G
G
G
HYUNDAI MOTOR COMPANY
AND ITS SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
AS OF AND FOR THE YEARS ENDED
DECEMBER 31, 2021 AND 2020
ATTACHMENT: INDEPENDENT AUDITORS’ REPORT
HYUNDAI MOTOR COMPANY
Contents
INDEPENDENT AUDITORS’ REPORT ---------------------------------------------------------------- 1
CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION ----------------------------------- 6
CONSOLIDATED STATEMENTS OF INCOME ------------------------------------------------------ 8
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME --------------------------- 9
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY ------------------------------------ 10
CONSOLIDATED STATEMENTS OF CASH FLOWS -----------------------------------------------
12
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ---------------------------------14
152, Teheran-ro, Gangnam-gu, Seoul 06236
(Yeoksam-dong, Gangnam Finance Center 27th Floor)
Republic of Korea
Independent Auditors’ Report
To the Board of Directors and Shareholders
Hyundai Motor Company:
Report on the Audit of the Consolidated Financial Statements
Opinion
We have audited the consolidated financial statements of Hyundai Motor Company and its subsidiaries
(“the Group”), which comprise the consolidated statements of financial position as of December 31,
2021 and 2020, the consolidated statements of income, comprehensive income, changes in equity and
cash flows for the years then ended, and notes, comprising significant accounting policies and other
explanatory information.
In our opinion, the accompanying consolidated financial statements present fairly, in all material
respects, the consolidated financial position of the Group as of December 31, 2021 and 2020, and its
consolidated financial performance and its consolidated cash flows for the years then ended in
accordance with Korean International Financial Reporting Standards (“K-IFRS”).
Basis for Opinion
We conducted our audits in accordance with Korean Standards on Auditing (KSAs). Our responsibilities
under those standards are further described in the Auditors’ Responsibilities for the Audit of the
Consolidated Financial Statements section of our report. We are independent of the Group in
accordance with the ethical requirements that are relevant to our audit of the consolidated financial
statements in Republic of Korea, and we have fulfilled our other ethical responsibilities in accordance
with these requirements. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the consolidated financial statements as of and for the year ended December 31, 2021.
These matters were addressed in the context of our audit of the consolidated financial statements as
a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters
1) Valuation of warranty provisions
As described in Note 2 (20) and Note 17 to the consolidated financial statements, the Group recognized
warranty provision in the amount of
9,048,185 million as of December 31, 2021.
The Group provides customers with free warranty services for guaranteed period and free repair
services in the event of recall and campaign. The Group aggregates sales volume by vehicle model and
estimates warranty expenses which are expected to be incurred based on historical data of the actual
warranty costs. Warranty provisions are measured at the present value based on the expected
expenditure of warranty costs and discount rates. In order to measure and recognize warranty
provisions, management applies assumptions to estimate expected warranty cost per unit by vehicle
model and expected number of repair cases and applies discount rates to measure the present value
of provisions. Management uses historical data of the actual warranty costs to estimate expected
warranty cost per unit by vehicle model and expected number of repair cases. We determined the
valuation of warranty provision as a key audit matter because errors in aggregation of actual warranty
costs and sales volume by vehicle models or in assumptions used to estimate future warranty
expenses and discount rates would have a significant impact on the consolidated financial statements.
The primary procedures we performed to address this key audit matter included the following:
- Understanding of the process to measure and recognize warranty provisions and testing of
relevant controls.
- Testing of completeness and accuracy of vehicles sold used for estimation through inspection
of related documents.
- Evaluating reasonableness of assumptions applied for expected warranty cost per unit by
vehicle model by comparing warranty expenses incurred in the current period to expected
warranty expenses in the prior period.
- Evaluating reasonableness of assumptions applied for expected number of repair cases based
on historical data analysis.
-
Testing of accuracy of warranty provision balance by inspecting documents related to historical
data of the actual warranty expenses on a sample basis and testing of recalculation.
- Testing of appropriateness of discount rates by comparing to external sources of information.
2) Valuation of financial services receivables
As described in Note 2.(8) and Note 14 to the consolidated financial statements, the Group recognized
financial services receivables, net and loss allowance in the amount of
81,029,132 million and
1,551,987 million as of December 31, 2021, respectively.
The Group recognizes allowance for credit loss using the expected credit loss (ECL) model for financial
services receivables in accordance with K-IFRS 1109 ‘financial instruments’. Judgment of the
management is required to determine whether the receivable has experienced a significant increase in
credit risk and other assumptions ap
plied to the ECL model, includin
g credit rating
and macroeconomic
variables. In addition, the Group us
es historical transaction data su
ch as delinquency days, bankruptcy
and collection in determining assumptions used in the ECL model. Since the impact on the consolidated
financial statements due to errors in the assumptions applied to the ECL model is significant, we
determined that valuation of financial services receivables is a key audit matter.
The primary procedures we performed to address this key audit matter included the following:
- Assessing whether the Group’s acc
ounting policies comply with
the requirements in K-IFRS
1109
‘Financial Instruments’.
- Understanding of the process over the measurement of credit loss allowance on financial
services receivables and testing of relevant controls.
- On a sample basis, assessing the credit rating and classification of credit quality including the
identification of significant increase credit risk, through inspection of related documents.
- On a sample basis, checking the source data for probability of default and loss given default
and testing of appropriateness of calculation methods used for the estimation through
recalculation.
Other matter
The procedures and practices utilized in the Republic of Korea to audit such consolidated financial
statements may differ from those generally accepted and applied in other countries.
Responsibilities of Management and Those Ch
arged with Governance
for the Consolidated
Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial
statements in accordance with K-IFRS, and for such internal control as management determines is
necessary to enable the preparation of consolidated financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the
Group’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
Group or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Group’s financial reporting process.
Management is responsible for presenting and marking up the consolidated financial statements in
compliance with the requirements set out in the Delegated Regulation 2019/815 on European Single
Electronic Format (“ESEF Regulation”).
Auditors’ Responsibilities for
the Audit of the
Consolidated Financial Statements Our objectives are to obtain reasonable assurance about whether the consolidated financial statements
as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’
report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a
guarantee that an audit conducted in accordance with KSAs will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error and are considered material if, individually
or in the aggregate, they could reasonably be expected to influence the economic decisions of users
taken on the basis of these consolidated financial statements.
As part of an audit in accordance with KSAs, we exercise professional judgment and maintain
professional skepticism throughout the audit. We also:
x
Identify and assess the risks of
material misstatement of the
consolidated fina
ncial 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.
x
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 Group’s internal control.
x
Evaluate the appropriateness of accounting policies used in the preparation of the consolidated
financial statements and the reasonableness of accounting estimates and related disclosures
made by management.
x
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 Group’s ability to continue
as a going concern. If we conclude that a material uncertainty exists, we are required to draw
attention in our auditors’ report to the related disclosures in the consolidated financial
statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are
based on the audit evidence obtained up to the date of our auditors’ report. However, future
events or conditions may cause the Group to cease to continue as a going concern.
x
Evaluate the overall presentation, structure and content of the consolidated financial
statements, including the disclosures, and whether the consolidated financial statements
represent the underlying transactions and events in a manner that achieves fair presentation.
x
Obtain sufficient appropriate audit evidence regarding the financial information of the entities
or business activities within the Group to express an opinion on the consolidated financial
statements. We are responsible for the direction, supervision and performance of the group
audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant
ethical requirements regarding independence, and communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
From the matters communicated with those charged with governance, we determine those matters
that were of most significance in the audit of the consolidated financial statements of the current period
and are therefore the key audit matters. We describe these matters in our auditors’ report unless law
or regulation precludes public disclosure about the matter or when, in extremely rare circumstances,
we determine that a matter should not be communicated in our report because the adverse
consequences of doing so would reasonably be expected to outweigh the public interest benefits of
such communication.
Our responsibility is to assess whether the consolidated financial statements have been prepared in all
material respects with the requirements laid down in the ESEF Regulation.
Report on Other Legal and Regulatory Requirements
We have checked the compliance of the consolidated financial statements of the Group as at
December 31, 2021 with relevant requirements set out in the ESEF Regulation that are applicable to
financial statements.
For the Group it relates to:
x
Consolidated financial statements prepared in a valid XHTML format;
x
The XBRL markup of the consolidated financial statements using the core taxonomy and the
common rules on markups specified in in the ESEF Regulation
In our opinion, the consolidated financial statements of the Group as at December 31, 2021, identified
as “9884004RQX8PRBXQ8S60-2021-12-31.zip”, have been prepared, in all material respects, in
compliance with the requirements laid down in the ESEF Regulation.
The engagement partner on the audit resulting in this independent auditors’ report is Sang-Min Nam.
Seoul, Korea
March 8,
2022, except with respect to
the Report on Other Legal and Regulatory Requirements
section of our report above, as of April 22, 2022.
This report is effective as of 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 consolidated financial statements and notes thereto. Accordingly, the
readers of the audit report should understand that the above audit report has not been updated to
reflect the impact of such subsequent events or circumstances, if any.
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HYUNDAI MOTOR COMPANY
AND ITS SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
AS OF AND FOR THE YEARS ENDED
DECEMBER 31, 2021 AND 2020
The accompanying consolidated financial statem
ents, including all footnote disclosures, were
prepared by, and are the responsibility of, the Company.
Chang, Jae Hoon
Chief Executive Officer
HYUNDAI MOTOR COMPANY
Main Office Address: (Road Name Addr
ess) 12, Heolleung-r
o, Seocho-gu, Seoul
(Phone Number) 02-3464-1114
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HYUNDAI MOTOR COMPANY AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
AS OF DECEMBER 31, 2021 AND DECEMBER 31, 2020
ASSETS NOTES December 31, 2021 December 31, 2020
Current assets:
Cash and cash equivalents
20
Short-term financial instruments 20 6,949,333 7,219,695
Other financial assets 5,20 12,396,646 12,897,108
Trade notes and accounts receivable 3,20 3,147,296 3,283,972
Other receivables 4,20 4,220,970 4,016,972
Inventories 6 11,645,641 11,333,734
Current tax assets 47,346 138,848
Financial services receivables
14,20 35,252,606 32,596,052
Non-current assets classified as held for sale 8 28,121 304,469
Other assets 7,20 2,081,853 2,033,371
Total current assets 88,565,366 83,686,357
Non-current assets:
Long-term financial instruments 20 306,410 61,859
Other financial assets 5,20 3,539,286 2,779,227
Long-term trade notes and accounts receivable 3,20 137,157 124,269
Other receivables 4,20 741,168 702,341
Property, plant and equipment 9,40 35,543,083 34,092,229
Investment property 10,40 156,656 160,967
Intangible assets 11,40 5,846,986 5,677,567
Investments in joint ventures and associates 13 22,429,117 19,925,260
Net defined benefit assets 35 219,721 -
Deferred tax assets 34 2,224,833 2,847,454
Financial services receivables
14,20 45,776,526 37,069,158
Investments in operating leases 15 26,327,996 20,501,691
Right-of-use assets 12 940,826 836,324
Other assets 7,20 1,191,284 879,509
Total non-current assets 145,381,049 125,657,855
Total assets
(Continued)
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HYUNDAI MOTOR COMPANY AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
AS OF DECEMBER 31, 2021 AND DECEMBER 31, 2020
LIABILITIES AND EQUITY NOTES December 31, 2021 December 31, 2020
Current liabilities:
Trade notes and accounts payable
20
Other payables 20,39 6,335,645 6,123,714
Short-term borrowings 16,20,40 13,087,836 13,780,670
Current portion of long-term debt and debentures 16,20,40 20,578,902 16,104,005
Income tax payable 751,929 548,733
Provisions 17 6,664,647 6,360,770
Other financial liabilities
18,20 55,187 100,328
Lease liabilities 12,20 167,266 141,478
Non-current liab
ilities classified as held fo
r sale 8 - 214,066
Other liabilities 19,20,27 7,440,120 7,292,585
Total current liabilities 64,236,787 59,459,528
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Non-current liabilities:
Long-term other payables 20,39 769,487 798,547
Debentures 16,20,40 63,458,809 48,795,361
Long-term debt 16,20,40 10,667,731 12,726,724
Net defined benefit liabilities
35 79,165 247,566
Provisions 17 4,214,137 4,010,118
Other financial liabilities
18,20 87,258 459,507
Deferred tax liabilities 34 3,689,328 3,277,573
Lease liabilities 12,20 783,306 615,566
Other liabilities 19,20,27 3,344,618 2,612,752
Total non-current liabilities 87,093,839 73,543,714
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Total liabilities 151,330,626 133,003,242
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Equity:
Capital stock
21 1,488,993 1,488,993
Capital surplus
22 4,070,260 4,190,093
Other capital items
23 (1,968,385 ) (1,700,592 )
Accumulated other comprehensive loss
24 (1,772,601 ) (3,409,661 )
Retained earnings
25 73,167,855 68,911,800
Equity attributable to the owners of the Company 74,986,122 69,480,633
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Non-controlling interests
ٻ 7,629,667 6,860,337
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Total equity
ٻ 82,615,789 76,340,970
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Total liabilities and equity
(Concluded)
See accompanying notes to the cons
olidated financial statements.
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HYUNDAI MOTOR COMPANY AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020
NOTES 2021 2020
Sales
27,40
Cost of sales
32 95,680,131 85,515,931
Gross profit
Selling and administrative expenses 28,32 15,251,546 16,086,999
Operating profit 6,678,949 2,394,671
Gain on investments in joint ventures and
associates, net
29 1,303,365 162,162
Finance income 30 912,802 813,916
Finance expenses 30 548,410 955,991
Other income 31 1,447,261 1,308,642
Other expenses 31,32 1,834,405 1,630,144
Profit before income tax 7,959,562 2,093,256
Income tax expense 34 2,266,485 168,703
Profit for the year
1,924,553
Profit attributable to:
Owners of the Company 4,942,356 1,424,436
Non-controlling interests 750,721 500,117
Earnings per share attributable to the owners
of the Company:
33
Basic earnings per share:
Common stock
1
st
preferred stock
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Diluted earnings per share:
Common stock
1
st
preferred stock
See accompanying notes to the cons
olidated financial statements.
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HYUNDAI MOTOR COMPANY AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020
2021 2020
Profit for the year
Other comprehensive income (loss) :
Items that will not be reclassified subsequently to
profit or loss:
Profit on financial assets measured at FVOCI, net
Remeasurements of defined benefit plans
Changes in retained earnings of equity-accounted
investees, net
Changes in share of OCI of equity-accounted
investees, net
Items that may be reclassi
fied subsequently to
profit or loss:
Profit (loss) on financial assets measured at FVOCI, net
Gain on valuation of cash flow hedge
derivatives, net
Changes in share of OCI of
equity-accounted
investees, net
Gain (loss) on foreign operations translation, net
Total other comprehensive income (loss)
(1,022,025 )
Total comprehensive income
Comprehensive income attributable to:
Owners of the Company 6,938,637 395,224
Non-controlling interests 922,502 507,304
Total comprehensive income
See accompanying notes to the cons
olidated financial statements.
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HYUNDAI MOTOR COMPANY AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020
Capital
stock
Capital
sur
p
lus
Other
capital
items
Accumulated
other
comprehensive
income
(
loss
)
Retained
earnin
g
s
Total equity
attributable to
the owners of
the Com
p
an
y
Non-
controlling
interests
Total
e
q
uit
y
(
In millions of Korean Won
)
Balance at
January 1, 2020
(1,516,817 )
(2,353,022 )
Comprehensive
income:
Profit for the period - - - - 1,424,436 1,424,436 500,117 1,924,553
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Gain (loss) on financial
assets measured at
FVOCI, net
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(5,560 )
Gain on valuation
of cash flow hedge
derivatives, net
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Changes in valuation
of equity-accounted
investees, net
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(223,503 )
(222,385 )
(2,249 )
(224,634 )
Remeasurements of
defined benefit plans
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Loss on foreign
operations
translation, net
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(955,228 )
(955,228 )
(15,985 )
Total comprehensive
income
(1,056,639 )
Transactions with
owners, recorded
directly in equity:
Payment of cash
dividends
ٻ
(790,489 )
(790,489 )
(103,290 )
(893,779 )
Increase in paid-in
capital of
subsidiaries by
issuing stock
ٻ
(2,586 )
(2,586 )
Disposals of
investment of
subsidiaries
ٻ
(67,662 )
(67,662 )
Purchases of
treasury stocks
(303,077 )
(303,077 )
(303,077 )
Disposals of
treasury stocks
Others
ٻ
(2,153 )
(1,360 )
(15,486 )
(16,846 )
Total transactions with
owners, recorded
directly in equity
(6,922 )
(183,775 )
(789,696 )
(980,393 )
(927,312 )
Balance at
December 31, 2020
(1,700,592 )
(3,409,661 )
(Continued)
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HYUNDAI MOTOR COMPANY AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020
Capital
stock
Capital
sur
p
lus
Other
capital
items
Accumulated
other
comprehensive
income
(
loss
)
Retained
earnin
g
s
Total equity
attributable to
the owners of
the Com
p
an
y
Non-
controlling
interests
Total
e
q
uit
y
(
In millions of Korean Won
)
Balance at
January 1, 2021
(1,700,592 )
(3,409,661 )
Comprehensive
income:
Profit for the period
Gain (loss) on financial
assets measured at
FVOCI, net
(21,021 )
Gain (loss) on valuation
of cash flow hedge
derivatives, net
(47,902 )
(47,902 )
Changes in valuation
of equity-accounted
investees, net
Remeasurements of
defined benefit plans
Gain on foreign
operations
translation, net
Total comprehensive
income
Transactions with
owners, recorded
directly in equity:
Payment of cash
dividends
(1,045,775 )
(140,854 )
(1,186,629 )
Increase in paid-in
capital of
subsidiaries by
issuing stock
Acquisition of
investment of
subsidiaries
(164,567 )
(164,567 )
(98,601 )
Disposals of
investment of
subsidiaries
(71,634 )
(71,634 )
Purchases of
treasury stocks
(305,337 )
(305,337 )
(305,337 )
Disposals of
treasury stocks
Repayment of
hybrid bonds
(150,323 )
(150,323 )
Others
(21,638 )
(21,385 )
Total transactions with
owners, recorded
directly in equity
(119,833 )
(267,793 )
(1,045,522 )
(1,433,148 )
(153,172 )
(1,586,320 )
Balance at
December 31, 2021
(1,968,385 )
(1,772,601 )
(Concluded)
See accompanying notes to the cons
olidated financial statements.
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HYUNDAI MOTOR COMPANY AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020
NOTES 2021 2020
Cash flows from operating activities:
Cash generated from operations: 36
Profit for the year
Adjustments 15,777,589 16,808,385
Changes in operating assets and liabilitie
s 16,991,771 )
(20,287,776 )
(
Interest received 449,789 519,995
Interest paid (1,905,945 )
(2,008,084 )
Dividend received 213,735 234,432
Income tax paid (1,116,885 )
(897,317 )
Net cash used in operating activities (1,176,416 )
(409,807 )
Cash flows from investing activities:
Changes in short-term financial instruments, net 1,326,872 566,427
Changes in other financial assets (curre
nt), net 225,974 (2,348,252 )
Decrease in other financial assets (non-current) 259,202 27,070
Collection of other receivables 67,437 37,388
Disposals of long-term financial instruments 35,183 42,935
Proceeds from disposals of property, plant and
equipment
Proceeds from disposals of intangible assets 20,261 3,823
Proceeds from disposals of investment of
subsidiaries - 76,133
Proceeds from disposals of
investment in joint
ventures and associates 8,873 4,991
Acquisitions of subsidiaries, net of cash acquired (50,313 )
(294,210 )
Increases in other financial assets (non-current) (212,964 )
(148,896 )
Increases in other receivables (69,563 )
(25,077 )
Purchases of long-term financial instruments (279,471 )
(11,894 )
Acquisitions of property, plant and equipment
(4,304,334 )
Acquisitions of intangible assets
(1,556,993 )
Acquisitions of investments in joint ventures and
associates
Others 43,674 102,816
Net cash used in investing activities
(5,182,579 )
(Continued)
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HYUNDAI MOTOR COMPANY AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020
NOTES 2021 2020
Cash flows from financing activities:
Changes in short-term borrowings, net
(620,051 )
Proceeds from long-term debt and debentures
Proceeds from capital contribution from non-
controlling interest
Acquisitions of subsidiaries
Repayment of long-term debt and debentures
(29,164,478 )
(23,059,360 )
Repayment of lease liabilities
Purchases of treasury stocks
Dividends paid
Repayment of hybrid bonds
Others
Net cash provided by financing activities
Decrease due to transfer
to assets classified
as held for sale
G G
Effect of exchange rate changes on cash and
cash equivalents
Net increase in cash and cash equivalents 2,933,418 1,180,165
G G
Cash and cash equivalents, beginning of the year 9,862,136 8,681,971
G G
Cash and cash equivalents, end of the year
(Concluded)
See accompanying notes to the cons
olidated financial statements.
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HYUNDAI MOTOR COMPANY AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020
1. GENERAL:
the Republic of Korea manufacture and distribute motor vehicles and
The shares of the Company have been listed on the Korea Exchange since June 1974, and the Global Depositary Receipts
issued by the Company have been listed on the London Stock Exchange and Luxembourg Stock Exchange.
As of December 31, 2021 , the major shareholders of the
Company are Hyundai MOBIS (45,782,023 shares, 21.43%) and
Mr. Chung, Mong Koo (11,395,859 shares, 5.33%).
(1) The Group’s consolidated subsidiaries as of December 31, 2021 are as follows.
Name of subsidiaries
Nature of
business
Location
Ownership
p
ercenta
g
e
Indirect ownership
H
y
undai Ca
p
ital Services, Inc. Financin
g
Korea 59.68%
Hyundai Card Co., Ltd. (*1)
Ý
Ý
36.96%
Hyundai Rotem Company (Hyundai
Rotem
)
(
*2
)
Manufacturing
Ý
33.77%
Hyundai KEFICO Corporation (Hyundai
KEFICO)
Ý
Ý
100.00%
H
y
undai Partecs Co., Ltd.
Ý
Ý
56.00%
H
y
undai NGV En
g
ineerin
g
Ý
53.66%
Maintrans Com
p
an
y
Services
Ý
100.00%
H
y
undai Rotem 100.00%
Rotem SRS Co., Ltd.
Ý
Ý
100.00%
Ý
Jeonbuk H
y
undai Motors FC Co., Ltd. Football club
Ý
100.00%
AirPlu
g
Inc. R&D and Sales
Ý
99.32%
H
y
undai Motor America
(
HMA
)
Sales USA 100.00%
Hyundai Capital America (HCA) Financing
Ý
80.00%
HMA 80.00%
Hyundai Motor Manufacturing
Alabama, LLC
(
HMMA
)
Manufacturing
Ý
100.00%
HMA 100.00%
H
y
undai Translead, Inc.
(
HT
)
Ý
Ý
100.00%
Stamped Metal American Research
Technology, Inc. (SMARTI)
Holding company
Ý
72.45%
HMA 72.45%
Stamped Metal American Research
Technolo
gy
LLC
(
SMART
)
Manufacturing
Ý
100.00% SMARTI 100.00%
Hyundai America Technical Center,
Inc. (HATCI)
R&D
Ý
100.00%
Genesis Motor America LLC Sales
Ý
100.00% HMA 100.00%
H
y
undai Rotem USA Cor
p
oration
Manufacturin
g
Ý
100.00% H
y
undai Rotem 100.00%
Moceanlab Inc. Mobilit
y
service 100.00%
Ý
supernal, LLC(*1,4) R&D
Ý
44.44%
H
y
undai Motor Investment, Inc. Investment
Ý
100.00%
H
y
undai Auto Canada Cor
p
.
(
HACC
)
Sales Canada 100.00% HMA 100.00%
Hyundai Auto Canada Captive
Insurance Inc. (HACCI)
Insurance
Ý
100.00%
Ý
H
y
undai Ca
p
ital Canada Inc.
(
HCCA
)
Financin
g
Ý
70.00%
H
y
undai Ca
p
ital Services 20.00%
H
y
undai Ca
p
ital Lease Inc.
(
HCLI
)
Ý
Ý
100.00%
HCCA 100.00%
HK Lease Funding LP
Ý
Ý
100.00%
HCLI 99.99%,
HCCA Funding Inc. 0.01%
HCCA Fundin
g
Inc.
Ý
Ý
100.00%
HCLI 100.00%
HCCA Fundin
g
Two Inc.
Ý
Ý
100.00%
HCCA 100.00%
HK Retail Funding LP
Ý
Ý
100.00%
HCCA 99.99%,
HCCA Funding Two Inc 0.01%
H
y
undai Motor India Limited
(
HMI
)
Manufacturin
g
India 100.00%
Hyundai Motor India Engineering
Private Limited
(
HMIE
)
R&D
Ý
100.00%
HMI 100.00%
ٻ
ٻ
ٻ
ٻ
ڌڐٻ
ٻ
Name of subsidiaries
Nature of
business
Location
Ownership
p
ercenta
g
e
Indirect ownership
Hyundai India Insurance Broking Private
Limited
(
HIIB
)
Insurance
Ý
100.00%
Ý
Hyundai Capital India Private Limited
(
HCI
)
Financing
Ý 100.00% Hyundai Capital Services 100.00%
H
y
undai Motor Ja
p
an Co., Ltd.
(
HMJ
)
Sales Ja
p
an 100.00%
Hyundai Motor Japan R&D Center
Inc. (HMJ R&D)
R&D
Ý
100.00%
Beijing Jingxian Motor Safeguard
Service Co., Ltd.
(
BJMSS
)
Sales China 100.00%
Beijing Jingxianronghua Motor Sale
Co., Ltd.
Ý
Ý
100.00%
BJMSS 100.00%
Genesis Motor Sales
(
Shan
g
hai
)
Co. Ltd.
Ý
Ý
100.00%
Hyundai Millennium (Beijing) Real Estate
Develo
p
ment Co., Ltd.
Real estate
develo
p
ment
Ý
99.00%
CMEs 99.00%
Rotem Equipments (Beijing) Co., Ltd. Sales
Ý
100.00%
Hyundai Rotem 100.00%
KEFICO Automotive Systems
(
Bei
j
in
g)
Co., Ltd.
Manufacturing
Ý
100.00%
Hyundai KEFICO 100.00%
KEFICO Automotive Systems
(
Chon
gq
in
g)
Co., Ltd.
Ý
Ý
90.00%
Hyundai KEFICO 90.00%
Hyundai Truck & Bus (China) Co., Ltd.
(
HTBC
)
Ý
Ý
100.00%
HYUNDAI THANH CONG VIETNAM
AUTO MANUFACTURING
CORPORATION (HTMV)(*1)
Ý
Vietnam 50.00%
HYUNDAI THANH CONG
COMMERCIAL VEHICLE JOINT
STOCK COMPANY
(
HTCV
)(
*1
)
Sales
Ý
50.00%
HYUNDAI THANH CONG VIET NAM
AUTO JOINT VENTURE JOINT
STOCK COMPANY
(
HTV
)(
*1
)
Ý
Ý
50.00%
HYUNDAI KEFICO VIETNAM
COMPANY LIMITED
Manufacturing
Ý
100.00%
Hyundai KEFICO 100.00%
Hyundai Motor Company Australia
Pt
y
Limited
(
HMCA
)
Sales Australia 100.00%
HYUNDAI MOTOR PHILIPPINES. INC.
