Vanguard International Semiconductor : Consolidated Financial Report - 1Q23

Vanguard International Semiconductor Corporation and Subsidiaries

Consolidated Financial Statements for the

Three Months Ended March 31, 2023 and 2022 and Independent Auditors' Review Report

The engagement partners on the reviews resulting in this independent auditors' review report are Tung-Hui Yeh and Yu-Feng Huang.

Deloitte & Touche

Taipei, Taiwan

Republic of China

May 2, 2023

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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VANGUARD INTERNATIONAL SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (In Thousands of New Taiwan Dollars)

			March 31, 2023						December 31, 2022				March 31, 2022						March 31, 2023						December 31, 2022				March 31, 2022
			Reviewed						Audited						Reviewed						Reviewed						Audited						Reviewed
ASSETS			Amount	%					Amount	%					Amount	%		LIABILITIES AND EQUITY			Amount	%					Amount	%					Amount	%
CURRENT ASSETS																					CURRENT LIABILITIES
Cash and cash equivalents (Notes 6 and 32)	$	25,723,694		25	$	28,667,875	29	$	25,977,069	30	Financial liabilities at fair value through profit or loss (Notes 7
Financial assets at fair value through profit or loss (Notes 7 and																					and 32)	$	7,747		-	$	2,070	-	$	3,153	-
32)			885,083		1				901,040	1				406,835	1	Contract liabilities (Notes 25 and 33)			4,948,819		5				4,116,402	4				2,744,429	3
Financial assets at amortized cost (Notes 9, 10 and 32)			4,614,839		5				3,084,490	3				2,618,365	3	Notes and accounts payable (Note 32)			1,096,822		1				1,376,812	1				1,467,106	2
Hedging financial assets (Notes 11 and 32)			2,703,846		3				2,189,408	2				3,449,261	4	Accrued compensation of employees and remuneration of directors
Notes and accounts receivable, net (Notes 12, 25 and 32)			4,602,797		5				4,625,288	5				8,803,478	10	(Notes 26 and 32)			3,757,190		4				3,397,775	4				3,281,648	4
Receivables from related parties (Notes 25, 32 and 33)			197,437		-					336,705	-				216,807	-	Payables to contractors and equipment suppliers (Note 32)			1,825,536		2				2,221,296	2				2,262,653	3
Other receivables (Note 32)			418,432		-					403,883	-				473,389	1	Other payables (Notes 20 and 32)			4,056,379		4				5,022,949	5				4,183,936	5
Other receivables from related parties (Notes 32 and 33)			-	-					-	-				570	-	Other payables to related parties (Notes 32 and 33)			2,568		-				959	-				5,110	-
Inventories (Note 13)			6,160,454		6				5,880,152	6				4,256,627	5	Current income tax liabilities (Notes 4 and 27)			3,090,537		3				2,818,351	3				2,775,752	3
Prepayments			317,467		-					161,534	-				316,468	-	Lease liabilities (Notes 17, 30 and 32)			223,327	-				219,137	-				229,651	-
Other current assets (Note 19)			4,874		-					5,112	-				4,493	-	Other current liabilities (Notes 21, 30 and 32)			2,389,354		2				1,917,727	2				1,062,059	1
Total current assets			45,628,923		45				46,255,487	46				46,523,362	54	Total current liabilities			21,398,279		21				21,093,478	21				18,015,497	21
NON-CURRENT ASSETS																					NON-CURRENT LIABILITIES
Financial assets at fair value through other comprehensive income																					Contract liabilities (Note 25)			12,740,462		13				13,133,211	13				8,971,789	10
(Notes 8 and 32)			891,828		1				878,631	1				779,188	1	Bonds payable (Notes 22, 30 and 32)			11,988,132		12				11,987,369	12				11,985,046	14
Financial assets at amortized cost (Notes 9, 10 and 32)			9,415,119		9				8,701,741	9				5,189,540	6	Deferred income tax liabilities (Notes 4 and 27)			781,515		1				604,135	1				340,462	-
Investments accounted for using equity method (Note 15)			213,712		-					217,893	-				203,648	-	Lease liabilities (Notes 17, 30 and 32)			2,327,495		2				2,341,724	2				2,246,849	3
Property, plant and equipment (Note 16)			39,271,035		39				38,504,205	38				28,790,557	34	Net defined benefit liabilities (Notes 4 and 23)			342,969		-				372,898	-				501,609	1
Right-of-use assets (Note 17)			2,979,130		3				3,002,982	3				2,905,681	4	Guarantee deposits (Notes 30, 32 and 33)			5,531,658		5				6,000,939	6				3,639,427	4
Intangible assets (Note 18)			238,530		-					267,914	-				193,999	-	Other non-current liabilities (Note 21)			56,534	-				55,661	-				49,683	-
Deferred income tax assets (Notes 4 and 27)			1,025,431		1				890,112	1				270,316	-
Refundable deposits (Note 32)			4,179		-					4,923	-				3,541	-	Total non-current liabilities			33,768,765		33				34,495,937	34				27,734,865	32
Other non-current assets (Notes 19, 32 and 34)			2,112,396		2				2,216,031	2				850,846	1
																					Total liabilities			55,167,044	54				55,589,415	55				45,750,362	53
Total non-current assets			56,151,360	55				54,684,432	54				39,187,316	46
																					EQUITY (Notes 8, 11 and 24)
																					Share capital			16,389,823		16				16,389,823	16				16,389,823	19
																					Capital surplus			914,321		1				914,062	1				898,130	1
																					Retained earnings
																					Legal reserve			7,501,254		7				7,501,254	8				6,335,395	7
																					Special reserve			1,987,531		2				1,987,531	2				1,657,068	2
																					Unappropriated earnings			19,771,606		20				18,407,787	18				15,964,196	19
																					Total retained earnings			29,260,391		29				27,896,572	28				23,956,659	28
																					Other equity			48,704	-				150,047	-				(1,284,296)	(1)
																					Total equity			46,613,239		46				45,350,504	45				39,960,316	47
TOTAL ASSETS	$	101,780,283		100		$	100,939,919	100	$	85,710,678	100	TOTAL LIABILITIES AND EQUITY		$	101,780,283		100	$	100,939,919	100	$	85,710,678	100

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

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VANGUARD INTERNATIONAL SEMICONDUCTOR 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 March 31
	2023				2022
		Amount	%				Amount	%
NET REVENUE (Notes 17, 25 and 33)	$ 8,186,889		100		$ 13,492,091	100
COST OF REVENUE (Notes 13, 26 and 33)		5,728,235		70			6,966,013	52
GROSS PROFIT		2,458,654		30			6,526,078	48
OPERATING EXPENSES (Notes 26 and 33)
Marketing	86,578		1		141,323	1
General and administrative	444,493		5		734,092	5
Research and development		562,289		7			662,794	5
Total operating expenses		1,093,360		13			1,538,209	11
OPERATING INCOME		1,365,294		17			4,987,869	37
NON-OPERATING INCOME AND EXPENSES
Interest income (Note 26)	385,971		5		38,865	1
Other income (Note 33)	1,570		-		29,616	-
Gain on disposal of property, plant and equipment	15		-		-		-
Net foreign exchange gain	28,761		-		22,094	-
Interest expense (Note 26)	(45,802)	(1)	(28,444)	-
(Loss) gain on financial assets and liabilities at fair
value through profit or loss (Note 26)	(33,102)	-		18,558	-
Share of profit or loss of associates and joint
ventures accounted for using equity method		(2,764)	-		2,532	-
Total non-operating income and expenses		334,649		4			83,221	1
INCOME BEFORE INCOME TAX		1,699,943		21			5,071,090	38
INCOME TAX EXPENSE (Notes 4 and 27)		(336,124)	(4)	(979,477)	(8)
NET INCOME		1,363,819		17			4,091,613	30
								(Continued)

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