Stock Code: 2328

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Pan-International Industrial Corp.

2021 Annual General Meeting Meeting Handbook

Date and Time: 9:00 a.m., Friday, June 11, 2021 Location: No. 97, Anxing Rd., Xindian Dist., New Taipei City (Anxing Plant of the Company)

For the convenience of readers and for information purpose only, the meeting handbook, auditors’ reports and the accompanying financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. In the event of any discrepancy between the English version and the original Chinese version, or any difference in the interpretation between the two versions, the Chinese language meeting handbook, auditors’ report and financial statements shall prevail.

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One. Meeting Procedure
Two. Meeting Agenda.
I.
Report Items.
II.
Ratification Items.
III.
Discussion Items.
IV. Extraordinary Motions.
Three. Attachments
I.
2020 Business Report.
II.
Audit Committee’s Review Report.
III.
CPA Audit Report and Financial Statements.
IV. Earnings Distribution Table.
V.
Comparison Table for Amendments of “Procedures for Derivatives
Transactions”
Four. Appendix
I.
Rules of Procedure for Shareholders’ Meeting.
II.
Articles of Incorporation.
III.
Directors’ Shareholding Table.
IV. Impact of distribution of Bonus Shares on Business Performance of the
Company and Earning Per Share.

1
2
3
4
5
5
6
8
9
30
31
32
34
37
37

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Pan-International Industrial Corp. 2021 Annual General Meeting Procedure

I. Report of Number of Shares Represented by Attending Shareholders
II. Call the Meeting to Order

III. Chairman’s Remarks

IV. Report Items
V. Ratification Items
VI. Discussion Items

VII. Extraordinary Motions

VIII.Meeting Adjourned

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Pan-International Industrial Corp. 2021 Annual General Meeting Meeting Agenda

Time: 9:00 a.m., Friday, June 11, 2021

Location: No. 97, Anxing Rd., Xindian Dist., New Taipei City (Anxing

Plant of the Company)

I. Chairman’s Remarks:

II. Report Items:

2020 Business Report of the Company.
Audit Committee’s Review Report on the 2020 Financial Statements.
Report on 2020 distribution of remuneration of employees and directors of the Company.
Report on 2020 distribution of earnings and cash dividends status.
Other report matters.

III. Ratification Items:

Adoption of 2020 Business Report and Financial Statements.
Adoption of the proposal for distribution of 2020 earnings.

IV. Discussion Items:

Amendments to the “Procedures for Derivatives Transactions” of the Company.

V.Extraordinary Motions.

VI. Meeting Adjourned.

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Report Items

I. 2020 Business Report of the Company. Proposed for review.
Explanation: Please refer to 2020 Business Report of the Attachments. (Please see page 6 to page 7 of this Handbook)
II. Audit Committee’s Review Report on the 2020 Financial Statements. Proposed for review.
Explanation: Please refer to the Audit Committee’s Review Report of the Attachments. (Please see page 8 of this Handbook)
III. Report on 2020 distribution of remuneration of employees and directors of the Company. Proposed for review.
Explanation: The profit sought by the Company in 2020 totaled NT$ 802,872,526 (namely, the earnings before tax less the distribution of remuneration to employees and directors). 5% thereof were allocated as the remuneration to employees in cash, i.e. NT$ 40,143,627, and 0.5% thereof as the remuneration to directors, i.e. NT$ 4,014,36. Both were paid in cash.
IV. Report on 2020 distribution of earnings and cash dividends status. Proposed for review.
Explanation: 1. According to the provisions of the Articles of
```
 - Incorporation, for cash dividends, the board of directors is authorized to reach special resolution for distribution, followed by reporting to the shareholders’ meeting.
```
1. For the shareholders’ dividends, cash dividends of NT$ 336,925,083, and NT$ 0.65 is distributed per share. The cash dividend shall be rounded to the whole dollar amount according to the allocation rate. The total of the odd lots less than NT$1 included in the distribution shall be transferred to the employees’ welfare committee. The ex-dividend date is to be further specified by the board of directors’ meeting.

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In case where this proposal is affected by subsequent changes to the total number of outstanding shares encountered on a later date such that change to distribution rate for shareholders occurs, the chairman of the board is authorized to make adjustments and to handle relevant change matters.
V. Other report matters.

Explanation: 1. Pursuant to the provisions of the Company Act, shareholder(s) holding one percent (1%) or more of the total number of issued shares of a company may propose to the company a proposal for discussion at a regular shareholders’ meeting. The current proposal acceptance period is from March 29, 2021 to April 8, 2021.

Up to the end of the aforementioned proposal acceptance period, the Company receives no proposals submitted by the shareholders.

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Ratification Items

Proposal 1: Adoption of 2020 Business Report and Financial Statements, Proposed for review. (Proposed by the Board of Directors) Explanation: 1. The 2020 Business Report and Financial Statements of the Company have been reviewed by the Audit Committee, and the Financial Statements have also been audited and certified by CPA Man-Yu Lu and CPA Min-Chuan Feng of Pricewaterhouse Coopers (PwC) Taiwan.

For the reports and statements described in the preceding paragraph, please refer to the Attachments. (Please see page 6 to page 7 and page 9 to page 29 of this Handbook).
Proposed for ratification.

Resolution:

Proposal 2: Proposal for 2020 earnings distribution. Proposed for ratification.

(Proposed by the Board of Directors) Explanation: 1. The proposal for 2020 earnings distribution table of the Company is as shown in the Attachments. (Please see page 30 of this Handbook)

Proposed for ratification.

Resolution:

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Discussion Items

Proposal 1: Amendments to the “Procedures for Derivatives Transactions” of the

Company. Proposed for discussion. (Proposed by the Board of Directors) Explanation: To cope with the market transaction practice and to increase the transaction flexibility, parts of the provisions of the “Procedures for Derivatives Transactions” are planned to be amended. The comparison table for amendments is as shown in the Attachments. (Please see page 31 of this Handbook)

Resolution:

Extraordinary Motions

Meeting Adjourned

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2020 Business Report

Due to the impact of COVID-19, countries around the world all announced restrictive orders, leading to the shutdown a lot of manufacturing plants and facilities. Consequently, the revenue for the first half of the year indicated significant decline. In addition, to focus on the core business of the Company, the Company focused on its competitive products to increase the profit margin such that the Sharp OEM business was reduced. In 2020, the consolidated revenue showed a relatively greater decline from the revenue in 2019. Nevertheless, under the positive impact of the electronic component product combination optimization and the transfer of orders in the Southeast Asia business unit, the operating profit was maintained at the normal standard, and the Company continued to maintain its profit. In addition, the significant appreciation of NTD and CNY caused tremendous pressure on the non-operating foreign exchange loss. Consequently, in view of the overall year-round profit status, under the challenge of significant increase of difficulty imposed by the greater environment of corporate business management, the net income of this year declined from the last year.

While facing the greater environment of rapid change and severe competition, the Company will continue to review its expenditures in order to maintain its lowcost advantage and will also expand the automation planning, thereby increasing the production efficiency. In addition, the Company will also review the product and production capacity development strategy, recruit additional employees equipped with new techniques and establish plans for transformation and upgrade strategies, thereby enhancing the Company's future competitiveness and profitability. Looking to the future, the Company will continue to uphold the principle of diligent commitment and thrifty in order to overcome various obstacles, to increase revenue and to create profits continuously, thereby maintaining the goal of high profit growth to all shareholders for their full support of the Company.

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I. Report on 2020 Operating Outcome:
(I) The non-consolidated operating revenue was NT$12.1 billion, a decrease of 29.8% from NT$17.3 billion in 2019.
(II) The consolidated operating revenue was NT$20.5 billion in 2020, a decrease of 19.7 % from NT$25.6 billion in 2019.
(III) The consolidated net income before tax was NT$1.19 billion, a decrease of 22% from NT$1.53 billion in 2019.
(IV) The consolidated net income after tax was NT$0.79 billion, a decrease of 31.4% from NT$1.15 billion in 2019.
(V) The earnings per share (EPS) was NT$1.28.

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II. 2021 Business Outlook:

Under the environment of the trade war between the U.S. and China and the geopolitical competition, restructuring of supply chain is currently in process in a low-key but active manner, such that the planning of production capacity and logistics will have critical impacts on the competitiveness of companies. In addition, with the construction and planning of 5G telecommunication, new electric vehicles are actively developed by companies and the demands for medical equipment remains strong, providing new opportunities and market demands to the development of new industries in the future. In view of the above, the new year will be a year full of both opportunities and challenges. The Company will seize the timing and focus on the core and competitive products along with the implementation of transformation and upgrade to strengthen competitiveness and probability of the Company. Furthermore, the Company also establishes the following operational objectives and production and sale policies in order to achieve the strategic goals:

(I) Operational Objectives:
Focus on the electric vehicle and medical care industries, and actively improve product development technologies and production capability.
Integrate production capacities of all plant sites, and satisfy the production and logistics demands of customers at different regional markets.
Continue to review production cost and efficiency, and establish improvement plans, thereby improving the Company’s competitiveness.
(II) Production and Sale Policies:
Enhance the technical competence in the new industries of electric vehicle and medical equipment, and recruit senior technical development engineers and sales personnel, thereby actively expanding the product market share.

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Integrate the production resources in China and Southeast Asia, and provide production and logistics planning to customers at different regions, thereby satisfying customer demands and strengthening the development of Southeast Asian market jointly.
Seize the business opportunities of AIoT, active develop 5G, auto, medical and industrial control related products, and increase the product breadth and the weight of products of high gross margin, thereby improving profitability of the Company.
Enhance the response capability of all plants with respect to major accidents, review employee safety and health plan at all time, protect employees’ health, and maintain uninterrupted production and zero accidents.
Maintain close contact with the supply chain, prevent any shortage of raw materials, rigorously control inventory cost and reduce various expenses, thereby reducing the production cost.
Focus on corporate social responsibility related issues, increase environmental friendliness production standard and collaborate with customers to develop green products jointly, thereby achieving the objective of corporate sustainable operation.

While facing the future environmental changes and industrial development, the Company will seize opportunities to actively implement transformation and upgrade strategies, and will also enhance the business development in the industry of electric vehicle with best effort and expand the revenue from medical products. Furthermore, the Company will optimize the product revenue combination in order to enhance the profitability and competitiveness, as well as to improve corporate governance thereby achieving social return, and heading toward the objective of sustainable operation.

Chairman of the Board: Sung-Fa Lu

Managerial Officer: Accounting Supervisor: Sung-Fa Lu Feng-An Huang

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Audit Committee’s Review Report

The Board of Directors has prepared the Company’s 2020 business report, financial statements and the earnings distribution table. The Audit Committee has reviewed the aforementioned documents, and concluded that all information is presented fairly. We hereby submit this report in accordance with the provisions of Article 219 of the Company Act and Article 14-4 of the Securities and Exchange Act.

To:

Pan-International Industrial Corp. 2021 Annual General Meeting

Chairman of the Audit Committee: Wen-Jung Cheng

March 23, 2021

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Auditors’ Report (2021) Cai-Shen-Bao Zi. No. 20003400

To Pan-International Electronics Inc.

Audit Opinions

We have audited the Separate Balance Sheet of Pan-International Industrial Corp. of December 31, 2020 and 2019, and the Separate Comprehensive Income Statement, Separate Statement of Changes in Shareholders Equity, the Separate Statement of Cash Flows, and the Notes to Separate Financial Statements (including the significant accounting policies) covering the period of January 1 to December 31, 2020 and 2019.

