Daesang Corporation and its Subsidiaries

Consolidated Financial Statements

For the years ended December 31, 2023 and 2022
with independent auditors’ report
 Table of contents

Page

Report of Independent Auditors 1

Consolidated Financial Statements: 4

Consolidated Statements of Financial Position 5

Consolidated Statements of Comprehensive Income 7

Consolidated Statements of Changes in Equity 8

Consolidated Statements of Cash Flows 9

Notes to the Consolidated Financial Statements 11

Independent auditor’s report on internal control over financial reporting 90

Management’s report on the effectiveness of internal control over financial reporting 92

 Report of Independent Auditors
(English Translation of Independent Auditors’ Report Originally Issued in Korean on March 14, 2024)

To the Board of Directors and Stockholders

Daesang Corporation

Opinion

We have audited the accompanying consolidated financial statements of Daesang Corporation and its
subsidiaries (the “Group”), which comprise the consolidated statements of financial position as of
December 31, 2023 and 2022, and the consolidated statements of comprehensive income, consolidated
statements of changes in equity and consolidated statements of cash flows, for the years then ended, and
notes to the consolidated financial statements, including material accounting policy information.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects,
the financial position of the Group as of December 31, 2023 and 2022, and its financial performance and
its cash flows for the years then ended in accordance with Korean International Financial Reporting
Standards (“K-IFRS”).

We have also audited, in accordance with Korean Standards on Auditing (“KSAs”), the Group’s Internal
Control over Financial Reporting (“ICFR”) of the Group as of December 31, 2023 based on the criteria
established in Conceptual Framework for Designing and Operating Internal Control over Financial
Reporting issued by the Republic of Korea, and our report dated March 14, 2024 expressed an unmodified
opinion on the effectiveness of the Group’s internal control over financial reporting.

Basis for Opinion

We conducted our audits in accordance with auditing standards generally accepted in the Republic of
Korea. Our responsibilities under those standards are further described in the Auditor’s Responsibilities
for the Audit of the Consolidated Financial Statements section of our report. We are independent of the
Group in accordance with the ethical requirements that are relevant to our audit of the consolidated
financial statements in the 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.

Key Audit Matters

The key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the consolidated financial statements of the current period. This matter was addressed in the
context of our audit of the consolidated financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on this matter.

(1) Variable consideration and consideration paid to the customers

A. Reasons why the matter was determined to be a key audit matter:

Revenue in the consolidated financial statements is one of the Group’s key financial performance
indicators. As revenue is measured based on variable consideration and consideration paid to customers,
the significance of amounts such as sales incentives and the complexity of the calculations, a significant
risk of error in recognition of the variable consideration and consideration to be paid to customers, which
may result in overstatement of revenue has been identified as a key audit matter.

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B. How the key audit matter was addressed in the audit:
- Understand and evaluate revenue recognition accounting policies
- Performed tests on the effectiveness of the design and operation of related internal controls
- Performed trend analyses of the monthly sales incentives for major customers.
- Inspected supply contracts for major customers to identify variable consideration and considerations
payable to the customers and assessed the appropriateness of the treatment of the related revenue
recognized.
- Assessed the appropriateness of the revenue recognition of sales incentives by obtaining relevant
documents and testing transactions for a sample selected.
- Evaluated the completeness of the revenue deduction through inspection of general ledger accounts to
assess whether the consideration to be paid to the customer amounts were recorded in the selling expense
accounts

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

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

In preparing the consolidated financial statements, management is responsible for assessing the Group’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless management either intends to liquidate the Group or
to cease operations.

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

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as
a whole are free from material misstatement, whether due to fraud or error, and to issue an 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 auditing standards generally accepted in the Republic of Korea 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 financial statements.

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

⚫ Identify and assess the risks of material misstatement of the consolidated financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of
not detecting a material misstatement resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control.

⚫ Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Group’s internal control.

⚫ Evaluate the appropriateness of accounting policies used in the preparation of the consolidated
financial statements and the reasonableness of accounting estimates and related disclosures made by
management.

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⚫ Conclude on the appropriateness of the management’s use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If
we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s
report to the related disclosures in the consolidated financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to
the date of our auditor’s report. However, future events or conditions may cause the Group to cease
to continue as a going concern.

⚫ Evaluate the overall presentation, structure and content of the consolidated financial statements,
including the disclosures, and whether the consolidated financial statements represent the underlying
transactions and events in a manner that achieves fair presentation.

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 to 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 consolidated financial statements of the current period 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 partner in charge of the audit resulting in this independent auditor’s report is Dongkun, Seo.

Seoul, Korea

March 14, 2024

This report is effective as of March 14, 2024, the audit report date. Certain subsequent events or circumstances, which may
occur between the audit report date and the time of reading this report, could have a material impact on the accompanying
consolidated financial statements and notes thereto. Accordingly, the readers of the audit report should understand that 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.

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 Daesang Corporation and its Subsidiaries

Consolidated Financial Statements

For the years ended December 31, 2023 and 2022

“The accompanying consolidated financial statements, including all footnotes and disclosures, have been
prepared by, and are the responsibility of, the Group.”

Jung-bae Lim
CEO

Daesang Corporation

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Daesang Corporation and its Subsidiaries
Consolidated Statements of Financial Position
December 31, 2023 and 2022

(in Korean won) Notes 2023-12-31 2022-12-31

Assets
Current assets:
Cash and cash equivalents 3,5,6 742,445,231,766 558,982,649,590
Short-term financial instruments 3,5,6,18 17,900,000,000 26,821,383,045
Trade receivables and other receivables 5,7,29,31 403,715,199,126 374,460,615,319
Inventories 8 540,445,113,698 706,516,280,331
Current income tax assets 727,603,597 2,250,795,303
Other current financial assets 5,10 2,077,859,235 11,809,805,266
Other current assets 10 46,368,833,791 35,090,410,464
Assets held for sale 33 4,019,692,070 5,072,781,671
1,757,699,533,283 1,721,004,720,989
Non-current assets:
Long-term financial instruments 5,6 8,201,778,973 184,808,945
Financial assets at fair value through profit 5,9 26,137,687,858 24,571,165,938
or loss
Financial assets at fair value through other 5,9,18 10,647,559,591 14,505,705,258
comprehensive income
Investments in associates and 11 69,642,968,091 68,176,943,407
joint ventures
Property, plant and equipment, net 12,18 1,132,764,353,016 1,063,612,921,928
Intangible assets, net 13 151,526,238,765 119,209,271,902
Investment property, net 14 29,426,942,171 30,086,184,661
Right-of-use assets, net 18,32 62,273,051,901 69,027,970,450
Deferred income tax assets 26 17,671,977,611 14,098,731,839
Other non-current financial assets 5,10 40,669,245,963 41,023,113,198
Other non-current assets 10,21 27,708,690,255 24,694,909,853
1,576,670,494,195 1,469,191,727,379
Total assets 3,334,370,027,478 3,190,196,448,368

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Daesang Corporation and its Subsidiaries
Consolidated Statements of Financial Position, Continued
December 31, 2023 and 2022

(in Korean won) Notes 2023-12-31 2022-12-31

Liabilities
Current liabilities:
Trade payables and other payables 3,5,15,18,29 368,023,146,833 336,663,627,047
Short-term borrowings 3,5,16,18 321,381,416,684 469,896,611,946
Current portion of long-term borrowings 3,5,16,18 29,722,321,409 11,906,194,684
Current portion of debentures 3,5,17 129,989,745,499 79,994,272,276
Current provisions 19 9,218,539,793 8,300,918,813
Income tax liabilities 26 4,342,565,549 111,818,536
Other current financial liabilities 3,5,10,32 57,136,745,933 52,921,879,646
Other current liabilities 10,31 39,974,194,409 37,444,063,675
959,788,676,109 997,239,386,623
Non-current liabilities:
Trade payables and other payables 3,5,15 95,212,584 95,212,584
Long-term borrowings 3,5,16,18 275,072,789,927 179,229,499,647
Debentures 3,5,17 588,865,532,640 528,825,447,517
Non-current provisions 19 1,840,426,062 1,824,307,130
Defined benefit obligations, net 20 124,362,057,511 108,711,226,463
Deferred income tax liabilities 26 3,315,798,717 650,663,079
Other non-current financial liabilities 3,5,10,32 36,508,409,788 49,370,636,729
Other non-current liabilities 10 774,519,508 1,623,567,212
1,030,834,746,737 870,330,560,361
Total liabilities 1,990,623,422,846 1,867,569,946,984
Equity
Equity attributable to owners of parent
Capital stock 1,22 36,018,248,000 36,018,248,000
Paid-in capital in excess of par value 73,467,953,000 73,467,953,000
Retained earnings 22 1,041,447,899,922 1,026,593,748,504
Other components of equity 22 170,164,034,778 167,232,912,087
1,321,098,135,700 1,303,312,861,591
Non-controlling interests 30 22,648,468,932 19,313,639,793
Total equity 1,343,746,604,632 1,322,626,501,384
Total liabilities and stockholders’ equity 3,334,370,027,478 3,190,196,448,368

The accompanying notes are the part of the consolidated financial statements.

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Daesang Corporation and its Subsidiaries
Consolidated Statements of Comprehensive Income
Years ended December 31, 2023 and 2022

(in Korean won) Notes 2023 2022

Revenues 4,29,31 4,107,493,943,805 4,084,090,277,577
Cost of sales 23,29 3,088,480,107,396 3,113,752,793,399
Gross profit 1,019,013,836,409 970,337,484,178
Selling, general and administrative expenses
23,24 895,297,189,194 830,338,493,357
(SG&A)
Loss allowance for expected credit losses
538,209,526 399,355,898
included in SG&A
Operating profit 4 123,716,647,215 139,998,990,821
Other non-operating income 25 46,051,118,907 56,730,646,176
Reversal of loss allowance for other
expected credit losses included in other
non-operating income - 3,047,771,219
Other non-operating expenses 25 45,730,592,671 50,379,312,927
Loss allowance for other expected credit
losses included in other non-operating
expenses 85,286,354 10,803,300
Finance income 25 38,461,539,425 43,146,113,880
Interest income of the effective interest
method included in finance income 240,150,513 290,793,573
Finance expenses 25 69,994,969,457 81,178,958,329
Share of net income (loss) of equity-
11,25 (2,351,693,093) 2,615,393,498
accounted investees
Net income before income taxes 90,152,050,326 110,932,873,119
Income tax expense 26 21,588,149,002 28,713,978,190
Net income 68,563,901,324 82,218,894,929
Net income for the years attributable to:
Equity holders of the parent company 67,078,680,843 83,068,781,218
Non-controlling interests 30 1,485,220,481 (849,886,289)
Other comprehensive income (loss):
Items that may be reclassified subsequently to profit or loss:
Changes in equity accounts from valuation of
11 1,656,656,301 (1,865,974,938)
investments accounted under equity method
Gain (loss) on overseas operations translation 4,711,911,818 (1,573,898,927)
Items that will not be reclassified subsequently to profit or loss:
Gain (loss) on valuation of financial assets at
9 (2,970,289,019) 396,403,741
FVOCI
Changes in retained earnings from valuation
11 (296,656,800) 57,911,175
of equity method
Remeasurements of the defined benefit
20 (23,163,081,106) 24,998,929,197
obligations
Total comprehensive income 48,502,442,518 104,232,265,177
Total comprehensive income for the years
attributable to:
Equity holders of the parent company 46,613,574,739 105,240,830,201
Non-controlling interests 30 1,888,867,779 (1,008,565,024)
Earnings per share on equity in parent 27
Basic earnings per share (common share) 1,862 2,306
Basic earnings per share (preferred share) 1,872 2,316

The accompanying notes are the part of the consolidated financial statements.

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Daesang Corporation and its Subsidiaries
Consolidated Statements of Changes in Equity
Years ended December 31, 2023 and 2022

Equity Attributable to Owners of Parent

Non-Controlling
Total
Capital in Other Interests
Notes Issued capital excess of par Retained earnings components of Sub total
value equity
(in Korean won)

Balance as of January 1, 2022 36,018,248,000 73,467,953,000 947,397,755,003 170,016,376,017 1,226,900,332,020 20,322,204,817 1,247,222,536,837

Net income - - 83,068,781,218 - 83,068,781,218 (849,886,289) 82,218,894,929

Other comprehensive income(loss):

Gain (loss) on valuation of financial assets at - - - 396,403,741 396,403,741 - 396,403,741

FVOCI
Changes in retained earnings and equity from
valuation of investments accounted under equity 11 - - 57,911,175 (1,865,974,938) (1,808,063,763) - (1,808,063,763)
method

Gain (loss) on translation of overseas operations - - - (1,313,892,733) (1,313,892,733) (260,006,194) (1,573,898,927)

Remeasurement of net defined benefit obligations - - 24,897,601,738 - 24,897,601,738 101,327,459 24,998,929,197

Total comprehensive income for the year - - 108,024,294,131 (2,783,463,930) 105,240,830,201 (1,008,565,024) 104,232,265,177

Annual dividends 22 - - (28,828,300,630) - (28,828,300,630) - (28,828,300,630)

Balance as of December 31, 2022 36,018,248,000 73,467,953,000 1,026,593,748,504 167,232,912,087 1,303,312,861,591 19,313,639,793 1,322,626,501,384

Balance as of January 1, 2023 36,018,248,000 73,467,953,000 1,026,593,748,504 167,232,912,087 1,303,312,861,591 19,313,639,793 1,322,626,501,384

Net income - - 67,078,680,843 - 67,078,680,843 1,485,220,481 68,563,901,324

Other comprehensive income(loss):

Gain (loss) on valuation of financial assets at - - (41,825,000) (2,928,464,019) (2,970,289,019) - (2,970,289,019)

FVOCI
Changes in retained earnings and equity from
valuation of investments accounted under equity 11 - - (296,656,800) 1,656,656,301 1,359,999,501 - 1,359,999,501
method

Gain (loss) on translation of overseas operations - - - 4,202,930,409 4,202,930,409 508,981,409 4,711,911,818

Remeasurement of net defined benefit obligations - - (23,057,746,995) - (23,057,746,995) (105,334,111) (23,163,081,106)

Total comprehensive income for the year - - 43,682,452,048 2,931,122,691 46,613,574,739 1,888,867,779 48,502,442,518

Annual dividends 22 - - (28,828,300,630) - (28,828,300,630) - (28,828,300,630)

Changes in consolidated entities - - - - - 1,445,961,360 1,445,961,360

Balance as of December 31, 2023 36,018,248,000 73,467,953,000 1,041,447,899,922 170,164,034,778 1,321,098,135,700 22,648,468,932 1,343,746,604,632

The accompanying notes are the part of the consolidated financial statements.

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Daesang Corporation and its Subsidiaries
Consolidated Statements of Cash Flows
Years ended December 31, 2023 and 2022

(in Korean won) Note 2023 2022

Cash flows provided by operating activities
Cash generated from operations 28 413,677,634,564 (23,349,318,418)
Interest income received 20,004,178,833 9,697,625,878
Interest paid (52,180,240,418) (30,576,362,164)
Dividends received 4,463,601,064 96,355,044
Income tax paid (11,125,309,942) (46,803,180,488)
Net cash provided by (used in) operating activities 374,839,864,101 (90,934,880,148)
Cash flows from investing activities
Increase in short-term financial instruments - (51,100,750,040)
Decrease in short-term financial instruments 8,789,690,034 45,000,000,000
Increase in long-term financial instruments (8,085,000,028) (146,098,800)
Decrease in long-term financial instruments 3,000,000 175,345,007
Increase in FVPL - (19,500,000,000)
Increase in FVOCI - (800,002,838)
Decrease in FVOCI 8,175,000 -
Increase in investments in associates and joint ventures (13,446,453,760) (20,585,407,333)
Decrease in investments in associates and joint ventures 5,483,331,600 -
Increase in property, plant and equipment (180,359,829,968) (174,356,604,418)
Decrease in property, plant and equipment 741,483,096 1,226,837,690
Increase in intangible assets (7,720,505,797) (5,075,454,394)
Decrease in intangible assets 123,009,789 -
Increase in investment property (15,452,800) -
Decrease in investment property 708,250,000 658,400,000
Increase in other financial assets (4,345,536,409) (28,449,542,683)
Decrease in other financial assets 15,355,471,575 21,874,198,163
Cash flow from changes in consolidated subsidiaries 1,445,961,360 -
Cash flow from business combination (29,376,137,204) 2,284,761,901
Net cash used in investing activities (210,690,543,512) (228,794,317,745)
Cash flows from financing activities
Increase in short-term borrowings 473,414,732,070 976,946,927,626
Decrease in short-term borrowings (643,068,981,146) (799,027,425,494)
Decrease in current portion of long-term borrowings 11,128,516,670 (15,096,182,619)
Decrease in current portion of debentures (80,000,000,000) (130,000,000,000)
Increase in long-term borrowings 166,459,357,515 126,259,651,510
Decrease in long-term borrowings (39,766,925,985) (365,472,000)
Issuance of debentures 189,340,560,000 199,253,940,000
Increase in other financial liabilities 340,582,038 4,844,813
Decrease in other financial liabilities (27,641,653,015) (26,051,944,977)
Dividends paid (28,828,300,630) (28,828,300,630)

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Daesang Corporation and its Subsidiaries
Consolidated Statements of Cash Flows, Continued
Years ended December 31, 2023 and 2022

(in Korean won) Note 2023 2022

Net cash provided by financing activities 21,377,887,517 303,096,038,229
Net increase (decrease) in cash and cash equivalents 185,527,208,106 (16,633,159,664)
Foreign currency effect on cash and cash equivalents (2,064,625,930) (10,705,821,569)
Cash and cash equivalents at beginning of year 558,982,649,590 586,321,630,823
Cash and cash equivalents at end of year 742,445,231,766 558,982,649,590

The accompanying notes are the part of the consolidated financial statements.

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Daesang Corporation and its Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

1. General Information

These consolidated financial statements have been prepared in accordance with Korean International Financial
Reporting Standards (“Korean IFRS”) 1110, Consolidated Financial Statements. Daesang Corporation, as the
controlling company, consolidates its 24 subsidiaries, including Daesang Dives Co., Ltd. The Company also applies the
equity method of accounting for its associates and joint ventures, including PT Daesang Agung Indonesia and DMC
Co., Ltd.

Daesang Corporation (the Company”) was incorporated on 1956 and listed on the Korea Stock Exchange (KOSPI) in
April 1970. The Company’s main business is to manufacture seasonings and food additives. The Company has been
through several capital increases and reductions since its establishment, and as of December 31, 2023, the Company’s
paid-in capital was 36,018 million Korean Won (34,648 million Korean Won in common shares and 13,700 million
Korean Won in preferred shares).

As of December 31, 2023, major shareholders are as follows:

Stockholders Number of shares Percentage of ownership (%)

Daesang Holdings Co., Ltd. 13,608,456 39.28
National Pension Service 3,737,636 10.79
Daesang Cultural Foundation 1,324,957 3.82
Others 15,976,976 46.11
34,648,025 100.00

1.2 Consolidated Subsidiaries

(1) The consolidated subsidiaries as of December 31, 2023 and 2022 are as follows:

Ownership
Subsidiaries Location Reporting date Industry
December 31, 2023 December 31, 2022
Daesang Dives Co., Ltd. (*1) 100.00 100.00 Korea December 31, 2023 Food manufacture
Sinan Solar Salt Co., Ltd. 90.00 90.00 Korea December 31, 2023 Food manufacture
Daesang Food Plus Co., Ltd. 100.00 100.00 Korea December 31, 2023 Food manufacture
PT Daesnag Ingredients Indonesia 89.98 89.98 Indonesia December 31, 2023 Food manufacture
PT Daesang Food Indonesia 97.02 97.02 Indonesia December 31, 2023 Food manufacture
Daesang Vietnam Co., Ltd. (*2) 93.11 93.11 Vietnam December 31, 2023 Food manufacture
Daesang (H.K.) Ltd. 100.00 100.00 China December 31, 2023 Trade
Daesang (Beijing) Food Co., Ltd. 100.00 100.00 China December 31, 2023 Food manufacture
Tianjin Defeng Foods Co., Ltd. 100.00 100.00 China December 31, 2023 Food manufacture
Daesang Japan Inc. 100.00 100.00 Japan December 31, 2023 Trade
Daesang America Inc. 95.00 95.00 USA December 31, 2023 Trade
Daesang Europe. B.V. 100.00 100.00 Netherland December 31, 2023 Trade
DU Food Co., Ltd. 92.50 92.50 Korea December 31, 2023 Food manufacture
Daesang Duc Viet JSC. (*3) 100.00 100.00 Vietnam December 31, 2023 Food manufacture
Daesang Philippines Corporation 100.00 100.00 Philippine December 31, 2023 Trade
Daesang (Lianyungang) Food Co., Ltd. 100.00 100.00 China December 31, 2023 Food manufacture
DSF DE, Inc. 100.00 100.00 USA December 31, 2023 Holding company
Daesang Foods USA Inc. 100.00 100.00 USA December 31, 2023 Food manufacture
Daesang Deliheim Co., Ltd. 100.00 100.00 Korea December 31, 2023 Food manufacture
Daesang Foods Japan Inc. (*4) 100.00 - Japan December 31, 2023 Food manufacture
DSF OR Inc. (*4) 100.00 - USA December 31, 2023 Real estate
Lucky Foods, LLC. (*4) 100.00 - USA December 31, 2023 Food manufacture
Daesang ChPN Europe (*4) 76.00 - Poland December 31, 2023 Food manufacture
Daesang Australia Pty Ltd. (*4) 100.00 - Australia December 31, 2023 Food manufacture

(*1) During the current year, the entity’s name was changed from Daesang F&B Co., Ltd. to Daesang Dives Co., Ltd.
(*2) During the previous year, the entity’s name was changed from MIWON VIETNAM CO., LTD. to Daesang Vietnam Co., Ltd.
(*3) During the previous year, the entity’s name was changed from DUC VIET FOOD JOINT STOCK COMPANY to Daesang Duc Viet JSC.
(*4) During the current year, the entity was included from subsidiary due to acquisition of shares.

