RESULTS OF THE 5TH ANNUAL GENERAL MEETING OF SHAREHOLDERS OF GRAVITY CO., LTD.
1. | Approval of the Balance Sheet, Income Statement, and the Statement of Appropriation of Retained Earnings for the 5th Fiscal Year |
(1) Balance sheets
GRAVITY Co., Ltd.
Balance Sheets
December 31, 2004 and 2003
(in thousands of Korean Won)
2004 | 2003 | |||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||
Current assets | ||||||||||||||||||||||||||||
Cash and cash equivalents | 15,821,935 | 5,063,399 | ||||||||||||||||||||||||||
Short-term financial instruments | 8,900,000 | 1,600,000 | ||||||||||||||||||||||||||
Marketable securities | 496,313 | 600,000 | ||||||||||||||||||||||||||
Accounts receivable, net | 5,899,888 | 4,011,789 | ||||||||||||||||||||||||||
Short-term loans | 121,599 | 36,000 | ||||||||||||||||||||||||||
Other accounts receivable | 155,525 | 117,938 | ||||||||||||||||||||||||||
Accrued income | 70,341 | 34,456 | ||||||||||||||||||||||||||
Advance payments | 713,177 | 206,481 | ||||||||||||||||||||||||||
Prepaid expenses | 16,408 | 2,313 | ||||||||||||||||||||||||||
Prepaid income taxes | 479,292 | 619,377 | ||||||||||||||||||||||||||
Inventories | 57,402 | 3,246 | ||||||||||||||||||||||||||
Total current assets | 32,731,880 | 12,294,999 | ||||||||||||||||||||||||||
Equity method investments | 1,670,672 | 317,501 | ||||||||||||||||||||||||||
Long-term loans | 45,666 | 251,538 | ||||||||||||||||||||||||||
Guarantee deposits | 3,915,510 | 3,881,455 | ||||||||||||||||||||||||||
Other Investments | 926,033 | 950,233 | ||||||||||||||||||||||||||
Deferred income tax assets | 2,964,271 | 106,478 | ||||||||||||||||||||||||||
Property, plant and equipment, net | 11,249,144 | 3,125,431 | ||||||||||||||||||||||||||
Intangible assets | 4,545,209 | 1,897,339 | ||||||||||||||||||||||||||
Total assets | 58,048,385 | 22,824,974 | ||||||||||||||||||||||||||
Liabilities and Shareholders’ Equity | ||||||||||||||||||||||||||||
Current liabilities | ||||||||||||||||||||||||||||
Accounts payable | 2,055,189 | 1,226,516 | ||||||||||||||||||||||||||
Deferred income | 3,887,694 | 1,361,111 | ||||||||||||||||||||||||||
Advance received | 70,109 | 47,432 | ||||||||||||||||||||||||||
Withholdings | 28,070 | 49,828 | ||||||||||||||||||||||||||
Leasehold deposit received | 2,000,000 | - | ||||||||||||||||||||||||||
Capital lease liabilities | - | 103,694 | ||||||||||||||||||||||||||
Total current liabilities | 8,041,062 | 2,788,581 | ||||||||||||||||||||||||||
Long-term deferred income | 1,894,094 | 2,333,333 | ||||||||||||||||||||||||||
Accrued severance benefits, net | 817,038 | 286,742 | ||||||||||||||||||||||||||
Total liabilities | 10,752,194 | 5,408,656 | ||||||||||||||||||||||||||
Commitments and contingencies | ||||||||||||||||||||||||||||
Shareholders’ equity | ||||||||||||||||||||||||||||
Common stock | 2,774,450 | 2,774,450 | ||||||||||||||||||||||||||
Capital surplus | ||||||||||||||||||||||||||||
Paid in capital in excess of par value | 2,117,831 | 2,117,831 | ||||||||||||||||||||||||||
Retained earnings | 42,512,806 | 12,523,705 | ||||||||||||||||||||||||||
Capital adjustment | ||||||||||||||||||||||||||||
Losses on valuation of available-for-sales securities | (3,687 | ) | - | |||||||||||||||||||||||||
Gains on valuation of equity method Investments | - | 332 | ||||||||||||||||||||||||||
Losses on valuation of equity method Investments | (114,309 | ) | - | |||||||||||||||||||||||||
Stock options | 9,100 | — | ||||||||||||||||||||||||||
Total shareholders’ equity | 47,296,191 | 17,416,318 | ||||||||||||||||||||||||||
Total liabilities and shareholders’ equity | 58,048,385 | 22,824,974 | ||||||||||||||||||||||||||
(2) Statements of operations
GRAVITY Co., Ltd.
