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1、 HYUNDAI MOTOR COMPANY AND ITS SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED DECEMBER 31,2022 AND 2021 ATTACHMENT:INDEPENDENT AUDITORS REPORT HYUNDAI MOTOR COMPANY ContentsINDEPENDENT AUDITORS REPORT-1 CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED STATEMENTS OF FINANC
2、IAL POSITION-6 CONSOLIDATED STATEMENTS OF INCOME-8 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME-9 CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY-10 CONSOLIDATED STATEMENTS OF CASH FLOWS-12 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS-14 152,Teheran-ro,Gangnam-gu,Seoul 06236(Yeoksam-dong,Gangnam F
3、inance Center 27th Floor)Republic of KoreaIndependent Auditors Report Based on a report originally issued in Korean To the Board of Directors and Shareholders Hyundai Motor Company:Opinion We have audited the consolidated financial statements of Hyundai Motor Company and its subsidiaries(“the Group”
4、),which comprise the consolidated statements of financial position as of December 31,2022 and 2021,the consolidated statements of income,comprehensive income,changes in equity and cash flows for the years then ended,and notes,comprising significant accounting policies and other explanatory informati
5、on.In our opinion,the accompanying consolidated financial statements present fairly,in all material respects,the consolidated financial position of the Group as of December 31,2022 and 2021,and its consolidated financial performance and its consolidated cash flows for the years then ended in accorda
6、nce with Korean International Financial Reporting Standards(“K-IFRS”).Basis for Opinion We conducted our audits in accordance with Korean Standards on Auditing(KSAs).Our responsibilities under those standards are further described in the Auditors Responsibilities for the Audit of the Consolidated Fi
7、nancial Statements section of our report.We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in Republic of Korea,and we have fulfilled our other ethical responsibilities in accordance with these requirem
8、ents.We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.Key Audit Matters Key audit matters are those matters that,in our professional judgment,were of most significance in our audit of the consolidated financial statements as of and
9、for the year ended December 31,2022.These matters were addressed in the context of our audit of the consolidated financial statements as a whole,and in forming our opinion thereon,and we do not provide a separate opinion on these matters 1)Valuation of warranty provisions As described in Note 2(20)a
10、nd Note 17 to the consolidated financial statements,the Group recognized warranty provision of 10,339,527 million as of December 31,2022.The Group offers its customers free warranty services during the guaranteed period and free repair services in the event of recall or campaign.To estimate the expe
11、cted warranty expenditures,the Group aggregates sales volume by vehicle model and uses historical data of the actual warranty costs.Warranty provisions are measured at the present value based on the expected warranty expenditures and discount rates.To measure and recognize warranty provisions,manage
12、ment applies assumptions to estimate expected warranty cost per unit by vehicle model and expected number of repair cases and applies discount rates to measure the present value of provisions.Management uses historical data of the actual warranty costs to estimate expected warranty cost per unit by
13、vehicle model and expected number of repair cases.We identified the valuation of warranty provision as a key audit matter because errors in aggregation of actual warranty costs and sales volume by vehicle models or in assumptions used to estimate future warranty expenditures and discount rates would
14、 have a significant impact on the consolidated financial statements.ssssssssssssssssssssssssssss The primary procedures we performed to address this key audit matter included the following:-Understanding the process to measure and recognize warranty provision and testing relevant controls.-Testing c
15、ompleteness and accuracy of vehicles sold used for estimation through inspection of related documents.-Evaluating reasonableness of assumptions applied for expected warranty cost per unit by vehicle model by comparing warranty costs incurred in the current period to the corresponding warranty costs
16、estimated in the prior period.-Evaluating reasonableness of assumptions applied for expected number of repair cases through historical data analysis.-Testing accuracy of warranty provision balance by inspecting documents related to historical data of the actual warranty expenses on a sample basis an
17、d testing of recalculation.-Testing discount rates by comparing to external sources of information.2)Valuation of financial services receivables As described in Note 2.(8)and Note 14 to the consolidated financial statements,as of December 31,2022,the Group recognized financial services receivables,n
18、et and loss allowance of 92,398,410 million and 1,726,916 million,respectively.In accordance with K-IFRS 1109 Financial Instruments,the Group recognizes allowance for credit loss for financial services receivables using the expected credit loss(ECL)model.The ECL model requires management judgment to
19、 assess whether the receivable has undergone a significant increase in credit risk,as well as other assumptions,such as credit rating and macroeconomic variables.In addition,the Group also considers historical transaction data,such as delinquency days,bankruptcy,and collection,to determine assumptio
20、ns used in the ECL model.As errors in the assumptions applied to the ECL model could have a significant impact on the consolidated financial statements,we identified the valuation of financial services receivables as a key audit matter.The primary procedures we performed to address this key audit ma
21、tter included the following:-Assessing whether the Groups accounting policies comply with the requirements in K-IFRS 1109 Financial Instruments.-Understanding the process over the measurement of credit loss allowance on financial services receivables and testing relevant controls.-On a sample basis,
22、assessing the credit rating and classification of credit quality,including the identification of significant increase credit risk,through inspection of related documents.-On a sample basis,checking the source data for probability of default and loss given default and testing appropriateness of calcu
23、lation methods used for the estimation through recalculation.Other matter The procedures and practices utilized in the Republic of Korea to audit such consolidated financial statements may differ from those generally accepted and applied in other countries.Responsibilities of Management and Those Ch
24、arged with Governance for the Consolidated Financial Statements Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with K-IFRS,and for such internal control as management determines is necessary to enable the preparation of cons
25、olidated financial statements that are free from material misstatement,whether due to fraud or error.In preparing the consolidated financial statements,management is responsible for assessing the Groups ability to continue as a going concern,disclosing,as applicable,matters related to going concern
26、and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations,or has no realistic alternative but to do so.Those charged with governance are responsible for overseeing the Groups financial reporting process.ssssssssssssssssssssssssssss
27、 Auditors Responsibilities for the Audit of the Consolidated Financial Statements Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement,whether due to fraud or error,and to issue an auditors report that in
28、cludes our opinion.Reasonable assurance is a high level of assurance,but is not a guarantee that an audit conducted in accordance with KSAs will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if,individually or in the aggr
29、egate,they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.As part of an audit in accordance with KSAs,we exercise professional judgment and maintain professional skepticism throughout the audit.We also:Identify
30、and assess the risks of material misstatement of the consolidated financial statements,whether due to fraud or error,design and perform audit procedures responsive to those risks,and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.The risk of not detecting
31、 a material misstatement resulting from fraud is higher than for one resulting from error,as fraud may involve collusion,forgery,intentional omissions,misrepresentations,or the override of internal control.Obtain an understanding of internal control relevant to the audit in order to design audit pro
32、cedures that are appropriate in the circumstances,but not for the purpose of expressing an opinion on the effectiveness of the Groups internal control.Evaluate the appropriateness of accounting policies used in the preparation of the consolidated financial statements and the reasonableness of accoun
33、ting estimates and related disclosures made by management.Conclude on the appropriateness of managements use of the going concern basis of accounting and,based on the audit evidence obtained,whether a material uncertainty exists related to events or conditions that may cast significant doubt on the
34、Groups ability to continue as a going concern.If we conclude that a material uncertainty exists,we are required to draw attention in our auditors report to the related disclosures in the consolidated financial statements or,if such disclosures are inadequate,to modify our opinion.Our conclusions are
35、 based on the audit evidence obtained up to the date of our auditors report.However,future events or conditions may cause the Group to cease to continue as a going concern.Evaluate the overall presentation,structure and content of the consolidated financial statements,including the disclosures,and w
36、hether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on
37、the consolidated financial statements.We are responsible for the direction,supervision and performance of the group audit.We remain solely responsible for our audit opinion.We communicate with those charged with governance regarding,among other matters,the planned scope and timing of the audit and s
38、ignificant audit findings,including any significant deficiencies in internal control that we identify during our audit.We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence,and communicate with them all relation
39、ships and other matters that may reasonably be thought to bear on our independence,and where applicable,related safeguards.From the matters communicated with those charged with governance,we determine those matters that were of most significance in the audit of the consolidated financial statements
40、of the current period and are therefore the key audit matters.We describe these matters in our auditors report unless law or regulation precludes public disclosure about the matter or when,in extremely rare circumstances,we determine that a matter should not be communicated in our report because the
41、 adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.The engagement partner on the audit resulting in this independent auditors report is Jae-Yeon Kim.Seoul,Korea March 8,2023 This report is effective as of March 8,2023,the aud
42、it report date.Certain subsequent events or circumstances,which may occur between the audit report date and the time of reading this report,could have a material impact on the accompanying consolidated financial statements and notes thereto.Accordingly,the readers of the audit report should understa
43、nd that the above audit report has not been updated to reflect the impact of such subsequent events or circumstances,if any.5 HYUNDAI MOTOR COMPANY AND ITS SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED DECEMBER 31,2022 AND 2021 The accompanying consolidated financial s
