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 2018

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:  ☒ Form 20-F    ☐ 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):  ☐

 

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):  ☐

 

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 # 2 located at 3F, Business Tower, 396 World Cup buk-ro, Mapo-gu, Seoul 121-795 Korea at 10:00 a.m. on March 30, 2018.

 

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 separate and consolidated financial statements as of and for the years ended December 31, 2017 and 2016 prepared in accordance with International Financial Reporting Standards as adopted by the Republic of Korea, or Korean IFRS, and audited in accordance with Korean Standards on Auditing.

 

•

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 2018.

 

Furthermore, the Company’s 2017 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 separate and consolidated financial statements, including the notes thereto, which are prepared in the Korean language prepared in accordance with Korean IFRS and audited in accordance with Korean Standards on Auditing as of and for the years ended December 31, 2017, 2016 and January 1, 2016 (“2017/2016 Korean IFRS separate and consolidated financial statements”) with the Financial Supervisory Service of Korea on April 5, 2018. The condensed English translation version of the 2017/2016 Korean IFRS separate 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.

 

Exhibit Index

 

 

Exhibit No.

 

Description

99. 1

 

Gravity Reports Separate Financial Results for 2017

 

 

 

99. 2

 

Gravity Reports Consolidated Financial Results for 2017

 

 

99. 3

 

2017 Annual Business Report

 

 

 

 

 

 

 

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.

 

 

 

GRAVITY CO., LTD.

 

By:

/s/ Heung Gon Kim

Name:

Heung Gon Kim

Title:

Chief Financial Officer

Date: March 30, 2018

 

grvy-ex991_21.htm

Exhibit 99.1

GRAVITY REPORTS SEPARATE FINANCIAL RESULTS FOR 2017

Seoul, South Korea, March 30 2018- GRAVITY Co., Ltd. (NasdaqCM: GRVY) (“Gravity'” or the “Company'”), an online and mobile game developer and publisher based in South Korea, announces its separate financial results for the fiscal year ended December 31, 2017, prepared in accordance with International Financial Reporting Standards as adopted by the Republic of Korea. Financial statements are available on Edgar at http://www.sec.gov.

REVIEW OF FINANCIAL RESULTS

Revenues and Cost of Revenues

Revenues for 2017 were KRW 119,422 million (US$ 111,879 thousand), representing a 241.6% increase from KRW 34,960 million for 2016.

Subscription revenue increased by 66.8% to KRW 31,533 million (US$ 29,541 thousand) in 2017 from KRW 18,905 million in 2016. The increase resulted mainly from the increase in revenues from Ragnarok Online and Ragnarok Prequel in Taiwan.

Royalties and licensing fees revenue for 2017 was KRW 17,069 million (US$ 15,991 thousand), representing a 29.7% increase from KRW 13,164 million for 2016. This increase primarily resulted from increased revenues from Ragnarok Online in Japan, Philippines, Singapore, Malaysia and Indonesia and revenue from deferred revenue recognition related to Ragnarok Online II in china based on a game development and publishing agreement.

Mobile game revenue for 2017 was KRW 70,634 million (US$ 66,173 thousand), representing a 2,521.9% increase from KRW 2,694 million for 2016. This increase was mainly attributable to increased revenues from Ragnarok M which was launched in Taiwan in October 2017, Ragnarok R in Korea, Taiwan and Thailand and global service of RO: Idle Poring, except for Japan, China and Korea.

Other revenue was KRW 186 million (US$ 174 thousand) in 2017, representing a 5.6% decrease from KRW 197 million in 2016.

Cost of revenues was KRW 75,973 million (US$ 71,174 thousand) in 2017, representing a 456.1% increase from KRW 13,662 million in 2016. The increase in cost of revenues was mainly due to increased commission paid for game services related to Ragnarok M, Ragnarok R, RO: Idle Poring and Ragnarok Prequel.

As a result of the foregoing factors, gross profit for 2017 was KRW 43,449 million (US$ 40,705 thousand), representing a 104% increase from KRW 21,298 million for 2016. The gross profit ratio decreased to 36.4% in 2017 from 60.9% in 2016.

Selling, General & Administrative Expenses (“SG&A”)

The Company’s total SG&A increased 87.7% to KRW 29,774 million (US$ 27,893 thousand) in 2017 compared with KRW 15,862 million in 2016. This increase in SG&A was mostly attributable to increased advertising expenses for Ragnarok R, Ragnarok Zero and Sword and Fairy: Mirror’s Mirage and research and development expenses.

Based on the foregoing factors, the Company recorded an operating profit of KRW 13,675 million (US$ 12,812 thousand) in 2017, compared to an operating profit of KRW 5,436 million in 2016.  

Non-operating Income and Expenses

Non-operating income for 2017 was KRW 247 million (US$ 231 thousand) compared with non-operating expenses KRW 2,442 million in 2016. The decrease in non-operating expenses was primarily due to impairment loss investment in subsidiaries in 2016, which was not incurred in 2017 and decreased bad debt expenses related to subsidiary loan.

Profit before income tax for 2017 was KRW 13,922 million (US$ 13,043 thousand), compared with profit before income tax of KRW 2,994 million in 2016.

Gravity recorded a net profit of KRW 12,982 million (US$ 12,162 thousand) in 2017 compared with a net loss of KRW 226 million in 2016.

The balance of cash and cash equivalents and short-term financial instruments was KRW 57,490 million (US$ 53,859 thousand) as of December 31, 2017.

Note: For convenience purposes only, the KRW amounts have been expressed in U.S. dollars at the rate of KRW 1,067.42 to US$1.00, the noon buying rate in effect on December 29, 2017 as quoted by the Federal Reserve Bank of New York.

 

 

grvy-ex992_20.htm

Exhibit 99.2

GRAVITY REPORTS CONSOLIDATED FINANCIAL RESULTS FOR 2017

Seoul, South Korea, March 30 2018- GRAVITY Co., Ltd. (NasdaqCM: GRVY) (“Gravity'” or the “Company'”), an online and mobile game developer and publisher based in South Korea, announces its consolidated financial results for the fiscal year ended December 31, 2017, prepared in accordance with International Financial Reporting Standards as adopted by the Republic of Korea. The consolidated subsidiaries as of December 31, 2016 and as of December 31, 2017 are NeoCyon, Inc., Gravity Interactive, Inc., Gravity Games Corporation and Gravity Entertainment Corporation. Financial statements are available on Edgar at http://www.sec.gov.

