Hyundai Motor Company Annual Report 2013

Plain-text annual report

H Y U N D A I M o t o r C o M p A N Y | A n n u A l R e p o R t 2 0 1 3 HYUNDAI Motor CoMpANY AnnuAl RepoRt 2013 People’s expectation toward individual mobility requires more than just a convenient means of transportation. The old understanding of cars has become outdated. A car represents individuals’ lifestyles, and it became an integral part of their lives. At the same time, the automobile industry has experienced seismic change. Hyundai Motor Company has grown rapidly to become one of the largest automakers, backed by world class production capability and superior quality. We have now reached a point where we need a qualitative approach to bring bigger ideas and relevant solutions to our customers. This is an opportunity to move forward and we have developed a new brand slogan that encapsulates our willingness to take a big leap. Led by our new slogan and the new thinking underlying it, we will become a company that keeps challenging itself to unlock new possibilities for people and the planet. Hyundai Motor Company www.hyundai.com Annual Report. 1406 English. KM-SW Copyright © 2014 Hyundai Motor Company. All Rights Reserved. www.facebook.com/hyundaiworldwide www.youtube.com/hyundaiworldwide plus.google.com/+hyundai TABLE OF CONTENTS prOLOguE 04 10 14 16 Financial HigHligHts & Business HigHligHts Message FROM tHe ceO Hyundai MOtOR gROup HistORy BLuE WAVES IN HYuNDAI 22 24 26 30 32 34 36 Best value HigH peRFORMance tHe naMe FOR satisFactiOn neW diMensiOn OF dRiving tHe FutuRe & FutuRe caRs clean MOBility cO2 ZeRO BLuE WAVES IN THE WOrLD 40 41 42 45 47 48 52 58 60 Quality ManageMent seRvice ManageMent R&d netWORks glOBal pROductiOn systeM glOBal sales WORldWide netWORk glOBal MaRketing WORld Rally cHaMpiOnsHip MOving tHe WORld tOgetHeR 64 cORpORate gOveRnance and BOaRd OF diRectORs 66 Financial stateMents 142 pROduct lineup 02 HYUNDAI MOTOR COMPANY ANNuAL rEpOrT 2013 03 THE MOST BELOVED AuTO BrAND Hyundai Motor’s brand direction, “Modern premium,” is about providing to more customers new values and experiences that go beyond what they expect through ways that are unique to the brand. the brand slogan, “new thinking. new possibilities.,” reflects the company’s will to move forward in its effort to create “Modern premium” values and experiences through innovative thinking. the live Brilliant global campaign, embodying the brand direction, features moving stories about people’s life experiences shared with Hyundai Motor vehicles. Hyundai Motor will continue to strive to make the brand the most trusted and loved by customers worldwide. 04 HYUNDAI MOTOR COMPANY ANNuAL rEpOrT 2013 05 SALES rEVENuE (Unit : KRW Million) 87,307,636 87,307,636 84,469,721 77,797,895 66,985,271 2010 2011 2012 2013 06 HYUNDAI MOTOR COMPANY ANNuAL rEpOrT 2013 07 gLOBAL rETAIL SALES (unit : 1,000 vehicles) 4,621 2010 2011 2012 2013 3,701 4,099 4,392 4,621 08 HYUNDAI MOTOR COMPANY ANNuAL rEpOrT 2013 PROLOGUE FINANCIAL HIgHLIgHTS & BuSINESS HIgHLIgHTS 09 Financial HigHligHts SALES rEVENuE (unit : kRW Million) OpErATINg INCOME (unit : kRW Million) Operating income Margin (%) Business HigHligHts gLOBAL rETAIL SALES korea Overseas gLOBAL MArkET SHArE (unit : 1,000 vehicles) (unit : %) 4,621 4,392 1 4 6 0 8 9 , 3 7 6 6 4 2 7 , 3 4,099 3,701 2 8 6 7 1 4 , 3 8 5 6 3 4 0 , 3 5.1 5.4 5.7 5.8 , 5 9 8 7 9 7 7 7 , 1 7 2 , 5 8 9 , 6 6 , 6 3 6 7 0 3 7 8 , 1 2 7 , 9 6 4 , 4 8 1 0 6 , 0 4 4 , 8 9 2 8 , 8 2 0 , 8 10.3 10.0 7 9 4 , 5 1 3 , 8 9.5 2 9 4 , 8 1 9 , 5 8.8 87,307,636 8,315,497 4,621 2010 2011 2012 2013 2010 2011 2012 2013 2010 2011 2012 2013 2010 2011 2012 2013 * source : iHs global d emand July ̓13 CONSOLIDATED STATEMENTS OF INCOME (unit : kRW Million) SALES BY rEgION (unit : 1,000 vehicles) SALES BY pLANT (unit : 1,000 vehicles) For the Year sales Revenue* Operating income Margin (%) net income** Margin (%) Basic eps (kRW)*** 2010 2011 2012 2013 66,985,271 5,918,492 8.8% 77,797,895 8,028,829 10.3% 84,469,721 8,440,601 10.0% 87,307,636 8,315,497 9.5% 6,001,182 8,104,863 9,061,132 8,993,497 9.0% 20,516 10.4% 28,200 10.7% 31,532 10.3% 31,441 * Business results of BHMc is accounted in equity income accounting ** net income includes non-controlling interest *** Basic earnings per common share attributable to the owners of the p arent company CONSOLIDATED STATEMENTS OF FINANCIAL pOSITION (unit : kRW Million) at Year end assets liabilities shareholder̓s equity liab. to eqt. Ratio(%) 2010 2011 2012 2013 94,714,131 61,826,158 32,887,973 188.0% 109,479,975 121,537,814 133,421,479 69,152,273 40,327,702 171.5% 73,620,239 47,917,575 153.6% 76,838,690 56,582,789 135.8% CrEDIT rATINg *s&p/Moody’s BBB+/Baa1 BBB-/Baa3 BBB/Baa2 2008 2009 2010 2011 2012 2013 2008 2009 domestic Overseas kis nice korea Rating s&p Moody̓s aa aa aa BBB- Baa3 aa aa aa BBB- Baa3 2010 aa+ aa+ aa+ BBB Baa2 2011 aa+ aa+ aa+ BBB Baa2 2012 aaa aaa aaa BBB+ Baa1 2013 aaa aaa aaa BBB+ Baa1 total 4,621 total 4,732 korea north america europe asia Others 641 858 636 1,572 914 13.9% 18.6% 13.8% 34.0% 19.8% korea us china india czech Russia turkey Brazil china(cv) 1,820 38.5% 399 1,031 633 304 229 104 167 45 8.4% 21.8% 13.4% 6.4% 4.8% 2.2% 3.5% 1.0% SALES BY SEgMENT (unit : 1,000 vehicles) prODuCTION BY pLANT (unit : 1,000 vehicles) total 4,732 total 4,725 small pc Mid-large pc Rv cv 2,851 734 847 301 60.2% 15.5% 17.9% 6.4% korea us china india czech Russia turkey Brazil 1,851 39.2% 400 1,040 633 303 229 102 167 8.5% 22.0% 13.4% 6.4% 4.9% 2.2% 3.5% 10 HYUNDAI MOTOR COMPANY ANNuAL rEpOrT 2013 PROLOGUE MESSAgE FrOM THE CEO 11 Message FROM tHe ceO Hyundai MOtOR Will FOcus all eFFORts On develOping engines OF neW gROWtH tO BeneFit OuR custOMeRs and pave a BRigHt FutuRe. pROlOgue chairman and ceO Mong-koo Chung Hyundai Motor grew continuously in 2013 despite was a monumental milestone that demonstrated Hyundai performance, and boost investment in the development of companies to contribute to the country and its people. as fierce competition. In 2014, it will put new, future Motor’s commitment to develop environmentally friendly innovative technologies such as environmentally friendly the world is the company’s market, Hyundai Motor will also growth engines in place by enacting innovations vehicles and showcase its competitive technology to the green cars and smart cars equipped with cutting-edge turn its eyes to the underprivileged in other parts of the of its global management system, reorganizing world. this year, the all-new genesis, completely reborn technologies. Hyundai Motor will also make the utmost efforts world to fulfill its duty as a true global corporate citizen. its business framework, and developing innovative after seven years, will make its debut in the global luxury to secure necessary R&d human resources. From the design each and every year, Hyundai Motor will pour its time and technologies. car market, reaffirming Hyundai’s brand value once again. of vehicles to maximizing efficiency and recycling in the resources not only to enhance brand value, but also to become production cycle, the company will not skimp on long-term a brand worthy of the growing trust and love placed by three years ago, Hyundai Motor announced its new brand 2014 will be a meaningful year for Hyundai Motor in which investment and the promotion of environmental friendliness. customers and to provide more people with the opportunity slogan “new thinking. new possibilities” and set out on the company will reflect on its success and set the stage to Moreover, it will strengthen communication and cooperation to experience Hyundai’s Modern premium. a new direction with firm determination. after applying it drive new growth for the future. First, it will strengthen its not only among the different company divisions, but also faithfully across all sectors in 2013, the company is a step global network and management system to make the with partners and diverse stakeholders to achieve genuinely thank you for your continuous interest and support. closer to realizing its vision of becoming a “lifetime partner organization more efficient and dynamic in order to respond mutual growth. in automobiles and beyond.” For the first time, it made it to more quickly and flexibly to changes in the internal and the ranks of the top 50 global Brands, climbing 10 notches external business environment. second, it will further Finally, Hyundai Motor will step up to its responsibilities to no. 43 in interbrand’s Best global Brands 2013, and sold systematize its business framework and mid to long-term as a model corporate citizen and support the greater good 4.62 million vehicles worldwide, a 5.2 percent increase in growth strategies and focus on the development of more of the nation and its people. it will provide care for the sales from the previous year. in particular, the world’s first innovative products and advanced technologies. in par- underprivileged, especially during times of difficulty, and mass production of hydrogen fuel cell cars (ix35 Fuel cell) ticular, it will enhance vehicles’ fuel economy and safety champion efforts to promote mutual growth with partner 12 HYUNDAI MOTOR COMPANY ANNuAL rEpOrT 2013 PROLOGUE MESSAgE FrOM THE CEO 13 Message FROM tHe ceO pROlOgue president and ceO Choong Ho kim dear honorable shareholders, able to enjoy customers’ preference in advanced countries as First, we will solidify our leadership in the domestic market. Fourth, to strengthen our future growth potential, we will well as in emerging markets. cumulative sales surpassed abiding by the principle of “customers First,” we will satisfy further expand investment in research and development for thank you for attending the 46th annual shareholders 8 million units in the u.s. and 5 million units in china, and customers’ diverse needs by supplying customer-oriented eco-friendly cars, technology to enhance fuel efficiency, Meeting. Hyundai Motor hit the 1 million annual sales mark in record time products such as new models and expanding the availability electronic controls, and safety technology. We will continue undeterred by the lingering effects of the global financial in china, only 12 years after it ventured into the country. of diesel engines in passenger cars. in addition, we will to strengthen our technological competitiveness by nurtur- crisis, Hyundai Motor was able to overcome many difficulties Moreover, Hyundai Motor outshined europe’s most prestigious dramatically improve our service environment by establishing ing exceptional human talent. and challenges, selling 4.73 million vehicles and solidifying automotive brands, such as Mercedes Benz and BMW, by integrated centers where customers can receive multiple its position as the world’s sixth largest global automotive landing in second place in the 2013 Quality Report by autoBild, services in a single location. We will make sure that Hyundai company in 2013. as you may all know, the korean domestic the most prestigious car magazine in germany, home of the Motor emerges as a brand that is even more beloved by market has become a much contested arena for the world’s automobile. in addition, Hyundai Motor came in at number 43 in customers in korea. Moreover, as an official sponsor of the 2014 FiFa World cup Brazil, we will implant our brand in the minds of customers worldwide, and we will promote our technological prowess and upgrade Hyundai Motors’ brand image by participating top 22 automakers, including domestic brands. 2013 was a interbrand’s Best global Brands 100, joining the top 50 for the particularly tough year due to aggressive pricing by foreign first time and elevating Hyundai Motor’s stature worldwide. brands, driven by favorable foreign exchange rates and Fta Hyundai Motor knows that these feats were made possible policies, and was made worse by static industrial demand. by the support and encouragement that shareholders have nevertheless, Hyundai Motor strengthened its market lead- given to the company, and it hopes to reciprocate through ership even more with the launch of the all-new genesis, a a better performance this year. vehicle that rivals the finest cars in europe, the launch of grandeur Hybrid, with dramatically improved fuel economy, and the expansion of customer-oriented services, such as Blue Members. distinguished shareholders, the automotive market environment is expected to remain turbulent in 2014 with tapering of economic stimulus in the u.s., the continuation second, we will reinforce our localization strategy in the in the world famous World Rally championship (WRc). global market by launching differentiated vehicles for as a leader in the global automotive industry, Hyundai Motor advanced countries as well as for emerging markets. We will will continue to be in the forefront of new technologies and expand sales and maintain profitability in key markets such as trends. it will do its best to contribute to the development north america and korea with the all-new genesis and the of korea and the development of local communities in the seventh-generation sonata, our representative midsize sedan. countries where it operates. in addition, Hyundai Motor will increase sales further by i ask for your continued interest in Hyundai Motor in 2014, actively responding to the needs of local customers in europe, and i promise that the company will do its best to reciprocate where economic recovery is expected, with the all-new i10 by increasing shareholder value. of regional disputes, and economic instability in emerging and i20, and in china, through Mingtu, the strategic china-only in the wake of the global financial crisis, the global automotive markets. competition in the global automotive market is midsize sedan that was launched late last year. thank you. market continued to show a slow recovery last year. the u.s. expected to intensify as a result of aggressive promotional market showed strong buoyancy, recovering to almost activities by Japanese companies empowered by abenomics pre-crisis levels, but the european market declined for six and the recovery of competitiveness by u.s. auto makers. in consecutive years and industrial demand in india declined for spite of this, Hyundai Motor plans to pay back shareholders’ the first time in 15 years. in the meantime, emerging markets, support and build a strong foundation for sustainable with the exception of china, recorded negative growth. growth by selling 4.9 million vehicles in 2014 and growing third, we will actively support the growth in sales by expanding production capacity at our key global production sites. We will execute measures such as building the 150,000-unit china 3 factory, increasing capacity by 100,000 units at the turkey plant, building a new 150,000 vehicle commercial plant in china, and implementing the three-shift system in despite this difficult market environment, Hyundai Motor was 3.6% versus year ago by pursuing the following strategies: overseas factories. 14 HYUNDAI MOTOR COMPANY ANNuAL rEpOrT 2013 PROLOGUE HYuNDAI MOTOr grOup 15 Hyundai MOtOR gROup Will lead tHe Way tO a BetteR FutuRe. HYundai MOtOR gROuP pROlOgue Hyundai MOtOR gROup ManageMent cOncept Hyundai MOtOR gROup Main aFFiliate cOMpanies Hyundai Motor group has continued in its path of success by upholding and practicing the spirit and values handed down from the company’s founders. as such, the Management concept, which reflects the company’s autOMOBile future-oriented values and the direction of its evolution, serves to bring everyone together in the making of new history. By sharing its management philosophy, vision, and core values with everyone involved, Hyundai promises to deliver concrete results. HYundai, Realizing tHe dReaMs OF HuManitY FiVe cORe Values, tHe dna tHat will ensuRe HYundai the management philosophy is what guides all our management MOtOR’s cOntinued legendaRY success activities and the reason for Hyundai’s existence. Hyundai is Hyundai Motor recognizes the importance and impact that au- spreading its management philosophy of “realizing the dream tomobiles have on society and mankind. it strives to play a role steel of humanity by creating a new future through ingenuity and that extends beyond being a simple car manufacturer to become cOnstRuctiOn continuous challenge of new frontiers” in order to become a customers̓ lifetime companion. it will build connections with great company that is respected worldwide and that contributes customers by fulfilling its vision to become a “lifetime partner in to society. automobiles and beyond” and participate in working “together for a better future” as a constituent of Hyundai Motor group. new VisiOn FOR tHe FutuRe: “liFetiMe PaRtneR in autOMOBiles and BeYOnd” Hyundai Motor group established a new vision, “together for a better future,” in order to fulfill its role and responsibility as a trusted global firm. Hyundai Motor company defined its vision of being a “lifetime partner in automobiles and beyond” to come one step closer to its customers and become their beloved brand. a car is no longer simply a means of transportation that links people to people; it has become a life space that occupies a central role in people’s lives. as such, Hyundai Motor seeks to become a lifetime partner in the everyday lives of customers. at this very moment, it is developing eco-friendly and human-oriented technologies for the future and setting up optimized global management systems in order to provide the best experience to its customers. CuSTOMEr FIrST We promote a customer-driven corporate culture by providing the best quality and impeccable service with all of our efforts aimed at satisfying our customers. CHALLENgINg pErFOrMANCE We refuse to be complacent, embrace every opportunity for greater challenge, and are confident in achieving our goals with unwavering passion and ingenuity. COMMuNICATION AND COOpErATION We create synergy though a sense of “togetherness” that is fostered by mutual com- munication and cooperation within the company and with our business partners. rESpECT FOr TALENT We believe that the future of our organization lies in the hearts and capabilities of in- dividual members and will help them develop their potential by creating a corporate culture that respects talent. gLOBAL OrIENTATION We respect the diversity of cultures and customs, aspire to be the world’s best at what we do, and strive to become a respected global corporate citizen. PaRts Finance OtHeR 16 HYUNDAI MOTOR COMPANY ANNuAL rEpOrT 2013 PROLOGUE HISTOrY 17 HistORY pROlOgue passiOn and deteRMinatiOn Built tOday̓s Hyundai MOtOR. innOvatiOns and BiggeR tRansFORMatiOns Will cReate tOMORROW̓s Hyundai MOtOR. 1 2 3 4 5 DEBuT OF pONY, THE FIrST pASSENgEr CAr DEVELOpED IN kOrEA developed entirely in korea, pony was launched in 1976 and elevated the international standing of korea’s automotive industry. DEVELOpMENT OF HIgH pEr- FOrMANCE ENgINES autonomous development of the alpha (1991), epsilon (1997), and v6 delta (1998) engines demonstrated Hyundai Motor’s engineering prowess to the world. INAugurATION OF pLANTS IN TurkEY AND INDIA Hyundai Motor inaugurated a plant in turkey that strategically con- nected europe, africa, and the Middle east and a vertically integrated plant in india with capabilities ranging from R&d to sales. ESTABLISHMENT OF A gLOBAL NETWOrk Hyundai Motor has been expanding its global network by establishing the Hyundai design & engineering center in california (2002), the europe technical Research center (2003), and the u.s. technical center and manufacturing plant in alabama (2005). prESENTATION OF STATE-OF- THE-ArT CONCEpT CArS AT THE WOrLD̓S MOST prESTIgIOuS MOTOr SHOWS Hyundai Motor continuously unveils innovative concept cars such as i-Mode and the 3rd-geneneration fuel cell i-Blue at the world̓s best-known motor shows. 1967~1990 1991~1998 1999~2002 2003~2004 2005~2006 2007~2008 1967 1991 1999 2003 2005 2007 - incorporation of Hyundai Motor company - alpha engine, the first engine created in korea, - korea’s first automotive fuel cell battery - exports surpass 1 million units and usd 10 - click is selected as india’s Best car of 2005 - verna awarded Best car of the year by india̓s developed billion - inauguration of the u.s. proving ground, Overdrive magazine - launch of equus (Hyundai’s ultra-large sedan), - inauguration of the europe technical center technical center and alabama plant - unveiling of the Hed-iv (QarmaQ) concept car 1968 - Mass production of cortina begins 1976 developed - electric car developed - launch of galloper - launch of Hyundai pony, the first korean 1992 verna, and trajet Xg - debut of the santa Fe suv at the north american international auto show passenger car 1983 - unveiling of Hcd-i, korea’s first concept car 1993 2000 - incorporation of the canadian subsidiary HMc - launch of sonata ii - korea’s first passenger diesel engine and large 1984 - launch of excel 1985 - unveiling of the Hcd-ii concept car commercial engine developed 1994 - korea’s first fuel cell electric vehicle santa Fe - annual production surpasses 1 million units developed - incorporation of the u.s. subsidiary HMa - launch of accent 1986 - solar-powered and fuel cell electric vehicles - launch of grandeur, Hyundai Motor’s large-size developed - launch of santa Fe and avante Xd - Official sponsor of the ueFa euro 2000 luxury car - exports of excel to the u.s. begin 1987 - excel is the best selling imported compact car in the u.s. for 3 consecutive years 1988 - launch of sonata, Hyundai Motor’s midsize luxury sedan 1989 - Overseas exports of excel surpass 1 million units 1990 - launch of elantra and scoupe 1995 - launch of avante - unveiling of the Hcd-iii concept car 1996 - cumulative production surpasses 10 million units 2001 - launch of tuscani (Hyundai̓s sports coupe), terracan, and lavita - santa Fe ranked no. 1 in u.s. customer satisfaction survey - HMa receives J.d. power’s chairman̓s award - unveiling of korea’s first fuel cell electric - inauguration of the namyang technology vehicle santa Fe Research center - launch of dynasty and tiburon 1997 - unveiling of the Hcd-vi concept car at the chicago auto show - inauguration of the turkey plant 2002 - epsilon engine independently developed - launch of chinese-made elantra 1998 - acquisition of kia Motors - inauguration of the india plant - launch of grandeur Xg and eF sonata - 2nd solar-powered vehicle developed - sonata receives J.d. power̓s apeal award - inauguration of the california design & technical center - Official sponsor of the 2002 FiFa World cup korea/Japan - World-class, high performance v6 delta engine - unveiling of the Hcd-7 concept car at the independently developed chicago auto show - First in the automotive industry to proclaim - unveiling of new grandeur and Hed-1 at the at the geneva international Motor show global environmental Management geneva international Motor show - unveiling of the Hnd-iii (veloster) concept car - production of elantra (avante) and sonata - Official partner of FiFa from 2007 to 2014 at the seoul Motor show surpasses 2 million and 2.5 million units - exports to africa and the Middle east surpass 1 - azera (grandeur) ranks no. 1 in J.d. power’s respectively million units customer satisfaction survey for a 2nd - inauguration of the u.s. design center - chairman Mong-koo chung named top consecutive year - the world’s first ultra high pressure hydrogen automotive ceO in asia by automotive - cumulative sales in the u.s. surpass 5 million storage system for fuel cell electric vehicles - debut in interbrand̓s 100 Best global Brands units developed 2004 - inauguration of the eco-friendly vehicle - inauguration of the Brazilian ckd plant Recycling center - unveiling of the 3rd generation fuel cell concept car i-Blue at the international automobile ausstellung - Joint venture plant for commercial vehicles in 2006 china established - annual sales surpass kRW 1 trillion - launch of the next-generation compact car i10 - 2nd generation fuel cell electric vehicle tucson - no. 1 non-premium nameplate in J.d. power̓s by Hyundai Motor india (HMi) developed initial Quality study (iQs) - i30 selected as australia’s car of the year and - chairman Mong-koo chung named as the Best - total production reaches no. 6 in the world green car of the year ceO of 2004 by Business Week - cumulative exports to central and south - Official sponsor of ueFa euro 2004 america surpass 1 million units - World-class v6 diesel s-engine independently developed - unveiling of the Hellion, arnejs, genus, and talus concept cars - selected as interbrand̓s 100 Best global Brands for a 2nd consecutive year - Official sponsor of 2006 FiFa World cup germany 2008 - launch of genesis, genesis coupe, and i30cw - Hyundai Beijing hits 1 million vehicle production milestone in record time - unveiling of the eco-friendly concept car i-Mode at the geneva international Motor show - inauguration of the 2nd plant in Beijing - next-generation eco-friendly passenger diesel R-engine developed - tau engine named 10 Best engines Winners by Ward’s auto - Official sponsor of ueFa euro 2008 18 HYUNDAI MOTOR COMPANY ANNuAL rEpOrT 2013 PROLOGUE HISTOrY 19 HistORY pROlOgue 1 2 3 4 5 DEVELOpMENT OF THE TuCSON FuEL CELL ELECTrIC VEHICLE Hyundai Motor developed tucson fuel cell electric vehicle, a next generation, eco-friendly hydrogen fuel cell electric vehicle (Fcev) with world-class efficiency and performance and over 90% domestic parts. NEW BrAND SLOgAN FOr HYuNDAI MOTOr announcement of the new brand slogan, “new thinking. new possibilities.,” that embodies the company’s new direction and determination. INAugurATION OF THE BrAzIL pLANT getting ready to produce 3 models simultaneously in record time and winning the car of the year award in Brazil with HB20, a strategic regional compact car, Hyundai Motor’s new Brazil factory has already achieved LAuNCH OF THE ALL-NEW gENESIS Five years after debuting under great enthusiasm and setting new standards for premium cars across the globe, genesis is expected to join the ranks of the world̓s finest cars once again with a completely new look. pArTICIpATION IN THE FIA WOrLD rALLY CHAMpIONSHIp (WrC) the world’s leading car makers showcase their high- performance technology racing their cars at WRc. the i20 rally car surpassed all expectations from its very first race. 2009 2010 2011 2012 2013 2014 - Main sponsor of the u.s. super Bowl - unveiling of the Hed-vii hybrid concept car at - Blue link introduced at the 2011 international - launch of new santa Fe, i40 saloon, and - World Rally championship (WRc) team launched - all-new genesis wins a 2014 iF design award - unveiling of i20 3-door and the ix-onic concept the geneva international Motor show consumer electronics show (ces) in the u.s. veloster turbo - launch of grandeur Hybrid - Official sponsor of the 2014 FiFa World cup car at the geneva international Motor show - no.1 in J.d. power’s vehicle dependability study - launch of veloster and the Hcd-12 concept car - inauguration of the Brazil plant - no. 2 in autobild̓s (germany) 2013 Quality Brazil - genesis named north american car of the year (vds) for 3 consecutive years and in the initial at the north american international auto show - unveiling of cuv HB20X satisfaction Report - unveiling of Hed-9 intrado at the geneva - Best automotive company in china’s warranty Quality study (iQs) for sub-compact cars. - unveiling of the new brand direction and slogan - santa Fe ranked best in class at 56.8% in alg̓s - i10 awarded indian car of the year 2014 international Motor show service satisfaction survey - launch of sonata Hybrid at the new york “new thinking. new possibilities.” at the north Residual value award in the u.s. - Beijing Hyundai sales in china surpass 1 million - participation of i20 in the WRc, achieving 3rd - cumulative exports to africa surpass 1 million international auto show american international auto show - tucson fuel cell electric vehicles supplied to units/year place in the Mexico Rally units - genesis and tucson named no.1 in autopacific’s - launch of the 5th generation azera (grandeur) denmark and norway - launch of all-new genesis - all-new genesis and i10 win a Red dot design - Hyundai ranks no. 1 of J.d. power̓s initial vehicle satisfaction awards - First official car partner of the international - sonata Hybrid tops autopacific̓s vehicle - two Hyundai models ranked highest in the award Quality study (iQs) - sonata awarded the highest safety ratings by cricket council (icc) from 2011 to 2015 satisfaction award in the u.s. Residual value awards in the u.s. - launch of the all-new sonata - elantra (avante) named no. 1 compact car in the national Highway traffic safety agency in - launch of i40 wagon - chairman Mong-koo chung named 2011 top - Ranked Most valuable car Brand in the u.s. J.d. power’s vehicle launch index the u.s. - ix20 awarded euro ncap̓s highest five-star rating Manager in the World by italy̓s inter auto news - launch of new i20 at the international - genesis ranked no. 1 in J.d. power’s vehicle - cumulative sales of sonata surpass 5 million - unveiling of the d-segment i40 sedan at the - unveiling of the i-oniq electric concept car at automobile ausstellung launch index units Barcelona international Motor show the geneva international Motor show - ix35 (tucson) fuel cell electric vehicles supplied - unveiling of ix-Metro and ix35 at the - Official sponsor of the 2010 FiFa World cup - launch of genesis prada - named the most fuel efficient and least cO₂ to the city of copenhagen international automobile ausstellung south africa - cumulative sales in europe surpass 5 million units emitting brand by the u.s. environmental - Hyundai’s centennial named Best luxury Full- - no. 69 in global Brand value as published by - chairman Mong-koo chung selected as the top - no. 11 in interbrand’s 50 Best global green Brands protection agency sized car for 2 years in a row Business Week automotive industry ceO in asia - launch of eOn by the indian subsidiary HMi - sonata named top picks in the medium-size - genesis ranked no. 1 in vehicle satisfaction - inauguration of the czech plant with annual - launch of the eco-friendly electric car BlueOn - i40 awarded the eurocarBody golden award car segment by consumer Reports awards (auto pacific) - aspirational luxury car production capacity of 300,000 units - inauguration of the Russia plant - cumulative exports to central and south - azera (grandeur) awarded the alg Residual in the u.s. - unveiling of the independently developed, next - launch of ix20 small minivan at the paris Motor america surpass 2 million units value award in the full-size segment - launch of MistRa at the 2013 shanghai generation high performance theta gdi engine show - unveiling of genesis coupe - solaris (accent) awarded Best auto and car of international automobile industry exhibition - tau engine named 10 Best engines Winners by - unveiling of the independently-developed - top position in autobild’s Quality Report for the the year in Russia - sonata ranked Most dependable Midsize car in Ward’s auto for a 2nd consecutive year and nu·tau gdi engines and RWd 8-speed automatic 2nd consecutive year - genesis tops J.d. power’s vehicle dependability the u.s. winner of the presidential prize at the 2009 transmission - gamma engine named 10 Best engines Winners study (vds) in the premium car segment in the - World’s 1st mass production of ix35 (tucson) korean technology awards - Official car sponsor of the g20 summit by Ward̓s auto u.s. fuel cell electric vehicles - tau engine named 10 Best engines Winners by Ward’s auto for a 3rd consecutive year - annual sales in the u.s. surpass 500,000 units - tucson fuel cell electric vehicle developed - elantra (avante) awarded north american car - santa Fe selected as the 2013 canadian utility of the year vehicle of the year - no.1 in J.d. power’s customer Retention study - unveiling of Hcd-14, premium sports sedan - Official sponsor of ueFa euro 2012 concept car at the north american international auto show - unveiling of Hnd-6, next generation smart car concept car at the ces - named no. 1 brand and no. 1 car in 4 vehicle categories (equus, genesis coupe, etc.) in strategic vision̓s total value awards ly veHicle y tO acHieve y Justice d n Rie F - O c e g O l O n H c e t g R e n e d e M O n s t R a t e F u t u R e c O n c e p t c a R s t H a t c O M p e t i t i v e n e s s e v O F - t e R H - e e - v a O R l v i n t t e c g , s H t n a O t l O e - g y c a R M O R u i e n i n Q t u e d e , B F R u a t n u d R e v - a l u e s e n i g n e - d l R O W , i i g n n n W - d R a W a e c n a M R O F R e p - H g H s s a l c i y, s R alit a g c u Best-sellin sOlid Q a c R O s O d e l s t H s BelOved e W ORld Blue waVes in HYundai What is Blue Waves? Wanting to create a novel, extraordinary automotive experience... dreaming to become the world’s most beloved brand... passionately developing a car with zero cO2 emissions... Finding ways to harmonize a car̓s life cycle with nature... Blue Waves is the huge, overflowing energy that drives Hyundai Motors. its potential is priceless and has no end. 22 HYUNDAI MOTOR COMPANY ANNuAL rEpOrT 2013 BLUE WAVEs IN HYUNDAI BEST VALuE 23 Best Value Blue Waves in Hyundai sMaRt cRuise cOntROl sensor fusion calculates distance from the car in front and maintains safe distance without having to step on the brakes. Head-up display driving information projected on the windshield allows the driver to grasp information while keeping eyes on the road. aROund vieW MOnitORing systeM (avM) 360 degree camera view enables the driver to see the front, rear, side, and blind spots around the vehicle. eacH and eveRy satisFied custOMeR cOntRiButes tO Building tHe Hyundai MOtOR BRand and tO Raise anticipatiOn FOR WHat lies in tHe FutuRe. HYundai MOtOR’s unique qualitY and Value Hyundai Motor’s brand image has evolved from “dependable overall position and reasserted its brand value. in 2014, Hyundai quality” to “the most satisfying brand.” Brand value grew 20.5% Motor will once again compete with the world̓s finest cars with in 2013 to usd9 billion versus 2012, surging 10 notches to no. 43 the launch of the all-new genesis. the all-new genesis features in interbrand Best global Brands 100 and joining the top 50 for the company̓s latest state-of-the-art technology to provide the first time. Four models, including equus and genesis coupe, design, driving experience, safety performance, and comfort set a record in strategic vision̓s total value awards̓ 18 year-old features that are a level above, promising to be yet another history by coming in at first place for their respective categories. driving force that will increase Hyundai Motor̓s brand value. this gave Hyundai Motor the distinction of occupying the top lane keeping assist systeM security system activates warning light, alarm, and pre-safe seatbelt to alert driver of a lane departure. pOWeR tRunk trunk lid opens automatically by standing near the trunk with the smart key for 3 seconds. Blind spOt detectiOn (Bsd) automatically detects and alerts the driver about cars in blind spots and cars that approach the back or side of the vehicle. 24 HYUNDAI MOTOR COMPANY ANNuAL rEpOrT 2013 BLUE WAVEs IN HYUNDAI HIgH pErFOrMANCE 25 HigH PeRFORMance Blue Waves in Hyundai WitH WORld-class engine tecHnOlOgy tHat pROvides a neW level OF dRiving eXpeRience, Hyundai MOtOR Will invent yet anOtHeR “dReaM engine.” 40 bpm / min average heart rate of the record holder for most goals scored at FiFa World cup 140 ps / 6,300 rpm Max. output of the 1.6 gamma gdi engine 17.1 kgㆍm / 4,850 rpm Max. torque of the 1.6 gamma gdi engine tau and gaMMa naMed 10 Best engines winneRs BY aMeRica’s waRd’s autO Hyundai Motor’s engine technology is one of the best in the world. its v8 tau gasoline engine used primarily in large-size cars, won the distinction of “10 Best engines,” the Oscar of automobile engines, from Ward’s auto for 3 consecutive years from 2009 to 2011, and the 1.6 gamma gdi engine, used in small-size cars, won the same distinction once again in 2012. Hyundai Motor’s comprehensive portfolio of small to large world- class engines is testimony of its engine development technology. Hyundai Motor will continue to passionately pursue the development of an ultimate “dream engine” that will take the world by surprise. •tau engine 3,000~4,000 cc average lung capacity of FiFa World cup players who play full-time matches 26 HYUNDAI MOTOR COMPANY ANNuAL rEpOrT 2013 BLUE WAVEs IN HYUNDAI THE NAME FOr SATISFACTION 27 tHe naMe FOR satisFactiOn Hyundai MOtOR̓s diveRse caR MOdels dO nOt cease tO iMpRess and Win tHe HeaRts OF satisFied custOMeRs Blue Waves in Hyundai THE SIgNIFICANCE OF WINNINg CONSuMEr SATISFACTION AWArDS every year, new models flood the global automotive market and customers assess vehicles with ever more stringent criteria. their opinion is not only reflected in the number of vehicles sold, but also through the numerous honors and awards that are given. 