Hci fy20184 q_eng

Hyundai Commercial, Inc.
Financial Statements
December 31, 2018 and 2017

Index
Page(s)
Independent Auditor’s Report................................................................................................ 1 - 3
Financial Statements
Statements of Financial Position ........................................................................................... 4 - 5
Statements of Comprehensive Income ..................................................................................... 6 - 7
Statements of Changes in Equity.............................................................................................. 8
Statements of Cash Flows ..................................................................................................... 9
Notes to the Financial Statements ......................................................................................... 10 - 98
Report on Independent Auditor’s Review of Internal Control over Financial Reporting 99
Report on the Effectiveness of the Internal Control over Financial Reporting................. 100

Independent Auditor’s Report
(English Translation of a Report Originally Issued in Korean)
To the Shareholders and Board of Directors of
Opinion
We have audited the accompanying financial statements of Hyundai Commercial, Inc. (the Company),
which comprise the statements of financial position as at December 31, 2018 and 2017, and the
statements of comprehensive income, statements of changes in equity and statements of cash flows
for the years then ended, and notes to the financial statements, including a summary of significant
accounting policies.
In our opinion, the accompanying financial statements present fairly, in all material respects, the
financial position of Hyundai Commercial, Inc. as at December 31, 2018 and 2017, and its financial
performance and its cash flows for the years then ended in accordance with International Financial
Reporting Standards as adopted by the Republic of Korea (Korean IFRS).
Basis for Opinion
We conducted our audits in accordance with Korean Standards on Auditing. Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Statements section of our report. We are independent of the Company in accordance with the ethical
requirements of the Republic of Korea that are relevant to our audit of the financial statements and we
have fulfilled our other ethical responsibilities in accordance with the ethical requirements. We believe
that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinion.
Other Matter
Auditing standards and their application in practice vary among countries. The procedures and
practices used in the Republic of Korea to audit such financial statements may differ from those
generally accepted and applied in other countries.

2
Responsibilities of Management and Those Charged with Governance for the Financial
Statements
Management is responsible for the preparation and fair presentation of the financial statements in
accordance with Korean IFRS, and for such internal control as management determines is necessary
to enable the preparation of financial statements that are free from material misstatement, whether due
to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company’s ability
to continue as a going concern, disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless management either intends to liquidate the Company or
to cease operations.
Those charged with governance are responsible for overseeing the Company’s financial reporting
process.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with Korean Standards on Auditing 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 aggregate, they could reasonably be expected to influence the economic decisions
of users taken on the basis of these financial statements.
As part of an audit in accordance with Korean Standards on Auditing, we exercise professional
judgment and maintain professional skepticism throughout the audit. We also:
 Identify and assess the risks of material misstatement of the 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 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
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the entity's internal control.
 Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by management.

3
 Conclude on the appropriateness of management’s 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 Company’s ability to
continue as a going concern. If we conclude that a material uncertainty exists, we are required
to draw attention in our auditor’s report to the related disclosures in the financial statements or,
if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the
audit evidence obtained up to the date of our auditor’s report. However, future events or
conditions may cause the Company to cease to continue as a going concern.
 Evaluate the overall presentation, structure and content of the financial statements, including
the disclosures, and whether the financial statements represent the underlying transactions
and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.
Seoul, Korea
March 14, 2019
This report is effective as of March 14, 2019, the audit 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 financial statements and notes thereto.
Accordingly, the readers of the audit report should understand that there is a possibility that the
above audit report may have to be revised to reflect the impact of such subsequent events or
circumstances, if any.

Statements of Financial Position
(In Korean won) Notes
Assets
Cash and due from bank 14,33
Cash and cash equivalents 33 ￦ 290,343,628,443 ￦ 176,391,584,759
Due from banks 6 9,000,000 9,000,000
290,352,628,443 176,400,584,759
Securities
Financial assets measured at fair value through profit or loss 8,14 553,765,369,856 -
Financial assets measured at
fair value through other comprehensive income 10,14 221,960,312,746 -
Trading securities 7,14 - 504,517,213,971
Available-for-sale securities 9,14 - 206,452,950,042
Investments in associates 11 887,070,433,259 813,856,094,165
1,662,796,115,861 1,524,826,258,178
Loans receivable 12,13,14,37
Factoring 205,868,443,630 148,233,672,994
Allowance for credit losses (931,295,658) (135,164,390)
Loans 5,057,498,745,515 4,659,125,985,387
Allowance for credit losses (68,559,782,811) (35,225,006,946)
5,193,876,110,676 4,771,999,487,045
Installment financial assets 12,13,14,37
Auto installment financial receivables 600,156,261,478 446,349,668,385
Durable goods installment financing receivables 19,188,554,373 23,762,235,394
Allowance for credit losses (4,870,809) (2,304,786)
613,915,762,229 467,888,347,331
Lease receivables 12,13,14,16,37
Financial lease receivables 702,291,502,563 709,582,340,446
Advances for acquisition of assets to be leased 3,751,318,000 2,093,563,639
686,692,760,931 698,944,822,134
Lease assets 17
Operating lease 5,270,939,496 6,611,358,966
5,270,939,496 6,611,358,966
Property and equipment 18
Fixtures and furniture 5,775,537,980 7,561,971,108
Others 370,999,664 370,999,664
6,146,537,644 7,932,970,772
Other assets
Intangible assets 19 21,354,767,573 23,125,843,752
Other receivables 3,14,37 10,321,522,448 4,733,050,593
Allowance for credit losses 13 (2,201,083) (1,250,975)
Accrued income 14,37 20,240,434,959 17,744,751,829
Allowance for credit losses 13 (304,409,798) (161,057,854)
Advance payments 4,121,951,560 1,270,872,611
Prepaid expenses 26,859,419,637 36,828,416,062
Suspense payments 61,903,558 48,387,672
Allowance for credit losses 13 (309,526) (265,097)
Leasehold deposits provided 14,35,37 2,025,470,552 2,290,561,262
Derivative assets 14,24,37 932,309,558 8,284,613,250
85,610,859,438 94,163,923,105
Total assets ￦ 8,544,661,714,718 ￦ 7,748,767,752,290
20172018
4

Statements of Financial Position
Liabilities
Borrowings 14,37
Borrowings 20 ￦ 1,008,706,462,393 ￦ 926,955,772,768
Debentures 21 6,086,150,036,184 5,715,015,052,145
7,094,856,498,577 6,641,970,824,913
Other liabilities
Other payables 14 30,124,356,982 27,713,291,288
Accrued expenses 14 42,324,366,696 36,010,457,916
Unearned revenue 3 11,315,476,028 6,582,628,917
Advances receipts 3,747,674,726 -
Withholdings 14 2,490,076,106 1,934,174,565
Employee benefit liabilities 22 361,147,109 5,874,478,573
Guarantee deposits received 14 93,250,480,578 87,862,984,449
Other provisions 23 1,634,560,163 2,335,276,599
Current tax liabilities 3 779,908,098 7,847,884,579
Deferred tax liabilities 30 69,434,275,997 72,493,084,362
Derivative liabilities 14,24,37 11,977,053,228 12,305,656,886
267,439,375,711 260,959,918,134
Total liabilities 7,362,295,874,288 6,902,930,743,047
Equity
Share capital 1,25
Ordinary shares 133,333,250,000 100,000,000,000
Preferred shares 50,000,000,000 25,000,000,000
183,333,250,000 125,000,000,000
Reserves 25
Share premium 257,102,712,547 74,608,059,537
Hybrid bonds 25 398,895,100,000 299,152,940,000
Capital adjustments
Other capital adjustments (2,397,101,756) (2,397,101,756)
Accumulated other comprehensive income 32,38
Gain (loss) on valuation of derivatives 24 (5,918,269,702) 1,323,504,188
Loss on valuation of financial assets measured at
fair value through other comprehensive income 1,915,273,533 -
Changes in the fair value of available-for-sale securities - (1,056,446,076)
Share of other comprehensive income of associates (538,401,462) 163,451,235
Remeasurement of defined benefit plans (3,706,652,951) (2,908,577,264)
(8,248,050,582) (2,478,067,917)
Retained earnings 3,26,38
Legal reserve 19,240,000,000 14,240,000,000
Discretionary reserve 28,788,024,884 22,111,639,125
Retain earnings before appropriation
(Provision (reversal) of regulatory reserve for credit losses
December 31, 2018: ￦(9,861,220,311)
December 31, 2017: ￦6,676,385,759) 305,651,905,337 315,599,540,254
353,679,930,221 351,951,179,379
Total equity 1,182,365,840,430 845,837,009,243
Total liabilities and equity ￦ 8,544,661,714,718 ￦ 7,748,767,752,290
The above statements of financial position should be read in conjunction with the accompanying notes.
2018 2017
5

