Annual Report...2 Hyundai Annual Report 2005 The Hyundai Elevator Company was established in 1984....

www.hyundaielevator.co.kr

Annual Report 2005

HEAD OFFICE & FACTORYSan 136-1, Ami- ri, Bubal- eup, Ichon-shi, Kyonggi-do 467-734, Korea Tel : 82-31-644-5160 Fax: 82-2-745-4227Homesite : http://www.hyundaielevator.co.krE-mail : [email protected]

SEOUL OFFICE(INT’L SALES DIV.)1-83 Dongsoong- dong, Jongro-ku, Seoul 110-510, KoreaTel: 82-2-3670-0659 Fax : 82-2-3672-8763~4

U.S.A.Hyundai Elevator Co., Ltd.LA Office879W. 190th St. Suite 580 Gardena, CA 90248 U.S.A.Tel: 1-310-538-4770 Fax: 1-310-538-4745

JAPANHyundai Elevator Co., Ltd. 11F, Yamato Life Bldg. 1-1-7, Uchisaiwai-cho, Chiyoda-ku, Tokyo, 100-0011, JapanTel: 81-3-3519-6125 Fax: 81-3-3519-6126

PHILIPPINESHyco Industrial Sales Corp. #81 Kapiligan Cor. Bayani St., Dona lmelda, Quezon City, PhilippinesTel: 63-2-716-0905/0923 Fax: 63-2-714-8896

INDONESIAPT. Superhelindo Jaya JL. KH. Moch. Mansyur No 19B, Jakarta 10140, IndonesiaTel: 62-21-631-8444 Fax: 62-21-632-6288

THAILANDLoxley Public Co., Ltd.Construction Materials Department102 Na Ranong Rd, Klongtoey, Bangkok 10110, ThailandTel: 66-2-348-8000 Fax: 66-2-240-3127/3128

BANGLADESHRegional Traders Ltd.Karim Chamber(3rd Floor)99, Motijheel Commercial Area Dhaka-1000, BangladeshTel: 880-2-956-3122 Fax: 880-2-956-7377

INDIAKinetic Escalator & Elevator Ltd.G-92, D-ⅢBlock, Midc, Chinchwad, Pune-411.019 IndiaTel: 91-20-3950-2190~1 Fax: 91-20-2747-0568

PAKISTANIslamabad Industrial & Trading Corp.304 Amber Estate Shahra-e-faisal, Karachi - 75350, PakistanTel: 92-21-452-3237~8 Fax: 92-21-454-7405

EGYPTInternational Eng. & Trade10 El Hakam St., Helmeyt Ei Zayton Cairo, EgyptTel: 20-2-241-8542 Fax: 20-2-639-2672

U.A.E.Arabian Elevators & Engineering Co.,Ltd.P. O. Box : 26031, Sharjah, U.A.E. Tel: 971-6-561-4533 Fax: 971-6-561-5532

KUWAITDeal General Trading & Contracting Co.P. O. Box 27956 Safat, 13140 KuwaitTel: 965-245-7925 Fax: 965-242-3510

JORDANBseiso Engineering Materials Corp.P. O. Box 830681 Amman 11183, JordanTel: 962-656-99012 Fax: 962-656-99014

IRANMehfakhr Flat No. 84 8th Flr. No. 23 Corner of 13th St. Asadabadi Ave. Tehran IranTel: 98-21-872-6082 Fax: 98-21-855-3741

SAUDI ARABIAM/S. Electromechanical & Technical Associates.,P. O. Box 6591, Jeddah-21452, Saudi ArabiaTel: 966-2-652-9000 Fax: 966-2-652-9090

CHINA•China Operation Head Office

Hyundai Elevator Co., Ltd.27F, Jinxuan Bldg., No.238 Nandan RD.(East), Shanghai, China, 200030 Tel: 86-21-6427-6616 Fax: 86-21-6427-4428

