Taiwan Cogeneration CorporationTWSE: 8926

2024YearsQ1 Consolidated Financial Statements

· Issued by Taiwan Cogeneration Corporation

Taiwan Cogeneration Corporation and Subsidiaries

Consolidated Financial Statements for the

Three Months Ended March 31, 2024 and 2023 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 38d. 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

May 9, 2024

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.

- 2 -

TAIWAN COGENERATION CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (In Thousands of New Taiwan Dollars)

ASSETS

March 31, 2024

December 31, 2023

March 31, 2023

Amount

%

Amount

%

Amount

%

CURRENT ASSETS

Cash and cash equivalents (Note 6)

$

2,488,795

10

$

1,922,822

7

$

3,429,445

14

Financial assets at amortized cost (Notes 7, 8 and 37)

87,740

-

734,293

3

20,337

-

Contract assets (Notes 5, 26, 28 and 36)

2,698,099

10

2,121,745

8

1,956,240

8

Accounts receivable (Notes 9 and 28)

367,427

1

755,728

3

216,400

1

Accounts receivable from related parties (Notes 28 and 36)

164,879

1

90,450

-

121,293

-

Finance lease receivables (Notes 10 and 36)

8,316

-

9,941

-

10,349

-

Other receivables (Note 36)

51,913

-

30,896

-

21,380

-

Inventories (Note 11)

9,953

-

7,951

-

19,896

-

Prepaid construction costs (Note 26)

-

-

-

-

57,793

-

Prepaid value-added tax

120,040

1

118,697

1

121,594

1

Other current assets

35,296

-

38,478

-

66,473

-

Total current assets

6,032,458

23

5,831,001

22

6,041,200

24

NON-CURRENT ASSETS

Financial assets at fair value through other comprehensive income (Notes 12 and 35)

268,854

1

270,054

1

264,120

1

Financial assets at amortized cost (Notes 7, 8 and 37)

16,997

-

32,631

-

21,867

-

Investments accounted for using the equity method (Note 14)

14,278,649

54

14,000,694

54

13,672,877

54

Property, plant and equipment (Notes 15 and 37)

4,204,125

16

4,286,965

17

3,403,923

13

Right-of-use assets (Note 16)

408,249

2

420,234

2

420,527

2

Goodwill (Note 17)

96,370

-

96,370

-

141,014

1

Intangible assets (Notes 18 and 37)

864,987

3

879,838

3

925,277

4

Deferred income tax assets (Notes 4 and 30)

234,708

1

232,304

1

188,800

1

Prepayments for equipment

2,905

-

-

-

1,674

-

Refundable deposits

84,449

-

84,590

-

64,987

-

Long-term finance lease receivables (Notes 10 and 36)

-

-

852

-

8,729

-

Other non-current assets (Note 19)

19,215

-

19,480

-

20,273

-

Total non-current assets

20,479,508

77

20,324,012

78

19,134,068

76

TOTAL

$

26,511,966

100

$

26,155,013

100

$

25,175,268

100

LIABILITIES AND EQUITY

CURRENT LIABILITIES

Short-term borrowings (Notes 20 and 37)

$

35,000

-

$

55,000

-

$

52,000

-

Short-term bills payable (Note 20)

999,715

4

999,130

4

999,594

4

Contract liabilities (Notes 5, 26, 28 and 36)

114

-

113,264

1

353,112

1

Accounts payable

90,321

-

105,244

-

140,341

1

Construction costs payable

3,251,096

12

2,959,261

11

3,086,979

12

Accounts payable to related parties (Note 36)

2,417

-

1,329

-

10,419

-

Other payables (Notes 22 and 36)

523,246

2

618,700

2

226,295

1

Current income tax liabilities (Note 4)

100,022

1

74,121

-

95,264

-

Provisions (Notes 24 and 26)

481,206

2

465,448

2

258,192

1

Lease liabilities (Notes 16 and 36)

61,473

-

63,743

-

62,826

-

Current portion of long-term borrowings (Notes 20 and 37)

423,971

2

161,471

1

1,121,938

5

Other current liabilities

3,586

-

4,019

-

16,004

-

Total current liabilities

5,972,167

23

5,620,730

21

6,422,964

25

NON-CURRENT LIABILITIES

Long-term borrowings (Notes 20 and 37)