In our opinion, on the basis of the result of our audit and the audit reports presented by other accountants (please refer to additional information section), all the material items prepared in these separate financial statements are in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers. Therefore, they are able to properly express the separate financial position of Pan-International Industrial Corp. as of December 31, 2020 and 2019, and the separate financial performance and separate cash flows from January 1 to December 31, 2020 and 2019.

Basis of our opinions

We conducted our audits in accordance with the Rules Governing Auditing and Certification of Financial Statements by Certified Public Accountants and the auditing principles generally accepted in the Republic of China for the statements of 2020, and the Regulations Governing the Audit and Certification of Financial Statements by Certified Public Accountants, Financial Supervisory Commission Letter Jin-Guan-Zheng-Shen Zi. No. 1090360805 dated February 5, 2020, and the auditing principles generally accepted in the Republic of China for the statements of 2019. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of Separate Financial Statements. We are independent of PanInternational Group in accordance with the Code of Ethics for Professional Accountants in the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. On the basis of the result of our audit and the audit reports presented by other auditors, we believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis of 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 separate financial statements of Pan-International Industrial Corp. in 2020. These matters were addressed in the context of our audit of the separate statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key audit matters in the 2020 Separate Financial Statements of Pan-International Industrial Corp. are specified below:

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Assessment of the provision for loss in valuation of inventory

Description:

For information on the accounting policy of valuation of inventory, refer to Note 4 (13) of the Notes to Separate Financial Statements. The accounting estimate, and the uncertainty of assumption of the valuation of inventory is specified in Note 5 (2) of the Notes to Separate Financial Statements. Notes to inventory items are specified in Note 6 (3) of the Notes to Separate Financial Statements. As of December 31, 2020, the balance of inventory and provision for valuation loss for Pan-International Industrial Corp. amounted to NT$207,250,000 and NT$50,976,000, respectively. The balance of inventory and provision for evaluation loss as stated in the consolidated financial statements of the same date amounted to NT$2,163,387 and NT$196,191,000, respectively.

The main product line marketed by Pan-International Industrial Corp. are cables for electronic signals, connectors, PCB and computer peripherals manufactured by subsidiaries. Rapid changes in the technological environment allows for only a short life cycle of the inventory. In addition, the inventory is highly vulnerable to price fluctuations in the market. The result is devaluation due to falling prices of inventory, or the risk of phase out is higher. Pan-International Industrial Corp. and its subsidiaries measure the normal sale of inventory using the lower of the cost or the net realizable value. The above provision for the valuation of inventory loss is mainly based on obsolete items or damaged items of inventory. The net realizable value is based on the experience of handling obsolete items of inventory in the estimation. Because the amount of inventory of Pan-International Industrial Corp. and subsidiaries is significant and the inventory covers a great variety of items, it requires human judgment in sorting out the obsolete or damaged items from the inventory. This requires further judgment in the audit. We therefore listed the provision for valuation loss of inventory of Pan-International Industrial Corp. and its subsidiaries as key audit matter.

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The appropriate audit procedure

We have conducted the following audit procedures on the provision for valuation loss of obsolete or damaged inventory:

Assess to determine if the policies for recognizing the provision for valuation loss of inventory in the financial statement period is consistent and reasonable.
Examine if the logic of the system of the inventory aging table for the valuation of inventory used by the management is appropriate, in order to confirm that the information presented in the financial statements is congruent with the policies.
Assess to determine if the provision for valuation loss of inventory is reasonable on the basis of the discussion with the management on the valuation of the net realizable value of the obsolete and damaged items of inventory and the supporting documents obtained.

The appropriateness of the manual journal entries

Description:

The journal entries tracked the day-to-day transactions that took place, and the balance of the items for the financial statements and transaction amount are constituted through posting, aggregation, and classification. Pan-International Industrial Corp. classifies its daily journal entries into automatic entries and manual entries. Automatic entries refers to the operation procedure of initial transactions through the front-end subsystem (e.g., the systems of sale, purchase, production, and inventory) and the approval procedure, and the transfer of related transaction entities to the daily journal. Manual entries use a manual operation mode to directly record and approve other non-automatic transfers in the daily journal.

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There are many modes for manual entries and they are complex, which involve manual operation and judgment. Inappropriate daily journal entries may result in material misstatement in the financial statements. We hold that manual entries in the daily journal are highly risky by nature, and singled out the examination of manual entries in the daily journal as key audit matter. The appropriate audit procedure

The audit procedure used and the general summary is specified as follows:

Understand and assess the character of manual entries in the daily journal and the entry process, the effectiveness of control, and the appropriate division of labor and authority among the staff, including inappropriate personnel, time, and account titles.
From the above understanding and assessment, for entries identified as high risk due to manual entry, we checked related supporting documents, the appropriateness of the entries, and the confirmation and approval of the authorized personnel.

Other matters - Audits conducted by other auditors

Some of the investee companies of Pan-International Industrial Corp. accounted for under the equity method were presented in the Separate Financial Statements. We did not audit the financial statements of these companies. These financial statements were audited by other certified public accountants, and we have made adjustments to these financial statements to make them consistent in accounting policy and conducted necessary examination procedures. Therefore, we presented an opinion on the above financial statements and the amount presented thereof is based on the auditors’ report of the other certified public accountants. The investment of the above companies accounted for under the equity method amounted to NT$2,837,693 thousand and NT$2,773,549 thousand as of December 31, 2020 and 2019, which accounted for 19% and 17% of the individual total assets, respectively. The comprehensive income recognized by the aforementioned companies in the period of January 1 to December 31, 2020 and 2019, amounted to NT$179,547 thousand and NT$142,334 thousand, and accounted for 25% and 24% of the individual comprehensive incomes, respectively.

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Responsibilities of Management and Those Charged with Governance for the Separate Financial Statements.

Management is responsible for the preparation and fair presentation of the separate 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 separate financial statements free from materials misstatement, whether due to fraud or error.

In preparing the separate financial statements., management is responsible for assessing the ability of Pan-International Industrial Corp. to continue as a going concern, disclosing relevant matters, and using the going concern basis of accounting, unless management either intends to liquidate Pan-International Industrial Corp. or to cease operations, or has no realistic alternative but to do so.

Those charged with governance (including the Auditing Committee) are responsible for overseeing the financial reporting process of Pan-International Industrial Corp.

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Auditor’s Responsibilities for the Audit of the Separate Financial Statements

Our objectives are to obtain reasonable assurance whether the separate financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s 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 auditing principles generally accepted in the Republic of China will always detect a material misstatement in the separate financial statements when it exists. Misstatements can arise from fraud or error. These 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 separate financial statements.

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

Identify and assess the risks of material misstatement of the separate 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.
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 internal control of Pan-International Industrial Corp.
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 Pan-International Industrial Corp. and its ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the separate 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 auditor’s report. However, future events or conditions may cause PanInternational Industrial Corp. to cease to continue as a going concern.

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Evaluate the overall presentation, structure and content of the separate financial statements (including the notes to the statements), and whether the separate financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities within Pan-International Industrial Corp. to express an opinion on the separate financial statements. We are responsible for the direction, supervision and performance of the separate audit, and we are responsible for forming an audit opinion on the separate financial statements.

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 separate financial statements of PanInternational Industrial Corp. in 2020 and therefore are 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.

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PwC Taiwan

Man-Yu Ruan Lui

Certified Public Accountant

Min-Chuan Feng

Former Financial Supervisory Commission, Executive Yuan Approval No.: Jin-Guan-Cheng-Shen-ZiNo. 0990058257

Former Securities and Futures Bureau, Financial Supervisory Commission, Executive Yuan Approval No.: Jin-Guan-Cheng-VI-ZiNo. 0960038033

March 23, 2021

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Pan-International Industrial Corp. Separate Balance Sheet December 31, 2020 and 2019

Assets	Note 6 (1) 6 (2) 7 7 6 (3) 6 (4) 6 (5) 6 (6) 6 (7) 6 (20)	December31,2020 Amount % $ 1,376,015 9 938,742 6 1,489,916 10 423,543 3 156,274 1 2,270 - 4,386,760 29 1,233,266 9 9,254,068 62 18,788 - 34,371 - 27,451 - 248 - 10,568,192 71 $ 14,954,952 100	Unit: NTD thousand December31,2019 Amount % $ 496,952 3 1,393,409 8 2,712,213 17 444,383 3 768,746 5 3,411 - 5,819,114 36 855,556 6 9,425,629 58 19,704 - 34,591 - 38,194 - 648 - 10,374,322 64 $ 16,193,436 100
		Amount $ 1,376,015 938,742 1,489,916 423,543 156,274 2,270 4,386,760 1,233,266 9,254,068 18,788 34,371 27,451 248 10,568,192 $ 14,954,952	Amount $ 496,952 1,393,409 2,712,213 444,383 768,746 3,411 5,819,114 855,556 9,425,629 19,704 34,591 38,194 648 10,374,322 $ 16,193,436
Current assets 1100 Cash and cash equivalents 1170 Net accounts receivable 1180 Accounts receivable - Related parties net 1200 Other receivables 130X Inventory 1479 Other current assets -others 11XX Total current assets Non-Current Assets 1517 Financial assets measured at fair value through other comprehensive income - Non-current 1550 Investment by equity method 1600 Property, plant, and equipment 1760 Net investment property 1840 Deferred tax assets 1990 Other noncurrent assets - others 15XX Total non-current assets 1XXX Total assets

(To be Continued)

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Pan-International Industrial Corp. Separate Balance Sheet December 31, 2020 and 2019

LIABILITIES AND EQUITY	Unit: NTD thousand December31,2020 December31,2019 Note Amount % Amount % 6 (8) $ 1,367,040 9 $ 1,573,950 10 42,286 - 36,448 - 661,873 4 1,095,039 7 7 1,299,798 9 2,102,596 13 6 (9) 174,857 1 190,544 1 6 (20) 77,878 1 61,093 - 500 - 768 - 3,624,232 24 5,060,438 31 6 (20) 147,286 1 128,223 1 6 (10) 12,459 - 40,776 - 5,186 - 5,187 - 164,931 1 174,186 1 3,789,163 25 5,234,624 32 6 (11) 5,183,462 35 5,183,462 32 6 (12) 1,503,606 10 1,503,606 10 6 (13) 1,062,342 7 959,410 6 1,312,274 9 883,205 6 3,453,829 23 3,741,403 23 6 (14) ( 1,349,724) ( 9 ) ( 1,312,274) ( 9) 11,165,789 75 10,958,812 68 $ 14,954,952 100 $ 16,193,436 100
Current liability 2100 Short-term borrowings 2130 Contractual liabilities - Current 2170 Accounts payable 2180 Accounts payable - Related parties 2200 Other payables 2230 Current tax liabilities 2399 Other current liabilities - Other 21XX Total current liabilities Non-current liabilities 2570 Deferred tax liabilities 2640 Net defined benefit liabilities- noncurrent 2670 Other noncurrent liabilities - others 25XX Total non-current liabilities 2XXX Total liabilities interests Share capital 3110 Common share capital Capital surplus 3200 Capital surplus Retained earnings 3310 Legal reserve 3320 Special reserve 3350 Unappropriated earnings Other equities 3400 Other equities 3XXX Total equity 3X2X Total liabilities and equity

