카드 검토 영문

HYUNDAI CARD CO., LTD. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30, 2012
AND FOR THE THREE MONTHS AND SIX MONTHS ENDED
JUNE 30, 2012 AND JUNE 30, 2011
AND INDEPENDENT ACCOUNTANTS’ REVIEW REPORT

Independent Accountants’ Review Report
English Translation of a Report Originally Issued in Korean

To the Shareholders and Board of Directors of
Hyundai Card Co., Ltd.:

We have reviewed the accompanying condensed consolidated financial statements of Hyundai Card Co., Ltd. and its
subsidiaries (collectively, the “Company”). The financial statements consist of the condensed consolidated statement
of financial position as of June 30, 2012 and the related condensed consolidated statements of comprehensive
income for the three months and the six months ended June 30, 2012 and June 30, 2011, the related condensed
statements of changes in shareholders’ equity and cash flows for the six months ended June 30, 2012 and June 30,
2011, and a summary of significant accounting policies and other explanatory information.

Management’s responsibility for the condensed consolidated financial statements

The Company’s management is responsible for the preparation and fair presentation of the accompanying condensed
consolidated financial statements and for such internal control as management determines is necessary to enable the
preparation of condensed consolidated financial statements that are free from material misstatement, whether due to
fraud or error.

Independent accountants’ responsibility

Our responsibility is to express a conclusion on the accompanying condensed consolidated financial statements
based on our review.

We conducted our reviews in accordance with standards for review of interim financial statements in the Republic
of Korea. A review is limited primarily to inquiries of company personnel and analytical procedures applied to
financial data, and this provides less assurance than an audit. We have not performed an audit and, accordingly, we
do not express an audit opinion.

Review conclusion

Based on our reviews, nothing has come to our attention that causes us to believe that the accompanying
condensed consolidated financial statements of the Company are not presented fairly, in all material respects, in
accordance with Korean International Financial Standards 1034, Interim Financial Reporting.

Others

We have also audited the consolidated statements of financial position as of December 31, 2011, and the related
consolidated statements of comprehensive income, changes in shareholders’ equity and cash flows (not presented in
the accompanying condensed consolidated financial statements), all expressed in Korean Won, for the year ended
December 31, 2011, in accordance with auditing standards generally accepted in the Republic of Korea. On those
consolidated financial statements we expressed an unqualified opinion in our independent auditors’ report dated as
of February 27, 2012. In addition, the consolidated statement of financial position as of December 31, 2011,
presented as comparative purposes in the accompanying condensed consolidated financial statements, does not
differ, in all material respects, with the audited consolidated statement of financial position as of December 31, 2011.

August 10, 2012

Notice to Readers

This report is effective as of August 10, 2012, the review report date. Certain subsequent events or circumstances
may have occurred between the accountants’ review report date and the time the accountants’ review report is
read. Such events or circumstances could significantly affect the accompanying condensed consolidated financial
statements and may result in modifications to the accountants’ review report.

(the “Company”)

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30, 2012
AND FOR THE THREE MONTHS AND SIX MONTHS ENDED
JUNE 30, 2012 AND JUNE 30, 2011

The accompanying condensed financial statements including all footnote disclosures were prepared
by and are the responsibility of the Company.

Chung, Tae Young
CEO


CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

AS OF JUNE 30, 2012 AND DECEMBER 31, 2011

(Unit: Korean Won)
June 30, 2012 December 31, 2011
ASSETS

CASH AND BANK DEPOSITS (Notes 5, 28 and 29):
Cash and cash equivalents ￦ 847,062,479,578 ￦ 830,022,903,023
Bank deposits 33,031,500,000 33,031,500,000
Total cash and bank deposits 880,093,979,578 863,054,403,023

INVESTMENT FINANCIAL ASSETS (Note 29):
Financial assets available-for-sale (AFS) 1,766,969,764 1,766,969,764
Total investment financial assets 1,766,969,764 1,766,969,764

CARD ASSETS (Notes 6, 7, 26, 28 and 29):
Card receivables, net of present value discounts, deferred
origination fees and allowance for doubtful accounts 6,395,406,823,016 6,432,351,415,041
Cash advances, net of allowance for doubtful accounts 924,382,461,958 978,117,626,263
Card loans, net of present value discounts, deferred loan
origination fees and allowance for doubtful accounts 2,179,886,055,534 1,963,797,640,687
Total card assets 9,499,675,340,508 9,374,266,681,991

LOANS (Notes 6, 7, 28 and 29)
Other loans, net of allowance for doubtful accounts 469,647,440 469,647,440

PROPERTY AND EQUIPMENT (Notes 8, 10, 13 and 26):
Land 118,160,330,711 83,994,796,609
Buildings, net of accumulated depreciation 63,944,678,888 42,186,583,765
Vehicles, net of accumulated depreciation 273,858,264 270,015,754
Fixtures and equipment, net of accumulated depreciation 59,315,618,675 57,974,548,577
Finance lease assets 1,944,838,878 2,500,507,128
Construction in progress 11,181,081,396 471,628,080
Total property and equipment 254,820,406,812 187,398,079,913

OTHER FINANCIAL ASSETS (Notes 7, 17, 26, 28 and 29):
Other accounts receivable, net of allowance for doubtful
accounts 52,545,194,828 44,939,903,548
Accrued revenue, net of allowance for doubtful accounts 40,435,815,327 43,753,371,236
Guarantee deposits 43,943,885,169 52,758,804,118
Derivative assets 15,584,834,280 2,555,101,143
Total other financial assets 152,509,729,604 144,007,180,045

OTHER NON-FINANCIAL ASSETS
(Notes 5, 7, 9, 23 and 26):
Advanced payments, net of allowance for doubtful
accounts 21,128,473,870 25,223,575,660
Prepaid expenses 49,744,634,808 48,548,656,736
Intangible assets 67,808,659,935 72,976,002,526
Deferred income tax assets 134,124,660,527 112,403,093,896
Others 21,833,180,090 21,819,424,816
Total other non-financial assets 294,639,609,230 280,970,753,634
Total Assets ￦11,083,975,682,936 ￦10,851,933,715,810

(Continued)


CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

AS OF JUNE 30, 2012 AND DECEMBER 31, 2011 (CONTINUED)

(Unit: Korean Won)
June 30, 2012 December 31, 2011
LIABILITIES AND SHAREHOLDERS’
EQUITY

BORROWINGS :
Borrowings (Notes 11, 28 and 29) ( ￦ 490,000,000,000 ￦ 590,000,000,000
Bonds payable, net of discounts on debentures
(Notes 12, 25, 28 and 29) 6,708,887,420,387 6,481,760,496,118
Total borrowings 7,198,887,420,387 7,071,760,496,118

RETIREMENT BENEFIT (Note 14)
Retirement benefit obligation 21,953,792,202 17,774,550,158
Total retirement benefit 21,953,792,202 17,774,550,158

OTHER FINANCIAL LIABILITIES
(Notes 13, 17, 26, 28 and 29):
Accounts payable 1,047,457,966,158 1,066,705,610,154
Withholdings 88,451,567,048 64,312,342,703
Accrued expenses 107,572,352,566 140,922,092,976
Finance lease liabilities 2,007,366,509 2,548,330,830
Derivative liabilities 1,762,166,340 5,326,133,113
Guarantee deposits 12,868,293,354 11,684,414,000
Total other financial liabilities 1,260,119,711,975 1,291,498,923,776

OTHER NON-FINANCIAL LIABILITIES :
Withholdings 6,617,218,797 5,649,822,585
Unearned revenue 374,195,483,654 347,865,031,849
Provisions (Notes 16 and 24) 80,834,848,187 80,233,007,232
Current tax liability 35,401,015,241 40,468,853,188
Total other non-financial liabilities 497,048,565,879 474,216,714,854

SHAREHOLDERS’ EQUITY :
Share capital (Note 18) 802,326,430,000 802,326,430,000
Capital surplus (Note 18) 57,704,443,955 57,704,443,955
Retained earnings (Notes 19 and 21) 1,254,110,117,202 1,148,396,655,980
Reserves (Notes 17, 20 and 27) (8,204,528,664) (11,764,319,031)
Non-controlling interest 29,730,000 19,820,000
Total shareholders’ equity 2,105,966,192,493 1,996,683,030,904
Total Liabilities and Shareholders’ Equity ￦ 11,083,975,682,936 ￦ 10,851,933,715,810

See accompanying notes to condensed consolidated financial statements.


CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2012 AND JUNE 30, 2011

(Unit: Korean Won)
2012 2011
Three months Six months Three months Six months
ended June 30. ended June 30. ended June 30. ended June 30.
OPERATING REVENUE:
Card income (Notes 26 and 31) ￦ 596,020,112,472 ￦ 1,182,844,074,854 ￦ 575,072,716,824 ￦ 1,153,496,509,377

Interest income (Note 30) 4,750,680,827 10,046,723,333 6,457,772,982 11,341,792,252
Gain on disposal of financial
assets AFS (Note 32) - - 4,051,343,198 4,051,343,198
Reversal of impairment loss on
financial assets AFS (Note
32) - 67,000,000 671,860,595 738,860,595
Dividends income - 232,822,339 - 294,418,979
Reversal of provision for
unused credit limits - - 635,005,051 -
Other operating revenue
(Notes 26 and 33) 18,784,846,068 41,787,097,955 18,211,082,986 45,066,866,975
Total operating revenue 619,555,639,367 1,234,977,718,481 605,099,781,636 1,214,989,791,376

OPERATING EXPENSES:
Card expenses (Notes 26 and
31) 278,513,544,223 529,561,625,310 219,796,482,657 447,330,811,457
Interest expenses (Note 30) 86,578,547,921 173,241,397,774 91,045,743,585 181,406,990,924
General and administrative
expenses (Notes 14, 15, 22
and 26) 149,027,360,807 280,938,867,339 121,865,384,340 235,558,495,893
Securitization expenses 66,607,876 175,866,798 66,839,007 173,611,640
Bad debt expense and loss on
disposal of loans 55,872,178,959 98,186,842,299 41,344,482,284 94,171,915,310
Transfer to provision for
unused credit limits (Note
16) (225,277,347) 1,501,400,815 - 1,985,815,922
Impairment loss on financial
assets AFS (Note 32) - - - 8,324,157
Other operating expenses
(Note 26 and 33) 7,853,626,212 30,650,525,796 18,269,397,129 46,539,079,124
Total operating expenses 577,686,588,651 1,114,256,526,131 492,388,329,002 1,007,175,044,427

OPERATING INCOME 41,869,050,716 120,721,192,350 112,711,452,634 207,814,746,949

(Continued)


CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2012 AND JUNE 30, 2011 (CONTINUED)

(Unit: Korean Won)
2012 2011

INCOME BEFORE INCOME TAX 41,869,050,716 120,721,192,350 112,711,452,634 207,814,746,949
INCOME TAX EXPENSE (Note 23) 11,153,287,590 15,007,731,128 30,439,907,479 51,493,316,804
NET INCOME FOR THE PERIOD 30,715,763,126 105,713,461,222 82,271,545,155 156,321,430,145

OTHER COMPREHENSIVE INCOME
FOR THE PERIOD (Note 27)
Effective portion of changes in fair value
of cash flow hedges, net of tax 2,701,223,576 3,559,790,367 (7,067,120,365) (7,502,254,888)

TOTAL COMPREHENSIVE INCOME
FOR THE PERIOD ￦33,416,986,702 ￦109,273,251,589 ￦75,204,424,790 ￦148,819,175,257

Net income attributable to:
Owners of the Company 30,715,763,126 105,713,461,222 82,271,545,155 156,321,430,145
Non-controlling interests - - - -
Total comprehensive income attributable
to:
Owners of the Company 33,416,986,702 109,273,251,589 75,204,424,790 148,819,175,257
Non-controlling interests - - - -



CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

FOR THE SIX MONTHS ENDED JUNE 30, 2012 AND JUNE 30, 2011

Capital Surplus Reserve
Cash flow Attributable to Non-
Share Share Other Retained hedging owners of the controlling
capital premium capital earnings reserve Company Interests Total
Balance at
January 1,
2011 ￦802,326,430,000 ￦ 45,399,364,539 ￦12,305,079,416 ￦ 909,749,073,997 ￦ (3,150,335,270) ￦ 1,766,629,612,682 ￦ 19,820,000 ￦ 1,766,649,432,682
Comprehensive
income
Net income - - - 156,321,430,145 - 156,321,430,145 - 156,321,430,145
Other compre-
hensive
income - - - - (7,502,254,888) (7,502,254,888) - (7,502,254,888)
Non-controlling
interests - - - - - - 9,910,000 9,910,000
Balance at
June 30, 2011 802,326,430,000 45,399,364,539 12,305,079,416 1,066,070,504,142 (10,652,590,158) 1,915,448,787,939 29,730,000 1,915,478,517,939
Balance at
January 1,
2012 802,326,430,000 45,399,364,539 12,305,079,416 1,148,396,655,980 (11,764,319,031) 1,996,663,210,904 19,820,000 1,996,683,030,904
Comprehensive
income - - - - - - - -
Net income - - - 105,713,461,222 - 105,713,461,222 - 105,713,461,222
Other compre-
hensive
income - - - - 3,559,790,367 3,559,790,367 - 3,559,790,367
Non-controlling
interests - - - - - - 9,910,000 9,910,000
Balance at
June 30, 2012 ￦802,326,430,000 ￦ 45,399,364,539 ￦12,305,079,416 ￦ 1,254,110,117,202 ￦ (8,204,528,664) ￦ 2,105,936,462,493 ￦29,730,000 ￦ 2,105,966,192,493



CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 2012 AND 2011

Six months ended June 30,
2012 2011
(Unit: Korean Won)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income for the period ￦ 105,713,461,222 ￦ 156,321,430,145
Income tax expense 15,007,731,128 51,493,316,804
Interest income (10,046,723,333) (11,334,712,100)
Interest expense 173,241,397,774 181,406,990,924
Dividend received (232,822,339) (294,418,979)
Bad debt expense and loss on disposal of receivables 98,186,842,299 94,171,915,310
Retirement benefits 5,280,211,663 5,129,583,010
Depreciation 13,278,266,528 9,735,198,564
Amortization 6,920,354,234 5,189,364,698
Loss on foreign currency translation 11,773,479,686 6,360,259,345
Loss on valuation and transaction of derivatives 799,000,000 26,373,400,000
Increase in provision for unused credit limit 1,501,400,815 1,985,815,922
Card expense 1,238,937,503 2,454,295,003
Loss from disposal of property and equipment 81,595,456 4,518,026
Impairment loss of financial assets AFS - 8,324,157
Other operating expenses 140,502,637 147,847,937
Reversal of impairment loss for investment financial
assets (67,000,000) (738,860,595)
Gain on disposal of financial assets AFS - (4,051,343,198)
Gain on foreign currency translation (13,249,097) (26,448,009,330)
Gain on valuation and transaction of derivatives (11,767,500,000) (6,247,080,000)
Amortization of present value discounts on card asset (23,080,028,495) (11,690,490,134)
Amortization of deferred origination fees (10,117,027,449) (11,932,318,762)
Gain on disposal of property and equipment (3,095,000) (2,635,856)
Other operating revenue (2,279,000,000) (2,287,618,501)
Changes in working capital:
Decrease (increase) in card assets (191,380,340,206) 352,132,337,068
Decrease in other loan - 500,000,000
Increase in other financial assets (5,799,746,264) (19,484,681,046)
Decrease (increase) in other non-financial assets (2,402,187,070) 59,126,562,312
Increase in derivative assets (12,629,999,999) -
Decrease in provisions - (4,053,421,155)
Decrease in retirement benefit obligations (1,755,860,759) (2,144,306,709)
Decrease (increase) in plan asset 658,753,726 (815,502,679)
Increase in derivative liabilities 11,724,000,000 390,682,348
Increase (decrease) in finance lease liabilities (540,964,321) 3,075,493,444
Decrease in other financial liabilities (31,253,267,031) (101,126,357,372)
Increase in other non-financial liabilities 26,330,451,805 26,490,059,852
Cash generated from operating activities
Interest received 11,501,389,530 5,040,499,652
Interest paid (165,480,031,763) (173,773,419,864)
Dividend received 232,822,339 294,418,979
Income tax paid (42,956,545,250) (81,385,313,705)
Net cash provided by (used in) operating activities (28,194,790,031) 530,021,823,515

(Continued)


CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 2012 AND JUNE 30, 2011 (CONTINUED)

2012 2011
(Unit: Korean Won)

CASH FLOWS FROM INVESTING ACTIVITIES:
Disposal of investment financial assets 67,000,000 110,019,643,960
Disposal of property and equipment 3,100,000 44,071,303
Disposal of intangible assets 1,250,000,000 -
Net decrease (increase) in guarantee deposit 9,860,120,861 (2,883,723,721)
Net increase in bank deposit - (9,910,000,000)
Acquisition of property and equipment (75,042,053,649) (22,596,400,452)
Acquisition of intangible assets (3,806,501,973) (9,714,521,804)
Net cash provided by (used in) investing activities (67,668,334,761) 64,959,069,286

CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in borrowings 4,190,000,000,000 -
Proceeds from issue of bonds payable 1,836,689,791,347 1,920,026,752,737
Increase in non-controlling interest 9,910,000 9,910,000
Repayment of borrowings (4,290,000,000,000) (1,218,013,480,000)
Repayment of bonds payable (1,623,797,000,000) (1,073,473,274,800)
Net cash provided by (used in) financing activities 112,902,701,347 (371,450,092,063)

NET INCREASE IN CASH AND CASH EQUIVALENTS 17,039,576,555 223,530,800,738
CASH AND CASH EQUIVALENTS, BEGINNING OF
THE PERIOD 830,022,903,023 607,047,772,134
CASH AND CASH EQUIVALENTS, END OF THE
PERIOD ￦ 847,062,479,578 ￦ 830,578,572,872



NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2012 AND JUNE 30, 2011

1. GENERAL:

Hyundai Card Co., LTD (the “Parent”) is engaged in the credit card business under the Specialized Credit
Financial Business Law of Korea. On June 15, 1995, the Parent acquired the credit card business of Korea
Credit Circulation Co., Ltd. and on June 16, 1995, the Korean government granted permission to the Parent to
engage in the credit card business.

As of June 30, 2012, the Parent has approximately 9.30 million card members, 2.01 million registered
merchants, and 180 marketing centers, branches and posts. Its head office is located in Yeoido, Seoul.

As of June 30, 2012, the total common stock of the Parent is ￦802,326 million. The shareholders of the Parent
and their respective ownerships as of June 30, 2012 and December 31, 2011 are as follows:

June 30, 2012 December 31, 2011
Shareholder Number of shares % of ownership Number of shares % of ownership
Hyundai Motor Co., Ltd. 50,572,187 31.52 50,572,187 31.52
Kia Motors Co., Ltd. 18,422,142 11.48 18,422,142 11.48
Hyundai Steel Co., Ltd. 8,729,750 5.44 8,729,750 5.44
GE Capital Int'l Holdings 69,000,073 43.00 69,000,073 43.00
Hyundai Commercial Inc. 8,889,622 5.54 8,889,622 5.54
Others 4,851,512 3.02 4,851,512 3.02
Totals 160,465,286 100.00 160,465,286 100.00

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

The Company maintains its official accounting records in Republic of Korean won (“Won”) and prepares
consolidated financial statements in conformity with Korean statutory requirements and Korean International
Reporting Standards (“K-IFRS”), in the Korean language (Hangul). Accordingly, these condensed consolidated
financial statements are intended for use by those who are informed about K-IFRS and Korean practices. The
accompanying condensed consolidated financial statements have been translated into English with certain
expanded descriptions from the Korean language condensed consolidated financial statements, if applicable.

(1) Basis of Preparation

The Company’s interim consolidated financial statements for the six months ended June 30, 2012 are prepared
in accordance with K-IFRS 1034, Interim Financial Reporting.

The Company’s accounting policies applied for the accompanying interim consolidated financial statements are
the same as the policies applied for the preparation of consolidated financial statements for the year ended
December 31, 2011, except for the effects from the introduction of new and revised accounting standards or
interpretations as described below.

- 2 -

1) Accounting standards and interpretations that were newly applied during the six months ended June 30, 2012,
and changes in the Company’s accounting policies are as follows:

K-IFRS 1107, Financial Instruments: Disclosures – Transfers of Financial Assets

The amendments to K-IFRS 1107 increase the disclosure requirements for transactions involving transfers of
financial assets. These amendments are intended to provide greater transparency around risk exposures when a
financial asset is transferred but the transferor retains some level of continuing involvement in the asset. The
amendments also require disclosures where transfers of financial assets are not evenly distributed throughout
the period. K-IFRS 1107 requires additional disclosures regarding the continuous involvement of the Company
related to transferred assets. With regards to the financial assets that are transferred to special purpose company
(the “SPC”) from the Parent but not removed, the Company additionally disclosed the fair value of transferred
assets. (Note 25)

Amendments to K-IFRS 1012, Deferred Tax – Recovery of Underlying Assets

The amendments to K-IFRS 1012 provide an exception to the general principles in K-IFRS 1012 that the
measurement of deferred tax assets and deferred tax liabilities should reflect the tax consequences that would
follow from the manner in which the entity expect to recover the carrying amount of an asset. Investment
property measured using the revaluation model under K-IFRS 1040 Investment Property or a non-depreciable
asset measured using the revaluation model in K-IFRS 1016 Property, Plant, and Equipment, are presumed to
be recovered through sale for the purposes of measuring deferred taxes, unless the presumption is rebutted in
certain circumstances. These amendments do not have a significant effect on the Company’s consolidated
financial statements and disclosures.

Amendments to K-IFRIC Interpretation 2114, Prepayments of a Minimum Funding Requirements

The amendments to K-IFRIC Interpretation 2114 requires the surplus from to prepayments of a minimum
funding requirements be recognized as an asset while it was not before adopting the interpretation. These
amendments do not have a significant effect on the Company’s consolidated financial statements and
disclosures.

