42 period annual report
TRANSCRIPT
ANNUAL REPORT 2018
42nd period Annual report
Ranked No. 1 in Anti-crime andSecurity Service category of the K-BPIfor 14 consecutive years (2006~2019)
Ranked No. 1 in Building Maintenancecategory of the Korea Service Grand Prixfor 3 consecutive years (2016~2018)
S-1 Bldg., Sejongdaero 7-gil, Jung-gu, Seoul
http://www.s1.co.krTel:1588-3112
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Letter from the CEO
History
Resolution of the Board of Directors
Annual report
Separate financial statements
Consolidated financial statements
Audit report
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Business overview Company overview Business performance Information on the parent company, subsidiaries, mergers, etc. Business performance and financial status of the past 3 years Tasks of the companyDirectors and auditorsMajor shareholders Investments in other companies made by the company, the company and subsidiaries or the company’s subsidiaries Major creditors, etc. Important facts after settlement of accounts Other important information regarding business
Statement of financial positionIncome statementStatement of changes in equityStatement of cash flow Statements of appropriation of retained earningsNotes to financial statements
Consolidated statement of financial position Consolidated income statement Consolidated statement of changes in equityConsolidated statement of cash flowNotes to consolidated financial statements
Auditor’s reportIndependent auditor report on financial statementsIndependent auditor report on consolidated financial statements
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CEO and internal accounting manager’s report on operating status 47
Contents
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March 31, 2019
Yook Hyun-pyo, CEO of S-1
Product Sales Division has also developed state-of-the-art solutions, such as SVMS and CLES, and extended its service areas to
include smart cities as well as key national infrastructure. S-1 also reinforced its global business with a focus on key overseas bases
in Southeast Asia and the Middle East.
For 2019, we promise to live up to the expectations of shareholders by continuing to challenge ourselves. Many difficulties
in the management environment, such as the domestic economic recession and changes in the employment landscape, are
expected this year as well. But S-1 will overcome these difficulties and lead the industry through thorough preparations and bold
challenges.
For starters, we will lay the foundation for next-generation businesses.
In the age of the 4th Industrial Revolution, we will be able to stay competitive only when we build an independent platform. We
will work with various partners in IT services and retail to build a platform with a focus on S-1 while expanding our security
ecosystem. Last year we launched in-house ventures, which translate the ideas of employees into viable businesses, and operated
task force teams to seek out new businesses and opportunities. This year we will secure future growth engines.
We will continue, as always, to develop new services for customers and enhance quality.
Customer needs are becoming ever more fragmented and increasingly specific. To address this, we will expand our product
lineups to satisfy their various needs, and introduce S-1’s own new services that combine the strengths of various businesses,
such as security and building management. The quality of customer service depends on the attitude and competency of
employees. S-1 established the Blue Asset Technology Education Center, the Cleaning Management Institute and the Bike School
in a bid to enhance the competency of its employees. We will also actively invest in employee education to enhance service
expertise and provide high-quality services this year as well.
Lastly, we will work hard to enhance the value proposition for our shareholders.
Only solid business performance can enhance value for our shareholders. We will continue to ensure that S-1 will grow
continuously by improving business processes and thoroughly preventing undue risks. We will also continuously develop the
organizational culture to encourage sharing and accomplishing common goals. All employees will strive, as always, to produce
the best results as one team.
Dear shareholders!
S-1 will not settle for the status quo. We will never stop challenging ourselves. We will maintain our status as a leading company
by quickly responding to the rapidly changing environment. Your continued support will be greatly appreciated.
Thank you.
Letter from the CEO
Dear shareholders,
I wish the best of health and good fortune for all of you and your family.
Last year, as the 4th industrial revolution began in earnest, rapid changes have been taking place across many industries one by
one, so technology convergence is becoming a reality. There have been many changes in the security industry, and as a result,
competition became tougher. The situation was tough, but S-1 wrote a new history which lead to sales exceeding KRW2 trillion for
the first time since its founding. We accomplished such success through repeated challenges and innovation. Credit goes to the
support of our shareholders and the efforts of all employees. I am truly grateful to all of you.
Over the years S-1 has led changes, and devoted all its energy to securing growth engines in preparation for the future.
Alarm Security Division entered into strategic alliance with common carriers, and launched bundled products to reinforce product
competitiveness, and enhance quality and management efficiency by using big data to improve the patrol process. Building
Management Division extended its services to include large integrated resorts, logistics centers and large multi-purpose buildings,
and thus won more contracts. In addition, the company found strategic businesses that increase the value of real estate, such as
smart parking and electric vehicle charging.
The situation was difficult, but S-1 wrote a new history through endless challenges andinnovation such that our sales exceeded KRW2 trillion for the first time ever in its history.
This was a result of the support of shareholders and efforts of all employees.
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History of the Company
2014. 042014. 08
2015. 022015. 082015. 112015. 122016. 01
2016. 03
2016. 03
2016. 11
2017. 032017. 032017. 05
2017. 10
2017. 112017. 112018. 02
2018. 03
2018. 03
2018. 032018. 05
2018. 062018. 07
2018. 07
2018. 092018. 10
2018. 102018. 12
EverlandLaunched ‘S-1 UVIS-T’, a freight transportation management system serviceLaunched ‘S-1 UVIS-R/F’, a rental car and corporate vehicle operation management systemLaunched ‘Ahnsim Phone LTE’, a mobile personal security serviceLaunched ‘Blue Asset’, the premium total real estate service brandS-1 SVMS acquired highest-level CPNI certification from UK governmentCompleted GOP scientific surveillance system in the mid-western regionOpened ‘S-1 Detection Dog Center’, a social contribution activity for cultural heritage conservationThe 3D & 2D intelligent video analysis solution won the ‘IR52 Jang Young-shil Award’Completed construction of the ‘Blue Asset Technology Education Center’, a total building management training centerReceived the ‘Minister of Trade, Industry and Energy Award’ at Korea Technology Awards 2016Launched ‘SECOM izi’, a self-security productEstablished Vietnamese subsidiaryCompleted construction of the ‘S-1 Bike School’, an education center for motorcyclesReceived Prime Minister’s award at the National Sharing Grand Awards in the corporate social contribution categoryLaunched ‘S-1 PS Anti-ransomware’, a ransomware response service40th anniversaryS-1 intelligent video analysis algorithm acquired Korea Internet & Security Agency intelligent CCTV performance certificationRanked No. 1 in the Anti-crime and security service category of the K-BPI for 13 consecutive yearsRanked No. 1 in Korea Brand Star in the security category for two consecu-tive yearsReceived ‘Best HRD Award of the Year’Acquired Korea Internet & Security Agency personal information manage-ment system (PIMS) certificationHeld ‘5th All-Ring Ahnsim Campaign’ to support crime victimsRanked No. 1 in the Korean Standard-Service Quality Index (KS-SQI) un-manned security category for 6 consecutive yearsReceived ‘Korea Service Grand Prix’ in the building menagement service for 3 consecutive yearsHeld ‘6th S-1 security solution Fair’, a state-of-the-art security exhibitionRanked No. 1 in the KCSI unmanned security category for 4 consecutive yearsLaunched a facial recognition readerLaunched in-house venture Apolo
2010. 032010. 03
2010. 05
2010. 102010. 12
2011. 052011. 05
2011. 092012. 012012. 012012. 032012. 062012. 112012. 112013. 032013. 032013. 042013. 06
2013. 092013. 11
2014. 01
Launched an AED (Automated External Defibrillator)Entered into an MOU with the Korea Association of Cardiopulmonary ResuscitationEstablished Ahnsim Nuri Volunteer Corps, a volunteer corps for cardiopul-monary resuscitation educationLaunched S1 NS, a network security service Received a ‘Good Design Award’ from the Ministry of Knowledge Economy (for the SECOM card reader and Huen home network system)Declared compliance managementReceived the ‘2011 Transparent Management Award’ from the Korean Accounting AssociationEstablished a Chinese subsidiaryLaunched S1 PS, a PC security solution Launched SECOM Homz, a security system exclusively for apartmentsLaunched ‘enfra’, an energy efficiency improvement business brand Completed construction of a state-of-the-art security training centerLaunched UVIS, a vehicle operation management systemOpened the “S1 One Step Study Room” for low-income youthLaunched the indoor 3D UWB detectorChanged company name from S1 to S-1Launched ‘Facecheck S’, a face recognition monitoring solution Launched SECOM Home Blackbox, a smart home security system exclu-sively for apartmentsLaunched ‘Ahnsim Phone Service,’ a mobile personal security serviceAcquired Korea Internet & Security Agency certification for facial recogni-tion algorithmCompleted transfer of the building management business from Samsung
