ORION CORPORATION AND ITS SUBSIDIARIES

Consolidated Financial Statements

December 31, 2023

(With Independent Auditors’ Report Thereon)

 Page (s)

Independent Auditors’ Report ................................................................................................... 2 - 4

Consolidated Financial Statements

Consolidated Statements of Financial Position ........................................................................ 5 - 6

Consolidated Statements of Comprehensive Income .............................................................. 7 - 8

Consolidated Statements of Changes in Equity ..................................................................... 9 - 10

Consolidated Statements of Cash Flows ............................................................................. 11 - 13

Notes to the Consolidated Financial Statements ................................................................. 14 - 85

 152, Teheran-ro, Gangnam-gu, Seoul 06236
(Yeoksam-dong, Gangnam Finance Center 27th Floor)
Republic of Korea

Independent Auditors’ Report

(Based on a report originally issued in Korean)

To the Shareholders and Board of Directors of

Orion Corp.

Report on the Audit of the Consolidated Financial Statements

Opinion
We have audited the consolidated financial statements of Orion Corp. and its subsidiaries (“the Group”),
which comprise the consolidated statement of financial position as of December 31, 2023, the
consolidated statements of comprehensive income, changes in equity and cash flows for the year then
ended, and notes, comprising of material accounting policy information and other explanatory
information.

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

Basis for Opinion

We conducted our audits in accordance with Korean Standards on Auditing (KSAs). Our responsibilities
under those standards are further described in the Auditors’ 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 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 Matter

Key audit matter is such matter that, in our professional judgment, was of most significance in our audit
of the consolidated financial statements as of and for the year ended December 31, 2023. 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.

Promotion activities in relation to sale of goods

The Group’s goods sales revenue is generated by selling confectionery and others, and various types
of sales rebates and policies are executed by the Group to increase sales considering the
characteristics of the goods. As disclosed in Note 4 to the consolidated financial statements, the Group
accounts for consideration payable to a customer as an expense or reduction of the revenue, depending
on whether the payment to the customer is in exchange for a distinct goods or services. Sales are
measured by deducting the consideration to be paid to customers, such as sales incentives. As sales
incentive items and calculation methods differ depending on the customer, there is a possibility that
errors may occur regarding the appropriateness of the sales deduction amount and the amount is
significant; thus, we identified the accuracy and completeness of sales deductions for sales promotion
activities as a key audit matter.

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The primary audit procedures we performed to address this key audit matter are as follows:
• Obtained an understanding of the types of considerations to be paid to customers, assessed
appropriateness of accounting policies for each classification, and obtained an understanding and
assessed related internal control
• Assessed appropriateness of the recognition of considerations to be paid to the customers by
inspecting relevant documents such as contracts, on a sampling basis and testing relevant
transactions
• Assessed adequacy of the amount of revenue by reviewing the appropriateness of the account
classification between reduction of the revenue and recognizing as selling, general and
administrative expenses

Other Matters
The consolidated financial statements of the Group for the year ended December 31, 2022, were
audited by another auditor who expressed an unmodified opinion on those statements on March 15,
2023.
The procedures and practices utilized in the Republic of Korea to audit such consolidated financial
statements may differ from those generally accepted and applied in other countries.

Responsibilities of Management and Those Charged with Governance for the Consolidated
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, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Group’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Consolidated 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 auditors’
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 KSAs 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 consolidated financial statements.
As part of an audit in accordance with KSAs, 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.

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  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.
 Conclude on the appropriateness of management’s use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to events
or conditions that may cast significant doubt on the 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 auditors’
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 auditors’ 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.
 Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the consolidated financial statements.
We are responsible for the direction, supervision and performance of the group audit. We remain
solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.

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

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

The engagement partner on the audit resulting in this independent auditors’ report is Lee, Ju Hyung.

Seoul, Korea
March 13, 2024

This report is effective as of March 13, 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 the above audit report has not been
updated to reflect the impact of such subsequent events or circumstances, if any.

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

(In thousands of Korean Won) Notes 2023 2022

Assets
Property, plant and equipment 7 ₩ 1,658,385,977 ₩ 1,667,582,034
Intangible assets 8 29,911,554 31,155,473
Goodwill 9 23,848,783 23,886,984
Investment property 10 35,381,317 35,568,253
Right-of-use assets 11 63,304,325 62,018,557
Investment in joint ventures 12 33,100,131 32,467,835
Financial assets at fair value through
other comprehensive income 13,34 5,425,867 20,615,039
Long-term deposits 17,34,36 2,000 2,000
Net defined benefit asset 27 11,035,123 2,875,411
Other non-current financial assets 16,34,36,38 19,057,526 19,300,198
Other non-current assets 14 13,721,265 5,775,417
Deferred income tax assets 35 6,024 3,877
Total non-current assets 1,893,179,892 1,901,251,078

Inventories 15 259,736,428 234,883,242

Other current assets 14 22,932,594 16,042,976
Other current financial assets 16,34,36,38 57,846,174 21,046,822
Current tax assets 35 326,262 69,976
Trade receivables 16,34,36,38 191,029,000 203,103,219
Short-term deposits 17,34,36 730,485,108 385,563,538
Cash and cash equivalents 17,34,36 365,849,670 609,723,063
Total current assets 1,628,205,236 1,470,432,836
Total assets ₩ 3,521,385,128 ₩ 3,371,683,914

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

(In thousands of Korean Won) Notes 2023 2022

Equity
Capital stock 1,18 ₩ 19,768,066 19,768,066
Capital surplus 598,172,192 598,172,192
Treasury shares 19 (604,361) (604,361)
Other capital 20 684,882,469 718,196,487
Reserves 21 332,275,964 255,268,311
Unappropriated retained earnings 21 1,227,905,260 962,982,146
Equity attributable to owners of the
2,862,399,590 2,553,782,840
Parent
Non-controlling interest 5 93,077,359 85,445,992
Total equity 2,955,476,949 2,639,228,833

Liabilities
Non-current lease liabilities 11,34,36,38 14,296,468 13,780,676
Deferred tax liabilities 35 151,443,253 161,513,315
Other non-current liabilities 28 975,096 779,726
Other non-current financial liabilities 24,34,36,38 273,453 201,785
Total non-current liabilities 166,988,270 176,275,503

Current portion of long-term debts 26,34,36 - 69,973,925

Short-term borrowings 26,34,36 3,812,744 23,907,383
Trade payables 34,36,38 122,719,827 149,983,831
Current lease liabilities 11,34,36,38 10,499,671 10,337,604
Current tax liabilities 35 51,481,138 57,221,335
Other current liabilities 25,28 47,493,087 54,573,480
Other current financial liabilities 24,34,36,38 162,913,442 190,182,020
Total current liabilities 398,919,909 556,179,578
Total liabilities 565,908,179 732,455,082
Total equity and liabilities ₩ 3,521,385,128 ₩ 3,371,683,914

The above consolidated statements of financial position should be read in conjunction with the accompanying notes.

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Orion Corporation and Subsidiaries
Consolidated Statements of Comprehensive Income
December 31, 2023 and 2022
Notes
(In thousands of Korean Won) 2023 2022

Revenue 6,29,38 ₩ 2,912,358,051 ₩ 2,873,246,771

Cost of revenue 29,33,38 (1,784,947,055) (1,782,078,953)
Gross profit 1,127,410,996 1,091,167,818

Selling expenses 30,33 (482,412,666) (482,105,169)

General and administrative expenses 30,33,38 (152,607,180) (142,408,147)
Operating profit 492,391,150 466,654,503

Net other expense 31 (7,133,928) (3,699,280)

Net finance income 32,34 34,191,345 23,165,972
Share of profit of associates and joint ventures 12 569,340 606,921
Profit before income tax 520,017,907 486,728,116

Income tax expense 35 (135,035,952) (88,420,041)

Profit for the year 384,981,955 398,308,075

Other comprehensive income

Items that may be subsequently reclassified to
profit or loss
Exchange differences on translating foreign
(32,679,057) (36,693,315)
operations
Share of other comprehensive income of joint
12 17,331 52,930
ventures

Items that will not be reclassified to profit or

loss

Defined benefit plan actuarial gain (loss) 27 1,399,077 10,362,482

Income tax of other comprehensive income 35 (321,837) (2,494,227)
Share of defined benefit plan actuarial gain of
12 45,625 152,840
joint ventures
Gain (loss) on valuation of equity instruments at
34 357,371 6,883,590
fair value through other comprehensive income
Other comprehensive income (loss) for the
period, net of tax (31,181,490) (21,735,699)

Total comprehensive income for the period ₩ 353,800,465 ₩ 376,572,376

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Orion Corporation and Subsidiaries
Consolidated Statements of Comprehensive Income, Continued
December 31, 2023 and 2022

(In thousands of Korean Won) Notes 2023 2022

Profit attributable to:

Owners of the Parent ₩ 376,646,553 ₩ 392,351,424
Non-controlling interests 5 8,335,402 5,956,651
Profit for the year ₩ 384,981,955 ₩ 398,308,075

Total comprehensive income attributable to:

Owners of the Parent ₩ 346,169,098 ₩ 372,620,356
Non-controlling interests 7,631,367 3,952,020
Total comprehensive income for the year ₩ 353,800,465 ₩ 376,572,376

Earnings per share 22

Basic earnings per share (in Korean won) ₩ 9,528 ₩ 9,926
Diluted earnings per share (in Korean won) 9,528 9,926

The above consolidated statements of comprehensive income should be read in conjunction with the accompanying notes.

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Orion Corporation and Subsidiaries
Consolidated Statements of Changes in Equity
Years Ended December 31, 2023 and 2022

Capital Capital Treasury Other Retained Non-controlling Total

(In thousands of Korean Won)
Stock Surplus shares capital Reserves earnings interests equity

Balance as of January 1, 2022 ₩ 19,768,066 ₩ 598,172,192 ₩ (604,361) ₩ 746,261,113 ₩ 190,491,475 ₩ 656,956,021 ₩ 81,505,966 ₩ 2,292,550,472

Comprehensive income:

Profit for the year - - - - - 392,351,424 5,956,651 398,308,075

Other comprehensive income:

Gain on valuation of financial assets at fair

- - - 6,549,918 - - 333,672 6,883,590
value through other comprehensive income
Transfer of gain(loss) on disposal of equity
investments at fair value through other - - - (77,034) - 77,034 - -
comprehensive income
Exchange differences on translating foreign
- - - (34,355,011) - - (2,338,304) (36,693,315)
operations
Share of other comprehensive income of joint
- - - 52,930 - - - 52,930
ventures
Share of defined benefit plan actuarial gain of
- - - - - 152,840 - 152,840
joint ventures

Remeasurements of net defined benefit liability - - - - - 7,868,255 - 7,868,255

Total Comprehensive income for the year - - - (27,829,196) - 400,449,553 3,952,020 376,572,376

Total transactions with owners of the Company, recognized directly in equity :

Share-based compensation expenses - - - (235,430) - (11,994) (247,424)

Dividends paid - - - - - (29,646,592) - (29,646,592)

Addition to legal reserves - - - - 4,991,528 (4,991,528) - ‐

Addition to discretionary reserves - - - - 59,785,309 (59,785,309) - ‐

Total transactions with owners of the
- - - (235,430) 64,776,837 (94,423,428) (11,994) (29,894,016)
Company, recognized directly in equity

Balance as of December 31, 2022 ₩ 19,768,066 ₩ 598,172,192 ₩ (604,361) ₩ 718,196,487 ₩ 255,268,311 ₩ 962,982,146 ₩ 85,445,992 ₩ 2,639,228,833

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Orion Corporation and Subsidiaries
Consolidated Statements of Changes in Equity, Continued
Years Ended December 31, 2023 and 2022

Capital Capital Treasury Other Retained Non-controlling Total

(In thousands of Korean Won)
Stock Surplus shares capital Reserves earnings interests equity

Balance as of January 1, 2023 ₩ 19,768,066 ₩ 598,172,192 ₩ (604,361) ₩ 718,196,487 ₩ 255,268,311 ₩ 962,982,146 ₩ 85,445,992 ₩ 2,639,228,833

Comprehensive income:

Profit for the year - - - - - 376,646,553 8,335,402 384,981,955

Other comprehensive income:

Gain on valuation of financial assets at fair

- - - 340,048 - - 17,323 357,371
value through other comprehensive income
Transfer of gain(loss) on disposal of equity
investments at fair value through other - - - (1,713,698) - 1,713,698 - -
comprehensive income
Exchange differences on translating foreign
- - - (31,957,699) - - (721,358) (32,679,057)
operations
Share of other comprehensive income of joint
- - - 17,331 - - - 17,331
ventures
Share of defined benefit plan actuarial gain of
- - - - - 45,625 - 45,625
joint ventures

Remeasurements of net defined benefit liability - - - - - 1,077,240 - 1,077,240

Total Comprehensive income for the year - - - (33,314,018) - 379,483,116 7,631,367 353,800,465

Total transactions with owners of the Company, recognized directly in equity :

Dividends paid - - - - - (37,552,349) - (37,552,349)

Addition to legal reserves - - - - 2,034,470 (2,034,470) - ‐

Addition to discretionary reserves - - - - 74,973,183 (74,973,183) - ‐

Total transactions with owners of the
- - - - 77,007,653 (114,560,002) - (37,552,349)
Company, recognized directly in equity

Balance as of December 31, 2023 ₩ 19,768,066 ₩ 598,172,192 ₩ (604,361) ₩ 684,882,469 ₩ 332,275,964 ₩ 1,227,905,260 ₩ 93,077,360 ₩ 2,955,476,949

The above consolidated statements of changes in equity should be read in conjunction with the accompanying notes.

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Orion Corporation and Subsidiaries
Consolidated Statements of Cash Flows
Years Ended December 31, 2023 and 2022
(In thousands of Korean won) 2023 2022

Cash flows from operating activities

Profit for the year ₩ 384,981,955 ₩ 398,308,075
Adjustments for:
Retirement benefits 11,856,017 11,455,131
Depreciation of property, plant and equipment 140,281,523 144,312,380
Amortization 3,447,676 4,512,303
Depreciation of investment property 166,011 162,914
Depreciation of right-of-use assets 13,296,761 12,666,238
Loss on sale of trade receivables 428,124 3,926,126
Other bad debt expenses 3,611 1,013
Loss on sale of property, plant and equipment 8,916,977 7,986,548
Loss on sale of intangible assets 72 1,624
Share-based compensation expense 38,449 27,131
Foreign currency translation loss 1,412,213 527,495
Interest expense 3,600,108 4,394,395
Income tax expense 135,035,952 88,420,041
Other expense 1,204,910 1,864,344
Gain on sale of property, plant and equipment (665,739) (3,203,594)
Gain on sale of intangible assets (29,829) (1,559,304)
Gain on disposal of financial assets at fair value
- (588,991)
through profit or loss
Foreign currency translation gain (2,220,095) (686,662)
Interest income (37,267,740) (24,891,097)
Share of profit of associates and joint ventures (569,340) (606,921)
Dividend income - (465,936)
Reversal of other bad debt expenses - (68,941)
Other Income (546,251) (65,665)
Subtotal 278,389,410 248,120,571
Changes in:
Trade receivables 9,094,098 (32,318,734)
Other current financial assets 1,890,529 (1,139,676)
Other current assets (6,767,013) 3,849,051
Inventories (30,239,953) (30,242,102)
Other non-current assets (11,052,981) (1,461,076)
Other non-current financial assets 9,254 (20,239)
Trade Payables (24,186,501) 35,116,437
Other Payables - 2,973
Other current liabilities (5,881,176) (16,375,866)

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Orion Corporation and Subsidiaries
Consolidated Statements of Cash Flows, Continued
Years Ended December 31, 2023 and 2022

(In thousands of Korean won) 2023 2022

Other current financial liabilities (22,644,843) 64,611,473

Plan assets (11,926,004) 1,407,321
Payment of defined benefit obligations (5,998,684) (7,789,039)
Payment of long-term employee benefit liabilities (106,658) (131,465)
Subtotal (107,809,932) 15,509,057
Interest received 36,350,943 20,523,263
Dividend received - 318,779
Interest paid (4,080,961) (7,764,475)
Income tax paid (150,869,441) (128,822,632)
Net cash inflow from operating activities 436,961,974 546,192,637

Cash flow from investing activities

Increase in short-term loan (37,083,486) -
Proceeds from disposal of property, plant and
1,192,613 10,377,462
equipment
Proceeds from disposal of intangible assets 511,742 4,170,526
Decrease in financial assets at fair value through profit
- 45,208,026
or loss
Decrease in rental deposits 712,979 749,917
Decrease in operation deposits 179,850 93,400
Increase in short-term financial deposits (344,921,568) (257,786,861)
Increase in financial assets at fair value through other
- (2,282,581)
comprehensive income
Decrease in financial assets at fair value through other
10,264,294 -
comprehensive income
Acquisition of investment in joint ventures (622,000) -
Acquisition of property, plant and equipment (166,473,272) (85,331,322)
Acquisition of intangible assets (2,331,377) (5,541,975)
Increase in rental deposits (1,825,616) (1,624,469)
Increase in operation deposits (131,940) (179,850)
Net cash outflow from investing activities (540,527,781) (292,147,728)

Cash flow from financing activities

Increase in short-term borrowings 435,289,932 276,718,983
Redemption of short-term borrowings (454,379,035) (252,935,267)
Redemption of current portion of long-term borrowings (70,000,000) (160,000,000)
Redemption of lease liabilities (11,479,597) (11,178,454)
Increase in leasehold deposits 80,000 -
Decrease in leasehold deposits (2,000) (63,000)

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Orion Corporation and Subsidiaries
Consolidated Statements of Cash Flows
Years Ended December 31, 2023 and 2022

(In thousands of Korean won) 2023 2022

Dividends paid (37,552,349) (29,646,592)

Net cash outflow from financing activities (138,043,049) (177,104,330)

Effect on exchange rate fluctuations on cash held,

(2,264,537) (17,626,700)
and others
Net increase(decrease) in cash and cash
(243,873,393) 59,313,879
equivalents
Cash and cash equivalents at the beginning of the
609,723,063 550,409,184
period
Cash and cash equivalents at the end of the period ₩ 365,849,670 ₩ 609,723,063

The above consolidated statements of cash flows should be read in conjunction with the accompanying notes.