2013 was a very prolific year for Hyundai Motor, as the company won many awards in diverse categories in many countries across the world. the company promises to reciprocate customers̓ affection by producing even better cars. ELANTrA (AVANTE), A BEST-SELLINg CAr rACINg TO BECOME A MILLION-SELLEr launched in 1990 and now in its fifth generation, elantra (avante) is a perennial favorite among customers all over the world. voted top picks 2013 (Best Budget car) in the u.s. by consumer Reports and no. 1 small car in strategic vision’s 2013 total value awards, elantra (avante) has demonstrated its success as a best-seller with other awards such as 2012 north american car of the year and canadian car of the year. SONATA, CONSISTENTLY DELIVErINg HIgH quALITY SATISFACTION sonata was the no. 1 midsize car in strategic vision’s 2013 total value awards that measures the overall value of a vehicle based on customer satisfaction among new car buyers. it was also the no. 1 midsize car in J.d. power’s 2013 vehicle dependability study (vds). the new sonata is expected to continue the legacy that spans six generations. gENESIS, rEDEFININg THE STANDArD OF prEMIuM SEDANS since its north american car of the year title in 2009, genesis has garnered one recognition after another including the top spot in strategic vision’s 2013 total Quality index (tQi) in the near-luxury car segment, autopacific̓s vehicle satisfaction awards, and J.d. power̓s initial Quality study (iQs). the new genesis won a german iF design award and a Red dot design award as soon as it was launched in 2014, raising expectations worldwide once again. CENTENNIAL (EquuS), HYuNDAI MOTOr’S FLAgSHIp SEDAN With state-of-the-art convenience features, a high performance engine, and premium design, centennial (equus) not only received the distinction of saloon of the year for 2013 in the Middle east, but also strategic vision’s total value awards, top safety pick by america’s insurance institute for Highway safety (iiHs), and autopacific̓s 2013 ideal vehicle award. 28 HYUNDAI MOTOR COMPANY ANNuAL rEpOrT 2013 BLUE WAVEs IN HYUNDAI THE NAME FOr SATISFACTION 29 tHe naMe FOR satisFactiOn Because Hyundai MOtOR Wants tO satisFy tHe WisHes OF eveRy custOMeR, it OFFeRs lOcaliZed MOdels tailORed tO lOcal liFestyles and needs Blue Waves in Hyundai CArS DEVELOpED TO MEET LOCAL CuSTOMErS̓ NEEDS Hyundai Motor takes into consideration the lifestyle, climate, terrain, and driving habits of local customers and determines what kind of car to develop based on customers̓ point-of-view. it carefully matches design, performance, and convenience features with customers̓ needs, which has led to many awards, such as car of the year, in many geographies. From development to pro- duction, sales, and after service, Hyundai Motor pursues localization to maximize customer satisfaction. AzErA (grANDEur), kOrEA̓S prEMIuM SEDAN THAT CApTIVATED THE WOrLD With a premium design that won a good design award in the u.s. in 2012, azera (grandeur) has proven its steadfast quality and safety by winning the no. 2 position in J.d. power̓s 2013 initial Quality study (iQs) and being named ix20 AND i20, MADE TO MATCH EurOpEAN LIFESTYLES the versatile and compact Mvp ix20 not only ranked at the top in the 2013 value-for-Money car survey by the u.k. consumer group, Which, top safety pick by america̓s insurance institute for Highway safety (iiHs). but also received five-star euro ncap ratings in crash tests. With high scores in J.d. power asia pacific’s 2012 india vehicle dependability study (vds) in the premium compact segment, i20 will be born again soon to capture the hearts of european customers one more time. SANTA FE AND TuCSON (ix35) rEAFFIrM THE pOpuLArITY OF HYuNDAI MOTOr’S SuVS named suv of the year in the u.s., u.k., and canada in 2013, santa Fe’s popularity continues with such distinctions as automotive lease guide̓s 2014 Residual value award in the u.s. tucson (ix35), loved for quality and affordability, ranked no. 2 in strategic vision’s total value index for compact suvs in 2012, and reconfirmed its reliability in 2013 with high marks in the customer satisfaction survey by u.k.’s leading consumer organization, Which. i30 AND i40, CAr OF THE YEAr ACrOSS EurOpE named car of the year in england, chile, scotland, and australia in 2012 and in turkey and australia in 2013, i30 is a popular european model that also earned euro ncap̓s safety rating and five-star ancap safety ratings in australia. i40 also enjoys increasing popularity in europe as shown by its title of 2013 Russian car of the year category Winner. ACCENT AND VELOSTEr SHOW CuSTOMErS ALWAYS COME FIrST accent was awarded the 2014 Residual value award by the automotive lease guide (alg) in the u.s., and also highly praised in J.d. power’s 2013 initial Quality survey (iQs). known as solaris in Russia, it won the annual national award car of the year in 2013. veloster, which embodies Hyundai Motor’s creative imagination, also continued to demonstrate its unique value with such recognitions as autopacific̓s vehicle satisfaction award for sporty cars. i10, NEW AND STILL pOpuLAr With an upgrade in style, interior space, and economy, the new i10 has been basking in popularity with local customers since its launch. it was named Best city car by u.k.’s car magazine, What car?, and car of the year: Best city car by carBuyer. the same goes for india, where it was named 2014 automobile of the year by car india and compact car of the year at the nd tv awards. 30 HYUNDAI MOTOR COMPANY ANNuAL rEpOrT 2013 BLUE WAVEs IN HYUNDAI NEW DIMENSION OF DrIVINg 31 new diMensiOn OF dRiVing Hyundai MOtOR̓s autOMOtive tecHnOlOgy cOntinues tO evOlve, aiMing tO cReate MOving eXpeRiences and tO Build tRust. Support effective redirection of the body upon sudden changes of direction Blue Waves in Hyundai AEB protects drivers from crashes by automatically halting the car in case of emergencies HTrAC electronic system that automatically distributes braking power and traction between the 4 wheels according road conditions. state-OF-tHe-aRt tecHnOlOgY FOR staBilitY and tHe ultiMate dRiVing eXPeRience. Hyundai Motor works endlessly to deliver unique driving performance and stability. HtRac is Hyundai Motor̓s state-of-the-art driving technology developed to provide the ultimate driving experience. it is a preview of exciting technology that is coming ahead. HtRac distributes braking power between the left and right wheels of the vehicle according to speed and road conditions. it automatically allocates power between the front and back wheels while cornering or driving on slippery, wet roads to ensure safe driving. in addition, Hyundai Motor has other cutting-edge technologies to deliver the ultimate driving experience, such as advanced traction cornering control (atcc), which provides agility and stability when turning, and autonomous emergency Braking system (aeB), which protects the driver by automatically halting the car to avoid crashes in emergency situations. Hyundai Motor will stay in the forefront of bringing new ideas into reality and make its dreams come true. ATCC improves agility when making turns at high speeds Agility instantaneous change of direction and quick shooting Drive mode Control system driving system with a choice of 4 driving modes Stability Outstanding defense and stable turning Braking Momentaneous bearing of heavy weight on one leg to provide great power and precision in a free kick 32 HYUNDAI MOTOR COMPANY ANNuAL rEpOrT 2013 BLUE WAVEs IN HYUNDAI THE FuTurE & FuTurE CArS 33 tHe FutuRe & FutuRe caRs Hyundai MOtOR̓s cOncept caRs Open a WORld OF iMaginatiOn aBOut tHe caRs OF tHe FutuRe. Blue Waves in Hyundai Hed-9 intRadO Meet tOMORROw’s caRs tOdaY Hyundai Motor̓s concept cars have a unique code name that ties each car to its origin: Hed for the europe design center, Hcd for the north american design center, and Hnd for the namyang design center. vehicles are developed with distinctive concepts that capture unique characteristics and needs of each region while integrating Hyundai̓s unique design philosophy and forward-looking technology to ensure that every vehicle carries the same dna. even at this moment, a wide range of concept cars on display at leading motor shows across the world are demonstrating Hyundai Motor̓s future competitiveness. HCD-9: Talus (U.s.) HCD-10: Hellion (U.s.) HED-2: GENUs (Europe) HND-3: Veloster (Namyang) i-Blue (Japan) HED-4: QarmarQ (Europe) HED-5: i-Mode (Europe) HED-6: ix-onic (Europe) HND-5: ix-Metro (Namyang) HND-4: Blue-Will (Namyang) HCD-11: Nuvis (U.s.) HED-7: i-flow (Europe) HCD-12: Curb (U.s.) HND-6: Blue2 (Namyang) HND-7: Hexa space (Namyang) HED-8: i-oniq (Europe) HND-9: Venace (Namyang) HCD-14: Genesis (U.s.) HED-9: Intrado (Europe) 2006 2007 2008 2009 2010 2011 2012 2013 2014 34 HYUNDAI MOTOR COMPANY ANNuAL rEpOrT 2013 BLUE WAVEs IN HYUNDAI CLEAN MOBILITY 35 Because it is our duty to pass-on a clean environment cReating sHaRed value tHROugH tHe clean MOBilitY WitH Blue dRive, Hyundai MOtOR is gOing BeyOnd Reducing cO2 tO acHieve ZeRO eMissiOns. to our next generation, global automotive companies need to develop eco-friendly cars and reduce carbon emissions. Hyundai Motor will stay in the forefront of environmental issues and spearhead efforts to realize zero emissions. RealiZatiOn OF eneRgy Justice receive subsidies and tax benefits Benefits to HMC Achieve better product quality Capture a new market + reduce CO 2 emissions Secure engines for future growth with development of new tech- nologies reduce energy consumption Benefits to society reduce air pollution Blue Waves in Hyundai Blue drive is Hyundai Motor’s low-carbon, green technology tecHnOlOgY tO PROduce ecO-FRiendlY caRs Hyundai strategy to reduce automotive cO2 emissions. the vision is to Motor is steadily developing technologies to achieve zero improve vehicles’ fuel efficiency short term, while developing emissions and improve eco-friendliness of its cars. it is using eco-friendly cars, such as biofuel, hybrid, electric, and hydrogen direct injection systems that improve efficiency and reduce fuel cell vehicles, with the ultimate goal of developing zero cO2 emissions in gasoline engines, high-efficiency transmissions emission vehicles . that deliver excellent fuel economy, and advanced high strength steels that reduce the weight of vehicles. HYBRid VeHicles (HeV): tHe Best OF a gasOline engine and an electRic MOtOR since unveiling its first hybrid concept car in 1995, Hyundai Motor has won numerous awards, including sonata Hybrid̓s autopacific customer satisfaction award in 2012, for its hybrid models. azera Hybrid (grandeur Hybrid) was launched in 2013 with a class 1 fuel economy rating, and in 2015, Hyundai Motor plans to launch a plug-in hybrid car that can be charged using external power supply. electRic VeHicles (eV), adVanced POllutiOn-FRee caRs Hyundai Motor unveiled its first high-speed electric car, BlueOn, in 2010. BlueOn can achieve a driving distance of 140 km per charge, top speed of 130 km/h, and zero-to-100 km/h acceleration in 15.7 seconds. Hyundai Motor is working relentlessly to develop a compact car with a driving distance of over 200 km per charge, zero-to-100 km/h acceleration in 11.5 seconds and battery-charging time of 5 hours (23 minutes for a quick charge) by 2016. tHe WORld̓s FiRst successFul Mass pROductiOn OF a HydROgen Fuel cell veHicle HYdROgen Fuel cell VeHicles, testiMOnY OF HYundai PRePaRing FOR tHe FutuRe OF HYdROgen Fuel cell MOtOR̓s ecO-FRiendlY tecHnOlOgY VeHicles starting with the development of fuel cells in 1998, Hyundai the environmental-friendliness of Fcevs is proven, but the Motor successfully developed a proprietary world-class stack challenge of expanding and establishing a market remains. and a hydrogen fuel cell engine that performed comparably to currently, there are only 13 hydrogen filling stations in korea, internal combustion engines. after creating modules for critical but because it takes less than 3 minutes to charge a vehicle, components and developing low-cost materials, Hyundai Motor the impact of Fcevs could be tremendous if the technology succeeded in the world̓s first mass production of hydrogen fuel catches on and infrastructure is expanded. the u.s. and european cell vehicles in 2013 with ix35 Fuel cell. this vehicle was promoted countries are already preparing diverse policies to promote the in europe starting in 2012 and was chosen to participate in a eu- expansion of Fcevs, and consumer groups representing the ropean union pilot project in March 2013. it will be sold in the hydrogen industry are being formed. in korea, the first private u.s. and korea starting in 2014 to introduce customers to the sector hydrogen industry association was established in January world of hydrogen fuel cell vehicles and bring Hyundai Motor̓s 2014. Hyundai Motor will actively support these efforts and eco-friendly technology to the limelight. promote the values of this vehicle-of-the-future. POllutiOn-FRee HYdROgen Fuel cell VeHicles (FceV) Fcev motors are powered with electricity that is generated when hydrogen reacts with airborne oxygen. Fcevs are the ultimate eco-friendly cars as their by-product is 100% water. ix35 Fuel cell, the world̓s first mass-produced Fcev, has a top speed of 160 km/h and driving distance of up to 594 km with a single charge that takes less than 3 minutes. With the start of full-fledged sales in 2014 in the u.s., the world̓s largest auto market, Hyundai Motor is expected to solidify its position as a next generation, eco-friendly car brand. 36 HYUNDAI MOTOR COMPANY ANNuAL rEpOrT 2013 BLUE WAVEs IN HYUNDAI CO2 zErO 37 cO2 zeRO Blue Waves in Hyundai Hyundai MOtOR MOnitORs gReenHOuse gas eMissiOns at all OF its WORkplaces in kORea tO cReate a lOW-caRBOn cultuRe. Hyundai Motors strives to minimize greenhouse gas emissions from the operation and production of cars. By carefully planning design, disposal and recycling, it aims to create a vehicle lifecycle that is more eco-friendly. gReenHOuse gas ReductiOn in FactORies GREENHOUSE GAS EMISSIONS/UNIT IN 2013 tecHnOlOgY tO cOllect and Reuse gReenHOuse gases MeasuRes tO cOPe witH tHe tRade OF natiOnal and Hyundai Motor is actively responding to global climate change by strictly managing greenhouse gas emissions at all of its 2013 domestic worksites. in particular, it is pursuing more effective measures in factories, which account for more than 85% of emissions. in spite of an 8.4% increase in vehicle production 2012 0.51 tons/unit 6.4% 0.54 tons/unit in 2013 versus a year ago, Hyundai Motor was able to reduce greenhouse gas emissions per vehicle produced to 0.512 tons/ unit, or 6.4% versus year ago. PRinciPal FactORies and ReseaRcH centeRs the Jeonju plant is leading diverse efforts to reduce greenhouse gas emis- sions through its energy tFt, while the ulsan plant reduced emissions per unit-produced by 3% and for plant operations by 5.4% versus year ago by changing energy sources, investing in high efficiency equipment, and improving production processes. employees at the namyang technology Research center voluntarily reduced peak-time energy consumption by 11,307 kW and invested kRW7.1 billion on innovative, high efficiency technology to reduce emissions by 5,210 tons. the center plans to reduce emissions further by 28,000 tons by 2020. tHe wORld̓s secOnd-laRgest sOlaR POweR sYsteM at tHe asan FactORY the asan plant, which produced 277,550 vehicles in 2013, invested in diverse high efficiency equipment to reduce greenhouse gas emissions by 1.9% per unit-produced and 7.7% for plant operations verzsus year ago. it plans to reduce cO2 further by 2,340 tons in 2014. the factory installed a large- scale, solar power plant over a 213,000 m2 area of its roof to minimize damage to nature and generate 11.5 million kW of power per year, enough for 3,800 households and the equiva- GREENHOUSE GAS EMISSIONS/UNIT AT THE ULSAN PLANT IN 2013 2013 2012 0.651 tons/unit 3.0% 0.671 tons/unit GREENHOUSE GAS EMISSIONS/UNIT AT THE ASAN PLANT IN 2013 2013 2012 0.496 tons/unit 1.9% 0.506 tons/unit THE SOLAR POWER PLANT AT THE ASAN PLANT The world(cid:18743)s second largest in scale CO2 reduction 5,600 tons/year Pine trees 1,120,000 trees lent to planting 1.12 million pine trees, reducing cO2 emissions CO2 by 5,600 tons per year. tO Reduce 40,000 tOns OF eMissiOns inteRnatiOnal eMissiOns RigHts Hyundai Motor began construction of a plant at the namyang With the implementation of national emissions trading schemes technology Research center to help validate and demonstrate in europe and the u.s., Hyundai Motor is actively addressing technology to collect and recycle greenhouse gases. the plant is emissions trading issues at its overseas operations. the czech expected to process 18 tons of cO2 per year, and the respective plant (HMMc) is participating in the eu emissions trading scheme technology is currently undergoing validation, which is expected since 2013, and the china operation (BHMc) began a pilot program to be completed by June 2014. this technology, which can reduce in 2013 that is expected to be rolled out in 2014. emissions greenhouse gas emissions by about 40,000 tons a year, is not trading is expected to come into effect in korea in 2015, and only expected to be used to reduce emissions from the company Hyundai Motor will implement a dependable system at every site. and subsidiaries, but also to facilitate the application of bioma- terial raw material conversion technology to automotive parts Facilitating design, scRaPPing, and RecYcling FOR as well as the creation of other value-added benefits. tHe Full RecYcling OF ResOuRces the solar power plant at the asan plant Hyundai Motor verifies the recyclability of new vehicles starting from design stages using 3d drawings. it builds and dismantles test vehicles to assess the ease of disassembly and identifies means to improve parts design, such as developing fastening elements that can expedite the dismantling of a vehicle. it also develops technologies to facilitate vehicle scrapping, such as reducing time to disassemble an airbag and developing devices to discharge lithium-ion batteries. in addition, it is pursuing a pilot project for the modernization of scrap car recycling, organized by the Ministry of environment, and devised means to maximize recycling of scrap cars and reducing greenhouse gas emissions by collecting coolants. in addition, it eased the recycling of 132,000 vehicles and created a network of more than 100 junk car recycling operations, laying the foundation to fulfill a legal requirement of 95% recycling by 2015. Hyundai Motor continues to operate recycling centers for the eco- friendly disposal of scrap cars and to develop recycling technology that will result in a circular system for vehicle production, disposal and recycling. 38 HYUNDAI MOTOR COMPANY ANNuAL rEpOrT 2013 39 BRand innOvatiOn tHROugH Quality seRvice tHat MOves custOMeRs OngOing ReseaRcH and develOpMent eigHt pROductiOn sites sales netWORk OF 6,000 sHOWROOMs WORldWide cOnnecting WitH custOMeRs sOcial cOntRiButiOn activities tHat ORiginate FROM tHe HeaRt Blue waVes in tHe wORld What are the Blue Waves that ripple around the world? capturing customers’ needs more accurately through regional car models... leveraging a rich, global network to directly convey Modern premium... Building meaningful connections through sports... Reaching out to marginalized people and fulfilling social responsibility... Blue Waves are permeating to convey Hyundai Motor’s wholeheartedness to build a competitive global automotive company. 40 HYUNDAI MOTOR COMPANY ANNuAL rEpOrT 2013 BLUE WAVEs IN THE WORLD quALITY MANAgEMENT & SErVICE MANAgEMENT 41 qualitY Manage- Ment genuine autOMOtive cOMpanies and Best Buy BRands aRe cReated By supeRB, custOMeR-ORiented Quality. superb quality, the reason-for-being of today̓s Hyundai Motor, is the basis of customer satisfaction and the driving force behind the brand̓s sustainable growth. Hyundai Motor implemented customer-centric, quality-focused management since it was founded. We will continue to do so at all customer contact points to establish itself as customers̓ most desired brand. seRVice Manage- Ment We tailOR OuR seRvices tO custOMeRs’ needs tO ensuRe tHat eveRy MOMent WitH Hyundai MOtOR is special. Hyundai Motor’s attentive and innovative services are founded on the belief that “great service originates from the heart, not from technology.” the company analyzes customers’ needs and expectations and develops systems and technologies that ensure that every experience with Hyundai Motor will be refreshing and special. custOMeR-centRic sMaRt seRVices custOMeR satisFactiOn tHROugH diFFeR- as part of ongoing efforts to furnish customer- entiated Value friendly services and to increase the credibility Hyundai Motor provides world-class services and efficiency of maintenance, Hyundai Motor through its global service network to customers began to automate its service centers across across the world. it is making extensive efforts the world in 2014. From the time of arrival until such as launching the automotive industry̓s first departure, every procedure is managed “Before service” (free vehicle inspections before electronically to facilitate communication and breakdowns) to more than four million people offer customer-oriented services. separately, to worldwide, and expanding “Home-to-Home service” improve fundamental vehicle maintenance services to facilitate maintenance by offering customers that are provided, the company developed convenient vehicle pick-up and delivery services. and deployed the world̓s first next generation Hyundai Motor has maintained the highest level of diagnostic equipment on a mobile platform with customer satisfaction among domestic and inter- enhanced speed and diagnostic capabilities national companies every year. it pays attention to detect faults. it reinforced management of to services that enhance customer satisfaction, its global service support center (gssc) and such as standardizing the Hyundai customer care implemented high-tech, remote diagnostic center̓s (Hccc) innovative processes to respond technology to resolve difficult repair problems in quickly to customers̓ requests and providing free real-time so that it can guarantee complete vehicle car washes to customers that visit showrooms and maintenance services to customers worldwide. service centers. OngOing eFFORts tO Manage qualitY BRand innOVatiOn dRiVen BY qualitY Hyundai Motors made a full-fledged roll-out of putting into practice the chairman̓s belief that quality management in 1999. to reinforce its com- no compromises must be made when it comes to mitment, it established the Hyundai-kia Quality quality, Hyundai Motor is reinforcing transparency department that reports directly to the chairman and ethics in quality management. it embraces in september 2002, to improve global customer customer-centric thinking and conducts practical satisfaction, it integrated the maintenance and onsite quality-control activities to be a step closer quality control operations and established a quality to offering the quality standards that customers control organization overseas. a 24-hour, 365- demand. Moreover, through ongoing communi- days-a-year “global Quality situation Room” was cation with customers at all contact points, the established in 2004 to enable the company to company is conducting market-driven quality respond in real time to diverse quality problems management that encourages customers to feel that may arise anywhere in the world. Moreover, top pride about the brand. Hyundai will continue to managers from every department gather to discuss prioritize quality in management to become a Best quality-related issues in a Quality Meeting held Buy Brand that customers desire. twice a month. the company believes that supplying zero-fault vehicles is a basic responsibility and fundamental requirement to build customer sat- isfaction. this is why it makes ongoing efforts to conduct quality-driven management. 1 3 2 4 1. service center automation 2. global service support center (gssc) 3. Hyundai customer care center (Hccc) 4. “Before service” campaign 42 HYUNDAI MOTOR COMPANY ANNuAL rEpOrT 2013 BLUE WAVEs IN THE WORLD r&D NETWOrk 43 R&d netwORK tecHnical ReseaRcH and design centeRs aRMed WitH FiRst class talent and cutting-edge Facilities aRe de- velOping tecHnOlOgies tailORed tO Meet lOcal MaRkets̓ needs and Build tHe cOMpany̓s FutuRe cOMpetitiveness. the ability to accurately identify local trends and customer needs and to incorporate them rapidly into products is a competitive advantage that a global company must cultivate. Hyundai Motor’s technical research and design centers operate in vital locations worldwide to stay in the forefront of automotive trends and strategically develop regional vehicles that can expand the company̓s global customer base. Hyundai Motor does not spare resources when it comes to developing new technologies that will lead to better automotive experiences in the future. tecHnical ReseaRcH centeRs, OuR Base caMP FOR glOBal leadeRsHiP naMYang tecHnOlOgY ReseaRcH centeR, KORea the namyang technology Research center in Hwa- seong city, gyeonggi province, is a world-class in- tegrated research complex equipped with a planning center, design center, power train center, wind tunnel facilities, collision testing facilities, and a comprehensive proving ground. Over 10,000 researchers are working to develop the world’s best vehicles in terms of per- formance, quality, and eco-friendliness. KORea centRal ReseaRcH institute the korea central Research institute in uiwang city, gyeonggi province, develops frontier and new growth engine technologies. it focuses on research related to the environment, energy, intelligent safety, human engineering, and cutting-edge materials. 1 2 3 MaBuK enViROnMental tecHnOlOgY centeR, KORea through the development of hydrogen fuel cell cars, the Mabuk environmental technology center in yongin city, gyeonggi province, is making all efforts to conceive technology that will lead the eco-friendly automotive 1. namyang technical Research center, korea market. 2. korea central Research institute 3. Mabuk environmental technology center, korea 4 5 6 4. visual Reality driving simulator 5. u.s. technical Research center 6. europe technical Research center cHina tecHnical ReseaRcH centeR euROPe tecHnical ReseaRcH centeR the china technical Research center in yantai the europe technical Research center is a high- was registered in February 2013 as a center to tech multifunctional building located on a 49,721 develop vehicles tailored to the chinese market, m2 lot near Frankfurt, germany, that includes an which is rapidly emerging as the biggest automotive engineering center for the development of quality market in the world. the center, being built on a automobiles as well as engines that meet european 1,840,000 m2 lot, is expected to serve as a global environmental regulations. R&d hub that will take Hyundai and kia’s presence in china to the next level. u.s. tecHnical ReseaRcH centeR With headquarters in ann arbor, Michigan, and a JaPan tecHnical ReseaRcH centeR technical research center and proving ground in the Japan technical Research center in yokohama california, the u.s. technical Research center is a focuses on advanced technologies, such as cutting- cutting-edge research institution that oversees edge electronics and hybrid technology. the development of automotive technology suitable for the american market. india tecHnical ReseaRcH centeR located in india’s “it city,” Hyderabad, the india technical Research center actively supports the design and analytical research of automobiles, as well as the development of products tailored to the local market. 44 HYUNDAI MOTOR COMPANY ANNuAL rEpOrT 2013 BLUE WAVEs IN THE WORLD gLOBAL prODuCTION SYSTEM 45 glOBal PROductiOn sYsteM incReasing custOMeR satisFactiOn WitH caRs develOped and pROduced tO Meet lOcal needs Hyundai has built production plants in every major automotive market around the world with systems and capacity that are optimized to fit the local environment in order to quickly produce and supply vehicles that are preferred by local customers so that it can raise customer satisfaction to the next level while contributing to regional development. Hyundai will continue to roll out this localization strategy and produce and supply the best quality cars to customers from nearby locations. uNITS prODuCED COMpArED TO THE prEVIOuS YEAr 1 2 3 1. the Hyundai design center at the namyang technology Research center 2. namyang technology Research center proving ground, korea 3. california proving ground, u.s. design centeRs, cReatORs OF glOBal tRends markets are showcasing designs that reflect the naMYang design centeR the Hyundai design center at the namyang technology Research center is amassing world- class design capabilities to improve the quality of needs of local consumers to deliver the unique value of Modern premium to customers. dRiVing test centeRs: RigOROus testing design so that the company can gain leadership in tHROugH scientiFic equiPMent the world’s automotive market and make a leap to naMYang tecHnOlOgY ReseaRcH centeR become a premium brand. Building on the vibrant PROVing gROund, KORea forms inspired by nature of the Fluidic sculpture the namyang technology Research center proving design philosophy, it develops vehicle interiors ground is a testing facility of world-class scale and exteriors using computer-based digital design. built on a 1,815,000 m2 area with 38 distinct test in addition, it is opening a new chapter as a global tracks totaling 70 km in length that include tracks trend leader by incorporating new materials and to evaluate high-speed handling and ride, as well new technologies into designs and enabling as the main 4.5 km high speed circuit. customers to experience the value of Modern premium through the use of more elegant colors caliFORnia PROVing gROund, u.s. and advanced materials. the california proving ground located in the glOBal design netwORK Mohave desert is a usd60 million facility sprawling over 17,680,000 m2 with more than 116 km of tracks the Hyundai design center is a design network that is 10 times the size of the namyang facility. centered around the comprehensive global design the largest high speed circuit has a 10.4 km long center at the namyang technology Research elliptical three-lane track, on which cars can be center that extends to europe, usa, india, china driven at speeds of up to 250 km/hr. and is actively and Japan. it leverages this network to grasp used for diverse high speed and durability tests, customers’ lifestyle trends and to develop dif- including maximum speed testing. ferentiated design strategies for each region. the north america and europe design centers ulsan PROVing gROund, KORea are developing competitive models that support this comprehensive proving ground in ulsan, the Hyundai’s regional development strategies, and first of its kind in korea, has 19 tracks and high design studios in india, china and other emerging speed circuits on an area of 660,000 m2. 4 5 4. asan factory 5. czech factory wORld’s Best wORKing enViROnMent, lOcal FactORies OPeRating in tHe MaJOR RigHt HeRe in KORea centeRs OF tHe wORld tHe ulsan FactORY: tHe wORld’s single tHe alaBaMa FactORY: PROtagOnist in tHe laRgest FactORY eXPansiOn intO tHe u.s. MaRKet known as “the factory in a forest” for having over inaugurated in May 2005, the prestigious alabama 590,000 trees, the ulsan Factory is Hyundai Motor’s factory in the u.s. has won numerous awards for main factory comprising of five independent quality and productivity. after ranking no. 10 in manufacturing facilities on a 5,050,000 m2 site that quality among 37 factories in north america in its employs over 34,000 employees and capacity to first year, the press factory topped the Harbor produce 1.5 million vehicles/year. it has a dedicated Report̓s north american automaker productivity pier where three 50,000 ton ships can dock at once. survey for 5 years in a row since 2009 and the engine factory topped the survey for 4 years in a row since 2010. the alabama Factory produced 1 million units of sonata in 2011 and 2 million units cumulatively in 2012. in 2013, it set a new annual production record of 399,500 units, proving its critical role in Hyundai Motor’s global success. tHe asan FactORY: gOOd wORKing cOnditiOns tRanslate intO gOOd caRs the asan Factory is a self-sufficient factory that produces 300,000 high-quality midsize and full-size cars, such as sonata and azera(grandeur), every year. it is famous for its user and eco-friendly work environment. tHe JeOnJu FactORY: tHe wORld’s Biggest PROductiOn centeR FOR cOMMeRcial VeHicles With annual capacity to produce 100,000 vehicles/ year, the Jeonju factory specializes in the production of commercial vehicles such as trucks, buses, and specially equipped vehicles. 46 HYUNDAI MOTOR COMPANY ANNuAL rEpOrT 2013 BLUE WAVEs IN THE WORLD gLOBAL SALES 47 2013 production (overseas factories) *unit: 1,000 vehicles 1,085 633 400 303 229 167 102 u.s cHn ind cZe tuR BRa Rus (includes commercial vehicles) 2013 production (korea factories) *unit: 1,000 vehicles 1,513 278 60 tHe cHina FactORies: PROductiOn strategic production hub that connects europe, inFRastRuctuRe OPtiMized FOR tHe africa, and the Middle east. it currently makes cHinese MaRKet the new i10 and is expected to play a bigger role Hyundai’s factories in china sold 1,076,000 vehicles as a production base for strategic european models in 2013, making china the biggest market for and the new i20. the turkey plant is contributing Hyundai. With annual production capacity of 1.05 greatly to export growth and economic develop- million units, Beijing Hyundai is paving the road ment in the region. to long-term growth through exceptional quality, sales service, and marketing. BRazil FactORY: HB20, tHe new standaRd FOR cOMPact caRs in BRazil tHe india FactORies: wORld-class the Brazil factory began production in 2012 and PROductiOn HuB FOR cOMPact caRs swept 14 consecutive media awards for the first Hyundai’s two vehicle factories and proprietary time in Brazil’s history. its HB20 is setting new engine factory in india produce vehicles tailored standards in the nation’s compact car segment and to meet local needs. vertically integrated, they are sold 167,000 units in 2013, surpassing its 150,000 equipped to independently conduct R&d, testing, unit goal. in 2014, Hyundai Motor will actively and vehicle production. the india factories̓ grand leverage the 2014 FiFa World cup in Brazil, which i10 was awarded 2014 indian car of the year. the the company officially sponsors, and conduct mar- factories produced 633,006 vehicles in 2013, sup- keting and csR activities that will help the brand plying the eOn, i10, and i20 to the indian market become a ”brand that customers love most.” and 120 countries across the globe. tHe Russia FactORY: tHe Fastest gROwing tHe czecH FactORY: euROPean PROductiOn caR FactORY in Russia ulsan asan Jeonju Base FOR OVeRseas MaRKet diVeRsiFicatiOn Hyundai Motor Manufacturing Rus plant, which the czech factory exports vehicles to 56 countries, began operation in January 2011 with an annual including non-european countries like south africa, production capacity of 150,000 units to mass- australia, and the Middle east. in recognition of produce the solaris (accent) model, has increased its outstanding quality, the czech-made ix35 was capacity to 200,000 units to meet ever increasing selected as “car of the year” by uk̓s Honest John demands. in 2012, the factory emerged as the and “australia̓s Best car” in 2013. the i30, which largest car manufacturing plant in the northwest began exports to australia in October 2012, scored region of Russia, operating 10 percent above its 848 points in aBc̓s testing of 17 models, earning stated capacity. also, with respect to production the australia̓s Best car title. this year, Hyundai efficiency and quality, it was recognized in 2012 as Motor will continue to drive market expansion by the best plant within Hyundai Motor. at present, raising awareness of the czech factory̓s out- this factory produces four models specifically standing product quality. developed to meet the needs and demands of Russian customers. the solaris (accent) model, in tuRKeY FactORY: PRePaRing FOR particular, has sold more than 300,000 units in the eXPansiOn intO euROPe past three years to become the most loved foreign With the expansion of production capacity from brand car in the country, and was also chosen as 100,000 to 200,000 units, the turkey plant is a the 2012 and 2013 Russia car of the year. 1 2 1. turkey factory 2. Russia factory glOBal sales stRengtHening OuR sales netWORk sO custOMeRs can eXpeRience MOdeRn pReMiuM in addition to producing region-specific, localized models, Hyundai Motor has also been strengthening its global sales network through diverse efforts such as creating exclusive showrooms for premium luxury cars such as the genesis and centennial (equus), opening showrooms at prime locations in major cities such as new york, london, Beijing, and Moscow, remodeling showrooms worldwide based on new, global dealership design standards, and reinforcing training of employees at the frontlines. Hyundai Motor will continue to upgrade its dealerships and to provide differentiated services to customers to boost satisfaction. TOTAL SALES Domestic sales *unit: 1,000 vehicles 684 668 641 a glOBal sales netwORK tHat is eXPanding tO eVeRY cORneR OF tHe wORld Hyundai offers a diverse lineup of products with establishing production bases in key international world-class competitiveness to customers in over markets. Hyundai will continue to create and build 200 countries through more than 6,000 dealers a more effective R&d, sales, and production net- and overseas regional sales and production sub- work to expand its global market presence. sidiaries. it is actively pursuing local markets by 641 2011 2012 2013 Oversea sales *unit: 1,000 vehicles 4,092 3,743 3,377 4,092 2011 2012 2013 4 5 6 1. europe-specific model, ix20 2. Brazil-specific model, HB20 3. india-specific model, eOn 48 HYUNDAI MOTOR COMPANY ANNuAL rEpOrT 2013 BLUE WAVEs IN THE WORLD WOrLD WIDE NETWOrk 49 wORldwide netwORK sichuan-Hyundai Motor company Hyundai Motor group china (HMgc) Beijing Hyundai Motor company (BHMc) Hyundai Motor technical china global support center (china) Hyundai Motor Japan (HMJ) Hyundai Motor Japan technical center Regional production companies production/sales companies sales companies Research centers Regional Headquarters Other asia & PaciFic TOTAL FACILITIEs 12 asia-pacific Regional commercial Headquarters asia-pacific Regional Headquarters Hyundai Motor company australia (HMca) Hyundai Motor india limited (HMi) india technical center africa & Middle east Regional Headquarters africa & Middle east Regional Headquarters for commercial vehicles Hyundai assan Otomotiv sanayi ve tic. a.