Call Girls Chandigarh Just Call 8868886958 Top Class Call Girl Service Available
Audit Report: Hyundai Commercial 1Q12 (English)
1. Hyundai Commercial, Inc. and
Subsidiaries
Interim Consolidated Financial Statements
March 31, 2012
2. Hyundai Commercial, Inc. and Subsidiaries
Index
March 31, 2012
Report on Review of Interim Financial Statements ..........................................................................1-2
Interim Consolidated Financial Statements
Interim Consolidated Statements of Financial Position .........................................................................3-5
Interim Consolidated Statements of Comprehensive Income................................................................6-7
Interim Consolidated Statements of Changes in Equity ....................................................................... 8-9
Interim Consolidated Statements of Cash Flows ....................................................................................10
Notes to the Interim Consolidated Financial Statements...................................................................11-32
3. Report on Review of Interim Financial Statements
To the Shareholders and Board of Directors of
Hyundai Commercial, Inc.
Reviewed Financial Statements
We have reviewed the accompanying interim consolidated financial statements of Hyundai
Commercial, Inc. (the Company) and its subsidiaries. These financial statements consist of
consolidated statement of financial position of the Company and its subsidiaries as of March
31, 2012, and the related consolidated statements of comprehensive income, changes in
equity and cash flows for the three-month periods ended March 31, 2012 and 2011, and a
summary of significant accounting policies and other explanatory notes, expressed in Korean
won.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these interim
consolidated financial statements in accordance with the International Financial Reporting
Standards as adopted by the Republic of Korea (Korean IFRS) 1034, Interim Financial
Reporting, and for such internal control as management determines is necessary to enable
the preparation of interim consolidated financial statements that are free from material
misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to issue a report on these interim consolidated financial statements based
on our reviews.
We conducted our reviews in accordance with the quarterly and semi-annual review
standards established by the Securities and Futures Commission of the Republic of Korea. A
review of interim financial information consists of making inquiries, primarily of persons
responsible for financial and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit conducted in accordance with
auditing standards generally accepted in the Republic of Korea and consequently does not
enable us to obtain assurance that we would become aware of all significant matters that
might be identified in an audit. Accordingly, we do not express an audit opinion.
1
4. Conclusion
Based on our reviews, nothing has come to our attention that causes us to believe the
accompanying interim consolidated financial statements do not present fairly, in all material
respects, in accordance with the Korean IFRS 1034, Interim Financial Reporting.
Others
We audited the consolidated statement of financial position as of December 31, 2011, and the
related statements of comprehensive income, changes in equity and cash flows for the year
ended December 31, 2011, in accordance with auditing standards generally accepted in the
Republic of Korea and expressed an unqualified opinion on those statements dated March 14,
2012. The statement of financial position as of December 31, 2011, presented herein for
comparative purposes, is consistent, in all material respects, with the above audited statement
of financial position as of December 31, 2011.
Review standards and their application in practice vary among countries. The procedures and
practices used in the Republic of Korea to review such interim consolidated financial
statements may differ from those generally accepted and applied in other countries.
Accordingly, this report is for use by those who are informed about Korean review standards
and their application in practice.
Seoul, Korea
May 23, 2012
This report is effective as of May 23, 2012, 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 interim consolidated
financial statements and notes thereto. Accordingly, the readers of the review report should
understand that there is a possibility that the above review report may have to be revised to
reflect the impact of such subsequent events or circumstances, if any.
2
5. Hyundai Commercial, Inc. and Subsidiaries
Interim Consolidated Statements of Financial Position
March 31, 2012 and December 31, 2011
(In Korean won)
March 31, December 31,
2012 2011
Assets
Cash and deposits
Cash and cash equivalents (Note 20) 314,495,886,665 276,009,118,714
Deposits 9,000,000 9,000,000
314,504,886,665 276,018,118,714
Securities (Note 3)
Available-for-sale securities 25,249,021,460 26,848,232,720
Equity method investment 262,577,811,893 147,539,965,125
287,826,833,353 174,388,197,845
Loans receivable (Notes 4, 5, 6 and 7)
Factoring 205,850,000 575,109,250
Allowance for doubtful accounts (2,851,640) (3,163,206)
Loans 2,507,457,406,246 2,408,864,450,819
Allowance for doubtful accounts (18,450,441,678) (18,165,997,032)
2,489,209,962,928 2,391,270,399,831
Installment financial assets (Notes 4, 5, 6 and 7)
Auto installment financing receivables 379,370,074,249 402,435,731,643
Allowance for doubtful accounts (2,411,441,310) (2,700,210,858)
Durable goods installment financing receivables 55,443,932,968 68,855,356,831
Allowance for doubtful accounts (382,174,541) (475,143,590)
432,020,391,366 468,115,734,026
Lease receivables (Note 8) 91,046,771,590 84,053,398,124
Property and equipment (Note 9)
Vehicles 113,102,040 114,731,133
Fixtures and furniture 2,212,202,385 2,382,936,140
Others 410,999,664 410,999,664
2,736,304,089 2,908,666,937
3
6. Hyundai Commercial, Inc. and Subsidiaries
Interim Consolidated Statements of Financial Position
March 31, 2012 and December 31, 2011
(In Korean won)
March 31, December 31,
2012 2011
Other assets
Intangible assets (Note 10) ₩ 2,854,014,129 ₩ 3,072,304,012
Non-trade receivables 26,232,243,316 29,912,441,707
Allowance for doubtful accounts (174,314,124) (218,049,341)
Accrued revenues 15,671,378,095 18,075,550,289
Allowance for doubtful accounts (107,191,099) (112,338,978)
Advance payments 430,437,762 635,365,367
Prepaid expenses 3,000,797,719 3,383,242,667
Leasehold deposits 10,739,617,155 9,963,176,364
Derivative assets (Note 16) 1,380,604,087 1,369,008,885
Others 3,885,995,860 3,885,995,860
63,913,582,900 69,966,696,832
Total assets ₩3,681,258,732,891 ₩3,466,721,212,309
Liabilities and Equity
Borrowings
Borrowings (Note 11) ₩ 730,475,846,697 ₩ 725,523,723,026
Debentures (Note 12) 2,141,877,642,380 1,937,737,884,950
Securitized debts (Note 13) 359,435,856,941 359,361,741,945
3,231,789,346,018 3,022,623,349,921
Other liabilities
Non-trade payables 8,382,323,422 7,907,799,257
Accrued expenses 22,932,992,519 26,857,795,596
Unearned revenue 4,331,133,491 4,869,902,233
Advances 237,543,296 231,248,416
Withholdings 6,506,859,101 3,073,415,790
Accrued income taxes 17,386,439,595 14,047,411,098
Defined benefit liability (Note 14) 2,029,044,421 2,232,465,895
Leasehold deposits received 19,778,332,355 16,493,405,207
Deferred income tax liabilities 17,538,855,085 16,336,206,889
Derivative liabilities (Note 16) 2,659,351,141 2,691,394,681
101,782,874,426 94,741,045,062
Total liabilities 3,333,572,220,444 3,117,364,394,983
4
7. Hyundai Commercial, Inc. and Subsidiaries
Interim Consolidated Statements of Financial Position
March 31, 2012 and December 31, 2011
(In Korean won)
March 31, December 31,
2012 2011
Equity
Common stock (Notes 1 and 17) 100,000,000,000 100,000,000,000
Preferred stock 25,000,000,000 25,000,000,000
125,000,000,000 125,000,000,000
Capital surplus(Note 17)
Paid-in capital in excess of par value 74,608,059,537 74,608,059,537
Accumulated other comprehensive income and
expenses (Note 19)
Loss on valuation of derivatives (370,498,677) (1,082,947,513)
Gain on valuation of available-for-sale
4,680,225,305 6,047,837,848
securities
Accumulated comprehensive income of equity
6,759,493,025 (1,702,584,378)
method investee
11,069,219,653 3,262,305,957
Retained earnings (Note 17) 136,989,413,257 146,466,631,832
Non-controlling interests 19,820,000 19,820,000
Total equity 347,686,512,447 349,356,817,326
Total liabilities and equity ₩3,681,258,732,891 ₩3,466,721,212,309
The accompanying notes are an integral part of these interim consolidated financial statements.