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Daesang Corporation and its Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

1. General Information, Continued

(2) Summary of financial data of consolidated subsidiaries are as follows:

(in millions of Korean won) As of December 31, 2023 For the year ended December 31, 2023
Total
Subsidiaries Assets Liabilities Equity Sales Net income comprehensive
income
Daesang Dives Co., Ltd. 78,503 30,630 47,873 156,888 5,727 5,464
Sinan Solar Salt Co., Ltd. 7,712 2,493 5,219 8,738 259 55
Daesang Food Plus Co., Ltd. 90,617 39,286 51,331 78,163 (2,450) (2,083)
PT Daesang Ingredients Indonesia 272,519 106,361 166,158 329,802 15,158 18,860
PT Daesang Food Indonesia 43,308 33,248 10,060 67,587 478 769
Daesang Vietnam Co., Ltd. 115,986 63,317 52,669 145,851 902 389
Daesang (H.K.) Ltd. 3,946 12 3,934 - (882) (789)
Daesang (Beijing) Food Co., Ltd. 9,093 17,947 (8,854) 56,550 (3,960) (3,869)
Tianjin Defeng Foods Co., Ltd. 5,803 357 5,446 3,713 65 46
Daesang Japan Inc. 47,374 45,658 1,716 110,754 (2,175) (2,298)
Daesang America Inc. 53,911 51,811 2,100 160,196 277 305
Daesang Europe. B.V. 43,768 43,032 736 140,532 (1,871) (1,751)
DU Food Co., Ltd. 3,342 1,973 1,369 10,685 135 115
Daesang Duc Viet JSC. 38,623 22,097 16,526 55,796 694 525
Daesang Philippines Corporation 40,643 15,244 25,399 19,741 (913) (550)
Daesang (Lianyungang) Food Co., Ltd. 26,611 5,716 20,895 13,966 456 322
DSF DE, Inc. 55,189 433 54,756 - (303) 57
Daesang Foods USA Inc. 26,419 14,230 12,189 4,443 (1,895) (1,631)
Daesang Deliheim Co., Ltd. 28,143 8,140 20,003 42,377 367 90
Daesang Foods Japan Inc. 3,571 3,368 203 1,462 114 107
DSF OR Inc. 5,307 - 5,307 125 8 (85)
Lucky Foods, LLC. 14,213 5,574 8,639 9,782 (391) (592)
Daesang ChPN Europe 5,988 118 5,870 82 (487) (155)
Daesang Australia Pty Ltd. 1,105 27 1,078 - (175) (142)
Total 1,021,694 511,072 510,622 1,417,233 9,138 13,159

12
Daesang Corporation and its Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

1. General Information, Continued

(in millions of Korean won) As of December 31, 2022 For the year ended December 31, 2022
Total
Subsidiaries Assets Liabilities Equity Sales Net income comprehensive
income
Daesang Dives Co., Ltd. 73,014 30,605 42,409 144,469 1,221 1,602
Sinan Solar Salt Co., Ltd. 6,806 1,643 5,163 8,722 193 446
Daesang Food Plus Co., Ltd. 87,369 33,955 53,414 65,342 (1,544) (1,067)
PT Daesang Ingredients Indonesia 245,537 98,238 147,299 369,468 (10,397) (13,237)
PT Daesang Food Indonesia 25,697 16,406 9,291 65,724 (46) (221)
Daesang Vietnam Co., Ltd. 99,519 47,239 52,280 170,592 2,856 4,258
Daesang (H.K.) Ltd. 8,088 3,365 4,723 49,175 318 597
Daesang (Beijing) Food Co., Ltd. 11,501 16,486 (4,985) 61,148 (2,396) (2,179)
Tianjin Defeng Foods Co., Ltd. 5,693 292 5,401 4,568 5 (138)
Daesang Japan Inc. 49,914 45,900 4,014 110,645 (813) (1,177)
Daesang America Inc. 46,965 45,170 1,795 141,480 (826) (642)
Daesang Europe. B.V. 68,219 65,732 2,487 169,392 455 466
DU Food Co., Ltd. 3,353 2,099 1,254 9,168 82 84
Daesang Duc Viet JSC. 26,118 10,117 16,001 52,053 1,447 1,845
Daesang Philippines Corporation 25,053 6,770 18,283 24,319 242 (427)
Daesang (Lianyungang) Food Co., Ltd. 26,347 7,700 18,647 15,438 (105) (598)
DSF DE, Inc. 17,019 - 17,019 - (1) 3
Daesang Foods USA Inc. 25,127 11,307 13,820 1,563 (2,827) (1,702)
Daesang Deliheim Co., Ltd. 28,730 8,817 19,913 40,129 (2,186) (2,024)
Hongbo Energy Co., Ltd. - - - 2,076 (740) (740)
Total 880,069 451,841 428,228 1,505,471 (15,062) (14,851)

(3) Changes in consolidation scope during the current year are as follows:

Subsidiaries Change Description

Daesang Foods Japan Inc. Included Establishment
DSF OR Inc. Included Establishment
Lucky Foods, LLC. Included Acquisition
Daesang ChPN Europe Included Establishment
Daesang Australia Pty Ltd. Included Establishment

13
Daesang Corporation and its Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

2. Basis of Preparation and Summary of Significant Accounting Policies

The principal accounting policies used to prepare the consolidated financial statements are set out below. Unless stated
otherwise, these accounting policies have been applied consistently to the consolidated financial statements for the
current period and the comparative period.

2-1 Basis of preparation

The consolidated financial statements have been prepared in accordance with Korean International Financial Reporting
Standards (“K-IFRS”), as prescribed in the Act on External Audit of Stock Companies, Etc. in the Republic of Korea.

The consolidated financial statements have been prepared under the historical cost basis, except as otherwise noted in
the accounting policies below. The consolidated financial statements are presented in Korean won and are stated in
millions of won unless otherwise noted.

2-2 Basis of consolidation

The consolidated financial statements comprise the financial statements of the Company and its subsidiaries
(collectively referred to as the “Group”) as of December 31, 2023, and 2022. Control is achieved when the Group is
exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those
returns through its power over the investee. Specifically, the Group controls an investee if, and only if the Group has:

- Power over the investee (i.e., existing rights that give it the current ability to direct the relevant activities of the investee)
- Exposure, or rights, to variable returns from its involvement with the investee
- The ability to use its power over the investee to affect its returns

When the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant
facts and circumstances in assessing whether it has power over an investee, including:

- The contractual arrangement with the other vote holders of the investee
- Rights arising from other contractual arrangements
- The Group’s voting rights and potential voting rights

The Group re-assesses 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. Consolidation of a subsidiary begins when the Group obtains control
over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses
of a subsidiary acquired or disposed of during the year are included in the consolidated statement of comprehensive
income from the date the Group gains control until the date the Group ceases to control the subsidiary.

Profit or loss and each component of other comprehensive income (OCI) are attributed to the equity holders of the
parent of the Group 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 into line with the Group’s accounting policies. All intra-group assets and liabilities, equity, income,
expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation.

A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction.

If the Group loses control over a subsidiary, it derecognizes the related assets (including goodwill), liabilities, non-
controlling interest and other components of equity while any resultant gain or loss is recognized in profit or loss. Any
investment is recognized at fair value.

14
Daesang Corporation and its Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

2. Basis of Preparation and Summary of Significant Accounting Policies, Continued

2-3 Business Combination and Goodwill

The Group applies the acquisition method to account for business combinations. The consideration transferred is
measured at the fair values of the assets transferred, and identifiable assets acquired, and liabilities and contingent
liabilities assumed in a business combination are initially measured at their fair values at the acquisition date. The Group
recognizes any non-controlling interest in the acquiree on an acquisition-by-acquisition basis in the event of liquidation
at the non-controlling interest’s proportionate share of the recognized amounts of acquiree’s identifiable net assets.
Acquisition-related costs are expensed as incurred.

In case of a business combination effected in stages, the acquirer remeasured its previously held interest in the acquired
asset to its fair value at the acquisition date, and any resulting difference between the fair value and the carrying amount
is reflected in profit or loss for the current period.

Any contingent consideration payable is measured at fair value at the acquisition date. Subsequent changes in the fair
value of the contingent consideration classified as assets or liabilities are recognized in profit or loss or other
comprehensive income in accordance with Korean IFRS 1109.
If the contingent consideration is classified as equity, then it is not remeasured, and settlement is accounted for within
equity. Otherwise, subsequent changes in the fair value of the contingent consideration are recognized in profit or loss.
If contingent consideration does not fall within the scope of application of Korean IFRS 1109, it is measured in
accordance with the appropriate Korean IFRS.

The excess of consideration transferred, of any non-controlling interest in the acquired entity, and acquisition-date fair
value of any previous equity interest in the acquired entity over the fair value of the net identifiable assets acquired is
recorded as goodwill. When the fair value of net assets acquired exceeds the sum of consideration transferred, the Group
reviews whether it has accurately identified all assets acquired and liabilities assumed and reviews the procedure used
to measure the amount recognized at the acquisition date.
If those amounts are less than the fair value of the net identifiable assets of the business acquired, the difference is
recognized directly in the profit or loss as a bargain purchase.

After initial recognition, goodwill is carried at cost less accumulated impairment losses.
For impairment testing purposes, goodwill acquired in a business combination is allocated from the acquisition date to
each cash-generating unit or group of cash-generating units that are expected to benefit from the synergies resulting
from the business combination. This is done regardless of whether other assets or liabilities of the acquiree are allocated
to the cash-generating unit or group of cash-generating units to be allocated.

When an operation within a cash-generating unit to which goodwill is allocated is disposed of, the goodwill related to
the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on
disposal, based on the relative value of the portion retained and the portion disposed of within the cash-generating unit.
are measuring.

2-4 Investments in Associates and Joint Ventures

Associates are all entities over which the Group has significant influence but does not have control. Significant influence
is the ability to participate in decisions regarding the financial and operating policies of an investee, but not the control
or joint control of those policies.

A joint venture is an arrangement in which the Group has joint control, whereby the Group has rights to the net assets
of the arrangement, rather than rights to its assets and obligations for its liabilities. Joint control is the contractually
agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the
unanimous consent of the parties sharing control.

15
Daesang Corporation and its Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

2-4 Investments in Associates and Joint Ventures, Continued

Associates and joint ventures are accounted for using the equity method. Under the equity method, on initial recognition,
the Group recognizes investments in associates and joint ventures cost. Subsequently, the Group adjusts the carrying
amount of the investments in associates and joint ventures to recognize the Group's share of the change in the net assets.
The goodwill related to an associate or joint venture is included in the carrying amount of the investment and is not
amortized or tested for impairment separately.

The Group's share of profit or loss from operations of associates and joint ventures is directly reflected in the
consolidated statement of income, and changes in other comprehensive income are presented as part of other
comprehensive income of the Group. If there is a change that is directly reflected in the equity of an associate or joint
venture, the corresponding share of the Group is reflected in the statement of changes in equity. Unrealized gains on
transactions between the Group and its associates and joint ventures are eliminated to the extent of the Group’s interest
in the associates and joint ventures.

Profit from associates and joint ventures is presented in the consolidated statement of comprehensive income as a
proportion of the Group's interest after deducting income tax and non-controlling interests in associates and joint
ventures.

The reporting period of associates and joint ventures is the same as that of the Group, and financial statements are
adjusted if necessary to apply the same accounting policies as the Group.

After applying the equity method, the Group determines whether it is necessary to recognize additional impairment
losses for investments in associates and joint ventures. At the end of each reporting period, the Group determines
whether there is objective evidence that investments in associates and joint ventures are impaired. Equity method gains
and losses from associates and joint ventures are recognized in the consolidated statement of comprehensive income.

When the Group loses significant influence over an associate or joint control over a joint venture, the remaining interest
in the former associates or joint ventures, if any, are measured at fair value and significant influence are lost. and the
difference between the carrying amount of the investment in associates and joint ventures at the time of loss of joint
control, the fair value of the remaining interest and the proceeds from disposal are reflected in profit or loss.

2-5 Classification of Current or Non-current

The Group classifies assets and liabilities as current and non-current on the statement of financial position.
Assets are classified as current assets when:
-Expected to be realized within the normal operating cycle or intended to be sold or consumed within the normal
operating cycle.
-Primarily held for short-term trading.
-Expected to be realized within 12 months after the end of reporting period.
-Cash or cash equivalents, with a restriction period not exceeding 12 months after the end of reporting period for use
for exchange or debt repayment purposes.
All other assets are classified as non-current assets.

Liabilities are classified as current assets when:

-Expected to be settled within the normal operating cycle.
-Primarily held for short-term trading.
-Expected to be settled within 12 months after the reporting period.
-No unlimited right to defer settlement of a liability for more than 12 months after the end of reporting period.
All other liabilities are classified as non-current liabilities.

Deferred tax assets and liabilities are classified as non-current assets and liabilities.

16
Daesang Corporation and its Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

2. Basis of Preparation and Summary of Significant Accounting Policies, Continued

2-6 Foreign currencies

(1) Foreign currency transactions and balances

The Group’s financial statements are presented in Korean won, which is also the Group’s functional currency.
Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency spot rate of
exchange at the reporting date. Differences arising on settlement or translation of monetary items are recognized in
profit or loss.

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange
rates at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are
translated using the exchange rates at the date when the fair value is determined.

The transaction date for determining the exchange rate to be applied for the initial recognition of related assets, expenses
and income is the date on which the Group first recognizes the non-current assets or non-current liabilities by paying or
receiving advance consideration. If advance payment or advance receipt is made multiple times, the Group determines
the transaction date for each advance payment or advance receipt.

(2) Foreign operations

On consolidation, the assets and liabilities of foreign operations are translated into Korean won at the rate of exchange
prevailing at the reporting date and their income statements are translated at average exchange rates. The exchange
differences arising on translation for consolidation are recognized in other comprehensive income. On disposal of a
foreign operation, the component of other comprehensive income relating to that particular foreign operation is
recognized in profit or loss.

Any goodwill arising on the acquisition of a foreign operation and any fair value adjustments to the carrying amounts
of assets and liabilities arising on the acquisition are treated as assets and liabilities of the foreign operation and
translated at the spot rate of exchange at the reporting date.

2-7 Cash and cash equivalents

Cash and cash equivalents in the statement of consolidated financial position comprise cash at banks and on hand and
short-term deposits with a maturity of three months or less. For the consolidated statement of cash flows, cash and cash
equivalents consist of cash and short-term deposits, as defined above.

2-8 Dividend

Dividend is recognized as a liability when approved by the Control Company’s shareholders and the Control Company
no longer has discretion. Distributions to shareholders require approval by the shareholders’ meeting.
The corresponding amount is reflected directly in equity.

2-9 Financial instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity
instrument of another entity.

(1) Financial assets

1) Initial recognition and measurement

Financial assets are classified, at initial recognition, as subsequently measured at amortized cost, fair value through
other comprehensive income (OCI), and fair value through profit or loss.

17
Daesang Corporation and its Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

2-9 Financial Instruments, Continued

The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow
characteristics and the Group’s business model for managing them. With the exception of trade receivables that do not
contain a significant financing component or for which the Group has applied the practical expedient, the Group initially
measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss,
transaction costs. Trade receivables that do not contain a significant financing component or for which the Group has
applied the practical expedient are measured at the transaction price determined under KIFRS 1115.

In order for a financial asset to be classified and measured at amortized cost or fair value through OCI, it needs to give
rise to cash flows that are ‘solely payments of principal and interest (SPPI)’ on the principal amount outstanding. This
assessment is referred to as the SPPI test and is performed at an instrument level.

The Group’s business model for managing financial assets refers to how it manages its financial assets in order to
generate cash flows. The business model determines whether cash flows will result from collecting contractual cash
flows, selling the financial assets, or both.

Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or
convention in the marketplace (regular way trades) are recognized on the trade date, i.e., the date that the Group commits
to purchase or sell the asset.

2) Subsequent measurement

For purposes of subsequent measurement, financial assets are classified in four categories:

- Financial assets at amortized cost (debt instruments)

- Financial assets at fair value through OCI with recycling of cumulative gains and losses (debt instruments)
- Financial assets designated at fair value through OCI with no recycling of cumulative gains and losses upon (equity
instruments)
- Financial assets at fair value through profit or loss

Financial assets at amortized cost (debt instruments)

This category is the most relevant to the Group. The Group measures financial assets at amortized cost if both of the
following conditions are met:

- The financial asset is held within a business model with the objective to hold financial assets in order to collect
contractual cash flows
And
- The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding

Financial assets at amortized cost are subsequently measured using the effective interest (EIR) method and are subject
to impairment. Gains and losses are recognized in profit or loss when the asset is derecognized, modified, or impaired.

Financial assets at fair value through OCI (debt instruments)

The Group measures debt instruments at fair value through OCI if both of the following conditions are met:

- The financial asset is held within a business model with the objective of both holding to collect contractual cash flows
and selling
And
- The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding

18
Daesang Corporation and its Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

2-9 Financial Instruments, Continued

For debt instruments at fair value through OCI, interest income, foreign exchange revaluation and impairment losses or
reversals are recognized in the statement of profit or loss and computed in the same manner as for financial assets
measured at amortized cost. The remaining fair value changes are recognized in OCI. Upon derecognition, the
cumulative fair value change recognized in OCI is recycled to profit or loss.

The Group’s debt instruments at fair value through OCI include investments in quoted debt instruments included under
other non-current financial assets.

Financial assets designated at fair value through OCI (equity instruments)

Upon initial recognition, the Group can elect to classify irrevocably its equity investments as equity instruments
designated at fair value through OCI when they meet the definition of equity under KIFRS 1032 Financial Instruments:
Presentation and are not held for trading. The classification is determined on an instrument-by-instrument basis.

Gains and losses on these financial assets are never recycled to profit or loss. Dividends are recognized as other income
in the statement of profit or loss when the right of payment has been established, except when the Group benefits from
such proceeds as a recovery of part of the cost of the financial asset, in which case, such gains are recorded in OCI.
Equity instruments designated at fair value through OCI are not subject to impairment assessment.

The Group elected to classify irrevocably its non-listed equity investments under this category.

Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss include financial assets held for trading and financial assets designated
upon initial recognition at fair value through profit or loss. Financial assets are classified as held for trading if they are
acquired for the purpose of selling or repurchasing in the near term. Derivatives, including separated embedded
derivatives, are also classified as held for trading unless they are designated as effective hedging instruments. Financial
assets with cash flows that are not solely payments of principal and interest are classified and measured at fair value
through profit or loss, irrespective of the business model. Notwithstanding the criteria for debt instruments to be
classified at amortized cost or at fair value through OCI, as described above, debt instruments may be designated at fair
value through profit or loss on initial recognition if doing so eliminates, or significantly reduces, an accounting mismatch.

Financial assets at fair value through profit or loss are carried in the statement of financial position at fair value with net
changes in fair value recognized in the statement of profit or loss.

A derivative embedded in a hybrid contract, with a financial liability or non-financial host, is separated from the host
and accounted for as a separate derivative if: the economic characteristics and risks are not closely related to the host; a
separate instrument with the same terms as the embedded derivative would meet the definition of a derivative; and the
hybrid contract is not measured at fair value through profit or loss. Embedded derivatives are measured at fair value
with changes in fair value recognized in profit or loss. Reassessment only occurs if there is either a change in the terms
of the contract that significantly modifies the cash flows that would otherwise be required or a reclassification of a
financial asset out of the fair value through profit or loss category.

A derivative embedded within a hybrid contract containing a financial asset host is not accounted for separately. The
financial asset host together with the embedded derivative is required to be classified in its entirety as a financial asset
at fair value through profit or loss.

3) Derecognition

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily
derecognized (i.e., removed from the Group’s consolidated statement of financial position) when:

19
Daesang Corporation and its Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

2-9 Financial Instruments, Continued

- The rights to receive cash flows from the asset have expired, or
- The Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the
received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (a) the
Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has neither transferred nor
retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
When the Group has transferred its rights to receive cash flows from an asset or has entered into a pass-through
arrangement, it evaluates if, and to what extent, it has retained the risks and rewards of ownership. When it has neither
transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the
Group continues to recognize the transferred asset to the extent of its continuing involvement. In that case, the Group
also recognizes an associated liability. The transferred asset and the associated liability are measured on a basis that
reflects the rights and obligations that the Group has retained.

Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the
original carrying amount of the asset and the maximum amount of consideration that the Group could be required to
repay.

4) Impairment of financial assets

Further disclosures relating to impairment of financial assets are also provided in the following notes:
- Disclosures for significant assumptions
- Debt instruments at fair value through OCI
- Trade receivables, including contract assets

The Group recognizes an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value
through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the
contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective
interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit
enhancements that are integral to the contractual terms.

ECLs are recognized in two stages. For credit exposures for which there has not been a significant increase in credit
risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within
the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase in
credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the
exposure, irrespective of the timing of the default (a lifetime ECL).

For trade receivables and contract assets, the Group applies a simplified approach in calculating ECLs. Therefore, the
Group does not track changes in credit risk, but instead recognizes a loss allowance based on lifetime ECLs at each
reporting date. The Group has established a provision matrix that is based on its historical credit loss experience,
adjusted for forward-looking factors specific to the debtors and the economic environment.

(2) Financial liabilities

1) Initial recognition and measurement

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans
and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.

All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and payables, net
of directly attributable transaction costs.

The Group’s financial liabilities include trade payables, other payables, borrowings, including overdraft, and derivative
liabilities.

20
Daesang Corporation and its Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

2-9 Financial Instruments, Continued

2) Subsequent measurement

The measurement of financial liabilities depends on their classification, as described below:

Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities
designated upon initial recognition as of fair value through profit or loss.

Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term.
This category also includes derivative financial instruments entered into by the Group that are not designated as hedging
instruments in hedge relationships as defined by KIFRS 1109. Separated embedded derivatives are also classified as
held for trading unless they are designated as effective hedging instruments.

Gains or losses on liabilities held for trading are recognized in the statement of profit or loss.

Financial liabilities designated upon initial recognition at fair value through profit or loss are designated at the initial
date of recognition, and only if the criteria in KIFRS 1109 are satisfied. The Group has not designated any financial
liability as of fair value through profit or loss.

Loans and borrowings

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortized cost using the
EIR method. Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through
the EIR amortization process.

Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are
an integral part of the EIR. The EIR amortization is included as finance costs in the statement of profit or loss.

This category generally applies to interest-bearing loans and borrowings.

3) Derecognition

A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When
an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms
of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of
the original liability and the recognition of a new liability. The difference in the respective carrying amounts is
recognized in the statement of profit or loss.

(3) Offsetting

Financial assets and financial liabilities are offset, and the net amount is reported in the consolidated statement of
financial position if there is a currently enforceable legal right to offset the recognized amounts and there is an intention
to settle on a net basis, to realize the assets and settle the liabilities simultaneously.

2-10 Fair Value Measurement

The Group measures financial instruments, such as, derivatives, and non-financial assets such as investment properties,
at fair value at each balance sheet date. Fair value related disclosures for financial instruments and non-financial assets
that are measured at fair value or where fair values are disclosed, are summarized in the following notes:

- Quantitative disclosures of fair value measurement hierarchy (Note 5)

- Non-marketable securities (Note 5)
- Financial instruments (including those carried at amortized cost) (Note 5)

21
Daesang Corporation and its Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

2-10 Fair Value Measurement, Continued

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. The fair value measurement is based on the presumption that the
transaction to sell the asset or transfer the liability takes place either:

- In the principal market for the asset or liability, or

- In the absence of a principal market, in the most advantageous market for the asset or liability

The principal or the most advantageous market must be accessible to by the Group.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when
pricing the asset or liability, assuming that market participants act in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant's ability to generate economic
benefits by using the asset in its highest and best use or by selling it to another market participant that would use the
asset in its highest and best use.

The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available
to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within
the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value
measurement as a whole:

Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is
directly or indirectly observable
Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is
unobservable

For assets and liabilities that are recognized in the financial statements on a recurring basis, the Group determines
whether transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest
level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

For the purpose of fair value disclosures, the Group has determined classes of assets and liabilities on the basis of the
nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy.

2-11 Inventories

Inventories are valued at the lower of cost and net realizable value. Meanwhile, initial cost of inventories includes
purchase cost, transfer cost and other costs incurred in bringing each product to its present location and conditions. Net
realizable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses.

The cost of inventories is based on the method below.

Costing method
Finished goods/Commodity goods Gross average method
Raw materials/Supplies/Goods in process Moving average method or gross average method
Goods in transit/finished mall Individual method

22
Daesang Corporation and its Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

2-12 Property, Plant and Equipment

Construction in progress is stated at cost, net of accumulated impairment losses, and property, plant and equipment is
stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. Such cost includes the cost
of replacing part of the property, plant and equipment and borrowing costs for long-term construction projects if the
recognition criteria are met. When significant parts of property, plant and equipment are required to be replaced at
intervals, the Group recognizes such parts as individual assets with specific useful lives and depreciates them
accordingly. Likewise, when a major inspection is performed, its cost is recognized in the carrying amount of the plant
and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are
recognized in profit or loss as incurred. The present value of the expected cost for the decommissioning of an asset after
its use is included in the cost of the respective asset if the recognition criteria for a provision are met. Refer to significant
accounting judgments, estimates and assumptions and provisions for further information about the recorded
decommissioning provision.

Property, plant and equipment transferred from customers are initially measured at fair value at the date on which control
is obtained.

The Group depreciates on a straight-line method over the following estimated useful lives:

Estimated useful lives

Buildings 15 ~ 60 years
Structures 4 ~ 50 years
Machinery 2 ~ 15 years
Vehicles 4 ~ 10 years
Others 2 ~ 8 years

An item of property, plant and equipment and any significant part initially recognized is derecognized upon disposal or
when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of
the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included
in the income statement when the asset is derecognized.

