Kia 2015 Annual Report Download

Download and view the complete annual report

Please find the complete 2015 Kia annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 128

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128

Annual Report 2015

Table of contents

  • Page 1
    Annual Report 2015

  • Page 2
    2015 was a dynamic year for Kia Motors as we added new milestones to our ever-evolving history of success in the global automobile market. In this annual report, we will share the stories behind our achievements in 2015 that are shaping the future of the automotive industry.

  • Page 3
    ...Mexico Plant 2015 New Models 28-39 Our Strength 30 34 36 38 Design Management Branding Marketing Global Quality Management 40-52 Our Future 42 44 48 50 52 Corporate Social Responsibility Research & Development Special Issue - Kia at CES 2016 Global R&D Network Concept Cars 53-115 Financial Review...

  • Page 4
    ChAiRmAn's messAge We will expand our rapidly rising position in the global automobile market based on our spirit of passion and willingness to take on the challenges of the future. 04 | KIA MOTORS

  • Page 5
    ..., top quality new vehicles. With Kia Motors' new plant in Mexico scheduled to begin full operations in the first half of this year, we are poised to further strengthen communication and cooperation across the organization to ensure the efficient operation of our global production and sales systems...

  • Page 6
    ... business environment, we achieved a number of records last year, including a global sales mark of 3.05 million units, as we fought hard both in developed markets and at home in Korea, while our performance was also helped by a rise in RV sales. 2015 was the second consecutive year we have sold...

  • Page 7
    ...in the Central and South America market which will be buoyed by the start of mass production at our new plant in Mexico. 2016 will also see an expansion in our line-up of eco-friendly cars, including Niro, Optima (K5) PHEV, and all-new K7 HEV. Hyoung-Keun Lee Vice Chairman & CEO AnnuAl RePORT 2015...

  • Page 8
    2015 highlights Business highlights 2015 2014 2013 2012 2011 (Unit: thousand vehicles) Global Retail Sales Total Korea Overseas 2,915 527 2,388 2,907 465 2,442 2,746 458 2,289 2,709 481 2,228 2,478 492 1,986 Sales by Region Korea U.s. China europe* Rest of World * Europe: EU and EFTA countries (...

  • Page 9
    Financial highlights 2015 2014 2013 2012 2011 (Unit: KRW million) Consolidated Statement of Financial Position* Total Assets Cash Items (Liquidity) Current Assets Total Liabilities Short-term Debt Current Liabilities Long-term Debt Total Debt Net Debt Total Stockholders' Equity Total Liabilities & ...

  • Page 10
    ... sponsored the 2015 Australian Open Page 37 Held 'Surprise Weekend,' a Kia brand experience event JANUARY FEBRUARY MARCH APRIL MAY JUNE Sorento received iF Product Design Award in Transportation Design category* Page 32 Sedona (Carnival) and Sorento received the top safety rating from the...

  • Page 11
    ... NOVEMBER DECEMBER Cumulative sales by Kia Motors Russia exceeded one million units Ranked 74th in Best Global Brands 2015 by Interbrand* Page 34 Kia Motors ranked number one in a quality survey by Auto Bild* Page 39 Mexico plant commenced pilot production Page 24~25 AnnuAl RePORT 2015 | 11

  • Page 12
    ...Europe (KME) 1998 Jan. Launched Carnival (Sedona), Korea's first 10 million units 2003 Mar. Launched Amanti (Opirus) full size sedan Cumulative U.S. sales exceeded 1 million units May Opened Namyang R&D Center, an integrated minivan 1998 Dec. Hyundai Motor Company and global automobile research...

  • Page 13
    ... and Kia Design Center America Aug. Launched Forte compact sedan Sep. Launched Soul urban crossover Nov. Named 'Car Company of the Year' by Autocar (UK) Received Platinum award at the LACP Vision Awards for 'MOVE' 2014 sustainability report Ranked 1st in China Sales Satisfaction Index (SSI...

  • Page 14
    ... We promote a customer-driven corporate culture by providing the best quality and impeccable service with all values centered on our customers. Lifetime Partner in Automobiles and Beyond Providing a new space that makes life more convenient and enjoyable by realizing superlative mobility based...

  • Page 15
    ... brand strategies - Exploit new business opportunities Achieving operational excellence to strengthen our core - Optimize global production/SCM - Improve quality management in response to market changes and customer needs - Bolster product development competitiveness - Strengthen sales and service...