2) Currently, enactments and amendments of the K-IFRSs are in progress, and the financial information
presented in the consolidated financial statements may change accordingly in the future. The Company has
not applied the following new and revised K-IFRSs that have been issued but are not yet effective:

K-IFRS 1019 (as revised in 2011), Employee Benefits

The amendments to K-IFRS 1019 change the accounting for defined benefit plans and termination benefits.
The most significant change relates to the accounting for changes in defined benefit obligations and plan assets.
The amendments require the recognition of changes in defined benefit obligations and in fair value of plan
assets when they occur, and hence eliminate the ‘corridor approach’ permitted under the previous version of K-
IFRS 1019 and accelerate the recognition of past service costs. The amendments to K-IFRS 1019 are effective
for annual periods beginning on or after January 1, 2013 and require retrospective application with certain
exceptions.

K-IFRS 1113, Fair Value Measurement

K-IFRS 1113 establishes a single source of guidance for fair value measurements and disclosures about fair
value measurements. The standard defines fair value, establishes a framework for measuring fair value, and
requires disclosures about fair value measurements. K-IFRS 1113 is effective for annual periods beginning on
or after January 1, 2013, with earlier application permitted.

The Company does not anticipate that these amendments referred above will have a significant effect on the
Company’s consolidated financial statements and disclosures.

- 3 -

3. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

In the application of the Company’s accounting policies, management is required to make judgments, estimates
and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other
sources. Actual results may differ from these estimates.

The application of the Company’s accounting policies and the judgments by management on sources of
estimation uncertainty are the same as those of the consolidated financial statements as of December 31, 2011.

4. SUBSIDIARIES:

(1) As of June 30, 2012, subsidiaries of the Company are PRIVIA 1st SPC, PRIVIA 2nd SPC and PRIVIA 3rd SPC.
And PRIVIA 1st SPC and PRIVIA 2nd SPC were already subsidiaries of the Company as of December 31,
2011. The percentages of ownership and voting rights are both 0.9%, which have not changed for the six
months ended June 30, 2012.

(2) Changes in the Company’s subsidiaries for the six months ended June, 30 2012 are as follows.

Company Asset
PRIVIA 3rd SPC Newly established due to ABS issuance

5. RESTRICTED CASH AND DEPOSITS:

Restricted financial assets as of June 30, 2012 and December 31, 2011 are as follows (Unit: Won in millions):

Type Entity June 30, 2012 December 31, 2011 Restriction
Due from financial Financial KB and others Guarantee deposits
institutions instruments ￦ 18 ￦ 18 for overdraft
Financial Shinhan Bank
Secured deposits
instruments and others 33,000 33,000
Financial Mirae Asset Social enterprise
instruments Securities 13 13 fund
Others Other dues Korea Asset
Management Escrow account
Corporation 18,610 18,610
￦ 51,641 ￦ 51,641

6. CARD ASSETS AND LOANS

Card assets and loans by customer as of June 30, 2012 and December 31, 2011 are as follows (Unit: Won in millions):

June 30, 2012 December 31, 2011
Households Corporates Total Households Corporates Total
CARD ASSETS :
Card receivables (*) ￦ 5,918,132 ￦ 542,254 ￦6,460,386 ￦ 6,039,571 ￦ 461,552 ￦ 6,501,123
Cash advances 959,142 - 959,142 1,016,028 - 1,016,028
Card loans (*) 2,258,543 - 2,258,543 2,030,869 - 2,030,869
Sub total 9,135,817 542,254 9,678,071 9,086,468 461,552 9,548,020
LOANS
Loans to corporate - 500 500 - 500 500
Total 9,135,817 542,754 9,678,571 9,086,468 462,052 9,548,520
Allowance for doubtful
accounts (172,133) (6,293) (178,426) (165,480) (8,304) (173,784)
Book value ￦ 8,963,684 ￦ 536,461 ￦ 9,500,145 ￦ 8,920,988 ￦ 453,748 ￦9,374,736
Composition rate 94.35% 5.65% 100.00% 95.16% 4.84% 100.00%
(*) Adjusted for deferred origination fees and present value discounts

- 4 -

7. ALLOWANCE FOR DOUBTFUL ACCOUNTS:

Changes in the allowance for doubtful accounts for the six months ended June 30, 2012 and June 30, 2011 are
as follows (Unit: Won in millions):

Six months ended June 30, 2012
Card Cash
receivables advances Card loans Loans Other assets Total
Balance at January 1,
2012 ￦ 68,773 ￦ 37,910 ￦ 67,071 ￦ 30 ￦ 2,306 ￦ 176,090
Bad debt expenses (1,033) (249) (108) - - (1,390)
Bad debt recovered 349 559 184 - - 1,092
Disposition &
repurchase (10,757) (7,250) (8,045) - - (26,052)
Provision of
allowance for
doubtful accounts 7,647 3,790 19,555 - 64 31,056
Balance at June 30,
2012 ￦ 64,979 ￦ 34,760 ￦ 78,657 ￦ 30 ￦ 2,370 ￦ 180,796

Card Cash
receivables advances Card loans Loans Other assets Total
Balance at January 1,
2011 ￦ 59,315 ￦ 43,132 ￦ 63,527 ￦ 8 ￦ 4,059 ￦ 170,041
Bad debt expenses (3,383) (3,386) (2,397) - - (9,166)
Bad debt recovered 177 275 93 - - 545
Disposition &
repurchase (12,235) (9,509) (12,897) - - (34,641)
Provision of
(Reversal of)
allowance for
doubtful accounts 20,313 14,445 18,341 44 (1,142) 52,001
Balance at June 30,
2011 ￦ 64,187 ￦ 44,957 ￦ 66,667 ￦ 52 ￦ 2,917 ￦ 178,780

8. PROPERTY AND EQUIPMENT:

Changes in the book value of property and equipment for the six months ended June 30, 2012 and 2011 are as
follows (Unit: Won in millions):

Beginning Ending
balance Acquisition Reclassification(*) Disposal Depreciation balance
Land ￦ 83,995 ￦ 34,165 ￦ - ￦ - ￦ - ￦ 118,160
Buildings 42,187 22,169 347 - (758) 63,945
Vehicles 270 76 - - (72) 274
Fixtures and equipment 57,974 13,179 137 (82) (11,892) 59,316
Finance lease assets 2,500 - - - (556) 1,944
Construction in
progress 472 5,453 5,256 - - 11,181
Total ￦ 187,398 ￦ 75,042 ￦ 5,740 ￦ (82) ￦ (13,278) ￦ 254,820

(*) ￦5,740 million of construction in progress is reclassified from advanced payments.

- 5 -

Beginning Ending
balance Acquisition Reclassification(*) Disposal Depreciation balance
Land ￦ 80,414 ￦ 1,853 ￦ - ￦ - ￦ - ￦ 82,267
Buildings 34,494 5,427 - - (511) 39,410
Vehicles 293 233 - (46) (75) 405
Fixtures and equipment 36,617 11,598 4,552 - (8,871) 43,896
Finance lease assets - 3,334 - - (278) 3,056
Construction in
progress 698 151 (226) - - 623
Total ￦ 152,516 ￦ 22,596 ￦ 4,326 ￦ (46) ￦ (9,735) ￦ 169,657

(*) ￦4,326 million of fixtures and equipment is reclassified from construction in progress intangible assets
(see Note 9).

9. INTANGIBLE ASSETS:

Changes in intangible assets for the six months ended June 30, 2012 and June 30, 2011 are as follows (Unit:
Won in millions):

Beginning Ending
balance Acquisition Reclassification(*) Disposal Amortization balance
Development cost ￦ 36,656 ￦ 1,444 ￦ 482 ￦ - ￦ (5,123) ￦ 33,459
Industrial property
rights 116 - - - (20) 96
Others 11,369 - - - (1,777) 9,592
Construction in
progress 2,101 2,363 (1,286) - - 3,178
Membership 22,734 - - (1,250) - 21,484
Total ￦ 72,976 ￦ 3,807 ￦ (804) ￦ (1,250) ￦ (6,920) ￦ 67,809

(*) ￦804 million of construction in progress is reclassified to advanced payments.

