lge 2010 4q separate

8/12/2019 LGE 2010 4Q Separate

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LGElectronicsInc.

Index

December31,2013and2012

Page(s)

ReportoIndependent!"ditors ......................................................................... 1-2

#eparate$inancial#tatements

Statements of Financial Position........................................................................... 3

Income Statements ................................................................................................ 4

Statements of Comprehensive Income ..................................................................... 5

Statements of Changes in Shareholders !"it# ....................................................... $

Statements of Cash Flo%s ..................................................................................... &

'otes to the Separate Financial Statements


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ReportoIndependent!"ditors

otheoardof/irectorsand

Shareholdersof0lectronicsInc.

ehavea"dited theaccompan#ing separatestatements of financialposition of

0 lectronics Inc.the Compan# as of /ecem6er 317 2818 and 288,7 and

the related separate income statements7statements of comprehensive income7

changes in shareholders e!"it# and cash flo%s for the #ears then ended7

e9pressed in :orean %on. hese separate financial statements are the

responsi6ilit#oftheCompan#;smanagement.+"r responsi6ilit# is toe9pressan

opinionon theseseparate financialstatements6asedono"ra"dits.

e cond"cted o"r a"dits in conformit# %ith a"diting standards generall#

accepted in the )ep"6lic of :orea. hose standards re!"ire that %e plan and

perform the a"dits to o6tain reasona6le ass"rance a6o"t %hether the financial

statementsare freeofmaterialmisstatement.*na"dit incl"dese9amining7ona

test 6asis evidence s"pporting the amo"nts and disclos"res in the financial


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LGElectronicsInc.


(inmillionsofKoreanwon)

!ssets

%"rrentassets

Cashandcashe!"ivalents

Financialdeposits

radereceiva6les

0oansandotherreceiva6les+therfinancial

assetsInventories

+therc"rrentassets'on-c"rrentassetsheldfor

sale

&on'

c"rrent

assets

Financial

deposits

0oans and other

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s

otalliabilities

E*"it+Paid-incapital?Capitalstoc@Share

premi"m)etainedearnings

*cc"m"latedother

comprehensiveincome

+thercomponentsof

e!"it#

otale*"it+

otalliabilitiesande*"it+

&oteDecember31,2010

475741($(7(344741

(5788847$

574(&75$547$2437113

47&178$4

7&,23487

3&448

47&81

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December31,200

&(,7,$$2237888

5715475(,3217131-&$&781,4357,(,-

&7$,17$,4

23782333,7&(4(27&8&

47$5&7148$(57,1&

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$7(84

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LGElectronicsInc.

#eparateIncome

#tatements

earsendedDecember31,2010and200

earEndedDecember31

(inmillionsofKoreanwon,exceptpershareamounts)

&ote

&etsales 24

%ostosales 25

Grossproit

Sellingandmar@etinge9penses

2572&*dministrativee9penses

2572&)esearchanddevelopmente9penses

2572&Servicecosts

25 2& +th ti i

2010

2,723(7583

247(,37$,&

473447(8$

27(,,75

1&

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&

1744$7&

&,

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,

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387513743$

23748$7&&(&718$7$5(

378$475

,2

512723

5

17232755,

$81752

$

17$(178

,$

17,$473


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heaccompan#ingnotesareanintegralpartoftheseseparatefinancialstatements.


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LGElectronicsInc.

#eparate#tatementso%ompreensie

IncomeearsendedDecember31,2010and

200

earEndedDecember

31(inmillionsofKoreanwon) &ote 2010 200

Proit(loss)orte+ear

/tercompreensieincome(expense)

$357(&4

43722(

1714$7(84

57&1$

*vaila6le-for-sale financial assets &

*ct"arial loss on defined 6enefit lia6ilit#

1&

otalcompreensieincome(expense)orte+ear

172,

3

417,3

5

$&,7182

$7,82

171($

171527528


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he accompan#ing notes are an integral part of these separate financialstatements.

5


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LGElectronicsInc.

#eparate#tatementso%angesin#areolders4E*"it+

earsendedDecember31,2010and200


5alanceat-an"ar+

1,200

%ompreensie

income

Profitforthe#ear

*ct"ariallossondefined

6enefitlia6ilit#*vaila6le-for-salefinancialassets

/ividends

5alanceatDecember31,200

5alanceat-an"ar+

1 2010

Paid'

in

%apital

3781&78((

-

1&

-

&

-

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3781&78((

Retain

ed

Earnings

$7(8471$3

1714$7(

84

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$

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%ompreensie

Income

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1714$7(

84

171(

$

$7,82

5&72

32

187((&7,55

18 ((& ,


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heaccompan#ingnotesareanintegralpartoftheseseparatefinancialstatements.

$


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LGElectronicsInc.

#eparate#tatementso%as

$los earsended


earEndedDecember31


&ote

%aslosromoperatingactiities

Cashgeneratedfromoperations 3$

Interestreceived

Interestpaid

/ividends

received

Incometa9

paid

&etcasgeneratedromoperatingactiities

%aslosrom

inestingactiities

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inancingactiities

Proceedsfrom

6orro%ings

)epa#mentsof

6orro%ings/ividends

paid

&etcasproidedb+("sedin)inancingactiities

&etincrease(decrease)incasandcas

e*"ialentsCashandcashe!"ivalentsatthe6eginningof#ear 5

%asandcase*"ialentsatteendo+ear 5

2010

4(,7

2($

357,

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15/273

200

3735&7(383572((

1&5725$1,1758&2(&7(,2

3712174&&

27814&(74&4457,&((,7&83(7515175&$

5551&3788818275111,&7(8454$74,2

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LGElectronicsInc.

&otestote#eparate$inancial#tatements

December31,2010and200,,and-an"ar+1,200,

1. GeneralInormation

0 lectronics Inc. the


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incomeandcashflo%sareprovidedin'ote42.

he preparation of separate financial statements in accordance %ith :orean

IF)S re!"ires the"seofcertaincriticalacco"ntingestimates. Italsore!"ires

management to e9ercise >"dgement in the process of appl#ing the

Compan#s acco"nting policies. he areas involving a higher degree of

>"dgement or comple9it#7 or areas %here ass"mptions and estimates are

significanttotheseparatefinancialstatements7aredisclosedin'ote3.

he follo%ing ne% standards7 ne% interpretations and amendments to

standards and interpretations have 6een iss"edand anno"nced6"t are not

effectivefortheperiod6eginning

(


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LGElectronicsInc.



Dan"ar#172818andhavenot6eenearl#adopted?

:oreanIF)S211,?E9ting"ishingFinancial0ia6ilities%ith!"it#Instr"ments :oreanIF)S1824amendment?E)elated/isclos"res

:oreanIF)S1832amendment?EFinancialInstr"ments-Presentation

:oreanIF)S1181amendment?EFirst-time*doptionof:oreanIF)S :oreanIF)S2114amendment?:oreanIF)S181,Ehe0imitona

/efinedenefit*sset7Ginim"mF"nding)e!"irementsandheir

Interaction

:oreanIF)Sann"alimprovementsInestmentsin#"bsidiaries,-ointl+%ontrolledEntitiesand!ssociates

he attached statements are the separate financial statements s"6>ect to

:orean IF)S 182&7 Consolidated and Separate Financial Statements7 and

th t d 6 t h i t t i 6 idi i > i tl


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each reporting date e9change rates of monetar# assets and lia6ilities

denominated in foreign c"rrencies are recognised in the income statement7

e9cept !"alif#ing cash flo% hedges %hich are recogniHed in other

comprehensiveincome.

Foreign e9change gains and losses that relate to 6orro%ings and cash and

cash e!"ivalents are reported in Efinancial income and e9penses in the

separate income statement.*ll other foreigne9changegainsand lossesare

reported in Eother operating income and e9penses in the separate incomestatement.

Changes inthefairval"eofmonetar#sec"ritiesdenominated inforeignc"rrenc#classifiedas

,


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LGElectronicsInc.



availa6le-for-sale are anal#sed 6et%een translation differences res"lting from

changes in the amortised cost of the sec"rit# and other changes in the

carr#ing amo"nt of the sec"rit#.ranslationdifferencesrelatedtochangesin

amortisedcostare recognised inprofitor loss7andotherchanges incarr#ing

amo"ntarerecognisedinothercomprehensiveincome.

ranslation differences on non-monetar# financial assets and lia6ilities7 s"ch

as e!"ities held at fair val"e thro"gh profit or loss7 are recognised in the

separate incomestatementaspartof thefair val"e gain or loss. ranslation

differences on non-monetar# financial assets7 s"ch ase!"itiesclassifiedas

availa6le-for-sale7areincl"dedinothercomprehensiveincome.

