Annual Financial Report

To our esteemed shareholders,

Fiscal year 2008 was a year of unprecedented challenges for the financial markets and economies across the globe. The support we received from our shareholders was invaluable in helping us navigate through the troubled times.

Growing financial turmoil, bankruptcy of prominent global companies and volatile commodity prices raised fears that the global economy may be headed for a prolonged recession. Korea was not spared from the woes. Prospects for the domestic economy were bleak amid a downward spiral of the Korean currency, declining exports and subsequent deterioration in corporate earnings, and depressed domestic consumption.

Over the past fiscal year, all of us at Daishin Securities worked tirelessly to find new opportunities for growth amid the crisis. We extended our international network to add momentum to our global business. We opened an office in Shanghai to make headway in China, which has emerged as a global economic center, while full-fledged operations are now underway at our Hong Kong subsidiary.

Our newly launched next-generation IT system allows us to meet diverse customer needs in the face of rapid market changes including adoption of the Financial Investment Services and Capital Markets Act (FSCMA). Based on the new IT system and differentiated services, we aim to spearhead new trends in the financial markets. In recognition of our ongoing drive to provide services that delight customers, Daishin Securities secured the No.1 spot in the 2008 global customer satisfaction survey by JMA Consultants of Japan. This year, we ranked first among securities firms in the wellbeing & premium brand category.

For fiscal 2008, Daishin Securities recorded operating revenue of KRW2,823.7 billion and operating expenses of KRW2,723.5 billion. Operating income amounted to KRW100.1 billion. Non-operating income was KRW27.1 billion and non-operating expenses were KRW2.3 billion. We posted pre-tax income of KRW124.9 billion and net income of KRW103.3 billion.

We distributed cash dividends of KRW1,000 per share for common stock and Class 2 preferred stock and KRW1,050 for Class 1 preferred stock. In doing so, we upheld our pledge to return wealth to our shareholders while becoming the only major securities company in Korea to pay out cash dividends for eleven consecutive years. Daishin Securities will maintain its profit-oriented approach to maximize earnings in fiscal year 2009 and meet our shareholders' expectations.

In addition to the slump in the world economy, we anticipate fiercer competition from Korean and global financial institutions. To respond to new developments in the financial markets and to spearhead change, our business objective for fiscal 2009 is to become a "financial attending doctor offering expert financial services." Our action plans to realize this goal include strengthening core services, cultivating future growth engines, and promoting a corporate culture based on trust. Harnessing our next-generation IT system introduced last fiscal year, we will strive to boost work efficiency and deliver unique, high quality services.

Every effort will be made to ensure the success of new businesses to achieve earnings diversification and a stable profit structure. We will also promote a new investment culture with added emphasis on risk management. Daishin Securities will continue to evolve into a global investment bank that pursues mutual advances with customers and shareholders.

We look forward to your continued faith and encouragement as we work towards our vision of becoming the foremost investment bank in Korea.

Daishin Securities Co., Ltd.

Chairwoman  Auh-Ryung Lee

Q. What is the future direction of Daishin Securities in this age of the Financial Investment

Services and Capital Markets Act (FSCMA)?

Our ultimate objective is to build the world's most trustworthy company that grows together with our clients. Rather than concentrating on simply growing our capital and organization, we have a relentless focus on the fundamentals and on upgrading quality of customer service. Our plan is to complete the transition into a financial services provider with Korea's leading brand value by the year 2013.

2009 will be the year in which we make the leap as a full-fledged investment bank. Our strategy is to bolster both existing strengths and promising growth areas to sharpen our future competitive edge. To this end, we plan to dramatically enhance our advantage in the retail segment while working to gain a solid foothold for growth in areas such as wealth management, investment banking and principal investment.

In the retail segment, our goal is to make all our clients financially happy. We are empowering our sales staff with in-depth financial expertise so they can become a "financial attending doctor" offering totalwealth management solutions. Moreover, we are reinforcing all areas of the retail business by pooling our resources and mapping out new strategies.

Compliance is another important area of focus as we endeavor to mitigate risks and increase customer trust.

