Samsung 2012 Annual Report Download - page 56

(C) Other related parties
Samsung Everland and other companies are dened as related parties for the Company as of December 31, 2012
Transactions with other related parties for the years ended December 31, 2012 and 2011, and the related receivables and payables as of December 31, 2012 and
2011, are as follows:
(In millions of Korean won)
2012 2011
Transactions
Sales ￦109,228 ￦85,907
Purchases 752,170 655,062
Receivables and Payables
Receivables 189,840 244,411
Payables 179,646 172,872
(D) Key management compensation
Key management includes directors (executive and non-executive) and members of the Executive Committee. The compensation paid or payable to key
management for employee services is shown below:
(In millions of Korean won)
2012 2011
Salaries and other short-term benets ￦10,062 ￦15,808
Termination benets 530 696
Other long-term benets 5,865 5,096
35. Significant Changes of Non-Controlling Interests
(A) Acquisition of non-controlling interests in 2012 are as follows:
(In millions of Korean won)
S-LCD Samsung Japan Samsung Asia Private
Date of acquisition January 19, 2012 April 27, 2012 April 27, 2012
Acquired percentage of non-controlling interests 50% 49% 30%
Ownership share after transaction 100% 100% 100%
Consideration paid to non-controlling interests 1,067,082 159,278 19,452
Carrying amount of non-controlling interests acquired 1,764,927 60,667 13,313
Capital Surplus (*) 697,845 (98,611) (6,139)
(*) The dierence between the carrying amount of non-controlling interests at the time of transaction and consideration paid has been accounted for as capital
surplus which belongs to the owner of consolidated company.
(B) In 2012 Samsung Display Corporation, the subsidiary, merged other subsidiaries, Samsung Mobile Display and S-LCD. This transaction resulted in the
reduced percentage of ownership of the Company of Samsung Display from 100% to 84.8% and increased non-controlling interests by ￦1,654,645
million, which was recognized as the decrease of the equity to the owner of consolidated company (Refer to Note 37 for further details).
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36. Business Combinations
(A) Samsung LED
The Company acquired Samsung LED with a closing date of April 1, 2012 to
improve shareholder value through the enhancement of business eciency
and maximization of business synergies. The approval of the Board of Directors
of the Company replaces shareholders’ meeting approval of the acquisition, as
the acquisition of Samsung LED is a small and simple merger as dened in the
commercial law.
(1) Overview of the acquired company
Name of the acquired
company Samsung LED
Headquarters
location Giheung-gu, Yongin-si, Gyeonggi-do
Representative
director Nam-seong Cho
Classication of the
acquired company Unlisted company
Former relationship
with the Company Associates
(2) Terms of the business combination
The shareholders of Samsung LED received 0.0134934 shares of the
Company’s common stock for each share of Samsung LED common stock
owned on the closing date. The Company transferred its treasury stock to the
shareholders of Samsung LED, instead of issuing new stock.
(3) Purchase price allocation
The following table summarizes the consideration paid for Samsung LED
and the amounts of the assets acquired and liabilities assumed as of the
acquisition date.
(In millions of Korean won)
Classication Amount
I. Consideration transferred
Fair value of equity interest held before the business
combination (*1) 344,082
Fair value of additional consideration transferred (*2) 344,082
Total 688,164
II. Identiable assets and liabilities
Cash and cash equivalents 54,454
Trade and other receivables 304,552
Inventories 146,141
Property, plant, and equipment 699,803
Intangible assets 59,512
Investments in Subsidiary, Associates and Joint
Ventures 68,839
Deferred income tax assets 62,733
Other nancial assets 47,370
Trade and other payables 157,571
Borrowings 584,338
Dened benet liability 30,108
Other nancial liabilities 62,500
Total 608,887
III. Goodwill (*3) 79,277
(*1) The Company re-estimated the fair value of its Samsung LED shares,
which represents 50% ownership, as of April 1, 2012 andrecognized gain
on disposal of shares in the amount of ￦28,684 million.
(*2) The Company distributed 269,867 of treasury shares to carry out the
merger with Samsung LED and recognized a gain on disposal of treasury
shares in the amount of ￦233,705 million based on the estimation of fair
value of the treasury shares.
(*3) Goodwill arising from the merger was recognized as the business
combination will allow faster response to changes in the domestic and
international business environments and strengthen manufacturing
competitiveness.
(4) Had Samsung LED been merged on January 1, 2012, the revenue would
be increased by ￦293,273 million and net income would be decreased
by ￦25,582 million. Revenue and net loss contributed by Samsung LED
division after the merger date of April 1, 2012 amount to ￦923,358
million and ￦10,527 million, respectively.