Delta Electronics : 5/30/2023Q1 2023 Consolidated Financial Report

DELTA ELECTRONICS, INC. AND

SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND

INDEPENDENT AUDITORS' REVIEW REPORT

MARCH 31, 2023 AND 2022

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For the convenience of readers and for information purpose only, the auditors' report and the accompanying financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. In the event of any discrepancy between the English version and the original Chinese version or any differences in the interpretation of the two versions, the Chinese-language auditors' report and financial statements shall prevail.

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REPORT ON REVIEW OF INTERIM FINANCIAL INFORMATION

To the Board of Directors and Shareholders of Delta Electronics, Inc.

Introduction

We have reviewed the accompanying consolidated balance sheets of Delta Electronics, Inc. and its subsidiaries (the "Group") as at March 31, 2023 and 2022, and the related consolidated statements of comprehensive income, of changes in equity and of cash flows for the three months then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies. Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the "Regulations Governing the Preparation of Financial Reports by Securities Issuers" and International Accounting Standard (IAS) No. 34, "Interim Financial Reporting" that came into effect as endorsed by the Financial Supervisory Commission (FSC). Our responsibility is to express a conclusion on these interim financial statements based on our reviews and the review reports of other independent auditors.

Scope of review

Except as explained in the Basis for Qualified Conclusion, we conducted our reviews in accordance with the Standard on Review Engagements 2410, "Review of Financial Information Performed by the Independent Auditor of the Entity" of the Republic of China. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

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Basis for Qualified Conclusion

As explained in Note 4(3)B, the financial statements of certain insignificant consolidated subsidiaries and investments accounted for under the equity method were not reviewed by independent auditors. Those statements reflect total assets of NT$31,477,948 thousand and NT$25,978,618 thousand, constituting 7.38% and 6.94% of the consolidated total assets, and total liabilities of NT$8,790,015 thousand and NT$7,784,989 thousand, constituting 4.56% and 4.47% of the consolidated total liabilities as at March 31, 2023 and 2022, respectively, and total comprehensive income of NT$326,448 thousand and NT$354,899 thousand, constituting 4.25% and 2.55% of the consolidated total comprehensive income for the three months then ended, respectively.

Qualified Conclusion

Based on our reviews and the review reports of other independent auditors as described in the Other Matter-Review Reports By Other Independent Auditors section of our report, except for the possible effects of the matter described in the Basis for Qualified Conclusion section of our report, nothing has come to our attention that causes us to believe that the accompanying interim financial statements do not present fairly, in all material respects, the consolidated financial position of the Group as at March 31, 2023 and 2022, and of its consolidated financial performance and its consolidated cash flows for the three months then ended in accordance with the "Regulations Governing the Preparation of Financial Reports by Securities Issuers" and IAS No. 34, "Interim Financial Reporting" that came into effect as endorsed by the FSC.

Other Matter-Review Reports By Other Independent Auditors

We did not review the financial statements of certain subsidiaries which were reviewed by other independent auditors. Those statements reflect total assets amounting to NT$77,633,215 thousand and NT$58,323,953 thousand, constituting 18.20% and 15.59% of the consolidated total assets as at March 31, 2023 and 2022, respectively, and total operating revenues amounting to NT$18,621,409 thousand and NT$18,367,878 thousand, constituting 20.05% and 22.25% of the consolidated total operating revenues for the three months then ended, respectively.

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The consolidated financial statements of Delta Electronics, Inc. and subsidiaries as at and for the three months ended March 31, 2023 expressed in US dollars are presented solely for the convenience of the reader and were translated from the financial statements expressed in New Taiwan dollars using the exchange rate of $30.45 to US$1.00 at March 31, 2023. This basis of translation is not in accordance with International Financial Reporting Standards, International Accounting Standards, and relevant interpretations and interpretative bulletins that are ratified by the FSC.

Hsiao, Chun-Yuan

Chou, Chien-Hung

for and on behalf of PricewaterhouseCoopers, Taiwan

April 27, 2023

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The accompanying consolidated financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles generally accepted in countries and jurisdictions other than the Republic of China. The standards, procedures and practices in the Republic of China governing the review of such financial statements may differ from those generally accepted in countries and jurisdictions other than the Republic of China. Accordingly, the accompanying consolidated financial statements and review report of independent auditors are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic of China, and their applications in practice.

As the financial statements are the responsibility of the management, PricewaterhouseCoopers cannot accept any liability for the use of, or reliance on, the English translation or for any errors or misunderstandings that may derive from the translation.

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DELTA ELECTRONICS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

MARCH 31, 2023, DECEMBER 31, 2022 AND MARCH 31, 2022

(EXPRESSED IN THOUSANDS OF DOLLARS)

(THE BALANCE SHEETS AS OF MARCH 31, 2023 AND 2022 ARE UNAUDITED)

					US Dollars					New Taiwan Dollars
Assets		Notes		March 31, 2023			March 31, 2023		December 31, 2022		March 31, 2022
Current assets
Cash and cash equivalents	6(1)		$	2,272,346	$	69,192,921	$	61,546,836		$	53,165,861
Financial assets at fair value through	6(2)
profit or loss - current					58,542			1,782,595			1,759,612			1,404,647
Financial assets at amortised cost -	8
current					8,467			257,827			265,382			334,253
Contract assets - current	6(20)			135,997			4,141,119			4,135,672			3,130,988
Notes receivable, net	6(5)			82,434			2,510,127			3,123,642			2,998,591
Accounts receivable, net	6(5)			2,421,612			73,738,077			84,074,069			68,013,252
Accounts receivable - related parties	7			908			27,663			29,551			20,732
Other receivables		6(6) and 7		93,735			2,854,217			2,449,171			2,634,460
Current income tax assets					16,538			503,581			379,086			513,015
Inventories	6(7)			2,644,633			80,529,074			79,844,364			67,188,249
Prepayments					90,039			2,741,676			2,690,148			2,221,718
Other current assets					3,748			114,134			152,933			82,226
Total current assets					7,828,999			238,393,011			240,450,466			201,707,992
Non-current assets
Financial assets at fair value through	6(2)
profit or loss - non-current					79,338			2,415,856			2,771,627			3,078,138
Financial assets at fair value through	6(3)
other comprehensive income -
non-current					78,638			2,394,529			1,740,553			1,626,801
Contract assets - non-current	6(20)			21,598			657,659			503,403			490,986
Investments accounted for under the
equity method					3,280			99,870			92,430			66,847
Property, plant and equipment		6(8) and 8		2,927,301			89,136,306			86,266,587			79,143,617
Right-of-use assets	6(9)			144,218			4,391,428			5,086,323			3,138,962
Investment property, net					462			14,070			18,128			14,070
Intangible assets	6(10)			2,536,264			77,229,255			77,169,854			75,163,017
Deferred income tax assets					276,529			8,420,307			8,175,453			7,439,889
Other non-current assets	6(5)(11)
		and 8		114,451			3,485,048			3,598,982			2,322,996
Total non-current assets					6,182,079			188,244,328			185,423,340			172,485,323
Total assets				$	14,011,078		$	426,637,339		$	425,873,806		$	374,193,315

(Continued)

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