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

1. General Information

These financial statements are consolidated financial statement prepared by Orion Corporation (“the
Company” or the “Parent Company”) and its subsidiaries(collectively referred to as the “Group”), which
are subject to consolidation, in accordance with Korean IFRS 1110 Consolidated Financial Statements.

Description of the Controlling Company

Orion Corporation(the Company or the Parent Company) was established on June 1, 2017, based on the
Orion Holdings Co.’s resolution of the general meeting of shareholders on March 31, 2017, by splitting
the manufacturing and sales of confectionery of Orion Holdings Co. and listed on the Korea Exchange
on July 7, 2017.

The Company is manufacturing and selling various kinds of confectionery with its headquarters in
Baekbumro, Yongsan-gu, Seoul, and a factory in Iksan, Jeollabuk-do, and others. As at December 31,
2023, the Company’s capital stock is ₩19,768 million. Major shareholders of the Company are Orion
Holdings Co., Ltd.(37.37%) and seven other related parties (6.43%).

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

1. General Information, Continued

The Company and its consolidated subsidiaries as at December 31, 2023 and 2022, are as follows:

Percentage of ownership

2023 2022
Immediate The The
Name Location controlling party Company Subsidiary Total Company Subsidiary Total
The Ultimate Parent
Orion Corporation Korea - - - - - -
Company
PAN Orion Corp. Limited Hong Kong Orion Corporation 95.15% - 95.15% 95.15% - 95.15%
Orion Corporation,
Orion International Euro LLC Russia PAN Orion Corp. 73.27% 26.73% 100.00% 73.27% 26.73% 100.00%
Limited
Orion Food VINA Co., Ltd. Vietnam Orion Corporation 100.00% - 100.00% 100.00% - 100.00%
Orion Nutritionals Private Ltd. India Orion Corporation 100.00% - 100.00% 100.00% - 100.00%
PAN Orion Corp.
Orion Food Co., Ltd. China - 100.00% 100.00% - 100.00% 100.00%
Limited
PAN Orion Corp.
Orion Food (Shanghai) Co., Ltd China - 100.00% 100.00% - 100.00% 100.00%
Limited
PAN Orion Corp.
Orion Food (Guangzhou) Co., Ltd China - 100.00% 100.00% - 100.00% 100.00%
Limited
PAN Orion Corp.
Orion Food (Shen Yang) Co., Ltd China - 100.00% 100.00% - 100.00% 100.00%
Limited
Orion Agro Co., Ltd China Orion Food Co., Ltd. - 100.00% 100.00% - 100.00% 100.00%
Orion Agro DuoLun Co., Ltd China Orion Food Co., Ltd. - 100.00% 100.00% - 100.00% 100.00%
LangFang Green Eco Packaging China Orion Food Co., Ltd.
- 100.00% 100.00% - 100.00% 100.00%
Co., Ltd
United
Orion F&B US, Inc. States of Orion Corporation 100.00% - 100.00% 100.00% - 100.00%
America

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

1. General Information, Continued

Financial information of the Company and its consolidated subsidiaries as at December 31, 2023 and 2022 and for the years ended December 31, 2023
and 2022 is summarized as follows:

(In millions of Korean won) 2023

Profit Total
Total Total Total (loss) for Comprehensive
Name Main Business assets liabilities equity Sales the year Income(loss)
Manufacturing and selling
Orion Corporation ₩ 1,334,301 ₩ 179,527 ₩ 1,154,774 ₩ 1,069,994 ₩ 239,706 ₩ 240,636
confectioneries
PAN Orion Corp. Limited Holding company 908,246 4,130 904,116 272,719 282,121 282,478
Manufacturing and selling
Orion International Euro LLC 182,675 24,302 158,373 200,298 27,656 27,656
confectioneries
Manufacturing and selling
Orion Food VINA Co., Ltd. 496,017 67,211 428,806 475,498 84,753 84,753
confectioneries
Manufacturing and selling
Orion Nutritionals Private Ltd. 36,503 7,312 29,191 20,457 (15,471) (15,471)
confectioneries
Manufacturing and selling
Orion Food Co., Ltd. 658,416 156,470 501,946 1,171,643 130,247 130,247
confectioneries
Orion Food (Shanghai) Co., Ltd Manufacturing confectioneries 217,323 36,221 181,102 216,871 17,471 17,471
Orion Food (Guangzhou) Co., Manufacturing confectioneries
197,991 29,965 168,026 134,125 12,904 12,904
Ltd
Orion Food (Shen Yang) Co., Manufacturing confectioneries
173,740 20,838 152,902 82,843 9,386 9,386
Ltd
Orion Agro Co., Ltd Manufacturing food and beverages 9,617 1,427 8,190 19,731 1,561 1,561
Orion Agro DuoLun Co., Ltd Processing the agricultural products 4,963 727 4,236 4,543 345 345
LangFang Green Eco Manufacturing pulp and paper
23,712 4,951 18,761 26,769 2,517 2,517
Packaging Co., Ltd
Orion F&B US, Inc. Selling confectioneries 4,126 3,682 444 4,805 229 229
Total ₩ 4,247,630 ₩ 536,763 ₩ 3,710,867 ₩ 3,700,296 ₩ 793,425 ₩ 794,712

Above summarized financial information is based on the separate financial statements.

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

1. General Information, Continued

(In millions of Korean won) 2022

Profit Total
Total Total Total (loss) for Comprehensive
Name Main Business assets liabilities equity Sales the year Income(loss)
Manufacturing and selling
Orion Corporation ₩ 1,228,501 ₩ 276,811 ₩ 951,690 ₩ 939,113 ₩ 104,657 ₩ 112,493
confectioneries
PAN Orion Corp. Limited Holding company 659,867 4,125 655,742 347,838 345,218 352,101
Manufacturing and selling
Orion International Euro LLC 189,511 36,044 153,467 209,827 30,196 30,196
confectioneries
Manufacturing and selling
Orion Food VINA Co., Ltd. 526,274 68,903 457,371 472,902 82,374 82,375
confectioneries
Manufacturing and selling
Orion Nutritionals Private Ltd. 29,195 6,815 22,380 13,615 (11,628) (11,628)
confectioneries
Manufacturing and selling
Orion Food Co., Ltd. 787,447 198,988 588,459 1,265,189 134,612 134,612
confectioneries
Orion Food (Shanghai) Co., Ltd Manufacturing confectioneries 240,328 43,286 197,042 220,316 16,770 16,770
Orion Food (Guangzhou) Co., Manufacturing confectioneries
204,793 29,226 175,567 150,347 11,859 11,859
Ltd
Orion Food (Shen Yang) Co., Manufacturing confectioneries
168,168 24,002 144,166 105,506 10,874 10,874
Ltd
Orion Agro Co., Ltd Manufacturing food and beverages 9,710 1,749 7,961 16,552 1,520 1,520
Orion Agro DuoLun Co., Ltd Processing the agricultural products 4,761 849 3,912 3,704 253 253
LangFang Green Eco Manufacturing pulp and paper
25,362 6,095 19,267 30,962 3,483 3,483
Packaging Co., Ltd
Orion F&B US, Inc. Selling confectioneries 912 698 214 1,470 26 26
Total ₩ 4,074,829 ₩ 697,591 ₩ 3,377,238 ₩ 3,777,341 ₩ 730,214 ₩ 744,934

Above summarized financial information is based on the separate financial statements.

There are no material changes in the scope of the consolidation for the year ended December 31, 2023 and 2022.

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

2. Basis of Presenting Financial Statements

The Group has prepared financial statements in accordance with the Korean International Financial
Reporting Standards (K-IFRS), which are accounting standards adopted by the International Accounting
Standards Board (IASB) as stipulated in Article 5, Paragraph 1, Item 1 of the External Audit of Stock
Companies Act.

The consolidated financial statements were approved for issue by the Board of Directors on February
7, 2024, and are subject to change with the approval of shareholders at their Annual General Meeting
on March 21, 2024.

(1) Basis of Measurement

The consolidated financial statements have been prepared on the historical cost basis except for
the following material items in the consolidated statement of financial position:

• Net defined benefit liabilities (defined benefit assets) recognized at the present value of
defined benefit obligations less the fair value of plan assets

• Financial assets at fair value through other comprehensive income(“FVOCI”)

• Liabilities for cash-settled share-based compensation measured at fair value

(2) Functional and Presentation Currency

Each subsidiary’s financial statements within the Group are presented in the subsidiary’s functional
currency, which is the currency of the primary economic environment in which each subsidiary
operates. The consolidated financial statements are presented in Korean won, which is the
Controlling Company’s functional currency.

(3) Estimation and Judgement

K-IFRS requires the use of estimates and assumptions about the future, including climate-related
risks and opportunities based on management's best judgment, on the application of accounting
policies in preparing financial statements or on the reporting amount of assets, liabilities, revenues
and expenses as of the end of the reporting period. Estimates and actual results may differ when
estimates and assumptions based on management's best judgment are different from the actual
environment as of the end of the reporting period.

Estimates and the underlying assumptions about estimates are constantly being reviewed in relation
to risk management of consolidated entities and their consistency with climate-related
arrangements, and changes to accounting estimates are recognized during periods when estimates
have changed and during periods that will be affected in the future.

Management judgments and estimates and assumptions about significant risks that may affect the
adjustment of asset and liability bookings in the next fiscal year are as follows; Additional information
on significant judgments and estimates for some items is included in relevant notes.

Russia’s war on Ukraine is continuing and Russia is imposed to the international sanctions. As a
result, the Group may experience situations such as a decrease in value of financial assets or
operating assets owned by the Group regarding the conflict, an increase in receivable payment
terms, limitation to transfer funds, a decrease in profit.

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

2. Basis of Presenting Financial Statements, Continued

(3) Estimation and Judgement, Continued

Significant accounting estimates and assumptions applied in the preparation of the financial
statements can be adjusted depending on changes in the uncertainty from conflicts between Russia
and Ukraine and international sanctions against Russia. Also, the ultimate effect of such conflict
and sanctions to the Group’s business financial position and financial performance cannot be
presently be determined.
(a) Management judgement

Information on key management decisions relating to the application of accounting policies that
significantly affect the amount recognized in consolidated financial statements is as follows.

- Lease

In determining the lease term, management considers all facts and circumstances that
create an economic incentive to exercise an extension option, or not exercise a termination
option. Extension options (or periods after termination options) are only included in the
lease term if the lease is reasonably certain to be extended (or not terminated).

The lease term is reassessed if an option is actually exercised (or not exercised) or the
Company becomes obliged to exercise (or not exercise) it. The assessment of reasonable
certainty is only revised if a significant event or a significant change in circumstances occurs,
which affects this assessment, and that is within the control of the lessee.

(b) Uncertainty of assumptions and estimates

Information on the uncertainties of assumptions and estimates that pose a significant risk of
significant adjustments occurring within the following reporting periods is as follows.

- Net defined benefit asset

The present value of net defined benefit liability depends on a number of factors that are
determined on an actuarial basis using a number of assumptions including the discount
rate.

(c) Fair value measurement

The Group's accounting policies and disclosures require fair value measurements for a number
of financial and non-financial assets and liabilities. The Group establishes fair value assessment
policies and procedures. The policy and procedures include the operation of the evaluation
department responsible for reviewing all significant fair value measures, including fair value
classified as Level 3 in the fair value hierarchy, and the results are reported directly to the CFO.

The assessment department regularly reviews significant inputs and assessment adjustments
that are not observable. If third-party information, such as brokerage prices or assessment
agencies, is used to measure fair value, the assessment department is determining whether it
can conclude that the assessment based on information obtained from a third party contains
classification by level within the fair value hierarchy and meets the requirements of that standard.

The Group reports a significant evaluation issue to the Audit Committee.

When measuring the fair value of an asset or liability, the Group uses market-observable inputs
as much as possible. Fair value is classified within the fair value hierarchy based on the inputs
used in the valuation technique as follows.

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

2. Basis of Presenting Financial Statements, Continued

(3) Estimation and Judgement, Continued

(c) Fair value measurement, Continued

• Level 1 : Quoted prices (unadjusted) in active markets for identical assets or liabilities
• Level 2 : Inputs, other than quoted prices, that are observable from market for the asset or
liability, either directly (that is, as prices) or indirectly (that is, derived from prices)

• Level 3 : Inputs for the asset or liability that are not based on observable market data (that
is, unobservable inputs)

If several inputs used to measure the fair value of an asset or liability are classified at different
levels within the fair value hierarchy, the entity classifies the entire fair value measurement at
the same level as the lowest level input in the fair value hierarchy, which is significant throughout
the measurement, and recognizes the shift between levels of the fair value hierarchy at the end
of the reporting period when the change occurs.

Detailed information on the assumptions used to assess fair value is as follows.

- Estimated goodwill impairment

The Group tests whether goodwill has suffered any impairment on an annual basis. The
recoverable amount of a cash generating unit (CGU) is determined based on value-in-use
calculation.

- Impairment of financial assets

The provisions for impairment for financial assets are based on assumptions about risk of
default and expected loss rates. The Group uses judgements in making these assumptions
and selecting the inputs to the impairment calculation based on the Group’s past history,
existing market conditions as well as forward looking estimates at the end of each reporting
period.

- Share based payment

The Group measures the cost of share-based payment transaction by reference to the fair
value of equity instruments granted at the grant date and the fair value is estimated using
valuation model which considers the conditions upon which equity instruments are granted.
Also, the Group shall decide the most appropriate price determining factors for valuation
model including volatility of the rights and risk-free interest rate and others. The applied
assumptions and evaluation models are described in Note 23.

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

3. Changes in Accounting Policies

3.1 Deferred Tax related to Assets and Liabilities arising from a Single Transaction

The Group has adopted Deferred Tax related to Assets and Liabilities arising from a Single
Transaction from 1 January 2023. The amendments narrow the scope of the initial recognition
exemption to exclude transactions that give rise to equal and offsetting temporary differences –
e.g. leases and decommissioning liabilities. For leases and decommissioning liabilities, an entity
is required to recognize the associated deferred tax assets and liabilities from the beginning of
the earliest comparative period presented, with any cumulative effect recognized as an adjustment
to retained earnings or other components of equity at that date. For all other transactions, an entity
applies the amendments to transactions that occur on or after the beginning of the earliest period
presented.

Following the amendments, the Group has recognized a separate deferred tax asset in relation to
its lease liabilities and a deferred tax liability in relation to its right-of-use assets. However, there
was no impact on the statement of financial position because the balance qualify for offset under
paragraph 74 of K-IFRS 1012. There was no impact on the opening retained earnings as at 1
January 2022 as a result of the change. The key impact for the Group relates to disclosure of the
deferred tax assets and liabilities recognized.

3.2 Global Minimum Tax

The amendments clarify that K-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).

However, a temporary exemption from the requirements of K-IFRS 1012, Income Taxes, has been
adopted to allow the Company to neither recognize nor disclose deferred tax assets and liabilities
relating to Pillar Two income Taxes.

3.3 Material Accounting Policy Information

Since January 1, 2023, the Group has applied Disclosure of Accounting Policies(K-IFRS No. 1001
‘Presentation of Financial Statements’). Although the amendments did not result in any changes
to the accounting policies themselves, they impacted the accounting policy information disclosed
in the financial statements.

The amendments require the disclose of ‘material’, rather than ‘significant’, accounting policies.
The amendments also provide guidance on the application of materiality to disclosure of
accounting policies, assisting entities to provide useful, entity-specific accounting policy
information that users need to understand other information in the financial statements.

Management reviewed the accounting policies and made update to the information disclosed in
Note 4 Material Accounting policies.

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

4. Material Accounting Policies

The material accounting policies applied by the Group in preparing the financial statements in
accordance with Korean International Financial Reporting Standards (K-IFRS) are described below,
and the financial statements for the current and comparative periods, excluding changes in accounting
policies described in Note 3, have been prepared using the same accounting policies.

The Group adopted accounting policy disclosure amendments (K-IFRS 1001 'Presentation of Financial
Statements') effective January 1, 2023. These amendments require disclosure of 'material' accounting
policies rather than 'significant' accounting policies. While these amendments do not result in a change
in the accounting policies themselves, they do impact the disclosure of accounting policy information in
these financial statements.

4.1 Basis of consolidation

4.1.1 Non-controlling interests

NCI are measured initially at their proportionate share of the acquiree’s identifiable net assets
at the date of acquisition.

4.1.2 Elimination of intercompany transactions

Intercompany transactions, balances, income and expenses and unrealized gains and losses
(excluding foreign exchange gains and losses) are eliminated on consolidation. The Company’s
share of unrealized losses on transactions with associates accounted for using the equity method
are eliminated in the same way as unrealized gains unless there is evidence of impairment of
the asset.

4.1.3 Business combinations under common control

Combining entities or businesses under common control recognizes the acquired assets and
liabilities as the book value in the consolidated financial statements of the ultimate controlling
entity. The Group adjusts the difference between consideration transferred and the book value
of net assets acquired in the capital surplus.

4.2 Cash and Cash Equivalents

Cash and cash equivalents include cash in hand, deposits held at call with banks, and other short-
term highly liquid investments with original maturities of three months or less.

4.3 Inventories

The cost of inventories is determined by the specific identification method for materials-in-transit and
by the weighted average method for all other inventories. The cost of inventories comprises all costs
of purchase, costs of conversion and other costs incurred in bringing the inventories to their present
location and condition. The allocation of fixed manufacturing overheads which are included in the
costs of products and work-in-process is based on the normal capacity of the production facilities.