5
8. Hyundai Commercial, Inc. and Subsidiaries
Interim Consolidated Statements of Comprehensive Income
Three-Month Periods ended March 31, 2012 and 2011
(In Korean won)
March 31, March 31,
2012 2011
Operating revenue
Interest income ₩ 2,771,651,435 ₩ 1,107,200,116
Income on loans 65,135,535,375 53,859,750,805
Income on installment financial receivables 12,063,627,224 16,074,074,823
Income on leases 1,677,877,761 1,243,380,418
Gain on disposal of loans 763,113,842 463,061,126
Gain on foreign exchange translations 852,500,000 3,011,500,000
Dividend income 250,000,000 300,000,000
Other operating income 206,267,242 338,313,775
Total operating revenue 83,720,572,879 76,397,281,063
Operating expenses
Interest expenses 39,515,390,596 33,981,587,383
Bad debts expense (Note 5) 4,808,806,861 5,142,117,843
Loss on disposal of loans 615,486,495 137,878,224
Loss on foreign currency transactions - 1,616
General and administrative expenses (Note 18) 14,285,714,760 13,786,786,878
Other operating expenses
Loss on valuation of derivatives 903,755,000 3,011,500,000
Others 673,845,682 425,457,887
1,577,600,682 3,436,957,887
Total operating expenses 60,802,999,394 56,485,329,831
Operating income 22,917,573,485 19,911,951,232
6
9. Hyundai Commercial, Inc. and Subsidiaries
Interim Consolidated Statements of Comprehensive Income
Three-Month Periods ended March 31, 2012 and 2011
(In Korean won)
March 31, March 31,
2012 2011
Non-operating income
Gain on equity method valuation
₩ 10,849,056,508 ₩ 4,102,292,172
(Note 3)
Non-operating expenses
Other non-operating expenses 8,582,824,000 -
Income before income taxes 25,183,805,993 24,014,243,404
Income tax expense (Note 15) 4,676,477,761 6,609,095,951
Net income ₩ 20,507,328,232 ₩ 17,405,147,453
Net income attributable to:
Owners of the parent 20,507,328,232 17,405,147,453
Non-controlling interests - -
20,507,328,232 17,405,147,453
Other comprehensive income,
net of income taxes (Note 19)
Gain on valuation of derivatives 712,448,836 872,054,497
Gain(Loss) on valuation of available-for-
(1,367,612,543) 5,067,118,496
sale financial securities
Other comprehensive income of equity
8,462,077,403 (18,802,707)
method investee
7,806,913,696 5,920,370,286
Total comprehensive income ₩ 28,314,241,928 ₩ 23,325,517,739
Total comprehensive income attributable to:
Owners of the parent 28,314,241,928 23,325,517,739
Non-controlling interests - -
28,314,241,928 23,325,517,739
The accompanying notes are an integral part of these interim consolidated financial statements.
7
10. Hyundai Commercial, Inc. and Subsidiaries
Interim Consolidated Statements of Changes in Equity
Three-Month Periods ended March 31, 2012 and 2011
Accumulated Total
(In Korean won) other attributable to Non-
comprehensive
Capital income and Retained owners of the controlling
Capital stock surplus expenses earnings parent interests Total equity
Balances as of January 1, 2011 100,000,000,000 - (862,281,456) 81,470,127,594 180,607,846,138 9,910,000 180,617,756,138
Total comprehensive income
Net income - - - 17,405,147,453 17,405,147,453 - 17,405,147,453
Other comprehensive income
Gain on valuation of derivatives - - 872,054,497 - 872,054,497 - 872,054,497
Gain on valuation of available-for-
- - 5,067,118,496 - 5,067,118,496 - 5,067,118,496
sale securities
Other comprehensive income of
- - (18,802,707) - (18,802,707) - (18,802,707)
equity method investee
Total comprehensive income - - 5,920,370,286 17,405,147,453 23,325,517,739 - 23,325,517,739
Transactions with owners
Establishment of special purpose
- - - - - 9,910,000 9,910,000
entity
Dividends - - - (10,000,000,000) (10,000,000,000) - (10,000,000,000)
Total transactions with owners - - - (10,000,000,000) (10,000,000,000) 9,910,000 (9,990,090,000)
Balances as of March 31, 2011 100,000,000,000 - 5,058,088,830 88,875,275,047 193,933,363,877 9,910,000 193,953,183,877
8
11. Hyundai Commercial, Inc. and Subsidiaries
Interim Consolidated Statements of Changes in Equity
Three-Month Periods ended March 31, 2012 and 2011
Accumulated
(In Korean won) other Total attributable Non-
comprehensive
income and Retained to owners of the controlling
Capital stock Capital surplus expenses earnings parent interests Total equity
Balances as of January 1, 2012 125,000,000,000 74,608,059,537 3,262,305,957 146,466,631,832 349,336,997,326 19,820,000 180,617,756,138
Total comprehensive income
Net income - - - 20,507,328,232 20,507,328,232 - 20,507,328,232
Other comprehensive income
Gain on valuation of derivatives - - 712,448,836 - 712,448,836 - 712,448,836
Loss on valuation of available-for-
- - (1,367,612,543) - (1,367,612,543) - (1,367,612,543)
sale securities
Other comprehensive income of
- - 8,462,077,403 - 8,462,077,403 - 8,462,077,403
equity method investee
Total comprehensive income - - 7,806,913,696 20,507,328,232 28,314,241,928 - 28,314,241,928
Transactions with owners
Dividends - - - (30,000,000,000) (30,000,000,000) - (30,000,000,000)
Changes in retained earnings of
- - - 15,453,193 15,453,193 - 15,453,193
equity method investee
Total transactions with owners - - - (29,984,546,807) (29,984,546,807) - (29,984,546,807)
Balances as of March 31, 2012 125,000,000,000 74,608,059,537 11,069,219,653 136,989,413,257 347,666,692,447 19,820,000 347,686,512,447
The accompanying notes are an integral part of these interim consolidated financial statements.