Statements of Comprehensive Income
Years Ended December 31, 2018 and 2017
Operating revenue
Interest income 27 ￦ 412,393,261,172 ￦ 352,176,664,115
Commission income 3,28 30,064,110,937 29,350,621,615
Income on loans receivable 35 12,102,255,075 16,886,605,119
Gain on valuation and disposal of financial assets
measured at fair value through profit or loss 8 5,373,940,255 -
Gain on valuation and disposal of trading securities 7 - 720,235,805
Gain on foreign currency transactions - 28,558,716,938
Dividend income 68,100,000 68,100,000
Gain on valuation of derivatives 3,736,000,000 -
Other operating income 3,028,516,394 1,609,313,774
466,766,183,833 429,370,257,366
Operating expenses
Interest expense 27 182,637,011,103 144,823,659,494
Commission expenses 28 3,829,768,329 2,424,577,823
Impairment loss 13 106,525,134,622 45,238,520,101
Loss on disposal of loans receivable 35 5,036,798,613 2,972,200,674
Loss on valuation and disposal of financial assets
measured at fair value through profit or loss 8 427,515,493 -
Loss on valuation and disposal of trading securities 7 - 394,488
Loss on valuation and disposal of financial assets
measured at fair value through other comprehensive income 10 60,998,803 -
Loss on disposal of available-for-sale securities 9 - 75,982
Loss on foreign currency transactions 3,736,000,000 -
Selling and administrative expenses 29 116,792,186,447 105,499,566,705
Loss on valuation of derivatives - 7,323,000,000
Loss on transactions of derivatives - 22,845,000,000
Other operating expenses 12,509,606,056 15,476,218,396
431,555,019,466 346,603,213,663
Operating income 35,211,164,367 82,767,043,703
Non-operating income
Share of profit of associates 11 47,137,039,158 265,641,148,433
Gain on disposal of property and equipment 2,949,471 3,864,168
Gain on restoration work 6,693,221 5,385,696
Gain related to derivatives - 2,096,713,467
Miscellaneous income 997,341,855 1,276,600,047
48,144,023,705 269,023,711,811
Non-operating expenses
Share of loss of associates 11 - 12,768,602,205
Loss on disposal of property and equipment 118,006 6,399,813
Impairment loss on property and equipment 1,972,210 25,230,165
Donations 78,968,559 73,691,091
Loss on restoration work - 43,290,983
Loss related to derivatives 1,205,908,623 1,781,934,387
Loss on repayments of debentures - 1,442,019,055
Miscellaneous loss 2,518,981,584 1,273,889,549
3,805,948,982 17,415,057,248
Profit before income taxes 79,549,239,090 334,375,698,266
2018 2017
6

Statements of Comprehensive Income
Income tax expense 3,30 10,901,277,597 61,962,990,372
Profit for the year 26
(Adjusted profit after provision of regulatory reserve for credit losses:
￦ 68,647,961,493 ￦ 272,412,707,894
Other comprehensive income, net of tax 32
Items that may be subsequently reclassified to profit or loss 2,951,589,162 6,184,998,806
Items that will not be reclassified to profit or loss 5,545,753,810 1,178,506,128
8,497,342,972 7,363,504,934
Total comprehensive income for the year ￦ 77,145,304,465 ￦ 279,776,212,828
Earnings per share 31
Basic earnings per share ￦ 2,460 ￦ 12,982
Diluted earnings per share 2,147 12,982
The above statements of comprehensive income should be read in conjunction with the accompanying notes.
December 31, 2017: ￦265,736,322,135)
2018 2017
December 31, 2018: ￦72,148,658,315
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Statements of Changes in Equity
Accumulated
other
(In Korean won) comprehensive
income
Balance at January 1, 2017 ￦ 125,000,000,000 ￦ 74,608,059,537 ￦ 199,427,460,000 ￦ (2,397,101,756) ￦ (9,841,572,851) ￦ 229,691,248,052 ￦ 616,488,092,982
Total comprehensive income
Profit for the year - - - - - 272,412,707,894 272,412,707,894
Other comprehensive income
Gain on valuation of deriavatives - - - - 1,655,131,547 - 1,655,131,547
Changes in the fair value of available-for-sale securities - - - - (2,085,823,092) - (2,085,823,092)
Share of other comprehensive income of associates - - - - 6,615,690,351 - 6,615,690,351
Remeasurement of defined benefit plans - - - - 1,178,506,128 - 1,178,506,128
- - - - 7,363,504,934 272,412,707,894 279,776,212,828
Transactions with owners
Annual dividend - - - - - (4,700,000,000) (4,700,000,000)
Interim dividend - - - - - (30,000,000,000) (30,000,000,000)
Acquisition of treasury shares - - - (102,679,772,330) - - (102,679,772,330)
Retirement of treasury shares - - - 102,679,772,330 - (102,679,772,330) -
Issuance of hybrid bonds (Note 25) - - 99,725,480,000 - - - 99,725,480,000
Interest paid to hybrid bonds - - - - - (12,773,004,237) (12,773,004,237)
- - 99,725,480,000 - - (150,152,776,567) (50,427,296,567)
Balance at December 31, 2017 ￦ 125,000,000,000 ￦ 74,608,059,537 ￦ 299,152,940,000 ￦ (2,397,101,756) ￦ (2,478,067,917) ￦ 351,951,179,379 ￦ 845,837,009,243
Balance at January 1, 2018 ￦ 125,000,000,000 ￦ 74,608,059,537 ￦ 299,152,940,000 ￦ (2,397,101,756) ￦ (2,478,067,917) ￦ 351,951,179,379 ￦ 845,837,009,243
The effect of accounting policies (Notes 3 and 38) - - - - (3,973,655,740) (4,699,508,970) (8,673,164,710)
The effect of accounting policies (associates) (Note 11) - - - - (10,293,669,897) (23,345,812,795) (33,639,482,692)
Balance after reflecting the changes of accounting policies 125,000,000,000 74,608,059,537 299,152,940,000 (2,397,101,756) (16,745,393,554) 323,905,857,614 803,524,361,841
Total comprehensive income
Profit for the year - - - - - 68,647,961,493 68,647,961,493
Other comprehensive income
Loss on valuation of deriavatives - - - - (7,241,773,890) - (7,241,773,890)
Gain from financial assets measured at
fair value through other comprehensive income - - - - 6,945,375,349 - 6,945,375,349
Share of other comprehensive income of associates - - - - 9,591,817,200 - 9,591,817,200
Remeasurement of defined benefit plans - - - - (798,075,687) - (798,075,687)
- - - - 8,497,342,972 68,647,961,493 77,145,304,465
Transactions with owners
Annual dividend - - - - - (20,000,000,000) (20,000,000,000)
Issuance of ordinary shares 33,333,250,000 107,669,731,500 - - - - 141,002,981,500
Issuance of convertible preferred shares (Note 25) 25,000,000,000 74,824,921,510 - - - - 99,824,921,510
Issuance of hybrid bonds (Note 25) - - 99,742,160,000 - - - 99,742,160,000
Interest paid to hybrid bonds - - - - - (18,873,888,886) (18,873,888,886)
58,333,250,000 182,494,653,010 99,742,160,000 - - (38,873,888,886) 301,696,174,124
Balance at December 31, 2018 ￦ 183,333,250,000 ￦ 257,102,712,547 ￦ 398,895,100,000 ￦ (2,397,101,756) ￦ (8,248,050,582) ￦ 353,679,930,221 ￦ 1,182,365,840,430
The above statements of changes in equity should be read in conjunction with the accompanying notes.
Share
capital Reserves Hybrid bonds Retained earnings Total equityCapital adjustments
8

Statements of Cash Flows
Cash flows from operating activities
Cash used in operations 33 ￦ (360,713,120,306) ￦ (899,566,225,532)
Interest received 31,611,644,189 14,762,670,372
Interest paid (160,375,542,676) (142,119,466,527)
Dividends received 68,100,000 68,100,000
Income taxes paid (11,848,872,900) (20,539,376,592)
Net cash outflow from operating activities (501,257,791,693) (1,047,394,298,279)
Cash flows from investing activities
Payments for financial assets
measured at fair value through profit or loss (6,440,000,000) -
Repayments of financial assets
measured at fair value through profit or loss 36,096,073,896 -
Payments for financial assets
measured at fair value through other comprehensive income (133,000,000,000) -
Repayments of financial assets
measured at fair value through other comprehensive income 38,214,418,738 -
Repayments and proceeds from disposal of available-for-sale securities - 20,592,976,189
Payments for available-for-sale securities - (113,510,605,000)
Payments for investments in associates (60,950,467,852) (298,793,573,716)
Dividends from investments in associates 4,764,741,146 9,175,080,058
Proceeds from disposal of property and equipment 3,057,000 4,103,000
Payments for property and equipment (3,296,256,250) (1,852,528,313)
Proceeds from disposal of intangible assets - 1,500,000,000
Payments for intangible assets (6,833,879,362) (2,442,387,976)
Decrease in leasehold deposits provided 342,208,893 6,698,242,534
Increase in leasehold deposits provided (77,764,623) (6,575,574,208)
Net cash outflow from investing activities (131,177,868,414) (385,204,267,432)
Cash flows from financing activities
Proceeds from borrowings 985,904,240,000 1,571,739,510,000
Repayments of borrowings (904,153,550,375) (768,712,371,730)
Issuance of debentures 4,435,831,951,154 2,969,422,230,987
Repayments of debentures (4,073,000,000,000) (2,034,537,019,055)
Proceeds from issuance of ordinary shares 141,002,981,500 -
Issuance of convertible preferred shares 99,824,921,510 -
Acquisition of treasury shares - (102,679,772,330)
Dividends paid (20,000,000,000) (34,700,000,000)
Repayments of securitized debts - (290,125,000,000)
Issuance of hybrid bonds 99,742,160,000 99,725,480,000
Interest paid to hybrid bonds (18,764,999,998) (12,289,999,997)
Net cash flow of hedging derivatives - (1,610,000,000)
Net cash inflow from financing activities 746,387,703,791 1,396,233,057,875
Net cash increase (decrease) in cash and cash equivalents 113,952,043,684 (36,365,507,836)
Cash and cash equivalents at beginning of the year 33 176,391,584,759 212,757,092,595
Cash and cash equivalents at end of the year 33 ￦ 290,343,628,443 ￦ 176,391,584,759
The above statements of cash flows should be read in conjunction with the accompanying notes.
2018 2017
9

