Kia 2010 Annual Report Download - page 49

Notes to Consolidated
Financial Statements
December 31, 2010 and 2009
2010 2009
Foreign Won Foreign Won
In millions of won and in thousands of foreign currency currency equivalent currency equivalent
Guarantee deposits USD 137 156 12,738 14,873
EUR 191 288 - -
Others - 11 - 977
Long term loans Others - 4,695 - 4,983
￦ 4,243,309 ￦ 3,567,405
LIABILITIES
Accounts and notes payable - trade USD 385,579 ￦ 439,136 415,479 ￦ 485,113
EUR 583,008 882,440 792,987 1,327,683
Others - 627,792 - 1,107,150
Accounts and notes payable - other USD 759,393 864,872 652,208 761,518
EUR 56,565 85,616 162,013 271,254
Others - 434,047 - 258,802
Accrued expenses USD 35,059 39,928 1,130 1,320
EUR 86,706 131,239 16,667 27,905
Others - 308,147 - 389,897
Short-term borrowings USD 144,691 164,789 1,167,101 1,362,708
EUR 465,256 704,212 1,160,837 1,943,567
Others - 53,182 - 427,075
Debentures (including current portion) USD 300,000 341,670 300,000 350,280
EUR - - 300,000 502,284
Long-term debt (including current portion) USD 682,226 776,987 770,006 899,059
EUR 524,125 793,315 699,615 1,171,351
Others - 181,451 - 56,071
Capital lease liabilities EUR 1,366 2,068 1,770 2,963
Long-term non-trade payables USD 1,800 2,050 - -
￦ 6,832,941 ￦ 11,346,000
In millions of won 2010 2009
NET BALANCE AT BEGINNING OF YEAR ￦ 743,831 857,025
Provision 776,245 376,070
Payment (431,475) (457,279)
Other changes(*) 95,945 (31,985)
1,184,546 743,831
Less current portion of provision for warranties (396,999) (187,048)
NET BALANCE AT END OF YEAR W 787,547 556,783
21. Provision for Warranties
Changes in provision for warranties for the years ended December 31, 2010 and 2009 are summarized as follows:
22. Commitments and Contingencies
(a) The Company provides guarantees for certain customers’ financing relating to long-term installment sales. The oustanding amount for which
the Company has provided guarantees to the respective financial institutions is ￦14,541 million as of December 31, 2010. However, these
guarantees are covered by insurance contracts in which the Company is the beneficiary of the claim amount if the customer defaults.
(b) As of December 31, 2010, five blank promissory notes have been provided as collateral to Standard Chartered First Bank Korea Ltd. and
others for the Company’s debts.
(c) The Company is involved in 38 lawsuits. Claims for alleged damages, which arose in the ordinary course of business, total ￦91,784 million
as of December 31, 2010. No provision is recorded as of December 31, 2010. Management is of the opinion that the foregoing lawsuits and
claims will not have a material adverse effect on the Company’s financial position, operating results or cash flows.
(d) Kia Motors Manufacturing Georgia, Inc. (KMMG) entered into agreements with a construction companies amounting to USD 618 thousand
for the construction as of December 31, 2010. In connection with long-term debt guaranteed by Hyundai Motor Company and Mobis
America, Inc., guarantor fees are calculated at a rate of 0.15% per annum on the outstanding debt balance of KMMG and paid biannually.
(e) On October 1, 2008, Kia Motors Manufacturing Georgia, Inc. (KMMG) entered into an agreement with the West Point Development
Authority the (“Authority”) to issue up to USD 1,100,000 thousand of taxable revenue bonds for a term through December 1, 2022, to fund
the purchase of building, machinery and equipment. As of December 31, 2010, approximately USD 854,506 thousand of taxable revenue
bonds have been issued and sold to KMA for these purchases.
(*) Foreign currency translation adjustment
98 COMPONENTS OF SUSTAINABLE GROWTH 99
KIA MOTORS ANNUAL REPORT 2010