Delta Electronics : 5/17/2024Q1 2024 Consolidated Financial Report

DELTA ELECTRONICS, INC. AND

SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND

INDEPENDENT AUDITORS' REVIEW REPORT

MARCH 31, 2024 AND 2023

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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, 2024 and 2023, 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 material 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.

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, including the balance of certain investments accounted for under the equity method of NT$28,780,413 thousand and NT$31,477,948 thousand, constituting 6.10% and 7.38% of the consolidated total assets, and total liabilities of NT$7,439,117 thousand and NT$8,790,015 thousand, constituting 3.45% and 4.56% of the consolidated total liabilities as at March 31, 2024 and 2023, respectively, and total comprehensive (loss) income of (NT$394,648) thousand and NT$326,448 thousand, constituting (2.82%) and 4.25% of the consolidated total comprehensive

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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, 2024 and 2023, 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$69,145,123 thousand and NT$77,633,215 thousand, constituting 14.65% and 18.20% of the consolidated total assets as at March 31, 2024 and 2023, respectively, and total operating revenues amounting to NT$18,916,864 thousand and NT$18,621,409 thousand, constituting 20.72% and 20.05% 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, 2024 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 $32.00 to US$1.00 at March 31, 2024. 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

Hsu, Sheng-Chung

for and on behalf of PricewaterhouseCoopers, Taiwan

April 30, 2024

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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, 2024, DECEMBER 31, 2023 AND MARCH 31, 2023

(EXPRESSED IN THOUSANDS OF DOLLARS)

					US Dollars					New Taiwan Dollars
Assets		Notes		March 31, 2024			March 31, 2024		December 31, 2023			March 31, 2023
Current assets
Cash and cash equivalents	6(1)		$	3,038,021	$	97,216,667	$	87,455,916		$	69,192,921
Financial assets at fair value through	6(2)
profit or loss - current					133,815			4,282,070			4,904,074				1,782,595
Financial assets at amortised cost -	8
current					8,508			272,247			259,567				257,827
Contract assets - current	6(20)			167,562			5,361,977			5,529,060				4,141,119
Notes receivable, net	6(5)			81,403			2,604,891			2,245,939				2,510,127
Accounts receivable, net		6(5) and 8		2,324,916			74,397,309			77,127,923				73,738,077
Accounts receivable - related	7
parties, net					223			7,125			5,801				27,663
Other receivables	7			66,279			2,120,946			2,326,227				2,854,217
Current income tax assets					34,095			1,091,046			805,368				503,581
Inventories	6(6)			2,262,845			72,411,050			76,226,562				80,529,074
Prepayments					84,802			2,713,661			2,996,762				2,741,676
Other current assets					2,606			83,397			74,985				114,134
Total current assets					8,205,075			262,562,386			259,958,184				238,393,011
Non-current assets
Financial assets at fair value through	6(2)
profit or loss - non-current					44,355			1,419,369			1,367,375				2,415,856
Financial assets at fair value through	6(3)
other comprehensive income -
non-current					58,060			1,857,911			1,995,030				2,394,529
Contract assets - non-current	6(20)			19,490			623,695			708,329				657,659
Investments accounted for under the
equity method					2,108			67,451			99,423				99,870
Property, plant and equipment		6(7) and 8		3,173,001			101,536,053			98,001,515				89,136,306
Right-of-use assets	6(8)			148,776			4,760,827			4,834,885				4,391,428
Investment property, net	6(9)			148,252			4,744,054			14,070				14,070
Intangible assets	6(10)			2,559,662			81,909,186			78,544,404				77,229,255
Deferred income tax assets					289,532			9,265,014			8,833,470				8,420,307
Other non-current assets	6(5)(11)
		and 8		106,091			3,394,918			3,389,893				3,485,048
Total non-current assets					6,549,327			209,578,478			197,788,394				188,244,328
Total assets				$	14,754,402	$	472,140,864	$	457,746,578		$	426,637,339

(Continued)

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DELTA ELECTRONICS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

