LG 2003 Annual Report Download - page 88

Download and view the complete annual report

Please find page 88 of the 2003 LG annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 114

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114

88
Notes to Non-Consolidated Financial Statements
For the years ended December 31, 2003 and 2002
16. Accrued Severance Benefits
Changes in accrued severance benefits for the year ended December 31, 2003 and the nine-month period from
April 1, 2002 (spin-off date) to December 31, 2002 are as follows:
(in millions of Won)
2003 2002
Beginning balance ￦500,909 ￦483,591
Severance payments (87,879) (81,561)
Transfer-in (out) from (to) affiliated companies, net 6,582 (4,802)
Provisions 135,750 103,681
Ending balance 555,362 500,909
Severance insurance deposits (343,217) (315,876)
Contributions to the National Pension Fund (19,406) (22,073)
￦192,739 ￦162,960
As of April 1, 2002 (date of spin-off), ￦483,591 million of accrued severance benefits for all employees of the
Company was transferred from LG Electronics Investment Ltd.
As of December 31, 2003 and 2002, the severance benefits are funded at approximately 61.8 % and 63.1 %,
respectively, through employee severance insurance plans with Kyobo Life Insurance Co., Ltd. and other life
insurance companies. The amounts funded under employee severance insurance plans (severance insurance
deposits) are presented as a deduction from accrued severance benefits.
17. Commitments and Contingencies
As of December 31, 2003, the Company provided several notes and checks to financial institutions as collateral
in relation to various borrowings and guarantees of indebtedness.
As of December 31, 2003, the Company was a party to various technical assistance agreements with various
foreign companies for the manufacture of certain product lines.
As of December 31, 2003, the Company has entered into bank overdraft facility agreements with various banks
amounting to ￦495,500 million.
As of December 31, 2003, the outstanding balance of export trade accounts receivable sold at a discount to
various financial institutions with recourse amounted to ￦3,419,879 million.
As of December 31, 2003, the Company has entered into factoring agreements for domestic trade accounts