Hyundai Card Co., Ltd. and its subsidiaries Consolidated Financial Statements As of and For the Years Ended December 31, 2014 and 2013

ATTACHMENT: INDEPENDENT AUDITOR’S REPORT

Hyundai Card Co., Ltd.

Deloitte Anjin LLC 9F., One IFC, 10, Gukjegeumyung-ro Youngdeungpo-gu, Seoul 150-945, Korea

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INDEPENDENT AUDITORS’ REPORT English Translation of a Report Originally Issued in Korean

To the Shareholders and the Board of Directors of Hyundai Card Co., Ltd.: Report on the Financial Statements

We have audited the accompanying consolidated financial statements of Hyundai Card Co., Ltd. the (“Company”) and its subsidiaries, which comprise the consolidated statements of financial position as of December 31, 2014 and December 31, 2013, respectively, and the consolidated statements of comprehensive income, consolidated statements of changes in shareholders’ equity and consolidated statements of cash flows, all expressed in Korean won, for the years ended, and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Consolidated Financial statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with Korean International Financial Reporting Standards (“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.

Auditors’ Responsibility

Our responsibility is to express an audit opinion on these financial statements based on our audit. We conducted our audit in accordance with Korean Auditing Standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement, whether due to fraud or error.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Hyundai Card Co., Ltd. and its subsidiaries as of December 31, 2014, and December 31, 2013 and its financial performance and its cash flows for the years then ended in accordance with K-IFRS.

March 3, 2015

Notice to Readers

This report is effective as of March 3, 2015, the auditor’s report date. Certain subsequent events or circumstances may have occurred between the auditor’s report date and the time the auditor’s report is read. Such events or circumstances could significantly affect the financial statements and may result in modifications to the auditor’s report.

HYUNDAI CARD CO., LTD. AND ITS SUBSIDIARIES (the “Consolidated Entity”)

CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013

The accompanying consolidated financial statements, including all footnote disclosures, were prepared by and are the responsibility of the Consolidated Entity. Chung, Tae Young Chief Executive Officer

HYUNDAI CARD CO., LTD. AND ITS SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

AS OF DECEMBER 31, 2014 AND 2013 December 31, 2014 December 31, 2013 (Korean won) ASSETS: CASH AND DEPOSITS (Notes 5, 29, 30, and 31):

Cash and cash equivalents \ 167,697,056,564 \ 965,455,273,460 Deposits 33,028,250,000 33,031,500,000

Total cash and deposits 200,725,306,564 998,486,773,460

SECURITIES (Notes 6 and 31): Trading Securities 739,004,232,776 - Available-for-sale (AFS) securities 1,766,969,764 1,766,969,764

Total securities 740,771,202,540 1,766,969,764 CARD ASSETS (Notes 7, 8, 28, 30, and 31):

Card receivables, net of present value of discounts and deferred origination fees 6,901,493,380,783

6,383,211,792,320

Allowance for doubtful accounts (71,521,933,866) (70,105,553,680) Cash advances 837,547,597,115 849,422,262,762

Allowance for doubtful accounts (30,077,545,239) (31,313,461,768) Card loans, net of present value of discounts 3,046,695,716,404 2,701,390,003,560

Allowance for doubtful accounts (134,240,242,776) (103,438,269,110) Total card assets 10,549,896,972,421 9,729,166,774,084

PROPERTY AND EQUIPMENT (Notes 9 and 28):

Land 138,257,299,573 122,011,816,788 Buildings 113,265,523,657 79,195,772,062

Accumulated depreciation (8,792,114,539) (6,313,565,576) Vehicles 2,590,262,299 88,948,908

Accumulated depreciation (125,949,719) (38,353,100) Fixtures and equipment 211,900,465,338 150,980,674,674

Accumulated depreciation (124,045,253,624) (97,286,451,779) Finance lease assets - 3,334,009,504

Accumulated depreciation - (3,056,175,378) Construction in progress 23,380,082,412 33,125,461,350

Total property and equipment 356,430,315,397 282,042,137,453

OTHER ASSETS: Other accounts receivable (Notes 30 and 31) 116,605,521,297 94,513,815,009

Allowance for doubtful accounts (Note 8) (611,019,783) (1,030,119,271) Accrued revenue (Notes 30 and 31) 50,756,921,220 48,131,937,107

Allowance for doubtful accounts (Note 8) (1,348,989,201) (1,323,983,992) Advance payments 14,223,977,849 12,955,613,877

Allowance for doubtful accounts (Note 8) (650,322,306) (657,322,306) Prepaid expenses 45,029,725,258 46,967,290,940 Intangible assets (Notes 10 and 28) 133,667,230,921 127,029,551,626 Derivative assets (Notes 17, 30 and 31) 8,739,491,485 2,750,372,571 Deferred income tax assets (Note 24) 149,460,296,801 143,222,807,823 Guarantee deposits (Notes 30 and 31) 31,048,421,043 34,819,962,715 Others 2,674,605,943 2,035,111,023

Total other assets 549,595,860,527 509,415,037,122 Total Assets \ 12,397,419,657,449 \ 11,520,877,691,883

(Continued)

HYUNDAI CARD CO., LTD. AND ITS SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (CONTINUED)

AS OF DECEMBER 31, 2014 AND 2013

December 31, 2014 December 31, 2013 (Korean won) LIABILITIES: BORROWINGS:

Borrowings (Notes 11, 30, and 31) \ 200,000,000,000 \ 212,500,000,000 Debenture, net of discounts (Notes 12, 27, 30, and 31) 7,730,126,733,953 6,978,262,324,353

Total borrowings 7,930,126,733,953 7,190,762,324,353

OTHER LIABILITIES: Accounts payable (Notes 28, 30, and 31) 1,001,186,223,971 1,063,762,663,494 Accrued expenses (Notes 30 and 31) 214,281,445,423 191,925,249,569 Unearned revenue (Note 15) 364,854,106,867 393,154,182,657 Withholdings (Notes 30 and 31) 146,547,177,277 134,747,372,074 Finance lease liabilities (Notes 13, 30, and 31) - 298,002,314 Derivative liabilities (Notes 17, 30, and 31) 30,922,252,463 48,665,166,455 Current tax liability 42,028,995,360 33,669,310,842 Net defined benefit liability (Note 14) 19,884,606,576 3,367,411,536 Guarantee deposits received (Notes 30 and 31) 8,652,184,880 8,076,226,724 Provisions (Notes 16 and 26) 83,555,104,835 86,321,526,532

Total other liabilities 1,911,912,097,652 1,963,987,112,197 Total liabilities 9,842,038,831,605 9,154,749,436,550

SHAREHOLDERS’ EQUITY:

Capital stock (Note 18) 802,326,430,000 802,326,430,000 Capital surplus (Note 19) 57,704,443,955 57,704,443,955 Accumulated other comprehensive loss (Notes 21 and 24) (40,118,183,826) (5,856,733,562) Retained earnings (Notes 20 and 22) 1,735,468,135,715 1,511,954,114,940

Total shareholders’ equity 2,555,380,825,844 2,366,128,255,333 Total Liabilities and Shareholders’ Equity \ 12,397,419,657,449 \ 11,520,877,691,883

See accompanying notes to consolidated financial statements.

HYUNDAI CARD CO., LTD. AND ITS SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013

December 31, 2014 December 31, 2013 (Korean won) OPERATING REVENUE: Card income (Notes 28, 31, and 33) \ 2,515,798,917,810 \ 2,453,282,496,374

Interest income (Notes 31 and 32) 24,733,441,807 20,566,269,302 Gain on valuation and disposal of securities (Note 31) 216,125,077 81,187,900 Dividends income 346,064,145 351,635,696 Reversal of provision for unused credit limits (Note 16) 1,607,911,196 - Other operating revenue (Notes 31 and 34) 75,292,556,501 53,197,571,481 Total operating revenue 2,617,995,016,536 2,527,479,160,753

OPERATING EXPENSES:

Card expenses (Notes 28, 31, and 33) 1,041,284,584,839 1,028,249,651,605 Interest expenses (Notes 31 and 32) 305,884,066,293 312,928,664,959 General and administrative expenses (Notes 14,23, and 28) 647,012,616,878 636,477,645,013 Securitization expenses 354,729,081 325,819,518 Bad debt expense and loss on disposal of loans (Note 8) 265,852,688,656 247,746,973,428 Transfer to provision for unused credit limits (Note 16) - 1,111,380,052 Other operating expenses (Note 31 and 34) 57,583,152,511 80,714,349,715 Total operating expenses 2,317,971,838,258 2,307,554,484,290

OPERATING INCOME 300,023,178,278 219,924,676,463 NON-OPERATING INCOME :

Gain from sale of property and equipment and intangible assets 46,717,788 141,866,664 Reversal of impairment loss for intangible assets 6,262,020 11,000,000 Rental revenue (Note 28) 1,633,329,715 2,797,729,690 Miscellaneous gain 246,808,291 201,932,331 Total non-operating income 1,933,117,814 3,152,528,685

NON-OPERATING EXPENSES:

Loss from sale of property and equipment and intangible assets 62,283,827 2,545,917,969 Impairment loss of intangible assets 407,000,000 37,049,470 Donations 1,122,343,894 1,720,970,527 Miscellaneous loss 4,570,950 - Total non-operating expenses 1,596,198,671 4,303,937,966

INCOME BEFORE INCOME TAX EXPENSE 300,360,097,421 218,773,267,182 INCOME TAX EXPENSE (Note 24) 76,846,076,646 55,563,634,256 NET INCOME 223,514,020,775 163,209,632,926 OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:

Items not reclassified subsequently to profit or loss: (14,440,033,678) 3,989,251,358 Remeasurements of net defined benefit liability (14,440,033,678) 3,989,251,358 Items reclassified subsequently to profit or loss: (19,821,416,586) 6,658,763,358 Cash flow hedging gains (losses) (19,821,416,586) 6,658,763,358 Total other comprehensive (loss) income (34,261,450,264) 10,648,014,716

TOTAL COMPREHENSIVE INCOME \ 189,252,570,511 \ 173,857,647,642 EARNINGS PER SHARE (Note 25): Basic earnings per share \ 1,393 \ 1,017 Diluted earnings per share 1,393 1,017

See accompanying notes to consolidated financial statements.

HYUNDAI CARD CO., LTD. AND ITS SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013

Capital stock

Capital surplus

Accumulated other

comprehensive gain(loss)

Retained earnings Total

Paid-in capital

Other capital

(Korean won) Balance at January 1, 2013 \ 802,326,430,000 \ 45,399,364,539 \ 12,305,079,416 \(16,504,748,278) \ 1,348,744,482,014 \ 2,192,270,607,691 Total comprehensive

income:

Net income - - - - 163,209,632,926 163,209,632,926 Other comprehensive

income

Remeasurements of net defined benefit liability - - - 3,989,251,358

- 3,989,251,358 Cash flow hedging

income - - - 6,658,763,358 - 6,658,763,358 Balance at December 31,

2013 \ 802,326,430,000 \ 45,399,364,539 \ 12,305,079,416 \ (5,856,733,562) \ 1,511,954,114,940 \ 2,366,128,255,333

Balance at January 1, 2014 \ 802,326,430,000 \ 45,399,364,539 \ 12,305,079,416 \ (5,856,733,562) \ 1,511,954,114,940 \ 2,366,128,255,333 Total comprehensive

income:

Net income - - - - 223,514,020,775 223,514,020,775 Other comprehensive loss

Remeasurements of net defined benefit liability - - - (14,440,033,678)

- (14,440,033,678) Cash flow hedging

losses - - - (19,821,416,586) - (19,821,416,586)

Balance at December 31, 2014 \ 802,326,430,000 \ 45,399,364,539 \ 12,305,079,416 \(40,118,183,826)

\ 1,735,468,135,715 \ 2,555,380,825,844

See accompanying notes to consolidated financial statements.

HYUNDAI CARD CO., LTD. AND ITS SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013

2014 2013 (Korean won) CASH FLOWS FROM OPERATING ACTIVITIES:

Cash generated from operating activities (Note 29) \ (1,027,306,120,836) \ 433,161,321,380 Interest received 23,794,686,357 20,852,490,398 Interest paid (284,805,700,585) (287,912,166,505) Dividend received 346,064,145 351,635,696 Income tax paid (63,873,513,936) (63,284,530,687)

Net cash (used in) provided by operating activities (1,351,844,584,855) 103,168,750,282

CASH FLOWS FROM INVESTING ACTIVITIES: Disposal of AFS securities 61,979,100 81,187,900 Net decrease (increase) in bank deposit 4,550,000 (2,500,000) Disposal of property and equipment 59,785,800 183,243,052 Disposal of intangible assets - 2,280,308,566 Acquisition of property and equipment (71,059,831,292) (40,826,493,302) Acquisition of intangible assets (70,493,126,271) (67,168,908,441)

Net cash used in investing activities (141,426,642,663) (105,453,162,225)

CASH FLOWS FROM FINANCING ACTIVITIES: Increase in borrowings 2,500,000,000,000 4,705,000,000,000 Proceeds from issue of debentures 9,379,426,341,141 2,328,772,226,400 Repayment of borrowings (2,512,500,000,000) (4,980,000,000,000) Repayment of debentures (8,671,413,330,519) (1,877,579,836,190)

Net cash provided by financing activities 695,513,010,622 176,192,390,210

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (797,758,216,896)

173,907,978,267

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR (Note 29) 965,455,273,460

791,547,295,193

CASH AND CASH EQUIVALENTS, END OF YEAR (Note 29) \ 167,697,056,564

\ 965,455,273,460

See accompanying notes to consolidated financial statements.

HYUNDAI CARD CO., LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013

1. GENERAL:

Hyundai Card Co., Ltd. (the “Company” or the “Parent”), which is a controlling company in accordance with Korean International Financial Reporting Standards (“K-IFRS”) 1110, Consolidated Financial Statements, is engaged in the credit card business under the Specialized Credit Financial Business Law of Korea. On June 15, 1995, the Parent acquired the credit card business of Korea Credit Circulation Co., Ltd., and on June 16, 1995, Korean government granted permission to the Parent to engage in the credit card business. As of December 31, 2014, the Parent has approximately 6.77 million card members; 2.19 million registered merchants; and 154 marketing centers, branches and posts. As of December 31, 2014, the total common stock of the Parent is ￦802,326 million. The shareholders of the Parent and their respective ownerships as of December 31, 2014 and 2013, are as follows:

Shareholder

December 31, 2014 December 31, 2013

Number of shares Percentage of

ownership Number of shares Percentage of

ownership Hyundai Motor Co., Ltd. 59,301,937 36.96 59,301,937 36.96 Kia Motors Co., Ltd. 18,422,142 11.48 18,422,142 11.48 GE Capital Int’l Holdings 69,000,073 43.00 69,000,073 43.00 Hyundai Commercial Inc. 8,889,622 5.54 8,889,622 5.54 Others 4,851,512 3.02 4,851,512 3.02 Total 160,465,286 100.00 160,465,286 100.00

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (1) Basis of Preparation

The Hyundai Card Co., Ltd. and its subsidiaries (collectively, the “Consolidated Entity” or “Group”) maintain their official accounting records in the Republic of Korean won and prepare consolidated financial statements in conformity with Korean statutory requirements and K-IFRS, in Korean language (Hangul). Accordingly, these consolidated financial statements are intended for use by those who are informed about K-IFRS and Korean practices. Certain information included in the Korean language financial statements, but not required for a fair presentation of the Company’s financial position, operating results, changes in shareholders’ equity or cash flows is not presented in the accompanying consolidated financial statements.

The Consolidated Entity’s significant accounting policies applied for the accompanying consolidated financial statements are the same as the policies applied for the preparation of the consolidated financial statements for the year ended December 31, 2013, except for the effects from the introduction of new and revised accounting standards or interpretations as described below. The consolidated financial statements have been prepared on the historical cost basis, except for certain non-current assets and financial instruments that are measured at revalued amounts or fair values, as explained in the accounting policies below. Historical cost is generally based on the fair value of the consideration given in exchange for assets.

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1) Accounting standards and interpretations that were newly applied for the year ended December 31, 2014, and changes in the Company’s accounting policies are as follows: Amendments to K-IFRS 1032, Financial Instruments: Presentation The amendments to K-IFRS 1032 clarify the requirements relating to the offset of financial assets and financial liabilities. Specifically, the amendments clarify the meaning of ‘currently has a legally enforceable right of setoff’ and ‘simultaneous realization and settlement’. The amendments require retrospective application. The adoption of the amendments has no significant impact on the Group’s consolidated financial statements. Amendments to K-IFRSs 1110: Consolidated financial statements; 1112: Disclosures of interest in other entities; and 1027: Consolidated and separate financial statements The amendments to K-IFRS 1110 define an investment entity and introduce an exception from the requirement to consolidate subsidiaries for an investment entity. In terms of the exception, an investment entity is required to measure its interests in subsidiaries at fair value through profit or loss (“FVTPL”). The exception does not apply to subsidiaries of investment entities that provide services that relate to the investment entity’s investment activities. Consequential amendments to K-IFRS 1112 and K-IFRS 1027 have been made to introduce new disclosure requirements for investment entities. In general, the amendments require retrospective application, with specific transitional provisions. The adoption of the amendments has no significant impact on the Group’s consolidated financial statements. Amendments to K-IFRS 1036, Impairment of Assets The amendments to K-IFRS 1036 remove the requirement to disclose the recoverable amount of a cash-generating unit (CGU) to which goodwill or other intangible assets with indefinite useful lives had been allocated when there has been no impairment or reversal of impairment of the related CGU. Furthermore, the amendments introduce additional disclosure requirements applicable to when the recoverable amount of an asset or a CGU is measured at fair value, less costs of disposal. The amendments require retrospective application. The adoption of the amendments has no significant impact on the Group’s consolidated financial statements. Amendments to K-IFRS 1039, Financial Instruments: Recognition and Measurement The amendments to K-IFRS 1039 provide relief from the requirement to discontinue hedge accounting when a derivative designated as a hedging instrument is novated under certain circumstances. The amendments also clarify that any change to the fair value of the derivative designated as a hedging instrument arising from the novation should be included in the assessment and measurement of hedge effectiveness. The amendments require retrospective application. The adoption of the amendments has no significant impact on the Group’s consolidated financial statements. Enactment of K-IFRS 2121, Levies K-IFRS 2121 addresses the issue of when to recognize a liability to pay a levy. The interpretation defines a levy, and specifies that the obligating event that gives rise to the liability is the activity that triggers the payment of the levy, as identified by legislation. The interpretation provides guidance on how different levy arrangements should be accounted for; in particular, it clarifies that neither economic compulsion nor the going-concern basis of financial statements preparation implies that an entity has a present obligation to pay a levy that will be triggered by operating in a future period. K-IFRS 2121 requires retrospective application. The adoption of these amendments has no significant impact on the Group’s consolidated financial statements.

