How To Calculate Financial Position Of Korean Motor Company

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1 SSANGYONG MOTOR COMPANY AND ITS SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS AS OF MARCH 31, 2015, AND DECEMBER 31, 2014, AND FOR THE THREE MONTHS ENDED MARCH 31, 2015 AND 2014 ATTACHMENT: INDEPENDENT ACCOUNTANTS REVIEW REPORT

2 Deloitte Anjin LLC 9F., One IFC, 10, Gukjegeumyung-ro Youngdeungpo-gu, Seoul , Korea Tel: +82 (2) Fax: +82 (2) Independent Accountants Review Report English Translation of Independent Accountants Review Report Originally Issued in Korean on May 15, 2015 To the Shareholders and Board of Directors of Ssangyong Motor Company: We have reviewed the accompanying consolidated interim financial statements of Ssangyong Motor Company (the Company ). The financial statements consist of the consolidated statements of financial position as of, and December 31, 2014, and the related consolidated statements of comprehensive income, consolidated statements of changes in shareholders equity and consolidated statements of cash flows, for the three months and 2014, and a summary of significant accounting policies and other explanatory information. Management s responsibility for the consolidated financial statements The Group s management is responsible for the preparation and fair presentation of the accompanying consolidated interim financial statements and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Independent accountants responsibility Our responsibility is to express a conclusion on the accompanying consolidated interim financial statements based on our review. We conducted our review in accordance with standards for review of consolidated interim financial statements in the Republic of Korea. A review is limited primarily to inquiries of company personnel and analytical procedures applied to financial data, and this provides less assurance than an audit. We have not performed an audit and, accordingly, we do not express an audit opinion. Review conclusion Based on our review, nothing has come to our attention that causes us to believe that the accompanying consolidated interim financial statements of the Company are not presented fairly, in all material respects, in accordance with Korean International Financial Reporting Standards (K-IFRS) 1034 Interim Financial Reporting Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee ( DTTL ), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as Deloitte Global ) does not provide services to clients. Please see t for a more detailed description of DTTL and its member firms. Member of Deloitte Touche Tohmatsu Limited

3 Other matters We have given an opinion on the comparative consolidated statement of financial position as of December 31, 2014, and the related consolidated statements of operations, retained earnings, and cash flows on March 9, 2015, as fairly state. There is no difference in terms of importance between comparative purposed consolidated financial position on December 31, 2014, and current financial position. May 15, 2015 Notice to Readers This report is effective as of May 15, 2015, the accountants review report date. Certain subsequent events or circumstances may have occurred between the accountant s review report date and the time the accountants review report is read. Such events or circumstances could significantly affect the consolidated financial statements and may result in modifications to the accountants review report.

4 SSANGYONG MOTOR COMPANY AND ITS SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL POSITION AS OF MARCH 31, 2015, AND DECEMBER 31, 2014 ASSETS Korean won March 31, December 31, (In thousands) Indian rupee March 31, December 31, (In thousands) CURRENT ASSETS: Cash and cash equivalents (Notes 4, 5 and 33) 185,950, ,765,307 Rs. 10,506,182 Rs. 8,857,240 Trade and other receivables, net (Notes 7, 32 and 33) 172,861, ,759,654 9,766,672 9,986,920 Derivative assets (Notes 25 and 33) 1,094,400 1,232,650 61,834 69,645 Inventories, net (Note 8) 289,025, ,679,204 16,329,922 14,728,375 Other current assets (Note 10) 12,193,552 7,792, , ,279 Total current assets 661,124, ,229,368 37,353,546 34,082,459 NON-CURRENT ASSETS: Non-current financial instruments (Notes 5 and 33) 6,000 6, Non-current available-for-sale ( AFS ) financial assets (Notes 6 and 33) 560, ,000 31,640 31,640 Non-current other receivables, net (Notes 7 and 33) 38,731,544 39,605,250 2,188,332 2,237,697 Property, plant and equipment, net (Note 11) 1,198,132,736 1,173,736,394 67,694,500 66,316,106 Intangible assets (Note 12) 160,806, ,915,434 9,085,595 8,526,722 Deferred income tax assets (Note 23) - 19,069-1,077 Other non-current assets (Note 10) 355, ,473 20,064 20,367 Total non-current assets 1,398,592,377 1,365,202,620 Rs. 79,020,470 Rs. 77,133,948 TOTAL ASSETS 2,059,717,078 1,968,431,988 Rs. 116,374,016 Rs. 111,216,407 LIABILITIES AND SHAREHOLDERS EQUITY CURRENT LIABILITIES: Trade and other payables (Notes 18, 32 and 33) 681,737, ,271,842 Rs. 38,518,165 Rs. 35,327,859 Short-term borrowings (Notes 13,18 and 33) 136,719,766 99,540,013 7,724,667 5,624,011 Derivative liabilities (Notes 25 and 33) 11,157,650 14,974, , ,045 Provision for product warranties (Note 15) 56,578,386 57,556,475 3,196,679 3,251,941 Current portion of other long-term employee benefits obligation 1,035,489 1,770,267 58, ,020 Other current liabilities (Note 16) 29,565,169 22,493,217 1,670,432 1,270,868 Total current liabilities 916,793, ,606,064 Rs. 51,798,855 Rs. 46,420,744 (Continued)

