LG 2000 Annual Report Download - page 65

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Millions of won 2000 1999
Beginning balance W 434,842 W 456,071
Severance payments (85,046) (135,293)
Transfer-in by merger 66,263 –
Transfer-in from affiliated companies 238 8,854
Provisions 128,943 99,300
Additional provisions –11,907
Conversion to severance insurance deposit 5,997 (5,997)
551,237 434,842
Contribution to National Pension Fund (39,196) (40,277)
Severance insurance deposits (330,830) (265,835)
W 181,211 W 128,730
At December 31, 2000 the severance benefits are funded approximately 60% through employees severance insurance plans with
Kyobo Life Insurance Co, Ltd. and other life insurance companies. The amounts funded under employees severance insurance plans
(severance insurance deposits) is presented as deduction from accrued severance benefits.
At December 31, 1999 the severance benefits are funded approximately 65% through group severance insurance plans and
employees severance insurance plans with Kyobo Life Insurance Co, Ltd. and other life insurance companies. The amounts funded
under group severance insurance plans are recorded as long-term financial instruments (Note 3) and the amounts funded under
employees severance insurance plans (severance insurance deposits) are presented as deduction from accrued severance benefits.
14. Commitments and Contingencies:
At December 31, 2000, the Company provided several notes and checks to financial institutions as collateral in relation to various
borrowings and guarantees of indebtedness.
At December 31, 2000, the Company has entered into bank overdraft facility agreements with various banks amounting to
W375,000 million.
At December 31, 2000, the outstanding balance of domestic trade notes receivable and export trade accounts receivable sold at
discount to various financial institutions with recourse is W3,825,833 million.
At December 31, 2000, the Company has entered into factoring agreements with LG Capital Co., Ltd. and Shinhan Bank. In relation
to the agreements, at December 31, 2000, the outstanding balance of factored accounts receivable is W 114,416 million.
At December 31, 2000, the Company was a party to various technical assistance agreements with various foreign companies for the
manufacture of certain product lines.
At December 31, 2000, the Company has entered into sales contracts with several companies, which comprise approximately W
65,226 million of sales to LG Telecom, Ltd., W 8,364 million of sales to Korea Telecom, W 41,773 million of sales to SK Telecom
Co., and W 67,278 million of sales to Hanaro Telecom, Inc., and others.
At December 31, 2000 and 1999, the Company was contingently liable for guarantees approximating W1,594,887 million and
1,492,126 million, respectively, on indebtedness of its subsidiaries and affiliates as follows :
Millions of won 2000 1999
Domestic companies LG Telecom, Ltd. W 125,970 W 114,540
Other 26,465 31,738
152,435 146,278
Overseas companies LG Electronics Wales Ltd. 252,225 264,759
PT LG Electronics Display Device Indonesia 130,829 127,630
LG Electronics Alabama Inc. 205,331 166,083
LG Electronics U.S.A., Inc. 144,865 116,831
LG Electronics North of England Ltd. 40,847 80,873
Shuguang LG Electronics Co., Ltd. 78,605 74,577
Other 589,750 515,095
1,442,452 1,345,848
Total W 1,594,887 W 1,492,126
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