DELTA - AGM Information 2021 | FinancialReports.eu

Delta Electronics, Inc. ("Company") Minutes of 2021 Annual General Shareholders' Meeting

(Translation)

Time: 10:00 AM, July 19, 2021

Place: Auditorium, 8F., No.16, Tungyuan Road, Chungli District, Taoyuan City

Quorum: 2,340,111,847 shares were represented by the shareholders and proxies present, which amounted to 90.08% of the Company’s 2,597,543,329 issued and outstanding shares.

Board Members Present: Yancey Hai, Bruce CH Cheng (via video conference), Mark Ko (via video conference), Ping Cheng (via video conference), Simon Chang (via video conference), Yung-Chin Chen (Independent Director) (via video conference), Tsong-Pyng Perng (Independent Director) (via video conference) and Ji-Ren Lee (Independent Director) (via video conference). 8 members of the Board of Directors (including 3 Independent Directors) are present.

Attendance: CPA, Ms. Lin, Yu-Kuan, PricewaterhouseCoopers (via video conference), Attorneys-atLaw, Mr. James Chen, Lee and Li (via video conference), Corporate CFO, Ms. Judy Wang (via video conference) and General Counsel, Ms. CP Ting (via video conference)

Chairman: Yancey Hai, Chairman of the Board of Directors

Recorder: Jenny Sun

Commencement: (The aggregate shareholding of the shareholders and proxies present constituted a quorum. The Chairman called the meeting to order.)

Salute according to the etiquette

Chairman’s speech: (omitted)

1. Report Items

(1) 2020 Operation Results (Please refer to Appendix 1)
(2) 2020 Financial Results (Please refer to Appendix 2 and 3)
(3) Audit Committee's Review Opinions on 2020 Annual Final Accounting Books and Statements (Please refer to Appendix 4)
(4) Report on 2020 Employees' and Directors' Compensation The Company's annual profit in 2020 is NT$31,001,404,908, of which 7.8% is allocated as the employees' compensation in cash totaling NT$2,421,096,904 and 0.09% is allocated as the directors' compensation totaling NT$29,400,000.
(5) Report on Short-form Merger between Delta Electronics, Inc. and UNICOM SYSTEM ENG. CORP.

In order to streamline Delta group and protect customers’ rights, the Company merged with its 100% owned subsidiary UNICOM SYSTEM ENG. CORP. The resolution passed by both Boards of Directors held on October 28, 2020. The effective date of the merger is December 1, 2020. Upon the merger, the Company is the surviving company, while UNICOM SYSTEM ENG. CORP. is the dissolved company.

(Questions raised by the shareholders for the Report Items 1: The registered number of shareholder

who raised questions was 398956. The questions and answers were omitted. Regarding the questions and relevant suggestions by the shareholder, the Chairman had fully explained in detail in the meeting. The Company has also kept record of the questions and answers for future reference.)

2. Proposal Items

(1) Adoption of the 2020 Annual Final Accounting Books and Statements (Proposed by the Board of Directors)

Explanation:

a) This Company's 2020 Annual Final Accounting Books and Statements, including the Business Report, Parent Company Only Financial Statements and Consolidated Financial Statements (please refer to Appendix 1~3) had been resolved by the Board and Directors and reviewed by the Company's Audit Committee, of which the Parent Company Only Financial Statements and the Consolidated Financial Statements had been audited by CPA, Lin, YuKuan and CPA, Chou, Chien-Hung from PricewaterhouseCoopers, Taiwan. The Company's

Audit Committee has found no discrepancies after a thorough review and has made a written review report.

b) It is proposed by the Board of Directors to submit the 2020 Annual Final Accounting Books and Statements to the shareholders’ meeting for adoption.

Resolution:

Approved and acknowledged as proposed by the Board of Directors by voting (a total of 2,340,111,847 shares with voting rights were present when votes were cast; the number of voting rights for approval is 2,085,159,566, among which 1,363,966,835 was exercised by electronic transmission, the number of voting rights for rejection is 35,957, the number of invalid votes is 0, the number of voting rights for abstention is 254,916,324, and 89.10% of the total voting rights voted for approval when votes were cast).

(2) Adoption of the 2020 Earnings Distribution
(Proposed by the Board of Directors)

Explanation:

a) The 2020 Earnings Distribution Table is compiled as follows in accordance with Company Act and the Company's Articles of Incorporation and has been approved by the Audit Committee and the Board of Directors on February 24, 2021.
b) The Board of Director proposed to set aside NT$14,286,488,310 for cash dividends. According to the number of shares issued and entitled to distribution totaling 2,597,543,329, the cash dividends of NT$5.5 per share will be distributed. The Board of Directors authorized the Chairman subject to the approval of Annual General Shareholders' Meeting to set a record date on which the proposed cash dividend would be distributed according to the shareholding ratio of shareholders appeared in the register of shareholders on the designated record date of distribution. In the event that the proposed earnings distribution approved is affected by an amendment to relevant laws or regulations, a request by the competent authorities, or a change in common shares (such as, buyback of shares for transfer or cancellation, domestic capital increase by cash, and exercise of employee stock options), it is proposed that the Chairman be authorized to adjust the cash dividends to be distributed to each share based on the number of actual shares outstanding on the record date for distribution.
c) It is proposed by the Board of Directors to submit the 2020 Earnings Distribution to the shareholders’ meeting for adoption.

Delta Electronics, Inc. 2020 Earnings Distribution Table

			Unit: NT$
Item		Description	Amount
Net profit	after tax for the year 2020		25,485,230,567
Subtract:	Setting aside 10% legal reserve		2,355,217,695
	Setting aside special reserves		4,921,173,551
Earnings	available for distribution by the end of 2020		18,208,839,321
Add: Retained earnings in the beginning of 2020			24,747,862,787
Subtract:	Actuarial losses on defined benefit plan in 2020		119,914,156
	Loss on disposal of financial assets at fair value		1,754,186,288
	through other comprehensive income in 2020
	Difference between consideration and carrying amount		58,953,178
	of subsidiaries acquired or disposed
Earnings	available for distribution by the end of the fiscal year		41,023,648,486
(Note 1)
Distribution Items:
	Shareholders' dividends - Cash	NT$5.5 per share	14,286,488,310
Undistributed earnings by the end of 2020			26,737,160,176
(Note 1)	The principle of 2020 earnings distribution: earnings available for distribution by the end of
	the fiscal year shall be distributed first.
(Note 2)	Cash dividends distributed are rounded up to NT$1. The total amount of fractional cash
	dividends less than NT$1 shall be reversed to undistributed earnings.

Chairman: Yancey Hai Manager: Ping Cheng Chief Accounting Officer: Judy Wang

Resolution:

Approved and acknowledged as proposed by the Board of Directors by voting (a total of 2,340,111,847 shares with voting rights were present when votes were cast; the number of voting rights for approval is 2,083,262,488, among which 1,362,069,757 was exercised by electronic transmission, the number of voting rights for rejection is 2,791,129, the number of invalid votes is 0, the number of voting rights for abstention is 254,058,230, and 89.02% of the total voting rights voted for approval when votes were cast).

3. Election Item

(1) Election of the Company's Directors
(Proposed by the Board of Directors)

Explanation:

a) The term of office of the directors (including independent directors) expired. According to the Board’s resolution, ten directors (including four independent directors) will be elected at this annual general shareholders' meeting. The term of office of the elected directors will be three years and starts from the actual election date in accordance with the instructions announced by the competent authority; hence, the term of office will start from July 19, 2021 till July 18, 2024 and the elected directors will assume office immediately after this annual general shareholders meeting.
b) The Company adopted the candidates nomination system for electing the 19th term of directors (including independent directors). After the Board of Directors’ examination, the Board has approved ten candidates (including four candidates for independent directors). The relevant information is as follows ：

List of Candidates for Directors

	List of Candidates for Directors
Name	Educational Background and Experience	Number of Shares Held
Yancey Hai	Master Degree in International Business Management, the University of Texas at Dallas/ Country Manager, GE Capital Taiwan, Vice-Chairman and CEO,Delta Electronics,Inc.	984,067
Mark Ko	Department of Electrical and Control Engineering, National Chiao TungUniversity/ President and COO,Delta Electronics,Inc.	807,630
Bruce CH Cheng	Department of Electrical Engineering, National Cheng Kung University, Honorary Doctorate, National Tsing Hua University, Honorary Doctorate, National Central University, Honorary Doctorate, National Cheng Kung University, Honorary Doctorate, National Taiwan University of Science and Technology, Honorary Doctorate, National Taipei University of Technology, Honorary Doctorate, National Chiao Tung University, Honorary Doctor, Asia University, Honorary Doctorate of Social Science, City University of Hong Kong, Honorary Doctorate, Taipei Medical University, Honorary Doctor of Science, National Yang-Ming University, Honorary Doctorate, National Taiwan University/ Chairman of Delta Electronics,Inc.	81,878,039
Ping Cheng	Department of Business Administration, California State University, Hayward/ Senior Vice-President of Delta Electronics, Inc. and President in Greater China Area of Delta Electronics,Inc.	55,640,093

List of Candidates for Directors

	List of Candidates for Directors
Name	Educational Background and Experience	Number of Shares Held
Simon Chang	EMBA, Chung Yuan Christian University/ Senior Vice-President and General Manager,Delta Electronics,Inc.	903,811
Victor Cheng	MS Electrical Engineering, Santa Clara University/ Chairman and President,Delta Networks,Inc.	50,344,764

List of Candidates for Independent Directors

	List of Candidates for Independent Directors
Name	Educational Background and Experience	Number of Shares Held
Ji-Ren Lee	Ph.D in Strategic Management, University of Illinois at Urbana- Champaign/ Associate Dean, College of Management and Executive Director, EMBA Program, National Taiwan University, Director, Creativity and Entrepreneurship Program, National Taiwan University	0
Shyue-Ching Lu	Ph.D in Electric Engineering, University of Hawaii/ Honor Professor, National Yang Ming Chiao Tung University, Chairman and CEO, Chunghwa Telecom Co., Ltd., Director General, Department of Posts and Telecommunications, Ministry of Transportation and Communications Republic of China	0
Rose Tsou	MBA, Northwestern University, J.L. Kellogg Graduate School of Management, MS in Mass Communication, Boston University/ Head of International, Verizon Media, Managing Director of Yahoo Asia Pacific,General Manager of Yahoo Taiwan	0
Jack J. T. Huang	S.J.D., Harvard University/ Attorney-at-Law, Jones Day Taipei Office,HonoraryChairman,Taiwan M&A and Private EquityCouncil	0

c) Please Vote

Election Result: 10 members of the Board of Directors (including 4 Independent Directors)