5 SSANGYONG MOTOR COMPANY AND ITS SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (CONTINUED) AS OF MARCH 31, 2015, AND DECEMBER 31, 2014 Korean won Indian rupee March 31, 2015 December 31, 2014 March 31, 2015 December 31, 2014 (In thousands) (In thousands) NON-CURRENT LIABILITIES: Long-term borrowing (Notes 13,18 and 33) 22,500,000 25,000,000 Rs. 1,271,250 Rs. 1,412,500 Other non-current payables (Note 33) 19,538,048 3,534,693 1,103, ,710 Retirement benefit obligation (Note 17) 254,247, ,748,389 14,364,981 13,941,284 Other long-term employee benefits obligation 14,203,583 13,849, , ,486 Provision for long-term product warranties (Note 15) 81,509,976 80,309,564 4,605,314 4,537,490 Deferred income tax liabilities Total non-current liabilities 391,999, ,441,958 Rs. 22,147,971 Rs. 20,873,470 TOTAL LIABILITIES 1,308,793,375 1,191,048,022 Rs. 73,946,826 Rs. 67,294,214 SHAREHOLDERS EQUITY: Total shareholders' equity 750,923, ,383,966 Rs. 42,427,190 Rs. 43,922,193 Capital stock (Note 19) 686,100, ,100,480 38,764,677 38,764,677 Other capital surplus (Note 20) 131,678, ,383,402 7,439,827 7,310,162 Other capital adjustments (Notes 21 and 25) (10,568,960) (13,065,231) (597,146) (738,186) Retained earnings (accumulated deficit) (Note 22) (56,286,176) (25,034,685) (3,180,168) (1,414,460) Non-controlling interests TOTAL SHAREHOLDERS EQUITY 750,923, ,383,966 Rs. 42,427,190 Rs. 43,922,193 TOTAL LIABILITIES AND SHAREHOLDERS EQUITY 2,059,717,078 1,968,431,988 Rs. 116,374,016 Rs. 111,216,407 (Concluded) See accompanying notes to consolidated financial statements.

6 SSANGYONG MOTOR COMPANY AND ITS SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE THREE MONTHS ENDED MARCH 31, 2015 AND 2014 Korean won (In thousands) Indian rupee (In thousands) SALES (Notes 31 and 32) 760,372, ,559,042 Rs. 42,961,063 Rs. 48,734,586 COST OF SALES (Notes 24 and 32) 661,450, ,136,051 37,371,945 41,365,687 GROSS PROFIT 98,922, ,422,991 5,589,118 7,368,899 SELLING AND ADMINISTRATIVE EXPENSES (Notes 24 and 26) 133,121, ,242,852 7,521,338 7,415,221 OPERATING LOSS (34,198,571) (819,861) (1,932,220) (46,322) NON-OPERATING INCOME (Note 27) 7,675,891 7,560, , ,189 NON-OPERATING EXPENSES (Note 27) 6,910,504 8,333, , ,859 FINANCIAL INCOME (Notes 25 and 28) 9,159,801 14,637, , ,025 FINANCIAL COST (Note 28) 6,954,822 2,093, , ,289 INCOME BEFORE INCOME TAX (31,228,205) 10,951,218 (1,764,393) 618,744 INCOME TAX EXPENSE (Note 23) 18, ,096 1,024 11,814 NET INCOME (LOSS) (31,246,324) 10,742,122 (1,765,417) 606,930 OWNERS OF THE COMPANY (31,246,324) 10,742,122 (1,765,417) 606,930 NON-CONTROLLING INTERESTS OTHER COMPREHENSIVE INCOME (LOSS) (Notes 21 and 22) 2,491,103 (14,237,088) Rs. 140,749 Rs. (804,395) TOTAL COMPREHENSIVE LOSS (28,755,221) (3,494,966) Rs. (1,624,668) Rs. (197,465) OWNERS OF THE COMPANY (28,755,221) (3,494,966) (1,624,668) (197,465) NON-CONTROLLING INTERESTS INCOME (LOSS) PER SHARE (Note 29) Basic and diluted income (loss) per share (228) 78 (13) 4 See accompanying notes to consolidated financial statements.