Ş. (HaOs) Regional production companies production/sales companies sales companies Research centers Regional Headquarters Middle east & aFRica Other TOTAL FACILITIEs 50 HYUNDAI MOTOR COMPANY ANNuAL rEpOrT 2013 BLUE WAVEs IN THE WORLD WOrLD WIDE NETWOrk 51 Hyundai auto canada (Hac) Hyundai america technical center inc. (Hatci) Hyundai Motor Manufacturing alabama (HMMa) central & south america Regional Headquarters Hyundai Motor Mexico (HMM) cv latin america & caribbean Regional Headquarters Hyundai de Mexico (HyMeX) Hyundai translead (Ht) u.s. technical Research center (california proving ground) Hyundai Motor america (HMa) Hyundai u.s. design center Hyundai Motor Brasil (HMB) Regional production companies production/sales companies euROPe sales companies Research centers Regional Headquarters Other TOTAL FACILITIEs Hyundai Motor cis (HMcis) Hyundai Motor Manufacturing Russia llc (HMMR) Hyundai Motor norway as (HMn) Hyundai Motor poland (HMp) Hyundai Motor europe gmbH (HMe) Hyundai Motor europe technical center gmbH (HMetc) Hyundai Motor France sas (HMF) Hyundai Motor united kingdom, ltd. (HMuk) Hyundai Motor españa, s.l. (HMes) Hyundai Motor deutschland gmbH (HMd) Hyundai Motor company italy (HMci) Hyundai Motor sport gmbH (HMsg) Hyundai Motor czech s.r.o. (HMcZ) Hyundai Motor Manufacturing czech s.r.o. (HMMc) eastern europe Regional Headquarters eastern europe Regional Headquarters for commercial vehicles Regional production companies production/sales companies sales companies Research centers Regional Headquarters nORtH aMeRica centRal & sOutH aMeRica Other TOTAL FACILITIEs 12 52 HYUNDAI MOTOR COMPANY ANNuAL rEpOrT 2013 BLUE WAVEs IN THE WORLD gLOBAL MArkETINg 53 glOBal MaRKeting Hyundai MOtOR is at tHe epicenteR OF venues WHeRe tHe WORld̓s dReaMs and passiOns cOMe tOgetHeR Whether it is football, golf, cricket, or ski jumping, Hyundai Motor will come together and connect with people from all over the world. 2014 FiFa wORld cuP BRaziltM sPOnsORing glOBal celeBRatiOns: inteRnatiOnal FOOtBall eVents Hyundai Motor has been actively supporting the Motor buyers ramped up interest in Hyundai world̓s global sports celebration, football events. Motors and the tournament among football fans after establishing ties with FiFa and ueFa in 1999, around the world. it has sponsored and conducted extensive promo- in 2014, as an official sponsor of 2014 FiFa World tional activities at international football tournaments cup Brazil, Hyundai Motor is planning diverse such as the 2002 World cup korea-Japan, 2006 World marketing activities that can strengthen commu- cup germany, 2010 World cup south africa, and nication and connection with customers to convey euro 2000, 2004, 2008, and 2012. Hyundai Motor the image of Modern premium. under the concept sponsored the FiFa confederations cup Brazil 2013 of “social World cup,” the company is planning to and staged FiFa confederations cup street cheering hold a World cup celebration that brings together rallies under the slogan “concentra!” (come to- people from all over the world with Hyundai Motor gether!) in key cities in Brazil, where television ads based on digital social networking, advertising, were aired on large screens and onsite interactive and promotions. the company will build exclusive, games and events helped to build connections with large-scale, street cheering venues, known as customers. Hyundai Motor supplied 302 passenger Hyundai Fan parks, in korea and major cities cars and vans to eight participating teams, officials, across europe in countries like germany, spain, and personnel to support the competition. it also and Bosnia. in addition, it will conduct competitions produced and distributed a viral video series called where fans from around the world will create cheers “Road to 2013” featuring the company̓s strategic rooting for their team̓s victory and the global Brazil vehicle HB20 together with the Brazilian “test-drive a Hyundai to World cup Brazil” cam- national team striker Fred chavez. Finally, a paign to invite 200 winners to watch a qualifying large-scale, ticket promotion targeting Hyundai match at FiFa World cup Brazil. 54 HYUNDAI MOTOR COMPANY ANNuAL rEpOrT 2013 BLUE WAVEs IN THE WORLD gLOBAL MArkETINg 55 ◀ Ricardo kaká (Brazil) Oscar (Brazil) ▶ iker casillas (spain) ▶ HYundai MOtOR BRand aMBassadORs tHRee suPeRstaRs will cOnVeY tHe Hyundai Motor will conduct a variety of tv, eXciteMent OF wORld cuP and tHe HYundai magazine, and online advertising and marketing MOtOR BRand naMe. activities, and leverage the three players to imprint Hyundai Motor signed spain̓s casillas and Brazil̓s Hyundai Motor̓s brand image in the minds of soccer kaka and Oscar to be brand ambassadors for the fans around the world. in addition to conveying the 2014 FiFa World cup Brazil. casillas, kaka, and Oscar, fervor of World cup through casillas, kaka, and Os- key players in the spanish and Brazilian teams which car, Hyundai Motor will actively support the tourna- are top contenders to win the 2014 FiFa World cup ment as an official sponsor of FiFa World cup. Brazil, are “stars among stars” that are currently Hyundai Motor has been an official sponsor of FiFa active in the world-renowned spanish primera liga, World cup since 1999 and has supported every the italian serie a, and Britain̓s premier league. national FiFa tournament. in 2010, it extended its Hyundai Motor is confident that the three players sponsorship agreement until 2022, reaffirming its will boost the brand̓s worldwide awareness and ongoing commitment to global football to strengthen raise the tournament̓s excitement. its brand image. 56 HYUNDAI MOTOR COMPANY ANNuAL rEpOrT 2013 BLUE WAVEs IN THE WORLD gLOBAL MArkETINg 57 1 4 2 3 1. sponsorship of the Fis ski- Flying World championships 2. sponsorship of the ski Jumping World cup 3. sponsorship of the Hyundai tournament of champions 4. sponsorship of the india cricket World cup 5 6 7 5. 2014 geneva international Motor show 6. 2014 north american international auto show (detroit) 7. 2013 international automobile ausstellung (Frankfurt) diVeRsiFYing sPORts sPOnsORsHiPs: FROM gOlF and cRicKet tO sKi JuMPing MOtOR sHOws, tHe HOttest sHOws FOR autOMOBile BRands Recently, Hyundai Motor diversified its sports various promotions to connect with customers, Hyundai Motor actively participates in major sideration the importance of luxury car models in sponsorships to include golf, cricket, and ski such as the good-Wish Ball promotion where international auto shows in the u.s., europe, and the Middle east, it unveiled Hcd-14, concept car of jumping. From 2011, Hyundai Motor has been customers recorded their cheering messages on china, as well as emerging markets, to allow its the all-new genesis, raising further anticipation the title sponsor of the Hyundai tournament of cricket balls. in 2014, Hyundai Motor sponsored global audience to experience the value of the for the new vehicle that was launched in 2014. champions, a u.s. pga season opening competition the cricket t20 World cup held in Bangladesh, Hyundai Motor brand. in 2014, Hyundai Motor will continue to participate that pitches the previous year’s pga tour winners obtaining great response in countries like india, Hyundai Motor greeted visitors at the geneva in various international motor shows to connect to compete against one another. the 2014 tourna- where cricket is immensely popular and 1.3 million international Motor show in March 2013 and the with customers across the globe. in January, the ment, held from January 3 to 6 in Hawaii, commu- fans came together at Hyundai Fan parks. international automobile ausstellung in Frankfurt company launched the all-new genesis at the nicated Hyundai Motor̓s brand direction, Modern in addition, Hyundai Motor began to support the in september with a sophisticated, three-dimen- north american international auto show in detroit, premium, and eco-friendly corporate image by international ski Federation̓s (Fis) ski jumping sional booth and the Brilliant Wall that awed viewers and in March, it unveiled the Hed-9 intrado concept featuring its luxury and eco-friendly cars. championships in 2012 by sponsoring the 2012 and with its amazing and innovative led effects. it car at the geneva international Motor show with On the other hand, Hyundai Motor has been 2014 Fis ski-Flying World championships and the launched the new i10 in Frankfurt, focusing attention its next generation hydrogen fuel cell powertrain, supporting the international cricket council (icc) 2012-2013 and 2013-2014 ski Jumping World cup on its europe-specific new models. providing a glimpse into Hyundai Motor̓s innovative starting with the sponsorship of the india cricket seasons. it provided 37 vehicles to support the Hyundai Motor affirmed its commitment to the technology. in april, the company unveiled its World cup in 2011, the sri lanka World t20 and nordic World ski championships held in February chinese market by launching grand santa Fe, its china-specific ix25 premium compact suv at the australia under-19 championship in 2012, to the 2013 in Fiemme, italy, and helped the smooth china-only Mistra sedan, and sonata Hybrid at Beijing international automobile exhibition. Hyundai india Women’s cricket World cup and icc champions completion of diverse Fis events by supplying a auto shanghai in april and auto guangzhou in Motor will continue to offer diverse content in 2014 trophy england & Wales in 2013. in particular, total of 335 vehicles. Hyundai Motor will continue november. the company also participated in the that will convey its new and exciting brand value during the icc champions trophy 2013 england & to excite customers and promote the value of the largest motor show in the Middle east, the dubai to customers across the world. Wales held in June, the company operated Hyun- brand by supporting a greater variety of sports Motor show, in november 2013. taking into con- dai Fan parks in 7 major cities in india and staged disciplines. 58 HYUNDAI MOTOR COMPANY ANNuAL rEpOrT 2013 BLUE WAVEs IN THE WORLD WOrLD rALLY CHAMpIONSHIp 59 wORld RallY cHaMPiOn- sHiP Hyundai MOtOR is ZOOMing tHROugH WRc, tHe tOugHest cOMpetitiOn gROund FOR tHe WORld̓s autOMakeRs. already in its 42nd year since it began in 1973, the Fia World Rally championship (WRc) is a battling ground where the world̓s major automakers equip their cars to race in a fierce competition. together with F1, a competition of non-commercial vehicles, WRc is considered to be the pinnacle of car racing. starting with Rallye Monte carlo (Monaco) in January, WRc is held in 13 countries around the world and has a significant impact improving brand awareness and increasing foreign sales. 1 2 3 1. WRc Rally guanajuato Mexico 2. WRc Rally sweden 3. WRc Rally de portugal tHe aMBitiOus dReaMs OF tHe i20 wRc RallY caR after unveiling its converted i20 world rally car car engineers from europe cooperated in every at the paris Motor show in 2012, Hyundai Motor step of the rally car̓s development to ensure du- established the Hyundai Motor sports subsidiary rability and performance in extreme driving condi- in germany and embarked on a year of preparations tions and to optimize the vehicle̓s aerodynamic for WRc 2014. i20 is Hyundai Motor̓s strategic design. starting from the opening race in January supermini car for europe whose overall length, in Monaco to the Rally sweden in February and wheelbase and specifications qualify for WRc. the notoriously difficult Rally guanajuato Mexico, the i20 World Rally car (i20WRc) is equipped to the i20WRc performed remarkably. it set a historical deliver the highest level of power and performance record by landing at no. 3 in only its third race, with a 300 hp, 1,600 cc engine and turbocharger, demonstrating Hyundai Motor̓s prowess as a global 6-speed sequential transmission, and a 4-wheel- car maker, its state-of-the-art technology, and drive system. it also has a newly developed sus- durability. pension system that will deliver optimum driving Hyundai Motor aims to complement its high-quality performance on a variety of road surfaces. in image with a new high-level-performance image particular, the dedicated engineers from namyang by participating at the World Rally championship. technology Research center and professional rally 60 HYUNDAI MOTOR COMPANY ANNuAL rEpOrT 2013 BLUE WAVEs IN THE WORLD MOVINg THE WOrLD TOgETHEr 61 MOVing tHe wORld tOgetHeR Just as Hyundai MOtOR tRies tO MOve custOMeRs̓ HeaRts WitH its pROducts, it Will dO its Best tO tOucH peOple’s HeaRts tHROugH cORpORate sOcial RespOnsiBility the role of Hyundai Motor as a global automotive leader is not only to develop eco-friendly cars of the highest quality, but also to study ways to improve the overall well-being of people in our society. Hyundai Motor will strive to do its best to facilitate the well-being of our global community by contributing in ways that best match the character and strengths of the company. sOcial cOntRiButiOn sYMBOl and slOgan as a slogan that summarizes the company’s entire social contribution philosophy, “Moving the World together” expresses Hyundai Motor’s desire to make changes for the better together with its neighbors through love and actions. “Moving” represents the desire for continuous change and development, “world” represents the hopes and dreams of the world, and “together” represents the harmonious partnership with society. to strengthen the company’s resolve to make “Moving the World together” a reality, the slogan has been translated into 23 languages. saFe MOVe Hyundai Motor is spreading a culture of traffic safety through its safe Move campaign under the motto “Making safe streets together.” it incorporates initiatives such as organizing car accident prevention classes for children, implementing preventive measures against car crashes, and supporting car accident victims. 62 HYUNDAI MOTOR COMPANY ANNuAL rEpOrT 2013 BLUE WAVEs IN THE WORLD MOVINg THE WOrLD TOgETHEr 63 1 2 3 1. signing ceremony to air the “traffic safety with Robo-car poli” animation on cctv in china. 2. three-leaf clover “Find a dream” camp. 3. sOnata the brilliant sound project 4 5 6 4. employees personally plan and direct volunteer activities under the H-volunteer designer program. 5. employees and their children together with foreign college student volunteers at the H-Family Workcamp. 6. employees and their families with disabled children at the H-Family volunteer program. PROMOting tRaFFic saFetY sHaRing sOunds witH tHe HeaRing- in 2013, Hyundai Motor expanded the safe Move iMPaiRed tHROugH Music seats cORPORate ResPOnsiBilitY tHROugH sinceRe stRengtHening OuR tOP 3 initiatiVes tO VOlunteeR actiVities estaBlisH a tRaFFic saFetY cultuRe campaign to promote traffic safety overseas. it Hyundai Motor created and distributed the “sOnata in 2013, Hyundai Motor focused on expanding the focus of Hyundai Motor̓s 2014 social produced and broadcasted the “traffic safety touchable Music seats” in 2013 as part of its volunteer activities prompted by genuine interest contribution programs is to reinforce its 3 main with Robo-car poli” animation on cctv in china “sOnata the brilliant sound project” to enable in the cause. in addition to regular volunteer traffic safety initiatives: traffic safety with and ctc in Russia, and conducted numerous the hearing-impaired to enjoy music. Based on activities related to sisterhood facilities, holidays Robo-car poli, three-leaf clover, and support for experiential education programs to teach children the insight that the hearing-impaired have a and new year, and 1-to-1 rural village outreach the korea national society for the prevention of about traffic safety. in korea, Hyundai Motor heightened sense of touch, Hyundai Motor̓s programs, the company supported 165 H-volunteer Road kill. Hyundai Motor will increase the scope conducted Robo-car poli traffic safety classes in namyang technology Research center and the designer programs in which employees voluntarily and scale of Robo-car poli traffic safety classes 140 primary schools and ran a special exhibition sogang university graduate school of Media selected a goal and location and initiated social and implement the program overseas. it will stand at the “seoul character licensing Fair” to teach co-developed chairs that enable the hearing- programs, such repairing vehicles for the disabled in the forefront of efforts to prevent traffic traffic safety to children. last year, Hyundai Motor impaired to listen to music, not through sounds, or teaching korean and korean culture to migrant accidents involving children by distributing the bolstered its three-leaf clover program for children but through vibrations on their skin. the company workers. in addition, through the H-Family volunteer road safety animation series worldwide. in orphaned by car accidents. in addition to material ran an online donation program for every 1,000 program, the company enabled disabled children addition, it will scale up the three-leaf clover and monetary support, the company launched the participants to donate 1 seat. to garner support, to relax and enjoy new experiences with employees “Find a dream” mentoring program and conduct “Find a dream” mentoring program to help children Music seats were placed in cafes in downtown and their families, such as cooking contests, diverse activities, such as dream Finding realize their dreams. in 2013, it granted the wishes seoul for hands-on experience. going a step further, traditional culture, and mini sports competitions. Mentoring, career counseling presenations and of 1,266 children and helped them find their dreams Hyundai Motor created precious memories for separately, the company ran the H-Family Work- meet-and-greet sessions with professionals, to and happiness. separately, to lower the number of hearing impaired children by installing Music seats camp, a camp for foreign college student volunteers, fulfill its role as a dependable companion to over 300,000 wild animal road kills nationwide every in a concert hall and making it possible for them employees, and their children to contribute to rural children orphaned in traffic accidents and as an year and the surge in secondary traffic accidents, to experience a concert for the very first time. communities. For 3 nights and 4 days at youngwol enabler that helps their dreams come true. Hyundai Hyundai Motor supported the establishment of as a result of these efforts, over 50,000 people in the gangwon province, volunteers repainted Motor will continue to support the korea national korea̓s first organization for the prevention of participated in the “sOnata the brilliant sound local children̓s center facilities, harvested crops, society for the prevention of Road kill by road kill. Hyundai Motor plans to embark on more project” and Hyundai Motor donated 5 Music seats made kimchi, and cleaned-up a local river. Finally, advocating road kill prevention and the construction diverse efforts to promote traffic safety and to and a multimedia audio-visual studio to 10 schools at the H-volunteer Festival, the company recapped of wildlife pathways. Hyundai Motor will fulfill its build a safer community. for the deaf nationwide. the project offered the year̓s worth of volunteer and social contribution responsibility and duties as a car manufacturer shining moments in people̓s lives by using state- of-the-art technology to create experiences that otherwise would not have been possible. activities and held cultural performances for the through extensive, multifaceted efforts. underprivileged. in the future, Hyundai Motor will continue to explore ways to connect with people in need through volunteer activities that emanate from the heart. 64 HYUNDAI MOTOR COMPANY ANNuAL rEpOrT 2013 COrpOrATE gOVErNANCE AND BOArD OF DIrECTOrS 65 cORPORate gOVeRnance and BOaRd OF diRectORs HMc Has BOaRd OF diRectORs and tHRee suBcOMMittees including audit cOMMittee, eXteRnal diRectOR candidate RecOMMendatiOn cOMMittee and etHics cOMMittee undeR tHe BOaRd OF diRectORs. Meetings date agenda 1st general Jan. 24. 2013 • approval of financial statements for the 45th fiscal year and 6 other items extraordinary Feb. 21. 2013 • approval of agenda items for the 45th general shareholders̓ meeting and 1 other item extraordinary Mar. 15. 2013 • approval of an appointment of ceO and 4 other items key activities of the BOd in 2013 Resolution approved approved approved 2nd general 3rd general 4th general apr. 25. 2013 • approval of a transaction with a company that has the same majority shareholder and 2 other items approved Jul. 25. 2013 •approval of a transaction with a company that has the same majority shareholder and 1 other item approved Oct. 24. 2013 • approval of a transaction with a company that has the same majority shareholder and 2 other items approved * detailed information can be found at HMc’s homepage (http://pr.hyundai.com) or the Fss’s electronic disclosure system (http://dart.fss.or.kr). Blue Waves in Hyundai tHe audit cOMMittee and tHe eXteRnal diRectOR candidate RecOMMendatiOn cOMMittee tHe BOaRd OF diRectORs the BOd makes decisions on matters stipulated by law and the articles of incorporation, as well as issues delegated to it through shareholders’ meetings. the BOd sets guidelines for the company’s management and makes important decisions related to the execution of projects. the BOd supervises the work of executives and management. the BOd consists of four internal and five external directors. the BOd convenes regular board meetings as well as extraordinary meetings whenever necessary. the audit committee consists of four external directors. its duties include auditing the company’s management and accounting, requesting business reports from executives, and monitoring the company’s financial status. the audit committee can raise discus- sions on matters related to general shareholders̓ meetings, directors and the BOd, and auditing issues. internal systems to enable members’ access to management information necessary for proper auditing are in place. the external director candidate Recommendation committee consists of two internal directors and three external directors. all external directors are appointed after being recommended by the Recommendation committee. compensation for directors was capped at kRW 15 billion at the 2013 general shareholders̓ Meeting. total compensation for internal and external directors from 1 January to 31 december 2013 amounted to kRW 9.7 billion. average compensation for internal directors was kRW 2.3 billion and kRW 87 million for external directors. key activities of the audit committee in 2013 BOArD OF DIrECTOrS extraordinary Feb. 21, 2013 •approval of agenda items for the 45th general shareholders̓ Meeting and 1 other item Meetings date agenda 1st general Jan. 24, 2013 •approval of financial statements for the 45th fiscal year and 2 other items extraordinary Mar. 15, 2013 2nd general apr. 25, 2013 3rd general Jul. 25, 2013 4th general Oct. 24, 2013 - - - - * detailed information can be found at the Fss’s electronic disclosure system (http://dart.fss.or.kr). Resolution approved approved - - - - AuDIT COMMITTEE ExTErNAL DIrECTOr CANDIDATE rECOMMENDATION COMMITTEE ETHICS COMMITTEE name title/affiliation internal Mong-koo chung eui sun chung choong Ho kim gap Han yoon chairman & ceO vice chairman president & ceO president & ceO il Hyung kang Representative tax accountant, daeun tax corporation se Bin Oh lawyer, dong in law group external young chul yim lawyer, shin & kim sung il nam professor of economics, sogang university you Jae yi professor of Business administration, seoul national university BOd Members (as of end april 2014) Joint Positions Held external director candidate Recommendation committee audit committee ethics committee ○ - ○ - ○ ○ - ○ - - - - - ○ ○ ○ ○ - - - ○ - - ○ ○ - ○ tHe etHics cOMMittee Hyundai Motor company established the ethics committee in 2007 to improve transparency of internal transactions and to ensure ethical management of the company. ethical management and internal transaction restrictions were further reinforced in 2012 when the committee was reorganized as a sub-committee of the BOd. the ethics committee consists of three external directors and one internal director. the chairmanship is held by an external director. key activities of the ethics committee in 2013 Meetings date agenda 1st general Jan. 24, 2013 •approval of key social contribution plans for 2013 and 2 other items Resolution approved 2nd general 3rd general 4th general apr. 25, 2013 •approval of a transaction with a company that has the same majority shareholder and 2 other items approved Jul. 25, 2013 •approval of a transaction with a company that has the same majority shareholder and 1 other item approved Oct. 24, 2013 •approval of a transaction with a company that has the same majority shareholder and 2 other items approved * detailed information on the directors can be found at HMc’s homepage (k orean: http://pr.hyundai.com; english: http://worldwide.hyundai.com/worldwide_index.html) or the Financial * detailed information can be found at the Fss’s electronic disclosure system (http://dart.fss.or.kr). supervisory service(Fss)’s electronic disclosure system (http://dart.fss.or.kr). 66 HYUNDAI MOTOR COMPANY AND ITs sUBsIDIARIEs 67 Financial stateMents Hyundai MOtOR cOMpany and its suBsidiaRies INDEpENDENT AuDITOrS’ rEpOrT englisH tRanslatiOn OF a RepORt ORiginally issued in kORean tO tHe sHaReHOldeRs and tHe BOaRd OF diRectORs OF Hyundai MOtOR cOMpany: We have audited the accompanying consolidated financial statements of Hyundai Motor company (the “company”) and its subsidiaries. the financial statements consist of the consolidated statements of financial position as of december 31, 2013 and 2012, respectively, and the related consolidated statements of income, consolidated statements of comprehensive income, consolidated statements of changes in equity and consolidated statements of cash flows, for the years then ended, respectively, all expressed in korean won. the company’s management is responsible for the preparation and fair presentation of the consolidated financial statements and our responsibility is to express an opinion on these consolidated financial statements based on our audits. We did not audit the financial statements of certain subsidiaries, including Hyundai capital services, inc., whose statements reflect 42.3% and 42.3% of the consolidated total assets as of december 31, 2013 and 2012, respectively, and 49.0% and 49.9% of the consolidated total sales for the years then ended, respectively. those statements were audited by other auditors whose reports have been furnished to us, and our opinion, insofar as it relates to the amounts included for those entities, is based solely on the reports of the other auditors. We conducted our audits in accordance with auditing standards generally accepted in the Republic of korea. those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. an audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. an audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. in our opinion, based on our audits and the reports of the other auditors, the financial statements referred to above present fairly, in all material respects, the financial position of the company and its subsidiaries as of december 31, 2013 and 2012, respectively, and the results of its operations and its cash flows for the years then ended, respectively, in conformity with korean international Financial Reporting standards (“k-iFRs”). accounting principles and auditing standards and their application in practice vary among countries. the accompanying consolidated financial statements are not intended to present the financial position, results of operations, changes in equity and cash flows in accordance with accounting principles and practices generally accepted in countries other than the Republic of korea. in addition, the procedures and practices utilized in the Republic of korea to audit such financial statements may differ from those generally accepted and applied in other countries. accordingly, this report and the accompanying consolidated financial statements are for use by those knowledgeable about korean accounting procedures and auditing standards and their application in practice. March 6, 2014 nOtice tO ReadeRs this report is effective as of March 6, 2014, the auditors’ report date. certain subsequent events or circumstances may have occurred between the auditors’ report date and the time the auditors’ report is read. such events or circumstances could significantly affect the accompanying consolidated financial statements and may result in modifications to the auditors’ report. 67 Independent Auditors’ Report 68 Consolidated statements of Financial Position 70 Consolidated statements of Income 71 Consolidated statements of Comprehensive Income 72 Consolidated statements Of Changes In Equity 74 Consolidated statements of Cash Flows 75 Notes to Consolidated Financial statements FINANCIAL STATEMENTS68 HYUNDAI MOTOR COMPANY AND ITs sUBsIDIARIEs 69 in millions of korean Won in millions of korean Won assets december 31, 2013 december 31, 2012 liaBilities and equitY december 31, 2013 december 31, 2012 current liabilities: trade notes and accounts payable (note 19) ￦ 6,722,740 ￦ 6,841,326 CONSOLIDATED STATEMENTS OF FINANCIAL pOSITION as OF deceMBeR 31, 2013 and 2012 current assets: cash and cash equivalents (note 19) short-term financial instruments (note 19) trade notes and accounts receivable (note 3, 19) Other receivables (note 4, 19) Other financial assets (note 5, 19) inventories (note 6) current tax assets Financial services receivables (note 13, 19) non-current assets classified as held for sale (note 8) Other assets (note 7, 19) total current assets non-current assets: long-term financial instruments (note 19) long-term trade notes and accounts receivable (note 3, 19) Other receivables (note 4, 19) Other financial assets (note 5, 19) property, plant and equipment (note 9) investment property (note 10) intangible assets (note 11) investments in joint ventures and associates (note 12) deferred tax assets (note 32) Financial services receivables (note 13, 19) Operating lease assets (note 14) Other assets (note 7, 19) total non-current assets total assets ￦ 6,872,430 14,875,288 ￦ 6,759,338 12,384,057 3,485,345 3,118,386 507,821 7,073,116 54,845 21,178,591 22,347 1,667,936 58,856,105 35,495 43,309 1,127,839 2,731,884 21,462,587 263,984 3,129,090 14,694,995 521,399 19,835,016 10,564,876 154,900 74,565,374 3,686,824 2,304,410 109,299 6,772,864 34,575 20,867,467 23,307 1,905,445 54,847,586 1,359 43,801 1,036,609 1,594,464 20,739,858 282,832 2,883,218 13,117,731 489,080 18,626,764 7,830,088 44,424 66,690,228 CONSOLIDATED STATEMENTS OF FINANCIAL pOSITION as OF deceMBeR 31, 2013 and 2012 Other payables (note 19) short-term borrowings (note 15, 19) current portion of long-term debt and debentures (note 15, 19) income tax payable provisions (note 16) Other financial liabilities (note 17, 19) Other liabilities (note 18, 19) total current liabilities non-current liabilities: long-term other payables (note 19) debentures (note 15, 19) long-term debt (note 15, 19) net defined benefit liabilities (note 33) provisions (note 16) Other financial liabilities (note 17, 19) deferred tax liabilities (note 32) Other liabilities (note 18, 19) total non-current liabilities total liabilities equity: capital stock (note 20) capital surplus (note 21) Other capital items (note 22) accumulated other comprehensive income (note 23) ￦ 133,421,479 ￦ 121,537,814 Retained earnings (note 24) (continued) equity attributable to the owners of the Parent company non-controlling interests total equity total liabilities and equity 4,687,490 5,292,798 8,685,254 605,280 1,782,937 144,069 3,999,114 4,542,007 6,781,749 7,912,341 550,847 1,768,014 148,311 4,291,104 31,919,682 32,835,699 15,964 29,322,780 4,666,030 389,306 5,122,982 440,113 3,352,352 1,609,481 44,919,008 76,838,690 1,488,993 4,130,668 (1,128,779) (834,036) 48,274,239 51,931,085 4,651,704 56,582,789 8,271 26,370,689 4,142,473 821,749 5,240,744 356,193 2,362,063 1,482,358 40,784,540 73,620,239 1,488,993 4,158,988 (1,128,779) (473,373) 39,993,230 44,039,059 3,878,516 47,917,575 ￦ 133,421,479 ￦ 121,537,814 (concluded) FINANCIAL STATEMENTS70 HYUNDAI MOTOR COMPANY AND ITs sUBsIDIARIEs 71 CONSOLIDATED STATEMENTS OF INCOME FOR tHe yeaRs ended deceMBeR 31, 2013 and 2012 sales (note25, 38) cost of sales (note 30) gross profit selling and administrative expenses (note 26, 30) Operating income gain on investments in joint ventures and associates, net (note 27) Finance income (note 28) Finance expenses (note 28) Other income (note 29) Other expenses (note 29, 30) income before income tax income tax expense (note 32) Profit for the year Profit attributable to: Owners of the parent company non-controlling interests earnings per share attributable to the owners of the Parent company: (note 31) Basic earnings per common share diluted earnings per common share see accompanying notes to consolidated financial statements. in millions of korean Won, except per share amounts 2013 2012 ￦ 87,307,636 ￦ 84,469,721 67,859,491 19,448,145 11,132,648 8,315,497 3,057,109 805,261 552,709 1,138,001 1,066,453 11,696,706 2,703,209 64,967,273 19,502,448 11,061,847 8,440,601 2,581,564 969,726 624,473 1,231,360 988,336 11,610,442 2,549,310 ￦ 8,993,497 ￦ 9,061,132 8,541,834 451,663 ￦ 31,441 ￦ 31,441 8,566,568 494,564 ￦ 31,532 ￦ 31,532 CONSOLIDATED STATEMENTS OF COMprEHENSIVE INCOME FOR tHe yeaRs ended deceMBeR 31, 2013 and 2012 profit for the year Other comprehensive income (expenses): items that will not be reclassified subsequently to profit or loss: effect of changes in accounting policies Remeasurements of defined benefit plans changes in retained earnings of equity-accounted investees, net items that may be reclassified subsequently to profit or loss: gain (loss) on available-for-sale (“aFs”) financial assets, net gain on valuation of cash flow hedge derivatives, net changes in share of earnings of equity-accounted investees, net loss on foreign operations translation, net total other comprehensive loss total comprehensive income comprehensive income attributable to: Owners of the parent company non-controlling interests see accompanying notes to consolidated financial statements. in millions of korean Won 2013 2012 ￦ 8,993,497 ￦ 9,061,132 - 249,790 13,206 262,996 59,155 6,263 (60,746) (383,309) (378,637) (115,641) ￦ 8,877,856 8,441,925 435,931 (4,855) (247,197) (102,759) (354,811) (80,693) 55,471 (190,728) (636,824) (852,774) (1,207,585) ￦ 7,853,547 7,378,454 475,093 FINANCIAL STATEMENTS72 HYUNDAI MOTOR COMPANY AND ITs sUBsIDIARIEs 73 CONSOLIDATED STATEMENTS OF CHANgES IN EquITY CONSOLIDATED STATEMENTS OF CHANgES IN EquITY FOR tHe yeaRs ended deceMBeR 31, 2013 and 2012 FOR tHe yeaRs ended deceMBeR 31, 2013 and 2012 capital stock capital surplus Other capital items accumulated other comprehensive income Retained earnings total equity attributable to the owners of the Parent company non- controlling interests total equity capital stock capital surplus Other capital items accumulated other comprehensive income Retained earnings total equity attributable to the owners of the Parent company non- controlling interests total equity in millions of korean Won in millions of korean Won Balance at January 1, 2012 ￦ 1,488,993 ￦ 4,114,010 ￦ (1,128,779) ￦ 375,281 ￦ 32,263,528 ￦ 37,113,033 ￦ 3,214,669 ￦ 40,327,702 Balance at January 1, 2013 ￦ 1,488,993 ￦ 4,158,988 ￦ (1,128,779) ￦ (473,373) ￦ 39,993,230 ￦ 44,039,059 ￦ 3,878,516 ￦ 47,917,575 comprehensive income: effect of changes in accounting policies profit for the year gain (loss) on aFs financial assets, net gain on valuation of cash flow hedge derivatives, net changes in valuation of equity- accounted investees, net Remeasurements of defined benefit plans loss on foreign operations translation, net total comprehensive income transactions with owners, recorded directly in equity: payment of cash dividends increase in subsidiaries’ stock disposals of subsidiaries’ stock Others total transactions with owners, recorded directly in equity - - - - - - - - - - - - - - - - - - - - - - 42,866 2,112 - 44,978 - - - - - - - - - - - - - - - (81,330) 29,746 (4,743) (4,743) (112) (4,855) 8,566,568 8,566,568 494,564 9,061,132 - - (81,330) 637 (80,693) 29,746 25,725 55,471 (189,602) (102,759) (292,361) (1,126) (293,487) - (231,958) (231,958) (15,239) (247,197) (607,468) - (607,468) (29,356) (636,824) (848,654) 8,227,108 7,378,454 475,093 7,853,547 (480,105) (480,105) (43,262) (523,367) - - 42,866 232,050 274,916 (17,301) (17,301) 2,112 (10) (24) 2,102 (17,325) - - - - - comprehensive income: profit for the year gain on aFs financial assets, net gain on valuation of cash flow hedge derivatives, net changes in valuation of equity- accounted investees, net Remeasurements of defined benefit plans loss on foreign operations translation, net total comprehensive income transactions with owners, recorded directly in equity: payment of cash dividends purchase of subsidiaries’ stock increase in subsidiaries’ stock Others total transactions with owners, recorded directly in equity - - - - - - - - - - - - - - - - - - - - (53,599) 25,279 - (28,320) - - - - - - - - - - - - - 8,541,834 8,541,834 451,663 8,993,497 58,197 2,319 - - 58,197 958 59,155 2,319 3,944 6,263 (61,148) 13,206 (47,942) 402 (47,540) - 247,548 247,548 2,242 249,790 (360,031) - (360,031) (23,278) (383,309) (360,663) 8,802,588 8,441,925 435,931 8,877,856 - - - - - (520,832) (520,832) (111,697) (632,529) - - (53,599) (121,676) (175,275) 25,279 571,225 596,504 (747) (747) (595) (1,342) (521,579) (549,899) 337,257 (212,642) Balance at december 31, 2012 ￦ 1,488,993 ￦ 4,158,988 ￦ (1,128,779) ￦ (473,373) ￦ 39,993,230 ￦ 44,039,059 ￦ 3,878,516 ￦ 47,917,575 see accompanying notes to consolidated financial statements. (concluded) (continued) (497,406) (452,428) 188,754 (263,674) Balance at december 31, 2013 ￦ 1,488,993 ￦ 4,130,668 ￦ (1,128,779) ￦ (834,036) ￦ 48,274,239 ￦ 51,931,085 ￦ 4,651,704 ￦ 56,582,789 FINANCIAL STATEMENTS74 HYUNDAI MOTOR COMPANY AND ITs sUBsIDIARIEs 75 CONSOLIDATED STATEMENTS OF CASH FLOWS FOR tHe yeaRs ended deceMBeR 31, 2013 and 2012 cash flows from operating activities: cash generated from operations: (note 34) profit for the year adjustments changes in operating assets and liabilities interest received interest paid dividend received income tax paid net cash provided by operating activities cash flows from investing activities: proceeds from withdrawal (purchase) of short-term financial instruments, net proceeds from disposals of other financial assets Receipts from other receivables proceeds from disposals of property, plant and equipment proceeds from disposals of intangible assets proceeds from disposals of investments in joint ventures and associates acquisitions of other financial assets increases in other receivables purchases of long-term financial instruments acquisitions of property, plant and equipment acquisitions of intangible assets acquisitions of investments in subsidiaries acquisitions of investments in joint ventures and associates Other cash receipts from investing activities, net in millions of korean Won 2013 2012 ￦ 8,993,497 ￦ 9,061,132 7,332,779 (13,217,233) 3,109,043 703,243 (1,444,092) 787,804 (1,947,532) 1,208,466 224,284 71,693 76,395 306,471 26,673 1,504 (107,515) (96,776) (2,854,853) (3,171,093) (991,064) - (131,088) 24,637 7,118,536 (8,311,579) 7,868,089 617,736 (1,660,401) 744,132 (2,229,870) 5,339,686 (1,900,099) 448,109 93,261 69,230 1,935 241,806 (539,551) (97,098) (1,160,000) (3,000,038) (798,607) (290,989) (275,104) 8,012 net cash used in investing activities cash flows from financing activities: Repayment of short-term borrowings, net proceeds from long-term debt and debentures paid-in capital increase of subsidiaries purchase of subsidiaries’ stock (6,620,732) (7,199,133) (864,251) 23,632,277 476,493 (175,275) (1,363,213) 23,448,538 277,476 - Repayment of long-term debt and debentures (16,669,654) (18,890,467) Repayment of other financial liabilities dividends paid Other cash payments from financing activities, net net cash provided by financing activities effect of exchange rate changes on cash and cash equivalents net increase in cash and cash equivalents cash and cash equivalents, beginning of the year - (632,529) (51,611) 5,715,450 (190,092) 113,092 6,759,338 (341,484) (523,367) (34,652) 2,572,831 (185,992) 527,392 6,231,946 cash and cash equivalents, end of the year ￦ 6,872,430 ￦ 6,759,338 see accompanying notes to consolidated financial statements. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS as OF and FOR t He yeaRs ended deceMBeR 31, 2013 and 2012 1. geneRal: Hyundai Motor company (the “company” or “parent company”) was incorporated in 1967, under the laws of the Republic of korea. the company and its subsidiaries (the “group”) manufactures and distributes motor vehicles and parts, operates vehicle financing and credit card processing, and manufactures trains. the shares of the company have been listed on the korea exchange since 1974, and the global depositary Receipts issued by the company have been listed on the london stock exchange and luxembourg stock exchange. as of december 31, 2013, the major shareholders of the company are Hyundai MOBis (20.78%) and chung, Mong koo (5.17%). (1) tHe cOMpany’s cOnsOlidated suBsidiaRies as OF deceMBeR 31, 2013, aRe as FOllOWs: subsidiaries nature of the business location Ownership percentage indirect ownership Hyundai capital services, inc. Hyundai card co., ltd. (*) Financing korea ˝ Hyundai Rotem company (Hyundai Rotem) (*) Manufacturing Hyundai keFicO corporation (Hyundai keFicO) green air co., ltd. Hyundai auto electronics company ltd. Hyundai partecs co., ltd. Hyundai ngv tech co., ltd. Maintrans co., ltd. Jeonbuk Hyundai Motors Fc co., ltd. ˝ ˝ R&d Manufacturing engineering services Football club 56.47% 36.96% 43.36% 100.00% 51.00% Hyundai Rotem 51.00% 60.00% 56.00% 53.66% 80.00% Hyundai Rotem 80.00% 100.00% ˝ ˝ ˝ ˝ ˝ ˝ ˝ ˝ ˝ Hyundai Motor america (HMa) sales usa 100.00% Hyundai capital america (Hca) Financing Hyundai Motor Manufacturing alabama, llc (HMMa) Manufacturing Hyundai translead, inc. (Ht) ˝ stamped Metal american Research technology, inc. (sMaRti) Holding company stamped Metal american Research technology llc Manufacturing Hyundai america technical center, inc. (Hatci) R&d Rotem usa corporation Manufacturing ˝ ˝ ˝ ˝ ˝ ˝ ˝ 85.00% HMa 85.00% 100.00% HMa 100.00% 100.00% 72.45% HMa 72.45% 100.00% 100.00% sMaRti 100.00% 100.00% Hyundai Rotem 100.00% Hyundai auto canada corp. (Hac) sales canada 100.00% HMa 100.00% Hyundai auto canada captive insurance inc. (Hacci) insurance ˝ 100.00% Hac 100.00% Hyundai Motor india limited (HMi) Manufacturing india 100.00% Hyundai Motor india engineering private limited (HMie) R&d Hyundai capital india private limited (Hci) Financing Hyundai Motor Japan co., ltd. (HMJ) Hyundai Motor Japan R&d center inc. (HMJ R&d) Beijing Jingxian Motor safeguard service co., ltd. (BJMss) Beijing Jingxianronghua Motor sale co., ltd. Beijing Xinhuaxiaqiyuetong Motor chain co., ltd. sales R&d sales ˝ ˝ Hyundai Millennium (Beijing) Real estate devel- opment co., ltd. Real estate development Rotem equipments (Beijing) co., ltd. sales ˝ ˝ 100.00% HMi 100.00% 100.00% Hyundai capital services 100.00% Japan 100.00% ˝ 100.00% china 100.00% ˝ ˝ ˝ ˝ 100.00% 100.00% BJMss 100.00% ˝ 99.00% cMes 99.00% 100.00% Hyundai Rotem 100.00% FINANCIAL STATEMENTS76 HYUNDAI MOTOR COMPANY AND ITs sUBsIDIARIEs 77 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS as OF and FOR t He yeaRs ended deceMBeR 31, 2013 and 2012 subsidiaries nature of the business location Ownership percentage indirect ownership Woori Frontier private equity security investment trust no.5 investment korea 100.00% ktB safe private equity security investment trust no.78 ˝ autopia thirty-sixth asset securitization specialty company (*) Financing autopia Forty-second ~ Forty-seventh asset securitization specialty company (*) autopia Forty-ninth ~ Fifty-second asset securitization specialty company (*) HB the third securitization specialty company (*) HB the Fourth securitization specialty company (*) privia the second ~ third securitization specialty co., ltd. (*) Hyundai cHa Funding corporation Hyundai lease titling trust Hyundai Hk Funding, llc Hyundai Hk Funding two, llc Hyundai aBs Funding corporation Hyundai capital insurance services, llc Hk Real properties, llc Hyundai auto lease Offering, llc Hyundai Hk lease, llc ˝ ˝ ˝ ˝ ˝ ˝ ˝ ˝ ˝ ˝ ˝ ˝ ˝ ˝ Hyundai protection plan, inc. insurance Hyundai protection plan Florida, inc. Hyundai capital insurance company ˝ ˝ ˝ ˝ ˝ ˝ ˝ ˝ ˝ usa ˝ ˝ ˝ ˝ ˝ ˝ ˝ ˝ ˝ ˝ ˝ 100.00% 0.90% 0.90% 0.50% 0.90% 0.31% Hyundai capital services 0.90% ˝ Hyundai capital services 0.50% Hyundai capital services 0.90% Hyundai capital services 0.31% 0.90% Hyundai card 0.90% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% Hca 100.00% ˝ ˝ ˝ ˝ ˝ ˝ ˝ ˝ ˝ ˝ ˝ (*) the group is considered to have substantial control over the entities by virtue of an agreement with other investors or relationship with structured entities. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS as OF and FOR t He yeaRs ended deceMBeR 31, 2013 and 2012 subsidiaries nature of the business location Ownership percentage indirect ownership keFicO automotive systems (Beijing) co., ltd. Manufacturing china 100.00% Hyundai keFicO 100.00% keFicO vietnaM cOMpany liMited ˝ vietnam 100.00% ˝ Hyundai Motor company australia pty limited (HMca) sales australia 100.00% Hyundai Motor Manufacturing czech, s.r.o. (HMMc) Manufacturing czech 100.00% Hyundai Motor czech s.r.o (HMcZ) sales ˝ 100.00% Hyundai Motor europe gmbH (HMe) Marketing and sales germany 100.00% Hyundai Motor deutschland gmbH (HMd) Hyundai Motor europe technical center gmbH (HMetc) Hyundai Motor sport gmbH (HMsg) Hyundai capital europe gmbH sales R&d Marketing Financing ˝ ˝ ˝ ˝ 100.00% 100.00% 100.00% HMe 100.00% 100.00% Hyundai capital services 100.00% Hyundai Motor Manufacturing Rus llc (HMMR) Manufacturing Russia 70.00% Hyundai Motor commonwealth of independent states B.v (HMcis B.v) Hyundai Motor commonwealth of independent states (HMcis) Hyundai capital services limited liability company Hyundai assan Otomotiv sanayi ve ticaret a.s. (HaOsvt) Hyundai euRotem demiryolu araclarive ve ticaret a.s. Hyundai Motor uk limited (HMuk) Hyundai Motor company italy s.r.l (HMci) Hyundai Motor espana. s.l (HMes) Hyundai Motor France sas (HMF) Hyundai Motor poland sp. Zo.O (HMp) Hyundai Motor norway as (HMn) Hyundai Motor de Mexico (HMM) Holding company netherlands 100.00% HMMR 1.40% sales Russia 100.00% HMcis B.v 100.00% Financing ˝ 100.00% Hyundai capital europe 100.00% Manufacturing turkey 89.29% ˝ sales ˝ uk 50.50% Hyundai Rotem 50.50% 100.00% ˝ ˝ ˝ ˝ ˝ ˝ italy 100.00% spain 100.00% France 100.00% poland 100.00% norway 100.00% Mexico 100.00% Ht 0.01% Hyundai de Mexico, sa de c.v., (HyMeX) Manufacturing ˝ 99.99% Ht 99.99% Hyundai Rio vista, inc. Real estate development usa 100.00% Ht 100.00% Hyundai Motor Hungary (HMH) sales Hungary 100.00% Hyundai Motor Brasil Montadora de automoveis ltda (HMB) Hyundai capital Brasil servicos de assistencia Financeira ltda Manufacturing Brazil 100.00% Financing ˝ 100.00% Hyundai capital services 100.00% china Millennium corporations (cMes) Holding company cayman islands 59.60% Macquarie lion private equity security investment trust security no.45 shinhan Bnpp private corporate security investment trust no.27 Miraeasset triumph private equity security investment trust no.13 iBk panorama private equity security investment trust no.50 investment korea 100.00% ˝ ˝ ˝ ˝ ˝ ˝ 100.00% 100.00% 100.00% FINANCIAL STATEMENTS78 HYUNDAI MOTOR COMPANY AND ITs sUBsIDIARIEs 79 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS as OF and FOR t He yeaRs ended deceMBeR 31, 2013 and 2012 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS as OF and FOR t He yeaRs ended deceMBeR 31, 2013 and 2012 (2) cOndensed Financial pOsitiOn and Results OF OpeRatiOns OF tHe cOMpany’s MaJOR cOnsOlidated suBsidiaRies as OF and FOR tHe yeaR ended deceMBeR 31, 2013, aRe as FOllOWs: in millions of korean Won name of subsidiaries assets liabilities sales net income Hyundai capital services, inc. (*) ￦ 22,389,046 ￦ 19,136,092 ￦ 3,222,235 ￦ 391,427 Hyundai card co., ltd. (*) Hyundai Rotem company (*) Hyundai keFicO corporation (*) Hca (*) HMa HMMc HMMa HMi (*) HMMR HMe (*) HMcis Hac (*) HMca 11,520,878 4,274,897 894,606 9,154,730 2,485,374 481,021 24,787,736 22,762,022 6,382,182 3,050,239 3,031,145 1,904,660 1,285,326 1,130,991 923,966 908,415 687,001 3,756,767 1,480,611 1,294,805 968,802 606,948 1,084,122 583,367 497,106 541,674 2,527,479 3,299,370 1,666,971 4,403,250 16,592,560 5,450,412 7,385,302 4,736,902 2,750,925 5,531,337 3,742,285 3,145,661 2,272,191 163,210 126,076 98,432 285,406 490,250 374,303 479,606 220,593 209,710 4,164 96,107 73,997 40,010 (*) Based on the subsidiary’s consolidated financial statements. cOndensed Financial pOsitiOn and Results OF OpeRatiOns OF tHe cOMpany’s MaJOR cOnsOlidated suBsidiaRies as OF and FOR tHe yeaR ended deceMBeR 31, 2012, WeRe as FOllOWs: in millions of korean Won name of subsidiaries assets liabilities sales net income Hyundai capital services, inc. (*) ￦ 21,907,264 ￦ 18,867,513 ￦ 3,541,681 ￦ 436,663 Hyundai card co., ltd. (*) Hyundai Rotem company (*) Hyundai keFicO corporation (*) Hca (*) HMa HMMc HMMa HMi (*) HMMR HMe (*) HMcis Hac (*) HMca 11,252,264 3,670,360 946,741 9,059,973 2,487,134 631,845 20,262,576 18,485,874 6,062,965 2,743,127 2,640,184 2,233,585 1,429,631 1,165,291 876,788 895,104 742,880 3,478,837 1,548,297 1,186,305 1,253,787 790,793 1,123,765 601,754 468,638 590,751 2,525,635 3,116,629 1,524,399 2,817,208 17,106,517 5,310,664 6,992,135 5,096,544 2,854,886 6,042,851 3,900,218 3,426,476 2,325,213 194,299 99,384 71,950 256,454 469,676 399,834 420,798 226,660 263,061 2,267 219,958 87,167 28,334 (*) Based on the subsidiary’s consolidated financial statements. (3) tHe Financial stateMents OF all suBsidiaRies, WHicH aRe used in tHe pRepaRatiOn OF tHe cOnsOlidated Financial stateMents, aRe pRepaRed FOR tHe saMe RepORting peRiOds as tHe cOMpany’s. (4) suMMaRiZed casH FlOWs OF nOn-WHOlly OWned suBsidiaRies tHat Have MateRial nOn- cOntROlling inteRests tO tHe gROup as OF deceMBeR 31, 2013, aRe as FOllOWs: in millions of korean Won description Hyundai capital services, inc. Hyundai card co., ltd. Hyundai Rotem company cash flows from operating activities cash flows from investing activities cash flows from financing activities effect of exchange rate changes on cash and cash equivalents ￦ (140,669) ￦ 103,169 ￦ (408,594) 69,086 272,041 (20) (105,453) 176,192 - (24,474) 440,503 (4,183) ￦ 3,252 net increase in cash and cash equivalents ￦ 200,438 ￦ 173,908 suMMaRiZed casH FlOWs OF nOn-WHOlly OWned suBsidiaRies tHat Had MateRial nOn- cOntROlling inteRests tO tHe gROup as OF deceMBeR 31, 2012, WeRe as FOllOWs: description Hyundai capital services, inc. Hyundai card co., ltd. Hyundai Rotem company in millions of korean Won cash flows from operating activities cash flows from investing activities cash flows from financing activities effect of exchange rate changes on cash and cash equivalents ￦ 449,551 (301,935) (300,881) (6) ￦ 57,047 (94,867) (655) - ￦ 24,706 (124,698) 24,212 (4,227) net increase in cash and cash equivalents ￦ (153,271) ￦ (38,475) ￦ (80,007) (5) details OF nOn-WHOlly OWned suBsidiaRies OF tHe cOMpany tHat Have MateRial nOn- cOntROlling inteRests as OF deceMBeR 31, 2013, aRe as FOllOWs: in millions of korean Won description Hyundai capital services, inc. Hyundai card co., ltd. Hyundai Rotem company Ownership percentage of non-controlling interests 43.53% 63.04% 56.64% non-controlling interests ￦ 1,415,812 ￦ 1,491,715 ￦ 1,088,548 profit attributable to non-controlling interests dividends paid to non-controlling interests 170,307 78,365 105,461 - 62,686 155 details OF nOn-WHOlly OWned suBsidiaRies OF tHe cOMpany tHat Had MateRial nOn- cOntROlling inteRests as OF deceMBeR 31, 2012, WeRe as FOllOWs: description Hyundai capital services, inc. Hyundai card co., ltd. Hyundai Rotem company in millions of korean Won Ownership percentage of non-controlling interests 43.53% 68.48% 42.36% non-controlling interests ￦ 1,324,355 ￦ 1,502,917 ￦ 452,698 profit attributable to non-controlling interests dividends paid to non-controlling interests 190,783 43,224 142,532 - 48,847 - (6) Financial suppORt pROvided tO cOnsOlidated stRuctuRed entities as of december 31, 2013, Hyundai card co., ltd. and Hyundai capital services, inc., subsidiaries of the company, have agreements which provide counterparties with rights to claim themselves in the event of default on the derivatives relating to asset-backed securities issued by consolidated structured entities, privia the second and the third securitization specialty co., ltd, autopia Forty-Fourth , Forty-Fifth, Forty-sixth, Forty-ninth and Fifty-second asset securitization specialty company. FINANCIAL STATEMENTS80 HYUNDAI MOTOR COMPANY AND ITs sUBsIDIARIEs 81 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS as OF and FOR t He yeaRs ended deceMBeR 31, 2013 and 2012 (7) tHe natuRe and tHe Risks assOciated WitH inteRests in uncOnsOlidated stRuctuRed entities 1) Nature of interests in an unconsolidated structured entity, which belongs to Hyundai Capital Services, Inc., as of December 31, 2013, are as follows: name of the company nature Purpose in millions of korean Won nature of business Method of funding total assets autopia Fifty-third asset securitization specialty company asset securitization spc Fund raising through asset-securitization Fund collection corporate Bond and others ￦ 396,497 2) risks associated with interests in an unconsolidated structured entity, which belongs to Hyundai Capital Services, Inc., as of December 31, 2013, are as follows: name of the company interest in the structured entity Financial support provided to the structured entity account Book value method purpose in millions of korean Won Maximum amount of exposure to loss of the structured entity autopia Fifty-third asset securitization specialty company aFs financial assets ￦ 30,223 Mezzanine debt credit facility ￦ 30,223 (8) signiFicant RestRictiOns OF tHe suBsidiaRies 1) As of December 31, 2013, Hyundai Card Co., Ltd. and Hyundai Capital Services, Inc., subsidiaries of the Company have significant restrictions that require them to obtain consent from directors appointed by non-controlling shareholders in the event of merger, investment in stocks, transfer of the whole or a significant part of assets, borrowing, guar- antee or disposal of assets beyond a certain amount, acquirement of treasury stock, payment of dividend and so on. 2) As of December 31, 2013, Hyundai rotem Company, subsidiary of the Company, is required to obtain consent from directors appointed by non-controlling shareholders in the event of significant change in the capital structure of the entity, excluding transactions according to the business plan or the regulation of the Board of Directors, such as issue, disposal, repurchase or retirement of stocks or options, increase or decrease of capital, and so on. (9) cHanges in cOnsOlidated suBsidiaRies subsidiaries newly included in and excluded from consolidation for the year ended december 31, 2013, are as follows: changes name of subsidiaries included Hyundai Motor de Mexico (HMM) description acquisition ˝ ˝ ˝ ˝ ˝ ˝ ˝ ˝ ˝ ˝ ˝ Hyundai capital Brasil servicos d e assistencia Financeira ltda Macquarie lion private equity security investment trust security no.45 shinhan Bnpp private corporate security investment t rust no.27 Miraeasset triumph private equity security investment trust no.13 iBk panorama private equity security investment trust no.50 Woori Frontier private equity security investment trust no.5 ktB safe private equity security investment t rust no.78 autopia Fiftieth asset securitization specialty company autopia Fifty-First asset securitization specialty company autopia Fifty-second asset securitization specialty company HB the Fourth securitization specialty company ˝ ˝ ˝ ˝ ˝ ˝ ˝ ˝ ˝ ˝ ˝ excluded autopia thirty-Fifth asset securitization specialty company dissolution ˝ ˝ ˝ ˝ ˝ ˝ autopia thirty-seventh asset securitization specialty company autopia thirty-ninth securitization specialty company autopia Fortieth asset securitization specialty company Hyundai Bc Funding corporation Hyundai Hk Funding One, llc Hyundai auto lease Funding, llc ˝ ˝ ˝ ˝ ˝ ˝ (10) incRease in tHe cOMpany’s OWneRsHip inteRests in One OF its suBsidiaRy and tHe cOnseQuent eFFects On tHe eQuity attRiButaBle tO tHe OWneRs OF tHe paRent cOMpany FOR tHe yeaR ended deceMBeR 31, 2013, is as FOllOWs: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS as OF and FOR t He yeaRs Ownership percentage before transaction description ended deceMBeR 31, 2013 Ownership percentage after transaction and 2012 purchase consideration changes in non-controlling interests changes in capital surplus in millions of korean Won Hyundai card (*) 31.52% 36.96% ￦ (175,275) (121,676) (53,599) (*) the company acquired 5.44% of shares of Hyundai card co., ltd., a subsidiary of the company, from Hyundai steel company, an affiliate by Monopoly Regulation and Fair trade act of the Republic of k orea, during the year ended d ecember 31, 2013. (11) decRease in tHe cOMpany’s OWneRsHip inteRests in One OF its suBsidiaRy and tHe cOnseQuent eFFects On tHe eQuity attRiButaBle tO tHe OWneRs OF tHe paRent cOMpany FOR tHe yeaR ended deceMBeR 31, 2013, is as FOllOWs: description Hyundai Rotem company (*) in millions of korean Won Ownership percentage before transaction Ownership percentage after transaction increase in paid-in capital by public offering decrease of financial liabilities by abandonment of put option changes in non-controlling interests changes in capital surplus 57.64% 43.36% ￦ 476,493 120,011 571,225 25,279 (*) the ownership percentage of the company in its subsidiary decreased as a result of not participating in a public offering that occurred during the year ended december 31, 2013. (12) in 2013, HaOsvt, a suBsidiaRy OF tHe cOMpany, cHanged its FunctiOnal cuRRency FROM usd tO euR since it cOnsideRed tHat tHe cuRRency in tHe pRiMaRy ecOnOMic enviROnMent in WHicH tHe entity OpeRates Has cHanged. 2. suMMaRY OF signiFicant accOunting POlicies: the company maintains its official accounting records in korean Won and prepares its consolidated financial statements in conformity with korean statutory requirements and korean international Financial Reporting standards (“k-iFRs”), in korean language (Hangul). accordingly, these consolidated financial statements are intended for use by those who are informed about k-iFRs and korean practices. the accompanying consolidated financial statements have been condensed, restructured and translated into english with certain expanded descriptions from korean language consolidated financial statements. certain information included in korean language consolidated financial statements, but not required for a fair presentation of the group’s consolidated statements of financial position, income, comprehensive income, changes in equity or cash flows, is not presented in the accompanying consolidated financial statements. (1) Basis OF cOnsOlidated Financial stateMents pRepaRatiOn the group has prepared the consolidated financial statements in accordance with k-iFRs for the annual periods beginning on January 1, 2011. the significant accounting policies used for the preparation of the consolidated financial statements are summarized below. these accounting policies are consistent with those applied to the consolidated financial statements for the year ended december 31, 2012, except for the adoption effect of the new accounting standards and interpretations described below. FINANCIAL STATEMENTS82 HYUNDAI MOTOR COMPANY AND ITs sUBsIDIARIEs 83 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS as OF and FOR t He yeaRs ended deceMBeR 31, 2013 and 2012 1) New and revised standards that have been applied from the year beginning on January 1, 2013, are as follows: - k-iFRs 1001 (amendment): ‘presentation of Financial statements’ the amendments to k-iFRs 1001 require items of other comprehensive income to be grouped into two categories in the other comprehensive income section: (a) items that will not be reclassified subsequently to profit or loss and (b) items that may be reclassified subsequently to profit or loss. Other than this presentation change, the application of the amendments to k-iFRs 1001 does not result in any impact on the group’s financial position and financial performance. the amendments have been applied retrospectively for the comparative period, and hence the presentation of items of other comprehensive income has been modified to reflect the changes. - k-iFRs 1019 (amendment): ‘employee Benefits’ the amendments to k-iFRs 1019 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 interest cost and expected return on plan assets used in the previous version of k-iFRs 1019 are replaced with a ‘net interest’ amount under k-iFRs 1019 (as revised in 2011), which is calculated by applying the discount rate to the net defined benefit liabilities or assets. the group was required to apply the impact of the amendment retrospectively, and hence the consolidated financial statement for the year ended december 31, 2012, has been restated accordingly. as a result of the change in accounting policies, for the year ended december 31, 2012, cost of sales decreased by ￦4,872 million and selling and administrative expenses, gain on investments in joint ventures and associates and income tax expense increased by ￦1,218 million, ￦1,658 million, and ￦457 million, respectively. - k-iFRs 1107 (amendment): ‘Financial instruments: disclosures’ the amendments to k-iFRs 1107 are mainly focusing on presentation of the offset between financial assets and financial liabilities and require the group to disclose information about rights of offset and related arrangements for financial instruments under an enforceable master netting agreement or similar arrangement, irrespective of whether they would meet the offsetting criteria under k-iFRs 1032. the amendments have been applied retrospectively for the comparative period, and hence the information about the offset between financial assets and financial liabilities has been disclosed to reflect the amendment. - k-iFRs 1110 (enactment): ‘consolidated Financial statements’ k-iFRs 1110 establishes a single basis for consolidation. under k-iFRs 1110, an investor controls an investee when the investor 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 effect of the enactments is not significant on the group’s consolidated financial statements. - k-iFRs 1111 (enactment): ‘Joint arrangements’ k-iFRs 1111 deals with how a joint arrangement of which two or more parties have joint control should be classified either as a joint operation or a joint venture. the classification of joint arrangements under k-iFRs 1111 is determined based on the rights and obligations of parties to the joint arrangements. if the group is a joint operator, the group is to recognize assets, liabilities, revenues and expenses in relation to its interest in a joint operation and if the group is a joint venturers, the group is to account for that investment using the equity method. the effect of the enactments is not significant on the group’s consolidated financial statements. - k-iFRs 1112 (enactment): ‘disclosure of interests in Other entities’ k-iFRs 1112 is a disclosure standard and is applicable to entities that have interests in subsidiaries, joint arrangements, associates, or unconsolidated structured entities. the effect of the enactments is not significant on the group’s consolidated financial statements. - k-iFRs 1113 (enactment): ‘Fair value Measurement’ k-iFRs 1113 establishes a single source of guidance for fair value measurements and disclosure 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 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is measured by taking into account the characteristics of the asset or liability that market participants would take when pricing the asset or liability at the measurement date. a fair value measurement under k-iFRs 1113 requires the group to determine the particular asset or liability that is subject of the measurement, the principal or most advantageous market for the asset or liability, and the valuation techniques appropriate for the measurement. in addition, k-iFRs 1113 requires extensive disclosures about fair value measurements. the effect of the enactments is not significant on the group’s consolidated financial statements. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS as OF and FOR t He yeaRs ended deceMBeR 31, 2013 and 2012 2) New and revised standards that have been issued but are not yet effective for the year beginning on January 1, 2013, and that have not been applied earlier by the group are as follows: - k-iFRs 1032 (amendment): ‘Financial instruments: presentation’ the amendments to k-iFRs 1032 clarify existing application issue relating to the offset of financial assets and financial liabilities requirements. specifically, the amendments clarify the meaning of ‘currently has a legally enforceable right of set-off’ and ‘simultaneous realization and settlement’. the group’s right to offset must not be conditional on the occurrence of future events but enforceable anytime during the contract periods, during the ordinary course of business with counterparty, a default of counterparty and master netting agreement or in some forms of non- recourse debt. the amendments to k-iFRs 1032 are effective for annual periods beginning on or after January 1, 2014. - k-iFRs 1039 (amendment): ‘Financial instruments: Recognition and Measurement’ the amendments to k-iFRs 1039 allows the continuation of hedge accounting when a derivative is novated to a clearing counterparty or entity acting in a similar capacity and certain conditions are met. the amendment to k-iFRs 1039 is effective for annual periods beginning on or after January 1, 2014. - k-iFRs interpretation 2121 (enactment): ‘levies’ k-iFRs 2121 defines a levy as a payment to a government for which an entity receives no specific goods or services. the interpretation requires that a liability is recognized when the obligating event occurs. the obligating event is the activity that triggers payment of the levy and is typically specified in the legislation that imposes the levy. the interpretations are effective for annual periods beginning on or after January 1, 2014. the group does not anticipate that the above mentioned enactments and amendments will have any significant effect on the group’s consolidated financial statements. (2) Basis OF MeasuReMent the consolidated financial statements have been prepared on the historical cost basis except otherwise stated in the accounting policies below. Historical cost is usually measured at the fair value of the consideration given to acquire the assets. (3) Basis OF cOnsOlidatiOn the consolidated financial statements incorporate the financial statements of the company and entities (including special purpose entities) controlled by the company (or its subsidiaries). control is achieved when the company: • has power over the investee; • is exposed, or has rights, to variable returns from its involvement with the investee; and • has the ability to use its power to affect its returns. the company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above. When the company has less than a majority of the voting rights of an investee, it has power over the investee when the voting rights are sufficient to give it the practical ability to direct the relevant activities of the investee unilaterally. the company considers all relevant facts and circumstances in assessing whether or not the company’s voting rights in an investee are sufficient to give it power, including: • the size of the company’s holding of voting rights relative to the size and dispersion of holdings of the other vote holders; • potential voting rights held by the company, other vote holders or other parties; • rights arising from other contractual arrangements; and • any additional facts and circumstances that indicate that the company has, or does not have, the current ability to direct the relevant activities at the time that decisions need to be made, including voting patterns at previous shareholders’ meetings. income and expenses of subsidiaries acquired or disposed of during the period are included in the consolidated statement of comprehensive income from the effective date of acquisition and up to the effective date of disposal, as appropriate. When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the company. all intra-group transactions, balances, income and expenses are eliminated in full on consolidation. non-controlling interests are presented in the consolidated statement of financial position within equity, separately from the equity of the owners of the company. the carrying amount of non-controlling interests consists of the amount of those non-controlling interests at the initial recognition and the changes in shares of the non-controlling interests in equity since the date of the acquisition. total comprehensive income is attributed to the owners of the company and to the non-controlling interests even if the non-controlling interest has a deficit balance. FINANCIAL STATEMENTS 84 HYUNDAI MOTOR COMPANY AND ITs sUBsIDIARIEs 85 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS as OF and FOR t He yeaRs ended deceMBeR 31, 2013 and 2012 changes in the group’s ownership interests in subsidiaries, without a loss of control, are accounted for as equity transactions. the carrying amounts of the group’s interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. any difference between the amount by which the non- controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity and attributed to owners of the group. When the group loses control of a subsidiary, the profit or loss on disposal is calculated as the difference between (i) the aggregate of the fair value of the consideration received and the fair value of any retained interest and (ii) the previous carrying amount of the assets (including goodwill), liabilities of the subsidiary and any non-controlling interests. When assets of the subsidiary are carried at revalued amounts or fair values and the related cumulative gain or loss has been recognized in other comprehensive income and accumulated in equity, the amounts previously recognized in other comprehensive income and accumulated in equity are accounted for as if the group had directly disposed of the relevant assets (i.e. reclassified to profit or loss or transferred directly to retained earnings as specified by applicable k-iFRss). the fair value of any investment retained in the former subsidiary at the date when control is lost is regarded as the fair value on initial recognition for subsequent accounting under k-iFRs 1039 Financial instruments: Recognition and Measurement or, when applicable, the cost on initial recognition of an investment in an associate or a jointly controlled entity. (4) Business cOMBinatiOn acquisitions of businesses are accounted for using the acquisition method. the consideration transferred in a business combination is measured at fair value, which is calculated as the sum of the acquisition-date fair values of the assets transferred by the group, liabilities incurred by the group to the former owners of the acquiree and the equity interests issued by the group in exchange for control of the acquiree. the consideration includes any asset or liability resulting from a contingent consideration arrangement and is measured at fair value. acquisition- related costs are recognized in profit or loss as incurred. When a business combination is achieved in stages, the group’s previously held equity interest in the acquiree is remeasured at its fair value at the acquisition date (i.e. the date when the group obtains control) and the resulting gain or loss, if any, is recognized in profit or loss. prior to the acquisition date, the amount resulting from changes in the value of its equity interest in the acquiree that have previously been recognized in other comprehensive income are reclassified to profit or loss where such treatment would be appropriate if that interest were directly disposed of. (5) Revenue RecOgnitiOn 1) Sale of goods the group recognizes revenue from sale of goods when all of the following conditions are satisfied: • the group has transferred to the buyer the significant risks and rewards of ownership of the goods; the amount of revenue can be measured reliably; • it is probable that the economic benefits associated with the transaction will flow to the group the group grants award credits which the customers can redeem for awards such as free or discounted goods or services. the fair value of the award credits is estimated by considering the fair value of the goods granted, the expected rate and period of collection. the fair value of the consideration received or receivable from the customer is allocated to award credits and sales transaction. the consideration allocated to the award credits is deferred and recognized as revenue when the award credits are redeemed and the group’s obligations have been fulfilled. 2) rendering of services the group recognizes revenue from rendering of services based on the percentage of completion when the amount of revenue can be measured reliably and it is probable that the economic benefits associated with the transaction will flow to the group. 3) royalties the group recognizes revenue from royalties on an accrual basis in accordance with the substance of the relevant agreement. 4) Dividend and interest income Revenues arising from dividends are recognized when the right to receive payment is established. interest income is recognized using the effective interest method as time passes. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS as OF and FOR t He yeaRs ended deceMBeR 31, 2013 and 2012 5) Construction contracts Where the outcome of a construction contract can be estimated reliably, the contract revenue and contract costs associated with the construction contract are recognized as revenue and expenses, respectively by reference to the stage of completion of the contract activity at the end of reporting period. the percentage of completion of a contract activity is reliably measured based on the proportion of contract costs incurred for work performed to date relative to the estimated total contract costs, by surveys of work performed or by completion of a physical proportion of the contract work. variations in contract work, claim and incentive payments are included to the extent that the amount can be measured reliably and its receipt is considered probable. Where the outcome of a construction contract cannot be estimated reliably, contract revenue is recognized to the extent of contract costs incurred that it is probable will be recoverable. contract costs are recognized as expenses in the period in which they are incurred. When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognized as an expense immediately. (6) FOReign cuRRency tRanslatiOn the individual financial statements of each entity in the group are measured and presented in the currency of the primary economic environment in which the entity operates (its functional currency). in preparing the financial statements of the individual entities, transactions occurring in currencies other than their functional currency (foreign currencies) are recorded using the exchange rate on the dates of the transactions. at the end of each reporting period, monetary items denominated in foreign currencies are translated using the exchange rate at the reporting period. non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. exchange differences resulting from settlement of assets or liabilities and translation of monetary items denominated in foreign currencies are recognized in profit or loss in the period in which they arise except for some exceptions. For the purpose of presenting the consolidated financial statements, assets and liabilities in the group’s foreign operations are translated into Won, using the exchange rates at the end of reporting period. income and expense items are translated at the average exchange rate for the period, unless the exchange rate during the period has significantly fluctuated, in which case the exchange rates at the dates of the transactions are used. the exchange differences arising, if any, are recognized in equity as other comprehensive income. On the disposal of a foreign operation, the cumulative amount of the exchange differences relating to that foreign operation is reclassified from equity to profit or loss when the gain or loss on disposal is recognized. any goodwill arising on the acquisition of a foreign operation and any fair value adjustments to the carrying amounts of assets and liabilities arising on the acquisition of that foreign operation are treated as assets and liabilities of the foreign operation and translated at the exchange rate at the end of reporting period. Foreign exchange gains or losses are classified in finance income (expenses) or other income (expenses) by the na- ture of the transaction or event. (7) Financial assets the group classifies financial assets into the following specified categories: financial assets at fair value through profit or loss (“Fvtpl”), held-to-maturity (“HtM”) financial assets, loans and receivables and available-for-sale (“aFs”) financial assets. the classification depends on the nature and purpose of the financial assets and is deter- mined at the time of initial recognition. 1) Financial assets at FVTpL Fvtpl includes financial assets classified as held for trading and financial assets designated at Fvtpl upon initial recognition. a financial asset is classified as Fvtpl, if it has been acquired principally for the purpose of selling or repurchasing in near term. all derivative assets, except for derivatives that are designated and effective hedging instruments, are classified as held for trading financial assets which are measured at fair value through profit or loss. Financial assets at Fvtpl are measured at fair value, with any gains or losses arising on remeasurement recognized in profit or loss. 2) HTM financial assets HtM financial assets are non-derivative financial instruments with fixed or determinable payments and fixed maturity that the group has the positive intent and ability to hold to maturity. HtM financial assets are presented at amortized cost using the effective interest rate less accumulated impairment loss, and interest income is recognized using the effective interest rate method. FINANCIAL STATEMENTS 86 HYUNDAI MOTOR COMPANY AND ITs sUBsIDIARIEs 87 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS as OF and FOR t He yeaRs ended deceMBeR 31, 2013 and 2012 3) Loans and receivables loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market, and measured at amortized cost. interest income is recognized using the effective interest rate method except for short-term receivables for which the discount effect is not material. 4) AFS financial assets aFs financial assets are those non-derivative financial assets that are designated as aFs or are not classified as loans and receivables, HtM financial assets nor financial assets at Fvtpl. aFs financial assets are measured at fair value. However, investments in equity instruments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured are measured at cost. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS as OF and FOR t He yeaRs ended deceMBeR 31, 2013 and 2012 a gain or loss on changes in fair value of aFs financial assets is recognized in other comprehensive income, except for impairment loss, interest calculated using the effective interest method and foreign exchange gains and losses on monetary assets. accumulated other comprehensive income is reclassified to profit or loss from equity at the time of impairment recognition or elimination of related financial assets. dividends on an aFs equity instrument are recognized in profit or loss when the group’s right to receive payment is established. (8) iMpaiRMent OF Financial assets 1) Financial assets carried at amortized cost the group assesses at the end of each reporting period whether there is any objective evidence that a financial asset or group of financial assets is impaired. if any such evidence exists, the group determines the amount of any impairment loss. 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, excluding future credit losses that have not been incurred, discounted at the financial asset’s original effective interest rate computed at initial recognition. the carrying amount of the asset is reduced either directly or through use of an allowance account and the amount of the loss is recognized in profit or loss. certain financial assets such as trade receivables and financial services receivables that are assessed not to be impaired individually are, in addition, assessed for impairment on a collective basis. the objective evidence of impairment for a portfolio of receivables could include the group’s past experience of collecting payments, an increase in the number of delayed payments in the portfolio past the average credit period, as well as observable changes in national or local economic conditions that correlate with default on receivables. 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 previously recognized impairment loss is reversed and recognized in profit or loss. the reversal shall not result in a carrying amount of the financial asset that exceeds what the amortized cost would have been had the impairment not been recognized at the date the impairment is reversed. 2) Financial assets carried at cost the amount of the impairment loss on financial assets that are carried at cost because their fair value cannot be reliably measured is measured as the difference between the carrying amount of the financial asset and the present value of estimated future cash flows discounted at the current market rate of return for a similar financial asset. such impairment losses are not reversed. 3) AFS financial assets if there is objective evidence of impairment on aFs financial assets, the cumulative loss that has been recognized in other comprehensive income less any impairment loss previously recognized in profit or loss is reclassified from equity to profit or loss. impairment losses recognized in profit or loss for investments in equity instruments classified as aFs are not reversed through profit or loss. Meanwhile, if, in a subsequent period, the fair value of a debt instrument classified as aFs 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 through profit or loss. (9) deRecOgnitiOn OF Financial assets the group derecognizes a financial asset when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. if the group neither retains substantially all the risks and rewards of ownership nor transfers and continues to control the transferred asset, the group recognizes its retained interest in the asset and associated liability for amounts it may have to pay. if the group retains substantially all the risks and rewards of ownership of a transferred financial asset, the group continues to recognize the financial asset and also recognizes a collateralized borrowing for the proceeds received. (10) inventORy inventory is measured at the lower of cost or net realizable value. inventory cost including the fixed and variable manufacturing overhead cost, is calculated, using the moving average method except for the cost for inventory in transit which is determined by the identified cost method. (11) investMents in assOciates and JOint ventuRes an associate is an entity over which the group has significant influence. significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies. a joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the joint arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require unanimous consent of the parties sharing control. the investment in an associate or a joint venture is initially recognized at cost and accounted for using the equity method. under the equity method, an investment in an associate or a joint venture is initially recognized in the consolidated statement of financial position at cost and adjusted thereafter to recognize the group’s share of the profit or loss and other comprehensive income of the associate or the joint venture. When the group’s share of losses of an associate or a joint venture exceeds the group’s interest in that associate or joint venture (which includes any long-term interests that, in substance, form part of the group’s net investment in the associate or the joint venture), the group discontinues recognizing its share of further losses. additional losses are recognized only to the extent that the group has incurred legal or constructive obligations or made payments on behalf of the associate or the joint venture. any excess of the cost of acquisition over the group’s share of the net fair value of the identifiable assets, liabilities and contingent liabilities of an associate or a joint venture recognized at the date of acquisition is recognized as goodwill, which is included within the carrying amount of the investment. the entire carrying amount of the investment including goodwill is tested for impairment and presented at the amount less accumulated impairment losses. any excess of the group’s share of the net fair value of the identifiable assets, liabilities and contingent liabilities over the cost of acquisition, after reassessment, is recognized immediately in profit or loss. upon disposal of an associate or a joint venture that results in the group losing significant influence over that associate or joint venture, any retained investment is measured at fair value at that date and the fair value is regarded as its fair value on initial recognition as a financial asset in accordance with k-iFRs 1039. the difference between the previous carrying amount of the associate or joint venture attributable to the retained interest and its fair value is included in the determination of the gain or loss on disposal of the associate or joint venture. in addition, the group accounts for all amounts previously recognized in other comprehensive income in relation to that associate or joint venture on the same basis we would be required if that associate or joint venture had directly disposed of the related assets or liabilities. therefore, if a gain or loss previously recognized in other comprehensive income by that associate or joint venture would be reclassified to profit or loss on the disposal of the related assets or liabilities, the group reclassifies the gain or loss from equity to profit or loss (as reclassification adjustment) when it loses significant influence over that associate or joint venture. When the group reduces its ownership interest in an associate or a joint venture but the group continues to use the equity method, the group reclassifies to profit or loss the proportion of the gain or loss that had previously been recognized in other comprehensive income relating to that reduction in ownership interest if that gain or loss would be reclassified to profit or loss on the disposal of the related assets or liabilities. in addition, the group applies k-iFRs 1105 to a portion of investment in an associate or a joint venture that meets the criteria to be classified as held for sale. the group continues to use the equity method when an investment in an associate becomes an investment in a joint venture or an investment in a joint venture becomes an investment in an associate. there is no remeasurement to fair value upon such changes in ownership interests. unrealized gains from transactions between the group and its associates or joint ventures are eliminated up to the shares in associate(joint venture) stocks. unrealized losses are also eliminated unless evidence of impairment in assets transferred is produced. if the accounting policy of associates or joint ventures differs from the group, financial statements are adjusted accordingly before applying equity method of accounting. if the group’s ownership interest in an associate or a joint venture is reduced, but the significant influence is continued, the group reclassifies to profit or loss only a proportionate amount of the gain or loss previously recognized in other comprehensive income. FINANCIAL STATEMENTS 88 HYUNDAI MOTOR COMPANY AND ITs sUBsIDIARIEs 89 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS as OF and FOR t He yeaRs ended deceMBeR 31, 2013 and 2012 (12) pROpeRty, plant and eQuipMent property, plant and equipment is to be recognized if, and only if it is probable that future economic benefits associated with the asset will flow to the group, and the cost of the asset can be measured reliably. after the initial recognition, property, plant and equipment is stated at cost less accumulated depreciation and accumulated impairment losses. the cost includes any cost directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management and the initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located. in addition, in case the recognition criteria are met, the subsequent costs will be added to the carrying amount of the asset or recognized as a separate asset, and the carrying amount of what was replaced is derecognized. depreciation is computed using the straight-line method based on the estimated useful lives of the assets as follows: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS as OF and FOR t He yeaRs ended deceMBeR 31, 2013 and 2012 Buildings and structures Machinery and equipment vehicles dies, molds and tools Office equipment Other estimated useful lives (years) 2 – 50 2 – 25 3 – 20 2 – 15 2 – 20 2 – 30 the group reviews the depreciation method, the estimated useful lives and residual values of property, plant and equipment at the end of each annual reporting period. if expectations differ from previous estimates, the changes are accounted for as a change in accounting estimate. (13) investMent pROpeRty investment property is property held to earn rentals or for capital appreciation or both. an investment property is mea- sured initially at its cost and transaction costs are included in the initial measurement. after initial recognition, the book value of investment property is presented at the cost less accumulated depreciation and accumulated impairment losses. subsequent costs are recognized as the carrying amount of the asset when, and only when it is probable that future economic benefits associated with the asset will flow to the group, and the cost of the asset can be measured reli- ably, or recognized as a separate asset if appropriate. the carrying amount of what was replaced is derecognized. land is not depreciated, and other investment properties are depreciated using the straight-line method over the period from 20 to 50 years. the group reviews the depreciation method, the estimated useful lives and residual values at the end of each annual reporting period. if expectations differ from previous estimates, the changes are accounted for as a change in accounting estimate. (14) intangiBle assets 1) goodwill goodwill arising from a business combination is recognized as an asset at the time of obtaining control (the acquisition- date). goodwill is measured as the excess of the aggregate of the consideration transferred, the amount of any non- controlling interest in the acquiree, and the acquisition-date fair value of the group’s previously held equity interest in the acquiree over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. if, after reassessment, the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed exceeds the aggregate of the consideration transferred, the amount of any non-controlling interest in the acquiree, and the acquisition-date fair value of the group’s previously held equity interest in the acquiree, the excess is recognized immediately in profit or loss as a bargain purchase gain. goodwill is not amortized but tested for impairment at least annually. For purposes of impairment tests, goodwill is allocated to those cash generating units (“cgu”) of the group expected to have synergy effect from the business combination. cgu that goodwill has been allocated is tested for impairment every year or when an event occurs that indicates impairment. if recoverable amount of a cgu is less than its carrying amount, the impairment will first decrease the goodwill allocated to that cgu and the remaining impairment will be allocated among other assets relative to its carrying value. impairment recognized for goodwill may not be reversed. When disposing a subsidiary, related goodwill will be included in gain or loss from disposal. 2) Development costs the expenditure on research is recognized as an expense when it is incurred. the expenditure on development is recognized as an intangible asset if, and only if, all of the following can be demonstrated: • the technical feasibility of completing the intangible asset so that it will be available for use or sale; • the intention to complete the intangible asset and use or sell it; • the ability to use or sell the intangible asset; • how the intangible asset will generate probable future economic benefits; • the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and • the ability to measure reliably the expenditure attributable to the intangible asset during its development. the cost of an internally generated intangible asset is the sum of the expenditure incurred from the date when the intangible asset first meets the recognition criteria above and the carrying amount of intangible assets is presented as the acquisition cost less accumulated amortization and accumulated impairment losses. 3) Intangible assets acquired separately intangible assets that are acquired separately are carried at cost less accumulated amortization and accumulated impairment losses. amortization is recognized using the straight-line method based on the estimated useful lives. the group reviews the estimated useful life and amortization method at the end of each anuual reporting period. if expectations differ from previous estimates, the changes are accounted for as a change in accounting estimate. amortization is computed using the straight line method based on the estimated useful lives of the assets as follows: development costs industrial property rights software Other estimated useful lives (years) 3 – 6 4 – 13 2 – 10 2 – 40 club membership included in other intangible assets is deemed to have an indefinite useful life as there is no foresee- able limit on the period over which the membership is expected to generate economic benefit for the group, therefore the group does not amortize it. (15) iMpaiRMent OF tangiBle and intangiBle assets the group assesses at the end of each reporting period whether there is any indication that an asset may be impaired. if any such indication exists, the group estimates the recoverable amount of the asset to determine the extent of the impairment loss. Recoverable amount is the higher of fair value less costs to sell and value in use. if the cash inflow of individual asset occurs separately from other assets or group of assets, the recoverable amount is measured for that individual asset; otherwise, it is measured for each cgu to which the asset belongs. except for goodwill, all non-financial assets that have incurred impairment are tested for reversal of impairment at the end of each reporting period. intangible assets with indefinite useful lives or intangible assets not yet available for use are not amortized but tested for impairment at least annually. (16) nOn-cuRRent assets classiFied as Held FOR sale the group classifies a non-current asset (or disposal group) as held for sale if its carrying amount will be recovered principally through a sale transaction rather than through continuing use. For this to be the case, the asset (or disposal group) must be available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets (or disposal groups) and its sale must be highly probable. the management must be committed to a plan to sell the asset (or disposal group), and the sale should be expected to qualify for recognition as a completed sale within one year from the date of classification. non-current assets (or disposal group) classified as held for sale are measured at the lower of their carrying amount and fair value less costs to sell. FINANCIAL STATEMENTS 90 HYUNDAI MOTOR COMPANY AND ITs sUBsIDIARIEs 91 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS as OF and FOR t He yeaRs ended deceMBeR 31, 2013 and 2012 (17) lease leases are classified as finance leases when the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. all other leases are classified as operating leases. 1) The group as lessor amounts due from lessees under finance leases are recognized as receivables at the amount of the group’s net investment in the leases. Finance lease interest income is allocated to accounting periods so as to reflect an effective interest rate on the group’s net investment outstanding in respect of the leases. Rental income from operating leases is recognized on a straight-line basis over the term of the relevant lease. initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognized as expense on a straight-line basis over the lease term. 2) The group as lessee assets held under finance leases are initially recognized as assets and liabilities of the group at their fair value at the inception of the lease or, if lower, at the present value of the minimum lease payments. Minimum lease payments are apportioned between the finance expenses and the reduction of the outstanding liability. the finance expenses are 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. contingent rents are recognized as expenses in the periods in which they are incurred. Operating lease payments are recognized as expense on a straight-line basis over the lease term, except where an- other systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed. contingent rents for operating lease are recognized as expenses in the periods in which they are incurred. (18) BORROWing cOsts Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets are capitalized to the cost of those assets, until they are ready for their intended use or sale. a qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use or sale. investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization. all other borrowing costs are recognized in profit or loss in the period in which they are incurred. (19) RetiReMent BeneFit plans contributions to defined contribution retirement benefit plans are recognized as an expense when employees have rendered service entitling them to the contributions. the retirement benefit obligation recognized in the consolidated statements of financial position represents the present value of the defined benefit obligation, less the fair value of plan assets. defined benefit obligations are calculated by an actuary using the projected unit credit Method. the present value of the defined benefit obligations is measured by discounting estimated future cash outflows by the interest rate of high-quality corporate bonds with similar maturity as the expected post-employment benefit payment date. in countries where there is no deep market in such bonds, the market yields at the end of the reporting period on government bonds are used. the remeasurements of the net defined benefit liabilities (assets) comprising actuarial gain or loss from changes in actuarial assumptions or differences between actuarial assumptions and actual results, the effect of the changes to the asset ceiling and return on plan assets, excluding amounts included in net interest on the net defined benefit liabilities (assets) are recognized in other comprehensive income of the consolidated statements of comprehensive income, which is immediately recognized as retained earnings. those recognized in retained earnings will not be reclassified in profit or loss. past service costs are recognized in profit and loss when the plan amendment occurs and net interest is calculated by applying the discount rate determined at the beginning of the annual reporting period to the net defined benefit liabilities (assets). defined benefit costs are composed of service cost (including current service cost, past service cost, as well as gains and losses on settlements), net interest expense (income), and remeasurements. the retirement benefit obligation recognized in the consolidated statement of financial position represents the actual deficit or surplus in the group’s defined benefit plans. any surplus resulting from this calculation is limited to the present value of any economic benefits available in the form of refunds from the plans or reductions in future contributions to the plans. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS as OF and FOR t He yeaRs ended deceMBeR 31, 2013 and 2012 (20) pROvisiOns a provision is recognized when the group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. the amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. a provision is measured using the present value of the cash flows estimated to settle the present obligation. the increase in provision due to passage of time is recognized as interest expense. the group generally provides a warranty to the ultimate consumer for each product sold and accrues warranty expense at the time of sale based on actual claims history. also, the group accrues probable expenses, which may occur due to product liability suit, voluntary recall campaign and other obligations at the end of the reporting period. in addition, the group recognizes provisions for the probable losses of unused loan commitment, construction contracts, pre-contract sale or service contract due to legal or constructive obligations. When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognized as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably. (21) taXatiOn income tax expense is composed of current and deferred tax. 1) Current tax the current tax is computed based on the taxable profit for the current year. the taxable profit differs from the income before income tax as reported in the consolidated statements of income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. the group’s liability for current tax expense is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period. 2) Deferred tax deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the consolidated financial statements and the corresponding tax bases used in the computation of taxable profit. deferred tax liabilities are generally recognized for all taxable temporary differences. deferred tax assets shall be generally recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized. such deferred tax assets and liabilities shall not be recognized if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries and associates, and interests in joint ventures, except when the group is able to control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognized to the extent that taxable profit will be available against which the temporary difference can be utilized and they are expected to be reversed in the foreseeable future. the carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. deferred tax assets and liabilities are measured at the tax rates that are expected to be applied in the period in which the liability is settled or the asset is realized, based on tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period. the measurement of deferred tax assets and liabilities reflects the tax consequences that would follow from the manner in which the group expects to recover or settle the carrying amount of its assets and liabilities at the end of the reporting period. deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when they relate to income tax levied by the same taxation authority. also, they are offset when different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realize the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered. FINANCIAL STATEMENTS 92 HYUNDAI MOTOR COMPANY AND ITs sUBsIDIARIEs 93 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS as OF and FOR t He yeaRs ended deceMBeR 31, 2013 and 2012 3) Current and deferred tax for the year current and deferred tax are recognized in profit or loss, except when they relate to items that are recognized in oth- er comprehensive income or directly in equity, or items arising from initial accounting treatments of a business combi- nation. the tax effect arising from a business combination is included in the accounting for the business combination. (22) tReasuRy stOck When the group repurchases its equity instruments (treasury stock), the incremental costs and net of tax effect are deducted from equity and recognized as other capital item deducted from the total equity in the consolidated statements of financial position. in addition, profits or losses from purchase, sale or retirement of treasury stocks are directly recognized in equity and not in current profit or loss. (23) Financial liaBilities and eQuity instRuMents debt instruments and equity instruments issued by the group are recognized as financial liabilities or equity depend- ing on the contract and the definitions of financial liability and equity instrument. 1) Equity instruments an equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. equity instruments issued by the group are recognized at issuance amount net of direct issuance costs. 2) Financial guarantee liabilities a financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due in accordance with the original or modified terms of a debt instrument. Financial guarantee contract liabilities are initially measured at their fair values and, if not designated as at Fvtpl, are subsequently measured at the higher of: • the amount of the obligation under the contract, as determined in accordance with k-iFRs 1037 provisions, contin- gent liabilities and contingent assets; and • the amount initially recognized less, cumulative amortization recognized in accordance with the k-iFRs 1018 Revenue 3) Financial liabilities at FVTpL Financial liabilities are classified as at Fvtpl when the financial liability is either held for trading or it is designated as Fvtpl. Fvtpl is stated at fair value and the gains and losses arising on remeasurement and the interest expenses paid in financial liabilities are recognized in profit and loss. 4) Other financial liabilities Other financial liabilities are initially measured at fair value, net of transaction costs. Other financial liabilities are subsequently measured at amortized cost using the effective interest method, with interest expense recognized on an effective-yield basis. 5) Derecognition of financial liabilities the group derecognizes financial liabilities only when the group’s obligations are discharged, cancelled or they expire. (24) deRivative Financial instRuMents derivatives are initially recognized at fair value at the date the derivative contracts are entered into and are subse- quently remeasured to their fair value at the end of each reporting period. the resulting gain or loss is recognized in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in such case the timing of the recognition in profit or loss depends on the nature of the hedge relationship. the group designates cer- tain derivatives as hedging instruments to hedge the risk of changes in fair value of a recognized asset or liability or an unrecognized firm commitment (fair value hedges) and the risk of changes in cash flow of a highly probable fore- cast transaction and the risk of changes in foreign currency exchange rates of firm commitment (cash flow hedges). 1) Fair value hedges the group recognizes the changes in the fair value of derivatives that are designated and qualified as fair value hedges are recognized in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk. Hedge accounting is discontinued when the group revokes the hedging relationship, when the hedging instrument expires or is sold, terminated, or exercised, or when it is no longer qualified for hedge accounting. the fair value adjustment to the carrying amount of the hedged item arising from the hedged risk is amortized to profit or loss from that date. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS as OF and FOR t He yeaRs ended deceMBeR 31, 2013 and 2012 2) Cash flow hedges the effective portion of changes in the fair value of derivatives that are designated and qualified as cash flow hedges is recognized in other comprehensive income. the gain or loss relating to the ineffective portion is recognized immediately in profit or loss. amounts previously recognized in other comprehensive income and accumulated in equity are reclassified to profit or loss in the periods when the hedged item affects profit or loss. if the forecast transaction results in the recognition of a non-financial asset or liability, the related gain and loss recognized in other comprehensive income and accumulated in equity is transferred from equity to the initial cost of related non-financial asset or liability. cash flow hedge accounting is discontinued when the group revokes the hedging relationship, when the hedging instrument expires or is sold, terminated or exercised, or it no longer qualifies for the criteria of hedging. any gain or loss accumulated in equity at that time remains in equity and is recognized as profit or loss when the forecast transaction occurs. When the forecast transaction is no longer expected to occur, the gain or loss accumulated in equity is recognized immediately in profit or loss. (25) FaiR value Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. in estimating the fair value of an asset or a liability, the group takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in these consolidated financial statements is determined on such a basis, except for leasing transactions that are within the scope of k-iFRs 1017 leases, and measurements that have some similarities to fair value but are not fair value, such as net realisable value in k-iFRs 1002 inventories or value in use in k-iFRs 1036 impairment of assets. in addition, for financial reporting purposes, fair value measurements are categorized into level 1, 2 or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described in note 19. (26) signiFicant accOunting JudgeMents and key sOuRces OF estiMatiOn unceRtainties in the application of the group’s accounting policies, management is required to make judgments, estimates and assumptions about the carrying amounts of assets and liabilities that cannot be identified from other sources. the estimation and assumptions are based on historical experience and other factors that are considered to be relevant. actual results may be different from those estimations. the estimates and underlying assumptions are continually evaluated. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods. the main accounting estimates and assumptions related to the significant risks that may make significant changes to the carrying amounts of assets and liabilities after the reporting period are as follows: 1) goodwill determining whether goodwill is impaired requires an estimation of the value in use of the cash-generating units to which goodwill has been allocated. the value in use calculation requires the management to estimate the future cash flows expected to arise from the cash-generating unit and a suitable discount rate in order to calculate present value. 2) Warranty provision the group recognizes provisions for the warranties of its products as described in note 2.(20). the amounts are recognized based on the best estimate of amounts necessary to settle the present and future warranty obligation. 3) Defined benefit plans the group operates defined retirement benefit plans. defined benefit obligations are determined at the end of each reporting period using an actuarial valuation method that requires management assumptions on discount rates, rates of expected future salary increases and mortality rates. the characteristic of post-employment benefit plan which serves for the long term period causes significant uncertainties when the post-employment benefit obligation is estimated. 4) Taxation the group recognizes current tax and deferred tax based on the best estimates of income tax effect to be charged in the future as the result of operating activities until the end of the reporting period. However, actual final income tax to be charged in the future may differ from the relevant assets and liabilities recognized at the end of the reporting period and the difference may affect income tax charged or credited, or deferred tax assets and liabilities in the period in which the final income tax determined. FINANCIAL STATEMENTS 94 HYUNDAI MOTOR COMPANY AND ITs sUBsIDIARIEs 95 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 5) Fair value of financial instruments the group uses valuation techniques that include inputs that are not based on observable market data to estimate the fair value of certain type of financial instruments. the group makes judgements on the choice of various valuation methods and assumptions based on the condition of the principal market at the end of the reporting period. 