The FSCMA has opened doors for securities firms to broaden their scope of business to areas such as futures and hedge funds. We plan to achieve a stable profit structure by making full preparation before entering the new markets and developing differentiated products.

Q. What are your business plans for fiscal 2009?

In fiscal year 2008, Daishin Securities posted a drop in earnings from the previous year. But even in an extremely turbulent financial market, our fundamentals remained intact thanks to our proactive approach to risk management, and the company is now readying for another leap forward.

Daishin's 2009 management goal is to become a "financial attending doctor offering expert financial services." To attain this goal, we will deliver total financial services and further improve retail services through companywide sales process innovation.

Other 2009 objectives include successful entry into new businesses such as futures and hedge funds to propel future growth, development of new products and services to pursue earnings diversification, and an all-out campaign to increase assets. Daishin Securities remains firmly committed to evolving into a global investment bank by instilling an investment culture that values an inclusive and preemptive approach to risk management. We will also work towards building up our image as a trustworthy company that always puts customers first.

Q. Tell us about your efforts to enhance shareholder value.

Daishin Securities has always placed priority on maximizing shareholder value. Our principle of returning wealth to shareholders has been represented by our cash dividend payouts.

We are also Korea's only major securities company to distribute cash dividends for eleven years in a row. 

For fiscal year 2008, Daishin Securities distributed per share cash dividends of KRW 1,000 for common stock, KRW 1,050 for Class 1 preferred stock, and KRW 1,000 for Class 2 preferred stock.

Going forward, we will invest more in areas with high growth potential and strengthen our competitiveness in retail operations to ensure that our shares are fairly valued in the market.

Daishin Securities Co., Ltd.

President & CEO  Chung-Nam Roh

(1) The purposes of the Company shall be to engage in the following businesses:

1. Buying and selling securities;

2. Securities brokerage;

3. Acting as an intermediary or agent for sale or purchase of securities;

4. Acting as an intermediary, arranger or agent with respect to entrustment of a sale or purchase 

transaction to be executed on the Stock Market Division or KOSDAQ Market Division of the Korea 

Exchange or an exchange located in a foreign country which is similar to the Korea Exchange;

5. Securities underwriting;

6. Public offering of outstanding securities;

7. Arranging for a public offering of newly issued or outstanding securities; 

8. Extending credit in relation to sale or purchase of securities; 

9. Securities savings business;

10. Margin lending;

11. Securities lending and acting as an intermediary for securities lending or borrowing;

12. Securities business in foreign countries;

13. Engaging in business activities described in Items 1 through 4 above with respect to securities indexes; 

14. Evaluating or appraising securities and equity securities; 

15. Acting as an intermediary, arranger or agent for corporate mergers and acquisitions; 

16. Buying and selling certificates of deposit and acting as an intermediary for sale or purchase of certificates of deposit; 

17. Trustee business for a public offering of bonds; 

18. Acting as an agent in relation to securities transactions; 

19. Providing advice or assistance in connection with management, restructuring and/or finance of companies; 

20. Acting as an intermediary or providing advisory services for lease, sale or purchase of real properties owned by customers or clients during the course of conducting the business activities set out in Item 15 or 19 above; 

21. Leasing real properties to others; 

22. Renting safe deposit boxes to others; 

23. Lending its own securities to institutional investors; 

24. Selling lottery tickets and admission tickets as an agent; 

25. Providing training regarding securities; 

26. Publishing publications and books; 

27. Commuter service business, and leasing and selling computer systems or software related to the securities business; 

28. Securities lending and acting as an intermediary, arranger or agent for securities lending transactions; 

29. Underwriting business for securities issued in a manner other than through public offering of new  shares, and acting as an intermediary, arranger or agent for such business; 

30. Selling and purchasing claims arising from loans, other transactions related thereto, and acting as an intermediary, arranger or agent therefor; 

31. Safe-keeping securities; 

32. Acting as an asset manager or a servicer of a special purpose vehicle under the Act on Asset-Backed Securitization; 

33. Buying and selling foreign payment instruments for customers' or clients' exchange of investment funds, and trading futures to hedge against foreign exchange risks; 