7 SSANGYONG MOTOR COMPANY AND ITS SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY (CONTINUED) FOR THE THREE MONTHS ENDED MARCH 31, 2015 AND 2014 Paid-in capital in excess of par Korean won in thousands Other capital surplus Debt to be swapped for equity Gain on disposal of treasury stock Retained earnings (accumulated deficit) Gain on capital Other capital Other capital Capital stock reduction Treasury stock surplus adjustments Total Balance at January 1, ,100,480 11,452, ,351, ,508 (108,530) - (3,243,869) 27,519,841 41,194, ,197,864 Net income ,742,122 10,742,122 Actuarial loss (7,780) (7,780) Loss on valuation of derivatives (14,096,600) - (14,096,600) Overseas operations translation credit (132,708) - (132,708) Balance at 686,100,480 11,452, ,351, ,508 (108,530) - (3,243,869) 13,290,533 51,928, ,702,898 Balance at January 1, ,100,480 11,452, ,189, ,508 (1,189,820) - - (13,065,231) (25,034,685) 777,383,966 Net loss (31,246,324) (31,246,324) Actuarial loss (5,167) (5,167) Disposal of treasury stock ,189,820 1,105, ,294,957 Gain on valuation of derivatives ,047,850-2,047,850 Overseas operations translation credit , ,421 Balance at 686,100,480 11,452, ,189, ,508-1,105,137 - (10,568,960) (56,286,176) 750,923,703 (Continued)

8 SSANGYONG MOTOR COMPANY AND ITS SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY (CONTINUED) FOR THE THREE MONTHS ENDED MARCH 31, 2015 AND 2014 Paid-in capital in excess of par Indian rupee in thousands Other capital surplus Debt to be swapped for equity Gain on disposal of treasury stock Retained earnings (accumulated deficit) Gain on capital Other capital Other capital Capital stock reduction Treasury stock surplus adjustments Total Balance at January 1, 2014 Rs. 38,764,677 Rs. 647,078 Rs. 6,799,864 Rs. 52,630 Rs. (6,132) Rs. - Rs. (183,278) Rs. 1,554,871 Rs. 2,327,469 Rs. 49,957,179 Net income , ,930 Actuarial loss (440) (440) Loss on valuation of derivatives (796,457) - (796,457) Overseas operations translation credit (7,498) - (7,498) Balance at Rs. 38,764,677 Rs. 647,078 Rs. 6,799,864 Rs. 52,630 Rs. (6,132) Rs. - Rs. (183,278) Rs. 750,916 Rs. 2,933,959 Rs. 49,759,714 Balance at January 1, 2015 Rs. 38,764,677 Rs. 647,078 Rs. 6,677,679 Rs. 52,630 Rs. (67,225) Rs. - Rs. - Rs. (738,186) Rs. (1,414,460) Rs. 43,922,193 Net loss (1,765,417) (1,765,417) Actuarial loss (291) (291) Disposal of treasury stock ,225 62, ,665 Gain on valuation of derivatives , ,704 Overseas operations translation credit ,336-25,336 Balance at Rs. 38,764,677 Rs. 647,078 Rs. 6,677,679 Rs. 52,630 Rs. - Rs. 62,440 Rs. - Rs. (597,146) Rs. (3,180,168) Rs. 42,427,190 (Concluded) See accompanying notes to consolidated financial statements.

9 SSANGYONG MOTOR COMPANY AND ITS SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 2015 AND 2014 Korean won Indian rupee (In thousands) (In thousands) CASH FLOWS FROM OPERATING ACTIVITIES: Net income (Loss) (31,246,324) 10,742,122 Rs. (1,765,417) Rs. 606,930 Adjustment (Note 30) 46,603,932 42,160,526 2,633,122 2,382,070 Changes in net working capital (Note 30) 43,261,747 (39,126,573) 2,444,289 (2,210,651) 58,619,355 13,776,075 3,311, ,349 Interests received 819,402 2,863,007 46, ,760 Interests paid (751,324) (2,077,568) (42,450) (117,383) Dividend income received 6,000 11, Payment of income tax - (177,441) - (10,025) Net cash provided by operating activities 58,693,433 14,395,073 3,316, ,323 CASH FLOWS FROM INVESTING ACTIVITIES: Cash inflows from investing activities: Decrease in other receivables 1,996,981 1,025, ,829 57,961 Disposal of property, plant and equipment 9, , ,818 Decrease in other assets 105,825 1,525 5, ,112,541 1,201, ,358 67,865 Cash outflows from investing activities: Increase in other receivables 1,954,620 1,800, , ,700 Acquisition of property, plant and equipment 53,622,212 25,507,656 3,029,655 1,441,183 Acquisition of intangible assets 17,118,415 13,641, , ,726 72,695,247 40,948,822 4,107,281 2,313,609 Net cash used in investing activities (70,582,706) (39,747,645) (3,987,923) (2,245,744) CASH FLOWS FROM FINANCING ACTIVITIES: Cash inflows from financing activities: Increase in borrowings 38,833,971 21,699,410 2,194,119 1,226,017 Increase in government grants 40,440 2,178 2, Disposal of treasury stock 2,294, ,665-41,169,368 21,701,588 2,326,069 1,226,140 (Continued)

