PI — Interim / Quarterly Report 2021

Dec 14, 2021

Pan-International Industrial Corp. and Subsidiaries CONSOLIDATED FINANCIAL STATEMENTS AND REVIEW REPORT OF INDEPENDENT

ACCOUNTANTS

First Quarter in 2021 and 2020 (Stock code 2328)

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

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

1[st] QUARTER IN 2021 AND 2020

Table of Contents

		Item	Page
I.	Cover		1
II.	Table	of Contents	2 ~ 3
III.	Independent Auditors’ Review Report		4 ~ 5
IV.	Consolidated Balance Sheets		6 ~ 7
V.	Consolidated Statements of Comprehensive Income		8 ~ 9
VI.	Consolidated Statements of Changes Equity		10
VII.	Consolidated Statements of Cash Flows		11
VIII.	Notes	to consolidated financial reports	12 ~ 60
	(I)	Organization and operations	12
	(II)	The Authorization of Financial Reports	12
	(III)	Application of Newly Released and Revised Standards and
		Interpretations	12 ~ 13
	(IV)	Summary of Significant Accounting Policies	13 ~ 27
	(V)	Major Sources of Uncertainty in Significant Accounting Judgments,
		Estimates, and Assumptions	27 ~ 28

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	Item	Page
(VI)	Summary of Significant Accounting Items	28 ~ 43
(VII)	Related Party Transactions	43 ~ 45
(VIII)	Pledged Assets	46
(IX)	Significant Contingent Liabilities and Unrecognized Commitments	46
(X)	Major Disaster Losses	46
(XI)	Significant Subsequent Events	46
(XII)	Others	46 ~ 58
(XIII)	Additional Disclosures	58 ~ 59
(XIV)	Operating Segments Information	59 ~ 60

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Independent Auditors’ Review Report

(2021) Cai-Shen-Bao-Zi No. 21000290

To Pan-International Industrial Inc.

Foreword

We have reviewed the consolidated balance sheet for the three months ended March 31, 2021 and 2020, the consolidated comprehensive income sheet, consolidated statement of changes in equity, consolidated statement of cash flows for the three months then ended, and the notes to the consolidated financial statements (including the summary of material accounting policies) of Pan-International Industrial Corp. and its subsidiaries. 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 reports 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(6) to the consolidated financial reports, the financial reports of the same period of some non-significant subsidiaries are included in the consolidated financial reports mentioned above and investments by equity method have not been verified by us. The total assets as of March 31, 2021 and 2020 were NT$3,127,211 thousand and 2,734,456 thousand, respectively, which accounted for 15% and 14% of the total consolidated assets (including investments using the equity method), respectively. The total liabilities were NT$1,667,314 thousand and NT$1,415,677thousand, accounting for 21% and 18% of the total consolidated liabilities, respectively. The comprehensive income for the three months ended March 31, 2021 and 2020 were NT$6,160 thousand in income and NT$51,995 thousand in losses, which accounted for 1% and 10% of the consolidated comprehensive income, respectively.

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Conclusion

According to our review results and the review report by other independent auditors, (please refer to the Other item), except for 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 Industrial Corp. and its subsidiaries as of March 31, 2021 and 2020, and the consolidated financial position and the consolidated financial performance and consolidated cash flow for the period then ended.

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 reports into consistent accounting policies. Therefore, in our review report pertaining to the consolidated financial reports above, the amounts in the financial reports of these subsidiaries before adjustments are based on the review reports of other independent auditors. Their total assets as of March 31, 2021 and 2020 were NT$4,804,549 thousand and 4,048,753 thousand respectively, accounting for 23% and 20% of the total consolidated assets. The operating revenue for the three months ended March 31, 2021 and 2020 were NT$1,838,564 thousand and NT$725,193 thousand, accounting for 38% and 15% of the consolidated operating revenue.

PwC Taiwan

Yung-Chien Hsu Independent Auditors Min-Chuan Feng

Former Securities Commission, Ministry of Finance Approval No.: (84)Tai-Cai-Zheng-VI No. 13377 Former Securities and Futures Bureau, Financial Supervisory Commission, Executive Yuan Approval No.: Jin-Guan-Cheng-VI-ZiNo. 0960038033

May 11 2021

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Pan-International Industrial Corp. and Subsidiaries Consolidated Balance Sheets

March 31, 2021 and December 31, March 31, 2020

(the consolidated balance sheet as of March 31, 2021 and 2020 was only reviewed but not audited according to generally accepted auditing standards)

Assets	Note	March 31,2021 Amount % $ 7,363,519 35 36,896 - 513,561 2 459 - 2,462,890 12 2,725,064 13 92,762 - 2,237,646 11 191,194 1 15,623,991 74 2,469,049 12 797,411 4 1,609,391 8 265,335 1 227,318 1 36,638 - 88,656 - 16,207 - 5,510,005 26 $ 21,133,996 100	December 31,2020 Amount % $ 7,544,242 36 54,250 - - - 41 - 2,564,231 12 2,759,169 13 118,590 1 1,967,196 10 159,825 1 15,167,544 73 2,367,713 12 804,554 4 1,670,684 8 288,179 1 234,558 1 36,963 - 90,266 1 19,163 - 5,512,080 27 $ 20,679,624 100	Unit: NTD thousand March 31,2020 Amount % $ 6,193,345 31 71,213 - - - 207 - 2,150,933 11 3,943,716 20 62,543 - 1,967,093 10 214,924 1 14,603,974 73 2,316,071 12 802,632 4 1,608,510 8 342,265 2 240,791 1 36,315 - 93,408 - 25,675 - 5,465,667 27 $ 20,069,641 100
		Amount $ 7,363,519 36,896 513,561 459 2,462,890 2,725,064 92,762 2,237,646 191,194 15,623,991 2,469,049 797,411 1,609,391 265,335 227,318 36,638 88,656 16,207 5,510,005 $ 21,133,996	Amount $ 7,544,242 54,250 - 41 2,564,231 2,759,169 118,590 1,967,196 159,825 15,167,544 2,367,713 804,554 1,670,684 288,179 234,558 36,963 90,266 19,163 5,512,080 $ 20,679,624	Amount $ 6,193,345 71,213 - 207 2,150,933 3,943,716 62,543 1,967,093 214,924 14,603,974 2,316,071 802,632 1,608,510 342,265 240,791 36,315 93,408 25,675 5,465,667 $ 20,069,641
Current assets 1100 Cash and cash equivalents 1110 Financial assets at FVTPL - Current 1120 Financial assets measured at fair value through other comprehensive income - Current 1150 Net notes receivable 1170 Net accounts receivable 1180 Accounts receivable - Related parties net 1200 Other receivables 130X Inventory 1470 Other current assets 11XX Total current assets Non-Current Assets 1517 Financial assets measured at fair value through other comprehensive income - Non- current 1550 Investment by equity method 1600 Property, plant, and equipment 1755 Right-of-use assets 1760 Net investment property 1780 Intangible asset 1840 Deferred tax assets 1900 Other non-current assets 15XX Total non-current assets 1XXX Total assets	6 (1) 6 (2) 6 (5) 6 (3) 6 (3) 7 7 6 (4) 8 6 (5) 6 (6) 6 (7) and 8 6 (8) 6 (9) and 8 6 (10) 8

(To be Continued)

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Pan-International Industrial Corp. and Subsidiaries Consolidated Balance Sheets March 31, 2021 and December 31, March 31, 2020

(the consolidated balance sheet as of March 31, 2021 and 2020 was only reviewed but not audited according to generally accepted auditing standards)

						standards)
														Unit: NTD thousand
						March 31,2021				December 31,2020				March 31,2020
	LIABILITIES AND EQUITY		Note			Amount	%			Amount	%			Amount	%
	Current liability
2100	Short-term borrowings	6	(11)		$	1,136,728		5	$	1,568,333		8	$	1,732,179		9
2120	Financial liabilities measured at	6	(2)
	fair value through income -
	Current					4,081		-		-		-		-		-
2130	Contractual liabilities - Current	6	(19)			517,748		3		395,622		2		278,932		1
2170	Accounts payable					2,783,183	13			2,813,815	14			2,486,054	12
2180	Accounts payable - Related	7
	parties					1,606,144		8		1,356,093		7		1,965,992	10
2200	Other payables	6	(12)			1,224,883		6		905,806		4		795,722		4
2230	Current tax liabilities					171,893		1		309,283		1		132,300		1
2280	Lease liabilities - Current	7				70,312		-		73,157		-		79,086		-
2399	Other current liabilities - Other					22,473		-		28,282		-		25,619		-
21XX	Total current liabilities					7,537,445	36			7,450,391	36			7,495,884	37
	Non-current liabilities
2570	Deferred tax liabilities					264,824		1		269,971		1		246,346		1
2580	Lease liabilities - Non-current	7				130,064		1		147,802		1		193,631		1
2600	Other non-current liabilities	6	(13)			23,113		-		23,166		-		52,217		1
25XX	Total non-current liabilities					418,001		2		440,939		2		492,194		3
2XXX	Total liabilities					7,955,446	38			7,891,330	38			7,988,078	40
	Equity attributable to owners of
	the parent company
	Share capital	6	(14)
3110	Common share capital					5,183,462	25			5,183,462	25			5,183,462	26
	Capital surplus	6	(15)
3200	Capital surplus					1,503,606		7		1,503,606		8		1,503,606		7
	Retained earnings	6	(16)
3310	Legal reserve					1,062,342		5		1,062,342		5		959,410		5
3320	Special reserve					1,312,274		6		1,312,274		6		883,205		4
3350	Unappropriated earnings					3,286,537	16			3,453,829	17			3,759,946	19
	Other equities	6	(17)
3400	Other equities			(		779,434 ) (		4) (		1,349,724)(		7)(		1,743,271)(		9)
31XX	Total equity attributable to
	owners of the parent
	company					11,568,787	55			11,165,789	54			10,546,358	52
36XX	Non-controlling interests	6	(18)			1,609,763		7		1,622,505		8		1,535,205		8
3XXX	Total equity					13,178,550	62			12,788,294	62			12,081,563	60
	Significant Contingent Liabilities	9
	and Unrecognized Commitments
3X2X	Total liabilities and equity				$	21,133,996	100		$	20,679,624	100		$	20,069,641	100

