대한뉴팜

Daehan New Pharm Co., Ltd.’s sales for the January to September period reached 34.1 billion KRW, maintaining a similar level to the previous year. Operating profit increased by 9.8% year-on-year to 4.3 billion KRW (operating profit margin 12.6%) due to results from restructuring and operational efficiency improvements. However, net income decreased by 1.3 billion KRW to 560 million KRW (net profit margin 1.6%), mainly due to litigation costs of 1.94 billion KRW incurred in early July, which were accounted for in the first half of the year. The company is currently appealing and the lawsuit is ongoing. Daehan New Pharm is proactively responding to the challenging business environment in the pharmaceutical industry, including drug price reductions, through management innovation initiatives under the mindset of "START-UP Daehan New Pharm Project." Along with strategic innovation to become the top specialist company in the Med Health (Welling) field, Daehan New Pharm is accelerating efforts to secure core competencies and modernize systems by restructuring product portfolios, strengthening distribution competitiveness, establishing a cash flow and profit-centered operating system, and fostering key talent with performance-based human resource management. The company expects that the first phase of innovation activities this year will be a strategic turning point yielding breakthrough results, and it is committed to continuously driving innovation to make this crisis a launching pad for its second leap forward.

Final Results of the Reassessment of Five Existing Drug Categories1. We hereby inform you of the final results and the effective dates of the revised drug prices for the five therapeutic categories that have been undergoing reassessment since the second half of last year. Please refer to the details below for your business operations. 2. Please note that the effective date of implementation differs by product. << Details >> (1) Price Changes Product Name Current Price 2011.7.1 2012.7.1 Tiparon Tab. (Tiropramide HCl) 195 156 Metazin Tab. 122 113 109 Mucoran Tab. (Rebamipide) 151 150 Asitoba Cap. 300 mg 195 181 173 Levoran Tab. (Levosulpiride) 194 180 177 Silotal Tab. (Cilostazol) 419 390 365 (2) Drug Price DeletionsEffective period: from July 1, 2011 to August 31, 2011 (insurance reimbursement applies during this period) Product Name Current Price Diphedin Inj. 2 mL 670 Mezotopy Inj. (Nicotinic Acid Ethofylline) 2,404 Ribendol Tab. (Alibendol) 104 Diazhe Tab. (Dimecrotinic Acid Magnesium) 97 End.

Daehan New Pharm Co., Ltd. achieved a profit turnaround with a 23% increase in sales to 12,736 million KRW and an 82% significant growth in operating profit to 1,459 million KRW (operating profit margin 11.5%). Although net income was in deficit in Q4 2010, it turned positive to 418 million KRW in Q1 2011. This remarkable improvement in Daehan New Pharm's performance is attributed to the successful implementation of key strategic tasks, including product structure enhancement, distribution structure improvement, sales force strengthening, organizational revitalization, and rigorous profitability-focused responsible management activities. The company has been enhancing its product portfolio by focusing and specializing on core products such as obesity and vitamin treatments, and shifting distribution strategy to direct transactions, which continuously improves its competitiveness.

In 2010, Daehan New Pharm Co., Ltd. reorganized its disrupted sales network and achieved a 22% sales growth, laying the foundation for a renewed leap forward while resolving past obstacles to growth, creating an opportunity for further development. In the fourth quarter of 2010, the company disposed of approximately 6 billion KRW of doubtful accounts receivable from before 2008 through sales of accounts receivable. This was rigorously evaluated through an audit by an accounting firm between November 17 and November 29, 2010, and sold to a specialized acquiring company. As a result, operating profit amounted to 5.8 billion KRW, up 7% year-over-year, but a loss on accounts receivable sales (-6 billion KRW), an extraordinary expense, caused a net loss of 2.7 billion KRW. While the net loss occurred temporarily due to the loss on accounts receivable sales, operating profit increased compared to the previous year. Through this disposal of doubtful accounts receivable, the company improved asset soundness and financial structure while also achieving tax reduction and securing cash liquidity. Going forward, the company will strive for a united effort by all executives and employees to achieve sales of 100 billion KRW within the next two to three years.

On December 1, 2010, Roksy Corporation announced through a public disclosure that they had obtained approval from Kazakhstan's antitrust law authorities to transfer a 40% stake in the Galaz Block to LG Corporation, completing the transaction. The Galaz Block is an investment area in which Daehan New Pharm holds equity. It has already been recognized for its economic viability by a third party and is currently awaiting final government approval from Kazakhstan for pilot production. With this, the Galaz Block will be primarily developed under the leadership of LG Corporation, a major domestic conglomerate. The plan is to not only continue initial production but to actively explore and develop additional production wells throughout 2021, gradually increasing productive capacity. The project will also benefit from smooth financing, which will accelerate exploration and development activities. Through this transaction, Galaz Corporation will receive 15.6 million USD as transaction proceeds and is expected to receive an additional 17.5 million USD designated for exploration and development expenses.

