Taiwan Cogeneration : 2022YearsQ3 Consolidated Financial Statements

Taiwan Cogeneration Corporation and Subsidiaries

Consolidated Financial Statements for the

Nine Months Ended September 30, 2022 and 2021 and Independent Auditors' Review Report

Emphasis of Matter

For details on Taiwan Power Company's filing of a civil lawsuit against the Group's associates, Sun Ba Power Corporation, Star Energy Power Corporation, Star Buck Power Corporation, and Kuo Kuang Power Company Ltd., in connection with their alleged violation of the Fair Trade Act and request for compensation on the basis of claims for damages which it has suffered, refer to Note 37d. Our review conclusion is not modified in respect of this matter.

The engagement partners on the reviews resulting in this independent auditors' review report are Chao-Mei Chen and Cheng-Chuan Yu.

Deloitte & Touche

Taipei, Taiwan

Republic of China

November 10, 2022

Notice to Readers

The accompanying consolidated financial statements are intended only to present the consolidated financial position, financial performance and cash flows in accordance with 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 applied in the Republic of China.

For the convenience of readers, the independent auditors' review report and the accompanying consolidated financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language independent auditors' review report and consolidated financial statements shall prevail.

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TAIWAN COGENERATION CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (In Thousands of New Taiwan Dollars)

																			September 30, 2021
			September 30, 2022						December 31, 2021				(Retrospectively Adjusted
			(Reviewed)						(Audited)				and Reviewed) (Note 15)
ASSETS			Amount	%					Amount	%					Amount	%
CURRENT ASSETS
Cash and cash equivalents (Notes 6 and 30)	$	2,594,186			11		$	2,763,822		12	$	2,315,927		10
Contract assets (Notes 5, 24, 26 and 35)			2,153,558			9					2,641,399		11				2,541,052		11
Accounts receivable (Notes 7 and 26)			181,675			1					455,579		2					548,809		3
Accounts receivable from related parties (Notes 26 and 35)			257,172			1					96,065		1					130,314		1
Finance lease receivables (Notes 8 and 35)			10,299		-					10,224		-					10,199		-
Dividends receivable (Note 12)			-			-					-		-					78,824		-
Other receivables (Note 35)			17,552		-					36,224		-					3,974		-
Inventories (Note 9)			15,676		-					13,187		-					8,454		-
Prepaid construction costs (Note 24)			46,326		-					18,279		-					18,279		-
Prepaid value-added tax			99,424		1					80,548		-					67,870		-
Other financial assets (Note 36)			20,336		-					1,646		-					6,905		-
Other current assets (Note 30)			36,386		-					35,484		-					29,456		-
Total current assets			5,432,590			23					6,152,457		26				5,760,063		25
NON-CURRENT ASSETS
Financial assets at fair value through other comprehensive income (Notes 10 and 34)			267,310			1					275,310		1					254,400		1
Investments accounted for using the equity method (Note 12)			12,556,172		54					12,750,996			53				12,597,699		54
Property, plant and equipment (Notes 13 and 36)			3,173,603			14					3,009,667		12				2,962,844		13
Right-of-use assets (Notes 14, 15, 30 and 35)			426,499			2					447,802		2					461,353		2
Goodwill (Notes 15 and 30)			141,014			1					141,014		1					141,014		-
Intangible assets (Note 16)			890,984			4					903,256		4					892,782		4
Deferred income tax assets (Notes 4 and 30)			190,759			1					197,174		1					196,918		1
Finance lease receivables (Notes 8 and 35)			13,916		-					21,649		-					24,215		-
Prepayments for equipment			1,674		-					-		-					-			-
Refundable deposits			82,117		-					89,755		-					83,334		-
Other financial assets (Note 36)			27,133		-					42,549		-					42,549		-
Other non-current assets (Note 17)			20,802		-					22,212		-					22,212		-
Total non-current assets			17,791,983			77					17,901,384		74				17,679,320		75
TOTAL	$	23,224,573			100		$	24,053,841			100	$	23,439,383		100
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Short-term borrowings (Note 18)	$	57,000		-		$	40,000		-		$	40,000		-
Short-term bills payable (Note 18)			998,834			4					499,614		2					499,595		2
Contract liabilities (Notes 5, 24, 26 and 35)			177,004			1					193,467		1					216,038		1
Notes payable			-			-					-		-					586		-
Accounts payable			149,078			1					127,468		1					93,050		1
Construction costs payable			2,703,523			12					3,348,580		14				3,143,605		14
Accounts payable to related parties (Note 35)			8,229		-					1,911		-					1,968		-
Other payables (Notes 20, 30 and 35)			234,398			1					312,635		1					327,068		1
Current income tax liabilities (Note 4)			29,568		-					50,921		-					6,406		-
Provisions (Notes 22 and 24)			263,438			1					304,799		1					300,792		1
Lease liabilities (Notes 14, 30 and 35)			48,722		-					54,533		-					51,605		-
Current portion of long-term borrowings (Notes 18 and 36)			162,558			1					115,693		1					108,188		1
Other current liabilities (Note 30)			2,278		-					17,838		-					2,305		-
Total current liabilities			4,834,630			21					5,067,459		21				4,791,206		21
NON-CURRENT LIABILITIES
Long-term borrowings (Notes 18 and 36)			3,867,115			17					3,746,919		16				3,639,673		16
Contract liabilities (Note 26)			100,496			-					56,180		-					37,702		-
Lease liabilities (Notes 14, 30 and 35)			437,279			2					448,506		2					464,041		2
Bonds payable (Note 19)			2,497,726			11					2,497,255		10				2,497,098		11
Provisions (Note 22)			14,217		-					13,986		-					13,908		-
Deferred income tax liabilities (Notes 4, 15 and 30)			70,796		-					74,201		-					64,999		-
Net defined benefit liabilities (Notes 4 and 23)			125,306			1					124,387		1					119,265		-
Guarantee deposits received			28,684		-					44,083		-					45,151		-
Other liabilities (Note 21)			15,824		-					2,802		-					2,908		-
Total non-current liabilities			7,157,443			31					7,008,319		29				6,884,745		29
Total liabilities			11,992,073			52					12,075,778			50				11,675,951		50
EQUITY ATTRIBUTABLE TO OWNERS OF THE CORPORATION (Note 25)
Share capital
Ordinary shares			5,890,486			25					5,890,486		24				5,890,486		25
Capital surplus			499,694			2					499,694		2					499,694		2
Retained earnings
Legal reserve			1,737,133			7					1,644,763		7					1,644,763		7
Special reserve			2,621,945		11					2,823,917		12				2,823,917		12
Unappropriated earnings (Note 15)			346,691			2					961,235		4					728,025		3
Total retained earnings			4,705,769			20					5,429,915		23				5,196,705		22
Other equity			(19,199)		-					11,378		-					33,740		-
Total equity attributable to owners of the Corporation			11,076,750			47					11,831,473			49				11,620,625		49
NON-CONTROLLING INTERESTS			155,750			1					146,590		1					142,807		1
Total equity			11,232,500			48					11,978,063			50				11,763,432		50
TOTAL	$	23,224,573			100		$	24,053,841			100	$	23,439,383		100
The accompanying notes are an integral part of the consolidated financial statements.
(With Deloitte & Touche review report dated November 10, 2022)

