REG - Lotte Shopping CoLtd - 1st Quarter Results <Origin Href="QuoteRef">023530.KS</Origin> - Part 3
06/09/2014 16:40
- Part 3: For the preceding part double click ID:nRSP0640Mb
(Unit: USD)
Category October 2013 November 2013 December 2013 January 2014 February 2014 March 2014
Common stock price Maximum 19.30 18.37 18.85 18.99 17.02 15.85
Minimum 17.36 16.89 17.90 16.80 15.50 14.67
Average 18.28 17.75 18.26 18.03 16.11 15.06
VII. Executives and Employees
A. Status of Executives and Employees
1. Executives
Registered Executives
(As of 31 March 2014)
(Unit: shares)
Kyukho Shin 1922.10 Executive Chairman Representative Director 293,877 - - 2015.03.21
Dongbin Shin 1955.02 Chairman Inside Director 4,237,627 - - 2016.03.21
Inwon Lee 1947.08 Vice-Chairman Representative Director - - - 2016.03.21
Heon Shin 1954.09 President Representative Director 142 - 2 years 2016.03.21
Youngja Shin 1942.10 Inside Director Inside Director 232,818 - - 2016.03.21
Sangjin Lim 1960.03 Outside Director Outside Director - - 1 year 2015.03.21
Myeong Hyeon Baek 1961.09 Outside Director Outside Director - - 1 year 2015.03.21
Taehyeon Kim 1955.06 Outside Director Outside Director - - 2 years 2016.03.21
Dongyul Park 1953.07 Outside Director Outside Director - - - 2016.03.21
Sukeun Kwak 1953.08 Outside Director Outside Director - - - 2016.03.21
Byungkee Ko 1955.04 Outside Director Outside Director - - - 2016.03.21
-
2016.03.21
Byungkee Ko
1955.04
Outside Director
Outside Director
-
-
-
2016.03.21
Changes since 31 March 2014:
※ Representative Director Heon Shin resigned on 24 April 2014.
※ Won Joon Lee was appointed as Chief Executive Officer and Representative Director by resolution of the shareholders on 10
June 2014.
Non-registered Executives
(As of 31 March 2014)
(Unit: shares)
Gakgyu Hwang 1955.04 President Operations 65
Byungyong Noh 1951.06 President Representative 10 Inside Director of Lotte Hi-mart Co., Ltd. (concurrently employed)
Jinse So 1950.05 President Executive President 142
Jaehwa Kim 1954.07 Vice President Audit Director
Jongwon Choi 1957.09 Vice President Communications
Jongmin Yoon 1960.11 Vice President Human resources
Heetae Gang 1959.04 Vice President China 111
Sunghoi Kim 1943.06 Senior Managing Director Secretary
Bongcheol Lee 1958.05 Senior Managing Director Support
Changwon Lee 1959.03 Senior Managing Director Communications
Jaedon Ryu 1960.08 Senior Managing Director Secretary
Ilmin Lee 1959.06 Senior Managing Director Secretary 47
Hyunchul Park 1960.10 Senior Managing Director Operations
Byungyeon Lim 1964.09 Senior Managing Director Vision Strategy
Jaeyoon Suh 1958.06 Senior Managing Director China
Changrak Kim 1957.12 Senior Managing Director Business 1 119 Representative Director of Lotte Station Building (concurrently employed)
Hosung Park 1958.09 Senior Managing Director Product 102
Jongin Kim 1963.03 Senior Managing Director China 24
Yongpyo Moon 1962.04 Senior Managing Director Strategy support 32
Chunseok Choi 1960.03 Senior Managing Director Representative 86
Wonchun Cha 1957.12 Senior Managing Director Representative
Gap Lee 1962.09 Managing Director Operations 105
Chungik Lee 1964.11 Managing Director Vision Strategy 24 Inside Director of Lotte Hi-mart (concurrently employed)
Inkwon Kim 1969.01 Managing Director Legal
Jonghyeon Kang 1964.05 Managing Director Operations
Seokhwan Lee 1967.08 Managing Director Communications
Jinsung Lee 1969.02 Managing Director Strategy & Insight Center
Gwanggi Min 1956.01 Managing Director Daegu 127
Wansin Lee 1960.10 Managing Director Marketing 86
Janghwa Lee 1959.06 Managing Director Business 3
Hoju Jang 1960.08 Managing Director Finance Inside Director of Lotte Station Building and Representative Director of Lotte Incheon Development (concurrently employed)
Yoonnchul Noh 1961.04 Managing Director New business Auditor of Lotte Incheon Development (concurrently employed)
Donghyuk Jeong 1962.07 Managing Director Business 2 32