Notes to the Financial Statements
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1. The Company
Hyundai Commercial, Inc. (the Company) was established on March 27, 2007, by taking over all
the assets, liabilities, rights, and obligations related with the loans of the industrial product division
of Hyundai Capital Services, Inc. and its installment financing and lease financing division. The
Company is engaged in installment financing and leasing of facilities. The Company’s
headquarters is located at 3, Gukhoe-daero 66-gil, Yeongdeungpo-gu, Seoul, Korea. Details of
shareholders of the Company as at December 31, 2018, are as follows:
Number of shares
Percentage of
ownership (%)
Hyundai Motor Company 10,000,000 37.50
Myung-yi Chung 6,667,000 25.00
Tae-young Chung 3,333,000 12.50
Centurion Resources Investment Limited 6,666,650 25.00
26,666,650 100.00
2. Basis of Preparation
The Company maintains its accounting records in Korean won and prepares statutory financial
statements in the Korean language (Hangul) in accordance with International Financial Reporting
Standards as adopted by the Republic of Korea (Korean IFRS). The accompanying financial
statements have been condensed, restructured and translated into English from the Korean
language financial statements.
Certain information attached to the Korean language financial statements, but not required for a
fair presentation of the Company's financial position, financial performance or cash flows, is not
presented in the accompanying financial statements.
(a) Application of accounting standard
The financial statements of the Company have been prepared in accordance with Korean IFRS as
prescribed in the article 5 clause 1 item 1 of the Acts on External Audit for Stock Companies, etc.
in the Republic of Korea. The Company accounted for investments in associates, parent company
or joint ventures using the equity method accounting in accordance with Korean IFRS 1028.
(b) Basis of measurement
The financial statements have been prepared on the historical cost basis except for the following
material items in the statement of financial position:
- Financial instruments / Investment instruments measured at fair value through profit or loss
- Financial instruments measured at fair value through other comprehensive income
- Derivative financial instruments measured at fair value

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- The net defined benefit liabilities is recognized as the present value of the defined benefit
obligation less the fair value of the plan assets.
(c) Use of estimates and judgements
The preparation of the financial statements in conformity with Korean IFRS requires management
to make judgments, estimates and assumptions that affect the application of accounting policies
and the reported amounts of assets, liabilities, income and expenses. Actual results may differ
from these estimates.
Estimates and underlying assumptions are evaluated on an ongoing basis. Revisions to
accounting estimates are recognized in the period in which the estimates are revised and in any
future years affected.
Information about critical judgments in applying accounting policies that have the most significant
effect on the amounts recognized in the financial statements is included in the following notes:
- Note 2(d): Measurement of fair values
- Note 4(f): Expected credit losses (Allowances for credit loss)
Information about assumptions and estimation uncertainties that have a significant risk of
resulting in a material adjustment within the next financial year are included in the following notes:
- Note 4: Expected credit losses – Assumptions about risk of default and expected loss rates
- Note 22: Employee Benefit Liabilities – Actuarial assumptions
- Note 34: Commitments and Contingencies – Assumption of the price and the possibilities of
asset outflow
(d) Measurement of fair values
A number of the Company’s accounting policies and disclosures require the measurement of fair
values, for both financial and non-financial assets and liabilities. The Company has an
established control framework with respect to the measurement of fair values. This includes a
valuation team that has overall responsibility for overseeing all significant fair value
measurements, including Level 3 fair values, and reports directly to the finance executive.
The Company regularly reviews significant unobservable inputs and valuation adjustments. If
third party information, such as broker quotes or pricing services, is used to measure fair values,
then the Company assesses the evidence obtained from the third parties to support the
conclusion that such valuations meet the requirements of Korean IFRS, including the level in the
fair value hierarchy.
When measuring the fair value of an asset or a liability, the Company uses market observable
data as far as possible. Fair values are categorized into different levels in a fair value hierarchy
based on the inputs used in the valuation techniques as follows.
- Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.

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- Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or
liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
- Level 3: inputs for the asset or liability that are not based on observable market data
(unobservable inputs).
If the inputs used to measure the fair value of an asset or a liability might be categorized in
different levels of the fair value hierarchy, then the fair value measurement is categorized in its
entirety in the same level of the fair value hierarchy as the lowest level input that is significant to
the entire measurement. And, the Company recognizes the movements within levels of fair value
hierarchy at the end of the reporting period in which changes occur.
Detailed information about the assumptions used to measure fair values are included in Note 14.
(e) Approval of Issuance of the Financial Statements
The financial statements 2018 were approved for issue by the Board of Directors on January 30,
2019 and will be reported at the shareholders' meeting on March 28, 2019.
3. Changes in Accounting Policies
(a) New and amended standards adopted by the Company
The Company has applied the following standards and amendments for the first time for their
annual reporting period commencing on January 1, 2018.
- Amendments to Korean IFRS 1028 Investments in Associates and Joint Ventures
The amendments clarify that an entity shall make this election separately for each associate of
joint venture, at initial recognition of the associate or joint venture. The amendments does not
have a significant impact on the financial statements because the Company is not a venture
capital organization.
- Amendments to Korean IFRS 1040 Transfers of Investment Property
The amendment to Korean IFRS 1040 clarifies that a transfer to, or from, investment property,
including property under construction, can only be made if there has been a change in use that is
supported by evidence, and the list of evidence for a change of use in the standard was re-
characterized as a non-exclusive list of example. The amendment does not have a significant
impact on the financial statements.
- Amendments to Korean IFRS 1102 Share-based Payment
Amendments to Korean IFRS 1102 clarify accounting for a modification to the terms and
conditions of a share-based payment that changes the classification of the transaction from cash-

13
settled to equity-settled. Amendments also clarify that the measurement approach should treat the
terms and conditions of a cash-settled award in the same way as for an equity-settled award. The
amendment does not have a significant impact on the financial statements.
- Enactment of Korean IFRS 2122 Foreign Currency Transaction and Advance Consideration
According to the enactment, the date of the transaction for the purpose of determining the
exchange rate to use on initial recognition of the related asset, expense or income (or part of it) is
the date on which an entity initially recognizes the non-monetary asset or non-monetary liability
arising from the payment or receipt of advance consideration. The enactment does not have a
significant impact on the financial statements.
- Korean IFRS 1109 Financial Instruments
The Company has applied Korean IFRS 1109 Financial Instruments on January 1, 2018, the date
of initial application. In accordance with the transitional provisions in Korean IFRS 1109,
comparative figures have not been restated, and difference between the previous book amount
and the book amount at the date of the initial application has been applied retrospectively in order
to be recognized as equity as at January 1, 2018. See Note 38 for further details on the impact
from the application of the standard.
- Korean IFRS 1115 Revenue from Contracts with Customers
The Company has applied Korean IFRS 1115 Revenue from Contracts with Customers. Korean
IFRS 1115 Revenue from Contracts with Customers issued on November 6, 2015 is effective for
annual reporting periods beginning on or after January 1, 2018.
Korean IFRS 1018 and other previous revenue standard identify revenue as income that arises in
the course of ordinary activities of an entity and provide guidance on a variety of different types of
revenue such as sale of goods, rendering of services, interest, dividends, royalties and
construction contracts. However, Korean IFRS 1115 is based on the principle that revenue is
recognized by applying five-step revenue recognition model to every type of contracts, which is
stated below:
 Identify contracts with customers
 Identify the separate performance obligation
 Determine the transaction price of the contract
 Allocate the transaction price to each of the separate performance obligations, and
 Recognize the revenue as each performance obligation is satisfied.
In accordance with the transition provisions in Korean IFRS 1115, comparative figures have not
been restated. The Company recognized the differences between previous book amounts and
book amounts at the date of initial application as an adjustment to retained earnings as at January

14
1, 2018, the period of initial application.
The impact on the statement as at December 31, 2018 is as follows:
(in thousands of Korean won)
Beginning of the
reporting period
Increase in other receivables 1,634,261
Increase in accrued income 2,985,677
Decrease in retained earnings (1,351,416)
Tax effect 327,043
Application effect reflected in beginning balance of retained
earnings (1,024,373)
The impact on the Company’s statements of financial position at the date of initial application is as
follows:
(in thousands of Korean won)
Amount at the
end of the
reporting
period Adjustments
Amount before
application of
Korean IFRS
1115
Other receivables 10,321,522 (1,967,063) 8,354,459
Accrued income 11,315,476 (3,547,877) 7,767,599
Current tax liabilities 779,908 382,557 1,162,465
Retained earnings before appropriation 305,651,905 1,198,257 306,850,162
Commission income 30,064,111 229,398 30,293,509
Income tax expense 10,901,278 55,514 10,956,792
(b) New and amended standards and interpretations not yet adopted by the Company
Certain new and amended accounting standards and interpretations that have been published
that are not mandatory for the financial year beginning on January 1, 2018 reporting periods and
have not been early adopted by the Company are set out below.
- Enactment of Korean IFRS 1116 Leases
Korean IFRS 1116 Leases issued on May 22, 2017 is effective for annual periods beginning on or
after January 1, 2019, with early adoption permitted. This standard will replace Korean IFRS 1017
Leases, Interpretation of Korean IFRS 2104 Determining whether an Arrangement contains a
Lease, Interpretation of Korean IFRS 2015 Operating Leases-Incentives, and Interpretation of
Korean IFRS 2027 Evaluating the Substance of Transactions Involving the Legal Form of a Lease.
At inception of a contract, the entity shall assess whether the contract is, or contains, a lease.
Also, at the date of initial application, the entity shall assess whether the contract is, or contains, a
lease in accordance with the standard. However, the entity is not required to reassess all
contracts entered into before the date of initial application as a practical expedient.

