review reports 3 q2013 jp

Hyundai Capital Services, Inc. and Subsidiaries Condensed Consolidated Interim Financial Statements (Unaudited) September 30, 2013

(With Independent Auditors’ Review Report Thereon)

Contents

Page

Independent Auditors’ Review Report 1

Condensed Consolidated Interim Statements of Financial Position 3

Condensed Consolidated Interim Statements of Comprehensive Income 5

Condensed Consolidated Interim Statements of Changes in Equity 8

Condensed Consolidated Interim Statements of Cash Flows 10

Notes to the Condensed Consolidated Interim Financial Statements 11

I

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Other Matters The condensed consolidated interim statements of comprehensive income for the three-month and nine-month periods ended September 30, 2012 and changes in equity and cash flows for the nine-month period ended September 30, 2012, presented for comparative purposes, were reviewed by Samil Accounting Corp. and their review report thereon, dated November 8, 2012, expressed that nothing had come to their attention that caused them to believe that the condensed consolidated interim financial statements as of and for the nine-month period ended September 30, 2012 were not prepared, in all material respects, in accordance with K-IFRS. However, as discussed in note 2 to the condensed consolidated interim financial statements, from the annual period for the year ended December 31, 2012, the Group adopted the amendment to K-IFRS No.1001, ‘Presentation of Financial Statement.’ and K-IFRS No.1019, ‘Employee Benefits.’ The Group applied this change in accounting policies retrospectively, and accordingly restated the comparative information of the condensed consolidated interim statement of comprehensive income for the three-month and nine-month periods ended September 30, 2012. The consolidated statement of financial position of the Group as of December 31, 2012, and the related consolidated statements of comprehensive income, changes in equity and cash flows for the year then ended, which are not accompanying this report, were audited by Samil Accounting Corp. in accordance with auditing standards gene rally accepted in the Republic of Korea and their report thereon, dated March 19, 2013, expressed an unqualified opinion. The accompanying consolidated statement of financial position of the Group as of December 31, 2012, presented for comparative purposes, is not different from that audited by other auditors in all material respects, except for the effects of changes in accounting policies discussed in note 2 to the condensed consolidated interim financial statements. We have not performed a review, audit or any other attestation on the accompanying condensed consolidated statement of financial position of the Group as of December 31, 2012, including changes in accounting policies described in note 2, and accordingly it is not included in the scope of our review. The procedures and practices utilized in the Republic of Korea to review such condensed consolidated interim financial statements may differ from those generally accepted and applied in other countries. Accordingly, this report and the accompanying condensed consolidated interim financial statements are for use by those knowledgeable about Korean review standards and their application in practice. KPMG Samjong Accounting Corp. Seoul, Korea November 12, 2013 This report is effective as of November 12, 2013, the review report date. Certain subsequent events or circumstances, which may occur between the review report date and the time of reading this report, could have a material impact on the accompanying condensed consolidated interim financial statements and notes thereto. Accordingly, the readers of the review report should understand that the above report has not been updated to reflect the impact of such subsequent events or circumstances, if any.

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사각형

Hyundai Capital Services, Inc. and Subsidiaries Condensed Consolidated Interim Statements of Financial Position As of September 30, 2013 and December 31, 2012 (Unaudited)

3

(In millions of won) Notes September 30,

2013 December 31,

2012 Assets Cash and due from banks 6,23 Cash and cash equivalents W 1,214,074 1,302,161 Due from banks 15 12

1,214,089 1,302,173 Securities 3 Available-for-sale securities 6 23,198 20,283 Investments in associates 102,632 98,796

125,830 119,079 Loans receivable Loans receivable 4,5,6,7 12,410,388 12,381,225 Allowance for loan loss (311,902) (312,829)

12,098,486 12,068,396 Installment financial assets 4,5,6,7 Auto installment financing receivables 3,843,556 3,755,497 Allowance for loan loss (33,582) (33,207)Mortgage installment financing receivables 11,047 16,517

Allowance for loan loss (276) (277) 3,820,745 3,738,530Lease receivables 4,5,6,7 Finance lease receivables 2,970,244 2,804,929 Cancelled lease receivables 640 493

2,970,884 2,805,422 Leased assets Operating leased assets 1,064,188 1,123,049 Cancelled leased assets 3,655 4,230

1,067,843 1,127,279 Property and equipment, net 8 248,385 323,478 Other assets 5 Intangible assets 9 62,076 64,163 Non-trade receivables 6 103,050 117,837

Allowance for loan loss (3,440) (3,890)Accrued revenues 6 108,717 116,330

Allowance for loan loss (14,797) (14,850)Advance payments 43,515 19,846 Prepaid expenses 64,411 57,438 Leasehold deposits 6 30,031 31,117 Derivative assets 6,13 24,337 34,915 417,900 422,906

Total assets W 21,964,162 21,907,263 See accompanying notes to the condensed consolidated interim financial statements.

Hyundai Capital Services, Inc. Condensed Consolidated Interim Statements of Financial Position, Continued As of September 30, 2013 and December 31, 2012 (Unaudited)

4

(In millions of won) Notes September 30,

2013 December 31,

2012 Liabilities Borrowings 6,10 Borrowings W 1,912,304 2,213,252 Bonds 14,873,478 14,802,390 16,785,782 17,015,642

Other liabilities Non-trade payables 6 305,602 340,436 Accrued expenses 6 157,583 159,742 Unearned revenue 44,006 51,832 Withholdings 6 30,656 38,343 Income Taxes Payable 48,814 70,888 Defined benefit liability 11 19,720 12,988 Leasehold deposits received 6 727,827 812,975 Deferred income tax liabilities 55,530 59,899 Provisions 12 2,006 2,017 Derivative liabilities 6,13 386,881 302,750

1,778,625 1,851,870 Total liabilities 18,564,407 18,867,512

Equity Issued capital 496,537 496,537 Capital surplus Paid-in capital in excess of par value 369,339 369,339 Other share premium 38,200 38,200

407,539 407,539 Accumulated other comprehensive income and loss 22 Unrealized gain on valuation of available-

for-sale securities 3,388 1,002Accumulated comprehensive loss of equity method investees (1,669) (2,540)

Unrealized gain on valuation of derivatives 13 2,500 2,125

Cumulative effect of overseas operation translations (1,214) (872)

Loss on actuarial valuation (12,590) (13,147) (9,585) (13,432)

Retained earnings 14 2,505,185 2,148,998Total equity attributable to owners of the Company 3,399,676 3,039,642

Non-controlling interests 79 109 Total equity 3,399,755 3,039,751 Total liabilities and equity W 21,964,162 21,907,263 See accompanying notes to the condensed consolidated interim financial statements.

and Subsidiaries

Hyundai Capital Services, Inc. and Subsidiaries Condensed Consolidated Interim Statements of Comprehensive Income For the three and nine-month periods ended September 30, 2013 and 2012 (Unaudited)

5

(In millions of won, except earnings per share information) Notes 2013 2012

Three-month period ended

Nine-month period ended



Operating revenue Interest income 15 Interest on bank deposits W 6,659 21,742 12,048 36,442 Other interest income 390 1,114 362 1,793

7,049 22,856 12,410 38,235

Gain on valuation and disposal of securities

677 2,072 1,276 3,053

Income on loans 15,16 375,227 1,133,038 382,306 1,128,716 Income on installment financial receivables

15,16 62,179 185,480 86,297 281,538

Income on leases 15,16 223,622 676,699 234,010 680,937 Gain (loss)on disposal of loans

41,968 53,288 (4) 53,615

Gain on foreign currency transactions

Gain on foreign exchanges translation

72,804 122,582 79,771 146,761

Gain on foreign currency transactions

844 1,886 21,349 40,160

73,648 124,468 101,120 186,921 Dividend income 2,044 4,632 2,057 4,888 Other operating income

Gain (loss) on valuation of derivatives (286,316) 28,347 (13,028) 2,933

Gain on derivatives transactions 4,108 20,000 263 3,718

Others 17 33,350 122,146 41,306 107,369 (248,858) 170,493 28,541 114,020

Total operating revenue W 537,556 2,373,026 848,013 2,491,923 See accompanying notes to the condensed consolidated interim financial statements.