10 SSANGYONG MOTOR COMPANY AND ITS SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) FOR THE THREE MONTHS ENDED MARCH 31, 2015 AND 2014 Korean won (In thousands) Indian rupee (In thousands) Cash outflows for financing activities: Redemption of borrowings - 95,404,765 Rs. - Rs. 5,390,369-95,404,765-5,390,369 Net cash provided by (used in) financing activities 41,169,368 (73,703,177) 2,326,069 (4,164,229) EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS (95,271) (68,568) (5,383) (3,874) NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 29,184,824 (99,124,317) 1,648,942 (5,600,524) CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 156,765, ,790,832 8,857,240 20,723,682 CASH AND CASH EQUIVALENTS, ENDING OF PERIOD 185,950, ,666,515 Rs. 10,506,182 Rs. 15,123,158 (Concluded) See accompanying notes to consolidated financial statements.

11 - 2 - SSANGYONG MOTOR COMPANY AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF MARCH 31, 2015, AND DECEMBER 31, 2014, AND FOR THE THREE MONTHS ENDED MARCH 31, 2015 AND GENERAL: (1) Parent Company overview and recent changes in business environment Ssangyong Motor Company (the Company ) was incorporated on December 6, 1962, in the Republic Korea and listed its stocks on the Korea Stock Exchange in May The Company is headquartered in Dongsak-ro, Pyungtaek and its factories are located in Pyungtaek, Kyeonggi-do and Changwon, Kyeongsangnam-do, Republic of Korea. The Company manufactures and distributes motor vehicles and parts. (2) Major shareholders The Company s shareholders as of, are as follows: Name of shareholder Number of shares owned Percentage of ownership (%) Mahindra & Mahindra Ltd. 99,964, Others 37,255, ,220, SIGNIFICANT ACCOUNTING POLICIES: The Company and its subsidiaries (the Group ) summarized consolidated interim financial statement, its period belong to annual financial report, adopts Korean International Reporting Standards ( K-IFRS ) 1034 Interim Financial Reporting. The audited consolidated financial statement, December 31, 2014, is used to understand the consolidated interim financial statement. The account policy is identified with the audited financial statement of December 31, 2014 except for the account policy explained as follows. The Indian rupee amounts presented in these consolidated financial statements were computed by translating the Korean won into Indian rupees based on the Bank of Korea Basic Rate ( 1 to Rs at March 31, 2015), solely for the convenience of the reader. These convenience translations into Indian rupees should not be construed as representations that the Korean won amounts have been, could have been, or could in the future be, converted at this or any other rate of exchange. 1) First-time adoption of IFRSs and its description (change in accounting policy) as follows: Amendments to K-IFRS 1019 Employee Benefits The amendments permit the Group to recognize amount of contributions as a reduction in the service cost in which the related service is rendered if the amount of the contributions are independent of the number of years of service. The application of these amendments has no impact on the disclosure in the Group s financial statements. Annual Improvements to K-IFRS Cycle The amendments to K-IFRS 1002 (i) changes the definitions of vesting condition and market condition ; and (ii) add definition for performance condition and service condition which were previously included within the definition of vesting condition. The amendments to K-IFRS 1103 Business Combinations clarify the classification and measurement of the contingent consideration in business combination. The amendments to K-IFRS 1108 Operating Segments clarify that a reconciliation of the total of the reportable segments assets should only be provided if the segment assets are regularly provided to the chief

12 - 3 - operating decision maker. The application of these amendments has no impact on the disclosure in the Group s financial statements. Annual Improvements to K-IFRS Cycle The amendments to K-IFRS 1103 clarify the scope of the portfolio exception for measuring the fair values of the Group s financial assets and financial liabilities on a net basis, including all contracts that are within the scope; the standard does not apply to the accounting for the formation of all types of joint arrangement in the financial statements or the joint arrangement itself. The amendments to K-IFRS 1113 Fair values Measurements and K-IFRS 1040 Investment Properties exist and these amendments have no impact on the disclosure in the Group s financial statements. 2) New and revised IFRSs issued but not yet effective The Group has not applied the following new and revised IFRSs that have been issued but are not yet effective Amendments to K-IFRS 1016 Property, plant and Equipment The amendments to K-IFRS 1016 prohibit the Group from using a revenue-based depreciation method for items of property, plant and equipment. The amendments are effective for the annual periods beginning on or after January 1, Amendments to K-IFRS 1038 Intangible Assets The amendments apply prospectively for annual periods beginning on or after January 1, The amendments to K-IFRS 1038 rebuts presumption that revenue is not an appropriate basis for the amortization of an intangible assets, which the presumption can only be rebutted when the intangible asset expressed as a measure of revenue or when it can be demonstrated that revenue and consumption of the economic benefits of the intangible asset are highly correlated, Amendments to K-IFRS 1111 Accounting for Acquisitions of Interests in Joint Operations The amendments to K-IFRS 1111 provide guidance on how to account for the acquisition of joint operation that constitutes a business as defined in K-IFRS A joint operator is also required to disclose the relevant information required by K-IFRS 1103 and other standards for business combinations. The amendments to K- IFRS 1111 are effective for the annual periods beginning on or after January 1, The Group does not anticipate that these amendments referred above will have a significant effect on the Group s consolidated financial statements and disclosures. 3. CRITICAL ACCOUNTING ESTIMATES AND ASSUMPTIONS: In the preparation of the Group s interim consolidated financial statements, management is required to apply accounting policies and make judgments, estimation and assumptions affecting the carrying amounts of assets and liabilities, income and expenses. The estimation and assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may be different from those estimations. The management s significant judgments about the application of the Group s accounting policies and the main resources of the uncertainty are consistent with those of the annual consolidated financial statements for the year December 31, CASH AND CASH EQUIVALENTS: Cash and cash equivalents include cash on hand and in banks and highly liquid short-term financial instruments that may be easily converted into cash and whose risk of value fluctuation is not material.

