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Yuhan Annual Report 2017-2018 Valuable Assets Yuhan’S Stories Progress & Integrity

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Yuhan Annual Report 2017-2018 Valuable Assets Yuhan’S Stories Progress & Integrity PROGRESS & INTEGRITY YUHAN ANNUAL REPORT 2017-2018 VALUABLE ASSETS YUHAN’S STORIES PROGRESS & INTEGRITY Yuhan Corporation has five invaluable assets that have remained in place since its foundation: the founder, Dr. Ilhan New, who was a pioneer in social contribution; an established system of re- 01 02 turning corporate profit to society in line with the founding phi- losophy; an advanced corporate governance system that allows Dr. Ilhan New: Virtuous Circle of for accountable management independent from the owners; an A Businessman Ahead of His Time Corporate Profits open corporate culture that ensures fair opportunities for all to reach top management; and a company where every single mem- In recognition of practices and achievements over the A company’s pursuit of profits should drive the development ber—from top to bottom—shares a sense of ownership. These course of his lifetime, Dr. Ilhan New continues to be greatly of society and contribute to its prosperity, not individual respected by everyone at Yuhan Corporation. A business- wealth and prosperity. This was the maxim of Dr. Ilhan New five things not only differentiate Yuhan Corporation from all oth- man ahead of his time in his commitment to society, he not during his lifetime and the founding philosophy of Yuhan er Korean companies, but constitute our competitiveness, which only gave back everything he owned to society, but also set Corporation in 1926. It is also what he devoted his life to an admirable example for all Koreans as an innovative entre- translating into action. Upon his death, he bequeathed his has seen us rise to where we stand today. preneur, social worker, independent activist, and educator. entire wealth to social initiatives and established a system of contributing to society through corporate activities. This unprecedented means of returning profits, along with his sense of altruism, is still Yuhan’s most invaluable asset. 03 04 05 The circular logo of our two core value words—progress and integrity—surround the company’s sym- bol, a green willow tree, and epitomize the founding philosophy of Dr. Ilhan New (1895-1971). Sound Corporate Your Dreams Employee and Management Over the course of the past 92 years, the notions of progress and integrity have always remained at the Governance Come True Here Bound Together by Ownership heart of all our business activities, which put fidelity and honesty before everything else. Determined to put into practice our principled management in a transparent manner, we have continuously bet- tered ourselves through an enterprising spirit and constant innovation drives. Yuhan’s largest shareholders consist of a non-profit foun- Although most business workers dream of one day becom- Yuhan Corporation has remained free of labor disputes dation and organization (the Yuhan Foundation and Yuhan ing a CEO, everybody knows that few people ever achieve since its foundation in 1926. Guided by Dr. New’s notion Our pioneering spirit to venture down new paths more passionately than anyone else has given us the School) as well as foreign investors. The company’s own- this goal. However, this is made possible at Yuhan. Ever that “All members of a company are part of a greater com- ability to become Korea’s top pharmaceutical company. This has propelled us to become one of the ership structure resembles more a non-profit organization since 1969, when Dr. New appointed someone who had no munity that is bound together by a common goal,” every- most admired companies in the country. than a private company. Under the belief that a company blood relations to him as his successor—president and CEO one at Yuhan Corporation is part owner of the company. belongs to the society it serves, with its leaders serving as of the company—Yuhan has carried on this meritocracy of While Yuhan, unlike any other Korean company, has no Today, on the cusp of our 100th anniversary, we are busy creating innovative value and overcoming mere stewards entrusted with its care, Dr. New appointed CEO promotion from within for decades. In fact, for almost labor relations issues to deal with, it is bound together by challenges on our way to unveiling a better future based on our core values and under the slogan top executives through open recruitments. This tradition is 50 years every CEO at Yuhan Corporation has been hired strong ownership. “Great Yuhan, Global Yuhan.” Through the development of innovative drugs and new businesses that still in place today and represents Yuhan’s unique system internally from among those who started their careers as will generate even greater value, our goal is to grow beyond being merely a respected company as we that enables independent and responsible management. entry-level employees and subsequently built a career within transform ourselves into a truly great company that contributes to the health of people around the the company. world by fulfilling our social responsibilities and giving back to society. 