 

REVIEW OF FINANCIAL RESULTS

Revenues and Cost of Revenues

Revenues for 2017 were KRW 141,623 million (US$ 132,678 thousand), representing a 175.6% increase from KRW 51,396 million for 2016.

Subscription revenue increased by 57.9% to KRW 36,428 million (US$ 34,127 thousand) in 2017 from KRW 23,065 million in 2016. The increase resulted mainly from the increase in revenues from Ragnarok Online and Ragnarok Prequel in Taiwan and Ragnarok Online in the United States and Canada.

Royalties and licensing fees revenue for 2017 was KRW 16,244 million (US$ 15,218 thousand), representing a 26.2% increase from KRW 12,867 million for 2016. This increase primarily resulted from increased revenues from Ragnarok Online in Japan, Philippines, Singapore, Malaysia and Indonesia and revenue from deferred revenue recognition related to Ragnarok Online II in china based on a game development and publishing agreement.

Mobile game revenue for 2017 was KRW 82,624 million (US$ 77,406 thousand), representing a 586.2% increase from KRW 12,041 million for 2016. This increase was mainly attributable to increased revenues from Ragnarok M which was launched in Taiwan in October 2017, Ragnarok R in Korea, Taiwan and Thailand and global service of RO: Idle Poring, except for Japan, China and Korea.

Other revenue was KRW 6,327 million (US$ 5,927 thousand) in 2017, representing a 84.8% increase from KRW 3,423 million in 2016.

Cost of revenues was KRW 94,234 million (US$ 88,282 thousand) in 2017, representing a 218.5% increase from KRW 29,587 million in 2016. The increase in cost of revenues was mainly due to increased commission paid for game services related to Ragnarok M, Ragnarok R, RO: Idle Poring and Ragnarok Prequel.

As a result of the foregoing factors, gross profit for 2017 was KRW 47,389 million (US$ 44,396 thousand), representing a 117.3% increase from KRW 21,809 million for 2016. The gross profit ratio decreased to 33.5% in 2017 from 42.4% in 2016.

Selling, General & Administrative Expenses (“SG&A”)

The Company’s total SG&A increased 85.2% to KRW 33,251 million (US$ 31,151 thousand) in 2017 compared with KRW 17,950 million in 2016. This increase in SG&A was mostly attributable to increased advertising expenses for Ragnarok R, Ragnarok Zero and Sword and Fairy: Mirror’s Mirage and research and development expenses.

Based on the foregoing factors, the Company recorded an operating profit of KRW 14,138 million (US$ 13,245 thousand) in 2017, compared to an operating profit of KRW 3,859 million in 2016.  

Non-operating Income and Expenses

Non-operating income for 2017 was KRW 320 million (US$ 300 thousand) compared with non-operating expenses KRW 32 million in 2016. This increase in non-operating income was primarily due to gain on foreign currency transaction, which was partially offset by increased impairment loss on intangible assets related to Sword and Fairy: Mirror’s Mirage in 2017, which was not incurred in 2016.

Profit before income tax for 2017 was KRW 14,458 million (US$ 13,545 thousand), compared with profit before income tax of KRW 3,827million in 2016.

Gravity recorded a net profit of KRW 13,314 million (US$ 12,473 thousand) in 2017 compared with a net profit of KRW 587 million in 2016.

The balance of cash and cash equivalents and short-term financial instruments was KRW 61,595 million (US$ 57,705 thousand) as of December 31, 2017.

Note: For convenience purposes only, the KRW amounts have been expressed in U.S. dollars at the rate of KRW 1,067.42 to US$1.00, the noon buying rate in effect on December 29, 2017 as quoted by the Federal Reserve Bank of New York.

 

grvy-ex993_19.htm

Exhibit 99.3

2017 Annual Business Report

Table of Contents

 

1.

Business Overview

 

(1)

Business Results and Financial Statements for the Past Three Fiscal Years (2015 – 2017)

 

2.

Company Overview

 

(1)

Registered Purpose of the Company

 

(2)

Description of Primary Business

 

(3)

Problems Confronting the Company  

 

(4)

Business Offices and Game Development Facilities

 

(5)

Stock

 

(6)

Debenture

 

(7)

Major Share holders

 

(8)

Investment in Other Companies

 

(9)

Directors Holding Concurrent Positions

 

(10)

Material Transactions with Related Parties

 

(11)

Significant Creditors

 

(12)

Employees

 

(13)

Directors and Auditors

 

(14)

Material Events after the End of Fiscal Year 2017

 

3.

Separate Financial Statements as of and for the fiscal years ended December 31, 2017, 2016 and January 1, 2016

 

(1)

Financial Positions

 

(2)

Comprehensive Income

 

(3)

Statements of Appropriation of Retained earnings

 

(4)

Statements of Changes in Equity

 

(5)

Statements of Cash Flows

 

(6)

Notes to Separate Financial Statements

 

4.

Consolidated Financial Statements as of and for the fiscal years ended December 31, 2017, 2016 and January 1, 2016

 

(1)

Consolidated Financial Positions

 

(2)

Consolidated Comprehensive Income

 

(3)

Consolidated Statements of Changes in Equity

 

(4)

Consolidated Statements of Cash Flows

 

(5)

Notes to Consolidated Financial Statements

 

 

1. Business Overview

 

(1)

Business Results and Financial Statements for the Past Three Fiscal Years (2015 – 2017)

 

 

 

 

 

 

 

(In thousands of Korean Won)

 

Category

 

2017

 

 

2016

 

 

2015

 

Current assets

 

 

101,697,494

 

 

 

48,052,889

 

 

 

38,721,164

 

• Quick assets

 

 

101,697,494

 

 

 

48,052,889

 

 

 

38,721,164

 

Non-current assets

 

 

9,720,122

 

 

 

4,597,662

 

 

 

5,041,623

 

• Investment asset

 

 

1,783,228

 

 

 

1,783,228

 

 

 

3,458,638

 

• Tangible asset

 

 

476,027

 

 

 

320,560

 

 

 

353,334

 

• Intangible asset

 

 

988,855

 

 

 

160,873

 

 

 

