DKSH Holding AG — Annual Report 2023

Feb 15, 2024

DKSH at a Glance

As a leading Market Expansion Services provider, we deliver growth for companies in Asia and beyond.

Our Business Units

Our Business Units focus on the fields of Healthcare, Consumer Goods, Performance Materials, and Technology, and offer a comprehensive range of Market Expansion Services to business partners in their respective areas.

Healthcare

With a product range covering pharmaceuticals, consumer health, and over-thecounter health products, as well as medical devices, we offer services including product registration, marketing and sales, and capillary physical distribution.

Consumer Goods

Focusing on fast moving consumer goods, food services, hotel supplies, and luxury and lifestyle products, our services range from product feasibility studies to sales and marketing, and capillary physical distribution.

Performance Materials

We source, develop, market, and distribute a wide range of specialty chemicals and ingredients for the specialty chemicals, food and beverage, pharmaceutical, and personal care industries.

Technology

We cover a broad range of capital investment goods and analytical instruments for which we offer marketing, sales, distribution, and after-sales services.

Net sales 2023 by region in %

Net sales 2023 by Business Unit in %

Core EBIT 2023 by Business Unit² Net sales in CHF million (2019–2023) Core EBIT in CHF million (2019–2023) in %

• ¹ Thereof Mainland China 2.5%
• ² Excl. Business Unit "Other"

Contents

2	Letter to Shareholders

• DKSH Share Information
• Key Figures
• Sustainability
• Corporate Governance
• Compensation Report
• Management's Discussion & Analysis
• Consolidated Financial Statements DKSH Group
• Financial Statements DKSH Holding Ltd.

Letter to Shareholders

Marco Gadola, Chairman, and Stefan P. Butz, CEO

Dear shareholders,

DKSH continued its track record of growth and margin expansion alongside strong cash generation in 2023. The appreciation of the Swiss franc, the normalization of the global specialty chemicals market following two years of remarkably high demand, and a subdued consumer sentiment all represented notable challenges. At the same time, tourism in Asia picked up and supply chain volatility and inflationary trends eased.

We are therefore pleased to report that our Core EBIT once again exceeds last year's level. Our Core EBIT growth of 12.6% (at CER, constant exchange rates) to CHF 329.9 million shows the resilience and scalability of our business model. The compelling Free cash flow of CHF 282.3 million, an increase of 34.7% from CHF 209.5 million in 2022, allows us to pursue our M&A strategy and to propose a higher ordinary dividend.

The improvements we have implemented in recent years have directly contributed to our financial track record. Since 2019, our Core EBIT increased by 10.1% per year (at 2019 exchange rates), while our Core EBIT margin expanded by 60 basis points. Over the last five years, we generated more than CHF 1.1 billion in Free cash flow, returned approximately CHF 640 million in dividends to our shareholders, and made 25 acquisitions.

Throughout 2023, we have consistently advanced and developed our business. We entered new strategic partnerships with clients in different markets and acquired three companies, thereby extending our presence across regions, broadening our supplier as well as customer base, and enhancing our value-added services.

We grew our digital business and won in several categories at the Asia eCommerce Awards. This is a confirmation of DKSH's consistent commitment to its digital strategy and the development of its performance marketing as well as eCommerce capabilities according to clients' needs.

To further develop our operational excellence, we have upgraded different facilities such as demonstration and calibration laboratories in Business Unit Technology, as well as several of our distribution centers.

Our efforts to evolve our corporate culture have also proven successful. We have been awarded with the Great Place to Work certification in nine markets and received a higher employee engagement score.

During 2023, we closed two sustainability-linked credit facilities and have been recognized for our sustainability achievements by EcoVadis receiving the Gold Rating for the second year in a row. With our improved score, DKSH now ranks among the top 4% of all companies rated by EcoVadis.

Finally, we celebrated 100 years of market presence in Malaysia and Hong Kong. Going forward, we will continue to demonstrate our unwavering dedication to our business in these markets.

All Business Units Improved Performance

These achievements are reflected by the fact that all four Business Units increased their Core EBIT (at CER) compared to 2022.

Business Unit Healthcare accelerated Net sales growth (6.5% at CER) in 2023 and further increased Core EBIT margin from 2.6% to 2.8%. A key driver for these excellent results was business development with existing and new clients in Thailand, Malaysia, and Vietnam as well as the strong underlying market. The continued focus on value-added segments and services, such as the Own Brands and Medical Device businesses, as well as Full Agency services, also contributed to the Business Unit's strong year. With the two acquisitions of Partizan in Australia as well as Medipharm in Brunei (early 2024), Business Unit Healthcare further strengthened its market presence and is well positioned for future profitable growth.

The focus of Business Unit Consumer Goods on its core activities resulted in Net sales growth (2.2% at CER) to CHF 3.5 billion. Core EBIT grew (at CER) and the Core EBIT margin was 2.3%. Following a detailed analysis of the portfolio, the strategic direction has evolved to an even stronger focus on the FMCG (Fast Moving Consumer Goods) business. Subsequently, DKSH decided to discontinue the non-profitable and non-core fashion retail business, which is already fully reflected in the 2023 results. With these steps, the Unit will continue capitalizing on its position in Asia Pacific and driving growth and profitability in its core business under the leadership of the new Business Unit Head.

Business Unit Performance Materials delivered Net sales growth of 6.1% (at CER) in a very challenging market environment. Driven by gross margin expansion and strong cost control, Core EBIT in 2023 was CHF 116.0 million and grew double-digit at CER with a strong Core EBIT margin increase of 40 basis points to 8.1%. To provide additional disclosure and enhance industry comparability: DKSH increased Core EBITA from CHF 115.7 million to CHF 125.6 million (+17.4% at CER) and expanded the Core EBITA margin from 7.9% to 8.7% (+80 basis points), with positive contributions by all regions. At the same time, the Unit successfully reduced inventory levels and improved working capital days. In Asia Pacific and Europe, the Unit benefited from robust demand across the life science sector (food and beverages, pharma, personal care). A scalable and global business model, its business development pipeline, and further industry consolidation potential provide future growth opportunities.

Business Unit Technology again achieved remarkably strong results in 2023. Both Net sales and Core EBIT increased double-digit (at CER), resulting in a higher Core EBIT margin of 6.8%. Business Unit Technology continued to grow key areas

such as scientific instrumentation, precision machinery, and equipment for the semiconductor industry. The consumables and service segments continued to be important growth drivers. With the acquisition of Bio-Strategy in Australia and New Zealand, Business Unit Technology strengthened its leading position in the scientific instrumentation space in Asia Pacific. With further market consolidation potential ahead, the Business Unit will keep fostering its position in key industries and higher margin segments and services.

Capitalizing on our Proven Business Model

Based on an encouraging financial performance, the Board of Directors proposes an ordinary dividend of CHF 2.25 per share to the next Ordinary General Meeting. The proposed dividend represents a CHF 0.10 increase versus last year, or a growth of 4.7%. Pending approval by the next Ordinary General Meeting, the payment date for the dividend is set to start on April 3, 2024 (record date: April 2, 2024; ex-dividend date: March 28, 2024). At the same time, we will continue pursuing our M&A strategy.

DKSH is committed to deliver GDP+1 sales growth (at CER) and expects Core EBIT (at CER) in 2024 to be higher than in 2023 based on its resilient business model, successful strategy execution, and strong balance sheet. This outlook assumes economic growth in Asia Pacific, exchange rates to remain at current levels, and excludes unforeseen events.

Our robust business model, large share of daily consumption items, and strong balance sheet provide resilience and offer growth opportunities at the same time. We will continue developing our business through diligent strategy implementation, digitalization, cultural transformation, sustainability, and M&As, while focusing on operational excellence.

We would like to thank our employees for their great work and commitment as well as all our stakeholders for their continuous trust. We look forward to continuing our cooperation in 2024.

Sincerely yours,

Chairman CEO

Marco Gadola Stefan P. Butz

DKSH Share Information

Share Price and Market Capitalization
in CHF	2023	2022
Share price (end of period)1	58.40	70.20
High1	80.95	84.65
Low1	55.30	67.80
Market capitalization in CHF millions (end of period)1	3,799	4,566
Dividend per share	2.252	2.15

Share Information
Listing	SIX Swiss Exchange
Ticker symbol	DKSH
ISIN	CH0126673539
Swiss security number	12667353
Category	Registered shares
Number of fully paid registered shares	65,042,963
Par value	CHF 0.10

Significant Shareholders
Shareholdings in %3	2023
Diethelm Keller Holding AG, 8008 Zurich, Switzerland	45.0
Black Creek Investment Management Inc., Canada	3.02

Source: SIX Swiss Exchange.

Proposed by the Board of Directors.

For details please see section Significant Shareholders of the Corporate Governance Report.

Key Figures

Consolidated Income Statement
in CHF millions	2023	2022	Change in %	Change in %
Net sales	11,066.0	11,320.2	(2.2)	5.3
Core operating profit (EBIT)	329.9	319.2	3.4	12.6
Operating profit (EBIT)	305.9	319.2	(4.2)	5.1
Core profit after tax	206.0	208.4	(1.2)	5.8
Profit after tax	189.9	207.6	(8.5)	(1.5)
Free cash flow	282.3	209.5	34.7	n/a

Consolidated Statement of Financial Position
in CHF millions	December 31, 2023	December 31, 2022
Total assets	5,471.2	5,878.7
Equity attributable to the shareholders of DKSH Holding Ltd.	1,686.9	1,758.5
Net operating capital (NOC)	1,692.4	1,837.2
Net cash/(debt)	6.5	(42.3)
Core return on net operating capital (RONOC) (in %)	18.7	19.2
Core return on equity (ROE) (in %)	11.7	11.5

Earnings per Share
in CHF	2023	2022
Basic earnings per share	2.80	3.09
Diluted earnings per share	2.80	3.09

Other
	December 31, 2023	December 31, 2022
Headcount	29,040	32,601
Full-time equivalents	27,062	31,077

Constant exchange rates (CER): 2023 figures converted at 2022 exchange rates.

Sustainability

We take responsibility for the environmental, social, and economic impacts of our business activities. Our commitment to creating a sustainable future means we also manage long-term, profitable growth in a responsible manner.

Sustainability is an Integral Part of Our Business

Sustainability is one of DKSH's five values. We take responsibility for the environmental, social, and economic impact of our business activities as determined by our materiality assessment. Our commitment to creating a sustainable future means that we want to achieve long-term, profitable growth in a responsible manner. We believe that sustainable value creation goes hand-in-hand with responsible governance and managing the impacts that our activities have on society and the environment. Providing access to markets and products is our core activity. Creating employment opportunities is also vital. After all, our activities are guided by our purpose to enrich people's lives through our contribution to sustainable development in the markets and communities in which we operate.

Sustainability Strategy

Our Corporate Strategy, which is confirmed by our highest governance body, the Board of Directors, has three strands: a strategy for the Group and the Business Units, a strategy for the Functions, and thematic focus areas. The Business Units have set a specific goal related to sustainability. Additionally, sustainability itself is one of the thematic focus areas within the Corporate Strategy.

The Sustainability Strategy thus helps to flesh out the sustainability component of our Corporate Strategy. As stated in our Sustainability Strategy, our ambition is for each Business Unit to take a proactive and competitive approach to sustainability. We want to become a more sustainable company by emphasizing a decentralized approach at the Business Units and Functions level. By doing so, we can increase accountability and make strategy execution more effective and communication more efficient. This approach is especially beneficial because it allows us to take local needs into account and pinpoint the best solutions for Business Units and Functions, which in turn enables us to deploy tailor-made solutions for the Business Units' specific products and business models.

Our ambition is for each Business Unit to take a proactive and competitive approach to sustainability.

Enable Our People to Flourish

Human rights

Developing our talent

Embracing diversity

Employee engagement

Make Our Value Chains More Sustainable

Human rights Responsible procurement

Waste management

Solar panels

Become Climate-neutral by 2030

(Scope 1+2)

Climateneutral operations

Emission transparency

Make a Positive Local Impact

Local community Social impact strategy

Sustainability Governance

At our company, the Board of Directors of DKSH governs sustainability by charting the strategic direction for the Group and overseeing strategy implementation. In doing so, it is guided by the Group's values and our Sustainability Strategy.

The Executive Committee, DKSH's highest executive management body, is tasked with implementing the Sustainability Strategy supported by a Sustainability Committee, chaired by Group Sustainability and made up of representatives from the Business Units and Functions. The Sustainability Committee plans, coordinates, monitors, and reports on sustainability initiatives and actions. DKSH's climate, environmental, social, and governance performance is one component of our Executive Committee's annual variable bonus to create an incentive to achieve our sustainability targets.

For more information regarding sustainability at DKSH please refer to the DKSH Sustainability Report 2023

Corporate Governance

In overseeing an international company operating in 35 markets, DKSH's Board of Directors has committed itself to maintaining the highest standards of integrity and transparency in its governance.

DKSH Holding Ltd. (the Company) is committed to good corporate governance standards and considers compliance with such standards as indispensable for a sustainable and valuable relationship with its stakeholders and the Group's future success. This Corporate Governance Report contains the information required by the Directive Relating to Information on Corporate Governance of the SIX Swiss Exchange valid as of December 31, 2023, and follows the Directive's structure. The Corporate Governance Report and the Compensation Report also contain the legally required disclosure of compensation and participation rights at the highest corporate level. The principles and rules of Corporate Governance as practiced by the Company are laid down in the Articles of Association and further internal regulations. These are reviewed on a regular basis by the Board of Directors of the Company.

1. Group Structure and Shareholders

Group Structure

Operational Group Structure

The operational structure of the Group corresponds to the segment reporting presented in Note 3 to the Consolidated Financial Statements:

• Healthcare
• Consumer Goods
• Performance Materials
• Technology
• Other (non-Business Unit)

Listed Companies of the Group

The Company, the ultimate holding company of the Group, has its registered office in Zurich, Switzerland, and its shares are listed on the SIX Swiss Exchange, Zurich, according to the Main Standard. On December 31, 2023, the Company's market capitalization amounted to CHF 3,799 million (65,042,963 marketable shares at CHF 58.40 per share).

On December 31, 2023, of the total of the Company's share capital on the closing date:

• the free float consisted of 35,775,233 shares = 55.0%, and
• 92,976 treasury shares

The Company's shares are traded under the symbol "DKSH", the security number is 12667353, and ISIN is CH0126673539.

DKSH Holdings (Malaysia) Berhad, of which the Company indirectly holds a 74.31% participation, has its registered office in Petaling Jaya, Malaysia, and its shares are listed on Bursa Malaysia Securities Berhad (Main Market), Malaysia. On December 31, 2023, DKSH Holdings (Malaysia) Berhad's market capitalization amounted to MYR 722.1 million (157,658,076 ordinary shares at MYR 4.58 per share). DKSH Holdings (Malaysia) Berhad shares are traded under the stock name "DKSH", the stock code is 5908, and ISIN is MYL5908OO008.

PT Wicaksana Overseas International Tbk, of which the Company holds a 80.88% participation as of December 31, 2023, has its registered office in Jakarta Utara, Indonesia, and its shares are listed on Indonesia Stock Exchange, Indonesia. On December 31, 2023, PT Wicaksana Overseas International Tbk's market capitalization amounted to IDR 290 billion (2,393,710,348 ordinary shares at IDR 121 per share). PT Wicaksana Overseas International Tbk's shares are traded under the stock name "WICO", the stock code is WICO, and ISIN is ID1000066301.

Significant Group Companies

The principal subsidiaries of the Group are disclosed in Note 35 to the Consolidated Financial Statements, including particulars as to the market, name of the company, registered office, share capital and the Group's shareholding in percent. Such list includes the most important subsidiaries of the Group based on (i) net sales, (ii) total assets, and (iii) FTEs.

Significant Shareholders

Under the Federal Act on Financial Market Infrastructures and Market Conduct in Securities and Derivatives Trading (FinMIA), anyone holding shares in a company listed on the SIX Swiss Exchange is required to notify the company and the SIX Swiss Exchange if their holding reaches, falls below, or exceeds the following thresholds: 3%, 5%, 10%, 15%, 20%, 25%, 33⅓%, 50%, or 66⅔% of the voting rights entered into the commercial register. Notifications must also include financial instruments, regardless of whether cash or physically settled, constituting a purchase or a sale position. Upon receipt of such notifications, the company is required to inform the public.

Cross-shareholdings

As of December 31, 2023, the Company does not have any cross-shareholdings of a reciprocal 5% of capital or voting rights with any other company.

Significant Shareholders1	Shareholdings in %2
Diethelm Keller Holding AG, 8008 Zurich, Switzerland3	45.0
Black Creek lnvestment Management Inc. ("Black Creek"), 123 Front Street, Suite 1200, M5J 2M2, Toronto, Ontario, Canada	3.02

¹ Information as of December 31, 2023, according to the notification filed with SIX Swiss Exchange until and including December 31, 2023. In addition, information on disclosures by significant shareholders as to the Company under the FinMIA until and including December 31, 2023, can be found on the website of SIX Swiss Exchange under www.ser-ag.com/en/resources/notifications-market-participants/significant-shareholders.html#/.

² According to Swiss law, shareholdings must be calculated based on the number of shares reflected in the Company's excerpt of the commercial register at the time the notification is made.

³ By virtue of a shareholders' agreement dated December 6, 2011 (as amended) (relating to the registered shares in DKH Holding AG), 14 members of the families of Andreas W. Keller and Adrian T. Keller constitute the Family Pool. Decisions of the Family Pool, in particular decisions on the voting of the shares in Diethelm Keller Group AG, are delegated to a certain Family Council, consisting of Andreas W. Keller, CH-8126 Zumikon and Adrian T. Keller, CH-8702 Zollikon. The Family Pool's indirect shareholding in DKSH Holding AG is controlled through the Family Pool's controlling stake in Diethelm Keller Group AG, Zurich, Switzerland (in which the Family Pool directly controls 7,650 registered shares, corresponding to 88.34% of the share capital and voting rights in Diethelm Keller Group AG), which in turn owns all outstanding shares and voting rights in DKH Holding AG, Zurich, Switzerland, which in turn owns all shares and voting rights in Diethelm Keller Holding AG, Zurich, Switzerland (which is the direct owner of the shares in DKSH Holding AG).

2. Capital Structure

Share Capital

As of December 31, 2023, the ordinary share capital of the Company amounts to CHF 6,504,296.30 and is divided into 65,042,963 registered shares with a nominal value of CHF 0.10 each.

Authorized Share Capital and Conditional Capital Authorized Share Capital

As of December 31, 2023, the Company does not have any authorized share capital.

Conditional Share Capital

As of December 31, 2023, the Company's share capital may be increased in the amount of up to CHF 28,253.70 (which would lead to a share capital in the maximum amount of CHF 6,532,550) by issuing up to 282,537 fully paid registered shares with a nominal value of CHF 0.10 each (which would equate to 0.43% of the existing share capital). Such shares may be used for the purpose of employee participation. The Board of Directors determines the issue price as well as the date of the dividend entitlement and resolves on the allocation of the shares pursuant to the relevant participation plan. Shareholders have no pre-emptive rights.

On March 16, 2023, the Company resolved on a further conditional capital. The Company's share capital may be increased in an amount not exceeding CHF 300,000 through the issuance of up to 3,000,000 fully paid-in registered shares with a par value of CHF 0.10 each through the exercise or mandatory exercise of conversion, option, subscription or other rights to acquire shares or through obligations to acquire shares, which were granted to or imposed on shareholders or third parties alone or in connection with bonds, notes, options, warrants or other securities or contractual obligations of the Company or any of its group companies (hereinafter collectively referred to as Financial Instruments).

The Board of Directors is authorized to restrict or withdraw advance subscription rights of shareholders in connection with the issuance of Financial Instruments by the Company or one of its group companies and allocate such rights to third parties, the Company or any of its group companies if the Financial Instruments are issued for the acquisition of companies, part(s) of companies or participations, for the acquisition of products, intellectual property or licenses by or for investment projects of the Company or any of its group companies, or for the financing or refinancing of any of such transactions through a placement of shares.

As of December 31, 2023, the Company's total conditional share capital amounts to 3,282,537 shares or CHF 0.33 million.

Change in Capital Over the Past Three Years

In addition to the tabular overview, information about changes in the capital during the years 2021 through 2023 is presented in Note 27 to the Consolidated Financial Statements.

Shares and Participation Certificates

As of December 31, 2023, the Company has issued 65,042,963 fully paid-in registered shares with a nominal value of CHF 0.10 each. Except for the treasury shares held by the Company (if any), each share carries one vote (subject to the relevant shareholder being registered in the share register as a shareholder with voting rights), and each share carries a dividend entitlement. As of December 31, 2023, the Company held 92,976 treasury shares.

As of December 31, 2023, the Company has not issued any non-voting equity securities, such as participation certificates (Partizipationsscheine)

Dividend-Right Certificates (Genussscheine)

As of December 31, 2023, the Company has not issued any dividend-right certificates (Genussscheine).

Limitations on Transferability and Nominee Registrations

Each share recorded and registered under a shareholder's name in the share register of the Company entitles its holder to one vote. There are no preferential rights for individual shareholders. There are no voting right restrictions and, consequently, no exceptions were made in 2023.

The shares of the Company are issued as uncertificated securities and registered as intermediated securities. They are included in the SIX SIS clearing system. Transfers of intermediated shares, including the granting of security interests, are subject to the Federal Act on Intermediated Securities (Bucheffektengesetz). The transfer of uncertificated shares is effected by a corresponding entry in the books of

Change in Capital Over the Past Three Years	2021	2022	2023
Number of shares, January 1	65,042,963	65,042,963	65,042,963
Share capital in CHF, January 1	6,504,296.30	6,504,296.30	6,504,296.30
Number of shares, change during year	0	0	0
Share capital in CHF, change during year	0	0	0
Number of shares, December 31	65,042,963	65,042,963	65,042,963
Share capital in CHF, December 31	6,504,296.30	6,504,296.30	6,504,296.30

a bank or depositary institution following an assignment by the selling shareholder and notification of such assignment to the Company by the bank or depositary institution. The transferee must file a share registration form to be registered in the Company's share register as a shareholder with voting rights. Failing such registration, the transferee may not vote at, or participate in any General Meeting but may still receive dividends and other rights with financial value. The uncertificated shares may be transferred only with the assistance of the bank that administers the book entries of such shares for the account of the transferring shareholder.

Further, shares may be pledged only to the bank that administers the book entries of such shares for the account of the pledging shareholder; in such case, the Company needs to be notified. According to the Articles of Association, a person having acquired shares will be recorded upon request in the Company's share register as a shareholder with voting rights. The Company may refuse to record a person in the share register as a shareholder with voting rights, if such person does not expressly state that he/she has acquired the shares in his/her own name and for his/her own account.

Upon request, fiduciaries/nominees may be entered as shareholders in the share register with voting rights for shares up to a maximum of 3% of the share capital. Shares held by a fiduciary/nominee that exceed this limit may be registered in the share register with voting rights, if such fiduciary/nominee discloses to the Company the name, address, nationality, or registered office and shareholdings of any person or legal entity for whose account it is holding 0.5% or more of the share capital.

Fiduciaries/nominees who are affiliated with other fiduciaries/nominees by means of ownership structure or voting rights or that have a common management or are otherwise affiliated, are deemed one fiduciary/nominee as regards the application of such entry limitations. The Board of Directors may, at its discretion and after questioning a shareholder or nominee who is entered in the share register, remove their entry with retroactive effect as of the date of their entry if this was made based on incorrect information. The affected shareholder or fiduciary/nominee must be notified of the cancelation immediately. Legal entities, partnerships or groups of joint owners, or other groups that are related to one another through capital ownership or voting rights or have a common management or are otherwise interrelated are treated as one single shareholder.

In 2023, no such request was made, and thus no exception was made.

Convertible Bonds and Options

As of December 31, 2023, the Company has not issued any bonds that are convertible into shares, or any warrants or options to acquire shares in the Company.

3. Board of Directors

The following table provides an overview of the Company's Board of Directors (the Board of Directors) as of December 31, 2023.

Name	Function	Committee Membership	Director Since	Expiry Date
Marco Gadola	Chairman		2020	2024
Gabriel Baertschi1	Member Member	Nomination and Compensation Committee Mergers and Acquisitions Committee	2023	2024
Adrian T. Keller	Member Member	Nomination and Compensation Committee Mergers and Acquisitions Committee	2002	2024
Dr. Wolfgang Baier	Member		2019	2024
Jack Clemons	Member Member	Audit Committee Mergers and Acquisitions Committee	2019	2024
Andreas W. Keller	Member		2002	2024
Prof. Dr. Annette G. Köhler	Chair	Audit Committee	2018	2024
Dr. Hans Christoph Tanner	Chair Member	Mergers and Acquisitions Committee Audit Committee	2011	2024
Eunice Zehnder-Lai	Chair	Nomination and Compensation Committee	2018	2024

¹ Gabriel Baertschi was elected to the Board of Directors as of March 16, 2023.

Marco Gadola, Chairman

(1963, Swiss)

Marco Gadola has been a member of the Board of Directors of DKSH since January 1, 2020, and Chairman of the Board of Directors since May 2020. He was CEO of the Straumann Group from 2013 until the end of 2019. Previously, he was the Regional CEO of Asia Pacific at Panalpina from 2012 to 2013 and CFO of Panalpina from 2008 to 2012. From 2006 to 2008, he was CFO of Straumann. Before joining Straumann for the first time in 2006, he was CFO of Hero from 2001 to 2006 and before that, worked for Hilti, Sandoz International Ltd., and Swiss Bank Corporation. Marco Gadola is Chairman of the Board of Directors of WS Audiology and Medartis Holding AG, Vice Chairman of the Board of Directors of MCH Group AG, as well as a member of the Board of Directors of Straumann Holding AG, AVAG Anlage und Verwaltungs AG, and Bühler Holding AG. He is also a member of the Standortförderungskommission Baselland. Marco Gadola holds a degree in Business Administration and Economics from Basel University, Switzerland, and has completed various programs at the London School of Economics, UK, INSEAD, France, and IMD, Switzerland.

Gabriel Baertschi

(1974, Swiss)

Gabriel Baertschi has been a member of the Board of Directors of DKSH since March 2023 and is currently a member of the Nomination and Compensation Committee and the Mergers and Acquisitions Committee. He is CEO and Chairman of the Corporate Executive Board of Grünenthal GmbH. Prior to taking the position at Grünenthal, he worked for the AstraZeneca Group as Company President of Japan (2013 to 2016), as Company President of Germany (2010 to 2012), as Company President of Thailand (2009 to 2010), and as General Manager of Vietnam and Indochina (2006 to 2009). Prior to his appointment to the Executive Committee, Gabriel Baertschi held various strategic roles in international sales and marketing with the AstraZeneca Group. Gabriel Baertschi is a member of the Board of Directors of MedXCell SA, a Swiss-French biotech company focused on cell therapy, and RealizedCare, a digital care start-up company based in the USA. Gabriel Baertschi holds a Master of Science in Biology from the University of Neuchâtel, Switzerland. He also successfully completed the program "Leading Enterprise Transformation" at Harvard Business School, USA.

Dr. Wolfgang Baier

(1974, Austrian)

Dr. Wolfgang Baier has been a member of the Board of Directors of DKSH since 2019. He has been the Group CEO of Luxasia, a leading Asian omni-channel beauty distributor and retailer, since August 2016, and has joined the Board of Directors in November 2022. Prior to that, Dr. Wolfgang Baier was the Group CEO of the Singapore Post Group from 2011 to 2016. Previously, he worked for McKinsey & Company in Europe and Asia from 2001 to 2011, as a partner at the Singapore office, leading the Transportation and Logistics area as well as the Operations activities of McKinsey & Company in Southeast Asia. He is also Chairman of the Board of Directors of Tapouts (since January 2021) and a member of the Board of Directors of Asia Retail Concepts (since October 2017), L Beauty (since November 2017), Indosing Distribution (since September 2019), and LEAP Digi-Commerce (since November 2022). Dr. Wolfgang Baier holds a PhD in Law with distinction and a Master's degree in Law from the University of Vienna in Austria as well as a Master's degree in Business Economics from the Universities of Exeter, UK, and Graz, Austria.

Jack Clemons

(1966, Swiss/British)

Jack Clemons has been a member of the Board of Directors of DKSH since 2019 and is currently a member of the Audit Committee, and the Mergers and Acquisitions Committee. He also coordinates the Board's overview in relation to sustainability matters. From 2006 until 2016, Jack Clemons led the Bata Group, a global manufacturer, wholesaler, and retailer of footwear and accessories, as Group CEO and, previously, as Group CFO. Bata has substantial supply chain and sales operations throughout Asia. Before joining Bata, he founded an international consulting business operating in Europe and the US from 2004 to 2006, and was CFO and COO of the Firstream Group, developing digital and physical sales channels for brands throughout Europe, from 2000 to 2004. Prior to that, he was a partner at Deloitte in France and the USA from 1995 to 2000 and led Deloitte's European Technology practice. He worked as an Audit Supervisor at Touche Ross from 1989 until 1993. Jack Clemons has been a non-executive member of the Board of Directors, and member of the Audit Committee of Banque Cantonale Vaudoise (BCV) since 2016, and an advisor to the Board of Directors of Unit8 SA. Furthermore, he is a member of the International Board of Trustees and Chairman of the Audit & Risk Committee of the World Wide Fund for Nature (WWF) since 2017. Jack Clemons holds a Master's degree with honours from Cambridge University, UK, and is a Fellow of the Institute of Chartered Accountants in England and Wales. He also has an MBA from INSEAD, France.

Adrian T. Keller

(1951, Swiss)

Adrian T. Keller has been a member of the Board of Directors of DKSH since 2002 and is currently a member of the Nomination and Compensation Committee and the Mergers and Acquisitions Committee. He was Chairman of DKSH from 2004 until 2017 and again from 2019 to 2020. Since 2021, he has been Vice Chairman of Diethelm Keller Group Ltd., Zurich and since 2000, Vice Chairman of Diethelm Keller Holding Ltd., the anchor shareholder of DKSH. Since 1991, he has been a Board member (and from 1995 on Vice Chairman) of Eduard Keller Holding, which in 2000 became Diethelm Keller Holding Ltd., Zurich. From 1990 to 1995, he was Partner at Global Reach, New York, a private equity and investment firm. Between 1983 and 1990, he was Partner at Hoguet, Keller, Wittmann & Co., New York, a NASD-registered investment advisor and securities brokerage firm. From 1976 until 1983, he worked in international equity sales at Brown Brothers Harriman & Co., New York. In addition to holding various family business-related Board seats, Adrian Keller serves as Vice-Chairman on the Board of Directors of Bergos AG, a Swiss private bank, and is Chairman of Baur & Cie, a family real estate company. He is a Trustee of the Asia Society Global and Co-Chair of the Global Centers Committee, and Chairman of the Asia Society Switzerland Foundation. Beyond that, he serves on the Board of various not-profit organizations. He studied economics at the University of St. Gallen in Switzerland and graduated with an MBA (lic. oec. HSG) cum laude in 1976.

Andreas W. Keller

(1945, Swiss)

Andreas W. Keller has been a member of the Board of Directors of DKSH since 2002. He has been Chairman of the Board of Directors of Diethelm Keller Group Ltd., Zurich, since 2021 and Chairman of the Board of Directors and the Executive Committee of Diethelm Keller Holding Ltd., Zurich, the anchor shareholder of DKSH, since 2000. Prior to the merger of Diethelm & Co. and Edward Keller Ltd. in 2000, he presided over the Boards of Directors of both these companies. From 1985 to 1993, he was a member of the Management Board of Eduard Keller Holding. Before returning to Switzerland in 1985, he served as CEO and Chairman of Diethelm Keller (USA) Ltd. in New York, after having worked at Diethelm & Co., Thailand, from 1976 to 1980. Andreas W. Keller studied law at the University of Zurich (lic. iur.) in Switzerland and graduated from the Program for Management Development (PMD) at Harvard Business School, USA.

Prof. Dr. Annette G. Köhler

(1967, German)

Prof. Dr. Annette G. Köhler has been a member of the Board of Directors of DKSH since March 2018 and currently chairs the Audit Committee. She has been holding a chair in accounting and auditing at the University of Duisburg-Essen since 2005. Previously, she taught accounting and auditing in several universities and has also worked as a research assistant and management consultant. Prof. Dr. Annette G. Köhler is a member of the Supervisory Board and Chair of the Audit Committee of Gerresheimer AG (since June 2022), a member of the Supervisory Board and Chair of the Finance and Audit Committee of DMG Mori AG (since May 2017), and a member of the Supervisory Board, Chair of the Audit and Cybersecurity Committee, and a member of the Nomination Committee of GEA Group AG (since October 2020). From 2012 to 2017, she was a member of the International Auditing and Assurance Standards Board (IAASB), New York. Prof. Dr. Annette G. Köhler holds a Master of Arts in Economics from Wayne State University in Detroit, USA, and a Diploma in Economics and Business Administration from University of Augsburg, Germany. She also holds a PhD from the University of Cologne and a Habilitation from the University of Ulm, Germany.

Dr. Hans Christoph Tanner

(1951, Swiss)

Dr. Hans Christoph Tanner has been a member of the Board of Directors of DKSH since 2011. He currently chairs the Mergers and Acquisitions Committee and is a member of the Audit Committee. He is a member of the Board of Paion AG, Aachen and Qvanteq AG, Zurich, and a member of the Advisory Board of Joimax GmbH, Karlsruhe. Since January 2023, he has been an Entrepreneur in Residence of the Wyss Zurich Foundation. From 2006 until May 2016, he was CFO of Cosmo Pharmaceuticals SA, Luxembourg, from May 2016 to February 2020, Head of Transactions of Cosmo Pharmaceuticals NV, Dublin, and from 2015 to 2020, CFO of Cassiopea SpA, Lainate. From 1998 to 2002, he was with A&A Investment Management and was co-founder and member of the Board of 20 Min Holding AG and 20 Minuten Schweiz AG. Prior to this, he worked for UBS AG for 21 years, initially as a corporate banker in Madrid, Los Angeles, and Zurich, where he was the Head of Corporate Banking Asia, Australia, Africa and Southern Europe and as such a member of the Global Credit Committee. From 1992 to 1998, he then headed UBS AG's corporate finance and capital market activities in Zurich. Dr. Hans Christoph Tanner holds a degree in Economics (lic. oec. HSG) and a Doctorate in Economics from the University of St. Gallen in Switzerland.