Hyundai Capital Services, Inc. and Subsidiaries Condensed Consolidated Interim Statements of Comprehensive Income, Continued For the three and nine-month periods ended September 30, 2013 and 2012 (Unaudited)

6






Operating expenses Interest expenses 15 W (196,636) (599,025) (226,705) (681,635)

Lease expenses 16 (125,977) (377,024) (130,888) (383,634) Provision for loss 5 (107,248) (311,204) (81,580) (261,288) Loss on foreign currency transactions

Income (loss) on foreign exchange translation

286,670 (28,389) 12,857 (3,112)

Loss on foreign currency transactions

(3,531) (19,071) (861) (4,316)

283,139 (47,460) 11,996 (7,428)

General and administrative expenses

18 (165,415) (480,717) (156,092) (438,421)

Other operating expenses

Loss on valuation of derivatives

(73,291) (122,444) (79,649) (146,638)

Loss on derivatives transactions

(761) (2,046) (20,884) (39,718)

Others (11,299) (42,528) (12,658) (50,293) (85,351) (167,018) (113,191) (236,649)

Total operating expenses (397,488) (1,982,448) (696,460) (2,009,055)

Operating income 140,068 390,578 151,553 482,868 Non-operating incomes 19 1,931 90,503 2,595 8,832 Non-operating expenses 19 (531) (4,453) (6,579) (8,236) Profit before income taxes 141,468 476,628 147,569 483,464 Income tax expense 20 (33,434) (120,441) (34,730) (125,330) Profit for the period W 108,034 356,187 112,839 358,134 Profit for the period attributable to: Owners of the Company W 108,034 356,187 112,839 358,134 Non-controlling interests - - - -

W 108,034 356,187 112,839 358,134 See accompanying notes to the condensed consolidated interim financial statements.

Hyundai Capital Services, Inc. and Subsidiaries Condensed Consolidated Interim Statements of Comprehensive Income, Continued For the three and nine-month periods ended September 30, 2013 and 2012 (Unaudited)

7






Other comprehensive income(loss), net of income taxes

22 Items that will not be reclassified to profit or loss:

Gain(loss) on actuarial valuation

W (108) 557 (1,748) (2,702)

Items that are or may be reclassified subsequently to profit or loss:

Net change in unrealized

fair value of available-for-sale financial securities

1,325 2,386 (4) 583 Other comprehensive income(expense) of equity method investees

(2,403) 871 (7) (677)Net change in unrealized fair value of derivatives

58,522 375 (19,796) 36,564

Effect of overseas operation translations

587 (342) 46 (397)

Total other comprehensive income (loss), net of income tax

57,923 3,847 (21,509) 33,371

Total comprehensive income for the period

W 165,957 360,034 91,330 391,505

Total comprehensive income attributable to:

Owners of the Company W 165,957 360,034 91,330 391,505Non-controlling interests - - - - W 165,957 360,034 91,330 391,505

Earnings per share 21

Basic and diluted earnings per share

W 1,088 3,587 1,136 3,606

See accompanying notes to the condensed consolidated interim financial statements.

Hyundai Capital Services, Inc. and Subsidiaries Condensed Consolidated Interim Statements of Changes in Equity For the nine-month periods ended September 30, 2013 and 2012 (Unaudited)

8

(In millions of won)

Issued capital

Capital surplus

Accumulatedother

comprehensive loss

Retained earnings

TotalAttributable

to Equity holders of

the Company

Non-controllinginterests

Total equity

Balances as of January 1, 2012 (Restated) W 496,537 407,539 (59,339) 1,811,642 2,656,379 109 2,656,488

Total comprehensive income (loss)

Profit for the period - - - 358,134 358,134 - 358,134 Other comprehensive income Net change in unrealized fair value of available-for-sale securities - - 583 - 583 - 583

Other comprehensive income of equity method investees - - (677) - (677) - (677)

Net change in unrealized fair value derivatives - - 36,564 - 36,564 - 36,564

Effect of overseas operation translations - - (397) - (397) - (397)

Loss on actuarial valuation - - (2,702) - (2,702) - (2,702) Total comprehensive income for

the period - - 33,371 358,134 391,505 - 391,505

Balances as of September 30, 2012 W 496,537 407,539 (25,968) 2,169,776 3,047,884 109 3,050,993


Hyundai Capital Services, Inc. and Subsidiaries Condensed Consolidated Interim Statements of Changes in Equity, Continued For the nine-month periods ended September 30, 2013 and 2012 (Unaudited)

9

(In millions of won)

Issued capital

Capital surplus

Accumulated other

comprehensive loss

Retained earnings

Total Attributable

to Equity holders of

the Company

Non-controllinginterests

Total equity

Balances as of January 1, 2013 (Restated) W 496,537 407,539 (13,432) 2,148,998 3,039,642 109 3,039,751

Total comprehensive income

(loss) Profit for the period - - - 356,187 356,187 - 356,187 Other comprehensive income Net change in unrealized fair value of available-for-sale securities - - 2,386 - 2,386 - 2,386

Other comprehensive income of equity method investees - - 871 - 871 - 871

Net change in unrealized fair value derivatives - - 375 - 375 - 375

Effect of overseas operation translations - - (342) - (342) - (342)

Gain on actuarial valuation - - 557 - 557 - 557 Total comprehensive income for the period - - 3,847 356,187 360,034 - 360,034

Transactions with owners Liquidation of special purpose entity - - - - - (30) (30)

Balances as of September 30, 2013 W 496,537 407,539 (9,585) 2,505,185 3,399,676 79 3,399,755


Hyundai Capital Services, Inc. and Subsidiaries Condensed Consolidated Interim Statements of Cash Flows For the nine-month periods ended September 30, 2013 and 2012 (Unaudited)

10

(In millions of won) Notes 2013 2012

Cash flows from operating activities Cash generated from operations 23 W 596,281 1,335,845Interest received 21,760 40,212Interest paid (545,525) (626,100)Dividends received 4,632 4,888 Income taxes paid (147,944) (148,170)

Net cash provided by (used in) operating activities (70,796) 606,675 Cash flows from investing activities