253,643

 

• Other non-current asset

 

 

6,472,012

 

 

 

2,333,001

 

 

 

976,008

 

Total assets

 

 

111,417,616

 

 

 

52,650,551

 

 

 

43,762,787

 

Current liabilities

 

 

59,753,549

 

 

 

16,499,905

 

 

 

4,336,561

 

Non-current liabilities

 

 

6,630,636

 

 

 

3,726,148

 

 

 

6,801,079

 

Total liabilities

 

 

66,384,185

 

 

 

20,226,053

 

 

 

11,137,640

 

Share capital

 

 

3,474,450

 

 

 

3,474,450

 

 

 

3,474,450

 

Capital surplus

 

 

27,482,683

 

 

 

28,219,282

 

 

 

43,945,390

 

Retained earnings (Accumulated deficit)

 

 

14,424,777

 

 

 

705,690

 

 

 

(14,794,693

)

Other components of equity

 

 

(348,479

)

 

 

25,076

 

 

 

—

 

Total equity

 

 

45,033,431

 

 

 

32,424,498

 

 

 

32,625,147

 

Revenues

 

 

119,422,554

 

 

 

34,960,528

 

 

 

16,282,357

 

Operating profit (loss)

 

 

13,675,573

 

 

 

5,436,475

 

 

 

(8,711,508

)

Profit (loss) before income tax

 

 

13,922,239

 

 

 

2,994,179

 

 

 

(14,461,284

)

Net profit (loss)

 

 

12,982,487

 

 

 

(225,724

)

 

 

(15,726,108

)

 

* The Company has adopted IFRS as issued by IASB for the annual period beginning on January 1, 2017. In accordance with First-time adoption of IFRS, the Company’s transition date to IFRS is January 1, 2016.

* The financial statement of operating result for the fiscal year 2015 is prepared in accordance with Korean Accounting Standards for Non-Public Entities in Korea, which was previously approved at the AGM on March 25, 2016

 

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 81 markets worldwide, including Korea, Japan, Taiwan, Thailand, Southeast Asia, the United States and Europe as of December 31, 2017.

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. The Company also has subsidiaries in Korea, such as NeoCyon, Inc. and Gravity Games Corp. In November 2016, the company established a branch office in Taiwan.

 

(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.

In addition, 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

 

Classification

 

Location

Head Office

 

(Nuritkum Square R&D Tower) 15F, 396 World Cup buk-ro,

Mapo-gu, Seoul 121-795, Korea

Branch Office

 

Suite 6, 3rd Floor, No.88, Ruihu Street, Neihu District, Taipei

Game Development Facilities

 

(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, 2017)

Total number of shares authorized

 

Total number of shares issued

 

Total number of shares unissued

40,000,000 shares

 

6,948,900 shares

 

33,051,100 shares

 

 

2)

Type of Stock issued (Par value per share: KRW 500)

 

(As of December 31,2017)

Type

 

Number of shares

 

Total par value

 

%

 

Registered common stock

 

6,948,900 shares

 

KRW 3,474,450,000

 

100 %

 

 

 

(6)

Debenture: None.

 

 

(7)

Major Shareholders

 

 

 

 

 

 

 

(As of December 31, 2017)

 

Shareholder

 

Shares

owned

 

 

%

 

 

Transaction with

the Company

 

GungHo Online Entertainment, Inc.

 

 

4,121,737

 

 

 

59.31

 

 

*

 

Others

 

 

2,827,163

 

 

 

40.69

 

 

 

—

 

Total

 

 

6,948,900

 

 

 

100.00

 

 

 

—

 

 

* Refer to “(10) Material Transactions with Related Parties.”

 

 

(8)

Investment in Other Companies

 

 

 

 

 

 

 

 

 

(As of December 31, 2017)

Companies

 

Relationship with the Company

Name

 

Location

 

Common Stock

 

Main business

 

Shares owned

 

 

%

 

 

Relationship

Gravity Interactive, Inc.

 

California, US

 

USD 5,040,000

 

Gaming Service

 

 

100,000

 

 

 

100.00

%

 

Subsidiary

Gravity Entertainment Corp.

 

Tokyo, Japan

 

JPY 167,850,000

 

Animation

making/service

 

 

1,000

 

 

 

100.00

%

 

Subsidiary

NeoCyon, Inc.

 

Seoul, Korea

 

KRW 964,005,000

 

Mobile game

development

 

 

185,301

 

 

 

96.11

%

 

Subsidiary

Gravity Games Corp.

 

Seoul, Korea

 

KRW 1,134,730,000

 

Online game

development

 

 

194,035

 

 

 

85.50

%

 

Subsidiary

 

 

(9)

Directors Holding Concurrent Positions

 

 

 

Company

 

Name

 

Name

 

Position

 

Responsibility

 

Hyun Chul Park

 

Gravity Co., Ltd.

 

CEO

 

Overall management

 

 

 

NeoCyon, Inc.

 

Executive Director

 

Chief Operating Officer

 

 

 

Gravity Games Corp.

 

Executive Director

 

 

—

 

 

 

Gravity Interactive, Inc.

 

Executive Director

 

 

—

 

Yoshinori Kitamura

 

Gravity Co., Ltd.

 

Executive Director

 

Chief Operating Officer

 

 

 

Gravity Interactive, Inc.

 

CEO

 

Overall management

 

 

 

Gravity Entertainment Corp.

 

CEO

 

Overall management

 

 

 

NeoCyon, Inc.

 

CEO

 

Overall management

 

 

 

Gravity Games Corp.

 

Executive Director

 

 

—

 

 

 

(10)

Material Transactions with Related Parties

 

1)

Sales and purchases

 

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands of Korean Won)

 

 

 

 

 

2017

 

 

2016

 

Nature

 

Related companies

 

Sales

 

 

Purchases

 

 

Sales

 

 

Purchase

 

Parent company

 

GungHo Online Entertainment, Inc.

 

 

9,488,821

 

 

 

35,912

 

 

 

8,586,568

 

 

 

6,302

 

Subsidiaries

 

Gravity Interactive, Inc.

 

 

918,141

 

 

 

—

 

 

 

522,034

 

 

 

—

 

 

 

NeoCyon. Inc.

 

 

462,360

 

 

 

4,901,306

 

 

 

517,932

 

 

 

2,678,066

 

 

 

Gravity Games Corp.