Daehan New Pharm Co., Ltd. Analysis of Financial Results for January–September 20101. Increase in Sales Revenue (1) Third Quarter - Compared to the same period of the previous year, product sales increased by 23.1% and merchandise sales by 528.3%, recording a total growth rate of 25.4%. (Unit: Million KRW) Classification Q3 2010 Q3 2009 Change Change (%) Sales Products 12,284 9,979 2,305 23.1% Merchandise 289 46 243 528.3% Total 12,573 10,025 2,548 25.4% (2) Cumulative (January–September)- Compared to the same period of the previous year, product sales increased by 13.5% and merchandise sales by 92.9%, achieving total growth of 15%.(Unit: Million KRW) Classification Jan–Sep 2010 Jan–Sep 2009 Change Change (%) Sales Products 32,975 29,054 3,921 13.5% Merchandise 1,107 574 533 92.9% Total 34,082 29,628 4,454 15.0% 2. Operating Profit and Income Before Income Taxes from Continuing Operations(1) Third Quarter- Operating profit increased by KRW 180 million (11.6%) compared to the same period of the previous year.- Income before income taxes from continuing operations increased by KRW 590 million (1,414.3%) compared to the same period of the previous year.(Unit: Million KRW) Q3 2010 Q3 2009 Change Change (%) Amount Profit Rate Amount Profit Rate Operating Profit 1,705 13.6% 1,528 15.2% 17711.6% Non-operating Income 81 105 -24 Non-operating Expenses 1,150 1,591 -441 Income Before Income Taxes (Continuing Operations) 636 5.1% 42 0.4% 5941414.3% 1) Operating profit in 2010 was KRW 1.70 billion (margin 13.6%) compared to KRW 1.53 billion (margin 15.2%) in 2009, showing an increase of KRW 180 million over the previous year.2) Income before income taxes from continuing operations was KRW 640 million (margin 5.1%) in 2010, compared to KRW 40 million (margin 0.4%) in 2009, an increase of KRW 590 million year-on-year.(2) Cumulative (January–September)- Operating profit increased by KRW 440 million (10.4%) compared to the same period of the previous year.- Income before income taxes from continuing operations was KRW 2.47 billion, a decrease of KRW 1.7 billion compared to the previous year, mainly due to a reduction in non-operating income (interest income).(Unit: Million KRW) Jan–Sep 2010 Jan–Sep 2009ChangeChange (%) AmountProfit RateAmountProfit RateOperating Profit4,67913.7%4,23714.3%44210.4%Non-operating Income1,433 3,614 -2,181 Non-operating Expenses3,640 3,922 -282 Income Before Income Taxes (Continuing Operations)2,4727.3%3,92913.3%-1,457-37.1%1) Operating profit in 2010 was KRW 4.68 billion (margin 13.7%), compared to KRW 4.24 billion (margin 14.3%) in 2009, showing an increase of KRW 440 million over the previous year.2) Income before income taxes from continuing operations was KRW 2.47 billion (margin 7.3%) in 2010, compared to KRW 3.93 billion (margin 13.3%) in 2009, showing a decrease from the previous year.(Unit: Million KRW) Jan–Sep 2010 Jan–Sep 2009 Change Remarks Interest Income 121 1,721 -1,600 - 2009 (January–September): Interest income of KRW 1.7 billion (USD 1,318,744.62) was generated from loans totaling USD 11 million.- Income before income taxes from continuing operations decreased by approximately KRW 1.46 billion (37.1%) compared to the same period of the previous year, mainly due to the decline in interest income from loans.3. Improvement in Financial Structure- Significant reduction in long-term loans.(Unit: Million KRW) Jan–Sep 2010 Jan–Sep 2009 Change Remarks Long-term Loans 5,482 25,687 -20,205 Total Assets 125,057 111,827 13,230 Ratio to Total Assets (%) 4.4% 23.0% -18.6% (1) The long-term loan of USD 11,000,000 to GALAZ ENERGY B.V. was converted into equity as of February 22, 2010.(2) The loan of USD 6,200,000 to BNG ENERGY B.V. was converted into equity as of May 7, 2010.

Daehan New Pharm Co., Ltd. completed its mid-year recruitment for experienced and new employees, and commenced a 10-day training program starting from September 6, 2010, at the Cheongho Human Resources Development Center located in Hwaseong, Gyeonggi Province. This training program, with the goal of strengthening sales capabilities, includes 25 trainees who will focus on mastering local sales strategies, enhancing the fundamental qualities and ethical education of pharmaceutical sales representatives. Earlier in February of the same year, the company also recruited 25 new employees, conducted a 15-day training program, and assigned them to various branches to actively promote local sales efforts, achieving results beyond expectations.

