Weikeng Industrial : 2022 Q2 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 Six Months Ended June 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		8～9
	(4)	Summary of significant accounting policies		9～11
	(5)	Significant accounting assumptions and judgments, and major sources	11
		of estimation uncertainty
	(6)	Explanation of significant accounts		11～37
	(7)	Related-party transactions		37～39
	(8)	Assets pledged as security	39
	(9)	Commitments and contingencies	39
	(10)	Losses Due to Major Disasters	39
	(11)	Subsequent Events	39
	(12)	Other		39～40
	(13)	Other disclosures
		(a) Information on significant transactions		40～43
		(b) Information on investees	43
		(c) Information on investment in mainland China		43～44
		(d) Major shareholders	44
	(14)	Segment information	45

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 June 30, 2022 and 2021, and the related consolidated statements of comprehensive income for the three months and six months ended June 30, 2022 and 2021, as well as the changes in equity and cash flows for the six months ended June 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 June 30, 2022 and 2021, and of its consolidated financial performance for the three months and six months ended June 30, 2022 and 2021, as well as its consolidated cash flows for the six months ended June 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)

August 10, 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 June 30, 2022 and 2021

WEIKENG INDUSTRIAL CO., LTD. AND SUBSIDIARIES

Consolidated Balance Sheets

June 30, 2022, December 31, and June 30, 2021

(Expressed in Thousands of New Taiwan Dollars)

			June 30, 2022			December 31, 2021	June 30, 2021				June 30, 2022			December 31, 2021		June 30, 2021
	Assets		Amount	%		Amount	%		Amount	%		Liabilities and Equity		Amount	%			Amount	%				Amount	%
	Current assets:														Current liabilities:
1100	Cash and cash equivalents (note (6)(a))	$	1,861,994	6	2,266,607	8	2,940,892	12	2100	Short-term borrowings (note (6)(i))	$	10,359,597		34	10,996,048	40		8,819,187			36
1110	Current financial assets at fair value through profit or													2130	Current contract liabilities (note (6)(r))		236,537		1	305,931	1	281,257			1
1170	loss (note (6)(b))		809	-		607	-		622	-	2170	Notes and accounts payable		5,983,503		19	5,308,148	19	6,254,626			25
Notes and accounts receivable, net (notes (6)(d) and		13,517,700		44		13,548,981		49		12,300,609	49	2200	Other payables (notes (6)(j) and (7))		856,180		3	952,772	4	501,062			2
	(7))						2216	Dividends payable		1,270,232			4		-		-			494,508			2
1200	Other receivables (notes (6)(d) and (6)(e))		348,868	1	376,347	1	315,084	1
	2230	Current tax liabilities		630,824		2	361,274	1	336,864			2
1300	Inventories, net (note (6)(f))		14,399,395	46	10,286,868	38	8,303,299	33
	2280	Current lease liabilities (note (6)(l))		111,949		-		135,160	1	113,797			-
1470	Prepaid expenses and other current assets		203,213		1		197,132		1		338,133		2
					2300	Other current liabilities		392,277			1			318,617			1			308,222			1
			30,331,979		98		26,676,542		97		24,198,639	97
	Non-current assets:							Non-current liabilities:		19,841,099			64		18,377,950		67		17,109,523			69
1510	Non-current financial assets at fair value through
												2500	Non-current financial liabilities at fair value through
	profit or loss (note (6)(b))		25	-		375		-		-	-
						profit or loss (note (6)(b))		32,200			-		-		-			3,800			-
1517	Non-current financial assets at fair value through
												2530	Convertible bonds payable (note (6)(k))		1,875,283		6	126,336		-			889,578			3
	other comprehensive income (note (6)(c))		39,921	-		40,065	-		47,111	-
				2570	Deferred tax liabilities		697,540		2	697,487	3	408,415			2
1600	Property, plant and equipment (note (6)(g))		132,043	-		133,459	1	135,013	1
		2580	Non-current lease liabilities (note (6)(l))		154,387		1	188,566		1		159,653			1
1755	Right-of-use assets (note (6)(h))		256,748	1	317,375		1		271,142	1
			2640	Non-current net defined benefit liabilities
1780	Intangible assets		22,739		-		30,480		-		43,525	-
						(note (6)(n))		114,636		-		122,222	-			117,641			-
1840	Deferred tax assets		185,640	1	262,057	1	218,146	1
	2670	Other non-current liabilities		181			-			181			-				181			-
1900	Other non-current assets		78,066		-		74,877		-		73,777		-
								2,874,227			9			1,134,792			4			1,579,268			6
			715,182		2		858,688		3		788,714	3		Total liabilities
									22,715,326			73		19,512,742		71		18,688,791			75
															Equity (note (6)(p)):
														3100	Ordinary shares		4,223,886			13			4,159,342			15			3,703,940			15
														3200	Capital surplus		1,434,828			5		1,275,927		5		962,097			4
															Retained earnings:
														3310	Legal reserve		1,132,248			4		960,709		4		890,626			3
														3320	Special reserve		454,583		1	365,705	1	229,459			1
														3350	Unappropriated retained earnings		1,233,485			4			1,715,388			6			935,720			4
																	2,820,316			9		3,041,802		11		2,055,805			8
															Other equity interest:
														3410	Exchange differences on translation of foreign
															financial statements		(65,873)		-		(373,405)	(2)	(342,056)		(2)
														3420	Unrealized gains (losses) from financial assets
															measured at fair value through other
															comprehensive income		(81,322)		-		(81,178)	-			(81,224)		-
																	(147,195)		-		(454,583)	(2)	(423,280)		(2)
	Total assets	$	31,047,161		100		27,535,230		100		24,987,353	100		Total equity		8,331,835			27			8,022,488			29			6,298,562			25
						Total liabilities and equity	$	31,047,161			100		27,535,230		100		24,987,353			100

See accompanying notes to consolidated financial statements.