  • Page 16

  • Page 17
    ... Performance Despite a challenging business environment, Kia Motors grew strongly in 2015 thanks to our endless pursuit of innovation. Our record-breaking performance in the domestic market and outstanding results in overseas markets will drive us to achieve even stronger growth in the year ahead.

  • Page 18
    Global Retail Sales (Unit: thousand vehicles) 2,915 gloBAl 2,746 2013 2015 2,907 2014 Retail sales increase in Korea 13.4% We're setting our sights high as a globally integrated company operating in a globally connected world.

  • Page 19
    Global Plant Sales (Unit: thousand vehicles) 3,050 2015 loCAl 3,041 2,827 2013 2014 year-on-year sales increase of slovakia plant 4.5% And yet we are truly local. We make the most of our distinctive combination of broad global knowledge and deep local expertise.

  • Page 20
    ... first time we have sold more than 500,000 vehicles in a year. We will continue our strong growth in the domestic automotive market through continuous innovation. Domestic Sales (Domestic Market Share) (Unit: thousand vehicles) 2015 2014 2013 527 (28.7%) 465 458 (28.0%) (29.8%) 18 | KIA MOTORS

  • Page 21
    ... by overseas car brands in 2015, Kia Motors sold 526,600 vehicles in Korea for an increase of 13.4% over the previous year. This was the first time our annual domestic sales exceeded 500,000 units, and was the result of steady sales of RVs, such as the Carnival (Grand Carnival/Sedona) and Sorento...

  • Page 22
    ...-track strategy is the foundation for our continued growth and the means by which we will become a leading global automotive company. Overseas Sales* (Overseas Market Share ) (Unit: thousand vehicles) 2015 2014 2013 2,523 (2.7%) 2,576 (2.9%) 2,369 (2.9%) *Ex-factory sales basis 20 | KIA MOTORS

  • Page 23
    ... increased sales of high value-added models, the release of new vehicles, and strong sales of RVs. The Sportage, including both new and previous models, led our performance with 370,193 units sold, followed by the Rio (Pride) with 466,000 units, and the Cerato (K3/Forte) with 358,000 units. Sales of...

  • Page 24
    ...will expand financial promotions. In the Central and South America region, we will maximize the potential generated through the start of mass production at our Mexico plant in the first half of 2016. 2015 Best-selling Models* *Including sales in Korea Rio (pride) 473,557 units sportage 452,834...

  • Page 25
    ... the world at the end of 2015, and is selling well. We plan to release new vehicles across different regions, including the all-new Cadenza (K7) and the dedicated eco-friendly Niro, which is planned for release in the first half of 2016. These new products will boost global sales and help improve...

  • Page 26
    speCiAl issUe KiA mexiCo plAnt Kia Motors Manufacturing Georgia Kia Mexico Plant Geographic coverage of first wave of Kia dealers 24 | KIA MOTORS

  • Page 27
    ...its cutting-edge production technology will enable it to manufacture one vehicle every 53 seconds. It will produce more than 300,000 units annually and account for around 10% of Kia Motors' global production, beginning with the production of 105,000 units of the Forte (K3) in 2016. Mexico has a Free...

  • Page 28
    2015 neW moDels For automakers, new vehicles are the fruits of innovation and the drivers of growth. By unleashing new models through continuous innovation, Kia Motors both promotes continued growth and offers distinctive value to our customers. Redefining the sUV The all-new Sportage sets new ...

  • Page 29
    ... quality and marketability. Its excellence was further proven by being named the winner of its segment in the 2015 China Automobile Customer Satisfaction Index. The KX3 is expected to serve as a strategic model that will further enhance Kia Motors' brand image in China. AnnuAl RePORT 2015...

  • Page 30

  • Page 31
    ... and creativity are the driving forces that have enabled our dynamic growth. We will continue to pursue innovation and creativity through 'A Different Beat' that only Kia can play, as we strive to provide new driving pleasure to our customers and achieve new engines for growth.

  • Page 32
    UniqUe innovative Design All-new Sorento and Soul EV are winners of the 2015 Red Dot Design Award. The Sorento also received the 2015 iF Product Design Award, once again proving our competitiveness in design.

  • Page 33
    th UniVeRsAl Best global Brand Kia Motors ranked in 74th position on Interbrand's list of Best Global Brands 2015 for two years in a row. Our brand value has continued to rise and recorded USD 5.7 billion in 2015.