Eunice Zehnder-Lai

(1967, Swiss/Hong Kong)

Eunice Zehnder-Lai has been a member of the Board of Directors of DKSH since March 2018 and currently chairs the Nomination and Compensation Committee. Until November 2018, Eunice Zehnder-Lai was CEO of IPM AG (Institut für Persönlichkeitsorientiertes Management). Previously, she was in the financial services industry for 20 years with LGT Capital Partners, Goldman Sachs, and Merrill Lynch in New York, London, Hong Kong, and Switzerland. She also worked for Procter & Gamble in marketing and brand management as well as for Booz & Co. in strategy consulting. Eunice Zehnder-Lai has been a member of the Board of Directors at Geberit Group (since 2017) and is currently Vice-Chairperson (since 2021). She is also a member of the Board of Directors of Julius Baer Group (since 2019). She is a Trustee of Asia Society Switzerland (since 2016), President of the Board of Trustees of the Friends of Asia Society Switzerland Arts and Culture Foundation (since 2017), and an Asia Society Global Trustee in New York (since 2020). She is a Trustee of Insights for Education (since 2021) and of the Orpheum Foundation for the Advancement of Young Soloists (since 2022). Eunice Zehnder-Lai holds a Master of Business Administration from Harvard Business School and a Bachelor of Arts degree from Harvard University, both in the USA.

Information About Managerial Positions and Significant Business Connections of Non-Executive Directors

All members of the Board of Directors are non-executive. None of the non-executive members has held a management position within the Group during the last three years.

Adrian T. Keller and Andreas W. Keller are members of the Family Pool and Family Council, as described in the section Significant Shareholders and are therefore related to Diethelm Keller Group AG, DKH Holding AG, and Diethelm Keller Holding AG, the Company's major shareholder. The Group entered into certain related party transactions for the purchase and sale of goods and services with Diethelm Keller Holding AG. Furthermore, the Group's Fantree logo is protected and owned by Diethelm Keller Holding AG. The Group is authorized to use such logo pursuant to a license agreement made between the Group company DKSH International AG and Diethelm Keller Holding AG.

No other member of the Board of Directors has any significant business connection with the Company or any other Group company. Therefore, DKSH considers all members as independent, except for Adrian T. Keller and Andreas W. Keller.

Other Activities and Functions

Any activities of the members of the Board of Directors in governing and supervisory bodies of important Swiss and foreign organizations, institutions, and foundations as well as permanent management and consultancy functions for important Swiss and foreign interest groups, and official functions and political posts that are material are stated in the Directors' biographies.

Rules in the Articles of Association on the Number of External Mandates – Permitted External Activities

According to § 24 of the Articles of Association, the members of the Board of Directors may hold a maximum of 12 additional mandates in the supreme governing or administrative bodies of legal entities which are required to be registered in the commercial register or in a comparable foreign register and which are not controlled by the Company or which do not control the Company whereby, no member may hold more than six such mandates in other listed companies. Mandates in separate legal entities under common control are deemed as one mandate. In the event that the maximum number of mandates is exceeded, the respective member of the Board of Directors must restore the lawful status within six months.

Elections and Terms of Office

Pursuant to § 15 of the Articles of Association and in compliance with the provisions of the Swiss Code of Obligations (CO), all members of the Board of Directors are elected for a term of one year ending upon due completion of the next Ordinary General Meeting. There are no restrictions with respect to the number of terms of service or the age of the relevant members. The elections are carried out at a General Meeting. Each member of the Board of Directors is (re-) elected individually. The year of initial election and expiry of the term of the members of the Board of Directors are shown next to their names in the table at the beginning of section 3.

Internal Organization Structure

Allocation of Tasks Within the Board of Directors

Pursuant to § 8 of the Articles of Association and in compliance with the CO, the Chairperson of the Board of Directors and the members of the Nomination and Compensation Committee are directly elected by the Ordinary General Meeting. Other than that, the Board of Directors constitutes itself. The Board of Directors has established an Audit Committee, a Nomination and Compensation Committee, and a Mergers and Acquisitions Committee (collectively, the Board Committees). The Ordinary General Meeting elects the Chairperson, and the Board of Directors elects the members of the Board Committees (other than the members of the Nomination and Compensation Committee, who are elected by the Ordinary General Meeting in compliance with the CO). The Board of Directors also appoints its Secretary (currently, Dr. Laurent Sigismondi, General Counsel and Head of CEO Office of DKSH and Member of the Executive Committee), who does not need to be a member of the Board of Directors. The Chairperson presides over the Board of Directors.

Quorum and decision-making of the Board of Directors are determined by the Articles of Association and the Organizational Regulations of the Company. Any internal regulations and policies are reviewed on a regular basis to ensure their continued compliance with the Articles of Association, applicable laws, and good corporate governance. The Articles of Association can be found on the Company's website at www.dksh.com/global-en/home/investors/annual-general-meeting.

Board Committees

The Board of Directors has established an Audit Committee, a Nomination and Compensation Committee, and a Mergers and Acquisitions Committee.

Audit Committee

The Audit Committee consists of two or more members of the Board of Directors who must be non-executive and independent. Its current members are Prof. Dr. Annette G. Köhler (Chair), Dr. Hans Christoph Tanner, and Jack Clemons.

The Audit Committee has the following powers and duties in relation to the statutory auditors and Group auditors:

(i) reviewing and assessing the effectiveness of the statutory auditors and the Group auditors, in particular their independence from the Company. In connection therewith, it reviews in particular additional assignments given by the Company or its subsidiaries. The Audit Committee may issue binding regulations or directives in connection with such additional assignments;

(ii) reviewing and assessing the scope and plan of the audit, the examination process and the results of the audit, and examining whether the recommendations issued by the auditors have been implemented by the Executive Committee; (iii) reviewing the auditors' reports and discussing their contents with the auditors; and

(iv) approving the terms and conditions of the engagement of the auditors.

Also, it has the following powers and duties in relation to the internal control system (internal audit, risk management, and compliance):

• (i) monitoring, reviewing, and assessing the effectiveness of the internal audit function, its professional qualifications, resources, and independence, and its cooperation with external audit;
• (ii) approving the annual internal audit plan and the annual internal audit report, including the responses of the management thereto;
• (iii) assessing the risk management and the procedures related thereto; and
• (iv) assessing the state of compliance with laws, regulations, and internal rules and policies of the Group and the procedures related thereto.

In addition, the Audit Committee reviews, in cooperation with the auditors, the CEO and the CFO, whether the accounting principles and the financial control mechanism of the Company and its subsidiaries are appropriate in view of the size and complexity of the Group.

Furthermore, the Audit Committee has the following powers and duties in relation to the preparation of the financial statements:

• (i) reviewing the annual and interim statutory and consolidated financial statements;
• (ii) discussing these financial statements with the CFO and, separately, with the Group external auditor for the annual financial statements; and
• (iii) making proposals to the Board of Directors with respect to the annual and interim statutory and consolidated financial statements (the responsibility for approving the annual and interim financial statements at the level of the Board of Directors remains with the Board of Directors).

Finally, the Audit Committee collects the necessary information and discusses the reporting on non-financial matters.

The Audit Committee usually holds five meetings annually. The Chairperson of the Board of Directors may take part in the meetings as a guest. Unless otherwise determined by the Audit Committee, the CFO takes part in all meetings, while the Head of Group Internal Audit is invited as a guest, whenever needed. In 2023, the lead audit partner attended three meetings of the Audit Committee. The Audit Committee's Chair reports to the other members of the Board of Directors about the topics discussed in detail and decisions made and/or to be submitted to the entire Board of Directors for approval. For an overview of the number of Audit Committee meetings, the average duration and the average attendance, please refer to the section Work Methods of the Board of Directors and its Board Committees.

Nomination and Compensation Committee

The Nomination and Compensation Committee consists of at least three members of the Board of Directors, of which the majority are non-executive and independent. Since the Ordinary General Meeting 2014, the members of the Nomination and Compensation Committee have been directly elected by the General Meeting for a one-year term. Re-election is possible. In case of vacancies, the Board of Directors shall appoint the substitutes. The Board of Directors designates one member of the Nomination and Compensation Committee as its Chair each year at the first meeting of the Board of Director's after the Ordinary General Meeting. Accordingly, its current members are Eunice Zehnder-Lai (Chair), Adrian T. Keller, and Gabriel Baertschi.

In relation to its nomination responsibility, the Nomination and Compensation Committee regularly reviews and makes proposals as to the composition of the Board of Directors and of the Executive Committee, including, but not limited to, making proposals as to vacancies in the Board of Directors and the Executive Committee and as to the appointment and dismissal of members of the Executive Committee.

As to compensation, the Nomination and Compensation Committee has the following duties and responsibilities:

• (i) preparing proposals for submission to the Board of Directors on the compensation policy, including the principles for performance-related compensation and the allocation of securities, conversion or option rights, entitlements or other financial instruments for the Board of Directors and the Executive Committee;
• (ii) preparing proposals for submission to the Board of Directors on the maximum aggregate compensation for the Board of Directors and the Executive Committee;
• (iii) preparing proposals for submission to the Board of Directors on the specific design of the participation plans;
• (iv) preparing proposals for submission to the Board of Directors on the specific design of the employment contracts of the members of the Executive Committee and conditions for termination;
• (v) preparing proposals for submission to the Board of Directors on the individual compensation of the members of the Executive Committee within the scope of the Articles of Association and subject to approval by the General Meeting, including, but not limited to, the allocation and definition of compensation-relevant performance objectives and further conditions as well as the verification of the fulfillment of conditions or agreed objectives;

(vi) preparing the draft of the annual Compensation Report for submission to the Board of Directors.

In line with the principles described in the Articles of Association, the Nomination and Compensation Committee may be entrusted by the Board of Directors with additional tasks.

To perform its duties, the Nomination and Compensation Committee may also retain the support of independent third parties and remunerate them.

On invitation of the Chair, the Nomination and Compensation Committee convenes as often as business requires, but typically two to six times a year. The Board of Directors is informed by the Chair of the Nomination and Compensation Committee about all items discussed, in particular, about all decisions made within powers and duties, as described above. For an overview of the number of Nomination and Compensation Committee meetings, the average duration, and the average attendance, please refer to the section Working Methods of the Board of Directors and its Board Committees below.

Mergers and Acquisitions Committee

The Mergers and Acquisitions Committee consists of two or more members of the Board of Directors. Its current members are Dr. Hans Christoph Tanner (Chair), Jack Clemons, Adrian T. Keller, and Gabriel Baertschi.

The Merger and Acquisitions Committee has the following duties and responsibilities:

• (i) preparing proposals for submission to the Board of Directors concerning merger and acquisitions transactions, including the review of such transactions proposed by the CEO;
• (ii) preparing proposals for submission to the Board of Directors concerning strategic investment and divestment transactions, including the review of such transactions proposed by the CEO; and
• (iii) to propose the assessment of potential acquisitions and mergers.

Working Methods of the Board of Directors and its Board Committees

According to the Organizational Regulations, the Board of Directors must meet regularly and as often as business requires.

Meetings of the Board of Directors are convened by the Chairperson of the Board of Directors or, if the Chairperson is unable to do so, by another member designated for such purposes by the Board of Directors. The notice of meetings should be given at least ten days in advance to allow the members of the Board of Directors the required preparation time. The Chairperson must also convene a meeting of the Board of Directors, generally within fourteen days, if requested to do so by any of its members in writing, by stating the reasons and the items to be placed on the agenda. In addition to the standing Board Committees, the Board of Directors may entrust some or several of its members, as individuals or as members of a Committee, with the duty to prepare and carry out its resolutions or to supervise certain matters. Such members must also keep the Board of Directors duly informed on such entrusted matters. The Board of Directors specifically appoints one member to supervise the Group's approach to Sustainability matters (currently Jack Clemons). The member oversees the work of the management-level Sustainability committee and provides regular updates on progress to the Board of Directors.

The Chairperson is, inter alia, in charge of organizing and preparing the meetings of the Board of Directors (including the preparation of the agenda), chairing the meetings, ensuring the flow of information within the Board of Directors and the Group, and coordinating with the CEO the communication with the public.

The Board of Directors consults external experts on specific topics where necessary, which was not the case in 2023. Meetings of the Board of Directors may also be held by telephone conference or in another suitable way. In principle, the Board of Directors may pass resolutions when the majority of its members are present (including participation by telephone conference or in another suitable way).

The following elections, transactions, and issues must be adopted by the Board of Directors by a majority of at least two-thirds of the votes cast:

• (i) determination of business policies, long-term planning, and strategy;
• (ii) approval of annual planning, financial policies, and the internal control system (ICS);
• (iii) submission of consolidated financial statements and dividend proposals to the General Meeting ;
• (iv) enactment and amendment of the Organizational Regulations; and
• (v) election and removal of the CEO.

All other decisions of the Board of Directors may be adopted by a majority of the votes cast. In case of a tie vote, the Chairperson of the relevant meeting has the casting vote. Resolutions on an item may be adopted in writing unless a member of the Board of Directors requests an oral deliberation.

Generally, the Board Committees may pass resolutions when the majority of its members are present. Resolutions of the Board Committees are adopted by a majority of the votes cast. In case of a tie, the Chair of the relevant Board Committee has the casting vote. Minutes are kept of the discussions and resolutions taken at each of the meetings of the Board of Directors and its Board Committees. The charts on the following two pages provide an overview of the attendance at the meetings of the Board of Directors and of the Board Committees of each member of the Board

Attendance per Board Meeting Through 2023

	February 8 13:30 –17:30	March 16 12:15–13:00	May 25 08:00–18:00	July 17 12:00–13:00	September 202 17:00 –19:15 (MYT)	September 212 08:00 –15:30 (MYT)	December 12 08:30 –18:00
Marco Gadola, Chairman	•	•	•	•1	•	•	•
Gabriel Baertschi (as of March 16, 2023)		•	•	•1	•	•	•
Dr. Wolfgang Baier	•	•1	•	•1	•	•	•
Jack Clemons	•	•	•	•1	•	•	•
Adrian T. Keller	•	•	•	•1	•	•	•
Andreas W. Keller	•	•	•	•1	•	•	•
Prof. Dr. Annette G. Köhler	•	•	•	•1	•	•	•
Dr. Hans Christoph Tanner	•		•	•1	•	•	•
Eunice Zehnder-Lai	•	•	•	•1	•	•	•

Via conference call.

Attendance Executive Committee Members

Stefan P. Butz	•	• •	•1	•	•	•
Natale Capri	-	- 10:25-11:40	-	-	09:10-10:00	14:40-15:001
Hanno Elbraechter	-	- 14:10-14:40	-	-	10:15-10:45	11:05-11:251
Stephen Ferraby	-	- 16:10-16:40	-	-	13:40-14:101	10:45-11.051
Martin Frech (until December 31, 2023)	16:10-17:00	- 10:05-17:30	-	-	-	-
Antoine Mangin	14:05-14:35	- 15:15-15:55	-	-	08:00-12:40	14:00-14:201
Sam Oh	-	- 16:40-17:15	-	-	08:00-12:40	12:15-12:451
Terry Seremetis (until June 30, 2023)	-	- 13:25-14:10	-	-	-	-
Chris Ritchie (as of August 17, 2023)	-	- -	-	-	08:00-12:40	10:45-16:15
Laurent Sigismondi	•	• •	•1	•	•	•
Bijay Singh	-	- 11:40-12:25	-	-	08:30-09:10	11:25-12:151
Thomas Sul	-	- 10:25-11:40	-	-	09:10-10:00	14:40-15:001
Ido Wallach	•	• •	•1	•	•	•

Via conference call.

Attendance per Audit Committee Meeting Through 2023

	February 8 09:15 –12:15	May 24 13:30 –16:30	July 17 11:00–12:00	September 192 09:00–12:00 (MYT)	December 11 16:00–18:00	December 19 11:30–12:00
Prof. Dr. Annette G. Köhler	•	•	•1	•	•	•1
Dr. Hans Christoph Tanner	•	•	•1	•	•	•1
Jack Clemons	•	•	•1	•	•	-
Marco Gadola (as guest)	09:15-11:30	13:30-15:30	-	•	•	•1
Simon Zogg (Lead auditor)	09:15-9:45 / 11:35-11:45	13:30-14:00	-	-	16:00-16:30	-

¹ Via conference call.

Attendance Executive Committee Members

Stefan P. Butz	•	•	•1	•	•	•1
Stephen Ferraby	-	-	-	-	-	•1
Sam Oh	-	-	11:45-12:001	11:10-11:50	-	-
Laurent Sigismondi	•	•	•1	•	•	•1
Ido Wallach	•	•	•1	•	•	•1

Via conference call.

² In Kuala Lumpur.

² In Kuala Lumpur.

Attendance per Nomination and Compensation Committee Meeting Through 2023

	February 8 12:15 –13:15	May 24 17:15 –18:00	September 191 16:15 –17:00 (MYT)	December 11 14:45 –15:45
Eunice Zehnder-Lai	•	•	•	•
Gabriel Baertschi (as of March 16, 2023)	-	•	•	•
Adrian T. Keller	•	•	•	•
Dr. Hans Christoph Tanner (until March 16, 2023)	•	-	-	-
Marco Gadola (as guest)	•	•	•	•

¹ In Kuala Lumpur.

Attendance Executive Committee Members

Stefan P. Butz	•	•	•	•
Antoine Mangin	•1	•	•	•1
Laurent Sigismondi	•	•	•	•

Via conference call.

Attendance per Merger & Acquisitions Committee Meeting Through 2023

	February 8 08:30 –09:15	May 24 16:30 –17:15	September 191 15:30 –16:15 (MYT)	December 11 14:00 –14:45
Dr. Hans Christoph Tanner	•	•	•	•
Gabriel Baertschi (as of March 16, 2023)	-	•	•	•
Jack Clemons	•	•	•	•
Adrian T. Keller	•	•	•	•
Marco Gadola (as guest)	•	•	•	•

In Kuala Lumpur.

Attendance Executive Committee Members

Stefan P. Butz	•	•	•	•
Stephen Ferraby	•1	•	•1	•1
Laurent Sigismondi	•	•	•	•
Ido Wallach	•	•	•	•

Via conference call.

of Directors and of the Executive Committee, and the meeting time in 2023.

Board of Directors and Executive Committee: Areas of Responsibilities

The Board of Directors exercises the ultimate management, supervision, and control over the conduct of the Company's and the Group's business. It represents the Company and resolves all matters that are not reserved or delegated to another body of the Company. In accordance with the Articles of Association and based on the Organizational Regulations of the Company, the Board of Directors has delegated the conduct of the Company's business to the Executive Committee under the leadership of the CEO.

The Board of Directors has the following non-assignable and inalienable duties:

• (i) the overall management of the Company and the Group, and the issuance of the required directives;
• (ii) the determination of the organization of the Company and the Group, including the adoption and revision of the Organizational Rules, the Code of Conduct, and of any material group policy including but not limited to compliance matters;
• (iii) the organization of the accounting, financial control, and financial planning systems;
• (iv) the appointment and removal of the persons entrusted with executive management and representation of the Company, and determination of signatory authorities;
• (v) the determination of the internal limitations as set forth in the limits of authority to the extent not delegated to the CEO;
• (vi) the overall supervision of the persons entrusted with managing the Company, specifically in view of their compliance with the law, the Articles of Association, the Organizational Rules, other applicable regulations, and directives given by the Board of Directors;
• (vii) the preparation of the Annual Report;
• (viii) the preparation of the Compensation Report and the resolution on the maximum aggregate compensation for annual approval by the General Meeting separately for the Board and the Executive Committee in accordance with § 19 and § 28 of the Articles of Association;
• (ix) if applicable, the preparation of the report on non-financial matters pursuant to Art. 964c CO and other reports as required by law;
• (x) the preparation of the General Meetings and the implementation of its resolutions;
• (xi) the filing of an application for a debt restructuring moratorium and the notification of the court in the event that the Company is overindebted;
• (xii) the resolutions on changes to the share capital, insofar as this is within the competence of the Board of Directors, the statement of changes to the capital, the preparation of the capital increase report and the implementation of amendments to the Articles of Association.

The Executive Committee, under the leadership of the CEO, is entrusted with all other powers and duties (except the powers attributed to the General Meeting by law and the Articles of Association), including the preparation and implementation of the resolutions of the Board of Directors and the management of the Company and the Group.

The CEO leads the Executive Committee and has, inter alia, the following powers and duties with the right to delegate the performance and implementation of such CEO duties further:

• (i) the establishment of a management organization, including an Executive Committee that enables each of the Company and the Group to effectively operate its business in accordance with the strategy approved by the Board of Directors;
• (ii) the management and supervision of the day-to-day business of the Company and the Group;
• (iii) the communication to the public;
• (iv) the issuance of internal rules and regulations for the management – including rules for the organization of the Executive Committee and the preparation, calling and presiding of the meetings of the Executive Committee – and the operations of the Group, to the extent that this is not the responsibility of the Board of Directors;
• (v) the provision of all information and documents necessary to the Board of Directors;
• (vi) the implementation of the resolutions passed by the Board of Directors or the Board Committees;
• (vii) the proposal to the Board of Directors of transactions to be approved by the Board;
• (viii) the appointment and dismissal of members of the Executive Committee (except the CFO) upon prior consultation with the NCC;
• (ix) the appointment and removal of the top managers other than members of the Executive Committee;
• (x) the implementation of Group policies including but not limited to compliance matters and of the limits of authority and determination/implementation of amendments thereto, to the extent that such amendments relate to functions directly or indirectly subordinated to the CEO.

Information and Control Instruments vis-à-vis the Executive Committee

The Board of Directors recognizes the importance of being fully informed on material matters that may have an impact on the Company and/or the Group. It supervises the Executive Committee and controls and monitors the Executive Committee's and the Group's performance through reporting and controlling processes, and the Board Committees.

The Board of Directors receives a monthly financial report generated by the Company's management information system. The report comprises consolidated financial information and includes an income statement, statement of financial position, and cash flow statement, including management performance comments by Business Units and communication of key issues. Members of the Executive Committee may attend meetings of the Board of Directors, if required, and the CFO attends meetings of the Audit Committee.

The Audit Committee defines and evaluates the most important risks of the Group in a process based on a detailed risk catalog. As a general principle, risks are assessed, monitored, and mitigated in a decentralized manner where risks originate, i.e. directly in the business or in the various functional streams, such as Finance, Supply Chain, IT, Human Resources (HR), Legal and Compliance. A centralized risk management function actively supports the Audit Committee by focusing on key strategic risks for the Group and its Business Units. These risks are periodically reviewed jointly with the Executive Committee or Business Unit management and reported to the Audit Committee. Additionally, risk management processes are installed in all major market organizations, with a perspective on the local platforms that enable and support the various businesses in a market. Based on the evaluation, a detailed catalog of measures for the most important risks is presented to the Audit Committee in its last meeting of the respective business year, which evaluates the risk matrix resolving a catalog of measures. The most important risks, along with possible measures to prevent and minimize potential damage, are presented to the Board of Directors for consideration and decision making.

Group Internal Audit, the external auditors, and the Governance, Risk, and Compliance function support the Board of Directors in exercising its supervisory and control functions. The Group Internal Audit function reports directly to the Chairperson of the Board of Directors and the Audit Committee and comprises auditors who travel on a pan-Asian and European basis, completing audit assignments allocated by the Audit Committee. Group Internal Audit presents update reports in each meeting of the Audit Committee. The

Organizational Chart of the Executive Committee as per 31.12.2023

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Stefan P. Butz, CEO

(1968, German)

Stefan P. Butz joined DKSH as a member of the Executive Committee in January 2017, before becoming CEO in March 2017. From 2013, Stefan P. Butz was the Chief Executive Industry & COO Europe/China with the Intertek Group Plc in London, UK. The company ranks among the leading global enterprises in the worldwide quality assurance industry. He joined Intertek in 2008 as Group Executive Vice President and was initially responsible for setting up its Industry and Assurance division, as well as for Strategy, Mergers & Acquisitions, and Marketing. Before that, he worked at TÜV Süd, one of the world's largest testing, certification, and inspection companies, as Head Corporate Development from 2000, and then from 2002 as CEO & President of the North American operations, headquartered in Boston. Stefan P. Butz began his career as a Management Consultant and worked at Accenture Strategy in Munich for many years. Stefan P. Butz holds a Master's degree in Business Administration (Dipl.-Kfm., Honors) from the University of Bayreuth, Germany. He has also completed executive programs at Harvard and Wharton, both in the USA.

Ido Wallach, CFO

(1975, Israeli/Italian)

Ido Wallach joined DKSH in November 2019 as Vice President Group Controlling, based in Singapore. Since July 1, 2021, he has been Chief Financial Officer (CFO) and Member of the Executive Committee. Ido has more than 25 years of extensive experience in finance and capital markets spanning Europe (including Switzerland), Asia, and North America. Before joining DKSH, he was CFO at Keter from 2016 until 2019 and prior to that, he has held finance leadership positions at L'Oréal (2007-2016), P&G (2002-2006), and EY (1999-2000). Ido Wallach holds an MBA from SDA Bocconi School of Management in Milan, Italy, and a Bachelor of Economics from University College London, UK.

Bijay Singh

(1964, Canadian)

Bijay Singh joined DKSH as Vice President, Global Business Development for Business Unit Healthcare in July 2015. He was designated Head Business Unit Healthcare and member of the Executive Committee in July 2017. Bijay Singh has over 30 years of experience in the healthcare industry. From 2004 to 2015, he held various senior positions at Novartis, a leading global Swiss healthcare company. Prior to 2004, he worked in various positions for Eli Lilly in Asia from 1997 to 2003 and in the United States from 1993 to 1996, as well as for two global audit companies between 1987 and 1991. He has lived and worked on four continents and amassed over 20 years of work experience in the healthcare field across Asia. Bijay Singh holds a Bachelor of Business Administration (Hons) from Simon Fraser University, Canada, and a Master's degree in Business Administration from Stanford University, USA.

Chris Ritchie

(1972, Canadian)

Chris Ritchie joined DKSH as Head Business Unit Consumer Goods and member of the Executive Committee in August 2023. Chris has over 28 years of experience in the consumer goods industry. Prior to joining DKSH, he was Chief Global Business Officer of Sazerac, a leading privately held American spirit company, where he oversaw the Operating Units in Europe, India, and Asia Pacific for the last four years. From 2016 to 2019, he was General Manager at Reckitt Benckiser, responsible for the growth market Philippines. Prior to that, from 2007 to 2016, he held various General Manager and Director positions at SABMiller in Asia, Europe, and Americas, including Managing Director of SABMiller Vietnam. From 1995 to 2006, he held regional and global marketing roles at P&G. Throughout his career, Chris has driven growth, routeto-market, and built strong teams, especially in developing markets. Chris holds a Bachelor's degree in Economics from Queen's University in Kingston, Canada.

Natale Capri

(1970, Italian)

Natale Capri has been Co-Head Business Unit Performance Materials and a member of the DKSH Executive Committee since November 2013. Natale Capri joined the Milan office of DKSH in 1998 as a Sales Manager for Italy, where from 2001 to 2005, he was responsible for European and American Imaging and Electronic Chemicals. From 2006, he also headed the European Business Line Specialty Chemicals and thereafter, in 2011, became Global Vice President Business Line Specialty Chemicals. Additionally, he held the role of Head DKSH India from 2007 to 2011. Still today, he acts as Managing Director of DKSH Italy. Prior to DKSH, he worked for the Italian chemical Group Lamberti from 1995 to 1998. Natale Capri holds a Master's degree in Organic Chemistry from the Milan University and an MBA from SDA Bocconi School of Management, both in Italy.

Thomas Sul

(1965, German/Dutch)

Thomas Sul has been Co-Head Business Unit Performance Materials and a member of the DKSH Executive Committee since November 2013. He joined DKSH in Germany in 1996 as a Sales Manager in Specialty Chemicals. To this day, he acts as Managing Director of DKSH GmbH, Germany. From 2003 to 2007, he was a Global Business Line Manager in Specialty Chemicals and thereafter, Vice President Europe. Before that, he worked for Beiersdorf AG as a Market and Product Manager from 1990 to 1996. Thomas Sul is a member of the Board of the OstAsienVerein (OAV), where he heads the Philippines Country Board. Thomas Sul holds a Master's degree in Business Administration (Dipl.-Kfm.) from the University of Kiel, Germany.

Hanno Elbraechter

(1980, German)

Hanno Elbraechter has been Head Business Unit Technology and a member of the Executive Committee since September 2014. Before joining DKSH, he spent more than ten years at Deckel Maho Gildemeister (DMG) from 2004 to 2014 and was appointed as CEO Asia of DMG in 2009. He has been a member of the Board of Directors at Datacolor AG since November 2018. Hanno Elbraechter graduated from the Ecole de Management (ESC) de Bordeaux, France, and University of Applied Sciences Muenster, Germany.

Stephen Ferraby

(1964, Australian)

Stephen Ferraby was appointed Head Corporate Affairs & Strategic Investments and member of the Executive Committee in July 2015. In this function, he manages DKSH's M&A activities. He has been Chairman of DKSH Malaysia, which is listed on the Malaysian stock exchange since May 2017. Stephen Ferraby joined DKSH in 2010 as CFO for DKSH Thailand and was later appointed Head Country Management Team for DKSH Thailand in 2013 and Regional Vice President Finance for eleven markets in 2011. Prior to joining DKSH, he held the position of CFO Asia Pacific at CEVA Logistics from 2008 to 2010 and before that, was CFO and CEO at a private equity-sponsored company from 2006 to 2008. Previously, he spent eleven years from 1995 to 2006 at Exel PLC, six years in the UK, and five years in Singapore and was appointed CFO Asia Pacific in 2001. From 1985 to 1995, he served in the fields of audit, advisory, and corporate finance at Ernst & Young in Australia and the United Kingdom. He is a member of the Board of Directors of aCommerce Group Public Company Limited, where he is part of the Executive Committee and the Nomination and Remuneration Committee. He is also a member of the Board of Directors of aCommerce Group Limited. Stephen Ferraby holds a Bachelor's degree in Commerce (First Class) from the University of Birmingham, UK.

Antoine Mangin

(1976, French)

Antoine Mangin has been Chief Human Resources Officer of DKSH since June 2020. As such, he ensures that DKSH's talents and capabilities remain fit for the future, in line with the strategic business direction. He is also responsible for the setup and effectiveness of local market and management teams, evolving DKSH's culture, and for modernizing the employee experience. Antoine Mangin brings more than 20 years of extensive Human Resources experience across Europe and Asia with organizations such as Mars Inc, L'Oréal, and Renault. He holds a Master's degree in Human Resources from the University of Paris and a Bachelor's degree in Political Science from the University of Strasbourg, both in France.

Sam Oh

(1966, Korean/American)

Sam Oh joined DKSH in February 2021 as Chief Information Officer. He has been appointed as a member of the Executive Committee in March 2022. Sam Oh has been pivotal in the further development of the Group-wide digital and IT strategy and accelerated the company's digital transformation. He also oversees DKSH's Corporate Shared Service Center (CSSC), which comprises the global IT hub and Business Process Operations with around 400 employees. Since August 2023, he has also been responsible for e-commerce. Sam Oh brings over 25 years of work experience gained at Tesco, Fujistu, and Dairy Farm International, across Asia and the USA. He has been a member of the Board of Directors of aCommerce Group Public Company Limited since August 2023. Sam Oh holds a Bachelor's degree in Mathematics and Computer Science from the University of California, San Diego, USA.

Dr. Laurent Sigismondi

(1976, Swiss/Italian)

Dr. Laurent Sigismondi has been General Counsel and Secretary of the Board of Directors of DKSH Holding Ltd. since March 2015. He has also been a member of the Executive Committee since July 2019. He heads DKSH's Legal, the Governance, Risk, and Compliance function (since July 2019) as well as the CEO Office and Group Strategy & Transformation (since August 2023). Before joining DKSH, Laurent Sigismondi was Head of Corporate Law at Novartis from 2011 to 2015 and Legal Counsel at Holcim from 2008 to 2011. Prior to that, he was an attorney-at-law with international Swiss law firms. Dr. Laurent Sigismondi taught Contract Law and Compliance at the Institute of International Business Law of the University of Fribourg. Furthermore, he is a member of the Legal and Competition Commissions of economiesuisse. Dr. Laurent Sigismondi was admitted to the Swiss bar in 2004 and holds a PhD in Law (summa cum laude) from the University of Neuchâtel, Switzerland, an Executive MBA from the University of St. Gallen, Switzerland, an LL.M. in International Law from Columbia University, USA as well as an LL.M. in European Law from the College of Europe in Bruges, Belgium.

compliance function reports to the General Counsel and comprises compliance professionals who develop compliance policies, monitor reports regarding compliance matters, and conduct investigations into compliance matters.

4. Executive Committee

The Executive Committee (Geschäftsleitung) is composed of the following members: The CEO, the CFO, the Business Unit Heads, and the Function Heads (Head Corporate Affairs & Strategic Investments, , Chief Human Resources Officer, Chief Information Officer, and General Counsel & Head CEO Office).

Other Activities and Functions

Any activities of members of the Executive Committee in governing and supervisory bodies of important Swiss and foreign organizations, institutions, and foundations as well as permanent management and consultancy functions for important Swiss and foreign interest groups, and official functions, and political posts, that are material are stated in each of the managers' biographies.

External Mandates

Pursuant to § 30 of the Articles of Association, the members of the Executive Committee may hold a maximum of five additional mandates in the supreme governing or administrative bodies of legal entities, which are required to be registered in the commercial register or in a comparable foreign register, and which are not controlled by the Company or which do not control the Company, whereby no member may hold more than two such mandates in other listed companies. Mandates in different legal entities, which are under common control, are deemed as one mandate. In the event that the maximum number of mandates is exceeded, the respective member of the Executive Committee must restore the lawful status within six months.

Management Contracts

The Company has not entered into any management contract with any third party.

5. Compensation

For details regarding the compensation and shareholdings of the members of the Board of Directors and of the Executive Committee, please refer to the Compensation Report.

6. Shareholders' Participation Rights

Voting Right Restrictions and Representation

The voting right may be exercised only if the shareholder (as owner, usufructuary or nominee) is recorded on a specific day (record date) as a voting shareholder in the share register of the Company. Any shareholder with voting rights may be represented by their legal representative, the independent proxy, or, if authorized in writing, by a third party who does not have to be a shareholder. The Company recognizes only one representative per share. The Board of Directors determines the requirements concerning powers of attorney and instructions in accordance with the legal provisions and can issue regulations to this effect. There are no preferential rights for individual shareholders and no voting restrictions. Treasury shares held by the Company do not entitle the holder to vote.

There are no voting right restrictions. Therefore, there are no procedures or conditions for canceling restrictions and no rules on making exceptions to them. Consequently, no such exceptions were made in 2023, provided, however, that for the discharge of the members of the Board of Directors and of the Executive Committee, shareholders who take part in the Company's management in any manner do not have voting rights.

