6-K 1 d239056d6k.htm FORM 6-K Form 6-K
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

Form 6-K

 

 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of March 2022

Commission File Number: 000-53445

 

 

KB Financial Group Inc.

(Translation of registrant’s name into English)

 

 

26, Gukjegeumyung-ro 8-gil, Yeongdeungpo-gu, Seoul 07331, Korea

(Address of principal executive office)

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F  ☒             Form 40-F  ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):            

Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):            

Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.

 

 

 


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Audit Report of KB Securities Co., Ltd. for Fiscal Year 2021

On March 8, 2022, KB Financial Group Inc. disclosed audit reports of KB Securities Co., Ltd. (“KB Securities”), its wholly-owned subsidiary, for fiscal year 2021 based on the International Financial Reporting Standards as adopted by the Republic of Korea (including the consolidated and separate financial statements of KB Securities as of and for the years ended December 31, 2021 and 2020 and related notes) received from KPMG Samjong Accounting Corp., its independent auditor. The financial statements in such reports have not been approved by the shareholders of KB Securities and remain subject to change.

KB Financial Group Inc. is furnishing the following documents as exhibits to this Form 6-K filing:

Exhibit 99.1: An English-language translation of the Consolidated Audit Report of KB Securities for FY 2021.

Exhibit 99.2: An English-language translation of the Separate Audit Report of KB Securities for FY 2021.


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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

   

KB Financial Group Inc.

    (Registrant)
Date: March 8, 2022     By:   /s/ Scott Y. H. Seo
    (Signature)
    Name: Scott Y. H. Seo
    Title: Senior Managing Director and Chief Finance Officer


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Exhibit 99.1

KB SECURITIES CO., LTD. and Subsidiaries

Consolidated Financial Statements

December 31, 2021 and 2020

(With Independent Auditors’ Report Thereon)


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KB SECURITIES CO., LTD. and Subsidiaries

Index

December 31, 2021 and 2020

 

 

 

     Page(s)  

Independent Auditors’ Report

     1~3  

Consolidated Financial Statements

  

Consolidated Statements of Financial Position

     4  

Consolidated Statements of Profit or Loss

     5  

Consolidated Statements of Comprehensive Income

     6  

Consolidated Statements of Changes in Equity

     7  

Consolidated Statements of Cash Flows

     8  

Notes to the Consolidated Financial Statements

     9~140  


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Independent Auditors’ Report

(Based on a report originally issued in Korean)

The Board of Directors and Stockholder

KB Securities Co., Ltd.:

Opinion

We have audited the consolidated financial statements of KB Securities Co., Ltd. and its subsidiaries (“the Group”), which comprise the consolidated statements of financial position as of December 31, 2021 and 2020, the consolidated statements of profit or loss, comprehensive income, changes in equity and cash flows for the years then ended, and notes, comprising a summary of 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 cash flows for the years then ended in accordance with Korean International Financial Reporting Standards (“K-IFRS”).

Basis for Opinion

We conducted our audit 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.

Emphasis of Matter

As a matter that does not affect our audit opinion, we draw attention to the following matter.

As described in note 40 to the consolidated financial statements, the proliferation of COVID-19 has had a negative impact on the global economy, which may have a greater impact than expected credit losses and potential impairment of assets in a particular portfolio, and it could negatively affect the profit generation capability of the Group.

Other Matters

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.


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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 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.

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:

 

   

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 in the preparation of the consolidated financial statements 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 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.

 

   

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.

 

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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 the internal controls that we identify during our audit.

KPMG Samjong Accounting Corp.

Seoul, Korea

March 7, 2022

 

 

 

This report is effective as of March 7, 2022, 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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KB SECURITIES CO., LTD. and Subsidiaries

Consolidated Statements of Financial Position

December 31, 2021 and 2020

 

 

(in Korean won)    Notes      2021      2020  

Assets

        

Cash and deposits

     5,35,36,37,42        3,834,048,674,705        3,889,064,252,198  

Financial assets at fair value through profit or loss

     6,35,36,37        34,182,334,301,081        33,415,470,014,464  

Derivative financial assets

     7,35,36,37,38        817,518,307,305        928,690,440,172  

Financial assets at fair value through other comprehensive income

     8,35,36,37        3,839,877,806,177        3,905,038,843,780  

Investments in associates

     9        137,621,441,023        312,090,836,287  

Financial assets measured at amortised cost

     10,35,36,37,39        7,186,208,182,322        6,644,454,998,421  

Property and equipment

     11,39        210,755,849,488        226,120,569,861  

Investment properties

     12        1,147,746,979,871        1,173,404,223,897  

Intangible assets

     13        185,272,286,741        169,082,214,065  

Current tax assets

        4,948,083,454        5,971,446,984  

Deferred tax assets

     34        —          —    

Other financial assets

     14,35,36,37,38        3,661,821,844,639        6,789,449,197,296  

Other assets

     15        50,892,344,080        40,821,543,674  

Disposal group classified as held for sale

     45        171,749,315,076        —    
     

 

 

    

 

 

 

Total assets

        55,430,795,415,962        57,499,658,581,099  
     

 

 

    

 

 

 

Liabilities

        

Deposit liabilities

     16,35,36,37        8,391,075,182,612        7,686,410,760,723  

Financial liabilities at fair value through profit or loss

     6,35,36,37,38        11,986,846,570,347        11,681,634,705,089  

Derivative financial liabilities

     7,35,36,37,38        874,641,742,107        863,332,004,471  

Borrowings

     17,35,36,37,38        24,649,381,850,266        25,029,132,760,730  

Current tax liabilities

        2,196,195,146        7,773,770,945  

Net defined benefit liabilities

     18        55,619,888,673        53,636,423,458  

Deferred tax liabilities

     34        16,878,468,859        4,915,992,113  

Provisions

     19        106,123,390,303        82,870,710,240  

Other financial liabilities

     20,35,36,37,38,39        3,484,650,270,838        6,704,330,326,110  

Other liabilities

     21        427,826,239,552        387,601,021,477  
     

 

 

    

 

 

 

Total liabilities

        49,995,239,798,703        52,501,638,475,356  
     

 

 

    

 

 

 

Equity

        

Share capital

     22        1,493,102,120,000        1,493,102,120,000  

Other paid-in capital

     23        1,478,687,978,420        1,478,716,745,754  

Retained earnings

     24        2,247,970,109,154        1,847,509,495,299  

Other components of equity

     25        204,500,516,202        178,381,856,637  

Other Comprehensive Income for the disposal group classified as held for sale

     45        7,670,746,146        —    
     

 

 

    

 

 

 

Equity attributable to shareholders of the Parent Company

        5,431,931,469,922        4,997,710,217,690  

Non-controlling interest

        3,624,147,337        309,888,053  
     

 

 

    

 

 

 

Total equity

        5,435,555,617,259        4,998,020,105,743  
     

 

 

    

 

 

 

Total liabilities and equity

        55,430,795,415,962        57,499,658,581,099  
  

 

 

    

 

 

 

The above consolidated statements of financial position should be read in conjunction with the accompanying notes.

 

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KB SECURITIES CO., LTD. and Subsidiaries

Consolidated Statements of Profit or Loss

Years Ended December 31, 2021 and 2020

 

 

(in Korean won)    Notes      2021     2020  

Operating income

       

Fee and commission income

     26        1,144,248,378,743       986,396,263,250  

Gain on valuation and disposal of financial instruments

     27        5,550,641,843,434       7,068,696,085,166  

Interest income

     28        826,686,736,401       822,598,489,784  

Interest income from financial instruments at FVTPL

        402,414,577,880       430,354,396,329  

Interest income in applying of effective interest rate

        424,272,158,521       392,244,093,455  

Gain on valuation and disposal of financial assets measured at amortised costs

     29        7,839,928,487       29,252,916,198  

Gain on foreign currency transactions

     30        793,253,127,269       961,701,785,975  

Other operating income

     31        226,880,484,789       187,220,475,943  
     

 

 

   

 

 

 
        8,549,550,499,123       10,055,866,016,316  
     

 

 

   

 

 

 

Operating expenses

       

Fee and commission expense

     26        186,868,006,666       120,787,340,778  

Loss on valuation and disposal of financial instruments

     27        5,581,543,512,545       7,062,893,770,938  

Interest expense

     28        268,260,223,608       309,414,129,773  

Loss on valuation and disposal of financial assets measured at amortised costs

     29        22,862,121,814       29,038,084,846  

Loss on foreign currency transactions

     30        744,492,109,236       1,092,936,571,849  

Selling and administrative expenses

     32        855,262,728,540       837,463,427,511  

Other operating expenses

     31        68,987,483,624       24,536,653,032  
     

 

 

   

 

 

 
        7,728,276,186,033       9,477,069,978,727  
     

 

 

   

 

 

 

Operating profit

        821,274,313,090       578,796,037,589  

Non-operating income

     33        48,129,525,832       114,338,476,575  

Non-operating expenses

     33        51,360,194,503       99,898,443,996  
     

 

 

   

 

 

 

Profit before income tax

        818,043,644,419       593,236,070,168  

Income tax expense

     34        217,752,228,397       159,284,706,620  
     

 

 

   

 

 

 

Profit for the year

        600,291,416,022       433,951,363,548  
     

 

 

   

 

 

 

Profit attributable to:

       

Shareholders of the Parent Company

        600,439,340,042       433,925,816,556  

Non-controlling interest

        (147,924,020     25,546,992  

The above consolidated statements of profit or loss should be read in conjunction with the accompanying notes.

 

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KB SECURITIES CO., LTD. and Subsidiaries

Consolidated Statements of Comprehensive Income

Years Ended December 31, 2021 and 2020

 

 

(in Korean won)    Notes      2021     2020  

Profit for the year

        600,291,416,022       433,951,363,548  
     

 

 

   

 

 

 

Other comprehensive income(loss)

       

Items that will not be reclassified to profit or loss

       

Net gains on valuation of equity instruments at fair value through other comprehensive income

     8,25        27,779,973,437       30,958,040,138  

Fair value changes on financial liabilities designated at fair value due to own credit risk

     6,25        13,714,607,803       8,832,146,927  

Remeasurements of the net defined benefit liabilities

     18,25        (2,237,583,109     (4,785,482,165

Items that may be subsequently reclassified to profit or loss

       

Net gains (losses) on valuation of debt instrument at fair value through other comprehensive income

     8,25        (17,213,330,222     2,690,383,182  

Share of other comprehensive income (loss) of associates

     9,25        23,492,222       (138,895,503

Gains (Losses) on hedge of net investments in foreign operations

     7,25        (13,082,538,140     3,261,527,418  

Exchange difference on translation of foreign operations

     25        25,060,921,541       (17,060,194,229

Other comprehensive income for the year, net of tax

        34,045,543,532       23,757,525,768  
     

 

 

   

 

 

 

Total comprehensive income for the year

        634,336,959,554       457,708,889,316  
     

 

 

   

 

 

 

Total comprehensive income for the year attributable to:

       

Shareholders of the Parent Company

 

     634,250,019,566       457,702,825,149  

Non-controlling interest

 

     86,939,988       6,064,167  

The above consolidated statements of comprehensive income should be read in conjunction with the accompanying notes.

 

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KB SECURITIES CO., LTD. and Subsidiaries

Consolidated Statements of Changes in Equity

Years Ended December 31, 2021 and 2020

 

 

    Attributable to the Shareholder of the Parent Company              
    Share
Capital
    Other Paid
In Capital
    Retained
Earnings
    Other
Components
of Equity
    Other Comprehensive
Income for

the Disposal Group
    Total     Non-controlling
Interest
    Total Equity  

Balance at January 1, 2020

    1,493,102,120,000       1,478,716,745,754       1,493,402,661,346       154,785,865,441       —         4,620,007,392,541       303,823,886       4,620,311,216,427  

Dividends

    —         —         (80,000,000,000     —         —         (80,000,000,000     —         (80,000,000,000

Revaluations of property and equipments

    —         —         181,017,397       (181,017,397     —         —         —         —    

Total comprehensive income

               

Profit for the year

    —         —         433,925,816,556       —         —         433,925,816,556       25,546,992       433,951,363,548  

Gains on equity instruments at fair value through other comprehensive income

    —         —         —         33,648,423,320       —         33,648,423,320       —         33,648,423,320  

Fair value changes on financial liabilities designated at fair value due to own credit risk

    —         —         —         8,832,146,927       —         8,832,146,927       —         8,832,146,927  

Share of other comprehensive income of associates

    —         —         —         (138,895,503     —         (138,895,503     —         (138,895,503

Remeasurements of net defined benefit liabilities

    —         —         —         (4,785,482,165     —         (4,785,482,165     —         (4,785,482,165

Losses on hedge of net investments in foreign operations

    —         —         —         3,261,527,418       —         3,261,527,418       —         3,261,527,418  

Exchange difference on translation of foreign operations

    —         —         —         (17,040,711,404     —         (17,040,711,404     (19,482,825     (17,060,194,229
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance at December 31, 2020

    1,493,102,120,000       1,478,716,745,754       1,847,509,495,299       178,381,856,637       —         4,997,710,217,690       309,888,053       4,998,020,105,743  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance at January 1, 2021

    1,493,102,120,000       1,478,716,745,754       1,847,509,495,299       178,381,856,637       —         4,997,710,217,690       309,888,053       4,998,020,105,743  

Dividends

    —         —         (200,000,000,000     —         —         (200,000,000,000     —         (200,000,000,000

Revaluations of property and equipments

    —         —         21,273,813       (21,273,813     —         —         —         —    

Changes in ownership of subsidiaries

    —         (28,767,334     —         —         —         (28,767,334     3,227,319,296       3,198,551,962  

Total comprehensive income

               

Profit for the year

    —         —         600,439,340,042       —         —         600,439,340,042       (147,924,020     600,291,416,022  

Gains on equity instruments at fair value through other comprehensive income

    —         —         —         10,566,643,215       —         10,566,643,215       —         10,566,643,215  

Fair value changes on financial liabilities designated at fair value due to own credit risk

    —         —         —         13,714,607,803       —         13,714,607,803       —         13,714,607,803  

Share of other comprehensive loss of associates

    —         —         —         23,492,222       —         23,492,222       —         23,492,222  

Remeasurements of net defined benefit liabilities

    —         —         —         (2,237,583,109     —         (2,237,583,109     —         (2,237,583,109

Gains on hedge of net investments in foreign operations

    —         —         —         (13,082,538,140     —         (13,082,538,140     —         (13,082,538,140

Exchange difference on translation of foreign operations

    —         —         —         24,826,057,533       —         24,826,057,533       234,864,008       25,060,921,541  

Other

               

Other Comprehensive income for the disposal group classified as held for sale

    —         —         —         (7,670,746,146     7,670,746,146       —         —         —    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance at December 31, 2021

    1,493,102,120,000       1,478,687,978,420       2,247,970,109,154       204,500,516,202       7,670,746,146       5,431,931,469,922       3,624,147,337       5,435,555,617,259  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

The above consolidated statements of changes in equity should be read in conjunction with the accompanying notes

 

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KB SECURITIES CO., LTD. and Subsidiaries

Consolidated Statements of Cash Flows

Years Ended December 31, 2021 and 2020

 

 

(in Korean won)    Notes    2021     2020  

Cash flows from operating activities

       

Cash generated from operating activities

       

Profit for the year

        600,291,416,022       433,951,363,548  

Adjustment for non-cash items

   42      (417,312,391,023     (248,544,938,485

Changes in operating assets and liabilities

   42      (1,734,309,882,567     (4,578,264,403,066
     

 

 

   

 

 

 
        (1,551,330,857,568     (4,392,857,978,003

Interest received

        867,556,903,180       864,814,417,368  

Interest paid

        (262,543,247,334     (301,546,264,932

Dividends received

        48,254,346,434       43,381,180,350  

Income taxes paid

        (211,033,728,541     (117,986,634,762
     

 

 

   

 

 

 

Net cash used in operating activities

        (1,109,096,583,829     (3,904,195,279,979
     

 

 

   

 

 

 

Cash flows from investing activities

       

Decrease in long-term deposit held by bank

        445,606,747,492       1,637,546,400,000  

Acquisition of financial assets at fair value through other comprehensive income

        (4,678,422,757,635     (7,177,688,217,371

Disposal of financial assets at fair value through other comprehensive income

        4,731,871,208,238       5,913,177,631,905  

Acquisition of investments of associates

   9      (238,418,796,834     (312,428,478,000

Disposal of investment of associates

   9      94,278,366,786       60,460,896,710  

Net cash flows from the change in subsidiaries

   9      (4,020,649,275     (3,375,470,308

Acquisition of property and equipment

   11      (23,586,057,672     (24,533,604,849

Disposal of property and equipment

   11      683,373,612       4,023,409,090  

Acquisition of intangible assets

   13      (36,856,058,060     (26,838,714,187

Disposal of intangible assets

   13      2,086,788,000       6,024,675,739  

Acquisition of investment properties

   12      —         (53,070,982,551

Disposal of investment properties

   12      58,071,100,474       378,427,620,851  

Disposal of assets held for sale

        —         20,184,660,053  

Others

        (26,298,576,016     (458,672,754
     

 

 

   

 

 

 

Net cash provided by investing activities

        324,994,689,110       421,451,154,328  
     

 

 

   

 

 

 

Cash flows from financing activities

       

Increase in borrowings

   42      1,243,604,095,870       3,604,511,139,722  

Increase(decrease) in guarantee deposit liabilities

   42      (816,464,491     1,120,018,476  

Dividends paid

   24      (200,000,000,000     (80,000,000,000

Redemption of principal elements of lease payments

        (32,271,499,249     (25,090,407,972

Increase in share capital

        3,218,525,903       —    

Increase in other liabilities

        23,956,770,027       8,321,432,308  
     

 

 

   

 

 

 

Net cash provided by financing activities

        1,037,691,428,060       3,508,862,182,534  
     

 

 

   

 

 

 

Effect of exchange rate changes on cash and cash equivalents

        1,379,611,661       (491,340,927
  

 

 

   

 

 

 

Net increase in cash and cash equivalents

        254,969,145,002       25,626,715,956  

Cash and cash equivalents at the beginning of the year

   5      421,397,220,746       395,770,504,790  
     

 

 

   

 

 

 

Cash and cash equivalents at the end of the year

   5      676,366,365,748       421,397,220,746  
     

 

 

   

 

 

 

Cash and cash equivalents from the disposal group classified as held for sale

   45      512,346,130       —    
     

 

 

   

 

 

 

Cash and cash equivalents in consolidated statement of financial position as at the end of the year

   5      675,854,019,618       421,397,220,746  
     

 

 

   

 

 

 

The above consolidated statements of cash flows should be read in conjunction with the accompanying notes.

