Related Parties and Others | 28. Related Parties and Others (a) Related parties Related parties for the periods presented are as follows: Classification Description Associates(*) Paju Electric Glass Co., Ltd. and others Entity that has significant influence over the Controlling Company LG Electronics Inc. Subsidiaries of the entity that has significant influence over the Controlling Company Subsidiaries of LG Electronics Inc. (*) Details of associates are described in note 8. (b) Significant transactions such as sales of goods and purchases of raw material and outsourcing service and others, which occurred in the normal course of business with related parties for the years ended December 31, 2016, 2017 and 2018 are as follows: (In millions of won) 2016 Purchase and others Sales and others Dividend Purchase of raw material Acquisition of Outsourcing Other costs Joint Venture Suzhou Raken Technology Co., Ltd.(*1) W 59,388 29,902 — — — 543 Associates and their subsidiaries New Optics Ltd. W 2,469 — 50,372 — 7,569 255 New Optics USA, Inc. — — — — 509 — NEWOPTIX RS. SA DE CV 33 — — — — — INVENIA Co., Ltd. 54 — 1,429 48,398 — 261 TLI Inc.(*2) — 101 57,429 — — 2,238 AVACO Co., Ltd.(*2) — 128 703 31,299 — 1,373 AVATEC Co., Ltd. — 265 — — 70,196 1,027 Paju Electric Glass Co., Ltd. — 21,030 453,463 — — 3,674 Shinbo Electric Co., Ltd. 204,637 — 355,607 — 2,449 1,097 Narenanotech Corporation 17 — 513 24,821 — 909 WooRee E&L Co., Ltd. — — — — — 32 YAS Co., Ltd. 44 — 2,076 80,836 — 1,758 LB Gemini New Growth Fund No. 16 — 8,394 — — — — W 207,254 29,918 921,592 185,354 80,723 12,624 ( In millions of won ) 2016 Purchase and others Sales and others Dividend Purchase of Acquisition of Outsourcing Other costs Entity that has significant influence over the Controlling Company LG Electronics Inc. W 1,580,279 — 23,047 538,175 — 103,158 Subsidiaries of the entity that has significant influence over the Controlling Company LG Electronics India Pvt. Ltd. W 75,591 — — — — 69 LG Electronics Vietnam Haiphong Co., Ltd. 162,893 — — — — 141 LG Electronics Nanjing New Technology Co., Ltd. 229,773 — — 293 — 1,876 LG Electronics RUS, LLC 127,316 — — — — 2,993 LG Electronics do Brasil Ltda. 133,903 — — — — 3,430 LG Innotek Co., Ltd. 11,503 — 209,878 — — 9,873 Qingdao LG Inspur Digital Communication Co., Ltd. 47,804 — — — — — Inspur LG Digital Mobile Communications Co., Ltd. 370,966 — — — — 5 LG Electronics Mexicalli, S.A. DE C.V. 210,021 — — — — 77 LG Electronics Mlawa Sp. z o.o. 709,558 — — — — 895 LG Electronics Taiwan Taipei Co., Ltd. 11,919 — — — — 27 ( In millions of won ) 2016 Sales and others Purchase and others Dividend Purchase of Acquisition of Outsourcing Other costs LG Electronics Wroclaw Sp. z o.o. W 290,785 — — — — 99 LG Hitachi Water Solutions Co., Ltd. — — — 167,987 — 2,782 LG Electronics Reynosa, S.A. DE C.V. 1,074,790 — — — — 1,907 LG Electronics Almaty Kazakhstan 15,953 — — — — 33 LG Electronics Air-Conditioning — — — 4,994 — 259 Hi Entech Co., Ltd. — — — — — 25,365 Hientech (Tianjin) Co., Ltd. — — — 28,587 — 10,613 LG Electronics S.A. (Pty) Ltd 21,236 — — — — 39 Others 2,289 — — — — 4,094 W 3,496,300 — 209,878 201,861 — 64,577 W 5,343,221 59,820 1,154,517 925,390 80,723 180,902 (*1) Represents transactions occurred prior to exchange of equity interests. (*2) Represent transactions occurred prior to disposal of the entire investments. ( In millions of won ) 2017 Sales and others Purchase and others Dividend Purchase of Acquisition of Outsourcing Other costs Associates and their subsidiaries New Optics Ltd.