%asand%asE*"ialents

Cashandcashe!"ivalents incl"decashonhand7depositsheldatcall%ith

6an@s7andothershort-termhighl#li!"idinvestments%ithoriginalmat"ritiesof

lessthanthreemonths.


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ii 0oansandreceiva6les

0oans and receiva6les are non-derivative financial assets %ith fi9ed or

determina6le pa#ments that are not !"oted in an active mar@et. he# are

incl"ded in c"rrent assets7 e9cept for those%ith mat"rities greater than 12

months after the end of the reporting period. hese areclassified as non-

c"rrent assets. he Compan#s loans and receiva6les comprise Ecash and

cashe!"ivalents7 Efinancialdeposits7 Etradereceiva6les7andEloansandother

receiva6les.

18


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LGElectronicsInc.



iii eld-to-mat"rit#financialassets

eld-to-mat"rit# financial assets are non-derivative financial assets %ith fi9ed

or determina6le pa#ments and fi9ed mat"rities that the Compan#s

management has the positive intention anda6ilit# tohold tomat"rit#andare

classified as Eother financial assets in the separate statements of financial

position. If the Compan# %ere to sell other than an insignificant amo"nt of

held-to-mat"rit# financial assets7 the %hole categor# %o"ld 6e tainted and

reclassifiedasavaila6le-for-sale.eld-to-mat"rit#financialassetsare incl"ded

in non-c"rrent assets7 e9cept for those %ithmat"rities less than 12 months

after theendof the reportingperiod7 %hichareclassifiedasc"rrentassets.

iv *vaila6le-for-salefinancialassets

*vaila6le-for-sale financial assets are non-derivative financial assets that are

either designated in this categor# or not classified in an# of the other

categories. he# are incl"ded in Eother financial assets as non-c"rrent

l h i i i l h 12 h


23/273

cash flo%s from the investments have e9pired or have 6een transferred

and the Compan# has transferred s"6stantiall# all ris@s and re%ards of

o%nership.*vaila6le-for-salefinancialassetsandfinancialassets at fair val"e

thro"gh profit or loss are s"6se!"entl# carried at fair val"e. 0oans and

receiva6les are s"6se!"entl# carried at amortised cost "sing the effective

interestmethod.

ains or losses arising from changes in the fair val"e of the financial assets

carried at fair val"e thro"gh profit or loss are presented in the separate

income statement %ithin Efinancial income and e9penses in the period in

%hich the# arise. he Compan# recognises a dividend fromfinancial assets

at fairval"e thro"ghprofitor loss in theseparate incomestatement%hen its

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LGElectronicsInc.



righttoreceivethedividendisesta6lished.

hen sec"rities classified as availa6le-for-sale are sold or impaired7 the

acc"m"lated fair val"e ad>"stments recognised in other comprehensive

income are reported in the separate income statement as Efinancial income

ande9penses.

Interest on availa6le-for-sale sec"rities calc"lated "sing the effective

interest method is recognised in the separate income statement as part

of Efinancial income. /ividends onavaila6le-for-sale e!"it# instr"ments are

recognised in the separate income statement as part of Efinancial income

%hentheCompan#srighttoreceivethedividendisesta6lished.

c ffsettin!

Financial assets and lia6ilities are offset and the net amo"nt reported in

the statement offinancialposition%hen there isa legall#enforcea6leright to

offset the recognisedamo"ntsand there is an intention to settle on a net


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the6orro%eraconcessionthatthelender%o"ldnotother%iseconsiderJ

It 6ecomes pro6a6le that the 6orro%er %ill enter 6an@r"ptc# orother financialreorganisationJ

he disappearance of an active mar@et for that financial asset6eca"se of financialdiffic"ltiesJ or

+6serva6ledata indicatingthatthereisameas"ra6ledecreaseintheestimatedf"t"recashflo%sfromaportfoliooffinancialassetssincethe

initialrecognitionofthoseassets7altho"ghthedecreasecannot#et6e

identified%iththeindivid"alfinancialassetsintheportfolio7incl"ding?

i adversechangesinthepa#mentstat"sof6orro%ersintheportfolioJ

12


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LGElectronicsInc.



iinationalor localeconomicconditionsthatcorrelate%ithdefa"ltson

theassets intheportfolio.

he amo"nt of the loss is meas"red as the difference 6et%een the assets

carr#ing amo"nt and the present val"e of estimated f"t"re cash flo%s

e9cl"ding f"t"recredit losses thathavenot6een inc"rred disco"nted at thefinancial assets original effective interest rate. he assetscarr#ing amo"nt

oftheassetisred"cedandtheamo"ntofthelossisrecognised intheincome

statement.*s a practical e9pedient7 the Compan# ma# meas"re impairment

onthe6asisofaninstr"mentsfairval"e"singano6serva6lemar@etprice.

If7 inas"6se!"entperiod7 theamo"ntof the impairment lossdecreasesandthe decrease can 6e related o6>ectivel# to an event occ"rring after the

impairment %as recognised s"ch as an improvement in the de6tors credit

rating7thereversaloftheprevio"sl#recognisedimpairmentlossisrecognised

intheincomestatement.


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henhedgedoesnotmeet thecriteriaforhedgeacco"nting7changes in fair

val"e of those derivatives are recognised t#picall# in the separate income

statement %ithin Eother operating income and e9penses or Efinancial income

ande9pensesaccordingtothenat"reoftransactions.

radeReceiables

rade receiva6les are amo"nts d"e from c"stomers for merchandise sold or

services performed in the ordinar# co"rse of 6"siness. If collection is

e9pected in one #ear or less7 the# areclassified as c"rrent assets. If not7the# are presented as non-c"rrent assets. rade receiva6les are recognised

initiall#atfairval"e7lessprovisionforimpairment.

13


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LGElectronicsInc.



Inentories

Inventories are stated at the lo%er of cost and net realisa6le val"e. Cost is

determined "sing the %eighted-average method7 e9cept for inventories in-

transit %hich are determined "sing the specific identification method. he

cost of finished goods and %or@ in progress comprises ra%materials7 directla6o"r7otherdirectcostsand relatedprod"ctionoverheads 6asedonnormal

operating capacit#. he Compan# periodicall# revie%s a possi6ilit# of the

significantchangesinnetrealiHa6leval"eofinventoriesfromdis"se7decrease

in mar@et val"e and o6solescence and recogniHes as ;*llo%ances for

Bal"ation of Inventories;. 'et realisa6le val"e is the estimatedsellingpricein

theordinar#co"rseof6"siness7lessapplica6lesellinge9penses.

Propert+,PlantandE*"ipment

*llpropert#7plantande!"ipmentarestatedathistoricalcost less

depreciation.istoricalcostincl"dese9pendit"resdirectl#attri6"ta6letothe


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he assets resid"al val"es and "sef"l lives are revie%ed7 and ad>"sted if

appropriate7at theend of each reporting period.*n assets carr#ing amo"nt

is %ritten do%n immediatel# to itsrecovera6le amo"nt if the assets carr#ing

amo"nt is greater than its estimated recovera6leamo"nt. ains and losses

on disposals are determined 6# comparing the proceeds %ith the carr#ing

amo"nt and are recognised %ithin Eother operating income and e9penses

in theseparateincomestatement.

5orroing%osts

he Compan# capitalises 6orro%ing costs directl# attri6"ta6le to the

ac!"isition or constr"ctionof a !"alif#ing asset as part of the cost of that

assetd"ring an e9tended period in %hich it

14


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LGElectronicsInc.



preparesanassetfor its intended"se.heCompan#recognisesother

6orro%ingcostsasane9penseintheperiodin%hichitisinc"rred.

GoernmentGrants

rants from the government are recognised at their fair val"e %here there

is a reasona6le ass"rance that the grant %ill 6e received and the

Compan# %ill compl# %ith all attachedconditions.

overnment grants relating to costs are deferred and recognised in the

separate incomestatementtomatchthem%iththecoststhe#areintendedto

compensate.

overnmentgrantsrelatingtopropert#7plantande!"ipmentarepresented

asaded"ctionofrelatedassetsandarecreditedtodepreciationoverthe

e9pectedlivesoftherelatedassets.

Intangible!ssets


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on the straight-line method over their estimated"sef"l lives of one to five

#ears 6egins at the commencement of the commercial prod"ction of the

relatedprod"ctsor"seoftherelatedtechnolog#.

dtherintan!i'leassets

+ther intangi6le assets s"ch as soft%are %hich meet the definition of an

intangi6le asset are amortised "sing the straight-line method over their

estimated "sef"l lives of five #ears %hen the asset is availa6le for "se.