There are no statutory group clauses other than in relation to the rules applicable to nominees. For limitations of transferability and nominee registrations, see section Limitations of Transferability and Nominee Registrations.

Independent Shareholder Representative

The General Meeting elects the Independent Shareholder Representative. Natural or legal persons or partnerships may be elected. The term of office of the Independent Shareholder Representative ends with the closure of the next Ordinary General Meeting. Re-election is possible.

If the Company does not have an Independent Shareholder Representative, or if the Independent Shareholder Representative is not able to perform his/her duties, the Board of Directors may appoint one for the next or current General Meeting. Unless a shareholder expressly issues an instruction to the contrary, the proxies and voting instructions retain their validity for the new Independent Shareholder Representative.

The Independent Shareholder Representative may be represented at the General Meeting by auxiliary people. They remain entirely responsible for performing their duties. The Independent Shareholder Representative is obliged to exercise the voting rights assigned to him/her by the shareholders in accordance with their instructions. If he/she does not receive any instructions, he/she abstains from voting.

The Board of Directors determines the procedure and the conditions for the assignment of proxies and instructions to Independent Shareholder Representatives in relation to a General Meeting.

The Board of Directors shall ensure that the shareholders have the opportunity to issue to the Independent Shareholder Representative:

• (i) voting instructions on any motion concerning agenda items included in the invitation;
• (ii) general voting instructions on agenda items that have not been pre-announced and new agenda items pursuant to Art. 704b CO;
• (iii) proxies and instructions also electronically.

Proxies and instructions may only be given to the Independent Shareholder Representative for the forthcoming General Meeting. The Board of Directors is authorized to waive the requirement for a qualified electronic signature either fully or partially. The general or implied instruction of a shareholder to the Independent Shareholder Representative to vote in favor of the motions of the Board of Directors is permitted. This also applies to motions, which have not been pre-announced in the invitation of the General Meeting.

Statutory Quorums

Unless stipulated otherwise by mandatory legal provisions, the General Meeting passes its resolutions and carries out its votes based on the majority of the votes represented.

The Chairperson determines whether votes are to be open, electronic or in writing, unless one or more shareholders who together hold at least 5% of the votes represented request a written or electronic vote.

Convocation of the General Meeting of Shareholders

General Meetings of shareholders are convened by the Board of Directors by way of a notice in the Swiss Official Gazette of Commerce and by way of letters to the shareholders listed in the share register at least 20 calendar days before the relevant meeting. The convocation of a General Meeting may also be requested by one or more shareholders who together represent at least 5% of the share capital or votes.

Inclusion of Items on the Agenda

Shareholders who represent shares of at least 0,5% of the share capital or votes may request that items be put on the agenda. This request must be submitted to the Board of Directors in writing, along with the respective motions, at least 45 calendar days before the relevant General Meeting.

Registrations in the Share Register

In the invitation to the General Meeting, the Board of Directors states the applicable record date by which shareholders must be registered in the share register to be eligible to participate in and vote at the meeting. In recent years, the Company has set the record date between eleven to sixteen working days before the General Meeting.

7. Change of Control and Defense Measures

Duty to Make an Offer

A purchaser of shares in the Company must submit a public takeover offer, pursuant to the Articles 135 and 163 FinMIA and § 6 of the Articles of Association, if it exceeds the threshold of 49% of the voting rights in the Company (opting-up).

Clauses on Changes of Control

There are no change of control clauses (which would be triggered in the event of a direct or indirect change of control in the Company) in favor of the members of the Board of Directors, the Executive Committee or any other senior manager or officer.

The contracts of employment with the members of the Executive Committee may have a fixed or indefinite term. The maximum duration for fixed-term contracts and the maximum notice period for contracts of an indefinite term shall be twelve months (§ 27 of the Articles of Association).

In case of an ordinary termination, all such members of the Executive Committee would be entitled to the fixed salary throughout the remainder of the applicable termination period. Furthermore, all such members of the Executive Committee may be entitled to annual variable pay, timely prorated, if applicable, in accordance with the principles, as explained in the Compensation Report.

Transparency on non-financial Matters

The Board of Directors has prepared a separate sustainability report that is subject to an advisory vote by the Ordinary General Meeting.

8. Statutory Auditors

Duration of Mandate and Term of Office of the Lead Auditor

The re-election of Ernst & Young AG, Zurich (EY), as the external statutory auditor of the Company as well as the Group auditor for the business year 2023, was confirmed at the Ordinary General Meeting in 2023, with the declaration of acceptance dated March 3, 2023. The appointment of the auditor is for one year and is renewed annually. EY have been the auditors of the Company for thirteen years, with Mr. Simon Zogg acting as its Lead Partner since year-end 2019.

Auditing Fees

The fees charged for auditing services for the year 2023 amounted to CHF 2.9 million.

Additional Fees

In addition to the auditing fees mentioned above, the statutory auditors charged an amount of CHF 0.3 million in 2023. This included tax services and other audit-related services in various markets.

Additional Fees EY–2023	CHF
Tax advisory services	204,800
Other audit-related services	71,300
HR-related services	2,900
Total	279,000

Informational Instruments Pertaining to an External Audit

The Audit Committee evaluates the performance, fees, and independence of the auditors each year according to the following criteria:

• (i) quality of the Management Letter;
• (ii) global coverage and coordination of the audit instructions;
• (iii) meeting the deadlines required to allow the annual results' media release to be published on the scheduled date; (iv) benchmark analysis of the audit fees; and
• (v) independence as defined by relevant rules of the Swiss Federal Act on the Licensing and Oversight of Auditors (AOA).

The Audit Committee discusses and reviews the scope of the audits and the feedback resulting therefrom. Based on this information, it determines changes and improvements as necessary. For further information on the responsibilities of the Audit Committee with respect to the external auditors, please refer to the section Internal Organization Structure.

Audit-related and material non-audit-related services (e.g. tax services and other consulting services) that are provided by the auditors must be approved in advance by the Audit Committee. In the business year, the auditors had various contacts with members of the Executive Committee and particularly the Chief Financial Officer, whom the auditors met several times during the business year. The purpose of such meetings was to report on selected topics, such as preparation of meetings with the Audit Committee and status updates on half-year review and full-year closing.

In the business year, the auditors attended three meetings with the Audit Committee and other informal meetings to provide status updates on audit matters and the collaboration with the Group Internal Audit function of the Company to report on the review of the half-year results and the audit of the year-end closing, to assess their own independence and, if required, obtain approvals from the Audit Committee regarding non-audit-related assignments.

9. Information Policy

The Group is committed to ensuring a consistent and transparent information policy that meets the needs of the media, analysts, investors, and other stakeholders. The Company's objective is to provide financial and business information about the Company's and the Group's historical record, current performance, and future prospects that fulfill the best practice standards in reporting. The Company's official publication medium is the Swiss Official Gazette of Commerce (Schweizerisches Handelsamtsblatt).

The Group publishes financial results on a semi-annual basis. The annual results are generally released in February and the half-year results in July.

The Group has established a website at www.dksh.com to ensure a rapid and equitable distribution of information. The Group's website has a section fully dedicated to Investor Relations: www.dksh.com/investors. Media releases, presentations, webcasts, and financial reports are available online under this section.

For the distribution of ad-hoc notices, DKSH maintains push and pull services, in accordance with applicable laws and regulations, accessible on the Company's website at www.dksh.com/global-en/home/media/news.

Representatives of the Group also regularly meet with the financial community at conferences, roadshows as well as one-on-one meetings. A calendar of upcoming events, such as the publication of the annual and half-year results, media conferences, and analyst calls as well as the General Meeting of shareholders is available online at www.dksh.com/financial-calendar.

Management transactions made in 2023 by qualifying members of the Executive Committee or other senior managers, which are required to be disclosed by the Group and published by the SIX Swiss Exchange, may be found at www. ser-ag.com/en/resources/notifications-market-participants/management-transactions.html#/.

The Group acknowledges and complies with the rules regarding information and reporting specified under the Directive on Regular Reporting Obligations for Issuers of Equity Securities, Bonds, Conversion Rights, Derivatives, and Collective Investment Schemes issued by SIX Swiss Exchange.

10. Quiet Periods (General Blackout Periods)

Pursuant to Article 3.5.2 of the Group's Policy on Insider Trading, no Insider1 shall trade in DKSH Securities2 (irrespective of whether or not the Insider has Insider Information3) during the period beginning ten calendar days before the beginning of any financial reporting period of the Group and ending on (and including) the business day following the public release of financial performance data for such financial reporting period.

Shareholders may direct investor relations inquiries to:

DKSH Holding Ltd. Wiesenstrasse 8, 8034 Zurich, Switzerland +41 44 386 72 72 investors@dksh.com

^{1 &}quot;Insider" means each member of the Company's Board of Directors and the Executive Committee, any other person having a leading position in the Company or any company controlling or controlled by it and any person with intended access to Insider Information such as persons with a special relationship with the Company, e.g. its auditors, consultants or attorneys, or any employee or agent of DKSH designated, from time to time, by the Chairperson of the Company's Board of Directors (the "Chairperson"), the Chief Executive Officer ("CEO"), the Head Corporate Affairs & Strategic Investments or the General Counsel of the Company and each member of the Board of Directors and the executive management of those major shareholders which are represented on the Board of Directors of DKSH.

^{2 &}quot;DKSH Securities" means (i) shares in the Company or any of its listed subsidiaries, (ii) financial instruments which relate to shares in the Company or any of its listed subsidiaries as underlying (e.g. conversion, purchase or sale rights including OTC instruments).

^{3 &}quot;Insider information" means confidential, price-relevant information relating to the Company or any of its group companies.

Compensation Report

DKSH creates a leading organization by consistently attracting, developing, and rewarding the best possible professionals and specialists within its dynamic and complex business environment.

The Compensation Report provides an overview of DKSH's remuneration principles and programs as well as information about the method of determination of compensation. Further, this report includes details around the compensation of the members of the Board of Directors and of the Executive Committee related to the business year 2023.

This report is written in accordance with the provisions of the Swiss Code of Obligations (CO), the Directive on Information relating to Corporate Governance (DCG) issued by the SIX Swiss Exchange as well as the principles of the Swiss Code of Best Practice for Corporate Governance of economiesuisse.

1. Compensation Governance

Authority for decisions related to compensation are governed by the Articles of Association and the Organizational Regulations of DKSH Holding Ltd.

As determined in the Articles of Association and in the Organizational Regulations of DKSH Holding Ltd., the Nomination and Compensation Committee supports the Board of Directors in the fulfillment of its duties and responsibilities in relation to compensation, including:

• (i) preparing proposals for submission to the Board of Directors on the compensation policy, including the principles for performance-related compensation and the allocation of securities, conversion or option rights, entitlements, or other financial instruments for the Board of Directors and the Executive Committee;
• (ii) preparing proposals for submission to the Board of Directors on the maximum aggregate compensation for the Board of Directors and the Executive Committee pursuant to § 19 and § 28 of the Articles of Association;
• (iii) preparing proposals for submission to the Board of Directors on the specific design of the participation plans pursuant to § 28 of the Articles of Association;

(iv) preparing proposals for submission to the Board of Directors on the specific design of the employment contracts of the members of the Executive Committee and the conditions for termination;

(v) preparing proposals for submission to the Board of Directors on the individual compensation of the members of the Executive Committee within the scope of the Articles of Association and subject to approval by the General Meeting, including, but not limited to, the allocation and definition of compensation-relevant performance objectives and further conditions as well as the verification of the fulfilment of conditions or agreed objectives;

(vi) preparing the draft of the annual Compensation Report for submission to the Board of Directors. According to the current Articles of Association the Compensation Report shall be submitted to the General Meeting for a consultative vote.

Tasks	CEO	NCC	Board	AGM
Individual election of the members of the NCC and of the Board of Directors			proposes	approves
Compensation policy and principles, in line with the provisions of the Articles of Association		proposes	approves
Maximum aggregate amount of compensation for the Board of Directors and for the Executive Committee		proposes	proposes	approves
Individual compensation of members of the Board of Directors		proposes	approves
Individual compensation of the CEO		proposes	approves
Individual compensation of the other members of the Executive Committee	proposes	reviews	approves
Compensation report		proposes	approves	consultative vote1

¹ as of the Annual General Meeting 2024

In the business year 2023, the Nomination and Compensation Committee held four meetings. The main focus of the first and the last meeting of the year was on the compensation and the compensation structure of the members of the Executive Committee and the aggregate amounts of compensation of the members of the Executive Committee and the Board of Directors. The focus of the other two meetings was on HR strategy and succession planning.

Rules in the Articles of Association on Compensation

As required by law, the Articles of Association of DKSH Holding Ltd. have been revised in 2023 and approved by the shareholders at the Ordinary General Meeting 2023. The Articles of Association include the following provisions on compensation:

(i) Performance-related compensation: The short-term performance-related compensation plans are based on performance criteria, which include the performance of the DKSH Group and/or its sub-divisions and/or individual objectives. Achievement of objectives is generally measured in the oneyear period to which the short-term plan applies. The Board of Directors, assisted by the Nomination and Compensation Committee, determines the performance criteria, the objectives, and the degree of objective achievement. The longterm, performance-related compensation plans are based on performance criteria, which relate to DKSH Group's strategic objectives (e.g. financial objectives, shareholder return, and/or other benchmarks). The achievement of objectives is generally measured in three-year periods. The amount of the long-term compensation pay-out is limited. The longterm performance-related compensation may be paid in cash, in the form of share-based compensation (such as restricted or unrestricted shares, entitlements, or subscription rights on shares) or comparable instruments, other benefits, or in specie. The Board of Directors, assisted by the Nomination and Compensation Committee, determines the conditions for the design, the definitive entitlement (vesting), the blocking period, the vesting and the forfeiture of the compensation granted. These conditions may provide for the extension, accelerated vesting, or other requirements concerning the allocation, acquisition, or forfeiture of rights as a result of certain pre-defined events such as the termination of the employment or of the mandate. The Board of Directors determines the evaluation criteria for the individual compensation on the basis of the principles applying to the preparation of the Compensation Report.

(ii) Duration of employment contracts, loans, credit facilities, and post-employment benefits: The Company (or companies controlled by it) may enter into contracts with members of the Board of Directors as to their compensation for a fixed term of one year. Similarly, the contracts of employment with the members of the Executive Committee may have a fixed or indefinite term, while the maximum duration for such fixedterm contracts and the maximum notice period for contracts of an indefinite term shall be twelve months. The Company (or its subsidiaries) may, to the extent permissible by law, compensate members of the Board of Directors and of the Executive Committee for any disadvantages resulting from legal proceedings or settlements relating to their activities on behalf of the Company or subsidiaries, advance corresponding payments, and take out relevant insurance policies. Such payments are not deemed to be compensation, loans, or credits. In addition, the Company (and its subsidiaries) may offer members of the Executive Committee retirement benefits (such as pensions, the purchase of health insurance policies, and so forth) outside of the occupational pension scheme and pay these out after their departure. Such retirement benefits outside of the occupational pension scheme may not exceed CHF 850,000 a year. The employment contracts of members of the Executive Committee may provide for post-contractual non-competition undertakings up to a maximum of twelve months, whereby neither the compensation for non-competition may not exceed the timely prorated fixed annual compensation prior to termination nor the average of the compensation of the last three financial years.

(iii) Vote on pay: Concerning the approval of compensation amounts by the Ordinary General Meeting, the total amount of compensation for the Board of Directors shall be approved annually by the Ordinary General Meeting in a binding vote for their following term of office, while the maximum amount of compensation of the Executive Committee shall be approved in the same manner for the following financial year. If the Ordinary General Meeting rejects the proposal of the Board of Directors for the maximum aggregate compensation of the Board of Directors and/or of the Executive Committee, the Board of Directors shall decide on how to proceed. In particular, the Board of Directors may convene an Extraordinary General Meeting for the purpose of submitting a new compensation proposal or determine compensation for the current financial year on an interim basis subject to subsequent approval by the next Ordinary General Meeting. The Board of Directors may also split motions for approval by submitting motions concerning individual compensation elements, shorter time periods or a smaller circle of persons. The Board of Directors may continue to pay out compensation to the individual members of the Board of Directors or members of the Executive Committee subject to claw-back rights, as may be required by mandatory law. There shall be an additional amount of 30% of the maximum aggregate compensation already approved for the Executive Committee for the relevant compensation period, available for all members of the Executive Committee being appointed after the Ordinary General Meeting, which already resolved the maximum aggregate compensation for the Executive Committee. This additional amount applies separately for each compensation period for which approval has been granted by the Ordinary General Meeting. The Ordinary General Meeting is not required to approve the actual additional amount used. The additional amount may also be used as compensation for disadvantages relating to the change of position (in cash or in the form of share-based compensation).

2. Compensation Philosophy and Principles

To ensure DKSH's success in a highly competitive global business environment with a focus on Asia and beyond, it is vital to attract, develop, and retain internationally-oriented, successful, and engaged employees. The compensation principles are designed to:

The ultimate goal of effective compensation is to strengthen the Group's leading industry position for the benefit of the Company's business partners, clients, and customers, while delivering the expected returns to shareholders of the Company.

The Group's compensation philosophy is to optimize DKSH's ability to attract the best-fit people, motivate a high-performance culture, and retain people whose skills and capabilities enable DKSH to meet the business objectives and future ambitions, by providing overall compensation in line with relevant competitors, however with greater weight given to variable compensation; hence rewarding excellent results with above-market total compensation packages and placing more compensation at risk. This is in line with the compensation principle of linking compensation to performance and rewarding those who contribute most to the operating performance and earning power of the Group.

DKSH regularly reviews the remuneration of its executives, including that of the members of the Executive Committee. This includes regular participation, every two to three years, in benchmark studies on comparable functions in other industrial companies. In 2023, a detailed analysis of the remuneration of the members of the Executive Committee was carried out and benchmarked against published market data to determine the target remuneration levels of the members of the Executive Committee for the financial year 2023. While many different factors (such as the individual role, experience in the role and contribution, company performance and affordability) are considered to determine remuneration levels, the policy of DKSH is to provide a target remuneration that is in principle positioned around the market median.

Regarding the remuneration of the Board of Directors, the system and amount are reviewed periodically by the Nomination and Compensation Committee. The remuneration analysis was conducted based on a peer group of industrial companies with comparable market capitalization, sales, and employee numbers.

3. Compensation Components for Members of the Board of Directors

To ensure the independence of the Board of Directors in its supervisory function, the members of the Board of Directors, including the Chairperson, are entitled to a fixed base fee for their services, paid in cash (as well as allowances and social security contributions). Each Chair and each member of the Audit Committee, the Nomination and Compensation Committee, and the Mergers and Acquisitions Committee is entitled to an additional committee fee.

in CHF/year, in cash	Chairman	Member
Full Board	750,000	150,000
Audit Committee	75,000	50,000
Nomination and Compensation Committee	50,000	30,000
Mergers and Acquisitions Committee	25,000	25,000

In addition, the members of the Board of Directors are reimbursed (incl. through an allowance) for all reasonable cash expenses that are incurred by them in the discharge of their duties, including expenses for traveling to and from Board meetings, committee meetings and General Meetings of the shareholders of the Company. Payments are made in Swiss Francs.

4. Compensation Components for Members of the Executive Committee

The actual compensation effectively paid out in a given year to members of the Executive Committee depends on individual as well as the Company's performance. Individual performance is assessed through an annual performance management process: Company and individual performance objectives are approved at the beginning of the business year and achievements against those objectives are assessed after year-end. The performance appraisal is the basis for determination of the actual compensation.

The compensation for members of the Executive Committee consists of a fixed element (annual fixed salary), a variable element (annual variable pay and a long-term incentive), and employee benefits. Depending on their role, members of the Executive Committee are currently eligible for the following compensation elements:

• (i) annual fixed salary;
• (ii) annual variable pay (AVP);
• (iii) long-term incentive (LTIP); and
• (iv) other employee benefits.

Annual Fixed Salary

The annual fixed salary for each member of the Executive Committee is determined once a year by the Board of Directors upon prior recommendation of the Nomination and Compensation Committee and after prior consultation with the CEO. For this purpose, the market level for the respective position, individual qualifications and experience, and the prevailing local labor market conditions (e.g. for a member of the Executive Committee based in Zurich, Swiss labor market conditions, for those based in Asia, pan-Asian and local labor conditions) are taken into account, together with the overall performance assessment of each member of the Executive Committee.

Annual Variable Pay (AVP)

For members of the Executive Committee, the annual variable pay is directly linked to the achievement of financial, non-financial/functional, and Environmental, Social and Governance (ESG) Key Performance Indicators (KPIs). Financial KPIs are set, inter alia, on Business Unit level for Earnings before Interest and Taxes (EBIT) and Net Operating Capital (NOC), and on Group level for Return on Net Operating Capital (RONOC, twelve months average) and EBIT. The AVP is derived from these KPIs following a predefined formula that is regularly reviewed by the Nomination and Compensation Committee and determined and approved by the Board of Directors. The KPIs weightings that define the variable compensation for members of the Executive Committee are individually set for each member. For performance achievements below 70% against target, no payout is made. For achievements above 100% of target, the AVP performance factor is based on a 1:2.5 pay-out curve, whereby a 1% deviation in realization versus target leads to a 2.5% change in pay-out. The pay-out for the AVP is capped at a maximum of CHF 5.0 million for the CEO, at a maximum of CHF 1.5 million for the CFO and at 200% of target for all other members of the Executive Committee.

For the CEO and the CFO, the Financial KPI includes Profit After Tax (PAT) and RONOC achievements on Group level. For Business Unit Heads, the Financial KPI includes EBIT and NOC days achievements on Business Unit level (40% to 60%, and 15% to 25%, respectively), and EBIT achievements on Group level (20%). For other Function Heads, the Financial KPI includes 60% to 80% EBIT achievements on Group level as well as EBIT and digital sales achievements on Business Unit level. All Executive Committee members' AVP includes ESG KPI achievements of 5%. Non-financial/functional KPI achievements are 5% for the CEO and CFO, up to 15% for Business Unit Heads, and up to 35% for other Function Heads.

In 2023, the weighted average weighting of all Executive Committee members' Financial KPIs was 84.5%. For Individual/functional KPIs, the weighted average weighting was 10.5%, and for ESG KPIs, it was 4.9%. In the financial year 2023, the AVP for individual members of the Executive Committee ranged from 9.7% to 40.4% of their total compensation. On average, AVP in 2023 for all members of the Executive Committee was 23.7% of the total compensation. This entrepreneurial approach ensures the alignment of the interests of the CEO and the members of the Executive Committee to create sustainable value for the Company, its shareholders, and its business partners.

Long-Term Incentive Plan (LTIP)

The Long-Term Incentive Plan was introduced in 2015. Its purpose is to ensure long-term value creation for the Company by providing eligible key managers1 of the DKSH Group with the possibility to become shareholders of the Company, to participate in the long-term success and prosperity of the DKSH Group, and to further align long-term interests of the key managers and the DKSH Group.

Every financial year, a number of performance share units (PSUs) shall be granted to eligible key managers by, and at the full discretion of the Board of Directors; the number of PSUs is individually defined for each key manager. In principle, each PSU is an entitlement to a maximum of 1.5 shares of the Company, provided certain performance targets are achieved during the three-year performance cycle. In case the performance does not reach certain pre-determined thresholds after three years, no shares of the Company will vest under the LTIP. In the performance cycle 2023 to 2025, 112 eligible key managers participate in the LTIP.

Average KPI Weighting for AVP (in %)

¹ Key managers are typically responsible for the company's results with potential EBIT contribution or hold/manage responsibilities that are linked to the strategic interest of DKSH.

The Company's long-term performance plan for the performance cycle 2023 to 2025 is gauged by a 60% weighting linked to the EBIT of DKSH Group, as reported in the Company's last Annual Report prior to the end of the threeyear performance cycle, a 20% weighting linked to the share price measured as the average of the 20 days' closing share price prior to the end of the three-year performance cycle, and a 20% weighting linked to the RONOC (monthly average) of the DKSH Group in the financial year prior to the end of the three-year performance cycle (jointly the Vesting Multiple). At the end of a three-year performance cycle, the number of PSUs vesting shall be calculated by multiplying the number of granted PSUs per key manager with the Vesting Multiple.

Weighted Percentage of LTIP Criteria

(2023–2025 Performance Cycle)

Furthermore, shares may be allocated only following the end of a three-year performance cycle subject to pre-determined performance conditions. If a key manager terminates her/his employment contract during a performance cycle or if the employment contract is terminated by the employer for cause, the PSUs shall lapse without any compensation.

If the employment contract of a key manager is terminated due to a key manager's disability, death, early retirement, retirement, or otherwise by DKSH without cause, or if a fixed-term contract expires, the unvested PSUs of the key manager shall be adjusted pro rata based on the number of days elapsed between the first date of the performance cycle and the "date of termination" compared with the full performance cycle, rounded up to the nearest full number of PSUs. The cancelled PSUs shall be deemed forfeited, without any right for compensation, on the date of termination.

In case of death, disability, or retirement, the PSUs that remain outstanding after the pro-rating shall vest on the date of termination, and the Vesting Multiple shall be 1.00. In all other situations, the PSUs that remain outstanding after the pro-rating shall continue to vest pursuant to the original vesting schedule and subject to achievement of the performance targets. The LTIP is paid out in the form of DKSH shares, unless the participant elects upon grant to have only 70% of her/his LTIP payout paid out in DKSH shares and 30% in cash with the view of offering flexibility for tax purposes.

Other Employee Benefits

Other employee benefits are market-specific and structured in accordance with local practice and local legal requirements. The Group regularly reviews its benefit coverage locally and assesses its programs in this area with the support of selected vendors.

Three members of the Executive Committee are covered by the pension scheme applicable to all employees with a Swiss employment contract. In addition, they are covered in a top-up pension scheme. Six members of the Executive Committee are covered under an expatriate offshore pension plan and four members of the Executive Committee are covered by local pension plans in their markets.

5. Compensation Board of Directors and Executive Committee

For the year 2023, the members of the Board of Directors received the following compensation:

in CHF thousands	Function	Director fees (Cash)	Compensation for Commit tees (Cash)	Allowances/ Social Security Contribution2	Total3
Marco Gadola	Chairman	7101	0	51	761
Gabriel Baertschi (as of March 16, 2023)	Member	113	41	4	158
Dr. Wolfgang Baier	Member	150	0	11	161
Jack Clemons	Member	1231	75	38	236
Adrian T. Keller	Member	150	55	5	210
Andreas W. Keller	Member	150	0	5	155
Prof. Dr. Annette G. Köhler	Member	150	75	5	230
Dr. Hans Christoph Tanner	Member	150	83	5	238
Eunice Zehnder-Lai	Member	1271	50	34	211
Total		1,823	379	158	2,360

The amount for director fees reflects the total director fees minus pension fund contributions (BVG) paid by the employer.

For the year 2022, the members of the Board of Directors received the following compensation:

in CHF thousands	Function	Director fees (Cash)	Compensation for Commit tees (Cash)	Allowances/ Social Security Contribution1	Total2
Marco Gadola	Chairman	7101	0	51	761
Dr. Wolfgang Baier	Member	150	0	11	161
Jack Clemons	Member	1231	75	38	236
Dr. Frank Ch. Gulich (up to March 17, 2022)	Member	38	8	4	50
Adrian T. Keller	Member	150	55	5	210
Andreas W. Keller	Member	150	0	5	155
Prof. Dr. Annette G. Köhler	Member	150	75	5	230
Dr. Hans Christoph Tanner	Member	150	98	5	253
Eunice Zehnder-Lai	Member	1271	50	34	211
Total		1,748	361	158	2,267

Pension scheme contributions are deducted from the director fees and are included under the column "Allowances/Social Security Contribution".

In compliance with law, mandatory employer social security contributions of CHF 25,200, which provide a right to the maximum future insured government benefit, are included. The total mandatory amount paid by the Company or its affiliates to Swiss governmental social security systems is CHF 132,300.

All amounts are gross amounts (i.e. before deduction of social security and income tax due by the members).

In compliance with the Ordinance, mandatory employer social security contributions of CHF 27,400, which provide a right to the maximum future insured government benefit, are included. The total mandatory amount paid by the Company or its affiliates to Swiss governmental social security systems is CHF 130,200.

For the year 2023, the members of the Executive Committee received the following compensation:

in CHF thousands	Stefan P. Butz CEO1	Other 12 members of the Executive Committee	Total2
Fixed Compensation	1,000	3,676	4,676
Annual Variable Pay (AVP) – Cash3	1,112	2,331	3,443
Value of performance share units at grant (LTIP)	1,250	2,835	4,085
Allowances	120	1,215	1,335
Pension/Social security contribution4	337	637	974
Total	3,819	10,694	14,513

• Highest individual total compensation in 2023.
• All amounts are gross amounts (i.e., before deduction of social security and income tax due by the executives). They include the remuneration paid to Terry Seremetis (01.01.–30.06.2023), Chris Ritchie (17.08.–31.12.2023) and Martin Frech (01.01.–31.12.2023).
• 3 On February 15, 2024, the Board of Directors approved a change in the performance measurement of the 2023 AVP by not considering the costs of the discontinuation of the non-profitable and non-core fashion retail business in 2023. These adjustments resulted in an additional AVP payment to members of the Executive Committee in the total amount of CHF 96,872, which is included in this table.
• 4 In compliance with law, mandatory employer social security contributions of CHF 18,900, which provide a right to the maximum future insured government benefit, are included. The total mandatory amount paid by the Company or its affiliates to Swiss governmental social security systems is CHF 390,900.

For the year 2022, the members of the Executive Committee received the following compensation:

		Other 12 members of the
in CHF thousands	Stefan P. Butz CEO1	Executive Committee	Total2
Fixed Compensation	1,000	3,939	4,939
Annual Variable Pay (AVP) – Cash3	1,206	3,002	4,208
Value of performance share units at grant (LTIP)	1,250	3,045	4,295
Allowances	114	1,460	1,574
Pension/Social security contribution4	316	550	866
Total	3,886	11,996	15,882

• Highest individual total compensation in 2022.
• All amounts are gross amounts (i.e., before deduction of social security and income tax due by the executives). They include the remuneration paid to Sam Oh (04.03.–31.12.2022) and Dan Culverhouse (01.01.–31.08.2022).
• The Board of Directors decided to adjust the 2021 Profit after tax (PAT) result for certain one-off items when setting the 2022 PAT objectives of the CEO and of the CFO. The 2022 target amount of such PAT objectives was thus set at CHF 194.1 million, which excludes the impact of the gain on sale to aCommerce (CHF 10.3 million), a CHF 34.8 million revaluation gain in aCommerce, and a non-recurring share of loss in associate (CHF –9.1 million).
• 4 In compliance with the Ordinance, mandatory employer social security contributions of CHF 18,500, which provide a right to the maximum future insured government benefit, are included. The total mandatory amount paid by the Company or its affiliates to Swiss governmental social security systems is CHF 430,500.

Compensation to Former Members of the Board of Directors and the Executive Committee

During 2023, no compensation has been paid to either former members of the Board of Directors or former members of the Executive Committee.

6. Shareholdings of the Board of Directors and the Executive Committee

Participations

The following tables provide information on the ownership of registered shares in the Company by the members of the Board of Directors and by the members of the Executive Committee as of December 31, 2023, and as of December 31, 2022, respectively.

Share Ownership Requirements for Members of the Executive Committee

Each member of the Executive Committee is required to own at least a minimum multiple of his annual fixed salary in DKSH shares or (vested/unvested) DKSH PSUs within three years of hire, promotion, or introduction of this requirement, as follows: CEO 300% of annual fixed salary, CFO 200% of annual fixed salary, all other members of the Executive Committee 100% of the annual fixed salary. In the event of a substantial rise or drop in the share price, the Board of Directors may, at its discretion, amend that time period accordingly. The determination also includes DKSH shares that are owned directly or indirectly by persons closely linked to a member of the Executive Committee. The Nomination and Compensation Committee reviews compliance with the share ownership guideline on an annual basis. During 2023 all members of the Executive Committee fulfilled the share ownership requirements.

Shareholdings by members of the Board of Directors:

Number of shares held	2023	2022
Marco Gadola	11,300	9,500
Gabriel Baertschi (as of March 16, 2023)	-	n/a
Dr. Wolfgang Baier	-	-
Jack Clemons	1,000	1,000
Adrian T. Keller	58,026	58,026
Andreas W. Keller	18,366	18,366
Prof. Dr. Annette G. Köhler	150	150
Dr. Hans Christoph Tanner	1,166	1,166
Eunice Zehnder-Lai	1,600	1,600
Total	91,608	89,808

Shareholdings by members of the Executive Committee:

		Unvested
Number of shares held	Shares	PSUs1	2023	2022
Stefan P. Butz	98,108	51,665	149,773	132,517
Natale Capri	14,126	14,566	28,692	27,139
Hanno Elbraechter	4,093	4,490	8,583	9,241
Stephen Ferraby	14,537	11,971	26,508	24,849
Martin Frech2	6,091	5,415	11,506	11,416
Antoine Mangin	5,014	11,428	16,442	12,280
Sam Oh	-	9,972	9,972	6,064
Chris Ritchie (as of August 17, 2023)	-	1,734	1,734	n/a
Terry Seremetis3	n/a	n/a	n/a	10,556
Laurent Sigismondi	3,200	7,021	10,221	7,127
Bijay Singh	19,317	17,244	36,561	30,324
Thomas Sul	16,488	12,499	28,987	24,474
Ido Wallach	1,715	10,958	12,673	8,152
Total	182,689	158,963	341,652	304,139

• Granted unvested PSUs see description of LTIP.
• The employment contract of Martin Frech has been terminated as of December 31, 2023.
• The employment contract of Terry Seremetis has been terminated as of June 30, 2023.

Stock Ownership Requirements

(multiple of annual fixed salary, in %)

7. Additional Fees, Compensation, and Loans

Apart from the benefits listed in this Compensation Report, no other compensation was provided in the year under review – either directly or via consultancy companies – to the executive and non-executive members of the Board of Directors or to the members of the Executive Committee. In addition, as of December 31, 2023, no loans, advances, or credits had been granted by the Group or by any of its subsidiaries to the members of the Board of Directors, or members of the Executive Committee, and their related parties respectively.

8. External Mandates of the Members of the Board of Directors and of the Executive Committee

According to Article 734e CO, all the functions of the members of the Board of Directors and the Executive Committee in other companies need to be specified and disclosed in accordance with Article 626 para.2 cipher 1. According to § 24 of the Articles of Association, the members of the Board of Directors may hold a maximum of 12 additional mandates in the supreme governing or administrative bodies of legal entities which are required to be registered in the commercial

register or in a comparable foreign register and which are not controlled by the Company or which do not control the Company whereby, no member may hold more than six such mandates in other listed companies. Mandates in separate legal entities under common control are deemed as one mandate. In the event that the maximum number of mandates is exceeded, the respective member of the Board of Directors must restore the lawful status within six months.