9
12. Hyundai Commercial, Inc. and Subsidiaries
Interim Consolidated Statements of Cash Flows
Three-Month Periods ended March 31, 2012 and 2011
(In Korean won)
March 31, 2012 March 31, 2011
Cash flows from operating activities
Cash generated from operations (Note 20) (10,167,972,302) (145,532,068,736)
Interest received 2,508,291,569 1,035,936,694
Interest paid (37,272,790,705) (32,053,228,259)
Dividends received 250,000,000 300,000,000
Income taxes paid - (4,642,871,180)
Net cash used in operations (44,682,471,438) (180,892,231,481)
Cash flows from investing activities
Acquisition of equity method investment (95,644,380,000) -
Disposal of vehicles 63,107,858 -
Acquisition of vehicles (76,172,300) (79,715,188)
Acquisition of fixtures and furniture (57,306,040) (60,417,632)
Acquisition of intangible assets (57,690,600) (43,725,000)
Increase in leasehold deposits (685,649,000) (189,000,000)
Net cash used in investing activities (96,458,090,082) (372,857,820)
Cash flows from financing activities
Proceeds from borrowings 285,790,000,000 305,726,462,099
Repayments of borrowings (280,837,876,329) (312,138,441,529)
Issuance of debentures 289,675,205,800 169,535,450,000
Repayments of debentures (85,000,000,000) (82,000,000,000)
Issuance of securitized debts - 199,456,325,601
Cash inflows of transactions with subsidiaries - 9,910,000
Payments of dividends (30,000,000,000) (10,000,000,000)
Net cash provided by financing activities 179,627,329,471 270,589,706,171
Net increase in cash and cash equivalents 38,486,767,951 89,324,616,870
Cash and cash equivalents
Beginning of period 276,009,118,714 99,938,403,013
End of period 314,495,886,665 189,263,019,883
The accompanying notes are an integral part of these interim consolidated financial statements.
10
13. Hyundai Commercial, Inc. and Subsidiaries
Notes to the Interim Consolidated Financial Statements
March 31, 2012 and 2011, and December 31, 2011
1. General Information
Hyundai Commercial, Inc. (the Company) was established on March 27, 2007, by taking over all
the assets, liabilities, rights and obligations related with the loans of the industrial product division
of Hyundai Capital Services, Inc. and its installment financing and lease financing division. It is
engaged in installment financing, and leasing of facilities. The Company’s operations are
headquartered in Yeouido, Seoul. Its shareholders are as follows:
Shareholders Ownership
Hyundai Motor Company 50.00%
Myung-yi Chung 33.33%
Tae-young Chung 16.67%
Total 100.00%
2. Summary of Significant Accounting Policies
The consolidated financial statements have been prepared and presented which included the
accounts of Hyundai Commercial, Inc., as the parent company according to the Korean IFRS
1027, and Commercial Auto First trust and SPC and another subsidiary(collectively the “Group”),
while Hyundai Card Co., Ltd. and Green cross life insurance are accounted for under the equity
method.
Subsidiaries as of March 31, 2012 and December 31, 2011, are as follows. The Company has the
substantial power over the subsidiaries established as special purpose entities for asset
securitization even though its ownership interests over the subsidiaries do not exceed 50%.
March 31, 2012 December 31, 2011
Special Commercial Auto First Trust and SPC Commercial Auto First Trust and SPC
Purpose
Commercial Auto Second Trust and SPC Commercial Auto Second Trust and SPC
Entities
The Group’s interim consolidated financial statements for the three-month period ended March 31,
2012, have been prepared in accordance Korean IFRS 1034, ‘Interim Financial Reporting’. These
interim consolidated financial statements have been prepared in accordance with the Korean IFRS
standards and interpretations issued and effective or issued and early adopted as of March 31,
2012.
New standards, amendments and interpretations issued but not effective for the financial year
beginning January 1, 2012, and not early adopted by the Group are as follows:
- Amendments to Korean-IFRS1019, Employee Benefits
According to the amendments to Korean-IFRS1019, Employee Benefits, the corridor method is no
longer permitted. Therefore, actuarial gains and losses on the defined benefit obligation are
11
14. Hyundai Commercial, Inc. and Subsidiaries
Notes to the Interim Consolidated Financial Statements
March 31, 2012 and 2011, and December 31, 2011
recognized immediately under other comprehensive income. The amendment requires to
recognize immediately all past service costs. And the amendment replaces the interest cost on the
defined benefit obligation, and the expected return on plan assets with a net interest cost based on
the net defined benefit asset or liability and the discount rate measured at the beginning of the
year. This amendment will be effective for the Group as of January 1, 2013. The Group is
assessing the impact of application of the amended Korean-IFRS1019 on its consolidated financial
statements.
- Enactment of Korean-IFRS1113, Fair value measurement
Korean-IFRS1113, Fair value measurement, aims to improve consistency and reduce complexity
by providing a precise definition of fair value and a single source of fair value measurement and
disclosure requirements for use across Korean-IFRS. Korean-IFRS1101 does not extend the use
of fair value accounting but provides guidance on how it should be applied where its use is already
required or permitted by other standards within Korean-IFRS. This amendment will be effective for
the Group as of January 1, 2013, and the Group expects that it would not have a material impact
on the Group.
The following is a summary of significant accounting policies followed by the Group in the
preparation of its interim consolidated financial statements. These policies have been consistently
applied to all the periods presented, unless otherwise stated.
Interim period income tax expense is calculated by applying estimated average annual effective
tax rate to the interim period’s pre-tax income.
3. Securities
Securities as of March 31, 2012 and December 31, 2011, are as follows:
(in thousands of Korean won)
Type March 31, 2012 December 31, 2011
Available-for-sale securities
Marketable equity
securities 16,250,000 18,200,000
Equity securities
Unlisted equity
securities
3,199,476 3,083,604
Sub-total 19,449,476 21,283,604
Debt securities 5,799,545 5,564,629
Sub-total 25,249,021 26,848,233
Equity method investment 262,577,812 147,539,965
287,826,833 174,388,198
12
15. Hyundai Commercial, Inc. and Subsidiaries
Notes to the Interim Consolidated Financial Statements
March 31, 2012 and 2011, and December 31, 2011
Available-for-sale securities
Available-for-sale securities as of March 31, 2012 and December 31, 2011, are as follows:
(in thousands of Korean won)
Book value
Number of Ownership Acquisition March 31, December
shares (%) cost 2012 31, 2011
Marketable equity securities
JNK Heaters Co.,
Ltd.
