Hci fy2019 eng

Hyundai Commercial, Inc.
Financial Statements
December 31, 2019 and 2018

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 ......................................................................................... 10-104
Report on Independent Auditor’s Review of Internal Control over Financial Reporting 105
Report on the Effectiveness of Internal Control over Financial Reporting....................... 106

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, 2019 and 2018, 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, 2019 and 2018, 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 13, 2020
This report is effective as of March 13, 2020, 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 12,31
Cash and cash equivalents 31 ￦ 333,655,082,982 ￦ 290,343,628,443
Due from banks 6 2,209,000,000 9,000,000
335,864,082,982 290,352,628,443
Securities
Financial assets measured at fair value through profit or loss 7,12,34,35 857,521,181,589 553,765,369,856
Financial assets measured at
fair value through other comprehensive income 8,12,13,34,35 287,862,036,980 221,960,312,746
Investments in associates 9 972,224,245,863 887,070,433,259
2,117,607,464,432 1,662,796,115,861
Loans receivable 10,11,12,34,35
Factoring 280,531,407,551 205,868,443,630
Allowance for credit losses (914,696,718) (931,295,658)
Loans 4,847,581,538,945 5,057,498,745,515
Allowance for credit losses (51,910,924,843) (68,559,782,811)
5,075,287,324,935 5,193,876,110,676
Installment financial assets 10,11,12,35
Auto installment financial receivables 732,928,810,836 600,156,261,478
Durable goods installment financing receivables 12,398,112,096 19,188,554,373
Allowance for credit losses (3,471,383) (4,870,809)
739,450,369,427 613,915,762,229
Lease receivables 10,11,12,14,35
Financial lease receivables 641,085,676,828 702,291,502,563
Advances for acquisition of assets to be leased 245,299,974 3,751,318,000
623,060,714,345 686,692,760,931
Lease assets 15
Operating lease 3,482,742,951 5,270,939,496
3,482,742,951 5,270,939,496
Property and equipment 16
Vehicles 578,568,300 -
Fixtures and furniture 4,197,723,152 5,775,537,980
Right-of-use assets 36 2,688,425,400 -
Others 400,376,518 370,999,664
7,865,093,370 6,146,537,644
Other assets
Intangible assets 17 25,218,535,678 21,354,767,573
Other receivables 3,12,35 11,138,346,814 10,321,522,448
Allowance for credit losses 11 (1,612,833) (2,201,083)
Accrued income 12,35 19,515,425,649 20,240,434,959
Allowance for credit losses 11 (257,978,053) (304,409,798)
Advance payments 4,990,429,325 4,121,951,560
Prepaid expenses 17,553,239,839 26,859,419,637
Suspense payments 61,411,509 61,903,558
Allowance for credit losses 11 (316,157) (309,526)
Leasehold deposits provided 12,33,35 2,051,972,867 2,025,470,552
Derivative assets 12,22,35 1,883,490,702 932,309,558
Employee benefit assets 20 2,573,090,256 -
84,726,035,596 85,610,859,438
Total assets ￦ 8,987,343,828,038 ￦ 8,544,661,714,718
2019 2018
4

Statements of Financial Position
Liabilities
Borrowings 12,35
Borrowings 18 ￦ 837,535,906,769 ￦ 1,008,706,462,393
Debentures 19 6,618,652,490,683 6,086,150,036,184
7,456,188,397,452 7,094,856,498,577
Other liabilities
Other payables 12 22,535,121,974 30,124,356,982
Accrued expenses 12 39,316,143,932 42,324,366,696
Unearned revenue 10,917,737,698 11,315,476,028
Advances receipts 4,154,579,804 3,747,674,726
Withholdings 12 1,369,786,472 2,490,076,106
Employee benefit liabilities 20 1,630,833,225 361,147,109
Guarantee deposits received 12 91,847,363,454 93,250,480,578
Lease liabilities 36 2,615,510,246 -
Other provisions 21 1,063,160,360 1,634,560,163
Current tax liabilities 3 374,614,225 779,908,098
Deferred tax liabilities 28 72,012,112,596 69,434,275,997
Derivative liabilities 12,22,35 14,132,334,982 11,977,053,228
261,969,298,968 267,439,375,711
Total liabilities 7,718,157,696,420 7,362,295,874,288
Equity
Share capital 1,23
Ordinary shares 133,333,250,000 133,333,250,000
Preferred shares 50,000,000,000 50,000,000,000
183,333,250,000 183,333,250,000
Reserves 23
Share premium 256,917,537,997 257,102,712,547
Hybrid bonds 23 398,940,580,000 398,895,100,000
Capital adjustments
Other capital adjustments (2,752,621,756) (2,397,101,756)
Accumulated other comprehensive income 30
Loss on valuation of derivatives 22 (10,583,835,964) (5,918,269,702)
Gain on valuation of financial assets measured at
fair value through other comprehensive income 5,575,259,470 1,915,273,533
Share of other comprehensive income of associates 28,170,227,479 (538,401,462)
Remeasurement of defined benefit plans (4,755,584,752) (3,706,652,951)
18,406,066,233 (8,248,050,582)
Retained earnings 3,24
Legal reserve 19,780,000,000 19,240,000,000
Discretionary reserve 18,926,804,573 28,788,024,884
Retain earnings before appropriation
(Provision (reversal) of regulatory reserve for credit losses
December 31, 2019: ￦ 557,913,130
December 31, 2018: ￦ (9,861,220,311)) 375,634,514,571 305,651,905,337
414,341,319,144 353,679,930,221
Total equity 1,269,186,131,618 1,182,365,840,430
Total liabilities and equity ￦ 8,987,343,828,038 ￦ 8,544,661,714,718
The above statements of financial position should be read in conjunction with the accompanying notes.
2019 2018
5

