Hyundai 2003 Annual Report Download - page 52

Hyundai Motor Company Annual Report 2003 _102101_Hyundai Motor Company Annual Report 2003
HYUNDAI MOTOR COMPANY AND SUBSIDIARIES HYUNDAI MOTOR COMPANY AND SUBSIDIARIES
24. COMMITMENTS AND CONTINGENCIES
(1)The Company and its consolidated subsidiaries are contingently liable for guarantees of indebtedness of
other companies including subsidiaries as of December 31, 2003 as follows:
(2) As of December 31, 2003, the outstanding balance of accounts receivable discounted with recourse and transferred by
the Company and its subsidiaries amounts to 254,829 million ($212,748 thousand) except for short-term borrowings of
2,664,964 million ($2,224,882 thousand) resulting from elimination of significant balances related to the transactions
between the subsidiaries.
(3) The Company and its subsidiaries have used a customer financing system related to a long-term installment sales system
and have provided guarantees to related banks amounting to 233,893 million ($195,269 thousand) as of December 31,
2003. These guarantees are all covered by insurance contracts, which specify the customer and the Company and its
subsidiaries as contractor and beneficiary, respectively.
(4) The Company accrues estimated product liabilities expenses and carries the products and completed operations liability
insurance (see Note 8) in order to cover the potential loss, which may occur due to the lawsuits related to its operation such
as product liabilities. The Company expects that the resolution of cases pending against the Company as of December 31,
2003 will not have any material effect on its financial position.
Kia, a domestic subsidiary, is a defendant pertaining to its claim in the in-court reorganization proceeding, the lawsuits related
to its operation such as product liabilities, lawsuits for compensation of losses or damages. Kia also has a pending lawsuit in a
Brazilian court pertaining to the disputes with the Brazilian Government and the Brazilian shareholders of Asia Motors Do Brasil
S.A. (AMB), which was established as a joint venture by Asia Motors with a Brazilian investor. Also, in 2002, Kia brought the
case to the International Court of Arbitration to settle the disputes. Kia, a stockholder of AMB, had already written off its
investment of 14,057 million ($11,736 thousand) and estimates that the above matter does not and will not affect its financial
statements at this time. The outcome of the creditors’ claims in relation to Kia’s denial of their claims in the in-court
reorganization proceedings is not currently determinable.
Company providing Beneficiary Companies Korean won U.S. dollars (Note 2)
guarantee of indebtedness (in millions) (in thousands)
Hyundai Motor Company Hyundai Merchant Marine 375,209 $313,248
Hyundai Motor Finance Company 215,604 180,000
Hyundai Translead 142,538 119,000
Hyundai Motor India 117,580 98,163
Hyundia Assan Otomotiv Sanayi Ve
Ticaret Anonim Sirketi 116,499 97,261
Hyundai Motor Japan Co. 30,229 25,237
Hyundai Motor America 135,191 112,866
Hyundai Motor Poland Sp.Zo.O 12,771 10,662
Hyundai Motor Europe GmbH 82,639 68,992
Hyundai Motor Manufacturing Alabama LLC 479,120 400,000
Hyundai Machine Tool Europe Gmbh 1,198 1,000
HMJR&D 1,120 935
Equus Cayman Finance Ltd. 479,120 400,000
Other domestic 987 824
2,189,805 $1,828,189
Dymos Inc. Wia Corporation 121,020 101,035
WIA Corporation Dymos Inc. 8,868 7,404
Hyundai HYSCO Hyundai Pipe of America, Inc. 11,978 10,000
Bejing Hyundai Hysco Steel
Process Co., Ltd. 24,009 20,444
Hyundai-Huy Hoang Pipe
Company Limited 1,021 852
166,896 $139,335