2012 hcs영문감사보고서

Hyundai Capital Services, Inc. and
Subsidiaries
Consolidated Financial Statements
December 31, 2012 and 2011

Hyundai Capital Services, Inc. and Subsidiaries
Index

Report of Independent Auditors ......................................................................................................... 1-2

Consolidated Financial Statements

Consolidated Statements of Financial Position...................................................................................... 3-5

Consolidated Statements of Comprehensive Income............................................................................ 6-8

Consolidated Statements of Changes in Equity ................................................................................. 9-10

Consolidated Statements of Cash Flows ................................................................................................ 11

Notes to the Consolidated Financial Statements .............................................................................. 12-69

Report of Independent Auditors

To the Shareholders and Board of Directors of
Hyundai Capital Services, Inc.

We have audited the accompanying consolidated statements of financial position of Hyundai
Capital Services, Inc.(the “Company”) and its subsidiaries as of December 31, 2012 and 2011,
and the related statements of comprehensive income, changes in equity and cash flows for
the years then ended, expressed in Korean won. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audits.

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 audit 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, the consolidated financial statements, referred to above, present fairly, in all
material respects, the financial position of Hyundai Capital Services, Inc. and its subsidiaries
as of December 31, 2012 and 2011, and their financial performance and cash flows for the
years then ended, in conformity with International Financial Reporting Standards as adopted
by the Republic of Korea (“Korean-IFRS”).

1

Auditing standards and their application in practice vary among countries. The procedures and
practices used in the Republic of Korea to audit such financial statements may differ from
those generally accepted and applied in other countries. Accordingly, this report is for use by
those who are informed about Korean auditing standards and their application in practice.

Seoul, Korea
February 28, 2013

This report is effective as of February 28, 2013, the audit report date. Certain subsequent
events or circumstances, which may occur between the audit report date and the time of
reading this report, could have a material impact on the accompanying consolidated
financial statements and notes thereto. Accordingly, the readers of the audit report should
understand that there is a possibility that the above audit report may have to be revised to
reflect the impact of such subsequent events or circumstances, if any.

2

Consolidated Statements of Financial Position

(In millions of Korean won)
Notes 2012 2011
Assets
Cash and deposits
Cash and cash equivalents 25 1,302,161 1,455,432
Deposits 3 12 10
1,302,173 1,455,442
Securities 4
Available-for-sale securities 20,283 18,452
Investments in associates 98,796 51,768
119,079 70,220

Loans receivable 2,5,6 10,870,951 9,495,818
Allowances for doubtful accounts (273,589) (231,983)
10,597,362 9,263,835

Installment financial assets 2,5,6
Auto installment financing receivables 5,265,772 6,663,970
Durable goods installment financing receivables 1 1,422
Allowances for doubtful accounts - (141)
Mortgage installment financing receivables 25,679
16,515
Allowances for doubtful accounts (277) (1,204)
Machinery installment financing receivables - 1,682
Allowances for doubtful accounts - (37)
5,209,564 6,605,422

Lease receivables 5,6
Finance lease receivables 9 2,804,929 2,278,383
Cancelled lease receivables 493 211
2,805,422 2,278,594

Leased assets 10
Operating leased assets 1,123,049 1,119,309
Cancelled leased assets 4,230 3,769
1,127,279 1,123,078

3


Notes 2012 2011

Property and equipment 11 320,738 265,433

Other assets
Intangible assets 12 64,163 65,117
Non-trade receivables 117,836 87,895
Accrued revenues 116,331 128,351
Advance payments 64,155 55,013
Prepaid expenses 15,869 26,434
Leasehold deposits 31,118 35,929
Derivative assets 18 34,915 475,431
425,647 856,886
Total assets 21,907,264 21,918,910

Liabilities
Borrowings
Borrowings 13 2,213,252 2,250,000
Debentures 14 14,802,390 15,522,368
17,015,642 17,772,368
Other liabilities
Non-trade payables 340,437 270,169
Accrued expenses 159,743 135,083
Unearned revenue 51,832 61,095
Withholdings 38,342 24,140
Income tax payables 70,888 74,921
Defined benefit liability 15 12,988 20,362
Leasehold deposits received 812,975 787,857
Deferred income tax liabilities 16 59,899 47,884
Provisions 17 2,017 10,446
Derivative liabilities 18 302,750 58,096
1,851,871 1,490,053
Total liabilities 18,867,513 19,262,421

4


Notes 2012 2011

Equity
Common stock 1,19 496,537 496,537
Capital surplus
Paid-in capital in excess of par value 369,339 369,339
Other capital surplus 38,200 38,200
407,539 407,539
Accumulated other comprehensive income and
24
expenses
Gain(loss) on valuation of available-for-sale
1,002 (388)
securities
Accumulated comprehensive income
(2,540) 47
(expense) of equity method investees
Gain(loss) on valuation of derivatives 18 2,125 (50,156)
Cumulative effect of overseas operation
(872) (343)
translation
(285) (50,840)
Retained earnings 19 2,135,851 1,803,144
Non-controlling interests 109 109
Total equity 3,039,751 2,656,489
Total liabilities and equity 21,907,264 21,918,910

The accompanying notes are an integral part of these consolidated financial statements.

5

Consolidated Statements of Comprehensive Income
Years Ended December 31, 2012 and 2011

(In millions of Korean won, except per share amounts)
Notes 2012 2011
Operating revenue
Interest income 20
Interest on bank deposits 45,876 41,991
Other interest income 2,117 385
47,993 42,376
Gain on valuation and disposal of
securities
Gain on disposal of available-for-sale
3,497 4,169
securities
3,497 4,169
Income on loans 2,20,21 1,267,952 1,264,033
Income on installment financial
2,20,21 605,650 720,771
receivables
Income on leases 20,21 916,030 871,571
Gain on disposal of loans 85,584 72,040
Gain on foreign transactions
Gain on foreign exchanges translation 386,038 21,235
Gain on foreign currency transactions 77,506 46,301
463,544 67,536
Dividend income 4,888 5,990
Other operating income
Gain on valuation of derivatives 2,574 134,197
Gain on derivatives transactions 4,163 3,887
Others 139,806 141,878
146,543 279,962
Total operating revenue 3,541,681 3,328,448

6


(In millions of Korean won, except per share
amounts)
Notes 2012 2011
Operating expenses
Interest expenses 20 895,321 956,039
Lease expenses 21 516,989 505,187
Bad debts expense 6 376,848 354,220
Loss on foreign transactions
Loss on foreign exchange translation 3,048 134,211
Loss on foreign currency transactions 4,812 3,887
7,860 138,098