15
The Company plans to elect the practical expedient and and apply Korean IFRS 1116 only to
contracts entered into (or changed) on or after the date of initial application.
For a contract that is, or contains, a lease, the entity shall account for each lease component
within the contract as a lease separately from non-lease components of the contract. A lessee is
required to recognize a right-of-use asset representing its right to use the underlying leased asset
and a lease liability representing its obligation to make lease payments. The lessee may elect not
to apply the requirements to short-term lease (a lease term of 12 months or less at the
commencement date) and low value assets (e.g. underlying assets below $ 5,000). In addition, as
a practical expedient, the lessee may elect, by class of underlying asset, not to separate non-
lease components from lease components, and instead account for each lease component and
any associated non-lease components as a single lease component.
In relation to sales and leaseback transactions, the Company (seller-lessee) applies Korean IFRS
1115 Revenue from contracts with customers first to determine whether the transfer of assets is
accounted for as sales of assets. Meanwhile, the sales and leaseback transactions entered
before the date of initial application are not reassessed.
a) Lessor accounting
Method of applying Korean IFRS 1116 Leases and its financial effects
The Company expects the effect on the financial statements applying the new standard will not be
significant as lessor accounting under Korean IFRS 1116 Leases, will not significantly change
compared to the current lessor accounting under Korean IFRS 1017 Leases.
b) Lessee accounting
Method of applying Korean IFRS 1116 Leases
A lessee shall apply this standard to its leases either:
• retrospectively to each prior reporting period presented applying Korean IFRS 1008
Accounting Policies, Changes in Accounting Estimates and Errors (Full retrospective
application); or
• retrospectively with the cumulative effect of initially applying the standard recognized at
the date of initial application.
The Company plans to apply Korean IFRS 1116 retrospectively with the cumulative effect of
initially applying the standard at the date of initial application. The Company will not restate any
comparative information. Instead, the cumulative effect of applying the standard will be
recognized as an adjustment to the opening balance of retained earnings at the date of initial
application.
Financial effects of Korean IFRS 1116 Leases
The Company performed an impact assessment to identify potential financial effects of applying

16
Korean IFRS 1116. The assessment was performed based on current situation and available
information at the date of initial application to identify effects on financial statements of reporting
period of initial application.
The total minimum lease payment expected to be paid by the Company in relation to operating
leases before discounted to their present value is 2,846 million. When the payment is
discounted at incremental borrowing rate of the lessee, the total minimum lease payment
amounts to 2,658 million.
For a contract that is, or contains, a lease, the Company plans to apply the practical expedient to
account for each lease component and any associated non-lease components as a single lease
component.
As a result of impact assessment on the financial statements, the Company expects the
underlying right-of-use asset and a lease liability at the date of initial application to increase by
2,717 million and 2,658 million, respectively. Operating lease expenses are expected to
decrease by 1,225 million while depreciation expenses for the underlying right-of-use asset and
interest expenses for the lease liability are expected to increase by 1,217 million and 60
million, respectively.However the results of the assessment may change based on additional
information available in the future.
- Amendments to Korean IFRS 1109 Financial Instruments
The narrow-scope amendments made to Korean IFRS 1109 Financial Instruments enable entities
to measure certain prepayable financial assets with negative compensation at amortized cost.
When a modification of a financial liability measured at amortized cost that does not result in the
derecognition, a modification gain or loss shall be recognized in profit or loss. These amendments
will be applied for annual periods beginning on or after January 1, 2019, with early adoption
permitted.
- Amendments to Korean IFRS 1019 Employee Benefits
The amendments require that an entity shall calculate current service cost and net interest for the
remainder of the reporting period after a plan amendment, curtailment or settlement based on
updated actuarial assumptions from the date of the change. The amendments also require that a
reduction in a surplus must be recognized in profit or loss even if that surplus was not previously
recognized because of the impact of the asset ceiling. The amendments are effective for plan
amendments, curtailments and settlements occurring in reporting periods that begin on or after 1
January 2019.
- Amendments to Korean IFRS 1028 Investments in Associates and Joint Ventures
The amendments clarify that an entity shall apply Korean IFRS 1109 to financial instruments in an
associate or joint venture to which the equity method is not applied. These include long-term
interests that, in substance, form part of the entity’s net investment in an associate or joint venture.
These amendments will be applied for annual periods beginning on or after January 1, 2019, with
early adoption permitted. In accordance with the transitional provisions in Korean IFRS 1109, the

17
restatement of the comparative information is not required and the cumulative effects of initially
applying the amendments retrospectively should be recognized in the beginning balance of
retained earnings at the date of initial application.
- Enactment to Interpretation of Korean IFRS 2123 Uncertainty over Income Tax Treatments
The Interpretation explains how to recognize and measure deferred and current income tax
assets and liabilities where there is uncertainty over a tax treatment, and includes guidance on
how to determine whether each uncertain tax treatment is considered separately or together. It
also presents examples of circumstances where a judgement or estimate is required to be
reassessed. This Interpretation will be applied for annual periods beginning on or after January 1,
2019, and an entity can either restate the comparative financial statements retrospectively or
recognize the cumulative effect of initially applying the Interpretation as an adjustment in the
beginning balance at the date of initial application.
- Annual Improvements to Korean IFRS 2015 – 2017 Cycle:
 Korean IFRS 1103 Business Combination
The amendments clarify that when a party to a joint arrangement obtains control of a business
that is a joint operation, and had rights to the assets and obligations for the liabilities relating to
that joint operation immediately before the acquisition date, the transaction is a business
combination achieved in stages. In such cases, the acquirer shall remeasure its entire previously
held interest in the joint operation. These amendments will be applied to business combinations
for which the acquisition date is on or after the beginning of the first annual reporting period
beginning on or after 1 January 2019, with early adoption permitted.
 Korean IFRS 1111 Joint Agreements
The amendments clarify that when a party that participates in, but does not have joint control of, a
joint operation might obtain joint control of the joint operation in which the activity of the join
operation constitues a business. In such cases, previously held interests in the joint operation are
not remeasured. These amendments will be applied to transactions in which an entity obtains joint
control on or after the beginning of the first annual reporting period beginning on or after 1
January 2019, with early adoption permitted.
 Paragraph 57A of Korean IFRS 1012 Income Tax
The amendement is applied to all the income tax consequences of dividends and requires an
entity to recognize the income tax consequences of dividends in profit or loss, other
comprehensive income or equity according to where the entity originally recognized those past
transactions or events. These amendments will be applied for annual reporting periods beginning
on or after January 1, 2019, with early adoption permitted.
 Korean IFRS 1023 Borrowing Costs
The amendments clarify that if a specific borrowing remains outstanding after the related
qualifying asset is ready for its intended use (or sale), it becomes part of general borrowings.

18
These amendments will be applied to borrowing costs incurred on or after the beginning of the
first annual reporting period beginning on or after January 1, 2019, with early adoption permitted.
4. Significant Accounting Policies
The significant accounting policies in accordance with Korean IFRS are set out below. Except for
the amendments discussed in Notes 3 and 38, accounting policies used to prepare the financial
statements as at and for the year ended December 31, 2018, are consistent with the accounting
policies used to prepare the financial statements as at and for the year ended December 31, 2017.
(a) Investment in Associates and Joint Ventures
The Company's investment in investees accounted for using equity method is comprised of
investments in associates. The Company has significant influence on the financial and operating
policies of the associates, but does not joint control or controls the associates. The Company
initially recognizes the investment in associates at cost including transaction costs, and accounts
for using equity method after acquisition. Accordingly, the Company's share of the investee's profit
or loss and other comprehensive income is adjusted to the carrying amount, and dividend
received from investee is deducted from the carrying amount of the share.
(b) Cash and cash equivalents
Cash and cash equivalents comprise balances with less than three months’ maturity from the date
of acquisition, including cash on hand, deposits held at call with banks and other short-term highly
liquid investments with original maturities of three months or less.
(c) Financial assets
a) Classification and measurement
From January 1, 2018, the classification of financial assets will be driven by the Company’s
business model for managing the financial assets and contractual terms of cash flow. The
following table shows the classification of financial assets measured subsequently at amortized
cost, at fair value through other comprehensive income and at fair value through profit or loss. If a
hybrid contract contains a host that is a financial asset, the classification of the hybrid contract is
determined for the entire contract without separating the embedded derivative.
Business model for the
contractual cash flows
characteristics
Solely represent payments of
principal and interest
All other
Hold the financial asset for the
collection of the contractual cash
flows
Measured at amortized cost1 Recognized at fair
value through profit or
loss2

19
Hold the financial asset for the
collection of the contractual cash
flows and sale
Recognized at fair value
through other comprehensive
income 1
Hold for sale and others Recognized at fair value
through profit or loss
1 A designation at fair value through profit or loss is allowed only if such designation mitigates an
accounting mismatch (irrevocable).
2 Equity investments not held for trading can be recorded in other comprehensive income
(irrevocable). Cumulative valuation gain or loss arising from equity securities designated as
financial assets measured at fair value through other comprehensive income is not recognized as
profit or loss for the year on the disposal.
b) Derecognition
The Company derecognizes a financial asset when the contractual rights to the cash flows from
the financial asset expire on when all the risks and rewards of ownership of the financial asset are
substantially transferred.
If the Company transfers substantially all the risks and rewards of ownership of the financial asset,
the Company derecognizes the financial asset and recognizes separately as assets or liabilities
any rights and obligations created or retained in the Company. And, if the Company retains
substantially all the risks and rewards of ownership of the financial asset, the Company continues
to recognize the financial asset.
The Company writes off financial assets in its entirety or to a portion thereof when the principal
and interest on the principal amount outstanding are determined to be no longer recoverable. In
general, the Company considers write-off if significant financial difficulties of the debtor, or
delinquency in interest or principal payments is indicated. The write-off decision is generally made
in accordance with internal regulations but may require additional approval from external
institution, if necessary. After the write-off, the Company can collect the written-off loans
continuously according to the internal policy. Recovered amounts of financial assets previously
written-off are recognized at profit or loss.
c) Impairment
The impairment model requires the recognition of impairment provisions based on expected credit
losses (ECL). It applies to financial assets classified at amortized cost, debt instruments
measured at fair value through other comprehensive income, lease receivables, contract assets,
loan commitments and certain financial guarantee contracts. The Company will always recognize
(at a minimum) 12-month expected credit losses in profit or loss. Lifetime expected losses will be
recognized on assets for which there is a significant increase in credit risk after initial recognition.
Stage Loss allowance