 

8


Table of Contents

KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021 and 2020

 

 

1. General Information

General information of KB Securities Co., Ltd. (the “Parent Company” or “KB Securities”) which is a controlling company in accordance with Korean IFRS No.1110 Consolidated Financial Statements, and 102 subsidiaries including KBFG Securities America Inc. is as follows:

The Parent Company was established on June 1, 1962, under the name of Kookil Securities Co., Ltd. On June 5, 1986, the Parent Company changed its name to “Hyundai Securities Co., Ltd.”. After several capital increases, the share capital of the Parent Company amounts to W 1,493,102 million as at December 31, 2020.

The Parent Company became a wholly owned subsidiary of KB Financial Group Inc. on October 19, 2016, through a comprehensive exchange of shares. At the end of the reporting period, KB Financial Group Inc. owns 100% of ordinary shares of the Parent Company.

Meanwhile, the Parent Company merged with KB Investment & Securities Co., Ltd. (the “KB Investment & Securities”) on December 30, 2016 as a surviving company and changed its name to KB Securities Co., Ltd. As at December 31, 2021, the Parent Company has 108 branch offices in Korea and one overseas branch office.

Details of the consolidated subsidiaries as at December 31, 2021 and 2020, are as follows:

 

   

2021

Investor

 

Investee

  Percentage of
ownership (%)
   

Location

 

Date of
financial
statements

 

Industry

The Parent Company

  KBFG Securities America Inc.     100.00     USA   December  

Investment, advisory

  KB Securities Hong Kong Ltd.     100.00     Hong Kong   December  

Investment, advisory

  KB Securities Vietnam Joint Stock Company     99.81     Vietnam   December  

Investment, advisory

  KB FINA Joint Stock Company     77.82     Vietnam   December  

IT(Fintech)

 

KB Digital Innovation&growth New Technology Business Investment Fund 1

    20.00     Korea   December  

Other financial

 

KB Pre-IPO 2nd (TCB) New Technology Business Investment Fund 1

    42.86     Korea   December  

Other financial

 

JB New Jersey Private Real Estate Fund 1

    98.15     Korea   December   Funds
 

Heungkuk Global Highclass Private Real Estate Trust 23

    100.00     Korea   December   Funds
 

DGB Qualified Investor Private Real Estate Investment Trust No.8

    98.77     Korea   December   Funds
 

LB Ireland Private Real Estate Investment Trust 8

    96.64     Korea   December   Funds
 

Pacific US BlackRock Private Placement Real Estate Fund Investment Trust No.15

    99.50     Korea   December   Funds
 

KTB Aircraft Private Investment Trust No.21-1

    99.61     Korea   December   Funds
 

Vestas Qualified Investors’ Private Real Estate Fund Investment Trust No. 38

    54.84     Korea   December   Funds
 

JB Dry Street Private Fund 1

    100.00     Korea   December   Funds
 

JB Australia108 Private Fund 1

    100.00     Korea   December   Funds
 

JB Forge Private Fund 1

    100.00     Korea   December   Funds
 

JB Hall Street Private Fund 1

    100.00     Korea   December   Funds
 

JB Margaret Street Private Fund 1

    100.00     Korea   December   Funds
 

GH Real Estate I LP

    81.00     Guernsey   December   Investment
 

Alpha Spain Real Estate Private Investment Trust 1

    99.85     Korea   December   Funds

 

9


Table of Contents

KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021 and 2020

 

 

   

2021

Investor

 

Investee

  Percentage of
ownership (%)
   

Location

 

Date of
financial
statements

 

Industry

 

Hanwha US Equity StrategyPrivate Real Estate Fund 3

    99.95     Korea   December   Funds
 

MS Sejong 4th Co.,Ltd 1

    —       Korea   December   Asset-backed securitization
 

KB UK Center 1st Co.,Ltd. 1

    —       Korea   December   Asset-backed securitization
 

Able Gwonseon 1st Co., Ltd. 1

    —       Korea   December   Asset-backed securitization
 

AJH 3rd Co., Ltd. 1

    —       Korea   December   Asset-backed securitization
 

Paradise Yeongjong 2nd Co., Ltd. 1

    —       Korea   December   Asset-backed securitization
 

Newstar IP Co., Ltd. 1

    —       Korea   December   Asset-backed securitization
 

Enewstay 1st Co.,Ltd. 1

    —       Korea   December   Asset-backed securitization
 

Newstar Panorama 1st Co., Ltd. 1

    —       Korea   December   Asset-backed securitization
 

Newstar Papyrus Co., Ltd. 1

    —       Korea   December   Asset-backed securitization
 

SJ Jongno 1st Co., Ltd. 1

    —       Korea   December   Asset-backed securitization
 

Newstar DS 1st Co., Ltd 1

    —       Korea   December   Asset-backed securitization
 

Newstar DS 2nd Co., Ltd 1

    —       Korea   December   Asset-backed securitization
 

Able Gamsam 1st Co.,Ltd. 1

    —       Korea   December   Asset-backed securitization
 

Songdo PFive 2nd Co., Ltd 1

    —       Korea   December   Asset-backed securitization
 

Newstar Gimpo 1st Co., Ltd 1

    —       Korea   December   Asset-backed securitization
 

Polar EH 1st Co., Ltd 1

    —       Korea   December   Asset-backed securitization
 

Polar EH 2nd Co., Ltd 1

    —       Korea   December   Asset-backed securitization
 

Able Gongpyeong 1st Co.,Ltd 1

    —       Korea   December   Asset-backed securitization
 

Able Chowall 1st Co., Ltd. 1

    —       Korea   December   Asset-backed securitization
 

FN Gasan 1st Co., Ltd. 1

    —       Korea   December   Asset-backed securitization
 

ABR Mareuk 1st Co.,Ltd 1

    —       Korea   December   Asset-backed securitization
 

Newstar Believe Co., Ltd. 1

    —       Korea   December   Asset-backed securitization
 

Able Electronics 1st Co., Ltd. 1

    —       Korea   December   Asset-backed securitization
 

KB Echo 1st Co., Ltd 1

    —       Korea   December   Asset-backed securitization
 

ABR Joongang2 1st Co.,Ltd 1

    —       Korea   December   Asset-backed securitization
 

KB Tongyoung 1st Co., Ltd 1

    —       Korea   December   Asset-backed securitization
 

Able Guwol 1st Co., Ltd. 1

    —       Korea   December   Asset-backed securitization
 

Able Sky 1st Co., Ltd. 1

    —       Korea   December   Asset-backed securitization
 

Newstar Gimpo 2nd Co.,Ltd. 1

    —       Korea   December   Asset-backed securitization
 

Able Hyosung 1st Co., Ltd. 1

    —       Korea   December   Asset-backed securitization
 

Able Poongdong 1st Co., Ltd. 1

    —       Korea   December   Asset-backed securitization
 

Able Sewoon Co., Ltd. 1

    —       Korea   December   Asset-backed securitization
 

KB Infra 1st Co., Ltd. 1

    —       Korea   December   Asset-backed securitization

 

10


Table of Contents

KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021 and 2020

 

 

   

2021

Investor

 

Investee

  Percentage of
ownership (%)
   

Location

 

Date of
financial
statements

 

Industry

  Intgreen 1st Inc. 1     —       Korea   December   Asset-backed securitization
  Able Gasan 1st Co., Ltd. 1     —       Korea   December   Asset-backed securitization
  Able Pocheon 1st Co., Ltd. 1     —       Korea   December   Asset-backed securitization
  Newstar Seotan Co.,Ltd. 1     —       Korea   December   Asset-backed securitization
  Able PT 1st Co., Ltd 1     —       Korea   December   Asset-backed securitization
  Unbroken 1st co.ltd 1     —       Korea   December   Asset-backed securitization
  JOSH Bujeon 1st Co.,Ltd. 1     —       Korea   December   Asset-backed securitization
  Newstar Plus1st Co.,Ltd. 1     —       Korea   December   Asset-backed securitization
  KB MyeongJi 1st Co.,Ltd. 1     —       Korea   December   Asset-backed securitization
  Able Dangjin 1st Co.,Ltd. 1     —       Korea   December   Asset-backed securitization
  Able Yongdap 1st Co., Ltd. 1     —       Korea   December   Asset-backed securitization
  KB Osansegyo 2nd Co.,Ltd. 1     —       Korea   December   Asset-backed securitization
  Able Hyeongok Co.,Ltd. 1     —       Korea   December   Asset-backed securitization
  KB Mapo 2nd Co.,Ltd. 1     —       Korea   December   Asset-backed securitization
  GDIC 1st co.ltd 1     —       Korea   December   Asset-backed securitization
  Able Wonchang 1st Co., Ltd. 1     —       Korea   December   Asset-backed securitization
  Zitaress 1st Co., Ltd. 1     —       Korea   December   Asset-backed securitization
  KB PF 3rd Co.,Ltd. 1     —       Korea   December   Asset-backed securitization
  Able Beomeo-one Co., Ltd. 1     —       Korea   December   Asset-backed securitization
  Able Yucheon 1st co.ltd 1     —       Korea   December   Asset-backed securitization
  KB Infra 2nd Co., Ltd. 1     —       Korea   December   Asset-backed securitization
  KBillite 1st Co.,Ltd. 1     —       Korea   December   Asset-backed securitization
  Newstar Sina Co., Ltd. 1     —       Korea   December   Asset-backed securitization
  KB Gold 1st Co.,Ltd. 1     —       Korea   December   Asset-backed securitization
  Inspire Gold 1st Co., Ltd. 1     —       Korea   December   Asset-backed securitization
  Inspire Gold 2nd Co., Ltd. 1     —       Korea   December   Asset-backed securitization
 

Able MK 1st co.ltd 1

    —       Korea   December   Asset-backed securitization
 

Yeoksam The Gallery KB 1st Co., Ltd. 1

    —       Korea   December   Asset-backed securitization
 

Y Three Ulsan Sinjeong 1st Co., Ltd. 1

    —       Korea   December   Asset-backed securitization
 

Mangrove Feeder Fund

    92.88     Cayman Islands   December   Funds

The parent Company and others

 

LB UK Private Real Estate Investment Trust No.18

    100.00     Korea   December   Funds
 

LB UK Private Real Estate Investment Trust No.19

    100.00     Korea   December   Funds

Mangrove Feeder Fund

 

Mangrove Master Fund

    100.00     Cayman Islands   December   Funds

KB Securities Hong Kong Ltd.

 

Global Investment Opportunity Limited

    100.00     Malaysia   December   Financial & real-estate

 

11


Table of Contents

KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021 and 2020

 

 

   

2021

Investor

 

Investee

  Percentage of
ownership (%)
   

Location

 

Date of
financial
statements

 

Industry

LB Ireland Private Real Estate Investment Trust 8

 

Beckett Acquisition Limited

    100.00     Ireland   December   Real-estate Investment

SJ Jongno 1st Co., Ltd.

 

KB Wise Star Real Estate Feeder Fund 2

    59.86     Korea   December   Funds

KB Wise Star Real Estate Feeder Fund 2

 

KB Wise Star Jongno Tower Real Estate Master Fund

    63.27     Korea   December   Funds

JB New Jersey Private Real Estate Fund 1

 

Able NJ DSM Investment REIT

    99.18     USA   December   Real-estate Investment

Able NJ DSM Investment REIT

 

ABLE NJ DSM, LLC

    100.00     USA   December   Real-estate Investment

Vestas Qualified Investors’ Private Real Estate Fund Investment Trust No. 38

 

Lumen International Developments

    100.00     Luxemburg   December   Real-estate Investment

Lumen International Developments

 

VREF Shaftesbury ScSp

    100.00     Luxemburg   December   Real-estate Investment

LB UK Private Real Estate Investment Trust No.18 and others

 

Hillswood Finco Ltd.

    100.00     Jersey   December   Real-estate Investment
 

Hillswood Holdings Ltd.

    100.00     Jersey   December   Real-estate Investment
 

Hillswood Holding Property Unit Trust

    100.00     Jersey   December   Real-estate Investment

Hillswood Holding Property Unit Trust and others

 

Hillswood Property Unit Trust

    100.00     Jersey   December   Real-estate Investment

Hanwha US Equity Strategy Private Real Estate Fund 3

 

498 Seventh KOR Holdco LP

    100.00     USA   December   Real-estate Investment

498 Seventh KOR Holdco LP

 

498 Seventh KOR LLC

    100.00     USA   December   Real-estate Investment

Polar EH 1st Co., Ltd and Others

 

Multiasset PR Private Fund 4

    100.00     Korea   December   Funds

 

1 

The Group has a substantive power over the special purpose entities (“SPEs”) or investment trusts and is exposed to variable returns. Accordingly, these SPEs and investment trusts are included in subsidiaries although the Group’s ownership is less than 50%.

 

   

2020

Investor

 

Investee

  Percentage of
ownership (%)
   

Location

 

Date of
financial
statements

 

Industry

The Parent Company

 

KBFG Securities America Inc.

    100.00     USA   December   Investment, advisory
 

KB Securities Hong Kong Ltd.