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2) The Group has not applied the following new and revised K-IFRS that have been issued but are not yet effective:

K-IFRS 1019, Defined Benefit Plans: Employee Contributions If the amount of the contributions is independent of the numbers of years of service, the Group is permitted to recognize such contributions as a reduction in the service cost in the period in which the related service is rendered. The amendments are effective for the annual periods beginning on or after July 1, 2014. Retrospective application is required. The amendments are effective for the annual periods beginning on or after July 1, 2014. Amendments to K-IFRS 1016: property, plant, and equipment The amendments to K-IFRS 1016 prohibit entities from using a revenue-based depreciation method for items of property, plant and equipment. The amendments to K-IFRS 1016 are effective for annual periods beginning on or after January 1, 2016

Amendments to K-IFRS 1038: Intangible Assets The amendments to K-IFRS 1038 clarified that the use of revenue-based methods to calculate the amortization of an asset is not appropriate unless the consumption of the expected future economic benefits is embodied in the asset. The amendments to K-IFRS 1038 are effective for annual periods beginning on or after January 1, 2016.

Amendments to K-IFRS 1111: Accounting for Acquisitions of Interests in Joint Operations The amendments to K-IFRS 1111 provide guidance on how to account for the acquisition of an interest in a joint operation in which the activities constitute a business as defined in K-IFRS 1103 Business Combinations. Specifically, the amendments state that the relevant principles on accounting for business combinations in K-IFRS 1103 and other standards should be applied. The same requirements should be applied to the formation of a joint operation if and only if an existing business is contributed to the joint operation by one of the parties that participate in the joint operation. A joint operator is also required to disclose the relevant information required by K-IFRS 1103 and other standards for business combinations. The amendments to K-IFRS 1111 apply prospectively for annual periods beginning on or after 1 January 2016.

K-IFRS annual improvements 2010-2012 cycle The annual improvements to K-IFRSs 2010-2012 cycle includes separation of definitions of a ‘performance condition’ and a ‘service condition’ (K-IFRS 1102, Share-Based Payment), classification and measurement of contingent consideration (K-IFRS 1103), and an amendment that a reconciliation of the total of the reportable segments’ assets to the entity’s assets should be disclosed if such amounts are regularly provided to the chief operating decision maker (K-IFRS 1108). The amendments are effective for annual periods beginning on or after July 1, 2014.

K-IFRS annual improvements 2011-2013 cycle

The annual improvements to K-IFRSs 2011-2013 cycle includes the exclusion of the formation of all types of joint arrangements as defined in K-IFRS 1111 (K-IFRS 1103), scope exception for measuring the fair value of a group of financial assets and financial liabilities on a net basis (K-IFRS 1113), and clarification of judgment that is needed to determine whether the acquisition of investment property is the acquisition of an asset, a group of assets, or a business combination (K-IFRS 1040). The amendments are effective for annual periods beginning on or after July 1, 2014.

The Consolidated Entity does not anticipate that these amendments referred above will have a significant effect on the Consolidated Entity’s consolidated financial statements and disclosures.

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(2) Significant Accounting Policies 1) Basis of Consolidation The consolidated financial statements incorporate the financial statements of the Company and entities (including structured entities) controlled by the Parent (and its subsidiaries). Control is achieved where the Company 1) has the power over the investee; 2) is exposed, or has rights, to variable returns from its involvement with the investee; and 3) has the ability to use its power to affect its returns. The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above. When the Company has less than a majority of the voting rights of an investee, it has power over the investee when the voting rights are sufficient to give it the practical ability to direct the relevant activities of the investee unilaterally. The Company considers all relevant facts and circumstances in assessing whether or not the Company’s voting rights in an investee are sufficient to give it power, including:

• the size of the Company’s holding of voting rights relative to the size and dispersion of holdings of the

other vote holders; • potential voting rights held by the Company, other vote holders or other parties; • rights arising from other contractual arrangements; and • any additional facts and circumstances that indicate the Company has, or does not have, the current

ability to direct the relevant activities at the time decisions need to be made, including voting patterns at previous shareholders’ meetings.

Income and expenses of subsidiaries acquired or disposed of during the year are included in the consolidated statement of comprehensive income from the effective date of acquisition to the effective date of disposal, as appropriate. Carrying amounts of the non-controlling interests in subsidiaries are adjusted by the changes in the proportion of the equity held by non-controlling interests after initial acquisition of non-controlling interests. Total comprehensive income of subsidiaries is attributed to the owners of the Company and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance. When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies in line with those used by the Company. All intragroup transactions, balances, income and expenses are eliminated in full on consolidation. Changes in the Company’s ownership interests in subsidiaries without loss of control are accounted for as equity transactions. The carrying amounts of the Company’s interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity and attributed to the owners of the Company. When the Parent loses control of a subsidiary, the profit or loss on disposal is calculated as the difference between (i) the aggregate of the fair value of the consideration received and the fair value of any retained interest and (ii) the previous carrying amount of the assets (including goodwill) and liabilities of the subsidiary and any non-controlling interests. When assets of the subsidiary are carried at revalued amounts or fair values and the related cumulative gain or loss has been recognized in other comprehensive income and accumulated in equity, the amounts previously recognized in other comprehensive income and accumulated in equity are accounted for as if the Parent had directly disposed of the relevant assets (i.e., reclassified to profit or loss or transferred directly to retained earnings). The fair value of any investment retained in the former subsidiary at the date when control is lost is recognized as the fair value on initial recognition for subsequent accounting under K-IFRS 1039 or, when applicable, the cost on initial recognition of an investment in an associate or a jointly controlled entity.

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2) Card assets

Card assets are amounts due from customers for services performed in the ordinary course of business. Card assets are initially measured at a fair value, including direct transaction cost; thereafter, it is measured at amortized cost using the effective interest rate method, except for the financial assets classified as at FVTPL.

① Card Receivables

The Consolidated Entity records card receivables when its cardholders make purchases from domestic and foreign merchants, and when cardholders of MasterCard International, Visa International and Diners Club International make purchases from domestic merchants. Commission from merchants for advance payments and commission from cardholders for installment payments and cash advances are recognized as revenue on an accrual basis. Card receivables with non-interest-bearing installment payment are initially recognized at fair value using a discounted cash flow. As interest rate and other factors that are considered for calculating the discounted cash flow of interest-bearing installment payments are different than those for non-interest-bearing installment payment, the Consolidated Entity independently determines the discount rates for non-interest-bearing installment payments with objective and reasonable method. ② Cash Advances Cash advance service allows cardholders to withdraw cash up to certain limits depending on card members’ credit rating in accordance with the Specialized Credit Financial Business Law. Fees related to cash advances are charged on the payment date, with a specific percentage of service charges, and interest income is accrued on a daily basis until repayment of cash advance. ③ Card Loans

The Consolidated Entity extends the card loans to its cardholders in accordance with the Specialized Credit Financial Business Law. Commission incomes are accrued on a daily basis based on a constant rate per cardholders’ credit rate until repayments of card loans.

3) Financial assets

A financial asset is recognized when the Consolidated Entity becomes a party to the contract and at initial recognition. A financial asset, excluding a financial asset at FVTPL, is measured at its fair value, plus or minus transaction costs that are directly attributable to the acquisition of the financial asset. Otherwise, the transaction cost that is directly attributable to the acquisition of the financial asset at FVTPL is recognized in profit or loss immediately when it arises. A regular-way purchase and sale of financial assets is recognized and derecognized at trade date. It is a purchase or sale of a financial asset under a contract whose terms require delivery of the asset within the time frame established generally by regulation or convention in the marketplace concerned. Financial assets are classified into the following specified categories: financial assets at FVTPL, held-to-maturity (“HTM”), AFS and loans and receivables. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition. ① Effective interest rate method

The effective interest rate method is used for calculating the amortized cost of a debt instrument and allocating interest income over the relevant period. The effective interest rate is the discounted rate used to estimate the net carrying amount of future cash receipts (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) throughout the expected life of the debt instrument, or, where appropriate, a shorter period, Interest income for debt instruments, except for those financial assets classified as at FVTPL, is recognized using an effective interest rate method.

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② Financial assets at FVTPL

Financial assets at FVTPL include financial assets held for trading or financial assets designated as at FVTPL upon initial recognition. A financial asset that is acquired or incurred principally for the purpose of selling or repurchasing in the near term and all derivatives, including embedded derivatives bifurcated from host contract (except for a derivative that is a designated and effective hedging instrument), are classified as held for trading. Financial assets at FVTPL are measured at fair value and the change in value is recognized in income (loss) for the period. A financial asset is classified as held for trading if:

• it has been acquired principally for the purpose of selling in the near term; • on initial recognition, it is part of a portfolio of identified financial instruments that the Company

manages together and has a recent actual pattern of short-term profit-taking; or • it is a derivative that is not designated and effective as a hedging instrument.

A financial asset, other than a financial asset held for trading, may be designated as at FVTPL upon initial recognition if:

• such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise;

• the financial asset forms part of a group of financial assets or financial liabilities, or both, which is managed, and its performance is evaluated on a fair value basis in accordance with the Consolidated Entity’s documented risk management or investment strategy, and information about the grouping is provided internally on that basis; or

• it forms part of a contract containing one or more embedded derivatives, and K-IFRS 1039 permits the entire combined contract (asset or liability) to be designated as at FVTPL.

Financial assets at FVTPL are stated at fair value, and any gains or losses arising on remeasurement are recognized in income (loss) for the period. ③ HTM investments

Non-derivative financial assets with fixed or determinable payments and fixed maturity dates that the Consolidated Entity has the positive intent and ability to hold to maturity are classified as HTM investments. HTM investments are measured at amortized cost using the effective interest rate method, less any impairment, with revenue recognized on an effective interest rate basis. ④ AFS financial assets

Non-derivative financial assets that are not classified as at HTM, held for trading, designated as at FVTPL or loans and receivables are classified as at financial assets AFS. Financial assets AFS are subsequently measured at fair value. Gains and losses arising from changes in fair value are recognized and accumulated in other comprehensive income, with the exception of interest calculated using the effective interest rate method and foreign exchange gains and losses on monetary AFS financial assets, which are recognized in income (loss) for the period. Where the AFS financial assets are disposed of or are determined to be impaired, the cumulative gains or losses previously accumulated in other comprehensive income are recognized income (loss) for the period. Dividends from AFS equity instruments are recognized in income (loss) for the period when the Consolidated Entity’s right to receive payment of the dividends is established. The AFS investments in equity instruments that do not have a quoted price in an active market for an identical instrument and their fair value are not reliably measurable and derivative assets that are linked to those investments and must be settled by delivery of such an equity instrument are measured at cost, net of identified impairment losses.

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⑤ Loans and receivables

Trade receivables, loans and other receivables that have fixed or determinable payments and are not quoted in an active market are classified as loans and receivables. Loans and receivables are measured at amortized cost using the effective interest rate method, less any impairment. Interest income is recognized by applying the effective interest rate, except for short-term receivables when the effects of discount would be immaterial. ⑥ Impairment of financial assets

Financial assets, other than those at FVTPL, are assessed for indicators of impairment at the end of each reporting period. Financial assets are considered to be impaired when there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been affected. For listed and unlisted equity investments classified as AFS, a significant or prolonged decline in the fair value of the security below its cost is considered to be objective evidence of impairment. For all financial assets classified as AFS, objective evidence of impairment could include:

• significant financial difficulty of the issuer or counterparty, • default or delinquency in interest or principal payments, • it becoming probable that the borrower will enter into bankruptcy or financial reorganization or, • an active market for financial assets is not available due to financial difficulties.

For certain categories of financial assets, such as card receivables, assets that are assessed not to be impaired individually are, in addition, assessed for impairment on a collective basis. Objective evidence of impairment for a portfolio of receivables could include the Consolidated Entity’s past experience of collecting payments and an increase in the number of delayed payments in the portfolio exceeding the average credit period, as well as observable changes in national or local economic conditions that correlate with default on receivables. For financial assets carried at amortized cost, the amount of the impairment loss recognized is 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. For financial assets measured at amortized cost, the amount of the impairment is recognized as the difference between the carrying amount of the asset and current value of estimated future cash flows, discounted similar to the current market rate. The impairment is not reversed in subsequent periods. When an AFS financial asset is considered to be impaired, cumulative gains or losses previously recognized in other comprehensive income are recognized in income (loss) for the period. For financial assets measured at amortized cost, if, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognized, the previously recognized impairment loss is reversed through income (loss) for the period to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortized cost would have been had the impairment not been recognized. In respect of AFS equity instruments, impairment losses previously recognized in income (loss) for the period are not reversed. Any increase in fair value subsequent to an impairment loss is recognized in other comprehensive income. In respect of AFS debt instruments, in a subsequent period, if the amount of the impairment loss increases and the increase can be related objectively to an event occurring after the impairment was recognized, the previously recognized impairment loss is reversed through income (loss) for the period.

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⑦ Derecognition of financial assets

The Consolidated Entity derecognizes a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Consolidated Entity neither transfers nor retains substantially all the risks and rewards of ownership, but continues to control the transferred asset, the Consolidated Entity recognizes its retained interest in the asset and an associated liability for amounts it may have to pay. If the Consolidated Entity retains substantially all the risks and rewards of ownership of a transferred financial asset, the Consolidated Entity continues to recognize the financial asset and also recognize a collateralized borrowing for the proceeds received. If the Consolidated Entity derecognizes the entire financial asset, the difference between total amount received, plus the sum of cumulative income recognized in other comprehensive income and the book value of the asset is recognized in income (loss) for the period. If the Consolidated Entity does not derecognize the entire financial asset (for example, the Consolidated Entity holds either an option to repurchase a certain portion of the asset or remaining equity, which does not allow the Consolidated Entity to hold most of the risks and benefits from the financial asset or the Consolidated Entity controls assets), the Consolidated Entity divides the book value of financial assets into a recognized part and a unrecognized part in accordance with relative fair value of each portion. The difference between total received amount for derecognized portion of the asset, plus the sum of cumulative income recognized in other comprehensive income and the book value of the asset is recognized in income (loss) for the period. Cumulative income recognized in other comprehensive income is divided into a recognized part and a unrecognized part in accordance with relative fair value of each portion. 4) Property, plant and equipment Property, plant and equipment are stated at cost, less subsequent accumulated depreciation and accumulated impairment losses. The cost of an item of property and equipment is directly attributable to its purchase or construction, which 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. It also includes the initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located. Subsequent costs are recognized in the carrying amount of an asset or as a separate asset if it is probable that future economic benefits associated with the assets will flow into the Consolidated Entity and the cost of an asset can be measurable. Routine maintenance and repairs are expensed as incurred. The Consolidated Entity does not depreciate land. Depreciation expense is computed using the straight-line method based on the estimated useful lives of the assets as follows:

Estimated useful lives Building 40 years Fixtures and equipment 4 years Vehicles 4 years

Each part of property and equipment with a cost that is significant in relation to the total cost is depreciated separately. The Consolidated Entity assesses the depreciation method, the estimated useful lives and residual values of property and equipment at the end of each reporting period. If expectations differ from previous estimates, the changes are accounted for as a change in an accounting estimate. When future economic benefits are not expected through the use or disposition of property and equipment, the Consolidated Entity removes the book value of the assets from the consolidated statements of financial position. The difference between the amounts received from the disposal and the book values of assets is recognized as income (loss) of the period when the assets are removed.

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5) Lease A lease is classified as a finance lease whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases. The Consolidated Entity recognizes the lesser of the current value of minimum lease payment and the fair value of lease assets as capital lease assets and capital lease liabilities. Lease payments are apportioned to each period between interest expense and the reduction of lease liabilities to produce a constant periodic rate of interest on the remaining balance of lease liability. Financial cost, except for certain qualifying assets in accordance with the Consolidated Entity’s accounting policies, is recognized immediately as an expense in the period. Any adjustments to lease payment are recognized as cost when it occurred. 6) Intangible assets ① Intangible assets acquired separately

Intangible assets with finite useful lives that are acquired separately are carried at cost, less accumulated amortization and accumulated impairment losses. Amortization is recognized on a straight-line basis over their estimated useful lives. The estimated useful lives and amortization method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis. Intangible assets with indefinite useful lives that are acquired separately are carried at cost, less accumulated impairment losses. ② Internally generated intangible assets - research and development expenditure

Expenditure on research activities is recognized as an expense in the period in which it is incurred. Expenditure arising from development (or from the development phase of an internal project) is recognized as an intangible asset if, only if, the development project is designed to produce new or substantially improved products, and the Consolidated Entity can demonstrate the technical and economic feasibility and measure reliably the resources attributable to the intangible asset during its development. The amount initially recognized for internally generated intangible assets is the sum of the expenditure incurred from the date when the intangible asset first meets the recognition criteria listed above. Where no internally generated intangible asset can be recognized, development expenditure is recognized in income (loss) for the period when it is incurred. Subsequent to initial recognition, internally generated intangible assets are reported at cost, less accumulated amortization and accumulated impairment losses, on the same basis as intangible assets that are acquired separately. ③ Intangible assets acquired in a business combination Intangible assets that are acquired in a business combination are recognized separately from goodwill and are initially recognized at their fair value at the acquisition date (which is regarded as their deemed cost). Subsequent to initial recognition, intangible assets acquired in a business combination are reported at cost less accumulated amortization and accumulated impairment losses, on the same basis as intangible assets that are acquired separately.

④ Disposal of intangible assets

If future economic benefits are not expected through the use or disposition of the intangible assets, the Consolidated Entity removes the book value of the assets from the consolidated financial statements. The difference between the amounts received from the disposal of intangible assets and the book values of the assets are recognized as income (loss) of the period when the assets are removed.