1,274,539

5

1,590,437

6

2,897,266

12

Contract liabilities (Note 28)

181,348

1

168,845

1

141,841

1

Lease liabilities (Notes 16 and 36)

410,898

2

419,328

2

419,314

2

Bonds payable (Note 21)

2,498,675

9

2,498,517

10

2,498,042

10

Provisions (Note 24)

14,692

-

14,613

-

14,373

-

Deferred income tax liabilities (Note 4)

61,982

-

63,284

-

69,944

-

Net defined benefit liabilities (Notes 4 and 25)

122,256

-

121,842

-

112,582

-

Guarantee deposits received

52,740

-

53,732

-

56,841

-

Other liabilities (Note 23)

14,370

-

16,019

-

15,905

-

Total non-current liabilities

4,631,500

17

4,946,617

19

6,226,108

25

Total liabilities

10,603,667

40

10,567,347

40

12,649,072

50

EQUITY ATTRIBUTABLE TO OWNERS OF THE CORPORATION (Note 27)

Share capital

Ordinary shares

7,302,820

27

7,302,820

28

5,890,486

23

Capital surplus

2,621,919

10

2,621,919

10

499,694

2

Retained earnings

Legal reserve

1,828,961

7

1,828,961

7

1,737,133

7

Special reserve

2,435,361

9

2,435,361

9

2,621,945

10

Unappropriated earnings

1,576,414

6

1,269,700

5

1,635,960

7

Total retained earnings

5,840,736

22

5,534,022

21

5,995,038

24

Other equity

6,124

-

(9,189)

-

(18,245)

-

Total equity attributable to owners of the Corporation

15,771,599

59

15,449,572

59

12,366,973

49

NON-CONTROLLING INTERESTS

136,700

1

138,094

1

159,223

1

Total equity

15,908,299

60

15,587,666

60

12,526,196

50

TOTAL

$

26,511,966

100

$

26,155,013

100

$

25,175,268

100

The accompanying notes are an integral part of the consolidated financial statements. (With Deloitte & Touche review report dated May 9, 2024)

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TAIWAN COGENERATION CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

For the Three Months Ended March 31

2024

2023

Amount

%

Amount

%

OPERATING REVENUE (Notes 5, 28 and 36)

Sales

$ 376,583

19

$ 462,284

43

Construction services

1,579,025

78

590,308

54

Operations, maintenance and consulting services

70,913

3

31,620

3

Total operating revenues

2,026,521

100

1,084,212

100

OPERATING COSTS (Notes 5, 25, 29 and 36)

Cost of sales

286,550

14

344,911

32

Construction services

1,504,782

74

541,354

50

Operations, maintenance and consulting services

62,948

3

30,698

3

Total operating costs

1,854,280

91

916,963

85

GROSS PROFIT

172,241

9

167,249

15

REALIZED GAIN ON TRANSACTIONS WITH

ASSOCIATES

8,064

-

4,858

1

REALIZED GROSS PROFIT

180,305

9

172,107

16

OPERATING EXPENSES (Notes 25, 29 and 36)

98,659

5

107,473

10

PROFIT FROM OPERATIONS

81,646

4

64,634

6

NON-OPERATING INCOME AND EXPENSES

Interest income

4,691

-

3,049

-

Other income (Notes 29 and 36)

3,126

-

4,870

1

Other gains and losses (Note 29)

3,258

-

3,621

-

Finance costs (Note 29)

(20,588)

(1)

(29,199)

(3)

Share of profit of associates accounted for using the

equity method (Note 14)

254,124

13

654,978

61

Total non-operating income and expenses

244,611

12

637,319

59

PROFIT BEFORE INCOME TAX

326,257

16

701,953

65

INCOME TAX EXPENSE (Notes 4 and 30)

(20,937)

(1)

(21,882)

(2)

NET PROFIT

305,320

15

680,071

63

(Continued)

- 4 -

TAIWAN COGENERATION CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

For the Three Months Ended March 31

2024

2023

Amount

%

Amount

%

OTHER COMPREHENSIVE (LOSS) INCOME

Items that will not be reclassified subsequently to

profit or loss:

Unrealized loss on investments in equity

instruments at fair value through other

comprehensive income (Note 35)

$

(1,200)

-

$

(13,000)

(1)