  • Page 34
    ... Red Dot Design Award in the automobile category in 2011, as well as the iF Design Award and Good Design Award. The thirdgeneration Sportage, Sorento, K900/Quoris (K9), Picanto (Morning), and Rio (Pride) have also received multiple awards and achieved high sales. Our commitment to 30 | KIA MOTORS

  • Page 35
    ... interior designs, digital modeling using advanced computing tools, and development of new colors. The Namyang Design Center focuses on developing the world's best design capabilities based on a seamless system of cooperation between Kia Motors' global design studios in the US, Europe, China...

  • Page 36
    ...Sedona/Grand Carnival (Carnival) was chosen as one of the best 10 interiors in the world for 2015 by Ward's Auto, an automobile consulting company in the U.S., thanks to its unique interior design and excellent use of space. In addition, the all-new Sorento and Soul EV received awards in the product...

  • Page 37
    ... Design Category Soul - Honorable Mention at the 2009 Red Dot Design Awards in Product Design Category - Best of the Best at the 2009 Best Interior Award by Ward's Auto World 2008 Kia Motors - Presidential Award at the 2008 Korea Design Awards in Design Management Category AnnuAl RePORT 2015...

  • Page 38
    ... children. These items are sold through our online shop at https://eshop.kia.com, and we plan to add to the range of items available. Best Global Brands 2015 one oF the Best gloBAl BRAnDs in 2015 Kia Motors communicates its global management, design management, and social responsibility management...

  • Page 39
    ...meet 'A DiFFeRent BeAt ' Kia Motors communicates with customers through diverse channels to deliver a full Kia experience, so that customers can see us as more than just a company that manufactures and sells automobiles. We implement 'sensory branding' initiatives as part of this effort, encouraging...

  • Page 40
    mARKeting Kia Motors looks at cars as being a part of people's lives, rather than just a means of transportation. We communicate with our customers to share our vision as a brand that delivers new value and a strong sense of affinity. 36 | KIA MOTORS

  • Page 41
    ... the Republic of Korea and the Massachusetts Institute of Technology (MIT) 'D-Lab'. Meanwhile, the 'UNESCO Kids Overseas Camp' enables elementary school students to experience and learn about overseas international organizations. Launched in 2013, the camp is sponsored by Kia Motors and organized by...

  • Page 42
    ... across the company to ensure that our products offer the best in quality. In 2010, Kia Motors began its customer-oriented global quality management drive to satisfy customer expectations by pursuing failure-free vehicles. Under the Drive Defects to Zero (DDTZ) campaign, we have strengthened new car...

  • Page 43
    ... Motors will not be complacent when it comes to quality, even after winning so many positive reviews and awards. Instead, we will listen even more closely to customer opinions, and communicate with them continually in our efforts to offer products with unsurpassed levels of quality. AnnuAl RePORT...

  • Page 44

  • Page 45
    Our Future Our research and development in the future of mobility, our commitment to green mobility and our sense of responsibility as a corporate citizen are the driving forces that propel us toward sustainable growth in partnership with all our stakeholders.

  • Page 46
    Opening up a new future full of love and hope by providing mobility to more people and by turning challenges into opportunities moRe our corporate social responsibility (CsR) commitment to offer "A Better Way to go" represents our determination to pursue CsR for a better future.

  • Page 47
    less On the road to emission-free and accident-free driving, so that we can offer more driving pleasure with a smaller ecological footprint our 'ecoDynamics' brand is not just a name, it is our promise of a brighter tomorrow and a greener environment.

  • Page 48
    CoRpoRAte soCiAl ResponsiBility Kia Motors aims to contribute to society through various activities based on sincerity and a spirit of challenge. We want to create a better world that brings happiness to all by discovering "A Better Way to Go". 42 | KIA MOTORS

  • Page 49
    ... Challenge are five GLP schools, one GLP health care center, and two GLP car maintenance training centers in eight local communities in five countries. In 2015, 24 Kia Motors employees stayed for 10 days in Salima and Lilongwe, Malawi as part of GLP, instead of taking a summer vacation. They...

  • Page 50
    ... eco-friendly car line-up by 2020. This will enable us to respond to the changing automobile market, and build a foundation for sustainable growth. Investment in R&D (Unit: KRW billion) 2015 2014 2013 niro Planned for release in the first half of 2016, the Niro is the first small SUV in Korea...

  • Page 51
    ...using a quick charger. The Soul EV's 81.4 kW motor enables it to reach 100 km/h in no more than 11.2 seconds, and it features outstanding power performance, with a maximum speed of 145 km/h and maximum torque of around 285 Nm. Ray eV The Ray EV is an eco-friendly electric vehicle that has no direct...