(HMPH)
Ý
Philippines 99.99%
PT. HYUNDAI MOTOR
MANUFACTURING INDONESIA
(
HMMI
)
Manufacturing Indonesia 99.99%
PT HYUNDAI MOTORS INDONESIA
(
HMID
)
Sales
Ý
100.00%
HMMI 0.01%
PT. HYUNDAI CAPITAL INDONESIA
(
HCID
)
Financing
Ý
100.00%
Hyundai Capital Services 100.00%
Hyundai Capital Australia Pty Limited
Ý
Australia 100.00%
Ý
HR Mechanical Services Limited Services New Zealand 100.00%
H
y
undai Rotem 100.00%
Hyundai Motor Manufacturing Czech,
s.r.o.
(
HMMC
)
Manufacturing Czech 100.00%
Hyundai Motor Czech s.r.o (HMCZ) Sales
Ý
100.00%
Hyundai Motor Europe GmbH (HME)
Marketing and
Sales
Germany 100.00%
Hyundai Motor Deutschland GmbH
(
HMD
)
Sales
Ý
100.00%
Hyundai Motor Europe Technical
Center GmbH
(
HMETC
)
R&D
Ý
100.00%
H
y
undai Motor S
p
ort GmbH
(
HMSG
)
Marketin
g
Ý
100.00%
HME 100.00%
H
y
undai Ca
p
ital Euro
p
e GmbH Financin
g
Ý
100.00%
H
y
undai Ca
p
ital Services 100.00%
Hyundai Motor Commonwealth of
Inde
p
endent States B.V
(
HMCIS B.V
)
Holding company Netherlands 100.00%
HMMR 1.65%
Hyundai Motor Netherlands B.V.
(
HMNL
)
Sales
Ý
100.00%
Hyundai Motor Manufacturing Rus
LLC
(
HMMR
)
Manufacturing Russia 70.00%
Hyundai Motor Commonwealth of
Inde
p
endent States
(
HMCIS
)
Sales
Ý
100.00%
HMCIS B.V 100.00%
Hyundai Mobility Lab (HML) R&D
Ý
100.00%
HMCIS 99.00%, HMMR 1.00%
H
y
undai Ca
p
ital Services Limited Financin
g
Ý
100.00%
H
y
undai Ca
p
ital Euro
p
e 100.00%
ٻ
ٻ
ٻ
ٻ
ڌڑٻ
ٻ
Name of subsidiaries
Nature of
business
Location
Ownership
p
ercenta
g
e
Indirect ownership
Liabilit
y
Com
p
an
y
Hyundai Truck And Bus Rus LLC
(HTBR)
Sales
Ý
100.00%
Hyundai Assan Otomotiv Sanayi Ve
Ticaret A.S.
(
HAOSVT
)(
*3
)
Manufacturing Turkey 97.00%
Hyundai EURotem Demiryolu Araclari
Sanayi ve Ticaret A.S
Ý
Ý
50.50%
Hyundai Rotem 50.50%
Hyundai Rotem Company – Hyundai
EURotem Demiryolu Araclari
SAN. VE TIC. A.S ORTAK GIRISIMI
Sales
Ý
100.00%
Hyundai Rotem 65.00%,
Hyundai EURotem A.S. 35.00%
Hyundai Rotem Company – Hyundai
EUrotem Mahmutbey Projesi ORTAK
GIRISIMI
Ý
Ý
100.00%
Hyundai Rotem 85.00%,
Hyundai EURotem A.S. 15.00%
Hyundai Rotem Malaysia SDN BHD
Ý
Malaysia 100.00%
Hyundai Rotem 100.00%
Rotem SRS Ukraine LLC Services Ukraine 100.00%
Rotem SRS Co., Ltd. 100.00%
Rotem SRS E
gyp
t LLC
Ý
E
gyp
t 98.00%
Rotem SRS Co., Ltd. 98.00%
H
y
undai Motor UK Limited
(
HMUK
)
Sales UK 100.00%
Hyundai Motor Company Italy S.r.l
(HMCI)
Ý
Italy 100.00%
H
y
undai Motor Es
p
ana, S.L.U.
(
HMES
)
Ý
S
p
ain 100.00%
H
y
undai Motor France SAS
(
HMF
)
Ý
France 100.00%
H
y
undai Motor Poland S
p
. Zo. O
(
HMP
)
Ý
Poland 100.00%
Genesis Motor Europe Gmbh (GME)
Ý
Germany 100.00%
Genesis Motor UK Limited
(
GMUK
)
Ý
UK 100.00%
GME 100.00%
Genesis Motor Switzerland AG
(
GMCH
)
Ý
Switzerland 100.00%
Ý
Genesis Motor Deutschland GmbH
(GMD)
Ý
Germany 100.00%
Ý
H
y
undai H
y
dro
g
en Mobilit
y
AG
(
HHM
)
Ý
Switzerland 75.00%
Hyundai Motor DE Mexico S DE RL
DE CV
(
HMM
)
Ý
Mexico 100.00%
HT 0.01%
Hyundai de Mexico, SA DE C.V.,
(
HYMEX
)
Manufacturing
Ý
99.99%
HT 99.99%
HYUNDAI KEFICO MEXICO, S.
DE R.L. DE C.V.
Ý
Mexico 100.00%
Hyundai KEFICO 100.00%
Hyundai Rio Vista, Inc.
Real estate
develo
p
ment
USA 100.00%
HT 100.00%
Hyundai Motor Brasil Montadora de
Automoveis LTDA
(
HMB
)
Manufacturing Brazil 100.00%
Hyundai Capital Brasil Servicos De
Assistencia Financeira Ltda
Financing
Ý
100.00%
Hyundai Capital Services 100.00%
Hyundai Rotem Brasil Industria E
Comercio De Trens Ltda.
Manufacturing
Ý
100.00%
Hyundai Rotem 100.00%
HMB Holding Participacoes
Financeiras Ltda.
Holding company
Ý
99.99%
HMB 99.99%
China Millennium Corporations (CMEs)
Ý
Cayman
Islands
59.60%
China Mobility Fund, L.P.
Investment
Ý
72.00%
KyoboAXA Private Tomorrow Securities
Investment Trust No.12
Ý
Korea 100.00%
Shinhan BNPP Private Corporate
Securit
y
Investment Trust No.34
Ý
Ý
100.00%
KB Leaders Private Securities
Fund1
(
Bond Mixed
)
Ý
Ý
100.00%
Samsung ETF rotation Private Investment
Trust 1
Ý
Ý
100.00%
ZER01NE Accelerator
Investment Fund No.1
Ý
Ý
99.00%
Autopia Sixty-Fourth ~ Seventy-Second
Asset Securitization Specialty Company
(*1)
Financing 0.50% Hyundai Capital Services 0.50%
Ý
Zavurov First Co., Ltd.
(
*1
)
Ý
Ý
0.00% H
y
undai Ca
p
ital Services 0.00%
Super Series Fifth ~ Eleventh
Securitization S
p
ecialt
y
Co., Ltd.
(
*1
)
Ý
Ý
0.50% Hyundai Card 0.50%
Bluewalnut Co., Ltd.
Ý
Ý
100.00%
Hyundai Card 100.00%
MOCEAN Co., Ltd Mobilit
y
Service
Ý
80.00%
ٻ
ٻ
ٻ
ٻ
ڌڒٻ
ٻ
Name of subsidiaries
Nature of
business
Location
Ownership
p
ercenta
g
e
Indirect ownership
H
y
undai CHA Fundin
g
, LLC Financin
g
HCA 100.00%
H
y
undai Lease Titlin
g
Trust
Ý
Ý
100.00%
Ý
Hyundai HK Funding, LLC
Ý
Ý
100.00%
Ý
H
y
undai HK Fundin
g
Two, LLC
Ý
Ý
100.00%
Ý
H
y
undai HK Fundin
g
Three, LLC
Ý
Ý
100.00%
Ý
H
y
undai HK Fundin
g
Four, LLC
Ý
Ý
100.00%
Ý
Hyundai ABS Funding, LLC
Ý
Ý
100.00%
Ý
HK Real Pro
p
erties, LLC
Ý
Ý
100.00%
Ý
H
y
undai Auto Lease Offerin
g
, LLC
Ý
Ý
100.00%
Ý
H
y
undai HK Lease, LLC
Ý
Ý
100.00%
Ý
Extended Term Amortizing Program, LLC
Ý
Ý
100.00%
Ý
Hyundai Asset Backed Lease, LLC
Ý
Ý
100.00%
Ý
HCA Exchan
g
e, LLC
Ý
Ý
100.00%
Ý
H
y
undai Protection Plan, Inc. Insurance
Ý
100.00%
Ý
H
y
undai Protection Plan Florida, Inc.
Ý
Ý
100.00%
Ý
Hyundai Capital Insurance Services, LLC
Ý
Ý
100.00%
Ý
H
y
undai Ca
p
ital Insurance Com
p
an
y
Ý
Ý
100.00%
Ý
Power Protect Extended Services, Inc.
Ý
Ý
100.00%
Ý
Power Protect Extended Services Florida,
Inc.
Ý
Ý
100.00%
Ý
(*1) The Group is considered to have substantive control over the entities by virtue of an agreement or relationship with other
investors, or relationship with structured entities.
(*2) Even though the shareholding ratio of ownership is less than half, the Group has de facto control over the entity due to t
he
relative size of the voting rights held and the degree of share dispersion of other voting rights holders.
(*3) For the year ended December 31, 2021, the Company’s shareholding ratio in Hyundai Assan Otomotiv Sanayi Ve Ticaret A.S.
(HAOSVT), a subsidiary, changed from 70% to 97%. As a result
, capital surplus and non-controll
ing interest have decreased
by
164,567 million and
136,103 million, respectively.
(*4) For the year ended December 31, 2021, the name of company has been changed from Genesis Air Mobility LLC to supernal,
LLC and the Company’s shareholding ratio changed from 100% to 44.44%. As a result, capital surplus and non-controlling
interest have increased by
19,819 million and
107,559 million, respectively.
(2) Summarized financial position and results of operations of major consolidated subsidiaries as of and for the year
ended December 31, 2021 are as follows.
Name of subsidiaries Assets Liabilities Sales
Profit (loss)
for the period
Hyundai Capital Services, Inc. (*)
34,917,071
29,710,340
3,485,601
432,055
Hyundai Card Co., Ltd. (*) 21,654,608
18,026,253 2,744,902 314,139
Hyundai Rotem Company (*) 4,107,183
2,838,938 2,872,512 51,412
Hyundai KEFICO Corporation (*) 2,038,940
1,187,748 2,029,003 60,512
HCA (*) 59,230,349
52,672,107 10,686,865 1,050,250
HMA 8,578,534
5,929,588 22,883,130 1,028,470
HMMA 4,522,540
2,741,306 8,088,117 236,955
HMMC 4,406,392
1,852,526 7,426,329 417,537
HMI (*) 4,310,031
1,782,415 7,339,424 437,395
HME (*) 2,107,163
2,044,181 11,846,977 11,410
HACC (*) 1,946,770
1,119,224 3,582,216 117,911
HMMR 1,931,470
959,020 3,178,717 172,149
HAOSVT 1,469,527
887,896 3,021,886 198,490
HMB 1,387,554
913,764 2,074,018 41,020
HMCA 911,712
716,694 1,938,967 28,116
(*) Based on the subsidiary’s consolidated financial statements
ٻ
ٻ
ٻ
ٻ
ڌړٻ
ٻ
ended December 31, 2020 are as follows.
Name of subsidiaries Assets Liabilities Sales
Profit (loss)
for the period
Hyundai Capital Services, Inc. (*)
33,683,340
28,951,217
3,245,441
348,571
Hyundai Card Co., Ltd. (*) 19,941,856 16,500,531 2,526,137 244,561
Hyundai Rotem Company (*) 4,197,374 2,851,222 2,785,326
22,409
Hyundai KEFICO Corporation (*) 2,007,029
1,246,934 1,880,848
120,461
HCA (*) 45,365,985
40,336,417 11,298,228
514,792
HMA 6,923,939
5,483,741
19,633,057
300,129
HMMA 4,735,474
3,326,009
6,994,745
(1,019,072)
HMMC 4,012,518
1,717,572
5,817,256
162,669
HMI(*) 3,903,535
1,764,081 5,782,305
221,246
HME (*) 2,416,136
2,364,634 9,215,877
14,185
HMMR 1,676,120
941,181
2,829,969
93,127
HACC (*) 1,543,844
895,215
2,998,410
64,167
HAOSVT 1,472,674
968,587
2,468,376
56,050
HMB 1,159,635 964,698 1,472,328 (47,253)
HMCA 818,850 656,270 1,415,987 11,686
(*) Based on the subsidiary’s consolidated financial statements
(3) The financial statements of all subs
idiaries used in the preparation of the consolidated financial statements
are prepared for the same reporting periods as the Company’s.
(4) Summarized cash flows of non-wholly owned subsidiaries that have material non-controlling interests to the
Description
Hyundai Capital
Services, Inc
Hyundai Card Co.,
Ltd.
HCA
HCCA
Hyundai
Rotem
Company
Provided by (used in)
operating activities
(367,733)
(1,400,073)
(7,321,554)
(1,558,760)
(62,714)
Provided by (used in)
investing activities (40,360) (
105,567) (955,140) (642) 146,142
Provided by (used in)
financing activities 510,859 1,310,731 8,132,339 1,549,724 (99,586)
Effect of exchange rate
changes on cash and
cash equivalent 339 - 37,398 6,651 (2,842)
Net increase (decrease) in
cash and cash
equivalents 103,105 (194,909) (106,957) (3,027) (19,000)
Beginning balance of
cash and cash
equivalents 406,065 774,353 475,148 75,429 338,728
Ending balance of cash
and cash equivalents
509,170
579,444
368,191
72,402
319,728
ٻ
ٻ
ٻ
ٻ
ڌڔٻ
ٻ
and subsidiaries of finance segment for the year ended December 31, 2020 are as follows.
Description
Hyundai Capital
Services, Inc
Hyundai Card Co.,
Ltd.
HCA
HCCA
Hyundai
Rotem
Company
Provided by (used in)
operating activities
(734,919)
(2,110,922)
(5,671,707)
(736,550)
56,423
Used in
investing activities (349,375) (81,458) (99,608) (1,291) (75,057)
Provided by (used in)
financing activities 1,139,274 2,236,920 6,134,190 760,770 (21,649)
Effect of exchange rate
changes on cash and
cash equivalent - (273) (37,326) (2,767) (3,475)
Net increase (decrease) in
cash and cash
equivalents 54,980 44,267 325,549 20,162 (43,758)
Beginning balance of
cash and cash
equivalents 351,085 730,086 149,599 55,267 382,486
Ending balance of cash
and cash equivalents
406,065
774,353
475,148
75,429
338,728
(5) Details of non-wholly owned subsidiaries of the Comp
any that have material non-c
ontrolling interests as of
and for the year ended December 31, 2021 are as follows.
ٻ
Description
Hyundai Capital
Services, Inc.
Hyundai Card Co.,
Ltd.
Hyundai Rotem
Company
Ownership percentage of non-controlling
interests 40.32% 63.04% 66.23%
Accumulated non-controlling interests
2,097,956
ஶ
2,379,871
ஶ
702,366
Profit attributable to non-controlling
interests 170,930 198,059 28,968
Dividends paid to non-controlling interests 37,002 92,463 -
Details of non-wholly owned subsidiaries of the Company that had material non-controlling interests as of and for
the year ended December 31, 2020 are as follows.
Description
Hyundai Capital
Services, Inc.
Hyundai Card
Co., Ltd.
Hyundai Rotem
Company
Ownership percentage of non-controlling
interests 40.32% 63.04% 66.23%
Accumulated non-controlling interests
1,912,151
2,267,168
808,494
Profit attributable to non-controlling
interests 139,223 154,171 13,510
Dividends paid to non-controlling interests 36,081 63,429 3,733
(6) Financial support provided to
consolidated structured entities
ai Capital Services, Inc., subsidiaries of the Company,
have agreements that provide counterparties with rights of re
course in the event of default on the derivatives relating
to asset-backed securities issued by consolidated stru
ctured entities, Autopia Sixty-Eighth and Sixty-Ninth Asset
Securitization Specialty Company, Super Series Fifth, Sixth, Eighth and Ninth Securitization Specialty Co., Ltd..
ٻ
ٻ
ٻ
ٻ
ڍڋٻ
ٻ
(7) Nature and risks associated with interests in unconsolidated structured entities
1) Nature of interests in unconsolidated structured entities of the Group as of D
ecember 31, 2021 is as follows.
Description Purpose Nature of business
Method of
funding
Asset
securitization SPC
Fund raising
through asset-
securitization
Fund
collection
Asset Backed
Securities and
others
138,514
Investment fund Investment trust and
others
Fund management
and operation,
distribution of
operating profit
and others
Beneficiary
(Investment)
certificates
Structured Finance Fund raising
through project
financing
Project financing
for construction
project and
ship investment
Project financing
and others
19,487,943
(*) The financial information of unconsolidated structured entity includes unaudited amounts.
Nature of interests in unconsolidated structured entiti
es of the Group as of Decem
ber 31, 2020 is as follows.
Description Purpose Nature of business
Method of
funding
Asset
securitization SPC
Fund raising
through asset-
securitization
Fund
collection
Asset Backed
Securities and
others
3,111,224
Investment fund
G
Investment trust and
others
Fund management
and operation,
distribution of
operating profit
and others
Beneficiary
(Investment)
certificates
13,199,533
Structured Finance
Fund raising
through project
financing
Project financing
for construction
project and
ship investment
Project financing
and others
8,900,659
(*) The financial information of unconsolidated structured entity includes unaudited amounts.
2) Risks associated with interests in an unconsolidated structured entity of the Group as of December 31, 2021 are as
follows.
Description
Financial support provided
to the structured entity
Maximum amount
of exposure to loss
of the structured
entity
Book value in the
structured entity Method Purpose
Asset
securitization SPC
18,797
Loan
obligations
Loan agreement
(Credit line)
24,000
Investment fund
G
Beneficiary
certificates,
Investment trust
Invest
agreement
Structured Finance
Loan
obligations
Loan agreement
(Credit line) 1,117,599
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Risks associated with interests in an unconsolidated structured entity of the Group as of December 31, 2020 are as
follows.
Description
Financial support provided
to the structured entity
Maximum amount
of exposure to loss
of the structured
entity
Book value in the
structured entity Method Purpose
Asset
securitization SPC
13,909
Loan
obligations
Loan agreement
(Credit line)
31,000
Investment fund
G
Beneficiary
certificates,
Investment trust
Invest
agreement
Structured Finance
Loan
obligations
Loan agreement
(Credit line) 682,514
(8) Significant restrictions on the subsidiaries
As of December 31, 2021, Hyundai Card Co., Ltd., subsidiary of the Company, has significant restrictions that require
it to obtain consent from nominated outside director recommended by non-controlling shareholders in the event of
acquiring a company, entry into new business, guarantee, investment in stocks or contracts beyond a certain amount
and others.
(9) Changes in consolidated subsidiaries
Subsidiaries newly included in or excluded from consolidation for the year ended December 31, 2021 are as follows.
Changes Name of subsidiaries Description
Included
Rotem SRS Co., Ltd.
Establishment
Ý
Hyundai Motor Investment, Inc.
Ý
Ý
Genesis Motor Deutschland GmbH (GMD)
Ý
Ý
HYUNDAI MOTOR PHILIPPINES. INC. (HMPH)
Ý
Ý
Hyundai India Insurance Broking Private Limited (HIIB)
Ý
Ý
Autopia Seventy-First Asset S
ecuritization Specialty Company
Ý
Ý
Autopia Seventy-Second Asset Securitization Specialty Company
Ý
Ý
Super Series Tenth Securitization Specialty Co., Ltd
Ý
Ý
Super Series Eleventh Securitization Specialty Co., Ltd
Ý
Ý
Rotem SRS Ukraine LLC
Ý
Ý
Rotem SRS Egypt LLC
Ý
Ý
AUTO JOINT VENTURE JOINT
STOCK COMPANY (HTV)
Acquisition
Ý
AirPlug Inc.
Ý
Excluded
Hyundai Autron Company Ltd.
Liquidation
Ý
Autopia Sixty-Third Asset Securitization Specialty Company
Ý
Ý
Hydrogenic Energy Fund 1,L.P
Changed to equity
method
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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
(1) Basis of consolidated
financial statements preparation
The consolidated financial statements ha
ve been prepared in accordance with
Korean International Financial Reporting
Standards (“K-IFRS”), as prescribed in the Act on External Audit of Stock Companies, Etc in the Republic of Korea.
The significant accounting
policies used for the preparation of the cons
olidated financial statements are summarized
below. These accounting policies are consistent with those applied to the consolidated financial statements for the year
ended December 31, 2020, except for the adoption effect of the new accounting standards and interpretations described
below.
1) New and revised standards that have been applied from the year beginning on January 1, 2021 are as follows.
The Group applied Phase 2 of
Interest Rate Benchmark Reform
(Amendments to K-IFRS 1109
‘Financial Instruments’
,
K-IFRS 1039
‘Financial Instruments: Recognition and Measurement’
, K-IFRS 1107
‘Financial Instruments:
Disclosures’
, ‘K-IFRS 1104
‘Insurance Contracts’
and K-IFRS 1116
‘Leases’
) and
Covid-19-Related Rent
Concessions
(Amendments to K-IFRS 1116
‘Leases’
) for the first
time on January 1, 2021. These standards and other
new accounting standards effective from January 1, 2021 do
not have a material impact on the Group's consolidated
financial statements.
2) A number of new standards are effective for annual period
s beginning after January 1, 2021 and earlier application is
permitted; however, the Group has not early adopted them in preparing these consolidated financial statements.
The Group is currently evaluating the effect of the following new or amended standards and interpretations, if any, to the
consolidated financial statements, however, those standards are not expected to have a significant impact on the Group’s
consolidated financial statements.
- Proceeds before Intended Use (K-IFRS 1016 ‘
Property, Plant and Equipment
’)
- References to Conceptual Framework (K-IFRS 1103 '
Business Combinations
’)
- Classification of Liabilities as
Current or Non-current (K-IFRS 1001
‘Presentation of Financial Statements’
- K-IFRS 1117
‘Insurance Contracts’
and its amendments
- Cost of Fulfilling a Contract (K-IFRS 1037 ‘
Provisions, Contingent Liab
ilities and Contingent Assets
’)
- Deferred Tax related to Assets and Liabilities
arising from a Single Transaction (K-IFRS 1012 ‘
Income Taxes
’)
- K-IFRS Annual Improvements 2018-2020
- Disclosure of Accounting policies (K-IFRS 1001 ‘
Presentation of Financial Statements’
)
- Definition of Accounting estimate (K-IFRS 1008 ‘
Accounting Policies, Changes in Accounting Estimates and Errors
’)
- COVID-19-Related Rent Concessions beyond 30 June 2021 (Amendment to IFRS 16
‘Leases’
)
The consolidated financial statements were approved by the Board of Directors on January 25, 2022 and are
expected to be submitted for the Company's annual general meeting of shareholders.
(2) Basis of measurement
The consolidated financial statements have
been prepared on the historical cost basis except as otherwise stated in the
accounting policies below. Historical cost is usually measured at the fair value of the consideration given to acquire the
assets.
(3) Basis of consolidations
The consolidated financial statements incorporate the financial statements of the Company and entities (including
structured entities) controlled by the Company (or its subs
idiaries). Control is achieved when the Company:
x
has power over the investee;
x
is exposed, or has rights, to variable returns from its involvement with the investee; and
x
has the ability to use its power to affect its returns.
The Group reassesses whether or not it controls an investee if
facts and circumstances indicate that there are changes to
one or more of the three elements of control listed above.
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When the Group has less than a majority of the voting rights of an investee, it has power over the investee when the voting
rights are sufficient to give it the practical ability to direct the relevant activities of the investee unilaterally. The Gro
up
considers all relevant facts and circumst
ances in assessing whether or not the Group’s voting rights in an investee are
sufficient to give it power, including:
x
the size of the Group’s holding of voting rights relative to the size and dispersion of holdings of the other vote
holders;
x
potential voting rights held by the Group, other vote holders or other parties;
x
rights arising from other contractual arrangements; and
x
any additional facts and circumstances that indicate that the Group has, or does not have, the current ability to
direct the relevant activities at the time that decisions need to be made, including voting patterns at previous
shareholders’ meetings.
Income and expenses of subsidiaries acquired or disposed of during the period are included in the consolidated statements
of comprehensive income from the effective date of acquisition and up to the effective date of disposal, as appropriate.
When necessary, adjustments are made to
the financial statements of subsidiaries
to bring their accounting policies into
line with those used by the Group. All intragroup transactions, balances, income and expenses are eliminated in full on
consolidation.
Non-controlling interests are presented in the consolidated statement of financial position within equity,
separately from the equity of the owners of the Group. The carrying amount of non-controlling interests consists of the
amount of those non-controlling interests
at the initial recognition
and the changes in shares of the non-controlling
interests in equity since the date of the acquisition. Total comprehensive income is attributed to the owners of the Group
and to the non-controlling interests even if the non-controlling interest has a deficit balance.
Changes in the Group's ownership interests in subsidiaries, without a loss of control, are accounted for as equity
transactions. The carrying amounts of the Group's interests and the non-controlling interests
are adjusted to reflect the
changes in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling
interests are adjusted and the fair value of the consideration paid or received is reco
gnized directly in
equity and attributed
to owners of the Group.
When the Group loses control of a subsidiary, the profit or loss on disposal is calculated as the difference between (i) the
aggregate of the fair value of the consideration received and the fair value of any retained interest and (ii) the previous
carrying amount of the assets
(including goodwill), lia
bilities of the subsidiary and any non-controlling interests. The
amounts previously recognized in other
comprehensive income and accumulated in equity are accounted for as if the
Group had directly disposed of the relevant assets (i.e., reclassified to profit or loss or transferred directly to retained
earnings as specified by applicable K-IFRS). The fair value of any investment retained in the former subsidiary at the
date when control is lost is regarded as the fair value
on initial recognition for subsequent accounting under K-IFRS 1109
Financial Instruments: Recognition and Measurement
or, when applicable, the cost on initial recognition of an investment
in an associate or a jointly controlled entity.
(4) Business combination
Acquisitions of businesses are accounted for using the acquisition method. The consideration transferred in a business
combination is measured at fair value, which is calculated as
the sum of the acquisition-date fair values of the assets
transferred by the Group, liabilities incurred by the Group to the former owners of the acquiree and the equity interests
issued by the Group in exchange for control of the acquiree. The consideration includes any asset or liability resulting
from a contingent consideration arrangement and is measured at fair value.
Acquisition-related costs are recognized in profit or loss as in
curred. When a business combina
tion is achieved in stages,
the Group's previously held equity
interest in the acquiree is re
measured at its fair value at
the acquisition date (i.e., the
date when the Group obtains control) and the resulting gain or loss, if any, is recognized in profit or loss. Prior to the
acquisition date, the amount resulting from chan
ges in the value of its e
quity interest in the acqui
ree that have previously
been recognized in other comprehensive income are reclassified to profit or loss where such treatment would be
appropriate if that interest were directly disposed of.