4.4 Non-derivative financial assets

4.4.1 Recognition and initial measurement

Trade receivables and debt securities issued are initially recognized when they are originated.
All other financial assets are initially recognized when the Company becomes a party to the
contractual provisions of the instrument.

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

4. Material Accounting Policies, Continued

4.4 Non-derivative financial assets, Continued

4.4.2 Classification and subsequent measurement

Financial assets – Business model assessment

The Group makes an assessment of the objective of the business model in which a financial
asset is held at a portfolio level because this best reflects the way the business is managed, and
information is provided to management. Transfers of financial assets to third parties in
transactions that do not qualify for derecognition are not considered sales for this purpose,
consistent with the Group’s continuing recognition of the assets.

The business model of the Group is as follows.

Held to collect - The Group holds financial assets arise from its confectionery business and
investment property. The objective of the business model for these financial instruments is to
collect the amounts due from the Group’s receivables and to earn contractual interest income on
the amounts collected.

Financial assets – Assessment whether contractual cash flows are solely payments of principal
and interest

In assessing whether the contractual cash flows are SPPI, the Group considers the contractual
terms of the instrument. This includes assessing whether the financial asset contains a
contractual term that could change the timing or amount of contractual cash flows such that it
would not meet this condition.

In making this assessment, the Group considers:

• contingent events that would change the amount or timing of cash flows;

• terms that may adjust the contractual coupon rate, including variable-rate features;

• prepayment and extension features; and

• terms that limit the Group’s claim to cash flows from specified assets (e.g. non-recourse
features)

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

4. Material Accounting Policies, Continued

4.5 Impairment of financial asset

4.5.1 Financial instruments and contract assets

The Group recognizes loss allowances for ECLs on:

• financial assets measured at amortised cost (‘cash and cash equivalents’ and ‘trade and other
receivables)

• contract assets defined in K-IFRS 1115

The Group measures loss allowances at an amount equal to lifetime ECLs, except for the
following, which are measured at 12-month ECLs:

• debt securities that are determined to have low credit risk at the reporting date; and

• other debt securities and bank balances for which credit risk(i.e. the risk of default occurring
over the expected life of the financial instrument) has not increased significantly since initial
recognition.

Loss allowances for trade receivables (including lease receivables) and contract assets are
always measured at an amount equal to lifetime ECLs.

The Group considers a financial asset to be in default when:

• the debtor is unlikely to pay its credit obligations to the Group in full, without recourse by the
Group to actions such as realizing security(if any is held);

4.5.2 Credit-impaired financial assets

At each reporting date, the Group assesses whether financial assets carried at amortised cost is
credit-impaired. A financial asset is ‘credit-impaired’ when one or more events that have a
detrimental impact on the estimated future cash flows of the financial asset have occurred.

Evidence that a financial asset is credit-impaired includes the following observable data:

• significant financial difficulty of the debtor;

• a breach of contract such as a default

• the restructuring of a loan or advance by the Group on terms that the Group would not
consider otherwise;

• it is probable that the debtor will enter bankruptcy or other financial reorganization

• the disappearance of an active market for a security because of financial difficulties

4.5.3 Presentation of allowance for ECL in the statement of financial position

Loss allowances for financial assets measured at amortised cost are deducted from the gross
carrying amount of the assets.

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

4. Material Accounting Policies, Continued

4.5 Impairment of financial asset, Continued

4.5.4 Write-off

The gross carrying amount of a financial asset is written off when the Group has no reasonable
expectations of recovering a financial asset in its entirety or a portion thereof. For corporate
customers, the Group individually makes an assessment with respect to the timing and amount
of write-off based on whether there is a reasonable expectation of recovery. The Group expects
no significant recovery from the amount written off. However, financial assets that are written off
could still be subject to enforcement activities in order to comply with the Group’s procedures for
recovery of amounts due.

4.6 Property, plant and equipment

Depreciation is calculated to write off the cost of items of property, plant and equipment less their
estimated residual values under the straight-line method over their estimated useful lives and is
generally recognized in profit or loss. Land Is not depreciated.

The estimated useful lives of property, plant and equipment for current and comparative periods are
as follows:

Estimated useful lives (years)

Buildings 15 ~ 55
Structures 10 ~ 30
Machinery 5 ~ 17
Others 4 ~ 10, Indefinite

4.7 Intangible assets

Goodwill is measured as describes in Note 9, and carried at cost less accumulated impairment losses.

Intangible assets, except for goodwill, are initially recognized at its historical cost, and carried at cost
less accumulated amortization and accumulated impairment losses.

Intangible assets are amortised using a straight-line method for the following useful life from the time
they become available, with the residual value as zero ("0"). In the case of certain intangible assets,
where the expected period of use is not reasonably determinable, such intangible assets are
evaluated to have an indefinite useful life, thus not amortised.

Estimated useful lives (years)

Industrial property rights 10
Others 5

4.8 Investment property

An investment property is measured initially at its cost. After recognition as an asset, investment
property is carried at cost less accumulated depreciation and impairment losses.

Among investment property, land is not depreciated.

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

4. Material Accounting Policies, Continued

4.9 Leases

4.9.1 As a lessee

At commencement or on modification of a contract that contains a lease component, the Group

allocates the consideration in the contract to each lease component on the basis of its relative
stand-alone prices. However, for the leases of property the Group has elected not to separate
non-lease components and account for the lease and non-lease components as a single lease
component.

The lease liability is initially measured at the present value of the lease payments that are not
paid at the commencement date. Generally, the Group uses its incremental borrowing rate as
the discount rate.

To determine the incremental borrowing rate, the Group uses:

• Recent third-party financing received by the individual lessee as a starting point, adjusted to
reflect changes in financing conditions since third party financing was received

• Makes adjustments specific to the lease, for example term and security.

The Group presents right-of-use assets that do not meet the definition of investment property in
‘right-of-use assets’ and lease liabilities in ‘lease liabilities’ in the statement of financial position.

The Group has elected not to recognize right-of-use assets and lease liabilities for leases of low-
value assets and short-term leases. The Group recognizes the lease payments associated with
these leases as an expense on a straight-line basis over the lease term.

4.9.2 As a lessor

When the Group acts as a lessor, it determines at lease inception whether each lease is a finance
lease or an operating lease.

To classify each lease, the Group makes an overall assessment of whether the lease transfers
substantially all of the risks and rewards incidental to ownership of the underlying asset. As part
of this assessment, the Group considers certain indicators such as whether the lease is for the
major part of the economic life of the asset.

The Group recognizes lease payments received under operating leases as income on a straight-
line basis over the lease term as part of ‘other revenue’.

4.10 Non-derivative financial liabilities

The Group classifies financial liabilities at fair value through profit or loss and other financial
liabilities and recognizes them on consolidated statement of financial position when the Group
becomes a party to a contract, depending on the substance of the contractual terms and
definition of financial liabilities.

4.11 Employee Benefits

The defined benefit liability is calculated annually by an independent actuary using the projected
unit credit method.

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

4. Material Accounting Policies, Continued

4.12 Provision

A provision for warranties is recognized when the underlying products or services are sold, based
on historical warranty data and a weighting of possible outcomes against their associated
probabilities.

4.13 Foreign Currency

If the functional currency of an foreign operation is not the currency of hyperinflationary economy,
the assets and liabilities in the statement of financial position(including the statement of financial
position that is presented in comparison) are translated at the exchange rates at the reporting
date. The income and expenses in the statement of comprehensive income are translated at the
exchange rates at the average exchange rate for the reporting period and foreign currency
differences arising from translation are recognized in OCI.

4.14 Revenue from contracts with customers

Revenue from the sale of goods, rendering of services or use of the Group assets is measured
at the fair value of the consideration received or receivable. Trade discount and volume rebates
are recognized as a reduction of revenue. Revenue is recognized when persuasive evidence
exists, usually in the form of an executed sales agreement, that the significant risks and rewards
of ownership have been transferred to the buyer, recovery of the consideration is probable, the
associated costs and possible return of goods can be estimated reliably, there is no continuing
management involvement with the goods, and the amount of revenue can be measured reliably.

4.14.1 Variable consideration

The Group estimates an amount of variable consideration by using the method that the Group
expects to better predict the amount of consideration to which it will be entitled for discount,
incentive, penalty and others to be paid to customers.

4.14.2 Consideration payable to a customer

The Group accounts for consideration payable to a customer as an expense or reduction of

the revenue, depending on whether the payment to the customer is in exchange for a distinct
good or service.

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

4. Material Accounting Policies, Continued

4.15 Finance income and finance costs

The Group’s finance income and finance costs include:

• interest income;

• interest expense;

• dividend income;

• the foreign currency gain or loss on financial assets and financial liabilities;

• the net gain or loss on the disposal of financial assets at FVTPL

Interest income or expense is recognized under the effective interest method. Dividend income
is recognized in profit or loss on the date on which the Group’s right to receive payment is
established.

4.16 Income tax

The Group has applied a temporary mandatory relief to the recognition and disclosure of deferred
tax assets and liabilities related to the Pillar Two Model Rules. Furthermore, as the relevant
legislation will be effective from January 1, 2024, the Group has not recognized any current tax
expense related to Pillar Two in the fiscal year ended December 31, 2023.

4.17 New and amended standards not yet adopted by the Group

The amended accounting standards and interpretations that have been issued but not yet
effective for the annual reporting period commencing on January 1, 2023 are as follows: The
group has not early adopted the following new or amended accounting standards.

4.17.1 Amendments to K-IFRS 1001, Presentation of Financial Statements, Classification of

Liabilities as Current or Non-Current and Non-current Liabilities with Covenants

The amendments, as issued in 2020 and 2022, aim to clarify the requirements on determining
whether a liability is current or non-current, and require new disclosures for non-current
liabilities that are subject to future covenants. The amendments apply for annual reporting
period beginning on or after 1 January 2024. There is no impact of this amendment on the
consolidated financial statements.

4.17.2 Amendments to K-IFRS 1007, Statement of Cash Flows, and 1107, Financial Instruments :
Presentation – Supplier Finance Arrangements

The amendments introduce new disclosures relating to supplier finance arrangements that
assist users of the financial statements to assess the effects of these arrangements on an
entity’s liabilities and cash flows and on an entity’s exposure to liquidity risk. The amendments
apply for annual reporting period beginning on or after 1 January 2024. There is no impact of
this amendment on the consolidated financial statements.

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

4. Material Accounting Policies, Continued

4.17 New and amended standards not yet adopted by the Group, Continued

4.17.3 Other accounting standards

The following new and amended accounting standards are not expected to have a significant
impact on the Group’s consolidated financial statements.

• Lease Liability in a Sale and Leaseback (Amendments to K-IFRS 1116, Lease)

• Lack of Exchangeability (Amendments to K-IFRS 1021, The Effect of Changes in Foreign

Exchange Rates)

5. Non-Controlling Interests

The profit or loss allocated to non-controlling interests and accumulated non-controlling interests of
subsidiaries that are material to the Group for the years ended December 31, 2023 and 2022, is as
follows.

Information on the Group’s subsidiaries that has material non-controlling interests is summarized as
follows:

Non-controlling interests percentage

Subsidiary Location 2023 2022
PAN Orion Corp. Limited Hong Kong 4.85% 4.85%

Cumulative non-controlling interests and dividends paid to non-controlling interests as at December

31, 2023 and 2022, are as follows:

(In thousands of Korean won)

2023
Profit allocated to non- Cumulative non- Dividends paid to non-
Subsidiary controlling interests controlling interests controlling interests
PAN Orion
₩ 8,335,403 ₩ 93,077,360 ₩ -
Corp. Limited

(In thousands of Korean won)

2022
Profit allocated to non- Cumulative non- Dividends paid to non-
Subsidiary controlling interests controlling interests controlling interests
PAN Orion
₩ 5,956,651 ₩ 85,445,992 ₩ -
Corp. Limited

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

5. Non-Controlling Interests, Continued

Financial position and financial performance as at and for the years ended December 31, 2023 and
2022, are as follows:

(In thousands of Korean won)

2023
PAN Orion Orion Food Orion Food Orion Food
Orion Food
Corp. (Shanghai) (Guangzhou) (Shen Yang)
Co., Ltd.
Subsidiary Limited Co., Ltd. Co., Ltd. Co., Ltd.
Current assets \ 578,201,343 \ 343,805,367 \ 51,413,351 \ 38,746,603 \ 29,356,326
Non-current assets 330,044,692 314,610,612 165,910,019 159,244,611 144,384,043
Current liabilities 4,129,932 127,745,223 19,204,776 13,801,602 7,716,416
Non-current liabilities - 28,725,169 17,016,427 16,162,947 13,121,855
Equity 904,116,103 501,945,587 181,102,167 168,026,665 152,902,098
Revenue 272,719,005 1,171,643,098 216,871,354 134,125,211 82,842,540
Profit for the year 282,121,035 130,247,238 17,470,967 12,904,316 9,385,642
Total comprehensive
income 282,478,406 130,247,238 17,470,967 12,904,316 9,385,642

(In thousands of Korean won)

2022
PAN Orion Orion Food Orion Food Orion Food
Orion Food
Corp. (Shanghai) (Guangzhou) (Shen Yang)
Co., Ltd.
Subsidiary Limited Co., Ltd. Co., Ltd. Co., Ltd.
Current assets \ 313,533,586 \ 444,187,130 \ 68,258,993 \ 31,498,966 \ 13,659,767
Non-current assets 346,333,413 343,259,661 172,069,373 173,293,874 154,507,959
Current liabilities 4,123,380 167,101,535 25,853,118 12,897,087 11,593,793
Non-current liabilities 1,882 31,886,604 17,432,663 16,329,278 12,408,536
Equity 655,741,737 588,458,652 197,042,585 175,566,475 144,165,397
Revenue 347,838,384 1,265,188,584 220,316,305 150,347,421 105,506,023
Profit for the year 345,217,773 134,612,268 16,769,917 11,859,223 10,874,353
Total comprehensive
income 352,101,363 134,612,268 16,769,917 11,859,223 10,874,353

The Company owns 95.15% shares of PAN Orion Corp. Limited. PAN Orion Corp. Limited owns
100% shares of 7 companies including Orion Food Co., Ltd. In addition to the above significant
subsidiaries, 3 companies including LangFang Green Eco Packaging Co., Ltd are not indicated
because their non-controlling interests are not material.

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

5. Non-Controlling Interests, Continued

Cash flow:

(In thousands of Korean won)

2023
PAN Orion Orion Food Orion Food Orion Food
Orion Food
Corp. (Shanghai) (Guangzhou) (Shen Yang)
Co., Ltd.1
Subsidiary Limited1 Co., Ltd. Co., Ltd. Co., Ltd.
Cash flows from
operating activities \ 252,652,531 \ 133,198,974 \ 24,753,956 \ 28,715,251 \ 15,748,027
Cash flows from
investing activities (405,170,415) (4,425,054) (10,395,908) (1,050,077) (436,525)
Cash flows from
financing activities (8,707) (220,493,304) (33,045,546) (20,011,228) -
Effect of exchange
rate fluctuations on
cash held 2,233,869 692,702 172,014 (211,784) (302,866)
Net increase
(decrease) in cash
and cash equivalents (150,292,722) (91,026,682) (18,515,484) 7,442,162 15,008,636

1 Summarized financial information of each company is based on its separate financial statements.

(In thousands of Korean won)

2022
PAN Orion Orion Food Orion Food Orion Food
Orion Food
Corp. (Shanghai) (Guangzhou) (Shen Yang)
Co., Ltd.1
Subsidiary Limited1 Co., Ltd. Co., Ltd. Co., Ltd.
Cash flows from
operating activities \ 310,147,386 \ 238,811,882 \ 33,959,189 \ 25,953,448 \ 30,031,036
Cash flows from
investing activities (164,757,877) (3,237,614) 36,134,761 (324,009) 34,063
Cash flows from
financing activities (88,002) (162,598,345) (147,493,367) (39,827,304) (34,099,460)
Effect of exchange
rate fluctuations on
cash held (8,052,467) (9,976,825) 765,250 (179,652) (64,395)
Net increase
(decrease) in cash
and cash equivalents 137,249,040 62,999,098 (76,634,167) (14,377,517) (4,098,756)

1 Summarized financial information of each company is based on its separate financial statements.

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

6. Operating Segments

The Group has a single confectionaries segment which is the Group’s strategic holdings segment unit.
The Group’s CEO reviews internal management reports on at least a quarterly basis.

Segment sales for the years ended December 31, 2023 and 2022, are as follows:

(In thousands of Korean won) 2023

Consolidated
Confectioneries Elimination
Total
Total segment sales ₩ 3,700,295,540 ₩ (787,937,489) ₩ 2,912,358,051
Less: Inter segment sales (787,937,489) 787,937,489 -
External sales 2,912,358,051 - 2,912,358,051
Depreciation and others 1 156,025,310 1,166,661 157,191,971
Operating profit 494,144,927 (1,753,777) 492,391,150

1
Includes depreciation of property, plant and equipment and intangible assets, investment property,
and the right-of-use assets.

(In thousands of Korean won) 2022

Consolidated
Confectioneries Elimination
Total
Total segment sales ₩ 3,777,341,079 ₩ (904,094,308) ₩ 2,873,246,771
Less: Inter segment sales (904,094,308) 904,094,308 -
External sales 2,873,246,771 - 2,873,246,771
1
Depreciation and others 161,762,216 (108,382) 161,653,834
Operating profit 464,630,322 2,024,181 466,654,503

1
Includes depreciation of property, plant and equipment and intangible assets, investment property,
and the right-of-use assets.