20
1
No significant increase in credit
risk after initial recognition1
12-month expected credit losses (expected credit losses
that result from those default events on the financial
instrument that are possible within 12 months after the
reporting date)
2
Significant increase in credit risk
after initial recognition Lifetime expected credit losses (expected credit losses
that result from all possible default events over the life of
the financial instrument)
3 Credit-impaired
1 If the financial instrument has low credit risk at the end of the reporting period, the Company
may assume that the credit risk has not increased significantly since initial recognition.
(d) Derivative financial instruments
Derivatives are initially recognized at fair value. Subsequent to initial recognition, derivatives are
measured at fair value, and changes therein are accounted for as described below.
a) Hedge accounting
The Company holds various derivative financial instruments, such as currency swaps and interest
rate swaps to hedge its foreign currency and interest rate risk exposures.
On initial designation of the hedge, the Company formally documents the relationship between the
hedging instruments and hedged items, including the risk management objectives and strategy in
undertaking the hedge transaction, together with the methods that will be used to assess the
effectiveness of the hedging relationship.
i) Fair value hedge
Changes in the fair value of a derivative hedging instrument designated as a fair value hedge are
recognized in profit or loss. The gain or loss from remeasuring the hedging instrument at fair
value for a derivative hedging instrument and the gain or loss on the hedged item attributable to
the hedged risk are recognized in profit or loss in the same line item of the statement of
comprehensive income. The Company discontinues fair value hedge accounting if the hedging
instrument expires or is sold, terminated or exercised, or if the hedge no longer meets the criteria
for hedge accounting. Any adjustment arising from gain or loss on the hedged item attributable to
the hedged risk is amortized to profit or loss from the date the hedge accounting is discontinued.
ii) Cash flow hedge
When a derivative is designated to hedge the variability in cash flows attributable to a particular
risk associated with a recognized asset or liability or a highly probable forecasted transaction that
could affect profit or loss, the effective portion of changes in the fair value of the derivative is

21
recognized in other comprehensive income, net of tax, and presented in the hedging reserve in
equity. Any ineffective portion of changes in the fair value of the derivative is recognized
immediately in profit or loss.
If the hedging instrument no longer meets the criteria for hedge accounting, expires or is sold,
terminated, exercised, or the designation is revoked, then hedge accounting is discontinued
prospectively. The cumulative gain or loss on the hedging instrument that has been recognized in
other comprehensive income is reclassified to profit or loss in the periods during which the
forecasted transaction occurs. If the forecasted transaction is no longer expected to occur, then
the balance in other comprehensive income is recognized immediately in profit or loss.
b) Embedded derivative instruments
Embedded derivatives are separated from the host contract and accounted for separately only if
the following criteria has been met: (i) the economic characteristics and risks of the host contract
and the embedded derivatives are not clearly and closely related to a separate instrument with
the same terms as the embedded derivative that would meet the definition of a derivative, and (ii)
the hybrid (combined) instrument is included in financial liabilities and not designated as an item
measured at fair value profit or loss. Changes in the fair value of separable embedded
derivatives are recognized immediately in profit or loss.
c) Other derivative instruments
Changes in the fair value of other derivative financial instrument not designated as a hedging
instrument are recognized immediately in profit or loss.
d) Day 1 gain or loss
When the Company measures the fair value of OTC derivatives using input variables that are not
based on observable market data, the differences between the fair value and transaction price at
initial recognition (Day 1 gain or loss) are recognized as deferred profit or loss, not recognized as
profit or loss. The differences are amortized on a straight-line basis over the trading period. If the
elements of valuation method become observable in the market, deferred balances are
recognized immediately as net profit or loss of financial assets at fair value through profit or loss
or as part of other operating income or expenses in the statement of comprehensive income.
(e) Revenue recognition
The Company recognizes interest income and expenses of debt securities measured at fair value
through profit or loss (except for beneficiary certificates, investments and other debt securities),
loans receivable, financial instruments measured at amortized cost and debt securities measured
at fair value through other comprehensive income in the statement of comprehensive income
using the effective interest method. The effective interest method is a method of calculating the
amortized cost of financial asset or financial liabilities and of allocating interest income or interest
expenses over the relevant period.

22
Financial service fees are treated in accordance with the purpose of charging fees and relevant
accounting standards as follows:
a) Fees that are an integral part of the effective interest of a financial instrument
Those fees are generally treated as adjustments of effective interest rate. Such commissions may
include compensation for activities such as evaluating borrower's financial position, guarantees,
collateral and other guarantee arrangements, managing office work, and preparing relevant
documents. However, fees relating to financial instruments measured at fair value through profit
or loss are recognized as revenue immediately.
b) Fees earned as services are provided
Fees earned from providing asset management, trustee and warranty services for an agreed
period of time are recognized as revenue as the services are provided.
c) Fees that are earned on the execution of a significant act
Fees earned on the execution of a significant act, such as commissions and sales commissions
received as compensation for negotiation or participating in negotiation for third parties (e.g.
arranging sales and purchases of shares and other securities, acquisition and transfer of
business), are recognized when the significant act is completed.
(f) Expected credit losses (Allowance for credit loss)
a) Recognition and measurement of expected credit loss (Allowance for credit loss)
The Company recognizes and measures at each reporting date a loss allowance for expected
credit losses on financial assets measured at amortized cost and financial assets measured at fair
value though other comprehensive income excluding financial assets at fair value through profit or
loss.
The Company measures expected credit losses of a financial instrument in a way that reflects an
unbiased and probability-weighted amount that is determined by evaluating a range of possible
outcomes, the time value of money and reasonable and supportable information that is available
without undue cost or effort at the reporting date about past events, current conditions and
forecasts of future economic conditions.
The method of measuring expected credit losses according to K-IFRS is classified into the
following three categories.
- General approach: Financial assets other than those two approaches below and undrawn loan
commitments
- Simplified approach: Trade receivable, contract assets or lease receivables
- Credit-impaired approach: Purchased or originated credit-impaired financial assets
For the general approach, the measurement of the loss allowance for a financial instrument
depends on whether the credit risk on that financial instrument has increased significantly since

23
initial recognition. Accordingly, if the credit risk on a financial instrument has not increased
significantly since initial recognition, the Company measures the loss allowance for that financial
instrument at an amount equal to 12-month expected credit, and if the credit risk on that financial
instrument has increased significantly since initial recognition it measures the loss allowance for a
financial instrument at an amount equal to the lifetime expected credit losses. The lifetime means
the expected life of the financial instruments until maturity.
At each reporting date, it is determined whether the credit risk on a financial instrument has
increased significantly since initial recognition by using the following information and it is
considered that the credit risk has increased significantly if there is any applicable item in any of
the following items.
- Contractual payments are more than certain days past due
- In case the credit rating as of the end of the reporting period falls more than a certain notch
since the initial recognition
- Lower than the specific internal credit rating at the end of the reporting period
- Lower than the specific asset quality classification
- Other qualitative factors, etc.
The Company considers that assets are in default when the following situations are met
individually or in combination:
- Debtor is in delinquency more than certain days from the agreed payment date
- It is determined that collection of principal and interest is impossible without exercising security
right
The following indicators are used when determining the debtor’s delinquency.
- Qualitative factors (ex: breach of contract terms)
- Quantitative factors (ex: the number of days past due for each payment obligation is used when
the debtor fails to fulfill one or more obligation to make payments while the number of days past
due for units of individual financial instrument is used for certain portfolio)
- Internal observation data and information obtained externally
The definition of default applied by the Company is substantially consistent with the definition of
default as defined for regulatory capital management purposes, and the information used to
determine the default may vary depending on the circumstances.
The simplified approach always measures the loss allowance at an amount equal to lifetime
expected credit losses and credit-impaired approach recognizes the cumulative changes in
lifetime expected credit losses since initial recognition as a loss allowance for purchased or
originated credit-impaired financial assets.
b) Reflection of forward-looking information
The Company reflects forward-looking information when measuring expected credit losses.

24
Based on the assumption that the measuring element (Risk Component) has a certain correlation
with the economic fluctuation, expected credit loss is calculated to reflect future prospects in the
measurement elements via modeling between macroeconomic variables and measurement
elements.
c) Measurement of expected credit loss of financial assets measured at amortized cost
Expected credit loss of financial assets measured at amortized cost is measured as the difference
between the present value of the cash flow expected to be received and the cash flow it decides
to receive on the contract for the asset.
i) Individual assessment of expected credit losses
In case of individually significant financial assets, Individual assessment of expected credit losses
is based on management's best estimate of the present value of cash flows expected to be
recovered from the loan to be evaluated. When estimating these cash flows, the Company judges
using all available information, such as net realizable value of related collateral with financial
situation such as operating cash flow of related parties.
ii) Collective assessment of expected credit losses
For financial assets that are not individually significant, the Company includes the asset in a group
of financial assets with similar credit risk characteristics and collectively measures expected credit
losses. A loss allowance on a collective basis is measured by considering the default patterns in
the past and additional forward-looking information. When measuring the loss allowance, it
applies the PD (Probability of Default) estimated for each asset type taking into account various
factors such as collateral, type of product and lessee, credit rating, portfolio size, and collection
period . Then the default loss rate (LGD: Loss Given Default) it applied by collection type. Certain
assumptions are also applied to the measurement model of expected credit losses and input
variables are determined based on the past experience and forward looking information. The
methodology and assumptions of the model are reviewed periodically to reduce the difference
between the estimate of the allowance for loan losses and the actual loss.
d) Measurement of expected credit loss of financial assets measured at fair value through other
comprehensive income
The method to measure the expected credit loss is identical as the financial assets measured at
amortized cost or the change in the allowance for doubtful receivables is recognized in other
comprehensive income. Financial assets measured at fair value through other comprehensive
income are reclassified from other comprehensive income (loss) to income (loss) in the event of
disposal or exchange, and recognized in profit or loss.