1,000,000 12.5 10,126,881 16,250,000 18,200,000
Unlisted equity securities
1
Leehan Corp. 136,000 12.3 3,199,762 3,198,856 3,082,984
Isung Eng,. Corp. 62 620 620 620
Debt securities
2
Leehan Corp. - - 5,469,801 5,799,545 5,564,629
1,136,062 18,797,064 25,249,021 26,848,233
1
The fair value of the securities for Leehan Corp. was valued as the valuation price provided by an external
appraiser, Korea Asset Pricing. The external appraisers valuated the fair value as the average of valuation
prices using the discounted cash flow model and the imputed market value model.
2
Those debt securities are the convertible bond issued by Leehan Corp. during the year, and the fair value
of the convertible bond for Leehan Corp. was valued as the valuation price provided by an external
appraiser, Korea Asset Pricing. The differences between the fair value of convertible bond and the book
value of normal bond by effective interest rate recognized in the gain or loss on valuation of debt securities
and the fluctuation of conversion right and advanced redemption right recognized in the gain or loss on
embedded derivatives.
Equity method investments
Equity method investments as of March 31, 2012 and December 31, 2011, are as follows:
(in thousands of Korean won)
March 31, 2012
Number of Ownership Acquisition Net asset
Book value
shares (%) cost value
Hyundai Card Co.,
Ltd.
1 8,889,622 5.54 113,820,162 115,044,378 151,971,127
Green Cross Life
2 7,357,260 37.43 95,644,380 62,152,804 110,606,685
Insurance
Total 209,464,542 177,197,182 262,577,812
(in thousands of Korean won)
December 31, 2011
Number of Ownership Acquisition Net asset
Book value
shares (%) cost value
Hyundai Card Co.,
Ltd.
1 8,889,622 5.54 113,820,162 110,613,215 147,539,965
1
The Company’s shareholdings in Hyundai Card Co., Ltd. are less than 20%. However, the Company is
able to participate in the management and significantly influence the financial and operating processes.
Thus, the equity method is applied.
13
16. Hyundai Commercial, Inc. and Subsidiaries
Notes to the Interim Consolidated Financial Statements
March 31, 2012 and 2011, and December 31, 2011
2
The Group acquired the equity securities of Green Cross Life Insurance during the current period.
Valuations of equity method investment for the three-month periods ended March 31, 2012 and
2011, are as follows:
(in thousands of Korean won)
March 31, 2012
Changes in
accumulated Changes in
Beginning Gain on Ending
Acquisition other retained
Balance valuation Balance
comprehensive earnings
income(*)
Hyundai
Card Co., 147,539,965 - 4,154,800 276,362 - 151,971,127
Ltd.
Green Cross
Life
- 95,644,380 6,694,257 8,252,595 15,453 110,606,685
Insurance
Co,. Ltd.
Total 147,539,965 95,644,380 10,849,057 8,528,957 15,453 262,577,812
(*) Changes in accumulated other comprehensive income is the amount before income taxes.
(in thousands of Korean won)
March 31, 2011
Changes in
accumulated other
Beginning Balance Gain on valuation Ending Balance
comprehensive
income(*)
Hyundai
Card Co., 133,160,973 4,102,292 (24,106) 137,239,159
Ltd.
The difference between the acquired amounts of equity method investment and its corresponding
net asset value as of March 31, 2012 and December 31, 2011, follows:
(in thousands of Korean won)
March 31, 2012 December 31, 2011
Hyundai Card Co., Ltd. 36,926,750 36,926,750
Green Cross Life Insurance Co,. Ltd. 48,453,881 -
Total 85,380,631 36,926,750
The assets and liabilities as of March 31, 2012 and December 31, 2011, and revenue and income for
the three-month periods ended March 31, 2012 and 2011, follow :
14
17. Hyundai Commercial, Inc. and Subsidiaries
Notes to the Interim Consolidated Financial Statements
March 31, 2012 and 2011, and December 31, 2011
(in thousands of Korean won)
March 31, 2012
Year end Operating
Assets Liabilities Net income
revenue
Hyundai Card
December 31 10,872,759,798 8,796,080,584 615,422,079 74,997,698
Co., Ltd.
Green Cross
Life
March 31 3,437,590,803 3,271,552,038 347,600,863 9,420,826
Iinsurance
Co,. Ltd.
Green Cross Life Insurance Co,. Ltd.’s fiscal year is from April 1, 2011 to March 31, 2012, the asset and
liability amounts are as of March 31, 2012, and its operating revenue and net income amounts are from
January 1, 2012 to March 31, 2012. The regarded acquisition date is February 29, 2012, and the investee
recognized its net income 17,883,442 thousand after regarded acquisition date.
(in thousands of Korean won)
December 31, 2011
Year end Operating
Assets Liabilities Net income
revenue
Hyundai Card
December 31 10,851,933,716 8,855,250,685 2,407,597,301 238,647,582
Co., Ltd.