Segment assets and liabilities as at December 31, 2023 and 2022, are as follows:

(In thousands of Korean won) 2023

Consolidated
Confectioneries Elimination
Total
Total assets ₩ 4,247,631,219 ₩ (726,246,091) ₩ 3,521,385,128
Total liabilities 536,763,963 29,144,215 565,908,178
Investments in joint venturers 60,796,084 (27,695,953) 33,100,131
1
Increase of non-current assets (1,589,355) 832,259 (757,096)

1
Financial assets, goodwill and deferred tax assets have been excluded from non-current assets
above.

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

6. Operating Segments, Continued

(In thousands of Korean won) 2022

Consolidated
Confectioneries Elimination
Total
Total assets ₩ 4,074,828,451 ₩ (703,144,537) ₩ 3,371,683,914
Total liabilities 697,590,283 34,864,799 732,455,082
Investments in joint venturers 60,892,766 (28,424,931) 32,467,835
1
Increase of non-current assets (81,796,957) 1,669,448 (80,127,509)

1
Financial assets, goodwill and deferred tax assets have been excluded from non-current assets above.

The Group analyses and categorizes its revenue and non-financial assets according to geographical
locations. The information on revenue from each segment is specified based on the regions where the
related revenue is earned and the information on non-financial assets from each segment is based on
where the listed assets are located.

Information on reginal sales for the years ended December 31, 2023 and 2022, is as follows:

(In thousands of Korean won) 2023 2022

Domestic ₩ 1,035,760,579 ₩ 907,587,912

China 1,172,905,549 1,268,207,782
Other 703,691,923 697,451,077
Total ₩ 2,912,358,051 ₩ 2,873,246,771

Information on reginal non-current assets as a December 31, 2023 and 2022, is as follows:

(In thousands of Korean won) 2023 2022

Domestic ₩ 698,901,388 ₩ 670,195,325

China 754,231,665 813,406,554
Other 380,677,420 350,965,689
Total ₩ 1,833,810,473 ₩ 1,834,567,568

See Note 29 for detailed information on revenues of the Group for the years ended December 31, 2023
and 2022.

There is no main customer who contributes more than 10% of the Group’s revenues for the years ended
December 31, 2023 and 2022.

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

7. Property, Plant and Equipment

Changes in property, plant and equipment for the years ended December 31, 2023 and 2022 are as follows:

(In thousands of Korean won) 2023

Construction
Land Buildings Structures Machinery Others in-progress Total
Acquisition Cost
Balance at January 1, 2023 \ 173,925,095 \ 897,036,933 \ 26,606,460 \ 1,661,693,998 \ 165,636,546 \ 40,748,415 \ 2,965,647,447
Additions - 551,725 150,005 6,472,840 7,021,719 147,418,639 161,614,928
Disposals (105,639) (3,246,537) (898,057) (28,320,727) (8,439,509) (11,200) (41,021,669)
Transfers - 5,566,341 3,175,601 89,646,459 7,187,643 (105,576,044) -
Others 1 (233,563) (13,707,145) (1,788,472) (15,933,444) 1,777,630 (1,312,860) (31,197,854)
Balance at December 31, 2023 \ 173,585,893 \ 886,201,317 \ 27,245,537 \ 1,713,559,126 \ 173,184,029 \ 81,266,950 \ 3,055,042,852
Accumulated depreciation and impairment
Balance at January 1, 2023 \ - \ (211,344,566) \ (14,957,495) \ (965,857,063) \ (105,906,289) \ - \ (1,298,065,413)
Depreciation - (23,140,303) (1,067,681) (102,622,654) (13,450,885) - (140,281,523)
Disposals - 891,470 505,230 22,339,986 7,841,132 - 31,577,818
Others 1 - 3,099,168 365,120 6,081,274 566,681 - 10,112,243
Balance at December 31, 2023 \ - \ (230,494,231) \ (15,154,826) \ (1,040,058,457) \ (110,949,361) \ - \ (1,396,656,875)
Book amount
Balance at January 1, 2023 \ 173,925,095 \ 685,692,367 \ 11,648,965 \ 695,836,935 \ 59,730,257 \ 40,748,415 \ 1,667,582,034
Balance at December 31, 2023 \ 173,585,893 \ 655,707,086 \ 12,090,711 \ 673,500,669 \ 62,234,668 \ 81,266,950 \ 1,658,385,977

1
Others mainly include fluctuation due to foreign currency translation of foreign operations.

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

7. Property, Plant and Equipment, Continued

(In thousands of Korean won) 2022

Construction
Land Buildings Structures Machinery Others in-progress Total
Acquisition Cost
Balance at January 1, 2022 \ 202,968,206 \ 856,043,713 \ 18,282,016 \ 1,654,244,741 \ 162,958,983 \ 73,217,165 \ 2,967,714,824
Additions 7,534 1,036,043 108,140 9,240,999 5,521,315 76,885,519 92,799,550
Disposals (836,405) (841,500) - (29,910,471) (7,083,778) (99,176) (38,771,330)
Transferred to investment
property (28,319,494) (971,761) - - - - (29,291,255)
Transfers - 60,115,900 9,131,350 46,201,461 4,575,069 (120,023,780) -
Others 1 105,254 (18,345,462) (915,046) (18,082,732) (335,043) 10,768,687 (26,804,342)
Balance at December 31, 2022 \ 173,925,095 \ 897,036,933 \ 26,606,460 \ 1,661,693,998 \ 165,636,546 \ 40,748,415 \ 2,965,647,447
Accumulated depreciation and impairment
Balance at January 1, 2022 \ - \ (190,982,559) \ (13,842,352) \ (890,099,343) \ (99,073,845) \ - \ (1,193,998,099)
Depreciation - (23,899,079) (1,084,350) (105,735,449) (13,593,502) - (144,312,380)
Disposals - 225,437 - 20,991,500 6,103,027 - 27,319,964
Transferred to investment
property - 100,112 - - - - 100,112
Others 1 - 3,211,523 (30,793) 8,986,229 658,031 - 12,824,990
Balance at December 31, 2022 \ - \ (211,344,566) \ (14,957,495) \ (965,857,063) \ (105,906,289) \ - \ (1,298,065,413)
Book amount
Balance at January 1, 2022 \ 202,968,206 \ 665,061,154 \ 4,439,664 \ 764,145,398 \ 63,885,138 \ 73,217,165 \ 1,773,716,725
Balance at December 31, 2022 \ 173,925,095 \ 685,692,367 \ 11,648,965 \ 695,836,935 \ 59,730,257 \ 40,748,415 \ 1,667,582,034

1
Others mainly include fluctuation due to foreign currency translation of foreign operations.

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

7. Property, Plant and Equipment, Continued

Borrowing costs of \ 478,798 thousand in relation to the completion of construction, were capitalized
as part of the cost of qualifying assets for the year ended December 31, 2023. The capitalization rates
were 7.94% for the years ended December 31, 2023.

As at December 31, 2023, the Group has made purchase agreements with respect to buildings,
machinery and equipment and others and it is expected to spend \ 37,329 million (2022 : \ 58,709
million) in the future.

As at December 31, 2023, the Group has comprehensive property insurance coverage on the Group’s
inventories, property, plant and equipment. In addition, as at December 31, 2023, the Group maintains
insurance policies covering loss and liability arising from gas accidents, products, directors’ and officers’
liability and automobile accidents.

8. Intangible Assets

Changes in intangible assets for the years ended December 31, 2023 and 2022, are as follows:

(In thousands of Korean won) 2023

Industrial Other
Rights to property intangible Construction
use facility rights assets in-progress Total
Acquisition Cost
Balance at January 1, 2023 \ 17,468,965 \ 23,050,252 \ 29,360,868 \ 831,558 \ 70,711,643
Additions - - 230,730 2,433,996 2,664,726
Disposals (116,588) (15) (1,522,532) (132,118) (1,771,253)
Transfers 442,337 346,233 1,281,863 (2,070,433) -
1
Others (2,739) (3,957) (37,860) (4,814) (49,370)
Balance at December 31,
2023 \ 17,791,975 \ 23,392,513 \ 29,313,069 \ 1,058,189 \ 71,555,746
Accumulated amortization and impairment
Balance at January 1, 2023 \ (1,528,421) \ (18,775,859) \ (19,251,890) \ - \ (39,556,170)
Amortization - (995,831) (2,451,845) - (3,447,676)
Disposals - - 1,289,269 - 1,289,269
Others1 709 3,923 65,753 - 70,385
Balance at December 31,
2023 \ (1,527,712) \ (19,767,767) \ (20,348,713) \ - \ (41,644,192)
Book amount
Balance at January 1, 2023 \ 15,940,544 \ 4,274,393 \ 10,108,978 \ 831,558 \ 31,155,473
Balance at December 31,
2023 \ 16,264,263 \ 3,624,746 \ 8,964,356 \ 1,058,189 \ 29,911,554

1
Others mainly include fluctuation due to foreign currency translation of foreign operations.

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

8. Intangible Assets, Continued

(In thousands of Korean won) 2022

Industrial Other
Rights to property intangible Construction
use facility rights assets in-progress Total
Acquisition Cost
Balance at January 1, 2022 \ 18,106,497 \ 22,601,839 \ 26,579,150 \ 2,233,169 \ 69,520,655
Additions - 1,432 77,272 5,575,109 5,653,813
Disposals (3,871,646) - (8,150) - (3,879,796)
Transfers 3,248,577 478,766 3,282,751 (7,024,124) (14,030)
1
Others (14,463) (31,785) (570,155) 47,404 (568,999)
Balance at December 31,
2022 \ 17,468,965 \ 23,050,252 \ 29,360,868 \ 831,558 \ 70,711,643
Accumulated amortization and impairment
Balance at January 1, 2022 \ (2,432,914) \ (17,727,135) \ (16,211,128) \ - \ (36,371,177)
Amortization - (1,074,560) (3,437,743) - (4,512,303)
Disposals 898,800 - 8,150 - 906,950
Others1 5,693 25,836 388,831 - 420,360
Balance at December 31,
2022 \ (1,528,421) \ (18,775,859) \ (19,251,890) \ - \ (39,556,170)
Book amount
Balance at January 1, 2022 \ 15,673,583 \ 4,874,704 \ 10,368,022 \ 2,233,169 \ 33,149,478
Balance at December 31,
2022 \ 15,940,544 \ 4,274,393 \ 10,108,978 \ 831,558 \ 31,155,473

1
Others mainly include fluctuation due to foreign currency translation of foreign operations.

As at December 31, 2023, the Group has made purchase agreements with respect to other intangible
asset and it is expected to spend \ 27,611 million (2022 : \ 327 million) in the future.

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

9. Goodwill

Changes in goodwill for the years ended December 31, 2023 and 2022, are as follows:

(In thousands of Korean won) 2023 2022

Balance at beginning of year ₩ 23,886,984 ₩ 24,193,863

Fluctuations due to foreign currency translation (38,201) (306,879)
Balance at end of year ₩ 23,848,783 ₩ 23,886,984

Impairment test for goodwill

Goodwill as at December 31, 2023 and 2022, are as follows:

(In thousands of Korean won)

CGUs 2023 2022 Acquisitor Description
Transferred when Orion Snack
Orion Corp. \ 12,335,100 \ 12,335,100 Orion Corp. International Corp. was
merged into Orion Corp.
Acquired in a business
LangFang Green Eco Orion Food
11,513,683 11,551,884 combination with LANGFANG
Packaging Co., Ltd.1 Co., Ltd.
IPACK Co., LTD.
\ 23,848,783 \ 23,886,984

1
The amount represents goodwill arising from business combination with STELLA WAY LIMITED
(including LANGFANG IPACK Co., Ltd) and the CGU was reallocated to LANGFANG IPACK Co., Ltd
due to liquidation of STELLA WAY LIMITED prior to the year ended December 31, 2021

The Group assess goodwill for impairment at the end of each reporting period. As a result of performing
the annual impairment test, the Group concluded that the book amount of cash generating units did not
exceed the recoverable amount.

The recoverable amount of the CGU is based on its value in use. The value in use is determined by
discounting the future pre-tax cash flows which were based on the estimated financial budget for the
next five years and the financial budget is confirmed by the management. The expected growth rate of
sale for the next five years and the permanent growth rate for the years after the next five years do not
exceed the long-term average growth rate of the industry that the cash generating unit belongs to. The
assumption of constant growth rate is used in order to calculate the expected future cash flow.

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

9. Goodwill, Continued

As at December 31, 2023 and 2022, the key assumptions used for calculating the cash generating units
which significant goodwill was allocated to, are as follows:

2023
Gross Profit Growth rate Permanent
Margin1 of sale2 growth rate3 Pre-tax rate4
Orion Corp. 40.56% 3.61% 1.00% 10.37%
LangFang Green Eco
Packaging Co. Ltd 16.58% 2.23% 1.50% 12.47%

2022
Gross Profit Growth rate Permanent
Margin1 of sale2 growth rate3 Pre-tax rate4
Orion Corp. 40.68% 2.38% 1.00% 12.03%
LangFang Green Eco
Packaging Co. Ltd 16.90% 3.90% 1.50% 12.24%

1
This is the average gross profit margin for the next five years.
2
This is the average growth rate of sale for the next five years.

3
This is the permanent growth rate expected after 5 years later.

4
This is the pre-tax rate applied to the expected future cash flows.

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

10. Investment Property

Changes in investment property for the years ended December 31, 2023 and 2022, are as follows:

(In thousands of Korean won) 2023

Land Buildings Total
Acquisition Cost
Balance at January 1, 2023 \ 28,319,494 \ 8,172,462 \ 36,491,956
1
Others - (27,026) (27,026)
Balance at December 31, 2023 \ 28,319,494 \ 8,145,436 \ 36,464,930
Accumulated depreciation and impairment
Balance at January 1, 2023 \ - \ (923,703) \ (923,703)
Depreciation - (166,011) (166,011)
Others1 - 6,101 6,101
Balance at December 31, 2023 \ - \ (1,083,613) \ (1,083,613)
Book amount
Balance at January 1, 2023 \ 28,319,494 \ 7,248,759 \ 35,568,253
Balance at December 31, 2023 \ 28,319,494 \ 7,061,823 \ 35,381,317

1
Others mainly include fluctuation due to foreign currency translation of foreign operations.

(In thousands of Korean won) 2022

Land Buildings Total
Acquisition Cost
Balance at January 1, 2022 \ - \ 7,444,739 \ 7,444,739
Transfer from property, plant and
equipment 28,319,494 971,761 29,291,255
1
Others - (244,038) (244,038)
Balance at December 31, 2022 \ 28,319,494 \ 8,172,462 \ 36,491,956
Accumulated depreciation and impairment
Balance at January 1, 2022 \ - \ (692,506) \ (692,506)
Depreciation - (162,914) (162,914)
Transfer from property, plant and
equipment - (100,112) (100,112)
1
Others - 31,829 31,829
Balance at December 31, 2022 \ - \ (923,703) \ (923,703)
Book amount
Balance at January 1, 2022 \ - \ 6,752,233 \ 6,752,233
Balance at December 31, 2022 \ 28,319,494 \ 7,248,759 \ 35,568,253

1
Others mainly include fluctuation due to foreign currency translation of foreign operations.

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

10. Investment Property, Continued

Income or expense related to the investment property for the years ended December 31, 2023, and
2022, are as follows:

(In thousands of Korean won) 2023 2022

Rental income \ 4,291,636 \ 941,721

Rental cost1 166,011 162,914

1
Rental cost includes depreciation of investment property.

As at December 31, 2023, total fair value of investment property is \ 95,485 million (2022 : \ 95,521
million).

As of December 31, 2023, the Group’s investment properties are insured with Hyundai Marine & Fire
Insurance Co., Ltd. to prepare for losses due to fire, etc. In addition to the above, the Group also insures
directors’ and officers’ liability insurance.

Operating lease

The investment properties are leased to tenants under operating lease with rental payable monthly.
There are no other variable lease payments that depend on an index or rate.

The future minimum lease payments expected to be received in relation to the above operating lease
agreement for investment property as at December 31, 2023, and 2022, are as follows:

(In thousands of Korean won) 2023 2022

Within one year \ 4,473,826 \ 4,475,336

Later than 1 year and Within 5 years 17,895,305 17,901,346
Later than 5 years 184,697,817 188,717,619
\ 207,066,948 \ 211,094,301

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

11. Leases

Set out below is information for leases when the Group is a lessee.

(a) Amounts recognized in the consolidated statement of financial position

The consolidated statement of financial position shows the following amounts relating to leases:

(In thousands of Korean won) 2023 2022

Right-of-use assets
Properties ₩ 59,129,729 ₩ 59,862,676
Machinery 2,257 15,850
Vehicles 4,172,339 2,140,031
₩ 63,304,325 ₩ 62,018,557

(In thousands of Korean won) 2023 2022

Lease liabilities
Current ₩ 10,499,671 ₩ 10,337,604
Non-current 14,296,468 13,780,676
₩ 24,796,139 ₩ 24,118,280

Additions to the right-of-use assets in 2023 is ￦20,941 million (2022: ￦8,742 million).

(b) Amounts recognized in the consolidated statement of profit or loss

The consolidated statement of profit or loss shows the following amounts relating to leases:

(In thousands of Korean won) 2023 2022

Depreciation of right-of-use assets

Properties ₩ 11,428,290 ₩ 11,085,165
Machinery 13,794 14,344
Vehicles 1,854,677 1,566,730
₩ 13,296,761 ₩ 12,666,239
Interest expense on lease liabilities
(recognized in finance cost) ₩ 1,033,508 819,898
Expense relating to short-term leases
(recognized in cost of goods sold and administrative
expenses) 18,385,485 17,519,489
Expense relating to leases of low-value assets
excluding short-term leases of low-value assets
(recognized in cost of goods sold and administrative
expenses) 642,276 704,533
Expenses relating to variable lease payments not
included in the measurement of lease liabilities.
(recognized in cost of goods sold and administrative
expenses) 1,192,877 1,343,652

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

11. Leases, Continued

The total cash outflow for leases in 2023 is ￦ 33,310 million (2022: ￦ 31,566 million).