1990. 051993. 051995. 121996. 011996. 031996. 101997. 041997. 061997. 08
1997. 09
1998. 051998. 111999. 01
1999. 101999. 11
Developed a security system for self-service banksEstablished a Technical Research CenterDeveloped a security system for self-service banksListed on the Korea Stock ExchangeChanged company name to S1Developed a residential security systemCompleted a state-of-the-art automated logistics centerHeld an international security forumReceived a contract for establishment of an unmanned alarm system at an ROK airbaseSamsung 3119 Rescue Team designated as the first civilian emergency rescue agency in the countyReached 100,000 contractors, first in the countryOpened the Cheon-an Specialty Security Training FacilityFounded the S1 Taekwondo team and established S-Tech Corporation, a spin-off from S1Acquired Y2K certificationLaunched the Building Master System (BMS)
2000. 02
2000. 05
2000. 07
2000. 092000. 102000. 112002. 072002. 082002. 10
2003. 02
2003. 092003. 09
2003. 11
2003. 12
2004. 02
2004. 032005. 042005. 042005. 062005. 08
2006. 05
2006. 08
2006. 112007. 012007. 05
2007. 11
Signed a partnership agreement with DACOM for high-speed Internet security businessSelected by the Korea Stock Exchange as an “excellent public disclosure corporation” for the year 1999Entered into partnership in the Raemian Ahnsim Apartment Business with Samsung C&T and Samsung Fire & Marine InsuranceLaunched ePass Combi, an intelligent access control systemEntered into partnership in the smart card business with OTI (Israel)Entered into partnership in the smart card business with Samsung CardLaunched Secom Smart FS (Full Security), a new digital productDeveloped world’s first Chip Operating System (COS) for smart cardsImplemented the integrated security system and new employee ID card system for Samsung ElectronicsSelected by the Korea Financial Telecommunications & Clearing Institute as the software developer for the Korean electronic monetary system known as “K Cash”Launched SBMS, a smart building management system Won the first contract for the digital campus system of Chungbuk National UniversityEntered into an agreement with Ajou University for implementation of the multi-functional card systemEntered into an agreement with KT Consortium for a digital home pilot projectEntered into partnership in the wireless security system business with VISONIC (Israel) Acquired Smart card EMV certification from VISAWon the contract for the Busan New Port security systemWon the contract for the electronic voting system pilot projectReceived the Visa Smart Star Award from VISAWon the contract for the biometric access control system of the Incheon International AirportWon the contract for the RFID customs clearance and logistics system of the Ministry of National UnificationEntered into the youth protection agreement with the Government Youth CommissionLaunched a video control systemWon the contract for the RFID integrated security system of HHIC-PhilWon the contract for the pilot project for implementation of the U-Child Protection Area safety system30th anniversary
1977. 111977. 12
Established as Korea Security Co. Ltd.Acquired security service license (Minister of the Interior No. 1)
1970’s
1990’s
2000’s
2010’s
1980’s
1981. 011981. 031986. 091989. 11
Changed company name to Korea Safety System Inc.Launched a security monitoring system service business, first in the countryBuilt a national network by implementing online control systemsJoined the International Surveillance Association as the representative of Korea
2008. 042008. 11
2008. 11
2009. 032009. 042009. 06
2009. 082009. 11
Completed the Marine Safety Management SystemCompleted the Integrated Security System for the Defense Security Com-mandCompleted the security system for the Samsung office building in Seocho-dongEstablished a technology research center in RussiaLaunched SECOM V, an intelligent video control system Launched SECOM Master, an integrated management system for mi-to-large buildingsDeclared green managementDeclared Vision 2020
1980’s1970’s 1990’s 2000’s 2010’s
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Business overview
Company overview
Business performance
Information on the parent company, subsidiaries, mergers, etc.
Business performance and financial status of the past 3 years
Tasks of the company
Directors and auditors
Major shareholders
Investments in other companies made by the company, the company and subsidiaries or the company’s subsidiaries
Major creditors, etc.
Important facts after settlement of accounts
Other important information regarding business
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Annual report
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S-1 provides safety for public facilities, complex shopping malls, plants and high-rise buildings both at home and abroad.
S-1 uses its round-the-clock remote control know-how and experts tothoroughly protect the valuableinformation and technologies of customers.
Product Sales
Information Security
S-1 is capitalizing on its 40-years of experience in leading the domestic security industry
to build and provide integrated security systems for key facilities of the nation, such as
public institutions, industrial facilities, power plants and high-rise buildings.
The company has further enhanced the convenience and security of its face recognition
access control system, which was introduced at the G20 Seoul Summit and the
Nuclear Security Summit, and provides safety for major enterprises and public institu-
tions. Launch of S-1 CLES, a next-generation enterprise security solution, is planned for
the first half of 2019.
S-1 looks after public safety as well. For example, the team has developed an automatic
tunnel accident detection system that detects accidents in tunnels in real-time to enable
quick responses, installed a GOP scientific surveillance system deployed in the mid-west
region, and provides integrated security service for SOC (social overhead capital).
S-1 is also engaged in security consulting and services in global markets. So far S-1 has
established 10 overseas branches and subsidiaries in China, Hungary, Malaysia, including
the Vietnamese subsidiary that was established in 2017.
S-1 protects intangible assets like information and technologies as well as tangible
assets. The company provides total information security service through round-the-clock
remote control services and systematic maintenance.
‘S-1 VP’ is a virus vaccine for detecting and curing viruses and malicious codes in PCs.
‘S-1 PS’ searches for and encrypts personal information files in a PC, and prevents
information leakage. It also improves work efficiency by managing hardware and software
onsite. In 2017, S-1 launched the ‘S-1 PS Anti-ransomware,’ and provides ransomware
response services as well.
S-1’s information security service provides scheduled maintenance as a rental solution,
and can protect the valuable information and IT assets of customers at a reasonable cost.
S-1 provides a high level of safety and security through its convergence security service
that protects both the tangible and intangible assets of customers.
S-1 maximizes the values of customers’ assets with differentiated solutionsas well as safe and pleasant spacemanagement.
Building Management
S-1’s alarm security system service integrates state-of-the-art security devices with
control centers and patrol officers through wired and wireless communication networks.
It uses the national patrol infrastructures and best security personnel to prevent crimes
and accidents and guarantees the highest level of safety by providing fast and correct
on-the-ground responses in an emergency.
In consideration of different consumer needs, such as homes, public institutions, and
commercial facilities, etc, S-1 offers a variety of products to provide the best security and
living conveniences.
In October 2018, S-1 developed differentiated systems such as facial recognition reader
that improved security and convenience and to keep up with changes in the environment
and customer needs.S-1 is ardently endeavoring to provide the best security services by
training of excellent security experts.
In 2015, S-1 launched the premium total building menagement service brand ‘S-1 Blue
Asset’. ‘S-1 Blue Asset’ provides total management service throughout the lifecycle of
a building from initial planning, contracting, construction sale and ultimate demolition.
PM (Property Management) and FM (Facility Management) experts provide lease, sale
and investment consulting as well as energy diagnostics and technical consulting and
thus enhance the operational efficiency and value of the building. The service also
provides the infrastructure required for efficient energy management of the building to
enable smooth and optimized operation.
Due to the excellence of the service, ‘S-1 Blue Asset’ won the Korea Service Grand Prix in
the building management category for three consecutive years (2016, 2017, 2018).