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7) Impairment of tangible and intangible assets, other than goodwill At the end of each reporting period, the Consolidated Entity reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Consolidated Entity estimates the recoverable amount of the CGU to which the asset belongs. Where a reasonable and consistent basis of allocation can be identified, assets for which recoverable amounts are not individually estimated are also allocated to individual CGUs, or otherwise, they are allocated to the smallest group of CGUs for which a reasonable and consistent allocation basis can be identified. Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment at least annually and whenever there is an indication that the assets may be impaired. Recoverable amounts are the higher of fair value, less costs to sell, and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pretax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. If the recoverable amount of an asset (or a CGU) is estimated to be less than its carrying amount, the carrying amount of the asset (or the CGU) is reduced to its recoverable amount. An impairment loss is recognized immediately in income (loss) for the period. If impairment recognized in prior periods is reversed, the book value of the individual assets (or CGU) is the smaller of the carrying amount of the recoverable amount or the book value that the impairment would not have recognized in prior periods and the reversal of impairment loss is recognized immediately in income (loss) for the period at that time. 8) Provisions Provisions are recognized when the Consolidated Entity has a present obligation (legal or constructive) as a result of a past event, it is probable that the Consolidated Entity will be required to settle the obligation and the amount of the obligation is reliably estimated. The amounts recognized as a provision are the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (where the effect of the time value of money is material). When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognized as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably. At the end of each reporting period, the remaining provision balance is reviewed and assessed to determine if the current best estimate is being recognized. If the existence of an obligation to transfer economic benefit is no longer probable, the related provision is reversed during the period.

9) Financial liabilities and equity instruments ① Classification as debt or equity

Debt and equity instruments are classified as either financial liabilities or equity in accordance with the substance of the contractual arrangement and the definition of financial liabilities and equity instruments.

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② Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Company are recognized as the proceeds are received, net of direct issue costs. Treasury shares transactions are deducted directly from equity. Profit or loss arising from purchases and sales, issuances, and incinerations of treasury shares are not recognized in income (loss) for the period. ③ Compound instruments

The component parts of compound instruments issued by the Consolidated Entity are allocated into financial liabilities and equity in accordance with the definition of the financial asset and liability. Convertible option that can be settled by exchanging financial asset, such as fixed amount of cash for the fixed number of treasury shares, is equity instruments. At the date of issue, the fair value of the liability component is estimated using the prevailing market interest rate for a similar non-convertible instrument. This amount is recorded as a liability on an amortized cost basis using the effective interest rate method, until extinguished upon conversion or at the instrument’s maturity date. The equity component is determined by deducting the amounts of the liability component from the fair value of the compound instrument as a whole. This is recognized and included in equity, net of income tax effects, and is not subsequently remeasured. ④ Financial liabilities

A financial liability is recognized when the Consolidated Entity becomes a party to the contract and at initial recognition. A financial liability, other than financial liability at FVTPL, is measured at its fair value, plus or minus transaction costs that are directly attributable to the issue of the financial liability. Otherwise, the transaction cost that is directly attributable to the issue of the financial liability at FVTPL is recognized in income (loss) for the period immediately when it arises. Financial liabilities are classified as either financial liabilities at FVTPL or other financial liabilities. ⑤ Other financial liabilities Other financial liabilities are subsequently measured at amortized cost using the effective interest rate method, with interest expense recognized on an effective interest rate method. The effective interest rate method is used for calculating the amortized cost of a financial liability and allocating interest expense over the relevant period. The effective interest rate is the discounted rate used to estimate the net carrying value of future cash payment, including commission and points to be paid or received, transaction cost and other premium or discounts throughout the expected life of financial liability, or, where appropriate, a shorter period. ⑥ Derecognition of financial liabilities

The Consolidated Entity derecognizes financial liabilities when, and only when, the Consolidated Entity’s obligations are discharged, canceled or expired. On derecognition of a financial liability in its entirety, the difference between the carrying amount and the consideration received is recognized in income (loss) for the period.

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10) Derivative instruments The Consolidated Entity enters into a variety of derivative contracts, including interest rate swaps and currency swaps, to manage its exposure to interest rate and foreign exchange rate risk. Derivatives are initially recognized at fair value at the date the derivative contract is entered into and are subsequently remeasured to their fair value at the end of each reporting period. Gain or loss from the change in fair value is recognized in income (loss) for the period immediately, unless the derivative is designated and effective as a hedging instrument; in such case, the timing of the recognition in profit or loss depends on the nature of the hedge relationship. A derivative with a positive fair value is recognized as a financial asset, and a derivative with a negative fair value is recognized as a financial liability. ① Embedded derivatives

When economic characteristics and risks of an embedded derivative are not closely related to the host contract and a separate instrument with the same terms as the embedded derivative would meet the definition of a derivative and the changes in fair value of hybrid contract are not recognized in income (loss) for the period, the Consolidated Entity accounts for the embedded derivative separately from the host contract. ② Hedge accounting The Consolidated Entity designates certain derivative instruments as cash flow hedges. At the inception of the hedge relationship, the Consolidated Entity documents the relationship between the hedging instrument and the hedged item, along with its risk management objectives and its strategy for undertaking various hedge transactions. Furthermore, at the inception of the hedge and on an ongoing basis, the Consolidated Entity documents whether the hedging instrument is highly effective in offsetting changes in cash flows of the hedged item.

③ Cash flow hedges

The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognized in other comprehensive income. The gain or loss relating to the ineffective portion is recognized immediately in income (loss) for the period, and is included in the other operating revenue or expenses line item. Amounts previously recognized in other comprehensive income and accumulated in equity are reclassified to income (loss) for the period when the hedged item is recognized in income (loss) for the period. Hedge accounting is discontinued when the Consolidated Entity revokes the hedging relationship; when the hedging instrument expires or is sold, terminated or exercised; or it no longer qualifies for hedge accounting. Any gain or loss accumulated in equity at that time remains in equity and is recognized when the forecasted transaction is ultimately recognized in profit or loss. When a forecasted transaction is no longer expected to occur, the gain or loss accumulated in equity is recognized immediately in profit or loss. 11) Share capital

Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. Stock issuance costs are incremental costs directly attributable to the issue of equity instruments and are deducted on the initial recognition of the equity instruments. Where the Parent or its subsidiary purchases any shares of the Parent or its subsidiary, the consideration paid is deducted from shareholders’ equity as treasury shares, until they are canceled. Where such shares are subsequently sold or reissued, any consideration received is included in shareholders’ equity.

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12) Commission revenue

① Fees that are a part of the financial instruments’ effective interest rate Fees that are a part of the effective interest rate of a financial instrument are treated as an adjustment to the effective interest rate. Such fees include compensation for activities, such as evaluating the borrower’s financial condition; evaluating and recording guarantees, collateral and other security arrangements; negotiating the terms of the instrument; preparing and processing documents; and closing the transaction, as well as origination fees received on issuing financial liabilities measured at amortized cost. These fees are deferred and recognized as an adjustment to the effective interest rate. However, in case the financial instrument is classified as a financial asset at FVTPL, the relevant fee is recognized as revenue when the instrument is initially recognized. ② Commission from significant act performed

The recognition of revenue is postponed until the significant act is executed. ③ Unearned revenue from point programs (customer loyalty program)

The Consolidated Entity operates customer loyalty program to provide customers with incentives to buy their goods or services. If a customer buys goods or services, the Consolidated Entity grants the customer awards credits (often described as ‘points’). The customer can redeem the award credits for awards, such as free or discounted goods or services. The awards credits are accounted separately as identifiable component of the sales transaction(s) in which they are granted (the ‘initial sales’). The fair value of the consideration received or receivable in respect of the initial sale shall be allocated between the award credits and the other components of the sale. If the Consolidated Entity supplies the awards itself, it shall recognize the consideration allocated to award credits as revenue when award credits are redeemed and it fulfills its obligation to supply awards. The amount of revenue recognized shall be based on the number of award credits that have been redeemed in exchange for awards related to the total number expected to be redeemed.

If the third party supplies the awards, the Consolidated Entity shall assess whether it is collecting the consideration allocated to the award credits on its own account (as the principal in the transaction ) or on behalf of the third party (as agent for the third party). The amount of revenue recognized shall be net amount retained on its own account.

13) Interest income and expense

Using the effective interest rate method, the Consolidated Entity recognizes interest income and expense in the consolidated statements of comprehensive income. Effective interest rate method calculates the amortized cost of financial assets or liabilities and allocates interest income or expense over the relevant period. The effective interest rate discounts the expected future cash in and out through the expected life of financial instruments, or, if appropriate, through shorter period, to net carrying amount of financial assets or liabilities. When calculating the effective interest rate, the Consolidated Entity estimates future cash flows considering all contractual financial instruments, except the loss on future credit risk. Also, effective interest rate calculation includes redemption costs, points (part of the effective interest rate) that are paid or earned between contracting parties, transaction costs and other premiums or discounts. It is assumed that the cash flows and the expected existing period of aggregation of homogeneous financial instruments are reliably estimable. However, in the exception that cash flow of financial instruments (or aggregation of homogeneous financial instruments) or the estimated maturity is not reliably estimable, the effective interest rate is calculated using the contractual terms of cash flows for the entire contract period. If financial instruments or aggregation of homogeneous financial instruments are impaired, the subsequent interest income is recognized based on the discount rate used in discounting future cash flows for the purpose of the measurement of impairments.

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14) Dividend revenue

Dividend income from investments is recognized when the shareholder’s right to receive the payment of dividends has been established. 15) Foreign currency translation

The individual financial statements of the consolidated entities are presented in the currency of the primary economic environment in which the Company operates (its functional currency). For the purpose of the consolidated financial statements, the results of operations and financial position of each entity are expressed in Korean won, which is the functional currency of the Parent and the presentation currency for the consolidated financial statements. In preparing the financial statements of the individual entities, transactions in currencies other than the entity’s functional currency (foreign currencies) are recognized at the rates of exchange prevailing at the date of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated. Exchange differences are recognized in income (loss) for the period in which they arise, except for exchange differences on transactions entered into in order to hedge certain foreign currency risks. See Note 2 and 10 for hedging accounting policies.

16) Retirement benefit costs Contributions to defined contribution plans are recognized as an expense when employees have rendered service entitling them to the contributions. For defined benefit plans, the cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being carried out at the end of each reporting period. The present value of defined benefit obligations is determined by the discount rate that reflects the current rate of return on a high-quality corporate bond (or, in countries where there is no deep market in such bonds, government bonds) of equivalent term and currency to the plan liabilities.

Actuarial gains and losses are changes in the present value of the defined benefit obligation resulting from experience adjustments (the effects of differences between the previous actuarial assumptions and what has actually occurred) and the effects of changes in actuarial assumptions. Past service cost is recognized immediately to the extent that the benefits are already vested or, otherwise, is amortized on a straight-line basis over the average period until the benefits become vested. The retirement benefit obligation recognized in the consolidated statements of financial position represents the present value of the defined benefit obligation, as adjusted for unrecognized actuarial gains and losses and unrecognized past service cost and as reduced by the fair value of plan assets. Any asset resulting from this calculation is limited to unrecognized actuarial losses and past service cost, plus the present value of available economic benefits of refunds and reductions in future contributions to the plan. A liability for a termination benefit is recognized at the earlier of when the entity can no longer withdraw the offer of the termination benefit or when the entity recognizes any related restructuring costs. 17) Taxation Income tax consists of current tax and deferred tax. ① Current tax

The tax currently payable is based on taxable income for the period. Taxable income differs from income (loss) before tax expenses as reported in the consolidated statement of comprehensive income because of items of income or expense that are taxable or deductible in other periods. The Consolidated Entity’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.

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② Deferred tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the consolidated financial statements and the corresponding tax bases used in the computation of taxable income. Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred income tax assets are generally recognized for all deductible temporary differences to the extent it is probable that taxable income will be available against which those deductible temporary differences can be utilized. Such deferred tax assets and liabilities are not recognized if the taxable or deductible temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable income (taxable deficit) nor the accounting income. Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries and associates and interests in joint ventures, except where the Consolidated Entity is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognized to the extent it is probable that there will be sufficient taxable income against which the benefits of the temporary differences can be utilized and they are expected to reverse in the foreseeable future. The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent it is no longer probable that sufficient taxable income will be available to allow all or part of the asset to be recovered. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset is realized, 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 tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Consolidated Entity expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities. The Consolidated Entity shall offset deferred tax assets and deferred tax liabilities if, and only if, the Consolidated Entity has a legally enforceable right to set off current tax assets against current tax liabilities and the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities that intend either to settle current tax liabilities and assets on a net basis or realize the assets and settle the liabilities simultaneously in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered. For the purpose of measuring deferred tax liabilities and deferred tax assets for investment properties that are measured using the fair value model, the carrying amounts of such properties are presumed to be recovered entirely through sale, unless the presumption is rebutted. The presumption is rebutted when the investment property is depreciable and is held within a business model whose objective is to consume substantially all of the economic benefits embodied in the investment properties over time, rather than through sale. ③ Current tax and deferred tax for the year

Current tax and deferred tax are recognized in profit or loss, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which case the current tax and deferred tax are also recognized in other comprehensive income or directly in equity. Where current tax or deferred tax arises from the initial accounting for a business combination, the tax effect is included in the accounting for the business combination.

18) Earnings per share

Basic earnings per share is calculated by dividing net profit from the period available to common shareholders by the weighted-average number of common shares outstanding during the year. Diluted earnings per share are calculated using the weighted-average number of common shares outstanding, adjusted to include the potentially dilutive effect of common equivalent shares outstanding.

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19) Fair value

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Consolidated Entity takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in these consolidated financial statements is determined on such a basis, except for share-based payment transactions that are within the scope of K-IFRS 1102; leasing transactions that are within the scope of K-IFRS 1017, Leases; and measurements that have some similarities to fair value, but are not fair value, such as net realizable value in K-IFRS 1002, Inventories, or value in use in K-IFRS 1036.

In addition, for financial reporting purposes, fair value measurements are categorized into Levels 1, 2 or 3, based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:

• Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the

entity can access at the measurement date; • Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the

asset or liability, either directly or indirectly; and • Level 3 inputs are unobservable inputs for the asset or liability.

3. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION

UNCERTAINTY: In the application of the Consolidated Entity’s accounting policies, which are described in Note 2, management is required to make judgments, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

(1) Critical judgments in applying accounting policies

The following are the critical judgments, apart from those involving estimations (see Note 3(2)) that the directors have made in the process of applying the Consolidated Entity’s accounting policies and that have the most significant effect on the amounts recognized in the consolidated financial statements. 1) Judgments in applying consolidation

The Parent has a 0.9% ownership interest in Privia Third Securitization Specialty Co., Ltd. and a 0.5% ownership interest in Privia Fourth Securitization Specialty Co., Ltd. and Privia Fifth Securitization Specialty Co., Ltd.. The directors of the Parent made an assessment as at the date of initial application of K-IFRS 1110 (January 1, 2013) as to whether the Parent has control over Privia Third Securitization Specialty Co., Ltd.,, Privia Fourth Securitization Specialty Co., Ltd., and Privia Fifth Securitization Specialty Co., Ltd., in accordance with the new definition of control and the related guidance set out in K-IFRS 1110. It is concluded that the Parent has control over subsidiaries as it involves in the objectives and design of the subsidiaries and is exposed to their parts of risks and rewards. Also, all the decision-making processes of the subsidiaries are operated on autopilot by provisions and articles of association and the Parent is considered to have an ability to use power because the Parent has control over the changes of provisions and articles of association. Therefore, the directors concluded that it has control over the subsidiaries. Details of this control assessment are set out in Note 4.

- 17 -

(2) Key sources of estimation uncertainty

Critical accounting judgment and key sources of estimation uncertainty at the end of reporting period having significant risk factors that can incur the material changes in the book value of assets and liabilities of the Consolidated Entity for the following fiscal year are as follows: 1) Allowance for Doubtful Accounts The Consolidated Entity determines and recognizes allowances for losses through impairment testing on credit card assets and other assets, such as other accounts receivable, advance payments and accrued income. The Consolidated Entity also recognizes provisions for losses on unused commitments. The accuracy of provisions for credit losses is determined by the risk assessment methodology and assumptions used for estimating expected cash flows of the borrower for allowances on individual loans and collectively assessing allowances for groups of loans and provisions for unused commitments. 2) Unearned revenue from point programs The Consolidated Entity provides its customers with incentives to buy goods or services by providing awards (customer loyalty programs) and allocates the fair value of the consideration received or receivable between the award credits granted (points) and the other components of the revenue transaction. The Consolidated Entity supplies the awards, such as discounted payments or free gifts. The consideration allocated to the award credits is measured by reference to their fair value, i.e., the amount for which the award credits could be sold separately. The fair value of the consideration allocated to the award credits is estimated by taking into account expected redemption rates, etc., and recognized as deferred revenue, until the Consolidated Entity fulfills its obligations to deliver awards to customers. The amount of revenue recognized is to be based on the number of award credits that have been redeemed in exchange for awards, relative to the total number expected to be redeemed. 3) Postemployment Benefits: Defined Benefit Plans The Consolidated Entity operates a defined benefit pension plan (“Plan”). The amount recognized as a defined benefit liability is the present value of the defined benefit obligation, less the fair value of plan assets at the end of the reporting period. The present value of defined benefit obligation is calculated annually by using actuarial assumptions, such as future increases in salaries, expected returns on plan assets, discount rate and others. The Plan has the uncertainty due to the nature of long-term plan. The defined benefit obligation as of December 31, 2014 and 2013, is ￦19,885 million and ￦3,367 million, respectively (see Note 14).

4) Fair Value Measurement of Financial Instruments As disclosed in Note 31, the fair value of financial instruments classified as certain level is measured using valuation techniques where significant inputs are not based on observable market data. The Consolidated Entity believes that valuation methods and assumptions used for measuring the fair value of financial instruments are reasonable and that the fair value recognized in the consolidated statements of financial position is appropriate.

- 18 -

4. SUBSIDIARIES:

(1) Details of the Company’s subsidiaries as of December 31, 2014 and 2013, are as follows:

Place of

incorporation and operation

Voting share (%)

Companies

Major operation December 31, 2014

December 31, 2013

End of reporting

year PRIVIA 2nd SPC Asset securitization Korea - 0.9 December PRIVIA 3rd SPC PRIVIA 4TH SPC PRIVIA 5TH SPC Money Market Trust (14)

Asset securitization Asset securitization Asset securitization Trust Financial Management

Korea Korea Korea Korea

0.9 0.5 0.5 100

0.9 - - -

January December December

-

All the subsidiaries above are classified as structured entities as they are designed such that voting or similar rights are not dominant factor in deciding who controls the entity.