•Beijing OfficeHyundai Elevator Co., Ltd. Beijing OfficeGolden Land Bldg. Rm517&518 No.32 Liang Ma Bridge Road, Chaoyang District Beijing, 100016, ChinaTel: 86-10-6464-3483/3509 Fax: 86-10-6464-3394

Shenyang Hyundai Elevator Co., Ltd.No. 43 Shenda Road, Yuhong District, Shenyang, China, Post Code : 110141Tel: 86-24-2530-0108 Fax: 86-24-2583-2321

Shanghai Hyundai Elevator Manufacturing Co., Ltd.•Head Office(Factory)

Xiaozheng Qingpu Xian, Shanghai, China 201716Tel: 86-21-5981-3981/3990/3961/3971 Fax: 86-21-5981-3982

•Shanghai Office27F, Jinxuan Bldg., No.238 Nandan Rd(East), Shanghai, China, 200030 Tel: 86-21-6427-6616 Fax: 86-21-6427-4428

HYUNDAI ELEVATOR INTERNATIONAL SALES & SERVICE NETWORK

HYUNDAI ELEVATOR CO., LTD.

2 Hyundai Annual Report 2005

The Hyundai Elevator Company was established in 1984. However, its short history must not be taken lightly. Today, HyundaiElevator provides a full line of moving systems meticulous in detail,bringing together some of the most advanced technology andprogressive designs in the industry.

By working in close cooperation with international partners anddeveloping in-house technology, Hyundai Elevator has become a majorsupplier of elegant passenger elevators and escalators in Korea as wellas in Southeast Asia, the U.S.A., Japan and Europe.In order to meet the rise in demand, the production capacity has beenincreased to handle 7,200 elevators and 600 escalators per annum.Other major products include machine-room-less elevators, marineelevators, platform screen doors, and a variety of multi-level parkingand material handling systems.

Hyundai Elevator continues its every effort to develop the mostadvanced and comprehensive moving systems in the world.

Elegant Design & Advanced Technology

Hyundai Annual Report 2005

3Hyundai Annual Report 2005

Financial Highlights

Sales

Operating Income

Net Income

Total Assets

Stockholders’ Equity

Earnings Per ShareDividend Per Share ￦400 (8%)

￦473,019,017

56,293,278

83,948,120

561,609,044

330,891,935

13 4

Thousand ofKorean Won

Note : Amounts in Korean won have been translated into U.S. dollars, solely for the reader’s convenience. The exchange ratesused for conversion were 1,02424 and 1,14531 per U.S. dollar in 2005 and 2004 respectively, which were the averageexchange rates of the Bank of Korea on those years.

U.S. DollarsThousand ofKorean Won

U.S. Dollars

＄461,824,394

54,961,023

81,961,377

554,401,820

326,645,543

13 1

￦440,884,972

35,301,675

83,940,845

407,914,902

225,817,653

12 8

＄384,948,156

30,822,813

73,290,938

390,797,952

216,341,879

112

2005 2004

’03 ’04 ’05

473440

358

Total Sales In Billions of Won


Dear Shareholders:

I would like to take this opportunity to outline the overall corporate

achievements made by Hyundai Elevator Co., Ltd. during 2005 and

present the business plan for 2006.

Last year, we experienced a difficult business environment a sluggish

construction sector caused by public measures to curb the overheated

real estate market, high oil prices and increased material costs. We did our best to cope with low

growth in the domestic elevator sector by increasing our focus on non-elevator sectors such as

platform screen doors for subway system, automated material handling systems and the growing

export market.

Total revenue for 2005 was ￦473 billion while net income was ￦83.9 billion. The financial status is

healthy with a 70% debt ratio and 59% net equity ratio.

We expect 2006 to be a year of greater challenges. The foreign exchange rate is forecasted to be

less stable as Korean Won has become stronger against the US Dollar since the beginning of the

year with the exchange rate falling to as low as 960 won per dollar. The Government will likely

continue to try to cool off the volatile real estate market and prospects for the construction sector do

not seem bright. Crude oil price may rise as high as US$70 per barrel with the Iranian nuclear

standoff being a major destabilizing factor and other material costs are likely to follow suit.