LIABILITIES AND EQUITY

Unit: NTD thousand
December31,2020

December31,2019
Note
Amount

%
Amount

%
6 (8)
$ 1,367,040
9
$ 1,573,950
10
42,286
-
36,448
-
661,873
4
1,095,039
7
7
1,299,798
9
2,102,596
13
6 (9)
174,857
1
190,544
1
6 (20)
77,878
1
61,093
-
500
-
768
-
3,624,232
24
5,060,438
31
6 (20)
147,286
1
128,223
1
6 (10)
12,459
-
40,776
-
5,186
-
5,187
-
164,931
1
174,186
1
3,789,163
25
5,234,624
32
6 (11)
5,183,462
35
5,183,462
32
6 (12)
1,503,606
10
1,503,606
10
6 (13)
1,062,342
7
959,410
6
1,312,274
9
883,205
6
3,453,829
23
3,741,403
23
6 (14)
(
1,349,724) (
9 ) (
1,312,274) (
9)
11,165,789
75
10,958,812
68
$ 14,954,952
100
$ 16,193,436
100

Current liability
2100
Short-term borrowings
2130
Contractual liabilities - Current
2170
Accounts payable
2180
Accounts payable - Related parties
2200
Other payables
2230
Current tax liabilities
2399
Other current liabilities - Other
21XX
Total current liabilities
Non-current liabilities
2570
Deferred tax liabilities
2640
Net defined benefit liabilities-
noncurrent
2670
Other noncurrent liabilities - others
25XX
Total non-current liabilities
2XXX
Total liabilities
interests
Share capital
3110
Common share capital
Capital surplus
3200
Capital surplus
Retained earnings
3310
Legal reserve
3320
Special reserve
3350
Unappropriated earnings
Other equities
3400
Other equities
3XXX
Total equity
3X2X
Total liabilities and equity

The notes to the separate financial statements attached constitute an integral part of the statements, please refer to them, too.

Chairman ： Sung-Fa Lu

Accounting supervisor ： Feng-An Huang

Manager ： Sung-Fa Lu

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Pan-International Industrial Corp. Separate Comprehensive Income Statement January 1 to December 31, 2020 and 2019

Unit: NTD thousand (except in NTD for earnings per share)

Item	2020 2019 Note Amount % Amount % 6 (15) and 7 $ 12,132,878 100 $ 17,288,805 100 6 (13) (18) and 7 ( 11,526,383 ) ( 95)( 16,656,188 )( 96) 606,495 5 632,617 4 6 (18) ( 70,729 ) - ( 90,863 ) ( 1) ( 70,307 ) ( 1) ( 73,851 ) - ( 12,380 ) - ( 11,832 ) - 12 (2) ( 1,848 ) - 319 - ( 155,264 ) ( 1)( 176,227 )( 1) 451,231 4 456,390 3 8,343 - 9,574 - 6 (16) 9,225 ( 1) 17,068 - 6 (17) ( 29,460 ) - 123,929 1 6 (19) ( 21,966 ) - ( 44,254 ) - 341,342 3 591,614 3 307,484 2 697,931 4 758,715 6 1,154,321 7 6 (20) ( 95,525 ) ( 1)( 124,998 )( 1) $ 663,190 5 $ 1,029,323 6 6 (10) $ 26,166 - ($ 3,867 ) - 6 (14) 554,103 5 ( 107,578 ) ( 1) 6 (21) ( 411,687 ) ( 3) ( 43,222 ) - 6 (20) ( 5,233 ) - 773 - 163,349 2 ( 153,894 )( 1)
4000 Operating revenue 5000 Operating cost 5900 Operating profit margin Operating expenses 6100 Selling and marketing expenses 6200 General and administrative expenses 6300 Research and development expenses 6450 Anticipated credit impairment (loss) benefit 6000 Total operating expenses 6900 Operating profit Non-operating income and expense 7100 Interest income 7010 Other income 7020 Other gains and losses 7050 Financial costs 7070 The proportion of income from subsidiaries, associates, and joint ventures accounted for under the equity method 7000 Total non-operating income and expenses 7900 Net income before tax 7950 Income tax expense 8200 Net income for the period Other comprehensive income (net) Items that will not be reclassified subsequently to profit or loss 8311 Remeasured value of defined benefit plan 8316 Unrealized evaluation profit and loss of equity instrument investment measured at fair value through other comprehensive income 8330 The proportion of income from subsidiaries, associates, and joint ventures accounted for under the equity method- items not reclassified as income 8349 Income tax related to items not reclassified 8310 Total of items not reclassified to profit or loss Items that may be reclassified

Item

2020
2019
Note
Amount
%
Amount
%
6 (15) and 7
$ 12,132,878
100
$ 17,288,805
100
6 (13) (18) and
7
(
11,526,383 ) (
95)(
16,656,188 )(
96)
606,495
5
632,617
4
6 (18)
(
70,729 )
- (
90,863 ) (
1)
(
70,307 ) (
1) (
73,851 )
-
(
12,380 )
- (
11,832 )
-
12 (2)
(
1,848 )
-
319
-
(
155,264 ) (
1)(
176,227 )(
1)
451,231
4
456,390
3

8,343
-
9,574
-
6 (16)
9,225 (
1)
17,068
-
6 (17)
(
29,460 )
-
123,929
1
6 (19)
(
21,966 )
- (
44,254 )
-

341,342
3
591,614
3
307,484
2
697,931
4
758,715
6
1,154,321
7
6 (20)
(
95,525 ) (
1)(
124,998 )(
1)
$ 663,190
5
$ 1,029,323
6
6 (10)
$ 26,166
- ($ 3,867 )
-
6 (14)
554,103
5
(
107,578 ) (
1)

6 (21)
(
411,687 ) (
3) (
43,222 )
-
6 (20)
(
5,233 )
-
773
-
163,349
2
(
153,894 )(
1)

4000
Operating revenue
5000
Operating cost
5900
Operating profit margin
Operating expenses
6100
Selling and marketing expenses
6200
General and administrative
expenses
6300
Research and development
expenses
6450
Anticipated credit impairment
(loss) benefit
6000
Total operating expenses
6900
Operating profit
Non-operating income and expense
7100
Interest income
7010
Other income
7020
Other gains and losses
7050
Financial costs
7070
The proportion of income from
subsidiaries, associates, and joint
ventures accounted for under the
equity method
7000
Total non-operating income
and expenses
7900
Net income before tax
7950
Income tax expense
8200
Net income for the period
Other comprehensive income
(net)
Items that will not be reclassified
subsequently to profit or loss
8311
Remeasured value of defined
benefit plan
8316
Unrealized evaluation profit and
loss of equity instrument
investment measured at fair
value through other
comprehensive income
8330
The proportion of income from
subsidiaries, associates, and joint
ventures accounted for under the
equity method- items not
reclassified as income
8349
Income tax related to items not
reclassified
8310
Total of items not reclassified
to profit or loss
Items that may be reclassified

The notes to the separate financial statements attached constitute an integral part of the statements, please refer to them, too.

Manager ： Sung-Fa Lu

Chairman ： Sung-Fa Lu

Accounting supervisor ： Feng-An Huang

~24~

Pan-International Industrial Corp. Separate Comprehensive Income Statement January 1 to December 31, 2020 and 2019

Unit: NTD thousand (except in NTD for earnings per share)

subsequently to profit or loss: 8361 Currency translation difference 6 (14) 8360 Total of items that may be reclassified subsequently to profit or loss: 8300 Other comprehensive income (net) 8500 Total comprehensive income in the current period Earnings per share (EPS) 6 (22) 9750 Basic earnings per share 9850 Diluted earnings per share	( 101,216 ) ( 101,216 ) $ 62,133 $ 725,323 $	( 1) ( 1) 1 6 1.28 1.27	( 278,778 )( 2) ( 278,778 )( 2) ($ 432,672 )( 3) $ 596,651 3 $ 1.99 $ 1.97
	$

The notes to the separate financial statements attached constitute an integral part of the statements, please refer to them, too.

Chairman ： Sung-Fa Lu

Manager ： Sung-Fa Lu Accounting supervisor ： Feng-An Huang

~25~

Pan-International Industrial Corp. Separate Statement of Changes in Shareholders Equity January 1 to December 31, 2020 and 2019

Unit: NTD thousand

2019 January 1 Net income for the period Other comprehensive income recognized for the period Total comprehensive income in the current period Earnings distribution and appropriation for 2018: Provision of legal reserve Provision of special reserve Cash dividends December 31 2020 January 1 Net income for the period Other comprehensive income recognized for the period Total comprehensive income in the current period Earnings distribution and provisions for 2019: Provision of legal reserve Provision of special reserve Cash dividends Equity instruments measured at fair value through other comprehensive income December 31	Note		Common share capital				Capitalsurplus						Retained earnings				Otherequities	Otherequities	Otherequities		Total Equity
					Capital reserve - Issuance premium		Capital reserve - Treasury share transaction		Capital reserve - difference between the price and face value from the acquisition or disposal of equity withsubsidiaries.		Legal reserve		Special reserve		Unappropriated earnings		Currency translation difference		Unrealized Gain (Loss) on Financial Assets at Fair Value through Other Comprehensive Income
	6 (14) (21) 6 (13) 6 (14) (21) 6 (13) 6 (14)		$ 5,183,462 - - - - - - $ 5,183,462 $ 5,183,462 - - - - - - - $ 5,183,462		$ 1,402,318 - - - - - - $ 1,402,318 $ 1,402,318 - - - - - - - $ 1,402,318		$ 98,543 - - - - - - $ 98,543 $ 98,543 - - - - - - - $ 98,543		$ 2,745 - - - - - - $ 2,745 $ 2,745 - - - - - - - $ 2,745		$ 840,872 - - - 118,538 - - $ 959,410 $ 959,410 - - - 102,932 - - - $ 1,062,342		$ 496,898 - - - - 386,307 - $ 883,205 $ 883,205 - - - - 429,069 - - $ 1,312,274		$ 3,790,709 1,029,323 ( 3,603 ) 1,025,720 ( 118,538 ) ( 386,307 ) ( 570,181 ) $ 3,741,403 $ 3,741,403 663,190 20,860 684,050 ( 102,932 ) ( 429,069 ) ( 518,346 ) 78,723 $ 3,453,829		($ 783,138 ) - ( 278,778 ) ( 278,778 ) - - - ($ 1,061,916 ) ($ 1,061,916 ) - ( 101,216 ) ( 101,216 ) - - - - ($ 1,163,132 )		($ 100,067 ) - ( 150,291 ) ( 150,291 ) - - - ($ 250,358 ) ($ 250,358 ) - 142,489 142,489 - - - ( 78,723 ) ($ 186,592 )	$10,932,342 1,029,323 ( 432,672 ) 596,651 - - ( 570,181 ) $10,958,812 $ 10,958,812 663,190 62,133 725,323 - - ( 518,346 ) - $ 11,165,789

The notes to the separate financial statements attached constitute an integral part of the statements, please refer to them, too.

