LG 2001 Annual Report Download - page 73

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LG Electronics Inc. The
43
rd Annual Report
Notes to Financial Statements
for the years ended December 31, 2001 and 2000
13. Accrued Severance Benefits
Accrued severance benefits as of December 31, 2001 and 2000 are as follows:
Millions of Won
2001 2000
Beginning balance 551,237 434,842
Severance payments (148,131) (85,046)
Transfer-out to the CRT joint venture (69,415) -
Transfer-in by merger - 66,263
Transfer-in from affiliated companies 3,448 238
Provisions 142,817 128,943
Conversion to severance insurance deposit - 5,997
479,956 551,237
Contribution to National Pension Fund (27,214) (39,196)
Severance insurance deposits (297,525) (330,830)
155,217 181,211
On December 31, 2001 and 2000, the severance benefits are funded approximately 62% and 60%,
respectively, 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.
14. Commitments and Contingencies:
On December 31, 2001, the Company provided several notes and checks to financial institutions as
collateral in relation to various borrowings and guarantees of indebtedness.
On December 31, 2001, the Company has entered into bank overdraft facility agreements with various
banks amounting to 320,200 million.
On December 31, 2001, the outstanding balance of export trade accounts receivable sold at discount to
various financial institutions with recourse is 2,332,362 million.
On December 31, 2001, the Company has entered into factoring agreements for domestic trade
accounts receivable with Hana Bank and Shinhan Bank. However, in relation to the agreements, at
December 31, 2001, there is no outstanding balance of factored accounts receivable.
On December 31, 2001, the Company was a party to various technical assistance agreements with
various foreign companies for the manufacture of certain product lines.
On December 31, 2001, the Company has entered into sales contracts with several companies, which
comprise approximately 20,033 million of sales to LG TeleCom, Ltd., 10,920 million of sales to Korea
Telecom Corp., 1,257 million of sales to SK Telecom Co., and 29,956 million of sales to Hanaro