44、tatements,including all footnote disclosures,were prepared by,and are the responsibility of,the Company.Chang,Jae Hoon Chief Executive Officer HYUNDAI MOTOR COMPANY Main Office Address:(Road Name Address)12,Heolleung-ro,Seocho-gu,Seoul (Phone Number)02-3464-1114 6 HYUNDAI MOTOR COMPANY AND ITS SUBSI
45、DIARIES CONSOLIDATED STATEMENTS OF FINANCIAL POSITION AS OF DECEMBER 31,2022 AND DECEMBER 31,2021 ASSETS NOTES December 31,2022 December 31,2021 (In millions of Korean Won)Current assets:Cash and cash equivalents 20 20,864,879 12,795,554 Short-term financial instruments 20 5,774,597 6,949,333 Other
46、financial assets 5,20 5,934,745 12,396,646 Trade notes and accounts receivable 3,20 4,279,057 3,147,296 Other receivables 4,20 4,458,689 4,220,970 Inventories 6 14,291,216 11,645,641 Current tax assets 85,867 47,346 Financial services receivables 14,20 38,037,368 35,252,606 Non-current assets classi
47、fied as held for sale 8 22,302 28,121 Other assets 7,20 2,640,553 2,081,853 Total current assets 96,389,273 88,565,366 Non-current assets:Long-term financial instruments 20 112,557 306,410 Other financial assets 5,20 3,889,776 3,539,286 Long-term trade notes and accounts receivable 3,20 179,781 137,
48、157 Other receivables 4,20 821,050 741,168 Property,plant and equipment 9,40 36,153,190 35,543,083 Investment property 10,40 144,450 156,656 Intangible assets 11,40 6,102,377 5,846,986 Investments in joint ventures and associates 13 25,199,437 22,429,117 Net defined benefit assets 35 837,502 219,721
49、 Deferred tax assets 34 3,237,309 2,224,833 Financial services receivables 14,20 52,326,478 45,776,526 Investments in operating leases 15 27,681,534 26,327,996 Right-of-use assets 12 1,117,293 940,826 Other assets 7,20 1,550,455 1,191,284 Total non-current assets 159,353,189 145,381,049 Total assets
50、 255,742,462 233,946,415 (Continued)7 HYUNDAI MOTOR COMPANY AND ITS SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL POSITION AS OF DECEMBER 31,2022 AND DECEMBER 31,2021 LIABILITIES AND EQUITY NOTES December 31,2022 December 31,2021 (In millions of Korean Won)Current liabilities:Trade notes and acc
51、ounts payable 20 10,797,065 9,155,255 Other payables 20,39 8,277,891 6,335,645 Short-term borrowings 16,20,40 11,366,480 13,087,836 Current portion of long-term debt and debentures 16,20,40 25,574,131 20,578,902 Income tax payable 1,008,506 751,929 Provisions 17 8,102,596 6,664,647 Other financial l
52、iabilities 18,20 99,144 55,187 Lease liabilities 12,20 405,053 167,266 Non-current liabilities classified as held for sale 8 5,365 -Other liabilities 19,20,27 8,600,241 7,440,120 Total current liabilities 74,236,472 64,236,787 Non-current liabilities:Long-term other payables 20,39 726,115 769,487 De
53、bentures 16,20,40 62,960,060 63,458,809 Long-term debt 16,20,40 12,285,149 10,667,731 Net defined benefit liabilities 35 61,861 79,165 Provisions 17 4,327,985 4,214,137 Other financial liabilities 18,20 262,518 87,258 Deferred tax liabilities 34 5,027,741 3,689,328 Lease liabilities 12,20 705,751 78
54、3,306 Other liabilities 19,20,27 4,252,265 3,344,618 Total non-current liabilities 90,609,445 87,093,839 Total liabilities 164,845,917 151,330,626 Equity:Capital stock 21 1,488,993 1,488,993 Capital surplus 22 4,241,303 4,070,260 Other capital items 23 (1,713,928)(1,968,385)Accumulated other compreh
55、ensive loss 24 (1,620,682)(1,772,601)Retained earnings 25 79,953,601 73,167,855 Equity attributable to the owners of the Company 82,349,287 74,986,122 Non-controlling interests 8,547,258 7,629,667 Total equity 90,896,545 82,615,789 Total liabilities and equity 255,742,462 233,946,415 (Concluded)See
56、accompanying notes to the consolidated financial statements.8 HYUNDAI MOTOR COMPANY AND ITS SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME FOR THE YEARS ENDED DECEMBER 31,2022 AND 2021 NOTES 2022 2021 (In millions of Korean Won,except per share amounts)Sales 27,40 142,527,535 117,610,626 Cost of sal
57、es 32 114,209,483 95,680,131 Gross profit 28,318,052 21,930,495 Selling and administrative expenses 28,32 18,498,283 15,251,546 Operating profit 9,819,769 6,678,949 Gain on investments in joint ventures and associates,net 29 1,556,583 1,303,365 Finance income 30 1,218,813 912,802 Finance expenses 30
58、 1,054,228 548,410 Other income 31 2,257,113 1,447,261 Other expenses 31,32 2,850,107 1,834,405 Profit before income tax 10,947,943 7,959,562 Income tax expense 34 2,964,329 2,266,485 Profit for the year 7,983,614 5,693,077 Profit attributable to:Owners of the Company 7,364,364 4,942,356 Non-control
59、ling interests 619,250 750,721 Earnings per share attributable to the owners of the Company:33 Basic earnings per share:Common stock 28,521 18,979 1st preferred stock 28,207 19,002 Diluted earnings per share:Common stock 28,521 18,979 1st preferred stock 28,207 19,002 See accompanying notes to the c
60、onsolidated financial statements.9 HYUNDAI MOTOR COMPANY AND ITS SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31,2022 AND 2021 2022 2021 (In millions of Korean Won)Profit for the year 7,983,614 5,693,077 Other comprehensive income(loss):Items that will no
61、t be reclassified subsequently to profit or loss:Profit(loss)on financial assets measured at FVOCI,net (223,420)102,137 Remeasurements of defined benefit plans 391,308 175,392 Changes in retained earnings of equity-accounted investees,net 164,475 77,482 Changes in share of OCI of equity-accounted in
62、vestees,net (175,059)21,803 157,304 376,814 Items that may be reclassified subsequently to profit or loss:Loss on financial assets measured at FVOCI,net (36,545)(6,448)Gain on valuation of cash flow hedge derivatives,net 218,377 5,015 Changes in share of OCI of equity-accounted investees,net 10,008
63、546,504 Gain on foreign operations translation,net 701,718 1,246,177 893,558 1,791,248 Total other comprehensive income 1,050,862 2,168,062 Total comprehensive income 9,034,476 7,861,139 Comprehensive income attributable to:Shareholders of the Company 8,234,396 6,938,637 Non-controlling interests 80
64、0,080 922,502 Total comprehensive income 9,034,476 7,861,139 See accompanying notes to the consolidated financial statements.10 HYUNDAI MOTOR COMPANY AND ITS SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31,2022 AND 2021 Capital stock Capital surplus Other ca
65、pital items Accumulated other comprehensive income(loss)Retained earnings Total equity attributable to the owners of the Company Non-controlling interests Total equity (In millions of Korean Won)Balance at January 1,2021 1,488,993 4,190,093 (1,700,592)(3,409,661)68,911,800 69,480,633 6,860,337 76,34
66、0,970 Comprehensive income:Profit for the period -4,942,356 4,942,356 750,721 5,693,077 Gain(loss)on financial assets measured at FVOCI,net -(21,021)114,718 93,697 1,992 95,689 Gain(loss)on valuation of cash flow hedge derivatives,net -(47,902)-(47,902)52,917 5,015 Changes in valuation of equity-acc
67、ounted investees,net -544,170 77,482 621,652 24,137 645,789 Remeasurements of defined benefit plans -167,021 167,021 8,371 175,392 Gain on foreign operations translation,net -1,161,813 -1,161,813 84,364 1,246,177 Total comprehensive income -1,637,060 5,301,577 6,938,637 922,502 7,861,139 Transaction
68、s with owners,recorded directly in equity:Payment of cash dividends -(1,045,775)(1,045,775)(140,854)(1,186,629)Increase in paid-in capital of subsidiaries by issuing stock -19,819 -19,819 165,311 185,130 Acquisition of investment of subsidiaries -(164,567)-(164,567)65,966 (98,601)Disposals of invest
69、ment of subsidiaries -(71,634)(71,634)Purchases of treasury stocks -(305,337)-(305,337)-(305,337)Disposals of treasury stocks -24,915 37,544 -62,459 -62,459 Repayment of hybrid bonds -(150,323)(150,323)Others -253 253 (21,638)(21,385)Total transactions with owners,recorded directly in equity -(119,8
70、33)(267,793)-(1,045,522)(1,433,148)(153,172)(1,586,320)Balance at December 31,2021 1,488,993 4,070,260 (1,968,385)(1,772,601)73,167,855 74,986,122 7,629,667 82,615,789 (Continued)11 HYUNDAI MOTOR COMPANY AND ITS SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 3
71、1,2022 AND 2021 (Concluded)See accompanying notes to the consolidated financial statements.Capital stock Capital surplus Other capital items Accumulated other comprehensive income(loss)Retained earnings Total equity attributable to the owners of the Company Non-controlling interests Total equity (In
72、 millions of Korean Won)Balance at January 1,2022 1,488,993 4,070,260 (1,968,385)(1,772,601)73,167,855 74,986,122 7,629,667 82,615,789 Comprehensive income:Profit for the period -7,364,364 7,364,364 619,250 7,983,614 Gain(loss)on financial assets measured at FVOCI,net -(430,012)174,758 (255,254)(4,7
73、11)(259,965)Gain on valuation of cash flow hedge derivatives,net -169,796 -169,796 48,581 218,377 Changes in valuation of equity-accounted investees,net -(160,325)164,475 4,150 (4,726)(576)Remeasurements of defined benefit plans -378,880 378,880 12,428 391,308 Gain on foreign operations translation,
74、net -572,460 -572,460 129,258 701,718 Total comprehensive income -151,919 8,082,477 8,234,396 800,080 9,034,476 Transactions with owners,recorded directly in equity:Payment of cash dividends -(1,298,212)(1,298,212)(56,800)(1,355,012)Increase in paid-in capital of subsidiaries by issuing stock -560 5
75、60 Acquisition of investment of subsidiaries -273,271 273,271 Disposals of investment of subsidiaries -(83,094)(83,094)Purchases of treasury stocks -(193,452)-(193,452)-(193,452)Disposals of treasury stocks -174,346 447,909 -622,255 -622,255 Others -(3,303)-1,481 (1,822)(16,426)(18,248)Total transac
76、tions with owners,recorded directly in equity -171,043 254,457 -(1,296,731)(871,231)117,511 (753,720)Balance at December 31,2022 1,488,993 4,241,303 (1,713,928)(1,620,682)79,953,601 82,349,287 8,547,258 90,896,545 12 HYUNDAI MOTOR COMPANY AND ITS SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FO
77、R THE YEARS ENDED DECEMBER 31,2022 AND 2021 NOTES 2022 2021 (In millions of Korean Won)Cash flows from operating activities:Cash generated from operations:36 Profit for the year 7,983,614 5,693,077 Adjustments 20,255,938 15,777,589 Changes in operating assets and liabilities (13,922,657)(20,287,776)
78、14,316,895 1,182,890 Interest received 867,192 449,789 Interest paid (2,695,029)(1,905,945)Dividend received 531,902 213,735 Income tax paid (2,393,649)(1,116,885)Net cash provided by(used in)operating activities 10,627,311 (1,176,416)Cash flows from investing activities:Changes in short-term financ
79、ial instruments,net 1,082,254 1,326,872 Changes in other financial assets(current),net 5,452,691 225,974 Decrease in other financial assets(non-current)41,521 259,202 Collection of other receivables 60,779 67,437 Disposals of long-term financial instruments 122,124 35,183 Proceeds from disposals of
80、property,plant and equipment 136,870 113,008 Proceeds from disposals of intangible assets 7,357 20,261 Proceeds from disposals of investment in joint ventures and associates 19,115 8,873 Acquisitions of subsidiaries,net of cash acquired (89,167)(294,210)Increases in other financial assets(non-curren
81、t)(276,728)(212,964)Increases in other receivables (80,170)(69,563)Purchases of long-term financial instruments (63,612)(279,471)Acquisitions of property,plant and equipment (4,014,969)(4,304,334)Acquisitions of intangible assets (1,718,733)(1,556,993)Acquisitions of investments in joint ventures an
82、d associates (1,696,266)(565,528)Cash outflows from changes in consolidation (197,188)(125,611)Others 10,627 169,285 Net cash used in investing activities (1,203,495)(5,182,579)(Continued)13 HYUNDAI MOTOR COMPANY AND ITS SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER
83、 31,2022 AND 2021 NOTES 2022 2021 (In millions of Korean Won)Cash flows from financing activities:Proceeds from short-term borrowings 3,388,510 3,769,996 Proceeds from long-term debt and debentures 30,089,495 40,688,506 Proceeds from capital contribution from non-controlling interest 341,864 165,311
84、 Acquisitions of subsidiaries -(300,670)Repayment of short-term borrowings (6,070,109)(4,390,047)Repayment of long-term debt and debentures (27,086,324)(29,164,478)Repayment of lease liabilities (195,245)(185,158)Purchases of treasury stocks (193,451)(305,337)Dividends paid (1,354,996)(1,186,800)Rep