Still, our target for 2006 annual revenue is set to be ￦528 billion - a 12% increase from previous year.

We will continue our effort to strengthen our competitiveness and to increase customers’ satisfaction.

Company staff will remain united to this common cause. No one will be left behind in our endeavor for

renovation and we will establish our own unique service system to better serve the customers’ needs.

Our key words for 2006 are “all participating renovation” and “customer satisfaction”.

Message from the President


Last year we adopted “Total solutions for Movement” as our corporate slogan, which emphasized

our strategy to transform ourselves into a total solutions corporation which creates the best

efficiency in movement. “Total solutions for Movement” symbolizes our willingness to vigorously

expand into non-elevator sectors and consolidate the corporate wealth and well-being. We will do

our best to better serve the interests of shareholders as well as public in general.

Thank you.

Sincerely yours,

Y. M. Choi

President & Representative Director


Independent Auditor’s Report

To the Stockholders and Board of Directors of Hyundai Elevator Co., Ltd.

We have audited the accompanying balance sheet of Hyundai Elevator Co., Ltd. (“the Company”) as ofDecember 31, 2005 and December 31, 2004 and the related statements of income, statements ofappropriations of retained earnings, and cash flows for the year then ended, all expressed in Koreanwon. These financial statements are the responsibility of the Company’s management. Ourresponsibility is to express an opinion on these financial statements based on our audit. We did not auditthe financial statements of Hyundai Merchant Marine Co., Ltd., a subsidiary of the Company, whichstatements reflect total assets constituting 45.2% and 38.4% of consolidated total assets as ofDecember 31, 2005 and December 31, 2004 respectively. The financial statements of Hyundai MerchantMarine Co., Ltd. were audited by the other auditors (KPMG Samjong Accounting) whose report has beenfurnished to us, and our opinion, insofar as it relates to the amounts included for Hyundai MerchantMarine Co., Ltd., is based solely on the report of such other auditors.

We conducted our audit in accordance with auditing standards generally accepted in the Republic ofKorea. Those standards require that we plan and perform the audit to obtain reasonable assuranceabout whether the financial statements are free of material misstatements. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures in the financialstatements. An audit also includes assessing the accounting principles used and significant estimatesmade by management, as well as evaluating the overall financial statements presentation. We believethat our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, thefinancial positions of Hyundai Elevator Co., Ltd. as of December 31, 2005 and December 31, 2004 and theresults of its operations, statements of appropriations of retained earnings and cash flows for the yearthen ended in conformity with accounting principles generally accepted in the Republic of Korea.

This report is effective as of February 10, 2006, the auditors' report date. Certain subsequent events orcircumstances may have occurred between this audit report date and the time the audit report is read.Such events or circumstances could significantly affect the accompanying financial statements and mayresult in modifications to the auditors' report.

AnjinA member firm of Deloitte Touche Tohmatsu14F Hanwha Securities Co. bldg. #23-5Yoido-dong, Youngdeungpo-ku,Seoul 150-717, Korea

Seung-woo, YangCountry Managing Partner & Certified Public Accountant Feb. 10, 2006


Description

1. Sales

2. Cost of sales

3. Gross profit

4. Selling and general

administrative expenses

5. Operating income

6. Non-operating income

7. Non-operating losses

8. Ordinary income

9. Extraordinary income

10. Extraordinary losses

11. Income before income taxes

12. Income tax expenses

13. Net income

￦473,019,017

391,530,263

81,488,754

25,195,476

56,293,278

70,809,285

9,326,544

117,776,020

-

-

117,776,020

33,827,899

￦83,948,120

Thousand ofKorean Won

Note : Amounts in Korean won have been translated into U.S. dollars, solely for the reader’s convenience. The exchangerates used for conversion were 1,02424 and 1,14531 per U.S. dollar in 2005 and 2004 respectively, which were theaverage exchange rates of the Bank of Korea on those years.