Beginning Ending
balance Acquisition Reclassification(*) Disposal Amortization balance
Development cost ￦ 21,801 ￦ 2,162 ￦ 9,667 ￦ - ￦ (3,666) ￦ 29,964
Industrial property
rights 155 - - - (20) 135
Others 9,757 3,894 75 - (1,503) 12,223
Construction in
progress 17,253 2,407 (14,068) - - 5,592
Membership 21,484 1,250 - - - 22,734
Total ￦ 70,450 ￦ 9,713 ￦ (4,326) ￦ - ￦ (5,189) ￦ 70,648

(*) ￦4,326 million of construction in progress is reclassified to fixtures and equipment (see Note 8).

10. ASSETS PLEDGED AS COLLATERALS:

Land and buildings amounting to ￦1,676 million are provided as collaterals for leasehold deposits received as
of June 30, 2012.

- 6 -

11. BORROWINGS:

Borrowings as of June 30, 2012 and December 31, 2011 are as follows (Unit: Won in millions):

Annual interest
Borrowed from rates (%) Maturity June 30, 2012 December 31, 2011
Commercial IBK Securities 2012.7.9
papers and others 3.48 ~ 3.61 ~ 2012.9.13 ￦ 320,000 ￦ 490,000
Borrowings Hana Bank 2012.11.2
and others 4.69 ~ 5.55 ~ 2014.7.19 170,000 100,000
￦ 490,000 ￦ 590,000

12. BONDS PAYABLE:

Details of bonds payable as of June 30, 2012 and December 31, 2011 are as follows (Unit: Won in millions):

Annual June 30, 2012 December 31, 2011
interest rates (%) Maturity Par value Issue price Par value Issue price
Short-term 2012.12.08 ~
3.40 ~ 4.95
debentures 2013.6.14 ￦ 90,000 ￦ 90,000 ￦ 130,000 ￦ 130,000
Current portion of
2012.7.05 ~
long-term 3.47 ~ 6.15
2013.6.30
debentures 1,390,000 1,390,000 1,333,797 1,333,797
Long-term 3.36 ~ 6.94
debentures 1M USD Libor
2013.7.12 ~
+ 0.724,
2019.3.19
1M USD Libor
+ 1.5 5,240,047 5,240,047 5,027,320 5,027,320
Discounts on
debentures (11,160) (9,357)
Bonds payable, net ￦6,708,887 ￦ 6,481,760

The above bonds payable are non-guaranteed corporate bonds, with their principals to be redeemed at maturity.
Bond issuance costs are recorded as discounts on bonds payable and amortized using the effective interest rate
method.

13. FINANCE LEASE LIABILITIES:

(1) Lease contract

The Company uses electronic equipment under a finance lease for 3 years. The Company may exercise a bargain
purchase option at expiration date of the lease contract. The lessor has the legal ownership of the finance lease
assets as collateral for the finance lease obligation; the collateral amounts to ￦1,944 million and ￦2,500
million as of June 30, 2012 and December 31, 2011, respectively.

(2) Finance lease liabilities of June 30, 2012 and December 31, 2011 are as follows (Unit: Won in millions):

June 30, 2012 December 31, 2011
Minimum lease Present value of Minimum lease Present value of
payments minimum lease payments payments minimum lease payments
Less than 1 year ￦ 1,202 ￦ 1,124 ￦ 1,202 ￦ 1,096
1-5 years 902 883 1,503 1,452
Present value
discounts (97) (157)
Present value ￦ 2,007 ￦ 2,548

- 7 -

14. RETIREMENT BENEFIT PLAN:

(1) Defined contribution plan

The expense recognized in the consolidated statements of comprehensive income related to post-employment
benefit plan under the defined contribution plan for the six month period ended June 30, 2012 and June 30, 2011
are as follows (Unit: Won in millions):

2012 2011
Defined contribution plan ￦ 4 ￦ -

(2) Defined benefit plan

1) As of June 30, 2012 and December 31, 2011, the amounts recognized in the consolidated statements of
financial position related to retirement benefit obligation are as follows (Unit: Won in millions):

June 30, 2012 December 31, 2011
Present value of defined benefit obligation ￦ 40,936 ￦ 37,007
Fair value of plan assets (18,945) (19,195)
Transferred to national pension fund (37) (37)
Retirement benefit obligation ￦ 21,954 ￦ 17,775

2) Changes in the present value of the defined benefit obligation for the six months ended June 30, 2012 and
June 30, 2011 are as follows (Unit: Won in millions):

2012 2011
Beginning balance ￦ 37,007 ￦ 27,790
Current service cost 4,386 3,564
Interest cost 732 628
Transfer of employees between the
Company and the related companies (531) (78)
Actuarial losses 567 1,324
Benefits paid (1,225) (2,066)
Ending balance ￦ 40,936 ￦ 31,162

3) Changes in the fair value of the plan assets for the six months ended June 30, 2012 and June 30, 2011 are as

2012 2011
Beginning balance ￦ 19,195 ￦ 18,143
Contributions from the employer - 1,500
Expected return on plan assets 368 348
Actuarial gains 41 38
Transfer of employees between the
Company and its related companies (176) 307
Benefits paid (483) (992)
Ending balance ￦ 18,945 ￦ 19,344

- 8 -

4) Details of pension expenses are as follows (Unit: Won in millions):

2012 2011
Current service cost ￦ 2,193 ￦ 4,386 ￦ 1,782 ￦ 3,564
Interest cost 366 732 314 628
Expected return on plan assets (184) (368) (174) (348)
Actuarial losses 687 526 1,302 1,286
Total ￦ 3,062 ￦ 5,276 ￦ 3,224 ￦ 5,130
Return on plan assets 211 409 196 386

5) Actuarial assumption

For the computation of defined benefit obligation, actuarial assumption of discount rate is 4.00% and 4.23% as
of June 20, 2012 and December 31, 2011, respectively. Actuarial assumption of expected return on plan assets is
4.69% and 4.08% as of June 20, 2012 and December 31, 2011, respectively, and that of expected rate of salary
increase is constantly 5.60% as of June 20, 2012 and December 31, 2011.

15. EMPLOYEE BENEFITS:

Details of employee benefits for the six months ended June 30, 2012 and June 30, 2011 are as follows (Unit:
Won in millions):
2012 2011
Short-term employee benefits ￦ 27,810 ￦ 52,773 ￦ 24,112 ￦ 49,468
Pension expenses 3,064 5,280 3,224 5,130
￦ 30,874 ￦ 58,053 ￦ 27,336 ￦ 54,598

16. PROVISION:

(1) Provision for unused credit limits

The Company recognizes loss provision for expected future use of unused portions of credit limits. Changes in
loss provision for the six months ended June 30, 2012 and June 30, 2011 are as follows (Unit: Won in millions):

2012 2011
Beginning ￦ 47,167 ￦ 46,073
Increase 1,501 1,986
Ending ￦ 48,668 ￦ 48,059

(2) Provision for mileage points

Changes in provision for mileage points for the six months ended June 30, 2012 and June 30, 2011 are as follows
(Unit: Won in millions):

2012 2011
Point Customer loyalty Point Customer loyalty
Beginning ￦ 3,685 ￦ 7,555 ￦ 2,368 ￦ 12,069
Increase (decrease) (468) 1,707 786 1,668
Ending ￦ 3,217 ￦ 9,262 ￦ 3,154 ￦ 13,737

- 9 -

(3) Other provisions

Changes in other provisions for the six months ended June 30, 2012 and 2011 are as follows (Unit: Won in
millions):

2012 2011
Beginning ￦ 21,826 ￦ 20,916
Decrease (2,138) (4,053)
Ending ￦ 19,688 ￦ 16,863

The above amounts as of June 30, 2012 include provision for deposits in escrow account of ￦14,058 million,
provision for pending litigations of ￦5,630 million.