Jaechan Lee 1960.02 Managing Director Customer
Yeongheon Lee 1960.10 Managing Director Southeast Asia
Changhui Nam 1966.10 Managing Director Product 96
Yeongheon Lee 1958.12 Managing Director Overseas business
Seungbok Hong 1957.09 Managing Director Sales 16
Ikwoo Nam 1962.01 Director Operations
Gyungmoon Jung 1964.02 Director Vision Strategy
Sungho Choo 1964.02 Director Communications
Wonkyu Ki 1966.02 Director Human resources 62
Taewan Kim 1965.03 Director Vision Strategy
Woochul Cha 1968.01 Director Audit Director 16
Yongseok Hwang 1970.02 Director Corporate culture 16
Choonghyo Hyun 1966.11 Director Finance
Changyong Kim 1967.03 Director Audit Director
Youngchul Jung 1971.05 Director Secretary
Byeonghui Lee 1969.03 Director Communications
Chanseo Park 1969.03 Director Finance
Insoo Baek 1965.06 Director Strategy & Insight Center
Gwangchul Shin 1967.11 Director Strategy & Insight Center 29
Chansoo Kim 1965.03 Director Distribution CFD
Unseong Baek 1965.06 Director Welfare 71
Soohoi Ku 1958.02 Director Vietnam 86
Junwon Lim 1962.05 Director Pyeonchon branch
Taehak Cho 1961.03 Director Shenyang branch 86
Suhyun Jang 1964.06 Director Main branch 104
Bumseok Hwang 1965.09 Director Women's fashion 71
Hyungsik Jeon 1963.08 Director Busan main branch 79
Younsung Jung 1965.03 Director Avenuel World Tower branch 79
Gyuwan Hwang 1965.02 Director Jamsil branch 71
Jun Jang 1958.12 Director Design 32
Changwon Yoo 1968.02 Director GF business
Changhyeon Lee 1961.08 Director Yeongdeungpo branch
Daehun Park 1964.08 Director Cheongnyangri branch 62
Minyeol Ryu 1966.03 Director Gwangju branch 71
Youngjae Cho 1966.04 Director Planning 80
Younggeun Hwang 1967.01 Director Home appliances 71
Hoseol Lee 1970.07 Director Men's sports 63
Giljo Woo 1966.08 Director Food products
Wonil Choi 1962.09 Director Dongrae branch
Chanseok Lee 1961.12 Director Changwon branch 79
Sungsoo Kim 1964.01 Director Ulsan branch 79
Taeheung Nam 1964.08 Director Chengdu World Center branch
Hyeonseok Min 1967.06 Director Russia
Wookyung Kim 1967.02 Director IR Team 12
Jaeyoung Gu 1962.05 Director Gwangbok branch 20
Daesu Kim 1967.09 Director Nowon branch
Jungho Song 1966.03 Director MD strategy 409
Hyungkyu Lee 1967.01 Director Daejeon branch
Wansu Park 1968.07 Director Management support 100
Jaeok Lee 1969.01 Director Jungdong branch 25
Seondae Lee 1970.01 Director Public relations
Gidae Nam 1967.02 Director Guri branch 55
Gilmo Han 1967.07 Director Merchandise 55
Yonghwan Lee 1967.10 Director Suwon branch 55
Jonghyeok Hyeon 1969.10 Director Pohang branch
Sangbyeong Park 1970.07 Director East Busan Project
Yeongsu Ha 1969.09 Director Ilsan branch 3
Yeongtaek Yu 1969.06 Director Ethical management
Jieun Kim 1969.08 Director Overseas fashion
Gijeong Park 1964.02 Director GF business
Jongdo Park 1961.05 Director Mart China development 86
Jonghwan Kim 1962.05 Director Mart processed foods 32
Daesik Jang 1966.12 Director Seoul Gangwon customer
Byeongmoon Hahn 1963.06 Director Mart overseas cooperation 32
Pyungkyu Hong 1962.11 Director Mart development in South East Asia 80
Ilgeun Oh 1968.07 Director Mart site development 1 39
Wonsik Hong 1966.06 Director Mart Vietnam 32
Jookyung Yoon 1965.04 Director Mart Indonesia retail 71
Seungsun Song 1971.06 Director Online mart
Byeongho Ryu 1966.03 Director Central China 24
Chansik Bang 1966.02 Director Eastern China
Jinkyung Kim 1964.09 Director Mart ethical innovation
Joohee Woo 1967.03 Director Mart fresh foods 1 32
Minhee Lee 1969.08 Director Human resources strategy
Soonjin Jung 1961.10 Director Northern China 10
Minho Kang 1968.11 Director Mart site development 2 10
Hakjae Lee 1966.04 Director Daejeon Chungcheong customer 32
Gwangho Wang 1965.08 Director Lifestyle 32
Heekyung Kim 1962.05 Director Gwangju Honam customer 166
Gwanghui Seong 1964.06 Director Clothing & merchandise 71
Eunmo Yang 1967.06 Director Finance 31
Yeongsik Park 1964.02 Director Fresh foods 2
Seungmu Heo 1965.02 Director Branch development 2 32