Statements of Comprehensive Income
Years Ended December 31, 2019 and 2018
Operating revenue
Interest income 25 ￦ 417,974,051,741 ￦ 412,393,261,172
Commission income 3,26 31,932,910,472 30,064,110,937
Income on loans receivable 33 13,967,590,564 12,102,255,075
Gain on valuation and disposal of financial assets
measured at fair value through profit or loss 7 5,939,746,191 5,373,940,255
Gain on foreign currency transactions 410,000,000 -
Dividend income 47,737,076 68,100,000
Gain related to derivatives 5,361,000,000 3,736,000,000
Other operating income 2,032,978,264 3,028,516,394
477,666,014,308 466,766,183,833
Operating expenses
Interest expense 25 193,282,539,142 182,637,011,103
Commission expenses 26 1,906,574,599 3,829,768,329
Impairment loss 11 85,465,500,656 106,525,134,622
Loss on disposal of loans receivable 33 40,744,841,105 5,036,798,613
Loss on valuation and disposal of financial assets
measured at fair value through profit or loss 7 193,862,351 427,515,493
measured at fair value through other comprehensive income 8 153,188,392 60,998,803
Loss on foreign currency transactions 5,361,000,000 3,736,000,000
Selling and administrative expenses 27,33 112,130,300,327 116,792,186,447
Loss related to derivatives 410,000,000 -
Other operating expenses 3,330,309,032 12,509,606,056
442,978,115,604 431,555,019,466
Operating income 34,687,898,704 35,211,164,367
Non-operating income
Share of profit of associates 9 61,771,420,240 47,137,039,158
Gain on disposal of property and equipment 29,373,560 2,949,471
Gain on restoration work - 6,693,221
Miscellaneous income 600,552,185 997,341,855
62,401,345,985 48,144,023,705
Non-operating expenses
Loss on disposal of property and equipment 2,334,590 118,006
Impairment loss on property and equipment - 1,972,210
Donations 90,716,690 78,968,559
Loss on restoration work 1,379,154 -
Loss related to derivatives - 1,205,908,623
Miscellaneous loss 1,215,985,575 2,518,981,584
1,310,416,009 3,805,948,982
Profit before income taxes 95,778,828,680 79,549,239,090
2019 2018
6

Statements of Comprehensive Income
Income tax expense 3,28 8,018,709,076 10,901,277,597
Profit for the year 24
(Adjusted profit after provision of regulatory reserve for credit losses:
￦ 87,760,119,604 ￦ 68,647,961,493
Other comprehensive income, net of tax 30
Items that may be subsequently reclassified to profit or loss 23,929,590,992 2,951,589,162
Items that will not be subsequently reclassified to profit or loss 2,724,525,823 5,545,753,810
26,654,116,815 8,497,342,972
Total comprehensive income for the year ￦ 114,414,236,419 ￦ 77,145,304,465
Earnings per share 29
Basic earnings per share ￦ 2,384 ￦ 2,460
Diluted earnings per share 2,178 2,147
The above statements of comprehensive income should be read in conjunction with the accompanying notes.
December 31, 2018: ￦ 72,148,658,315)
2019 2018
December 31, 2019: ￦ 88,318,032,734
7

