HYUNDAI MOBIS CO., LTD.
AND ITS SUBSIDIARIES
Consolidated financial statements
for each of the two years in the period ended December 31, 2023
with the independent auditor's report
Table of contents
Page | |
Independent Auditor's Report | |
Consolidated Financial Statements | |
Consolidated Statements of Financial Position | 1 |
Consolidated Statements of Profit or Loss | 3 |
Consolidated Statements of Comprehensive Income | 4 |
Consolidated Statements of Changes in Equity | 5 |
Consolidated Statements of Cash Flows | 7 |
Notes to the Consolidated Financial Statements | 8 |
Independent auditor's report on internal control over financial reporting ("ICFR") | |
Management's report on the effectiveness of ICFR |
Ernst & Young Han Young
2-4F,6-8F, Taeyoung Building, 111, Yeouigongwon-ro,
Yeongdeungpo-gu, Seoul 07241 Korea
Tel: +82 2 3787 6600
Fax: +82 2 783 5890 ey.com/kr
Independent Auditor's Report
(English Translation of a Report Originally Issued in Korean)
The Shareholders and Board of Directors
HYUNDAI MOBIS CO., LTD.
Opinion
We have audited the consolidated financial statements of HYUNDAI MOBIS CO., LTD. and its subsidiaries (collectively referred to as the "Group"), which comprise the consolidated statements of financial position as of December 31, 2023 and 2022, and the consolidated statements of profit or loss, consolidated statements of comprehensive income, consolidated statements of changes in equity and consolidated statements of cash flows for each of the two years in the period ended December 31, 2023, and the notes to the consolidated financial statements, including material accounting policy information.
In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2023 and 2022, and its consolidated financial performance and its consolidated cash flows for each of the two years in the period ended December 31, 2023 in accordance with International Financial Reporting Standards as adopted by the Republic of Korea ("KIFRS").
We have audited the Group's internal control over financial reporting ("ICFR") as of December 31, 2023 based on the Conceptual Framework for Design and Operation of ICFR established by the Operating Committee of ICFR in Korea in accordance with Korean Standards on Auditing ("KSA"), and our report dated March 12, 2024 expressed an unqualified opinion thereon.
Basis for Opinion
We conducted our audit in accordance with KSA. Our responsibilities under those standards are further described in the Auditor's 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 the 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 judgement, were of most significance in our audit of the consolidated financial statements of the current period. 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. For each matter below, our description of how our audit addressed the matter is provided in that context.
(Key audit matter 1) Appropriate cut-off of revenue recognition for A/S parts
As described in Notes 3-(20) and 4 to the consolidated financial statements, the Group is engaged in A/S parts business of significant scale, and recognizes the related consideration as revenue when the control of goods is transferred in a contract with a customer. The Group's sales of A/S parts are transacted with various customers, and the timing of revenue recognition may differ depending on the contract with the customer, and thus, the inherent risk of cut-off of revenue recognition is high. Therefore, we identified the appropriateness of sales cutoff of A/S parts as a key audit matter in consideration of the significance of sales of A/S parts in the Group's revenues and the significant risk of misstatement in the cut-off of revenue recognition, which may occur depending on the terms of contracts with various customers.
A member firm of Ernst & Young Global Limited
Our procedures performed with regard to the key audit matter are as follows:
- Review the time when the 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 the Group's internal control over revenue recognition of A/S parts.
- Evaluate the effectiveness of the design and operation of the Group's internal control over sales cut-off of A/S parts.
- Compare the accounting records with supporting documents of sales transactions of the A/S parts occurring on and around the year end, on a sample basis.
(Key audit matter 2) Assessment of inventory valuation allowance
As described in Notes 3-(8) and 9 to the consolidated financial statements, the Group recognized an allowance for inventory valuation of W218,812 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 assesses the net realizable value of inventories based on various assumptions, such as non- movement period, forecasted demand, and estimated selling price of inventories. Therefore, we identified the adequacy of the assessment of inventory valuation allowance 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 estimates uncertainty used when assessing net realizable value, and the complexity of assumptions by management.
Our procedures performed with regard to the key audit matter are as follows:
- Obtain an understanding of the accounting policies and the Group's internal control over the assessment of inventory valuation allowance.
- Compare the significant underlying data used by management for the accounting estimates with related internal and external data.
- Review the outcome of accounting estimates included in the prior year's consolidated financial statements.
- Verify inventory valuation allowances by conducting our independent recalculation of them.
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.
- 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.
A member firm of Ernst & Young Global Limited
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 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.
The engagement partner on the audit resulting in this independent auditor's report is Hee-Yeong Kim.
March 12, 2024
This audit report is effective as of March 12, 2024, the independent auditor's report date. Accordingly, certain material subsequent events or circumstances may have occurred during the period from the date of the independent auditor's report to the time this report is used. Such events and circumstances could significantly affect the accompanying consolidated financial statements and may result in modifications to this report.
A member firm of Ernst & Young Global Limited
HYUNDAI MOBIS CO., LTD. AND ITS SUBSIDIARIES
Consolidated Financial Statements
For each of the two years in the period ended December 31, 2023
"The accompanying consolidated financial statements, including all footnotes and disclosures, have been
prepared by, and are the responsibility of, the Group."
Gyusuk Lee
Chief Executive Officer
HYUNDAI MOBIS Co., Ltd.
