Samsung 2000 Annual Report Download - page 48

We have audited the accompanying balance sheets of Samsung Electronics Co., Ltd. as of December 31, 2000 and 1999, and the related
statements of income, appropriations of retained earnings and cash flows for the years 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 audits.
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 accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide 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, 2000 and 1999, and the results of its operations, the changes in its retained earnings and its cash flows for the years 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 21 to the financial statements, the Company had sales of 1,327,597 million and US$13,533,592,000 to subsidiaries and
affiliated companies within the Samsung Group during the year ended December 31, 2000. Related accounts receivable as of December 31,
2000 amounted to 949,166 million and US$162,185,000.
As discussed in Note 14 to the financial statements, in June 1999, Samsung Motors Inc. (“SMI”), an affiliate of the Company, filed a petition for
court receivership. In connection with this petition, the Company and 30 Samsung Group affiliates (the “Affiliates”) entered into an agreement
with the institutional creditors (the “Creditors”) of SMI in August, 1999. In accordance with this agreement, the Company and the Affiliates
agreed to sell 3,500,000 shares of Samsung Life Insurance Co., Ltd. stock and transfer the proceeds to the Creditors in connection with the
petition for court receivership of SMI by December 31, 2000. In the event that the sale proceeds fall short of 2,450,000 million, the Company
and the Affiliates have agreed to compensate the Creditors for the shortfall by other means, including participation in any equity offering or
subordinated debentures issued by the Creditors. Any proceeds in excess of 2,450,000 million are to be distributed to the Company and the
Affiliates. As of December 31, 2000, the shares in Samsung Life Insurance Co., Ltd. were not sold and certain shareholders of the Company
have filed an injunction against the directors of the Company, alleging that the directors were acting in contravention to the law when entering
into this agreement. The ultimate effect of these matters on the financial position of the Company as of the balance sheet date cannot
reasonably be determined, and accordingly, no adjustments have been made in the accompanying financial statements in relation to these
matters.
As discussed in Note 14 to the financial statements, the operations of the Company have been significantly affected, and may continue to be
affected for the foreseeable future, by the generally 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 procedures
and practices utilized to audit such financial statements may differ from those generally accepted and applied in other countries and
jurisdictions. Accordingly, this report and the accompanying financial statements are not intended for use by those who are not informed
about Korean accounting principles or auditing standards and their application in practice.
Seoul, Korea
February 5, 2001
Report of Independent Accountants
To the Shareholders
and Board of Directors,
Samsung Electronics Co., Ltd.
48