Samsung 2012 Annual Report Download - page 47

(B) Lease
As of December 31, 2012, details of lease contracts held by the Company are as follows:
Finance leases
The Company leases certain property, plant and equipment under various nance lease arrangements. Assets recorded under nance lease agreements are included in
property, plant and equipment with a net book value of ￦121,402 million (2011: ￦141,875 million). Depreciation expense for the nance lease assets amounted to ￦9,650
million for the year ended December 31, 2012 (2011:￦16,430 million).
The minimum lease payments under nance lease agreements and their present value as of December 31, 2012 and 2011 are as follows:
(In millions of Korean won)
2012 2011
Minimum Lease
payments
Present
values
Minimum Lease
payments
Present
values
Within one year ￦21,399 ￦13,293 ￦25,968 ￦13,936
From one year to ve years 70,310 40,216 81,970 49,486
More than ve years 108,865 61,555 131,263 73,432
Total ￦200,574 ￦115,064 ￦239,201 ￦136,854
Present value adjustment (85,510) (102,347)
Finance lease payables ￦115,064 ￦136,854
(C) Litigation
(1) Based on the agreement entered on August 24, 1999 with respect to Samsung Motor Inc.’s (“SMI”) bankruptcy proceedings, Samsung Motor Inc.’s creditors (“the
Creditors”) led a civil action against Mr. Kun Hee Lee, former chairman of the Company, and 28 Samsung Group aliates including the Company under joint and several
liability for failing to comply with such agreement. Under the suit, the Creditors have sought ￦2,450 billion (approximately $2.12 billion) for loss of principal on loans
extended to SMI, a separate amount for breach of the agreement, and an amount for default interest.
SLI completed its Initial Public Oering (“IPO”) on May 7, 2010. After disposing 2,277,787 shares and paying the principal balance owed to the Creditors, ￦878 billion
(approximately $0.76 billion) was deposited in to an escrow account. That remaining balance was to be used to pay the Creditors interest due to the delay in the SLI IPO.
On January 11, 2011, the Seoul High Court ordered Samsung Group aliates to pay ￦600 billion (approximately $0.52 billion) to the Creditors and pay 5% annual interest
for the period between May 8, 2010 and January 11, 2011, and pay 20% annual interest for the period after January 11, 2011 until the amounts owed to the Creditors are
paid. In accordance with the Seoul High Court order, ￦620.4 billion (which includes penalties and interest owed) was paid to the Creditors from the funds held in escrow
during January 2011. On February 7, 2011, the Samsung Group aliates and the Creditors appealed the Seoul High Court’ ruling to the Korean Supreme Court and the
appeal is currently in progress. The amount of loss related to this matter cannot be reasonably determined. Accordingly, the Company has concluded that no provision
for loss should be reected in the Company’s consolidated nancial statements at December 31, 2012.
(2) The litigation with Apple Inc. in multiple regions including the U.S.A. and Germany is ongoing as of the reporting date. Regarding the ongoing lawsuit in the U.S.A, on
August 24, 2012, the jury determined that the Company partially infringed Apple’s design and utility patent. The rst appeal is still ongoing and the nal conclusion and
the eect of the patent lawsuits with Apple are uncertain as of the reporting.
(3) In addition, during the normal course of business with numerous companies, the Company has been involved in various claims, disputes, and investigations conducted
by regulatory bodies. Although, the outow of resources and timing of these matters are uncertain, the Company believes the outcome will not have a material impact on
the nancial condition of the Company.
(D) Other commitments
As of December 31, 2012, the Company has a trade nancing agreement, trade notes receivable discounting facilities, and loan facilities with accounts receivable pledged as
collateral with 12 nancial institutions, including Woori bank, with a combined limit of up to ￦11,406,806 million. In addition, the Company has a trade nancing agreement
with 21 nancial institutions, including Kookmin bank, for up to USD 5,134 million and ￦62,140 million, and has loan facilities with accounts receivable pledged as collateral
with 7 nancial institutions, including Kookmin bank, for up to ￦789,100 million.
Samsung Display has a facility loan agreement with 6 nancial institutions including SMBC for up to ￦400,000 million and JPY 80,000 million, and has overdraft agreement
with Woori bank for up to ￦10,000 million
Two foreign subsidiaries including SEA have a contract for issuing ABS (Asset Backed Securities) backed by accounts receivable with BTMU and other nancial institutions
9190
for up to USD 1,361 million and other 5 subsidiaries including SSL have a credit facility agreement with Bank of China and other nancial institutions for up to CNY 1,540
million and EUR 30 million.
20. Share Capital and Premium
The Company’s number of authorized shares is 500,000,000 shares. The Company has issued 147,299,337 shares of common stock and 22,833,427 shares of preferred
stock as of December 31, 2012, excluding retired shares. Due to retirement of shares, the total par value of the shares issued is ￦850,664 million (common stock ￦736,497
million, preferred stock ￦114,167 million), which does not agree with paid-in capital of ￦897,514 million.
The changes in the number of shares outstanding as of December 31, 2012 and 2011, are as follows:
(In millions of Korean won)
Number of shares of
Preferred stock (*1) Common stock (*2) Share capital Share premium Total
Balance at December 31, 2010 19,853,734 129,843,077 ￦897,514 ￦4,403,893 ￦5,301,407
Shares issued - 485,650 - - -
Disposal of treasury stock - 57,996 - - -
Balance at December 31, 2011 19,853,734 130,386,723 ￦897,514 ￦4,403,893 ￦5,301,407
Shares issued - 191,309 - - -
Disposal of treasury stock - 269,867 - - -
Balance at December 31, 2012 19,853,734 130,847,899 ￦￦897,514 ￦4,403,893 ￦5,301,407
(*1) Non-cumulative, non-voting preferred stock with par value of￦5,000 per share that 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.
(*2) Common stock with par value of￦5,000 per share.
Issuance of shares
SEC is 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 nancing with nancial institutions, and strategic alliance.
SEC has issued global depositary receipts (“GDR”) to overseas capital markets. The number of outstanding GDR as of December 31, 2012 and 2011, are as follows:
Outstanding GDR
2012 2011
Non-voting Preferred Stock Common Stock Non-voting Preferred Stock Common Stock
- Share of Stock 3,323,283 7,569,675 3,092,581 7,316,976
- Share of GDR 6,646,566 15,139,350 6,185,162 14,633,952
21. Retained Earnings
Retained earnings as of December 31, 2012 and 2011, consist of the following:
(In millions of Korean won)
2012 2011
Appropriated ￦87,915,275 ￦78,713,318
Unappropriated 32,070,414 18,909,554
Total ￦119,985,689 ￦97,622,872