LG 2007 Annual Report Download - page 35

REPORT OF INDEPENDENT AUDITORS
64 + 65
TO THE BOARD OF DIRECTORS
AND SHAREHOLDERS OF LG ELECTRONICS INC.
We have audited the accompanying non-consolidated balance
sheets of LG Electronics Inc. (the “Company”) as of December
31, 2007 and 2006, and the related non-consolidated state-
ments of income, appropriations of retained earnings, and cash
flows for the years ended December 31, 2007 and 2006, and
the statement of changes in shareholders’ equity for the year
ended December 31, 2007, expressed in Korean won. These
financial statements are the responsibility of the Company’
s management. Our responsibility is to express an opinion on
these financial statements based on our audits. We did not
audit the financial statements of certain subsidiaries, the in-
vestments in which are reflected in the accompanying non-
consolidated financial statements using the equity method of
accounting. The investments in those subsidiaries represent
17.7% and 11.7% of the Company’s total assets as of December
31, 2007 and 2006, and the equity in their net income represents
48.2% and 46.4% of the Company’s income before income tax
for the years then ended. These financial statements were
audited by other auditors whose reports have been furnished
for us, and our opinion, insofar as it relates to the amounts
included for the subsidiaries, is based solely on the reports of
the other auditors.
We conducted our audits in accordance with auditing standards
generally accepted in the Republic of Korea. Those standards
require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the ac-
counting principles used and significant estimates made by
management, as well as evaluating the overall financial state-
ment presentation. We believe that our audits and the reports
of other auditors provide a reasonable basis for our opinion.
In our opinion, based on our audit and the reports of other audi-
tors, the non-consolidated financial statements referred to above
present fairly, in all material respects, the financial position of
LG Electronics Inc. as of December 31, 2007 and 2006, and the
results of its operations, the changes in its retained earnings
and its cash flows for the years ended December 31, 2007 and
2006, and its changes in shareholders’ equity for the year end-
ed December 31, 2007, in conformity with accounting principles
generally accepted in the Republic of Korea. Without qualifying
our opinion, we draw your attention to following matter.
The Company adopted the Korea Accounting Institute Opinion
06-2, Deferred Income taxes on Investments in Subsidiaries,
Associates and Interests in Joint Ventures, and changed its
method of accounting for income taxes on temporary differences
in relation to investments in subsidiaries and equity method
investees to comply with the new requirement. Accordingly,
the prior year financial statements, presented herein for com-
parative purposes, have been restated to reflect the changes to
conform with SFKAS No. 1.
Accounting principles and auditing standards and their ap-
plication in practice vary among countries. The accompanying
non-consolidated financial statements are not intended to
present the financial position, results of operations, changes
in shareholders’ equity and cash flows in conformity with ac-
counting principles and practices generally accepted in countries
and jurisdictions other than the Republic of Korea. In addition,
the procedures and practices used in the Republic of Korea to
audit such financial statements may differ from those generally
accepted and applied in other countries. Accordingly, this report
and the accompanying financial statements are for use by those
who are informed about Korean accounting principles or auditing
standards and their application in practice.
Seoul, Korea
February 26, 2008
This report is effective as of February 26, 2008, the audit report date. Certain subsequent events or circumstances,
which may occur between the audit report date and the time of reading this report, could have a material impact on
the accompanying non-consolidated nancial statements and notes thereto. Accordingly, the readers of the audit
report should understand that there is a possibility that the above audit report may have to be revised to reect the
impact of such subsequent events or circumstances, if any.
Samil PricewaterhouseCoopers is the Korean member firm of PricewaterhouseCoopers. PricewaterhouseCoopers refers to the network of member firms of Pricewaterhouse
Coopers International Limited, each of which is a separate and independent legal entity.
65 REPORT OF INDEPENDENT AUDITORS
66 NON-CONSOLIDATED BALANCE SHEETS
68 NON-CONSOLIDATED STATEMENTS OF INCOME
69 NON-CONSOLIDATED STATEMENTS OF APPROPRIATIONS OF RETAINED EARNINGS
70 NON-CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
71 NON-CONSOLIDATED STATEMENTS OF CASH FLOWS
FINANCIAL STATEMENTS