(5) Revenue recognition
In accordance with K-IFRS 1115, all types of contracts re
cognize revenues by the 5-step re
venue recognition model (1)
identification of contract
(2) identification of performance obligations
(3) calculation of transaction price
(4)
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allocation of transaction price to performance obligations
(5) recognition of revenue when performance obligation is
implemented.
1) Identification of performance obligations
The Group operates businesses such as the manufacture and sale
of automobiles and auto parts. In the automobile sales
contracts with customers, services othe
r than automobile sales are separately identified as performance obligations.
2) Performance obligations satisfied at a point in time
Revenue is recognized when obligations under the terms of a contract with the Group’s customer are satisfied, which
generally occurs with the transfer of control of goods or services.
3) Performance obligations satisfied over time
In assessing whether the control over goods or services is transferred over time, the Group evaluates whether the customer
simultaneously obtains and consumes the benefits provided by the Group’s performance, whether the assets are controlled
by the customer, and whether the assets created by the Group ha
ve no substitute purpose, and whether the Group is entitled
to reimbursement of costs incurred to date, including a reasonable margin.
4) Allocation of transaction price
The Group allocates the transaction price
to each of the performance obligations
identified in a single contract in
proportion to its stand-alone selling price. When the stand-alone selling price is not directly observable, the Group
estimates the stand-alone selling price using
the adjusted market assessment approach
, or the expected cost plus a margin
approach.
5) Variable consideration
The Group estimates the amounts of consideration using whichever method (the expected value or the most likely amount)
that best predict the amount of consideration to which it will be entitled.
Variable consideration is included in the transaction price only to the extent that it is probable or highly probable that a
significant reversal in the cumulative amount of reve
nue recognized will not occur in the future periods.
6) Significant financing element
If the period between the transfer of the goods or services promised to the customer and the payment from the customer
is within one year, the Group does not adjust the promised amount of consideration for the effects of a significant financing
component, as a practical expedient.
7) Construction contracts
Where the outcome of a construction contract can be estimated reliably, the contract revenue and contract costs associated
with the construction contract are recognized as revenue and expenses, respectively, by reference to the stage of
completion of the contract activity at the end of reporting period.
The percentage of completion of a contract activity is reliably measured based on the proportion of contract costs incurred
for work performed to date relative to the estimated total contract costs, by surveys of work performed or by completion
of a physical proportion of the contract work. Variations in contract work, claim and incentive payments are included to
the extent that the amount can be measured reliably and it
s receipt is considered probable. Where the outcome of a
construction contract cannot be estimated reliably, contract revenue is recognized to the extent of contract costs incurred
that it is probable will be recoverable.
Contract costs are recognized as expenses in
the period in which they are incurred.
When it is probable that total contract
costs will exceed total contract revenue,
the expected loss is recognized as an
expense immediately.
(6) Foreign currency translation
The individual financial stat
ements of each entity in the Group are prepar
ed and presented in the currency of the
primary economic environment in which the entity operates (its functional currency).
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In preparing the financial statements of the individual enti
ties, transactions occurring in
currencies other than their
functional currency (foreign currencies) are
recorded using the exchange rate on the dates of the transactions. At the end
of each reporting period, monetary items denominated in foreign
currencies are translated usi
ng the exchange rate at the
reporting period. Non-monetary items that are measured in te
rms of historical cost in a foreign currency are translated
using the exchange rate at the date of the transaction. Non-monetary items that are measured at fair value in a foreign
currency are translated using the exchange
rates at the date when the fair value was determined. Exchange differences
resulting from settlement of assets or liabilities and translati
on of monetary items denominated in foreign currencies are
recognized in profit or loss in the period in which they arise except for some exceptions.
Foreign exchange gains or losses are clas
sified in finance income (expenses) or other income (expenses) by the nature of
the transaction or event.
For the purpose of presenting the consolidated financial statements, assets and liabilities in the Group’s foreign operations
are translated into Won, using the exchange rates at the end
of reporting period. Income and expense items are translated
at the average exchange rate for the period, unless the exchange rate during the period has significantly fluctuated, in
which case the exchange rates at the dates
of the transactions are used. The exch
ange differences arising, if any, are
recognized in equity as other comprehensive income. Upon the disposal of a foreign operation, the cumulative amount
of the exchange differences relating to that foreign operation is reclassified from equity to profit or loss when the gain or
loss on disposal is recognized. Any goodwill arising on the acquisition of a foreign operation and any fair value
adjustments to the carrying amounts of asse
ts and liabilities arising on the acquisiti
on of that foreign operation are treated
as assets and liabilities of the foreign operation and translated at the exchange rate at the end of reporting period.
(7) Financial Assets
The Group classifies financial assets as financial assets meas
ured at fair value through profit or loss, financial assets
measured at amortized cost or financia
l assets measured at fair value throug
h other comprehensive income according to
the terms and purpose of acquisition. The Group determines th
e classification of a financial asset at initial recognition.
All recognized financial assets are measured subsequently in their entirety at either amortized cost or fair value, depending
on the classification of the financial assets.
1) Classification of financial assets
Debt instruments that meet the following conditions are measured subsequently at amortized cost:
x
The financial asset is held within a business model w
hose objective is to hold financial assets in order to
collect contractual cash flows; and
x
The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments
of principal and interest on the principal amount outstanding.
Debt instruments that meet the following conditions are measured subsequently at fair value through other comprehensive
income (FVOCI):
x
The financial asset is held within a business model whose objective is achieved by both collecting contractual
cash flows and selling the financial assets; and
x
The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments
of principal and interest on the principal amount outstanding.
By default, all other financial assets are measured subse
quently at fair value through profit or loss (FVPL).
Despite the foregoing, the Group may make the following irre
vocable election / designation at initial recognition of a
financial asset:
x
The Group may irrevocably elect to present subsequent changes in fair value of an equity investment in other
comprehensive income if certain criteria are met; and
x
The Group may irrevocably designate a debt investment that meets the amortized cost or FVOCI criteria as
measured at FVPL if doing so eliminates or
significantly reduces
an accounting mismatch
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1-1)
Amortization cost and effective interest rate method
The effective interest method is a method of calculating the amortized cost of a debt instrument and of allocating interest
income over the relevant period. The amortized cost of a financial asset is the amount at which the financial asset is
measured at initial recognition minus the principal repayments, plus the cumulative amortisation using the effective
interest method of any difference between that initial amount
and the maturity amount, adjust
ed for any loss allowance.
The gross carrying amount of a financial asset is the amortized cost of a financial asset before adjusting for any loss
allowance. Interest income is recognized using the effective
interest method for debt instruments measured subsequently
at amortized cost and at FVOCI.
1-2)
Debt instruments classified as at FVOCI
Corporate bonds are initially measured at fair value plus tran
saction costs. Subsequently, changes in the carrying amount
of these corporate bonds as a result of foreign exchange gains and losses, impairment gains or losses, and interest income
calculated using the effective interest method are recognized in profit or loss. The amounts that are recognized in profit
or loss are the same as the amounts that would have been recognized in profit or loss if these corporate bonds had been
measured at amortized cost. All other changes in the carrying amount of these corporate bonds are recognized in other
comprehensive income and accumulated in investments revaluation reserve. When these corporate bonds are
derecognized, the cumulative gains or losses previously recognized in other comprehensive income are reclassified to
profit or loss.
1-3)
Equity instruments designated as at FVOCI
On initial recognition, the Group may make
an irrevocable election (on an instrument-by-instrument basis) to designate
investments in equity instruments as at FVOCI. Designation at FVOCI is not permitted if the equity investment is held
for trading or if it is contingent consideration recognized by an acquirer in a business combination.
Investments in equity instruments at FVOCI are initially measured at fair value plus transaction costs. Subsequently, they
are measured at fair value w
ith gains and losses arising from changes in
fair value recognized in other comprehensive
income and accumulated in the investments revaluation reserve. The cumulative gain or loss will not be reclassified to
profit or loss on disposal of the equity investments, instead, it is transferred to retained earnings.
1-4)
Financial assets measured at FVPL
Financial assets that do not meet the criteria for being measur
ed at amortized cost or FVOCI are measured at FVPL. Gains
or losses arising from changes in the fair value of FVPL, dividends and interest income from the financial assets are
recognized in profit or loss.
2) Foreign exchange gain / loss
The carrying amount of a financial asset designated as a fore
ign currency is determined in foreign currencies and is
translated at the spot exchange rate
at the end of the reporting period.
(8) Impairment of financial assets
The Group recognizes a loss allowance for expected credit losses on investments in debt instruments that are measured
at amortized cost or at FVOCI, lease r
eceivables, trade receivables and contract
assets, as well as on financial guarantee
contracts. The amount of expected credit losses is updated at
each reporting date to reflect changes in credit risk since
initial recognition of the respective financial instrument.
The Group always recognizes lifetime expected credit losses (ECL) for trade r
eceivables, contract assets and lease
receivables. The ECLs on these financial assets are estimated
using a provision matrix based on the Group’s historical
credit loss experience and valuation of individual assets, adjusted for factors that are specific to the debtors, general
economic conditions and an assessment of forecast on present
and future conditions reflecti
ng time value of money where
appropriate.
For all other financial instruments, the Group recognizes life
time ECLs when there has been
a significant increase in
credit risk since initial recogniti
on. However, if the credit risk on the financ
ial instrument has not
increased significantly
since initial recognition, the Group measures
the loss allowance for that financial instrument at an amount equal to 12-
month ECLs.
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Lifetime ECL represents the expected credit
losses that will result from all possible default events over the expected life
of a financial instrument. In contrast, 12-month ECL represents
the portion of lifetime ECL that is expected to result from
default events on a financial instrument that are possible within 12 months after the reporting date.
1) Significant increase in credit risk
In assessing whether the credit risk on a financial instru
ment has increased significantl
y since initial recognition, the
Group compares the risk of a default occurring on the financial instrument at the reporting date with the risk of a default
occurring on the financial instrument at the date of initial recognition.
In particular, the following information is taken into account when assessing whether credit risk has increased
significantly since initial recognition:
x
an actual or expected significant deterioration in the financial instrument’s external (if available) or internal
credit rating;
x
other significant increases in credit risk;
2) Definition of default
The Group believes that, based on past experience, if the debtor violates the terms of the contract, it is considered to
constitute a default event for internal credit risk management purposes.
3) Credit-impaired financial assets
A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash
flows of that financial asset have occu
rred. Evidence that a financial asset is
credit-impaired includes the following
observable data:
(a)
significant financial difficulty of the issuer or the borrower;
(b)
a breach of contract, such as a default or past due event as defined by the Group’s internal policy;
4) Measurements and recognition of expected credit losses
The measurement of ECLs is a function of the probability of defa
ult, loss given default (i.e. the magnitude of the loss if
there is a default) and the exposure at default. The assessment of the probability of default and loss given default is based
on historical data adjusted by forward-looking information as described above. As for the exposure at default, for financial
assets, this is represented by the assets’ gross carrying amount at the reporting date.
For financial assets, the ECLs are estimated as the difference
between all contractual cash fl
ows that are due to the Group
in accordance with the contract and all the
cash flows that the Group ex
pects to receive, discounted at the original effective
interest rate.
If the Group has measured the loss allowance for a financial instrument at an amount equal to lifetime ECLs in the
previous reporting period, but determines at the current reporting date that the conditions for lifetime ECLs are no longer
met, the Group measures the loss allowa
nce at an amount equal to 12-month EC
Ls at the current reporting date, except
for financial assets for which a simplified approach is used.
The Group recognizes an impairment gain or loss in profit or loss for all financial instruments with a corresponding
adjustment to their carrying amount through a loss allowance a
ccount, except for investments in debt instruments that are
measured at FVOCI, for which
the loss allowance is recognized in other comprehensive income and accumulated in the
investment revaluation reserve,
and does not reduce the carrying amount of the financial asset in the statement of financial
position.
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(9) Derecognition of financial assets
The Group derecognizes a financial asset only when the contractual rights to the cash flows from the asset expire, or when
it transfers the financial asset and substantially all the risks
and rewards of ownership of the asset to another entity. If th
e
Group neither transfers nor retains substantially all the risk
s and rewards of ownership a
nd continues to control the
transferred asset, the Group recognizes its retained interest in
the asset and an associated liability for amounts it may have
to pay. If the Group retains substantially all the risks and rewards of ownership of a transferred financial asset, the Group
continues to recognize the financial asse
t and also recognizes a collateralized
borrowing for the proceeds received.
On derecognition of a financial asset measured at amortized cost, the difference between the asset’s carrying amount and
the sum of the consideration received and receivable is recognized in profit or loss. In addition, on derecognition of an
investment in a debt instrument classi
fied as at FVOCI, the cumulative gain
or loss previously accumulated in the
investments revaluation reserve is reclassified to profit or lo
ss. In contrast, on derecognition of an investment in equity
instrument which the Group has elected on initial recognition to measure at FVOCI, the cumulative gain or loss previously
accumulated in the investments revaluation
reserve is not reclassified to profit or
loss, but is transferred to retained
earnings.
(10) Inventory
Inventory is measured at the lower of cost or net realizab
le value. Inventory cost, including the fixed and variable
manufacturing overhead cost, is calculated, using the moving average method, except for the cost for inventory in transit,
which is determined by the specific identification method.
(11) Investments in associates and joint ventures
An associate is an entity over which the Group has significant influence, but not a joint venture or a subsidiary. Significant
influence is the power to participate in the financial and operating policy decisions of the investee, but is not control or
joint control over those policies.
A joint venture is a joint arrangement, whereby the parties that
have joint control of the arrangement have rights to the
net assets of the joint arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which
exists only when decisions about the relevant activities require unanimous consent of the parties sharing control.
The investment in an associate or a joint venture is initially recognized at cost and accounted for using the equity method.
Under the equity method, an investment
in an associate or a joint venture is
initially recognized in the consolidated
statement of financial position at cost and
adjusted thereafter to rec
ognize the Group's share of the profit or loss and other
comprehensive income of the associate or the joint venture.
When the Group's share of losses of an associate or a joint venture exceeds the Group's interest in that associate or joint
venture (which includes any long-term interests that, in substance, form part of the Group's net investment in the associate
or the joint venture), the Group discontinues recognizing its share of further losses. Additional losses are recognized only
to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate or
the joint venture.
Investment in associate or joint venture is accounted for using the equity method from the date that the investee becomes
the associate or joint venture. Any excess of the cost of acquisition over the Group's share of the net fair value of the
identifiable assets, liabilities and contingent liabilities of an associate or a joint venture recognized at
the date of acquisition is recognized as goodwill, which
is included within the carrying amount of the investment.
Any excess of the Group's share of the net fair value of th
e identifiable assets, liabilities and contingent liabilities over
the cost of acquisition, after reassessment, is recognized immediately in profit or loss.
The requirements of K-IFRS 1028 are applied to determine whethe
r it is necessary to recognize any impairment loss with
respect to the Group’s investment in an associate or a joint venture. When there is any indication of impairment, the entire
carrying amount of the investment (incl
uding goodwill) is tested for impairment
in accordance with K-IFRS 1036 as a
single asset by comparing its recoverable amount (higher of value in use and fair value less costs of disposal) with its
carrying amount. Any impairment loss rec
ognized is not allocated to any asset,
including goodwill that forms part of the
carrying amount of the investme
nt. Any reversal of that impairment loss is recognized in accordance with K-IFRS 1036
to the extent that the recoverable amount of the investment subsequently increases.
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Upon disposal of an associate or a joint venture that results in the Group losing significant influence over that associate
or joint venture, any retained investment is measured at fair
value at that date and the fair value is regarded as its fair
value on initial recognition as a financial
asset in accordance with K-IFRS 1109.
The difference between the previous
carrying amount of the associate or joint venture attributable to the retained interest and its fair value is included in the
determination of the gain or loss on disposal of the associate or joint venture. In addition, the Group accounts for all
amounts previously recognized in other comprehensive income in relation to that associate or joint venture on the same
basis we would be required if that associate or joint venture had directly disposed of the related assets or liabilities.
Therefore, if a gain or loss previously recognized in other comprehensive income by that associate or joint venture would
be reclassified to profit or loss on the disposal of the relate
d assets or liabilities, the Group reclassifies the gain or loss
from equity to profit or loss (as reclassification adjustment) wh
en it loses significant influence
over that associate or joint
venture. When the Group reduces its ownership interest in an associate or a joint venture, but the Group continues to use
the equity method, the Group reclassifies to profit or loss the proportion of the gain or loss that had previously been
recognized in other comprehensive income relating to that reduction in ownership interest if that gain or loss would be
reclassified to profit or loss on the disposal of the related assets or liabilities. In addition, the Group applies K-IFRS 110
5
to a portion of investment in an associate or a joint venture
that meets the criteria to be
classified as held for sale.
The Group continues to use the equity method when an investment in an associate becomes an investment in a joint
venture or an investment in a joint venture becomes an invest
ment in an associate. Ther
e is no remeasurement to fair
value upon such changes in ownership interests.
Unrealized gains from transactions between the Group and its associates or joint ventures are eliminated up to the shares
in associate (joint venture) stocks. Un
realized losses are also e
liminated, unless evidence of impairment in assets
transferred is produced. If the accounting policy of associates or joint ventures differs from the Group, financial
statements are adjusted accordingly before applying equity method of accounting.
(12) Property, plant and equipment
Property, plant and equipment is recognized if, and only if it is probable that future economic benefits associated with the
asset will flow to the Group, and the cost of the asset can be measured reliably. After the initial recognition, property,
plant and equipment is stated at cost
less accumulated depreciation and accumulated impairment losses. The cost includes
any cost directly attributable to bringing the asset to the
location and condition necessary for it to be capable of operating
in the manner intended by management and the initial estimate of the costs of dismantling and removing the item and
restoring the site on which it is located. In addition, in case the recognition criteria are met, the subsequent costs will be
added to the carrying amount of the asset or recognized as a separate asset, and the carrying amount of what was replaced
is derecognized.
Depreciation is computed using the straight-line method based on the estimated useful lives of the assets. The
representative useful lives are as follows.
Buildings and structures 12 – 50
Machinery and equipment 6 – 15
Vehicles 6 – 15
Dies, mold and tools 4 – 6
Office equipment 3 – 15
Other 2 – 20
The Group reviews the depreciation method, the estimated us
eful lives and residual values of property, plant and
equipment at the end of each annual reporting period. If expectations differ from previous estimates, the changes are
accounted for as a change in accounting estimate.
(13) Investment properties
Investment properties are property held to earn rentals or
for capital appreciation or both. Investment properties are
measured initially at its cost and transaction costs are included in the initial measurement. After initial recognition, the
book value of investment properties is presented at the cost less accumulated depreciation and accumulated impairment
losses.
Subsequent costs are recognized as the carrying amount of the asset when, and only when it is probable that future
economic benefits associated with the asse
t will flow to the Group, and the cost of
the asset can be measured reliably, or
recognized as a separate asset if appropriate. The
carrying amount of what was replaced is derecognized.
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Land is not depreciated, and other investment properties are
depreciated using the straight-line method over the period
from 20 to 50 years. The Group reviews the depreciation method, the estimated useful lives and residual values at the
end of each annual reporting period. If
expectations differ from previous estim
ates, the changes are accounted for as a
change in accounting estimate.
(14) Intangible assets
1) Goodwill
Goodwill arising from a business combinati
on is recognized as an asset at the time of obtaining control (the acquisition
date). Goodwill is measured as the excess of the aggregat
e of the consideration transferred, the amount of any non-
controlling interest in the acquiree and the acquisition-date fair value of the Group’s previously held equity interest in the
acquiree over the net of the acquisition-date amounts of th
e identifiable assets acquired and the liabilities assumed.
If, after reassessment, the net of the acquisition-date amount
s of the identifiable assets acquired and the liabilities assumed
exceeds the aggregate of the consideration
transferred, the amount of any non-contro
lling interest in the acquiree, and the
acquisition-date fair value of the Group’s previously held
equity interest in the acquiree, the excess is recognized
immediately in profit or loss as a bargain purchase gain.
Goodwill is not amortized, but tested for impairment at leas
t annually. For purposes of impairment tests, goodwill is
allocated to those cash-generating units (“CGU”) of the Group
expected to have synergies from the business combination.
CGU that goodwill has been allocat
ed is tested for impairment every year
or when an event occurs that indicates
impairment.
If the recoverable amount of a CGU is less than its carrying amount, the impairment will first decrease the goodwill
allocated to that CGU and the remaining impairment will be allocated among other assets relative to its carrying value.
Impairment recognized for goodwill may not be reversed. When disposing a subsidiary, related goodwill will be included
in gain or loss from disposal.
2)
Development costs
The expenditure on research is recognized as an expense when it is incurred. The expenditure on development is
recognized as an intangible asset, and amortization is computed using the straight-line method based on the estimated
useful lives of the assets since the
asset is available for use or sale.
Research and development activities are conducted in phases of preceding research, development approval, product
development and mass production. The Group generally rec
ognizes intangible assets as development activities after the
development approval phases which product specification, releas
e schedule, and sales plan are established. Expenditure
incurred at the previous phase
is recognised as an expense as it is consider
ed as research activitie
s when it is incurred.
3)
Intangible assets acquired separately
Intangible assets are measured initially at cost, and are subs
equently measured at cost less accumulated amortization and
accumulated impairment losses.
Intangible assets are amortized by the straight-line method based on estimated useful lives from the date of availability.
The Group reviews the estimated useful li
fe and amortization method at the end of each annual reporting period. If
expectations differ from previous estimates, the changes are accounted for as a chan
ge in accounting estimate. Intangible
assets assessed as having indefinite useful life such as club
membership are subjected to impairment test at least once a
year without amortization.
The representative useful
lives are as follows.
Development costs 3, 7
Industrial property rights 5 – 10
Software 3 – 7
Other 5 – 40
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(15) Impairment of non-financial assets
The Group assesses at the end of each reporting period whethe
r there is any indication that an asset may be impaired. If
any such indication exists, the Group estimates the recoverable amount of the asset to determine the extent of the
impairment loss. Recoverable amount is the higher of fair valu
e less costs to sell and value in use. If the cash inflows of
an individual asset are largely independent from other assets or group of assets, the recoverable amount is measured for
that individual asset; otherwise, it is measured for the
cash generating unit (CGU) to which the asset belongs. An
impairment loss in respect of goodwill is
not reversed. For other assets, impairment
loss is reversed if the recoverable
amount increases in subsequent years, but only to the extent that the asset’s carrying amount does not exceed the carrying
amount that would have been determined, net of depreciation
or amortization, if no impairment loss had been recognized.
Intangible assets with indefinite useful lives or intangible as
sets not yet available for use are not amortized, but tested for
impairment annually.
(16) Non-current assets classified as held for sale
The Group classifies a non-current asset (or
disposal group) as held for sale, if
its carrying amount will be recovered
principally through a sale transaction rather than through continuing use. For this to be the case, the asset (or disposal
group) must be available for immediate sale in its present condition subject only to terms that are usual and customary
for sales of such assets (or disposal groups) and its sale must be highly probable. The management must be committed
to a plan to sell the asset (or disposal
group), and the sale should be expected
to qualify for recognition as a completed
sale within one year from th
e date of classification.
Non-current assets (or disposal group) classified as held fo
r sale are measured at the lower of their carrying amount and
fair value, less costs to sell.
(17) Lease
At contract inception, the Group assesses whether a contract is or contains a lease.
A contract is, or contains, a lease if
the contract conveys a right to control the use of an identified asset for a period of time in exchange for consideration.
When assessing whether the contract conveys a right to contro
l the use of an identified asse
t, definition of a lease under
K-IFRS 1116 has been applied.
1) As a lessee
At inception or effective date of change, the Group allocates the consideration in the contract to each lease on the basis
of their relative stand-alone prices. However, for leases of pr
operties in which it is a lessee, the Group has elected not to
separate non-lease components and will instead account for
the lease and non-lease comp
onents as a single lease
component.
The Group recognizes a right-of-use asset and lease liability at
the lease commencement date
. The right-of-use asset is
initially measured at cost, which comprises the initial amount of
the lease liability adjusted for any lease payments made
at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove
the underlying asset or to restore the underlying asset or the
site on which it is located, less any lease incentive received.
The right-of use asset is subsequently depreciated using the straight-line method from the commencement date to the end
of the lease term, unless the lease transfers ownership of the underlying asset to the Group by the end of the lease term or
the cost of the right-of-use asset reflects that the Group will
exercise a purchase option. In
that case the right-of-use asset
will be depreciated over the useful life of the underlying asset, which is determined on the same basis as those of property
and equipment. In addition, the right-of use asset is periodically reduced by impairment losses, if any, and adjusted for
certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of
the lease payments that are not paid at the commencement
date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group’s
incremental borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rate.
When the lease liability is remeasured, a corresponding adjust
ment is made to the carrying amount of the right-of-use
asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
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The Group has elected not to recognize right-of-use assets and lease liabilities for leases of
low-value assets and short-
term leases. The Group recognizes the lease payments associated
with these leases as an expense on a straight-line basis
over the lease term.
2) As a lessor
The accounting policies applicable in the same period to the Group as a lessor are not different from those under K-IFRS
1116. When the Group acted as a lessor, it determined at l
ease inception whether each lease was a finance lease or an
operating lease. To classify each lease, the Group made
an overall assessment of whether the lease transferred
substantially all of the risks and rewards incidental to ownership of the underlying asset. If this was the case, then the
lease was a finance lease; if not,
then it was an operating lease.
Amounts due from lessees under finance l
eases are recognized as receivables at th
e amount of the Group’s net investment
in the leases. Finance lease interest income is allocated to accounting periods so as to reflect an effective interest rate on
the Group’s net investment outstanding in respect of the leases. Rental income from operating leases is recognized on a
straight-line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operati
ng
lease are added to the carrying amount of the carrying amount of investments in operating leases and recognized as
expense on a straight-line basis over the lease term.
(18) Borrowing costs
Borrowing costs directly attributable to the acquisition, cons
truction or production of qualifying assets are capitalized to
the cost of those assets, until they are
ready for their intended use or sale. A qualifying asset is an asset that necessarily
takes a substantial period of time to get ready for its intende
d use or sale. Investment income earned on the temporary
investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs
eligible for capitalization. All other borrowing costs are recognized in profit or loss in the period in which they are
incurred.
(19) Retirement benefit plans
The retirement benefit obligation recognized in the consolidated statements of financial position represents the present
value of the defined benefit obligation, less the fair value of
plan assets. Defined benefit ob
ligations are calculated by an
actuary using the Projected Unit Credit Method.
The present value of the defined benefit obligations is measured by discounting estimated future cash outflows by the
interest rate of high-quality corporate bonds, with similar maturity as the expected post-employment benefit payment date.
In countries where there is no deep market in such bonds, the market yields at the end of the reporting period on
government bonds are used.