Members of the Board with external mandates

	Listed Companies	Non-listed Companies, Organizations, Institutions, or Foundations
Marco Gadola	• Chairman of the Board of Directors, Medartis Holding AG • Member of the Board of Directors, Straumann Holding AG • Vice Chairman of the Board of Directors, MCH Group AG • Member of the Board of Directors, Bühler Holding AG	• Chairman of the Board of Directors, WS Audiology Denmark A/S • Member of the Board of Directors, AVAG Anlage und Verwaltungs AG • Member, Standortförderungskommission Baselland
Gabriel Baertschi		• Member of the Board of Directors, MedXCell SA • CEO and Chairman of the Corporate Executive Board, Grünenthal GmbH • Member of the Board of Directors, RealizedCare
Dr. Wolfgang Baier		• Member of the Board of Directors and CEO, Luxasia Group Pte. Ltd. • Member of the Board of Directors, L Beauty Pte. Ltd. • Member of the Board of Directors, Indosing Distribution Private Limited • Member of the Board of Directors, Asia Retail Concepts Pte. Ltd. • Member of the Board of Directors, LEAP DigiCommerce Pte. Ltd. • Chairman of the Board of Directors, Tapouts Inc
Jack Clemons	• Member of the Board of Directors and Member of the Audit Committee, Banque Cantonale Vaudoise	• International Trustee and Chairman of the Audit and Risk Committee, World Wide Fund for Nature (WWF) • Advisor to the Board of Directors, Unit8 SA • Fellow, Institute of Chartered Accountants in England & Wales (ICAEW)
Adrian T. Keller		• Vice-Chairman of the Board of Directors, Diethelm Keller Holding Ltd. • Vice-Chairman of the Board of Directors, Diethelm Keller Group Ltd. • Vice-Chairman of the Board of Directors, Bergos AG • Member of the Board of Directors, Tonhalle Gesellschaft • Chairman of the Board of Directors, Baur & Cie • Member of the Executive Committee, Swiss American Foundation • Chairman of the Foundation Board, Asia Society Switzerland Foundation • Trustee and Co-Chair of the Global Centers Committee, Asia Society Global • Member of the Global Leadership Council, Right To Play • Member of the Advisory Board, University of St. Gallen
Andreas W. Keller		• Chairman of the Board of Directors and the Executive Committee, Diethelm Keller Holding Ltd. • Chairman of the Board of Directors, Diethelm Keller Group Ltd.
Prof. Dr. Annette G. Köhler	• Member of the Supervisory Board and Chair of the Finance and Audit Committee, DMG Mori AG • Member of the Supervisory Board, Chair of the Audit and Cybersecurity Committee and Member of the Nomina tion Committee, GEA Group AG • Member of the Supervisory Board and Chair of the Audit Committee, Gerresheimer AG	• Member of the Advisory Committee, German Auditor Oversight Body
Dr. Hans Christoph Tanner	• Member of the Board of Directors, Paion AG	• Member of the Advisory Board, Joimax GmbH • Member of the Board of Directors, Qvantec AG • Entrepreneur in Residence, Wyss Zurich
Eunice Zehnder-Lai	• Vice-Chairperson, Geberit AG • Member of the Board of Directors, Julius Bär Group Ltd.	• Member of the Board of Trustees, Asia Society Switzerland • President of the Board of Trustees, Friends of Asia Society Switzerland Arts & Culture Foundation • Global Trustee, Asia Society • Member of the Board of Trustees, Insights for Education • Member of the Board of Trustees, Orpheum Foundation for the Advancement of Young Soloists

Pursuant to § 30 of the Articles of Association, the members of the Executive Committee may hold a maximum of five additional mandates in the supreme governing or administrative bodies of legal entities, which are required to be registered in the commercial register or in a comparable foreign register, and which are not controlled by the Company or which do not control the Company, whereby no member may hold more than two such mandates in other listed companies. Mandates in different legal entities, which are under common control, are deemed as one mandate. In the event that the maximum number of mandates is exceeded, the respective member of the Executive Committee must restore the lawful status within six months.

Members of the Executive Committee with external mandates

	Listed companies	Non-listed Companies, Organizations, Institutions, or Foundations
Hanno Elbraechter	• Member of the Board of Directors, Datacolor AG
Stephen Ferraby	• Chairman of the Board of Directors, DKSH Holdings (Malaysia) Berhad	• Member of the Board of Directors, aCommerce Group Public Company Limited • Member of the Board of Directors, aCommerce Group Limited
Sam Oh		• Member of the Board of Directors, aCommerce Group Public Company Limited
Dr. Laurent Sigismondi		• Member of the Legal and Competition Commissions, economiesuisse
Thomas Sul		• Member of the Board, OstAsienVerein

Maagplatz 1 P.O. Box CH-8010 Zurich

Ernst & Young Ltd Phone: +41 58 286 31 11 www.ey.com/en_ch

To the General Meeting of DKSH Holding Ltd., Zurich

Zurich, February 15, 2024

Report of the statutory auditor on the audit of the compensation report

Opinion

We have audited the compensation report of DKSH Holding Ltd. (the Company) for the year ended December 31, 2023. The audit was limited to the information pursuant to Art. 734a-734f of the Swiss Code of Obligations (CO) in the tables on pages 40 to 41 and 42 and paragraph 8 of the compensation report.

In our opinion, the information pursuant to Art. 734a-734f CO in the compensation report (tables on pages 40 to 41 and 42 and paragraph 8) complies with Swiss law and the Company's articles of incorporation.

Basis for opinion

We conducted our audit in accordance with Swiss law and Swiss Standards on Auditing (SA-CH). Our responsibilities under those provisions and standards are further described in the "Auditor's responsibilities for the audit of the compensation report" section of our report. We are independent of the Company in accordance with the provisions of Swiss law and the requirements of the Swiss audit profession, and we have fulfilled our other ethical responsibilities in accordance with these requirements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Other information

The Board of Directors is responsible for the other information. The other information comprises the information included in the annual report, but does not include the tables on pages 40 to 41 and 42 and paragraph 8 in the compensation report, the consolidated financial statements, the stand-alone financial statements and our auditor's reports thereon.

Our opinion on the compensation report does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the compensation report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the audited financial information in the compensation report or our knowledge obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Board of Directors' responsibilities for the compensation report

The Board of Directors is responsible for the preparation of a compensation report in accordance with the provisions of Swiss law and the Company's articles of incorporation, and for such internal control as the Board of Directors determines is necessary to enable the preparation of a compensation report that is free from material misstatement, whether due to fraud or error. It is also responsible for designing the remuneration system and defining individual remuneration packages.

Auditor's responsibilities for the audit of the compensation report

Our objectives are to obtain reasonable assurance about whether the information pursuant to Art. 734a-734f CO is free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Swiss law and SA-CH will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this compensation report.

As part of an audit in accordance with Swiss law and SA-CH, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

• ▶ Identify and assess the risks of material misstatement in the compensation report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• ▶ Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.
• ▶ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made.

We communicate with the Board of Directors or its relevant committee regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide the Board of Directors or its relevant committee with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.

Ernst & Young Ltd

Simon Zogg Patrick Meier Licensed audit expert Licensed audit expert (Auditor in charge)

Management's Discussion & Analysis

The management review of the Group outlines an in-depth analysis of the financial year 2023 and provides an outlook for DKSH's future.

Summary

Based on the resilience of our business model and our diligent strategy execution, DKSH reports good results for 2023 with all four Business Units reporting increased Core EBIT (at constant exchange rates, CER).

Net sales reached CHF 11.1 billion (+5.3% at CER), Core EBIT grew to CHF 329.9 million (+12.6% at CER), and Free cash flow was CHF 282.3 million. The Core EBIT margin expanded by more than 15 basis points in a challenging market environment.

Organic growth is a key growth driver for DKSH that it complements with M&A. In 2023, DKSH successfully closed three acquisitions.

In Business Unit Consumer Goods, DKSH strengthened its Beauty Care business by acquiring CS&Co. Beauty Solutions, New Zealand's leading independent beauty product distributor.

In Business Unit Healthcare, DKSH purchased Partizan Worldwide Pty Limited, a leading patient support healthcare solutions provider in Australia. With this acquisition, DKSH grows its patient services business in line with Business Unit Healthcare's strategy to expand its market position and drive into higher added value segments and services. In addition, DKSH announced in early 2024 that it had signed an agreement to acquire Medipharm Sdn Bhd, one of the leading pharmaceutical and medical devices distributors in Brunei. With this acquisition, DKSH Healthcare grows its business in line with the strategy to expand its footprint in the Asia Pacific region.

In Business Unit Technology, DKSH strengthened its business with the acquisition of Bio-Strategy, the largest independent distributor of scientific instruments in Australia and New Zealand, thereby further consolidating the fragmented industry in Asia Pacific.

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Acquisitions will continue to be a crucial part of DKSH's strategy as they provide access to attractive business segments and expand DKSH's market position across its Business Units.

Net Sales and Core EBIT Above Last Year (at CER)

DKSH Group reported a Net sales decrease by 2.2% to CHF 11.1 billion in 2023 and increase by 5.3% at CER. Organic growth contributed the most with 3.2%, acquisitions added 2.1%, and exchange rates -7.5% due to the strong appreciation of the Swiss franc.

All four Business Units improved their performance. Accordingly, the Group's Core EBIT margin reached 3.0% compared to 2.8% in 2022.

All Business Units Improved Performance

Business Unit Healthcare

Business Unit Healthcare accelerated Net sales growth (6.5% at CER) in 2023 and further increased Core EBIT margin from 2.6% to 2.8%. A key driver for these excellent results was business development with existing and new clients in Thailand, Malaysia, and Vietnam as well as the strong underlying market. The continued focus on value-added segments and services, such as the Own Brands and Medical Device businesses, as well as Full Agency services, also contributed to the Business Unit's strong year. With the two acquisitions of Partizan in Australia as well as Medipharm in Brunei (early 2024), Business Unit Healthcare further strengthened its market presence and is well positioned for future profitable growth.

Business Unit Consumer Goods

The focus of Business Unit Consumer Goods on its core activities resulted in Net sales growth (2.2% at CER) to CHF 3.5 billion. Core EBIT grew (at CER) and the Core EBIT margin was 2.3%. Following a detailed analysis of the portfolio, the strategic direction has evolved to an even stronger focus on the FMCG (Fast Moving Consumer Goods) business. Subsequently, DKSH decided to discontinue the non-profitable and non-core fashion retail business, which is already fully reflected in the 2023 results. With these steps, the Unit will continue capitalizing on its position in Asia Pacific and driving growth and profitability in its core business under the leadership of the new Business Unit Head.

Business Unit Performance Materials

Business Unit Performance Materials delivered Net sales growth of 6.1% (at CER) in a very challenging market environment. Driven by gross margin expansion and strong cost control, Core EBIT in 2023 was CHF 116.0 million and grew double-digit at CER with a strong Core EBIT margin increase of 40 basis points to 8.1%. To provide additional disclosure and enhance industry comparability: DKSH increased Core EBITA from CHF 115.7 million to CHF 125.6 million (+17.4% at CER) and expanded the Core EBITA margin from 7.9% to 8.7% (+80 basis points), with positive contributions by all regions. At the same time, the Unit successfully reduced inventory levels and improved working capital days.

In Asia Pacific and Europe, the Unit benefited from robust demand across the life science sector (food and beverages, pharma, personal care). A scalable and global business model, its business development pipeline, and further industry consolidation potential provide future growth opportunities.

Business Unit Technology

Business Unit Technology again achieved remarkably strong results in 2023. Both Net sales and Core EBIT increased double-digit (at CER), resulting in a higher Core EBIT margin of 6.8%. Business Unit Technology continued to grow key areas such as scientific instrumentation, precision machinery, and equipment for the semiconductor industry. The consumables and service segments continued to be important growth drivers. With the acquisition of Bio-Strategy in Australia and New Zealand, Business Unit Technology strengthened its leading position in the scientific instrumentation space in Asia Pacific. With further market consolidation potential ahead, the Business Unit will keep fostering its position in key industries and higher margin segments and services.

Thereof Mainland China 2.5%.

Net sales 2023 by region in % Net sales 2023 by Business Unit in %

Other (Non-Business Unit)

Other Core EBIT reached CHF -60.5 million in 2023 from CHF -59.3 million in 2022. Other EBIT was CHF -68.9 million and includes a non-recurring share of result in associates of CHF 7.5 million and a fair value adjustment related to employee benefit expenses of CHF 0.9 million. These figures reflect costs which have not been allocated to the Business Units.

Regional Performance

At constant exchange rates (CER), Net sales in DKSH's largest market, Thailand, grew mid-single digit mainly thanks to strong growth in Business Unit Healthcare and a general rebound of the tourism sector. Net sales in the Greater China region also increased mid single-digit due to growth with existing and new clients as well as the absence of movement

Group				At CER1
in CHF millions	2023	2022	Change in %	Change in %
Net sales	11,066.0	11,320.2	(2.2)	5.3
Core operating profit (EBIT)	329.9	319.2	3.4	12.6

Healthcare
in CHF millions	2023	2022	Change in %	Change in %
Net sales	5,578.2	5,636.9	(1.0)	6.5
Core operating profit (EBIT)	155.9	146.2	6.6	14.5

Consumer Goods				At CER1
in CHF millions	2023	2022	Change in %	Change in %
Net sales	3,515.5	3,708.7	(5.2)	2.2
Core operating profit (EBIT)	82.5	86.9	(5.1)	2.2

Performance Materials
in CHF millions	2023	2022	Change in %	Change in %
Net sales	1,439.7	1,461.4	(1.5)	6.1
Core operating profit (EBIT)	116.0	112.2	3.4	12.1

Technology
in CHF millions	2023	2022	Change in %	Change in %
Net sales	532.6	513.2	3.8	12.5
Core operating profit (EBIT)	36.0	33.2	8.4	17.8

Constant exchange rates (CER): 2023 figures converted at 2022 exchange rates.

Core EBIT 2023 by Business Unit2 in %

² Excl. Business Unit "Other"

restrictions in 2023 which were still in place for some parts of 2022. Net sales in Malaysia and Singapore grew mid single-digit. The Rest of Asia Pacific grew low single-digit, and the Rest of the World grew double digit driven by M&A contributions in Business Unit Performance Materials.

Cash Flow Generation

The Free cash flow increased to CHF 282.3 million due to efficient net working capital management, representing a Cash conversion1 of 137.0% compared to 100.5% in 2022.

DKSH operates an asset-light business model where distribution centers are typically leased and most of the transportation is outsourced to third parties. Accordingly, Capital expenditures (Capex) remained at a low level of CHF 37.5 million (0.3% of Net sales) in 2023, a similar rate as in 2022 (CHF 45.6 million or 0.4% of Net sales).

Core return on equity (ROE) reached 11.7% (11.5% in 2022) and Core return on net operating capital (RONOC) was 18.7% (19.2% in 2022).

Continued Strong Balance Sheet

DKSH operates an asset-light business model that enables strong Free cash flow generation. In 2023, DKSH used its cash flow primarily to fund three acquisitions and to distribute CHF 139.6 million as dividend payment. Accordingly, the Net cash position by the end of 2023 stood at CHF 6.5 million, compared to a slight Net debt position of CHF 42.3 million at the end of 2022.

Outlook

DKSH is committed to deliver GDP+2 sales growth (at CER) and expects Core EBIT (at CER) in 2024 to be higher than in 2023 based on its resilient business model, successful strategy execution, and strong balance sheet. This outlook assumes economic growth in Asia Pacific, exchange rates at current levels, and barring any unforeseen events. The Group remains confident about Asia's long-term potential and is well-positioned to benefit from favorable market, industry, and M&A consolidation trends.

Definitions and Financial Details

In the Annual Report, media releases, and other communication to external stakeholders, DKSH uses financial performance measures which are not defined by IFRS Accounting Standards. These measures are used by management to assess the performance of the Group. Some of these measures, like Operating profit (EBIT), are defined by a reconciliation in the sections of the Annual Report where they appear. The other main alternative performance measures used by DKSH are defined and/or reconciled below.

Organic Growth

Organic growth is the difference between current and previous reporting period excluding Mergers & Acquisitions (M&A) and Foreign exchange effects (FX).

Mergers & Acquisitions

M&A includes the impact of the businesses acquired in the current and previous reporting period.

Foreign Exchange Effects

FX is the difference between current period reported figures at current versus previous period exchange rates.

¹ For the definition of Alternative Performance Measures, please refer to DKSH Annual Report 2023, page 51 onwards.

² Weighted GDP calculation based on DKSH 2023 Net sales market split.

The reconciliation between Net sales of current and previous reporting period as per Consolidated Income Statement is as follows:

2023 by Business Unit in CHF millions	2023	Organic	M&A	FX	2022
Healthcare	5,578.2	347.4	18.1	(424.2)	5,636.9
Consumer Goods	3,515.5	70.2	10.5	(273.9)	3,708.7
Performance Materials	1,439.7	(98.5)	188.0	(111.2)	1,461.4
Technology	532.6	39.1	24.8	(44.5)	513.2
Group Total	11,066.0	358.2	241.4	(853.8)	11,320.2
in % of 2022		3.2	2.1	(7.5)

2022 by Business Unit in CHF millions	2022	Organic	M&A	FX	2021
Healthcare	5,636.9	152.7	16.2	(118.3)	5,586.3
Consumer Goods	3,708.7	(32.7)	11.7	(78.6)	3,808.3
Performance Materials	1,461.4	156.0	103.0	(79.0)	1,281.4
Technology	513.2	52.4	44.8	(14.3)	430.3
Group Total	11,320.2	328.4	175.7	(290.2)	11,106.3
in % of 2021		3.0	1.6	(2.6)

Core Operating Profit (EBIT) and Core EBITA

The reconciliation from Operating profit (EBIT), reconciled in the Consolidated Income Statement, to Core operating profit (EBIT) and Core EBITA is as follows:

2023 by Business Unit in CHF millions	Operating profit (EBIT)	Discontinua tion of fash ion retail business	Goodwill impairment	Fair value adjustment related to em ployee benefit expenses	Share of result in associates	Core operating profit (EBIT)	Amortization	Core EBITA
Healthcare	155.9	-	-	-	-	155.9	5.4	161.3
Consumer Goods	66.9	11.7	3.9	-	-	82.5	4.4	86.9
Performance Materials	116.0	-	-	-	-	116.0	9.6	125.6
Technology	36.0	-	-	-	-	36.0	3.1	39.1
Other/Elimination	(68.9)	-	-	0.9	7.5	(60.5)	1.9	(58.6)
Group Total	305.9	11.7	3.9	0.9	7.5	329.9	24.4	354.3

2022 by Business Unit in CHF millions	Operating profit (EBIT)	Discontinua tion of fash ion retail business	Goodwill impairment	Fair value adjustment related to em ployee benefit expenses	Share of result in associates	Core operating profit (EBIT)	Amortization	Core EBITA
Healthcare	146.2	-	-	-	-	146.2	3.2	149.4
Consumer Goods	86.9	-	-	-	-	86.9	6.6	93.5
Performance Materials	112.2	-	-	-	-	112.2	3.5	115.7
Technology	33.2	-	-	-	-	33.2	3.1	36.3
Other/Elimination	(59.3)	-	-	-	-	(59.3)	2.0	(57.3)
Group Total	319.2	-	-	-	-	319.2	18.4	337.6

Discontinuation of fashion retail business represents the operational loss and is included in Net sales (CHF 4.1 million), Goods and materials purchased and consumables used (CHF 6.7 million), Employee benefit expenses (CHF 3.5 million), Depreciation, amortization and impairments (CHF 1.1 million) and Other expenses (CHF 4.6 million) in the Consolidated Income Statement.

Goodwill impairment is included in Depreciation, amortization and impairment in the Consolidated Income Statement.

The fair value adjustment related to employee benefit expenses is included in Employee benefit expenses in the Consolidated Income Statement.

The share of results in associates relates to the Group's share of FVTPL revaluation losses of an associate's outstanding convertible notes of CHF 3.3 million and an impairment charge of CHF 4.2 million included in the equity method of accounting.

Core Operating Profit (EBIT) and Core Operating Profit Before Amortization (EBITA) margin:

Defined as Core operating profit (EBIT) divided by Net sales, respectively Core operating profit before amortization (EBITA) divided by Net sales.

Core Profit After Tax

The reconciliation from Profit after tax in the Consolidated Income Statement, to Core profit after tax is as follows:

in CHF millions	2023	2022
Profit after tax	189.9	207.6
Discontinuation of fashion retail business	9.8	-
Goodwill impairment	3.9	-
Fair value adjustment related to employee benefit expenses	0.9	-
Share of result in associates	7.5	-
Loss on sale of subsidiaries	2.0	0.1
Expense/(Income) from financial instruments	(8.0)	0.7
Core profit after tax	206.0	208.4

Discontinuation of fashion retail business are adjusted for the applicable tax rate in the jurisdiction where the costs are incurred.

Loss on sale of subsidiaries is included in the Consolidated Income Statement.

The expense/(income) from financial instruments is included in the Net finance result in the Consolidated Income Statement.

Free Cash Flow

The reconciliation from Net cash flows from operating activities in the Consolidated Cash Flow Statement to Free cash flow is as follows:

in CHF millions	2023	2022
Net cash flows from operating activities	393.1	321.9
Repayment leases	(73.3)	(66.8)
Purchase of property, plant and equipment	(30.7)	(36.6)
Purchase of intangible assets	(21.6)	(48.3)
Purchase trademarks/licences	14.8	39.3
Free cash flow	282.3	209.5

Cash Conversion

Cash conversion is calculated as Free cash flow as percentage of Core profit after tax:

in CHF millions	2023	2022
Free cash flow	282.3	209.5
Core profit after tax	206.0	208.4
Cash conversion	137.0%	100.5%

Net Operating Capital (NOC)

Net operating capital is the capital invested in the business and is calculated from the Consolidated Statement of Financial Position as follows:

in CHF millions	2023	2022	2021
Total assets	5,471.2	5,878.7	5,347.4
Financial assets	(39.0)	(31.4)	(29.2)
Cash and cash equivalents	(687.2)	(636.4)	(673.7)
Total liabilities	(3,733.3)	(4,052.4)	(3,461.0)
Current borrowings	211.9	155.3	204.3
Non-current borrowings	468.8	523.4	102.1
Net operating capital (NOC)	1,692.4	1,837.2	1,489.9

Core Return on Net Operating Capital (RONOC)

Core return on net operating capital is calculated from the Consolidated Income Statement and the Consolidated Statement of Financial Position as follows:

in CHF millions	2023	2022	2021
Core Operating profit (EBIT)	329.9	319.2	-
Net operating capital (NOC)	1,692.4	1,837.2	1,489.9
Average NOC current and previous period	1,764.8	1,663.6	-
Core return on net operating capital (RONOC)1	18.7%	19.2%	-

In 2023, The Group changed the definition from Return on net operating Capital to Core return on net operating capital to reflect the underlying performance.

Core Return on Equity (ROE)

The Core return on equity is calculated from the Consolidated Income Statement and the Consolidated Statement of Financial Position as follows:

in CHF millions	2023	2022
Core profit after tax	206.0	208.4
Non-controlling interest	7.9	6.5
Core profit attributable to the shareholders of DKSH Holding Ltd.	198.1	201.9
Equity attributable to the shareholders of DKSH Holding Ltd.	1,686.9	1,758.5
Core return on equity (ROE)1	11.7%	11.5%

In 2023, The Group changed the definition from Return on equity to Core return on equity to reflect the underlying performance.

Equity Ratio

The Equity ratio is calculated from the Consolidated Statement of Financial Position as follows:

in CHF millions	2023	2022
Total equity	1,737.9	1,826.3
Total assets	5,471.2	5,878.7
Equity ratio	31.8%	31.1%

Net Cash/(Debt)

The reconciliation from Cash and cash equivalents in the Consolidated Statement of Financial Position to Net cash/(debt) is as follows:

in CHF millions	2023	2022
Cash and cash equivalents	687.2	636.4
Current borrowings	(211.9)	(155.3)
Non-current borrowings	(468.8)	(523.4)
Net cash/(debt)	6.5	(42.3)

Consolidated Financial Statements DKSH Group

• Consolidated Income Statement
• Consolidated Statement of Comprehensive Income
• Consolidated Statement of Financial Position
• Consolidated Statement of Changes in Equity
• Consolidated Cash Flow Statement
• Notes to the Consolidated Financial Statements

Consolidated Income Statement

in CHF millions 1	Notes	2023	2022
Net sales	4	11,066.0	11,320.2
Other income	5	22.7	32.1
Goods and materials purchased and consumables used		(9,418.4)	(9,625.4)
Employee benefit expenses	6	(755.8)	(775.5)
Depreciation, amortization and impairment	15/17/18	(132.1)	(126.5)
Other operating expenses	7	(470.8)	(505.6)
Share of profit and loss of associates and joint ventures	19/20	(5.7)	(0.1)
Operating profit (EBIT)		305.9	319.2
Financial income	8	14.8	2.4
Financial expense	8	(54.4)	(36.8)
Loss on sale of shareholdings	19/30	(2.0)	(0.1)
Profit before tax		264.3	284.7
Income tax expenses	9	(74.4)	(77.1)
Profit after tax		189.9	207.6
Attributable to
Shareholders of DKSH Holding Ltd.		182.0	201.1
Non-controlling interest		7.9	6.5
Earnings per share for profit attributable to the shareholders of DKSH Holding Ltd.
Basic earnings per share	28	2.80	3.09
Diluted earnings per share	28	2.80	3.09

Except for earnings per share (in CHF).

Consolidated Statement of Comprehensive Income

in CHF millions	2023	2022
Profit after tax	189.9	207.6
Other comprehensive income
Currency translation differences	(152.2)	(81.6)
Items that may be reclassified to profit or loss	(152.2)	(81.6)
Remeasurements on defined benefit plans, net of tax of CHF 1.9 million in current and CHF 4.0 million in prior period	7.4	(14.9)
Net losses on equity instruments at fair value through other comprehensive income, net of tax of CHF 0.1 million in prior period	-	(0.4)
Items that will not be reclassified to profit or loss	7.4	(15.3)
Other comprehensive income	(144.8)	(96.9)
Total comprehensive income	45.1	110.7
Attributable to
Shareholders of DKSH Holding Ltd.	49.2	107.6
Non-controlling interest	(4.1)	3.1

Consolidated Statement of Financial Position

in CHF millions at December 31	Notes	2023	2022
Cash and cash equivalents	10	687.2	636.4
Trade receivables	11	1,840.7	2,030.9
Inventories	13	1,138.0	1,277.3
Prepaid expenses and contract assets	14	32.0	25.0
Other receivables	16	330.9	365.6
Current income tax receivables		36.5	32.7
Assets classified as held for sale	19	18.0	18.0
Current assets		4,083.3	4,385.9
Intangible assets	15	785.6	825.4
Property, plant and equipment	17	143.6	154.6
Right-of-use assets	18	261.5	317.4
Financial assets	12	39.0	31.4
Investments in associates and joint ventures	19/20	80.2	99.3
Retirement benefit assets	26	22.9	10.9
Deferred tax assets	21	55.1	53.8
Non-current assets		1,387.9	1,492.8
Total assets		5,471.2	5,878.7
Borrowings	22	211.9	155.3
Lease liabilities	18	54.2	66.1
Trade payables		2,025.3	2,233.2
Current income tax liabilities		55.8	52.8
Other payables, accrued expenses and contract liabilities	23	566.8	588.7
Current provisions	24	1.5	2.3
Current liabilities		2,915.5	3,098.4
Borrowings	22	468.8	523.4
Lease liabilities	18	223.3	267.8
Other non-current liabilities		62.9	100.5
Deferred tax liabilities	21	28.3	27.0
Non-current provisions	24	6.6	6.7
Retirement benefit obligations	26	27.9	28.6
Non-current liabilities		817.8	954.0
Total liabilities		3,733.3	4,052.4
Share capital		6.5	6.5
Reserves and retained earnings		1,680.4	1,752.0
Equity attributable to the shareholders of DKSH Holding Ltd.		1,686.9	1,758.5
Non-controlling interest		51.0	67.8
Total equity		1,737.9	1,826.3
Total equity and liabilities		5,471.2	5,878.7

Consolidated Statement of Changes in Equity

						Total equity
						attributable to
						shareholders	Non-con
in CHF millions	Share capital	Treasury shares1	Currency translation	Other reserves	Retained earnings	of DKSH Holding Ltd.	trolling interest	Total equity
As of January 1, 2022	6.5	(5.0)	(272.2)	234.2	1,845.3	1,808.8	77.6	1,886.4
Profit after tax	-	-	-	-	201.1	201.1	6.5	207.6
Other comprehensive income	-	-	(78.2)	-	(15.3)	(93.5)	(3.4)	(96.9)
Total comprehensive income	-	-	(78.2)	-	185.8	107.6	3.1	110.7
Change in ownership2	-	-	-	-	-	-	31.7	31.7
Purchase of treasury shares	-	(6.3)	-	-	-	(6.3)	-	(6.3)
Vested share-based payment awards	-	4.3	-	-	(4.3)	-	-	-
Share-based payments	-	-	-	-	5.4	5.4	-	5.4
Dividend	-	-	-	-	(133.2)	(133.2)	(0.9)	(134.1)
Changes related to put options for non-controlling interests	-	-	4.3	-	(28.1)	(23.8)	(43.7)	(67.5)
As of December 31, 2022	6.5	(7.0)	(346.1)	234.2	1,870.9	1,758.5	67.8	1,826.3
Profit after tax	-	-	-	-	182.0	182.0	7.9	189.9
Other comprehensive income	-	-	(140.2)	-	7.4	(132.8)	(12.0)	(144.8)
Total comprehensive income	-	-	(140.2)	-	189.4	49.2	(4.1)	45.1
Change in ownership3	-	-	-	-	-	-	(3.9)	(3.9)
Purchase of treasury shares	-	(6.2)	-	-	-	(6.2)	-	(6.2)
Vested share-based payment awards	-	6.4	-	-	(6.4)	-	-	-
Share-based payments	-	-	-	-	3.7	3.7	-	3.7
Dividend	-	-	-	-	(139.6)	(139.6)	(5.1)	(144.7)
Changes related to put options for non-controlling interests	-	-	0.2	-	21.1	21.3	(3.7)	17.6
As of December 31, 2023	6.5	(6.8)	(486.1)	234.2	1,939.1	1,686.9	51.0	1,737.9

Treasury share transactions (Note 27).

Principally relates to the acquisition of Terra Firma (Note 30).

Relates to the disposal of the Group's interest in DKSH Smollan Fieldmarketing businesses in Malaysia, Thailand, Taiwan and Vietnam (Note 30).

Consolidated Cash Flow Statement

in CHF millions	Notes	2023	2022
Profit before tax		264.3	284.7
Non-cash adjustments
Depreciation, amortization and impairment on
Property, plant and equipment	17	31.8	30.7
Intangible assets	15	28.3	18.4
Right-of-use assets	18	72.0	77.4
Rent concessions COVID-19	18	-	(0.4)
Share-based payment transaction expense	29	3.8	5.4
Gain/Loss on sale of tangible assets and intangible assets	5/7	0.1	(1.4)
Financial income	8	(14.8)	(2.4)
Financial expense	8	54.4	36.8
Share of profit and loss of associates and joint ventures	19/20	5.7	0.1
Loss on sale of shareholdings	19/30	2.0	0.1
Change in provisions and other non-current liabilities		0.4	(6.4)
Change in other non-current assets		(1.0)	(3.9)
Working capital adjustments
(Increase)/decrease in trade and other receivables and prepayments		7.8	4.2
(Increase)/decrease in inventories		16.5	(132.6)
Increase/(decrease) in trade and other payables		31.6	113.2
Interest received		5.1	2.4
Interest paid		(37.7)	(24.9)
Income taxes paid		(81.2)	(81.7)
Dividend received from associates and joint ventures		4.0	2.2
Net cash flows from operating activities		393.1	321.9
Proceeds from sale of property, plant and equipment		1.7	4.3
Purchase of property, plant and equipment		(30.7)	(36.6)
Purchase of intangible assets1		(21.6)	(48.3)
Proceeds from sale of financial assets		-	1.1
Purchase of financial assets / loans granted		(3.1)	-
Acquisition of subsidiaries net of cash	30	(62.1)	(433.6)
Disposal of subsidiaries net of cash	30	(0.7)	-

in CHF millions	Notes	2023	2022
Proceeds from current and non-current borrowings	22	818.7	961.8
Repayment of current and non-current borrowings	22	(779.7)	(574.6)
Repayment leases	18	(73.3)	(66.8)
Capital increase non-controlling interest		-	1.3
Dividend paid	27	(139.6)	(133.2)
Dividend paid to non-controlling interest		(5.1)	(0.9)
Net payments for net investment hedges		-	0.7
Purchase of treasury shares	27	(6.2)	(6.3)
Net cash flows from/used in financing activities		(185.2)	182.0
Cash and cash equivalents, as of January 1		636.4	673.7
Effect of exchange rate changes		(40.6)	(28.1)
Net increase/(decrease) in cash and cash equivalents		91.4	(9.2)
Cash and cash equivalents, as of December 31		687.2	636.4

Includes payments of CHF 14.8 million in 2023 and CHF 39.3 million in 2022 respectively relating to the acquisition of trademarks (Note 15).

Notes to the Consolidated Financial Statements

1. General Information

DKSH (the "Group") is a Market Expansion Services Group with a focus on Asia. DKSH helps other companies and brands to grow their business in new or existing markets with 27,062 specialized staff (2022: 31,077).

The Group offers any combination of sourcing, market insights, marketing and sales, eCommerce, distribution and logistics as well as after-sales services. It provides business partners with expertise as well as on-the-ground logistics based on a comprehensive network of unique size and depth.

Business activities are organized into four specialized Business Units that mirror the Group's fields of expertise: Healthcare, Consumer Goods, Performance Materials and Technology.

DKSH Holding Ltd. is the parent company of DKSH Group. Its shares are listed on the SIX Swiss Exchange. The address of its registered office is Wiesenstrasse 8, 8008 Zurich, Switzerland.

The consolidated financial statements of the Group as of December 31, 2023, were approved by the Board of Directors on February 15, 2024, and are subject to approval by the Ordinary General Meeting of shareholders on March 26, 2024.

2. Accounting Policies

The principal accounting policies adopted in the preparation of these consolidated financial statements are set out below:

Basis of Preparation

The consolidated financial statements are prepared in accordance with and comply with IFRS Accounting Standards. The financial statements have been prepared on an accrual basis and under the historical cost convention, as modified by the revaluation of certain financial assets, and financial liabilities (including derivative instruments) at fair value. All amounts are in millions of Swiss francs unless otherwise stated.

