Samsung 1999 Annual Report Download - page 40

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REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Directors
Samsung Electronics Co., Ltd.
We have audited the accompanying balance sheet of Samsung Electronics Co., Ltd. as of December 31, 1999, and the related
statements of income, appropriations of retained earnings and cash flows for the year then ended, 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 audit.
We conducted our audit 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 accounting principles used and significant estimates made by management,
as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the
Company as of December 31, 1999, and the results of its operations, the changes in its retained earnings and its cash flows for
the year then ended in accordance with financial accounting standards generally accepted in the Republic of Korea.
The following matters do not affect our audit opinion but will be helpful to the readers in reasonable decision making.
As discussed in Note 8 to the financial statements, effective April 1, 1999, the Company revalued a substantial portion of its
property, plant and equipment by 2,056,184 million in accordance with the Asset Revaluation Law. As a result, the Company
recognized a revaluation surplus of 2,056,184 million, net of revaluation tax in the amount of 53,383 million, and recorded an
offsetting entry of 811,148 million to deferred foreign exchange losses. Additional depreciation expense of 1,046,779 million
related to the revaluation is recorded for the year ended December 31, 1999.
As discussed in Note 19 to the financial statements, the Company had sales of 631,671 million and US$10,678,976,000 to
subsidiaries and affiliated companies within the Samsung Group during 1999. Related accounts receivable as of December 31,
1999 amounted to 544,982 million and US$156,532,000.
In addition, on July 20, 1999, Pan-Pacific Industrial Investments PLC (“PP”), a shareholder of Samsung Motors Inc., exercised its
right to sell certain shares of Samsung Motors Inc. to the Company in accordance with the joint-venture agreement established
under the court receivership application of Samsung Motors Inc. As a result of this exercise, the Company acquired 30,465,951
shares of Samsung Motors Inc. and recognized an evaluation loss of 266,258 million.
As discussed in Note 13 of the financial statements, the operations of the Company have been significantly affected, and may
continue to be affected for the foreseeable future, by the general adverse economic conditions in the Republic of Korea and in
the Asia Pacific region. The ultimate effect of these significant uncertainties on 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 amounts expressed in U.S. dollars, provided solely for the convenience of the reader, have been translated on the basis set
forth in Note 3 to the accompanying financial statements.
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 standards, procedures and practices used to audit such financial statements are those generally accepted and applied
in the Republic of Korea.
Seoul, Korea
February 21, 2000
40001010010100101
Samil Accounting Corporation is the Korean member firm of the worldwide PricewaterhouseCoopers organization.