U.S. Dollars

＄461,824,394

382,264,180

79,560,214

24,599,191

54,961,023

69,133,489

9,105,819

114,988,694

-

-

114,988,694

33,027,317

＄81,961,377

2005

Statements of Income

Thousand ofKorean Won U.S. Dollars

￦440,884,972

377,994,038

62,890,934

27,589,258

35,301,675

89,900,577

8,485,828

116,716,425

-

-

116,716,425

32,775,580

￦83,940,845

＄384,948,156

330,036,443

54,911,713

24,088,900

30,822,813

78,494,536

7,409,198

101,908,151

-

-

101,908,151

28,617,213

＄73,290,938

2004

(Years ended December 31, 2005 and 2004)


Description

Assets

Ⅰ. Current assets 1. Quick assets2. Inventories

(Total current assets)Ⅱ. Non-current assets

1. Investments2. Tangible assets3. Intangible assets

(Total non-current assets)

Total Assets

Liabilities

Ⅰ. Current liabilitiesⅡ. Long-term liabilities

(Total liabilities)

Stockholders’ equity

Ⅰ. Capital stockⅡ. Capital surplusⅢ. Retained earningsⅣ. Capital adjustment

(Total stockholders’ equity)

Total liabilities &stockholders’ equity

￦201,909,6927,283,335

209,193,028

303,038,20149,358,134

19,681352,416,016

561,609,044

137,198,37093,518,739

230,717,109

35,662,56569,557,145

265,465,01139,792,786

330,891,935

￦561,609,044

＄199,318,5517,189,867

206,508,418

299,149,26148,724,713

19,428347,893,402

554,401,820

135,437,68092,318,597

227,756,277

35,204,90168,664,506

262,058,25339,282,118

326,645,543

＄554,401,820


2005

＄142,837,2728,915,696

151,752,968

192,564,72046,455,458

24,806239,044,984

390,797,952

124,150,12850,305,945

174,456,073

34,166,09066,638,384

142,834,18427,296,779

216,341,879

＄390,797,952

￦149,093,5449,306,204

158,399,748

200,999,05548,490,207

25,892249,515,154

407,914,902

129,587,90452,509,345

182,097,249

35,662,56569,557,145

149,090,32128,492,378

225,817,653

￦407,914,902


2004

Balance Sheets

(December 31, 2005 and 2004)

Note : Amounts in Korean won have been translated into U.S. dollars, solely for the reader’s convenience. The exchangerates used for conversion were 1,013 and 1,0438 per U.S. dollar in 2005 and 2004 respectively, which were theexchange rates of the Bank of Korea on December 31, 2005 and 2004.


Description

Ⅰ. Retained earningsbefore appropriations

1. Unappropriated retained earningscarried over from prior years

2. Net income3. Retained earnings adjustment on

valuation of actual value method(Sub total)

Ⅱ. Transfers from voluntaryreserves

1. Reserve for technical development2. Reserve for loss from export

(Sub total)

Total

Ⅲ. Appropriations of retainedearnings

1. Legal reserve2. Dividends

Cash dividend - Dividend ratio(2005) 8%

3. Reserve for technical development4. Reserve for loss on disposal of treasury

stock5.Reserve for business expansion

(Sub total)

Ⅳ. Unappropriated retained earningsto be carried over forwardto subsequent year

￦74,213,691

83,948,12035,894,966

194,056,777

3,247,703-

3,247,703

197,304,480

251,0002,502,822

3,000,000-

-5,753,822

￦191,550,658

＄73,261,294

82,870,80035,434,320

191,566,414

3,206,025-

3,206,025

194,772,438

247,7792,470,703

2,961,500-

-5,679,982

＄189,092,456

￦811,797

83,940,845-

84,752,642

3,879,445-

3,879,445

88,632,087

350,0003,468,397

3,000,0007,600,000

-14,418,397

￦74,213,690


2005

＄777,732

80,418,514-

81,196,246

3,716,656-

3,716,656

84,912,902

335,3133,322,856

2,874,1147,281,088

-13,813,371

＄71,099,531


2004

Statements of Appropriations of Retained Earnings

(Years ended December 31, 2005 and 2004)

Note : Amounts in Korean won have been translated into U.S. dollars, solely for the reader’s convenience. The exchangerates used for conversion were 1,013 and 1,0438 per U.S. dollar in 2005 and 2004 respectively, which were theexchange rates of the Bank of Korea on December 31, 2005 and 2004.