13 RESTRICTED FINANCIAL ASSETS: Restricted financial assets as of, and December 31, 2014, are as follows: Financial institution Cash and cash Shinhan Bank equivalents Long-term financial instruments March 31, 2015 December 31, 2014 Notes and others 665, ,689 Government subsidies and others Unconfirmed reorganization debt Woori Bank 955,400 14,147,553 pledged as collateral Shinhan Bank and others 6,000 6,000 Overdraft deposit 1,626,905 14,559,242 Financial institution Cash and cash Shinhan Bank equivalents Long-term financial instruments March 31, 2015 December 31, 2014 Notes and others Rs. 37,601 Rs. 22,921 Government subsidies and others Unconfirmed reorganization debt Woori Bank 53, ,337 pledged as collateral Shinhan Bank and others Overdraft deposit Rs. 91,920 Rs. 822, LONG-TERM AFS FINANCIAL ASSETS: The Group s long-term AFS financial assets as of, and December 31, 2014, are as follows: Ownership (%) Acquisition cost December 31, 2014 March 31,2015 Net asset value Book value Book value Classification Kihyup Technology Banking Corporation (*) , , , ,000 Korea Management Consultants Association (*) , ,903 60,000 60, ,000 1,204, , ,000 Ownership (%) Acquisition cost December 31, 2014 March 31,2015 Net asset value Book value Book value Classification Kihyup Technology Banking Corporation (*) 1.72 Rs. 28,250 Rs. 38,173 Rs. 28,250 Rs. 28,250 Korea Management Consultants Association (*) ,390 29,883 3,390 3,390 Rs. 31,640 Rs. 68,056 Rs. 31,640 Rs. 31,640 (*) Because the market prices from an active market are not available and the fair values cannot be reliably measured, AFS financial assets are measured at their acquisition costs.

14 TRADE AND OTHER RECEIVABLES: All current trade and other receivables are due within one year from, and because the present value discount effect is not material, the fair value of the aforementioned receivables is equal to the book value. (1) Details of current portion of trade and other receivables as of, and December 31, 2014, are as follows: Financial Assets Trade Non-trade Other Other long-term receivables general 151,987,909 18,290,210 2,708,275 38,875,082 Less: Allowance for doubtful accounts (113,079) (3,785) (8,085) (143,538) 151,874,830 18,286,425 2,700,190 38,731,544 December 31, 2014 Financial Assets Trade Non-trade Other Other long-term receivables general 155,912,326 18,513,496 2,825,393 39,754,888 Less: Allowance for doubtful accounts (87,169) (393,336) (11,056) (149,638) 155,825,157 18,120,160 2,814,337 39,605,250 Financial Assets Trade Non-trade Other Other long-term receivables general Rs. 8,587,317 Rs. 1,033,397 Rs. 153,018 Rs. 2,196,442 Less: Allowance for doubtful accounts (6,389) (214) (457) (8,110) Rs. 8,580,928 Rs. 1,033,183 Rs. 152,561 Rs. 2,188,332 December 31, 2014 Financial Assets Trade Non-trade Other receivables Other long-term receivables general Rs. 8,809,046 Rs. 1,046,013 Rs. 159,634 Rs. 2,246,152 Less: Allowance for doubtful accounts (4,925) (22,223) (625) (8,455) Rs. 8,804,121 Rs. 1,023,790 Rs. 159,009 Rs. 2,237,697 (2) Credit risk and allowance for doubtful accounts The above trade and non-trade receivables and other receivables are classified as loans and receivables and measured at amortized cost. If a credit risk occurs with respect to a dealership sale, which is a major type of the Group s sales, the respective dealership bears all of the risk; the Group manages credit risk on product sales using two management indexes, agreed liability rate and agreed excess rate, and when the management index exceeds the agreed rate, it imposes a release restriction on the respective dealership and transfers a credit risk arising from product sales. The Group s trade receivables are usually collected within 30 days but some of the notes receivable are collected within 75 days. Based on the past experience, receivables that are overdue for more than one year are usually not collected, and the Group reserves the full amount of those receivables as an allowance for doubtful accounts. The Group estimates an allowance for the receivables that are overdue for more than 90 days through an individual analysis based on each transacting party; for receivables that are not subject to individual analysis, the Group estimates an allowance based on the historical loss rates.