34. Exchanging foreign currencies, etc.; 

35. Acting as an intermediary for selling, buying, exchanging or lending foreign currencies or conducting derivatives transactions, and other related businesses; 

36. Over-the-counter derivatives transactions, and acting as an intermediary, arranger or agent for such transactions; 

37. Payment guarantee of principal and interest of corporate bonds; 

38. Acting as an agent for holding in custody deposits for shares to be publicly offered; 

39. Futures business; 

40. Investment advisory business, discretionary investment management business, investment management business, and selling various types of investment information; 

41. Public offering or sale of shares of indirect investment companies; 

42. Selling indirect investment securities; 

43. Acting as an agent or intermediary for selling insurance products; 

44. Retirement pension business; 

45.Selling information on appraisal of securities, etc. to the public through publications, books, electronic documents, etc.; 

46. Acting as an intermediary, arranger or agent to cause financial institutions that formed a business alliance to lend money to customers or clients; 

47. Acting as an advertisement agent through publications, books, electronic documents, etc.; 

48. Businesses set out as securities firms' areas of business in the Securities and Exchange Act ("SEA") and other relevant laws and regulations; 

49. Any and all activities incidental to any of the foregoing.

(2)The Company shall conduct the following businesses after obtaining approvals and authorizations from the relevant agencies and authorities, including the government: 

1. Conducting or providing credit investigation and services; 

2. Forming an alliance with credit card companies, insurance companies and other financial 

institutions; 

3. Foreign exchange businesses other than those set out in Items 33 through 35 of Paragraph (1) above; 

4. Selling, purchasing, and acting as an intermediary or agent for selling or purchasing, derivatives 

products; 

5. Any and all activities related to investment in venture companies;

6. Electronic finance business; 

7. Trust business pursuant to the Trust Business Act; 

8. Internet broadcasting business; and

9. Any and all activities incidental to any of the foregoing. 

(3) In addition to the businesses set out in Paragraphs (1) and (2) above, the Company may concurrently engage in other businesses after obtaining approvals and authorizations from the relevant agencies and authorities, including the government. 

Management

Sales

Others

Total

Male

403

876

28

1,307

Female

667

154

7

828

Total

1,070

1,030

35

2,135

HQ

Branches

Rep. Offices

Sales Office

Total

Domestic

1

116

-

-

117

Overseas

-

-

3*

-

3

Total

1

116

3

-

120

Types of shares

Amount of shares

Capital

(Thousand won)

Percentage

Note

Registered common shares

50,773,400

253,867,000

58.51%

200,000 stock cancellation through profit

Registered preferred shares

36,000,000

180,000,000

41.49%

Total

86,773,400

433,867,000

100%

Date

Types of shares

Amount of shares

Amount of capital increase

(Thousand won)

Capital after increase

(Thousand won)