  • Page 52
    ... with objects such as smart devices, or making a connection between a car and other cars or infrastructure by recognizing spoken words, thus resulting in substantially improved recognition and control. The all-new Cadenza (K7) features many cutting-edge driver assistance technologies that support...

  • Page 53
    ...park their vehicles by using sensors and controlling the steering wheel. This convenient assistance function supports both perpendicular parking and parallel parking. It is available in models such as the Cerato (K3), Optima (K5), Cadenza (K7), Rondo (Carens), and Sorento. AnnuAl RePORT 2015 | 47

  • Page 54
    ...January in Las Vegas, Nevada. It is one of the world's top three IT shows. Participants include household electric appliance, automobile, IT, and even fashion companies from all across the globe, coming together to show their innovative, cutting-edge technologies and new products. 48 | KIA MOTORS

  • Page 55
    ...? RoADmAp FoR FUtURe moBility Kia Motors participated in the 2016 International Consumer electronics Show (CeS) held at the las Vegas Convention Center in January 2016 where we featured our vision of cutting-edge autonomous driving technologies. We unveiled a new sub-brand called 'DRIVe WiSe...

  • Page 56
    ... Design Center europe Situated within Kia Motors' European headquarters, the Kia Design Center Europe is boosting Kia's design capabilities in Europe. Superior Township, Michigan, U.S. Technical Center Irvine, California, U.S. Design & Remodeling Studio, Painting Facilities, New Model Presentation...

  • Page 57
    ... Company and Kia Motors Corp. in China. Japan R&D Center Located close to Tokyo, the Japan R&D Center focuses on developing the latest electronic and hybrid technologies. Yokohama, Japan Technical and Design Center Hyundai Kia Motors R&D Center Hwaseong, Gyeonggi-do 3,470,000 m2 Engineering Design...

  • Page 58
    ...X-Cars were first unveiled at the 2015 and 2016 Australian Open, respectively, by Rafael Nadal, Kia Motors' global brand ambassador. The vehicles were on display at Melbourne Park throughout the Australian Open championship and drew a hugely positive response from fans around the world. 52 | KIA...

  • Page 59
    Financial Review

  • Page 60
    ... consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used...

  • Page 61
    ...sale financial assets Long-term accounts and notes receivable - trade Investments in associates and joint ventures Property, plant and equipment, net Investment property, net Intangible assets, net Guarantee deposits Deferred tax assets Other non-current assets Total non-current assets Total assets...

  • Page 62
    ...won) Note 2015 2014 Liabilities Accounts and notes payable - trade Short-term borrowings Accounts and notes payable - other Advances received Accrued expenses Income taxes payable Current portion of long-term debt and bonds Provisions - current Other current liabilities Total current liabilities...

  • Page 63
    KIA MOTORS CORPORATION AND SUBSIDIARIES ConsoliDAteD stAtements oF inCome For the years ended December 31, 2015 and 2014 (In millions of won, except earnings per share information) Note 2015 2014 Sales Cost of sales Gross profit Selling expenses General and administrative expenses Operating ...

  • Page 64
    KIA MOTORS CORPORATION AND SUBSIDIARIES ConsoliDAteD stAtements oF CompRehensiVe inCome For the years ended December 31, 2015 and 2014 (In millions of won) 2015 2014 Profit Other comprehensive income (loss) (net of tax): Items that will never be reclassified subsequently to profit or loss: ...

  • Page 65
    KIA MOTORS CORPORATION AND SUBSIDIARIES ConsoliDAteD stAtements oF ChAnges in eqUity For the years ended December 31, 2015 and 2014 (In millions of won) Attributable to owners of Parent Company Accumulated other comprehensive income (loss) Common stock Capital surplus Retained earnings Other...

  • Page 66
    ... difference Total comprehensive income (net of tax) Transactions with owners and other, recognized directly in equity: Dividends Acquisition of treasury shares Total transactions with owners and other, recognized directly in equity: Balance at December 31, 2015 â,© 2,139,317 1,560,650 18,815...

  • Page 67
    KIA MOTORS CORPORATION AND SUBSIDIARIES ConsoliDAteD stAtements oF CAsh FloWs For the years ended December 31, 2015 and 2014 (In millions of won) Note 2015 2014 Cash ï¬,ows from operating activities Cash generated from operations Interest received Interest paid Dividends received Income tax ...

  • Page 68
    ... description of the Company Kia Motors Corporation (the "Parent Company"), one of the leading motor vehicle manufacturers in Korea, was established in December 1944 under the laws of the Republic of Korea to manufacture and sell a range of passenger cars, recreational vehicles and other commercial...