Liquidation of special purpose entity (30) -Dividends from associates 533 733 Acquisition of investments in associates (2,552) (51,935)Business combination - (161,666)Acquisition of land (2,009) (38,305)Proceeds from disposal of land 114,486 -Acquisition of building (224) (22,053)Proceeds from disposal of building 60,946 -Acquisition of structures - (641)Proceeds from disposal of structures 2,469 -Proceeds from disposal of vehicles (391) (2,704)Acquisition of vehicles 184 125 Proceeds from disposal of fixtures and furniture (6,255) (12,952)Acquisition of fixtures and furniture 130 165 Acquisition of other tangible assets (48) (42)Increase in construction in progress (29,405) (1,759)Acquisition of intangible assets (6,702) (5,230)Decrease in leasehold deposits 15,398 5,027 Increase in leasehold deposits (13,197) (1,027)

Net cash provided by (used in) investing activities 133,333 (292,264)Cash flows from financing activities

Proceeds from borrowings 2,028,500 1,898,222 Repayments of borrowings (2,330,000) (2,118,654)Issuance of bonds 3,052,698 3,751,742 Repayments of bonds (2,901,804) (3,995,327)

Net cash used in financing activities (150,606) (464,017) Effect of exchange rate fluctuations on cash and cash equivalents held (18) (7)

Net decrease in cash and cash equivalents (88,087) (149,613) Cash and cash equivalents at beginning of period 1,302,161 1,455,433 Cash and cash equivalents at end of period W 1,214,074 1,305,820 See accompanying notes to the condensed consolidated interim financial statements.

Hyundai Capital Services, Inc. and Subsidiaries Notes to the Condensed Consolidated Interim Financial Statements September 30, 2013 (Unaudited) (In millions of won)

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1. Reporting Entity Hyundai Capital Services, Inc. (the “Company”) was established on December 22, 1993, to engage in installment financing, facilities leasing and new technology financing. The Company changed its trade name from Hyundai Auto Finance Co., Ltd. to Hyundai Financial Services Co. on April 21, 1995, and changed its trade name once again to Hyundai Capital Services, Inc. on December 30, 1998. In accordance with the Monopoly Regulation and Fair Trade Act, the Company is incorporated into Hyundai Motor Company Group. As of September 30, 2013, the Company’s operations are headquartered in Yeouido, Seoul. Its major shareholders are Hyundai Motor Company and GE International Holdings Corporation with 56.47% and 43.30% ownership, respectively. The condensed consolidated interim financial statements included the accounts of the Company, as the parent company, certain Autopia SPC trusts and other subsidiaries (collectively, the “Group”), while HK Mutual Savings Bank and five other entities are associates. Subsidiaries as of September 30, 2013 and December 31, 2012, are as follows. The Group has the substantial power over the subsidiaries established as special purpose entities for asset securitization even though its ownership interests over the subsidiaries do not exceed 50%.

Location

Ratio of ownership September 30, 2013 December 31, 2012

Special Purpose Entities

Korea 0.9% Autopia Thirty-fifth SPC (trust) Autopia Thirty-fifth SPC (trust) Autopia Thirty-sixth SPC (trust) Autopia Thirty-sixth SPC (trust) - Autopia Thirty-seventh SPC (trust) - Autopia Thirty-ninth SPC (trust) - Autopia Fortieth SPC (trust) Autopia Forty-second SPC (trust) Autopia Forty-second SPC (trust) Autopia Forty-third SPC (trust) Autopia Forty-third SPC (trust) Autopia Forty-fourth SPC (trust) Autopia Forty-fourth SPC (trust) Autopia Forty-fifth SPC (trust) Autopia Forty-fifth SPC (trust) Autopia Forty-sixth SPC (trust) Autopia Forty-sixth SPC (trust) Autopia Forty-seventh SPC (trust) Autopia Forty-seventh SPC (trust) HB third SPC HB third SPC 0.5% Autopia Forty-ninth SPC (trust) Autopia Forty-ninth SPC (trust) Autopia Fiftieth SPC (trust) -

Limited liability company

Germany 100% Hyundai Capital Europe GmbH

(*) Hyundai Capital Europe GmbH (*)

India 100% Hyundai Capital India Private

Limited Hyundai Capital India Private Limited

Brasil 100% Hyundai Capital Brasil LTDA -

(*) It holds 100% shares of Hyundai Capital Services Limited Liability Company.


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1. Reporting Entity, Continued Subsidiaries that are included and excluded from the Group’s consolidated interim financial statement are as follows:

Change Reason Subsidiaries Included

Establishment Hyundai Capital Brasil LTDA

Autopia Fiftieth SPC (trust) Autopia Fifty-fisrt SPC (trust)

Excluded Liquidation Autopia Thirty-seventh SPC (trust)

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

2. Accounting Policies

2.1 Basis of Preparation (1) Statement of compliance These condensed consolidated interim financial statements were prepared in accordance with K-IFRS (No. 1034 Interim Financial Reporting) as part of the period covered by the Group’s K-IFRS consolidated annual financial statements, and do not include all of the disclosures required for full consolidated annual financial statements. Selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in financial position and performance of the Group since the last annual consolidated financial statements were prepared as of and for the year ended December 31, 2012. These condensed consolidated interim financial statements have been prepared in accordance with the Korean IFRS standards and interpretations issued and effective or issued and early adopted as of September 30, 2013.

(2) Use of estimates and judgements The preparation of the financial statements in conformity with K-IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. In preparing these condensed consolidated interim financial statements, the significant judgments made by management in applying the Group’s accounting policies and the key sources of estimation uncertainty were the same as those that were applied to the consolidated financial statements as of and for the year ended December 31, 2012.


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2. Accounting Policies, Continued

2.2 Significant Accounting Policies (1) Changes in accounting policies Except as described below, the accounting policies applied by the Group in these condensed consolidated interim financial statements are the same as those applied by the Group in its consolidated financial statements as of and for the year ended December 31, 2012. The following changes in accounting policies are also expected to be reflected in the Group’s consolidated financial statements as at and for the year ending December 31, 2013.

(i) Amendments to K-IFRS No. 1001 Presentation of Financial Statements

The amendments require presenting items in other comprehensive income on the basis of whether they are potentially reclassifiable to profit or loss subsequently (reclassification adjustments). The standards are effective for annual periods beginning on or after January 1, 2013.

(ii) K-IFRS No. 1110 Consolidated Financial Statements

The standard outlines the requirements for the preparation and presentation of consolidated financial statements, requiring entities to consolidate entities it controls. Control requires exposure or rights to variable returns and the ability to affect those returns through power over an investee. The standards are effective for annual periods beginning on or after January 1, 2013.

(iii) K-IFRS No. 1112 Disclosure of Interests in Other Entites

The standard brings together into a single standard for all the disclosure requirements about an entity’s interests in subsidiaries, joint arrangements, associates and unconsolidated structured entities. The standard requires the disclosure of information about the nature, risks and financial effects of these interests. The standards are effective for annual periods beginning on or after January 1, 2013.

(iv) Amendments to K-IFRS No. 1019 Employee Benefits

The standard requires recognition of actuarial gains and losses immediately in other comprehensive income and to calculate expected return on plan assets based on the rate used to discount the defined benefit obligation. The standard will be applied retrospectively for the Group’s annual periods beginning on or after January 1, 2013.

(v) K-IFRS No. 1113 Fair Value Measurement

The standard defines fair value and a single framework for fair value, and requires disclosures about fair value measurements. The standard will be applied prospectively for the Group’s annual periods beginning on or after January 1, 2013.


