Hyundai Capital Services, Inc. andSubsidiariesInterim Consolidated Financial StatementsJune 30, 2012 and 2011
Hyundai Capital Services, Inc. and SubsidiariesIndexJune 30, 2012 and 2011                                                ...
Report on Review of Interim Financial StatementsTo the Shareholders and Board of Directors ofHyundai Capital Services, Inc...
ConclusionBased on our reviews, nothing has come to our attention that causes us to believe theaccompanying interim consol...
Hyundai Capital Services, Inc. and SubsidiariesInterim Consolidated Statements of Financial PositionJune 30, 2012 and Dece...
Hyundai Capital Services, Inc. and SubsidiariesInterim Consolidated Statements of Financial PositionJune 30, 2012 and Dece...
Hyundai Capital Services, Inc. and SubsidiariesInterim Consolidated Statements of Comprehensive IncomeThree-Month and Six-...
Hyundai Capital Services, Inc. and SubsidiariesInterim Consolidated Statements of Comprehensive IncomeThree-Month and Six-...
Hyundai Capital Services, Inc. and SubsidiariesInterim Consolidated Statements of Comprehensive IncomeThree-Month and Six-...
Hyundai Capital Services, Inc. and Subsidiaries        Interim Consolidated Statements of Changes in Equity        Six-Mon...
Hyundai Capital Services, Inc. and Subsidiaries        Interim Consolidated Statements of Changes in Equity        Six-Mon...
Hyundai Capital Services, Inc. and SubsidiariesInterim Consolidated Statements of Cash FlowsSix-Month Periods ended June 3...
Hyundai Capital Services, Inc. and SubsidiariesNotes to the Interim Consolidated Financial StatementsJune 30, 2012 and 201...
Hyundai Capital Services, Inc. and SubsidiariesNotes to the Interim Consolidated Financial StatementsJune 30, 2012 and 201...
Hyundai Capital Services, Inc. and SubsidiariesNotes to the Interim Consolidated Financial StatementsJune 30, 2012 and 201...
Hyundai Capital Services, Inc. and SubsidiariesNotes to the Interim Consolidated Financial StatementsJune 30, 2012 and 201...
Hyundai Capital Services, Inc. and SubsidiariesNotes to the Interim Consolidated Financial StatementsJune 30, 2012 and 201...
Hyundai Capital Services, Inc. and Subsidiaries  Notes to the Interim Consolidated Financial Statements  June 30, 2012 and...
Hyundai Capital Services, Inc. and Subsidiaries Notes to the Interim Consolidated Financial Statements June 30, 2012 and 2...
Hyundai Capital Services, Inc. and SubsidiariesNotes to the Interim Consolidated Financial StatementsJune 30, 2012 and 201...
Hyundai Capital Services, Inc. and SubsidiariesNotes to the Interim Consolidated Financial StatementsJune 30, 2012 and 201...
Hyundai Capital Services, Inc. and SubsidiariesNotes to the Interim Consolidated Financial StatementsJune 30, 2012 and 201...
Hyundai Capital Services, Inc. and SubsidiariesNotes to the Interim Consolidated Financial StatementsJune 30, 2012 and 201...
Hyundai Capital Services, Inc. and SubsidiariesNotes to the Interim Consolidated Financial StatementsJune 30, 2012 and 201...
Hyundai Capital Services, Inc. and SubsidiariesNotes to the Interim Consolidated Financial StatementsJune 30, 2012 and 201...
Hyundai Capital Services, Inc. and SubsidiariesNotes to the Interim Consolidated Financial StatementsJune 30, 2012 and 201...
Hyundai Capital Services, Inc. and SubsidiariesNotes to the Interim Consolidated Financial StatementsJune 30, 2012 and 201...
Hyundai Capital Services, Inc. and SubsidiariesNotes to the Interim Consolidated Financial StatementsJune 30, 2012 and 201...
Hyundai Capital Services, Inc. and SubsidiariesNotes to the Interim Consolidated Financial StatementsJune 30, 2012 and 201...
Hyundai Capital Services, Inc. and SubsidiariesNotes to the Interim Consolidated Financial StatementsJune 30, 2012 and 201...
2분기 영문 검토보고서
2분기 영문 검토보고서
2분기 영문 검토보고서
2분기 영문 검토보고서
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2분기 영문 검토보고서

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2분기 영문 검토보고서

  1. 1. Hyundai Capital Services, Inc. andSubsidiariesInterim Consolidated Financial StatementsJune 30, 2012 and 2011
  2. 2. Hyundai Capital Services, Inc. and SubsidiariesIndexJune 30, 2012 and 2011 Page(s)Report on Review of Interim Financial Statements .......................................................................... 1-2Interim Consolidated Financial StatementsInterim Consolidated Statements of Financial Position ......................................................................... 3-4Interim Consolidated Statements of Comprehensive Income................................................................ 5-7Interim Consolidated Statements of Changes in Equity ....................................................................... 8-9Interim Consolidated Statements of Cash Flows .................................................................................... 10Notes to the Interim Consolidated Financial Statements ................................................................... 11-32
  3. 3. Report on Review of Interim Financial StatementsTo the Shareholders and Board of Directors ofHyundai Capital Services, Inc.Reviewed Financial StatementsWe have reviewed the accompanying interim consolidated financial statements of HyundaiCapital Services, Inc.(the Company) and its subsidiaries. These financial statements consistof consolidated statements of financial position of the Company and its subsidiaries as ofJune 30, 2012 and the related consolidated statements of comprehensive income for thethree-month and the six-month periods ended June 30, 2012 and 2011, and statements ofchanges in equity and cash flows for the six-month periods ended June 30, 2012 and 2011,and a summary of significant accounting policies and other explanatory notes, expressed inKorean won.Managements Responsibility for the Financial StatementsManagement is responsible for the preparation and fair presentation of these consolidatedfinancial statements in accordance with the International Financial Reporting Standards asadopted by the Republic of Korea (Korean IFRS) 1034, Interim Financial Reporting, and forsuch internal control as management determines is necessary to enable the preparation ofconsolidated financial statements that are free from material misstatement, whether due tofraud or error.Auditors ResponsibilityOur responsibility is to issue a report on these consolidated financial statements based on ourreviews.We conducted our reviews in accordance with the quarterly and semi-annual reviewstandards established by the Securities and Futures Commission of the Republic of Korea. Areview of interim financial information consists of making inquiries, primarily of personsresponsible for financial and accounting matters, and applying analytical and other reviewprocedures. A review is substantially less in scope than an audit conducted in accordance withauditing standards generally accepted in the Republic of Korea and consequently does notenable us to obtain assurance that we would become aware of all significant matters thatmight be identified in an audit. Accordingly, we do not express an audit opinion. 1