 

 

985

 

 

 

218,600

 

 

 

8,348

 

 

 

—

 

 

 

Total

 

 

10,870,307

 

 

 

5,155,818

 

 

 

9,634,882

 

 

 

2,684,368

 

 

 

2)

Receivables and Payables

 

  

 

 

 

 

 

 

 

 

 

 

 

(In thousands of Korean Won)

 

 

 

 

 

2017

 

 

2016

 

 

Date of transition to IFRS

 

Nature

 

Related companies

 

Receivables

 

 

Payables

 

 

Receivables

 

 

Payables

 

 

Receivables

 

 

Payables

 

Parent company

 

GungHo Online Entertainment, Inc.

 

 

629,728

 

 

 

2,792

 

 

 

792,033

 

 

 

3,024,317

 

 

 

796,407

 

 

 

4,702,180

 

 

 

Gravity Interactive, Inc.

 

 

7,975,591

 

 

 

5

 

 

 

6,353,814

 

 

 

6

 

 

 

4,665,297

 

 

 

6

 

Subsidiaries

 

NeoCyon. Inc.

 

 

1,691,503

 

 

 

220,279

 

 

 

1,455,287

 

 

 

182,135

 

 

 

122,467

 

 

 

182,135

 

 

 

Gravity Games Corp.

 

 

3,873,051

 

 

 

4,396

 

 

 

3,872,992

 

 

 

—

 

 

 

3,872,998

 

 

 

—

 

 

 

Total

 

 

14,169,873

 

 

 

227,472

 

 

 

12,474,126

 

 

 

3,206,458

 

 

 

9,457,169

 

 

 

4,884,321

 

 

 

(11)

Significant Creditors: The Company had no significant creditors as of December 31, 2017.

 

 

(12)

Employees

 

 

 

 

 

 

 

 

 

(As of December 31, 2017)

Category

 

Directors & Officers

 

Developers

 

Marketing/Operating

 

Finance/Administration

 

Total

Employees

 

9

 

125

 

77

 

32

 

243

 

 

(13)

Directors and Auditors

 

Name

 

Position

 

Main work

 

 

Transaction with the

Company

 

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 2017: None.

3. Separate Financial Statements as of and for the fiscal year ended December 31, 2017, December 31, 2016 and January 1, 2016

 

(1)

Statements of Financial Position

 

GRAVITY CO., LTD.

(In thousands of Korean Won)

 

 

 

December 31, 2017

 

 

December 31, 2016

 

 

January 1, 2016

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

101,697,494

 

 

 

 

 

 

 

48,052,889

 

 

 

 

 

 

 

38,721,164

 

Cash and cash equivalents

 

 

34,990,206

 

 

 

 

 

 

 

13,995,265

 

 

 

 

 

 

 

22,153,898

 

 

 

 

 

Short-term financial

   instruments

 

 

22,500,000

 

 

 

 

 

 

 

21,500,000

 

 

 

 

 

 

 

11,500,000

 

 

 

 

 

Accounts receivable, net

 

 

38,890,644

 

 

 

 

 

 

 

9,490,377

 

 

 

 

 

 

 

3,641,173

 

 

 

 

 

Other receivable, net

 

 

704,664

 

 

 

 

 

 

 

1,050,725

 

 

 

 

 

 

 

152,597

 

 

 

 

 

Prepaid expenses

 

 

2,753,700

 

 

 

 

 

 

 

1,055,859

 

 

 

 

 

 

 

521,500

 

 

 

 

 

Other current assets

 

 

1,858,280

 

 

 

 

 

 

 

960,663

 

 

 

 

 

 

 

751,996

 

 

 

 

 

Non-current Assets

 

 

 

 

 

 

9,720,122

 

 

 

 

 

 

 

4,597,662

 

 

 

 

 

 

 

5,041,623

 

Investments in subsidiaries

 

 

1,783,228

 

 

 

 

 

 

 

1,783,228

 

 

 

 

 

 

 

3,458,638

 

 

 

 

 

Property and equipment, net

 

 

476,027

 

 

 

 

 

 

 

320,560

 

 

 

 

 

 

 

353,334

 

 

 

 

 

Intangible assets, net

 

 

988,855

 

 

 

 

 

 

 

160,873

 

 

 

 

 

 

 

253,643

 

 

 

 

 

Deferred tax assets

 

 

3,036,165

 

 

 

 

 

 

 

—

 

 

 

 

 

 

 

—

 

 

 

 

 

Other non-current financial

   assets

 

 

1,357,272

 

 

 

 

 

 

 

939,819

 

 

 

 

 

 

 

923,633

 

 

 

 

 

Other non-current assets

 

 

2,078,575

 

 

 

 

 

 

 

1,393,182

 

 

 

 

 

 

 

52,375

 

 

 

 

 

Total assets

 

 

 

 

 

 

111,417,616

 

 

 

 

 

 

 

52,650,551

 

 

 

 

 

 

 

43,762,787

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

59,753,549

 

 

 

 

 

 

 

16,499,905

 

 

 

 

 

 

 

4,336,561

 

Accounts payables

 

 

42,150,983

 

 

 

 

 

 

 

8,473,762

 

 

 

 

 

 

 

1,368,776

 

 

 

 

 

Deferred income

 

 

14,141,070

 

 

 

 

 

 

 

7,295,025

 

 

 

 

 

 

 

2,179,176

 

 

 

 

 

Withholdings

 

 

1,348,968

 

 

 

 

 

 

 

131,470

 

 

 

 

 

 

 

112,606

 

 

 

 

 

Accrued expenses

 

 

343,690

 

 

 

 

 

 

 

310,332

 

 

 

 

 

 

 

435,575

 

 

 

 

 

Income tax payable

 

 

1,628,368

 

 

 

 

 

 

 

168,605

 

 

 

 

 

 

 

119,795

 

 

 

 

 

Other current liabilities

 

 

140,470

 

 

 

 

 

 

 

120,711

 

 

 

 

 

 

 

120,633

 

 

 

 

 

Non-current liabilities

 

 

 

 

 

 

6,630,636

 

 

 

 

 

 

 

3,726,148

 

 

 

 

 

 

 

6,801,079

 

Long-term deferred income

 

 

6,335,827

 