Chairman: Sung-Fa Lu

Accounting supervisor: Feng-An Huang

Manager: Sung-Fa Lu

~26~

Pan-International Industrial Corp. Separate Statement of Cash Flows January 1 to December 31, 2020 and 2019

Unit: NTD thousand

CASH FLOWS FROM OPERATING ACTIVITIES
Income before income tax
Adjustments
income and expenses items
Depreciation expenses and amortizations

Provision for anticipated credit impairment loss
(reversal gain)

Net benefits of financial assets and liabilities
measured at fair value through the income

Interest expense

Interest income
Dividend income

The proportion of income from subsidiaries,
associates, and joint ventures accounted for under
the equity method
Net profit from the disposal of non-current assets
pending for sale

Unrealized foreign exchange gain

Changes in assets/liabilities related to business
activities
Net change in assets related to business activities
Financial assets and liabilities measured at fair
value through the income
Net accounts receivable
Accounts receivable - Related parties net
Inventory
Other receivables
Other current assets
Net change in liabilities related to business
activities
Accounts payable
Accounts payable - Related parties
Other payables
Other current liabilities
Other non-current liabilities
Contractual liabilities
Cash inflow from operations
Income tax paid
Net cash inflow from business activities
Cash flows from investing activities
Decrease (increase) of funds lent to related parties
Proceeds from disposal of financial assets measured at
fair value through other comprehensive income
Return of capital investment in financial assets
measured at fair value through other comprehensive
income
Proceeds from disposal of non-current assets pending
for sale
Purchase of property, plant and equipment
Decrease (increase) of receivables from purchase of
materials for a third party
Decrease in refundable deposits
Interest received
Dividend received
Net cash inflow from investment
Cash flows from financing activities
Decrease in short-term borrowings

Note
January 1 to
December 31,2020
January 1 to
December 31,2019
$ 758,715 $ 1,154,321
6 (18)
1,544
1,571
12 (2)
1,848 (
319 )
6 (17)
- (
13,934 )
6 (19)
21,966
44,254
(
8,343 ) (
9,574 )
6 (16)
- (
5,663 )
(
341,342 ) (
591,614 )
6 (17)
- (
145,112 )
6 (23)
(
73,935 ) (
37,140 )
-
50,600
452,597 (
172,149 )
1,222,520
1,000,034
612,472
288,121
42,563
111,817
1,141
465
(
433,166 ) (
710,764 )
(
802,798 )
87,835
(
41,780 ) (
74,988 )
(
268 ) (
158 )
(
2,151 )
2,482
5,838 (
121,113 )
1,417,421
858,972
(
54,167 ) (
137,589 )
1,363,254
721,383
946 (
989 )
166,954
-
9,439
-
-
246,191
(
220 )
-
3,423 (
24,638 )
211
-
8,343
9,574
-
13,363
189,096
243,501
6 (23)
(
132,975 ) (
278,190 )

The notes to the separate financial statements attached constitute an integral part of the statements, please refer to them, too.

Chairman ： Sung-Fa Lu

Accounting supervisor ： Feng-An Huang

Manager ： Sung-Fa Lu

~27~

Pan-International Industrial Corp. Separate Statement of Cash Flows January 1 to December 31, 2020 and 2019

Unit: NTD thousand

Interest paid Cash dividend payment Net cash outflow from financing activities Increase in cash and cash equivalents in the current period Cash and cash equivalents at the beginning of the period Cash and cash equivalents at the end of the period	Note January 1 to December 31,2020 January 1 to December 31,2019 ( 21,966 ) ( 44,254 ) 6 (13) ( 518,346 ) ( 570,181 ) ( 673,287 ) ( 892,625 ) 879,063 72,259 496,952 424,693 $ 1,376,015 $ 496,952

The notes to the separate financial statements attached constitute an integral part of the statements, please refer to them, too.

Chairman ： Sung-Fa Lu

Accounting supervisor ： Feng-An Huang

Manager ： Sung-Fa Lu

~28~

Auditors’ Report

(2020) Cai-Shen-Bao-Zi No. 20003894

To Pan-International Industrial Corp.

Audit Opinions

We have audited the consolidated balance sheet of December 31, 2020 and December 31, 2019, the consolidated comprehensive income sheet, consolidated statement of changes in equity, consolidated statement of cash flows from January 1 to December 31, 2020 and 2019, and the notes to the consolidated financial statements (including the summary of material accounting policies) of Pan-International Industrial Corp. and its subsidiaries (hereinafter “PanInternational Group”).

In our opinion, on the basis of the result of our audit and the audit reports presented by other accountants (please refer to additional information section), all the material items prepared in these consolidated financial statements are in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), interpretations and interpretation announcements recognized by the Financial Supervisory Commission. Therefore, they are able to properly express the consolidated financial status of Pan-International Group as of December 31, 2020 and 2019, and the consolidated financial performance and consolidated cash flows from January 1 to December 31, 2020 and 2019.

~29~

Basis of our opinions

We conducted our audits in accordance with the Rules Governing Auditing and Certification of Financial Statements by Certified Public Accountants and the auditing principles generally accepted in the Republic of China for the statements of 2020, and the Regulations Governing the Audit and Certification of Financial Statements by Certified Public Accountants, Financial Supervisory Commission Letter Jin-Guan-Zheng-Shen Zi. No. 1090360805 dated February 5, 2020, and the auditing principles generally accepted in the Republic of China for the statements of 2019. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of Consolidated Financial Statements. We are independent of Pan-International Group in accordance with the Code of Ethics for Professional Accountants in the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. On the basis of the result of our audit and the audit reports presented by other auditors, we believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis of 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 consolidated financial statements of the Group in 2020. These matters were addressed in the context of our audit of the consolidated statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

The key audit matters of the consolidated financial statements of the year 2020 of PanInternational Group are as follows:

~30~

Assessment of the provision for loss in valuation of inventory

Description:

For additional information on the accounting policy of inventory valuation, refer to Note 4 (14) of the consolidated financial statements. For information on the uncertainty of accounting estimates and assumptions for inventory valuation, refer to Note 5 (2) of the consolidated financial statements. For a description of the inventory items, refer to Note 6 (4) of the consolidated financial statements. As of December 31, 2020, Pan-International Group recognized inventory loss and provision for valuation loss of inventory amounting to NT$2,163,387 thousand and NT$196,191 thousand, respectively.

Pan-International Group mainly produces cables for electronic signals, connectors, PCB and computer peripherals manufactured by subsidiaries. Rapid changes in the technological environment allow for only a short life cycle of the inventory. In addition, the inventory is highly vulnerable to price fluctuations in the market. The result is devaluation due to falling prices of inventory, or the risk of phase out is higher. Pan-International Group measures the normal sale of inventory using the lower of the cost or the net realizable value. The above provision for the valuation of inventory loss is mainly based on obsolete items or damaged items of inventory. The net realizable value is based on the experience of handling obsolete items of inventory in the estimation. Because the amount of inventory of Pan-International Group is significant and the inventory covers a great variety of items, it requires human judgment in sorting out the obsolete or damaged items from the inventory. This requires further judgment in the audit. We therefore listed the provision for valuation loss of inventory of Pan-International Group as key audit matter.

~31~

The appropriate audit procedure

We have conducted the following audit procedures on the provision for valuation loss of obsolete or damaged inventory:

Assess to determine if the policies for recognizing the provision for valuation loss of inventory in the financial statement period is consistent and reasonable.
Examine if the logic of the system of the inventory aging table for the valuation of inventory used by the management is appropriate, in order to confirm that the information presented in the financial statements is congruent with the policies.
Assess to determine if the provision for valuation loss of inventory is reasonable on the basis of the discussion with the management on the valuation of the net realizable value of the obsolete and damaged items of inventory and the supporting documents obtained.

The appropriateness of manual daily journal entries

Description:

The journal entries tracked the day-to-day transactions that took place, and the balance of the items for the financial statements and transaction amount are constituted through posting, aggregation, and classification. Pan-International Group classifies its daily journal entries into automatic entries and manual entries. Automatic entries refers to the operation procedure of initial transactions through the front-end subsystem (e.g., the systems of sale, purchase, production, and inventory) and the approval procedure, and the transfer of related transaction entities to the daily journal. Manual entries use a manual operation mode to directly record and approve other non-automatic transfers in the daily journal.

~32~

The appropriate audit procedure

The audit procedure used and the general summary is specified as follows:

Understand and assess the character of manual entries in the daily journal and the entry process, the effectiveness of control, and the appropriate division of labor and authority among the staff, including inappropriate personnel, time, and account titles.
From the above understanding and assessment, for entries identified as high risk due to manual entry, we checked related supporting documents, the appropriateness of the entries, and the confirmation and approval of the authorized personnel.

Additional information - audits conducted by other auditors

Some of the investee companies of Pan-International Group accounted for under the equity method were presented in the consolidated financial statements. We did not audit the financial statements of these companies. These financial statements were audited by other certified public accountants, and we have made adjustments to these financial statements to make them consistent in accounting policy and conducted necessary examination procedures. Therefore, the opinions on the aforementioned consolidated financial statements regarding the amount presented in the aforementioned financial statements of these companies before adjustment were based on the Auditors’ Report of other certified public accountants. The total assets of the aforementioned companies (including the investment accounted for under the equity method) as of December 31, 2020 and 2019, amounted to NT$5,766,000 thousand and NT$5,059,247 thousand, respectively, accounting for 28% and 23% of the consolidated total assets, respectively. Revenue for the years ended December 31, 2020 and 2019, amounted to NT$5,225,571 thousand and NT$5,257,526 thousand, respectively, accounting for 25% and 21% of the consolidated net operating income, respectively.

~33~

Additional information - Issuance of Auditors’ Report on Separate Financial Statements

Pan-International Industrial Corp. has prepared the separate financial statements of 2020 and 2019. We have audited these statements and issued an unqualified opinion and additional information. Auditors’ Reports issued by other accountants are on record for reference.

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, the IFRS, IAS, IFRIC and SIC recognized 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 ability of Pan-International Group to continue as a going concern, disclosing relevant matters, and using the going concern basis of accounting, unless management either intends to liquidate Pan-International Group or to cease operations, or has no realistic alternative but to do so.

Those charged with governance (including the Auditing Committee) are responsible for overseeing the financial reporting process of Pan-International Group.

~34~

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s 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 auditing principles generally accepted in the Republic of China will always detect a material misstatement in the financial statements when it exists. Misstatements can arise from fraud or error. These 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 financial statements.

Identify and assess the risks of material misstatement of the conslidated 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.
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 internal control of Pan-International Group.
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 Pan-International Group and its ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the 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 auditor’s report.

~35~

However, future events or conditions may cause Pan-International Group to cease to continue as a going concern.

Evaluate the overall presentation, structure and content of the consolidated financial statements (including the notes to the statements), and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities 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, and we are responsible for forming an audit opinion on the Group.

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 Pan-International Group in 2020 and therefore are 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.