The subsidiaries were established for the Consolidated Entity’s business activity. The Parent has the power over the subsidiaries due to the fact that the Parent involves in the objectives and design of the subsidiaries and is exposed to risks and rewards. Also, all the decision-making processes of the subsidiaries are operated on autopilot by provisions and articles of association. The Parent is considered to have an ability to use power because the Parent has control over the changes of provisions and articles of association. Therefore, the Parent includes the special-purpose entities under consolidation. Meanwhile, in case that default occurs by the subsidiaries related to derivative contracts hedging risks arising from debentures issued for asset securitization, counterparties of the derivative contracts can claim for reimbursement from the Parent.

(2) Summary of financial information of subsidiaries as of and for the years ended December 31, 2014 and

2013, are as follows (Unit: Korean won in millions):

December 31, 2014 Total

assets Total

liabilities Sales Net income Comprehensive

income PRIVIA 3RD SPC \ 450,569 \ 450,538 \ 33,203 \ - \ - PRIVIA 4TH SPC 312,464 319,087 21,975 - - PRIVIA 5TH SPC 300,265 300,265 1,407 - - Money Market Trust (14) 245,008 245,000 8 8 8

December 31, 2013 Total

assets Total

liabilities Sales Net income Comprehensive

income PRIVIA 2nd SPC \ 298,795 \ 299,033 \ 22,628 \ - \ - PRIVIA 3rd SPC 450,569 450,009 21,963 - -

(3) Summary of newly included subsidiaries as of December 31, 2014 and 2013, is as follows:

Companies Reason

PRIVIA 4th SPC Newly Established PRIVIA 5th SPC Newly Established Money Market Trust (14) Newly Established

(4) Summary of financial information of excluded subsidiaries as of December 31, 2014 and 2013, is as

follows:

Companies Reason PRIVIA 2nd SPC Liquidated

- 19 -

(5) Summary of investment in the unconsolidated structured entity is as follows:

1) Nature and extent of unconsolidated structured entity’s equity

The Consolidated Entity involves in the special-purpose company (SPC) through investments and the nature of the involvement is as follows: Unconsolidated entities that are classified as investment fund include investment trust and private equity fund. Investment trusts select and delegate management to investment managers and allocate investment operating profits by trust agreement. Private equity fund involves in business management, improvements in business structures, procurement of investment funds through private equity and allocation of profits to investors. As an investor of the investment fund, the Consolidated Entity recognizes dividend revenue and is exposed to the risk of principal loss. 2) As of December 31, 2014, total assets, the book value, maximum loss exposure, and net loss recognized in the financial statements are as follows. Maximum loss exposure includes future amounts such as investment assets, purchase contracts, and credit offerings.

Description Amounts

(Korean won in millions) Unconsolidated entity total assets \ 7,170,655 Assets recognized 140,063 Securities 140,063 Liabilities recognized - Loss incurred - Maximum loss exposures 140,063 Securities 140,063

5. CASH AND DEPOSITS:

(1) Details of cash and cash equivalents as of December 31, 2014 and 2013, are as follows (Unit: Korean won in millions):

December 31, 2014 December 31, 2013

Annual

interest rate (%) Amount Annual

interest rate (%)

Amount Current deposits - ￦ 101 - ￦ 151 Ordinary deposits - 87,446 - 176,104 Other cash equivalents - - 2.48~2.60 100,000 Time deposits 2.08 14,000 2.59 14,200 Other deposits - 66,150 2.50~2.75 675,000

￦ 167,697 ￦ 965,455 (2) Restricted deposits and others as of December 31, 2014 and 2013, are as follows (Unit: Korean won in

millions):

Type

Entity December 31,

2014 December 31,

2013

Restriction Deposits KB and others ￦ 19 ￦ 19 Guarantee deposits for overdraft Shinhan Bank and others 33,000 33,000 Secured deposits Mirae Asset Securities 10 13 Social enterprise fund Other financial assets

Korea Asset Management Corporation

6,885

9,246

Escrow account for the sales of Daewoo Engineering & Construction Co., LTD.’s shares

￦ 39,914 ￦ 42,278

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6. SECURITIES:

Securitiess as of December 31, 2014 and 2013, are as follows (Unit: Korean won in millions):

December 31, 2014 December 31, 2013 Trading: Treasury bonds ￦ 39,137 ￦ - Corporate bonds 515,300 -

Securities 140,063 - Other 44,504 -

Subtotal 739,004 - Financial assets AFS:

Unlisted shares investment 1,767 1,767 Total ￦ 740,771 ￦ 1,767

7. CARD ASSETS:

Card assets by customer as of December 31, 2014 and 2013, are as follows (Unit: Korean won in millions):

December 31, 2014

Principal Deferred

origination fees Present value of discount

Allowance for doubtful accounts Book Value

CARD ASSETS : Card receivables Households ￦ 6,301,454 ￦ (6,761) ￦ (6,644) ￦ (63,711) ￦ 6,224,338 Corporates 613,445 - - (7,811) 605,634 Cash advances Households 837,548 - - (30,078) 807,470 Card loans Households 3,047,465 - (770) (134,240) 2,912,455

Total ￦ 10,799,912 ￦ (6,761) ￦ (7,414) ￦ (235,840) ￦ 10,549,897

December 31, 2013

Principal Deferred

origination fees Present value of discount

Allowance for doubtful accounts Book Value

CARD ASSETS : Card receivables (*) Households ￦ 5,870,781 ￦ (7,183) ￦ (5,287) ￦ (61,803) ￦ 5,796,508 Corporates 524,912 (11) - (8,303) 516,598 Cash advances Households 849,422 - - (31,313) 818,109 Card loans (*) Households 2,702,253 - (863) (103,438) 2,597,952

Total ￦ 9,947,368 ￦ (7,194) ￦ (6,150) ￦ (204,857) ￦ 9,729,167

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8. ALLOWANCE FOR DOUBTFUL ACCOUNTS:

Changes in the allowance for doubtful accounts for the years ended December 31, 2014 and 2013, are as follows (Unit: Korean won in millions):

December 31, 2014 Card

receivables Cash

advances Card loans Loans

Other assets Total

Balance at January 1, 2014

￦ 70,105

￦ 31,313

￦ 103,438

￦ -

￦ 3,011

￦ 207,867

Bad debt expenses (2,081) (332) (443) - - (2,856) Bad debt recovered 678 907 296 - - 1,881 Disposition and

repurchase (31,597) (18,740) (35,551) - -

(85,888) Provision for allowance

for doubtful accounts

34,417

16,930

66,500

-

(401)

117,446 Balance at December 31,

2014 ￦ 71,522

￦ 30,078

￦ 134,240

￦ -

￦ 2,610

￦ 238,450

December 31, 2013

Card receivables

Cash advances

Card loans Loans

Other assets Total

Balance at January 1, 2013

￦ 65,652

￦ 33,785

￦ 81,374

￦ -

￦ 2,267

￦ 183,078

Bad debt expenses (1,765) (520) (604) - - (2,889) Bad debt recovered 712 970 301 - - 1,983 Disposition and

repurchase (35,114) (22,200) (34,275) - -

(91,589) Provision for allowance

for doubtful accounts

40,620 19,278 56,642

-

744

117,284 Balance at December 31,

2013 ￦ 70,105

￦ 31,313

￦ 103,438

￦ -

￦ 3,011

￦ 207,867

9. PROPERTY AND EQUIPMENT: (1) Property and equipment as of December 31, 2014 and 2013, are as follows (Unit: Korean won in millions):

December 31, 2014 December 31, 2013 Acquisition

cost Accumulated depreciation Book value

Acquisition cost

Accumulated depreciation

Book value

Land ￦ 138,257 ￦ - ￦ 138,257 ￦ 122,012 ￦ - ￦ 122,012 Buildings 113,266 (8,792) 104,474 79,196 (6,314) 72,882 Vehicles 2,590 (126) 2,464 89 (38) 51 Fixtures and equipment 211,900 (124,045) 87,855 150,981 (97,287) 53,694 Finance lease assets - - - 3,334 (3,056) 278 Construction in progress 23,380 - 23,380 33,125 - 33,125

Total ￦ 489,393 ￦ (132,963) ￦ 356,430 ￦ 388,737 ￦ (106,695) ￦ 282,042

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(2) The changes in book value of property and equipment for the years ended December 31, 2014 and 2013, are as follows (Unit: Korean won in millions):

December 31, 2014 Beginning

balance Acquisition Reclassification Disposal Depreciation Ending balance

Land ￦ 122,012 ￦ 15,761 ￦ 484 ￦ - ￦ - ￦ 138,257 Buildings 72,882 4,754 29,316 - (2,480) 104,474 Vehicles 51 2,501 - - (88) 2,464 Fixtures and equipment 53,694 29,234 39,104 (75) (34,102) 87,855 Finance lease assets 278 - - - (278) - Construction in progress

33,125 22,255 (32,000) 23,380

Total ￦ 282,042 ￦ 74,505 ￦ 36,904 ￦ (75) ￦ (36,946) ￦ 356,430

December 31, 2013 Beginning

balance Acquisition Reclassification Disposal Depreciation Ending balance

Land ￦ 122,012 ￦ - ￦ - ￦ - ￦ - ￦ 122,012 Buildings 60,331 7,315 7,062 - (1,826) 72,882 Vehicles 163 13 - (62) (63) 51 Fixtures and equipment 56,690 22,805 1,594 (2,260) (25,135) 53,694 Finance lease assets 1,389 - - - (1,111) 278 Construction in progress

23,798 18,203 (8,876) - - 33,125

Total ￦ 264,383 ￦ 48,336 ￦ (220) ￦ (2,322) ￦ (28,135) ￦ 282,042 10. INTANGIBLE ASSETS: (1) Intangible assets as of December 31, 2014 and 2013, are as follows (Unit: Korean won in millions):

December 31, 2014

Acquisition

cost Accumulated amortization

Accumulated impairment

Book value

Development cost ￦ 153,252 ￦ (54,542) ￦ - ￦ 98,710 Industrial property rights 195 (195) - - Others 18,572 (15,373) - 3,199 Construction in progress 11,144 - - 11,144 Membership 21,554 - (940) 20,614

Total ￦ 204,717 ￦ (70,110) ￦ (940) ￦ 133,667

December 31, 2013

Acquisition

cost Accumulated amortization

Accumulated impairment

Book value

Development cost ￦ 71,713 ￦ (36,279) ￦ - ￦ 35,434 Industrial property rights 195 (159) - 36 Others 16,830 (12,325) - 4,505 Construction in progress 65,899 - - 65,899 Membership 21,695 - (539) 21,156

Total ￦ 176,332 ￦ (48,763) ￦ (539) ￦ 127,030

- 23 -

(2) The changes in intangible assets for the years ended December 31, 2014 and 2013, are as follows (Unit: Korean won in millions):

December 31, 2014 Beginning

balance Acquisition Reclassification Disposal

Amortization Impairment Ending balance

Development cost ￦ 35,434 ￦ 53,651 ￦ 27,889 ￦ - ￦ (18,264) ￦ - ￦ 98,710 Industrial property rights

36 - - - (36) - -

Others 4,505 1,742 - - (3,048) - 3,199 Construction in progress

65,899 10,006 (64,761) - - - 11,144

Membership 21,156 - (141) - - (401) 20,614 Total ￦ 127,030 ￦ 65,399 ￦ (37,013) ￦ - ￦ (21,348) ￦ (401) ￦ 133,667

December 31, 2013 Beginning

balance Acquisition Reclassification Disposal

Amortization Impairment Ending balance

Development cost ￦ 34,747 ￦ 13,588 ￦ 4,936 ￦ (5,285) ￦ (12,552) ￦ - ￦ 35,434 Industrial property rights

76 - - - (40) - 36

Others 7,829 31 - (13) (3,342) - 4,505 Construction in progress

11,041 59,918 (5,060) - - -

65,899

Membership 20,971 244 - (33) - (26) 21,156 Total ￦ 74,664 ￦ 73,781 ￦ (124) ￦ (5,331) ￦ (15,934) ￦ (26) ￦ 127,030

11. BORROWINGS:

Borrowings as of December 31, 2014 and 2013, are as follows (Unit: Korean won in millions):

Borrowed from

Annual interest rates (%) Maturity

December 31, 2014

December 31, 2013

Commercial papers Borrowings Hana bank

and six others

3.23~3.96

2015.02.23~ 2016.04.01

￦ 200,000

￦ 215,500

12. DEBENTURE: (1) Debenture issued by the Consolidated Entity and outstanding as of December 31, 2014 and 2013, are as

follows (Unit: Korean won in millions):

Annual interest rates (%) Maturity December 31, 2014 December 31 2013 Current portion of long-

term debentures

3.02~5.68, 1M USD LIBOR+1.50

2015.01.19~ 2015.12.27

￦ 1,922,680 ￦ 1,701,413

Long-term debentures

2.21~5.50, 1M USD LIBOR+0.55

2016.01.08~ 2020.10.29

5,817,768 5,284,120

7,740,448 6,985,533 Discounts on debenture (10,321) (7,271)

Debenture, net ￦ 7,730,127 ￦ 6,978,262

The outstanding debenture is non-guaranteed corporate bonds, with their principals to be redeemed by installment or at maturity. Bond issuance costs are recorded as discounts on debenture and amortized using the effective interest rate method.

- 24 -

(2) The redemption schedule for the debenture is as follows (Unit: Korean won in millions):

Period Amount to be redeemed as of December 31, 2014

2015.01.01~2015.12.31 ￦ 1,922,680 2016.01.01~2016.12.31 1,710,000 2017.01.01~2017.12.31 2,376,768 2018.01.01~2018.12.31 1,071,000

2019.01.01 and after 660,000 ￦ 7,740,448

Period Amount to be redeemed as of December 31, 2013

2014.01.01~2014.12.31 ￦ 1,701,413 2015.01.01~2015.12.31 1,905,120 2016.01.01~2016.12.31 1,400,000 2017.01.01~2017.12.31 1,068,000

2018.01.01 and after 911,000 ￦ 6,985,533

13. FINANCE LEASE LIABILITIES: (1) Finance lease liabilities of December 31, 2014 and 2013, are as follows (Unit: Korean won in millions):

December 31, 2014 December 31, 2013

Minimum lease payments

Present value of minimum lease

payments

Minimum lease

payments

Present value of minimum lease

payments Less than 1 year ￦ - ￦ - ￦ 301 ￦ 298

1~5 years - - - - Present value discounts - (3) Present value ￦ - ￦ 298

14. RETIREMENT BENEFIT PLAN:

(1) Defined Contribution Plan

The expense recognized in the consolidation statements of comprehensive income related to postemployment benefit plan under the defined contribution plan for the years ended December 31, 2014 and 2013, are as follows (Unit: Korean won in millions):

December 31, 2014 December 31, 2013 Defined contribution plan ￦ 55 ￦ 26

(2) Net Employee Benefits Liability

The details of net employee benefits liability as of December 31, 2014 and 2013, are as follows (Unit: Korean won in millions):

December 31, 2014 December 31, 2013 Net defined benefit obligation ￦ 16,332 ￦ 3,367 Long term employee benefits 3,553 - Total ￦ 19,885 ￦ 3,367

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(3) Defined benefit plan

1) General

The Consolidated Entity operates a defined benefit plan that is linked to final payment. Plan assets mainly consist of deposits and are exposed to risk of fall in interest rate.

2) The amounts recognized in the consolidated statements of financial position related to retirement

benefit obligation as of December 31, 2014 and 2013, are as follows (Unit: Korean won in millions):

December 31, 2014 December 31, 2013 Present value of defined benefit obligation ￦ 69,740 ￦ 46,403 Fair value of plan assets (53,379) (43,006) Transferred to National Pension Fund (29) (30) Retirement benefit obligation ￦ 16,332 ￦ 3,367

3) Net defined benefit obligation

Changes in present value of net defined benefit obligation for the years ended December 31, 2014 and 2013, are as follows (Unit: Korean won in millions):

December 31, 2014 Present value of the

defined benefit obligation Plan assets

National Pension Fund

Net defined benefit obligation

Beginning balance ￦ 46,403 ￦ (43,006) ￦ (30) ￦ 3,367 Contributions from the

employer

- (12,990) - (12,990) Current service cost 9,714 - - 9,714 Interest expense (income) 1,751 (1,448) - 303 Return on plan assets,

excluding amounts included in interest income above

- 344 -

344 Actuarial gains and losses

arising from changes in demographic assumptions

4,658 - - 4,658 Actuarial gains and losses

arising from changes in financial assumptions

5,740 - -

5,740 Actuarial gains and losses

arising from changes in experience adjustments

8,272 - - 8,272 Transfer of employees

between the Company and its related companies

199

410 -

609 Benefits paid (6,997) 3,311 1 (3,685) Ending balance ￦ 69,740 ￦ (53,379) ￦ (29) ￦ 16,332

- 26 -

December 31, 2013 Present value of the

defined benefit obligation Plan assets

National Pension Fund

Net defined benefit obligation

Beginning balance ￦ 44,474 ￦ (33,745) ￦ (34) ￦ 10,695 Contributions from the

employer

- (11,100) - (11,100) Current service cost 9,548 - - 9,548 Interest expense (income) 1,519 (1,087) - 432 Return on plan assets,

excluding amounts included in interest income above

-

38 -

38 Actuarial gains and losses

arising from changes in demographic assumptions

185 - - 185 Actuarial gains and losses

arising from changes in financial assumptions

(1,186) - -

(1,186) Actuarial gains and losses

arising from changes in experience adjustments

(4,316) - - (4,316) Transfer of employees

between the Company and its related companies

(169)

(190) -

(359) Benefits paid (3,652) 3,078 4 (570) Ending balance ￦ 46,403 ￦ (43,006) ￦ (30) ￦ 3,367

4) Details of fair values of plan assets as of December 31, 2014 and 2013, are as follows (Unit: Korean

won in millions):

December 31, 2014 December 31, 2013 Deposits ￦ 53,379 ￦ 43,006

5) Actuarial assumptions as of December 31, 2014 and 2013, are as follows:

December 31, 2014 December 31, 2013

Discount rate (%) 2.74 3.81 Expected rate of salary increase (Executive) (%) 5.00

5.00

Expected rate of salary increase (Employee) (%) 6.26

5.67

6) When all the other assumptions are maintained, if the significant actuarial assumptions change within

possible and reasonable ranges, the impacts on defined benefit obligations are as follows (Unit: Korean won in millions):

December 31, 2014 December 31, 2013 Increase Decrease Increase Decrease

100 basis point (bp) changes in discount rate ￦ (6,706) ￦ 7,942 ￦ (3,032) ￦ 3,462 1% changes in future wage growth rate 7,876 (6,777) 3,469 (3,092)

The above sensitivity analysis does not represent actual changes of defined benefit obligations as the actuarial assumptions do not change independently; this is because there are correlations between the actuarial assumptions. The present value of defined benefit obligations is determined by the same methods as the projected unit credit method used in calculating defined benefit obligations in the consolidated statements of financial position.