6) Measurement and useful lives of property, plant, equipment or intangible assets as OF and FOR t He yeaRs ended deceMBeR 31, 2013 and 2012 if the group acquires property, plant, equipment or intangible assets from business combination, it is required to estimate the fair value of the assets at the acquisition date and determine the useful lives of such assets for depreciation and amortization. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS as OF and FOR t He yeaRs ended deceMBeR 31, 2013 and 2012 4. OtHeR ReceiVaBles: OtHeR ReceivaBles as OF deceMBeR 31, 2013 and 2012, cOnsist OF tHe FOllOWing: description current non-current current non-current accounts receivable – others ￦ 1,672,402 ￦ 827,510 ￦ 1,458,809 ￦ 761,943 december 31, 2013 december 31, 2012 in millions of korean Won due from customers for contract work 1,393,555 - 781,136 3. tRade nOtes and accOunts ReceiVaBle: (1) tRade nOtes and accOunts ReceivaBle as OF deceMBeR 31, 2013 and 2012, cOnsist OF tHe FOllOWing: december 31, 2013 december 31, 2012 in millions of korean Won description current non-current current non-current lease and rental deposits deposits Others allowance for doubtful accounts present value discount accounts trade notes and accounts receivable ￦ 3,531,279 ￦ 47,969 ￦ 3,716,367 ￦ 48,513 5. OtHeR Financial assets: 42,784 13,699 2,549 (6,603) 274,832 23,154 7,283 - 54,924 11,293 3,489 (5,241) - 259,040 23,594 - - - (4,940) - (7,968) ￦ 3,118,386 ￦ 1,127,839 ￦ 2,304,410 ￦ 1,036,609 allowance for doubtful accounts (45,934) - (29,543) - present value discount accounts - (4,660) - (4,712) ￦ 3,485,345 ￦ 43,309 ￦ 3,686,824 ￦ 43,801 (2) aging analysis OF tRade nOtes and accOunts ReceivaBles as of december 31, 2013 and 2012, total trade notes and accounts receivable that are past due, but not impaired, amount to ￦310,984 million and ￦390,632 million, respectively; of which ￦264,159 million and ￦335,898 million, re- spectively, are past due less than 90 days, but not impaired. (3) tRansFeRRed tRade nOtes and accOunts ReceivaBle tHat aRe nOt deRecOgniZed as of december 31, 2013 and 2012, total trade notes and accounts receivable which the group transferred to financial institutions but did not qualify for derecognition, amount to ￦997,519 million and ￦1,889,307 million, respectively. the group recognize the carrying amount of the trade notes and accounts receivable continuously due to the fact that the risks and rewards were not transferred substantially, and cash and cash equivalents received as consideration for the transfer are recognized as short-term borrowings. (1) OtHeR Financial assets as OF deceMBeR 31, 2013 and 2012, cOnsist OF tHe FOllOWing: december 31, 2013 december 31, 2012 in millions of korean Won description current non-current current non-current Financial assets at Fvtpl: Held for trading non-derivative financial assets ￦ 414,255 derivative assets derivative assets that are effective hedging instruments 33,045 447,300 7,558 ￦ - 1,592 1,592 19,138 ￦ - 67,666 67,666 15,060 12,394 27 ￦ - 19,486 19,486 20,745 1,544,141 35 21,363 2,494,033 - - 31,600 217,121 14,152 10,057 ￦ 507,821 ￦ 2,731,884 ￦ 109,299 ￦ 1,594,464 aFs financial assets HtM financial assets loans (4) tHe cHanges in allOWance FOR dOuBtFul accOunts FOR tHe yeaRs ended deceMBeR 31, 2013 (2) aFs Financial assets tHat aRe MeasuRed at FaiR value as OF deceMBeR 31, 2013 and 2012, and 2012, aRe as FOllOWs: cOnsist OF tHe FOllOWing: in millions of korean Won in millions of korean Won description 2013 2012 december 31, 2013 december 31, 2012 Beginning of the year impairment loss Write-off effect of foreign exchange differences changes in the scope of consolidation end of the year ￦ 29,543 14,959 (539) 1,971 - ￦ 45,934 ￦ 40,346 10,161 (25,246) (1,075) 5,357 ￦ 29,543 description acquisition cost Valuation difference Book value Book value debt instruments equity instruments ￦ 123,906 1,445,018 ￦ 334 946,138 ￦ 124,240 2,391,156 ￦ 15,074 1,541,461 ￦ 1,568,924 ￦ 946,472 ￦ 2,515,396 ￦ 1,556,535 FINANCIAL STATEMENTS96 HYUNDAI MOTOR COMPANY AND ITs sUBsIDIARIEs 97 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS as OF and FOR t He yeaRs ended deceMBeR 31, 2013 and 2012 (3) eQuity instRuMents classiFied intO aFs Financial assets as OF deceMBeR 31, 2013 and 2012, cOnsist OF tHe FOllOWing: december 31, 2013 december 31, 2012 in millions of korean Won name of the company Ownership percentage(%) acquisition cost Valuation difference Book value Book value Hyundai steel company 7.87 ￦ 791,681 ￦ - ￦ 791,681 Hyundai Heavy industries co., ltd. Hyundai glovis co., ltd. 2.88 4.88 56,924 505,906 562,830 210,688 212,259 422,947 korea aerospace industries, co., ltd. 10.00 151,086 131,592 282,678 91,789 145,523 Hyundai Oil Refinery co., ltd. Hyundai green Food co., ltd. Hyundai Finance corporation Hyundai development company doosan capital co., ltd. Hyundai Merchant Marine co., ltd. kt corporation nice Holdings co., ltd. ubivelox co., ltd. nice information service co., ltd. Hyundai asan corporation nesscap, inc. Others 4.35 2.36 9.29 0.60 7.14 0.41 0.09 1.30 5.19 2.25 1.88 4.53 53,734 15,005 9,888 9,025 10,000 9,161 8,655 3,491 1,710 3,312 23,764 778 1,415 348 (1,261) (1,080) 2,310 2,875 868 22,500 (20,383) 1,997 (893) 38,769 10,666 10,440 10,348 7,900 7,575 5,801 4,585 4,180 2,117 1,104 ￦ - 529,980 405,553 251,973 137,490 39,231 11,065 9,743 13,508 16,355 8,523 3,127 7,860 3,729 2,117 1,199 86,161 (4,149) 82,012 100,008 ￦ 1,445,018 ￦ 946,138 ￦ 2,391,156 ￦ 1,541,461 as of december 31, 2013, the valuation difference between the book value and the acquisition cost of aFs equity instruments includes the cumulative impairment loss of ￦25,368 million. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS as OF and FOR t He yeaRs ended deceMBeR 31, 2013 and 2012 7. OtHeR assets: OtHeR assets as OF deceMBeR 31, 2013 and 2012, cOnsist OF tHe FOllOWing: december 31, 2013 december 31, 2012 in millions of korean Won description current non-current current non-current accrued income advanced payments prepaid expenses prepaid value added tax and others ￦ 362,854 ￦ 498 ￦ 403,645 ￦ 329 700,542 291,282 313,258 - 90,589 63,813 517,543 247,320 736,937 - 44,095 - ￦ 1,667,936 ￦ 154,900 ￦ 1,905,445 ￦ 44,424 8. nOn-cuRRent assets classiFied as Held FOR sale: nOn-cuRRent assets classiFied as Held FOR sale as OF deceMBeR 31, 2013 and 2012, cOnsist OF tHe FOllOWing: in millions of korean Won description december 31, 2013 december 31, 2012 land Buildings ￦ 13,676 8,671 ￦ 22,347 ￦ 19,995 3,312 ￦ 23,307 all the land and buildings that were classified as held for sale as of december 31, 2012 were disposed of for ￦25,739 mil- lion, and ￦4,530 million of other income and ￦1,179 million of other expenses were recognized as gain (loss) on disposals of non-current assets classified as held for sale, during the year ended december 31, 2013. as of december 31, 2013, the group entered into a contract for disposal of other land and buildings, that have been classified as non-current assets held for sale, and the assets will be disposed within 12 months. no impairment loss on the non-current assets classified as held for sale is recognized for the year ended december 31, 2013. 6. inVentORies: inventORies as OF deceMBeR 31, 2013 and 2012, cOnsist OF tHe FOllOWing: 9. PROPeRtY, Plant and equiPMent: description december 31, 2013 december 31, 2012 in millions of korean Won (1) pROpeRty, plant and eQuipMent as OF deceMBeR 31, 2013 and 2012, cOnsist OF tHe FOllOWing: in millions of korean Won Finished goods Merchandise semi-finished goods Work in progress Raw materials supplies Materials in transit Others ￦ 3,771,488 ￦ 3,476,869 december 31, 2013 december 31, 2012 105,385 434,834 410,024 1,138,616 204,657 540,666 467,446 294,875 382,434 367,896 1,110,764 170,736 544,688 424,602 ￦ 7,073,116 ￦ 6,772,864 description acquisition cost accumulated depreciation(*) Book value acquisition cost accumulated depreciation(*) Book value land Buildings structures ￦ 5,770,486 ￦ - ￦ 5,770,486 ￦ 5,799,466 ￦ - ￦ 5,799,466 6,686,495 (1,991,035) 4,695,460 6,407,132 (1,819,636) 4,587,496 1,037,122 (448,432) 588,690 945,595 (401,122) 544,473 Machinery and equipment 12,243,086 (6,221,320) 6,021,766 11,634,177 (5,801,023) 5,833,154 vehicles 283,518 (133,686) 149,832 301,304 (119,340) 181,964 dies, molds and tools 5,997,667 (4,568,511) 1,429,156 5,625,044 (4,139,372) 1,485,672 Office equipment 1,329,759 (967,490) 362,269 1,434,032 (1,063,004) 371,028 Others 50,024 (19,388) 30,636 55,519 (21,226) 34,293 construction in progress 2,414,292 - 2,414,292 1,902,312 - 1,902,312 ￦ 35,812,449 ￦ (14,349,862) ￦ 21,462,587 ￦ 34,104,581 ￦ (13,364,723) ￦ 20,739,858 (*) accumulated impairment is included. FINANCIAL STATEMENTS98 HYUNDAI MOTOR COMPANY AND ITs sUBsIDIARIEs 99 tHe cHanges in pROpeRty, plant and eQuipMent(“pp&e”) FOR tHe yeaR ended deceMBeR 31, 2013, aRe as FOllOWs: in millions of korean Won description Beginning of the year acquisitions transfers within PP&e disposals depreciation Others (*) end of the year land Buildings structures Machinery and equipment vehicles dies, molds and tools Office equipment Others ￦ 5,799,466 ￦ 3,590 ￦ 39,145 ￦ (53,866) ￦ - ￦ (17,849) ￦ 5,770,486 4,587,496 544,473 5,833,154 181,964 1,485,672 371,028 34,293 47,711 13,554 21,627 24,995 8,476 64,387 3,120 400,638 88,904 1,146,144 20,096 488,754 76,365 1,623 (54,997) (4,866) (75,089) (11,866) (5,510) (5,319) (569) (207,201) (52,226) (78,187) (1,149) 4,695,460 588,690 (789,330) (114,740) 6,021,766 (37,775) (519,678) (144,820) (7,797) (27,582) (28,558) 628 (34) 149,832 1,429,156 362,269 30,636 construction in progress 1,902,312 2,892,321 (2,261,669) (24,026) - (94,646) 2,414,292 ￦ 20,739,858 ￦ 3,079,781 ￦ - ￦ (236,108) ￦ (1,758,827) ￦ (362,117) ￦ 21,462,587 (*) Others include the effect of foreign exchange differences and transfers from or to other accounts. tHe cHanges in pp&e FOR tHe yeaR ended deceMBeR 31, 2012, WeRe as FOllOWs: in millions of korean Won description Beginning of the year acquisitions acquisitions from business combinations transfers within PP&e disposals depreciation Others (*) end of the year ￦ 5,637,917 ￦ 68,809 ￦ 36,189 ￦ 78,717 ￦ (14,386) ￦ - ￦ (7,780) ￦ 5,799,466 land Buildings structures 4,269,581 543,372 Machinery and equipment 5,442,619 vehicles dies, molds and tools Office equipment Others 163,287 1,425,188 354,913 52,412 51,471 5,541 18,010 46,389 8,278 61,840 3,858 46,892 528,634 1,712 61,022 159,058 1,141,672 12,525 27,112 7,421 2,844 4,112 607,580 113,323 (10,817) (8,207) (1,143) (37,977) (16,878) (8,813) (8,289) (1,796) (3,406) (195,561) (105,314) 4,587,496 (54,579) (11,452) 544,473 (734,094) (156,134) 5,833,154 (38,500) (11,971) 181,964 (508,605) (45,377) 1,485,672 (148,294) (9,489) - (5,309) (3,987) 29,147 371,028 34,293 1,902,312 construction in progress 1,658,759 2,735,842 29,213 (2,547,243) ￦ 19,548,048 ￦ 3,000,038 ￦ 299,966 ￦ - ￦ (100,895) ￦ (1,689,122) ￦ (318,177) ￦ 20,739,858 (*) Others include the effect of foreign exchange differences and transfers from or to other accounts. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS as OF and FOR t He yeaRs ended deceMBeR 31, 2013 and 2012 10. inVestMent PROPeRtY: (1) investMent pROpeRty as OF deceMBeR 31, 2013 and 2012, cOnsist OF tHe FOllOWing: december 31, 2013 december 31, 2012 in millions of korean Won description acquisition cost accumulated depreciation Book value acquisition cost accumulated depreciation Book value land Buildings structures ￦ 62,467 ￦ - ￦ 62,467 ￦ 62,874 ￦ - ￦ 62,874 320,904 (133,163) 187,741 330,853 (124,830) 206,023 18,630 (4,854) 13,776 18,303 (4,368) 13,935 ￦ 402,001 ￦ (138,017) ￦ 263,984 ￦ 412,030 ￦ (129,198) ￦ 282,832 (2) tHe cHanges in investMent pROpeRty FOR tHe yeaR ended deceMBeR 31, 2013, aRe as FOllOWs: description Beginning of the year transfers disposals depreciation in millions of korean Won effect of foreign exchange differences end of the year land Buildings structures ￦ 62,874 ￦ 175 ￦ (582) 206,023 13,935 (9,666) 248 - - ￦ - (9,751) (407) ￦ - ￦ 62,467 1,135 187,741 - 13,776 ￦ 282,832 ￦ (9,243) ￦ (582) ￦ (10,158) ￦ 1,135 ￦ 263,984 tHe cHanges in investMent pROpeRty FOR tHe yeaR ended deceMBeR 31, 2012, WeRe as FOllOWs: in millions of korean Won description Beginning of the year transfers depreciation effect of foreign exchange differences end of the year land Buildings structures ￦ 46,757 ￦ 16,117 221,334 14,336 - - ￦ - (11,252) (401) ￦ - (4,059) - ￦ 62,874 206,023 13,935 ￦ 282,427 ￦ 16,117 ￦ (11,653) ￦ (4,059) ￦ 282,832 FINANCIAL STATEMENTS100 HYUNDAI MOTOR COMPANY AND ITs sUBsIDIARIEs 101 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS as OF and FOR t He yeaRs ended deceMBeR 31, 2013 and 2012 FOllOWing: land Buildings structures (3) tHe FaiR value OF invest Ment pROpeRty as OF d eceMBeR 31, 2013 and 2012, c Onsist OF t He (2) tHe cHanges in intangiBle assets FOR tHe yeaR ended deceMBeR 31, 2013, aRe as FOllOWs: description december 31, 2013 december 31, 2012 in millions of korean Won description Beginning of the year internal develop- ments and separate acquisitions transfers within intangible assets disposals amortization impairment loss Others (*) end of the year in millions of korean Won On January 1, 2010, the k-iFRs transition date, the group remeasured the fair value of its investment property through an independent third party. as of december 31, 2013, no fair value remeasurement was performed, as the change in fair value is considered not to be material. ￦ 62,467 351,992 15,496 ￦ 429,955 ￦ 62,874 367,472 15,223 ￦ 445,569 goodwill ￦ 301,011 development costs 1,854,606 industrial property rights software Others construction in progress 32,441 230,673 315,867 148,620 ￦ - 781,694 5,553 34,650 1,518 ￦ - ￦ - ￦ - ￦ - ￦ (1,659) ￦ 299,352 5,060 (15,198) (658,684) (27,250) 5,329 1,945,557 12,696 30,826 12,522 - (7,220) (319) (2,282) (84,814) (31,635) - - 897 44,367 62,405 (911) (3,176) 273,421 291,903 196,495 (61,104) - - - (9,521) 274,490 (4) incOMe and eXpenses Related tO investMent pROpeRty FOR tHe yeaRs ended deceMBeR 31, (*) Others include the effect of foreign exchange differences and transfer from or to other accounts. 2013 and 2012, aRe as FOllOWs: in millions of korean Won description 2013 2012 tHe cHanges in intangiBle assets FOR tHe yeaR ended deceMBeR 31, 2012, WeRe as FOllOWs: Rental income Operating and maintenance expenses ￦ 35,495 13,632 ￦ 30,683 12,862 description Beginning of the year internal developments and separate acquisitions acquisitions from business combinations transfers within intangible assets disposals amortization impairment loss Others (*) end of the year in millions of korean Won ￦ 2,883,218 ￦ 1,019,910 ￦ - ￦ (17,799) ￦ (782,353) ￦ (28,161) ￦ 54,275 ￦ 3,129,090 11. intangiBle assets: (1) intangiBle assets as OF deceMBeR 31, 2013 and 2012, cOnsist OF tHe FOllOWing: december 31, 2013 december 31, 2012 in millions of korean Won description acquisition cost accumulated amortization(*) Book value acquisition cost accumulated amortization(*) Book value goodwill development costs industrial property rights software Others construction in progress ￦ 177,154 ￦ - ￦ 125,721 ￦ - ￦ - ￦ - ￦ - ￦ (1,864) ￦ 301,011 1,848,032 632,776 74,776 23,555 (725,716) (153) 1,336 1,854,606 22,777 181,716 290,099 140,331 292 29,430 38,512 97,597 455 4,212 1,940 9,638 22,740 22,024 - - (6,071) (553) (60,837) (1,549) (30,520) (513) - - 5,350 32,441 53,965 (4,126) 230,673 315,867 - (77,957) (32) - - (11,319) 148,620 goodwill ￦ 301,798 ￦ (2,446) ￦ 299,352 ￦ 303,444 ￦ (2,433) ￦ 301,011 ￦ 2,660,109 ￦ 798,607 ￦ 207,104 ￦ - ￦ (2,134) ￦ (823,144) ￦ (666) ￦ 43,342 ￦ 2,883,218 development costs 5,426,534 (3,480,977) 1,945,557 5,135,038 (3,280,432) 1,854,606 industrial property rights software Others construction in progress 123,244 536,674 440,613 274,490 (78,877) 44,367 (263,253) 273,421 (148,710) 291,903 - 274,490 104,100 419,119 447,223 148,620 (71,659) 32,441 (188,446) 230,673 (131,356) 315,867 - 148,620 ￦ 7,103,353 ￦ (3,974,263) ￦ 3,129,090 ￦ 6,557,544 ￦ (3,674,326) ￦ 2,883,218 (*) accumulated impairment is included. (*) Others include the effect of foreign exchange differences and transfer from or to other accounts. FINANCIAL STATEMENTS102 HYUNDAI MOTOR COMPANY AND ITs sUBsIDIARIEs 103 (3) ReseaRcH and develOpMent eXpendituRes FOR tHe yeaRs ended deceMBeR 31, 2013 and 2012, aRe as FOllOWs: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS as OF and FOR t He yeaRs development costs Ordinary development (manufacturing cost) ended deceMBeR 31, 2013 Research costs (administrative expenses) and 2012 in millions of korean Won 2013 2012 ￦ 781,694 344,618 722,732 ￦ 1,849,044 ￦ 632,776 312,288 686,606 ￦ 1,631,670 (4) iMpaiRMent test OF gOOdWill the allocation of goodwill amongst the group’s cash-generating units as of december 31, 2013 and 2012, is as follows: in millions of korean Won description december 31, 2013 december 31,2012 vehicle Finance Others ￦ 197,471 1,911 99,970 ￦ 299,352 ￦ 199,130 1,911 99,970 ￦ 301,011 the recoverable amounts of the group’s cgus are measured at their value-in-use calculated based on cash flow pro- jections of financial budgets for the next five years approved by management and the pre-tax discount rate applied to the cash flow projections is 17.6%. cash flows projection beyond the next five-year period are extrapolated by using the estimated growth rate which does not exceed the long-term average growth rate of the region and industry to which the cgu belongs. no impairment loss has been recognized based on the impairment tests for the years ended december 31, 2013 and 2012, respectively. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS as OF and FOR t He yeaRs ended deceMBeR 31, 2013 and 2012 12. inVestMents in JOint VentuRes and assOciates: (1) investMents in JOint ventuRes and assOciates as OF deceMBeR 31, 2013, cOnsist OF tHe FOllOWing: in millions of korean Won name of the company nature of the business location Ownership Percentage (%) Book value Beijing-Hyundai Motor company (BHMc) (*1) Manufacturing Hyundai Motor group china, ltd. (HMgc) (*1) investment sichuan Hyundai Motor company (cHMc) (*1) Manufacturing Hyundai Wia automotive engine (shandong) company (Wae) kia Motors corporation Manufacturing Manufacturing Hyundai engineering & construction co., ltd. construction Hyundai Wia corporation Hyundai powertech co., ltd. Hyundai dymos inc. Hyundai HyscO co., ltd. Manufacturing Manufacturing Manufacturing Manufacturing china china china china korea korea korea korea korea korea HMc investment securities co., ltd. securities brokerage korea eukor car carriers inc. (*2) Hyundai commercial inc. Others (*3) transportation Financing korea korea 50.00 50.00 50.00 22.00 33.88 20.95 26.79 37.58 47.27 29.37 26.27 12.00 50.00 2,026,337 153,823 132,014 129,783 6,748,127 3,050,804 600,284 335,227 270,535 236,732 217,218 148,866 125,806 519,439 ￦ 14,694,995 (*1) each of the joint arrangements in which the group retains joint control is structured through a separate entity and there are no contractual terms which the parties retain rights to the assets and obligations for the liabilities relating to the joint arrangement or other relevant facts and circumstances. as a result, the group considers that the parties that retain joint control in the arrangement have rights to the net assets and classifies the joint arrangements as joint ventures. also, there are restrictions which should obtain consent from the director who is designated by the other investors, for certain transactions such as payment of dividend. (*2) as the group is considered to be able to exercise significant influence by representation on the board of directors of the investee and other reasons, although the total ownership percentage is less than 20%, the investment is accounted for using the equity method. (*3) as of december 31, 2013, amongst Others, investments in Beijing Hyundai Qiche Financing company, with a book value of ￦88,760 million, is categorized as a joint venture although the group’s total ownership percentage is 53.0%, because the group does not have control over the entity by virtue of an agreement with the other investors. FINANCIAL STATEMENTS104 HYUNDAI MOTOR COMPANY AND ITs sUBsIDIARIEs 105 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS as OF and FOR t He yeaRs ended deceMBeR 31, 2013 and 2012 investMents in JOint ventuRes and assOciates as OF deceMBeR 31, 2012, cOnsisted OF tHe FOllOWing: in millions of korean Won name of the company nature of the business location Ownership Percentage (%) Book value Beijing-Hyundai Motor company (BHMc) (*1) Manufacturing Hyundai Motor group china, ltd. (HMgc) (*1) investment Hyundai Wia automotive engine (shandong) company (Wae) kia Motors corporation Manufacturing Manufacturing Hyundai engineering & construction co., ltd. construction Hyundai Wia corporation Hyundai powertech co., ltd. Hyundai dymos inc. Hyundai HyscO co., ltd. Manufacturing Manufacturing Manufacturing Manufacturing HMc investment securities co., ltd. securities brokerage eukor car carriers inc. (*2) Hyundai commercial inc. Others (*3) transportation Financing china china china korea korea korea korea korea korea korea korea korea 50.00 50.00 22.00 33.88 20.95 26.79 37.58 47.27 29.37 26.27 12.00 50.00 ￦ 1,657,185 103,450 107,253 5,638,238 3,023,813 484,518 299,075 233,660 615,271 217,187 127,881 121,597 488,603 ￦ 13,117,731 (*1) each of the joint arrangements in which the group retained joint control was structured through a separate entity and there were no contractual terms which the parties retained rights to the assets and obligations for the liabilities relating to the joint arrangement or other relevant facts and circumstances. as a result, the group considered that the parties that retained joint control in the arrangement had rights to the net assets and classified the joint arrangements as joint ventures. also, there are restrictions which obtain consent from the director who is designated by the other investors, for certain transactions such as payment of dividends. (*2) as the group was considered to be able to exercise significant influence by representation on the board of directors of the investee and other reasons, although the total ownership percentage was less than 20%, the investment was accounted for using the equity method. (*3) as of december 31, 2012, amongst Others, investments in Beijing Hyundai Qiche Financing company, with a book value of ￦46,174 million, was categorized as a joint venture although the group’s total ownership percentage was 60.0%, because the group did not have control over the entity by virtue of an agreement with the other investors. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS as OF and FOR t He yeaRs ended deceMBeR 31, 2013 and 2012 tHe cHanges in investMents in JOint ventuRes and assOciates FOR tHe yeaR ended deceMBeR 31, 2012, WeRe as FOllOWs: in millions of korean Won name of the company Beginning of the year acquisitions / (disposals) share of profits for the year dividends Others (*) end of the year BHMc HMgc Wae ￦ 1,553,871 128,318 ￦ - - 81,260 14,606 ￦ 672,287 ￦ (468,287) ￦ (100,686) ￦ 1,657,185 59,980 17,448 (79,895) - (4,953) (6,061) 103,450 107,253 kia Motors corporation 4,565,683 Hyundai engineering & construction co., ltd. 3,011,421 - - 1,257,063 (82,390) (102,118) 5,638,238 46,573 (11,664) (22,517) 3,023,813 Hyundai Wia corporation 482,996 (98,597) 112,265 (4,288) Hyundai powertech co., ltd. Hyundai dymos inc. 254,066 194,332 - - Hyundai HyscO co., ltd. 449,438 101,711 47,695 38,588 73,648 (7,858) (2,686) 740 - - (5,239) (4,287) 484,518 299,075 233,660 615,271 HMc investment securities co., ltd. eukor car carriers inc. Hyundai commercial inc. 210,511 111,312 122,364 - - - Others 543,666 139,927 7,298 (1,156) 534 217,187 32,153 23,271 57,155 (8,085) (7,499) (24,500) 462 (38,238) (213,907) 127,881 121,597 488,603 ￦ 11,709,238 ￦ 157,647 ￦ 2,445,424 ￦ (723,742) ￦ (470,836) ￦ 13,117,731 (*) Others consisted of changes in accumulated other comprehensive income, changes in ownership percentage and others. (3) cOndensed Financial inFORMatiOn OF tHe gROup’s MaJOR JOint ventuRes and assOciates as OF and FOR t He yea R ended deceMBeR 31, 2013, is as FO llOWs: in millions of korean Won (2) tHe cHanges in investMents in JOint ventuRes and assOciates FOR tHe yeaR ended deceMBeR 31, 2013, aRe as FOllOWs: in millions of korean Won name of the company Beginning of the year acquisitions / (disposals) share of profits for the year dividends Others (*) end of the year BHMc HMgc cHMc Wae ￦ 1,657,185 ￦ - ￦ 966,555 ￦ (622,500) ￦ 25,097 ￦ 2,026,337 BHMc HMgc cHMc Wae 103,450 77,346 107,253 17,432 56,592 - - - - - - kia Motors corporation 5,638,238 Hyundai engineering & construction co., ltd. Hyundai Wia corporation Hyundai powertech co., ltd. Hyundai dymos inc. 3,023,813 484,518 299,075 233,660 31,948 (665) 28,524 - - (7,070) 993 (1,259) 1,076 153,823 132,014 129,783 1,249,062 (89,257) (49,916) 6,748,127 62,243 (11,664) (23,588) 3,050,804 Hyundai HyscO co., 615,271 (483,681) 102,489 (5,889) HMc investment securities co., ltd. eukor car carriers inc. Hyundai commercial inc. Others 217,187 127,881 121,597 411,257 - - - 55,559 2,517 (1,156) (1,330) 217,218 31,336 11,932 73,320 (8,044) - (22,659) (2,307) (7,723) 1,962 148,866 125,806 519,439 ￦ 13,117,731 ￦ (354,098) ￦ 2,748,647 ￦ (771,686) ￦ (45,599) ￦ 14,694,995 (*) Others consist of changes in accumulated other comprehensive income, changes in ownership percentage and others. name of the company current assets non-current assets current liabilities non-current liabilities ￦ 6,724,971 ￦ 2,579,744 ￦ 5,109,071 ￦ 95,244 386,643 285,878 663,359 90,778 408,432 774,846 151,274 351,942 303,861 kia Motors corporation 13,472,386 22,709,654 10,806,238 Hyundai engineering & construction co., ltd. Hyundai Wia corporation Hyundai powertech co., ltd. Hyundai dymos inc. Hyundai HyscO co., ltd. HMc investment securities co., ltd. (*1,2) 11,108,964 2,769,033 841,587 867,798 1,470,314 4,552,120 3,624,248 2,091,422 1,240,856 775,516 787,872 - 6,905,974 1,535,457 785,041 578,069 1,111,124 3,885,124 - 78,341 544,423 5,121,007 2,624,163 1,013,737 374,060 482,460 444,852 - 110,947 (3,447) 34,434 44,005 - - 8,266 1,718 (7,130) 8,542 600,284 335,227 270,535 236,732 eukor car carriers inc. 563,589 1,984,373 341,512 1,194,435 Hyundai commercial inc.(*2) 4,154,667 - 3,800,298 - FINANCIAL STATEMENTS106 HYUNDAI MOTOR COMPANY AND ITs sUBsIDIARIEs 107 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS as OF and FOR t He yeaRs ended deceMBeR 31, 2013 and 2012 BHMc HMgc cHMc Wae name of the company sales in millions of korean Won Profit for the year from continuing operations Profit for the year from dis- continued opera- tions Other comprehensive income (expense) total comprehensive income ￦ 19,432,536 ￦ 1,937,099 ￦ - ￦ - ￦ 1,937,099 1,830,188 435,110 1,599,574 66,577 1,273 125,285 13,938,287 569,644 Hyundai engineering & construction co., ltd. Hyundai Wia corporation Hyundai powertech co., ltd. Hyundai dymos inc. Hyundai HyscO co., ltd. HMc investment securities co., ltd. (*1,2) 7,091,994 3,273,053 2,185,540 4,046,137 750,633 eukor car carriers inc. 2,598,281 Hyundai commercial inc.(*2) 346,231 425,007 97,851 84,835 53,597 2,096 255,829 36,617 - - - - - - - - 1,555,167 - - - - - - 66,577 1,273 125,285 (102,351) 17,000 4,318 3,036 (2,849) (5,062) (14,770) (15,387) 467,293 442,007 102,169 87,871 1,605,915 (2,966) 241,059 21,230 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS as OF and FOR t He yeaRs ended deceMBeR 31, 2013 and 2012 BHMc HMgc Wae name of the company sales in millions of korean Won Profit for the year from continuing operations Other comprehensive income (expense) total comprehensive income ￦ 14,519,399 ￦ 1,344,871 ￦ - ￦ 1,344,871 kia Motors corporation 47,242,933 3,864,704 2,024,745 1,168,745 103,915 78,737 Hyundai Wia corporation Hyundai powertech co., ltd. Hyundai dymos inc. Hyundai HyscO co., ltd. HMc investment securities co., ltd. (*1,2) eukor car carriers inc. Hyundai commercial inc.(*2) 7,021,086 2,954,852 1,926,637 8,405,083 1,104,413 2,867,224 347,735 - - (293,434) (114,430) (25,024) 314 (12,441) (20,574) 2,029 (71,643) (1,382) 103,915 78,737 3,571,270 452,530 399,540 121,724 63,963 239,581 23,540 251,874 50,945 566,960 424,564 121,410 76,404 260,155 21,511 323,517 52,327 (*1) although the closing date of the fiscal year of HMc investment securities co., ltd. is March, 31, the financial statements, used for applying the equity method, are prepared for the same reporting periods as the company’s. (*2) Operating finance business of which total assets (liabilities) are included in current assets (liabilities) as they do not distinguish current and kia Motors corporation 47,597,897 3,817,059 (147,086) 3,669,973 Hyundai engineering & construction co., ltd. 13,324,821 (*1) although the closing date of the fiscal year of HMc investment securities co., ltd. is March, 31, the financial statements, used for applying the non-current portion in their separate financial statements. equity method, are prepared for the same reporting periods as the company’s. (*2) Operating finance business of which total assets (liabilities) are included in current assets (liabilities) as they do not distinguish current and non-current portion in their separate financial statements. cOndensed Financial inFORMatiOn OF tHe gROup’s MaJOR JOint ventuRes and assOciates as OF and FOR tHe yeaR ended deceMBeR 31, 2012, Was as FOllOWs: in millions of korean Won (4) cOndensed additiOnal Financial inFORMatiOn OF tHe gROup’s MaJOR JOint ventuRes as OF and FOR tHe yeaR ended deceMBeR 31, 2013, is as FOllOWs: in millions of korean Won name of the company cash and cash equivalents current financial liabilities non-current Financial liabilities depreciation and amortization interest income interest expenses income tax expense BHMc HMgc Wae name of the company current assets non-current assets current liabilities non-current liabilities ￦ 5,183,231 ￦ 2,467,016 ￦ 4,185,709 ￦ 107,873 407,709 680,161 58,577 602,595 243,563 389,771 kia Motors corporation 11,139,430 21,258,884 10,000,239 Hyundai engineering & construction co., ltd. Hyundai Wia corporation Hyundai powertech co., ltd. Hyundai dymos inc. Hyundai HyscO co., ltd. HMc investment securities co., ltd. (*1,2) 9,610,665 2,788,776 806,416 762,344 2,714,340 4,257,135 3,136,164 1,784,713 1,206,600 606,041 2,688,727 - 6,149,756 1,789,978 684,464 483,202 2,598,336 3,582,773 - 405,473 5,550,013 1,841,137 901,393 503,784 396,240 951,029 - eukor car carriers inc. 482,011 2,015,125 310,254 1,122,152 Hyundai commercial inc.(*2) 3,932,124 - 3,583,222 - BHMc HMgc cHMc ￦ 573,257 136,091 73,834 ￦ - - ￦ - ￦ 1,546,058 ￦ 15,426 ￦ 42,012 ￦ 645,700 88,192 78,341 - 5,191 6,488 4,069 2,505 4,276 746 19,167 1,135 cOndensed additiOnal Financial inFORMatiOn OF tHe gROup’s MaJOR JOint ventuRes as OF and FOR tHe yeaR ended deceMBeR 31, 2012, Was as FOllOWs: in millions of korean Won name of the company cash and cash equivalents current financial liabilities non-current Financial liabilities depreciation and amortization interest income interest expenses income tax expense BHMc HMgc ￦ 312,796 209,481 ￦- 21,607 ￦ - ￦ 1,274,285 ￦ 14,689 ￦ 23,923 ￦ 449,174 - 3,972 3,046 5,663 31,594 (5) tHe aggRegate aMOunts OF tHe gROup’s sHaRe OF tHe JOint ventuRes’ and assOciates’, tHat aRe nOt individually MateRial, pROFit and cOMpReHensive incOMe FOR tHe yeaRs ended deceMBeR 31, 2013 and 2012, aRe as FOllOWs: in millions of korean Won description december 31, 2013 december 31, 2012 profit for the year Other comprehensive income (expenses) total comprehensive income ￦ 73,320 1,498 ￦ 74,818 ￦ 57,155 (19,880) ￦ 37,275 FINANCIAL STATEMENTS108 HYUNDAI MOTOR COMPANY AND ITs sUBsIDIARIEs 109 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS as OF and FOR t He yeaRs ended deceMBeR 31, 2013 and 2012 BHMc HMgc cHMc Wae BHMc HMgc Wae (6) RecOnciliatiOn OF tHe gROup’s sHaRe OF net assets OF tHe gROup’s MaJOR JOint ventuRes and assOciates tO tHeiR caRRying aMOunts as OF deceMBeR 31, 2013, is as FOllOWs: in millions of korean Won name of the company group’s share of net assets goodwill unrealized loss and others carrying amounts ￦ 2,050,200 ￦ - ￦ (23,863) ￦ 2,026,337 kia Motors corporation Hyundai engineering & construction co., ltd (*) Hyundai Wia corporation Hyundai powertech co., ltd. Hyundai dymos inc. Hyundai HyscO co., ltd. HMc investment securities co., ltd. eukor car carriers inc. Hyundai commercial inc. 163,074 132,014 129,783 6,605,359 1,913,447 604,486 345,223 272,312 210,104 177,166 148,604 125,806 - - - 197,089 1,137,357 - - - 27,172 40,052 - - (9,251) - - (54,321) - (4,202) (9,996) (1,777) (544) - 262 - 153,823 132,014 129,783 6,748,127 3,050,804 600,284 335,227 270,535 236,732 217,218 148,866 125,806 (*) the difference between the carrying amount and the fair value of the investee’s identifiable assets and liabilities as of the acquisition date, is included in the amount of net assets. RecOnciliatiOn OF tHe gROup’s sHaRe OF net assets OF tHe gROup’s MaJOR JOint ventuRes and assOciates tO tHeiR caRRying aMOunts as OF deceMBeR 31, 2012, Was as FOllOWs: in millions of korean Won name of the company group’s share of net assets goodwill unrealized loss and others carrying amounts ￦ 1,678,333 ￦ - ￦ (21,148) ￦ 1,657,185 kia Motors corporation Hyundai engineering & construction co., ltd (*) Hyundai Wia corporation Hyundai powertech co., ltd. Hyundai dymos inc. Hyundai HyscO co., ltd. HMc investment securities co., ltd. eukor car carriers inc. Hyundai commercial inc. 111,361 107,253 5,496,670 1,886,456 489,542 310,230 235,409 544,324 177,135 127,768 121,637 - - 197,089 1,137,357 - - - 72,788 40,052 - - (7,911) - (55,521) - (5,024) (11,155) (1,749) (1,841) - 113 (40) 103,450 107,253 5,638,238 3,023,813 484,518 299,075 233,660 615,271 217,187 127,881 121,597 (*) the difference between the carrying amount and the fair value of the investee’s identifiable assets and liabilities as of the acquisition date, was included in the amount of net assets. (7) tHe MaRket pRice OF listed eQuity secuRities as OF deceMBeR 31, 2013, is as FOllOWs: name of the company Price per share in millions of korean Won, except price per share total number of shares Market value kia Motors corporation ￦ 56,100 ￦ 137,318,251 ￦ 7,703,554 Hyundai engineering & construction co., ltd. Hyundai Wia corporation Hyundai HyscO co., ltd. HMc investment securities co., ltd. 60,700 190,000 41,500 9,810 23,327,400 6,893,596 6,698,537 7,705,980 1,415,973 1,309,783 277,989 75,596 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS as OF and FOR t He yeaRs ended deceMBeR 31, 2013 and 2012 13. Financial seRVices ReceiVaBles: (1) Financial seRvices ReceivaBles as OF deceMBeR 31, 2013 and 2012, cOnsist OF tHe FOllOWing: in millions of korean Won description december 31, 2013 december 31, 2012 loans card receivables Financial lease receivables Others allowance for doubtful accounts loan origination fee present value discount accounts ￦ 29,078,336 ￦ 27,922,539 9,806,136 3,038,540 11,348 41,934,360 (823,408) (89,881) (7,464) 9,744,711 2,836,499 6,951 40,510,700 (749,166) (259,716) (7,587) ￦ 41,013,607 ￦ 39,494,231 (2) aging analysis OF Financial seRvices ReceivaBles as of december 31, 2013 and 2012, total financial services receivables that are past due but not impaired are ￦1,288,443 million and ￦1,384,125 million, respectively; all of them are past due less than 90 days. as of december 31, 2013 and 2012, the impaired financial services receivables amount to ￦530,638 million and ￦631,406 million, respectively. (3) tRansFeRRed Financial seRvices ReceivaBles tHat aRe nOt deRecOgniZed as of december 31, 2013 and 2012, the group issued asset backed securities, which have recourse to the underlying assets, based on loans, card receivables and others. as of december 31, 2013, the carrying amounts and fair values of the transferred financial assets that are not derecognized are ￦14,802,187 million and ￦14,709,639 million, respectively, the carrying amounts and fair values of the associated liabilities are ￦10,934,023 million and ￦11,101,945 million, respectively, and the net position is ￦3,607,694 million. as of december 31, 2012, the carrying amounts and fair values of the transferred financial assets that were not derecognized were ￦13,186,895 million and ￦13,156,258 million, respectively, the carrying amounts and fair values of the associated liabilities were ￦9,912,680 million and ￦10,007,119 million, respectively, and the net position was ￦3,149,139 million. (4) tHe cHanges in allOWance FOR dOuBtFul accOunts OF Financial seRvices ReceivaBles FOR tHe yeaRs ended deceMBeR 31, 2013 and 2012, aRe as FOllOWs: in millions of korean Won description december 31, 2013 december 31, 2012 Beginning of the year impairment loss Write-off effect of foreign exchange differences transfers and others changes in the scope of consolidation end of the year ￦ 749,166 669,339 (474,001) (2,761) (118,335) - ￦ 823,408 ￦ 729,047 498,823 (398,137) (14,359) (77,150) 10,942 ￦ 749,166 FINANCIAL STATEMENTS110 HYUNDAI MOTOR COMPANY AND ITs sUBsIDIARIEs 111 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS as OF and FOR t He yeaRs ended deceMBeR 31, 2013 and 2012 (5) gROss investMents in Financial lease and tHeiR pResent value OF MiniMuM lease Receipts as OF deceMBeR 31, 2013 and 2012, aRe as FOllOWs: description in millions of korean Won december 31, 2013 december 31, 2012 gross investments in financial lease Present value of minimum lease receipts gross investments in financial lease Present value of minimum lease receipts not later than one year ￦ 1,453,668 ￦ 1,257,942 ￦ 1,366,499 ￦ 1,093,879 later than one year and not later than five years 1,944,394 1,776,643 1,812,227 