Title	Name	Votes Received
Director	Yancey Hai	1,859,423,465
Director	Bruce CH Cheng	1,841,012,838
Director	Mark Ko	1,831,853,024
Director	Ping Cheng	1,826,374,192

Title	Name	Votes Received
Director	Simon Chang	1,824,549,323
Director	Victor Cheng	1,823,636,603
Independent Director	Ji-Ren Lee	1,822,725,463
Independent Director	Shyue-Ching Lu	1,822,689,468
Independent Director	Jack J. T. Huang	1,822,689,334
Independent Director	Rose Tsou	1,822,662,858

4. Other Proposals

(1) Discussion of the Release from Non-competition Restrictions on Directors (Proposed by the Board of Directors)

Explanation:

a) According to Article 209 of the Company Act, a director who conducts business within the business scope of the Company for himself or others shall explain at the shareholders’ meeting the essential contents of such conduct and obtain the shareholders’ approval.
b) As certain directors elected at this annual general shareholders’ meeting concurrently work for other companies, which may constitute the act restricted under Article 209 of the Company Act, it is proposed to release the non-competition restrictions on the directors, without prejudice to the interests of the Company.
c) Please refer to Appendix 5 for the concurrent positions of directors elected by the shareholders' meeting. If there is any change in their concurrent positions after the nomination, please refer to the detailed list disclosed on the spot during this annual general shareholders' meeting.
d) The proposal is submitted for discussion.

Resolution:

Approved and acknowledged as proposed by the Board of Directors by voting (a total of 2,340,111,847 shares with voting rights were present when votes were cast; the number of voting rights for approval is 1,900,897,857, among which 1,179,892,126 was exercised by electronic transmission, the number of voting rights for rejection is 883,560, the number of invalid votes is 0, the number of voting rights for abstention is 438,330,430, and 81.23% of the total voting rights voted for approval when votes were cast).

5. Extemporary Motions: None

Meeting Adjourned: 10:59 AM, July 19, 2021

Chairman: Yancey Hai

Recorder: Jenny Sun

Appendix 1

Business Report

The year 2020 has been a turbulent time and a year of uncertainty for global economic activities and social events. Due to the global impact of COVID-19, many cities and borders have been closed, and governments have imposed strict crowd-control measures. At present, companies are facing challenges in production, logistics, warehousing and retailing. There is also a steep decline in consumption as both regional economies and personal livelihood activities have been significantly affected. It has been an extraordinarily volatile year for everyone, including governments and companies.

As the virus began to spread, Delta set up a global anti-epid- emic command center to closely monitor developments amid the epidemic and established anti-epidemic prevention teams to track operating conditions at its global factories and branches. At the same time, it also built its own mask production line to provide protective equipment such as masks for front-line employees. In times of emergency, Delta's first priority is to take care of employees and to ensure their safety and health.

Fortunately, Delta has continued to achieve growth in terms of annual revenue and gross profit, thanks to all of its team’s collective efforts. Delta’s consolidated revenue in 2020 was NT$282.6 billion, a 5% increase from the previous year; gross profit was NT$87.2 billion, and gross profit margin grew from 27.8% in the previous year to 30.9%. Net operating profit was NT$31.4 billion, with an increase in the net operating profit margin from 7.2% in the previous year to 11.1%. Net income after tax was NT$25.5 billion, with an increase in the net after-tax profit margin from 8.6% to 9.0%. In 2020, Delta’s earnings per share (EPS) was NT$9.80 and return on equity (ROE) ratio was 17.8%.

Here is a summary of Delta’s performance in various business fields in 2020, and future prospects:

Power Electronics

As the world's leading manufacturer of power supplies and brushless DC fans, Delta has contributed significantly to further improvements in the information industry. Due to the severity of the COVID-19 epidemic in 2020, many cities and companies around the world have implemented work-from-home protocols, and schools have adopted remote teaching, which has led to a surge in demand for information equipment. Delta's power supplies and fans for laptops, desktops, servers, and other related equipment have brought forth a new social norm in the COVID-19 era.

In 2020, Delta announced a strategic cooperation with GKN Automotive, the world's largest automotive transmission system supplier, to develop eDrive, which is an integrated electric drive system for next-generation electric vehicles. This three-in-one system combines Delta's motor drive with GKN Automotive’s drive motor and gear box, and is expected to reduce system weight and size, as well as effectively streamline the assembly process, improve quality, and further solidify both parties' leading position in the global market.

With its corporate mission “To provide innovative, clean, and energy-efficient solutions for a better tomorrow," Delta has continued to strive over the years to improve its product efficiency and create value for its shareholders, while contributing to environmental sustainability. Delta was recognized by the U.S. Environmental Protection Agency (EPA) as an ENERGY STAR® Partner of the Year for a fifth consecutive year in 2020 and received the Sustained Excellence Award for three consecutive years.

The Sustained Excellence Award is ENERGY STAR’s highest honor, recognizing outstanding companies whose product energy efficiency and energy conservation promotion have surpassed assessment standards. Delta has received this award three times, demonstrating its continuous implementation of a sustainable business philosophy based on extensive power electronics and control technology.

Automation

As a result of the COVID-19 outbreak, Delta plant employees were restricted from returning to work after the Chinese New Year in 2020. Although Delta's plant resumed work on February 10th in accordance with local government provisions, some employees were affected and could not return to work due to quarantine requirements in dormitories and travel restrictions in many cities.

Fortunately, Delta has been actively involved in the field of smart manufacturing for many years and is committed to enhancing the automation of its production lines. In exceptional times when the return-to-work rate was less than 40%, Delta was able to maintain the basic operation of its production lines. Delta’s in-house automation team quickly set up a mask production line and started production the following day with only the purchase of raw materials required. At the most critical moment in the epidemic, there were two driving factors that helped increase the return-to-work rate and production capacity: highly automated production lines and automation teams that could respond to emergencies and help factories start making their own masks in the shortest possible time. This achievement once again highlights the importance of the Delta's ability to respond quickly and to flexibly adjust production lines for resilient manufacturing under any circumstances. Delta believes that in the post COVID-19 era, this will accelerate the manufacturing industry’s pace of investment and transformation to smart manufacturing.

To strengthen the integrity of its smart manufacturing systems, in 2020 Delta acquired 100% of Trihedral Engineering Limited, a Canadian SCADA graphical control and industrial Internet of Things (IoT) software company. Trihedral has been developing SCADA graphical control software systems for more than 30 years, with major customers from the power, water treatment, and oil and gas industries. In recent years, it has been actively expanding its applications to new areas such as smart manufacturing. This acquisition integrates the experience and expertise of both companies in the automation business, which will help further enhance Delta's longterm competitiveness in the global automation market.

Although in the short-term there is a temporary slowdown in market demand due to the epidemic, Delta hasn’t stopped developing its building automation business. Following the launch of its global strategic alliance with Microsoft in 2019, Delta further combined its Azure cloud and IoT technologies in 2020 to jointly develop two major smart building solutions -- the "Chiller System Anomaly Detection" and the "Bluetooth Intelligent Control".

The Chiller System Anomaly Detection is one of Delta energy online monitoring solutions. It is set up in Microsoft's real-time cloud monitoring system, that is used to detect and monitor conditions in real-time through running big data analysis, as well as handle abnormalities and reduce damage at the earliest possible times, thus helping improve operational efficiency and reduce costs. The Bluetooth Intelligent Control combines data analysis and AI applications to create a personalized lighting environment according to customer requirements with matching the changes of light in day and night. Through a comprehensive strategic cooperation and execute sales plans with Microsoft, both companies can further enhance their competitiveness in the global market by leveraging their respective strengths.

Infrastructure

To help promote the transition to low-carbon transportation and address climate change, Delta announced its membership in the International Electric Vehicle Initiative EV100 in 2018 and became not only the first member in Taiwan, but also the first electronics vehicle charging solutions provider member in the world. In 2020, Delta installed more than 100 electric vehicle chargers at its major operating locations, providing employees and customers with incentives to use low-carbon transportation. Due to the impact of the epidemic, many infrastructure projects around the world, such as 5G networks and electric vehicle charging facilities, have fallen behind schedule. However, as many social and business activities move online, companies are accelerating their digitalization and increasing their reliance on data centers in various industries. The importance of data centers is becoming increasingly apparent as these centers become a new type of public utility.

In 2020, Delta also made significant achievements in data center business development. Delta's data center POD solution (Point of Delivery) has been certified by the Uptime Institute TIER III, a prominent advisory organization which entails rigorous uptime requirements and long-term viability for IT equipment. Delta developed its POD solution by leveraging pre-engineering designs of in-house IT racks, aisle air containment, in-row precision cooling, modular UPS systems, a monitoring system and redundant distribution with high flexibility and fast implementation. With the doubling of global data traffic, the demand for modular data center solutions continues to grow, and the birth of Delta's POD system is the best solution to meet the trend of this digital wave.

Stable power supplies play a vital role in the development of industries. With the growth of population and industries, the demand for electricity is bound to increase in the future. However, conventional fossil fuel power generation has many negative impacts on the environment and ecology. In response to the global consensus on carbon reduction, Delta has been actively developing smart grids in recent years, hoping to contribute to the transformation of the energy through energy storage and control.

To achieve the smart grid vision, Delta and the Taiwan Power Company jointly built and announced completion of the largest energy storage system in Taiwan in 2020, which was the first to be integrated into the grid and actually receive real-time dispatching. The system is located at the Xia Xing of Kinmen’s Tashan Power Plant, and includes a 1MWh lithium-ion Power Station battery energy storage system, a 2MW capacity power conditioning system, energy management system, and environmental management system. The total solution was designed, manufactured, and built by Delta to specialize in one-stop integrated services that can quickly supply backup power within 200 ms after an unplanned generator outage takes place and provide a 30-minute buffer time to the power plant to help stabilize the grid. Delta chose Kinmen as a demonstration island for smart grid, and plans to apply the successful experience of the system to future smart grid installations on the main island. Delta is taking practical steps to help Taiwan's smart grid evolve further.