More recently, it has been expanding its business to include housing rental, high-rise
buildings and hotels to create new growth potentials.
1. Business overview
Alarm Security
S-1 provides safety and security for customers with the best manpower, national network, differentiated systems and products.
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S-1 will practice love and sharing, and growth with neighbors and the society.
S-1 guarantees security services that will delight customers by developing the very best security experts.
Social Contributions
Educational Facilities
The S-1 Social Volunteer Corps has been engaged in the ‘Ahnsim Nuri Project’ (support
for Ahnsim villages and cardiopulmonary resuscitation education) targeting schools and
various organizations to help create a safe society in which crimes are prevented and lives
can be saved when afflicted with a health-threatening emergency.
The ‘Termite Detection Dog Project’ for protecting wooden cultural properties, the ‘Hope
Scholarship Project’ for helping youths living in correctional institutions and shelters to
grow into wholesome citizens, and the ‘All-Ring Ahnsim Project’ providing support for
crime victims are all representative social contribution activities of S-1.
The ‘All-Ring Ahnsim Campaign,’ which raises funds for donation through walkathons,
is in its 5th year in 2018. It has become a social contribution event in which employees,
their families and citizens are participating.
In addition, the 3119 Rescue Team, the first civilian emergency rescue organization in
Korea, has conducted rescue activities at numerous accident scenes with state-of-the-
art equipment and a high level of skills. Ordinarily the team focuses on providing safety
education and training for citizens, such as disaster management, first aid and what we
should do when in an emergency.
S-1 is making efforts to raise state-of-the-art security experts. In 1998, the company
established Korea’s first security education institute, the S-1 Training Center, and has
since been training experts who have an upright character, a service-minded attitude,
and fundamental knowledge of relevant technologies. The special programs of the S-1
Training Center include the core value of education, hierarchical leadership education,
the job experts education, global competency education and the challenge education,
which is an Outdoor Training program.
The ‘Total State-of-the-art Security Training Center’, for hands-on training in an environment
the same as the field, the ‘Blue Asset Technology Education Center,’ and the ‘S-1 Bike
School,’ a training center exclusively for motorcycles (opened May 2017) make it possible
to provide customers with the best services.
S-1 is developing state-of-the-art security and technology experts and reinforcing
competitiveness by continuously improving its educational facilities and programs.
S-1 protects not only valuable assets, but also the safety and health ofcustomers.
S-1 is making new standards forstate-of-the-art security solutions by developing innovative technologies.
Personal/Vehicle Security
R&D
‘S-1 Ahnsim Mobile’ is a personal security service that uses SKT and KT MVNO networks
which provide excellent call quality. The service combines S-1’s renowned security
service with smartphones to provide differentiated security services. In case a user is in
an emergency situation, a designated guardian will be notified through the emergency
notification service, and if the customer so requests, S-1 patrol officers will be dispatched.
The guardian can use a dedicated application to see the location of the user, and use
functions like the safety alarm and smartphone power OFF alarm. Also provided are
differentiated services such as a health counseling service for the elderly, and a harmful
content blocking service for juniors/teenagers.
‘S-1 UVIS’ is a vehicle operation management service that combines state-of-the-art
technology and control know-how. A 3G terminal using MVNO communication
networks is installed in the vehicle so that it is possible to check vehicle location,
status and operation information in real time on the website and via smartphone
app. As operational data analysis can be used to improve vehicle operational
efficiency, customers’ operating costs can be reduced.
The Convergence Security Research Center is at the center of S-1’s technology.
Established in 1993, the Convergence Security Research Center employs about 200
researchers who are leading the security market by developing sensor and video
technologies on their own, and launching various products based them.
In particular, ‘S-1 SVMS,’ the intelligent video analysis solution, developed by S-1,
acquired the highest-level certification from the Center for the Protection of National
Infrastructure (CPNI) of the UK government. The system also received the Jang Young
Shil award, the most prestigious technology award in Korea, and the Korea Technology
Award. This its performance was recognized both at home and abroad.
S-1 has also established a ‘Customer Support Office’ in 2017, and has been making efforts
to reinforce onsite support and expertise by organically collaborating with the Convergence
Security Research Center.
S-1 is accelerating its efforts to improve R&D and technology to introduce competitive
solutions and products in global markets.
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4) Information of shares
5) Matters concerning corporate bonds
① Types and total number of issued shares
③ Stock-related matters
② Changes in capital stock There has been no change in capital stock in the past 5 years
“N/A”
Types of shares Number of shares Amount Component ratio Remarks
Common shares 37,999,178 18,999,589 100% -
Closing date December 31
Stock book closing period From January 1 to January 31 Record date December 31
Notification method Website (http://www.s1.co.kr) / Joongang Ilbo
Types of share certificates 1, 5, 10, 50, 100, 500, 1,000, 10,000 shares per certificate (8 types)
Transfer agent
Name of the agent KEB Hana Bank Security Agency Department
Address 72, Gukjegeumyung-ro, Yeongdeungpo-gu, Seoul
(Unit: share, KRW1,000)
2. Company overview
1) Objectives
3) Employees
• Telecommunications business• Security services pursuant to the Security Services Business Act
concerning facility security services, mechanical equipment security services, escort security services and personal protection services
• Development of programs for wired and wireless information and communication businesses, such as the Internet and satellites, manufacture and sale of communication devices, and related service businesses like e-commerce
• Investigation, guidance and counseling with regard to safety management• Transportation, management and arrangement of cash and
valuables• Security services using protection dogs and raising and training of
protection dogs• General electrical work, telecommunications business and general
subsidiary construction work• Export and import of devices and safety management• Development, manufacturing and sale of medical devices and
related services• Manufacturing and sale of water purifiers• Design, supervision, construction and inspection of fire protection
systems• Real estate, equipment and interior construction businesses, and
other related services• Stolen vehicle tracking and recovery systems • Education business• Development, manufacturing, sale, monitoring and certification of
products related to information protection• Recruiting of card merchants and members, and development,
manufacturing, sale, monitoring and certification of related devices and related services
• Environment-friendly, public hygiene, animal disease control, and related services
• Location information business, location-based services, development of programs for location-based services, and manufacturing and sale of related devices
• Manufacturing, sale and maintenance of crime-prevention, disaster-prevention, and safety devices and systems
• Development and sale of software• Manufacturing and sale of foods and pharmaceuticals, and related
services• Health and fitness coaching, management, sale of goods, visiting
care and related services• Operation of welfare facilities for senior citizens and related services• Sale of tombs and funeral services• Energy diagnostics for improving the efficiency of energy use,
investment in facilities, and manufacturing, sale, installation, construction, R&D and management of machines and materials, and related services
• Sale and rental of medical devices for animals and quasi drugs, and related services
• Verification business related to greenhouse gas and energy management by objective
• Renewable energy business (development and generation of renewable energy, and manufacturing, assembly, installation and sale of equipment/cultivation, storing, processing and distribution of raw materials, and other related businesses)
• Management, leasing, supply and brokerage of real estate, facility maintenance services, housing management services, and other related services
• All businesses incidental to the above mentioned
Classification Engineers Salespeople Office workers Other Total
persons 4,723 1,315 273 323 6,634
(as of December 31, 2018, unit: persons)
2) Sales offices in the country
Classification Gyeonggi Gangnam Gyeongin GangbukGyeong-
bukChung-cheong
Buul (Busan-Ulsan)
HonamGyeong-
namGangwon Total
business team 1 1 1 1 1 1 1 1 1 1 10
branch 13 10 11 10 11 10 9 10 8 7 99
total 14 11 12 11 12 11 10 11 9 8 109
(as of December 31, 2018, unit: Location)
※ System service bases
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4. Information on the parent company, subsidiaries, mergers, etc.