  4. 4. ConclusionBased on our reviews, nothing has come to our attention that causes us to believe theaccompanying interim consolidated financial statements do not present fairly, in all materialrespects, in accordance with the Korean IFRS 1034, Interim Financial Reporting.Emphasis of MatterWe audited the consolidated statement of financial position as of December 31, 2011, and therelated statements of comprehensive income, changes in equity and cash flows for the yearended December 31, 2011, in accordance with auditing standards generally accepted in theRepublic of Korea and expressed an unqualified opinion on those statements dated February24, 2012. The statement of financial position as of December 31, 2011, presented herein forcomparative purposes, is consistent, in all material respects, with the above audited statementof financial position as of December 31, 2011.Review standards and their application in practice vary among countries. The procedures andpractices used in the Republic of Korea to review such consolidated financial statements maydiffer from those generally accepted and applied in other countries. Accordingly, this report isfor use by those who are informed about Korean review standards and their application inpractice.Seoul, KoreaAugust 9, 2012 This report is effective as of August 9, 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. 5. Hyundai Capital Services, Inc. and SubsidiariesInterim Consolidated Statements of Financial PositionJune 30, 2012 and December 31, 2011(In millions of Korean won) Notes 2012 2011AssetsCash and deposits Cash and cash equivalents 21 1,568,274 1,455,433 Deposits 9 9 1,568,283 1,455,442Securities 3 Available-for-sale securities 21,479 18,452 Investments in associates 65,874 51,768 87,353 70,220Loans receivable 4,5,7 11,481,552 11,129,247 Allowances for doubtful accounts (279,331) (281,184) 11,202,221 10,848,063Installment financial assets 4,5,7 Auto installment financing receivables 4,410,865 5,030,541 Allowances for doubtful accounts (30,664) (36,748) Durable goods installment financing receivables 223 1,422 Allowances for doubtful accounts (11) (141) Mortgage installment financing receivables 19,501 25,679 Allowances for doubtful accounts (316) (1,204) Machinery installment financing receivables 165 1,682 Allowances for doubtful accounts (2) (37) 4,399,761 5,021,194Lease receivables 4,5 Finance lease receivables 2,517,796 2,278,383 Cancelled lease receivables 394 211 2,518,190 2,278,594Leased assets Operating leased assets 1,104,639 1,119,309 Cancelled leased assets 3,244 3,769 1,107,883 1,123,078Property and equipment 8 325,428 265,433Other assets Intangible assets 9 61,316 65,117 Non-trade receivables 105,777 87,895 Allowances for doubtful accounts (3,508) (2,913) Accrued revenues 115,124 128,351 Allowances for doubtful accounts (14,023) (14,371) Advance payments 101,765 55,013 Prepaid expenses 38,608 26,434 Leasehold deposits 32,435 35,929 3
  6. 6. Hyundai Capital Services, Inc. and SubsidiariesInterim Consolidated Statements of Financial PositionJune 30, 2012 and December 31, 2011 Notes 2012 2011 Derivative assets 13 260,964 475,431 698,458 856,886 Total assets 21,907,577 21,918,910LiabilitiesBorrowings 10 Borrowings 2,162,331 2,250,000 Debentures 15,211,314 15,522,368 17,373,645 17,772,368Other liabilities Non-trade payables 398,723 345,089 Accrued expenses 145,257 135,083 Unearned revenue 58,345 61,095 Withholdings 28,673 24,140 Defined benefit liability 11 25,522 20,362 Leasehold deposits received 802,907 787,858 Deferred income tax liabilities 48,208 47,884 Provisions 12 9,255 10,446 Derivative liabilities 13 60,378 58,096 1,577,268 1,490,053 Total liabilities 18,950,913 19,262,421Equity Common stock 1 496,537 496,537 Capital surplus Paid-in capital in excess of par value 369,339 369,339 Other capital surplus 38,200 38,200 407,539 407,539 Accumulated other comprehensive income and 20 expenses Gain(loss) on valuation of available-for-sale 199 (388) Securities Accumulated comprehensive income (623) 47 (expense) of equity method investees Gain(loss) on valuation of derivatives 13 6,204 (50,156) Cumulative effect of overseas operation (786) (343) translation 4,994 (50,840) Retained earnings 14 2,047,485 1,803,144 Non-controlling interests 109 109 Total equity 2,956,664 2,656,489 Total liabilities and equity 21,907,577 21,918,910 The accompanying notes are an integral part of these interim consolidated financial statements. 4
  7. 7. Hyundai Capital Services, Inc. and SubsidiariesInterim Consolidated Statements of Comprehensive IncomeThree-Month and Six-Month Periods ended June 30, 2012 and 2011 (In millions of Korean won, except per share amounts) Notes 2012 2011 Three Six Three Six months months months monthsOperating revenue Interest income 15 Interest on bank deposits 11,792 24,394 9,760 18,848 Other interest income 1,388 1,431 124 254 13,180 25,825 9,884 19,102 Gain on valuation and disposal of 428 1,776 480 2,084 securities Income on loans 15,16 372,998 746,409 392,318 773,337 Income on installment financial 15,16 93,416 195,241 109,696 224,289 receivables Income on leases 15,16 225,674 446,927 215,548 438,066 Gain on disposal of loans 28,807 53,619 72,075 72,075 Gain on foreign transactions Gain on foreign exchanges 32,908 66,990 98,261 244,804 translation Gain on foreign currency 18,812 27,800 29,822 transactions 6,597 39,505 85,802 126,061 274,626 Dividend income - 2,831 13 3,251 Other operating income Gain on valuation of derivatives 18,940 15,961 40,344 73,016 Gain on derivatives transactions 3,456 3,456 - 715 Others 36,544 67,641 56,401 81,077 58,940 87,058 96,745 154,808 Total operating revenue 832,948 1,645,488 1,022,820 1,961,638 5