    100.00     Hong Kong   December   Investment, advisory
 

KB Securities Vietnam Joint Stock Company

    99.70     Vietnam   December   Investment, advisory
 

KB FINA Joint Stock Company

    100.00     Vietnam   December   IT(Fintech)
 

KB Digital Innovation&growth New Technology Business Investment Fund 1

    20.00     Korea   December   Other financial
 

KB Pre-IPO 2nd (TCB) NewTechnology Business InvestmentFund1

    42.86     Korea   December   Other financial
 

Hyundai Dynamic Mix Securities Feeder Investment Trust 1

    100.00     Korea   December   Funds
 

Hyundai Kon-tiki Specialized Privately Placed Fund 1

    82.06     Korea   December   Funds
 

JB New Jersey Private Real Estate Fund 1

    98.15     Korea   December   Funds
 

Heungkuk Global Highclass Private Real Estate Trust 23

    100.00     Korea   December   Funds
 

DGB Qualified Investor Private Real Estate Investment Trust No.8

    98.77     Korea   December   Funds
 

LB Ireland Private Real Estate Investment Trust 8

    96.64     Korea   December   Funds

 

12


Table of Contents

KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021 and 2020

 

 

   

2020

Investor

 

Investee

  Percentage of
ownership (%)
   

Location

 

Date of

financial

statements

 

Industry

 

Pacific US BlackRock Private Placement Real Estate Fund Investment Trust No. 15

    99.50     Korea   December   Funds
 

KTB Aircraft Private Investment Trust No.21-1

    99.61     Korea   December   Funds
 

Vestas Qualified Investors’ Private Real Estate Fund Investment Trust No. 38

    54.84     Korea   December   Funds
 

Aquila Global Real Assets Fund No.1 LP

    99.96     Cayman Islands   December   Funds
 

JB Dry Street Private Fund 1

    100.00     Korea   December   Funds
 

JB Australia108 Private Fund 1

    100.00     Korea   December   Funds
 

JB Forge Private Fund 1

    100.00     Korea   December   Funds
 

JB Hall Street Private Fund 1

    100.00     Korea   December   Funds
 

JB Margaret Street Private Fund 1

    100.00     Korea   December   Funds
 

GH Real Estate I LP

    81.00     Guernsey   December   Investment
 

Alpha Spain Real Estate Private Investment Trust 1

    99.85     Korea   December   Funds
 

Hangang Domestic Private Real Estate Fund No.14

    99.45     Korea   December   Funds
 

MS Sejong 4th Co., Ltd 1

    —       Korea   December   Asset-backed securitization
 

Able Hana Co., Ltd. 1

    —       Korea   December   Asset-backed securitization
 

KB UK Center 1st Co., Ltd. 1

    —       Korea   December   Asset-backed securitization
 

AKB 1st Co., Ltd. 1

    —       Korea   December   Asset-backed securitization
 

Crescendo Muju Co., Ltd. 1

    —       Korea   December   Asset-backed securitization
 

Able Gwonseon 1st Co., Ltd. 1

    —       Korea   December   Asset-backed securitization
 

Great GM 12th Co., Ltd. 1

    —       Korea   December   Asset-backed securitization
 

AJH 3rd Co., Ltd. 1

    —       Korea   December   Asset-backed securitization
 

Able Youto 1st Co., Ltd. 1

    —       Korea   December   Asset-backed securitization
 

Paradise Yeongjong 2nd Co., Ltd. 1

    —       Korea   December   Asset-backed securitization
 

Newstar Hakgok Co., Ltd. 1

    —       Korea   December   Asset-backed securitization
 

Songdo PSeven 1st Co., Ltd. 1

    —       Korea   December   Asset-backed securitization
 

Newstar Janghyun Co., Ltd. 1

    —       Korea   December   Asset-backed securitization
 

Newstar SH Co., Ltd. 1

    —       Korea   December   Asset-backed securitization
 

Newstar IP Co., Ltd. 1

    —       Korea   December   Asset-backed securitization
 

Newstar Daerim Co., Ltd. 1

    —       Korea   December   Asset-backed securitization
 

Enewstay 1st Co., Ltd. 1

    —       Korea   December   Asset-backed securitization
 

Able Dangsan Co., Ltd. 1

    —       Korea   December   Asset-backed securitization
 

Newstar Panorama 1st Co., Ltd. 1

    —       Korea   December   Asset-backed securitization
 

Newstar Papyrus Co., Ltd. 1

    —       Korea   December   Asset-backed securitization
 

SJ Jongno 1st Co., Ltd. 1

    —       Korea   December   Asset-backed securitization
 

Newstar Cheonwon Co., Ltd 1

    —       Korea   December   Asset-backed securitization

 

13


Table of Contents

KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021 and 2020

 

 

   

2020

Investor

 

Investee

  Percentage of
ownership (%)
   

Location

 

Date of

financial

statements

 

Industry

 

Able KD 2nd Co., Ltd. 1

    —       Korea   December   Asset-backed securitization
 

Newstar DS 1st Co., Ltd 1

    —       Korea   December   Asset-backed securitization
 

Newstar DS 2nd Co., Ltd 1

    —       Korea   December   Asset-backed securitization
 

Able Yongin 1st Co., Ltd 1

    —       Korea   December   Asset-backed securitization
 

Newstar Wanee 1st Co., Ltd. 1

    —       Korea   December   Asset-backed securitization
 

Able Gamsam 1st Co., Ltd. 1

    —       Korea   December   Asset-backed securitization
 

Songdo PFive 2nd Co., Ltd 1

    —       Korea   December   Asset-backed securitization
 

Able Sungnae 1st Co., Ltd. 1

    —       Korea   December   Asset-backed securitization
 

Newstar Gimpo 1st Co., Ltd 1

    —       Korea   December   Asset-backed securitization
 

Able Ali 2nd Co., Ltd1

    —       Korea   December   Asset-backed securitization
 

KB PF 1st Co., Ltd. 1

    —       Korea   December   Asset-backed securitization
 

Able Daepo 1st Co., Ltd. 1

    —       Korea   December   Asset-backed securitization
 

KB Ansung 1st Co., Ltd1

    —       Korea   December   Asset-backed securitization
 

Polar EH 1st Co., Ltd1

    —       Korea   December   Asset-backed securitization
 

Polar EH 2nd Co., Ltd1

    —       Korea   December   Asset-backed securitization
 

Polar SQ 1st Co., Ltd1

    —       Korea   December   Asset-backed securitization
 

Polar SQ 2nd Co., Ltd1

    —       Korea   December   Asset-backed securitization
 

Able Mojong 1st Co., Ltd1

    —       Korea   December   Asset-backed securitization
 

Able Sungsoo 1st Co., Ltd. 1

    —       Korea   December   Asset-backed securitization
 

Able Daenong Co., Ltd. 1

    —       Korea   December   Asset-backed securitization
 

Newstar Chimsan 1st Co., Ltd. 1

    —       Korea   December   Asset-backed securitization
 

Able Forsythia 1st Co., Ltd. 1

    —       Korea   December   Asset-backed securitization
 

Able IFP 1st Co., Ltd. 1

    —       Korea   December   Asset-backed securitization
 

Newstar JY Co., Ltd. 1

    —       Korea   December   Asset-backed securitization
 

Able Gorim 1st Co., Ltd. 1

    —       Korea   December   Asset-backed securitization
 

KB Asan Baebang 1st Co., Ltd1

    —       Korea   December   Asset-backed securitization
 

KB Icheon logistics 1st Co., Ltd1

    —       Korea   December   Asset-backed securitization
 

Able Unicity 4th Co., Ltd1

    —       Korea   December   Asset-backed securitization
 

Able Gongpyeong 1st Co., Ltd1

    —       Korea   December   Asset-backed securitization
 

Hamilton Power First Co., Ltd1

    —       Korea   December   Asset-backed securitization
 

Able Chowall 1st Co., Ltd. 1

    —       Korea   December   Asset-backed securitization
 

Startwithone Co., Ltd. 1

    —       Korea   December   Asset-backed securitization
 

Able Silver Co., Ltd. 1

    —       Korea   December   Asset-backed securitization
 

KB Osansaegyo Co., Ltd1

    —       Korea   December   Asset-backed securitization
 

Hd Yongin 1st Co., Ltd1

    —       Korea   December   Asset-backed securitization
 

FN Gasan 1st Co., Ltd. 1

    —       Korea   December   Asset-backed securitization

 

14


Table of Contents

KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021 and 2020

 

 

   

2020

Investor

 

Investee

  Percentage of
ownership (%)
   

Location

 

Date of

financial

statements

 

Industry

 

ABR Mareuk 1st Co., Ltd1

    —       Korea   December   Asset-backed securitization
 

Newstarbelieve Co., Ltd.1

    —       Korea   December   Asset-backed securitization
 

Able Electronics 1st Co., Ltd. 1

    —       Korea   December   Asset-backed securitization
 

KB Echo 1st Co., Ltd1

    —       Korea   December   Asset-backed securitization
 

KB Wondong 1st Co., Ltd1

    —       Korea   December   Asset-backed securitization
 

Newstar Joongbong Co., Ltd. 1

    —       Korea   December   Asset-backed securitization
 

Able Island 1st Co., Ltd1

    —       Korea   December   Asset-backed securitization
 

Able Gumi 1st Co., Ltd. 1

    —       Korea   December   Asset-backed securitization
 

Able Gwangmyeong 2nd Co., Ltd1

    —       Korea   December   Asset-backed securitization
 

ABR Joongang2 1st Co., Ltd1

    —       Korea   December   Asset-backed securitization
 

Able Bucheon Co., Ltd. 1

    —       Korea   December   Asset-backed securitization
 

Newstar Kumo 1st Co., Ltd. 1

    —       Korea   December   Asset-backed securitization
 

KB Tongyoung 1st Co., Ltd1

    —       Korea   December   Asset-backed securitization
 

Able Seoho 1st Co., Ltd. 1

    —       Korea   December   Asset-backed securitization
 

KS Beta Co., Ltd. 1

    —       Korea   December   Asset-backed securitization
 

Mangrove Feeder Fund

    100.00     Cayman Islands   December   Funds

The Parent Company and Others

 

LB UK Private Real Estate Investment Trust No.18

    100.00     Korea   December   Funds
 

LB UK Private Real Estate Investment Trust No.19

    100.00     Korea   December   Funds

Mangrove Feeder Fund

 

Mangrove Master Fund

    100.00     Cayman Islands   December   Funds

KB Securities Hong Kong Ltd.

 

Global Investment Opportunity Limited

    100.00     Malaysia   December   Financial & real-estate investment

Hyundai Dynamic Mix Securities Feeder Investment Trust 1

 

Hyundai Dynamic Mix Securities Master Investment Trust

    99.30     Korea   December   Funds

LB Ireland Private Real Estate Investment Trust 8

 

Beckett Acquisition Limited

    100.00     Ireland   December   Real-estate Investment

SJ Jongno 1st Co., Ltd.

 

KB Wise Star Real Estate Feeder Fund 2

    59.69     Korea   December   Funds

KB Wise Star Real Estate Feeder Fund 2

 

KB Wise Star Jongno Tower Real Estate Master Fund

    63.27     Korea   December   Funds

Aquila Global Real Assets Fund No.1 LP

 

AGRAF Real Estate Holding No.1, Senningerberg

    100.00     Luxemburg   December   Asset-backed securitization

AGRAF Real Estate Holding No.1, Senningerberg

 

Vierte CasaLog GmbH & Co. KG

    100.00     Germany   December   Real-estate Investment

JB New Jersey Private Real Estate Fund 1

 

Able NJ DSM Investment REIT

    99.18     USA   December   Real-estate Investment

Able NJ DSM Investment REIT

 

ABLE NJ DSM, LLC

    100.00     USA   December   Real-estate Investment

Heungkuk Global Highclass Private Real Estate Trust 23

 

Hyundai Able Investment REIT

    99.90     USA   December   Real-estate Investment

Hyundai Able Investment REIT

 

Hyundai Able Patriots Park, LLC

    100.00     USA   December   Real-estate Investment

 

15


Table of Contents

KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021 and 2020

 

 

   

2020

Investor

 

Investee

  Percentage of
ownership (%)
   

Location

 

Date of
financial
statements

 

Industry

Vestas Qualified Investors’ Private Real Estate Fund Investment Trust No. 38

  Lumen International Developments     100.00     Luxemburg   December   Real-estate Investment

Lumen International Developments

  VREF Shaftesbury ScSp     100.00     Luxemburg   December   Real-estate Investment

LB UK Private Real Estate Investment Trust No.18 and others

  Hillswood Finco Ltd.     100.00     Jersey   December   Real-estate Investment

LB UK Private Real Estate Investment Trust No.18 and others

  Hillswood Holdings Ltd.     100.00     Jersey   December   Real-estate Investment

LB UK Private Real Estate Investment Trust No.18 and others

 

Hillswood Holding Property Unit Trust

    100.00     Jersey   December   Real-estate Investment

Hillswood Holding Property Unit Trust and others

  Hillswood Property Unit Trust     100.00     Jersey   December   Real-estate Investment

Polar EH 1st Co., Ltd and Others

  Multiasset PR Private Fund 3     100.00     Korea   December   Funds

Polar SQ 1st Co., Ltd and Others

  Multiasset PR Private Fund 4     100.00     Korea   December   Funds

 

1 

The Group has a substantive power over the special purpose entities (“SPEs”) or investment trusts and is exposed to variable returns. Accordingly, these SPEs and investment trusts are included in subsidiaries although the Group’s ownership is less than 50%.

Summarized financial information of major subsidiaries as at and for the years ended December 31, 2021 and 2020, is as follows:

 

(in thousands of Korean won)    December 31, 2021      2021  

Name of subsidiary

   Assets      Liabilities      Operating
profit
     Profit (loss)
for the year
    Total
comprehensive
income(loss)
 

KBFG Securities America Inc.

     21,580,938        4,206,235        2,764,166        (346,673     1,099,379  

KB Securities Hong Kong Ltd.

     268,831,976        42,369,875        12,809,339        952,820       8,117,459  

KB Securities Vietnam Joint Stock Company

     459,400,541        264,703,900        48,674,216        11,562,680       22,854,982  

KB FINA Joint Stock Company

     14,703,822        40,048        132,397        (791,669     461,738  

Hyundai Dynamic Mix Securities Feeder Investment Trust 1 1

     —          —          623        1,776,805       1,776,805  

Hyundai Kon-tiki Specialized Privately Placed Fund 1 1

     —          —          105,752        102,481       102,481  

JB New Jersey Private Real Estate Fund 1

     17,280,644        13,210        8,780        1,366,923       1,366,923  

Heungkuk Global Highclass Private Real Estate Trust 23

     2,334,694        382        269,624        340,571       340,571  

DGB Qualified Investor Private Real Estate Investment Trust No.8

     7,096,984        4,039        416,708        384,386       384,386  

LB Ireland Private Real Estate Investment Trust 8

     71,323,756        3,815,738        4,276,418        3,735,362       3,690,262  

Aquila Global Real Assets Fund No.1 LP 1

     —          —          —          (36,818     (2,575,440

MS Sejong 4th Co.,Ltd

     1,982,145        2,300,224        3,048,532        2,483,249       2,483,249  

Able Hana Co., Ltd. 1

     —          —          —          —         —    

KB UK Center 1st Co., Ltd.

     12,832,231        12,320,000        748,451        15,595       15,595  

AKB 1st Co., Ltd. 1

     —          —          —          —         —    

Mangrove Feeder Fund

     78,341,942        835,822        6,375,067        4,799,816       10,737,381  

Mangrove Master Fund

     78,763,150        442,176        8,257,033        6,400,494       9,284,184  

GH Real Estate I LP

     26,701,788        736,468        —          (9,511,479     (9,321,938

Global Investment Opportunity Limited

     221,660        —          13        (17,637     46,411  

 

16


Table of Contents

KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021 and 2020

 

 

(in thousands of Korean won)    December 31, 2021      2021  

Name of subsidiary

   Assets      Liabilities      Operating
profit
     Profit (loss)
for the year
    Total
comprehensive
income(loss)
 

Hyundai Dynamic Mix Securities Master Investment Trust 1 1

     —          —          1,334,540        662,176       662,176  

Beckett Acquisition Limited

     147,825,721        139,715,758        6,225,571        (1,598,561     (1,549,839

AGRAF Real Estate Holding No.1, Senningerberg 1

     —          —          —          (7,091     (302,872

Vierte CasaLog GmbH & Co. KG 1

     —          —          —          (1,474     7,968  

Able NJ DSM Investment REIT

     18,024,689        93,207        451        1,319,458       2,811,740  

ABLE NJ DSM, LLC

     33,998,186        32,699,331        3,366,644        368,253       536,964  

Hyundai Able Investment REIT 1

     —          —          —          (59,279     (14,347,711

Hyundai Able Patriots Park, LLC 1

     —          —          13,446        (609,596     (13,931,605

Pacific US BlackRock Private Placement Real Estate Fund Investment Trust No. 15

     18,833,391        1,122,501        2,573,430        444,171       444,171  

KTB Aircraft Private Investment Trust No.21-1

     27,792,980        1,005        3,861,535        1,781,831       1,781,831  

KB Digital Innovation&growth New Technology Business Investment Fund

     9,106,621        —          499,687        (173,987     (173,987

KB Pre-IPO 2nd (TCB) New Technology Business Investment Fund

     33,499,341        —          1,316,449        (1,474,661     (1,474,661

Crescendo Muju Co., Ltd. 1

     —          —          284,915        (109,840     (109,840

Able Gwonseon 1st Co., Ltd.

     32,779,838        32,968,244        1,377,937        (11,855     (11,855

Great GM 12th Co., Ltd. 1

     —          —          88,964        (49,171     (49,171

AJH 3rd Co., Ltd.

     10,110,238        9,699,103        652,509        384,693       384,693  

Able Youto 1st Co., Ltd. 1

     —          —          241,382        24,308       24,308  

Paradise Yeongjong 2nd Co., Ltd.

     18,947,086        20,224,283        713,825        96,773       96,773  

Newstar Hakgok Co., Ltd. 1

     —          —          83,725        (73,045     (73,045

Songdo PSeven 1st Co., Ltd. 1

     —          —          735,419        103,203       103,203  

Newstar Janghyun Co., Ltd. 1

     —          —          63,603        4,294       4,294  

Vestas Qualified Investors’ Private Real Estate Fund Investment Trust No. 38

     191,874,304        20,829,940        24,444,349        11,671,992       9,550,692  

Lumen International Developments

     187,921,665        169,411,650        —          (3,092,883     (1,621,941

VREF Shaftesbury ScSp

     417,474,574        256,829,371        15,588,207        (932,583     11,523,839  

Alpha Spain Real Estate Private Investment Trust 1

     70,314,496        699,149        6,513,674        3,779,385       3,779,385  

Hangang Domestic Private Real Estate Fund No.14 1

     —          —          3,073,203        2,930,614       2,930,614  

Pacific Bric Professional Investors’ Private Real Estate Fund #53 1

     —          —          306,611        (3,387,196     (3,387,196

Newstar SH Co., Ltd. 1

     —          —          —          —         —    

Newstar IP Co., Ltd.