Gwani Lee 1969.01 Director Southeast Asia integrated finance
Gyeongu Yu 1966.10 Director China strategy
Yeongbae Ham 1962.02 Director Development
Yeongjun Cho 1971.01 Director Marketing
Seunghee Kim 1965.04 Director Memebership
Wonho Jung 1969.02 Director Processed lifestyle 55
Jaehyung Seo 1964.10 Director Yeongnam
Hyungseok Han 1965.06 Director Planning 16
Yonggu Kim 1960.10 Director Fresh foods 16
Minsu Kang 1965.02 Director Management support 15
Cheolho Park 1966.04 Director Cinema
Eunggeol Kim 1967.03 Director Management support
Seungchul You 1962.02 Director Cinema 32
Gwanro Lee 1963.02 Director Management support 32
Sangmoo Lee 1968.09 Director Movie
Hyeongsu Ji 1965.10 Director New business
Eungyo Lee 1967.08 Director Management strategy
Eungyo Lee
1967.08
Director
Management strategy
※ Changes since 31 March 2014: Wonjun Lee was newly appointed as President on 25 April 2014.
2. Employees
(As of 31 March 2014)
(Unit: persons, year, thousand Won)
Department Store(2) Male 2,228 2 - 2,230 11.6 36,145,085 16,377
Female 3,358 489 - 3,847 8.9 28,184,873 7,657
Discount Store Male 3,719 478 - 4,197 6.8 46,348,000 11,218
Female 5,653 3,556 - 9,209 4.1 43,090,000 5,471
Others Male 1,946 379 - 2,325 4.6 22,167,895 9,668
Female 2,903 1,645 - 4,548 3.2 22,807,750 5,016
Total 19,807 6,549 - 26,356 5.8 198,743,603 8,035
3.2
22,807,750
5,016
Total
19,807
6,549
-
26,356
5.8
198,743,603
8,035
Notes:
(1) Based on eight hour work days and an average total of 24,736 employees.
(2) Includes former employees of Lotte Midopa Co., Ltd., which was acquired by the Company on 1 January 2013.
※ Starting from the Company's 2010 annual report, the Company disclosed data for both full-time and contract employees.
Prior to the Company's 2010 annual report, it only disclosed data for full-time employees. As such, readers should note
the differences when comparing the number of employees, average number of years worked, aggregate annual compensation and
average compensation per person.
※ The above table excludes temporary workers.
B. Compensation
Compensation of Directors
(Unit: million Won)
Category Number of directors Amount paid Average per person
Registered Director 5 1,026 205
Outside Director 3 50 17
Audit Committee Member 3 44 15
Total 11 1,119 102
Compensation of Individual Directors
Not applicable.
VIII. Transactions with Interested Parties
A. Transactions with the Largest Shareholder and its Affiliates
Not applicable.
B. Collateral
Not applicable.
C. Guarantee of Obligations
(Unit: USD 1,000, RMB 1,000)
Company name Relation Transaction details Note
Beginning Increase Decrease Ending
Lotte Properties (Chengdu) HK Limited Affiliate - USD 140,000 - USD 140,000 Agreed interest is included
- USD 50,000 - USD 50,000
USD 63,800 - USD 63,800 -
USD 70,000 - USD 70,000 -
Lotte Shopping RUS Ltd. Affiliate USD 10,000 - - USD 10,000 Agreed interest is included
Lotte Cinema Vietnam Co., Ltd. Affiliate USD 24,000 - USD 24,000 - Agreed interest is included
Lotte Shopping Business Management (Hong Kong) Limited Not an affiliate RMB 750,000 - - RMB 750,000 Agreed interest is included
IX. Other Relevant Matters
A. Summary of the Minutes from the General Meeting of Shareholders
Date Matters Decision
44th General Meeting of Shareholders(21 March 2014) Agenda No. 1: Approval of the Company's 44th fiscal year financial statementsAgenda No. 2: Approval of amendments to articles of incorporationAgenda No. 3: Appointment of directors -No. 3-1: Appointment of inside directors Approved
-No. 3-2: Appointment of outside directors
-No. 3-3: Appointment of audit committee membersAgenda No. 4: Approval of compensation limit for directorsAgenda No. 5: Approval of amendments to severance pay
B. Contingent Liabilities
1. Major legal proceedings
The Company's management does not believe that the final outcome of the lawsuits that it is currently involved in would
significantly affect the Company's financial condition.