  8. 8. Hyundai Capital Services, Inc. and SubsidiariesInterim Consolidated Statements of Comprehensive IncomeThree-Month and Six-Month Periods ended June 30, 2012 and 2011(In millions of Korean won, except per share amounts) Notes 2012 2011 Three Six Three Six months months months monthsOperating expenses Interest expenses 15 225,476 454,930 237,999 477,921 Lease expenses 16 128,779 252,746 123,787 255,356 Bad debts expense 5 96,712 179,707 79,709 139,425 Loss on foreign transactions Loss on foreign exchange 18,936 15,968 40,349 73,025 translation Loss on foreign currency 3,456 3,456 - 715 transactions 22,392 19,424 40,349 73,740 General and administrative 17 147,439 283,587 127,991 261,177 expenses Other operating expenses Loss on valuation of derivatives 32,913 66,989 98,273 244,821 Loss on derivatives transactions 6,612 18,834 27,810 29,837 Others 23,905 39,294 10,974 21,558 63,430 125,117 137,057 296,216 Total operating expenses 684,228 1,315,511 746,892 1,503,835 Operating income 148,720 329,977 275,928 457,803Non-operating income Gain on equity method valuation 3 2,516 4,659 1,894 4,749 2,516 4,659 1,894 4,749Non-operating expenses - - - - Income before income taxes 151,236 334,636 277,822 462,552Income tax expense 18 35,966 90,296 68,897 108,503 Net income 115,270 244,340 208,925 354,049Net income attributable to: Owners of the parent 115,270 244,340 208,925 354,049 Non-controlling interests - - - - 115,270 244,340 208,925 354,049 6
  9. 9. Hyundai Capital Services, Inc. and SubsidiariesInterim Consolidated Statements of Comprehensive IncomeThree-Month and Six-Month Periods ended June 30, 2012 and 2011(In millions of Korean won, except per share amounts) Notes 2012 2011 Three Six Three Six months months months monthsOther comprehensive income, 20net of income taxes Gain(Loss) on valuation of available-for-sale financial (56) 587 (441) (407) securities Other comprehensive expense (648) (670) (118) (15) of equity method investees Gain (Loss) on valuation of 29,627 56,361 (34,712) 27,609 derivatives Effect of overseas operation (293) (443) 8 (176) translation 28,631 55,835 (35,263) 27,011Total comprehensive income 143,901 300,175 173,662 381,060 Total comprehensive income attributable to: Owners of the parent 143,901 300,175 173,662 381,060 Non-controlling interests - - - - 143,901 300,175 173,662 381,060Earnings per share attributable 19 to the ordinary equity holders of the company Basic earnings per 1,161 2,460 2,104 3,565 share Diluted earnings per 1,161 2,460 2,104 3,565 share The accompanying notes are an integral part of these interim consolidated financial statements. 7
  10. 10. Hyundai Capital Services, Inc. and Subsidiaries Interim Consolidated Statements of Changes in Equity Six-Month periods ended June 30, 2012 and 2011 Accumulated Total(In millions of Korean won) other attributable Non- comprehensive Capital Capital income and Retained to owners of controlling stock surplus expenses earnings the parent interests Total equityBalances as of January 1, 2011 496,537 407,539 (67,371) 1,400,013 2,236,718 129 2,236,847Total comprehensive incomeNet income - - 354,049 354,049 - 354,049Other comprehensive income Loss on valuation of available- - - (407) - (407) - (407) for-sale securities Other comprehensive income of - - (15) - (15) - (15) equity method investees Gain on valuation of derivatives - - 27,609 - 27,609 - 27,609 Effect of overseas operation - - (176) - (176) - (176) translationTotal comprehensive income - - 27,011 354,049 381,060 - 381,060Transactions with ownersDividends - - - (104,272) (104,272) - (104,272)Balances as of June 30, 2011 496,537 407,539 40,360 1,649,790 2,513,506 129 2,513,635 8
  11. 11. Hyundai Capital Services, Inc. and Subsidiaries Interim Consolidated Statements of Changes in Equity Six-Month periods ended June 30, 2012 and 2011 Accumulated Total(In millions of Korean won) other attributable Non- comprehensive Capital Capital income and Retained to owners of controlling stock surplus expenses earnings the parent interests Total equityBalances as of January 1, 2012 496,537 407,539 (50,840) 1,803,144 2,656,380 109 2,656,489Total comprehensive incomeNet income - - 244,340 244,340 - 244,340Other comprehensive income Gain on valuation of available- - - 587 - 587 - 587 for-sale securities Other comprehensive income of - - (670) - (670) - (670) equity method investees Gain on valuation of derivatives - - 56,361 - 56,361 - 56,361 Effect of overseas operation - - (443) - (443) - (443) translationTotal comprehensive income - - 55,835 244,340 300,175 300,175Balances as of June 30, 2012 496,537 407,539 4,995 2,047,484 2,956,555 109 2,956,664 The accompanying notes are an integral part of these interim consolidated financial statements. 9
  12. 12. Hyundai Capital Services, Inc. and SubsidiariesInterim Consolidated Statements of Cash FlowsSix-Month Periods ended June 30, 2012 and 2011(In millions of Korean won) 2012 2011 Cash flows from operating activities Cash generated from operations (Note 21) 783,531 181,944 Interest received 29,334 17,936 Interest paid (415,164) (412,390) Dividends received 2,831 3,251 Income taxes paid (79,537) (87,925) 320,995 (297,184) Cash flows from investing activities Decrease in deposits - 3 Dividends from associates 733 707 Acquisition of investments in associates (10,850) - Acquisition of land (38,113) (1,853) Acquisition of building (22,053) (5,243) Disposal of vehicles 57 37 Acquisition of vehicles (2,337) (166) Disposal of fixtures and furniture - 14 Acquisition of fixtures and furniture (8,391) (15,955) Acquisition of other tangible assets (39) (496) Increase in construction in progress (2,317) (2,604) Disposal of intangible assets - 71 Acquisition of intangible assets (1,170) (5,910) Decrease in leasehold deposits 3,032 1,912 Increase in leasehold deposits (773) (4,183) (82,221) (33,666) Cash flows from financing activities Proceeds from borrowings 1,238,225 1,300,000 Repayments of borrowings (1,325,000) (2,016,945) Issuance of debentures 2,406,025 3,152,196 Repayments of debentures (2,444,732) (1,842,033) Payments of dividends - (104,273) (125,482) 488,945 Exchange losses on cash and cash equivalents (8) (5) Decrease in other cash and cash equivalents (443) (176) Net increase in cash and cash equivalents 112,841 157,913 Cash and cash equivalents Beginning of period 1,455,433 1,224,866 End of period 1,568,274 1,382,779 The accompanying notes are an integral part of these interim consolidated financial statements. 10
  13. 13. Hyundai Capital Services, Inc. and SubsidiariesNotes to the Interim Consolidated Financial StatementsJune 30, 2012 and 2011, and December 31, 20111. General information Hyundai Capital Services, Inc. was established on December 22, 1993, to engage in installment financing, facilities lease and new technology financing. The Company changed its trade name from Hyundai Auto Finance Co., Ltd. to Hyundai Financial Services Co. on April 21, 1995, and changed its trade name once again to Hyundai Capital Services, Inc. on December 30, 1998. In accordance with the Monopoly Regulation and Fair Trade Act, the Company is incorporated into Hyundai Motor Company Group. As of June 30, 2012, the Company’s operations are headquartered in Yeouido, Seoul. Its major shareholders are Hyundai Motor Company and GE International Holdings Corporation with 56.47% and 43.30% ownership, respectively. The interim consolidated financial statements have been prepared and presented which included the accounts of Hyundai Capital Services, Inc. (the “Company”), as the parent company according to Korean IFRS 1027, and Autopia Thirty-fifth trust and SPC and other subsidiaries (collectively the “Group”), while HK Mutual Savings Bank and four other entities are associates. Subsidiaries as of June 30, 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%. Ratio of Location ownership June 30, 2012 December 31, 2011 Special Korea 0.9% Autopia Thirty-fifth SPC(trust) Autopia Thirty-fifth SPC(trust) Purpose Autopia Thirty-sixth SPC(trust) Autopia Thirty-sixth SPC(trust) 1 Entities Autopia Thirty-seventh SPC(trust) Autopia Thirty-seventh SPC(trust) Autopia Thirty-ninth SPC(trust) Autopia Thirty-ninth SPC(trust) Autopia Fortieth SPC(trust) Autopia Fortieth SPC(trust) Autopia Forty-second SPC(trust) Autopia Forty-second SPC(trust) Autopia Forty-third SPC(trust) Autopia Forty-third SPC(trust) Autopia Forty-fourth SPC(trust) Autopia Forty-fourth SPC(trust) Autopia Forty-fifth SPC(trust) Autopia Forty-fifth SPC(trust) Autopia Forty-sixth SPC(trust) Autopia Forty-sixth SPC(trust) Autopia Forty-seventh SPC(trust) Autopia Forty-seventh SPC(trust) 1 1 Stock Germany 100% Hyundai Capital Europe GmbH Hyundai Capital Europe GmbH Company 1 It holds 100% shares of Hyundai Capital Services Limited Liability Company.2. Summary of Significant Accounting Policies 2.1 Basis of Preparation The Group’s interim consolidated financial statements for the six-month period ended June 30, 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 11
  14. 14. Hyundai Capital Services, Inc. and SubsidiariesNotes to the Interim Consolidated Financial StatementsJune 30, 2012 and 2011, and December 31, 2011 IFRS standards and interpretations issued and effective or issued and early adopted as of June 30, 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-IFRS 1019, Employee Benefits According to the amendments to Korean-IFRS 1019, Employee Benefits, the corridor method is no longer permitted. Therefore, actuarial gains and losses on the defined benefit obligation are 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-IFRS 1019 on its consolidated financial statements. - Enactment of Korean-IFRS 1113, Fair value measurement Korean-IFRS 1113, Fair value measurement, aims to improve consistency and reduce complexity by providing a precise definition of fair value and a single source of fair value measurement and disclosure requirements for use across Korean-IFRS. Korean-IFRS 1101 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 significant impact on the Group. - Enactment of Korean-IFRS 1001, Presentation of Financial Statements According to the amendments to Korean-IFRS 1001, Presentation of Financial Statements, items of other comprehensive income present as two groups depending on whether it will be reclassified subsequently to profit or loss or not. An entity shall apply those amendments for annual periods beginning on or after July 1, 2012, and earlier application is permitted. The Group is assessing the impact of application of the amended Korean-IFRS 1001 on its consolidated financial statements. 2.2 Accounting Policies - 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. 12
  15. 15. Hyundai Capital Services, Inc. and SubsidiariesNotes to the Interim Consolidated Financial StatementsJune 30, 2012 and 2011, and December 31, 20113. Securities Securities as of June 30, 2012 and December 31, 2011, are as follows: (in millions of Korean won) Type 2012 2011 Available-for-sale securities Equity Marketable equity securities 5,600 5,687 securities Unlisted equity securities 11,208 10,526 16,808 16,213 Debt Government and public bonds 4,671 2,239 securities Sub-total 21,479 18,452 Investments in associates 65,874 51,768 87,353 70,220 Available-for-sale securities Available-for-sale securities as of June 30, 2012 and December 31, 2011, are as follows: (1) Marketable equity securities (in millions of Korean won) Book value Number of Ownership Acquisition 2012 2011 shares (%) cost Marketable equity securities NICE Information Service 136,593 2.25 3,312 3,118 3,190 NICE Holdings 49,162 1.42 3,491 2,482 2,497 Unlisted equity securities 1 Hyundai Finance Corp. 1,700,000 9.29 9,888 11,108 10,426 Korean Egloan, Inc. 4,000 3.12 100 100 100 16,791 16,808 16,213 1 The fair value for Hyundai Finance Corp. was valued as the average of valuation prices provided by two external appraisers, KIS Pricing Inc. and Korea Asset Pricing, using the discounted cash flow model. The five-year financial statements, projected based on past performance, were used in measuring the fair value assuming that the operational structure will remain as is for the next five years. Operating income and expenses were estimated based on the past performance, business plan and expected market conditions. (2) Debt securities (in millions of Korean won) Book value Interest Acquisition Issuer rate (%) cost 2012 2011 Government and Metropolitan Rapid 2.50 3,322 4,671 2,239 public bonds Transit and others 13
  16. 16. Hyundai Capital Services, Inc. and SubsidiariesNotes to the Interim Consolidated Financial StatementsJune 30, 2012 and 2011, and December 31, 2011 Investments in associates Details of investments in associates as of June 30, 2012 and December 31, 2011, are as follows: (in millions of Korean won) 2012 Number of Ownership Acquisition Net asset Book value shares (%) cost value 1 HK Mutual Savings Bank 4,990,438 20.00 45,719 37,211 49,460 1 HI Network, Inc. 13,332 19.99 76 570 570 1 Korea Credit Bureau 140,000 7.00 3,800 2,892 3,929 Hyundai Capital Germany 2 600,200 30.01 1,065 1,005 1,065 GmbH 2 Hyundai Capital UK Ltd. 1,000,000 29.99 10,850 10,734 10,850 61,510 52,421 65,874 1 The Company’s shareholdings are less than 20%. However, the Group is able to significantly influence such as involvement in the financial and operating processes, and thus the equity method is applied. 2 The Group’s shareholdings are more than 20%. However, equity method is not applied due to insignificant fluctuation of equities. (in millions of Korean won) 2011 Number of Ownership Acquisition Net asset Book value shares (%) cost value 1 HK Mutual Saving Bank 4,990,438 20.00 45,719 33,487 45,735 1 HI Network, Inc. 13,332 19.99 76 1,003 1,003 1 Korea Credit Bureau 140,000 7.00 3,800 2,928 3,965 Hyundai Capital Germany 2 600,200 30.01 1,065 1,065 1,065 GmbH 50,660 38,483 51,768 Valuations of investments in associates for the six-month periods ended June 30, 2012 and 2011, are as follows:(in millions of Korean won) 2012 Changes in accumulated Beginning Gain on Ending Acquisition other Dividends Balance valuation Balance comprehensive lossHK Mutual Savings Bank 45,735 - 4,139 (414) - 49,460HI Network, Inc. 1,003 - 300 - (733) 570Korea Credit Bureau 3,965 - 220 (256) - 3,929Hyundai Capital Germany - - 1,065 GmbH 1,065 - -Hyundai Capital UK Ltd. - 10,850 - - - 10,850 51,768 10,850 4,659 (670) (733) 65,874 14
  17. 17. Hyundai Capital Services, Inc. and SubsidiariesNotes to the Interim Consolidated Financial StatementsJune 30, 2012 and 2011, and December 31, 2011(in millions of Korean won) 2011 Changes in Beginning Gain on accumulated other Ending Dividends Balance valuation comprehensive Balance lossHK Mutual Savings Bank 42,849 4,305 47 - 47,201HI Network, Inc. 1,055 193 - (706) 542Korea Credit Bureau 3,514 251 - - 3,765Hyundai Capital Germany 1,065 - - - 1,065 GmbH 48,483 4,749 47 (706) 52,573 Summary of financial information of investees as of June 30, 2012 and December 31, 2011, for assets and liablities, and for the six-month periods ended June 30, 2012 and 2011, for revenue and income, are as follows: (in millions of Korean won) 2012 Operating Assets Liabilities Net income revenue HK Mutual Savings Bank 2,584,522 2,398,465 195,441 20,694 HI Network, Inc. 5,586 2,738 8,921 1,619 Korea Credit Bureau 50,082 8,762 22,500 3,649 Hyundai Capital Germany 3,846 337 1,171 503 GmbH Hyundai Capital UK Ltd. 35,792 - - - (in millions of Korean won) 2011 Operating Assets Liabilities Net income revenue 1 HK Mutual Savings Bank 2,593,289 2,425,855 180,413 21,527 HI Network, Inc. 8,560 3,544 9,854 1,007 Korea Credit Bureau 51,484 9,650 18,066 3,513 Hyundai Capital Germany 3,889 341 316 58 GmbH 1 Although HK Mutual Savings Bank’s fiscal year is from July 2010 to June 2011, the asset and liability amounts are as of December 31, 2011, and its operating revenue and net income amounts are from January 1, 2011 to June 30, 2011. 15
  18. 18. Hyundai Capital Services, Inc. and Subsidiaries Notes to the Interim Consolidated Financial Statements June 30, 2012 and 2011, and December 31, 2011 4. Financial receivables Financial receivables as of June 30, 2012 and December 31, 2011, are as follows:(in millions of Korean won) 2012 Deferred loan origination fees Allowance Present value Carrying Principal and costs for doubtful discounts amount (Direct profit for accounts leased assets)Loans receivable Loans 11,597,275 (114,082) (1,641) (279,331) 11,202,221Installment financial assets Auto 4,469,357 (58,492) - (30,664) 4,380,201 Durable goods 223 - - (11) 212 Mortgage 19,462 39 - (316) 19,185 Machinery 164 - 1 (2) 163 4,489,206 (58,453) 1 (30,993) 4,399,761Lease receivables Finance lease 2,544,026 (626) - (25,604) 2,517,796 receivables Cancelled lease 5,868 - - (5,474) 394 receivables 2,549,894 (626) - (31,078) 2,518,190 18,636,375 (173,161) (1,640) (341,402) 18,120,172 2011 Deferred loan origination fees Allowance Present value Carrying Principal and costs for doubtful discounts amount (Direct profit for accounts leased assets)Loans receivable Loans 11,239,870 (108,782) (1,841) (281,184) 10,848,063Installment financial assets Auto 5,109,299 (78,757) - (36,748) 4,993,794 Durable goods 1,419 3 - (141) 1,281 Mortgage 25,620 60 - (1,204) 24,476 Machinery 1,674 - 6 (37) 1,643 5,138,012 (78,694) 6 (38,130) 5,021,194Lease receivables Finance lease 2,300,204 (703) - (21,118) 2,278,383 receivables Cancelled lease 4,656 - - (4,445) 211 receivables 2,304,860 (703) - (25,563) 2,278,594 18,682,742 (188,179) (1,835) (344,877) 18,147,851 16
  19. 19. Hyundai Capital Services, Inc. and Subsidiaries Notes to the Interim Consolidated Financial Statements June 30, 2012 and 2011, and December 31, 2011 5. Allowance for Doubtful Accounts Changes in allowance for doubtful accounts for the six-month periods ended June 30, 2012 and 2011, are as follows:(in millions of Korean won) 2012 Loan Installment Lease Type Other assets Total receivables financial assets receivablesBeginning balance 281,184 38,130 25,563 17,284 362,161Amounts written off (206,813) (21,432) (15) (3,607) (231,867)Recoveries of amounts 43,222 5,288 241 4,150 52,901 previously written offUnwinding of discount (3,733) (140) (96) - (3,969)Additional(reversed) 165,471 9,147 5,385 (296) 179,707 allowanceEnding balance 279,331 30,993 31,078 17,531 358,933 2011 Loan Installment Lease Type Other assets Total receivables financial assets receivablesBeginning balance 215,703 28,643 21,031 7,649 273,026Amounts written off (137,115) (13,816) (11) (2,415) (153,357)Recoveries of amounts 48,063 6,726 62 4,010 58,861 previously written offUnwinding of discount (3,091) (156) (62) - (3,309)Additional(reversed) 132,130 8,539 1,458 (2,702) 139,425 allowanceEnding balance 255,690 29,936 22,478 6,542 314,646 17
  20. 20. Hyundai Capital Services, Inc. and SubsidiariesNotes to the Interim Consolidated Financial StatementsJune 30, 2012 and 2011, and December 31, 20116. Financial instruments The fair values of financial instruments as of June 30, 2012 and December 31, 2011, are as follows: (in millions of Korean won) 2012 2011 Type Book value Fair value Book value Fair value Assets Financial assets Cash and deposits 1,568,283 1,568,283 1,455,442 1,455,442 Available-for-sale 21,479 21,479 18,452 18,452 securities Loans receivable 11,202,221 11,501,001 10,848,063 11,124,599 Installment financial 4,399,761 4,504,264 5,021,194 5,145,837 assets Derivative assets 260,964 260,964 475,431 475,431 Other assets 235,804 235,926 234,892 234,810 17,688,512 18,091,917 18,053,474 18,454,571 Liabilities Financial liabilities Borrowings 2,162,330 2,174,365 2,250,000 2,257,918 Debentures 15,211,314 15,694,138 15,522,368 15,886,881 Derivative liabilities 60,378 60,378 58,096 58,096 Other liabilities 1,248,474 1,255,561 1,183,744 1,190,133 18,682,496 19,184,442 19,014,208 19,393,028 The fair value hierarchy of financial assets and liabilities carried at fair value as of June 30, 2012 and December 31, 2011, are as follows: (in millions of Korean won) 2012 1 Fair value hierarchy Type Book value Fair value level 1 level 2 level 3 Financial assets Available-for-sale 21,479 21,479 5,600 4,671 11,208 securities Derivative assets 260,964 260,964 - 260,964 - 282,443 282,443 5,600 265,635 11,208 Financial liabilities Derivative liabilities 60,378 60,378 - 60,378 - 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 18
  21. 21. Hyundai Capital Services, Inc. and SubsidiariesNotes to the Interim Consolidated Financial StatementsJune 30, 2012 and 2011, and December 31, 2011 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 (in millions of Korean won) 2011 1 Fair value hierarchy Type Book value Fair value level 1 level 2 level 3 Financial assets Available-for-sale 18,452 18,452 5,687 2,239 10,526 securities Derivative assets 475,431 475,431 - 475,431 - 493,883 493,883 5,687 477,670 10,526 Financial liabilities Derivative liabilities 58,096 58,096 - 58,096 -7. Derecognition of financial assets The Group issued securitized debts based on loans and installment financial assets, and the associated securitized debts have recourse only to the transferred assets. Details of financial assets transferred and not derecognized as of June 30, 2012 and December 31, 2011, are as follows: (in millions of Korean won) Type 2012 2011 Book value of assets Loans receivable 1,859,501 2,289,879 Installment assets 1,689,912 1,775,534 3,459,413 4,065,413 1 Book value of related liabilities (2,243,131) (2,748,872) Liabilities having right of resource on transferred assets : Fair value of assets 3,639,148 4,167,861 1 Fair value of related liabilities (2,266,653) (2,772,816) Net position 1,372,495 1,395,045 1 Related liabilities are amounts of securitized debts and associated derivative assets.8. Property and equipment Changes in property and equipment for the six-month periods ended June 30, 2012 and 2011, are as follows: 19
  22. 22. Hyundai Capital Services, Inc. and SubsidiariesNotes to the Interim Consolidated Financial StatementsJune 30, 2012 and 2011, and December 31, 2011 (in millions of Korean won) 2012 Beginning Ending Type Acquisition Replacement Disposal Depreciation balance balance Land 105,425 38,112 - - - 143,537 Buildings 97,939 22,053 - - (2,067) 117,925 Structures 2,558 - - - (35) 2,523 Vehicles 761 2,337 - (44) (384) 2,670 Fixture and 53,770 8,391 893 (347) (10,344) 52,363 furniture Others 1,994 39 - - (4) 2,029 Construction in 2,986 2,317 (922) - - 4,381 progress 265,433 73,249 (29) (391) (12,834) 325,428 2011 Beginning Ending Type Acquisition Replacement Disposal Depreciation balance balance Land 101,844 1,853 - - - 103,697 Buildings 92,543 5,243 - - (1,541) 96,245 Structures 2,246 - - - (31) 2,215 Vehicles 838 166 - (30) (184) 790 Fixture and 35,321 15,956 19 (14) (9,083) 42,199 furniture Others 1,200 496 259 - (4) 1,951 Construction in 8,377 2,604 (6,718) - - 4,263 progress 242,369 26,318 (6,440) (44) (10,843) 251,3609. Intangible assets Changes in intangible assets for the six-month periods ended June 30, 2012 and 2011, are as follows: (in millions of Korean won) 2012 Beginning Ending Type Increase Replacement Amortization balance balance Development costs 28,635 1,170 31 (4,027) 25,809 Rights of trademark 30 - - (7) 23 Other intangible assets 36,452 - (2) (966) 35,484 65,117 1,170 29 (5,000) 61,316 20
  23. 23. Hyundai Capital Services, Inc. and SubsidiariesNotes to the Interim Consolidated Financial StatementsJune 30, 2012 and 2011, and December 31, 2011 (in millions of Korean won) 2011 Beginning Ending Type Increase Replacement Disposal Amortization balance balance Development costs 20,004 581 6,440 (50) (2,992) 23,983 Rights of trademark 44 - - - (7) 37 Other intangible assets 32,564 5,328 - (21) (893) 36,978 52,612 5,909 6,440 (71) (3,892) 60,99810. Borrowings Changes in borrowings for the six-month periods ended June 30, 2012 and 2011, are as follows: (in millions of Korean won) Types 2012 2011 Beginning balance 17,772,368 17,043,686 Borrowing 3,644,250 4,452,196 Repayment (3,769,732) (3,858,978) Others (273,241) (249,682) Ending balance 17,373,645 17,387,22211. Defined benefit liability The amounts of defined benefit plans recognized in the statements of financial position as of June 30, 2012 and December 31, 2011, are as follows: (in millions of Korean won) Type 2012 2011 Present value of funded obligations 54,641 49,709 1 Fair value of plan assets (29,119) (29,347) Defined benefit liability 25,522 20,362 1 As of June 30, 2012, contribution to the National Pension Fund of 42 million is included (December 31, 2011 : 45 million). Details of the amounts recognized in the comprehensive income statements for the six-month periods ended June 30, 2012 and 2011, are as follows : (in millions of Korean won) Type 2012 2011 Current service cost 5,736 4,697 Interest cost 982 885 Expected return on plan assets (572) (525) Actuarial losses 1,250 1,056 21
  24. 24. Hyundai Capital Services, Inc. and SubsidiariesNotes to the Interim Consolidated Financial StatementsJune 30, 2012 and 2011, and December 31, 2011 7,396 6,11312. Provisions for unused loan commitments Changes in provisions for unused loan commitments for the six-month periods ended June 30, 2012 and 2011, are as follows: (in millions of Korean won) Type 2012 2011 Beginning balance 10,445 46,624 Reversals (1,190) (33,513) Ending balance 9,255 13,11113. Derivative financial instruments and hedge accounting Trading derivatives as of June 30, 2012 and December 31, 2011, are as follows: (in millions of Korean won) 2012 2011 Type Assets Liabilities Assets Liabilities Forward foreign exchange 33 - 53 - During the six-month periods ended June 30, 2012 and 2011, the Group recognized loss on trading derivatives of 19 million and 37 million, respectively. Derivatives designated as cash flow hedges as of June 30, 2012 and December 31, 2011, are as follows: (in millions of Korean won) 2012 2011 Type Notional Notional Assets Liabilities Principal Assets Liabilities Principal amounts amounts Interest rate swaps 103 1,477 (1,042) 12 1,331 (1,000) Currency swaps 260,828 58,901 7,246 475,366 56,765 (49,157) 260,931 60,378 6,204 475,378 58,096 (50,157) 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 12, 2017. There is no ineffective portion recognized related to cash flow hedge for the six-month periods ended June 30, 2012 and 2011. 22
  25. 25. Hyundai Capital Services, Inc. and SubsidiariesNotes to the Interim Consolidated Financial StatementsJune 30, 2012 and 2011, and December 31, 201114. Equity Details of appropriated and expected reserves for bad loans as of June 30, 2012 and December 31, 2011, are as follows: (in millions of Korean won) Type 2012 2011 Appropriated reserve for bad loans 270,220 - Expected reserve for bad loans 25,014 270,220 295,234 270,220 Transfer to reserve for bad loans and net income in consideration of effect of changes in reserve for bad loans for the six-month periods ended June 30, 2012 and 2011, are as follows: (in millions of Korean won, except per share amounts) Type 2012 2011 Net income 244,340 354,049 1 Expected transfer to reserve for bad loans 25,014 (4,848) Net income in consideration of changes in reserve for 2 219,326 358,897 bad loans Net income per share in consideration of changes in 2 2,209 3,614 reserve for bad loans(In Korean won) 1 The amount transferred to reserve for bad loans for the six-month period ended June 30, 2011, is the difference between the balance of reserve for bad loans as of June 30, 2011, and the balance as of December 31, 2010. 2 Net income and earnings per share in consideration of changes in reserve for bad loans are not accordance with K-IFRS, and these amounts are the sum of the expected transfer to reserve for bad loans before income tax and net income.15. Net interest income Net interest income for the three-month and the six-month periods ended June 30, 2012 and 2011, consists of: (in millions of Korean won) 2012 2011 Type Three months Six months Three months Six months Interest income Cash and deposits 12,385 24,394 10,350 18,848 Loans receivable 361,022 722,758 378,791 746,382 Installment financial 91,852 192,041 108,070 220,978 assets 1 Lease receivables 58,692 115,665 52,567 104,464 Other² 1,387 1,431 124 254 23
  26. 26. Hyundai Capital Services, Inc. and SubsidiariesNotes to the Interim Consolidated Financial StatementsJune 30, 2012 and 2011, and December 31, 2011 525,338 1,056,289 549,902 1,090,926 Interest expenses Borrowings 25,732 52,716 25,941 51,680 Debentures 188,760 380,421 200,939 399,567 Other² 10,984 21,793 11,120 26,674 225,476 454,930 238,000 477,921 Net interest income 299,862 601,359 311,902 613,005 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 the six-month periods ended June 30, 2012 and 2011, consists of: (in millions of Korean won) 2012 2011 Type Three months Six months Three months Six months Commission income Loans receivable 11,976 23,651 13,527 26,955 Installment financial assets 1,564 3,200 1,625 3,311 Lease receivables 39,227 75,783 29,517 56,541 52,767 102,634 44,669 86,807 Commission expenses Lease expenses 4,802 9,060 3,429 6,675 Net Commission Income 47,965 93,574 41,240 80,13217. General and administrative expenses General and administrative expenses for the three-month and the six-month periods ended June 30, 2012 and 2011, are as follows: (in millions of Korean won) 2012 2011 Type Three months Six months Three months Six months Payroll 31,344 59,313 25,888 52,097 Severance benefits 4,706 7,517 3,597 6,119 Fringe benefits 8,605 19,157 7,790 16,524 Depreciation 6,629 12,834 5,604 10,843 Advertising 13,857 24,399 9,068 18,150 Travel and transportation 1,660 2,922 1,055 2,026 Communication 3,544 7,187 3,180 6,461 Water, lighting and heating 2,897 5,414 2,110 4,390 24
  27. 27. Hyundai Capital Services, Inc. and SubsidiariesNotes to the Interim Consolidated Financial StatementsJune 30, 2012 and 2011, and December 31, 2011 Commission 4,864 8,919 4,866 8,576 Sales commission 15,741 29,911 14,088 38,841 Amortization 2,472 5,000 2,035 3,892 Outsourcing service charges 17,782 33,220 16,585 32,499 Rent 9,599 18,429 9,630 17,927 Other expenses 23,739 49,365 22,495 42,832 147,439 283,587 127,991 261,17718. 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, 2012, is 27% (the estimated average annual tax rate for the period ended June 30, 2011, is 23%).19. Earnings per share Basic earnings per share attributable to common stock for the three-month and the six-month periods ended June 30, 2012 and 2011, is as follows: 2012 2011 Type Three months Six months Three months Six months (1) Net income attributable to common stock 115,269,826,053 244,340,097,651 208,924,894,050 354,048,916,718 (In Korean won) (2) Weighted average of number of outstanding 99,307,435 99,307,435 99,307,435 99,307,435 common shares (3) Basic earnings per share (In Korean won) 1,161 2,460 2,104 3,565 (1)÷(2) b. Diluted earnings per share As there was no discontinued operation during the three-month and the six-month periods ended June 30, 2012 and 2011, basic earnings per share is the same as basic earnings per share from continuing operations. There are no potential common stocks as of June 30, 2012 and 2011. Therefore, the diluted earnings per share is the same as basic earnings per share for the three- month and the six-month periods ended June 30, 2012 and 2011.20. Other comprehensive income Other comprehensive income for the six-month periods ended June 30, 2012 and 2011, consists of: 25
  28. 28. Hyundai Capital Services, Inc. and SubsidiariesNotes to the Interim Consolidated Financial StatementsJune 30, 2012 and 2011, and December 31, 2011 (in millions of Korean won) 2012 Changes Beginning Reclassifi- Income Ending Type cation of Other balance tax effects balance profit or changes loss Gain(loss) on valuation of available-for-sale (388) - 720 (133) 199 financial assets Accumulated comprehensive 47 - (670) - (623) income of equity method investees Gain(loss) on valuation (50,157) 419 63,845 (7,903) 6,204 of derivatives Loss on exchange differences of foreign (343) - (443) - (786) operations (50,841) 419 63,452 (8,036) 4,994 (in millions of Korean won) 2011 Changes Beginning Reclassifi- Income tax Ending Type cation of Other balance effects balance profit or changes loss Gain(loss) on valuation of available-for-sale 512 (661) 140 114 105 financial assets Accumulated comprehensive 24 - 47 (62) 9 income of equity method investees Gain(loss) on valuation (67,924) 5,919 29,833 (8,143) (40,315) of derivatives Gain(loss) on exchange differences of foreign 17 - (176) - (159) operations (67,371) 5,258 29,844 (8,091) (40,360)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 June 30, 2012 and December 31, 2011, are as follows: (in millions of Korean won) Type 2012 2011 Cash 1 4 Ordinary deposits 134,135 135,706 26
  29. 29. Hyundai Capital Services, Inc. and SubsidiariesNotes to the Interim Consolidated Financial StatementsJune 30, 2012 and 2011, and December 31, 2011 Current deposits 3,438 1,923 Short-term financial instruments 1,430,700 1,317,800 1,568,274 1,455,433 Cash generated from operations for the six-month periods ended June 30, 2012 and 2011, is as follows:(in millions of Korean won) Type 2012 2011Net income 244,340 354,049Adjustments Net interest expenses 429,105 458,819 Income tax 90,296 108,503 Gain on disposal of available-for-sale financial (1,776) (2,084) assets Income on loans (17,864) (21,784) Income on installment financial receivables (37,664) (48,436) Gain on leases (636) (609) Gain on foreign exchanges translation (66,990) (244,804) Dividend income (2,831) (3,251) Gain on valuation of derivatives (15,961) (73,016) Gain on disposal of property and equipment (30) (6) Reversal of provisions (1,190) (33,513) Gain on equity method valuation (4,659) (4,749) Lease expenses 169,634 187,616 Bad debts expense 179,707 139,425 Loss on foreign exchanges translation 15,968 73,024 Severance benefits 7,396 6,113 Depreciation 12,834 10,843 Amortization of intangible assets 5,000 3,892 Loss on valuation of derivatives 66,989 244,820 Loss on disposal of property and equipment 364 - Loss on bond retirement - 16 827,692 800,819Changes in operating assets and liabilities (Increase) in available-for-sale financial (531) 1,543 Assets (Increase) in loans receivable (545,005) (792,990) Decrease in installment financial assets 644,662 162,753 (Increase) in finance lease receivables (400,835) (437,084) Decrease in cancelled leased receivables 4,853 3,710 (Increase) in operating leased assets (154,963) (76,644) Decrease in cancelled leased assets 151,918 111,970 Increase in allowance for doubtful accounts 52,923 58,860 (Increase) in non-trade receivables (21,487) (34) Decrease in accrued revenues 8,287 4,306 Increase in advance payments (46,752) (590) 27
  30. 30. Hyundai Capital Services, Inc. and SubsidiariesNotes to the Interim Consolidated Financial StatementsJune 30, 2012 and 2011, and December 31, 2011 (Increase) in prepaid expenses (9,509) (7,442) Decrease(increase) in derivative assets (12,822) 21,192 Increase in non-trade payables 35,161 7,288 (Decrease) in accrued expenses (62) (277) (Decrease) in unearned revenue (2,750) (3,976) Increase in withholdings 4,533 4,943 (Decrease) in leasehold deposits received (6,727) (11,068) Payment of severance benefits (3,333) (2,923) Decrease(increase) in plan assets 734 (1,884) Transfer of severance benefits from related parties 866 1,405 Transfer of severance benefits to related parties (504) (1,193) Increase in derivative liabilities 12,842 (14,789) (288,501) (972,924) 783,531 181,94422. Commitments and Contingencies a. Credit Line Agreement Details of unused credit line agreements of the Group as of June 30, 2012 and December 31, 2011, are as follows: (in millions of Korean won) Type Financial institutions 2012 2011 Limit of overdraft Shinhan Bank and 2 other banks 41,500 41,500 Limit of daily loan SC Bank and 2 other banks 45,000 45,000 86,500 86,500 b. Credit Facility Agreement The Group has revolving credit facility agreements with several financial institutions as of June 30, 2012 and December 31, 2011. Details of credit facility agreements are as follows: (in millions of Korean won) Financial institutions 2012 2011 Equivalent of Equivalent of 1 GE Capital European Funding & Co USD 1 billion in USD 1 billion in Euros Euros Mizuho Corporate Bank, Seoul Branch 65,000 65,000 JPMorgan, Seoul Branch 110,000 80,000 Citibank, Seoul 50,000 50,000 Standard Chartered, Seoul Branch 50,000 50,000 28

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