2 YUHAN ANNUAL REPORT 2017-2018 — Message From The CEO YUHAN ANNUAL REPORT 2017-2018 CONTENTS C2 Yuhan’s Stories PROGRESS & INTEGRITY 02 Message from the CEO Progress & Integrity 06 Securing Sustainable Growth through Improving Profitability 12 Developing New Value by Strengthening R&D 18 Creating New Business Opportunities for Further Growth 26 Corporate Overview 28 2017 Financial Highlights 30 2017 News Highlights 32 Board of Directors 34 Corporate Governance 36 Ethical Management STRATEGIC PROGRESS Our Business Performance 40 Pharmaceuticals Business 44 Overseas Business 48 Healthcare & Consumer Products Business 52 Research & Development 58 Production 62 Yuhan Product Portfolio SINCERE INTEGRITY Our Responsibilities 68 Yuhan’s CSR System 69 Corporate Social Responsibility 71 Volunteerism 72 Human Resources Development 74 Health, Safety & Environment PROGRESS & INTEGRITY Financial Statement The circular logo of our two core value words—progress and integrity—surround the company’s sym- 77 Independent Auditors’ Report bol, a green willow tree, and epitomize the founding philosophy of Dr. Ilhan New (1895-1971). 78 Consolidated Statements of Financial Positions Over the course of the past 92 years, the notions of progress and integrity have always remained at the 80 Consolidated Statements of Comprehensive Income heart of all our business activities, which put fidelity and honesty before everything else. Determined 81 Consolidated Statements of Changes in Equity to put into practice our principled management in a transparent manner, we have continuously bet- 82 Consolidated Statements of Cash Flows tered ourselves through an enterprising spirit and constant innovation drives. 85 Independent Auditors’ Report 86 Separate Statements of Financial Positions Our pioneering spirit to venture down new paths more passionately than anyone else has given us the 88 Separate Statements of Comprehensive Income ability to become Korea’s top pharmaceutical company. This has propelled us to become one of the 89 Separate Statements of Changes in Equity most admired companies in the country. 90 Separate Statements of Cash Flows 93 Statements of Earned Surplus Today, on the cusp of our 100th anniversary, we are busy creating innovative value and overcoming challenges on our way to unveiling a better future based on our core values and under the slogan 94 Best Brands “Great Yuhan, Global Yuhan.” Through the development of innovative drugs and new businesses that 96 Affiliates will generate even greater value, our goal is to grow beyond being merely a respected company as we 98 History transform ourselves into a truly great company that contributes to the health of people around the world by fulfilling our social responsibilities and giving back to society. PROGRESS & INTEGRITY & PROGRESS NEW CHALLENGE & NEW VALUE CREATION VALUE NEW & CHALLENGE NEW THROUGH THROUGH PROGRESS & INTEGRITY INTEGRITY & PROGRESS - sym company’s the integrity—surround and words—progress value core two our of logo circular The bol, a green willow tree, and epitomize the founding philosophy of Dr. Ilhan New (1895-1971). New Ilhan Dr. of philosophy founding the epitomize and tree, willow green a bol, Over the course of the past 92 years, the notions of progress and integrity have always remained at the the at remained always have integrity and progress of notions the years, 92 past the of course the Over heart of all our business activities, which put fidelity and honesty before everything else. Determined Determined else. everything before honesty and fidelity put which activities, business our all of heart - bet continuously have we manner, transparent a in management principled our practice into put to tered ourselves through an enterprising spirit and constant innovation drives. drives. innovation constant and spirit enterprising an through ourselves tered Our pioneering spirit to venture down new paths more passionately than anyone else has given us the the us given has else anyone than passionately more paths new down venture to spirit pioneering Our ability to become Korea’s top pharmaceutical company. This has propelled us to become one of the the of one become to us propelled has This company. pharmaceutical top Korea’s become to ability most admired companies in the country. the in companies admired most Today, on the cusp of our 100th anniversary, we are busy creating innovative value and overcoming overcoming and value innovative creating busy are we anniversary, 100th our of cusp the on Today, challenges on our way to unveiling a better future based on
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