     57,759,138        51,058,792        9,949,392        7,902,486       7,902,486  

Newstar Daerim Co., Ltd. 1

     —          —          —          —         —    

Enewstay 1st Co., Ltd.

     33,891,253        25,602,225        6,195,490        4,598,576       4,598,576  

Able Dangsan Co., Ltd. 1

     —          —          516,589        146,735       146,735  

Newstar Panorama 1st Co., Ltd.

     11,737,029        11,058,494        1,815,003        (146,738     (146,738

Newstar Papyrus Co., Ltd.

     23,623,123        24,136,636        3,488,162        194,277       194,277  

SJ Jongno 1st Co., Ltd.

     66,995,875        70,000,315        243        (452,638     (452,638

KB Wise Star Real Estate Feeder Fund 2

     112,043,149        155,695        164        366,559       366,559  

Newstar Cheonwon Co., Ltd 1

     —          —          142,977        49,106       49,106  

Able KD 2nd Co., Ltd. 1

     —          —          79,490        9,548       9,548  

KB Wise Star Jongno Tower Real Estate Master Fund

     506,092,706        343,917,362        25,784,666        4,169,466       4,169,466  

Newstar DS 1st Co., Ltd

     15,650,452        15,459,429        825,274        47,314       47,314  

Newstar DS 2nd Co., Ltd

     39,084,153        38,559,691        2,755,661        874,314       874,314  

Able Yongin 1st Co., Ltd 1

     —          —          637,515        (333,931     (333,931

JB Dry Street Private Fund1

     810,359        9,331        18,168        (183,979     (183,979

JB Australia108 Private Fund1

     569,525        3,559        22,681        (118,023     (118,023

 

17


Table of Contents

KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021 and 2020

 

 

(in thousands of Korean won)    December 31, 2021      2021  

Name of subsidiary

   Assets      Liabilities      Operating
profit
     Profit (loss)
for the year
    Total
comprehensive
income(loss)
 

JB Forge Private Fund1

     400,525        2,890        22,234        (91,765     (91,765

JB Hall Street Private Fund1

     752,539        3,212        16,937        (169,292     (169,292

JB Margaret Street Private Fund1

     213,009        713        4,785        (48,065     (48,065

LB UK Private Real Estate Investment Trust No.18

     33,865,289        1,435,798        756,376        1,074,466       (193,840

LB UK Private Real Estate Investment Trust No.19

     10,781,038        520,304        704,364        341,262       (62,572

Hillswood Finco Ltd.

     14,601,547        28,965        1,172,915        1,115,585       1,964,926  

Hillswood Holdings Ltd.

     800,128        51,390        —          46,376       90,083  

Hillswood Holding Property Unit Trust

     30,623,011        7,302        —          2,314,470       4,119,977  

Hillswood Property Unit Trust

     101,477,561        74,903,616        10,286,987        3,182,999       3,328,330  

Hanwha US Equity Strategy Private Real Estate Fund 3

     177,311,233        8,216,449        1,194,090        (2,653,191     (10,493,191

498 Seventh KOR Holdco LP

     175,275,036        —          —          3,482,029       9,445,146  

498 Seventh KOR LLC

     174,675,770        —          —          3,439,624       9,260,088  

Newstar Wanee 1st Co., Ltd. 1

     —          —          80,433        6,137       6,137  

Able Gamsam 1st Co., Ltd.

     41,137,786        41,061,686        1,869,333        157,804       157,804  

Songdo PFive 2nd Co., Ltd

     120,732,282        119,433,425        3,427,099        (148,924     (148,924

Able Sungnae 1st Co., Ltd. 1

     —          —          166,500        11,720       11,720  

Newstar Gimpo 1st Co., Ltd

     26,487,012        26,550,765        1,297,627        (493,592     (493,592

Able Ali 2nd Co., Ltd 1

     —          —          334,739        76,137       76,137  

KB PF 1st Co., Ltd. 1

     —          —          —          —         —    

Able Daepo 1st Co., Ltd. 1

     —          —          10,225        (10,756     (10,756

KB Ansung 1st Co., Ltd 1

     —          —          841,784        625,535       625,535  

Polar EH 1st Co., Ltd

     17,283,232        16,715,582        —          (30,553     (30,553

Polar EH 2nd Co., Ltd

     17,611,212        16,700,829        —          293,964       293,964  

Polar SQ 1st Co., Ltd 1

     —          —          —          —         —    

Polar SQ 2nd Co., Ltd 1

     —          —          —          —         —    

Able Mojong 1st Co., Ltd 1

     —          —          378,965        14,531       14,531  

Able Sungsoo 1st Co., Ltd. 1

     —          —          —          —         —    

Multiasset PR Private Fund 3 1

     —          —          —          —         —    

Multiasset PR Private Fund 4

     33,070,238        7,823        2,472,127        2,310,401       2,310,401  

Able Daenong Co., Ltd. 1

     —          —          650,042        502,386       502,386  

Newstar Chimsan 1st Co., Ltd. 1

     —          —          63,468        39,690       39,690  

Able Forsythia 1st Co., Ltd. 1

     —          —          148,431        (217     (217

Able IFP 1st Co., Ltd. 1

     —          —          —          —         —    

Newstar JY Co., Ltd. 1

     —          —          —          —         —    

Able Gorim 1st Co., Ltd. 1

     —          —          562,999        (216,354     (216,354

KB Asan Baebang 1st Co., Ltd 1

     —          —          275,164        (11,642     (11,642

KB Icheon logistics 1st Co., Ltd 1

     —          —          926,169        186,398       186,398  

Able Unicity 4th Co., Ltd 1

     —          —          219,123        15,162       15,162  

Able Gongpyeong 1st Co., Ltd

     12,385,645        12,293,780        489,653        100,623       100,623  

Hamilton Power First Co., Ltd 1

     —          —          —          —         —    

Able Chowall 1st Co., Ltd.

     30,315,210        30,530,637        867,342        (371,278     (371,278

Startwithone Co., Ltd. 1

     —          —          —          —         —    

Able Silver Co., Ltd. 1

     —          —          —          —         —    

KB Osansaegyo Co., Ltd 1

     —          —          1,277,375        317,179       317,179  

HD Yongin 1st Co., Ltd 1

     —          —          —          —         —    

FN Gasan 1st Co., Ltd.

     5,613,186        5,615,094        271,985        23,350       23,350  

ABR Mareuk 1st Co., Ltd

     5,726,164        5,771,880        323,057        (33,590     (33,590

Newstar Believe Co., Ltd.

     5,094,388        5,358,236        300,674        (78,470     (78,470

Able Electronics 1st Co., Ltd.

     70,918,879        70,743,905        2,906,579        501,688       501,688  

KB Echo 1st Co., Ltd

     31,945,662        31,709,287        825,673        99,261       99,261  

KB Wondong 1st Co., Ltd 1

     —          —          —          —         —    

Newstar Joongbong Co., Ltd. 1

     —          —          —          —         —    

 

18


Table of Contents

KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021 and 2020

 

 

(in thousands of Korean won)    December 31, 2021      2021  

Name of subsidiary

   Assets      Liabilities      Operating
profit
     Profit (loss)
for the year
    Total
comprehensive
income(loss)
 

Able Island 1st Co., Ltd 1

     —          —          —          —         —    

Able Gumi 1st Co., Ltd. 1

     —          —          —          —         —    

Able Gwangmyeong 2nd Co., Ltd 1

     —          —          —          —         —    

ABR Joongang2 1st Co., Ltd

     17,317,313        17,200,000        669,187        33,369       33,369  

Able Bucheon Co., Ltd. 1

     —          —          —          —         —    

Newstar Kumo 1st Co., Ltd. 1

     —          —          130,911        (90,714     (90,714

KB Tongyoung 1st Co., Ltd

     22,993,998        23,238,024        1,116,564        (74,534     (74,534

Able Seoho 1st Co., Ltd. 1

     —          —          751,975        200,137       200,137  

KS Beta Co., Ltd. 1

     —          —          247,812        (423,157     (423,157

Able Guwol 1st Co., Ltd.

     42,548,129        42,708,587        3,452,641        (160,459     (160,459

Able Bukcheonan logis Co,. Ltd. 1

     —          —          109,195        (36,105     (36,105

ABR Sosa 1st Co., Ltd. 1

     —          —          284,549        4,731       4,731  

Able Sky 1st Co., Ltd.

     26,887,526        27,350,210        1,236,493        (462,685     (462,685

Newstar Gimpo 2nd Co., Ltd.

     12,922,823        12,583,875        643,724        338,948       338,948  

Able HD 1st Co., Ltd. 1

     —          —          745,078        (104,167     (104,167

Able Eumsung 1st Co., Ltd. 1

     —          —          175,342        (1,034,305     (1,034,305

Able Jinjeop 1st Co., Ltd. 1

     —          —          516,497        1,143       1,143  

Able Hyosung 1st Co., Ltd.

     41,042,856        41,157,513        4,504,061        (114,657     (114,657

Able Poongdong 1st Co., Ltd.

     4,317,224        4,335,090        1,263,346        (17,867     (17,867

Able Ansan Logistics 1st Co., Ltd. 1

     —          —          654,753        (66,114     (66,114

Able Sewoon Co., Ltd.

     48,749,772        49,868,038        2,672,645        (1,118,267     (1,118,267

Newstar Sinchun 1st Co., Ltd. 1

     —          —          1,395,945        (1,214,862     (1,214,862

Songam Park Development Co., Ltd. 1

     —          —          989,226        (806,250     (806,250

KB Infra 1st Co., Ltd.

     12,303,652        12,076,752        883,940        226,899       226,899  

Pinetridavil Co., Ltd. 1

     —          —          52,515        (41,987     (41,987

Able Udong 1st Co., Ltd. 1

     —          —          346,093        (160,092     (160,092

Intgreen 1st Inc.

     47,999,345        48,660,080        3,721,145        (660,736     (660,736

Able Gasan 1st Co., Ltd.

     37,445,837        37,495,224        779,336        (49,397     (49,397

Able Pocheon 1st Co., Ltd.

     12,433,033        12,386,939        767,388        46,084       46,084  

Able HD 1st co.ltd 1

     —          —          182,154        (6,593     (6,593

Newstar Seotan Co., Ltd.

     25,453,253        25,244,391        909,922        208,861       208,861  

Able PT 1st Co., Ltd

     5,320,918        5,479,961        235,449        (159,043     (159,043

Unbroken 1st co.ltd

     30,139,281        30,594,090        1,444,316        (454,818     (454,818

JOSH Bujeon 1st Co., Ltd.

     43,824,332        44,414,622        2,162,798        (590,291     (590,291

Newstar Plus1st Co., Ltd.

     16,291,848        16,000,000        983,294        291,847       291,847  

KB MyeongJi 1st Co., Ltd.

     20,274,550        20,227,645        1,010,483        46,904       46,904  

Able Dangjin 1st Co., Ltd.

     4,816,012        4,900,184        213,318        (84,173     (84,173

Able Yongdap 1st Co., Ltd.

     29,400,401        29,472,471        419,921        (72,071     (72,071

Newstar Cold Co., Ltd. 1

     —          —          680,990        33,877       33,877  

Betares Co., Ltd. 1

     —          —          25,957        (51,103     (51,103

KB Osansegyo 2nd Co., Ltd.

     8,783,276        8,803,570        94,489        (20,295     (20,295

Able Hyeongok Co., Ltd.

     40,810,870        40,874,717        437,768        (63,847     (63,847

KB Mapo 1st Co., Ltd. 1

     —          —          129,548        (175,522     (175,522

KB Mapo 2nd Co., Ltd.

     10,226,260        10,106,541        607,135        119,718       119,718  

GDIC 1st co.ltd

     39,725,004        40,141,819        379,002        (416,816     (416,816

Able Wonchang 1st Co., Ltd.

     6,922,644        7,149,163        242,590        (226,520     (226,520

Zitaress 1st Co., Ltd.

     120,820,787        121,553,173        1,429,381        (732,387     (732,387

KB PF 3rd Co., Ltd.

     4,563,969        4,572,360        58,149        (8,391     (8,391

Able Beomeo-one Co., Ltd.

     30,299,257        30,364,248        917,194        (65,001     (65,001

Able UC 1st co.ltd

     61,068,251        62,074,292        1,543,816        (1,006,051     (1,006,051

KB Infra 2nd Co., Ltd.

     54,638,508        56,774,000        3        (2,135,493     (2,135,493

KBillite 1st Co., Ltd.

     407,670        445,261        4,706        (37,591     (37,591

Newstar Sina Co., Ltd.

     23,631,797        24,000,954        391,866        (369,158     (369,158

KB Gold 1st Co., Ltd.

     17,837,500        17,798,070        176,400        39,420       39,420  

 

19


Table of Contents

KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021 and 2020

 

 

(in thousands of Korean won)    December 31, 2021      2021  

Name of subsidiary

   Assets      Liabilities      Operating
profit
     Profit (loss)
for the year
    Total
comprehensive
income(loss)
 

Inspire Gold 1st Co., Ltd.

       24,066,879          24,707,879             200,902            (641,001     (641,001

Inspire Gold 2nd Co., Ltd.

     15,646,996        15,941,709        193,834        (294,714     (294,714

Able MK 1st co. ltd

     16,095,465        16,134,601        47,695        (39,137     (39,137

Yeoksam The Gallery KB 1st Co., Ltd.

     18,689,485        18,711,272        25,547        (21,797     (21,797

Y Three Ulsan Sinjeong 1st Co., Ltd.

     60,232,975        60,507,108        54,968        (274,136     (274,136

 

1 

The company is excluded from subsidiaries as at December 31, 2021.

 

(in thousands of Korean won)    December 31, 2020      2020  

Name of subsidiary

   Assets      Liabilities      Operating
profit
     Profit (loss)
for the year
    Total
comprehensive
income(loss)
 

KBFG Securities America Inc.

     20,576,590        4,301,266        2,911,760        60,891       (984,391

KB Securities Hong Kong Ltd.

     160,977,453        45,874,089        11,878,492        3,336,004       (3,555,472

KB Securities Vietnam Joint Stock Company

     283,011,455        180,399,517        33,232,587        8,459,269       2,008,002  

KB FINA Joint Stock Company

     10,880,100        —          —          —         (138,600

Hyundai Smart Index Alpha Derivative Feeder Trust 11

     —          —          321        (2,853     (2,853

Hyundai Strong Korea Equity Trust 11

     —          —          1,253        (28,206     (28,206

Hyundai Kidzania Equity Feeder Trust 1 1

     —          —          700        (2,674     (2,674

Hyundai Value Plus Equity Feeder Trust 11

     —          —          556        (15,214     (15,214

Hyundai Dynamic Mix Securities Feeder Investment Trust 1

     4,342,006        12,953        1,458        (68,419     (68,419

Hyundai Quant Long Short Securities Feeder Investment Trust 11

     —          —          —          (8,122     (8,122

Hyundai Kon-tiki Specialized Privately Placed Fund 1

     456,844        40        59        (89,302     (89,302

Hyundai Strong-small Corporate Trust 11

     —          —          3,580        (31,020     (31,020

Heungkuk Highclass Private Real Estate Trust 211

     —          —          1,778        2,946,469       2,946,469  

JB New Jersey Private Real Estate Fund 1

     16,888,544        12,033        1,823,420        1,611,079       1,637,119  

Heungkuk Global Highclass Private Real Estate Trust 23

     4,259,731        678        10,023,714        18,132,377       18,361,777  

DGB Qualified Investor Private Real Estate Investment Trust No.8

     7,468,429        4,380        436,772        404,651       404,651  

LB Ireland Private Real Estate Investment Trust 8

     71,245,673        2,840,102        5,193,836        3,485,453       3,036,543  

Aquila Global Real Assets Fund No.1 LP

     130,759        180,255        837,071        1,254,424       1,227,811  

MS Sejong 4th Co.,Ltd

     7,652,278        10,453,605        823,586        100,750       100,750  

Able NS Co., Ltd. 1

     —          —          3,553,037        2,836,681       2,836,681  

Able Hana Co., Ltd.

     15,454,991        15,391,561        1,257,025        193,360       193,360  

KB Park 1st Co., Ltd. 1

     —          —          1,229,919        (7,124     (7,124

SDW 2 Co.,Ltd. 1

     —          —          —          —         —    

Start3 Thefirst Co., Ltd1

     —          —          —          —         —    

KB UK Center 1st Co., Ltd.