In the face of climate change and global sustainable development, Delta has seriously responded with concrete actions to ESG (Environmental, Social, Governance) issues. In 2020, Delta was selected to the Dow Jones Sustainability Indices (DJSI) World Index for the tenth consecutive year and was distinguished from other benchmark companies by being honored as an Industry Leader for the fifth time. In addition, Delta received the top “A” leadership award in the 2020 CDP's “climate change” and “water security” ratings, making it one of the first companies in Taiwan to receive a double “A” in recognition of Delta's concrete actions.

After setting a scientific carbon intensity reduction target of 56.6% in 2017, Delta has achieved its milestone carbon intensity targets for three consecutive years. In 2018, Delta actively engaged the Task Force on Climate-related Financial Disclosures (TCFD) to regularly assess the risks and opportunities brought by climate change. Delta discloses information in its annual report and CSR report in accordance with the TCFD framework as a basis for improving climate readiness. It is worth mentioning that Delta was selected as the best international brand in Taiwan for the tenth consecutive year in 2020, and its brand value has grown for eight consecutive years, reaching US$331 million, an 11% increase from 2019.

In recent years, international affairs, technology development, the natural environment, and even social patterns have all changed rapidly. As a company, the only way to stand firm in an ever-changing business environment is to keep an eye on external changes and remain flexible at all times. In 2021, our 50th anniversary, Delta would like to thank our customers, shareholders and partners for their support over the past half-century. With the world still experiencing turmoil due to the epidemic we have taken determined steps to bring our employees through the fog. Looking to the future, we are committed to sustainable development as our core value and will continue to guide our colleagues amid new challenges as we create new opportunities.

Chairman Yancey Hai Manager Ping Cheng Chief Account Officer Judy Wang

Appendix 2

INDEPENDENT AUDITORS’ REPORT

To the Board of Directors and Shareholders of Delta Electronics, Inc.

Opinion

We have audited the accompanying parent company only balance sheets of Delta Electronics, Inc. (the “Company”) as at December 31, 2020 and 2019, and the related parent company only statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the parent company only financial statements, including a summary of significant accounting policies.

In our opinion, based on our audits and the reports of other auditors (please refer to the Other matter section), the accompanying parent company only financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2020 and 2019, and its financial performance and its cash flows for the years then ended in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers”.

Basis for opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and generally accepted auditing standards in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ responsibilities for the audit of the parent company only financial statements section of our report. We are independent of the Company in accordance with the Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. Based on our audits and the audit reports of other auditors, we believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Company’s 2020 parent company only financial statements. These matters were addressed in the context of our audit of the parent company only financial statements as a whole and, in forming our opinion thereon, we do not provide a separate opinion on these matters.

Key audit matters for the Company’s 2020 parent company only financial statements are stated as follows:

Assessment of the reasonableness of the purchase price allocation for business combination

Description

In June 2019, the subsidiary of the Company acquired 100% of Amerlux, LLC. Such business acquisition was recognized as investment accounted for under the equity method in the balance sheet. The allocation of the acquisition price was completed in the second quarter of 2020.

As the net fair value of identifiable assets and liabilities and the allocation of goodwill are based on management’s estimation and involve accounting estimations and assumptions, we consider this equity price allocation transaction a key audit matter.

How our audit addressed the matter

We obtained an understanding of the basis and process of the purchase price allocation which was estimated by management. We reviewed the reasonableness of the fair value assessment for assets acquired and liabilities assumed, projected cash flow, and the fair value calculation model as indicated in the purchase price allocation reports prepared by the appraisers appointed by the Company. Our procedures also included the following:

A. Assessing the setting of parameters of valuation models and calculation formulas;
B. Comparing expected growth rates and operating margin with historical data, economic and industry forecasts; and
C. Comparing the discount rate with the cost of capital assumptions of cash generating units and rate of return of similar assets.

Impairment assessment of investments accounted for under equity method

Description

As at December 31, 2020, the recognised goodwill as a result of the investments in Cyntec Co., Ltd., Eltek AS, Delta Controls Inc., Loy Tec electronics GmbH, Delta Greentech (China) Co., Ltd. and Amerlux, LLC is material. Refer to Note 5 for accounting estimates of impairment assessment of investments accounted for under the equity method and the uncertainty of assumptions.

As the balance of investments accounted for under equity method is material, the valuation model adopted in the impairment assessment has an impact in determining the recoverable amount which involves the significant accounting estimates and prediction of future cash flows. Thus, we consider the impairment assessment of investments accounted for under equity method a key audit matter. How our audit addressed the matter

We obtained management’s impairment assessment of investments accounted for under the equity method, obtained an understanding of the process in determining the expected future cash flows based on each cash generating unit, and performed the following audit procedures:

A. Assessed whether the valuation models adopted by the Company are reasonable for the industry, environment and the valued assets of the Company;
B. Confirmed whether the expected future cash flows adopted in the valuation model are in agreement with the budget provided by the business units; and
C. Assessed the reasonableness of material assumptions, such as expected growth rates, operating margin and discount rates, by:
(a) Checking the setting of parameters of valuation models and calculation formulas;
(b) Comparing the expected growth rate and operating margin with historical data, economic and industrial forecast documents; and
(c) Comparing the discount rate with cost of capital assumptions of cash generating units and rates of return of similar assets.

`–` Other matter Reference to the audits of other auditors

We did not audit the financial statements of certain investments accounted for under the equity method and information on investees disclosed in Note 13. Therefore, our opinion expressed herein, insofar as it relates to the amounts included in respect of these associates, is based solely on the reports of the other auditors. These investments accounted for under the equity method amounted to NT$26,749,245 thousand and NT$24,269,195 thousand, constituting 11.87% and 12.03% of total assets as at December 31, 2020 and 2019, respectively, and the share of profit of associates and joint ventures accounted for under the equity method and share of other comprehensive income of subsidiaries, associates and joint ventures accounted for under the equity method was NT$4,491,467 thousand and NT$1,677,887 thousand, constituting 24.03% and 7.57% of total comprehensive income for the years

then ended, respectively.

Responsibilities of management and those charged with governance for the parent company only financial statements

Management is responsible for the preparation and fair presentation of the parent company only financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers , and for such internal control as management determines is necessary to enable the preparation of the parent company only financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the parent company only financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance, including audit committee, are responsible for overseeing the Company’s financial reporting process.

Auditors’ responsibilities for the audit of the parent company only financial statements

Our objectives are to obtain reasonable assurance about whether the parent company only financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the generally accepted auditing standards in the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these parent company only financial statements.

As part of an audit in accordance with the generally accepted auditing standards in the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

A. Identify and assess the risks of material misstatement of the parent company only financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.

The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;

B.

C.

D.

E.

F.

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control;

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management;

Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the parent company only financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Company to cease to continue as a going concern;

Evaluate the overall presentation, structure and content of the parent company only financial statements, including the disclosures, and whether the parent company only financial statements represent the underlying transactions and events in a manner that achieves fair presentation; and

Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the parent company only financial statements. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the parent company only financial statements of the current year and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The parent company only financial statements of Delta Electronics, Inc. as at and for the year ended December 31, 2020 expressed in US dollars are presented solely for the convenience of the reader and were translated from the financial statements expressed in New Taiwan dollars using the exchange rate of $28.095 to US$1.00 at December 31, 2020. This basis of translation is not in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Lin, Yu-Kuan Chou, Chien-Hung

for and on behalf of PricewaterhouseCoopers, Taiwan

February 24, 2021

The accompanying parent company only 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 parent company only 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, Taiwan 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.

DELTA ELECTRONICS, INC. PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31, 2020 AND 2019

(EXPRESSED IN THOUSANDS OF DOLLARS)

Assets	New Taiwan Dollars	New Taiwan Dollars
	December 31, 2020 $ 1,526,220 - 2,322,301 34,132 6,816,593 7,343,305 70,900 620,947 4,415,599 830,709 125,165 24,105,871 947,464 1,404,189 669,926 171,823,674 23,201,266 487,399 1,338,725 676,203 670,244 201,219,090 $ 225,324,961	December 31, 2019
Current assets Cash and cash equivalents Financial assets at fair value through other comprehensive income - current Contract assets - current Notes receivable, net Accounts receivable, net Accounts receivable - related parties Other receivables Other receivables - related parties Inventories Prepayments Other current assets Total current assets Non-current assets Financial assets at fair value through profit or loss - non-current Financial assets at fair value through other comprehensive income - non-current Contract assets - non-current Investments accounted for under the equity method Property, plant and equipment Right-of-use assets Intangible assets Deferred income tax assets Other non-current assets Total non-current assets Total assets		$ 645,136 319,823 735,763 63,493 4,447,348 4,959,305 97,967 456,383 3,578,871 1,070,916 170,407
		16,545,412
		43,198 1,259,966 - 161,276,288 19,793,789 525,718 1,008,581 582,385 768,814
		185,258,739
		$ 201,804,151

(Continued)

DELTA ELECTRONICS, INC. PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31, 2020 AND 2019

(EXPRESSED IN THOUSANDS OF DOLLARS)

