PI - Interim / Quarterly Report 2021

Pan-International Industrial Corp. and Subsidiaries

CONSOLIDATED FINANCIAL STATEMENTS AND REVIEW REPORT OF INDEPENDENT ACCOUNTANTS

Third 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.

~1~

Pan-International Industrial Corp. and Subsidiaries

CONSOLIDATED FINANCIAL STATEMENTS AND REVIEW REPORT OF

INDEPENDENT ACCOUNTANTS 3[rd] QUARTER IN 2021 AND 2020

Item One. Cover Two. Table of Contents Three. Independent Auditors’ Review Report Four. Consolidated Balance Sheets Five. Consolidated Statements of Comprehensive Income Six. Consolidated Statements of Changes Equity Seven. Consolidated Statements of Cash Flows Eight. Notes to consolidated financial reports I. Organization and operations II. The Authorization of Financial Reports III. Application of Newly Released and Revised Standards and Interpretations IV. Summary of Significant Accounting Policies V. Major Sources of Uncertainty in Significant Accounting Judgments, Estimates, and Assumptions VI. Summary of Significant Accounting Items VII. Related Party Transactions VIII. Pledged Assets IX. Significant Contingent Liabilities and Unrecognized Commitments X. Major Disaster Losses XI. Significant Subsequent Events XII. Others XIII. Additional Disclosures XIV. Operating Departments Information	Page
	1 2 3 ~ 4 5 ~ 6 7 ~ 8 9 10 11 ~ 74 11 11 11 ~ 12 12 ~ 27 27 ~ 28 28 ~ 45 45 ~ 47 48 49 49 49 49 ~ 59 59 ~ 60 60 ~ 73

Item
One.
Cover
Two.
Table of Contents
Three. Independent Auditors’ Review Report
Four. Consolidated Balance Sheets
Five.
Consolidated Statements of Comprehensive Income
Six.
Consolidated Statements of Changes Equity
Seven. Consolidated Statements of Cash Flows
Eight. Notes to consolidated financial reports
I.
Organization and operations
II.
The Authorization of Financial Reports
III.
Application of Newly Released and Revised Standards and
Interpretations
IV.
Summary of Significant Accounting Policies
V.
Major Sources of Uncertainty in Significant Accounting Judgments,
Estimates, and Assumptions
VI.
Summary of Significant Accounting Items
VII.
Related Party Transactions
VIII. Pledged Assets
IX.
Significant Contingent Liabilities and Unrecognized Commitments
X.
Major Disaster Losses
XI.
Significant Subsequent Events
XII.
Others
XIII. Additional Disclosures
XIV. Operating Departments Information

Page

1
2
3 ~ 4
5 ~ 6
7 ~ 8
9
10
11 ~ 74
11
11
11 ~ 12
12 ~ 27
27 ~ 28
28 ~ 45
45 ~ 47
48
49
49
49
49 ~ 59
59 ~ 60
60 ~ 73

~2~

Independent Auditors’ Review Report

(2021) Cai-Shen-Bao-Zi No. 21002117

To Pan-International Industrial Corp.

Foreword

The consolidated balance sheet of Pan-International Industrial Corp. and its subsidiaries as of September 30, 2021 and 2020, the consolidated comprehensive income statement for 2021 and 2020 from July 1 to September 30 and from January 1 to September 30, the consolidated statement of changes in equity and consolidated cash flow statement for 2021 and 2020 from January 1 to September 30, as well as the notes to the consolidated financial statements (including the summary of significant accounting policies), have been duly reviewed by us. It is the responsibility of the management to prepare properly expressed consolidated financial reports in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and IAS 34 “Interim Financial Reporting” recognized and released by the Financial Supervisory Commission, and our responsibility is to conclude the consolidated financial reports based on the review results.

Scope

Except for retaining the statement in the basis paragraph of the qualified opinion, we conducted the review in accordance with the "Review of Financial Statements" of the Auditing Standards Bulletin No. 65. The procedures to be carried out in reviewing the consolidated financial 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 September 30, 2021 and 2020 (including investment by equity method) were NT$3,432,746 thousand and NT$2,862,346 thousand respectively, accounting for 15% and 14% of the total consolidated assets, while the total liabilities were NT$1,861,019 thousand and NT$1,496,706 thousand respectively, accounting for 20% and 19% of the total consolidated liabilities; their comprehensive profit and loss from July 1 to September 30, 2021 and 2020, and from January 1 to September 30, 2021 and 2020, were NT$4,467 thousand and NT$33,249 thousand, and NT$16,803 thousand and NT$57,209 thousand, accounting for 32%, 5%, 2%, and 16% of the consolidated comprehensive income, respectively.

