PI — Interim / Quarterly Report 2020

Dec 10, 2020

PAN-INTERNATIONAL INDUSTRIAL CORP. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND REVIEW REPORT OF INDEPENDENT

ACCOUNTANTS

JUNE 30, 2020 AND 2019 (STOCK CODE 2328)

Address: No. 97 Anxing Rd., Xindian, New Taipei City Tel: (02)2211-3066

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

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PAN-INTERNATIONAL INDUSTRIAL CORP. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND REVIEW REPORT OF

INDEPENDENT ACCOUNTANTS

JUNE 30, 2020 AND 2019

Table of Contents

Item I. Cover II. Table of Contents III. Independent Auditors’ Review Report IV. Consolidated Balance Sheets V. Consolidated Statements of Comprehensive Income VI. Consolidated Statements of Changes Equity VII. Consolidated Statements of Cash Flows VIII. Notes to consolidated financial statements (I) Organization and operations (II) The Authorization of Financial Reports (III) Application of Newly Released and Revised Standards and Interpretations (IV) Summary of Significant Accounting Policies (V) Major Sources of Uncertainty in Significant Accounting Judgments, Estimates, and Assumptions

Page

1 2 ~ 3 4 ~ 7 8 9 ~ 10 11 12 13 ~ 62 13 13 13 ~ 14 14 ~ 27 27 ~ 28

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Item (VI) Summary of Significant Accounting Items (VII) Related Party Transactions (VIII) Pledged Assets (IX) Significant Contingent Liabilities and Unrecognized Commitments (X) Major Disaster Losses (XI) Significant Subsequent Events (XII) Others (XIII) Additional Disclosures (XIV) Operation Department Information	Page
	29 ~ 45 45 ~ 47 48 48 48 48 48 ~ 60 60 ~ 61 61 ~ 62

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Independent Auditors’ Review Report

(2020) Tsai-Shen-Bao No. 20001347

To Pan-International Indsutrial Corp.

Foreword

The consolidated balance sheet of Pan-International Indsutrial Corp. and its subsidiaries as of June 30, 2020 and 2019 the consolidated comprehensive income statement, the consolidated comprehensive income statement for 2020 and 2019 from April 1 to June 30 and January 1 to June 30, the consolidated statement of changes in equity and consolidated cash flow statement for 2020 and 2019 from January 1 to June 30, as well as the notes to the consolidated financial statements (including the summary of significant accounting policies) have been duly verified by us. It is the responsibility of the management to prepare properly expressed consolidated financial reports in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and IAS 34 “Interim Financial Reporting” recognized and released by the Financial Supervisory Commission, and our responsibility is to conclude the consolidated financial reports based on the review results.

Scope

Except for retaining the statement in the basis paragraph of the qualified opinion, we conducted the review in accordance with the "Review of Financial Statements" of the Auditing Standards Bulletin No. 65. The procedures to be carried out in reviewing the consolidated financial statements include inquiry (mainly with the person in charge of financial and accounting affairs), analytical procedures, and other review procedures. A review is substantially less in scope than an audit and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Basis for Qualified Conclusion

As stated in notes 4(3) and 6(7) to the consolidated financial statements, the financial statements of the same period of some non-significant subsidiaries are included in the consolidated financial statements mentioned above and investments by equity method have not been verified by us. Their total assets as of June 30, 2020 and 2019 were NT$2,723,140 thousand and NT$2,718,530 thousand respectively, accounting for 13% and 13% of the total consolidated assets (including investment by equity method), and the total liabilities were NT$1,412,808 thousand and NT$1,474,616 thousand respectively, accounting for 16% and

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17% of the total consolidated liabilities; their comprehensive profit and loss of 2020 and 2019 from April 1 to June 30, and of 2020 and 2019 from January 1 to June 30 were NT$75,955 thousand and NT$6,345 thousand, and NT$23,960 thousand and NT$20,037 thousand, accounting for 31%, 9%, (9%), and 7% of the consolidated comprehensive income respectively.

Conclusion

According to our review results and the review report by other accountants (please refer to the Others items), except that the financial reports of the non-significant subsidiaries and investments by equity method mentioned in the basis paragraph of the qualified opinion, if audited by us, may lead to adjustments to the consolidated financial reports, it is not found that the consolidated financial reports above have not been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the “Interim Financial Reporting” of IAS 34 recognized and released by the Financial Supervisory Commission which may lead to the inability to properly express the consolidated financial status of Pan-International Indsutrial Corp. and its subsidiaries as of June 30, 2020 and 2019, and the consolidated financial performance from April 1 to June 30, 2020 and 2019 and from January 1 to June 30, 2020 and 2019, and the consolidated financial performance and consolidated cash flow from January 1 to June 30, 2020 and 2019.

Other item - Review by Other Accountants

For some of the subsidiaries included in the consolidated financial statements of the PanInternational Group, their financial reports are not reviewed by us but by other accountants. We have implemented a necessary review of the adjustments to the conversion of these subsidiaries' financial statements into consistent accounting policies. Therefore, in the review report we issued by this accountant on the consolidated financial reports above, the amounts in the financial reports of these subsidiaries before adjustments are based on the review reports of other accountants. Their total assets as of June 30, 2020 and 2019 were NT$4,429,403 thousand and 4,359,958 thousand respectively, accounting for 21% and 21% of the total consolidated assets. Their operating revenue for the period from April 1 to June 30, 2020 and 2019, and from January 1 to June 30, 2020 and 2019 were NT$771,132 thousand, NT$1,356,171 thousand, NT$1,496,326 thousand and NT$2,498,675 thousand respectively, accounting for 16%, 20%, 16%, and 21% of the consolidated operating revenue.

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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 August 12, 2020

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Pan-International Industrial Corp. and Subsidiaries Consolidated Balance Sheets

June 30, 2020 and December 31, June 30, 2019

(The consolidated balance sheet as of June 30, 2020 and 2019 was only reviewed but not audited according to generally accepted auditing standards)

1100 1110 1150 1170 1180 1200 130X 1470 11XX 1517 1535 1550 1600 1755 1760 1780 1840 1900 15XX 1XXX	Asset Note	June 30, 2020		December 31, 2019	December 31, 2019	Unit: NTD thousand June 30, 2019 Amount % $ 5,101,962 25 75,794 - 175 - 2,955,484 14 4,096,429 20 68,198 - 2,313,016 11 178,226 1 14,789,284 71 2,524,061 12 1,357 - 867,416 4 1,795,235 9 458,782 2 154,711 1 38,689 - 101,391 1 36,220 - 5,977,862 29 $ 20,767,146 100
		Amount $ 6,926,469 41,611 550 2,114,274 3,194,920 56,931 2,426,994 190,918 14,952,667 2,551,090 1,256 803,691 1,600,545 319,124 233,788 35,744 92,013 21,284 5,658,535 $ 20,611,202	% 34 - - 10 16 - 12 1 73 12 - 4 8 2 1 - - - 27 100	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	% 29 - - 12 19 1 11 1 73 12 - 4 8 2 1 - - - 27 100	Amount $ 5,101,962 75,794 175 2,955,484 4,096,429 68,198 2,313,016 178,226 14,789,284 2,524,061 1,357 867,416 1,795,235 458,782 154,711 38,689 101,391 36,220 5,977,862 $ 20,767,146
	Current assets Cash and cash equivalents 6 (1) Financial assets at FVTPL - Current 6 (2) Net notes receivable 6 (3) Net accounts receivable 6 (3) Accounts receivable - Related parties net 7 Other receivables 7 Inventory 6 (4) Other current assets 8 Total current assets NON-CURRENT ASSETS Financial assets measured at fair value through other comprehensive income - Non- current 6 (5) Financial assets measured at after-amortization cost - Non- current 6 (6) and 8 Investment by equity method 6 (7) Property, plant, and equipment 6 (8) and 8 Right-of-use assets 6 (9) Net investment property 6 (10) and 8 Intangible asset 6 (11) Deferred tax assets Other non-current assets Total non-current assets Total assets

(To be Continued)

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Pan-International Industrial Corp. and Subsidiaries Consolidated Balance Sheets

June 30, 2020 and December 31, June 30, 2019

(The consolidated balance sheet as of June 30, 2020 and 2019 was only reviewed but not audited according to generally accepted auditing standards)

LIABILITIES AND EQUITY Note	June 30, 2020 Amount % $ 2,020,766 10 233,693 1 2,792,716 14 1,828,876 9 1,322,090 6 88,342 1 75,771 - 21,082 - 8,383,336 41 256,132 1 175,900 1 52,070 - 484,102 2 8,867,438 43 5,183,462 25 1,503,606 7 1,062,342 5 1,312,274 6 2,865,094 14 ( 1,620,127 ) ( 7) 10,306,651 50 1,437,113 7 11,743,764 57 $ 20,611,202 100	December 31, 2019 Amount % $ 1,573,950 7 263,111 1 3,307,826 15 2,188,793 10 949,138 5 185,498 1 79,387 1 41,222 - 8,588,925 40 257,574 1 215,900 1 47,449 - 520,923 2 9,109,848 42 5,183,462 24 1,503,606 8 959,410 4 883,205 4 3,741,403 17 ( 1,312,274) ( 6) 10,958,812 51 1,619,122 7 12,577,934 58 $ 21,687,782 100	Unit: NTD thousand June 30, 2019 Amount % $ 1,302,740 6 411,451 2 2,959,824 14 1,665,179 8 1,482,924 7 95,997 1 83,115 - 24,767 - 8,025,997 38 259,467 1 270,907 2 40,845 - 571,219 3 8,597,216 41 5,183,462 25 1,503,606 7 959,410 5 883,205 4 3,157,977 15 ( 1,074,936 ) ( 5) 10,612,724 51 1,557,206 8 12,169,930 59 $ 20,767,146 100
	Amount $ 2,020,766 233,693 2,792,716 1,828,876 1,322,090 88,342 75,771 21,082 8,383,336 256,132 175,900 52,070 484,102 8,867,438 5,183,462 1,503,606 1,062,342 1,312,274 2,865,094 ( 1,620,127 ) 10,306,651 1,437,113 11,743,764 $ 20,611,202	Amount $ 1,573,950 263,111 3,307,826 2,188,793 949,138 185,498 79,387 41,222 8,588,925 257,574 215,900 47,449 520,923 9,109,848 5,183,462 1,503,606 959,410 883,205 3,741,403 ( 1,312,274) 10,958,812 1,619,122 12,577,934 $ 21,687,782	Amount $ 1,302,740 411,451 2,959,824 1,665,179 1,482,924 95,997 83,115 24,767 8,025,997 259,467 270,907 40,845 571,219 8,597,216 5,183,462 1,503,606 959,410 883,205 3,157,977 ( 1,074,936 ) 10,612,724 1,557,206 12,169,930 $ 20,767,146
Current liability 2100 Short-term borrowings 6 (12) 2130 Contractual liabilities - Current 6 (20) 2170 Accounts payable 2180 Accounts payable - Related parties 7 2200 Other payables 6 (13) 2230 Current tax liabilities 2280 Lease liabilities - Current 7 2399 Other current liabilities - Other 21XX Total current liabilities Non-current liabilities 2570 Deferred tax liabilities 2580 Lease liabilities - Non-current 7 2600 Other non-current liabilities 25XX Total non-current liabilities 2XXX Total liabilities Equity attributable to owners of the parent company Share capital 6 (15) 3110 Common share capital Capital surplus 6 (16) 3200 Capital surplus Retained earnings 6 (17) 3310 Legal reserve 3320 Special reserve 3350 Unappropriated earnings Other equities 6 (18) 3400 Other equities 31XX Total equity attributable to owners of the parent company 36XX Non-controlling interests 6 (19) 3XXX Total equity Significant Contingent Liabilities and Unrecognized Commitments 9 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

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Pan-International Industrial Corp. and Subsidiaries Consolidated Statements of Comprehensive Income For the Six Months Ended June 30, 2020 and 2019

(Only reviewed, but not audited according to generally accepted auditing standards)

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

Item Note	April 1 to Jun 30, 2020 Amount % $ 4,936,199 100 ( 4,475,025) ( 91) 461,174 9 ( 58,500) ( 1) ( 219,935) ( 5) ( 66,507) ( 1) ( 10,143) - ( 355,085) ( 7) 106,089 2 36,576 1 61,015 1 4,488 - ( 15,051) - 1,058 - 88,086 2 194,175 4 ( 56,899) ( 1) $ 137,276 3	April 1 to Jun 2019	30, % 100 ( 91) 9 ( 1) ( 2) ( 1) - ( 4) 5 - - 2 - - 2 7 ( 2) 5	January 1 to Jun 30, 2020 Amount % $ 9,649,068 100 ( 8,987,008) ( 93 ) 662,060 7 ( 104,144) ( 1 ) ( 341,017) ( 4 ) ( 112,522) ( 1 ) ( 12,154) - ( 569,837) ( 6 ) 92,223 1 62,296 - 73,786 1 73,028 1 ( 26,931) - ( 34,864) ( 1 ) 147,315 1 239,538 2 ( 93,380) ( 1 ) $ 146,158 1	January 1 to Jun 30, 2019 Amount % $ 12,155,545 100 ( 11,220,666) ( 92) 934,879 8 ( 121,694) ( 1) ( 315,105) ( 3) ( 129,890) ( 1) 5,973 - ( 560,716) ( 5) 374,163 3 51,775 - 36,487 - 201,317 2 ( 36,671) - ( 22,175) - 230,733 2 604,896 5 ( 141,923) ( 1) $ 462,973 4
	Amount $ 4,936,199 ( 4,475,025) 461,174 ( 58,500) ( 219,935) ( 66,507) ( 10,143) ( 355,085) 106,089 36,576 61,015 4,488 ( 15,051) 1,058 88,086 194,175 ( 56,899) $ 137,276	Amount $ 6,650,300 ( 6,013,437) 636,863 ( 65,583) ( 156,264) ( 70,129) 3,305 ( 288,671) 348,192 27,551 20,630 95,554 ( 15,343) ( 11,931) 116,461 464,653 ( 116,662) $ 347,991		Amount $ 9,649,068 ( 8,987,008) 662,060 ( 104,144) ( 341,017) ( 112,522) ( 12,154) ( 569,837) 92,223 62,296 73,786 73,028 ( 26,931) ( 34,864) 147,315 239,538 ( 93,380) $ 146,158	Amount $ 12,155,545 ( 11,220,666) 934,879 ( 121,694) ( 315,105) ( 129,890) 5,973 ( 560,716) 374,163 51,775 36,487 201,317 ( 36,671) ( 22,175) 230,733 604,896 ( 141,923) $ 462,973
4000 Operating revenue 6 (20) and 7 5000 Operating cost 6 (4) (23) and 7 5900 Operating profit margin Operating expenses 6 (23) 6100 Selling and marketing expenses 6200 General and administrative expenses 6300 Research and development expenses 6450 Expected credit impairment benefit (loss) 12 (2) 6000 Total operating expenses 6900 Operating profit Non-operating revenue and expense 7100 Interest income 7010 Other income 6 (21) 7020 Other gains and losses 6 (22) 7050 Financial costs 6 (24) 7060 Share of profits and losses of affiliated companies and joint ventures recognized by the equity method 6 (7) 7000 Total non-operating revenue and expenses 7900 Net income before tax 7950 Income tax expense 6 (25) 8200 Net income for the period

(To be Continued)

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Pan-International Industrial Corp. and Subsidiaries Consolidated Statements of Comprehensive Income For the Six Months Ended June 30, 2020 and 2019

(Only reviewed, but not audited according to generally accepted auditing standards)

Item Note	April 1 to Jun 2020	30, % 5 5 ( 3) ( 3) 2 5 3 - 3 6 ( 1) 5 0.30 0.30	April 1 to Jun 2019	30, % ( 5) ( 5) ( 1) ( 1) ( 6) ( 1) 5 - 5 ( 1) - ( 1) 0.63 0.63	Unit: NTD thousand (except in NTD for earnings per share) January 1 to Jun 30, 2020 January 1 to Jun 30, 2019 Amount % Amount % ($ 36,075) - ($ 295,538) ( 3) ( 36,075) - ( 295,538) ( 3) ( 362,350) ( 4 ) 125,377 1 ( 362,350) ( 4 ) 125,377 1 ($ 398,425) ( 4 ) ($ 170,161) ( 2) ($ 252,267) ( 3 )$ 292,812 2 $ 174,038 1 $ 442,294 4 ( 27,880) - 20,679 - $ 146,158 1$ 462,973 4 ($ 133,815) ( 2 ) $ 250,563 2 ( 118,452) ( 1 ) 42,249 - ($ 252,267) ( 3 )$ 292,812 2 $ 0.34 $ 0.85 $ 0.33 $ 0.85
	Amount $ 269,485 269,485 ( 162,657) ( 162,657) $ 106,828 $ 244,104 $ 155,495 ( 18,219 ) $ 137,276 $ 278,639 ( 34,535) $ 244,104 $		Amount ($ 335,489) ( 335,489) ( 79,844) ( 79,844) ($ 415,333) ($ 67,342) $ 326,768 21,223 $ 347,991 ($ 81,551) 14,209 ($ 67,342) $		Amount ($ 36,075) ( 36,075) ( 362,350) ( 362,350) ($ 398,425) ($ 252,267) $ 174,038 ( 27,880) $ 146,158 ($ 133,815) ( 118,452) ($ 252,267) $
Items that will not be reclassified subsequently to profit or loss 8316 Unrealized evaluation profit and loss of equity instrument investment measured at fair value through other comprehensive income 6 (18) 8310 Total of items not reclassified to profit or loss Items that may be reclassified subsequently to profit or loss: 8361 Exchange Differences in Translating the Financial Statements of Foreign Operations 6 (18) (19) 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) 6 (26) 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

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Pan-International Industrial Corp. and Subsidiaries Consolidated Statements of Changes Equity For the Six Months Ended June 30, 2020 and 2019

(Only reviewed, but not audited according to generally accepted auditing standards)

Unit: NTD thousand

1st half of 2019 Balance on January 1 Current period net profit 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 Decrease in non-controlling interests Balance on June 30 1st half of 2020 Balance on January 1 Net profit (loss) of 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 Decrease in non-controlling interests Balance on June 30	Note			Equity attributable to owners of the parent company	Equity attributable to owners of the parent company	Equity attributable to owners of the parent company	Equity attributable to owners of the parent company	Equity attributable to owners of the parent company	Equity attributable to owners of the parent company	Equity attributable to owners of the parent company	Equity attributable to owners of the parent company	Equity attributable to owners of the parent company	Equity attributable to owners of the parent company	Equity attributable to owners of the parent company	Equity attributable to owners of the parent company	Equity attributable to owners of the parent company	Equity attributable to owners of the parent company				Non- controlling interests		Total Equity
			Common share capital	Capital surplus						Retained earnings					Other equities				Total
				Capital reserve - Issuance premium		Capital reserve - Treasury share transaction			Legal reserve		Special reserve	Unappropriated earnings			Exchange Differences in Translating the Financial Statements of Foreign Operations	Unrealized Gain (Loss) on Financial Assets at Fair Value Through Other Comprehensive Income
	6 (18) 6 (17) 6 (19) 6 (18) 6 (17) 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 - - - $ 1,062,34 2		$496,898 - - - - 386,307 - - $883,205 $883,205 - - - - 429,069 - - $1,312,274		$ 3,790,709 442,294 - 442,294 ( 118,538 ) ( 386,307 ) ( 570,181 ) - $ 3,157,977 $ 3,741,403 174,038 - 174,038 ( 102,932 ) ( 429,069 ) ( 518,346 ) - $ 2,865,094		($ 783,138 ) - 103,807 103,807 - - - - ($ 679,331 ) ($ 1,061,916 ) - ( 271,778 ) ( 271,778 ) - - - - ($ 1,333,694 )		($ 100,067 ) - ( 295,538 ) ( 295,538 ) - - - - ($ 395,605 ) ($ 250,358 ) - ( 36,075 ) ( 36,075 ) - - - - ($ 286,433 )		$10,932,342 442,294 ( 191,731 ) 250,563 - - ( 570,181 ) - $10,612,724 $10,958,812 174,038 ( 307,853 ) ( 133,815 ) - - ( 518,346 ) - $10,306,651		$1,580,757 20,679 21,570 42,249 - - - ( 65,800 ) $1,557,206 $1,619,122 ( 27,880 ) ( 90,572 ) ( 118,452 ) - - - ( 63,557 ) $1,437,113	$12,513,099 462,973 ( 170,161 ) 292,812 - - ( 570,181 ) ( 65,800 ) $12,169,930 $12,577,934 146,158 ( 398,425 ) ( 252,267 ) - - ( 518,346 ) ( 63,557 ) $11,743,764