85、ayment of hybrid bonds -(150,323)Others (244,243)(148,714)Net cash provided by(used in)financing activities (1,324,499)8,792,286 Effect of exchange rate changes on cash and cash equivalents (29,992)500,127 Net increase in cash and cash equivalents 8,069,325 2,933,418 Cash and cash equivalents,beginn
86、ing of the year 12,795,554 9,862,136 Cash and cash equivalents,end of the year 20,864,879 12,795,554 (Concluded)See accompanying notes to the consolidated financial statements.14 HYUNDAI MOTOR COMPANY AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31
87、,2022 AND 2021 1.GENERAL:Hyundai Motor Company(the“Company”or“Parent Company”)was incorporated in December 1967,under the laws of the Republic of Korea.The Company and its subsidiaries(the“Group”)manufacture and distribute motor vehicles and parts,operate vehicle financing and credit card processing
88、,and manufacture trains.The shares of the Company have been listed on the Korea Exchange since June 1974,and the Global Depositary Receipts issued by the Company have been listed on the London Stock Exchange and Luxembourg Stock Exchange.As of December 31,2022,the major shareholders of the Company a
89、re Hyundai MOBIS(45,782,023 shares,21.43%)and Mr.Chung,Mong Koo(11,395,859 shares,5.33%).(1)The Groups consolidated subsidiaries as of December 31,2022 are as follows.Name of subsidiaries Nature of business Location Ownership percentage Indirect ownership HYUNDAI CAPITAL SERVICES,INC.Financing Korea
90、 59.68%HYUNDAI CARD CO.,LTD.(*1)36.96%HYUNDAI ROTEM COMPANY(*2)Manufacturing 33.77%HYUNDAI KEFICO CORPORATION 100.00%HYUNDAI PARTECS 56.00%Hyundai NGV Engineering 53.66%MAINtrans company Services 100.00%HYUNDAI ROTEM COMPANY 100.00%Rotem SRS Co.,Ltd.100.00%JEONBUK HYUNDAI MOTORS FC CO.,LTD Football
91、club 100.00%AirPlug Inc.R&D and Sales 99.32%42dot Inc.(*5)66.08%Movia Inc.Transporting 100.00%42dot 100.00%Hyundai Motor America(HMA)Sales USA 100.00%Hyundai Capital America(HCA)Financing 80.00%HMA 80.00%Hyundai Motor Manufacturing Alabama,LLC(HMMA)Manufacturing 100.00%HMA 100.00%Hyundai Motor Group
92、 Metaplant America,LLC(HMGMA)60.00%HMA 60.00%Hyundai Translead(HT)100.00%Stamped Metal American Research Technology,Inc.(SMARTI)Holding company 72.45%HMA 72.45%SMART Alabama,LLC(SMART)Manufacturing 100.00%SMARTI 100.00%Hyundai America Technical Center,Inc.(HATCI)R&D 100.00%Genesis Motor America LLC
93、Sales 100.00%HMA 100.00%Hyundai Rotem USA Corporation Manufacturing 100.00%HYUNDAI ROTEM COMPANY 100.00%Hyundai Motor Investment,Inc.Investment 100.00%42 Air,Inc R&D and Sales 100.00%42dot 100.00%HYUNDAI AUTO CANADA CORP.(HACC)Sales Canada 100.00%HMA 100.00%HYUNDAI AUTO CANADA CAPTIVE INSURANCE INC.
94、(HACCI)Insurance 100.00%Hyundai Capital Canada Inc.(HCCA)Financing 70.00%HYUNDAI CAPITAL SERVICES,INC.20.00%Hyundai Capital Lease Inc.(HCLI)100.00%HCCA 100.00%HK Lease Funding LP 100.00%HCLI 99.99%,HCCA Funding Inc.0.01%HCCA Funding Inc.100.00%HCLI 100.00%HCCA Funding Two Inc.100.00%HCCA 100.00%15 N
95、ame of subsidiaries Nature of business Location Ownership percentage Indirect ownership HK Retail Funding LP Financing Canada 100.00%HCCA 99.99%,HCCA Funding Two Inc 0.01%HYUNDAI MOTOR INDIA LIMITED(HMI)Manufacturing India 100.00%HYUNDAI MOTOR INDIA ENGINEERING PRIVATE LIMITED(HMIE)R&D 100.00%HMI 10
96、0.00%HYUNDAI INDIA INSURANCE BROKING PRIVATE LIMITED(HIIB)Insurance 100.00%HYUNDAI CAPITAL INDIA PRIVATE LIMITED(HCI)Financing 100.00%HYUNDAI CAPITAL SERVICES,INC.100.00%Hyundai Mobility Japan Co.,Ltd.(HMJ)(*3)Sales Japan 100.00%Hyundai Mobility Japan R&D Center Co.,Ltd.(HMJ R&D)(*3)R&D 100.00%Beiji
97、ng Jingxian Motor Safeguard Service Co.,Ltd.(BJMSS)Sales China 100.00%Beijing Jingxianronghua Motor Sale Co.,Ltd.100.00%BJMSS 100.00%Genesis Motor Sales(Shanghai)Co.,LTD.100.00%Hyundai Millennium(Beijing)Real Estate Development Co.,Ltd.Real estate development 99.00%CMEs 99.00%Rotem Equipments(Beijin
98、g)Co.,Ltd.Sales 100.00%HYUNDAI ROTEM COMPANY 100.00%KEFICO Automotive Systems(Beijing)Co.,Ltd.Manufacturing 100.00%HYUNDAI KEFICO CORPORATION 100.00%KEFICO Automotive Systems(Chongqing)Co.,Ltd.90.00%HYUNDAI KEFICO CORPORATION 90.00%Hyundai Truck&Bus(China)Co.,Ltd.(HTBC)100.00%HYUNDAI THANH CONG VIET
99、NAM AUTO MANUFACTURING CORPORATION(HTMV)(*1)Vietnam 50.00%HYUNDAI THANH CONG COMMERCIAL VEHICLE JOINT STOCK COMPANY(HTCV)(*1)Sales 50.00%HYUNDAI THANH CONG VIET NAM AUTO JOINT VENTURE JOINT STOCK COMPANY(HTV)(*1)50.00%HYUNDAI KEFICO VIETNAM COMPANY LIMITED Manufacturing 100.00%HYUNDAI KEFICO CORPORA
100、TION 100.00%HYUNDAI MOTOR COMPANY AUSTRALIA PTY LIMITED(HMCA)Sales Australia 100.00%HYUNDAI MOTOR PHILIPPINES,INC.(HMPH)Philippines 99.99%HYUNDAI MOBILITY(THAILAND)CO.,LTD.(HMT)Thailand 100.00%PT HYUNDAI MOTOR MANUFACTURING INDONESIA(HMMI)Manufacturing Indonesia 99.99%PT HYUNDAI MOTORS INDONESIA(HMI
101、D)Sales 100.00%HMMI 0.01%PT Hyundai Solusi Mobilitas(HSM)99.99%HMID 99.99%PT.HYUNDAI CAPITAL INDONESIA(HCID)Financing 100.00%HYUNDAI CAPITAL SERVICES,INC.100.00%Hyundai Capital Australia Pty Limited Australia 100.00%HR MECHANICAL SERVICES LIMITED Services New Zealand 100.00%HYUNDAI ROTEM COMPANY 100
102、.00%Hyundai Motor Manufacturing Czech s.r.o.(HMMC)Manufacturing Czech 100.00%Hyundai Motor Czech s.r.o.(HMCZ)Sales 100.00%Hyundai Motor Europe GmbH(HME)Marketing and Sales Germany 100.00%Hyundai Motor Deutschland GmbH(HMD)Sales 100.00%16 Name of subsidiaries Nature of business Location Ownership per
103、centage Indirect ownership Hyundai Motor Europe Technical Center GmbH(HMETC)R&D Germany 100.00%Hyundai Motorsport GmbH(HMSG)Marketing 100.00%HME 100.00%Hyundai Capital Europe GmbH.Financing 100.00%HYUNDAI CAPITAL SERVICES,INC.100.00%HMCIS B.V.Holding company Netherlands 100.00%HMMR 1.65%Hyundai Moto
104、r Netherlands B.V.(HMNL)Sales 100.00%Hyundai Motor Manufacturing Rus LLC(HMMR)Manufacturing Russia 70.00%Hyundai Motor CIS Limited Liability Company(HMCIS)Sales 100.00%HMCIS B.V.100.00%Hyundai Mobility Lab Limited Liability Company.(HML)R&D 100.00%HMCIS 99.00%,HMMR 1.00%HYUNDAI CAPITAL SERVICES LIMI
105、TED LIABILITY COMPANY Financing 100.00%Hyundai Capital Europe 100.00%Limited liability company Hyundai Truck&Bus Rus(HTBR)Sales 100.00%Hyundai Assan Otomotiv Sanayi Ve Ticaret Anonim Sirketi(HAOSVT)Manufacturing Turkiye 97.00%Hyundai EURotem Demiryolu Araclari Sanayi ve Ticaret A.S 50.50%HYUNDAI ROT
106、EM COMPANY 50.50%Hyundai Rotem Company Hyundai EUROTEM Demiryolu Araclari SAN.VE TIC.A.S ORTAK GIRISIMI Sales 100.00%HYUNDAI ROTEM COMPANY 65.00%,Hyundai EURotem A.S.35.00%Hyundai Rotem Company-Hyundai EUROTEM Mahmutbey Projesi ORTAK GIRISIMI 100.00%HYUNDAI ROTEM COMPANY 85.00%,Hyundai EURotem A.S.1
107、5.00%Rotem SRS Ukraine LLC.Services Ukraine 100.00%Rotem SRS Co.,Ltd.100.00%Rotem SRS Egypt LLC.Egypt 98.00%Rotem SRS Co.,Ltd.98.00%HYUNDAI MOTOR UK LIMITED(HMUK)Sales UK 100.00%HYUNDAI MOTOR COMPANY ITALY S.R.L.(HMCI)Italy 100.00%HYUNDAI MOTOR ESPANA,S.L.U.(HMES)Spain 100.00%HYUNDAI MOTOR FRANCE(HM
108、F)France 100.00%Hyundai Motor Poland sp.z o.o.(HMP)Poland 100.00%GENESIS MOTOR EUROPE GmbH(GME)Germany 100.00%GENESIS MOTOR UK LIMITED(GMUK)UK 100.00%GME 100.00%GENESIS MOTOR SWITZERLAND AG(GMCH)Switzerland 100.00%GENESIS MOTOR DEUTSCHLAND GmbH(GMD)Germany 100.00%Hyundai Hydrogen Mobility AG(HHM)Swi
109、tzerland 75.00%Hyundai Hydrogen Mobility Germany GmbH(HHMG)Germany 100.00%HHM 100.00%HYUNDAI MOTOR DE MEXICO S DE RL DE CV(HMM)Mexico 100.00%HT 0.01%Hyundai de Mexico,SA DE C.V.,(HYMEX)Manufacturing 99.99%HT 99.99%HYUNDAI KEFICO MEXICO,S.DE R.L.DE C.V.100.00%HYUNDAI KEFICO CORPORATION 100.00%Hyundai
110、 Rio Vista,Inc.Real estate development USA 100.00%HT 100.00%HYUNDAI MOTOR BRASIL MONTADORA DE AUTOMOVEIS LTDA(HMB)Manufacturing Brazil 100.00%Hyundai Capital Brasil Servicos De Assistencia Financeira Ltda.Financing 100.00%HYUNDAI CAPITAL SERVICES,INC.100.00%Hyundai Rotem Brasil Industria E Comercio
111、De Trens Ltda.Manufacturing 100.00%HYUNDAI ROTEM COMPANY 100.00%17 Name of subsidiaries Nature of business Location Ownership percentage Indirect ownership HMS SERVICOS DE MOBILIDADE LTDA.(*4)Holding company Brazil 99.99%HMB 99.99%China Millennium Corporations(CMEs)Cayman Islands 59.60%China Mobilit
112、y Fund,L.P.Investment 72.00%ZER01NE Accelerator Investment Fund No.1 99.00%Autopia Sixty-fifth Seventy-Fifth Asset Securitization Specialty Company(*1)Financing 0.50%HYUNDAI CAPITAL SERVICES,INC.0.50%Zavurov First Co.,Ltd.(*1)0.00%HYUNDAI CAPITAL SERVICES,INC.0.00%Super Series Sixth Fourteenth Secur
113、itization Specialty Co.,Ltd.(*1)0.50%HYUNDAI CARD CO.,LTD.0.50%Bluewalnut Co.,Ltd.100.00%HYUNDAI CARD CO.,LTD.100.00%MOCEAN Co.,Ltd Mobility Service 80.00%Hyundai Cha Funding,LLC Financing USA 100.00%HCA 100.00%Hyundai Lease Titling Trust 100.00%Hyundai HK Funding,LLC 100.00%Hyundai HK Funding Two,L
114、LC 100.00%Hyundai HK Funding Three,LLC 100.00%Hyundai HK Funding Four,LLC 100.00%Hyundai ABS Funding,LLC 100.00%HK Real Properties,LLC 100.00%Hyundai Auto Lease Offering,LLC 100.00%Hyundai HK Lease,LLC 100.00%Extended Term Amortizing Program,LLC 100.00%Hyundai Asset Backed Lease,LLC 100.00%HCA Excha
115、nge,LLC 100.00%Hyundai Protection Plan,Inc.Insurance 100.00%Hyundai Protection Plan Florida,Inc.100.00%Hyundai Capital Insurance Services,LLC 100.00%Hyundai Capital Insurance Company 100.00%Power Protect Extended Services,Inc.100.00%Power Protect Extended Services Florida,Inc.100.00%(*1)The Group is
116、 considered to have substantive control over the entities by virtue of an agreement or relationship with other investors,or relationship with structured entities.(*2)Even though the shareholding ratio of ownership is less than half,the Group has de facto control over the entity due to the relative s
117、ize of the voting rights held and the degree of share dispersion of other voting rights holders.(*3)During the year ended December 31,2022,the names of companies were changed from Hyundai Motor Japan Co.,Ltd.and Hyundai Motor Japan R&D Center Inc.to Hyundai Mobility Japan Co.,Ltd.and Hyundai Mobilit
118、y Japan R&D Center Co.,Ltd.,respectively.(*4)The name of company was changed from HMB Holding Participacoes Financeiras Ltda.to HMS SERVICOS DE MOBILIDADE LTDA.(*5)During the year ended December 31,2022,the Group acquired additional shares of 42dot Inc.and reclassified its shares to a subsidiary.Alt
119、hough the shareholding ratio of common stock is 66.08%,the shareholding ratio with voting rights is 55.90%considering the redeemable convertible preference share with voting rights issued.18 (2)Summarized financial position and results of operations of major consolidated subsidiaries as of and for t
120、he year ended December 31,2022 are as follows.Name of subsidiaries Assets Liabilities Sales Profit(loss)for the period (In millions of Korean Won)HYUNDAI CAPITAL SERVICES,INC.(*)38,647,454 33,017,783 4,436,122 437,087 HYUNDAI CARD CO.,LTD.(*)25,102,360 21,256,797 3,015,376 253,957 HYUNDAI ROTEM COMP
121、ANY(*)4,823,870 3,332,399 3,163,344 194,534 HYUNDAI KEFICO CORPORATION(*)2,118,244 1,151,710 2,255,354 86,781 HCA(*)65,174,141 57,784,155 12,392,502 416,542 HMA 13,534,367 8,484,603 33,684,033 2,549,423 HMMA 4,974,559 3,863,001 11,399,961 (807,997)HMI(*)4,932,560 2,071,012 9,230,238 710,908 HMMC 4,5
122、54,767 1,724,596 9,291,193 680,064 HME(*)2,604,267 2,528,135 14,302,787 12,792 HACC(*)1,811,550 1,003,562 4,146,159 102,258 HMB 1,801,019 1,195,946 3,314,994 97,250 HAOSVT 1,733,527 867,053 3,625,354 288,338 HMMR 1,242,120 406,509 965,782 (230,103)HMCA 1,074,603 874,474 2,371,422 45,739 (*)Based on
123、the subsidiarys consolidated financial statements Summarized financial position and results of operations of major consolidated subsidiaries as of and for the year ended December 31,2021 are as follows.Name of subsidiaries Assets Liabilities Sales Profit(loss)for the period (In millions of Korean Wo
124、n)HYUNDAI CAPITAL SERVICES,INC.(*)34,917,071 29,710,340 3,485,601 432,055 HYUNDAI CARD CO.,LTD.(*)21,654,608 18,026,253 2,744,902 314,139 HYUNDAI ROTEM COMPANY(*)4,107,183 2,838,938 2,872,512 51,412 HYUNDAI KEFICO CORPORATION(*)2,038,940 1,187,748 2,029,003 60,512 HCA(*)59,230,349 52,672,107 10,686,