Note

1987.7.19

Registered common shares

8,800,000

44,000,000

Reverse stock split

1988.3.24

Registered common shares

4,400,000

22,000,000

66,000,000

Paid-in capital increase

1988.8.4

Registered preferred shares

6,600,000

33,000,000

99,000,000

Paid-in capital increase

1989.3.30

Registered preferred shares

6,600,000

33,000,000

132,000,000

Paid-in capital increase

1989.3.31

Registered common shares

3,300,000

16,500,000

148,500,000

Stock issue

Registered preferred shares

3,300,000

16,500,000

165,000,000

Capitalization of excess reserves

1989.5.30

Registered common shares

3,166,493

15,832,465

180,832,465

Stock dividend

1989.12.9

Registered common shares

1,129,240

5,646,200

186,478,665

Paid-in capital increase

Registered preferred shares

4,295,733

21,478,665

207,957,330

1989.12.12

Registered common shares

5,204,267

26,021,335

233,978,665

Stock issue

Registered preferred shares

5,204,267

26,021,335

260,000,000

Capitalization of excess reserves

1990.5.26

Registered common shares

2,048,410

10,242,050

270,242,050

Stock dividend

1994.5.28

Registered common shares

1,080,966

5,404,830

275,646,880

Stock dividend

1995.5.27

Registered common shares

1,270,624

6,353,120

282,000,000

Stock dividend

1999.8.31

Registered common shares

1,128,000

5,640,000

287,640,000

Paid-in capital increase

1999.11.3

Registered common shares

17,258,400

86,292,000

373,932,000

Paid-in capital increase

2005.12.17

Registered common shares

2,187,000

10,935,000

384,867,000

Paid-in capital increase

2007.11.3

Registered preferred shares

10,000,000

50,000,000

434,867,000

Paid-in capital increase

Subsidiary

Relations

Company

Address

Book Value

(billion KRW)

Main business

Stake

%

Daishin Economic Research Institute

34-8 Youido-dong Youngdungpo-ku, Seoul, 150-884, Korea

4.95

Service

495,000

99%

Research

Daishin Investment Trust Management

34-8 Youido-dong Youngdungpo-ku, Seoul, 150-884, Korea

39.46

Securities investment trust & advisory

6,000,000

100%

-

Daishin Securities  Asia Limited,

Hong Kong

28/F, Queen's Road Central 8, Central, Hong Kong

12.91

Brokerage, advisory

10,000,000

100%

-

Pegasus PEF

-

3.39

PEF

-

26.1%

Position

Name

Concurrent office

Notes

Executive Manager

Director

Planning Group

Yong-Hyun Cho

Daishin Investment Trust Management Independent 

Auditor

2009

2008

2007

Ⅰ. Operating revenues

2,823,670,244

2,690,484,028

1,033,910,492

Ⅱ. Operating expenses

2,723,541,110

2,466,844,238

912,441,246

Ⅲ. Operating income

100,129,134

223,639,790

121,469,245

Ⅳ. Non-operating income

27,062,390

41,840,120

24,309,899

Ⅴ. Non-operating expenses

2,277,936

9,280,188

6,228,861

Ⅵ. Net income before taxes

124,913,588

256,199,722

139,550,283

Ⅶ. Income tax expense

21,662,244

78,358,876

39,560,680

Ⅷ. Net income

103,251,344

177,840,846

99,989,604

2009

2008

2007

Assets

Ⅰ. Cash and deposits

 1,381,131,392 

 1,010,070,660 

 800,684,214 

Ⅱ. Securities

 3,,491,341,898 

 3,075,990,415 

 2,890,463,819 

Ⅲ. Derivatives

 366,332,382 

 491,492,701 

 215,317,208 

Ⅳ. Loans

519,708,930 

730,602,182 

 620,634,923 

Ⅴ. Tangible fixed assets

 547,306,130 

 538,849,820 

 586,667,406 

Ⅵ. Other assets

 181,568,528 

 131,771,748 

 202,573,047 

Total assets

 6,487,389,264 

 5,978,777,527 

 5,316,340,617 

Liabilities

Ⅰ. Deposits from customers

 1,134,342,861 

 811,393,326 

 899,291,693 

Ⅱ. Borrowings

 3,538,146,354 

 3,235,624,938 

 2,746,423,723 

Ⅲ. Other liabilities

 157,281,094 

 201,470,199 

 148,890,165 

Total liabilities

 4,829,770,311 

 4,248,488,463 

 3,794,605,581 

Stockholder's equity

Ⅰ. Capital stock

 434,867,000 

 434,867,000 

 384,867,000 

Ⅱ. Capital surplus

 715,771,295 

 717,846,169 

 655,919,845 

Ⅲ. Capital adjustments

(139,041,646)

(78,044,740)

(17,098,659)

Ⅳ. Accumulated other comprehensive income

 61,081,073 

 62,538,914 

 5,366,482 

Ⅴ. Retained earnings

 584,941,229 

 593,081,721 

 492,680,368 

Total stockholder's equity

 1,657,618,952 

 1,730,289,064 

 1,521,735,036 

Total Liabilities and Stockholder's equity

 6,487,389,263 

 5,978,777,527 

 5,316,340,617 

FY2008

FY2007

FY2006

Net Capital Ratio

609.8 %

609.8 %

712.9 %

Assets to Liabilities Ratio

127.8%

134.3 %

132.7 %

Stakeholder

Number of shares

Percentage(%)

Relation with Daishin

Remark

Hong-Seok Yang and 5 relatives

3,512,964 shares

6.92%

Major Shareholder

Daishin ESOP

3,493,324 shares

6.88%

ESOP

Treasury stock

5,388,808 shares

10.61%

Treasury stock

National Pension Service.