17. DERIVATIVES AND HEDGE ACCOUNTING:

(1) There are no derivative instruments held for trading as of June 30, 2012 and December 31, 2011.

(2) Cash flow hedge

The Company removes the volatility risk of future cash flow of a hedged item, such as borrowing or bond,
caused by changes in market interest rates or in foreign currency rates, by using derivatives instruments such as
an interest swap or currency swap. The Company’s policies and strategies of cash flow hedge are the same as
those as of December 31, 2011.

1) Fair value of cash flow hedge as of June 30, 2012 and December 31, 2011 are as follows (Won in
millions):

June 30, 2012 December 31, 2011
Contract Contract
Amount Asset Liabilities Amount Asset Liabilities

Interest rate
swap ￦ 496,000 ￦ 689 803 ￦ 280,000 ￦ 643 ￦ 931
Cross currency
swap 940,503 14,896 959 582,573 1,912 4,395
Total ￦ 1,436,503 ￦ 15,585 ￦ 1,762 ￦ 862,573 ￦ 2,555 ￦ 5,326

For transactions between local currencies and foreign currencies, the unsettled amount of transaction is presented
using the basic foreign exchange rate on the contract amount in foreign currencies. For transaction between
foreign currencies and other foreign currencies, the unsettled amount is presented using the basic foreign
exchange rate on the contract amount in foreign currencies purchased.

2) Expected cash flows for cash flow hedge

The maximum periods, during which the Company will be exposed to future cash flows fluctuations arising
from currency swaps are as follows (Won in millions):

June 30, 2012 December 31, 2011
Less than 1month ￦ (1,822) ￦ (1,228)
1-3 months (2,896) (398)
3-12 months (14,293) (10,805)
1-5 years 7,332 367
￦ (11,679) ￦ (12,064)

- 10 -

18. SHARE CAPITAL:

There was no change in share capital and capital surplus for the six months ended June 30, 2012.

19. RETAINED EARNINGS:

(1) Details of retained earnings as of June 30, 2012 and December 31, 2011 are as follows (Unit: Won in
millions):

June 30, 2012 December 31, 2011
Legal reserve (*) ￦ 20,143 ￦ 20,143
Reserve for bad loans 454,337 439,031
Retained earnings 779,630 689,223
￦ 1,254,110 ￦ 1,148,397

(*) The Korean Commercial Code requires a company to appropriate at least 10 percent of dividends paid
as legal reserve for each fiscal period, until the reserve equals 50 percent of paid-in capital. This
reserve is not available for payment of cash dividends; however, it can be used to reduce deficit or be
transferred to capital.

(2) Changes in retained earnings for the six months ended June 30, 2012 and June 30, 2011 are as follows (Unit:
Won in millions):

2012 2011
Beginning ￦ 1,148,397 ￦ 909,749
Net income attributable to the owners of the Company 105,713 156,321
Ending ￦ 1,254,110 ￦ 1,066,070

20. RESERVES:

Details of cash flow hedging reserve for the six months ended June 30, 2012 and 2011 are as follows (Unit:
Won in millions):

2012 2011
Beginning ￦ (11,764) ￦ (3,150)
Cash flow hedging reserve gains (losses)
Interest rate swap 174 1,010
Cross currency swap 4,544 (10,593)
Tax effect (1,159) 2,080
Amount reclassified to current income - -
Tax effect related to reclassified amounts to current
income - -
Ending ￦ (8,205) ￦ (10,653)

Cash flow hedging reserve represents the cumulative gain or loss of hedging instruments related to the effective
portion of the Company’s hedge accounting. The cumulative deferred gains or losses of hedging instruments is
reclassified to income or loss only when the hedged item is reflected in current operations, or by which initial
book value of non-financial hedged item is adjusted in accordance with relevant accounting policy.

- 11 -

21. RESERVE FOR BAD LOANS:

Reserve for bad loans is calculated and disclosed according to Article 11, Supervisory Regulation on Company
Specialized Credit Finance.

(1) Reserve for bad loans reflected in retained earnings as of June 30, 2012 and December 31, 2011 are as

June 30, 2012 December 31, 2011
Accumulated reserve for bad loans ￦ 439,031 ￦ 192,810
Expected reserve for bad loans 15,306 246,221
Reserve for bad loans ￦ 454,337 ￦ 439,031

(2) The provision of reserve for bad loans and adjusted income after reserve for bad loans for the three months
and six months ended of June 30, 2012 and June 30,2011 are as follows (Unit: Won in millions):

2012 2011
Transfer to reserve for bad loans ￦ (3,842) ￦ 15,306 ￦ 32,875 ￦ 61,057
Adjusted income after reserve for bad loans 34,558 90,407 49,397 95,264

22. GENERAL AND ADMINISTRATIVE EXPENSES:

Details of general and administrative expenses for the three months and six months ended June 30, 2012 and
June 30, 2011 are as follows (Unit: Won in millions):

<PAYROLL>
2012 2011
Salaries wages ￦ 22,380 ￦ 41,794 ￦ 19,681 ￦ 40,380
Pension expenses 3,064 5,280 3,224 5,130
Employee benefits 7,021 14,567 5,784 12,372
￦ 32,465 ￦ 61,641 ￦ 28,689 ￦ 57,882

<OTHER EXPENSES>
2012 2011
Travel expenses ￦ 777 ￦ 1,279 ￦ 572 ￦ 994
Communication expenses 5,575 10,989 4,958 10,548
Post expense 3,351 6,471 2,760 5,817
Rental expenses 6,846 13,586 5,274 10,313
Taxes dues 3,925 7,702 6,410 11,278
Repair and maintenance expenses 145 296 182 363
Insurance premiums 184 188 199 206
Entertainment expenses 258 442 137 393
Advertising expenses 10,220 20,019 11,829 22,262
Supply expenses 627 1,156 640 1,026
Vehicle maintenance expenses 3 11 1 10
Periodicals expenses 261 288 17 44
Publication expenses 1,684 3,515 2,487 3,797
Training expenses 1,428 2,271 837 1,570
Electronic data processing
expense 8,026 16,371 9,216 16,213
Expense for temporary staff 9,456 18,206 7,777 16,102
Professional expenses 43,573 77,086 24,300 45,988
Delivery expense 1,117 2,097 572 1,213

- 12 -

2012 2011
Commission expense 6,067 11,939 5,104 11,023
Business activities expense 1,126 2,041 1,065 1,843
Depreciation expense 6,768 13,278 5,162 9,735
Amortization expense 3,480 6,920 2,786 5,189
Event expense 1,126 1,793 203 360
Conference expense 101 197 103 206
Building administrative expense 439 1,157 585 1,183
￦ 116,563 ￦ 219,298 ￦ 93,176 ￦ 177,676

23. INCOME TAX FROM CONTINUING OPERATIONS

(1) Income tax expense for the six months ended June 30, 2012 and June 30, 2011 are summarized as follows
(Unit: Won in millions):

2012 2011
Income tax currently payable ￦ 37,889 ￦ 53,662
Changes in deferred tax assets by temporary differences (*) (21,722) (3,627)
Total 16,167 50,035
Changes in income tax expense reflected directly in shareholders’
equity (1,159) 1,458
Income tax expense ￦ 15,008 ￦ 51,493
(*) Ending net deferred tax assets due to temporary differences ￦ 134,125 ￦ 128,690
Beginning net deferred tax assets due to temporary differences 112,403 125,063
Changes in net deferred tax assets due to temporary differences ￦ (21,722) ￦ (3,627)

(2) Income tax expenses reflected directly in shareholders’ equity for the six months ended June 30, 2012 are

January 1, 2012 June 30, 2012 Decrease
Loss on valuation of derivatives ￦ 3,732 ￦ 2,573 ￦ (1,159)

(3) A reconciliation between income before income tax and income tax expense for the six months ended June
30, 2012 and June 30, 2011 are as follows (Unit: Won in millions):

2012 2011
Income before income tax ￦ 120,721 ￦ 207,815
Income tax payable by the statutory income tax rate (23.8%
and 24.2% for the six months ended June 30, 2012 and June
30, 2011, respectively) 28,753 50,265
Tax reconciliations:
Non-taxable income (46) -
Non-deductible expenses 105 6
The amount of deductible temporary differences for which
no deferred tax asset is recognized (11,384) -
True-up adjustment (3,463) (6,941)
Others 1,043 8,163
Sub-total (13,745) 1,228
Income tax of continued operation ￦ 15,008 ￦ 51,493

- 13 -

24. CONTINGENCIES AND COMMITMENTS:

Contingencies and commitments are the same as those of the separate financial statements as of December 31,
2011 except for the followings.

(1) Credit line agreement

a. Credit Facility Agreement

The Company entered into a Credit Facility Agreement with GE Capital Corporation (“GECC”) on August 1,
2012. The Credit Facility limit is Euro equivalent of USD200 million. The maturity of the Credit Facility is
January 9, 2015 and is renewable on January 2013 and 2014.

With regard to the Credit Facility Agreement, the Company, GECC, Hyundai Motor Company and Kia
Motors Corp. entered into a Support Agreement and the contract date of Support Agreement is the same as
the one of the Credit Facility Agreement. Details of Credit Facility Agreement at the end of reporting period
are the same as those as of December 31, 2011.

b. Revolving Credit Facility

The Company had Revolving Credit Facility Agreements with many financial institutions during the six
months ended June 30, 2012 and the details of credit lines are as follows (Unit: Won in millions):

Financial instruments Credit line Term
Kookmin Bank ￦ 100,000 2012-01-30 ~ 2013-01-28
Kookmin Bank 30,000 2012-05-28 ~ 2013-05-28
Kookmin Bank 30,000 2011-10-24 ~ 2012-10-22
Nong Hyup Bank 100,000 2012-03-29 ~ 2013-03-29
Citibank, Seoul 50,000 2011-12-24 ~ 2012-12-23
Woori Bank 200,000 2012-06-29 ~ 2013-06-28
Shinhan Bank 50,000 2012-04-16 ~ 2013-04-15
Shinhan Bank 50,000 2012-05-31 ~ 2013-05-31

(2) Pending Lawsuits

As of June 30, 2012, the pending lawsuits, whose outcomes cannot be ascertained as of the report date, are
the followings (Unit: Won in millions):

Type Plaintiff Defendant Amount Status
Claim for loss Hankook Cardnet and 6 The Company and 16
compensation others defendants ￦ 2,742 Ongoing
Claim for loss Jeong, Seong Hwa and 70 The Company and 16
compensation others defendants 2,343 Ongoing
Claim for loss Lee, Bok Gi The Company and 16
compensation and 113 others defendants 153 Ongoing
Claim for loss Ko, Sung Bong and 108 The Company and 16
compensation others defendants 109 Ongoing
Claim for loss Shin, Gwang Sik and 5 The Company and 16
Claim for loss HanKook Card System and The Company and 16
compensation 18 others defendants 1,700 Ongoing
Claim for loss Jang, Won Sik and 124 The Company and 11
Claim for loss Kang, Kyoung Hee and 53 The Company and 16
Claim for loss Shin, Dong Wook The Company and 16
compensation defendants 2 Ongoing
Claim for loss Yoon, Yong Seob and 30 The Company and 16
Claim for loss Lee, Kyoung Hee and 3 The Company and 16

- 14 -

Type Plaintiff Defendant Amount Status
Claim for loss Yoo, Jae Won and 5 others The Company and 16
Claim for loss SPECOM Co. Ltd. The Company and 16
Claim for loss Lim, Byeong Gwi and 30 The Company and 16
Claim for loss ZIO TECHNET and 32 The Company and 16
Claim for loss The Company and 16
compensation Jung, Hyun Oh and others defendants 85 Ongoing
Cancellation of tax The Company Yeongdeungpo District
charge Tax Office 56 Ongoing
Cancellation of tax The Company Yeongdeungpo District
charge Tax Office 69 Ongoing
Unfair profits refund Jung, So Yeon and 26 The Company and 5
others defendants 21 Ongoing
Claim for loss KUMHO Industrial and 5 KAMCO, the Company
compensation others and 5 defendants 104,674 Ongoing
Litigation on invalidity
of dismissal Kim, Se Eun The Company 93 Ongoing
Unfair profits refund Lee, Yeon Jae The Company and 3
defendants 23 Ongoing
￦ 120,331

(3) Guarantee

The Company has a performance guarantee from the Seoul Guarantee Insurance Co., Ltd. amounting to
￦4,210 million in connection with airline ticket payments and others.

(4) Contract of Sale of Receivables

The Company entered into a contract with Hyundai Capital Services, Inc. relating to its sale of receivables
on January 24, 2006. In accordance with the contract, the Company sells the receivables that are 60 days or
more past due or written-off to Hyundai Capital Services, Inc. Such sale occurs five times a month on
designated cutoff dates at the amount calculated using a predetermined price pursuant to the contract.

25. ASSETS-BACKED SECURITIES (ABS):

(1) Asset-backed securities and the underlying assets

The Company transferred its card assets to SPCs and issued asset-backed securities with them.

The details of asset-backed securities and underlying assets as of June 30, 2012 and December 31, 2011 are
.
June 30, 2012 December 31, 2011
Senior Underlying Senior Underlying
Maturity tranche asset (*) tranche asset (*)
PRIVIA 2nd SPC 2014-04-24 ￦ 461,520 ￦ 955,311 ￦ 461,320 ￦ 1,020,544
PRIVIA 3rd SPC 2015-07-20 461,520 888,619 - -
Discounts on debentures (4,585) - (2,023) -
Net book value ￦ 918,455 ￦1,843,930 ￦ 459,297 ￦ 1,020,544

(*) The fair value of underlying assets as of June 30, 2012 and December 31, 2011 are ￦1,874,444 million
and ￦1,037,224 million, respectively.

- 15 -

(2) Details of contractual maturity of the Company’s asset-backed securities as of June 30, 2012 and December
31, 2011 are as follows (Unit: Won in millions):

June 30, 2012 December 31, 2011
Less than 1 year ￦ - ￦ -
1-2 years 461,520 -
2-3 years - 461,320
More than 3 years 461,520 -
Senior tranche 923,040 461,320
Discounts on debentures (4,585) (2,023)
Senior tranche ￦ 918,455 ￦ 459,297

26. TRANSACTION WITH RELATED PARTIES:

(1) Status of related parties

Related parties can be an entity which can have significant influence over the Company, or over the
Company’s post-employment benefits, a key management personnel and a close member of that person’s
family, an entity which belongs to the same group as the Company, or an entity controlled or jointly
controlled.

Details of related parties as of June 30, 2012 are as follows:

Companies
Controlling company Hyundai motor company
Related parties Green air, Glovis, Kia motor company, Kia Tigers, Daesung electric, Rotem,
MnSoft, Metia, BNG Steel, Samwoo, Aia, IHL Industry, NGV, MSEAT,
WISTCO, WIA, WIA Magna Powertrain, Eukor Car Carriers, Innocean, Iljin,
Jongro Academy, Jongro Eclass, Carnes, Kefico, Partecs, Hankook Economy
News, Korea Space and Aircraft, Haevichi Country Club, Hyundai Dymos,
Hyundai Movis, Hyundai Steel, Hyundai Capital, Hyundai Powertech, Hyundai
Hysco, HMC Investment bank, Auto Ever Systems, Haevichi Resort, Hyundai
AMCO, Chunbuk Hyundai motors FC, Hyundai Commercial, Seoul Metro
Line9, HL Green Power, Corentec, Hyundai E&C, Hyundai Hyundai
construction, Hyundai engineering, Hyundai city construction, Busan-Jungkwan
energy, Hyundai energy, Songdo Landmark City, Hyundai farm land &
development, Hatayrnc, Hyundai C&I, Hyundai Architects & Engineers Assoc,
Hyundai matirials, Busan Finance Center AMC, Hyundai resource development
institute, Hyundai Life.

- 16 -

(2) Transaction with related companies for the six months ended June 30, 2012 and June 30, 2011 are as

Six months ended June 30, 2012 Six months ended June 30, 2011
Company Company
with with
Controlling significant Controlling significant
company influence Total company influence Total
Revenues
Card revenue ￦ 53,105 ￦ 27,777 ￦ 80,882 ￦ 79,783 ￦ 27,752 ￦ 107,535
Rental revenue - 125 125 - 99 99
Miscellaneous revenue - 23,128 23,128 - 13,310 13,310
53,105 51,030 104,135 79,783 41,161 120,944
Expense
Card expense 15 111 126 69 349 418
General and
administrative expense 213 14,073 14,286 228 19,213 19,441
Miscellaneous expense - 26,430 26,430 - 14,762 14,762
228 40,614 40,842 297 34,324 34,621
Others
Payment of advance
payment - - - - 4,910 4,910
Purchase of property and
equipment 76 8,368 8,444 - 237 237
Purchase of intangible
assets - 1,148 1,148 - 124 124
Total ￦ 76 ￦ 9,516 ￦ 9,592 ￦ - ￦ 5,271 ￦ 5,271

(3) Outstanding receivables, payables and guarantee from transactions with related parties as of June 30, 2012
and December 31, 2011 are as follows (Unit: Won in millions):

June 30, 2012 December 31, 2011
Company Company
with with
Controlling significant Controlling significant
company influence Total company influence Total
Receivables
Card asset ￦ 61,301 ￦ 167,161 ￦ 228,462 ￦ 60,555 ￦ 165,755 ￦ 226,310
Accounts receivable - - - 59 68 127
Other 151 21,598 21,749 - 30,241 30,241
Allowance for
doubtful accounts (674) (1,839) (2,513) (908) (2,464) (3,372)
Total 60,778 186,920 247,698 59,706 193,600 253,306
Payables
Accounts payable 48,490 40,385 88,875 35,013 54,520 89,533
Other - - - 3,955 - 3,955
Total ￦ 48,490 ￦ 40,385 ￦ 88,875 ￦ 38,968 ￦ 54,520 ￦ 93,488

(4) Compensation for key executives

1) Compensation cost for key executives for the six months ended June 30, 2012 and June 30, 2011 consist
of short-term employee benefit and retirement benefit.

2) Compensation for key management for the six months ended June 30, 2012 is as follows (Unit: Won in
millions):
Short-term employee benefit Retirement benefit Total
Key management 6,658 839 7,497

3) Key management includes directors (including non-executive directors) and members of the audit
committee with significant authority and responsibility over the Company’s plan, direction and control.

- 17 -

27. OTHER COMPREHENSIVE INCOME

Comprehensive income for the six months ended June 30, 2012 consists of the following (Unit: Won in
millions):

Beginning Income tax Ending
Balance Increase Disposal effect balance
Comprehensive income
Effective portion of
changes in fair value
of cash flow hedges ￦ (11,764) ￦ 4,920 ￦ 202 ￦ (1,159) ￦ (8,205)

28. FINANCIAL RISK MANAGEMENT:

(1) Introduction

1) General

The Company is exposed to various financial risks such as credit risk, liquidity risk and market risk
associated with financial instruments. The level of exposure to such risks, objectives of the Company and
its risk management policy and procedures are outlined below. The Company’s risk management
objectives, policy and procedures are the same as those for 2011.

(2) Credit risk

1) Level of exposure to credit risk

The Company’s level of exposure to credit risk as of June 30, 2012 and December 31, 2011 is summarized
June 30, 2012 December 31, 2011
Deposit ￦ 880,094 ￦ 863,054
Card asset (*1) 9,678,071 9,548,020
Loan 500 500
Other assets (*1,2) 154,874 146,308
Unused commitment 32,052,804 31,564,297
Total ￦ 42,766,343 ￦ 42,122,179
(*1) Card asset is stated at book value before allowance for doubtful accounts.
(*2) Other assets consist of accounts payable and unearned income.

- 18 -

2) Analysis of credit soundness of financial assets

① Credit soundness of card assets neither past due nor impaired as of June 30, 2012 and December 31,
2011 is summarized as follows (Unit: Won in millions):

June 30, 2012 December 31, 2011
Book value Book value
before Allowance before Allowance
allowance for allowance for
for doubtful doubtful Book for doubtful doubtful Book
accounts accounts value accounts accounts value
Retail
Card receivables and
cash advances ￦ 6,726,916 ￦ 82,030 ￦6,644,886 ￦6,929,335 ￦88,295 ￦6,841,040
Card loans 2,158,156 57,736 2,100,420 1,951,993 54,686 1,897,307
Corporate
Card receivables 510,086 2,441 513,645 438,878 1,936 436,942

Total ￦ 9,401,158 ￦ 142,207 ￦ 9,258,951 ￦ 9,320,206 ￦ 144,917 ￦9,175,289

② Credit soundness of card assets past due but not impaired as of June 30, 2012 and December 31, 2011
are summarized as follows (Unit: Won in millions):

June 30, 2012
Less than More than
1 month 1-2 months 2-3 months 3 months Total
Retail ￦ 180,534 ￦ 28,891 ￦ - ￦ - ￦ 209,425
Corporate 13,187 6,886 - - 20,073
193,721 35,777 - - 229,498
Card assets
Card receivables 108,134 18,870 - - 127,004
Cash advances 27,901 6,299 - - 34,200
Card loans 57,686 10,608 - - 68,294
193,721 35,777 - - 229,498
accounts (7,635) (3,020) - - (10,655)
Book value ￦ 186,086 ￦ 32,757 ￦ - ￦ - ￦ 218,843

December 31, 2011
Less than More than
1 month 1-2 months 2-3 months 3 months Total
Retail ￦ 150,825 ￦ 26,687 ￦ - ￦ - ￦ 177,512
Corporate 12,131 4,637 - 3 16,771
162,956 31,324 - 3 194,283
Card assets
Card receivables 99,144 18,194 - 3 117,341
Cash advances 17,265 4,349 - - 21,614
Card loans 46,547 8,781 - - 55,328
162,956 31,324 - 3 194,283
accounts (7,317) (2,943) - (3) (10,263)
Book value ￦ 155,639 ￦ 28,381 ￦ - ￦ - ￦ 184,020

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