Daehan New Pharm Co., Ltd. Analysis of Financial Results (First Half of 2010)1. Increase in Product Sales(Unit: Million KRW) First Half of 2010 First Half of 2009 Change Change (%) Sales Products 20,690 19,075 1,615 8.5% Merchandise 818 528 290 54.9% Total 21,508 19,603 1,905 9.7% - Compared to the same period of the previous year, product sales increased by 8.5%, and merchandise sales rose by 54.9%, achieving an overall sales growth rate of 9.7%.2. Operating Profit and Income Before Income Taxes from Continuing Operations- Operating profit increased by KRW 260 million (9.7%) compared to the same period last year.- Income before income taxes from continuing operations recorded KRW 1.84 billion, a decrease of KRW 1.95 billion from the previous year, mainly due to a decline in non-operating income (interest income).(Unit: Million KRW) First Half of 2010 First Half of 2009 Change Change (%) Amount Profit Rate Amount Profit Rate Operating Profit 2,973 13.8% 2,709 13.8% 264 9.7% Non-operating Income 1,559 3,509 -1,950 Non-operating Expenses 2,697 2,331 366 Income before Income Taxes from Continuing Operations 1,835 8.5% 3,887 19.8% -2,052 -52.8% (1) Operating profit was KRW 2.97 billion (margin 13.8%) for the first half of 2010, compared to KRW 2.71 billion (margin 13.8%) for the same period of 2009, an increase of KRW 260 million year-on-year.(2) Income before income taxes from continuing operations was KRW 1.84 billion (margin 8.5%) in 2010, compared to KRW 3.89 billion (margin 19.8%) in 2009, showing a decrease from the previous year.(Unit: Million KRW) First Half of 2010 First Half of 2009 Change Remarks Interest Income 82 1,707 -1,625 Foreign Exchange Gains 254 730 -476 Foreign Exchange Losses 92 65 27 - In the first half of 2009, interest income of KRW 1.7 billion (USD 1,318,744.62) was generated from loans amounting to USD 11 million.- Income before income taxes from continuing operations decreased by approximately KRW 2 billion (52.8%) year-on-year, primarily due to reduced interest income from loans.3. Improvement in Financial Structure- Significant reduction in long-term loans.(Unit: Million KRW) First Half of 2010 First Half of 2009 Change Remarks Long-term Loans 5,809 25,687 -19,878 Total Assets 120,478 111,827 8,651 Ratio to Total Assets (%) 4.8% 23.0% -18.1% (1) The long-term loan of USD 11,000,000 to GALAZ ENERGY B.V. was converted into equity on February 22, 2010.(2) The loan of USD 6,200,000 to BNG ENERGY B.V. was also converted into equity on May 7, 2010.

Daehan New Pharm Co., Ltd. Analysis of Financial Results (1st Quarter, January–March 2010)1. Increase in Product Sales (Unit: Million KRW) TypeJan–Mar 2010Jan–Mar 2009ChangeChange (%)SalesProducts10,1448,8371,30714.8%Merchandise18043137322.5%Total10,3248,8801,44416.3%- Compared with the previous quarter, product sales increased by 14.8%, and merchandise sales rose by 322.5%, resulting in total sales growth of 16.3%.- Sales of livestock disinfectants related to the foot-and-mouth disease outbreak increased 200% compared with the previous quarter.2. Substantial Improvement in Operating Profit(Unit: Million KRW) Jan–Mar 2010Jan–Mar 2009ChangeChange (%)AmountProfit RateAmountProfit RateOperating Profit1,23912.0%93210.5%30732.9%Non-operating Income1,063 4,117 -3,054 Non-operating Expenses1,580 1,916 -336 Income before Income Taxes from Continuing Operations7727.0%3,13335.3%-2,411-77.0%(1) Operating profit for the first quarter of 2010 was KRW 1.24 billion (margin 12.0%), compared with KRW 930 million (margin 10.5%) in the same period of 2009, marking a significant 33% year-on-year increase.- This improvement was achieved through rigorous profit-oriented management andive concentration on high-profit products, resulting in higher profit margins.(2) Income before income taxes from continuing operations was KRW 720 million (margin 7.0%) in 2010, compared to KRW 3.13 billion (margin 35.3%) in 2009, showing a decline from the prior year.(Unit: Million KRW) Jan–Mar 2010Jan–Mar 2009ChangeRemarksForeign Exchange Gains414,006-3,965 Foreign Exchange Losses421101320 - A foreign exchange loss occurred due to the depreciation of the Korean won associated with USD 11 million in loans receivable.- Income before income taxes decreased by approximately KRW 2.4 billion (77%) year-on-year, mainly due to exchange rate fluctuations affecting loans. This was a non-cash book loss with no actual cash outflow involved.3. Improvement in Financial StructureSignificant Reduction in Long-term Loans(Unit: Million KRW) End-Mar 2010End-Dec 2009ChangeRemarksLong-term Loans Receivable12,43925,687-13,248 Total Assets116,135111,8274,308 Ratio to Total Assets (%)10.7%23.0%-12.3% - The long-term loan of USD 11,000,000 to GALAZ ENERGY B.V. was converted to available-for-sale securities as of February 23, 2010, resulting in a substantial reduction in long-term loans.