Movements in carrying amounts of right-of-use assets for the years ended December 31, 2023 and
2022 are as follows:

(In thousands of Korean won)

2023
Beginning Ending
Increase Decrease Depreciation Others1
Balance Balance
Property ₩ 59,862,676 ₩ 16,874,229 ₩ (5,922,164) ₩ (11,428,290) ₩ (256,722) ₩ 59,129,729
Machinery 15,850 - - (13,794) 201 2,257
Vehicles 2,140,031 4,066,342 (173,739) (1,854,677) (5,618) 4,172,339
₩ 62,018,557 ₩ 20,940,571 ₩ (6,095,903) ₩ (13,296,761) ₩ (262,139) ₩ 63,304,325

1
Fluctuations due to foreign currency translation of foreign operations are included in others.

(In thousands of Korean won)

2022
Beginning Ending
Increase Decrease Depreciation Others1
Balance Balance
Property ₩ 62,125,804 ₩ 10,350,307 ₩ (876,783) ₩ (11,085,165) ₩ (651,487) ₩ 59,862,676
Machinery 30,218 - - (14,344) (24) 15,850
Vehicles 2,274,897 1,523,909 (74,972) (1,566,730) (17,073) 2,140,031
₩ 64,430,919 ₩ 11,874,216 ₩ (951,755) ₩ (12,666,239) ₩ (668,584) ₩ 62,018,557

1 Fluctuations due to foreign currency translation of foreign operations are included in others.

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

12. Investments in Joint Ventures and Associates

Investments in joint ventures as at December 31, 2023 and 2022, are summarized as follows:

(In thousands of Korean won) 2023 2022

Percentage Percentage
Location of ownership Book value of ownership Book value
Delfi-Orion Pte Ltd Singapore 50.00% ₩ 861,186 50.00% ₩ 931,909
Orion Nonghyup Agri,
Domestic
Inc.1 50.00% 32,238,945 49.00% 31,535,926
₩ 33,100,131 ₩ 32,467,835

1
According to an agreement that NongHyup Agribusiness Group inc. sells 1% shares of total issued
shares to the Company on January 12, 2023, which is the date after five years from the approval date
of plant usage (January 12, 2018), Company acquired 622,000 shares equivalent to 1% stake in Orion
Nonghyup Agri, Inc, which is joint venture, resulting in a 50% stake as of the end of the current period.

The Group concluded to classify them as joint venture since all the joint arrangements which the Group
has the joint control of are structured through a separate vehicle and the parties that have joint control
of the arrangement have rights to the net assets of the arrangements.

The reporting date of the financial statements of joint ventures which are used in order to prepare the
consolidated financial statements is December 31, 2023.

Changes in investments in joint ventures for the years ended December 31, 2023 and 2022, are
as follows:

(In thousands of Korean won)

2023
Balance at Share of profit(loss) Balance at
Name beginning of year of joint ventures Others1 end of year
Delfi-Orion Pte Ltd. \ 931,909 \ (88,054) \ 17,331 \ 861,186
Orion Nonghyup
31,535,926 657,394 45,625 32,238,945
Agri, Inc.
\ 32,467,835 \ 569,340 \ 62,956 \ 33,100,131

1
Other mainly include fluctuation due to foreign currency translation of foreign joint ventures.

(In thousands of Korean won)

2022
Balance at Share of profit(loss) Balance at
Name beginning of year of joint ventures Others1 end of year
Delfi-Orion Pte Ltd. \ 791,336 \ 87,643 \ 52,930 \ 931,909
Orion Nonghyup
30,863,807 519,278 152,841 31,535,926
Agri, Inc.
\ 31,655,143 \ 606,921 \ 205,771 \ 32,467,835

1
Other mainly include fluctuation due to foreign currency translation of foreign joint ventures.

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

12. Investments in Joint Ventures and Associates, Continued

Summary of financial information of joint ventures is as follows:

(In thousands of Korean

won) 2023
Total
Profit(Loss) comprehe-
Assets Liabilities Equity Revenue
for the year nsive
income
Delfi-Orion Pte
Ltd. ₩ 3,338,155 ₩ 1,615,782 ₩ 1,722,373 ₩ 4,036,328 ₩ (176,108) ₩ (176,108)
Orion Nonghyup
Agri, Inc. 71,430,638 6,740,358 64,690,280 46,736,216 1,309,579 1,400,829

Financial information of 2023 represents financial position as at December 31, 2023 and financial
performance for the year ended December 31, 2023.

(In thousands of Korean

won) 2022
Total
Profit(Loss) comprehe-
Assets Liabilities Equity Revenue
for the year nsive
income
Delfi-Orion Pte
Ltd. ₩ 2,677,742 ₩ 813,924 ₩ 1,863,818 ₩ 3,899,081 ₩ 124,124 ₩ 124,124
Orion Nonghyup
Agri, Inc. 72,154,187 8,864,736 63,289,451 45,292,702 1,050,309 1,355,989

Financial information of 2022 represents financial position as at December 31, 2022 and financial
performance for the year ended December 31, 2022.

The details of investments in joint ventures as at December 31, 2023 and 2022, are as follows:

(In thousands of Korean won)

2023
Percentage of Group’s share Book
Name Net assets
ownership (%) of net assets amount
Delfi-Orion Pte Ltd. \ 1,722,373 50.00 \ 861,186 \ 861,186
Orion Nonghyup
64,690,280 50.00 32,345,140 32,238,945
Agri, Inc.

(In thousands of Korean won)

2022
Percentage of Group’s share Book
Name Net assets
ownership (%) of net assets amount
Delfi-Orion Pte Ltd. \ 1,863,818 50.00 \ 931,909 \ 931,909
Orion Nonghyup
63,289,451 49.00 31,011,831 31,535,926
Agri, Inc.

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

13. Financial Assets at Fair Value Through Profit or Loss and Financial Assets at Fair Value
Through Other Comprehensive Income

(a) Financial assets at fair value through profit or loss

There are no financial assets at fair value through profit or loss as at December 31, 2023 and 2022.

Amounts recognized in profit or loss related to financial assets at fair value through profit or loss for the
year ended December 31, 2022, are as follows:

(In thousands of Korean won) 2022

Gain on disposal of financial assets at fair

value through profit or loss \ 588,991

(b) Financial assets at fair value through other comprehensive income

Details of financial assets at fair value through other comprehensive income as at December 31, 2023
and 2022, are summarized as follows:

(In thousands of Korean won)

2023 2022

Book amount Fair value Book amount Fair value

Listed stock
Taokaenoi Food &
Marketing Public Company
Limited \ -\ -\ 15,171,169 \ 15,171,169

- - 15,171,169 15,171,169

Unlisted stock
Shandong Lukang
Biotechnology
Development Co., Ltd. 5,425,867 5,425,867 5,443,870 5,443,870

5,425,867 5,425,867 5,443,870 5,443,870

\ 5,425,867 \ 5,425,867 \ 20,615,039 \ 20,615,039

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

14. Other Assets

Other assets as at December 31, 2023 and 2022, are summarized as follows:

(In thousands of Korean won) 2023 2022

Current Non-Current Current Non-Current

Prepayments ₩ 7,284,979 ₩ - ₩ 6,278,898 ₩ -

Prepaid expenses 4,993,732 12,003,235 5,044,260 5,284,692
Prepaid value added tax 9,982,964 - 4,065,419 -
Others 670,919 1,718,030 654,398 490,725
₩ 22,932,594 ₩ 13,721,265 ₩ 16,042,975 ₩ 5,775,417

15. Inventories

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

(In thousands of Korean won)

2023 2022
Amount Provision Amount Provision
Carrying Carrying
before write- for write- before write- for write-
amount amount
down down down down

Merchandise ₩ 2,415,860 ₩ (154,408) ₩ 2,261,452 ₩ 5,266,086 ₩ (162,970) ₩ 5,103,116

Finished goods 97,480,973 (21,386) 97,459,587 81,234,965 (6,756) 81,228,209
Work-in-progress 9,543,481 - 9,543,481 8,477,513 - 8,477,513
Raw materials 120,867,252 - 120,867,252 110,521,926 - 110,521,926
Supplies 2,069,500 - 2,069,500 1,384,993 - 1,384,993
Raw materials-
in-transit 27,535,156 - 27,535,156 28,167,485 - 28,167,485
₩ 259,912,222 ₩ (175,794) ₩ 259,736,428 ₩ 235,052,968 ₩ (169,726) ₩ 234,883,242

The amount of inventories recognized as an expense and included as part of sales during 2023 is
\ 1,309,077 million (2022: \ 1,310,632 million)

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

16. Trade and Other Receivables

Trade receivables as at December 31, 2023 and 2022, are summarized as follows:

(In thousands of Korean won) 2023 2022

Current Non-current Current Non-current

Trade receivables ₩ 196,223,370 ₩ - ₩ 207,903,127 ₩ -

Allowance for bad debts (5,194,370) - (4,799,908) -
₩ 191,029,000 ₩ - ₩ 203,103,219 ₩ -

Other financial assets as at December 31, 2023 and 2022, are summarized as follows:

(In thousands of Korean won) 2023 2022

Current Non-current Current Non-current

Other receivables ₩ 8,788,772 ₩ - ₩ 11,286,764 ₩ -

Allowance for bad debts (15,507) - (10,961) -
Accrued income 10,588,697 - 7,634,399 -
Operation deposits 131,940 - 179,850 -
Rental deposits 1,949,180 19,057,526 1,956,770 19,300,198
Loans 36,403,092 - - -
₩ 57,846,174 ₩ 19,057,526 ₩ 21,046,822 ₩ 19,300,198

Trade receivables and other financial assets are financial instruments incurred in the ordinary course
of business and consist of trade receivables, other receivables and others. The Group holds the trade
receivables and other financial assets with the objective to collect the contractual cash flows and,
therefore, measures them subsequently at amortised cost. Details about the Group’s impairment
policies and the calculation of the loss allowance are provided in Note 36.

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

17. Cash and Cash Equivalents, and Restricted Deposits

Cash and cash equivalents as of December 31, 2023 and 2022, are summarized as follows:

(In thousands of Korean won) 2023 2022

Cash on hand \ 50,748 \ 32,193

Demand deposits 365,798,922 609,690,870
\ 365,849,670 \ 609,723,063

Deposits which are restricted in use as at December 31, 2023 and 2022, are summarized as follows:

(In thousands of Korean won) 2023 2022 Restriction

Long-term deposits \ 2,000 \ 2,000 Deposit for checking account

Short-term deposits 5,000,000 5,000,000 Cooperation loans
\ 5,002,000 \ 5,002,000

18. Capital stock

Details of capital stock as at December 31, 2023 and 2022 are as follows:

There is no change in share capital for the year ended December 31, 2023 and 2022.

(In Korean won) 2023 2022

Number of ordinary shares: (in shares)

- Authorized 480,000,000 480,000,000
- Issued 39,536,132 39,536,132
Capital stock ₩ 19,768,066,000 ₩ 19,768,066,000

Per value per share ₩ 500 ₩ 500

According to its Articles of Incorporation, cumulative participating preferred shares can be issued as
non-voting registered shares for up to 240,000,000 shares with dividend rate of more than 5% preferred
dividend rates based on the face amount with the approval of the Board of Directors. As at December
31, 2023, no preferred shares have been issued.

According to its Articles of Incorporation, the Company is allowed to grant stock options within 15/100
of the total number of shares issued with the approval from the shareholders and within 3/100 of the
total number of shares issued with the approval of the Board of Directors to its employees who
contribute or are able to shares to the performance of the Company.

According to its Articles of Incorporation, the Company can issue convertible bonds and bonds with
stock warrants up to the face value of ₩ 300 billion with the approval from the Board of Directors. As at
December 31, 2023, no convertible bonds or bonds with stock warrants have been issued.

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

19. Treasury Shares

The Group has 7,344 treasury shares as at December 31, 2023 with the acquisition cost of ₩ 604,361
thousand, which were odd-lot shares acquired at the market price resulted from spin-off. The Group
intends to dispose of the treasury shares in the future depending on the market conditions.

20. Other Capital

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

(In thousands of Korean won) 2023 2022

Changes from equity transactions ₩ 624,451,038 ₩ 624,451,038

Others (2,071,744) (2,071,744)
Exchange differences on translating foreign
operations 62,409,902 94,367,601
Share of other comprehensive income of joint
ventures 66,950 49,619
Gain (loss) of financial assets at fair value
through other comprehensive income - 1,373,650
Changes in percentage of ownership due to
acquisition of subsidiaries 26,323 26,323
₩ 684,882,469 ₩ 718,196,487

21. Retained Earnings

Details of retained earnings as at December 31, 2023 and 2022, are as follows:

(In thousands of Korean won) 2023 2022

Legal reserves ₩ 56,370,289 ₩ 54,335,819

Discretionary reserves 275,905,675 200,932,492
Retained earnings before appropriation 1,227,905,260 962,982,146
₩ 1,560,181,224 ₩ 1,218,250,457

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

22. Earnings per Share

(a) Basic earnings per share

(In Korean won, except share information) 2023 2022

Profit for the year attributable to owners of the

Parent Company ₩ 376,646,552,736 ₩ 392,351,423,524
Weighted-average number of ordinary shares
(In shares) 39,528,788 39,528,788
Basic earnings per share ₩ 9,528 ₩ 9,926

Weighted average number of ordinary shares

(In shares) 2023 2022

Beginning balance 39,536,132 39,536,132

Treasury shares (7,344) (7,344)
Weighted average number of ordinary shares 39,528,788 39,528,788

(b) Diluted earnings per share

Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares
outstanding to assume conversion of all dilutive potential ordinary shares. As at December 31, 2023
and 2022, there are no dilutive potential ordinary shares, and basic earnings per share of 2023 and
2022 are identical to diluted earnings per share of 2023 and 2022.

23. Share-based Payments

PAN Orion Corp. Limited, a subsidiary of the Group, has granted share-based payments to the
management and employees of certain entities in the Group of Orion Holdings Co., Ltd, the Parent
Company of the Group, with the approval of the Board of Directors. The entities including the Company,
which received services from the management and employees recognized the share-based payments
and obligation to settle the share-based payment transaction lies with PAN Orion Corp. Limited.

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

23. Share-based Payments, Continued

Details of the contract for share-based payments, which PAN Orion Corp. Limited, a subsidiary of the
Group, granted as at December 31, 2023, are as follows:

(In Hongkong dollars)

Cash-settled share-base
Classification Share-based payments
payments

Granted date October 19, 2020 October 19, 2020

Number of shares initially granted 160,014,000 shares 30,135,667 shares
Number of shares exercised - -
Number of shares cancelled - -
Number of shares as at 160,014,000 shares 30,135,667 shares
December 31, 2023
Exercisable number of shares as at 160,014,000 shares 30,135,667 shares
December 31, 20231
Exercise price HKD 1.31 HKD 1.31
Maturity date October 19, 2030 October 19, 2030
Period of service provided: Period of service provided:
Vesting conditions1
1.5 month 12.5 month

1
Disposal or similar transaction of shares acquired by exercising the option is prohibited during the
period from the effective date and ending on the 180th after the date on which dealings in the first
commence on the HongKong stock Exchange Market.

Details of information used to measure fair value of the share-based payments of PAN Orion Corp.
Limited at granted date, as at December 31, 2023 and 2022, are as follows:

(In Hongkong dollars) 2023

Cash-settled share-base
Classification Share-based payments
payments

Granted date October 19, 2020 October 19, 2020

Fair value as at granted date 0.59 HKD, 0.64 HKD, 1.39 HKD 0.54 HKD
Fair value as at settlement date 0.59 HKD, 0.64 HKD, 1.39 HKD 0.63 HKD
Risk-free rate (%) 3.22 2.60
Applied volatility (%) 32.80 32.76
Model Binomial price model Binomial price model

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

23. Share-based Payments, Continued

(In Hongkong dollars) 2022

Cash-settled share-base
Classification Share-based payments
payments

Granted date October 19, 2020 October 19, 2020

Fair value as at granted date 0.59 HKD, 0.64 HKD, 1.39 HKD 0.54 HKD
Fair value as at settlement date 0.59 HKD, 0.64 HKD, 1.39 HKD 0.58 HKD
Risk-free rate (%) 3.22 2.83
Applied volatility (%) 32.80 33.37
Model Binomial price model Binomial price model

Share-based payments recognized as expenses for the year ended December 31, 2023 amount to
₩ 38 million (2022 : ₩ 27 million)

24. Other Financial Liabilities

Other financial liabilities as at December 31, 2023 and 2022 are summarized as follows:

(In thousands of Korean won)

2023 2022
Current Non-Current Current Non-Current

Other payables ₩ 95,107,076 ₩ 187,774 ₩ 99,451,917 ₩ 191,257

Accrued expenses 67,680,866 9,077 90,602,603 10,528
Leasehold deposit 125,500 76,602 127,500 -
₩ 162,913,442 ₩ 273,453 ₩ 190,182,020 ₩ 201,785

25. Assets and Liabilities related to Contracts with Customers

Details of liabilities related to contracts with customers as at December 31, 2023 and 2022, are as
follows:

(In thousands of Korean won) 2023 2022

Contract liabilities1 ₩ 23,559,930 ₩ 31,444,273

1
The contract liabilities are recognized as other current liabilities in consolidated statements of financial
positions.

Revenue recognized that was included in the contract liability balance at the end of the previous year
amounted to ₩ 31,444 million.