a. Major lawsuits where the Company is the plaintiff
(Unit: thousand Won)
Department store Lotte Shopping Claim related to cancellation of gross real estate tax (and 8 other cases) 13,169,837
Discount store Lotte Shopping Claim related to cancellation of construction permits (and 41 other cases) 1,121,585
Finance Lotte Card Debt collection claim (and 243 other cases) 1,490,552
eB Card Claim related to payment 780,935
Electronics Lotte Hi-mart Damages claim (and 4 other cases) 14,592,223
Others Lotte Shopping (Super) Claim related to cancellation of business hours restriction (and 14 other cases) 4,219,057
Lotte Shopping (Cinema) Claim related cancellation fee (and 2 other cases) 1,895,536
Boulangerie Claim related to payment 198,635
Korea Seven Claim on return of rental deposit (and 36 other cases) 3,910,328
Buy the Way Claim on return of rental deposit (and 5 other cases) 94,893
3,910,328
Buy the Way
Claim on return of rental deposit (and 5 other cases)
94,893
b. Major lawsuits where the Company is the defendant
(Unit: thousand Won)
Department store Lotte Shopping Damages claim (and 10 other cases) 1,585,722
Discount store Lotte Shopping Damages claim (and 6 other cases) 5,533,803
Finance Lotte Card Damages claim (and 59 other cases) 54,467,206
eB Card Claim related to remuneration (and 1 other case) 3,050,000
Electronics Lotte Hi-mart Damages claim (and 5 other cases) 6,226,828
Others Lotte Shopping (Super) Damages claim (and 4 other cases) 2,885,551
Lotte Shopping (Cinema) Damages claim (and 3 other cases) 3,730,232
Korea Seven Claim related to cancellation of business hours restriction (and 18 other cases) 2,547,545
Buy the Way Eviction (and 10 other cases) 292,440
Woori Home Shopping Claim regarding product of CN Electronics Co., Ltd. 226,624
292,440
Woori Home Shopping
Claim regarding product of CN Electronics Co., Ltd.
226,624
2. Bills or checks provided as collateral
(As of 31 March 2014)
(Unit: million Won)
Category Place to submit Number of instruments Amount Note
Others Korea Seven Corporation 1 500 Promissory note provided to guarantee a Korea University Foundation lease agreement.
※ If there is an event of default or a delinquent payment under Lotte Card's asset-backed securities, Lotte Card may be
liable under the guarantee it provided for the asset-back securities. If the asset-backed securities are based on a trust,
the trustee may request Lotte Card to pledge certain additional assets if the speciality of the existing assets fall below
a certain level. In addition, a limited company specialized in asset-backed securities has to bear obligations for early
redemption if the circumstance provided in the related agreement are met, such as the average portfolio profitability for
three settlement periods in a row becomes lower than the average basic cost ratio for the same period in case of
asset-backed securities or the balance of the adjusted principal amount of asset-backed securities at the end of every
settlement period becomes lower than the minimum balance of principal amount of such asset-backed securities.
3. Use of proceeds from private placements
(As of 31 March 2014)
(Unit: million Won)
Convertible bond issue 5 July 2011 960,003 Overseas investment and repayment of foreign currency borrowings Overseas investment and repayment of foreign currency borrowings
Convertible bond issue
5 July 2011
960,003
Overseas investment and repayment of foreign currency borrowings
Overseas investment and repayment of foreign currency borrowings
※ The exchange rates in effect on the remittance date (5 July 2011), of US$ 1.00 = Won 1,063.8 and JPY 1 = Won 13.1724,
were applied.
4. Other Contingent Liabilities
a. Detail of payment guarantees on behalf of specially related parties
Details of guarantee or payment guarantees provided by the Company in favour of its specially related parties are as
follows. There are no guarantee or payment guarantees provided by such specially related parties in favour of the
Company.