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

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Pan-International Industrial Corp. and Subsidiaries

Consolidated Statements of Cash Flows

For the Six Months Ended June 30, 2020 and 2019

(Only reviewed, but not audited according to generally accepted auditing standards)

Unit: NTD thousand

CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax Adjustments income and expenses items Depreciation expenses and amortizations Expected credit impairment reversal loss (profit) Net benefits of financial assets and liabilities measured at fair value through the income Interest expense Interest income Dividend income Share of profits and losses of affiliated companies recognized by the equity method Unrealized conversion gains (losses) Net loss (gain) 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 Acquisition of financial assets measured at after-amortization cost Disposal of financial assets measured at after-amortization cost Purchase property, plant and equipment assets Proceeds from disposal of property, plant and equipment Proceeds from disposal of non-current assets pending for sale Increase in refundable deposits Increase in other non-current assets Interest received Dividend received Net cash inflow (outflow) from investment activities Cash flows from financing activities Increase (decrease) in short-term borrowings Interest paid Number of cash dividends paid to non-controlling interests Lease principal repayment Net cash inflow (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 Six months ended June 30,2020 Six months ended June 30,2019 $ 239,538 $ 604,896 6 (23) 195,278 221,637 12 (2) 12,154 ( 5,973 ) 6 (22) ( 18,449 ) ( 21,834 ) 6 (24) 26,931 36,671 ( 62,296 ) ( 51,775 ) 6 (21) ( 1,235 ) ( 364 ) 6 (7) 34,864 22,175 ( 24,184 ) 18,742 6 (22) 4,719 ( 515 ) 6 (22) - ( 145,112 ) 54,542 16,331 5,654 9 416,377 ( 140,270 ) 844,116 1,801,371 138,746 162,382 ( 19,008 ) 466,084 ( 6,646 ) ( 40,543 ) ( 443,533 ) ( 1,341,967 ) ( 330,059 ) ( 628,300 ) ( 165,200 ) ( 28,060 ) ( 18,412 ) 2,077 ( 29,418 ) 11,839 4,738 9 859,217 959,510 ( 215,385) ( 220,692 ) 643,832 738,818 - ( 2,738,012 ) - 3,442,005 6 (27) ( 189,167 ) ( 152,863 ) 11,102 16,525 - 246,191 ( 342 ) - ( 571 ) ( 75 ) 62,560 51,418 1,235 364 ( 115,183) 865,553 6 (28) 470,040 ( 878,149 ) ( 25,228 ) ( 32,970 ) 6 (19) ( 63,557 ) ( 65,800 ) ( 21,455) ( 11,132 ) 359,800( 988,051 ) ( 162,491 ) 42,274 725,958 658,594 6,200,511 4,443,368 $ 6,926,469 $ 5,101,962

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

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Pan-International Indsutrial Corp. and Subsidiaries Notes to consolidated financial statements

2nd Quarter of 2020 and 2019

(Only reviewed, but not audited according to generally accepted auditing standards)

Unit: NTD thousand (unless otherwise noted)

I. Organization and operations

Pan-International Indsutrial Corp. (hereinafter referred to as "the company") was established in the Republic of China. The main business activities of the company and its subsidiaries (hereinafter referred to as "the group") are the development, manufacturing and sales of computer peripheral products and components such as electronic signal cables, connectors, electronic signal cables with connectors, precision molds, and printed circuit boards.

II. The Authorization of Financial Reports

This consolidated financial report was announced after being submitted to the board of directors on August 12, 2020.

III. Application of Newly Released and Revised Standards and Interpretations

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The impact of the adoption of the new and revised International Financial Reporting Standards (IFRS) approved by the Financial Supervisory Commission (FSC)

The following table sets forth the standards and explanations for the new issues, amendments and revisions of International Financial Reporting Standards (IFRS) recognized by the FSC for application in 2020:

application in 2020:
New/amended/revised standards and interpretations	Effective date of the release of the International Accounting Standards Board
Amendments to IAS 1 and IAS 8 "Disclosure initiative - Definition of materiality" Amendment to IFRS 3 "Definition of business" Amendments to IFRS 9, IAS 39, and IFRS 7 "Changes in interest rate indicators" Amendment to IFRS 16 "Rent reduction related to new coronavirus pneumonia"	January 1, 2020 January 1, 2020 January 1, 2020 June 1, 2020

The group has assessed that the standards and interpretations above have no significant impact on the financial position and financial performance of the group, and the relevant amount of impact will be disclosed when the evaluation is completed.

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• Impact of not adopting the new and revised International Financial Reporting Standards approved by the FSC

None.

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Impact of International Financial Reporting Standards issued by the International Accounting Standards Board not yet approved by the FSC

The following table summarizes the newly issued, amended, and revised standards and interpretations of International Financial Reporting Standards issued by the IASB but not yet recognized by the FSC:

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New/amended/revised standards and interpretations

Effective date of the release of the International Accounting Standards Board

Amendment to IFRS 4 "Extension of temporary exemption from the application of IFRS 9" Amendment to IFRS 3 "Index to conceptual framework" Amendments to IFRS 10 and IAS 28 "Asset sales or investments between investors and their associated enterprises or joint ventures" IFRS 17 “Insurance contracts” Amendment to IFRS 17 “Insurance contracts” Amendment to IAS 1 "Classification of current or non-current liabilities" Amendment to IAS 16 "Property, plant and equipment: price before reaching intended use" Amendment to IAS 37 "Loss contracts - Cost of performing contracts" Annual improvement from 2018 to 2020

January 1, 2021 January 1, 2022 To be decided by IASB January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2022 January 1, 2022 January 1, 2022

The group has assessed that the standards and interpretations above have no significant impact on the financial position and financial performance of the group.

IV. Summary of Significant Accounting Policies

The major accounting policies adopted in the preparation of this consolidated financial report are as follows. Unless otherwise stated, these policies apply consistently throughout the reporting period.

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Statement of compliance

This consolidated financial report is prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Accounting Standard No. 34 "Interim financial reporting" approved by the FSC.

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Basis of preparation

1. Except for the following important items, this consolidated financial report is prepared at historical cost:

2. (1) Financial assets and liabilities (including derivatives) are measured at fair value through income.

3. (2) Financial assets measured at fair value through other comprehensive income.

4. (3) Defined benefit liabilities are recognized according to the net amount of retirement fund assets minus the present value of defined benefit obligations.

5. The preparation of financial reports in accordance with the International Financial Reporting Standards, International Accounting Standards, Interpretation and Interpretation Announcements (hereinafter referred to as IFRSs) recognized by the FSC requires the use of some important accounting estimates. In the application of the group's accounting policies, the management also needs to use its judgment, involving items with high judgment or complexity, or major assumptions and estimates involving consolidated financial reports. Please refer to note 5 for details.

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Basis of consolidation

1. Principles for preparation of consolidated financial reports

2. (1) All subsidiaries of the group are included in the individual entities of the consolidated

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financial reports. Subsidiaries refer to individual entities (including structured individual entities) controlled by the group. When the group is exposed to or entitled to variable remuneration from participation in an individual entity, and can influence such remuneration through the power over the individual entity, the group controls such an individual entity. Subsidiaries are included in the consolidated financial reports from the date when the group obtains their control, and the merger is terminated from the date of loss of control.

• (2) Intra-group transactions, balances and unrealized gains and losses have been eliminated. Necessary adjustments have been made to the accounting policies of the subsidiaries which are consistent with the policies adopted by the group.

• (3) The components of profit and loss and other comprehensive income belong to the owners and non- controlling interests of the parent company; the total amount of comprehensive income also belongs to the owners and non-controlling interests of the parent company, even if it results in a loss of the balance of non-controlling interests.

• (4) If the change in the shareholding of a subsidiary does not result in a loss of control (transactions with a non- controlling interest), it is treated as an equity transaction, that is, a transaction with the owner. The difference between the adjustment amount of a noncontrolling interest and the fair value of the consideration paid or received is directly recognized under equity.

• (5) When the group loses control over a subsidiary, the remaining investment in this subsidiary is re-measured at fair value and is regarded as the fair value of the originally recognized financial assets or the cost of the investment in the originally recognized affiliated enterprise or joint venture, and the difference between the fair value and the book value is recognized as the current profit and loss. All amounts previously recognized in other comprehensive income related to the subsidiary are reclassified as profit and loss.

• Subsidiaries listed in the consolidated financial reports:

Name	Name	Main Business	% of Ownership	% of Ownership	% of Ownership	Explanation
			June 30, 2020	Dec. 31, 2019	June 30, 2019
Pan- International Indsutrial Corp. Pan- International Indsutrial Corp.	PAN- INTERNATIONAL ELECTRONICS INC.(PIU) PAN GLOBAL HOLDING CO., LTD.(PGH)	Engaged in the import and sales of various electronic products. Engaged in reinvestment in the Asia Pacific and mainland China businesses, and production and manufacturing of electronic signal cables, connectors, and computer	100 100	100 100	100 100	(2) (1) (2)

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peripheral products. PanYen Yung International Engaged in the 100 100 100 (2) International Investment Co., Ltd domestic Indsutrial investment Corp. business.

• (1) Please refer to Schedule 8 for detailed disclosure of information on the indirect reinvestment by the subsidiary above into mainland China companies.

• (2) The financial statements of some non-significant subsidiaries of the group have not been reviewed by a certified public accountant.

• Subsidiaries not included in the consolidated financial reports: No such situation.

• Different adjustment and treatment methods of subsidiary accounting period: No such situation.

• Major limitation: No such situation.

• Subsidiaries with significant non-controlling interests in the group

The total amount of non-controlling interests of the group as of June 30, 2020, and December 31 and June 30, 2019 were NT$1,437,113, NT$1,619,122 and NT$1,557,206, respectively. The following is the information about the non-controlling interests of the group and its subsidiaries:

Investee	Main business location			Non-controllinginterests	Non-controllinginterests
		June 30,2020		Dec. 31,2019		June 30,2019
		Amount	Shareholding percentage	Amount	Shareholding percentage	Amount	Shareholding percentage
P.I.E. INDUSTRIAL BERHAD Malaysia $1,393,082 49 Summary financial information of subsidiaries: Balance sheet				$1,554,282	49	$1,490,370	49

Balance sheet
Current assets NON-CURRENT ASSETS Current liability Non-current liabilities Net total assets	June 30,2020	Dec. 31,2019	June 30,2019
	$ 3,454,852 867,809 ( 1,425,591) ( 29,464) $ 2,867,606	$ 3,041,706 825,779 ( 616,392) ( 39,604) $ 3,211,489	$ 3,395,906 876,085 ( 1,154,396) ( 49,227) $ 3,068,368

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Comprehensive Income Statement

Income Net income before tax Income tax expense Net profit (loss) of the period Other comprehensive income (after tax) Total comprehensive income in the current period Total comprehensive profit and loss attributable to non- controlling interests Income Net income before tax Income tax expense Net profit (loss) of the period Other comprehensive income (after tax) Total comprehensive income in the current period Total comprehensive profit and loss attributable to non- controlling interests Cash Flow Statement Net cash inflow from business activities Net cash inflow from investment activities Net cash inflow (outflow) from financing activities Effects of exchange rate changes on the balance of 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 year	April 1 to June 30,2020 $ 771,133 ( 7,862) ( 1,117) ( 8,979) ( 38,530) ($ 47,509) ($ 23,080) January1 to June 30,2020 $ 1,496,326 ( 21,999) 2,781 ( 19,218) ( 181,774) ($ 200,992) ($ 97,642) January1 to June 30,2020	April 1 to June 30,2019
		$ 1,356,171
		64,721 ( 15,130)
		49,591 ( 11,548)
		$ 38,043
		$ 18,481
		January1 to June 30,2019
		$ 2,498,675 75,052 ( 20,360) 54,692 42,213 $ 96,905 $ 47,076 January1 to June 30,2019
	$ 130,880 ( 121,798) ( 135,612) ( 24,883)	$ 267,795 ( 52,969) ( 181,406) 6,670
	( 151,413)	40,090
	1,227,197	897,270
	$ 1,075,784	$ 937,360

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Foreign exchange conversion

1. This consolidated financial report is presented in NTD, the functional currency of the company, as the presentation currency.

2. Foreign currency transactions and balances

3. (1) Foreign currency transactions are converted into the functional currency at the spot exchange rate on the transaction date or measurement date, and the conversion difference arising from the conversion of such transactions is recognized as current profit and loss.

4. (2) The balance of foreign currency monetary assets and liabilities shall be evaluated and adjusted at the spot exchange rate on the balance sheet date, and the conversion difference arising from the adjustment shall be recognized as the current profit and loss.

5. (3) The balance of foreign currency non-monetary assets and liabilities measured at fair value through income shall be evaluated and adjusted according to the spot exchange rate on the balance sheet date, and the exchange difference arising from the adjustment shall be recognized as the current profit and loss; if the balance is measured at fair value through other comprehensive income, it shall be evaluated and adjusted according to the spot exchange rate on the balance sheet date, and the exchange difference arising from the adjustment shall be recognized in others comprehensive income; if it is not measured by fair value, it is measured according to the historical exchange rate on the initial trading day.

6. (4) All exchange gains and losses are reported in "other gains and losses" in the income statement.

7. Conversion of foreign operations

8. (1) For all group individuals and affiliated enterprises whose functional currency is different from the presentation currency, their operating results and financial status shall be converted into the presentation currency in the following ways:

   • A. The assets and liabilities expressed in each balance sheet are converted at the spot exchange rate on the balance sheet date;

   • B. The income and expense losses expressed in each consolidated income statement are converted at the current average exchange rate; and

   • C. All exchange differences arising from the conversion are recognized in other comprehensive income.

   • D. When the foreign operation which is partially disposed of or sold is a subsidiary, the accumulated exchange difference recognized in other comprehensive income is returned to the non-controlling interest of the foreign operation on a pro-rata basis. However, if the group still retains part of its interest in the aforementioned subsidiary, but has lost control of the subsidiary of the foreign operation, it shall be treated as a disposal of all the rights and interests of the foreign operation.

9. (2) Goodwill and fair value adjustments arising from the acquisition of a foreign individual entity are treated as assets and liabilities of the foreign individual entity and are converted at the exchange rate at the end of the period.

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Classification criteria for current and non-current assets and liabilities

1. Assets that meet one of the following conditions are classified as current assets:

2. (1) The asset is expected to be realized in the normal business cycle or intended to be sold or consumed.

3. (2) Held mainly for trading purposes.

4. (3) Expected to be realized within 12 months after the balance sheet date.

5. (4) Cash or cash equivalents, except for those to be exchanged or used to settle liabilities in at least 12 months after the balance sheet date.

The Group classifies all assets that do not meet the conditions above as non-current.

1. Liabilities that meet one of the following conditions are classified as current liabilities:

2. (1) Those that are expected to be settled in the normal business cycle.

3. (2) Held mainly for trading purposes.

4. (3) Expected to be settled within 12 months after the balance sheet date.

5. (4) The repayment period cannot be unconditionally deferred to at least 12 months after the balance sheet date. The terms of the liabilities may be based on the choice of the counterparty; the fact that the liabilities are settled due to the issuance of equity instruments does not affect its classification.

The group classifies all liabilities that do not meet the above conditions as non-current.

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Cash equivalents

Cash equivalents refer to short-term and highly liquid investments that can be converted into a fixed amount of cash at any time with little risk of change in value. Time deposits that meet the definition above and are held to meet short-term cash commitments in operation are classified as cash equivalents.

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Financial assets at FVTPL

1. Financial assets measured at fair value through income refer to financial assets held for trading. Financial assets are classified as held for trading if they are mainly to be sold in a short period at the time of acquisition. Derivatives are classified as financial assets held for trading, except those designated as hedging items according to hedge accounting.

2. The group adopts transaction day accounting for financial assets measured at fair value through income in compliance with trading practices.

3. The group measures their fair value at the time of original recognition, while relevant transaction costs are recognized as current profit and loss. Subsequently, they are measured at fair value and changes in profit or loss are recognized in profit or loss.

4. When the right to receive dividends is established, the economic benefits related to dividends are likely to flow in and the number of dividends can be measured reliably, and the group recognizes the dividend income in profit or loss.

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Financial assets at FVTOCI

1. Refers to an irrevocable choice at the time of initial recognition to report changes in the fair value of equity instrument investments that are not held for trading in other comprehensive

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income; or debt instrument investments that meet the following conditions at the same time:

• (1) The financial asset is held under the business model to collect contractual cash flow and for sale.

• (2) The cash flow generated on a specific date from the contractual terms of the financial assets is entirely the interest in the payment of the principal and the outstanding principal amount.

• The group adopts transaction day accounting for financial assets measured at fair value through other comprehensive income in accordance with trading practices.

• The group measures their fair value plus transaction costs at the time of original recognition, and is subsequently measured at fair value:

• (1) Changes in the fair value of equity instruments are recognized in other comprehensive income. At the time of derecognition, the accumulated profits or losses previously recognized in other comprehensive income shall not be reclassified to profit or loss but transferred to retained earnings. When the right to receive dividends is established, the economic benefits related to dividends are likely to flow in and the number of dividends can be reliably measured, the group recognizes dividend income in profit or loss.

• (2) Changes in the fair value of debt instruments are recognized in other comprehensive income, and the impairment loss, interest income, and foreign currency exchange gain or loss before derecognition are recognized in profit or loss. At the time of derecognition, the accumulated gain or loss previously recognized in other comprehensive income is reclassified from equity to profit or loss.

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Financial assets measured at after-amortization cost

1. Refers to those who meet the following conditions at the same time:

2. (1) Holding the financial asset under the business model to collect the contractual cash flow.

3. (2) The cash flow generated on a specific date from the contractual terms of the financial assets is entirely the interest in the payment of the principal and the outstanding principal amount.

4. The group adopts transaction day accounting for financial assets measured at afteramortization cost in accordance with trading practices.

5. The group measures their fair value plus transaction cost at the time of original recognition. Subsequently, the effective interest method is adopted to recognize interest income and impairment loss in the current period according to the amortization procedure, and the profit or loss is recognized in profit and loss at the time of derecognition.

6. Due to the short holding period, the fixed deposits held by the group that does not conform to cash equivalents have an insignificant discount effect and are therefore measured by the investment amount.