 

 

 

 

 

 

3,466,708

 

 

 

 

 

 

 

6,530,813

 

 

 

 

 

Other non-current liabilities

 

 

294,809

 

 

 

 

 

 

 

259,440

 

 

 

 

 

 

 

270,266

 

 

 

 

 

Total liabilities

 

 

 

 

 

 

66,384,185

 

 

 

 

 

 

 

20,226,053

 

 

 

 

 

 

 

11,137,640

 

Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity attributable to owners of the

   Parent Company

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share capital

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common shares

 

 

3,474,450

 

 

 

 

 

 

 

3,474,450

 

 

 

 

 

 

 

3,474,450

 

 

 

 

 

Capital surplus

 

 

27,482,683

 

 

 

 

 

 

 

28,219,282

 

 

 

 

 

 

 

43,945,390

 

 

 

 

 

Other components of equity

 

 

(348,479

)

 

 

 

 

 

 

25,076

 

 

 

 

 

 

 

—

 

 

 

 

 

Retained earnings

   (Accumulated deficit)

 

 

14,424,777

 

 

 

 

 

 

 

705,690

 

 

 

 

 

 

 

(14,794,693

)

 

 

 

 

Total equity

 

 

 

 

 

 

45,033,431

 

 

 

 

 

 

 

32,424,498

 

 

 

 

 

 

 

32,625,147

 

Total liabilities and equity

 

 

 

 

 

 

111,417,616

 

 

 

 

 

 

 

52,650,551

 

 

 

 

 

 

 

43,762,787

 

 

 

 

(2)

Statements of Comprehensive Income

 

GRAVITY CO., LTD.

(In thousands of Korean Won)

 

  

 

2017

 

 

2016

 

Revenues

 

 

 

 

 

 

119,422,554

 

 

 

 

 

 

 

34,960,528

 

Online games-subscription revenue

 

 

31,533,084

 

 

 

 

 

 

 

18,905,150

 

 

 

 

 

Online games-royalties and license fees

 

 

17,069,208

 

 

 

 

 

 

 

13,163,798

 

 

 

 

 

Mobile games

 

 

70,634,135

 

 

 

 

 

 

 

2,694,767

 

 

 

 

 

Other revenue

 

 

186,127

 

 

 

 

 

 

 

196,813

 

 

 

 

 

Cost of revenues

 

 

 

 

 

 

75,972,759

 

 

 

 

 

 

 

13,662,223

 

Gross profit

 

 

 

 

 

 

43,449,795

 

 

 

 

 

 

 

21,298,305

 

Selling, general and administrative expenses

 

 

29,774,222

 

 

 

 

 

 

 

15,861,830

 

 

 

 

 

Operating Profit

 

 

 

 

 

 

13,675,573

 

 

 

 

 

 

 

5,436,475

 

Non-operating income and expenses

 

 

 

 

 

 

246,666

 

 

 

 

 

 

 

(2,442,296

)

Finance income

 

 

556,997

 

 

 

 

 

 

 

663,840

 

 

 

 

 

Finance costs

 

 

(186,723

)

 

 

 

 

 

 

(73,181

)

 

 

 

 

Other non-operating income

 

 

1,601,880

 

 

 

 

 

 

 

1,327,847

 

 

 

 

 

Other non-operating expenses

 

 

(1,725,488

)

 

 

 

 

 

 

(4,360,802

)

 

 

 

 

Profit before income tax expense

 

 

 

 

 

 

13,922,239

 

 

 

 

 

 

 

2,994,179

 

Income tax expense

 

 

 

 

 

 

939,752

 

 

 

 

 

 

 

3,219,903

 

Profit (loss) for the year

 

 

 

 

 

 

12,982,487

 

 

 

 

 

 

 

(225,724

)

Other comprehensive income

 

 

 

 

 

 

(373,554

)

 

 

 

 

 

 

25,076

 

Items that may be subsequently reclassified to

   income or loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

(373,554

)

 

 

 

 

 

 

25,076

 

 

 

 

 

Total comprehensive income (loss) for the year

 

 

 

 

 

 

12,608,933

 

 

 

 

 

 

 

(200,648

)

 

 

(3)

Statements of Appropriation of Retained earnings

 

GRAVITY CO., LTD.

(In thousands of Korean Won)

 

  

 

2017

 

 

2016

 

 

 

Confirmed disposition date:

March 30, 2018

 

 

Confirmed appropriation date:

March 30, 2017

 

Retained earnings before appropriation

 

 

 

 

 

 

14,424,777

 

 

 

 

 

 

 

705,691

 

Unappropriated retained earnings carried over

   from prior year(*1)

 

 

1,442,290

 

 

 

 

 

 

 

931,415

 

 

 

 

 

Profit (loss) for the year

 

 

12,982,487

 

 

 

 

 

 

 

(225,724

)

 

 

 

 

Appropriation of retained earnings

 

 

 

 

 

 

-

 

 

 

 

 

 

 

736,599

 

Disposition of accumulated deficit with share

   premium

 

 

-

 

 

 

 

 

 

 

736,599

 

 

 

 

 

Unappropriated retained earnings carried forward

 

 

 

 

 

 

14,424,777

 

 

 

 

 

 

 

1,442,290

 

 

(*1) The above comparative statement of appropriation of retained earnings for the prior year reflects the conversion effect of adopting Korean IFRS. Accordingly, the statement of appropriation of retained earnings under the previous Korean Accounting Standards for Non-Public Entities in Korea disposed at March 30, 2017 have differences with the above comparative statement.

 

(4)

Statements of Changes in Equity

 

GRAVITY CO., LTD.