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TAIWAN COGENERATION CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In Thousands of New Taiwan Dollars, Except Earnings Per Share) (Reviewed, Not Audited)

		For the Three Months Ended September 30					For the Nine Months Ended September 30
						2021										2021
								(Retrospectively											(Retrospectively
	2022					Adjusted) (Note 15)	2022					Adjusted) (Note 15)
		Amount	%				Amount	%				Amount	%				Amount	%
OPERATING REVENUE
(Notes 26 and 35)
Sales	$ 454,933		61	$ 312,973		21	$ 1,088,537	42	$ 934,739		19
Construction services	221,141		30	1,144,249			76	1,366,357	52	3,720,851		78
Operations, maintenance and
consulting services		68,410		9	49,713		3	150,969	6	123,485		3
Total operating revenues		744,484		100	1,506,935			100	2,605,863	100	4,779,075		100
OPERATING COSTS (Notes 23,
27 and 35)
Cost of sales	386,210		52	270,758		18	959,357	37	717,644		15
Construction services	204,720		27	1,007,059			67	1,203,375	46	3,375,955		71
Operations, maintenance and
consulting services		63,353		9	48,321		3	144,481	5	118,535		2
Total operating costs		654,283		88	1,326,138			88	2,307,213	88	4,212,134		88
GROSS PROFIT		90,201		12	180,797		12	298,650	12	566,941		12
REALIZED GAIN ON
TRANSACTIONS WITH
ASSOCIATES		5,809		1	8,028		1	11,482	-	22,214		-
REALIZED GROSS PROFIT		96,010		13	188,825		13	310,132	12	589,155		12
OPERATING EXPENSES
(Notes 15, 23, 27 and 35)		90,904		12	88,240		6	267,704	10	256,598		5
PROFIT FROM OPERATIONS		5,106		1	100,585		7	42,428	2	332,557		7
NON-OPERATING INCOME
AND EXPENSES
Interest income	728		-	73		-	1,523	-	488		-
Other income (Notes 27
and 35)	2,836		-	11,886		1	17,560	-	25,321		1
Other gains and losses
(Note 27)	5,231		1	(12,931)		(1)	21,436	1	(35,016)		(1)
Finance costs (Note 27)	(24,214)	(3)	(18,024)		(1)	(60,251)	(2)	(48,759)		(1)
Share of profit of associates
accounted for using the
equity method (Note 12)	205,898		27	92,269		6	336,038	13	488,296		10
Total non-operating
income and expenses	190,479		25	73,273		5	316,306	12	430,330		9
PROFIT BEFORE INCOME
TAX	195,585		26	173,858		12	358,734	14	762,887		16
INCOME TAX EXPENSE
(Notes 4, 15 and 28)		(4,216)	-	(24,181)		(2)	(42,885)	(2)	(68,674)		(1)
NET PROFIT		191,369		26	149,677		10	315,849	12	694,213		15
																						(Continued)

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