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Accounts and notes receivable

1. Refer to accounts and notes which, according to the contract, have the unconditional right to receive the amount of consideration obtained from the transfer of goods or services.

2. For short-term accounts and notes receivable with unpaid interest, as they have little effect on discount, the group measures them based on the original invoice amount.

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Impairment of financial assets

On each balance sheet date, the group takes into account all reasonable and verifiable information (including forward-looking) in respect of debt instrument investment measured at fair value through other comprehensive income, financial assets measured at afteramortization cost, and accounts receivable with significant financial components. If the credit risk does not increase significantly since the original recognition, the loss allowance is measured as 12 months expected credit loss; if the credit risk has increased significantly since the original recognition, the loss allowance is measured according to the expected credit loss amount during the duration; for accounts receivable that do not contain significant financial components, the loss allowance is measured according to the expected credit loss amount during the duration.

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Derecognition of financial assets

When the group's contractual right to receive cash flows from financial assets lapses, the financial assets will be derecognised.

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Lessor’s lease transaction - Operating lease

Lease income from operating leases, after deducting any incentives given to the lessee, is amortized and recognized as current income on a straight-line method during the lease period.

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Inventory

Inventories are measured by the lower of cost and net realizable value, and the cost is determined by the weighted average method. The cost of finished products and work-inprogress includes raw materials, direct labor, other direct costs, and production-related manufacturing expenses (allocated according to normal production capacity), but does not include borrowing costs. When comparing whether the cost or the net realizable value is lower, the item-by-item comparison method is adopted. The net realizable value refers to the balance of the estimated selling price in the normal business process after subtracting the estimated cost that must be invested before completion and related variable sales expenses.

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Non-current assets to be sold (or the disposal group)

When the book value of a non-current asset (or the disposal group) is mainly recovered through a sale transaction rather than continued use, and it is highly likely to be sold, then it is classified as an asset for sale and is measured at the lower of its book value or fair value less the cost of sale.

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- Investment by the equity method Affiliated enterprises

1. Affiliated enterprises refer to all individual entities in which the group has a significant influence on them but has no control over them. Generally, the group directly or indirectly holds more than 20% of their voting rights. The group's investment in affiliated enterprises is treated with the equity method and recognized at cost when acquired.

2. The group recognizes the share of profit or loss of the affiliated enterprise as the current income and recognizes the share of other comprehensive income after the acquisition as other comprehensive income. If the group's share of loss in any affiliated enterprise is equal to or exceeds its interest in the associated enterprise (including any other unsecured receivables), the group does not recognize any further loss, unless the group has a legal or constructive obligation to the associated enterprise or has made payments

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on its behalf.

1. When the equity change of non-profit and loss and other comprehensive income occurs in the affiliated enterprise but does not affect the shareholding ratio in the affiliated enterprise, the group will recognize the change of equity under the share of the affiliated enterprise as the group as "capital reserve" according to the shareholding ratio.

2. The unrealized gains and losses arising from the transactions between the group and its affiliated enterprises have been written off in proportion to the equity in the affiliated enterprises; unless there is evidence showing that the assets transferred by the transaction have been impaired, the unrealized losses will also be eliminated. Necessary adjustments have been made to the accounting policies of affiliated enterprises which are consistent with the policies adopted by the group.

3. When the group disposes of an affiliated enterprise, if there is a loss of significant influence on the affiliated enterprise, the accounting treatment of all amounts previously recognized in other comprehensive income related to the affiliated enterprise is the same as if the group directly disposes of the relevant assets or liabilities, that is, if the interests or losses previously recognized as other comprehensive income will be reclassified as profit and loss, then if there is a loss of significant influence on the affiliated enterprise, the profit or loss will be reclassified as profit and loss from equity. If the group still has a significant influence on the affiliated enterprise, the amount previously recognized in other comprehensive income shall be transferred out in the above manner only in proportion.

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Property, plant, and equipment

1. Property, plant and equipment are recorded based on the acquisition cost, and the relevant interest during the acquisition and construction period is capitalized.

2. Subsequent costs are included in the book value of assets or recognized as a separate asset only when the future economic benefits related to the project are likely to flow into the group and the cost of the project can be measured reliably. The book value of the reset part should be derecognised. All other maintenance costs are recognized in current profit or loss when incurred.

3. For property, plant and equipment, the cost model is adopted for the subsequent measurement. Except that land is not depreciated, the depreciation is calculated by the straight-line method according to the estimated service life. If the components of property, plant and equipment are significant, they are separately depreciated.

4. The group reviews the residual value, service life, and depreciation method of each asset at the end of each fiscal year. If the expected value of the residual value or service life is different from the previous estimate, or the expected consumption pattern of the future economic benefits contained in the asset has changed significantly, then from the date of the change, it shall be handled in accordance with the provisions of the International Accounting Standard No. 8 "Accounting Policies, Changes and Errors in Accounting Estimates." The service life of each asset is as follows:

Buildings 20 ~ 40 years Equipment 2 ~ 10 years Others 2 ~ 10 years

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Lessee’s lease transaction - Right-of-use assets/lease liabilities

1. Lease assets are recognized as right-of-use assets and lease liabilities on the date they are available for use by the group. When the lease contract is a short-term lease or lease of a low-value target asset, the lease payment shall be recognized as an expense during the lease period by the straight-line method.

2. Lease liabilities are recognized at the present value of the lease payments that have not been paid at the beginning of the lease, at the discounted current value of the group's incremental borrowing rate.

Subsequently, the interest method is adopted and measured by the after-amortization cost, and interest expenses are provided during the lease period. When the lease period or lease payment changes but not due to contract modification, the lease liabilities will be reassessed and the right-of-use assets will be re-measured.

1. The right-of-use assets are recognized at cost on the lease start date, and the cost is measured based on the original amount of the lease liability.

The subsequent measurement is based on the cost model, and the depreciation expense is calculated when the service life of the right-of-use assets expire or the lease term expires, whichever is earlier. When the lease liabilities are reassessed, any re-measurement of the lease liabilities will be adjusted in the right-of-use assets.

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Investment property

Investment property is recognized at the acquisition cost, and the cost model is adopted for the subsequent measurement. Except for land, depreciation is made on a straight-line method based on the estimated service life, and the service life is 10 ~ 40 years.

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Intangible asset

Goodwill is generated by corporate acquisition based on the purchase method.

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Impairment of non-financial assets

1. The group estimates the recoverable amount of assets with signs of impairment on the balance sheet date. When the recoverable amount is lower than its book value, the impairment loss is recognized. The recoverable amount refers to the fair value of an asset minus disposal cost or its right-of-use value, whichever is higher. Except for goodwill, when there is no impairment or reduction in the assets recognized in the previous year, the impairment loss will be reversed, but the book value of the assets increased by the reversal of the impairment loss shall not exceed the book value of the assets if the impairment loss is not recognized after deduction of the depreciation or amortization.

2. The recoverable amount of goodwill is regularly estimated. When the recoverable amount is lower than its book value, the impairment loss is recognized. The impairment loss of goodwill impairment will not be reversed in subsequent years.

3. Goodwill is allocated to cash-generating units for impairment testing. This allocation is based on the identification of the operating departments, and goodwill is allocated to cash-generating units or groups of cash-generating units that are expected to benefit from the corporate merger that generates goodwill.

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Borrowings

Refers to short-term borrowings from a bank. The group measures their fair value minus transaction costs at the time of initial recognition, and subsequently, for any difference between the price after deducting transaction costs and the redemption value, the effective interest method is used to recognize interest expenses in profit and loss during the outstanding period according to the amortization procedure.

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Note payable and accounts payable

1. Refers to debts arising from the purchase of raw materials, commodities, or labor services on credit and notes payable due to business and non-business reasons.

2. For short-term accounts and notes payable that belong to unpaid interest, as the discounting effect is insignificant, the group uses the original invoice amount to measure the value.

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Financial liabilities measured at fair value through the income

1. Financial liabilities are designated to be measured at fair value through income at the time of initial recognition. When financial liabilities meet any of the following conditions, the group designates them as measured at fair value through income at the time of initial recognition:

2. (1) They belong to a mixed (combined) contract; or

3. (2) Inconsistent measurement or recognition can be eliminated or significantly reduced; or

4. (3) They are a tool to manage and evaluate the performance on a fair value basis in accordance with a written risk management policy.

5. The group measures their fair value at the time of initial recognition, and the relevant transaction costs are recognized in profit or loss; subsequently, they are measured at fair value, and the profit or loss is recognized in profit or loss.

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The offset of financial assets and liabilities

When there is a legally enforceable right to offset the recognized amount of financial assets and liabilities, and the intention is to settle on a net basis or to realize assets and settle liabilities at the same time, the financial assets and financial liabilities can offset each other and be expressed in the net amount on the balance sheet.

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Non-hedging derivatives and embedded derivatives

Non-hedging derivatives at the time of original recognition are measured at the fair value on the contract signing date, and recognized as financial assets or liabilities measured at fair value through income; subsequently, they are measured at fair value, and the profit or loss is recognized in profit or loss.

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Employee welfare

1. Short-term employee benefits

Short-term employee benefits are measured by the non-discounted amount expected to be paid and recognized as expenses when the related services are provided.

1. Pension

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(1) Defined allocation plan

For a defined allocation plan, the amount of pension funds to be allocated is recognized as the current pension cost on an accrual basis. Advance allocations are recognized as assets to the extent that cash is refundable or future payments are reduced.

(2) Defined benefit plan

• A. The net obligation under a defined benefit plan is calculated by discounting the future benefit amount earned by the employee in the current or past service, and the fair value of the plan asset is deducted from the present value of the defined benefit obligation on the balance sheet date. The net obligation of defined benefits is calculated annually by an actuary using the projected unit benefit method. The discount rate is determined by reference to the market yield of high-quality corporate bonds that are consistent with the currency and period of the defined benefit plan on the balance sheet date; in countries where there is no deep market for high-quality corporate bonds, the market yield of government bonds (on the balance sheet date) is used.

• B. The remeasured amount arising from a defined benefit plan is recognized in other comprehensive income in the period in which it occurs and is expressed in retained earnings.

• C. The interim pension cost is calculated based on the pension cost rate determined at the end of the previous fiscal year on the basis from the beginning until the end of the current period. If there are major market changes and major reductions, settlements, or other major one-off events after the ending date, adjustments shall be made and relevant information revealed in accordance with the aforementioned policies.

• Employee remuneration and director’s remuneration

Employee remuneration and director's remuneration are recognized as expenses and liabilities when they have legal or constructive obligations and the amount can be reasonably estimated. If there is any difference between the actual distribution amount and the estimated amount, it shall be treated as the change of accounting estimate.

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Income tax

1. Income tax expense includes current and deferred income tax. Income tax is recognized in profit or loss, except for income tax related to items included respectively in other comprehensive income or directly included in equity.

2. The group calculates the current income tax based on the tax rate enacted or substantively enacted on the balance sheet date by the country where the group operates and the taxable income is generated. The management assesses the status of income tax returns regularly with respect to the applicable income tax laws and regulations, and, where applicable, assesses income tax liabilities based on the amount of tax expected to be paid to the tax authorities. Undistributed earnings are subject to income tax in accordance with the income tax law, and the income tax expense of undistributed earnings shall be recognized in accordance with the actual distribution of earnings in the year following the year in which the earnings are generated, after the earnings distribution proposal is passed by the shareholders’ meeting.

~25~

1. Deferred income tax is recognized according to the temporary difference between the tax base of assets and liabilities and their book value in the consolidated balance sheet by using the balance sheet method. Deferred income tax liabilities arising from originally recognized goodwill are not recognized. If the deferred income tax comes from the originally recognized assets or liabilities in a transaction (excluding business merger), and the accounting profit or tax income (tax loss) is not affected at the time of the transaction, then it is not recognized. If there is a temporary difference arising from the investment in subsidiaries and affiliated enterprises, the group can control the reversal time point of the temporary difference, and the temporary difference is likely to not be reversed in the foreseeable future, then it will not be recognized. Deferred income tax is subject to the tax rate (and tax law) that has been enacted or substantively enacted on the balance sheet date and is expected to apply when the relevant deferred income tax assets are realized or the deferred income tax liabilities are settled.

2. Deferred income tax assets are recognized to the extent that the temporary differences are likely to be used to offset future taxable income, and the unrecognized and recognized deferred income tax assets are reassessed on each balance sheet date.

3. The current income tax assets and current income tax liabilities can be offset when there is a legal enforcement right to offset the recognized current income tax assets and liabilities and there is an intention to pay off on a net basis or to realize assets and liabilities at the same time. When there is a legal enforcement right to offset the current income tax assets and current income tax liabilities, and the deferred income tax assets and liabilities are generated by the same taxpayer, or different taxpayers of the same tax authority and each entity intends to pay off the assets and liabilities on a net basis or realize the assets and settle the liabilities at the same time, then the deferred income tax assets and liabilities can be offset against each other.

4. The interim income tax expense is calculated by applying the estimated annual average effective tax rate to the interim pre-tax, and relevant information is disclosed in accordance with the policies above.

5. When there is a tax rate change in the interim period, the group will recognize the effect of the change in one go in the current period of the change. For those related to income tax and items other than profit and loss, the effect of the change will be recognized in other comprehensive income or changes in equity. For those related to income tax and items recognized as income, the effect of the change will be recognized in profit and loss.

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Dividend distribution

Dividends distributed to the company's shareholders are recognized in the financial reports when the company's shareholders' meeting decides to distribute such dividends. Cash dividends are recognized as liabilities, and stock dividends are recognized as stock dividends to be distributed and transferred to common shares on the base date of issuing new shares.

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Revenue recognition

1. The group manufactures and sells 3C related products. Revenue from sales is recognized when the control of the product is transferred to the customer, that is, when the product is delivered to the buyer, the buyer has discretion over the price of the product, and the group has no outstanding performance obligation that may affect the customer's

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acceptance of the product. When the product is delivered to the designated place, the risk of obsolescence and loss has been transferred to the customer, and the customer accepts the product according to the sales contract, or if there is objective evidence to prove that all acceptance criteria have been met. Accounts receivable are recognized when the goods are delivered to the customer. Since then, the group has unconditional rights to the contract price, and the consideration can be collected from the customer after a certain period of time.

1. The terms of payment for sale transactions are usually due 30 to 90 days after the date of shipment. Since the time interval between the transfer of the promised goods or services to the customer and the customer's payment does not exceed one year, the group has not adjusted the transaction price to reflect the time value of currency.

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Government subsidy

Government subsidy is recognized at fair value when it is reasonably certain that the enterprise will comply with the conditions attached to the government subsidy and will receive the subsidy. If the nature of the government subsidy is to compensate for the expenses incurred by the group, the government subsidy shall be recognized as the current income on a systematic basis during the period of the relevant expenses.

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Operation departments

The information of the group's operation departments is reported consistently with the internal management reports provided to major operational decision-makers. Major operational decision-makers are responsible for allocating resources to operations and assessing their performance.

V. Major Sources of Uncertainty in Significant Accounting Judgments, Estimates, and Assumptions

When the group prepares the consolidated financial reports, the management has used its judgment to determine the adopted accounting policies and has made accounting estimates and assumptions based on the reasonable expectations of future events based on the situation on the balance sheet date. Significant accounting estimates and assumptions made may differ from the actual results. Historical experience and other factors will be considered for continuous evaluation and adjustment. These estimates and assumptions carry the risk of significant adjustments to the book values of assets and liabilities in the next fiscal year. Please provide a detailed description of the uncertainties of significant accounting judgments, estimates, and assumptions as follows:

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Important judgment for accounting policy adoption

Recognition of gross or net income

According to the type of transaction and its economic essence, the group determines whether the nature of its commitment to customers is the performance obligation of providing specific goods or services by itself (i.e. the group is the principal), or is the performance obligation of another party providing such goods or services (i.e. the group is the agent). When the group controls a particular product or service before transferring it to a customer, the group acts as the principal and recognizes the total amount of consideration that it is expected to be entitled to receive for the transfer of the particular product or service as income. If the group does not control the specific product or service before transferring it to customers, the group acts as an agent to arrange for another party to provide the particular product or service to customers, and any fee or commission that the group is entitled to receive via this arrangement is recognized as income.

~27~

The group determines whether it controls a particular product or service before it is transferred to a customer based on the following indicators:

1. Being responsible for fulfilling the promise of providing a particular product or service.

2. Bearing the inventory risk before transferring the particular product or service to the customer, or bearing the inventory risk after transferring the control.

3. Having the discretion to fix the price of a particular product or service.

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Important accounting estimates and assumptions

The accounting estimates made by the group are based on the reasonable expectation of future events based on the situation as of the balance sheet date. However, the actual results may be different from the estimates. For the risk of significant adjustment to book values of assets and liabilities in the next fiscal year, please refer to the following details:

Inventory evaluation

Since inventory must be priced at the lower of the cost and net realizable value, the group must use judgment and estimation to determine the net realizable value of inventory on the balance sheet date. Due to rapid changes in technology, the group assesses the amount of inventory on the balance sheet date due to normal wear and tear, obsolescence, or lack of market sales value, and reduces the inventory cost to the net realizable value. This inventory evaluation is mainly based on the estimated product demand in a specific period in the future, so significant changes may occur.

~28~

VI. Summary of Significant Accounting Items

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Cash and cash equivalents

Cash on hand and working capital Checking and demand deposit accounts Time deposit Cash equivalents - Bond repos		June 30,2020		Dec. 31,2019		June 30,2019
		$ 8,379 5,905,022 1,013,068 -		$ 3,299 4,457,424 1,739,788 -		$ 807 4,412,614 648,541 40,000
		$ 6,926,469		$ 6,200,511		$ 5,101,962

1. The credit quality of the financial institutions with which the group interacts is good, and the group interacts with several financial institutions to diversify credit risks. The probability of default is expected to be very low.

2. Please refer to note 8 for the bank deposit pledge status of the group on June 30, 2020, December 31, 2019 and June 30, 2019.

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Financial assets measured at fair value through income - Current

Item	June 30,2020	Dec. 31,2019	June 30,2019
Current items: Mandatory financial assets measured at fair value through income Open-end funds Currency and interest rate swap contracts Foreign exchange forward contracts	$ 41,611 - -	$ 77,272 - 4,239	$ 63,833 11,961 -
	$ 41,611	$ 81,511	$ 75,794

1. For the financial products held by the group from April 1 to June 30, 2020 and 2019, and from January 1 to June 30, 2020 and 2019, a net gain of NT$22,822, NT$36,723, NT$18,449 and NT$$21,834 were recognized respectively.

2. The transaction and contract information of non-hedging derivative financial assets are explained as follows:

explained as follows:
Derivative financial assets	Dec. 31,2019
	Contract amount (Nominalprincipal) (NT$ thousand)	Contractperiod
	RMB(BUY) 471,462 USD(SELL) 67,000	November 2019~March 2020
Current items: Foreign exchange forward contracts

~29~

Derivative financial assets	June 30,2019
	Contract amount (Nominalprincipal) (NT$ thousand)	Contractperiod
	TWD(BUY) 915,651 USD(SELL) 29,700	April 2019~July 2019
Current items: Currency and interest rate swap contracts

• (1) Foreign exchange forward contracts

The foreign exchange forward transactions signed by the group are US dollar forward transactions (selling US dollars to buy Taiwan dollars) to avoid the exchange rate risk of working capital, but hedge accounting is not applicable.