(In thousands of Korean Won)

 

 

 

Share capital

 

 

Capital Surplus

 

 

Other

components

of equity

 

 

Retained

Earnings

(Accumulated

deficit)

 

 

Total

 

Balance at January 1, 2016

 

 

3,474,450

 

 

 

43,945,390

 

 

 

—

 

 

 

(14,794,693

)

 

 

32,625,147

 

Loss for the year

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(225,724

)

 

 

(225,724

)

Disposition of deficit with

   capital surplus

 

 

—

 

 

 

(15,726,108

)

 

 

—

 

 

 

15,726,108

 

 

 

—

 

Foreign currency translation

   adjustments

 

 

—

 

 

 

—

 

 

 

25,075

 

 

 

 

 

 

 

25,075

 

Balance at December 31, 2016

 

 

3,474,450

 

 

 

28,219,282

 

 

 

25,075

 

 

 

705,691

 

 

 

32,424,498

 

Balance at January 1, 2017

 

 

3,474,450

 

 

 

28,219,282

 

 

 

25,075

 

 

 

705,691

 

 

 

32,424,498

 

Profit for the year

 

 

—

 

 

 

—

 

 

 

 

 

 

 

12,982,487

 

 

 

12,982,487

 

Disposition of deficit with

   capital surplus

 

 

—

 

 

 

(736,599

)

 

 

—

 

 

 

736,599

 

 

 

—

 

Foreign currency translation

   adjustments

 

 

—

 

 

 

—

 

 

 

(373,554

)

 

 

—

 

 

 

(373,554

)

Balance at December 31, 2017

 

 

3,474,450

 

 

 

27,482,683

 

 

 

(348,479

)

 

 

14,424,777

 

 

 

45,033,431

 

 

 

(5)

Statements of Cash Flows

 

GRAVITY CO., LTD.

(In thousands of Korean Won)

 

  

 

2017

 

 

2016

 

Cash flows from operating activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Profit (loss) for the year

 

 

12,982,487

 

 

 

 

 

 

 

(225,724

)

 

 

 

 

Adjustments

 

 

2,392,360

 

 

 

 

 

 

 

6,761,382

 

 

 

 

 

Changes in operating assets and liabilities

 

 

11,274,302

 

 

 

 

 

 

 

(786,269

)

 

 

 

 

Interest received

 

 

539,635

 

 

 

 

 

 

 

484,249

 

 

 

 

 

Income tax paid

 

 

(2,437,390

)

 

 

 

 

 

 

(3,102,347

)

 

 

 

 

Net cash inflow from operating activities

 

 

 

 

 

 

24,751,394

 

 

 

 

 

 

 

3,131,291

 

Cash flows from investing activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Decrease in other non-current financial assets

 

 

7,014

 

 

 

 

 

 

 

2,247

 

 

 

 

 

Decrease in other current assets

 

 

3,333

 

 

 

 

 

 

 

5,556

 

 

 

 

 

Disposal of property and equipment

 

 

1,656

 

 

 

 

 

 

 

1,385

 

 

 

 

 

Disposal of intangible assets

 

 

13,063

 

 

 

 

 

 

 

8,511

 

 

 

 

 

Increase in short-term financial instruments, net

 

 

(1,000,000

)

 

 

 

 

 

 

(10,000,000

)

 

 

 

 

Increase in other non-current financial assets

 

 

(660,667

)

 

 

 

 

 

 

(1,170,820

)

 

 

 

 

Acquisition of property and equipment

 

 

(383,267

)

 

 

 

 

 

 

(97,966

)

 

 

 

 

Acquisition of intangible assets

 

 

(1,141,276

)

 

 

 

 

 

 

(539

)

 

 

 

 

Net cash outflows from investing activities

 

 

 

 

 

 

(3,160,144

)

 

 

 

 

 

 

(11,251,626

)

Net cash inflow (outflow) from financing

   activities

 

 

 

 

 

 

—

 

 

 

 

 

 

 

—

 

Effects of exchange rate changes on cash and cash

   equivalents

 

 

 

 

 

 

(596,309

)

 

 

 

 

 

 

(38,298

)

Net increase (decrease) in cash and cash

   equivalents

 

 

 

 

 

 

20,994,941

 

 

 

 

 

 

 

(8,158,633

)

Cash and cash equivalents at the beginning of the

   financial year

 

 

 

 

 

 

13,995,265

 

 

 

 

 

 

 

22,153,898

 

Cash and cash equivalents at the end of the year

   in the statements of financial position

 

 

 

 

 

 

34,990,206

 

 

 

 

 

 

 

13,995,265

 

 

 

(6)

Notes to Separate Financial Statements

* For the notes to the separate financial statements, please refer to the condensed English translation version of the Company’s Korean IFRS separate financial statements as of and for the years ended December 31, 2017, December 31, 2016 and January 1, 2016 and the independent auditor’s report to be submitted to the United States Securities and Exchange Commission on Form 6-K on April 5, 2018.

 

4. Consolidated Financial Statements as of and for the fiscal year ended December 31, 2017, December 31, 2016 and January 1, 2016

 

(1)

Consolidated Statements of Financial Position

 

GRAVITY CO., LTD.

(In thousands of Korean Won)

 

 

 

December 31, 2017

 

 

December 31, 2016

 

 

January 1, 2016

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

108,870,868

 

 

 

 

 

 

 

53,593,228

 

 

 

 

 

 

 

43,458,351

 

Cash and cash equivalents

 

 

39,095,216

 

 

 

 

 

 

 

16,719,672

 

 

 

 

 

 

 

24,909,007

 

 

 

 

 

Short-term financial

   instruments

 

 

22,500,000

 

 

 

 

 

 

 

22,000,000

 

 

 

 

 

 

 

11,500,000

 

 

 

 

 

Accounts receivable, net

 

 

42,167,869

 

 

 

 

 

 

 

11,819,260

 

 

 

 

 

 

 

5,289,020

 

 

 

 

 

Other receivable, net

 

 

698,059

 

 

 

 

 

 

 

709,860

 

 

 

 

 

 

 

159,999

 

 

 

 

 

Prepaid expenses

 

 

3,026,966

 

 

 

 

 

 

 

1,213,251

 

 

 

 

 

 

 

764,215

 

 

 

 

 

Other current assets

 

 

1,382,758

 

 

 

 

 

 

 

1,131,185

 

 

 

 

 

 

 

836,110

 

 

 

 

 

Non-current Assets

 

 

 

 

 

 

7,012,270

 

 

 

 

 

 

 

2,150,580

 

 

 

 

 

 

 

2,416,948

 

Property and equipment,

   net

 

 

945,943

 

 

 

 

 

 

 

478,073

 

 

 

 

 

 

 

649,898

 

 

 

 

 

Intangible assets, net

 

 

1,036,049

 

 

 

 

 

 

 

233,997

 

 

 

 

 

 

 

392,279

 

 

 

 

 

Deferred tax assets

 

 