General and administrative expenses 22 637,211 603,367

Other operating expenses
Loss on valuation of derivatives 385,783 21,229
Loss on derivatives transactions 77,068 46,326
Others 55,993 43,251
518,844 110,806
Total operating expenses 2,953,073 2,667,717

Operating income 2 588,608 660,731

Non-operating income 2
Gain on equity method valuation 4 7,025 3,968
Gain on disposal of property and
113 36
equipment
Miscellaneous income 5,301 2,995

12,439 6,999
Non-operating expenses 2
Loss on equity method valuation 4 8,610 -
Loss on disposal of property and
5,226 -
equipment
Contribution 2,608 2,644
Miscellaneous loss 730 1,695
17,174 4,339

Income before income taxes 583,873 663,391

Income tax expense 16 151,859 155,987

Net income 432,014 507,404

Net income attributable to:
Owners of the parent 432,014 507,404
Non-controlling interests - -
432,014 507,404

7


(In millions of Korean won, except per share
amounts)
Notes 2012 2011
Other comprehensive income,
24
net of income taxes
Gain(Loss) on valuation of available-for-
1,390 (900)
sale financial securities
Other comprehensive income of equity
4 (2,587) 23
method investees
Gain (Loss) on valuation of derivatives 52,281 17,768
Effect of overseas operation
(529) (360)
translation
50,555 16,531

Total comprehensive income 482,569 523,935

Total comprehensive income attributable
to:
Owners of the parent 482,569 523,935
Non-controlling interests - -
482,569 523,935
Earnings per share attributable to the
23
ordinary equity holders of the company
Basic earnings per share 4,350 5,109
Diluted earnings per share 4,350 5,109


8

Consolidated Statements of Changes in Equity

Accumulated Total
(In millions of Korean won) other attributable to Non-
comprehensive
Capital Capital income and Retained owners of the controlling
stock surplus expenses earnings parent interests Total equity
Balances as of January 1, 2011 496,537 407,539 (67,371) 1,400,013 2,236,718 129 2,236,847
Total comprehensive income
Net income - - - 507,404 507,404 - 507,404
Other comprehensive income
Loss on valuation of available-for-
- - (900) - (900) - (900)
sale securities
Other comprehensive income of
- - 23 - 23 - 23
equity method investees
Gain on valuation of derivatives - - 17,768 - 17,768 - 17,768
- - (360) - (360) - (360)
translation
Total comprehensive income - - 16,531 507,404 523,935 - 523,935
Transactions with owners
Year-end Dividends - - - (104,273) (104,273) - (104,273)
Liquidation of special purpose entity - - - - - (20) (20)
Total transactions with owners - - - (104,273) (104,273) (20) (104,293)
Balances as of December 31, 2011 496,537 407,539 (50,840) 1,803,144 2,656,380 109 2,656,489

9

Consolidated Statements of Changes in Equity

Accumulated Total
(In millions of Korean won) other attributable to Non-
comprehensive
Capital Capital income and Retained owners of the controlling
stock surplus expenses earnings parent interests Total equity
Balances as of January 1, 2012 496,537 407,539 (50,840) 1,803,144 2,656,380 109 2,656,489
Total comprehensive income
Net income - - - 432,014 432,014 - 432,014
Other comprehensive income
Loss on valuation of available-for-
- - 1,390 - 1,390 - 1,390
sale securities
Other comprehensive income of
- - (2,587) - (2,587) - (2,587)
equity method investees
Gain on valuation of derivatives - - 52,281 - 52,281 - 52,281
- - (529) - (529) - (529)
translation
Total comprehensive income 50,555 432,014 482,569 - 482,569
Transactions with owners
Interim Dividends - - - (99,307) (99,307) - (99,307)
Establishment of special
- - - - - 0 0
purpose entity
Total transactions with owners - - - (99,307) (99,307) 0 (99,307)
Balances as of December 31, 2012 496,537 407,539 (285) 2,135,851 3,039,642 109 3,039,751


10

Consolidated Statements of Cash Flows

2012 2011
Cash flows from operating activities
Cash generated from operations (Note 25) 1,364,223 630,961
Interest received 50,091 37,090
Interest paid (820,101) (864,563)
Dividends received 4,888 5,990
Income taxes paid (149,022) (154,724)
Net cash generated from(used in) operating
450,079 (345,246)
activities

Cash flows from investing activities
Acquisition of investments in associates (51,935) -
Decrease from business combination (161,643) -
Establishment of special purpose entity 0 20
Liquidation of special purpose entity - (40)
Decrease in deposits - 16
Dividends from equity method investments 733 707
Acquisition of land (38,305) (3,581)
Acquisition of building (22,053) (8,549)
Acquisition of structures (712) (379)
Disposal of vehicles 152 37
Acquisition of vehicles (2,731) (328)
Disposal of fixtures and furniture 835 626
Acquisition of fixtures and furniture (18,405) (37,712)
Acquisition of other tangible assets (48) (801)
Increase in construction in progress (4,743) (8,079)
Disposal of intangible assets - 71
Acquisition of intangible assets (7,842) (8,152)
Decrease in leasehold deposits 5,407 4,012
Increase in leasehold deposits (646) (7,609)
Net cash used in investing activities (301,935) (69,741)

Cash flows from financing activities
Proceeds from borrowings 2,498,287 2,990,000
Repayments of borrowings (2,698,655) (3,390,650)
Issuance of debentures 4,924,482 5,119,021
Repayments of debentures (4,925,688) (3,968,170)
Payments of dividends (99,307) (104,273)
Net cash generated from (used in) financing
(300,881) 645,928
activities

Exchange losses on cash and cash equivalents (5) (15)

Decrease in other cash and cash equivalents (529) (360)

Net increase(decrease) in cash and cash
(153,271) 230,566
equivalents

Cash and cash equivalents
Beginning of period 1,455,432 1,224,866
End of period 1,302,161 1,455,432


11

Notes to the Consolidated Financial Statements

1. General Information

Hyundai Capital Services, Inc. (the “Company”) was established on December 22, 1993, to engage
in installment financing, facilities lease and new technology financing. The Company changed its
trade name from Hyundai Auto Finance Co., Ltd. to Hyundai Financial Services Co. on April 21,
1995, and changed its trade name once again to Hyundai Capital Services, Inc. on December 31,
1998. In accordance with the Monopoly Regulation and Fair Trade Act, the Company is
incorporated into the Hyundai Motor Company Group. As of December 31, 2012, the Company’s
operations are headquartered in Yeouido, Seoul. Its major shareholders are Hyundai Motor
Company and GE International Holdings Corporation with 56.47% and 43.30% ownership,
respectively.