15 - 6 - Some of the trade receivables that are overdue for more than 90 days are not included in the above trade receivables (refer to the aging analysis below); the Group did not reserve an allowance for the aforementioned receivables since their credit ratings did not change materially, and they are expected to be collected. The Group has no collaterals pledged or credit enforcement provided for the aforementioned receivables and does not have a legal right to offset those receivables with the debt of the transacting parties. 1) Aging analysis of the trade and non-trade receivables that are overdue, but are not impaired as of, and December 31, 2014, is as follows: Classification 3-6 months 6-12 months Over 1 year Total Trade receivables 833,769 3, ,539 Non-trade receivables 1,494, ,394 4,248,614 5,916,132 Other long-term receivables , ,250 2,327, ,164 4,351,864 6,856,921 December 31, 2014 Classification 3-6 months 6-12 months Over 1 year Total Trade receivables 1,819,742 44,594-1,864,336 Non-trade receivables 670,507 7,435 4,734,672 5,412,614 Other long-term receivables , ,250 2,490,249 52,029 4,837,922 7,380,200 Classification 3-6 months 6-12 months Over 1 year Total Trade receivables Rs. 47,108 Rs. 213 Rs. - Rs. 47,321 Non-trade receivables 84,418 9, , ,262 Other long-term receivables - - 5,834 5,834 Rs. 131,526 Rs. 10,010 Rs. 245,881 Rs. 387,417 December 31, 2014 Classification 3-6 months 6-12 months Over 1 year Total Trade receivables Rs. 102,815 Rs. 2,520 Rs. - Rs. 105,335 Non-trade receivables 37, , ,813 Other long-term receivables - - 5,834 5,834 Rs. 140,699 Rs. 2,940 Rs. 273,343 Rs. 416,982 2) Aging analysis of the trade, non-trade receivables and other long-term receivables that are impaired as of, and December 31, 2014, is as follows: Classification 3-6 months 6-12 months Over 1 year Total Other long-term receivables ,349 47,349 December 31, 2014 Classification 3-6 months 6-12 months Over 1 year Total Non-trade receivables , ,237 Other long-term receivables ,349 47, , ,586

16 - 7 - Classification 3-6 months 6-12 months Over 1 year Total Other long-term receivables Rs. - Rs. - Rs. 2,675 Rs. 2,675 December 31, 2014 Classification 3-6 months 6-12 months Over 1 year Total Non-trade receivables Rs. - Rs. - Rs. 21,935 Rs. 21,935 Other long-term receivables - - 2,675 2,675 Rs. - Rs. - Rs. 24,610 Rs. 24,610 3) Changes in allowance for trade and other receivables for the three months and 2014, are as follows: Classification Trade Non-trade Other Other long-term Beginning balance 87, ,336 11, ,638 Bad debt expense 25,910 (20,870) (2,961) (6,100) Write-offs - (368,681) - - Ending balance 113,079 3,785 8, ,538 Classification Trade Non-trade Other Other long-term Beginning balance 208, , ,459 Bad debt expense 167,644 6, Transfer (404) Ending balance 376, , ,055 Classification Trade Non-trade Other Other long-term Beginning balance Rs. 4,925 Rs. 22,223 Rs. 625 Rs. 8,455 Bad debt expense 1,464 (1,178) (168) (345) Write-offs - (20,831) - - Ending balance Rs. 6,389 Rs. 214 Rs. 457 Rs. 8,110 Classification Trade Non-trade Other Other long-term Beginning balance Rs. 11,792 Rs. 27,744 Rs. - Rs. 13,642 Bad debt expense 9, Transfer (23) Ending balance Rs. 21,264 Rs. 28,110 Rs. 33 Rs. 13,619 The Group estimates allowances for doubtful accounts through individual analysis, and an allowance for the receivables that are not subject to separate individual analysis is estimated based on the historical collection rates. For troubled receivables (default, liquidation, bankruptcy, court receivership, workout, disappearance, full-scale capital erosion, etc.), the Group assesses collectability of each receivable through an individual analysis and reserves 100% allowance. For the receivables that are not subject to individual analysis, the allowance is estimated by applying the average loss rate for the past three years to the remaining balance of the receivables at the end of a reporting period; the three-year average loss rate is calculated by dividing the amount of actual loss occurred in the past three years by the average balance of the receivables.