25
e) Write-off policy
The Company writes off the doubtful receivables when the assets are deemed unrecoverable.
This decision considers the information about significant changes of financial position such that a
borrower or an obligor is in default, or the amount recoverable from security is not enough. Write-
off decision of standard small loan is generally made based on the delinquent status of loan.
(g) Leases
a) Classification
The Company classifies and accounts for leases as either a finance or operating lease,
depending on the terms. Leases where the lessee assumes substantially all of the risks and
rewards of ownership are classified as finance leases. All other leases are classified as operating
leases.
The lease arrangement classified as a finance lease is where: i) The lease transfers ownership of
the asset to the lessee by the end of the lease term, ii) The lessee has the option to purchase the
asset at a price that is expected to be sufficiently lower than the fair value at the date the option
becomes exercisable for it to be reasonably certain, at the inception of the lease, that the option
will be exercised, iii) The lease term is for the major part of the economic life of the asset even if
the title is not transferred, iv) at the inception of the lease the present value of the minimum lease
payments amounts to at least substantially all of the fair value of the leased asset, or v) The
leased assets are of such a specialized nature that only the lessee can use them without major
modifications.
Minimum lease payments include that part of the residual value that is guaranteed by the lessee,
by a party related to the lessee or by a third party unrelated to the Company that is financially
capable of discharging the obligation under the guarantee.
b) Finance leases
Where the Company has substantially all the risks and rewards of ownership, lease of property,
and equipment are classified as finance lease. An amount equal to the net investment in the
lease is presented as a receivable. Expenses that are incurred with regard to the lease contract
made but not executed at the date of the statement of financial position are accounted for as
prepaid leased assets and are classified as finance lease receivables at the inception of the lease.
Lease receivables include amounts such as commissions, legal fees, and internal costs that are
incremental and directly attributable to negotiation and arranging a lease. Each lease payment is
allocated between principal and finance income. Financial income on an uncollected part of net
investment shall be allocated to each period during the lease term so as to produce a constant
periodic rate of interest on the remaining balance of the liability.
c) Operating leases
Payments made under operating leases (net of any incentives received from the lessor) are

26
recognized in profit or loss on a straight-line basis over the period of the lease.
(h) Property and equipment
Property and equipment are initially measured at cost and after initial recognition, are carried at
cost less accumulated depreciation and accumulated impairment losses. The cost of property
and equipment includes expenditures arising directly from the construction or acquisition of the
asset, any costs 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 which it is located.
The cost of replacing a part of an item of property or equipment is recognized in the carrying
amount of the item if it is probable that the future economic benefits embodied within the part will
flow to the Company and its cost can be measured reliably. The carrying amount of the replaced
cost is derecognized. The cost of the day to day servicing of property and equipment are
recognized in profit or loss as incurred.
Property and equipment are depreciated on a straight-line basis over the estimated useful lives,
which most closely reflect the expected pattern of consumption of the future economic benefits
embodied in the asset. The estimated useful lives for the current and comparative years are as
follows:
Description Depreciation method Useful lives
Vehicles Straight-line 4 years
Fixtures and furniture Straight-line 4 years
Works of art classified under other tangible assets are not amortized due to their indefinite useful
life in nature.
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end
of each reporting period. An asset’s carrying amount is written down immediately to its
recoverable amount if the carry amount is greater than its estimated recoverable amount. Gains
and losses on disposals are determined by comparing the proceeds with the carrying amount,
and recognized within other operating income (expenses) in the statement of comprehensive
income.
(i) Intangible assets
Intangible assets are measured initially at cost and, subsequently, are carried at cost less
accumulated amortization and accumulated impairment losses.
Amortization of intangible assets is calculated on a straight-line basis over the estimated useful
lives of intangible assets from the date that they are available for use. The residual value of
intangible assets is zero.

27
Description Amortization method Useful lives
Development Straight-line 5 years
Software Straight-line 4 years
Other intangible assets Straight-line 5 years
However, as there are no foreseeable limits to the periods over which club memberships are
expected to be available for use, this intangible asset is determined as having indefinite useful
lives and not amortized.
Useful lives and amortization method of tangible assets with definite useful lives are reviewed,
and adjusted if appropriate, at the end of each reporting period. The useful life of an intangible
asset that is not being amortized is reviewed each period to determine whether events and
circumstances continue to support an indefinite useful life assessment for that asset. If they do no,
the change in the useful life assessment from indefinite to finite is accounted for as a change in
an accounting estimate.
a) Research and development
Expenditures on research activities, undertaken with the prospect of gaining new scientific or
technical knowledge and understanding, are recognized in profit or loss as incurred.
Development expenditures are capitalized only if development costs can be measured reliably,
the product or process is technically and commercially feasible, future economic benefits are
probable, and the Company intends to and has sufficient resources to complete development and
to use or sell the asset. Other development expenditures are recognized in profit or loss as
incurred.
b) Subsequent expenditures
Subsequent expenditures are capitalized only when they increase the future economic benefits
embodied in the specific asset to which it relates. All other expenditures, including expenditures
on internally generated goodwill and brands, are recognized in profit or loss as incurred.
(j) Impairment of non-financial assets
Assets that have an indefinite useful life are not subject to amortization and are tested annually
for impairment. Assets that are subject to amortization are reviewed for impairment whenever
events or changes in circumstances indicate that the carrying amount may not be recoverable.
An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its
recoverable amount. The recoverable amount is the higher of the asset’s fair value less costs to
sell and value in use. For the purposes of assessing impairment, assets are companied at the
lowest levels for which there are separately identifiable cash flows (cash generating units). Non-
financial assets that are subject to amortization suffered impairment are reviewed for possible
reversal of the impairment at the end of each reporting date. The carrying amount recovered due
to reversal of the impairment cannot exceed the carrying amount less accumulated depreciation
before the impairment loss was recognized.

28
(k) Non-derivative financial liabilities
The Company classifies non-derivative financial liabilities into financial liabilities at fair value
through profit or loss or other financial liabilities in accordance with the substance of the
contractual arrangement and the definitions of financial liabilities. The Company recognizes
financial liabilities in the statement of financial position when the Company becomes a party to the
contractual provisions of the financial liability.
a) Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading or
designated as such upon initial recognition. Subsequent to initial recognition, financial liabilities at
fair value through profit or loss are measured at fair value, and changes therein are recognized in
profit or loss. Upon initial recognition, transaction costs that are directly attributable to the
acquisition are recognized in profit or loss as incurred.
b) Other financial liabilities
Non-derivative financial liabilities other than financial liabilities at fair value through profit or loss
are classified as other financial liabilities. At the date of initial recognition, other financial liabilities
are measured at fair value minus transaction costs that are directly attributable to the acquisition.
Subsequent to initial recognition, other financial liabilities are measured at amortized cost using
the effective interest method.
The Company derecognizes a financial liability from the statement of financial position when it is
extinguished (i.e., when the obligation specified in the contract is discharged, cancelled or
expires).
(l) Net defined benefit liabilities
a) Short-term employee benefits
Short-term employee benefits are employee benefits that are expected to be settled wholly before
12 months after the end of the period in which the employees render the related service. When
an employee has rendered service to the Company during an accounting period, the Company
recognizes the undiscounted amount of short-term employee benefits expected to be paid in
exchange for that service.
b) Other long-term employee benefits
Other long-term employee benefits include employee benefits that are expected to be settled
beyond 12 months after the end of the annual reporting period in which the employees render the
related service. The Company’s net obligation in respect of long-term employee benefits is the
amount of future benefit that employees have earned in return for their service in the current and
prior periods. That benefit is discounted to determine its present value. Remeasurements are
recognized in profit or loss in the period in which they arise.

29
c) Retirement benefits: defined contribution plans
When an employee has rendered service to the Company during a period, the Company
recognizes the contribution payable to a defined contribution plan in exchange for that service as
a liability (accrued expense), after deducting any contribution already paid. If the contribution
already paid exceeds the contribution due for service before the end of the reporting period, the
Company recognizes that excess as an asset (prepaid expense) to the extent that the
prepayment will lead to a reduction in future payments or a cash refund.
d) Retirement benefits: defined benefit plans
The Company’s net obligation in respect of defined benefit plans is calculated separately for each
plan by estimating the amount of future benefit that employees have earned in the current and
prior periods, discounting that amount and deducting the fair value of any plan assets.
The calculation of defined benefit obligations is performed annually by a qualified actuary using
the projected unit credit method. When the calculation results in a potential asset for the
Company, the recognized asset is limited to the present value of economic benefits available in
the form of any future refunds from the plan or reductions in future contributions to the plan. To
calculate the present value of economic benefits, consideration is given to any applicable
minimum funding requirements.
Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses,
the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding
interest), are recognized immediately in OCI. The Company determines the net interest expense
(income) on the net defined benefit liability (asset) for the period by applying the discount rate
used to measure the defined benefit obligation at the beginning of the annual period to the then-
net defined benefit liability (asset), taking into account any changes in the net defined benefit
liability (asset) during the period as a result of contributions and benefit payments. Net interest
expense and other expenses related to defined benefit plans are recognized in profit or loss.
When the benefits of a plan are changed or when a plan is curtailed, the resulting change in
benefit that relates to past service or the gain or loss on curtailment is recognized immediately in
profit or loss. The Company recognizes gains and losses on the settlement of a defined benefit
plan when the settlement occurs.
(m) Provisions and contingent liabilities
When there is a probability that an outflow of economic benefits will occur due to a present
obligation resulting from a present legal or as a result of past events, and whose amount is
reasonably estimable, a corresponding amount of provision is recognized in the financial
statements.
Provisions are the best estimate of the expenditure required to settle the present obligation that
consider the risks and uncertainties inevitably surround many events and circumstances at the
reporting date. Where the effect of the time value of money is material, the amount of a provision