2) Subsidiaries
3) Concurrent offices of executives in subsidiaries
(As of December 31, 2018, unit: KRW1,000, share, %)
Subsidiaries Relationship
Company name LocationCapital stock
Businesscategory
Number of shares
owned
Owner-ship
Relation-ship
Human TSS, Inc.Daebo Bldg., 141, Gwongwang-ro, Gwonseon-gu,
Suwon, Gyeonggi-do (Gwonseon-dong)1,000,000
Security system service
200,000 100.00Service
transaction
S-1 CRM CorporationS-1 Bldg., 522, Gyeongsudaero, Paldal-gu,
Suwon, Gyeonggi-do700,000
Call center and telemarketing
140,000 100.00Service
transaction
Samsung BeijingSecurity Systems
18F china merchants tower, NO.118, jianguolu, chaoyang district, Beijing, China
1,181,000Security system
service
Capital stock
unissued100.00
Commodity trade
SOCM LLC#604 6th floor, 4th khoroo, UB platinum,Bayangol district, Ulaanbaatar, Mongolia
96,000Security system
service
Capital stock
unissued100.00 -
S-1 CORPORATION VIETNAM CO., LTD
2nd floor, Halla Office Building, Yen PhongIndustrial Park, Yen Trung Commune,
Yen Phong District, Bac Ninh province, VietNam1,131,000
Security system service
Capital stock
unissued100.00
Commodity trade
S-1 CORPORATION HUNGARY LLC
1036 Budapest, Lajos utca 74-76. 4. em
31,840Security system
service
Capital stock
unissued100.00
Commodity trade
SVIC No. 35 new technology business
investment partnership
11, Seochodaero 74-gil, Seocho-gu, Seoul (Seocho-dong)
2,020,000New technology
investment
Capital stock
unissued99.00
Investment partnership
Executives with concurrent offices Companies they hold concurrent offices inRemarks
Name Position Company name Position Duty
Choi Chan-gyoExecutive managing
director
S-1 CRM Corporation Auditor Auditing
Samsung Beijing Security Systems Director Business management
Kim Soo-beom Managing director
Human TSS, Inc Auditor Auditing
Samsung Beijing Security Systems Director Business management
1) Parent company “N/A”
3. Business performance
1) Sales
2) Key investments and fund-raising status
(Unit: KRW100 million)
(Unit: KRW100 million)
By productSales performance
Remarks42nd period 41st period
Alarm Security 10,030 9,741
Building Management 4,914 4,742
Product Sales 2,958 2,866
Integrated Security 2,004 1,800
Other 77 151
Total 19,983 19,300
Details of investment Amount Fundraising
Security equipment & Facilities 1,204
Internal reservesTools and Supplies 23
Other 152
Total 1,379
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2) Financial position (summary statement of financial position) (Unit: KRW100 million)
Title 42nd 41st 40th
Assets
Ⅰ. Current assets 6,251 5,461 4,090
Ⅱ. Non-current assets 10,209 10,099 10,287
Total assets 16,460 15,560 14,377
Liabilities
Ⅰ. Current liabilities 2,834 2,760 2,698
Ⅱ. Non-current liabilities 1,068 787 717
Total liabilities 3,902 3,547 3,415
Equity
Ⅰ. Capital stock 190 190 190
Ⅱ. Capital Surplus 1,929 1,929 1,929
Ⅲ. Retained earnings 11,958 11,413 10,362
Ⅳ. Other components of equity (1,519) (1,519) (1,519)
Total equity 12,558 12,013 10,962
Total Liabilities Equity 16,460 15,560 14,377
5. Business performance and financial status of the past 3 years
1) Business performance (Summary income statement) (Unit: KRW100 million)
Title 42nd 41st 40th
1. Sales 19,983 19,300 18,183
2. Cost of sales 14,528 13,616 12,675
3. Gross profit 5,455 5,684 5,508
4. Selling and Administrative Expenses 3,528 3,681 3,481
5. Operating profit 1,927 2,003 2,027
6. Other non-operating income 169 140 107
7. Other non-operating expenses 205 287 319
8. Financial income 60 33 17
9. Financial costs 2 1 1
10. Profit before Income tax 1,949 1,888 1,831
11. Income tax expense 938 478 446
12. Profit for the year 1,011 1,410 1,385
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9. Investments in other companies made by the company, the company and subsidiaries or the company’s subsidiaries
Name of other companyParent
company
Invested in other companiesOf other companies which invested
in S-1Number of shares owned
(share)Ownership
(%)Number of shares
owned (share)Ownership
(%)
Human TSS, Inc. S-1 200,000 100.00 - -
S-1CRM Corporation S-1 140,000 100.00 - -
S-1 Samsung Beijing Security Systems S-1 Capital stock unissued 100.00 - -
SOCM LLC S-1 Capital stock unissued 100.00 - -
S-1 CORPORATION VIETNAM CO.,LTD S-1 Capital stock unissued 100.00 - -
S-1 CORPORATION HUNGARY LLC S-1 Capital stock unissued 100.00 - -
SVIC No. 35 New technology business investment partnership
S-1 Capital stock unissued 99.00 - -
Igloo Security S-1 1,209,829 11.00 - -
(As of December 31, 2018)
8. Major shareholders
(As of December 31, 2018)
Name of shareholder Number of shares owned Ownership (%) Relationship with the company
SECOM Japan 9,747,383 25.65
Samsung SDI 4,190,681 11.03
National Pension Service 2,503,012 6.59
Samsung Life Insurance 2,030,476 5.34
THE GOVERNMENT OF SINGAPORE 932,290 2.45
10. Major creditors, etc. “N/A”
11. Important facts after settlement of accounts “N/A”
12. Other important information regarding business “N/A”
6. Tasks facing the company
See “Business Overview”
7. Directors and auditors
Classification Name Position DutyRelationship with
the companyRemarks
Permanent
Yook Hyun-pyoPresident & CEO(internal director)
General manager
None
Kida Koichi(木田公一)
Vice-president and CEO(internal director)
Generalmanager
None
Lim Seok-wooVice-president
(internal director)
Head of theBE Business
DivisionNone
Park Joon-seongExecutive managing
director(internal director)
Head of the management support office
None
Kim Yoon-hwan Auditor - None
Non-permanent
Komatsuzaki Tsuneo (小松崎常夫)
Non-executive director - NoneSECOM IS Laboratory
advisor
Sato Sadahiro (佐藤貞宏)
Non-executive director - None
Head of theinternational
business division of SECOM Group
Lee Sang-beom Outside director - None
Kim Yeong-geol Outside director - None
Takakura Kenshu(髙倉憲秀)
Auditor - None
Head of the technology department,
international division of SECOM Group
(As of December 31, 2018)
22 23
1
2
3
4
5
6
Statement of financial position
Income statement
Statement of changes in equity
Statement of cash flow
Statements of appropriation of retained earnings
Notes to financial statements
24
26
27
28
29
29
Separate financial statements
24 25
(Unit: KRW)
Title 42nd (current) period 41st (prior) period
Liabilities
Ⅰ . Current liabilities 283,335,902,220 276,032,745,821
1. Accounts payable and other liabilities 182,642,081,886 175,338,232,524
2. Value added tax withheld 18,195,448,964 20,374,505,483
3. Income tax payable 19,391,339,844 23,989,997,756
