Kia 2001 Annual Report Download

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KIA MOTORS CORPORATION
2OO1
ANNUAL REPORT
2001 ANNUAL REPORT KIA MOTORS CORPORATION
231, Yangjae-Dong, Seocho-Gu,
Seoul, 137-938, Korea
TEL: 82-2-3464-1114
http : //www.kia.co.kr
http : //www.kmcir.com

Table of contents

  • Page 1
    2001 ANNUAL REPORT KIA MOTORS CORPORATION ANNUAL REPORT 2O O 1 K I A M O T O RS CO RPO RA T I O N 231, Yangjae-Dong, Seocho-Gu, Seoul, 137-938, Korea TEL: 82-2-3464-1114 http : //www.kia.co.kr http : //www.kmcir.com

  • Page 2
    ... Per Share (Korean Won, U.S. Dollars) Return On Equity(%) 1,424 1.07 17.1 3,097 3,062 3,393 2,559 743 10.7 24. Operational Report 33. Auditor's Report 34. Report of Independent Public Accountants 36. Financial Statements & Notes 68. Kia Motors' Major Export Lineup 70. Corporate History 1999...

  • Page 3
    In 2001 Kia Motors recorded the best year in the company's history. In its third consecutive year of profitable operations, Kia recorded 12.4 trillion won in sales and 552 billion won in net income. Domestic sales reached 4 1 0 , 0 0 0 unit s, re pre se nt ing 1 % ye a r- on- ye a r growth. Exports ...

  • Page 4
    ... t he second Asian t o receive t he aw ard af t er Honda's Hiroyuki Yoshino in 1998. The DSC est ablishes Kia's credent ials as a w orld-class player and w ill st rengt hen t he company's posit ion in bot h t he Korean and U.S. aut omobile market s. Chairman & CEO of Kia Motors, Chung, Mong Koo

  • Page 5
    ... end of 2001 t o act as major sponsor f or t he 2002 and 2003 Aust ralian Tennis Open. This is a groundbreaking move f or Kia, and is a part of a global sport s market ing st rat egy t hat w ill seek t o leverage high-prof ile int ernat ional sport ing event s t o raise aw areness of t he Kia brand...

  • Page 6
    NEW ACTION Part 2 Setting the Standard Kia is rapidly developing a global reput at ion f or developing vehicles t hat meet or exceed int ernat ional st andards f or saf et y and qualit y. Furt her init iat ives in 2002 and beyond w ill build on t his reput at ion, making t he Kia brand synonymous ...

  • Page 7
    ... MOTORS Domestic business activities Kia's outstanding sales results and a strategy of brand differentiation have secured the company's number two position in the Korean market. After a contraction early in the year, domestic demand for automobiles in 2001 gradually recovered to eventually record...

  • Page 8
    ... in 2002, including 522,000 finished cars. To achieve this goal, the company is distinguishing betw een volume-oriented and profitoriented models and initiating a diversified sales strategy. Brand recognition w ill be bolstered through improved advertising, PR and sales promotions. Kia w ill also...

  • Page 9
    ...given Kia the industry' s highest ratings in the maintenance area in a number of customer satisfaction surveys. In 2002, Kia is improving service still further by introducing the Kia Q-Service brand. The goal is to achieve predominance in the domestic automobile service market. Kia is also building...

  • Page 10
    .... The Rio and Carnival II acquired top ratings in safety tests at home and abroad. Sales of these models expanded in North America, attracting U.S. drivers w ith an unprecedented w arranty program and improved product quality. Efforts are underw ay to achieve a new production record in 2002. Kia is...

  • Page 11
    NEW FUTURE Part 3 Setting the Pace From remot e desert s t o st at e-of -t he-art racet racks, Kia vehicles are everyw here. Kia is a w orld-class company w it h a burgeoning reput at ion f or global qualit y and global service.