• (2) Currency and interest rate swap contracts

The currency and interest rate swap contracts signed by the group are to meet working capital needs. On the currency swap, the principals of the two currencies are exchanged at the same exchange rate at the beginning and end of the period, so there is no exchange rate risk. On the interest rate swap, the principals of the two currencies are exchanged at the same interest rate to avoid the interest rate risk of working capital, so there is no interest rate fluctuation risk.

1. The group has not pledged financial assets measured at fair value through income.

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Notes and accounts receivable

Notes and accounts receivable
Item Note receivable Accounts receivable Less: Allowance for impairment loss	June 30,2020	Dec. 31,2019	June 30,2019
	$ 550 2,123,758 ( 9,484)	$ 6,205 2,602,387 ( 3,914)	$ 175 2,966,393 ( 10,909)
	$ 2,114,824	$ 2,604,678	$ 2,955,659

1. The group does not hold any collateral.

2. The balance of accounts receivable and notes receivable as of June 30, 2020, December 31, 2019 and June 30, 2019 were generated from customer contracts, and the balance of notes receivable and accounts receivable of customer contracts on January 1, 2019 was NT$2,817,588.

3. Without considering the collateral or other credit enhancements held, the maximum amount of exposure that best represents the credit risk of notes and accounts receivable of the group on June 30, 2020, December 31, 2019 and June 30, 2019 is the book value of each type of notes and accounts receivable.

4. Please refer to note 12(2) for details of relevant credit risk information.

~30~

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Inventory

Inventory	Inventory
June 30,2020 Cost Allowance for valuation losses Carryingamount Raw materials $ 1,768,757 ($ 171,468) $ 1,597,289 Work in process 414,766 ( 16,129) 398,637 Finished products 520,037 ( 88,969) 431,068 $ 2,703,560 ($ 276,566) $ 2,426,994 Dec. 31,2019 Cost Allowance for valuation losses Carryingamount Raw materials $ 1,717,829 ($ 49,034) $ 1,668,795 Work in process 373,349 ( 13,822) 359,527 Finished products 554,923 ( 89,718) 465,205 $ 2,646,101 ($ 152,574) $ 2,493,527 June 30,2019 Cost Allowance for valuation losses Carryingamount Raw materials $ 1,232,611 ($ 57,653) $ 1,174,958 Work in process 605,518 ( 10,623) 594,895 Finished products 621,293 ( 78,130) 543,163 $ 2,459,422 ($ 146,406) $ 2,313,016 The cost of inventory recognized as expense losses by the group in the current period: Three Months Ended June 30, 2020 Three Months Ended June 30, 2019 Cost of inventory sold $ 4,400,737 $ 6,032,722 Inventory valuation loss (benefit from appreciation) 80,611 ( 7,065) Income from sales of scrap materials ( 6,323) ( 12,220) $ 4,475,025 $ 6,013,437 Six Months Ended June 30,2020 Six Months Ended June 30,2019 Cost of inventory sold $ 8,877,125 $ 11,222,848 Inventory valuation loss 123,992 23,383 Income from sales of scrap materials ( 14,109) ( 25,565) $ 8,987,008 $ 11,220,666			June 30,2020
		Cost	Allowance for valuation losses		Carryingamount
		$ 1,768,757 414,766 520,037	($ 171,468) ( 16,129) ( 88,969)		$ 1,597,289 398,637 431,068
		$ 2,703,560	($ 276,566)		$ 2,426,994
			Dec. 31,2019
		Cost	Allowance for valuation losses		Carryingamount
		$ 1,717,829 373,349 554,923	($ 49,034) ( 13,822) ( 89,718)		$ 1,668,795 359,527 465,205
		$ 2,646,101	($ 152,574)		$ 2,493,527
			June 30,2019
		Cost	Allowance for valuation losses		Carryingamount
		$ 1,232,611 605,518 621,293	($ 57,653) ( 10,623) ( 78,130)		$ 1,174,958 594,895 543,163
		$ 2,459,422	($ 146,406)		$ 2,313,016
	$ 4,400,737 80,611 ( 6,323)			$ 6,032,722 ( 7,065) ( 12,220)
	$ 4,475,025			$ 6,013,437
	Six Months Ended June 30,2020			Six Months Ended June 30,2019
	$ 8,877,125 123,992 ( 14,109)			$ 11,222,848 23,383 ( 25,565)
	$ 8,987,008			$ 11,220,666

During the period from January 1 to June 30, 2019, the group's net realizable value of inventories rose due to the elimination of some of the inventories whose net realizable value was lower than the cost.

~31~

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Financial assets measured at fair value through other comprehensive income - Non-current

Item	June 30,2020	Dec. 31,2019	June 30,2020
Non-current items Equity instruments Listed and OTC stocks Non-listed, OTC, or emerging stocks Total	$ 811,382 1,739,708 $ 2,551,090	$ 855,546 1,751,723	$ 752,839 1,771,222
		$ 2,607,269	$ 2,524,061

1. Please refer to note 6(18) other equity items for the items the group recognized in other comprehensive income due to changes in fair value from January 1 to June 30, 2020 and 2019.

2. None of the group's financial assets measured at fair value through other comprehensive income were pledged as of June 30, 2020, December 31, 2019 and June 30, 2019.

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Financial assets measured at after-amortization cost - Non-current

Item	June 30,2020	Dec. 31,2019	June 30,2019
Non-current items Fixed deposit of more than three months	$ 1,256	$ 1,291	$ 1,357

1. Please refer to note 8 for the pledge of financial assets measured at after-amortization cost as of June 30, 2020, December 31, 2019 and June 30, 2019.

2. Please refer to note 12(2) for details of relevant credit risk information.

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Investment by equity method

Investment by equity method
Long Time Tech. Co., Ltd.	June 30,2020 $ 803,691	Dec. 31,2019	June 30,2019
		$ 838,555	$ 867,416

1. The group's investment by the equity method in 2020 and from January 1 to June 30, 2019 was based on the evaluation in the financial reports compiled by the affiliated enterprise which was not reviewed by a certified public accountant during the same period.

2. The share of operating results of the group’s individual non-significant affiliated companies is summarized as follows:

is summarized as follows:
Current net profit (loss) of continuing business units Total comprehensive income in the current period Current net profit (loss) of continuing business units Total comprehensive income in the current period	April 1 to June 30,2020 $ 1,058 $ 1,058 January1 to June 30,2020 ($ 34,864) ($ 34,864)	April 1 to June 30,2019
		($ 11,931)
		($ 11,931)
		January1 to June 30,2019
		($ 22,175)
		($ 22,175)

1. The group's subsidiaries Pan Global Holding Co., Ltd. and Tekcon Electronics Corporation hold 22.26% of the equity of Long Time Tech. Co., Ltd.. But they do not include Long Time Tech as consolidated entity because they don’t acquire the control of the company.

~32~

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Property, plant, and equipment

Six months ended Cost Cumulative depreciation January 1, 2020 Addition Disposal Transfer Depreciation expenses Net exchange difference June 30 June 30, 2020 Cost Cumulative depreciation Six months ended Cost Cumulative depreciation January 1, 2020 Addition Disposal Re-classification Depreciation expenses Net exchange difference June 30 June 30, 2019 Cost Cumulative depreciation	Land	Buildings		Equipment	Others	Others	Unfinished construction and equipment to be accepted		Total
	$ 24,394 -	$ 642,881 ( 341,713)		$ 4,457,094 ( 3,344,344)	$ 671,793 ( 532,306)		$ 104,729 - $ 104,729		$ 5,900,891 ( 4,218,363)
	$ 24,394	$ 301,168		$ 1,112,750	$ 139,487				$ 1,682,528
	$ 24,394 - - - - ( 307)	$ 301,168 4,644 - ( 68,191) ( 7,638) ( 13,832)		$ 1,112,750 175.251 ( 14,833) 20,274 ( 120,671) ( 39,741)	$ 139,487 13,762 ( 988) - ( 15,746) ( 3959)		$ 104,729 17,438 - ( 23,861) - ( 3,585)		$ 1,682,528 211,095 ( 15,821) ( 71,778) ( 144,055) ( 61,424)
	$ 24,087	$ 216,151		$ 1,133,030	$ 132,556		$ 94,721		$ 1,600,545
	$ 24,087 -	$ 546,548 ( 330,397)		$ 4,415,748 ( 3,282,718)	$ 656,836 ( 524,280)		$ 94,721 -		$ 5,737,940 ( 4,137,395)
	$ 24,087	$ 216,151		$ 1,133,030	$ 132,556		$ 94,721		$ 1,600,545
	Land	Buildings		Equipment	Others $ 708,948 ( 567,212)		Unfinished construction and equipment to be accepted		Total
	$ 23,985 -	$ 652,981 ( 327,751)		$ 4,577,981 ( 3,308,648)			$ 92,062 -		$ 6,055,957 ( 4,203,611)
	$ 23,985 $ 23,985 - - - - 464	$ 325,230 $ 325,230 849 - - ( 13,138) 4,043		$ 1,269,333	$ 141,736		$ 92,062		$ 1,852,346
				$ 1,269,333 75,956 ( 13,930) 4,142 ( 104,833) 20,114	$ 141,736 9,475 ( 1,058) ( 2,496) ( 18,829) 1,861		$ 92,062 27,136 ( 1,022) ( 12,929) - 3,084		$ 1,852,346 113,416 ( 16,010) ( 11,283) ( 172,800) 29,566
	$ 24,449	$ 316,984		$ 1,214,782	$ 130,689		$ 108,331		$ 1,795,235
	$ 24,449	$ 661,913 ( 344,929)		$ 4,684,460 ( 3,469,678)	$ 723,376 ( 592,687)		$ 108,331 -		$ 6,202,529 ( 4,407,294)
	$ 24449	$ 316,984		$ 1,214,782		$ 130,689	$ 108,331		$ 1,795,235

Please refer to note 8 for details of the group's pledged property, plant and equipment.

~33~

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Lease transaction - Lessee

1. The underlying assets of the group include land, plants and buildings, and the terms of the lease contracts usually range from 1 to 5 years. The lease contracts are negotiated individually and contain various terms and conditions. There are no other restrictions except that the leased assets may not be used as a loan guarantee.

2. The book value and recognized depreciation expense information of the right-of-use assets are as follows:

are as follows:
Land Houses Land Houses Land Houses	June 30,2020	Dec. 31,2019		June 30,2019
	Carryingamount	Carryingamount		Carryingamount
	$ 72,381 246,743	$	102,399 291,423	$ 107,109 351,673
	$ 319,124	$	393,822	$ 458,782
	April 1 to June 30,

1. The increase in the group's right-of-use assets from January 1 to June 30, 2020 and 2019 were NT$0 and NT$73,650 respectively.

2. The information on profit and loss items related to lease contracts is as follows:

Items affecting current profit and loss Interest expenses on lease liabilities Expenses of short-term lease contracts Items affecting current profit and loss Interest expenses on lease liabilities Expenses of short-term lease contracts	April 1 to June 30,2020	April 1 to June 30,2019
	$ 1,824 3,365 January1 to June 30,2020	$ 2,554 2,890 January1 to June 30,2019
	$ 3,814 8,685	$ 4,710 10,205

1. The total cash outflow from the leases of the group from January 1 to June 30, 2020 and 2019 were NT$31,771 and NT$22,229, respectively.

~34~

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Investment property

Investment property
Six months ended Cost Cumulative depreciation and impairment January 1, 2020 Transfer Depreciation expenses Net exchange difference June 30 June 30, 2020 Cost Cumulative depreciation and impairment Six months ended Cost Cumulative depreciation and impairment January 1, 2020 Transfer Depreciation expenses Net exchange difference June 30 June 30, 2019 Cost Cumulative depreciation and impairment		Land $ 92,496 - $ 92,496 $ 92,496 23,745 - ( 4778) $ 111,463 $ 111,463 - $ 111,463 Land $ 61,954 - $ 61,954 $ 61,954 31,277 - 476 $ 93,707 $ 93,707 - $ 93,707	Buildings $ 153,299 ( 94,774) $ 58,525 $ 58,525 69,735 ( 3,090) ( 2,845) $ 122,325 $ 217,139 ( 94,814) $ 122,325 Buildings $ 194,789 ( 133,821) $ 60,968 $ 60,968 - ( 1,611) 1,647 $ 61,004 $ 198,185 ( 137,181) $ 61,004	Total
				$ 245,795 ( 94,774)
				$ 151,021
				$ 151,021 93,480 ( 3,090) ( 7,623) $ 233,788
				$ 328,602 ( 94,814) $ 233,788 Total
				$ 256,743 ( 133,821) $ 122,922 $ 122,922 31,277 ( 1,611) 2,123 $ 154,711
				$ 291,892 ( 137,181) $ 154,711

~35~

1. Rental income and direct operating expenses of investment property:

Rental income of investment property Direct operating expenses of investment property that Generates rental income in the current period Rental income of investment property Direct operating expenses of investment property that Generates rental income in the current period	April 1 to June 30,2020 April 1 to June 30,2019
	$ 8,550 $ 9,277 $ 1,514 $ 804 January1 to June 30,2020 January1 to June 30,202190
	$ 16,449 $ 18,129 $ 3,090 $ 1,611

1. The fair value of the investment property held by the group as of June 30, 2020, December 31, 2019 and June 30, 2019 were NT$505,789, NT$402,984, and NT$261,757 respectively, which were obtained from the evaluation of government announcement information, and the results belong to the third level of fair value.

2. Please refer to note 8 for details of the group's pledged investment property.

3. The Group signed a letter of intent on a property transaction in October 2018, intending to dispose of the land and plant of the Yangmei factory. Therefore, a book value of NT$101,079 was converted into non-current assets to be sold. The assets were sold in March 2019, and a disposal gain of NT$145,112 was recognized.

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Intangible assets - Goodwill

Intangible assets-Goodwill
Balance at the beginning of the period Net exchange difference Ending balance	June 30,2020	Dec. 31,2019	June 30,2019
	$ 37,142 ( 1,398)	$ 38,255 ( 1,113)	$ 38,255 434
	$ 35,744	$ 37,142	$ 38,689

The above-mentioned intangible assets - goodwill was mainly generated by the group's merger with East Honest Holdings Limited by the acquisition method in 2012, and the indirect acquisition of its reinvested mainland China subsidiary Honghuasheng Precision Electronics (Yantai) Co., Ltd.

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Short-term borrowings

Electronics (Yantai) Co., Ltd. Short-term borrowings
Nature of the borrowings	June 30,2020	Interest Rate	Collateral
	$ 2,020,766	0.68%~1.4% Interest Rate	None. Collateral
	Dec. 31,2019
	$ 1,573,950	2.22%~2.7% Interest Rate	None. Collateral
	June 30,2019
	$ 1,302,740

~36~

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Other payables

Other payables
Dividends payables Salary, bonus, and employee remuneration payable Repair expenses payable Utility fees payable Consumables payable Equipment payment payable Processing fee payable Rent payable Others	June 30,2020 $ 518,346 374,631 50,320 31,301 51,278 51,408 26,155 42,205 176,446 $ 1,322,090	Dec. 31,2019	June 30,2019
		$ - 453,383 130,735 24,768 58,380 30,733 17,317 43,573 190,249	$ 570,181 435,023 71,985 21,398 61,498 22,616 20,625 57,330 222,268
		$ 949,138	$ 1,482,924

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Pension

1. Measures for defined retirement benefits

2. (1) The company and Tekcon Electronics Corporation (hereinafter referred to as Tekcon) have in place measures for defined benefit retirement in accordance with the provisions of the Labor Standards Act, which applies to the service years of all regular employees before the implementation of the “Labor Pension Act” on July 1, 2005, and the subsequent service years of employees who choose to continue to apply the Labor Standards Act after the implementation of the “Labor Pension Act.” If an employee is eligible for retirement, the pension payment shall be based on the service years and the average monthly salary of the six months before retirement. Two base numbers shall be given for each full year of service within 15 years (inclusive), and one base number shall be given for each full year of service over 15 years, but the cumulative maximum is 45 base numbers. The company and Tekcon respectively allocate 6% and 2% of the total salary to the retirement fund every month which is deposited with the trust department of the Bank of Taiwan in the name of the Labor Pension Fund Supervisory Committee. In addition, before the end of each year, the company estimates the balance of the labor retirement reserve account mentioned in the preceding paragraph. If the balance is insufficient to pay the pension amount of the workers who meet the retirement conditions estimated in the next year according to the above calculation, the company will withdraw the balance before the end of March of the next year.

3. (2) From April 1 to June 30, 2020 and 2019, and from January 1 to June 30, 2020 and 2019, the group recognized pension costs of NT$544, NT$511, NT$1,106, and NT$1,018, respectively according to the above-mentioned pension measures.

4. (3) The group is expected to pay NT$3,932 to the retirement plan in 2021.

5. Measures for defined retirement allocation

6. (1) Since July 1, 2005, the company and Tekcon have formulated measures for defined retirement allocation in accordance with the “Labor Pension Act” which applies to employees of Taiwan nationality. For employees of the company and Tekcon who choose to apply the labor retirement pension system of the “Labor Pension Act”, 6% of their monthly salary is allocated as labor pension to the employee's personal account at the Labor Insurance Bureau. The payment of labor pension shall be based on the balance of the employee's individual pension account and the number of accumulated benefits and shall be paid in the form of monthly pension or lump sum

~37~

pension payment.

• (2) The subsidiaries listed in the consolidated statements do not have their own retirement measures. Pan-International Indsutrial Corp., P.I.E. Industrial Berhad and its subsidiaries in mainland China shall allocate a certain percentage of their total salary to the mandatory provident fund in accordance with the local government's mandatory regulations, and be deposited in the independent account of each employee, and the pension of each employee is managed and arranged by the government. The companies mentioned above have no further obligations except for the monthly allocation.

• (3) From April 1 to June 30, 2020 and 2019, and from January 1 to June 30, 2020 and 2019, the pension costs recognized by the group in accordance with the pension measures above were NT$75,412, NT$42,378, NT$99,671, and NT$87,323, respectively.

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Share capital

As of June 30, 2020, the company's rated number of shares was 600,000,000 (including 30,000,000 of stock option certificates or the number of shares available to corporate bonds with stock option). The number of shares issued and outstanding was 518,346,282, with a par value of NT$10 per share.

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Capital surplus

In accordance with the Company Act, the premium from the issuance of shares above par value and the capital reserve from the receipt of gifts may be used to make up for the losses. When the company has no accumulated loss, new shares or cash shall be issued or paid in proportion to the original shares of the shareholders. In addition, according to the relevant provisions of the Securities and Exchange Act, when the capital reserve above is appropriated to capital, its total amount each year shall not exceed 10% of the paid-in capital. The company shall not use the capital reserve to make up for the capital loss unless the earnings reserve is still insufficient to make up for the capital loss.

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Retained earnings

1. According to the articles of association of the company, if there is any surplus in the annual final accounts, in addition to paying all taxes according to law, the company shall first make up for the losses of previous years, and then set aside 10% as the legal reserve. If there is still a surplus, it shall be retained or distributed according to the resolution of the shareholders' meeting.

2. The company is in a growth stage at present, and the dividend distribution policy shall be based on the company's current and future investment environment, capital demand, domestic and foreign competition status, capital budget and other factors, while taking into account the shareholders' interests and the company's long-term financial planning. The shareholders' dividend shall be allocated from the cumulative distributable earnings and shall not be less than 15% of the distributable earnings of the current year, and the cash dividend ratio shall not be less than 10% of the total dividend.

3. The legal reserve shall not be used except to make up for the company's losses and issuing new shares or paying cash in proportion to the original number of shares held by the shareholders. However, if new shares or cash are issued, the amount of such reserve shall exceed 25% of the paid-in capital.