Share of other comprehensive (loss) income of

associate accounted for using the equity method

(2,145)

-

2,180

-

Items that may be reclassified subsequently to profit

(3,345)

-

(10,820)

(1)

or loss:

Exchange differences on translation of the

financial statements of foreign operations

2,197

-

3,573

-

Share of the other comprehensive income of

associate accounted for using the equity method

16,461

1

3,132

-

18,658

1

6,705

-

Other comprehensive income (loss) for the

period, net of income tax

15,313

1

(4,115)

(1)

TOTAL COMPREHENSIVE INCOME FOR THE

PERIOD

$

320,633

16

$

675,956

62

NET PROFIT (LOSS) ATTRIBUTABLE TO:

Owners of the Corporation

$

306,714

15

$

677,679

63

Non-controlling interests

(1,394)

-

2,392

-

$

305,320

15

$

680,071

63

TOTAL COMPREHENSIVE INCOME

ATTRIBUTABLE TO:

Owners of the Corporation

$

322,027

16

$

673,564

62

Non-controlling interests

(1,394)

-

2,392

-

$

320,633

16

$

675,956

62

EARNINGS PER SHARE (Note 31)

Basic

$

0.42

$

1.08

Diluted

$

0.42

$

1.07

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

(With Deloitte & Touche review report dated May 9, 2024)

(Concluded)

- 5 -

TAIWAN COGENERATION CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (In Thousands of New Taiwan Dollars)

Equity Attributable to Owners of the Corporation

Other Equity

Exchange

Unrealized

Differences on

Gain (Loss) on

Translation of

Financial Assets

the Financial

at Fair Value

Retained Earnings

Statements of

through Other

Gain (Loss) on

Ordinary

Unappropriated

Foreign

Comprehensive

Hedging

Non-controlling

Shares

Capital Surplus

Legal Reserve

Special Reserve

Earnings

Operations

Income

Instruments

Interests

Total Equity

BALANCE AT JANUARY 1, 2023

$

5,890,486

$

499,694

$

1,737,133

$

2,621,945

$

958,281

$

(71,626)

$

66,882

$

(9,386)

$

156,831

$

11,850,240

Net profit for the three months ended March 31, 2023

-

-

-

-

677,679

-

-

-

2,392

680,071

Other comprehensive income (loss) for the three

months ended March 31, 2023

-

-

-

-

-

3,573

(10,820)

3,132

-

(4,115)

Total comprehensive income (loss) for the three

months ended March 31, 2023

-

-

-

-

677,679

3,573

(10,820)

3,132

2,392

675,956

BALANCE AT MARCH 31, 2023

$

5,890,486

$

499,694

$

1,737,133

$

2,621,945

$

1,635,960

$

(68,053)

$

56,062

$

(6,254)

$

159,223

$

12,526,196

BALANCE AT JANUARY 1, 2024

$

7,302,820

$

2,621,919

$

1,828,961

$

2,435,361

$

1,269,700

$

(67,906)

$

65,071

$

(6,354)

$

138,094

$

15,587,666

Net profit (loss) for the three months ended March 31,

2024

-

-

-

-

306,714

-

-

-

(1,394)

305,320

Other comprehensive income (loss) for the three

months ended March 31, 2024

-

-

-

-

-

2,197

(3,345)

16,461

-

15,313

Total comprehensive income (loss) for the three

months ended March 31, 2024

-

-

-

-

306,714

2,197

(3,345)

16,461

(1,394)

320,633

BALANCE AT MARCH 31, 2024

$

7,302,820

$

2,621,919

$

1,828,961

$

2,435,361

$

1,576,414

$

(65,709)

$

61,726

$

10,107

$

136,700

$

15,908,299

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

(With Deloitte & Touche review report dated May 9, 2024)

- 6 -

TAIWAN COGENERATION CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands of New Taiwan Dollars)

For the Three Months Ended

March 31

2024

2023

CASH FLOWS FROM OPERATING ACTIVITIES

Profit before income tax

$ 326,257

$

701,953

Adjustments for:

Depreciation expense

106,922

87,603

Amortization expense

16,307

16,009

Finance costs

20,588

29,199

Interest income

(4,691)

(3,049)

Share of profit of associates accounted for using the equity method

(254,124)

(654,978)

Loss on disposal of property, plant and equipment

-

40

Net unrealized gain on foreign currency exchange

(1,191)