The residual values, useful lives, and methods of depreciation of property, plant and equipment are reviewed at each
financial year end and adjusted prospectively, if appropriate. In particular, the Group considers the impact of health,
safety and environmental legislation when reviewing residual value and useful life estimates.

2-13 Borrowing Costs

General and specific borrowing costs that are directly attributable to the acquisition, construction or production of a
qualifying asset are capitalized during the period of time that is required to complete and prepare the asset for its intended
use. Other borrowing costs are expensed in the period in which they are incurred.

2-14 Government Grants

Government grants are recognized where there is reasonable assurance that the grant will be received, and all attached
conditions will be complied with. When the grant relates to an expense item, it is recognized as income on a systematic
basis over the periods that the related costs, for which it is intended to compensate, are expensed. When the grant relates
to an asset, it is recognized as income in equal amounts over the expected useful life of the related asset.

When the Group receives grants of non-monetary assets, the asset and the grant are recorded at nominal amounts and
released to profit or loss over the expected useful life in a pattern of consumption of the benefit of the underlying asset
by equal annual instalments. When loans or similar assistance are provided by governments or related institutions, with
an interest rate below the current applicable market rate, the effect of this favorable interest is regarded as a government
grant.

23
Daesang Corporation and its Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

2-15 Investment Property

Property held to earn rentals or for capital appreciation or both is classified as investment property. Investment property
is measured initially at its cost. Transaction costs are included in the initial measurement. Subsequently, investment
property is carried at depreciated cost less any accumulated impairment losses. Investment property, other than land, is
depreciate on a straight-line method basis over its estimated useful life (32 to 60 years).

An item of investment property and any significant part initially recognized is derecognized upon disposal or when no
future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset
(calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the
income statement when the asset is derecognized.

The consideration to be included in profit or loss arising from the disposal of an investment property is calculated in
accordance with the requirements of K-IFRS 1115 on the calculation of the transaction price.

2-16 Intangible Assets

Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired
in a business combination is their fair value at the date of acquisition. Following initial recognition, intangible assets
are carried at cost less any accumulated amortization and accumulated impairment losses. Internally generated
intangibles, excluding capitalized development costs, are not capitalized and the related expenditure is reflected in profit
or loss in the period in which the expenditure is incurred.

The useful lives of intangible assets are assessed as either finite or indefinite. Intangible assets with finite lives are
amortized over the useful economic life and assessed for impairment whenever there is an indication that the intangible
asset may be impaired. The amortization period and the amortization method for an intangible asset with a finite useful
life are reviewed at least at the end of each reporting period. Changes in the expected useful life or the expected pattern
of consumption of future economic benefits embodied in the asset are considered to modify the amortization period or
method, as appropriate, and are treated as changes in accounting estimates. The amortization expense on intangible
assets with finite lives is recognized in the statement of comprehensive income as the expense category that is consistent
with the function of the intangible assets.

Intangible assets with indefinite useful lives are not amortized, but are tested for impairment annually, either individually
or at the cash-generating unit level. The assessment of indefinite life is reviewed annually to determine whether the
indefinite life continues to be supportable. If not, the change in useful life from indefinite to finite is made on a
prospective basis.

Gains or losses arising from de-recognition of an intangible asset are measured as the difference between the net disposal
proceeds and the carrying amount of the asset and are recognized in the statement of comprehensive income when the
asset is derecognized.

The Group assesses where climate-related issues could have a material impact, such as the introduction of legislation to
regulate estimated amounts of emissions that could increase manufacturing costs. These issues related to climate change
are included as key assumptions if they have a material impact on the measurement of the recoverable amount. These
assumptions are included in the forecast of cash flows when valuing silver in use.

(1) Research and development expenses

Research and development expenses are recognized in the statement of comprehensive income as incurred. However,
developments costs related to individual projects are recognized as intangible assets only when ⅰ) the Group can
demonstrate the technical feasibility of completing the asset for use or sale, ⅱ) the Group has the intention and ability
to complete the intangible asset for use or sale, ⅲ) sufficient resources are available to do so, ⅳ) the Group can
demonstrate how the intangible asset will generate future economic benefits, and ⅴ) the expenditure on the intangible
asset incurred in the development phase can be measured reliably.

24
Daesang Corporation and its Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

2-16 Intangible Assets, Continued

Development costs recognized as assets are stated at cost, less accumulated amortization and accumulated impairment
losses, using the cost model, and are amortized over the estimated period of economic benefits from when the
development is completed and available for use. The Group tests development costs recognized as assets for impairment
annually during the development period.

(2) Membership rights

Membership rights are regarded as intangible assets with an indefinite useful life and not amortized because there is no
foreseeable limit to the period over which the assets are expected to be utilized.

(3) Other intangible assets

Licenses, trademark, and software for internal use are initially recognized at their historical cost and amortized on a
straight-line method over their estimated useful lives of 3~10 years. Easement rights are regarded as intangible assets
with an indefinite useful life and not amortized because there is no foreseeable limit to the period over which the assets
are expected to be utilized. If any indication exists, the Group estimates the asset’s recoverable amount. The carrying
amount of other intangible assets is evaluated and, if it exceeds its recoverable amount, the carrying amount of the other
intangible assets is reduced to its recoverable amount.

2-17 Impairment of Non-financial Assets

The Group assesses at each reporting date, whether there is an indication that an asset may be impaired. If any indication
exists, or when annual impairment testing for an asset is required, the Group estimates the asset’s recoverable amount.
An asset’s recoverable amount is the higher of an assets or cash-generating unit’s (CGU) fair value less costs of disposal
and its value in use. The recoverable amount is determined for an individual asset, unless the asset does not generate
cash inflows that are largely independent of those from other assets or groups of assets. When the carrying amount of
an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable
amount.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount
rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining
fair value less costs of disposal, recent market transactions are considered. If no such transactions can be identified, an
appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for
publicly traded companies or other available fair value indicators.

The Group bases its impairment calculation on detailed budgets and forecast calculations, which are prepared separately
for each of the Group’s CGUs to which the individual assets are allocated. These budgets and forecast calculations
generally cover a period of five years. For longer periods, a long-term growth rate is calculated and applied to project
future cash flows after the fifth year.

Impairment losses of continuing operations are recognized in the statement of comprehensive income in expense
categories consistent with the function of the impaired asset, except for properties previously revalued with the
revaluation taken to OCI. For such properties, the impairment is recognized in OCI up to the amount of any previous
revaluation.

For assets excluding goodwill, an assessment is made at each reporting date to determine whether there is an indication
that previously recognized impairment losses no longer exist or have decreased. If such indication exists, the Group
estimates the assets or CGU’s recoverable amount. A previously recognized impairment loss is reversed only if there
has been a change in the assumptions used to determine the asset’s recoverable amount since the last impairment loss
was recognized. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount,
nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been
recognized for the asset in prior years. Such reversal is recognized in the statement of comprehensive income unless the
asset is carried at a revalued amount, in which case, the reversal is treated as a revaluation increase.

25
Daesang Corporation and its Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

2-17 Impairment of Non-financial Assets, Continued

Intangible assets with indefinite useful lives are tested for impairment annually on an individual asset or the CGU level.

The Group continuously monitor the latest government legislation on climate-related issues. As of now, no legislation
has been passed that would affect the Group. The Group will adjust our sensitivity to changes in key assumptions used
in our value in use if such changes are necessary.

2-18 Financial Guarantee Contracts

Financial guarantee contracts are contracts that require the issuer to make specified payments to reimburse the holder
for a loss it incurs because a specified debtor fails to make payments when due, in accordance with the original or
modified terms of a debt instrument. Financial guarantee contracts provided by the Group are initially measured at fair
value on the date the guarantee was given.
Subsequent to initial recognition, the Group’s liabilities under such guarantees are measured at the higher of the
following amounts below and recognized as ‘other financial liabilities’:
- the amount determined in accordance with Korean IFRS 1037 Provisions, Contingent liabilities, and Contingent assets
- the amount initially recognized less the cumulative amount of income recognized in accordance with Korean IFRS
1115 Revenue from Contracts with Customers

2-19 Employee Benefits

(1) Short-term employee benefits

Short-term employee benefits are employee benefits that are due to be settled within 12 months after the end of the
period in which the employees render the related service. When an employee has rendered service to the Group during
an accounting period, the Group recognizes the undiscounted amount of short-term employee benefits expected to be
paid in exchange for that service as profit or loss.

(2) Pension benefits

The cost of providing benefits under the defined benefit plan is determined using the projected unit credit method. Re-
measurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding net interest and the
return on plan assets, are recognized immediately in the statement of financial position with a corresponding debit or
credit to retained earnings through OCI in the period in which they occur. Re-measurements are not reclassified to profit
or loss in subsequent periods.

Past service costs are recognized in profit or loss on the earlier of:

- The date of the plan amendment or curtailment, and

- The date that the Group recognizes restructuring-related costs

Net interest is calculated by applying the discount rate to the net defined benefit liability or asset. The Group recognizes
the current service cost and the net defined benefit obligation under ‘cost of sales’ and ‘selling and administrative
expenses’, in the statement of comprehensive income.

(3) Other long-term employee benefits

The Group provides other long-term employee benefits to their employee. The entitlement to these benefits is usually
conditional on the employee working more than ten years. The expected costs of these benefits are accrued over the
period of employment using the same accounting methodology as used for defined benefit pension plans. The Group
recognizes past service cost, net interest on other long-term employee benefits and re-measurements as profit or loss for
the year. These benefits are calculated annually by independent qualified actuaries.
The Group maintains a separate in-house employee welfare fund for the purpose of providing long-term employee
benefits.

26
Daesang Corporation and its Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

2-20 Provisions and Contingent Liabilities

Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of a past event, it
is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a
reliable estimate can be made of the amount of the obligation. When the Group expects some or all a provision to be
reimbursed, for example, under an insurance contract, the reimbursement is recognized as a separate asset, but only
when the reimbursement is virtually certain. The expense relating to a provision is presented in the statement of
comprehensive income net of any reimbursement.

Where the effect of the time value of money is material, provisions are determined at the present value of the expected
future cash flows. Provisions are measured at present value of the expenditures expected to be required to settle the
obligation using a pre-tax rate that reflects the current market assessments of the time value of money and the risk
specific to the obligation. The risk reflected in this rate do not reflect the risk considered in estimating future cash flow.

Provisions are reviewed at the end of each reporting period and adjusted to reflect the current best estimates. If it is no
longer probable that an outflow of resources embodying economic benefits will be required to settle the obligation, the
provision is reversed. Where provisions are measured at present value, the carrying amount is increased over the time
and the increase is recognized in borrowing costs.

The Group discloses a contingent liability if there is a possible obligation from past events in which the existence may
only be identified through the occurrence of uncertain future events; or there is a present obligation that the possibility
on the outflow of economic resources is uncertain; or the amount of economic resources required to settle the present
obligation cannot be reasonably estimated.

- Provision for restoration

Where the Group, as a tenant, is required to restore its leased assets to their original state at the end of the lease-term,
the Group recognizes the present value of the estimated cost of restoration as a provision for restoration. Provisions are
measured at present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that
reflects the current market assessments of the time value of money and the risk specific to the obligation.
Provisions are reviewed at the end of each reporting period and adjusted to reflect the current best estimates.

- Emission Rights
The Group received emission rights free of charge from the government under a domestic Greenhouse Gas Emission
trading scheme. The Group must submit an equal quantity of emission rights in response to actual emissions. The
emissions allocated free of charge are accounted for using the net debt approach. Accordingly, when actual emissions
exceed the amount of emission rights received and held, a provision is recorded.
The rights purchased additionally from third parties are measured at acquisition cost.

2-21 Revenue Recognition

The Group recognize revenue when the inflow of economic benefits is highly probable and can be reliably measured,
regardless of the timing of receipt.
The Group believes that the Group is acting as a principal for all sales contracts as the Group is primarily responsible
for all revenue contracts, have pricing rights, and is exposed to inventory and credit risks.
In addition, the Group recognizes revenue only when the following recognition criteria are met.

(1) Sale of products

Revenue from sale of products is recognized at the point in time when control of the asset is transferred to the customer,
generally on delivery of the products.

(2) Interest income

Interest earned on financial assets measured at amortized cost and on financial assets at fair value through profit or loss
is recognized using the effective interest method.

2-21 Revenue Recognition, Continued

27
Daesang Corporation and its Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

The effective interest rate is the rate at which the present value of expected future cash outflows and inflows over the
expected life of the financial asset, or a shorter period if appropriate, matches the net carrying amount of the financial
asset or financial liability. Interest income is recognized on consolidated statement of comprehensive income.

(3) Dividend income

Dividend income is recognized in profit or loss on the date on which the Group’s right to receive payment is established.

(4) Other revenue

Other revenue is recognized when the process of earning revenue is complete, the amount of revenue can be reliably
measured, and it is highly probable that economic benefits will flow to the Group.

2-22 Income Taxes

(1) Current income tax

Current income tax assets and liabilities for the current period are measured at the amount expected to be recovered
from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted
or substantively enacted, at the reporting date in the countries where the Group operates and generates taxable income.

Current income tax relating to items recognized directly in equity is recognized in equity and not in the consolidated
statement of comprehensive income. Management periodically evaluates positions taken in the tax returns with respect
to situations in which applicable tax regulations are subject to interpretation and establishes provisions where
appropriate.

(2) Deferred tax

Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and
liabilities and their carrying amounts for financial reporting purposes at the reporting date.

Deferred tax liabilities are recognized for all taxable temporary differences, except:

- When the deferred tax liability arises from the initial recognition of goodwill; or an asset or liability in a transaction
that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable
profit or loss
- In respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint
ventures, when the timing of the reversal of the temporary differences can be controlled and it is probable that the
temporary differences will not reverse in the foreseeable future

Deferred tax assets are recognized for all deductible temporary differences, the carry forward of unused tax credits and
any unused tax losses. Deferred tax assets are recognized to the extent that it is probable that taxable profit will be
available against which the deductible temporary differences and the carry forward of unused tax credits and unused tax
losses can be utilized, except:

- When the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an
asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss
- In respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in
joint ventures, deferred tax assets are recognized only to the extent that it is probable that the temporary differences will
reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be
utilized

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no
longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized.

28
Daesang Corporation and its Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

2-22 Income Taxes, Continued

Unrecognized deferred tax assets are re-assessed at each reporting date and are recognized to the extent that it has
become probable that future taxable profits will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is
realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at
the reporting date.

Deferred tax relating to items recognized outside profit or loss is recognized outside profit or loss. Deferred tax items
are recognized in correlation to the underlying transaction either in OCI or directly in equity.

The Group offsets deferred tax assets and deferred tax liabilities if and only if it has a legally enforceable right to set off
current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes
levied by the same taxation authority on either the same taxable entity or different taxable entities which intend either
to settle current tax liabilities and assets on a net basis, or to 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.

2-23 Revenue from Contracts with Customers

The Group is in the business of food manufacturing and ingredient. Revenue from contracts with customers is
recognized when control of the goods or services are transferred to the customer at an amount that reflects the
consideration to which the Group expects to be entitled in exchange for those goods or services. The Group conclude
that the Group are the principal, except for agency services, because the Group control each good or service as defined
in the contract with the customer before providing it to the customer.

(1) Variable consideration

If the consideration in a contract includes a variable amount, the Group estimates the amount of consideration to which
it will be entitled in exchange for transferring the goods to the customer. The variable consideration is estimated at
contract inception and constrained until it is highly probable that a significant revenue reversal in the amount of
cumulative revenue recognized will not occur when the associated uncertainty with the variable consideration is
subsequently resolved.

- Right of return

Some contracts give customers the right to return goods within a certain period. As a method of estimating the value of
goods that will not be returned, The Group uses an expected value that is expected to be a better estimate of the
consideration the Group will be entitled to receive. A gross contract liability (refund liability) for the expected returns
to customers is recognized as adjustment to revenue.

(2) Assets and liabilities from a right of return

- Right to recover
The Group has a right of recover the product from the customers. The right of recovery is measured at the existing
carrying amount of the inventory, less the estimated cost to recover the product and any potential reduction in the value
of the returned product. The Group updates the measurement of the asset to reflect changes in the expected volume of
returns and the anticipation of further diminution in value for products that will be returned.

- Refund liability
A refund liability is an obligation to return some, or all the consideration received or to be received from a customer.
The refund liability is measured as the amount you expect to eventually must refund to customers. The Group update
estimate of the refund liability and the resulting change in transaction price at the end of each reporting period.

29
Daesang Corporation and its Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

2-23 Revenue from Contracts with Customers, Continued

(3) Significant financing component

The Group uses the practical expedient in the KIFRS 1115, the Group do not reflect the impact of a significant financing
component in the promised consideration if, at the inception of the contract, the Group expect the period between the
transfer of the promised goods or services to the customer and the time the customer pays for them to be less than one
year.

2-24 Leases

The Group assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the
right to control the use of an identified asset for a period of time in exchange for consideration.

- The Group as a lease

The Group applies a single recognition and measurement approach for all leases, except for short-term leases and leases
of low-value assets. The Group recognizes lease liabilities representing obligations to make lease payments and right-
of-use assets representing the right to use the underlying assets.

(1) Right-of-use assets

The Group recognizes right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is
available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses,
and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease
liabilities recognized, initial direct costs incurred, and lease payments made at or before the commencement date less
any lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease
term and the estimated useful lives of the assets, as follows:

- Land 1 ~ 50 years
- Buildings and structures 1 ~ 50 years
- Vehicles and others 1 ~ 15 years

If ownership of the leased asset transfers to the Group at the end of the lease term or the cost reflects the exercise of a
purchase option, depreciation is calculated using the estimated useful life of the asset.

The right-of-use assets are also subject to impairment. Refer to the accounting policies in section Impairment of non-
financial assets.

(2) Lease liabilities

At the commencement date of the lease, the Group recognizes lease liabilities measured at the present value of lease
payments to be made over the lease term. The lease payments include fixed payments (including in-substance fixed
payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts
expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase
option reasonably certain to be exercised by the Group and payments of penalties for terminating the lease, if the lease
term reflects the Group exercising the option to terminate. Variable lease payments that do not depend on an index or a
rate are recognized as expenses (unless they are incurred to produce inventories) in the period in which the event or
condition that triggers the payment occurs.

In calculating the present value of lease payments, the Group uses its incremental borrowing rate at the lease
commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement
date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments
made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease
term, a change in the lease payments (e.g., changes to future payments resulting from a change in an index or rate used
to determine such lease payments) or a change in the assessment of an option to purchase the underlying asset.

The Group’s lease liabilities are included in other financial liabilities.

30
Daesang Corporation and its Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

2-24 Leases, Continued

(3) Short-term leases and leases of low-value assets

The Group applies the short-term lease recognition exemption to its short-term leases of buildings, vehicles and
equipment (i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain
a purchase option). It also applies the lease of low-value assets recognition exemption to leases of office equipment that
are considered to be low value. Lease payments on short-term leases and leases of low-value assets are recognized as
expense on a straight-line basis over the lease term.

(4) As a lessor

The Group classifies leases that do not transfer substantially all of the risks and rewards of ownership of the underlying
asset as operating leases. Lease income from operating leases is recognized in income on a straight-line basis over the
lease term. Initial direct cost incurred by the lessor in negotiating and arranging an operating lease are added to the
carrying amount of the leased asset and recognized as an expense over the lease term on the same basis as the lease
income. Contingent rent is recognized as revenue when the rent is received.

2-25 Assets Held-for-Sale

Non-current assets (or disposal groups) are classified as assets held-for-sale when their carrying amount is to be
recovered principally through a sale transaction and the sale is considered highly probable. The assets are measured at
the lower of their carrying amount and the fair value less costs to sell. In order to be classified as held for sale, the assets
or disposal groups must be available for immediate sale in their present condition and their sale must be highly probable.
The conditions required to complete the sale must show that it is unlikely that the sale will be materially modified or
withdrawn, and the sale is expected to be completed within one year of classification as held for sale.
Property, plant and equipment and intangible assets classified as held for sale are not depreciated.

2-26 New and Amended Standards and Interpretations

The Group has applied the following standards for the first time for the annual reporting period commencing January 1,
2023. And earlier application is permitted but the Group has not early adopted the new or amended standards in
preparing these consolidated financial statements.

(1) Amendments to Korean IFRS 1001, Presentation of Financial Statement – Disclosure of Accounting Policies

The amendments provide guidance to help the Group apply materiality judgements to accounting policy disclosures.
The amendments aim to help the Group provide accounting policy disclosures that are more useful by replacing the
requirement for the Group to disclose their ‘significant’ accounting policies with a requirement to disclose their ‘material’
accounting policies and adding guidance on how the Group apply the concept of materiality in making decisions about
accounting policy disclosures. The amendments have impact on disclosures of accounting policy but no impact on
measurement, recognition of the consolidated financial statements.

(2) Amendments to Korean IFRS 1001, Presentation of the Financial Statements – Disclosure of financial liabilities
with condition to adjust exercise price

The amendments require disclosure of valuation gains or losses (limited to those recognized in the profit or loss) of the
conversion options or warrants (or financial liabilities including them), if all or part or the financial instrument with
exercise price that is adjusted depending on the issuer’s share price change is classified as financial liability as defined
in paragraph 11 (2) of K-IFRS 1032. The amendment does not have a significant impact on the consolidated financial
statements.

31
Daesang Corporation and its Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

2-26 New and Amended Standards and Interpretations, Continued

(3) Amendments to Korean IFRS 1008, Accounting Policies, Changes in Accounting Estimates and Errors – Definition
of Accounting Estimates

The amendments clarify how accounting estimates are defined and distinguished from changes in accounting policies
and specify measurement techniques and inputs to develop an accounting estimate. The amendment does not have a
significant impact on the consolidated financial statements.

(4) Amendments to Korean IFRS 1012, Income Tax – Deferred Tax related to Assets and Liabilities arising from a
Single Transaction

The amendments narrow the scope of the initial recognition exception under Korean IFRS 1012, so that it no longer
applies to transactions that give rise to equal taxable and deductible temporary differences. The amendment does not
have a significant impact on the consolidated financial statements.

(5) Amendments to Korean IFRS 1012, Income Tax – International Tax Reform-Pillar Two Model Rules

The amendments clarify that Korean IFRS 1012, Income Taxes, applies to income taxes arising from tax law enacted
or substantively enacted to implement the Pillar Two Model Rules issued by the Organization for Economic Co-
operation and Development (OECD). The content of the amendment is as follows:

A mandatory temporary exception to the accounting for deferred taxes arising from the jurisdictional implementation
of the Pillar Two model rules;

Disclosure requirements for affected entities to help users of the financial statements better understand an entity’s
exposure to Pillar Two income taxes arising from that legislation, particularly before its effective date.

The mandatory temporary exception – the use of which is required to be disclosed – applies immediately. The remaining
disclosure requirements apply for annual reporting periods beginning on or after 1 January 2023, but not for any interim
periods ending on or before 31 December 2023.
The amendment does not have a significant impact on the consolidated financial statements.

2-27 Significant Accounting Judgements, Estimates and Assumptions

The preparation of the Group’s consolidated financial statements requires management to make judgments, estimates
and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying
disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result
in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

Other disclosures about risks and uncertainties to which the Group are exposed include capital management, financial
risk management objectives and policies, and sensitivity analysis (Note 3).

(1) Judgments

In the process of applying the Group’s accounting policies, management has made the following judgments, which have
the most significant effect on the amounts recognized in the consolidated financial statements:

1) Determining the lease term of contracts with renewal and termination options – Group as lessee

The Group determines the lease term as the non-cancellable term of the lease, together with any periods covered by an
option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate
the lease, if it is reasonably certain not to be exercised.

