Samsung 2011 Annual Report Download - page 39

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E) The movement in the fair value of plan assets for the years ended December 31, 2011 and 2010, are as follows :
(In millions of Korean Won)
2011 2010
Balance at the beginning of the year ￦1,797,706 ￦1,635,056
Foreign exchange (92) (4,707)
Expected return on plan assets 93,672 79,219
Actuarial gains and losses (13,121) (12,376)
Contributions by the employer 555,815 422,567
Benefits paid (72,179) (287,535)
Others 61,351 (34,518)
Balance at the end of the year ￦2,423,152 ￦1,797,706
Expected contributions to retirement benefit plans for the year ending December 31, 2012, are ￦ 519,709 million.
F) The principal actuarial assumptions as of December 31, 2011 and 2010, and January 1, 2010, were as follows :
(In %)
2011 2010
Domestic Foreign Domestic Foreign
Discount rate 5.3 ~ 5.8 4.9 ~ 7.5 6.3 ~ 7.3 6.0 ~ 7.5
Expected return on plan assets 4.0 ~ 4.5 4.9 ~ 5.0 5.0 ~ 5.3 5.0 ~ 5.3
Future salary increases (including inflation) 5.0 ~ 9.9 2.6 ~ 5.6 5.3 ~ 9.4 5.1 ~ 6.0
The expected return on plan assets is based on the expected return multiplied with the respective percentage weight of the market-related value of plan
assets. The expected return is defined on a uniform basis, reflecting long-term historical returns, current market conditions and strategic asset allocation.
G) The actual returns on plan assets for the years ended December 31, 2011 and 2010, are as follows :
(In millions of Korean Won)
2011 2010
The actual return on plan assets ￦80,551 ￦66,843
H) Plan assets as of December 31, 2011 and 2010, are comprised as follows :
(In millions of Korean Won)
2011 2010
Equity instruments ￦68,375 ￦2,935
Debt instruments 2,325,392 1,761,884
Other 29,385 32,887
￦2,423,152 ￦1,797,706
I) Adjustments for the differences between initial assumptions and actual figures as of December 31, 2011 and 2010, and January 1, 2010, are as
follows :
(In millions of Korean Won)
2011 2010 2010.1.1
Present value of defined benefit liability ￦3,530,340 ￦2,648,632 ￦2,372,950
Fair value of plan assets (2,423,152) (1,797,706) (1,635,056)
Deficit (Surplus) of the funded plans 1,107,188 850,926 737,894
Defined benefit liability adjustments 207,106 80,889 74,387
Defined benefit asset adjustments (13,121) (12,376) (7,900)
16. Provisions
The changes in the main liability provisions during the 12 month period ended December 31, 2011, are as follows :
(In millions of Korean Won)
Warranty (A) Royalty
expenses (B)
Long-term
incentives (C) Others (D) Total
January 1, 2011 ￦1,633,506 ￦989,057 ￦590,712 ￦-￦3,213,275
Increase 1,690,156 1,144,448 175,716 96,245 3,106,565
Decrease (1,609,786) (535,484) (255,527) - (2,400,797)
Other¹ (33,342) (7,942) - - (41,284)
December 31, 2011 ￦1,680,534 ￦1,590,079 ￦510,901 ￦96,245 ￦3,877,759
¹ Others include amounts from changes in foreign currency exchange rates.
A) The Company accrues warranty reserves for estimated costs of future service, repairs and recalls, based on historical experience and terms of
warranty programs (which have terms from 1 to 4 years).
B) The Company makes provisions for estimated royalty expenses related to technical assistance agreements that have not been settled. The
timing of payment depends on the settlement of agreement.
C) The Company has a long-term incentive plans for its executives based on a three-year management performance criteria and has made a
provision for the estimated incentive cost for the accrued period.
D) The Company makes provisions for estimated litigation expenses related to lawsuits and legal disputes. The timing of payment depends on the
progress of the lawsuits and legal disputes.
17. Commitments and Contingencies
A) Guarantees
(In millions of Korean Won)
2011 2010
Guarantees of debt for housing rental¹ ￦153,989 ￦171,674
¹ The guarantees of debt for housing rental relate to guarantees provided by the Company to landlords for housing for expatriate employees.
B) Lease
As of December 31, 2011, details of lease contracts held by the Company are as follows :
Finance leases
The Company leases certain property, plant and equipment under various finance lease arrangements. Assets recorded under finance lease agreements are
included in property, plant and equipment with a net book value of ￦ 141,875 million (2010 : ￦ 109,838 million). Depreciation expense for the finance lease
assets amounted to ￦ 16,430 million (2010 : ￦ 6,817 million) for the year ended December 31, 2011.
The minimum lease payments under finance lease agreements and their present value as of December 31, 2011 and 2010, are as follows :
(In millions of Korean Won)
2011 2010
Minimum Lease payments Present values Minimum Lease payments Present values
Within one year ￦25,968 ￦13,936 ￦19,679 ￦9,591
From one year to five years 81,970 49,486 73,862 40,356
More than five years 131,263 73,432 118,567 57,154
Total ￦239,201 ￦136,854 ￦212,108 ￦107,101
Present value adjustment (102,347) - (105,007) -
Finance lease payables 136,854 - 107,101 -