125、865 1,050,250 HMA 8,578,534 5,929,588 22,883,130 1,028,470 HMMA 4,522,540 2,741,306 8,088,117 236,955 HMMC 4,406,392 1,852,526 7,426,329 417,537 HMI(*)4,310,031 1,782,415 7,339,424 437,395 HME(*)2,107,163 2,044,181 11,846,977 11,410 HACC(*)1,946,770 1,119,224 3,582,216 117,911 HMMR 1,931,470 959,020
126、 3,178,717 172,149 HAOSVT 1,469,527 887,896 3,021,886 198,490 HMB 1,387,554 913,764 2,074,018 41,020 HMCA 911,712 716,694 1,938,967 28,116 (*)Based on the subsidiarys consolidated financial statements (3)The financial statements of all subsidiaries used in the preparation of the consolidated financi
127、al statements are prepared for the same reporting periods as the Companys.19 (4)Summarized cash flows of non-wholly owned subsidiaries that have material non-controlling interests to the Group and subsidiaries of finance segment for the year ended December 31,2022 are as follows.Description HYUNDAI
128、CAPITAL SERVICES,INC.HYUNDAI CARD CO.,LTD.HCA HCCA HYUNDAI ROTEM COMPANY (In millions of Korean Won)Provided by(used in)operating activities (1,111,074)(618,906)(254,261)(1,257,295)716,229 Provided by(used in)investing activities (223,067)(70,359)28,172 (1,741)(429,045)Provided by(used in)financing
129、activities 2,572,598 2,379,211 389,229 1,274,970 (97,120)Effect of exchange rate changes on cash and cash equivalent -22,292 (542)(3,784)Net increase(decrease)in cash and cash equivalents 1,238,457 1,689,946 185,432 15,392 186,280 Beginning balance of cash and cash equivalents 509,170 579,444 368,19
130、1 72,402 319,728 Ending balance of cash and cash equivalents 1,747,627 2,269,390 553,623 87,794 506,008 Summarized cash flows of non-wholly owned subsidiaries that had material non-controlling interests to the Group and subsidiaries of finance segment for the year ended December 31,2021 are as follo
131、ws.Description HYUNDAI CAPITAL SERVICES,INC.HYUNDAI CARD CO.,LTD.HCA HCCA HYUNDAI ROTEM COMPANY (In millions of Korean Won)Provided by(used in)operating activities (367,733)(1,400,073)(7,321,554)(1,558,760)(62,714)Provided by(used in)investing activities (40,360)(105,567)(955,140)(642)146,142 Provid
132、ed by(used in)financing activities 510,859 1,310,731 8,132,339 1,549,724 (99,586)Effect of exchange rate changes on cash and cash equivalent 339 -37,398 6,651 (2,842)Net increase(decrease)in cash and cash equivalents 103,105 (194,909)(106,957)(3,027)(19,000)Beginning balance of cash and cash equival
133、ents 406,065 774,353 475,148 75,429 338,728 Ending balance of cash and cash equivalents 509,170 579,444 368,191 72,402 319,728 20 (5)Details of non-wholly owned subsidiaries of the Company that have material non-controlling interests as of and for the year ended December 31,2022 are as follows.Descr
134、iption HYUNDAI CAPITAL SERVICES,INC.HYUNDAI CARD CO.,LTD.HYUNDAI ROTEM COMPANY (In millions of Korean Won)Ownership percentage of non-controlling interests 40.32%63.04%66.23%Accumulated non-controlling interests 2,263,283 2,511,596 845,085 Profit attributable to non-controlling interests 171,675 160
135、,104 127,747 Dividends paid to non-controlling interests -56,753 -Details of non-wholly owned subsidiaries of the Company that had material non-controlling interests as of and for the year ended December 31,2021 are as follows.Description HYUNDAI CAPITAL SERVICES,INC.HYUNDAI CARD CO.,LTD.HYUNDAI ROT
136、EM COMPANY (In millions of Korean Won)Ownership percentage of non-controlling interests 40.32%63.04%66.23%Accumulated non-controlling interests 2,097,956 2,379,871 702,366 Profit attributable to non-controlling interests 170,930 198,059 28,968 Dividends paid to non-controlling interests 37,002 92,46
137、3 -(6)Financial support provided to consolidated structured entities As of December 31,2022,HYUNDAI CARD CO.,LTD.and HYUNDAI CAPITAL SERVICES,INC.,subsidiaries of the Company,have agreements that provide counterparties with rights of recourse in the event of default on the derivatives relating to as
138、set-backed securities issued by consolidated structured entities,Autopia Sixty-Eighth and Sixty-Ninth Asset Securitization Specialty Company,Super Series Sixth,Eighth,Ninth,Twelfth and Fourteenth Securitization Specialty Co.,Ltd.(7)Nature and risks associated with interests in unconsolidated structu
139、red entities 1)Nature of interests in unconsolidated structured entities of the Group as of December 31,2022 is as follows.Description Purpose Nature of business Method of funding Total assets(*)(In millions of Korean Won)Asset securitization SPC Fund raising through asset-securitization Fund collec
140、tion Asset Backed Securities and others 711,575 Investment fund Investment trust and others Fund management and operation,distribution of operating profit and others Beneficiary(Investment)certificates 6,877,841 Structured Finance Fund raising through project financing Project financing for construc
141、tion project and ship investment Project financing and others 24,128,653 (*)The financial information of unconsolidated structured entity includes unaudited amounts.21 Nature of interests in unconsolidated structured entities of the Group as of December 31,2021 is as follows.Description Purpose Natu
142、re of business Method of funding Total assets(*)(In millions of Korean Won)Asset securitization SPC Fund raising through asset-securitization Fund collection Asset Backed Securities and others 138,514 Investment fund Investment trust and others Fund management and operation,distribution of operating
143、 profit and others Beneficiary(Investment)certificates 9,874,543 Structured Finance Fund raising through project financing Project financing for construction project and ship investment Project financing and others 19,487,943 (*)The financial information of unconsolidated structured entity includes
144、unaudited amounts.2)Risks associated with interests in unconsolidated structured entities of the Group as of December 31,2022 are as follows.Description Financial support provided to the structured entity Maximum amount of exposure to loss of the structured entity Book value in the structured entity
145、 Method Purpose (In millions of Korean Won)Asset securitization SPC 70,208 Loan obligations Loan agreement(Credit line)77,000 Investment fund 238,424 Beneficiary certificates,Investment trust Invest agreement 238,424 Structured Finance 1,585,070 Loan obligations Loan agreement(Credit line)2,089,900
146、Risks associated with interests in unconsolidated structured entities of the Group as of December 31,2021 are as follows.Description Financial support provided to the structured entity Maximum amount of exposure to loss of the structured entity Book value in the structured entity Method Purpose (In
147、millions of Korean Won)Asset securitization SPC 18,797 Loan obligations Loan agreement(Credit line)24,000 Investment fund 178,552 Beneficiary certificates,Investment trust Invest agreement 178,552 Structured Finance 826,220 Loan obligations Loan agreement(Credit line)1,117,599 (8)Significant restric
148、tions on the subsidiaries As of December 31,2022,HYUNDAI CARD CO.,LTD.,a subsidiary of the Company,is subject to significant restrictions that require it to obtain consent from a nominated outside director recommended by non-controlling shareholders in the events of acquiring a company,entering into
149、 new business,providing guarantees,making investments in stocks or contracts beyond a certain amount and others.22 (9)Changes in consolidated subsidiaries Subsidiaries newly included in or excluded from consolidation during the year ended December 31,2022 are as follows.Changes Name of subsidiaries
150、Description Included Autopia Seventy-Third Asset Securitization Specialty Company Establishment Autopia Seventy-Fourth Asset Securitization Specialty Company Autopia Seventy-Fifth Asset Securitization Specialty Company Super Series Twelfth Securitization Specialty Co.,Ltd.Super Series Thirteenth Sec
151、uritization Specialty Co.,Ltd.Super Series Fourteenth Securitization Specialty Co.,Ltd.Hyundai Motor Group Metaplant America,LLC(HMGMA)Hyundai Hydrogen Mobility Germany GmbH(HHMG)HYUNDAI MOBILITY(THAILAND)CO.,LTD.(HMT)PT Hyundai Solusi Mobilitas(HSM)42dot Inc.Acquisition 42 Air,Inc Movia Inc.Exclude
152、d supernal,LLC Changed to equity method Super Series Fifth Securitization Specialty Co.,Ltd.Liquidation Autopia Sixty-fourth Asset Securitization Specialty Company KyoboAXA Private Tomorrow Securities Investment Trust No.12 Shinhan BNPP Private Corporate Security Investment Trust No.34 KB Leaders Pr
153、ivate Securities Fund1(Bond Mixed)Samsung ETF rotation Private Investment Trust 1 MoceanLab,Inc.HYUNDAI ROTEM MALAYSIA SDN BHD 23 2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:(1)Basis of consolidated financial statements preparation The consolidated financial statements have been prepared in accorda
154、nce with Korean International Financial Reporting Standards(“K-IFRS”),as prescribed in the Act on External Audit of Stock Companies,Etc in the Republic of Korea.The significant accounting policies used for the preparation of the consolidated financial statements are summarized below.These accounting
155、 policies are consistent with those applied to the consolidated financial statements as of and for the year ended December 31,2021,except for the new or amended accounting standards and interpretations described below.1)New and amended standards that have been applied from the year beginning on Janu
156、ary 1,2022 are as follows.The Group applied Proceeds before Intended Use(Amendments to K-IFRS 1016 Property,Plant and Equipment),Cost of Fulfilling a Contract(Amendments to K-IFRS 1037 Provisions,Contingent Liabilities and Contingent Assets),Annual Improvements to IFRS Standards 2018-2020,Reference
157、to the Conceptual Framework(Amendments to K-IFRS 1103 Business Combinations)and Covid-19-Related Rent Concessions beyond 30 June 2021(Amendments to K-IFRS 1116 Leases)for the first time on January 1,2022.These standards and other new accounting standards effective from January 1,2022 do not have a m
158、aterial impact on the Groups consolidated financial statements.2)A number of new standards are effective for annual periods beginning after January 1,2022 and earlier application is permitted;however,the Group has not early adopted them in preparing these consolidated financial statements.The Group
159、is currently evaluating the effect of the following new or amended standards and interpretations,if any,to the consolidated financial statements,however,those standards are not expected to have a significant impact on the Groups consolidated financial statements.-Classification of Liabilities as Cur
160、rent or Non-current(K-IFRS 1001 Presentation of Financial Statements)-K-IFRS 1117 Insurance Contracts and its amendments-Disclosure of Accounting policies(K-IFRS 1001 Presentation of Financial Statements)-Definition of Accounting estimate(K-IFRS 1008 Accounting Policies,Changes in Accounting Estimat
161、es and Errors)-Deferred Tax related to Assets and Liabilities arising from a Single Transaction(K-IFRS 1012 Income Taxes)-Disclosure of Gains and Losses on Valuation of Financial Liabilities with Conditions for Adjustment of Exercise Price(K-IFRS 1001 Presentation of Financial Statements)The consoli
162、dated financial statements were approved by the Board of Directors on January 26,2023 and are expected to be submitted for the Companys annual general meeting of shareholders.(2)Basis of measurement The consolidated financial statements have been prepared on the historical cost basis except as other
163、wise stated in the accounting policies below.Historical cost is usually measured at the fair value of the consideration given to acquire the assets.(3)Basis of consolidations The consolidated financial statements incorporate the financial statements of the Company and entities(including structured e
164、ntities)controlled by the Company(or its subsidiaries).Control is achieved when the Company:has power over the investee;is exposed,or has rights,to variable returns from its involvement with the investee;and has the ability to use its power to affect its returns.The Group reassesses whether or not i