HYUNDAI MOBIS CO., LTD. AND ITS SUBSIDIARIES
Consolidated Statements of Financial Position
As of December 31, 2023 and 2022
(In millions of won) | Note | 2023 | 2022 | ||||
Assets | |||||||
Cash and cash equivalents | 5,40 | W | 5,079,414 | W | 4,088,248 | ||
Other financial assets | 6,7,40 | 4,123,326 | 5,643,199 | ||||
Trade and other receivables, net | 8,22,29,36,40 | 10,134,237 | 10,164,263 | ||||
Inventories, net | 4,9 | 5,511,638 | 5,267,166 | ||||
Other current assets | 10,40 | 716,539 | 496,845 | ||||
Total current assets | 25,565,154 | 25,659,721 | |||||
Property, plant and equipment, net | 4,11,22,37 | 10,480,920 | 9,370,715 | ||||
Intangible assets, net | 4,12 | 1,034,350 | 965,065 | ||||
Investment property, net | 13 | 53,094 | 56,390 | ||||
Right-of-use assets, net | 14 | 529,805 | 415,369 | ||||
Investments in associates and joint | 15 | 18,984,841 | 17,113,324 | ||||
ventures | |||||||
Non-current financial assets | 16,40 | 911,165 | 911,583 | ||||
Deferred tax assets | 34 | 237,519 | 180,565 | ||||
Other non-current assets | 6,8,17,23,40 | 788,997 | 733,966 | ||||
Total non-current assets | 33,020,691 | 29,746,977 | |||||
Total assets | W | 58,585,845 | W | 55,406,698 | |||
(continued)
1
HYUNDAI MOBIS CO., LTD. AND ITS SUBSIDIARIES
Consolidated Statements of Financial Position, Continued
As of December 31, 2023 and 2022
(In millions of won) | Note | 2023 | 2022 | ||||
Liabilities | |||||||
Trade and other payables | 18,36,40 | W | 7,742,151 | W | 7,621,632 | ||
Current portion of long-term debt and | 22,39,40 | 1,540,144 | 1,781,532 | ||||
short-term borrowings | |||||||
Current lease liabilities | 39,40 | 124,981 | 101,982 | ||||
Income taxes payable | 34 | 226,196 | 246,708 | ||||
Current provisions for warranties | 21 | 1,205,747 | 878,603 | ||||
Other current liabilities | 19,40 | 1,213,607 | 845,713 | ||||
Total current liabilities | 12,052,826 | 11,476,170 | |||||
Bonds and long-term borrowings | 22,39,40 | 692,062 | 1,462,049 | ||||
Defined benefit obligations | 23 | 14,543 | 11,205 | ||||
Non-current lease liabilities | 39,40 | 393,427 | 297,004 | ||||
Non-current provision for warranties | 21 | 372,460 | 295,938 | ||||
Deferred tax liabilities | 34 | 3,849,502 | 3,513,616 | ||||
Other non-current liabilities | 20,40 | 555,726 | 543,084 | ||||
Total non-current liabilities | 5,877,720 | 6,122,896 | |||||
Total liabilities | 17,930,546 | 17,599,066 | |||||
Equity | |||||||
Capital stock | 24 | 491,096 | 491,096 | ||||
Capital surplus | 24 | 1,363,146 | 1,362,200 | ||||
Treasury stock | 25 | (681,939) | (568,475) | ||||
Other equity | 26 | (177,414) | (464,875) | ||||
Retained earnings | 27 | 39,639,529 | 36,979,291 | ||||
Equity attributable to owners of the | |||||||
Company | 40,634,418 | 37,799,237 | |||||
Non-controlling interests | 1 | 20,881 | 8,395 | ||||
Total equity | 40,655,299 | 37,807,632 | |||||
Total liabilities and equity | W | 58,585,845 | W | 55,406,698 | |||
The accompanying notes are an integral part of the consolidated financial statements.
2
HYUNDAI MOBIS CO., LTD. AND ITS SUBSIDIARIES
Consolidated Statements of Profit or loss
For each of the two years in the period ended December 31, 2023
(In millions of won, except earnings per share) | Note | 2023 | 2022 | ||||
Revenue | 4,29,36 | W | 59,254,361 | W | 51,906,293 | ||
Cost of sales | 30,36 | (52,492,187) | (45,919,139) | ||||
Gross profit | 6,762,174 | 5,987,154 | |||||
Selling, general and administrative expenses | 30,31,33 | (4,466,890) | (3,960,623) | ||||
Operating profit | 4 | 2,295,284 | 2,026,531 | ||||
Other income | 32,33 | 350,832 | 481,942 | ||||
Other expenses | 11,12,32,33 | (265,580) | (483,991) | ||||
Finance income | 33 | 824,814 | 784,891 | ||||
Finance costs | 33 | (605,237) | (668,331) | ||||
Share of profit of associates and joint ventures | 15 | 1,844,741 | 1,221,570 | ||||
Profit before income taxes | 4,444,854 | 3,362,612 | |||||
Income tax expense | 34 | (1,021,545) | (875,368) | ||||
Profit for the year | W | 3,423,309 | W | 2,487,244 | |||
Profit attributable to: | |||||||
Owners of the Company | 35 | W | 3,422,616 | W | 2,485,254 | ||
Non-controlling interests | 1 | 693 | 1,990 | ||||
Earnings per share | |||||||
Basic earnings per share in won | 35 | W | 37,639 | W | 27,163 |
The accompanying notes are an integral part of the consolidated financial statements.
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Hyundai Mobis Co. Ltd. published this content on 09 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 09 May 2024 05:08:01 UTC.