Hyundai Group is considered to beas one of the nation¡¯s top-tier conglomerates, along with Samsung Group, in terms of total assets and sales.  Hyundai Group, As an umbrella organization for construction, automobile, electronics, heavy industry, and financial and other services, Hyundai Group is slated for a division into five is to split up into 5 small groups and a disposaldispose of its inefficient business units by 2003.  Meanwhile, by attracting foreign investment, issuing common stocks, and disposing of some of its assets, the Group was able tocould maintain its debt ratio at a sound level of 190.1% (as of the end of 1999), thus over-reachingbetter than  the projected rate of 199.1%. It also succeeded in, and reducinge the number of affiliates to 33.  As well,nd the Group nearlyalmost cleared the payment guarantees that had beenwhich were restricted by relevant regulations, and welcomedhad about 62 billion won worth of regular payment guarantees as of the end of 1999.

After freezing under the IMF control, the domestic construction market lingered ina slowdown aswith the public sector recoiledcowering in throughout 1999.  OnBut on the other handside, there have beenare some positive signs, including such as the effects of government policies like pump-primingpump priming, deregulation and low interest rates, a partial upturn of the residential market in Seoul and its neighboring cities, and an expansion of plant investment in accordance with recovery in the real economy.

As a result of mergers acquisition between theof  aluminum, furniture and electronic cable businesses in 1998, the Company¡¯s operation in 1999 generally produced abecame was generally very good showing, with total net sales of 853.2 billion won, increased by (up 42% up from the previous year). and nNew orders received totaltotaleding  1,456.6 billion won, based on its aat a relatively reinforced position followingover  Hyundai Development Co.¡¯s , recently separationed from the parent Group.  However, its profitability in 1999 sharply deteriorated to recording the current net loss, on account of increased financial costs in relation to the mergers and acquisitions, an anemic profitability of the furniture business after it hived offwhich was separated from the Company in July 1999, a huge loss on stock evaluation, and expenses for doubtful receivables bad debt expenses.

As Tthe merger with Hyundai Livart Co. came duringin the throes of investment in the housing marketpart, caused the Company found it necessary to raise its loansborrowings to a level of 941.6 billion won in 1998 despite successful issuance of common stocks worth 147 billion won.  But, inYet  the next year saw, the Company improved its financial structure status by reducinglowering 348.8 billion won in total loansborrowings, thanks to an issuance of by issuing additional common stocks worth 200 billion won, and a step up onquickening collection withdrawal of the receivables.

As it undertakesing large scale orders received in 1999 and continues to driveing forward with its housing business wing, of itself, the Company¡¯s projected sales for the projected years to come are expected to reach more than 1300 billion won.  Additionally,lso the operating leverage effect caused by the increased sales and a paring down ofthe cutting-down i interest expenses will contribute to thean improvement inof the Company¡¯s profitability.  However, it is expectedprojected that the Company will continues to feelbe under the pressure exerted by of cash outflows for working capital more or less byduring 2001, in accordance with the sales increase in sales.