Statements of Changes in Equity
Accumulated
other
(In Korean won) comprehensive
Notes income
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 change in accounting policies - - - - (3,973,655,740) (4,699,508,970) (8,673,164,710)
The effect of change in accounting policies (associates) - - - - (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 - - - - 9,591,817,200 - 9,591,817,200
Remeasurement of defined benefit plans 20 - - - - (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 25,000,000,000 74,824,921,510 - - - - 99,824,921,510
Issuance of hybrid bonds 23 - - 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
Balance at January 1, 2019 ￦ 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
Total comprehensive income
Profit for the year - - - - - 87,760,119,604 87,760,119,604
Other comprehensive income
Loss on valuation of deriavatives - - - - (4,665,566,262) - (4,665,566,262)
Gain from financial assets measured at
fair value through other comprehensive income - - - - 3,659,985,937 (1,598,223,368) 2,061,762,569
Share of other comprehensive income of associates 9 - - - - 28,708,628,941 - 28,708,628,941
Remeasurement of defined benefit plans 20 - - - - (1,048,931,801) - (1,048,931,801)
Share of changes in retained earnings of associates 9 - - - - - (1,308,163,326) (1,308,163,326)
- - - - 26,654,116,815 84,853,732,910 111,507,849,725
Transactions with owners
Annual dividend 23 - - - - - (5,400,000,000) (5,400,000,000)
Share-based payment expenses - (185,174,550) - - - - (185,174,550)
Issuance of hybrid bonds 23 - - 119,689,960,000 - - - 119,689,960,000
Repayments of hybrid bonds - - (119,644,480,000) (355,520,000) - - (120,000,000,000)
Interest paid to hybrid bonds - - - - - (18,792,343,987) (18,792,343,987)
- (185,174,550) 45,480,000 (355,520,000) - (24,192,343,987) (24,687,558,537)
Balance at December 31, 2019 ￦ 183,333,250,000 ￦ 256,917,537,997 ￦ 398,940,580,000 ￦ (2,752,621,756) ￦ 18,406,066,233 ￦ 414,341,319,144 ￦ 1,269,186,131,618
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 31 ￦ (412,465,873,274) ￦ (788,520,284,733)
Interest received 464,460,008,229 459,418,808,616
Interest paid (179,216,481,616) (160,375,542,676)
Dividends received 47,737,076 68,100,000
Income taxes paid (5,222,497,324) (11,848,872,900)
Net cash outflow from operating activities (132,397,106,909) (501,257,791,693)
Cash flows from investing activities
Payments for financial assets
measured at fair value through profit or loss (96,248,800,400) (6,440,000,000)
Repayments of financial assets
measured at fair value through profit or loss 25,592,991,328 36,096,073,896
Payments for financial assets
measured at fair value through other comprehensive income (119,347,000,000) (133,000,000,000)
Repayments of financial assets
measured at fair value through other comprehensive income 56,012,090,764 38,214,418,738
Payments for investments in associates (3,000,000,000) (60,950,467,852)
Dividends from investments in associates 7,560,580,992 4,764,741,146
Proceeds from disposal of property and equipment (1,190,916,368) (3,296,256,250)
Payments for property and equipment 1,439,835,884 3,057,000
Payments for intangible assets (19,556,577,913) (6,833,879,362)
Decrease in leasehold deposits provided 546,549,365 342,208,893
Increase in leasehold deposits provided (549,182,414) (77,764,623)
Net cash outflow from investing activities (148,740,428,762) (131,177,868,414)
Cash flows from financing activities
Proceeds from borrowings 1,022,022,000,000 985,904,240,000
Repayments of borrowings (1,193,192,555,624) (904,153,550,375)
Issuance of debentures 4,423,200,524,822 4,435,831,951,154
Repayments of debentures (3,900,075,000,000) (4,073,000,000,000)
Proceeds from issuance of ordinary shares (185,174,550) 141,002,981,500
Issuance of convertible preferred shares - 99,824,921,510
Lease payments (2,710,298,686) -
Dividends paid (5,400,000,000) (20,000,000,000)
Issuance of hybrid bonds 119,689,960,000 99,742,160,000
Repayments of hybrid bonds (120,000,000,000) -
Interest paid to hybrid bonds (18,900,465,752) (18,764,999,998)
Net cash inflow from financing activities 324,448,990,210 746,387,703,791
Net cash increase in cash and cash equivalents 43,311,454,539 113,952,043,684
Cash and cash equivalents at beginning of the year 31 290,343,628,443 176,391,584,759
Cash and cash equivalents at end of the year 31 ￦ 333,655,082,982 ￦ 290,343,628,443
The above statements of cash flows should be read in conjunction with the accompanying notes.
2019 2018
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, 2019, 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(e): Impairment of financial assets
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 20: Employee Benefit Liabilities (Assets) – Actuarial assumptions
- Note 28: Income Tax Expenses
- Note 32: 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.

12
- 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 12.
(e) Approval of Issuance of the Financial Statements
The financial statements 2019 were approved for issue by the Board of Directors on February 12,
2020 and will be reported at the shareholders' meeting on March 27, 2020.
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 January 1, 2019.
a) Enactment of Korean IFRS 1116 Leases
Korean IFRS 1116 Leases replaces Korean IFRS 1017 Leases. Under the new standard, with
implementation of a single lease model, lessee is required to recognize assets and liabilities for all
lease which lease term is over 12 months and underlying assets are not low value assets. A
lessee is required to recognize a right-of-use asset and a lease liability representing its obligation
to make lease payments.
With implementation of Korean IFRS 1116 Lease, the Company has changed accounting policy.
The Company has adopted Korean IFRS 1116 retrospectively, as permitted under the specific
transitional provisions in the standard, and recognized the cumulative impact of initially applying
the standard as at January 1, 2019, the date of initial application. The Company has not restated
comparatives for the 2018 reporting period. The impact of the adoption of the leasing standard
and the new accounting policies are disclosed in Note 36.
b) Amendment 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