- 27 -

(4) Long Term Employee Benefits

1) Changes of present value of long-term employee benefits liability for the year ended December 31, 2014, are as follows (Unit: Korean won in millions):

December 31, 2014

Balance at beginning of year ￦ - Increase 3,553 Balance at end of year ￦ 3,553

2) When all the other assumptions are maintained, if the significant actuarial assumptions change within

possible and reasonable ranges, the impacts on long-term employee benefits are as follows (Unit: Korean won in millions):

December 31, 2014 Increase Decrease

100 basis point (bp) changes in discount rate ￦ (315) ￦ 363 1% changes in future wage growth rate 342 (304)

15. UNEARNED REVENUE:

Details of unearned revenue as of December 31, 2014 and 2013, are as follows (Unit: Korean won in millions):

December 31, 2014 December 31, 2013

Customer loyalty program ￦ 289,124 ￦ 318,730 Membership fee 75,657 74,327 Others 73 97

￦ 364,854 ￦ 393,154 16. PROVISION: (1) Details of provision as of December 31, 2014 and 2013, are as follows (Unit: Korean won in millions):

December 31, 2014 December 31, 2013

Provision for unused credit limits ￦ 45,889 ￦ 47,497 Provision for mileage points 22,744 22,944 Asset Retirement Obligation 5,537 - Other provisions 9,385 15,880

￦ 83,555 ￦ 86,321

(2) Provision for unused credit limits

For the years ended December 31, 2014 and 2013, the changes in provision for unused credit limits are as follows (Unit: Korean won in millions):

December 31, 2014 December 31, 2013

Balance at beginning of year ￦ 47,497 ￦ 46,386 Increase (decrease) (1,608) 1,111 Balance at ending of year ￦ 45,889 ￦ 47,497

- 28 -

(3) Provision for mileage points

For the years ended December 31, 2014 and 2013, the changes in provision for mileage points are as follows (Unit: Korean won in millions):

December 31, 2014 December 31, 2013 Point Customer loyalty Point Customer loyalty Beginning ￦ 8,399 ￦ 14,545 ￦ 3,494 ￦ 12,015 Increase (decrease) 3,654 (3,854) 4,905 2,530 Ending ￦ 12,053 ￦ 10,691 ￦ 8,399 ￦ 14,545

(4) Asset Retirement Obligation

For the years ended December 31, 2014 and 2013, the changes in asset retirement obligations are as follows (Unit: Korean won in millions):

December 31, 2014 Balance at beginning of year ￦ - Increase 5,024 Depreciation 513 Balance at ending of year ￦ 5,537

Asset retirement obligations are present value of the estimated restoration cost of the lease stores. The retirement obligation will be incurred at the end of the lease term. Average of four years of past experience studies and inflation rate are used to estimate the retirement obligation.

(5) Other provisions

For the years ended December 31, 2014 and 2013, the changes in other provisions are as follows (Unit: Korean won in millions):

December 31, 2014 December 31, 2013 Balance at beginning of year ￦ 15,880 ￦ 13,792 Increase (decrease) (6,495) 2,088 Balance at ending of year ￦ 9,385 ￦ 15,880

The above amounts as of December 31, 2014, include provision for deposits in escrow account of ￦2,234 million (see Note 26(5)) and provision for pending litigations of ￦7,151 million, in which provision includes deposits in escrow account of ￦4,467 million.

17. DERIVATIVES AND HEDGE ACCOUNTING:

(1) There are no derivative instruments held for trading as of December 31, 2014 and 2013.

(2) Cash flow hedge

Cash flow hedge is a hedge for the exposure to variability in cash flows that is attributable to a particular risk associated with a recognized asset or liability (such as all or some future interest payments on variable-rate debt) or a highly probable forecast transaction and could affect profit or loss. When applying cash flow hedge, the portion of the gain or loss on the hedging instrument that is determined to be an effective hedge shall be recognized in other comprehensive income, and the ineffective portion of the gain or loss on the hedging instrument shall be recognized in profit or loss. If a hedge of a forecast transaction subsequently results in the recognition of a financial asset or a financial liability, the associated gains or losses that were recognized in other comprehensive income shall be reclassified from equity to profit or loss as a reclassification adjustment in the same period or periods during which the hedged forecast cash flows affect profit or loss.

- 29 -

The Consolidated Entity shall discontinue prospectively if hedging instrument expires or is sold, terminated or exercised; the hedge no longer meets the criteria for hedge accounting; or the Consolidated Entity revokes the designation. The forecast transaction is no longer expected to occur, in which case any related cumulative gain or loss on the hedging instrument that has been recognized in other comprehensive income from the period when the hedge was effective shall be reclassified from equity to profit or loss as a reclassification adjustment. The Consolidated Entity uses interest rate swaps for hedging changes of cash flows in hedged items arising from changes in interest rates. The Consolidated Entity also uses currency swaps for hedging changes of cash flows in hedged items arising from changes in foreign exchange rates.

1) Fair value of cash flow hedge as of December 31, 2014 and 2013, are as follows (Korean won in

millions):

December 31, 2014 Unsettled

contract amount Assets Liabilities Interest rate swap ￦ 1,213,000 ￦ 80 ￦ 20,291 Cross-currency swap 758,448 8,659 10,631

Total ￦ 1,971,448 ￦ 8,739 ￦ 30,922

December 31, 2013 Unsettled

contract amount Assets Liabilities Interest rate swap ￦ 1,313,000 ￦ 2,750 ￦ 2,678 Cross-currency swap 703,533 - 45,987

Total ￦ 2,016,533 ￦ 2,750 ￦ 48,665 For transactions between local and foreign currencies, the unsettled contract amount of transaction is translated by applying the basic foreign exchange rate at the end of reporting period to the contract amount in foreign currencies. For transactions between foreign currencies and other foreign currencies, the unsettled contract amount is the amounts translated by applying the basic foreign exchange rate at the end of reporting period to the contract amount in foreign currencies purchased.

2) Expected cash flow for cash flow hedge

Maximum potential amounts of future payments for cash flow hedges by the period when the cash flows are expected to occur and when they are expected to affect income (loss) for the period are as follows (Korean won in millions):

December 31, 2014 December 31, 2013

Less than one month ￦ (1,744) ￦ (6,058) One month to three months (7,374) (11,559) Three months to twelve months (17,960) (12,541) One year to five years (86) (27,449)

￦ (27,164) ￦ (57,607) 18. CAPITAL STOCK: (1) Number of shares issued

The Parent’s authorized shares are 600,000,000 (￦5,000 per share), and 160,465,286 shares of common stocks (￦802,326 million) are issued as of December 31, 2014.

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19. CAPITAL SURPLUS:

Details of capital surplus as of December 31, 2014 and 2013, are as follows (Unit: Korean won in millions):

December 31, 2014 December 31, 2013 Share premium ￦ 45,399 ￦ 45,399 Other capital surplus 12,305 12,305

￦ 57,704 ￦ 57,704 20. RETAINED EARNINGS: (1) Details of retained earnings as of December 31, 2014 and 2013, are as follows (Unit: Korean won in

millions):

December 31, 2014 December 31, 2013 Legal reserve (*) ￦ 20,143 ￦ 20,143 Reserve for bad loans (see Note 22) 659,761 611,622 Unappropriated retained earnings 1,055,564 880,189

￦ 1,735,468 ￦ 1,511,954

(*) Korean Commercial Code requires a company to appropriate at least 10% of dividends paid as legal reserve for each fiscal period, until the reserve equals 50% of paid-in capital. This reserve is not available for payment of cash dividends; however, it can be used to reduce deficit or can be transferred to capital.

(2) Changes in retained earnings for the years ended December 31, 2014 and 2013, are as follows (Unit:

Korean won in millions):

December 31, 2014 December 31, 2013 Balance at beginning of year ￦ 1,511,954 ￦ 1,348,744 Net income 223,514 163,210 Balance at ending of year ￦ 1,735,468 ￦ 1,511,954

21. ACCUMULATED OTHER COMPREHENSIVE LOSS:

Changes in accumulated other comprehensive loss for the years ended December 31, 2014 and 2013, are as follows (Unit: Korean won in millions):

December 31, 2014

Balance at beginning of

year Reclassification to income (loss)

Other Increases (Decreases)

Tax effect related to

remeasurements Balance at

ending of year Gain (loss) on valuation of derivatives

￦ (827)

￦ 733

￦ (26,830)

￦ 6,276

￦ (20,648)

Remeasurements of the net defined benefit liability

(5,030)

-

(19,015)

4,575

(19,470)

Total ￦ (5,857) ￦ 733 ￦ (45,845) ￦ 10,851 ￦ (40,118)

December 31, 2013

Balance at beginning of

year Reclassification to income (loss)

Other Increases (Decreases)

Tax effect related to

remeasurements Balance at

ending of year Gain (loss) on valuation of derivatives

￦ (7,485)

￦ 2,588

￦ 6,176

￦ (2,106)

￦ (827)

Remeasurements of the net defined benefit liability

(9,020)

-

5,279

(1,289)

(5,030)

Total ￦ (16,505) ￦ 2,588 ￦ 11,455 ￦ (3,395) ￦ (5,857) Cash flow hedging reserve represents the effective portion of cumulative gains or losses of hedging instruments in hedge accounting. The cumulative deferred gains or losses of hedging instruments is

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reclassified to income (loss) for the period when gains or losses of the hedged item is reflected in income (loss) for the period or is reflected in the initial book value of non-financial hedged item in accordance with relevant accounting policy.

22. RESERVE FOR BAD LOANS:

Reserve for bad loans is calculated and disclosed according to Article 11, Supervisory Regulation of Specialized Credit Financial Business Law.

(1) Reserve for bad loans reflected in retained earnings as of December 31, 2014 and 2013, are as follows

(Unit: Korean won in millions):

December 31, 2014 December 31, 2013 Accumulated reserve for bad loans ￦ 659,761 ￦ 611,622 Expected reserve for bad loans 6,262 48,139 Reserve for bad loans ￦ 666,023 ￦ 659,761

(2) The provision of reserve for bad loans and adjusted income after provision of reserve for bad loans for the

years ended December 31, 2014 and 2013, are as follows (Unit: Korean won in millions):

December 31, 2014 December 31, 2013 Net income attributable to the owners of the Company ￦ 223,514 ￦ 163,210 Expected reserve for bad loans 6,262 48,139 Adjusted income after reserve for bad loans ￦ 217,252 ￦ 115,071

23. GENERAL AND ADMINISTRATIVE EXPENSES:

Details of general and administrative expenses for the years ended December 31, 2014 and 2013, are as follows (Unit: Korean won in millions): December 31, 2014 December 31, 2013

Salaries wages ￦ 138,875 ￦ 122,581 Pension expenses 10,072 10,006 Employee benefits 23,757 27,692 Travel expenses 2,453 2,678 Communication expenses 26,557 25,365 Postal expense 18,798 13,973 Rental expenses 25,075 25,215 Taxes dues 30,328 21,643 Repair and maintenance expenses 728 596 Insurance premiums 175 203 Entertainment expenses 2,471 996 Advertising expenses 50,386 58,838 Supply expenses 2,750 2,688 Vehicle maintenance expenses 15 15 Periodicals expenses 410 1,241 Publication expenses 8,950 8,145 Training expenses 4,685 3,602 Electronic data processing expense 43,286 42,951 Expense for temporary staff 26,482 34,898 Professional expenses 129,689 147,264 Delivery commission 1,874 2,615 Commission expense 26,183 25,157 Business activities expense 3,582 3,766 Depreciation expense 36,946 28,135 Amortization expense 21,348 15,934 Event expense 3,795 4,166 Conference expense 265 559 Building administrative expense 7,078 5,556

￦ 647,013 ￦ 636,478

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24. INCOME TAX FROM CONTINUED OPERATION: (1) Income tax expense for the years ended December 31, 2014 and 2013, are summarized as follows (Unit:

Korean won in millions):

December 31, 2014 December 31, 2013 Income tax currently payable ￦ 72,232 ￦ 66,515 Changes in deferred tax assets by temporary differences (*) (6,237) (7,556)

Total 65,995 58,959 Changes in income tax expense reflected directly in shareholders’ equity 10,851 (3,395) Income tax expense 76,846 55,564 (*) Ending net deferred tax assets due to temporary differences 149,460 143,223 Beginning net deferred tax assets due to temporary differences 143,223 135,667 Changes in net deferred tax assets due to temporary differences (6,237) (7,556)

(2) Income tax expenses reflected directly in shareholders’ equity for the year ended December 31, 2014 and

2013, are as follows (Unit: Korean won in millions):

January 1, 2014 Decrease December 31, 2014 Tax effect related to the cash flow

hedging reserve gains and losses ￦ 261

￦ 6,276

￦ 6,537

Tax effect related to remeasurement of the net defined benefit liability

1,591

4,575

6,166

￦ 1,852 ￦ 10,851 ￦ 12,703

January 1, 2013 Decrease December 31, 2013 Tax effect related to the cash flow

hedging reserve gains and losses ￦ 2,367

￦ (2,106)

￦ 261

Tax effect related to remeasurement of the net defined benefit liability

2,880

(1,289)

1,591

￦ 5,247 ￦ (3,395) ￦ 1,852

(3) A reconciliation between income before income tax and income tax expense for the years ended December 31, 2014 and 2013, is as follows (Unit: Korean won in millions):

December 31, 2014 December 31, 2013

Income before income tax expense ￦ 300,360 ￦ 218,773 Income tax payable by the statutory income tax rates (11%, 22% or 24.2%)

72,225

52,481

Tax reconciliations: Non-deductible expenses 5 294 True-up adjustment (*) - (123) Others 4,616 (753)

Subtotal 4,621 (582) Any adjustments recognized in the year due to current tax of prior year -

3,665

come tax from continued operation ￦ 76,846 ￦ 55,564

(*) True-up adjustment due to difference in the amount disclosed in prior year’s audit report and the actual tax return amount.

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(4) Details of changes in accumulated temporary differences for the years ended December 31, 2014 and 2013, are as follows (Unit: Korean won in millions):

December 31, 2014

Descriptions

Beginning Balance (*)

Decrease

Increase

Ending balance

Deferred tax asset (liability)

Temporary differences to be deducted:

Present value of discount ￦ 5,287 ￦ 5,287 ￦ 6,644 ￦ 6,644 ￦ 1,598 Retirement benefit obligation 38,635 3,311 30,106 65,430 15,735 Provision for unused commitments 47,497 47,497 45,889 45,889 11,035 Accrued expenses 87,410 87,410 102,720 102,720 24,702 Point provisions 341,674 341,674 311,868 311,868 74,998 Unearned revenue (annual fee) 74,327 74,327 75,657 75,657 18,194 Debt-for-equity swap 7,377 - - 7,377 1,774 Loss on impairment of financial assets AFS 8,140 - - 8,140 1,958 Membership 539 6 407 940 226 Loss on valuation of currency swaps 1,161 1,161 6,975 6,975 1,677 Loss on valuation of interest rate swaps 2,678 2,678 20,291 20,291 4,880 Provision for litigation 10,936 10,936 7,151 7,151 1,719 Provision for others 4,944 4,944 2,234 2,234 537 Immediate depreciation of fiction 416 345 - 71 17 Interest-free installment fee 7,183 7,183 6,761 6,761 1,626 Loans 768 768 - - - Amortization of intangible assets 5 - 50 55 13 Asset Retirement Obligation - - 5,537 5,537 1,332 Other Long-Term Employee Benefit - - 3,553 3,553 854 Interest Revenue 215 215 - - -

Subtotal ￦ 639,192 ￦ 587,742 ￦ 625,843 ￦ 677,293 ￦ 162,875 Temporary differences to be added:

Retirement insurance premium ￦ (36,990) ￦ (3,311) ￦ (20,886) ￦ (54,565) ￦ (13,122) Accrued income (41) (41) - - - Gains on valuation of interest rate swaps (2,750) (2,750) (80) (80) (19) Held for trading securities valuation - - (147) (147) (35) Furniture and fixtures - - (988) (988) (238) Construction Fee (156) (152) - (4) (1)

Subtotal (39,937) (6,254) (22,101) (55,784) (13,415) Deferred income tax assets 149,460

(*) Differences between the amount disclosed in prior year’s audit report and the actual tax return are reflected in the

beginning balances.

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December 31, 2013

Descriptions

Beginning Balance (*)

Decrease

Increase

Ending balance

Deferred tax asset (liability)

Temporary differences to be deducted:

Present value of discount ￦ 5,318 ￦ 5,318 ￦ 5,287 ￦ 5,287 ￦ 1,270 Retirement benefit obligation 35,993 3,078 5,720 38,635 9,281 Provision for unused commitments 46,386 46,386 47,497 47,497 11,411 Accrued expenses 58,253 58,253 87,410 87,410 20,999 Point provisions 335,837 335,837 341,674 341,674 82,082 Unearned revenue (annual fee) 77,450 77,450 74,327 74,327 17,856 Debt-for-equity swap 7,459 81 - 7,378 1,772 Loss on impairment of financial assets AFS 8,113 - - 8,113 1,949 Membership 513 - 26 539 129 Loss on valuation of currency swaps 7,933 7,933 1,161 1,161 279 Loss on valuation of interest rate swaps 3,925 3,925 2,678 2,678 643 Provision for litigation 5,619 5,619 10,936 10,936 2,627 Provision for others 8,174 8,174 4,944 4,944 1,188 Amortization of intangible assets (179) (184) - 5 1 Immediate Depreciation - 404 820 416 100 Interest-free installment fee - - 4,378 4,378 1,052 Loans - - 768 768 185

Subtotal ￦ 600,794 ￦552,274 ￦ 587,626 ￦ 636,146 ￦ 152,824 Temporary differences to be added: Retirement insurance premium ￦ (33,454) ￦ (3,078) ￦ (6,614) ￦ (36,990) ￦ (8,886) Accrued income (126) (126) (41) (41) (10) Foreign currency translation gains (1,104) (1,104) - - -

Gain on valuation of currency swaps - - - - - Gains on valuation of interest rate swaps (901) (901) (2,750) (2,750) (661) Construction Fee - (134) (318) (184) (44)

Subtotal (35,585) (5,343) (9,723) (39,965) (9,601) Deferred income tax assets ￦ 143,223

(*) Differences between the amount disclosed in prior year’s audit report and the actual tax return are reflected in the

beginning balances. 25. EARNINGS PER SHARE: (1) Earnings per share for the years ended December 31, 2014 and 2013, are as follows.