The remeasurements of the net defined benefit liabilities (asset
s) comprising actuarial gain or loss from changes in
actuarial assumptions or differences betw
een actuarial assumptions and actual resu
lts, the effect of the changes to the
asset ceiling and return on plan assets, excluding amounts included in net interest on the net defined benefit liabilities
(assets), are recognized in other comprehensive income of the consolidated statements of comprehensive income, which
is immediately recognized as retained earni
ngs. Those recognized in retained earnin
gs will not be reclassified in profit
or loss. Past service costs are recognized
in profit and loss when th
e plan amendment occurs, and
net interest is calculated
by applying the discount rate determined at the beginning
of the annual reporting period to the net defined benefit
liabilities (assets). Defined benefit costs are composed of service cost (including current se
rvice cost, past service cost,
as well as gains and losses on settlements), net
interest expense (income), and remeasurements.
The retirement benefit obligation recognized in the consolidated statements of financial position represents the actual
deficit or surplus in the Group’s defined benefit plans. Any su
rplus resulting from this calculation is limited to the present
value of any economic benefits available in the form of refunds from the plans or reductions in future contributions to the
plans.
Contributions to defined contribution retirement benefit pl
ans are recognized as expenses when employees provide
services eligible for payment.
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(20) Provisions
A provision is recognized when the Group has a present obligation (legal or constructive) as a result of a past event, it is
probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable
estimate can be made of the amount of the obligation. The amount recognized as a provision is the best estimate of the
consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and
uncertainties surrounding the obligation. A provision is measured using the present value of the cash flows estimated to
settle the present obligation. The increase in provision due to passage of time is recognized as interest expense.
The Group recognizes provisions for costs expected to be incurred
in the future for the repair of regular parts within the
warranty period based on historical experience and compensation for accidents caused by defects in the exported products
or parts of the product when such amounts are probable of payment. Also, the Group recognizes provisions for the
probable losses of unused loan commitment, construction contracts, pre-contract sale or service contract due to legal or
constructive obligations. In addition, the Company recognizes provisions expected to be paid in the future with regard to
long-term employee benefits payable to long-term employees.
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party,
a receivable is recognized as an asset if it is virtually certa
in that reimbursemen
t will be received and the amount of the
receivable can be measured reliably.
(21) Taxation
Income tax expense is composed of current and deferred tax.
1) Current tax
The current tax is computed based on the taxable profit for the current year. The taxable profit differs from the profit
before income tax as reported in the cons
olidated statements of inco
me because it excludes items of income or expense
that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group’s
current tax liability is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting
period. The amount of current tax payable or receivable is the best estimate of the tax amount expected to be paid or
received that reflects uncertainty related to income taxes, if any.
2) Deferred tax
Deferred tax is recognized on temporary differences be
tween the carrying amounts of assets and liabilities in the
consolidated financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax
liabilities are generally recognized
for all taxable temporary differences. Deferred tax assets shall be generally recognized
for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which
those deductible temporary differences can be utilized. Such
deferred tax assets and liabilities shall not be recognized if
the temporary difference arises from goodwill or from the
initial recognition (other than in
a business combination) of
other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.
Deferred tax liabilities are recognized for taxable temporary diff
erences associated with investments in subsidiaries and
associates and interests in joint ventures, except when the Group is able to control the timing of the reversal of the
temporary difference, and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred
tax assets arising from deductible temporary differences associated with such investments and interests are only
recognized to the extent that taxable profit will be availabl
e against which the temporary di
fference can be utilized and
they are expected to be revers
ed in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at th
e end of each reporting period and reduced to the extent that
it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to be applied in the period in which the
liability is settled or the asset is realized, based on tax rate
s and tax laws that have been enacted or substantively enacted
by the end of the reporting period. The measurement of deferred tax assets and liabilities reflects the tax consequences
that would follow from the manne
r in which the Group expects to recover or
settle the carrying amount of its assets and
liabilities at the end of the reporting period.
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Deferred tax assets and liabilities are offset when there is a
legally enforceable right to offs
et current tax assets against
current tax liabilities and when they relate to income tax levied by the same taxation authority. Also, they are offset when
different taxable entities that intend either to settle current
tax liabilities and assets on a net basis, or to realize the as
sets
and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or
assets are expected to be settled or recovered.
3) Recognition of current and deferred taxes
Current and deferred taxes are recognized in profit or loss, excep
t when they relate to items that are recognized in other
comprehensive income or directly in e
quity, or items arising from initial accounting
treatments of a business combination.
The tax effect arising from a business combination is included in the accounting for the business combination.
(22) Treasury stock
When the Group repurchases its equity instruments (treasury stock), the incremental costs and net of tax effect are
deducted from equity and recognized as other capital item deducted from the total equity in the consolidated statements
of financial position. In addition, profits or losses from purchase, sale or retirement of treasury stocks are directly
recognized in equity and not in current profit or loss.
(23) Financial liabilities and equity instruments
Debt instruments and equity instruments issued by the Group are recognized as financial liabilities or equity depending
on the contract and the definitions of financial liability and equity instrument.
1) Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its
liabilities. Equity instruments issued by th
e Group are recognized at the proceeds received, net of direct issue costs.
Repurchase of the Company’s own equity instruments is recognized and deducted directly in equity. No gain or loss is
recognized in profit or loss on the purchase, sale, issue or cancellation of the Company’s own equity instruments.
2) Financial guarantee liability
A financial guarantee contract is a contract
that the issuer must pay a certain amount of money to compensate for losses
incurred by the holder due to the failure of a specific debtor to
pay the due date on the original contract or modified terms
of the debt instrument. Financial guarantee liabilities are measured initially at fair value and subsequently measured at
the greater of the following, unle
ss they are designated as at fair value through profit or loss or arising from the transfer
of assets.
x
Loss provision calculated in accordance with K-IFRS 1109
x
The amount recognized less the accumulated profits recognized in accordance with K-IFRS 1115
3) Financial liabilities measured at FVPL
Financial liabilities are classified as at FVPL when the financial liability is (i) contingent consideration of an acquirer in
a business combination, (ii) held for trading or (iii) it is designated as at FVPL as of the date of initial recognition.
However, for financial liabilities that are designated as at FVPL, the amount of change in the fair value of the financial
liability that is attributable to changes in the credit risk of that liability is recognized in other comprehensive income,
unless the recognition of the effects of changes in the liabilit
y’s credit risk in other comprehensive income would create
or enlarge an accounting mismatch in prof
it or loss. The remaining amount of change
in the fair value of liability is
recognized in profit or loss. Changes in fair value attributable to a financial liability’s credit risk that are recognized in
other comprehensive income are not subsequently reclassified to profit or loss; instead, they are transferred to retained
earnings upon derecognition of the financial liability. Gains or losses on financial guarantee contracts issued by the Group
that are designated by the Group as at FVPL are recognized in profit or loss.
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4) Financial liabilities measured subsequently at amortized cost
Financial liabilities that are not (i) contingent consideration of an acquirer in a business combination, (ii) held for trading
,
or (iii) designated as at FVPL as of the
date of initial recognition, are measured
subsequently at amortized cost using the
effective interest method. The effective interest method is a method of calculating the amortized cost of a financial liability
and of allocating interest expense over the relevant period.
5) Derecognition of financial liabilities
The Group derecognizes financial liabilities when, and only when, the Group’s obligations are discharged, cancelled or
have expired. The difference between th
e carrying amount of the financial lia
bility derecognized and the consideration
paid and payable is recognized in profit or loss.
(24) Derivatives
Derivatives are initially recognized at fair value at the date the derivative contracts are entered into and are subsequently
remeasured to their fair value at the end of each reporting peri
od. The resulting gain or loss is recognized in profit or loss
immediately, unless the derivative is designated and effective as a hedging instrument, in such case, the timing of the
recognition in profit or loss depends on the nature of the hedge relationship.
The Group designates certain derivatives as hedging instruments to
hedge the risk of changes in fair value of a recognized
asset or liability or an unrecognized firm commitment (fair value hedges) and the risk of changes in cash flow of a highly
probable forecast transaction and the risk of changes in fore
ign currency exchange rates of
firm commitment (cash flow
hedges).
1) Fair value hedges
The Group recognizes the changes in the fair value of derivatives that are designated and qualified as fair value hedges
are recognized in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability
that are attributable to th
e hedged risk. Hedge accounting is discontinued when the Group
revokes the hedging relationship,
when the hedging instrument expires or is sold, terminated or exercised, or when it is no longer qualified for hedge
accounting. The fair value adjustment to the carrying amount of the hedged item arising from the hedged risk is amortized
to profit or loss from that date.
2) Cash flow hedges
The effective portion of changes in the fair value of derivati
ves that are designated and qualified as cash flow hedges is
recognized in other comprehensive income. The gain or loss relating to the ineffective portion is recognized immediately
in profit or loss. Amounts previously recognized in other comprehensive income and accumulated in equity are
reclassified to profit or loss in the periods when the hedged
item affects profit or loss. If the forecast transaction results
in the recognition of a non-financial asse
t or liability, the related gain and loss recognized in
other comprehensive income
and accumulated in equity are transferred from equity to the initial cost of related non-financial asset or liability.
Cash flow hedge accounting is discontinued when the Group revokes the hedging relationship, when the hedging
instrument expires or is sold, terminated or exercised, or it no longer qualifies for the criteria of hedging. Any gain or
loss accumulated in equity at that time rema
ins in equity, and is recognized as profit or loss wh
en the forecast transaction
occurs. When the forecast transaction is no
longer expected to occur, the gain or
loss accumulated in equity is recognized
immediately in profit or loss.
(25) Fair value
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction betwe
en
market participants at the measurement da
te, regardless of whether that price is directly observable or estimated using
another valuation technique. In estimating the fair valu
e of an asset or a liability,
the Group takes into account the
characteristics of the asset or liability if market participants would take those characteristics into account when pricing
the asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in these consolidated
financial statements is determined on such
a basis, except for leasing transactions
that are within the scope of K-IFRS
1116
Leases
, and measurements that have some similarities to fair value, but are not fair value, such as net realisable
value in K-IFRS 1002
Inventories
or value in use in K-IFRS 1036
Impairment of Assets
.
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In addition, for financial reporting purposes, fair value measur
ements are categorized into Levels 1, 2 or 3, based on the
degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair
value measurement in its
entirety, which are described in Note 20.
(26) Accounting Treatment related to the Emission Rights Cap and Trade Scheme
The Group classifies the emission rights as intangible assets. Emission rights allowance the government allocated free of
charge are measured at nil, and emission rights allowance
purchased are measured at cost. No emission liability is
recognized if the expected quantity of emission for the perf
orming period does not exceed the emission allowance in
possession. The emission liability is measured based on the expected quantity of emission for the performing period in
excess of emission allowance in possession and the unit price for such emission rights in the market at the end of the
reporting period.
(27) Significant accounting estimates and key sources of estimation uncertainties
In the application of the Group’s accounting policies, management is required to make judgments, estimates and
assumptions about the carrying amounts of
assets and liabilities that cannot be
identified from other sources. The
estimation and assumptions are based on historical experience and other factors that are considered to be relevant. Actual
results may be different from those estimations. The estimates and underlying assumptions are continually evaluated.
Revisions to accounting estimates are recogni
zed in the period in which
the estimate is revised if the revision affects only
that period or in the period of the revision and future periods if the revision affects both current and future periods.
The management expects that the COVID-19 outbreak from early 2021 will have an impact on most of the regional and
operating sectors in which the Group operates. However, as the extent and duration of the impacts of COVID-19
outbreak remain uncertain, the financial impact cannot be reasonably estimated.
Information about assumptions and estimation uncertainties at December 31, 2021 that
have a significant risk of resulting
in a material adjustment to the carrying amounts of assets and liabilities in the next financial year is as follows.
1) Impairment test for goodwill and non-financial assets
Determining whether goodwill and non-financial asset is impaired requires an estimation of the value in use of the CGU
to which goodwill has been allocated and value in use of non-
financial assets. The value in use calculation requires the
management to estimate the future cash flows expected to arise from the CGU and a suitable discount rate in order to
calculate present value.
2) Warranty provision
The Group recognizes provisions for the warranties of its products as described in Note 2.(20). The amounts are
recognized based on the best estimate of amounts necessary
to settle the present and futu
re warranty obligation.
3) Defined benefit plans
The Group operates defined retirement benefit plans. Define
d benefit obligations are determined at the end of each
reporting period using an actuarial valuation method that
requires management assumptions on discount rates, rates of
expected future salary increases and mortality rates. The ch
aracteristic of post-employment benefit plan that serves for
the long term period causes significant uncertainties when the post-employment benefit obligation is estimated.
4)
Taxation
The Group recognizes current tax and deferred tax based on the best estimates of income tax effect to be charged in the
future as the result of operating activities until the end of the reporting period. However, actual final income tax to be
charged in the future may differ from the relevant assets
and liabilities recognized at the
end of the reporting period and
the difference may affect income tax charged or credited, or deferred tax assets and liabilities in the period in which the
final income tax determined.
5)
Fair value of financial instruments
The Group uses valuation techniques that include inputs that ar
e not based on observable market data to estimate the fair
value of certain type of financial instruments. The Group
makes judgements on the choice of various valuation methods
and assumptions based on the condition of the principal market at the end of the reporting period.
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6) Measurement and useful lives of property, plant, equipment or intangible assets
If the Group acquires property, plant, equipment or intangible assets from business combination, it is required to estimate
the fair value of the assets at the acquisition date and determine the useful lives of such assets for depreciation and
amortization.
7) Credit loss allowance
The Group sets credit loss allowance upon
evaluation of impairment relating to acco
unt receivables and financial services
receivables as described in Note 2.(8). The precision in loss allowance is based on the estimation of expected cash flow
and assumptions and variables of risk measurement model used for the estimation.
3. TRADE NOTES AND ACCOUNTS RECEIVABLE:
(1) Trade notes and accounts receivab
le as of December 31, 2021 and December 31, 2020 are as follows.
December 31, 2021 December 31, 2020
Description
Current Non-current Current Non-current
Trade notes and accounts receivable
3,190,030
G
145,648
3,338,865
128,599
Loss allowance (42,734) (773) (54,893) (317)
Present value discount accounts - (7,718) - (4,013)
3,147,296
G
137,157
3,283,972
124,269
(2) Aging analysis of trade notes and accounts receivable
As of December 31, 2021, aging analysis
of total trade notes and acco
unts receivable that are past due, but not impaired
are as follows.
Description
Not due
Overdue
Within
90days
Overdue
Within
180days
More than
91days
Overdue
More than
181 days
Total
amounts
Amount of
impaired
receivables
Total trade note and
accounts receivable
2,998,927
249,201
5,437
82,113
3,335,678
43,507
As of December 31, 2020, aging analysis
of total trade notes and accounts receivab
le that are past due, but not impaired
are as follows.
Description
Not due
Overdue
Within
90days
Overdue
Within
180days
More than
91days
Overdue
More than
181 days
Total
amounts
Amount of
impaired
receivables
Total trade note and
accounts receivable
2,937,200
438,770
3,677
87,817
3,467,464
55,210
(3) Transferred trade notes and accounts
receivable that are not derecognized
As of December 31, 2021 and December 31, 2020, total trade
notes and accounts receivable (including inter-company
receivables within the Group) which the
Group transferred to financial instituti
ons but did not qualify for derecognition,
amount to
3,059,551 million and
2,914,830 million, respectively. Cash and cash equivalents received as
consideration for the transfer are recognized as short-term borrowings due to the fact that the risks and rewards were not
transferred substantially.
ٻ
ٻ
ٻ
ٻ
ڎړٻ
ٻ
(4) Changes in loss allowance for the years ended December 31, 2021 and December 31, 2020 are as follows
Description
2021 2020
Beginning of the year
55,210
67,564
Impairment loss (reversal) 2,204 (16,595)
Write-off (14,307) (1,296)
Effect of foreign exchange differences and others 400 5,537
End of the year
43,507
55,210
4. OTHER RECEIVABLES:
(1) Other receivables as of December 31
, 2021 and December 31, 2020 are as follows.
Description
Current Non-current Current Non-current
(In millions of Korean Won)
Accounts receivable
– others (*)
2,785,799
373,569
2,757,116
350,549
Due from customers for contract work
Lease and rental deposits
Deposits
Others
Loss allowance
ٻ
4,220,970
741,168
4,016,972
702,341
(*) As of December 31, 2021 and December 31, 2020, the Group rec
ognized the reimbursement related to the warranty provisions as
a separate asset in the amount of
1,091,859 million and
1,073,098 million, respectively.
(2) Changes in other allowance for the year ended D
ecember 31, 2021 and December 31, 2020 are as follows.
Description
2021 2020
Beginning of the year
18,169
15,403
Impairment loss (reversal) 517 4,174
Write-off (871) (1,409)
Effect of foreign exchange differences 3,062 1
End of the year
20,877
18,169
5. OTHER FINANCIAL ASSETS:
(1) Other financial assets as of December 31, 2021 are as follows.
Description Current Non-current
Financial assets measured at FVPL
12,249,980
222,120
Financial assets measured at FVOCI 25,150 2,886,373
Financial assets measured at amortized cost 18,466 8,729
Derivative assets that are effective hedging instruments 103,050 422,064
12,396,646
3,539,286
ٻ
ٻ
ٻ
ٻ
ڎڔٻ
ٻ
Other financial assets as of December 31, 2020 are as follows.
December 31, 2020
Description Current Non-current
Financial assets measured at FVPL
12,705,388
388,069
Financial assets measured at FVOCI 36,831 2,286,113
Financial assets measured at amortized cost 29,565 8,400
Derivative assets that are effective hedging instruments 125,324 96,645
12,897,108
2,779,227
(2) Financial assets measured at FVOCI as of Decem
ber 31, 2021 and December 31, 2020 are as follows.
December 31,
2021
December 31,
2020
Description
Acquisition
cost
Debt instruments
440,927
450,711
327,730
Equity instruments (*) 2,336,347 2,460,812 1,995,214
2,777,274
2,911,523
2,322,944
(*) The Group makes an irrevocable election to present in other comprehensive income subsequent changes in the fair value of a
n
investment in an equity instrument that is not he
ld for trading at the date of initial recognition.
(3) Equity instruments classified into
financial assets measured at FVOCI as of December 31, 2021 and December
31, 2020 are as follows.
December 31,
2021
December 31,
2020
Name of the company
Ownership
percentage
Acquisition
cost
Book value
Book value
(%)
(In millions of Korean Won)
Hyundai Steel Company (*1) 6.87
835,375
434,277
451,650
Grab Holdings Limited 1.14 442,922 362,508 -
Hyundai Glovis Co., Ltd. 4.88 210,688 314,922 336,893
ANI Technologies Private Limited (OLA) 3.42 278,955 290,116 278,955
Hyundai Oilbank Co., Ltd. 4.35 53,734 230,812 222,524
Korea Aerospace Industries, Ltd. (*2) - 73,331 153,522 122,061
Hyundai Heavy Industries
Holdings Co., Ltd. 2.20 9,018 94,892 98,361
NICE Information Service Co., Ltd. 2.25 3,312 24,587 33,875
Hyundai Green Food Co., Ltd. 2.36 15,005 20,077 20,215
Hyundai M Partners Co., Ltd. 9.29 9,888 13,954 16,708
NICE Holdings Co., Ltd. 1.30 3,491 7,866 9,562
KT Corporation 0.09 8,655 7,443 5,762
Hyundai Asan Corporation 1.40 22,500 2,117 2,117
Korea Shipbuilding & Offshor
Engineering Co., Ltd (*3) - - - 177,165
Others
369,473 503,719 219,366
2,336,347
2,460,812
1,995,214
(*1) The Group entered into a total return swap agreement to transfer 1,367,114 shares out of total 10,540,709 shares with a th
ird
party.
(*2) The Group entered into a total return swap ag
reement to transfer total shares with a third party.
(*3) For the year ended December 31, 2021, the Gr
oup has disposed of all of its shares.
ٻ
ٻ
ٻ
ٻ
ڏڋٻ
ٻ
6. INVENTORIES:
Inventories as of December 31, 2021 an
d December 31, 2020 are as follows.
Description December 31, 2021 December 31, 2020
Finished goods
G
G
G
G
G
G
G
G
G
G
G
5,987,233
6,844,023
Merchandise
G G G G G G G G G G G G G G
59,518
44,356
Semifinished goods
G G G G G G G G G G G G G
711,155
576,950
Work in progress
G G G G G G
G
G
G
G
G
G
G
692,832
404,504
Raw materials
G G G G G G G G G G G
2,536,671
1,633,579
Supplies
G G G G G G G G G G G G G
315,871
299,259
Materials in transit
G G G G G G G G G G G G G
730,970
625,833
Others (*1)
G G G G G G G G G G G G G
611,391
905,230
Total (*2)
G
G
G
G
G
G
G
G
G
G
11,645,641
11,333,734
(*1) As of December 31, 2021 and December 31, 2020, others include inventories provided by operating lease with repurchase
agreement in the amount of
143,641 million and
89,059 million, respectively.
(*2) As of December 31, 2021 and December 31, 2020, the Gr
oup recognized a valuation allowance in the amount of
167,888
million and
164,980 million, respectively.
7. OTHER ASSETS:
Other assets as of December 31, 2021 and December 31, 2020 are as follows.
December 31, 2021 December 31, 2020
Description
Current Non-current Current Non-current
Accrued income
353,643
716
327,079
866
Advanced payments 662,919 - 726,609 -
Prepaid expenses 558,336 1,108,621 459,580 792,529
Prepaid value-added tax and others 506,955 81,947 520,103 86,114
2,081,853
1,191,284
2,033,371
879,509
8. NON-CURRENT ASSETS CLASSIFIED AS HELD FOR SALE:
Non-current assets classified as held for sale as of December 31, 2021 and December 31, 2020 are as follows.
Description December 31, 2021 December 31, 2020
Land
-
7,426
Building and others 28,121 -
Subsidiary (*) - 297,043
Total
28,121
304,469
Non-current liabilities classified as
held for sale (*)
-
214,066
(*) Hyundai Autoever Corp., an associate of the Company, entered into a contract to merge with Hyundai Autron Company Ltd., the
subsidiary of the Company,
and HYUNDAI
MNSOFT, Inc., the associate of the Co
mpany, in December 2020 and the merger
was completed as of April 1, 2021. Accordingly, the Group clas
sified the assets and liabilities related to Hyundai Autron Compa
ny
Ltd. to disposal group held for sale as of December 31, 2020 and it was disposed of during the year ended December 31, 2021.
ٻ
ٻ
ٻ
ٻ
ٻ
ڏڌٻ
ٻ
9. PROPERTY, PLANT AND EQUIPMENT:
(1) Property, plant and equipment (“PP&E”) as of December 31, 2021 and 2020 are as follows.
Descri
p
tion
Acquisition
cost
Accumulated
de
p
reciation
(
*
)
Book value
Acquisition
cost
Accumulated
de
p
reciation
(
*
)
Book value
(
In millions of Korean Won
)
Land
12,130,094
-
12,130,094
12,047,003
-
12,047,003
Buildin
g
s 10,872,099
(
4,108,392
)
(
3,711,935
)
Structures 1,634,658
(
820,896
)
(
735,703
)
Machinery and equipment 17,542,258 (10,884,908) 6,657,350 16,517,625 (9,848,680) 6,668,945
Vehicles 473,053
(
219,202
)
(
191,797
)
Dies, molds and tools 14,310,816
(
9,899,714
)
(
8,695,190
)
Office e
q
ui
p
ment 1,926,607
(
1,502,058
)
(
1,386,336
)
Others 309,479
(
102,861
)
(
87,328
)
Construction in progress 3,882,050 - 3,882,050 3,754,415 - 3,754,415
63,081,114
(27,538,031)
35,543,083
58,749,198
(24,656,969)
34,092,229
(*) Accumulated impairment losses are included.
(2) The changes in PP&E for the year ended December 31, 2021 are as follows.
Descri
p
tion
Beginning
of the
y
ear
Ac
q
uisitions
Transfers
within PP&E
Dis
p
osals
De
p
reciation
Others
(
*
)
End of
the
y
ear
Land
12,047,003
68,990
39,283
(1,303)
-
(23,879)
12,130,094
Buildin
g
s 6,355,852 39,130 626,269
(
3,460
)
(
328,580
)
Structures 762,248 27,774 103,295 (14,823) (68,500) 3,768 813,762
Machinery and
equipment
6,668,945
28,839
922,091
(31,931)
(1,010,082)
79,488
6,657,350
Vehicles 205,102 84,104 82,730
(
51,161
)
(
61,111
)
(
5,813
)
Dies, molds
and tools
3,837,278
27,708
1,792,988
(18,308)
(1,292,982)
64,418
4,411,102
Office e
q
ui
p
ment 385,763 61,338 130,049
(
1,919
)
(
157,611
)
Others 75,623 8,451 147,235 (23,572) (13,650) 12,531 206,618
Construction-in
-progress
3,754,415
4,036,440
(3,843,940)
(451)
-
(64,414)
3,882,050
34,092,229
4,382,774
-
(146,928)
(2,932,516)
147,524
35,543,083
(*) Others include the effect of foreign exchange differences, transfers from or to other accounts, impairment loss of
44,499 million
allocated from the impairment of CGU attributable to Hyundai Tr
uck & Bus(China) Co., Ltd. and others. The recoverable amount of
CGU attributable to Hyundai Truck & Bus(China) Co., Ltd. was ba
sed on its value in use or fair value less costs to disposal(net
fair
value), and the discount rate applied to the measurement of value in use is 8.7%.
The changes in PP&E for the year ende
d December 31, 2020 are as follows.
Descri
p
tion
Beginning
of the
y
ear
Ac
q
uisitions
Transfers
within PP&E
Dis
p
osals
De
p
reciation
Transfer to
assets
classified as
h
eld for sale
Others
(
*
)
End of
the
y
ear
(
In millions of Korean Won
)
Land
12,039,472
28,943
98,961
(39,754)
-
(65,287)
(15,332)
12,047,003
Buildings 6,229,826 9,425 453,705 (23,812) (308,194) (12,504) 7,406 6,355,852
Structures 749,571 12,974 77,409
(
3,990
)
(
66,178
)
(
519
)
(
7,019
)
Machinery and
equipment
6,534,417
10,812
1,347,753
(70,689)
(1,002,135)
(408)
(150,805)
6,668,945
Vehicles 198,330 37,379 89,552
(
49,189
)
(
58,213
)
(
62
)
(
12,695
)
Dies, molds
and tools
3,034,610
7,060
1,998,356
(
11,715
)
(
1,122,396
)
(
5,156
)
(
63,481
)
3,837,278
Office equipment 415,173 37,533 112,808 (1,292) (161,624) (8,398) (8,437) 385,763
Others 43,317 31,310 32,849
(
2,074
)
(
20,445
)
(
53
)
(
9,281
)
Construction-in
-
p
ro
g
ress
3,586,808
4,495,312
(
4,211,393
)
(
742
)
-
-
(
115,570
)
3,754,415
32,831,524
4,670,748
-
(203,257)
(2,739,185)
(92,387)
(375,214)
34,092,229
(*) Others include the effect of foreign exchange differences, transfers from or to other accounts and impairment losses and ot
hers.