     10,996,635        10,500,000        720,194        124,269       124,269  

AKB 1st Co.,Ltd.

     26,225,999        25,036,027        976,127        (433,587     (433,587

Newstar Jungbu 1st Co., Ltd. 1

     —          —          618,834        209,985       209,985  

Gaehwasanyeokgaebal 1st Co., Ltd. 1

     —          —          286,766        (2,732     (2,732

Newstar Gangneung 1st Co., Ltd. 1

     —          —          —          —         —    

 

20


Table of Contents

KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021 and 2020

 

 

(in thousands of Korean won)    December 31, 2020      2020  

Name of subsidiary

   Assets      Liabilities      Operating
profit
     Profit (loss)
for the year
    Total
comprehensive
income(loss)
 

Mangrove Feeder Fund

     61,883,735        102,396        6,067,328        4,773,247       719,701  

Mangrove Master Fund

     62,891,926        1,051,651        11,849,504        6,045,423       1,988,123  

GH Real Estate I LP

     35,736,330        441,140        —          (1,099,465     (1,376,195

Global Investment Opportunity Limited

     220,197        —          56        (17,297     (31,097

Hyundai Smart Index Alpha Derivative Master Trust 1

     —          —          161,558        (306,960     (306,960

Hyundai Value Plus Equity Master Trust 1

     —          —          355,327        (1,118,639     (1,118,639

Hyundai Dynamic Mix Securities Master Investment Trust

     6,404,772        7,882        2,635,361        1,367,723       1,367,723  

Hyundai Quant Long Short Securities Master Investment Trust1

     —          —          385,023        (161,719     (161,719

Hyundai Strong Korea Equity Master Trust 1

     —          —          1,034,968        (1,471,837     (1,471,837

Beckett Acquisition Limited

     149,603,733        139,675,256        6,135,285        (1,568,425     (1,187,090

AGRAF Real Estate No.1, Senningerberg1

        —          —          —         1,943  

AGRAF Real Estate Holding No.1, Senningerberg

     13,929,669        540,507        199,576        (46,400     384,091  

Vierte CasaLog GmbH & Co. KG

     59,913        3,823,391        359,857        348,974       313,568  

HD 1 Grundstucksgesellschaft MbH & Co. KG1

     —          —          —          —         (41,997

Sechste Casalog KG1

     —          —          —          —         (33,565

Able NJ DSM Investment REIT

     16,566,587        36,907        1,878,727        1,799,138       738,694  

ABLE NJ DSM, LLC

     32,179,308        30,010,014        3,471,467        (6,729,514     (6,707,644

Hyundai Able Investment REIT

     14,740,298        9,477        9,958,387        9,374,002       10,807,172  

Hyundai Able Patriots Park, LLC

     3,338,108        583,491        24,938,432        46,715,394       48,212,814  

Able Samgi Co., Ltd. 1

     —          —          2,731,258        (207,726     (207,726

Pacific US BlackRock Private Placement Real Estate Fund Investment Trust No. 15

     14,985,773        917        2,092,464        797,260       797,260  

KTB Aircraft Private Investment Trust No.21-1

     27,145,124        1,110        2,229,357        1,324,194       1,324,194  

KB Digital Innovation&growth New Technology Business Investment Fund

     6,781,713        1,106        198,586        (229,446     (229,446

KB Pre-IPO 2nd (TCB) New Technology Business Investment Fund

     8,724,002        —          623        (25,998     (25,998

Crescendo Muju Co., Ltd.

     20,206,449        20,382,241        1,067,065        (82,778     (82,778

Able Gwonseon 1st Co., Ltd.

     31,178,112        31,354,663        1,559,453        (120,465     (120,465

Great GM 12th Co., Ltd.

     13,159,214        13,194,513        641,772        (36,455     (36,455

Newstar SM No.1 Co., Ltd. 1

     —          —          221,213        (10,795     (10,795

AJH 1st Co., Ltd. 1

     —          —          —          —         —    

AJH 2nd Co., Ltd. 1

     —          —          525,084        76,853       76,853  

AJH 3rd Co., Ltd.

     10,930,349        10,903,907        636,089        5,774       5,774  

Able Youto 1st Co., Ltd.

     10,156,561        10,240,557        534,817        (11,626     (11,626

Paradise Yeongjong 2nd Co., Ltd.

     18,816,116        20,190,086        642,691        (1,340,798     (1,340,798

Newstar Hakgok Co., Ltd.

     4,492,609        4,540,704        198,439        (75,298     (75,298

Songdo PSeven 1st Co., Ltd.

     36,152,595        36,256,592        1,442,641        21,392       21,392  

Newstar Janghyun Co., Ltd.

     4,827,704        4,917,696        352,518        (43,577     (43,577

Vestas Qualified Investors’ Private Real Estate Fund Investment Trust No. 38

     177,754,046        7,240,407        14,092,288        5,436,331       6,089,551  

Lumen International Developments

     174,648,831        154,589,017        9,987,430        (1,203,677     (1,699,240

VREF Shaftesbury ScSp

     395,913,023        238,175,512        15,326,411        2,763,804       (1,124,227

 

21


Table of Contents

KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021 and 2020

 

 

(in thousands of Korean won)    December 31, 2020      2020  

Name of subsidiary

   Assets      Liabilities      Operating
profit
     Profit (loss)
for the year
    Total
comprehensive
income(loss)
 

Capstone US Private Investment Trust No. 61

     —          —          3,760,094        693,558       693,558  

Hyundai Strong-small Corporate Master Trust1

     —          —          2,676,405        (879,516     (879,516

Alpha Spain Real Estate Private Investment Trust 1

     67,428,000        2,526,707        6,703,476        3,400,500       3,400,500  

Hangang Domestic Private Real Estate Fund No.14

     55,262,052        38,418,009        5,226        (516,956     (516,956

YJS Ilsan Co., Ltd. 1

     —          —          387,625        (76,483     (76,483

Dongtan 1st Co., Ltd. 1

     —          —          101,102        41,082       41,082  

Newstar ENE Co., Ltd. 1

     —          —          637,921        (87,984     (87,984

Newstar SH Co., Ltd.

     30,164,416        30,328,926        1,403,589        (150,066     (150,066

Able Alri 1st Co., Ltd1

     —          —          —          —         —    

Newstar IP Co., Ltd.

     51,034,770        52,236,910        2,101,052        (1,346,392     (1,346,392

Newstar Daerim Co., Ltd.

     166,542        150,717        39,276        (47,039     (47,039

First Jongno 1st Co., Ltd. 1

     —          —          605,382        (64,392     (64,392

Enewstay 1st Co., Ltd.

     29,292,787        25,602,335        4,437,427        3,334,861       3,334,861  

Able Dangsan Co., Ltd.

     17,420,064        17,427,679        1,112,561        183,392       183,392  

Newstar Panorama 1st Co., Ltd.

     11,453,401        10,628,128        5,381,155        164,173       164,173  

Newstar Papyrus Co., Ltd.

     23,396,516        24,104,306        2,845,843        (789,195     (789,195

Able Daejang Co., Ltd.1

     —          —          991,862        (55,938     (55,938

KB Southgate Co., Ltd. 1

     —          —          445,616        30,013       30,013  

SJ Dream 1st Co., Ltd. 1

     —          —          645,568        (7,002     (7,002

Able Namyangju Co., Ltd. 1

     —          —          683,755        (55,215     (55,215

SJ Jongno 1st Co., Ltd.

     66,915,193        69,466,996        200        (411,589     (411,589

KB Wise Star Real Estate Feeder Fund 2

     111,994,886        153,682        50        (73,418     (73,418

APDC Co., Ltd. 1

     —          —          5,874,026        5,349,098       5,349,098  

Newstar Cheonwon Co., Ltd

     6,300,330        6,297,928        269,722        21,558       21,558  

Able Power 1st Co., Ltd. 1

     —          —          —          —         —    

DS Gimpo Hagun 1st Co., Ltd. 1

     —          —          142,345        156,530       156,530  

Able KD 2nd Co., Ltd.

     9,048,506        9,064,257        1,276,866        (301,556     (301,556

KB Wise Star Jongno Tower Real Estate Master Fund

     503,451,905        339,746,027        87,869        (1,578,851     (1,578,851

Young3 Southgate Co.,Ltd. 1

     —          —          492,291        (6,482     (6,482

Able Parkway 2nd Co., Ltd1

     —          —          676,061        (7,992     (7,992

Truefriend Wondi 3rd Co., Ltd1

     —          —          1,537,849        5,265       5,265  

Newstar FE Co., Ltd. 1

     —          —          2,588,741        (519,350     (519,350

Newstar Goeun 1st Co., Ltd1

     —          —          357,820        (5,500     (5,500

Newstar Goeun 2nd Co., Ltd1

     —          —          —          —         —    

Newstar DS 1st Co., Ltd

     15,354,172        15,210,463        827,510        95,443       95,443  

Newstar DS 2nd Co., Ltd

     37,355,681        37,705,532        2,412,350        (564,383     (564,383

Able Yongin 1st Co.,Ltd

     5,601,855        5,671,496        273,821        (69,627     (69,627

JB Dry Street Private Fund1

     994,339        9,332        87,739        (60,180     (60,180

JB Australia108 Private Fund1

     687,542        3,552        60,434        (42,462     (42,462

JB Forge Private Fund1

     492,285        2,885        48,423        (30,384     (30,384

JB Hall Street Private Fund1

     921,818        3,200        81,882        (54,392     (54,392

JB Margaret Street Private Fund1

     261,076        714        23,126        (15,545     (15,545

LB UK Private Real Estate Investment Trust No.18

     35,285,997        305,820        188,265        1,598,483       1,989,037  

LB UK Private Real Estate Investment Trust No.19

     11,192,754        140,312        69,036        508,586       632,940  

Hillswood Finco Ltd.

     13,531,753        —          1,196,177        1,196,177       551,715  

Hillswood Holdings Ltd.

     741,201        33,962        —          9,982       (24,901

Hillswood Holding Property Unit Trust

     28,354,552        1        153        1,703,243       1,009,107  

Hillswood Property Unit Trust

     96,045,052        70,393,909        5,279,941        (1,127,564     (1,766,154

 

22


Table of Contents

KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021 and 2020

 

 

(in thousands of Korean won)    December 31, 2020      2020  

Name of subsidiary

   Assets      Liabilities      Operating
profit
     Profit (loss)
for the year
    Total
comprehensive
income(loss)
 

KB Wolpyeongjunglim 1st Co., Ltd1

     —          —          —          —         —    

Newstar Wanee 1st Co., Ltd.

     9,413,799        9,123,666        684,141        103,391       103,391  

Able Gamsam 1st Co., Ltd.

     40,702,130        40,783,834        1,825,778        (24,448     (24,448

Able SP Co., Ltd. 1

     —          —          913,235        158,392       158,392  

Songdo PFive 2nd Co., Ltd

     117,932,381        116,484,600        3,918,762        816,337       816,337  

Songdo PFive 3rd Co., Ltd1

     —          —          —          —         —    

Able Sungnae 1st Co., Ltd.

     17,510,039        17,531,182        703,798        (820     (820

Newstar Haenam 1st Co., Ltd. 1

     —          —          —          —         —    

Newstar Gimpo 1st Co., Ltd

     34,663,960        34,234,120        2,055,685        210,707       210,707  

KB Yeoncheon Co., Ltd. 1

     —          —          120,687        22,407       22,407  

Goseong Hills 1st Co., Ltd1

     —          —          2,481,253        435,391       435,391  

Able Ali 2nd Co., Ltd

     20,251,064        20,103,568        828,660        147,495       147,495  

KB PF 1st Co., Ltd.

     2,494,745        2,509,297        206,810        (14,553     (14,553

Able BS 1st Co., Ltd. 1

     —          —          107,432        (90,489     (90,489

Able Daepo 1st Co., Ltd.

     1,253,048        1,279,815        569,433        (26,768     (26,768

Able Daepo 2nd Co., Ltd. 1

     —          —          452,491        (138,058     (138,058

KB Ansung 1st Co., Ltd

     35,532,308        35,716,955        1,024,142        (184,649     (184,649

Polar EH 1st Co., Ltd

     30,887,550        30,289,346        —          598,203       598,203  

Polar EH 2nd Co., Ltd

     30,905,766        30,289,346        —          616,418       616,418  

Polar SQ 1st Co., Ltd

     30,178,678        30,191,764        —          (13,087     (13,087

Polar SQ 2nd Co., Ltd

     30,178,678        30,191,764        —          (13,087     (13,087

Able Mojong 1st Co., Ltd

     49,257,354        49,470,144        1,334,740        (212,791     (212,791

TS 3rd Co., Ltd 1

     —          —          323,344        116,908       116,908  

Able Sungsoo 1st Co., Ltd.

     21,790,965        21,908,436        667,011        (117,472     (117,472

Newstar EJ Co., Ltd. 1

     —          —          403,121        268,016       268,016  

Multiasset PR Private Fund 3

     59,912,399        9,908        3,103,477        2,417,559       2,417,559  

Multiasset PR Private Fund 4

     59,846,957        14,438        4,669,665        3,608,473       3,608,473  

Newstar Wanee 2nd Co., Ltd. 1

     —          —          527,687        (74,127     (74,127

Able GD 1st Co., Ltd1

     —          —          1,046,973        (533,421     (533,421

Able Daenong Co., Ltd.

     22,254,325        22,273,609        989,243        (19,285     (19,285

Newstar Chimsan 1st Co., Ltd.

     7,929,844        7,896,601        156,607        33,242       33,242  

Able Forsythia 1st Co., Ltd.

     12,155,174        12,174,970        332,896        (19,796     (19,796

JK Banpo 1st Co., Ltd. 1

     —          —          211,237        (105,565     (105,565

Able IFP 1st Co., Ltd.

     4,165,709        4,193,021        1,055,720        (27,312     (27,312

Newstar JY Co., Ltd.

     9,074,445        9,077,856        465,115        (3,413     (3,413

Newstar Jije Co., Ltd. 1

     —          —          664,618        (18,023     (18,023

Able Gorim 1st Co., Ltd.

     17,825,030        17,867,405        1,287,460        (42,376     (42,376

KB Asan Baebang 1st Co., Ltd

     13,265,638        13,387,254        362,603        (121,627     (121,627

KB Asan Baebang 2nd Co., Ltd1

     —          —          291,319        (132,347     (132,347

KB Icheon logistics 1st Co., Ltd

     27,133,765        27,109,003        799,663        24,761       24,761  

Able Unicity 4th Co., Ltd

     20,356,084        20,456,441        843,886        (100,358     (100,358

Able Gongpyeong 1st Co., Ltd

     11,473,343        11,482,101        229,359        (8,758     (8,758

Able Gongpyeong 2nd Co., Ltd1

     —          —          659,101        (24,971     (24,971

Hamilton Power First Co., Ltd

     26,293,496        29,397,684        3,131,302        (3,104,189     (3,104,189

Newstar Yeonje 1st Co., Ltd. 1

     —          —          16,323        (453,895     (453,895

Newstar Yeonje 2nd Co., Ltd. 1

     —          —          20,597        (679,698     (679,698

Able Sepung industrial estate Co., Ltd1

     —          —          337,559        (153,196     (153,196

Able Hakwoono Co., Ltd1

     —          —          471,007        (312,296     (312,296

Able Chowall 1st Co., Ltd.

     23,835,099        23,679,248        1,116,003        155,850       155,850  

Newstar Daedeok Co., Ltd. 1

     —          —          82,937        (40,026     (40,026

Able Kangil 1st Co., Ltd1

     —          —          292,807        (85,063     (85,063

Startwithone Co., Ltd.

     20,715,035        20,561,458        603,779        153,576       153,576  

Able Silver Co., Ltd.

     8,109,550        8,236,113        300,094        (126,564     (126,564

Able Balgok Co., Ltd. 1

     —          —          1,462,707        —         —    

 

23


Table of Contents

KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021 and 2020

 

 

(in thousands of Korean won)    December 31, 2020      2020  

Name of subsidiary

   Assets      Liabilities      Operating
profit
     Profit (loss)
for the year
    Total
comprehensive
income(loss)
 

Newstar Yaecheon Co., Ltd. 1

     —          —          15,161        (24,629     (24,629

KB Osansaegyo Co., Ltd

     46,485,438        46,749,140        779,831        (263,703     (263,703

Hd Yongin 1st Co.,Ltd

     60,870,057        60,843,107        926,116        26,949       26,949  

FN Gasan 1st Co., Ltd.

     11,069,124        11,094,383        436,124        (25,260     (25,260

ABR Mareuk 1st Co.,Ltd

     5,799,675        5,811,800        292,512        (12,126     (12,126

Newstarbelieve Co., Ltd.

