LG 2001 Annual Report Download - page 45

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LG Electronics Inc. The
43
rd Annual Report
Report of Independent Accountants
For the years ended December 31, 2001 and 2000
not related to the spun off businesses and a divested company, tentatively named LG Electronics Inc., to
engage in the electronics and information & communications businesses.
As discussed in Note 26 of the accompanying financial statements, pursuant to the resolution by the
board of directors on June 11, 2001, the Company established a joint venture (LG. Philips Displays Holding
B.V.) relating to its Cathode Ray Tubes ( CRT ) business with Koninklijke Philips Electronics N.V. on June 29,
2001. The Company transferred the assets and liabilities of the CRT business to LG. Philips Displays Korea
Co., Ltd., a subsidiary wholly owned by the joint venture, on June 30, 2001. As a result, the Company
recognized 1,358,760 million of gain on business transfer.
As discussed in Note 15 to the accompanying financial statements, pursuant to the resolution by the
board of directors on June 25, 2001, the Company redeemed 542,952 million (32,000,000 shares) of
redeemable preferred stock which were issued in December 2000.
As discussed in Notes 7 and 14 to the accompanying financial statements, on September 21, 2001, the
Company sold 4,563 thousand shares of its investment in Dacom Corporation for 80,993 million and
incurred a loss from disposal of investments amounting to 374,969 million.
Without qualifying our opinion, we draw attention to Note 14 of the financial statements which states
that the operations of the Company have been affected, and may continue to be affected for the foreseeable
future, by the general unstable economic conditions in the Republic of Korea and in the Asia Pacific region.
The ultimate effect of these uncertainties of the financial position of the Company as of the balance sheet
date cannot presently be determined and accordingly, no adjustments have been made in the
accompanying financial statements related to such uncertainties.
The accompanying financial statements are not intended to present the financial position, results of
operations and cash flows in accordance with accounting principles and practices generally accepted in
countries and jurisdictions other than the Republic of Korea. The procedures and practices utilized in the
Republic of Korea to audit such financial statements may differ from those generally accepted and applied in
other countries and jurisdictions. Accordingly, this report and the accompanying financial statements are not
intended for use by those who are not informed about Korean accounting principles or auditing standards
and their application in practice.
Seoul, Korea
January 28, 2002