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(2) Impact of change in accounting policies

(i) Amendments to K-IFRS No. 1019 Employee Benefits The impact of amendments to K-IFRS No. 1019 Employee Benefits is as follows: The following table summarises the adjustments made to the Group's statements of financial position at December 31, 2012.

December 31, 2012

As previously reported Amendments As restated

Accumulated other comprehensive loss W (285) (13,147) (13,432)

Retained earnings 2,135,851 13,147 2,148,998 The following table summarises the adjustments made to the Group’s statements of comprehensive income for the nine-month period ended September 30, 2012.

September 30, 2012


General and administrative expenses W 442,985 (3,564) 438,421Income taxes 124,468 862 125,330Other comprehensive income 36,074 (2,702) 33,372

(ii) Amendments to K-IFRS No. 1001 Presentation of Financial Statements

The Group retrospectively applied the amendment to K-IFRS No. 1001 Presentation of Financial Statements, for which the impact is as follows:

September 30, 2012


Other operating income W 110,975 (3,606) 107,369Other operating expenses 52,558 (2,265) 50,293Gain on disposal of property and equipment - 30 30

Miscellaneous revenues - 3,576 3,576Loss on disposal of property and equipment - 485 485

Donation - 1,294 1,294Miscellaneous losses - 486 486


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(3) New standards and interpretations not yet adopted The following new standards, interpretations and amendments to existing standards have been published that are mandatory for the Group for annual periods beginning after January 1, 2013, and the Group has not early adopted them. (i) K-IFRS No. 1032 Financial Instruments: Presentation

The amendments address inconsistencies in current practice when applying the offsetting criteria in K-IFRS No. 1032 Financial Instrument: Presentation. The amendments clarify the meaning of ‘currently has a legally enforceable right of set-off’ The amendments are effective for annual periods beginning on or after January 1, 2014 and are required to be applied retrospectively.

3. Securities

Securities as of September 30, 2013 and December 31, 2012, are as follows:

2013 2012Available-for-sale securities Equity securities Marketable equity securities W 10,635 6,856 Unlisted equity securities 10,567 11,165 21,202 18,021 Debt securities Government and public bonds 1,996 2,262 23,198 20,283 Investments in associates 102,632 98,796 W 125,830 119,079


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3. Securities, Continued

3.1 Available-for-sale securities Available-for-sale securities as of September 30, 2013 and December 31, 2012, are as follows: (1) Marketable equity securities

Book value

Number of shares

Ownership(%)

Acquisition cost 2013 2012

Marketable equity securities NICE Information Service 1,365,930 2.25 W 3,312 4,146 3,729NICE Holdings 491,620 1.30 3,491 6,489 3,127

Unlisted equity securities Hyundai Finance Corp. (*) 1,700,000 9.29 9,888 10,406 11,065Korean Egloan, Inc. 4,000 3.12 100 100 100Golfclub Lich AG 14 0.59 60 61 -

W 16,851 21,202 18,021

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

(2) Debt securities

Book value

Issuer

Interest rate (%)

Acquisition cost 2013 2012

Government and public bonds

Metropolitan Rapid Transit and others 2.0, 2.5 W 1,877 1,996 2,262


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3. Securities, Continued

3.2 Investments in associates (1) Details of investments in associates as of September 30, 2013 and December 31, 2012, are as

follows: 2013

Number of shares

Ownership(%) Acquisition

costNet asset

value Book value

HK Mutual Savings Bank (*) 4,990,438 19.99 W 45,719 37,100 49,348

HI Network, Inc.(*) 13,332 19.99 76 409 409

Korea Credit Bureau(*) 140,000 7.00 3,800 3,325 4,362Hyundai capital Germany GmbH 600,200 30.01 1,065 1,536 1,536

Hyundai Capital UK Ltd. 7,497,500 29.99 13,401 10,671 10,671Beijing Hyundai Auto

Finance Co., Ltd. - 46.00 41,085 36,306 36,306

W 105,146 89,347 102,632

2012

Number of shares

Ownership(%) Acquisition

costNet asset

value Book value

HK Mutual Savings Bank (*) 4,990,438 19.99 W 45,719 38,922 51,170HI Network, Inc.(*) 13,332 19.99 76 861 861Korea Credit Bureau(*) 140,000 7.00 3,800 2,948 3,985Hyundai capital Germany GmbH 600,200 30.01 1,065 1,183 1,183

Hyundai Capital UK Ltd. 5,998,000 29.99 10,850 6,197 6,197Beijing Hyundai Auto

Finance Co., Ltd. - 46.00 41,085 35,400 35,400 W 102,595 85,511 98,796

(*) The Group’s shareholdings are less than 20%. However, the Group is able to significantly exert

influence through its involvement in the financial and operating processes, and thus the equity method is applied.


18

3. Securities, Continued (2) Changes of investments in associates for the nine-month periods ended September 30, 2013 and

2012 are as follows:

2013

Beginning balance

Acquisi -tion

Gain (loss) on valuation

Changes in accumulated

other comprehen

-sive Gain(loss) Dividends

Ending balance

HK Mutual Savings Bank W 51,170 - (158) (67) (1,597) 49,348

HI Network, Inc. 861 - 81 - (533) 409Korea Credit Bureau 3,985 - 377 - - 4,362Hyundai Capital

Germany GmbH 1,183 - 325 28 - 1,536Hyundai Capital UK

Ltd. 6,197 2,552 1,810 112 - 10,671Beijing Hyundai Auto

Finance Co., Ltd. 35,400 - 107 799 - 36,306 W 98,796 2,552 2,542 872 (2,130) 102,632

2012

Beginning

balance Acquisi

-tion

Gain (loss) on valuation

Changes in accumulated

other comprehen-sive Loss Dividends

Ending balance

HK Mutual Savings Bank W 45,735 - 4,352 (421) - 49,666

HI Network, Inc. 1,003 - 469 - (733) 739Korea Credit Bureau 3,965 - 378 (256) - 4,087Hyundai Capital

Germany GmbH 1,065 - 27 - - 1,092Hyundai Capital UK

Ltd. - 10,850 (4,135) - - 6,715Beijing Hyundai Auto

Finance Co., Ltd. - 41,085 (1,836) - - 39,249 W 51,768 51,935 (745) (677) (733) 101,548

(3) Goodwill related to associates as of September 30, 2013 and December 31, 2012, are as follows:

2013 2012

HK Mutual Savings Bank W 12,248 12,248Korea Credit Bureau 1,037 1,037 W 13,285 13,285


19

3. Securities, Continued (4) Summary of financial information of investees as of September 30, 2013 and December 31, 2012,

for assets and liabilities, and for the nine-month periods ended September 30, 2013 and 2012, for revenue and income, follows:

2013

Assets LiabilitiesOperating revenue

Profit (loss) for the period

HK Mutual Savings Bank (*) W 2,398,953 2,213,456 277,655 (918)HI Network, Inc. 5,022 2,978 12,424 543 Korea Credit Bureau 58,525 11,027 35,618 5,906 Hyundai Capital Germany GmbH 6,106 987 2,479 917 Hyundai Capital UK Ltd. 1,151,060 1,115,478 37,646 6,036 Beijing Hyundai Auto Finance Co., Ltd. 633,540 554,614 22,336 (2,076)

(*) Although HK Mutual Savings Bank’s fiscal year is from July 2012 to June 2013, the asset and

liability amounts are as of September 30, 2013, and its operating revenue and profit for the period amounts are from January 1, 2013 to September 30, 2013.

