Financial Overview

( in millions of won )

-	FY2005	FY2004	Rate of Change
Sales	1,582,264	1,626,849	(2.7%)
Operating Profit	88,311	159,518	(44.6%)
Net Profit	82,868	130,822	(36.7%)

Overseas Business
-The Company is accelerating its global management by building two manufacturing plants in India this year. It aims to achieve sales of the largest scale in history amounting to 1.7 trillion won by this investment. The Company, which is planning to make an investment of a total of 185 billion won this year in Korea and abroad, intends to designate 2006 the year for making aggressive inroads into the Indian market, which is growing as rapidly as China.The Company is going to establish new subsidiaries for producing steering wheel parts and other products by infusing 180 billion won into the Indian footholds. It is now operating an investment company and a research institution for production of steering products in India, and is planning to aggressively expand investment to enter the Indian auto parts market, revealed a spokesman for the company. (From the press release by the company on Sep. 22, 2006)

-The Company announced that it established Mando (Beijing) Automotive Chassis System Co., Ltd. in Beijing, its fourth production facility in China. The new plant built on a 112,000- square-meter land has the capacity to manufacture 1 million brake systems and suspension systems per year. The Company, which invested a total of 14 million dollars in this project, aims to generate annual sales of 158 million dollars (up 23 percent from the fiscal 2005 result) in China in fiscal year 2006. It will supply its products mainly to Korean automakers' operations in China, including Beijing Hyundai Motor and Donfeng Yueda Kia Motors. The Company also plans to complete the construction of an additional 178,500-square-meter proving ground for real car testing by the end of fiscal year 2006. The group-wide sales target for fiscal year 2006 is 3 billion dollars. Planning an additional investment of 190 million dollars, the Company aims to raise its annual sales to 640 million dollars by 2010. (From the press release on September 26, 2006)

- LG CNS, an IT services company, announced that it has made an agreement with the Company that LG CNS will set up Manufacturing Execution System (MES) at the Company's Tianjin plant. MES is a management tool that allows manufacturers to gather its on-site information on production and quality automatically. The Company expects the introduction of the system will help it to improve its operational efficiencies and product quality in an effective manner. LG CNS has also supported the Company in establishing MES at the Alabama plant in the U.S., as well as at the Suzhou plant and Beijing plant in China. (From the press release by the company on Sep. 11, 2006)

R&D Structure

Facility	Location	Area of development
Giheung System Research Center	Yong-in, Gyeonggi-do	- Countermeasure for hybrid technology - Development of integrated safety system - Development of driver support system - Development of key electronics technology
Pyeongtaek Testing & Evaluation Center	Pyeongtaek, Gyeonggi-do	- Development of vehicle and rig test/evaluation technology - Development of materials - NVH (Noise & Vibration, Harshness) - Manufacturing techniques - CMMi

-The Company established Mando (Beijing) Automotive Components R&D Center Co.,Ltd. in Beijing, China in June, 2006. It also conducts development activities at Mando R&D Shanghai Branch in Shanghai, China.
 

R&D Expenditure

( in millions of Won )

-	FY2006	FY2005	FY2004
Amount	N.A.	N.A.	55,358
% of Sales	N.A.	N.A.	3.9%