(*) W 1 — — — 4 6 INVENIA Co., Ltd. — — 1,862 66,548 — 2,259 AVATEC Co., Ltd. — 530 — — 90,785 720 Paju Electric Glass Co., Ltd. — 8,109 380,815 — — 4,225 Shinbo Electric Co., Ltd.(*) 15,812 — — — — 21 Narenanotech Corporation(*) — — 279 21,727 — 244 WooRee E&L Co., Ltd. — — — — — 175 YAS Co., Ltd. — — 6,347 69,243 — 2,474 W 15,813 8,639 389,303 157,518 90,789 10,124 Entity that has significant influence over the Controlling Company LG Electronics Inc. W 1,689,381 — 47,898 906,427 — 109,865 Subsidiaries of the entity that has significant influence over the Controlling Company LG Electronics India Pvt. Ltd. W 71,597 — — — — 163 LG Electronics Vietnam Haiphong Co., Ltd. 205,934 — — 8,892 — 198 ( In millions of won ) 2017 Sales and others Purchase and others Dividend Purchase of Acquisition of Outsourcing Other LG Electronics Nanjing New Technology Co., Ltd. W 300,785 — — 245 — 379 LG Electronics RUS, LLC 103,479 — — — — 963 LG Electronics do Brasil Ltda. 228,821 — — — — 430 LG Innotek Co., Ltd. 14,836 — 199,896 — — 5,692 Qingdao LG Inspur Digital Communication Co., Ltd. 77,787 — — — — — Inspur LG Digital Mobile Communications Co., Ltd. 230,832 — — — — — LG Electronics Mexicalli, S.A. DE C.V. 319,772 — — — — 186 LG Electronics Mlawa Sp. z o.o. 847,565 — — — — 985 LG Electronics Taiwan Taipei Co., Ltd. 13,693 — — — — 164 LG Hitachi Water Solutions Co., Ltd. — — — 318,978 — 1,532 LG Electronics Reynosa, S.A. DE C.V. 1,287,340 — — — — 1,926 LG Electronics Almaty Kazakhstan 14,079 — — — — 53 LG Electronics Air-Conditioning — — 255 3,744 — 2,621 HiEntech Co., Ltd. — — — 6,991 — 34,432 Hientech (Tianjin) Co., Ltd. — — — 21,838 — 11,822 LG Electronics S.A. (Pty) Ltd. 14,155 — — — — 25 Others 857 — 3 14 — 7,264 W 3,731,532 — 200,154 360,702 — 68,835 W 5,436,726 8,639 637,355 1,424,647 90,789 188,824 (*) Represents transactions occurred prior to disposal of the entire investments. ( In millions of won ) 2018 Sales and others Purchase and others Dividend Purchase of Acquisition of Outsourcing Other costs Associates and their subsidiaries INVENIA Co., Ltd. — 30 1,608 58,111 — 896 AVATEC Co., Ltd. — 530 — — 71,403 905 Paju Electric Glass Co., Ltd. — 4,172 364,183 — — 4,411 WooRee E&L Co., Ltd. — — 58 — — 144 YAS Co., Ltd. — — 5,281 143,192 — 3,391 LB Gemini New Growth Fund No. 16 1,112 540 — — — — W 1,112 5,272 371,130 201,303 71,403 9,747 Entity that has significant influence over the Controlling Company LG Electronics Inc. W 1,215,153 — 36,522 1,041,563 — 127,775 Subsidiaries of the entity that has significant influence over the Controlling Company LG Electronics India Pvt. Ltd. W 71,798 — — — — 103 LG Electronics Vietnam Haiphong Co., Ltd. 173,051 — — 4,541 — 166 ( In millions of won ) 2018 Sales and others Purchase and others Dividend Purchase of Acquisition of Outsourcing Other costs LG Electronics Nanjing New Technology Co., Ltd. W 223,524 — — 424 — 1,528 LG Electronics RUS, LLC 106,631 — — — — 2,673 LG Electronics do Brasil Ltda. 192,775 — — — — 350 LG Innotek Co., Ltd. 29,267 — 147,453 — — 39,136 Qingdao LG Inspur Digital Communication Co., Ltd. 37,738 — — — — — Inspur LG Digital Mobile Communications Co., Ltd. 131,970 — — — — 1 LG Electronics Mexicalli, S.A. DE C.V. 187,844 — — — — 210 LG Electronics Mlawa Sp. z o.o. 740,784 — — — — 631 LG Electronics Taiwan Taipei Co., Ltd. 12,746 — — — — 330 LG Hitachi Water Solutions Co., Ltd. 9,100 — — 304,365 — 8,980 LG Electronics Reynosa, S.A. DE C.V. 1,030,414 — — — — 2,021 LG Electronics Almaty Kazakhstan 3,759 — — — — 42 LG Electronics