  • Page 69
    ... intra-group transaction) as of and for the years ended December 31, 2015 and 2014 are summarized as follows: (i) Financial information as of and for the year ended December 31, 2015 (In millions of won) Company Total assets Total liabilities Sales Net income(loss) KMA KMMG KMS KMR â,© 6,522...

  • Page 70
    ...FinAnCiAl stAtements December 31, 2015 and 2014 (d) Use of estimates and judgments The preparation of the consolidated financial statements in conformity with K-IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported...

  • Page 71
    ... by the acquirer to former owners of the acquiree and the equity interests issued by the acquirer. However, any portion of the acquirer's share-based payment awards exchanged for awards held by the acquiree's employees that is included in consideration transferred in the business combination shall...

  • Page 72
    KIA MOTORS CORPORATION AND SUBSIDIARIES notes to the ConsoliDAteD FinAnCiAl stAtements December 31, 2015 and 2014 (c) Associates and joint ventures An associate is an entity in which the Company has significant inï¬,uence, but not control, over the entity's financial and operating policies. ...

  • Page 73
    ... transaction costs that are directly attributable to the asset's acquisition or issuance. Financial assets at fair value through profit or loss A financial asset is classified as financial assets are classified at fair value through profit or loss if it is held for trading or is designated as...

  • Page 74
    ... initial designation of the hedge, the Company formally documents the relationship between the hedging instrument(s) and hedged item(s), including the risk management objectives and strategy in undertaking the hedge transaction, together with the methods that will be used to assess the effectiveness...

  • Page 75
    ... of the costs of dismantling and removing the item and restoring the site on which it is located. Subsequent to initial recognition, an item of property, plant and equipment is carried at its cost less any accumulated depreciation and any accumulated impairment losses. AnnuAl RePORT 2015 | 69

  • Page 76
    ... lives (years) Industrial property rights Software Development costs Country club membership and golf club membership Other (*) Capitalized development costs are amortized over the useful life considering the life cycle of the developed products. 5, 10 2~5 (*) Indefinite 25 70 | KIA MOTORS

  • Page 77
    ... continue to support indefinite useful life assessments for those assets. Changes are accounted for as changes in accounting estimates. Research and development Expenditures on research activities, undertaken with the prospect of gaining new scientific or technical knowledge and understanding...

  • Page 78
    KIA MOTORS CORPORATION AND SUBSIDIARIES notes to the ConsoliDAteD FinAnCiAl stAtements December 31, 2015 and 2014 The depreciable amount of a leased asset is allocated to each accounting period during the period of expected use on a systematic basis consistent with the depreciation policy the ...

  • Page 79
    ...fit sharing retirement plan and defined benefit pension plan under the Internal Revenue Code 401(k) in the United States. KMA and employees of KMA paid each contributions during the period in which the employees render the related service. (s) Provisions Provisions are recognized when the Company...

  • Page 80
    ... in equity. (w) Revenue Revenue from sale of goods or the use by others of the Company assets is measured at the fair value of the consideration received or receivable, net of returns, trade discounts, volume rebates and cash incentives to the customers. Revenue from sales of vehicles, service parts...

  • Page 81
    ... to a business combination, or items recognized directly in equity or in other comprehensive income. Current tax Current tax is the expected tax payable or receivable on the taxable profit or loss for the year, using tax rates enacted or substantively enacted at the end of the reporting period and...

  • Page 82
    ... revenue amounts by products and services are not disclosed. (a) The following tables provide information of sales by geographic locations based on the location of customers and non-current assets as of and for the year ended December 31, 2015: (In millions of won) Domestic North America Europe...

  • Page 83
    ... of sales by geographic locations based on the location of customers and non-current assets as of and for the year ended December 31, 2014: (In millions of won) Domestic North America Europe Other region Consolidation adjustment Consolidation amount External sales Property, plant and...

  • Page 84
    ... 31, 2015 and 2014 7. Available-for-sale Financial Assets (a) Available-for-sale financial assets as of December 31, 2015 and 2014 are summarized as follows: (In millions of won) Company Percentage of ownership Acquisition Cost 2015 2014 Marketable securities Hyundai WIA Corporation Hyundai...

  • Page 85
    ...inï¬,uence on the financial and operating policy decisions. (*2) In 2015, Hyundai Hysco Co., Ltd. merged into Hyundai Steel Company. Upon the merger, the Company received 0.855761 shares of Hyundai Steel Company's common stock in exchange for each shares of Hyundai Hysco Co., Ltd's common stock. As...