13
derecognition, a modification gain or loss shall be recognized in profit or loss. The amendment
does not have a significant impact on the financial statements.
c) 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 amendment does not have a
significant impact on the financial statements.
d) 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. The amendments also clarify
that Korean IFRS 1109 requirements are applied to long-term interests that form part of the
entity’s net investment in an associate or joint venture before applying the impairment
requirements of Korean IFRS 1028. The amendment does not have a significant impact on the
financial statements.
e) 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. The enactment does not have a significant impact on the financial statements.
f) Amendments to Korean IFRS 1109 and Korean IFRS 1107 - exceptions so that entities would
apply hedge accounting during the period of uncertainty due to the interest rate benchmark reform
In the hedging relationship, an entity shall assume that the interest rate benchmark on which the
hedge cash flows are based is not altered as a result of interest rate benchmark reform when
determining whether a forecast transaction is highly probable and prospectively assessing
hedging effectiveness. For a hedge of a non-contractually specified benchmark component of
interest rate risk, an entity shall apply the requirement that the risk component shall be separately
identifiable only at the inception of the hedging relationship. The application of this exception is
ceased either when the uncertainty arising from interest rate benchmark reform is no longer
present with respect to the timing and the amount of the interest rate benchmark-based cash
flows of the hedge item, or when the hedging relationship is discontinued. These amendments will
be effective for annual periods beginning on or after January 1, 2020. However, the Company early
adopted the amendments as it is permitted.

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g) Annual Improvements to Korean IFRS 2015 – 2017 Cycle:
i) 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. The amendment does not have a significant impact on the
financial statements.
ii) 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 joint
operation constitutes a business. In such cases, previously held interests in the joint operation
are not remeasured. The amendment does not have a significant impact on the financial
statements.
iii) Paragraph 57A of Korean IFRS 1012 Income Tax
The amendment 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. The amendment does not have a significant impact on the financial statements.
iv) 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. The
amendment does not have a significant impact on the financial statements.
(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, 2019 reporting periods and
have not been early adopted by the Company are set out below.
a) Amendments to Korean IFRS 1001 Presentation of Financial Statements and Korean IFRS
1008 Accounting Policies, Changes in Accounting Estimates and Errors – Definition of Material
The amendments clarify the explanation of the definition of material and amended Korean IFRS
1001 and Korean IFRS 1008 in accordance with the clarified definitions. Materiality is assessed
by reference to omission or misstatement of material information as well as effects of immaterial
information, and to the nature of the users when determining the information to be disclosed by
the Company. These amendments should be applied for annual periods beginning on or after

15
January 1, 2020, and earlier application of permitted. The Company does not expect that these
amendments have a significant impact on the financial statements.
b) Amendments to Korean IFRS 1103 Business Combination – Definition of a Business
To consider the integration of the required activities and assets as a business, the amended
definition of a business requires an acquisition to include an input and a substantive process that
together significantly contribute to the ability to create outputs and excludes economic benefits
from the lower costs. An entity can apply a concentration test, an optional test, where
substantially all of the fair value of gross assets acquired is concentrated in a single asset or a
group of similar assets, the assets acquired would not represent a business. These amendments
should be applied for annual periods beginning on or after January 1, 2020, and earlier
application of permitted. The Company does not expect that these amendments have a significant
impact on the financial statements.
c) IFRS Interpretations Committee agenda decisions – lease term
On December 16, 2019, the IFRS Interpretations Committee (IFRIC) concluded that the
enforceable period of a lease under IFRS 16, “Leases”, when the lessee and the lessor each has
the right to terminate the lease without permission from the other party, reflects broader
economics, not just legal rights and termination cash payments. The Company is assessing the
impact that the change in accounting policy of enforceable period will have on the Company’s
financial statements, and the Company will apply the impact in the financial statements once the
assessment is completed.
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 36, accounting policies used to prepare the financial
statements as at and for the year ended December 31, 2019, are consistent with the accounting
policies used to prepare the financial statements as at and for the year ended December 31, 2018.
(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. If an associate uses
accounting policies other than those of the Company for like transactions and events in similar
circumstances, if necessary, adjustments shall be made to make the associate’s accounting
policies conform to those of the Company when the associate’s financial statements are used by
the Company in applying the equity method.