4. Financial Receivables
Financial receivables as of March 31, 2012 and December 31, 2011, are as follows:
(in thousands of Korean won)
March 31, 2012
Deferred loan
origination fees and Present Allowance
Principal costs value for doubtful Book value
(Initial direct costs discounts accounts
for lease assets)
Loan receivables
Factoring
205,850 - - (2,852) 202,998
receivables
Loans 2,483,927,021 23,685,648 (155,262) (18,450,442) 2,489,006,965
2,484,132,871 23,685,648 (155,262) (18,453,294) 2,489,209,963
Installment financial assets
Auto 379,432,881 (62,807) - (2,411,441) 376,958,633
Durable goods 55,904,285 (460,352) - (382,175) 55,061,758
435,337,166 (523,159) - (2,793,616) 432,020,391
Lease receivables
Finance lease
91,734,334 (16,096) - (671,466) 91,046,772
receivables
3,011,204,371 23,146,393 (155,262) (21,918,376) 3,012,277,126
15
18. Hyundai Commercial, Inc. and Subsidiaries
Notes to the Interim Consolidated Financial Statements
March 31, 2012 and 2011, and December 31, 2011
(in thousands of Korean won)
December 31, 2011
Deferred loan
origination fees and Present Allowance
Principal costs value for doubtful Book value
(Initial direct costs discounts accounts
for lease assets)
Loan receivables
Factoring 575,109 - - (3,163) 571,946
Loans 2,390,384,894 18,629,791 (150,234) (18,165,997) 2,390,698,454
2,390,960,003 18,629,791 (150,234) (18,169,160) 2,391,270,400
Installment financial assets
Auto 402,751,465 (315,733) - (2,700,211) 399,735,521
Durable goods 69,532,615 (677,259) - (475,143) 68,380,213
472,284,080 (992,992) - (3,175,354) 468,115,734
Lease receivables
Finance lease
84,693,337 (19,542) - (620,397) 84,053,398
receivables
2,947,937,420 17,617,257 (150,234) (21,964,911) 2,943,439,532
5. Allowance for Doubtful Accounts
Changes in allowance for doubtful accounts for the nine-month periods ended March 31, 2012 and
2011, are as follows:
(in thousands of Korean won)
March 31, 2012
Loan Installment Lease
Type Other assets Total
receivables financial assets receivables
Beginning balance 18,169,160 3,175,354 620,397 330,388 22,295,299
Amounts written off (1,613,880) (61,379) - - (1,675,259)
Recoveries of amounts
(2,993,634) (179,420) - - (3,173,054)
previously written off
Unwinding of discount (49,660) (6,252) - - (55,912)
Additional(reversed)
4,941,308 (134,687) 51,069 (48,883) 4,808,807
allowance
Ending balance 18,453,294 2,793,616 671,466 281,505 22,199,881
(in thousands of Korean won)
March 31, 2011
Loan Installment Lease
Type Other assets Total
receivables financial assets receivables
Beginning balance 12,795,689 3,609,027 214,613 372,974 16,992,303
Amounts written off (520,382) (108,512) - - (628,894)
Recoveries of amounts
(1,646,955) (269,466) (6,811) - (1,923,232)
previously written off
Unwinding of discount (25,690) (3,048) (108) - (28,846)
Additional allowance 4,038,536 924,960 145,923 32,699 5,142,118
Ending balance 14,641,198 4,152,961 353,617 405,673 19,553,449
16
19. Hyundai Commercial, Inc. and Subsidiaries
Notes to the Interim Consolidated Financial Statements
March 31, 2012 and 2011, and December 31, 2011
6. Financial Instruments
The fair values of financial instruments as of March 31, 2012 and December 31, 2011, are as follows:
(in thousands of Korean won)
March 31, 2012 December 31, 2011
Type Book Fair Book Fair
value value value value
Financial assets
Cash and deposits 314,504,887 314,504,887 276,018,119 276,018,119
Available-for-sale
25,249,021 25,249,021 26,848,233 26,848,233
securities
Loans receivable 2,489,209,963 2,501,074,948 2,391,270,400 2,398,975,565
Installment financial
432,020,391 433,307,489 468,115,734 473,294,235
assets
Derivative assets 1,380,604 1,380,604 1,369,009 1,369,009
Non-trade
26,057,929 26,057,929 29,694,392 29,694,392
receivables
Accrued revenues 15,564,187 15,564,187 17,963,211 17,963,211
Leasehold deposits 10,739,617 10,677,518 9,963,176 9,861,028
3,314,726,599 3,327,816,583 3,221,242,274 3,234,023,792
Financial liabilities
Borrowings 730,475,847 736,188,566 725,523,723 730,010,502
Debentures 2,141,877,642 2,191,177,733 1,937,737,885 1,983,599,328
Securitized debts 359,435,857 367,047,260 359,361,742 367,266,231
Derivative liabilities 2,659,351 2,659,351 2,691,395 2,691,395
Non-trade payables 8,382,323 8,382,323 7,907,799 7,907,799
Accrued expenses 22,932,993 22,932,993 26,857,796 26,857,796
1
Withholdings 4,300,068 4,300,068 2,731,628 2,731,628
Leasehold deposits
19,778,332 20,036,119 16,493,405 16,677,090
received
3,289,842,413 3,352,724,413 3,079,305,373 3,137,741,769
1
Excluding taxes.
The fair value hierarchy of financial assets and liabilities carried at fair value as of March 31, 2012
and December 31, 2011, are as follows:
(in thousands of Korean won)
March, 31 2012
1
Book Fair Fair value hierarchy
Type
value value level 1 level 2 level 3
Financial assets at fair
value
Available-for-sale
25,249,021 25,249,021 16,250,000 - 8,999,021
securities
17
20. Hyundai Commercial, Inc. and Subsidiaries
Notes to the Interim Consolidated Financial Statements
March 31, 2012 and 2011, and December 31, 2011
Derivative assets 1,380,604 1,380,604 - 1,380,604 -
26,629,625 26,629,625 16,250,000 1,380,604 8,999,021
Financial liabilities at
fair value
Derivative liabilities 2,659,351 2,659,351 - 2,659,351 -
1
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 derivatives and others.
(in thousands of Korean won)
December 31, 2011
Book Fair Fair value hierarchy(*)
Type
value value level 1 level 2 level 3
Financial assets at fair
value
Available-for-sale
26,848,233 26,848,233 18,200,000 - 8,648,233
securities
Derivative assets 1,369,009 1,369,009 - 1,369,009 -
28,217,242 28,217,242 18,200,000 1,369,009 8,648,233
Financial liabilities at
fair value
Derivative liabilities 2,691,395 2,691,395 - 2,691,395 -
The changes in financial instruments of level 3 for the three-month periods ended March 31, 2012
and the year ended December 31, 2011, are as follows:
(in thousands of Korean won)
Available-for-sale securities
Type
March 31, 2012 December 31, 2011
Beginning balance 8,648,233 17,657,945
Acquisition - 8,670,183
Gains on interest 205,027 72,492
Gains on valuation
145,761 (1,579,387)
(Other comprehensive income)
Disposal - (4,655,000)
1
Reclassification - (11,518,000)
Ending balance 8,999,021 8,648,233
1
The fair value hierarchy of the available-for-sale securities has been reclassified from level 3 to level 1 as
JNK Heaters Co., Ltd. was listed during the prior period.