LiabilitiesandEquity	USDollars NewTaiwan Dollars Notes December 31,2020 December 31,2020 December 31,2019 6(16) $ 85,235 $ 2,394,670 $ 464,306 103,895 2,918,923 2,409,962 7 308,651 8,671,549 7,725,925 419,837 11,795,315 10,564,812 7 6,693 188,041 288,794 30,256 850,053 519,822 15,904 446,817 615,625 970,471 27,265,368 22,589,246 6(16) 13,303 373,758 - 6(11) 1,374,566 38,618,445 26,995,000 6(23) 383,158 10,764,819 9,481,142 15,225 427,745 457,795 6(12) 70,315 1,975,488 2,124,091 1,856,567 52,160,255 39,058,028 2,827,038 79,425,623 61,647,274 6(13) 924,557 25,975,433 25,975,433 6(14) 1,751,290 49,202,505 49,103,331 6(15) 973,217 27,342,534 25,030,754 271,295 7,622,034 7,561,032 1,719,169 48,300,040 40,108,361 ( 446,457 )( 12,543,208) ( 7,622,034) 5,193,071 145,899,338 140,156,877 9 11 $ 8,020,109 $ 225,324,961 $ 201,804,151
Current liabilities Contract liabilities - current Accounts payable Accounts payable - related parties Other payables Other payables - related parties Current income tax liabilities Other current liabilities Total current liabilities Non-current liabilities Contract liabilities - non-current Long-term borrowings Deferred income tax liabilities Lease liabilities - non-current Other non-current liabilities Total non-current liabilities Total liabilities Equity Share capital Common stock Capital surplus Capital surplus Retained earnings Legal reserve Special reserve Unappropriated retained earnings Other equity interest Other equity interest Total equity Significant contingent liabilities and unrecorded contract commitments Significant subsequent events Total liabilities and equity

LiabilitiesandEquity

USDollars
NewTaiwan Dollars
Notes
December 31,2020
December 31,2020
December 31,2019
6(16)
$ 85,235
$ 2,394,670
$ 464,306
103,895
2,918,923
2,409,962
7
308,651
8,671,549
7,725,925
419,837
11,795,315
10,564,812
7
6,693
188,041
288,794
30,256
850,053
519,822
15,904
446,817
615,625
970,471
27,265,368
22,589,246
6(16)
13,303
373,758
-
6(11)
1,374,566
38,618,445
26,995,000
6(23)
383,158
10,764,819
9,481,142
15,225
427,745
457,795
6(12)
70,315
1,975,488
2,124,091
1,856,567
52,160,255
39,058,028
2,827,038
79,425,623
61,647,274
6(13)
924,557
25,975,433
25,975,433
6(14)
1,751,290
49,202,505
49,103,331
6(15)
973,217
27,342,534
25,030,754
271,295
7,622,034
7,561,032
1,719,169
48,300,040
40,108,361
(
446,457 )(
12,543,208) (
7,622,034)
5,193,071
145,899,338
140,156,877
9
11
$ 8,020,109
$ 225,324,961
$ 201,804,151

Current liabilities
Contract liabilities - current
Accounts payable
Accounts payable - related parties
Other payables
Other payables - related parties
Current income tax liabilities
Other current liabilities
Total current liabilities
Non-current liabilities
Contract liabilities - non-current
Long-term borrowings
Deferred income tax liabilities
Lease liabilities - non-current
Other non-current liabilities
Total non-current liabilities
Total liabilities
Equity
Share capital
Common stock
Capital surplus
Capital surplus
Retained earnings
Legal reserve
Special reserve
Unappropriated retained earnings
Other equity interest
Other equity interest
Total equity
Significant contingent liabilities and
unrecorded contract commitments
Significant subsequent events
Total liabilities and equity

The notes in the parent company only financial statements and report of independent accountants are an integral part of these parent company only financial statements, please refer to the accompanying notes in the parent company only financial statements and report of independent accountants.

DELTA ELECTRONICS, INC.

PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2020 AND 2019

(EXPRESSED IN THOUSANDS OF DOLLARS, EXCEPT EARNINGS PER SHARE DATA)

Items	Notes 6(16) and 7 6(5)(21) (22)and 7 6(21)(22) ( ( ( 12(2) ( ( 6(17) 6(18) 6(19) ( 6(20) ( 6(6) 6(23) 6(12) 6(3) 6(23) 6(23) 6(24) 6(24)	US Dollars 2020 $ 2,070,978 ( 1,289,762) 781,216 39,242 ) 97,422 ) 442,058 ) 597 ) 579,319 ) 201,897 241 35,911 3,425 ) 6,610 ) 788,213 814,330 1,016,227 ( 109,118 ) $ 907,109 ( $ 2,463 ) 11,613 ( 2,298 ) 493 7,345 ( 295,037 ) 28,876 16,948 ( 249,213) ( $ 241,868 ) $ 665,241 $ 0.35 $ 0.35	New Taiwan Dollars 2020 2019 $ 58,184,137 $ 47,945,673 ( 36,235,864)( 31,595,117) 21,948,273 16,350,556 ( 1,102,518) ( 1,109,232) ( 2,737,068) ( 2,706,854) ( 12,419,620) ( 10,910,222) ( 16,770)( 14,602) ( 16,275,976)( 14,740,910) 5,672,297 1,609,646 6,772 17,125 1,008,901 891,711 ( 96,221) 2,054,748 ( 185,695) ( 132,833) 22,144,854 20,755,540 22,878,611 23,586,291 28,550,908 25,195,937 ( 3,065,677)( 2,078,140) $ 25,485,231 $ 23,117,797 ($ 69,191) ( $ 30,435) 326,268 185,277 ( 64,561) ( 216,636) 13,838 6,088 206,354 ( 55,706) ( 8,289,061) ( 2,861,873) 811,276 2,492,140 476,157 ( 527,130) ( 7,001,628)( 896,863) ($ 6,795,274)( $ 952,569) $ 18,689,957 $ 22,165,228 $ 9.81 $ 8.90 $ 9.77 $ 8.85
Operating revenue Operating costs Gross Profit Operating expenses Selling expenses General and administrative expenses Research and development expenses Expected credit impairment loss Total operating expenses Operating profit Non-operating income and expenses Interest income Other income Other gains and losses Finance costs Share of profit of subsidiaries, associates and joint ventures accounted for under the equity method Total non-operating income and expenses Profit before income tax Income tax expense Profit for the year Other comprehensive income (loss) Components of other comprehensive income (loss) that will not be reclassified to profit or loss Gain (loss) on remeasurements of defined benefit plans Unrealised gain (loss) on valuation of equity investment at fair value through other comprehensive income Share of other comprehensive income (loss) of subsidiaries, associates and joint ventures accounted for under the equity method that will not be reclassified to profit or loss Income tax related to components of other comprehensive income that will not be reclassified to profit or loss Other comprehensive income (loss) that will not be reclassified to profit or loss Components of other comprehensive income (loss) that will be reclassified to profit or loss Financial statements translation differences of foreign operations Share of other comprehensive income (loss) of subsidiaries, associates and joint ventures accounted for under the equity method that will be reclassified to profit or loss Income tax relating to the components of other comprehensive income that will be reclassified to profit or loss Other comprehensive income (loss) that will be reclassified to profit or loss Other comprehensive income (loss) for the year Total comprehensive income for the year Earnings per share Basic earnings per share Diluted earnings per share

DELTA ELECTRONICS, INC. PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY YEARS ENDED DECEMBER 31, 2020 AND 2019

(EXPRESSED IN THOUSANDS OF DOLLARS)

2019 New Taiwan Dollars Balance at January 1, 2019 Effects of retrospective application and retrospective restatement Balance after retrospective restatement at January 1, 2019 Profit for the year Other comprehensive income (loss) for the year Comprehensive income (loss) for the year Distribution of 2018 earnings Legal reserve Special reserve Cash dividends Changes in ownership interests in subsidiaries Difference between consideration and carrying amount of subsidiaries acquired or disposed Disposal of equity investments at fair value through other comprehensive income Balance at December 31, 2019 2020 New Taiwan Dollars Balance at January 1, 2020 Profit for the year Other comprehensive income (loss) for the year Comprehensive income (loss) for the year Distribution of 2019 earnings Legal reserve Special reserve Cash dividends Changes in ownership interests in subsidiaries Difference between consideration and carrying amount of subsidiaries acquired or disposed Disposal of equity investment at fair value through other comprehensive income Balance at December 31, 2020	Notes		Share capital - common stock		Capital surplus				Retained earnings				Other equityinterest				Total equity
							Legal reserve		Special reserve		Unappropriated retained earnings	Financial statements translation differences of foreign operations	Unrealised gains (losses) on financial assets measured at fair value through other comprehensive income		Gains (losses) on hedging instruments
	6(15) 6(3) 6(15) 6(3)		`$ 25,975,433` `-` `25,975,433` `-` `-` `-` `-` `-` `-` `-` `-` `-` `$ 25,975,433` `$ 25,975,433` `-` `-` `-` `-` `-` `-` `-` `-` `-` `$ 25,975,433`	`$ 48,397,067` `-` `48,397,067` `-` `-` `-` `-` `-` `-` `34,941` `671,323` `-` `$ 49,103,331` `$ 49,103,331` `-` `-` `-` `-` `-` `-` `195,879` `(` `96,705` `)` `-` `$ 49,202,505`			`$ 23,211,444` `-` `23,211,444` `-` `-` `-` `1,819,310` `-` `-` `-` `-` `-` `$ 25,030,754` `$ 25,030,754` `-` `-` `-` `2,311,780` `-` `-` `-` `-` `-` `$ 27,342,534`		`$ 7,088,143` `-` `7,088,143` `-` `-` `-` `-` `472,889` `-` `-` `-` `-` `$ 7,561,032` `$ 7,561,032` `-` `-` `-` `-` `61,002` `-` `-` `-` `-` `$ 7,622,034`	`$ 33,160,104` `1,943` `33,162,047` `23,117,797` `(` `255,785 )` `22,862,012` `(` `1,819,310 )` `(` `472,889 )` `(` `12,987,717 )` `-` `-` `(` `635,782 )` `$ 40,108,361` `$ 40,108,361` `25,485,231` `(` `119,914 )` `25,365,317` `(` `2,311,780 )` `(` `61,002 )` `(` `12,987,717 )` `-` `(` `58,953 )` `(` `1,754,186 )` `$ 48,300,040`		`($ 4,422,025` `)` `-` `(` `4,422,025` `)` `-` `(` `912,967` `)` `(` `912,967` `)` `-` `-` `-` `-` `-` `-` `($ 5,334,992` `)` `($ 5,334,992` `)` `-` `(` `6,984,988` `)` `(` `6,984,988` `)` `-` `-` `-` `-` `-` `-` `($ 12,319,980` `)`	`($ 3,270,159 )` `-` `(` `3,270,159 )` `-` `200,079` `200,079` `-` `-` `-` `-` `-` `635,782` `($ 2,434,298 )` `($ 2,434,298 )` `-` `326,268` `326,268` `-` `-` `-` `-` `-` `1,754,186` `($` `353,844 )`	`$` `131,152` `-` `131,152` `-` `16,104` `16,104` `-` `-` `-` `-` `-` `-` `$` `147,256` `$` `147,256` `-` `(` `16,640 )` `(` `16,640 )` `-` `-` `-` `-` `-` `-` `$` `130,616`		`$ 130,271,159` `1,943` `130,273,102` `-` `(` `952,569` `)` `22,165,228` `-` `-` `(` `12,987,717` `)` `34,941` `671,323` `-` `$ 140,156,877` `$ 140,156,877` `25,485,231` `(` `6,795,274` `)` `18,689,957` `-` `-` `(` `12,987,717` `)` `195,879` `(` `155,658` `)` `-` `$ 145,899,338`