~3~

Conclusion

According to our review results and the review report by other independent auditors (please refer to the Other item), except that the financial reports of the non-significant subsidiaries and investments by equity method mentioned in the basis paragraph of the qualified opinion, if audited by us, may lead to adjustments to the consolidated financial reports, it is not found that the consolidated financial reports above have not been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the “Interim Financial Reporting” of IAS 34 recognized and released by the Financial Supervisory Commission which may lead to the inability to properly express the consolidated financial status of Pan-International Industrial Corp. and its subsidiaries as of September 30, 2021 and 2020, the consolidated financial performance from July 1 to September 30, 2021 and 2020, and from January 1 to September 30, 2021 and 2020, and consolidated cash flow from January 1 to September 30, 2021 and 2020.

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 September 30, 2021 and 2020, were NT$5,239,707 thousand and NT$4,758,530 thousand, respectively, accounting for 23% and 24% of the total consolidated assets. Their operating revenue for the period from July 1 to September 30, 2021 and 2020, and from January 1 to September 30, 2021 and 2020, were NT$1,598,190 thousand, NT$1,599,098 thousand, NT$5,026,132 thousand, and NT$3,095,424 thousand, respectively, accounting for 23%, 30%, 30%, and 21% of the consolidated operating revenue.

PwC Taiwan

Yung-Chien Hsu Independent Auditors Min-Chuan Feng

Former Financial Supervisory Commission, Executive Yuan Approval No.: (84)Tai-Cai-Cheng-VI No. 13377 Former Securities and Futures Bureau, Financial Supervisory Commission, Executive Yuan Approval No.: Jin-Guan-Cheng-VI-Zi No. 0960038033 November 10, 2021

~4~

Pan-International Industrial Corp. and Subsidiaries Consolidated Balance Sheets

September 30, 2021, December 31, 2020, and September 30, 2020

(the consolidated balance sheet as of September 30, 2021 and 2020, was only reviewed but not audited according to generally accepted auditing standards)

Assets	Note	September 30, 2021 Amount % $ 6,830,001 30 18,040 - 40 - 3,357,863 14 2,953,069 13 724,683 3 3,412,276 15 198,111 1 17,494,083 76 1,902 - 2,173,133 10 763,315 3 1,894,727 8 301,471 1 216,000 1 35,980 - 79,678 1 16,278 - 5,482,484 24 $ 22,976,567 100	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 September 30, 2020 Amount % $ 6,818,552 34 51,284 - 131 - 2,762,335 14 2,312,976 11 85,707 - 2,113,226 11 167,607 1 14,311,818 71 - - 2,694,147 13 799,782 4 1,608,784 8 304,182 2 233,772 1 36,371 - 91,484 1 20,310 - 5,788,832 29 $ 20,100,650 100
		Amount $ 6,830,001 18,040 40 3,357,863 2,953,069 724,683 3,412,276 198,111 17,494,083 1,902 2,173,133 763,315 1,894,727 301,471 216,000 35,980 79,678 16,278 5,482,484 $ 22,976,567	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 $ 6,818,552 51,284 131 2,762,335 2,312,976 85,707 2,113,226 167,607 14,311,818 - 2,694,147 799,782 1,608,784 304,182 233,772 36,371 91,484 20,310 5,788,832 $ 20,100,650
Current assets 1100 Cash and cash equivalents 1110 Financial assets at FVTPL - Current 1150 Net notes receivable 1170 Net accounts receivable 1180 Accounts receivable - Related parties net 1200 Other receivables 130X Inventory 1470 Other current assets 11XX Total current assets Non-Current Assets 1510 Financial assets measured at fair value through income - Non-current 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 (3) 6 (3) 7 6 (5) and 7 6 (4) 8 6 (2) 6 (5) 6 (6) and 8 6 (7) and 8 6 (8) and 8 6 (9) and 8 6 (10) 8

(To be Continued)

~5~

Pan-International Industrial Corp. and Subsidiaries Consolidated Balance Sheets

September 30, 2021, December 31, 2020, and September 30, 2020

(the consolidated balance sheet as of September 30, 2021 and 2020, was only reviewed but not audited according to generally accepted auditing standards)