30
is the present value of the expenditure expected to be required to settle the obligation.
Provisions are reviewed at the end of each reporting period and adjusted to reflect the current
best estimates. If it is no longer probable that an outflow of resources embodying economic
benefits will be required to settle the obligation, the provision is reversed.
A possible obligation that arises from past events and whose existence will be confirmed only by
the occurrence or non-occurrence of uncertain future events, or a present obligation that arises
from past events but is not certain to occur, or cannot be reliably estimated, a disclosure regarding
the contingent liability is made in the notes to the financial statements.
(n) Foreign currency
Items included in the financial statements of each of the Company’s entities are measured using
the currency of the primary economic environment in which the entity operates (the “functional
currency”). The financial statements are presented in Korean won, which is the Company’s
functional currency.
Foreign currency transactions are translated into the functional currency using the exchange rates
prevailing at the dates of the transactions or valuation where items are remeasured. Foreign
exchange gains and losses resulting from the settlement of such transactions and from the
translation at year-end exchange rates of monetary assets and liabilities denominated in foreign
currencies are recognized in the statement of comprehensive income, except when deferred in
other comprehensive income as qualifying cash flow hedges.
(o) Equity
Ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of
ordinary shares and share options are recognized as a deduction from equity, net of any tax
effects. Preference share capital is classified as equity if it is non-redeemable, or redeemable
only at the Company’s option, and any dividends are discretionary. Dividends thereon are
recognized as distributions within equity upon approval by the Company’s shareholders.
(p) Income tax
Income tax expense comprises current and deferred tax. Current tax and deferred tax are
recognized in profit or loss except to the extent that it relates to a business combination, or items
recognized directly in equity or in other comprehensive income.
a) Current income tax
Current income tax is the expected tax payable or receivable on the taxable profit or loss for the
year, using tax rates enacted or substantively enacted at the end of the reporting period and any
adjustment to tax payable in respect of previous years. The taxable profit is different from the
accounting profit for the period since the taxable profit is calculated excluding the temporary
differences, which will be taxable or deductible in determining taxable profit (tax loss) of future

31
periods, and non-taxable or non-deductible items from the accounting profit.
b) Deferred income tax
Deferred income tax is recognized, using the liability method, on temporary differences arising
between the tax bases of assets and liabilities and their carrying amounts in the financial
statements.
However, deferred tax assets and liabilities are not recognized if they arise from initial recognition
of an asset or liability in a transaction other than a business combination that at the time of the
transaction affects neither accounting nor taxable profit or loss. Deferred income tax is
determined using tax rates and laws that have been enacted or substantially enacted by the
statement of financial position date and are expected to apply when the related deferred income
tax asset is realized or the deferred income tax liability is settled. Deferred income tax assets are
recognized only to the extent that it is probable that future taxable profit will be available against
which the temporary differences can be utilized.
The Company recognizes a deferred tax liability all taxable temporary differences associated with
investments in associates, except to the extent that the Company is able to control the timing of
the reversal of the temporary difference and it is probable that the temporary difference will not
reverse in the foreseeable future. In addition, the Company recognizes a deferred tax asset for all
deductible temporary differences arising from such investments to the extent that it is probable the
temporary difference will reverse in the foreseeable future and taxable profit will be available
against which the temporary difference can be utilized.
The carrying amount of a deferred tax asset is reviewed at the end of each reporting period and
reduces the carrying amount to the extent that it is no longer probable that sufficient taxable profit
will be available to allow the benefit of part or all of that deferred tax asset to be utilized.
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to
offset current tax assets against current tax liabilities and when the deferred income taxes assets
and liabilities relate to income taxes levied by the same taxation authority on either the same
taxable entity or different taxable entities where there is an intention to settle the balances on a
net basis. Additional tax expense arisen from dividend distribution to the Company's shareholders
is recognized when the dividend distribution is recognized as a liability.
(q) Earnings per share
The Company presents its basic and diluted earnings per ordinary share in the comprehensive
statement of income. Basic earnings per share amounts are calculated by dividing net profit for
the period attributable to ordinary shareholders of the Company by the weighted average number
of ordinary shares outstanding during the period. Diluted earnings per share amounts are
calculated by adjusting net profit attributable to ordinary shareholders of the Company for basic
earnings considered potential ordinary shares with dilution effect and weighted average number
of ordinary shares outstanding.

32
(r) Dividend distribution
Dividend distribution to the Company’s shareholders is recognized as a liability in the financial
statements in the period in which the dividends are approved by the Company’s shareholders.
5. Operating Segment Information
The Company is engaged in limited financial business (loans, installment finance, and lease, etc.)
under the Specialized Credit Financial Business Law in Korea. Therefore, segment reporting is
not disclosed as the Company’s own business is comprised of a single operating segment.
6. Restricted Financial Instruments
Restricted financial instruments as at December 31, 2018 and 2017, are as follows:
(in thousands of
Korean won)
Financial
institution 2018 2017 Restriction
Due from banks
Kookmin Bank and
2 others
9,000 9,000
Guarantee deposit for
establishing accounts
7. Trading Securities
Trading securities as at December 31, 2017, are as follows:
(in thousands of Korean won) 2017
Trading securities1
Debt securities 504,517,214
1 For liquidity management purpose, the Company holds surplus cash in excess of immediate
funding needs. These surplus cash are invested in short-term, highly liquid and investment grade
money market instruments, which provide liquidity for the Company’s short-term funding needs
and flexibility in the use of other funding sources.
Debt securities as at December 31, 2017, are as follows:
(in thousands of Korean won) Acquisition cost
Book amount
2017
Commercial Paper 503,797,372 504,517,214

33
Gain and loss from trading securities recognized in profit or loss for the year ended December 31,
2017, are as follows:
(in thousands of Korean won) Book amount
2017
Gain on valuation and disposal of trading securities 720,236
Loss on valuation and disposal of trading securities 394
8. Financial Assets Measured at Fair Value through Profit or Loss
Financial assets measured at fair value through profit or loss as at December 31, 2018, are as
follows:
Financial assets measured at fair value through profit or loss
Debt securities as at December 31, 2018, are as follows:
(in thousands of Korean won) Acquisition cost
Book amount
2018
Commercial Paper 493,788,590 494,682,969
Beneficiary certificates 1 58,804,796 59,082,401
552,593,386 553,765,370
1 The fair value of the beneficiary certificates was estimated based on the prices provided by an
external appraiser, NICE P&I Inc. The fair value of the beneficiary certificates was determined by
adding or subtracting the other assets and liabilities in the investment trust to the expected cash
flow of beneficiary certificates that is discounted using appropriate discount rate.
Gain and loss from financial assets measured at fair value through profit or loss recognized in
profit or loss for the year ended December 31, 2018, are as follows:
Interest income from financial assets measured at fair value
through profit or loss 3,693,900
Gain on valuation and disposal of financial assets measured
at fair value through profit or loss 1,680,040

34
Loss on valuation and disposal of financial assets measured
at fair value through profit or loss 427,515
9. Available-for-sale Securities
Book amount of available-for-sale securities as at December 31, 2017, is as follows:
Equity securities
Listed shares 4,550,000
Unlisted shares 150,001
Beneficiary certificates 88,379,984
93,079,985
206,452,950
Details of available-for-sale securities as at December 31, 2017, are as follows:
(in thousands of Korean won) Percentage Book amount
Number
of shares
of ownership
(%)
Acquisition
cost 2017
Listed shares
JNK Heaters Co., Ltd. 1,300,000 8.77 10,126,881 4,550,000
Unlisted shares
Tong Yang Leisure Co., Ltd.1 6,200 0.18 190,396 100,000
SHINHEUNG PETROL Co., Ltd. 670 0.64 33,556 1
Hyundai Songdo PFV Co., Ltd. 10,000 1.00 50,000 50,000
273,952 150,001
Beneficiary certificates
Hyundai Ship Investment Fund No.32 - - 7,040,000 6,903,868
Hi ocean Credit Private Special Asset 12 - - 11,357,218 11,531,858
Hi ocean Credit Private Special Asset 22 - - 11,000,000 11,086,823
Hi ocean Tanker Prof PF SA Ship 12 - - 18,595,274 18,762,185
Multi asset KDB Ocean value up Private
Fund Special Asset Trust 82 - - 10,760,449 10,744,470
KOTAM SML Private Fund Special Asset
Trust 12 - - 5,400,000 4,868,645
Hi KEXIM ECOSHIP Professional Private
Investment Trust No.62 - - 3,307,929 3,300,800
Multi asset KDB Ocean value up Private
Fund Special Asset Trust PR-22 - - 21,000,000 21,181,335
88,460,870 88,379,984

35
Number
of shares
of ownership
(%)
Acquisition
cost 2017
Debt securities
HS First Securitization Specialty Co., Ltd3 - - 15,598,000 15,794,846
Commercial Auto Sixth SPC3 - - 16,000,000 15,941,008
Commercial Auto Seventh SPC3 - - 18,000,000 17,815,716
Commercial Auto Eighth SPC3 - - 15,000,000 15,085,755
Fubon Hyundai Life Insurance 103 - - 40,000,000 38,731,000
114,598,000 113,372,965
213,459,703 206,452,950
1 The fair value of the unlisted shares was estimated based on the prices provided by an external
appraiser, NICE P&I Inc.
2 The fair value of the beneficiary certificates was estimated based on the prices provided by an
external appraiser, NICE P&I Inc. The fair value of the beneficiary certificates was determined by
adding or subtracting the other assets and liabilities in the investment trust to or from the
expected cash flow of beneficiary certificates that is discounted using appropriate discount rate.
3 The fair value of the debt securities was estimated based on the prices provided by an external
appraiser, NICE P&I Inc. The fair value of the debt securities was determined by discounting the
expected cash flows based on principal and interest arising from financial asset using appropriate
discount rate.
10. Financial Assets Measured at Fair Value through Other Comprehensive Income
Book amount of financial assets measured at fair value through other comprehensive income as
at December 31, 2018, is as follows:
Equity securities
Listed shares 6,760,000
Unlisted shares 161,849
Others 104,878,320
111,800,169
221,960,313

