Story of a Big Player from Gangnam

Jong-Suk Park continued to talk to Gun-Ho, “You don’t know, bro. There are several people in the production department among mid-level managers who graduated from Korea University of Technology and Education. Also, my wife firmly believes that I will be accepted to transfer to that university. I don’t want to see my wife being disappointed. I would be so embarrassed.”

“You are not like everyone. You are talented in the field, and you have extensive hands-on work experience specifically in the very industry. Even the world-renowned engineer—Mr. Sakata Ikuzo—spoke highly about your competency.”

“That’s not enough, bro. I didn’t care about my academic background when I worked at the small factories in Pocheon City and Yangju City. But, here is different. We have more than 500 workers. It is a must to have at least a four-year college degree in my position. Whenever we have a visit from potential client companies, they all ask about what major the plant manager studied in college.”

“Hmm, really?

“When I told them that I didn’t go to college, they sneered. Well, that’s how I felt.”

“You are being too sensitive.”

“Also, my wife has a high expectation on this too. I feel pressured enormously at work and at home.”

“You are suffering unnecessarily for a trivial matter. Well, I became free from those worries when I graduated from Zhejiang University in China. If I stopped studying after graduating from that cyber college, I might have been wasting my time worrying about what others would think of me because of my academic background.”

“That’s why you married the woman who graduated from the top university in the nation—Seoul National University.”

“Haha. Is that why I married her?”

“I should have studied harder for TOEIC. If I scored even a few points more, I wouldn’t worry this much. Sh*t! I want to go back and relive my life again. I swear that I will study hard.”

“Don’t worry about it. I’m sure you will do great tomorrow with the interview.”

“Well, bro, I gotta go.”

Jong-Suk turned around and started walking toward Production Site B after passing the door. He looked obviously down.

While watching Jong-Suk leaving the room, Gun-Ho suddenly felt nervous as well.

“What if his application is turned down as he is worried? He will be so disappointed that he won’t be able to focus on his work. Because of that stupid academic degree, a competent young engineer is suffering greatly.”

In the afternoon, Gun-Ho went to Dyeon Korea. After lunch, they had an executive meeting. The meeting was for the executive officers only, but that day, Manager Hee-Yeol Yoo joined the meeting because they would talk about the yearly profit and loss report and the production plan for this year. Vice President Adam Castler, Director Kim, Director Yoon, the internal auditor, Manager Yoo, Accounting Manager Myeong-Sook Jo, and Interpreter Myeong-Joon Chae attended the meeting.

Manager Myeong-Sook Jo prepared the presentation on last year’s annual profit and loss report. Knowing that Gun-Ho preferred to see numbers and data on a paper rather than through a PowerPoint presentation, Manager Jo prepared handouts and distributed them to the meeting attendees.

Director Kim teased her, “Ms. Manager Jo, don’t feel nervous, okay?”

“Yes, sir.”

Gun-Ho, who was sitting in the middle, said, “Please begin.”

Manager Jo started her report on last year’s profit and loss.

“Please look at page one of the handout in front of you. As it indicates, Dyeon Korea achieved a sales revenue of 52.8 billion won last year. Our start, in the beginning, was not strong, but our sales revenue was dramatically increased later in the year as GH Mobile’s sales significantly increased, and also as we received new product orders from A Electronics’ vendor companies. We made way more than we anticipated last year.”

“Hmm.”

“Our cost of sales was 37 billion won, and that makes our cost of sales to revenue ratio 70%.”

Manager Jo then looked at Gun-Ho’s face.

“Please go on,” Gun-Ho said.

“The general administrative expenses are 4.2 billion won, and the operating profit is 11.6 billion won. We also made a non-operating income of 20 million won. Our net profit before tax is 11.6 billion won.”

“Do these numbers reflect the 100% bonus that we promised to our employees?”

“Yes, sir. I included the bonus in calculating these numbers. The employees who joined our company less than a year ago are excluded for the bonus though.”

“Hmm, I see. Did you separately list our R&D expenses?”

“Yes, I did, sir. It’s listed under the development cost.”

Gun-Ho turned to the internal auditor and said, “When we make B/C (Balance Sheet), can we list our R&D expenses under assets?”

“Well, it’s not common, but it’s not unseen either. Some biopharma companies do that, but it could become a problem.”

Because of Mr. Adam Castler, whenever someone said something during the meeting, they had to give Interpreter Chae the time to interpret for Mr. Adam Castler, and that bored Gun-Ho. Gun-Ho thought that he would better finish the meeting as soon as possible. In order to do so, he decided to ask questions about things that he wanted to know, instead of just sitting there and listening to the presentation passively.

“After paying the corporate tax, what would be our net earnings?”

The internal auditor answered that question before Manager Jo could, “It would be about 9 billion won, sir.”

“9 billion won… Mr. Vice President Adam Castler!”

Mr. Adam Castler was frightened when his name was called unexpectedly. He was sitting on the chair comfortably. He straightened up his posture and looked at Gun-Ho.

“Our net profit will be 9 billion won. We will put it back to the company and increase the capital. We’ve already talked about this during the last board meeting.”

“I’m not in the position to give an approval or agreement on it, sir. Even though it was previously discussed in the board meeting, I will have to hear what the head office would say about it.”

“Okay. Tell them that we want to reinvest that 9 billion won in the company.”

“Yes, sir.”

“As we put 9 billion won back to the company, we will assume that Lymondell Dyeon contributed 4.5 billion won, and we contributed the other half—4.5 billion won. Also, since we would list the company building under Dyeon Korea as our investment in-kind, we will take out 3 billion won in cash, which is the fair value of the building. GH Mobile will use that money to pay the bank for its debt.”

“That means the Korean co-venturer put 3 billion won in investment in-kind and 1.5 billion in cash, right?”

“That’s correct.”

“Understood. I will let the head office know.”

“We have Director Yoon here, who was in charge of the construction when we built this building. It actually cost us a bit more than 3 billion won, but we asked the appraisers to try not to give us more than 3 billion won of value.”

“Haha, thank you.”

Gun-Ho looked at Director Yoon and asked, “Did we notarize the appraisal?”

Interpreter Chae responded this time, “I’m sorry, sir. We have the appraisal, but I didn’t have a chance to translate it yet. I will finish it and get it notarized within this week.”

“Okay. Do it as quickly as you could.”

Gun-Ho said to the internal auditor, “Once we receive the external audit document from the CPA firm in March, please pay the corporate tax right away.”

“Yes, sir.”

“And, take the document about the capital increase to the certified legal consultant’s office, and take out 3 billion won, which corresponds to the construction cost of our company building, and then send it to GH Mobile. I already instructed GH Mobile’s President Song to pay the bank for its debt once he receives 3 billion won from Dyeon Korea.”

“Understood, sir.”