NANTEX Industry : CONSOLIDATED FINANCIAL STATEMENTS 2022Q3

NANTEX INDUSTRY CO., LTD. AND

SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND

INDEPENDENT AUDITORS' REVIEW REPORT

SEPTEMBER 30, 2022 AND 2021

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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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INDEPENDENT AUDITORS' REVIEW REPORT TRANSLATED FROM CHINESE

To the Board of Directors and Shareholders of NANTEX INDUSTRY CO., LTD.

Introduction

We have reviewed the accompanying consolidated balance sheets of NANTEX INDUSTRY CO., LTD. and subsidiaries (the "Group") as at September 30, 2022 and 2021, and the related consolidated statements of comprehensive income for the three months and nine months then ended, as well as the related consolidated statements of changes in equity and of cash flows for the nine months then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies. Management is responsible for the preparation and fair presentation of these 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" as endorsed by the Financial Supervisory Commission. Our responsibility is to express a conclusion on these consolidated financial statements based on our reviews.

Scope of review

Except as explained in the following paragraph, we conducted our reviews in accordance with the Statement of Auditing Standards No. 65, "Review of Financial Information Performed by the Independent Auditor of the Entity" in the Republic of China. A review of 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 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), the financial statements and related information disclosed in Note 13 of an insignificant consolidated subsidiary, Nanmat Technology Co., Ltd., were not reviewed by independent auditors. Total assets of the subsidiary amounted to NT$1,811,007 thousand and NT$1,391,254 thousand, constituting 10.33% and 6.99% of the consolidated total assets, and total liabilities amounted to NT$466,423 thousand and NT$484,157 thousand, constituting 20.65% and 12.49% of the consolidated total liabilities as at September 30, 2022 and 2021, respectively, and the total

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comprehensive income amounted to NT$94,247 thousand, NT$79,061 thousand, NT$243,569 thousand, and NT$191,880 thousand, constituting 22.97%, 5.24%, 13.07% and 2.85% of the consolidated total comprehensive income for the three months and nine months then ended, respectively.

Qualified conclusion

Except for the adjustments to the consolidated financial statements, if any, as might have been determined to be necessary had the financial statements of an insignificant consolidated subsidiary and the information disclosed in Note 13 been reviewed by independent auditors as described in the Basis for qualified conclusion section above, 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 the Group as at September 30, 2022 and 2021, and of its consolidated financial performance for the three months and nine months then ended and its consolidated cash flows for the nine months then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34, "Interim Financial Reporting" as endorsed by the Financial Supervisory Commission.

Lin, Yung-Chih

Independent Accountants

Lin, Tzu-Shu

PricewaterhouseCoopers, Taiwan

Republic of China

November 10, 2022

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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 audit 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 independent auditors' report 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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NANTEX INDUSTRY CO., LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

SEPTEMBER 30, 2022, DECEMBER 31, 2021 AND SEPTEMBER 30, 2021

(Expressed in thousands of New Taiwan dollars)

(The balance sheets as of September 30, 2022 and 2021 are reviewed, not audited)

September 30, 2022

December 31, 2021

September 30, 2021

Assets

Notes

AMOUNT

%

AMOUNT

%

AMOUNT

%

Current assets

1100	Cash and cash equivalents	6(1)
1110	Current financial assets at fair	6(2)
	value through profit or loss
1136	Current financial assets at	6(1)(3) and 8
	amortised cost
1150	Notes receivable, net	6(4)
1170	Accounts receivable, net	6(4)
1200	Other receivables
130X	Inventories	6(5)
1410	Prepayments
11XX	Total current assets
	Non-current assets
1517	Non-current financial assets at	6(6)
	fair value through other
	comprehensive income
1600	Property, plant and equipment	6(7) and 8
1755	Right-of-use assets	6(8) and 7
1780	Intangible assets	6(9)
1840	Deferred income tax assets	6(24)
1915	Prepayments for equipment	6(7)
1920	Guarantee deposits paid	8
1975	Net defined benefit asset	6(14)
1990	Other non-current assets
15XX	Total non-current assets
1XXX	Total assets

