LG 2001 Annual Report Download - page 82

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ยป82
LG Electronics Inc. The
43
rd Annual Report
Notes to Financial Statements
for the years ended December 31, 2001 and 2000
18. Capital Adjustments
As of December 31, 2001 and 2000, capital adjustments are as follows:
Millions of Won
2001 2000
Treasury stock (494,235) (875,604)
Loss on valuation of investment securities (74,682) (175,462)
Loss on valuation of derivative financial instruments (Note 14) (2,532) (1,091)
(571,449) (1,052,157)
In 2000, the Company purchased its own stocks amounting to 40,835,200 shares of common stock and
1,508,876 shares of preferred stock mainly in relation to specified money trust agreements and the stock
repurchase request option executed by shareholders who objected to the merger with LG Information &
Communications, Ltd. As of December 31, 2001, the Company retains treasury stocks amounting to
17,126,361 shares of common stock and 16 shares of preferred stock. The Company has intention to sell
the treasury stock in the future.
19. Income Taxes
Income tax expenses for the years ended December 31, 2001 and 2000 comprise the following:
Millions of Won
2001 2000
Current income taxes 173,650 196,960
Deferred income taxes (107,232) 29,581
66,418 226,541
In 2001 and 2000, the statutory income tax rate applicable to the Company, including resident tax
surcharges, is approximately 30.8%. Effective in 2002, the statutory income tax rate applicable to the
Company will be reduced to 29.7% from 30.8%, and 29.7% is applied to calculate deferred income tax in
2001. The following table reconciles the expected amount of income tax expense based on statutory rates to
the actual amount of taxes recorded by the Company :