
|
|
|
Loss on disposal of securities under equity method |
|
— |
|
|
|
333,389,213 |
|
|
|
|
Loss on impairment of long-term available-for-sale securities |
|
— |
|
|
|
399,404,898 |
|
|
|
|
Loss on disposal of intangible assets |
|
— |
|
|
|
923,838 |
|
|
|
|
Loss on impairment of intangible assets |
|
1,741,855,188 |
|
|
|
291,094,431 |
|
|
|
|
Loss on disposal of long-term available-for-sale securities |
|
67,834,609 |
|
|
|
— |
|
|
|
|
Loss on disposal of other non-current assets |
|
— |
|
|
|
5,880,000 |
|
|
|
|
Deduction of revenues not involving cash inflows |
|
(24,176,963 |
) |
|
|
(538,077,762 |
) |
|
|
|
Gain on foreign currency translation |
|
22,694,283 |
|
|
|
37,570,439 |
|
|
|
|
Gain on valuation of equity-method investments |
|
— |
|
|
|
492,910,895 |
|
|
|
|
Gain on disposal of property and equipment |
|
1,482,680 |
|
|
|
7,596,428 |
|
|
|
|
Changes in assets and liabilities arising from operating activities |
|
3,685,350,892 |
|
|
|
381,358,902 |
|
|
|
|
Decrease in trade accounts receivable |
|
765,215,429 |
|
|
|
566,077,013 |
|
|
|
|
Decrease (increase) in accounts receivable |
|
(198,646,507 |
) |
|
|
184,456,760 |
|
|
|
|
Decrease (increase) in accrued income |
|
(12,495,017 |
) |
|
|
3,582,342 |
|
|
|
|
Decrease (increase) in advance payments |
|
562,733,237 |
|
|
|
(557,683,664 |
) |
|
|
|
Decrease (increase) in prepaid expenses |
|
92,533,259 |
|
|
|
(19,959,148 |
) |
|
|
|
Decrease (increase) in current portion of deferred tax assets |
|
951,977,863 |
|
|
|
(682,464,840 |
) |
|
|
|
Decrease (increase) in prepaid income taxes |
|
263,287,688 |
|
|
|
(100,522,138 |
) |
|
|
|
Decrease in refund of income taxes receivable |
|
70,509,974 |
|
|
|
121,367,936 |
|
|
|
|
Decrease (increase) in long-term prepaid expenses |
|
(1,165,926 |
) |
|
|
67,754,811 |
|
|
|
|
Decrease in non-current portion of deferred tax assets |
|
1,749,248,800 |
|
|
|
— |
|
|
|
|
Increase in other non-current assets |
|
(130,000,000 |
) |
|
|
— |
|
|
|
|
Increase in accounts payable |
|
55,395,943 |
|
|
|
113,844,547 |
|
|
|
|
Increase (decrease) in advances received |
|
166,760 |
|
|
|
(7,247,761 |
) |
|
|
|
Increase (decrease) in withholdings |
|
(123,294,584 |
) |
|
|
71,305,399 |
|
|
|
|
Increase (decrease) in deferred income |
|
551,361,894 |
|
|
|
(1,723,754,505 |
) |
|
|
|
Decrease in income tax payable |
|
(98,301,551 |
) |
|
|
(67,417,206 |
) |
|
|
|
Increase (decrease) in long-term deferred income |
|
(771,111,252 |
) |
|
|
2,434,402,260 |
|
|
|
|
Decrease in leasehold deposits received |
|
(42,065,118 |
) |
|
|
(22,382,904 |
) |
|
|
|
Cash flows from investing activities |
|
|
|
(3,643,006,953 |
) |
|
|
(9,529,914,987 |
) |
|
Cash inflows from investing activities |
|
41,341,090,364 |
|
|
|
31,165,798,178 |
|
|
|
|
Proceeds from disposal of short-term financial instruments |
|
39,500,000,000 |
|
|
|
30,000,000,000 |
|
|
|
|
Collection of short-term loans receivable |
|
870,694,331 |
|
|
|
176,249,892 |
|
|
|
|
Proceeds from disposal of short-term available-for-sale securities |
|
— |
|
|
|
905,280,000 |
|
|
|
|
Proceeds from disposal of long-term available-for-sale securities |
|
579,226,726 |
|
|
|
— |
|
|
|
|
|
|
2013 |
|
2012 |
| ||||
|
Collection of long-term loans receivable |
|
23,055,558 |
|
|
|
12,777,772 |
|
|
|
|
Proceeds from disposal of computer and equipment |
|
1,313,487 |
|
|
|
4,194,510 |
|
|
|
|
Proceeds from disposal of furniture and fixtures |
|
1,458,037 |
|
|
|
4,015,370 |
|
|
|
|
Decrease in leasehold deposits |
|
162,622,225 |
|
|
|
35,280,634 |
|
|
|
|
Decrease in other non-current assets |
|
202,720,000 |
|
|
|
28,000,000 |
|
|
|
|
Cash outflows from investing activities |
|
(44,984,097,317 |
) |
|
|
(40,695,713,165 |
) |
|
|
|
Increase in short-term financial instruments |
|
40,000,000,000 |
|
|
|
32,500,000,000 |
|
|
|
|
Increase in short-term loans receivable |
|
800,000,000 |
|
|
|
— |
|
|
|
|
Acquisition of securities under equity method |
|
800,040,000 |
|
|
|
— |
|
|
|
|
Increase in long-term loans receivable |
|
858,000,000 |
|
|
|
2,965,600,000 |
|
|
|
|
Acquisition of computer and equipment |
|
120,603,272 |
|
|
|
265,153,561 |
|
|
|
|
Acquisition of furniture and fixtures |
|
120,968,705 |
|
|
|
233,853,026 |
|
|
|
|
Increase in development costs |
|
580,634,850 |
|
|
|
2,080,916,374 |
|
|
|
|
Acquisition of software |
|
1,299,503,090 |
|
|
|
1,828,617,570 |
|
|
|
|
Acquisition of other intangible assets |
|
365,790,435 |
|
|
|
760,656,000 |
|
|
|
|
Increase of leasehold deposits |
|
38,556,965 |
|
|
|
32,916,634 |
|
|
|
|
Acquisition of other non-current assets |
|
— |
|
|
|
28,000,000 |
|
|
|
|
Cash flows from financing activities |
|
|
|
— |
|
|
|
— |
|
|
Cash inflows from financing activities |
|
— |
|
|
|
— |
|
|
|
|
Cash outflows from financing activities |
|
— |
|
|
|
— |
|
|
|
|
Decrease in cash |
|
|
|
(5,743,012,926 |
) |
|
|
(3,830,522,361 |
) |
|
Cash at beginning of year |
|
|
|
35,467,760,770 |
|
|
|
39,298,283,131 |
|
|
Cash at end of year |
|
|
|
29,724,747,844 |
|
|
|
35,467,760,770 |
|
(5) Notes to Consolidated Financial Statements
* For the notes to the consolidated financial statements, please refer to the condensed English translation version of the Company’s KAS-NPE consolidated financial statements as of and for the years ended December 31, 2013 and 2012 and the independent auditor’s report to be submitted to the United States Securities and Exchange Commission on Form 6-K on April 3, 2014.