4. Advances from customers 41,733,562,229 51,144,221,168
5. Unearned revenue 15,667,922,711 79,670,000
6. Deposits received 5,705,546,586 5,106,118,890
Ⅱ . Non-current liabilities 106,822,043,565 78,718,515,911
1.Long-term accounts payable and otherliabilities
8,835,634,100 7,242,981,600
2. Net defined benefit liability 8,233,953,666 -
3. Deposits received 42,525,353,857 43,475,348,584
4. Provisions 5,820,000,000 5,820,000,000
5. Long-term unearned revenue 16,247,860,864 -
6. Other non-current liabilities 25,159,241,078 22,180,185,727
Total liabilities 390,157,945,785 354,751,261,732
Equity
Ⅰ . Capital stock 18,999,589,000 18,999,589,000
1. Common capital stock 18,999,589,000 18,999,589,000
Ⅱ . Capital Surplus 192,913,601,374 192,913,601,374
Ⅲ . Retained earnings 1,195,791,501,211 1,141,256,941,507
Ⅳ . Other components of equity (151,880,124,381) (151,884,060,982)
Total Equity 1,255,824,567,204 1,201,286,070,899
Total Liabilities and Equity 1,645,982,512,989 1,556,037,332,631
1. Statement of financial position
(Unit: KRW)
Title 42nd (current) period 41st (prior) period
Assets
Ⅰ . Current assets 625,132,288,906 546,155,114,332
1. Cash and cash equivalents 123,777,368,271 149,250,146,233
2. Short-term financial instruments 247,936,136,130 204,406,870,630
3. Accounts receivable and other receivables 118,246,387,485 146,830,659,611
4. Contract assets 33,945,912,549 -
5. Accrued revenue 2,348,770,234 1,571,288,475
6. Inventories 40,234,266,853 39,464,424,658
7. Advance payments 445,992,232 734,982,400
8. Prepaid expenses 58,197,455,152 3,896,742,325
Ⅱ . Non-current assets 1,020,850,224,083 1,009,882,218,299
1. Long-term contract assets 2,179,596,450 -
2. Long-term financial assets 6,000,000 7,000,000
3. Available for sale financial assets - 6,291,806,987
4.Other comprehensive income:financial assets at fair value
9,383,429,182 -
5.Profit and loss:Financial assets at fair value
3,192,071,210 -
6. Loans and receivables 50,869,159,622 49,796,010,484
7. Investments in subsidiaries 7,292,707,960 6,251,067,960
8. Tangible assets 457,385,529,269 460,303,489,213
9. Intangible assets 442,505,722,661 458,215,162,461
10. Long-term prepaid expenses 47,763,609,758 10,621,811
11. Net defined benefit assets - 14,757,801,378
12. Deferred tax assets 272,397,971 14,249,258,005
Total assets 1,645,982,512,989 1,556,037,332,631
42nd period As of December 31, 201841st period As of December 31, 2017S-1 Corporation
26 27
(Unit: KRW)
Title Capital stockPaid-in capital in
excess of par valueRetained earnings
Other capital items
Total
January 1, 2017(beginning of the prior period)
18,999,589,000 192,913,601,374 1,036,177,280,937 (151,929,913,502) 1,096,160,557,809
A. Total comprehensive income
1. Net income - - 140,944,815,341 - 140,944,815,341
2.Gains/loss on valuation of available for sale financial assets
- - - 45,852,520 45,852,520
3.Reassessment of the net defined benefit liabilities (assets)
- - 6,397,643,979 - 6,397,643,979
B. Transactions with the owner
1. Dividends - - (42,262,798,750) - (42,262,798,750)
December 31, 2017(end of prior period)
18,999,589,000 192,913,601,374 1,141,256,941,507 (151,884,060,982) 1,201,286,070,899
January 1, 2018(beginning of current period)
18,999,589,000 192,913,601,374 1,141,256,941,507 (151,884,060,982) 1,201,286,070,899
Accounting Policy change effect - - 52,739,284,565 - 52,739,284,565
Adjusted capital 18,999,589,000 192,913,601,374 1,193,996,226,072 (151,884,060,982) 1,254,025,355,464
A. Total comprehensive income
1. Net income - - 101,069,579,400 - 101,069,579,400
2.Other comprehensive income: Gains and loss on financial assets at fair value
- - - 3,936,601 3,936,601
3.Reassessment of net defined benefit liabilities (assets)
- - (14,748,706,761) - (14,748,706,761)
B. Transactions with the owner
1. Dividends - - (84,525,597,500) - (84,525,597,500)
December 31, 2018(end of the current period)
18,999,589,000 192,913,601,374 1,195,791,501,211 (151,880,124,381) 1,255,824,567,204
42nd period From January 1, 2018 to December 31, 201841st period From January 1, 2017 to December 31, 2017S-1 Corporation
3. Statement of changes in equity2. Income statement
(Unit: KRW)
Title 42nd (current) period 41st (prior) period
Ⅰ . Sales 1,998,320,017,805 1,929,985,701,788
Ⅱ . Cost of sales 1,452,806,877,775 1,361,599,717,762
Ⅲ . Gross profit 545,513,140,030 568,385,984,026
1. Selling and Administrative expenses 352,784,275,735 368,094,844,152
Ⅳ . Operating profit 192,728,864,295 200,291,139,874
1. Other non-operating income 16,916,592,256 13,986,360,963
2. Other non-operating expense 20,547,332,554 28,703,461,581
3. Financial income 6,011,141,270 3,269,732,143
4. Financial cost 161,541,777 58,496,990
Ⅴ . Profit before Income tax 194,947,723,490 188,785,274,409
1. Income tax expense 93,878,144,090 47,840,459,068
Ⅵ . Profit for the year 101,069,579,400 140,944,815,341
Ⅶ . Earnings per share
Basic earnings per share 2,989 4,169
Diluted earnings per share 2,989 4,169
42nd period From January 1, 2018 to December 31, 201841st period From January 1, 2017 to December 31, 2017S-1 Corporation
28 29
(Unit: KRW)
Classification 42nd (current) period 41st (prior) period
Ⅰ . Unappropriated retained earnings 207,337,374,096 222,802,814,392
1.Retained earnings brought forward from the previous year
68,277,216,892 75,460,355,072
2.Cumulative effect of changes in accounting policies
52,739,284,565 -
3.Reassessment of the net defined benefit liabilities (assets)
(14,748,706,761) 6,397,643,979
4. Net income 101,069,579,400 140,944,815,341
Ⅱ . Appropriated retained earnings 154,525,597,500 154,525,597,500
1. Voluntary reserve 70,000,000,000 70,000,000,000
2. Dividend 84,525,597,500 84,525,597,500
Cash dividend 84,525,597,500 84,525,597,500
Dividend per share (rate)
Current period: KRW2,500 (500%)
Prior period: KRW2,500 (500%)
Unappropriated retained earnings carried over to subsequent year
52,811,776,596 68,277,216,892
42nd period From January 1, 2018 to December 31, 2018 Date of appropriation: March 21, 201941st period From January 1, 2017 to December 31, Final date of appropriation: March 21, 2018S-1 Corporation
5. Statements of appropriation of retained earnings
6. Notes to financial statements
For information on the notes, please read the audit report on the financial statements disclosed in the Data Analysis, Retrieval and Transfer
System of the Financial Supervisory Service (http://dart.fss.or.kr) published on March 13, 2019.