165、t controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above.When the Group has less than a majority of the voting rights of an investee,it has power over the investee when the voting rights are sufficient to give it t
166、he practical ability to direct the relevant activities of the investee unilaterally.The Group 24 considers all relevant facts and circumstances in assessing whether or not the Groups voting rights in an investee are sufficient to give it power,including:the size of the Groups holding of voting right
167、s relative to the size and dispersion of holdings of the other vote holders;potential voting rights held by the Group,other vote holders or other parties;rights arising from other contractual arrangements;and any additional facts and circumstances that indicate that the Group has,or does not have,th
168、e current ability to direct the relevant activities at the time that decisions need to be made,including voting patterns at previous shareholders meetings.Income and expenses of subsidiaries acquired or disposed of during the period are included in the consolidated statements of comprehensive income
169、 from the effective date of acquisition and up to the effective date of disposal,as appropriate.When necessary,adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the Group.All intragroup transactions,balances,income and ex
170、penses are eliminated in full on consolidation.Non-controlling interests are presented in the consolidated statement of financial position within equity,separately from the equity of the owners of the Group.The carrying amount of non-controlling interests consists of the amount of those non-controll
171、ing interests at the initial recognition and the changes in shares of the non-controlling interests in equity since the date of the acquisition.Total comprehensive income is attributed to the owners of the Group and to the non-controlling interests even if the non-controlling interest has a deficit
172、balance.Changes in the Groups ownership interests in subsidiaries,without a loss of control,are accounted for as equity transactions.The carrying amounts of the Groups interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries.Any
173、difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity and attributed to owners of the Group.When the Group loses control of a subsidiary,the profit or loss on disposal is calculated
174、as the difference between(i)the aggregate of the fair value of the consideration received and the fair value of any retained interest and(ii)the previous carrying amount of the assets(including goodwill),liabilities of the subsidiary and any non-controlling interests.The amounts previously recognize
175、d in other comprehensive income and accumulated in equity are accounted for as if the Group had directly disposed of the relevant assets(i.e.,reclassified to profit or loss or transferred directly to retained earnings as specified by applicable K-IFRS).The fair value of any investment retained in th
176、e former subsidiary at the date when control is lost is regarded as the fair value on initial recognition for subsequent accounting under K-IFRS 1109 Financial Instruments:Recognition and Measurement or,when applicable,the cost on initial recognition of an investment in an associate or a joint ventu
177、re.(4)Business combination Acquisitions of businesses are accounted for using the acquisition method.The consideration transferred in a business combination is measured at fair value,which is calculated as the sum of the acquisition-date fair values of the assets transferred by the Group,liabilities
178、 incurred by the Group to the former owners of the acquiree and the equity interests issued by the Group in exchange for control of the acquiree.The consideration includes any asset or liability resulting from a contingent consideration arrangement and is measured at fair value.Acquisition-related c
179、osts are recognized in profit or loss as incurred.When a business combination is achieved in stages,the Groups previously held equity interest in the acquiree is remeasured at its fair value at the acquisition date(i.e.,the date when the Group obtains control)and the resulting gain or loss,if any,is
180、 recognized in profit or loss.Prior to the acquisition date,the amount resulting from changes in the value of its equity interest in the acquiree that have previously been recognized in other comprehensive income are reclassified to profit or loss where such treatment would be appropriate if that in
181、terest were directly disposed of.(5)Revenue recognition In accordance with K-IFRS 1115,all types of contracts recognize revenues by the 5-step revenue recognition model(1)identification of contract (2)identification of performance obligations (3)calculation of transaction price (4)allocation of tran
182、saction price to performance obligations (5)recognition of revenue when performance obligation is satisfied.25 1)Identification of performance obligations The Group operates businesses such as the manufacture and sale of automobiles and auto parts.In the automobile sales contracts with customers,ser
183、vices other than automobile sales are separately identified as performance obligations.2)Performance obligations satisfied at a point in time Revenue is recognized when the performance obligations under the terms of a contract with the Groups customer are satisfied,which generally occurs with the tr
184、ansfer of control of goods or services.3)Performance obligations satisfied over time In assessing whether the control over goods or services is transferred over time,the Group evaluates whether the customer simultaneously obtains and consumes the benefits provided by the Groups performance,whether t
185、he assets are controlled by the customer,and whether the assets created by the Group have no substitute purpose,and whether the Group is entitled to reimbursement of costs incurred to date,including a reasonable margin.4)Allocation of transaction price The Group allocates the transaction price to ea
186、ch of the performance obligations identified in a single contract in proportion to its stand-alone selling price.When the stand-alone selling price is not directly observable,the Group estimates the stand-alone selling price using the adjusted market assessment approach,or the expected cost plus a m
187、argin approach.5)Variable consideration The Group estimates the amount of consideration it will be entitled to receive using the method(either the expected value method or the most likely amount method)that provides the most accurate prediction.Variable consideration is included in the transaction p
188、rice only to the extent that it is highly probable that a significant reversal in the cumulative amount of revenue recognized will not occur in future periods.6)Significant financing element If the period between the transfer of the goods or services promised to the customer and the payment from the
189、 customer is within one year,the Group does not adjust the promised amount of consideration for the effects of a significant financing component,as a practical expedient.7)Construction contracts Where the outcome of a construction contract can be estimated reliably,the contract revenue and contract
190、costs associated with the construction contract are recognized as revenue and expenses,respectively,by reference to the stage of completion of the contract activity at the end of reporting period.The percentage of completion of a contract activity is reliably measured based on the proportion of cont
191、ract costs incurred for work performed to date relative to the estimated total contract costs,by surveys of work performed or by completion of a physical proportion of the contract work.Variations in contract work,claim and incentive payments are included to the extent that the amount can be measure
192、d reliably and its receipt is considered probable.Where the outcome of a construction contract cannot be estimated reliably,contract revenue is recognized to the extent of contract costs incurred that it is probable will be recoverable.Contract costs are recognized as expenses in the period in which
193、 they are incurred.When it is probable that total contract costs will exceed total contract revenue,the expected loss is recognized as an expense immediately.(6)Foreign currency translation The individual financial statements of each entity in the Group are prepared and presented in the currency of
194、the primary economic environment in which the entity operates(its functional currency).26 In preparing the financial statements of the individual entities,transactions occurring in currencies other than their functional currency(foreign currencies)are recorded using the exchange rate on the dates of
195、 the transactions.At the end of each reporting period,monetary items denominated in foreign currencies are translated using the exchange rate at the reporting period.Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the d
196、ate of the transaction.Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.Exchange differences resulting from settlement of assets or liabilities and translation of monetary items denominated
197、 in foreign currencies are recognized in profit or loss in the period in which they arise except for some exceptions.Foreign exchange gains or losses are classified in finance income(expenses)or other income(expenses)by the nature of the transaction or event.For the purpose of presenting the consoli
198、dated financial statements,assets and liabilities in the Groups foreign operations are translated into Won,using the exchange rates at the end of reporting period.Income and expense items are translated at the average exchange rate for the period,unless the exchange rate during the period has signif
199、icantly fluctuated,in which case the exchange rates at the dates of the transactions are used.The exchange differences arising,if any,are recognized in equity as other comprehensive income.Upon the disposal of a foreign operation,the cumulative amount of the exchange differences relating to that for
200、eign operation is reclassified from equity to profit or loss when the gain or loss on disposal is recognized.Any goodwill arising on the acquisition of a foreign operation and any fair value adjustments to the carrying amounts of assets and liabilities arising on the acquisition of that foreign oper
201、ation are treated as assets and liabilities of the foreign operation and translated at the exchange rate at the end of reporting period.(7)Financial Assets The Group classifies financial assets as financial assets measured at fair value through profit or loss,financial assets measured at amortized c
202、ost or financial assets measured at fair value through other comprehensive income according to the terms and purpose of acquisition.The Group determines the classification of a financial asset at initial recognition.All recognized financial assets are measured subsequently in their entirety at eithe
203、r amortized cost or fair value,depending on the classification of the financial assets.1)Classification of financial assets Debt instruments that meet the following conditions are measured subsequently at amortized cost:The financial asset is held within a business model whose objective is to hold f
204、inancial assets in order to collect contractual cash flows;and The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.Debt instruments that meet the following conditions are measur
205、ed subsequently at fair value through other comprehensive income(FVOCI):The financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling the financial assets;and The contractual terms of the financial asset give rise on specified d
206、ates to cash flows that are solely payments of principal and interest on the principal amount outstanding.By default,all other financial assets are measured subsequently at fair value through profit or loss(FVPL).Despite the foregoing,the Group may make the following irrevocable election/designation