3,036,165

 

 

 

 

 

 

 

—

 

 

 

 

 

 

 

—

 

 

 

 

 

Other non-current financial

   assets

 

 

1,394,347

 

 

 

 

 

 

 

965,235

 

 

 

 

 

 

 

954,222

 

 

 

 

 

Other non-current assets

 

 

599,766

 

 

 

 

 

 

 

473,275

 

 

 

 

 

 

 

420,549

 

 

 

 

 

Total assets

 

 

 

 

 

 

115,883,138

 

 

 

 

 

 

 

55,743,808

 

 

 

 

 

 

 

45,875,299

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

64,744,411

 

 

 

 

 

 

 

20,686,159

 

 

 

 

 

 

 

8,804,359

 

Account payables

 

 

44,409,786

 

 

 

 

 

 

 

9,723,055

 

 

 

 

 

 

 

2,535,447

 

 

 

 

 

Deferred revenue

 

 

16,100,168

 

 

 

 

 

 

 

9,688,555

 

 

 

 

 

 

 

4,996,743

 

 

 

 

 

Withholdings

 

 

1,438,723

 

 

 

 

 

 

 

199,427

 

 

 

 

 

 

 

188,112

 

 

 

 

 

Accrued expenses

 

 

1,037,440

 

 

 

 

 

 

 

865,158

 

 

 

 

 

 

 

946,593

 

 

 

 

 

Income tax payable

 

 

1,628,368

 

 

 

 

 

 

 

208,443

 

 

 

 

 

 

 

119,795

 

 

 

 

 

Other current liabilities

 

 

129,926

 

 

 

 

 

 

 

1,521

 

 

 

 

 

 

 

17,669

 

 

 

 

 

Non-current liabilities

 

 

 

 

 

 

7,140,276

 

 

 

 

 

 

 

4,410,222

 

 

 

 

 

 

 

6,933,412

 

Long-term deferred revenue

 

 

6,580,815

 

 

 

 

 

 

 

4,096,074

 

 

 

 

 

 

 

6,600,253

 

 

 

 

 

Other non-current liabilities

 

 

559,461

 

 

 

 

 

 

 

314,148

 

 

 

 

 

 

 

333,159

 

 

 

 

 

Total liabilities

 

 

 

 

 

 

71,884,687

 

 

 

 

 

 

 

25,096,381

 

 

 

 

 

 

 

15,737,771

 

Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity attributable to owners of

   the Parent Company

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share capital

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common shares

 

 

3,474,450

 

 

 

 

 

 

 

3,474,450

 

 

 

 

 

 

 

3,474,450

 

 

 

 

 

Capital surplus

 

 

27,163,600

 

 

 

 

 

 

 

27,900,199

 

 

 

 

 

 

 

43,626,307

 

 

 

 

 

Other components of equity

 

 

(39,679

)

 

 

 

 

 

 

(76,766

)

 

 

 

 

 

 

—

 

 

 

 

 

Retained earnings

   (Accumulated deficit)

 

 

13,961,805

 

 

 

 

 

 

 

(93,841

)

 

 

 

 

 

 

(16,477,139

)

 

 

 

 

Non-controlling interest

 

 

(561,725

)

 

 

 

 

 

 

(556,615

)

 

 

 

 

 

 

(486,090

)

 

 

 

 

Total equity

 

 

 

 

 

 

43,998,451

 

 

 

 

 

 

 

30,647,427

 

 

 

 

 

 

 

30,137,528

 

Total liabilities and equity

 

 

 

 

 

 

115,883,138

 

 

 

 

 

 

 

55,743,808

 

 

 

 

 

 

 

45,875,299

 

 

 

(2)

Consolidated Statements of Comprehensive Income

 

GRAVITY CO., LTD.

(In thousands of Korean Won)

 

  

 

2017

 

 

2016

 

Revenues

 

 

 

 

 

 

141,623,481

 

 

 

 

 

 

 

51,396,505

 

Online games-subscription revenue

 

 

36,428,402

 

 

 

 

 

 

 

23,064,704

 

 

 

 

 

Online games-royalties and license fees

 

 

16,244,377

 

 

 

 

 

 

 

12,867,310

 

 

 

 

 

Mobile games

 

 

82,624,332

 

 

 

 

 

 

 

12,041,427

 

 

 

 

 

Other revenue

 

 

6,326,370

 

 

 

 

 

 

 

3,423,064

 

 

 

 

 

Cost of revenues

 

 

 

 

 

 

94,234,263

 

 

 

 

 

 

 

29,587,486

 

Gross profit

 

 

 

 

 

 

47,389,218

 

 

 

 

 

 

 

21,809,019

 

Selling and administrative expenses

 

 

33,250,837

 

 

 

 

 

 

 

17,950,446

 

 

 

 

 

Operating Profit

 

 

 

 

 

 

14,138,381

 

 

 

 

 

 

 

3,858,573

 

Non-operating income and expenses

 

 

 

 

 

 

319,733

 

 

 

 

 

 

 

(32,168

)

Financial income

 

 

594,574

 

 

 

 

 

 

 

557,498

 

 

 

 

 

Financial costs

 

 

(209,969

)

 

 

 

 

 

 

(88,285

)

 

 

 

 

Other non-operating income

 

 

1,444,954

 

 

 

 

 

 

 

1,152,359

 

 

 

 

 

Other non-operating expenses

 

 

(1,509,826

)

 

 

 

 

 

 

(1,653,740

)

 

 

 

 

Profit before income tax

 

 

 

 

 

 

14,458,114

 

 

 

 

 

 

 

3,826,405

 

Income tax expense

 

 

 

 

 

 

1,144,177

 

 

 

 

 

 

 

3,239,740

 

Profit for the year

 

 

 

 

 

 

13,313,937

 

 

 

 

 

 

 

586,665

 

Profit (loss) attributable to:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Owners of the Parent Company

 

 

13,319,047

 

 

 

 

 

 

 

657,190

 

 

 

 

 

Non-controlling interests

 

 

(5,110

)

 

 

 

 

 

 

(70,525

)

 

 

 

 

Other comprehensive income (loss)

 

 

 

 

 

 

37,087

 

 

 

 

 

 

 

(76,766

)

Items that may be subsequently reclassified to

   income or loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

37,087

 

 

 

 

 

 

 

(76,766

)

 

 

 

 

Total comprehensive income for the year

 

 

 

 

 

 

13,351,024

 

 

 

 

 

 

 

509,899

 

Total comprehensive income (loss) attributable to:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Owners of the Parent Company

 

 

13,356,134

 

 

 

 

 

 

 

580,424

 

 

 

 

 

Non-controlling interests

 

 

(5,110

)

 

 

 

 

 

 

(70,525

)

 

 

 

 

Earnings per share attributable to the equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

holders of the Parent Company

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share

 

 

 

 

 

 

1,917

 

 

 

 

 

 

 

95

 

Diluted earnings per share

 

 

 

 

 

 

1,917

 

 

 

 

 

 

 

95

 

 

* Each ADS represents two shares of our common stock. Therefore, earnings per ADS is two earnings per share.