17 INVENTORIES: Details of the inventories as of, and December 31, 2014, are as follows: December 31, 2014 Merchandises 55,769,193 54,471,562 Finished goods 80,854,767 43,801,591 Work in process 28,899,582 29,184,732 Raw materials 51,585,394 51,686,249 Submaterials 485, ,473 Supplies 3,786,483 3,821,024 Goods in transit 67,644,719 77,112,573 Total 289,025, ,679,204 December 31, 2014 Merchandises Rs. 3,150,959 Rs. 3,077,643 Finished goods 4,568,294 2,474,790 Work in process 1,632,826 1,648,937 Raw materials 2,914,575 2,920,273 Submaterials 27,404 33,983 Supplies 213, ,889 Goods in transit 3,821,927 4,356,860 Total Rs. 16,329,922 Rs. 14,728,375 The Group is using the lower of cost or market method on the statements of financial position in the case of inventories market value decrease under the acquisition cost. On the other hand, loss on valuation of inventories that was added to cost of sales on current period due to the application of lower of cost or market method, is 2,803,230 thousand (Rs. 158,382 thousand). 9. CONSOLIDATED SUBSIDIARIES: (1) Details of investments in subsidiaries Details of investment in securities accounted for using equity method as of, are as follows: Name of subsidiary Location Ownership(%) Closing Month Industry Ssangyong Motor (Shanghai) Co., Ltd. China December Car Sales Ssangyong European Parts Center B.V. Netherland December A/S & Sales (2) Summarized financial information of subsidiaries The summarized financial information of the Group s subsidiaries as of and for the three months March 31, 2015 and 2014, is as follows: Companies Assets Liabilities Equity Ssangyong Motor (Shanghai) Co., Ltd. 6,230, ,823 5,918,979 Ssangyong European Parts Center B.V. 6,638,308 10,072,713 (3,434,405) Comprehensive Companies Sales Net income (loss) Income (loss) Ssangyong Motor (Shanghai) Co., Ltd. 476,524 (293,189) (209,963) Ssangyong European Parts Center B.V. 2,972, , ,212

18 - 9 - : Companies Assets Liabilities Equity Ssangyong Motor (Shanghai) Co., Ltd. Rs. 352,040 Rs. 17,618 Rs. 334,422 Ssangyong European Parts Center B.V. 375, ,108 (194,044) Comprehensive Companies Sales Net income (loss) Income (loss) Ssangyong Motor (Shanghai) Co., Ltd. Rs. 26,924 Rs. (16,565) Rs. (11,863) Ssangyong European Parts Center B.V. 167,971 7,082 30,296 December 31, 2014 December 31, 2014 Companies Assets Liabilities Equity Ssangyong Motor (Shanghai) Co., Ltd. 7,017, ,529 6,174,620 Ssangyong European Parts Center B.V. 7,158,932 11,129,549 (3,970,617) Year December 31, 2014 Comprehensive Companies Sales Net income (loss) Income (loss) Ssangyong Motor (Shanghai) Co., Ltd. 6,512, , ,559 Ssangyong European Parts Center B.V. 14,118, , ,709 December 31, 2014 Companies Assets Liabilities Equity Ssangyong Motor (Shanghai) Co., Ltd. Rs. 396,469 Rs. 47,603 Rs. 348,866 Ssangyong European Parts Center B.V. 404, ,820 (224,340) Year December 31, 2014 Comprehensive Companies Sales Net income (loss) Income (loss) Ssangyong Motor (Shanghai) Co., Ltd. Rs. 367,964 Rs. 27,791 Rs. 30,372 Ssangyong European Parts Center B.V. 797,702 6,566 26, OTHER ASSETS: Carrying values of the Group s other assets as of, and December 31, 2014, are as follows: Account December 31, 2014 Other current assets Advance payments 2,625,323 2,196,221 Less: Allowance for doubtful accounts (19,888) (10,298) Prepaid expenses 8,693,983 4,811,936 Income tax refundable 894, ,694 12,193,552 7,792,553 Other non-current assets Other non-current assets 355, ,473

19 Account December 31, 2014 Other current assets Advance payments Rs. 148,331 Rs. 124,086 Less: Allowance for doubtful accounts (1,124) (582) Prepaid expenses 491, ,875 Income tax refundable 50,519 44, , ,279 Other non-current assets Other non-current assets Rs. 20,064 Rs. 20, PROPERTY, PLANT AND EQUIPMENT: (1) Carrying amounts of property, plant and equipment as of, and December 31, 2014, are as follows: Acquisition Cost Government Subsidies Accumulated depreciation Accumulated impairment loss Carrying Amount Land 475,531, ,531,313 Buildings 532,277,745 1,638, ,710, ,366, ,562,102 Structures 105,941, ,075 59,598,825 29,156,376 17,035,663 Machinery 1,296,166, ,198 1,014,206,025 98,839, ,533,222 Vehicles 9,784,159-7,016,276 1,191,381 1,576,502 Tools and molds 1,001,484,660 12, ,353, ,637, ,480,850 Equipment 67,334,297 13,119 39,496,940 4,540,790 23,283,448 Construction in progress 30,991, ,991,077 Machinery in transit 1,138, ,138,559 3,520,650,058 2,402,689 1,875,381, ,733,020 1,198,132,736 December 31, 2014 Acquisition Cost Government Subsidies Accumulated depreciation Accumulated impairment loss Carrying Amount Land 475,531, ,531,313 Buildings 530,841,465 1,650, ,171, ,371, ,648,006 Structures 105,440, ,164 59,172,283 29,156,376 16,955,550 Machinery 1,255,831, ,294 1,008,322,247 98,853, ,061,877 Vehicles 9,621,509-6,785,350 1,194,962 1,641,197 Tools and molds 891,332,596 14, ,255, ,637, ,424,105 Equipment 67,166,387 15,571 38,058,387 4,542,664 24,549,765 Construction in progress 131,569, ,569,206 Machinery in transit 2,355, ,355,375 3,469,689,596 2,430,063 1,848,765, ,757,691 1,173,736,394 Acquisition Cost Government Subsidies Accumulated depreciation Accumulated impairment loss Carrying Amount Land Rs. 26,867,519 Rs. - Rs. - Rs. - Rs. 26,867,519 Buildings 30,073,693 92,572 10,662,138 8,382,723 10,936,260 Structures 5,985,720 8,536 3,367,334 1,647, ,515 Machinery 73,233,396 33,177 57,302,640 5,584,452 10,313,127 Vehicles 552, ,420 67,313 89,072 Tools and molds 56,583, ,998,952 9,189,037 15,395,168 Equipment 3,804, ,231, ,555 1,315,515

20 Acquisition Cost Government Subsidies Accumulated depreciation Accumulated impairment loss Carrying Amount Construction in progress 1,750, ,750,995 Machinery in transit 64, ,329 Rs. 198,916,728 Rs. 135,752 Rs. 105,959,061 Rs. 25,127,415 Rs. 67,694,500 December 31, 2014 Acquisition Cost Government Subsidies Accumulated depreciation Accumulated impairment loss Carrying Amount Land Rs. 26,867,519 Rs. - Rs. - Rs. - Rs. 26,867,519 Buildings 29,992,543 93,232 10,518,685 8,383,013 10,997,613 Structures 5,957,381 8,823 3,343,234 1,647, ,989 Machinery 70,954,473 33,521 56,970,208 5,585,248 8,365,496 Vehicles 543, ,373 67,515 92,727 Tools and molds 50,360, ,089,450 9,189,037 10,080,963 Equipment 3,794, ,150, ,661 1,387,060 Construction in progress 7,433, ,433,660 Machinery in transit 133, ,079 Rs. 196,037,463 Rs. 137,298 Rs. 104,455,250 Rs. 25,128,809 Rs. 66,316,106 (2) Changes in the carrying amounts of property, plant and equipment for the three months March 31, 2015 and 2014, are as follows: Beginning Balance Acquisition Disposal Other(**) Depreciation(*) Ending balance Land 475,531, ,531,313 Buildings 194,648,005 14,681 1,242 1,437,240 2,536, ,562,102 Structures 16,955,549 28, , ,720 17,035,663 Machinery 148,061,878 1,512,700 1,802 40,533,963 7,573, ,533,222 Vehicles 1,641, , ,050 1,576,502 Tools and molds 178,424,106 17,915, ,086,246 16,945, ,480,850 Equipment 24,549, ,317 1,246 (4,306) 1,620,083 23,283,448 Construction in progress 131,569,206 33,679,965 - (134,258,094) - 30,991,077 Machinery in transit 2,355, ,851 - (1,327,667) - 1,138,559 1,173,736,394 53,622,212 4,379 37,629 29,259,120 1,198,132,736 (*) Depreciation cost of susp assets amount of 4,739 in thousands is excluded from the depreciation cost in consolidated statements of cash flows. (**) Capitalization cost that has flowed into construction in progress is 157,600 in thousands in this period. Beginning balance Acquisition Disposal Other Depreciation(*) Ending balance Land 475,305, ,305,696 Buildings 193,689,175 5, ,373, ,321,085 Structures 16,849,781 6,086-36, ,037 16,489,916 Machinery 99,266,258 26,221 92,996 3,037,071 8,913,934 93,322,620 Vehicles 1,946,974-3 (921) 135,146 1,810,904 Tools and molds 201,515, , ,248,680 14,103, ,050,590 Equipment 23,800, ,874 3,563 16,581 1,387,397 22,741,988 Construction in progress 70,917,106 24,735,889 83,768 (4,503,680) - 91,065,547 Machinery in transit 862,440 27,357 - (835,814) - 53,983 1,084,153,627 25,507, ,177 (1,996) 27,315,781 1,082,162,329 (*) Depreciation cost of susp assets amount of 5,715 in thousands is excluded from the depreciation cost in consolidated statement of cash flows.