Samsung 2008 Annual Report Download - page 86

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CONTINUED
In addition, SEMES and two other domestic subsidiaries have credit purchase facility agreements of up to ￦117,000 million with
Korean banks, including Hana Bank, and S-LCD and two other domestic subsidiaries have general term loan facilities of up to
￦170,000 million with Korean banks, including Kookmin Bank.
As of December 31, 2008, SEC’s domestic subsidiaries have provided a blank note and two notes amounting to ￦30,000 million, to
financial institutions as collaterals for bank borrowings and for the fulfillment of certain contracts, which do not have a direct adverse
effect on the operations or financial position of the Company.
A domestic subsidiary of the Company, Samsung Card transferred certain eligible financial assets in accordance with the Act on Asset
Backed Securitization of the Republic of Korea to several financial institutions (“FIs”). The transfer is with recourse and was completed
through a Special Purpose Entity (“SPE”) issued securities. In the event of non-performance of those transferred financial assets within
certain measurement criteria noted in the transfer agreement, the Samsung Card is obliged to redeem the issued securities.
A transfer of the financial assets has been recognized as a sale, and accordingly has been derecognized from the financial statements.
Total financial assets transferred amounted to ￦1,575,016 million for the year ended December 31, 2008 (2007: ￦852,750 million). As of
December 31, 2008, ￦3,795,418 million (2007: ￦4,037,885 million) remain uncollected and outstanding with the financial institutions.
(J )
(K)
20. CAPITAL STOCK
Under its Articles of Incorporation, SEC is authorized to issue 500 million shares of capital stock with a par value of ￦5,000 per share, of
which 100 million shares are cumulative, participating preferred stock that are non-voting and entitled to a minimum cash dividend at 9% of
par value. In addition, SEC is authorized to issue to investors, other than current shareholders, convertible debentures and debentures with
warrants with face values up to ￦4,000 billion and ￦2,000 billion, respectively. The convertible debentures amounting to ￦3,000 billion and
￦1,000 billion are assigned to common stock and preferred stock, respectively. While the debentures with warrants amounting to ￦1,500
billion and ￦500 billion are assigned to common stock and preferred stock, respectively.
SEC is also authorized, subject to the Board of Directors’ approval, to issue shares of common or preferred stock to investors other than
current shareholders for issuance of depository receipts, general public subscription, urgent financing with financial institutions, and
strategic alliance.
SEC is authorized, subject to the Board of Directors’ approval, to retire treasury stock in accordance with applicable laws up to the
maximum amount of certain undistributed earnings. As of December 31, 2008, 8,310,000 shares of common stock and 1,060,000 shares
of non-voting preferred stock had been retired over three trenches, with the Board of Directors’ approval.
As of December 31, 2008, exclusive of retired stocks, 147,299,337 shares of common stock and 22,833,427 shares of preferred stock
have been issued. The preferred stock shares which are non-cumulative and non-voting, were all issued on or before February 28, 1997,
and are entitled to an additional cash dividend of 1% of par value over common stock.
The par value of capital stock differs from paid-in capital as the retirement of capital stock was recorded as a deduction from retained earnings.
SEC has issued global depositary receipts (“GDR”) to overseas capital markets. The number of outstanding GDR as of December 31, 2008
and 2007, are as follows:
Outstanding GDR
- Share of Stock 3,402,937 8,661,570 3,459,872 10,629,358
- Share of GDR 6,805,874 17,323,140 6,919,744 21,258,716
Non-voting Common Non-voting Common
Preferred Stock Stock Preferred Stock Stock
2008 2007