MARCH 31, 2024, DECEMBER 31, 2023 AND MARCH 31, 2023

(EXPRESSED IN THOUSANDS OF DOLLARS)

					US Dollars					New Taiwan Dollars
Liabilities and Equity		Notes		March 31, 2024			March 31, 2024		December 31, 2023			March 31, 2023
Current liabilities
Short-term borrowings	6(12)		$	153,626	$	4,916,038	$	3,334,888		$	1,387,775
Financial liabilities at fair value	6(2)
through profit or loss - current					15,511			496,345			54,410				192,676
Contract liabilities - current	6(20)			291,499			9,327,961			9,156,906				8,383,813
Notes payable					247			7,889			4,538				5,975
Accounts payable					1,515,965			48,510,862			53,496,221				56,193,539
Accounts payable - related parties	7			404			12,927			38,185				30,703
Other payables	6(13)			1,407,737			45,047,596			44,336,025				38,108,639
Current income tax liabilities					200,665			6,421,288			5,683,107				6,013,913
Long-term liabilities, current portion 6(15)		65,184			2,085,898			2,539,678				42,012
Other current liabilities					209,437			6,701,997			7,440,595				6,851,966
Total current liabilities					3,860,275			123,528,801			126,084,553				117,211,011
Non-current liabilities
Bonds payable	6(14)			909,375			29,100,000			29,100,000				16,600,000
Long-term borrowings	6(15)			773,868			24,763,773			22,320,422				27,551,664
Deferred income tax liabilities					767,270			24,552,650			23,678,006				19,909,453
Lease liabilities - non-current					76,458			2,446,654			2,555,275				2,253,637
Other non-current liabilities					343,519			10,992,586			11,272,829				9,272,595
Total non-current liabilities					2,870,490			91,855,663			88,926,532				75,587,349
Total liabilities					6,730,765			215,384,464			215,011,085				192,798,360
Equity
Share capital	6(17)
Common stock					811,732			25,975,433			25,975,433				25,975,433
Capital surplus	6(18)
Capital surplus					1,707,406			54,636,991			54,636,991				49,321,767
Retained earnings	6(19)
Legal reserve					1,114,832			35,674,625			35,674,625				32,386,305
Special reserve					92,771			2,968,678			2,968,678				16,166,722
Unappropriated retained earnings					2,802,164			89,669,260			83,903,789				72,834,270
Other equity interest
Other equity interest					68,238			2,183,597	(		3,995,738)	(		3,408,823)
Equity attributable to owners of
the parent					6,597,143			211,108,584			199,163,778				193,275,674
Non-controlling interest	4(3)			1,426,494			45,647,816			43,571,715				40,563,305
Total equity					8,023,637			256,756,400			242,735,493				233,838,979
Significant contingent liabilities and	9
unrecorded contract commitments
Significant events after the balance	11
sheet date
Total liabilities and equity				$	14,754,402		$	472,140,864		$	457,746,578			$	426,637,339

The accompanying notes are an integral part of these consolidated financial statements.

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DELTA ELECTRONICS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

THREE MONTHS ENDED MARCH 31, 2024 AND 2023

(EXPRESSED IN THOUSANDS OF DOLLARS, EXCEPT EARNINGS PER SHARE DATA)

					US Dollars				New Taiwan Dollars
				Three months ended			Three months ended March 31,
Items		Notes			March 31, 2024				2024				2023
Operating revenue		6(20) and 7	$	2,853,062		$	91,297,990		$	92,859,244
Operating costs	6(6)(25)(26)			2,010,920)			64,349,444)			67,291,540)
		and 7	(		(		(
Gross profit					842,142				26,948,546				25,567,704
Operating expenses	6(25)(26)
Selling expenses			(		194,150)	(		6,212,787)	(		5,786,959)
General and administrative expenses			(		131,235)	(		4,199,535)	(		3,686,641)
Research and development expenses			(		280,435)	(		8,973,915)	(		7,671,553)
Expected credit impairment loss	12(2)	(		5,238)	(		167,625)	(		15,963)
Total operating expenses			(		611,058)	(		19,553,862)	(		17,161,116)
Operating profit					231,084				7,394,684				8,406,588
Non-operating income and expenses
Interest income	6(21)			21,896				700,690				371,648
Other income	6(22)			27,029				864,927				931,537
Other gains and losses	6(23)			5,530				176,966				494,435
Finance costs	6(24)	(		10,616)	(		339,710)	(		253,893)
Share of (loss) profit of associates and
joint ventures accounted for under the			(		1,006)	(		32,199)			8,986
equity method
Total non-operating income and
expenses					42,833				1,370,674				1,552,713
Profit before income tax					273,917				8,765,358				9,959,301
Income tax expense	6(27)	(		56,191)	(		1,798,113)	(		1,988,220)
Profit for the period				$	217,726			$	6,967,245			$	7,971,081

(Continued)

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DELTA ELECTRONICS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

THREE MONTHS ENDED MARCH 31, 2024 AND 2023

(EXPRESSED IN THOUSANDS OF DOLLARS, EXCEPT EARNINGS PER SHARE DATA)

					US Dollars				New Taiwan Dollars
				Three months ended			Three months ended March 31,
Items		Notes			March 31, 2024			2024				2023
Other comprehensive income (loss)
Components of other comprehensive income
(loss) that will not be reclassified to profit
or loss
Gain on remeasurements of defined benefit
plans			$	16		$	523		$	29,202
Unrealised (loss) gain on valuation of equity	6(3)
investment at fair value through other
comprehensive income			(	4,896)	(		156,682)			639,635
Income tax related to components of other	6(27)
comprehensive income that will not be
reclassified to profit or loss					-				-		(		86,143)
Other comprehensive (loss) income that will
not be reclassified to profit or loss			(	4,880)	(		156,159)			582,694
Components of other comprehensive income
(loss) that will be reclassified to profit or
loss
Financial statements translation differences
of foreign operations					237,641				7,604,494		(		923,684)
Share of other comprehensive (loss) income
of associates and joint ventures accounted
for under the equity method that will be
reclassified to profit or loss			(	21)	(		675)			356
Income tax relating to the components of	6(27)
other comprehensive (loss) income that
will be reclassified to profit or loss			(	12,584)	(		402,675)			55,278
Other comprehensive income (loss) that will
be reclassified to profit or loss					225,036				7,201,144		(		868,050)
Other comprehensive income (loss) for the
period				$	220,156			$	7,044,985		($	285,356)
Total comprehensive income for the period				$	437,882			$	14,012,230			$	7,685,725
Profit attributable to:
Owners of the parent				$	180,116			$	5,763,716			$	6,907,725
Non-controlling interest			$	37,610		$	1,203,529		$	1,063,356
Comprehensive income attributable to:
Owners of the parent				$	373,275			$	11,944,806			$	6,486,767
Non-controlling interest			$	64,607		$	2,067,424		$	1,198,958
Earnings per share (in dollars)
Basic earnings per share	6(28)		$	0.07			$	2.22			$	2.66
Diluted earnings per share	6(28)		$	0.07			$	2.21			$	2.65

The accompanying notes are an integral part of these consolidated financial statements.

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DELTA ELECTRONICS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY THREE MONTHS ENDED MARCH 31, 2024 AND 2023(EXPRESSED IN THOUSANDS OF DOLLARS)

											Equity attributable to owners of the parent
													Retained Earnings					Other Equity Interest
																									Unrealised gain
																										(loss) on
																						Financial		financial assets
																						statements		measured at fair
																						translation			value through
																						differences of			other		Gain (loss)
				Share capital -													Unappropriated			foreign		comprehensive		on hedging					Non-controlling
Items		Notes	common stock		Capital surplus			Legal reserve		Special reserve	retained earnings			operations			income	instruments			Total		interest			Total equity
2023 New Taiwan Dollars
Balance at January 1, 2023				$	25,975,433		$	49,321,767		$	32,386,305	$	16,166,722			$	65,907,358	( $	2,530,216) ( $	568,379)	$	129,917	$	186,788,907		$	38,578,278	$	225,367,185
Profit for the period					-			-			-				-				6,907,725			-			-			-			6,907,725			1,063,356			7,971,081
Other comprehensive income (loss) for the period					-			-			-				`-				19,187	(		993,637)			553,492			-	(		420,958 )		135,602	(		285,356)
Total comprehensive income (loss) for the period					-			-			-				-				6,926,912	(		993,637)			553,492			-			6,486,767			1,198,958			7,685,725
Changes in non-controlling interests					-			-			-				-				-			-			-			-			-			786,069			786,069
Balance at March 31, 2023				$	25,975,433	$	49,321,767	$	32,386,305	$	16,166,722			$	72,834,270	( $	3,523,853) ( $	14,887)	$	129,917	$	193,275,674		$	40,563,305	$	233,838,979
2024 New Taiwan Dollars
Balance at January 1, 2024				$	25,975,433		$	54,636,991	$	35,674,625	$	2,968,678			$	83,903,789	( $	3,445,612) ( $	680,043)	$	129,917	$	199,163,778		$	43,571,715	$	242,735,493
Profit for the period					-			-			-				-				5,763,716			-			-			-			5,763,716			1,203,529			6,967,245
Other comprehensive income (loss) for the period					-			-			-				-				523			6,337,294	(		156,727)		-			6,181,090			863,895			7,044,985
Total comprehensive income (loss) for the period					-			-			-				-				5,764,239			6,337,294	(		156,727)		-			11,944,806			2,067,424			14,012,230
Disposal of investments in equity instruments designated
at fair value through other comprehensive income					-			-			-				-				1,232			-	(		1,232)		-			-			-			-
Changes in non-controlling interests					-			-			-				-				-			-			-			-			-			8,677			8,677
Balance at March 31, 2024				$	25,975,433		$	54,636,991		$	35,674,625	$	2,968,678			$	89,669,260	$	2,891,682	( $	838,002)	$	129,917	$	211,108,584		$	45,647,816	$	256,756,400

The accompanying notes are an integral part of these consolidated financial statements.

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DELTA ELECTRONICS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY THREE MONTHS ENDED MARCH 31, 2024 AND 2023(EXPRESSED IN THOUSANDS OF DOLLARS)

											Equity attributable to owners of the parent
													Retained Earnings						Other Equity Interest
																								Unrealised gain
																									(loss) on
																						Financial		financial assets
																						statements		measured at fair
																						translation			value through
																						differences of			other		Gain (loss)
				Share capital -													Unappropriated			foreign		comprehensive		on hedging					Non-controlling
Items		Notes	common stock		Capital surplus			Legal reserve		Special reserve		retained earnings			operations			income	instruments			Total			interest			Total equity
2024 US Dollars
Balance at January 1, 2024				$	811,732	$	1,707,406	$	1,114,832	$	92,771		$	2,621,993	( $	107,675) ( $	21,251)	$	4,060	$	6,223,868	$	1,361,616	$	7,585,484
Profit for the period					-			-			-				-				180,116			-			-			-			180,116			37,610			217,726
Other comprehensive income (loss) for the period					-			-			-				-				16			198,040	(		4,897)		-			193,159			26,997			220,156
Total comprehensive income (loss) for the period					-			-			-				-				180,132			198,040	(		4,897)		-			373,275			64,607			437,882
Disposal of investments in equity instruments designated
at fair value through other comprehensive income					-			-			-				-				39			-	(		39)		-			-			-			-
Changes in non-controlling interests					-			-			-				-				-			-			-			-			-			271			271
Balance at March 31, 2024				$	811,732		$	1,707,406		$	1,114,832	$	92,771		$	2,802,164	$	90,365	( $	26,187)	$	4,060	$	6,597,143	$	1,426,494	$	8,023,637

The accompanying notes are an integral part of these consolidated financial statements.

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