(a) Consolidation

Subsidiaries are consolidated from the date on which control is transferred to the Group and are no longer consolidated from the date that control ceases. All intercompany transactions, balances and unrealized gains and losses on transactions between Group companies are eliminated on consolidation. The difference of the cost of an acquisition of non-controlling interest over the carrying amounts of net assets acquired is recognized directly in equity.

A listing of the Group's principal subsidiaries is set out in Note 35. The financial effect of the acquisitions and disposals is shown in Note 30.

Business Combinations and Related Goodwill

The cost of an acquisition is measured as the fair value of the consideration given, including contingent consideration liabilities and the fair value of any previous equity interest. Acquisition-related costs are expensed as incurred.

The excess of the cost of an acquisition over the fair value of the net identifiable assets, liabilities and contingent liabilities acquired is capitalized. If the cost of an acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognized directly in other income in the income statement.

With regards to business combinations, put option and call option agreements relating to the shares held by the non-controlling shareholders are entered from time to time. If the Group has acquired a present ownership interest as part of a business combination, the present value of the redemption amount of the put option is recognized as a financial liability with any excess over the carrying amount of the non-controlling interest recognized as goodwill. In such case, the non-controlling interest is deemed to have been acquired at the acquisition date and therefore any excess arising should follow the accounting treatment as in a business combination acquiring full shares of the target company. Subsequent value changes of the financial liability classified at amortized cost are recognized in the statement of income and no earnings are attributed to the non-controlling interest. If the Group has not acquired a present ownership interest as part of a business combination, the non-controlling interest continues to receive an allocation of profit or loss and is reclassified as a financial liability at each reporting date as if the acquisition took place at that date. Any excess over the reclassified carrying amount of the non-controlling interest and subsequent value changes of the financial liability are recognized directly in retained earnings.

(b) Investments in Associates and Joint Ventures

Associates are entities over which the Group has significant influence.

A joint venture is a type of joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the joint venture. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require unanimous consent of the parties sharing control.

The Group's investments in its associates and joint ventures are accounted for by using the equity method. Under the equity method, the investment in an associate or a joint venture is initially recognized at cost. The carrying amount of the investment is adjusted by recognizing changes in the Group's share of net assets of the associate or joint venture since the acquisition date. Goodwill relating to the associate or joint venture is included in the carrying amount of the investment and is neither amortized nor individually tested for impairment.

When there has been a change directly recognized in the equity of the associate or joint venture, the Group recognizes its share of these changes, if applicable, in the statement of changes in equity. Unrealized gains and losses resulting from transactions between the Group and the associate or joint venture are eliminated to the extent of the interest in the associate or joint venture.

The Group's share of profit or loss of an associate or a joint venture is reported in operating profit and represents profit or loss after tax and non-controlling interests in the subsidiaries of the associate or joint venture. The financial statements of the associate or joint venture are prepared for the same reporting period as the Group. When necessary, adjustments are made to bring the accounting policies in line with those of the Group.

At each reporting date, the Group determines whether there is objective evidence that the investment in the associate or joint venture is impaired. If there is such evidence, the Group calculates the amount of impairment as the difference between the recoverable amount of the associate or joint venture and its carrying value, then recognizes the loss as Share of profit and loss of associates and joint ventures in the Consolidated income statement.

Upon loss of significant influence over the associate or joint control over the joint venture and it becomes a financial asset, the Group measures and recognizes any retained investment at its fair value. Any difference between the carrying amount of the associate or joint venture upon loss of significant influence or joint control and the fair value of the retained investment and proceeds from disposal is recognized in profit or loss.

(c) Financial Assets

Financial assets at fair value through profit or loss (FVTPL) include financial assets for short-term purposes, derivative financial instruments, convertible loans and other equity securities not irrevocably designated as at fair value through other comprehensive income (OCI) on initial recognition. Such instruments are initially recognized at fair value on the date on which they are acquired and are subsequently measured at fair value. Derivative assets are included in other receivables, and derivative liabilities are included in other payables and accrued expenses in the statement of financial position as they are generally expected to be realized within twelve months of the financial reporting date.

Financial assets measured at amortized cost are financial assets held to collect contractual cash flows comprising solely principal and interest payments. This represents the most significant measurement category for the Group and it comprises cash and cash equivalents, trade receivables and other financial receivables and loans. These assets are initially recognized at fair value plus transaction cost with the exception of trade receivables that are measured at the transaction price.

After initial recognition these financial assets are measured at amortized cost using the effective interest rate method and are subject to impairment using the expected credit loss model. The Group applies the simplified approach, which allows expected lifetime losses to be recognized for trade receivables using a provision matrix. The provision matrix is based on the Group's historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment. These provisions represent the difference between the trade receivables gross carrying amount and the estimated net collectible amounts. Trade receivables are written off against the provision account when there is an official announcement of liquidation or bankruptcy confirming that the receivable will not be collected.

(d) Derivatives and Hedging

The Group uses derivative financial instruments such as forward currency contracts to hedge its risks associated with foreign currency fluctuations.

Such instruments are initially recognized at fair value on the date on which a derivative contract is entered into and are subsequently measured at fair value. Any gains or losses arising from changes in fair value on derivatives during the year are taken to the income statement. Additionally, the Group designates some forward contracts as hedges of net investments in foreign operations. Gains and losses from these contracts are recorded directly in other comprehensive income and will be recycled to the income statement on disposal of the underlying investment.

The Group does not enter into any derivatives without underlying exposure.

(e) Foreign Currency Translation

The Group's financial statements are presented in Swiss francs (CHF), which is also the parent's functional currency. Income statements of foreign entities are translated into CHF at the average exchange rates for the year, while the statements of financial position are translated at the yearend exchange rates as of December 31. Exchange differences arising from the translation of the net investment in foreign subsidiaries and associated undertakings, and of borrowings that hedge such investments, are included in other comprehensive income. On disposal of a foreign entity, the accumulated exchange differences are recognized in the income statement as part of the gain or loss on sale.

Foreign currency transactions are accounted for at the exchange rates prevailing at the date of the transactions. Gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies are recognized in the income statement. Non-monetary items are carried at historical cost using the spot rate at acquisition.

(f) Intangible Assets

Expenditure to acquire distribution contracts, patents, trademarks and licenses is capitalized and amortized using the straight-line method over their useful lives, not exceeding 20 years.

Software licenses are capitalized on the basis of the costs incurred to acquire and bring to use the specific software. These costs are amortized using the straight-line method over their estimated useful lives (3 to 10 years).

(g) Property, Plant, and Equipment

Property, plant and equipment is initially recorded at cost. The Group applies the straight-line depreciation method.

Such tangible fixed assets are depreciated to their residual values over their estimated useful life as follows:

Buildings 25 to 35 years Machinery/tools, furniture/fixtures 5 to 10 years IT/communication 3 to 5 years Vehicles 5 years

Leasehold improvements are depreciated over the shorter of their useful life and the remainder of the non-cancellable lease term.

(h) Impairment of Assets

Goodwill

Goodwill is tested for impairment at least annually and upon the occurrence of an indication of impairment. The impairment tests are performed annually at the same time each year at the cash-generating unit (CGU) level. The Group defines its CGUs based on the way that it monitors economic benefits from the acquired goodwill and intangibles. The impairment tests are performed by comparing the carrying value of the assets of these CGUs with their recoverable amount. The recoverable amount is the greater of the fair value less cost of disposal and value-in-use. Generally, the Group starts with a value-in-use calculation based on the future projected free cash flows discounted at an appropriate pre-tax rate of return. The discount rate reflects the current assessment of the time value of money and the risks specific to the CGUs (essentially country risks).

Impairment of Property, Plant and Equipment, and Finite-life Intangible Assets

Consideration is given at each financial reporting date determining whether there is any indication of impairment of the carrying amount of the Group's property, plant and equipment, right-of-use assets and finite-life intangible assets. If any indication exists, an asset's or CGUs recoverable amount is estimated. An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the fair value less costs of disposal and value-in-use. In assessing the value-in-use, the estimated future cash flows are discounted to their present value based on a country-specific discount of the country where the assets are located, adjusted for risks specific to the asset.

(i) Leases

At inception of a contract, the Group assesses whether the contract is, or contains, a lease.

The Group recognizes right-of-use assets at the commencement date of the lease. Right-of-use assets are initially measured at cost, and subsequently at cost less any accumulated depreciation and impairment losses and adjusted for certain remeasurement of the lease liabilities. Unless the Group is reasonably certain to obtain ownership of the leased asset at the end of the lease term, the recognized right-of-use assets are depreciated on a straight-line basis over the lease term. Right-of-use assets are subject to impairment.

The Group initially recognizes lease liabilities measured at the present value of lease payments that are not paid at the commencement date, discounted using the incremental borrowing rate where the rate implicit in the lease is not readily determinable. The lease payments include fixed payments less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Group and payments of penalties for terminating a lease, if the lease term reflects the Group exercising the option to terminate. The variable lease payments that do not depend on an index or a rate are recognized as expense in the period in which the event or condition that triggers the payment occurs.

After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the in-substance fixed lease payments or a change in the assessment to purchase the underlying asset.

The Group's property leases principally relating to warehouse, office and shop facilities typically include an initial non-cancellable period with an option to renew for an additional fixed period.

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

The Group applies judgement in evaluating whether it is reasonably certain to exercise the option to renew. All relevant factors that create an economic incentive for it to exercise the renewal are considered. After the commencement date, the Group reassesses the lease term if there is a significant event or change in circumstances that is within its control that could affect the exercise.

Lease payments on short-term leases and leases of lowvalue assets are recognized as expense on a straight-line basis over the lease term.

(j) Inventories

Inventories are stated at the lower of cost or net realizable value. Cost is determined based on the weighted average cost method. The cost of finished goods and work in progress includes raw materials, direct labor, other direct costs and related production overheads, but excludes interest expense.

Net realizable value is the estimate of the selling price in the ordinary course of business, less the costs of completion and selling expenses. A provision is established for slow moving and scrap items on stock.

(k) Borrowings

Borrowings are recognized initially at fair value, net of transaction costs incurred. Borrowings are subsequently carried at amortized cost using the effective interest rate method; any difference between proceeds (net of transaction costs) and the redemption value is recognized in the income statement over the period of the borrowings.

Borrowings are classified as current unless the liability matures only after twelve months after the reporting date, or the Group has an unconditional right to defer settlement of the liability for at least twelve months after the financial reporting date.

(l) Share-based Payments

The Group has equity- and partially cash-settled sharebased compensation plans, under which it receives services from qualifying employees. The employee services received in exchange for the grant of the equity-settled payments are measured at the fair value of the equity instruments granted and are recognized as expenses, with a corresponding increase in equity over the period that the employees become unconditionally entitled to the awards. For the cash-settled part of the plans the Group records a liability respectively. The fair values of share-based payment plans are measured at the grant date using a Monte Carlo simulation and for cash-settled plans at each reporting date until settled.

(m) Employee Benefits

The Group operates a number of defined benefit pension plans in various countries.

The cost of providing benefits under the defined benefit plans is determined using the projected unit credit method.

Remeasurements, comprising actuarial gains and losses, the effect of the asset ceiling and the return on plan assets (excluding net interest), are recognized immediately in the statement of financial position with a corresponding debit or credit to retained earnings through OCI in the period in which they occur. Remeasurements are not reclassified to the income statement in subsequent periods.

The Group recognizes the following changes in the net defined benefit obligation under "expenses for defined benefit pension plans" in employee benefit expenses:

• Service costs comprising current service costs, past service costs, gains and losses on curtailments and non-routine settlements
• Net interest cost

Termination benefits are payable when employment is terminated before the normal retirement date, or whenever an employee accepts voluntary redundancy in exchange for these benefits. Benefits falling due more than twelve months after financial reporting date are discounted to present value.

Provisions and accruals are also made for the estimated liability for annual leave and long-service leave as a result of services rendered by employees up to the financial reporting date.

(n) Current and Deferred Income Taxes

Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable 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. It is measured using tax rates enacted or substantively enacted at the reporting date.

Deferred income tax is provided, using the liability method, on all temporary differences arising between the tax bases of assets and liabilities and their carrying values for financial reporting purposes. Currently enacted or substantively enacted tax rates are used to determine deferred income tax.

Deferred tax assets relating to the carryforward of unused tax losses are recognized to the extent that it is probable that future taxable profit will be available and against which the unused tax losses can be utilized.

Deferred tax liabilities for withholding taxes (WHT) are recognized for subsidiaries in situations where the income is to be paid out as dividend in the foreseeable future and for undistributed earnings of unconsolidated companies to the extent that these withholding taxes are not expected to be refundable or deductible.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income taxes relate to the same fiscal authority.

(o) Revenue Recognition

The Group's sales are generated from the distribution of healthcare products and consumer goods, trading of technology and performance material products and from rendering of services. Revenue is recognized when a contractual promise to a customer has been fulfilled by transferring control over the promised goods or services, principally at the time of shipment to or receipt of the products by the customer, or over time when the services are performed. The Group's contractual promises generally represent one performance obligation. However, if a contract includes more than one performance obligation, the consideration is allocated based on the stand-alone selling prices of the individual performance obligations. The amount of revenue recognized is based on the expected consideration in exchange for the goods and services, taking into account contractually defined terms (e.g. trade discounts, cash discounts and volume rebates) and excluding taxes or duty.

In the Business Units Consumer Goods and Healthcare, the Group enters into contracts with its suppliers for the distribution of products. Under these contracts, the Group might also provide procurement, marketing, sales, warehousing, logistics and collection services. The Group assesses on a contract-by-contract basis whether it is acting as a principal or agent. In some cases, the Group might not be considered the party primarily responsible for fulfilling the promise to the customer to provide the products, and/or might not have inventory risk before specified equipment has been transferred to the customer and/or might not have discretion in establishing the price for the specified equipment. In limited cases where the Group is acting as an agent, only the margin on sale, the fees or commissions earned are recorded in net sales.

(p) Segment Reporting

The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Executive Committee, which makes strategic and key operating decisions. No segments have been aggregated to a reporting segment.

(q) Changes in Accounting Policy and Disclosures New and Amended IFRS as of January 1, 2023

The accounting policies adopted are consistent with those of the previous financial year, except for the following new and amended IFRS Accounting Standards and International Financial Reporting Interpretations Committee (IFRIC) interpretations and annual improvements that need to be applied for annual periods beginning January 1, 2023:

IFRS 17 Insurance Contracts: IFRS 17 Insurance Contracts is a comprehensive new accounting standard for insurance contracts covering recognition and measurement, presentation and disclosure. The standard applies to all types of insurance contracts (i.e., life, non-life, direct insurance and re-insurance), regardless of the type of entities that issue them as well as to certain guarantees and financial instruments with discretionary participation features; a few scope exceptions will apply. The new standard had no impact on the Group's financial statements.

Amendments to IAS 8 "Definition of Accounting Estimates": The amendments clarify the distinction between changes in accounting estimates, changes in accounting policies and the correction of errors. The amendments had no impact on the Group's financial statements.

Amendments to IAS 1 "Disclosure of Accounting Policies": The amendments provide guidance and examples to help entities apply materiality judgements to accounting policy disclosures. The amendments aim to help entities provide accounting policy disclosures that are more useful by replacing the requirement for entities to disclose their 'significant' accounting policies with a requirement to disclose their 'material' accounting policies and adding guidance on how entities apply the concept of materiality in making decisions about accounting policy disclosures. The Group has reviewed and made some changes to its accounting policy disclosures in these consolidated financial statements. Amendments to IAS 12 "Deferred Tax related to Assets and Liabilities arising from a Single Transaction": The amendments narrow the scope of the initial recognition exception, so that it no longer applies to transactions that give rise to equal taxable and deductible temporary differences such as leases and decommissioning liabilities. The amendments had no impact on the Group's consolidated financial statements.

International Tax Reform—Pillar Two Model Rules – Amendments to IAS 12: The amendments to IAS 12 have been introduced in response to the OECD's BEPS Pillar Two rules and include:

• A mandatory temporary exception to the recognition and disclosure of deferred taxes arising from the jurisdictional implementation of the Pillar Two model rules; and
• Disclosure requirements for affected entities to help users of the financial statements better understand an entity's exposure to Pillar Two income taxes arising from that legislation, particularly before its effective date.

The Group has reviewed its accounting policy disclosures and made certain changes to Note 2 of these financial statements compared to last year. The other changes in IFRS Accounting Standards have not had an impact on the Group's consolidated financial statements.

The Group has not applied the new standards and interpretations and amendments to existing standards that are not yet effective.

Amendments to IFRS 16: "Lease Liability in a Sale and Leaseback": The amendments are effective for annual reporting periods beginning on or after January 1, 2024. The amendments are not expected to have a material impact on the Group's financial statements.

Amendments to IAS 1: "Classification of Liabilities as Current or Non-current": In January 2020 and October 2022, the IASB issued amendments to paragraphs 69 to 76 of IAS 1 to specify the requirements for classifying liabilities as current or non-current. In addition, a requirement has been introduced to require disclosure when a liability arising from a loan agreement is classified as non-current and the entity's right to defer settlement is contingent on compliance with future covenants within twelve months. The amendments are effective for annual reporting periods beginning on or after January 1, 2024 and must be applied retrospectively. The Group is currently assessing the impact the amendments will have on current practice.

(r) Critical Accounting Estimates and Assumptions

The presentation of the consolidated financial statements in accordance with IFRS Accounting Standards requires the use of estimates. Certain areas that are particularly subject to evaluation and in which management's assumptions and estimates are of critical importance for the consolidated financial statements are mentioned below:

(i) Impairment Testing of Goodwill

The Group tests goodwill are based on value-in-use calculations. The most critical assumptions for this calculation are the estimated cash flows during the forecast period and the discount rate applied.

(ii) Impairment Testing of Investment in Associates

If there is objective evidence of impairment, the carrying amount of the investment is tested for impairment by comparing its recoverable amount (higher of value in use and fair value less cost of disposal) with is carrying amount. The most critical management assumptions for this calculation are the determination of the reasonable possible scenarios of exercising the fair value, the estimated cash flows and/or multiples and the discount rate applied.

(iii) Income Taxes

The Group is obliged to pay income taxes in numerous jurisdictions. Significant judgment is required in determining the worldwide provision for income taxes. For any uncertain tax position, a current or deferred tax liability or receivable is recognized based on detailed assessment of the tax risk. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the current income tax and deferred tax liabilities in the period in which such determination is made (Note 9).

As a multinational group with a turnover exceeding EUR 750.0 million, DKSH is in scope of the Pillar Two Model Rules that were issued by the OECD. The Pillar Two Model Rules were brought into law by a significant number of jurisdictions in 2023 and take effect beginning 2024. Switzerland decided to implement Pillar Two by means of a constitutional amendment which came into force on January 1, 2024. However, the Swiss government decided to defer the implementation of the Income Inclusion Rule (IIR).

Based on a preliminary assessment the Group may be exposed to BEPS Pillar 2 top-up taxes in four countries once all regulations have been fully implemented. These four countries together accumulate less than 5.0% of the Groups profit before tax. However, as Switzerland has not yet introduced the Income Inclusion Rule (IIR) and the four countries not yet a Qualified Domestic Minimum Top-up Tax (QDMTT), there should not be a material top-up tax exposure for the year 2024.

(iv) Retirement Benefit Obligations

The present value of the pension obligations depends on a number of factors that are determined on an actuarial basis using a number of assumptions. The assumptions used in determining the net cost (income) for pensions include the discount rate. Any changes in these assumptions will impact the carrying amount of the retirement benefit assets or obligations (Note 26).

(v) Measurement of Fair Value

A number of the Group's accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities.

Further information about the assumptions made in measuring fair values is included in Note 30 Acquisitions and disposals and Note 33 Financial instruments.

(s) Exchange Rates Applied

The financial statements of foreign subsidiaries are drawn up in local currency and translated into Swiss francs for consolidation purposes. The following most significant exchange rates were applied:

	Statement of financial position year-end rates	Statement of financial position year-end rates	Income statement average rates	Income statement average rates
Currency	2023	2022	2023	2022
1 AUD	0.574	0.628	0.597	0.663
1 CNY	0.118	0.133	0.127	0.142
1 EUR	0.930	0.986	0.972	1.006
1 GBP	1.072	1.114	1.117	1.181
1 HKD	0.108	0.119	0.115	0.122
100 JPY	0.595	0.702	0.639	0.726
100 KRW	0.065	0.073	0.069	0.074
100 MMK	0.031	0.040	0.043	0.050
1 MYR	0.183	0.211	0.197	0.217
1 PHP	0.015	0.017	0.016	0.018
1 SGD	0.638	0.689	0.669	0.693
1 THB	0.025	0.027	0.026	0.027
1 TWD	0.027	0.030	0.029	0.032
1 USD	0.841	0.924	0.898	0.955
1,000 VND	0.035	0.039	0.038	0.041

3. Segment Information

2023 by Business Unit
in CHF millions	Healthcare	Consumer Goods	Performance Materials	Technology	Other / Elimination	Total
Sale of goods	5,433.5	3,328.2	1,433.6	498.1	-	10,693.4
Other services	144.7	187.3	6.1	34.5	-	372.6
Net sales	5,578.2	3,515.5	1,439.7	532.6	-	11,066.0
Operating profit (EBIT)	155.9	66.9	116.0	36.0	(68.9)	305.9
Additions of property, plant and equipment	9.3	7.0	2.1	7.2	5.9	31.5
Additions of intangible assets	16.6	1.3	1.3	-	2.0	21.2
Depreciation, amortization and impairment	37.2	50.4	14.7	9.7	20.1	132.1
of which impairment	-	4.5	-	-	-	4.5
of which right-of-use assets	19.4	34.2	2.6	2.4	13.4	72.0
Investments in associates and joint ventures	-	-	0.4	7.5	72.3	80.2
Share of profit and loss of associates and joint ventures1	-	-	-	4.6	(10.3)	(5.7)
Number of employees (full-time equivalents)	8,029	13,287	1,570	1,748	2,428	27,062

Other includes an impairment of CHF 4.2 million relating to the investment in aCommerce (Note 19).

2023 country information
in CHF millions	Net sales third parties1	Non-current assets2
Thailand	3,331.0	150.3
Malaysia	1,507.4	93.1
Taiwan	1,141.5	68.4
Hong Kong	877.5	29.2
Australia	347.3	148.6
Switzerland (domicile)	148.9	120.8
United States	136.5	236.2
Other countries	3,575.9	424.3
Group Total	11,066.0	1,270.9

Net sales of an individual country are allocated based on the entities located in the respective country.

Non-current assets exclude financial assets, deferred tax assets and retirement benefit assets.

2022 by Business Unit
in CHF millions	Healthcare	Consumer Goods	Performance Materials	Technology	Other / Elimination	Total
Sale of goods	5,486.5	3,484.1	1,455.3	477.0	-	10,902.9
Other services	150.4	224.6	6.1	36.2	-	417.3
Net sales	5,636.9	3,708.7	1,461.4	513.2	-	11,320.2
Operating profit (EBIT)	146.2	86.9	112.2	33.2	(59.3)	319.2
Additions of property, plant and equipment	15.0	7.8	5.9	7.4	7.7	43.8
Additions of intangible assets	43.7	0.7	1.3	0.1	2.5	48.3
Depreciation and amortization	34.9	52.5	8.2	9.9	21.0	126.5
of which right-of-use assets	20.2	37.8	2.5	3.2	13.7	77.4
Investments in associates and joint ventures	-	-	0.3	7.9	91.1	99.3
Share of profit and loss of associates and joint ventures	-	-	-	2.7	(2.8)	(0.1)
Number of employees (full-time equivalents)	7,923	17,498	1,622	1,680	2,354	31,077

2022 country information
in CHF millions	Net sales third parties1	Non-current assets2
Thailand	3,336.4	185.6
Malaysia	1,580.4	112.2
Taiwan	1,231.3	75.5
Hong Kong	976.3	42.3
Australia	391.0	134.1
Switzerland (domicile)	140.3	127.5
United States	50.7	274.0
Other countries	3,613.8	445.5
Group Total	11,320.2	1,396.7

Net sales of an individual country are allocated based on the entities located in the respective country.

Non-current assets exclude financial assets, deferred tax assets and retirement benefit assets.

The Group is organized on a worldwide basis into four Business Units that reflect the operating segments according to IFRS 8:

DKSH Business Unit Healthcare is the leading Market Expansion Services provider for healthcare companies seeking to grow their business in Asia. Custom-made offerings comprise registration, regulatory services, market entry studies, importation, customs clearance, marketing and sales, physical distribution, invoicing and cash collection. Products available through DKSH Healthcare include ethical pharmaceuticals, consumer health and over-the-counter (OTC) products, as well as medical devices.

DKSH Business Unit Consumer Goods is Asia's leading Market Expansion Services provider with a focus on fast moving consumer goods, food services, luxury goods and lifestyle products, as well as hair and skin cosmetics. The Business Unit's comprehensive Market Expansion Services extend from product feasibility studies and registration to importation, customs clearance, marketing and merchandising, sales, warehousing, physical distribution, invoicing, cash collection and after-sales services.

DKSH Business Unit Performance Materials is a leading specialty chemicals distributor and provider of Market Expansion Services for performance materials, covering Europe, North America and the whole of Asia Pacific. The Business Unit sources, markets and distributes a wide range of specialty chemicals and ingredients for pharmaceutical, personal care, food & beverage, as well as various industrial applications.

DKSH Business Unit Technology is the leading provider of Market Expansion Services covering a broad range of capital investment goods and analytical instruments. The Business Unit offers total solutions in the areas of infrastructure, industrial materials and supplies, precision and textile machinery, semiconductors, photovoltaic and electronics, agriculture, hospitality as well as specialized industrial applications.

"Other" includes Corporate Center functions, including management, finance, administration and IT. Some costs of "Other" are charged to the Business Units, and the allocation is based on specific allocation keys set up in management service agreements between the corporate entities and the subsidiaries. The unallocated costs are reflected in the operating result (EBIT) in "Other."

There are generally very limited transactions between the Business Units and between the regions. The majority of costs relating to a given Business Unit/region are directly incurred by the segment/ region to which they relate. Country central costs such as administration and IT are allocated to the Business Units.

4. Net Sales

Net sales by category:

in CHF millions	2023	2022
Sale of goods	10,693.4	10,902.9
Other services	372.6	417.3
Net sales	11,066.0	11,320.2

5. Other Income

in CHF millions	2023	2022
Supplier compensation	2.7	9.0
Government grants	1.2	4.4
Other	18.8	18.7
Total other income	22.7	32.1

The nature of the government grants principally relates to wage subsidies under job support schemes in various countries. Government grants were recognized in the income statement on a systematic basis over the periods in which the entity recognizes expenses for the related costs for which the grants are intended to compensate.

6. Employee Benefit Expenses

in CHF millions	2023	2022
Salaries and bonuses	536.9	542.0
Sales and other commissions	47.1	51.6
Social security costs	30.9	31.5
Temporary staff	29.9	32.4
Expenses for defined contribution pension plans	24.1	24.3
Expenses for defined benefit pension plans (Note 26)	5.2	6.7
Staff training costs	2.1	2.6
Other personnel expenses	79.6	84.4
Total employee benefit expenses	755.8	775.5
Number of employees (full-time equivalents)	27,062	31,077

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7. Other Operating Expenses

in CHF millions	2023	2022
Logistics and distribution costs	190.3	216.7
Selling costs	82.5	91.5
Travel and entertainment	42.1	38.1
Information technology	34.1	34.0
Expense for short-term leases, low-value assets and variable lease payments	15.3	17.2
Utilities	15.0	14.6
Communication	11.3	11.9
Consulting services	9.5	11.2
Fees and royalties	3.3	2.8
Other	67.4	67.6
Total other operating expenses	470.8	505.6

8. Net Finance Result

in CHF millions	2023	2022
Interest income on bank deposits	5.0	2.4
Income from financial instruments 1	8.0	-
Income from revaluation of contingent consideration liabilities	1.8	-
Financial income	14.8	2.4
Net foreign exchange result	(15.1)	(8.9)
Interest expenses on bank borrowings	(26.0)	(14.3)
Interest expenses on lease liabilities	(12.5)	(11.7)
Expense from financial instruments 1	-	(0.7)
Expense from revaluation of contingent consideration liabilities	(0.8)	(1.2)
Financial expenses	(54.4)	(36.8)
Net finance result	(39.6)	(34.4)

Fair value change of convertible loans in 2023 (Note 33).

9. Income Tax Expenses

in CHF millions	2023	2022
Current income tax	79.5	86.8
Adjustments in respect of current income tax of previous years	2.2	0.7
Deferred tax	(7.3)	(10.4)
Total income tax expenses	74.4	77.1

The income tax expense of the Group differs from the amount that would arise applying the applicable income tax rate as follows:

in CHF millions	2023	2022
Profit before tax	264.3	284.7
Applicable income tax based on 22.0% (2022: 21.7%)	58.0	61.7
Tax effects relating to prior years	2.2	0.7
Impact of tax rate changes	(0.4)	0.3
Tax effects of WHT/foreign tax not recoverable	6.0	17.9
Tax effect on non-deductible expenses	3.4	6.4
Tax effect of income that is not taxable	(3.8)	(2.5)
Tax effects related to tax losses and tax credits1	4.4	(9.1)
Others	4.6	1.7
Total income tax expenses	74.4	77.1

In 2022, the Group initiated and executed an internal reorganization leading to additionally recognized tax losses.

The applicable income tax rate is the weighted average of the tax rates of the respective individual tax jurisdictions. Due to the different weights of the results of the Group companies and respective local tax rates, the calculated income tax rate has changed.

10. Cash and Cash Equivalents

in CHF millions	2023	2022
Cash at bank and on hand	574.1	631.4
Short-term deposits	113.1	5.0
Total cash and cash equivalents	687.2	636.4

11. Trade Receivables

The aging of trade receivables is as follows:

in CHF millions	Not overdue	Up to 3 months overdue	Between 3 and 6 months overdue	Between 6 and 9 months overdue	Between 9 and 12 months overdue	More than 12 months overdue	Total
As of December 31, 2023
Loss rate	0.1%	1.1%	6.5%	24.3%	52.4%	100.0%
Total trade receivable – gross	1,659.1	153.4	26.3	7.0	2.1	5.8	1,853.7
Loss allowance	(1.0)	(1.7)	(1.7)	(1.7)	(1.1)	(5.8)	(13.0)
Total trade receivable – net							1,840.7
As of December 31, 2022
Loss rate	0.1%	1.0%	7.2%	27.9%	61.5%	100.0%
Total trade receivable – gross	1,804.9	198.1	27.7	6.1	2.6	7.1	2,046.5
Loss allowance	(1.2)	(2.0)	(2.0)	(1.7)	(1.6)	(7.1)	(15.6)
Total trade receivable – net							2,030.9

Movements on the Group loss allowance of trade receivables are as follows:

in CHF millions	2023	2022
As of January 1	15.6	17.3
Loss allowance	3.7	2.5
Receivables written off	(4.8)	(3.4)
Exchange differences	(1.5)	(0.8)
As of December 31	13.0	15.6

The expense for loss allowance is included in selling costs as part of other operating expenses.

12. Financial Assets

in CHF millions	2023	2022
Deposits to third parties	19.0	21.0
Convertible loan at fair value through profit and loss1	17.0	10.3
Loans to associates1	3.0	0.1
Total financial assets	39.0	31.4

Relates to the secured notes issued to aCommerce (Note 19).

Details of financial assets at fair value are as follows:

in CHF millions	Fair value through profit and loss	Fair value through other comprehensive income	Total
As of January 1, 2022	11.1	1.7	12.8
Fair value change	(0.7)	(0.3)	(1.0)
Disposal	-	(1.1)	(1.1)
Exchange differences	(0.1)	(0.3)	(0.4)
As of December 31, 2022	10.3	-	10.3
Fair value change1	8.0	-	8.0
Exchange differences	(1.3)	-	(1.3)
As of December 31, 2023	17.0	-	17.0

Revaluation of the convertible loan at fair value through profit and loss (Note 19 and Note 33).

13. Inventories

in CHF millions	2023	2022
Raw materials	24.9	27.8
Work in progress	4.6	5.0
Finished goods	1,151.4	1,284.2
Total inventories – gross	1,180.9	1,317.0
Provision for obsolete and slow moving stock	(42.9)	(39.7)
Total inventories	1,138.0	1,277.3

Details of change in impairment for inventories:

in CHF millions	2023	2022
As of January 1	39.7	43.3
Increase in provision for inventories	41.2	31.0
Unused amount reversed	(27.7)	(23.4)
Utilized during the year	(6.4)	(9.0)
Exchange differences	(3.9)	(2.2)
As of December 31	42.9	39.7

14. Prepaid Expenses and Contract Assets

in CHF millions	2023	2022
Prepaid expenses	23.5	10.0
Contract assets	8.5	15.0
Total prepaid expenses and contract assets	32.0	25.0

Contract assets primarily relate to the Group's rights to consideration for projects completed but not billed due to the final acceptance of the customer being outstanding. There was no impact on contract assets as a result of acquisitions. The contract assets are transferred to receivables when the rights become unconditional. This usually occurs when the Group is entitled to issue an invoice to the customer.

15. Intangible Assets

in CHF millions	Trademarks	Client contracts	Software, Others 1	Goodwill	Total
Cost
As of January 1, 2022	64.0	68.7	64.1	338.0	534.8
Additions	39.3	-	9.0	-	48.3
Reclassifications	-	-	6.7	-	6.7
Acquisitions	-	141.3	0.6	290.1	432.0
Disposals	(1.1)	-	(0.5)	-	(1.6)
Exchange differences	(0.4)	(7.5)	(3.2)	(31.9)	(43.0)
As of December 31, 2022	101.8	202.5	76.7	596.2	977.2
Accumulated amortization and impairments
As of January 1, 2022	(40.6)	(40.1)	(53.0)	(6.3)	(140.0)
Amortization	(2.0)	(12.1)	(4.3)	-	(18.4)
Disposals	1.1	-	0.5	-	1.6
Exchange differences	0.3	2.2	2.0	0.5	5.0
As of December 31, 2022	(41.2)	(50.0)	(54.8)	(5.8)	(151.8)
Net book value
As of January 1, 2022	23.4	28.6	11.1	331.7	394.8
As of December 31, 2022	60.6	152.5	21.9	590.4	825.4
Cost
As of January 1, 2023	101.8	202.5	76.7	596.2	977.2
Additions	15.0	1.2	5.0	-	21.2
Reclassifications	1.6	-	(1.6)	-	-
Acquisitions2	-	11.8	0.8	19.0	31.6
Disposals	-	(2.0)	(1.3)	(4.0)	(7.3)
Exchange differences	(5.5)	(16.5)	(9.1)	(45.2)	(76.3)
As of December 31, 2023	112.9	197.0	70.5	566.0	946.4
Accumulated amortization and impairments
As of January 1, 2023	(41.2)	(50.0)	(54.8)	(5.8)	(151.8)
Amortization	(3.9)	(16.5)	(4.0)	-	(24.4)
Impairments	-	-	-	(3.9)	(3.9)
Disposals	-	2.0	1.0	2.9	5.9
Exchange differences	0.8	5.1	6.9	0.6	13.4
As of December 31, 2023	(44.3)	(59.4)	(50.9)	(6.2)	(160.8)
Net book value
As of January 1, 2023	60.6	152.5	21.9	590.4	825.4
As of December 31, 2023	68.6	137.6	19.6	559.8	785.6

Principally relates to software and intangible assets under construction.

The Group has no intangible assets with indefinite useful lives as of December 31, 2023, and December 31, 2022, other than Goodwill.

Includes a reduction of goodwill relating to prior year acquisitions of CHF 7.8 million (Note 30).

Impairment Tests for Goodwill

Goodwill impairment reviews have been conducted for all goodwill items. Goodwill from acquisitions of local businesses has been allocated to the CGUs in the respective country which are expected to benefit from synergies of the business combination.

The recoverable amount of a CGU is determined based on value-in-use calculations. These calculations use free cash flow projections for the next five years based on financial budgets and economic growth rates approved by the Executive Committee.

The following key assumptions for value-in-use calculations were applied in 2023:

in CHF millions	Country	Segment	Goodwill amount	Pre-tax discount rates	Growth rates
Cash-generating unit
Terra Firma	United States	Performance Materials	152.5	14.3%	2.1%
Auric	Malaysia	Consumer Goods	62.8	14.8%	2.4%
Refarmed Group	Switzerland	Performance Materials	47.2	10.8%	1.0%
Hahn	Australia	Healthcare	38.8	16.0%	2.6%
SACOA	Australia	Performance Materials	27.3	16.8%	2.6%
Siber Hegner	Various	Performance Materials	23.5	13.0%	1.6%
DNIV	Singapore	Technology	22.2	13.0%	2.0%
CTD	Australia	Consumer Goods	17.8	16.0%	2.6%
Zeus	Spain, Portugal	Performance Materials	13.8	14.8%	1.7%
SPC	Thailand	Technology	11.9	12.9%	2.0%
Georg Breuer	Germany	Performance Materials	11.6	13.8%	2.0%
Crossmark	Australia	Consumer Goods	11.0	16.0%	2.6%
Partizan1	Australia	Healthcare	10.1	16.0%	2.6%
Siber Hegner	Various	Technology	10.1	13.3%	2.0%
Dasico & Jennow	Denmark	Performance Materials	9.9	13.5%	2.0%
Bio-Strategy1	Australia	Technology	9.8	16.0%	2.6%
Staerkle & Nagler	Switzerland	Performance Materials	9.4	10.8%	1.0%
Bosung	Korea	Technology	7.8	13.6%	2.0%
CS&Company1	New Zealand	Consumer Goods	6.9	17.3%	2.0%
Auric	Singapore	Consumer Goods	6.2	13.0%	2.0%
Europ	Cambodia	Healthcare	5.5	21.5%	3.0%
HTBA	Spain	Performance Materials	5.5	14.8%	1.7%
Primatek	Indonesia	Technology	5.4	18.3%	2.5%
Electcables	Australia	Technology	5.0	16.6%	2.6%
Wicaksana	Indonesia	Consumer Goods	3.6	16.8%	2.5%
Other CGUs	Various	Various	24.2	10.6-18.5%	1.1-4.0%
Total			559.8

Acquired in 2023.

Based on the annual goodwill impairment test, the Group recognized a partial impairment of goodwill relating to its CGU Wicaksana recognizing a loss of CHF 3.9 million in the Business Unit Consumer Goods in 2023 (2022 no impairment was recognized). The updated cash flow projections relating to the CGU reflected a decreased demand leading to the impairment. The impairment test resulted in a recoverable amount for Wicaksana of CHF 31.1 million applying a discount rate of 16.8% (2022: 16.7%) respectively.

The outcome of impairment testing is sensitive to variations in estimates and assumptions. Variations in estimates and assumptions have the following effect on the recoverable amount calculations (all else equal):

For the CGU Wicaksana an increase in the discount rate of 1% point would lead to an impairment of CHF 7.5 million, a lowered revenue projections for 2024 and thereafter by 10% would result in an impairment of CHF 6.2 million and reduced projections of EBIT by 5% during forecast period 2024-2028 would result in an impairment of CHF 6.2 million.

All other CGUs, an increase in the discount rate of 1% point, a lowered revenue projections for 2024 and thereafter by 10% and reduced projections of EBIT by 5% during forecast period 2024-2028 would not have any impairment effect on the recoverable amount calculations.

The following key assumptions for value-in-use calculations were applied in 2022:

in CHF millions	Country	Segment	Goodwill amount	Pre-tax discount rates	Growth rates
Cash-generating unit
Terra Firma1	United States	Performance Materials	175.1	11.3%	2.0%
Auric	Malaysia	Consumer Goods	72.1	15.2%	2.5%
Refarmed Group1	Switzerland	Performance Materials	47.1	11.1%	1.0%
Hahn	Australia	Healthcare	42.4	15.5%	2.5%
SACOA	Australia	Performance Materials	30.3	16.1%	2.5%
DNIV1	Singapore	Technology	24.0	13.0%	1.5%
Siber Hegner	Various	Performance Materials	23.5	12.4%	1.4%
CTD	Australia	Consumer Goods	19.5	15.2%	2.5%
Zeus	Spain, Portugal	Performance Materials	14.6	14.1%	1.7%
SPC	Thailand	Technology	13.0	12.8%	2.0%
Georg Breuer1	Germany	Performance Materials	12.7	13.3%	2.0%
Crossmark	Australia	Consumer Goods	12.0	15.2%	2.5%
Dasico & Jennow	Denmark	Performance Materials	10.5	12.8%	2.0%
Siber Hegner	Various	Technology	10.1	12.1%	1.5%
Staerkle & Nagler	Switzerland	Performance Materials	9.4	11.1%	1.0%
Bosung	Korea	Technology	8.9	13.7%	2.0%
Wicaksana	Indonesia	Consumer Goods	8.0	16.7%	2.9%
Auric	Singapore	Consumer Goods	6.7	13.0%	1.5%
Europ	Cambodia	Healthcare	6.1	19.1%	3.0%
Primatek	Indonesia	Technology	5.8	18.2%	2.9%
HTBA	Spain	Performance Materials	5.8	14.1%	1.7%
Electcables	Australia	Technology	5.5	15.5%	2.5%
Other CGUs	Various	Various	27.3	10.1-19.1%	1.4-4.0%
Total			590.4

Acquired in 2022.

Based on the annual goodwill impairment test, no impairment was recognized in 2022.

The outcome of impairment testing is sensitive to variations in estimates and assumptions. Variations in estimates and assumptions have the following effect on the recoverable amount calculations (all else equal):

• A 1% point increase in the discount rate would result in an impairment of CHF 3.9 million of which CHF 3.2 million relates to Wicaksana, CHF 0.3 million to Electcables, CHF 0.3 million to Primatek and CHF 0.1 million to Other CGUs.
• Lowered revenue projections for 2023 and thereafter by 10% would result in an impairment of CHF 2.6 million which relates to Wicaksana.
• Reduced projections of EBIT by 5% during forecast period 2023–2027 would result in an impairment of CHF 1.9 million of which CHF 1.6 million relates to Wicaksana, CHF 0.2 million to Primatek and CHF 0.1 million to Other CGUs.

16. Other Receivables

in CHF millions	2023	2022
Supplier accounts receivables	203.0	237.8
VAT and other taxes receivables	60.8	51.5
Advances and deposits	57.2	65.5
Derivative financial instruments	5.8	5.5
Other	4.1	5.3
Total other receivables	330.9	365.6

17. Property, Plant, and Equipment

	Land, buildings/	Machinery/	Furniture/	IT/ comm		Assets under
in CHF millions	leasehold 1	tools	fixtures	unication	Vehicles	construction	Total
Cost
As of January 1, 2022	118.3	69.3	90.9	53.4	13.1	21.0	366.0
Additions	10.3	10.0	8.2	7.8	0.8	6.7	43.8
Reclassifications	6.9	0.3	-	-	-	(13.9)	(6.7)
Acquisitions	3.9	0.2	0.4	0.1	0.1	-	4.7
Disposals	(6.4)	(4.5)	(6.4)	(3.1)	(4.1)	-	(24.5)
Exchange differences	(11.0)	(3.7)	(4.2)	(2.9)	(0.4)	(1.7)	(23.9)
As of December 31, 2022 Accumulated depreciation and impairments	122.0	71.6	88.9	55.3	9.5	12.1	359.4
As of January 1, 2022	(44.0)	(45.3)	(65.8)	(44.1)	(11.2)	-	(210.4)
Depreciation	(7.4)	(8.1)	(8.5)	(5.8)	(0.9)	-	(30.7)
Disposals	4.5	3.9	6.0	3.1	3.9	-	21.4
Exchange differences	6.2	3.0	3.3	2.1	0.3	-	14.9
As of December 31, 2022	(40.7)	(46.5)	(65.0)	(44.7)	(7.9)	-	(204.8)
Net book value
As of January 1, 2022	74.3	24.0	25.1	9.3	1.9	21.0	155.6
As of December 31, 2022	81.3	25.1	23.9	10.6	1.6	12.1	154.6
Cost
As of January 1, 2023	122.0	71.6	88.9	55.3	9.5	12.1	359.4
Additions	6.6	9.5	5.0	5.8	0.6	4.0	31.5
Reclassifications	9.5	0.7	0.5	1.6	-	(12.3)	-
Acquisitions	1.0	2.7	0.8	0.5	-	-	5.0
Divestments	-	-	(0.4)	(0.6)	-	-	(1.0)
Disposals	(3.2)	(3.2)	(6.0)	(5.0)	(2.8)	-	(20.2)
Exchange differences	(16.6)	(8.1)	(9.5)	(6.5)	(0.9)	(0.7)	(42.3)
As of December 31, 2023	119.3	73.2	79.3	51.1	6.4	3.1	332.4
Accumulated depreciation and impairments
As of January 1, 2023	(40.7)	(46.5)	(65.0)	(44.7)	(7.9)	-	(204.8)
Depreciation	(8.3)	(8.5)	(7.8)	(6.0)	(0.6)	-	(31.2)
Impairments	(0.2)	(0.1)	(0.3)	-	-	-	(0.6)
Divestments	-	-	0.1	0.5	-	-	0.6
Disposals	2.5	2.5	5.9	4.1	2.7	-	17.7
Exchange differences	9.7	5.5	8.3	5.2	0.8	-	29.5
As of December 31, 2023	(37.0)	(47.1)	(58.8)	(40.9)	(5.0)	-	(188.8)
Net book value
As of January 1, 2023	81.3	25.1	23.9	10.6	1.6	12.1	154.6
As of December 31, 2023	82.3	26.1	20.5	10.2	1.4	3.1	143.6

Includes CHF 32.3 million as per December 31, 2023 (2022: CHF 35.2 million) of land which is not depreciated.

No bank borrowings are secured with assets of property, plant and equipment as of December 31, 2023 and 2022.

18. Leases

The Group has lease contracts for various items of property, vehicles and equipment used in its operations. Leases of properties generally have lease terms between 3 and 15 years, while motor vehicles and equipment generally have lease terms between 3 and 5 years. The Group's obligations under its leases are secured by the lessor's title to the leased assets. Generally, the Group is restricted from assigning and subleasing the leased assets and therefore income from leasing is insignificant. There are several lease contracts that include extension and termination options and variable lease payments. Some leases provide for additional rent payments that are based on changes in local price indices.

The table below analyzes the carrying amounts of right-of use assets recognized and the movements during the periods:

in CHF millions	Properties	Vehicles	Equipment	Total
As of January 1, 2022	259.3	11.4	3.2	273.9
Depreciation	(71.6)	(4.3)	(1.5)	(77.4)
Additions	126.9	2.9	1.3	131.1
Acquisitions	0.9	-	-	0.9
Exchange differences	(10.8)	(0.2)	(0.1)	(11.1)
As of December 31, 2022	304.7	9.8	2.9	317.4
Depreciation	(66.7)	(3.9)	(1.4)	(72.0)
Additions	36.5	3.2	0.9	40.6
Acquisitions	4.1	-	-	4.1
Divestments	(0.4)	-	-	(0.4)
Exchange differences	(27.1)	(0.9)	(0.2)	(28.2)
As of December 31, 2023	251.1	8.2	2.2	261.5

The table below shows the carrying amounts of lease liabilities and the movements during the periods:

in CHF millions	Total
As of January 1, 2022	280.7
Additions	131.1
Acquisitions	0.9
Accretion of interest	11.7
Rent concession COVID-19	(0.4)
Repayments of lease liabilities and interest payments	(78.5)
Exchange differences	(11.6)
As of December 31, 2022	333.9
Additions	40.6
Acquisitions	4.1
Divestments	(0.4)
Accretion of interest	12.5
Repayments of lease liabilities and interest payments	(86.2)
Exchange differences	(27.4)
As of December 31, 2023	277.5
thereof current lease liabilities:
As of December 31, 2022	66.1
As of December 31, 2023	54.2

The maturity analysis of lease liabilities is disclosed in Note 33.

Amounts recognized in the income statement are as follows:

in CHF millions	2023	2022
Depreciation expense of right-of use assets	(72.0)	(77.4)
Interest expense on lease liabilities	(12.5)	(11.7)
Expense relating to short-term leases	(12.5)	(12.8)
Variable lease payments	(2.6)	(3.9)
Expenses relating to leases of low-value assets	(0.2)	(0.5)
Rent concessions COVID-19	-	0.4
Total amount recognised in the income statement	(99.8)	(105.9)

The Group had total cash outflows for leases of CHF 101.1 million in 2023 (2022: CHF 97.1 million). The Group had non-cash additions to right-of-use assets and lease liabilities of CHF 40.6 million in 2023 (2022: CHF 131.1 million). The future cash outflows relating to leases that have not yet commenced are as follows:

in CHF millions	2023	2022
Not later than 1 year	0.7	16.5
Later than 1 year and not later than 5 years	2.5	31.1
Later than 5 years	-	0.9
Total commitments not yet commenced	3.2	48.5

19. Investments in Associates

The investments in associates are as follows:

Company Ownership in %	Country of incorporation	2023	2022
Kulara Holdings Pte Ltd., Singapore	Singapore	30.0	30.0
aCommerce Group Ltd., Hong Kong	Hong Kong	21.5	21.5

The Group's share of net asset and profit for the year relating to associates, included in the consolidated statement of financial position and income statement, are as follows:

in CHF millions	aCommerce	Other associ ates	Total
As of January 1, 2022	84.2	25.1	109.3
Reclassification 1	-	(18.0)	(18.0)
Acquisitions	-	0.3	0.3
Loss on sale of shareholdings	-	(0.1)	(0.1)
Share of results	(3.5)	0.7	(2.8)
Exchange differences	0.4	0.2	0.6
At December 31, 2022	81.1	8.2	89.3
Share of results 2	(11.2)	0.9	(10.3)
Exchange differences	(7.3)	(1.1)	(8.4)
At December 31, 2023	62.6	8.0	70.6

Reclass related to Bovet to Assets classified as held for sale. The disposal of the asset is delayed due to factors in the sales process beyond the Group's control. The investment continues to be held for sale at December 31, 2023.

In addition to the equity investment in aCommerce, the Group has also investments in convertible notes and secured notes (Note 12). Due to unplanned additional need of financing and the related restructuring of aCommerce, management identified a triggering event for impairment and performed an impairment test in accordance with the requirements of IAS 36. The recoverable amount has been determined based on the fair value less cost of disposal applying different possible scenarios. Amongst various scenarios, two relevant scenarios were identified, and probability weighted (50:50): A trade sale in 2024 or a trade sale in 2025. The valuation was determined based on aCommerce's revenue forecast and market multiples determined by management applying peer information. Based on the Group's assessment an impairment charge of CHF 4.2 million relating to the investment in aCommerce has been recognised and has been presented in the line item «Share of profit and loss of associates and joint ventures» in the Consolidated income statement. The investment is part of Other/Elimination in the Segment information. The scenarios applied are based on observable revenue multiples (Level 3 input) ranging from 0.8 to 1.0. The discount rate applied is 13.5%. Sensitivity to forecasted revenue scenarios (low: range 0.6 to 0.8) and (high: range 0.9 to 1.1) would lead to an impairment of CHF 20.1 million and CHF 1.8 million respectively. The revaluation of the Group's investment in convertible notes, measured at FVPL, resulted in a gain of CHF 8.0 million recorded in the Financial income. The secured notes remain unchanged (Note 12).

Includes an impairment charge of CHF 4.2 million.

aCommerce represents an omnichannel e-commerce enabler and provides B2C solutions for e-commerce in Southeast Asia. Services include online store and brand management, digital marketing, customer service management, supply chain management & fulfillment. aCommerce helps brands sell online through e-commerce platforms & other online channels. aCommerce is a B2C service provider for the Group in Southeast Asia.

Summarized financial information of aCommerce:

in CHF millions	2023	2022
Current assets	62.8	59.5
Non-current assets	21.9	23.9
Total assets	84.7	83.4
Current liabilities	(81.6)	(59.8)
Non-current liabilities	(71.5)	(63.0)
Total liabilities	(153.1)	(122.8)
Total equity	(68.4)	(39.4)
Net sales	230.3	247.9
Loss after tax	(31.4)	(13.6)
Other comprehensive income	(2.0)	(1.0)
Total comprehensive income	(33.4)	(14.6)
Reconciliation of the carrying amount
in CHF millions	2023	2022
Share held by the Group in the equity of aCommerce	(14.8)	(8.6)
Goodwill and other intangible assets	77.4	89.7
Carrying amount of aCommerce	62.6	81.1

20. Interest in Joint Ventures

The Group's interests in joint ventures are as follows:

Company Ownership in %	Country of incorporation	2023	2022
Cummins Diethelm Ltd., Bangkok	Thailand	50.0	50.0
Cummins DKSH Vietnam LLC, Ho Chi Minh City	Vietnam	50.0	50.0
Cummins DKSH (Singapore) Pte Ltd., Singapore	Singapore	50.0	50.0
Cummins DKSH (Myanmar), Yangon	Myanmar	50.0	50.0
DKSH Klingelnberg Service Ltd., Shanghai	China	50.0	50.0

The Group's share of net asset and profit for the year relating to joint ventures, included in the consolidated statement of financial position and income statement, are as follows:

in CHF millions	2023	2022
Group's share of net assets	9.6	10.0
Group's share of profit for the year	4.6	2.7

21. Deferred Income Tax

Deferred tax assets and liabilities are recognized in the statement of financial position as follows:

in CHF millions	2023	2022
Deferred tax assets (net)	55.1	53.8
Deferred tax liabilities (net)	(28.3)	(27.0)
Net deferred tax assets	26.8	26.8

Deferred tax assets (gross):

in CHF millions	2023	2022
As of January 1	137.3	104.0
Credited/(charged) to the income statement	1.2	36.0
Credited/(charged) to other comprehensive income	0.5	0.3
Acquisitions/divestments	1.3	0.1
Exchange differences	(11.3)	(3.1)
As of December 31	129.0	137.3

Deferred tax assets (gross) relating to:

in CHF millions	2023	2022
Trade receivables	33.9	31.7
Inventories	8.0	6.8
Property, plant and equipment	3.5	3.3
Intangible assets	5.8	6.0
Other assets	1.5	4.7
Employee benefits	4.1	4.7
Lease liabilities	38.4	47.6
Provisions and other liabilities	18.9	17.4
Tax loss carryforwards and tax credits	14.9	15.1
Total deferred tax assets	129.0	137.3

The Group recognized deferred tax assets (net) of CHF 5.7 million (2022: CHF 7.3 million) regarding entities recording a net loss in current and/or previous period. The Group expects to recover the deferred tax assets (net) in future periods.

Deferred tax liabilities (gross):

in CHF millions	2023	2022
As of January 1	110.5	83.2
Charged/(credited) to the income statement	(6.1)	25.6
Charged/(credited) to other comprehensive income	2.5	(4.0)
Acquisitions/divestments	3.5	7.9
Exchange differences	(8.2)	(2.2)
As of December 31	102.2	110.5

Deferred tax liabilities (gross) relating to:

in CHF millions	2023	2022
Inventories	4.7	5.2
Property, plant and equipment	2.3	3.4
Intangible assets	18.7	15.0
Employee benefits	4.4	4.2
Right of use assets	36.0	45.2
Other assets	3.4	5.2
Provisions, other liabilities and undistributed profits	32.7	32.3
Total deferred tax liabilities	102.2	110.5

The Group has recognized deferred tax liabilities with regards to temporary differences associated with its investments in subsidiaries, associates and joint ventures of CHF 5.9 million (2022: CHF 8.0 million) due to expected distribution in the foreseeable future. The temporary differences associated with investments in the Group's subsidiaries and joint ventures, for which no distribution in foreseeable future is expected and therefore no deferred tax liability has been recognized in the periods presented, aggregate to CHF 197.3 million (2022: CHF 258.7 million).

Deferred tax assets relating to tax loss carryforwards are recognized to the extent that realization of the related tax benefit with future taxable profits is probable. The Group did not recognize deferred tax assets related to accumulated losses amounting to CHF 49.1 million (2022: CHF 39.8 million) that can be carried forward against future taxable income. These tax losses will expire as follows:

in CHF millions	2023	2022
Expiring next year	5.7	2.5
Expiring in 2 years	5.1	6.4
Expiring in 3 years	7.4	5.7
Expiring in 4 years	5.9	5.2
Expiring in 5 years	11.8	5.0
Expiring later than 5 years	2.5	0.9
No expiry	10.7	14.1
Total unrecognized tax losses	49.1	39.8

22. Borrowings

in CHF millions	2023	2022
Current
Bank overdraft	4.5	14.4
Bank borrowings	162.2	136.0
Bankers acceptance and promissory notes	45.2	4.9
Total borrowings current	211.9	155.3
Non-current
Bank loans	468.8	523.4
Total borrowings non-current	468.8	523.4
Total borrowings current and non-current	680.7	678.7
Weighted average effective interest rates on borrowings	3.5%	3.0%

As of December 31, 2023, the Group has undrawn committed and uncommitted bank borrowings and guarantee facilities amounting to CHF 909.0 million (2022: CHF 920.2 million). Bank loans and borrowings are entered into locally by subsidiaries, at commercial terms prevailing in the local environment and might be subject to standard financial and non-financial covenants.

The table below analyzes the cash and non-cash changes of current and non-current borrowings:

in CHF millions	2023	2022
As of January 1	678.7	306.4
Cash flows
Net proceeds/repayments	39.0	387.2
Non-cash changes
Acquisitions	0.0	1.9
Exchange differences	(37.0)	(16.8)
As of December 31	680.7	678.7

The cash and non-cash changes of lease liabilities are included in Note 18 and the financing cash flows for leases are presented separately as repayment of leases in the cash flow statement.

23. Other Payables, Accrued Expenses and Contract Liabilities

in CHF millions	2023	2022
Accrued expenses third parties	166.8	186.7
Prepayments and deposits received	90.3	80.3
Accrued expenses employees	76.0	82.1
VAT and other tax payables	74.4	63.3
Accrued expenses and payables advertising and promotion suppliers	53.3	61.7
Payables distribution and logistics suppliers	21.1	27.2
Contingent consideration liabilities	18.8	24.0
Contract liabilities	10.3	15.3
Derivative liabilities	8.0	9.8
Payables for repair and maintenance and tangible assets	7.1	6.9
Deferred purchase consideration	1.8	-
Other non-trade payables	38.9	31.4
Total other payables and accrued expenses	566.8	588.7

Contract liabilities relate to the advance consideration received from customers prior to the Group transferring control of products. Due to the nature of the Group's business operating cycles, amounts included in contract liabilities as at financial year end are expected to be recognized as revenue during the subsequent financial year.

24. Provisions

in CHF millions	Product warranty	Employee entitlements	Litigations/ Disputes	Others	Total
Current and non-current
As of January 1, 2023	0.7	4.3	0.9	3.1	9.0
Additions	0.1	1.2	-	0.8	2.1
Unused amount reversed	-	-	-	(0.2)	(0.2)
Utilized in current year	(0.0)	(0.5)	(0.9)	(0.4)	(1.8)
Exchange differences	(0.1)	(0.4)	-	(0.5)	(1.0)
As of December 31, 2023	0.7	4.6	(0.0)	2.8	8.1
thereof:
Current provisions	0.7	0.3	-	0.5	1.5

Product Warranty

The Group issues warranties on certain products and undertakes to repair or replace items that fail to perform satisfactorily. A provision has been recognized at the year-end for expected warranty claims based on past experience of the level of repairs and returns.

Employee Entitlements

Employee entitlements refer to termination or long-term employee benefits and are calculated on the basis of local labor laws of the respective countries. The amounts provided for are calculated using the average wage and years of service. The timing of cash outflow is uncertain.

25. Contingencies

As of December 31, 2023, the Group has outstanding corporate guarantees of CHF 6.2 million (2022: CHF 6.8 million) in favor of joint ventures. The Group considers that it is not probable that an outflow of resources embodying economic benefits will be required to settle these guarantees. Therefore, no amount has been recognized in the statement of financial position.

26. Retirement Benefit Assets and Obligations

Defined Benefit Plans in Switzerland

According to the Swiss pension law (BVG), pension plans are to be managed by independent, legally autonomous units. The defined benefit plan covers all employees in Switzerland and exceeds the minimum benefit requirements under Swiss pension law. Contributions to the plan are paid by the employees and the employer. For all employees, contributions are calculated as a percentage of contributory salary and are deducted monthly. In addition, the company pays risk contributions, which are used to finance benefits paid out in the event of death and disability, as well as to finance retirement benefits and survivors' bridging pensions. The benefits of the plan participants include retirement benefits and disability, death and survivor pensions. The plan provides a lifetime pension to members at the retirement age of 65. At retirement, a portion or the full amount can be taken as a lump sum payment. The amount of pension payable is calculated based on the conversion rate applied on the accumulated savings balance of the individual plan participant's pension account at the retirement date. The accumulated savings balance on the pension account is based on the employee and employer contributions that have been made to the pension account of each individual plan participant, as well as the interest accrued on the accumulated balance. The interest rate accrued is defined annually by the Pension Foundation Board. The investment strategy of the plan is in line with Swiss pension law, including the rules and regulations relating to diversification of plan assets. The board of trustees strives for a medium- and long-term consistency and sustainability between assets and liabilities. According to Swiss pension law, a temporary limited underfunding is permitted. However, the Pension Foundation Board is required to take the necessary measures to ensure that full funding can be expected to be restored within a period up to a maximum of ten years. Under Swiss pension law, if a pension plan became significantly underfunded on a Swiss pension law basis, additional employer and employee contributions could be required. In these situations, the risk is shared between employer and employees, and the employer is not legally obliged to cover more than 50% of the additional contributions required. The Swiss pension plan has a technical funding ratio under Swiss pension law of 111.0% (provisional) as of December 31, 2023 (2022: 106.0%), and thus it is not expected that such additional contributions will be required in the next year.

Defined Benefit Plans in Other Countries

Defined Benefit Plan in Japan

The defined benefit plan in Japan is managed by an independent, legally autonomous unit according to Japanese law. The defined benefit pension plan covers about one third of the employees in Japan and will not enroll any more employees. Contributions to the plan are paid by the employer only. Contributions are calculated as percentage of contributory salary. The benefits of the plan participants include retirement benefits, death and survivor pensions. The plan provides a ten-year pension to members at the retirement age of 62. At retirement, the employee can choose either a lump sum payment or a ten-year pension (pension option is available only for employees with more than 15 years of service). The accumulated savings balance on the pension account is based on the employer contributions that have been made to the pension account of each individual plan participant, as well as the interest accrued on the accumulated balance. A temporary limited underfunding is permitted. Once every 3 years, there is an assessment of funding according to Japanese regulations. If the pension plan is underfunded, the monthly contribution amounts are increased starting at the beginning of the following year. The pension plan has a technical funding ratio of 135.0% as of December 31, 2023 (2022: 138.0%), and thus it is not expected that additional contributions will be required in the next year.

Defined Benefit Plan in Taiwan

The defined benefit plan in Taiwan is governed under the Labor Standards Act. The pension plan covers all employees. The pension payable is calculated as percentage of contributory salary whereof a portion is paid into a fund kept on the employee's account with the Labor Bureau. Contributions to the plan are paid by the employees and the employer. The benefits of the plan participants include retirement benefits. The plan provides a lifetime pension to members at retirement age of 65 years. At retirement, a portion or the full amount can be taken as a lump sum payment. The accumulated savings balance, which corresponds to the pension payable, is based on the contributory salary percentages of each individual plan participant, as well as the interest accrued on the accumulated balances. As the contributions are in accordance with Taiwanese law, it is not expected that additional contributions will be required in the next year.

Defined Benefit Plan in Philippines

The defined benefit plan in the Philippines is governed under the Philippine statute covering pension mandates and exceeds the minimum benefit requirements under Philippine labor law. The plan is managed by a separate autonomous unit. The pension plan covers all employees. Contributions to the plan are paid by the employer. The contribution is calculated as a percentage of basic salary for all employees. This contribution covers benefits paid out in the event of retirement, death, illness or disability. The plan provides a lump sum payment to members at the retirement age of 60. The amount of pension payable is calculated based on the conversion rate of final salary and years in service at the retirement date. There is no provision for funding levels under Philippine law. As of December 31, 2023 and 2022, respectively, the pension fund had a net surplus and thus additional contributions are not expected to be made next year.

Defined Benefit Plan in Thailand

The defined benefit plan in Thailand is governed under the Labor Protection Act (No. 7) B.E. 2562 (2019) and exceeds the minimum benefit requirements under Thai pension law. According to local law, no funding of the pension liability is required. The individual pension payable is calculated based on the employee's length of service under the severance pay plan and for the gratuity pay plan, applicable for employees with employment commencement date before October 1, 2017, one-quarter of the last month's basic salary times the number of service years for each full year served. The maximum number of accumulating service years under the severance pay plan is limited to 20 years. The benefits of the plan participants include retirement benefits and retrenchment. The plan provides a lump sum payment based on the last drawn basic monthly salary at the retirement age from 55 to 60 years.

The expenses for defined benefit plans recognized in the income statement are as follows:

in CHF millions	2023	2022
Current service costs	5.6	6.9
Past service costs	(0.3)	(0.5)
Net interest cost	(0.1)	0.3
Expense for defined benefit pension plans	5.2	6.7

The funded and unfunded defined benefit obligations are as follows:

in CHF millions	2023	2022
Defined benefit obligations	(153.2)	(141.0)
thereof unfunded	(18.3)	(20.1)
Fair value of plan assets	148.8	142.9
Funded status	(4.4)	1.9
Impact of minimum funding requirement/asset ceiling	(0.6)	(19.6)
Net retirement benefit obligations recognized in the statement of financial position	(5.0)	(17.7)
Retirement benefit assets recognized in the statement of financial position	22.9	10.9
Retirement benefit obligations recognized in the statement of financial position	27.9	28.6

As of December 31, 2023, pension plans in Japan, the Philippines and the principal plan in Switzerland were in a surplus situation and other pension plans in Switzerland were in a deficit situation. The pension plan in Thailand does not include a funding requirement and the plan in Taiwan requires only partial funding.

in CHF millions	2023	2022
Switzerland
Defined benefit obligations	(120.1)	(106.0)
Fair value of plan assets	134.4	127.1
Funded status	14.3	21.1
Other countries
Defined benefit obligations	(33.1)	(35.0)
thereof unfunded	(18.3)	(20.1)
Fair value of plan assets	14.4	15.8
Funded status	(18.7)	(19.2)

The movement in present value of the defined benefit obligations are as follows:

in CHF millions	2023	2022
As of January 1	141.0	167.1
Current service cost	5.6	6.9
Past service cost	(0.3)	(0.5)
Interest cost	3.3	1.0
Remeasurements included in other comprehensive income
Actuarial (gain)/loss from the effect of changes in demographic assumptions	(0.2)	(0.5)
Actuarial (gain)/loss from the effect of changes in financial assumptions	12.9	(30.5)
Actuarial (gain)/loss from the effect of experience adjustments	2.7	10.5
Employee contributions	2.0	2.0
Benefits paid	(9.3)	(17.8)
Acquisitions	(0.3)	4.3
Exchange differences	(4.2)	(1.5)
As of December 31	153.2	141.0

The movement in the fair value of plan assets is as follows:

in CHF millions	2023	2022
As of January 1	142.9	167.4
Interest income	3.4	0.7
Remeasurements included in other comprehensive income
Return on plan assets (excluding interest income)	5.3	(19.1)
Employee contributions	2.0	2.0
Employer contributions	4.0	4.6
Benefits paid	(6.6)	(13.8)
Acquisitions	-	4.0
Exchange differences	(2.2)	(2.9)
As of December 31	148.8	142.9

The Group expects to contribute CHF 3.7 million to its defined benefit pension plans in 2023 (2022: CHF 4.5 million).

Plan assets are composed as follows:

in CHF millions	2023	2022
Cash	5.8	8.2
Investments quoted in active markets
Equity funds	32.1	30.6
Fixed-income funds	63.9	59.3
Real Estate funds	29.8	34.5
Corporate bonds	2.7	3.6
Unquoted investments
Equity investments	1.3	-
Debt investments	3.0	5.2
Real estate	10.2	1.5
Total	148.8	142.9

Pension plan assets include a property, occupied by the Group, with a market value of CHF 3.8 million (2022: 3.9 million) in the current and previous period in the Philippines.

The principal actuarial assumptions used are as follows:

in %	2023	2022
Switzerland
Discount rate
Active	1.50	2.30
Retired	1.50	2.30
Future salary increases	1.5	1.5
Mortality (Mortality tables)	BVG 2020 CMI 1.25	BVG 2020 CMI 1.25
Other countries
Discount rate	1.0–6.9	1.0–7.4
Future salary increases	2.5–4.0	2.0–5.0
Future pension increases	1.2–2.5	1.0–3.0

Assumptions regarding future mortality experience are set based on advice from actuaries, published statistics and experience in each country. The Group applies Continues Mortality Improvement (CMI) and a long-term rate of 1.25% is used for the longevity improvements.

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The life expectancy post retirement as at December 31, 2023, is as follows:

in years	2023	2022
Switzerland
Male	23.9	23.6
Female	25.5	25.2

The sensitivity of the defined benefit obligations to changes of significant assumptions as at December 31, 2023, is as follows:

in CHF millions	2023	2022
Switzerland
Discount rate (increase)/decrease by 0.5%	(7.0)/7.5	(5.5)/6.1
Rate of salary increase/(decrease) by 0.5%	0.8/(1.2)	1.1/(1.1)
Rate of pension increase/(decrease) by 0.5%	1.6/(7.8)	5.1/(5.1)
Life expectancy increase/(decrease) by 1 year	3.9/(4.1)	3.2/(3.3)

The weighted average duration of the defined benefit plan obligations as December 31, 2023, is 14.7 years (2022: 15.0 years).

27. Equity, Share Capital and Treasury Shares

	Nominal value in CHF	Total number of shares
As of January 1, 2022	0.1	65,042,963
As of December 31, 2022 and January 1, 2023	0.1	65,042,963
As of December 31, 2023	0.1	65,042,963

In 2023 and 2022, the Group had no changes in its share capital.

An ordinary dividend of CHF 2.15 per common registered share was paid in 2023 (2022: CHF 2.05 ordinary dividend). Total dividend payments amounted to CHF 139.6 million (2022: CHF 133.2 million).

The total authorized number of shares as of December 31, 2023, of DKSH Holding Ltd. is 65,042,963 (2022: 65,042,963) with a par value of CHF 0.10 per share. All issued shares are fully paid in. In 2023 the Group purchased 85,000 treasury shares for an amount of CHF 6.2 million. The Group used 83,801 treasury shares (CHF 6.4 million) for vested share-based payment awards. The Group holds 92,976 treasury shares as of December 31, 2023 (2022: 91,777).

The Ordinary General Meeting held on March 16, 2023, approved the Board of Directors' proposal to increase conditional share capital by 3,000,000 shares or CHF 0.3 million. As of December 31, 2023, the Company's conditional share capital amounts to 3,282,537 shares (2022: 282,537 shares) or CHF 0.33 million (2022: CHF 0.03 million).

At the Ordinary General Meeting scheduled for March 26, 2024, a CHF 2.25 dividend is to be proposed in respect of 2023 (2022: CHF 2.15 ordinary dividend per registered shares). These financial statements do not reflect this dividend payable, which will be accounted for in shareholders' equity as an appropriation of retained earnings in the year ending December 31, 2024. Dividends payable are not accounted for until they have been ratified at the Ordinary General Meeting.

Other reserves and retained earnings include statutorily restricted reserves of CHF 134.8 million as of December 31, 2023 (2022: CHF 141.2 million).

28. Earnings per Share

The following reflects the data used in the basic and diluted earnings per share computations for the years ending December 31, 2023:

in CHF millions	2023	2022
Profit after tax attributable to the shareholders of the DKSH Holding Ltd.	182.0	201.1
Weighted average number of outstanding shares during the year	64,956,986	64,976,148
Dilutive shares	82,737	112,144
Adjusted weighted number of shares applicable to diluted earnings per share	65,039,723	65,088,292

There have been no other transactions involving registered shares between the financial reporting date and the date of completion of these financial statements.

29. Share-based Payments

Long-term Incentive Plan (LTIP)

Every year performance share units (PSU) are granted to eligible key managers by, and at the full discretion of, the Board of Directors to provide eligible key managers of the DKSH Group with the opportunity to become shareholders of the Company, to participate in the future long-term success and prosperity of the DKSH Group and to further align long-term interests of the key managers and the DKSH Group. Each PSU is an entitlement to a maximum of 1.5 shares of the Company, provided certain performance targets are achieved during the three-year performance period and subject to the eligible managers remaining in service. In case certain predetermined performance thresholds are not met after three years, no shares of the Company will vest under the LTIP. At the end of a three-year performance period, the number of PSU's vesting is calculated by multiplying the number of PSU's granted with the vesting multiple. 60% of the vesting multiple is linked to the EBIT and 20% of the vesting multiple is linked to the Return on net operating capital (RONOC), both of the DKSH Group as reported in the Company's last annual report prior to the end of the three-year performance period. 20% of the vesting multiple depends on the share price measured as the average of the 20 days' closing share price prior to the end of the three-year performance period. The share price condition (e.g. market condition) has been factored into the grant date fair values using a Monte Carlo Simulation. The PSUs granted in 2021 and 2022 are equity settled. The PSUs granted in 2023 are mostly equity settled with a minor part cash settled. For the cash settled part the Group records a liability.

Year	Number of PSUs granted	Fair Value of PSUs1
2022	89,022	78.28
2023	100,052	70.37

in CHF.

The total expense recognized for the period relating to share-based payment transactions amounted to CHF 3.8 million (2022: CHF 5.4 million) of which CHF 3.7 million is recorded against equity and CHF 0.1 million is recorded as a liability in Other non-current liabilities in the Consolidated Statement of Financial Position.

30. Acquisitions and Disposals

Acquisitions

During the business year 2023, the Group acquired the following businesses:

Business	Country of incorporation	Equity interest acquired	Effective date	Employees (FTEs)
Partizan Worldwide Pty Limited	Australia	100%	September 29, 2023	36
CS Company Ltd	New Zealand	100%	October 2, 2023	76
Bio-Strategy Group	Australia/New Zealand	100%	December 1, 2023	110

Effective September 29, 2023, the Group purchased the shares of Partizan Worldwide Pty limited, a privately held business, based in Australia. The Partizan business represent a patient solution provider in the Australian healthcare sector and offers services such as in-home nursing and tele-health services, health coaching, support to highly specialized drugs and new medication, health technology and software development and provision of data or insights to support clinical decisions.

From the date of acquisition, the Partizan business contributed net sales amounting to CHF 1.4 million and a profit after tax of CHF 0.3 million. Assuming the business had been acquired as of January 1, 2023, the contribution for the net sales would have been CHF 5.4 million with a corresponding profit after tax of CHF 1.2 million.

Total purchase price consideration is divided into 70.0% cash payment at closing and 30.0% earn outs. Purchase consideration for Partizan of CHF 10.9 million has been paid in cash in 2023. Contingent consideration liabilities with a fair value of CHF 4.3 million based on target achievement were recognized at the acquisition date. Payments are contingent on the achievement of normalized EBITDA targets of the acquired business for the first and second 12-month period starting from the closing date. Total purchase price includes a cap at CHF 25.2 million and the contingent considerations are limited at a floor of 80.0% normalized EBITDA target. Below this floor earn out payments would be nil.

Effective October 2, 2023, the Group purchased the shares of CS Company Ltd. The CS&Co. business, based New Zealand, represents a multi-brand distributor of beauty products.

Purchase consideration for CS&Co. of CHF 21.5 million has been paid in cash in 2023.

From the date of acquisition, the business of CS&Co. contributed net sales amounting to CHF 10.5 million and a profit after tax of CHF 0.5 million. Assuming the business had been acquired as of January 1, 2023, the contribution for net sales would have been CHF 62.8 million with a corresponding profit after tax of CHF 3.1 million.

Effective December 1, 2023, the Group purchased the Bio-Strategy Group via share deal, a privately held business, based in Australia and New Zealand. The Bio-Strategy business represents a distributor of scientific instruments in Australia and New Zealand.

Purchase consideration for Bio-Strategy of CHF 17.2 million has been paid in cash in 2023. Deferred consideration of CHF 1.8 million is expected to be paid upon final closing adjustment in Q1 2024.

From the date of acquisition, the Bio-Strategy business contributed net sales amounting to CHF 3.9 million and a profit after tax of CHF 0.1 million. Assuming the business had been acquired as of January 1, 2023, the contribution for the net sales would have been CHF 46.4 million with a corresponding profit after tax of CHF 1.2 million.

The goodwill of CHF 26.8 million relates to synergies and footprint improvements. None of the goodwill is expected to be deductible for income tax purposes.

The allocation of the purchase price was based upon a preliminary valuation, and the estimates and assumptions used are subject to change within the one-year measurement period.

Refer to Note 33 for further information on the determination and sensitivity of fair value.

The fair value of the identifiable assets and liabilities relating to the acquisitions:

in CHF millions	Total fair value recognized on acquisition of Partizan World wide Pty Ltd.	Total fair value recognized on acquisition of CS Company Ltd.	Total fair value recognized on acquisition of Bio-Strategy Group	Total fair value recognized on acquisitions
Assets
Cash and cash equivalents	0.5	1.8	2.0	4.3
Trade receivables	1.0	4.2	7.0	12.2
Inventories	-	6.0	7.5	13.5
Other current assets	-	0.4	0.6	1.0
Intangible assets	5.4	3.6	3.6	12.6
Property, plant and equipment	-	1.8	0.6	2.4
Right-of-use assets	0.1	1.8	2.2	4.1
Deferred tax assets	0.1	-	1.4	1.5
Liabilities
Trade payables	0.1	1.2	6.6	7.9
Other current liabilities	0.6	1.0	3.0	4.6
Contract liabilities	-	-	2.4	2.4
Lease liabilities	0.1	1.8	2.2	4.1
Deferred tax liabilities	1.3	0.9	1.5	3.7
Net assets acquired	5.1	14.8	9.1	19.8
Goodwill on acquisitions	10.1	6.8	9.9	26.8
Purchase consideration	15.2	21.5	19.0	55.7
Contingent consideration	(4.3)	-	-	(4.3)
Deferred consideration	-	-	(1.8)	(1.8)
Purchase consideration paid in cash	10.9	21.5	17.2	49.6
Cash and cash equivalents acquired	0.5	1.8	2.0	4.3
Net cash outflow for current year acquisitions	(10.4)	(19.7)	(15.2)	(45.3)
Contingent considerations and purchase price adjustments				(16.8)
Acquisition of subsidiary net of cash				(62.1)

During 2023, the Group has settled contingent considerations relating to the acquisitions of Bosung for an amount of CHF 3.8 million (thereof fair value adjustments of CHF 0.8 million recorded under net cash flows from operating activities), Refarmed for an amount of CHF 6.3 million, DNIV for an amount of CHF 8.4 m and Acutest for an amount of CHF 0.4 m. The Group recorded net income from revaluation of contingent consideration liabilities of CHF 1.0 million in the finance result.

During 2023 the Group has received reimbursements of purchase consideration for Terra Firma and Georg Breuer based on final closing adjustments for an amount of CHF 1.3 million.

Disposals

During the business year 2023, the Group has disposed its interest in DKSH Smollan Fieldmarketing businesses in Malaysia, Thailand, Taiwan and Vietnam to the minority shareholder partner Smollan. Upon disposal, the Group has derecognized principally net working capital of CHF 9.2 million (including cash and cash equivalents of CHF 4.9 million), goodwill of CHF 1.1 million and non-controlling interest of CHF 3.9 million. Based on a sales price of CHF 4.2 million the Group has recorded a loss on sale of business of CHF 2.0 million (including recycling of currency translation adjustments of CHF 0.9 million).

Prior Year Acquisitions

During the business year 2022, the Group acquired the following businesses:

Effective October 31, 2022, the Group purchased 82.4% of the interests in Terra Firma Group, a privately held business, based in US and Canada. The Terra Firma business represents a distributor of specialty chemicals in North America.

The Group entered into the agreement to purchase the business based on an enterprise value formula on a cash and debt free basis. As part of the purchase agreement the Group paid CHF 79.5 million to settle third party debt of the Terra Firma entities and incentive payments on behalf of the sellers at closing.

As part of the purchase of the interests the Group has entered into a put call option agreement to acquire the non-controlling interest to be exercised earliest ending 2025. The Group has concluded that it does not have a present ownership interest and therefore has recognised non-controlling interests measured at their proportionate share of net assets.

Effective July 1, 2022, the Group purchased the shares of Refarmed Group. The Refarmed business, based in Switzerland provides Active Pharmaceutical Ingredients (APIs) and Finished Dosage Forms (FDFs) for international generic drug manufacturers. This includes the sourcing of the ingredients as well as providing technical and regulatory support.

Purchase consideration for Refarmed Group of CHF 63.4 million was paid in cash in 2022. Contingent consideration liabilities with a fair value of CHF 19.1 million were recognized at the acquisition date. Payments are contingent on the achievement of normalized EBITDA targets of the acquired business for the financial years ending 2022, 2023 and 2024 and include a target floor of 80.0%

Effective July 1, 2022, the Group purchased the shares of DNIV Group headquartered in Singapore. The DNIV business, active in Singapore, Malaysia, Thailand and China provides high-tech manufacturing solutions for the semiconductor and electronics industry. The business includes engineering expertise covering the entire life cycle from installation to commissioning, training, application support, repair and maintenance, and spare parts.

The total purchase price for DNIV is capped at an amount of CHF 40.7 million. An amount of CHF 28.6 million was paid in cash in 2022. Contingent consideration liabilities with a fair value of CHF 16.5 million were recognized at the acquisition date. Payments are contingent on the achievement of normalized EBITDA targets of the acquired business for 12-month periods following July 1, 2022 and 2023, the retention of key suppliers and include a target floor of 80.0%. If key suppliers are lost during specific earnout period, earnout will be nil.

Effective August 31, 2022, the Group purchased the shares of Georg Breuer GmbH. The Georg Breuer business, based in Germany represents a supplier of functional ingredients for the food industry. The business provides sustainable food solutions with a focus on vegan, organic, and gluten free, as well as salt and sugar reduction and offers value-added services to its customers, including research and development, application customization, and technical and regulatory support.

An amount of CHF 13.5 million has been paid in cash in 2022 for Georg Breuer. Contingent consideration liabilities with a fair value of CHF 5.4 million were recognized at the acquisition date. Payments are contingent on the achievement of normalized EBITDA targets of the acquired business for 12 month periods following August 31, 2022 and 2023 and include a target floor of 85.0% as well as a supplier target for year earnout represented by the retention of two specific key suppliers. If such suppliers are lost, the earnout will be nil.

The Group has closed four other smaller acquisitions during 2022.

Effective April 25, 2022, the Group purchased the business of Right Base Chemicals (RBC), a privately held business based in Shanghai. RBC primarily distributes additives, resins, and colorants for coating and ink applications in the Eastern, Central, and South-Western regions of the Chinese market.

Effective July 4, 2022, the Group purchased the shares of Acutest Systems, a privately held business based in Malaysia. Acutest Systems is a distributor of clinical diagnostic point-of-care testing analyzers, diagnostic and screening devices and instruments, and laboratory systems in Malaysia.

Effective July 1, 2022, the Group purchased the shares of Victa Food s.r.l, a privately held business based in Italy. Victa Foods represents a specialized distributor of food and nutritional supplement ingredients for the Italian market.

Effective July 29, 2022, the Group purchased the shares of JW Foods Systems GmbH, a privately held business based in Germany. JW Food Systems is a manufacturer and supplier of functional mixtures for the food industry. In close cooperation with the customer, tailor-made and market-oriented systems of food additives for meat products, fish as well as convenience products are developed.

The final goodwill of CHF 279.2 million relates to synergies and footprint improvements. With the exception of the Terra Firma goodwill, none of the other goodwill is expected to be deductible for income tax purposes.

An amount of CHF 4.1 million of external transaction cost has been expensed as incurred under other operating expenses.

The finalization of the purchase price allocation in 2023 principally resulted in a decrease of previously recorded goodwill of CHF 7.8 million, a decrease of short-term payables of CHF 5.5 million and a increase of other assets of CHF 1.0 million. A decrease of goodwill of CHF 1.3 million resulted from the reimbursements received in 2023 related to the final closing adjustments of Terra Firma and Georg Breuer.

Refer to Note 33 for further information on the determination and sensitivity of fair value.

The final fair value of the identifiable assets and liabilities relating to the following acquisitions:

in CHF millions	Total fair value recognized on acquisition of Terra Firma Group	Total fair value recognized on acquisition of Refarm Group	Total fair value recognized on acquisition of DNIV Group	Total fair value recognized on acquisition of Georg Breuer	Total fair value recognized on acquisition of RBC, Victa Food, Acutest Systems and JW Food Systems	Total fair value recognized on acquisitions
Assets
Cash and cash equivalents	7.2	6.4	7.9	0.8	1.1	23.4
Trade receivables	31.0	22.4	11.4	3.5	0.7	69.0
Inventories	31.2	2.1	3.5	-	3.5	40.3
Other current assets	1.5	0.9	6.2	4.0	1.6	14.2
Intangible assets	103.5	18.2	10.4	5.3	4.5	141.9
Property, plant and equipment	1.1	3.7	0.1	-	0.6	5.5
Right-of-use assets	0.7	-	0.1	0.1	-	0.9
Investment in associates and joint ventures	-	0.3	-	-	-	0.3
Retirement benefit assets	-	0.3	-	-	-	0.3
Deferred tax assets	-	0.1	-	-	-	0.1
Liabilities
Current borrowings	-	(1.7)	(0.2)	-	-	(1.9)
Trade payables	(12.4)	(12.5)	(9.0)	(1.5)	(0.3)	(35.7)
Other current liabilities	(1.0)	(1.1)	(7.8)	(4.2)	(0.6)	(14.7)
Lease liabilities	(0.7)	-	(0.1)	(0.1)	-	(0.9)
Deferred tax liabilities	-	(3.3)	(1.8)	(1.6)	(1.2)	(7.9)
Net assets acquired	162.1	35.8	20.7	6.3	9.9	234.8
Non-controlling interest	(29.1)	(0.4)	-	-	(1.0)	(30.5)
Goodwill on acquisitions	185.1	47.1	24.4	12.2	10.4	279.2
Purchase consideration	318.1	82.5	45.1	18.5	19.3	483.5
Contingent consideration	-	(19.1)	(16.5)	(5.4)	(1.8)	(42.8)
Settlement final closing adjustments in current year	1.0	-	0.3	-	-	1.3
Purchase consideration paid in cash in prior year	319.1	63.4	28.6	13.4	17.5	442.0
Cash and cash equivalents acquired	7.2	6.4	7.9	0.8	1.1	23.4
Net cash outflow for prior year acquisitions	(311.9)	(57.0)	(20.7)	(12.6)	(16.4)	(418.6)
Contingent considerations and purchase price adjustments						(15.0)
Acquisition of subsidiary net of cash						(433.6)

During 2022, the Group has settled contingent considerations relating to the acquisitions of Bosung for an amount of CHF 4.5 million and recorded expense from revaluation of the contingent consideration liability of CHF 0.2 million in financial expense.

During 2022, the Group has settled the contingent considerations relating to the acquisition of Sacoa for a total amount of CHF 8.0 million and CHF 0.6 million for STP and Medworkz.

31. Related Party Transactions

The following transactions and balances were with related parties in 2023:

in CHF millions	Shareholders	Associates	Joint ventures	Total
Income statement
Sales of goods and services	-	20.1	1.2	21.3
Purchases of goods and services	-	2.6	-	2.6
Depreciation expenses of right-of-use assets	0.9	-	-	0.9
Fees & royalties	0.4	-	-	0.4
Interest received	-	0.3	-	0.3
Statement of financial position
Trade Receivables	-	3.9	-	3.9
Other receivables and prepayments	-	-	0.1	0.1
Loans to related parties	-	20.0	-	20.0
Right-of-use assets	1.4	-	-	1.4
Other payables	0.1	-	-	0.1
Lease liabilities	1.4	-	-	1.4

The following transactions and balances were with related parties in 2022:

in CHF millions	Shareholders	Associates	Joint ventures	Total
Income statement
Sales of goods and services	-	15.7	0.8	16.5
Purchases of goods and services	-	2.3	0.2	2.5
Depreciation expenses of right-of-use assets	1.1	-	-	1.1
Fees & royalties	0.4	-	-	0.4
Interest received	-	0.4	-	0.4
Interest expenses relating to lease liabilities	0.1	-	-	0.1
Statement of financial position
Trade Receivables	-	4.0	-	4.0
Other receivables and prepayments	-	-	0.1	0.1
Loans to related parties	-	10.3	-	10.3
Right-of-use assets	2.4	-	-	2.4
Trade payables	-	0.2	-	0.2
Other payables	0.1	-	-	0.1
Lease liabilities	2.4	-	-	2.4

The total remuneration recognized as an expense in the reporting period for the Executive Committee and Board of Directors is as follows:

in CHF millions	2023	2022
Executive Committee	13.3	15.4
Board of Directors	2.5	2.4

The total remuneration recognized as an expense in the reporting period for the Executive Committee includes short-term employee benefits of CHF 8.1 million (2022: CHF 9.1 million), including both salary and incentive-based compensation, share-based compensation expenses of CHF 2.3 million (2022: CHF 3.4 million), post-employment benefits of CHF 0.8 million (2022: CHF 0.7 million), and long-term employee benefits of CHF 2.1 million (2022: CHF 2.2 million).

The total remuneration recognized as employee benefit expenses in the reporting period for the Board of Directors is CHF 2.5 million (2022: CHF 2.4 million). As of December 31, 2023 and 2022, no loans or any other commitments were outstanding to members of the Board of Directors and Executive Committee (refer to Note 29 for more details regarding share-based payments).

32. Commitments

On December 15, 2023, the Group signed the agreement to acquire 100.0% of the shares of Medipharm Sdn Bhd for a consideration of about CHF 12.0 million. Medipharm represents a distributor of pharmaceutical, medical devices, consumer health, personal care and nutritional products in Brunai and generates annual net sales of approximately CHF 32.5 million and profit after tax of CHF 2.3 million. The transaction is expected to close in the first quarter of 2024.

33. Financial Instruments

The Group's activities expose it to a variety of financial risks: market risk (including foreign exchange risk, interest rate risk and price risk), credit risk and liquidity risk. The Group's overall risk management program focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the financial performance of the Group. The Group uses derivative financial instruments to hedge certain exposures. The subsidiaries enter into financial derivative contracts with either Group Treasury or a local external financial counterparty. Group Treasury, in turn, covers its net exposure from these transactions with external financial counterparties.

Group Treasury holds responsibility for overseeing financial risk management together with the local finance organizations in line with the Group Treasury policy. The policy provides written principles for overall financial risk management as well as written policies covering specific areas, such as foreign exchange risk, interest rate risk, equity risk, credit risk, liquidity risk, funding strategy and structure, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.

(i) Foreign Exchange Risk

The Group is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to Euro, US Dollar and Japanese Yen. Foreign exchange risk arises from commercial transactions and recognized monetary assets and liabilities.

Foreign Exchange Risk on Commercial Transactions

Foreign exchange risk arises when committed future cash flows from commercial transactions are denominated in a currency that is not the subsidiary's functional currency. The Group companies are required to hedge their foreign exchange risk exposure arising from foreign currency cash flows that are not naturally offset by a simultaneous opposite commercial transaction in the same currency or mitigated in another way against their functional currency.

Focusing on the overall economics, rather than accounting effects of currency movements will result in timing and valuation differences between the hedge, which is taken out as the economic transaction is closed, and the underlying exposure. Furthermore, the focus on committed transactions means that the policy does not protect the local subsidiary from the potential commercial or competitive effect of medium- and longer-term shifts in exchange rates. The Group does not hold or issue derivative financial instruments for trading purposes and is not a party to leveraged instruments.

The total notional amount (outstanding gross settlement risk) and positive market value of forward FX contracts were as follows:

in CHF millions	Notional amount	Notional amount	Positive market value	Positive market value
	2023	2022	2023	2022
AA- or higher	175.6	84.5	0.9	0.9
A+, A or A-	517.0	675.3	5.0	4.6
BBB+, BBB or BBB-	2.2	4.5	-	-
Total	694.8	764.3	5.9	5.5

For derivatives revalued through income statement, the Group recorded a net gain of CHF 29.8 million (2022: net gain of CHF 25.9 million) within the net foreign exchange result to recognize the change in the fair values.

These gains and losses on derivative instruments offset the financial position revaluation of financial assets and liabilities with the exception of the amount relating to derivatives used to hedge cash flows.

In 2023, the Group recorded a net loss of CHF 45.0 million (2022: net loss of CHF 34.8 million) from revaluation of financial position items.

in CHF millions	2023	2022
Current assets	5.9	5.5
Current liabilities	(8.1)	(10.5)
Net fair value of foreign exchange contracts	(2.2)	(5.0)
Swiss Franc equivalent notional amount of derivative financial instruments	694.8	764.3

The derivative assets and liabilities relating to foreign exchange risk on commercial transactions have been included in other receivables and other payables and accrued expenses in the statement of financial position. The amount of derivative assets of CHF 5.9 million as of December 31, 2023 (2022: CHF 5.5 million) represents the Group's exposure to credit risk from derivative financial instruments.

Foreign Exchange Risk on Other Transactions

Foreign exchange risk arises from committed future cash flows of transactions, such as dividends, acquisitions or disposals, that are denominated in a currency that is not the entity's functional currency. The Group's policy is that Group companies are required to hedge their foreign exchange risk exposure arising from such foreign currency cash flows.

Foreign Exchange Risk on Monetary assets and Liabilities

Foreign exchange risk arises when recognized monetary assets or liabilities are denominated in a currency that is not the entity's functional currency. Group companies are not authorized to borrow or hold cash in a currency other than their functional currency unless such borrowings or cash holdings are the result of short-term liquidity management, regulatory restrictions or market inefficiencies.

Foreign Currency Sensitivity

The following tables demonstrate the sensitivity to a reasonably possible change in USD, EUR and JPY exchange rates, with all other variables held constant. The impact on the Group's profit before tax is due to changes in carrying amount of monetary assets and liabilities including foreign currency derivatives. The Group's exposure to foreign currency changes for all other currencies is not material.

	Change foreign currency ex
Currency	change rate	2023	2022
USD	+5%/-5%	5.6/(5.6)	8.4/(8.4)
EUR	+5%/-5%	2.6/(2.6)	3.6/(3.6)
JPY	+5%/-5%	0.1/(0.1)	0.3/(0.3)

(ii) Interest Rate Risk

The Group's income and operating cash flows are fairly independent of changes in market interest rates. The Group's cash is subject to changes in interest rates as the majority is contracted short-term at floating interest rates.

In terms of borrowing, the treasury policy dictates that, to the extent that the Group is in a net debt position, the external debt with a remaining tenor of over 12 months should at least amount to 66.6% of the maximum forecast net debt over the next 12 months period. Of the long-term debt, at least 50.0% has to be held in fixed interest instruments, which can be achieved using interest rate derivatives. However, given the low level of financial leverage, changes in interest rates do not have a significant impact on the financial standing of the Group.

As of December 31, 2023, if variable interest rates on interest-bearing borrowings had been 0.5% higher with all other variables held constant that the Group assumes to be reasonably possible, and the higher interest rates are applied to the borrowings as of December 31, pre-tax profit for the year would have been CHF 2.0 million (2022: CHF 2.4 million) lower. Assuming the higher interest rates increase the yield on interest-bearing cash and financial assets, the impact of the higher interest rates on the Group's pre-tax profit for the year will be offset by the increased income from these instruments. If interest rates on interest-bearing cash and financial assets had been 0.5% higher with all other variables held constant, and the higher interest rates are applied to the interest-bearing cash and financial assets as of December 31, 2023, pre-tax profit for the year would have been CHF 3.4 million (2022: CHF 3.2 million) higher.

(iii) Credit Risk

The Group is exposed to counterparty credit risk on financial instruments such as cash and cash equivalents, derivative assets and trade receivables.

The Group is not exposed to concentrations of credit risks on its cash and cash equivalents or derivatives. Derivative counterparties and cash transactions are limited to high-credit-quality financial institutions.

Cash and Cash Equivalents

Excess cash in operating entities is used either to reduce current bank borrowings, to deposit at the Corporate Center or to invest in short-term deposits.

The total cash balances of the Group are with institutions with the following ratings:

in CHF millions	2023	2022
AA- or higher	57.6	75.0
A+, A or A-	508.6	449.4
BBB+, BBB or BBB-	51.6	53.6
Non-investment grade/unrated	69.4	58.4
Total	687.2	636.4

Trade Receivables

Trade receivables are subject to credit limits, control and approval procedures in all the affiliated companies. Customer specific credit limits are set and monitored on an ongoing basis. The debtors are mainly internationally acting customers with own local entities with business activities in the wholesale sector and governmental institutions. None of these customers exceed 10.0% of total accounts receivable.

(iv) Liquidity Risk

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of funding through an adequate amount of credit facilities and the ability to close out market positions. Due to the dynamic nature of the underlying businesses, the Group aims to maintain flexibility in funding by keeping credit lines and cash resources available.

The Corporate Center holds a strategic liquidity reserve consisting of either cash and/or undrawn committed credit facilities. As of December 31, 2023, this strategic reserve amounted to CHF 428.5 million (2022: CHF 387.6 million) consisting of cash and the undrawn CHF 150.0 million five-year committed credit facility maturing on June 7, 2028, with an extension option for one year.

in CHF millions	2023	2022
Centrally held cash and cash equivalents	278.5	237.6
Committed credit facility	150.0	150.0
Total	428.5	387.6

The table below analyses the Group's financial liabilities as per financial reporting date. The amounts disclosed refer to the maturity of the contractual undiscounted cash flows until maturity date (including contractually agreed interest payments).

in CHF millions	Up to 1 month or on demand	1–3 months	3–12 months	1–5 years	More than 5 years	Total Cash Flows	Carrying value
As of December 31, 2023
Borrowings	97.4	50.8	77.9	491.2	-	717.3	680.7
Trade and other payables	1,103.7	853.5	391.9	-	-	2,349.1	2,349.1
Lease liabilities	6.0	11.3	52.0	162.2	86.2	317.7	277.5
Contingent considerations	-	2.5	16.4	11.2	-	30.1	29.7
Liabilities related to put options for non-controlling interests	-	-	-	52.2	-	52.2	44.8
Total	1,207.1	918.1	538.2	716.8	86.2	3,466.4	3,381.8
As of December 31, 2022
Borrowings	75.7	9.2	75.7	567.8	-	728.4	678.7
Trade and other payables	1,100.4	915.3	359.5	17.2	-	2,392.4	2,392.4
Lease liabilities	7.0	12.9	57.3	192.3	112.5	382.0	333.9
Contingent considerations	-	-	24.3	22.6	-	46.9	46.4
Liabilities related to put options for non-controlling interests	-	-	-	82.5	-	82.5	67.5
Total	1,183.1	937.4	516.8	882.4	112.5	3,632.2	3,518.9

The table below analyses the maturity of the Group's derivative financial instruments as per financial reporting date.

The amounts disclosed, refer to the contractual undiscounted cash flows until maturity date that will be settled on a gross basis.

in CHF millions	Up to 1 month or on demand	1–3 months	3–12 months	1–5 years	Over 5 years	Total
As of December 31, 2023
Forward FX contracts
Outflow	(273.7)	(218.4)	(192.1)	(7.2)	-	(691.4)
Inflow	276.3	218.6	192.8	7.1	-	694.8
As of December 31, 2022
Forward FX contracts
Outflow	(294.8)	(298.5)	(172.2)	(3.1)	-	(768.6)
Inflow	293.8	295.7	171.5	3.3	-	764.3

(v) Fair Value

The table below analyzes financial assets and liabilities by measurement category. In case of recurring fair value measurements, the specific fair value level is indicated. The different fair value levels are defined as follows:

• Level 1: The fair value of financial instruments traded in active markets (such as publicly traded derivatives, and equity securities) is based on quoted market prices at the end of the reporting period. The quoted market price used for financial assets held by the Group reflects the current bid price
• Level 2: The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates; and
• Level 3: One or more of the significant inputs is not based on observable market data.

If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value measurement is categorized in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.

The Group recognizes transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.

There were no transfers between levels 1, 2 and 3 for recurring fair value measurements during the year. The group's policy is to recognize transfers into and out of fair value hierarchy levels as at the end of the reporting period.

in CHF millions Level	2023	2022
Financial assets at fair value through profit and loss
Derivative assets 2	5.8	5.5
Convertible loan 3	17.0	10.3
Total	22.8	15.8
Financial assets at amortized cost
Cash and cash equivalents1	687.2	636.4
Trade receivables 1	1,840.7	2,030.9
Other receivables1 2	264.3	308.6
Deposits to third party1	19.0	21.0
Loans to associates1	3.0	0.1
Total	2,814.2	2,997.0
Total financial assets	2,837.0	3,012.8
Financial liabilities at fair value through profit and loss
Contingent consideration liabilities 3	29.7	46.4
Derivative liabilities 2	8.0	9.8
Total	37.7	56.2
Financial liabilities at amortized cost
Borrowings1	680.7	678.7
Lease liabilities4	277.5	333.9
Liabilities related to put options of non-controlling interests5	44.8	67.5
Trade payables1	2,025.3	2,233.2
Other payables1 3	157.4	145.8
Total	3,185.7	3,459.1
Total financial liabilities	3,223.4	3,515.3

Carrying amount is a resonable approximation for fair value.

Excluding VAT and other tax receivables and derivative financial instruments.

Excluding VAT and other tax payables, derivative liabilities.

No fair value disclosure required.

Included in other non-current liabilities.

Measurement of Fair Values

The Group's financial instruments for which Level 2 and Level 3 fair values are determined as per below valuation techniques and specific unobservable inputs.

The forward exchange contracts represent Level 2 in the fair value hierarchy and are classified as financial instruments at fair value through profit or loss. The fair value is determined using the discounting method applying the zero-coupon curve at the financial reporting date.

During previous years, the Group subscribed to convertible loans for a total of CHF 8.8 million of aCommerce Group Ltd. (the Groups equity investment is accounted as investment in associates). The convertible loan assets are classified as financial instruments at fair value through profit and loss (Note 12) and revaluation in 2023 resulted in a gain of CHF 8.0 million.

As at December 31, 2023, the Group has performed an impairment test for its investments in aCommerce (Note 19) triggered by additional need of financing and restructuring. The recoverable amount has been determined based on fair value less cost of disposal applying different possible scenarios. Amongst various scenarios, two relevant scenarios were identified, and probability weighted (50:50): A trade sale in 2024 or a trade sale in 2025. The valuation was determined based on aCommerce's revenue forecast and market multiples determined by management applying peer information. The waterfall payout of the estimated net present value of proceeds was then allocated to the carrying amount of the individual instruments (secured note, convertible debt and equity investment). The revaluation of the Groups investment in convertible notes, measured at FVPL, resulted in a gain of CHF 8.0 million recorded in financial income. The scenarios applied are based on observable revenue multiples (Level 3 input) ranging from 0.8 to 1.0. The discount rate applied is 13.5%. Due to the specific waterfall structure, sensitivity to forecasted revenue scenarios (lower range) and (higher range) does not have any impact on the valuation of the convertible loans.