32
Daesang Corporation and its Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

2-27 Significant Accounting Judgements, Estimates and Assumptions, Continued

The Group has several lease contracts that include extension and termination options. The Group applies judgement in
evaluating whether it is reasonably certain whether or not to exercise the option to renew or terminate the lease. That is,
it considers all relevant factors that create an economic incentive for it to exercise either the renewal or termination.
After the commencement date, the Group reassesses the lease term if there is a significant event or change in
circumstances that is within its control and affects its ability to exercise or not to exercise the option to renew or to
terminate (e.g., construction of significant leasehold improvements or significant customization to the leased asset).

The Group includes extension periods as part of the lease term for leases of equipment and machinery with short
noncancelable terms (e.g., three to five years). If replacement assets are not readily available, there will be a significant
negative impact on production, so the Group generally exercises the option to extend the lease. The Group does not
include extensions to leases of equipment and machinery with long noncancelable terms (e.g., 10 to 15 years) as part of
the lease term because it is not certain that the Group will exercise our option to extend. The Group generally leases
fleet vehicles for five years or less and do not exercise extension options, so the extension option for fleet vehicle leases
is not included as part of the lease term. Furthermore, the term to which the termination option applies is the period
during which it is exercised.

2) Classification of real estimate leases – As a lessor

The Group entered into commercial real estate lease agreements for its investment property portfolio. The Group
assesses the risks and risks of owning commercial properties based on an assessment of the terms of the agreement,
such as the lease term that does not represent a significant portion of the commercial property's economic useful life
and the present value of lease payments that does not represent a majority of the commercial property's fair value. It
retains most of its compensation and has decided to account for these contracts as operating leases.

(2) Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that
have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next
financial year, are described below. The Group based its assumptions and estimates on parameters available when the
financial statements were prepared. Existing circumstances and assumptions about future developments, however, may
change due to market changes or circumstances arising beyond the control of the Group. Such changes are reflected in
the assumptions when they occur.

1) Income taxes

The Group recognizes assets and liabilities for anticipated tax audit issues based on the best estimates of whether
additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially
recorded. Such differences will impact the current and deferred income tax assets and liabilities in the period in which
such determination is made.

2) Fair Value of Financial Instruments

The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques.
The Group uses its judgment to select a variety of methods and makes assumptions that are mainly based on market
conditions existing at the end of each reporting period.

3) Provisions

The Group recognizes provision for refund liability based on their historical data.

33
Daesang Corporation and its Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

2-27 Significant Accounting Judgements, Estimates and Assumptions, Continued

4) Net Defined Benefit Obligations

The cost of the defined benefit pension plan and the present value of the pension obligation are determined using
actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual
developments in the future. These include the determination of the discount rate, future salary increases, mortality rates
and future pension increases. Due to the complexities involved in the valuation and its long-term nature, a defined
benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting
date.

5) Impairment of assets

The Group is reviewing impairment in accordance with the accounting policy in Note 2. The recoverable amount is
determined based on the fair value and value in use calculations of the assets. These recoverable amounts are based on
estimates.

6) Impairment of goodwill

The recoverable amounts of cash-generating units have been determined based on fair value less costs of disposal or
value in use calculations. These calculations require estimates.

7) Revenue from contracts with customers

The Group applied the following judgements that significantly affect the determination of the amount and timing of
revenue from contracts with customers:

- Identification of performance obligations in contracts that combine the sale of goods with delivery services
The Group determined that sales of goods and transportation services are distinct under the contract. Accordingly, the
Group allocates transaction prices to the sale of goods and the transportation services on a relative stand-alone selling
price basis.

- Determining method to estimate variable consideration and assessing the constraint

Certain contracts for the sale of products include a right of return that give rise to variable consideration. In estimating
the variable consideration, the Group is required to use either the expected value method or the most likely amount
method based on which method better predicts the amount of consideration to which it will be entitled.

The Group has determined that expected value is an appropriate method for estimating variable consideration for the
sale of products with a right of return given to many similar types of customers. As a method of estimating variable
consideration for the sale of products under volume rebate terms, it was judged appropriate to use a combination of the
expected value and the most probable amount method.

Before including any amount of variable consideration in the transaction price, the Group considers whether the amount
of variable consideration is constrained. The Group determined that the estimates of variable consideration are not
constrained based on its historical experience, business forecast and the current economic conditions. In addition, the
uncertainty on the variable consideration will be resolved within a short time frame.

- Determining whether customer loyalty points provide important rights to customers

The Group operates a customer loyalty point program. The Group evaluated whether customer loyalty points provide
important rights to customers. In this case, it is accounted for as a separate performance obligation.

8) Loss allowance for expected credit losses on financial assets including trade receivables and contract assets

The Group uses a provision matrix to calculate ECLs for trade receivables and contract assets. The provision rates are
based on days past due for groupings of various customer segments that have similar loss patterns (i.e., by geography,
product type, customer type and rating, and coverage by letters of credit and other forms of credit insurance).

34
Daesang Corporation and its Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

2-27 Significant Accounting Judgements, Estimates and Assumptions, Continued

The provision matrix is initially based on the Group’s historical observed default rates. The Group will calibrate the
matrix to adjust the historical credit loss experience with forward-looking information. For instance, if forecast
economic conditions (i.e., gross domestic product) are expected to deteriorate over the next year which can lead to an
increased number of defaults in the manufacturing sector, the historical default rates are adjusted. At every reporting
date, the historical observed default rates are updated and changes in the forward-looking estimates are analyzed.

The assessment of the correlation between historical observed default rates, forecast economic conditions and ECLs is
a significant estimate. The amount of ECLs is sensitive to changes in circumstances and of forecast economic conditions.
The Group’s historical credit loss experience and forecast of economic conditions may also not be representative of
customer’s actual default in the future. The information about the ECLs on the Group’s trade receivables and contract
assets is disclosed in Note 7.

9) Estimation of variable consideration for returns

The Group estimate variable consideration in the transaction price of the sale of products with a right of return.

The Group have developed a statistical method for predicting returns. This method calculates the expected return rate
from historical return data for each product. This ratio is used to determine the expected amount of variable consideration.
Significant changes in experience, such as historical return patterns, will affect our estimate of expected return rates. As
of December 31, 2023, provision for returns for expected returns is 9,219 million Korean won (end of previous year:
8,301 million Korean won).

10) Leases- estimating the incremental borrowing rate

The Group cannot readily determine the interest rate implicit in the lease, therefore, it uses its incremental borrowing
rate (IBR) to measure lease liabilities. The IBR is the rate of interest that the Group would have to pay to borrow over
a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use
asset in a similar economic environment. The IBR therefore reflects what the Group ‘would have to pay’, which requires
estimation when no observable rates are available (such as for subsidiaries that do not enter into financing transactions)
or when they need to be adjusted to reflect the terms and conditions of the lease (for example, when leases are not in
the subsidiary’s functional currency). The Group estimates the IBR using observable inputs (such as market interest
rates) when available and is required to make certain entity-specific estimates (such as the subsidiary’s stand-alone
credit rating).

The Group should measure incremental borrowing rates using observable input variables (such as market interest rates)
where possible and prepare specific company-specific estimates (such as the individual credit ratings of subsidiaries).

2-28 New and Amended Standards not yet Adopted by the Group

The amended accounting standards issued that are not mandatory for the annual reporting periods commencing on
January 1, 2023, and has not been early adopted by the Group are as follows:

1) Amendments to Korean IFRS 1001, Presentation of Financial Statements – Classification of Liabilities as Current or
Non-current

The amendments to paragraphs 69 to 76 of Korean IFRS 1001 specify the requirements for classifying liabilities as
current or non-current.
The amendments clarify:

-What is meant by a right to defer settlement

-That a right to defer must exist at the end of the reporting period
-That classification is unaffected by the likelihood that an entity will exercise its deferral right
-That only if an embedded derivative in a convertible liability is itself an equity instrument would the terms of a liability
not impact its classification

35
Daesang Corporation and its Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

2-28 New and Amended Standards not yet Adopted by the Group, Continued

The amendments are effective for annual reporting periods beginning on or after January 1, 2024, with earlier application
permitted and are applied the requirements retrospectively. The Group is reviewing the impact of this amendments on
the consolidated financial statements.

2) Amendments to Korean IFRS 1007, Statement of Cash Flows and 1107, Financial Instruments: Presentation –
Supplier Finance Arrangements

The amendments add to the disclosure objectives in Korean IFRS 1007, Statement of Cash Flows, that information
about supplier financing arrangements should be disclosed to enable users of consolidated financial statements to assess
the impact of those arrangements on the Group’s liabilities and cash flows. The amendments also amend Korean IFRS
1107, Financial Instruments: Presentation, to add supplier financing arrangements as an example of a requirement to
disclose information about an entity’s exposure to concentrations of liquidity risk.
The amendments are effective for annual reporting periods beginning on or after January 1, 2024, and include specific
transitional provision for the first annual period in which they are applied. Early application is permitted. The Group
does not expect that these amendments have a significant impact on the consolidated financial statements.

3) Amendments to Korean IFRS 1116, Lease – Lease Liability in a Sales and Leaseback

The amendments add requirements to specify how a seller-lessee subsequently measures sale and leaseback transactions
that satisfy the requirements in IFRS 1115 Revenue from Contracts with Customers to be accounted for as a sale. The
amendments require the seller-lessee to calculate the ‘lease payments’ or ‘revised lease payments’ in a way that does
not result in the seller lessee recognizing any gain or loss for the rights of use that the seller-lessee continues to retain
after the lease commences.
The amendments are effective for annual reporting periods beginning on or after January 1, 2024, with earlier application
permitted and are applied the requirements retrospectively to sales and leaseback transactions that were entered into
after the date when the Group initially applied Korean IFRS 1116. The Group does not expect that these amendments
have a significant impact on the consolidated financial statements.

4) Amendments to Korean IFRS 1001, Presentation of Financial Statements – Disclosure of Crypto-Assets

The amendments add to the requirements to disclose the impact on accounting policy and statement of financial position
according to holding and issuing crypto assets. Disclosures are separately required when the Group owns or holds
crypto-assets or holds crypto-asset on behalf of customers. The amendments are effective for annual reporting periods
beginning on or after January 1, 2024, with earlier application permitted and are applied to the requirements
retrospectively. The Group does not expect that these amendments have a significant impact on the consolidated
financial statements.

5) The Group does not expect the following amendments have a significant impact on the consolidated financial
statements

- Lease Liability in a Sales and Leaseback (Korean IFRS 1116, Lease).

- Lack of Exchangeability (Korean IFRS 1021, Effects of Changes in Foreign Exchange Rate).

2-29 Approval of the consolidated financial statements

These consolidated financial statements were approved by the Board of Directors on March 7, 2024 and may be
modified and approved at the Annual General Shareholders’ Meetings.

36
Daesang Corporation and its Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

3. Purpose and Policy of Financial Risk Management

The Group is exposed to market risk, credit risk and liquidity risk due to various activities (market risk is further divided
into foreign exchange risk, interest rate risk and market value fluctuation risk for equity securities). To manage these
risk factors, the Group operates a risk management policy that closely monitors and responds to each risk factor.

The Group's financial assets subject to financial risk management consist of cash and cash equivalents, short-term
financial instruments, financial assets measured at fair value through profit or loss, financial assets measured at fair
value through other comprehensive income, trade receivables and other receivables. Financial liabilities consist of trade
payables, other payables, borrowings, and debentures.

3-1 Market risk

(1) Foreign exchange risk

The Group is committed to foreign exchange risk management with the goal of realizing management stability through
predictable management and soundness of financial structure by minimizing risk due to exchange rate fluctuations in
foreign currency-denominated assets and liabilities. Since the Group has more cash flows from foreign currency
expenditures from material imports and repayment of foreign currency borrowings (usance) than foreign currency
collections from exports, foreign exchange losses due to exchange rate rises are the main target of exchange risk.

As of December 31, 2023 and 2022, the carrying amounts of monetary assets and liabilities denominated in foreign
currencies other than the functional currency are as follows:

(In millions of Korean won) December 31, 2023 December 31, 2022

Classification Assets Liabilities Assets Liabilities

USD 198,502 341,121 245,065 381,625

EUR 26,147 970 36,178 2,427
JPY 10,697 117 10,976 687
Others 8,972 4,179 10,444 2,285
Total 244,318 346,387 302,663 387,024

Internally, the Group regularly measures foreign exchange risk for exchange rate fluctuations. As of December 31, 2023
and 2022, when the currency rate of the functional currency for each foreign currency changes by 5%, the impact of the
exchange rate change on profit before tax is as follows.

(In millions of Korean won) December 31, 2023 December 31, 2022

Classification Increase Decrease Increase Decrease

USD (7,131) 7,131 (6,828) 6,828

EUR 1,259 (1,259) 1,688 (1,688)
JPY 529 (529) 514 (514)
Others 240 (240) 408 (408)
Total (5,103) 5,103 (4,218) 4,218

The above sensitivity analysis has been conducted on monetary assets and liabilities denominated in foreign currencies
other than the functional currency as of December 31, 2023 and 2022

37
Daesang Corporation and its Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

3. Purpose and Policy of Financial Risk Management, Continued

(2) Interest rate risk

The Group is exposed to interest rate fluctuation risks, such as the risk of value fluctuations of financial statement items
(financial assets and liabilities) due to price fluctuations and the risk of fluctuations in interest income (expenses) from
investments and borrowings. The Group's interest rate fluctuation risk arises from issuance of interest-paying liabilities
such as bonds and investments in interest-receiving assets. However, the Group operates most of its surplus funds with
fixed-rate financial instruments, and the carrying amount of floating rate borrowings is KRW 349,383 million (End of
previous year: KRW 290,801 million), if all other variables are the same and the interest rate changes by 100 basis
points as of December 31, 2023 and 2022, the effect of interest expense on floating rate borrowings on profit before tax
is as follows.

(In millions of Korean won) December 31, 2023 December 31, 2022
Classification Increase Decrease Increase Decrease
Interest Expenses (3,494) 3,494 (2,908) 2,908

3-2 Credit risk

Credit risk arises during the normal course of transactions and investing activities where clients or other parties fail to
discharge an obligation. To manage these credit risks, The Group sets the client's and the counterparty's credit limits on
a periodic basis based on the client's and counterparty's financial conditions, default histories and other important factors.

Credit risk can arise from transactions with financial institutions, such as cash equivalents, deposits, and derivative
instruments. To minimize such risk, the Group transacts only with financial institutions which have high creditworthiness.

Excluding the payment guarantee details in Note 21, the Group estimates that its maximum exposure to credit risk is
the carrying amount of its financial assets, net of impairment losses.

3-3 Liquidity risk

The Group manages liquidity risk through periodic forecasting and adjustment of fund balance to maintain appropriate
liquidity.

The Group manages receivables by reducing inventory turnover days and preventing receivables from insolvency to
ensure smooth fund operation and has bank overdraft agreements with financial institutions. The Group has invested
KRW 760,345 million (End of previous year: KRW 585,804 million) in cash and cash equivalents and short-term
financial instruments and financial assets at fair value through profit or loss that can be withdrawn immediately. For
financial liabilities, liquidity classification is as follows according to the remaining maturity from the end of the
reporting period to the contract maturity date.

December 31, 2023

(In millions of Korean won)

Between Between Between Between
Less than Over 5
Classification 1 and 2 2 and 3 3 and 4 4 and 5 Total
1 year years
years years years years
Trade and other payables 368,023 - 46 18 25 6 368,118
Borrowings (including
534,266 310,144 237,465 91,700 56,950 115,850 1,346,375
debentures)
Financial guarantee
253,222 - - - - - 253,222
contracts (*1)
Other financial liabilities
30,310 - 91 - - 3 30,404
(*2)
Total 1,185,821 310,144 237,602 91,718 56,975 115,859 1,998,119

38
Daesang Corporation and its Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

3. Purpose and Policy of Financial Risk Management, Continued

December 31, 2022

(In millions of Korean won)

Less Between Between Between Between
Over 5
Classification than 1 1 and 2 2 and 3 3 and 4 4 and 5 Total
years
year years years years years
Trade and other payables 336,664 - 46 18 25 6 336,759
Borrowings (including
589,555 146,859 203,387 90,315 79,800 161,450 1,271,366
debentures)
Financial guarantee
18,688 - - - - - 18,688
contracts (*1)
Other financial liabilities
28,452 3 - 91 - - 28,546
(*2)
Total 973,359 146,862 203,433 90,424 79,825 161,456 1,655,359

(*1) The above financial guaranteed contracts are for others and are the maximum amount of guarantee that can be requested as of December 31,
2023 and 2022 (see note 21).
(*2) Among other financial liabilities, the lease liability was KRW 63,246 million (End of previous year: KRW 73,718 million), which was excluded
from the above amount (see note 32).

3-4 Capital risk management

The purpose of the Group's capital risk management is to maintain a sound capital structure. The Group uses the debt
ratio as a capital management indicator. This ratio is calculated by dividing Total liabilities by Total equity, and Total
liabilities and Total equity are calculated as disclosed amounts in the consolidated financial statements.

As of December 31, 2023 and 2022, The Group's debt ratio is as follows.

(In millions of Korean won, %)

Classification December 31, 2023 December 31, 2022
Total liabilities 1,990,623 1,867,570
Total equity 1,343,747 1,322,627
Debt ratio (%) 148.14 141.20

39
Daesang Corporation and its Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

4. Operating Segments Information

4-1 Classification of operating segments

The Group divides its business into food and material divisions in consideration of the characteristics of products and
manufacturing processes. The Group's main customers are food and beverage manufacturers and food and beverage
consumers.

4-2 Information by operating segments as of and for the years ended December 31, 2023 and 2022 are as follows:

December 31, 2023

(In millions of Korean won)
Classification Food Ingredients Adjustments Total
1. Revenues 3,499,493 1,312,679 (704,678) 4,107,494
2. Operating profit 133,881 (18,638) 8,474 123,717
3. Total assets 2,826,142 1,115,754 (607,526) 3,334,370
4. Total liabilities 1,500,059 678,259 (187,695) 1,990,623

December 31, 2022

(In millions of Korean won)

Classification Food Ingredients Adjustments Total
1. Revenues 3,270,017 1,525,088 (711,015) 4,084,090
2. Operating profit 77,963 51,948 10,088 139,999
3. Total assets 2,483,318 1,207,376 (500,498) 3,190,196
4. Total liabilities 1,279,055 742,994 (154,479) 1,867,570

4-3 Regional information

The regional segment information as of and for the years ended December 31, 2023 and 2022 are as follows:

(In millions of
2023
Korean won)
Adjust
Classification Korea Asia America Europe Oceania Africa Total
ments
Net revenue(*1) 2,844,959 863,485 219,913 152,378 23,164 3,595 - 4,107,494
Non-current
1,070,562 252,024 47,115 2,903 397 - 30,698 1,403,699
assets(*2)

(In millions of
2022
Korean won)
Adjust
Classification Korea Asia America Europe Oceania Africa Total
ments
Net revenue(*1) 2,685,852 986,200 185,498 199,136 21,122 6,282 - 4,084,090
Non-current
1,068,277 193,101 32,931 1,595 - - 10,726 1,306,630
assets(*2)

(*1) Revenues are attributed to the country based on the location of the customer.
(*2) Financial instruments, deferred tax assets, investments in associates and joint ventures, and others are excluded from non-current assets.

4-4 Major external customers

For the years ended December 31, 2023 and 2022, There are no major external customers that account for more than
10% of the Group's revenues.

40
Daesang Corporation and its Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

5. Financial Instruments by Category and Fair Value

For the years ended December 31, 2023 and 2022, there are no significant changes in the business environment and
economic environment that affected the fair value of financial assets and liabilities.

5-1 The carrying amount and fair value of financial instruments by category as of December 31, 2023 and 2022 are as
follows.

(1) Financial assets

December 31, 2023

(In millions of Korean won)
Financial
Financial Financial assets
assets
assets measured at fair
measured at Carrying
Financial assets measured at value through other Fair value
fair value amount
amortized comprehensive
through
cost income
profit or loss
Current portion
Cash and cash equivalents 742,445 - - 742,445 742,445
Shor-term financial instruments 17,900 - - 17,900 17,900
Trade receivables and other
403,715 - - 403,715 403,715
receivables
Other current financial assets 2,078 - - 2,078 2,078
Sub total 1,166,138 - - 1,166,138 1,166,138
Non-current portion
Long-term financial instruments 8,202 - - 8,202 8,202
Financial assets at fair value
- 26,138 - 26,138 26,138
through profit or loss
Financial assets at fair value
through other comprehensive - - 10,648 10,648 10,648
income
Other non-current financial assets 40,669 - - 40,669 40,669
Sub total 48,871 26,138 10,648 85,657 85,657
Total 1,215,009 26,138 10,648 1,251,795 1,251,795

December 31, 2022

(In millions of Korean won)
Financial
Financial Financial assets
assets
assets measured at fair
measured at Carrying
Financial assets measured at value through other Fair value
fair value amount
amortized comprehensive
through
cost income
profit or loss
Current portion
Cash and cash equivalents 558,983 - - 558,983 558,983
Shor-term financial instruments 26,821 - - 26,821 26,821
Trade receivables and other
374,461 - - 374,461 374,461
receivables
Other current financial assets 11,810 - - 11,810 11,810
Sub total 972,075 - - 972,075 972,075
Non-current portion
Long-term financial instruments 185 - - 185 185
Financial assets at fair value
- 24,571 - 24,571 24,571
through profit or loss
Financial assets at fair value
through other comprehensive - - 14,506 14,506 14,506
income
Other non-current financial assets 41,023 - - 41,023 41,023
Sub total 41,208 24,571 14,506 80,285 80,285
Total 1,013,283 24,571 14,506 1,052,360 1,052,360

41
Daesang Corporation and its Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

5. Financial Instruments by Category and Fair Value, Continued

(2) Financial liabilities

December 31, 2023

(In millions of Korean won)
Financial
liabilities Other financial Carrying
Financial liabilities Fair value
measured at liabilities amount
amortized cost
Current portion
Trade payables and other payables 368,023 - 368,023 368,023
Short-term borrowings 321,304 77 321,381 321,381
Current portion of long-term borrowings 29,722 - 29,722 29,722
Current portion of debentures 129,990 - 129,990 129,990
Other current financial liabilities 57,137 - 57,137 57,137
Sub total 906,176 77 906,253 906,253
Non-current portion
Trade payables and other payables 95 - 95 95
Borrowings (*1) 275,073 - 275,073 260,888
Debentures (*1) 588,866 - 588,866 583,164
Other non-current financial liabilities 36,508 - 36,508 36,508
Sub total 900,542 - 900,542 880,655
Total 1,806,718 77 1,806,795 1,786,908

December 31, 2022

(In millions of Korean won)
Financial
liabilities Other financial Carrying
Financial liabilities Fair value
measured at liabilities amount
amortized cost
Current portion
Trade payables and other payables 336,664 - 336,664 336,664
Short-term borrowings 460,923 8,974 469,897 469,897
Current portion of long-term borrowings 11,906 - 11,906 11,906
Current portion of debentures 79,994 - 79,994 79,994
Other current financial liabilities 52,887 35 52,922 52,922
Sub total 942,374 9,009 951,383 951,383
Non-current portion
Trade payables and other payables 95 - 95 95
Borrowings (*1) 179,229 - 179,229 160,900
Debentures (*1) 528,825 - 528,825 495,233
Other non-current financial liabilities 49,371 - 49,371 49,371
Sub total 757,520 - 757,520 705,599
Total 1,699,894 9,009 1,708,903 1,656,982

(*1) The fair value of debentures and borrowings is calculated by discounting the estimated future cash flows with a discount rate that considers
market interest rates and credit risk. As of December 31, 2023, the Group applies a discount rate of 0.72 ~ 6.99% to borrowings (End of previous
year: 0.72 ~ 6.41%), and a discount rate of 3.77% to debentures (End of previous year: 5.16%).