December 31, 2014 December 31, 2013 Net income (A) ￦ 223,514,020,775 ￦ 163,209,632,926 Weighted-average number of shares (B) 160,465,286 160,465,286 Net income per share (A/B) (Unit: Korean won) ￦ 1,393 ￦ 1,017

(2) Diluted earnings per share

As the Consolidated Entity has not issued any diluted shares; diluted earnings per share is the same as basic earnings per share for the year ended December 31, 2014.

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26. CONTINGENCIES AND COMMITMENTS: (1) Credit line agreement

The followings are credit line agreement as of December 31, 2014 and 2013 (Unit: Korean won in millions):

Type Financial instruments December 31, 2014 December 31, 2013 Overdraft limit Intraday overdraft limit Shinhan Bank and

thirteen others ￦ 552,600

￦ 342,600

(2) Revolving Credit Facility

As the Consolidated Entity has a revolving credit facility agreement with many financial institutions for credit line as of December 31, 2014, the Consolidated Entity made a revolving credit facility agreement for ￦490 billon with Kookmin Bank and 9 others for credit line as of December 31, 2014.

(3) Guarantee

The Consolidated Entity has a performance guarantee from the Seoul Guarantee Insurance Co., Ltd., amounting to ￦552 million in connection with deferred transportation payment card and others.

(4) Pending Lawsuits

As of December 31, 2014, the Consolidated Entity is involved in 30 cases (￦131,722 millions) as a defendant and 140 cases (￦12,501 millions) as a plaintiff in the pending lawsuits. The management of the Consolidated Entity does not anticipate that the pending lawsuits referred above will have a significant effect on the Consolidated Entity’s consolidated financial statements.

(5) Deposit for Loss Reimbursement

As of December 31, 2014, the Consolidated Entity has deposits of ￦2,234 million and ￦4,650 million of proceeds and interests, respectively, from the sale of Daewoo Engineering & Construction Co., Ltd.’s shares in an escrow account and records ￦2,234 million of provision for proceeds and ￦4,467 million of provision for interests from the litigation relating to the sale of Daewoo Engineering & Construction Co., Ltd.’s shares (see Note 16(5)).

(6) Contract of Sale of Receivables

The Consolidated Entity entered into a contract with Hyundai Capital Services, Inc., relating to its sale of receivables on January 24, 2006. In accordance with the contract, the Consolidated Entity sells the receivables that are 60 days or more past due or written off (partially including receivables that are before 60 days) to Hyundai Capital Services, Inc. Such sale occurs five times a month on designated cutoff dates at the amount calculated using a predetermined price pursuant to the contract.

(7) Alliance

The Consolidated Entity has separate agency agreements regarding its credit card business with SC First Bank, Woori Bank, Korea Exchange Bank, Shinhan Bank, Citibank Korea, Hana Bank, Gwangju Bank, Jeonbuk Bank, Cheju Bank, Postal Office, Korea Computer Inc. and others.

(8) License Agreement and Franchise Agreement

The Consolidated Entity entered into member issuance and franchise agreements with Master Card International, Visa International and Diners Club International for credit card issuance and pays each fees based on a fixed rate for each credit card issued.

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(9) Reserve for Loss Reimbursement

The Consolidated Entity has the obligation to reimburse customers for fraudulent credit card activities; the Consolidated Entity records the expected losses as an accrued expense.

(10) Security on the Receivables Sold Relating to Asset-Backed Securitization

The Consolidated Entity continuously transfers receivables to maintain a certain level of its equity in the second series beneficiary certificates relating to the asset-backed securitization.

(11) Early Redemption Rule Associated with Asset-Backed Securitization

According to the agreement on the Consolidated Entity’s asset-backed securitization, in order to enhance the credit level of the asset-backed securities, several provisions are in place as trigger clauses to be used for early redemption calls, thereby limiting the risk that the investors are exposed to resulting from a change in quality of the assets in the future. In the event the asset-backed securitization of the Consolidated Entity is in violation of the applicable trigger clause, the Consolidated Entity is obliged to make early redemption for the asset-backed securities.

27. TRANSFERS OF FINANCIAL ASSETS:

The Consolidated Entity transferred its card assets to SPCs for asset securitization and SPCs issued Asset-Backed Securities (“ABSs”). The ABSs are collateralized by card assets as underlying assets. All of the transferred financial assets do not qualify for derecognition under K-IFRS 1039 because the Consolidated Entity has retained substantially all the risks and rewards of ownership of the transferred asset. Therefore, the Consolidated Entity continues to recognize the transferred financial assets in the separate financial statements. The details of ABSs and underlying assets as of December 31, 2014 and 2013, are as follows (Unit: Korean won in millions): December 31, 2014

Maturity

Carrying amount Fair value

Underlying asset

Senior tranche

Underlying asset

Senior tranche

Net position

PRIVIA 3rd SPC 2015.07.20 ￦ 1,277,386 ￦ 439,680 ￦ 1,388,805 ￦ 440,271 ￦ 948,534 PRIVIA 4th SPC 2017.07.18 829,641 318,768 924,226 319,197 605,029 PRIVIA 5th SPC 2018.02.19 858,317 300,000 877,311 300,042 577,269 Discounts on bonds - (5,334) - - -

￦ 2,965,344 ￦ 1,053,114 ￦ 3,190,342 ￦ 1,059,510 ￦ 2,130,832

December 31, 2013

Maturity

Carrying amount Fair value

Underlying asset

Senior tranche

Underlying asset

Senior tranche

Net position

PRIVIA 2rd SPC 2014.04.22 ￦ 1,276,283 ￦ 281,413 ￦ 1,302,516 ￦ 281,359 ￦ 1,021,157 PRIVIA 3rd SPC 2015.07.20 1,271,604 430,240 1,299,795 421,467 878,328 Discounts on bonds - (1,579) - - -

￦ 2,547,887 ￦ 710,074 ￦ 2,602,311 ￦ 702,826 ￦ 1,899,485

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28. TRANSACTION WITH RELATED PARTIES: (1) Status of related parties

1) As of December 31, 2014 and 2013, the parent company of the Consolidated Entity is Hyundai Motor

Company.

2) As of December 31, 2014, details of other related parties which have transactions like sales and balances of receivables and payables with the Consolidated Entity are as follows:

Companies

Other related parties GE Capital Int’l Holdings, HK Savings Bank, HMC Investment Securities, Green air, Kia Motor Company, Kia Tigers, Maintrans company, Busan Finance Center AMC, WIA Magna Powertrain, Eukor Car Carriers, Innocean , Iljin Bearing, Jongro Academy, Chunbuk Hyundai motors FC, Jongro Hakpyung, Korea Credit Bureau, Hankook Economy News, Haevichi Resort, Haevichi Country Club, Haevichi Hotel & Resort, Hyundai construction, Hyundai construction human resource development center, Hyundai Glovis, Hyundai Dymos, Hyundai City Corporation, Hyundai Life, Hyundai Rotem, Hyundai Materials, Hyundai Metia, Hyundai Movis, Hyundai BNG Steel, Hyundai farm land & development, Hyundai Engineering & Steel Industries, Hyundai C&I, Hyundai IHL, Hyundai energy, Hyundai engineering, Hyundai NGV, Hyundai MSEAT, Hyundai MnSoft, Hyundai AMCO, Hyundai Auto Ever Systems, Hyundai Auto Electronics Company Ltd, Hyundai Wistco, Hyundai Wia, Hyundai Steel Company, Hyundai Architects & Engineers Associates, Hyundai Capital, Hyundai Commercial, Hyundai Kefico, Hyundai Powertech, Hyundai Partecs, Hyundai Hysco

(2) Outstanding transactions with related parties for the years ended December 31, 2014 and 2013, are as

follows (Unit: Korean won in millions):

December 31, 2014 Revenues Expenses Others

Card income

Rental revenue Others

Card expense

General and administrative

expenses Others

Purchase of property and equipment

Purchase of intangible

assets Disposal of

assets Parent Company

Hyundai Motor Company

￦ 114,493 ￦ - ￦ - ￦ - ￦ 246 ￦ 60 ￦ 2,370 ￦ - ￦ -

Other related parties

Kia Motor Company

43,871 - - - 25 13 - - -

Hyundai Mobis 992 - - - 15 - - - - Hyundai Construction

302 - - - 48 - 8,025 - -

Hyundai Glovis 358 - - - - - - - - Hyundai Capital 74 494 21,075 25,516 3,358 20,425 - - 392,723 Others 12,226 1,012 786 194 55,544 6,225 - 14,493 -

Total ￦ 172,316 ￦ 1,506 ￦ 21,861 ￦ 25,710 ￦ 59,236 ￦ 26,723 ￦ 10,395 ￦ 14,493 ￦ 392,723

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December 31, 2013 Revenues Expenses Others

Card income

Rental revenue Others

Card expense

General and administrative

expenses Others

Purchase of property and equipment

Purchase of intangible

assets Disposal of

assets Parent Company

Hyundai Motor Company

￦ 122,233 ￦ - ￦ - ￦ - ￦ 244 ￦ 81 ￦ - ￦ - ￦ -

Other related parties

Kia Motor Company

57,765 11 - 7 26 30 - - -

Hyundai Mobis 1,102 - - - 15 - - - - Hyundai Construction

297 - - - 8 - 12,872 - -

Hyundai Glovis 410 - - - - - - - - Hyundai Capital 46 231 26,330 32,013 3,452 35,230 664 - 377,735 HMC Investment - - - - 3 - - - - Others 15,553 744 626 326 46,862 14,728 5,190 47,741 -

Total ￦ 197,406 ￦ 986 ￦ 26,956 ￦ 32,346 ￦ 50,610 ￦ 50,069 ￦ 18,726 ￦ 47,741 ￦ 377,735 (3) Receivables and payables (except borrowings) from the transactions with related parties as of December 31,

2014 and 2013, are as follows (Unit: Korean won in millions):

December 31, 2014 Receivable Payables

Card assets Others

Allowance for doubtful accounts

Accounts payable Others

Parent Company Hyundai Motor Company ￦ 68,293 ￦ 2,128 ￦ (751) ￦ 51,529 ￦ -

Other related parties Kia Motor Company 42,731 173 (470) 9,075 - Hyundai Movis 2,864 - (31) 468 - Hyundai Construction 1,787 - (20) - - Hyundai Glovis 1,781 - (20) 364 - Hyundai Wia 6,378 - (70) - - Hyundai Steel Company 8,794 - (97) - - Hyundai BNG Steel 414 - (5) - - Hyundai Hysco 337 - (4) 3,583 - Hyundai Capital 126,110 497 (1,387) 599 265 HMC Investment Securities 725 - (8) - - Others 22,737 46,406 (250) 13,431 630

￦ 282,951 ￦ 49,204 ￦ (3,113) ￦ 79,049 ￦ 895

December 31, 2013 Receivable Payables

Card assets Others

Allowance for doubtful accounts

Accounts payable Others

Parent Company Hyundai Motor Company ￦ 55,849 ￦ 2,128 ￦ (614) ￦ 44,986 ￦ 23

Other related parties Kia Motor Company 22,733 173 (250) 12,902 - Hyundai Movis 2,598 - (29) 630 - Hyundai Construction 4,746 - (52) - - Hyundai Glovis 1,391 - (15) 1,021 - Hyundai Wia 5,634 - (62) - - Hyundai Steel Company 2,327 - (26) - - Hyundai BNG Steel 487 - (5) - - Hyundai Hysco 1,295 - (14) 5,217 - Hyundai Capital 81,951 1,424 (901) 2,813 260 HMC Investment Securities 705 - (8) - - Others 16,271 14,936 (179) 23,634 526

￦ 195,987 ￦ 18,661 ￦ (2,155) ￦ 91,203 ￦ 809

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(4) Compensation for key executives

Compensation for key management for the years ended December 31, 2014 and 2013, consists of the following (Unit: Korean won in millions):

December 31, 2014 December 31, 2013 Short-term employee benefit ￦ 10,115 ￦ 9,255 Retirement benefit 2,032 2,019 Long-term employee benefit 128 12

Total ￦ 12,275 ￦ 11,286 (5) There were no borrowing transactions with the related parties for the years ended December 31, 2014 and

2013. (6) There were no lending transactions with the related parties for the years ended December 31, 2014 and

2013.

(7) As of December 31, 2014, there are no payment guarantees or collaterals provided by or provided to the Consolidated Entity.

29. CONSOLIDATED STATEMENTS OF CASH FLOWS:

(1) Cash and cash equivalents

For the years ended December 31 2014 2013 Ordinary Deposit ￦ 87,446 ￦ 176,104 Current Deposit 101 151 Other Cash Equivalents - 100,000 Time Deposits 14,000 14,200 Restricted Cash and Deposits 66,150 675,000 ￦ 167,697 ￦ 965,455

(2) Cash flows from operating activities

For the years ended December 31, 2014 2013

(Korean won) CASH FLOWS FROM OPERATING ACTIVITIES:

Net income ￦ 223,514 ￦ 163,210 Adjustments

Income tax expense 76,846 55,564 Interest income (24,733) (20,566) Interest expense 305,884 312,929 Dividend received (346) (352) Bad debt expense and loss on disposal of receivables 265,853 247,747 Retirement benefits 10,017 10,006 Long-term employee benefits 3,553 - Depreciation 36,946 28,135 Amortization 21,348 15,934 Loss on foreign currency translation 32,843 - Loss on valuation of trading derivatives - 10,533 Loss from sale of property and equipment 62 2,546 Sales promotional expenses 30,482 18,363 Provisions - 13,847 Reversal of impairment loss of financial assets AFS (62) (81) Other operating cost 1,671 1,575 Impairment loss of intangible assets 407 37 Gain on valuation of trading securities (154) - Gain on foreign currency translation - (10,503)

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For the years ended December 31, 2014 2013

(Korean won) Gain on valuation of trading derivatives (32,843) - Amortization of present value discounts of card assets (31,045) (20,029) Amortization of deferred origination fees of card assets (26,640) (20,992) Gain from sale of property and equipment (47) (142) Reversal of impairment loss for intangible assets (6) (11) Reversal of provisions (5,594) - Other operating gains (43) (141)

Subtotal 664,399 644,399 Changes in operating assets and liabilities:

Increase in short-term investments (738,850) - Increase in card assets (1,061,207) (247,840) Increase in other assets (23,721) (9,434) Decrease in guarantee deposit 1,410 17,529 Decrease in derivative assets 6,623 - Decrease in retirement benefit obligations (16,067) (12,045) Decrease in derivative liabilities (23,610) (8,508) Decrease in financial lease liabilities (298) (1,154) Decrease in other liabilities (59,499) (112,996)

Subtotal (1,915,219) (374,448) Total ￦ (1,027,306) ￦ (433,161)

(3) Cash and cash equivalents in the consolidated statements of cash flows are equivalent to the ones in

consolidated statements of financial position. Non-cash activities, which are not reflected in the consolidated statements of cash flows for the years ended December 31, 2014 and 2013, are as follows (Unit: Korean won in millions):

December 31, 2014 December 31, 2013

Replacement of tangible assets (*) ￦ 68,904 ￦ 8,656 Acquisition of tangible assets 5,930 7,510 Current portion of long-term borrowings - 82,500 Gain (loss) on valuation of derivatives 26,097 8,764 Replacement of provisions to accrued expenses 2,314 3,212

(*) These consist of land, building and fixtures and equipment.

30. FINANCIAL RISK MANAGEMENT: (1) Introduction

1) General

The Consolidated Entity is exposed to various financial risks, such as credit risk, liquidity risk and market risk associated with financial instruments. The level of exposure to such risks, objectives of the Consolidated Entity and its risk management policy and procedures are outlined below.

2) Risk management framework

The board of directors sets and oversees risk management framework. Responsibility for implementing and monitoring the Consolidated Entity’s risk management strategies and policies resides with Asset-Liability Management Committee (ALCO) set by the Board of Directors. Each committee has a permanent and non-permanent member and reports its activities to the Board of Directors on a regular basis. The Consolidated Entity’s risk management policy is to ensure that the Consolidated Entity identifies and analyzes the potential risks to financial performance, determines the degree of risk and control acceptable to the Consolidated Entity and monitors whether the Consolidated Entity confirms with the risk and its associated degree of acceptance. The risk management policy and system are regularly reviewed to reflect changes in market conditions and products and services the Consolidated Entity provides.

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The Consolidated Entity operates education and training program, so that all employees understand their roles and duties with the goal to build organizational control environment. The audit committee is responsible for monitoring whether the Consolidated Entity continues to comply with the risk management policies and procedures and the current risk management system is appropriate for the risks that the Consolidated Entity is exposed to, with the assistance of internal auditors, who review regular and irregular risk management procedures and report the results to the audit committee.

(2) Credit risk

1) General

Credit risk is the risk of financial loss to the Consolidated Entity if a customer or counterparty to a financial instrument fails to meet its contractual obligations. Credit risk arises primarily from the Consolidated Entity’s loan and card assets. The Consolidated Entity considers all the elements of individual borrower’s credit risk exposure, such as default and breach.

2) Risk management framework

The Consolidated Entity’s exposure and credit ratings of its counterparties are primarily reviewed and managed for accuracy by credit risk management department. Secondly, aggregate risks are allocated to total portfolio and controlled by counterparty’s credit limits that are reviewed and approved by the risk management department. To ensure that resolution and approval of the Board of Directors with respect to risk management are effectively implemented, the Consolidated Entity sets and operates the risk management committee, which is a permanent organization and holds regular meetings once a month as a rule or more often if necessary. The risk management committee is assisted by independent risk management department (risk management team), which oversees all the risks for the Consolidated Entity’s operations comprehensively.