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

26. Borrowings and Debentures

Borrowings and debentures as at December 31, 2023 and 2022, are summarized as follows:

(In thousands of Korean won) 2023 2022

Current Non-Current Current Non-Current

Non-current
Debentures \ - \ - \ 70,000,000 \ -
Less: discount - - (26,075) -
Subtotal - - 69,973,925 -
Current
Short-term borrowing in
Korean won 703,348 - 12,949,122 -
Short-term borrowing in
foreign currency 3,109,396 - 10,958,261 -
Subtotal 3,812,744 - 23,907,383 -
Total \ 3,812,744 \ - \ 93,881,308 \ -

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

(In thousands of Korean won, US dollars, Russian ruble)

Maturity Interest rate (%) 2023 2022

104th 2023-04-23 - \ - \ 70,000,000

Less: current portion of debentures - (70,000,000)
\ - \ -

Short-term borrowings as at December 31, 2023 and 2022, are as follows:

(In thousands of Korean won, US dollars, Russian ruble)

Interest rate
Description (%) 2023 2022

273,483
Usance - \ -\
(USD 215,800)
Kookmin Bank
TERM SOFR 157,551 544,778
Bills bought + 1.39 (USD 122,188.99) (USD 429,873)
Nonghyup Bank Line of credit - - 12,000,000
Hyundai Card Purchasing card 1.44% 703,348 949,122
2,951,845 10,140,000
Hana Bank Line of credit 8.14%
(RUB 200,000,000) (RUB 600,000,000)
\ 3,812,744 \ 23,907,383

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

26. Borrowings and Debentures, Continued

There are no assets provided as collateral for liabilities of the Group as at December 31, 2023 and 2022.

Book amount and fair value of borrowings as at December 31, 2023 and 2022, are as follows:

(In thousands of Korean won)

2023 2022
Book amount Fair value Book amount Fair value

Short-term borrowings \ 3,812,744 \ 3,812,744 \ 93,881,308 \ 93,881,308

The fair value of short-term borrowings equal to their book amounts as the impact of discounting is not
significant.

27. Employee benefits

The Group operates a defined benefit plan and a defined contribution plan as a retirement benefit plan
for employees, and the actuarial evaluation of the defined benefit obligation was performed by qualified
independent actuaries using the projected unit credit method.

The retirement benefit expenses for the years ended December 31, 2023 and 2022, are as follows:

(In thousands of Korean won) 2023 2022

Contribution to defined contribution plans \ 1,282,187 \ 1,183,088

Expenses related to post-employment defined benefit plans 11,856,017 11,455,131
\ 13,138,204 \ 12,638,219

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

27. Employee benefits, Continued

Changes in net defined benefit liability (asset) for the years ended December 31, 2023 and 2022, are
as follows:

(In thousands of Korean won)

Net defined benefit liability
Defined benefit obligation Fair value of plan assets (asset)
2023 2022 2023 2022 2023 2022

Beginning balance \ 95,933,288 \ 100,442,171 \ (98,808,699) \ (98,648,962) \ (2,875,411) \ 1,793,209

Included in profit or loss:
Current service costs 12,269,979 12,234,839 - - 12,269,979 12,234,839
Interest costs (Income) 4,325,255 1,594,195 (4,739,217) (2,373,903) (413,962) (779,708)
16,595,234 13,829,034 (4,739,217) (2,373,903) 11,856,017 11,455,131
Included in other
comprehensive income:
Remeasurements loss
(gain)
- Actuarial loss (gain) arising
from: (1,423,987) (10,620,270) - - (1,423,987) (10,620,270)
Experience adjustment 2,718,295 6,313,522 - - 2,718,295 6,313,522
Demographic
assumptions - 3,840 - - - 3,840
Financial assumptions (4,142,282) (16,937,632) - - (4,142,282) (16,937,632)
- Return on plan assets
excluding interest income - - 24,910 257,788 24,910 257,788
(1,423,987) (10,620,270) 24,910 257,788 (1,399,077) (10,362,482)
Others:
Contributions paid by the
employer - - (16,898,375) (5,735,622) (16,898,375) (5,735,622)
Transferred from a related
party 155,368 735,432 (155,368) (89,336) - 646,096
Transferred to a related
party (572,834) (638,393) 572,834 638,393 - -
Benefits paid (7,636,263) (7,814,686) 5,917,986 7,142,943 (1,718,277) (671,743)
(8,053,729) (7,717,647) (10,562,923) 1,956,378 (18,616,652) (5,761,269)
Ending balance \ 103,050,806 \ 95,933,288 \ (114,085,929) \ (98,808,699) \ (11,035,123) \ (2,875,411)

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

27. Employee benefits, Continued

The components of plan assets as at December 31, 2023 and 2022, are as follows:

(In thousands of Korean won) 2023 2022

Debt securities \ 100,188,446 \ 78,994,462

Others 13,897,483 19,814,237
\ 114,085,929 \ 98,808,699

The principal actuarial assumptions as at December 31, 2023 and 2022, are as follows:

2023 2022

Discount rate 4.03% 5.23%

Future salary growth 2.00% ~ 5.79% 3.00% ~ 7.97%

For the purpose of calculating present value of defined benefit obligation, the Group used the discount
rate determined based on the yield rate of bonds with good ratings which are in line with defined benefit
obligations in terms of currency and maturity.

Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding
other assumptions constant, would have affected the defined benefit obligation by the amounts shown
below:

(In thousands of Korean won) 2023

1% increase 1% decrease

Discount rate \ (5,292,784) \ 5,982,095

Future salary growth 5,998,076 (5,403,649)

The above sensitivity analyses are based on a change in an assumption while holding all other
assumptions constant. The sensitivity of the defined benefit obligation to changes in principal actuarial
assumptions is calculated using the projected unit credit method, the same method applied when
calculating the defined benefit obligations recognized on the consolidated statement of financial position.

The methods and types of assumptions used in preparing the sensitivity analysis did not change
compared to the prior period.

The weighted average duration of the defined benefit obligations is 6.27 years (2022: 6.47 years) as at
December 31, 2023.

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

27. Employee benefits, Continued

The expected maturity analysis of undiscounted pension benefits as at December 31, 2023, is as follows:

(In thousands of Korean won)

Less than 1 Between Between
year 1-2 years 2-5 years Over 5 years Total

Pension benefits \ 10,216,223 \ 9,718,064 \ 62,490,943 \ 176,416,150 \ 258,841,380

Expected contributions to post-employment benefit plans for the year ending December 31, 2024 is
\ 9,661 million.

28. Other Liabilities

Other liabilities as at December 31, 2023 and 2022, are summarized as follows:

(In thousands of Korean won) 2023 2022

Current Non-Current Current Non-Current

Advanced received1 ₩ 23,559,930 ₩ - ₩ 31,444,273 ₩ -

Unearned revenue - 3,360 1,454 -
Provision for warranty 2,735,238 - 1,916,446 -
Withholdings 3,985,508 - 4,993,604 -
Value added tax
14,655,138 - 15,967,854 -
withheld
Others 2,557,274 971,736 249,849 779,726
₩ 47,493,088 ₩ 975,096 ₩ 54,573,480 ₩ 779,726

1
Entire amounts of advances received as at December 31, 2023 and 2022, are contract liabilities
recognized in relation to revenue from contracts with customers.

Changes in provision for warranty for the years ended December 31, 2023 and 2022, are as follows:

(In thousands of Korean won) 2023 2022

Beginning balance ₩ 1,916,446 ₩ 1,937,839

Increase 1,961,659 1,215,122
Decrease (1,142,867) (1,236,515)
Ending balance ₩ 2,735,238 ₩ 1,916,446

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

29. Sales and Cost of Sales

Sales and cost of sales for the years ended December 31, 2023 and 2022, are as follows:

The amounts recognized as revenue for the years ended December 31, 2023 and 2022, are as
follows:

(In thousands of Korean won) 2023 2022

Revenue from contracts with customers ₩ 2,907,797,442 ₩ 2,872,284,717

Revenue from other sources 4,560,609 962,054
₩ 2,912,358,051 ₩ 2,873,246,771

Details of revenue from contracts with customers for the years ended December 31, 2023 and 2022,
are as follows:

(In thousands of Korean won) 2023

Services
Sales of goods Royalty and Other Total

Recognized at a point in time ₩ 2,865,443,392 ₩ - ₩ 3,095,022 ₩ 2,868,538,414

Recognized over time - 13,711 39,245,317 39,259,028
₩ 2,865,443,392 ₩ 13,711 ₩ 42,340,339 ₩ 2,907,797,442

(In thousands of Korean won) 2022

Services
Sales of goods Royalty and Other Total

Recognized at a point in time ₩ 2,815,208,076 ₩ - ₩ 5,338,347 ₩ 2,820,546,423

Recognized over time - 37,022 51,701,272 51,738,294
₩ 2,815,208,076 ₩ 37,022 ₩ 57,039,619 ₩ 2,872,284,717

Details of cost of sales for the years ended December 31, 2023 and 2022, are as follows.

(In thousands of Korean won) 2023 2022

Sale of goods ₩ 1,741,265,280 ₩ 1,725,439,905

Service costs and others 43,681,775 56,639,048
₩ 1,784,947,055 ₩ 1,782,078,953

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

30. Selling Expenses and General and Administrative Expenses

Details of selling expenses for the years ended December 31, 2023 and 2022, are as follows:

(In thousands of Korean won) 2023 2022

Salaries ₩ 171,491,959 ₩ 165,075,183

Retirement benefits 4,614,665 4,865,330
Employee welfare 36,218,033 35,302,217
Travel expenses 6,995,252 5,055,830
Taxes and dues 19,068,111 20,186,316
Rental expenses 13,725,192 16,560,396
Depreciation 8,467,373 8,726,343
Amortization 1,801,349 1,797,483
Advertising expenses 25,707,625 32,359,954
Ordinary development expense 1,216,647 1,039,499
Freight expenses 96,459,385 93,279,434
Commissions 58,804,308 56,846,618
Promotion 9,340,427 8,042,654
Bad debt expenses 428,124 3,926,126
Depreciation of right-of-use assets 5,327,250 4,943,600
Others 22,746,966 24,098,186
₩ 482,412,666 ₩ 482,105,169

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

(In thousands of Korean won) 2023 2022

Salaries ₩ 63,928,445 ₩ 58,637,586

Share-based payments 38,449 27,131
Retirement benefits 5,972,051 5,760,191
Employee welfare 14,490,324 11,280,204
Travel expenses 1,659,816 1,015,196
Taxes and dues 2,954,466 2,411,837
Rental expenses 3,545,117 3,511,113
Depreciation 6,273,893 6,755,841
Amortization 1,627,097 2,696,891
Commissions 35,347,539 35,162,137
Depreciation of right-of-use assets 6,959,252 6,700,291
Others 9,810,731 8,449,729
₩ 152,607,180 ₩ 142,408,147

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

31. Other Income and Other Expenses

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

(In thousands of Korean won) 2023 2022

Other income
Foreign currency transaction gain ₩ 3,543,627 ₩ 1,771,004
Foreign currency translation gain 118,571 460,148
Gain on sale of property, plant and equipment 665,739 3,203,594
Gain on sale of intangible assets 29,829 1,559,304
Reversal of other bad debt expenses 2,460 68,941
Other 3,468,902 4,664,700
₩ 7,829,128 ₩ 11,727,691
Other expenses
Foreign currency transaction loss ₩ (1,078,624) ₩ (1,522,045)
Foreign currency translation loss (757,250) (110,686)
Loss on sale of property, plant and equipment (8,916,977) (7,986,548)
Loss on sale of intangible assets (72) (1,624)
Donation (2,285,898) (2,565,140)
Other bad debt expenses (3,611) (1,013)
Other (1,920,624) (3,239,915)
(14,963,056) (15,426,971)
Net other expense ₩ (7,133,928) ₩ (3,699,280)

32. Finance Income and Costs

Details of finance income and costs for the years ended December 31, 2023 and 2022, are as follows:

(In thousands of Korean won) 2023 2022

Finance income
Interest income ₩ 37,267,740 ₩ 24,891,097
Dividend income - 465,936
Foreign currency transaction gain 1,621,554 3,766,522
Foreign currency translation gain 2,101,524 226,517
Gain on disposal of financial assets at fair value
through profit or loss - 588,991
₩ 40,990,818 ₩ 29,939,063
Finance cost
Interest expense ₩ (3,600,108) ₩ (4,394,395)
Foreign currency transaction loss (2,544,401) (1,961,887)
Foreign currency translation loss (654,964) (416,809)
(6,799,473) (6,773,091)
Net finance income ₩ 34,191,345 ₩ 23,165,972

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

33. Expenses by Nature

Details of expenses by nature for the years ended December 31, 2023 and 2022 are as follows:

(In thousands of Korean won)

2023 2022
Selling, Selling,
general and general and
Cost of sales Total Cost of sales Total
administrative administrative
expense expense
Raw materials and
consumables used ₩ 1,181,476,503 ₩ -₩ 1,181,476,503 ₩ 1,172,675,627 ₩ - ₩ 1,172,675,627
Purchasing
merchandise 138,827,078 - 138,827,078 120,486,834 - 120,486,834
Changes in
inventories of
finished goods and
merchandise (11,226,590) - (11,226,590) 17,469,722 - 17,469,722
Employee benefits
expense 100,877,190 246,045,570 346,922,760 100,961,186 234,365,421 335,326,607
Taxes and dues 18,016,473 22,022,577 40,039,050 16,531,629 22,598,153 39,129,782
Rental expenses 1,068,323 17,270,309 18,338,632 490,487 20,071,510 20,561,997
Depreciation and
amortization 125,725,498 18,169,712 143,895,210 129,011,038 19,976,557 148,987,595
Depreciation of right-
of-use assets 1,010,259 12,286,502 13,296,761 1,022,348 11,643,891 12,666,239
Advertising expenses - 25,707,625 25,707,625 - 32,359,954 32,359,954
Freight and custody 2,245,568 96,459,385 98,704,953 2,281,134 93,279,434 95,560,568
Maintenance cost of
vehicles 248,030 3,928,415 4,176,445 232,834 3,945,031 4,177,865
Commission 59,262,832 94,151,847 153,414,679 52,773,703 92,008,755 144,782,458
Other 167,415,891 98,977,904 266,393,795 168,142,411 94,264,609 262,407,020
₩ 1,784,947,055 ₩ 635,019,846 ₩ 2,419,966,901 ₩ 1,782,078,953 ₩ 624,513,315 ₩ 2,406,592,268

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

34. Financial Instruments by Categories

Finance income and cost by categories for the years ended December 31, 2023 and 2022, are as
follows:

(In thousands of Korean won) 2023

Other
comprehensive Total
Finance Net income income (before comprehensive
income Finance cost (loss) income tax) income (loss)

Financial assets
Financial assets at
amortised cost \ 40,292,773 \ -\ 40,292,773 \ -\ 40,292,773
Financial assets at fair
value through other
comprehensive income - - - 357,371 357,371
40,292,773 - 40,292,773 357,371 40,650,144
Financial liabilities
Financial liabilities
measured at amortised
cost 698,045 (5,765,965) (5,067,920) - (5,067,920)
Lease liabilities - (1,033,508) (1,033,508) - (1,033,508)
698,045 (6,799,473) (6,101,428) - (6,101,428)
\ 40,990,818 \ (6,799,473) \ 34,191,345 \ 357,371 \ 34,548,716

(In thousands of Korean won) 2022

Other
comprehensive Total
Finance Net income income (before comprehensive
income Finance cost (loss) income tax) income (loss)

Financial assets
Financial assets at
amortised cost \ 28,085,192 \ -\ 28,085,192 \ -\ 28,085,192
Financial assets at fair
value through profit or
loss 588,991 - 588,991 - 588,991
Financial assets at fair
value through other
comprehensive income
465,936 - 465,936 6,883,590 7,349,526
29,140,119 - 29,140,119 6,883,590 36,023,709
Financial liabilities
Financial liabilities
measured at amortised
cost 798,944 (5,953,193) (5,154,249) - (5,154,249)
Lease liabilities - (819,898) (819,898) - (819,898)
798,944 (6,773,091) (5,974,147) - (5,974,147)
\ 29,939,063 \ (6,773,091) \ 23,165,972 \ 6,883,590 \ 30,049,562

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

34. Financial Instruments by Categories, Continued

The book amount and the fair value of financial instruments as at December 31, 2023 and 2022, are
summarized as follows:

(In thousands of Korean won) 2023 2022

Book value Fair value Book value Fair value
Financial assets
Financial assets at amortised
\ 1,364,269,478 \ 1,364,269,478 \ 1,238,738,841 \ 1,238,738,841
cost
Financial assets at fair value
through other comprehensive 5,425,867 5,425,867 20,615,039 20,615,039
income
1,369,695,345 1,369,695,345 1,259,353,880 1,259,353,880
Financial liabilities
Financial liabilities measured at
258,063,498 258,063,498 411,206,645 411,206,645
amortised cost
Lease liabilities1 24,796,139 24,796,139 24,118,280 24,118,280
\ 282,859,637 \ 282,859,637 \ 435,324,925 \ 435,324,925

1
It is lease liabilities that are not financial liabilities categorized.

The Group estimates the book amounts of financial assets, other than long-term borrowings and
financial assets at fair value through other comprehensive income, at reasonable amounts that
approximate fair values.

The levels of the fair value hierarchy and its application to financial assets and liabilities are describe
below.

Level 1: Quoted prices (unadjusted) in active markets for identical assets and liabilities

Level 2: Inputs, other than quoted prices, that are observable from market for the asset or liability, either
directly (that is, as prices) or indirectly (that is, derived from prices)

Level 3: Inputs for the asset or liability that are not based on observable market data (that is,
unobservable inputs)

The fair value measurements classified by fair value hierarchy as at December 31, 2023 and 2022, are
as follows:

(In thousands of Korean won) Level 1 Level 2 Level 3 Total

December 31, 2023

Financial assets at fair value
through other \ - \ - \ 5,425,867 \ 5,425,867
comprehensive income
December 31, 2022
Financial assets at fair value
through other \ 15,171,169 \ - \ 5,443,870 \ 20,615,039
comprehensive income

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

34. Financial Instruments by Categories, Continued

Valuation techniques and inputs used in the recurring and non-recurring fair value measurements
categorized within Level 2 and Level 3 of the fair value hierarchy as at December 31, 2023, are as
follows:

(In thousands of Korean won) Fair value Level Valuation techniques Inputs

December 31, 2023

Financial assets at fair value
through other \ 5,425,867 3 Cost method1 -
comprehensive income
December 31, 2022
Financial assets at fair value
through other \ 5,443,870 3 Cost method1 -
comprehensive income

1
In the case where the fair value of the financial instruments cannot be measured reliably, its acquisition
cost was determined as a reasonable approximation of the fair value.