2012

Assets LiabilitiesOperating revenue

Profit (loss) for

the periodHK Mutual Savings Bank (*) W 2,655,804 2,461,195 319,118 21,760 HI Network, Inc. 7,629 3,322 14,088 2,469 Korea Credit Bureau 55,944 13,834 33,652 5,901 Hyundai Capital Germany GmbH 4,524 581 764 91 Hyundai Capital UK Ltd. 596,343 575,678 4,528 (13,789)Beijing Hyundai Auto Finance Co., Ltd. 80,502 3,546 1,780 (4,080)

(*) Although HK Mutual Savings Bank’s fiscal year is from July 2011 to June 2012, the asset and

liability amounts are as of December 31, 2012, and its operating revenue and profit for the period amounts are from January 1, 2012 to September 30, 2012.


20

4. Financial Receivables

Financial receivables as of September 30, 2013 and December 31, 2012, are as follows:

2013

Principal

Deferred loan

origination fees and

costs (Direct

profit for leased assets)

Present value

discounts

Allowance for doubtful

accounts Carrying amount

Loans receivable

Loan W 12,440,737 (29,200) (1,149) (311,902) 12,098,486

Installment financial assets Auto 3,834,246 9,309 - (33,582) 3,809,973 Durable goods 1 - - - 1 Mortgage 3,845,276 9,327 - (33,858) 3,820,745 3,834,246 9,309 - (33,582) 3,809,973

Lease receivables Finance lease receivables 2,926,763 85,987 - (42,506) 2,970,244

Cancelled lease receivables 10,138 - - (9,498) 640

2,936,901 85,987 - (52,004) 2,970,884 W 19,222,914 66,114 (1,149) (397,764) 18,890,115


21

4. Financial Receivables, Continued

2012

Principal

Deferred loan

origination fees and

costs (Direct profit

for leased assets)

Present value

discounts

Allowance for doubtful

accounts Carrying amount

Loans receivable

Loan W 12,498,483 (115,800) (1,458) (312,829) 12,068,396

Installment financial assets Auto 3,798,433 (42,936) - (33,207) 3,722,290 Durable goods 1 - - - 1 Mortgage 16,486 30 - (277) 16,239 3,814,920 (42,906) - (33,484) 3,738,530

Lease receivables Finance lease receivables 2,838,134 (782) - (32,423) 2,804,929

Cancelled lease receivables 6,951 - - (6,458) 493

2,845,085 (782) - (38,881) 2,805,422 W 19,158,488 (159,488) (1,458) (385,194) 18,612,348


22

5. Allowance for Loan Loss

Changes in allowance for doubtful accounts for the nine-month periods ended September 30, 2013 and 2012, are as follows:

2013

Loan receivables

Installment financial assets

Lease receivables

Other assets Total

Beginning balance W 312,829 33,484 38,881 18,740 403,934 Amounts written off (337,247) (30,794) (591) (6,076) (374,708)Recoveries of

amounts previously written off 67,465 8,140 81 7,623 83,309

Unwinding of discount (6,013) (326) (206) - (6,545)Additional (reversed)

allowance 275,475 23,362 14,416 (2,049) 311,204 Others (607) (8) (578) (1) (1,194)Ending balance W 311,902 33,858 52,003 18,237 416,000

2012

Loan receivables

Installment financial assets

Lease receivables

Other assets Total

Beginning balance W 281,184 38,129 25,563 17,284 362,160 Amounts written off (288,046) (29,985) (64) (5,313) (323,408)Recoveries of

amounts previously written off 66,060 7,817 327 6,545 80,749

Unwinding of discount (5,537) (232) (154) - (5,923)Others 6,834 (21) 4,905 - 11,718 Additional allowance 239,452 15,389 6,244 203 261,288 Ending balance W 299,947 31,097 36,821 18,719 386,584


23

6. Financial Instruments

The fair values of financial instruments as of September 30, 2013 and December 31, 2012, are as follows:

2013 2012 Book value Fair value Book value Fair valueAssets Financial assets Cash and due from banks W 1,214,089 1,214,089 1,302,173 1,302,173 Available-for-sale securities 23,198 23,198 20,283 20,283 Loans receivable 12,098,486 12,287,669 12,068,396 12,265,070 Installment financial assets 3,820,745 3,844,524 3,738,530 3,775,052 Lease receivables 2,970,884 2,929,121 2,805,422 2,781,545 Derivative assets 24,337 24,337 34,915 34,915 Account receivables 99,610 99,610 113,947 113,947 Accrued revenues 93,920 93,920 101,480 101,480 Accrued revenues 30,031 29,871 31,118 31,280 W 20,375,300 20,546,339 20,216,264 20,425,745

Liabilities Financial liabilities Borrowings W 1,912,304 1,923,570 2,213,252 2,232,707 Bonds 14,873,478 15,272,961 14,802,390 15,418,078 Derivative liabilities 386,881 386,881 302,750 302,750 Account payables(*) 290,811 290,811 321,373 321,373 Accrued expenses 157,583 157,583 159,742 159,742 Withholdings(*) 13,767 13,767 17,546 17,546 Withholdings(*) 727,827 731,237 812,975 822,193 W 18,362,651 18,776,810 18,630,028 19,274,389

(*) Excluding taxes and dues


24

6. Financial Instruments, Continued The fair value hierarchy of financial assets and liabilities carried at fair value as of September 30, 2013 and December 31, 2012, are as follows: 2013 Book

value Fair

value Fair value hierarchy (*)

Level 1 Level2 Level 3 Financial assets

Available-for-sale securities W 23,198 23,198 10,635 1,996 10,567 Derivative assets 24,337 24,337 - 24,337 -

47,535 47,535 10,635 26,333 10,567 Financial liabilities

Derivative liabilities W 386,881 386,881 - 386,881 - 2012 Book

value Fair

value Fair value hierarchy (*)

Level 1 Level2 Level 3 Financial assets

Available-for-sale securities W 20,283 20,283 6,856 2,262 11,165 Derivative assets 34,915 34,915 - 34,915 -

55,198 55,198 6,856 37,177 11,165 Financial liabilities

Derivative liabilities W 302,750 302,750 - 302,750 - (*) The levels of fair value hierarchy have been defined as follows:

- Level 1: Quoted prices in active markets for identical assets or liabilities. Listed stocks and derivatives

- Level 2: Inputs for the asset or liability included within valuation techniques that are observable market data. Most bonds issued in Korean won and foreign currency, general unlisted derivatives like swap, forward, option

- Level 3: Inputs for the asset or the liability that are not based on observable market data. Unlisted stocks, complicated structured bonds, complicated unlisted derivative


25

7. Derecognition of Financial Assets

The Group issued senior and subordinated asset-backed securities based on loans and the associated securitized debts have recourse only to the transferred assets. Details of financial assets transferred and not derecognized as of September 30, 2013 and December 31, 2012 are as follows:

2013 2012

Book value of assets Loans receivable W 2,373,628 2,279,886 Installment financial assets 950,814 1,329,882Lease receivables 246,248 -

3,570,690 3,609,768Book value of related liabilities(*) (2,220,518) (2,255,036) Liabilities having right of resources on transferred Assets Fair value of assets 3,585,264 3,658,729 Fair value of related liabilities(*) (2,247,554) (2,307,077) Net position W 1,337,710 1,351,652

(*) Related liabilities aggregates senior and subordinated asset-backed securities with the related

Derivative assets.