~38~

1. When the company distributes earnings, it is required by laws and regulations to set aside a special reserve for the debit balance of other equity items on the balance sheet date of the current year before distribution. When the debit balance of other equity items is subsequently reversed, the amount of reversal can be included in the earnings available for distribution.

2. The company’s shareholders' meeting respectively passed the resolution on earnings distribution of 2019 and 2018 on June 12, 2020 and June 14, 2019 as follows:

	2019 2018 Amount Dividend per share(NT$) Amount Dividend per share(NT$) Legal reserve $ 102,932 $ 118,538 Special reserve 429,069 386,307 Cash dividends 518,346 $ 1.00 570,181 $ 1.10 $ 1,050,347 $ 1,075,026 Other items of equity Financial assets at FVTOCI Adjustment for currencyconversion Total January 1, 2020 ($ 250,358) ($ 1,061,916) ($ 1,312,274) Unrealized profit or loss of financial products - Group ( 36,075) - ( 36,075) Currency conversion difference - Group - ( 271,778) ( 271,778) June 30, 2020 ($ 286,433) ($ 1,333,694) ($ 1,620,127) Financial assets at FVTOCI Adjustment for currencyconversion Total January 1, 2019 ($ 100,067) ($ 783,138) ($ 883,205) Unrealized profit or loss of financial products - Group ( 295,538) - ( 295,538) Currency conversion difference - Group - 103,807 103,807 June 30, 2019 ($ 395,605) ($ 679,331) ($ 1,074,936) Non-controlling interests 2020 2019 January 1 $ 1,619,122 $ 1,580,757 Share of non-controlling equity: Net profit (loss) of the period ( 27,880) 20,679 Conversion difference from the conversion of financial statements of a foreign operation ( 90,572) 21,570 Cash dividend payment ( 63,557) ( 65,800) June 30 $ 1,437,113 $ 1,557,206 Operating revenue April 1 to June 30,2020 April 1 to June 30,2019 Revenue from customer contracts $ 4,936,199 $ 6,650,300 January1 to June 30,2020 January1 to June 30,2019 Revenue from customer contracts $ 9,649,068 $ 12,155,545	2019	2019	2019	2019	2019	2018	2018	2018	2018	2018
		Amount $ 102,932 429,069 518,346 $ 1,050,347			Dividend per share(NT$)		Amount				Dividend per share(NT$)
							$ 118,538 386,307 570,181 $ 1,075,026				$ 1.10 Total
				($ 250,358) ( 36,075) -		($ 1,061,916) - ( 271,778)				($ ( (	1,312,274) 36,075) 271,778)
				($ 286,433)		($ 1,333,694)				($	1,620,127)
				Financial assets at FVTOCI		Adjustment for currencyconversion					Total
				($ 100,067) ( 295,538) -		($			783,138) - 103,807	($ (	883,205) 295,538) 103,807
				($ 395,605)		($			679,331)	($	1,074,936)
				2020				$ (		2019
			$ 1,619,122 ( 27,880) ( 90,572) ( 63,557)							1,580,757 20,679 21,570 65,800) 1,557,206
			$ 1,437,113						$
				April 1 to June 30,2020					April 1 to June 30,2019
				$ 4,936,199					$ 6,650,300 January1 to June 30,2019
				January1 to June 30,2020
				$ 9,649,068					$ 12,155,545

The revenue of the group is derived from goods and services transferred at a certain time point. Please refer to note 14 for details of revenue.

~39~

Contractual liabilities

The contractual liabilities related to the contractual income recognized by the group are as follows:

follows:
Contractual liabilities	June 30,2020	December 31,2020	June 30,2019	January1,2019
	$ 233,693	$ 263,111	$ 411,451	$ 399,612

Recognized income of contract liabilities at the beginning of the period:

Opening balance of contract liabilities recognized as income in the current period Other income Rental income Dividend income Subsidy income Other income - Other Rental income Dividend income Subsidy income Other income - Other Other gains and losses Net foreign currency conversion gain (loss) Net gains of financial assets and liabilities measured at fair value through the income Gains (losses) from the disposal of property, plant and equipment Others Gains from the disposal of non-current assets to be sold Net foreign currency conversion gain Net gains of financial assets and liabilities measured at fair value through the income Gains (losses) from the disposal of property, plant and equipment Others	January1 to June 30,2020	January1 to June 30,2019	January1 to June 30,2019
	$ 70,652	$ 166,516
	April 1 to June 30,2020	April 1 to June 30,2019
	11,678 568 9,614 39,155	11,582 193 4,248 4,607
	$ 61,015 January1 to June 30,2020	$ 20,630
		January1 to June 30,2019
	$ 21,521 1,235 10,351 40,679	$ 22,138 364 7,943 6,042
	$ 73,786 April 1 to June 30,2020 ($ 13,667) 22,822 ( 4,719) 52 $ 4,488 January 1 to June 30, 2020 $ - 60,550 18,449 ( 4,719) ( 1,252) $ 73,028	$ 36,487
			April 1 to June 30,2019

~40~

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Employee benefit, depreciation and amortization expenses

Bynature		April 1 to June 30,2020		April 1 to June 30,2019
Employee benefits expense Salary expenses Labor and national health insurance expenses Pension expenses Other HR expenses Depreciation expenses Amortization expenses Bynature		$ 552,140 11,422 75,956 38,256 $ 677,774		$ 595,504 19,244 42,889 43,931 $ 701,568 $ 107,157 $ 3,733 January1 to June 30,2019
		$ 93,792
		$ 3,292
		January1 to June 30,2020
Employee benefits expense Salary expenses Labor and national health insurance expenses Pension expenses Other HR expenses Depreciation expenses Amortization expenses		$ 970,406 28,809 100,777 65,538		$ 1,093,132 38,222 88,341 78,771
	$ 1,165,530 $ 188,774 $ 6,504	$ 1,165,530		$ 1,298,466
		$ 188,774		$ 213,987 $ 7,650

1. According to the articles of association of the company, if the company has any profit in the year (the so-called profit refers to the gains before deducting the distribution of employee remuneration and directors’ remuneration), it shall allocate no less than 5% of it as employee remuneration and no more than 0.5% as directors’ remuneration, which shall be distributed after the special resolution of the board of directors, and shall be reported to the shareholders' meeting. However, if the company still has a cumulative loss, it shall reserve the amount of compensation in advance.

2. The estimated amounts of employee remuneration of the company from April 1 to June 30, 2020 and 2019, and from January 1 to June 30, 2020 and 2019 were NT$8,475, NT$18,477, NT$10,378 and NT$26,685 respectively; the estimated amounts of directors' remuneration were all NT$0, and the amounts above were recorded in the salary expense account.

The period from January 1 to June 30, 2020 is based on the profit status as of the current period and is estimated according to the proportion specified in the articles of association of the company.

According to the resolution of the board of directors, the amount of employee remuneration and director's remuneration in 2019 were NT$60,754 and NT$6,075 respectively, which will be paid in cash. The amount of employee remuneration and director's remuneration recognized in the financial report of 2019 were NT$60,754 and NT$0, respectively. The difference from the amount determined by the board of directors was NT$6,075, mainly due to the difference in the proportion estimated, and has been adjusted to the profit and loss in the year of 2020. As of June 30, 2020, the remuneration of employees and directors for the year of 2019 had not yet been paid, and were listed in "other payables.”

The above information on the remuneration of employees and directors approved by the board of directors of the company can be obtained on MOPS.

~41~

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Financial costs

Financial costs	Financial costs	Financial costs
April 1 to June 30,2020 April 1 to June 30,2019 Interest expenses on bank loans $ 13,227 $ 12,789 Interest expenses on lease liabilities 1,824 2,554 15,051 15,343 January1 to June 30,2020 January1 to June 30,2019 Interest expenses on bank loans $ 23,117 $ 31,961 Interest expenses on lease liabilities 3,814 4,710 $ 26,931 $ 36,671 Income tax 1. Income tax expense Components of income tax expenses: April 1 to June 30,2020 April 1 to June 30,2019 Income Tax of the current period Income tax arising from current income $ 91,702 $ 82,163 Levies on undistributed earnings - 5,608 Income tax (over)estimates of previous years ( 23,458) ( 814) Total income of the current period 68,244 86,957 Deferred income tax: The original value and reversal of temporary differences ( 11,345) 29,705 Income tax expense $ 56,899 $ 116,662 January1 to June 30,2020 January1 to June 30,2019 Income Tax of the current period Income tax arising from current income $ 140,736 $ 111,466 Levies on undistributed earnings - 5,608 Income tax (over)estimates of previous years ( 25,541) 9,780 Total income of the current period 115,195 126,854 Deferred income tax: The original value and reversal of temporary differences ( 21,815) 15,069 Income tax expense $ 93,380 $ 141,923			April 1 to June 30,2019
			$ 12,789 2,554
			15,343
			January1 to June 30,2019
			$ 31,961 4,710
			$ 36,671
			April 1 to June 30,2019
		$ (
	$ 56,899 January1 to June 30,2020 $ 140,736 - ( 25,541) 115,195 ( 21,815) $ 93,380
		$ 111,466 5,608 9,780 126,854 15,069 $ 141,923

1. The company's income tax return was approved by the tax collection authority up to 2018.

~42~

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Earnings per share (EPS)

arnings per share (EPS)
Basic earnings per share Net profit of the current period attributable to the common shareholders of the parent company Diluted earnings per share Net profit of the current period attributable to the common shareholders of the parent company Effect of potentially dilutive common shares: Employee remuneration Net profit of the current period attributable to the common shareholders of the parent company plus the effect of potential common shares Basic earnings per share Net profit of the current period attributable to the common shareholders of the parent company Diluted earnings per share Net profit of the current period attributable to the common shareholders of the parent company Effect of potentially dilutive common shares: Employee remuneration Net profit of the current period attributable to the common shareholders of the parent company plus the effect of potential common shares Basic earnings per share Net profit of the current period attributable to the common shareholders of the parent company Diluted earnings per share Net profit of the current period attributable to the common shareholders of the parent company Effect of potentially dilutive common shares: Employee remuneration Net profit of the current period attributable to the common shareholders of the parent company plus the effect of potential common shares	April 1 to June 30,2020
	After-tax amount	The weighted average number of outstanding shares (1000 shares)	Earnings per share(NT$)
	$ 155,495	$ 518,346	$ 0.30
	155,495 -	518,346 572	$ 0.30
	$ 155,495	518,918
	April 1 to June 30,2019
	After-tax amount	The weighted average number of outstanding shares (1000 shares)	Earnings per share(NT$)
	$ 326,768	$ 518,346	$ 0.63
	326,768 -	518,346 1,128	$ 0.63
	$ 326,768	519,474
	January1 to June 30,2020
	After-tax amount	The weighted average number of outstanding shares (1000 shares)	Earnings per share(NT$)
	$ 174,038	518,346	$ 0.34
	174,038 -	518,346 2,320	$ 0.33
	$ 174,038	$ 520,666

~43~

January1 to June 30,2019 After-tax amount The weighted average number of outstanding shares (1000 shares) Earnings per share (NT$) Basic earnings per share Net profit of the current period attributable to the common shareholders of the parent company $ 442,294 $ 518,346 $ 0.85 Diluted earnings per share Net profit of the current period attributable to the common shareholders of the parent company 442,294 518,346 Effect of potentially dilutive common shares: Employee remuneration - 2,568 Net profit of the current period attributable to the common shareholders of the parent company plus the effect of potential common shares $ 442,294 $ 520,914 $ 0.85 Supplementary information on cash flow 1. Investment activities with only partial cash payment: January1 to June 30,2020 January1 to June 30,2019 Purchase of property, plant and equipment $ 211,095 $ 113,416 Add: equipment payable at the beginning of the period 30,733 61,037 Less: equipment payable at the end of the period ( 51,408) ( 22,616) Effect on foreign currency exchange differences ( 1,253) 1,026 Amount paid in the period $ 189,167 $ 152,863 2. Financing activities that do not affect cash flow: January1 to June 30,2020 January1 to June 30,2019 Cash dividend declared $ 518,346 $ 570,181	January1 to June 30,2019	January1 to June 30,2019	January1 to June 30,2019	January1 to June 30,2019
	After-tax amount $ 442,294	The weighted average number of outstanding shares (1000 shares) $ 518,346		Earnings per share (NT$) $ 0.85
	442,294 -		518,346 2,568	$ 0.85
	$ 442,294	$	520,914
			January1 to	June 30,2019
			$ (	113,416 61,037 22,616) 1,026 152,863
			$
			January1 to	June 30,2019
			$	570,181

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Changes in liabilities from financing activities

January 1 Changes in financing cash flow Effect of exchange rate changes Other non-cash changes June 30			2020	2020
	Short-term borrowings $ 1,573,950 470,040 ( 23,224) - $ 2,020,766	Lease liabilities $ 295,287 ( 23,565) ( 7,330) ( 12,721)		Total liabilities from financing activities $ 1,869,237 446,475 ( 30,554) ( 12,721) $ 2,272,437
		$ 251,671

~44~

January 1 Effect of initial application of IFRS 16 Changes in financing cash flow Effect of exchange rate changes Other non-cash changes June 30		2019	2019
	Short-term borrowings	Lease liabilities $ - 311,719 ( 12,141) 3,318 51,126 $ 354,022	Total liabilities from financing activities
	$ 2,158,910 -		$ 2,158,910 311,719
	( 878,149) 21,979 -		( 890,290) 25,297 51,126
	$ 1,302,740		$ 1,656,762

VII. Related Party Transactions

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Related party’s name and relationship

Related party’s name and relationship
Related Party Name	Relationship with thegroup
Hon Hai Precision Industry Co., Ltd. and subsidiaries (Hon Hai and subsidiaries) Sharp Corporation and subsidiaries (Sharp and subsidiaries) Foxconn Technology Co., Ltd. and subsidiaries General Interface Solution Limited Cyber TAN Technology, Inc and Subsidiaries	With significant influence on the group Other related parties Other related parties Other related parties Other related parties

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Major transactions with related parties

1. Operating revenue

Operating revenue	Operating revenue
With significant influence on the group - Hon Hai and subsidiaries Other related parties With significant influence on the group - Hon Hai and subsidiaries Other related parties		April 1 to June 30,2020	April 1 to June 30,2019 $ 2,912,090 78,686
		$ 2,031,749 433,944
		$ 2,465,693	$ 2,990,776
		January1 to June 30,2020	January1 to June 30,2019
		$ 4,061,773 482,451	$ 5,446,913 150,051
		$ 4,544,224	$ 5,596,964

Except that there is no similar transaction to follow, and the price and credit period are determined by both parties through negotiation, the price sold by the group to the related parties above is similar to that of general customers; the collection period of the group to related parties is about 60 ~ 120 days.

~45~

2. Purchase

urchase
With significant influence on the group - Hon Hai and subsidiaries Other related parties - Sharp and subsidiaries - Foxconn Technology and subsidiaries With significant influence on the group - Hon Hai and subsidiaries Other related parties - Sharp and subsidiaries - Foxconn Technology and subsidiaries	April 1 to June 30,2020 $ 637,854 932,642 661,149 $ 2,231,645 January1 to June 30,2020 $ 1,195,525 2,343,004 692,023 $ 4,230,552	April 1 to June 30,2019
		$ 707,291 1,381,272 98 $ 2,088,661 January1 to June 30,2019 $ 1,305,192 2,614,487 273 $ 3,919,952

The price and payment terms are determined by both parties through negotiation. The payment period of the group to related parties is about 30 ~ 90 days.

3. Receivables from related parties

Receivables from related parties
Accounts receivable With significant influence on the group - Hon Hai and subsidiaries Other related parties Less: transfer to other receivables Allowance for loss		June 30,2020	December 31,2019	June 30,2019
		$ 2,490,211 705,938	$ 3,527,505 567,104	$ 3,665,888 433,400
		3,196,149 - ( 1,229)	4,094,609 ( 244) ( 806) $ 4,093,559	4,099,288 ( 2,058) ( 801)
		$ 3,194,920		$ 4,096,429

The accounts receivable from related parties mainly come from sales and purchase on behalf others transactions, which are due 2 ~ 4 months after the sale date. The receivables are not secured and not interest bearing. Part of the accounts receivable are transferred to other accounts receivable due to being overdue for more than three months, and the aging of other receivables is all less than one year.

4. Other receivables

receivables is all less than one year. Other receivables
June 30,2020 Other accounts receivables from related parties: With significant influence on the group - Hon Hai and subsidiaries $ 3,904 Other related parties - Other related parties 105 $ 4,009	June 30,2020	Dec. 31,2019	June 30,2019
		$ 8,680 173	$ 8,761 -
	$ 4,009	$ 8,853	$ 8,761

Other accounts receivables from related parties are mainly due to payment on behalf of others and overdue accounts receivable.

~46~

5. Accounts payables from related parties

Accounts payable: With significant influence on the group - Hon Hai and subsidiaries Other related parties - Sharp and subsidiaries - Foxconn Technology and subsidiaries	June 30,2020	Dec. 31,2019	June 30,2019
	$ 1,175,425 9,437 644,014	$ 1,508,993 679,798 2	$ 1,430,491 234,616 72
	$ 1,828,876	$ 2,188,793	$ 1,665,179

Accounts payable to related parties mainly comes from purchasing and purchase on behalf of others, and there is no interest attached to the accounts payable.

6. Lease transaction - Lessee

• (1) The group leases the plant from the group which has a significant impact on the group. The lease term is 5 years. The rent is paid at the end of each month.

• (2) Acquisition of right-of-use assets:

Due to the application of IFRS 16, the group increased the right-of-use assets by NT$188,789 on January 1, 2019.

(3) Lease liabilities:

• A. Ending balance

(3) Lease liabilities: A. Ending balance	(3) Lease liabilities: A. Ending balance
With significant influence on the group B. Interest expenses With significant influence on the group With significant influence on the group Compensation of key management		June 30,2020 Dec. 31, $ 127,843 $ April 1 to June 30,2020 $ 913 January1 to June 30,2020 $ 1,909 personnel April 1 to June 30,2020	June 30,2020	Dec. 31,		2019 147,387	June 30,2019
			$ 127,843	$			$ 173,006
						April 1 to June 30,2019 $ 1,240 January1 to June 30,2019 $ 2,546 April 1 to June 30,2019
Short-term employee benefits Post-employment benefits Total Short-term employee benefits Post-employment benefits Total
		$ 1,353 60			$	1,314 60
		$ 1,413			$ $	1,374
		January 1 to June 30, 2020 $ 4,568 120				January 1 to June 30, 2019 4,450 120
		$ 4,688			$	4,570

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Compensation of key management personnel

~47~

VIII. Pledged Assets

The details of the guarantees provided with the group's assets are as follows:

Asset item		Book value		Guaranteepurpose
	June 30,2020	Dec. 31,2019	June 30,2019
Other current assets - Pledge deposit Financial assets measured at after- amortization cost - Pledge time deposit Property, plant, and equipment Investment property	$ 728 1,256 9,898 10,971 $ 22,853	$ 763 1,291 10,472 11,487 $ 24,013	$ 769 1,357 9,745 17,070 $ 28,941	Issuing of letter of credit and customs deposit Customs deposit Guarantee mortgage for bank line overdraft (note) Guarantee mortgage for a bank line

Note: As of June 30, 2020, the land, houses, and building above pledged as a guarantee for the overdraft facilities of financial institutions have been paid off, but the pledge has not been canceled.