     10,846,033        11,031,411        156,095        (185,379     (185,379

Able Electronics 1st Co., Ltd.

     50,998,060        51,324,773        573,410        (326,714     (326,714

KB Echo 1st Co., Ltd

     29,810,778        29,673,664        345,263        137,114       137,114  

KB Wondong 1st Co., Ltd

     25,086,237        25,185,124        187,617        (98,888     (98,888

Newstar Joongbong Co., Ltd.

     30,180,753        30,307,774        188,870        (127,021     (127,021

Able Island 1st Co., Ltd

     44,241,734        44,304,990        187,285        (63,257     (63,257

Able Gumi 1st Co., Ltd.

     39,852,880        40,115,615        137,867        (262,736     (262,736

Able Gwangmyeong 2nd Co., Ltd

     29,964,962        30,205,631        106,444        (240,670     (240,670

ABR Joongang2 1st Co.,Ltd

     16,399,344        16,315,400        157,276        83,943       83,943  

Able Bucheon Co., Ltd.

     33,139,525        33,202,163        73,070        (62,639     (62,639

Newstar Kumo 1st Co., Ltd.

     2,674,400        2,581,516        150,535        92,883       92,883  

KB Tongyoung 1st Co., Ltd

     29,743,060        29,912,553        33,807        (169,494     (169,494

Able Seoho 1st Co., Ltd.

     32,323,088        32,501,149        29,893        (178,063     (178,063

KS Beta Co., Ltd.

       10,592,673          10,767,110             10,500           (174,437     (174,437

 

1 

The company is excluded from subsidiaries as at December 31, 2020.

The details of changes in scope for consolidation for the year ended December 31, 2021, are as follows:

(a) Subsidiaries newly included in the consolidation

 

Name of entity

  

Reason

Able Guwol 1st Co., Ltd.

   Gain of controlling power

Able Bukcheonan logis Co,. Ltd.

   Gain of controlling power

ABR Sosa 1st Co., Ltd.

   Gain of controlling power

Able Sky 1st Co., Ltd.

   Gain of controlling power

Newstar Gimpo 2nd Co.,Ltd.

   Gain of controlling power

Able HD 1st Co., Ltd.

   Gain of controlling power

Able Eumsung 1st Co., Ltd.

   Gain of controlling power

Able Jinjeop 1st Co., Ltd.

   Gain of controlling power

Able Hyosung 1st Co., Ltd.

   Gain of controlling power

Able Poongdong 1st Co., Ltd.

   Gain of controlling power

Hanwha US Equity Strategy Private Real Estate Fund 3

   Controlling ownership interest

Able Ansan Logistics 1st Co., Ltd.

   Gain of controlling power

Able Sewoon Co., Ltd.

   Gain of controlling power

Newstar Sinchun 1st Co., Ltd.

   Gain of controlling power

Songam Park Development Co.,Ltd.

   Gain of controlling power

KB Infra 1st Co., Ltd.

   Gain of controlling power

Pinetridavil Co., Ltd.

   Gain of controlling power

Able Udong 1st Co., Ltd.

   Gain of controlling power

Intgreen 1st Inc.

   Gain of controlling power

Able Gasan 1st Co., Ltd.

   Gain of controlling power

498 Seventh KOR Holdco LP

   Controlling ownership interest

498 Seventh KOR LLC

   Controlling ownership interest

Pacific Bric Professional Investors’ Private Real Estate Fund No.53

   Controlling ownership interest

Able Pocheon 1st Co., Ltd.

   Gain of controlling power

Able HD 1st co.ltd

   Gain of controlling power

Newstar Seotan Co.,Ltd.

   Gain of controlling power

Able PT 1st Co., Ltd

   Gain of controlling power

 

24


Table of Contents

KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021 and 2020

 

 

Name of entity

  

Reason

Unbroken 1st co.ltd

   Gain of controlling power

JOSH Bujeon 1st Co.,Ltd.

   Gain of controlling power

Newstarplus1st Co.,Ltd.

   Gain of controlling power

KB MyeongJi 1st Co.,Ltd.

   Gain of controlling power

Able Dangjin 1st Co.,Ltd.

   Gain of controlling power

Able Yongdap 1st Co., Ltd.

   Gain of controlling power

Newstar Cold Co., Ltd.

   Gain of controlling power

Betares Co., Ltd.

   Gain of controlling power

KB Osansegyo 2nd Co.,Ltd.

   Gain of controlling power

Able Hyeongok Co.,Ltd.

   Gain of controlling power

KB Mapo 1st Co.,Ltd.

   Gain of controlling power

KB Mapo 2nd Co.,Ltd.

   Gain of controlling power

GDIC 1st co.ltd

   Gain of controlling power

Able Wonchang 1st Co., Ltd.

   Gain of controlling power

Zitaress 1st Co., Ltd.

   Gain of controlling power

KB PF 3rd Co.,Ltd.

   Gain of controlling power

Able Beomeo-one Co., Ltd.

   Gain of controlling power

Able UC 1st co.ltd

   Gain of controlling power

KB Infra 2nd Co., Ltd.

   Gain of controlling power

KBillite 1st Co.,Ltd.

   Gain of controlling power

Newstar Sina Co., Ltd.

   Gain of controlling power

KB Gold 1st Co.,Ltd.

   Gain of controlling power

Inspire Gold 1st Co., Ltd.

   Gain of controlling power

Inspire Gold 2nd Co., Ltd.

   Gain of controlling power

Able MK 1st co.ltd

   Gain of controlling power

Yeoksam The Gallery KB 1st Co.,Ltd.

   Gain of controlling power

Y Three Ulsan Sinjeong 1st Co., Ltd.

   Gain of controlling power

 

25


Table of Contents

KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021 and 2020

 

 

(b) Subsidiaries excluded from the consolidation

 

Name of entity

  

Reason

Aquila Global Real Assets Fund No.1 LP    Disposal
AGRAF Real Estate Holding No.1, Senningerberg    Disposal
Vierte CasaLog GmbH & Co. KG    Disposal
Able Hana Co., Ltd.    End of payment guarantee contract
AKB 1st Co., Ltd.    End of payment guarantee contract
Newstar SH Co., Ltd.    End of payment guarantee contract
Newstar Daerim Co., Ltd.    End of payment guarantee contract
KB PF 1st Co., Ltd.    End of payment guarantee contract
Polar SQ 1st Co., Ltd    End of payment guarantee contract
Polar SQ 2nd Co., Ltd    End of payment guarantee contract
Able Sungsoo 1st Co., Ltd.    End of payment guarantee contract
Multiasset PR Private Fund 3    End of payment guarantee contract
Able IFP 1st Co., Ltd.    End of payment guarantee contract
Newstar JY Co., Ltd.    End of payment guarantee contract
Hamilton Power First Co., Ltd    End of payment guarantee contract
Startwithone Co., Ltd.    End of payment guarantee contract
Able Silver Co., Ltd.    End of payment guarantee contract
HD Yongin 1st Co., Ltd    End of payment guarantee contract
KB Wondong 1st Co., Ltd    End of payment guarantee contract
Newstar Joongbong Co., Ltd.    End of payment guarantee contract
Able Island 1st Co., Ltd    End of payment guarantee contract
Able Gumi 1st Co., Ltd.    End of payment guarantee contract
Able Gwangmyeong 2nd Co., Ltd    End of payment guarantee contract
Able Bucheon Co., Ltd.    End of payment guarantee contract
Great GM 12th Co., Ltd.    End of payment guarantee contract
Able HD 1st Co., Ltd.    End of payment guarantee contract
Newstar Wanee 1st Co., Ltd.    End of payment guarantee contract
Able Jinjeop 1st Co., Ltd.    End of payment guarantee contract
Hyundai Dynamic Mix Securities Feeder Investment Trust 1    Disposal
Hyundai Dynamic Mix Securities Master Investment Trust    Disposal
Able Daenong Co., Ltd.    End of payment guarantee contract
Newstar Chimsan 1st Co., Ltd.    End of payment guarantee contract
Able Sungnae 1st Co., Ltd.    End of payment guarantee contract
Able Forsythia 1st Co., Ltd.    End of payment guarantee contract
Able Unicity 4th Co., Ltd    End of payment guarantee contract
Able Daepo 1st Co., Ltd.    End of payment guarantee contract
Able Eumsung 1st Co., Ltd.    End of payment guarantee contract
Crescendo Muju Co., Ltd.    End of payment guarantee contract
Able Mojong 1st Co., Ltd    End of payment guarantee contract
Newstar Janghyun Co., Ltd.    End of payment guarantee contract
Able Bukcheonan logis Co,. Ltd.    End of payment guarantee contract
Able KD 2nd Co., Ltd.    End of payment guarantee contract
Able Seoho 1st Co., Ltd.    End of payment guarantee contract
KS Beta Co., Ltd.    End of payment guarantee contract
Able Ali 2nd Co., Ltd    End of payment guarantee contract
Pinetridavil Co., Ltd.    End of payment guarantee contract
Able Ansan Logistics 1st Co., Ltd.    End of payment guarantee contract
Newstar Cheonwon Co., Ltd    End of payment guarantee contract
Able Dangsan Co., Ltd.    End of payment guarantee contract
Newstar Hakgok Co., Ltd.    End of payment guarantee contract
Hyundai Kon-tiki Specialized Privately Placed Fund 1    Disposal
Able Youto 1st Co., Ltd.    End of payment guarantee contract
KB Osansaegyo Co., Ltd    End of payment guarantee contract
KB Asan Baebang 1st Co., Ltd    End of payment guarantee contract

 

26


Table of Contents

KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021 and 2020

 

 

Name of entity

  

Reason

KB Icheon logistics 1st Co., Ltd    End of payment guarantee contract
ABR Sosa 1st Co., Ltd.    End of payment guarantee contract
KB Ansung 1st Co., Ltd    End of payment guarantee contract
Songam Park Development Co., Ltd.    End of payment guarantee contract
Newstar Sinchun 1st Co., Ltd.    End of payment guarantee contract
Songdo PSeven 1st Co., Ltd.    End of payment guarantee contract
Newstar Cold Co., Ltd.    End of payment guarantee contract
Able Gorim 1st Co., Ltd.    End of payment guarantee contract
Betares Co., Ltd.    End of payment guarantee contract
Able Yongin 1st Co., Ltd    End of payment guarantee contract
KB Mapo 1st Co., Ltd.    End of payment guarantee contract
Able HD 1st co.ltd    End of payment guarantee contract
Pacific Bric Professional Investors’ Private Real Estate Fund No.53    Disposal
Hangang Domestic Private Real Estate Fund No.14    Disposal
Hyundai Able Investment REIT    Disposal
Hyundai Able Patriots Park, LLC    Disposal
Newstar Kumo 1st Co., Ltd.    End of payment guarantee contract
Able Udong 1st Co., Ltd.    End of payment guarantee contract

 

27


Table of Contents

KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021 and 2020

 

 

2. Significant Accounting Policies

The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

2.1 Basis of Preparation

The Group maintains its accounting records in Korean won and prepares statutory financial statements in the Korean language (Hangul) in accordance with International Financial Reporting Standards as adopted by the Republic of Korea (Korean IFRS). The accompanying consolidated financial statements have been condensed, restructured and translated into English from the Korean language financial statements.

Certain information attached to the Korean language financial statements, but not required for a fair presentation of the Group’s financial position, financial performance or cash flows, is not presented in the accompanying consolidated financial statements.

The consolidated financial statements of the Group have been prepared in accordance with Korean IFRS. These are the standards and related interpretations issued by the International Accounting Standards Board (IASB) that have been adopted by the Republic of Korea.

The consolidated financial statements have been prepared on the historical cost basis except for the following items:

 

   

Certain financial assets and liabilities (including derivatives instruments), certain classes of property, plant and equipment and investment properties measured at fair value

 

   

Assets held for sale measured at fair value less costs to sell, and

 

   

Defined benefit plans

 

   

Plan assets measured at fair value

The preparation of the consolidated financial statements requires the use of certain critical accounting estimates. Management also needs to exercise judgement in applying the Group’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 3.

2.2 Changes in Accounting Policy and Disclosures

2.2.1 New and amended standards adopted by the Group

The Group has applied the following amended standards for the first time for its annual reporting period commencing January 1, 2021.

 

   

Amendments to Korean IFRS No. 1116 Leases – Practical expedient for COVID-19-Related Rent Exemption, Concessions, Suspension

As a practical expedient, a lessee may elect not to assess whether a rent concession occurring as a direct consequence of the COVID-19 pandemic is a lease modification. A lessee that makes this election shall account for any change in lease payments resulting from the COVID-19-related rent concession the same way it would account for the change applying this standard if the change were not a lease modification. These amendments do not have a significant impact on the consolidated financial statements.

 

   

Amendments to Korean IFRS No. 1109 Financial Instruments, Korean IFRS No. 1039 Financial Instruments: Recognition and Measurement, Korean IFRS No. 1107 Financial Instruments: Disclosure, Korean IFRS No. 1104 Insurance Contracts and Korean IFRS No. 1116 Lease – Interest Rate Benchmark Reform

 

28


Table of Contents

KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021 and 2020

 

 

In relation to interest rate benchmark reform, the amendments provide a practical expedient allowing entities to change the effective interest rate instead of changing the carrying amount and apply hedge accounting without discontinuance although the interest rate benchmark is replaced in hedging relationship. These amendments do not have a significant impact on the consolidated financial statements.

2.2.2 The following amended standards have been published that are not mandatory for December 31, 2021 reporting periods and have not been early adopted by the Group.

 

   

Amendments to Korean IFRS No. 1103 Business Combination – Reference to the Conceptual Framework

The amendments update a reference of definition of assets and liabilities to qualify for recognition in revised Conceptual Framework for Financial Reporting. However, the amendments add an exception for the recognition of liabilities and contingent liabilities within the scope of Korean IFRS No. 1037 Provisions, Contingent Liabilities and Contingent Assets, and Korean IFRS No. 2121 Levies. The amendments also confirm that contingent assets should not be recognized at the acquisition date. The amendments should be applied for annual periods beginning on or after January 1, 2022, and earlier application is permitted. The Group does not expect that these amendments have a significant impact on the consolidated financial statements.

 

   

Amendments to Korean IFRS No. 1016 Property, Plant and Equipment – Proceeds before intended use

The amendments prohibit an entity from deducting from the cost of an item of property, plant and equipment any proceeds from selling items produced while the entity is preparing the asset for its intended use. Instead, the entity will recognize the proceeds from selling such items, and the costs of producing those items, as profit or loss. The amendments should be applied for annual periods beginning on or after January 1, 2022, and earlier application is permitted. The Group does not expect that these amendments have a significant impact on the consolidated financial statements.

 

   

Amendments to Korean IFRS No. 1037 Provisions, Contingent Liabilities and Contingent Assets – Onerous Contracts: Cost of Fulfilling a Contract

The amendments clarify that the direct costs of fulfilling a contract include both the incremental costs of fulfilling the contract and an allocation of other costs directly related to fulfilling contracts when assessing whether the contract is onerous. The amendments should be applied for annual periods beginning on or after January 1, 2022, and earlier application is permitted. The Group does not expect that these amendments have a significant impact on the consolidated financial statements.

 

   

Amendments to Korean IFRS No. 1116 Leases – COVID-19-Related Rent Concessions, etc. beyond June 30, 2021

The application of the practical expedient, a lessee may elect not to assess whether a rent concession occurring as a direct consequence of the COVID-19 pandemic is a lease modification, is extended to lease payments originally due on or before June 30, 2022. A lessee shall apply the practical expedient consistently to eligible contracts with similar characteristics and in similar circumstances. The amendments should be applied for annual periods beginning on or after April 1, 2021, and earlier application is permitted. The Group does not expect that these amendments have a significant impact on the consolidated financial statements.

 

   

Amendments to Korean IFRS No.1001 Presentation of Financial Statements – Classification of Liabilities as Current or Non-current

The amendments clarify that liabilities are classified as either current or non-current, depending on the substantive rights that exist at the end of the reporting period. Classification is unaffected by the likelihood that an entity will exercise the right to defer settlement of the liability or the management’s expectations thereof. Also, the settlement of liability includes the transfer of the entity’s own equity instruments; however, it would be excluded if an option to settle the liability by the transfer of the entity’s own equity instruments is recognized separately from the liability as an equity component of a compound financial instrument. The amendments should be applied for annual periods beginning on or after January 1, 2023, and earlier application is permitted. The Group does not expect that these amendments have a significant impact on the consolidated financial statements.

 

29


Table of Contents

KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2021 and 2020

 

 

   

Amendments to Korean IFRS No.1001 Presentation of Financial Statements – Accounting Policy Disclosure

The amendments require an entity to define and disclose their material accounting policy information. IFRS Practice Statement 2 Making Materiality Judgements was amended to explain and demonstrate how to apply the concept of materiality. The amendments should be applied for annual periods beginning on or after January 1, 2023, and earlier application is permitted. The Group does not expect that these amendments have a significant impact on the consolidated financial statements.