ٻ
ٻ
ٻ
ٻ
ڏڍٻ
ٻ
10. INVESTMENT PROPERTY:
(1) Investment property as of December 31, 2021 and December 31, 2020 are as follows.
December 31, 2021 December 31, 2020
Description
Acquisition
cost
Accumulated
depreciation
Book value
Acquisition
cost
Accumulated
depreciation
Book value
Land
54,284
-
54,284
56,046
-
56,046
Buildings 313,777 (221,919) 91,858 298,673 (204,673) 94,000
Structures 18,630 (8,116) 10,514 18,630 (7,709) 10,921
386,691
(230,035)
156,656
373,349
(212,382)
160,967
(2) The changes in investment property for the year ended December 31, 2021 are as follows:
Description
Beginning
of the year
Disposals Transfers(*)
Depreciation
Effect of foreign
exchange
differences
End of
the year
Land
56,046
(1,762)
-
-
-
54,284
Buildings 94,000 - 1,537 (4,990) 1,311 91,858
Structures 10,921 - - (408) 1 10,514
160,967
(1,762)
1,537
(5,398)
1,312
156,656
(*) Transferred amount from
Construction-in-progress
.
The changes in Investment properties for the year ended December 31, 2020 are as follows.
Description
Beginning
of the year
Transfers(*)
Depreciation
Effect of foreign
exchange
differences
End of
the year
Land
56,046
-
-
-
56,046
Buildings 104,118 10 (9,920) (208) 94,000
Structures 11,330 - (408) (1) 10,921
171,494
10
(10,328)
(209)
160,967
(*) Transferred amount from
Construction-in-progress
.
(3) The fair value of Investment properties as of December 31, 2021 and December 31, 2020 are as follows.
Description
December 31, 2021 December 31, 2020
Land
54,284
56,046
Buildings 338,579 315,854
Structures 15,496 15,496
408,359
387,396
The fair value measurement of the Investment properties was
performed by an independent third party. The Group deems
the change in fair value from the fair value measurement performed at the initial recognition of the Investment properties
is not material.
The fair value of the Investment properties is classified as Le
vel 3, based on the inputs used in the valuation techniques.
The fair value has been determined base
d on the cost approach and the market
approach. The cost approach measures
fair value as current replacement cost considering building st
ructures and design, supplement
ary installation, depreciation
period.
ٻ
ٻ
ٻ
ٻ
ڏڎٻ
ٻ
(4) Income and expenses related to Investment properties for the years ended December 31, 2021 and 2020 are as
follows.
Description
2021 2020
Rental income
47,710
49,536
Operating and maintenance expenses 13,265 17,141
11. INTANGIBLE ASSETS:
(1) Intangible assets as of December 31, 2021 and December 31, 2020 are as follows.
December 31, 2021 December 31, 2020
Description
Acquisition
cost
Accumulated
amortization (*)
Book value
Acquisition
cost
Accumulated
amortization (*)
Book value
Goodwill
409,570
(35,807)
373,763
377,015
(35,539)
341,476
Development
costs
10,374,450
(6,331,957)
4,042,493
9,957,047
(5,679,376)
4,277,671
Industrial
property rights
477,280
(338,071)
139,209
447,109
(201,709)
245,400
Software 1,567,846 (1,089,990) 477,856 1,397,880 (978,779) 419,101
Others 821,000 (189,077) 631,923 486,459 (235,196) 251,263
Construction in
progress
197,278
(15,536)
181,742
146,890
(4,234)
142,656
13,847,424
(8,000,438)
5,846,986
12,812,400
(7,134,833)
5,677,567
(*) Accumulated impairment losses are included.
(2) The changes in intangible
assets for the year ended December 31, 2021 are as follows.
Description
Beginning
of the year
Internal
developments
External
acquisition
Transfers
within
intangible
assets Disposals
Goodwill
341,476
-
-
-
-
Development Costs 4,277,671 1,291,676 31,287 41,147 (417)
Industrial property rights 245,400 64 951 28,076 (152)
Software 419,101 8,531 41,316 32,113 (110)
Others 251,263 - 1,150 21,771 (18,662)
Construction in progress 142,656 11,124 171,226 (123,107) -
5,677,567
1,311,395
245,930
-
(19,341)
Description Amortization
Impairment loss
/reversal (*1)
Transfer to Non-
current assets
classified as held
for sale
Others (*2)
End of
the year
Goodwill
-
(76,805)
-
109,092
373,763
Development Costs (1,406,713) (192,213) (3,496) 3,551 4,042,493
Industrial property rights (24,076) (112,278) - 1,224 139,209
Software (158,353) (4) - 135,262 477,856
Others (28,681) 6 (162) 405,238 631,923
Construction in progress - (12,853) - (7,304) 181,742
(1,617,823)
(394,147)
(3,658)
647,063
5,846,986
(*1) Impairment losses include impairment of development costs due to the discontinued sales and development projects, impairme
nt
loss of
246,707 million allocated from the impairment of CGU attribut
able to Hyundai Truck & Bus(China) Co., Ltd. and others.
ٻ
ٻ
ٻ
ٻ
ڏڏٻ
ٻ
(*2) Others include the effect of foreign exchange differences, transfers from or to other accounts, changes in the scope of co
nsolidation
and others.
The changes in intangible assets for the ye
ar ended December 31, 2020 are as follows.
Description
Beginning
of the year
Internal
developments
External
acquisition
Transfers
within
intangible
assets Disposals
Goodwill
261,525
-
-
-
-
Development Costs 4,076,343 1,532,411 25,070 35,848 (4,306)
Industrial property rights 133,275 153 1,579 25,032 (610)
Software 317,989 7,827 38,409 129,436 (1,072)
Others 249,948 - 10,166 4,189 (2,217)
Construction in progress 227,416 48,189 64,514 (194,505) -
5,266,496
1,588,580
139,738
-
(8,205)
Description Amortization
Impairment loss
(*1)
Transfer to Non-
current assets
classified as held
for sale
Others (*2)
End of
the year
Goodwill
-
-
-
79,951
341,476
Development Costs (1,244,996) (187,580) (58,341) 103,222 4,277,671
Industrial property rights (25,261) - (2,680) 113,912 245,400
Software (154,890) (42) (9,975) 91,419 419,101
Others (10,713) (339) (752) 981 251,263
Construction in progress - (1,567) (50) (1,341) 142,656
(1,435,860)
(189,528)
(71,798)
388,144
5,677,567
(*1) Impairment losses were recognized for development costs due to the discontinued sales and development projects
for the year ended December 31, 2020.
(*2) Others include the effect of foreign exchange differences and transfer from or to other accounts and others.
(3) Development costs of intangible assets as
of December 31, 2021 consist of as follows.
Description Book value Remaining amortization period (*)
Korean Won)
Automobile Developing
1,176,530 -
Ȏ
2,378,965 32 months
Powertrain Developing 142,567 -
Ȏ
Amortizing
171,828 25 months
Others Developing 54 -
Ȏ
Amortizing
172,549 46 months
4,042,493
(*) Since the remaining amortization period differs for each project, the weighted average remaining useful lives of the develo
pment
costs at the end of reporting period are disclosed.
ٻ
ٻ
ٻ
ٻ
ڏڐٻ
ٻ
Description Book value Residual useful lives (*)
Korean Won)
Automobile Developing
1,609,463 -
Ȏ
Amortizing
2,145,937 35 months
Powertrain Developing 109,467 -
Ȏ
Amortizing
236,310 29 months
Others Developing 190 -
Ȏ
Amortizing
176,304 42 months
ٻ
4,277,671
(*) Since the remaining amortization period differs for each project, the weighted average remaining useful lives of the develo
pment
costs at the end of reporting period are disclosed.
(4) Research and development expenditures for the y
ears ended December 31, 2021 and 2020 are as follows.
Description
2021 2020
Development costs (intangible assets)
1,322,963
1,557,481
Research and development costs (*1) 1,774,934 1,539,580
Total (*2)
3,097,897
3,097,061
(*1) Presented in manufacturing costs, administrative expenses.
(*2) Amortization of development costs is not included.
(5) Impairment test of goodwill
The allocation of goodwill amongst the Group’s CGUs as of D
ecember 31, 2021 and December 31, 2020 are as follows.
Segment
December 31, 2021 December 31, 2020
Vehicle
253,204
240,514
Finance 482 482
Others 120,077 100,480
373,763
341,476
The recoverable amounts of the Group’s CGUs are measured
as their value-in-use calculated based on cash flow
projections of financial budgets for the next five years approved by management. The pre-tax discount rate applied
to the cash flow projections for the years ended December
31, 2021 and 2020, are 8.7% and 11.9% respectively.
Cash flow projections beyond the five-year period are extrapolated by using the estimated growth rate which does
not exceed the long-term average growth rate of the region and industry to which the CGU belongs. An impairment
loss on goodwill of
76,805 million has been recognized with respect to the impairment of CGU attributable to
Hyundai Truck & Bus(China) Co., Ltd. for the year ende
d December 31, 2021. No impairment loss had been
recognized for the year ended December 31, 2020.
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ٻ
ٻ
ٻ
ڏڑٻ
ٻ
12. LEASES (AS A LESSEE):
(1) The changes in right-of-use assets for the year ended December 31, 2021 are as follows.
Description
Beginning
of the year
Acquisitions
Disposals
Land
143,679
13,863
(457)
(6,686)
(66,795)
83,604
Buildings
754,149
Structures
2,370
Others
100,703
836,324
363,005
(24,175)
(201,426)
(32,902)
940,826
(*) Others include the effect of foreign exchange differences, impairment loss of
46,910 million allocated from the impairment of
CGU attributable to Hyundai Truck & Bus(China) Co., Ltd. and others.
year ended December 31, 2020 are as follows.
Description
Beginning
of the year
Acquisitions
Disposals
Land
20,487
4,323
(1)
(7,766)
126,636
143,679
Buildings
681,335
Structures
2,672
Others
8,638
734,542
237,360
(45,377)
(195,877)
105,676
836,324
(*) Others include the effect of foreign exchange differences and others.
(2) Lease liabilities as of December 31, 2021 and December 31, 2020 are as follows.
Description
December 31, 2021
December 31, 2020
(In millions of Korean Won)
Undiscounted lease liabilities
1,150,757
943,470
Discounted lease liabilities
950,572
757,044
Current
167,266
141,478
Non-current 783,306
615,566
(3) Expenses recognized in relation to leases for th
e years ended December 31, 2021 and 2020 are as follows.
Description
December 31, 2021
December 31, 2020
(In millions of Korean Won)
Interest on lease liabilities
25,126
30,580
Expenses in relation to leases of short-term and low-
value assets
20,907
21,342
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13. INVESTMENTS IN JOINT VENTURES AND ASSOCIATES:
(1) Investments in joint ventures and associ
ates as of December 31, 2021 are as follows.
Name of the company
Nature of
business
Location
Ownership
percentage
Book value
(%)
(In millions of
Korean Won)
Beijing Hyundai Qiche Financing
Company (BHAF) (*1,3) Financing China 53.00
736,704
Beijing-Hyundai Motor Company
(BHMC) (*1) Manufacturing China 50.00
345,950
Hyundai WIA Automotive Engine
(Shandong) Company (WAE)
Manufacturing China 31.40
245,868
Motional AD LLC (*1) R&D USA 25.97
1,025,263
Boston Dynamics, Inc. R&D
USA
30.00
414,634
Hyundai Capital Bank Europe GmbH
(HCBE) Financing
German
y
49.00
498,050
Kia Corporation (*4) Manufacturing Korea 33.88
11,620,132
Hyundai Engineering & Construction
Co., Ltd. Construction Korea 20.95
2,935,786
Hyundai Transys Inc. Manufacturing Korea 41.13
1,085,858
Hyundai WIA Corporation Manufacturing Korea 25.35
729,053
Hyundai Autoever Corp. (*5) IT service Korea 31.59
410,935
Hyundai Commercial Inc. Financing Korea 37.50
339,300
Hyundai Motor Securities Co., Ltd.
Securities
Brokerage Korea 25.43
314,532
Eukor Car Carriers Inc. (*2) Transportation Korea 12.00
186,489
Haevichi Hotels & Resorts Co., Ltd. Hotelkeeping Korea 41.90
98,894
Others
1,441,669
22,429,117
(*1) Each of the joint arrangements in which the Group retains
joint control is structured through a separate entity and there
are no
contractual terms stating that the parties retain rights to th
e assets and obligations for the liabilities relating to the join
t
arrangement or other relevant facts and circumstances. As a result, the Group considers that the parties that retain joint con
trol
in the arrangement have rights to the net assets and classifies the joint arrangements as joint ventures. Also, there are
restrictions, which require consent from the director who is designated by the other investors, for certain transactions, such
as
payment of dividend.
(*2) As the Group is considered to be able to exercise significant influence by representation on the board of directors of the
investee and other reasons, although the total ownership percentage is less than 20%, the investment is accounted for using the
equity method.
(*3) The entity is categorized as a joint venture although the Group’s total ownership percentage is a majority share of 53%, b
ecause
the Group does not have control over the entity by virtue of an agreement with the other investors.
(*4) During the year ended December 31, 2021, the name of the company was changed from Kia Motors Corporation to Kia
Corporation.
(*5) During the year ended December 31, 2021, as the merger with Hyundai Autron Company Ltd., the subsidiary of the Company,
and HYUNDAI MNSOFT, In
c., the associate of the Company, was complete
d, the Group’s ownership percentage was changed
from 28.48% to 31.59%.
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as of December 31, 2020 are as follows.
Name of the company
Nature of
business
Location
Ownership
percentage
Book value
(%)
(In millions of
Korean Won)
Beijing-Hyundai Motor Company
(BHMC) (*1) Manufacturing China 50.00
779,958
Beijing Hyundai Qiche Financing
Company (BHAF) (*1,3) Financing China 53.00
627,895
Hyundai WIA Automotive Engine
(Shandong) Company (WAE)
Manufacturing China 31.40
224,979
Motional AD LLC (*1,4) R&D USA 26.00
1,053,282
Hyundai Capital Bank Europe GmbH
(HCBE) Financing
German
y
49.00
495,999
Kia Motors Corporation Manufacturing Korea 33.88
9,972,824
Hyundai Engineering & Construction
Co., Ltd. Construction Korea 20.95
2,835,399
Hyundai Transys Inc. Manufacturing Korea 41.13
1,017,906
Hyundai WIA Corporation Manufacturing Korea 25.35
694,991
Hyundai Motor Securities Co., Ltd.
Securities
brokerage Korea 27.49
310,472
Hyundai Commercial Inc. Financing Korea 37.50
261,601
Eukor Car Carriers Inc. (*2) Transportation Korea 12.00
150,503
Hyundai Autoever Corp. IT service Korea 28.48
158,073
Haevichi Hotels & Resorts Co., Ltd. Hotelkeeping Korea 41.90
97,655
Others
1,243,723
19,925,260
(*1) Each of the joint arrangements in which the Group retains
joint control is structured through a separate entity and there
are no
contractual terms stating that the parties retain rights to th
e assets and obligations for the liabilities relating to the join
t
arrangement or other relevant facts and circumstances. As a result, the Group considers that the parties that retain joint cont
rol
in the arrangement have rights to the net assets and classifies the joint arrangements as joint ventures. Also, there are
restrictions, which require consent from the director who is designated by the other investors, for certain transactions, such
as
payment of dividend.
(*2) As the Group is considered to be able to exercise significant influence by representation on the board of directors of the
investee and other reasons, although the total ownership percentage is less than 20%, the investment is accounted for using the
equity method.
(*3) The entity is categorized as a joint venture although the Group’s total ownership percentage is a majority share of 53%, b
ecause
the Group does not have control over the entity by virtue of an agreement with the other investors.
(*4) During the year ended December 31, 2020, the name of the company was changed from Hyundai-Aptiv AD LLC to Motional
AD LLC.
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(2) The changes in investments in joint ventures and asso
ciates for the year ended December 31, 2021 are as follows.
Name of the company
Beginning of
the year
Acquisitions
(disposals)
Share of
profits (losses)
for the period
Dividends
BHAF
627,895
-
50,724
(15,880)
73,965
736,704
BHMC 779,958 - (502,344) - 68,336 345,950
WAE 224,979 - (3,432) - 24,321 245,868
Motional AD LLC 1,053,282 - (122,871) - 94,852 1,025,263
Boston Dynamics, Inc. (*2) - 431,882 (36,010) - 18,762 414,634
HCBE 495,999 - (99) - 2,150 498,050
Kia Corporation 9,972,824 - 1,601,473 (137,318) 183,153 11,620,132
Hyundai Engineering &
Construction Co., Ltd. 2,835,399 - 82,421 (13,996) 31,962 2,935,786
Hyundai Transys Inc. 1,017,906 - 39,223 - 28,729 1,085,858
Hyundai WIA Corporation 694,991 - 16,637 (4,826) 22,251 729,053
Hyundai Autoever Corp. 158,073 - 24,876 (4,485) 232,471 410,935
Hyundai Commercial Inc. 261,601 - 67,187 (3,750) 14,262 339,300
Hyundai Motor Securities
Co., Ltd.
Eukor Car Carriers Inc. 150,503 - 22,457 - 13,529 186,489
Haevichi Hotels & Resorts
Co., Ltd. 97,655 - 980 - 259 98,894
Others 1,243,723 208,988 14,342 (12,344) (13,040) 1,441,669
19,925,260
640,870
1,278,591
(198,043)
782,439
22,429,117
(*1) Others consist of changes in accumulated other comprehensive income (loss) and others.
(*2) Share acquisition has been completed in the year ended December 31, 2021, and the acquisition cost is measured as the cash
paid
during the current year, cash that will be paid in the followin
g year, and the value of put option owned by other investors.
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ٻ
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The changes in investments in joint ventures and a
ssociates for the year ended December 31, 2020 are as
follows.
Name of the company
Beginning of
the year
Acquisitions
(disposals)
Share of
profits (losses)
for the period
Dividends
BHMC
1,256,925
-
(498,581)
-
21,614
779,958
BHAF 577,810 - 46,908 - 3,177 627,895
WAE 154,136 76,683 (6,077) - 237 224,979
Motional AD LLC(*2) - 1,294,367 (99,103) - (141,982) 1,053,282
HCBE 159,948 330,158 1,219 - 4,674 495,999
Kia Motors Corporation 9,655,017 - 505,155 (157,916) (29,432) 9,972,824
Hyundai Engineering &
Construction Co., Ltd. 2,859,169 - 2,166 (13,997) (11,939) 2,835,399
Hyundai Transys Inc. 1,026,563 - (3,269) - (5,388) 1,017,906
Hyundai WIA Corporation 682,526 - 20,022 (4,826) (2,731) 694,991
Hyundai Motor Securities
Co., Ltd.
Hyundai Commercial Inc. 255,800 - 43,937 - (38,136) 261,601
Eukor Car Carriers Inc. 173,212 - (13,300) - (9,409) 150,503
Hyundai Autoever Corp. 145,076 - 16,808 (4,246) 435 158,073
Haevichi Hotels & Resorts
Co., Ltd. 101,578 - (2,802) - (1,121) 97,655
Others 1,044,084 164,664 61,437 (14,707) (11,755) 1,243,723
18,375,290
1,865,872
103,676
(200,531)
(219,047)
19,925,260
(*1) Others consist of changes in accumulated other comprehensive income (loss) and others.
(*2) The joint venture was incorporated during the year ended December 31, 2020, and the acquisition cost is measured as the fa
ir
value of paid cash, contributed patent licenses and the provision of services in exchange for the shares of the joint venture.
(3) Summarized financial information of the Group’s major joint ventures and associates as of and for the year
Name of the company
Current
assets
Non-current
assets
Current
liabilities
Non-current
liabilities
BHAF (*)
5,648,345
-
4,258,337
-
BHMC 2,877,226 3,897,225 5,047,580 984,476
WAE 648,858 530,099 185,159 255,961
Motional AD LLC 630,770 3,603,314 97,631 105,139
Boston Dynamics, Inc. 117,854 250,999 55,254 79,823
HCBE (*) 6,910,165 - 5,916,354 -
Kia Corporation 29,205,483 37,644,514 21,562,636 10,374,805
Hyundai Engineering &
Construction Co., Ltd.
14,555,535
5,091,172
7,616,041
2,594,756
Hyundai Transys Inc. 3,592,986 3,043,732 2,164,191 1,786,510
Hyundai WIA Corporation 4,156,485 3,593,022 2,126,275 1,927,968
Hyundai Autoever Corp. 1,471,052 875,071 721,374 248,927
Hyundai Commercial Inc. (*) 10,001,066 - 8,699,018 -
Hyundai Motor Securities Co., Ltd. (*) 8,806,128 - 7,645,418 -
Eukor Car Carriers Inc. 534,016 3,169,325 654,912 1,467,448
Haevichi Hotels & Resorts Co., Ltd. 44,922 409,187 235,954 44,458
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ٻ
Name of the company Sales
Profit (loss) for
the period from
continuing
operations
Other
comprehensive
income (loss)
Total
comprehensive
income (loss)
BHAF (*)
423,416
95,703
-
95,703
BHMC 6,240,989 (1,012,933) - (1,012,933)
WAE 797,685 (4,226) - (4,226)
Motional AD LLC 949 (516,204) (5,025) (521,229)
Boston Dynamics, Inc. 66,779 (196,950) - (196,950)
HCBE (*) 711,616 (325) 4,241 3,916
Kia Corporation 69,862,366 4,760,311 664,223 5,424,534
Hyundai Engineering &
Construction Co., Ltd.
18,065,534
549,501
168,103
717,604
Hyundai Transys Inc. 8,143,951 90,623 66,409 157,032
Hyundai WIA Corporation 7,527,739 56,071 131,926 187,997
Hyundai Autoever Corp. 2,070,382 71,368 13,648 85,016
Hyundai Commercial Inc. (*) 482,087 185,303 (31,808) 153,495
Hyundai Motor Securities Co., Ltd. (*) 853,770 117,749 913 118,662
Eukor Car Carriers Inc. 1,894,623 192,229 137,672 329,901
Haevichi Hotels & Resorts Co., Ltd. 116,466 2,063 16 2,079
(*) The companies operate financial business and their total asse
ts (liabilities) are included in current assets (liabilities)
as the companies
do not distinguish current and non-current portion in their separate financial statements.
ended December 31, 2020 is as follows.
Name of the company
Current
assets
Non-current
assets
Current
liabilities
Non-current
liabilities
BHMC
4,213,182
4,178,661
6,050,736
722,467
BHAF (*) 6,077,427 - 4,892,720 -
WAE 577,626 640,138 273,051 279,354
Motional AD LLC 1,618,551 2,681,753 70,266 76,808
HCBE (*) 5,635,284 - 4,648,027 -
Kia Motors Corporation 26,093,382 34,397,061 21,097,589 9,501,182
Hyundai Engineering &
Construction Co., Ltd.
13,341,687
4,540,331
6,410,469
2,705,171
Hyundai Transys Inc. 3,279,222 2,747,382 2,200,265 1,381,699
Hyundai WIA Corporation 3,987,965 3,731,941 1,985,718 2,208,328
Hyundai Motor Securities Co., Ltd (*) 9,167,903 - 8,102,116 -
Hyundai Commercial Inc. (*) 9,369,111 - 8,075,656 -
Eukor Car Carriers Inc. 318,448 2,849,023 524,472 1,390,993
Hyundai Autoever Corp. 797,280 279,747 417,384 97,262
Haevichi Hotels & Resorts Co., Ltd. 37,870 412,409 219,589 59,072
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Name of the company Sales
Profit (loss) for
the period from
continuing
operations
Other
comprehensive
income (loss)
Total
comprehensive
income (loss)
BHMC
6,872,866
(1,152,001)
-
(1,152,001)
BHAF (*) 229,501 88,503 - 88,503
WAE 962,901 (41,366) - (41,366)
Motional AD LLC 645 (231,530) (16) (231,546)
HCBE (*) 540,080 5,216 8,080 13,296
Kia Motors Corporation 59,168,096 1,487,585 (112,980) 1,374,605
Hyundai Engineering &
Construction Co., Ltd.
16,970,859
227,697
(90,687)
137,010
Hyundai Transys Inc. 7,253,615 (5,164) (9,813) (14,977)
Hyundai WIA Corporation 6,592,242 53,672 (22,193) 31,479
Hyundai Motor Securities Co., Ltd. (*) 839,993 84,299 13,792 98,091
Hyundai Commercial Inc. (*) 440,093 122,554 9,828 132,382
Eukor Car Carriers Inc. 1,292,324 (110,202) (77,690) (187,892)
Hyundai Autoever Corp. 1,562,593 60,786 1,494 62,280
Haevichi Hotels & Resorts Co., Ltd. 91,780 (5,683) (654) (6,337)
(*) The companies operate financial business and their total as
sets (liabilities) are included in current assets (liabilities)
as the companies
do not distinguish current and non-current portion in their separate financial statements.
(4) Summarized additional financial information of the Group’s major joint ventures as of and for the year
ended December 31, 2021 is as follows.
Name of the
company
Cash and
cash
equivalents
Current
financial
liabilities
Non-current
financial
liabilities
Depreciation
and
amortization
Interest
income
Interest
expenses
Income tax
expense
BHAF(*)
860,234
3,993,580
-
8,155
419,195
175,403
32,648
BHMC 975,177 379,970 723,688 481,351 11,599 81,288 2,665
Motional AD
LLC
188,571
14,407
71,982
73,807
3,642
-
(7,875)
(*) Operating finance business of which to
tal assets (liabilities) are included in current financial liabilities as BHAF does n
ot distinguish
current and non-current portion in its separate financial statements.
Summarized additional financial information of the Group’s majo
r joint ventures as of and for the year ended December
31, 2020 is as follows.
Name of the
company
Cash and
cash
equivalents
Current
financial
liabilities
Non-current
financial
liabilities
Depreciation
and
amortization
Interest
income
Interest
expenses
Income tax
expense
BHMC
721,882
634,448
562,975
478,859
12,959
88,336
1,153
BHAF(*) 1,513,718 4,603,376 - 7,156 428,836 185,578 29,937
Motional AD
LLC
1,577,353
9,756
60,970
43,646
1,739
4
(11,664)
(*) Operating finance business of which to
tal assets (liabilities) are included in current financial liabilities as BHAF does n
ot distinguish
current and non-current portion in its separate financial statements.
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ڐڎٻ
ٻ
(5) Reconciliation of the Group’s share of net assets of
the Group’s major joint ventures and associates to their
carrying amounts as of December 31, 2021 is as follows.
Name of the company
Group’s share of
net assets Goodwill
Unrealised
profit (loss) and
others
Carrying
amounts
BHAF
736,704
-
-
736,704
BHMC 371,198 - (25,248) 345,950
WAE (*) 238,021 7,809 38 245,868
Motional AD LLC 1,047,834 - (22,571) 1,025,263
Boston Dynamics, Inc. (*) 199,325 209,428 5,881 414,634
HCBE 474,523 22,341 1,186 498,050
Kia Corporation 11,505,153 197,089 (82,110) 11,620,132
Hyundai Engineering & Construction
Co., Ltd. (*)
2,204,424
731,362
-
2,935,786
Hyundai Transys Inc. 1,070,931 - 14,927 1,085,858
Hyundai WIA Corporation 823,381 - (94,328) 729,053
Hyundai Autoever Corp. (*) 352,013 58,822 100 410,935
Hyundai Commercial Inc. 339,300 - - 339,300
Hyundai Motor Securities Co., Ltd. 275,563 40,052 (1,083) 314,532
Eukor Car Carriers Inc. 186,227 - 262 186,489
Haevichi Hotels & Resorts Co., Ltd. (*) 95,318 3,576 - 98,894
(*) The difference between the carrying amount and the fair valu
e of the investee’s identifiable assets and liabilities as of t
he acquisition
date is included in the amount of net assets.
amounts as of December 31, 2020 is as follows.