Statements of Income
Years Ended December 31, 2004 and 2003
(in thousands of Korean Won, except per share amounts)
2004 | 2003 | |||||||||||||||
Revenues | 58,223,490 | 37,035,034 | ||||||||||||||
Cost of sales | 8,662,770 | 6,518,562 | ||||||||||||||
Gross profit | 49,560,720 | 30,516,472 | ||||||||||||||
Selling and administrative expenses | 15,996,807 | 12,401,192 | ||||||||||||||
Operating income | 33,563,913 | 18,115,280 | ||||||||||||||
Non-operating income | ||||||||||||||||
Interest income | 502,813 | 105,807 | ||||||||||||||
Gain on foreign exchange transactions | 324,389 | 84,345 | ||||||||||||||
Gain on foreign exchange translation | 2,690 | 778 | ||||||||||||||
Gain on disposal of property, plant and equipment | 37 | 183,214 | ||||||||||||||
Gain on disposition of Intangible Assets | 9,030 | - | ||||||||||||||
Gain on available-for-sales securities | - | 26,900 | ||||||||||||||
Earnings from equity method Investments | - | 592,705 | ||||||||||||||
Miscellaneous gains | 66,041 | 69,138 | ||||||||||||||
905,000 | 1,062,887 | |||||||||||||||
Non-operating expenses | ||||||||||||||||
Interest expense | 1,213 | 208,715 | ||||||||||||||
Loss on foreign exchange transactions | 896,805 | 46,949 | ||||||||||||||
Loss on foreign exchange translation | 143,702 | 6,356 | ||||||||||||||
Loss on disposal of available-for-sales securities | 1,331 | 510 | ||||||||||||||
Loss on impairment of available-for-sales securities | - | 100 | ||||||||||||||
Losses from equity method Investments | 98,783 | — | ||||||||||||||
Loss on impairment of investments | — | 776,700 | ||||||||||||||
Loss on disposal of intangible assets | — | 168 | ||||||||||||||
Donations | 3,000 | 2,030 | ||||||||||||||
Miscellaneous losses | 6,676 | 79,295 | ||||||||||||||
1,151,510 | 1,120,823 | |||||||||||||||
Income before income taxes | 33,317,403 | 18,057,344 | ||||||||||||||
Income tax expense | 3,328,303 | 3,419,162 | ||||||||||||||
Net income | 29,989,100 | 14,638,182 | ||||||||||||||
Per share data(In Won) | ||||||||||||||||
Ordinary income per share | 5,405 | 2,853 | ||||||||||||||
Earnings per share | 5,405 | 2,853 |
(3) Statement of Appropriation of Retained Earnings for the 5th Fiscal Year
Statement of Appropriation of Retained Earnings for the Fiscal Year
From January 1 to December 31, 2004
From January 1 to December 31, 2003
Korean Won
2004 | 2003 | |||||||
Accumulated retained earnings before disposition | 42,512,806,067 | 12,523,705,736 | ||||||
Disposition of retained earnings | — | — | ||||||
Undisposed retained earnings to be carried forward to subsequent year | 42,512,806,067 | 12,523,705,736 | ||||||
(4) | Information on dividend for the past two years : N/A |
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2. Approval of Election of Directors
2-1. Election of Standing Director
Mr. Jung Ryool Kim’s terms of director expired as of Mar. 29, 2005 and he was re-appointed as director at this annual general meeting of shareholders.