26

8. Property and Equipment

Changes in property and equipment for the nine-month periods ended September 30, 2013 and 2012, are as follows: 2013

Beginning

balance Acquisition Replacement Disposal Depreciation Ending balance

Land W 143,729 2,009 3,172 (40,016) - 108,894 Buildings 116,655 224 1,256 (52,866) (1,808) 63,461 Structures 3,192 - - (2,469) (31) 692 Vehicles 2,478 391 - (136) (665) 2,068 Fixture and

furniture 45,054 6,255 2,828 (198) (15,235) 38,704

Others 2,033 48 (76) - - 2,005 Construction in

progress 10,337 29,404 (7,180) - - 32,561 W 323,478 38,331 - (95,685) (17,739) 248,385 2012

Beginning

balance Acquisition Replacement Disposal Depreciation Ending balance

Land W 105,424 38,305 - - - 143,729 Buildings 97,939 22,053 - - (2,438) 117,554 Structures 2,558 641 - - (57) 3,142 Vehicles 761 2,704 - (120) (620) 2,725 Fixture and

furniture 53,770 12,952 12 (625) (15,722) 50,387 Others 1,994 42 - - (6) 2,030 Construction in

progress 2,986 1,759 (40) - - 4,705 W 265,432 78,456 (28) (745) (18,843) 324,272


27

9. Intangible Assets

Changes in intangible assets for the nine-month periods ended September 30, 2013 and 2012, are as follows:

2013

Beginning

balance Increase Replacement Amortization Ending balance

Goodwill W 1,429 - - - 1,429 Development costs 28,198 6,701 - (7,365) 27,534

Rights of trademark 16 - - (10) 6

Other intangible assets 34,520 - - (1,413) 33,107

W 64,163 6,701 - (8,788) 62,076

2012

Beginning

balance Increase Replacement Amortization Ending balance

Goodwill(*) W - 1,429 - - 1,429 Development costs 28,635 5,163 98 (6,082) 27,814

Rights of trademark 30 - - (10) 20

Other intangible assets 36,452 67 (70) (1,449) 35,000

W 65,117 6,659 28 (7,541) 64,263

(*) Increase through business combination

10. Borrowings Changes in borrowings for the nine-month periods ended September 30, 2013 and 2012, are as follows:

2013 2012

Beginning balance W 17,015,642 17,772,368 Borrowing 5,081,198 5,649,965 Increase through business combination - 168,654 Repayment (5,231,803) (6,113,981)Others (79,255) (446,646)Ending balance W 16,785,782 17,030,360


28

11. Defined Benefit Liability The amounts of defined benefit plans recognized in the statements of financial position as of September 30, 2013 and December 31, 2012, are as follows:

2013 2012

Present value of funded obligations W 67,547 63,847 Fair value of plan assets (*) (47,827) (50,859)Defined benefit liability W 19,720 12,988

(*) As of September 30, 2013, contribution to the National Pension Fund of W 43 million is included. Details of the amounts recognized in the comprehensive income statements for the nine-month periods ended September 30, 2013 and 2012, are as follows :

2013 2012Current service cost W 9,505 8,741 Interest cost 1,558 1,491 Expected return on plan assets (1,209) (852) W 9,854 9,380

12. Provisions for Unused Loan Commitments

Changes in provisions for unused loan commitments for the nine-month periods ended September 30, 2013 and 2012, are as follows:

2013 2012

Beginning balance W 2,017 10,445 Reversals (11) (8,221)Ending balance W 2,006 2,224


29

13. Derivative Financial Instruments and Hedge Accounting Trading derivatives as of September 30, 2013 and December 31, 2012, are as follows:

2013 2012 Assets Liabilities Assets Liabilities

Forward foreign exchange W 2 3 11 2

During the nine-month periods ended September 30, 2013 and 2012, the Group recognized loss on trading derivatives of W 9 million and W 35 million, respectively. Derivatives designated as cash flow hedges as of September 30, 2013 and December 2012, are as follows:

2013 2012

Assets

Liabilities

NotionalPrincipalamounts Assets Liabilities

NotionalPrincipalamounts

Exchange forward W 914 - (68) 2,312 - (199)Interest rate swaps 1,872 5,075 (2,428) 378 7,563 (5,446)

Currency swaps 21,549 381,803 4,996 32,214 295,185 7,770 W 24,335 386,878 2,500 34,904 302,748 2,125

The maximum period the Group is exposed to the variability in future cash flows arising from derivatives designated as cash flow hedges, is expected to be until September 20, 2017. There is no ineffective portion recognized related to cash flow hedge for the nine-month periods ended September 30, 2013 and 2012.


30

14. Equity Details of appropriated and expected reserves for bad loans as of September 30, 2013 and December 31, 2012, are as follows:

2013 2012

Appropriated reserve for bad loans W 273,907 270,220 Expected reserve for bad loans 110,899 3,687 W 384,806 273,907

Transfer to reserve for bad loans and profit for the period in consideration of effect of changes in reserve for bad loans for the nine-month periods ended September 30, 2013 are as follows:

2013Profit for the period W 356,187 Expected transfer to reserve for bad loans (*1) (110,899)Profit for the period in consideration of changes in reserve for bad loans (*2) W 245,288 Profit for the period per share in consideration of changes in reserve for bad loans(in Korean won) W 2,470

(*1) The amount transferred to reserve for bad loans for the nine-month period ended September 30,

2013, is the difference between the balance of reserve for bad loans as of September 30, 2013, and the balance as of December 31, 2012.

(*2) Profit for the period and earnings per share in consideration of changes in reserve for bad loans are not accordance with K-IFRS, and this amount is the sum of the expected transfer to reserve for bad loans before income tax and Profit for the period.


31

15. Net Interest Income

Net interest income for the three-month and nine-month periods ended September 30, 2013 and 2012, consists of:

2013 2012



Three-month period ended Nine-month

period ended

Interest income: Due from Banks W 6,659 21,742 12,048 36,442 Loans receivable 363,256 1,096,619 370,674 1,093,432 Installment financial assets 61,099 182,546 84,944 276,985 Lease receivables (*1) 63,518 189,013 65,389 181,054 Other (*2) 390 1,114 362 1,793

494,922 1,491,034 533,417 1,589,706 Interest expense:

Borrowings 20,108 63,942 26,115 78,831 Bonds 168,379 508,759 189,738 570,159 Other (*2) 8,149 26,324 10,852 32,645

196,636 599,025 226,705 681,635 Net interest income W 298,286 892,009 306,712 908,071

(*1) Includes amortization of present value discount for lease guarantee. (*2) Amortization of present value discount using the effective interest method.