~36~

PwC Taiwan

Man-Yu Ruan Lui

Certified Public Accountant

Min-Chuan Feng

Former Financial Supervisory Commission, Executive Yuan Approval No.: Jin-Guan-Cheng-Shen-ZiNo. 0990058257 Former Securities and Futures Bureau, Financial Supervisory Commission, Executive Yuan Approval No.: Jin-Guan-Cheng-VI-ZiNo. 0960038033

March 23, 2021

~37~

Pan-International Industrial Corp. and Subsidiaries Consolidated Balance Sheets December 31, 2020 and 2019

Assets	December31,2020 Note Amount % 6 (1) $ 7,544,242 36 6 (2) 54,250 - 6 (3) 41 - 6 (3) 2,564,231 12 7 2,759,169 13 7 118,590 1 6 (4) 1,967,196 10 8 159,825 1 15,167,544 73 6 (5) 2,367,713 12 6 (6) and 8 1,306 - 6 (7) 804,554 4 6 (8) and 8 1,670,684 8 6 (9) 288,179 1 6 (10) and 8 234,558 1 6 (11) 36,963 - 6 (25) 90,266 1 17,857 - 5,512,080 27 $ 20,679,624 100 (To be Continued)	Unit: NTD thousand December31,2019 Amount % $ 6,200,511 29 81,511 - 6,205 - 2,598,473 12 4,093,559 19 149,302 1 2,493,527 11 216,781 1 15,839,869 73 2,607,269 12 1,291 - 838,555 4 1,682,528 8 393,822 2 151,021 1 37,142 - 108,781 - 27,504 - 5,847,913 27 $ 21,687,782 100
		Amount $ 6,200,511 81,511 6,205 2,598,473 4,093,559 149,302 2,493,527 216,781 15,839,869 2,607,269 1,291 838,555 1,682,528 393,822 151,021 37,142 108,781 27,504 5,847,913 $ 21,687,782
Current assets 1100 Cash and cash equivalents 1110 Financial assets at FVTPL - Current 1150 Net notes receivable 1170 Net accounts receivable 1180 Accounts receivable - Related parties net 1200 Other receivables 130X Inventory 1470 Other current assets 11XX Total current assets Non-Current Assets 1517 Financial assets measured at fair value through other comprehensive income - Non-current 1535 Financial assets measured at after- amortization cost - Non-current 1550 Investment by equity method 1600 Property, plant, and equipment 1755 Right-of-use assets 1760 Net investment property 1780 Intangible asset 1840 Deferred tax assets 1900 Other non-current assets 15XX Total non-current assets 1XXX Total assets

~38~

Pan-International Industrial Corp. and Subsidiaries Consolidated Balance Sheets December 31, 2020 and 2019

LIABILITIES AND EQUITY	Unit: NTD thousand December 31,2020 December 31,2019 Note Amount % Amount % 6 (12) $ 1,568,333 8 $ 1,573,950 7 6 (20) 395,622 2 263,111 1 2,813,815 14 3,307,826 15 7 1,356,093 7 2,188,793 10 6 (13) 905,806 4 949,138 5 309,283 1 185,498 1 7 73,157 - 79,387 1 28,282 - 41,222 - 7,450,391 36 8,588,925 40 6 (25) 269,971 1 257,574 1 7 147,802 1 215,900 1 6 (14) 23,166 - 47,449 - 440,939 2 520,923 2 7,891,330 38 9,109,848 42 6 (15) 5,183,462 25 5,183,462 24 6 (16) 1,503,606 8 1,503,606 8 6 (17) 1,062,342 5 959,410 4 1,312,274 6 883,205 4 3,453,829 17 3,741,403 17 6 (18) ( 1,349,724) ( 7 ) ( 1,312,274) ( 6) 11,165,789 54 10,958,812 51 6 (19) 1,622,505 8 1,619,122 7 12,788,294 62 12,577,934 58 9 $ 20,679,624 100 $ 21,687,782 100
Current liability 2100 Short-term borrowings 2130 Contractual liabilities - Current 2170 Accounts payable 2180 Accounts payable - Related parties 2200 Other payables 2230 Current tax liabilities 2280 Lease liabilities - Current 2399 Other current liabilities - Other 21XX Total current liabilities Non-current liabilities 2570 Deferred tax liabilities 2580 Lease liabilities - Non-current 2600 Other non-current liabilities 25XX Total non-current liabilities 2XXX Total liabilities Equity attributable to owners of the parent company Share capital 3110 Common share capital Capital surplus 3200 Capital surplus Retained earnings 3310 Legal reserve 3320 Special reserve 3350 Unappropriated earnings Other equities 3400 Other equities 31XX Total equity attributable to owners of the parent company 36XX Non-controlling interests 3XXX Total equity Significant Contingent Liabilities and Unrecognized Commitments 3X2X Total liabilities and equity

LIABILITIES AND EQUITY

Unit: NTD thousand
December 31,2020
December 31,2019
Note
Amount
%
Amount
%
6 (12)
$ 1,568,333
8
$ 1,573,950
7
6 (20)
395,622
2
263,111
1
2,813,815
14
3,307,826
15
7
1,356,093
7
2,188,793
10
6 (13)
905,806
4
949,138
5
309,283
1
185,498
1
7
73,157
-
79,387
1
28,282
-
41,222
-
7,450,391
36
8,588,925
40
6 (25)
269,971
1
257,574
1
7
147,802
1
215,900
1
6 (14)
23,166
-
47,449
-
440,939
2
520,923
2
7,891,330
38
9,109,848
42
6 (15)
5,183,462
25
5,183,462
24
6 (16)
1,503,606
8
1,503,606
8
6 (17)
1,062,342
5
959,410
4
1,312,274
6
883,205
4
3,453,829
17
3,741,403
17
6 (18)
(
1,349,724) (
7 ) (
1,312,274) (
6)
11,165,789
54
10,958,812
51
6 (19)
1,622,505
8
1,619,122
7
12,788,294
62
12,577,934
58
9
$ 20,679,624
100
$ 21,687,782
100

Current liability
2100
Short-term borrowings
2130
Contractual liabilities - Current
2170
Accounts payable
2180
Accounts payable - Related parties
2200
Other payables
2230
Current tax liabilities
2280
Lease liabilities - Current
2399
Other current liabilities - Other
21XX
Total current liabilities
Non-current liabilities
2570
Deferred tax liabilities
2580
Lease liabilities - Non-current
2600
Other non-current liabilities
25XX
Total non-current liabilities
2XXX
Total liabilities
Equity attributable to owners of the
parent company
Share capital
3110
Common share capital
Capital surplus
3200
Capital surplus
Retained earnings
3310
Legal reserve
3320
Special reserve
3350
Unappropriated earnings
Other equities
3400
Other equities
31XX
Total equity attributable to
owners of the parent company
36XX
Non-controlling interests
3XXX
Total equity
Significant Contingent Liabilities and
Unrecognized Commitments
3X2X
Total liabilities and equity

The notes to the consolidated financial reports are attached as part of this consolidated financial report; please refer to them, too.

Chairman ： Sung-Fa Lu

Accounting supervisor ： Feng-An Huang

Manager ： Sung-Fa Lu

~39~

Pan-International Industrial Corp. and Subsidiaries Consolidated Statements of Comprehensive Income January 1 to December 31, 2020 and 2019

Unit: NTD thousand (except in NTD for earnings per share)

Item	2020 2019 Note Amount % Amount % 6 (20) and 7 $ 20,547,713 100 $ 25,600,708 100 6 (4) (23) And 7 ( 18,403,018) ( 89)( 23,241,509)( 91) 2,144,695 11 2,359,199 9 6 (23) ( 220,811 ) ( 1) ( 260,572 ) ( 1) ( 716,427 ) ( 4) ( 642,540 ) ( 2) ( 267,362 ) ( 1) ( 274,282 ) ( 1) 12 (2) ( 15,297) - 12,603 - ( 1,219,897) ( 6)( 1,164,791)( 4) 924,798 5 1,194,408 5 111,701 - 101,647 - 6 (21) 135,412 1 89,011 - 6 (22) 90,455 - 248,845 1 6 (24) ( 35,099 ) - ( 57,688 ) - 6 (7) ( 34,001) - ( 46,113) - 268,468 1 335,702 1 1,193,266 6 1,530,110 6 6 (25) ( 402,771) ( 2)( 376,973)( 1) $ 790,495 4 $ 1,153,137 5
4000 Operating revenue 5000 Operating cost 5900 Operating profit margin Operating expenses 6100 Selling and marketing expenses 6200 General and administrative expenses 6300 Research and development expenses 6450 Anticipated credit impairment (loss) benefit 6000 Total operating expenses 6900 Operating profit Non-operating income and expense 7100 Interest income 7010 Other income 7020 Other gains and losses 7050 Financial costs 7060 Share of profits and losses of affiliated companies and joint ventures recognized by the equity method 7000 Total non-operating income and expenses 7900 Net income before tax 7950 Income tax expense 8200 Net income for the period

Item

2020
2019
Note
Amount
%
Amount
%
6 (20) and 7
$ 20,547,713
100
$ 25,600,708
100
6 (4) (23)
And 7
(
18,403,018) (
89)(
23,241,509)(
91)
2,144,695
11
2,359,199
9
6 (23)
(
220,811 ) (
1) (
260,572 ) (
1)
(
716,427 ) (
4) (
642,540 ) (
2)
(
267,362 ) (
1) (
274,282 ) (
1)
12 (2)
(
15,297)
-
12,603
-
(
1,219,897) (
6)(
1,164,791)(
4)
924,798
5
1,194,408
5

111,701
-
101,647
-
6 (21)
135,412
1
89,011
-
6 (22)
90,455
-
248,845
1
6 (24)
(
35,099 )
- (
57,688 )
-
6 (7)
(
34,001)
- (
46,113)
-
268,468
1
335,702
1
1,193,266
6
1,530,110
6
6 (25)
(
402,771) (
2)(
376,973)(
1)
$ 790,495
4
$ 1,153,137
5

(To be Continued)

~40~

Pan-International Industrial Corp. and Subsidiaries Consolidated Statements of Comprehensive Income January 1 to December 31, 2020 and 2019

Unit: NTD thousand (except in NTD for earnings per share)

Item	2020 2019 Note Amount % Amount % 6 (14) $ 26,079 - ($ 4,475 ) - 6 (18) 142,489 1 ( 150,291 ) ( 1) 6 (25) ( 5,233) - 773 - 163,335 1 ( 153,993)( 1) 6 (18 (19) ( 161,568) ( 1)( 298,328)( 1) ( 161,568) ( 1)( 298,328)( 1) $ 1,767 - ($ 452,321)( 2) $ 792,262 4 $ 700,816 3 $ 663,190 3 $ 1,029,323 4 127,305 1 123,814 1 $ 790,495 4 $ 1,153,137 5 $ 725,323 4 $ 596,651 3 66,939 - 104,165 - $ 792,262 4 $ 700,816 3 6 (26) $ 1.28 $ 1.99 $ 1.27 $ 1.97
Items that will not be reclassified subsequently to profit or loss 8311 Remeasured value of defined benefit plan 8316 Unrealized evaluation profit and loss of equity instrument investment measured at fair value through other comprehensive income 8349 Income tax related to items not reclassified 8310 Total of items not reclassified to profit or loss Items that may be reclassified subsequently to profit or loss: 8361 Currency translation difference 8360 Total of items that may be reclassified subsequently to profit or loss: 8300 Other comprehensive income (net) 8500 Total comprehensive income in the current period NET PROFIT ATTRIBUTABLE TO: 8610 Owners of the parent company 8620 Non-controlling interests Total comprehensive income attributable to: 8710 Owners of the parent company 8720 Non-controlling interests Earnings per share (EPS) 9750 Basic earnings per share 9850 Diluted earnings per share

Item

2020
2019
Note
Amount
%
Amount
%
6 (14)
$ 26,079
- ($ 4,475 )
-
6 (18)
142,489
1
(
150,291 ) (
1)
6 (25)
(
5,233)
-
773
-
163,335
1
(
153,993)(
1)
6 (18 (19)
(
161,568) (
1)(
298,328)(
1)
(
161,568) (
1)(
298,328)(
1)
$ 1,767
- ($ 452,321)(
2)
$ 792,262
4
$ 700,816
3
$ 663,190
3
$ 1,029,323
4
127,305
1
123,814
1
$ 790,495
4
$ 1,153,137
5
$ 725,323
4
$ 596,651
3
66,939
-
104,165
-
$ 792,262
4
$ 700,816
3
6 (26)
$ 1.28
$ 1.99
$ 1.27
$ 1.97

Items that will not be reclassified
subsequently to profit or loss
8311
Remeasured value of defined
benefit plan
8316
Unrealized evaluation profit and
loss of equity instrument
investment measured at fair
value through other
comprehensive income
8349
Income tax related to items not
reclassified
8310
Total of items not reclassified
to profit or loss
Items that may be reclassified
subsequently to profit or loss:
8361
Currency translation difference
8360
Total of items that may be
reclassified subsequently to
profit or loss:
8300
Other comprehensive income
(net)
8500
Total comprehensive income in
the current period
NET PROFIT ATTRIBUTABLE
TO:
8610
Owners of the parent company
8620
Non-controlling interests
Total comprehensive income
attributable to:
8710
Owners of the parent company
8720
Non-controlling interests
Earnings per share (EPS)
9750
Basic earnings per share
9850
Diluted earnings per share

The attached notes to the consolidated financial reports are part of this consolidated financial report; please refer to them, too.