 

   

Amendments to Korean IFRS No.1008 Accounting Policies, Changes in Accounting Estimates and Errors – Definition of Accounting Estimates

The amendments introduce the definition of accounting estimates and clarify how to distinguish changes in accounting estimates from changes in accounting policies. The amendments should be applied for annual periods beginning on or after January 1, 2023, and earlier application is permitted. The Group does not expect that these amendments have a significant impact on the consolidated financial statements.

 

   

Amendments to Korean IFRS No.1012 Income Taxes – Deferred Tax Related to Assets and Liabilities Arising from a Single Transaction

The amendments narrow the scope of the deferred tax recognition exemption so that it no longer applies to transactions that, on initial recognition, give rise to equal taxable and deductible temporary differences. The amendments should be applied for annual periods beginning on or after January 1, 2023, and earlier application is permitted. The Group does not expect that these amendments have a significant impact on the consolidated financial statements.

2.3 Consolidation

The Group has prepared the consolidated financial statements in accordance with Korean IFRS No.1110 Consolidated Financial Statements.

(a) Subsidiaries

Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.

 

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Notes to the Consolidated Financial Statements

December 31, 2021 and 2020

 

 

The acquisition method of accounting is used to account for business combinations by the Group. The consideration transferred is measured at the fair values of the assets transferred, and identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The Group recognizes any non-controlling interest in the acquired entity on an acquisition-by-acquisition basis either at fair value or at the non-controlling interest’s proportionate share of the acquired entity’s net identifiable assets. All other non-controlling interests are measured at fair values, unless otherwise required by other standards. Acquisition-related costs are expensed as incurred.

The Group applies the book-value method to account for business combinations of entities under a common control. Identifiable assets acquired and liabilities assumed in a business combination are measured at their book values on the consolidated financial statements of the ultimate parent entity. In addition, the difference between the sum of consolidated book values of the assets and liabilities transferred and accumulated other comprehensive income; and the consideration paid is recognized as capital surplus.

The excess of consideration transferred, amount of any non-controlling interest in the acquired entity and acquisition-date fair value of any previous equity interest in the acquired entity over the fair value of the net identifiable assets acquired is recoded as goodwill. If those amounts are less than the fair value of the net identifiable assets of the business acquired, the difference is recognized directly in the profit or loss as a bargain purchase.

Intergroup transactions, balances and unrealized gains on transactions between group companies are eliminated. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the transferred asset. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

(b) Associates

Associates are entities over which the Group has significant influence but not control or joint control. Investments in associates are accounted for using the equity method of accounting, after initially being recognized at cost. Unrealized gains on transactions between the Group and its associates are eliminated to the extent of the Group’s interest in the associates. If the Group’s share of losses of an associate equals or exceeds its interest in the associate (including long-term interests that, in substance, form part of the Group’s net investment in the associate), the Group discontinues recognizing its share of further losses. After the Group’s interest is reduced to zero, additional losses are provided for, and a liability is recognized, only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate.

If there is objective evidence of impairment for the investment in the associate, the Group recognizes the difference between the recoverable amount of the associate and its book amount as impairment loss.

If an associate uses accounting policies other than those of the Group for like transactions and events in similar circumstances, if necessary, adjustments shall be made to make the associate’s accounting policies conform to those of the Group when the associate’s financial statements are used by the Group in applying the equity method.

(c) Joint Arrangements

A joint arrangement, wherein two or more parties have joint control, is classified as either a joint operation or a joint venture. A joint operator has rights to the assets, and obligations for the liabilities, relating to the joint operation and recognizes the assets, liabilities, revenues and expenses relating to its interest in a joint operation. A joint-venturer has rights to the net assets relating to the joint venture and accounts for that investment using the equity method.

 

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Notes to the Consolidated Financial Statements

December 31, 2021 and 2020

 

 

2.4 Foreign Currency Translation

(a) Functional and presentation currency

Items included in the financial statements of the Group are measured using the currency of the primary economic environment in which the Group operates (“the functional currency”). The financial statements are presented in Korean won, which is the Group’s functional and presentation currency.

(b) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in profit or loss. They are deferred in other comprehensive income if they relate to qualifying cash flow hedges and qualifying effective portion of hedge of net investments in foreign operations, or are attributable to monetary part of the net investment in a foreign operation.

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. Translation differences on assets and liabilities carried at fair value are reported as part of the fair value gain or loss. For example, translation differences on non-monetary assets and liabilities such as equities held at fair value through profit or loss are recognized in profit or loss as part of the fair value gain or loss and translation differences on non-monetary assets such as equities classified as available-for-sale financial assets are recognized in other comprehensive income.

2.5 Recognition and Measurement of Financial Instruments

2.5.1 Classification

The Group classifies financial assets as follows.

 

   

Those to be measured at fair value (through profit or loss or other comprehensive income)

 

   

Those to be measured at amortised cost

The classification depends on the Group’s business model for managing the financial assets and the contractual terms of the cash flows.

For financial assets measured at fair value, gains and losses will either be recorded in profit or loss or other comprehensive income. For investments in debt instruments, this will depend on the business model in which the investment is held. The Group reclassifies debt investments when, and only when its business model for managing those assets changes.

For investments in equity instruments that are not held for trading, this will depend on whether the Group has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through other comprehensive income. Changes in fair value of non-designated equity investment are recognized in profit or loss.

2.5.2 Measurement

At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit or loss are expensed in profit or loss.

Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows are solely payment of principal and interest.

 

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Notes to the Consolidated Financial Statements

December 31, 2021 and 2020

 

 

2.5.2.1 Debt instruments

Subsequent measurement of debt instruments depends on the Group’s business model for managing the asset and the cash flow characteristics of the asset. The Group classifies its debt instruments into one of the following three measurement categories:

(a) Amortised cost

Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortised cost. A gain or loss on a debt investment that is subsequently measured at amortised cost and is not part of a hedging relationship is recognized in profit or loss when the asset is derecognized or impaired. Interest income from these financial assets is included in ‘interest income’ using the effective interest rate method.

(b) Fair value through other comprehensive income

Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets’ cash flows represent solely payments of principal and interest, are measured at fair value through other comprehensive income. Movements in the carrying amount are taken through other comprehensive income, except for the recognition of impairment loss (reversal of impairment loss), interest income and foreign exchange gains and losses which are recognized in profit or loss. When the financial asset is derecognized, the cumulative gain or loss previously recognized in other comprehensive income is reclassified from equity to profit or loss. Interest income from these financial assets is included in ‘interest income’ using the effective interest rate method. Foreign exchange gains and losses are presented in ‘gain or loss on foreign currency transaction’ and impairment losses are presented in ‘loss on valuation and disposal of financial instrument’.

(c) Fair value through profit or loss

Assets that do not meet the criteria for amortised cost or fair value through other comprehensive income are measured at fair value through profit or loss. A gain or loss on a debt investment that is subsequently measured at fair value through profit or loss and is not part of a hedging relationship is recognized in profit or loss and presented net in the statement of profit or loss within ‘gain or loss on valuation and disposal of financial instrument’ in the year in which it arises.

2.5.2.2 Equity instruments

The Group subsequently measures all equity investments at fair value. Where the Group’s management has elected to present fair value gains and losses on equity investments in other comprehensive income, there is no subsequent reclassification of fair value gains and losses to profit or loss following the derecognition of the investment. Dividend income from such investments continue to be recognized in profit or loss when the right to receive payments is established.

Changes in the fair value of financial assets at fair value through profit or loss are recognized in ‘gain or loss on valuation and disposal of financial instrument’ in the statement of profit or loss. Impairment loss (reversal of impairment loss) on equity investments measured at fair value through other comprehensive income are not reported separately from other changes in fair value.

 

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Notes to the Consolidated Financial Statements

December 31, 2021 and 2020

 

 

2.5.3 Impairment

The Group assesses on a forward-looking basis expected credit losses associated with its debt instruments carried at amortised cost and fair value through other comprehensive income. The impairment methodology applied depends on whether there has been a significant increase in credit risk.

Expected credit losses are a probability-weighted estimate of credit losses (i.e. the present value of all cash shortfalls) over the expected life of the financial instrument. The Group measures expected credit losses by reflecting reasonable and supportable information that is reasonably available at the reporting date without undue cost or effort, including information about past events, current conditions and forecasts of future economic conditions.

The Group uses the following three measurement techniques in accordance with Korean IFRS:

 

   

General approach: for financial assets and off-balance-sheet unused credit line that are not applied below two approaches

 

   

Simplified approach: for receivables, contract assets and lease receivables

 

   

Credit-impaired approach: for purchased or originated credit-impaired financial assets

Different measurement approaches are applied depending on significant increase in credit risk. 12 month expected credit losses is recognized when credit risk has not significantly increased since initial recognition. A loss allowance at an amount equal to lifetime expected credit losses is recognized when credit risk has significantly increased since initial recognition. Lifetime is presumed to be a period to the contractual maturity date of a financial asset (the expected life of the financial asset).

The Group determines whether the credit risk has increased significantly since initial recognition using the following information. One or more of the following items is deemed significant increase in credit risk.

 

   

More than 30 days past due;

 

   

Decline in credit rating at period end by more than certain notches as compared to that at initial recognition;

 

   

Decline in ratings below certain level in the early warning system;

Under simplified approach, the Group shall always measure the loss allowance at an amount equal to lifetime expected credit losses. Under credit-impaired approach, the Group shall only recognize the cumulative changes in lifetime expected credit losses since initial recognition as a loss allowance for purchased or originated credit-impaired financial assets.

The Group generally deems one or more of the following items credit-impaired:

 

   

90 days or more past due;

 

   

Legal proceedings related to collection;

 

   

Refinancing;

 

   

Corporate borrowers that are rated C or D;

 

   

Debt restructuring.

 

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Notes to the Consolidated Financial Statements

December 31, 2021 and 2020

 

 

2.5.3.1 Forward-looking information

The Group uses forward-looking information, when it determines whether the credit risk has increased significantly since initial recognition and measures expected credit losses.

The Group assumes the risk component has a certain correlation with the business cycle, and calculates the expected credit loss by reflecting the forward-looking information with macroeconomic variables on the measurement inputs.

Forward-looking information used in calculation of expected credit loss is derived after comprehensive consideration of a variety of factors including scenario in management planning, risk situation scenario for stress test, third party forecast, and others.

2.5.3.2 Measuring expected credit losses on financial assets at amortised cost

The amount of the loss on financial assets at amortised cost is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the financial asset’s original effective interest rate. The Group estimates expected future cash flows for financial assets that are individually significant (individual assessment of impairment).

For financial assets that are not individually significant, the Group collectively estimates expected credit loss by grouping loans with homogeneous credit risk profile (collective assessment of impairment).

 

   

Individual assessment of impairment

Individual assessment of impairment losses are calculated using management’s best estimate on present value of expected future cash flows. The Group uses all the available information including operating cash flow of the borrower and net realizable value of any collateral held.

 

   

Collective assessment of impairment

Collective assessment of loss allowance involves historical loss experience along with incorporation of forward-looking information. Such process incorporates factors such as type of collateral, product and borrowers, credit rating, size of portfolio and recovery period and applies ‘probability of default’ (PD) on a company of assets and ‘loss given default’ (LGD) by type of recovery method. Also, the expected credit loss model involves certain assumption to determine input based on loss experience and forward-looking information. These models and assumptions are periodically reviewed to reduce gap between loss estimate and actual loss experience.

2.5.3.3 Measuring expected credit losses on financial assets at fair value through other comprehensive income

Measuring method of expected credit losses on financial assets at fair value through other comprehensive income is equal to the method of financial assets at amortised cost, except for loss allowances that are recognized as other comprehensive income. Amounts recognized in other comprehensive income for sale or repayment of financial assets at fair value through other comprehensive income are reclassified to profit or loss.

 

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December 31, 2021 and 2020

 

 

2.5.4 Recognition and Derecognition

Regular way purchases and sales of financial assets are recognized or derecognized on trade-date, the date on which the Group commits to purchase or sell the asset. Financial assets are derecognized when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group has transferred substantially all the risks and rewards of ownership.

If a transfer does not result in derecognition because the Group has retained substantially all the risks and rewards of ownership of the transferred asset, the Group continues to recognize the transferred asset in its entirety and recognizes a financial liability for the consideration received. The Group classified the financial liability as “borrowings” in the statement of financial position.

The Group writes off the carrying amount and allowance of financial assets in its entirety or to a portion thereof when the principal and interest are determined to be no longer recoverable. In general, the Group considers write-off when it is determined that the debtor does not have sufficient resources or income to cover the principal and interest, and this write-off decision is made in accordance with internal regulations.

2.5.5 Offsetting of financial instruments

Financial assets and liabilities are offset and the net amount reported in the statements of financial position where there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the assets and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the Group or the counterparty.

2.6 Financial Liabilities

2.6.1 Classification and Measurement

The Group’s financial liabilities at fair value through profit or loss are financial instruments held for trading. A financial liability is held for trading if it is incurred principally for the purpose of repurchasing in the near term. A derivative that is not a designated as hedging instruments and an embedded derivative that is separated are also classified as held for trading.

The Group classifies non-derivative financial liabilities, except for financial liabilities at fair value through profit or loss, financial guarantee contracts and financial liabilities that arise when a transfer of financial assets does not qualify for derecognition, as financial liabilities carried at amortised cost and present as ‘deposits liabilities’, ‘borrowings’, and ‘other financial liabilities’ in the statement of financial position.

2.6.2 Derecognition

Financial liabilities are removed from the statement of financial position when it is extinguished; for example, when the obligation specified in the contract is discharged or canceled or expired or when the terms of an existing financial liability are substantially modified. The difference between the carrying amount of a financial liability extinguished or transferred to another party and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognized in profit or loss.

The Group’s financial liabilities at fair value through profit or loss are financial instruments held for trading. A financial liability is held for trading if it is incurred principally for the purpose of repurchasing in the near term. A derivative that is not a designated as hedging instruments and an embedded derivative that is separated are also classified as held for trading. Financial liabilities designated the financial liabilities at fair value through profit or loss is the structured financial liabilities contain of embedded derivatives issued by the Group.

 

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Notes to the Consolidated Financial Statements

December 31, 2021 and 2020

 

 

The changes in fair value of financial liabilities at FVTPL due to the change of credit risk is recognized as other comprehensive income(instead of profit and loss) and this other comprehensive income can not be transferred to profit and loss in subsequent events.

2.7 Derivative Financial Instruments

The Group enters into numerous derivative financial instrument contracts such as stock options, stock swaps, interest rate swaps and others for trading purposes or sale and issue of derivative combined securities. These derivative financial instruments are presented as derivative financial instruments within the financial statements irrespective of transaction purpose and subsequent measurement requirement.

Derivatives are initially recognized at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. The changes of the fair value of derivatives financial instruments held for trading are recognized in profit or loss as ‘gain or loss on valuation and disposal of financial instrument’.

Fair value of derivative instrument traded in active market is a quoted price. In case of fair value of relatively simple derivative instruments such as options, interest rate or currency swaps and others is calculated using one or more valuation techniques like cash flow discount model, option pricing model which is based on observable data and appropriate considering the nature of objects.

Also, fair value of more complex derivative instrument is calculated using valuation techniques based on unobservable data in market is periodically reviewed and approved its accuracy.

 

2.7.1

Day 1 gain & loss

Accordance with Korean IFRS, if there is no available price from active market and if the Group uses a valuation technique that uses data using unobservable valuation parameters from market for the fair value at initial recognition of financial instruments, there could be a difference between the transaction price and the amount determined using that valuation technique. In these circumstances, the fair value of financial instruments is recognized as the transaction price and the difference is amortised by using the straight line method over the life of the financial instruments.

 

2.7.2

Credit risk adjustments

In case of exchange-traded derivative instrument, credit risk is not reflected on the fair value because exchange-traded derivative instrument is traded in public exchange, and it is not available to identify certain counterparties. Fair value of OTC derivative instrument only reflects credit risk.

2.7.3 Hedge accounting

The accounting treatment of changes of fair value for the derivatives are varied as the character of hedging items and the purpose of hedging. The Group holds derivative contracts for the purpose of hedging the risk and the Group designates certain derivatives as hedging instruments to hedge the risk as follows.

 

(a)

Fair value hedge : a hedge of the exposure to changes in fair value of a recognised asset or liability or an unrecognised firm commitment

 

(b)

Cash flow hedge : a hedge of the exposure to variability in cash flows that is attributable to a particular risk associated with all, or a component of, a recognised asset or liability or a highly probable forecast transaction

 

(c)

Hedge of net investments in foreign operations

On initial designation of the hedge, the Group formally documents the relationship between the hedging instrument(s) and hedged items, including the risk management objectives and strategy in undertaking the hedge transaction, together with the methods that will be used to assess the effectiveness of the hedging relationship.