  • Page 86
    ... MOTORS CORPORATION AND SUBSIDIARIES notes to the ConsoliDAteD FinAnCiAl stAtements December 31, 2015 and 2014 (*4) In 2015, the Company's ownership decreased due to disproportionate capital increase. (*5) The Company classified Dongfeng Yueda Kia motors Co., Ltd. and Hyundai Capital Services UK...

  • Page 87
    ... method for investment in associates of Kia Tigers Co., Ltd. due to the carrying amount of the Company's share being reduced to zero as of December 31, 2015. (d) Changes in investment in associates and joint ventures for the year ended December 31, 2014 are summarized as follows: (In millions of...

  • Page 88
    KIA MOTORS CORPORATION AND SUBSIDIARIES notes to the ConsoliDAteD FinAnCiAl stAtements December 31, 2015 and 2014 (e) Financial information of associates and joint ventures as of and for the year ended December 31, 2015 is summarized as follows: (In millions of won) Company Total assets Total ...

  • Page 89
    ...) Company Cash and cash equivalents Financial liabilities Depreciation Interest income Interest expense Income tax expense Dongfeng Yueda Kia Motors Co., Ltd. Hyundai Capital Services UK Ltd. â,© 174,172 54,121 397,899 1,745,604 155,926 - 17,595 - 14,801 - 248,030 6,545 AnnuAl RePORT...

  • Page 90
    KIA MOTORS CORPORATION AND SUBSIDIARIES notes to the ConsoliDAteD FinAnCiAl stAtements December 31, 2015 and 2014 (g) Financial information of significant associates and joint ventures reconciled from the proportionate share in investees' net assets to the balance in the Company's consolidated ...

  • Page 91
    ...of December 31, 2015, KMS has a purchase commitment for plant expansion in connection of which, KMS acquired property, plant, and equipment amounting EUR 9,379 thousand. (e) The capitalized borrowing costs and capitalization interest rate for the years ended December 31, 2015 and 2014 are summarized...

  • Page 92
    KIA MOTORS CORPORATION AND SUBSIDIARIES notes to the ConsoliDAteD FinAnCiAl stAtements December 31, 2015 and 2014 10. investment property (a) Details of investment property as of December 31, 2015 and 2014 are summarized as follows: (In millions of won) 2015 Accumulated depreciation and ...

  • Page 93
    ...CGU as its value in use calculated by discounting the future cash ï¬,ows to be generated on the basis of business plan approved by CEO in five years. Cash ï¬,ows expected to be generated after five years were estimated within the scope of not to exceed long term average growth rate of industry. No...

  • Page 94
    ... 1,851,597 (d) Details of research and development expenditures for the years ended December 31, 2015 and 2014 are summarized as follows: (In millions of won) 2015 2014 Capitalized development costs Test expenses (manufacturing costs) Test expenses (selling and administrative expenses) â,© 663...

  • Page 95
    ...2015 Investment in associates (*) â,© 161,274 (*) According to the Company's plans to dispose of its shares of Hyundai Steel Company amounted to W 337,020 million in the future, the Company classified the shares as non-current assets held for sale from investments in associates during the year...

  • Page 96
    KIA MOTORS CORPORATION AND SUBSIDIARIES notes to the ConsoliDAteD FinAnCiAl stAtements December 31, 2015 and 2014 Long-term debt in foreign currency as of December 31, 2015 and 2014 are summarized as follows, (In millions of won) Lender Annual interest rate 2015 2014 General loans Facility ...

  • Page 97
    ... income Dividends payable Guarantee received Finance lease liabilities - current Current derivatives liability Others â,© Other non-current liabilities: Leasehold deposits received Long-term unearned income Long-term accounts and notes payable - other Liability for payment guarantee Finance lease...

  • Page 98
    ...: 2015 2014 Discount rate Rate of future salary growth 3.04% 4.00% 3.53% 5.00% (e) Changes in present value of defined benefit obligations for the years ended December 31, 2015 and 2014 are summarized as follows: (In millions of won) 2015 2014 Balance at January 1 Current service costs...

  • Page 99
    ...(c) The Company provides guarantees for employees relating to borrowings to acquire shares of the Parent Company. The outstanding amount for which the Company has provided collective guarantees to the Korea Securities Finance Corporation is W 293,444 million as of December 31, 2015. Management is of...