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 and Subsidiaries

Consolidated Statements of Comprehensive Income January 1 to March 31, 2021 and 2020

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

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

Item

January1 to March 31,2021 January1 to March 31,2020 Note Amount % Amount % 6 (19) and 7 $ 4,871,995 100 $ 4,712,869 100 6 (4) (22) And 7 ( 4,348,282) ( 89)( 4,511,983)( 96) 523,713 11 200,886 4 6 (22) ( 53,677) ( 1) ( 45,644 ) ( 1) ( 144,427) ( 3) ( 121,082 ) ( 2) ( 67,245) ( 2) ( 46,015 ) ( 1) 12 (2) ( 2,793) - ( 2,011) - ( 268,142) ( 6)( 214,752)( 4) 255,571 5 ( 13,866) - 26,797 1 25,720 1 6 (20) 20,972 - 12,771 - 6 (21) ( 23,229) ( 1) 68,540 1 6 (23) ( 3,485) - ( 11,880 ) - 6 (6) ( 7,143) - ( 35,922)( 1) 13,912 - 59,229 1 269,483 5 45,363 1 6 (24) ( 68,990) ( 1)( 36,481)( 1) $ 200,493 4 $ 8,882 -

4000 Operating revenue 5000 Operating cost 5900 Operating profit margin Operating expenses 6100 Selling and marketing expenses 6200 General and administrative expenses 6300 Research and development expenses 6450 Expected credit impairment 6000 Total operating expenses 6900 Operating profit (loss) Non-operating income and expense 7100 Interest income 7010 Other income 7020 Other gains and losses 7050 Financial costs 7060 Share of profits and losses of affiliated companies and joint ventures recognized by the equity method 7000 Total non-operating income and expenses 7900 Net income before tax 7950 Income tax expense 8200 Net income for the period

(continued)

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Pan-International Industrial and Subsidiaries

Consolidated Statements of Comprehensive Income

January 1 to March 31, 2021 and 2020

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

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

Item

January1 to March 31,2021 January1 to March 31,2020 Note Amount % Amount % 6 (17) $ 611,623 13 ($ 305,560)( 7) 611,623 13 ( 305,560)( 7) 6 (17) (18) ( 85,576) ( 2)( 199,693)( 4) ( 85,576) ( 2)( 199,693)( 4) $ 526,047 11 ($ 505,253)( 11) $ 726,540 15 ($ 496,371)( 11) $ 168,992 3 $ 18,543 - 31,501 1 ( 9,661) - $ 200,493 4 $ 8,882 - $ 739,282 15 ($ 412,454 ) ( 9) ( 12,742) - ( 83,917)( 2) $ 726,540 15 ($ 496,371)( 11) 6 (25) $ 0.33 $ 0.04 $ 0.33 $ 0.04

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 8310 Total of items not reclassified to profit or loss Items that may be reclassified subsequently to profit or loss: 8361 Currency translation difference 8360 Total of items that may be reclassified subsequently to profit or loss: 8300 Other comprehensive income (net) 8500 Total comprehensive income in the current period NET PROFIT ATTRIBUTABLE TO: 8610 Owners of the parent company 8620 Non-controlling interests Total comprehensive income attributable to: 8710 Owners of the parent company 8720 Non-controlling interests Earnings per share (EPS) 9750 Basic earnings per share 9850 Diluted earnings per share

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

Manager ： Sung-Fa Lu

Chairman ： Sung-Fa Lu

Accounting supervisor ： Feng-An Huang

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Pan-International Industrial Corp. and its Subsidiaries Consolidated Statement of Changes in Shareholders Equity January 1 to March 31, 2021 and 2020

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

Unit: NTD thousand

2020 Balance on January 1 Net income for the period Other comprehensive income recognized for the period Total comprehensive income in the current period Balance on March 31 2021 Balance on January 1 Net income for the period Other comprehensive income recognized for the period Total comprehensive income in the current period Earnings distribution and provisions for 2020: Cash dividends The refund of share payments from the investee’s capital reduction exceeds the book value Balance on March 31	Note								Equityattribu	ta	ble to owners of th	ble to owners of th	eparent 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	Currency translation difference	Unrealized Gain (Loss) on Financial Assets at Fair Value through Other Comprehensive Income
	6 (17) 6 (17) 6 (16)		$ 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		$ 959,410 - - - $ 959,410 $ 1,062,342 - - - - - $ 1,062,342		$ 883,205 - - - $ 883,205 $ 1,312,274 - - - - - $ 1,312,274	$ 3,741,403 18,543 - 18,543 $ 3,759,946 $ 3,453,829 168,992 - 168,992 ( 336,925 ) 641 $ 3,286,537		($ 1,061,916 ) - ( 125,437 ) ( 125,437 ) ($ 1,187,353 ) ($ 1,163,132 ) - ( 41,333 ) ( 41,333 ) - - ($ 1,204,465 )	($ 250,358 ) - ( 305,560 ) ( 305,560 ) ($ 555,918 ) ($ 186,592 ) - 611,623 611,623 - - $ 425,031	$ 10,958,812 18,543 ( 430,997 ) ( 412,454 ) $ 10,546,358 $ 11,165,789 168,992 570,290 739,282 ( 336,925 ) 641 $ 11,568,787		$ 1,619,122 ( 9,661 ) ( 74,256 ) ( 83,917 ) $ 1,535,205 $ 1,622,505 31,501 ( 44,243 ) ( 12,742 ) - - $ 1,609,763	$ 12,577,934 8,882 ( 505,253 ) ( 496,371 ) $ 12,081,563 $ 12,788,294 200,493 526,047 726,540 ( 336,925 ) 641 $ 13,178,550

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

January 1 to March 31, 2021 and 2020

(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 Provision for expected credit impairment loss Net losses from financial assets and liabilities measured at fair value through profit or loss Interest expense Interest income Dividend income Income from rental reduction Share of profits and losses of affiliated companies recognized by the equity method Unrealized exchange loss Net loss from the disposal of property, plant and equipment 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 Return of capital investment in financial assets measured at fair value through other comprehensive income Purchase property, plant and equipment assets Proceeds from disposal of property, plant and equipment Increase in refundable deposits Decrease in refundable deposits Increase in other non-current assets Interest received Dividend received Net cash outflow from investment activities Cash flows from financing activities Increase (decrease) in short-term borrowings Lease principal repayment Interest paid Net cash inflow (outflow) from financing activities Impact of changes in the exchange rate on cash and cash equivalents Decrease in cash and cash equivalents in the current period Cash and cash equivalents at the beginning of the period Cash and cash equivalents at the end of the period

Note January 1 to March 31,2021 January 1 to March 31,2020 $ 269,483 $ 45,363 6 (22) 102,023 98,194 12 (2) 2,793 2,011 6 (21) 3,758 4,373 6 (23) 3,485 11,880 ( 26,797 ) ( 25,720 ) 6 (20) ( 577 ) ( 667 ) ( 3,123 ) - 6 (7) 7,143 35,922 670 13,701 6 (21) 2,267 16 16,423 6,793 ( 418 ) 3,611 57,745 398,497 38,757 ( 12,915 ) 36,904 238,126 ( 305,264 ) 476,461 ( 21,914 ) ( 28,438 ) ( 13,597 ) ( 781,061 ) 260,748 ( 214,984 ) 24,979 ( 135,023 ) ( 5,915 ) 736 122,126 15,821 ( 54 ) 4,840 571,645 157,537 ( 199,315 ) ( 91,385 ) 372,330 66,152 814 - 6 (26) ( 90,138 ) ( 133,936 ) 648 1,239 - ( 345 ) 263 - ( 102 ) - 26,797 25,984 577 667 ( 61,141 ) ( 106,391 ) 6 (27) ( 427,699 ) 144,528 ( 7,652 ) ( 4,747 ) ( 2,882 ) ( 10,195 ) ( 438,233 ) 129,586 ( 53,679) ( 96,513 ) ( 180,723 ) ( 7,166 ) 7,544,242 6,200,511 $ 7,363,519$ 6,193,345

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

Chairman ： Sung-Fa Lu

Accounting supervisor ： Feng-An Huang

Manager ： Sung-Fa Lu

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Pan-International Industrial Corp. and Subsidiaries Notes to consolidated financial reports First Quarter in 2021 and 2020

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

Unit: NTD thousand (unless otherwise noted)

I. Organization and operations

Pan-International Industrial Inc. (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 May 11, 2021.

III. Application of Newly Released and Revised Standards and Interpretations

• (I) 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 interpretations for the new issues, amendments, and revisions of International Financial Reporting Standards (IFRS) recognized by the FSC for application in 2021:

application in 2021:
New rules/amendments/amended 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" Amendments to the IFRS 9, IAS 39, IFRS 7, IFRS 4, and IFRS 16 second stage “Reform of interest rate index” Amendment to IFRS 16 "COVID-19-Related Rent Concessions After June 30, 2021" Note: FSC has authorized early application from January 1, 2021 onward.	January 1, 2021 January 1, 2021 April 1, 2021 (Note)

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

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

None.

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(III) 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:

recognized by the FSC:
New rules/amendments/amended standards and interpretations	Effective date of the release of the International Accounting Standards Board
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 1 “Disclosure of Accounting Policies” Amendment to IAS 8 “Definition of Accounting Estimates” 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, 2022 To be decided by IASB January 1, 2023 January 1, 2023 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.

(I) 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.

(II) 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.

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1. 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.

(III) 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 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.

3. (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.

4. (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.

5. (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.

6. (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.

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2. Subsidiaries listed in the consolidated financial reports:

Name	Name	Main Business		%	of Ownership December 31,2020March 31,2020 100 100 100	Expla nation
				March 31, 2021	December 31,2020
Pan- International Industrial Corp. Pan- International Industrial Corp. Pan- International Industrial Corp.	PAN- INTERNATIONA L ELECTRONICS INC.(PIU) PAN GLOBAL HOLDING CO., LTD. (PGH) Yen Yung International Investment Co., Ltd	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 peripheral products. Engaged in the domestic investment business.		100 100 100	100 100 100	(3) (1) (2) (3) (4) (3) (4)

• (1) PGH’s subsidiaries, Bristech International Ltd. and Great Support International Ltd., and sub-subsidiary, NCIH International Holdings Ltd., were dissolved in September 2020.

• (2) PGH's sub-subsidiary Jiangxi Anya Trading Co., Ltd. was de-registered in March, 2021.

• (3) The disclosure of the indirect investment of the above subsidiaries in companies in Mainland China is shown in Table 8.

• (4) The financial reports of some insignificant subsidiaries of the Group have not been reviewed by an independent auditor.

• 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

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The total amount of non-controlling interests of the Group as of March 31, 2021, and December 31 and March 31, 2020 were NT$1,609,763, NT$1,622,505, and NT$1,535,205 respectively. The following is the information about the significant non-controlling interests of the Group and its subsidiaries:

Investee	Main business location			Non-controllinginterests	Non-controllinginterests
		March	31,2021	December 31,2020		March	31,2020
		Amount	Shareholding percentage	Amount	Shareholding percentage	Amount	Shareholding percentage
P.I.E. INDUSTRIAL BERHAD	Malaysia	$1,571,915	49	$1,583,933	49	$1,476,027	49

Summary financial information of subsidiaries: Balance sheet

Summary financial information of Balance sheet	subsidiaries:
Current assets Non-Current Assets Current liability Non-current liabilities Net total assets	March 31,2021	December 31,2020		March 31,2020
	$ 3,852,388 822,365 ( 1,405,855) ( 33,172) $ 3,235,726		$ 3,683,194 864,567 ( 1,256,703) ( 30,596) $ 3,260,462	$ 3,079,816 865,881 ( 876,249) ( 31,106) $ 3,038,342

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	January1 to March 31,2021 $ 1,838,564	January1 to March 31,2020 $ 725,193
	95,397 ( 29,041) 66,356 ( 91,093) ($ 24,737) ($ 12,017)	( 14,137) 3,898 ( 10,239) ( 143,244)
		($ 153,483)
		($ 74,562)

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Cash Flow Statement

Cash Flow Statement
Net cash inflow (outflow) from operating activities Net Cash inflow (outflow) from investing 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	January1 to March 31,2021 ($ 62,999) 614 ( 59,852) ( 34,752) ( 156,989) 1,012,026 $ 855,037	January1 to March 31,2020
		$ 341,919 ( 107,166) 29 ( 46,301)
		188,481
		1,227,197
		$ 1,415,678

(IV) 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;

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• 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.

• (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.

(V) 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.

(VI) 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.

(VII) 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.

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

2. 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.

3. 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.

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

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

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 fair value through other comprehensive income in accordance with trading practices.

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

6. (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.

7. (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.

(IX) 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.

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1. 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.

2. 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.

(X) 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.

(XI) 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 after-amortization 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.

(XII) Derecognition of financial assets

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

(XIII) 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.

(XIV) 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.

(XV) 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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• (XVI) Investment by the equity method Affiliated enterprises

• 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.

• 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 on its behalf.

• 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.

• 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.

• When the Group disposes of an associate, if there is a loss of significant influence over the associate, the accounting treatment of all amounts previously recognized in other comprehensive income related to the associate 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 when disposing of related assets or liabilities, then if there is a loss of significant influence over the associate, the profit or loss will be reclassified as profit or 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.

(XVII) 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.

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1. 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

(XVIII) 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.

(XIX) 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.

(XX) Intangible asset

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

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(XXI) 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 cashgenerating units or groups of cash-generating units that are expected to benefit from the corporate merger that generates goodwill.

(XXII) 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.

(XXIII) 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.

(XXIV) 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.

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1. 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.

(XXV) 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.

(XXVI) 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.

(XXVII) 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

2. (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.

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• 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.

(XXVIII) 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.

3. 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.

4. 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.

5. 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

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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.

1. The portion of unused income tax deduction for deferred use generated from the procurement of equipment or technology, R&D spending and investment in equity shall be recognized as deferred income tax assets within the scope of using unused income tax deduction for taxation with a high probability in the future.

2. 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.

3. 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.

(XXIX) Dividend distribution

Cash dividends distributed to the Company’s shareholders are recognized as liabilities in the financial reports when the Company’s board of directors resolves a decision to distribute dividends. Stock dividends distributed to the Company’s shareholders are recognized as stock dividends to be distributed in the financial reports when the Company’s shareholders’ meeting resolves a decision to distribute stock dividends, and reclassified to ordinary shares on the record date of the issue of new shares.

(XXX) 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 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.

2. The terms of payment for sale transactions are usually due 30 to 120 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 the currency.

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(XXXI) 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.

(XXXII) Operation departments

The information of the Group's operating segments 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 contain risk that may result in 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:

(I) 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.

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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(II) 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 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.

VI. Summary of Significant Accounting Items

(I) Cash and cash equivalents

Cash and cash equivalents
Cash on hand and working capital Checking and demand deposit accounts Time deposit	March 31,2021	December 31,2020	March 31,2020
	$ 3,993 5,732,729 1,626,797	$ 5,619 6,241,449 1,297,174	$ 2,374 5,921,576 269,395
	$ 7,363,519	$ 7,544,242	$ 6,193,345

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. The bank deposits pledged by the Group as of March 31, 2021, December 31, 2021, and March 31, 2020 are classified as other current assets and other non-current assets. Please refer to Note 8 for details.

(II) Financial assets/liabilities measured at fair value through profit or loss - Current

Item	March 31,2021	December 31,2020	March 31,2020
Current items: Mandatory financial assets measured at fair value through income Open-end funds Foreign exchange forward contracts Mandatory financial assets measured at fair value through income Foreign exchange forward contracts	$ 36,896 -	$ 50,916 3,334	$ 71,213 -
	$ 36,896	$ 54,250	$ 71,213
	$ 4,081	$ -	$ -

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1. The financial products held by the Group from January 1 to March 31, 2021 and 2020 were recognized as net losses of NT$3,758 and NT$4,373, respectively.

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

Derivative financial assets	March 31,2021
	Contract amount (Nominalprincipal) (NT$ thousand)	Contractperiod
	RMB(BUY) 163,350 USD(SELL) 25,000 December 31,2020	January 2021~May 2021
Current items: Foreign exchange forward contracts Derivative financial assets
	Contract amount (Nominalprincipal) (NT$ thousand)	Contractperiod
	RMB(BUY) 72,783 USD(SELL) 11,000	2020/12~2021/01
Current items: Foreign exchange forward contracts

Foreign exchange forward contracts

The foreign exchange forward transactions entered into by the Group are US dollar forward transactions (selling USD to buy RMB) to avoid the exchange rate risk of working capital, but hedge accounting is not applicable.

1. The group has not pledged financial assets/liabilities measured at fair value through profit or loss.

(III) Notes and accounts receivable

loss. Notes and accounts receivable
Item Note receivable Accounts receivable Less: Allowance for impairment loss	March 31,2021	December 31,2020	March 31,2020
	$ 459 2,472,061 ( 9,171)	$ 41 2,570,432 ( 6,201)	$ 207 2,156,189 ( 5,256)
	$ 2,463,349	$ 2,564,272	$ 2,151,140

1. The group does not hold any collateral.

2. The balance of accounts receivable and notes receivable as of March 31, 2021 and December 31, March 31, 2020 were generated from customer contracts, and the balance of notes receivable and accounts receivable of customer contracts on January 1, 2020 was NT$2,608,592.

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 March 31, 2021 and December 31, March 31, 2020 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.

~29~

(IV) Inventory

Inventory
Raw materials Work in process Finished products Raw materials Work in process Finished products Raw materials Work in process Finished products		March 31,2021
	Cost	Allowance for valuation losses	Book value
	$ 1,105,197 661,741 593,440		$ 1,075,157 646,821 515,668)
		($ 30,040) ( 14,920) ( 77,772)
	$ 2,360,378	($ 122,732)	$ 2,237,646
		December 31,2020
	Cost	Allowance for valuation losses	Book value
	$ 980,033 511,455 671,899		$ 887,744 500,630 578,822
		($ 92,289 ( 10,825) ( 93,077)
	$ 2,163,387	($ 196,191)	$ 1,967,196
		March 31,2020
	Cost	Allowance for valuation losses	Book value
	$ 1,297,444 439,108 426,496		$ 1,185,801 430,499 350,793
		($ 111,643) ( 8,609) ( 75,703)
	$ 2,163,048	($ 195,955)	$ 1,967,093

The cost of inventory recognized as expense losses by the Group in the current period:

Cost of inventory sold Inventory valuation loss (benefit from appreciation) Income from sales of scrap materials	January1 to March 31,2021	January1 to March 31,2020
	$ 4,434,391 ( 73,459) (12,650)	$ 4,476,388 43,381 ( 7,786)
	$ 4,348,282	$ 4,511,983

During the period from January 1 to March 31, 2021, 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.

~30~

(V) Financial assets measured at fair value through other comprehensive income - current/noncurrent

current
Item	March 31,2021	December 31,2020	March 31,2020
Current items: Equity instruments Non-listed, OTC, or emerging stocks Non-current items: Equity instruments Listed and OTC stocks Non-listed, OTC, or emerging stocks Total	$ 513,561	$ -	$ -
	$ 1,745,096 723,953	$ 1,166,154 1,201,559	$ 537,156 1,778,915
	$ 2,469,049	$ 2,367,713	$ 2,316,071

1. Please refer to note 6(17) other equity items for the items the Group recognized in other comprehensive income due to changes in fair value from January 1 to March 31, 2021 and 2020.

2. None of the Group's financial assets measured at fair value through other comprehensive income were pledged as of March 31, 2021 and December 31, March 31, 2020.

3. The Group’s board of directors resolved a decision to dispose of all the A shares of Cybertan Technology Corp. held in March of 2021, so the book value of NT$513,561 was reclassified to financial assets measured at fair value through other comprehensive income-current.

(VI) Investment by equity method

Investment by equity method
Long Time Tech. Co., Ltd.	March 31,2021	December 31,2020	March 31,2020
	$ 797,411	$ 804,554	$ 802,632

1. The Group's investment by the equity method on January 1 to March 31, 2021 and 2020 was based on the evaluation in the financial reports compiled by the affiliated enterprise which was not reviewed by an independent auditor 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	January1 to March 31,2021 ($ 7,143) ($ 7,143)	January1 to March 31,2020
		($ 35,922)
		($ 35,922)

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.

~31~

(VII) Property, plant, and equipment

January 1, 2021 Cost Cumulative depreciation 2021 January 1 Addition Disposal Transfer Depreciation expenses Net exchange difference March 31 March 31, 2021 Cost Cumulative depreciation January 1, 2020 Cost Cumulative depreciation 2020 January 1 Addition Disposal Re-classification Depreciation expenses Net exchange difference March 31 March 31, 2020 Cost Cumulative depreciation	Land	Land	Land	Buildings	Buildings	Equipment	Equipment	Others	Others	Unfinished construction and equipment to be accepted	Unfinished construction and equipment to be accepted	Total
	$ 24,010 -			$ 577,238 ( 348,789)		$ 4,673,728 ( 3,425,163)		$ 687,857 ( 546,963)		$ 28,766 -		$ 5,991,599 ( 4,320,915)
	$ 24,010			$ 228,449		$ 1,248,565		$ 140,894		$ 28,766		$ 1,670,684
	$ 24,010 - - - - ( 244)			$ 228,449 260 - - ( 3,986) ( 5,713)		$ 1,248,565 15,414 ( 552) - ( 64,640) ( 8,772)		$ 140,894 11,828 ( 2,363) 2,115 ( 8,897) ( 329)		$ 28,766 7,518 - ( 2,115) - ( 817)		$ 1,670,684 35,020 ( 2,915) - ( 77,523) ( 15,875)
	$ 23,766			$ 219,010		$ 1,190,015		$ 143,248		$ 33,352		$ 1,609,391
	$ 23,766 -			$ 568,794 ( 349,784)		$ 4,619,410 ( 3,429,395)		$ 693,716 ( 550,468)		$ 33,352 -		$ 5,939,038 ( 4,329,647)
	$ 23,766 Land			$ 219,010 Buildings		$ 1,190,015 Equipment		$ 143,248 Others		$ 33,352 Unfinished construction and equipment to be accepted		$ 1,609,391 Total
	$		24,394 -	$ 642,881 ( 341,713)		$ 4,457,094 ( 3,344,344)		$ 671,793 ( 532,306)		$ 104,729 -		$ 5,900,891 ( 4,218,363)
	$		24,394	$ 301,168		$ 1,112,750		$ 139,487		$ 104,729		$ 1,682,528
	$ (		24,394 - - - - 549)		$ 301,168 4,740 - ( 68,191) ( 3,891) ( 11,116)		$ 1,112,750 97,654 ( 46) 2,157 ( 60,158) ( 22,607)		$ 139,487 852 ( 1,209) - ( 8,365) ( 1,718)	$ 104,729 8,398 - ( 5,817) - ( 4,152)		$ 1,682,528 111,644 ( 1,255) ( 71,851) ( 72,414) ( 40,142) $ 1,608,510
		$	23,845		$ 222,710		$ 1,129,750		$ 129,047		$ 103,158
		$	23,845		$ 553,877 ( 331,167)		$ 4,462,891 ( 3,333,141)		$ 662,168 ( 533,121)		$ 103,158 -	$ 5,805,939 ( 4,197,429)
		$	23,845		$ 222,710		$ 1,129,750		$ 129,047		$ 103,158	$ 1,608,510

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

(VIII) 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.

~32~

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

are as follows:
Land Houses Land Houses	March 31,2021	December 31,2020		March 31,2020
	Book value	Book value		Book value
	$ 70,885 194,450	$	73,017 215,162	$ 74,030 268,235
	$ 265,335	$	288,179	$ 342,265
	January1 to March 31,2021 Depreciation expenses $ 624 20,848 $ 21,472

1. The increase in the group's right-of-use assets from January 1 to March 31, 2021 and 2020 were NT$0.

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	January1 to March 31,2021	January1 to March 31,2020
	$ 1,480 2,523	$ 1,990 5,320

1. The total cash outflow from the leases of the Group from January 1 to March 31, 2021 and 2020 were NT$10,493 and NT$9,952 respectively.

(IX)Investment property

nvestment property
January 1, 2021 Cost Cumulative depreciation and impairment 2021 January 1 Depreciation expenses Net exchange difference March 31 March 31, 2021 Cost Cumulative depreciation and impairment	Land	Buildings	Total
	$ 112,596 -	$ 221,048 ( 99,086)	$ 333,644 ( 99,086)
	$ 112,596	$ 121,962	$ 234,558
	$ 112,596 - ( 2,661)	$ 121,962 ( 1,527) ( 3,052)	$ 234,558 ( 1,527) ( 5,713)
	$ 109,935	$ 117,383	$ 227,318
	$ 109,935 -	$ 216,556 ( 99,173)	$ 326,491 ( 99,173)
	$ 109,935	$ 117,383	$ 227,318

~33~

Land Buildings Total January 1, 2020 Cost $ 92,496 $ 153,299 $ 245,795 Cumulative depreciation and impairment - ( 94,774) ( 94,774) $ 92,496 $ 58,525 $ 151,021 2020 January 1 $ 92,496 $ 58,525 $ 151,021 Transfer 23,745 69,735 93,480 Depreciation expenses - ( 1,576) ( 1,576) Net exchange difference 447 (2,581) 2,134 March 31 $ 116,688 $ 124,103 $ 240,791 March 31, 2020 Cost $ 116,688 $ 218,067 $ 334,755 Cumulative depreciation and impairment - ( 93,964) ( 93,961) $ 116,688 $ 124,103 $ 240,791 1. Rental income and direct operating expenses of investment property: January1 to March 31,2021 January1 to March 31,2020 Rental income of investment property $ 12,548 $ 7,899 Direct operating expenses of investment property that Generates rental income in the current period $ 1,527 $ 1,576	Land $ 92,496 - $ 92,496 $ 92,496 23,745 - 447	Buildings $ 153,299 ( 94,774) $ 58,525 $ 58,525 69,735 ( 1,576) (2,581)	Buildings $ 153,299 ( 94,774) $ 58,525 $ 58,525 69,735 ( 1,576) (2,581)	Total $ 245,795 ( 94,774) $ 151,021 $ 151,021 93,480 ( 1,576) 2,134
	$ 12,548 $ 1,527		$ 7,899 $ 1,576

1. The fair value of the investment property held by the Group as of March 31, 2021 and December 31, March 31, 2020 were NT$522,431, NT$522,431, and NT$509,032 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.

(X) Intangible assets - Goodwill

Intangible assets-Goodwill
Balance at the beginning of the period Net exchange difference Ending balance	March 31,2021	December 31,2020 $ 37,142 ( 179)	March 31,2020 $ 37,142 (827)
	$ 36,963 ( 325)
	$ 36,638	$ 36,963	$ 36,315

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.

~34~

(XI) Short-term borrowings

Short-term borrowings
Nature of the borrowings	March 31,2021	Interest Rate	Collateral
Bank loans - Credit loans Nature of the borrowings	$ 1,136,728	0.53%~0.68% Interest Rate	None. Collateral
	December 31,2020
Bank loans - Credit loans Nature of the borrowings	$ 1,568,333	0.62%~0.74% Interest Rate	None. Collateral
	March 31,2020
Bank loans - Credit loans	$ 1,732,179	2.35%~3.3%	None.

As of March 31, 2021, the Group had an undrawn limit of$5,513,500.

(XII) Other payables

her payables
Salary, bonus, and employee remuneration payable Dividends payables Repair expenses payable Utility fees payable Equipment payment payable Consumables payable Others	March 31,2021 $ 411,718 336,925 66,960 62,085 50,245 38,774 258,176 $ 1,224,883	December 31, 2020	March 31,2020
		$ 433,318 - 96,293 42,439 105,069 55,533 173,154	$ 356,939 - 87,170 38,979 8,402 36,195 268,037
		$ 905,806	$ 795,722

~35~

(XIII) 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 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 provide funding to make up of the shortage before the end of March in the following year. 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 provide funding to make up of the shortage before the end of March in the following year.

3. (2) From January 1 to March 31, 2021 and 2020, the Group recognized pension cost amounting to $574 and $562, respectively, in accordance with the above regulations governing the recognition of pension fund.

4. (3) The Group expected to appropriate $1,747 for payment to the retirement plan in 2022.

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 pension payment.

7. (2) The subsidiaries listed in the consolidated statements do not have their own retirement measures. Pan-International Electronics Inc., 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.

~36~

• (3) From January 1 to March 31, 2021 and 2020, the Group recognized pension cost amounting to $34,665 and $24,259, respectively, in accordance with the above regulations governing the recognition of pension fund.

• (XIV) Share capital

As of March 31, 2021, the stated quantity of shares issued by the Company are 600,000,000 shares (including 30,000,000 shares under subscription warrants or subscription rights of convertible bonds), with 518,346,282 shares outstanding with a par value of NT$10 per share.

(XV) 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.

(XVI) 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.

4. 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.

~37~

1. On March 23, 2021, the Company’s board of directors passed the 2020 earnings distribution proposal, and the shareholders’ meeting passed the 2019 earnings distribution proposal on June 12, 2020 as follows:

proposal on June	12, 2020 as follows:	12, 2020 as follows:
Legal reserve Special reserve Cash dividends	2020		2019
	Amount $ 76,277 37,450 336,925	Dividend per share(NT$)	Amount	Dividend per share(NT$) $ 1.00
		$ 0.65	$ 102,932 429,069 518,346
	$ 450,652		$ 1,050,347

(XVII) Other items of equity

Other items of equity
January 1, 2021 Unrealized profit or loss of financial products - Group Currency conversion difference - Group March 31, 2021 Six months ended Unrealized profit or loss of financial products - Group Currency conversion difference - Group March 31, 2020	Financial assets at FVTOCI		Adjustment for currency conversion	Total
	($ 186,592) 611,623 -		($ 1,163,132) - ( 41,333)	($ 1,349,724) 611,623 ( 41,333)
	$ 425,031		($ 1,204,465)	($ 779,434)
	Financial assets at FVTOCI		Adjustment for currency conversion	Total
	($ 250,358) ( 305,560) -	($ 1,061,916) - (125,437)		($ 1,312,274) ( 305,560) (125,437)
	($ 555,918)	($ 1,187,353)		($ 1,743,271)

(XVIII) Non-controlling interests

II)Non-controlling interests
January 1 Share of non-controlling equity: Net profit (loss) of the period Conversion difference from the conversion of financial statements of a foreign operation March 31	2021 $ 1,622,505 31,501 ( 44,243) $ 1,609,763	2020
		$ 1,619,122 ( 9,661) ( 74,256)
		$ 1,535,205

(XIX) Operating revenue

) Operating revenue
Revenue from customer contracts	January1 to March 31,2021	January1 to March 31,2020
	$ 4,871,995	$ 4,712,869

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.

Contractual liabilities

~38~

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

follows:
Contractual liabilities	March31,2021	December31,2020	March31,2020	January1,2020
	$ 517,748	$ 395,622	$ 278,932	$ 263,111

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

Opening balance of contract liabilities recognized as income in the current period	January1 to March 31,2021	January1 to March 31,2020
	$ 42,307	$ 41,076

(XX) Other income

income
Rental income Dividend income Subsidy income Other income - Other	January1 to March 31,2021	January1 to March 31,2020
	14,949 577 3,958 1,488	9,843 667 737 1,524
	$ 20,972	$ 12,771

(XXI) Other gains and losses

er gains and losses
Net foreign currency conversion gain (loss) Net gains of financial assets and liabilities measured at fair value through the income Losses from the disposal of property, plant and equipment Others	January1 to March 31,2021 ($ 13,417) ( 3,758) ( 2,267) ( 3,787) $ 23,229		January1 to March 31,2020
			$ 74,217 ( 4,373) ( 16) ( 1,288)
			$ 68,540

~39~

(XXII) Employee benefit, depreciation and amortization expenses

Bynature		January1 to March 31,2021	January1 to March 31,2020
Employee benefits expense Salary expenses Labor and national health insurance expenses Pension expenses Other HR expenses Depreciation expenses Amortization expenses		$ 527,341 18,602 35,239 45,831	$ 418,266 17,387 24,821 27,282 $ 487,756 $ 94,982 $ 3,212
		$ 627,013
		$ 100,522
		$ 1,501

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, where the Company still has accumulated losses, amount shall be reserved for making up the accumulated loss first.

2. The estimated amounts of the Company’s employee remuneration from January 1 to March 31, 2021 and 2020 were NT$11,766 and NT$$1,903, respectively. The remuneration to the Directors was estimated at $1,177 and $0, respectively. The aforementioned amount was presented as salary expense in the book.

The period from January 1 to March 31, 2021 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 2020 were NT$40,144 and NT$4,014 respectively, which will be paid in cash. The employees remuneration and the remuneration of directors recognized in the financial reports for 2020 were NT$40,144 and NT$4,014, respectively, which were consistent with the amounts as resolved by the Board of Directors. As of March 31, 2021, the remunerations to the employees and Directors pending payment for 2020 amounted to $40,144 and $4,014, respectively, as presented as “other payables” in the financial statements.

The above information on the remuneration of employees and directors approved by the Board of Directors of the Company can be obtained on MOPS.

(XXIII) Financial costs

II)Financial costs
Interest expenses on bank loans Interest expenses on lease liabilities	January1 to March 31,2021 $ 2,005 1,480 3,485	January1 to March 31,2020
		$ 9,890 1,990
		11,880

~40~

(XXIV) Income tax

Income tax expense

come tax expense
Components of income tax expenses: January1 to March 31,2021 Income Tax of the current period Income tax arising from current income $ 70,006 Income tax (over)estimates of previous years 1,909 Total income of the current period 71,915 Deferred income tax: The original value and reversal of temporary differences ( 2,925) Income tax expense $ 68,990	January1 to March 31,2020
	$ (

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

~41~

(XXV) Earnings per share (EPS)

arnings per share (EPS)
Basic earnings per share Net income for the period attributable to the common shareholders of the parent company Diluted earnings per share Net income for the period attributable to the common shareholders of the parent company Effect of potentially dilutive common shares: Employee remuneration Net income for the period attributable to the common shareholders of the parent company plus the effect of potential common shares Basic earnings per share Net income for the period attributable to the common shareholders of the parent company Diluted earnings per share Net income for the 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	January1 to March 31,2021
	After-tax amount	The weighted average number of outstanding shares (1000 shares)	Earnings per share(NT$)
	$ 168,992	$ 518,346	$ 0.33
	168,992 -	518,346 1,064	$ 0.33
	$ 168,992	519,410
	After-tax amount	The weighted average number of outstanding shares (1000 shares)	Earnings per share(NT$)
	$ 18,543	$ 518,346	$ 0.04
	18,543 -	518,346 3,609	$ 0.04
	$ 18,543	521,955

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(XXVI) Supplementary information on cash flow

Investment activities with partial cash payment:

Purchase of property, plant and equipment Add: equipment payable at the beginning of the period Less: equipment payable at the end of the period Effect on foreign currency exchange differences Amount paid in the period	January1 to March 31,2021 $ 35,020 105,069 ( 50,245) 294 $ 90,138	January1 to March 31,2020
		$ 111,644 30,733 ( 8,402) ( 39) $ 133,936

(XXVII) Changes in liabilities from financing activities

January 1 Changes in financing cash flow Effect of exchange rate changes Other non-cash changes March 31 January 1 Changes in financing cash flow Effect of exchange rate changes Other non-cash changes March 31			2021	2021
	Short-term borrowings $ 1,568,333 ( 427,699) ( 3,906) - $ 1,136,728	Lease liabilities $ 220,959 ( 8,529) ( 109) ( 11,945)		Total liabilities from financing activities
				$ 1,789,292 ( 436,228) ( 4,015) ( 11,945)
			$ 200,376	$ 1,337,104
	Short-term borrowings $ 1,573,950 144,528 13,701 - $ 1,732,179		Lease liabilities $ 295,287 ( 5,052) ( 2,869) ( 14,649)	Total liabilities from financing activities
				$ 1,869,237 139,476 10,832 ( 14,649)
			$ 272,717	$ 2,004,896

VII. Related Party Transactions

(I) Related party’s name and relationship

Related Party Name Relationship with the Group Hon Hai Precision Industry Co., Ltd. and subsidiaries (Hon Hai and Other groups that impose subsidiaries) significant influence on the Group Sharp Corporation and subsidiaries (Sharp and subsidiaries) Other related parties Foxconn Technology Corporation and subsidiaries (FTC and Other related parties subsidiaries) General Interface Solution Limited Other related parties Cyber TAN Technology, Inc and Subsidiaries Other related parties Long Time Tech. Co., Ltd. Affiliates

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(II) Major transactions with related parties

1. Operating income

Operating income
January1 to March 31,2021 Other groups that impose significant influence on the Group - Hon Hai and subsidiaries $ 1,354,111 Other related parties - Sharp and subsidiaries 764,280 - Foxconn Technology Co., Ltd. and subsidiaries 5,942 $ 2,124,333	January1 to March 31,2020
	$ 2,030,024 30,558 17,949
	$ 2,078,531

The price and loan period were determined by both sides after consultation, except where there is no similar transaction for reference. For the remainders of the Group’s sale to abovementioned related parties, the price is similar to the sale price of other general customers. The Group’s period of payment for the related parties ranged from 30 to 120.

2. Purchase

Purchase	Purchase
Other groups that impose significant influence on the Group - Hon Hai and subsidiaries Other related parties - Sharp and subsidiaries - Foxconn Technology Co., Ltd. and subsidiaries		January1 to March 31,2021 $ 721,997 ( 916) 667,881 $ 1,388,962	January1 to March 31,2020
			$ 557,671 1,410,362 30,874
			$ 1,998,907

The above amount includes purchase, discount, and sale return. The purchase price and payment term were determined by both sides through consultation. The payment term offered by the Group to related parties ranged from 30 to 90 days on monthly settlement of open account

3. Receivables from related parties

account Receivables from related parties
Accounts receivable: With significant influence on the group - Hon Hai and subsidiaries Other related parties - Sharp and subsidiaries - Others Less: transfer to other receivables Allowance for loss		March 31,2021	December 31,2020	March 31,2020
		$ 1,944,245 689,650 91,980	$ 2,067,171 567,382 125,497	$ 3,560,739 82,991 309,640
		2,725,875 - ( 811)	2,760,050 - ( 881) $ 2,759,169	3,953,370 ( 8,278) ( 1,376) $ 3,943,716
		$ 2,725,064

The receivables from related parties were mainly from sales and purchases on behalf of the related parties. The payment term for sales to related parties ranged from 30 to 120 days. 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.

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4. Other receivables

her receivables
Other groups that impose significant influence on the Group - Hon Hai and subsidiaries Other related parties - Sharp and subsidiaries	March 31,2021	December 31,2020	March 31,2020
	$ 1,272 2,625	$ 1,332 1,684	$ 9,116 53
	$ 3,897	$ 3,016	$ 9,169

Other receivables from related parties were mainly receivables of advance payments for related parties and receivable discounts.

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 Corporation and subsidiaries	March 31,2021	December 31,2020	March 31,2020
	$ 1,161,045 - 445,099	$ 1,113,108 1,037 241,948	$ 1,391,590 543,256 31,146
	$ 1,606,144	$ 1,356,093	$ 1,965,992

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) Lease liabilities:

A. Ending balance

A. Ending balance
With significant influence on the group B. Interest expenses With significant influence on the group	March 31,2021	December	31,2020 113,332	March 31,2020
	$ 104,255	$		$ 137,170
	January1 to March 31,2021 $ 762		January1 to March 31,2020 $ 996

(III) Compensation of key management personnel

Short-term employee benefits Post-employment benefits Total	January1 to March 31,2021	January1 to March 31,2020
	$ 3,259 60	$ 3,215 60
	$ 3,319	$ 3,275

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VIII. Pledged Assets

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

Asset item		Book value		Guaranteepurpose
	March 31,2021	December 31,2020	March 31,2020
Other current assets - Pledge time deposit Other non-current assets - Pledge time deposit Property, plant, and equipment Investment property	$ 1,999 - 9,960 10,407	$ 720 1,306 10,411 10,813	$ 701 1,728 9,580 10,545	Issuing of letter of credit and customs deposit Customs deposit Guarantee mortgage for bank line overdraft (note) Guarantee mortgage for a bank line
	$ 22,366	$ 23,250	$ 22,554

Note: As of March 31, 2021, the land, buildings and structures above have been pledged as collateral for the overdraft facilities of financial institutions since 2005. The overdraft had been paid off, but the pledge has not been canceled.

IX. Significant Contingent Liabilities and Unrecognized Commitments

(I) Contingent matters

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

(II) Commitments

None.

X. Major Disaster Losses

None.

XI. Significant Subsequent Events

None.

XII. Others

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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 2021 is the same as that in 2020, both of which are committed to maintaining the net debt ratio below 70%.

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Financial instrument

1. Types of financial instruments

The book values of the financial assets measured at amortized cost classified as by the group as per IFRS 9 (including cash and cash equivalents, notes receivable, accounts receivables (including related parties), and other receivables as of March 31, 2021, December 31, 2020, and March 31, 2020 were NT$12,644,694, NT$12,986,273, and NT$12,350,744, respectively. The book values of financial liabilities measured at amortized cost classified as by the group (including short-term borrowings, accounts payable (including related parties), and other payables, were NT$6,750,938, NT$6,644,047 and NT$6,979,947, respectively. In addition, the book values of lease liabilities as of March 31, 2021, December 31, 2020, and March 31, 2020 were NT$200,376, NT$220,959, and NT$272,717, respectively. Please refer to notes 6(2) and (5) for the book values of financial assets/liabilities measured at fair value through profit or loss and financial assets measured at fair value through other comprehensive income.

1. 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.

• (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.

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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.

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 $ 112,603 USD: RMB 60,135 USD: MYR 55,545 Foreign operations USD: NTD 315,153 Financial liabilities Monetary item USD: NTD 114,908 USD: MYR 43,982 USD: RMB 12,905			March 31,2021
	Foreign currency (thousand)	Exchange rate	Book value (NTD)	Sensitivityanalysis
				Range of change	Impact on profit and loss
			$ 3,213,690 1,721,023 1,585,254 8,994,464 3,279,474 1,255,246 369,332
		28.54 6.5713 4.4194 28.54 28.54 4.4194 6.5713		1% 1% 1% 1% 1% 1%	$ 32,137 17,210 15,853 32,795 12,552 3,693

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Foreign currency (thousand) (foreign currency: functional foreign currency) Financial assets Monetary item USD: NTD $ 125,768 USD: RMB 52,794 USD: MYR 50,365 Foreign operations USD: NTD 313,825 Financial liabilities Monetary item USD: NTD 134,057 USD: MYR 30,972 USD: RMB 39,476 Foreign currency (thousand) (foreign currency: functional foreign currency) Financial assets Monetary item USD: NTD $ 164,772 USD: RMB 53,290 USD: MYR 47,103 Foreign operations USD: NTD 294,792 Financial liabilities Monetary item USD: NTD 134,491 USD: MYR 14,370 USD: RMB 16,081		December 31,2020	December 31,2020	December 31,2020
		Exchange rate	Book value (NTD)	Sensitivity	analysis
				Range of change	Impact on profit and loss
				1% 1% 1% 1% 1% 1%
		28.48 6.5249 4.0290 28.48 28.48 4.0290 6.5249	$ 3,581,873 1,500,053 1,434,395 8,937,740 3,817,943 882,083 1,121,645 March 31,2020		$ 35,819 15,001 14,344 38,179 8,821 11,216
		Exchange rate	Book value (NTD)	Sensitivityanalysis
				Range of change	Impact on profit and loss
				1% 1% 1% 1% 1% 1%
		30.23 7.0851 4.3141 30.23 30.23 4.3141 7.0851	$ 4,981,058 1,608,200 1,423,924 8,911,555 4,065,663 434,405 485,297		$ 49,811 16,082 14,239 40,657 4,344 4,853

D. Nature

The total amounts of exchange gains and losses (including realized and unrealized) recognized in the group's monetary items due to exchange rate fluctuations for the three months ended March 31, 2021 and 2020 were NT$13,417 in losses and NT$74,217 in gains, 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.

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• 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$29,826 and NT$23,161 respectively from January 1 to March 31, 2021 and 2020.

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:

  • (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. If the contract amount is overdue for more than 90 days under the conditions of payment, the Group shall deem it 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.

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• 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 91 ~ 180 days More than 180 days	March 31,2021	December 31,2020	March 31,2020
	$ 5,166,013 25,566 666 6,150	$ 5,303,552 20,552 257 6,162	$ 5,306,393 792,446 261 2,388 $ 6,101,488
	$ 5,198,395	$ 5,330,523

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 March 31, 2021, December 31 and March 31, 2020 were NT$0, NT$0, and NT$3, 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 March 31, 2021, December 31, and March 31, 2020 are as follows:

March 31,2021		Group1		Group2		Group3		Group4	Total
		0.04% $ 4,799,272 $ 1,920 Group1		0.04% $ 374,207		0.09% $ - $ - Group3		0.1%~100% $ 24,916 $ 7,912 Group4	$ 5,198,395 $ 9,982 Total
Expected loss rate Total Book value Allowance for loss December 31,2020
				$ 150 Group2
		0.04% $ 4,882,814 $ 1,953 Group1		0.04% $ 425,661		0.09% $ - $ - Group3		0.10%~100% $ 22,048 $ 4,959 Group4	$ 5,330,523 $ 7,082 Total
Expected loss rate Total Book value Allowance for loss March 31,2020
				$ 170 Group2
		0.03%~0.033% $ 5,266,746 $ 1,681	0.03%~0.033% $ 728,178 $ 239			0.07% $ 44 $ -		0.10%~1.00% $ 106,520 $ 4,709	$ 6,101,488 $ 6,629
Expected loss rate Total Book value Allowance for loss
				$ 239

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.

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• 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:

s as follows:
January 1 Recognition of impairment Effect on foreign currency exchange differences March 31	2021 $ 7,082 2,793 107 $ 9,982	2020
		$ 4,720 2,011 ( 99)
		$ 6,632

• L. All the group’s debt instrument investments measured at after-amortization cost as of March 31, 2021, December 31, and March 31, 2020 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.

(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.

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March 31, 2021 Non-derivative financial liabilities: Lease liabilities December 31, 2020 Non-derivative financial liabilities: Lease liabilities March 31, 2020 Non-derivative financial liabilities: Lease liabilities	Less than 1year	1 ~ 2years	2 ~ 5years	Total
	$ 74,940 Less than 1year	$ 74,940 1 ~ 2years	$ 58,489 2 ~ 5years	$ 208,369 Total
	$ 78,281 Less than 1year	$ 74,930 1 ~ 2years	$ 77,214 2 ~ 5years	$ 230,425 Total
	$ 85,593	$ 72,479	$ 128,870	$ 286,942

In addition to the above, the group's non-derivative financial liabilities are all due within the next year.

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Fair value information

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

2. 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 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.

3. 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.

4. 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.

5. 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:

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

nature is as follows:
March 31, 2021 Financial assets: Repetitive fair value Financial assets at FVTPL -Open-end funds Financial assets at FVTOCI - Equity securities Financial liabilities: Repetitive fair value Financial assets at FVTPL -Foreign exchange forward contracts December 31, 2020 Financial assets: Repetitive fair value Financial assets at FVTPL -Open-end funds -Foreign exchange forward contracts Financial assets at FVTOCI - Equity securities March 31, 2020 Financial assets: Repetitive fair value Financial assets at FVTPL -Open-end funds Financial assets at FVTOCI - Equity securities		Level 1	Level 2 $ - $ - 4,081 Level 2 $ - 3,334 $ 3,334 $ - Level 2 $ - $ -	Level 3			Total
		$ 36,896		$ - $ 1,237,514			$ 36,896 $ 2,982,610
		$ 1,745,096
		-		- Level3			4,081 Total
		Level 1
		$ 50,916 -		$ - -			$ 50,916 3,334
		$ 50,916		$ - $ 1,201,559			$ 54,250 $ 2,367,713
		$ 1,166,154
		Level 1			Level 3		Total
		$ 71,213		$ - $ 1,778,915	$ -		$ 71,213 $ 2,316,071
		$ 537,156

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• (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:

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

• 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 March 31, 2021 and 2020.

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1. The following table shows the changes in level 3 from January 1 to March 31, 2021 and 2020:

2020:
January 1 Profit recognized in other comprehensive income The refund of cost and share payment from investee Effect on foreign currency exchange differences March 31	Equitysecurities
	2021	2020 $ 1,751,723 13,058 - 14,134 $ 1,778,915
	$ 1,201,559 33,554 ( 173) 2,574
	$ 1,237,514

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 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.

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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 March 31, 2021	Evaluation techniques	Significant unobservable input value	Interval (weighted average)	Relationship between input value and fair value
	$ 1,167,834 69,680 Fair value on December 31, 2020	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	23% 1.32 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
	$ 1,134,447 67,112 Fair value on March31,2020	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	24% 1.27 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 andfairvalue
	$ 1,722,746 56,169	Net asset value method Market method	Lack of market liquidity discount Price–to-book ratio Lack of market liquidity discount	22% 1.04 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	March 31, 2021 Lack of market liquidity discount March 31, 2021 Price–to-book ratio Period Input value	±1% ±1% Change
			$ 4,754 ($ 4,754) $ 528 ($ 528) Recognized in other comprehensive income
			Favorable change	Unfavorable change
Equity instruments Equity instruments Financial assets	December 31, 2020 Lack of market liquidity discount December 31, 2020 Price–to-book ratio Period Input value	±1% ±1% Change
			$ 3,668 ($ 3,668) $ 527 ($ 527) Recognized in other comprehensive income
			Favorable change	Unfavorable change
Equity instruments Equity instruments	March 31, 2020 Lack of market liquidity discount March 31, 2020 Price–to-book ratio	±1% ±1%
			$ 4,884 $ 538	($ 4,884) ($ 538)

XIII. Additional Disclosures

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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).

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1. Relationship, significant transactions and their amounts between the company and its subsidiaries: Please refer to Table 6.

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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.

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Information on investments in mainland China

1. Basic information: Please refer to Table 8.

2. 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.

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Information on major shareholders

Information of major shareholders: Please refer to Table 9.

XIV. Operation Department Information

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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 segments 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.

~59~

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Segments Information

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

is as follows:
January1 to March 31,2021	Electronic Components		Consumer Electronics and Computer Peripherals	Total
Segment Revenue Segment profit and loss January 1 to March 31, 2020 Segment Revenue Segment profit and loss	$ 2,416,121 $ 144,058		$ 2,455,874	$ 4,871,995 $ 252,745 Total
			$ 108,687
	Electronic Components		Consumer Electronics and Computer Peripherals
	$ 3,483,567 $ 113,142		$ 1,229,302	$ 4,712,869 $ 89,333
			$ 23,809

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.

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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 operating segments are as follows:

Income	January1 to March 31,2021	January1 to March 31,2020
Profit and loss of the segments to be reported Other profit and loss Pre-tax profit and loss of continuing operation segments	$ 252,745 16,738 $ 269,483	$ 89,333 ( 43,970)
		$ 45,363

~60~

Pan-International Industrial Corp. and Subsidiaries

Loans to others

January 1 to March 31, 2021

Table 1

Table 1
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)	Transaction Amounts	Interest Rate	Loan nature (Note 4)	Business Transaction Amounts (Note 5)	Reason for short-term financing (Note 6)	Provision for allowance for loss for bad debt	Col	lateral	Loans limits for individual entities (Note 7)	Unit: NTD thousand (unless otherwise noted) Total loan limit (Note 7) Remarks
													Name	Value
0	Pan-International Industrial Corp.	PAN GLOBAL HOLDING CO., LTD	Other receivables - related parties	Yes	$ 313,940	$ 313,940	$ 285,400	1.00%	Short- term financing	$ -	Operating turnover	None.	None.	None.	$ 1,156,879	$ 4,627,515

• 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 numerically from 1.

• Note 2: Dealing items include receivables from affiliated enterprises, receivables from related parties, transactions with shareholders, prepayments, provisional payments, etc. if the nature is a loan to others.

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

• Note 4: The loan shall be recognized under this item if the nature of the fund denotes a business transaction or 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 disclosed. The business transaction amount refers to the total amount of business transactions between the lending company and the borrower in the most recent year.

• Note 6: If the nature of the loan denotes a necessity for short-term financing, the reason and the purpose of the loan by the borrower must be specified, such as loan repayment, purchase of equipment, business turnover, etc.

• Note 7: Total loan amount: For loans lent out to companies or entities 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 case by case 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.

Page 1 Table 1 ~61~

Table 2

Pan-International Industrial Corp. and Subsidiaries

Endorsement/guarantee provided

January 1 to March 31, 2021

Serial No. (Note 1) Name of company of the endorsement/guarantee 1 P.I.E INDUSTRIAL BERHAD 1 P.I.E INDUSTRIAL BERHAD

Unit: NTD thousand (unless otherwise noted) Guaranteed Party Endorsement/guara ntee limit for a single enterprise (Note 3) Maximum endorsement/guar antee balance of the period (Note 4) Endorsement/guara ntee balance of the period (Note 5) Transactio n Amounts (Note 6) Amount of endorsement/gua rantee backed by assets Ratio of the cumulative endorsement/gua rantee amount to the net value in the latest financial report Endorsement/guar antee limit (Note 3) Endorsement/gua rantee from the parent company to subsidiary (note 7) Endorsement/gua rantee from subsidiary to parent company (note 7) Endorsement/gua rantee to entities in the Mainland China (Note 7) Remarks Company name Relation (Note 2) PANINTERNATIONA L ELECTRONICS(M) SDN.BHD. 2 1,617,863 1,118,417 1,118,417 58,467 $ - 9.67 3,235,726 Y N N PANINTERNATIONA L WIRE&CABLE(M) SDN.BHD. 2 1,617,863 88,239 87,518 3,301 - 0.76 3,235,726 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 numerically from 1.

• Note 2: There are 7 types of relations between the endorsement guarantor and the borrower 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 worth.

• 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 worth.

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 subparagraph 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 disclosed.

• 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 entities in Mainland China.

Page 2 Table 1 ~62~

Pan-International Industrial Corp. and Subsidiaries

Table 3

Marketable securities held at period end (excluding investment in subsidiaries, associates, and jointly controlled entities).

March 31, 2021

Table 3
HoldingCompanyName	Type of marketable securities	Name of marketable securities	Relationship with the Holding Company	financial report Account		March 31, 2020		Unit: NTD thousand (unless otherwise noted)
					Number of shares/beneficiary certificates	Book value	Shares Ratio	Fair value	Remarks
Pan-International Industrial Corp. Pan-International Industrial Corp. Pan-International Industrial Corp. P.I.E. INDUSTRIAL BERHAD P.I.E. INDUSTRIAL BERHAD P.I.E. INDUSTRIAL BERHAD 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.	Common share Common share Common share Open-end funds Open-end funds Open-end funds Common share Common share Common share A share B share	Innolux Corporation WK Technology Fund Syntrend Creative Park Co., Ltd. EASTSPRING INVESTMENTS ISLAMIC INCOME FUND AFFIN HWANG AIIMAN MONEY MARKET FUND I AFFIN HWANG USD CASH FUND Lico Technology Corporation UER HOLDINGS CORPORATION FSK HOLDINGS LIMITED CYBERTAN TECHNOLOGY CORP. CYBERTAN TECHNOLOGY CORP.	None. None. The largest shareholder of this company is the largest shareholder of Hon Hai Precision Co., Ltd. None. None. None. None. The investment company is evaluated by the equity method; the same as the Company. The investment company is evaluated by the equity method; the same as the Company. The investment company is evaluated by the equity method; the same as the Company. 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 at FVTPL - Current Financial assets at FVTPL - Current Financial assets at FVTPL - 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 other comprehensive income - Non-current Financial assets measured at fair value through other comprehensive income - Current Financial assets measured at fair value through other comprehensive income - Non-current	82,705,987 4,219 12,831,500 23,028 7,966,570 254,818 3,400,000 1,781,979 50,400,000 17,467,125 28,498,993	$ 1,745,096 - 69,680 82 29,370 7,444 - - 95,170 513,561 559,103	0.83 0.42 5.23 - 0.03 0.76 2.73 8.22 17.50 6.41 10.46	$ 1,745,096 - 69,680 82 29,370 7,444 - - 95,170 513,561 559,103

Page 3 Table 1 ~63~

Table 4

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 or more.

March 31, 2021

Table 4
Buyer/Seller	Related Party	Relation		Transacti	on Details		Differences in transaction terms from those of general transactions and reasons		Note/Accounts Re	Unit: NTD thousand (unless otherwise noted) ceivable(Payable) Remarks Percentage over total notes and accounts receivable (payable) 16 7 10 ( 27) ( 9) ( 26) 98 ( 41) ( 4) ( 78)
			Purchase(Sale)	Amount	Percentage over total purchase(sale)	Creditperiod	Unit Price	Creditperiod	Balance	Percentage over total notes and accounts receivable (payable)
Pan-International Industrial Corp. Pan-International Industrial Corp. Pan-International Industrial Corp. Pan-International Industrial Corp. Pan-International Industrial Corp. Pan-International Industrial Corp. New Ocean Precision Component (Jiangxi) Co., Ltd. Pan-International Electronics (Malaysia) Sdn. BHD. Pan-International Electronics (Malaysia) Sdn. BHD. Pan-International Electronics (Malaysia) Sdn. BHD. Tekcon Electronics Corporation	Hongfutai Precision Electronics (Yantai) Co., Ltd. Hongfujin Precision Industry (Wuhan) Co., Ltd. FIH (Hongkong) Mobil Limited Honghuasheng Precision Electronics (Yantai) Co., Ltd. Dongguan Pan-International Precision Electronics Co., Ltd. Foxconn Interconnect Technology Limited Foxconn Interconnect Technology Limited S&O ELECTRONICS (Malaysia) SDN.BHD. Foxconn Technology Co., Ltd Hon Hai Precision Industry Co., Ltd. Foxconn Interconnect Technology Limited	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 Company’s indirect reinvestment Subsidiary of the Company’s indirect reinvestment Subsidiary of the indirect reinvestment of Hon Hai Precision Industry Co., Ltd. Subsidiary of the indirect reinvestment of Hon Hai Precision Industry Co., Ltd. Other related parties 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.	Sales Sales Sales Purchase Purchase Purchase Sales Sales Purchase Purchase Purchase	$ 322,413 109,933 159,606 667,094 289,947 314,092 454,869 744,306 667,876 194,612 129,460	15 5 8 34 15 16 100 40 39 11 73	Monthly settlement 90 days T/T Monthly settlement 90 days T/T Monthly settlement 90 days T/T Monthly settlement 90 days Monthly settlement 90 days Monthly settlement 90 days Monthly settlement 60 days T/T Monthly settlement of 30 days Monthly settlement 90 days Monthly settlement 90 days Monthly settlement 120 days	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 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	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	$ 351,004 149,009 224,287 ( 478,801) ( 158,467) ( 445,262) 536,270 ( 445,090) ( 44,714) ( 252,319)	16 7 10 ( 27) ( 9) ( 26) 98 ( 41) ( 4) ( 78)

Page 4 Table 1 ~64~

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 or more.

March 31, 2021

Table 5

Table 5
Company Name Related Party Relation Balance of accounts receivable from related parties Turnover Rate Pan-International Industrial Corp. Hongfutai Precision Electronics (Yantai) Co., Ltd. Subsidiary of the indirect reinvestment of Hon Hai Precision Industry Co., Ltd. 351,004 2.27 Pan-International Industrial Corp. Hongfutai Precision Electronics (Wuhan) Co., Ltd. Subsidiary of the indirect reinvestment of Hon Hai Precision Industry Co., Ltd. 149,099 3.52 Pan-International Industrial Corp. FIH (Hongkong) Mobil Limited Subsidiary of the indirect reinvestment of Hon Hai Precision Industry Co., Ltd. 224,287 2.83 Pan-International Electronics Inc. Hon Hai Precision Industry Co., Ltd. A company that evaluates the company by the equity method 155,421 2.26 Honghuasheng Precision Electronics (Yantai) Co., Ltd. Pan-International Industrial Corp. The Company’s parent company 478,801 5.15 Dongguan Pan-International Precision Electronics Co., Ltd. Pan-International Industrial Corp. The Company’s parent company 158,467 5.60 New Ocean Precision Component (Jiangxi) Co., Ltd. Foxconn Interconnect Technology Limited Subsidiary of the indirect reinvestment of Hon Hai Precision Industry Co., Ltd. 536,270 3.75 Pan-International Electronics(M) Sdn.Bhd. S&O Electronics (Malaysia) Sdn Bhd Other related parties 668,969 4.84	Ove	Unit: NTD thousand (unless otherwise noted) rdue Accounts receivable from related parties recovered after the period Provision for bad debt Actions Taken Payment received after the period 187,773 141 Payment received after the period 35,089 60 Payment received after the period 95,612 90 Payment received after the period 103,186 62 Payment received after the period 478,801 192 Payment received after the period 81,577 - Payment received after the period 319,895 215 Payment received after the period 110,207 818
	Amount - - 12,451 - - - - -

Page 5 Table 1 ~65~

Table 6

Pan-International Industrial Corp. and Subsidiaries

Significant Inter-company Transactions during the Reporting Period

March 31, 2021

Unit: NTD thousand (unless otherwise noted)

Table 6		Unit: NTD thousand (unless otherwise noted)
Serial No. (Note 1) Transaction Company Counterparty Relationship with the transaction parties (Note 2) 0 Pan-International Industrial Corp. Honghuasheng Precision Electronics (Yantai) Co., Ltd. 1 0 Pan-International Industrial Corp. Dongguan Pan-International Precision Electronics Co., Ltd. 1 0 Pan-International Industrial Corp. PAN GLOBAL HOLDING CO., LTD. 1 1 Dongguan Pan-International Precision Electronics Co., Ltd. Pan-International Electronics Inc. 2 2 Honghuasheng Precision Electronics (Yantai) Co., Ltd. Pan-International Electronics Inc. 2	Description of Transa	ctions(note 4)
	Account Amount Purchase 667,094 Purchase 289,947 Other receivables 407,560 Accounts receivable 158,467 Accounts receivable 478,801	Transaction Terms Percentage over consolidated total revenue or total assets (note 3) Note 7 14 Note 7 6 Not applicable 2 Note 7 1 Note 7 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 parties; 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, the subsidiary does not have to repeat the disclosure of the transaction; if a subsidiary discloses a transaction with another subsidiary, the other subsidiary does not have to disclose the transaction again):

• (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 the item is classified as an asset or liability, the ratio is calculated with its ending balance as a percentage over the total consolidated assets; if the item is classified as an income, the ratio is calculated with the income accumulated at the end of the period as a percentage over 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.

Page 6 Table 1 ~66~

Pan-International Industrial Corp. and Subsidiaries

The name and location of the investee company and other relevant information (excluding investee companies in Mainland China)

January 1 to March 31, 2021

Table 7

Table 7
Investor	Investor Company	Location	Main Businesses and Products	Original Inves	tment Amount	As	of March 31, 2	020	Net income (loss) of the Investee for currentperiod	Unit: NTD thousand (unless otherwise noted) Investment gains and losses recognized in the currentperiod Remarks
				March 31, 2020	End of lastyear	Shares	Ratio	Book value
Pan-International Industrial Corp. Pan-International Industrial Corp. Pan-International Industrial Corp. 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. Tekcon Electronics Corporation	Pan Global Holding Co., Ltd. Pan-International Electronics Inc. Yen Yung International Investment Co., Ltd Tekcon Electronics Corporation P.I.E. INDUSTRIAL BERHAD (PIB) GREAT HAVEN HOLDINGS LTD. (GHH) BRISTECH INTERNATIONAL LTD. (BIL) TEAM UNION INTERNATIONAL LTD. (TUI) EAST HONEST HOLDINGS LIMITED (EHH) Long Time Tech. Co., Ltd. Long Time Tech. Co., Ltd.	The British Virgin Islands USA Taiwan Taiwan Malaysia The British Virgin Islands The British Virgin Islands Hong Kong Hong Kong Taiwan Taiwan	Holding company Sale of electronic products Investment company Manufacturing and sale of connectors for electronic signal cables Holding company Holding company Holding company Holding company Holding company Electronic Components Electronic Components	$ 3,472,484 73,142 473,997 393,898 39,813 550,822 - 468,056 3,059,984 646,000 250,000	$ 3,472,484 73,142 473,997 393,898 39,813 550,822 - 468,056 3,059,984 646,000 250,000	$ 12,220 28,000 44,316,236 21,960,504 197,459,985 19,800,000 9,600,000 3,120,001 665,799,420 20,187,500 7,812,500	100 100 100 83.58 51.42 100 100 100 100 16.82 5.44	$ 8,741,959 195,423 312,737 192,654 1,663,809 77,115 625,142 761,524 4,356,514 574,919 222,492	$ 68,936 (766 ) (3,643 ) (4,472 ) 66,356 2 (13,288 ) 14,946 56,894 (1,061 ) (1,061 )	$ 68,936 (766 ) (3,643 ) (3,738 ) 34,120 2 (13,288 ) 14,946 56,894 (5,150 ) (1,993 )	Note 1 Note 2 Note 3 Note 4 Note 5

Note 1: The Company mainly reinvests indirectly through PIB in Pan-International Electronics (Malaysia) Sdn. 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. It was dissolved in September 2020. 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 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 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 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.

Page 7 Table 1 ~67~

Pan-International Industrial Corp. and Subsidiaries Mainland China investment information - Basic information

January 1 to March 31, 2021

Table 8

Table 8
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 beginningof theperiod	Investmen current	t Flows of period	Cumulative outward remittance of the investment amount from Taiwan in the period end	Net income (loss) of the Investee for currentperiod	% 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	Unit: NTD thousand (unless otherwise noted) Investment gains repatriated as of the end of the period Remarks
					Outward	Inward
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	$ 468,056 7,934,120 273,984 2,448,732	2 2 2 2	$ 356,750 777,715 - 2,525,790	$ - - - -	$ - - - -	$ 356,750 777,715 - 2,525,790	$ 14,946 ( 5,239 ) ( 13,288 ) 20,939	100 16.87 100 100	$ 14,946 - ( 13,288 ) 20,939	$ 761,524 1,072,664 625,142 3,550,410	$ - - - -	Note 6 Note 4

Page 8 Table 1 ~68~

Companyname	The cumulative amount of outward remittance of investment from Taiwan to mainland China at the end of the period (notes 5 and 6) $ 4,046,715	Investment amount approved by the Investment Commission, MOEA	In compliance with the investment limit stipulated by the Investment Commission, MOEA for investment in mainland China. (note 7).
Pan-International Industrial Corp.		$ 5,777,620	$ -

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: The field of investment gains and losses recognized in the current period is recognized under the audited financial statements.

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: As of March 31, 2021, the Company has the following investment withdrawal cases approved by the Investment Commission of the Ministry of Economic Affairs:

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

• Note 6: In November 2011, the Company was granted a document, IC(II) No. 10000518690 by the Investment Commission, MOEA that approved the rescission of the unexecuted investment amount of US$500 thousand for Dongguan Pan-International Precision Electronics Co., Ltd.

• On October 30, 2014, the Company was granted a document, IC(II) No. 10300233110 by the Investment Commission, MOEA that approved the transferring of Cyberport Digital Tech (Qingdao) Co., Ltd, and 41 other companies to Le Zhiwan Ranch Holding Investment Ltd. (Samoa);

In March 2017, the Company was granted a document, IC(II) No. 10600038030 by the Investment Commission, MOEA that approved the rescission of unexecuted investment amount of US$5.2 million for UER Battery Technology (Shenzhen) Co., Ltd..

• Note 7: In December 2019, the Company was granted a document, IDB No. 10820432920 by the Industrial Development Bureau, MOEA, certifying the compliance with the operation scope of operation headquarters, and no investment limit is required from December 4, 2019 to December 3, 2022.

Page 8 Table 2 ~69~

Pan-International Industrial Corp. and Subsidiaries

Information on major shareholders

March 31, 2021

Table 9

Table 9
Name of major shareholders	Sh	are
	Number of shares held	Shares Ratio
Hon Hai Precision Industry Co., Ltd.	107,776,254	20.79%

Hon Hai Precision Industry Co., Ltd.

• 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 stake of more than 5% of the Company’s common and special shares that have completed dematerialized registration and delivery (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 quantity of shares (including treasury shares) that have completed dematerialized registration and delivery is 518,346,282 shares = 518,346,282 (common shares) + 0 (preferred shares).

Page 9 Table 1 ~70~