Organization

Quality & Environment Dept.Production Dept.Production Management Dept.

R & D CenterDesign Engineering Dept.

Auditor’s Committee Internal Auditing Dept. Notes1. C.E.O. (Chief Executive Officer)2. C.F.O. (Chief Finance Officer)3. means Member of the Board

Domestic Sales Dept. ⅠDomestic Sales Dept. ⅡPSD(Platform Screen Doors) Dept.Pusan OfficeTaegu OfficeKwangju OfficeTaejun OfficeJunju OfficeUlsan OfficeKangwon OfficeInchon OfficeMachang OfficeCheju Office

Board of Directors

General Meeting of Shareholders

C.E.O.

Managing Director

Installation Dept.Customer Service Dept.Financial Dept.Accounting Dept.Purchasing Dept.Management Coordination Dept.Public Relations Dept.

Executive Vice President

(C.F.O)


Overseas Sales Dept.Material Handling System Dept.

ShanghaiShenyangPhilippines

U.S.A. JapanU.A.E.




Elevators EscalatorsMoving WalksMaterial Handling SystemsAuto Parking SystemsPlatform Screen Doors

A. Main Products

B. Capital Structure

C. Brief Company History

Company Profile

Authorized Capital : Won 100,000,000,000Paid-in Capital : Won 35,662,565,000

D. Corporate Information

1. Date of Establishment : May 23, 19842. Head Office : San 136-1, Ami-ri, Bubal-eup, lchon-shi, Kyunggi-do 467-734, Korea3. TEL : 82-2-3670-06604. Fiscal Year End : December 31st.5. Number of Employees : 1,1646. The Total Number of Outstanding Capital Stocks

Par value : ￦ 5,000Authorized Number of Shares : 7,132,513 shares

7. Total Assets ; ￦ 561,609,044 (In thousands) , U.S. ＄554,401,820

May 1984 Hyundai Elevator Co., Ltd. established. Technical License Agreement signed by Hyundai and Westinghouse to manufacture

various kinds of elevators and escalators.

Sep 1989 Termination of joint venture with Westinghouse

Dec 1991 Certificated ISO 9001 certification from DNV

Aug 1993 Established joint venture in Shanghai, China

Nov 1995 Established joint venture in Shenyang, China

Jul 1996 Listed on the Korea Stock Exchange

Dec 1996 Certificated After Service Certification from the Ministry of Trade and Commerce

Apr 1997 Certificated ISO 14001 environmental certification from DNV

Mar 1998 Certificated ISO 9001 and ISO 14001 certification from DNV for the Auto Parking Systems and Material Handling Systems.

Aug 1999 Certificated CE Mark from DNV

Oct 1999 Signed a contract for a technology alliance with Japan’s Nabco for PSD(Platform Screen Doors)

May 2001 Signed a contract for installation and maintenance alliance in Japan with Nihon Shokouki Co.,Ltd. for marine elevators.

Jul 2001 Certificated CE mark for elevators from DNV

Sep 2003 Certificated Korea Productivity Award from Korea Productivity Center

Dec 2004 Certificated ISO 9001 and ISO 14001 Certification from DNV for Platform Screen Doors

Feb 2005 Selected one of the most admired companies from the Federation of Korean Industries and the Seoul Economic Daily

Hyundai Elevator Ichon Factory

Annual Report...2 Hyundai Annual Report 2005 The Hyundai Elevator Company was established in 1984....

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