IX. Significant Contingent Liabilities and Unrecognized Commitments

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Contingent matters

The group has no contingent liabilities for material legal claims arising from daily business activities.

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Commitments

None.

X. Major Disaster Losses

None.

XI. Significant Subsequent Events

None.

XII. Others

• (I) As COVID-19 broke out in the beginning of 2020, since March 18, 2020, the government of Malaysia implemented an action control order and ordered all private enterprises to stop their operations to prevent the spread of the pandemic. However, the restriction on local operations is gradually relaxed as the situation improves, and all the operations resumed in the second quarter. Due to the pandemic, some subsidiaries have been granted various fee reductions or subsidies from the local government, so the overall operation of the group has not been significantly affected.

~48~

(II) Capital management

The group's capital management objectives are to ensure the group's sustained operation, maintain the optimal capital structure, reduce the cost of capital, and provide returns to shareholders. In order to maintain or adjust the capital structure, the group may adjust the number of dividends paid to shareholders, issue new shares, or sell assets to reduce liabilities. To monitor its capital, the group uses the net debt ratio which is calculated by dividing net debt by total net worth. Net debt is calculated as total borrowings (including the “current and non-current borrowings” reported in the consolidated balance sheet) less cash and cash equivalents. The total net value is calculated as "equity" as shown in the consolidated balance sheet less total intangible assets.

The group's strategy for 2020 is the same as that in 2019, both of which are committed to maintaining the net debt ratio below 70%.

(III) Financial instrument

1. Types of financial instruments

The book values of the group's financial assets (including cash and cash equivalents, notes receivable, accounts receivable (including those from related parties), other receivables and financial assets measured at after-amortization cost according to IFRS 9 as of June 30, 2020, December 31, 2019 and June 30, 2019 were NT$12,294,400, NT$13,049,341 and NT$12,223,605, respectively. The book values of financial liabilities (including short-term loans, accounts payable (including those to related parties) and other receivables measured at after-amortization cost were NT$7,964,448, NT$8,019,707 and NT$7,410,667, respectively. The book value of lease liabilities as of June 30, 2020, December 31, 2019 and June 30, 2019 were NT$251,671, NT$295,287 and NT$354,022, respectively. Please refer to notes 6(2) and (5) for the book values of financial assets measured at fair value through the income and financial assets measured at fair value through other comprehensive income.

2. Risk management Policy

(1) Types of risks

The group adopts a comprehensive financial risk management and control system to clearly identify, measure and control various financial risks of the group, including market risk (including exchange rate risk, interest rate risk and price risk), credit risk, and liquidity risk.

(2) Management objectives

• A. All the risks above can be eliminated by internal control or operation process, except that market risk is controlled by external factors. Therefore, each risk can be reduced to zero through management.

• B. In terms of market risk, the objective is to optimize the overall position through rigorous analysis, proposal, implementation and process, with due consideration of the overall external trend, internal operating conditions and the actual impact of market fluctuations.

• C. The group's overall risk management policy focuses on the unpredictability of the financial market and seeks to reduce potential adverse effects on the group's financial position and financial performance.

~49~

(3) Management system

  - A. Risk management shall be carried out by the Finance Department of the group in accordance with the policies approved by the board of directors. It is responsible for identifying, assessing and avoiding financial risks through close cooperation with group operating units.

  - B. The board of directors has written principles for overall risk management, and also provides written policies for specific areas and matters, such as exchange rate risk, interest rate risk, credit risk, use of derivatives and non-derivative financial instruments, and investment of surplus working capital.

1. Nature and extent of significant financial risks

2. (1) Market risk

Exchange rate risk

• A. Nature: The group is a multinational electronic OEM company, and most of the exchange rate risks in its business activities come from:

• a. As the posting times of non-functional foreign currency accounts receivable and accounts payable are different, the exchange rate of the functional currency is different, thus resulting in an exchange rate risk. Because the amount of assets and liabilities after offsetting is not large, the amount of profit or loss is not large. (Note: The group has offices in many countries around the world, so there is an exchange rate risk in a variety of different currencies, but the main ones are the US dollar, RMB, and Malaysian ringgit.)

• b. In addition to the commercial transactions (business activities) on the abovementioned income, the assets and liabilities recognized on the balance sheet, and the net investment in foreign operations also have exchange rate risks.

• B. Management

• a. For such risks, the group has established a policy that requires companies within the group to manage the exchange rate risk relative to their functional currencies.

• b. The exchange rate risk of each functional currency against the reporting currency of the consolidated statements is managed by the group’s finance office.

~50~

C. Extent

The group's business involves a number of non-functional currencies (New Taiwan dollar is the functional currency of the company and some subsidiaries, and RMB and Malaysian ringgit are the functional currencies of some subsidiaries). Therefore, the group is affected by exchange rate fluctuations. The information on foreign currency assets and liabilities with significant exchange rate fluctuations is as follows:

as follows:
Foreign currency (thousand) (Foreign currency: functional foreign currency) Financial assets Monetary item USD: NTD $ 165,735 USD: RMB 54,299 USD: MYR 47,929 Foreign operations USD: NTD 302,260 Financial liabilities Monetary item USD: NTD 147,233 USD: MYR 79,040 USD: RMB 9,804 Foreign currency (thousand) (foreign currency: functional foreign currency) Financial assets Monetary item USD: NTD $ 153,855 USD: RMB 110,500 USD: MYR 49,907 NTD: RMB 8,035 Foreign operations USD: NTD 301,059 Financial liabilities Monetary item USD: NTD 177,341 USD: MYR 11,771 USD: RMB 15,193 Foreign currency (thousand) (foreign currency: functional foreign currency) Financial assets Monetary item USD: NTD $ 146,758 USD: RMB 85,861 USD: MYR 47,919 NTD: RMB 178,517 Foreign operations USD: NTD 288,276 Financial liabilities			June 30,2020
	Foreign currency (thousand)	Exchange rate	Book value (NTD)	Sensitivityanalysis
				Range of change	Impact on profit and loss
	$ 165,735 54,299 47,929 302,260 147,233 79,040 9,804				$ 49,107 16,094 14,201 43,625 23,420 2,906
		Exchange rate	Book value (NTD)	Sensitivity	analysis
				Range of change	Impact on profit and loss
		29.98 7.0729 4.0866 0.2323 29.98 29.98 4.0866 7.0729	$ 4,612,573 3,364,674 1,496,212 8,035 9,025,735 5,316,683 352,895 462,620 June 30,2019	1% 1% 1% 1% 1% 1% 1%	$ 46,126 33,647 14,962 80 53,167 3,529 4,626
		Exchange rate	Book value (NTD)	Sensitivityanalysis
				Range of change	Impact on profit and loss
		31.06 6.8747 4.1134 0.2211 31.06	$ 4,558,303 2,669,372 1,448,364 178,517 8,953,866	1% 1% 1% 1%	$ 45,583 26,694 14,484 1,785

~51~

Monetary item
USD: NTD	131,217	31.06	4,075,600	1%	40,756
USD: MYR	28,940	4.1134	898,876	1%	8,989,
USD: RMB	10,264	6.8747	319,102	1%	3,191
NTD: USD	178,517	0.0322	178,517	1%	1,785

D. Nature

The total amount of exchange gains and losses (including realized and unrealized) recognized in the group's monetary items due to exchange rate fluctuations from April 1 to June 30, 2020 and 2019 and from January 1 to June 30, 2020 and 2019 were (NT$13,667), NT$59,709, NT$60,550 and NT$28,634, respectively.

Price risk

• A. The group's equity instruments exposed to price risk are financial assets measured at fair value through other comprehensive income and equity investments available for sale. In order to manage the price risk of equity instrument investment, the group diversifies its portfolio in accordance with the limits set by the group.

• B. The group mainly invests in equity instruments issued by domestic and foreign companies. The prices of these equity instruments will be affected by the uncertainty of the future values of the investment objects. If the prices of these equity instruments rose or fell by 1%, with all other factors remain unchanged, the impact on other comprehensive income of equity investment classified as fair value through other comprehensive income would increase or decrease by NT$25,511 and NT$25,240, respectively from January 1 to June 30, 2020 and 2019.

Cash flow and fair value interest rate risk

The interest rate risk of the group comes from short-term borrowings. Borrowings at fixed interest rates expose the group to an interest rate risk at fair value, but after assessment, the group has no significant interest rate risk.

(2) Credit risk

• A. The credit risk of the group is the risk of financial loss due to the failure of customers or counterparties of financial instrument transactions to fulfill their contractual obligations, which mainly comes from the inability of the counterparties to repay the accounts receivable in accordance with the collection conditions, and the contractual cash flow classified as debt instrument investment measured at after-amortization cost.

• B. In accordance with the internal credit policy, management and credit risk analysis shall be carried out on each operating entity within the group and each new customer before proposing terms and conditions for payment and delivery. Internal risk control is to evaluate the credit quality of customers by considering their financial status, past experience, and other factors. The limits of individual risks are determined by the board of directors based on internal or external ratings, and the use of credit lines is regularly monitored.

• C. The basis for the group to judge whether the credit risk of financial instruments has increased significantly since the original recognition is as follows:

~52~

• (A) When the contract payment is overdue for more than 60 days according to the agreed payment terms, it is deemed that the credit risk of the financial asset has increased significantly since the original recognition.

• (B) If a bond investment traded on the OTC market is rated as investment-grade by any external rating agency on the balance sheet date, the financial asset is considered to have a low credit risk.

• D. When the investment target with an independent credit rating is adjusted downward by two levels, the group judges that the credit risk of the investment subject has increased significantly.

• E. When the contract payment is overdue for more than 360 days according to the agreed payment terms, the group deems its a breach of contract.

• F. The group classifies notes receivable and accounts receivable of customers according to the characteristics of customer rating, and estimates the expected credit loss based on the loss rate method.

• G. The indicators used by the group to determine the credit impairment of debt instrument investment are as follows:

• (A) The issuer encounters major financial difficulties, or the possibility of going into bankruptcy or other financial restructuring is greatly increased;

• (B) The issuer makes the active market of the financial asset disappear due to its financial difficulties;

• (C) The issuer delays or fails to pay the interest or principal;

• (D) Adverse changes in national or regional economic conditions leading to issuer default.

• H. The aging analysis of notes receivable and accounts receivable (including those of related parties) is as follows:

Not Past Due Less than 90 days 90 ~ 180 days More than 180 days	June 30,2020	Dec. 31,2019	June 30,2019
	$ 5,196,668 113,114 1,755 8,920	$ 6,551,220 145,506 263 5,968	$ 6,759,765 298,563 1,397 4,073 $ 7,063,798
	$ 5,320,457	$ 6,702,957

The above is an aging analysis based on the number of overdue days.

• I. Other receivables (including those of related parties)

• Other receivables of the group are mainly tax refund receivable, payment receivable and overdue accounts receivable. There is no doubt of material nonperformance or repayment. Therefore, the allowance for loss is measured according to the expected 12 months credit loss amount. The allowance for loss recognized by the group on June 30, 2020, December 31, 2019 and June 30, 2019 were NT$0, NT$0, and NT$1, respectively.

• J. The group classifies the accounts receivable of customers according to the characteristics of credit rating standards and for future-looking considerations adjusts the loss rate established according to the historical and current information of a specific period to estimate the allowance loss of notes receivable and accounts receivable. The loss rate methods of June 30, 2020, December 31, 2019 and June 30, 2019 are as follows:

~53~

June 30,2020		Group1	Group2			Group3		Group4	Total
		0.04% $ 4,742,051 $ 1,812 0.03% $ 5,897,743 $ 1,769 0.03% $ 6,144,853 $ 1,841	0.04% $ 462,256 $ 177 0.03% $ 769,776		0.09% $ 109 $ - 0.07% $ 51 $ - 0.07% $ 174 $ -	0.09%		0.10%~4.31% $ 112,148 $ 4,831 0.10%~4.65% $ 34,263 $ 1,596 0.10%~1.00% $ 234,706 $ 235	$ 5,316,564 $ 6,820 $ 6,701,833 $ 3,596 $ 7,054,367 $ 2,278
Expected loss rate Total Book value Allowance for loss Dec. 31,2019
Expected loss rate Total Book value Allowance for loss June 30,2019
			$ 231 0.03% $ 674,634
Expected loss rate Total Book value Allowance for loss
			$ 202

In addition, the group's accounts receivable on June 30, 2020, December 31, 2019 and June 30, 2019 were NT$3,893 and NT$1,124 and NT$9,431, respectively. The impairment losses were recognized as NT$3,893, NT$1,124 and NT$9,431, respectively.

• Group 1: Rated A by Standard & Poor's, Fitch or Moody's, or no external agency rating, and rated A according to the group's credit standards.

• Group 2: Rated BBB by Standard & Poor's or Fitch, or Baa by Moody's, or no external agency rating, and rated B or C according to the group's credit standards.

• Group 3: Rated BB+ or below by Standard & Poor's or Fitch, or Ba1 or below by Moody's.

• Group 4: No external agency rating, and non-A, B, or C rated customers according to the group's credit standards.

• K. The simplified statement of changes in the allowance for loss of accounts receivable and other receivables (including those of related parties) of the group is as follows:

is as follows:
January 1 Provision of expected credit loss Write-off Effect on foreign currency exchange differences June 30 January 1 Reversal of expected credit loss Effect on foreign currency exchange differences June 30	2020
	$ 4,720 12,154 ( 5,972) ( 189)
	$ 10,713
	2019
	$ 17,272 ( 5,973) 411
	$ 11,710

• L. All the group’s debt instrument investments measured at after-amortization cost as of June 30, 2020, December 31, 2019 and June 30, 2019 had a low credit risk. Therefore, the book value is measured according to the expected credit loss in 12 months after the balance sheet date.

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(3) Liquidity risk

• A. the cash flow forecast is carried out by each operating entity within the group and summarized by the group’s finance department. The group’s finance department monitors the forecast of the group's liquidity funds demand to ensure that it has sufficient funds to meet operational needs, and maintains sufficient unspent loan commitments at all times so that the group will not exceed the relevant borrowing limits or violate the terms. These forecasts take into account the group's debt financing plan, compliance with debt terms, and compliance with the financial ratios in the internal balance sheet and external regulatory requirements, such as foreign exchange control.

• B. When the remaining cash held by the group exceeds the requirement for the management of working capital, the finance department will invest the remaining funds in interest-bearing demand deposits, time deposits, money market deposits and securities, and the instruments selected to have appropriate maturities or sufficient liquidity to meet the forecast above and provide sufficient liquidity, and it is expected that cash flow will be generated immediately for the management of liquidity risk.

• C. The following table shows the grouping of the group's non-derivative financial liabilities according to their maturity dates. The non-derivative financial liabilities are analyzed according to the remaining period from the balance sheet date to the contract maturity date. The amount of contractual cash flow disclosed in the table below is the undiscounted amount.

June 30, 2020 Non-derivative financial liabilities:	Less than 1 year	1 ~ 2years	2 ~ 5years
	$ 82,729 Less than 1 year	$ 72,941 1 ~ 2years	$ 111,634 2 ~ 5years
Lease liabilities Dec. 31, 2019 Non-derivative financial liabilities:
	$ 89,512 Less than 1 year	$ 76,571 1 ~ 2years	$ 148,568 2 ~ 5years
Lease liabilities June 30, 2019 Non-derivative financial liabilities:

• (IV) Fair value information

• The levels of evaluation techniques used to measure the fair value of financial and nonfinancial instruments are defined as follows:

  • Level 1: The quoted price (unadjusted) is available to the enterprise in an active market for the same assets or liabilities on the measurement date. An active market refers to a market in which assets or liabilities are traded in sufficient frequency

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and quantity to provide pricing information on an ongoing basis. The fair value of the listed and OTC stocks and beneficiary certificates invested by the group belongs to this level.

• Level 2: The input value of assets or liabilities are directly or indirectly observable, except those in Level 1. The fair value of the derivative instruments invested by the group belongs to this level.

• Level 3: The input value of assets or liabilities are unobservable. The equity instruments invested by the group without an active market belong to this level.

• Financial instruments not measured at fair value

The book values of the group's financial instruments not measured at fair value (including cash and cash equivalents, financial assets measured at after-amortization cost, notes receivable, accounts receivable, other receivables, other current assets, notes payable, accounts payable, other receivables, lease liabilities and other current liabilities) are reasonable approximations of their fair values.

1. For the group’s financial and non-financial instruments measured at fair value, the group classifies them according to the nature, characteristics, risk, and fair value level of the assets and liabilities. The relevant information is as follows:

2. (1) The information about the group’s classification of its assets and liabilities by their nature is as follows:

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June 30, 2020 Financial assets: Repetitive fair value Financial assets at FVTPL - Open-end securities Financial assets at FVTOCI - Equity securities December 31, 2019 Financial assets: Repetitive fair value Financial assets at FVTPL - Open-end securities (1) Foreign exchange forward contracts Financial assets at FVTOCI - Equity securities June 30, 2020 Financial assets: Repetitive fair value Financial assets at FVTPL - Open-end securities (1) Foreign exchange forward contracts Financial assets at FVTOCI - Equity securities	Level 1	Level 2 $ - $ - Level 2 $ - 4,239 $ 4,239 $ - Level 2 $ - 11,961 $ 11,961 $ -	Level 3		Total
	$ 41,611 $ 811,382 Level 1		$ - $ 1,739,708		$ 41,611 $ 2,551,090
			Level 3		Total
	$ 77,272 -		$ - - $ - $ 1,751,723		$ 77,272 4,239 $ 81,511 $ 2,607,269
	$ 77,272 $ 855,546 Level 1
			Level 3		Total
	$ 63,833 -		$ - - $ - $ 1,771,222		$ 63,833 11,961 $ 75,794 $ 2,524,061
	$ 63,833 $ 752,839

(2) The methods and assumptions used by the group to measure fair value are as follows:

• A. If the group adopts a market quotation as the input value of fair value (i.e. level 1), the characteristics of the instruments are as follows:

Listed and OTC stocks Open-end funds Market quotation Closing price Net value

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• B. Except for the above-mentioned financial instruments with active markets, the fair values of other financial instruments are obtained through evaluation techniques or reference to the quotations of counterparties. The fair value obtained through the evaluation techniques can be calculated by referring to the current fair value of other financial instruments with similar conditions and characteristics, or the value can be obtained through other evaluation techniques, including using models to calculate market information available on the consolidated balance sheet date.

• C. When evaluating non-standardized and less complex financial instruments, such as debt instruments and options without an active market, the group adopts the evaluation techniques widely used by market participants. The parameters used in the evaluation model of such financial instruments are usually market observable information.

• D. The evaluation of derivative financial instruments is based on evaluation models widely accepted by market users, such as the discount method and the option pricing model. Foreign exchange forward contracts are usually evaluated according to the current forward exchange rate. Structured interest rate derivative financial instruments are based on the appropriate option pricing model (such as the Black-Scholes model) or other evaluation methods, such as Monte Carlo simulation.

• E. The output of the evaluation model is the estimated value, and the evaluation technique may not reflect all the factors related to the group's holding of financial instruments and non-financial instruments. Therefore, the estimated value of the evaluation model will be adjusted according to additional parameters, such as model risk or liquidity risk. According to the group's fair value evaluation model management policies and related control procedures, the management believes that the evaluation adjustment is appropriate and necessary to properly express the fair value of financial instruments and non-financial instruments in the consolidated balance sheet. The price information and parameters used in the evaluation process have been carefully evaluated and appropriately adjusted according to current market conditions.