 

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Notes to the Consolidated Financial Statements

December 31, 2021 and 2020

 

 

The fair value of derivatives for hedge is disclosed in note 36.

Changes in the fair value of a derivative hedging instrument designated as a fair value hedge are recognized in profit or loss. The gain or loss from remeasuring the hedging instrument at fair value for a derivative hedging instrument and the gain or loss on the hedged item attributable to the hedged risk are recognized in profit or loss

If the hedge no longer meets the criteria for hedge accounting, the adjustment to the carrying amount of a hedged item is fully amortised to profit or loss by the maturity of the financial instrument using the effective interest method.

The accounting treatments of hedge of net investments in foreign operations are similar to the one of cash flow hedge.

If hedging instruments qualify for a hedge of net investments in foreign operations, the effective portion of changes in fair value of hedging instrument is recognized in other comprehensive income or loss and the ineffective portion is recognized in profit or loss. The gain or loss on the hedging instrument relating to the effective portion of the hedge that has been recognized in other comprehensive income will be reclassified from other comprehensive income or loss to profit or loss as a reclassification adjustment on the disposal or partial disposal of the foreign operation.

2.8 Property and Equipment

All property and equipment except for land are recognized at its cost less any accumulated depreciation and any accumulated impairment losses. The cost of property and equipment includes any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management and the initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located.

Land is measured at fair value on the basis of the valuation performed by an independent valuer. Revaluations are made with sufficient regularity to ensure that the carrying amount does not differ materially from that which would be determined using fair value at the end of the reporting period.

If an asset’s carrying amount is increased as a result of a revaluation, the increase is recognized in other comprehensive income and the amount net of deferred tax is accumulated in equity under the heading of revaluation surplus after netting deferred tax. However, the increase is recognized in profit or loss to the extent that it reverses a revaluation decrease of the same asset previously recognized in profit or loss. If an asset’s carrying amount is decreased as a result of a revaluation, the decrease is recognized in profit or loss. However, the decrease is recognized in other comprehensive income to the extent of any credit balance existing in the revaluation surplus in respect of that asset. The decrease recognized in other comprehensive income reduces the amount accumulated in equity under the heading of revaluation surplus. The revaluation surplus included in equity in respect of an item of property and equipment is transferred directly to retained earnings when the asset is derecognized.

Depreciation of all property and equipment, except for land, is calculated using the following method to allocate their cost or revalued amounts, net of their residual values, over their estimated useful lives as follows:

 

Property and equipment

  

Estimated useful lives

  

Depreciation method

Buildings

   40 years    Straight-line method

Vehicles

   4 years    Straight-line method

Furniture and equipment

   4 years    Straight-line method

Other

   4 years    Straight-line method

Right-of-use assets

  

1~10 years

(initial date of the contract
entered into ~ maturity date)

   Straight-line method

 

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Notes to the Consolidated Financial Statements

December 31, 2021 and 2020

 

 

The residual value, the useful life and the depreciation method applied to an asset are reviewed at least at each financial year-end and, if needed, the changes are accounted for as a change in an accounting estimate.

2.9 Investment Property

Property held to earn rentals or for capital appreciation or both is classified as investment property. Investment property is measured initially at its cost. After recognition as an asset, investment property is carried at cost less accumulated depreciation and impairment losses. Investment property, except for land, is depreciated using the straight-line method over their useful lives of 40 years.

2.10 Intangible Assets

Intangible assets are measured initially at cost and subsequently carried at their cost less any accumulated amortization and any accumulated impairment losses.

Intangible assets, except for goodwill, comprise software and membership rights, and are amortised using the straight-line method with no residual value over following estimated useful economic life since the asset is available for use. However, goodwill and membership rights are not amortised by considering their useful life as indefinite, because there is no expectable limit to period for use.

 

Intangible assets

  

Estimated useful lives

  

Amortization method

Development costs

   4 years    Straight-line method

Software

   4 years    Straight-line method

The amortization period and the amortization method for intangible assets with a finite useful life are reviewed at the end of each financial year. The management reviews the useful life of intangible assets that is not being amortised each period to determine whether events and circumstances continue to support an indefinite useful life. If management judges that previous estimates should be adjusted, the change is accounted for as a change in an accounting estimate.

2.11 Impairment of Non-financial Assets

Goodwill or intangible assets with indefinite useful lives are not subject to amortization and are tested annually for impairment. Assets that are subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. Non-financial assets, other than goodwill, that suffered impairment are reviewed for possible reversal of the impairment at the end of each reporting period.

2.12 Lease

Lease income from operating leases where the Group is a lessor is recognized in income on a straight-line basis over the lease term. Initial direct costs incurred in obtaining an operating lease are added to the carrying amount of the underlying asset and recognized as expense over the lease term on the same basis as lease income. The respective leased assets are included in the statement of financial position based on their nature.

 

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Notes to the Consolidated Financial Statements

December 31, 2021 and 2020

 

 

The Group should assess whether a contract is, or contains a lease at the date of the contract entered into and the initial application date under Korean IFRS No.1116. But the Group may elect not to reassess whether a contract is, or contains a lease for the contract entered into before the transition date by applying practical expedient permitted by Korean IFRS No.1116. The Group has gone through all the contract to assess whether the contract is, or contains, a lease at the contract entered into after the date of initial application.

A lessee is required to recognize a right-of-use assets (lease assets) representing its right to use the underlying leased asset and a lease liability representing its obligation to make lease payments. Assets and liabilities arising from a lease are initially measured on a present value basis.

Lease liabilities include the net present value of the following lease payments:

 

   

Fixed payments (including in-substance fixed payments), less any lease incentives receivable

 

   

Variable lease payment that are based on an index or a rate

 

   

Amounts expected to be payable by the lessee under residual value guarantees

 

   

The exercise price of a purchase option if the lessee is reasonably certain to exercise that option, and

 

   

Payments of penalties for terminating the lease, if the lease term reflects the lessee exercising an option to terminate the lease

The lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily determined. If that rate can not be readily determined, the lessee’s incremental borrowing rate is used, being the rate that the lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms and conditions.

Right-of-use assets are measured at cost comprising the following:

 

   

The amount of the initial measurement of lease liability

 

   

Any lease payments made at or before the commencement date less any lease incentives received

 

   

Any initial direct costs incurred by the lessee, and

 

   

An estimate of restoration costs

However, short-term lease (lease that, at the commencement date, has a lease term of 12 months or less) and lease of low-value assets (For example, underlying leased asset under $ 5,000) are permitted to elect exceptional conditions.

The right-of-use asset is depreciated over the shorter of the asset’s useful life and the lease term.

Related to sale and leaseback, the Group (seller-lessee) is required to applying the Korean IFRS No.1115 ‘Revenue from Contracts with Customers’ to determine whether the transfer of an asset is accounted for as a sale of that asset. However, the Group shall not reassess sale and leaseback transactions entered into before the date of initial application.

Large number of lease contracts held by the Group have extension option and termination option. These conditions are generally used for the maximizing the flexibility of lease operation in a view of managing the contracts. Extension option or termination option included in the lease contracts are generally owned by the Group, not lessor. The Group re-evaluated the lease term of the lease contracts by taking into account the contract type, operation plan for branch offices, and costs related to lease termination. As a result, no significant change in the existing lease term has occurred.

2.13 Provisions

Provisions are measured at the present value of the expenditures expected to be required to settle the obligation and the increase in the provision due to passage of time is recognized as interest expense.

 

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December 31, 2021 and 2020

 

 

2.14 Financial Guarantee Contracts

Financial guarantees contracts provided by the Group are initially measured at fair value on the date the guarantee was given. Subsequent to initial recognition, the Group’s liabilities under such guarantees are measured at the higher of the amounts below and recognized as ‘other financial liabilities’:

 

   

Loss allowance in accordance with Korean IFRS No.1109, ‘Financial Instruments’

 

   

The amount initially recognized less, when appropriate, the cumulative amount of income recognized in accordance with the principles of Korean IFRS No.1115, ‘Revenue from Contracts with Customers’

2.15 Revenue Recognition

The Group recognizes revenues in accordance with the following five-step revenue recognition standard (Korean IFRS No.1115 Revenue from Contracts with Customers).

 

   

Step 1: Identify the contract with a customer.

 

   

Step 2: Identify the performance obligations in the contract.

 

   

Step 3: Determine the transaction price.

 

   

Step 4: Allocate the transaction price to the performance obligations in the contract.

 

   

Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation.

2.16 Employee Benefits

2.16.1 Retirement benefit liabilities: Defined benefit plans and Defined contribution plans

The Group has both defined benefit and defined contribution plans. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. The contributions are recognized as employee benefit expenses when an employee has rendered service. A defined benefit plan is a pension plan that is not a defined contribution plan.

Typically defined benefit plans define an amount of pension benefit that an employee will receive on retirement, usually dependent on one or more factors such as age, years of service and compensation. The liability recognized in the statement of financial position in respect of defined benefit pension plans is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of high-quality corporate bonds and that have terms to maturity approximating to the terms of the related pension obligation. The remeasurements of the net defined benefit liability are recognized in other comprehensive income.

If any plan amendments, curtailments, or settlements occur, past service costs or any gains or losses on settlement are recognized as profit or loss for the year.

2.16.2 Short-term employee benefits

Short-term employee benefits, which are expected to be settled wholly before 12 months after the end of the annual reporting period in which the employees render the service, are recognized in profit or loss at the undiscounted amount of short-term employee benefits expected to be paid in exchange for that service.

The expected cost of profit-sharing and bonus payments are recognized as liabilities when the Group has a present legal or constructive obligation to make such payments as a result of past events rendered by employees and a reliable estimate of the obligation can be made.

 

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Notes to the Consolidated Financial Statements

December 31, 2021 and 2020

 

 

2.16.3 Share-based payment

The Group is under share-based payment arrangements that grant shares to the executives of the Group. When the arrangements are exercised, the Group provides share or cash equal to the monetary value of the share.

The Group measures the services acquired and the liability incurred at fair value, and the fair value is recognized as expense and accrued expenses over the vesting period. Until the liability is settled, the Group remeasures the fair value of the liability at the end of each reporting period and at the date of settlement, with any changes in fair value recognized in profit or loss as share-based payments.

2.17 Income Tax Expenses

Income tax expense comprises current income tax and deferred income tax and are recognized in profit or loss for the year, except to the extent that the tax arises from (a) a transaction or event which is recognized either in other comprehensive income or directly in equity and (b) a business combination.

2.17.1 Current income tax

Current income tax is the amount of income taxes payable (recoverable) in respect of the taxable profit (tax loss) for a period. A difference between the taxable profit and accounting profit may arise when income or expense is included in accounting profit in one period but is included in taxable profit in a different period. Differences may also arise if there is revenue that is exempt from taxation or expenses that is not deductible in determining taxable profit (tax loss). Current income tax liabilities (assets) for the current and prior periods are measured at the amount expected to be paid to (recovered from) the taxation authorities, using the tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

The Group offsets current income tax assets and current income tax liabilities if, and only if, the Group (a) has a legally enforceable right to set off the recognized amounts and (b) intends to settle on a net basis.

2.17.2 Deferred income tax

Deferred income tax is recognized, using the asset-liability method, on temporary differences arising between the tax based of assets and liabilities and their carrying amount in the financial statements. Deferred income tax liabilities are recognized for all taxable temporary differences and deferred income tax assets are recognized for all deductible temporary differences to the extent that it is probable that taxable profit will be available against which the deductible temporary difference can be utilized. However, deferred income tax liabilities are not recognized if they arise from the initial recognition of goodwill; deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting profit nor taxable profit or loss.

Deferred income tax is provided on temporary differences arising on investments in subsidiaries and associates, except for deferred income tax liability where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference, will not reverse in the foreseeable future.

The carrying amount of a deferred income tax asset is reviewed at the end of each reporting period. The Group reduces the carrying amount of a deferred income tax asset to the extent that it is no longer probable that sufficient taxable profit will be available to allow the benefit of part or all of that deferred income tax asset to be utilized.

 

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Notes to the Consolidated Financial Statements

December 31, 2021 and 2020

 

 

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred income tax liabilities and deferred income tax assets reflects the tax consequences that would follow from the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income taxes assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.

Current income tax and deferred income tax are included in the calculation of income tax expense. Income taxes related to prior period are included in current income tax.

Deferred income taxes, recognized directly in equity or arisen from business combination, are directly deducted from equity or goodwill.

2.18 Operating Segment Reporting

Operating segments are components of the Group, about which separate internal reporting information is evaluated regularly by the chief operating decision makers including board of directors in deciding how to allocate resources and to assess performance. Each segment is a strategic business unit that offers different products and services, and is managed separately because each business has different risks and opportunities, different technology required and marketing strategies.

Segment information includes the items which are directly attributable and reasonably allocated to the segment.

2.19 Other Receivables and Payables Related to Brokerage Transactions

Regarding customer brokerage transactions, the Group recognizes the receivable from and payable to the Korea Exchange (Clearing and settlement organization) and customers in total amounts, which the Group recognizes as other financial assets and other financial liabilities. The Group offsets the receivable and payable that arise between Korea Exchange and the Group within the same day, and that arise between a customer and the Group within the same day and through the same account.

2.20 Approval of Issuance of the Financial Statements

The issuance of the December 31, 2021 consolidated financial statements of the Group was approved by the Board of Directors on February 7, 2022, which is subject to change with approval at the annual shareholders’ meeting.

3. Critical Accounting Estimates and Assumptions

The preparation of financial statements requires the Group to make estimates and assumptions concerning the future. Management also needs to exercise judgement in applying the Group’s accounting policies. Estimates and assumptions are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. As the resulting accounting estimates will, by definition, seldom equal the related actual results, it can contain a significant risk of causing a material adjustment.

 

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Notes to the Consolidated Financial Statements

December 31, 2021 and 2020

 

 

The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below. Additional information of significant judgment and assumptions of certain items are included in relevant notes.

3.1 Income taxes

The Group recorded, based on its best estimate, current taxes and deferred taxes that the Group will be liable in the future for the operating results at the end of the reporting period. However, the final tax outcome in the future may be different from the amounts that were initially recorded. Such differences will impact the current and deferred income tax assets and liabilities in the period in which such determination is made.

If certain portion of the taxable income is not used for investments or increase in wages in accordance with the Special Taxation for Facilitation of Investment and Mutually-Beneficial Cooperation, the Group is liable to pay additional income tax calculated based on the tax law. Accordingly, the measurement of current and deferred income tax is affected by the tax effects from the tax law. As the Group’s income tax is dependent on the investments and increase in wages, there exists uncertainty with regard to measuring the final tax effects.

3.2 Fair value of financial instruments

The fair value of financial instruments where no active market exists or where quoted prices are not otherwise available is determined by using valuation techniques. Financial instruments, which are not actively traded in the market and those with less transparent market prices, will have less objective fair values and require broad judgment on liquidity, concentration, uncertainty in market factors and assumptions in price determination and other risks.

As described in Note 2.5, ‘Recognition and Measurement of Financial Instruments’, diverse valuation techniques are used to determine the fair value of financial instruments, from generally accepted market valuation models to internally developed valuation models that incorporate various types of assumptions and variables.

3.3 Impairment of financial assets

In accordance of Korean IFRS No.1109, the provision for impairment for financial assets are based on assumptions about risk of default and expected loss rates. The Group uses judgment in making these assumptions and selecting the inputs to the impairment calculation based on the Group’s past history, existing market conditions as well as forward-looking estimates at the end of each reporting period (Note 2.5).

3.4 Measurement of defined benefit obligation

The present value of the defined benefit liability depends on a number of factors that are determined on an actuarial basis using a number of assumptions. The assumptions used in determining the net cost (income) for pensions include the discount rate. Any changes in these assumptions will impact the carrying amount of the defined benefit liability. The Group determines the appropriate discount rate at the end of the reporting period. This is the interest rate that is used to determine the present value of estimated future cash outflows expected to be required to settle the defined benefit liability. In determining the appropriate discount rate, the Group considers the interest rates of high-quality corporate bonds that are denominated in the currency in which the pension benefits will be paid, and that have terms to maturity approximating to the terms of the related pension liability. Other key assumptions for defined benefit liability are based in part on current market conditions.

 

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Notes to the Consolidated Financial Statements

December 31, 2021 and 2020

 

 

4. Segment Information

4.1 Types of services from which each reportable segment derives its revenues

Management of the Group decides operating segment based on the information, which is to be reported to the Group’s chief executive officer, in order to allocate resources to the segment and evaluate performance of the segment. The Group’s operating segments consist of brokerage and wealth management, investment banking, trading and other business.

In accordance with Korean IFRS No.1108, reporting segments of the Group by type of services categories are as follows: