SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of February 2023

LG Display Co., Ltd.

(Translation of Registrant’s name into English)

LG Twin Towers, 128 Yeoui-dearo, Yeongdeungpo-gu, Seoul 07336, Republic of Korea

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F  ☒            Form 40-F  ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):  ☐

Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):  ☐

Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submission to furnish a report or other document that the registration foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes  ☐            No  ☒

Proxy Statement

I. Activities and Remuneration of Outside Directors, etc.

1. Attendance and Voting Record of Outside Directors, etc.

	Date	Agenda	Remark	Name of Outside Directors
				Kun Tai Han (Attendance rate: 100%)	Byoungho Lee (Attendance rate: 0%)	Chang Yang Lee (Attendance rate: 100%)	Doocheol Moon (Attendance rate: 100%)
1	2022.01.26	Report on Q4 2021 earnings results	Reported	—	—	—	—
		Report on status of operation of internal accounting management system	Reported	—	—	—	—
		Approval of FY2021 Financial Statements	Approved	For	Absent	For	For
		Approval of FY2021 Annual Business Report	Approved	For	Absent	For	For
		Approval of amendments of Board of Directors Charter and company-wide discretionary regulations	Approved	For	Absent	For	For
2	2022.02.17	Report on status of operation of internal accounting management system	Reported	—	—	—	—
		Report on operation of compliance system	Reported	—	—	—	—
		Approval of convocation of FY2021 Annual General Meeting of Shareholders and submission of FY2021 AGM agenda items	Approved	For	Absent	For	For

	Date	Agenda	Remark	Name of Outside Directors
				Byoungho Lee (Attendance rate: 100%)	Chang Yang Lee (Attendance rate: 0%)	Doocheol Moon (Attendance rate: 100%)	Chung Hae Kang (Attendance rate: 100%)
3	2022.03.23	Approval of chairperson of Board of Directors appointment	Approved	For	Absent	For	For
		Approval of occupational safety and health plans	Approved	For	Absent	For	For
		Approval of revision of regulations of Board of Directors and Committees of the Board of Directors	Approved	For	Absent	For	For
		Approval of member of Committees of the Board of Directors	Approved	For	Absent	For	For
		Approval of remuneration for directors	Approved	For	Absent	For	For
		Approval of HR personnel policy revision for executive officers	Approved	For	Absent	For	For
		Approval of performance incentive payment to executive officers	Approved	For	Absent	For	For
		Approval of amendment to license agreement for use of “LG” brand	Approved	For	Absent	For	For
		Report on resolutions of Management Committee	Reported	—	—	—	—
4	2022.04.26	Report on Q1 2022 earnings results	Reported	—	—	—	—
		Approval of guarantee of the payment obligation of LG Display Vietnam Haiphong Co., Ltd.	Approved	For	Absent	For	For
		Approval of revision of compliance standards	Approved	For	Absent	For	For

	Date	Agenda	Remark	Name of Outside Directors
				Byoungho Lee (Attendance rate: 100%)	Doocheol Moon (Attendance rate: 100%)	Chung Hae Kang (Attendance rate: 100%)	Jungsuk Oh (Attendance rate: 67%)
5	2022.07.26	Report on Q2 2022 earnings results	Reported	—	—	—	—
		Approval of member of Related Party Transaction Committee and ESG Committee	Approved	For	For	For	For
6	2022.10.25	Report on Q3 2022 earnings results	Reported	—	—	—	—
7	2022.11.03	Report on 2022 business review	Reported	—	—	—	—
		Approval of investment on new technology	Approved	For	For	For	Absent

	Date	Agenda	Remark	Name of Outside Directors
				Doocheol Moon (Attendance rate: 100%)	Chung Hae Kang (Attendance rate: 100%)	Jungsuk Oh (Attendance rate: 100%)
8	2022.11.23	Approval of limit on bond issuances for FY2023	Approved	For	For	For
		Approval of Related Party transaction	Approved	For	For	For
		Approval of transactions with major shareholders	Approved	For	For	For
		Approval of goods and services transactions with affiliates	Approved	For	For	For
		Approval of license agreement for use of “LG” brand	Approved	For	For	For
		Approval of property lease agreement	Approved	For	For	For
		Approval of executive officer appointments	Approved	For	For	For
		Report on compensation of retired executive officers	Reported	—	—	—
		Report on recruitment of special executives	Reported	—	—	—
9	2022.12.23	Report on resolutions of Management Committee	Reported	—	—	—
		Approval of lease agreement of P7	Approved	For	For	For
10	2022.12.30	Approval of disciplinary action on executive officer	Approved	For	For	For

2. Activities of Outside Directors, etc. in Committees of the Board of Directors

[Audit Committee]

	Date	Agenda	Remark
1	2022.01.26	Approval of audit services by external auditor	Approved
		Approval of non-audit services by external auditor	Approved
		Approval of evaluation of Head of Audit Committee Bureau	Approved
		Report on status of external audit	Reported
		Report on status of operation of internal accounting management system	Reported
		Report on Q4 2021 Financial Statements	Reported
		Report on FY2021 Financial Statements	Reported
		Report on internal audit	Reported
		Report on Audit Committee self-evaluation	Reported
		Report on FY2021 Annual Business Report	Reported
2	2022.02.17	Approval of status of operation of internal accounting management system	Approved
		Approval of evaluation of operation of internal monitoring system	Approved
		Approval of FY2021 Audit Report	Approved
		Report on work of Audit Committee Bureau	Reported
		Report on review of AGM agenda and documents	Reported
3	2022.04.26	Report on status of external audit	Reported
		Report on Q1 2022 Financial Statements	Reported
		Report on post-evaluation of external audit	Reported
		Report on work of Audit Committee Bureau	Reported
		Report on corporate culture management activities and improvement status	Reported
4	2022.07.26	Report on status of external audit	Reported
		Report on Q2 2022 Financial Statements	Reported
		Report on internal audit	Reported
5	2022.10.25	Report on status of external audit	Reported
		Report on Q3 2022 Financial Statements	Reported
		Report on work of Audit Committee Bureau	Reported
6	2022.11.23	Approval of external auditor appointment	Approved
		Approval of audit services by external auditor	Approved

[Outside Director Nomination Committee]

	Date	Agenda	Remark
1	2022.01.26	Appointment of the chairperson of the Outside Director Nomination Committee	Approved
		Report on candidates for new outside director	Reported
2	2022.02.17	Approval of recommendation of outside director candidates	Approved

[ESG Committee]

	Date	Agenda	Remark
1	2022.04.26	Appointment of the chairperson of ESG committee	Approved
		ESG progress and action plan	Reported
		ESG plan on environmental area	Reported
2	2022.10.25	Establishment of human rights management system	Reported
		Current state on supply chain ESG	Reported
		Company-wide slogan for ESG	Reported

[Related Party Transaction Committee]

	Date	Agenda	Remark
1	2022.03.15	Approval of amendment to license agreement for use of “LG” brand	Approved
2	2022.04.26	Appointment of the chairperson of the Related Party Transaction Committee	Approved
		Approval of guarantee of the payment obligation of LG Display Vietnam Haiphong Co., Ltd.	Approved
3	2022.06.09	Report on 1H 2022 result of Related Party transaction	Reported
		Report on the role and use (collaboration) of AI Research	Reported
4	2022.11.18	Approval of Related Party transaction	Approved
		Approval of transactions with major shareholders, etc.	Approved
		Approval of license agreement for use of “LG” brand	Approved
		Approval of property lease agreement	Approved
		Approval of goods and services transactions with affiliates	Approved
		Approval of evaluation and risk of Related Party transaction	Approved
5	2022.12.23	Approval of lease agreement of P7	Approved

3. Remuneration of Outside Directors & Non-Standing Directors

									(KRW Million)
	Number of Persons		Remuneration Limit*		Results		Average Payment per Person		Remarks
Outside Director		4		6,000		392		98		—
Non-standing Director		1				—		—		—

* Remuneration limit for the total 7 directors, including 2 inside directors & 1 non-standing director.

II. Accumulated Transaction Amount of LG Display Co., Ltd with each of its Major Shareholders or their Affiliates, which was equivalent to 5% or more of 2021 Total Assets or Revenue in Separate Financial Statement.

								(KRW Million)
Transaction Type	Counterpart (Relationship)	Transaction Period	Transaction Amount		Assets Ratio*(%)			Revenue Ratio*(%)
Sales/Purchase	LG Display America Inc. (Subsidiary)	Jan. 1, 2022 ~ Dec. 31, 2022		13,652,127		46	%		48	%
Sales/Purchase	LG Display Japan Co., Ltd. (Subsidiary)	Jan. 1, 2022 ~ Dec. 31, 2022		2,300,278		8	%		8	%
Sales/Purchase	LG Display Germany GmbH (Subsidiary)	Jan. 1, 2022 ~ Dec. 31, 2022		2,232,522		8	%		8	%
Sales/Purchase	LG Display Taiwan Co., Ltd. (Subsidiary)	Jan. 1, 2022 ~ Dec. 31, 2022		2,165,786		7	%		8	%
Sales/Purchase	LG Display Nanjing Co., Ltd. (Subsidiary)	Jan. 1, 2022 ~ Dec. 31, 2022		1,810,229		6	%		6	%
Sales/Purchase	LG Display Guangzhou Co., Ltd. (Subsidiary)	Jan. 1, 2022 ~ Dec. 31, 2022		2,527,587		9	%		9	%
Sales/Purchase	LG Display (China) Co., Ltd. (Subsidiary)	Jan. 1, 2022 ~ Dec. 31, 2022		1,716,592		6	%		6	%
Sales/Purchase	LG Display Singapore Pte., Ltd. (Subsidiary)	Jan. 1, 2022 ~ Dec. 31, 2022		2,041,934		7	%		7	%
Sales/Purchase	LG Display Vietnam Haiphong Co., Ltd. (Subsidiary)	Jan. 1, 2022 ~ Dec. 31, 2022		2,620,186		9	%		9	%
Sales/Purchase	LG Display High-Tech (China) Co., Ltd. (Subsidiary)	Jan. 1, 2022 ~ Dec. 31, 2022		2,757,537		9	%		10	%
Debt Guarantee	LG Display Vietnam Haiphong Co., Ltd. (Subsidiary)-	Jun. 28, 2022 ~ Jul. 31, 2029		1,870,650		5	%		6	%

* Ratio in comparison with total assets or revenue, as applicable, in FY 2021 (Separate)

II-I. Individual Transactions of LG Display Co., Ltd with each of its Major Shareholders or their Affiliates, which was equivalent to 1% or more of 2021 Total Assets.

					(KRW Million)
Transaction Type	Counterpart (Relationship)	Transaction Period	Transaction Amount	Assets Ratio*(%)	Revenue Ratio*(%)
Debt Guarantee	LG Display Vietnam Haiphong Co., Ltd. (Subsidiary)-	Jun. 28, 2022 ~ Jul. 31, 2029	1,870,650	5%	6%

* Ratio in comparison with total assets or revenue, as applicable, in FY 2021 (Separate)

III. Reference Relating to AGM

1. Matters Relating to the Annual General Meeting

A. Date and Time: 9:00 A.M., March 21, 2023 (Tuesday)

B. Venue: Learning Center, LG Display Paju Display Cluster, 245, LG-ro, Wollong-myeon, Paju-si, Gyeonggi-do, Korea (provided, however, in the cases of extraordinary circumstances, the Chief Executive Officer will have the authority to change the venue)

2. Agenda for Meeting

A. For Reporting

(1) Audit Committee’s Audit Report

(2) Fiscal Year 2022 Business Report

(3) Report on operation of internal accounting management system

(4) Related Party transaction

B. For Approval

(1) Consolidated and Separate the Financial Statements as of and for the fiscal year ended December 31, 2022

(2) Appointment of Director

a. Hoyoung Jeong

b. Jungsuk Oh

c. Sang-Hee Park

(3) Appointment of Audit Committee Member

a. Jungsuk Oh

b. Sang-Hee Park

(4) Remuneration Limit for Directors in 2023 (KRW 4.5 billion)

3. Details of Agenda for Approval

A. Agenda 1: Consolidated and Separate the Financial Statements as of and for the fiscal year ended December 31, 2022

(1) Business Performance in FY 2022

A. Business overview

We were incorporated in February 1985 under the laws of the Republic of Korea. LG Electronics and LG Semicon transferred their respective LCD business to us in 1998, and since then, our business has been focused on the research, development, manufacture and sale of display panels, applying technologies such as TFT-LCD and OLED.

As of December 31, 2022, in Korea we operated TFT-LCD and OLED production facilities and a research center in Paju, TFT-LCD and OLED production facilities in Gumi a research center in Magok. We have also established subsidiaries in the Americas, Europe and Asia.

As of December 31, 2022, our business consisted of the manufacture and sale of display and display related products utilizing TFT-LCD, OLED and other technologies under a single reporting business segment.

2022 Financial highlights by business (based on K-IFRS)

	(Unit: In billions of Won)
2022	Display Business
Sales		26,152
Gross Profit		1,124
Operating Profit(Loss)		(2,085	)

B. Major products

We manufacture TFT-LCD and OLED panels, majorly used for televisions, IT and Mobile products.

				(Unit: In billions of Won, except percentages)
Business area	Sales Type	Items	Usage	Major trademark	Sales in 2022 (%)
Display	Product/ Service/ Other Sales	Televisions	Panels for televisions	LG Display	6,975 (27%)
		IT	Panels for notebook computers, monitors and tablets	LG Display	11,198 (43%)
		Mobile, etc.	Panels for smartphones, etc.	LG Display	8,192 (31%)
Total			—	—	26,365 (100%)

(1) Based on ship-to-party

(2) Any discrepancies between the total and the sums of the amounts listed are due to rounding

(3) Sales revenues exclude loss related to currency forward instruments in the amount of KRW 213 billion for currency risk management

C. Consolidated Financial Statements

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Consolidated Statements of Financial Position

As of December 31, 2022 and 2021

(In millions of won)	Note	December 31, 2022		December 31, 2021
Assets
Cash and cash equivalents	4, 27	W	1,824,649		3,541,597
Deposits in banks	4, 27		1,722,607		743,305
Trade accounts and notes receivable, net	5, 15, 27, 30		2,358,914		4,574,789
Other accounts receivable, net	5, 27		169,426		121,899
Other current financial assets	6, 27, 28		165,355		68,203
Inventories	7		2,872,918		3,350,375
Prepaid income taxes			5,275		58,536
Other current assets	5		324,891		728,363
Total current assets			9,444,035		13,187,067
Deposits in banks	4, 27		11		11
Investments in equity accounted investees	8		109,119		126,719
Other non-current accounts receivable, net	5, 27		—		2,376
Other non-current financial assets	6, 27, 28		289,098		156,211
Property, plant and equipment, net	9, 18, 29		20,946,933		20,558,446
Intangible assets, net	10, 18		1,752,957		1,644,898
Investment Property	11		28,269
Deferred tax assets	25		2,645,077		2,307,692
Defined benefits assets, net	13		447,521		68,276
Other non-current assets			22,999		102,819
Total non-current assets			26,241,984		24,967,448
Total assets		W	35,686,019		38,154,515
Liabilities
Trade accounts and notes payable	27, 30	W	4,061,684		4,814,055
Current financial liabilities	12, 27, 28		5,489,254		4,069,712
Other accounts payable	27		3,242,929		3,401,346
Accrued expenses			729,193		1,218,456
Income tax payable			112,429		179,335
Provisions	14		173,322		173,431
Advances received			65,069		67,046
Other current liabilities			87,640		71,436
Total current liabilities			13,961,520		13,994,817
Non-current financial liabilities	12, 27, 28		9,622,352		8,702,745
Non-current provisions	14		86,157		92,942
Defined benefit liabilities, net	13		1,531		1,589
Deferred tax liabilities	25		4,346		6,636
Other non-current liabilities	27		690,886		593,285
Total non-current liabilities			10,405,272		9,397,197
Total liabilities			24,366,792		23,392,014
Equity
Share capital	16		1,789,079		1,789,079
Share premium	16		2,251,113		2,251,113
Retained earnings	16		5,359,769		8,541,521
Reserves	16		479,628		537,142
Total equity attributable to owners of the Controlling Company			9,879,589		13,118,855
Non-controlling interests			1,439,638		1,643,646
Total equity			11,319,227		14,762,501
Total liabilities and equity		W	35,686,019		38,154,515

See accompanying notes to the consolidated financial statements.

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income(Loss)

For the years ended December 31, 2022 and 2021

(In millions of won, except earnings per share)	Note	2022			2021
Revenue	17, 18, 30	W	26,151,781			29,878,043
Cost of sales	7, 19, 30		(25,027,703	)		(24,572,939	)
Gross profit			1,124,078			5,305,104
Selling expenses	19, 20		(895,602	)		(933,043	)
Administrative expenses	19, 20		(931,117	)		(919,409	)
Research and development expenses	19		(1,382,406	)		(1,222,044	)
Operating profit (loss)			(2,085,047	)		2,230,608
Finance income	23		873,059			425,835
Finance costs	23		(966,363	)		(916,614	)
Other non-operating income	22		3,185,837			1,252,135
Other non-operating expenses	19, 22		(4,446,414	)		(1,280,859	)
Equity in income of equity accounted investees, net	8		5,558			7,780
Profit (loss) before income tax			(3,433,370	)		1,718,885
Income tax expense (benefit)	24		(237,785	)		385,341
Profit (loss) for the year			(3,195,585	)		1,333,544
Other comprehensive income (loss)
Items that will never be reclassified to profit or loss
Remeasurements of net defined benefit liabilities	13, 24		122,361			(163,363	)
Other comprehensive income (loss) from associates	8		32			(84	)
			122,393			(163,447	)
Items that are or may be reclassified to profit or loss
Foreign currency translation differences for foreign operations	24		(80,963	)		869,789
Loss on valuation of derivative	16, 24		9,227			(9,227	)
Other comprehensive income (loss) from associates	8, 24		(9,710	)		4,497
			(81,446	)		865,059
Other comprehensive income for the year, net of income tax			40,947			701,612
Total comprehensive income (loss) for the year		W	(3,154,638	)		2,035,156
Profit (loss) attributable to:
Owners of the Controlling Company			(3,071,565	)		1,186,182
Non-controlling interests			(124,020	)		147,362
Profit (loss) for the year		W	(3,195,585	)		1,333,544
Total comprehensive income (loss) attributable to:
Owners of the Controlling Company			(3,006,686	)		1,723,323
Non-controlling interests			(147,952	)		311,833
Total comprehensive income (loss) for the year		W	(3,154,638	)		2,035,156
Earnings (loss) per share (in won)
Basic earning (loss) per share	26	W	(8,584	)		3,315
Diluted earning (loss) per share	26	W	(8,584	)		3,130

See accompanying notes to the consolidated financial statements.

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Consolidated Statements of Changes in Equity

For the years ended December 31, 2022 and 2021

	Attributable to owners of the Controlling Company
(In millions of won)	Share capital		Share premium		Retained earnings			Reserves			Sub-total			Non-controlling interests			Total equity
Balances at January 1, 2021	W	1,789,079		2,251,113		7,518,786			(163,446	)		11,395,532			1,335,896			12,731,428
Total comprehensive income (loss) for the year
Profit (loss) for the year		—		—		1,186,182			—			1,186,182			147,362			1,333,544
Other comprehensive income (loss)
Remeasurements of net defined benefit liabilities, net of tax		—		—		(163,363	)		—			(163,363	)		—			(163,363	)
Foreign currency translation differences		—		—		—			705,318			705,318			164,471			869,789
Other comprehensive income (loss) from associates		—		—		(84	)		4,497			4,413			—			4,413
Loss on valuation of derivative		—		—		—			(9,227	)		(9,227	)		—			(9,227	)
Total other comprehensive income		—		—		(163,447	)		700,588			537,141			164,471			701,612
Total comprehensive income for the year	W	—		—		1,022,735			700,588			1,723,323			311,833			2,035,156
Transaction with owners, recognized directly in equity
Subsidiaries’ dividends distributed to non-controlling interests		—		—		—			—			—			(4,083	)		(4,083	)
Balances at December 31, 2021	W	1,789,079		2,251,113		8,541,521			537,142			13,118,855			1,643,646			14,762,501
Balances at January 1, 2022	W	1,789,079		2,251,113		8,541,521			537,142			13,118,855			1,643,646			14,762,501
Total comprehensive income (loss) for the year
Profit for the year		—		—		(3,071,565	)		—			(3,071,565	)		(124,020	)		(3,195,585	)
Other comprehensive income (loss)
Remeasurements of net defined benefit liabilities, net of tax		—		—		122,361			—			122,361			—			122,361
Foreign currency translation differences		—		—		—			(57,031	)		(57,031	)		(23,932	)		(80,963	)
Other comprehensive income (loss) from associates		—		—		32			(9,710	)		(9,678	)		—			(9,678	)
Loss on valuation of derivative		—		—		—			9,227			9,227			—			9,227
Total other comprehensive income (loss)		—		—		122,393			(57,514	)		64,879			(23,932	)		40,947
Total comprehensive income for the year	W	—		—		(2,949,172	)		(57,514	)		(3,006,686	)		(147,952	)		(3,154,638	)
Transaction with owners, recognized directly in equity
Subsidiaries’ dividends distributed to non-controlling interests		—		—		—			—			—			(56,056	)		(56,056	)
Dividends		—		—		(232,580	)		—			(232,580	)		—			(232,580	)
Total transaction with owners, recognized directly in equity		—		—		(232,580	)		—			(232,580	)		(56,056	)		(288,636	)
Balances at December 31, 2022	W	1,789,079		2,251,113		5,359,769			479,628			9,879,589			1,439,638			11,319,227

See accompanying notes to the consolidated financial statements.    

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the years ended December 31, 2022 and 2021

(In millions of won)	Note	2022			2021
Cash flows from operating activities:
Profit (loss) for the year		W	(3,195,585	)		1,333,544
Adjustments for:
Income tax expense (benefit)	24		(237,785	)		385,341
Depreciation and amortization	9, 10, 11, 19		4,557,457			4,500,701
Gain on foreign currency translation			(702,144	)		(74,125	)
Loss on foreign currency translation			449,980			193,095
Expenses related to defined benefit plans	13, 21		168,260			144,241
Gain on disposal of property, plant and equipment			(25,737	)		(19,367	)
Loss on disposal of property, plant and equipment			54,432			64,350
Impairment loss on property, plant and equipment			1,260,436			19,085
Reversal of impairment loss on property, plant and equipment			(3,181	)		(1,121	)
Gain on disposal of intangible assets			—			(196	)
Loss on disposal of intangible assets			193			—
Impairment loss on intangible assets			136,372			29,488
Reversal of impairment loss on intangible assets			(1,975	)		(1,152	)
Impairment loss on investment property			7,736
Expense on increase of provisions			253,075			216,873
Finance income			(607,501	)		(352,423	)
Finance costs			781,205			832,596
Equity in income of equity method accounted investees, net	8		(5,558	)		(7,780	)
Other income			(1,681	)		—
Other expenses			—			15,538
			6,083,584			5,945,144
Changes in:
Trade accounts and notes receivable			1,833,491			(964,130	)
Other accounts receivable			(55,073	)		20,395
Inventories			390,672			(1,123,239	)
Lease receivables			7,684			4,765
Other current assets			435,838			107,679
Other non-current assets			(10,125	)		(58,821	)
Trade accounts and notes payable			(282,082	)		1,037,950
Other accounts payable			(625,606	)		72,640
Accrued expenses			(514,500	)		580,404
Provisions			(259,969	)		(237,601	)
Advances received			(1,977	)		(268,074	)
Other current liabilities			(4,188	)		9,100
Defined benefit liabilities, net			(381,405	)		(208,199	)
Other non-current liabilities			167,868			11,144
			700,628			(1,015,987	)
Cash generated from operating activities			3,588,627			6,262,701
Income taxes paid			(153,969	)		(118,305	)
Interests received			77,219			79,188
Interests paid			(500,857	)		(470,138	)
Net cash provided by operating activities		W	3,011,020			5,753,446

See accompanying notes to the consolidated financial statements.    

Consolidated Statements of Cash Flows, Continued

For the years ended December 31, 2022 and 2021

(In millions of won)	Note	2022			2021
Cash flows from investing activities:
Dividends received		W	4,461			4,068
Increase in deposits in banks			(1,769,668	)		(694,313	)
Proceeds from withdrawal of deposits in banks			756,267			77,152
Acquisition of financial assets at fair value through profit or loss			(27,100	)		(34,418	)
Proceeds from disposal of financial assets at fair value through profit or loss			412			5,226
Acquisition of financial assets at fair value through other comprehensive income			(3,934	)
Proceeds from disposal of financial assets at fair value through other comprehensive income			3,547			24
Proceeds from disposal of investments in equity accounted investees			4,800			4,363
Acquisition of property, plant and equipment			(5,079,279	)		(3,141,430	)
Proceeds from disposal of property, plant and equipment			171,421			65,711
Acquisition of intangible assets			(830,583	)		(635,805	)
Proceeds from disposal of intangible assets			11,392			2,946
Government grants received			57,503			85,983
Receipt from settlement of derivatives			49,145			8,344
Increase in short-term loans			(9,643	)
Proceeds from collection of short-term loans			9,608			14,533
Increase in long-term loans			(54,033	)		(26,473	)
Increase in deposits			(2,676	)		(7,145	)
Decrease in deposits			6,727			8,154
Proceeds from disposal of other assets			1,464			—
Net cash used in investing activities			(6,700,169	)		(4,263,080	)
Cash flows from financing activities:	28
Proceeds from short-term borrowings			4,487,824			2,573,757
Repayments of short-term borrowings			(2,565,541	)		(2,425,117	)
Proceeds from issuance of bonds			443,230			498,027
Proceeds from long-term borrowings			4,165,508			1,298,346
Repayments of current portion of long-term borrowings and bonds			(4,209,915	)		(4,344,208	)
Repayment of lease liabilities			(82,296	)		(66,941	)
Dividends paid			(232,580	)		—
Capital contribution from non-controlling interests						—
Subsidiaries’ dividends distributed to non-controlling interests			(60,206	)		—
Net cash provided by (used in) financing activities			1,946,024			(2,466,136	)
Net increase (decrease) in cash and cash equivalents			(1,743,125	)		(975,770	)
Cash and cash equivalents at January 1			3,541,597			4,218,099
Effect of exchange rate fluctuations on cash held			26,177			299,268
Cash and cash equivalents at December 31		W	1,824,649			3,541,597

See accompanying notes to the consolidated financial statements.    

1. Reporting Entity

(a) Description of the Controlling Company

LG Display Co., Ltd. (the “Controlling Company”) was incorporated in February 1985 and the Controlling Company is a public corporation listed in the Korea Exchange since 2004. The main business of the Controlling Company and its subsidiaries (the “Group”) is to manufacture and sell displays and its related products. As of December 31, 2022, the Group is operating Thin Film Transistor Liquid Crystal Display (“TFT-LCD”) and Organic Light Emitting Diode (“OLED”) panel manufacturing plants in Gumi, Paju and China and TFT-LCD and OLED module manufacturing plants in Gumi, Paju, China and Vietnam. The Controlling Company is domiciled in the Republic of Korea with its address at 128 Yeouidae-ro, Yeongdeungpo-gu, Seoul, the Republic of Korea. As of December 31, 2022, LG Electronics Inc., a major shareholder of the Controlling Company, owns 37.9% (135,625,000 shares) of the Controlling Company’s common stock.

The Controlling Company’s common stock is listed on the Korea Exchange under the identifying code 034220. As of December 31, 2022, there are 357,815,700 shares of common stock outstanding. The Controlling Company’s common stock is also listed on the New York Stock Exchange in the form of American Depository Shares (“ADSs”) under the symbol “LPL”. One ADS represents one-half of one share of common stock. As of December 31, 2022, there are 16,674,488 ADSs outstanding.

1. Reporting Entity, Continued

(b) Consolidated Subsidiaries as of December 31, 2022

(In millions)
Subsidiaries	Location	Percentage of ownership	Fiscal year end	Date of incorporation	Business	Capital stocks
LG Display America, Inc.	San Jose, U.S.A.	100%	December 31	September 24, 1999	Sell display products	USD	411
LG Display Germany GmbH	Eschborn, Germany	100%	December 31	October 15, 1999	Sell display products	EUR	1
LG Display Japan Co., Ltd.	Tokyo, Japan	100%	December 31	October 12, 1999	Sell display products	JPY	95
LG Display Taiwan Co., Ltd.	Taipei, Taiwan	100%	December 31	April 12, 1999	Sell display products	NTD	116
LG Display Nanjing Co., Ltd.	Nanjing, China	100%	December 31	July 15, 2002	Manufacture display products	CNY	3,020
LG Display Shanghai Co., Ltd.	Shanghai, China	100%	December 31	January 16, 2003	Sell display products	CNY	4
LG Display Guangzhou Co., Ltd.	Guangzhou, China	100%	December 31	June 30, 2006	Manufacture display products	CNY	1,655
LG Display Shenzhen Co., Ltd.	Shenzhen, China	100%	December 31	July 27, 2007	Sell display products	CNY	4
LG Display Singapore Pte. Ltd.	Singapore	100%	December 31	November 4, 2008	Sell display products	USD	1
L&T Display Technology (Fujian) Limited	Fujian, China	51%	December 31	December 7, 2009	Manufacture and sell LCD module and LCD monitor sets	CNY	116
LG Display Yantai Co., Ltd.	Yantai, China	100%	December 31	March 17, 2010	Manufacture display products	CNY	1,008
Nanumnuri Co., Ltd.	Gumi, South Korea	100%	December 31	March 21, 2012	Provide janitorial services	KRW	800
LG Display (China) Co., Ltd.	Guangzhou, China	70%	December 31	December 10, 2012	Manufacture and sell display products	CNY	8,232
Unified Innovative Technology, LLC	Wilmington, U.S.A.	100%	December 31	March 12, 2014	Manage intellectual property	USD	9
LG Display Guangzhou Trading Co., Ltd.	Guangzhou, China	100%	December 31	April 28, 2015	Sell display products	CNY	1
Global OLED Technology, LLC	Sterling, U.S.A.	100%	December 31	December 18, 2009	Manage OLED intellectual property	USD	138
LG Display Vietnam Haiphong Co., Ltd.	Haiphong, Vietnam	100%	December 31	May 5, 2016	Manufacture display products	USD	600
Suzhou Lehui Display Co., Ltd.	Suzhou, China	100%	December 31	July 1, 2016	Manufacture and sell LCD module and LCD monitor sets	CNY	637
LG DISPLAY FUND I LLC(*)	Wilmington, U.S.A.	100%	December 31	May 1, 2018	Invest in venture business and acquire technologies	USD	71
LG Display High-Tech (China) Co., Ltd.	Guangzhou, China	70%	December 31	July 11, 2018	Manufacture and sell display products	CNY	15,600

(*) For the year ended December 31, 2022, the Controlling Company contributed W33,137 million in cash for the capital increase of LG DISPLAY FUND I LLC. There was no change in the Controlling Company’s percentage of ownership in LG DISPLAY FUND I LLC as a result of this additional investment.

1. Reporting Entity, Continued

(c) Summary of financial information of subsidiaries as of and for the years ended December 31, 2022 and 2021 is as follows:

(In millions of won)	December 31, 2022						2022
Subsidiaries	Total assets		Total liabilities		Total shareholders’ equity		Sales		Net income (loss)
LG Display America, Inc.	W	1,240,164		1,204,010		36,154		13,071,380		8,040
LG Display Germany GmbH		390,689		364,332		26,357		1,786,103		7,724
LG Display Japan Co., Ltd.		161,437		153,479		7,958		1,740,626		1,766
LG Display Taiwan Co., Ltd.		286,732		261,987		24,745		2,061,856		3,298
LG Display Nanjing Co., Ltd.		3,090,527		2,019,251		1,071,276		2,004,475		135,412
LG Display Shanghai Co., Ltd.		270,677		254,918		15,759		736,004		2,982
LG Display Guangzhou Co., Ltd.		3,912,242		2,497,036		1,415,206		3,063,485		143,464
LG Display Shenzhen Co., Ltd.		131,443		121,142		10,301		886,333		3,753
LG Display Singapore Pte. Ltd.		855,851		840,675		15,176		1,859,992		5,451
L&T Display Technology (Fujian) Limited		284,586		204,320		80,266		1,358,301		9,897
LG Display Yantai Co., Ltd.		788,047		201,087		586,960		487,990		119,160
Nanumnuri Co., Ltd.		5,088		3,661		1,427		25,507		194
LG Display (China) Co., Ltd.		2,491,887		337,994		2,153,893		1,921,939		133,486
Unified Innovative Technology, LLC		2,094		7		2,087		—		(927	)
LG Display Guangzhou Trading Co., Ltd.		1,308,767		1,278,500		30,267		593,539		20,975
Global OLED Technology, LLC		51,884		4,877		47,007		9,268		(7,828	)
LG Display Vietnam Haiphong Co., Ltd.		4,911,791		3,781,985		1,129,806		2,672,155		112,167
Suzhou Lehui Display Co., Ltd.		248,701		86,554		162,147		621,616		16,031
LG DISPLAY FUND I LLC		84,106		27		84,079		—		5,487
LG Display High-Tech (China) Co., Ltd.		5,658,548		3,143,290		2,515,258		2,766,043		(561,016	)
	W	26,175,261		16,759,132		9,416,129		37,666,612		159,516

1. Reporting Entity, Continued

(In millions of won)	December 31, 2021						2021
Subsidiaries	Total assets		Total liabilities		Total shareholders’ equity		Sales		Net income (loss)
LG Display America, Inc.	W	1,891,725		1,865,145		26,580		13,585,364		(159	)
LG Display Germany GmbH		614,248		597,574		16,674		2,107,714		2,732
LG Display Japan Co., Ltd.		482,445		475,847		6,598		2,332,536		731
LG Display Taiwan Co., Ltd.		472,948		450,519		22,429		2,171,271		2,282
LG Display Nanjing Co., Ltd.		2,072,881		1,103,251		969,630		1,892,179		109,201
LG Display Shanghai Co., Ltd.		575,263		562,025		13,238		934,122		(14,074	)
LG Display Guangzhou Co., Ltd.		4,792,782		3,480,019		1,312,763		3,371,505		128,300
LG Display Shenzhen Co., Ltd.		115,545		108,635		6,910		530,023		(10,404	)
LG Display Singapore Pte. Ltd.		520,448		511,128		9,320		2,049,047		1,498
L&T Display Technology (Fujian) Limited		432,190		359,239		72,951		1,307,982		(8,946	)
LG Display Yantai Co., Ltd.		898,976		411,696		487,280		630,996		(11,857	)
Nanumnuri Co., Ltd.		9,907		6,673		3,234		26,068		898
LG Display (China) Co., Ltd.		2,651,061		355,541		2,295,520		2,175,878		380,788
Unified Innovative Technology, LLC		2,814		16		2,798		—		(182	)
LG Display Guangzhou Trading Co., Ltd.		703,527		693,105		10,422		1,535,452		1,753
Global OLED Technology, LLC		61,074		9,963		51,111		9,322		(5,714	)
LG Display Vietnam Haiphong Co., Ltd.		4,093,339		3,148,557		944,782		2,592,983		270,441
Suzhou Lehui Display Co., Ltd.		332,856		181,707		151,149		614,070		7,040
LG DISPLAY FUND I LLC		43,294		33		43,261		—		49
LG Display High-Tech (China) Co., Ltd.		6,803,960		3,713,739		3,090,221		2,817,308		125,446
	W	27,571,283		18,034,412		9,536,871		40,683,820		979,823

1. Reporting Entity, Continued

(d) Information of subsidiaries(before elimination of intercompany transactions) which have significant non-controlling interests as of and for the years ended December 31, 2022 and 2021 are as follows:

(In millions of won)
	2022
	LG Display (China) Co., Ltd.			LG Display High-Tech (China) Co., Ltd.
Percentage of ownership in non-controlling interest(%)		30			30
Current assets	W	1,916,867			2,112,295
Non-current assets		575,020			3,546,253
Current liabilities		336,575			820,041
Non-current liabilities		1,419			2,323,249
Net assets		2,153,893			2,515,258
Book value of non-controlling interests		646,199			753,191
Revenue	W	1,921,939			2,766,043
Profit(Loss) for the year		133,486			(561,016	)
Profit(Loss) attributable to non-controlling interests		39,981			(168,474	)
Cash flows from operating activities	W	486,103			153,043
Cash flows from investing activities		(371,454	)		424,405
Cash flows from financing activities		(223,222	)		(455,746	)
Effect of exchange rate fluctuations on cash held		2,347			(7,471	)
Net decrease in cash and cash equivalents		(106,226	)		114,231
Cash and cash equivalents at January 1		131,770			39,330
Cash and cash equivalents at December 31		25,544			153,561
Dividends distributed to non-controlling interests	W	56,056			—

1. Reporting Entity, Continued

(In millions of won)
	2021
	LG Display (China) Co., Ltd.			LG Display High-Tech (China) Co., Ltd.
Percentage of ownership in non-controlling interest (%)		30			30
Current assets	W	1,987,880			1,551,346
Non-current assets		663,181			5,252,614
Current liabilities		324,075			1,261,412
Non-current liabilities		31,466			2,452,327
Net assets		2,295,520			3,090,221
Book value of non-controlling interests		680,757			925,848
Revenue	W	2,175,878			2,817,308
Profit(Loss) for the year		380,788			125,446
Profit(Loss) attributable to non-controlling interests		114,301			37,803
Cash flows from operating activities	W	890,435			709,243
Cash flows from investing activities		(619,615	)		(315,176	)
Cash flows from financing activities		(439,390	)		(665,170	)
Effect of exchange rate fluctuations on cash held		23,538			19,972
Net increase (decrease) in cash and cash equivalents		(145,032	)		(251,131	)
Cash and cash equivalents at January 1		276,802			290,461
Cash and cash equivalents at December 31		131,770			39,330
Dividends distributed to non-controlling interests	W	—			—

2. Basis of Presenting Financial Statements

(a) Statement of Compliance

In accordance with the Act on External Audits of Stock Companies, Etc., these consolidated financial statements have been prepared in accordance with Korean International Financial Reporting Standards (“K-IFRS”).

The consolidated financial statements were authorized for issuance by the Board of Directors on January 26, 2023, which will be submitted for approval to the shareholders’ meeting to be held on March 21, 2023.

(b) 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:

• derivative financial instruments at fair value, financial assets at fair value through profit or loss (“FVTPL”), financial assets at fair value through other comprehensive income (“FVOCI”), financial liabilities at fair value through profit or loss (“FVTPL”), and

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

(c) 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.

(d) Use of Estimates and Judgments

The preparation of the consolidated financial statements in conformity with K-IFRSs requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

Information about critical judgments in applying accounting policies that have the most significant effect on the amounts recognized in the consolidated financial statements is included in the following notes:

• Financial instruments (Note 3(e))

• Impairment assessment of non-financial assets (Note 3(k), 10)

• Deferred tax assets and liabilities (Note 3(s), 25)

2. Basis of Presenting Financial Statements, Continued

(d) Use of Estimates and Judgments, Continued

Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment within the next 12 months is included in the following notes:

• Provisions (Note 3(m), 14)

• Inventories (Note 3(d), 7)

• Property, plant and equipment (Note 9)

• Intangible assets (Impairment assessment of non-financial assets) (Note 10)

• Employee benefits (Note 13)

• Deferred tax assets and liabilities (Note 25)

3. Summary of Significant Accounting Policies

The significant accounting policies applied in these consolidated financial statements are the same as those applied in the Group’s consolidated financial statements as of and for the year ended December 31, 2021 and the significant accounting policies followed by the Group in the preparation of its consolidated financial statements are as follows:

(a) Consolidation

(i) Business Combinations

The Group accounts for business combinations using the acquisition method except for a combination of entities or businesses under common control. The consideration transferred in the acquisition is generally measured at fair value, as are the identifiable net assets acquired. If the aggregate sum of consideration transferred and non-controlling interest exceeds the fair value of identifiable net asset, the Group recognizes goodwill; if not, then the Group recognizes gain on a bargain purchase. Any goodwill that arises is tested annually for impairment. Transaction costs are expensed as incurred, except if related to the issue of debt or equity instruments in accordance with K-IFRS No. 1032 and K-IFRS No. 1109. The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are generally recognized in profit or loss.

3. Summary of Significant Accounting Policies, Continued

(a) Consolidation, Continued

(ii) Subsidiaries

Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed, or has right to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until the date on which control ceases.

(iii) Non-controlling interests

Non-controlling interests (“NCI”) are measured at their proportionate share of the acquiree’s identifiable net assets at the acquisition date. Profit or loss and other comprehensive income (loss) of subsidiaries are attributed to owners of the Controlling Company and non-controlling interests.

Changes in the Group’s interest in subsidiaries that do not result in a loss of control are accounted for as equity transactions.

(iv) Loss of Control

If the Controlling Company loses control of subsidiaries, the Controlling Company derecognizes the assets and liabilities of the former subsidiaries from the consolidated statement of financial position and recognizes the gain or loss associated with the loss of control attributable to the former controlling interest. Meanwhile, the Controlling Company recognizes any investment retained in the former subsidiaries at its fair value when control is lost.

(v) Associates and joint ventures (equity method investees)

Associates are those entities in which the Group has significant influence, but not control or joint control, over the financial and operating policies. A joint venture is an arrangement in which the parties have joint control, whereby the parties has rights to the net assets of the arrangement, rather than rights to its assets and obligations for its liabilities.

Investments in associates and joint ventures are initially recognized at cost and subsequently accounted for using the equity method of accounting. The carrying amount of investments in associates and joint ventures is increased or decreased to recognize the Group’s share of the profits or losses and changes in the Group’s proportionate interest of the investee after the date of acquisition. Distributions received from an investee reduce the carrying amount of the investment.

If an associate or a joint venture uses accounting policies different from those of the Controlling Company for like transactions and events in similar circumstances, appropriate adjustments are made to the consolidated financial statements. As of and during the periods presented in the consolidated financial statements, no adjustments were made in applying the equity method.

When the Group’s share of losses exceeds its interest in an equity accounted investee, the carrying amount of that interest, including any long-term investments, is reduced to nil, and the recognition of further losses is discontinued except to the extent that the Group has an obligation or has made payments on behalf of the investee.

3. Summary of Significant Accounting Policies, Continued

(a) Consolidation, Continued

(vi) Transactions eliminated on consolidation

Intra-group balances and transactions, including income and expenses and any unrealized income and expenses and balance of trade accounts and notes receivable and payable arising from intra-group transactions, are eliminated. Unrealized gains arising from transactions with equity-accounted investees are eliminated against the investment to the extent of the Group’s interest in the investee. Unrealized losses are eliminated in the same way as unrealized gains, but only to the extent that there is no evidence of impairment.

(b) Foreign Currency Transaction and Translation

Transactions in foreign currencies are translated to the respective functional currencies of the Group entities at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are retranslated to the functional currency at the exchange rate on the reporting date. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the date that the fair value was originally determined. Foreign currency differences arising on retranslation are recognized in profit or loss, except for differences arising on an investment in equity instruments designated as at FVOCI and a financial asset and liability designated as a cash flow hedge, which are recognized in other comprehensive income. Exchange differences arising on the settlement of monetary items or on translating monetary items at rates different from those at which they were translated on initial recognition are recognized in profit or loss in the period in which they arise. Foreign currency differences arising from assets and liabilities in relation to the investing and financing activities including borrowings, bonds and cash and cash equivalents are recognized in finance income (costs) in the consolidated statement of comprehensive income (loss) and foreign currency differences arising from assets and liabilities in relation to activities other than investing and financing activities are recognized in other non-operating income (expense) in the consolidated statement of comprehensive income (loss). Foreign currency differences are presented in gross amounts in the consolidated statement of comprehensive income (loss).

If the presentation currency of the Group is different from a foreign operation’s functional currency, the financial position and financial performance of the foreign operation are translated into the presentation currency using the following methods. The assets and liabilities of foreign operations, whose functional currency is not the currency of a hyperinflationary economy are translated to the Group’s functional currency at exchange rates at the reporting date. The income and expenses of foreign operations are translated to the Group’s functional currency at exchange rates at the dates of the transactions and foreign currency differences are recognized in other comprehensive income (loss). Relevant proportionate shares of foreign currency differences are allocated to the controlling interests and non-controlling interests. When a foreign operation is disposed of in its entirety or partially such that control, significant influence or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal. If the Group disposes part of its interest in a subsidiary but retains control, then the relevant proportion of the cumulative amount is reattributed to NCI. When the Group disposes of only part of an associate or joint venture while retaining significant influence or joint control, the relevant proportion of the cumulative amount is reclassified to profit or loss.

Any goodwill arising on the acquisition of a foreign operation and any fair value adjustments to the carrying amounts of assets and liabilities arising on the acquisition of that foreign operation is treated as assets and liabilities of the foreign operation. Thus, they are expressed in the functional currency of the foreign operation and translated at the at each reporting date’s exchange rate.

3. Summary of Significant Accounting Policies, Continued

(c) Cash and cash equivalents

Cash and cash equivalents include all cash balances and short-term highly liquid investments with an original maturity of three months or less that are readily convertible into known amounts of cash.

(d) Inventories

Inventories are measured at the lower of cost and net realizable value. The cost of inventories is based on the weighted-average method, and includes expenditures incurred in acquiring the inventories, production or conversion costs and other costs incurred in bringing them to their existing location and condition. Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated selling expenses. In the case of manufactured inventories and work-in-process, cost includes an appropriate share of production overheads based on the actual capacity of production facilities. However, the normal capacity is used for the allocation of fixed production overheads if the actual level of production is lower than the normal capacity.

(e) Financial Instruments

(i) Non-derivative financial assets

Recognition and initial measurement

Trade receivables and debt instruments issued are initially recognized when they are originated. All other financial assets are recognized in statement of financial position when, and only when, the Group becomes a party to the contractual provisions of the instrument.

A financial asset (unless it is a trade receivable without a significant financing component) is initially measured at fair value plus, for an item not at FVTPL, transaction costs that are directly attributable to its acquisition or issue. A trade receivable without a significant financing component is initially measured at the transaction price.

Classification and subsequent measurement

i) Financial assets

On initial recognition, a financial asset is classified as measured at: amortized cost; FVOCI – debt investment; FVOCI – equity investments; or FVTPL. Financial assets are not reclassified subsequent to their initial recognition unless the Group changes its business model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the subsequent reporting period following the change in the business model.

A financial asset is measured as at amortized cost if it meets both of the following conditions and is not designated as at FVTPL:

• it is held within a business model whose objective is to hold assets to collect contractual cash flows; and

• its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

3. Summary of Significant Accounting Policies, Continued

(e) Financial Instruments, Continued

A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL:

• it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and

• the contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

On initial recognition of an equity investments that is not held for trading, the Group may irrevocably elect to present subsequent changes in the investment’s fair value in OCI. This election is made on an investment-by-investment basis.

All financial assets not classified as measured at amortized cost or FVOCI as described above are measured as at FVTPL. This includes all derivative financial assets. At initial recognition, the Group may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortized cost or at FVOCI as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

ii) Financial assets: business model

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. The information considered includes:

• the stated policies and objectives for the portfolio and the operation of those policies in practice (these include whether management’s strategy focuses on earning contractual interest income, maintaining a particular interest rate profile, matching the duration of the financial assets to the duration of any related liabilities or expected cash outflows or realizing cash flows through the sale of the assets);

• how the performance of the portfolio is evaluated and reported to the Group’s management;

• the risks that affect the performance of the business model (and the financial assets held within that business model) and how those risks are managed; and

• the frequency, volume and timing of sales of financial assets in prior periods, the reasons for such sales and expectations about future sales activity.

Transfers of financial assets to third parties in transaction that do not qualify for derecognition are not considered sale for this purpose.

A financial asset that is held for trading or is managed and whose performance is evaluated on a fair value basis is measured at FVTPL.

3. Summary of Significant Accounting Policies, Continued

(e) Financial Instruments, Continued

iii) Financial assets: Assessment whether contractual cash flows are solely payments of principal and interest

For the purpose of the assessment, “principal” is defined as the fair value of the financial asset on initial recognition. ‘Interest’ is defined as consideration for the time value of money and for the credit risk associated with the principal amount outstanding during a particular period of time and for other basic lending risks and cost (e.g. liquidity risk and administrative costs), as well as profit margin.

In assessing whether the contractual cash flows are solely payments of principal and interest, 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)

A prepayment feature is consistent with the solely payments of principal and interest criterion if the prepayment amount substantially represents unpaid amounts of principal and interest or the principal amount outstanding, which may include reasonable additional compensation for early termination of the contract.

Additionally, for a financial asset acquired at a discount or premium to its contractual par amount, a feature that permits or requires prepayment at an amount that substantially represents the contractual par amount plus accrued but unpaid contractual interest (which may also include reasonable additional compensation for early termination) is treated as consistent with this criterion if the fair value of the prepayment feature is insignificant at initial recognition.

iv) Financial assets: Subsequent measurement and gains and losses

Financial assets at FVTPL	These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognized in profit or loss.
Financial assets at amortized cost	These assets are subsequently measured at amortized cost using the effective interest method. The amortized cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognized in profit or loss. Any gain or loss on derecognition is recognized in profit or loss.
Debt investments at FVOCI	These assets are subsequently measured at fair value. Interest income calculated using the effective interest method, foreign exchange gains and losses and impairment are recognized in profit or loss. Other net gains and losses are recognized in OCI. On derecognition, gains and losses accumulated in OCI are reclassified to profit or loss.

3. Summary of Significant Accounting Policies, Continued

(e) Financial Instruments, Continued

Derecognition

The Group derecognizes a financial asset when the contractual rights to the cash flows from the asset expire, it transfers the rights to receive the contractual cash flows of the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred, or it transfers or does not retain substantially all the risks and rewards of ownership of a transferred asset, and does not retain control of the transferred asset.

If the Group has retained substantially all the risks and rewards of ownership of the transferred asset, the Group continues to recognize the transferred asset.

Interest rate benchmark reform

In case the basis for determining the contractual cash flows of a financial asset or financial liability measured at amortized cost changed as a result of interest rate benchmark reform, the Group updates the effective interest rate of the financial asset or financial liability to reflect the change that is required by the reform if both of the following conditions are met:

• the change is necessary as a direct consequence of the reform; and

• the new basis for determining the contractual cash flows is economically equivalent to the previous basis – i.e. the basis immediately before the change.

When changes were made to a financial asset or financial liability in addition to changes to the basis for determining the contractual cash flows required by interest rate benchmark reform, the Group first updates the effective interest rate of the financial asset or financial liability to reflect the change that is required by interest rate benchmark reform. After that, the Group applies the policies on accounting for modifications to the additional changes.

Offset

Financial assets and liabilities are offset and the net amount is presented in the consolidated statement of financial position when, and only when, the Group has a legal right to offset the amounts and intends either to settle them on a net basis or to realize the asset and settle the liability simultaneously.

(ii) Non-derivative financial liabilities

The Group classifies financial liabilities into two categories, financial liabilities at FVTPL and other financial liabilities in accordance with the substance of the contractual arrangement and the definitions of financial liabilities, and recognizes them in the consolidated statement of financial position when the Group becomes a party to the contractual provisions of the instrument.

Financial liabilities at FVTPL include financial liabilities held for trading or designated as such upon initial recognition at FVTPL. After initial recognition, financial liabilities at FVTPL are measured at fair value, and changes therein are recognized in profit or loss. Upon initial recognition, transaction costs that are directly attributable to the issuance of financial liabilities are recognized in profit or loss as incurred.

3. Summary of Significant Accounting Policies, Continued

(e) Financial Instruments, Continued

Non-derivative financial liabilities other than financial liabilities classified as at FVTPL are classified as other financial liabilities and measured initially at fair value minus transaction costs that are directly attributable to the issuance of financial liabilities. Subsequent to initial recognition, these financial liabilities are measured at amortized cost using the effective interest method. As of December 31, 2022, non-derivative financial liabilities comprise borrowings, bonds, trade accounts and notes payable, other accounts payable and others.

The Group derecognizes a financial liability when its contractual obligations are discharged, cancelled or expired.

(iii) Share Capital

The Group issued common stocks and they are classified as equity. Incremental costs directly attributable to the issuance of common stocks are recognized as a deduction from equity, net of tax effects. Capital contributed in excess of par value upon issuance of common stocks is classified as share premium within equity.

(iv) Derivative financial instruments

Derivatives are initially recognized at fair value. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are accounted for as described below.

Hedge Accounting

If necessary, the Group designates derivatives as hedging items to hedge the risk of changes in the fair value of assets, liabilities or firm commitments (a fair value hedge) and foreign currency risk of highly probable forecasted transactions or firm commitments (a cash flow hedge).

On initial designation of the hedge, the Group’s management formally designates and documents the relationship between the hedging instrument(s) and hedged item(s), including the risk management objectives and strategy in undertaking the hedge transaction, together with the methods that will be used to assess the effectiveness of the hedging relationship, both at the inception of the hedge relationship as well as on an ongoing basis.

i) Fair value hedges

Change in the fair value of a derivative hedging instrument designated as a fair value hedge and the hedged item is recognized in profit or loss, respectively. The gain or loss from remeasuring the hedging instrument at fair value and the gain or loss on the hedged item attributable to the hedged risk are recognized in profit or loss in the same line item of the statement of comprehensive income (loss). The Group discontinues fair value hedge accounting if it does not designate the derivative hedging instrument and the hedged item as the hedge relationship between them anymore; if the hedging instrument expires or is sold, terminated or exercised; or if the hedge no longer meets the criteria for hedge accounting.

3. Summary of Significant Accounting Policies, Continued

(e) Financial Instruments, Continued

ii) Cash flow hedges

When a derivative designated as a cash flow hedging instrument meets the criteria of cash flow hedge accounting, the effective portion of changes in the fair value of the derivative is recognized in other comprehensive income and the ineffective portion of changes in the fair value of the derivative is recognized in profit or loss. The Group discontinues cash flow hedge accounting if it does not designate the derivative hedging instrument and the hedged item as the hedge relationship between them anymore; if the hedging instruments expires or is sold, terminated or exercised; or if the hedge no longer meets the criteria for hedge accounting. The cumulative gain or loss on the hedging instrument that has been recognized in other comprehensive income is reclassified to profit or loss in the periods during which the forecasted transaction occurs. If the forecasted transaction is no longer expected to occur, then the balance in other comprehensive income is recognized immediately in profit or loss.

The Group is applying cash flow hedge accounting by designating expected foreign currency denominated sales arising from forecast export transactions as hedging items and the derivative instruments related to forward exchange as hedging instruments. The effective portion of changes in the fair value of the derivative is recognized in equity and the amount accumulated in equity is reclassified to revenue in the same period which forecast sales occur.

Embedded derivative

Embedded derivatives are separated from the host contract and accounted for separately if the host contract is not a financial asset and certain criteria are met.

Other derivative financial instruments

Other derivative financial instruments are measured at fair value and changes of their fair value are recognized in profit or loss.

(f) Property, Plant and Equipment

(i) Recognition and measurement

Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses. Cost includes an expenditure that is directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials and direct labor, any costs directly attributable to bringing the assets to a working condition for their intended use, the costs of dismantling and removing the items and restoring the site on which they are located and borrowing costs on qualifying assets.

The gain or loss arising from the derecognition of an item of property, plant and equipment is determined as the difference between the net disposal proceeds, if any, and the carrying amount of the item and recognized in other non-operating income or other non-operating expenses.

3. Summary of Significant Accounting Policies, Continued

(f) Property, Plant and Equipment, Continued

(ii) Subsequent costs

Subsequent expenditure on an item of property, plant and equipment is recognized as part of its cost only if it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The costs of the day-to-day servicing of property, plant and equipment are recognized in profit or loss as incurred.

(iii) Depreciation

Land is not depreciated and depreciation of other items of property, plant and equipment is recognized in profit or loss on a straight-line basis, reflecting the pattern in which the asset’s future economic benefits are expected to be consumed by the Group. The residual value of property, plant and equipment is zero.

Estimated useful lives of the assets are as follows:

	Estimated useful lives (years)
Buildings and structures	20~40
Machinery	4, 5
Furniture and fixtures	4
Equipment, tools and vehicles	2, 4, 12
Right-of-use assets	(*)

(*) The Group depreciates the right-of-use assets from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term.

Depreciation methods, useful lives and residual values are reviewed at each financial year-end and adjusted if appropriate and any changes are accounted for as changes in accounting estimates.

(g) Borrowing Costs

The Group capitalizes borrowing costs, which includes interests and exchange differences arising from foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs, directly attributable to the acquisition, construction or production of a qualifying asset as part of the cost of that asset. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use or sale. To the extent that the Group borrows funds specifically for the purpose of obtaining a qualifying asset, the Group determines the amount of borrowing costs eligible for capitalization as the actual borrowing costs incurred on that borrowing during the period less any investment income on the temporary investment of those borrowings. The Group immediately recognizes other borrowing costs as an expense.

3. Summary of Significant Accounting Policies, Continued

(h) Government Grants

In case there is reasonable assurance that the Group will comply with the conditions attached to a government grant, the government grant is recognized as follows:

(i) Grants related to the purchase or construction of assets

A government grant related to the purchase or construction of assets is deducted in calculating the carrying amount of the asset. The grant is recognized in profit or loss over the life of a depreciable asset as a reduced depreciation expense and cash related to grant received is presented in investing activities in the statement of cash flows.

(ii) Grants for compensating the Group’s expenses incurred

A government grant that compensates the Group for expenses incurred is recognized in profit or loss as a deduction from relevant expenses on a systematic basis in the periods in which the expenses are recognized.

(iii) Other government grants

A government grant that becomes receivable for the purpose of giving immediate financial support to the Group with no compensation for expenses or losses already incurred or no future related costs is recognized as income of the period in which it becomes receivable.

(i) Intangible Assets

Intangible assets are initially measured at cost. Subsequently, intangible assets are measured at cost less accumulated amortization and accumulated impairment losses.

(i) Goodwill

Goodwill arising from business combinations is recognized as the excess of the acquisition cost of a business over the net fair value of the identifiable assets acquired and liabilities assumed. Any deficit is a bargain purchase that is recognized in profit or loss. Goodwill is measured at cost less accumulated impairment losses.

(ii) Research and development

Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical knowledge and understanding, is recognized in profit or loss as incurred. Development activities involve a plan or design of the production of new or substantially improved products and processes. Development expenditure is capitalized as intangible assets only if the Group can demonstrate all of the following:

3. Summary of Significant Accounting Policies, Continued

(i) Intangible Assets, Continued

• the technical feasibility of completing the intangible asset so that it will be available for use or sale,

• its intention to complete the intangible asset and use or sell it,

• its ability to use or sell the intangible asset,

• how the intangible asset will generate probable future economic benefits (among other things, the Group can demonstrate the usefulness of the intangible asset by existence of a market for the output of the intangible asset or the intangible asset itself if it is to be used internally),

• the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset, and

• its ability to measure reliably the expenditure attributable to the intangible asset during its development.

Development projects are divided into research activities and development activities. Expenditures on research activities are recognized in profit or loss and qualifying development expenditures on development activities are capitalized.

The expenditure capitalized includes the cost of materials, direct labor and overhead costs that are directly attributable to preparing the asset for its intended use, and borrowing costs on qualifying assets.

(iii) Other intangible assets

Other intangible assets include intellectual property rights, software, customer relationships, technology, memberships and others. The group currently has a number of patent license agreements related to product production. When the payments for the contract period can be reliably determined, the total amount is recognized as intangible assets and other account payables, respectively, and intangible assets are amortized on a straight-line basis according to the patent license period.

(iv) Subsequent costs

Subsequent expenditures are capitalized only when they increase the future economic benefits embodied in the specific intangible asset to which they relate. All other expenditures, including expenditures on internally generated goodwill and brands, are recognized in profit or loss as incurred.

(v) Amortization

Amortization is calculated on a straight-line basis over the estimated useful lives of intangible assets, other than goodwill, from the date that they are available for use. The residual value of intangible assets is zero. However, as there are no foreseeable limits to the periods over which condominium and golf club memberships are expected to be available for use, these intangible assets are regarded as having indefinite useful lives and not amortized.

3. Summary of Significant Accounting Policies, Continued

(i) Intangible Assets, Continued

	Estimated useful lives (years)
Intellectual property rights	5, 10, (*1)
Rights to use electricity, water and gas supply facilities	10
Software	4, (*1)
Customer relationships	7, 10
Technology	10
Development costs	(*2)
Condominium and golf club memberships	Indefinite

(*1) Software license and patent royalty are amortized over the useful lives considering the contract period.

(*2) Capitalized development costs are amortized over the useful lives considering the life cycle of the developed products. Amortization of capitalized development costs are recognized in research and development expenses in the consolidated statement of comprehensive income (loss).

Amortization periods and the amortization methods for intangible assets with finite useful lives are reviewed at each financial year-end. The useful lives of intangible assets with indefinite useful lives are reviewed at each financial year-end to determine whether events and circumstances continue to support indefinite useful life assessments for those assets. If appropriate, the changes are accounted for as changes in accounting estimates.

(j) Investment Property

Property held to obtain rental income, market margins, or both is classified as investment property. Investment properties are initially measured at cost, including transaction costs incurred at the time of acquisition, and subsequently, the amount less accumulated depreciation and accumulated impairment loss is shown as book value.

Subsequent expenditure on an investment property is capitalized to the investment property’s carrying amount only when it is probable that future economic benefits will flow to the entity and cost can be reliably measured. All other subsequent expenditures are expensed in the period in which it is incurred.

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

Depreciation methods, useful lives and residual values of Investment Properties are reviewed at each reporting period-end and if appropriate, the changes are accounted for as changes in accounting estimates.

The estimated useful lives of investment property for current and comparative periods are as follows:

	Estimated useful lives (years)
Building	20

3. Summary of Significant Accounting Policies, Continued

(k) Impairment

(i) Financial assets

Financial instruments and contract assets

The Group recognizes loss allowance for financial assets measured at amortized cost and debt investments at FVOCI at the ‘expected credit loss’ (ECL).

The Group recognizes a loss allowance for the life-time expected credit losses except for following, which are measured at 12-month ECLs:

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

• other debt instruments and bank deposits 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.

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECLs, the Group considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both qualitative and quantitative information and analysis, based on the Group’s historical experience and informed credit assessment including forward-looking information.

Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial instrument.

3. Summary of Significant Accounting Policies, Continued

(k) Impairment, Continued

12-month ECLs are the portion of the ECLs that result from default events that are possible within the 12 months after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months).

The maximum period considered when estimating ECLs is the maximum contractual period over which the Group is exposed to credit risk.

Estimation of expected credit losses

Expected credit losses are a probability-weighted estimate of credit losses. Credit losses are measured using the present value of the difference between the contractual cash flows and the expected contractual cash flows. The expected credit losses are discounted using effective interest rate of the financial assets.

Credit-impaired financial assets

At each reporting period-end, the Group assesses whether financial assets carried at amortized cost and debt instruments at FVOCI are 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 issuer or the borrower;

• the lender(s) of the borrower, for economic or contractual reasons relating to the borrower’s financial difficulty, having granted to the borrower a concession(s) that the lender(s) would not otherwise consider;

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

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

Presentation of loss allowance for ECL in the consolidated statement of financial position

Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the assets. For debt instruments at FVOCI, the loss allowance is charged to profit or loss and is recognized in OCI instead of reducing the carrying amount of financial assets in the consolidated statement of financial position.

Write-off

The gross carrying amount of a financial asset is written off when the Group has no reasonable expectations for recovering the financial asset in its entirety or a portion thereof. The Group assess whether there are reasonable expectations of recovering the contractual cash flows from customers and individually assess the timing and amount of write-off. 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.

3. Summary of Significant Accounting Policies, Continued

(k) Impairment, Continued

(ii) Non-financial assets

The carrying amounts of the Group’s non-financial assets, other than assets arising from employee benefits, inventories and deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. For goodwill, and intangible assets that have indefinite useful lives or that are not yet available for use, irrespective of whether there is any indication of impairment, the recoverable amount is estimated each year.

Recoverable amount is estimated for the individual asset. If it is not possible to estimate the recoverable amount of the individual asset, the Group determines the recoverable amount of the cash-generating unit to which the asset belongs. The cash-generating unit (“CGU”) is the smallest group of assets that includes the asset and generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. Goodwill arising from a business combination is allocated to CGUs or groups of CGUs that are expected to benefit from the synergies of the combination. The recoverable amount of an asset or cash-generating unit is determined as the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU. Fair value less costs to sell is based on the best information available to reflect the amount that the Group could obtain from the disposal of the asset in an arm’s length transaction between knowledgeable, willing parties, after deducting the costs of disposal.

An impairment loss is recognized if the carrying amount of an asset or its CGU exceeds its estimated recoverable amount. Impairment losses are recognized in profit or loss. Impairment losses recognized in respect of a CGU are allocated first to reduce the carrying amount of any goodwill allocated to the unit, and then to reduce the carrying amounts of the other assets in the unit on a pro rata basis.

In respect of assets other than goodwill, impairment losses recognized in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of accumulated depreciation or amortization, if no impairment loss had been recognized from the acquisition cost. An impairment loss in respect of goodwill is not reversed.

3. Summary of Significant Accounting Policies, Continued

(l) Leases

A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

(i) 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 and non-lease component on the basis of its relative stand-alone price. For certain leases, the Group accounts for the lease and non-lease components as a single lease component by applying the practical expedient not to separate non-lease components.

The Group recognizes a right-of-use asset and lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at of before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term, unless the lease transfers ownership of the underlying asset to the Group by the end of the lease term or the cost of the right-of-use asset reflects that the Group will exercise a purchase option. In that case, the right-of-use asset will be depreciated over the useful life of the underlying asset, which is determined on the same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group’s incremental borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rate.

The Group determines its incremental borrowing rate by obtaining interest rates from various external financing sources and makes certain adjustments to reflect the terms of the lease and type of the asset leased.

Lease payments included in the measurement of the lease liability comprise the following:

• fixed payments, including in-substance fixed payments;

• variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;

• amounts expected to be payable under a residual value guarantee; and

• the exercise price under a purchase option that the Group is reasonably certain to exercise, lease payments in an optional renewal period if the Group is reasonably certain to exercise an extension option, and penalties for early termination of a lease unless the Group is reasonably certain not to terminate early.

3. Summary of Significant Accounting Policies, Continued

(l) Leases, Continued

The lease liability is measured at amortized cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Group’s estimate of the amount expected to be payable under a residual value guarantee, if the Group changes its assessment of whether it will exercise a purchase, extension or termination option or if there is a revised in-substance fixed lease payment.

When the lease liability is remeasured, the Group recognizes the amount of the remeasurement of the lease liability as an adjustment to the right-of-use asset. However, if the carrying amount of the right-of-use asset is reduced to zero and there is a further reduction in the measurement of the lease liability, the Group recognizes any remaining amount of the remeasurement in profit or loss.

The Group presents right-of-use assets in ‘property, plant and equipment’ and lease liabilities in ‘financial liabilities’ in the consolidated 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.

(ii) 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. If the lease transfers substantially all of the risks and rewards incidental to ownership of the underlying asset, then the lease is a finance lease; if not, then it is an operating lease. 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.

When the Group is an intermediate lessor, it accounts for its interests in the head lease and the sub-lease separately. It assesses the lease classification of a sub-lease with reference to the right-of-use asset arising from the head lease, not with reference to the underlying asset. If a head lease is a short-term lease to which the Group applies the exemption described above, then it classifies the sub-lease as an operating lease.

If an arrangement contains lease and non-lease components, then the Group applies K-IFRS No. 1115 to allocate the consideration in the contract.

At the commencement date, the Group recognizes assets held under a finance lease in its statement of financial position and present them as a receivable at an amount equal to the net investment in the lease and recognize finance income over the lease term, based on a pattern reflecting a constant periodic rate of return on the lessor’s net investment in the lease.

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’.

3. Summary of Significant Accounting Policies, Continued

(m) Provisions

A provision is recognized as a result of a past event, if the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation.

The risks and uncertainties that inevitably surround events and circumstances are taken into account in reaching the best estimate of a provision. Where the effect of the time value of money is material, provisions are determined at the present value of the expected future cash flows. The unwinding of the discount is recognized as finance cost.

Provisions are reviewed at the end of each reporting period and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of resources embodying economic benefits will be required to settle the obligation, the provision is reversed.

The Group recognizes a liability for warranty obligations based on the estimated costs expected to be incurred under its basic limited warranty. This warranty covers defective products and is normally applicable for a warranty period from the date of purchase. These liabilities are accrued when product revenues are recognized. Factors that affect the Group’s warranty liability include historical and anticipated rates of warranty claims on those repairs and cost per claim to satisfy the Group’s warranty obligation. Warranty costs primarily include raw materials and labor costs. As these factors are impacted by actual experience and future expectations, management periodically assesses the adequacy of its recorded warranty liabilities and adjusts the amounts as necessary. Accrued warranty obligations are included in the current and non-current provisions.

Liabilities for loss contingencies arising from claims, assessments, litigation, fines, penalties and other sources, are recorded when it is probable that a liability has been incurred and the amount of the assessment and/or remediation can be reasonably estimated.

(n) Non-current Assets Held for Sale

Non-current assets, or disposal groups comprising assets and liabilities, are classified as held-for-sale if it is highly probable that they will be recovered primarily from sale rather than through continuing use. In order to be classified as held for sale, the asset (or disposal group) is available for immediate sale in its present condition and its sale is highly probable. The assets (or disposal groups) that are classified as non-current assets held for sale are measured at the lower of their carrying amount and fair value less costs to sell on initial classification. The Group recognizes an impairment loss for any subsequent decrease in fair value of the asset (or disposal group) for which an impairment loss was recognized on initial classification as held-for-sale and a gain for any subsequent increase in fair value in profit or losses, up to the cumulative impairment loss previously recognized.

The Group does not depreciate a non-current asset while it is classified as held for sale or while it is part of a disposal group classified as held for sale.

3. Summary of Significant Accounting Policies, Continued

(o) Employee Benefits

(i) Short-term employee benefits

Short-term employee benefits that are due to be settled within twelve months after the end of the period in which the employees render the related service are recognized in profit or loss on an undiscounted basis. The expected cost of profit-sharing and bonus plans and others are recognized when the Group has a present legal or constructive obligation to make payments as a result of past events and a reliable estimate of the obligation can be made.

(ii) Other long-term employee benefits

The Group’s net obligation in respect of long-term employee benefits other than pension plans is the amount of future benefit that employees have earned in return for their service in the current and prior periods.

(iii) Defined contribution plan

A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution pension plans are recognized as an employee benefit expense in profit or loss in the period during which services are rendered by employees.

(iv) Defined benefit plan

A defined benefit plan is a post-employment benefit plan other than defined contribution plans. The Group’s net obligation in respect of its defined benefit plan is calculated by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value. The fair value of any plan assets is deducted.

The calculation is performed annually by an independent actuary using the projected unit credit method. The discount rate is the yield at the reporting date on high quality corporate bonds that have maturity dates approximating the terms of the Group’s obligations and that are denominated in the same currency in which the benefits are expected to be paid. The Group recognizes all actuarial gains and losses arising from defined benefit plans in retained earnings immediately.

The Group determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined benefit liability (asset), taking into account any changes in the net defined benefit liability (asset) during the period as a result of contributions and benefit payments. Consequently, the net interest on the net defined benefit liability (asset) now comprises: interest cost on the defined benefit obligation, interest income on plan assets, and interest on the effect on the asset ceiling.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognized immediately in profit or loss. The Group recognizes gains and losses on the settlement of a defined benefit plan when the settlement occurs.

3. Summary of Significant Accounting Policies, Continued

(o) Employee Benefits, Continued

(v) Termination benefits

The Group recognizes expense for termination benefits at the earlier of the date when the entity can no longer withdraw the offer of those benefits and when the entity recognizes costs for a restructuring involving the payment of termination benefits. If the termination benefits are not expected to be settled wholly before twelve months after the end of the annual reporting period, the Group measures the termination benefit with present value of future cash payments.

(p) Revenue from contracts with customers

Revenue from the sale of goods in the course of ordinary activities is measured at the fair value of the consideration received or receivable, net of estimated returns, trade discounts, volume rebates and other cash incentives paid to customers.

The Group recognizes revenue according to the five stage revenue recognition model (① Identifying the contract à② Identifying performance obligations à③ Determining transaction price à④ Allocating the transaction price to performance obligations à⑤ Recognizing revenue for performance obligations).

The Group generates revenue primarily from sale of display panels. Product revenue is recognized when a customer obtains control over the Group’s products, which typically occurs upon shipment or delivery depending on the terms of the contracts with the customer.

The Group includes return option in the sales contract of display panels with its customers and the consideration receivable from the customer is subject to change due to returns. The Group estimates an amount of variable consideration by using the expected value method which the Group expects to better predict the amount of consideration. The Group includes in the transaction price an amount of variable consideration estimated only to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognized will not occur during the return period when the uncertainty associated with the variable consideration is subsequently resolved. The Group recognizes a refund liability and an asset for its right to recover products from customers if the Group receives consideration from a customer and expects to refund some or all of that consideration to the customer. Sales taxes or value-added taxes collected from customers and remitted to governmental authorities are accounted for on a net basis and are excluded from revenues in the consolidated statement of comprehensive income (loss).

(q) Operating Segments

An operating segment is a component of the Group that: 1) engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with other components of the group, 2) whose operating results are reviewed regularly by the Group’s chief operating decision maker (“CODM”) in order to allocate resources and assess its performance, and 3) for which discrete financial information is available. Management has determined that the CODM of the Group is the Board of Directors. The CODM does not receive and therefore does not review discrete financial information for any component of the Group. Consequently, no operating segment information is included in these consolidated financial statements. Entity wide disclosures of geographic and product revenue information are provided in Note 17 to these consolidated financial statements.

3. Summary of Significant Accounting Policies, Continued

(r) Finance Income and Finance Costs

Finance income comprises interest income on funds invested (including debt instruments measured at FVOCI), dividend income, gains on disposal of debt instruments measured at FVOCI and changes in fair value of financial instruments at FVTPL. Interest income is recognized as it accrues in profit or loss, using the effective interest method. Dividend income is recognized in profit or loss on the date that the Group’s right to receive payment is established.

Finance costs comprise interest expense on borrowings, unwinding of the discount on provisions, gain and losses from financial instruments measured at FVTPL and impairment losses recognized on financial assets. Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset are capitalized as part of the cost of that asset.

(s) Income Tax

Income tax expense comprises current and deferred tax. Current tax and deferred tax are recognized in profit or loss except to the extent that it relates to a business combination, or items recognized directly in equity or in other comprehensive income.

(i) Current tax

Current tax comprises the expected tax payable or receivable on the taxable profit or loss for the year, using tax rates enacted or substantively enacted at the reporting date and any adjustment to tax payable in respect of previous years. The amount of current tax payable or receivable is the best estimate of the tax amount expected to be paid or received that reflects uncertainty related to income taxes, if any. The taxable profit is different from the accounting profit for the period since the taxable profit is calculated excluding the temporary differences, which will be taxable or deductible in determining taxable profit (tax loss) of future periods, and non-taxable or non-deductible items from the accounting profit.

(ii) Deferred tax

Deferred tax is recognized, using the asset and liability method, in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and deferred tax assets reflects the tax consequences that would follow from the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

3. Summary of Significant Accounting Policies, Continued

(s) Income Tax, Continued

The Group recognizes a deferred tax liability for all taxable temporary differences associated with investments in subsidiaries, associates, and interests in joint ventures, except to the extent that the Group is able to control the timing of the reversal of the temporary differences and it is probable that the temporary differences will not reverse in the foreseeable future. A deferred tax asset is recognized for all deductible temporary differences to the extent that it is probable that the differences relating to investments in subsidiaries, associates and joint ventures will reverse in the foreseeable future and taxable profit will be available against which the temporary difference can be utilized.

Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

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

(t) Earnings (Loss) Per Share

The Controlling Company presents basic and diluted earnings (loss) per share (“EPS”) data for its common stocks. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Controlling Company by the weighted average number of common stocks outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of common stocks outstanding, adjusted for the effects of all dilutive potential common stocks such as convertible bonds and others.

(u) Standards issued but not yet effective

A number of amended standards are effective for annual periods beginning after January 1, 2022 and earlier application is permitted; however, the Group has not early adopted the amended standards in preparing these consolidated financial statements.

(i) Classification of current/non-current liabilities (K-IFRS No. 1001, ‘Presentation of Financial Statements’.)

The amendment states that in order for the borrower to have the right to defer settlement of Liabilities, it must have met the conditions of contracts at the end of the reporting period and clarifies that the possibility of the borrower exercising the right to defer settlement of liabilities for more than 12 months after the reporting period does not affect the liquidity classification of liabilities. In addition, when the settlement of liabilities includes the transfer of equity instruments, where compound financial instrument has a liability and equity portion separately recognised, it does not affect the classification for liquidity purposes. The amendment will take effect for fiscal years beginning after January 1, 2023, and early application is permitted. However, the International Accounting Standards Committee has published an amendment to postpone the effective date of this amendment to the fiscal year beginning after January 1, 2024, and the Korea Accounting Institute will also revise the K-IFRS to reflect it. The Group is monitoring the revision process.

3. Summary of Significant Accounting Policies, Continued

(u) Standards issued but not yet effective Continued

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

• Deferred taxes on assets and liabilities arising from a single transaction (K-IFRS No. 1012, ‘Income Taxes’.)

• Definition of materiality (K-IFRS No. 1001, ‘Presentation of Financial Statements’.)

• Definition of Accounting estimate (K-IFRS No. 1008, ‘Accounting Policies, Changes in Accounting Estimates and Errors’.)

• Disclosure of Financial Liabilities Valuation Gains and Losses with Exercise price Adjustment Conditions (K-IFRS No. 1001, ‘Presentation of Financial Statements’.)

D. Separate Financial Statements

LG DISPLAY CO., LTD.    

Separate Statements of Financial Position    

As of December 31, 2022 and 2021    

(In millions of won)	Note	December 31, 2022		December 31, 2021
Assets
Cash and cash equivalents	4, 27	W	692,312		950,847
Deposits in banks	4, 27		42,804		76,913
Trade accounts and notes receivable, net	5, 15, 27, 30		2,475,920		5,051,836
Other accounts receivable, net	5, 27		135,116		79,939
Other current financial assets	6, 27		149,479		37,764
Inventories	7		1,924,594		2,130,997
Prepaid income tax			1,092		57,722
Other current assets	5		205,860		180,638
Total current assets			5,627,177		8,566,656
Deposits in banks	4, 27		11		11
Investments	8		4,837,704		4,942,729
Other non-current accounts receivable, net	5, 27		13,364		5,122
Other non-current financial assets	6, 27		190,067		87,469
Property, plant and equipment, net	9, 28		14,044,844		12,010,858
Intangible assets, net	10		1,635,181		1,459,812
Investment Property	11		28,269		—
Deferred tax assets	25		2,413,563		2,238,410
Defined benefits assets, net	13		447,521		68,276
Other non-current assets			21,338		98,779
Total non-current assets			23,631,862		20,911,466
Total assets		W	29,259,039		29,478,122
Liabilities
Trade accounts and notes payable	27, 30	W	8,391,251		6,528,451
Current financial liabilities	12, 27, 29		4,014,046		2,557,696
Other accounts payable	27		2,813,350		2,800,823
Accrued expenses			558,503		1,012,009
Provisions	14		172,092		171,865
Advances received			28,184		30,060
Other current liabilities			65,585		48,065
Total current liabilities			16,043,011		13,148,969
Non-current financial liabilities	12, 27, 29		5,119,695		5,038,155
Non-current provisions	14		86,157		92,942
Other non-current liabilities	27		659,737		555,238
Total non-current liabilities			5,865,589		5,686,335
Total liabilities			21,908,600		18,835,304
Equity
Share capital	16		1,789,079		1,789,079
Share premium	16		2,251,113		2,251,113
Retained earnings	17		3,310,247		6,611,853
Reserves	17		—		(9,227	)
Total equity			7,350,439		10,642,818
Total liabilities and equity		W	29,259,039		29,478,122

See accompanying notes to the separate financial statements.

LG DISPLAY CO., LTD.    

Separate Statements of Comprehensive Income (Loss)    

For the years ended December 31, 2022 and 2021    

(In millions of won, except earnings per share)	Note		2022			2021
Revenue		18, 30	W	24,131,172			28,364,914
Cost of sales		7, 19, 30		(24,870,325	)		(25,346,568	)
Gross profit (loss)				(739,153	)		3,018,346
Selling expenses		19, 20		(517,397	)		(502,412	)
Administrative expenses		19, 20		(582,717	)		(590,826	)
Research and development expenses		19		(1,362,196	)		(1,203,177	)
Operating profit (loss)				(3,201,463	)		721,931
Finance income		23		691,501			291,665
Finance costs		23		(572,487	)		(629,216	)
Other non-operating income		22		2,266,820			889,413
Other non-operating expenses		19, 22		(2,598,888	)		(880,594	)
Profit(Loss) before income tax				(3,414,517	)		393,199
Income tax benefit		24		(223,130	)		(158,974	)
Profit(Loss) for the year				(3,191,387	)		552,173
Other comprehensive income(loss)
Items that will never be reclassified to profit or loss
Remeasurements of net defined benefit liabilities		13, 24		122,361			(163,363	)
Items that will be reclassified to profit or loss
Gain(Loss) on valuation of derivative		24, 27		9,227			(9,227	)
Other comprehensive income(loss) for the period, net of income tax				131,588			(172,590	)
Total comprehensive income(loss) for the period			W	(3,059,799	)		379,583
Earnings (loss) per share (in won)
Basic earnings (loss) per share		26	W	(8,919	)		1,543
Diluted earnings (loss) per share		26	W	(8,919	)		1,540

See accompanying notes to the separate financial statements.    

LG DISPLAY CO., LTD.    

Separate Statements of Changes in Equity    

For the years ended December 31, 2022 and 2021    

(In millions of won)	Share capital		Share premium		Retained earnings			Other capital			Total equity
Balances at January 1, 2021	W	1,789,079		2,251,113		6,223,043			—			10,263,235
Total comprehensive loss for the period
Profit for the year		—		—		552,173			—			552,173
Other comprehensive loss
Remeasurements of net defined benefit liabilities, net of tax		—		—		(163,363	)		—			(163,363	)
Loss on valuation of derivative		—		—		—			(9,227	)		(9,227	)
Total other comprehensive loss		—		—		(163,363	)		(9,227	)		(172,590	)
Total comprehensive income (loss) for the period	W	—		—		388,810			(9,227	)		379,583
Balances at December 31, 2021	W	1,789,079		2,251,113		6,611,853			(9,227	)		10,642,818
Balances at January 1, 2022	W	1,789,079		2,251,113		6,611,853			(9,227	)		10,642,818
Total comprehensive income for the period
Loss for the year		—		—		(3,191,387	)		—			(3,191,387	)
Other comprehensive income
Remeasurements of net defined benefit liabilities, net of tax		—		—		122,361						122,361
Gain on valuation of derivative		—		—		—			9,227			9,227
Total other comprehensive income		—		—		122,361			9,227			131,588
Total comprehensive income (loss) for the period	W	—		—		(3,069,026	)		9,227			(3,059,799	)
Transaction with owners, recognized directly in equity
Dividends to equity holders	W	—		—		(232,580	)		—			(232,580	)
Balances at December 31, 2022	W	1,789,079		2,251,113		3,310,247			—			7,350,439

See accompanying notes to the separate financial statements.    

LG DISPLAY CO., LTD.

Separate Statements of Cash Flows

For the years ended December 31, 2022 and 2021

(In millions of won)	Note	2022			2021
Cash flows from operating activities:
Profit (Loss) for the year		W	(3,191,387	)		552,173
Adjustments for:
Income tax benefit	24		(223,130	)		(158,974	)
Depreciation and amortization	9, 10, 19		2,376,274			2,532,888
Gain on foreign currency translation			(636,163	)		(43,404	)
Loss on foreign currency translation			332,495			157,164
Expenses related to defined benefit plans	13, 21		166,479			142,535
Gain on disposal of property, plant and equipment			(27,361	)		(24,647	)
Loss on disposal of property, plant and equipment			53,904			49,871
Impairment loss on property, plant and equipment			339,374			10,662
Gain on disposal of intangible assets			—			(196	)
Loss on disposal of intangible assets			193			—
Impairment loss on intangible assets			92,313			29,488
Reversal of impairment loss on intangible assets			(1,975	)		(1,152	)
Impairment loss on investment property assets			7,736			—
Expense on increase of provisions			207,310			183,193
Finance income			(647,287	)		(272,698	)
Finance costs			550,634			617,681
Other income			(1,652	)		—
Other expenses			—			15,348
			2,589,144			3,237,759
Changes in:
Trade accounts and notes receivable			2,328,752			(1,239,010	)
Other accounts receivable			(85,754	)		65,970
Inventories			206,403			(712,875	)
Other current assets			(12,128	)		13,070
Other non-current assets			(10,629	)		(61,737	)
Trade accounts and notes payable			2,440,822			1,861,287
Other accounts payable			(452,565	)		(25,962	)
Accrued expenses			(469,540	)		524,061
Provisions			(213,868	)		(204,126	)
Advances received			(1,875	)		(284,031	)
Other current liabilities			(6,552	)		(12,186	)
Defined benefit liabilities, net			(379,860	)		(206,615	)
Other non-current liabilities			166,893			10,860
			3,510,099			(271,294	)
Cash generated from operating activities			2,907,856			3,518,638
Income taxes refunded			57,834			5,725
Interests received			11,142			2,495
Interests paid			(277,378	)		(229,827	)
Net cash provided by operating activities		W	2,699,454			3,297,031

See accompanying notes to the separate financial statements.    

LG DISPLAY CO., LTD.    

Separate Statements of Cash Flows, Continued    

For the years ended December 31, 2022 and 2021    

(In millions of won)	Note		2022			2021
Cash flows from investing activities:
Dividends received			W	126,553			4,068
Increase in deposits in banks				(42,804	)		(76,913	)
Proceeds from withdrawal of deposits in banks				76,914			76,852
Acquisition of financial asset at fair value through profit or loss				(150	)		—
Acquisition of financial assets at fair value through other comprehensive income				(3,934	)		—
Proceeds from disposal of financial assets at fair value through other comprehensive income				3,547			24
Acquisition of investments				(33,137	)		(154,665	)
Proceeds from disposal of investments				132,200			4,363
Acquisition of property, plant and equipment				(3,820,388	)		(2,003,923	)
Proceeds from disposal of property, plant and equipment				181,610			65,744
Acquisition of intangible assets				(817,802	)		(600,355	)
Proceeds from disposal of intangible assets				11,392			2,946
Government grants received				—			—
Receipt from settlement of derivatives				49,145			8,344
Proceeds from collection of short-term loans				9,608			14,533
Increase in short-term loans				(9,643	)		—
Increase in long-term loans				(54,033	)		(26,473	)
Increase in deposits				(901	)		(825	)
Decrease in deposits				4,125			1,687
Proceeds from disposal of other assets				1,464			—
Net cash used in investing activities				(4,186,234	)		(2,684,593	)
Cash flows from financing activities:		29
Proceeds from short-term borrowings				3,496,467			900,460
Repayments of short-term borrowings				(1,550,937	)		(1,256,440	)
Proceeds from issuance of bonds				443,230			498,027
Proceeds from long-term borrowings				1,523,669			1,298,346
Repayments of current portion of long-term borrowings and bonds				(2,443,087	)		(2,314,432	)
Payment guarantee fee received				4,945			5,009
Dividends paid				(232,580	)		—
Repayments of lease liabilities				(13,462	)		(12,659	)
Net cash provided by (used in) financing activities				1,228,245			(881,689	)
Net decrease in cash and cash equivalents				(258,535	)		(269,251	)
Cash and cash equivalents at January 1				950,847			1,220,098
Cash and cash equivalents at December 31			W	692,312			950,847

See accompanying notes to the separate interim financial statements.

1. Organization and Description of Business

LG Display Co., Ltd. (the “Company”) was incorporated in February 1985 and the Company is a public corporation listed in the Korea Exchange since 2004. The main business of the Company is to manufacture and sell displays and its related products. As of December 31, 2022, the Company is operating Thin Film Transistor Liquid Crystal Display (“TFT-LCD”) and Organic Light Emitting Diode (“OLED”) panel manufacturing plants in Gumi, Paju and China and TFT-LCD and OLED module manufacturing plants in Gumi, Paju, China and Vietnam. The Company is domiciled in the Republic of Korea with its address at 128 Yeouidae-ro, Yeongdeungpo-gu, Seoul, the Republic of Korea. As of December 31, 2022, LG Electronics Inc., a major shareholder of the Company, owns 37.9% (135,625,000 shares) of the Company’s common stock.

The Company’s common stock is listed on the Korea Exchange under the identifying code 034220. As of December 31, 2022, there are 357,815,700 shares of common stock outstanding. The Company’s common stock is also listed on the New York Stock Exchange in the form of American Depository Shares (“ADSs”) under the symbol “LPL”. One ADS represents one-half of one share of common stock. As of December 31, 2022, there are 16,674,488 ADSs outstanding.

2. Basis of Presenting Financial Statements

(a) Statement of Compliance

In accordance with the Act on External Audits of Stock Companies, Etc., these separate financial statements have been prepared in accordance with Korean International Financial Reporting Standards (“K-IFRS”).

These financial statements are separate financial statements prepared in accordance with K-IFRS No.1027, Separate Financial Statements, presented by a parent, an investor in an associate or a venture in a joint ventures, in which the investments are accounted for on the basis of the direct equity interest rather than on the basis of the reported results and net assets of the investees.

The separate financial statements were authorized for issuance by the Board of Directors on January 26, 2023, which will be submitted for approval to the shareholders’ meeting to be held on March 21, 2023.

(b) Basis of Measurement

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

• derivative financial instruments at fair value, financial assets at fair value through profit or loss(“FVTPL”), financial assets at fair value through other comprehensive income (“FVOCI”), financial liabilities at fair value through profit or loss(“FVTPL”), and

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

2. Basis of Presenting Financial Statements, Continued

(c) Functional and Presentation Currency

The separate financial statements are presented in Korean won, which is the Company’s functional currency.

(d) Use of Estimates and Judgments

The preparation of the separate financial statements in conformity with K-IFRSs requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

Information about critical judgments in applying accounting policies that have the most significant effect on the amounts recognized in the separate financial statements is included in the following notes:

• Financial instruments (Note 3(e))

• Impairment assessment of non-financial assets (Note 3(k), 10)

• Deferred tax assets and liabilities (Note3(r), 25)

Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment within the next 12 months is included in the following notes:

• Provisions (Note 3(m), 14)

• Inventories (Note 3(d), 7)

• Property, plant and equipment (Note 9)

• Intangible assets (Impairment assessment of non-financial assets) (Note 10)

• Employee benefits (Note 13)

• Deferred tax assets and liabilities (Note 25)

3. Summary of Significant Accounting Policies

The accounting policies applied in these separate financial statements are the same as those applied in the Company’s separate financial statements as of and for the year ended December 31, 2021 and the significant accounting policies followed by the Company in the preparation of its separate financial statements are as follows:

(a) Interest in subsidiaries, associates and joint ventures

These separate financial statements are prepared and presented in accordance with K-IFRS No.1027, Separate Financial Statements. The Company applied the cost method to investments in subsidiaries, associates and joint ventures. Dividends from subsidiaries, associates or joint ventures are recognized in profit or loss when the right to receive the dividend is established.

3. Summary of Significant Accounting Policies, Continued

(b) Foreign Currency Transaction and Translation

Transactions in foreign currencies are translated to the functional currency of the Company at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are retranslated to the functional currency at the exchange rate on the reporting date. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the date that the fair value was originally determined. Foreign currency differences arising on retranslation are recognized in profit or loss, except for differences arising on an investment in equity instruments designated as at FVOCI and a financial asset and liability designated as a cash flow hedge, which are recognized in other comprehensive income. Exchange differences arising on the settlement of monetary items or on translating monetary items at rates different from those at which they were translated on initial recognition are recognized in profit or loss in the period in which they arise. Foreign currency differences arising from assets and liabilities in relation to the investing and financing activities including borrowings, bonds and cash and cash equivalents are recognized in finance income (costs) in the separate statement of comprehensive income (loss) and foreign currency differences arising from assets and liabilities in relation to activities other than investing and financing activities are recognized in other non-operating income (expense) in the separate statement of comprehensive income (loss). Foreign currency differences are presented in gross amounts in the separate statement of comprehensive income (loss).

(c) Cash and cash equivalents

Cash and cash equivalents include all cash balances and short-term highly liquid investments with an original maturity of three months or less that are readily convertible into known amounts of cash.

(d) Inventories

Inventories are measured at the lower of cost and net realizable value. The cost of inventories is based on the weighted-average method, and includes expenditures incurred in acquiring the inventories, production or conversion costs and other costs incurred in bringing them to their existing location and condition. Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated selling expenses. In the case of manufactured inventories and work-in-process, cost includes an appropriate share of production overheads based on the actual capacity of production facilities. However, the normal capacity is used for the allocation of fixed production overheads if the actual level of production is lower than the normal capacity.

(e) Financial Instruments

(i) Non-derivative financial assets

Recognition and initial measurement

Trade receivables and debt instruments issued are initially recognized when they are originated. All other financial assets are recognized in statement of financial position when, and only when, the Company becomes a party to the contractual provisions of the instrument.

3. Summary of Significant Accounting Policies, Continued

(e) Financial Instruments, Continued

A financial asset (unless it is a trade receivable without a significant financing component) is initially measured at fair value plus, for an item not at FVTPL, transaction costs that are directly attributable to its acquisition or issue. A trade receivable without a significant financing component is initially measured at the transaction price.

Classification and subsequent measurement

i) Financial assets

On initial recognition, a financial asset is classified as measured at: amortized cost; FVOCI – debt investment; FVOCI – equity investments; or FVTPL. Financial assets are not reclassified subsequent to their initial recognition unless the Company changes its business model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the subsequent reporting period following the change in the business model.

A financial asset is measured as at amortized cost if it meets both of the following conditions and is not designated as at FVTPL:

• it is held within a business model whose objective is to hold assets to collect contractual cash flows; and

• its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL:

• it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and

• the contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

On initial recognition of an equity investments that is not held for trading, the Company may irrevocably elect to present subsequent changes in the investment’s fair value in OCI. This election is made on an investment-by-investment basis.

All financial assets not classified as measured at amortized cost or FVOCI as described above are measured as at FVTPL. This includes all derivative financial assets. At initial recognition, the Company may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortized cost or at FVOCI as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

3. Summary of Significant Accounting Policies, Continued

(e) Financial Instruments, Continued

ii) Financial assets: business model

The Company 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. The information considered includes:

• the stated policies and objectives for the portfolio and the operation of those policies in practice (these include whether management’s strategy focuses on earning contractual interest income, maintaining a particular interest rate profile, matching the duration of the financial assets to the duration of any related liabilities or expected cash outflows or realizing cash flows through the sale of the assets);

• how the performance of the portfolio is evaluated and reported to the Company’s management;

• the risks that affect the performance of the business model (and the financial assets held within that business model) and how those risks are managed; and

• the frequency, volume and timing of sales of financial assets in prior periods, the reasons for such sales and expectations about future sales activity.

Transfers of financial assets to third parties in transaction that do not qualify for derecognition are not considered sale for this purpose.

A financial asset that is held for trading or is managed and whose performance is evaluated on a fair value basis is measured at FVTPL.

iii) Financial assets: Assessment whether contractual cash flows are solely payments of principal and interest

For the purpose of the assessment, “principal” is defined as the fair value of the financial asset on initial recognition. ‘Interest’ is defined as consideration for the time value of money and for the credit risk associated with the principal amount outstanding during a particular period of time and for other basic lending risks and cost (e.g. liquidity risk and administrative costs), as well as profit margin.

In assessing whether the contractual cash flows are solely payments of principal and interest, the Company 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 Company 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 Company’s claim to cash flows from specified assets (e.g. non-recourse features)

A prepayment feature is consistent with the solely payments of principal and interest criterion if the prepayment amount substantially represents unpaid amounts of principal and interest or the principal amount outstanding, which may include reasonable additional compensation for early termination of the contract.

3. Summary of Significant Accounting Policies, Continued

(e) Financial Instruments, Continued

Additionally, for a financial asset acquired at a discount or premium to its contractual par amount, a feature that permits or requires prepayment at an amount that substantially represents the contractual par amount plus accrued but unpaid contractual interest (which may also include reasonable additional compensation for early termination) is treated as consistent with this criterion if the fair value of the prepayment feature is insignificant at initial recognition.

iv) Financial assets: Subsequent measurement and gains and losses

Financial assets at FVTPL	These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognized in profit or loss.
Financial assets at amortized cost	These assets are subsequently measured at amortized cost using the effective interest method. The amortized cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognized in profit or loss. Any gain or loss on derecognition is recognized in profit or loss.
Debt investments at FVOCI	These assets are subsequently measured at fair value. Interest income calculated using the effective interest method, foreign exchange gains and losses and impairment are recognized in profit or loss. Other net gains and losses are recognized in OCI. On derecognition, gains and losses accumulated in OCI are reclassified to profit or loss.

Derecognition

The Company derecognizes a financial asset when the contractual rights to the cash flows from the asset expire, it transfers the rights to receive the contractual cash flows of the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred, or it transfers or does not retain substantially all the risks and rewards of ownership of a transferred asset, and does not retain control of the transferred asset.

If the Company has retained substantially all the risks and rewards of ownership of the transferred asset, the Company continues to recognize the transferred asset.

Interest rate benchmark reform

In case the basis for determining the contractual cash flows of a financial asset or financial liability measured at amortized cost changed as a result of interest rate benchmark reform, the Company updates the effective interest rate of the financial asset or financial liability to reflect the change that is required by the reform if both of the following conditions are met:

• the change is necessary as a direct consequence of the reform; and

• the new basis for determining the contractual cash flows is economically equivalent to the previous basis – i.e. the basis immediately before the change.

When changes were made to a financial asset or financial liability in addition to changes to the basis for determining the contractual cash flows required by interest rate benchmark reform, the Company first updates the effective interest rate of the financial asset or financial liability to reflect the change that is required by interest rate benchmark reform. After that, the Company applies the policies on accounting for modifications to the additional changes.

3. Summary of Significant Accounting Policies, Continued

(e) Financial Instruments, Continued

Offset

Financial assets and liabilities are offset and the net amount is presented in the separate statement of financial position when, and only when, the Company has a legal right to offset the amounts and intends either to settle them on a net basis or to realize the asset and settle the liability simultaneously.

(ii) Non-derivative financial liabilities

The Company classifies financial liabilities into two categories, financial liabilities at FVTPL and other financial liabilities in accordance with the substance of the contractual arrangement and the definitions of financial liabilities, and recognizes them in the separate statement of financial position when the Company becomes a party to the contractual provisions of the instrument.

Financial liabilities at FVTPL include financial liabilities held for trading or designated as such upon initial recognition at FVTPL. After initial recognition, financial liabilities at FVTPL are measured at fair value, and changes therein are recognized in profit or loss. Upon initial recognition, transaction costs that are directly attributable to the issuance of financial liabilities are recognized in profit or loss as incurred.

Non-derivative financial liabilities other than financial liabilities classified as at FVTPL are classified as other financial liabilities and measured initially at fair value minus transaction costs that are directly attributable to the issuance of financial liabilities. Subsequent to initial recognition, these financial liabilities are measured at amortized cost using the effective interest method. As of December 31, 2022, non-derivative financial liabilities comprise borrowings, bonds, trade accounts and notes payable, other accounts payable and others.

The Company derecognizes a financial liability when its contractual obligations are discharged, cancelled or expired.

(iii) Share Capital

The Company issued common stocks and they are classified as equity. Incremental costs directly attributable to the issuance of common stocks are recognized as a deduction from equity, net of tax effects. Capital contributed in excess of par value upon issuance of common stocks is classified as share premium within equity.

(iv) Derivative financial instruments

Derivatives are initially recognized at fair value. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are accounted for as described below.

Hedge Accounting

If necessary, the Company designates derivatives as hedging items to hedge the risk of changes in the fair value of assets, liabilities or firm commitments (a fair value hedge) and foreign currency risk of highly probable forecasted transactions or firm commitments (a cash flow hedge).

3. Summary of Significant Accounting Policies, Continued

(e) Financial Instruments, Continued

On initial designation of the hedge, the Company’s management formally designates and documents the relationship between the hedging instrument(s) and hedged item(s), including the risk management objectives and strategy in undertaking the hedge transaction, together with the methods that will be used to assess the effectiveness of the hedging relationship, both at the inception of the hedge relationship as well as on an ongoing basis.

i) Fair value hedges

Change in the fair value of a derivative hedging instrument designated as a fair value hedge and the hedged item is recognized in profit or loss, respectively. The gain or loss from remeasuring the hedging instrument at fair value and the gain or loss on the hedged item attributable to the hedged risk are recognized in profit or loss in the same line item of the statement of comprehensive income (loss). The Company discontinues fair value hedge accounting if it does not designate the derivative hedging instrument and the hedged item as the hedge relationship between them anymore; if the hedging instrument expires or is sold, terminated or exercised; or if the hedge no longer meets the criteria for hedge accounting.

ii) Cash flow hedges

When a derivative designated as a cash flow hedging instrument meets the criteria of cash flow hedge accounting, the effective portion of changes in the fair value of the derivative is recognized in other comprehensive income and the ineffective portion of changes in the fair value of the derivative is recognized in profit or loss. The Company discontinues cash flow hedge accounting if it does not designate the derivative hedging instrument and the hedged item as the hedge relationship between them anymore; if the hedging instruments expires or is sold, terminated or exercised; or if the hedge no longer meets the criteria for hedge accounting. The cumulative gain or loss on the hedging instrument that has been recognized in other comprehensive income is reclassified to profit or loss in the periods during which the forecasted transaction occurs. If the forecasted transaction is no longer expected to occur, then the balance in other comprehensive income is recognized immediately in profit or loss.

Embedded derivative

Embedded derivatives are separated from the host contract and accounted for separately if the host contract is not a financial asset and certain criteria are met.

Other derivative financial instruments

Other derivative financial instruments are measured at fair value and changes of their fair value are recognized in profit or loss.

3. Summary of Significant Accounting Policies, Continued

(f) Property, Plant and Equipment

(i) Recognition and measurement

Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses. Cost includes an expenditure that is directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials and direct labor, any costs directly attributable to bringing the assets to a working condition for their intended use, the costs of dismantling and removing the items and restoring the site on which they are located and borrowing costs on qualifying assets.

The gain or loss arising from the derecognition of an item of property, plant and equipment is determined as the difference between the net disposal proceeds, if any, and the carrying amount of the item and recognized in other non-operating income or other non-operating expenses.

(ii) Subsequent costs

Subsequent expenditure on an item of property, plant and equipment is recognized as part of its cost only if it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The costs of the day-to-day servicing of property, plant and equipment are recognized in profit or loss as incurred.

(iii) Depreciation

Land is not depreciated and depreciation of other items of property, plant and equipment is recognized in profit or loss on a straight-line basis, reflecting the pattern in which the asset’s future economic benefits are expected to be consumed by the Company. The residual value of property, plant and equipment is zero.

Estimated useful lives of the assets are as follows:

	Useful lives (years)
Buildings and structures	20, 40
Machinery	4, 5
Furniture and fixtures	4
Equipment, tools and vehicles	2, 4, 12
Right-of-use assets	(*)

(*) The Company depreciates the right-of-use assets from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term.

Depreciation methods, useful lives and residual values are reviewed at each financial year-end and adjusted if appropriate and any changes are accounted for as changes in accounting estimates.

3. Summary of Significant Accounting Policies, Continued

(g) Borrowing Costs

The Company capitalizes borrowing costs, which includes interests and exchange differences arising from foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs, directly attributable to the acquisition, construction or production of a qualifying asset as part of the cost of that asset. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use or sale. To the extent that the Company borrows funds specifically for the purpose of obtaining a qualifying asset, the Company determines the amount of borrowing costs eligible for capitalization as the actual borrowing costs incurred on that borrowing during the period less any investment income on the temporary investment of those borrowings. The Company immediately recognizes other borrowing costs as an expense.

(h) Government Grants

In case there is reasonable assurance that the Company will comply with the conditions attached to a government grant, the government grant is recognized as follows:

(i) Grants related to the purchase or construction of assets

A government grant related to the purchase or construction of assets is deducted in calculating the carrying amount of the asset. The grant is recognized in profit or loss over the life of a depreciable asset as a reduced depreciation expense and cash related to grant received is presented in investing activities in the statement of cash flows.

(ii) Grants for compensating the Company’s expenses incurred

A government grant that compensates the Company for expenses incurred is recognized in profit or loss as a deduction from relevant expenses on a systematic basis in the periods in which the expenses are recognized.

(iii) Other government grants

A government grant that becomes receivable for the purpose of giving immediate financial support to the Company with no compensation for expenses or losses already incurred or no future related costs is recognized as income of the period in which it becomes receivable.

3. Summary of Significant Accounting Policies, Continued

(i) Intangible Assets

Intangible assets are initially measured at cost. Subsequently, intangible assets are measured at cost less accumulated amortization and accumulated impairment losses.

(i) Goodwill

Goodwill arising from business combinations is recognized as the excess of the acquisition cost of a business over the net fair value of the identifiable assets acquired and liabilities assumed. Any deficit is a bargain purchase that is recognized in profit or loss. Goodwill is measured at cost less accumulated impairment losses.

(ii) Research and development

Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical knowledge and understanding, is recognized in profit or loss as incurred.

Development activities involve a plan or design of the production of new or substantially improved products and processes. Development expenditure is capitalized as intangible assets only if the Company can demonstrate all of the following:

• the technical feasibility of completing the intangible asset so that it will be available for use or sale,

• its intention to complete the intangible asset and use or sell it,

• its ability to use or sell the intangible asset,

• how the intangible asset will generate probable future economic benefits (among other things, the Company can demonstrate the usefulness of the intangible asset by existence of a market for the output of the intangible asset or the intangible asset itself if it is to be used internally),

• the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset, and

• its ability to measure reliably the expenditure attributable to the intangible asset during its development.

Development projects are divided into research activities and development activities. Expenditures on research activities are recognized in profit or loss and qualifying development expenditures on development activities are capitalized.

The expenditure capitalized includes the cost of materials, direct labor and overhead costs that are directly attributable to preparing the asset for its intended use, and borrowing costs on qualifying assets.

(iii) Other intangible assets

Other intangible assets include intellectual property rights, software, customer relationships, technology, memberships and others. The Company currently has a number of patent license agreements related to product production. When the payments for the contract period can be reliably determined, the total amount is recognized as intangible assets and other account payables, respectively, and intangible assets are amortized on a straight-line basis according to the patent license period.

3. Summary of Significant Accounting Policies, Continued

(i) Intangible Assets, Continued

(iv) Subsequent costs

Subsequent expenditures are capitalized only when they increase the future economic benefits embodied in the specific intangible asset to which they relate. All other expenditures, including expenditures on internally generated goodwill and brands, are recognized in profit or loss as incurred.

(v) Amortization

Amortization is calculated on a straight-line basis over the estimated useful lives of intangible assets, other than goodwill, from the date that they are available for use. The residual value of intangible assets is zero. However, as there are no foreseeable limits to the periods over which condominium and golf club memberships are expected to be available for use, these intangible assets are regarded as having indefinite useful lives and not amortized.

	Estimated useful lives (years)
Intellectual property rights	5, 10, (*1)
Rights to use electricity, water and gas supply facilities	10
Software	4, (*1)
Customer relationships	7, 10
Technology	10
Development costs	(*2)
Condominium and golf club memberships	Indefinite

(*1) Software license and patent royalty are amortized over the useful lives considering the contract period.

(*2) Capitalized development costs are amortized over the useful lives considering the life cycle of the developed products. Amortization of capitalized development costs are recognized in research and development expenses in the separate statement of comprehensive income (loss).

Amortization periods and the amortization methods for intangible assets with finite useful lives are reviewed at each financial year-end. The useful lives of intangible assets with indefinite useful lives are reviewed at each financial year-end to determine whether events and circumstances continue to support indefinite useful life assessments for those assets. If appropriate, the changes are accounted for as changes in accounting estimates.

(j) Investment Property

Property held to obtain rental income, market margins, or both is classified as investment property. Investment properties are initially measured at cost, including transaction costs incurred at the time of acquisition, and after initial recognition, the amount less accumulated depreciation and accumulated impairment loss is shown as book value.

Subsequent expenditure on an investment property is capitalized to the investment property’s carrying amount only when it is probable that future economic benefits will flow to the entity and cost can be reliably measured. All other subsequent expenditures are expensed in the period in which it is incurred.

3. Summary of Significant Accounting Policies, Continued

(j) Investment Property. Continued

Among investment properties, land is not depreciated, and investment properties except land are depreciated on a straight-line basis by applying 20 years of the building according to the economic depreciation period. Depreciation methods, useful lives and residual values of Investment Properties are reviewed at each reporting period-end and if appropriate, the changes are accounted for as changes in accounting estimates.

(k) Impairment

(i) Financial assets

Financial instruments and contract assets

The Company recognizes loss allowance for financial assets measured at amortized cost and debt investments at FVOCI at the ‘expected credit loss’ (ECL).

The Company recognizes a loss allowance for the life-time expected credit losses except for following, which are measured at 12-month ECLs:

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

• other debt instruments and bank deposits 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.

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECLs, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both qualitative and quantitative information and analysis, based on the Company’s historical experience and informed credit assessment including forward-looking information.

Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial instrument.

12-month ECLs are the portion of the ECLs that result from default events that are possible within the 12 months after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months).

The maximum period considered when estimating ECLs is the maximum contractual period over which the Company is exposed to credit risk.

Estimation of expected credit losses

Expected credit losses are a probability-weighted estimate of credit losses. Credit losses are measured using the present value of the difference between the contractual cash flows and the expected contractual cash flows. The expected credit losses are discounted using effective interest rate of the financial assets.

3. Summary of Significant Accounting Policies, Continued

(k) Impairment, Continued

Credit-impaired financial assets

At each reporting period-end, the Company assesses whether financial assets carried at amortized cost and debt instruments at FVOCI are 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 issuer or the borrower;

• the lender(s) of the borrower, for economic or contractual reasons relating to the borrower’s financial difficulty, having granted to the borrower a concession(s) that the lender(s) would not otherwise consider;

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

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

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

Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the assets. For debt instruments at FVOCI, the loss allowance is charged to profit or loss and is recognized in OCI instead of reducing the carrying amount of financial assets in the separate statement of financial position.

Write-off

The gross carrying amount of a financial asset is written off when the Company has no reasonable expectations for recovering the financial asset in its entirety or a portion thereof. The Company assess whether there are reasonable expectations of recovering the contractual cash flows from customers and individually assess the timing and amount of write-off. The Company 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 Company’s procedures for recovery of amounts due.

3. Summary of Significant Accounting Policies, Continued

(k) Impairment, Continued

(ii) Non-financial assets

The carrying amounts of the Company’s non-financial assets, other than assets arising from employee benefits, inventories and deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. For goodwill, and intangible assets that have indefinite useful lives or that are not yet available for use, irrespective of whether there is any indication of impairment, the recoverable amount is estimated each year.

Recoverable amount is estimated for the individual asset. If it is not possible to estimate the recoverable amount of the individual asset, the Company determines the recoverable amount of the cash-generating unit to which the asset belongs. The cash-generating unit (“CGU”) is the smallest group of assets that includes the asset and generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. Goodwill arising from a business combination is allocated to CGUs or groups of CGUs that are expected to benefit from the synergies of the combination. The recoverable amount of an asset or cash-generating unit is determined as the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU. Fair value less costs to sell is based on the best information available to reflect the amount that the Company could obtain from the disposal of the asset in an arm’s length transaction between knowledgeable, willing parties, after deducting the costs of disposal.

An impairment loss is recognized if the carrying amount of an asset or its CGU exceeds its estimated recoverable amount. Impairment losses are recognized in profit or loss. Impairment losses recognized in respect of a CGU are allocated first to reduce the carrying amount of any goodwill allocated to the unit, and then to reduce the carrying amounts of the other assets in the unit on a pro rata basis.

In respect of assets other than goodwill, impairment losses recognized in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of accumulated depreciation or amortization, if no impairment loss had been recognized from the acquisition cost. An impairment loss in respect of goodwill is not reversed.

3. Summary of Significant Accounting Policies, Continued

(l) Leases

A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

(i) As a lessee

At commencement or on modification of a contract that contains a lease component, the Company allocates the consideration in the contract to each lease and non-lease component on the basis of its relative stand-alone price. For certain leases, the Company accounts for the lease and non-lease components as a single lease component by applying the practical expedient not to separate non-lease components.

The Company recognizes a right-of-use asset and lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at of before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term, unless the lease transfers ownership of the underlying asset to the Company by the end of the lease term or the cost of the right-of-use asset reflects that the Company will exercise a purchase option. In that case, the right-of-use asset will be depreciated over the useful life of the underlying asset, which is determined on the same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company’s incremental borrowing rate. Generally, the Company uses its incremental borrowing rate as the discount rate.

The Company determines its incremental borrowing rate by obtaining interest rates from various external financing sources and makes certain adjustments to reflect the terms of the lease and type of the asset leased.

3. Summary of Significant Accounting Policies, Continued

(l) Lease, Continued

Lease payments included in the measurement of the lease liability comprise the following:

• fixed payments, including in-substance fixed payments;

• variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;

• amounts expected to be payable under a residual value guarantee; and

• the exercise price under a purchase option that the Company is reasonably certain to exercise, lease payments in an optional renewal period if the Company is reasonably certain to exercise an extension option, and penalties for early termination of a lease unless the Company is reasonably certain not to terminate early.

The lease liability is measured at amortized cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Company’s estimate of the amount expected to be payable under a residual value guarantee, if the Company changes its assessment of whether it will exercise a purchase, extension or termination option or if there is a revised in-substance fixed lease payment.

When the lease liability is remeasured the Company recognizes the amount of the remeasurement of the lease liability as an adjustment to the right-of-use asset. However, if the carrying amount of the right-of-use asset is reduced to zero and there is a further reduction in the measurement of the lease liability, the Company recognizes any remaining amount of the remeasurement in profit or loss.

The Company presents right-of-use assets in ‘property, plant and equipment’ and lease liabilities in ‘financial liabilities’ in the separate statement of financial position.

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

(ii) As a lessor

When the Company 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 Company makes an overall assessment of whether the lease transfers substantially all of the risks and rewards incidental to ownership of the underlying asset. If the lease transfers substantially all of the risks and rewards incidental to ownership of the underlying asset, then the lease is a finance lease; if not, then it is an operating lease. As part of this assessment, the Company considers certain indicators such as whether the lease is for the major part of the economic life of the asset.

When the Company is an intermediate lessor, it accounts for its interests in the head lease and the sub-lease separately. It assesses the lease classification of a sub-lease with reference to the right-of-use asset arising from the head lease, not with reference to the underlying asset. If a head lease is a short-term lease to which the Company applies the exemption described above, then it classifies the sub-lease as an operating lease.

3. Summary of Significant Accounting Policies, Continued

(l) Lease, Continued

If an arrangement contains lease and non-lease components, then the Company applies K-IFRS No. 1115 to allocate the consideration in the contract.

At the commencement date, the Company recognizes assets held under a finance lease in its statement of financial position and present them as a receivable at an amount equal to the net investment in the lease and recognize finance income over the lease term, based on a pattern reflecting a constant periodic rate of return on the lessor’s net investment in the lease.

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

(m) Provisions

A provision is recognized, as a result of a past event, if the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation.

The risks and uncertainties that inevitably surround events and circumstances are taken into account in reaching the best estimate of a provision. Where the effect of the time value of money is material, provisions are determined at the present value of the expected future cash flows. The unwinding of the discount is recognized as finance cost.

Provisions are reviewed at the end of each reporting period and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of resources embodying economic benefits will be required to settle the obligation, the provision is reversed.

The Company recognizes a liability for warranty obligations based on the estimated costs expected to be incurred under its basic limited warranty. This warranty covers defective products and is normally applicable for a warranty period from the date of purchase. These liabilities are accrued when product revenues are recognized. Factors that affect the Company’s warranty liability include historical and anticipated rates of warranty claims on those repairs and cost per claim to satisfy the Company’s warranty obligation. Warranty costs primarily include raw materials and labor costs. As these factors are impacted by actual experience and future expectations, management periodically assesses the adequacy of its recorded warranty liabilities and adjusts the amounts as necessary. Accrued warranty obligations are included in the current and non-current provisions.

Liabilities for loss contingencies arising from claims, assessments, litigation, fines, penalties and other sources, are recorded when it is probable that a liability has been incurred and the amount of the assessment and/or remediation can be reasonably estimated.

(n) Employee Benefits

(i) Short-term employee benefits

Short-term employee benefits that are due to be settled within twelve months after the end of the period in which the employees render the related service are recognized in profit or loss on an undiscounted basis. The expected cost of profit-sharing and bonus plans and others are recognized when the Company has a present legal or constructive obligation to make payments as a result of past events and a reliable estimate of the obligation can be made.

3. Summary of Significant Accounting Policies, Continued

(n) Employee Benefits

(ii) Other long-term employee benefits

The Company’s net obligation in respect of long-term employee benefits other than pension plans is the amount of future benefit that employees have earned in return for their service in the current and prior periods.

(iii) Defined contribution plan

A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution pension plans are recognized as an employee benefit expense in profit or loss in the period during which services are rendered by employees.

(iv) Defined benefit plan

A defined benefit plan is a post-employment benefit plan other than defined contribution plans. The Company’s net obligation in respect of its defined benefit plan is calculated by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value. The fair value of any plan assets is deducted.

The calculation is performed annually by an independent actuary using the projected unit credit method. The discount rate is the yield at the reporting date on high quality corporate bonds that have maturity dates approximating the terms of the Company’s obligations and that are denominated in the same currency in which the benefits are expected to be paid. The Company recognizes all actuarial gains and losses arising from defined benefit plans in retained earnings immediately.

The Company determines the net interest expense (income) on the net defined benefit liability (employee benefits asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined benefit liability (employee benefits asset), taking into account any changes in the net defined benefit liability (employee benefits asset) during the period as a result of contributions and benefit payments. Consequently, the net interest on the net defined benefit liability (defined benefit asset) now comprises: interest cost on the defined benefit obligation, interest income on plan assets, and interest on the effect on the asset ceiling.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognized immediately in profit or loss. The Company recognizes gains and losses on the settlement of a defined benefit plan when the settlement occurs.

3. Summary of Significant Accounting Policies, Continued

(n) Employee Benefits, Continued

(v) Termination benefits

The Company recognizes expense for termination benefits at the earlier of the date when the entity can no longer withdraw the offer of those benefits and when the entity recognizes costs for a restructuring involving the payment of termination benefits. If the termination benefits are not expected to be settled wholly before twelve months after the end of the annual reporting period, the Company measures the termination benefit with present value of future cash payments.

(o) Revenue from contracts with customers

Revenue from the sale of goods in the course of ordinary activities is measured at the fair value of the consideration received or receivable, net of estimated returns, trade discounts, volume rebates and other cash incentives paid to customers.

The Company recognizes revenue according to the five-stage revenue recognition model (① Identifying the contractà② Identifying performance obligations à③ Determining transaction priceà④ Allocating the transaction price to performance obligations à⑤ Recognizing revenue for performance obligations).

The Company generates revenue primarily from sale of display panels. Product revenue is recognized when a customer obtains control over the Company’s products, which typically occurs upon shipment or delivery depending on the terms of the contracts with the customer.

The Company includes return option in the sales contract of display panels with its customers and the consideration receivable from the customer is subject to change due to returns. The Company estimates an amount of variable consideration by using the expected value method which the Company expects to better predict the amount of consideration. The Company includes in the transaction price an amount of variable consideration estimated only to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognized will not occur during the return period when the uncertainty associated with the variable consideration is subsequently resolved. The Company recognizes a refund liability and an asset for its right to recover products from customers if the Company receives consideration from a customer and expects to refund some or all of that consideration to the customer. Sales taxes or value-added taxes collected from customers and remitted to governmental authorities are accounted for on a net basis and are excluded from revenues in the separate statement of comprehensive income (loss).

(p) Operating Segments

In accordance with K-IFRS No. 1108, Operating Segments, entity wide disclosures of geographic and product revenue information are provided in the separate financial statements.

(q) Finance Income and Finance Costs

Finance income comprises interest income on funds invested (including debt instruments measured at FVOCI), dividend income, gains on disposal of debt instruments measured at FVOCI, changes in fair value of financial assets at FVTPL, and gains on hedging instruments that are recognized in profit or loss. Interest income is recognized as it accrues in profit or loss, using the effective interest method. Dividend income is recognized in profit or loss on the date that the Company’s right to receive payment is established.

3. Summary of Significant Accounting Policies, Continued

(q) Finance Income and Finance Costs, Continued

Finance costs comprise interest expense on borrowings, unwinding of the discount on provisions, gain and losses from financial assets measured at FVTPL, impairment losses recognized on financial assets, and losses on hedging instruments that are recognized in profit or loss. Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset are capitalized as part of the cost of that asset.

(r) Income Tax

Income tax expense comprises current and deferred tax. Current tax and deferred tax are recognized in profit or loss except to the extent that it relates to a business combination, or items recognized directly in equity or in other comprehensive income.

(i) Current tax

Current tax comprises the expected tax payable or receivable on the taxable profit or loss for the year, using tax rates enacted or substantively enacted at the reporting date and any adjustment to tax payable in respect of previous years. The amount of current tax payable or receivable is the best estimate of the tax amount expected to be paid or received that reflects uncertainty related to income taxes, if any. The taxable profit is different from the accounting profit for the period since the taxable profit is calculated excluding the temporary differences, which will be taxable or deductible in determining taxable profit (tax loss) of future periods, and non-taxable or non-deductible items from the accounting profit.

(ii) Deferred tax

Deferred tax is recognized, using the liability method, in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and deferred tax assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

The Company recognizes a deferred tax liability for all taxable temporary differences associated with investments in subsidiaries, associates, and interests in joint ventures, except to the extent that the Company is able to control the timing of the reversal of the temporary differences and it is probable that the temporary differences will not reverse in the foreseeable future. A deferred tax asset is recognized for all deductible temporary differences to the extent that it is probable that the differences relating to investments in subsidiaries, associates and joint ventures will reverse in the foreseeable future and taxable profit will be available against which the temporary difference can be utilized.

Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

The Company offsets deferred tax assets and deferred tax liabilities if, and only if, the Company has a legally enforceable right to set off current tax assets against current tax liabilities and the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority.

3. Summary of Significant Accounting Policies, Continued

(s) Earnings (Loss) Per Share

The Company presents basic and diluted earnings (loss) per share (“EPS”) data for its common stocks. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of common stocks outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of common stocks outstanding, adjusted for the effects of all dilutive potential common stocks such as convertible bonds and others.

(t) Business Combinations

The Company accounts for business combinations using the acquisition method when control is transferred to the Company. The consideration transferred in the acquisition and the identifiable net assets acquired from business combinations are measured at fair value. If the consideration transferred exceeds the fair value of identifiable net asset, the Company recognizes goodwill; if not, then the Company recognizes gain on a bargain purchase. Any goodwill that arises is tested annually for impairment. Transaction costs are expensed as incurred, except if related to the issue of debt or equity instruments in accordance with K-IFRS No. 1032 and K-IFRS No. 1109. The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are generally recognized in profit or loss.

(u) Standards issued but not yet effective

A number of amended standards are effective for annual periods beginning after January 1, 2022 and earlier application is permitted; however, the Company has not early adopted the amended standards in preparing these separate financial statements.

(i) Classification of current/non-current liabilities

(K-IFRS No. 1001, ‘Presentation of Financial Statements’.)

The amendment clarifies that in order for the borrower to have the right to defer settlement of Liabilities, it must meet the conditions of contracts at the end of the reporting period and clarifies that the possibility of the borrower exercising the right to defer settlement of liabilities for more than 12 months after the reporting period does not affect the liquidity classification of liabilities. . In addition, when the settlement of liabilities includes the transfer of equity instruments, where compound financial instrument has a liability and equity portion separately recognised, it does not affect the classification for liquidity purposes. The amendment will take effect for fiscal years beginning after January 1, 2023, and early application is permitted. However, the International Accounting Standards Committee has published an amendment to postpone the effective date of this amendment to the fiscal year beginning after January 1, 2024, and the Korea Accounting Institute will also revise the K-IFRS to reflect it. The Controlling Company is monitoring the revision process.

3. Summary of Significant Accounting Policies, Continued

(ii) The following new and amended standards are not expected to have a significant impact on the Company’s separate financial statements.

• Deferred taxes on assets and liabilities arising from a single transaction (K-IFRS No. 1012, ‘Income Taxes’.)

• Definition of materiality (K-IFRS No. 1001, ‘Presentation of Financial Statements’.)

• Definition of Accounting estimate (K-IFRS No. 1008, ‘Accounting Policies, Changes in Accounting Estimates and Errors’.)

• Disclosure of Financial Liabilities Valuation Gains and Losses with Exercise price Adjustment Conditions (K-IFRS No. 1001, ‘Presentation of Financial Statements’.)

For the years ended December 31, 2022 and 2021, details of the Company’s appropriations of retained earnings are as follows:

(In millions of won, except for cash dividend per common stock)
	2022			2021
Retained earnings before appropriations
Unappropriated retained earnings carried over from prior year	W	6,200,773			5,904,438
Profit(Loss) for the year		(3,191,387	)		552,173
		3,009,386			6,456,611
Appropriation of retained earnings (*)
Earned surplus reserve		—			23,258
Cash dividend
(Dividend per common stock (%): 2021: W650 (13%))		—			232,580
		—			255,838
Unappropriated retained earnings carried forward to the following year	W	3,009,386			6,200,773

(*) For the years ended December 31, 2022 and 2021, the date of appropriation is March 21, 2023 and March 23, 2022, respectively.

※ Please refer to the detailed footnotes and final financial statements in the audit report, which will be on the electronic disclosure system (<http://dart.fss.or.kr>) by the second week of March.

B. Agenda 2: Appointment of Director

• The following candidates were proposed to be reappointed as director.

1. Name: Hoyoung Jeong (Inside Director)

1) Date of birth: November, 1961

2) Candidate for Outside Director: None

3) Nominator: Board of Directors

4) Appointment Term: 3 years

5) Type of appointment: Reappointed

6) Main experience

• COO and CFO of LG Chem (2016~2019)

• CFO of LG Household & Health Care (2014~2015)

7) Present position: CEO, President of LG Display (2019~)

8) Business Transaction with LG Display during the last 3 years: None

9) Reasons for nomination:

• Mr. Hoyoung Jeong has served as the CFO and COO of major affiliates of LG Display Co., Ltd. (the “Company”), including LG Electronics and LG Chem. Having previously served as the Company’s CFO (2008~2013) and as the Company’s CEO (2019~present), he is highly familiar with the Company’s internal affairs and has a sound understanding of the display and electronics industries and, therefore, will be able to make positive contributions to the Company as a director.

2. Name: Jungsuk Oh (Outside Director)

1) Date of birth: September, 1970

2) Candidate for Outside Director: Yes

3) Nominator: Outside Director Nomination Committee

4) Appointment Term: 3 years

5) Type of appointment: Newly Appointed

6) Main experience

• Vice President of The Korean Operations Research and Management Science Society (KORMS) (2020~2021)

• Director of the Korean Academic Society of Business Administration (KASBA) (2017~2018)

7) Present position: Professor of Operations Management at Seoul National University (2007~)

8) Business Transaction with LG Display during the last 3 years: None

9) Reasons for nomination:

• Ever Since his appointment as a temporary outside director, Mr. Jungsuk Oh has diligently served his duties as an outside director of the BOD, Audit Committee, ESG Committee and Related Party Transaction Committee. As a leading management expert in Korea, he is expected to make positive contributions to the Company’s management decision-making and development through his comprehensive understanding of, and interest in, the Company’s business lines.

3. Name: Sang-Hee Park (Outside Director)

1) Date of birth: December, 1965

2) Candidate for Outside Director: Yes

3) Nominator: Outside Director Nomination Committee

4) Appointment Term: 3 years

5) Type of appointment: Newly Appointed

6) Main experience

• Fellow, The Society of Information Display (SID) (2017~)

• President of The Korean Information Display Society (KIDS) (2022)

7) Present position: Professor of Materials Science and Engineering, KAIST (2014~)

8) Business Transaction with LG Display during the last 3 years: None

9) Reasons for nomination:

• Ms. Sang-Hee Park is an expert in display field and she is expected to lead the Company’s development in relation to industrial trend and future technology of display. As a leading expert in display field with a wide array of experience and academic reputation, she is expected to make positive contributions to the Company’s development as a director.

C. Agenda 3: Appointment of Audit Committee Member

• The following candidates were proposed to be newly appointed as Audit Committee Member.

1. Name: Jungsuk Oh

1) Date of birth: September, 1970

2) Candidate for Outside Director: Yes

3) Nominator: Board of Directors

4) Appointment Term: 3 years

5) Type of appointment: Newly Appointed

6) Main experience

• Vice President of The Korean Operations Research and Management Science Society (KORMS) (2020~2021)

• Director of the Korean Academic Society of Business Administration (KASBA) (2017~2018)

7) Present position: Professor of Operations Management at Seoul National University (2007~)

8) Business Transaction with LG Display during the last 3 years: None

9) Reasons for nomination:

• Ever Since his appointment as a temporary outside director, Mr. Jungsuk Oh has diligently served his duties as an outside director of the BOD, Audit Committee, ESG Committee and Related Party Transaction Committee. As a leading management expert in Korea, he is expected to make positive contributions to the Company’s management decision-making and development through his comprehensive understanding of, and interest in, the Company’s business lines.

2. Name: Sang-Hee Park

1) Date of birth: December, 1965

2) Candidate for Outside Director: Yes

3) Nominator: Board of Directors

4) Appointment Term: 3 years

5) Type of appointment: Newly Appointed

6) Main experience

• Fellow, The Society of Information Display (SID) (2017~)

• President of The Korean Information Display Society (KIDS) (2022)

7) Present position: Professor of Materials Science and Engineering, KAIST (2014~)

8) Business Transaction with LG Display during the last 3 years: None

9) Reasons for nomination:

• Ms. Sang-Hee Park is an expert in display field and she is expected to lead the Company’s development in relation to industrial trend and future technology of display. As a leading expert in display field with a wide array of experience and academic reputation, she is expected to make positive contributions to the Company’s development as a director.

D. Agenda 4: Approval of Remuneration Limit for Directors (KRW 4.5 billion)

• Remuneration limit for directors in 2023 is for all 7 directors including 4 outside directors.

• The Company lowers remuneration limit in 2023 to KRW 4.5 billion in accordance with the latest business performance and conservative business outlook.

Category	FY2022	FY2023
Number of Directors (Number of Outside Directors)	7 (4)	7 (4)
Total Amount of Remuneration Limit	KRW 6.0 billion	KRW 4.5 billion

IV. Matters Relating to the Solicitor of Proxy

1. Matters Relating to the Solicitor of Proxy

A. Name of Solicitor: LG Display Co., Ltd.

B. Number of LG Display Shares Held by Solicitor: None

C. The Principal Shareholders of the Solicitor

Name of principal shareholder	Relationship with LGD	Number of shares held	Ownership ratio
LG Electronics Inc.	Largest shareholder	135,625,000 (Common stock)		37.90	%
Hoyoung Jeong	Director	15,000 (Common stock)		0.00	%
Total	—	135,640,000 (Common stock)		37.91	%

2. Matters Relating to the Proxy

Name of Agents for the Proxy	Jinjoo Kim	Seunghyun Lee
Number of Shares Held by Agents as of 2022 End	—	—
Relationship with LGD	Employee	Employee

3. Criteria for Shareholders Whom Proxy is Asked to

• All shareholders holding shares of LGD common stock as of 2022 End

4. Others

• The Period of Proxy Instruction: From Feb. 22, 2023 to Mar. 21, 2023

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	LG Display Co., Ltd.
	(Registrant)
Date: February 17, 2023	By: /s/ Suk Heo
	(Signature)
	Name: Suk Heo
	Title:   Director / Head of IR Division