(Continued)

DELTA ELECTRONICS, INC. PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY YEARS ENDED DECEMBER 31, 2020 AND 2019

(EXPRESSED IN THOUSANDS OF DOLLARS)

Share capital - common stock			Retained earnings				Other equityinterest
		Legal reserve	Special reserve		Unappropriated retained earnings	Financial statements translation differences of foreign operations	Unrealised gains (losses) on financial assets measured at fair value through other comprehensive income		Gains (losses) on hedging instruments
`$` `924,557` `-` `-` `-` `-` `-` `-` `-` `-` `$` `924,557`	`$ 1,747,760` `-` `-` `-` `-` `-` `6,972` ( `3,442`) `-` `$ 1,751,290`	`$` `890,933` `-` `-` `82,284` `-` `-` `-` `-` `-` `$` `973,217`	`$` `269,124` `-` `-` `-` `2,171` `-` `-` `-` `-` `$` `271,295`	`$ 1,427,598` `907,109` `(` `4,269` ) `902,840` `(` `82,284 )` `(` `2,171 )` `(` `462,279 )` `-` `(` `2,098 )` `(` `62,437 )` `$ 1,719,169`		`(` `$` `189,891` `)` `-` `(` `248,620 )` `(` `248,620` `)` `-` `-` `-` `-` `-` `-` `($` `438,511` `)`	`(` `$` `86,645` `)`	`$` `5,241` `-` ( `592` ) ( `592` ) `-` `-` `-` `-` `-` `-` `$` `4,649`		`$` `4,988,677` `907,109` ( `241,868`) `665,241` `-` `-` `(` `462,279` `)` `6,972` ( `5,540`) `-` `$` `5,193,071`
							`-` `11,613` `11,613` `-` `-` `-` `-` `-` `62,437` `($` `12,595` )

DELTA ELECTRONICS, INC.

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2020 AND 2019

(EXPRESSED IN THOUSANDS OF DOLLARS)

CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax for the year
Adjustments
Income and expenses having no effect on cash
flows
Depreciation
Amortisation
Expected credit impairment loss
Interest expense
Interest income
Dividend income
Share of profit of subsidiaries, associates and
joint ventures accounted for under the equity
method
Net (gain) loss on financial assets at fair value
through profit or loss
(Gain) loss on disposal of property, plant and
equipment
Loss (gain) on disposal of investments
Changes in assets/liabilities relating to
operating activities
Net changes in assets relating to operating
activities
Financial assets mandatorily measured at
fair value through profit or loss
Contract assets
Notes receivable
Accounts receivable
Accounts receivable - related parties
Other receivables
Other receivables - related parties
Inventories
Prepayments
Other current assets
Other non-current assets
Net changes in liabilities relating to operating
activities
Contract liabilities
Accounts payable
Accounts payable - related parties
Other payables
Other payables - related parties
Other current liabilities
Other non-current liabilities
Cash inflow generated from operations
Interest received
Dividends received
Interest paid
Income taxes paid
Net cash flows from operating activities

US Dollars
New Taiwan Dollars
Notes
2020
2020
2019
$ 1,016,227
$ 28,550,908 $ 25,195,937
6(7)(8)(21)
66,890
1,879,266
1,411,957
6(9)(21)
15,927
447,457
448,662
12(2)
597
16,770
14,602
6(20)
6,610
185,695
132,833
6(17)
(
241 ) (
6,772 ) (
17,125 )
6(18)
(
1,581 ) (
44,420 ) (
55,722 )
6(6)
(
788,213 ) (
22,144,854 ) (
20,755,540 )
6(2)(19)
(
35 ) (
993 )
4,241
6(19)
(
68 ) (
1,908 )
1,361
6(19)
781
21,946 (
2,113,283 )
-
-
27,152
(
79,631 ) (
2,237,232 )
144,791
1,045
29,361
6,146
(
84,512 ) (
2,374,353 )
2,547,349
(
84,855 ) (
2,384,000 ) (
2,170,142 )
194
5,441
255,243
(
5,857 ) (
164,564 )
180,693
(
29,782 ) (
836,728 ) (
505,188 )
8,550
240,207 (
238,464 )
1,613
45,326 (
74,976 )
2,479
69,656 (
64,930 )
81,760
2,297,050
8,303
18,048
507,054 (
175,745 )
33,658
945,624
83,303
43,433
1,220,256
694,436
(
3,586 ) (
100,753 ) (
36,740 )
(
5,748 ) (
161,461 ) (
373,450 )
(
10,405) (
292,320)
228,549
203,298
5,711,659
4,804,253
236
6,624
16,979
131,203
3,686,138
6,200,189
(
6,252 ) (
175,648 ) (
126,667 )
(
37,299) (
1,047,904) (
1,011,371)
291,186
8,180,869
9,883,383

(Continued)

DELTA ELECTRONICS, INC.

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2020 AND 2019

(EXPRESSED IN THOUSANDS OF DOLLARS)

CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of financial assets at fair value
through profit or loss
Acquisition of financial assets at fair value
through other comprehensive income
Proceeds from disposal of financial assets at fair
value through other comprehensive income
Acquisition of investments accounted for under
the equity method
Proceeds from capital reduction of investments
accounted for under the equity method
Acquisition of property, plant and equipment
Proceeds from disposal of property, plant and
equipment
Acquisition of intangible assets
Decrease (increase) in prepayments for business
facilities
Decrease in cash surrender value of life insurance
Increase in refundable deposits
Cash inflow due to business combinations
Net cash flows used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from long-term debt
Repayment of long-term debt
Increase in guarantee deposit received
Lease principal repayment
Cash dividends paid
Net cash flows used in financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year

US Dollars
New Taiwan Dollars
Notes
2020
2020
2019
( $ 32,034) ( $ 900,000)
$ -
-
-
(
11,190)
6(3)
17,863
501,867
402,780
(
6,303) (
177,078) (
309,510)
8,309
233,452
46,642
6(7)
(
185,663 ) (
5,216,193 ) (
6,110,524 )
476
13,364
27,859
6(9)
(
12,890 ) (
362,139 ) (
506,394 )
984
27,642
(
133,758)
372
10,441
6,827
(
326 ) (
9,169 ) (
2,066 )
6(25)
832
23,384
445,267
(
208,380) (
5,854,429) (
6,144,067)
6(26)
2,347,089
65,941,443
9,597,000
6(26)
(
1,933,369 ) (
54,317,998 )
-
-
-
122,570
(
2,886 ) (
81,084 ) (
65,941 )
6(15)
(
462,279) (
12,987,717) (
12,987,717)
(
51,445) (
1,445,356) (
3,334,088)
31,361
881,084
405,228
22,963
645,136
239,908
$ 54,324
$ 1,526,220
$ 645,136

Appendix 3

INDEPENDENT AUDITORS’ REPORT

To the Board of Directors and Shareholders of Delta Electronics, Inc.

Opinion

We have audited the accompanying consolidated balance sheets of Delta Electronics, Inc. and subsidiaries (the “Group”) as at December 31, 2020 and 2019, and the related consolidated statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, based on our audits and the reports of other auditors (please refer to the Other matter section), the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at December 31, 2020 and 2019, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the Financial Supervisory Commission.

Basis for opinion

We conducted our audits in accordance with the “Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants” and generally accepted auditing standards in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ responsibilities for the audit of the consolidated financial statements section of our report. We are independent of the Group in accordance with the Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. Based on our audits and the audit reports of other auditors, we believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Group’s 2020 consolidated financial statements. These matters were addressed in the context of our audit of the consolidated financial statements as a whole and, in forming our opinion thereon, we do not provide a separate opinion on these matters.

Key audit matters for the Group’s 2020 consolidated financial statements are stated as follows:

Assessment of the reasonableness of the purchase price allocation for business combination

Description

In June 2019, the Group acquired 100% of Amerlux, LLC. The allocation of the acquisition price was completed in the second quarter of 2020. The value of intangible assets, inclusive of goodwill and identifiable intangible assets-premium on customer relationship, etc., acquired from the merger is significant. The merger was accounted for in accordance with IFRS 3, “Business Combination”. For details of purchase price allocation, refer to Note 6(31).

How our audit addressed the matter

A. Assessing the setting of parameters of valuation models and calculation formulas;
B. Comparing expected growth rates and operating margin with historical data, economic and industry forecasts; and
C. Comparing the discount rate with the cost of capital assumptions of cash generating units and rate of return of similar assets.

Impairment assessment of goodwill

Description

As at December 31, 2020, the recognised goodwill as a result of the acquisitions of Cyntec Co., Ltd., Eltek AS, Delta Controls Inc., Delta Greentech (China) Co., Ltd., Amerlux, LLC and Loy Tec electronics GmbH amounted to NT$15,532,478 thousand, constituting 4.62% of the consolidated total assets. Refer to Notes 5(2) and 6(12) for details.

As the balance of goodwill acquired from the merger is material, the valuation model adopted in the impairment assessment has an impact in determining the recoverable amount which involves the significant accounting estimates and prediction of future cash flows. Thus, we consider the impairment

assessment of goodwill a key audit matter.

