Kia 2002 Annual Report Download

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2002
ANNUAL
REPORT
231, Yangjae-Dong, Seocho-Gu,
Seoul, 137-938, Korea
TEL : 82-2-3464-1114
http : // www.kia.co.kr
http : // www.kmcir.com
2002 ANNUAL REPORT KIA MOTORS CORPORATION
PANTONE219-5 : 은별 / DIC443 : 은
For Environmental protection,
this catalog can be recycled

Table of contents

  • Page 1
    PANTONE219-5 : 은별 / DIC443 : 은 2002 ANNUAL REPORT KIA MOTORS CORPORATION 2 0 0 2 ANNUAL REPORT 231, Yangjae-Dong, Seocho-Gu, Seoul, 137-938, Korea TEL : 82-2-3464-1114 http : // www.kia.co.kr http : // www.kmcir.com For Environmental protection, this catalog can be recycled

  • Page 2

  • Page 3
    ... bolstered by concerted efforts to develop a leading service brand, expand markets and maximize customer satisfaction. Kia's brand image w as significantly raised both in Korea and overseas in 2002, thanks in large part to the immensely popular Sorento SUV. 2003 w itnesses the launch of the Opirus...

  • Page 4
    ...is earning increasing respect on the global stage, gaining the trust of customers worldwide. Kia M otors, the first Korean automobile manufacturer, is developing into a vibrant new force on the global stage. The historic driving force behind the Korean automotive industry, Kia is now reaching out to...

  • Page 5
    ... upgrading and expanding our production facilities both in Korea and overseas, most recently with the Kia Dongfeng Yueda-Kia plant in Yencheng, China in 2002 with a capacity of 50,000 units per year. Kia is competing head to head with the world's best in terms of quality, technology and price...

  • Page 6
    ... around the world and has elevated the Kia brand image as a whole. In Korea, our innovative Q-service brand, introduced last year as part of our ongoing efforts to improve customer satisfaction, resulted in Kia being recognized as the number one company for customer service in our home market. The...

  • Page 7
    Kia's product offering is setting new standards in quality and value Kia vehicles received a slew of aw ards around the w orld in 2002 for quality, safety and value. The Kia brand has never before been so w idely recognized. With the emphasis on service and quality before quantitative grow th, Kia ...

  • Page 8
    ...means to promote family unity. This campaign was repeated in 2002, continuing efforts to enhance Kia's brand image. Special tours of the Kwangju plant were also offered to major commercial vehicle customers to expand Kia's corporate reputation. Product competitiveness in the passenger car market was...

  • Page 9
    ... enabling the company to better adapt to new EU regulations and European market preferences. Stronger service support formed the basis of a campaign to raise customer satisfaction and the Skills World Cup competition was held for the first time bringing the top Kia technicians to Korea from around...

  • Page 10
    ... begin immediately after customized orders are received. An online operations management system and an after-sales production control system were developed to monitor production line status in real time. The supply of parts to after-sales service centers was also computerized to speed up the supply...

  • Page 11
    ... KIA MO TO RS AN N UAL REPO RT Research & Development 18 19 A long-time innovator in the Korean market, Kia is constantly developing new technologies to improve global quality. 2002 saw Kia's R&D Division rise to new challenges. Company engineers developed the Sorento, a high-value mid-sized SUV...

  • Page 12
    ... Car Clinic in a network that covers the entire country, and the parts supply system has been improved to save time. The rating system for subcontracted maintenance and repair shops has been tightened, and technicians receive training from Kia to ensure customers only get the best quality service...

  • Page 13
    Kia is taking its place on the global sporting scene Kia is now involved in w orld-class sporting events including the Australian Open and Winter Universiade. Investment is ongoing to promote a full range of sporting activities around the w orld.

  • Page 14
    ...'s Tennis Park on January 15, 2003 to announce that Kia and Tennis Australia officials had concluded a main sponsorship contract for the next five years. Kia officials calculate their sponsorship of the 2002 Australian Open generated publicity w orth US$219 million. The results from the 2003 event...

  • Page 15
    ...is becoming an increasingly respected player in the global automotive industry Kia M otors plans to be a top five global automaker by 2010. It's a big dream, but Kia has alw ays dreamed big. It's an enormous challenge, but Kia has alw ays risen to a challenge. It's an ambitious goal, but it's a goal...

  • Page 16
    ... in Automotive Service Quality In 2002, Kia Motors focused on training people, expanding the overseas network and ensuring quality consistency. 2002 w as a very eventful year for Kia M otors. New product launches, global aw areness initiatives and major developments in key markets not only helped...

  • Page 17
    ... and represents a major breakthrough for Kia in the China market. Kia's new Q-Service brand was officially launched at 20 direct-run car service centers as well as authorized after-sales service centers and Car Clinic shops around Korea. A new compensation program for dissatisfied customers was also...

  • Page 18
    ... youth training facilities. 24. Real estate leasing and sale. 25. Production and sale of information equipment. 26. M arine shipping. 27. Insurance proxy and broker. 28. E-commerce and online-related businesses. 29. Businesses incidental to those listed above. 5. Corporate Stock 1) Number of shares...

  • Page 19
    ... Transport and rental Production facilities Communication and computer systems, office furniture Required Funds 3,613 76,807 124,058 14,648 130,631 33,971 Funding Source Internal Cash Flow Land Buildings, structures M achinery Vehicles M ain Product Categories Units 2002 Passenger car RV Van...