Company name Guarantor Guaranteed amount Term ofguarantee Remarks
Lotte Shopping Rus Ltd. Woori Bank USD 10,000,000 7 May 2013 to 7 May 2014 Payment guarantees for funding
In addition to the above, D Cinema of Korea Co., Ltd. entered into a VPF agreement with Twentieth Century Fox Film
Corporation in October 2008, and D Cinema's performance thereunder was guaranteed by CJ CGV Co., Ltd. and the Company (50%
each). In addition, the Company has guaranteed Burger King Japan Co., Ltd.'s royalty contract with BK ASIAPAC PTE. Ltd
(3.0% of sales and US$25,000 per store opened). Furthermore, the Company, Lotte Hotel and Lotte Construction have entered
into a joint supplemental funding agreement in connection with the Won 700 million Lotte Incheon Development asset backed
securities due 23 February 2018 issued by HND Able 2nd Limited in case HND Able 2nd Limited is unable to pay principal or
interest on the securities.
5. Issuance of hybrid securities recognized as equity
(As of 31 March 2014)
(Unit: million Won)
Issuance number Issue No. 1-1, 2 of Lotte Shopping subordinated hybrid securities
Issuance date 15 November 2013
Issued amount Won 270 billion (No. 1-1: Won 240 billion, No. 1-2: Won 30 billion)
Purpose of issuance Repayment of borrowings and general corproate purposes
Type of offering Private placement
Listed/Unlisted Unlisted
Recognition as equity for accounting purposes Issued securities were recognized as equity shares as they are not considered as part of assets that may be collected for money owed to creditors. However, no dividend may be paid until all interests have been paid.
Unpaid accumulated interest None
Maturity and early redemption Maturity: 30 years (but may be extended)
Call options are exercisable five years after issuance date.
Interest rate (with conditions for rate adjustment) 4.723% (the rate will be recalculated every five years after issuance date as 5-year government bond yield＋1.5%, with an additional 1% at 10 years after issuance)
Seniority Issued securities will be considered pari passu with preferred stock of the Company.
Seniority
Issued securities will be considered pari passu with preferred stock of the Company.
6. Sanctions and Fines
a. Lotte Shopping
In July 2013, the Seoul Regional Tax Office commenced a regular tax investigation into the Company and assessed additional
taxes, which were paid in full by the Company in February 2014.
b. Lotte Card
Business segment Company Date Sanction / fine Reason Measures taken to prevent reoccurrence
Card Lotte Card 22 March 2010 Advisory from the Financial Supervisory Service Advisory from the Financial Supervisory Service in connection with excessive credit card recruiting offers. Termination of employment of the relevant recruiter. Employee training.
21 January 2014 Advisory from the Financial Supervisory Service Improper operation of board of directors. Strengthening of management of board of directors operation.
11 February 2014 Warning from the Financial Supervisory Service Insurance solicitation with misleading information about insurance products. Employee training.
16 Feburary 2014 Partial suspension of operations for 3 months from the Financial Services Commission Leaking of customer information. Reinforcement of information security (physical and IT-related).
※ The above table summary does not include minor sanctions and fines.
C. Inventory Status
(Unit: million Won)
Department store Merchandise 1,496,951 1,406,355 1,247,970
Goods
Goods in process
Half-finished goods
Raw materials
Component materials
Stored goods
Goods not delivered
Unsold property
Completed property
Uncompleted property
Land site
Sub-total 1,496,951 1,406,355 1,247,970
Discount store Merchandise 603,626 716,340 643,236
Goods
Goods in process
Half-finished goods
Raw materials
Component materials
Stored goods 330 562 819
Goods not delivered 486 413 235
Unsold property
Completed property
Uncompleted property 34,300 36,068 23,931
Land site 30,992 35,130 46,137
Sub-total 669,734 788,513 714,358
Finance Merchandise 4,086 2,506 3,679
Goods
Goods in process
Half-finished goods
Raw materials
Component materials
Stored goods
Goods not delivered
Unsold property
Completed property
Uncompleted property
Land site
Sub-total 4,086 2,506 3,679
Electronics Merchandise 382,129 339,729 252,196
Goods
Goods in process
Half-finished goods
Raw materials
Component materials
Stored goods
Goods not delivered
Unsold property
Completed property
Uncompleted property
Land site
Sub-total 382,129 339,729 252,196
Others Merchandise 218,377 239,866 209,781
Goods 8,611 9,303 9,361
Goods in process 1,622 1,288 978
Half-finished goods
Raw materials 1,598 1,166 1,454
Component materials 591 712 452
Stored goods 2,085 2,867 1,478
Goods not delivered 188 83 68
Unsold property
Completed property
Uncompleted property 328,381 322,104
Land site 308,529
Sub-total 561,453 577,389 532,101
Total Merchandise 2,705,169 2,704,796 2,356,862
Goods 8,611 9,303 9,361
Goods in process 1,622 1,288 978
Half-finished goods
Raw materials 1,598 1,166 1,454
Component
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