1,742,481 later than five years 172 171 140 139 ￦ 3,398,234 ￦ 3,034,756 ￦ 3,178,866 ￦ 2,836,499 (6) uneaRned inteRest incOMe OF Financial lease as OF deceMBeR 31, 2013 and 2012, aRe as FOllOWs: in millions of korean Won description december 31, 2013 december 31, 2012 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 15. BORROwings and deBentuRes: (1) sHORt-teRM BORROWings as OF deceMBeR 31, 2013 and 2012, cOnsist OF tHe FOllOWing: in millions of korean Won description lender annual interest rate (%) december 31,2013 december 31,2012 as OF and FOR t He yeaRs Overdrafts citi Bank and others 0.40~3.53 ended deceMBeR 31, 2013 and 2012 general loans kookmin Bank and others 0.28~7.00 ￦ 211,603 2,468,175 ￦ 198,630 2,361,415 loans on trade receivables collateral korea exchange Bank and others liBOR+0.23~0.40 997,519 1,889,307 Banker’s usance kookmin Bank and others liBOR+0.31~0.40 commercial paper shinhan Bank and others 0.21~3.62 asset-backed securities HsBc short-term debentures daewoo securities and other 0.64 - 439,579 747,375 428,547 - 596,229 730,000 126,538 879,630 ￦ 5,292,798 ￦ 6,781,749 gross investments in financial lease net lease investments: present value of minimum lease receipts present value of unguaranteed residual value unearned interest income ￦ 3,398,234 ￦ 3,178,866 (2) lOng-teRM deBt as OF deceMBeR 31, 2013 and 2012, cOnsists OF tHe FOllOWing: 3,034,756 3,784 3,038,540 ￦ 359,694 2,836,499 - 2,836,499 ￦ 342,367 description lender annual interest rate (%) december 31,2013 december 31,2012 general loans shinhan Bank and others 0.98~5.50 ￦ 3,127,981 ￦ 2,265,859 Facility loan korea development Bank and others 0.92~7.30 524,530 796,486 in millions of korean Won 14. OPeRating lease assets: (1) OpeRating lease assets as OF deceMBeR 31, 2013 and 2012, cOnsist OF tHe FOllOWing: commercial paper Meritz securities and others 3.07~4.15 asset-backed securities Jp Morgan and others 0.47~0.69 Others Woori Bank and others 0.10~2.94 description december 31, 2013 december 31, 2012 in millions of korean Won less: present value discounts less: current maturities 233,000 3,535,460 238,899 343,000 3,369,345 290,324 7,659,870 7,065,014 134,025 158,398 2,859,815 2,764,143 ￦ 4,666,030 ￦ 4,142,473 acquisition cost accumulated depreciation accumulated impairment loss ￦ 12,030,614 (1,388,421) (77,317) ￦ 10,564,876 ￦ 9,008,006 (1,121,592) (56,326) ￦ 7,830,088 (2) FutuRe MiniMuM lease Receipts Related tO OpeRating lease assets as OF deceMBeR 31, 2013 and 2012, aRe as FOllOWs: in millions of korean Won guaranteed public debentures June 8, 2017 3.75~4.50 ￦ 1,583,399 ￦ 1,604,827 description december 31, 2013 december 31, 2012 not later than one year later than one year and not later than five years later than five years ￦ 2,018,610 2,270,798 1 ￦ 4,289,409 ￦ 1,643,559 1,842,246 2 ￦ 3,485,807 guaranteed private debentures april 25, 2015 5.68 79,148 80,333 non-guaranteed public debentures september 25, 2020 2.61~7.47 20,298,628 17,434,701 non-guaranteed private debentures august 9, 2018 1.63~3.63 asset-backed securities January 15, 2020 0.22~6.52 less: discount on debentures less: current maturities 2,383,997 10,891,176 2,613,559 9,880,999 35,236,348 31,614,419 88,129 95,532 5,825,439 5,148,198 ￦ 29,322,780 ￦ 26,370,689 (3) deBentuRes as OF deceMBeR 31, 2013 and 2012, cOnsist OF tHe FOllOWing: in millions of korean Won description latest maturity date annual interest rate (%) december 31,2013 december 31,2012 FINANCIAL STATEMENTS　 112 HYUNDAI MOTOR COMPANY AND ITs sUBsIDIARIEs 113 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS as OF and FOR t He yeaRs ended deceMBeR 31, 2013 and 2012 16. PROVisiOns: (1) pROvisiOns as OF deceMBeR 31, 2013 and 2012, cOnsist OF tHe FOllOWing: description december 31, 2013 december 31, 2012 in millions of korean Won Warranty Other long-term employee benefits Others ￦ 5,871,332 ￦ 5,908,719 624,836 409,751 609,589 490,450 ￦ 6,905,919 ￦ 7,008,758 (2) tHe cHanges in pROvisiOns FOR tHe yeaR ended deceMBeR 31, 2013, aRe as FOllOWs: in millions of korean Won description warranty Other long-term employee benefits Others Beginning of the year ￦ 5,908,719 ￦ 609,589 ￦ 490,450 charged utilized amortization of present value discounts changes in expected reimbursements by third parties effect of foreign exchange differences 773,917 (975,612) 142,133 44,819 (22,644) 64,075 (48,834) - - 6 100,207 (181,975) 13,268 - (12,199) end of the year ￦ 5,871,332 ￦ 624,836 ￦ 409,751 tHe cHanges in pROvisiOns FOR tHe yeaR ended deceMBeR 31, 2012, WeRe as FOllOWs: in millions of korean Won description warranty Other long-term employee benefits Others Beginning of the year ￦ 5,850,285 ￦ 586,628 ￦ 210,240 charged utilized amortization of present value discounts changes in expected reimbursements by third parties effect of foreign exchange differences changes in the scope of consolidation 712,587 (795,880) 144,566 2,343 (72,024) 66,842 66,354 (46,574) - - (6) 3,187 452,907 (154,684) - - (28,189) 10,176 end of the year ￦ 5,908,719 ￦ 609,589 ￦ 490,450 17. OtHeR Financial liaBilities: OtHeR Financial liaBilities as OF deceMBeR 31, 2013 and 2012, cOnsist OF tHe FOllOWing: december 31, 2013 december 31, 2012 in millions of korean Won description current non-current current non-current Financial liabilities at Fvtpl ￦ 2 derivative liabilities that are effective hedging instruments 134,974 Financial lease liabilities Others 9,093 - ￦ 3,061 426,434 10,618 ￦ 1 24,604 8,458 - 115,248 ￦ 4,161 331,699 20,333 - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS as OF and FOR t He yeaRs ended deceMBeR 31, 2013 and 2012 18. OtHeR liaBilities: OtHeR liaBilities as OF deceMBeR 31, 2013 and 2012, cOnsist OF tHe FOllOWing: december 31, 2013 december 31, 2012 in millions of korean Won description current non-current current non-current advance received Withholdings accrued expenses unearned income accrued dividends due to customers for contract work Others ￦ 250,886 ￦ 48,426 ￦ 412,792 ￦ 51,549 1,105,380 491,180 1,402,652 554,677 1,663,951 - 1,288,105 - 442,495 458,707 482,160 339,549 68 445,292 91,042 - - 611,168 77 497,948 207,370 - - 536,583 ￦ 3,999,114 ￦ 1,609,481 ￦ 4,291,104 ￦ 1,482,358 19. Financial instRuMents: (1) categORies OF Financial assets as OF deceMBeR 31, 2013, cOnsist OF tHe FOllOWing: description Financial assets at FVtPl loans and receivables aFs financial assets derivatives designated as hedging instruments in millions of korean Won Book value Fair value cash and cash equivalents ￦ - ￦ 6,872,430 ￦ - ￦ - ￦ 6,872,430 ￦ 6,872,430 short-term and long-term financial instruments trade notes and accounts receivable Other receivables - - - 14,910,783 3,528,654 2,845,387 - - - - - - 14,910,783 14,910,783 3,528,654 3,528,654 2,845,387 2,845,387 Other financial assets 448,892 248,721 2,515,396 26,696 3,239,705 3,239,705 Other assets Financial services receivables - - 363,352 41,013,607 - - - - 363,352 363,352 41,013,607 41,566,247 ￦ 448,892 ￦ 69,782,934 ￦ 2,515,396 ￦ 26,696 ￦ 72,773,918 ￦ 73,326,558 categORies OF Financial assets as OF deceMBeR 31, 2012, cOnsisted OF tHe FOllOWing: description Financial assets at FVtPl loans and receivables aFs financial assets HtM financial assets derivatives designated as hedging instruments in millions of korean Won Book value Fair value cash and cash equivalents ￦ - ￦ 6,759,338 ￦ - ￦ - ￦ - ￦ 6,759,338 ￦ 6,759,338 short-term and long-term financial instruments trade notes and accounts receivable Other receivables - - - 12,385,416 3,730,625 2,559,883 - - - Other financial assets 87,152 24,209 1,556,535 Other assets Financial services receivables - - 403,974 39,494,231 - - - - - 62 - - - - - 12,385,416 12,385,416 3,730,625 3,730,625 2,559,883 2,559,883 35,805 1,703,763 1,703,763 - - 403,974 403,974 39,494,231 39,894,670 ￦ 144,069 ￦ 440,113 ￦ 148,311 ￦ 356,193 ￦ 87,152 ￦ 65,357,676 ￦ 1,556,535 ￦ 62 ￦ 35,805 ￦ 67,037,230 ￦ 67,437,669 FINANCIAL STATEMENTS114 HYUNDAI MOTOR COMPANY AND ITs sUBsIDIARIEs 115 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS as OF and FOR t He yeaRs ended deceMBeR 31, 2013 and 2012 (2) categORies OF Financial liaBilities as OF deceMBeR 31, 2013, cOnsist OF tHe FOllOWing: description Financial liabilities at FVtPl Financial liabilities carried at amortized cost derivatives designated as hedging instruments in millions of korean Won Book value Fair value trade notes and accounts payable ￦ - ￦ 6,722,740 ￦ - ￦ 6,722,740 ￦ 6,722,740 Other payables Borrowings and debentures Other financial liabilities Other liabilities - - 3,063 - 4,703,454 47,966,862 - - 4,703,454 4,703,454 47,966,862 48,636,232 19,711 561,408 584,182 584,182 1,664,019 - 1,664,019 1,664,019 ￦ 3,063 ￦ 61,076,786 ￦ 561,408 ￦ 61,641,257 ￦ 62,310,627 categORies OF Financial liaBilities as OF deceMBeR 31, 2012, cOnsisted OF tHe FOllOWing: in millions of korean Won NOTES TO CONSOLIDATED FINANCIAL STATEMENTS as OF and FOR t He yeaRs ended deceMBeR 31, 2013 and 2012 Fair value measurements of financial instruments by fair-value hierarchy levels as of december 31, 2012, were as follows: description level 1 level 2 level 3 level 4 in millions of korean Won december 31, 2012 Financial assets: Financial assets at Fvtpl derivatives designated as hedging instruments aFs financial assets HtM financial assets Financial liabilities: Financial liabilities at Fvtpl derivatives designated as hedging instruments ￦ - - 1,287,409 - ￦ 87,152 35,805 5,023 62 ￦ - - ￦ 87,152 35,805 264,103 1,556,535 - 62 ￦ 1,287,409 ￦ 128,042 ￦ 264,103 ￦ 1,679,554 ￦ - - ￦ - ￦ 4,162 356,303 ￦ 360,465 ￦ - - ￦ - ￦ 4,162 356,303 ￦ 360,465 Book value Fair value the changes in financial instruments classified as level 3 for the year ended december 31, 2013, are as follows: description Financial liabilities at FVtPl Financial liabilities carried at amortized cost derivatives designated as hedging instruments trade notes and accounts payable ￦ - ￦ 6,841,326 ￦ - ￦ 6,841,326 ￦ 6,841,326 Other payables Borrowings and debentures Other financial liabilities Other liabilities - - 4,162 - 4,550,278 45,207,252 - - 4,550,278 4,550,278 45,207,252 46,237,968 144,039 356,303 504,504 504,504 1,288,182 - 1,288,182 1,288,182 ￦ 4,162 ￦ 58,031,077 ￦ 356,303 ￦ 58,391,542 ￦ 59,422,258 (3) FaiR value estiMatiOn Financial instruments that are measured subsequent to initial recognition at fair value are grouped into level 1 to level 3, based on the degree to which the fair value is observable, as described below: • level 1 : Fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities. • level 2 : Fair value measurements are those derived from inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices). • level 3 : Fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs). Fair value measurements of financial instruments by fair-value hierarchy levels as of december 31, 2013, are as follows: description level 1 level 2 level 3 level 4 in millions of korean Won december 31, 2013 Financial assets: Financial assets at Fvtpl derivatives designated as hedging instruments aFs financial assets Financial liabilities: Financial liabilities at Fvtpl derivatives designated as hedging instruments ￦ 38,927 ￦ 409,965 - 2,187,434 26,696 98,620 ￦ - - ￦ 448,892 26,696 229,342 2,515,396 ￦ 2,226,361 ￦ 535,281 ￦ 229,342 ￦ 2,990,984 ￦ - - ￦ - ￦ 3,063 561,408 ￦ 564,471 ￦ - - ￦ - ￦ 3,063 561,408 ￦ 564,471 description Beginning of the year Purchases disposals Valuation transfers end of the year aFs financial assets ￦ 264,103 ￦ 2,829 ￦ (42,064) ￦ 4,474 ￦ - ￦ 229,342 in millions of korean Won the changes in financial instruments classified as level 3 for the year ended december 31, 2012, were as follows: in millions of korean Won description Beginning of the year Purchases disposals Valuation transfers end of the year aFs financial assets ￦ 273,070 ￦ 9,042 ￦ (21,162) ￦ 3,153 ￦ - ￦ 264,103 (4) inteRest incOMe, dividend incOMe and inteRest eXpenses By categORies OF Financial instRuMents FOR tHe yeaRs ended deceMBeR 31, 2013 and 2012, cOnsist OF tHe FOllOWing: 2013 2012 in millions of korean Won description interest income dividend income interest expenses interest income dividend income interest expenses non-financial services: loans and receivables ￦ 573,439 ￦ - ￦ - ￦ 586,507 ￦ - ￦ - aFs financial assets HtM financial assets Financial liabilities carried at amortized cost Financial services: 961 11,096 - - - - - - 229,750 3,769 15,024 1 - - - - - 311,113 ￦ 574,400 ￦ 11,096 ￦ 229,750 ￦ 590,277 ￦ 15,024 ￦ 311,113 loans and receivables ￦ 2,640,111 ￦ - ￦ - ￦ 2,757,278 ￦ - Financial assets at Fvtpl 6,141 Financial liabilities at Fvtpl Financial liabilities carried at amortized cost - - - - - - - 1,351,481 - - - - - - ￦ - - 14,464 1,430,910 ￦ 2,646,252 ￦ - ￦ 1,351,481 ￦ 2,757,278 ￦ - ￦ 1,445,374 FINANCIAL STATEMENTS 116 HYUNDAI MOTOR COMPANY AND ITs sUBsIDIARIEs 117 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS as OF and FOR t He yeaRs ended deceMBeR 31, 2013 and 2012 as OF and FOR t He yeaRs ended deceMBeR 31, 2013 and 2012 (5) Financial assets and liaBilities suBJect tO OFFsetting, Financial instRuMents suBJect tO an enFORceaBle MasteR netting aRRangeMent OR siMilaR agReeMent as OF deceMBeR 31, 2013, cOnsist OF tHe FOllOWing: Financial assets and liaBilities suBJect tO OFFsetting, Financial instRuMents suBJect tO an enFORceaBle MasteR netting aRRangeMent OR siMilaR agReeMent as OF deceMBeR 31, 2012, cOnsisted OF tHe FOllOWing: in millions of korean Won in millions of korean Won description Financial assets: trade notes and accounts receivable gross amounts of recognized financial assets and liabilities gross amounts of recognized financial assets and liabilities set off in the consolidated statement of financial position net amounts of financial assets and liabilities presented in the consolidated statement of financial position Related amounts not set off in the consolidated statement of financial position - Financial instruments Related amounts not set off in the statement of financial position - collateral received (pledged) net amounts description gross amounts of recognized financial assets and liabilities gross amounts of recognized financial assets and liabilities set off in the consolidated statement of financial position net amounts of financial assets and liabilities presented in the consolidated statement of financial position Related amounts not set off in the consolidated statement of financial position - Financial instruments Related amounts not set off in the statement of financial position - collateral received (pledged) net amounts ￦ 3,590,967 ￦ 62,313 ￦ 3,528,654 Other receivables 3,160,005 314,618 2,845,387 Financial assets at Fvtpl (*) derivative assets that are effective hedging instruments 34,637 26,696 - - 34,637 26,696 ￦ - - - 24,438 ￦ - ￦ 3,528,654 - - - 2,845,387 34,637 2,258 Financial assets: trade notes and accounts receivable ￦ 3,850,475 ￦ 119,850 ￦ 3,730,625 Other receivables 2,794,774 234,891 2,559,883 Financial assets at Fvtpl (*) derivative assets that are effective hedging instruments 87,152 35,805 - - 87,152 35,805 ￦ - - - 32,811 ￦ - ￦ 3,730,625 - - - 2,559,883 87,152 2,994 ￦ 6,812,305 ￦ 376,931 ￦ 6,435,374 ￦ 24,438 ￦ - ￦ 6,410,936 ￦ 6,768,206 ￦ 354,741 ￦ 6,413,465 ￦ 32,811 ￦ - ￦ 6,380,654 Financial liabilities: trade notes and accounts payable ￦ 6,972,764 ￦ 250,024 ￦ 6,722,740 Other payables 4,830,361 126,907 4,703,454 Financial liabilities at Fvtpl (*) derivative liabilities that are effective hedging instruments 3,063 561,408 - - ￦ - - - 3,063 561,408 24,438 ￦ - ￦ 6,722,740 - - - 4,703,454 3,063 536,970 Financial liabilities: trade notes and accounts payable ￦ 7,139,826 ￦ 298,500 ￦ 6,841,326 Other payables 4,606,519 56,241 4,550,278 Financial liabilities at Fvtpl (*) derivative liabilities that are effective hedging instruments 4,162 356,303 - - ￦ - - - 4,162 356,303 32,811 ￦ - ￦ 6,841,326 - - - 4,550,278 4,162 323,492 ￦ 12,367,596 ￦ 376,931 ￦ 11,990,665 ￦ 24,438 ￦ - ￦ 11,966,227 ￦ 12,106,810 ￦ 354,741 ￦ 11,752,069 ￦ 32,811 ￦ - ￦ 11,719,258 (*) there are no derivative assets and liabilities that can be offset as of december 31, 2013. therefore, derivative assets and liabilities do not meet the criteria for offsetting in k-iFRs (*) there were no derivative assets and liabilities that can be offset as of december 31, 2012. therefore, derivative assets and liabilities did not meet the criteria for offsetting in k-iFRs 1032, but the group has a right of offsetting them in the event of default, insolvency or bankruptcy of the counterparty. 1032, but the group had a right of offsetting them in the event of default, insolvency or bankruptcy of the counterparty. FINANCIAL STATEMENTS118 HYUNDAI MOTOR COMPANY AND ITs sUBsIDIARIEs 119 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS as OF and FOR t He yeaRs ended deceMBeR 31, 2013 and 2012 (6) tHe cOMMissiOn incOMe (Financial seRvices Revenue) aRising FROM Financial assets OR liaBilities OtHeR tHan Financial assets OR liaBilities at Fvtpl FOR tHe yeaRs ended deceMBeR 31, 2013 and 2012, aRe ￦1,646,100 MilliOn and ￦1,616,825 MilliOn, Respectively. in additiOn, tHe Fee eXpenses (cOst OF sales FROM Financial seRvices) OccuRRing FROM Financial assets OR liaBilities OtHeR tHan Financial assets OR liaBilities at Fvtpl FOR tHe yeaRs ended deceMBeR 31, 2013 and 2012, aRe ￦897,756 MilliOn and ￦808,147 MilliOn, Respectively. (7) tHe gROup RecOgniZes tRansFeRs BetWeen levels OF tHe FaiR-value HieRaRcHy at tHe date OF tHe event OR cHange in ciRcuMstances tHat caused tHe tRansFeR. tHeRe aRe nO signiFicant tRansFeRs BetWeen level 1 and level 2 FOR tHe yeaR ended deceMBeR 31, 2013. (8) descRiptiOns OF tHe valuatiOn tecHniQues and tHe inputs used in tHe FaiR value MeasuReMents categORiZed WitHin level 2 and level 3 OF tHe FaiR-value HieRaRcHy aRe as FOllOWs: - currency forwards and options Fair value of currency forwards and options is measured based on forward exchange rate quoted in the current market at the end of the reporting period, which has the same remaining period of derivatives to be measured. if the forward exchange rate, which has the same remaining period of currency forward and option, is not quoted in the current market, fair value is measured using estimates of similar period of forward exchange rate by applying interpolation method with quoted forward exchange rates. as the inputs used to measure fair value of currency forwards and options are supported by observable market data, such as forward exchange rates, the group classified the estimates of fair value measurements of the currency forwards and options as l evel 2 of the fair-value hierarchy. - debt instruments including corporate bonds Fair value of debt instruments including corporate bonds is measured applying discounted cash flow method. the rate used to discount cash flows is determined based on swap rate and credit spreads of debt instruments, which have the similar credit rating and period quoted in the current market with those of debt instruments including corporate bonds that should be measured. the group classifies fair value measurements of debt instruments including corporate bonds as level 2 of the fair-value hierarchy since the rate, which has significant effects on fair value of debt instruments including corporate bonds, is based on observable market data. - unlisted equity securities Fair value of unlisted equity securities is measured using discounted cash flow projection, and certain assumptions not based on observable market prices or rate, such as sales growth rate, pre-tax operating income ratio and the weighted-average cost of capital based on business plan and circumstance of industry are used to estimate the future cash flow. the weighted-average cost of capital used to discount the future cash flows, is calculated by applying the capital asset pricing Model, using the data of similar listed companies. the group determines that the effect of estimation and assumptions referred above affecting fair value of unlisted equity securities is significant and classifies fair value measurements of unlisted securities as level 3 of the fair-value hierarchy. (9) tHe Quantitative inFORMatiOn aBOut signiFicant unOBseRvaBle inputs used in tHe FaiR value MeasuReMents categORiZed WitHin level 3 OF tHe FaiR-value HieRaRcHy and tHe descRiptiOn OF RelatiOnsHips OF signiFicant unOBseRvaBle inputs tO tHe FaiR value aRe as FOllOWs: in millions of korean Won NOTES TO CONSOLIDATED FINANCIAL STATEMENTS as OF and FOR t He yeaRs ended deceMBeR 31, 2013 and 2012 20. caPital stOcK: the company’s number of shares authorized is 600,000,000 shares. common stock and preferred stock as of december 31, 2013 and 2012, consist of the following: (1) cOMMOn stOck description december 31, 2013 december 31, 2012 in millions of korean Won, except par value issued par value capital stock 220,276,479 shares 220,276,479 shares ￦ 5,000 1,157,982 ￦ 5,000 1,157,982 the company completed stock retirement of 10,000,000 common shares and 1,320,000 common shares as of March 5, 2001 and May 4, 2004, respectively. due to these stock retirements, the total face value of outstanding stock differs from the capital stock amount. (2) pReFeRRed stOck in millions of korean Won description Par value issued Korean won dividend rate 1st preferred stock ￦ 5,000 25,109,982 shares ￦ 125,550 dividend rate of common stock + 1% 2nd preferred stock 5,000 37,613,865 shares 193,069 dividend rate of common stock + 2% 3rd preferred stock 5,000 2,478,299 shares 12,392 dividend rate of common stock + 1% total 65,202,146 shares ￦ 331,011 as of March 5, 2001, the company retired 1,000,000 second preferred shares. due to this stock retirement, the total face value of outstanding stock differs from the capital stock amount. the preferred shares are non-cumulative, participating and non-voting. 21. caPital suRPlus: capital surplus as of december 31, 2013 and 2012, consists of the following: description december 31, 2013 december 31, 2012 in millions of korean Won stock paid-in capital in excess of par value Others ￦ 3,321,334 809,334 ￦ 4,130,668 ￦ 3,321,334 837,654 ￦ 4,158,988 description Fair value at december 31, 2013 Valuation techniques unobservable inputs Range description of relationship 22. OtHeR caPital iteMs: unlisted equity securities ￦ 229,342 discounted cash flow pre-tax operating income ratio 2.7% ~ 22.3% discount rate 6.1% ~ 14.2% sales growth rate 0.5% ~ 7.0% if the sales growth rate and the pre-tax operating income ratio rise or the discount rate declines, the fair value increases. the group believes that the changes of unobservable inputs to reflect reasonably possible alternative assumptions would not have significant effects on the fair value measurements. Other capital items consist of treasury stocks purchased for the stabilization of stock price. number of treasury stocks as of december 31, 2013 and 2012, are as follows: number of shares description december 31, 2013 december 31, 2012 common stock 1st preferred stock 2nd preferred stock 11,006,710 1,950,960 1,000,000 11,006,710 1,950,960 1,000,000 FINANCIAL STATEMENTS120 HYUNDAI MOTOR COMPANY AND ITs sUBsIDIARIEs 121 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS as OF and FOR t He yeaRs ended deceMBeR 31, 2013 and 2012 23. accuMulated OtHeR cOMPReHensiVe incOMe: accumulated other comprehensive income as of december 31, 2013 and 2012, consists of the following: description december 31, 2013 december 31, 2012 in millions of korean Won gain on valuation of aFs financial assets loss on valuation of aFs financial assets gain on valuation of cash flow hedge derivatives loss on valuation of cash flow hedge derivatives gain on share of the other comprehensive income of equity-accounted investees loss on share of the other comprehensive income of equity-accounted investees loss on foreign operations translation, net ￦ 737,234 ￦ 678,559 (2,850) 2,589 (1,382) 59,833 (386,557) (1,242,903) ￦ (834,036) (2,372) 4,614 (5,726) 21,532 (287,108) (882,872) ￦ (473,373) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS as OF and FOR t He yeaRs ended deceMBeR 31, 2013 and 2012 24. Retained eaRnings and diVidends: (1) Retained eaRnings as OF deceMBeR 31, 2013 and 2012, cOnsist OF tHe FOllOWing: in millions of korean Won description december 31, 2013 december 31, 2012 legal reserve (*) discretionary reserve unappropriated ￦ 475,707 31,021,647 16,776,885 ￦ 423,124 26,531,647 13,038,459 ￦ 48,274,239 ￦ 39,993,230 (*) the commercial code of the Republic of korea requires the company to appropriate as a legal reserve, a minimum of 10% of annual cash dividends declared, until such reserve equals 50% of its capital stock issued. the reserve is not available for the payment of cash dividends, but may be transferred to capital stock or used to reduce accumulated deficit, if any. appraisal gains, amounting to ￦1,852,871 million, derived from asset revaluation by the asset Revaluation law of korea are included in retained earnings. it may be only transferred to capital stock or used to reduce accumulated deficit, if any. (2) tHe cOMputatiOn OF tHe pROpOsed dividends FOR tHe yeaR ended deceMBeR 31, 2013, is as FOllOWs: in millions of korean Won, except per share amounts description common stock 1st Preferred stock 2nd Preferred stock 3rd Preferred stock number of shares issued treasury stocks 220,276,479 25,109,982 37,613,865 2,478,299 (11,006,710) (1,950,960) (1,000,000) - shares, net of treasury stocks 209,269,769 23,159,022 36,613,865 2,478,299 par value per share dividend rate dividends declared dividends per share Market price per share dividend yield ratio ￦ 5,000 39% 408,076 ￦ 1,950 236,500 0.8% ￦ 5,000 ￦ 5,000 ￦ 5,000 40% 46,318 ￦ 2,000 125,000 1.6% 41% 75,058 ￦ 2,050 130,500 1.6% 40% 4,957 ￦ 2,000 114,500 1.7% tHe cOMputatiOn OF tHe dividends FOR tHe yeaR ended deceMBeR 31, 2012, Was as FOllOWs: in millions of korean Won, except per share amounts description common stock 1st Preferred stock 2nd Preferred stock 3rd Preferred stock number of shares issued treasury stocks 220,276,479 25,109,982 37,613,865 2,478,299 (11,006,710) (1,950,960) (1,000,000) - shares, net of treasury stocks 209,269,769 23,159,022 36,613,865 2,478,299 par value per share dividend rate dividends declared dividends per share Market price per share dividend yield ratio 25. sales: ￦ 5,000 38% 397,612 ￦ 1,900 218,500 0.9% ￦ 5,000 ￦ 5,000 ￦ 5,000 39% 45,160 40% 73,228 39% 4,833 ￦ 1,950 ￦ 2,000 ￦ 1,950 69,300 2.8% 75,600 2.6% 54,500 3.6% sales for the years ended december 31, 2013 and 2012, consist of the following: description 2013 2012 in millions of korean Won sales of goods Rendering of services Royalties Financial services revenue Others ￦ 77,371,830 ￦ 75,002,314 1,285,463 230,642 8,205,197 214,504 1,238,936 151,770 7,900,560 176,141 ￦ 87,307,636 ￦ 84,469,721 26. selling and adMinistRatiVe eXPenses: selling and administrative expenses for the years ended december 31, 2013 and 2012, consist of the following: in millions of korean Won description 2013 2012 selling expenses: export expenses Overseas market expenses advertisements and sales promotion sales commissions expenses for warranties transportation expenses administrative expenses: payroll post-employment benefits Welfare expenses service charges Research Others ￦ 951,362 269,422 2,087,172 602,845 964,684 324,158 5,199,643 2,313,956 168,825 363,299 1,154,974 722,732 1,209,219 5,933,005 ￦ 994,234 385,112 2,163,739 531,536 954,764 283,515 5,312,900 2,163,291 144,459 313,181 1,116,815 686,606 1,324,595 5,748,947 ￦ 11,132,648 ￦ 11,061,847 FINANCIAL STATEMENTS122 HYUNDAI MOTOR COMPANY AND ITs sUBsIDIARIEs 123 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 27. gain On inVestMents in JOint VentuRes and assOciates: gain on investments in joint ventures and associates for the years ended december 31, 2013 and 2012, consist of the following: in millions of korean Won description 2013 2012 as OF and FOR t He yeaRs ended deceMBeR 31, 2013 and 2012 gain on share of earnings of equity-accounted investees, net gain on disposals of investments in associates, net ￦ 2,748,647 308,462 ￦ 3,057,109 ￦ 2,445,424 136,140 ￦ 2,581,564 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS as OF and FOR t He yeaRs ended deceMBeR 31, 2013 and 2012 28. Finance incOMe and eXPenses: (1) Finance incOMe FOR tHe yeaRs ended deceMBeR 31, 2013 and 2012, cOnsist OF tHe FOllOWing: in millions of korean Won description 2013 2012 interest income gain on foreign exchange transactions gain on foreign currency translation dividend income income on financial guarantee gain on valuation of financial instruments at Fvtpl gain on disposals of aFs financial assets gain on valuation of derivatives Others ￦ 581,388 78,825 83,042 11,096 3,727 2,452 8,601 33,045 3,085 ￦ 590,277 89,945 147,653 15,024 3,673 53,920 - 67,655 1,579 ￦ 805,261 ￦ 969,726 (2) Finance eXpenses FOR tHe yeaRs ended deceMBeR 31, 2013 and 2012, cOnsist OF tHe FOllOWing: in millions of korean Won description 2013 2012 interest expenses loss on foreign exchange transactions loss on foreign currency translation loss on disposals of trade notes and accounts receivable loss on valuation of financial instruments at Fvtpl impairment loss on aFs financial assets loss on valuation of derivatives Others ￦ 341,192 ￦ 426,698 75,934 95,407 11,041 1,520 2,204 22,260 3,151 45,809 122,943 15,330 - 2,123 11,470 100 ￦ 552,709 ￦ 624,473 29. OtHeR incOMe and eXPenses: (1) OtHeR incOMe FOR tHe yeaRs ended deceMBeR 31, 2013 and 2012, cOnsists OF tHe FOllOWing: in millions of korean Won description 2013 2012 gain on foreign exchange transactions gain on foreign currency translation gain on disposals of pp&e gain on disposals of intangible assets commission income Rental income gain on disposals of non-current assets classified as held for sale Others ￦ 307,055 ￦ 420,252 195,810 103,104 16,649 46,135 70,931 4,530 393,787 ￦ 1,138,001 204,726 31,366 126 36,586 86,280 - 452,024 ￦ 1,231,360 (2) OtHeR eXpenses FOR tHe yeaRs ended deceMBeR 31, 2013 and 2012, cOnsist OF tHe FOllOWing: in millions of korean Won description 2013 2012 loss on foreign exchange transactions loss on foreign currency translation loss on disposals of pp&e impairment loss on intangible assets loss on disposals of non-current assets classified as held for sale donations Others ￦ 377,865 236,842 32,741 28,161 1,179 75,124 314,541 ￦ 1,066,453 ￦ 394,426 180,835 62,983 666 - 70,301 279,125 ￦ 988,336 30. eXPenses BY natuRe: expenses by nature for the years ended december 31, 2013 and 2012, consist of the following: description 2013 2012 in millions of korean Won changes in inventories Raw materials and merchandise used employee benefits depreciation amortization Others total (*) ￦ (389,147) 47,353,933 8,308,494 1,768,985 782,353 22,233,974 ￦ (296,076) 47,306,979 7,393,900 1,700,775 823,144 20,088,734 ￦ 80,058,592 ￦ 77,017,456 (*) sum of cost of sales, selling and administrative expenses and other expenses in the consolidated statements of income. FINANCIAL STATEMENTS 124 HYUNDAI MOTOR COMPANY AND ITs sUBsIDIARIEs 125 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS as OF and FOR t He yeaRs ended deceMBeR 31, 2013 and 2012 31. eaRnings PeR cOMMOn sHaRe: Basic earnings per common share are computed by dividing profit available to common shares by the weighted- average number of common shares outstanding during the year. the group did not compute diluted earnings per common share for the years ended december 31, 2013 and 2012, since there were no dilutive items during the years. Basic earnings per common share for the years ended december 31, 2013 and 2012, are computed as follows: in millions of korean Won, except per share amounts description 2013 2012 profit attributable to the owners of the parent company profit available to preferred stock profit available to common share ￦ 8,541,834 (1,962,183) 6,579,651 ￦ 8,566,568 (1,967,854) 6,598,714 Weighted-average number of common shares outstanding 209,269,769 shares 209,269,769 shares Basic earnings per common share ￦ 31,441 ￦ 31,532 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS as OF and FOR t He yeaRs ended deceMBeR 31, 2013 and 2012 as FOllOWs: provisions aFs financial assets subsidiaries, associates and joint ventures Reserve for research and manpower development derivatives pp&e accrued income gain on foreign currency translation Others (3) tHe cHanges in deFeRRed taX assets (liaBilities) FOR tHe yeaR ended deceMBeR 31, 2013, aRe description Beginning of the year changes end of the year in millions of korean Won ￦ 1,672,540 ￦ 64,812 ￦ 1,737,352 (229,971) (854,175) (240,177) (56,428) (17,392) (318,614) (50,304) 4,307 (247,363) (1,172,789) (290,481) (52,121) (3,232,024) (730,207) (3,962,231) (32,434) 615 294,834 24,925 377 (116,460) (7,509) 992 178,374 (2,677,220) (1,138,556) (3,815,776) 32. incOMe taX eXPense: (1) incOMe taX eXpense FOR tHe yeaRs ended deceMBeR 31, 2013 and 2012, cOnsist OF tHe FOllOWing: in millions of korean Won description 2013 2012 income tax currently payable adjustments recognized in the current year in relation to the prior years changes in deferred taxes due to: temporary differences tax credits and deficits items directly charged to equity effect of foreign exchange differences changes in the scope of consolidation ￦ 1,620,676 207,646 1,138,556 (180,586) (113,430) 30,347 - ￦ 1,576,461 (39,836) 694,868 162,391 97,414 61,644 (3,632) income tax expense ￦ 2,703,209 ￦ 2,549,310 (2) tHe RecOnciliatiOn FROM incOMe BeFORe incOMe taX tO incOMe taX eXpense puRsuant tO cORpORate incOMe taX laW OF kORea FOR tHe yeaRs ended deceMBeR 31, 2013 and 2012, aRe as FOllOWs: in millions of korean Won description 2013 2012 income before income tax ￦ 11,696,706 ￦ 11,610,442 income tax expense calculated at current applicable tax rates of 27.0% in 2013 and 26.3% in 2012 3,163,781 3,051,556 adjustments: non-taxable income disallowed expenses tax credits Others income tax expense effective tax rate (109,720) 101,057 (685,584) 233,675 (460,572) ￦ 2,703,209 23.1% (82,407) 91,613 (665,606) 154,154 (502,246) ￦ 2,549,310 22.0% accumulated deficit and tax credit carryforward 804,237 180,586 984,823 ￦ (1,872,983) ￦ (957,970) ￦ (2,830,953) tHe cHanges in deFeRRed taX assets (liaBilities) FOR tHe yeaR ended deceMBeR 31, 2012, WeRe as FOllOWs: in millions of korean Won description Beginning of the year changes end of the year provisions aFs financial assets subsidiaries, associates and joint ventures Reserve for research and manpower development derivatives pp&e accrued income loss (gain) on foreign currency translation Others accumulated deficit and tax credit carryforward ￦ 1,569,408 ￦ 103,132 ￦ 1,672,540 (253,238) (521,821) (169,400) (75,379) 23,267 (332,354) (70,777) 18,951 (229,971) (854,175) (240,177) (56,428) (2,754,400) (477,624) (3,232,024) (50,970) 41,275 232,173 (1,982,352) 966,628 18,536 (40,660) 62,661 (694,868) (162,391) (32,434) 615 294,834 (2,677,220) 804,237 ￦ (1,015,724) ￦ (857,259) ￦ (1,872,983) (4) tHe cOMpOnents OF iteMs cHaRged tO eQuity FOR tHe yeaRs ended deceMBeR 31, 2013 and 2012, aRe as FOllOWs: in millions of korean Won description 2013 2012 deferred tax charged or credited to: loss (gain) on valuation of aFs financial assets, net ￦ (17,411) ￦ 25,818 gain on valuation of derivatives, net Remeasurements of defined benefit plans changes in retained earnings of eaquity-accounted investees effect of changes in accounting policies (2,216) (91,818) (1,985) - (7,599) 69,330 9,408 457 ￦ (113,430) ￦ 97,414 FINANCIAL STATEMENTS126 HYUNDAI MOTOR COMPANY AND ITs sUBsIDIARIEs 127 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS as OF and FOR t He yeaRs ended deceMBeR 31, 2013 and 2012 (5) tHe teMpORaRy diFFeRences nOt RecOgniZed as deFeRRed taX liaBilities Related tO suBsidiaRies, assOciates and JOint ventuRes aRe ￦6,248,359 MilliOn and ￦4,793,848 MilliOn as OF deceMBeR 31, 2013 and 2012, R espectively. 