Gem6ership rightsare regardedas intangi6leassets %ith indefinite"sef"l life

and not amortised 6eca"se there is no foreseea6le limit to the period over

%hichthe

15


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LGElectronicsInc.



asset ise9pected to generatenetcash inflo%s for theentit#.*llmem6ership

rights are testedann"all# for impairmentandstatedatcost lessacc"m"lated

impairment.Impairmentlossesarenotreversed.

ResearcandDeelopment%osts

Costs associated %ith research are recognised as an e9pense as inc"rred.

Costs that are identifia6le7 controlla6le and directl# attri6"ta6le to

development pro>ects are recognised as intangi6le assets %hen all the

follo%ingcriteriaaremet?

It is technicall#feasi6le tocomplete the intangi6leassetso that it%ill6eavaila6lefor"seJ

Ganagementintendstocompletetheintangi6leassetand"seorsellitJhereisthea6ilit#to"seorselltheintangi6leassetJItcan6edemonstratedho%theintangi6leasset%illgeneratepro6a6le


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as a separate asset7 onl# %hen it is pro6a6le that f"t"re economic 6enefits

associated%iththeitem%illflo%totheCompan#and thecostof the itemcan

6e meas"red relia6l#. he carr#ing amo"nt of the replaced part is

derecognised.*ll other repairs and maintenance are charged to the income

statementd"ringthefinancialperiodin%hichthe#areinc"rred.

0and held for investmentpropert# is notdepreciated. Investment propert#

e9cept for land isdepreciated"singthestraight-linemethodovertheir

estimated"sef"llives.

1$


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LGElectronicsInc.



hedepreciationmethod7theresid"alval"eandthe"sef"llifeofanassetare

revie%edat leastat each financial #ear end and7 if the management>"dges

that previo"s estimates sho"ld 6ead>"sted7thechange isacco"ntedforasa

changeinanacco"ntingestimate.

Impairmento&on'$inancial!ssets

ood%ill and intangi6le assets that have an indefinite "sef"l life are not

s"6>ect to amortisation and are tested ann"all# for impairment. *t each

reporting date7 assets that are s"6>ect to amortisation are revie%ed for

impairment %henever events or changes in circ"mstancesindicatethat the

carr#ingamo"ntma#not6erecovera6le.*n impairmentloss isrecognisedforthe amo"nt 6# %hich the assets carr#ing amo"nt e9ceeds its recovera6le

amo"nt. he recovera6le amo"nt is the higher of an assets fair val"e less

costs to sell and val"e in "se. For the p"rposes of assessing impairment7

assets are gro"ped at the lo%est levels for %hich there are separatel#

identifia6le cash flo%s Ecash-generating "nits. 'on-financial assets other


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LGElectronicsInc.



/eferred income ta9 is recognised on temporar# differences arising 6et%een

the ta9 6ases of assets and lia6ilities and their carr#ing amo"nts in the

financial statements. It represents f"t"re ta9 conse!"ences that %ill arise

%hen recovering or settling the carr#ing amo"nt of its assetsand lia6ilities.

o%ever7 deferred income ta9 is not acco"nted for if it arises from initial

recognition of an asset or lia6ilit# in a transaction other than a 6"siness

com6ination that at the time of the transaction affects neither acco"nting nor

ta9a6leprofitor loss./eferred income ta9 isdetermined"sing ta9 rates and

la%s that have 6een enacted or s"6stantiall# enacted 6# the date of

statement of financial position and are e9pected to appl# %hen the related

deferred income ta9 asset is realised or the deferred income ta9 lia6ilit# is

settled.

/eferred income ta9 assets are recognised onl# to the e9tent that it is

pro6a6le that f"t"reta9a6leprofit%ill6eavaila6leagainst%hichthetemporar#

differencescan6e"tilised.


37/273

claims 6ased on historical e9perience. Sales ret"rn provision is for the

estimated sales ret"rns 6ased on the historical e9perience. here the

Compan# is re!"ired to restore its leased assets to theiroriginalstateat the

end of the lease-term7 the Compan# recognises the present val"e of the

estimated cost of restoration as a provision for restoration. hen there is a

pro6a6ilit# thatano"tflo% of economic 6enefits %ill occ"r from litigation or

disp"tes7 and %hose amo"nt is reasona6l# estima6le7 a corresponding

amo"nt of provision is recognised as a provision forlitigation inthefinancial

statement.

Provisions are meas"red at the present val"e of the e9pendit"res e9pected

to6e re!"ired tosettle theo6ligation"singapre-ta9 rate that reflectsc"rrent

mar@etassessmentsof the timeval"e of mone# and the ris@s specific to the

o6ligation.he increase in the provision d"e topassageoftimeisrecognised

asanintereste9pense.

1(


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LGElectronicsInc.



Emplo+ee5eneits

a %efined'enefitlia'ilit$

heCompan#operatesvario"spensionschemes.heschemesaregenerall#

f"nded thro"ghpa#ments to ins"rance companies or tr"stee-administered

f"nds7 determined 6# periodic act"arial calc"lations. he Compan#

operates 6oth defined contri6"tion and defined 6enefitplans.

*definedcontri6"tionplan isapensionplan"nder%hich theCompan#pa#s

fi9ed contri6"tions into a separate f"nd. he Compan# has no legal or

constr"ctive o6ligations to pa# f"rthercontri6"tionseven if the f"nddoesnot

hold s"fficient assets to pa# all emplo#ees the 6enefits relating to emplo#ee

service in thec"rrentandpriorperiods.For thedefinedcontri6"tionplan7the

Compan# pa#s contri6"tions to p"6licl# or privatel# administered pension

ins"rance plans on a mandator#7 contract"al or vol"ntar# 6asis. he

Compan# has no f"rther pa#mento6ligations once the contri6"tions have

6een paid. he contri6"tions are recognised asemplo#ee6enefite9pense


39/273

6 Share-'asedpa$ments

he Compan# operates cash-settled7 share-6ased compensation plans7

"nder %hich theCompan#receivesservicesfromemplo#eesasconsideration

for the pa#ments of the difference 6et%een mar@et price of the stoc@ and

e9erciseprice. he fair val"eof theemplo#eeservicesreceived in e9change

for the grant of the options is recognised as an e9pense in the separate

income statement over the vesting period. he total amo"nt to 6e e9pensed

is determined 6# reference to the fair val"e of the options granted

considering the impact of an# service and performance vesting conditions

and non-vesting condition. Kntil the lia6ilit# is settled7 theCompan# shall

remeas"re the fairval"eof the lia6ilit#ateach reportingdateandat thedate

ofsettlement7%ithan#changes infairval"erecognised inprofitor lossforthe

period.

1,


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LGElectronicsInc.



(c)therlon!-termemplo$ee'enefits

heCompan#providesother long-termemplo#ee6enefitsto theiremplo#ees.

he entitlement to these 6enefits is "s"all# conditional on the emplo#ee

%or@ing more than ten #ears. he e9pected costs of these 6enefits are

accr"ed over the period of emplo#ment "sing the same acco"ntingmethodolog# as "sed for defined 6enefit pension plans.*ct"arial gains and

losses arising from e9perience ad>"stments and changes in act"arial

ass"mptions are recognised in the income statement as the# occ"r. hese

6enefitsarecalc"latedann"all#6# independentact"aries.

(d)ermination'enefits

ermination 6enefits are pa#a6le %hen emplo#ment is terminated 6# the

Compan# 6efore the normal retirement date7 or %henever an emplo#ee

accepts vol"ntar# retirement in e9change for these 6enefits. he Compan#

recognises termination 6enefits %hen it is demonstra6l# committed to

either? terminating the emplo#ment of c"rrent emplo#ees according to a


41/273

relia6l#meas"red7 it ispro6a6le that f"t"reeconomic6enefits %ill flo% to the

Compan# and %hen specific criteria have 6een met for each of the

Compan#s activities as descri6ed 6elo%. he Compan# 6ases itsestimates

on historical res"lts7 ta@ing into consideration the t#pe of c"stomer7 the

t#pe oftransactionandthespecificsofeacharrangement.

a Salesof!oods

heCompan#man"fact"resandsellshomeelectronicsandtheirrelatedcore

partsanddispla#7m"ltimedia7mo6ilecomm"nicationprod"cts.Salesofgoodsarerecognised%hentheCompan#

28


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LGElectronicsInc.



has delivered prod"cts to the c"stomer. /eliver# does not occ"r "ntil the

prod"cts have 6een shipped to the specified location7 the ris@s of

o6solescenceand loss have6een transferred tothec"stomer7andeither the

c"stomerhasacceptedtheprod"ctsinaccordance%iththesalescontract7the

acceptance provisions have lapsed7 or the Compan# has o6>ective evidence

thatallcriteriaforacceptancehave6eensatisfied.

he prod"cts are often sold %ith vol"me disco"nts and c"stomers have a

right to ret"rn fa"lt# prod"cts in the mar@et. *cc"m"lated e9perience is

"sed to estimate and provide for thedisco"nts and ret"rns. he vol"me

disco"nts are assessed 6ased on anticipated ann"al p"rchases. he

Compan#recognisesprovisions forprod"ct%arrantiesandsalesret"rn6ased

on reasona6le e9pectation reflecting %arrant# o6ligation and sales ret"rn

rates inc"rred 6#sales'ote1(.