2. Summary of Significant Accounting Policies

The consolidated financial statements have been prepared and presented which included the
accounts of Hyundai Capital Services, Inc., as the parent company, according to Korean IFRS
1027, and Autopia Thirty-fifth SPC(trust) and other subsidiaries (collectively the “Group”), while HK
Savings Bank and five other entities are accounted for using the equity method.

Subsidiaries as of December 31, 2012 and 2011, are as follows. The Company has the substantial
power over the subsidiaries established as special purpose entities for asset securitization even
though its ownership interests over the subsidiaries do not exceed 50%.
Ratio of
Location ownership 2012 2011

Special Purpose Entities Korea 0.9% Autopia Thirty-fifth SPC(trust) Autopia Thirty-fifth SPC(trust)

Autopia Thirty-sixth SPC(trust) Autopia Thirty-sixth SPC(trust)

Autopia Thirty-seventh SPC(trust) Autopia Thirty-seventh SPC(trust)

Autopia Thirty-ninth SPC(trust) Autopia Thirty-ninth SPC(trust)

Autopia Fortieth SPC(trust) Autopia Fortieth SPC(trust)

Autopia Forty-second SPC(trust) Autopia Forty-second SPC(trust)

Autopia Forty-third SPC(trust) Autopia Forty-third SPC(trust)

Autopia Forty-fourth SPC(trust) Autopia Forty-fourth SPC(trust)

Autopia Forty-fifth SPC(trust) Autopia Forty-fifth SPC(trust)

Autopia Forty-sixth SPC(trust) Autopia Forty-sixth SPC(trust)

Autopia Forty-seventh SPC(trust) Autopia Forty-seventh SPC(trust)

Autopia Forty-ninth SPC(trust) -

HB third SPC -
1 1
Stock Company Germany 100% Hyundai Capital Europe GmbH Hyundai Capital Europe GmbH

Hyundai Capital India Private
India 100% -
Stock Company Limited

1
It holds 100% shares of Hyundai Capital Services Limited Liability Company

The Group’s financial statements for the annual period beginning on January 1, 2011, have been
prepared in accordance with Korean IFRS. These are the standards, subsequent amendments
and related interpretations issued by the International Accounting Standards Board ("IASB") that
have been adopted by the Republic of Korea.

12


The preparation of financial statements requires the use of certain critical accounting estimates. It
also requires management to exercise judgment in the process of applying the Group’s accounting
policies. The areas involving a higher degree of judgment or complexity, or areas where
assumptions and estimates are significant to the consolidated financial statements are disclosed in
Note 2.3.

The Group has adopted the method of calculating operating income retroactively in accordance
with amendment of Korean IFRS 1001, Presentation of financial statements, and the related
consolidated statements of comprehensive income was rewritten with reflecting changed facts as
Korean IFRS 1001 has been adopted.

Effects on change of the Group’s accounting policies for the years ended December 31, 2012 and
2011, are as follows:

(In millions of Korean
won, except earnings
per share) 2012 2011
1 1
Before Change After Before Change After

Operating income 585,459 3,149 588,608 659,423 1,308 660,731
Net income 432,014 - 432,014 507,404 - 507,404
Earnings per share 4,350 4,350 5,109 5,109

1
The changed amounts previously classified as operating income(loss) before amendment of Korean IFRS
1001, and excluded from operating income(loss) after amendment of Korean IFRS 1001 are as follows:

Type 2012 2011
Non-operating income
Gain on disposal of property and
113 35
equipment
Miscellaneous income 5,302 2,995
5,415 3,030
Non-operating income
Loss on disposal of property and
5,226 -
equipment
Contribution 2,608 2,644
Miscellaneous loss 730 1,694
8,564 4,338

New standards, amendments and interpretations issued but not effective for the financial year
beginning January 1, 2012, and not early adopted by the Group are as follows:

- Amendment of Korean IFRS 1001, Presentation of financial statements

Korean-IFRS 1001, Presentation of financial statements, was amended to require the other
comprehensive income items to be presented into two groups on the basis of whether they are
potentially reclassificable to profit or loss subsequently. An entity shall apply those amendments
for annual periods beginning on or after July 1, 2012. Earlier application is permitted. The Group

13


expects the application of the above amended Korean IFRS requirement would not have a
material impact on its consolidated financial statements.

- Amendments to Korean IFRS 1019, Employee Benefits

According to the amendments to Korean IFRS 1019, Employee Benefits, use of a ‘corridor’
approach is no longer permitted, and therefore all actuarial gains and losses incurred are
immediately recognized in other comprehensive income. All past service costs incurred from
changes in pension plan are immediately recognized, and expected returns on interest costs and
plan assets that used to be separately calculated are now changed to calculating net interest
expense(income) by applying discount rate used in measuring defined benefit obligation in net
defined benefit liabilities(assets). This amendment will be effective for the Group as of January 1,
2013, and the Group is assessing the impact of application of the amended Korean IFRS1019 on
its consolidated financial statements.

- Enactment of Korean IFRS 1113, Fair value measurement

Korean IFRS 1113, Fair value measurement, aims to improve consistency and reduce complexity
by providing a precise definition of fair value and a single source of fair value measurement and
disclosure requirements for use across Korean IFRS. Korean IFRS1113 does not extend the use
of fair value accounting but provides guidance on how it should be applied where its use is already
required or permitted by other standards within Korean IFRS. This amendment will be effective for
the Group as of January 1, 2013, and the Group is assessing the impact of application of the
amended Korean IFRS 1019 on its consolidated financial statements.

- Enactment of Korean IFRS 1110, Consolidated Financial Statements

Korean IFRS 1110, Consolidated Financial Statements, builds on existing principles by identifying
the concept of control as the determining factor in whether an entity should be included in the
consolidated financial statements of the Parent Company. An investor controls an investee when it
is exposed, or has rights, to variable returns from its involvement with the investee and has the
ability to affect those returns through its power over the investee. The standard provides additional
guidance to assist in the determination of control where this is difficult to assess. This enactment
will be effective for annual periods beginning on or after January 1, 2013, and the Group is
reviewing the impact of this standard.

- Enactment of Korean IFRS 1112, Disclosures of Interests in Other Entities

Korean IFRS 1112, Disclosures of Interests in Other Entities, provides the disclosure requirements
for all forms of interests in other entities, including a subsidiary, a joint arrangement, an associate,
a consolidated structured entity and an unconsolidated structured entity. This enactment will be
effective for annual periods beginning on or after January 1, 2013, and the Group is reviewing the
impact of this standard.

14


The following is a summary of significant accounting policies followed by the Group in the
preparation of its consolidated financial statements. These policies have been consistently applied
to all the periods presented, unless otherwise stated.