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(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
The Company classifies its financial assets in the following measurement categories:
 those to be measured at fair value through profit or loss
 those to be measured at fair value through other comprehensive income, and
 those to be measured at amortized cost.
The classification depends on the Company’s business model for managing the financial assets
and the contractual terms of the cash flows.
For financial assets measured at fair value, gains and losses will either be recorded in profit or
loss or other comprehensive income. For investments in debt instruments, this will depend on the
business model in which the investment is held. The Company reclassifies debt investments
when, and only when its business model for managing those assets changes.
For investments in equity instruments that are not held for trading, this will depend on whether the
Company has made an irrevocable election at the time of initial recognition to account for the
equity investment at fair value through other comprehensive income. Changes in fair value of non-
designated equity investment are recognized in profit or loss.
b) Measurement
At initial recognition, the Company measures a financial asset at its fair value plus, in the case of
a financial asset not at fair value through profit or loss, transaction costs that are directly
attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at
fair value through profit or loss are expensed in profit or loss.
Financial assets with embedded derivatives are considered in their entirety when determining
whether their cash flows are solely payment of principal and interest.
A. Debt instruments
Subsequent measurement of debt instruments depends on the Company’s business model for
managing the asset and the cash flow characteristics of the asset. The Company classifies its
debt instruments into one of the following three measurement categories:

17
 Amortized cost: Assets that are held for collection of contractual cash flows where those
cash flows represent solely payments of principal and interest are measured at amortized
cost. A gain or loss on a debt investment that is subsequently measured at amortized
cost and is not part of a hedging relationship is recognized in profit or loss when the asset
is derecognized or impaired. Interest income from these financial assets is included in
‘interest income’ using the effective interest rate method.
 Fair value through other comprehensive income: Assets that are held for collection of
contractual cash flows and for selling the financial assets, where the assets’ cash flows
represent solely payments of principal and interest, are measured at fair value through
other comprehensive income. Movements in the carrying amount are taken through other
comprehensive income, except for the recognition of impairment loss (reversal of
impairment loss), interest income and foreign exchange gains and losses which are
recognized in profit or loss. When the financial asset is derecognized, the cumulative gain
or loss previously recognized in other comprehensive income is reclassified from equity
to profit or loss. Interest income from these financial assets is included in ‘interest income’
using the effective interest rate method. Foreign exchange gains and losses are
presented in ‘Gain on foreign currency transactions or loss on foreign currency
transactions’ and impairment losses are presented in ‘Loss on valuation and disposal of
financial assets measured at fair value through other comprehensive income’.
 Fair value through profit or loss: Assets that do not meet the criteria for amortized cost or
fair value through other comprehensive income are measured at fair value through profit
or loss. A gain or loss on a debt investment that is subsequently measured at fair value
through profit or loss and is not part of a hedging relationship is recognized in profit or
loss and presented net in the statement of profit or loss within ‘Gain and loss from
financial assets measured at fair value through profit or loss’ in the year in which it arises.
B. Equity instruments
The Company subsequently measures all equity investments at fair value. Where the Company’s
management has elected to present fair value gains and losses on equity investments, which held
for long-term investment or strategic purpose, in other comprehensive income, there is no
subsequent reclassification of fair value gains and losses to profit or loss following the
derecognition of the investment. Dividend income from such investments continue to be
recognized in profit or loss as ‘dividend income’ when the right to receive payments is established.
Changes in the fair value of financial assets at fair value through profit or loss are recognized in
‘Gain and loss from financial assets measured at fair value through profit or loss’ in the statement
of profit or loss as applicable. Impairment loss (reversal of impairment loss) on equity investments
measured at fair value through other comprehensive income are not reported separately from
other changes in fair value.

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c) 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.
(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

19
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
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.

20
(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.
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.

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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
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.

22
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.
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

23
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.
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
Lease income from operating leases where the Company is a lessor is recognized in income on a
straight-line basis over the lease term. Initial direct costs incurred in obtaining an operating lease
are added to the carrying amount of the underlying asset and recognized as expense over the
lease term on the same basis as lease income. The respective leased assets are included in the
statement of financial position based on their nature. The Company did not need to make any
adjustments to the accounting for assets held as lessor as a result of adopting the new leasing
standard.
The Company leases offices and cars. From January 1, 2019, leases are recognized as a right-of-
use asset and a corresponding liability at the date at which the leased asset is available for use
by the Company. Each lease payment is allocated between the liability and finance cost. The
finance cost is charged to profit or loss over the lease period so as to produce a constant periodic
rate of interest on the remaining balance of the liability for each period. The right-of-use asset is
depreciated over the shorter of the asset's useful life and the lease term on a straight-line basis.
Contracts may contain both lease and non-lease components. The Company allocates the
consideration in the contract to the lease and non-lease components based on their relative
stand-alone prices. However, for leases of real estate for which the Company is lessee, the
Company applies the practical expedient which has elected not to separate lease and non-lease
components and instead accounts for these as a single lease component.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease
liabilities include the net present value of the following lease payments:
 Fixed payments (including in-substance fixed payments), less any lease incentives
receivable
 Variable lease payment that are based on an index or a rate
 Amounts expected to be payable by the lessee under residual value guarantees
 The exercise price of a purchase option if the lessee is reasonably certain to exercise that
option, and