Name of the company
Group’s share
of
net assets Goodwill
Unrealised
profit (loss) and
others
Carrying
amounts
BHMC
809,320
-
(29,362)
779,958
BHAF 627,895 - - 627,895
WAE (*) 217,132 7,809 38 224,979
Motional AD LLC 1,079,841 - (26,559) 1,053,282
HCBE 472,534 22,341 1,124 495,999
Kia Motors Corporation 9,857,162 197,089 (81,427) 9,972,824
Hyundai Engineering & Construction
Co., Ltd. (*)
2,104,036
731,362
1
2,835,399
Hyundai Transys Inc. 1,003,185 - 14,721 1,017,906
Hyundai WIA Corporation 789,544 - (94,553) 694,991
Hyundai Motor Securities Co., Ltd. 271,503 40,052 (1,083) 310,472
Hyundai Commercial Inc. 261,601 - - 261,601
Eukor Car Carriers Inc. 150,241 - 262 150,503
Hyundai Autoever Corp. 158,073 - - 158,073
Haevichi Hotels & Resorts Co., Ltd. (*) 94,079 3,576 - 97,655
(*) The difference between the carrying amount and the fair valu
e of the investee’s identifiable assets and liabilities as of t
he acquisition
date is included in the amount of net assets.
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ٻ
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ڐڏٻ
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(6) The market price of majo
r listed equity securities as of
December 31, 2021 is as follows.
Name of the company Price per share
Total number of
shares Market value
Kia Corporation
82,200
137,318,251
11,287,560
Hyundai Engineering & Construction Co., Ltd. 44,450 23,327,400 1,036,903
Hyundai Autoever Corp. 138,000 8,664,334 1,195,678
Hyundai WIA Corporation 79,900 6,893,596 550,798
Hyundai Motor Securities Co., Ltd. 12,350 8,065,595 99,610
14. FINANCIAL SERVICES RECEIVABLES:
(1)
Financial services receivables as of December
31, 2021 and December 31, 2020 are as follows.
Description
December 31,
2021
December 31,
2020
Loans
61,959,509
52,461,355
Card receivables 18,728,408 17,094,598
Financial lease receivables 2,123,472 2,429,420
Others 35,291 34,407
82,846,680 72,019,780
Loss allowance (1,551,987) (1,685,229)
Loan origination fee (231,762) (643,063)
Present value discount accounts (33,799) (26,278)
81,029,132
69,665,210
(2) Transfer of financial services receivables
As of December 31, 2021 and December 31, 2020, the Group has
issued asset-backed securities with loan obligations for
which card receivables are underlying asse
ts and related asset-backed securities have the right of recourse. As of
December 31, 2021, the carrying amount of financial assets that were transferred but not derecognized (including inter-
company bonds) amounted to
26,292,997 million and its fair value is
26,213,213 million. The carrying amount of
related liabilities is
19,352,363 m
illion and its fair value is
19,225,190 million, thus, net position of fair value is
6,988,023 million. As of December 31, 2020
, the carrying amount of financial as
sets that were transferred but not
derecognized (including inter-company bonds) amounted to
19,287,184 million and its fair value is
19,308,126
million. The carrying amount of related liabilities is
13,918,870 million and its fair value is
14,036,642 m
illion, thus
net position of fair value is
5,271,484 million.
ٻ
ٻ
ٻ
ٻ
ڐڐٻ
ٻ
(3) The changes in loss allowance of fi
nancial services receivables for the year
ended December 31, 2021 are as follows.
12-Month
expected
credit losses
Lifetime expected
credit losses
Description
Not Impaired
Impaired
Total loan
obligations
Beginning of the year
441,192
300,082
315,136
1,056,410
Transfer to 12-Month expected
credit losses 71,703
(67,049)
(4,654)
-
Transfer to lifetime expected
credit losses (57,656)
61,633
(3,977)
-
Transfer to credit-impaired
financial assets (2,773)
(5,866)
8,639
-
Impairment loss (reversal) (27,338)
128,769
135,156
236,587
Collection (write-off) 50
(114,436) (246,714) (361,100)
Disposals and others -
-
234
234
Effect of foreign exchange
differences 24,029
13,292 37,535
214
End of the year
449,207
316,425
204,034
969,666
Card receivables
12-Month
expected
credit losses
Lifetime expected
credit losses
Description
Not Impaired
Impaired
Total card
receivables
Beginning of the year
186,440
142,390
225,298
554,128
Transfer to 12-Month expected
credit losses 49,439
(49,287)
(152)
-
Transfer to lifetime expected
credit losses (14,871)
15,045
(174)
-
Transfer to credit-impaired
financial assets (117,994)
(56,471)
174,465
-
Impairment loss (reversal) 120,496
111,716
99,160
331,372
Collection (write-off) -
-
(332,434)
(332,434)
Disposals and others (27,801)
(2)
(11,563) (39,366)
End of the year
195,709
163,391
154,600
513,700
Total
Allowances
12-Month
expected
credit losses
Lifetime expected
credit losses
Description
Not Impaired
Impaired
Total others
Beginning of the year
18,032
6,368
50,291
74,691
1,685,229
Transfer to 12-Month expected
credit losses 3,649
(1,461)
(2,188)
-
-
Transfer to lifetime expected
credit losses (1,879)
2,388
(509)
-
-
Transfer to credit-impaired
financial assets (144)
(233)
377
-
-
Impairment loss (reversal) (5,359)
1,057
(1,449)
(5,751)
562,208
Collection (write-off) -
-
(319)
(319)
(693,853)
Disposals and others -
-
-
-
(39,132)
Effect of foreign exchange
differences -
-
-
-
37,535
End of the year
14,299
8,119
46,203
68,621
1,551,987
ٻ
ٻ
ٻ
ٻ
ڐڑٻ
ٻ
The changes in allowance for doubtful
accounts of financial services receivables for the year ended December 31,
2020 are as follows.
12-Month
expected
credit losses
Lifetime expected
credit losses
Description
Not Impaired
Impaired
Total loan
obligations
Beginning of the year
356,282
289,464
319,719
965,465
Transfer to 12-Month expected
credit losses 64,127
(60,543)
(3,584)
-
Transfer to lifetime expected
credit losses (23,721)
25,806
(2,085)
-
Transfer to credit-impaired
financial assets (4,071)
(10,396)
14,467
-
Impairment loss (reversal) 65,196
310,654
283,921
659,771
Collection (write-off) 5
(241,481) (148,399) (389,875)
Disposals and others (31)
(4)
(148,693) (148,728)
Effect of foreign exchange
differences (16,595)
(13,418)
(210)
(30,223)
End of the year
441,192
300,082
315,136
1,056,410
12-Month
expected
credit losses
Description
Not Impaired
Impaired
Total card
receivables
Beginning of the year
165,702
145,892
131,201
442,795
Transfer to 12-Month expected
credit losses 49,038
(48,900)
(138)
-
Transfer to lifetime expected
credit losses (11,360)
11,487
(127)
-
Transfer to credit-impaired
financial assets (36,499)
(13,123)
49,622
-
Impairment loss (reversal) 44,514
67,788
105,270
217,572
Collection (write-off) -
-
(50,972)
(50,972)
Disposals and others (24,955)
(20,754)
(9,558)
(55,267)
End of the year
186,440
142,390
225,298
554,128
Total
Allowances
12-Month
expected
credit losses
Lifetime expected
credit losses
Description
Not Impaired
Impaired
Total others
Beginning of the year
15,508
9,046
47,741
72,295
1,480,555
Transfer to 12-Month expected
credit losses 5,099
(2,647)
(2,452)
-
-
Transfer to
lifetime expected
credit losses (1,331)
2,228
(897)
-
-
Transfer to credit-impaired
financial assets (207)
(840)
1,047
-
-
Impairment loss (reversal) 1,190
(598)
5,708
6,300
883,643
Collection (write-off) -
-
(798)
(798)
(441,645)
Disposals and others (2,227)
(821)
(58)
(3,106)
(207,101)
Effect of foreign exchange
differences -
-
-
-
(30,223)
End of the year
18,032
6,368
50,291
74,691
1,685,229
ٻ
ٻ
ٻ
ٻ
ڐڒٻ
ٻ
(4) Gross investments in financial leases and their presen
t value of minimum lease rece
ipts as of
December
31, 2021
and December 31, 2020 are as follows.
Description
Gross
investments
in financial
leases
Present value
of minimum
lease payment
receivable
Gross
investments
in financial
leases
Present value
of minimum
lease payment
receivable
Not later than one year
888,358
788,739
979,318
875,646
Later than one year and not later
than five years 1,421,468 1,324,645 1,643,708 1,542,578
Later than five years 6,475 6,236 6,908 6,691
2,316,301
2,119,620
2,629,934
2,424,915
(5) Unearned interest income of financial leases as of
December 31, 2021 and December 31, 2020 are as follows.
Description December 31, 2021 December 31, 2020
Gross investments in financial lease
2,316,301
2,629,934
Net lease investments:
Present value of minimum lease payment receivable 2,119,620 2,424,915
Present value of unguaranteed residual value 3,852 4,505
2,123,472 2,429,420
Unearned interest income
192,829
200,514
15. INVESTMENTS IN OPERATING LEASES (AS A LESSOR):
(1)
Investments in operating leases as of Decembe
r 31, 2021 and December 31, 2020 are as follows.
Description December 31, 2021 December 31, 2020
Acquisition cost
29,980,884
23,322,479
Accumulated depreciation (3,477,632) (2,688,950)
Accumulated impairment loss (175,256) (131,838)
26,327,996
20,501,691
(2) Future minimum lease payment receivable related to investments in operating leases as of December 31, 2021 and
December 31, 2020 is as follows.
Description December 31, 2021 December 31, 2020
Not later than one year
5,323,499
4,091,315
Later than one year and not later
than five years 5,744,918 4,454,173
Later than five years 77 -
11,068,494
8,545,488
ٻ
ٻ
ٻ
ٻ
ڐړٻ
ٻ
16. BORROWINGS AND DEBENTURES:
(1) Short-term borrowings as of December 31, 2021 and December 31, 2020 are as follows.
Description
Lender
Annual
interest rate
December 31,
2021
December 31,
2020
(%)
(In millions of Korean Won)
Overdrafts
Citi Bank and others
0.11~1.63
456,044
650,851
General borrowings
Korea Development Bank
and others
0.12~10.13
3,994,073
3,735,030
Borrowings collateralized
by trade receivables
KEB Hana Bank and others
0.00001~9.45
3,059,551
2,914,830
Banker’s Usance
KEB Hana Bank and others
0.15~4.40
786,755
373,230
Commercial paper
Shinhan Bank and others
0.19~2.80
4,791,413 4,827,568
Asset-backed securities
RBC and others
1.46~1.62
-
1,279,161
13,087,836
13,780,670
(2) Long-term debt as of December 31, 2021 and December 31, 2020 are as follows.
Description
Lender
Annual
interest rate
December 31,
2021
December 31,
2020
(%)
(In millions of Korean Won)
General borrowings Mizuho Bank and others
0.01~12.17
9,738,949
8,911,475
Credit facilities NH Bank and others 1.52~2.61
540,600
551,100
Commercial paper
BNK Investment & Securities
and others
1.19~2.12
1,650,000 1,490,000
Asset-backed securities HSBC and others 0.55~1.85
4,136,643
5,652,711
Others(*)
NH Investment & Securities
and others
392,032
435,607
16,458,224 17,040,893
Less: present value discounts
(88,059)
(90,201)
Less: current maturities
(5,702,434) (4,223,968)
10,667,731
12,726,724
(*) The Group transferred a portion of its voting shares to a third party with the total revenue swap agreement. However, the G
roup still
recognizes it as the financial asset b
ecause the Group still owns the majority of the risks and rewards of ownership of the transferred
shares. Also, the Group recognized the amount received from disposal as borrowings.
(3) Debentures as of December 31, 2021 and December 31, 2020 are as follows.
Description
Latest
maturity date
Annual
interest rate
December 31,
2021
December 31,
2020
(In millions of Korean Won)
Non-guaranteed public debentures
June 30, 2031
0.96~3.38
ٻ
31,533,051
ٻ
30,083,284
Non-guaranteed private debentures April 8, 2030 0.80~6.38
27,604,469
16,774,640
Asset-backed securities
June 15, 2028 0.12~3.29
19,359,999
13,931,180
78,497,519
60,789,104
Less: discount on debentures
(162,242)
(113,706)
Less: current maturities
(14,876,468) (11,880,037)
ٻ
63,458,809
ٻ
48,795,361
ٻ
ٻ
ٻ
ٻ
ڐڔٻ
ٻ
17. PROVISIONS:
(1) Provisions as of December 31, 2021 and December 31, 2020 are as follows.
Description
December 31,
2021
December 31,
2020
Warranty
9,048,185
8,514,173
Other long-term employee benefits 676,432 729,996
Others 1,154,167 1,126,719
10,878,784
10,370,888
(2) The changes in provisions for the year
ended December 31, 2021 are as follows.
Description Warranty
Other long-term
employee benefits
Others
Beginning of the year
8,514,173
ٻ
729,996
ٻ
1,126,719
Charged 2,900,638 42,595 680,707
Utilized (2,551,716)
(96,713) (631,469)
Effect of foreign exchange differences
and others
End of the year
9,048,185
ٻ
676,432
ٻ
1,154,167
The changes in provisions for the year en
ded December 31, 2020 are as follows.
Description Warranty (*)
Other long-term
employee benefits
Others
Beginning of the year
5,447,307
ٻ
726,356
ٻ
971,266
Charged 5,170,165 82,965 739,545
Utilized (1,963,782)
(77,324) (573,081)
Effect of foreign exchange differences
and others
End of the year
8,514,173
ٻ
729,996
ٻ
1,126,719
(*) During the year ended December 31, 2020, the Group has reflected effect of new information and longer period of historical
claim data in the measurement of warranty provisions in relation to the recall of theta 2 and other engines.
18. OTHER FINANCIAL LIABILITIES:
(1)
Other financial liabilities as of D
ecember 31, 2021 are as follows.
December 31, 2021
Description
Current Non-current
Financial liabilities measured at FVPL
674
ٻ
53,427
Derivative liabilities that are effective hedging instruments
54,365 32,705
Financial Liabilities measured at amortized cost
148 1,126
55,187
ٻ
87,258
ٻ
ٻ
ٻ
ٻ
ڑڋٻ
ٻ
(2)
Other financial liabilities as of December 31, 2020 are as follows.
December 31, 2020
Description
Current Non-current
Financial liabilities measured at FVPL
5,285
ٻ
25,759
Derivative liabilities that are effective hedging instruments
95,043 433,748
100,328
ٻ
459,507
19. OTHER LIABILITIES:
Other liabilities as of Decem
ber 31, 2021 and December 31, 2020 are as follows.
Description
Current Non-current Current Non-current
Advances received
1,235,937
ٻ
42,482
ٻ
1,080,726
ٻ
22,580
Withholdings 968,318 197,714 1,094,177 194,927
Accrued expenses 2,851,174 - 2,957,418 -
Unearned income 864,536 2,356,667 742,484 1,705,607
Due to customers for contract work 902,124 - 855,866 -
Others 618,031 747,755 561,914 689,638
7,440,120
ٻ
3,344,618
ٻ
7,292,585
ٻ
2,612,752
20. FINANCIAL INSTRUMENTS:
(1) Financial assets by categories as of December 31, 2021 are as follows.
Description
Financial
assets
measured at
FVPL
Financial assets
measured at
amortized cost
Financial
assets
measured at
FVOCI
Derivative
assets that are
effective
hedging
instruments
Cash and
cash equivalents
-
12,795,554
-
-
12,795,554
12,795,554
Short-term and long-
term financial
instruments
Trade notes and
accounts receivable
Other receivables - 2,076,803 - - 2,076,803 2,076,803
Other financial assets 12,472,100 27,195 2,911,523 525,114 15,935,932 15,935,932
Other assets 23,568 331,353 - - 354,921 354,921
Financial services
receivables
- 81,029,132 - - 81,029,132 81,059,639
12,495,668
106,800,233
2,911,523
525,114
122,732,538
122,763,045
ٻ
ٻ
ٻ
ٻ
ڑڌٻ
ٻ
Description
Financial
assets
measured at
FVPL
Financial assets
measured at
amortized cost
Financial
assets
measured at
FVOCI
Derivative
assets that are
effective
hedging
instruments
Cash and
cash equivalents
-
9,862,136
-
-
9,862,136
9,862,136
Short-term and long-
term financial
instruments
Trade notes and
accounts receivable
Other receivables - 3,025,835 - - 3,025,835 3,025,835
Other financial assets 13,093,457 37,965 2,322,944 221,969 15,676,335 15,676,335
Other assets 24,203 303,986 - - 328,189 328,189
Financial services
receivables
- 69,665,210 - - 69,665,210 70,435,392
13,117,660
93,584,927
2,322,944
221,969
109,247,500
110,017,682
(2) Financial liabilities by categories as of December 31, 2021 are as follows.
Description
Financial liabilities
measured at FVPL
Financial liabilities
measured at
amortized cost
Derivative liabilities
that are effective
hedging instruments
Trade notes and
accounts payable
-
9,155,255
-
9,155,255
9,155,255
Other payables - 5,422,320 - 5,422,320 5,422,320
Borrowings and
debentures
107,793,278
Other financial liabilities 54,101
1,274 87,070 142,445 142,445
Lease liabilities
-
950,572
-
950,572
950,572
Other liabilities
-
2,415,891
-
2,415,891
2,415,891
54,101
125,738,590
87,070
125,879,761
126,198,894
Description
Financial liabilities
measured at
FVPL
Financial liabilities
measured at
amortized cost
Derivative liabilities
that are effective
hedging instruments
Trade notes and
accounts payable
-
8,793,179
-
8,793,179
8,793,179
Other payables - 5,280,286 - 5,280,286 5,280,286
Borrowings and
debentures
Other financial liabilities 31,044
- 528,791 559,835 559,835
Lease liabilities
-
757,044
-
757,044
757,044
Other liabilities
-
2,519,044
-
2,519,044
2,519,044
31,044
108,756,313
528,791
109,316,148
110,857,027
ٻ
ٻ
ٻ
ٻ
ڑڍٻ
ٻ
(3) Fair value estimation
The Group categorizes the assets and liabilities measured at fair
value into the following thre
e-level fair value hierarchy
in accordance with the inputs used
for fair value measurement.
x
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.
x
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly (i.e. as prices) or indir
ectly (i.e. derived from prices).
x
Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs)
Fair value measurements of financial inst
ruments by fair value hierarchy levels as of December 31, 2021 are as follows.
Description Level 1 Level 2 Level 3 Total
Financial assets:
Financial assets measured
at FVPL
107,290
12,226,048
162,330
12,495,668
Derivative assets that are
effective hedging instruments
-
525,114 - 525,114
Financial assets measured
at FVOCI 1,561,959 435,797 913,767 2,911,523
1,669,249
13,186,959
1,076,097
15,932,305
Financial liabilities:
Financial liabilities measured
at FVPL
-
962
53,139
54,101
Derivative liabilities that are
effective hedging instruments
-
88,032
53,139
141,171
Fair value measurements of financial instruments by fair
value hierarchy levels as of December 31, 2020 are as
follows.
Description Level 1 Level 2 Level 3 Total
Financial assets:
Financial assets measured
at FVPL
96,561
12,506,079
515,020
13,117,660
Derivative assets that are
effective hedging instruments
-
221,969 - 221,969
Financial assets measured
at FVOCI 1,264,786 318,489 739,669 2,322,944
1,361,347
13,046,537
1,254,689
15,662,573
Financial liabilities:
Financial liabilities measured
at FVPL
-
31,044
-
31,044
Derivative liabilities that are
effective hedging instruments
-
528,791
-
528,791
-
559,835
-
559,835
ٻ
ٻ
ٻ
ٻ
ڑڎٻ
ٻ
The changes in financial instruments classified as Level 3 for the year ended December 31, 2021 are as follows.
Descri
p
tion
Beginning
of the period
Purchases Disposals Valuation Others
End of
the period
(In millions of Korean Won)
Financial assets measured
at FVPL
515,020
38,076
(
411,334
)
20,568
-
162,330
Financial assets measured
at FVOCI 739,669 66,580
(
2,579
)
Financial liabilities measured
at FVPL - 52,323
-
The changes in financial instruments classified as Leve
l 3 for the year ended December 31, 2020 are as follows.
Description
Beginning
of the period
Purchases Disposals Valuation Others
End of
the period
(In millions of Korean Won)
Financial assets measured
at FVPL
572,618
38,704
(
24,842
)
(
77,767
)
6,307
515,020
Financial assets measured
at FVOCI 748,091 35,745
-
(4) Financial assets and liabilities subject to offsetting, and financial instruments subject to an enforceable master netting
arrangement or similar agreement as of December 31, 2021 are as follows.
Descri
p
tion
Gross amounts
of recognized
financial assets
and liabilities
Gross amounts
of recognized
financial assets
and liabilities
set off in the
consolidated
statement of
financial
p
osition
Net amounts of
financial assets
and liabilities
presented in the
consolidated
statement of
financial
p
osition
Related
amounts not set
off in the
consolidated
statement of
financial
position -
financial
instruments
Related
amounts not
set off in the
statement of
financial
position -
collateral
received
(p
led
g
ed
)
Net amounts
Financial assets:
Trade notes and accounts
receivable
3,519,284
234,831
3,284,453
-
-
3,284,453
Other receivables 2,573,976 497,173 2,076,803 - - 2,076,803
Financial assets measured at
FVPL
Derivative assets that are
effective hed
g
in
g
instruments
(
*
)
6,632,908
732,004
5,900,904
18,225
-
5,882,679
Financial liabilities:
Trade notes and accounts
p
a
y
able
9,640,133
484,878
9,155,255
-
-
9,155,255
Other payables 5,669,446 247,126 5,422,320 - - 5,422,320
Financial liabilities measured at
FVPL
Derivative liabilities that are
effective hedging instruments (*)
15,450,750
732,004
14,718,746
18,225
-
14,700,521
(*) These are derivative assets and liabilities that the Group may ha
ve the right to offset in the event of default, insolvency
or bankruptcy
of the counterparty although these do not meet the criteria of offsetting under K-IFRS 1032.
ٻ
ٻ
ٻ
ٻ
ڑڏٻ
ٻ
Financial assets and liabilities, subject to offsetting, and financial instruments subject to an enforceable master
netting arrangement or similar agreement as of December 31, 2020 are as follows.
Description
Gross amounts
of recognized
financial assets
and liabilities
Gross amounts
of recognized
financial assets
and liabilities
set off in the
consolidated
statement of
financial
position
Net amounts of
financial assets
and liabilities
presented in the
consolidated
statement of
financial
position
Related
amounts not set
off in the
consolidated
statement of
financial
position -
financial
instruments
Related
amounts not
set off in the
statement of
financial
position -
collateral
received
(pledged)
Net amounts
Financial assets:
Trade notes and accounts
receivable
3,592,148
183,907
3,408,241
-
-
3,408,241
Other receivables 3,388,160 362,325 3,025,835 - - 3,025,835
Financial assets measured at
FVPL
160,692 - 160,692 - - 160,692
Derivative assets that are
effective hed
g
in
g
instruments
(
*
)
221,969 - 221,969 68,885 - 153,084
7,362,969
546,232
6,816,737
68,885
-
6,747,852
Financial liabilities:
Trade notes and accounts
p
a
y
able
9,167,936
374,757
8,793,179
-
-
8,793,179
Other payables 5,451,761 171,475 5,280,286 - - 5,280,286
Financial liabilities measured at
FVPL
31,044 - 31,044 - - 31,044
Derivative liabilities that are
effective hedging instruments (*)
528,791 - 528,791 68,885 - 459,906
15,179,532
546,232
14,633,300
68,885
-
14,564,415
(*) These are derivative assets and liabilities that the Group may ha
ve the right to offset in the event of default, insolvenc
y or bankruptcy
of the counterparty although these do not meet the criteria of offsetting under K-IFRS 1032.
(5) Interest income, dividend income and interest expens
es by categories of financial instruments for the year ended
December 31, 2021 are as follows.
2021
Description
Interest
income
Dividend
income
Interest
expenses
Non-financial services:
Financial assets measured
at amortized cost
248,198
-
-
Financial assets
measured at FVPL
100,415 - -
Financial assets measured
at FVOCI
- 28,419 -
Financial liabilities measured
at amortized cost
- - 267,648
348,613
28,419
267,648
Financial services:
Financial assets measured
at amortized cost
4,138,039
-
-
Financial assets measured
at FVPL
4,040 1,721 -
Financial assets measured
at FVOCI
203 - -
Financial liabilities measured
at amortized cost
- - 1,730,903
4,142,282
1,721
1,730,903
ٻ
ٻ
ٻ
ٻ
ڑڐٻ
ٻ
Interest income, dividend income and interest expenses
by categories of financial instruments for the year ended
December 31, 2020 are as follows.
2020
Description
Interest
income
Dividend
income
Interest
expenses
Non-financial services:
Financial assets measured
at amortized cost
289,171
-
-
Financial assets
measured at FVPL
112,176 - -
Financial assets measured
at FVOCI
- 31,650 -
Financial liabilities measured
at amortized cost
- - 295,069
401,347
31,650
295,069
Financial services:
Financial assets measured
at amortized cost
3,930,986
-
-
Financial assets measured
at FVPL
5,621 2,227 -
Financial assets measured
at FVOCI
882 - -
Financial liabilities measured
at amortized cost
- - 1,847,378
3,937,489
2,227
1,847,378
(6) The commission income (financial services revenue) arisin
g from financial assets or liabilities other than financial
assets or liabilities measured at FVPL for the years ended December 31, 2021 and 2020 are
923,656 million and
784,509 million, respectively. In addition, the fee expens
es (cost of sales from financial services) related to
financial assets or liabilities other than financial assets or
liabilities measured at FVPL for the years ended December
31, 2021 and 2020 are
374,229 million and
319,684 million, respectively.
(7) The Group recognizes transfers between levels of the fair value hierarchy at the date of the event or change in
circumstances that caused the transfer.
There are no significant transfers be
tween Level 1 and Level 2 for the year
ended December 31, 2021.
(8) Descriptions of the valuation techniques and the inputs used in the fair value measurements categorized within
Level 2 and Level 3 of the fair value hierarchy are as follows.
-
Currency
forwards, options and swap
Fair value of currency forwards, options and swap is measured based on forward exchange rate quoted in the current
market at the end of the reporting period, which has the same remaining period of derivatives to be measured. If
the forward exchange rate, which has the same remaining period of currency forwards, options and swap, is not
quoted in the current market, fair value is measured using estimates of similar period of forward exchange rate by
applying interpolation method with quoted forward exchange rates.