Certain accounts of the prior period financial statements were reclassified to conform with the
December 31, 2012 financial statement presentation. These reclassifications have no impact on
the previously reported operating revenue, operating income, net income and shareholders’ equity.

Type 2012 2011
Consolidated statement of financial
position
Loans receivable 10,848,062 9,263,835
Installment financial assets 5,021,194 6,605,421
Consolidated statements of
comprehensive income
Income on loans 1,548,557 1,264,033
Income on installment financial
436,247 720,771
receivables

15


2.1 Consolidation

a. Subsidiaries

Subsidiaries are all entities (including special purpose entities) over which the Company has the
power to govern the financial and operating policies generally accompanying a shareholding of
more than one-half of the voting rights. The existence and effect of potential voting rights that are
currently exercisable or convertible are considered when assessing whether the Company controls
another entity. The Group also assesses existence of control where it does not have more than
50% of the voting power but is able to govern the financial and operating policies by virtue of de-
facto control. De-facto control may arise in circumstances where the size of the Group’s voting
rights relative to the size and dispersion of holdings of other shareholders give the Group the power
to govern the financial and operating policies and others.

Subsidiaries are fully consolidated from the date on which control is transferred to the Company.
They are de-consolidated from the date that control ceases.

The Group uses the acquisition method to account for business combinations. The consideration
transferred is measured as the fair values of the assets transferred, equity interests issued and
liabilities incurred or assumed at the acquisition date. Acquisition-related costs are expensed as
incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business
combination are measured initially at their fair values at the acquisition date. On an acquisition-by-
acquisition basis, the Group recognizes any non-controlling interest in the acquiree at the non-
controlling interest’s proportionate share of the acquiree’s net assets.

The excess of the consideration transferred and the amount of any non-controlling interest in the
acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over the
fair value of the Group’s share of the identifiable net assets acquired is recorded as goodwill. If this
is less than the fair value of the net assets of the subsidiary acquired in the case of a bargain
purchase, the difference is recognized directly in the statement of comprehensive income.

Intercompany transactions, balances and unrealized gains on transactions between Group
companies are eliminated.

b. Special purpose entities

The Group established several SPEs for the purpose of asset-backed securitization, but owns none
of the shares directly or indirectly. The Group consolidates the SPEs when the risks, rewards and
substance of the relationship indicated that the Group consolidates the SPEs. SPEs controlled by
the Group are created with conditions that impose strict limits on the decision-making power over
the operations. Therefore, the Group obtains all benefits from the SPEs’ operation and net assets,
and that the Group may be exposed to risks incident to the activities of the SPEs or the Group
retains the majority of the residual or ownership risks related to the SPEs’ assets.

16


c. Transactions with non-controlling interests
The Group treats transactions with non-controlling interests as transactions with equity owners of
the Group. For purchases from non-controlling interests, the difference between any consideration
paid and the relevant share acquired of the carrying value of net assets of the subsidiary is
recorded in equity. Gains or losses on disposals to non-controlling interests are also recorded in
equity.

d. Associates and joint ventures

Associates are all entities over which the Group has significant influence but not control, generally
accompanying a shareholding of between 20% and 50% of the voting rights. Investments in
associates are accounted for using the equity method of accounting and are initially recognized at
cost. The Group’s investment in associates includes goodwill identified on acquisition, net of any
accumulated impairment loss.

The Group’s share of its associates’ post-acquisition profits or losses is recognized in the income
statement, and its share of post-acquisition movements in other comprehensive income is
recognized in other comprehensive income. The cumulative post-acquisition movements are
adjusted against the carrying amount of the investment. When the Group’s share of losses in an
associate equals or exceeds its interest in the associate, including any other unsecured
receivables, the Group does not recognize further losses, unless it has incurred obligations or made
payments on behalf of the associate.

Unrealized gains on transactions between the Group and its associates are eliminated to the extent
of the Group’s interest in the associates. Unrealized losses are also eliminated unless the
transaction provides evidence of an impairment of the asset transferred. Accounting policies of
associates have been changed where necessary to ensure consistency with the policies adopted by
the Group.

2.2 Foreign currency translation

a. Functional and presentation currency

Items included in the financial statements of each of the Group’s entities are measured using the
currency of the primary economic environment in which the entity operates (the “functional
currency”). The consolidated financial statements are presented in Korean won, which is the
Group’s functional currency.

b. Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates
prevailing at the dates of the transactions or valuation where items are remeasured. Foreign
exchange gains and losses resulting from the settlement of such transactions and from the
translation at year-end exchange rates of monetary assets and liabilities denominated in foreign
currencies are recognized in the income statement, except when deferred in other comprehensive
income as qualifying cash flow hedges.

17


2.3 Critical accounting estimates and assumptions

Estimates and judgments are continually evaluated and are based on historical experience and
other factors, including expectations of future events that are believed to be reasonable under the
circumstances. The resulting accounting estimates will, by definition, seldom equal the related
actual results. The estimates and assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within the next financial year are
addressed below.

a. Allowance for doubtful accounts

The Group presents the allowance for doubtful accounts calculated based on the best estimates
that are necessary to reflect the impairment incurred at each reporting date. Allowance for doubtful
accounts is recognized as individual and collective units considering the financial circumstances of
customers, net realizable value, credit quality, size of portfolio, concentrativeness, economic factors
and others. According to the change in these factors, the allowance for doubtful accounts will be
changed in a future period.

b. Fair value of financial instruments

Fair value of financial assets and liabilities is based on quoted market prices, exchange-broker
prices of financial instruments traded in an active market. If there is no quoted price for a financial
instrument, the Group establishes fair value by using valuation techniques and advanced self-
valuation techniques.

Valuation techniques include the Discounted Cash Flow method using variables observable in
market, comparison method with similar instruments that have observable market transactions, and
option pricing model. For more complicated financial instruments, the Group uses advanced self-
valuation techniques. Parts of or all the variables used in this valuation technique may not be
observable in market, or may be derived from quoted prices and market ratio, or may be measured
based on specific assumption.

At initial recognition if the difference between the fair value of valuation technique and transaction
price occurs, then the transaction price as the best estimate of fair value is recognized as fair value.
This fair value difference presents in profit immediately on any available observable market data
according to individual factors and changes of environment.

c. Estimated impairment of goodwill

The Group tests annually whether goodwill has suffered any impairment in accordance with the
accounting policy stated in Note 2.13. The recoverable amounts of cash-generating units have been
determined based on value-in-use calculations. These calculations require the use of estimates.