The valuation analysis as per December 31, 2022, included for the derivative component a Monte Carlo based simulation on the estimate (not listed) stock price of aCommerce (Level 3 input) and resulted in a loss of CHF 0.7 million.

The contingent considerations represent Level 3 in the fair value hierarchy and are classified as financial liabilities at fair value through profit or loss. The contingent consideration liabilities as per December 31, 2023, of CHF 29.7 million principally relate to the acquisitions of Refarmed (CHF 12.5 million), DNIV (CHF 7.6 million), Georg Breuer (CHF 5.0 million), Partizan (CHF 4.2 million) and Acutest (CHF 0.4 m).

Partizan: At acquisition date in 2023, the Group has estimated the normalized EBITDA targets (significant unobservable inputs) for the 12-month periods following September 29, 2023, and 2024 and has determined that the target amount of EBITDA would be achieved and therefore target consideration would be payable. The estimated future cashflows have been discounted to present value (Level 2 input). If the normalized EBITDA is higher/lower by 10.0%, holding all other variables constant, the fair value would be higher/lower by CHF 0.4 million.

Refarmed: At acquisition date in 2022, the Group estimated the normalized EBITDA targets (significant unobservable inputs) for the 12-month periods following July 1, 2022, 2023 and 2024 and has determined that 120.0% of the target amount of EBITDA would be achieved and therefore 120.0% of target consideration would be payable. The estimated future cashflows were discounted to present value (Level 2 input). The Group paid the first earnout in 2023 principally as per original estimate, reduced the second earnout by approx.10.0% and maintained the third earnout as per original estimate. If the normalized EBITDA is higher/lower by 10.0%, holding all other variables constant, the fair value would be higher/lower by CHF 1.1 million.

DNIV: At acquisition date in 2022, the Group estimated the normalized EBITDA targets (significant unobservable inputs) for the 12-month periods following July 1, 2022 and 2023 and has determined that the target amount of EBITDA would be achieved and therefore target consideration would be payable. The estimated future cashflows were discounted to present value (Level 2 input). The Group paid the first earnout in 2023 of about 10.0% below original estimate and reduced the second earnout by approx. 25.0%. If the normalized EBITDA is higher/lower by 10.0%, holding all other variables constant, the fair value would be higher/lower by CHF 0.7 million.

Georg Breuer: At acquisition date in 2022, the Group estimated the normalized EBITDA targets (significant unobservable inputs) for the 12-month periods following August 31, 2022 and 2023 and has determined that the target amount of EBITDA would be achieved and therefore target consideration would be payable. The estimated future cashflows were discounted to present value (Level 2 input). In addition, the earnout agreement includes a supplier target (retention of specific supplier). If such supplier would be lost during respective earn out period, the earnout amount respective earnout amount would be nil. The Group has paid the first earnout in January 2024 principally as per original estimate and maintained the second earnout estimate. If the normalized EBITDA is higher/lower by 10.0%, holding all other variables constant, the fair value would be higher/lower by CHF 0.3 million.

During 2023, the Group has settled contingent considerations relating to the acquisitions of Bosung for an amount of CHF 3.8 million, Refarmed for an amount of CHF 6.4 million, DNIV for an amount of CHF 8.4 million and Acutest for an amount of CHF 0.4 million. The Group recorded net income from revaluation of contingent consideration liabilities of CHF 1.0 million in the financial result.

Reconciliation of Level 3 Fair Values

The following table shows a reconciliation from the opening balances to the closing balances for Level 3 fair values:

in CHF millions	Convertible loan	Contingent consideration
As of January 1, 2022	11.1	15.6
Additions / Acquisitions	-	42.8
Settlements	-	(13.1)
Fair value changes	(0.7)	1.2
Exchange differences	(0.1)	(0.1)
As of December 31, 2022	10.3	46.4
Additions / Acquisitions	-	4.3
Settlements	-	(19.0)
Fair value changes	8.0	(1.0)
Exchange differences	(1.3)	(1.0)
As of December 31, 2023	17.0	29.7

(vi) Capital Risk Management

The Group's capital includes share capital, reserves, retained earnings and borrowings. The capital of the Group as of December 31, 2023, is CHF 2,367.6 million (2022: CHF 2,437.1 million). The Group's objectives when managing capital are to safeguard the Group's ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

The Group monitors capital on the basis of asset-to-equity ratio and total debt-to-capitalization ratio. The asset-to-equity ratio is calculated as total assets divided by total equity. The total debt-to-capitalization ratio is calculated as total borrowings divided by the sum of borrowings and equity attributable to the shareholders of the Group. The ratios as of December 31, 2023 and 2022, were as follows:

	2023	2022
Asset-to-equity	3.1	3.2
Total debt-to-capitalization	28.8%	27.8%

Covenants that require the Group to maintain certain agreed financial ratios are managed locally for subsidiary borrowings and by Group Treasury for Group-level borrowings. As of December 31, 2023, and for the entire financial year 2023, the Group did not have any breaches of such loan agreements.

34. Events After Financial Reporting Date

There are no significant events after the financial position date.

35. Principal Subsidiaries as of December 31, 2023

		Capital	Ownership and voting rights
Company name	Currency	in thousands	in %
Holding and management companies
DKSH International Performance Materials Ltd., Zurich	CHF	500	100
DKSH China Holding Ltd., Hong Kong 1	HKD	20,000	100
DKSH Corporate Shared Services Center Sdn. Bhd., Kuala Lumpur 1	MYR	5,000	100
DKSH Holdings (Asia) Sdn Bhd., Kuala Lumpur 1	MYR	30,000	100
DKSH Holdings (Malaysia) Bhd., Petaling Jaya	MYR	500,000	74.31
DKSH Management Malaysia Sdn Bhd, Kuala Lumpur	MYR	1,600	100
DKSH Holding Philippines, Inc., Manila 1	USD	212	99
DKSH Holding (S) Pte Ltd., Singapore 1	SGD	83,703	100
DKSH Management Pte Ltd., Singapore 1	SGD	2,000	100
DKSH Management (Thailand) Ltd., Bangkok 1	THB	10,000	100
Hahn Healthcare Holdings Pty Ltd., Sydney	AUD	10	100
Operating companies
Switzerland
DKSH Switzerland Ltd., Zurich 1	CHF	20,000	100
DKSH International Ltd., Zurich 1	CHF	700	100
Diethelm & Co Ltd., Zurich 1	CHF	3,000	100
Medinova AG, Zurich 1	CHF	250	100
Refarmed Chemicals SA (RC), Lugano	CHF	100	100
Ulfur Ltd., Malta	EUR	2,000	100
Asia
DKSH Australia Pty Ltd., Hallam 1	AUD	35,465	100
DKSH Grocery Connect Pty Ltd., Sydney	AUD	2	100
DKSH Performance Materials Operations Australia Pty Ltd., Melbourne	AUD	48,182	100
DKSH Agrisolutions Pty Ltd., Melbourne	AUD	1,400	100
Crossmark Australia Pty Ltd., Sydney	AUD	15,694	100
Sales Team Providers Pty Ltd., Sydney	AUD	-	100
DKSH Hong Kong Ltd., Hong Kong 1	HKD	100,000	100
PT DKSH (Indonesia), Jakarta	IDR	180,755,650	100
PT Wicaksana Overseas International Tbk, Jakarta 1	IDR	707,271,162	80.88
DKSH Market Expansion Services, Jakarta1	IDR	9,990,000	100
DKSH India Pvt. Ltd., Bombay-Mumbai	INR	100,000	100
DKSH Japan K.K., Tokyo	JPY	1,600,000	100
DKSH Market Expansion Services Japan K.K., Tokyo 1	JPY	700,100	100
DKSH (Cambodia) Ltd., Phnom Penh 1	KHR	4,320,000	100
DKSH Korea Ltd., Seoul 1	KRW	30,000,000	100
Bosung Scientific Co., Ltd., Seoul	KRW	50,000	100
DKSH Performance Materials Korea Ltd., Seoul	KRW	9,000,000	100
DKSH (Myanmar) Ltd., Yangon 1	MMK	10,000	100
DKSH Services Ltd., Yangon 1	MMK	1,929,921	100
The Glory Medicine Ltd., Macao	MOP	120,000	100

		Capital	Ownership and voting rights
Company name	Currency	in thousands	in %
Asia (continued)
DKSH Malaysia Sdn Bhd., Petaling Jaya	MYR	50,000	74.31
DKSH Technology Sdn. Bhd., Kuala Lumpur 1	MYR	5,000	100
The Famous Amos Chocolate Chip Cookie Corp (M) Sdn Bhd., Petaling Jaya	MYR	1,000	74.31
DKSH Luxury & Lifestyle (Malaysia) Sdn. Bhd., Kuala Lumpur 1	MYR	335	100
DKSH Food Services (Malaysia) Sdn Bhd., Kuala Lumpur	MYR	1,000	100
DKSH New Zealand Ltd., Auckland 1	NZD	26,230	100
Edward Keller (Philippines) Inc., Manila	PHP	500,000	100
DKSH Philippines Inc., Manila	PHP	80,000	100
DKSH Market Expansion Services, Taguig City1	PHP	12,000	100
DKSH Singapore Pte Ltd., Singapore	SGD	20,998	100
Favorex Pte Ltd., Singapore	SGD	500	100
DKSH Marketing Services Pte. Ltd., Singapore	SGD	10,000	100
DKSH South East Asia Pte Ltd., Singapore	SGD	11,900	100
DKSH (Thailand) Ltd., Bangkok 1	THB	200,000	75.55
The United Drug (1996) Co. Ltd., Bangkok 1	THB	40,000	75.55
Diethelm Keller Logistics Ltd., Bangkok	THB	6,000	100
DKSH Technology Limited, Bangkok	THB	3,000	99.99
DKSH Performance Materials (Thailand) Ltd., Bangkok	THB	20,000	100
DKSH Taiwan Ltd., Taipei 1	TWD	300,000	100
DKSH Supply Chain Solutions (Taiwan) Ltd., Tao Yuan County	TWD	500,000	100
United International Drug Co. Ltd., Taipei 1	TWD	5,000	100
Good Health Solutions International Co., Ltd., Taipei 1	TWD	5,000	100
DKSH Vietnam Co. Ltd., Binh Duong 1	USD	3,300	100

		Capital	Ownership and voting rights
Company name	Currency	in thousands	in %
Asia (continued)
DKSH Technology Co. Ltd (VND), Ho Chi Minh City 1	USD	3,146	100
DKSH Pharma Vietnam Co, Ltd., Binh Duong	USD	500	100
DKSH Shanghai Ltd., Shanghai 1	USD	200	100
DKSH (Shanghai) International Trade, Shanghai 1	CNY	15,000	100
DKSH Performance Materials China Ltd., Shanghai	CNY	60,000	100
DKSH Laos Company Ltd. (LAK), Vientiane	USD	400	100
DKSH Performance Materials Vietnam Co Ltd., Ho Chi Minh City	USD	400	100
Europe
DKSH France S.A., Miribel	EUR	2,400	100
DKSH GmbH, Hamburg	EUR	3,068	100
DKSH Luxury and Lifestyle Europe GmbH, Pforzheim 1	EUR	5,000	100
DKSH Marketing Services Spain, S.A.U., Barcelona	EUR	648	100
North America
DKSH North America Inc., Baltimore	USD	500	100
DKSH Premium Brand Distribution Inc., Dover 1	USD	750	100
The Terra Firma Company (DE), LLC., Maryland (MD)	USD	-	82.44
DKSH Canada Corp., Toronto	USD	15,500	82.44

Direct investments of DKSH Holding Ltd., Zurich.

Maagplatz 1 P.O. Box CH-8010 Zurich

Ernst & Young Ltd Phone: +41 58 286 31 11 www.ey.com/en_ch

To the General Meeting of DKSH Holding Ltd., Zurich

Zurich, February 15, 2024

Report of the statutory auditor

Report on the audit of the consolidated financial statements

Opinion

We have audited the consolidated financial statements of DKSH Holding Ltd. and its subsidiaries (the Group), which comprise the consolidated statement of financial position as at December 31, 2023, the consolidated income statement, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated cash flow statement for the year then ended, and notes to the consolidated financial statements, including material accounting policy information.

In our opinion, the consolidated financial statements (pages 56 to 121) give a true and fair view of the consolidated financial position of the Group as at December 31, 2023 and of its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with IFRS Accounting Standards and comply with Swiss law.

Basis for opinion

We conducted our audit in accordance with Swiss law, International Standards on Auditing (ISA) and Swiss Standards on Auditing (SA-CH). Our responsibilities under those provisions and standards are further described in the "Auditor's responsibilities for the audit of the consolidated financial statements" section of our report. We are independent of the Group in accordance with the provisions of Swiss law, together with the requirements of the Swiss audit profession, as well as those of the International Ethics Standards Board for Accountants' International Code of Ethics for Professional Accountants (including International Independence Standards (IESBA Code), and we have fulfilled our other ethical responsibilities in accordance with these requirements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

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

We have fulfilled the responsibilities described in the "Auditor's responsibilities for the audit of the consolidated financial statements" section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the consolidated financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the consolidated financial statements.

Revenue recognition

Risk Total net sales for the business year 2023 amount to CHF 11'066.0 million. Based on its business model, DKSH has different streams of revenues arising from different types of contracts with its customers. This requires contracts to be assessed regarding timing of revenue recognition and regarding gross/net accounting. The corresponding accounting policy is discussed in Note 2 (o) to the consolidated financial statements. Assessing whether an entity acts as a principal and accounts for a sales transaction on a gross basis or whether it acts as an agent of another party and therefore recognizes revenue on a net basis requires an analysis of various factors and involves significant judgment.

Our audit response

We evaluated Management's controls around the revenue recognition process and performed analytical review procedures in order to identify any material new revenue streams. On a sample basis, we reviewed agreements for unusual contract terms and agreed amounts recognized to underlying customer contracts, focusing on correct timing of revenue recognition and appropriate presentation (gross vs. net) based on Management's assessment regarding the principal vs. agent definition. Our audit procedures did not lead to any reservations concerning the recognition, measurement and presentation of the net sales.

Goodwill

Risk As at December 31, 2023, DKSH reported CHF 559.8 million of goodwill. The carrying values of goodwill and other assets allocated to a cash-generating unit (CGU) are dependent on future cash flows. The determination of the recoverable amount is based on these cash flows and other assumptions such as discount rate and growth rate. The annual impairment testing process is complex, contains judgmental elements and includes assumptions that are affected by expected future market conditions. There is a risk that future cash flows may differ from estimated values. The assumptions, sensitivities and results of the impairment tests performed are disclosed in Note 15 to the consolidated financial statements.

Our audit response

We involved our valuation specialists in the audit of significant assumptions and methods that were used by Management, such as discount rates for each CGU and the valuation model applied to determine the recoverable amount of the CGUs. Furthermore, we evaluated DKSH's controls around the annual impairment test and tested related expected future cash flows and growth rates for each CGU. We assessed whether projected future cash flows were based on the strategic plan of the company as prepared by Management and approved by the Executive Board of the Group. We also assessed whether the disclosures of the assumptions applied and their sensitivity to the results of the impairment test in the notes to the financial statements are in compliance with IFRS Accounting Standards. Our audit procedures did not lead to any reservations relating to goodwill.

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Investment in associates in aCommerce and related financial assets

Risk As at December 31, 2023, DKSH reported an investment in associates of aCommerce Group Ltd., Hong Kong (aCommerce) with a carrying value of CHF 62.6 million (21.5% stake) as well as other related financial assets of CHF 20.0 million (convertible loans and loans) in the scope of IFRS 9. Management identified indicators for impairment and carried out an impairment test on the investment in associates. Furthermore, Management determined the fair value of the convertible loans based on level 3 inputs and assessed the expected credit losses on the loans. The recoverability and valuation of these assets is dependent on the future development of the aCommerce business and/or a potential exit transaction. The determination of the recoverable amount of the investment in associates, the fair value of the convertible loans and the expected credit losses on the loans are based on significant assumptions including expected revenues, revenue multiples, discount rates and Management judgment. There is a risk that Management's assumptions may differ from the effective outcome. The assumptions, sensitivities, and results of the impairment test on the investment in associates as well as the valuation performed are disclosed in the critical accounting estimates and assumptions and in notes 12, 19 and 33 to the consolidated financial statements.

Our audit response

We involved our valuation specialists in the audit of the methods and significant assumptions used by Management to determine the underlying value of aCommerce and the recoverable amount of the investment in associates and the fair value of the convertible loans. We evaluated the historical accuracy of financial plans and considered Management's ability to produce longterm forecasts. Furthermore, we assessed whether future revenues were based on the most recent plans and we analyzed the applied revenue multiples. We also assessed the sensitivity of the valuation prepared by Management to changes in assumptions and evaluated the disclosures in the consolidated financial statements. Our audit procedures did not lead to any reservations relating to the investment in associates of aCommerce and related financial assets.

Other information

The Board of Directors is responsible for the other information. The other information comprises the information included in the annual report, but does not include the consolidated financial statements, the stand-alone financial statements, the compensation report and our auditor's reports thereon.

Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Board of Directors' responsibilities for the consolidated financial statements

The Board of Directors is responsible for the preparation of the consolidated financial statements, which give a true and fair view in accordance with IFRS Accounting Standards and the provisions of Swiss law, and for such internal control as the Board of Directors determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, the Board of Directors is responsible for assessing the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern, and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

Auditor's responsibilities for the audit of the consolidated financial statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Swiss law, ISA and SA-CH will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

A further description of our responsibilities for the audit of the consolidated financial statements is located on EXPERTsuisse's website at: https://www.expertsuisse.ch/en/audit-report. This description forms an integral part of our report.

Report on other legal and regulatory requirements

In accordance with Art. 728a para. 1 item 3 CO and PS-CH 890, we confirm that an internal control system exists, which has been designed for the preparation of the consolidated financial statements according to the instructions of the Board of Directors.

We recommend that the consolidated financial statements submitted to you be approved.

Ernst & Young Ltd

Simon Zogg Patrick Meier Licensed audit expert Licensed audit expert (Auditor in charge)

Enclosures

▶ Consolidated financial statements (consolidated income statement, consolidated statement of comprehensive income, consolidated statement of financial position, consolidated statement of changes in equity, consolidated cash flow statement and notes)

Financial Statements DKSH Holding Ltd.

128 Income Statement

129 Statement of Financial Position

130 Notes to the Financial Statements

136 Proposal Appropriation of Available Earnings

Income Statement

in CHF millions Notes	2023	2022
Dividend income	119.0	268.5
Profit from sale of investments	7.6	27.2
Management fees income 3	47.7	43.5
Other operating income	0.2	0.6
Personnel expenses 2	(16.1)	(22.6)
Management fees expenses 3	(37.4)	(33.2)
Other operating expenses	(15.7)	(23.3)
Loss on sale of investments	-	(5.6)
Depreciation and valuation adjustments on non-current assets 7	(30.3)	(0.2)
Financial income	12.6	5.5
Financial expenses	(2.1)	(3.3)
Profit before tax	85.5	257.1
Income taxes	-	-
Profit after tax	85.5	257.1

Statement of Financial Position

in CHF millions Notes	2023	2022
Cash and cash equivalents	100.7	24.4
Other receivables
from third parties	0.4	0.2
from group companies	465.8	594.5
Accrued Income and prepaid expenses
from third parties	0.5	1.5
from group companies	3.4	2.2
Investment held for sale	18.0	18.0
Current assets	588.8	640.8
Investments 7	350.7	357.1
Other non-current assets	0.2	0.2
Non-current assets	350.9	357.3
Total assets	939.7	998.1
Payables
Non-trade payables to third parties	1.0	0.6
Non-trade payables to group companies	3.8	3.5
Deferred income and accrued expenses	10.0	15.3
Current liabilities	14.8	19.4
Interest bearing bank loans	40.0	40.0
Non-current liabilities	40.0	40.0
Total liabilities	54.8	59.4
Share capital 6	6.5	6.5
Legal reserves from capital contribution	2.8	2.8
Legal reserves from retained earnings	96.6	96.6
Treasury shares 6	(6.8)	(7.1)
Free reserves
Retained earnings	700.3	582.8
Net Income	85.5	257.1
Total equity	884.9	938.7
Total equity and liabilities	939.7	998.1

Notes to the Financial Statements

1. General

The financial statements of DKSH Holding Ltd. (the "Company") have been prepared in accordance with the provisions of the Swiss Law on Accounting and Financial Reporting (32nd title of the Swiss Code of Obligations). Where not prescribed by law, the significant accounting and valuation principles applied as described below.

The investments are recognized at the lower of cost or fair value, using generally accepted valuation principles.

An accrual, for share-based payment on the expected number of shares to be delivered in the future is recognized.

Treasury shares are recognized at acquisition cost and deducted from equity.

Leases are recognized in the profit and loss at the time of the payment.

2. Personnel Expenses

The personnel expenses include remuneration of employees and Board of Directors.

3. Management Fees

DKSH Holding bears the costs of services such as management, information technology, license fees, administrative and legal services provided by different group companies. These costs, as well as additional services provided by corporate level (such as group accounting, human resources, legal services, media relations, communication, and other back-office services), are subsequently charged to the individual group companies.

4. Number of Employees

The number of full-time positions did not exceed 50 employees, during the current and previous period.

5. Contingent Liabilities and Leases

The total of guarantees and commitments in favor of third parties and joint ventures amounted to CHF 248.2 million (2022: CHF 268.9 million) as of December 31, 2023.

DKSH Holding Ltd. belongs to the value-added tax group of its Swiss subsidiaries and therefore has a joint guarantee responsibility toward the Swiss Tax Authority.

Committed lease contract maturity table

in CHF millions	2023	2022
Up to 12 months	0.3	0.3
Over 12 months	0.5	0.8

6. Equity

Share Capital

	Nominal value in CHF	Registered shares	Nominal value in CHF
Balance as of January 1, 2023	0.1	65,042,963	6,504,296
Balance as of December 31, 2023	0.1	65,042,963	6,504,296

Treasury shares

	Number of shares	Total carrying amount1
Balance as of January 1, 2022	68,317	5,047
Acquisitions	81,000	6,258
Allocations to employees	(57,540)	(4,254)
Balance as of December 31, 2022	91,777	7,051
Acquisitions	85,000	6,184
Allocations to employees	(83,801)	(6,449)
Balance as of December 31, 2023	92,976	6,786

In CHF thousands.

7. Investments

in CHF millions	2023	2022
As of January 1	357.1	389.3
Increase	24.2	5.1
Decrease	(0.3)	(37.1)
Valuation adjustment	(30.3)	(0.2)
As of December 31	350.7	357.1

The direct and principal indirect investments held by DKSH Holding Ltd. as of December 31, 2023:

		Capital	Ownership and voting rights
Company name	Currency	in thousands	in %
Holding and management companies
DKSH International Performance Materials Ltd., Zurich	CHF	500	100
DKSH China Holding Ltd., Hong Kong 1	HKD	20,000	100
DKSH Corporate Shared Services Center Sdn. Bhd., Kuala Lumpur 1	MYR	5,000	100
DKSH Holdings (Asia) Sdn Bhd., Kuala Lumpur 1	MYR	30,000	100
DKSH Holdings (Malaysia) Bhd., Petaling Jaya	MYR	500,000	74.31
DKSH Management Malaysia Sdn Bhd, Kuala Lumpur	MYR	1,600	100
DKSH Holding Philippines, Inc., Manila 1	USD	212	99
DKSH Holding (S) Pte Ltd., Singapore 1	SGD	83,703	100
DKSH Management Pte Ltd., Singapore 1	SGD	2,000	100
DKSH Management (Thailand) Ltd., Bangkok 1	THB	10,000	100
Hahn Healthcare Holdings Pty Ltd., Sydney	AUD	10	100
Operating companies
Switzerland
DKSH Switzerland Ltd., Zurich 1	CHF	20,000	100
DKSH International Ltd., Zurich 1	CHF	700	100
Diethelm & Co Ltd., Zurich 1	CHF	3,000	100
Medinova AG, Zurich 1	CHF	250	100
Refarmed Chemicals SA (RC), Lugano	CHF	100	100
Ulfur Ltd., Malta	EUR	2,000	100
Asia
DKSH Australia Pty Ltd., Hallam 1	AUD	35,465	100
DKSH Grocery Connect Pty Ltd., Sydney	AUD	2	100
DKSH Performance Materials Operations Australia Pty Ltd., Melbourne	AUD	48,182	100
DKSH Agrisolutions Pty Ltd., Melbourne	AUD	1,400	100
Crossmark Australia Pty Ltd., Sydney	AUD	15,694	100
Sales Team Providers Pty Ltd., Sydney	AUD	-	100
DKSH Hong Kong Ltd., Hong Kong 1	HKD	100,000	100
PT DKSH (Indonesia), Jakarta	IDR	180,755,650	100
PT Wicaksana Overseas International Tbk, Jakarta 1	IDR	707,271,162	80.88
DKSH Market Expansion Services, Jakarta1	IDR	9,990,000	100
DKSH India Pvt. Ltd., Bombay-Mumbai	INR	100,000	100
DKSH Japan K.K., Tokyo	JPY	1,600,000	100
DKSH Market Expansion Services Japan K.K., Tokyo 1	JPY	700,100	100
DKSH (Cambodia) Ltd., Phnom Penh 1	KHR	4,320,000	100
DKSH Korea Ltd., Seoul 1	KRW	30,000,000	100
Bosung Scientific Co., Ltd., Seoul	KRW	50,000	100
DKSH Performance Materials Korea Ltd., Seoul	KRW	9,000,000	100
DKSH (Myanmar) Ltd., Yangon 1	MMK	10,000	100
DKSH Services Ltd., Yangon 1	MMK	1,929,921	100
The Glory Medicine Ltd., Macao	MOP	120,000	100

		Capital	Ownership and voting rights
Company name	Currency	in thousands	in %
Asia (continued)
DKSH Malaysia Sdn Bhd., Petaling Jaya	MYR	50,000	74.31
DKSH Technology Sdn. Bhd., Kuala Lumpur 1	MYR	5,000	100
The Famous Amos Chocolate Chip Cookie Corp (M) Sdn Bhd., Petaling Jaya	MYR	1,000	74.31
DKSH Luxury & Lifestyle (Malaysia) Sdn. Bhd., Kuala Lumpur 1	MYR	335	100
DKSH Food Services (Malaysia) Sdn Bhd., Kuala Lumpur	MYR	1,000	100
DKSH New Zealand Ltd., Auckland 1	NZD	26,230	100
Edward Keller (Philippines) Inc., Manila	PHP	500,000	100
DKSH Philippines Inc., Manila	PHP	80,000	100
DKSH Market Expansion Services, Taguig City1	PHP	12,000	100
DKSH Singapore Pte Ltd., Singapore	SGD	20,998	100
Favorex Pte Ltd., Singapore	SGD	500	100
DKSH Marketing Services Pte. Ltd., Singapore	SGD	10,000	100
DKSH South East Asia Pte Ltd., Singapore	SGD	11,900	100
DKSH (Thailand) Ltd., Bangkok 1	THB	200,000	75.55
The United Drug (1996) Co. Ltd., Bangkok 1	THB	40,000	75.55
Diethelm Keller Logistics Ltd., Bangkok	THB	6,000	100
DKSH Technology Limited, Bangkok	THB	3,000	99.99
DKSH Performance Materials (Thailand) Ltd., Bangkok	THB	20,000	100
DKSH Taiwan Ltd., Taipei 1	TWD	300,000	100
DKSH Supply Chain Solutions (Taiwan) Ltd., Tao Yuan County	TWD	500,000	100
United International Drug Co. Ltd., Taipei 1	TWD	5,000	100
Good Health Solutions International Co., Ltd., Taipei 1	TWD	5,000	100
DKSH Vietnam Co. Ltd., Binh Duong 1	USD	3,300	100

		Capital	Ownership and voting rights
Company name	Currency	in thousands	in %
Asia (continued)
DKSH Technology Co. Ltd (VND), Ho Chi Minh City 1	USD	3,146	100
DKSH Pharma Vietnam Co, Ltd., Binh Duong	USD	500	100
DKSH Shanghai Ltd., Shanghai 1	USD	200	100
DKSH (Shanghai) International Trade, Shanghai 1	CNY	15,000	100
DKSH Performance Materials China Ltd., Shanghai	CNY	60,000	100
DKSH Laos Company Ltd. (LAK), Vientiane	USD	400	100
DKSH Performance Materials Vietnam Co Ltd., Ho Chi Minh City	USD	400	100
Europe
DKSH France S.A., Miribel	EUR	2,400	100
DKSH GmbH, Hamburg	EUR	3,068	100
DKSH Luxury and Lifestyle Europe GmbH, Pforzheim 1	EUR	5,000	100
DKSH Marketing Services Spain, S.A.U., Barcelona	EUR	648	100
North America
DKSH North America Inc., Baltimore	USD	500	100
DKSH Premium Brand Distribution Inc., Dover 1	USD	750	100
The Terra Firma Company (DE), LLC., Maryland (MD)	USD	-	82.44
DKSH Canada Corp., Toronto	USD	15,500	82.44

Direct investments of DKSH Holding Ltd., Zurich.

8. Share-based Payments

Every year performance share units (PSU) are granted to eligible key managers by, and at the full discretion of, the Board of Directors.

Number of PSUs allocated for the period 2023-2025	2023	2022
Executive Committee employed by DKSH Holding Ltd.	24,018	20,824
Other employees of DKSH Holding Ltd.	2,774	2,173
Total	26,792	22,997

Proposal Appropriation of Available Earnings

The Board of Directors proposes the following appropriation of available earnings at the Ordinary General Meeting:

in CHF	2023
Retained earnings
Retained earnings brought forward	700,316,777
Retained earnings as of December 31, 2023	700,316,777
Profit after tax	85,519,467
Total available earnings	785,836,244
Distribution of an ordinary dividend of CHF 2.25 per registered share (As per December 31, 2023 64,949,987 shares are entitled to dividends)	146,137,470
To be carried forward	639,698,774

Maagplatz 1 P.O. Box CH-8010 Zurich

Ernst & Young Ltd Phone: +41 58 286 31 11 www.ey.com/en_ch

To the General Meeting of DKSH Holding Ltd., Zurich

Zurich, February 15, 2024

Report of the statutory auditor

Report on the audit of the financial statements

Opinion

We have audited the financial statements of DKSH Holding Ltd. (the Company), which comprise the statement of financial position as at December 31, 2023, the income statement for the year then ended, and notes to the financial statements, including a summary of significant accounting policies.

In our opinion, the financial statements (pages 128 to 135) comply with Swiss law and the Company's articles of incorporation.

Basis for opinion

We conducted our audit in accordance with Swiss law and Swiss Standards on Auditing (SA-CH). Our responsibilities under those provisions and standards are further described in the "Auditor's responsibilities for the audit of the financial statements" section of our report. We are independent of the Company in accordance with the provisions of Swiss law and the requirements of the Swiss audit profession, and we have fulfilled our other ethical responsibilities in accordance with these requirements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

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

We have fulfilled the responsibilities described in the "Auditor's responsibilities for the audit of the financial statements" section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the financial statements. The results of our audit procedures, including the procedures performed to address the matter below, provide the basis for our audit opinion on the accompanying financial statements.

Valuation of investments

Risk DKSH Holding Ltd. is the parent company of DKSH Group. As at December 31, 2023 investments amount to CHF 350.7 million and represent 37% of total assets. Corresponding disclosure can be found in Notes 1 and 7 to the financial statements. The Company assessed that the carrying amount of the investments is supported by their value-in-use calculation on the basis of budgeted future cash flows. Due to the significance of the carrying values for investments and the judgment involved in performing the value-in-use calculation, this matter was considered significant to our audit.

Our audit response We assessed the valuation methods and input parameters used by Management and reperformed the value-in-use calculation for the investments. In addition, we assessed investments for impairment and presentation and disclosure requirements. Our audit procedures did not lead to any reservations concerning the valuation of the investments.

Other information

The Board of Directors is responsible for the other information. The other information comprises the information included in the annual report, but does not include the consolidated financial statements, the stand-alone financial statements and the compensation report and our auditor's reports thereon.

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Board of Directors' responsibilities for the financial statements

The Board of Directors is responsible for the preparation of the financial statements in accordance with the provisions of Swiss law and the Company's articles of incorporation, and for such internal control as the Board of Directors determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Board of Directors is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern, and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Swiss law and SA-CH will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

A further description of our responsibilities for the audit of the financial statements is located on EXPERTsuisse's website at: https://www.expertsuisse.ch/en/audit-report. This description forms an integral part of our report.

Report on other legal requirements

In accordance with Art. 728a para. 1 item 3 CO and PS-CH 890, we confirm that an internal control system exists, which has been designed for the preparation of the financial statements according to the instructions of the Board of Directors.

Furthermore, we confirm that the proposed appropriation of available earnings complies with Swiss law and the Company's articles of incorporation. We recommend that the financial statements submitted to you be approved.

Ernst & Young Ltd

Simon Zogg Patrick Meier Licensed audit expert Licensed audit expert (Auditor in charge)

Disclaimer

This publication may contain forward-looking statements that can be identified by words such as "expected," "estimated," "planned," "potential" or similar expressions as to DKSH's expectations concerning future developments of its business, products and the markets in which it operates and the political, economic, financial, legal and regulatory environment. A number of risks, uncertainties and other important internal and external factors could cause actual developments and results todiffer materially from DKSH's expectations or other statements expressed in such forward-looking statements. These factors include, but are not limited to, future developments in the markets in which DKSH operates or to which it is exposed; the effect of possible political, economic, financial, legal and regulatory developments; changes in accounting standards or policies, and accounting determinations or interpretations affecting the recognition of revenue, gain or loss, the valuation of goodwill and other matters; and DKSH's ability to retain and attract key employees. In addition, DKSH's business and financial performance could be affected by other factors identified in its past and future filings and reports, including those filed with SIX Swiss Exchange. DKSH does not undertake any obligation to update or amend its forward-looking statements contained in this publication as a result of new information, future events, or otherwise. DKSH's consolidated financial statements are prepared in accordance with IFRS Accounting Standards and presented in Swiss francs. DKSH also uses certain non-IFRS financial measures, such as NOC, Core RONOC, Core ROE, EBIT margin, Free cash flow or Net debt. DKSH uses these non-IFRS financial measures as supplemental indicators of its operating performance and financial position. These measures do not have any standardized meaning prescribed by IFRS and should not be viewed as alternatives to measures of operating or financial performance calculated in accordance with IFRS.

Publisher

DKSH Holding Ltd. Wiesenstrasse 8 P.O. Box 888 8034 Zurich Switzerland Phone +41 44 386 7272

Investor and Media Relations

Till Leisner investors@dksh.com Phone +41 44 386 7272