Weikeng Industrial : 2022 Q3 Consolidated Financial Statement

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Stock Code:3033

WEIKENG INDUSTRIAL CO., LTD. AND

SUBSIDIARIES

Consolidated Financial Statements

With Independent Auditors' Review Report

For the Nine Months Ended September 30, 2022 and 2021

Address:	11F., No.308, Sec.1, Neihu Rd., Neihu Dist., Taipei City
Telephone:	[phone]

The independent auditors' review report and the accompanying consolidated financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language independent auditors' review report and consolidated financial statements, the Chinese version shall prevail.

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Table of contents

		Contents		Page
1.	Cover Page	1
2.	Table of Contents	2
3.	Independent Auditors' Review Report	3
4.	Consolidated Balance Sheets	4
5.	Consolidated Statement of Comprehensive Income	5
6.	Consolidated Statement of Changes in Equity	6
7.	Consolidated Statement of Cash Flows	7
8.	Notes to the Consolidated Financial Statements
	(1)	Company history	8
	(2)	Approval date and procedures of the consolidated financial statements	8
	(3)	New standards, amendments and interpretations adopted		8～10
	(4)	Summary of significant accounting policies		10～11
	(5)	Significant accounting assumptions and judgments, and major sources	11
		of estimation uncertainty
	(6)	Explanation of significant accounts		12～39
	(7)	Related-party transactions		39～40
	(8)	Assets pledged as security	40
	(9)	Commitments and contingencies	40
	(10)	Losses Due to Major Disasters	40
	(11)	Subsequent Events	40
	(12)	Other	41
	(13)	Other disclosures
		(a) Information on significant transactions		41～44
		(b) Information on investees	44
		(c) Information on investment in mainland China	45
		(d) Major shareholders	46
	(14)	Segment information	46

KPMG

台北市110615信義路5段7號68樓(台北101大樓) 68F., TAIPEI 101 TOWER, No. 7, Sec. 5, Xinyi Road, Taipei City 110615, Taiwan (R.O.C.)

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電	話 Tel	+ 886 2 8101 6666
傳	真 Fax	+ 886 2 8101 6667
網	址 Web	home.kpmg/tw

Independent Auditors' Review Report

To the Board of Directors of Weikeng Industrial Co., Ltd.:

Introduction

We have reviewed the accompanying consolidated balance sheets of Weikeng Industrial Co., Ltd. and its subsidiaries as of September 30, 2022 and 2021, and the related consolidated statements of comprehensive income for the three months and nine months ended September 30, 2022 and 2021, as well as the changes in equity and cash flows for the nine months ended September 30, 2022 and 2021, 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 34, "Interim Financial Reporting" endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China. Our responsibility is to express a conclusion on the consolidated financial statements based on our reviews.

Scope of Review

We conducted our reviews in accordance with Statement of Auditing Standard 65, " Review of Financial Information Performed by the Independent Auditor of the Entity" . A review of the consolidated financial statements 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 conducted in accordance with the generally accepted auditing standards 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.

Conclusion

Based on our reviews, nothing has come to our attention that causes us to believe that the accompanying consolidated financial statements do not present fairly, in all material respects, the consolidated financial position of Weikeng Industrial Co., Ltd. and its subsidiaries as of September 30, 2022 and 2021, and of its consolidated financial performance for the three months and nine months ended September 30, 2022 and 2021, as well as its consolidated cash flows for the nine months ended September 30, 2022 and 2021 in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34, " Interim Financial Reporting" endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

KPMG, a Taiwan partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee.

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The engagement partners on the review resulting in this independent auditors' review report are Yiu-Kwan Au and Kuan-Ying Kuo.

KPMG

Taipei, Taiwan (Republic of China)

November 11, 2022

Notes to Readers

The accompanying consolidated financial statements are intended only to present the consolidated financial position, financial performance and cash flows in accordance with the accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to review such consolidated financial statements are those generally accepted and applied in the Republic of China.

The independent auditors' review report and the accompanying consolidated financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language independent auditors' review report and consolidated financial statements, the Chinese version shall prevail.