5-2 Fair value hierarchy classifications

Financial instruments measured at fair value are classified according to the fair value hierarchy, and the levels defined are as follows.

- Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1)
- Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly
(Level 2)
- Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (Level 3)

42
Daesang Corporation and its Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

5. Financial Instruments by Category and Fair Value, Continued

As of December 31, 2023 and 2022, the measured fair values according to the above classifications are as follows.

(In millions of Korean won)

Classification Level 1 Level 2 Level 3 Total
December 31, 2023
Financial assets
- Financial assets at fair value through
- - 26,138 26,138
profit or loss
- Financial assets at fair value through
- - 10,648 10,648
other comprehensive income
December 31, 2022
Financial assets
- Financial assets at fair value through
- - 24,571 24,571
profit or loss
- Financial assets at fair value through
- - 14,506 14,506
other comprehensive income

There is no significant transfer between level 1 and level 2 of the fair value hierarchy for the years ended December 31,
2023 and 2022

In calculating the fair value measurement, the Group considered the impact of potential climate-related issues, including
legislation that may affect the fair value measurement of assets and liabilities in the financial statements. Risks related
to climate-related issues are included as key assumptions where they have a material impact on the measurement of
recoverable amount. These assumptions are included in the cash flow estimates in the value in use assessment.

Currently, the impact of climate-related issues is not material to the Group's financial statements.

Changes in Level 3 financial instruments for the years ended December 31, 2023 and 2022 are as follows:

(In millions of Korean won) Level 3 financial instruments

Classification 2023 2022
Balance as of January 1 39,077 17,328
Acquisitions - 20,300
Disposals and recoveries (8) -
Amount recognized in profit or loss 1,567 839
Amount recognized in other comprehensive income or loss (3,850) 609
Balance as of December 31 36,786 39,077
The total gain or loss recognized in profit or loss for assets
1,567 839
held at the December 31

43
Daesang Corporation and its Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

5. Financial Instruments by Category and Fair Value, Continued

5-3 Valuation technique and the inputs

The following table presents the valuation technique and the inputs used for recurring fair value measurements
categorized within Level 3 as of December 31, 2023 and 2022.

December 31, 2023

(In millions of Korean won) Input Range(%)

Classification Fair value Level Valuation Method Level 3 inputs Minimum Maximum
Financial assets at fair value through profit or loss, other comprehensive income
Broadcasting and 3,230 3 DCF Long-term sales growth rate 5.14 6.92
telecommunications Cost of sales ratio 67.27 76.99
Discount rate 11.98 11.98
Finance 1,139 3 DCF Long-term sales growth rate 3.33 4.75
Cost of sales ratio 87.25 208.44
Discount rate 7.80 7.80
Investment 24,099 3 Option pricing model Long-term sales growth rate 2.95 5.32
Cost of sales ratio 6.46 6.67
Discount rate 12.91 12.91
DCF Discount rate 15.52 19.88
Research and development 7,682 3 Scenario approach Probability of IPO Success 13.02 13.02
Others 636 3 - - - -
Total 36,786

December 31, 2022

(In millions of Korean won) Input Range(%)

Classification Fair value Level Valuation Method Level 3 inputs Minimum Maximum
Financial assets at fair value through profit or loss, other comprehensive income
Broadcasting and 3,245 3 DCF Long-term sales growth rate 1.62 2.68
telecommunications Cost of sales ratio 66.81 74.80
Discount rate 14.27 14.27
Finance 4,883 3 DCF Long-term sales growth rate 2.83 4.03
Cost of sales ratio 23.68 24.33
Discount rate 8.57 8.57
Research and development 7,781 3 DCF Long-term sales growth rate 27.37 27.37
Cost of sales ratio 64.33 76.07
Discount rate 14.02 14.02
Investment 22,532 3 Binomial model Discount rate 10.72 17.70
Others 636 3 Net asset
- - -
value
Total 39,077

5-3-1 Valuation process of fair value measurement classified as level 3

For financial instruments classified as Level 3, the Group evaluates the amount calculated using a reasonable valuation
model and appropriate estimates based on the professional judgment of an independent external valuation firm as fair
value.

44
Daesang Corporation and its Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

5. Financial Instruments by Category and Fair Value, Continued

5-3-2 Sensitivity analysis for recurring fair value measurements categorized within Level 3

Sensitivity analysis of financial instruments is performed to measure favorable and unfavorable changes in the fair value
of financial instruments which are affected by the unobservable parameters, using a statistical technique. When the fair
value is affected by more than two input parameters, the amounts represent the most favorable or unfavorable.

The results of the sensitivity analysis for the effect on capital due to changes in input variables for each instrument
which are categorized within Level 3 and subject to sensitivity analysis are as follows.

(In millions of
December 31, 2023 December 31, 2022
Korean won)
Favorable Unfavorable Favorable Unfavorable
Classification
changes (*2) changes (*3) changes (*2) changes (*3)
Financial assets (*1) 402 (93) 3,319 (895)

(*1) For equity securities, changes in fair value are calculated by increasing or decreasing the correlation between the permanent growth rate and the
discount rate, which are significant unobservable inputs.
(*2) This refers to the fair value changes resulting from a 1.0% increase in permanent growth rate and a 1.0% decrease in discount rate.
(*3) This refers to the fair value changes resulting from a 1.0% decrease in permanent growth rate and a 1.0% increase in discount rate.

5-4 The details of the Group's income and loss resulting from financial instruments by category for the years ended
December 31, 2023 and 2022 are as follows

December 31, 2023

(In millions of Korean won)
Financial
Financial Financial assets Financial
assets
assets measured at fair liabilities
measured at
Classification measured at value through other measured at Total
fair value
amortized comprehensive amortized
through
cost income cost
profit or loss
Interest income 20,865 - - - 20,865
Dividend income - - 34 - 34
Foreign exchange gain 27,915 - - 4,541 32,456
Foreign currency translation gain 2,068 - - 3,544 5,612
Gain (loss) on valuation/disposal
- 1,567 - - 1,567
(FVPL)
Gain (loss) on valuation (FVOCI) - - (2,928) - (2,928)
Reversal (loss allowance) for
(538) - - - (538)
expected credit losses
Reversal (loss allowance) for other
(85) - - - (85)
expected credit losses
Interest expenses - - - (53,052) (53,052)
Foreign exchange loss (15,519) - - (14,072) (29,591)
Foreign currency translation loss (4,587) - - (1,378) (5,965)
Total 30,119 1,567 (2,894) (60,417) (31,625)

45
Daesang Corporation and its Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

5. Financial Instruments by Category and Fair Value, Continued

December 31, 2022

(In millions of Korean won)
Financial
Financial Financial assets Financial
assets
assets measured at fair liabilities
measured at
Classification measured at value through other measured at Total
fair value
amortized comprehensive amortized
through
cost income cost
profit or loss
Interest income 10,392 - - - 10,392
Dividend income - - 96 - 96
Foreign exchange gain 42,830 - - 2,420 45,250
Foreign currency translation gain 828 - - 17,092 17,920
Gain (loss) on valuation/disposal
- 839 - - 839
(FVPL)
Gain (loss) on valuation (FVOCI) - - 396 - 396
Reversal (loss allowance) for
(399) - - - (399)
expected credit losses
Reversal (loss allowance) for other
3,037 - - - 3,037
expected credit losses
Interest expenses - - - (30,622) (30,622)
Foreign exchange loss (21,475) - - (35,900) (57,375)
Foreign currency translation loss (17,342) - - (1,543) (18,885)
Total 17,871 839 492 (48,553) (29,351)

5-5 Offsetting of financial instruments

Details of recognized financial assets and financial liabilities subject to enforceable master offsetting arrangements and
similar agreements are as follows:

5-5-1 Financial assets

December 31, 2023

(In millions of Korean won)
Related
Gross Gross Net amounts of
amounts not
amounts of amounts of financial assets Net
Classification offset in the
recognized recognized presented in the amount
financial
assets liabilities financial statements
statements
Trade receivables 8,754 5,203 3,551 - 3,551
Other receivables 11,443 9,115 2,328 - 2,328

December 31, 2022

(In millions of Korean won)
Related
Gross Gross Net amounts of
amounts not
amounts of amounts of financial assets Net
Classification offset in the
recognized recognized presented in the amount
financial
assets liabilities financial statements
statements
Trade receivables 11,565 7,162 4,403 - 4,403
Other receivables 1,540 1,453 87 - 87

46
Daesang Corporation and its Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

5. Financial Instruments by Category and Fair Value, Continued

5-5-2 Financial liabilities

December 31, 2023

(In millions of Korean won)
Related
Gross Gross Net amounts of
amounts not
amounts of amounts of financial liabilities Net
Classification offset in the
recognized recognized presented in the amount
financial
liabilities assets financial statements
statements
Trade payables 48,077 14,180 33,897 - 33,897
Other payables 2,055 139 1,916 - 1,916

December 31, 2022

(In millions of Korean won)
Related
Gross Gross Net amounts of
amounts not
amounts of amounts of financial liabilities Net
Classification offset in the
recognized recognized presented in the amount
financial
liabilities assets financial statements
statements
Trade payables 40,698 8,616 32,082 - 32,082
Other payables 130 1 129 - 129

6. Cash and Cash Equivalents and Short and Long-term Financial Instruments

6-1 Cash and cash equivalents and short and long-term financial instruments as of December 31, 2023 and 2022 are as
follows.

(In millions of Korean won)

Classification Description December 31, 2023 December 31, 2022
Cash and cash equivalents Cash 233 262
Cash equivalents 742,212 558,721
Sub-total 742,445 558,983
Short-term financial instruments Time deposits 17,900 26,821
Long-term financial instruments Time deposits and others 8,202 185

6-2 Restricted deposits as of December 31, 2023 and 2022 consist of the following:

(In millions of Korean won)

Classification December 31, 2023 December 31, 2022 Restrictions
Short-term financial instruments 6,194 3,000 Pledged asset
Guarantee deposits for checking
Long-term financial instruments 17 20
account

7. Trade Receivables and Other Receivables

7-1 Trade receivable and other receivables as of December 31, 2023 and 2022 are as follows:

December 31, 2023

(In millions of Korean won)
Classification Current portion Non-current portion
Trade receivables 389,004 -
Loss allowance for expected credit losses (8,157) -
Other receivables 24,217 -
Loss allowance for expected credit losses (1,349) -
403,715 -

47
Daesang Corporation and its Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

7. Trade Receivables and Other Receivables, Continued

December 31, 2022

(In millions of Korean won)
Classification Current portion Non-current portion
Trade receivables 367,347 -
Loss allowance for expected credit losses (8,790) -
Other receivables 17,168 -
Loss allowance for expected credit losses (1,264) -
Total 374,461 -

7-2 Aging breakdown of trade receivables and other receivables as of December 31, 2023 and 2022 is as follows.

December 31, 2023

(In millions of Korean won)
Trade Other
Classification Total
receivables receivables
Receivables not past due
Not past due 297,799 285,913 11,886
Sub total 297,799 285,913 11,886
Past due but not impaired receivables (*1)
Less than 3 months 88,856 86,175 2,681
Over 3 months and less than 6 months 11,182 8,192 2,990
Over 6 months and less than 9 months 251 251 -
Over 9 months and less than 12 months 853 63 790
Over 12 months 4,774 253 4,521
Sub total 105,916 94,934 10,982
Impaired receivables (*2)
Impaired receivables 9,506 8,157 1,349
Total 413,221 389,004 24,217

December 31, 2022

(In millions of Korean won)
Trade Other
Classification Total
receivables receivables
Receivables not past due
Not past due 266,551 258,433 8,118
Sub total 266,551 258,433 8,118
Past due but not impaired receivables (*1)
Less than 3 months 93,262 90,903 2,359
Over 3 months and less than 6 months 6,718 4,585 2,133
Over 6 months and less than 9 months 4,369 4,369 -
Over 9 months and less than 12 months 954 25 929
Over 12 months 2,607 242 2,365
Sub total 107,910 100,124 7,786
Impaired receivables (*2)
Impaired receivables 10,054 8,790 1,264
Total 384,515 367,347 17,168

(*1) Past due but unimpaired receivables are related to multiple customers who have no recent bankruptcy records or have provided
as collateral for trade receivables.
(*2) As of December 31, 2023, expected credit loss allowance established in relation to impaired receivables is KRW 9,506 million
(End of previous year: KRW 10,054 million).

48
Daesang Corporation and its Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

7. Trade Receivable and Other Receivables, Continued

7-3 Changes in expected credit loss allowance for trade receivables and other receivables for the years ended December
31, 2023 and 2022, are as follows.

(In millions of Korean won)

Classification 2023 2022
Balance as of January 1 10,054 46,706
Recognition(reversal) of expected credit losses 538 399
Recognition(reversal) of other expected credit losses 85 (3,066)
Write-off and other (1,177) (34,059)
Exchange rate fluctuation 6 74
Balance as of December 31 9,506 10,054

7-4 As of December 31, 2023 and 2022, details of trade receivables transferred but not eliminated as a whole from the
financial statements are as follows (see Note 16).

(In millions of Korean won)

Classification December 31, 2023 December 31, 2022
Carrying amount of the discounted trade receivables 77 8,974
Carrying amount of the related borrowings 77 8,974

8. Inventories

Inventories as of December 31, 2023 and 2022 are as follows:

(In millions of Korean won) December 31, 2023 December 31, 2022
Acquisition Valuation Carrying Acquisition Valuation Carrying
Classification
cost allowance amount cost allowance amount
Merchandise 75,553 (542) 75,011 91,232 (1,106) 90,126
Finished goods 153,911 (9,350) 144,561 157,335 (6,143) 151,192
Work in-process 45,222 (2,312) 42,910 71,479 (550) 70,929
Raw materials 159,823 (161) 159,662 262,047 (965) 261,082
Supplies 15,854 - 15,854 12,846 - 12,846
Goods-in-transit 102,258 - 102,258 120,102 - 120,102
Return goods 189 - 189 239 - 239
Total 552,810 (12,365) 540,445 715,280 (8,764) 706,516

Loss on valuation of inventories for the year ended December 31, 2023 is KRW 3,601 million (End of previous year:
KRW 6,313 million of reversal of losses on valuation of inventories), and the loss (reversal) was added to (or subtracted
from) the cost of sales.

9. Financial Assets at Fair Value through Profit or Loss, Other Comprehensive Income

9-1 Financial assets at fair value through profit or loss as of December 31, 2023 and 2022 are as follows:

(In millions of Korean won)

Classification December 31, 2023 December 31, 2022
Equity instruments
Unlisted equity securities 6,296 5,032
Other equity investments 19,803 19,500
Sub total 26,099 24,532
Debt instruments
Union investment 39 39
Sub total 39 39
Total 26,138 24,571

49
Daesang Corporation and its Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

9. Financial Assets at Fair Value through Profit or Loss, Other Comprehensive Income, Continued

9-1-1 Equity instruments

(In millions of Korean

December 31, 2023 December 31, 2022
won)
Number of % Book Number of % Book
Classification Cost Cost
shares Owned value shares Owned value
Unlisted Equity Securities:
Kumho Buslines Co., Ltd. 50,000 2.43 5,000 4,296 50,000 2.43 5,000 3,032
(Ordinary shares with
options)(*1)
Space F Corp (Preference 3,334 5.24 2,000 2,000 3,334 5.24 2,000 2,000
shares)
Other Equity Investments:
Cypress Tree 1,950,000 16.63 19,500 19,803 1,950,000 16.63 19,500 19,500
Investment(*1)
Total 26,500 26,099 26,500 24,532

(*1) The Group evaluates the amount calculated using a reasonable valuation model and appropriate estimates based on the professional judgment of an independent
external valuation firm as fair value (see Note 5).

9-2 Financial assets measured at fair value through other comprehensive income as of December 31, 2023 and 2022 are
as follows:

(In millions of Korean won)

Classification December 31, 2023 December 31, 2022
Equity instruments
Unlisted equity securities 10,648 14,506

9-2-1 Equity instruments

(In millions of Korean won) December 31, 2023 December 31, 2022
Number of Number of
Percentage of Acquisition Carrying Percentage of Acquisition Carrying
Classification shares shares
ownership (%) cost amount ownership (%) cost amount
owned owned
Unlisted equity securities
Korea Housing & Urban
409,499 0.07 7,816 1,139 409,499 0.07 7,816 4,883
Guarantee (*1)(*2)
Shinki Chemical IND. Co., Ltd. 23,000 19.17 239 71 23,000 19.17 239 71
Jeonju Munhwa Broadcasting
24,470 15.29 1,548 1,283 24,470 15.29 1,548 1,688
Corp (*1)
Jeonju Television Co., Ltd. (*1) 168,000 3.00 840 1,947 168,000 3.00 840 1,557
The Korea Economic Daily Co.,
5,944 0.03 81 81 5,944 0.03 81 81
Ltd.
International Convention Center
100,000 0.25 500 425 100,000 0.25 500 425
Jeju (*1)
Sserio Co., Ltd. 15,000 15.00 75 - 15,000 15.00 75 -
Jinan Village Agricultural Co., Ltd. 2,000 2.21 20 20 2,000 2.21 20 20
Xcell Therapeutics Inc. 210,526 2.40 2,000 284 210,526 2.40 2,000 284
Biocoz Global Pte. Ltd. (*1) 100,000 3.10 4,697 4,598 100,000 3.10 4,697 4,697
Bippeco Inc. 98,998 10.39 800 800 98,998 10.39 800 800
Others - - 1,835 - - - 1,885 -
Total 20,451 10,648 20,501 14,506

(*1) The Group evaluates the amount calculated using a reasonable valuation model and appropriate estimates based on the professional judgment of
an independent external valuation firm as fair value (see Note 5).
(*2) As of December 31, 2023 and 2022, pledges have been established as collateral for borrowings (see Note 18).

50
Daesang Corporation and its Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

10. Other Assets and Other Liabilities

10-1 Other financial assets and other financial liabilities as of December 31, 2023 and 2022 are as follows:

(In millions of Korean won) December 31, 2023 December 31, 2022
Non-current Non-current
Classification Current portion Current portion
portion portion
Other financial asset
Accrued income 1,381 - 851 -
Loan asset 620 6,351 10,907 5,683
Loss allowance for
expected credit losses (13) - (14) -
Present value discount - (316) - (311)
Guarantee deposits 90 35,443 66 36,572
Loss allowance for
- (251) - (250)
expected credit losses
Present value discount - (558) - (671)
Total 2,078 40,669 11,810 41,023
Other financial liabilities
Accrued expenses 27,707 - 26,157 -
Deposits for letter of
2,599 99 2,291 99
guarantees
Present value discount - (5) - (6)
Lease liability 26,831 36,414 24,440 49,278
Others - - 34 -
Total 57,137 36,508 52,922 49,371

10-2 Changes in expected credit loss allowance for other financial assets for the years ended December 31, 2023 and
2022 are as follows.

(In millions of Korean won)

Classification 2023 2022
Balance as of January 1 264 260
Provision - 4
Balance as of December 31 264 264

10-3 Other current (non-current) assets and other current (non-current) liabilities as of December 31, 2023 and 2022
are as follows:

(In millions of Korean won) December 31, 2023 December 31, 2022
Non-current Non-current
Classification Current portion Current portion
portion portion
Other assets
Advance payments 30,690 11,323 23,607 10,083
Accumulated impairment losses (622) (639) (622) (639)
Prepaid expenses 9,854 599 8,632 744
Input value added taxes 6,260 - 3,236 -
Others 186 16,426 237 14,507
Total 46,368 27,709 35,090 24,695
Other liabilities
Contract liabilities 16,410 - 17,749 -
Advance receipt of income 3,346 333 2,832 522
Deposits received 13,372 - 10,905 -
Output value added taxes 6,591 - 4,917 -
Others 255 442 1,041 1,102
Total 39,974 775 37,444 1,624

51
Daesang Corporation and its Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

11. Investments in Associates and Joint Ventures

11-1 Details of investments in associates and joint ventures as of December 31, 2023 and 2022 are as follows

(In millions of Korean won) 2023

Share ratio Acquisition Net asset Book

Associates Location Major operating activities
(%) cost value value
PT Daesang Agung Indonesia Indonesia Food wholesale 49.00 14,998 17,738 24,738
Sunchangjangryu Agricultural Corporation Domestic Food manufacturing 22.88 1,402 624 899
UTC Greenbio Investment (*1) Domestic Investment 45.00 2,214 3,299 3,299
UN Green Synergy Investment Domestic Investment 23.91 4,818 3,622 3,622
Xiamen Zhenchan Foods Co., Ltd. China Food trade 20.00 663 57 469
Shandong Aonong Food Co., Ltd. (*2) China Food manufacturing 25.00 3,733 3,244 3,345
Ecovance Co., Ltd. (*2,3) Domestic Ingredients manufacturing 21.06 30,300 28,687 28,950
Sub total 58,128 57,271 65,322

Share ratio Acquisition Net asset Book

Joint ventures Location Major operating activities
(%) cost value value
Daesang Ricor Corporation (*4) Philippines Food manufacturing - - - -
DMC Co., Ltd. Domestic Food manufacturing 50.00 2,100 4,321 4,321
Sub total 2,100 4,321 4,321
Total 60,228 61,592 69,643

(In millions of Korean won) 2022

Share ratio Acquisition Net asset Book

Associates Location Major operating activities
(%) cost value value
PT Daesang Agung Indonesia Indonesia Food wholesale 49.00 14,998 17,141 24,388
Sunchangjangryu Agricultural Corporation Domestic Food manufacturing 22.88 1,402 756 1,030
UTC Greenbio Investment (*1) Domestic Investment 45.00 3,024 4,881 4,881
UN Green Synergy Investment Domestic Investment 23.91 4,818 4,560 4,560
Xiamen Zhenchan Foods Co., Ltd. China Food trade 20.00 663 130 542
Shandong Aonong Food Co., Ltd. (*2) China Food manufacturing 25.00 3,287 2,957 3,059
Ecovance Co., Ltd. (*2,3) Domestic Ingredients manufacturing 14.10 17,300 16,928 16,928
Sub total 45,492 47,353 55,388

Share ratio Acquisition Net asset Book

Joint ventures Location Major operating activities
(%) cost value value
Daesang Ricor Corporation (*4) Philippines Food manufacturing 50.00 4,995 8,767 8,759
DMC Co., Ltd. Domestic Food manufacturing 50.00 2,100 4,030 4,030
Sub total 7,095 12,797 12,789
Total 52,587 60,150 68,177

(*1) During the current year, the investment was returned, and the investment association was dissolved on November 9, 2023, due to the end of its
operating period, and liquidation procedures are in progress (see Note 29).
(*2) As a result of investing during the previous year, it was added to associates. And during the current year, it was additional acquisition.
(*3) As of December 31, 2022, the Company's ownership is less than 20%, but it is classified as an associate because it is judged that the Company
has significant influence by participating in major decision-making bodies.
(*4) During the current year, the entity was excluded from joint ventures due to disposal of shares.

As of the end of the reporting period, the Group's ownership share ratio and voting share ratio are the same.