4. Statement of cash flow
(Unit: KRW)
Title 42nd (current) period 41st (prior) period
Ⅰ . Cash flow from Operating Activities 233,622,971,229 290,452,310,429
1. Cash Flows created from Operating Activities 321,905,724,654 338,973,017,278
A. Net income 101,069,579,400 140,944,815,341
B. Adjustment 270,511,547,306 235,439,650,566
C.Changes in assets and liabilities related to operating activities
(49,675,402,052) (37,411,448,629)
2. Interest received 5,160,643,686 2,071,461,089
3. Dividend revenue 3,186,719,641 62,676,450
4. Income tax paid (96,630,116,752) (50,654,844,388)
Ⅱ . Cash flows from investing activities (174,570,151,691) (225,720,474,175)
1. Increase (decrease) in financial instruments (43,528,265,500) (110,081,406,100)
2.Acquisition of available for sale financial assets
- (300,000,000)
3.Profit and loss:Acquisition of financial assets at fair value
(2,700,000,000) -
4.Other comprehensive income:Acquisition of financial assets at fair value
(3,578,500,000) -
5. Acquisition of tangible assets (129,310,941,332) (121,164,186,267)
6. Disposal of tangible assets 6,891,923,742 10,146,936,928
7. Acquisition of intangible assets (230,088,600) (118,569,040)
8. Disposal of intangible assets - 500,000,000
9. Acquisition of investments in subsidiaries (1,041,640,000) (2,121,000,000)
10. Increase (decrease) in loans and receivables (1,072,640,001) (2,582,249,696)
Ⅲ . Cash flow from financial activities (84,525,597,500) (42,262,798,750)
1. Payment of dividends (84,525,597,500) (42,262,798,750)
Ⅳ . Net increase in cash and cash equivalents (25,472,777,962) 22,469,037,504
Ⅴ . Beginning cash and cash equivalents 149,250,146,233 126,781,108,729
Ⅵ . Ending cash and cash equivalents 123,777,368,271 149,250,146,233
42nd period From January 1, 2018 to December 31, 201841st period From January 1, 2017 to December 31, 2017S-1 Corporation
30 31
1
2
3
4
5
Consolidated statement of financial position
Consolidated income statement
Consolidated statement of changes in equity
Consolidated statement of cash flow
Notes to consolidated financial statements
32
34
35
36
37
Consolidated Financial Statements
32 33
(Unit: KRW)
Title 42nd (current) period 41st (prior) period
Liabilities
Ⅰ . Current liabilities 306,091,321,734 292,782,419,691
1. Accounts payable and other liabilities 199,836,398,468 187,728,536,160
2. Value added tax withheld 21,802,201,560 23,103,536,073
3. Income tax payable 20,323,816,887 24,715,231,480
4. Advances from customers 41,784,796,138 51,209,891,097
5. Unearned revenue 15,667,922,711 79,670,000
6. Deposits received 6,676,185,970 5,945,554,881
Ⅱ . Non-current liabilities 114,445,256,207 80,917,056,860
1.Long-term accounts payable and otherliabilities
8,835,634,100 7,242,981,600
2. Net defined benefit liability 13,298,105,068 -
3. Deposit received 42,525,353,857 43,475,348,584
4. Provisions 5,820,000,000 5,820,000,000
5. Long-term unearned revenue 16,247,860,864 -
6. Other non-current liabilities 27,718,302,318 24,378,726,676
Total liabilities 420,536,577,941 373,699,476,551
Equity
Controlling Company Shareholder’s Equity 1,262,300,568,277 1,207,828,465,973
Ⅰ . Capital stock 18,999,589,000 18,999,589,000
1. Common capital stock 18,999,589,000 18,999,589,000
Ⅱ . Capital Surplus 192,913,601,374 192,913,601,374
Ⅲ . Retained earnings 1,203,001,155,778 1,148,521,528,923
Ⅳ . Other components of Equity (152,613,777,875) (152,606,253,324)
Non-controlling Interests 17,147,910 9,036,901
Total Equity 1,262,317,716,187 1,207,837,502,874
Total Liabilities and Equity 1,682,854,294,128 1,581,536,979,425
1. Consolidated statement of financial position
(Unit: KRW)
Title 42nd (current) period 41st (prior) period
assets
Ⅰ . Current assets 661,458,369,200 575,318,467,890
1. Cash and cash equivalents 147,433,369,018 171,114,297,200
2. Short-term financial instruments 252,836,136,130 208,406,870,630
3. Accounts receivable and other receivables 123,049,402,192 147,994,208,334
4. Contract assets 32,744,472,801 -
5. Accrued revenue 2,359,532,278 1,608,464,780
6. Inventories 42,945,860,207 41,173,539,280
7. Advance payments 1,495,036,583 995,390,029
8. Prepaid expenses 58,354,500,588 4,025,697,637
9. Value added tax refundable 210,575,032 -
10. Other current assets 29,484,371 -
Ⅱ . Non-current assets 1,021,395,924,928 1,006,218,511,535
1. Long-term contract assets 2,179,596,450 -
2. Long-term financial assets 6,000,000 7,000,000
3. Available for sale financial assets - 6,291,806,987
4.Other comprehensive income:Financial assets at fair value
9,383,429,182 -
5.Profit and loss:Financial assets at fair value
4,205,626,086 -
6. Loans and receivables 52,417,737,574 51,381,313,832
7. Tangible assets 459,228,549,548 462,426,324,215
8. Intangible assets 443,261,734,060 458,876,989,729
9. Long-term prepaid expenses 47,768,119,840 10,621,811
10. Net defined benefit assets - 10,912,497,682
11. Deferred tax assets 2,945,132,188 16,311,957,279
Total assets 1,682,854,294,128 1,581,536,979,425
42nd period As of December 31, 201841st period As of December 31, 2017S-1 Corporation and its subsidiaries
34 35
(Unit: KRW)
42nd period As of December 31, 201841st period As of December 31, 2017S-1 Corporation
3. Consolidated statement of changes in equity
Title
Owners’ equityNon-con-
trolling interests
totalCapital stock
Paid-in capi-tal in excess of par value
Retained earnings
Other capital items
Owners’ equity
January 1, 2017(beginning of prior period) 18,999,589,000 192,913,601,374 1,040,420,682,965 (152,388,505,893) 1,099,945,367,446 - 1,099,945,367,446
A. Total comprehensive income
1. Net income - - 143,327,082,981 - 143,327,082,981 (963,099) 143,326,119,882
2.Gains/loss on valuation ofavailable-for-Sale Financial Assets - - - 45,852,520 45,852,520 - 45,852,520
3.Reassessment of the net defined benefit liabilities (assets) - - 7,036,561,727 - 7,036,561,727 - 7,036,561,727
4.Overseas business profit/loss on foreign exchange - - - (263,599,951) (263,599,951) - (263,599,951)
B. Transactions with the owner
1. Dividends - - (42,262,798,750) - (42,262,798,750) - (42,262,798,750)
2.Acquisition of investments in subsidiaries - - - - - 10,000,000 10,000,000
December 31, 2017(end of prior period) 18,999,589,000 192,913,601,374 1,148,521,528,923 (152,606,253,324) 1,207,828,465,973 9,036,901 1,207,837,502,874
January 1, 2018(beginning of current period) 18,999,589,000 192,913,601,374 1,148,521,528,923 (152,606,253,324) 1,260,567,750,538 9,036,901 1,260,576,787,439
Accounting Policy change effect - - 52,739,284,565 - 52,739,284,565 - 52,739,284,565
Adjusted capital 18,999,589,000 192,913,601,374 1,201,260,813,488 (152,606,253,324) 1,260,567,750,538 9,036,901 1,260,576,787,439
A. Total comprehensive income
1. Net income - - 102,970,863,585 - 102,970,863,585 (2,088,991) 102,968,774,594
2.Gain/loss on valuation of available for sale financial assets - - - 3,936,601 3,936,601 - 3,936,601
3.Remeasurement of the net defined benefit liabilities (assets) - - (16,704,923,795) - (16,704,923,795) - (16,704,923,795)
4.Overseas profit/loss on foreign exchange - - - (11,461,152) (11,461,152) - (11,461,152)
B. Transactions with the owner
1. Dividends - - (84,525,597,500) - (84,525,597,500) - (84,525,597,500)
2.Acquisition of investments in subsidiaries - - - - - 10,200,000 10,200,000
December 31, 2018(end of current period) 18,999,589,000 192,913,601,374 1,203,001,155,778 (152,613,777,875) 1,262,300,568,277 17,147,910 1,262,317,716,187
2. Consolidated income statement
(Unit: KRW)
Title 42nd (current) period 41st (prior) period
Ⅰ . Sales 2,018,339,270,821 1,942,266,128,227
Ⅱ . Cost of sales 1,471,226,712,524 1,375,981,177,734
Ⅲ . Gross profit 547,112,558,297 566,284,950,493
1. Selling and Administrative Expenses 347,984,428,593 363,710,593,472
Ⅳ . Operating profit 199,128,129,704 202,574,357,021
1. Other non-operating income 14,182,508,353 14,252,274,109
2. Other non-operating expenses 20,826,258,138 28,847,160,445
3. Financial income 6,274,287,156 3,489,636,755
4. Financial cost 196,747,992 63,528,387
Ⅴ . Profit before Income tax 198,561,919,083 191,405,579,053
1. Income tax expense 95,593,144,489 48,079,459,171
Ⅵ . Profit for the year 102,968,774,594 143,326,119,882
Controlling Company Shareholder’s Equity 102,970,863,585 143,327,082,981
Non-controlling Interests (2,088,991) (963,099)
Ⅶ .Gain and loss per share of the controlling company Shareholder’s equity
Basic earnings per share 3,046 4,239
Diluted earnings per share 3,046 4,239
42nd period From January 1, 2018 to December 31, 201841st period From January 1, 2017 to December 31, 2017S-1 Corporation and its subsidiaries
36 37
(Unit: KRW)
Title 42nd (current) period 41st (prior) period
Ⅲ . Cash flow from financial activities (84,515,397,500) (42,262,798,750)
1. Payment of dividends (84,525,597,500) (42,262,798,750)
2.Acquisition of investments in subsidiaries (Increase of non-controlling entity)
10,200,000 -
Ⅳ . Profit/loss on foreign exchange of cash flow 21,407,274 (212,565,208)
Ⅴ .Net increase in cash and cash equivalents (Ⅰ+Ⅱ+Ⅲ+Ⅳ)
(23,680,928,182) 27,016,028,590
Ⅵ . Beginning cash and cash equivalents 171,114,297,200 144,098,268,610
Ⅶ . Ending cash and cash equivalents 147,433,369,018 171,114,297,200
5. Notes to consolidated financial statements
For information on the notes, please read the audit report on the financial statements disclosed in the Data Analysis, Retrieval and Transfer
System of Financial Supervisory Service (http://dart.fss.or.kr) published on March 13, 2019.