$	9,890,5718	56	$	10,997,019	$	8,312,3753,	42
	30,390	-		31,080					-		-
	343266	2		2,377272		3,34227	17
	18		1		235		76910		2,	27643	1
	79039901	5							929	6
	1,678	847	10		1,58652031		1,297		216
	66		-		04447			12		150		1
							813
	13,855563	762		16,812183328456		16,10193630390
	36,2				,					,
	631241	4		4782402			4927635,		2
	2,7079613725853893	16-		2,8549581057021445		2,736685110200	14-
	8									1
			-				9			881935
	50006	1		65		57030
	,1145,		,3328,		,14769,		2
$	(Continued)4184361	10024	$	364201100917	$		347266655-
1741478534160	203939751		8	1938294		90883	10019
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NANTEX INDUSTRY CO., LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

SEPTEMBER 30, 2022, DECEMBER 31, 2021 AND SEPTEMBER 30, 2021

(Expressed in thousands of New Taiwan dollars)

(The balance sheets as of September 30, 2022 and 2021 are reviewed, not audited)

						September 30, 2022				December 31, 2021		September 30, 2021
	Liabilities and Equity		Notes		AMOUNT		%				AMOUNT		%			AMOUNT		%
	Current liabilities
2100	Short-term borrowings	6(10)																	9					90		994
2110	Short-term notes and bills	6(11)
	payable
2130	Current contract liabilities	6(17)
2150	Notes payable										-																		-
2170	Accounts payable
2200	Other payables	6(12)			1,028										4,										154
2230	Current income tax liabilities	6(24)			1,								1,											1,9
2280	Current lease liabilities	6(8) and 7	$	120000			1	$			2,							$			000
2320	Long-term liabilities, current	6(13) and 8				170000							1
	portion					20000253											0						2		000
2365	liabilities														7550					480
Current refund liabilities															0,
21XX	Total current liabilities					9299353							96		0		3							818
	Equity					1,804196		10								82					3,447229		17
	Non-current liabilities							-			2								-								65	2
2540	Long-term borrowings	6(13) and 8		81769						414479								73
2570	parent	6(24)			500			6							667								67	8
Deferred income tax liabilities				492						676682					318		680
2580	Share capital	6(8) and 7		3804				2					0475						2
Non-current lease liabilities		457806			1				162411,							6
2640	Net defined benefit liabilities	6(14)			1198319245-13526957	-
25XX	Capital surplus						728							1392
Total non-current							-									418								-
2XXX	Total liabilities					5,					3						,837						,
3310	Legal reserve					2,28449		1				3,998									3,877491		19
	Equity attributable to owners of										1			3,591			21					57			94
3110	Common stock	6(15)			4,924,17													25
3200	Capital surplus					28			4,924,167					4,924,167
				447		6							407									430262	2
	Retained earnings	6(16)
						227			14			168								68				8
3XXX	Total equity					1,,			8			16,		,3						1,3,		66	45
3320	commitments							2	37					3,								8,891
Special reserve																					3,
3350	Unappropriated retained
	earnings					6,490		43						9,5645									4
	Other equity interest
3400	Other equity interest	6(6)				3													6
31XX	Total equity attributable to						8				-							60819					42078)2)
	owners of the parent																			51		608	-
36XX	Non-controlling interest					448746			43				545542079							60	783
				8837							43			4482					5061			2
					334														43		5824
	Significant contingent liabilities	7 and 9		219171(399)()(		19,914,838100607348781
	and unrecognised contract
3X2X	Total liabilities and equity
					$	17,534,1605275711	1007	$	20,751,57075273				$
	The accompanying notes are an integral part of these consolidated financial statements.

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