16. Net Commission Income

Net commission income for the three-month and nine-month periods ended September 30, 2013 and 2012, consists of:

2013 2012



Three-month period ended Nine-month

period ended

Commission income Loans receivable W 11,971 36,419 11,633 35,284 Installment financial assets 1,079 2,933 1,353 4,553 Lease receivables 46,670 134,166 41,126 116,909 59,720 173,518 54,112 156,746

Commission expenses Lease expenses 18,048 51,257 8,938 17,998

Net commission income W 41,672 122,261 45,174 138,748


32

17. Others

Others of other operating income for the three-month and nine-month periods ended September 30, 2013 and 2012, consists of:

18. General and Administrative Expenses

General and administrative expenses for the three-month and nine-month periods ended September 30, 2013 and 2012, are as follows:

2013 2012


Nine-monthperiod ended



Income for acquired loans W 12,908 39,903 13,914 40,939Reversal of unused

provision (23) 11 7,031 8,221Gain on settlement of

common expense 4,620 27,465 6,681 24,627Rental income 1,502 4,525 1,519 3,824Other commissions 12,116 35,202 9,654 20,063Reimbursed income for

RVI 1,254 4,545 1,952 5,444Advertising income 263 338 8 49Others 710 10,157 547 4,202

W 33,350 122,146 41,306 107,369

2013 2012





Payroll W 41,101 119,224 42,447 101,760 Severance benefits 3,273 9,875 2,979 9,238 Fringe benefits 9,066 28,966 8,718 27,875 Depreciation 5,854 17,739 6,009 18,843 Advertising 15,186 39,093 9,029 33,428 Travel and transportation 1,388 3,892 1,230 4,152 Communication 4,029 11,530 3,505 10,692 Water, lighting and heating 2,872 8,722 3,015 8,429 Commission 5,472 15,068 5,053 13,972 Sales commission 16,634 54,535 17,101 47,012 Amortization 2,990 8,788 2,541 7,541 Outsourcing service charges 17,205 50,036 17,406 50,626 Rent 11,534 32,319 9,993 28,422 Other expenses 28,811 80,930 27,066 76,431 W 165,415 480,717 156,092 438,421


33

19. Net non-operating income

Net non-operating income for the three-month and nine-month periods ended September 30, 2013 and 2012, consists of:

2013 2012





Non-operating income Gain on equity method valuation W 1,232 2,699 568 5,227

Gain on disposal of tangible assets 1 85,490 - 30

Miscellaneous income 698 2,314 2,207 3,575 1,931 90,503 2,595 8.832

Non-operating expense Loss on equity method valuation - 158 5,971 5,971

Loss on disposal of tangible assets 65 2,961 121 485

Contribution 317 588 298 1,294Miscellaneous loss 150 746 189 486 532 4,295 6,579 8,236

Net non-operating income W 1,399 86,208 (3,984) 596

20. Income Tax

Income tax expense is recognized based on management’s best estimate of the weighted average annual income tax rate expected for the full financial year. The estimated average annual tax rate used for the year ended December 31, 2013, is 25% (the estimated average tax rate for the nine-month period ended September 30, 2012, is 26%).


34

19. Earnings Per Share

(1) Basic earnings per share Basic earnings per share attributable to common stock of equity holders for the three-month and nine-month periods ended September 30, 2013 and 2012, is as follows:

(2) Diluted earnings per share As there was no discontinued operation during the nine-month periods ended September 30, 2013 and 2012, basic earnings per share is the same as basic earnings per share from continuing operations. There are no potential common stocks as of September 30, 2013 and 2012. Therefore, the diluted earnings per share is the same as basic earnings per share for the three-month and nine-month periods ended September 30, 2013 and 2012.

2013 2012





Profit for the period attributable to common stock (In Korean won) (A) W 108,034,094,314 356,186,957,013 12,839,914,159 358,133,713,868

Weighted average of number of outstanding common shares (B)

99,307,435 99,307,435 99,307,435 99,307,435 Basic earnings

per Share (In Korean won) (A/B)

W

1,088 3,587 1,136 3,606


35

20. Other Comprehensive Income

Other comprehensive income for the nine-month periods ended September 30, 2013 and 2012, consists of:

2013

Beginningbalance

Changes

Income tax effects

Ending balance

Reclassifi-

cation of profit or loss

Other changes

Unrealized gain on valuation of available-for-sale financial assets W 1,002 (92) 3,239 (761) 3,388

Accumulated comprehensive loss of equity method investees (2,540) - 871 - (1,669)

Unrealized loss on valuation of derivatives 2,125 3,039 (2,544) (120) 2,500

Loss on exchange differences of foreign operations (872) - (342) - (1,214)

Loss on actuarial valuation (13,147) - 735 (178) (12,590)

W (13,432) 2,947 1,959 (1,059) (9,585)

2012

Beginningbalance

Changes

Income tax effects

Ending balance

Reclassifi-

cation of profit or loss

Other changes

Unrealized gain on valuation of available-for-sale financial assets W (388) - 714 (131) 195

Accumulated comprehensive loss of equity method investees 47 - (676) - (629)

Unrealized loss on valuation of derivatives (50,157) (2,705) 50,942 (11,673) (13,593)

Loss on exchange differences of foreign operations (343) - (397) - (740)

Loss on actuarial valuation (8,498) - (3,564) 863 (11,199)

W (59,339) (2,705) 47,019 (10,941) (25,966)


36

21. Supplemental Cash Flow Information

Cash and cash equivalents in cash flow statements consist of cash in hand, deposits and short-term money-market instruments. Cash and cash equivalents consisting of cash and financial instruments as of September 30, 2013 and December 31, 2012, are as follows:

Cash generated from operations for the nine-month periods ended September 30, 2013 and 2012, is as follows:

2013 2012 Cash W 1 1 Ordinary deposits 215,510 194,944 Current deposits 2,898 3,416 Short-term financial instruments 995,665 1,103,800 W 1,214,074 1,302,161

2013 2012 Profit for the period W 356,187 358,134Adjustments:

Net interest expenses 576,169 643,399 Income tax 120,441 125,330 Gain on disposal of available-for-sale financial assets (2,072) (3,053)Income on loans (16,484) (26,071)Income on installment financial receivables (21,352) (53,027)Lease expenses 281,984 255,531 Gain on foreign exchanges translation (122,582) (146,761)Dividend income (4,632) (4,888)Gain on valuation of derivatives (28,347) (2,933)Gain on disposal of property and equipment (85,490) (30)Gain on equity method valuation (2,542) 744 Provision for loss 311,204 261,288 Loss on foreign exchanges translation 28,389 3,112 Severance benefits 9,875 9,381 Depreciation 17,739 18,843 Amortization of intangible assets 8,788 7,541 Loss on valuation of derivatives 122,444 146,638 Loss on disposal of property and equipment 2,961 485 Reversal of provisions (11) (8,221)Losses on Retirement of Bonds 51 -Other expenses - 53

W 1,196,533 1,227,361


37

21. Supplemental Cash Flow Information, Continued

2013 2012 Changes in operating assets and liabilities

(Increase) in due from banks W (3) -

Decrease in available-for-sale financial assets 2,303 2,036

(Increase) in loans receivable (289,081) (684,701)

(Increase) Decrease in installment financial assets (84,225) 997,356

(Increase) in finance lease receivables (541,493) (534,069)

Decrease in cancelled leased receivables 10,413 7,734

(Increase) in operating leased assets (179,683) (242,924)

Decrease in cancelled leased assets 308,426 228,968

Decrease (increase) in non-trade receivables 15,435 (10,415)

Decrease in accrued revenues 7,596 5,857

(Increase) in advance payments (21,516) (7,651)