Air-Conditioning — — 330 26,871 — 7,264 HiEntech Co., Ltd. — — — 22,378 — 29,215 Hientech (Tianjin) Co., Ltd. — — — 92,900 — 23,880 LG Electronics S.A. (Pty) Ltd. 7,244 — — — — 20 LG Electronics Egypt S.A.E. 25,491 — — — — 16 Others 5,195 — 28 15 — 11,480 W 2,989,331 — 147,811 451,494 — 128,046 W 4,205,596 5,272 555,463 1,694,360 71,403 265,568 (c) Trade accounts and notes receivable and payable as of December 31, 2017and 2018 are as follows: ( In millions of won ) Trade accounts and notes receivable and others Trade accounts and notes payable and others December 31, 2017 December 31, 2018 December 31, 2017 December 31, 2018 Associates INVENIA Co., Ltd. 2,375 2,000 18,662 30,179 AVATEC Co., Ltd. — — 2,949 4,382 Paju Electric Glass Co., Ltd. — — 60,141 60,566 WooRee E&L Co., Ltd. — — 61 7 YAS Co., Ltd. 375 — 6,474 6,145 W 2,750 2,000 88,287 101,279 Entity that has significant influence over the Controlling Company LG Electronics Inc. W 550,335 247,679 257,071 430,677 Subsidiaries of the entity that has significant influence over the Controlling Company LG Electronics do Brasil Ltda. W 19,091 15,608 10 62 LG Electronics RUS, LLC 25,102 22,570 80 90 LG Innotek Co., Ltd. 407 2,885 62,675 47,382 Qingdao LG Inspur Digital Communication Co., Ltd. 13,061 3,530 — — Inspur LG Digital Mobile Communications Co., Ltd. 55,278 13,172 — — ( In millions of won ) Trade accounts and notes receivable and others Trade accounts and notes payable and others December 31, 2017 December 31, 2018 December 31, 2017 December 31, 2018 LG Electronics Mexicali, S.A. DE C.V. W 29,440 15,305 — — LG Electronics Mlawa Sp. z o.o. 136,874 70,236 25 33 LG Electronics Nanjing New Technology Co., Ltd. 46,373 43,463 699 139 LG Electronics Reynosa, S.A. DE C.V. 137,413 69,189 82 134 LG Electronics Vietnam Haiphong Co., Ltd. 36,017 25,544 3,917 — LG Hitachi Water Solutions Co., Ltd. — 9,100 154,864 50,425 Hientech (Tianjin) Co., Ltd. — — 5,600 16,345 HiEntech Co., Ltd. — — 6,679 16,816 LG Electronics India Pvt. Ltd. 3,030 9,047 — 29 LG Electronics Egypt S.A.E. — 10,296 1 — LG Electronics Air-Conditioning — — — 17,654 Others 7,618 5,263 1,714 1,246 W 509,704 315,208 236,346 150,355 W 1,062,789 564,887 581,704 682,311 (d) Details of significant cash transactions such as loans and collection of loans, which occurred in the normal course of business with related parties for the years ended December 31, 2017 and 2018 are as follows: (In millions of won) Loans(*1) Associates January 1, 2017 Increase Decrease December 31, 2017 New Optics Ltd.(*2) W 1,000 — 125 875 INVENIA Co., Ltd. 833 2,000 458 2,375 Narenanotech Corporation(*2) 300 — 75 225 YAS Co., Ltd. 833 — 458 375 W 2,966 2,000 1,116 3,850 (*1) Loans are presented based on nominal amounts. (*2) Excluded from related parties due to disposal of equity investments during the year ended December 31, 2017. (In millions of won) Loans(*) Associates January 1, 2018 Increase Decrease December 31, 2018 INVENIA Co., Ltd. W 2,375 — 375 2,000 YAS Co., Ltd. 375 — 375 — W 2,750 — 750 2,000 (*) Loans are presented based on nominal amounts. (e) Key management personnel compensation Compensation costs of key management for the years ended December 31, 2016, 2017 and 2018 are as follows: (In millions of won) 2016 2017 2018 Short-term benefits W 2,323 3,724 2,622 Expenses related to the defined benefit plan 897 488 794 W 3,220 4,212 3,416 Key management refers to the registered directors who have significant control and responsibilities over the Controlling Company’s operations and business. |