207、 at initial recognition of a financial asset:The Group may irrevocably elect to present subsequent changes in fair value of an equity investment in other comprehensive income if certain criteria are met;and The Group may irrevocably designate a debt investment that meets the amortized cost or FVOCI
208、criteria as measured at FVPL if doing so eliminates or significantly reduces an accounting mismatch 27 1-1)Amortization cost and effective interest rate method The effective interest method is a method of calculating the amortized cost of a debt instrument and of allocating interest income over the
209、relevant period.The amortized cost of a financial asset is the amount at which the financial asset is measured at initial recognition minus the principal repayments,plus the cumulative amortisation using the effective interest method of any difference between that initial amount and the maturity amo
210、unt,adjusted for any loss allowance.The gross carrying amount of a financial asset is the amortized cost of a financial asset before adjusting for any loss allowance.Interest income is recognized using the effective interest method for debt instruments measured subsequently at amortized cost and at
211、FVOCI.1-2)Debt instruments classified as at FVOCI Corporate bonds are initially measured at fair value plus transaction costs.Subsequently,changes in the carrying amount of these corporate bonds as a result of foreign exchange gains and losses,impairment gains or losses,and interest income calculate
212、d using the effective interest method are recognized in profit or loss.The amounts that are recognized in profit or loss are the same as the amounts that would have been recognized in profit or loss if these corporate bonds had been measured at amortized cost.All other changes in the carrying amount
213、 of these corporate bonds are recognized in other comprehensive income and accumulated in investments revaluation reserve.When these corporate bonds are derecognized,the cumulative gains or losses previously recognized in other comprehensive income are reclassified to profit or loss.1-3)Equity instr
214、uments designated as at FVOCI On initial recognition,the Group may make an irrevocable election(on an instrument-by-instrument basis)to designate investments in equity instruments as at FVOCI.Designation at FVOCI is not permitted if the equity investment is held for trading or if it is contingent co
215、nsideration recognized by an acquirer in a business combination.Investments in equity instruments at FVOCI are initially measured at fair value plus transaction costs.Subsequently,they are measured at fair value with gains and losses arising from changes in fair value recognized in other comprehensi
216、ve income and accumulated in the investments revaluation reserve.The cumulative gain or loss will not be reclassified to profit or loss on disposal of the equity investments,instead,it is transferred to retained earnings.1-4)Financial assets measured at FVPL Financial assets that do not meet the cri
217、teria for being measured at amortized cost or FVOCI are measured at FVPL.Gains or losses arising from changes in the fair value of FVPL,dividends and interest income from the financial assets are recognized in profit or loss.2)Foreign exchange gain/loss The carrying amount of a financial asset desig
218、nated as a foreign currency is determined in foreign currencies and is translated at the spot exchange rate at the end of the reporting period.(8)Impairment of financial assets The Group recognizes a loss allowance for expected credit losses on investments in debt instruments that are measured at am
219、ortized cost or at FVOCI,lease receivables,trade receivables and contract assets,as well as on financial guarantee contracts.The amount of expected credit losses is updated at each reporting date to reflect changes in credit risk since initial recognition of the respective financial instrument.The G
220、roup always recognizes lifetime expected credit losses(ECL)for trade receivables,contract assets and lease receivables.The ECLs on these financial assets are estimated using a provision matrix based on the Groups historical credit loss experience and valuation of individual assets,adjusted for facto
221、rs that are specific to the debtors,general economic conditions and an assessment of forecast on present and future conditions reflecting time value of money where appropriate.For all other financial instruments,the Group recognizes lifetime ECLs when there has been a significant increase in credit
222、risk since initial recognition.However,if the credit risk on the financial instrument has not increased significantly since initial recognition,the Group measures the loss allowance for that financial instrument at an amount equal to 12-month ECLs.28 Lifetime ECL represents the expected credit losse
223、s that will result from all possible default events over the expected life of a financial instrument.In contrast,12-month ECL represents the portion of lifetime ECL that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date.1)
224、Significant increase in credit risk In assessing whether the credit risk on a financial instrument has increased significantly since initial recognition,the Group compares the risk of a default occurring on the financial instrument at the reporting date with the risk of a default occurring on the fi
225、nancial instrument at the date of initial recognition.In particular,the following information is taken into account when assessing whether credit risk has increased significantly since initial recognition:an actual or expected significant deterioration in the financial instruments external(if availa
226、ble)or internal credit rating;other significant increases in credit risk;2)Definition of default The Group believes that,based on past experience,if the debtor violates the terms of the contract,it is considered to constitute a default event for internal credit risk management purposes.3)Credit-impa
227、ired financial assets A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of that financial asset have occurred.Evidence that a financial asset is credit-impaired includes the following observable data:(a)significant financia
228、l difficulty of the issuer or the borrower;(b)a breach of contract,such as a default or past due event as defined by the Groups internal policy;4)Measurements and recognition of expected credit losses The measurement of ECLs is a function of the probability of default,loss given default(i.e.the magn
229、itude of the loss if there is a default)and the exposure at default.The assessment of the probability of default and loss given default is based on historical data adjusted by forward-looking information as described above.As for the exposure at default,for financial assets,this is represented by th
230、e assets gross carrying amount at the reporting date.For financial assets,the ECLs are estimated as the difference between all contractual cash flows that are due to the Group in accordance with the contract and all the cash flows that the Group expects to receive,discounted at the original effectiv
231、e interest rate.If the Group has measured the loss allowance for a financial instrument at an amount equal to lifetime ECLs in the previous reporting period,but determines at the current reporting date that the conditions for lifetime ECLs are no longer met,the Group measures the loss allowance at a
232、n amount equal to 12-month ECLs at the current reporting date,except for financial assets for which a simplified approach is used.The Group recognizes an impairment gain or loss in profit or loss for all financial instruments with a corresponding adjustment to their carrying amount through a loss al
233、lowance account,except for investments in debt instruments that are measured at FVOCI,for which the loss allowance is recognized in other comprehensive income and accumulated in the investment revaluation reserve,and does not reduce the carrying amount of the financial asset in the statement of fina
234、ncial position.29 (9)Derecognition of financial assets The Group derecognizes a financial asset only when the contractual rights to the cash flows from the asset expire,or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity.If
235、 the Group neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset,the Group recognizes its retained interest in the asset and an associated liability for amounts it may have to pay.If the Group retains substantially all the r
236、isks and rewards of ownership of a transferred financial asset,the Group continues to recognize the financial asset and also recognizes a collateralized borrowing for the proceeds received.On derecognition of a financial asset measured at amortized cost,the difference between the assets carrying amo
237、unt and the sum of the consideration received and receivable is recognized in profit or loss.In addition,on derecognition of an investment in a debt instrument classified as at FVOCI,the cumulative gain or loss previously accumulated in the investments revaluation reserve is reclassified to profit o
238、r loss.In contrast,on derecognition of an investment in equity instrument which the Group has elected on initial recognition to measure at FVOCI,the cumulative gain or loss previously accumulated in the investments revaluation reserve is not reclassified to profit or loss,but is transferred to retai
239、ned earnings.(10)Inventory Inventory is measured at the lower of cost or net realizable value.Inventory cost,including the fixed and variable manufacturing overhead cost,is calculated,using the moving average method,except for the cost for inventory in transit,which is determined by the specific ide
240、ntification method.(11)Investments in associates and joint ventures An associate is an entity over which the Group has significant influence,but not a joint venture or a subsidiary.Significant influence is the power to participate in the financial and operating policy decisions of the investee,but i
241、s not control or joint control over those policies.A joint venture is a joint arrangement,whereby the parties that have joint control of the arrangement have rights to the net assets of the joint arrangement.Joint control is the contractually agreed sharing of control of an arrangement,which exists
242、only when decisions about the relevant activities require unanimous consent of the parties sharing control.The investment in an associate or a joint venture is initially recognized at cost and accounted for using the equity method.Under the equity method,an investment in an associate or a joint vent
243、ure is initially recognized in the consolidated statement of financial position at cost and adjusted thereafter to recognize the Groups share of the profit or loss and other comprehensive income of the associate or the joint venture.When the Groups share of losses of an associate or a joint venture
244、exceeds the Groups interest in that associate or joint venture(which includes any long-term interests that,in substance,form part of the Groups net investment in the associate or the joint venture),the Group discontinues recognizing its share of further losses.Additional losses are recognized only t
245、o the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate or the joint venture.Investment in associate or joint venture is accounted for using the equity method from the date that the investee becomes the associate or joint venture.Any exc
246、ess of the cost of acquisition over the Groups share of the net fair value of the identifiable assets,liabilities and contingent liabilities of an associate or a joint venture recognized at the date of acquisition is recognized as goodwill,which is included within the carrying amount of the investme
247、nt.Any excess of the Groups share of the net fair value of the identifiable assets,liabilities and contingent liabilities over the cost of acquisition,after reassessment,is recognized immediately in profit or loss.The requirements of K-IFRS 1028 are applied to determine whether it is necessary to re