 

(3)

Consolidated Statements of Changes in Equity

 

GRAVITY CO., LTD.

(In thousands of Korean Won)

 

 

 

Share capital

 

 

Capital Surplus

 

 

Other

components

of equity

 

 

Retained

Earnings

(Accumulated

deficit)

 

 

Total

 

 

Non-

controlling

interest

 

 

Total

Equity

 

Balance at January 1, 2016

 

 

3,474,450

 

 

 

43,626,307

 

 

 

—

 

 

 

(16,477,139

)

 

 

30,623,618

 

 

 

(486,090

)

 

 

30,137,528

 

Profit(loss) for the year

 

 

—

 

 

 

—

 

 

 

—

 

 

 

657,190

 

 

 

657,190

 

 

 

(70,525

)

 

 

586,665

 

Disposition of deficit with

   capital surplus

 

 

—

 

 

 

(15,726,108

)

 

 

—

 

 

 

15,726,108

 

 

 

—

 

 

 

—

 

 

 

—

 

Foreign currency translation

   adjustments

 

 

—

 

 

 

—

 

 

 

(76,766

)

 

 

—

 

 

 

(76,766

)

 

 

—

 

 

 

(76,766

)

Balance at

   December 31, 2016

 

 

3,474,450

 

 

 

27,900,199

 

 

 

(76,766

)

 

 

(93,841

)

 

 

31,204,042

 

 

 

(556,615

)

 

 

30,647,427

 

Balance at January 1, 2017

 

 

3,474,450

 

 

 

27,900,199

 

 

 

(76,766

)

 

 

(93,841

)

 

 

31,204,042

 

 

 

(556,615

)

 

 

30,647,427

 

Profit(loss) for the year

 

 

—

 

 

 

—

 

 

 

 

 

 

 

13,319,047

 

 

 

13,319,047

 

 

 

(5,110

)

 

 

13,313,937

 

Disposition of deficit

   with capital surplus

 

 

—

 

 

 

(736,599

)

 

 

—

 

 

 

736,599

 

 

 

—

 

 

 

—

 

 

 

—

 

Foreign currency translation

   adjustments

 

 

—

 

 

 

—

 

 

 

37,087

 

 

 

—

 

 

 

37,087

 

 

 

—

 

 

 

37,087

 

Balance at

   December 31, 2017

 

 

3,474,450

 

 

 

27,163,600

 

 

 

(39,679

)

 

 

13,961,805

 

 

 

44,560,176

 

 

 

(561,725

)

 

 

43,998,451

 

 

 

(4)

Consolidated Statements of Cash Flows

 

GRAVITY CO., LTD.

(In thousands of Korean Won)

 

  

 

2017

 

 

2016

 

Cash flows from operating activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Profit for the year

 

 

13,313,937

 

 

 

 

 

 

 

586,665

 

 

 

 

 

Adjustments

 

 

1,997,679

 

 

 

 

 

 

 

3,714,446

 

 

 

 

 

Changes in operating assets and liabilities

 

 

12,877,744

 

 

 

 

 

 

 

911,124

 

 

 

 

 

Interest received

 

 

554,362

 

 

 

 

 

 

 

468,382

 

 

 

 

 

Income tax paid

 

 

(2,607,286

)

 

 

 

 

 

 

(3,187,224

)

 

 

 

 

Net cash inflow from operating activities

 

 

 

 

 

 

26,136,436

 

 

 

 

 

 

 

2,493,393

 

Cash flows from investing activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Decrease in other non-current financial assets

 

 

7,014

 

 

 

 

 

 

 

2,246

 

 

 

 

 

Decrease in other current assets

 

 

3,333

 

 

 

 

 

 

 

5,556

 

 

 

 

 

Disposal of property and equipment

 

 

1,656

 

 

 

 

 

 

 

3,373

 

 

 

 

 

Increase in short-term financial instruments, net

 

 

(500,000

)

 

 

 

 

 

 

(10,500,000

)

 

 

 

 

Increase in other non-current financial assets

 

 

(430,117

)

 

 

 

 

 

 

(10,000

)

 

 

 

 

Acquisition of property and equipment

 

 

(899,011

)

 

 

 

 

 

 

(153,897

)

 

 

 

 

Acquisition of intangible assets

 

 

(1,165,069

)

 

 

 

 

 

 

(13,864

)

 

 

 

 

Net cash outflows from investing activities

 

 

 

 

 

 

(2,982,194

)

 

 

 

 

 

 

(10,666,586

)

Net cash inflow (outflow) from financing activities

 

 

 

 

 

 

—

 

 

 

 

 

 

 

—

 

Effects of exchange rate changes on cash and cash

   equivalents

 

 

 

 

 

 

(778,698

)

 

 

 

 

 

 

(16,142

)

Net increase (decrease) in cash and cash equivalents

 

 

 

 

 

 

22,375,544

 

 

 

 

 

 

 

(8,189,335

)

Cash and cash equivalents at beginning of the year

 

 

 

 

 

 

16,719,672

 

 

 

 

 

 

 

24,909,007

 

Cash and cash equivalents at end of the year in the

   statements of financial position

 

 

 

 

 

 

39,095,216

 

 

 

 

 

 

 

16,719,672

 

 

 

(6)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 Korean IFRS consolidated financial statements as of and for the years ended December 31, 2017, December 31, 2016 and January 1, 2016 and the independent auditor’s report to be submitted to the United States Securities and Exchange Commission on Form 6-K on April 5, 2018.