- Manages aggregate risks on the acceptable level of loss through portfolio limits management. These

limits of credit risk are established based on portfolio management standards and reflected into business plan. Risk management committee receives a report of whether level of credit risk and limits of the acceptable level of credit risk are in compliance with the standards.

- Acceptable limits on one month overdue over normal credit card payment rate and etc., are considered

into business plan and credit risks are managed within the limits.

- Credit limit on a new customer (the applicant) is determined based on monthly estimated income and liabilities computed using qualification standards. Final limit is determined with consideration of behavior ratings, external ratings by rating agencies, etc. Credit limit on an existing customer is downgraded or upgraded as a result of changes in combination of factors, including behavior ratings, personal information, such as employment, position, amounts used, days in arrears, etc.

- Target level on key factors, including expected loss, economic capital, portfolio quality index (overdue

rate, 30+@3MOB), etc., is set and actively monitored, of which results are reported to risk management committee.

- Measurement of expected loss using long-term probability of default and recording of allowance for

possible losses enable the Consolidated Entity to minimize the expected loss due to economy downturn. - Through implementation and management of contingency plan, the Consolidated Entity announces the

appropriate contingency level according to the level of the deteriorating economy and quickly takes a corresponding action. This enables the Consolidated Entity to proactively respond to rapidly changing credit risks.

Each credit management department holds right to approve credit and is required to perform credit policies and procedures and report important credit-related issues to management and risk management committee. Responsibility for portfolio performance and soundness resides with each credit management department, which monitors and controls all credit risks arising from the portfolio.

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3) Level of exposure to credit risk The Consolidated Entity’s maximum exposure to credit risk as of December 31, 2014 and 2013, are summarized as follows (Unit: Korean won in millions):

December 31, 2014 December 31, 2013 Deposit ￦ 200,725 ￦ 998,487 Card assets (*1) 10,785,737 9,934,024 Other financial assets (*1, 2) 207,150 180,216 Unused commitment 31,373,354 32,195,325

￦ 42,566,966 ￦ 43,308,052 (*1) Assets are stated at book value before allowance for doubtful accounts. (*2) Other financial assets consist of accounts payable and unearned income.

4) Analysis of credit soundness of financial assets

① Credit soundness of card assets neither past due nor impaired as of December 31, 2014 and 2013, are

summarized as follows (Unit: Korean won in millions):

A. Retail

December 31, 2014 December 31, 2013

Grade (*)

Book value before

allowance for doubtful accounts

Allowance for doubtful

accounts

Book value

Book value before

allowance for doubtful accounts

Allowance for doubtful

accounts

Book value Card receivables and cash advances

1 ￦ 543,855 ￦ 345 ￦ 543,510 ￦ 528,202 ￦ 291 ￦ 527,911 2 536,764 391 536,373 543,401 364 543,037 3 862,009 855 861,154 786,230 697 785,533 4 616,936 694 616,242 557,208 592 556,616 5 674,812 1,116 673,696 602,982 968 602,014 6 629,213 1,843 627,370 559,895 1,552 558,343 7 598,810 3,495 595,315 547,970 3,150 544,820 8 604,854 6,263 598,591 564,908 5,850 559,058 9 575,265 9,733 565,532 549,713 9,479 540,234 10 490,776 12,233 478,543 462,740 11,665 451,075 11 333,738 11,388 322,350 324,078 11,654 312,424 12 354,378 17,510 336,868 353,525 17,872 335,653 13 101,599 7,806 93,793 129,260 10,374 118,886 14 53,943 6,491 47,452 53,430 6,252 47,178 15 12,028 1,567 10,461 14,184 1,672 12,512

Subtotal ￦ 6,988,980 ￦ 81,730 ￦ 6,907,250 ￦ 6,577,726 ￦ 82,432 ￦ 6,495,294 Card loan

1 ￦ 61,839 ￦ 154 ￦ 61,685 ￦ 24,967 ￦ 89 ￦ 24,878 2 136,322 686 135,636 65,737 300 65,437 3 153,145 1,091 152,054 94,602 643 93,959 4 209,651 1,957 207,694 142,175 1,151 141,024 5 261,878 3,175 258,703 235,761 2,532 233,229 6 313,029 4,862 308,167 297,598 4,016 293,582 7 322,333 6,280 316,053 302,189 4,547 297,642 8 331,652 8,250 323,402 334,492 6,140 328,352 9 294,034 8,893 285,141 273,237 5,915 267,322 10 247,603 9,044 238,559 208,555 5,337 203,218 11 193,899 8,560 185,339 150,641 4,536 146,105 12 131,672 6,954 124,718 97,940 3,401 94,539 13 84,660 5,303 79,357 87,531 3,687 83,844 14 50,318 3,681 46,637 46,940 2,620 44,320 15 79,883 8,295 71,588 191,920 18,819 173,101

Subtotal 2,871,918 77,185 2,794,733 2,554,285 63,733 2,490,552 Total ￦ 9,860,898 ￦ 158,915 ￦ 9,701,983 ￦ 9,132,011 ￦ 146,165 ￦ 8,985,846

(*) Grades are internal credit ratings evaluated by the Consolidated Entity.

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B. Corporate

December 31, 2014 December 31, 2013

Grade (*)

Book value before

allowance for doubtful accounts

Allowance for doubtful

accounts

Book value

Book value before

allowance for doubtful accounts

Allowance for doubtful

accounts

Book value 1 ￦ 66,990 ￦ 155 ￦ 66,835 ￦ 89,323 ￦ 433 ￦ 88,890 2 144,718 777 143,941 91,068 533 90,535 3 69,992 453 69,539 57,629 373 57,256 4 42,700 327 42,373 41,452 298 41,154 5 14,116 285 13,831 12,913 258 12,655 6 8,577 363 8,214 6,741 248 6,493 7 13,062 865 12,197 11,440 743 10,697 8 245 23 222 323 32 291

N (**) 2,448 123 2,325 2,133 159 1,974 Total ￦ 362,848 ￦ 3,371 ￦ 359,477 ￦ 313,022 ￦ 3,077 ￦ 309,945

(*) Grades are internal credit ratings evaluated by the Consolidated Entity. (**) ‘N’ represents card assets, which are composed of sound government-related assets, such as central and local

governments and public authorities.

② Credit quality of credit cards past due but not impaired as of December 31, 2014 and 2013, are summarized as follows (Unit: Korean won in millions):

December 31, 2014

Less than

one month One to

two months Two to

three months More than

three months

Total Retail ￦ 182,532 ￦ 31,344 ￦ - ￦ - ￦ 213,876 Corporate 207,251 39,221 - 246,472

Subtotal 389,783 70,565 - 460,348 Card assets

Card receivables 295,036 49,961 - - 344,997 Cash advances 23,173 5,541 - - 28,714 Card loans 71,574 15,063 - - 86,637

Subtotal 389,783 70,565 - - 460,348 Allowance for doubtful

accounts (9,820)

(3,944)

-

- (13,764) Book value ￦ 379,964 ￦ 66,620 ￦ - ￦ - ￦ 446,584

December 31, 2013

Less than

one month One to

two months Two to

three months More than

three months

Total Retail ￦ 172,743 ￦ 26,757 ￦ - ￦ - ￦ 199,500 Corporate 175,280 1,554 - - 176,834

Subtotal 348,023 28,311 - - 376,334 Card assets

Card receivables 256,679 10,901 - - 267,580 Cash advances 24,054 4,882 - - 28,936 Card loans 67,290 12,528 - - 79,818

Subtotal 348,023 28,311 - - 376,334 Allowance for doubtful

accounts (8,012)

(2,486)

-

-

(10,498) Book value ￦ 340,011 ￦ 25,825 ￦ - ￦ - ￦ 365,836

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③ Credit quality of credit cards past due and impaired as of December 31, 2014 and 2013, is summarized as follows (Unit: Korean won in millions):

December 31, 2014 December 31, 2013 Card assets ￦ 101,643 ￦ 158,201 Allowance for doubtful accounts (59,790) (45,119)

￦ 41,853 ￦ 113,082

5) Concentrations of credit risk

① Concentration of credit risk by term structures as of December 31, 2014 and 2013, is summarized as follows (Unit: Korean won in millions):

December 31, 2014

Retail

Corporate

Total

Ratio

Allowance for doubtful

accounts

Book value Within three months ￦ 3,292,180 ￦ 612,517 ￦ 3,904,697 36.20% ￦ 45,768 ￦ 3,858,929 Three months to six months 1,755,420 920 1,756,340 16.29% 20,657 1,735,683 Six months to twelve months 1,722,891 8 1,722,899 15.97% 32,771 1,690,128 One year to two years 2,187,790 - 2,187,790 20.28% 69,303 2,118,487 Two years to three years 1,108,913 - 1,108,913 10.28% 32,171 1,076,742 Three years to four years 32,901 - 32,901 0.31% 2,013 30,888 Four years to five years 4,483 - 4,483 0.04% 1,538 2,945 After five years 67,714 - 67,714 0.63% 31,619 36,095

￦ 10,172,292 ￦ 613,445 ￦ 10,785,737 100.00% ￦ 235,840 ￦ 10,549,897 December 31, 2013

Retail

Corporate

Total

Ratio

Allowance for doubtful

accounts

Book value Within three months ￦ 3,446,046 ￦ 524,799 ￦ 3,970,845 39.97% ￦ 49,253 ￦ 3,921,592 Three months to six months 1,326,222 95 1,326,317 13.35% 17,552 1,308,765 Six months to twelve months 1,652,087 7 1,652,094 16.63% 30,664 1,621,430 One year to two years 1,917,696 - 1,917,696 19.30% 58,001 1,859,695 Two years to three years 956,760 - 956,760 9.63% 23,167 933,593 Three years to four years 54,107 - 54,107 0.55% 1,878 52,229 Four years to five years 3,028 - 3,028 0.03% 1,197 1,831 After five years 53,177 - 53,177 0.54% 23,145 30,032

Total ￦ 9,409,123 ￦ 524,901 ￦ 9,934,024 100.00% ￦ 204,857 ￦ 9,729,167

② Concentrations of credit risk, by industry, of corporate loans as of December 31, 2014 and 2013, are summarized as follows (Unit: Korean won in millions):

December 31, 2014 December 31, 2013

Book value before

allowance for doubtful

accounts

Ratio

Allowance for doubtful

accounts

Book value

Book value before

allowance for doubtful

accounts

Ratio

Allowance for

doubtful accounts

Book value

Financing ￦ 153,273 24.99% ￦ (646) ￦ 152,627 ￦ 117,063 22.30% ￦ (603) ￦ 116,460 Manufacturing 215,517 35.13% (2,391) 213,126 169,559 32.30% (1,824) 167,735 Service 193,923 31.61% (3,759) 190,164 176,633 33.65% (4,283) 172,350 Public 101 0.02% - 101 125 0.03% - 125 Others 50,631 8.25% (1,015) 49,616 61,521 11.72% (1,593) 59,928

￦ 613,445 100.00% ￦ (7,811) ￦ 605,634 ￦ 524,901 100.00% ￦ (8,303) ￦ 516,598

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6) Card assets by the assessment methods for impairments as of December 31, 2014 and 2013, are summarized as follows (Unit: Korean won in millions):

December 31, 2014 Individual assessment Collective assessment Total

Book value before

allowance for doubtful accounts

Allowance for doubtful

accounts Allowance

rate

Book value before

allowance for doubtful accounts

Allowance for doubtful

accounts Allowance

rate

Book value before

allowance for doubtful accounts

Allowance for doubtful

accounts Allowance

rate Card assets

Card receivables ￦ 37,486 ￦ (510) 1.36% ￦ 6,864,007 ￦ (71,012) 1.03% ￦ 6,901,493 ￦ (71,522) 1.04% Cash advances - - - 837,548 (30,078) 3.59% 837,548 (30,078) 3.59% Card loans - - - 3,046,696 (134,240) 4.41% 3,046,696 (134,240) 4.41%

Total ￦ 37,486 ￦ (510) 1.36% ￦ 10,748,251 ￦ (235,330) 2.19% ￦ 10,785,737 ￦ (235,840) 2.19%

December 31, 2013 Individual assessment Collective assessment Total

Book value before

allowance for doubtful accounts

Allowance for doubtful

accounts Allowance

rate

Book value before

allowance for doubtful accounts

Allowance for doubtful

accounts Allowance

rate

Book value before

allowance for doubtful accounts

Allowance for doubtful

accounts Allowance

rate Card assets

Card receivables ￦ 43,171 ￦ (603) 1.40% ￦ 6,340,041 ￦ (69,503) 1.10% ￦ 6,383,212 ￦ (70,106) 1.10% Cash advances - - - 849,422 (31,313) 3.69% 849,422 (31,313) 3.69% Card loans - - - 2,701,390 (103,438) 3.83% 2,701,390 (103,438) 3.83%

Total 43,171 (603) 1.40% ￦ 9,890,853 ￦ (204,254) 2.07% ￦ 9,934,024 ￦ (204,857) 2.06% (3) Liquidity risk

1) Liquidity risk

① General

Liquidity risk is the risk that the Consolidated Entity is unable to meet its payment obligations arising from financial liabilities as they become due. The Consolidated Entity classifies and discloses contractual maturity of all financial assets, liabilities and offshore accounts in relation to liquidity risk into four categories as immediately payable, within one year, one to five years and after five years. The cash flows disclosed in the maturity analysis is undiscounted contractual amount, including principal and future interest payments, which results in disagreement with the discounted cash flows included in the consolidated statements of financial position. Calculated cash flows are allocated into four categories, which draw contractual maturity analysis of each financial asset and liability.

② Liquidity risk management process and guidance

General principles and the overall framework for managing liquidity risk across the Consolidated Entity are defined in the Liquidity Risk Policy approved by the ALCO. All transactions that affect in and out flows of local/foreign currency funds across the Consolidated Entity are subject to liquidity risk management. Liquidity risk is centrally managed and controlled by the Financial Planning Department, which reports into the ALCO on liquidity analysis and statistics, including liquidity gap, liquidity ratio, maturity mismatch ratio and liquidity risk situation. The financial strategies to achieve the Consolidated Entity’s management goal, including liquidity risk, is set and monitored by ALCO.

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2) Residual contractual maturity analysis of financial liabilities The Consolidated Entity’s financial liabilities by residual contractual maturity as of December 31, 2014 and 2013, are classified as follows (Unit: Korean won in millions):

December 31, 2014

Immediate payment

Less than one year

One to five years

More than five years Total

Borrowings ￦ - ￦ 154,004 ￦ 50,628 ￦ - ￦ 204,632 Debentures - 2,151,854 6,165,732 20,746 8,338,332 Derivatives liabilities - 21,919 12,680 - 34,599 Other liabilities 85,693 1,199,876 773 - 1,286,342

Total ￦ 85,693 ￦ 3,527,653 ￦ 6,229,813 ￦ 20,746 ￦ 9,863,905

These amounts include all cash outflows, such as interests without discount and other liabilities, which include account payable, accrued expense, deposit received, finance lease liabilities and guarantee deposit received for import license.

December 31, 2013

Immediate payment

Less than one year

One to five years

More than five years Total

Borrowings ￦ - ￦ 167,571 ￦ 52,508 ￦ - ￦ 220,079 Debentures - 1,929,163 5,548,456 144,899 7,622,518 Derivatives liabilities - 29,997 30,569 - 60,566 Other liabilities 75,589 1,242,652 779 - 1,319,020

Total ￦ 75,589 ￦ 3,369,383 ￦ 5,632,312 ￦ 144,899 ￦ 9,222,183

These amounts include all cash outflows, such as interests without discount and other liabilities, which include account payable, accrued expense, deposit received, finance lease liabilities and guarantee deposit received import license.

(4) Market risk

1) Market risk

Market risk is the risk to the Consolidated Entity’s earnings arising from changes in interest rates, stock price, currency exchange rates or commodity prices. The trading market risk that the Consolidated Entity is mainly exposed to is the interest rate risk arising from the change in the value of debt instruments and interest rate embedded securities due to changes in market interest rate. The Consolidated Entity is additionally exposed to stock price and foreign exchange rate fluctuation risk arising from loans, receivables, deposits, securities or financial derivatives. The market risk from the non-trading position also exposes the Consolidated Entity to interest rate risk and liquidity risk. The trading position held for the Consolidated Entity’s short-term funding purpose does not fall into the category that exposes the Consolidated Entity to interest rate risk as these are not sensitive to fluctuations in interest rate due to short-term strategic management. Only risks arising from non-trading market risks are managed.

2) Market risk management organization

Incorporated market risk management policy is set by ALCO, which approves market risk limits, use of new derivative financial instruments and day-to-day operations related to market risks. Furthermore, ALCO determines Value-at-Risk (“VaR”) limits on bonds, stocks, foreign currency and financial derivatives instruments, position limits and stop-loss limits and additionally sets scenario loss limits and sensitivity limits on financial derivatives instruments. Determination of interest rate and commission rate, enactment and amendment of asset liability management (“ALM”) and risk management policy, and interest rate and commission rate guidelines and analysis of monthly ALM risk reside with the Chief Financial Committee. Interest risk limits are determined based on asset-liability position and expected interest rate fluctuation considering annual

- 47 -

operational planning, which are centrally measured and monitored by the financial planning team. Responsibility for management of both interest rate risk condition, such as interest rate gap, duration gap, sensitivity, etc., and compliance with interest rate risk limits policy reside with the financial planning team, which reports the results into the ALCO on a quarterly basis.

3) Non-trading position

The majority market risk from the Consolidated Entity’s non-trading position is the interest rate risk. This interest rate risk from non-trading position arises from two mismatch sources: mismatches between the maturity of interest-bearing assets and liabilities and between interest rate changing periods. The Consolidated Entity internally assesses the interest rate risk arising from local and foreign currency assets and liabilities, including derivatives financial instruments. Most assets generating interest income and liabilities generating interest expense are denominated in Korean won. The objective of interest rate risk management is to reduce a decline in the value of assets due to changes in market interest rates and to secure stable and optimal net interest income. The management of interest rate risk is supported by a comprehensive analysis of interest rate gap (between assets generating interest income and liabilities generating interest expense) and measurement of interest rate VaR and earnings at risk. The Consolidated Entity calculates risk index using the methodologies listed above, and discloses the interest rate VaR calculated using duration.

