LG Electronics Consolidated Financial Statements December 31, 2013 and 2012

Transcription

1 Consolidated Financial Statements

2 Index Page(s) Report of Independent Auditors Consolidated Financial Statements Consolidated Statements of Financial Position... 3 Consolidated Statements of Income... 4 Consolidated Statements of Comprehensive Income... 5 Consolidated Statements of Changes in Equity... 6 Consolidated Statements of Cash Flows

3 Report of Independent Auditors To the Board of Directors and Shareholders of LG Electronics Inc. We have audited the accompanying consolidated statements of financial position of LG Electronics Inc. and its subsidiaries (collectively the Group ) as of December 31, 2013, December 31, 2012 and January 1, 2012, and the related consolidated statements of income, comprehensive income, changes in equity and cash flows for the years ended, expressed in Korean won. These financial statements are the responsibility of the Group s management. Our responsibility is to express an opinion on these financial statements based on our audits. We did not audit the financial statements of certain consolidated subsidiaries, whose financial statements represent 37% of the Group s consolidated total assets as of December 31, 2013, December 31, 2012 and January 1, 2012, respectively, and 53% and 54% of the Group s consolidated total sales for the years ended December 31, 2013 and 2012, respectively. These statements were audited by other auditors whose reports have been furnished us and our opinion, insofar as it relates to the amounts included for those subsidiaries, is based solely on the reports of other auditors. We conducted our audits in accordance with auditing standards generally accepted in the Republic of Korea. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, based on our audits and the reports of the other auditors, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Group as of December 31, 2013, December 31, 2012 and January 1, 2012, and their financial performance and cash flows for the years ended, in conformity with International Financial Reporting Standards as adopted by the Republic of Korea ( Korean IFRS ). Samil PricewaterhouseCoopers, 92 Hangang-daero, Yongsan-gu, Seoul , Korea,

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5 Consolidated Statements of Financial Position, and January 1, 2012 (in millions of Korean won) Assets Note Current assets Cash and cash equivalents 5,6,42 2,645,270 2,185,000 2,781,069 Financial deposits 5,6,42 67,896 54, ,000 Trade receivables 5,7 7,117,402 7,332,761 7,338,759 Loans and other receivables 5,7,42 596, , ,510 Other financial assets 5,8,42 17,430 56,486 1,677 Inventories 9 4,838,830 5,074,500 5,321,845 Current income tax assets 116, , ,897 Other current assets , , ,882 Assets classified as held for sale 11-16,937 6,865 16,325,058 16,308,435 17,279,504 Non-current assets Financial deposits 5,6,42 96, , ,108 Loans and other receivables 5,7,42 601, , ,703 Other financial assets 5,8,42 55,714 67, ,787 Property, plant and equipment 12 10,341,993 9,889,204 9,593,424 Intangible assets 13 1,363,690 1,222,302 1,167,567 Deferred income tax assets 18 1,619,551 1,511,462 1,444,208 Investments in associates and joint ventures 14 4,329,583 4,182,878 4,252,408 Investment property 15 4,923 10,261 10,909 Other non-current assets , , ,520 19,203,006 18,457,615 18,239,634 Total assets 35,528,064 34,766,050 35,519,138 Liabilities December 31, 2013 December 31, 2012 January 1, 2012 Current liabilities Trade payables 5,42 5,691,114 5,626,571 5,750,549 Borrowings 5,16,42 3,022,723 2,715,041 3,871,889 Other payables 5,17,42 2,829,686 2,704,522 2,322,897 Other financial liabilities 5,8,42 10, ,860 Current income tax liabilities 74, ,728 85,651 Provisions , , ,848 Other current liabilities 21 2,721,759 2,707,033 2,676,039 Liabilities related to assets held for sale 11-1,794-15,014,004 14,514,292 15,455,733 Non-current liabilities Borrowings 5,16,42 6,188,306 5,923,346 5,808,491 Other payables 5,17,42 27,670 29,169 20,892 Other financial liabilities 5,8,42 10,663 16, Deferred income tax liabilities 18 7,651 10,568 15,237 Net defined benefit liability , , ,125 Provisions , , ,632 Other non-current liabilities 21 10,687 3,298 3,238 7,824,691 7,546,011 6,906,993 Total liabilities 22,838,695 22,060,303 22,362,726 Equity attributable to owners of the Parent Company Paid-in capital: 22 Capital stock 904, , ,169 Share premium 3,088,179 3,088,179 3,088,179 Retained earnings 23 8,885,523 8,723,950 8,792,879 Accumulated other comprehensive loss 24 (907,440) (675,098) (327,469) Other components of equity 25 (231,229) (242,111) (242,223) 11,739,202 11,799,089 12,215,535 Non-controlling interest 950, , ,877 Total equity 12,689,369 12,705,747 13,156,412 Total liabilities and equity 35,528,064 34,766,050 35,519,138 The accompanying notes are an integral part of these consolidated financial statements. 3

6 Consolidated Statements of Income Years ended (in millions of Korean won, except per share amounts) Note Net sales 27 58,140,376 55,122,623 Cost of sales 28 44,720,669 42,252,184 Gross profit 13,419,707 12,870,439 Selling and marketing expenses 28,29 7,045,671 6,913,971 Administrative expenses 28,29 1,351,797 1,295,119 Research and development expenses 28,29 2,293,373 2,101,989 Service costs 28,29 1,444,197 1,342,637 Operating income 1,284,669 1,216,723 Financial income , ,507 Financial expenses , ,248 Gain from equity method valuation ,000 86,917 Other non-operating income 33 1,191,329 1,373,026 Other non-operating expenses 34 1,624,810 1,738,265 Profit before income tax 576, ,660 Income tax expense , ,858 Profit for the year 222, ,802 Profit for the year attributable to: Equity holders of the Parent Company 176,768 92,382 Non-controlling interest 45,936 10,420 Earnings per share attributable to the equity holders of the Parent Company during the year (in won): 36 Earnings per share for profit attributable to the common equity holders of the Parent Company Earnings per share for profit attributable to the preferred equity holders of the Parent Company 1, The accompanying notes are an integral part of these consolidated financial statements. 4

7 Consolidated Statements of Comprehensive Income Years ended (in millions of Korean won) Note Profit for the year 222, ,802 Other comprehensive income(loss), net of tax Items that will not be reclassified subsequently to profit or loss: Remeasurements of the net defined benefit liability 19 26,482 (111,003) Share of remeasurements for the net defined benefit liability of associates (22,641) Items that will be reclassified subsequently to profit or loss: Other comprehensive income(loss) from associates and joint ventures 14 (25,310) (43,558) Cash flow hedges 8 5,773 4,184 Available-for-sale financial assets 8 5,846 (601) Currency translation differences (216,718) (330,864) Other comprehensive loss for the year, net of tax (203,309) (504,483) Total comprehensive income(loss) for the year, net of tax 19,395 (401,681) Comprehensive income(loss) for the year, net of tax, attributable to: Equity holders of the Parent Company (33,897) (379,676) Non-controlling interest 53,292 (22,005) Total comprehensive income(loss) for the year, net of tax 19,395 (401,681) The accompanying notes are an integral part of these consolidated financial statements. 5

8 Consolidated Statements of Changes in Equity Years ended (in millions of Korean won) Note Paid-in Capital Attributable to equity holders of the Parent Company Retained Earnings Accumulated Other Comprehensive Income(loss) Other Components of Equity Non-controlling Interest Balance at January 1, ,992,348 9,499,534 (326,584) (271,339) 12,893, ,289 13,148,248 Effect of changes in accounting policies 2 - (706,655) (885) 29,116 (678,424) 686,588 8,164 Restated amount 3,992,348 8,792,879 (327,469) (242,223) 12,215, ,877 13,156,412 Comprehensive income: Profit for the year - 92, ,382 10, ,802 Remeasurements of the net defined benefit liability 19 - (101,788) - - (101,788) (9,215) (111,003) Share of remeasurements for the net defined benefit liability of associates 14 - (22,641) - - (22,641) - (22,641) Share of other comprehensive loss of associates and joint ventures (43,558) - (43,558) - (43,558) Cash flow hedges ,184-4,184-4,184 Available-for-sale financial assets (671) - (671) 70 (601) Currency translation differences - (307,584) - (307,584) (23,280) (330,864) Total comprehensive income - (32,047) (347,629) - (379,676) (22,005) (401,681) Transaction with equity holders: Dividends 37 - (36,872) - - (36,872) (21,961) (58,833) Changes in ownership interest over subsidiaries (155) - Issuance of common shares of subsidiaries ,820 8,820 Conversion rights and stock warrants of subsidiaries exercised ,082 1,082 Others - (10) - (43) (53) - (53) Total transactions with equity holders - (36,882) (36,770) (12,214) (48,984) Balance at December 31, ,992,348 8,723,950 (675,098) (242,111) 11,799, ,658 12,705,747 Total Total Equity Balance at January 1, ,992,348 8,723,950 (675,098) (242,111) 11,799, ,658 12,705,747 Comprehensive income: Profit for the year - 176, ,768 45, ,704 Remeasurements of the net defined benefit liability 19-21, ,059 5,423 26,482 Share of remeasurements for the net defined benefit liability of associates Share of other comprehensive loss of associates and joint ventures (25,310) - (25,310) - (25,310) Cash flow hedges ,773-5,773-5,773 Available-for-sale financial assets ,820-5, ,846 Currency translation differences - - (218,625) - (218,625) 1,907 (216,718) Total comprehensive income - 198,445 (232,342) - (33,897) 53,292 19,395 Transaction with equity holders: Dividends 37 - (36,872) - - (36,872) (17,394) (54,266) Issuance of convertible bonds by subsidiary ,886 10,886 11,861 22,747 Establishment of subsidiary Conversion rights of subsidiaries exercised Changes in ownership interest over subsidiaries (4) (4) 6 2 Return of investments in subsidiary (4,311) (4,311) Total transactions with equity holders - (36,872) - 10,882 (25,990) (9,783) (35,773) Balance at December 31, ,992,348 8,885,523 (907,440) (231,229) 11,739, ,167 12,689,369 The accompanying notes are an integral part of these consolidated financial statements. 6

9 Consolidated Statements of Cash Flows Years ended (in millions of Korean won) Note Cash flows from operating activities Cash generated from operations 38 2,956,633 2,914,592 Interest received 73,096 87,904 Interest paid (381,320) (417,966) Dividends received 10,732 36,640 Income tax paid (448,239) (520,118) Net cash generated from operating activities 2,210,902 2,101,052 Cash flows from investing activities Decrease in financial deposits 36, ,699 Decrease in loans and other receivables 244, ,197 Proceeds from disposal of other financial assets 99,379 49,630 Proceeds from disposal of property, plant and equipment 62, ,209 Proceeds from disposal of intangible assets 9,796 8,410 Proceeds from disposal of and recovery of investments in associates and joint ventures 1, ,412 Business transfer 38 29,733 - Proceeds from disposal of assets held for sale 17,418 7,721 Proceeds from disposal of investment property 5, Decrease in other assets 1,188 - Increase in financial deposits (25,455) (11,193) Increase in loans and other receivables (258,264) (216,208) Acquisition of other financial assets (28,211) (52,553) Acquisition of property, plant and equipment (2,117,161) (1,770,222) Acquisition of intangible assets (408,327) (354,756) Acquisition of investments in associates and joint ventures (57,314) (26,098) Decrease in cash and cash equivalents due to changes in scope of of subsidiaries (3,822) (44,585) Acquisition of other assets (75) (870) Net cash used in investing activities (2,390,714) (1,701,349) Cash flows from financing activities Proceeds from borrowings 4,022,901 2,418,594 Issuance of common shares of subsidiaries 40 8,820 Stock warrants exercised Repayments of borrowings (3,297,444) (3,304,078) Dividends paid 37 (58,526) (59,065) Net cash provided by(used in) financing activities 666,971 (935,357) Exchange losses on cash and cash equivalents (26,889) (60,415) Net increase(decrease) in cash and cash equivalents 460,270 (596,069) Cash and cash equivalents at the beginning of year 6 2,185,000 2,781,069 Cash and cash equivalents at the end of year 6 2,645,270 2,185,000 The accompanying notes are an integral part of these consolidated financial statements. 7

10 1. General Information LG Electronics Inc.(the Parent Company) was spun off from LG Electronics Investment Ltd. on April 1, The Parent Company s shares are listed on the Korea Exchange, and some of its preferred shares, in the form of global depositary receipts ( DRs ), are listed on the London Stock Exchange as of the reporting date. The Parent Company is domiciled in Korea at Yeoui-daero, Yeungdeungpo-gu, Seoul. As of December 31, 2013, LG Corp. owns 33.7% of the Parent Company s total shares, excluding preferred shares, while financial institutions, foreign investors and others own the rest. The Group is engaged in the manufacture and sale of electronic products including mobile phones, TV, air conditioners, refrigerators, washing machines and personal computers. As of December 31, 2013, the Group operates six business segments and other supporting segments through the Parent Company and subsidiaries all over the world. The Parent Company as of December 31, 2013, has 138 subsidiaries and its consolidated subsidiaries as of December 31, 2013, are as follows: 8

11 (a) Consolidated subsidiaries as of December 31, 2013, are as follows: Territory Location Subsidiaries The Republic of Korea Percentage of ownership Noncontrolling Controlling interest interest Percentage of ownership Noncontrolling Controlling interest interest Korea Hiplaza Co., Ltd % % - December Korea Hi Business Logistics Co., Ltd. Closing Month Major Business Basis of control Wholesales and Retails of 100.0% % - December Services of Logistics Korea Hi Entech Co., Ltd % % - December Water engineering Korea LG Hitachi Water Solution Co., Ltd. 51.0% 49.0% 51.0% 49.0% December Water treatment Korea ACE R&A Co., Ltd % % - December Production and Sales of Air conditioner Korea Hi M Solutek 100.0% % - December Maintenance Korea Hi Teleservice Co., Ltd % % - December Marketing Services Korea LGE Alliance Fund 96.2% 3.8% 96.2% 3.8% December Investment Korea Innovation Investment Fund 83.3% 16.7% 83.3% 16.7% December Investment Korea LG Innotek Co., Ltd % 52.1% 47.9% 52.1% December Production and Sales of Electronic materials De-facto control Korea LG Innotek Alliance Fund % 52.6% 47.4% 52.6% December Investment De-facto control Korea Innowith Co., Ltd % 52.1% 47.9% 52.1% December Cleaning Services De-facto control Korea Hanuri Co., Ltd % December Cleaning Services 9

12 Territory Location Subsidiaries Percentage of ownership Noncontrolling Controlling interest interest Percentage of ownership Noncontrolling Controlling interest interest Closing Month Major Business Basis of control Korea LGE Alliance Fund Ⅱ 98.7% 1.3% - - December Investment China China Hi Logistics (China) Co., Ltd % % - December Services of Logistics China China China Inspur LG Digital Mobile Communications Co., Ltd.(LGEYT) 70.0% 30.0% 70.0% 30.0% December LG Electronics (China) Co., Ltd.(LGECH) 100.0% % - December LG Electronics (China) Research and Development Centre Co., Ltd.(LGERD) Production of Sales of 100.0% % - December R&D China China China China LG Electronics (Hangzhou) Co., Ltd.(LGEHN) 70.0% 30.0% 70.0% 30.0% December LG Electronics (Kunshan) Computer Co., Ltd.(LGEKS) LG Electronics (Shanghai) Research and Development Center Co., Ltd.(LGCRC) LG Electronics Air- Conditioning(Shandong) Co., Ltd.(LGEQA) 100.0% % - December Production of Production of 100.0% % - December R&D 100.0% % - December Production and Sales of China LG Electronics HK Ltd.(LGEHK) 100.0% % - December Sales of 10

13 Territory Location Subsidiaries China China China China China China China China China Percentage of ownership Noncontrolling Controlling interest interest Percentage of ownership Noncontrolling Controlling interest interest LG Electronics Huizhou Ltd.(LGEHZ) 80.0% 20.0% 80.0% 20.0% December LG Electronics Nanjing Display Co., Ltd.(LGEND) 70.0% 30.0% 70.0% 30.0% December Closing Month Major Business Basis of control Production of Production of LG Electronics Qinhuangdao Inc.(LGEQH) 100.0% % - December Production of Casting LG Electronics Shenyang Inc.(LGESY) 78.9% 21.1% 78.9% 21.1% December LG Electronics Tianjin Appliances Co., Ltd.(LGETA) NanJing LG-Panda Appliances Co., Ltd.(LGEPN) Qingdao LG Inspur Digital Communication Co., Ltd.(LGEQD) 80.0% 20.0% 80.0% 20.0% December 70.0% 30.0% 70.0% 30.0% December 70.0% 30.0% 70.0% 30.0% December Shanghai LG Electronics Co., Ltd.(LGESH) 70.0% 30.0% 70.0% 30.0% December Taizhou LG Electronics Refrigeration Co., Ltd.(LGETR) 100.0% % - December Production of Production of Production of Production of Production of Production of China China China Tianjin Lijie cartridge heater Co., Ltd.(LGETL) 66.7% 33.3% 66.7% 33.3% December Production of Heater LG Innotek (Yantai) Co., Ltd.(LGITYT) % 52.1% 47.9% 52.1% December LG Innotek (Huizhou) Co., Ltd.(LGITHZ) % 52.1% 47.9% 52.1% December Production and Sales of Electronic materials Production and Sales of Electronic materials De-facto control De-facto control 11

14 Asia Territory Location Subsidiaries China China China Percentage of ownership Noncontrolling Controlling interest interest Percentage of ownership Noncontrolling Controlling interest interest LG Innotek (Fuzhou) Co., Ltd.(LGITFZ) % 52.1% 47.9% 52.1% December LG Innotek (Guangzhou) Co., Ltd.(LGITGZ) % 52.1% 47.9% 52.1% December LG Innotek Trading (Shanghai) Co., Ltd.(LGITSH) % 52.1% 47.9% 52.1% December Closing Month Major Business Basis of control Production and Sales of Electronic materials Production and Sales of Electronic materials Sales of Electronic materials China HiEntech (Tianjin) Co., LTD % December Water engineering China Australia India Japan Japan Malaysia Philippines Singapore VENS BEIJING VEHICLE ENGINEERING CO.,LTD 100.0% December LG Electronics Australia Pty, Ltd.(LGEAP) 100.0% % - December LG Electronics India Pvt. Ltd.(LGEIL) % % - March Automotive engineering Sales of Production and Sales of LG Electronics Japan Lab. Inc.(LGEJL) 100.0% % - December R&D LG Electronics Japan, Inc.(LGEJP) 100.0% % - December LG Electronics Malaysia SDN. BHD(LGEML) 100.0% % - December LG Electronics Philippines Inc.(LGEPH) 100.0% % - December LG Electronics Singapore PTE LTD.(LGESL) 100.0% % - December Sales of Sales of Sales of Sales of De-facto control De-facto control De-facto control Taiwan LG Electronics Taiwan 100.0% % - December Sales of 12

15 Territory Location Subsidiaries Taipei Co., Ltd.(LGETT) Percentage of ownership Noncontrolling Controlling interest interest Percentage of ownership Noncontrolling Controlling interest interest Closing Month Major Business Basis of control Thailand Vietnam India Indonesia LG Electronics Thailand Co., Ltd.(LGETH) 100.0% % - December LG Electronics Vietnam Co., Ltd.(LGEVN) 100.0% % - December Production and Sales of Production and Sales of LG Soft India Private Limited.(LGSI) % % - March R&D P.T. LG Electronics Indonesia(LGEIN) 100.0% % - December Production and Sales of Philippines LG Electronics Pasig Inc % 62.0% 38.0% 62.0% December Real estates De-facto control India Malaysia Indonesia Hi Logistics India Private Limited % % - March Services of Logistics HI LOGISTICS MALAYSIA SDN BHD 100.0% % - December Services of Logistics PT LG Innotek Indonesia(LGITIN) % 52.1% 47.9% 52.1% December Production and Sales of Electronic materials De-facto control Taiwan LG Innotek (Taiwan) Ltd.(LGITTW) % 52.1% 47.9% 52.1% December Malaysia V-ENS (M) Sdn. Bhd % December Vietnam LG Electronics Vietnam Haiphong Co., Ltd.(LGEVH) 100.0% December Sales of Electronic materials Automotive engineering Production of De-facto control 13

16 Territory Location Subsidiaries Percentage of ownership Noncontrolling Controlling interest interest Percentage of ownership Noncontrolling Controlling interest interest Closing Month Major Business Basis of control Europe Netherlands Hi Logistics Europe B.V % % - December Services of Logistics Austria Netherlands Czech Republic Germany Spain Netherlands Netherlands France Greece Italy Latvia LG Electronics Austria GmbH(LGEAG) 100.0% % - December LG Electronics Benelux Sales B.V.(LGEBN) 100.0% % - December LG Electronics CZ, s.r.o.(lgecz) 100.0% % - December LG Electronics Deutschland GmbH(LGEDG) 100.0% % - December LG Electronics Espana S.A.(LGEES) 100.0% % - December Sales of Sales of Sales of Sales of Sales of LG Electronics European Holdings B.V.(LGEEH) 100.0% % - December European Holding LG Electronics European Shared Service Center B.V.(LGESC) 100.0% % - December Services LG Electronics France S.A.S.(LGEFS) 100.0% % - December LG Electronics Hellas S.A.(LGEHS) 100.0% % - December LG Electronics Italia S.p.A(LGEIS) 100.0% % - December LG Electronics Latvia, LLC(LGELV) 100.0% % - December Sales of Sales of Sales of Sales of 14

17 Territory Location Subsidiaries Hungary Poland France Sweden Norway Poland Portugal Romania UK Poland Poland Percentage of ownership Noncontrolling Controlling interest interest Percentage of ownership Noncontrolling Controlling interest interest LG Electronics Magyar KFT(LGEMK) 100.0% % - December LG Electronics Mlawa Sp. z o.o(lgema) 100.0% % - December Closing Month Major Business Basis of control Sales of Production of LG Electronics Mobilecomm France(LGEMF) 100.0% % - December R&D LG Electronics Nordic AB(LGESW) 100.0% % - December LG Electronics Norway AS(LGENO) 100.0% % - December LG Electronics Polska Sp. z o.o(lgepl) 100.0% % - December LG Electronics Portugal S.A.(LGEPT) 100.0% % - December LG Electronics Romania S.R.L.(LGERO) 100.0% % - December LG Electronics United Kingdom Ltd.(LGEUK) 100.0% % - December LG Electronics Wroclaw Sp.z o.o(lgewr) 100.0% % - December LG Innotek Poland Sp z o.o.(lgitpo) % 52.1% 47.9% 52.1% December Sales of Sales of Sales of Sales of Sales of Sales of Production of Production and Sales of Electronic metarials De-facto control North America USA LG Electronics Miami Inc.(LGEMI) 100.0% % - December Sales of 15

18 Territory Location Subsidiaries USA Canada Mexico Mexico USA Percentage of ownership Noncontrolling Controlling interest interest Percentage of ownership Noncontrolling Controlling interest interest Closing Month Major Business Basis of control LG Electronics Alabama Inc.(LGEAI) 100.0% % - December Services LG Electronics Canada, Inc.(LGECI) 100.0% % - December LG Electronics Mexicalli, S.A. DE C.V.(LGEMX) 100.0% % - December LG Electronics Mexico S.A. DE C.V.(LGEMS) 100.0% % - December LG Electronics Mobile Research U.S.A., L.L.C.(LGEMR) Sales of Production of Sales of 100.0% % - December R&D USA Mexico LG Electronics Mobilecomm U.S.A., Inc.(LGEMU) 100.0% % - December LG Electronics Monterrey Mexico S.A.de C.V.(LGEMM) 100.0% % - December Sales of Production of Mexico USA LG Electronics Reynosa S.A. DE C.V.(LGERS) 100.0% % - December LG Electronics U.S.A., Inc.(LGEUS) 100.0% % - December USA LG Receivable Funding LLC 100.0% % - December Mexico Production of Sales of Special Purpose Company Servicios Integrales LG S.A DE C.V 100.0% % - December Services 16

19 Territory Location Subsidiaries Mexico USA Percentage of ownership Noncontrolling Controlling interest interest Percentage of ownership Noncontrolling Controlling interest interest Closing Month Major Business Basis of control Servicios LG Monterrey Mexico S.A. de C.V % % - December Services Zenith Electronics Corporation of Pennsylvania 100.0% % - December Production of USA USA Zenith Electronics Corporation(Zenith) 100.0% % - December R&D LG Innotek USA, Inc.(LGITUS) % 52.1% 47.9% 52.1% December Sales of De-facto control South America Mexico HILOGISTICS MEXICO SA DE CV 100.0% December Services of Logistics Mexico HiLogistics Reynosa 100.0% December Services of Logistics USA HiLogistics USA 100.0% December Services of Logistics Mexico LG Innotek Mexico SA DE CV(LGITMX) % 52.1% - - December Production and Sales of Automotive materials Brazil LG Armagem Geral Ltda % % - December Services Argentina Colombia Brazil LG Electronics Argentina S.A.(LGEAR) 100.0% % - December LG Electronics Colombia Ltda.(LGECB) 100.0% % - December LG Electronics do Brasil Ltda.(LGEBR) 100.0% % - December Sales of Sales of Production and Sales of De-facto control 17

20 Territory Location Subsidiaries Honduras Chile Panama Peru Venezuela Percentage of ownership Noncontrolling Controlling interest interest Percentage of ownership Noncontrolling Controlling interest interest LG Electronics Honduras S.de R.L % 80.0% 20.0% 80.0% December LG Electronics Inc Chile Ltda.(LGECL) 100.0% % - December LG Electronics Panama, S.A.(LGEPS) 100.0% % - December LG Electronics Peru S.A.(LGEPR) 100.0% % - December LG Electronics Venezuela S.A.(LGEVZ) Closing Month Major Business Basis of control Sales of De-facto control Sales of Sales of Sales of 100.0% % - December Sales of Brazil SOCIO VIP Ltda % % - December Services Panama C&S America Solutions 100.0% % - December Services Panama LG Consulting corp % % - December Services Guatemala LG Electronics Guatemala S.A % % - December Sales of Middle East and Africa Nigeria Easytec Global Services Innovation Limited 100.0% % - December Services Angola LG Electronics Angola Limitada(LGEAO) 100.0% % - December Sales and Services of Jordan LG Electronics (Levant) Jordan(LGELF) 100.0% % - December Sales of 18

21 Territory Location Subsidiaries UAE Algeria UAE Egypt UAE UAE Morocco Nigeria Tunisia UAE South Africa Turkey Percentage of ownership Noncontrolling Controlling interest interest Percentage of ownership Noncontrolling Controlling interest interest LG Electronics Africa Logistics FZE(LGEAF) 100.0% % - December LG Electronics Algeria SARL(LGEAS) 70.0% 30.0% 70.0% 30.0% December LG Electronics Dubai FZE(LGEDF) 100.0% % - December LG Electronics Egypt S.A.E(LGEEG) 100.0% % - December LG Electronics Gulf FZE(LGEGF) 100.0% % - December Closing Month Major Business Basis of control Sales of Sales of Sales of Production and Sales of Sales of LG Electronics Middle East Co., Ltd.(LGEME) 100.0% % - December Services LG Electronics Morocco S.A.R.L(LGEMC) 100.0% % - December LG Electronics Nigeria Limited(LGENI) 100.0% % - December LG Electronics North Africa Service Company S.A.R.L 100.0% % - December LG Electronics Overseas Trading FZE(LGEOT) 100.0% % - December LG Electronics S.A. (Pty) Ltd.(LGESA) 100.0% % - December LG Electronics Ticaret A.S.(LGETK) 100.0% % - December Sales of Sales of Sales of Sales of Production and Sales of Sales of 19

22 Territory Location Subsidiaries Saudi Arabia Kenya Saudi Arabia Percentage of ownership Noncontrolling Controlling interest interest Percentage of ownership Noncontrolling Controlling interest interest LG-Shaker Co., Ltd.(LGESR) % 51.0% 49.0% 51.0% December Closing Month Major Business Basis of control Production of De-facto control LG Electronics Service Kenya Limited(LGESK) 100.0% % - December Services LG Electronics Saudi Arabia Limited 100.0% % - December Services UAE Hi Logistics Middle East FZE 100.0% December Services of Logistics Other Russia LG Alina Electronics(LGERI) 95.0% 5.0% 95.0% 5.0% December Services Kazakhstan Russia Ukraine LG Electronics Almaty Kazakhstan(LGEAK) 100.0% % - December LG Electronics RUS, LLC(LGERA) 100.0% % - December LG Electronics Ukraine Inc.(LGEUR) 100.0% % - December Production and Sales of Production and Sales of Sales of 1 Although the Parent Company holds less than half of the of LG Innotek Co., Ltd. which is an intermediate parent of its subsidiaries, the Parent Company is deemed to have control over LG Innotek Co., Ltd. when considering the size and dispersion of holdings of the other vote holders and the voting patterns at previous shareholders meetings (Note 3). 2 Control exists as there is power over more than half of the by virtue of an agreement with other investors although the Parent Company holds less than half of the voting power. 3 Although the Parent Company holds less than half of the, the Group is deemed to have control as the Parent Company has the substantial power to direct the relevant activities and is exposed to variable returns. 4 In the preparation of consolidated financial statements, the financial statements for the year ended December 31, 2013, were used for those subsidiaries with different fiscal year ends. 20