• There was no transfer between levels 1 and 2 between January 1 to June 30, 2020 and 2019.

• The following table shows the changes in level 3 instruments from January 1 to June 30, 2020 and 2019.

2020 and 2019.
January 1 Income recognized in other comprehensive income Effect on foreign currency exchange differences June 30		Equitysecurities
		January1,	January1, $ 1,801,761 ( 49,806) 19,267 $ 1,771,222
		$ 1,751,723 7,720 ( 19,735)
		$ 1,739,708

1. For the fair value of level 3 instruments of the group, the investment management department is responsible for the independent verification of the fair value of such financial instruments in the evaluation process. The evaluation results are close to the market status through independent sources of information, and the data sources are independent, reliable, consistent with other resources, and represent executable prices. The evaluation model is calibrated regularly, backtracked, and updated for the input values and information required by the evaluation model, and any other necessary fair

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value adjustments are made to ensure that the evaluation results are reasonable.

In addition, the investment management department formulates the fair value evaluation policies, evaluation procedures, and confirmation of financial instruments in accordance with the relevant international financial reporting standards.

1. The quantitative information about the significant unobservable input value of the evaluation model used for level 3 fair value measurement and the sensitivity analysis of the significant unobservable input value changes are as follows:

Non-derivative equity instruments: Non-listed and non- OTC stocks Non-listed and non- OTC stocks Non-derivative equity instruments: Non-listed and non- OTC stocks Non-listed and non- OTC stocks Non-derivative equity instruments: Non-listed and non- OTC stocks Non-listed and non- OTC stocks	Fair value on June 30,2020	Evaluation techniques	Significant unobservable input value	Interval (weighted average)	Relationship between input value and fair value
	$ 1,670,314 69,394 Fair value on December 31, 2019	Net asset value method Market method Evaluation techniques	Lack of market liquidity discount Price–to-book ratio Lack of market liquidity discount Significant unobservable input value	22% 1.30 20% Interval (weighted average)	The higher the market liquidity discount, the lower the fair value. The higher the multiplier, the higher the fair value. The higher the market liquidity discount, the lower the fair value. Relationship between input value and fair value
	$ 1,682,403 69,320 Fair value on June 30,2019	Net asset value method Market method Evaluation techniques	Lack of market liquidity discount Price–to-book ratio Lack of market liquidity discount Significant unobservable input value	25% 1.28 20% Interval (weighted average)	The higher the market liquidity discount, the lower the fair value. The higher the multiplier, the higher the fair value. The higher the market liquidity discount, the lower the fair value. Relationship between input value and fair value
	$ 1,709,875 61,347	Net asset value method Market method	Lack of market liquidity discount Price–to-book ratio Lack of market liquidity discount	27% 0.85 20%	The higher the market liquidity discount, the lower the fair value. The higher the multiplier, the higher the fair value. The higher the market liquidity discount, the lower the fair value.

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1. The group carefully selects the evaluation model and evaluation parameters; however, different evaluation models or parameters may lead to different evaluation results. For financial assets and financial liabilities classified as level 3, if the evaluation parameters change, the impact on current profit and loss or other comprehensive income is as follows:

Financial assets	Period Input value	Change	Recognized in other comprehensive income	Recognized in other comprehensive income
			Favorable change	Unfavorable change
Equity instruments Equity instruments Financial assets	June 30, 2020 Lack of market liquidity discount June 30, 2020 Price–to-book ratio Period Input value	±1% ±1% Change
			$ 4,793 ($ 4,793) $ 532 ($ 532) Recognized in other comprehensive income
			Favorable change	Unfavorable change
Equity instruments Equity instruments	December 31, 2020Lack of market liquidity discount December 31, 2020 Price–to-book ratio	±1% ±1%
			$ 5,443 $ 540	($ 5,443) ($ 540)

Financial assets	Period	Input value	Change	Recognized in other comprehensive income	Recognized in other comprehensive income
				Favorable change	Unfavorable change
Equity instruments Equity instruments	June 30, 2019 June 30, 2019	Lack of market liquidity discount Price–to-book ratio
				$ 6,392 ($ 6,392) $ 546 ($ 546)

XIII. Additional Disclosures

(I) Information about significant transactions

1. Loans to others: Please refer to Table 1.

2. Endorsements/guarantees provided: Please refer to Table 2.

3. Marketable securities held at the end of the period (excluding investment in subsidiaries, affiliated enterprises and jointly controlled entities): Please refer to Table 3.

4. The cumulative amount of buying or selling the same securities reaches NT$300 million or more, or 20% of the paid-in capital: The company and the investee companies do not have this situation.

5. The cumulative amount of property purchase reaches NT$300 million or more, or 20% of the paid-in capital: The company and the investee companies do not have this situation.

6. The cumulative amount of property disposal reaches NT$300 million or more, or 20% of the paid-in capital: The company and the investee companies do not have this situation.

7. Total purchases from or sales to related parties amounting to at least NT$100 million or 20% of the paid-in capital: Please refer to Table 4.

8. Total accounts receivable from related parties amounting to at least NT$100 million or 20% of the paid-in capital: Please refer to Table 5.

9. Engagement in derivatives trading: Please refer to note 6(2).

10. Relationship, significant transactions and their amounts between the company and its

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subsidiaries: Please refer to Table 6.

• (II) Information about investees

The name and location of the investee company and other relevant information (excluding mainland China investee companies): Please refer to Table 7.

• (III) Information on investments in mainland China

• Basic information: Please refer to Table 8.

• Major transactions directly with investee companies in the mainland China or indirectly through a third regional enterprise: Please refer to Tables 4, 5 and 6.

• (IV) Information on major shareholders

Information of major shareholders: Please refer to Table 9.

XIV. Operation Department Information

(I) General information

The main businesses of the group are the development, manufacturing and sales of electronic components such as electronic signal cables, connectors, electronic signal cables with connectors, printed circuit boards and precision molds, and computer peripheral products. The operation decision-makers also operate various businesses from the perspective of product categories and develop businesses according to different market attributes and demands. At present, the group is mainly divided into the "Electronic Components Segment" and "Consumer Electronics and Computer Peripherals Segment", which are also the segments to be reported.

The information of each operating department is compiled in accordance with the accounting policies of the group. The main operational decision-makers of the group mainly use the income and pre-tax profit and loss of each operating department as indicators for performance evaluation and resource allocation.

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(II) Segments Information

Information on the reportable departments as provided to major operational decision makers is as follows:

is as follows:
April 1 to June 30,2020	Electronic Components		Consumer Electronics and Computer Peripherals	Total
Segment Revenue Segment profit and loss April 1 to June 30,2019	$ 3,543,880 $ 66,410 Electronic Components		$ 1,392,319	$ 4,936,199 $ 96,614 Total
			$ 30,204
			Consumer Electronics and Computer Peripherals
Segment Revenue Segment profit and loss January1 to June 30,2020	$ 4,508,444 $ 358,035 Electronic Components		$ 2,141,856	$ 6,650,300 $ 466,508 Total
			$ 108,473
			Consumer Electronics and Computer Peripherals
Segment Revenue Segment profit and loss January1 to June 30,2019	$ 7,027,447 $ 157,883 Electronic Components		$ 2,621,621	$ 9,649,068 $ 168,356 Total
			$ 10,473
			Consumer Electronics and Computer Peripherals
Segment Revenue Segment profit and loss	$ 8,178,306 $ 375,362		$ 3,977,239	$ 12,155,545 $ 484,318
			$ 108,956

Note: Since the measured amount of the assets of the operating department is not provided to the operation decision-maker, the measured amount of the assets should be disclosed as zero.

• (III) Information on the adjustment to the income and profit and loss of the segments to be reported

Since the income of the segments to be reported is the income of the enterprise, there is no need to adjust it. In addition, the adjustments to the profit and loss of the segments to be reported and to the pre-tax profit and loss of continuing operation segments are as follows:

Income	April 1 to June 30,2020	April 1 to June 30,2019
Profit and loss of the segments to be reported Other profit and loss Pre-tax profit and loss of continuing operation segments Income	$ 96,614 97,561 $ 194,175	$ 466,508 ( 1,855) $ 464,653 January1 to June 30,2019
	January1 to June 30,2020
Profit and loss of the segments to be reported Other profit and loss Pre-tax profit and loss of continuing operation segments	$ 168,356 71,182	$ 484,318 120,578 $ 604,896
	$ 239,538

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Pan-International Industrial Corp. and Subsidiaries Loans to others

For the period ended June 30, 2020

Table 1

Unit: NTD thousand (unless otherwise noted)

Serial No. (note 1)	Loan extending company Borrower Dealing items (note 2)	Whether a related party Maximum amount of the period (note 3) Ending balance (note 8) Yes $ 333,905 $ 325,930 Yes 200,000 -	Whether a related party Maximum amount of the period (note 3) Ending balance (note 8) Yes $ 333,905 $ 325,930 Yes 200,000 -	Transaction Amounts	Interest Rate Loan nature (note 4) Business Transaction Amounts (note 5)	Reason for short-term financing (note 6) - Operating turnover - Operating turnover	Provision for allowance for loss for bad debt	Collateral Name Value None. None. None. None.	Loans and limits for individual entities (note 7)	Total loan limit (note 7) Remarks
								Name None. None.
0 0	Pan- International Industrial Corp. Inc. Pan Global Holding Co., Ltd. Other receivables - related parties Pan- International Industrial Corp. Inc. Tekcon Electronics Corporation Other receivables - related parties		333,905 $ 325,930 200,000 -	$ 296,300	1.00% Short- term financing $ - - Short- term financing		None. None.		$ 1,030,665 1,030,665	$ 4,122,660 4,122,660

• Note 1: The explanation of the number column is as follows:

• (1). Fill in 0 for the issuer.

• (2). Investee companies are numbered in sequence in each company type starting from Arabic numeral 1.

• Note 2: This field is to be filled in with accounts receivable from affiliated enterprises, receivables from related parties, transactions with shareholders, prepayments, provisional payments, etc. if nature is a loan to others.

Note 3: The maximum balance of loans to others in the current year.

• Note 4: The loan nature of the fund shall be filled in if it is a business transaction or if there is a need for short-term financing.

Note 5: Where the nature of the loan is a business transaction, the amount of the business transaction shall be filled in. The business transaction amount refers to the number of business transactions between the lending company and the borrowing object in the most recent year.

Note 6: If the nature of the loan is necessary for short-term financing, the reason for the loan and the purpose of the loan borrower shall be specified, such as loan repayment, purchase of equipment, business turnover, etc.

Note 7: Total loan amount: For companies or firms with the need for short-term financing, the total amount of loans shall not exceed 40% of the company's net worth.

The loan limit for individual entities: For companies or firms with the need for short-term financing, the number of loans to each individual entity shall not exceed 10% of the company's net worth.

Note 8: If a public company submits its lending to the board of directors’ meeting for resolution one by one in accordance with paragraph 1, Article 14 of the Regulations Governing Loaning of Funds and Making of Endorsements/ Guarantees by Public Companies, the amount of the resolution of the board of directors’ meeting shall be included in the announced balance to disclose the risks it bears before the funds are lent out; if the funds are repaid later, the balance after repayment shall be disclosed to reflect the adjustment of risks. If the board of directors’ meeting of a public company authorizes the chairman of the board to extend loans in several trenches or recycle the loan balance within a certain limit in a year in accordance with paragraph 2, Article 14 of the Regulations, the loan limit approved by the board of directors’ meeting shall still be used as the balance for the public announcement and declaration. Although the funds will be repaid later, other loans may still be extended again, so the loan limit approved by the board of directors’ meeting shall still be used as the balance for the public announcement and declaration.

Table 1 page 1

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Pan-International Industrial Corp. and Subsidiaries Endorsement/guarantee provided For the period ended June 30, 2020

Table 2

Unit: NTD thousand (unless otherwise noted)

Table 2								Unit: NTD thousand (unless otherwise noted)
Serial No. (note 1) Name of company of the endorsement/ guarantee	Guaranteed Party		Endorsement/ guarantee limit for a single enterprise (note 3)	Maximum endorsement/ guarantee balance of the period (note 4)	Ending balance (note 5)	Transaction Amounts (note 6) Amount of endorsement/guar antee backed by assets	Ratio of the cumulative endorsement/ guarantee amount to the net value in the latest financial statement	Endorsement/ guarantee limit (note 3) Endorsement/ guarantee from the parent company to subsidiary (note 7) Endorsement/ guarantee from subsidiary to parent company (note 7) Endorsement/ guarantee to mainland China (note 7) Remarks
	Company name	Relation (note 2)
0 Pan-International Industrial Corp. Inc. 1 P.I.E INDUSTRIAL BERHAD 1 P.I.E INDUSTRIAL BERHAD	Pan- International Industrial Corp. Inc. PAN- INTERNAT IONAL ELECTRON ICS (M) SDN. BHD. PAN- INTERNAT IONAL WIRE & CABLE (M) SDN. BHD.	1 2 2	$ 5,153,326 1,433,803 1,433,803	$ 10,000 1,175,512 34,840	$ 10,000 $ 10,000 $ - 1,154,883 58,754 - 34,578 2,075 -		0.10 11.21 0.34	$ 10,306,651 N N N (note 8) 2,867,606 Y N N 2,867,606 Y N N

Note 1: The explanation of the number column is as follows:

• (1). Fill in 0 for the issuer.

• (2). Investee companies are numbered in sequence in each company type starting from Arabic numeral 1.

• Note 2: There are 7 types of relations between the endorsement guarantor and the endorsement guaranteed as follows; simply mark the type:

• (1). A company with business relations.

• (2). A company with more than 50% of its voting shares is directly or indirectly held by the company.

• (3). A company directly or indirectly holding more than 50% of the voting shares of the company.

• (4). A company with more than 90% of its voting shares is directly or indirectly held by the company.

• (5). A company with mutual guarantees in accordance with the contract which is in the same industry or a joint constructor to contract the project.

• (6). A company that has been endorsed/guaranteed by all the contributing shareholders in accordance with their shareholding ratios due to a joint investment relationship.

• (7). Joint and several guarantees for the performance of a contract for the sale of pre-sold houses among companies in the same industry in accordance with the provisions of the Consumer Protection Act.

• Note 3: The total amount of external endorsements/guarantees shall not exceed 100% of the company's net value, and the limit of endorsements/guarantees for a single enterprise shall not exceed 50% of the company's net value.

The total amount of endorsements/guarantees provided by the company and its subsidiaries to others shall not exceed 100% of the company’s net value; the total amount of

endorsements/guarantees by the company and its subsidiaries to a single enterprise shall not exceed 50% of the company's net value. The total amount of

• endorsements/guarantees provided by the company to a foreign subsidiary that the company, directly and indirectly, holds 100% of its voting shares shall not exceed 50% of the parent company's net worth, and the limit for an individual entity shall not exceed 20% of the parent company's net worth.

Note 4: The maximum balance of endorsements/guarantees for others in the current year.

• Note 5: The amount approved by the board of directors’ meeting shall be filled in. However, if the board of directors’ meeting authorizes the chairman of the board to decide in accordance with paragraph 8, Article 12 of the Regulations Governing Loaning of Funds and Making of Endorsements/ Guarantees by Public Companies, it refers to the amount decided by the chairman of the board.

• Note 6: The actual amount of the company's disbursement within the range of using the balance of the endorsements/guarantees shall be entered.

Note 7: Y is required only for an endorsement/guarantee of a listed parent company to a subsidiary, an endorsement/guarantee of a subsidiary to a listed parent company, and an endorsement/guarantee to mainland China. Note 8: The company’s guarantee for its own tariff guarantee.

Table 2 page 1

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Pan-International Industrial Corp. and Subsidiaries Marketable securities held at period end (excluding investment in subsidiaries, associates and jointly controlled entities). June 30, 2020

Table 3

Unit: NTD thousand (unless otherwise noted)

March 31, 2020

				March 31,2020
HoldingCompanyName Pan-International Electronics Inc. Pan-International Industrial Corp. Inc. Pan-International Industrial Corp. Inc. P.I.E. INDUSTRIAL BERHAD P.I.E. INDUSTRIAL BERHAD P.I.E. INDUSTRIAL BERHAD Yen Yung International Investment Co., Ltd Yen Yung International Investment Co., Ltd Pan Global Holding Co., Ltd. Pan Global Holding Co., Ltd. Pan Global Holding Co., Ltd.	Type of marketable securities	Name of marketable securities Relationship with the Holding Company	Financial Statement Account	Number of shares/beneficiary certificates Carryingamount Shares Ratio 94,385,987 $ 745,649 0.97 84,378 173 0.42 12,831,500 69,221 5.23 22,658 81 - 9,161,470 33,839 0.04 253,873 7,691 0.59 8,320,602 65,733 0.09 3,400,000 - 2.73 1,781,979 - 8.22 1,750 38,210 17.50 22,519,097 1,632,104 16.87	Fair value Remarks
	Common share Common share Common share Open-end funds Open-end funds Open-end funds Common share Common share Common share Common share Common share	Innolux Corporation None. WK Technology Fund None. Syntrend Creative Park Co., Ltd. The company’s major shareholder is the a major shareholder of Hon Hai Precision. Eastspring Investments Islamic Income Fund None. Affin Hwang Aiiman Money Market Fund I None. Affin Hwang USD Cash Fund None. Innolux Corporation None. Lico Technology Corporation None. Uer Holdings Corporation The investment company is evaluated by the equity method; the same as the company. FSK Holdings Limited The investment company is evaluated by the equity method; the same as the company. Cybertan Technology Corp. The investment company is evaluated by the equity method; the same as the company.	Financial assets measured at fair value through other comprehensive income - Non-current Financial assets measured at fair value through other comprehensive income - Non-current Financial assets measured at fair value through other comprehensive income - Non-current Financial assets measured at fair value through income - Current Financial assets measured at fair value through income - Current Financial assets measured at fair value through income - Current Financial assets measured at fair value through other comprehensive income - Non-current Financial assets measured at fair value through income - Non-current Financial assets measured at fair value through income - Non-current Financial assets measured at fair value through other comprehensive income - Non-current Financial assets measured at fair value through other comprehensive income - Non-current		$ 745,649 173 69,221 81 33,839 7,691 65,733 - - 38,210 1,632,104

Table 3 page 1

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Pan-International Industrial Corp. and Subsidiaries Total purchases from or sales to related parties amounting to at least NT$100 million or 20% of the paid-in capital on June 30, 2020

Table 4

Unit: NTD thousand (unless otherwise noted)