35. Income Taxes

Income tax expenses for the years ended December 31, 2023 and 2022, consist of:

(In thousands of Korean won) 2023 2022

Current income tax expense ₩ 149,573,879 ₩ 149,274,287

Adjustments to income tax of prior periods (4,143,880) (860,480)
Origination and reversal of temporary differences (10,072,210) (57,499,539)
Total income tax effect 135,357,789 90,914,268
Income taxes related to items recognized outside
profit or loss (321,837) (2,494,227)
Total income tax expense ₩ 135,035,952 ₩ 88,420,041

Origination and reversal of temporary differences for the years ended December 31, 2023 and 2022,
are as follows:

(In thousands of Korean won) 2023 2022

Deferred tax liabilities net, ending balance ₩ (151,443,253) ₩ (161,513,315)

Deferred tax liabilities net, beginning balance (161,513,315) (219,012,603)
Deferred tax assets net, ending balance 6,024 3,877
Deferred tax assets net, beginning balance 3,877 3,626
Origination and reversal of temporary differences ₩ (10,072,209) ₩ (57,499,539)

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

35. Income Taxes, Continued

Income taxes related to items recognized outside profit or loss for the years ended December 31, 2023
and 2022, are as follows:

(In thousands of Korean won) 2023 2022

Remeasurements of the defined benefit liability ₩ (321,837) ₩ (2,494,227)

Income tax expense recognized other than in
profit or loss ₩ (321,837) ₩ (2,494,227)

Reconciliation between profit before income tax and income tax expense for the years ended December
31, 2023 and 2022, is as follows:

(In thousands of Korean won) 2023 2022

Profit before income tax ₩ 520,017,907 ₩ 486,728,116

Income tax using the Group’s statutory tax rate 193,978,628 150,014,614
Adjustment:
Non-deductible expense 541,479 2,149,853
Tax-exempt income (43,582,455) -
Tax credits (3,228,588) (5,322,758)
Adjustments to income tax of prior periods (4,143,880) (860,480)
Tax for promotion of investment and collaborative
cooperation - 3,865,116
Tax effect on profit or loss of subsidiaries and
others (4,627,626) (61,194,885)
Effects of changes in tax rates (151,301) (1,943,519)
Others (3,750,305) 1,712,100
Income tax expense ₩ 135,035,952 ₩ 88,420,041
Effective tax rate 25.97% 18.17%

The net deferred tax liabilities and current tax liabilities are reflected in the consolidated statements of
financial position after offsetting assets and liabilities only if there is the legal right to offset current tax
assets and liabilities and they are levied by the same taxing authority.

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

35. Income Taxes, Continued

Change in deferred tax assets and liabilities for the years ended December 31, 2023 and 2022, are as
follows:

(In thousands of Korean won)

2023
Other
Beginning Profit or comprehensive Ending
balance loss income balance

Bad debt expense ₩ 946,727 ₩ 27,979 ₩ - ₩ 974,706

Provision for warranty 504,625 651,919 - 1,156,544
Accumulated
depreciation (106,579,983) 3,929,071 - (102,650,912)
Defined benefit liability 48,479 396,501 (321,837) 123,143
Land (10,794,200) 62,132 - (10,732,068)
Investments in
subsidiaries (48,538,628) 4,786,053 - (43,752,575)
Others 2,903,541 540,392 - 3,443,933
₩ (161,509,439) ₩ 10,394,047 ₩ (321,837) ₩ (151,437,229)

(In thousands of Korean won)

2022
Other
Beginning Profit or comprehensive Ending
balance loss income balance

Bad debt expense ₩ 128,907 ₩ 817,821 ₩ - ₩ 946,728

Provision for warranty 287,863 216,762 - 504,625
Accumulated
depreciation (110,237,300) 3,657,316 - (106,579,984)
Defined benefit liability (8,545) 2,551,249 (2,494,227) 48,477
Land (11,271,806) 477,607 - (10,794,199)
Investments in
subsidiaries (101,686,105) 53,147,478 - (48,538,627)
Others 3,778,009 (874,467) - 2,903,542
₩ (219,008,977) ₩ 59,993,766 ₩ (2,494,227) ₩ (161,509,438)

The amount of deductible temporary differences for which deferred tax assets are not recognized as at
December 31, 2023 and 2022 are as follows:

(In thousands of Korean won) 2023 2022

Investments in subsidiaries ₩ 66,113,217 ₩ 62,917,227

Other 759,731 401,820

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

35. Income Taxes, Continued

The Group does not recognize any deferred tax asset for the deductible temporary differences stated
above as these are not probable to reverse in the foreseeable future and sufficient future taxable profits
will not be available against which tax loss carry-forwards can be used.

The amounts of taxable temporary differences for which no deferred tax liabilities are recognized as at
December 31, 2023 and 2022 are as follows:

(In thousands of Korean won) 2023 2022

Investments in subsidiaries ₩ (12,652,675) ₩ (28,422,733)

The Group does not recognize any deferred tax liability for the above, because the Group is able to
control the timing of the reversal of taxable temporary differences related to investments of subsidiaries
and it is probable that the temporary difference will not reverse in the foreseeable future.

The analysis of deferred tax assets and liabilities as at December 31, 2023 and 2022, is as follows:

(In thousands of Korean won) 2023 2022

Deferred tax assets

Deferred tax assets to be recovered after more
than 12 months ₩ 28,758,550 ₩ 25,722,374
Deferred tax assets to be recovered within
12 months 2,114,907 1,278,214
₩ 30,873,457 ₩ 27,000,588
Deferred tax liabilities
Deferred tax liabilities to be recovered after more
than 12 months ₩ (182,310,686) ₩ (188,509,905)
Deferred tax liabilities to be recovered within
12 months - (121)
(182,310,686) (188,510,026)
Deferred tax liabilities, net ₩ (151,437,229) ₩ (161,509,438)

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

36. Financial Risk Management

Overview of risk management

The Group has exposure to the following risks from its use of financial instruments:

ㆍ Credit risk
ㆍ Liquidity risk
ㆍ Currency risk
ㆍ Interest risk
ㆍ Other price risk

This note presents information about the Group’s exposure to each of the above risks, the Group’s
objectives, policies and processes for measuring and managing risk, and the Group’s management of
capital. Further Qualitative disclosures and quantitative disclosures are included throughout these
consolidated financial statements.

Risk management framework

The Group's risk management aims to identify potential risks that affect the Group's financial
performance and to reduce, eliminate or avoid them to an acceptable level. The Group has established
and operates enterprise-wide risk management policies and procedures, and the Group's Finance
Department has overall responsibility for risk management.

Credit risk

Credit risk refers to the risk of financial loss due to the failure of a customer or counterparty to fulfill its
contractual obligations under a financial instrument and arises primarily from trade receivables from
customers. To manage credit risk, the Group's management has established policies and procedures
to ensure that the Group only transacts with counterparties with a certain level of creditworthiness and
that the Group has policies and procedures in place to enhance the creditworthiness of its financial
assets. The Group evaluates the creditworthiness of its customers using disclosed financial information
and information provided by credit rating agencies when entering into contracts with new customers,
and determines the credit limit based on this, and obtains collateral or payment guarantees. In addition,
the Group periodically reevaluates the creditworthiness of its customers to review the credit limit and
adjust the level of collateral. For financial assets whose collection is delayed, the Group reports the
status of delayed collection and collection measures on a quarterly basis and takes appropriate
measures depending on the reason for the delay.

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

36. Financial Risk Management, Continued

Credit risk, Continued

1) Exposure to credit risk

The carrying amount of financial assets is maximum exposure to credit risk. The maximum exposure to
credit risk as at December 31, 2023 and 2022 is as follows:

(In thousands of Korean won) 2023 2022

Short-term deposits ₩ 730,485,108 ₩ 385,563,538

Long-term deposits 2,000 2,000
Trade and other receivables 191,029,000 203,103,219
Other financial assets 76,903,700 40,347,020
Cash equivalents1 365,798,922 609,690,870
₩ 1,364,218,730 ₩ 1,238,706,647

1
The differences from cash and cash equivalents on the consolidated statements of financial position
is cash hold by the Group.

As at December 31, 2023 and 2022, these are no significant concentrations of credit risk and diversified
to various customers. Meanwhile, the Group is depositing cash or cash equivalents to financial institutes
such as Shinhan Bank whose credit rating is high. Thus, credit risk from financial institution is limited.

Besides above, as at December 31, 2023 the Group is obligated to repay spin-off debt (\ 487 million)
in solidarity with Orion Holdings Corporation (formerly, Orion Corporation) as of the spin-off date (June
1, 2017) by the Commercial Law article 530-9 (1) in Republic of Korea. Above liability is allocated to the
earliest period in which the Group is required to pay.

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

36. Financial Risk Management, Continued

Credit risk, Continued

2) Impairment of financial assets

(a) Trade receivables

The Group applies the simplified approach to measuring expected credit losses which uses a lifetime
expected loss allowance for trade receivables. To measure the expected credit losses, trade receivables
have been grouped based on shared credit risk characteristics and the day past due. The expected loss
rates are based on the payment profiles of sales over a period of 24 month before December 31, 2022,
and the corresponding historical credit losses experienced within this period. The historical loss rates
are adjusted to reflect forward-looking information affecting the ability of the customers to settle the
receivables.

The loss allowance as at December 31, 2023 and 2022, was determined as follows for trade receivables:

(In thousands of Korean won)

More than More than More than
60 days 90 days 180 days
Current past due past due past due Bad debt1 Total
December 31, 2023
Expected loss rate 0.01% 0.15% 0.02% 0.58% 18.35% 2.65%
Gross carrying
amount ₩ 160,850,315 ₩ 3,671,172 ₩ 3,038,871 ₩ 487,337 ₩ 28,175,675 ₩ 196,223,370
Loss allowance
Provision 14,440 5,640 692 2,816 5,170,782 5,194,370
December 31, 2022
Expected loss rate 0.03% 0.11% 0.15% 25.44% 55.28% 2.31%
Gross carrying
amount ₩ 182,757,041 ₩ 13,468,538 ₩ 2,202,262 ₩ 1,695,895 ₩ 7,779,391 ₩ 207,903,127
Loss allowance
provision 50,185 14,665 3,269 431,504 4,300,286 4,799,909

1
The Group analyzed individual bad debt and recognized loss allowance.

Movements in the loss allowance provision for trade receivables for the years ended December 31,
2023 and 2022, are as follows:

(In thousands of Korean won) 2023 2022

Beginning balance ₩ 4,799,909 ₩ 1,156,896

Increase in loss allowance recognized in profit or
428,124 3,926,126
loss during the year
Receivables written off during the year as
(16,538) (84,028)
uncollectible
Other (17,125) (199,085)
Ending balance ₩ 5,194,370 ₩ 4,799,909

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

36. Financial Risk Management, Continued

Credit risk, Continued

2) Impairment of financial assets, Continued

(a) Trade receivables, Continued

Trade receivables are written off or disposed when there is no reasonable expectation of recovery.
Indicators that there is no reasonable expectation of recovery include, amongst others, impossibility of
collection due to the failure of a debtor to engage in a repayment plan with the Group.

Impairment on trade receivables is presented as ‘impairment losses on trade receivables’ in the

consolidated statement of comprehensive income. Subsequent recoveries of amounts previously
written off are recognized as ‘other income’.

(b) Other financial assets

(In thousands of Korean won) 2023 2022

Beginning balance ₩ 10,961 ₩ 77,793

Increase in loss allowance recognized in profit or
6,308 (67,929)
loss during the year
Receivables written off during the year as
(1,747) (966)
uncollectible
Other 14,700 2,063
Ending balance ₩ 30,222 ₩ 10,961

As at December 31, 2023 and 2022, other financial assets at amortised cost include other receivables,
leasehold deposits received, accrued income and others. The Group recognizes the loss allowance on
credit-impaired other receivables.

Liquidity risk

Liquidity risk is the risk that the Group will encounter difficulty in meeting obligations associated with its
financial liabilities that are settled by delivering cash or another financial asset. The Group’s
management manages liquidity risk by setting both short-term and long-term fund management plan
and immunizing the maturity of financial assets and financial liabilities by reviewing and analyzing cash
out flow forecasts and realized cash outflows consistently. The Group’s management believes that the
Group has sufficient liquid resources from operating cash flows and financial assets to meet finance
changes and principal repayments on its debt instruments. Meanwhile, in order to manage the Group’s
liquidity risks, the group have entered into an overdraft protection provided by Shinhanbank and etc.

Details of analysis of liquidity risk as at December 31, 2023 and 2022, are as follows. The tables below
analyze the Group’s financial liabilities into relevant maturity groupings, and the amounts disclosed in
the table are the contractual undiscounted cash flows.

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

36. Financial Risk Management, Continued

Liquidity risk, Continued

(In thousands of Korean won)

Contractual Within 6 6-12 Over
Book Value cash flow months months 1-2 years 2 years
December 31, 2023
Borrowings ₩ 3,812,744 ₩ 3,873,810 ₩ 3,873,810 ₩ - ₩ - ₩ -
Trade payables 122,719,827 122,719,827 122,719,827 - - -
Other current
162,913,442 162,913,442 162,787,942 125,500 - -
financial liabilities
Other non-current
273,453 273,453 - - 273,453 -
financial liabilities
Lease liabilities 24,796,139 27,189,405 5,643,868 5,079,833 7,607,135 8,858,569
₩ 314,515,605 ₩ 316,969,937 ₩ 295,025,447 ₩ 5,205,333 ₩ 7,880,588 ₩ 8,858,569
December 31, 2022
Borrowings ₩ 93,881,308 ₩ 94,275,048 ₩ 94,275,048 ₩ - ₩ - ₩ -
Trade payables 149,983,831 149,983,831 149,983,831 - - -
Other current
190,182,020 190,182,020 32,631,336 157,550,684 - -
financial liabilities
Other non-current
201,785 201,785 - - 201,785 -
financial liabilities
Lease liabilities 24,118,280 24,481,888 5,255,738 5,116,964 7,317,569 6,791,617
₩ 458,367,224 ₩ 459,124,572 ₩ 282,145,953 ₩ 162,667,648 ₩ 7,519,354 ₩ 6,791,617

The Group does not expect that this cash flow will appear substantially earlier than or substantially
different in amounts from what the Group forecasts.

Besides above, as at December 31, 2023 the Group is obligated to repay spin-off debt (\ 487 million)
in solidarity with Orion Holdings Corporation (formerly, Orion Corporation) as of the spin-off date (June
1, 2017) by the Commercial Law article 530-9 (1) in Republic of Korea. Above liability is allocated to the
earliest period in which the Group is required to pay.

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

36. Financial Risk Management, Continued

Currency risk

The Group’s exposure to foreign currency risk occurs on the assets and liabilities that are not presented
with functional currency. The Group’s exposure to foreign currency risk is as follows based on notional
amount:

(In thousands of Korean won) USD JPY EUR

December 31, 2023

Cash and cash equivalents ₩ 28,906,620 ₩ - ₩ -
Trade and other financial assets 8,655,382 - 2,168
Trade and other financial liabilities (9,557,702) (179,033) (6,911,871)
Borrowings (157,551) - -
₩ 27,846,749 ₩ (179,033) ₩ (6,909,703)
December 31, 2022
Cash and cash equivalents ₩ 8,367,355 ₩ - ₩ -
Trade and other financial assets 4,417,736 - 150,632
Trade and other financial liabilities (16,572,831) (4,340,782) (7,990,445)
Borrowings (818,261) - -
₩ (4,606,001) ₩ (4,340,782) ₩ (7,839,813)

(In thousands of Korean won) RUB CHF VND

December 31, 2023 -

Cash and cash equivalents ₩ 12 ₩ - ₩ -
Trade and other financial assets - - -
Trade and other financial liabilities - (15,740) -
Borrowings - - -
₩ 12 ₩ (15,740) ₩ -
December 31, 2022
Cash and cash equivalents ₩ 968 ₩ - ₩ 236
Trade and other financial assets - - -
Trade and other financial liabilities - (9,270) -
Borrowings - - -
₩ 968 ₩ (9,270) ₩ 236

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

36. Financial Risk Management, Continued

Currency risk, Continued

(In thousands of Korean won) CNY HKD MMK

December 31, 2023

Cash and cash equivalents ₩ 1,223,326 ₩ 6,266 ₩ 8,169
Trade and other financial assets 7,180 - -
Trade and other financial liabilities (1,805) - (11,883)
Borrowings - - -
₩ 1,228,701 ₩ 6,266 ₩ (3,714)
December 31, 2022
Cash and cash equivalents ₩ 1,500,324 ₩ 35,824 ₩ 11,248
Trade and other financial assets - - -
Trade and other financial liabilities (10,015) - (13,101)
Borrowings (2,866,752) - -
₩ (1,376,443) ₩ 35,824 ₩ (1,853)

As at December 31, 2023 and 2022, the effects of a 10% appreciating or depreciating of foreign
currencies against functional currency on profit before tax are as follows:

(In thousands of Korean won) 2023 2022

10% 10% 10% 10%
strengthening weakening strengthening weakening

USD ₩ 2,784,675 ₩ (2,784,675) ₩ (460,600) ₩ 460,600

JPY (17,903) 17,903 (434,078) 434,078
EUR (690,970) 690,970 (783,981) 783,981
RUB 1 (1) 97 (97)
CHF (1,574) 1,574 (927) 927
VND - - 24 (24)
CNY 122,870 (122,870) (137,644) 137,644
HKD 627 (627) 3,582 (3,582)
MMK (371) 371 (185) 185
₩ 2,197,355 ₩ (2,197,355) ₩ (1,813,712) ₩ 1,813,712

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

36. Financial Risk Management, Continued

Inherent rate risk

At the reporting date, the variable rate financial liabilities are as follows:

(In thousands of Korean won) 2023 2022

Short-term borrowings ₩ 3,109,396 ₩ 818,261

As at December 31, 2023 and 2022, the effects of a 100bp fluctuation of the interest rates on profit
(loss) were as follows:

(In thousands of Korean won)

2023 2022
10% increase 10% decrease 10% increase 10% decrease

Net finance cost ₩ (31,094) ₩ 31,094 ₩ (8,183) ₩ 8,183

Since the Group operates financial deposits for the purpose of obtaining interest income at December
31, 2023 and 2022, the size of interest income may be affected by changes in the market interest rates
applied when depositing financial instruments.