4. Consolidated statement of cash flow
(Unit: KRW)
Title 42nd (current) period 41st (prior) period
Ⅰ . Cash Flows from Operating Activities 236,971,524,260 294,205,564,106
1. Operating cash flow 329,496,192,082 342,998,268,675
A. Net income 102,968,774,594 143,326,119,882
B. Adjustments 282,095,163,870 243,391,786,951
C.Increase (decrease) in assets and liabilities related to operating activities
(55,567,746,382) (43,719,638,158)
2. Interest received 5,443,385,236 2,281,633,684
3. Dividend revenue 186,659,641 62,676,450
4. Income tax paid (98,154,712,699) (51,137,014,703)
Ⅱ . Cash flows from investing activities (176,158,462,216) (224,714,171,558)
1. Increase (decrease) in financial instruments (44,428,265,500) (110,081,406,100)
2.Acquisition of available for sale financialassets
- (300,000,000)
3.Other comprehensive income:Acquisition of financial assets at fair value
(3,578,500,000) -
4.Profit and loss:Acquisition of financial assets at fair value
(3,679,462,267) -
5. Acquisition of tangible assets (129,959,533,373) (122,132,708,266)
6. Disposal of tangible assets 6,892,143,106 10,147,289,784
7. Acquisition of intangible assets (372,204,181) (257,097,280)
8. Disposal of intangible assets - 500,000,000
9. Increase (decrease) in loans and receivables (1,032,640,001) (2,600,249,696)
10.Acquisition of investments in subsidiaries (Increase of non-controlling interests)
- 10,000,000
42nd period As of December 31, 201841st period As of December 31, 2017S-1 Corporation
38 39
Resolution of the Board of Directors
By a resolution of the Board of Directors, the financial statements and annual report of the
42nd period (January 1, 2018 ~ December 31, 2018) are submitted as described above
January 28, 2019
S-1 Corporation
CEO Yook Hyun-pyo
Resolution of the Boardof Directors
CEO Kida Koichi
Director Lim Seok-woo
Director Park Joon-seong
Director Komatsuzaki Tsuneo
Director Sato Sadahiro
Outside director Lee Sang-beom
Outside director Kim Yeong-geol
40 41
1. Auditor’s report
The auditors audited the accounting and business of the 42nd business year(from January 1, 2018 until December 31, 2018), and report the following:
1) Outline of the auditing method
The auditors perused accounting books and related documents for auditing, and reviewed the financial statements, the consolidated
financial statements and supplementary schedules, and made comparisons, conducted due diligence, requested the presence of
related officials, and asked questions if it was deemed necessary, and followed the appropriate auditing procedure.
If deemed necessary the auditors attended BOD meetings and other important meetings, the auditors received business reports from
directors, and inspected and reviewed documents related to important businesses. In their perusal they used appropriate methods.
The auditors received and reviewed a report on the operating status of the internal accounting management system, which was
instituted to prepare and disclose reliable accounting data.
2) Matters concerning financial statements, such as the statement of financial position, the consolidated statement of financial position, the comprehensive income statement and the consolidated comprehensive income statement.
The financial statements, including the statement of financial position, the consolidated statement of financial position, the
comprehensive income statement, and the consolidated comprehensive income statement, appropriately reflect the financial status
and management performance of the company according to laws and the articles of incorporation.
3) Matters concerning the statements of appropriation of retained earnings
The statements of appropriation of retained earnings are appropriate according to laws and the articles of incorporation.
4) Matters concerning the annual report
The annual report appropriately reflects the status of the company according to laws and the articles of incorporation.
February 26, 2019
1
2
3
Auditor’s report
Independent auditors’ report on financial statements
Independent auditors’ report on consolidated financial statements
41
42
44
Audit Report
S-1 Corporation
Auditor Kim Yoon-hwan
Auditor Takakura Kenshu
42 43
2. Independent auditors’ report on financial statements
To the shareholders and board of directors of S-1 Corporation
Auditor opinion
We audited the financial statements of S-1 Corporation. The financial statements consist of the statement of financial
position as of December 31, 2018 and December 31, 2017, and the income statement, comprehensive income statement,
statement of changes in equity, and statement of cash flow of the two reporting periods ending on the same dates, and the
notes to the financial statements including the summary of significant accounting policies.
In our opinion, the financial statements of S-1 Corporation impartially reflect the financial position of S-1 Corporation as of
December 31, 2018 and December 31, 2017, and the financial performance and cash flow of S-1 Corporation ending on the
same dates according to K-IFRS from the viewpoint of materiality.
Grounds for the auditor opinion
We audited according to Korean auditing standards. Our responsibility according to these standards is described in the paragraph
concerning the auditors’ responsibility for the financial statements in this audit report. We are independent from the company
according to the ethical requirements of Korea related to the auditing of the financial statements, and we fulfilled other ethical
responsibilities according to these requirements. We believe that the auditing evidence we obtained is sufficient and appropriate as
grounds for the audit opinion.
The management and governing body’s responsibility for the financial statements
Management is responsible for preparing and presenting the financial statements impartially according to Korean equivalents
of International Financial Reporting Standards (K-IFRS) as well as the internal controls internally determined to be necessary for
preparing the financial statements without any material distortion caused by illegalities or errors.
When preparing the financial statements, management is responsible for evaluating the company’s ability to continue to exist
as a going concern, and if applicable, disclosing matters related to the going concern. As long as management does not have
any intention of liquidating the company or ceasing operations, management is also responsible for using the going concern’s
accounting methods.
The governing body is responsible for auditing the financial reporting procedure of the company.
Auditors’ responsibility for the auditing of the financial statements
Our purpose is to gain reasonable confidence concerning the absence of material distortions due to illegalities or errors in the
company’s financial statements, and publish an audit report including our opinions. Reasonable confidence means a high level
of confidence, but does not guarantee that the audit conducted according to the auditing standards will always discover
material distortion. Distortion may be caused by illegalities or errors, and if it is reasonably expected that distortions will affect
the economic decision making of stakeholders based on the financial statements individually or collectively, such distortions
will be regarded as material. This audit report is valid as of the audit report date. Accordingly, it is likely that incidents or situations may occur that may seriously affect the attached financial statements of the company between the audit report date and perusal of this report, and as a result this audit report may be modified.
Ernst & Young Korea, 111, Yeoeuigongwon-ro, Yeongdeungpo-gu, Seoul
CEO Seo Jin-seok
March 13, 2019
As part of the audit according to the auditing standards, we make professional judgment and maintain professional suspicions throughout
the auditing process. Also,
ㆍ we identify the risk of material statement of the financial statements due to illegalities or errors, and design and carry out the
auditing procedure corresponding to this risk. We also obtain sufficient and appropriate auditing evidence as grounds for the
audit opinion. As illegalities may involve conspiracy, forgery, intentional omission, false statements or neutralization of internal
controls, the risk of failing to discover distortions due to illegality is greater than that due to errors.