52
Daesang Corporation and its Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

11. Investments in Associates and Joint Ventures, Continued

11-2 Details of changes in investments in associates and joint ventures for the years ended December 31, 2023 and
2022, are as follows

(In millions of Korean won): 2023

Portion of Changes in
Beginning Acquisition Changes in Ending
Associates net income retained Dividend
balance (disposal) equity balance
(loss) earnings
PT Daesang Agung Indonesia 24,388 - (192) 827 (285) - 24,738
Sunchangjangryu Agricultural -
1,030 - (131) - - 899
Corporation
UTC Greenbio Investment 4,881 (810) (787) 15 - - 3,299
UN Green Synergy Investment 4,560 - (775) (163) - - 3,622
Xiamen Zhenchan Foods Co., Ltd. 542 - (74) 1 - - 469
Shandong Aonong Food Co., Ltd. 3,059 446 (159) (1) - - 3,345
Ecovance Co., Ltd. 16,928 13,000 (932) (34) (12) - 28,950
Sub total 55,388 12,636 (3,050) 645 (297) - 65,322

(In millions of Korean won): 2023

Portion of Changes in
Beginning Acquisition Changes in Ending
Joint ventures net income retained Dividend
balance (disposal) equity balance
(loss) earnings

Daesang Ricor Corporation 8,759 (5,749) 407 1,012 - (4,429) -

DMC Co., Ltd. 4,030 - 291 - - - 4,321
Sub total 12,789 (5,749) 698 1,012 - (4,429) 4,321
Associates and joint ventures
68,177 6,887 (2,352) 1,657 (297) (4,429) 69,643
total

(In millions of Korean won): 2022

Beginning Acquisition Portion of net Changes in Changes in Ending

Associates
balance (disposal) income (loss) equity retained earnings balance

PT Daesang Agung Indonesia 23,680 - 1,386 (736) 58 24,388

Sunchangjangryu Agricultural
671 - 359 - - 1,030
Corporation
UTC Greenbio Investment 5,546 - (76) (589) - 4,881
UN Green Synergy Investment 4,846 - (138) (148) - 4,560
Xiamen Zhenchan Foods Co., Ltd. 592 - (48) (2) - 542
Shandong Aonong Food Co., Ltd. - 3,285 (69) (157) - 3,059
Ecovance Co., Ltd. - 17,300 (372) - - 16,928
Sub total 35,335 20,585 1,042 (1,632) 58 55,388

(In millions of Korean won): 2022

Changes in
Beginning Acquisition Portion of net Changes in
Joint ventures retained Ending balance
balance (disposal) income (loss) equity
earnings
Daesang Ricor Corporation 7,550 - 1,442 (233) - 8,759
DMC Co., Ltd. 3,899 - 131 - - 4,030
Sub total 11,449 - 1,573 (233) - 12,789
Associates and joint ventures
46,784 20,585 2,615 (1,865) 58 68,177
total

53
Daesang Corporation and its Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

11. Investments in Associates and Joint Ventures, Continued

11-3 Major financial information of Associates and Joint ventures as of the December 31, 2023 and 2022 are
as follows:

December 31, 2023 2023

(In millions
of Korean Net
won): name Asset Liabilities equity Sales income
(loss)
PT Daesang Agung Indonesia 65,149 28,948 36,201 189,882 634

Sunchangjangryu Agricultural Corporation 4,171 1,441 2,730 4,584 (575)

UTC Greenbio Investment 7,332 - 7,332 35 (1,748)

Associates UN Green Synergy Investment 15,602 456 15,146 - (3,244)

Xiamen Zhenchan Foods Co., Ltd. 854 569 285 1,445 (371)

Shandong Aonong Food Co., Ltd. 22,259 9,285 12,974 985 (635)

Ecovance Co., Ltd. 139,032 2,791 136,241 - (3,657)

Daesang Ricor Corporation - - - 20,566 802

Joint ventures
DMC Co., Ltd. 10,410 1,769 8,641 25,209 582

December 31, 2022 2022

(In millions
of Korean Net
won): name Asset Liabilities equity Sales income
(loss)
PT Daesang Agung Indonesia 64,579 29,597 34,982 179,809 3,255

Sunchangjangryu Agricultural Corporation 5,127 1,823 3,304 3,868 1,399

UTC Greenbio Investment 10,992 145 10,847 72 (126)

Associates UN Green Synergy Investment 19,226 157 19,069 1 (576)

Xiamen Zhenchan Foods Co., Ltd. 1,040 389 651 2,062 (241)

Shandong Aonong Food Co., Ltd. 16,085 4,257 11,828 30,568 (278)

Ecovance Co., Ltd. 122,362 2,298 120,064 - (2,636)

Daesang Ricor Corporation 29,676 12,142 17,534 38,727 2,899

Joint ventures
DMC Co., Ltd. 10,656 2,597 8,059 23,103 262

54
Daesang Corporation and its Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

11. Investments in Associates and Joint Ventures, Continued

11-4 Details of adjustments to carrying amounts of investments in associates and joint ventures are as follows.

2023
Valuation
Company
(In millions of Share Good difference Book
Name Equity portion of net
Korean won): ratio (%) will impairment value
assets
loss
PT Daesang Agung Indonesia 36,201 49.00 17,738 4,803 2,197 24,738
Agricultural Corporation
2,730 22.88 624 275 - 899
Sunchangjang
UTC Greenbio Investment 7,332 45.00 3,299 - - 3,299
Associates UN Green Synergy Investment 15,145 23.91 3,622 - - 3,622
Xiamen Gurong Tran Chuan Food 284 20.00 57 412 - 469
Shandong Aonong Food Co., Ltd. 12,974 25.00 3,244 101 - 3,345
Ecovance Co., Ltd. 136,241 21.06 28,687 263 - 28,950
Joint ventures DMC Co., Ltd. 8,641 50.00 4,321 - - 4,321
Total 219,548 61,592 5,854 2,197 69,643

2022
Valuation
Company
(In millions of Share Good difference Book
Name Equity portion of net
Korean won): ratio (%) will impairment value
assets
loss
PT Daesang Agung Indonesia 34,982 49.00 17,141 4,647 2,600 24,388
Agricultural Corporation
3,304 22.88 756 275 (1) 1,030
Sunchangjang
UTC Greenbio Investment 10,847 45.00 4,881 - - 4,881
Associates UN Green Synergy Investment 19,069 23.91 4,560 - - 4,560
Xiamen Gurong Tran Chuan Food 651 20.00 130 412 - 542
Shandong Aonong Food Co., Ltd. 11,828 25.00 2,957 102 - 3,059
Ecovance Co., Ltd. 120,064 14.10 16,928 - - 16,928
Daesang Ricor Corporation 17,534 50.00 8,767 - (8) 8,759
Joint ventures
DMC Co., Ltd. 8,059 50.00 4,030 - - 4,030
Total 226,338 60,150 5,436 2,591 68,177

55
Daesang Corporation and its Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

12. Property, Plant and Equipment

12-1 Details of property and equipment as of December 31, 2023 and 2022, are as follows

2023
Construction-
(In millions of Korean won): Land Facilities Others Total
in-progress
Acquisition cost 290,873 1,963,081 140,823 106,538 2,501,315
Accumulated depreciation - (1,238,006) (107,568) - (1,345,574)
Accumulated impairment loss - (13,120) (133) - (13,253)
Government subsidy (400) (8,634) (690) - (9,724)
Net book value 290,473 703,321 32,432 106,538 1,132,764

2022
Construction-
(In millions of Korean won): Land Facilities Others Total
in-progress
Acquisition cost 286,940 1,861,598 133,057 55,868 2,337,465
Accumulated depreciation - (1,150,913) (99,760) - (1,250,673)
Accumulated impairment loss - (13,621) (133) - (13,754)
Government subsidy (400) (8,675) (350) - (9,425)
Net book value 286,540 688,389 32,814 55,868 1,063,613

56
Daesang Corporation and its Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

12. Property, Plant and Equipment, Continued

12-2 Changes in net book value of property, plant and equipment during the years ended December 31, 2023 and 2022 are as follows:

2023
Exchange Acquisition
Beginning Transfer Ending
(In millions of Korean won): Acquisitions Disposals Depreciation rate of business
balance (*1) balance
fluctuation (Note 34)
Land 286,940 1,647 - 2,156 - 130 - 290,873
(Government subsidy) (400) - - - - - - (400)
Facilities 697,064 42,794 (249) 65,165 (95,775) 2,884 73 711,956
(Government subsidy) (8,675) (1,224) - - 1,265 - - (8,634)
Others 33,166 9,744 (168) 1,523 (11,383) 222 18 33,122
(Government subsidy) (350) (447) - - 107 - - (690)
Construction-in-progress 55,868 121,066 - (69,380) - (1,017) - 106,537
Total 1,063,613 173,580 (417) (536) (105,786) 2,219 91 1,132,764

2022
Exchange Acquisition Transfer of
Beginning Transfer Ending
(In millions of Korean won): Acquisitions Disposals Depreciation rate of business business
balance (*1) balance
fluctuation (Note 34) (Note 34)
Land 283,933 7,248 (142) 462 - 73 1,855 (6,489) 286,940
(Government subsidy) (400) - - - - - - - (400)
Facilities 600,065 56,335 (504) 133,939 (91,637) (968) 14,929 (15,095) 697,064
(Government subsidy) (9,886) (45) - - 1,258 - (64) 62 (8,675)
Others 26,163 13,352 (9) 3,638 (9,993) 17 31 (33) 33,166
(Government subsidy) (42) (393) - - 85 - - - (350)
Construction-in-progress 92,960 108,439 (69) (145,594) - 633 37 (538) 55,868
Total 992,793 184,936 (724) (7,555) (100,287) (245) 16,788 (22,093) 1,063,613

(*1) During the current year, KRW 364 million (KRW 7,330 million during the previous year) was transferred from tangible assets to intangible assets, KRW 15 million
(KRW 586 million during the previous year) was transferred from investment property to tangible assets, and KRW 187 million (KRW 811 million during the previous
year) was transferred from tangible assets to long-term prepaid expenses.

57
Daesang Corporation and its Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

12. Property, Plant and Equipment, Continued

12-3 The accounts that contain depreciation expenses, 2023 and 2022 are as follows:

(In millions of Korean won): 2023 2022

Cost of sales 89,984 87,945
Selling and Administrative Expenses 15,099 10,096
Other non-operating expenses 703 2,246
Total 105,786 100,287

12-4 The capitalized borrowing costs included in fixed assets during 2023 and 2022 are as follows:

(In millions of Korean won): 2023 2022

qualifying asset tangible assets tangible assets
Capitalized amount 108 1,174
Minimum 2.39% 1.50%
Annual interest rate
Maximum 2.89% 4.89%

Some of the consolidated company's land, buildings and machinery are provided as collateral for the consolidated
company's borrowings (see Note 18).

13. Intangible Assets

13-1 Details of intangible assets as of December 31, 2023 and 2022, are as follows

2023
Good Industrial Club
(in millions of Korean won): Software Others Total
will property membership
Acquisition cost 143,389 10,779 60,532 8,385 16,116 239,201
Accumulated
- (10,144) (42,312) - (1,725) (54,181)
amortization
Accumulated impairment loss (32,871) - - (445) - (33,316)
Government subsidy - (1) (177) - - (178)
Net book value 110,518 634 18,043 7,940 14,391 151,526

2022
Good Industrial Club
(in millions of Korean won): Software Others Total
will property membership
Acquisition cost 122,238 10,670 49,466 8,507 9,280 200,161
Accumulated
- (9,867) (37,021) - (1,089) (47,977)
amortization
Accumulated impairment loss (32,526) - - (445) - (32,971)
Government subsidy - (2) (2) - - (4)
Net book value 89,712 801 12,443 8,062 8,191 119,209

58
Daesang Corporation and its Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

13. Intangible Assets, Continued

13-2 Changes in net book value of intangible assets for the years ended June 30, 2023 and 2022, are as follows:

2023
Acquisition of
Beginning Exchange rate
(in millions of Korean won): Acquisitions Disposal Transfer (*2) Amortization business Ending balance
balance fluctuation
(Note 34)
Goodwill 89,712 - - - - (538) 21,344 110,518
Industrial property 803 115 - - (289) 6 - 635
(Government subsidy) (2) - - - 1 - - (1)
Software 12,445 6,086 - 5,113 (5,428) 4 - 18,220
(Government subsidy) (2) (204) - - 29 - - (177)
Club membership (*1) 8,062 - (123) - - 1 - 7,940
Others 8,191 1,197 - (4,749) (1,026) (256) 11,034 14,391
Total 119,209 7,194 (123) 364 (6,713) (783) 32,378 151,526

2022
Exchange Acquisition of Transfer of
Beginning Transfer Ending
(in millions of Korean won): Acquisitions Disposal Amortization rate business business
balance (*2) balance
fluctuation (Note 34) (Note 34)
Goodwill 89,508 - - - - 204 14,822 (14,822) 89,712
Industrial property 1,050 - - 104 (352) 1 - - 803
(Government subsidy) (3) - - - 1 - - - (2)
Software 11,917 130 - 4,515 (4,120) 3 - - 12,445
(Government subsidy) (7) - - - 5 - - - (2)
Club membership (*1) 4,209 - - 3,850 - 3 - - 8,062
Others 5,100 4,888 (309) (1,139) (39) (311) 4 (3) 8,191
Total 111,774 5,018 (309) 7,330 (4,505) (100) 14,826 (14,825) 119,209

(*1) Memberships were not amortized by applying an indefinite useful life.

(*2) During the current year, the amount transferred from tangible assets to intangible assets is KRW 364 million (KRW 7,330 million during the previous year).

59
Daesang Corporation and its Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

13. Intangible Assets, Continued

13-3 Result of goodwill impairment test

Goodwill is allocated to each cash-generating unit, which is a unit managed by management of the Group, as follows:

2023 2022
Food business 70,007 70,007
Jam business 12,839 12,839
Overseas meat processing business 6,802 6,866
Overseas food business 20,870 -
Total 110,518 89,712

The recoverable amount of cash flow generating units was determined based on value in use calculations, and the
major assumptions used in value in use calculations are as follows:

2023
Overseas meat
Overseas food
Food business Jam business processing
business
business
Operating margin 5.01%~6.14% 4.35%~4.54% 5.38%~5.38% 10.21%~15.77%
Sales growth rate (*1) 1.70%~3.10% 3.33%~4.75% 8.34%~8.34% 10.43%~15.36%
Perpetual growth rate (*2) 1.00% 1.00% 1.00% 1.00%
Discount rate (*3) 7.10% 9.24% 13.03% 10.91%

(*1) The annual average sales growth rate was calculated based on the past growth rate to calculate the cash flow
forecast for the next five years.
(*2) Figures from industry reports and consistent growth rates projected beyond 5 years were used.
(*3) The discount rate applied to the expected cash flow.

2022
Overseas meat
Food business Jam business processing
business
Operating margin 2.61%~2.95% 5.27%~5.43% 4.15%~6.45%
Sales growth rate (*1) 3.40%~4.48% 2.83%~4.03% 6.40%~7.14%
Perpetual growth rate (*2) 1.00% 1.00% 1.00%
Discount rate (*3) 7.34% 9.12% 13.09%

(*1) The annual average sales growth rate was calculated based on the past growth rate to calculate the cash flow
forecast for the next five years.
(*2) Figures from industry reports and consistent growth rates projected beyond 5 years were used.
(*3) The discount rate applied to the expected cash flow.

The Group conducts an impairment test on goodwill every year. As a result of the impairment test, it is determined
that the book value of the cash-generating unit will not exceed its recoverable amount.

13-4 The accounts that contain amortization expenses, 2023 and 2022 are as follows:

(In millions of Korean won): 2023 2022

Cost of sales 859 317
Selling and administrative expenses 5,848 4,174
Other non-operating expenses 6 14
Total 6,713 4,505

60
Daesang Corporation and its Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

14. Investment Properties

14-1 Details of investment properties as of December 31, 2023 and 2022, are as follows:

2023
Acquisition Accumulated Accumulated Net book
(In millions of Korean won):
cost depreciation impairment loss value
Land 22,896 - (613) 22,283
Buildings 17,432 (10,162) (126) 7,144
Total 40,328 (10,162) (739) 29,427

2022
Acquisition Accumulated Accumulated Net book
(In millions of Korean won):
cost depreciation impairment loss value
Land 23,069 - (613) 22,456
Buildings 17,700 (9,944) (126) 7,630
Total 40,769 (9,944) (739) 30,086

14-2 Changes in net book value of investment properties for the years ended December 31, 2023 and 2022 are as
follows:

2023
Exchange
(In millions of Beginning Transfer Ending
Acquisition Disposal Depreciation rate
Korean won): balance (*1) balance
fluctuation
Land 22,456 15 (174) (14) - - 22,283
Buildings 7,630 - (129) (1) (388) 32 7,144
Total 30,086 15 (303) (15) (388) 32 29,427

2022
Exchange
Beginning Transfer Ending
(In millions of Korean won): Disposal Depreciation rate
balance (*1) fluctuation balance
Land 22,868 - (411) - - 22,456
Buildings 9,020 (762) (175) (419) (34) 7,630
Total 31,888 (762) (586) (419) (34) 30,086

(*1) During the current year, the amount transferred from tangible assets to investment real estate was 15 million won
(586 million won during the previous year).

61
Daesang Corporation and its Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

14. Investment properties, Continued

14-3 Details of rental income and rental expenses recognized in relation to the Group's investment properties for the
years ended December 31, 2023 and 2022 are as follows:

(In millions of Korean won): 2023 2022

Rental income 1,514 1,258
Rental expenses (*) (931) (864)
Net income 583 394

(*) It consists of investment property depreciation and investment property maintenance expenses.

14-4 As of December 31, 2023, the fair value of investment property is 44,124 million won (End of previous year
35,128 million won).

15. Trade Payables and Other Payables

Details of trade payables and other payable as of December 31, 2023 and 2022 are as follows:

2023
(In millions of Korean won): Current Non-current
Trade payables 203,973 -
Other payables 164,050 95
Total 368,023 95

2022
(In millions of Korean won): Current Non-current
Trade payables 177,108 -
Other payables 159,556 95
Total 336,664 95

16. Borrowings

16-1 Details of short-term borrowings as of December 31, 2023 and 2022 are as follows
Annual interest rate
(In millions of Korean won): (%)
Amount
Lender

2023 2022 2023 2022

(1) Borrowings in Korean won:
Korea Agro-Fisheries &
General loan 2.00~5.84 1.00~6.32 73,254 93,000
Food Trade Corporation, etc.
(2) Borrowings in foreign
currencies:
Usance Korea Development Bank, etc. 5.66~6.58 3.25~5.92 126,551 249,095
Export bills (*) KEB Hana bank 5.66~6.58 3.25~5.92 77 8,974
(3) Debts of overseas
subsidiaries
Export-Import Bank of Korea,
General loan 0.00~6.69 0.72~6.41 121,499 118,828
etc.
Total - 321,381 469,897

(*) The Group classifies it as borrowings because the Group retains most of the risks and compensations, such as
recourse conditions in case of debtor's default in transactions such as discounts on trade receivables.

62
Daesang Corporation and its Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

16. Borrowings, Continued

16-2 Details of long-term borrowings as of December 31, 2023 and 2022 are as follows:

(In millions of
Annual interest rate (%) Amount
Korean won): Lender
2023 2022 2023 2022
Secured loan NH Bank 2.00 2.00 8,400 9,600
Korea Development KDB bond (1 KDB bond (1
Facility loan 141,144 94,144
Bank, etc. years)+1.16, etc. years)+1.16, etc.
1.00~KoreaExim 1.00~KoreaExim
General loan Korea Exim Bank, etc. 65,545 47,205
bond (3M)+1.15 bond (3M)+1.15
Overseas Korea Development Libor 3M+1.20
4.55~7.02 89,905 40,520
subsidiaries Bank, etc. ~4.55
Sub total 304,994 191,469
Recognized amount of government subsidies (*) (199) (334)
Current portion of long-term borrowings (29,722) (11,906)
Long-term borrowings 275,073 179,229

(*) For loans borrowed from government agencies at a lower interest rate than the market rate, the difference between
the borrowed amount and the fair value is recognized as government subsidies.

The Group's tangible assets are provided as collateral for the above short- and long-term borrowings. (see Note 18).

17. Debentures

Details of debentures as of December 31, 2023 and 2022 are as follows:

Interest rate (%) Amount

(In millions of Korean won) 2023 2022 2023 2022
Public debentures 1.55 ~ 4.18 1.23~3.19 720,000 610,000
Debenture issuance discount (1,145) (1,181)
718,855 608,819
Current portion of debentures (129,990) (79,994)
Long-term debentures 588,865 528,825

63
Daesang Corporation and its Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

18. Collateral Assets

Details of assets provided as collateral as of the end of the current term are as follows.

2023
(in millions Amount Related
Book
of Korean set up as Type of borrowing borrowing Collateral holder
value
won): collateral amount
Short-term borrowings 12,000
Land 136,021 Short-term borrowings (Usance) 22,260 Korea Development Bank
Long-term borrowings 91,000
Short-term borrowings 1,808 Bank of China
Short-term borrowings 13,410 Bank of Hope
Building 184,334 Current portion of long-term
1,200
borrowings NH Bank
484,475
Long-term borrowings 7,200
Short-term borrowings 3,000
Woori Bank
Structure 6,180 Long-term borrowings 30,000
Long-term borrowings 20,000 KEB Hana Bank
Machinery 30,241 Government subsidies 3,841 Mokpo-City
Korea Agro-Fisheries & Food
Right of use 648 Short-term borrowings 17,000
Trade Corporation
Current portion of long-term
515 Korea Housing & Urban
Shares 1,139 1,139 borrowings
Guarantee Corporation
Long-term borrowings 1,030
Trade payables 200 Dong-seo Corporation
Short-term
Short-term borrowings 1,825 KEB Hana Bank
financial 5,025 5,025
Korea Agro-Fisheries & Food
instruments Short-term borrowings 3,000
Trade Corporation
Total 363,588 490,639 229,289

19. Provisions

19-1 Provisions as of December 31, 2023 and 2022 are as follows:

2023 2022
(in millions of Korean Current Non-current Current Non-current
won) liabilities liabilities liabilities liabilities
Provision for returns 9,219 - 8,301 -
Provision for restoration - 1,840 - 1,824
Total 9,219 1,840 8,301 1,824

The Company estimates the amount of returnable sales and accounts for the estimated amount of future returns as a
provision for returns.

19-2 GHG Emission Rights and Emission Liabilities

There are no GHG emission rights provided as collateral as of the end of the reporting period.

Our estimate of greenhouse gas emissions during the current year is expected to be 463,420 tCO2-eq, which is less
than the sum of the free emission allowance granted by the government and the amount brought forward from
previous year.

Emission liabilities are recognized only when the allocated emission permits exceed the actual emissions, and there is
no emission liability recognized by the Company during the current year.

64
Daesang Corporation and its Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

20. Net Defined Benefit Obligations

20-1 Details of net defined benefit obligations and fair value of plan assets recognized in the consolidated statements
of financial position as of December 31, 2023 and 2022 are as follows:

(in millions of Korean won)

December 31, 2023 December 31, 2022
Present value of defined benefit
311,107 261,621
obligation
Fair value of plan assets (*) (186,745) (152,910)
Total 124,362 108,711

(*) Fair value of plan assets is the amount including the existing national pension fund of 43 million won in 2023 and
47 million won in 2022.

20-2 Changes in the defined benefit obligations for the years ended December 31, 2023 and 2022 are as follows:

December 31, 2023

Defined benefit Fair value of
(in millions of Korean won) Total
obligations plan assets
Balance at beginning of year 261,621 (152,910) 108,711
Current service cost 27,793 - 27,793
Interest cost(income) 13,481 (8,099) 5,382
Operation and management expenses - 340 340
Sub total 41,274 (7,759) 33,515
Remeasurement:
Income (Expense) on plan assets - (97) (97)
Actuarial gains or losses arising from
55 - 55
changes in Demographic assumptions
Actuarial gains or losses arising from
21,076 - 21,076
changes in financial assumptions
Experience adjustments 9,822 - 9,822
Sub total 30,953 (97) 30,856
Benefits paid (22,426) 11,387 (11,039)
Contributions by employer - (36,894) (36,894)
Net transfer of employees to affiliated
(482) (472) (954)
companies
Foreign exchange difference and other 167 - 167
Balance at end of year 311,107 (186,745) 124,362

65
Daesang Corporation and its Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

20. Net Defined Benefit Obligations, Continued

December 31, 2022

Defined benefit Fair value of
(in millions of Korean won) Total
obligations plan assets
Balance at beginning of year 277,755 (123,858) 153,897
Current service cost 32,609 - 32,609
Interest cost(income) 7,937 (3,656) 4,281
Operation and management expenses - 276 276
Sub total 40,546 (3,380) 37,166
Remeasurement:
Income (Expense) on plan assets - 1,029 1,029
Actuarial gains or losses arising from
2,035 - 2,035
changes in Demographic assumptions
Actuarial gains or losses arising from
(48,714) - (48,714)
changes in financial assumptions
Experience adjustments 13,600 - 13,600
Sub total (33,079) 1,029 (32,050)
Benefits paid (21,597) 10,279 (11,318)
Contributions by employer (36,560) (36,560)
Net transfer of employees to affiliated
(1,209) (418) (1,627)
companies
Foreign exchange difference and other (795) (2) (797)
Balance at end of year 261,621 (152,910) 108,711

As of December 31, 2023, the weighted average maturity of defined benefit obligations are 6.12~21.74 years (End of
previous year: 6.13~21.03years).