(Increase) in prepaid expenses (6,972) (1,241)

Decrease in derivative assets 1,106 29

Increase (decrease) in non-trade Payables (34,835) 5,141

Increase (decrease) in accrued expenses (14,590) 8,778

(Decrease) in unearned revenue (7,825) (4,745)

Increase (decrease) in withholdings (7,686) 9,528 (Decrease) in leasehold deposits received (111,426) (22,080)Payment of severance benefits (5,093) (4,465)Increase (Decrease) in plan assets 2,873 (3,089)Transfer of severance benefits from (to) related parties (163) 303

(956,439) (249,650) W 596,281 1,335,845


38

22. Commitments and Contingencies

(1) Credit Line Agreement Details of unused credit line agreements of the Group as of September 30, 2013 and December 31, 2012, are as follows:

Type Financial institutions 2013 2012

Limit of overdraft Shinhan Bank and 2 other banks W 41,500 41,500 Limit of daily loan Shinhan Bank and 1 other banks 15,000 45,000

W 56,500 86,500

(2) Credit Facility Agreement

The Group has revolving credit facility agreements with several financial institutions as of September 30, 2013 and December 31, 2012. Details of credit facility agreements are as follows:

(*) Relative to the above credit facility agreement, Hyundai Motor Company shall pay GE Capital

European Funding & Co. any amount not paid by the Group, at such time multiplied by the shareholding ratio of Hyundai Motor Company.

There has been no usage of the above credit facility agreements as of September 30, 2013.

Financial institutions 2013 2012

GE Capital European Funding & Co.(*)

Equivalent of USD 0.7 billion in

Euros

Equivalent ofUSD 1 billion in

EurosMIZUHO CORPORATE BANK, LTD., SEOUL BRANCH W 65,000 65,000JPMORGAN CHASE BANK, N.A., SEOUL BRANCH 110,000 110,000CITIBANK KOREA INC. 50,000 50,000Standard Chartered, Seoul Branch 50,000 50,000SOCIETE GENERALE, SEOUL BRANCH 110,000 55,000BANK OF CHINA, SEOUL BRANCH 50,000 30,000DBS BANK LTD., SEOUL BRANCH 150,000 100,000Sumitomo Mitsui Banking Corporation, Seoul Branch 50,000 -BNP Paribas, Seoul Branch 100,000 -Bank of America, N.A, Seoul Branch 20,000 -Credit Agricole Corporate and Investment Bank, SEOUL

BRANCH 100,000 100,000THE ROYAL BANK OF SCOTLAND N.V., SEOUL BRANCH 110,000 110,000ING BANK N.V., SEOUL BRANCH 100,000 -KDB Bank 60,000 60,000Kyobo Life Insurance Co., Ltd. 50,000 50,000Kookmin Bank 200,000 200,000Suhyup Bank 20,000 -CITIBANK, N.A. USD 0.2 billion USD 0.2 billion

The Bank of TOKYO MITSUBISHI UFJ., Ltd. - USD 0.2 billion


39

22. Commitments and Contingencies, Continued (3) Guarantees

Details of guarantees involving third parties as of September 30, 2013 and December 31, 2012, are as follows:

Guarantor Details 2013 2012

Hyundai Motor Company

Joint liabilities on finance leasereceivables (*) W 15 15

Seoul Guarantee Insurance Co., Ltd.

Guarantee for debt collection deposit, others 137,057 154,394

(*) The amounts represent the guaranteed balances as of September 30, 2013 and December 31,

2012, as defined under the joint liability agreement.

The Group carries residual value guarantee insurance with LIG Insurance Co., Ltd. against loss in case unredeemed mortgage loans exceed the recoverable amount from the collateral of the loans. The receivables balance carried insurance and residual value guaranteed by the insurance as of September 30, 2013 and December 31, 2012, are as follows:

(4) Pending significant litigations

Details of pending significant litigations involving the Group as of September 30, 2013, are as follows:

In addition, the Group has filed lawsuits against a number of debtors to collect receivables. The Group's Management does not believe that any of these matters, either individually or in the aggregate, will have a material effect on the consolidated financial position or results of the Group.

Type 2013 2012 Receivables balance W 763,975 795,982The amount of residual value guaranteed by insurance 282,518 300,656

Type Number of litigations Amount of litigations Plaintiff 16 W 564

Defendant 18 714


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23. Related Party Transactions

(1) Relationships between parents and subsidiaries

The parent company is Hyundai Motor Company. Related parties include associates, joint ventures, post-employment benefit plans, members of key management personnel and entities which the Group controls directly or indirectly, has joint control or significant influence over them.

(2) Transactions between related parties

Significant transactions, which occurred in the normal course of business with related companies for the nine-month periods ended September 30, 2013 and 2012, are as follows:

2013 2012 Purchases Disposal Purchases DisposalParent Company W 625,105 - 627,745 -Associates - 38 - -Others 396,226 223,418 418,255 43,220

W 1,021,331 223,456 1,046,000 43,220

Revenue and expenses arising from transactions with related parties for the nine-month periods ended September 30, 2013 and 2012, and receivables and payables as of September 30, 2013 and December 31, 2012, are as follows:

2013 2012 Receivables Payables Receivables PayablesParent Company W 1,860 30,154 4,463 4,440 Associates 172 - 819 -Others 38,665 137,955 45,126 149,055

W 40,697 168,109 50,408 153,495

2013 2012 Revenues(*) Expenses(*) Revenues ExpensesParent Company W 5,552 2,204 2,915 2,173 Associates 1,401 2,651 - -Others 175,808 69,731 38,694 64,453

W 182,761 74,586 41,609 66,626

(*) Gains and losses from disposal of property and equipment, including real estate, to related parties

for the nine-month period ended September 30, 2013 are included, which are amounted to KRW 85.4 billion and KRW 2.8 billion, respectively.


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23. Related Party Transactions, Continued Details of credit granting activities with related parties as of September 30, 2013 are as follows:

Credit grantor Credit borrower Type Amount Period

Hyundai Capital Services, Inc.

Hyundai Card Co., Ltd.

Call loan W 300,000

2012.11.1~ 2013.10.31


Hyundai Commercial Co., Ltd.

Call loan 100,000

2012.11.1~ 2013.10.31

Hyundai Card Co., Ltd.


Call loan 300,000

2012.11.1~ 2013.10.31

With the counterparty’s request, credit is granted when there is surplus fund. As of September 30, 2013, no balance is recognized relating to credit granting activities. The Group has been provided with a credit facility and payment guarantees by GE Capital European Funding & Co. and Hyundai Motor Company, respectively (Note 22).

(3) Key management compensation

Compensation to key management for the nine-month periods ended September 30, 2013 and 2012, consists of:

The key management above consists of directors (including non-permanent directors), who have significant authority and responsibilities for planning, operating and controlling the Group.

24. Financial Risk Management

The Group is exposed to credit risk, liquidity risk and market risk (exchange and rate risk). In order to manage these factors, the Group operates risk management policies and programs that monitor closely and respond to each of the risk factors. The Group uses derivatives to manage specific risks. There was no significant change in the Group's risk management division and policies after December 31, 2012.

Type 2013 2012 Short-term employee benefits W 4,780 3,513 Severance benefits 2,016 1,871

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