SSANGYONG MOTOR COMPANY
BALANCE SHEETS AS OF DECEMBER 31, 2005 AND 2004   
  Korean Won Translation into
U.S. Dollar
ASSETS
2005
 2004 2005
2004
CURRENT ASSETS : Cash and cash equivaletns
260,546,428
 11,078,494 $257,203 $10,936
Short-term financial instruments 6,564,783 57,658,756 6,481 56,919
Available-for-sale securities 23,012
 1,578 23 2
Trade receivables, net of allowance for doubtful accounts of 2,818,935 thousand in 2005 and 94,929,225 thousand in 2004, and present value discount of 338,795 thousand in 2005 and 213,992 thousand in 2004
213,886,565
 212,678,355 211,142 209,949

Short-term loans, net of allowance for doubtful accounts of 22,854 thousand in 2005 and 4,052,527 thousand in 2004

1,551,744
 1,527,319 1,532 1,508

Other receivables, net of allowance for doubtful accounts of 4,557,008 thousand in 2005 and 4,951,631 thousand in 2004

16,988,862
 32,144,842 16,771 31,732

Advanced payments, net of allowance for doubtful accounts of 220,344 thousand in 2005 and 522,165 thousand in 2004

28,843,171
 56,697,686 28,473 55,970
Prepaid expenses 3,263,420
 4,442,680 3,222 4,386
Deferred tax assets 17,056,853 - 16,838 -
Inventories, net of allowance for valuation of 8,430,190 thousand in 2005 and 11,788,587 thousand in 2004 336,247,561
 364,799,842 331,932 360,118

Other current assets, net of allowance for doubtful accounts of 2,407 thousand in 2005 and 2,274,783 thousand in 2004

1,126,510
 1,432,969 1,113 1,414
  886,098,909 742,462,521 874,730 732,934
NON-CURRENT ASSETS Long-term financial instruments 8,000
 16,000 8 16
Long-term loans, net of allowance for doubtful accounts of 3,710,721 thousand in 2004 and 10,134,298 thousand in 2003
33,514,335
 28,557,986 32,108 27,360
Available-for-sale securities 1,563,097
 1,574,499 1,543 1,554
Equity securities using the equity method 2,130,709 1,924,494 2,103 1,900
Long-term loans, net of allowance for doubtful accounts of 359,446 thousand in 2005 and 3,710,721 thousand in 2004 30,198,916
 33,514,335 29,811 33,084
Long-term trade receivables, net of allowance for doubtful accounts of 1,015 thousand in 2005 and 2,995 thousand in 2004, and present value discount of 809 thousand in 2005 and 218 thousand in 2004 78,191 6,200 $ 77 $ 6
Guarantee deposits, net of allowance for doubtful accounts of 410,560 thousand in 2005 and 1,228,580 thousand in 2004 44,451,593
 38,748,813 43,881 38,252
Advance for employee contribution 9,037,390
 7,012,370 8,921 6,922
Deferred tax assets 121,189,737
 184,047,415 119,634 181,686
Other investments in properties 500,394
 623,206 494 615
Property, plant and equipment, net 1,537,168,826 1,513,529,133 1,517,442 1,494,106
Intangible assets 76,415,512
 86,740,011 75,435 85,627
  1,822,742,365 1,867,736,476 1,799,349 1,843,768
  2,708,841,274 2,610,198,997 $2,674,079 $2,576,702
LIABILITIES AND SHAREHOLDERS' EQUITY
2005 2004 2005 2004
CURRENT LIABILITIES : Trade payables 511,288,964
 465,203,428 $504,728 $459,233
Short-term borrowings 99,400,920
 58,956,512 98,125 58,200
Other payables 215,835,146 202,957,883 213,065 200,353
Advances from customers 9,861,385
 6,468,733 9,735 6,386
Withholdings 22,803,792
 14,251,610 22,511 14,069
Accrued expenses 24,499,248
 36,802,429 24,185 36,330
Current-portion of long-term debt -
 79,328,495 - 78,310
Accrued warranties and product liabilities 51,606,862
 54,640,809 50,945 53,940
Other current liabilities 1,997,598 1,550,674 1,972 1,532
  937,293,915 920,160,573 925,266 908,353
LONG-TERM LIABILITIES : Long-term debt, net of present value discount of 5,855,068 thousand in 2005 414,144,932
 246,557,785 408,830 243,394
Accrued severance indemnities, net of National Pension Fund of 2,788,827 thousand in 2005 and 3,538,908 thousand in 2004, and severance insurance deposits of 6,688,657 thousand in 2005 and 5,243,875 thousand in 2004) 169,973,155
 158,548,702 167,792 156,514
Accrued warranties and product liabilities 57,121,558 50,934,508 56,389 50,281
Other long-term liabilities 8,906,496 13,600,990 8,792 13,426
  650,146,141
 469,641,985 641,803 463,615
Total liabilities 1,587,440,056
 1,389,802,558 1,567,069 1,371,968
SHAREHOLDERS' EQUITY : Capital stock 604,023,100
604,023,100
596,272 596,272
Capital surplus 15,440,281 15,440,281 15,242 15,242

Retained earnings (Net loss of 103,360,186 thousand for the year ended December 31, 2005 and net income of 11,388,737 thousand for the year ended December 31, 2004)

502,089,061
601,078,990  495,646 593,365
Capital adjustments        
Gain on valuation of available-for-sale securities 56,973
 67,327 56 66
Exchange differences on translation of financial statements of operations outside Korea (208,197)
 (213,259)
 (206) (211)
Total Shareholders' Equity 1,121,401,218 1,220,396,439 1,107,010 1,204,734
Total Liabilities and Shareholders' Equity 2,708,841,274 2,610,198,997 $2,674,079 $2,576,702