18
21. Hyundai Commercial, Inc. and Subsidiaries
Notes to the Interim Consolidated Financial Statements
March 31, 2012 and 2011, and December 31, 2011
The book value of financial instruments by categories as of March 31, 2012 and December 31,
2011, are as follows:
(in thousands of Korean won)
March 31, 2012
Financial
Available-for- Hedging
assets at fair Loans and
Type sale financial derivative Total
value through receivables
assets instruments
profit or loss
Financial assets
Cash and deposits - 314,504,887 - - 314,504,887
Available-for- sale
- - 25,249,021 - 25,249,021
securities
Loans receivable - 2,489,209,963 - - 2,489,209,963
Installment
- 432,020,391 - - 432,020,391
financial assets
Derivative assets 450,538 - - 930,066 1,380,604
Non-trade
- 26,057,929 - - 26,057,929
receivables
Accrued revenues - 15,564,187 - - 15,564,187
Leasehold
- 10,739,617 - - 10,739,617
deposits
450,538 3,288,096,974 25,249,021 930,066 3,314,726,599
(in thousands of Korean won)
December 31, 2011
Financial
Available-for- Hedging
assets at fair Loans and
Type sale financial derivative Total
value through receivables
assets instruments
profit or loss
Financial assets
Cash and deposits - 276,018,119 - - 276,018,119
Available-for- sale
- - 26,848,233 - 26,848,233
securities
Loans receivable - 2,391,270,400 - - 2,391,270,400
Installment
- 468,115,734 - - 468,115,734
financial assets
Derivative assets 501,793 - - 867,216 1,369,009
Non-trade
- 29,694,392 - - 29,694,392
receivables
Accrued revenues - 17,963,211 - - 17,963,211
Leasehold
- 9,963,176 - - 9,963,176
deposits
501,793 3,193,025,032 26,848,233 867,216 3,221,242,274
(in thousands of Korean won)
March 31, 2012 December 31, 2011
Financial Hedging Financial Hedging
Type liabilities at derivative Total liabilities at derivative Total
amortized cost instruments amortized cost instruments
Financial liabilities
Borrowings 730,475,847 - 730,475,847 725,523,723 - 725,523,723
19
22. Hyundai Commercial, Inc. and Subsidiaries
Notes to the Interim Consolidated Financial Statements
March 31, 2012 and 2011, and December 31, 2011
Debentures 2,141,877,642 - 2,141,877,642 1,937,737,885 - 1,937,737,885
Securitized debts 359,435,857 359,435,857 359,361,742 - 359,361,742
Derivative
- 2,659,351 2,659,351 - 2,691,395 2,691,395
liabilities
Non-trade
8,382,323 - 8,382,323 7,907,799 - 7,907,799
payables
Accrued expenses 22,932,993 - 22,932,993 26,857,796 - 26,857,796
Withholdings 4,300,068 - 4,300,068 2,731,628 - 2,731,628
Leasehold
deposits 19,778,332 - 19,778,332 16,493,405 - 16,493,405
received
3,287,183,062 2,659,351 3,289,842,413 3,076,613,978 2,691,395 3,079,305,373
7. Derecognition of financial assets
The Group issued senior and subordinated asset-backed securities based on loans and installment
financial assets, and subsidiaries, such as Commercial Auto First trust and SPC, issued securitized
debts based on senior beneficiary certificates. Meanwhile, the Group is involved in ongoing
securitized financial instruments through credit reinforcement such as acquisitions of subordinated
beneficiary certificates.
Details of transferred financial assets not derecognized as of March 31, 2012 and December 31,
2011, are as follows:
(in thousands of Korean won)
Type March 31, 2012 December 31, 2011
Book value of assets
Loan receivable 559,377,227 466,479,102
Installment financial assets 78,580,393 97,302,634
Sub total 637,957,620 563,781,736
Book value of related liabilities 359,435,857 359,361,742
Liabilities having right of resource on transferred assets :
Fair value of assets 640,858,040 566,361,232
Fair value of related liabilities 366,483,117 367,266,231
Net position 274,374,923 199,095,001
8. Finance Lease Receivables
Details of total lease investments and present value of minimum lease receipts as of March 31,
2012 and December 31, 2011, are as follows:
(in thousands of Korean won)
Type March 31, 2012 December 31, 2011
20
23. Hyundai Commercial, Inc. and Subsidiaries
Notes to the Interim Consolidated Financial Statements
March 31, 2012 and 2011, and December 31, 2011
Present value of Present value of
Total lease Total lease
minimum lease minimum lease
investments investments
receipts receipts
Less than 1 year 38,661,720 33,528,707 38,319,151 33,136,156
1 to 5 years 62,242,818 58,189,530 55,204,893 51,537,639
100,904,538 91,718,237 93,524,044 84,673,795
Details of unearned interest income as of March 31, 2012 and December 31, 2011, are as follows:
(in thousands of Korean won)
Type March 31, 2012 December 31, 2011
Total lease investments 100,904,538 93,524,044
Net lease investments
Minimum lease receipts
91,718,237 84,673,795
(present value)
Unguaranteed residual value
- -
(present value)
91,718,237 84,673,795
Unearned interest income 9,186,301 8,850,249
9. Property and Equipment
Property and equipment as of March 31, 2012 and December 31, 2011, consist of:
(in thousands of Korean won)
March 31, 2012 December 31, 2011
Type Acquisition Accumulated Acquisition Accumulated
Book value Book value
cost depreciation cost depreciation
Vehicles 235,097 (121,995) 113,102 238,639 (123,908) 114,731
Fixture and
7,122,896 (4,910,694) 2,212,202 7,065,590 (4,682,654) 2,382,936
furniture
Others 411,000 - 411,000 411,000 - 411,000
7,768,993 (5,032,689) 2,736,304 7,715,229 (4,806,562) 2,908,667
Changes in property and equipment for the three-month periods ended March 31, 2012 and 2011,
are as follows:
(in thousands of Korean won)
March 31, 2012
Type Beginning balance Acquisition Disposal Depreciation Ending balance
Vehicles 114,731 76,172 (61,447) (16,354) 113,102
Fixture and
2,382,936 57,306 - (228,040) 2,212,202
furniture
Others 411,000 - - - 411,000
2,908,667 133,478 (61,447) (244,394) 2,736,304
21
24. Hyundai Commercial, Inc. and Subsidiaries
Notes to the Interim Consolidated Financial Statements
March 31, 2012 and 2011, and December 31, 2011
(in thousands of Korean won)
December 31, 2011
Type Beginning balance Acquisition Disposal Depreciation Ending balance
Vehicles 119,066 79,715 - (15,372) 183,409
Fixture and
1,986,277 60,418 - (345,126) 1,701,569
furniture
Others 411,000 - - - 411,000
2,516,343 140,133 - (360,498) 2,295,978
10. Intangible Assets
Intangible assets as of March 31, 2012 and December 31, 2011, consist of:
(in thousands of Korean won)
March 31, 2012 December 31, 2011
Type Acquisition Accumulated Book Acquisition Accumulated Book
cost depreciation value cost depreciation value
Software 5,663,954 (4,497,313) 1,166,641 5,637,719 (4,331,112) 1,306,607
Other intangible
2,210,587 (523,214) 1,687,373 2,179,131 (413,434) 1,765,697
assets
7,874,541 (5,020,527) 2,854,014 7,816,850 (4,744,546) 3,072,304
Changes in intangible assets for the three-month periods ended March 31, 2012 and 2011, are as
follows:
(in thousands of Korean won)
March 31, 2012
1
Type Beginning balance Increase Amortization Ending balance
Software 1,306,607 26,235 (166,201) 1,166,641
Other intangible assets 1,765,697 31,456 (109,780) 1,687,373
3,072,304 57,691 (275,981) 2,854,014
1
Inclusive of transfer from advance payments.
(in thousands of Korean won)
March 31, 2011
1
Type Beginning balance Increase Amortization Ending balance
Software 1,632,196 43,725 (310,920) 1,365,001
Other intangible assets 849,207 899,800 (60,784) 1,688,223
2,481,403 943,525 (371,704) 3,053,224
22
25. Hyundai Commercial, Inc. and Subsidiaries
Notes to the Interim Consolidated Financial Statements
March 31, 2012 and 2011, and December 31, 2011
11. Borrowings
Borrowings as of March 31, 2012 and December 31, 2011, consist of:
(in thousands of Korean won)
Annual
Types Lender March 31, 2012 December 31, 2011
interest rate (%)
Borrowings in won
SK Securities
Commercial paper 3.65 ~ 4.27 130,000,000 140,000,000
and 3 others
Woori Bank and
General loans 3.71 ~ 6.19 600,475,847 585,523,723
9 others
730,475,847 725,523,723
12. Debentures
Debentures issued by the Group and outstanding as of March 31, 2012 and December 31, 2011,
are as follows:
(in thousands of Korean won)
Annual March 31, 2012 December 31, 2011
Type interest
rates (%) Par value Issue price Par value Issue price
Current portion of debenture
Debenture 3.78 ~ 6.70 700,000,000 700,000,000 635,000,000 635,000,000
Less: Discount on
(261,394) (253,677)
debentures
700,000,000 699,738,606 635,000,000 634,746,323
Non-current portion of debenture
Debenture 3.93 ~ 8.00 1,443,861,000 1,443,861,000 1,304,713,500 1,304,713,500
Less: Discount on
(1,721,964) (1,721,938)
debentures
1,443,861,000 1,442,139,036 1,304,713,500 1,302,991,562
2,143,861,000 2,141,877,642 1,939,713,500 1,937,737,885
13. Securitized debts
The amounts of securitized debts which are secured by loans and installment financial assets in
accordance with Asset Backed Securitization Act, as of March 31, 2012 and December 31, 2011,
are as follows:
(in thousands of Korean won)
Annual March 31, 2012 December 31, 2011
Type interest
rates (%) Par value Issue price Par value Issue price
Current portion of securitized debts
Debenture 4.12 ~ 4.26 50,000,000 50,000,000 50,000,000 50,000,000
Less: Discount on
(40,399) (62,214)
securitized debts
23
26. Hyundai Commercial, Inc. and Subsidiaries
Notes to the Interim Consolidated Financial Statements
March 31, 2012 and 2011, and December 31, 2011
49,959,601 49,937,786
Non-current portion of securitized debts
Debenture 4.76 ~ 5.43 310,000,000 310,000,000 310,000,000 310,000,000
Less: Discount on
(523,744) (576,044)
securitized debts
309,476,256 309,423,956
360,000,000 359,435,857 360,000,000 359,361,742
14. Defined Benefit Liability
Details of the amounts recognized in the income statements for the three-month periods ended
March 31, 2012 and 2011:
(in thousands of Korean won)
Type March 31, 2012 March 31, 2011
Current service cost 489,409 403,489
Interest cost 75,736 62,598
Expected return on plan assets (50,448) (37,882)
Past service cost (21,263) -
493,434 428,205
The amounts of defined benefit plans recognized in the statements of financial position as of
March 31, 2012 and December 31, 2011, are as follows:
(in thousands of Korean won)
Type March 31, 2012 December 31, 2011
Present value of funded obligations 7,447,382 7,596,812
Fair value of plan assets (5,418,338) (5,364,346)
Defined benefit liability 2,029,044 2,232,466
15. Income Tax
The Group recognized income tax based on estimation of weighted average annual tax rate annual
fiscal year. Expected weighted average annual tax rate for March 31, 2012, is 18.5% (March 31,
2011 : 27.5%).
16. Derivative Financial Instruments and Hedge Accounting
The Group has the convertible bond issued by Leehan Corp., and recognized the difference
between the acquisition cost of convertible bond and the fair value of normal bond as derivative
assets. The amount recognized as derivative assets as of March 31, 2012, is 450,538 thousand
(December 31, 2011 : 501,793 thousand), while the net losses from derivative asset for the
three-month period ended March 31, 2012, is 51,255 thousand. (March 31, 2011 : Nil)
24
27. Hyundai Commercial, Inc. and Subsidiaries
Notes to the Interim Consolidated Financial Statements
March 31, 2012 and 2011, and December 31, 2011
Derivatives designated as cash flow hedges as of March 31, 2012 and December 31, 2011, are as
follows:
(in thousands of Korean won)
March 31, 2012 December 31, 2011
Accumulated Accumulated
other other
Type comprehensi comprehensi
Assets Liabilities Assets Liabilities
ve income ve income
and and
expenses expenses
Interest rate swaps 282,643 - 214,243 - 241,837 (899,733)
Currency swaps 647,423 2,659,351 (584,742) 867,216 2,449,558 (183,215)
930,066 2,659,351 (370,499) 867,216 2,691,395 (1,082,948)
The amount recognized as other comprehensive income, representing the effective portion related
to cash flow hedge, is 712,449 thousand as of March 31, 2012, and the reclassified amount from
other comprehensive income to profit or loss is 186,921 thousand. There is no ineffective portion
recognized related to cash flow hedge for the three-months periods ended March 31, 2012 and
2011.
17. Equity
The Company is authorized to issue 80,000,000 shares (par value of per share : 5,000). As of
March 31, 2012 and December 31, 2011, the number of common stock and preferred stock, and
paid in capital are as follows :
(in thousands of Korean won, except number of shares)
Type March 31, December 31,
2012 2011
Number of shares 20,000,000 20,000,000
Common Capital stock 100,000,000 100,000,000
stock Additional paid-in capital -
100,000,000 100,000,000
Number of shares 5,000,000 5,000,000
Preferred Capital stock 25,000,000 25,000,000
stock Additional paid in capital 74,608,060 74,608,060
99,608,060 99,608,060
Total 199,608,060 199,608,060
The convertible preferred stocks have been issued at 20,000 per share(par value 5,000 per
share) are non-cumulative, non-participating, nominative, non-permanent preferred stock without
voting right, and will be converted into common stock after seven years from issue date.
Legal reserve and discretionary reserve as of March 31, 2012 and December 31, 2011, are as
follows:
25
28. Hyundai Commercial, Inc. and Subsidiaries
Notes to the Interim Consolidated Financial Statements
March 31, 2012 and 2011, and December 31, 2011
(in millions of Korean won)
March 31, December 31,
Type 2012 2011
Legal reserve Revenue reserve 4,000,000 1,000,000
Reserve for electronic financial
Discretionary 100,000 100,000
transactions
reserve
Reserve for bad loans 3,357,192 -
Unappropriated retained earnings
(Expected reserve for bad loans
129,532,221 145,366,632
March 31, 2012: 9,918,236 thousand,
December 31, 2011: 3,357,192 thousand)
136,989,413 146,466,632
If allowances for doubtful accounts do not meet the minimum amount calculated in accordance
with allowance reserve standards of Regulation on Supervision under Article 11 of the Specialized
Credit Financial Business Law Article 11, the Group appropriates a reserve for bad loans in an
amount more than the difference between the allowance and the requirement. The reserve for bad
loans is attributed to discretionary reserve for retained earnings. If the existing reserve for bad
loans exceeds the reserve for bad loans to be reserved, the excess amounts are to be reversed.
And if undisposed deficit exists, the reserve for bad loans is reserved after undisposed deficit is
disposed of.
Appropriated and expected reserves for bad loans as of March 31, 2012 and December 31,
2011, are as follows:
(in thousands of Korean won)
Type March 31, 2012 December 31, 2011
Appropriated reserve for bad loans 3,357,192 -
Expected reserve for bad loans 9,918,236 3,357,192
13,275,428 3,357,192
Transfer to reserve for bad loans and net income in consideration of effect of changes in
reserve for bad loan for the three-month periods ended March 31, 2012 and 2011, are as
follows:
(in thousands of Korean won)
Type March 31, 2012 March 31, 2011
Net income 20,507,328 17,405,147
1
Transfer to reserve for bad loans (9,918,236) (386,438)
Net income in consideration of changes in reserve for
2 10,589,092 17,018,709
bad loans
Net income per share in consideration of changes in
3 529 851
reserve for bad loans (In won)
26
29. Hyundai Commercial, Inc. and Subsidiaries
Notes to the Interim Consolidated Financial Statements
March 31, 2012 and 2011, and December 31, 2011
1
Transfer to reserve for bad loans are subtracted from balance of reserve for bad loans in 2011
to balance in 2010.
2
Net income in consideration of changes in reserve for bad loans is not accordance with K-IFRS,
and the amount is the sum of the transfer to reserve for bad loans before income tax and net
income.
3
Net income per share in consideration of changes is calculated by subtracting the transfer to reserve for
bad loans from the net income for common stock.
The 30 billion of dividends for fiscal year ended December 31, 2011, were paid in March 2012
(2011 : 10 billion).
(in thousands of Korean won)
Type December 31, 2011 December 31, 2010
Common stock 24,000,000 10,000,000
Preferred stock 6,000,000 -
Total 30,000,000 10,000,000
18. General and Administrative Expenses
General and administrative expenses for the three-month periods ended March 31, 2012 and
2011, are as follows:
(in thousands of Korean won)
March 31, 2012 March 31, 2011
Payroll 3,627,700 4,420,861
Severance benefits 493,395 440,880
Fringe benefits 1,415,100 1,208,312
Outsourcing service charges 987,431 753,024
Sales promotions 3,285,944 3,280,980
Commission 1,205,021 776,937
Outsourcing service commission 501,123 422,413
Depreciation 244,394 360,498
Amortization 275,980 371,704
Taxes and dues 494,678 330,542
Electronic expenses 392,101 225,485
Rent 255,933 220,846
Maintenance expenses on building 269,775 212,515
Travel and transportation 188,824 142,948
Education 132,070 158,690
Communication 142,061 125,161
Other expenses 374,185 334,991
14,285,715 13,786,787
27
30. Hyundai Commercial, Inc. and Subsidiaries
Notes to the Interim Consolidated Financial Statements
March 31, 2012 and 2011, and December 31, 2011
19. Other Comprehensive Income
Other comprehensive income for the three-month periods ended March 31, 2012 and 2011,
consist of:
(in thousands of Korean won)
March 31, 2012
Changes
Beginning Reclassifi- Income Ending
Type Other
balance cation of tax effects balance
changes
profit or loss
Loss on valuation of
derivatives (1,082,948) 186,921 752,985 (227,457) (370,499)
Gain on valuation of
available-for-sale 6,047,838 - (1,804,238) 436,625 4,680,225
financial assets
Accumulated
comprehensive
expense of equity
(1,702,584) - 8,528,957 (66,880) 6,759,493
method investee
3,262,306 186,921 7,477,704 142,288 11,069,219
(in thousands of Korean won)
March 31, 2011
Changes
Beginning Reclassifi- Income Ending
Type cation of Other
balance tax effects balance
profit or changes
loss
Loss on valuation of
derivatives (1,662,559) 501,024 678,857 (307,827) (790,505)
Gain on valuation of
available-for-sale 2,180,057 6,415,186 (1,348,068) 7,247,175
financial assets -
Accumulated
comprehensive
expense of equity
(1,379,779) (24,105) 5,303 (1,398,581)
-
method investee
(862,281) 501,024 7,069,938 (1,650,592) 5,058,089
20. Supplemental Cash Flow Information
Cash and cash equivalents in cash flow statements as of March 31, 2012 and December 31, 2011,
consist of follows:
(in thousands of Korean won)
Type March 31, 2012 December 31, 2011
Cash 2,000 2,000
Ordinary deposits 8,947,682 6,005,235
Short-term financial instruments 305,546,205 270,001,884
28
31. Hyundai Commercial, Inc. and Subsidiaries
Notes to the Interim Consolidated Financial Statements
March 31, 2012 and 2011, and December 31, 2011
314,495,887 276,009,119
Cash generated from operations for the three-month periods ended March 31, 2012 and 2011, are
as follows:
(in thousands of Korean won)
March 31, 2012 March 31, 2011
Net income 20,507,328 17,405,147
Adjustments
Net interest expenses 36,743,739 32,874,387
Dividends (250,000) (300,000)
Income tax 4,676,478 6,609,096
Gain on loans receivable 12,148,934 8,184,588
Gain on installment financing 1,070,003 (990,016)
Gain on leased assets (5,981) (7,541)
Gain on foreign currency translation (852,500) (3,011,500)
Gain on equity method valuation (10,849,057) (4,102,292)
Gain on disposal of property and equipment (1,660) -
Bad debts expense 4,808,807 5,142,118
Severance benefits 493,434 428,205
Depreciation 244,394 360,498
Amortization of intangible assets 275,981 371,704
Loss on valuation of derivatives 903,755 3,011,500
49,406,327 48,570,747
Changes in operating assets and liabilities
(Increase) in loans receivable (98,004,667) (209,450,834)
Decrease in installment financing receivables 36,598,032 13,844,229
(Increase) in finance lease receivables (7,040,997) (9,356,084)
(Increase) in deferred loan origination fees and
(18,810,993) (11,132,062)
costs
Increase(decrease) in present value discounts (468,150) 35,586
Increase(decrease) in allowance for bad debts 332,367 (1,952,078)
Decrease in non-trade receivables 3,680,198 242,458
Decrease(increase) in accrued revenues 2,371,714 (1,489,753)
Decrease(increase) in advance payments 204,928 (641,177)
Decrease in prepaid expenses 382,445 2,916,989
Increase in non-trade payables 474,524 5,976,566
(Decrease) in accrued expenses (5,543,701) (3,901,377)
(Decrease) in unearned revenue (538,769) (171,522)
Increase in advance receipts 6,295 124,518
Increase in withholdings 3,433,443 372,267
Payment of severance benefits (23,775) (118,002)
Decrease(increase) in plan assets 2,920 (56,789)
Transfer of severance benefits from related parties 90,489 208,597
Transfer of severance benefits to related parties (766,489) -
29