  • Page 20
    ... 330,704 Net income 7. M AJOR SHAREHOLDERS (shares) 2. Assets Summarized Balance Sheet (millions of Won) Name Hyundai M otor Hyundai Capital Woori Bank Shares Held 134,285,491 36,180,000 47,477,485 Equity Share(% ) 36.32 9.79 12.84 Business Ties w ith Kia Automobile production on commission...

  • Page 21
    ... audit, and we received reports from the directors when deemed necessary. We also carefully examined documents related to all major operational activities. Name Korea Development Bank Kyobo Life Insurance Bankers Trust Company SG ABS Korea Development Leasing Corporation Credit Outstanding 178,994...

  • Page 22
    ... a Report Originally Issued in Korean To the Shareholders and Board of Directors of Kia Motors Corporation: As explained in Note 2, the Company adopted Statement of Korea Accounting Standards (SKAS) No. 6 - Events Occurring after the Balance Sheet Date and SKAS No. 7 - Capitalization of Financing...

  • Page 23
    ...) Translation into U.S. dollars(Note 2) (in thousands) ASSETS Current assets: Cash and cash equivalents Short-term financial instruments M arketable securities (Note 4) Trade notes and accounts receivable, net of unamortized present value discount of in 2002 and for doubtful accounts of 238,079...

  • Page 24
    ..., net Foreign exchange gain (loss), net Reversal of allowance for doubtful accounts Loss on valuation of inventories Gain on valuation of investments securities accounted for using the equity method (Note 4) Loss on disposal of accounts receivable Gain on disposal of marketable securities, net Gain...

  • Page 25
    ... Loss on disposal of property, plant and equipment, net Amortization of present value discount, net Other extraordinary income Compensation expenses on stock options Changes in operating assets and liabilities: Decrease (Increase) in trade notes and accounts receivable Decrease (Increase) in long...

  • Page 26
    ... statement, the Company elected to adopt the accounting method of charging all financing costs to current operations by using the prospective approach. Revenue Recognition Revenue, including long-term installment sales, is recognized at the time of shipping motor vehicles and parts. The interest...

  • Page 27
    ... stock funds and the fair value of treasury stock included in a fund is accounted for as treasury stock in capital adjustments. The Company generally provides the ultimate consumer a warranty for each product sold and accrues warranty expense at the time of sale based on actual claims history...

  • Page 28
    ...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 adjustment from the grant date using the straight-line method. effect) and net income, respectively, by the weighted average number of common shares...

  • Page 29
    ... Equity securities accounted for using the equity method as of December 31, 2002 consist of the following: Korean won (in millions) U.S. dollars(Note 2) (in thousands) Kia M otors Deutschland GmbH Kia Japan Co., Ltd. Kia Tigers Co., Ltd. Kia Canada, Inc. Hyundai Powertek Co., Ltd. WIA Corporation...

  • Page 30
    ...book value of these investments is zero and the net equity value has not been recovered as of December 31, 2002. The cumulative losses not recognized by the Company due to suspension of the valuation of investment using the equity method as of December 31, 2002 and 2001 consist of follow ing: Korean...

  • Page 31
    ... loans (see Notes 9 Acquisition cost Corporate bonds: Kia Steel Co., Ltd. Seoul Guarantee Insurance Company 32,698 16,200 Present value discount 18,253 7,292 Book value Book value 14,445 8,908 12,033 7,422 respectively, as of December 31, 2002 and 2001, in terms of land prices officially...

  • Page 32
    ...assets as of December 31, 2002 and 2001 consist of the following: Korean won (in millions) U.S. dollars(Note 2) (in thousands) 260 th 261 st 262 nd 2002 Long-term deposits Long-term trade notes and accounts receivable, net of unamortized present value discount of in 2002 and Other Lease and rental...

  • Page 33
    ... long-term debt as of December 31, 2002 are as follows: 2002 Reorganization claims: Korea Development Bank Korea Asset M anagement Corporation. Kyobo Life Insurance Co. Chohung Bank Woori Bank SG ABS Ltd. Korea Development Leasing Corp. Shinhan Bank Hanaro Finance Seoul Guarantee Insurance Company...

  • Page 34
    ... of the Korean Commercial Code, the Company concluded the stock retirement covering 80 million treasury shares, which had been 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...

  • Page 35
    ... 517,704 (296,392) 236,354 (65,109) 392,557 (392,557) Common shares, net of treasury shares The computation of the proposed dividends for 2002 is as follows: Number of Shares Dividend rate Korean won (in millions) U.S. dollars(Note 2) (in thousands) 18. DIVIDENDS 368,121,297 5% 92,030 76,666...

  • Page 36
    ... balances as of December 31, 2001 are summarized below: Korean won (in millions) U.S. dollars(Note 2) (in thousands) Description Hyundai M otor Company Hyundai M OBIS Co., Ltd. Hyundai Hysco Co., Ltd. Hyundai Capital Services, Inc. Hyundai Powertek Co., Ltd. Hyundai Dymos Co., Ltd. WIA Corporation...

  • Page 37
    ...INISTRATIVE EXPENSES Selling and administrative expenses are as follows: Korean won (in millions) U.S. dollars(Note 2) (in thousands) 2002 Salaries and wages Sales promotion Travel Communications Utilities Taxes and dues Rent Depreciation and amortization Repairs and maintenance Advertising Freight...

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  • Page 39
    ...First Skill World Cup Competition held ∙Regal mid-size sedan marketed ∙Company awarded 2002 Value Management Award ∙Upgraded compact sedan Rio SF marketed ∙Subsidiary companies established in 5 European countries ∙Company awarded Grand Prize in Korea Service Quality Award ∙Sorento begins...