24
 Payments of penalties for terminating the lease, if the lease term reflects the lessee
exercising that option
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot
be determined, the lessee’s incremental borrowing rate is used, being the rate that the lessee
would have to pay to borrow the funds necessary to obtain an asset of similar value in a similar
economic environment with similar terms and conditions.
To determine the incremental borrowing rate, the Company:
 where possible, uses recent third-party financing received by the individual lessee as a
starting point, adjusted to reflect changes in financing conditions since third party
financing was received
 makes adjustments specific to the lease, for example term, country, currency and security.
Right-of-use assets are measured at cost comprising the following:
 the amount of the initial measurement of lease liability
 any lease payments made at or before the commencement date less any lease
incentives received
 any initial direct costs, and
 restoration costs
The right-of-use asset is depreciated over the shorter of the asset's useful life and the lease term
on a straight-line basis. If the Company is reasonably certain to exercise a purchase option, the
right-of-use asset is depreciated over the underlying asset’s useful life.
Payments associated with short-term leases and leases of low-value assets are recognized on a
straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term
of 12 months or less. Low-value assets comprise small items of office equipment.
The Company determines the lease term as the non-cancellable period of a lease, together with
both (a) periods covered by an option to extend the lease if the lessee is reasonably certain to
exercise that option; and (b) periods covered by an option to terminate the lease if the lessee is
reasonably certain not to exercise that option. When the lessee and the lessor each has the right
to terminate the lease without permission from the other party, the Company should consider a
termination penalty in determining the period for which the contract is enforceable.
(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

25
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 and others 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.
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

26
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.
(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.

27
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.
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

28
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 period. Where the effect of the time value of money is material, the amount of a
provision 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

29
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 translation
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.
If the Company is an issuer of a financial instruments, the Company classifies financial
instruments, or their component parts, as a financial liability or an equity instrument depending on
the substance of the contractual arrangement of such financial instruments. Hybrid bonds are
classified as equity instruments and presented in equity, if the Company has an unconditional
right to avoid delivering cash or financial asset to settle a contractual obligation.
(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
periods, and non-taxable or non-deductible items from the accounting profit.

30
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 profit 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.

31
(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, 2019 and 2018, are as follows:
(in thousands of
Korean won)
Financial
institution 2019 2018 Restriction
Due from banks
Kookmin Bank and
2 others
2,209,000 9,000
Guarantee deposit for
establishing accounts
and secured deposits
7. Financial Assets Measured at Fair Value through Profit or Loss
Financial assets measured at fair value through profit or loss as at December 31, 2019 and 2018,
are as follows:
(in thousands of Korean won) 2019 2018
Financial assets measured at fair value through
profit or loss
Debt securities 851,925,807 553,765,370
Equity securities 5,595,375 -
857,521,182 553,765,370

32
Debt securities as at December 31, 2019 and 2018, are as follows:
(in thousands of Korean won)
Book amount
2019 2018
Commercial Paper 726,019,769 494,682,969
Corporate bond 1 8,925,120 -
Beneficiary certificates 2 116,980,918 59,082,401
851,925,807 553,765,370
1 The fair value of debt securities is recognized at a fair value provided by an external appraiser,
NICE P&I Inc. The fair value of the financial assets is determined by discounting the expected
cash flows based on principal and interest arising from trusted asset at an appropriate discount
rate.
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 the expected cash
flow of beneficiary certificates that is discounted using appropriate discount rate.
Equity securities as at December 31, 2019 and 2018, are as follows:
Book amount
2019 2018
Equity securities 1 5,595,375 -
1 The fair value of the debt securities is recognized based on the prices provided by an external
appraiser, NICE P&I Inc.
In relation to this, the Company recognized 47,737 thousand as dividend income for the year
ended December 31, 2019.

33
Gain and loss from financial assets measured at fair value through profit or loss recognized in
profit or loss for the years ended December 31, 2019 and 2018, are as follows:
Book amount
2019 2018
Interest income from financial assets measured
at fair value through profit or loss 3,003,421 3,693,900
Gain on valuation and disposal of financial assets
measured at fair value through profit or loss 2,936,326 1,680,040
measured at fair value through profit or loss 193,862 427,515
8. 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, 2019 and 2018, is as follows:
Book amount
2019 2018
Equity securities
Listed shares3 - 6,760,000
Unlisted shares1 704,901 161,849
Others2 105,892,400 104,878,320
106,597,301 111,800,169
Debt securities
Corporate bond2 177,535,338 99,142,144
Others 3,729,398 11,018,000
181,264,736 110,160,144
287,862,037 221,960,313
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 equity and debt securities was determined by
discounting the expected cash flows based on principal and interest arising from trusted asset
using appropriate discount rate.
3 For the year ended December 31, 2019, the Company disposed of its equity securities
measured at fair value through other comprehensive income for recovering the investments, and
the fair value and gain or loss accumulated upon disposal are 8,018 million and (-) 2,108
million, respectively.