The Group reviews the level of accumulation of funds every year and has a policy to compensate for any loss in the
fund. Expected contributions to post-employment benefit plans to be paid in 2024 as of December 31, 2023 are 36,560
million won.

20-3 Net defined benefit obligations (assets) costs recognized in profit or loss for the years ended December 31, 2023
and 2022 are as follows:

(in millions of Korean won) 2023 2022

Current service cost 27,793 32,609
Net interest cost 5,382 4,280
Operation and management expenses 340 276
Total 33,515 37,165

20-4 The principal actuarial assumptions as of December 31, 2023 and 2022 are as follows:

(In percentage) December 31, 2023 December 31, 2022

Domestic Overseas Domestic Overseas
Discount rate 4.47%~5.39% 6.73% 5.54%~6.25% 7.25%
Salary growth rate 4.20%~5.00% 8.00% 5.00% 10.00%

66
Daesang Corporation and its Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

20. Net Defined Benefit Obligations, Continued

20-5 Plan assets as of December 31, 2023 and 2022 consist of the following:

(in millions of Korean won) December 31, 2023 December 31, 2022
Amount Ratio(%) Amount Ratio(%)
Cash and cash equivalents 186,745 100.00 152,910 100.00

20-6 The sensitivity analysis of the defined benefit obligations as of December 31, 2023 to changes in the weighted
principal assumptions is as follows:

(in millions of Korean won) 1% p increase 1% p decrease

Discount rate (23,561) 28,103
Salary growth rate 25,635 (21,916)

21. Commitments and Contingencies

21-1 Details of borrowing and other facilities limit with financial institutions as of December 31, 2023 are as follows:

(In millions of Korean won and a thousand dollars) December 31, 2023
Overdrafts 24,568
General loan agreements, etc. 709,517
Import L/C limit agreements (foreign currency), etc. USD 359,300
Foreign exchange limit USD 3,000
B2B limit agreements, etc. 25,900
Comprehensive limit agreement 16,300
Comprehensive limit agreement (foreign currency) USD 35,000

21-2 As of December 31, 2023, the Group is involved in 3 lawsuits as a plaintiff. The aggregate amounts of claims as a
plaintiff and a defendant are approximately 2,577 million won, respectively. As of the end of the current term, the final
outcome of these lawsuits cannot be predicted.

21-3 The Group had insurance contracts with Seoul Guarantee Insurance who guaranteed that the Group would fulfill
its contracts with customers in the amounts of 18,570 million won in 2023 and 12,487 million won in 2022.

21-4 As of December 31, 2023, among the equity securities held by the Group, details of investment agreements for
which the remaining agreement amount is significant are as follows.

(In millions of Korean won and a thousand CNY)

Name of Company Investment agreement Cumulative amount of investment Residual contract amount
Ecovance Co., Ltd. 40,000 30,300 9,700
Shandong Aonong Food Co., Ltd. CNY 42,000 CNY 19,500 CNY 22,500
Daesang ChPN Europe PLN 31,920 PLN 14,744 PLN 17,176

21-5 Acquisition arrangements for tangible assets

In order to secure a new production base site to foster the food business, the Group decided to acquire land and buildings
(located in Inju-myeon, Asan-si, Chungcheongnam-do, on June 30, 2026) in accordance with the board resolution on
July 8, 2022. As of December 31, 2023, 3,462 million won is recorded as an advance payment as a purchase guarantee
in connection with the purchase of this property.

67
Daesang Corporation and its Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

22. Equity

22-1 Capital Stock

(1) As of December 31,2023, the Company's total number of authorized shares is 125,000,000 shares of par value 1,000
won per share. The Company has issued 34,648,025 common shares and 1,370,223 preferred shares as of December
31,2023.

(2) Details of preferred stocks issued according to the Company articles of association are as follows.

December 31，2023
Number of shares issued 1,370,223 shares
Nature Participating non-cumulative preferred stock
Issued date May 29,1992
1% additional dividend compared to common shares based on par value
Matters concerning dividends If dividends are not paid on common stocks, dividends on preferred stocks are not paid
either.
Matters concerning
-
Conversion

22-2 Retained Earnings

(1) Details of retained earnings as of December31, 2023 and 2022 are as follows.

(in millions of Korean won) December 31，2023 December 31，2022

Legal reserve (*) 19,700 19,700
Unappropriated retained earnings 1,021,748 1,006,894
Total 1,041,448 1,026,594

(*) The Korean Commercial Code requires the Company to appropriate as legal reserve an amount equal to at least 10%
of cash dividends for each accounting period until the reserve equals 50% of stated capital. As of the end of the reporting
period, legal reserve amounted to more than 50% of the paid-in capital, so there is no obligation to accumulate additional
reserves. This legal reserve cannot be used to pay cash dividend, but it may be transferred to capital to pay stock dividend
or offset against deficit by a resolution of the general shareholders' meeting.

(2) Details of the dividend calculation as of 2023 and 2022 are as follows.

(Korean won and number of shares) 2023

Ordinary shares Preference shares
Number of shares eligible for dividends 34,648,025 1,370,223
Dividend rate(%) 80.00 81.00
Dividend amount per share 800 810
Dividend amount 27,718,420,000 1,109,880,630

(Korean won and number of shares) 2022

Ordinary shares Preference shares
Number of shares eligible for dividends 34,648,025 1,370,223
Dividend rate(%) 80.00 81.00
Dividend amount per share 800 810
Dividend amount 27,718,420,000 1,109,880,630

68
Daesang Corporation and its Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

22. Equity, Continued

A cash dividend of 28,828 million won for the fiscal year ending December 31, 2023 will be paid in April 2024.

22-3 Other Components of Equity

Other components of equity as of December 31, 2023 and 2022 are as follows:

(In millions of Korean won) December 31, 2023 December 31, 2022
Other capital surplus 221,477 221,477
Other capital adjustment (33,533) (33,533)
Loss on valuation of financial assets at FVOCI (7,550) (4,622)
Changes in capital from valuation of equity method (752) (2,409)
Loss on overseas business translation (9,478) (13,680)
Total 170,164 167,233

23. Expenses by Nature

Expenses by nature for the years ended December 31, 2023 and 2022 were summarized from cost of sales and selling
and administrative expenses as follows:

(in millions of Korean won) 2023 2022

Changes in merchandise, finished goods and work in process (313,077) (535,555)
Merchandise purchased 1,175,878 1,222,579
Raw materials and consumables used 1,530,041 1,732,913
Wages and salaries, and other 506,002 474,145
Depreciation and Amortization 112,499 104,881
Transportation 153,261 142,745
Advertising 36,544 39,555
Other 782,629 762,828
Sum of cost of sales and selling and administrative expenses 3,983,777 3,944,091

24. Selling and Administrative Expenses

Selling and administrative expenses for the years ended December 31, 2023 and 2022 are as follows:

(in millions of Korean won) 2023 2022

Wages and salaries 273,754 256,184
Post-employment benefit 21,210 22,995
Employee welfare 31,379 30,109
Travel 10,658 8,873
Education and training expenses 3,646 2,493
Communication 3,564 2,863
Power cost 6,061 4,900
Taxes and dues 24,429 20,187
Office expenses 12,930 13,875
Rent 7,418 7,142
Depreciation 32,779 30,572

69
Daesang Corporation and its Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

24. Selling and Administrative Expenses, Continued

(in millions of Korean won) 2023 2022

Repair and maintenance cost 1,998 1,953
Insurance 6,088 5,601
Entertainment 7,849 7,016
Advertising 36,416 39,759
Automobile maintenance 4,123 4,199
Books 524 449
Commissions and service charges 78,704 64,880
Loss allowance for expected credit losses 538 399
Amortization 5,848 4,174
Sample cost 1,460 1,140
Sales commissions 33,003 29,801
Sales promotion expenses 44,605 40,163
Packaging cost 5,020 5,450
Service cost 47,835 41,346
Research and development expenses 41,218 34,665
Export cost 9,536 17,064
Transportation 136,754 126,507
Other 5,950 5,579
Total 895,297 830,338

25. Other Non-Operating Income and Expenses

Details of other non-operating income and expenses for the years ended December 31, 2023 and 2022 are as follows:

25-1 Other non-operating income

(in millions of Korean won) 2023 2022

Gain on foreign currency transactions 20,907 30,101
Gain on foreign currency translation 1,166 1,250
Gain on disposal of property, plant and equipment 633 682
Reversal of loss allowance for other expected credit losses - 3,048
Miscellaneous income 16,693 6,040
Other 6,652 15,610
Total 46,051 56,731

70
Daesang Corporation and its Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

25. Other Non-Operating Income and Expenses, Continued

25-2 Other non-operating expenses

(In millions of Korean won) 2023 2022

Loss on foreign currency transactions 14,775 19,100
Loss on foreign currency translation 3,838 6,603
Donations 6,905 5,188
Other payment fees 5,253 4,632
Loss allowance for other expected credit losses 85 11
Miscellaneous expenses 10,793 11,087
Other 4,082 3,758
Total 45,731 50,379

25-3 Financial income

(In millions of Korean won) 2023 2022

Interest income 20,865 10,393
Dividend income 34 96
Gain on foreign currency transactions 11,549 15,148
Gain on foreign currency translation 4,447 16,670
Gain on valuation of FVPL 1,567 839
Total 38,462 43,146

25-4 Financial expenses

(In millions of Korean won) 2023 2022

Interest expenses 53,052 30,622
Loss on foreign currency transactions 14,816 38,275
Loss on foreign currency translation 2,127 12,282
Total 69,995 81,179

The Group recognizes foreign exchange differences related to borrowings and cash and cash equivalents as financial
income and financial expenses.

25-5 The Group’s portion of net income (loss) of investments accounted under equity method for the years ended
December 31,2023 and 2022:

(In millions of Korean won) 2023 2022

Profit on equity method 699 3,317
Loss on equity method (3,051) (702)
Total (2,352) 2,615

71
Daesang Corporation and its Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

26. Income Tax Expense

26-1 Details of Income tax expense for the years ended December 31, 2023 and 2022 are as follows:

(In millions of Korean won) 2023 2022

Current taxes
Current tax on profits for the year 17,880 19,881
Deferred taxes
Changes in deferred taxes arising from
3,708 8,833
unused tax credits and temporary differences
Income tax expense 21,588 28,714

26-2 Details of income tax recognized in equity for the years ended December 31, 2023 and 2022 are as follows:

(In millions of Korean won) 2023 2022

Deferred tax recognized in equity
Remeasurement of net defined benefit
6,933 (7,489)
liabilities (assets)
Loss (gain) on valuation of financial assets
at fair value through other comprehensive 880 (213)
income
Other (97) 127
Total 7,716 (7,575)

26-3 The taxes calculated on the Group's net income before income taxes at normal rates are reconciled to the actual
tax expenses for the years ended December 31, 2023 and 2022 as follows:

(In millions of Korean won) 2023 2022

Net income before income taxes 90,152 110,933
Income tax using the Company's statutory
23,863 28,713
tax rates
Adjustments:
Effect of non-deductible income/expenses 1,994 2,436
Tax credits (4,613) (1,503)
Temporary differences for which no
1,177 (2,373)
deferred income tax was recognized
Refund of previous income tax (45) (45)
Other (impact of changes in tax rates, etc.) (788) 1,486
Income tax expense 21,588 28,714
Effective income tax rate (%) 23.95% 25.88%

72
Daesang Corporation and its Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

26. Income Tax Expense, Continued

26-4 The changes in deferred tax for the years ended December 31, 2023 and 2022 are as follows:

December 31, 2023

(In millions of Korean Beginning Exchange
Income Equity Ending balance
won) balance rate
Loss allowance for
1,050 42 - 1 1,093
expected credit losses
Property, plant and
(17,035) 569 - 1 (16,465)
equipment
Defined Benefit
22,925 (3,452) 6,933 295 26,701
Liabilities
FVOCI financial assets 986 - 880 - 1,866
Other 5,522 (864) (97) (3,396) 1,165
Total 13,448 (3,705) 7,716 (3,099) 14,360

December 31, 2022

(In millions of Korean Beginning Exchange
Income Equity Ending balance
won) balance rate
Allowance for expected
10,000 (8,950) - - 1,050
credit losses
Property, plant and
(18,307) 1,275 - (3) (17,035)
equipment
Defined Benefit
34,605 (4,135) (7,489) (56) 22,925
Liabilities
FVOCI financial assets 1,199 - (213) - 986
Other 2,068 2,977 127 350 5,522
Total 29,565 (8,833) (7,575) 291 13,448

26-5 Deferred income tax assets(liabilities) that were not recognized for temporary differences for December
31,2023 and 2022 are as follows:

The deductible temporary difference not recognized as deferred tax assets in the statement of financial position as of
December 31, 2023, is 42,984 million won, including investment stocks in subsidiaries and related companies. As of
December 31, 2023, the unused deficits not recognized as deferred tax assets in the statement of financial position are
132,001 million won, and the unused tax credit is 399 million won.

The maturity of the unused deficit and tax credit is as follows:

(In millions of Korean

2024 2025 2026 2027 2028 after Total
won)
Unused tax losses 24,296 28,779 30,969 19,272 28,685 132,001
Unused tax credits - 9 - - 390 399
Total 24,296 28,788 30,969 19,272 29,075 132,400

26-6 The Group assessed that deferred tax assets would be feasible as expected taxable income for future years would
exceed the deductible temporary differences.

73
Daesang Corporation and its Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

27. Earnings per Share

27-1 Basic earnings per share

Basic earnings per share were calculated by dividing the net income of ordinary share by the weighted average
number of ordinary shares. The first preferred stock has the right to participate in the distribution of our profits, and
the order of payment is the same as the common share when paying dividends or distributing residual property, so we
also calculated earnings per share for the preferred stock.

Basic earnings per share for the years ended December 31, 2023 and 2022 are calculated as follows:

(a) Ordinary shares

2023 2022
Net income for ordinary share in millions of Korean won 64,514 79,895
Weighted-average number of ordinary shares outstanding 34,648,025 34,648,025
Basic earnings per common share in Korean won 1,862 2,306

(b) Preference shares

2023 2022
Net income for preferred share in millions of Korean won 2,565 3,173
Weighted-average number of preferred shares outstanding 1,370,223 1,370,223
Basic earnings per preferred share in Korean won 1,872 2,316

(c) Calculation details of common shares and preferred shares

(In millions of Korean won, a number of shares) 2023 2022

Net income 67,079 83,069
Common share dividend (A) (*) 27,718 27,718
Preferred shares dividend (B) (*) 1,110 1,110
Net income available for additional dividends (residual
38,250 54,240
income)
- Common share attributable to additional dividend able
36,795 52,177
net income (C)
- The attribution of the preferred shares among the net
1,455 2,063
income available for additional dividends (D)
Net income attributable to common share(A+C) 64,514 79,895
Net income attributable to the preferred share (B+D) 2,565 3,173

(*) Dividends of common and preferred share for the current term were approved by the board of directors on March 7,
2024 and will be approved at the regular shareholders' meeting on March 22, 2024. Dividends of common and preferred
share in the prior term were confirmed for disposal at a regular shareholders' meeting on March 24, 2023.

27-2 The potential common share issued by the Group has no dilution effect, so the net profit per diluted share for the
current and prior terms is the same as the underlying net income per share.

74
Daesang Corporation and its Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

28. Statements of Cash Flows

28-1 The cash flows from operating activities for the years ended December 31, 2023 and 2022 are calculated as
follows:

(In millions of Korean won) 2023 2022

Net income 68,564 82,219
Adjustments:
Income tax expense 21,588 28,714
Interest expenses 53,052 30,622
Post-employment benefit 33,515 37,165
Depreciation 105,786 100,288
Depreciation of right-of-use asset 23,996 22,143
Amortization 6,713 4,506
Depreciation of investment real estate 388 419
Loss allowance for expected credit losses 538 399
Reversal of loss allowance for expected credit losses 85 (3,037)
Loss on disposal of property, plant and equipment 309 179
Loss on disposal of investment real estate 26 712
Loss on disposal of joint ventures 1,076 -
Loss (reversal) on valuation of inventory 3,602 6,313
Loss on disposal of inventory 18,507 14,805
Loss (Gain) on valuation of FVPL (1,567) (839)
Loss on foreign currency translation 5,965 18,885
Loss on equity method 3,051 702
Interest income (20,865) (10,392)
Dividend income (34) (96)
Gain on disposal of property, plant and equipment (633) (682)
Gain on disposal of investment real estate (430) (220)
Profit from business transfer - (5,726)
Gain on foreign currency translation (5,612) (17,920)
Group portion of net income of investments accounted under
(699) (3,317)
equity method
Other 814 (105)
Sub total 249,171 223,518
Changes in net operating assets and liabilities:
Increase in trade receivables (22,401) (39,730)
Decrease (increase) in other receivables (7,148) 4,386
Decrease (increase) in inventories 147,671 (212,934)
Decrease (increase) in other current assets (4,621) 8,757
Increase in other non-current assets (7,621) (9,501)
Increase (decrease) in trade payables 23,196 (21,568)
Increase (decrease) in other payables 11,814 (21,881)
Increase in provisions 920 1,077
Increase in other current financial liabilities 1,439 5,929
Increase in other current liabilities 2,241 5,914

75
Daesang Corporation and its Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

28. Statements of Cash Flows, Continued

(In millions of Korean won) 2023 2022

Increase in long term other payables - 6
Decrease in net defined benefit liabilities (48,887) (49,505)
Decrease in other non- current liabilities (660) (37)
Sub total 95,943 (329,087)
Total 413,678 (23,349)

28-2 Significant non-cash investing and financing transactions for the years ended December 31, 2023 and 2022 are
as follows:

(In millions of Korean won) 2023 2022

Transfer from the asset under construction account to other fixed
69,380 145,594
assets accounts
Replacement of property, plant and equipment 15 586
Transfer of current portion of long-term borrowings 30,313 16,121
Transfer of current portion of debentures 129,846 79,892
Increase in outstanding payments when acquiring tangible assets 7,306 10,473

28-3 Changes in liabilities arising from financing activities

December 31, 2023

Cash flows
Exchange
As of from As of
(In millions of Korean won) rate Other (*)
January, 1 financing December, 31
fluctuations
activities
Short-term borrowings 469,897 (160,980) (6,405) 18,869 321,381
Current portion of long-term borrowings 11,906 11,128 (181) 6,869 29,722
Long-term borrowings 179,229 126,692 (1,290) (29,558) 275,073
Current portion of debentures 79,994 (80,000) - 129,996 129,990
Debentures 528,825 189,341 - (129,300) 588,866
Other financial liabilities 102,293 (27,301) 90 18,563 93,645
Total 1,372,144 58,880 (7,786) 15,439 1,438,677

December 31, 2022

Cash flows
Exchange
As of from As of
(In millions of Korean won) rate Other (*)
January, 1 financing December, 31
fluctuations
activities
Short-term borrowings 328,822 177,920 (2,123) (34,722) 469,897
Current portion of long-term borrowings 13,610 (15,096) 421 12,971 11,906
Long-term borrowings 53,059 125,894 16 260 179,229
Current portion of debentures 129,989 (130,000) - 80,005 79,994
Debentures 409,040 199,254 - (79,469) 528,825
Other financial liabilities 95,352 (26,047) (500) 33,488 102,293
Total 1,029,872 331,925 (2,186) 12,533 1,372,144

(*) It includes interest expense due to liquidity replacement and amortization of current value discount.

76
Daesang Corporation and its Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

29. Related Party Transactions

29-1 As of December 31, 2023, the controlling company of the consolidated company is as follows:

Division Region Name of related party

Major shareholder Korea Daesang Holdings Co., Ltd.

29-2 Other related parties are as follows:

Division 2023 2022
PT Daesang Agung Indonesia PT Daesang Agung Indonesia
Sunchangjangryu Agricultural Corporation Sunchangjangryu Agricultural Corporation
UTC Greenbio Investment UTC Greenbio Investment
Associates UN Green Synergy Investment UN Green Synergy Investment
Xiamen Zhenchan Foods Co., Ltd. Xiamen Zhenchan Foods Co., Ltd.
Ecovance Co., Ltd. Ecovance Co., Ltd. (*1)
Shandong Aonong Food Co., Ltd. Shandong Aonong Food Co., Ltd. (*1)
- (*2) Daesang Ricor Corporation
Joint venture
DMC Co., Ltd. DMC Co., Ltd.
Daesang Information Technology Co., Ltd. Daesang Information Technology Co., Ltd.
Daesang E&C Co.,Ltd. Daesang E&C Co.,Ltd.
PT.Sintang Raya PT.Sintang Raya
Daesang Wellife Co., Ltd. Daesang Wellife Co., Ltd. (*3)
Daesang Cultural Foundation Daesang Cultural Foundation
Daesang Networks Co., Ltd. Daesang Networks Co., Ltd.
Other related parties
Daesang Holdings California Imc. Daesang Holdings California Imc.
New York Golf Enterprises Inc. New York Golf Enterprises Inc.
Daesang Cellgene Co., Ltd. Daesang Cellgene Co., Ltd.
Haesung Provision Co., Ltd. Haesung Provision Co., Ltd.
Hongbo Energy Co., Ltd. Hongbo Energy Co., Ltd. (*4)
Daesang Petlife Co., Ltd. (*5) -
(*1) Incorporated as an associate during the previous year.
(*2) During the current year, Daesang Ricor Corporation was excluded due to disposal of shares.
(*3) During the previous year, the company name was changed from Daesang Life Science Co., Ltd. to Daesang Welllife Co., Ltd.
(*4) Incorporated as a subsidiary of the parent company during the previous year.
(*5) Incorporated as a subsidiary of the parent company during the current year.

77
Daesang Corporation and its Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

29. Related Party Transactions, Continued

29-3 Details of transactions with related parties for the years ended December 31, 2023 and 2022 are as follows:

December 31, 2023

Acquisition
(In millions of Other Other
Name of company Sales Purchase of tangible
Korean won) income costs
assets
Major shareholder Daesang Holdings Co., Ltd. 16 11 - 2 13,308

PT Daesang Agung Indonesia 160,339 92 - 347 -

Associates Sunchangjangryu Agricultural Corporation 8 137 - - -

Sub total 160,347 229 - 347 -

Daesang Ricor Corporation (*) 162 - - - -

Joint venture DMC Co., Ltd. 22,923 - - - -

Sub total 23,085 - - - -

Daesang Information Technology Co., Ltd. - 23 1,822 4 19,705

Daesang E&C Co.,Ltd. 30 - - 24 -

Daesang Wellife Co., Ltd. 33,966 9,261 - 4,141 27

Daesang Cultural Foundation 2 - - - 57

New York Golf Enterprises Inc. 16 - - - -

Other related parties Daesang Cellgene Co., Ltd. 1 - - - 1

Daesang Networks Co., Ltd. 511 10,774 - - 145

Daesang Petlife Co., Ltd. 2 - - - -

Haesung Provision Co., Ltd. 55 662 - 1 52

Hongbo Energy Co., Ltd. 32 - - - -

Sub total 34,615 20,720 1,822 4,170 19,987

Total 218,063 20,960 1,822 4,519 33,295

(*) The amount accrued before being excluded as a related party during the current year.