How our audit addressed the matter

We obtained management’s impairment assessment of goodwill, obtained an understanding of the process in determining the expected future cash flows based on each cash generating unit, and performed the following audit procedures:

A. Assessing whether the valuation models adopted by the Group are reasonable for the industry, environment and the valued assets of the Group;
B. Confirming whether the expected future cash flows adopted in the valuation model are in agreement with the budget provided by the business units; and
C. Assessing the reasonableness of material assumptions, such as expected growth rates, operating margin and discount rates, by:
(a) Checking the setting of parameters of valuation models and calculation formulas;
(b) Comparing the expected growth rate and operating margin with historical data, economic and industrial forecast documents; and
(c) Comparing the discount rate with cost of capital assumptions of cash generating units and rate of returns of similar assets.

Other matter – Reference to the audits of other auditors

We did not audit the consolidated financial statements of certain subsidiaries and investments accounted for under the equity method which were audited by other auditors. Therefore, our opinion expressed herein, insofar as it relates to the amounts included in respect of these subsidiaries, is based solely on the reports of the other auditors. Total assets of these subsidiaries amounted to NT$64,807,490 thousand and NT$56,952,036 thousand, constituting 19.26% and 18.31% of the consolidated total assets as at December 31, 2020 and 2019, respectively, and the operating revenue amounted to NT$63,667,883 thousand and NT$45,582,501 thousand, constituting 22.53% and 17.00% of the consolidated total operating revenue for the years then ended, respectively. The balance of investments accounted for under the equity method amounted to NT$0, constituting 0% of the consolidated total assets as at December 31, 2020 and 2019, and the comprehensive income recognized from associates and joint ventures accounted for under the equity method amounted to NT$0 and NT$429,060 thousand, constituting 0% and 1.80% of the consolidated total comprehensive income for the years then ended, respectively.

Other matter – Parent company only financial reports

We have audited and expressed an unqualified opinion with other matter section on the parent company only financial statements of Delta Electronics, Inc. as at and for the years ended December 31,

2020 and 2019.

Responsibilities of management and those charged with governance for the consolidated financial statements

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 the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the Financial Supervisory Commission, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

Those charged with governance, including audit committee, are responsible for overseeing the Group’s financial reporting process.

Auditors’ responsibilities for the audit of the consolidated financial statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the generally accepted auditing standards in the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

A. Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk

of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;

B. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control;

C. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management;

D. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group to cease to continue as a going concern;

E.

F.

Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation; and

Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current year and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or

regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The consolidated financial statements of Delta Electronics, Inc. and subsidiaries as at and for the year ended December 31, 2020 expressed in US dollars are presented solely for the convenience of the reader and were translated from the financial statements expressed in New Taiwan dollars using the exchange rate of $28.095 to US$1.00 at December 31, 2020. This basis of translation is not in accordance with International Financial Reporting Standards, International Accounting Standards, and relevant interpretations and interpretative bulletins that are ratified by the FSC.

Lin, Yu-Kuan Chou, Chien-Hung

for and on behalf of PricewaterhouseCoopers, Taiwan

February 24, 2021

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.

DELTA ELECTRONICS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2020 AND 2019

(EXPRESSED IN THOUSANDS OF DOLLARS)

Assets Current assets Cash and cash equivalents Financial assets at fair value through profit or loss - current Financial assets at fair value through other comprehensive income - current Contract assets - current Notes receivable, net Accounts receivable, net Accounts receivable - related parties Other receivables Current income tax assets Inventories Prepayments Other current assets Total current assets Non-current assets Financial assets at fair value through profit or loss - non-current Financial assets at fair value through other comprehensive income - non-current Contract assets - non-current Investments accounted for under the equity method Property, plant and equipment Right-of-use assets Investment property, net Intangible assets Deferred income tax assets Other non-current assets Total non-current assets Total assets	Notes 6(1) 6(2) 6(3) 6(21) 6(5) 6(5) 7 7 6(7) 8 6(2) 6(3) 6(21) 6(8) 6(9) and 8 6(10) 6(11) 6(12) 6(28) 6(5)(13) and 8	USDollars December 31, 2020 $ 2,089,766 37,777 - 77,261 132,892 2,106,333 1,505 64,193 12,980 1,597,773 77,281 27,078 6,224,839 104,723 68,613 18,749 27,941 2,436,091 107,519 501 2,685,874 230,351 69,037 5,749,399 $ 11,974,238	NewTaiwan Dollars	NewTaiwan Dollars
			December 31, 2020 $ 58,711,985 1,061,343 - 2,170,634 3,733,595 59,177,433 42,284 1,803,498 364,666 44,889,429 2,171,217 760,771 174,886,855 2,942,196 1,927,683 526,766 785,002 68,441,975 3,020,746 14,070 75,459,630 6,471,705 1,939,587 161,529,360 $ 336,416,215	December 31, 2019
				$ 43,960,001 1,122,458 319,823 1,087,489 3,816,628 52,955,106 263,644 1,480,157 372,654 39,316,423 2,400,734 463,074
				147,558,191
				2,225,239 1,797,301 304,338 1,138,920 63,590,981 3,113,833 14,070 82,432,653 6,679,405 2,182,359
				163,479,099
				$ 311,037,290

(Continued)

DELTA ELECTRONICS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2020 AND 2019

(EXPRESSED IN THOUSANDS OF DOLLARS)

Liabilities and Equity	Notes 6(14) 6(2) 6(21) 7 6(15) 6(15) 6(28) 6(17) 6(18) 6(19) 4(3) and 6(20) 9 11	USDollars NewTaiwan Dollars December 31, 2020 December 31, 2020 December 31, 2019 $ 71,242$ 2,001,532 $ 7,575,932 2,138 60,060 15,929 178,416 5,012,589 3,352,208 99 2,770 21,669 1,661,773 46,687,510 39,478,462 1,055 29,641 32,197 1,170,465 32,884,221 28,829,379 109,823 3,085,472 2,187,076 151,617 4,259,706 4,233,308 3,346,628 94,023,501 85,726,160 1,399,323 39,313,990 27,748,839 549,924 15,450,119 14,008,861 50,234 1,411,312 1,421,265 271,495 7,627,652 7,777,723 2,270,976 63,803,073 50,956,688 5,617,604 157,826,574 136,682,848 924,557 25,975,433 25,975,433 1,751,290 49,202,505 49,103,331 973,217 27,342,534 25,030,754 271,295 7,622,034 7,561,032 1,719,169 48,300,040 40,108,361 ( 446,457)( 12,543,208) ( 7,622,034) 5,193,071 145,899,338 140,156,877 1,163,563 32,690,303 34,197,565 6,356,634 178,589,641 174,354,442 $ 11,974,238$ 336,416,215 $ 311,037,290
Current liabilities Short-term borrowings Financial liabilities at fair value through profit or loss - current Contract liabilities - current Notes payable Accounts payable Accounts payable - related parties Other payables Current income tax liabilities Other current liabilities Total current liabilities Non-current liabilities Long-term borrowings Deferred income tax liabilities Lease liabilities - non-current Other non-current liabilities Total non-current liabilities Total liabilities Equity Share capital Common stock Capital surplus Capital surplus Retained earnings Legal reserve Special reserve Unappropriated retained earnings Other equity interest Other equity interest Equity attributable to owners of the parent Non-controlling interest Total equity Significant contingent liabilities and unrecorded contract commitments Significant subsequent events Total liabilities and equity

The notes in the consolidated financial statements and report of independent accountants are an integral part of these consolidated financial statements, please refer to the accompanying notes in the consolidated financial statements and report of independent accountants..

DELTA ELECTRONICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2020 AND 2019

(EXPRESSED IN THOUSANDS OF DOLLARS, EXCEPT EARNINGS PER SHARE DATA)

Items	Notes 6(21) and 7 6(7)(26) (27) and 7 6(26)(27) 12(2) 6(22) 6(23) 6(12)(24) 6(25) 6(8) 6(28)	US Dollars New Taiwan Dollars 2020 2020 2019 $ 10,058,925 $ 282,605,493 $ 268,131,397 ( 6,954,729 ) ( 195,393,115)( 193,635,252) 3,104,196 87,212,378 74,496,145 ( 655,989 ) ( 18,430,010) ( 19,837,224) ( 427,861 ) ( 12,020,761) ( 11,418,313) ( 906,918 ) ( 25,479,870) ( 23,887,886) 5,127 144,067 56,068 ( 1,985,641 ) ( 55,786,574)( 55,087,355) 1,118,555 31,425,804 19,408,790 19,368 544,147 886,537 140,232 3,939,821 3,150,629 ( 42,679 ) ( 1,199,056) 6,304,445 ( 13,377 ) ( 375,837) ( 737,869) ( 2,121) ( 59,596) 141,877 101,423 2,849,479 9,745,619 1,219,978 34,275,283 29,154,409 ( 245,273 ) ( 6,890,944)( 5,226,653) $ 974,705 $ 27,384,339 $ 23,927,756
Operating revenue Operating costs Gross profit Operating expenses Selling expenses General and administrative expenses Research and development expenses Expected credit impairment gain Total operating expenses Operating profit Non-operating income and expenses Interest income Other income Other gains and losses Finance costs Share of (loss) profit of associates and joint ventures accounted for under the equity method Total non-operating income and expenses Profit before income tax Income tax expense Profit for the year

(Continued)

DELTA ELECTRONICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2020 AND 2019

(EXPRESSED IN THOUSANDS OF DOLLARS, EXCEPT EARNINGS PER SHARE DATA)