34
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.
Changes in loss allowance for expected credit losses of financial assets measured at fair value
through other comprehensive income for the years ended December 31, 2019 and 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, 2019 327,929 22,336 - 350,265
Changes due to financial instruments
recognized at beginning balance
Reversal of additional allowance (92,258) (1,469) - (93,727)
Transfer to 12-month expected credit
losses - - - -
Transfer to not credit- impaired
financial assets - - - -
Transfer to credit- impaired financial
assets - - - -
Acquisition 274,386 - - 274,386
Disposal (27,680) - - (27,680)
December 31, 2019 482,377 20,867 - 503,244
(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

35
9. Investments in Associates
Details of investments in associates as at December 31, 2019 and 2018, are as follows:
(in shares, in thousands of units,
and in thousands of Korean won) Location
Number of
shares/
units
Percentage
of ownership
(%) Acquisition cost Book amount
December 31, 2019
Hyundai Card Co., Ltd. Korea 39,378,026 24.54 412,613,735 779,954,551
Fubon Hyundai Life Insurance
Co., Ltd. Korea 27,575,107 20.44 240,952,598 189,272,052
Apollon Private Equity Fund Korea 3,000,000 29.85 3,000,000 2,997,643
656,566,333 972,224,246
(in shares and
in 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
Co., Ltd. Korea 27,575,107 20.44 240,952,598 135,464,101
653,566,333 887,070,433

36
Details of valuation and other changes in investments in associates that are accounted for using
the equity method for the years ended December 31, 2019 and 2018, are as follows:
(in thousands of
Korean won) 2019
Beginning
balance Acquisition Dividend
Share of profit
of associates
Share of other
comprehensive
income of
associates1
Share of
changes in
retained
earnings of
associates1 Ending balance
Hyundai Card Co.,
Ltd. 751,606,332 - (7,560,581) 37,673,687 (1,764,887) - 779,954,551
Fubon Hyundai Life
Insurance Co., Ltd. 135,464,101 - - 24,100,091 31,016,023 (1,308,163) 189,272,052
Apollon Private
Equity Fund - 3,000,000 - (2,357) - - 2,997,643
887,070,433 3,000,000 (7,560,581) 61,771,421 29,251,136 (1,308,163) 972,224,246
1 Amounts before tax effects.
(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.

37
The tables below provide summarized financial information for associates.
(in thousands of 2019
Korean won) Summarized financial information for associates1
Closing
month Total assets Total liabilities Net assets
Hyundai Card Co., Ltd. December 17,447,394,320 14,140,767,975 3,306,626,345
Co., Ltd.
December 16,251,568,145 15,279,745,440 971,822,705
Apollon Private Equity Fund December 10,050,014 7,912 10,042,102
Closing
month
Operating
income
Profit (loss) for
the year
Total
comprehensive
income
Dividends
received from
associates
Hyundai Card Co.,
Ltd.
December 2,373,335,538 167,620,110 160,428,207 7,560,581
Fubon Hyundai Life
Insurance Co., Ltd.
December 2,407,325,904 125,482,274 278,181,657 -
Apollon Private
Equity Fund
December 14 (7,898) (7,898) -
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 15,945,779,956 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
income
Dividends
received from
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 -

38
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, 2019 and 2018.
of Korean)
Net assets
Percentage
of ownership
(%)
Shares of net
asset2
Goodwill
Unamortized
fair value
adjustments1
Book amount
Hyundai Card Co., Ltd. 3,306,626,345 24.54 738,009,706 36,926,750 5,018,095 779,954,551
Fubon Hyundai Life
Insurance Co., Ltd. 971,822,705 20.44 178,183,080 10,142,148 946,824 189,272,052
Apollon Private Equity
Fund 10,042,102 29.85 2,997,643 - - 2,997,643
4,288,491,152 919,190,429 47,068,898 5,964,919 972,224,246
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 300 billion and 100 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. 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
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 300 billion and 100 billion issued by Hyundai Card Co., Ltd.
and Fubon Hyundai Life Insurance Co., Ltd. are excluded.

39
10. Financial Receivables
Details of financial receivables as at December 31, 2019 and 2018, are as follows:
(in thousands of Korean won) 2019
Principal
Deferred loan
origination fees
and costs and
others
Allowance for
credit loss Book amount
Loans receivable
Factoring 280,531,408 - (914,697) 279,616,711
Loans 4,820,518,282 27,063,257 (51,910,925) 4,795,670,614
5,101,049,690 27,063,257 (52,825,622) 5,075,287,325
Installment financial assets
Auto installment receivables 724,622,038 8,306,772 (5,873,082) 727,055,728
Durable goods installment
receivables 12,686,772 (288,660) (3,471) 12,394,641
737,308,810 8,018,112 (5,876,553) 739,450,369
Lease receivables
Financial lease receivables 641,069,133 16,544 (18,270,263) 622,815,414
Advance lease assets 245,300 - - 245,300
641,314,433 16,544 (18,270,263) 623,060,714
6,479,672,933 35,097,913 (76,972,438) 6,437,798,408
Principal
Deferred loan
origination fees
and costs and
others
Allowance for
credit loss Book amount
Loans receivable
Factoring 205,868,444 - (931,295) 204,937,149
Loans 5,017,659,012 39,839,733 (68,559,783) 4,988,938,962
5,223,527,456 39,839,733 (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
705,560,750 482,071 (19,350,060) 686,692,761
6,541,508,699 47,246,127 (94,270,192) 6,494,484,634