As the inputs used to measure fair value of currency forwards, options and swap are supported by observable market
data, such as forward exchange rates, the Group classifies
the estimates of fair value measurements of the currency
forwards, options and swap as Level 2 of the fair value hierarchy.
The discount rate and forward interest rate used to measure the fair value of interest rate swap are determined based
on an applicable yield curve derived from interest quoted in the current market at the end of the reporting period.
The fair value of interest rate swap was measured as a discount on the estimated future cash flows of interest rate
swap based on forward interest rates derived from the above method at an appropriate discount rate.
ٻ
ٻ
ٻ
ٻ
ڑڑٻ
ٻ
As the inputs used to measure fair value of interest rate swap are supported by observable market data, such as
yield curves, the Group classifies the estimates of fair value
measurements of the interest rate swap as Level 2 of the
fair value hierarchy.
Fair value of debt instruments including corporate bonds is measured applying discounted cash flow method.
The rate used to discount cash flows is determined ba
sed on swap rate and credit spreads of debt instruments,
which have the similar credit rating and period quoted in the current market with those of debt instruments
including corporate bonds that should be measured. The Group classifies fair value measurements of debt
instruments including corporate bonds as Level 2 of the fair-value hierarchy since the rate, which has significant
effects on fair value of debt instruments including corporate bonds, is based on observable market data.
Fair value of unlisted equity securitie
s is measured using discounted cash fl
ow projection and market approach, and
as for discounted cash flow projections, certain assumptions not based on observable market prices or rate, such as
sales growth rate, pre-tax operating income ratio and di
scount rate based on business plan and circumstance of
industry are used to estimate the future cash flow. The discount rate used to discount the future cash flows, is
calculated by applying the Capital Asset Pricing Model, using the data of similar listed companies. The Group
determines that the effect of estimation and assumptions referred above affecting fair value of unlisted equity
securities is significant and classifies fair value measurem
ents of unlisted securities as Level 3 of the fair value
hierarchy.
- Put options (Derivatives)
The fair value of put options (derivatives) is measured based on the stock price volatility up to the fair value, exercise
price, and maturity of the underlying asset, using the binomial option pricing model. The discount rate used in the
binomial option pricing model is applied by converting the rate of return on corporate bonds with equivalent credit
rating corresponding to the remaining maturity into a continuous compounding discount rate, and the stock price
volatility up to maturity
uses historical volatility of
proxy companies in similar in
dustries in response to the
remaining maturity. The fair value of the underlying asset is assumed to be maintained until the end of the current
period after estimating the underlying asset value on the contracted date by inverting the underlying asset value
inherent in the terms of the transaction on the premise that
the acquisition transaction of related shares in the current
period is an orderly transaction and traded at fair value. The group classifies the fair value measurement of put
options (derivatives) as Level 3 in the fair value hierar
chy based on the assumption that the effect of the above
assumptions and estimates on the fair value of put options classified.
(9) The quantitative information about significant unobservable inputs used in the fair value measurements
categorized within Level 3 of the fair value hierarchy and the description of relationships of significant
unobservable inputs to the fair value are as follows:
Description
Fair value at
December 31, 2021
Valuation
techniques
Unobservable
inputs
Range
Description of
relationship
Financial
assets
Financial
liabilities
Unlisted equity
securities,
put options
and others
1,076,097
53,139 Discounted
cash flow
and others
growth rate
and the pre-
tax
operating
profit margin
ratio increases
or the discount
rate declines,
the fair value
increases.
Pre-tax operating
profit margin
ratio
3.4% ~ 5.0%
Stock price
volatility
The Group does not expect changes in significant unobservable inputs that are used for reflecting alternative assumptions
would have significant impact on the fair value.
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21. CAPITAL STOCK:
The Company’s number of shares authorized is 600,000,000 shares. Common stock and preferred stock as of
December 31, 2021 and December 31, 2020 are as follows.
(1) Common stock
Description December 31, 2021 December 31, 2020
Issued 213,668,187 shares 213,668,187 shares
Par value
5,000
5,000
Capital stock 1,157,982 1,157,982
The Company completed stock retirement of 10,000,000 common shares, 1,320,000 common shares and 6,608,292
common shares as of March 5, 2001, May 4, 2004 and July 27,
2018 respectively. Due to these stock retirements, the
total face value of outstanding stock
differs from the capital stock amount.
(2) Preferred stock
Description Par value Issued Korean Won Dividend rate
Korean Won)
1
st
preferred stock
5,000 24,356,685 shares
125,550 Dividend rate of common stock + 1%
2
nd
preferred stock 36,485,451 shares 193,069 The lowest stimulated dividend rate: 2%
Ý
3
rd
preferred stock 2,428,735 shares 12,392 The lowest stimulated dividend rate: 1%
Ý
331,011
As of March 5, 2001, the Company retired 1,000,000 second
preferred shares and as of July 27, 2018, the Company
retired 753,297 first preferred shares, 1,128,414 second preferred shares and 49,564 third preferred shares. Due to the
stock retirement, the total face value of outstanding stock differs from the capital stock amount.
ٻ
ٻ
22. CAPITAL SURPLUS:
Capital surplus as of December 31, 2021 and December 31, 2020 are as follows.
Description December 31, 2021 December 31, 2020
Paid-in capital in excess of par value
3,321,334
3,321,334
Others 748,926 868,759
4,070,260
4,190,093
23. OTHER CAPITAL ITEMS:
Other capital items consist of treasury stocks purchased for the stabilization of stock price. Number of treasury stocks
as of December 31, 2021 and December 31, 2020 are as follows.
Description
December 31,
2021
December 31,
2020
(Number of shares)
Common stock 14,048,242 13,091,418
1
st
preferred stock 2,333,133 2,186,993
2
nd
preferred stock 1,572,482 1,353,570
3
rd
preferred stock 63,146 48,574
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24. ACCUMULATED OTHER COMPREHENSIVE LOSS:
(1) Accumulated other comprehensive loss as of December 31, 2021 is as follows.
Description December 31, 2021
Gain on valuation of financial assets measured at FVOCI
451,693
Loss on valuation of financial assets measured at FVOCI (370,812)
Gain on valuation of cash flow hedge derivatives 56,048
Loss on valuation of cash flow hedge derivatives (42,068)
Gain on share of the other comprehensive income of
equity-accounted investees
228,299
Loss on share of the other comprehensive income of
equity-accounted investees
(587,620)
Loss on foreign operations translation, net (1,508,141)
(1,772,601)
(2) Accumulated other comprehensive loss as of December 31, 2020 is as follows.
Description December 31, 2020
Gain on valuation of financial assets measured at FVOCI
453,715
Loss on valuation of financial assets measured at FVOCI (351,813)
Gain on valuation of cash flow hedge derivatives 102,057
Loss on valuation of cash flow hedge derivatives (40,175)
Gain on share of the other comprehensive income of
equity-accounted investees 22,501
Loss on share of the other comprehensive income of
equity-accounted investees (925,992)
Loss on foreign operations translation, net (2,669,954)
(3,409,661)
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25. RETAINED EARNINGS:
(1) Retained earnings as of December 31, 2021 and December 31, 2020 are as follows.
Description December 31, 2021
December 31,2020
Legal reserve (*)
744,836
744,836
Discretionary reserve
47,701,296
47,935,596
Unappropriated
24,721,723
20,231,368
73,167,855
68,911,800
(*) The Commercial Code of the Republic of Korea requires the Company to appropriate as a legal reserve, a minimum of 10% of
annual cash dividends declared, until such reserve equals 50% of its capital stock issued. The reserve is not available for th
e
payment of cash dividends, but may be transferred to capital stock or used to reduce accumulated deficit, if any.
Appraisal gains, amounting to
1,852,871 million, derived from asset revaluation pursuant to the Asset Revaluation Law
of Korea are included in retained earnings. It may be only transferred to capital stock or used to reduce accumulated
deficit, if any.
(2) The computation of the interim dividends for the year ended December 31, 2021 is as follows, and there are no
interim dividends for the year ended December 31, 2020.
Description
Common
stock
1
st
Preferred
stock
2
nd
Preferred
stock
3
rd
Preferred
stock
Par value per share
5,000
5,000
5,000
5,000
Shares, net of treasury stocks 200,576,769 22,169,692 35,131,881 2,380,161
Dividends per share
1,000
1,000
1,000
1,000
Dividend rate 20% 20% 20% 20%
Dividends declared 200,577 22,170 35,132 2,380
(3) The computation of the propos
ed dividends for the year ended December 31, 2021 is as follows.
Description
Common
stock
1
st
Preferred
stock
2
nd
Preferred
stock
3
rd
Preferred
stock
Par value per share
5,000
5,000
5,000
5,000
Shares, net of treasury stocks 199,619,945 22,023,552 34,912,969 2,365,589
Dividends per share
4,000
4,050
4,100
4,050
Dividend rate 80% 81% 82% 81%
Dividends declared 798,480 89,195 143,143 9,581
Description
Common
stock
1
st
Preferred
stock
2
nd
Preferred
stock
3
rd
Preferred
stock
Par value per share
5,000
5,000
5,000
5,000
Shares, net of treasury stocks 200,576,769 22,169,692 35,131,881 2,380,161
Dividends per share
3,000
3,050
3,100
3,050
Dividend rate 60% 61% 62% 61%
Dividends declared 601,730 67,618 108,909 7,259
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ڒڋٻ
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26. HYBRID BOND:
(1) Hyundai Card Co., Ltd., a subsidiary of the Company, issued hybrid bond and the Group classified it as equity
(non-controlling interests). As of December 31, 2021, hybrid bond is as follows.
Description
Issue date
Maturity date
Annual
interest rate
December 31, 2021
(%)
(In millions of Korean Won)
The 731st
Hybrid Tier 1 (Private) July 5, 2018 July 5, 2048
4.70
300,000
Issue cost
(760)
299,240
Hyundai Rotem Company, a subsidiary of the Company, paid off all hybrid bonds during the year ended December 31, 2021.
(2) As of December 31, 2021, the conditions of hybrid
bond that Hyundai Card Co., Ltd., a subsidiary of the
Company issued are as follows.
Maturity
Thirty years (Maturity extension is possible according to the issuer's decision
upon maturity)
Interest rate
Issue date ~ July 5, 2023 : An annual fixed interest rate 4.7%
Increase of 2% after five years which is limited to one time only in accordance with
Step-up clause
Interest payment
condition
Three months, optional postponement of payment
Others
Repayment before maturity by issuer is available after five years from issue date
27. SALES:
(1) Sales for the years ended December
31, 2021 and 2020 are as follows.
Description
2021 2020
Sales of goods
99,722,885
87,288,494
Rendering of services 2,624,047 2,329,450
Royalties 276,564 188,293
Financial services revenue 11,536,970 10,920,622
Revenue related to construction contracts
2,814,036 2,691,090
Others 636,124 579,652
117,610,626
103,997,601
(2) As of December 31, 2021, the aggregate transaction pric
e allocated to the unsatisfied
(or partially unsatisfied)
performance obligation that is expected to be recognized as revenue in future periods is as follows.
Description
Within a year After a year
Deferred revenue and others
1,498,039
2,282,685
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ڒڌٻ
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28. SELLING AND ADMINISTRATIVE EXPENSES:
Selling and administrative expenses for the years ended December 31, 2021 and 2020 are as follows.
Description
2021 2020
Selling expenses:
Export expenses
46,057
59,617
Overseas market expenses 412,476 352,869
Advertisements and sales promotion 2,609,784 2,241,458
Sales commissions 983,949 971,086
Expenses for warranties 2,947,290 4,813,729
Transportation expenses 116,035 109,251
7,115,591 8,548,010
Administrative expenses:
G G
Payroll 2,882,164 2,688,556
Post-employment benefits 177,845 183,312
Welfare expenses 496,461 464,627
Service charges 1,529,151 1,415,025
Research 1,534,993 1,337,872
Others 1,515,341 1,449,597
8,135,955 7,538,989
15,251,546
16,086,999
29. GAIN(LOSS) ON INVESTMENTS IN
JOINT VENTURES AND ASSOCIATES:
Gain(loss) on investments in joint ventures and associates for the years ended December 31, 2021 and 2020 is as
follows.
Description
2021 2020
(In millions of Korean Won)
Gain on share of earnings of equity-accounted investees, net
1,278,591
103,676
Gain on disposals of investments in associates
38,106 58,486
Impairment loss on investments in associates
(13,332)
-
1,303,365
162,162
30. FINANCE INCOME AND EXPENSES:
(1) Finance income for the years ended
December 31, 2021 and 2020 are as follows.
Description
2021 2020
Interest income
348,613
401,347
Gain on foreign exchange transactions 62,003 55,468
Gain on foreign currency translation 162,811 239,554
Dividend income 28,419 31,650
Gain on derivatives 89,522 80,654
Others 221,434 5,243
912,802
813,916
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ٻ
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ڒڍٻ
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(2) Finance expenses for the years ended December 31, 2021 and 2020 are as follows.
Description
2021 2020
Interest expenses
304,542
362,377
Loss on foreign exchange transactions 54,622 180,732
Loss on foreign currency translation 182,233 304,377
Loss on derivatives and others 7,013 108,505
548,410
955,991
31. OTHER INCOME AND EXPENSES:
(1) Other income for the years ended December 31, 2021 and 2020 are as follows.
Description
2021
2020
(In millions of Korean Won)
Gain on foreign exchange transactions
624,884
446,641
Gain on foreign currency translation
220,468
192,825
Gain on disposals of PP&E 23,978
37,485
Commission income
22,716
43,601
Rental income
94,528
93,566
Others
460,687
494,524
1,447,261
1,308,642
(2) Other expenses for the years ended December 31, 2021 and 2020 are as follows.
Description
2021
2020
(In millions of Korean Won)
Loss on foreign exchange transactions
527,878
590,009
Loss on foreign currency translation
231,859
264,399
Loss on disposals of PP&E 57,899
106,761
Donations
66,249
73,553
Others
950,520
595,422
1,834,405
1,630,144
32. EXPENSES BY NATURE:
Expenses by nature for the years ended December 31, 2021 and 2020 are as follows.
Description
2021 2020
Changes in inventories
434,257
(22,609)
Raw materials and merchandise used 67,579,441 59,084,867
Employee benefits 9,613,599 9,098,752
Depreciation 2,937,914 2,749,513
Amortization 1,617,823 1,435,860
Others 30,583,048 30,886,691
Total (*)
112,766,082
103,233,074
(*) Sum of cost of sales, selling and administrative expenses and other expenses in the consolidated statements of income.
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ڒڎٻ
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33. EARNINGS PER COMMON STOCK AND PREFERRED STOCK:
Basic earnings per common stock and preferred stock are computed by dividing profit available to common stock and
preferred stock by the weighted-average number of common
stock and preferred stock outstanding during the year. The
Group does not compute diluted earnings per common stock fo
r the years ended December 31, 2021 and 2020, since there
are no dilutive items during the years.
Basic earnings per common stock and preferred stock for the years ended December 31, 2021 and 2020 are computed as
follows.
Description
Profit
attributable to
share
Weighted-
average number
of shares
outstanding (*1)
Basic
earnings
per share
Profit
att
ributable to
share
Weighted-
average number
of shares
outstanding (*1)
Basic
earnings
per share
Common stock
3,806,754
200,578,742
18,979
1,094,134
200,628,493
5,454
1
st
Preferred stock (*2) 421,090
22,160,384 19,002 122,043 22,181,699 5,502
2
nd
Preferred stock 669,282
35,117,788 19,058 195,156 35,149,829 5,552
3
rd
Preferred stock 45,230
2,379,240 19,010 13,103 2,381,349 5,502
(*1) Weighted-average number of shares outstanding includes the effects of treasury stock transactions.
(*2) 1
st
preferred stock meets the definition of ‘ordinary shar
es’ as defined in K-IFRS 1033 ‘Earnings per Share’.
34. INCOME TAX EXPENSE:
(1) The components of income tax expense for the years ended December 31, 2021 and 2020 are as follows.
Description
2021 2020
Current tax expense
1,816,699
1,201,923
Adjustments recognized in the current year in relation to
the prior years
Changes in deferred taxes relating to
Temporary differences 1,718,022 (782,752)
Tax losses and tax credits (683,646) 49,890
Items that are charged or credited direc
tly to equity (104,461) (56,735)
Effect of foreign exchange differences and others (205,604) 43,133
Income tax expense
2,266,485
168,703
(2) The reconciliation from profit before income tax to income tax expense for the years ended December 31, 2021
and 2020 are as follows.
Description
2021 2020
Profit before income tax
7,959,562
2,093,256
Income tax expense calcula
ted at the applicable
tax rates of 21.4% in 2021 and 26.6% in 2020
Adjustments:
Non-taxable income (100,314) (84,808)
Non-deductible expenses 261,172 55,101
Tax credits (429,012) (198,374)
Others 834,933 (159,463)
566,779 (387,544)
Income tax expense
2,266,485
168,703
Effective tax rate
28.5%
8.1%
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ڒڏٻ
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(3) The changes in deferred tax assets (liabilities)
for the year ended December 31, 2021 are as follows.
Description
Beginning
of the year
Changes
End
of the year
Provisions
2,713,730
110,479
2,824,209
Financial assets measured at FVPL 1,795 (564) 1,231
Financial assets measured at FVOCI (137,271) 16,087 (121,184)
Investment of subsidiaries, associates and joint
ventures
ٻ
ٻ
Derivatives
ٻ
ٻ
PP&E
ٻ
ٻ
Accrued income
ٻ
ٻ
Gain (loss) on foreign currency translation, net 431 (567) (136)
Others 903,246 (946,191) (42,945)
Carryforward of tax losses and tax credits
ٻ
ٻ
2,647,916
683,646
3,331,562
(430,119)
(1,034,376)
(1,464,495)
for the year ended December 31, 2020 are as follows.
Description
Beginning
of the year
Changes
End
of the year
Provisions
2,004,413
709,317
2,713,730
Financial assets measured at FVPL 1,907 (112) 1,795
Financial assets measured at FVOCI (124,498) (12,773) (137,271)
Investment of subsidiaries, associates and joint
ventures
Derivatives
ٻ
ٻ
PP&E
ٻ
ٻ
(5,165,608) 106,882 (5,058,726)
Accrued income
ٻ
Gain (loss) on foreign currency translation, net
ٻ
ٻ
(19)
450
431
Others
ٻ
ٻ
887,008
16,238
903,246
Carryforward of tax losses and tax credits
ٻ
ٻ
2,697,806
(49,890)
2,647,916
(1,162,981)
732,862
(430,119)
(4) Income taxes relating to items that
are charged or credited directly to equity for the years ended December 31,
2021 and 2020 are as follows.
Description
2021 2020
Loss (gain) on disposal of treasury stocks
(9,451)
828
Gain on financial assets measured at FVOCI, net (32,147) (9,472)
Loss (gain) on valuation of cash flow hedge derivatives, net 5,848 (36,505)
Remeasurements of defined benefit plans (64,906) (16,403)
Changes in retained earnings of equity-acco
unted investees, net (3,805) 4,817
(104,461)
(56,735)
(5) The amount of temporary differences associated with investments in subsidiaries, joint ventures and associates, for
which deferred tax liabilities are not recognized, are
5,644,375 million and
4,046,187 m
illion as of December
31, 2021 and 2020, respectively.
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ڒڐٻ
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35. RETIREMENT BENEFIT PLAN:
(1) Expenses recognized in relation to defined contribution plans for the years ended December 31, 2021 and 2020 are as
follows.
Description
2021
2020
Paid-in cash
11,650
10,651
Recognized liability 3,320
2,932
14,970
13,583
(2) The significant actuarial assumptions
used by the Group as of December 31, 2021 and December 31, 2020 are as
follows.
Description
December 31, 2021
December 31, 2020
Discount rate (*) 3.84%
3.44%
Rate of expected future salary increase 4.51%
4.37%
(*) The Group applied the market yields of high-quality corporate bonds (AA+) and others as the discount rate at
December 31, 2021, to discount the defi
ned benefit obligation to the present va
lue, and the same discount rate was
applied as the expected return rate when
calculating interest income on plan assets.
Employee turnover and mortality assumptions used for actuarial valuation are based on the economic conditions and
statistical data of each country where entities within the Group are located.
(3) The amounts recognized in the consolidated statements of financial position related to defined benefit plans as of
December 31, 2021 and December 31, 2020 are as follows.
Description
December 31, 2021
December 31, 2020
Present value of defined benefit obligations
6,580,593
6,490,583
Fair value of plan assets (6,721,149)
(6,253,299)
(140,556)
237,284
Net defined benefit liabilities 79,165
247,566
Net defined benefit assets (219,721)
(10,282)
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ڒڑٻ
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(4) Changes in net defined benefit assets and liabilities
for the year ended December 31, 2021 are as follows.
Description
Present value of defined
benefit obligations
Fair value of
plan assets
Net defined benefit
liabilities
Beginning of the year
6,490,583
(6,253,299)
237,284
Current service cost 598,231
-
598,231
Interest expenses (income) 140,222
(139,588)
634
Past service cost 221
-
221
(6,392,887)
836,370
Remeasurements:
Return on plan assets -
(1,247)
(1,247)
Actuarial gains and losses arising
from changes in demographic
assumptions 2,573
-
2,573
Actuarial gains and losses arising
from changes in financial
assumptions (259,343)
-
(259,343)
Actuarial gains and losses arising
from experience adjustments and
others 17,719
-
17,719
(1,247)
(240,298)
Contributions -
(689,687)
(689,687)
Benefits paid (447,857)
367,927
(79,930)
Transfers in (out) 2,721
(1,605)
1,116
Effect of foreign exchange
differences and others
(3,650)
31,873
End of the year
6,580,593
(6,721,149)
(140,556)
for the year ended December 31, 2020 are as follows.
Description
Present value of defined
benefit obligations
Fair value of
plan assets
Net defined benefit
liabilities
Beginning of the year
6,321,408
(5,913,514)
407,894
Current service cost 613,775
-
613,775
Interest expenses (income) 135,718
(131,067)
4,651
Past service cost 23
-
23
(6,044,581)
1,026,343
Remeasurements:
Return on plan assets -
(45,079)
(45,079)
Actuarial gains and losses arising
from changes in demographic
assumptions 2,337
-
2,337
Actuarial gains and losses arising
from changes in financial
assumptions (4,282)
-
(4,282)
Actuarial gains and losses arising
from experience adjustments and
others (8,943)
-
(8,943)
(45,079) (55,967)
Contributions -
(606,302)
(606,302)
Benefits paid (531,416)
400,577
(130,839)
Transfers in (out) 2,620
(1,306)
1,314
Effect of foreign exchange
differences and others
43,392
2,735
End of the year
6,490,583
(6,253,299)
237,284
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ٻ
ڒڒٻ
ٻ
(5) The sensitivity analysis based on reasonably possible ch
anges of the significant assumptions as of December 31,
2021 and December 31, 2020, while all the other
assumptions are retained, are as follows.
December 31, 2021 December 31, 2020
Description Increase by 1%
Decrease by 1%
Increase by 1%
Decrease by 1%
Discount rate
(486,472)
542,497
(489,893)
578,549
Rate of expected future salary increase
492,651
(457,048)
529,477
(461,638)
(6) The fair value of the plan assets as of D
ecember 31, 2021 and December 31, 2020 is as follows.
Description
December 31, 2021
December 31, 2020
Insurance instruments
6,717,877
6,249,450
Others 3,272
3,849
6,721,149
6,253,299
(7) The Group expects to pay contribution of approximately
562,448 m
illion to the plan in 2022 and the weighted
average duration of the defined benefit obligation as of December 31, 2021 is 8.0 years.
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ٻ
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ڒړٻ
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36. CASH GENERATED FROM OPERATIONS:
(1)
Cash generated from operations for the years ended December 31, 2021 and 2020 are as follows.
Description
2021
2020
Profit for the year
5,693,077
1,924,553
Adjustments:
Retirement benefit costs 602,406
621,381
Depreciation 2,937,914
2,749,513
Amortization of intangible assets 1,617,823
1,435,860
Provision for warranties 2,678,950
4,619,516
Income tax expense 2,266,485
168,703
Loss on foreign currency translation, net 30,813
136,397
Loss on disposals of PP&E, net 33,921
69,276
Interest income, net (44,071)
(38,970)
Gain on share of earnings of equity-accounted investees, net (1,278,591)
(103,676)
Cost of sales from financial services, net 6,229,723
6,604,787
Impairment loss on investments in associates 13,332
-
Others 688,884
545,598
15,777,589
16,808,385
Changes in operating assets and liabilities:
Decrease (increase) in trade notes and accounts receivable 280,750
(130,504)
Increase in other receivables
(161,098)
(95,065)
Decrease (increase) in other financial assets 237,835
(729,250)
Decrease (increase) in inventories 177,234
(39,007)
Increase in other assets (381,923)
(510,142)
Increase in trade notes and accounts payable 555,739
1,517,930
Increase in other payables 13,702
121,283
Increase in other liabilities 1,057,959
669,528
Decrease in other financial liabilities (11,583)
(26,285)
Decrease in net defined bene
fit liabilities
(678,416)
(593,606)
Payment of severance benefits (79,930)
(130,839)
Decrease in provisions (3,261,759)
(2,605,537)
Changes in financial services
receivables (9,551,305)
(10,253,842)
Investment in operating leases (7,649,654)
(4,269,649)
Others (835,327)
83,214
(20,287,776)
(16,991,771)
Cash generated from operations
1,182,890
1,741,167
(2) Major non-cash transactions not stated on the consolidated statements of cash flows from investing and financing
activities for the years ended December 31, 2021 and 2020 are as follows.
Description
2021
2020
Reclassification of the current portion of long-term debt
and debentures
21,149,425
19,220,065
Reclassification of construction-in-progress to PP&E
ٻ 3,843,940
4,211,393
Reclassification of construction-in-progress to intangible assets 123,107
ٻ
194,505
Contributions in kind (rendering of services) in joint venture -
381,517
ٻ
ٻ
ٻ
ٻ
ڒڔٻ
ٻ
(3)
Changes in liabilities arising from financial activities fo
r the year ended December 31, 2021 are as follows.
Chan
g
es from non-cash transactions
Descri
p
tion
Beginning
of the
y
ear
Cash flows from
financing
activities
Reclassified to
current
p
ortion
Effect of
exchange rate
chan
g
es
Present value
discounts Others
(
*
)
End of
the
y
ear
(
In millions of Korean Won
)
Short-term
borrowings
(including
current
p
ortion
)
29,884,675
(19,812,277)
21,149,425
1,649,562
18,765
776,588
33,666,738
Long-term
debts
12,726,724 3,853,657 (6,285,807) 338,631
10,831 23,695 10,667,731
Debentures
48,795,361 26,862,597 (14,863,618)
2,536,702 23,103 104,664 63,458,809
(*) Others include transfers from or to other accounts and others.
Changes in liabilities arising from financial activities for
the year ended December 31, 2020 are as follows.