3,321,769 shares

6.54%

-

Sort

Name

Position

Duty

Remark

Full-time

Auh-Ryung Lee

Chairwoman

Full-time

Chung-Nam Roh

President & CEO

Full-time

Ki-Hoon Kim

Audit committee member

Auditing Dept, Legal Support Dept.

Part-time

Young-Ill Koh

Outside Director

Audit Committee chairman

Part-time

Ki-Bae Lee

Outside Director

Part-time

Sung-Ho Kim

Outside Director

Part-time

In-Tae Hwang

Outside Director

Audit Committee member

2009

2008

Assets

Cash and bank deposits 

￦ 409,060,038

￦ 361,222,311

Deposits segregated under regulation 

972,071,355

648,848,349

Trading securities 

2,697,372,812

1,976,064,478

Available-for-sale securities 

248,900,815

244,113,001

Equity-method investments 

60,713,594

64,197,769

Structured securities 

433,176,449

755,122,814

Derivative assets 

366,332,382

491,492,701

Loans receivable, net 

519,708,931

730,602,182

Property and equipment, net 

547,306,131

538,849,820

Intangible assets, net 

30,314,940

12,352,905

Accounts receivable, net 

34,313,048

14,279,772

Accrued revenue, net 

40,931,852

28,636,667

Advanced payments

11,966,612

7,594,625

Guarantee deposits

63,555,539

65,287,449

Collective fund for default loss 

5,403,190

6,565,910

Others

46,261,576

33,546,774

Total assets

￦ 6,487,389,264

￦ 5,978,777,527

2009

2008

Liabilities and Shareholders' Equity

Liabilities

Deposits from customers 

￦ 1,134,342,861

￦ 811,393,326

Borrowings 

409,583,235

613,498,183

Debentures, net 

59,679,998

10,000

Securities sold under repurchase

agreements 

1,740,559,485

1,223,720,658

Securities sold

2,579,222

13,007,866

Structured securities sold 

1,165,433,853

1,382,751,472

Derivative liabilities

160,310,563

2,636,760

Accrued severance benefits, net 

1,759,474

1,334,621

Income taxes payable

-

46,266,903

Other accounts payable

29,443,514

15,157,455

Accrued expenses

15,898,095

19,933,068

Guarantee deposits received

65,937,175

71,040,053

Deferred income tax liabilities 

40,093,889

33,011,641

Withholdings

2,633,876

9,257,646

Others

1,515,071

5,468,811

Total liabilities

4,829,770,311

4,248,488,463

Commitments and contingencies 

Shareholders' equity

Capital stock 

Common stock

254,867,000

254,867,000

Preferred stock

180,000,000

180,000,000

Capital surplus

715,771,296

717,846,169

Capital adjustments 

(139,041,646)

(78,044,740)