  • Page 12
    ... billion won. Higher sales of value-added vehicles such as the profitable Optima and Carnival II contributed greatly to sales expansion. President Kim urged every employee to work toward " adapting all company processes - production, sales, service and quality - to the customer's point of view." He...

  • Page 13
    ... the U.S. market, the world's largest, Kia launched the Carnival(Sedona) minivan and recorded the highest sales growth rate among Korean automakers. Kia's recent export success is attributed to bold marketing, improved customer satisfaction from quality improvements, and expanded product lines. The...

  • Page 14
    ...online-related businesses. Businesses incidental to those listed above. 3. Plants, Research Centers and Sales Offices Name Sohari Plant Particulars Production of the Carnival and Rio Production of the Enterprise, Optima Regal, Optima, Spectra, Spectra Wing, Carens, Sportage, and Sorento Production...

  • Page 15
    ... Korea Economic Daily None December 31 Within 3 months after close of fiscal year Between January 1 and 31 1, 5, 10, 50, 100, 500, 1,000, and 10,000 shares (8 types) Main Product Categories Contents 2001 Passenger cars RVs Vans Other 501,117 271,722 90,772 99,811 Units 2000 Production Value 2001...

  • Page 16
    ...Ltd. Hyundai Powertek Co., Ltd. 2,000 mn. Professional baseball team 400,000 100% Investment Land Buildings, structures Machinery Vehicles Tools Furnishings Main Areas Seokcheon Port reclamation project Domestic sales offices For production For transport and rental For production Communication...

  • Page 17
    ...Shareholders (millions of Won) Name Hyundai Motor Hyundai Capital Hanvit Bank Korea Development Bank NPL Management Fund Shares Held 134,285,491 36,180,000 51,539,932 18,242,390 10,060,863 Equity Share(%) 36.33 9.79 13.94 4.94 2.72 Business Ties with Kia Automobile production on commission Major...

  • Page 18
    ... Korean Law. Key Issues after Fiscal Year Closure No key issues to report. 11. Important Points Related to Other Business Important Points Related to Other Business No key issues to report. February 20, 2002 Kia Motors Coporation Audit Committee Chairman of Audit Committee Kim, Jong-chang Member...

  • Page 19
    ... Korean REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS reacquired for retirement purposes since the date of the shareholders' meeting. As a result of the stock retirement, the number of the Company's total common shares issued has been reduced to 369,597,455 shares as of December 31, 2001. As discussed...

  • Page 20
    ...dollars (Note 2) (in thousands) 2001 ASSETS Current assets: Cash and cash equivalents (Notes 9 and 10) Short-term financial instruments (Notes 9 and 10) Marketable securities (Note 4) Trade notes and accounts receivable, net of unamortized present value discount of in 2001 and for doubtful accounts...

  • Page 21
    ... accumulated deficit, beginning of year Beginning balance adjustments: Cumulative effects of accounting change (Note 2) Asset Revaluation Tax (Note 16) Adjustments in investment securities using the equity method and others (Note 4) Adjusted beginning balance of accumulated deficit Net income...

  • Page 22
    ... of investments accounted for using equity method, net Loss (gain) on disposal of marketable securities, net Loss on impairment of investments Loss on disposal of property, plant and equipment, net Gain on disposal of Parts Sales Division Amortization of present value discount Other extraordinary...

  • Page 23
    ... arising from long-term installment sales contracts is recognized using the level yield method. Valuation of Marketable Securities Marketable securities are recorded at purchase price plus incidental costs. However, if the fair value of marketable securities differs from the book value determined by...

  • Page 24
    ... in value is recorded in capital adjustments. Equity securities held for investment that are in companies in which the Company is able to exercise significant influence over the operating and financial policies of the investees are accounted for using the equity method, except investment equity...

  • Page 25
    ... in 2001. Stock Options The Company computes total compensation expense to stock options, which are granted to employees and directors, by fair value method using the option-pricing model. The compensation expense has been accounted for as a charge to current operations and a credit to capital...