Capital management

The Group’s policy is to maintain a sound capital base so as to maintain investor, creditor and market
confidence and to sustain future development of the business. The Group’s main objective is to
maximize shareholder’s profit and monitoring the level of dividends as a mean of capital management.
Capital structure of the Group consists of net debts which is debts and borrowings less cash and cash
equivalents and equity.

As at December 31, 2023 and 2022, the Group’s net debt-to-equity ratio as follows:

(In thousands of Korean won) 2023 2022

Net debt:
Debts and borrowings ₩ 3,812,744 ₩ 93,881,308
Less: Cash and cash equivalents (365,849,670) (609,723,063)
(362,036,926) (515,841,755)
Equity 2,955,476,949 2,639,228,833
Net debt-to-equity ratio1 ₩ - ₩ -

1
Due to negative amounts of net debt at December 31, 2023 and 2022, Net debt-to-equity ratio is not
be calculated.

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

37. Financial Commitments and Contingencies

Financial commitments to financial institutions as at December 31, 2023 and 2022, are as follows:

(In thousands of Korean won, US dollars, Chinese yuan, European euro, Russian ruble)
Type of
Contract Company Lender commitment Currency 2023 2022
Usance USD 10,000,000 10,000,000
Kookmin Bank
Purchase loan KRW 20,000,000 20,000,000
Bank overdraft KRW 5,000,000 5,000,000
Usance USD 5,900,000 5,900,000
Shinhan Bank Collateralized
loans on trade KRW - 4,000,000
receivables
Orion Corporation Credit loan KRW 30,000,000 -
Purchase loan KRW 20,000,000 20,000,000
NongHyup Bank
Credit loan KRW 30,000,000 30,000,000
Collateralized
Hana Bank loans on trade KRW 5,000,000 30,000,000
receivables
Mizuho Bank Credit loan KRW 20,000,000 20,000,000
Group
Hyundai Card KRW 12,000,000 12,000,000
purchase card
Bank of China Usance CNY 60,000,000 60,000,000
Orion Food Co., Ltd.
Bank of China General loan CNY 80,000,000 80,000,000
Agricultural
Orion Food (Shanghai) Usance CNY 60,000,000 -
Bank of China
Co., Ltd. Bank of China Usance CNY 55,000,000 55,000,000
Orion Food (Shen Yang)
Hana Bank Usance EUR 1,000,000 1,000,000
Co., Ltd.
Orion Food (Guangzhou)
Hana Bank Usance EUR 3,000,000 2,000,000
Co., Ltd.
Sumitomo Mitsui
Orion International Euro. Credit loan RUB - 500,000,000
Rus Bank
LLC Hana Bank Credit loan RUB 200,000,000 600,000,000
Orion Food VINA Co.,
Shinhan Bank Usance USD 5,000,000 5,000,000
Ltd.
KRW 142,000,000 141,000,000
USD 20,900,000 20,900,000
Total CNY 255,000,000 195,000,000
EUR 4,000,000 3,000,000
RUB 200,000,000 1,100,000,000

As at December 31, 2023 and 2022, the Group has factoring agreements with Woori Bank, for trade
receivables of Coupang Corp. The trade receivables provided by the Group in the factoring transaction
which meet the requirements for asset derecognition, were derecognized because there is no recourse
obligation for the above trade receivables in case of debtors’ default and accordingly Woori Bank retains
substantially all the risks and rewards.

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

37. Financial Commitments and Contingencies, Continued

As at December 31, 2023, guarantees of \ 731 million (2022 : \ 585 million) are provided to the Group
by Seoul Guarantee Insurance Company etc. for the performance of contracts.

As at December 31, 2023 and 2022, the Group provides guarantees to the customers with the maximum
amount of \ 12,000 million in relation to the Corporate purchase card of Hyundai Card.

As at December 31, 2023, the Group has entered into a purchase agreement with PARSONS Pvt. Ltd.

As at December 31, 2023, the Group is obligated to repay spin-off debt(\ 487 million) in solidarity with
Orion Holdings Corporation (formerly, Orion Corporation) as of the spin-off date (June 1, 2017) by the
Commercial Law Article 530-9 (1) in Republic of Korea. Above liability is allocated to the earliest period
in which the Group is required to pay.

As at December 31. 2023, Orion Holdings Corporation, a Parent Company of the Group and Orion Food
Co., Ltd., a subsidiary, have entered into a joint investment contract for Shandong Lukang
Biotechnology Development Co., Ltd.

As at December 31, 2023, the Group did not recognize the provision in relation to tax imposed by the
Seoul Customs as it determined it had no current obligation to bear the tax.

Details of lawsuit pending as at December 31, 2023 are summarized as follows:

(In thousands of Korean won)

Plaintiff Defendant Contents Amounts1 Progress
Director of Yongsan Cancellation of imposition of
Orion Corp. value-added tax \ 833,022 First trial in Progress
Tax Office
Former employees Orion Corp. Compensation for damages 70,000 First trial in Progress
Former employees Orion Corp. Claim for wages and others 125,122 First trial in Progress
Shanghai Suning
Orion Food Co., Ltd. Yigou Commercial Claim for payment of receivables 15,306 First trial in Progress
Management Co., Ltd.
NGS Supermarket
Orion Food Co., Ltd. Claim for payment of receivables 42,793 First trial in Progress
Group. Co., Ltd.
Zhejiang Huayun
Orion Food Co., Ltd. Claim for payment of receivables 3,306,791 First trial in Progress
Co., Ltd
Beijing Quhonga
Orion Food Co., Ltd. Claim for payment 877,074 First trial in Waiting
Trading Co., Ltd
Orion International
Vyborg Customs Appeal to additional tariffs 1,974,453 First trial in Progress
Euro. LLC

1
The lawsuit amount is translated to Korean won.

The ultimate outcome of the above litigations cannot be determined. However, effects of the litigation
outcome on the financial statements are expected to be insignificant.

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

38. Related Party Transactions

Related parties as at December 31, 2023 and 2022, are as follows, excluding subsidiaries:

2023
Relationship Related Party

Parent Orion Holdings Corp.

Joint ventures Delfi-Orion Pte Ltd, Orion Nonghyup Agri, inc.
Showbox Crop., Supreme Star Investment Corp. Limited,
Parent’s subsidiaries Orion JeJu Yongam Soo Corp., ORION BIOLOGICS CO., LTD.,
SHOWBOX Inc., Beijing Zhongguan Megabox Cinema Co., Ltd.
Parent’s joint venture Shandong Lukang Biotechnology Development Co.,Ltd.
Orion Foundation, Capitalone Showbox-iMBC Contents Fund, and
Others
major share holders.

2022
Relationship Related Party

Parent Orion Holdings Corp.

Joint ventures Delfi-Orion Pte Ltd, Orion Nonghyup Agri, inc.
Showbox Crop., Supreme Star Investment Corp. Limited,
Parent’s subsidiaries1,2 Orion JeJu Yongam Soo Corp., ORION BIOLOGICS CO., LTD.,
SHOWBOX nc., Beijing Zhongguan Megabox Cinema Co., Ltd.
Parent’s joint venture Shandong Lukang Biotechnology Development Co.,Ltd.
Orion Foundation, Capitalone Showbox-iMBC Contents Fund, and
Others
major share holders.

1
Orion Holdings Corporation, a Parent Company of the Group, newly acquired shares of ORION
BIOLOGICS CO., LTD.in 2022.
2
Orion Holdings Corporation, a Parent Company of the Group, disposed shares in Mega Mark Co., Ltd,
Highland D&C Corp., Reon A&D Corp, Misoin Corp. in 2022.

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

38. Related Party Transactions, Continued

Significant transactions which occurred in the normal course of business with related parties for the
years ended December 31, 2023 and 2022, are summarized as follows:

Sales etc.

(In thousands of Korean won)

Relationship Related Party Transaction 2023 2022
Sales ₩ 4,159,743 ₩ -
Parents Orion Holdings Corp.
Other income etc. 367,855 870,011
Showbox Corp. Sales 5,762 24,036
Orion JeJu Yongam Soo
Parents’ subsidiaries Sales
Corp. 6,464 5,824
ORION BIOLOGICS CO.,
Sales
LTD. 6,856 -
Delfi-Orion Pte Ltd. Sales 4,362,754 2,943,551
Joint ventures
Orion Nonghyup Agri, inc. Sales 17,332 19,587
Orion Foundation Sales 389,560 241,755
Others
Major shareholders Other income etc. 37,637 8,604
₩ 9,353,963 ₩ 4,113,368

Purchase etc.

(In thousands of Korean won)

Relationship Related Party Transaction 2023 2022
Parents Orion Holdings Corp. Other expense ₩ 15,165,160 ₩ 15,305,016
Orion JeJu Yongam Soo Purchase 15,745,861 12,550,972
Corp. Other expense - 429
Other expense - 375
Mega Mark Co., Ltd. Purchase of property,
plant and equipment - 100,000
Parents’ subsidiaries
Purchase of property,
Misoin Corp.
plant and equipment - 844,800
Purchase of property,
Reon A&D Corp.
plant and equipment - 528,000
Purchase of property,
Highland D&C Corp.
plant and equipment - 387,200
Orion Nonghyup Agri,
Joint ventures Purchase
inc. 38,898,660 38,174,208
Others Orion Foundation Other expense 1,000,000 950,000
₩ 70,809,681 ₩ 68,841,000

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

38. Related Party Transactions, Continued

Accounts receivable and accounts payable balances with related parties as at December 31, 2023 and
2022, are as follows:

(In thousands of Korean won)

2023

Receivables Payables
Trade Other Leasehold Shor-term Trade Accounts Other
Relationship Related party receivables receivables deposits loan payables payable1 payables
Orion Holdings
Parents Corp. ₩ 381,261 ₩ 55,015 ₩ 17,340,000 ₩ - ₩ - ₩ 3,977,112 ₩ -
Parents’ Orion JeJu
Yongam Soo
subsidiaries Corp. - 3,001 - 36,403,092 954,168 - -
Delfi-Orion Pte
Ltd 702,890 - - - - - -
Joint ventures Orion Nonghyup
Agri, inc. - 759,845 - - 4,468,909 5,447 -
Major
Others shareholders 3,499 - - - - - 4,119,079

₩ 1,087,650 ₩ 817,861 ₩ 17,340,000 ₩ 36,403,092 ₩ 5,423,077 ₩ 3,982,559 ₩ 4,119,079

1
As at December 31, 2023, other payables include ₩ 237 million that will be paid in January 2024,
among the recognized lease liabilities of ₩ 9,347 million, related to lease transactions with Orion
Holdings Corp.

(In thousands of Korean won)

2022

Receivables Payables
Related Trade Other Leasehold Trade Accounts Other
Relationship party receivables receivables deposits payables payable1 payables
Orion Holdings
Parents Corp. ₩ - ₩ 462,942 ₩ 17,340,000 ₩ - ₩ 4,268,031 ₩ -
Parents’ Orion JeJu Yongam
Soo Corp.
subsidiaries - 761 - 781,087 - -
Delfi-Orion Pte Ltd. 347,672 - - - - -
Joint ventures Orion Nonghyup
Agri, inc. - 1,176,652 - 8,368,576 9,539 -
Others Major shareholders 1,458 - - - - 3,730,252

₩ 349,130 ₩ 1,640,355 ₩ 17,340,000 ₩ 9,149,663 ₩ 4,277,570 ₩ 3,730,252

1
As at December 31, 2022, other payables include ₩ 247 million that will be paid in January 2023,
among the recognized lease liabilities of ₩ 7,222 million, related to lease transactions with Orion
Holdings Corp.

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

38. Related Party Transactions, Continued

Investments transactions with related parties as at December 31, 2023 and 2022, are as follows:

(In thousands of Korean won)

Relationship Related Party Transaction 2023 2022
Payment of dividends ₩ (14,036,382) ₩ (11,081,354)
Parents Orion Holdings Corp. Redemption of lease
(2,846,708) (2,381,443)
liabilities
Parents’ Orion JeJu Yongam
Loan collection (36,403,092) -
subsidiaries Soo Corp.
Shandong Lukang
Parents’
Biotechnology Contribution in cash - (2,308,318)
joint venture Development Co., Ltd.
Others Major Shareholders Payment of dividends (2,416,414) (1,907,696)

Details of key management personnel (executive directors and controlling interest holder)
compensation for the years ended December 31, 2023 and 2022, are as follows:

(In thousands of Korean won) 2023 2022

Short-term employee benefits ₩ 10,009,987 ₩ 8,938,822

Post-employment benefits 1,905,015 2,114,370
Share-based compensation expense 38,449 27,131
₩ 11,953,451 ₩ 11,080,323

Key management consists of registered executive officers and auditors who have the authority and
responsibility in the planning, directing and control of the Group’s operations.

As at December 31, 2023, the Group has recognized ₩ 10,766 million of right-of-use assets, ₩ 9,347
million of lease liabilities with related parties, and recognized ₩ 3,124 million of depreciation of right-of-
use assets and ₩ 347 million of interest expense during the year.

82
Orion Corporation and Subsidiaries
Notes to the Consolidated Financial Statements
December 31, 2023 and 2022

39. Cash Flows

The principal non-cash transactions for the years ended December 31, 2023 and 2022, are as follows:

(In thousands of Korean won) 2023 2022

Reclassification from construction in progress to

₩ 105,576,044 ₩ 120,023,780
property, plant and equipment
Reclassification from construction in progress to
2,070,433 7,024,124
intangible assets
Other payables regarding the acquisition of property,
5,548,642 10,411,774
plant and equipment
Other payables regarding the acquisition of
535,061 201,712
Intangible assets
Other payables regarding the pension benefit
2,698,728 1,061,149
payments
Reclassification from long-term borrowings to short-
- 69,911,356
term borrowings
Increase of right-of-use assets from changes in
(3,483,442) (2,180,539)
lease agreement conditions
Increase of lease liabilities from changes in lease
1,230,965 3,452,888
agreement conditions
Increase of right-of-use assets from new lease
(11,358,515) (8,741,922)
contracts
Increase of lease liabilities from new lease contracts 9,993,181 7,682,994
Reclassification from lease liabilities to current
5,778,778 6,995,012
portion
Reclassification from property, plant and equipment
- 29,191,144
to investment property

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

39. Cash Flows, Continued

Changes in liabilities arising from financial activities for the years ended December 31, 2023 and 2022,
are as follows:

(In thousands of Korean won)

2023

Non cash flow activities

Effects on
foreign
Beginning Cash flows from Depreci- currency Reclassifi- Ending
balance financing activities ation etc change cation Others balance
Short-term borrowings ₩ 23,907,383 ₩ (19,089,103) ₩ - ₩ (1,005,536) ₩ - ₩ - ₩ 3,812,744
Current portion of
long-term borrowings
69,973,925 (70,000,000) 26,075 - - - -
Current leasehold
deposits received
127,500 (2,000) - - - - 125,500
Non-current leasehold
deposits received
- 80,000 1,740 - - (5,138) 76,602
Current lease liabilities
10,337,604 (11,479,597) - (118,964) 5,778,778 5,981,850 10,499,671
Non-current lease
liabilities
13,780,676 - - (74,691) (5,778,778) 6,369,261 14,296,468

₩ 118,127,088 ₩ (100,490,700) ₩ 27,815 ₩ (1,199,191) ₩ - ₩ 12,345,973 ₩ 28,810,985

(In thousands of Korean won)

2022

Non cash flow activities

Effects on
foreign
Beginning Cash flows from Depreci- currency Reclassifi- Ending
balance financing activities ation etc change cation Others balance
Short-term borrowings ₩ 1,734,778 ₩ 23,783,716 ₩ - ₩ (1,611,111) ₩ - ₩ - ₩ 23,907,383
Current portion of
long-term borrowings
159,956,353 (160,000,000) 106,216 - 69,911,356 - 69,973,925
Long-term borrowings
69,890,942 - 20,414 - (69,911,356) - -
Non-current leasehold
deposits received
190,446 (63,000) 82 - - (28) 127,500
Current lease liabilities
9,569,489 (11,178,454) - 14,707 6,995,012 4,936,850 10,337,604
Non-current lease
liabilities
13,460,764 - - 170,554 (6,995,012) 7,144,370 13,780,676

₩ 254,802,772 ₩ (147,457,738) ₩ 126,712 ₩ (1,425,850) ₩ - ₩ 12,081,192 ₩ 118,127,088

The Group is presenting net amount of cash flow caused by financial assets at fair value through profit
or loss whose amount is big due to frequent transactions and maturity comes in a short-period of time.

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

40. Events After the Reporting Period

On January 15, 2024, PAN Orion Corp Limited, subsidiary of Orion Corp, entered into an agreement to
acquire the shares of Legochem Bioscience Co., Ltd and increase paid-in capital through third-party
allocation. The contract’s expected closing date is March 29, 2024, and PAN Orion Corp Limited plans to
acquire 25.73% (9,363,283 shares) of the common stock of Legochem Bioscience Co., Ltd for KRW
548,494 million.

85