Notes to the financial statements
40
Changes in credit exposure amount of loans and receivables for the years ended December 31, 2019 and 2018, are as follows:
Loans receivable Installment financial assets Lease receivables1
12-month
expected credit
losses
Lifetime expected
credit losses
Lifetime
expected
credit losses of
impaired
receivables
12-month
expected credit
losses
Lifetime
expected
credit losses
Lifetime
expected
credit losses of
impaired
receivables
12-month
expected credit
losses
Lifetime
expected
credit losses
Lifetime
expected
credit losses of
impaired
receivables Total
Beginning 4,670,770,317 519,042,235 33,714,904 565,434,005 43,901,620 3,084,868 578,249,533 110,224,191 13,335,708 6,537,757,381
Transfer to 12-month expected
credit losses 106,018,928 (105,946,904) (72,024) 13,370,637 (13,274,776) (95,861) 14,769,741 (14,769,741) - -
Transfer to lifetime expected
credit losses (313,047,078) 313,352,485 (305,407) (38,239,474) 38,269,918 (30,444) (45,327,093) 46,147,091 (819,998) -
credit losses of impaired
receivables (17,343,714) (6,326,562) 23,670,276 (1,861,091) (396,972) 2,258,063 (4,669,990) (6,144,676) 10,814,666 -
Increase 4,818,140,512 107,561,333 4,807,073 417,423,381 9,846,215 426,950 271,675,256 27,913,676 2,805,629 5,660,600,025
Recovered (4,577,651,807) (251,210,215) (9,957,395) (277,224,416) (21,239,912) (1,078,026) (282,399,345) (61,662,233) (7,675,115) (5,490,098,464)
Disposal (repurchase) (79,136,141) (91,543,527) (19,758,658) 3,871,095 (4,007,967) (1,322,327) (2,393,487) (4,008,853) (3,043,462) (201,343,327)
Write-off (5,288,536) (7,976,304) (10,464,101) (245,669) (468,360) (1,092,647) (31,388) (81,332) (1,839,645) (27,487,982)
Ending 4,602,462,481 476,952,541 21,634,668 682,528,468 52,629,766 2,150,576 529,873,227 97,618,123 13,577,783 6,479,427,633
1 Excluding advances for acquisition of lease assets to be leased.

Notes to the financial statements
41
Loans receivable Installment financial assets Lease receivables1
12-month
expected credit
losses
Lifetime expected
credit losses
Lifetime
expected
credit losses of
impaired
receivables
12-month
expected credit
losses
Lifetime
expected
credit losses
Lifetime
expected
credit losses of
impaired
receivables
12-month
expected credit
losses
Lifetime
expected
credit losses
Lifetime
expected
credit losses of
impaired
receivables Total
Beginning 4,463,806,375 272,743,237 21,740,582 440,643,579 22,804,467 1,090,911 625,472,664 71,412,644 11,747,234 5,931,461,693
Transfer to 12-month expected
credit losses 40,883,459 (40,783,358) (100,101) 4,023,295 (4,023,295) - 8,400,302 (8,400,302) - -
credit losses (354,960,674) 355,584,868 (624,194) (28,115,724) 28,115,724 - (80,152,815) 80,541,119 (388,304) -
credit losses of impaired
receivables (23,624,458) (9,077,841) 32,702,299 (2,369,495) (628,820) 2,998,315 (7,843,354) (3,962,168) 11,805,522 -
Increase 4,722,954,705 163,451,560 13,132,242 429,883,116 14,446,007 1,477,220 327,826,563 25,914,150 2,786,252 5,701,871,815
Recovered (3,887,275,891) (178,986,408) (15,760,907) (234,439,772) (15,171,144) (1,432,979) (292,496,557) (53,047,744) (10,548,040) (4,689,159,442)
Disposal (281,636,338) (36,313,815) (9,569,635) (43,751,864) (1,356,914) (559,515) (2,455,034) (2,023,306) (817,327) (378,483,748)
Write-off (9,376,861) (7,576,008) (7,805,382) (439,130) (284,405) (489,084) (502,236) (210,202) (1,249,629) (27,932,937)
Ending 4,670,770,317 519,042,235 33,714,904 565,434,005 43,901,620 3,084,868 578,249,533 110,224,191 13,335,708 6,537,757,381
1 Excluding advances for acquisition of lease assets to be leased.

Hci fy2019 eng

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