6 Salesofser&ices

hentheo"tcomeofatransactioninvolvingtherenderingofservicescan6e


43/273

Leases

0eases in %hich a significant portion of the ris@s and re%ards of o%nership

are retained6# thelessorareclassifiedasoperating leases.Pa#mentsmade

"nder operating leases are charged to the separate income statement on a

straight-line6asisovertheperiodofthelease.

0eases %hich the Compan# has s"6stantiall# all the ris@s and re%ards of

o%nership areclassified as finance leases. Finance leases are capitalised at

the leases commencement at the lo%er of the fair val"e of the leasedpropert#and thepresentval"eof theminim"m lease

21


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LGElectronicsInc.



pa#ments.

DiidendDistrib"tion

/ividend lia6ilit#isrecognised inthefinancialstatements%henthedividends

areapproved6#theshareholders.

!ssetsclassiiedas6eld or#ale (Gro"pclassiiedaseld orsale)

andDiscontin"ed/perations

*ssetsordisposalgro"psareclassifiedasEassetsandlia6ilitiesclassifiedas

held for sale or Egro"ps classified as held for sale %hen their carr#ing

amo"nt is to 6e recovered principall#thro"gh a sale transaction and a saleis considered highl# pro6a6le. he# are stated at the lo%er of carr#ing

amo"ntorfairval"elesscoststosell.

hen a component of the Compan# representing a separate ma>or line

of 6"siness or geographical area of operation has 6een disposed of7 or is

s"6>ect to a sale plan involving lossof control of a s"6sidiar#7 the Compan#


45/273

accordance %ith the acco"nting polic# stated in 'ote 2. he recovera6le

amo"ntsof cash-generating"nitshave6een determined 6ased on val"e-in-

"se calc"lations. hese calc"lations re!"ire the "se ofestimates.

Incomeaxes

he meas"rement of c"rrent and deferred ta9 reflects the ta9 conse!"ences

that %o"ld follo% from the manner in %hich the Compan# e9pects7 at the

reporting date7 to recover or settle the carr#ing amo"nt of its assets and

lia6ilities. o%ever7 %here the final ta9 conse!"ences of

22


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LGElectronicsInc.



these matters are different from the e9pected amo"nts that %ere

initiall# recorded7 s"ch differences %ill impact the c"rrent and deferred

incometa9assetsand lia6ilities intheperiodin%hichs"chdeterminationis

made.

$air7al"eo$inancialInstr"ments

he fair val"e of financial instr"ments that are not traded in an active

mar@et is determined 6# "sing val"ation techni!"es. he Compan# "ses

its>"dgement to select a variet# of methodsand ma@e ass"mptions that

aremainl#6asedonmar@etconditionse9istingateach reportingdate.

Proisions

heCompan#recognisesprovisions forprod"ct%arrantiesandsales

ret"rnsat the reportingdateasdescri6edin'ote1(.heamo"ntsare

estimated6asedonhistoricaldata.


47/273

Loansand

receiables

!ssets

classiie

das

aailable'or'

sale

6eld'to'mat"rit+

inancialassets otal

Cashandcash

e!"ivalents

Financialdeposits

radereceiva6les

0oans andother

receiva6les +ther

financialassets

otal

-

($(7(34 -

18(7(53 -

574(&75$5 -

$847,(4 -

-

-

&78&8723$

- -

- -

- -

- -

2(7,45

5(7138

2(7,45

5(7138

($(7(3

4

18(7(5

3

574(&75

$5

$847,(

4

(&78&5

&715&7311

23


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LGElectronicsInc.



(inmillionsof

Koreanwon)rade

pa#a6les

orro%ings

+therpa#a6les

+therfinanciallia6ilities

otal

Liabilitiesat

airal"e

tro"gte

proitandloss

-

-

-

41722$

41722$

Liabilities

carried at

amortised

cost472(572

(8

47,,,7(

$4

1741578

81-

187&887145

otal

472(572

(8

47,,,7(

$4

1741578

81

41722$

187&4173&1

Categorisationsoffinancialinstr"mentsasof/ecem6er317288,7areasfollo%s?


49/273


50/273


51/273

otal December

31,2010

1

8

($(7(

24

($(7(34

December

31,200,

1

8

&(,7,

5$

&(,7,$$

-an"ar+

1,200,

1

8

1715$7$

35

1715$7$45

he follo%ing amo"nts are restricted in connection %ith maintaining

chec@ing acco"nts7 vario"s short-term and long-term 6orro%ings7 and

national polic# pro>ects f"nded 6# the :oreangovernment.

(inmillionsofKorean

won)

)estrictedfinancialdeposits

December

31,2010237(53

December

31,200,237823

-an"ar+

1,200,25783&


52/273

LGElectronicsInc.



:. radeReceiables,andLoansand/terReceiables

radereceiva6les7andloansandotherreceiva6les7netofallo%ancefor

do"6tf"lacco"nts7areasfollo%s?


%"rrent

+riginalamo"nt

December

31,2010

0ess?

allo%a

nce

for

do"6tf

"lacco"nts

Carr#ingamo"nt

+riginalamo"nt

December

31,200

0ess?

allo%a

nce

for

do"6tf

"lacco"nts

Carr#ingamo"nt

+riginalamo"nt

-an"ar+

1,2000ess?

allo%anc

e for

do"6tf"l

acco"nts

Carr#ingamo"nt

radereceiva6les

575817(83

14723(

574(&75$5

571&57&45

21715$

5715475(,

475,27$$1

1&725(

475&57483


53/273

nt

0oans

/eposi

ts

#"b'otal

otal

December31,2010

1&7115

1$,7,

22

557,4

5131

24371

13

13872

(2

23175(,

3$17(

&1

$847,(4

December31,200,

1$7552

28$75

,$

,&7(8

&1&$

32171

31

1837$

&4

23$7118

33,7&

(4

$$87,15

-an"ar+1,200,

1273,2

23&7,

48

13471

3&&&

3(475

4$

&57,

88

212788(

2(&7,

8(

$&27454


54/273

LGElectronicsInc.



he ageing anal#sis of these trade receiva6les7 and loans and other

receiva6les as of/ecem6er31728187isasfollo%s?

/erd"e

(inmillionsof

Koreanwon)rade

receiva6les

0oans andother

receiva6les C"rrent

'on-c"rrent

%"rren

t5743872

4,

24(7$41

34&7&$5

;pto3 8to:monts

monts

5475&&

272(4

3273&3

,78((

,7(,8

3755&


55/273

%"rren

t

4725475

,8

3547$8(

2$17(,4

;pto3 8to:montsmonts

38$7183

127$2,

4,7,3(

1573(5

2872&2

371(3


56/273


57/273


58/273

LGElectronicsInc.

&otestote#eparate$inancial#tatementsDecember

31,2010and200,,and-an"ar+1,200,

/etailsofderivativesandlia6ilitiesareasfollo%s?

(inmillionsof December31,2010 December31,200, -an"ar+1,200,

Koreanwon) !ssets Liabilities !ssetsLiabilities

!ssets Liabilities%"rrent

C"rrenc#

For%ard

C"rrenc#

+ption

C"rrenc#

S%apInterestS%ap

#"b'total

&on'

c"rrent

C"rrenc#

- --

--

--

37,,(-

37,,(

- --

--

3&722(-

3&722(

-

- --

--

$17&22- --

$17&22

- ----

5571(3-

5571(3

-

573&1 57583

- 27143

-

45753$-

-

573&1

5371(2

- --

4,75(8-

&, (3$ -


59/273

Knlisted!"it#

Sec"rities /e6t

Sec"rities

otal

December31,2010

13758(

137$,

8

17&4&

2(7,4

5

December31,200,

137823

11755

4-

2475&&

-an"ar+1,200,

$731&

57&$2

-

1278&,

he amo"nts recognised as other comprehensive income is 172,3 million

288,? $7,82millionand there are noamo"nts reclassified from e!"it# into

the incomestatement 288,?'il.*lso7 impairment losses in the amo"nt of

375$$ million 288,? 17&32 million %ererecognised.

he"nlistedsec"ritiesmentioneda6ovearemeas"redatcostas their fair

val"escannot6emeas"redrelia6l#.


