LG Electronics Inc.

Separate Financial Statements December 31, 2022 and 2021

LG Electronics Inc.

Index

December 31, 2022 and 2021

Page(s)

Independent Auditor’s Report

(English Translation of a Report Originally Issued in Korean)

To the Shareholders and Board of Directors of

LG Electronics Inc.

Opinion

We have audited the accompanying separate financial statements of LG Electronics Inc. (the “Company”), which comprise the separate statements of financial position as at December 31, 2022 and 2021, and the separate statements of profit or loss, separate statements of comprehensive income, separate statements of changes in equity and separate statements of cash flows for the years then ended, and notes to the separate 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 at 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 (Korean IFRS).

We have also audited, in accordance with Korean Standards on Auditing, the Company’s Internal Control over Financial Reporting as at December 31, 2022, based on Conceptual Framework for Designing and Operating Internal Control over Financial Reporting, and our report dated March 17, 2023 expressed an unqualified opinion.

Basis for Opinion

We conducted our audits in accordance with Korean Standards on Auditing. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the ethical requirements of the Republic of Korea that are relevant to our audit of the financial statements and we have fulfilled our other ethical responsibilities in accordance with the ethical requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the separate financial statements of the current period. These matters were addressed in the context of our audit of the separate financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

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(a) Impairment test of investments in subsidiaries

Reasons why the matter was determined to be a key audit matter

The Company held 70% of shares of ZKW Holding GmbH and its related entity (hereinafter referred to as “ZKW”), which was classified as a subsidiary. The Company recognized 528.7 billion of the impairment loss for the year ended December 31, 2021. The Company performed an impairment test on the ZKW CGU an impairment indication was identified during the year ended December 31, 2022. As a result, no impairment loss was recognized. However, we determined the impairment test of investments in subsidiaries as a key audit matter given the actual business performance compared to the business plan estimation was decreased due to impact of various economic conditions, and the level of management’s judgments involved in the value-in-use assessment used in impairment testing is significant.

How our audit addressed the Key Audit Matter

We performed the following audit procedures related to the assessment of value-in-use performed by the Company. We also involved our valuation specialists when performing such audit procedures. Our audit procedures included:

• Obtaining an understanding of the accounting policies and internal controls of the Company related to impairment testing
• Testing internal controls such as the management’s review and approval of business plan estimation and significant assumptions of the valuation model for impairment testing
• Making inquiries on and obtaining an understanding of the valuation model used by the Company and assessing the consistency with the prior year
• Evaluating the competence and objectivity of the independent external expert engaged by the Company
• Evaluating the appropriateness of the business plan estimation by management by comparing business plans of ZKW used in the prior year impairment testing with actual business performance
• Obtaining an understanding of future cash flows of ZKW, and confirming that such future cash flows forecasts are consistent with the corresponding information included in business plans approved by management
• Evaluating appropriateness of significant assumptions used in the valuation model such as discount rates, growth rates and others by comparing them with external benchmarks within the same industry and historical financial information of ZKW
• Performing a sensitivity analysis of significant assumptions in order to quantify the downside changes in assumptions that could result in an impairment

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(b) Provisions for GM recall

Reasons why the matter was determined to be a key audit matter

The Company recognized 1,429.4 billion of provisions expected to be incurred in accordance with General Motors Company (hereinafter referred to as “GM”)’s voluntary recall decision in 2021 due to defects in electric vehicle batteries supplied to GM. As settlement and payment were made during the year ended December 31, 2022, the provisions were decreased to 363.2 billion. However, due to the fluctuations in related estimation factors, we determined the provisions for GM recall as a key audit matter given the level of management’s judgments involved in the estimation of provisions is significant.

How our audit addressed the Key Audit Matter

We performed the following audit procedures related to recognition and measurement of provisions for GM recall.

• Obtaining an understanding of the accounting policies and internal controls related to recognition and measurement of provisions
• Testing internal controls such as the management’s review and approval of significant judgements used in recognition and measurement of provisions
• Performing review for determination of significant assumptions used in measurement of provisions and detailed calculations

Other Matter

Auditing standards and their application in practice vary among countries. The procedures and practices used in the Republic of Korea to audit such separate financial statements may differ from those generally accepted and applied in other countries.

Responsibilities of Management and Those Charged with Governance for the Financial Statements

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

In preparing the 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.

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

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