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(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

Reviewed only, not audited in accordance with generally accepted auditing standards as of September 30, 2022 and 2021

WEIKENG INDUSTRIAL CO., LTD. AND SUBSIDIARIES

Consolidated Balance Sheets

September 30, 2022, December 31, and September 30, 2021

(Expressed in Thousands of New Taiwan Dollars)

		September 30, 2022	December 31, 2021	September 30, 2021
	Assets		Amount	%		Amount	%		Amount	%
	Current assets:
1100	Cash and cash equivalents (note (6)(a))	$	2,325,715	6	2,266,607		8		2,376,929		9
1110	Current financial assets at fair value through profit or
	loss (note (6)(b))		656	-		607	-		563		-
1170	Notes and accounts receivable, net (notes (6)(d) and
	(7))		15,245,893		41		13,548,981		49		13,699,644		51
1200	Other receivables (notes (6)(d) and (6)(e))		365,578	1	376,347	1	378,657		1
1300	Inventories, net (note (6)(f))		18,128,743	49	10,286,868	38	9,557,803		35
1470	Prepaid expenses and other current assets		227,225		1		197,132		1		220,274		1
			36,293,810		98		26,676,542		97		26,233,870		97
	Non-current assets:
1510	Non-current financial assets at fair value through
	profit or loss (note (6)(b))		-		-		375	-		523		-
1517	Non-current financial assets at fair value through
	other comprehensive income (note (6)(c))		81,077	-		40,065	-		39,823		-
1600	Property, plant and equipment (note (6)(g))		133,299	1	133,459	1	133,457		1
1755	Right-of-use assets (note (6)(h))		319,716	1	317,375		1		238,199		1
1780	Intangible assets		16,716		-		30,480		-		36,964		-
1840	Deferred tax assets		87,889	-		262,057	1	223,435		1
1900	Other non-current assets		81,483		-		74,877		-		74,735		-
			720,180		2		858,688		3		747,136		3

		September 30, 2022	December 31, 2021	September 30, 2021
	Liabilities and Equity		Amount	%			Amount	%			Amount	%
	Current liabilities:
2100	Short-term borrowings (note (6)(i))	$	15,458,863	41	10,996,048	40		10,021,657		36
2130	Current contract liabilities (note (6)(r))		238,246	1	305,931	1	271,609		1
2170	Accounts payable		7,113,168		19		5,308,148		19		6,686,998		25
2200	Other payables (notes (6)(j) and (7))		852,444	2	952,772	4	679,572		3
2230	Current tax liabilities		741,042	2	361,274	1	528,269		2
2280	Current lease liabilities (note (6)(l))		136,979	1	135,160	1	105,023		-
2300	Other current liabilities		440,178			1			318,617			1			321,827			1
			24,980,920		67		18,377,950		67		18,614,955		68
	Non-current liabilities:
2500	Non-current financial liabilities at fair value through
	profit or loss (note (6)(b))		35,000		-		-		-		-		-
2530	Convertible bonds payable (note (6)(k))		1,864,893	5	126,336		-		410,000		2
2570	Deferred tax liabilities		697,599	2	697,487	3	408,412		2
2580	Non-current lease liabilities (note (6)(l))		196,287	1	188,566		1		137,120		1
2640	Non-current net defined benefit liabilities
	(note (6)(n))		112,794	-		122,222	-		115,865		-
2670	Other non-current liabilities		181			-			181			-			181			-
			2,906,754			8			1,134,792			4			1,071,578			5
	Total liabilities		27,887,674		75		19,512,742		71		19,686,533		73
	Equity (note (6)(p)):

									3100	Ordinary shares		4,235,432		11		4,159,342		15		3,990,554		15
									3200	Capital surplus		1,440,698		4		1,275,927		5		1,160,270		4
														Retained earnings:
									3310	Legal reserve		1,132,248		3		960,709		4		960,709		4
									3320	Special reserve		454,583	1	365,705	1	365,705		1
									3350	Unappropriated retained earnings		1,605,974		5		1,715,388		6		1,261,865		4
																3,192,805		9		3,041,802		11		2,588,279		9
														Other equity interest:
									3410	Exchange differences on translation of foreign
														financial statements		338,739	1	(373,405)	(2)	(363,211)	(1)
									3420	Unrealized gains (losses) from financial assets
														measured at fair value through other
														comprehensive income		(81,358)	-		(81,178)	-		(81,419)	-
																257,381		1		(454,583)	(2)	(444,630)	(1)
														Total equity		9,126,316		25		8,022,488		29		7,294,473		27
Total assets	$	37,013,990 100	27,535,230 100	26,981,006 100		Total liabilities and equity	$	37,013,990		100		27,535,230		100		26,981,006		100

See accompanying notes to consolidated financial statements.