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LGElectronicsInc.


31,2010and200,,and-an"ar+1,200,

eld-to-mat"rit#financialassetsconsistsof?

(inmillionsofKorean

won)1to5#ear

otal

December31,

2010

5(713

85(7138

December31,

200,

5(7138

5(7138

-an"ar+1,

20

0,

--

he amo"nt recognised as interest income in relation to held-to-mat"rit#

financial assets is475$3 million 288,? 5(4 million. 'o impairment losses

%ererecogniHedinrelationtoheld-to-mat"rit#financialassets.

>. Inentories

Inventoriesconsistof?


61/273

(inmillionsofKorean

won)%"rrent

*dvances

Prepaide9penses

Prepaidval"eadded

ta9

#"botal

&on'%"rrent0ong-termprepaid

e9penses 0ong-term

advances

#"botal

otal

December31,2010

18$78$

1

1&3748

4

$87,8,

34873&

4

448718

$

2,17131

&31723

&

178&17$11

December31,200,

11&752

1

2237(1

&

,47$51

4357,(

,

4(37$&

1

2&27145

&557(1

$

171,17(85

-an"ar+1,200,

&,74&11&(754

,

$1755(

31,75&

(

212733

(

233725

$

44575,4

&$571&2


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LGElectronicsInc.



10.Propert+,PlantandE*"ipment

Carr#ingamo"ntsofpropert#7plantande!"ipmentconsistof?

(inmillionsof

Koreanwon)!tDecember31,2010

Cost

*cc"m"lateddepreciation

*cc"m"latedImpairment

&etboo?amo"nts

!tDecember31,200

Cost

Land

17&427243

-

-

17&427243

17&2$7144

-

-

17&2$7

5"ildings

2724&7,(2

41873$&

272

1517(357488

273427&&(

3($7$

#tr"ct"res

1$17233

$37$85

3,

3,&7235

1557&23

$173

@aciner

+and

e*"ipmen

t

17(327212

1741$7

4,5

2(718,

3(&7$8(

ools

173&(74$5

178(,73,,

$$1

2((7485

1725,72$$

1782378,,

/ters

5117,42

3$171(&

,1

1587$$4

53273,8

48273$,

%onstr"c

tion'in'

progress

15,7(&5

-

-

15,7(&5

1137,$4

-

otal

(78337,52

373417853

3174$,

47$$17438

(781$78(4

3731$751(


63/273

sposals N

reclassificati

on to assets

held for sale

/epreciation

Impairment Nreversal

!tDecember31,2010

Land

17&2$7144

1(7&(,

3(7((&

4175

&&

-

-

17&427243

5"ildings

17,527

1811,78,2

347242

118728,

5,7(1(

(

17(357488

#tr"ct"res

,37,

2417,$8

1271$5

371,(

&7$15

1

,&7235

@aciner

+and

e*"ipme

nt

4857$5$

$574,1

13578

32

13784(

28574,$

2&

3(&7$8(

ools

2357$38

1&&755$

$&7&88

&72

,(

1(47(5(

325

2((7

485

/ters

12,7&21

14&7$1&

(37242

371

,3

48728&

32

1587

$$4

%onstr"c

tion'in'

progress

1137,$4

23474$,

1((755(

-

-

-

15,7(&5

otal

47$5&7148

$$47,&4

1$722$

1&(75

23

4,&7,,4

3,3

47$$17

438


64/273

LGElectronicsInc.




!t-an"ar+1,200

*c!"isitions

ransfer-in

o"t

/isposals N

reclassificati

on to assets

held for sale

/epreciation

Impairment Nreversal

!tDecember31,200

Land

17$,(7&1,

387$42

357(31

3,784(

-

-17&2$7144

5"ildings

17$,27$83

(27&1$

255738&

,78(2

$,74

43

-

17,527181

#tr"ct"res

,&7&1&

1733&

27,$5

5((

&74

&&

38

,37,24

@acine

r+and

e*"ipmen

t

5&$7

$214&7254

41741$

387,5$

22(7$4(

31

485

ools

2587(53

13$7(,5

387,,$

,783&

1&478$,

(

2357$38

/ters

14,7(15

1387413

,$72,,

2781$

5271$,

23

12,7&21

%onstr"c

tion'in'

progress

2(&7&,4

11&7235

2&8721$

287(

4,-

-

1137,$4

otal

47&547122

54$74,2

-

11175&$

5317(8$

,2

47$5&7148


65/273

*cc"m"lated

amortisation and

impairment

&etboo?amo"nts

!tDecember31,200

Cost

*cc"m"lated

amortisation and

impairment

&etboo?amo"nts

!t-an"ar+1,200

Cost

*cc"m"lated

amortisation and

impairment

&etboo?amo"nts

Goodill

327885

-

327885

2,7(,4

-

2,7(,4

337$&,

-

337$

Ind"st

rial

proper

t+

rigts

483784$

1&57533

22&7513

35$7,&5

15373(3

28375,2

335

Deelop

ment

costs

(417,$1

5$373(4

2&(75&&

5(1731&

3,&73

411(37,&$

583725&

/ter

intangi

ble

assets

342785&

1,(7813

1447844

32275(3

1&5783$

14&754&

31473$4

%onstr"c

tion'in'

progress

437$&,

-

437$&,

1287,8(

-

1287,

8(

3&78(4

-

3& 8

otal

17$$27&4(

,3$7,38

&257(1(

174117$&&

&257&$8

$(57,1&

17224724(

$2571,5

5,,7853


66/273

LGElectronicsInc.

&otestote#eparate$inancial#tatementsDecember31,2010

and200,,and-an"ar+1,200,

Changesinintangi6leassetsareasfollo%s?


!t-an"ar+1,2010*c!"isitions

ransfer-in o"t

/isposals N

reclassification

to assets held for

sale*mortisation

!tDecember31,2010

Goodill

2,7(,

4

27111

-

-

-

327885

Ind"stri

al

propert

+rigts28375,2

-

&578,&

127$42

3(7534

22&7513

Deelopm

entcosts

1(37,&

$5(7$1(

24,7854

1$784(

1,&7823

2&(75&&

/ter

intangib

le

assets14&754&

2&714&

$8

5$&

387143

1447844

%onstr"cti

on'in'

progress

1287,8(

1&87158

24&71$4

215

-

437$&,

otal

$(57,1&

25(782$

&&784&

2,74&2

2$57&88

&257(1(


67/273

Sellingandmar@eting

e9penses *dministrative

e9penses

)esearchanddevelopment

e9penses ServiceCosts

otal

2010

5274&1

571(5

(2724(

1237,32

17($4

2$57&88

200,

2,785,

$72,5

5$74&4

387$35

17,&&

1247448

ood%ill is allocated among the Compan#s cash-generating "nits CKs according to

operating segment.*n operating segment-level s"mmar#of good%ill allocation is presented

6elo%.


Go6ile

Comm"nications

Iome *ppliance

otal

December31,

20102,7(,4

27111

327885

December31,

200,2,7(,4

-

2,7(,4

-an"ar+1,200,

337$&,-

337$&,

1he Compan# too@ over the mem6rane segment from 0 I*KSAS7 0/. for %ater


68/273

LGElectronicsInc.

&otestote#eparate$inancial#tatementsDecember31,2010

and200,,and-an"ar+1,200,

amo"ntingto27111millionas agood%ill.

he recovera6le amo"nt of CKs has 6een determined 6ased on val"e-in-"se calc"lations.

hesecalc"lations"sepre-ta9cash flo%pro>ections6asedon financial6"dgetsapproved6#

management covering a three-#ear period. Cash flo%s 6e#ond the three-#ear period are

e9trapolated "sing the estimated gro%th rate %hich does not e9ceed the long-term average

gro%thratefortheelectronic6"sinessin%hichtheCKoperated.

Ganagement determined 6"dgeted I margin 6ased on past performance and its

[email protected]"nt rates"sedarepre-ta9and reflectspecific

[email protected]%thrateanddisco"ntrate"sedforval"e-

in-"secalc"lationsofGo6ileComm"nications%hichma>orit#ofgood%ill6elongs toare1.5

and18.4$7respectivel#.

herecovera6leamo"nts6asedonval"e-in-"secalc"lationse9ceedcarr#ingamo"ntsandno

impairmentsarerecognised.


69/273

34


70/273

LGElectronicsInc.



12. Inestmentsins"bsidiaries,Aointl+controlledentitiesandassociates

Investmentsins"6sidiaries7>ointl#controlledentitiesandassociatesareasfollo%s?

(inmillionsof

Koreanwon)S"6sidiaries

Dointl# controlledentities andassociates

otal

December

31,2010

373&57$($

474$,78

48

&7(447&2$

December

31,

200,37&$87,

54

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December

31,

200,37$,87(

5,

478$,7$

2,

&7&$874((

hestat"sandcarr#ingamo"ntsofinvestmentsins"6sidiariesareasfollo%s?

Percentageo

%o"ntrieso onersip(B)at


71/273

188.88

Ge9ico ,,.,&

Panama 188.88

hailand 188.88

*"stralia 188.88

,557542-3117&4$

2&87$31

21478,1

1$17331

14(7552

184745,,&7$8(

,47124

&87814

$(7&28

&,72225575&(

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$,37484

373&57$($

,5575

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4117(

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4$

2&87$31

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25871

,1

3117&

4$

2&87$31

21478,1

1$17331

14(7552

184745,

,&7$8(


72/273

35


73/273


74/273

anwon)

0 /ispla# Co.7 0td.

0 Innote@ Co.7

0td.1

#ares

1357$2578

88

,7$5371(1

@ar?etprice

persare(in

on)

3,7(88

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amo"

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374(87$23541753(

December31,200,


0 /ispla# Co.7

0td. 0 Innote@

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#ares

1357$2578

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(7$$17$42

17$147$&5

@ar?etprice

persare(in

on)

3,725

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5732372

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amo"

nt

374(87$

23

4117(44

(4788$


75/273

LGElectronicsInc.


31,2010and200,,and-an"ar+1,200,

-an"ar+1,200,


0 /ispla# Co.7

0td. 0 Innote@

Co.7 0td.1

Ian@"@ lectric lassCo.7

0td.

#ares

1357$2578

88

$718&74

8817$147$&5

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persare(in

on)

21788

83&758

8

227(88

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amo"n

t

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(4788$

13.InestmentPropert+

Changes incarr#ingamo"ntsof investmentpropert# for the#earended

/ecem6er31728187areasfollo%s?


76/273


77/273

LGElectronicsInc.



)ental income amo"nting to 412 million 288,? 144 million and

operating e9pensesamo"nting to 1,5 million 288,? 1,$ million are

recognised in the income statementrelatingtoinvestmentpropert#.

18. 5orroings

hecarr#ingamo"ntsof6orro%ingsareasfollo%s?

(inmillionsof

Koreanwon)

%"rrent

Short-term6orro%ings

C"rrent mat"rities of long-term

6orro%ings C"rrent mat"rities of

de6ent"res

#"b'total

December31,

2010

173$&75

,2

1,8788

8

3&,7$,

December31,

200

(8475

21

-&8878

52

1758475

-an"ar+1,

200

3744374

2(

1257&5

8

14,7$2

(


78/273


79/273

LGElectronicsInc.



0ong-term6orro%ingsasof/ecem6er31728187consistof?


0ocal c"rrenc# loans

he :orea/evelopment an@




:orea FinanceCorporation

:orea FinanceCorporation

Latestmat"rit+

date

2811-18-$2812-3-

382814-

11-24

2814-12-

242815-

,-14

2815-12-

242813-

5-14

2814-11-

!nn"alinterest

rate(B)at

Dec 31,2010

3GC/M

8.((5.(1

4.55

4.&14.5&

4.$4

4.$&

4.$2

$GM1.2(

December31,

2010

1,87888

1,8788

8

158788

8

148788

8

(87888

487888

1,8788

December31,

200

1,87888

1,878

88

-

-

-

-

-

-

-

-an"ar+1,

200

1,8788

8

--

--

--

--

2517588

1257&58

5$&7258

1257&5

8


80/273


81/273

LGElectronicsInc.


31,2010and200,,and-an"ar+1,200,

/e6ent"resasof/ecem6er317288,7consistof?


Fi9ed rate notes in local

c"rrenc# P"6lic7 non-

g"aranteed 6onds 4,th

P"6lic7 non-g"aranteed

6onds 51st

P"6lic7 non-

g"aranteed 6onds 52nd

P"6lic7 non-g"aranteed

6onds 53rd

Fi9ed rate notes in

Latest

mat"rit+

date

2812-4-11

2812-2-1&

2811-5-2(

2811-(-$

2818-$-1&

!nn"alinterest

rate(B)at

Dec31,200

5.2&

5.,,

4.38

4.&8

5.88

3G0M8.$5

otal

1,878

88

1,878

88

1,878

88

1,87888

&8875$8

5(3 (

Less

c"rrent

-

-

-

-

&8875$8

-

58(

&88 8

&on'c"rrent

1,87888

1,8788

8

1,8788

8

1,8788

8

-

5(3 (8


82/273

Latest

mat"rit+

date

288,-,-23

2812-4-11

2818-$-1&

2812-5-15

!nn"alinterest

rate(B)at

-an1,200

4.88

5.2&

5.8

8

3G0M8.$5 otal

1587888

1,878

88

&5475

88

$2(7&

58

571(

&

17&1(78$3

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c"rrent

15878

8

8

-

-

-

3&2

14,7$2(

&on'c"rrent

-

1,8788

8

&547588

$2(7&5

8

47(1

5

175$(7435


83/273

LGElectronicsInc.



Carr#ingamo"ntsandfairval"eofnon-c"rrent6orro%ingsconsistof?

December 31,2010

(inmillionsofKorean%arr+ing

December31,200,

%arr+ing

-an"ar+1,200,

%arr+ing

won)0ong-term

6orro%ings

/e6ent"res

otal

amo"nt1735&7&

(8

17&847&

,$

378$275&$

$air

al"e1

173(17$

(4

17&317$

,5

3711373&,

amo"nt$1375

28

1734878

,3

17,537$13

$air

al"e1

$2875

,1

173$&74

$1

17,((7852

amo"nt44175

88

175$(74

35

2788,7,35

$air

al"e1

4587,

34

17$3$71

($

278(&7128

1 he fair val"es are 6ased on the cash flo%s disco"nted "sing the

6orro%ing rate of 4.(1/ecem6er317 288,? 5.8&7 Dan"ar# 17 288,?


84/273

19. /terPa+ables

(inmillionsof

Koreanwon)'on-

tradePa#a6les

*ccr"ed9penses

/eposits )eceived

otal

December31,

2010

1748178

24

171(,7&

&(

137,&&

27$847&&,

December31,

200

1731378

1$

1728472

&8

1&7288

2753474($

-an"ar+1,

200

172($73

,(

171,27$

$&12745&

274,17522


85/273


86/273

!tDecembe

r31 25$7,,$

1(87&83

rade

receiva6les

*ccr"ed

e9penses

Provisions

ainlossonforeign

c"rrenc# translation

ainlossonval"ationof

derivatives

)eserve for

research and

manpo%er

development+thers

#"b

total

a9 credits

carr#for%ards 0oss

$73&

1

2&3785

$

4&73,$

&57853

2&71(&

-

15743

(

4(721$

-

-

4(721

$

3741

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57,8

8

4,741

,

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5

5725

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-

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2&$73,( -

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- 257$34

- ,715(

-

14878(51873(4

1,(1873(4

2347$(4-3$$7&&&

- 38&781,

1873(4 43,7112


87/273

LGElectronicsInc.



200,

(inmillionsofKorean

won)Changes in

temporar# differencesInvestments in

s"6sidiaries7>ointl#

controlledentities and

associates

Propert#7 plant and

e!"ipment radereceiva6les

*ccr"ede9penses

Provisions

ainlossonforeign

c"rrenc# translation

ain loss on

!t-an"ar+1

2(47$

&4

21171(

$

45,

2217(

(,

53745

4

($71(

%argedC

(credited)to

teincome

statement

2275

38

2472

31

$7(3

8

5171$

&

$785(

%argedC

(credited)to

oter

compreensi

eincome

-

-

-

-

-

-

-

1,

$

!tDecember31

2$2714

4

1($7,5

5

$73&1

2&378

5$4&73

,$

&57853

2&71(


88/273

December31,2010 December31, 200, -an"ar+1, 200,


+ther

comprehensive

income

*vaila6le-for-

salefinancial

assets

*ct"arial

gainNloss

otal

efor

e

a9

127$2

1

5572(

3

427$$2

a9

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ts

27&&

&

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,73(5

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4

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12713

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$

187,58

a9

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,,

,

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eforea9

a9

11713&

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-

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*ftereffects

a9

171,5

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9pirationsof"nrecognisedta9lossandta9creditcarr#-for%ardsareasfollo%s?


ithin1

axloss

-

-

axcredit

-

2(74


89/273

LGElectronicsInc.



