DGB Financial : FY2022 Audit Report(Separate)

DGB FINANCIAL GROUP CO., LTD.

Separate Financial Statements

For the years ended December 31, 2022 and 2021 (With Independent Auditor's Report Thereon)

DGB FINANCIAL GROUP CO., LTD.

Table of contents

	Page
Independent Auditor's Report
Separate Financial statements
Separate Statements of Financial Position	1
Separate Statements of Comprehensive Income	2
Separate Statements of Changes in Equity	3
Separate Statements of Cash Flows	4
Notes to the Separate Financial Statements	6

Ernst & Young Han Young

2-4F,6-8F, Taeyoung Building, 111, Yeouigongwon-ro,

Yeongdeungpo-gu, Seoul 07241 Korea

Tel: [phone]

Fax: [phone] ey.com/kr

Independent Auditor's Report

(English Translation of a Report Originally Issued in Korean)

The Shareholders and Board of Directors and

DGB Financial Group Co., Ltd.

Opinion

We have audited the accompanying separate financial statements of DGB Financial Group Co., Ltd. (the "Company"), which comprise the separate statements of financial position as of December 31, 2022 and 2021, the separate statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying separate financial statements present fairly, in all material respects, the separate financial position of the Company as of December 31, 2022 and 2021, and its separate financial performance and its separate cash flows for the years then ended in accordance with International Financial Reporting Standards as adopted by the Republic of Korea ("KIFRS").

We also have audited, in accordance with Korean Standards on Auditing ("KSA"), the Company's the internal control over financial reporting ("ICFR") as of December 31, 2022, based on criteria established in Conceptual Framework for designing and operating ICFR in accordance with KSA established by the Operating Committee of ICFR (the " ICFR Committee"), and our report dated March 14, 2023 expressed an unqualified opinion thereon.

Basis for Opinion

We conducted our audit in accordance with KSA. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the separate financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the separate financial statements in Republic of Korea, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

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

Management is responsible for the preparation and fair presentation of the separate financial statements in accordance with KIFRS, and for such internal control as management determines is necessary to enable the preparation of separate financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the separate financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company's financial reporting process.

Auditor's responsibilities for the audit of the separate financial statements

Our objectives are to obtain reasonable assurance about whether the separate financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that

an audit conducted in accordance with KSA will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these separate financial statements.

A member firm of Ernst & Young Global Limited

As part of an audit in accordance with KSA, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the separate financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances.
• Evaluate the appropriateness of accounting policies used in the preparation of the financial statements and the reasonableness of accounting estimates and related disclosures made by management.
• Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the separate financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the separate financial statements, including the disclosures, and whether the separate financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the separate financial statements of and for the year ended December 31, 2021 and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partner on the audit resulting in this independent auditor's report is Kwan-Cheol Oh.

March 14, 2023

This audit report is effective as of March 14, 2023, the independent auditor's report date. Accordingly, certain material subsequent events or circumstances may have occurred during the period from the date of the independent auditor's report to the time this report is used. Such events and circumstances could significantly affect the accompanying separate financial statements and may result in modifications to this report.

A member firm of Ernst & Young Global Limited

DGB FINANCIAL GROUP CO., LTD.

Separate Statements of Financial Position

As of December 31, 2022 and 2021

(In millions of won)
	Note		2022	2021
Assets
Cash and due from banks	4,27,28,29	W	213,507	17,345
Financial assets measured at fair value
through profit or loss("FVTPL")	5,28,29		264,214	-
Loans receivable at amortized cost	7,28,29		59,866	84,832
Investments in subsidiaries	8		3,662,655	3,611,209
Property and equipment	9,28		5,774	5,396
Intangible assets	10		4,671	3,554
Net defined benefit assets	13		1,282	-
Derivative financial assets	6,28,29,31		8,168	9,857
Deferred tax assets	25		6,926	-
Other assets	11,28,29		126,940		242,802
Total assets		W	4,354,003	3,974,995
Liabilities
Debentures	12,29		928,977	699,301
Borrowings	12,29		95,000	-
Retirement benefit obligations	13		-	753
Derivative financial liabilities	6,28,29,31		1,919	-
Current income tax liabilities	14,25		73,520	44,433
Deferred income tax liabilities	25		-	985
Other liabilities	14,28,29		19,680		21,509
Total liabilities		W	1,119,096	766,981
Equity
Capital stock	1,15		845,729	845,729
Hybrid bonds	15		498,098	498,098
Capital surplus	15		1,560,628	1,560,628
Capital adjustments	15		-	-
Accumulated other comprehensive loss	17		(117)	(1,660)
Retained earnings	16		330,569		305,219
Total equity			3,234,907		3,208,014
Total liabilities and equity		W	4,354,003		3,974,995

See accompanying notes to the separate financial statements.

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