Chairman ： Sung-Fa Lu

Manager ： Sung-Fa Lu

Accounting supervisor ： Feng-An Huang

~41~

Pan-International Industrial Corp. and Subsidiaries Consolidated Statements of Changes Equity January 1 to December 31, 2020 and 2019

Unit: NTD thousand

Note						Equity attribu	bleto owners of th	e parentcompany					Non-controlling interests
	Common share capital	Capital		surplus			Retained earnings		Otherequities			Total
		Capital reserve - Issuance premium		Capital reserve - Treasury share transaction		Legal reserve	Special reserve	Unappropriated earnings	Currency translation difference	F F	Unrealized Gain (Loss) on inancial Assets at air Value through Other Comprehensive Income
6 (18) 6 (17) 6 (19) 6 (18) 6 (17) 6 (18) 6 (19)	$ 5,183,462 - - - - - - - $5,183,462 $5,183,462 - - - - - - - - $ 5,183,462		$ 1,402,318 - - - - - - - $1,402,318 $1,402,318 - - - - - - - - $ 1,402,318		$ 101,288 - - - - - - - $ 101,288 $ 101,288 - - - - - - - - $ 101,288	$ 840,872 - - - 118,538 - - - $ 959,410 $ 959,410 - - - 102,932 - - - - $ 1,062,342	$ 496,898 - - - - 386,307 - - $ 883,205 $ 883,205 - - - - 429,069 - - - $ 1,312,274	$ 3,790,709 1,029,323 ( 3,603 ) 1,025,720 ( 118,538 ) ( 386,307 ) ( 570,181 ) - $ 3,741,403 $ 3,741,403 663,190 20,860 684,050 ( 102,932 ) ( 429,069 ) ( 518,346 ) 78,723 - $ 3,453,829	($ 783,138 ) - ( 278,778 ) ( 278,778 ) - - - - ($ 1,061,916 ) ($ 1,061,916 ) - ( 101,216 ) ( 101,216 ) - - - - - ($ 1,163,132 )		($ 100,067 ) - ( 150,291 ) ( 150,291 ) - - - - ($ 250,358 ) ($ 250,358 ) - 142,489 142,489 - - - ( 78,723 ) - ($ 186,592 )	$ 10,932,342 1,029,323 ( 432,672 ) 596,651 - - ( 570,181 ) - $10,958,812 $10,958,812 663,190 62,133 725,323 - - ( 518,346 ) - - $ 11,165,789	$ 1,580,757 123,814 ( 19,649 ) 104,165 - - - ( 65,800 ) $1,619,122 $1,619,122 127,305 ( 60,366 ) 66,939 - - - - ( 63,556 ) $ 1,622,505	$ 12,513,099 1,153,137 ( 452,321 ) 700,816 - - ( 570,181 ) ( 65,800 ) $12,577,934 $12,577,934 790,495 1,767 792,262 - - ( 518,346 ) - ( 63,556 ) $ 12,788,294

The attached notes to the consolidated financial reports are part of this consolidated financial report ； please refer to them, too.

Chairman: Sung-Fa Lu Manager: Sung-Fa Lu Accounting supervisor: Feng-An Huang

~42~

Pan-International Industrial Corp. and Subsidiaries Consolidated Statements of Cash Flows January 1 to December 31, 2020 and 2019

Unit: NTD thousand

CASH FLOWS FROM OPERATING ACTIVITIES
Income before income tax
Adjustments
income and expenses items
Depreciation expenses and amortizations
Provision for anticipated credit impairment loss (reversal
gain)
Net benefits of financial assets and liabilities measured at
fair value through the income
Interest expense
Interest income
Dividend income
Income from rental reduction
Share of profits and losses of affiliated companies
recognized by the equity method
Unrealized foreign exchange gain
Net loss from the disposal of property, plant and
equipment
Net profit from the disposal of non-current assets pending
for sale
Changes in assets/liabilities related to business activities
Net change in assets related to business activities
Financial assets and liabilities measured at fair value
through the income
Net notes receivable
Net accounts receivable
Accounts receivable - Related parties net
Other receivables
Inventory
Other current assets
Net change in liabilities related to business activities
Accounts payable
Accounts payable - Related parties
Other payables
Other current liabilities
Contractual liabilities
Other non-current liabilities
Cash inflow from operations
Income tax paid
Net cash inflow from business activities
Cash flows from investing activities
Proceeds from disposal of financial assets measured at fair
value through other comprehensive income
Return of capital investment in financial assets measured at fair
value through other comprehensive income
Acquisition of financial assets measured at after-amortization
cost
Disposal of financial assets measured at after-amortization cost
Proceeds from disposal of non-current assets pending for sale
Purchase property, plant and equipment assets
Proceeds from disposal of property, plant and equipment
Increase in refundable deposits
Decrease in refundable deposits
Increase in other non-current assets
Interest received
Dividend received
Net cash inflow from investment
Cash flows from financing activities
Increase (decrease) in short-term borrowings
Lease principal repayment
Cash dividend payment
Interest paid
Number of cash dividends paid to non-controlling interests
Net cash outflow from financing activities
Impact of changes in the exchange rate on cash and cash
equivalents
Increase in cash and cash equivalents in the current period
Cash and cash equivalents at the beginning of the period
Cash and cash equivalents at the end of the period

Note
January 1 to December
31,2020
January 1 to December
31,2019
$ 1,193,266 $ 1,530,110
6 (23)
398,648
424,400
12 (2)
15,297 (
12,603 )
6 (22)
(
48,804 ) (
19,013 )
6 (24)
35,099
57,688
(
111,701 ) (
101,647 )
6 (21)
(
1,547 ) (
7,442 )
(
4,308 )
-
6 (7)
34,001
46,113
(
73,935 ) (
37,140 )
6 (22)
9,986
24,726
6 (22)
- (
145,112 )
73,172
6,060
6,163 (
6,021 )
(
28,825 )
196,354
1,345,988
1,666,794
(
19,447 )
41,175
504,125
221,616
39,449 (
56,505 )
(
491,909 ) (
896,362 )
(
837,050 ) (
62,802 )
(
132,455 )
58,680
(
13,969 )
28,449
132,511 (
136,501 )
(
24,365)
6,664
1,999,390
2,827,681
(
266,843) (
363,056)
1,732,547
2,464,625
285,612
-
10,271
-
- (
2,738,012 )

-
3,442,005
-
246,191
6 (27)
(
339,936 ) (
321,598 )
41,610
52,231
(
691 )
-
616
268
(
6,711 ) (
2,554 )
111,965
101,684
1,547
7,442
104,283
787,657
6 (28)
67,382 (
548,162 )
(
65,934 ) (
66,904 )
6 (17)
(
518,346 ) (
570,181 )
(
34,549 ) (
56,034 )
6 (19)
(
63,556) (
65,800)
(
615,003) (
1,307,081)
121,904(
188,058)
1,343,731
1,757,143
6,200,511
4,443,368
$ 7,544,242 $ 6,200,511

The attached notes to the consolidated financial reports are part of this consolidated financial report ； please refer to them, too.

Chairman: Sung-Fa Lu

Accounting supervisor: Feng-An Huang

Manager: Sung-Fa Lu

~43~

Pan-International Industrial Corp.

Earnings Distribution Table

2020

Unit: In New Taiwan Dollars Item Amount Unappropriated retained earnings at 2,691,057,868 beginning of the term Plus: Remeasurements of the defined benefit 20,859,915 plan recognized in retained earnings Plus: Gain on disposal of equity instrument measured at fair value through other comprehensive income transferred to retained earnings 78,723,050 Plus: Net income after tax 663,189,780 Less: Legal reserve (76,277,275) Less: Special reserve (37,450,559) Earnings available for distribution 3,340,102,779 Item for distribution: Shareholders’ cash dividends (Note) NT$0.65 per share (336,925,083) Ending undistributed earnings 3,003,177,696

Note 1: The earnings of 2020 is to be distributed in priority for this year.

Note 2: According to the provisions Article 21 of the Articles of Incorporation, for the issuance of cash dividends and bonuses resolved by the board of directors, the board of directors is authorized to establish the distribution plan and to report to the shareholders’ meeting.

Chairman of the Board: Sung-Fa Lu

Managerial Officer: Sung-Fa Lu

Accounting Manager: Feng-An Huang

~44~

Pan-International Industrial Corp. Comparison Table for Amendments of “Procedures for Derivatives Transactions”

Provision After Amendment	Current Provision	Explanation
Article 5 Operation Procedure I. Authorized Amount, Management Level and Executing Unit: (I) Chairman: The authorized amount is equivalent to an amountexceedingUS$50 million. (II) President: The authorized amount is equivalent to an amountexceedingUS$30~~10 ~~ million butless than U$50 million (inclusive). (III)Financial supervisor: The authorized amount is equivalent to an amount less than US$30million. (IV)Executing Unit: Financial Department. The aforementioned authorized amounts refer to the total amount of each contract of derivative transaction. The Chairman is authorized to make adjustments according to the changes of the environment; however, the result after adjustment shall be reported to the Board of Directors for review. II ~ IV Omitted	Article 5 Operation Procedure I. Authorized Amount, Management Level and Executing Unit: (I) Chairman: The authorized amount is equivalent to an amount above US$15 million (inclusive). (II) President: The authorized amount is equivalent to an amount above US$10 million (inclusive) but less than US$15 million. (III) Senior supervisor designated by the Board of Directors: The authorized amount is equivalent to an amount above US$5 million (inclusive) but less than US$10 million. (IV) Financial supervisor: The authorized amount is equivalent to an amount less than US$5 million (inclusive). (V) Executing Unit: Financial Department. The aforementioned authorized amounts refer to the total amount of each contract of derivative transaction. The Chairman is authorized to make adjustments according to the changes of the environment; however, the result after adjustment shall be reported to the Board of Directors for review. II ~ IV Omitted	The authorized amount for each management level is adjusted in order to satisfy the actual needs

~45~

Pan-International Industrial Corp. Rules of Procedure for Shareholder Meetings

I. The rules of procedures for the Company's shareholders’ meetings, except as otherwise provided by laws and regulations, shall be as provided in these Rules.
II. The Company shall furnish the attending shareholders with an attendance book to sign, or attending shareholders may hand in a sign-in card in lieu of signing in. The number of shares in attendance shall be calculated according to the shares indicated by the attendance book and sign-in cards handed in.
III. The attendance and voting at a shareholders’ meeting shall be calculated based the number of shares.
IV. The venue for a shareholders’ meeting shall be the premises of the Company, or a place easily accessible to shareholders and suitable for a shareholders’ meeting. The meeting may begin no earlier than 9 a.m. and no later than 3 p.m.
V. If a shareholders’ meeting is convened by the Board of Directors, the meeting shall be chaired by the Chairman of the Board. When the Chairman of the Board is on leave or for any reason unable to exercise his/her power and authority the Vice Chairman to act as a proxy thereof; if there is no Vice Chairman or the Vice Chairman also is on leave or for any reason unable to exercise his/her power and authority, the Chairman shall appoint one of the Managing Directors to act as chair, or, if there are no Managing Directors, one of the Directors shall be appointed to act as chair. Where the Chairman does not make such a designation, the Managing Directors or the Directors shall select from among themselves one Director as a proxy thereof. Where a shareholders’ meeting is convened by a party with power to convene but other than the board of directors, the convening party shall chair the meeting.
VI. The Company may appoint its attorneys, certified public accountants, or related persons retained by it to attend a shareholders’ meeting in a non-voting capacity. The staff serving on the shareholders’ meeting shall wear identity certificates or arm-bands.

~46~

VII. The Company shall record on audio or video tape the entire proceedings of a shareholders’ meeting and preserve the recordings for at least one year.
VIII.The chair shall call the meeting to order at the appointed meeting time. However, when the attending shareholders do not represent a majority of the total number of issued shares, the chair may announce a postponement, provided that no more than two such postponements, for a combined total of no more than 1 hour, may be made. If attending shareholders represent more than one-third but less than half of outstanding shares after two postponements, the attending shareholders may reach a tentative resolution according to Paragraph 1, Article 175 of the Company Act. When, prior to conclusion of the meeting, the attending shareholders represent a majority of the total number of issued shares, the chair may resubmit the tentative resolution for a vote by the shareholders’ meeting pursuant to Article 174 of the Company Act.
IX. If a shareholders’ meeting is convened by the board of directors, the meeting agenda shall be set by the board of directors. The meeting shall proceed in the order set by the agenda, which may not be changed without a resolution of the shareholders’ meeting. The provisions of the preceding paragraph apply mutatis mutandis to a shareholders’ meeting convened by a party with the power to convene that is not the Board of Directors. The chair may not declare the meeting adjourned prior to completion of deliberation on the meeting agenda of the preceding two paragraphs (including extraordinary motions), except by a resolution of the shareholders’ meeting. After the chair declares the meeting adjourned, shareholders shall not further elect a chair to continue the meeting at the original site or at another place.
X. Before speaking, a shareholder must specify on a speaker's slip the subject of the speech, his/her shareholder account number (or attendance card number), and account name. The order in which shareholders speak will be set by the chair. A shareholder in attendance that does not actually speak in the meeting shall be deemed to have not spoken. When the content of the speech does not correspond to the subject given on the speaker's slip, the spoken content shall prevail. When an attending shareholder is speaking, other shareholders may not speak or interrupt unless they have sought and obtained the consent of the chair and the shareholder that has the floor; the chair shall stop any violation.

~47~

XI. Except with the consent of the chair, a shareholder may not speak more than twice on the same proposal, and a single speech may not exceed five minutes. If the shareholder's speech violates the rules or exceeds the scope of the agenda item, the chair may terminate the speech.
XII. When a juristic person is appointed to attend a shareholders’ meeting as proxy, it shall designate only one person to represent it in the meeting. When a juristic person shareholder appoints two or more representatives to attend a shareholders’ meeting, only one of the representatives so appointed may speak on the same proposal.
XIII. After an attending shareholder has spoken, the chair may respond in person or direct relevant personnel to respond.
XIV. When the chair at a shareholders’ meeting is of the opinion that a proposal has been discussed sufficiently to put it to a vote, the chair may announce the discussion closed and call a vote.
XV. Vote monitoring and counting personnel for the voting on a proposal shall be appointed by the chair, provided that all monitoring personnel shall be shareholders of the Company. Voting results shall be made known on-site immediately and recorded in writing.
XVI. When a meeting is in progress, the chair may announce a break based on time considerations.
XVII. Except as otherwise provided in the Company Act and the Articles of Incorporation, the passage of a proposal shall require an affirmative vote of a majority of the voting rights represented by the attending shareholders. When a proposal comes to a vote, if no shareholder voices an objection following an inquiry by the chair, the proposal will be deemed to be approved, and it shall have the same effect as that reached through voting.

XVIII. When there is an amendment or an alternative to a proposal, the chair shall present the amended or alternative proposal together with the original proposal and decide the order in which they will be put to a vote. When anyone among them is passed, the other proposals will then be deemed rejected, and no further voting shall be required.

~48~

XIX. The chair may direct the proctors (or security personnel) to help maintain order at the meeting place. When proctors (or security personnel) assist to maintain order at the meeting place, they shall wear an armband bearing the word "Proctor."

~49~

Pan-International Industrial Corp. Articles of Incorporation

Chapter 1 General Rules

Article 1: The Company shall be incorporated under the Company Act, and its name shall be Pan-International Industrial Corp.
Article 2: The scope of business of the Company shall be as follows:
CC01080 Electronics Components Manufacturing.
CC01110 Computer and Peripheral Equipment Manufacturing.
CC01060 Wired Communication Mechanical Equipment Manufacturing.
CC01020 Electric Wires and Cables Manufacturing.
CQ01010 Mold and Die Manufacturing.
F106010 Wholesale of Hardware.
F107990 Wholesale of Other Chemical Products.
CB01010 Mechanical Equipment Manufacturing.
CC01990 Other Electrical Engineering and Electronic Machinery Equipment Manufacturing.
F401010 International Trade.
CC01070 Wireless Communication Mechanical Equipment Manufacturing.
CC01100 Controlled Telecommunications Radio-Frequency Devices and Materials Manufacturing.
F108031 Wholesale of Medical Devices.
F208031 Retail Sale of Medical Apparatus.
ZZ99999 All business items that are not prohibited or restricted by law, except those that are subject to special approval.
Article 2-1: The re-investment total amount of the Company is not limited by the 40% of the paid-in capital.
Article 3: The Company shall have its head office in New Taipei City, R.O.C., and when it is determined to be necessary, upon the resolution of the Board of Directors, branch offices or subsidiaries may be established domestically or overseas.
Article 4: The Company may provide guarantees to related enterprises.
Article 5: The public announcement method of the Company shall be handled according to Article 28 of the Company Act.

Chapter 2 Shares

Article 6: The total capital of the Company shall be NTD 6,000,000,000, divided into 600,000,000 shares, at a par value of NTD 10, and the Board of Directors is authorized to perform share issuance at discrete times. Among which 30,000,000 shares are reserved as the share subscription warrants or the share subscription warrants associated with the corporate bonds to be issued.
The subjects for the issuance of employee stock option, subjects for issuance of restricted share awards and subjects for shares reserved from new shares issuance of cash capital increase for employee subscription may include employees of affiliated companies that satisfy certain criteria, and the Board of Directors is authored to determine the criteria, issuance method and subscription method thereof.
Article 7: The share certificates of the Company shall be in registered form and signed or sealed by the Director representing the Company and shall be certified for issuance of the share certificates according to the laws. The Company may be exempted from the printing of share certificates in accordance with the provision of Article 162-2 of the Company Act; however, the shares shall be registered with the Centralized Securities Depository Enterprises.

~50~

Article 8: The administration of the shareholder services of the Company, unless otherwise specified in the laws and regulations, shall be handled according to the Regulations Governing the Administration of Shareholder Services of Public Companies published by the Securities and Futures Bureau, Financial Supervisory Commission.
Article 9: Any change and transfer registration of shares shall be prohibited within sixty days prior to the ordinary shareholders’ meeting, thirty days prior to the extraordinary shareholders’ meeting, or five days prior to the record date for the distribution of dividends and bonuses or other benefits by the Company.

Chapter 3 Shareholders’ Meeting

Article 10: The shareholder meetings are classified into two types: the ordinary shareholders’ meeting and the extraordinary shareholders’ meeting. The ordinary shareholders’ meeting shall be convened once per year, and shall be convened by the Board of Directors according to the laws within six months after the close of each fiscal year. The extraordinary shareholders’ meeting shall be convened whenever necessary according to laws.
Shareholder meetings shall be convened by the Board of Directors, and the Chairman of the Board shall be the chair of the meeting. In case where the Chairman is absent due to reasons, it shall be handled in accordance with the provision prescribed in Article 208 of the Company Act. For a shareholders’ meeting convened by any person having the convening right other than the Board of Directors, the person having the convening right shall be the chair, and if there are two or more persons having the convening right, the chair of the meeting shall be elected from among themselves.
Article 11: Where a shareholder for any reasons cannot attend a shareholders’ meeting in person, he shareholder may appoint a proxy to attend the shareholders' meeting on his/her/its behalf by executing a power of attorney, stating therein the scope of power authorized to the proxy. The use of proxies shall comply with the regulations of the Company Act and shall also be handled in accordance with the Regulations Governing the Use of Proxies for Attendance at Shareholder Meetings of Public Companies announced by the competent authority.
Article 12: Unless otherwise specified in relevant laws and regulations, each shareholder shall have one voting right for each share held,
Article 13: Any resolution at a shareholders’ meeting, unless otherwise specified in the Company Act, shall be adopted by a majority of the shareholders presented, who representing more than half of the total number of the company’s outstanding shares, and shall be executed based on the majority of the voting rights of attending shareholders. Matters related to the resolutions of a meeting shall be recorded in meeting minutes. The meeting minutes shall be signed or sealed by the chairperson of the meeting and shall be distributed to each shareholder within twenty days after the close of the meeting. The distribution of the meeting minutes may be effected by means of a public notice.

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Chapter 4 Board of Directors and Audit Committee

Article 14: The Company shall have seven to nine Directors, among which the number of Independent Directors shall not be less than three and shall not be less than one fifth of the total number of Directors, and the term of office shall be three years. For the election of Directors, the candidates nomination system shall be adopted in accordance with the provision of Article 192-1 of the Company Act, and Directors are elected by the shareholders’ meeting from the candidate roster, and Directors may be eligible for re-election.
Relevant matters of the professional qualification, shareholding, concurrent job position limitation and other necessary requirements shall comply with relevant regulations specified by the securities competent authority.
The Company establishes the Audit Committee in replacement of the
Supervisors according to Article 14-4 of the Securities and Exchange Act. The Audit Committee shall be formed by all of the Independent Directors, and its number of members shall not be less than three, wherein one of the members shall be the convener. The exercise of functional duties of the Audit Committee and other required compliance matters shall be handled in accordance with relevant laws and regulations.
The total number of shares held by all of the Directors shall not be less than a certain percentage of the total number of issued shares, and such percentage shall comply with the requirements specified by the competent authority.
Article 15: Directors shall form the Board of Directors. With the attendance of more than two thirds of the Directors and the consents of a majority of the attending Directors, a Chairman shall be elected among the Directors. The Chairman shall represent the Company externally.
Article 16: In case the Chairman is on leave or absent or cannot exercise his/her power and authority for any cause, the proxy thereof shall be handled in accordance with the provision of Article 208 of the Company Act.
Article 17: The Board of Directors’ meeting shall be held once quarterly, and when it is determined necessary, the meeting may be convened at any time. In case where a Director cannot attend the meeting due to reasons, the proxy thereof shall be handled in accordance with the provision of Article 205 of the Company Act. However, if a meeting is held via the video conference method, Directors attending the meeting through video conference shall be deemed to attend the meeting in person.