  • Page 100
    ... be reliably estimated. (e) In connection with long-term debt guaranteed, amounting to USD 66,667 thousand, by Hyundai Motor America, Inc. and Mobis America, Inc., Kia Motors Manufacturing Georgia, Inc. (KMMG) should pay guarantor fees calculated at a rate of 0.15% per annum on the outstanding debt...

  • Page 101
    ... Changes in retained earnings for the years ended December 31, 2015 and 2014 are summarized as follows: (In millions of won) 2015 2014 Balance at January 1 Profit attributable to owners of the Company Dividends Defined benefit plan remeasurements Change in remeasurements of associates Balance...

  • Page 102
    ... to owners of the Company Dividend payout ratio â,© 441,025 2,630,600 16.77% 404,058 2,993,593 13.50% (c) Dividend yield ratio for the years ended December 31, 2015 and 2014 are summarized as follows: (In won, except for ratio) 2015 2014 Dividend per share Market price as of year end Dividend...

  • Page 103
    ...Retirement and severance benefits cost Accrual for other long-term employee benefits Other employee benefits Travel Communications Utilities Taxes and dues Rent Depreciation Amortization Bad debt expenses Repairs and maintenance Insurance premium Entertainment expense Maintenance fee for vehicles...

  • Page 104
    ...the years ended December 31, 2015 and 2014 are summarized as follows: (In millions of won) 2015 2014 Rent Foreign exchange transaction gain Foreign exchange translation gain Gain on sale of property, plant and equipment Gain on sale of intangible assets Reversal of allowance for doubtful accounts...

  • Page 105
    ...the years ended December 31, 2015 and 2014 are summarized as follows: (In millions of won) 2015 2014 Foreign exchange transaction loss Foreign exchange translation loss Loss on disposal of accounts and notes receivable - trade Donation Loss on sale of property, plant and equipment Loss on sale of...

  • Page 106
    KIA MOTORS CORPORATION AND SUBSIDIARIES notes to the ConsoliDAteD FinAnCiAl stAtements December 31, 2015 and 2014 (c) Reconciliation of effective tax rate for the years ended December 31, 2015 and 2014 are as follows: (In millions of won) 2015 2014 Profit before income taxes Income tax using ...

  • Page 107
    ... years ended December 31, 2015 and 2014 are summarized as follows: (In millions of won) 2015 2014 Changes in inventories Raw material and merchandise consumed Employee benefits Other employee benefits Depreciation and amortization Overseas marketing and export expenses Sales promotion Warranty...

  • Page 108
    ...for the year Adjustments for: Retirement and severance benefits Depreciation Amortization Warranty expenses Income tax expense Gain on investment in associates, net Interest expenses(income) Dividends income Losses(gains) on foreign currency translations Losses(gains) on sale of property, plant and...

  • Page 109
    ... investing and financing activities for the year ended December 31, 2015 and 2014 are as follows: (In millions of won) 2015 2014 Change in accounts and notes receivable - other in connection to disposal of property, plant and equipment Change in accounts and notes payable - other in connection...

  • Page 110
    KIA MOTORS CORPORATION AND SUBSIDIARIES notes to the ConsoliDAteD FinAnCiAl stAtements December 31, 2015 and 2014 (d) Management of capital risk The fundamental goal of capital management is to maintain on financial structure. As for this to be maintained, the Company use debt ratio as indicator ...

  • Page 111
    ... 31, 2015 are summarized as follows: (In millions of won) Within 1 year 1~5 years Over 5 years Total Accounts and notes payable - trade Accounts and notes payable - other Accrued expenses Bonds Borrowings Financial lease liabilities Other current liabilities Other non-current liabilities...

  • Page 112
    ...FinAnCiAl stAtements December 31, 2015 and 2014 (ii) Aggregate maturities of the Company's financial liabilities, including estimated interest, as of December 31, 2014 are summarized as follows: (In millions of won) Within 1 year 1~5 years Over 5 years Total Accounts and notes payable - trade...

  • Page 113
    ...-term available-for-sale financial assets Long-term available-for-sale financial assets â,© Financial derivatives assets: Currency option (risk hedge) Liabilities recognized by amortized cost: Accounts and notes payable - trade Accounts and notes payable - other Bonds Borrowings Financial lease...

  • Page 114
    ... 31, 2015 and 2014 The Company measured the fair value of financial instruments as follows The฀fair฀value฀of฀available-for-sale฀financial฀assets฀traded฀within฀the฀market฀is฀measured฀at฀the฀closing฀bid฀price฀quoted฀at฀the฀end฀of฀the฀ reporting period...