Items Notes Other comprehensive income (loss) Components of other comprehensive income (loss) that will not be reclassified to profit or loss Loss on remeasurements of defined benefit plans Unrealised gain on valuation of equity investment at fair value through other comprehensive income 6(3) Share of other comprehensive income of associates and joint ventures accounted for under the equity method that will not be reclassified to profit or loss Income tax related to components of other comprehensive income that will not be reclassified to profit or loss 6(28) Other comprehensive income (loss) that will not be reclassified to profit or loss Components of other comprehensive income (loss) that will be reclassified to profit or loss Financial statements translation differences of foreign operations (Loss) gain on hedging instrument Share of other comprehensive income of associates and joint ventures accounted for under the equity method that will be reclassified to profit or loss Income tax relating to the components of other comprehensive income that will be reclassified to profit or loss 6(28) Other comprehensive (loss) income that will be reclassified to profit or loss Other comprehensive loss for the year Total comprehensive income for the year Profit attributable to: Owners of the parent Non-controlling interest Comprehensive income (loss) attributable to: Owners of the parent Non-controlling interest Earnings per share Basic earnings per share 6(29) Diluted earnings per share 6(29)	USDollars 2020 ( $ 5,580 ) 11,613 - 493 6,526 ( 341,408 ) ( 658 ) 29 16,948 ( 325,089 ) ($ 318,563) $ 656,142 $ 907,109 $ 67,596 $ 665,241 ($ 9,099 ) $ 0.35 $ 0.35	NewTaiwan Dollars 2020 2019 ($ 156,768) ( $ 336,375 ) 326,268 200,079 - 16,500 13,838 6,088 183,338 ( 113,708 ) ( 9,591,864) ( 2,958,933 ) ( 18,489) 2,700 819 3,535,054 476,157 ( 527,130 ) ( 9,133,377) 51,691 ($ 8,950,039)($ 62,017) $ 18,434,300 $ 23,865,739 $ 25,485,231 $ 23,117,797 $ 1,899,108 $ 809,959 $ 18,689,957 $ 22,165,228 ($ 255,657)$ 1,700,511 $ 9.81 $ 8.90 $ 9.77 $ 8.85

DELTA ELECTRONICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

YEARS ENDED DECEMBER 31, 2020 AND 2019

(EXPRESSED IN THOUSANDS OF DOLLARS)

Notes				Equityattr	utable to owners of t	heparent	heparent					Non-controlling interest	Total equity
	Share capital - common stock	Capital surplus		Retained earnings				Ot	her equityinterest		Total
			Legal reserve	Special reserve	Unappropriated retained earnings	Financial statements translation differences of foreign operations			Unrealised gain (loss) on financial assets measured at fair value through other comprehensive income	Gain (loss) on hedging instruments
6(19) 6(32) 6(3) 6(19) 6(32) 6(3)	`$ 25,975,433` `-` `25,975,433` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `$ 25,975,433` `$ 25,975,433` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `$ 25,975,433`	`$ 48,397,067` `-` `48,397,067` `-` `-` `-` `-` `-` `-` `34,941` `671,323` `-` `-` `$ 49,103,331` `$ 49,103,331` `-` `-` `-` `-` `-` `-` `195,879` `(` `96,705)` `-` `-` `$ 49,202,505`	`$ 23,211,444` `-` `23,211,444` `-` `-` `-` `1,819,310` `-` `-` `-` `-` `-` `-` `$ 25,030,754` `$ 25,030,754` `-` `-` `-` `2,311,780` `-` `-` `-` `-` `-` `-` `$ 27,342,534`	`$ 7,088,143` `-` `7,088,143` `-` `-` `-` `-` `472,889` `-` `-` `-` `-` `-` `$ 7,561,032` `$ 7,561,032` `-` `-` `-` `-` `61,002` `-` `-` `-` `-` `-` `$ 7,622,034`	`$ 33,160,104` `1,943` `33,162,047` `23,117,797` `(` `255,785)` `22,862,012` `(` `1,819,310)` `(` `472,889)` `(` `12,987,717)` `-` `-` `-` `(` `635,782)` `$ 40,108,361` `$ 40,108,361` `25,485,231` `(` `119,914)` `25,365,317` `(` `2,311,780)` `(` `61,002)` `(` `12,987,717)` `-` `(` `58,953)` `-` `(` `1,754,186)` `$ 48,300,040`		`($ 4,422,025)` `-` `(` `4,422,025)` `-` `(` `912,967)` `(` `912,967)` `-` `-` `-` `-` `-` `-` `-` `($ 5,334,992)` `($ 5,334,992)` `-` `(` `6,984,988)` `(` `6,984,988)` `-` `-` `-` `-` `-` `-` `-` `($ 12,319,980)`		`($ 3,270,159)` `-` `(` `3,270,159)` `-` `200,079` `200,079` `-` `-` `-` `-` `-` `-` `635,782` `($ 2,434,298)` `($ 2,434,298)` `-` `326,268` `326,268` `-` `-` `-` `-` `-` `-` `1,754,186` `($` `353,844)`	`$ 131,152` `-` `131,152` `-` `16,104` `16,104` `-` `-` `-` `-` `-` `-` `-` `$ 147,256` `$ 147,256` `-` `(` `16,640)` `(` `16,640)` `-` `-` `-` `-` `-` `-` `-` `$ 130,616`	`$ 130,271,159` `1,943` `130,273,102` `23,117,797` `(` `952,569)` `22,165,228` `-` `-` `(` `12,987,717)` `34,941` `671,323` `-` `-` `$ 140,156,877` `$ 140,156,877` `25,485,231` `(` `6,795,274)` `18,689,957` `-` `-` `(` `12,987,717)` `195,879` `(` `155,658)` `-` `-` `$ 145,899,338`	`$ 9,189,749` `-` `9,189,749` `809,959` `890,552` `1,700,511` `-` `-` `-` `-` `(` `4,947,661` `)` `28,254,966` `-` `$ 34,197,565` `$ 34,197,565` `1,899,108` `(` `2,154,765` `)` `(` `255,657` `)` `-` `-` `-` `-` `(` `243,181` `)` `(` `1,008,424` `)` `-` `$ 32,690,303`	`$` `139,460,908` `1,943` `139,462,851` `23,927,756` `(` `62,017` `)` `23,865,739` `-` `-` `(` `12,987,717` `)` `34,941` `(` `4,276,338` `)` `28,254,966` `-` `$` `174,354,442` `$` `174,354,442` `27,384,339` `(` `8,950,039` `)` `18,434,300` `-` `-` `(` `12,987,717` `)` `195,879` `(` `398,839` `)` `(` `1,008,424` `)` `-` `$` `178,589,641`

(Continued)

DELTA ELECTRONICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY YEARS ENDED DECEMBER 31, 2020 AND 2019

(EXPRESSED IN THOUSANDS OF DOLLARS)

Notes				Equityattr	utable to owners of t	eparent					Non-controlling interest	Total equity
	Share capital - common stock	Capital surplus		Retained earnings			Ot	her equityinterest		Total
			Legal reserve	Special reserve	Unappropriated retained earnings	Financial statements translation differences of foreign operations		Unrealised gain (loss) on financial assets measured at fair value through other comprehensive income	Gain (loss) on hedging instruments
6(19) 6(32) 6(3)	`$` `924,557` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `$` `924,557`	`$ 1,747,760` `-` `-` `-` `-` `-` `-` `6,972` `(` `3,442)` `-` `-` `$ 1,751,290`	`$` `890,933` `-` `-` `-` `82,284` `-` `-` `-` `-` `-` `-` `$` `973,217`	`$` `269,124` `-` `-` `-` `-` `2,171` `-` `-` `-` `-` `-` `$` `271,295`	`$ 1,427,598` `907,109` `(` `4,269)` `902,840` `(` `82,284)` `(` `2,171)` `(` `462,279)` `-` `(` `2,098)` `-` `(` `62,437)` `$ 1,719,169`	`($` `189,891)` `-` `(` `248,620)` `(` `248,620)` `-` `-` `-` `-` `-` `-` `-` `($` `438,511 )`		`($` `86,645)` `-` `11,613` `11,613` `-` `-` `-` `-` `-` `-` `62,437` `($` `12,595 )`	`$` `5,241` `-` `(` 592`)` `(` 592`)` `-` `-` `-` `-` `-` `-` `-` `$` `4,649`	`$` `4,988,677` `907,109` `(` `241,868)` `665,241` `-` `-` `(` `462,279)` `6,972` `(` `5,540)` `-` `-` `$` `5,193,071`	`$ 1,217,212` `67,596` `(` `76,695` `)` `(` `9,099` `)` `-` `-` `-` `-` `(` `8,656` `)` `(` `35,894` `)` `-` `$ 1,163,563`	`$` `6,205,889` `974,705` `(` `318,563` `)` `656,142` `-` `-` `(` `462,279` `)` `6,972` `(` `14,196` `)` `(` `35,894` `)` `-` `$` `6,356,634`

DELTA ELECTRONICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2020 AND 2019

(EXPRESSED IN THOUSANDS OF DOLLARS)

CASH FLOWS FROM OPERATING ACTIVITIES
Consolidated profit before tax for the year
Adjustments
Income and expenses having no effect on cash flows
Depreciation
Amortisation
Expected credit impairment gain
Net gain on financial assets or liabilities at fair
value through profit or loss
Interest expense
Interest income
Dividend income
(Reversal of) share-based payments
Share of loss (profit) of associates accounted for
under the equity method
Loss on disposal of property, plant and equipment
Loss (gain) on disposal of investments
(Reversal of) impairment loss on non-financial
assets
Changes in assets/liabilities relating to operating
activities
Net changes in assets relating to operating activities
Financial assets mandatorily measured at fair
value through profit or loss
Contract assets
Notes receivable
Accounts receivable
Accounts receivable - related parties
Other receivables
Inventories
Prepayments
Other current assets
Other non-current assets
Net changes in liabilities relating to operating
activities
Contract liabilities
Notes payable
Accounts payable
Accounts payable - related parties
Other payables
Other current liabilities
Other non-current liabilities
Cash inflow generated from operations
Interest received
Dividends received
Interest paid
Income taxes paid
Net cash flows from operating activities