Name | Major Experience | Recommender | ||
Jung Ryool Kim | <EDUCATION> Mar. 1998, Completed the chief executive program at Yonsei University’s Graduate School of Public Administration Jan. 1972, Graduated from the Teacher’s College High School of Korea University <CAREER> April 2000 ~ 2005. Present, Chairman of GRAVITY, and one of our joint representative directors since August 2004 2005. Present, Chairman of the Korea Entertainment System Industry Association 2002 ~ 2004 Chairman of the executive committee for the Korea Amuse World Game Expo 2004, 2003 and 2002 Mar. 1994 ~ Mar. 2004, President of the Korea Amusement Machine Manufacturers Association Jun. 1992 ~ Feb. 1995 and since Aug. 2000, CEO ofUtak Co. Ltd. | BOD and director nomination committee | ||
We currently lease our headquarters space from Mr. Jung Ryool Kim, our largest shareholder, at a monthly rent of KRW33 million and a monthly management fee of approximately KRW20 million, together with a security deposit of KRW3.8 billion.
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2-2. Election of Outside Directors as Audit Committee Members
Name | Major Experience | Recommender | ||
Chan Joong Park | <EDUCATION> 1983~1987 Seoul National University, Business (BA) 1987~1989 Seoul National University Graduate School, Business (Master) 1995~1997 University of Michigan Business School (MBA), Ann Arbor <CAREER> 2003~Present SK Chemicals, Vice President of Corporate Strategy 1997~2002 McKinsey & Co, Associate Principle 1989~1995 Ministry of Commerce, Industry and Energy, Deputy Director | director nomination committee | ||
So Young Choi | <EDUCATION> 1998 : IMD INTERNATIONAL International Institute for Management Development, Master of Business Administration, Majors in Strategy and General Management 1988-1992 : Seoul National University Bachelor of Arts in Economics, Graduated with honors <CAREER> March 2003 ~ Present: T-Plus Consulting Inc. President and CEO October 1994 ~March 2003 : THE BOSTON CONSULTING GROUP Practice Leader of Consumer and Retail Group Regional Node of BCG Asia Pacific Consumer and Retail Group Practice Leader of Organization and HR Group Group Mentor of BCG Seoul Consultants Jan 1992 — Oct 1994 : HYUNDAI INTERNATIONAL MERCHANT BANK | director nomination committee | ||
Mr. Chan Joong Park and Mr. So Young Choi stated above have no relationship with our major shareholder and have no transactions with Company either.
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2-3. Election of Outside Directors
Name | Major Experience | Recommender | ||
Jong Mahn Park | <EDUCATION> - - University of Michigan Business School (MBA, Finance and Corporate Strategy) - - Seoul National University(BS, MS in Computer Engineering) <CAREER> 2004-Present Internet Auction Co., an eBay company(Director of Customer Support / Trust & Safety) 1999-2004 The Boston Consulting Group (Manager) 1996-1997 Future Systems (General manager of product planning) 1990-1995 LG Software Ltd. (Manager of software development) | director nomination committee | ||
Mu Sik Jung | <EDUCATION> Aug. 2003 Graduated from Han Nam University majoring in microbiology. <CAREER> 1994- 2003 Triggersoft (Development Team) 1999- Present Korea Game Developer Committee (Chairman) 2003- 2005 NCsoft (Development Team) | director nomination committee | ||
Hyung Oh Yoo | <EDUCATION> Feb, 1991 Graduated from SungKyunKwan University majoring in mass communication and journalism <CAREER> 2004- Present Korea Association Of Game Industry (Vice President) 2000- 2004 GameBridge, Inc (CEO) 1991- 2003 Electronic Times Internet Co., Ltd. | director nomination committee | ||
Mr. Jong Mahn Park, Mr.Mu Sik Jung and Mr. Hyung Oh Yoo stated above have no relationship with our major shareholder and have no transactions with Company either.
Before the election of above directors, two non-standing directors, Sung Hee Lee and Eun Jong Lee and one standing director Yeon Ho Moon who are not independent resigned from directorship as of Mar. 29, 2005. As a result, our board of directors consists of total ten directors out of which six directors currently qualify as independent directors complying with the definition of “independence” under NASDAQ rule 4200(a)(15).
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3. Approval of the Maximum Amount of Total Remuneration for the directors during the 6th Fiscal Year
- Total number of directors and their maximum amount of compensation approved
2005 | 2004 | |||
Number of directors (Number of outside directors) | 10 (6) | 8 (2) | ||
Total amount or the cap on compensation | KRW 1.4 billion | KRW 0.7 billion | ||
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