(10,958)

Net realized gain on transactions with associates

(8,064)

(4,858)

Loss on lease modification

47

-

Changes in operating assets and liabilities

Contract assets

(576,354)

3,585

Accounts receivable

388,301

305,002

Accounts receivable from related parties

(74,429)

29,919

Other receivables

(19,529)

17,259

Inventories

(2,002)

(1,792)

Prepaid construction costs

-

(11,609)

Other current assets

3,182

(31,950)

Prepaid value-added tax

(1,343)

(18,843)

Contract liabilities

(100,647)

(210,317)

Accounts payable

(14,923)

(16,529)

Construction costs payable

291,835

(133,803)

Accounts payable to related parties

1,088

8,374

Other payables

(1,742)

(81,074)

Provisions

15,758

(1,005)

Other current liabilities

(433)

(8,901)

Net defined benefit liabilities

414

494

Other liabilities

(1,684)

-

Cash generated from operations

109,543

9,771

Interest received

4,939

2,742

Interest paid

(14,247)

(23,249)

Income tax paid

(478)

(262)

Net cash generated from (used in) operating activities

99,757

(10,998)

CASH FLOWS FROM INVESTING ACTIVITIES

Payments for property, plant and equipment (Note 32)

(107,953)

(253,499)

Decrease in refundable deposits

141

4,147

Decrease in financial assets at amortized cost

662,187

12,241

Acquisition of intangible assets

(1,191)

(3,570)

(Continued)

- 7 -

TAIWAN COGENERATION CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands of New Taiwan Dollars)

For the Three Months Ended

March 31

2024

2023

Decrease in finance lease receivables

$

2,477

$

2,571

Increase in prepayments for equipment

(2,905)

-

Net cash generated from (used in) investing activities

552,756

(238,110)

CASH FLOWS FROM FINANCING ACTIVITIES

Decrease in short-term borrowings

(20,000)

(15,000)

Proceeds from long-term borrowings

-

2,100,000

Repayments of long-term borrowings

(53,398)

(2,155,220)

(Decrease) increase in guarantee deposits received

(992)

15,544

Repayments of the principal portion of lease liabilities

(14,087)

(12,945)

Net cash used in financing activities

(88,477)

(67,621)

EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE

OF CASH AND CASH EQUIVALENTS HELD IN FOREIGN

CURRENCIES

1,937

11,521

NET INCREASE (DECREASE) IN CASH AND CASH

EQUIVALENTS

565,973

(305,208)

CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE

PERIOD

1,922,822

3,734,653

CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD

$

2,488,795

$

3,429,445

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

(With Deloitte & Touche review report dated May 9, 2024)

(Concluded)

- 8 -

TAIWAN COGENERATION CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2024 AND 2023 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

  1. GENERAL INFORMATION
    Taiwan Cogeneration Corporation (the "Corporation") and its subsidiaries (collectively, the "Group") were established by Taiwan Power Company (TPC) and several local companies on May 7, 1992. The Corporation's shares had been trading on the Taipei Exchange from May 8, 2000 to August 24, 2003 before being listed on the Taiwan Stock Exchange on August 25, 2003. The Corporation is engaged in the following businesses:
    1. Engineering, planning, design, procurement, installation, construction and financial planning of cogeneration systems, and environmental protection and procurement of fuel for cogeneration systems and related businesses;
    2. Operation and management of cogeneration plants;
    3. Research and development, technical services and consultation services related to cogeneration;
    4. Manufacture, assembly, sale, lease, installation, and repair of cogeneration equipment;
    5. Investment in cogeneration plants and trading of related equipment;
    6. Businesses with respect to power generation other than utility; and
    7. Electric equipment installation.
  3. APPROVAL OF FINANCIAL STATEMENTS
    The consolidated financial statements were reported to the Corporation's board of directors on May 9, 2024.
  4. APPLICATION OF NEW, AMENDED AND REVISED STANDARDS AND INTERPRETATIONS
    1. Initial application of the amendments to the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) (collectively, the "IFRS Accounting Standards") endorsed and issued into effect by the Financial Supervisory Commission (FSC)
      The initial application of the amendments to IFRS Accounting Standards endorsed and issued into effect by the FSC did not have a material impact on the Group's accounting policies.

- 9 -

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