4) Interest rate VaR

Interest rate VaR is a statistical estimate of the maximum potential decline in the value of net assets due to the unfavorable changes in interest rate, using the VaR methodology, a key measure of market risk, in interest rate risk assessment. The interest rate VaR disclosed below is estimated at a 95% confidence level with 1% interest rate shock using the Bank for International Settlements (“BIS”) standards framework. This methodology employs using revised duration proxy by maturity provided by BIS. The assumption used to calculate the VaR is the expected range of interest rate fluctuation affected by interest rate shock at 100bp parallel movement of benchmark rate curve. Although the VaR is a generally used as a key measure of market risk, certain limitations to this methodology exist. VaR measures the potential loss in value of a risky asset or portfolio based on historical market movements over a defined period for a given confidence interval. However, it is not always possible in practice that the historical market movements reflect all future conditions and circumstances, which results in variance in actual loss timing and size due to the changes in assumptions used in calculation. The result of interest rate VaR calculated under normal distribution of interest rate risk is as follows (Unit: Korean won in millions):

December 31, 2014 December 31, 2013

Interest rate VaR ￦ 92,546 ￦ 77,845 (5) Capital management

The Parent (specialized credit finance company) must maintain adjusted capital adequacy ratio in accordance with Specialized Credit Financial Business Law and subregulations, and the ratio for the credit card company must be more than 8 %. This ratio is calculated dividing adjusted capital by adjusted total assets and all factors are based on consolidated financial statements. The Parent maintains an adjusted capital adequacy ratio over 8%.

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31. FINANCIAL ASSETS AND FINANCIAL LIABILITIES: (1) Fair Value of Financial Assets and Liabilities

The fair value of financial assets and financial liabilities as of December 31, 2014 and 2013, is summarized as follows (Unit: Korean won in millions):

December 31, 2014 December 31, 2013 Book value Fair value Book value Fair value Assets: Financial assets

Cash and bank deposit ￦ 200,725 ￦ 200,725 ￦ 998,487 ￦ 998,487 Securities 740,771 740,771 1,767 1,767 Card assets 10,549,897 11,136,398 9,729,167 10,210,591 Other assets 205,190 205,315 177,862 177,974

Total ￦ 11,696,583 ￦ 12,283,209 ￦ 10,907,283 ￦ 11,388,819 Liabilities: Financial liabilities Borrowings ￦ 200,000 ￦ 200,366 ￦ 212,500 ￦ 212,624

Debentures 7,730,127 7,946,435 6,978,262 7,136,256 Other liabilities 1,393,751 1,393,764 1,439,604 1,439,598

Total ￦ 9,323,878 ￦ 9,540,565 ￦ 8,630,366 ￦ 8,788,478

Fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm’s-length transaction. The Consolidated Entity presents a comparative disclosure of fair value and book value by financial assets and financial liabilities type. The best evidence of fair value is a quoted price in an active market. The fair values of financial instruments where no active market exists or where quoted prices are not otherwise available are determined by using valuation techniques. Valuation techniques include using recent arm’s-length market transactions between knowledgeable, willing parties, if available, reference to the current fair value of another instrument that is substantially the same, discounted cash flow analysis and option-pricing models. If there is a valuation technique commonly used by market participants to price the instrument and that technique has been demonstrated to provide reliable estimates of prices obtained in actual market transactions, the Consolidated Entity uses that technique. Although the Consolidated Entity believes that the valuation techniques it has used are appropriate and the fair values recorded in the consolidated statements of financial position are reasonably estimated, the application of assumptions and estimates means that any selection of different assumptions and valuation techniques would cause the reported results to differ. Furthermore, as various valuation techniques and assumptions are used in estimating fair values, it might be difficult to compare the Consolidated Entity’s results with fair values determined by other financial institutions.

- 49 -

(2) Netting on financial assets and financial liabilities

Derivative assets and derivative liabilities recognized by the Consolidated Entity can be set off in accordance with the future events described in derivative master netting agreements. The effects of netting agreements as of December 31, 2014 and 2013, are as follows (Unit: Korean won in millions):

Classification

December 31, 2014

Gross amounts of recognized financial

assets

Gross amounts of

recognized financial

liabilities to be set off

Net amounts of financial assets presented in the

consolidated statement of

financial position

Non-offsetting amount

Net amounts

Financial instruments

Cash collateral received

Financial Assets Derivative assets ￦ 8,739 ￦ - ￦ 8,739 ￦ 8,659 ￦ - ￦ 80

Financial Liabilities Derivative liabilities ￦ 30,922 ￦ - ￦ 30,922 ￦ 8,659 ￦ - ￦ 22,263

Classification

December 31, 2013

Gross amounts of recognized financial

assets

Gross amounts of

recognized financial

liabilities to be set off

Net amounts of financial assets presented in the

consolidated statement of

financial position

Non-offsetting amount

Net amounts

Financial instruments

Cash collateral received

Financial Assets Derivative assets ￦ 2,750 ￦ - ￦ 2,750 ￦ 1,213 ￦ - ￦ 1,537

Financial Liabilities Derivative liabilities ￦ 48,665 ￦ - ￦ 48,665 ￦ 1,213 ￦ - ￦ 47,452

(3) Fair value hierarchy

The table below provides the Consolidated Entity’s financial assets and financial liabilities recorded at fair value in the consolidated statements of financial position as of December 31, 2014 and 2013 (Unit: Korean won in millions):

December 31, 2014 Book value Fair value Level 1 Level 2 Level 3 Financial assets Fair value financial assets

Short-term investment ￦ 739,004 ￦ 739,004 ￦ - ￦ 739,004 ￦ - Derivatives assets 8,739 8,739 - 8,659 80

Financial liabilities Fair value financial liabilities

Derivatives liabilities ￦ 30,922 ￦ 30,922 ￦ - ￦ 30,922 ￦ - December 31, 2013 Book value Fair value Level 1 Level 2 Level 3 Financial assets Fair value financial assets

Derivatives assets ￦ 2,750 ￦ 2,750 ￦ - ￦ 2,470 ￦ 280 Financial liabilities Fair value financial liabilities

Derivatives liabilities ￦ 48,665 ￦ 48,665 ￦ - ￦ 48,665 ￦ -

- 50 -

The table below provides the Consolidated Entity’s financial assets and financial liabilities that are carried at cost since the fair values of the financial instruments are not readily determinable in the consolidated statements of financial position as of December 31, 2014 and 2013 (Unit: Korean won in millions):

Years ended December 31 2014 2013 Securities

AFS financial assets(*) ￦ 1,767 ￦ 1,767

(*) AFS financial assets are unlisted equity securities and recorded as carried at cost since they do not have quoted prices in an active market and the fair values are not measured with reliability.

(4) The table below provides the fair value hierarchy of financial instruments that are not measured

subsequently at fair value in consolidated statements of financial position as of December 31, 2014 and 2013 (Unit: Korean won in millions):

December 31, 2014 Level 1 Level 2 Level 3 Totals

Financial assets Loans and receivables

Card assets ￦ - ￦ - ￦ 11,136,398 ￦ 11,136,398 Other financial assets

Leasehold deposits provided - 31,173 - 31,173 Totals ￦ - ￦ 31,173 ￦ 11,136,398 ￦ 11,167,571

Financial liabilities Borrowings ￦ - ￦ 200,366 ￦ - ￦ 200,366 Debentures - 7,946,435 - 7,946,435 Leasehold deposits received - 8,664 - 8,664

Totals ￦ - ￦ 8,155,465 ￦ - ￦ 8,155,465

December 31, 2013 Level 1 Level 2 Level 3 Totals

Financial assets Loans and receivables

Card assets ￦ - ￦ - ￦ 10,210,591 ￦ 10,210,591 Other financial assets

Leasehold deposits provided - 34,932 - 34,932 Totals ￦ - ￦ 34,932 ￦ 10,210,591 ￦ 10,245,523

Financial liabilities Borrowings ￦ - ￦ 212,624 ￦ - ￦ 212,624 Debentures - 7,136,256 - 7,136,256 Leasehold deposits received - 8,060 - 8,060

Totals ￦ - ￦ 7,356,940 ￦ - ￦ 7,356,940

- 51 -

(5) The following table explains valuation techniques and input variables used in Level 2 or Level 3 fair value measurement. Fair value of financial instruments traded in an active market is determined by using the published price quotations based on market prices. However, if the market for a financial instrument is not active, fair value is determined by using a valuation technique. The valuation techniques and input variables of the financial assets and liabilities, which are measured at amortized cost, are as follows:

Description Classification Fair Value

(In Million KRW)

Current / Prior

Fair Value

Hierarchy Valuation Techniques Notable Unobservable Inputs

and Extent

Card Assets Assets 11,136,398 10,210,591 Level 3 Discounted Cash Flow model is used to determine the fair value of card assets. The fair value is determined by discounting the expected cash flows with the market interest rate considering the Consolidated Entity’s credit grade.

Market rate of profit, credit spread, liquidity premium, other spread, discount rate per creditors

Leasehold deposits provided

Assets 31,173 34,932 Level 2 DCF model is used to determine the fair value of lease deposits provided. The fair value is determined by discounting the expected cash flows with the market interest rate considering the Consolidated Entity’s credit grade.

Market rate of profit, credit spread, liquidity premium, other spread

Trading Securities

Assets 739,004 - Level 2 DCF model is used to determine the fair value of held for trading securities. The fair value is determined by discounting the expected cash flows with the market interest rate considering the similar credit grade with the debt security issuer.

N/A

Borrowings Liabilities 8,146,801 7,348,880 Level 2 DCF model is used to determine the fair value of borrowings. The fair value is determined by discounting the expected cash flows with the market interest rate considering the Consolidated Entity’s credit grade.

Market rate of profit, credit spread, liquidity premium, other spread

Leasehold deposits received

Liabilities 8,664 8,060 Level 2 DCF model is used to determine the fair value of lease deposits received. The fair value is determined by discounting the expected cash flows with the market interest rate considering the Consolidated Entity’s credit grade.

Market rate of profit, credit spread, liquidity premium, other spread

Interest Rate Swap

Assets - 2,470 Level 2 Discount rates and forward rates used to measure fair values of interest rate swap are determined based on the applicable constructed market-based yield curve. The fair value is determined by offsetting the discounted expected cash flows of interest rate swap with the aforementioned forward rates.

N/A

Liabilities 20,291 2,678

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Description Classification

Fair Value

(In Million KRW) Current / Prior

Fair Value

Hierarchy Valuation Techniques Notable Unobservable Inputs

and Extent

Currency Swaps

Assets 8,659 - Level 2 Discount rates and forward rates used to measure fair values of currency swaps are determined based on the applicable constructed market-based yield curve. The trading base rate in the morning of the report date is used as currency swap’s exchange rate. The fair value is determined by offsetting the discounted expected cash flows of currency swap with the aforementioned forward rates and closing price.

Discounted interest rate purchased, discounted interest rate sold.

Liabilities 10,631 45,987

Structured Swaps

Assets 80 280 Level 3 Structured Swaps - Discount curve and expected interest rates used to determine the fair value of structured swap are taken from market-based swap interest rates as of the reporting date through snapping. - The volatility used in determining the fair value of structured swaps is taken from market-based Cap/Floor/Swaption volatility as of the reporting date through snapping. - Hull and White model is applied in determining the fair value of structured swaps. - The fair value is determined by discounting the expected cash flows of structured swaps with the aforementioned swap interest rates and volatility.

Volatility of the underlying assets, discounted interest rate.

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(6) Financial assets and financial liabilities classified as Level3 which are measured to fair value for the years ended December 31, 2014 and 2013, are as follows:

December 31, 2014

Beg Gains/ Losses

Other Comprehensive

Income Purchases/

Issues Sales/

Settlements To/From Level 3 End. Financial Instruments

Derivatives Assets 280 - (200) - - - 80

December 31, 2013

Beg Gains/ Losses

Other Comprehensive

Income Purchases/

Issues Sales/

Settlements To/From Level 3 End. Financial Instruments

Derivatives Assets 475 - (195) - - - 280 (7) Book value by category of financial instruments

The table below provides book value by category of financial assets and financial liabilities as of December 31, 2014 and 2013 (Unit: Korean won in millions):

December 31, 2014

Financial asset at FVTPL Loans and receivables

AFS financial

assets

Hedging

derivatives

Total Trading Designated at

FVTPL

Financial assets Cash and bank deposit ￦ - ￦ - ￦ 200,725 ￦ - ￦ - ￦ 200,725 Securities 739,004 - - 1,767 - 740,771 Card assets - - 10,549,897 - - 10,549,897 Other financial assets - - 196,451 - 8,739 205,190

￦ 739,004 ￦ - ￦ 10,947,073 ￦ 1,767 ￦ 8,739 ￦ 11,696,583

December 31, 2014

Financial liabilities at FVTPL Amortized

cost

Hedging

derivatives

Total Trading

Designated at FVTPL

Financial liabilities Borrowings ￦ - ￦ - ￦ 200,000 ￦ - ￦ 200,000 Debentures - - 7,730,127 - 7,730,127 Other financial liabilities - - 1,362,829 30,922 1,393,751

￦ - ￦ - ￦ 9,292,956 ￦ 30,922 ￦ 9,323,878 December 31, 2013

Financial asset at FVTPL Loans and receivables

AFS financial

assets

Hedging

derivatives

Total Trading Designated at

FVTPL

Financial assets Cash and bank deposit ￦ - ￦ - ￦ 998,487 ￦ - ￦ - ￦ 998,487 Securities - - - 1,767 - 1,767 Card assets - - 9,729,167 - - 9,729,167 Other assets - - 175,112 - 2,750 177,862

Total ￦ - ￦ - ￦ 10,902,766 ￦ 1,767 ￦ 2,750 ￦ 10,907,283

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December 31, 2013

Financial liabilities at FVTPL Amortized

cost

Hedging

derivatives

Total Trading

Designated at FVTPL

Financial liabilities Borrowings ￦ - ￦ - ￦ 212,500 ￦ - ￦ 212,500 Debentures - - 6,978,262 - 6,978,262 Other liabilities - - 1,390,939 48,665 1,439,604

Total ￦ - ￦ - ￦ 8,581,701 ￦ 48,665 ￦ 8,630,366 (8) Net profit or loss of financial instruments by categories

Net profit or loss of financial instruments by categories for the years ended December 31, 2014 and 2013, is as follows (Unit: Korean won in million):

December 31, 2014

Interest income

Interest expense

Card revenue

Card expenses

Reversal of impairment

loss

Valuation loss

Disposal loss

Foreign currency

translation gain

Foreign

exchange gain

Financial assets Loans and

receivables ￦ 24,733

￦ -

￦ 2,515,799

￦ 1,041,285

￦ -

￦ -

￦ -

￦ -

￦ 9,315

Trading securities - - - - - 154 - AFS financial assets - - - - - - 62 - - Hedging derivatives - - - - - 15,283 - (15,283) -

Financial liabilities - Financial liabilities

at amortized cost

305,844

- -

- - - - - Hedging derivatives - - - - - 17,560 247 (17,560) -

￦ 24,733 ￦ 305,844 ￦ 2,515,799 ￦ 1,041,285 ￦ - ￦ 32,997 ￦ 309 ￦ (32,843) ￦ 9,315

December 31, 2013

Interest income

Interest expense

Card revenue

Card expenses

Reversal of impairment

loss

Valuation loss

Disposal loss

Foreign currency

translation gain

Foreign

exchange gain

Financial assets Loans and

receivables ￦ 20,566

￦ -

￦ 2,453,282

￦1,028,250

￦ -

￦ -

￦ -

￦ -

￦ 9,869

AFS financial assets - - - - 81 - - - - Hedging derivatives - - - - - - - - -

Financial liabilities Financial liabilities

at amortized cost

312,929

- - - - -

10,503 -

Hedging derivatives - - - - - (10,533) (380) - - Total ￦ 20,566 ￦ 312,929 ￦ 2,453,282 ￦ 1,028,250 ￦ 81 ￦ (10,533) ￦ (380) ￦ 10,503 ￦ 9,869

32. NET INTEREST INCOME (EXPENSE):

Net interest income (expense) for the years ended December 31, 2014 and 2013, is as follows (Unit: Korean won in millions):

Interest income December 31, 2014 December 31, 2013

Cash and bank deposit \ 22,762 \ 18,924 Others 1,971 1,642

Total 24,733 20,566 Interest expense

Borrowings 11,566 19,096 Debebtures 293,761 293,692 Others 557 141

Total 305,884 312,929 Net interest expense \ (281,151) \ (292,363)

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33. NET COMMISSION INCOME:

Net commission income for the years ended December 31, 2014 and 2013, is as follows (Unit: Korean won in millions):

December 31, 2014 December 31, 2013 Commission income

Card income \ 1,542,040 \ 1,522,854 Total 1,542,040 1,522,854

Commission expense Service fee 524,467 565,857 Financial payment fee 10,548 11,691 A new credit sale handling fee 143,956 150,954 Merchants co-payment fee 52 62 Overseas payment fee 40,083 45,149 Other 47,153 51,651

Total 766,259 825,364 Net commission income \ 775,781 \ 697,490

Commission income and commission expense are included in card income and card expenses, respectively.

34. OTHER OPERATING INCOME AND OTHER OPERATING EXPENSES:

Other operating income and other operating expenses for the years ended December 31, 2014 and 2013, are as follows (Unit: Korean won in millions):

Other operating revenue December 31, 2014 December 31, 2013

Foreign exchange gain \ 14,202 \ 13,180 Foreign currency translation gain - 10,503 Gain on derivatives transactions 1,460 807 Gain on valuation of derivatives 32,843 - Others 26,788 28,708

Total \ 75,293 \ 53,198 Commission expense

Foreign exchange loss \ 4,887 \ 3,311 Foreign currency translation loss 32,843 - Loss on derivatives transactions 1,213 1,187 Loss on valuation of derivatives - 10,533 Others 18,640 65,683

Total \ 57,583 \ 80,714 35. SEGMENT INFORMATION:

Though the Consolidated Entity conducts business activities related to credit cards, installment financing, leasing, etc., in accordance with relevant laws, such as Specialized Credit Finance Business Act, it does not report separate segment information, as the management considers the Consolidated Entity to operate under one core business.

36. Approval of Financial Statements:

The financial statements were issued and approved on February 26, 2015, and will get final approval during the shareholders’ meeting on March 26, 2015.