18


d. Defined benefit liability

The present value of the defined benefit liability depends on a number of factors that are
determined on an actuarial basis using a number of assumptions. The assumptions used in
determining the net cost (income) for pensions include the discount rate. Any changes in these
assumptions will impact the carrying amount of the defined benefit liability. The Group determines
the appropriate discount rate at the end of each year. This is the interest rate that is used to
determine the present value of estimated future cash outflows expected to be required to settle the
defined benefit liability. In determining the appropriate discount rate, the Group considers the
interest rates of high-quality corporate bonds that are denominated in the currency in which the
pension benefits will be paid, and that have terms to maturity approximating to the terms of the
related pension liability. Other key assumptions for defined benefit liability are based in part on
current market conditions. Additional information is disclosed in Note 2.15.

2.4 Revenue recognition

The Group recognizes capital lent to customers as loans receivable. While installment financial
capital paid by the Group to manufacturers or sellers (including agencies) on behalf of customers is
recognized as installment financial assets. Financial lease receivables classified as financial leases
are recognized as lease receivables.

The expected future cash flows from loans receivable, installment financial assets and lease
receivables (“Financial receivables”) described above are amortized under the effective interest
method over the period of the financial receivables being used by customers.

2.5 Statements of cash flows

The Group prepares statements of cash flows using indirect method

2.6 Cash and cash equivalents

Cash and cash equivalents include cash in hand, deposits held at call with banks and other short-
term highly liquid investments with original maturities of three months or less.

2.7 Financial assets

a. Classification

The Group classifies its financial assets as financial assets at fair value through profit or loss, loans
and receivables and available-for-sale financial assets. Management determines the classification
of its financial assets at initial recognition.

Financial assets at fair value through profit or loss

19


Financial assets at fair value through profit or loss are financial assets held for trading. A financial
asset is classified in this category if acquired principally for the purpose of selling in the short term.
Derivatives are also categorized as held for trading unless they are designated as hedges.
Meanwhile, the Group has no financial asset at fair value through profit or loss other than financial
assets held for trading.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that
are not quoted in an active market.

Available-for-sale financial assets

Available-for-sale financial assets are non-derivatives that are either designated in this category or
not classified in any of the other categories.

b. Recognition and measurement

Regular purchases and sales of financial assets are recognized on the trade-date. Investments are
initially recognized at fair value plus transaction costs for all financial assets not carried at fair value
through profit or loss. Financial assets carried at fair value through profit or loss are initially
recognized at fair value, and transaction costs are expensed in the income statement. Available-for-
sale financial assets and financial assets at fair value through profit or loss are subsequently carried
at fair value. Loans and receivables are subsequently carried at amortized cost using the effective
interest method.

Changes in the fair value of financial assets at fair value through profit or loss are recognized in
income statement as gain or loss.

When securities classified as available-for-sale are sold or impaired, the accumulated fair value
adjustments recognized in equity are transferred to the income statement as gain or loss on
disposal of securities. Interest on available-for-sale securities calculated using the effective interest
method is recognized in the income statement as part of interest income. Dividends on available-for
sale equity instruments are recognized in the income statement as dividend income when the
Group’s right to receive payments is established.

c. Derecognition of financial assets

A financial asset is derecognized only if the contractual rights on cash flow of the financial asset
terminate or all the risks and rewards of ownership of the financial asset are substantially
transferred.

If the Group transfers substantially all the risks and rewards of ownership of the financial asset, the
Group shall derecognize the financial asset and recognize separately as assets or liabilities any
rights and obligations created or retained in the transfer. If the Group retains substantially all the

20


risks and rewards of ownership of the financial asset, the Group shall continue to recognize the
financial asset.

d. Impairment of financial assets

(1) Assets carried at amortized cost

The Group assesses at the end of each reporting period whether there is objective evidence that a
financial asset is impaired. Impairment losses are incurred only if there is objective evidence of
impairment and that loss event has an impact on the estimated future cash flows of the financial
asset. The amount of the loss is measured as the difference between the asset’s carrying amount
and the present value of estimated future cash flows discounted at the financial asset’s original
effective interest rate.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be
related objectively to an event occurring after the impairment was recognized, the reversal of the
previously recognized impairment loss is recognized in the income statement.

(2) Available-for-sale financial assets

The Group assesses at the end of each reporting period whether there is objective evidence that a
financial asset or a group of financial assets is impaired. For equity securities classified as
available-for-sale, a significant or prolonged decline in the fair value of the security below its cost is
also evidence that the assets are impaired. If any such evidence exists for available-for-sale
financial assets, the difference between carrying amount and current fair value is recognized in
profit or loss. Impairment losses recognized in profit or loss for an investment in an equity
instrument classified as available for sale are not be reversed through profit or loss. If, in a
subsequent period, the fair value of a debt instrument classified as available-for-sale increases and
the increase can be objectively related to an event occurring after the impairment loss was
recognized in profit or loss, the impairment loss is reversed.

2.8 Deferral of loan origination fee and loan origination cost

Loan origination fee, which is a processing fee in relation to the loan origination process such as
upfront fee, is deferred and deducted from the loan account, adjusted over the life of the loan based
on the effective interest rate method. Loan origination cost, which relates to activities performed by
the lender such as soliciting potential borrowers, is deferred and added to the loan account,
adjusted over the life of the loan based on the effective interest rate method when the future
economic benefit in connection with the cost incurred can be identified on a per loan basis.

2.9 Allowances for financial receivables

a. Calculation of allowances for doubtful accounts

The Group recognizes the impairment of receivables as an allowance for doubtful accounts. It is
based on the impairment estimates made through impairment assessment of receivables carried at

21


amortized cost. Allowance for doubtful accounts consists of impairments related to individually
material financial receivables and allowances of collective assessment for impairment incurred in
homogeneous assets.
Individually material receivables undertake the individual assessment of the difference between the
assets’ carrying amount and the present value of estimated future cash flows. Unimpaired assets
from individual assessments and individually immaterial assets undertake the collective assessment
classified by asset groups that have analogous risk attributes. The Group uses statistical model in
the collective assessment based on the expected probability of default, periodic collect amounts,
loss-given default based on the past losses, loss emergency period, and management’s decision
about the current economy and credit circumstances. The material factors used in statistical model
for the collective assessment are evaluated to compare with actual data regularly.

The amount of impairment loss is reflected in allowance for doubtful accounts as profit or loss.

b. Write-off policy

The Group writes off the doubtful receivables when the assets are deemed unrecoverable. This
decision considers the information about significant changes of financial position such that a
borrower or an obligor is in default, or the amount recoverable from security is not enough. Write-off
decision of standard small loan is generally made based on the delinquent status of loan.

2.10 Leases

a. Classification

The Group classifies leases based on the extent to which risks and rewards incidental to ownership
of a leased asset lie with the lessor or the lessee.

The lease arrangement classified as a financial lease is where: ①the lease transfers ownership of
the asset to the lessee by the end of the lease term, ②the lessee has the option to purchase the
asset at a price that is expected to be sufficiently lower than the fair value at the date the option
becomes exercisable for it to be reasonably certain, at the inception of the lease, that the option will
be exercised, ③the lease term is for the major part of the economic life of the asset even if the title
is not transferred, ④at the inception of the lease the present value of the minimum lease payments
amounts to at least substantially all of the fair value of the leased asset, or ⑤the leased assets are
of such a specialized nature that only the lessee can use them without major modifications.

Minimum lease payments include that part of the residual value that is guaranteed by the lessee,
by a party related to the lessee or by a third party unrelated to the Group that is financially capable
of discharging the obligations under the guarantee.

b. Finance leases

Where the Group has substantially all the risks and rewards of ownership, leases of property, plant
and equipment are classified as finance lease. An amount equal to the net investment in the lease
is presented as a receivable. Expenses that are incurred with regard to the lease contract made but

22


not executed at the date of the statement of financial position are accounted for as prepaid leased
assets and are reclassified as finance lease receivables at the inception of the lease. Lease
receivables include amounts such as commissions, legal fees and internal costs that are
incremental and directly attributable to negotiating and arranging a lease. Each lease payment is
allocated between principal and finance income. Financial income on an uncollected part of net
investment shall be allocated to each period during the lease term so as to produce a constant
periodic rate of interest on the remaining balance of the liability.

If a lease agreement is cancelled in the middle of lease term, the Group reclassifies the amount of
financial lease receivables into cancelled leased receivables, while the amount of financial lease
receivables not yet due is reclassified as cancelled leased assets.

c. Operating leases

The property on operating leases is stated at acquisition cost, net of accumulated depreciation.
Expenditures that are incurred for the lease contract made but not executed at the date of the
statement of financial position are accounted for as prepaid leased assets and are reclassified as
operating leased assets at the inception of the lease term. Rentals from operating lease other than
any guaranteed residual value are reported as revenues on a straight-line basis over the lease
term. Initial direct costs incurred during the period of preparing the lease contract are recognized as
operating leased assets and are amortized over the lease term in proportion to the recognition of
income on leased assets.

If a lease agreement is cancelled in the middle of lease term, the balance of operating leased
assets is substituted for cancelled leased assets. The cancelled leased assets are depreciated over
its residual useful life, but are mostly disposed of in the month of cancellation.

2.11 Property and equipment

Property and equipment are stated at historical cost less accumulated depreciation and
accumulated impairment losses. Historical cost includes expenditure that is directly attributable to
the acquisition of the items. Subsequent costs are included in the asset’s carrying amount or
recognized as a separate asset, as appropriate, only when it is probable that future economic
benefits associated with the item will flow to the Group and the cost of the item can be measured
reliably.

Depreciation method and estimated useful lives used by the Group are as follows:

Depreciation Method Useful life
Buildings Straight-line 40 years
Structures Straight-line 40 years
Fixtures and furniture Straight-line 3-4 years
Vehicles Straight-line 4 years
Other tangible assets Straight-line 5 years

23


Work of art classified under other tangible assets are not amortized due to their indefinite useful life
in nature.

The assets’ depreciation method, residual values and useful lives are reviewed, and adjusted if
appropriate, at the end of each reporting period. An asset’s carrying amount is written down
immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated
recoverable amount. Gains and losses on disposals are determined by comparing the proceeds
with the carrying amount and are recognized within non-operating income (expenses) in the income
statement.

2.12 Intangible assets

Intangible assets are stated at cost, which includes acquisition cost and directly related costs
required to prepare the asset for its intended use. Intangible assets are stated net of accumulated
amortization calculated based on using the following amortization method and estimated useful
lives:

Amortization Method Useful life
Development costs Straight-line 5 years
Rights of trademark Straight-line 5 years
Other intangible assets Straight-line 5 years

Memberships classified under other intangible assets are not amortized over their indefinite useful
life.

2.13 Impairment of non-financial assets

Goodwill or assets that have an indefinite useful life are not subject to amortization and are tested
annually for impairment. Assets that are subject to amortization are reviewed for impairment
whenever events or changes in circumstances indicate that the carrying amount may not be
recoverable. An impairment loss is recognized for the amount by which the asset’s carrying amount
exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less
costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the
lowest levels for which there are separately identifiable cash flows (cash-generating units). Non-
financial assets that are subject to amortization suffered impairment are reviewed for possible
reversal of the impairment at each reporting date.

2.14 Financial Liabilities

(a) Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss are financial instruments held for trading.
Financial liabilities are classified as financial liabilities at fair value through profit or loss when
incurred principally for the purpose of repurchasing it in the near term. Derivatives or embedded
derivatives are also categorized as this category unless they are designated as hedges.

24


(b) Financial liabilities carried at amortized cost

The Group classifies non-derivative financial liabilities, except for financial liabilities at fair value
through profit or loss and financial liabilities that arise when a transfer of a financial asset does not
qualify for derecognition, as financial liabilities carried at amortized cost and as ‘trade payables’,
‘borrowings’, and ‘other financial liabilities’ in the statement of financial position. In case when a
transfer of a financial asset does not qualify for derecognition, the transferred asset is continuously
recognized as asset and the consideration received is recognized as financial liabilities.

2.15 Pension obligations

The Group operates various post-employment schemes, including both defined benefit and defined
contribution pension plans. A defined contribution plan is a pension plan under which the Group
pays fixed contributions into a separate entity. The Group has no legal or constructive obligations to
pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits
relating to employee service in the current and prior periods. For defined contribution plans, the
Group pays contributions to publicly or privately administered pension insurance plans on a
mandatory, contractual or voluntary basis. The Group has no further payment obligations once the
contributions have been paid. The contributions are recognized as employee benefit expense when
they are due. Prepaid contributions are recognized as an asset to the extent that a cash refund or a
reduction in the future payments is available.

A defined benefit plan is a pension plan that is not a defined contribution plan. Typically defined
benefit plans define an amount of pension benefit that an employee will receive on retirement,
usually dependent on one or more factors such as age, years of service and compensation. The
liability recognized in the statement of financial position in respect of defined benefit pension plans
is the present value of the defined benefit obligation at the end of the reporting period less the fair
value of plan assets. The defined benefit obligation is calculated annually by independent actuaries
using the projected unit credit method. The present value of the defined benefit obligation is
determined by discounting the estimated future cash outflows using interest rates of high-quality
corporate bonds that are denominated in the currency in which the benefits will be paid, and that
have terms to maturity approximating to the terms of the related pension obligation.

Actuarial gains and losses arising from experience adjustments and changes in actuarial
assumptions are charged or credited to equity in other comprehensive income in the period in
which they arise. Past-service costs are recognized immediately in income.

2.16 Provisions and contingent liabilities

When there is a probability that an outflow of economic benefits will occur due to a present
obligation resulting from a present legal or as a result of past events, and whose amount is
reasonably estimable, a corresponding amount of provision is recognized in the financial
statements. Where there are a number of similar obligations, the likelihood that an outflow will be
required in settlement is determined by considering the class of obligations as a whole. A provision
is recognized even if the likelihood of an outflow with respect to any one item included in the same
class of obligations may be small.

25


Provisions are the best estimate of the expenditure required to settle the present obligation that
consider the risks and uncertainties inevitably surround many events and circumstances at the
reporting date. Where the effect of the time value of money is material, the amount of a provision is
the present value of the expenditures expected to be required to settle the obligation.

A possible obligation that arises from past events and whose existence will be confirmed only by
the occurrence or non-occurrence of uncertain future events, or a present obligation that arises
from past events but is not certain to occur, or cannot be reliably estimated, a disclosure regarding
the contingent liability is made in the notes to the financial statements.

2.17 Derivative financial instruments

The Group has applied hedging policies using derivatives to deal with the risk of changes in foreign
currency exchange rates and interest rates arising from liabilities. The Group has contracted
currency swap and interest swap derivative financial instruments to deal with the risk of changes in
foreign currency exchange rates arising from foreign currency liabilities and the risk of changes in
interest rates arising from floating-rate liabilities.

Derivatives are initially recognized at fair value on the date a derivative contract is entered into and
are subsequently re-measured at their fair value. The method of recognizing the resulting gain or
loss depends on whether the derivative is designated as a hedging instrument, and if so, the nature
of the item being hedged. The Group applies cash flow hedge, which are hedges of a particular risk
associated with a recognized asset or liability or a highly probable forecast transaction.

The Group documents at the inception of the transaction the relationship between hedging
instruments and hedged items, as well as its risk management objectives and strategy for
undertaking various hedging transactions to apply hedging accounting. The Group also documents
its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that
are used in hedging transactions are highly effective in offsetting changes in fair values or cash
flows of hedged items.

The effective portion of changes in the fair value of derivatives that are designated and qualify as
cash flow hedges is recognized in other comprehensive income. The gain or loss relating to the
ineffective portion is recognized immediately in profits or losses. The cumulative gain or loss that
was reported in equity is recognized when the hedged items affect profits and losses.

When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for
hedge accounting, any cumulative gain or loss existing in equity at that time remains in equity and
is recognized when the forecast transaction is ultimately recognized in the income statement. When
a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported
in equity is immediately transferred to profits or losses.

26


2.18 Current and deferred income tax

The tax expense for the period comprises current and deferred tax. Tax is recognized in the income
statement, except to the extent that it relates to items recognized in other comprehensive income or
directly in equity. In this case, the tax is also recognized in other comprehensive income or directly
in equity.

The current income tax charge is calculated on the basis of the tax laws enacted or substantively
enacted at the statement of financial position date in the countries where the Group operates and
generates taxable income. Management periodically evaluates positions taken in tax returns with
respect to situations in which applicable tax regulation is subject to interpretation. It establishes
provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

Deferred income tax is recognized, using the liability method, on temporary differences arising
between the tax bases of assets and liabilities and their carrying amounts in the consolidated
financial statements. However, deferred tax assets and liabilities are not recognized if they arise
from initial recognition of an asset or liability in a transaction other than a business combination that
at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income
tax is determined using tax rates and laws that have been enacted or substantially enacted by the
statement of financial position date and are expected to apply when the related deferred income tax
asset is realized or the deferred income tax liability is settled.

Deferred income tax assets are recognized only to the extent that it is probable that future taxable
profit will be available against which the temporary differences can be utilized.

Deferred income tax is provided on temporary differences arising on investments in subsidiaries,
associates and joint ventures except for deferred income tax liability where the timing of the
reversal of the temporary difference is controlled by the Group and it is probable that the temporary
difference will not reverse in the foreseeable future.

Deferred income tax assets and liabilities are offset when there is a legally enforceable right to
offset current tax assets against current tax liabilities and when the deferred income taxes assets
and liabilities relate to income taxes levied by the same taxation authority on either the same
taxable entity or different taxable entities where there is an intention to settle the balances on a net
basis.

2.19 Earnings per share

Basic earnings per share is calculated by dividing the profit attributable to equity holders of the
Group by the weighted average number of ordinary shares in issue during the period excluding
ordinary shares purchased by the Group and held as treasury shares.

Diluted earnings per share is calculated by adjusting the weighted average number of ordinary
shares outstanding to assume conversion of all dilutive potential ordinary shares. Only dilutive
potential ordinary shares are dilutive, they are added to the number of ordinary shares outstanding
in the calculation of diluted earnings per share.

27


2.20 Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the
chief operating decision-maker. The chief operating decision-maker is responsible for allocating
resources and assessing performance of the operating segments.

2.21 Dividend Distribution

Dividend distribution to the Company’s shareholders is recognized as a liability in the financial
statements in the period in which the dividends are approved by the Company’s shareholders.

2.22 Approval of Issuance of the Financial Statements

The issuance of the December 31, 2012 financial statements of the Group was approved by the
Board of Directors on February 28, 2013.

3. Restricted Financial Instruments

Restricted financial instruments are as follows:

Amount
Type Entities 2012 2011 Restriction
Hana Bank Maintaining deposits for checking
Deposits 12 10
and 2 others accounts

4. Securities

Securities are as follows:

(in millions of Korean won)
Type 2012 2011
Available-for-sale securities
Marketable equity securities 6,856 5,687
Equity securities
Unlisted equity securities 11,165 10,526
18,021 16,213
Debt securities Government and public bonds 2,262 2,239
Sub-total 20,283 18,452
Equity method investments 98,796 51,768
119,079 70,220

28


Available-for-sale securities

Available-for-sale securities are as follows:

(1) Equity securities

(in millions of Korean won) Book value
Number of Ownership Acquisition
shares (%) cost
2012 2011
Marketable equity securities
NICE Information
682,965 2.25 3,312 3,729 3,190
Service
NICE Holdings 49,162 1.42 3,491 3,127 2,497
Unlisted equity securities
Hyundai Finance
1 1,700,000 9.29 9,888 11,065 10,426
Corp.
Korean Egloan, Inc. 4,000 3.12 100 100 100
16,791 18,021 16,213

1
The fair value for Hyundai Finance Corp. was valued as the average of valuation prices provided by two
external appraisers, KIS Pricing Inc. and Korea Asset Pricing, using the discounted cash flow model. The
five-year financial statements, projected based on past performance, were used in measuring the fair value
assuming that the operational structure will remain as is for the next five years. Operating income and
expenses were estimated based on the past performance, business plan and expected market conditions.

(2) Debt securities

Book value
Interest Acquisition
Issuer rate (%) cost
2012 2011
Government and Metropolitan Rapid
2.50 2,170 2,262 2,239
public bonds Transit and others

29


Equity method investments
Equity method investments are as follows:

2012
Number of Ownership Acquisition Net asset
Book value
shares (%) cost value
HK Savings Bank
1 4,990,438 19.99 45,719 38,922 51,170
1
HI Network, Inc. 13,332 19.99 76 861 861
1
Korea Credit Bureau 140,000 7.00 3,800 2,948 3,985
Hyundai Capital
Germany GmbH
600,200 30.01 1,065 1,183 1,183
Hyundai Capital UK
Ltd
1,000,000 29.99 10,850 6,197 6,197
Beijing Hyundai Auto
Finance Co., Ltd
- 46.00 41,085 35,400 35,400

102,595 85,511 98,796

2011
Number of Ownership Acquisition Net asset
Book value
shares (%) cost value
HK Savings Bank
1 4,990,438 19.99 45,719 33,487 45,735
1
HI Network, Inc. 13,332 19.99 76 1,003 1,003
1
Korea Credit Bureau 140,000 7.00 3,800 2,928 3,965
Hyundai Capital
Germany GmbH
600,200 30.01 1,065 1,065 1,065

50,660 38,483 51,768

1
The Group’s shareholdings in HK Savings Bank, HI Network, Inc. and Korea Credit Bureau are less than
20%. However, the Group is able to significantly influence such involvement in the financial and operating
processes, and thus the equity method is applied.

30


Valuations of equity method investments are as follows:

2012
Changes in
accumulated
Beginning Gain (loss) Ending
Acquisition other Dividends
Balance on valuation comprehensive Balance
income

HK Savings Bank 45,735 - 5,809 (374) - 51,170
HI Network, Inc. 1,003 - 591 - (733) 861
Korea Credit
Bureau
3,965 - 276 (256) - 3,985
Hyundai Capital
Germany GmbH
1,065 - 348 (230) - 1,183
Hyundai Capital
UK Ltd
- 10,850 (4,317) (336) - 6,197
Beijing Hyundai
Auto Finance - 41,085 (4,294) (1,391) - 35,400
Co., Ltd
51,768 51,935 (1,587) (2,587) (733) 98,796

2011
Changes in
accumulated
Beginning Gain (loss) Ending
Acquisition other Dividends
Balance on valuation comprehensive Balance
income

HK Savings Bank 42,849 - 2,863 23 - 45,735
HI Network, Inc. 1,055 - 654 - (706) 1,003
Korea Credit
Bureau
3,514 - 451 - - 3,965
Hyundai Capital
Germany GmbH
1,065 - - - - 1,065

48,483 - 3,968 23 (706) 51,768

The differences between the acquired amounts of equity method investments and their
corresponding net asset value are as follows:

2012 2011
HK Savings Bank 12,248 12,248
Korea Credit Bureau 1,037 1,037
13,285 13,285

31


Summary of financial information of investees follows:

2012
Operating Net
Assets Liabilities
revenue income(loss)
HK Savings Bank
1 2,655,804 2,461,195 394,503 29,047
HI Network, Inc. 7,629 3,322 19,023 3,077
Korea Credit Bureau 55,944 13,834 47,660 5,019
Hyundai Capital Germany
GmbH
4,524 581 1,354 626
Hyundai Capital UK Ltd 596,343 575,678 12,452 (14,393)
Beijing Hyundai Auto
Finance Co., Ltd
80,502 3,546 1,541 (9,239)

1
HK Savings Bank is a corporation with fiscal year ending on June 30. But its assets and liabilities above
are as of December 31, 2012, and the results of its operations are for the year ended December 31, 2012.

2011
Operating Net
Assets Liabilities
revenue income (loss)
HK Savings Bank
1 2,593,289 2,425,855 372,233 14,313
HI Network, Inc. 8,560 3,544 21,835 3,314
Korea Credit Bureau 51,484 9,650 40,535 6,380
Hyundai Capital
3,889 341 1,171 503
Germany GmbH

1
HK Savings Bank is a corporation with fiscal year ending on June 30. But its assets and liabilities above
are as of December 31, 2011, and the results of its operations are for the year ended December 31, 2011.

32


5. Financial Receivables

Financial receivables are as follows:

2012
Deferred loan
origination fees Allowance for
Present value
Principal and costs doubtful Book value
discounts
(Initial direct costs accounts
for lease assets)
Loan receivables
Loans 11,037,604 (165,195) (1,458) (273,589) 10,597,362
Installment
financial assets
Auto 5,259,314 6,458 - (72,447) 5,193,325
Durable goods 1 - - - 1
Mortgage 16,485 30 - (277) 16,238
5,275,800 6,488 - (72,724) 5,209,564
Lease receivables
Finance lease
2,838,134 (782) - (32,423) 2,804,929
receivables
Cancelled lease
6,951 - - (6,458) 493
receivables
2,845,085 (782) - (38,881) 2,805,422

19,158,489 (159,489) (1,458) (385,194) 18,612,348

2011
Deferred loan
origination fees Allowance for
Present value
Principal and costs doubtful Book value
discounts
(Initial direct costs accounts
for lease assets)
Loan receivables
Loans 9,650,665 (153,006) (1,841) (231,983) 9,263,835
Installment
financial assets
Auto 6,698,503 (34,533) - (85,949) 6,578,021
Durable goods 1,419 3 - (141) 1,281
Mortgage 25,620 60 - (1,204) 24,476
Machinery 1,674 - 6 (37) 1,643

6,727,216 (34,470) 6 (87,331) 6,605,421
Lease receivables
Finance lease
2,300,204 (703) - (21,118) 2,278,383
receivables
Cancelled lease
4,656 - - (4,445) 211
receivables
2,304,860 (703) - (25,563) 2,278,594

18,682,741 (188,179) (1,835) (344,877) 18,147,850

33

2012 hcs영문감사보고서

Recomendados

Recomendados

Más contenido relacionado

La actualidad más candente

La actualidad más candente (18)

Similar a 2012 hcs영문감사보고서

Similar a 2012 hcs영문감사보고서 (17)

Más de Hyundai Finance

Más de Hyundai Finance (20)

Último

Último (20)

2012 hcs영문감사보고서