Buyer/Seller Related Party Pan-International Industrial Corp. Inc. Pan-International Electronics (USA) Inc. Pan-International Industrial Corp. Inc. Sharp (Taiwan) Electronics Corporation Pan-International Industrial Corp. Inc. Hongfujin Precision Electronics (Chongqing) Co., Ltd. Pan-International Industrial Corp. Inc. Hongfujin Precision Electronics (Yantai) Co., Ltd. Pan-International Industrial Corp. Inc. Hongfujin Precision Industry (Wuhan) Co., Ltd. Pan-International Industrial Corp. Inc. Futaijing Precision Electronics (Yantai) Co., Ltd. Pan-International Industrial Corp. Inc. FIH (Hongkong) Mobil Limited Pan-International Industrial Corp. Inc. Hon Hai Precision Industry Co., Ltd. Pan-International Industrial Corp. Inc. Honghuasheng Precision Electronics (Yantai) Co., Ltd. Pan-International Industrial Corp. Inc. Dongguan Pan-International Precision Electronics Co., Ltd. Pan-International Industrial Corp. Inc. Foxconn Interconnect Technology Limited Pan-International Industrial Corp. Inc. Sharp Corporation New Ocean Precision Component (Jiangxi) Co., Ltd. Foxconn Interconnect Technology Limited P.I.E. Industrial Berhad (PIB) Foxconn Technology Co., Ltd P.I.E. Industrial Berhad (PIB) Hon Hai Precision Industry Co., Ltd. Tekcon Electronics Corporation Foxconn Interconnect Technology Limited	Relation Subsidiary of the company’s indirect reinvestment Other related parties Subsidiary of the indirect reinvestment of Hon Hai Precision Industry Co., Ltd. Subsidiary of the indirect reinvestment of Hon Hai Precision Industry Co., Ltd. Subsidiary of the indirect reinvestment of Hon Hai Precision Industry Co., Ltd. Subsidiary of the indirect reinvestment of Hon Hai Precision Industry Co., Ltd. Subsidiary of the indirect reinvestment of Hon Hai Precision Industry Co., Ltd. A company that evaluates the company by the equity method Subsidiary of the company’s indirect reinvestment Subsidiary of the company’s indirect reinvestment Subsidiary of the indirect reinvestment of Hon Hai Precision Industry Co., Ltd. Other related parties Subsidiary of the indirect reinvestment of Hon Hai Precision Industry Co., Ltd. Other related parties A company that evaluates the company by the equity method Subsidiary of the indirect reinvestment of Hon Hai Precision Industry Co., Ltd.		Transact	ion Details	Creditperiod Monthly settlement 120 days T/T 30 days monthly settlement Monthly settlement 90 days T/T Monthly settlement 90 days T/T Monthly settlement 90 days T/T 90 days monthly settlement Monthly settlement 90 days T/T Monthly settlement 90 days T/T Monthly settlement 90 days Monthly settlement 90 days Monthly settlement 90 days 30 days after invoice day Monthly settlement 60 days Monthly settlement 90 days Monthly settlement 90 days Monthly settlement 120 days	Differences in transaction ter general transactions an	ms from those of d reasons	Note/Accounts Receivable (Payable)	Note/Accounts Receivable (Payable)	Remarks
		Purchase/Sale Sales Sales Sales Sales Sales Sales Sales Sales Purchase Purchase Purchase Purchase Sales Purchase Purchase Purchase	Amount Percentage of total purchase (sale) $ 160,447 2 333,783 5 103,869 2 743,717 11 167,047 2 1,395,495 21 337,894 5 109,464 2 1,420,074 22 474,946 7 822,971 13 2,342,526 36 704,380 97 692,010 46 139,088 9 108,582 50 Table 4 page 1	Percentage of total purchase (sale)		Unit Price No sale to other customers with no basis for comparison No sale to other customers with no basis for comparison No sale to other customers with no basis for comparison No sale to other customers with no basis for comparison No sale to other customers with no basis for comparison No sale to other customers with no basis for comparison No sale to other customers with no basis for comparison No sale to other customers with no basis for comparison A single supplier with no basis for comparison A single supplier with no basis for comparison A single supplier with no basis for comparison A single supplier with no basis for comparison No sale to other customers with no basis for comparison A single supplier with no basis for comparison A single supplier with no basis for comparison A single supplier with no basis for comparison	Creditperiod	Balance	Percentage of total notes and accounts receivable (payable)
							No significant difference No significant difference No significant difference No significant difference No significant difference No significant difference No significant difference No significant difference No significant difference No significant difference No significant difference No significant difference No significant difference No significant difference No significant difference No significant difference

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Pan-International Industrial Corp. and Subsidiaries

Total accounts receivable from related parties amounting to at least NT$100 million or 20% of the paid-in capital June 30, 2020

Table 5

Unit: NTD thousand (unless otherwise noted)

CompanyName	Related Party Hongfujin Precision Electronics (Yantai) Co., Ltd. Hongfujin Precision Industry (Wuhan) Co., Ltd. Sharp (Taiwan) Electronics Corporation FIH (Hongkong) Mobil Limited Hon Hai Precision Industry Co., Ltd. Pan-International Industrial Corp. Inc. Pan-International Industrial Corp. Inc. Foxconn Interconnect Technology Limited Champ Tech Optical (Foshan) Corporation	Relation	Balance of accounts receivable from related parties Turnover Rate	Overdue	Overdue	Accounts receivable from related parties recovered after the period	Provision for bad debt
				Amount	Actions Taken
Pan-International Industrial Corp. Inc. Pan-International Industrial Corp. Inc. Pan-International Industrial Corp. Inc. Pan-International Industrial Corp. Inc. Pan-International Industrial Corp. Inc. Honghuasheng Precision Electronics (Yantai) Co., Ltd. Dongguan Pan-International Precision Electronics Co., Ltd. New Ocean Precision Component (Jiangxi) Co., Ltd. Dongguan Pan-International Precision Electronics Co., Ltd.		Subsidiary of the indirect reinvestment of Hon Hai Precision Industry Co., Ltd. Subsidiary Subsidiary of the indirect reinvestment of Hon Hai Precision Industry Co., Ltd. Other related parties Subsidiary of the indirect reinvestment of Hon Hai Precision Industry Co., Ltd. A company that evaluates the company by the equity method The company’s parent company The company’s parent company Subsidiary of the indirect reinvestment of Hon Hai Precision Industry Co., Ltd. Other related parties	$ 664,386 2.60 133,044 2.56 337,650 3.82 235,901 1.48 181,528 1.46 320,819 9.07 185,831 3.33 447,705 3.18 186,406 2.63	$ - 28 - 10,794 40 - - - -	Payment received after the period Payment received after the period Payment received after the period Payment received after the period Payment received after the period Payment received after the period Payment received after the period Payment received after the period Payment received after the period	$ 304,916 $ 266 7,660 53 286,103 135 60,987 94 46,185 73 320,509 128 29,677 - 222,929 - 40,582 -

Table 5 page 1

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Pan-International Industrial Corp. and Subsidiaries

Significant Inter-company Transactions during the Reporting Period

June 30, 2020

Table 6

Unit: NTD thousand (unless otherwise noted)

Serial No. Note 1 0 0 0 0 1 2	Transaction Company Pan-International Industrial Corp. Inc. Pan-International Industrial Corp. Inc. Pan-International Industrial Corp. Inc. Pan-International Industrial Corp. Inc. Dongguan Pan-International Precision Electronics Co., Ltd. Honghuasheng Precision Electronics (Yantai) Co., Ltd.	Counterparty Pan-International Electronics (USA) Inc. Honghuasheng Precision Electronics (Yantai) Co., Ltd. Dongguan Pan-International Precision Electronics Co., Ltd. Pan Global Holding Co., Ltd. Pan-International Industrial Corp. Inc. Pan-International Industrial Corp. Inc.	Flow of Transactions Note 2			Description of Transactions(note 4)	Description of Transactions(note 4)	Percentage of consolidated total revenue or assets (note 3)
					Account Sales Purchase Purchase Other receivables Accounts receivable Accounts receivable	Amount	Transaction Terms Note 5 Note 7 Note 7 Not applicable Note 7 Note 7
			1 1 1 1 2 2			$ 160,447 1,420,074 474,946 360,241 185,831 320,819		2 15 5 2 1 2

Note 1: The business information between the parent company and the subsidiary shall be indicated in the number column respectively, and the number shall be filled in as follows:

• (1) Fill in 0 for the parent company.

• (2) 1 to 6 - subsidiaries.

• Note 2: There are three types of relationship with the transaction party; just mark the type (there is no need to repeatedly disclose the same transaction between parent and subsidiary companies or between subsidiary companies. For example, if a parent company discloses a transaction with a subsidiary company, the subsidiary company does not have to disclose the transaction repeatedly; if a subsidiary company discloses a transaction with a subsidiary company, the other subsidiary company does not have to disclose the transaction repeatedly):

• (1) Parent company with a subsidiary.

• (2) A subsidiary with the parent company.

• (3) A subsidiary with a subsidiary.

• Note 3: For the calculation of the ratio of the transaction amount to the total consolidated revenue or total assets, if it belongs to the account of assets and liabilities, it shall be calculated in the way that the ending balance accounts for the total consolidated assets; if it belongs to the account of income it shall be calculated in the way that the accumulated amount in the period end accounts for the total consolidated revenue.

• Note 4: The standard for disclosing the transaction information above between the parent company and a subsidiary is that the amount of purchase, sale and receivables from related parties reaches NT$100 million or 20% of the paid-in capital.

Note 5: The transaction price is similar to that of the general customer, with a collection period of 120 days monthly settlement.

Note 6: Transaction prices are negotiated and the collection period is 90 days monthly settlement. The terms of payment are adjusted according to the demand for working capital. Note 7: Transaction prices are negotiated and the collection period is 90 days monthly settlement.

Table 6 page 1

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Pan-International Industrial Corp. and Subsidiaries

The name and location of the investee company and other relevant information (excluding mainland China investee companies) For the period ended June 30, 2020

Table 7

Unit: NTD thousand (unless otherwise noted)

Investor	Investor Company Location	Main Businesses and Products	Investment Amount	Investment Amount	As of March 31,2020	As of March 31,2020	Net income (loss) of the Investee for currentperiod	Investment gains and losses recognized in the currentperiod	Remarks
			March 31, 2020	End of lastyear	Quantity Ratio	Carryingamount
Pan-International Industrial Corp. Inc. Pan-International Industrial Corp. Inc. Pan-International Industrial Corp. Inc. Yen Yung International Investment Co., Ltd Pan Global Holding Co., Ltd. Pan Global Holding Co., Ltd. Pan Global Holding Co., Ltd. Pan Global Holding Co., Ltd. Pan Global Holding Co., Ltd. Pan Global Holding Co., Ltd. Pan Global Holding Co., Ltd. Pan Global Holding Co., Ltd. Tekcon Electronics Corporation	Pan Global Holding Co., Ltd. The British Virgin Islands Pan-International Electronics Inc. USA Yen Yung International Investment Co., Ltd Taiwan Tekcon Electronics Corporation Taiwan P.I.E. Industrial Berhad (PIB) Malaysia Great Haven Holdings Ltd. (GHH) The British Virgin Islands Bristech International Ltd. (BIL) The British Virgin Islands Great Support International Ltd. (GSI) The British Virgin Islands Beyond Achieve Enterprise Ltd. (BAE) The British Virgin Islands Team Union International Ltd. (TUI) Hong Kong East Honest Holdings Limited (EHH) Hong Kong Long Time Tech. Co., Ltd. Taiwan Long Time Tech. Co., Ltd. Taiwan	Holding company Sale of electronic products Investment company Manufacturing and sale of connectors for electronic signal cables Holding company Holding company Holding company Processing of electronic products Holding company Holding company Holding company Electronic Components Electronic Components	$ 3,472,484 $ 3,472,484 73,142 73,142 473,997 473,997 393,898 393,898 41,334 41,334 571,859 571,859 - - - - 284,448 284,448 485,932 485,932 3,176,851 3,176,851 646,000 646,000 250,000 250,000		$ 12,220 100 28,000 100 44,316,236 100 21,960,504 83.58 197,459,985 51.42 19,800,000 100 1 100 1 100 9,600,000 100 1 100 665,799,420 100 20,187,500 16.82 7,812,500 5.44	$ 8,754,185 201,772 290,376 224,126 1,474,522 80,109 15,108 203 640,469 670,472 4,019,403 579,447 224,244

Note 1: The company mainly reinvests in Pan-International Electronics (Malaysia) Sdn indirectly through PIB BHD. and Pan-International Wire & Cable (Malaysia) Sdn. BHD. from the production of cable-attached connectors or electronic products and sales in Malaysia.

Note 2: The company mainly reinvests in NCIH International Holdings Limited indirectly through GHH, and obtains the equity of Ganchuang International Trade (Shenzhen) Co., Ltd. indirectly. The company was canceled in February 2017.

Note 3: The company mainly reinvests in New Ocean Precision Component (Jiangxi) Co., Ltd. indirectly through BAE. Please refer to Table 8 for details on the disclosure of information about the investment in the mainland China. Note 4: The company mainly reinvests in Dongguan Pan-International Precision Electronics Co., Ltd. indirectly through TUI. Please refer to Table 8 for details on the disclosure of information about the investment in the mainland China. Note 5: The company mainly reinvests in Honghuasheng Precision Electronics (Yantai) Co., Ltd. indirectly through EHH. Please refer to Table 8 for details on the disclosure of information about the investment in the mainland China. Note 6: The relevant figures in this table are in NTD. Where foreign currencies are involved, they will be converted into NTD at the exchange rate on the date of financial reporting.

Table 7 page 1

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Pan-International Industrial Corp. and Subsidiaries Mainland China investment information - Basic information For the period ended June 30, 2020

Table 8

Unit: NTD thousand (unless otherwise noted)

Name of the investee in mainland China	Main Businesses and Products	Paid-in Capital	Method of Investments (Note 2)	Cumulative outward remittance of investment amount from Taiwan at the beginning of the period	Investment Flows Cumulative outward remittance of the investment amount from Taiwan in the period end	Investment Flows Cumulative outward remittance of the investment amount from Taiwan in the period end	Net income (loss) of the Investee for current period	% Ownership of Direct or Indirect Investment	Investment gains and losses recognized in the current period(note 3)	Book value of the investment at the end of theperiod	Investment gains repatriated as of the end of theperiod $ - - - -	Remarks
					Outward	Inward $ - $ 370,375 - 807,418 - - - 2,622,255	$ 23,236 5,522 ( 21,680) 228,029	100 16.87 100 100	$ 23,236 - ( 21,680) 228,029	$ 670,473 1,632,104 640,468 4,019,391		note 6 Note 4
Dongguan Pan- International Precision Electronics Co., Ltd. Fuyu Property (Shanghai) Co., Ltd. New Ocean Precision Component (Jiangxi) Co., Ltd. Honghuasheng Precision Electronics (Yantai) Co., Ltd.	Manufacturing and sale of wires, cables, connecting wires, connecting wire connectors and wire plugs. Engaging in the e-commerce business of industrial design, other specialized design services, car rental, retail of other commodities, sale of computer and peripheral equipment and software, retail of communication equipment, retail of audio-visual equipment, retail of spare parts and supplies for locomotives, and e- commerce of retail goods and equipment above. Manufacturing and operation of various types of plugs and sockets and telecommunications. Production and sale of hard single (double) side printed circuit boards, hard multi-layer printed circuit boards, flexible multi-layer printed circuit boards and other printed circuit boards	$ 485,932 2 8,237,140 2 284,448 2 2,542,254 2		$ 370,375 $ - 807,418 - - - 2,622,255 -

Table 8 page 1

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Companyname Pan-International Industrial Corp. Inc.	The cumulative amount of outward remittance of investment from Taiwan to mainland China at the end of theperiod(notes 5 and 6) $ 4,201,267	Investment amount approved by the Investment Commission,MOEA $ 5,998,279	In compliance with the investment limit stipulated by the Investment Commission, MOEA for investment in mainland China.(note 7).
			$ -

Note 1: The relevant figures in this table are in NTD. Where foreign currencies are involved, they will be converted into NTD at the exchange rate on the date of financial reporting. Note 2: There are three investment modes:

1. Direct investment in mainland China.

2. Re-investment in mainland China through Pan Global Holding Co., Ltd. of a third region.

3. Other modes.

Note 3: Except for Dongguan Pan-International Precision Electronics Co., Ltd., the figures in the investment profit and loss column recognized in the period are recognized in the financial report which is reviewed by accountants. Note 4: In the first quarter of 2012, the company acquired 100% of the equity of East Honest Holdings Limited through the subsidiary Pan Global Holding Co., Ltd. and indirectly acquired Honghuasheng Precision Electronics (Yantai) Co., Ltd.; the investment amount approved by the Investment Commission, MOEA was USD 107,217 thousand.

Note 5: The following are the investment withdrawal cases approved by the Investment Commission, MOEA as of June 30, 2020:

Date Approval letter No.	Investor Company Original investment amount remitted from Taiwan	Investor Company Original investment amount remitted from Taiwan
September 5, 2003 0920028972 December 9, 2010 09900496780 May 30, 2011 10000205680 May 30, 2011 10000205690 May 30, 2011 10000205700 March 22, 2017 10600038030 May 9, 2017 10630024870	Dongguan Junwang Technology Co., Ltd. USD 91 thousand Saibo Digital Technology (Guangzhou) Co., Ltd. 476 thousand Yunnan Saibo Digital Technology Co., Ltd. 190 thousand Chongqing Saibotel Digital Square Co., Ltd. 454 thousand Nanchong Saibo Digital Square Co., Ltd. 58 thousand UER Battery Technology (Shenzhen) Co., Ltd. 1,100 thousand Ganchuang International Trade (Shenzhen) Co., Ltd. 8,650 thousand USD 11,019 thousand
		USD 11,019 thousand

Because these reinvestment companies suffer losses, the amount of investment originally remitted from Taiwan cannot offset the amount of investment in the mainland China.

• Note 6: The company received the letter from the Investment Commission, MOEA referenced Jing-Shen-II No. 10000518690 in November 2011 for cancellation of the approved investment amount of US$500 thousand in Dongguan Pan-International Precision Electronics Co., Ltd. which had not yet been invested; on October 30, 2014, the company received the letter from the Investment Commission, MOEA referenced Jing-Shen-Er-Zi No. 10333110 for transfer of 42 companies including Qingdao Saiboter Digital Technology Square Co., Ltd. to Samoa Le Zhiwan Ranch Holding Investment Limited; in March 2017, the company received the letter from the Investment Commission, MOEA referenced Jing-Shen-Er-Zi No. 10600038030 for cancellation of the approved investment amount of US$5,200 thousand in UER Battery Technology (Shenzhen) Co., Ltd. which had not yet been invested.

• Note 7: The Company received a letter from the Industrial Development Bureau, MOEA referenced Jing-Shou-Gong-Zi No. 10820432920 in December 2019 certifying the compliance with the operation scope of operation headquarters, and no investment limit is required from December 4, 2019 to December 3, 2022.

Table 8 page 2

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Pan-International Industrial Corp. and Subsidiaries Information on major shareholders June 30, 2020

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Table 9
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Name of major shareholders
Hon Hai Precision Industry Co., Ltd.
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Share
Number of shares held Shares Ratio
107,776,254 20.79%
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• Note 1: The information of major shareholders in this table is based on the information from the Central Depository on the last business day at the end of each quarter, covering shareholders holding more than 5% of the company’s common and special shares that have completed scriptless registration (including treasury shares).

• The share capital reported in the financial report and the actual number of shares that have completed the scriptless registration may be different due to differences in the basis of compilation and calculation.

• Note 2: If the shareholder puts the shares into a trust, the aforementioned information will be disclosed by the trustors’ individual account opened by the trustee. As for shareholders’ insider declaration of the ownership percentage over 10% according to the Securities and Exchange Act, including the shares on hand and those being put in a trust but with the decision power over the usage of the trust assets, please refer to the insider declaration information on MOPS.

• Note 3: The preparation principle of this table is to calculate the distribution of the balance of each credit transaction based on the shareholders’ register on the book-close day of the extraordinary shareholders' meeting (short-sale securities are not purchased back).

Note 4: Shareholding ratio (%) = total number of shares held by the shareholder/total number of shares that have completed scriptless registration.

Note 5: The total number of shares (including treasury shares) that have completed scriptless registration is 518,346,282 shares = 518,346,282 (common shares) + 0 (special shares).

Table 9 page 1

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