33. RetiReMent BeneFit Plan: (1) eXpenses RecOgniZed in RelatiOn tO deFined cOntRiButiOn plans FOR tHe yeaRs ended deceMBeR 31, 2013 and 2012, aRe as FOllOWs: in millions of korean Won description 2013 2012 paid in cash Recognized liability ￦ 6,315 416 ￦ 6,731 ￦ 6,049 957 ￦ 7,006 (2) tHe signiFicant actuaRial assuMptiOns used By tHe gROup as OF deceMBeR 31, 2013 and 2012, aRe as FOllOWs: description december 31, 2013 december 31, 2012 discount rate Rate of expected future salary increase 4.45% 4.97% 3.74% 4.74% (3) tHe aMOunts RecOgniZed in tHe cOnsOlidated stateMents OF Financial pOsitiOn Related tO deFined BeneFit plans as OF deceMBeR 31, 2013 and 2012, cOnsist OF tHe FOllOWing: description december 31, 2013 december 31, 2012 in millions of korean Won present value of defined benefit obligations Fair value of plan assets net defined benefit liabilities net defined benefit assets ￦ 3,131,966 (2,749,943) ￦ 382,023 389,306 (7,283) ￦ 2,975,771 (2,154,022) ￦ 821,749 821,749 - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS as OF and FOR t He yeaRs ended deceMBeR 31, 2013 and 2012 (4) cHanges in net deFined BeneFit assets and liaBilities FOR tHe yeaR ended deceMBeR 31, 2013, aRe as FOllOWs: in millions of korean Won description Present value of defined benefit obligations Fair value of plan assets net defined benefit liabilities Beginning of the year current service cost past service cost interest expenses (income) Remeasurements: Return on plan assets actuarial gains arising from changes in demographic assumptions actuarial gains arising from changes in financial assumptions actuarial gains arising from experience adjustments and others contributions Benefits paid transfers in (out) effect of foreign exchange differences and others ￦ 2,975,771 ￦ (2,154,022) ￦ 821,749 473,463 21,337 115,713 - - (82,893) 473,463 21,337 32,820 3,586,284 (2,236,915) 1,349,369 - (7,684) (85,942) (230,175) (22,660) (338,777) - (120,090) 1,105 3,444 - - - (7,684) (590,241) 80,259 1,080 3,558 (7,684) (85,942) (230,175) (22,660) (346,461) (590,241) (39,831) 2,185 7,002 end of the year ￦ 3,131,966 ￦ (2,749,943) ￦ 382,023 cHanges in net deFined BeneFit assets and liaBilities FOR tHe yeaR ended deceMBeR 31, 2012, WeRe as FOllOWs: in millions of korean Won description Present value of defined benefit obligations Fair value of plan assets net defined benefit liabilities Beginning of the year current service cost interest expenses (income) Remeasurements: Return on plan assets actuarial losses arising from changes in demographic assumptions actuarial losses arising from changes in financial assumptions actuarial losses arising from experience adjustments and others effect of changes in accounting policies ￦ 2,249,240 ￦ (1,600,601) ￦ 648,639 399,983 106,189 - (76,560) 399,983 29,629 2,755,412 (1,677,161) 1,078,251 (12,333) (12,333) - 2,548 281,013 44,930 - 328,491 - - - 3,654 (8,679) 2,548 281,013 44,930 3,654 319,812 (531,609) (59,418) 2,105 11,457 1,151 contributions Benefits paid transfers in (out) changes in the scope of consolidation effect of foreign exchange differences and others - (531,609) (127,710) 979 28,402 (9,803) 68,292 1,126 (16,945) 10,954 end of the year ￦ 2,975,771 ￦ (2,154,022) ￦ 821,749 FINANCIAL STATEMENTS128 HYUNDAI MOTOR COMPANY AND ITs sUBsIDIARIEs 129 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (5) tHe sensitivity analyses BelOW Have Been deteRMined Based On ReasOnaBly pOssiBle cHanges OF tHe signiFicant assuMptiOns OccuRRing as OF deceMBeR 31, 2013, WHile HOlding all OtHeR assuMptiOns cOnstant. in millions of korean Won effect on the net defined benefit liabilities as of december 31, 2013 description increase by 1% decrease by 1% as OF and FOR t He yeaRs ended deceMBeR 31, 2013 and 2012 discount rate Rate of expected future salary increase (326,031) 313,430 385,624 (275,984) (6) tHe FaiR value OF tHe plan assets as OF deceMBeR 31, 2013 and 2012, cOnsist OF tHe FOllOWing: in millions of korean Won description december 31, 2013 december 31, 2012 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 34. casH geneRated FROM OPeRatiOns: cash generated from operations for the years ended december 31, 2013 and 2012, is as follows: in millions of korean Won description 2013 2012 profit for the year ￦ 8,993,497 ￦ 9,061,132 as OF and FOR t He yeaRs adjustments: ended deceMBeR 31, 2013 and 2012 post-employment benefits depreciation amortization of intangible assets provision for warranties income tax expense loss (gain) on foreign currency translation, net loss (gain) on disposals of pp&e, net interest income, net insurance instruments debt instruments Others ￦ 2,415,575 ￦ 1,948,010 gain on share of earnings of equity-accounted investees, net 66,149 268,219 50,859 155,153 gain on disposals of investments in associates, net cost of sales from financial services, net ￦ 2,749,943 ￦ 2,154,022 Others changes in operating assets and liabilities: decrease in trade notes and accounts receivable decrease (increase) in other receivables decrease (increase) in other financial assets increase in inventories decrease (increase) in other assets increase in trade notes and accounts payable increase (decrease) in other payables increase (decrease) in other liabilities decrease in other financial liabilities changes in net defined benefit liabilities payment of severance benefits decrease in provisions changes in financial services receivables increase in operating lease assets Others cash generated from operations 35. RisK ManageMent: (1) capital Risk ManageMent 527,620 1,768,985 782,353 773,917 2,703,209 53,397 (70,363) (240,196) (2,748,647) (308,462) 3,849,325 241,641 7,332,779 195,459 (376,285) (364,928) (828,298) 131,150 150,460 (455,914) (981,317) (15,784) (588,056) (39,831) (1,206,421) (4,034,164) (4,737,714) (65,590) (13,217,233) ￦ 3,109,043 429,612 1,700,775 823,144 712,587 2,549,310 (48,601) 31,617 (163,579) (2,445,424) (136,140) 3,300,405 364,830 7,118,536 297,742 371,695 155,604 (538,355) (710,477) 16,971 1,415,433 945,772 (168,904) (529,504) (59,418) (997,138) (4,160,902) (4,415,826) 65,728 (8,311,579) ￦ 7,868,089 the group manages its capital to maintain an optimal capital structure for maximizing profit of its shareholder and reducing the cost of capital. debt to equity ratio calculated as total liabilities divided by total equity is used as an index to manage the group’s capital. the overall capital risk management policy is consistent with that of the prior period. debt to equity ratios as of december 31, 2013 and 2012, are as follows: in millions of korean Won description december 31, 2013 december 31, 2012 total liabilities total equity debt-to-equity ratio ￦ 76,838,690 56,582,789 135.8% ￦ 73,620,239 47,917,575 153.6% FINANCIAL STATEMENTS130 HYUNDAI MOTOR COMPANY AND ITs sUBsIDIARIEs 131 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS as OF and FOR t He yeaRs ended deceMBeR 31, 2013 and 2012 (2) Financial Risk ManageMent the group is exposed to various financial risks such as market risk (foreign exchange risk, interest rate risk and price risk), credit risk and liquidity risk related to its financial instruments. the purpose of risk management of the group is to identify potential risks related to financial performance and reduce, eliminate and evade those risks to an acceptable level of risks to the group. Overall, the group’s financial risk management policy is consistent with the prior period policy. 1) Market risk the group is mainly exposed to financial risks arising from changes in foreign exchange rates and interest rates. accordingly, the group uses financial derivative contracts to hedge and to manage its interest rate risk and foreign currency risk. a) Foreign exchange risk management the group is exposed to various foreign exchange risks by making transactions in foreign currencies. the group is mainly exposed to foreign exchange risk in usd, euR and Jpy. the group manages foreign exchange risk by matching the inflow and the outflow of foreign currencies according to each currency and maturity, and by adjusting the foreign currency settlement date based on its exchange rate forecast. the group uses foreign exchange derivatives; such as currency forward, currency swap, and currency option; as hedging instruments. However, speculative foreign exchange trade on derivative financial instruments is basically prohibited. the group’s sensitivity to a 5% change in exchange rate of the functional currency against each foreign currency on income before income tax as of december 31, 2013, would be as follows: Foreign currency increase by 5% decrease by 5% in millions of korean Won Foreign exchange Rate sensitivity usd euR Jpy ￦ 10,689 (27,184) (5,737) ￦ (10,689) 27,184 5,737 the sensitivity analysis includes the group’s monetary assets, liabilities and derivative assets, liabilities but excludes items of income statements such as changes of sales and cost of sales due to exchange rate fluctuation. b) interest rate risk management the group has borrowings with fixed or variable interest rates. also, the group is exposed to interest rate risk arising from financial instruments with variable interest rates. to manage the interest rate risk, the group maintains an appropriate balance between borrowings with fixed and variable interest rates for short-term borrowings and has a policy to borrow funds with fixed interest rates to avoid the future cash flow fluctuation risk for long-term debt if possible. the group manages its interest rate risk through regular assessments of the change in markets conditions and the adjustments in nature of its interest rates. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS as OF and FOR t He yeaRs ended deceMBeR 31, 2013 and 2012 the company’s subsidiaries, Hyundai card co., ltd. and Hyundai capital services, inc., operating financial business are managing interest rate risk by utilizing value at risk (vaR). vaR is defined as a threshold value which is a statistical estimate of the maximum potential loss based on normal distribution. as of december 31, 2013 and 2012, the amounts of interest rate risk measured at vaR are ￦65,863 million and ￦81,375 million, respectively. c) equity price risk the group is exposed to market price fluctuation risk arising from equity instruments. as of december 31, 2013, the amounts of held for trading equity instruments and aFs equity instruments measured at fair value is ￦38,927 million and ￦2,391,156 million, respectively. 2) Credit risk the group is exposed to credit risk when a counterparty defaults on its contractual obligation resulting in a financial loss for the group. the group operates a policy to transact with counterparties who only meet a certain level of credit rating which was evaluated based on the counterparty’s financial conditions, default history, and other factors. the credit risk in the liquid funds and derivative financial instruments is limited as the group transacts only with financial institutions with high credit-ratings assigned by international credit-rating agencies. except for the guarantee of indebtedness discussed in note 37, the book value of financial assets in the consolidated financial statements represents the maximum amounts of exposure to credit risk. 3) Liquidity risk the group manages liquidity risk based on maturity profile of its funding. the group analyses and reviews actual cash outflow and its budget to match the maturity of its financial liabilities to that of its financial assets. due to the inherent nature of the industry, the group requires continuous R&d investment and is sensitive to economic fluctuations. the group minimizes its credit risk in cash equivalents by investing in risk-free assets. in addition, the group has agreements in place with financial institutions with respect to trade financing and overdraft to mitigate any significant unexpected market deterioration. the group, also, continues to strengthen its credit rates to secure a stable financing capability. the group’s maturity analysis of its non-derivative liabilities according to their remaining contract period before expiration as of december 31, 2013, is as follows: Remaining contract period in millions of korean Won description not later than one year later than one year and not later than five years later than five years total non interest-bearing liabilities ￦ 13,074,251 interest-bearing liabilities Financial guarantee 15,040,963 986,266 ￦ 15,666 35,118,473 76,255 ￦ 298 ￦ 13,090,215 780,044 116,816 50,939,480 1,179,337 the maturity analysis is based on the non-discounted cash flows and the earliest maturity date at which payments, i.e. both principal and interest, should be made. the group’s sensitivity to a 1% change in interest rates on income before income tax as of december 31, 2013, would be as follows: (3) deRivative instRuMent in millions of korean Won interest Rate sensitivity accounts increase by 1% decrease by 1% cash and cash equivalents Held for trading non-derivative financial assets short-term financial instruments and other financial assets Borrowings and debentures ￦ 18,846 (6,424) 849 (77,840) ￦ (18,846) 6,577 (849) 77,840 the group enters into derivative instrument contracts such as forwards, options and swaps to hedge its exposure to changes in foreign exchange rate. as of december 31, 2013 and 2012, the group deferred a net income of ￦1,207 million and a net loss of ￦1,112 million, respectively, in accumulated other comprehensive loss, on its effective cash flow hedging instruments. the longest period in which the forecasted transactions are expected to occur is within 59 months as of december 31, 2013. For the years ended december 31, 2013 and 2012, the group recognized a net loss of ￦230,974 million and ￦410,510 million in profit or loss(before tax), respectively, which resulted from the ineffective portion of its cash flow hedging instruments and changes in the valuation of its other non-hedging derivative instruments. FINANCIAL STATEMENTS132 HYUNDAI MOTOR COMPANY AND ITs sUBsIDIARIEs 133 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS as OF and FOR t He yeaRs ended deceMBeR 31, 2013 and 2012 36. Related-PaRtY tRansactiOns: the transactions and balances of receivables and payables within the group are wholly eliminated in the preparation of consolidated financial statements of the group. (1) signiFicant tRansactiOns aRising FROM OpeRatiOns FOR tHe yeaR ended deceMBeR 31, 2013, BetWeen tHe gROup and Related paRties OR aFFiliates By tHe MOnOpOly RegulatiOn and FaiR tRade act OF tHe RepuBlic OF kORea (“tHe act”) aRe as FOllOWs: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS as OF and FOR t He yeaRs ended deceMBeR 31, 2013 and 2012 in millions of korean Won sales/proceeds Purchases/expenses sales Others Purchases Others ￦ 784,889 ￦ 9,171 ￦ 4,677,717 ￦ 39,636 entity with significant influence over the company description Hyundai MOBis co., ltd. Mobis alabama, llc Mobis automotive czech s.r.o. Mobis india, ltd. Mobis parts america, llc Mobis parts europe n.v. Mobis Brasil Fabricacao de auto pecas ltda Mobis Module cis, llc Others kia Motors corporation 8,312 37 18,863 27,328 2,914 8 - 35,372 1,035,544 kia Motors Manufacturing georgia, inc. 681,292 kia Motors Russia llc kia Motors slovakia s.r.o. Joint ventures and associates BHMc HMgc Hyundai Wia corporation Hyundai HyscO co., ltd. Others Other related parties affiliates by the act 1,050,815 121,271 1,035,584 478,507 177,136 67,664 442,986 8,598 809,390 4,353 567 17,529 219,153 3,456 - 557 178,286 371,290 1,274 - 20,605 19,851 - 6,386 1,930 1,248,960 1,196,235 738,002 518,339 213,395 293,390 245,352 256,656 292,539 2,426,147 - 612,391 750 10,888 924,715 235,109 - 386 138 1,058 9,010 - 304 9,250 318,541 440 3,201 1,077 - 6,341 8,115 377 13,211 2,694,149 1,359,617 304 779,660 456,128 79,639 4,151,199 2,315,890 signiFicant tRansactiOns aRising FROM OpeRatiOns FOR tHe yeaR ended deceMBeR 31, 2012, BetWeen tHe gROup and Related paRties OR aFFiliates By tHe act WeRe as FOllOWs: description Hyundai MOBis co., ltd. Mobis alabama, llc Mobis automotive czech s.r.o. entity with significant influence over the company Mobis india, ltd. Mobis parts america, llc Mobis parts europe n.v. Mobis Brasil Fabricacao de auto pecas ltda Mobis Module cis, llc Others kia Motors corporation kia Motors Manufacturing georgia, inc. kia Motors Russia llc kia Motors slovakia s.r.o. Joint ventures and associates BHMc HMgc Hyundai Wia corporation Hyundai HyscO co., ltd. Others Other related parties affiliates by the act in millions of korean Won sales/proceeds Purchases/expenses sales Others Purchases Others ￦ 543,692 ￦ 8,491 ￦ 4,748,781 ￦ 39,845 - 1,282,561 8,826 85 18,319 115 1,274 1,107 - 23,858 758,784 562,422 1,123,563 97,695 885,785 393,998 151,619 173,047 124,737 12,608 5,284 16,712 - 1,286 - 612 785 288,152 183 - 21,673 13,715 1,995 419 2,216 9,759 3,068 1,173,139 669,896 154,591 201,281 23,162 240,938 170,090 233,292 2,185,309 - 599,757 1,140 7,566 834,422 324,423 - 906 - 75,636 4,962 - - - 361,259 1,741 1,149 - - 7,466 1,833 6 2,941,390 1,221,870 758,076 583,067 1,071,080 93,880 4,004,739 2,178,125 FINANCIAL STATEMENTS134 HYUNDAI MOTOR COMPANY AND ITs sUBsIDIARIEs 135 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS as OF and FOR t He yeaRs ended deceMBeR 31, 2013 and 2012 (2) as OF deceMBeR 31, 2013, signiFicant Balances Related tO tHe tRansactiOns BetWeen tHe gROup and Related paRties OR aFFiliates By tHe act aRe as FOllOWs: Receivables Payables in millions of korean Won description trade notes and accounts receivable Other receivables and others trade notes and accounts payable Other payables and others Hyundai MOBis co., ltd. ￦ 145,178 ￦ 29,937 ￦ 816,009 ￦ 167,061 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS as OF and FOR t He yeaRs ended deceMBeR 31, 2013 and 2012 as OF deceMBeR 31, 2012, signiFicant Balances Related tO tHe tRansactiOns BetWeen tHe gROup and Related paRties OR aFFiliates By tHe act WeRe as FOllOWs: Receivables Payables in millions of korean Won description trade notes and accounts receivable Other receivables and others trade notes and accounts payable Other payables and others Hyundai MOBis co., ltd. ￦ 172,545 ￦ 31,194 ￦ 877,744 ￦ 152,633 entity with significant influence over the company Joint ventures and associates Hyundai life insurance co., ltd. Mobis alabama, llc Mobis automotive czech s.r.o. Mobis india, ltd. Mobis parts america, llc Mobis parts europe n.v. Mobis Module cis, llc Others kia Motors corporation kia Motors Manufacturing georgia, inc. kia Motors Russia llc kia Motors slovakia s.r.o. kia Motors america, inc. BHMc HMgc Hyundai Wia corporation Hyundai HyscO co., ltd. Others Other related parties affiliates by the act 1,078 - 45 543 2,280 682 - 12,861 229,225 39,286 107,096 7,181 - 172,422 16,300 37,711 1,269 119,489 699 148,752 38,369 1,290 546 10,496 211,572 1,192 51 3,699 284,253 13,531 - 7,121 49,828 9,743 2,245 28,591 2,354 40,330 4,362 22,116 102 78,629 98,762 96,200 36,595 22,824 25,484 44,554 51,676 145,327 - 1,398 - - - - - 1 149 115,888 99 339 42,431 19,673 72 386 - 131,423 15,460 379,266 158,542 448,217 382 214 1,676 43,575 4,025 349,067 139,193 430,285 Hyundai life insurance co., ltd. 8,260 entity with significant influence over the company Joint ventures and associates Mobis alabama, llc Mobis automotive czech s.r.o. Mobis india, ltd. Mobis parts america, llc Mobis parts europe n.v. Mobis Module cis, llc Others kia Motors corporation kia Motors Manufacturing georgia, inc. kia Motors Russia llc kia Motors slovakia s.r.o. kia Motors america, inc. BHMc HMgc Hyundai Wia corporation Hyundai HyscO co., ltd. Others Other related parties affiliates by the act 530 60 137 257 654 - 4,118 241,671 53,115 113,591 6,381 349 192,185 82,883 16,307 21,529 79,051 1,560 359,890 77 - 556 9,326 - 60 56 7 148,783 2,781 - 7,017 33,857 11,239 598 8,635 3,260 21,666 2,856 23,985 - 79,508 74,967 94,344 17,746 24,344 25,659 16,751 47,324 144,165 - 31,382 10 - 77 134,618 34,247 362,715 191,279 573,290 775 - - - 5,538 - - 71 145,301 54 159 27,350 54,229 23 2,155 98,192 11,204 301,232 177,052 350,465 FINANCIAL STATEMENTS136 HYUNDAI MOTOR COMPANY AND ITs sUBsIDIARIEs 137 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS as OF and FOR t He yeaRs ended deceMBeR 31, 2013 and 2012 (3) signiFicant Fund tRansactiOns and eQuity cOntRiButiOn tRansactiOns FOR tHe yeaR ended deceMBeR 31, 2013, BetWeen tHe gROup and Related paRties aRe as FOllOWs: in thousands of u.s. dollars, in millions of k orean Won description loans Borrowings lending collection Borrowing Repayment equity contribution entity with significant influence over the company $ 200,000 Joint ventures and associates - $ - 253 $ - - $ - 50,265 ￦ - 131,088 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS as OF and FOR t He yeaRs ended deceMBeR 31, 2013 and 2012 (2) as OF deceMBeR 31, 2013, tHe gROup is invOlved in dOMestic and FOReign laWsuits as a deFendant. in additiOn, tHe gROup is invOlved in laWsuits FOR pROduct liaBilities and OtHeRs. tHe gROup OBtains insuRances FOR pOtential lOsses WHicH May Result FROM pROduct liaBilities and OtHeR laWsuits. tHe gROup is cuRRently unaBle tO estiMate tHe OutcOMe OR tHe pOtential Financial iMpact OF sucH laWsuits But eXpects tHey Will nOt Have any MateRial eFFect On its cOnsOlidated Financial stateMents. MeanWHile, as OF deceMBeR 31, 2013, tHe gROup is cuRRently invOlved in laWsuits FOR tHe scOpe OF ORdinaRy Wage and unaBle tO estiMate tHe OutcOMe OR tHe pOtential Financial iMpact. signiFicant Fund tRansactiOns and eQuity cOntRiButiOn tRansactiOns FOR tHe yeaR ended deceMBeR 31, 2012, BetWeen tHe gROup and Related paRties WeRe as FOllOWs: in thousands of u.s. dollars, in millions of k orean Won description loans Borrowings lending collection Borrowing Repayment equity contribution (3) as OF deceMBeR 31, 2013, a suBstantial pORtiOn OF tHe gROup’s pp&e is pledged as cOllateRal FOR vaRiOus lOans up tO ￦888,266 MilliOn. in additiOn, tHe gROup pledged ceRtain Bank depOsits, cHecks, pROMissORy nOtes and investMent secuRities, including 213,466 sHaRes OF kia MOtORs cORpORatiOn, as cOllateRal tO Financial institutiOns and OtHeRs. ceRtain ReceivaBles Held By tHe cOMpany’s FOReign suBsidiaRies, sucH as Financial seRvices ReceivaBles aRe pledged as cOllateRal FOR tHeiR BORROWings. Joint ventures and associates $ - $ 423 $ 50,000 $ 281 ￦ 275,105 (4) Hyundai capital seRvices, inc., a suBsidiaRy OF tHe cOMpany, Has a RevOlving cRedit Facility agReeMent WitH tHe FOllOWing Financial institutiOns: (4) cOMpensatiOn OF RegisteRed and unRegisteRed diRectORs, WHO aRe cOnsideRed tO Be tHe key ManageMent peRsOnnel FOR tHe yeaRs ended deceMBeR 31, 2013 and 2012, aRe as FOllOWs: in millions of korean Won description 2013 2012 short-term employee salaries post-employment benefits Other long-term benefits ￦ 158,875 30,329 413 ￦ 189,617 ￦ 163,126 29,000 504 ￦ 192,630 37. cOMMitMents and cOntingencies: (1) as OF deceMBeR 31, 2013, tHe deBt guaRantees pROvided By tHe gROup, eXcluding tHe cOMpany’s suBsidiaRies, aRe as FOllOWs: in millions of korean Won description domestic Overseas (*) to associates to others ￦ - 164,058 ￦ 164,058 ￦ 82,313 963,339 ￦ 1,045,652 Financial institutions credit line ge capital european Funding & co.(*) euro worth of usd 700 million citi Bank, n.a. Mizuho corporate Bank, seoul Branch Jp Morgan, seoul Branch citi Bank, seoul standard chartered, seoul Branch société générale, seoul Branch Bank of china, seoul dBs Bank, seoul Branch sMBc, seoul Branch Bnp paribas, seoul Branch Bank of america, n.a, seoul Branch crédit agricole, seoul RBs, seoul ing Bank, seoul kookmin Bank korea development Bank kyobo life insurance co., ltd. suhyeop Bank usd 200 million kRW 65,000 million kRW 110,000 million kRW 50,000 million kRW 50,000 million kRW 110,000 million kRW 50,000 million kRW 150,000 million kRW 50,000 million kRW 100,000 million kRW 20,000 million kRW 100,000 million kRW 110,000 million kRW 100,000 million kRW 200,000 million kRW 60,000 million kRW 50,000 million kRW 20,000 million (*) the guarantee amounts in foreign currency are translated into korean Won using the Base Rate announced by seoul Money Brokerage services, ltd. as of december 31, 2013. (*) the agreement has been extended in January, 2014, and from then on the credit line has been changed to usd 600 million. FINANCIAL STATEMENTS138 HYUNDAI MOTOR COMPANY AND ITs sUBsIDIARIEs 139 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (5) Hyundai caRd cO., ltd, a suBsidiaRy OF tHe cOMpany, Has a RevOlving cRedit Facility agReeMent WitH tHe FOllOWing Financial institutiOns: Financial institutions credit line ge capital european Funding & co.(*) euro worth of usd 100 million as OF and FOR t He yeaRs kookmin Bank ended deceMBeR 31, 2013 shinhan Bank and 2012 nH Bank citi Bank, seoul Hana Bank sc Bank Jeonbuk Bank suhyeop Bank korea development Bank Bank of nova scotia (*) the agreement expired in January, 2014. kRW 190,000 million kRW 150,000 million kRW 100,000 million kRW 50,000 million kRW 100,000 million kRW 30,000 million kRW 30,000 million kRW 20,000 million kRW 40,000 million kRW 50,000 million (6) Hyundai caRd cO., ltd., a suBsidiaRy OF tHe cOMpany, Has an asset Backed secuRitiZatiOn agReeMent, WHicH pROvides eaRly RedeMptiOn clauses WHen ceRtain tRiggeRing events OccuR. sucH clauses aRe in place tO liMit tHe Risk tHat tHe investORs May incuR due tO cHanges in asset Quality OF tHe suBsidiaRy in tHe FutuRe. in tHe event tHe asset-Backed secuRitiZatiOn tRiggeRs sucH events, Hyundai caRd cO., ltd. is OBligated tO Make eaRly RedeMptiOn OF its asset-Backed secuRities. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS as OF and FOR t He yeaRs ended deceMBeR 31, 2013 and 2012 38. segMent inFORMatiOn: (1) tHe gROup Has a veHicle segMent, a Finance segMent and OtHeR segMents. tHe veHicle segMent is engaged in tHe ManuFactuRing and sale OF MOtOR veHicles. tHe Finance segMent OpeRates veHicle Financing, cRedit caRd pROcessing and OtHeR Financing activities. OtHeR segMents include tHe R&d, tRain ManuFactuRing and OtHeR activities, WHicH cannOt Be classiFied in tHe veHicle segMent OR in tHe Finance segMent. (2) sales and OpeRating incOMe By OpeRating segMents FOR tHe yeaRs ended deceMBeR 31, 2013 and 2012, aRe as FOllOWs: For the year ended december 31, 2013 Vehicle Finance Others consolidation adjustments total in millions of korean Won total sales ￦ 103,198,545 ￦ 10,146,973 ￦ 7,077,614 ￦ (33,115,496) ￦ 87,307,636 inter-company sales (31,663,499) (254,543) (1,197,454) 33,115,496 - net sales Operating income 71,535,046 6,412,596 9,892,430 1,120,128 5,880,160 388,421 - 87,307,636 394,352 8,315,497 For the year ended december 31, 2012 Vehicle Finance Others consolidation adjustments total in millions of korean Won total sales ￦ 103,878,093 ￦ 8,799,513 ￦ 5,348,113 ￦ (33,555,998) ￦ 84,469,721 inter-company sales (32,571,552) net sales Operating income 71,306,541 6,714,889 (136,556) 8,662,957 1,177,231 (847,890) 33,555,998 - 4,500,223 254,716 - 84,469,721 293,765 8,440,601 (3) assets and liaBilities By OpeRating segMents FOR tHe yeaRs ended deceMBeR 31, 2013 and 2012, aRe as FOllOWs: in millions of korean Won as of december 31, 2013 Vehicle Finance Others consolidation adjustments total total assets total liabilities ￦ 80,927,475 ￦ 59,157,882 ￦ 6,496,797 ￦ (13,160,675) ￦ 133,421,479 29,481,884 51,055,240 3,724,238 (7,422,672) 76,838,690 Borrowings and debentures 4,425,746 44,561,579 1,738,408 (2,758,871) 47,966,862 as of december 31, 2012 Vehicle Finance Others consolidation adjustments total in millions of korean Won total assets total liabilities ￦ 77,264,305 ￦ 53,424,342 ￦ 5,742,620 ￦ (14,893,453) ￦ 121,537,814 31,596,447 46,410,502 3,729,628 (8,116,338) 73,620,239 Borrowings and debentures 5,424,506 40,721,836 1,875,225 (2,814,315) 45,207,252 FINANCIAL STATEMENTS140 HYUNDAI MOTOR COMPANY AND ITs sUBsIDIARIEs 141 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS as OF and FOR t He yeaRs ended deceMBeR 31, 2013 and 2012 (4) sales By RegiOn WHeRe tHe gROup’s entities aRe lOcated in FOR tHe yeaRs ended deceMBeR 31, 2013 and 2012, aRe as FOllOWs: in millions of korean Won For the year ended december 31, 2013 Korea north america asia europe Others consolidation adjustments total ￦ 53,151,843 ￦ 32,764,610 ￦ 7,156,618 ￦ 24,965,678 ￦ 2,384,383 ￦ (33,115,496) ￦ 87,307,636 (14,386,591) (7,117,997) (720,235) (10,890,673) - 33,115,496 - total sales inter-company sales net sales 38,765,252 25,646,613 6,436,383 14,075,005 2,384,383 - 87,307,636 For the year ended december 31, 2012 Korea north america asia europe Others consolidation adjustments total in millions of korean Won NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 39. cOnstRuctiOn cOntRacts: cOst, incOMe and lOss and claiMed cOnstRuctiOn FROM cOnstRuctiOn in pROgRess as OF deceMBeR 31, 2013, and 2012 a Re as FOllOWs: in millions of korean Won description december 31, 2013 december 31, 2012 as OF and FOR t He yeaRs ended deceMBeR 31, 2013 and 2012 accumulated accrual cost accumulated income accumulated construction in process progress billing due from customers due to customers ￦ 6,201,961 739,304 6,941,265 (5,993,002) 1,393,555 (445,292) ￦ 5,980,499 660,495 6,640,994 (6,357,806) 781,136 (497,948) ￦ 53,231,743 ￦ 31,515,158 ￦ 7,576,598 ￦ 25,287,990 ￦ 414,230 ￦ (33,555,998) ￦ 84,469,721 40. signiFicant eVents aFteR tHe RePORting PeRiOd: (14,576,806) (6,802,632) (737,897) (11,438,663) - 33,555,998 - net sales 38,654,937 24,712,526 6,838,701 13,849,327 414,230 - 84,469,721 Hca, a subsidiary of the company, issued after the reporting period, two tranches of debentures, each of them amounting to usd 900,000 thousand and usd 600,000 thousand, which will mature in 2017 and 2019, respectively, and issued a tranche of asset-backed security, amounting to usd 1,139,840 thousand. (5) nOn-cuRRent assets By RegiOn WHeRe tHe gROup’s entities aRe lOcated in as OF deceMBeR 31, 2013 and 2012, aRe as FOllOWs: in millions of korean Won 41. autHORizatiOn FOR issue OF Financial stateMents: the accompanying consolidated financial statements for the year ended december 31, 2013, were authorized for issue by the Board of directors on January 23, 2014. total sales inter-company sales korea north america asia europe Others description december 31, 2013 december 31, 2012 ￦ 19,428,529 ￦ 18,596,981 1,882,933 1,057,874 2,080,979 456,797 24,907,112 (51,451) 1,598,120 1,127,336 2,132,063 491,205 23,945,705 (39,797) ￦ 24,855,661 ￦ 23,905,908 consolidation adjustments total (*) (*) sum of pp&e, intangible assets and investment property. (6) tHeRe is nO single eXteRnal custOMeR WHO RepResents 10% OR MORe OF tHe gROup’s Revenue FOR tHe yeaRs ended deceMBeR 31, 2013 and 2012. FINANCIAL STATEMENTS142 HYUNDAI MOTOR COMPANY ANNuAL rEpOrT 2013 prODuCT LINEup 143 PROduct lineuP SONATA newly born after five years in 2014, the new sonata is a seventh generation model that embodies all of the latest capabilities of Hyundai Motor. through innovation in fundamentals ranging from design, power performance, and interior, sonata̓s proud legacy as korea̓s represen- tative midsize sedan will continue. ELANTrA (AVANTE) Beloved by the world over, elantra (avante) conveys the very essence of a compact sedan through a dynamic performance. it was named 2012 north american car of the year, the most exclusive award in north america. SONATA HYBrID style, outstanding fuel economy, dynamic performance, and eco-friendly technologies for a better tomorrow... experience the future being created by Hyundai Motor̓s hybrid vehicles through sonata Hybrid. ELANTrA (AVANTE) COupE elantra (avante) coupe is a 2-door model of elantra (avante) with dynamic coupe styling. it provides energetic driving performance with a 1.8 Mpi gasoline engine that has maximum output of 150 ps and torque of 18.2 kg.m. CENTENNIAL (EquuS) centennial (equus) is korea̓s foremost luxury sedan that epitomizes the highest sensibilities and state-of- the-art features of the time, including Hyundai Motor̓s advanced 3.8 v6 gdi and 5.0 v8 gdi gasoline engines. gENESIS COupE the newly introduced genesis coupe sports a more dynamic and individualistic design and exceptional power to offer a faster-paced, exciting ride. gENESIS genesis opened a new chapter in the history of premium sport sedans by providing a new level of luxury and emotional quality. today, it continues to lead as one of the finest cars in the world and to write the history of sedans in korea. AzErA (grANDEur) inspired by the magnificent descent of a soaring eagle, azera is synonymous with the history of luxury sedans in korea. it has always fulfilled the desires of leaders looking for driving pleasure by featuring Hyundai’s latest technologies. ACCENT 4DOOr / 5DOOr VELOSTEr / VELOSTEr TurBO this new concept near midsize sedan has a dynamic style and cutting-edge features for the ‘style guy’ who is living the most passionate and energetic period of his life. veloster incorporates the innovative cultural and emo- tional values of the new generation. With one door on the driver’s side and two doors on the passenger’s side, veloster’s refreshing take on style has captivated the hearts of young people all over the world. * the images in this brochure may differ from the actual cars for sale. 144 HYUNDAI MOTOR COMPANY ANNuAL rEpOrT 2013 prODuCT LINEup 145 PROduct lineuP SANTA FE santa Fe is Hyundai̓s representative midsize suv that offers the luxury and comfort of a sedan, best-in-class features, and a sophisticated yet powerful appearance. i40 / I40 SEDAN european sensibility and premium exemplified in a new concept cuv that marries style with utility. grAND SANTA FE grand santa Fe offers best-in-class amenity features and plentiful space through a widened roof-line. it is a premium suv born for families that enjoy the outdoor leisure life. i20 Beloved by europeans looking for style and efficiency, i20 is now eco-friendly too with a newly developed eco- friendly u2 diesel engine. i30 the i30 inspires with its sporty style that appeals to the senses, a truly luxurious interior space, and high perfor- mance engines. stylish and smart, the i30 is always in fashion. HB20 HB, standing for Hyundai Brasil, and 20, designating the compact class, is a bi-fuel vehicle that can utilize both bio-ethanol and gasoline. named car of the year in 2012, HB20 captivates the hearts of Brazilian people with style and economy. i10 Whizzing through the backstreets of europe, the all- new i10, with more ample passenger and cargo space, is exactly what europeans have been waiting for in terms of style, utility, and eco-friendliness. TuCSON (ix35) a compact suv with a young and sophisticated style to satisfy the diverse needs of urbanites. ix35 FuEL CELL developed with Hyundai Motor̓s proprietary technology and successfully mass produced for the first time in history, ix35 Fuel cell is the ultimate eco-friendly car whose only by-product is water. it brings a futuristic experience to life with its short charging time, long distance mileage, safety performance, and outstanding ride and driving comfort. ix20 dynamic style and versatile functionality, on top of a euro ncap five-star safety performance, make the ix20 the latest big player in the small Mvp category. EON eon is an indian market-specific sub-compact model embodying the concept of a ‘suburban city car.’ the 5- passenger hatchback features a front-wheel drive system with an 814 cc engine that has a maximum power output of 56 ps and 20.8 km/ℓ fuel economy. * the images in this brochure may differ from the actual cars for sale. 146 HYUNDAI MOTOR COMPANY ANNuAL rEpOrT 2013 prODuCT LINEup 147 PROduct lineuP H-1 (grAND STArEx) a dynamic and urban design, thoughtful consideration of user convenience such as the seat variation feature, maximum five-star euRO ncap rating, efficient technologies, and robust stability make the H-1 simply perfect for both business and pleasure. HD65 / HD72 / HD78 the Hyundai Hd series brings a new dynamism and capability to light and medium duty trucks. tough but stylish, comfortable and dependable, the Hd series offers the perfect vehicle to meet the demands of the trucking business. DuMp TruCk the newly reinforced heavy-duty Hyundai dump truck provides greater durability and superior performance, responding exactly to customer needs. uNIVErSE sophisticated style, powerful performance ensured by the independently developed powertech engine, comfortable ride, and easy maintenance make the universe first class all the way. SupEr AErO CITY super aero city provides a superb exterior and an ergo- nomic driver’s seat and instrument panel that offer a com- fortable passenger car-like driving experience. expanded wind shield and vertical-type MFR headlamps not only ensure safe driving, but also offer a luxurious feeling. COuNTY Futuristic and unique, county’s style beautifully harmo- nizes with its practical personality. Rounded edges and flush fitting surfaces contribute to a clean, simple image. AErOTOWN the redesigned front bumper absorbs low impact forces better while stylish headlamps add a note of sophistication. passenger comfort is maximized with ergonomically contoured seats. On top of it all, aero town is easy to drive thanks to the advanced steering system. H100 the stronger and quieter H100, with its relaxed character lines and a new quality of comfort, comes with an efficient cargo space that allows convenient loading and unloading of cargo up to 1 ton, a high performance diesel engine, and a safer and more powerful brake system. HD45 ideal for heavy traffic operation, the narrow 1,760 mm width of the Hyundai Hd45 also makes it suitable for city streets. a clean exterior style and integrated details such as the driver’s step and rear cab protection make it look good as well. CArgO TruCk With an unbeatable top performance, the Hyundai cargo truck is built tough to run reliably and economically, working around the clock to carry maximum payload. HD120 the Hyundai Hd120 sets the standard in the medium duty truck category by combining top performance, reliability, and economy. TrACTOr TruCk the Hyundai tractor truck delivers more cost effectiveness, high payload, and maximum vehicle performance in long-distance transport. HD210 Hd210 is the perfect business partner with comfortable, durable seats and an ergonomic wraparound instrument panel that provides full control over the vehicle. MIxEr TruCk the Hyundai mixer truck offers the best value for money today. Built for construction and ready to take on heavy loads, it offers the perfect “mix” of performance, price, and reliability with top mixing and pouring performance and ruggedized construction for a long service life. * the images in this brochure may differ from the actual cars for sale. 148 HYUNDAI MOTOR COMPANY ANNuAL rEpOrT 2013 149 The glorious Journey for All Hyundai brings the world together to celebrate the FiFa World cuptM H Y U N D A I M o t o r C o M p A N Y | A n n u A l R e p o R t 2 0 1 3 HYUNDAI Motor CoMpANY AnnuAl RepoRt 2013 People’s expectation toward individual mobility requires more than just a convenient means of transportation. The old understanding of cars has become outdated. A car represents individuals’ lifestyles, and it became an integral part of their lives. At the same time, the automobile industry has experienced seismic change. Hyundai Motor Company has grown rapidly to become one of the largest automakers, backed by world class production capability and superior quality. We have now reached a point where we need a qualitative approach to bring bigger ideas and relevant solutions to our customers. This is an opportunity to move forward and we have developed a new brand slogan that encapsulates our willingness to take a big leap. Led by our new slogan and the new thinking underlying it, we will become a company that keeps challenging itself to unlock new possibilities for people and the planet. Hyundai Motor Company www.hyundai.com Annual Report. 1406 English. KM-SW Copyright © 2014 Hyundai Motor Company. All Rights Reserved. www.facebook.com/hyundaiworldwide www.youtube.com/hyundaiworldwide plus.google.com/+hyundai

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