Chan
g
es from non-cash transactions
Descri
p
tion
Beginning
of the
y
ear
Cash flows from
financing
activities
Reclassified to
current
p
ortion
Effect of
exchange rate
chan
g
es
Present
value
discounts Others
(
*
)
End of
the
y
ear
(
In millions of Korean Won
)
Short-term
borrowings
(including
current
p
ortion
)
28,349,251
(17,547,902)
19,220,065
(901,820)
41,183
723,898
29,884,675
Long-term
debts
11,217,088 8,432,439 (6,406,492) (477,249) 9,882 (48,944) 12,726,724
Debentures
41,805,814 21,894,431 (12,813,573) (1
,822,914) 21,329 (289,726) 48,795,361
(*) Others include transfers from or to other accounts and others.
37. RISK MANAGEMENT:
(1) Capital risk management
The Group manages its capital to maintain an optimal capital structure for maximizing profit of its shareholder and
reducing the cost of capital. Debt to equity ratio calculated as total liabilities divided by total equity is used as an index
to manage the Group’s capital. The overall capital risk management policy is consistent with that of the prior period. Debt
to equity ratios as of December 31, 202
1 and December 31, 2020 are as follows.
Description December 31, 2021 December 31, 2020
Total liabilities
151,330,626
133,003,242
Total equity 82,615,789 76,340,970
Debt-to-equity ratio 183.2% 174.2%
(2) Financial risk management
The Group is exposed to various financial risks such as market
risk (foreign exchange risk, interest rate risk and price
risk), credit risk and liquidity risk related to its financial instruments. The purpose of risk management of the Group is to
identify potential risks related to financial performance and reduce, eliminate and evade those risks to an acceptable level
of risks to the Group. Overall, the Group’s financial risk management policy is consistent with the prior period policy.
ٻ
ٻ
ٻ
ٻ
ړڋٻ
ٻ
1) Market risk
The Group is mainly exposed to financial risks arising from
changes in foreign exchange rates and interest rates.
Accordingly, the Group uses financial derivative contracts to
hedge and to manage its interest rate risk and foreign
currency risk.
a) Foreign exchange risk management
The Group is exposed to various foreign exchange risks by making transactions in foreign currencies. The Group is
mainly exposed to foreign exchange risk in USD, EUR, JPY and others.
The Group manages foreign exchange risk by matching the in
flow and the outflow of fore
ign currencies according to
each currency and maturity, and by adjusting the foreign currency settlement date based on its exchange rate forecast.
The Group uses foreign exchange derivatives, such as currency forward, currency swap, and currency option; as hedging
instruments. However, speculative foreign exchange trad
e on derivative financial instruments is prohibited.
Sensitivity analysis for a 5% change in exchange rate of the functional currency against each foreign currency on profit
before income tax as of December 31, 2021 is as follows.
Foreign Currency Increase by 5% Decrease by 5%
USD
(81,434)
81,434
EUR (31,240) 31,240
JPY (5,039) 5,039
b) Interest rate risk management
The Group has borrowings with fixed or variable interest rates. Also, the Group is exposed to interest rate risk arising
from financial instruments with variable interest rates. To ma
nage the interest rate risk, the Group maintains an appropriate
balance between borrowings with fixed and variable interest
rates for short-term borrowings and has a policy to borrow
funds with fixed interest rates to avoid the future cash flow
fluctuation risk for long-term debt if possible. The Group
manages its interest rate risk through regular assessments of
the change in market conditions and the adjustments in nature
of its interest rates.
Sensitivity analysis for a 1% change in interest rates on profit
before income tax as of December 31, 2021 is as follows.
Accounts Increase by 1% Decrease by 1%
Cash and cash equivalents
36,126
(36,126)
Financial assets measured at FVPL (4,595) 4,964
Short-term and long-term financial
instruments 14,696 (14,696)
Borrowings and debentures (81,572) 81,572
The Company’s subsidiaries, Hyundai Card Co., Ltd. and Hyundai Capital Services, Inc., that are operating financial
business, are managing interest rate risk by utilizing value at
risk (VaR). VaR is defined as a threshold value which is a
statistical estimate of the maximum potential loss based on
normal distribution. As of
December 31, 2021 and December
31, 2020, the amounts of interest rate risk measured at VaR are
182,864 m
illion and
180,240 million, respectively.
c) Price risk
The Group is exposed to market price fluctuation risk aris
ing from equity instruments. As of December 31, 2021, the
amounts of financial assets measured at FVPL
and financial assets measured at FVOCI are
107,290 million
and
2,460,812 million, respectively.
ٻ
ٻ
ٻ
ٻ
ړڌٻ
ٻ
2) Credit risk
The Group is exposed to credit risk when a counterparty defaults on its contractual obligation resulting in a financial loss
for the Group. The Group operates a policy to transact with counterparties who only meet a certain level of credit rating
which was evaluated based on the counterpa
rty’s financial conditions, de
fault history, and other fa
ctors. The credit risk
in the liquid funds and derivative financial instruments is li
mited as the Group transacts only with financial institutions
with high credit-ratings assigned by international credit-rating agencies. Except for the guarantee of indebtedness
discussed in Note 39, the book value of financial assets in the consolidated financial statements represents the maximum
amounts of exposure to credit risk. In addition, the Company’s subsidiaries, Hyundai Card Co., Ltd. and Hyundai Capital
Services, Inc., that are operating financial business, assesses
their credit stability according to their internal credit ratin
gs
and manage credit risk concentrations by debtor. As of
December 31, 2021, credit risk concentrations are 90% for
households and 10% for companies.
3)
Liquidity risk
The Group manages liquidity risk based on maturity profile
of its funding. The Group analyses and reviews actual cash
outflow and its budget to match the maturity of its financial liabilities to that of its financial assets.
The Group retains an appropriate level of deposit to cope with
uncertainty caused by the inherent nature of the industry
which is sensitive to economic fluctuati
on and to invest in R&D constantly.
In addition, the Group has agreements with financial institutions related to trade financing and overdraft to mitigate any
significant unexpected market deterioration. Also, the Group continues to strengthen its credit rates to secure a stable
financing capability.
The Group’s maturity analysis of its non-derivative liabilities according to their remaining contract period before
expiration as of December 31
, 2021 is as follows.
Remaining contract period
Description
Not later than
one year
Later than one year and
not later than five years
Later than
five years Total
Non-interest-
bearing liabilities
16,973,694
17,049
-
16,990,743
Interest-bearing
liabilities
Financial
guarantee
The maturity analysis is based on the non-discounted cash flows and the earliest maturity date at which payments, i.e.
both principal and interest, should be made.
(3) Derivative instruments
The Group enters into derivative instrument contracts such
as currency forwards, currency
options, currency swaps and
interest swaps to hedge its exposure to changes in foreign exchange rate or interest rate.
As of December 31, 2021 and December 31, 2020, the
Group recognized an accumulative net profit of
13,980 million
and net profit of
61,882 million, respectively, in accumulated other comprehensive profit or loss, for effective cash
flow hedging instruments.
The longest period in which the forecasted transactions are expected to occur is within 93 months as of December 31,
2021.
For the years ended December 31, 2021 and 2020, the Group recognized a net profit of
675,508 million and net loss of
509,252 million in profit or loss (before tax), respectively, wh
ich resulted from the ineffective portion of its cash flow
hedging instruments and changes in the valuation of
its other non-hedging derivative instruments and others.
ٻ
ٻ
ٻ
ٻ
ړڍٻ
ٻ
In addition, the Company’s subsidiaries, Hyundai Card Co. Ltd. and Hyundai Capital Services, Inc., that are operating
financial business, use interest rate swaps and currency swaps to hedge the risks of future cash flows, which related to
borrowings, debentures and others, due to market interest rate
fluctuations and exchange rate fluctuations. As of December
31, 2021, the average hedge ratio is 100%.
38. RELATED-PARTY AND OTHER TRANSACTIONS:
The transactions and balances of receivabl
es and payables within the Group are w
holly eliminated in
the preparation of
consolidated financial statements of the Group.
(1) For the year ended December 31, 2021
, significant transactions
arising from operations between the Group and
related parties or affiliates by the Monopoly Regulation an
d Fair Trade Act of the Republic of Korea (“the Act”)
are as follows.
Description
Sales/proceeds Purchases/expenses
Sales Others Purchases Others
Entity with
significant
influence over
the Company
and its
subsidiaries
Hyundai MOBIS Co., Ltd.
546,326
141,828
9,189,407
80,346
Mobis Alabama, LLC 200,423 58 1,296,680 47,303
Mobis Automotive Czech s.r.o. 11 501 1,948,940 12,268
Mobis India, Ltd. 12,150 2,664 1,060,774 2,263
Mobis Parts America, LLC 111,115 3,564 1,067,076 1,140
Mobis Module CIS, LLC. 31 315 419,772 31
Mobis Parts Europe N.V. 16,986 1,450 473,989 746
Others 62,109 1,788 1,120,565 8,564
Joint ventures
and associates
Kia Corporation 1,167,895 726,215 732,297 786,682
Kia Russia & CIS, LLC 994,790 112 - -
Kia Slovakia s.r.o.. 97,731 281 671,653 4
Kia Georgia, Inc. 617,122 1,518 292 -
BHMC 321,700 - 115,309 18,080
HMGC 37,287 1,299 103,139 63,877
Hyundai WIA Corporation 135,431 1,605 1,280,719 14,515
Others 728,094 64,383 4,505,972 1,816,502
Other related parties
16,780
ٻ
14,627
3,927
6
Affiliates by the Act
769,822
ٻ
118,065
8,566,617
922,130
ٻ
ٻ
ٻ
ٻ
ړڎٻ
ٻ
For the year ended December 31, 2020, si
gnificant transactions arising from oper
ations between the Group and related
parties or affiliates by the Act are as follows.
Description
Sales/proceeds Purchases/expenses
Sales Others Purchases Others
Entity with
significant
influence over
the Company
and its
subsidiaries
Hyundai MOBIS Co., Ltd.
1,182,103
97,974
7,608,254
73,025
Mobis Alabama, LLC 228,571 1,853 1,253,916 8,791
Mobis Automotive Czech s.r.o. 7 530 1,752,089 28,556
Mobis India, Ltd. 9,665 2,508 842,492 16,874
Mobis Parts America, LLC 73,764 3,541 906,939 729
Mobis Module CIS, LLC. - 323 337,999 10
Mobis Parts Europe N.V. 17,863 4,667 365,834 6
Others 34,398 1,802 844,106 9,565
Joint ventures
and associates
Kia Motors Corporation 981,100 674,137 337,027 705,038
Kia Motors Russia LLC. 961,759 125 - -
Kia Motors Slovakia s.r.o. 98,792 3,060 395,545 -
Kia Motors Manufacturing
Georgia, Inc.
344,749
1,646
75
-
BHMC 232,357 45 97,181 15,277
HMGC 20,321 16 64,627 42,957
Hyundai WIA Corporation 116,640 2,752 1,252,893 42,905
Others 711,231 61,490 4,051,200 1,809,744
Other related parties 7,639 4,835 103 4
Affiliates by the Act 818,760 241,185 6,641,683 737,717
(2) As of December 31, 2021, significant balances related to
the transactions between the Group and related parties or
affiliates by the Act are as follows.
Description
Receivables (*1,2) Payables
Trade notes
and accounts
receivable
Other
receivables
and others
Trade notes
and accounts
payable
Other
payables
and others
(In millions of Korean Won)
Entity with
significant
influence over
the Company
and its
subsidiaries
Hyundai MOBIS Co., Ltd.
92,116
301,436
1,687,603
466,862
Mobis Alabama, LLC 14,344 - 108,355 -
Mobis Automotive Czech s.r.o. - 901 194,217 -
Mobis India, Ltd. 1,370 18 123,770 5
Mobis Parts America, LLC 31,309 62 101,750 -
Mobis Module CIS, LLC 15 37 50,666 -
Mobis Parts Europe N.V. 550 118 47,095 18
Others 11,339 491 101,671 6,947
Joint ventures
and associates
Kia Corporation 328,668 335,571 84,505 121,814
Kia Russia & CIS, LLC 134,733 48 - -
Kia Slovakia s.r.o. 6,832 279 46,186 205
Kia Georgia, Inc. 91,109 64,378 11,120 96,639
Kia America, Inc. - 149,910 9 -
BHMC 199,426 13,626 12,344 414
HMGC 6,019 21,752 4,479 37,996
Hyundai WIA Corporation 31,147 920 185,022 28,048
Others 209,556 69,666 679,046 920,138
Other related parties 80 710 52 -
Affiliates by the Act 154,455 61,484 905,856 351,422
(*1) The Group has recognized the loss allowance for the related parties' receivables in the amount of
209 million as of December 31,
2021 and the
ٻ
reversal of impairment loss is
recognized in the amount of
56 million for the year ended December 31, 2021.
(*2) As of December 31, 2021, outstanding payment of
22,096 million of corporate purchase card agreement provided by Hyundai Card
Co., Ltd. is included. For the year ended December 31, 2021, amount used and repayment of agreement are
383,299 million and
406,133 million, respectively.
ٻ
ٻ
ٻ
ٻ
ړڏٻ
ٻ
As of December 31, 2020, significant balances related to th
e transactions between the Group and related parties or
affiliates by the Act are as follows.
Description
Receivables (*1,2) Payables
Trade notes
and accounts
receivable
Other
receivables
and others
Trade notes
and accounts
payable
Other
payables
and others
Entity with
significant
influence over
the Company
and its
subsidiaries
Hyundai MOBIS Co., Ltd.
305,479
422,870
1,326,453
363,166
Mobis Alabama, LLC 10,425 - 135,098 3,116
Mobis Automotive Czech s.r.o. - 160 236,598 2,420
Mobis India, Ltd. 2,021 3 172,639 4
Mobis Parts America, LLC 19,410 71 73,300 -
Mobis Module CIS, LLC - 33 41,556 -
Mobis Parts Europe N.V. 1,242 106 27,709 -
Others 5,121 1,404 74,319 8,078
Joint ventures
and associates
Kia Motors Corporation 451,424 227,908 87,563 173,321
Kia Motors Russia LLC. 136,195 21 - -
Kia Motors Slovakia s.r.o. 7,501 676 55,316 87
Kia Motors Manufacturing
Georgia, Inc. 57,050 96,725 2,292 4,517
Kia Motors America, Inc. - 93,361 69 19,491
BHMC 84,642 15,409 7,552 1,801
HMGC 16,103 19,546 10,739 28,404
Hyundai WIA Corporation 34,683 10,120 206,312 44,536
Others 240,510 59,201 693,955 901,694
Other related parties 57 600 10 -
Affiliates by the Act 166,666 35,421 991,058 337,537
(*1) The Group has recognized the loss allowance for the related parties' receivables in the amount of
265 million as of December 31,
2020 and the reversal of impairment lo
ss is recognized in the amount of
171 million for the year ended December 31, 2020.
(*2) As of December 31, 2020, outstanding payment of
44,930 million of corporate purchase card agreement provided by Hyundai Card
Co., Ltd. is included. For the year ended December 31, 2020, amount used and repayment of agreement are
296,011 million and
272,308 million, respectively.
(3) Significant fund transactions and
equity contribution transac
tions for the year ended
December 31, 2021, between
the Group and related parties are as follows.
Loans Borrowings Equity
Description Lending Collection Borrowing Repayment contribution
Joint ventures and associates -
-
-
7,600
313,720
ons and equity contri
bution transactions for the year
ended December 31, 2020, between
the Group and related parties are as follows.
Loans Borrowings Equity
Description Lending Collection Borrowing Repayment contribution
Joint ventures and associates -
ଋ
5,000
$ 5,000 -
1,867,971
16,000 -
For the years ended December 31, 2021 a
nd 2020, the Group received dividends of
209,957 m
illion and
213,820
million from related parties and affiliates by the Act, respectively and paid dividends of
322,421 million and
240,877 million to related parties, respectiv
ely. During 2021, the Group traded in
other financial assets and others of
2,660,000 million with HYUNDAI MOTOR SECURITIES Co., Ltd
., an associate of the Group. The Group has
other financial assets of
555,000 million in the consolidated
statement of financial position as of December 31, 2021.
ٻ
ٻ
ٻ
ٻ
ړڐٻ
ٻ
For the years ended December 31, 2021, and 2020, HYUNDAI
MOTOR SECURITIES CO., Ltd., an associate of the
Group, acquired bonds issued by the conso
lidated entities, Hyundai Capital Services
Inc. and Hyundai Card Co, Ltd. in
amount of
30,000 million and
70,000 million respectively.
(4) Compensation of registered and unregistered directors,
who are considered to be the key management personnel
ٻ
Description
2021 2020
Short-term employee salaries
296,733
270,833
Retirement benefit costs 48,906 45,683
Other long-term benefits 1,209 964
346,848
317,480
(5) For the year ended December 31, 2021, the Group offer pa
yment guarantee to related parties and affiliates by the
Act.
39. COMMITMENTS AND CONTINGENCIES:
(1) As of December 31, 2021, the debt guarantees prov
ided by the Group, excluding the ones provided to the
Company’s subsidiaries are as follows.
Description Domestic Overseas (*)
To associates
28,299
101,470
To others 6,381 821,942
34,680
923,412
(*) The guarantee amounts in foreign currencies are translated into Korean Won using the Base Rate announced by Seoul Money
Brokerage Services, Ltd. as of December 31, 2021.
(2)
As of December 31, 2021, the Group is involved in domestic
and foreign lawsuits as a
defendant. In addition, the
Group is involved in lawsuits for product liabilities and
others. The Group obtains insurance for potential losses
which may result from product liabilities and other lawsuits. In addition, as of December 31, 2021, the Group is
under investigation by related authorities in relation to th
e theta 2 engine recall, and its results and impacts are
unpredictable. The Group is unable to estimate the outcome of the lawsuits and the amount and timing of outflows
of resources are uncertain. The Group expects that the impact on the consolidated financial statements will not be
material.
(3)
As of December 31, 2021, a substantial portion of the Group’
s PP&E is pledged as collat
eral for various loans and
leasehold deposits up to
768,163 million. In addition, the Group pledged certain bank deposits, checks and
promissory notes, including 213,466 shares of Kia Corporation, as collateral to financial institutions and others.
Certain receivables held by the Company’s foreign subsidia
ries, such as financial services receivables are pledged
as collateral for their borrowings.
(4)
As of December 31, 2021, the Group has overdrafts, genera
l loans, and trade-financing agreements with numerous
financial institutions including Kookmin Bank, with
a combined limit of up to
USD 27,500 million, and
5,527,400
million.
(5)
As of December 31, 2021, Hyundai Capital Services, Inc. an
d Hyundai Card Co., Ltd. have entered into agreements
for certain borrowings including trigger clauses for the purpose of credit enhancement. If the credit rating of Hyundai
Capital Services, Inc. and Hyundai Card Co., Ltd. falls belo
w a certain level, this may result in early repayment of
the borrowings or termination of the contracts.
(6)
As of December 31, 2021, Hyundai Capital Services, Inc. and Hyundai Card Co., Ltd., the subsidiaries of the
Company are able to exercise the prio
rity purchasing rights for the leased office building when the lessor wants to
sell the building or after 4 years and 5 months from the lease contract commencement date.
ٻ
ٻ
ٻ
ٻ
ړڑٻ
ٻ
(7)
As of December 31, 2021, the Company’s total return swap co
ntract is terminated upon the
sale of stocks of Hyundai
Capital Services, Inc., the subsidiary of the Company, held by the third party investor.
(8)
As of December 31, 2021, the Company has a shareholder agre
ement with investors of thir
d parties regarding shares
of Hyundai Card Co., Ltd. and Hyundai Commercial Inc. This includes the call options that allow the Company to
buy shares from the investors and the put options that allow the investors to dispose of the shares to the Company.
(9)
In December 2019, the Company entered into an agreement to invest
1,408,220 million in the construction of new
Global Business Centre (GBC). As of December 31, 2021, the Company has recognized relevant liability in the
amount of
937,555 million in accord
ance with the agreement
with the Seoul government to implement public
contributions relating to the new construction project.
(10)
As of December 31, 2021, the Company entered into a
share purchase agreement with the third party investor
regarding shares of Boston Dynamics, Inc. The shareholder contract contains put options that give the investor the
right to sell its shares to the Purchasers, including the Company, and the Purchasers are jointly and severally
responsible for the put rights. The total
amount of additional obligation of the
Company in the event of defaults of
the other Purchasers is
88,566 million.
(11)
Financial instruments with restrict
ed use for the years ended December 31, 2021 and 2020 are as follows.
Description
December 31, 2021 December 31, 2020
Short-term and long-term financial
instruments
1,694,904
840,628
Cash and cash equivalents 225,731 113,799
Other financial assets 2 7,969
1,920,637
962,396
40. SEGMENT INFORMATION:
(1) The Group has vehicle segment, finance segment and others segment. The vehicle segment is engaged in the
manufacturing and sale of motor vehicles. The finance segm
ent operates vehicle financing, credit card processing
and other financing activities. Others segment includes the R&D, train manufacturing and other activities.
(2) Sales and operating profit by operating segments for the
years ended December 31, 2021 and 2020 are as follows.
(*1) Operating profit of the vehicle segment include internal transaction adjustments.
(*2) Net sales represent sales from external customers.
Vehicle
(*1) Finance Others
Total
Net sales
(*2)
94,143,019
ٻ
16,782,412
6,685,195
117,610,626
Operating profit 4,155,765 2,195,377 327,807 6,678,949
Inter-company sales (52,033,375) (318,479) (1,352,273) (53,704,127)
ٻ
ٻ
ٻ
ٻ
ړڒٻ
ٻ
ٻ
Vehicle
(*1)
Finance Others
Total
Net sales
(*2)
G
80,577,320
G
16,848,079
G
6,572,202
G
103,997,601
Operating profit 728,139 1,367,913 298,619 2,394,671
Inter-company sales (42,456,564) (353,708) (1,483,913) (44,294,185)
(*1) Includes operating profit related to internal transaction adjustments.
(*2) Sales from external customers.
(3)
Assets and liabilities by operating segments as
of December 31, 2021 are as follows.
Vehicle Finance Others
Consolidation
adjustments
Total
Total assets
121,826,011
G
120,951,619
G
8,836,191
G
(17,667,406)
233,946,415
Total liabilities 54,135,289
104,597,059 5,199,761 (12,601,483) 151,330,626
Borrowings and debentures 12,568,592 96,73
4,509 2,569,958 (4,079,781) 107,793,278
Assets and liabilities by operating segments as of December 31, 2020 are as follows.
Vehicle Finance Others
Consolidation
adjustments
Total
Total assets
115,561,852
102,201,169
8,532,445
(16,951,254)
209,344,212
Total liabilities 50,893,713
88,267,154 5,182,892 (11,340,517) 133,003,242
Borrowings and debentures 10,920,355 80,44
0,613 2,520,615 (2,474,823) 91,406,760
(4) Sales by region based on where the Group’s entities are located for the years ended December 31, 2021 and 2020
are as follows.
y
ear ended December 31, 2021
ٻ
Korea
North
America
Asia Euro
p
e Others Total
(In millions of Korean Won)
Net sales
41,332,243
40,750,484
11,390,768
21,508,735
2,628,396
117,610,626
For the
y
ear ended December 31, 2020
Korea
North
America
Asia Europe Others Total
(In millions of Korean Won)
Net sales
40,284,242
36,628,365
8,752,024
16,447,637
1,885,333
103,997,601
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ٻ
ٻ
ٻ
ړړٻ
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(5) Non-current assets by region wher
e the Group’s entities are located in as
of December 31, 2021 and December 31,
2020 are as follows.
Description
December 31,
2021
December 31,
2020
(In millions of Korean Won)
Korea
33,323,986
32,562,450
North America
2,967,662 2,691,789
Asia
2,781,728 2,429,368
Europe
2,254,395 2,234,466
Others
520,729 354,279
41,848,500 40,272,352
Consolidation adjustments
(301,775) (341,589)
Total (*)
41,546,725
39,930,763
(*) Total amount is the same as summation of PP&E, intangible assets and investment properties.
(6) There is no single external customer who represents 10% or more of the Group’s revenue for the years ended
December 31, 2021 and 2020.
41. CONSTRUCTION CONTRACTS:
(1) Cost, income and loss and claimed construction from construction in progress as of December 31, 2021 and
December 31, 2020 are as follows.
Description
December 31,
2021
December 31,
2020
(In millions of Korean Won)
Accumulated cost
12,658,465
11,602,563
Accumulated income
146,975 254,593
Accumulated construction in process
12,805,440 11,857,156
Progress billing
12,286,456 11,460,905
Due from customers
1,421,108 1,252,117
Due to customers
902,124 855,866
Reserve (*)
79,161 95,459
(*) Reserve is recognized as long-term trade notes and accounts receivable in the consolidated financial statements.
(2) Effects on profit or loss of current and future periods, due from customers related to changes in accounting estimates
of total contract revenue and total contract costs of ongoing
contracts of Hyundai Rotem, a subsidiary of the Company,
as of December 31, 2021 are as follows.
Description December 31, 2021
(In millions of Korean Won)
Changes in accounting estimates of total contract revenue
154,893
Changes in accounting estimates of total contract costs
134,441
Effects on profit or loss of current period
(3,913)
Effects on profit or loss of future periods
24,365
Changes in due from customers
50,544
Provision for construction loss
46,357
Effects on profit or loss of current and future periods were
calculated with estimated total contract costs and estimated
total contract revenue based on factors that are considered to be relevant from commencement of the contract to December
31, 2021. Total contract revenue and costs may change in future periods.
(3) There is no contract as of December 31, 2021, in which contract revenue is recognized by the proportion of contract
costs incurred, that accounted for more than 5% of the Group's revenue in the prior period.
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ړڔٻ
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42. BUSINESS COMBINATIONS:
(1) For the year ended December 31, 2021, the Group acquired 50% of the shares of the HYUNDAI THANH CONG
VIET NAM AUTO JOINT VENTURE JOINT STOCK COMPANY (HTV).
The accounting for the business combination
at the acquisition date is as follows.
Description Amount
(In millions of Korean Won)
Total considerations transferred
285,050
Non-controlling interests
202,039
Assets and liabilities acquired:
Current assets
110,151
Non-current assets
366,471
Property, plant and equipment
1,007
Intangible assets
361,238
Others
4,226
Current liabilities
190
Non-current liabilities
72,354
Fair value of identifiable net assets
404,078
Goodwill
83,011
The amounts of sales and net profit of the acquiree since the acquisition date included in the consolidated statement of
income for the year ended December 31, 2021 are
G
1,348,323 m
illion and
92,168 million, respectively.
(2) For the year ended December 31, 2021, the Group acq
uired 82.48% of the shar
es of the AirPlug Inc.
The accounting for the business combination
at the acquisition date is as follows.
Description Amount
(In millions of Korean Won)
Total considerations transferred
24,472
Non-controlling interests
31
Assets and liabilities acquired:
Current assets
3,720
Non-current assets
2,252
Current liabilities
927
Non-current liabilities
517
Fair value of identifiable net assets
4,528
Goodwill
19,975
The amounts of sales and net profit of the acquiree since the
acquisition date included in th
e consolidated statement of
loss for the year ended December 31, 2021 are
G
870 million and
2,098 million, respectively.