248、cognize any impairment loss with respect to the Groups investment in an associate or a joint venture.When there is any indication of impairment,the entire carrying amount of the investment(including goodwill)is tested for impairment in accordance with K-IFRS 1036 as a single asset by comparing its r
249、ecoverable amount(higher of value in use and fair value less costs of disposal)with its carrying amount.Any impairment loss recognized is not allocated to any asset,including goodwill that forms part of the carrying amount of the investment.Any reversal of that impairment loss is recognized in accor
250、dance with K-IFRS 1036 to the extent that the recoverable amount of the investment subsequently increases.30 Upon disposal of an associate or a joint venture that results in the Group losing significant influence over that associate or joint venture,any retained investment is measured at fair value
251、at that date and the fair value is regarded as its fair value on initial recognition as a financial asset in accordance with K-IFRS 1109.The difference between the previous carrying amount of the associate or joint venture attributable to the retained interest and its fair value is included in the d
252、etermination of the gain or loss on disposal of the associate or joint venture.In addition,the Group accounts for all amounts previously recognized in other comprehensive income in relation to that associate or joint venture on the same basis we would be required if that associate or joint venture h
253、ad directly disposed of the related assets or liabilities.Therefore,if a gain or loss previously recognized in other comprehensive income by that associate or joint venture would be reclassified to profit or loss on the disposal of the related assets or liabilities,the Group reclassifies the gain or
254、 loss from equity to profit or loss(as reclassification adjustment)when it loses significant influence over that associate or joint venture.When the Group reduces its ownership interest in an associate or a joint venture,but the Group continues to use the equity method,the Group reclassifies to prof
255、it or loss the proportion of the gain or loss that had previously been recognized in other comprehensive income relating to that reduction in ownership interest if that gain or loss would be reclassified to profit or loss on the disposal of the related assets or liabilities.In addition,the Group app
256、lies K-IFRS 1105 to a portion of investment in an associate or a joint venture that meets the criteria to be classified as held for sale.The Group continues to use the equity method when an investment in an associate becomes an investment in a joint venture or an investment in a joint venture become
257、s an investment in an associate.There is no remeasurement to fair value upon such changes in ownership interests.Unrealized gains from transactions between the Group and its associates or joint ventures are eliminated up to the shares in associate(joint venture)stocks.Unrealized losses are also elim
258、inated,unless evidence of impairment in assets transferred is produced.If the accounting policy of associates or joint ventures differs from the Group,financial statements are adjusted accordingly before applying equity method of accounting.(12)Property,plant and equipment Property,plant and equipme
259、nt is recognized if,and only if it is probable that future economic benefits associated with the asset will flow to the Group,and the cost of the asset can be measured reliably.After the initial recognition,property,plant and equipment is stated at cost less accumulated depreciation and accumulated
260、impairment losses.The cost includes any cost directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management and the initial estimate of the costs of dismantling and removing the item and restoring the site on
261、 which it is located.In addition,in case the recognition criteria are met,the subsequent costs will be added to the carrying amount of the asset or recognized as a separate asset,and the carrying amount of what was replaced is derecognized.Depreciation is computed using the straight-line method base
262、d on the estimated useful lives of the assets.The representative useful lives are as follows.Representative useful lives(years)Buildings and structures 12 50 Machinery and equipment 6 15 Vehicles 6 15 Dies,mold and tools 4 6 Office equipment 3 15 Other 2 20 The Group reviews the depreciation method,
263、the estimated useful lives and residual values of property,plant and equipment at the end of each annual reporting period.If expectations differ from previous estimates,the changes are accounted for as a change in accounting estimate.(13)Investment properties Investment properties are property held
264、to earn rentals or for capital appreciation or both.Investment properties are measured initially at its cost and transaction costs are included in the initial measurement.After initial recognition,the book value of investment properties is presented at the cost less accumulated depreciation and accu
265、mulated impairment losses.Subsequent costs are recognized as the carrying amount of the asset when,and only when it is probable that future economic benefits associated with the asset will flow to the Group,and the cost of the asset can be measured reliably,or recognized as a separate asset if appro
266、priate.The carrying amount of what was replaced is derecognized.31 Land is not depreciated,and other investment properties are depreciated using the straight-line method over the period from 20 to 50 years.The Group reviews the depreciation method,the estimated useful lives and residual values at th
267、e end of each annual reporting period.If expectations differ from previous estimates,the changes are accounted for as a change in accounting estimate.(14)Intangible assets 1)Goodwill Goodwill arising from a business combination is recognized as an asset at the time of obtaining control(the acquisiti
268、on date).Goodwill is measured as the excess of the aggregate of the consideration transferred,the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of the Groups previously held equity interest in the acquiree over the net of the acquisition-date amounts of t
269、he identifiable assets acquired and the liabilities assumed.If,after reassessment,the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed exceeds the aggregate of the consideration transferred,the amount of any non-controlling interest in the acquiree,
270、and the acquisition-date fair value of the Groups previously held equity interest in the acquiree,the excess is recognized immediately in profit or loss as a bargain purchase gain.Goodwill is not amortized,but tested for impairment at least annually.For purposes of impairment tests,goodwill is alloc
271、ated to those cash-generating units(“CGU”)of the Group expected to have synergies from the business combination.CGU that goodwill has been allocated is tested for impairment every year or when an event occurs that indicates impairment.If the recoverable amount of a CGU is less than its carrying amou
272、nt,the impairment will first decrease the goodwill allocated to that CGU and the remaining impairment will be allocated among other assets relative to its carrying value.Impairment recognized for goodwill may not be reversed.When disposing a subsidiary,related goodwill will be included in gain or lo
273、ss from disposal.2)Development costs The expenditure on research is recognized as an expense when it is incurred.The expenditure on development is recognized as an intangible asset,and amortization is computed using the straight-line method based on the estimated useful lives of the assets since the
274、 asset is available for use or sale.Research and development activities are conducted in phases of preceding research,development approval,product development and mass production.The Group generally recognizes intangible assets as development activities after the development approval phases which pr
275、oduct specification,release schedule,and sales plan are established.Expenditure incurred at the previous phase is recognised as an expense as it is considered as research activities when it is incurred.3)Intangible assets acquired separately Intangible assets are measured initially at cost,and are s
276、ubsequently measured at cost less accumulated amortization and accumulated impairment losses.Intangible assets are amortized by the straight-line method based on estimated useful lives from the date of availability.The Group reviews the estimated useful life and amortization method at the end of eac
277、h annual reporting period.If expectations differ from previous estimates,the changes are accounted for as a change in accounting estimate.Intangible assets assessed as having indefinite useful life such as club membership are subjected to impairment test at least once a year without amortization.The
278、 representative useful lives are as follows.Representative useful lives(years)Development costs 3,7 Industrial property rights 5 10 Software 3 7 Other 5 40 32 (15)Impairment of non-financial assets The Group assesses at the end of each reporting period whether there is any indication that an asset m
279、ay be impaired.If any such indication exists,the Group estimates the recoverable amount of the asset to determine the extent of the impairment loss.Recoverable amount is the higher of fair value less costs to sell and value in use.If the cash inflows of an individual asset are largely independent fr
280、om other assets or group of assets,the recoverable amount is measured for that individual asset;otherwise,it is measured for the cash generating unit(CGU)to which the asset belongs.An impairment loss in respect of goodwill is not reversed.For other assets,impairment loss is reversed if the recoverab
281、le amount increases in subsequent years,but only to the extent that the assets carrying amount does not exceed the carrying amount that would have been determined,net of depreciation or amortization,if no impairment loss had been recognized.Intangible assets with indefinite useful lives or intangibl
282、e assets not yet available for use are not amortized,but tested for impairment annually.(16)Non-current assets classified as held for sale The Group classifies a non-current asset(or disposal group)as held for sale,if its carrying amount will be recovered principally through a sale transaction rathe
283、r than through continuing use.For this to be the case,the asset(or disposal group)must be available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets(or disposal groups)and its sale must be highly probable.The management must be c
284、ommitted to a plan to sell the asset(or disposal group),and the sale should be expected to qualify for recognition as a completed sale within one year from the date of classification.Non-current assets(or disposal group)classified as held for sale are measured at the lower of their carrying amount a
285、nd fair value,less costs to sell.(17)Lease At contract inception,the Group assesses whether a contract is or contains a lease.A contract is,or contains,a lease if the contract conveys a right to control the use of an identified asset for a period of time in exchange for consideration.When assessing
286、whether the contract conveys a right to control the use of an identified asset,definition of a lease under K-IFRS 1116 has been applied.1)As a lessee At inception or effective date of change,the Group allocates the consideration in the contract to each lease on the basis of their relative stand-alon
287、e prices.However,for leases of properties in which it is a lessee,the Group has elected not to separate non-lease components and will instead account for the lease and non-lease components as a single lease component.The Group recognizes a right-of-use asset and lease liability at the lease commence
288、ment date.The right-of-use asset is initially measured at cost,which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date,plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asse