78
Daesang Corporation and its Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

29. Related party transactions, Continued

December 31, 2022

Acquisition
of tangible
(In millions of Other Other
Name of company Sales Purchase and
Korean won) income costs
intangible
assets
Major shareholder Daesang Holdings Co., Ltd. 30 1 - 5 8,166

PT Daesang Agung Indonesia 154,544 140 - 1,234 9

Associates Sunchangjangryu Agricultural Corporation 15 153 - - 3

Sub total 154,559 293 - 1,234 12

Daesang Ricor Corporation 519 - - 225 -

Joint venture DMC Co., Ltd. 21,220 - - - -

Sub total 21,739 - - 225 -

Daesang Information Technology Co., Ltd. 14 3 2,265 4 16,128

Daesang E&C Co.,Ltd. 52 - 25,382 71 -

Daesang Wellife Co., Ltd. 25,962 9,745 - 4,012 5

Chorocmaeul Co., Ltd. (*) 3,627 543 - - 89

Daesang Cultural Foundation 3 - - - 151

New York Golf Enterprises Inc. 10 - - - -

Other related parties PT Sintang Raya - - - 10 -

Daesang Cellgene Co., Ltd. 2 - - 1 -

Daesang Networks Co., Ltd. 154 18,955 - - 92

Daesang Holdings California Inc. - - - - 49

Haesung Provision Co., Ltd. 31 - - - -

Hongbo Energy Co., Ltd - - - - 3

Sub total 29,855 29,246 27,647 4,098 16,517

Total 206,183 29,540 27,647 5,562 24,695

(*) The amount accrued before being excluded as a related party during the previous period.

79
Daesang Corporation and its Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

29. Related party transactions, Continued

29-4 Details of receivables and debts to related parties as of the end of the reporting period are as follows:

December 31, 2023

(In millions of Trade Other Trade Other
Name of company
Korean won) receivables receivables payables liabilities
Parent company Daesang Holdings Co., Ltd. - 4 - 94
PT Daesang Agung Indonesia 19,042 119 1 -
Associates
Sunchangjangryu Agricultural Corporation - - 42 2
Sub total 19,042 119 43 2
DMC Co., Ltd. 1,585 - - -
Joint venture
Sub total 1,585 - - -

Daesang Information Technology Co., Ltd. - - - 1,768

Daesang Wellife Co., Ltd. 5,249 384 221 274

Other related parties Daesang Networks Co., Ltd. - - 77 4

Haesung Provision Co., Ltd. 1 - 120 5

Sub total 5,250 384 418 2,051

Total 25,877 507 461 2,147

December 31, 2022

(In millions of Trade Other Trade Other
Name of company Loan
Korean won) receivables receivables payables liabilities
Parent company Daesang Holdings Co., Ltd. - - 5 - 80
PT Daesang Agung Indonesia 17,186 - 2 20 -
Associates
Sunchangjangryu Agricultural Corporation 1 - - 21 8
Sub total 17,187 - 2 41 8
Daesang Ricor Corporation 109 - 176 - -

Joint venture DMC Co., Ltd. 2,518 - - - -

Sub total 2,627 - 176 - -

Daesang Information Technology Co., Ltd. - - - - 1,900

Daesang E&C Co.,Ltd. - - - - -

Daesang Wellife Co., Ltd. 4,015 - 434 - 2,052

Daesang Cultural Foundation - - - - 21

Other related parties
Daesang Networks Co., Ltd. - - - 591 2

Haesung Provision Co., Ltd. 6 - - - -

Hongbo Energy Co., Ltd. - 9,019 - - -

Sub total 4,021 9,019 434 591 3,975

Total 23,835 9,019 617 632 4,063

80
Daesang Corporation and its Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

29. Related party transactions, Continued

29-5 Details of financial transactions with related parties for the years ended December 31, 2023 and 2022 are as follows:

December 31, 2023

(In millions of Investment Dividend Dividend Loan Return of
Name of company
Korean won) in cash payment Receipt repayment investment
Major shareholder Daesang Holdings Co., Ltd. etc. - 12,019 - - -
Associates UTC Greenbio Investment - - - - 810
Associates Ecovance Co., Ltd. 13,000 - - - -
Associates Shandong Aonong Food Co., Ltd. 446 - - - -
Joint venture Daesang Ricor Corporation. - - 4,429 - -
Other related parties Hongbo Energy Co., Ltd. - - - 9,019 -
Total 13,446 12,019 4,429 9,019 810

December 31, 2022

Dividend Investment in
(In millions of Korean won) Name of company Loan
payment cash
Shareholders Daesang Holdings Co., Ltd. etc. 12,019 - -
Associates Ecovance Co., Ltd. - 17,300 -
Shandong Aonong Food Co.,
Associates - 3,285 -
Ltd.
Other related parties Hongbo Energy Co., Ltd. (*1) - - 9,019
Total 12,019 20,585 9,019

(*1) During the previous year, Hongbo Energy Co., Ltd. was changed from a subsidiary to another related party.

29-6 Key executives include directors (registered and unregistered), members of the board of directors, financial officers
and internal audit officers. Compensation paid or to be paid to key executives for employee services is as follows:

(In millions of Korean won) 2023 2022

Short-term salary 12,931 8,918
Retirement benefit 1,144 1,501

29-7 As of the end of the reporting period, the Group provided debt guarantees for debts of related parties (see Note 21).

81
Daesang Corporation and its Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

30. Non-controlling Interests Information

30-1 The details of non-controlling interest by each subsidiary for years 2023 and 2022 are summarized as follows:

Cumulative non- Net profit or loss Cumulative non-

Non-
December 31, 2023 controlling interest allocated to non- controlling interest
controlling Others
(In millions of Korean won) at beginning of controlling at the end of the
interest portion
year interests period
Sinan Solar Salt Co., Ltd. 10.00% 512 29 (19) 522
PT Daesang Ingredients
10.02% 14,746 1,467 370 16,583
Indonesia
PT Daesang Food Indonesia 2.98% 277 14 8 299
Daesang Vietnam Co., Ltd. 6.89% 3,599 64 (35) 3,628
Daesang America Inc. 5.00% 90 14 1 105
DU Food Co., Ltd. 7.50% 90 14 (2) 102
Daesang ChPN Europe 24.00% - (117) 1,526 1,409
Total 19,314 1,485 1,849 22,648

Cumulative non- Net profit or loss Cumulative non-

Non-
December 31, 2022 controlling interest allocated to non- controlling interest
controlling Others
(In millions of Korean won) at beginning of controlling at the end of the
interest portion
year interests period
Sinan Solar Salt Co., Ltd. 10.00% 468 19 25 512
PT Daesang Ingredients
10.02% 16,059 (1,029) (285) 14,746
Indonesia
PT Daesang Food Indonesia 2.98% 283 (1) (5) 277
Daesang Vietnam Co., Ltd. 6.89% 3,307 195 97 3,599
Daesang America Inc. 5.00% 122 (41) 9 90
DU Food Co., Ltd. 7.50% 83 7 - 90
Total 20,322 (850) (159) 19,314

30-2 Summarized financial information before elimination of intra-group transactions of subsidiaries whose non-
controlling interests are significant is as follows:

Total
December 31, 2023 Stockholders’
Assets Liabilities Revenues Net income comprehensive
(In millions of Korean won) equity
income
Sinan Solar Salt Co., Ltd. 7,712 2,493 5,219 8,738 259 55
PT Daesang Ingredients
Indonesia
272,519 106,361 166,158 329,802 15,158 18,860
PT Daesang Food Indonesia 43,308 33,248 10,060 67,587 478 769
Daesang Vietnam Co., Ltd. 115,986 63,317 52,669 145,851 902 389
Daesang America Inc. 53,911 51,811 2,100 160,196 277 305
DU Food Co., Ltd. 3,342 1,973 1,369 10,685 135 115
Daesang ChPN Europe 5,988 118 5,870 82 (487) (155)

Total
December 31, 2022 Stockholders’
Assets Liabilities Revenues Net income comprehensive
(In millions of Korean won) equity
income
Sinan Solar Salt Co., Ltd. 6,806 1,643 5,163 8,722 193 446
PT Daesang Ingredients
245,537 98,238 147,299 369,468 (10,397) (13,237)
Indonesia
PT Daesang Food Indonesia 25,697 16,406 9,291 65,724 (46) (221)
Daesang Vietnam Co., Ltd. 99,519 47,239 52,281 170,592 2,856 4,258
Daesang America Inc. 46,965 45,170 1,795 141,480 (826) (642)
DU Food Co., Ltd. 3,353 2,099 1,254 9,168 82 84

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Daesang Corporation and its Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

30. Non-controlling Interests Information, Continued

30-3 Summary cash flow information before elimination of intra-group transactions of subsidiaries in which non-controlling interests are significant is as follows:

December 31, 2023

PT Daesang
Sinan Solar Salt PT Daesang Food Daesang Vietnam Daesang America Daesang ChPN
(In millions of Korean won) Ingredients DU Food Co., Ltd.
Co., Ltd. Indonesia Co., Ltd. Inc. Europe
Indonesia
Cash flows provided by operating
(341) 28,861 3,167 1,541 4,134 286 (976)
activities
Cash flows from investing activities (125) (32,311) (16,958) (1,826) (327) (183) (1,606)
Cash flows from financing activities 254 609 13,418 (1,423) (2,379) (130) 6,042

Net increase in cash and cash equivalents (212) (2,841) (373) (1,708) 1,428 (28) 3,460

Cash and cash equivalents at beginning of

239 25,090 489 15,144 1,975 645 -
year
Foreign currency effect on cash and cash
- 907 25 13,074 17 - 196
equivalents

Cash and cash equivalents at end of year 27 23,156 141 26,510 3,420 617 3,656

December 31, 2022

Sinan Solar Salt Co., PT Daesang Ingredients PT Daesang Food Daesang Vietnam Co.,
(In millions of Korean won) Daesang America Inc. DU Food Co., Ltd.
Ltd. Indonesia Indonesia Ltd.
Cash flows provided by operating
(95) (27,909) (2,673) 1,550 126 356
activities
Cash flows from investing activities (165) (7,191) (3,369) (1,836) - (222)

Cash flows from financing activities 459 36,501 6,180 (1,431) - (154)

Net increase in cash and cash equivalents 199 1,401 137 (1,717) 126 (21)
Cash and cash equivalents at beginning of
9 22,618 69 10,326 1,692 519
year
Foreign currency effect on cash and cash
31 1,070 283 6,535 157 146
equivalents
Cash and cash equivalents at end of year 239 25,090 489 15,144 1,975 645

83
Daesang Corporation and its Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

31. Revenues from contracts with customers and related contract liabilities

31-1 Revenue from contracts with customers

(1) Considering the characteristics of products and manufacturing processes, the Group divides our sales division into
food division and material division, and our main customers are food and beverage manufacturers and food and beverage
consumers. The revenue recognized by the Group during the reporting period is as follows:

(In millions of Korean won) 2023 2022

Revenue from contracts with customers 4,107,494 4,084,090

(2) The division of revenue from contracts with our customers is as follows:

December 31, 2023

(In millions of Korean won) Food Ingredients Adjustment Total
Recognize at a point in time 3,499,493 1,312,679 (704,678) 4,107,494

December 31, 2022

(In millions of Korean won) Food Ingredients Adjustment Total
Recognize at a point in time 3,270,017 1,525,088 (711,015) 4,084,090

31-2 Assets and liabilities related to contracts with customers

(1) Trade receivables and contract liabilities recognized by the Company are as follows:

(In millions of Korean won) 2023 2022

Trade receivables 389,004 367,347
Contract liabilities 16,410 17,749

As of December 31, 2023, contractual liabilities include non-refundable customer loyalty points of KRW 877 million
(end of previous year: KRW 753 million).

(2) The revenue recognized in relation to contract liabilities is as follows:

(In millions of Korean won) 2023 2022

Performance obligations satisfied for contract liabilities 11,719 9,342

84
Daesang Corporation and its Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

32. Leases

32-1 The Group as a lessee

(1) General information

The Group enters into lease contracts for various items of land, facilities and other tangible assets used for business.
The lease term for land is generally from 1 to 50 years, the lease term for buildings is generally from 1 to 49 years, while
the lease term for vehicles and other equipment is generally from 1 to 8 years. Our obligations under the lease agreement
are guaranteed by the lessor's rights in the leased asset.

The Group also has leases of certain buildings and machinery with a lease term of 12 months or less, as well as leases
of small amounts of equipment. We apply the recognition exemption for 'short-term leases' and 'leases of low-value
underlying assets' to these leases.

(2) Right-of-use assets

The changes in the acquisition value and accumulated depreciation for the years ended December 31, 2023 and 2022
are as follows:

December 31, 2023

(In millions of Korean Other tangible
Land Facilities Total
won) assets
Acquisition value:
January 1 17,861 69,793 15,264 102,918
Increase 2,629 14,860 6,151 23,640
Decrease (179) (14,658) (2,985) (17,822)
Conversion
(45) 44 12 11
difference, etc.
December 31 20,266 70,039 18,442 108,747
Accumulated depreciation:
January 1 (6,401) (21,836) (5,653) (33,890)
Decrease 179 8,447 2,803 11,429
Depreciation (1,977) (16,321) (5,698) (23,996)
Conversion
(2) (19) 4 (17)
difference, etc.
December 31 (8,201) (29,729) (8,544) (46,474)
Carrying amount:
December 31(*) 12,065 40,310 9,898 62,273

85
Daesang Corporation and its Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

32. Leases, Continued

December 31, 2022

(In millions of Korean Other tangible
Land Facilities Total
won) assets
Acquisition value:
January 1 17,961 55,726 13,978 87,665
Increase 363 21,907 8,079 30,349
Decrease (643) (7,590) (6,727) (14,960)
Conversion
180 (250) (66) (136)
difference, etc.
December 31 17,861 69,793 15,264 102,918
Accumulated depreciation:
January 1 (5,023) (11,528) (7,219) (23,770)
Decrease 620 4,533 6,868 12,021
Depreciation (1,982) (14,812) (5,349) (22,143)
Conversion
(16) (29) 47 2
difference, etc.
December 31 (6,401) (21,836) (5,653) (33,890)
Carrying amount:
December 31(*) 11,460 47,957 9,611 69,028

(*) As of December 31, 2023, right-of-use assets related to sale and lease contracts amounted to KRW 2,002 million
(KRW 4,183 million as of December 31, 2022).

(3) Lease liabilities

The carrying amount and details of changes in lease liabilities (including other financial liabilities) for the years ended
December 31, 2023 and 2022 are as follows:

(In millions of Korean won) 2023 2022

January 1 73,718 69,756
Increase 23,778 30,076
Decrease (6,627) (2,010)
Interest expense 2,558 1,815
Lease payments paid (30,165) (25,680)
Conversion difference, etc. (16) (239)
December 31(*) 63,246 73,718

(*) As of December 31, 2023, lease liabilities related to sale and after-lease contracts include KRW 6,153 million (end
of previous year: KRW 12,413 million).

The details of the maturity analysis of the lease liabilities recognized by the Company as of the end of the reporting
period are as follows:

(In millions of Korean won) 2023 2022

Current lease liabilities 26,831 24,440
Non-current lease liabilities 36,415 49,278
Total lease liabilities 63,246 73,718
less than 1 years 26,831 24,440
Over 1 years and less than 5 years 29,770 43,431
Over 5 years 6,645 5,847

86
Daesang Corporation and its Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

32. Leases, Continued

(4) Revenues and expenses recognized from lease contracts for the years ended December 31, 2023 and 2022, are as
follows:

(In millions of Korean won) 2023 2022

Other income:
Lease change benefit 239 1,082
Sublease income - 1
Other operating expenses such as consumable expenses:
Short term lease (5,909) (6,075)
Small lease (8,068) (7,338)
Lease change loss - -
Depreciation:
Depreciation of right-of-use assets (23,996) (22,143)
Net financial cost:
Lease debt interest expense (2,558) (1,815)

The Group had a total of KRW 44,142 million in cash outflows for leases during the year. In addition, right-of-use assets
and lease liabilities increased by KRW 23,640 million and KRW 23,778 million, respectively, during the current year.

32-2 The Company as a lessor

The Group entered into an operating lease agreement for an investment property portfolio consisting of specific office
and manufacturing buildings. The terms of these leases range from 1 to 20 years. All leases include a clause that allows
the rent to be adjusted upwards on an annual basis based on current market conditions. The lessee must also guarantee
the residual value of the property. During the reporting period, rental income recognized by the Group was KRW 1,103
million.

The future minimum rental receivables under irrevocable operating leases at the end of the reporting period are as
follows:

(in millions of Korean won) 2023 2022

Less than 1 years 1,435 1,696
Over 1 years and less than 5 years 1,795 122
Over 5 years 168 238
Total 3,398 2,056

33. Assets Held for Sale

The major assets classified as held for sale as of the end of the reporting periods are as follows:

(In millions of Korean won) 2023 2022

Land and buildings 6,522 6,553
Accumulated impairment loss (2,502) (1,480)
Total 4,020 5,073

87
Daesang Corporation and its Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

34. Purchase of a Business

On April 7, 2023, the Control Company acquired Lucky Foods, LLC. for the purpose of diversifying food business
portfolio through corporate acquisitions and expanding American Kimchi business and creating synergy.

The transfer consideration paid by the Group in relation to business transfer and the value of assets and liabilities
transferred on the acquisition date are as follows:

December 31, 2023

(In millions of Korean won) Amount
Ⅰ. Transfer fee
Cash and cash equivalents 30,575
Ⅱ. Amount of acquisition of identifiable assets and liabilities
Cash and cash equivalents 1,199
Trade receivables and other receivables 490
Inventory 914
Tangible assets 91
Intangible assets 11,034
Other assets 490
Trade payables and other payables (996)
Other assets and liabilities acquired (3,991)
Subtotal 9,231
Ⅲ. Others
Goodwill 21,344

35. Subsequent Events after the Reporting Period

35-1 As of January 5, 2024, and February 7, 2024, the Group contributed an additional KRW 7,600 million and KRW
2,100 million, respectively, in its associates company, Ecovance Co., Ltd., for the purpose of entering the
biodegradable plastic raw material business and bio-based chemical business, which are high-growth and ESG-
oriented business.

35-2 As of January 9, 2024, the Group contributed an KRW 1,209 million to its subsidiary, Daesang Australia Pty
Ltd., for the purpose of expanding local business its Australia

35-3 As of January 25, 2024, the Group issued KRW 100,000 million in debentures for the purpose of repaying the
Company’s borrowings.

35-4 As of February 16, 2024, the Group contributed KRW 2,662 million to its subsidiary, Daesang Philippines, for
the purpose of expanding its tapioca business.

88
Daesang Corporation

The internal control over consolidated financial reporting of Daesang Corporation and its Subsidiaries as of December
31, 2023 has been audited by the independent auditors and the independent auditor’s report pursuant to Article 8 of
the Act on External Audit of Stock Companies and the auditor’s report is attached below. The management’s report is
also attached

1. Independent auditor’s audit report on internal control over consolidated financial reporting
2. Management’s report on the effectiveness of internal control over consolidated financial reporting

89
 Independent Auditor’s Report on Internal Control Over
Financial Reporting
(English Translation of Independent Auditors’ Report Originally Issued in Korean on March 14, 2024)

To the Board of Directors and Stockholders

Daesang Corporation

Audit Opinion on Internal Control over Financial Reporting

We have audited the internal control over financial reporting of Daesang Corporation and its Subsidiaries (the
"Group") as of December 31, 2023, based on 'Conceptual Framework for Designing and Operating Internal
Control over Consolidated Financial Reporting'.
In our opinion, the Group's internal control over financial reporting is designed and operated effectively as
of December 31, 2023, in all material respects, in accordance with the 'Conceptual Framework for Designing
and Operating Internal Control over Consolidated Financial Reporting'.

We also have audited, in accordance with Korean Standards on Auditing(“KSAs”), the consolidated financial
statements of the Group, which comprise the consolidated statements of financial position as December 31,
2023, and the consolidated statement of comprehensive income, consolidated statement of changes in
shareholders’ equity and consolidated financial statement of cash flows, for the year then ended, and notes
to the consolidated financial statements, including a summary of significant accounting policies, and our
report dated March 14, 2024 expressed an unqualified opinion.

Basis for Opinion on Internal Control over Financial Reporting

We conducted our audits in accordance with auditing standards generally accepted in the Republic of Korea.
Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit
of the Internal Control over Financial Reporting section of our report. We are independent of the Group in
accordance with the ethical requirements that are relevant to our audit of the internal control over financial
reporting in the 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 Control over Financial
Reporting

Management is responsible for designing, operating and maintaining effective internal control over
consolidated financial reporting and for its assessment of the effectiveness of internal control over financial
reporting, included in the accompanying ICFR Operating Status Report by CEO.
Those Charged with Governance is responsible for the oversight of internal control over financial reporting
of the Company.

Auditor’s Responsibilities for the Audit of the Internal Control over Financial Reporting

Our responsibility is to express an opinion on the Company's internal control over financial reporting based
on our audit. We conducted our audit in accordance with the KSAs. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether effective internal control over financial
reporting was maintained in all material respects.

The audit of internal control over financial reporting involves performing procedures to obtain audit evidence
about whether a material weakness exists. The procedures selected depend on the auditor's judgment,

90
including the assessment of the risks of that a material weakness exists. The audit includes obtaining an
understanding of internal control over financial reporting and testing and evaluating the design and operating
effectiveness of internal control over financial reporting based on the assessed risks.

Definition and Limitations of the Internal Control over Financial Reporting

A group's internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with Korean International Financial Reporting Standards ("K-IFRS"). A company's
internal control over financial reporting includes those policies and procedures that (1) pertain to the
maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in accordance with K-IFRS, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and
directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the
financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk
that controls may become inadequate because of changes in conditions, or that the degree of compliance with
the policies or procedures may deteriorate.

The partner in charge of the audit resulting in this independent auditor’s report is Dongkun, Seo.

Seoul, Korea

March 14, 2024

This report is effective as of March 14, 2024, 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
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.

91
 Report on Internal Control Over Financial Reporting
(English Translation of Report Originally Issued in Korean)

To the Shareholders, Board of Directors, and Audit Committee of

Daesang Corporation

We, as the Chief Executive Officer(“CEO”) and the Internal Accounting(“IA”) Manager of Daesang Corporation and
its Subsidiaries (“the Group”), assessed operating status of the Company’s Internal Control over Financial
Reporting(“ICFR”) for the year ending December 31, 2023.

Design and operation of ICFR is the responsibility of the Company’s management, including the CEO and the IA
Manager. (Collectively, “We”, “Our”)

We evaluated whether the Company effectively designed and operated its ICFR to prevent and detect errors or frauds
which may cause a misstatement in financial statements to ensure preparation and disclosures of reliable financial
information.

We used the ‘Conceptual Framework for Designing and Operating Internal Control over Financial Reporting’
established by the Operating Committee of Internal Control over Financial Reporting in Korea (the” ICFR Committee”)
as the criteria for design and operation of the Company’s ICFR. And we conducted an evaluation of ICFR based on the
‘Management Guideline for Evaluating and Reporting Effectiveness of Internal Control over Financial Reporting’
established by the ICFR Committee.

Based on our assessment, we concluded that the Company’s ICFR is designed and operated effectively as of December
31, 2023, in all material respects, in accordance with the ‘Conceptual Framework for Designing and Operating Internal
Control over Financial Reporting’.

We certify that this report does not contain any untrue statement of a fact or omit to state a fact necessary to be presented
herein. We also certify that this report does not contain or present any statements which might cause material
misunderstandings of the readers, and we have reviewed and verified this report with sufficient care.

February 8. 2024

Chief Executive Officer Lim Jung-Bae

Internal Accounting Manager Oh Yon-Taek

92