ㆍ we ascertain the requisite internal controls related to the audit in order to design auditing procedures fit for the situation, but
such purpose is not to express opinions on the effectiveness of the internal controls.
ㆍ we evaluate the appropriateness of the accounting policy that management had applied in order to prepare the financial
statements, and the rationality of the disclosure related to the accounting estimates as derived by management.
ㆍ we make conclusions about the appropriateness of the going concern’s assumption of accounting used by management, and
whether there is any important uncertainty related to an event or situation likely to cause significant suspicions about the
ability to exist as a going concern based on the auditing evidence obtained. If we concluded that there has been an important
discrepancy, we call attention to the audit report with regard to the related disclosure of the financial statements, and if the
disclosure is inappropriate, we are required to change our opinions. Our conclusion is based on the auditing evidence we have
obtained until the audit report, but future events or situations may cease the existence of the company as a going concern.
ㆍ we evaluate the general representations, structure and contents of the financial statements including disclosures, and evaluate
whether the financial statements impartially represent the transactions and events on which they are based.
Among various items, we communicate the significant findings of the audit, such as the planned audit scope, time and significant
inadequacies of internal controls, with the governing body.
Additionally, we meet the ethical requirements related to independence, and provide the governing body with a statement that
we communicate all relations deemed to be relevant to our independence, and if applicable, related systematic safety devices
with the governing body.
Oh Jae-young conducted the audit on which this audit report is based.
44 45
3. Independent auditors’ report on consolidated financial statements
To S-1 shareholders and board of directors of S-1 Corporation
Audit opinion
We audited the consolidated financial statements of S-1 Corporation and its subsidiaries (hereinafter referred to as “consolidated
companies”). The consolidated financial statements consist of the consolidated statement of financial position as of December
31, 2018 and December 31, 2017, and the consolidated income statement, comprehensive income statement, consolidated
statement of changes in equity, and consolidated statement of cash flow of the two reporting periods ending on the same
dates, and the notes to the consolidated financial statements including the summary of significant accounting policies.
In our opinion, the consolidated financial statements of the consolidated companies impartially reflect the consolidated
financial position of consolidated companies as of December 31, 2018 and December 31, 2017, and the consolidated financial
performance and consolidated cash flows of the consolidated companies ending on the same dates according to K-IFRS from
the viewpoint of materiality.
Grounds for the audit opinion
We audited according to Korean auditing standards. Our responsibility according to these standards is described in the
paragraph concerning the auditors’ responsibility for the consolidated financial statements in this audit report. We are
independent from the company according to the ethical requirements of Korea related to the auditing of the consolidated
financial statements, and we fulfilled other ethical responsibilities according to these requirements. We believe that the auditing
evidence we obtained is sufficient and appropriate as grounds for the audit opinion.
Managements’ and governing body’s responsibility for the consolidated financial statements
Management is responsible for preparing and presenting the consolidated financial statements impartially according to
Korean equivalents of International Financial Reporting Standards (K-IFRS) as well as the internal controls internally determined
to be necessary for preparing the financial statements without any material distortion caused by illegalities or errors.
When preparing the financial statements, management is responsible for evaluating the consolidated companies’ ability to
continue to exist as going concerns, and if applicable, disclosing matters related to the going concerns. As long as management
does not have any intention of liquidating any company or ceasing operations of such, management is also responsible for
using the going concern’s accounting methods. The governing body is responsible for monitoring the consolidated companies’
financial reporting procedure.
The auditor’s responsibility for the auditing of the consolidated financial statements
Our purpose is to gain reasonable confidence about the absence of material distortions due to illegalities or errors in the
company’s consolidated financial statements, and publish an audit report including our opinions. Reasonable confidence
means a high level of confidence, but does not guarantee that the audit conducted according to the auditing standards
will always discover material distortion. Distortion may be caused by illegalities or errors, and if it is reasonably expected
that distortions will affect the economic decision making of stakeholders based on the consolidated financial statements
individually or collectively, such distortions will be regarded as material.
This audit report is valid as of the audit report date. Accordingly, it is likely that incidents or situations may occur that may seriously affect the attached financial statements of the company between the audit report date and perusal of this report, and as a result this audit report may be modified.
Ernst & Young Korea, 111, Yeoeuigongwon-ro, Yeongdeungpo-gu, Seoul
CEO Seo Jin-seok
March 13, 2019
As part of the audit according to the auditing standards, we make professional judgment and maintain professional suspicions throughout
the auditing process. Also,
ㆍ we identify the risk of material statement of the consolidated financial statements due to illegalities or errors, and design and
carry out the auditing procedure corresponding to this risk. We also obtain sufficient and appropriate auditing evidence
as grounds for the audit opinion. As illegalities may involve conspiracy, forgery, intentional omission, false statements or
neutralization of internal controls, the risk of failing to discover distortions due to illegality is greater than that due to errors.
ㆍ we ascertain the requisite internal controls related to the audit in order to design auditing procedures fit for the situation, but
such purpose is not to express opinions on the effectiveness of the internal controls.
ㆍ we evaluate the appropriateness of the accounting policy that management had applied in order to prepare the financial
statements, and the rationality of the disclosure related to the accounting estimates as derived by management.
ㆍ we make conclusions about the appropriateness of the going concern’s assumption of accounting used by management, and
whether there is any important uncertainty related to an event or situation likely to cause significant suspicions about the
ability to exist as a going concern based on the auditing evidence obtained. If we concluded that there has been an important
discrepancy, we call attention to the audit report with regard to the related disclosure of the financial statements, and if the
disclosure is inappropriate, we are required to change our opinions. Our conclusion is based on the auditing evidence we have
obtained until the audit report, but future events or situations may cease the existence of the company as a going concern.
ㆍ we evaluate the general representations, structure and contents of the financial statements including disclosures, and evaluate
whether the financial statements impartially represent the transactions and events on which they are based.
ㆍ To express our opinions on the consolidated financial statements, we obtain sufficient and appropriate auditing evidence
related to the financial information of the company or the business activities in the group. We are responsible for the direction,
supervision and performance of the group audit, and fully responsible for the audit opinions.
Among various items, we communicate the significant findings of the audit, such as the planned audit scope, time and significant
inadequacies of internal controls, with the governing body.
Additionally, we meet the ethical requirements related to independence, and provide the governing body with a statement that
we communicate all relations deemed to be relevant to our independence, and if applicable, related systematic safety devices
with the governing body.
Oh Jae-young conducted the audit on which this audit report is based.
46 47
CEO and internal accounting manager’s report on the operating status
To the shareholders, board of directors, and auditors of S-1 shareholders
The CEO and the internal accounting manager evaluated the design and operating status of our internal accounting management system
for the fiscal year ending on December 31, 2018.
The management of the company, including the CEO and the internal accounting manager, is responsible for the design and operation of
the internal accounting management system.
To prepare and disclose reliable financial statements, the CEO and internal accounting manager both evaluated whether the company’s
internal accounting system was effectively designed and operated so as to prevent and find errors or illegalities that may cause distortions
in the financial statements.
The CEO and the internal accounting manager used the (former) internal accounting management system standards to evaluate the
design and operating status of the internal accounting management system.
As of December 31, 2018, as a result of the evaluation of the operating status of the internal accounting management system conducted
by the CEO and internal accounting manager based on the (former) internal accounting management system standards, it is believed that
our internal accounting management system was designed and is operated effectively from the viewpoint of materiality.
The CEO and the internal accounting manager confirmed that the report does not include any false descriptions or statements, and
anything that must be described or stated is not omitted.
Additionally, the CEO and internal accounting manager confirmed that nothing likely to cause a serious misunderstanding of the report
was described or stated, and read the report with due care and directly checked and reviewed the contents of the report.
CEO and internal accounting manager’s report on theoperating status
S-1 Corporation
CEO Yook Hyun-pyo
Internal accounting manager Park Joon-seong
January 28, 2019