36
Details of financial assets measured at fair value through other comprehensive income as at
December 31, 2018, are as follows:
Number
of shares
of ownership
(%) Acquisition cost 2018
Listed shares
JNK Heaters Co., Ltd. 1,300,000 7.70 10,126,881 6,760,000
Unlisted shares
Tong Yang Leisure Co., Ltd.1
6,200 0.18 190,396 111,848
SHINHEUNG PETROL Co., Ltd. 670 0.43 33,556 1
Hyundai Songdo PFV Co., Ltd. 10,000 1.00 50,000 50,000
Others
Fubon Hyundai Life Insurance 122
- - 60,000,000 64,212,000
110,400,833 111,800,169
Debt securities
HS First Securitization Specialty Co., Ltd2 - - 2,224,000 2,241,123
Commercial Auto Seventh SPC2 - - 18,000,000 18,038,808
Commercial Auto Eighth SPC2 - - 15,000,000 15,148,650
Commercial Auto Ninth SPC2 - - 15,500,000 15,714,659
Veritas First SPC - - 33,641,000 33,641,000
JB Nineteenth SPC2 - - 4,000,000 4,047,484
Peanuts Co., Ltd. - - 11,018,000 11,018,000
109,383,000 110,160,144
219,783,833 221,960,313
1 The fair value of the unlisted shares was estimated based on the prices provided by an external
appraiser, NICE P&I Inc.
2 The fair value of the debt securities was estimated based on the prices provided by an external
appraiser, NICE P&I Inc. The fair value of the debt securities was determined by discounting the
expected cash flows based on principal and interest arising from trusted asset using appropriate
discount rate.
The above equity instruments are designated as items measured at fair value through other
comprehensive income. The Company elected to measure them at fair value through other
comprehensive income for reasons such as retention under the Company's policy. In relation to
this, the Company recognized 68,100 thousand as dividend income for the year ended
December 31, 2018.

37
Changes in loss allowance for expected credit losses of financial assets measured at fair value
through other comprehensive income for the year ended December 31, 2018, are as follows:
(in thousands of Korean won) Lifetime expected
credit losses
12-month
expected
credit losses
Not credit-
impaired
financial
assets
Credit-
impaired
financial
assets Total
January 1, 2018 233,160 56,688 - 289,848
Changes due to financial instruments
recognized at beginning balance
Reversal of additional allowance (191,372) (34,352) - (225,724)
Transfer to 12-month expected credit
losses - - - -
Transfer to not credit- impaired
financial assets - - - -
Transfer to credit- impaired financial
assets - - - -
Acquisition 286,141 - - 286,141
December 31, 2018 327,929 22,336 - 350,265
11. Investments in Associates
Details of investments in associates as at December 31, 2018 and 2017, are as follows:
(in shares and
thousands of Korean won) Location
Number of
shares
Percentage
of ownership
(%) Acquisition cost Book amount
December 31, 2018
Hyundai Card Co., Ltd. Korea 39,378,026 24.54 412,613,735 751,606,332
Fubon Hyundai Life Insurance
Co., Ltd. Korea 27,575,107 20.44 240,952,598 135,464,101
653,566,333 887,070,433
(in shares and
in thousands of Korean won) Location
Number of
shares
Percentage
of ownership
(%) Acquisition cost Book amount
December 31, 2017
Hyundai Card Co., Ltd. Korea 39,378,026 24.54 412,613,735 746,332,354
Co., Ltd. Korea 15,509,040 20.37 180,002,130 67,523,740
592,615,865 813,856,094

38
Details of valuation and other changes in investments in associates that are accounted for using
the equity method for the years ended December 31, 2018 and 2017, are as follows:
(in thousands of Korean
won) 2018
Beginning
balance
Share of changes
in retained
earnings due to
changes in
accounting
policies of
associates1
Share of changes
in other
comprehensive
income due to
changes in
accounting
policies of
associates Acquisition Dividend
Share of profit
of associates
Share of other
comprehensive
income of
associates1
Ending
balance
Hyundai Card Co., Ltd. 746,332,354 (20,805,797) - - (4,764,741) 35,083,187 (4,238,671) 751,606,332
Fubon Hyundai Life
Insurance Co., Ltd. 67,523,740 (7,575,019) (10,293,670) 60,950,468 - 12,053,852 12,804,730 135,464,101
813,856,094 (28,380,816) (10,293,670) 60,950,468 (4,764,741) 47,137,039 8,566,059 887,070,433
1 Amounts before tax effects.
(in thousands of 2017
Korean won)
Beginning
balance Acquisition
Dividend
received
Share of profit
or loss of
associates1
Share of other
comprehensive
income of
associates2
Ending
balance
Hyundai Card Co., Ltd. 186,161,175 298,793,574 (9,175,080) 265,641,148 4,911,537 746,332,354
Fubon Hyundai Life
Insurance Co., Ltd. 77,399,597 - - (12,768,602) 2,892,745 67,523,740
263,560,772 298,793,574 (9,175,080) 252,872,546 7,804,282 813,856,094
1 Share of profit or loss of Hyundai Card Co., Ltd. consists of gain on bargain purchase amounting
to 228,738 million for additional shares and share of profit of associates amounting to
36,903 million for the year ended December 31, 2017.
2 Amounts before tax effects.
The tables below provide summarized financial information for associates.
Korean won) Summarized financial information for associates1
Closing
month Total assets Total liabilities Net assets
Hyundai Card Co., Ltd. December 15,945,779,956 12,754,672,483 3,191,107,473
Co., Ltd.
December
13,434,699,983 12,726,864,056 707,835,927
Closing
month
Operating
income Profit for the year
Total
comprehensive
Dividends
received from

39
income associates
Hyundai Card Co.,
Ltd.
December 2,489,602,547 149,822,259 132,549,691 4,764,741
Fubon Hyundai Life
Insurance Co.,
Ltd.
December
1,468,482,209 69,159,056 128,416,915 -
1
Summarized financial information for associates was adjusted to reflect fair value adjustments
made at the acquisition date.
Closing
month Total assets Total liabilities Net assets
Hyundai Card Co., Ltd. December 15,416,496,792 12,546,120,736 2,870,376,056
Co., Ltd.
December
13,011,898,308 12,696,449,905 315,448,403
Closing
month
Operating
income
Profit (loss) for
the year
Total
comprehensive
income (loss)
Dividends
received from
associates
Hyundai Card Co.,
Ltd.
December 3,020,771,530 191,564,914 213,955,362 9,175,080
Fubon Hyundai Life
Insurance Co.,
Ltd.
December
1,745,201,263 (61,600,984) (47,193,664) -
1 Summarized financial information for associates was adjusted to reflect fair value adjustments
made at the acquisition date.
The tables below provide a reconciliation of the summarized financial information presented to the
book amount of its interest in the associates as at December 31, 2018 and 2017.
of Korean)
Net assets
Percentage
of ownership
(%)
Shares of net
asset2
Goodwill
Unamortized
fair value
adjustments1
Book amount
Hyundai Card Co., Ltd. 3,191,107,473 24.54 709,661,486 36,926,750 5,018,096 751,606,332
Fubon Hyundai Life
Insurance Co., Ltd. 707,835,927 20.44 124,231,751 10,142,148 1,090,202 135,464,101
3,898,943,400 833,893,237 47,068,898 6,108,298 887,070,433

40
1 Fair value adjustments are related to the value acquired at acquisition of the business such as
sales channel, IT systems and etc.
2 Hybrid bonds amounting to 400 billion issued by Hyundai Card Co., Ltd. and Fubon Hyundai
Life Insurance Co., Ltd. are excluded.
of Korean)
Net assets
Percentage
of ownership
(%)
Shares of net
asset2
Goodwill
Unamortized
fair value
adjustments1
Book amount
Hyundai Card Co., Ltd. 2,870,376,056 24.54 704,390,284 36,926,750 5,015,320 746,332,354
Fubon Hyundai Life
Insurance Co., Ltd. 315,448,403 20.37 56,120,685 10,142,148 1,260,907 67,523,740
3,185,824,459 760,510,969 47,068,898 6,276,227 813,856,094
1 Fair value adjustments are related to the value acquired at acquisition of the business such as
sales channel, IT systems and etc.
2 Hybrid bonds amounting to 40 billion issued by Fubon Hyundai Life Insurance Co., Ltd. are
excluded.
12. Financial Receivables
Details of financial receivables as at December 31, 2018 and 2017, are as follows:
Korean won)
Principal
Deferred loan
origination fees
and costs
Present value
discount
Allowance for
credit loss Book amount
Loans receivable
Factoring 205,868,444 - - (931,295) 204,937,149
Loans 5,017,659,012 40,300,479 (460,746) (68,559,783) 4,988,938,962
5,223,527,456 40,300,479 (460,746) (69,491,078) 5,193,876,111
Installment financial assets
Auto installment
receivables 592,738,108 7,418,154 - (5,424,183) 594,732,079
Durable goods installment
receivables 19,682,385 (493,831) - (4,871) 19,183,683
612,420,493 6,924,323 - (5,429,054) 613,915,762
Lease receivables
Financial lease
receivables 701,809,432 482,071 - (19,350,060) 682,941,443
Advance lease assets 3,751,318 - - - 3,751,318

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