US Dollars
New Taiwan Dollars
Notes
2020
2020
2019
$ 1,219,978
$ 34,275,283
$ 29,154,409
6(9)(10)(26)
427,980
12,024,107
10,912,594
6(12)(26)
136,894
3,846,049
3,072,851
12(2)
(
5,128 ) (
144,067 ) (
56,068 )
6(2)(24)
(
2,545 ) (
71,489 ) (
365,965 )
6(25)
13,377
375,837
731,745
6(22)
(
19,368 ) (
544,147 ) (
886,537 )
6(23)
(
6,769 ) (
190,171 ) (
282,302 )
6(30)
(
32 ) (
900 )
41,176
6(8)
2,121
59,596
(
141,877 )
6(24)
2,404
67,529
56,441
6(24)
3,405
95,654
(
6,001,894 )
6(24)
28,536
801,712
(
90,215 )
(
20,380 ) (
572,564 )
283,898
(
46,283 ) (
1,300,311 )
812,339
2,955
83,033
274,603
(
210,033 ) (
5,900,888 )
8,306,424
7,879
221,360
2,833,432
(
11,205 ) (
314,845 ) (
7,740 )
(
191,962 ) (
5,393,170 )
5,641,877
8,270
232,351
(
321,976 )
3,619
101,682
(
328 )
2,542
71,407
130,389
58,862
1,653,725
708,890
(
673 ) (
18,899 )
13,714
238,833
6,710,023
(
6,723,132 )
(
91 ) (
2,556 ) (
2,381,143 )
144,361
4,055,801
(
127,974 )
1,097
30,801
(
679,602 )
70
1,974
682,490
1,788,714
50,253,917
45,590,519
19,125
537,327
942,187
6,709
188,495
282,302
(
13,411 ) (
376,796 ) (
729,218 )
(
133,579 ) (
3,752,891 ) (
4,175,022 )
1,667,558
46,850,052
41,910,768

(Continued)

DELTA ELECTRONICS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2020 AND 2019

(EXPRESSED IN THOUSANDS OF DOLLARS)

CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of financial assets at fair value through other
comprehensive income
Proceeds from disposal of financial assets at fair value
through other comprehensive income

Proceeds from capital withdrawal liquidation of financial
asset at fair value through profit or loss
Acquisition of investments accounted for under the equity
method
Proceeds from disposal of investments accounted for
under the equity method
Net cash flow from acquisition of subsidiaries (net of cash
acquired)

Acquisition of property, plant and equipment

Proceeds from disposal of property, plant and equipment
Acquisition of intangible assets

Increase in other financial assets
Decrease (increase) in other non-current assets
Net cash flows used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
(Decrease) increase in short-term borrowings

Proceeds from long-term debt

Repayment of long-term debt

Lease principal repayment
Cash dividends paid

Cash dividends paid to minority share interests

Acquisition of ownership interests in subsidiaries

Net cash flows used in financing activities
Effects due to changes in exchange rate
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year

US Dollars
New Taiwan Dollars
Notes
2020
2020
2019
$ -
$ -
( $ 11,190 )
6(3)
17,863
501,867
1,114,871
158
4,444
-
-
-
(
12,154 )
258
7,240
-
6(31)
(
38,730 ) (
1,088,115 ) (
24,018,015 )
6(9)
(
634,933)(
17,838,456 ) (
16,866,186 )
7,029
197,480
472,561
6(12)
(
24,373 ) (
684,761 )(
666,967)
(
19,118 ) (
537,131 ) (
51,359 )
11,840
332,660
(
489,479)
(
680,006) (
19,104,772)(
40,527,918)
6(33)
(
198,412)(
5,574,400 )
1,316,870
6(33)
2,389,898
67,144,183
2,407,888
6(33)
(
1,978,874 ) (
55,596,451 )
-
(
18,404 ) (
517,080 )(
586,249)
6(19)
(
462,279 ) (
12,987,717 ) (
12,987,717 )
6(20)
(
31,868 ) (
895,326 ) (
2,320,171 )
6(32)
(
14,196) (
398,839) (
4,276,338)
(
314,135) (
8,825,630) (
16,445,717)
(
148,342) (
4,167,666)(
595,829)
525,075
14,751,984
(
15,658,696)
1,564,691
43,960,001
59,618,697
$ 2,089,766
$ 58,711,985
$ 43,960,001

Appendix 4 Audit Committee's Review Report

To ： The 2021 Annual General Shareholders' Meeting of Delta Electronics, Inc.

We, the Audit Committee of the Company have reviewed the business report, parent company only financial statements, consolidated financial statements and proposal for earnings distribution of the Company for the year 2020 in accordance with applicable laws and regulations and found the same have been complied with. We hereby report to the shareholders as described above in accordance with Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Act.

The Audit Committee of Delta Electronics, Inc.

Convenor of the Audit Committee: Yung-Chin Chen

Date ： February 24, 2021

Appendix 5 Delta Electronics, Inc. List of positions of the candidates for Directors in other companies


Name	Positions in Other Companies (Note)
Yancey Hai	CTCI Corporation	Director
	USI CORPORATION	Independent Director
	Taiwan Semiconductor Manufacturing Co., Ltd.	Independent Director and Compensation Committee Member
Mark Ko	Delta Greentech (China) Co., Ltd.	Director
	Delta Electronics (Thailand) Public Company Limited	Director
Bruce CH Cheng	Finestar International Limited	Director
	Hua-Chih Investment Co., Ltd. (translation)	Chairman
Ping Cheng	Delta Greentech (China) Co., Ltd.	Chairman
	Delta Energy Technology (Shanghai) Co., Ltd.	Chairman
	Delta Energy Technology Puhuan (Shanghai) Co., Ltd.	Executive Director
	Delta Electronics (Thailand) Public Company Limited	Director
Simon Chang	BETACERA INC.	Director
	Delta Greentech (China) Co., Ltd.	Vice-Chairman
	VIVOTEK INC.	Director
Victor Cheng	Lanner Electronics Inc.	Director
	Delta Networks (Xiamen) Ltd.	Vice-Chairman

Note：Excluding subsidiaries that are 100% owned by the Company.

Delta Electronics, Inc. List of positions of the candidates for Independent Directors in other companies

Name	Positions in Other Companies (Note)	Positions in Other Companies (Note)
Ji-Ren Lee	ACER Incorporated	Independent Director and Compensation Committee Member
	VIVOTEK INC.	Independent Director and Compensation Committee Member
	MediaTek Inc.	Compensation Committee Member
	Longchen Paper & Packaging Co., Ltd.	Director
	B Current Impact Investment Fund 3	Chairman
	Wesync Startup Service and Consulting Corporation Limited	Chairman
	AXR Entrepreneurship and Business Consulting Co., Ltd.	Chairman
	CommonWealth Education Media and Publishing Co., Ltd.	Director
	Social Enterprise Insights	Director
Shyue-Ching Lu	Sercomm Corp.	Director
	Radium Life Tech Co., Ltd.	Independent Director
	MiTAC Holdings Corporation	Independent Director
	CTCI Advanced Systems Inc.	Director
	XRSPACE CO., LTD.	Director
Rose Tsou	FNCapital Co., Ltd.	Chairman
	Verizon Media	Strategy Advisor
	HK Television Entertainment Company Limited	Director
	Sercomm Corp.	Independent Director and Compensation Committee Member

Delta Electronics, Inc.

List of positions of the candidates for Independent Directors in other companies


Name	Positions in Other Companies (Note)
Jack J. T. Huang	Wpg Holdings Limited	Independent Director
	Systex Corporation	Independent Director
	CTCI Corporation	Independent Director
	Yulon Motor Co., Ltd.	Director
	Taiwania Capital Buffalo Fund Co., Ltd.	Director
	Taiwania Capital Biotechnology Corporation	Director
	Taiwan Mobile Co., Ltd.	Advisor
	Yulon Group	Special Adviser Special Advisor to the CEO
	Catcher Technology Co., Ltd. Group	Special Advisor to the Chairman

Note：Excluding subsidiaries that are 100% owned by the Company.

AI assistant

DELTA — AGM Information 2021

52000_rns_2021-09-22_cf532131-7977-4128-8403-b416615884c3.pdf

Delta Electronics, Inc. ("Company") Minutes of 2021 Annual General Shareholders' Meeting

1. Report Items

2. Proposal Items

Resolution:

Delta Electronics, Inc. 2020 Earnings Distribution Table

Resolution:

3. Election Item

List of Candidates for Directors

c) Please Vote

4. Other Proposals

Explanation:

Resolution:

5. Extemporary Motions: None

Business Report

Power Electronics

Automation

Infrastructure

INDEPENDENT AUDITORS’ REPORT

Opinion

Basis for opinion

Key audit matters

Assessment of the reasonableness of the purchase price allocation for business combination

Description

How our audit addressed the matter

Impairment assessment of investments accounted for under equity method

Description

– Other matter Reference to the audits of other auditors

Responsibilities of management and those charged with governance for the parent company only financial statements

Auditors’ responsibilities for the audit of the parent company only financial statements

B.

C.

D.

E.

F.

DELTA ELECTRONICS, INC. PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31, 2020 AND 2019

DELTA ELECTRONICS, INC. PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31, 2020 AND 2019

DELTA ELECTRONICS, INC.

PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2020 AND 2019

DELTA ELECTRONICS, INC. PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY YEARS ENDED DECEMBER 31, 2020 AND 2019

DELTA ELECTRONICS, INC. PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY YEARS ENDED DECEMBER 31, 2020 AND 2019

DELTA ELECTRONICS, INC.

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2020 AND 2019

DELTA ELECTRONICS, INC.

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2020 AND 2019

INDEPENDENT AUDITORS’ REPORT

Opinion

Basis for opinion

Key audit matters

Assessment of the reasonableness of the purchase price allocation for business combination

Description

How our audit addressed the matter

Impairment assessment of goodwill

Description

How our audit addressed the matter

Other matter – Reference to the audits of other auditors

Other matter – Parent company only financial reports

2020 and 2019.

Responsibilities of management and those charged with governance for the consolidated financial statements

Auditors’ responsibilities for the audit of the consolidated financial statements

E.

F.

DELTA ELECTRONICS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2020 AND 2019

DELTA ELECTRONICS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2020 AND 2019

DELTA ELECTRONICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2020 AND 2019

DELTA ELECTRONICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2020 AND 2019

DELTA ELECTRONICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

YEARS ENDED DECEMBER 31, 2020 AND 2019

DELTA ELECTRONICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY YEARS ENDED DECEMBER 31, 2020 AND 2019

DELTA ELECTRONICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2020 AND 2019

DELTA ELECTRONICS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2020 AND 2019

Appendix 4

Audit Committee's Review Report

Appendix 5

Delta Electronics, Inc. List of positions of the candidates for Directors in other companies

DELTA AGM Information 2021

`–` Other matter Reference to the audits of other auditors