  • Page 26
    ... borrowings. The book value of those pledged marketable securities amounts to 9,749 million ($7,352 thousand) as of December 31, 2001. Korean won (In millions) U.S. dollars (Note2)(in thousands) Companies Kia Motors America, Inc. Kia Japan Co., Ltd. Yan Ji Kia Motors A/S(*) Kia Canada, Inc. Cheju...

  • Page 27
    ... 31, 2001. Marketable equity securities as of December 31, 2000 consist of the following: Korean won (In millions) U.S. dollars (Note2)(in thousands) Companies Hyundai MOBIS Kia Steel Co., Ltd. LG. Telecom. Co., Ltd. Kanglim Co., Ltd. Stock Market Stabilization Fund Acquisition cost Book value 79...

  • Page 28
    ... 23,353 17,610 Debt securities as of December 31, 2000 consist of the following: Korean won (In millions) U.S. dollars (Note2)(in thousands) Companies Corporate bonds: Kia Steel Co., Ltd. Seoul Guarantee Insurance Company Acquisition cost Present Value Discount Book value Ownership 32,698 16...

  • Page 29
    ...), respectively, and consist of bank loans with annual interest rate of 0.89 to 8.60 percent in 2001. These borrowings are secured by certain bank deposits, investment securities and property, plant and equipment (see Notes 4 and 6). 2001 Industrial property rights Development costs 18,314 158,569...

  • Page 30
    ...964,208 207,551 1,314,952 (522) Korea Development Bank Korea Asset Management Corporation. Kyobo Life Insurance Co. Cho Hung Bank Hanvit Bank SG ABS Ltd. Korea Development Leasing Corp. Shinhan Bank Hanaro Finance Seoul Guarantee Insurance Company Others Other loans 1,638,933 1,743,066 1,235,905...

  • Page 31
    ...(3) The Company uses a customer financing system related to a long-term installment sales system and has provided guarantees of 202,641 million ($152,810 thousand) to the banks concerned as of December 31, 2001. These guarantees are all covered by insurance contracts, which specifies a customer and...

  • Page 32
    ..., arising mainly from acquisition for the stock retirement purposes as discussed in Note 12 and cross-holdings of investment equity securities due to mergers, and has recorded, in capital adjustments, treasury stock at book value as of those dates, respectively. (2) Stock options The Company granted...

  • Page 33
    ...(55,197) 52,196 (47,663) 29,416 The difference between income before tax in financial accounting and taxable income pursuant to Corporate Income Tax Law of Korea is as follows: Korean won (In millions) U.S. dollars (Note 2) (in thousands) The accumulated temporary differences of 1,594,592 million...

  • Page 34
    ... related balances as of December 31, 2000 are summarized below: Korean won (In millions) U.S. dollars (Note 2) (in thousands) Description Hyundai Motor Company Hyundai MOBIS Hyundai Hysco Co., Ltd. Hyundai Capital Services, Inc. Hyundai Powertek Co., Ltd. Korea D.T.S Co., Ltd. WIA Corporation TRW...

  • Page 35
    ...COMPUTATION OF VALUE ADDED: The accounts and amounts needed for calculation of value added are as follows: Korean won (In millions) U.S. dollars (Note 2) (in thousands) Warranty Provision for doubtful accounts Miscellaneous 2001 Ordinary income Labor costs Interest expense, net Rent Taxes and dues...

  • Page 36
    Kia M otors' M ajor Export Lineup K i a M o t o r s a n n u a l r e p o r t 2001 â- Sorento â- Optima Regal â- Sportage â- Optima / Magentis â- Spectra / Sephia II â- Carnival / Sedona â- Carens â- Rio

  • Page 37
    ...Bongo coach van 2000 1999 1974 1975 1980 1981 1983 �Export ed Sephia and Sport age t o Canada �Approved merger of Kia's f ive af f iliat es �Embarked on a global sales campaign in 70 count ries under t he slogan Y2K �St art ed product ion of t he Pride in China �Produced t he Rio compact...