1


90/273

271,(273&$

otalexpense1357&$5 15$75$&

C"m"lativeact"arial lossesrecognised inthestatementofother

comprehensive incomeasof/ecem6er31728187are437121million288,?

171($million.

44


91/273

LGElectronicsInc.


31,2010and200,,and-an"ar+1,200,

Changesinthedefined6enefito6ligationsforthe#earsended/ecem6er317

2818and288,7areasfollo%s?

(inmillionsofKoreanwon)2010 200,

!t-an"ar+1

C"rrent service

cost ransfer-

ino"tInterest

e9penseenefits

paid

Past service

cost

C"rtailments

Settlements

*ct"arialloss

!tDecember31

$2&715,

12$7&(,

2725$

3$7,31

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--

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527344(857$5$

$5&74$

&

11$7&3

5

27$($

3(7,(8

$$73(8

187$8(

$71&8

13,7555

57(28


92/273

9pectedrateofret"rn

F"t"resalar#increase

December31,

201

0

5.54.3

$.8

December31,

200

,

$.2$.2

$.8

-an"ar+1,

200

,

$.(3.(

$.8

Planassetsconsistof?

imedeposits

Sec"rities com6ined%ithderivativesg"aranteed

otal

December 31,

2010

1,47&8

&

3417&8$

53$7413

December31,

200,

158714

2

2&37&3&

4237(&,

-an"ar+1,

200,

4437&(8

-

4437&(8

45


93/273

LGElectronicsInc.



heamo"ntsofe9periencead>"stmentsarisingontheplanlia6ilitiesand

theplanassetsareasfollo%s?

Present val"eof

o6ligationFairval"e

of planassets

Deicitinteplan

9periencead>"stmentsonplanlia6ilities

9periencead>"stmentsonplanassets

December31,

2010

(857$

5$

53$741

3

2$,724

3

47411

17&53

December31,

200,

$2&71

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4237(&

,

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8

257&$8

47$34

-an"ar+1,

200,

$5&74

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4437&(

8

2137$(

&

-

-


94/273


!t-an"ar+1,200,*ddition

Ktilisation

!tDecember31,200,

%"rrent

&on'c"rrent

=arrant+

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(4

32174

41

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3

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1,$7(,8

32$7533


95/273

LGElectronicsInc.



20. Paid'in%apital

*sof/ecem6er3172818and288,7andDan"ar#17288,7then"m6erof

sharesa"thorisedis$88millionshares.

December31,2010 December31,200,

-an"ar+1,200,

Commonstoc@

Preferred

stoc@1

Par

al"e

per

sare

5788

857888

&"mbero

sares

iss"ed

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,,2

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!mo"n

t(in

millions)

&2372

3,

(57,

38

(8,71$,

!mo"n

t(in

millions)

&2372

3,

(57,

38

(8,71$,

!mo"n

t(in

millions)

&2372

3,

(57,

38

(8,71$,

1he preferred shareholders have no voting rights and are entitled to


96/273


97/273

LGElectronicsInc.


31,2010and200,,and-an"ar+1,200,

todividendaccordingtothespecialta9 treatment controlla%.

Changesin"nappropriatedretainedearningsareasfollo%s?

(inmillionsofKorean

won)!t-an"ar+1

Profit loss for the#ear *ct"arial

lossesNgains

/ividend

!tDecember31

2010

&7(,2754

,$357(&4

417,35

2(27&25

$7,327815

200,

$7(8471$

31714$7(8

4171($

5&7232

&7(,2754,

Separatestatementsofappropriationof retainedearnings#earsended/ecem6er

3172818and288,7areasfollo%s?

#eparate#tatementso!ppropriationoRetained

EarningsearsEndedDecember31,2010and200

(Date o !ppropriation @arc 1> 2011 and @arc 1 2010


98/273


99/273

LGElectronicsInc.



Preferredstoc@?

2585in

28187 17(883$ in288,

$715$7345 57,547$,4

;nappropriatedretainedearningstobe

carriedorardtos"bse*"ent+ear ,, 17(2&738$

22. /ter%omponentsoE*"it+

/etailsofothercomponentsofe!"it#consistof?

(inmillionsof

Koreanwon)

reas"r# shares1

December

31,2010

447(,

3

December

31,200,

447(,

3

-an"ar+

1,200,

447(,

3


100/273

181751&atthereportingdate.

Govementsinthen"m6erofstoc@appreciationrightso"tstandingandtheir

related%eightedaveragestoc@pricesareasfollo%s?

=eigtedaerage

stoc?price(in on)1

&"mberooptions

("nitsares)

eginnin

g

9ercise

d2

nding

2010

11575

14

11471

44

181758&

200,

&&731

1

12&7(,&

1157514

2010

38575

88

387888

2&57588

200,

38&758

8

27888

3857588

4,


101/273

LGElectronicsInc.



1he%eightedaveragestoc@ priceis determined6# anaverageof three

shareprices? averagesharepriceof last t%omonths7 last onemonthand

last one%ee@ fromeachdateof e9ercise.

2his linerepresents the%eightedaverageof thestoc@ prices determined

6# a6ovecalc"lationat eachof e9ercisedates forthe#ear.

he %eighted average fair val"e of options determined "sing the lac@-

Scholes val"ation model%as (7,4$ million 288,? 1$7(24 million. he

significant inp"ts into the model %ere the %eighted average share price of

181758& 288,? 11575147 e9ercise price of &171387 volatilit#of 2$.15

288,?45.$37dividend#ieldof8.,5 288,?8.(,7ane9pectedoption life

of 1.25#ears 288,?2.25#earsandanann"al ris@-free interest rateof3.84

288,?4.3&.

28. &et#ales


102/273

merchandisemplo#ee6enefit

e9penses 'ote2$/epreciation7

amortisation

*dvertisinge9penses

Sales promotional

e9penses

ransportation

e9penses Commission

e9penses+there9penses

otal1

2010

2,&7&&

3

227$4273

(&

271&374

(3

&$478(&

55&731838$7581

(2(7552

1743$7$

(&

372&178

,5

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3

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3$47518$5$744,

1732173$

3

37$($745

&

387&(2783(

1Selling and mar@eting e9penses7 administrative e9penses7 research


103/273

LGElectronicsInc.



2:. Emplo+ee5eneitExpense

(inmillionsofKoreanwon) 2010 200,

ages and

salaries

elfare

e9pense

Stoc@ options 'ote23

/efinedcontri6"tion

plans /efined6enefit

plans 'ote1&+therpost-emplo#ment

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e9pense

otal

17$&&71

5$

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$75(1

17585

1357&$5

1,723,

475&&271&374(3

17$287(

2$

2(,7142

12741,

57(52

15$75$&

1&7,&$

17,$1271847&43


104/273

*mortiHation

a9es andd"es

*dvertisinge9pense

Promotionale9pense

)esearchand

development Service

e9penses

+ther

otal

178$373

3$

112732,

2137238

14724(

55&7318

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,&&7(5

2

11&7,&

5

,&748&

1(7441

,137(3

&

3$47518

3&17&4

8

4(,742

(

2,3722

,

574187,12


105/273


106/273

(inmillionsofKoreanwon) 2010 200,

Foreigne9changeloss

0osses ondisposalof

propert#7 plant ande!"ipment

0osses ondisposalofintangi6leassets

0osses onsettlement of

derivatives +thers

otal

1721(74

8$

1(7$$

$

2(7,,4

-

5473&

4

173287448

175$&74$8

2,75(,

257554

1(783

&

3237&

8(

17,$4734(

52


107/273

LGElectronicsInc.