Accumulated other comprehensive 

income 

61,081,074

62,538,914

Retained earnings 

584,941,229

593,081,721

Total shareholders' equity

1,657,618,953

1,730,289,064

Total liabilities and

shareholders' equity

￦ 6,487,389,264

￦ 5,978,777,527

2009

2008

Operating revenues

Commissions received 

￦ 293,114,678

￦ 431,214,666

Gain on sales of trading securities

104,083,162

108,455,788

Gain on valuation of trading securities

33,372,056

9,275,435

Gain on disposal of available-for-sale 

securities

2,429,515

9,310,161

Gain on valuation of securities sold

-

631,233

Gain on structured securities transactions

38,755,058

76,217,703

Gain on structured securities sold 

transactions

1,676,233,143

943,923,599

Gain on derivative transactions

410,669,648

898,777,264

Interest income

209,107,414

161,519,068

Dividend income

4,322,427

3,549,639

Gain on valuation of deposits segregated under regulation

39,746,681

40,205,358

Reversal of allowance for doubtful accounts

4,166,517

5,856,758

Others

7,669,945

1,547,356

2,823,670,244

2,690,484,028

Operating expenses

Commissions expenses

19,685,357

29,394,608

Loss on sales of trading securities

138,521,575

95,616,005

Loss on valuation of trading securities

4,420,568

4,219,166

Loss on disposal of available-for-sale 

securities

802,286

170,263

Loss on impairment of available-for-sale 

securities 

6,029,315

333,697

Loss on valuation of securities sold

263,882

51,326

Loss on structured securities transactions

225,828,176

105,175,500

Loss on structured securities sold

transactions

200,001,803

941,149,877

Loss on derivatives transactions

1,681,569,405

882,198,109

Interest expense

130,728,212

91,001,149

General and administrative expenses 

296,013,906

314,705,473

Bad debts expense

19,270,143

2,798,526

Others

406,482

30,539

2,723,541,110

2,466,844,238

Operating income

100,129,134

223,639,790

(in thousands of Korean won)

2009

2008

Non-operating income

Office rental income

￦ 13,479,206

￦ 13,142,941

Gain on disposal of property and equipment

7,330

24,946,210

Gain on valuation of equity-method 

investments 

298,097

598,969

Others

13,277,757

3,152,000

27,062,390

41,840,120

Non-operating expenses

Loss on disposal of property and equipment

253,963

2,263,350

Donation

1,221,943

5,525,912

Loss on valuation of equity-method 

 investments 

793,021

43,240

Others

9,009

1,447,686

2,277,936

9,280,188

Net income before income taxes

124,913,588

256,199,722

Income tax expense 

21,662,244

78,358,876

Net income

￦ 103,251,344

￦ 177,840,846

￦ 1,317

￦ 2,043

Basic earnings per share (in Korean won)

Diluted earnings per share (in Korean won)

￦ 1,317

￦ 2,043

(in thousands of Korean won)

2009

2008

Retained earnings before appropriations

Unappropriated retained earnings

carried over from prior year

￦ 23,703,252

￦ 37,858,321

Net income

103,251,345

177,840,846

126,954,597

215,699,167

Transfer from reserve for loss on futures

transactions

120,628

55,363

Appropriations (Note 18)

Legal reserves

8,007,449

10,616,186

Reserve for loss on futures transactions

-

43,256

Other capital adjustments

-

5,229,977

Dividends

80,074,489

106,161,859

Voluntary reserves

10,000,000

70,000,000

98,081,938

192,051,278

Unappropriated retained earnings

carried forward to the subsequent year

￦ 28,993,287

￦ 23,703,252

(in thousands of Korean won)

2009

2008

Cash flows from operating activities

Net income

￦ 103,251,344

￦ 177,840,846

Adjustments to reconcile net income

to net cash provided by operating activities

Loss (Gain) on disposal of trading securities, net

34,438,413

(12,839,783)

Gain on valuation of trading securities, net

(28,951,488)

(5,056,269)

Loss on structured securities transactions, net

187,073,118

28,957,798

Gain on structured securities sold transactions, net

(1,476,231,340)

(2,773,722)

Loss (Gain) on derivatives transactions, net

1,270,899,757

(16,579,155)

Loss (Gain) on valuation of securities sold , net

263,882

(579,907)

Bad debts expense

19,270,143

2,798,526

Depreciation 

23,395,755

20,546,739

Loss(Gain) on disposal of property and equipment, net

246,633

(22,682,860)

Loss on impairment of available-for-sale securities

6,029,315

333,697

Gain on disposal of available-for-sale securities, net

(1,627,229)

(9,139,898)

Provision for severance benefits

1,578,846

1,283,391

Loss (Gain) on valuation of equity-method

investments, net

494,924

(555,729)

Reversal of allowance for doubtful accounts

(4,166,517)

(5,856,758)

Gain on valuation of deposits segregated under regulation

(39,746,681)

(40,205,358)

