Hyundai Mobis : 2022 Annual Consolidated Financial Statements Audit Report

HYUNDAI MOBIS CO., LTD.

AND ITS SUBSIDIARIES

Consolidated Financial Statements

For the year ended December 31, 2022

With the Independent Auditor's Report

Contents

The audit procedures performed with regard to the key audit matter are as follows:

• Review the time when control is transferred on the basis of revenue recognition under KIFRS by reviewing the Group's major contract terms and conditions.
• Obtain an understanding of the Group's policies, processes and internal control procedures related to sales of A/S parts.
• Compare the accounting records and original documents for sales transactions in the A/S parts business that occurred before and after the end of the reporting period.

(Key audit matter 2) Measurement of inventory valuation allowance

As described in Note 3-(8) and 9 to the consolidated financial statements, the Group recognized an allowance for inventory valuation of W227,668 million by measuring inventories at the lower of acquisition cost and net realizable value.

The Group has a variety of inventories, which account for a significant proportion of total assets of the Group. The Group measures the net realizable value of inventories based on various assumptions, such as the non- movement period, forecasted demand, and expected selling price. Therefore, we identified the adequacy of the inventory valuation allowance measurement as a key audit matter in consideration of the significance of inventories in the Group's consolidated financial statements and the significant risk of misstatement that may occur due to the uncertainty of estimates used by management when measuring net realizable value, and the complexity of assumptions.

The audit procedures performed with regard to the key audit matter are as follows:

• Obtain an understanding of the accounting policies and internal control procedures related to inventory valuation allowance measurement.
• Compare the basic data of major accounting estimates used by management with internal and external information.
• Review the results of accounting estimates included in the prior year consolidated financial statements.
• Verify by conducting independent recalculation of inventory valuation allowance.

Other Matter

The consolidated statement of financial position as of December 31, 2021, and the consolidated statement of profit or loss, consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, were audited by KPMG Samjong Accounting Corp. in accordance with KSA, whose report dated March 8, 2022, expressed an unqualified opinion thereon.

Responsibilities of management and those charged with governance for the consolidated financial statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with KIFRS, and for such internal control as management determines is necessary to enable the preparation of the 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.

A member firm of Ernst & Young Global Limited

Auditor's 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 auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with KSA 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 KSA, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
• 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 auditor's 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 auditor's report. However, future events or conditions may cause the Group to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on 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 auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should

A member firm of Ernst & Young Global Limited