31. $inancialIncome

(inmillionsof

Koreanwon)Interest

income

/ividendincome

2010

427&&2

1217(5&

200,

4&7&1,

1,,72($

ainonforeignc"rrenc#

translationainon

settlement of derivatives

ainondisposalof

availa6le-for-salefinancial

assets +thers

otal

44,73

$,

($723

$

$733(

171$&

&8&7&3,

1782,74

41

$87&4

2

-

3788,

1734871,&


108/273

s

C"rrent ta9 onprofits forthe

#ear*d>"stments inrespect

of prior#ears

otalc"rrent

tax/eferred

ta9

Changes intemporar# differences

/eferredincometa9 carriedoverfromprior#earotaldeerred

incometax

Incometaxexpense(income)

2010

3&72(

3174$

8

357(23

4&$7,44

-

4&$7,44

441712

1

200,

24(723

8-

24(7238

4$74$&

22753

8

237,3&

2&271$&


109/273

LGElectronicsInc.



hereconciliation6et%eentheta9chargecalc"lated"sing%eightedaverage

ta9rateandtheeffectiveta9rateareasfollo%s?

2010

%angeintax

200,

%angeintax


Proit(loss)beoreincometaxa9 e9pense6asedonstat"tor#

ta9 rate1

a9 ad>"stments?

Incomenot s"6>ect tota9

9penses not ded"cti6leforta9

p"rposes a9 loss andcreditscarr#-for%ards

*d>"stments inrespect of prior#ears

Changes in"nrecogniseddeferred

ta9 assets Changeinta9 rates1

expense

178&$7,,5

2$87$33

2(743,

117428

1,272&

3

174$8

17(3(

31 55

axrate

24.2

2.$

-1.1

1&.,

8.1

8.2

expense

1741(7,&1

34373,1

(712

5

$7,82

1357$3

(

22753

8

&( 8

axrate

24.2

-8.$

8.5

-,.$

-1.$

5.5


110/273

treas"r#shares.Preferredshareshavearight toparticipate intheprofitsof

theCompan#.heseparticipationrightshave6eenconsideredinpresenting

thePSforordinar#sharesandPreferredshares.

*softhereportingdate7theCompan#hasnopotentialordinar#shares.


Profit lossattri6"ta6letoordinar# shares1

eightedaveragen"m6erof ordinar#shares o"tstanding"nit? shares

2

asic earnings perordinar# sharein%on


Profit lossattri6"ta6letopreferredshares1

eightedaveragen"m6erof preferredshares o"tstanding"nit? shares

2

asic earnings perpreferredsharein%on

2010

5$(7(11

1437((47$55

37,53

2010

$&78$3

1&71(1738$

37,83

200,

178237&84

1437((47$5&

&7115

200,

1237181

1&71(1738,

&71$5


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(unit*

shares)

+rdinar#

shares

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2010

1437((47$

53

1&71(17385

200,

1437((47$5&

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/etailsoftheCompan#sdividendsdeclaredasof/ecem6er31728187areasfollo%s?


+rdinar# shares

Preferredsharesotal

%alc"lation

1437((47$53 57888 4Q

1&71(17385 578885Q

!mo"nts

2(7&&&

472,5

3378&2

55

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113/273

LGElectronicsInc.



/etailsoftheCompan#sdividendsdeclaredasof/ecem6er317288,7areasfollo%s?


+rdinar# shares

Preferredshares

otal

%alc"lation

1437((47$5& 5788835Q

1&71(1738( 578883$Q

!mo"nts

2517&,(

387,2&

2(27&25

heCompan#sdividendpa#o"tratiosforthe#earsended/ecem6er317

2818and288,7arecomp"tedasfollo%s?


otaldividends *

Profit lossforthe#ear

2010

3378&2

$357(&4

200,

2(27&25

1714$7(84

25


114/273

LG El t i I


115/273

LGElectronicsInc.



3:. %asGeneratedrom/perations

*reconciliation6et%eenoperatingprofitandnetcashinflo%o"tflo%fromoperatingactivities

isasfollo%s?

(inmillionsofKorean

won)Profit lossfor

the#ear

*d>"stments ?

Interest e9pense

Foreigne9change

loss 0oss onderivatives

/epreciation

*mortisation

0oss ondisposalof propert#7 plant and

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200,1714$7(84

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118/273

LGElectronicsInc.



Significanttransactionsnotaffectingcashflo%sforthe#earsended/ecem6er3172818and288,7areasfollo%s?


)eclassificationof constr"ction-in-

progress of propert#7 plant ande!"ipment

)eclassificationof constr"ction-in-progress

of intangi6leassets

)eclassificationtointangi6leassets

fromlong-termadvances

)eclassificationof c"rrent mat"rities of6orro%ings

2010

1((755(

24&71$4

&578,&

5$,7$,$

200,

2&8721$

$(7513

$37425

&887852

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119/273

performance g"arantee of(57$85 million 288,? ,17,82 million from

Seo"l "arantee Ins"rance relating to thesalescontracts.

5(

LG Electronics Inc


120/273

LGElectronicsInc.



he Compan# is contingentl# lia6le for g"arantees appro9imating

2741273&& million/ecem6er 317 288,?3785,7314 millionJ Dan"ar# 17

288,? 374(47&2( million on the inde6tedness of its s"6sidiaries7 as

follo%s?


0 lectronics "ropeanShared

ServiceCenter.B.0SC

0 lectronics K.S.*.7 Inc.

0KS0 lectronics

icaret *.S.0:

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0 lectronics hailandCo.0td.

otal December31,2010

441733$

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December31,200,

523781$

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heCompan#hascontingentlia6ilities%ithrespecttoinvestigationsand

litigationsarising intheordinar#co"rseof6"siness.Ga>orinvestigationsand

litigationsareasfollo%s?

*t the end of the reporting period7 the Compan# and certain foreign

s"6sidiaries are "nder investigation 6# the "ropean Commission %ith

respect to possi6le anti-competitive activities among C) Cathode )a#

LG Electronics Inc


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LGElectronicsInc.



Inaddition7theCompan#andcertainforeigns"6sidiarieshave6eennamed

asdefendants inan"m6erof classactions 6ro"ght6#p"rchasersofC)

prod"cts intheKnitedStatesand inCanada inconnection%ith thealleged

anti-competitive activities among C) man"fact"rers.he o"tcome of the

casesandeffecton financialstatementsco"ldnot6eascertainedasofthe

reportdate.

Inaddition7theCompan#andcertainforeigns"6sidiarieshave6eennamed

asdefendants inan"m6erofclassactions6ro"ght6#p"rchasersof+//

+ptical /is@ /rive prod"cts in theKnited States and in Canada alleging

violation of antitr"st la%s in connection %ith the anti-competitive activities

among +// man"fact"rers. he o"tcome of the cases and effect onfinancialstatementsco"ldnot6eascertainedasofthereportingdate.

here are a n"m6er of other legal actions that remain pending at the end

of the reportingperiod. It is not anticipated that an#material lia6ilities %ill

arisefromthesecontingentlia6ilitiesotherthanthoseprovidedfor.


123/273

LG Electronics Inc


124/273

LGElectronicsInc.



crademarlicensescommitments

*sof/ecem6er31728187theCompan#hasvario"sagreementsasfollo%s?

P"rpo

seKseof

license

Provisionoflicense

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prod"cts

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RK*0C+GG

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lectronics

Inc.

PanasonicCorporation

andothers

3. RelatedPart+ransactions

S"6sidiariesasof/ecem6er31728187areasfollo%s?

errito &ame

Cent lectronics Philippines Inc


125/273

Center.0C)

ian>in0i>iecartridgeheater

Co.70td.

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lectronics Philippines Inc.0PI0 lectronics IndiaPvt. 0td.0I0 P 0lectronics Indonesia0I'

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0 lectronics ai%anaipeiCo.70td.00 lectronics*"straliaPt#7 0td.0*P0 lectronics Dapan7 Inc.0DP 0 lectronicsDapan70a6.0D0

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126/273

LGElectronicsInc.



E"rope

&ort!merica

0 lectronics *"striam6I0*0 lectronics enel"9 Sales .B.0'0 lectronics C7 s.r.o.0C0 lectronics /e"tschlandm6I0/ 0 lectronics "ropeanIoldings .B.0I0 lectronics

spanaS.*.0S0 lectronics FranceS.*.).00FS0 lectronics IellasS.*.).00IS0 lectronicsItaliaS.p.* 0IS0 lectronics DI "rope.B.0D0 lectronics 0atvia700C00B

0 lectronics Gla%aSp. H o.o0G*0 lectronics Go6ilecommFrance0GF0 lectronics Gag#ar:F 0G:0 lectronics Pols@aSp. H o.o0P00 lectronics Port"galS.*.0P 0 lectronics

P Servicios Integrales 0 S * / C B


127/273

Penn

s#

lge 2010 4q separate

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