Others, net

7,733,317

12,425,879

103,952,192

127,917,437

(in thousands of Korean won)

2009

2008

Changes in operating assets and liabilities

Deposits segregated under regulation

￦ (283,476,325)

￦ 105,421,819

Trading securities

(726,795,259)

(487,684,259)

Structured securities

131,773,660

448,452,457

Derivative assets

(1,149,138,387)

(259,853,692)

Loans receivable

215,059,768

(104,351,877)

Accounts receivable

(24,727,539)

83,805,231

Accrued revenue

(10,177,190)

(532,105)

Advanced payments

(4,371,987)

10,056,492

Collective fund for default loss

1,162,720

387,575

Derivative liabilities

162,323,277

2,609,644

Deposits from customers

322,951,998

(84,216,574)

Securities sold

(10,692,527)

10,186,300

Structured securities sold

1,258,913,721

(99,455,650)

Income taxes payable

(45,479,882)

37,899,723

Other accounts payable

14,286,058

(9,370,153)

Accrued expenses

(4,034,973)

7,660,884

Withholdings

(6,623,770)

3,312,238

Deferred income tax

13,575,909

(1,538,727)

Decrease in severance insurance

plan deposits

2,811,582

757,404

Payment of retirement trust

55,093

103,118

Payment of severance benefits

(318,787)

(2,285,130)

Securities sold under repurchase agreements

516,838,827

327,573,722

Others, net

(12,363,412)

(2,487,718)

361,552,575

(13,549,278)

Net cash provided by operating activities

465,504,767

114,368,159

Cash flows from investing activities

Decrease in time deposits, net

1,000,000

-

Decrease (Increase) in guarantee deposits, net

1,731,910

(9,396,244)

Disposal of property and equipment

14,270

101,743,961

Acquisition of property and equipment

(32,112,969)

(51,790,254)

Acquisition of intangible assets

(17,962,035)

(12,352,905)

Disposal of available-for-sale-securities

38,054,397

75,970,853

Acquisition of available-for-sale-securities

(72,320,670)

(127,203,070)

Decrease in equity-method investments

9,440,900

-

Increase in equity-method investments 

(3,491,723)

(18,891,029)

Others

(8,021,261)

(3,963,163)

Net cash used in investing activities

(83,667,181)

(45,881,851)

(in thousands of Korean won)

2009

2008

Cash flows from financing activities

Increase (Decrease) in borrowings, net

￦ (203,914,947)

￦ 251,898,183

Issuance of shares

-

112,850,436

Disposal of treasury shares

-

5,887,500

Acquisition of treasury shares

(77,503,777)

(79,876,528)

Decrease in guarantee deposits received, net

(5,102,877)

(7,521,135)

Issuance of debentures

59,678,900

-

Retirement of debentures

(10,000)

-

Payments of dividends

(106,147,158)

(77,439,494)

Others

-

9,198

Net cash provided by (used in) financing activities

(332,999,859)

205,808,160

Net increase in cash and cash equivalents

48,837,727

274,294,468

Cash and cash equivalents 

Beginning of year

360,183,811

85,889,343

End of year

￦ 409,021,538

￦ 360,183,811

This report is effective as of May 11, 2009, the audit report date. Certain subsequent events or circumstances, which may occur between the audit report date and the time of reading this report, could have a material impact on the accompanying non-consolidated financial statements and notes thereto. Accordingly, the readers of the audit report should understand that there is a possibility that the above audit report may have to be revised to reflect the impact of such subsequent events or circumstances, if any

FY06

FY07

FY08

%YoY

Brokerage 

Financial service (loan service) 

Wealth management 

Capital markets (proprietary trading income) 

Investment 

Others

282.8

30.4

27.5

22.2

5.0

15.4

411.6

52.8

19.0

41.9

7.5

5.6

290.3

37.2

14.5

63.4

4.8

-14.0

-29.5

-29.7

-23.8

51.4

-35.7

-

Net operating revenues

383.3

538.3

396.1

-29.4

FY06

FY07

FY08

Brokerage 

Financial service (loan service) 

Wealth management 

Capital markets (proprietary trading income) 

Investment banking