Business review up to Sep, 2012 Business plan 2013 Major challenge and issues October 09 , 2012

1. Business review up to Sep, 2012 Business plan 2013 Major challenge and issues October09, 2012 Operation (HR & production & Matl’-Logis & Maint & ME)

2. Contents Ⅰ. Business Achievement in 2012 Ⅱ. Business Plan in 2013 Ⅲ. Challenge & Issues

3. Ⅰ.Business Achievement up to Sep. 2012

4. Bob DeFauw Representative Director HS Yoon Director of MKL operation Maltl’ &Logis HR M.E Maint Others Production Plant Org. Chart Anthony Seo Plant controller Ken Lee HR Manager Duke Lee SDE & Buyer Ken Lee Operation Mgr Brian Choi Sales Manager Daniel Lee Quality Mgr Michael Chai R&D Mgr/CSE David Shin Q.A Mgr Charles Han CSE Kayla Bae Finance Assist. Rita Suh HR Assist. Frank Seo Sr. SQE YJ Hwang Finance Assist. Shelly Kim HR Assist. Joonhi Ahn Matl’ & Logis supervisor Sooyup Ahn Production Engineer James Yoon Manufacturing Engineer John Lee Maintenance Engineer JH Kim Quality Egr SD Kim Quality Egr Jimmy Choi Matl’ & Logis Assistant Martin Choi Manufacturing Engineer DM Kim Maintenance Engineer Wansup Park Quality Egr Minhyung Lee Matl’ & Logis Assistant Alley Hwang CMM Jeongmoon Cho Quality Egr & consignment

5. Safety Maltl’ &Logis HR M.E Maint Others Production Date of last lost time incident are 941 as of the end of Sep, 2012.

6. Maltl’ &Logis Headcount HR M.E Maint Others Production Hourly composition Average Headcount

7. Maltl’ &Logis Turn over HR M.E Maint Others Production Turn over trend from 2006 BSM deletion for Theta 2.0 Merged with Asahitec Bankruptcy No. of outsourcing employees who left the company

8. Maltl’ &Logis Production HR M.E Maint Others Production ※ Number of Theta BSM manufactured by Salaried employees up to the end of Sep : 10,102 units Theta BSM production trend [2011 and 2012] R-engine BSM production trend [2011 and 2012]

9. Maltl’ &Logis Productivity HR M.E Maint Others Production Theta BSM production trend [2011 and 2012] R-engine BSM production trend [2011 and 2012]

10. Maltl’ &Logis Delivery HR M.E Maint Others Production Theta BSM R - BSM

11. Maltl’ &Logis Inventory HR M.E Maint Others Production In million KRW: 24.0

12. Maltl’ &Logis Shipping costs HR M.E Maint Others Production In thousand Won ‘000 Won YTD : 482,075 thousand Won YTD : 0.56%

13. Maltl’ &Logis Gear consumption plan HR M.E Maint Others Production ● Gear application plan ● VCST gear consumptionplan

14. Maltl’ &Logis 7 bolt changeover schedule HR M.E Maint Others Production • Line Modification This plan can be changed by HMC schedule and MKL stock status. • Supply plan during line modification • Delivery pallet • Required inventory for two weeks • → Minimum 20,000 units + safety stock • BSM inventory as of Oct 8, 2012 • Sample pallet → completed • Customer approval • -. Kia → Completed, HMC → In progress

15. Maltl’ &Logis S/W machine operation plan HR M.E Maint Others Production • S/W Maintenance expenses 386 Million KRW 222 Million KRW Total 1,033 Million KRW Total 652 Million KRW • S/W operation plan Theta #1 Line Theta #2 Line Overhaul New S/W #2 S/W #2 S/W #1 S/W #2 S/W #1 New S/W #1

16. Productivity & Quality improvement activities completed from Jan to Sep, 2012 Maltl’ &Logis HR M.E Maint Others Production In thousand Won

17. Productivity & Quality improvement activities will be done up to Dec, 2012 Maltl’ &Logis HR M.E Maint Others Production 1st Plan 2nd Plan • MKL received 25matters of customer complaints up to the End of Sep, 2012. • We estimated that 5 matters are related to rework process and 3matters are cleanliness such as oil & chip • Cleanliness improving activities from oil & chips • Task force group for rework & line patrol • Start date : Oct 22, 2012 • Status • Appointed two experienced employees. • They will carry out line patrol, product rework and repair. • Avoid HC increase , reduced line operator • Satisfied HMC and quality depart request • Period : Sep 1 ~Dec 31, 2012 • Member : MKL Operation team and all hourly employees • Status • Finding 31 major weak areas or machine • Start improvement from immediate action items

18. Productivity Comparison and Improving activities Maltl’ &Logis HR M.E Maint Others Production Theta BSM

19. Regular air leak check with bubble Attached a watt-hour meter for electric consumption analysis Signed a proper temperature on the air conditioner controller Instructed how to turn off unnecessary power during break time Maltl’ &Logis Kaizen HR M.E Maint Others Production Kaizen Theme #1 Electricity saving Kaizen Team KAIZEN Leader John Lee Kaizen Activities Maintenance D.M Kim Finance Y.J Hwang HR Shelly Kim M.E Martin Choi Quality Alley Hwang Mfg Bae & Ahn Matl & Logis Jimmy Choi • KAIZEN team has a meeting every Friday morning • Members share their ideas and discuss plans for saving electricity during the meeting Expected effect [In thousand Won]

20. Ⅱ. Business Plan in 2013

21. KPI Maltl’ &Logis HR M.E Maint Others Production

22. Headcount plan ● New hiring plan CSE & Quality engineer for Con-rod control Replacement for manufacturing manager (Johnny Kang)

23. Line operation plan 1. Working days, 2013 2. Line operation plan • Theta BSM line Line operation A line : 2shifts B line : 2shifts A line : 2shifts B line : 1.5shifts • R - BSM line • Tau FEMA line

24. Cost reduction In thousand KRW

25. Capex 2013 - ordinary In thousand KRW

26. Capex 2013 - New program In thousand KRW

27. Ⅲ. Challenge & Issues

28. Operation • Working practice change • Overtime work exceed the standard working hour specified in Labor Standards Act. • Adult employees may extend working hours up to 12 hours per week by Law. •  The average overtime working hours of MKL employees is about 20 hours per week. (66% exceed) • Need Back up .plan when salaried employees left without enough replacement time •  Johnny Kang/MS Han/ Jake Kim

29. Operation • Outsourcing employee • FTA related work • Increase maintenance cost and downtime frequency due to old equipment.

30. Thank you very much