  • Page 115
    ... unobservable input Bonds and borrowings â,© 6,309,099 DCF model Discount rate considering credit risk Discount rate considering credit risk (f ) Income and expense by financial instruments category for the years ended December 31, 2015 and 2014 are summarized as follows: (In millions of won...

  • Page 116
    KIA MOTORS CORPORATION AND SUBSIDIARIES notes to the ConsoliDAteD FinAnCiAl stAtements December 31, 2015 and 2014 (g) Offsetting financial assets and financial liabilities (i) Financial assets subject to offsetting, enforceable master netting arrangements and similar agreements as of December 31...

  • Page 117
    ...096 660,950 1,932,500 22,419,982 Other related Hyundai WIA Corporation companies Hyundai Glovis Co., Ltd. Hyundai Capital Services Inc. Hyundai Motor America Hyundai Motor Manufacturing Czech s.r.o. Hyundai Auto Canada Corp. Hyundai Motor Manufacturing Alabama,LLC Other AnnuAl RePORT 2015 | 111

  • Page 118
    ...,304 624,109 19,086 2,109,224 21,225,182 Other related Hyundai Glovis Co., Ltd. companies Hyundai WIA Corporation Hyundai Capital Services Inc. Hyundai Motor America Hyundai Motor Manufacturing Czech s.r.o. Hyundai Motor Manufacturing Alabama,LLC Hyundai Auto Canada Corp. Other 112 | KIA MOTORS

  • Page 119
    .... Hyundai Engineering Co., Ltd. Hyundai Steel Company Mobis Alabama, LLC Mobis Slovakia s.r.o. Hyundai Motor Manufacturing Russia LLC Hyundai Motor Group China Ltd. Powertech America, Inc. Mobis Parts America, LLC Dongfeng Yueda Kia Motors Co., Ltd. Sewon America, Inc. Other Hyundai WIA Corporation...

  • Page 120
    KIA MOTORS CORPORATION AND SUBSIDIARIES notes to the ConsoliDAteD FinAnCiAl stAtements December 31, 2015 and 2014 (ii) Account balances with related companies as of December 31, 2014 are summarized as follows (In millions of won) Receivables Relation Company Trade Other Total Trade Payables ...

  • Page 121
    ... to be submitted for approval on March 18, 2016, at the general meeting of stockholders. 35. subsequent event On January 5, 2016, the Company acquired 19,960,795 common shares (20.1%) of Hyundai Capital services INC from IGE USA Investment for â,© 607,088 million. AnnuAl RePORT 2015 | 115

  • Page 122
    ...ciency. 6. Rio (pride) With an urban style, this compact car features a comfortable interior and outstanding safety. It has been a success in Europe, the home of the automobile. 2. Cadenza (K7) This large sedan features specifications usually found in full-size sedans such as a charismatic design...

  • Page 123
    ..., and customerfocused specifications 13. picanto (morning) The Picanto (Morning) is Kia's ï¬,agship city car. With its unique design, it offers excellent value, high fuel efficiency, and outstanding safety. 14. niro 9. sedona/grand Carnival (Carnival) This premium family-oriented minivan sports...

  • Page 124
    gloBAl netWoRK 26 20 19 25 16 33 18 11 21 23 28 24 15 13 14 22 38 17 31 32 37 1 30 27 3 2 12 7 8 118 | KIA MOTORS

  • Page 125
    ... (KMIe) 21 Kia Austria (KMAs) 22 Kia Motors Hungary (KMH) 23 Kia Motors Czech (KMCz) 24 Kia Motors Sales Slovensko (KMSS) 25 Regional H.Q. / Eastern Europe & CIS 26 Kia Motors Russia (KMRus) overseas Design Centers 37 Kia Design Center America 38 Kia Design Center Europe AnnuAl RePORT 2015 | 119

  • Page 126
    ...฀of฀Hyundai฀Motor฀Company •฀ (Former)฀President฀of฀Kia฀Motors฀Corp. Sang-Gu nam •฀ Currently,฀Chair-Professor฀of฀Business฀Administration฀at฀Gachon฀University •฀ (Former)฀Private฀Sector฀Chairperson฀of฀the฀Financial฀Services฀Commission...

  • Page 127
    moRe inFoRmAtion More information on Kia Motors is available at our websites. kia.com | pr.kia.com

  • Page 128
    Kia motors Corporation 12 Heolleung-ro, Seocho-gu, Seoul, 137-938, Korea