The convention of the Board of Directors’ meeting shall be handled in accordance with the provision of Article 204 of the Company Act; however, in case of emergency, it may be convened at any time without written notice. The notice for the convention of Board of Directors’ meeting of the Company may be made in writing, e-mail or facsimile method to inform all Directors.

Article 18: Transportation allowance of all Directors shall be determined by the Board of Directors, and regardless whether the Company is operating at a profit or loss, it shall be paid according to the common standard adopted in the same industry. During the term of office of all Directors, the Company shall purchase liability insurances for the Directors for their indemnification liabilities within the scope of their official services according to the laws, and shall report the insurance content to the Board of Directors.

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Chapter 5 Managerial Officers

Article 19: The Company may have managerial officers, and the appointment, discharge and the remuneration of the managerial officers shall be handled according to Article 29 of the Company Act.

Chapter 6 Accounting

Article 20: At the end of each fiscal year of the Company, the Board of Directors shall prepare the reports and statements of (I) Business report, (II) Financial statement and (III) Proposal for distribution of earnings or covering losses, for submission to the ordinary shareholder’s meeting according to the law in order to request for ratification thereof.
Article 21: Where the Company has a profit after settlement (the term “profit” refers to the income before deducting the distribution of remunerations of employees and directors from the income before tax), no less than 5% thereof shall be appropriated as the remuneration of employees and no less than 0.5% thereof shall be appropriated as the remuneration of Directors, which are to be distributed after the special resolution of the Board of Directors’ meeting and shall be reported to the shareholders’ meeting. However, where the Company still has accumulated losses, amount shall be reserved for making up the accumulated loss first. The remuneration of employees described in the preceding paragraph may be made in the form of shares or cash, and the subjects for receiving the shares or cash may include employees of the affiliated companies meeting certain specific requirements, and the Board of Directors is authorized to establish said specific requirements.

Where there is a profit after the settlement of a fiscal year, the profit shall be distributed in accordance with the following sequence:

(I) Compensate for previous losses
(II) Appropriate 10% as the legal reserve
(III) Appropriate or reverse special reserve according to other laws and regulations
(IV) When the remaining amount refers to the distributable earnings of the current year, it is combined with the undistributed earnings of the same period at the beginning of the term as the accumulated distributable earnings, and the Board of Directors shall establish the proposal for earnings distribution according to the dividend policy specified in Paragraph 4 of this Article for submission to the shareholders’ meeting for resolution and distribution accordingly.
The Company is currently at the growth stage. Regarding the Company’s policy on the distribution of dividends, such policy shall be determined based on the factors of the present and future investment environment, capital demand, domestic/overseas competition and capital budget etc. along with the consideration of the shareholders’ interests and the long-term financial planning. The shareholders’ dividends are appropriated from the accumulated distributable earnings, which shall not be less than 15% of the distributable earnings of the current year, and the cash dividends among the shareholders’ dividends shall not be less than 10%. Regarding the cash dividends and bonuses issued for all or a portion of the aforementioned cash dividends and capital reserve and legal reserve, the Board of Directors is authorized to reach a special resolution for distribution thereof, which shall also be reported to the shareholders’ meeting, and the requirement for resolution of a shareholders’ meeting as described in the preceding paragraph is not applicable.

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Chapter 7 Supplemental Provisions

Article 22: Any matters not specified in this Article of Incorporation shall be handled in accordance with the provisions of the Company Act.

Article 23: These Articles of Incorporation were enacted on April 5, 1971.

The first amendment was made on April 22, 1971. The second amendment was made on May 6, 1971.

The third amendment was made on July 25, 1974.

The fourth amendment was made on January 10, 1978. The fifth amendment was made on May 1, 1978.

The sixth amendment was made on August 19 1980.

The seventh amendment was made on October 30, 1980. The eighth amendment was made on December 14, 1980.

The ninth amendment was made on January 10, 1981. The tenth amendment was made on April 7, 1981.

The eleventh amendment was made on June 28, 1982. The twelfth amendment was made on July 19, 1982.

The thirteenth amendment was made on June 30, 1983. The fourteenth amendment was made on January 12, 1984.

The fifteenth amendment was made on August 31, 1984.

The sixteenth amendment was made on February 18, 1986.

The seventeenth amendment was made on March 10, 1986. The eighteenth amendment was made on January 24, 1989.

The nineteenth amendment was made on September 29, 1989 The twentieth amendment was made on November 25, 1989. The twenty first amendment was made on January 20, 1990. The twenty second amendment was made on June 29, 1990. The twenty third amendment was made on October 15, 1990.

The twenty fourth amendment was made on June 7, 1991.

The twenty fifth amendment was made on April 10, 1992.

The twenty sixth amendment was made on December 12, 1992.

The twenty seventh amendment was made on May 18, 1994.

The twenty eighth amendment was made on November 8, 1995. The twenty ninth amendment was made on May 11, 1996.

The thirtieth amendment was made on June 26 1997.

The thirty first amendment was made on June 2, 1998.

The thirty second amendment was made on April 12, 1999.

The thirty third amendment was made on November 30, 1999. The thirty fourth amendment was made on June 27, 2000. The thirty fifth amendment was made on June 10, 2002. The thirty sixth amendment was made on June 14, 2005. The thirty seventh amendment was made on June 14, 2006.

The thirty eighth amendment was made on June 8, 2007.

The thirty ninth amendment was made on June 10, 2009.

The fortieth amendment was made on June 8, 2010.

The forty first amendment was made on June 5, 2012. The forty second amendment was made on June 17, 2014.

The forty third amendment was made on June 13, 2016.

The forty fourth amendment was made on Jun 8, 2018.

The forty fifth amendment was made on June 14, 2019.

Pan-International Industrial Corp. Chairman of the Board: Sung-Fa Lu

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I. The shares by all of the Directors of the Company recorded in the shareholders’ roster as of the register closure date (April 13, 2021) for 2021 Annual General Shareholders’ Meeting are as shown in the table below.
II. The Company has issued a total number of 518,346,282 shares, and pursuant to the provision of Article 2 of "Rules and Review Procedures for Director and Supervisor Share Ownership Ratios at Public Companies", the minimum shareholdings of all Directors shall be 16,587,081 shares.

Pan-International Industrial Corp. Director Individual Shareholding and Total Shareholdings Table

Title	Name	Shareholdings recorded in the shareholders’ roster as of the register closure date (April 13, 2021)	Shareholding Percentage	Remarks
Chairman	Sung-Fa Lu	2,035,616 shares	0.39%
Director	Feng-An Huang	35,000 shares	0.01%
Director	Ming-Feng Tsai	280,227 shares	0.05%
Director	Hong Yuan International Investment Co., Ltd., Representative: Tsai-Yu Hsiao	17,941,593 shares	3.46%
Independent Director	Min-Chang Wei	0 shares	0.00%
Independent Director	Mien-Ching Huang	0 shares	0.00%
Independent Director	Wen-Jung Cheng	0 shares	0.00%
Total	All Directors	20,292,436 shares	3.91%	Reached the statutory percentage

Impact of the distribution of bonus shares proposed in the present shareholders’ meeting on the business performance of the Company and earning per share:

There is no distribution of bonus shares in the current year; therefore, this is not

applicable..

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AI assistant

PI — AGM Information 2021

52009_rns_2021-07-26_e3660395-7c61-48b2-acd7-5f7f4703b799.pdf

Stock Code: 2328

Pan-International Industrial Corp.

Table of Contents

Pan-International Industrial Corp. 2021 Annual General Meeting Procedure

Pan-International Industrial Corp. 2021 Annual General Meeting Meeting Agenda

I. Chairman’s Remarks:

II. Report Items:

III. Ratification Items:

IV. Discussion Items:

V.Extraordinary Motions.

VI. Meeting Adjourned.

Report Items

Ratification Items

Discussion Items

Extraordinary Motions

Meeting Adjourned

2020 Business Report

II. 2021 Business Outlook:

Audit Committee’s Review Report

Audit Opinions

Basis of our opinions

Key Audit Matters

Assessment of the provision for loss in valuation of inventory

Description:

The appropriate audit procedure

The appropriateness of the manual journal entries

Description:

Other matters - Audits conducted by other auditors

Responsibilities of Management and Those Charged with Governance for the Separate Financial Statements.

Auditor’s Responsibilities for the Audit of the Separate Financial Statements

Pan-International Industrial Corp. Separate Balance Sheet December 31, 2020 and 2019

Pan-International Industrial Corp. Separate Balance Sheet December 31, 2020 and 2019

Pan-International Industrial Corp. Separate Comprehensive Income Statement January 1 to December 31, 2020 and 2019

Pan-International Industrial Corp. Separate Comprehensive Income Statement January 1 to December 31, 2020 and 2019

Pan-International Industrial Corp. Separate Statement of Changes in Shareholders Equity January 1 to December 31, 2020 and 2019

Pan-International Industrial Corp. Separate Statement of Cash Flows January 1 to December 31, 2020 and 2019

Pan-International Industrial Corp. Separate Statement of Cash Flows January 1 to December 31, 2020 and 2019

To Pan-International Industrial Corp.

Audit Opinions

Basis of our opinions

Key Audit Matters

Assessment of the provision for loss in valuation of inventory

Description:

The appropriate audit procedure

The appropriateness of manual daily journal entries

Description:

The appropriate audit procedure

Additional information - audits conducted by other auditors

Additional information - Issuance of Auditors’ Report on Separate Financial Statements

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements.

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements

Pan-International Industrial Corp. and Subsidiaries Consolidated Balance Sheets December 31, 2020 and 2019

Pan-International Industrial Corp. and Subsidiaries Consolidated Balance Sheets December 31, 2020 and 2019

Pan-International Industrial Corp. and Subsidiaries Consolidated Statements of Comprehensive Income January 1 to December 31, 2020 and 2019

Pan-International Industrial Corp. and Subsidiaries Consolidated Statements of Comprehensive Income January 1 to December 31, 2020 and 2019

Pan-International Industrial Corp. and Subsidiaries Consolidated Statements of Changes Equity January 1 to December 31, 2020 and 2019

Pan-International Industrial Corp. and Subsidiaries Consolidated Statements of Cash Flows January 1 to December 31, 2020 and 2019

Pan-International Industrial Corp.

Earnings Distribution Table

2020

Pan-International Industrial Corp. Comparison Table for Amendments of “Procedures for Derivatives Transactions”

Pan-International Industrial Corp. Rules of Procedure for Shareholder Meetings

Pan-International Industrial Corp. Articles of Incorporation

Chapter 1 General Rules

Chapter 2 Shares

Chapter 3 Shareholders’ Meeting

Chapter 4 Board of Directors and Audit Committee

Chapter 5 Managerial Officers

Chapter 6 Accounting

Chapter 7 Supplemental Provisions

Pan-International Industrial Corp. Director Individual Shareholding and Total Shareholdings Table

Impact of the distribution of bonus shares proposed in the present shareholders’ meeting on the business performance of the Company and earning per share:

More from PI

PI AGM Information 2021