289、t or to restore the underlying asset or the site on which it is located,less any lease incentive received.The right-of use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term,unless the lease transfers ownership of the underlying a
290、sset to the Group by the end of the lease term or the cost of the right-of-use asset reflects that the Group will exercise a purchase option.In that case the right-of-use asset will be depreciated over the useful life of the underlying asset,which is determined on the same basis as those of property
291、 and equipment.In addition,the right-of use asset is periodically reduced by impairment losses,if any,and adjusted for certain remeasurements of the lease liability.The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date,discoun
292、ted using the interest rate implicit in the lease or,if that rate cannot be readily determined,the Groups incremental borrowing rate.Generally,the Group uses its incremental borrowing rate as the discount rate.When the lease liability is remeasured,a corresponding adjustment is made to the carrying
293、amount of the right-of-use asset,or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.33 The Group has elected not to recognize right-of-use assets and lease liabilities for leases of low-value assets and short-term leases.The Group recognizes th
294、e lease payments associated with these leases as an expense on a straight-line basis over the lease term.2)As a lessor The accounting policies applicable in the same period to the Group as a lessor are not different from those under K-IFRS 1116.When the Group acted as a lessor,it determined at lease
295、 inception whether each lease was a finance lease or an operating lease.To classify each lease,the Group made an overall assessment of whether the lease transferred substantially all of the risks and rewards incidental to ownership of the underlying asset.If this was the case,then the lease was a fi
296、nance lease;if not,then it was an operating lease.Amounts due from lessees under finance leases are recognized as receivables at the amount of the Groups net investment in the leases.Finance lease interest income is allocated to accounting periods so as to reflect an effective interest rate on the G
297、roups net investment outstanding in respect of the leases.Rental income from operating leases is recognized on a straight-line basis over the term of the relevant lease.Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the carrying amou
298、nt of investments in operating leases and recognized as expense on a straight-line basis over the lease term.(18)Borrowing costs Borrowing costs directly attributable to the acquisition,construction or production of qualifying assets are capitalized to the cost of those assets,until they are ready f
299、or their intended use or sale.A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use or sale.Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the b
300、orrowing costs eligible for capitalization.All other borrowing costs are recognized in profit or loss in the period in which they are incurred.(19)Retirement benefit plans The retirement benefit obligation recognized in the consolidated statements of financial position represents the present value o
301、f the defined benefit obligation,less the fair value of plan assets.Defined benefit obligations are calculated by an actuary using the Projected Unit Credit Method.The present value of the defined benefit obligations is measured by discounting estimated future cash outflows by the interest rate of h
302、igh-quality corporate bonds,with similar maturity as the expected post-employment benefit payment date.In countries where there is no deep market in such bonds,the market yields at the end of the reporting period on government bonds are used.The remeasurements of the net defined benefit liabilities(
303、assets)comprising actuarial gain or loss from changes in actuarial assumptions or differences between actuarial assumptions and actual results,the effect of the changes to the asset ceiling and return on plan assets,excluding amounts included in net interest on the net defined benefit liabilities(as
304、sets),are recognized in other comprehensive income of the consolidated statements of comprehensive income,which is immediately recognized as retained earnings.Those recognized in retained earnings will not be reclassified in profit or loss.Past service costs are recognized in profit and loss when th
305、e plan amendment occurs,and net interest is calculated by applying the discount rate determined at the beginning of the annual reporting period to the net defined benefit liabilities(assets).Defined benefit costs are composed of service cost(including current service cost,past service cost,as well a
306、s gains and losses on settlements),net interest expense(income),and remeasurements.The retirement benefit obligation recognized in the consolidated statements of financial position represents the actual deficit or surplus in the Groups defined benefit plans.Any surplus resulting from this calculatio
307、n is limited to the present value of any economic benefits available in the form of refunds from the plans or reductions in future contributions to the plans.Contributions to defined contribution retirement benefit plans are recognized as expenses when employees provide services eligible for payment
308、.34 (20)Provisions A provision is recognized when the Group has a present obligation(legal or constructive)as a result of a past event,it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount o
309、f the obligation.The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period,taking into account the risks and uncertainties surrounding the obligation.A provision is measured using the present value of t
310、he cash flows estimated to settle the present obligation.The increase in provision due to passage of time is recognized as interest expense.The Group recognizes provisions for costs expected to be incurred in the future for the repair of regular parts within the warranty period based on historical e
311、xperience and compensation for accidents caused by defects in the exported products or parts of the product when such amounts are probable of payment.Also,the Group recognizes provisions for the probable losses of unused loan commitment,construction contracts,pre-contract sale or service contract du
312、e to legal or constructive obligations.In addition,the Company recognizes provisions expected to be paid in the future with regard to long-term employee benefits payable to long-term employees.When some or all of the economic benefits required to settle a provision are expected to be recovered from
313、a third party,a receivable is recognized as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.(21)Taxation Income tax expense is composed of current and deferred tax.1)Current tax The current tax is computed based on the
314、 taxable profit for the current year.The taxable profit differs from the profit before income tax as reported in the consolidated statements of income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or
315、deductible.The Groups current tax liability is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.The amount of current tax payable or receivable is the best estimate of the tax amount expected to be paid or received that reflects uncertaint
316、y related to income taxes,if any.2)Deferred tax Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the consolidated financial statements and the corresponding tax bases used in the computation of taxable profit.Deferred tax liabilities are g
317、enerally recognized for all taxable temporary differences.Deferred tax assets shall be generally recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized.Such defe
318、rred tax assets and liabilities shall not be recognized if the temporary difference arises from goodwill or from the initial recognition(other than in a business combination)of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.Deferred ta
319、x liabilities are recognized for taxable temporary differences associated with investments in subsidiaries and associates and interests in joint ventures,except when the Group is able to control the timing of the reversal of the temporary difference,and it is probable that the temporary difference w
320、ill not reverse in the foreseeable future.Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognized to the extent that taxable profit will be available against which the temporary difference can be utilized and they are expec
321、ted to be reversed in the foreseeable future.The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.Deferred
322、 tax assets and liabilities are measured at the tax rates that are expected to be applied in the period in which the liability is settled or the asset is realized,based on tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period.The measurement of def
323、erred tax assets and liabilities reflects the tax consequences that would follow from the manner in which the Group expects to recover or settle the carrying amount of its assets and liabilities at the end of the reporting period.35 Deferred tax assets and liabilities are offset when there is a lega
324、lly enforceable right to offset current tax assets against current tax liabilities and when they relate to income tax levied by the same taxation authority.Also,they are offset when different taxable entities that intend either to settle current tax liabilities and assets on a net basis,or to realiz
325、e the assets and settle the liabilities simultaneously,in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.3)Recognition of current and deferred taxes Current and deferred taxes are recognized in profit or loss,except when
326、they relate to items that are recognized in other comprehensive income or directly in equity,or items arising from initial accounting treatments of a business combination.The tax effect arising from a business combination is included in the accounting for the business combination.(22)Treasury stock
327、When the Group repurchases its equity instruments(treasury stock),the incremental costs and net of tax effect are deducted from equity and recognized as other capital item deducted from the total equity in the consolidated statements of financial position.In addition,profits or losses from purchase,
328、sale or retirement of treasury stocks are directly recognized in equity and not in current profit or loss.(23)Financial liabilities and equity instruments Debt instruments and equity instruments issued by the Group are recognized as financial liabilities or equity depending on the contract and the d
329、efinitions of financial liability and equity instrument.1)Equity instruments An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities.Equity instruments issued by the Group are recognized at the proceeds received,net of
330、 direct issue costs.Repurchase of the Companys own equity instruments is recognized and deducted directly in equity.No gain or loss is recognized in profit or loss on the purchase,sale,issue or cancellation of the Companys own equity instruments.2)Financial guarantee liability A financial guarantee
331、contract is a contract that the issuer must pay a certain amount of money to compensate for losses incurred by the holder due to the failure of a specific debtor to pay the due date on the original contract or modified terms of the debt instrument.Financial guarantee liabilities are measured initial
332、ly at fair value and subsequently measured at the greater of the following,unless they are designated as at fair value through profit or loss or arising from the transfer of assets.Loss provision calculated in accordance with K-IFRS 1109 The amount recognized less the accumulated profits recognized
333、in accordance with K-IFRS 1115 3)Financial liabilities measured at FVPL Financial liabilities are classified as at FVPL when the financial liability is(i)contingent consideration of an acquirer in a business combination,(ii)held for trading or(iii)it is designated as at FVPL as of the date of initial recognition.However,for financial liabilities that are designated as at FVPL,the amount of change