Unit: NTD thousand

						September 30,2021	September 30,2021			December 31,2020	December 31,2020			September 30,2020	September 30,2020
	LIABILITIES AND EQUITY		Note			Amount	%			Amount	%			Amount	%
	Current liability
2100	Short-term borrowings	6	(11)		$	1,727,367		8	$	1,568,333		8	$	1,309,500	7
2130	Contractual liabilities - Current	6	(19)			693,238		3		395,622		2		431,573	2
2150	Notes payable					101,247		-		-		-		-	-
2170	Accounts payable					3,919,854	17			2,813,815	14			2,741,765	14
2180	Accounts payable - Related	7
	parties					1,362,982		6		1,356,093		7		1,691,780	8
2200	Other payables	6	(12)			974,180		4		905,806		4		823,582	4
2230	Current tax liabilities					214,141		1		309,283		1		170,205	1
2280	Lease liabilities - Current	7				78,572		-		73,157		-		74,550	-
2399	Other current liabilities - Other					34,338		-		28,282		-		14,743	-
21XX	Total current liabilities					9,105,919	39			7,450,391	36			7,257,698	36
	Non-current liabilities
2570	Deferred tax liabilities					271,376		1		269,971		1		266,050	1
2580	Lease liabilities - Non-current	7				105,301		1		147,802		1		162,296	1
2600	Other non-current liabilities	6	(13)			25,908		-		23,166		-		52,188	-
25XX	Total non-current
	liabilities					402,585		2		440,939		2		480,534	2
2XXX	Total liabilities					9,508,504	41			7,891,330	38			7,738,232	38
	Equity attributable to owners of
	the parent company
	Share capital	6	(14)
3110	Common share capital					5,183,462	23			5,183,462	25			5,183,462	26
	Capital surplus	6	(15)
3200	Capital surplus					1,503,606		6		1,503,606		8		1,503,606	7
	Retained earnings	6	(16)
3310	Legal reserve					1,138,619		5		1,062,342		5		1,062,342	5
3320	Special reserve					1,349,724		6		1,312,274		6		1,312,274	7
3350	Unappropriated earnings					4,030,764	18			3,453,829	17			3,159,793	16
	Other equities	6	(17)
3400	Other equities			(		1,351,653 ) (		6) (		1,349,724) (		7) (		1,348,414 ) (	7)
31XX	Total equity attributable to
	owners of the parent
	company					11,854,522	52			11,165,789	54			10,873,063	54
36XX	Non-controlling interests	6	(18)			1,613,541		7		1,622,505		8		1,489,355	8
3XXX	Total equity					13,468,063	59			12,788,294	62			12,362,418	62
	Significant Contingent Liabilities	9
	and Unrecognized Commitments
3X2X	Total liabilities and equity				$	22,976,567	100		$	20,679,624	100		$	20,100,650	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

~6~

Pan-International Industrial Corp. and Subsidiaries Consolidated Statements of Comprehensive Income January 1 to September 30, 2021 and 2020

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

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

				July 1 to September	July 1 to September	July 1 to September		July 1 to September	July 1 to September	July 1 to September			January 1 to			January 1 to
					30,2021				30,2020			September 30,2021			September 30,2020
	Item	Note			Amount	%			Amount	%			Amount	%		Amount	%
4000	Operating revenue	6 (19) and 7		$	6,902,497	100		$	5,412,622	100		$	17,027,101	100	$	15,061,690	100
5000	Operating cost	6 (4) (22) and 7	(		6,163,163) (	89) (			4,599,734) (	85)(			15,148,189) (	89 ) (		13,586,742) (	90)
5900	Operating profit margin				739,334	11			812,888	15			1,878,912	11		1,474,948	10
	Operating expenses	6 (22)
6100	Selling and marketing expenses		(		73,474) (		1) (		56,639) (		1) (		187,125) (	1 ) (		160,783) (	1)
6200	General and administrative expenses		(		174,747) (		3) (		205,182) (		4) (		474,397) (	3 ) (		546,199) (	4)
6300	Research and development expenses		(		99,251) (		1) (		74,311) (		2) (		235,576) (	1 ) (		186,833) (	1)
6450	Expected credit impairment benefit (loss)	12 (2)			6,570		- (		4,777)		- (		2,566)	- (		16,931)	-
6000	Total operating expenses		(		340,902) (		5) (		340,909) (		7)(		899,664) (	5 ) (		910,746) (	6)
6900	Operating profit				398,432		6		471,979		8		979,248	6		564,202	4
	Non-operating income and expense
7100	Interest income				17,283		-		25,712		-		66,738	-		88,008	-
7010	Other income	6 (20)			48,167		1		39,427		1		85,239	1		113,213	1
7020	Other gains and losses	6 (21)			36,276		- (		67,834) (		1)		26,482	-		5,194	-
7050	Financial costs	6 (23)	(		3,113)		- (		4,877)		- (		9,377)	- (		31,808)	-
7060	Share of profits and losses of affiliated companies and	6 (6)
	joint ventures recognized by the equity method		(		20,963)		- (		3,908)		- (		41,239)	- (		38,772)	-
7000	Total non-operating income and expenses				77,650		1 (		11,480)		-		127,843	1		135,835	1
7900	Net income before tax				476,082		7		460,499		8		1,107,091	7		700,037	5
7950	Income tax expense	6 (24)	(		138,999) (		2) (		125,378) (		2)(		291,886) (	2 ) (		218,758) (	2)
8200	Net income for the period			$	337,083		5	$	335,121		6	$	815,205	5	$	481,279	3

(To be Continued)

~7~

Pan-International Industrial Corp. and Subsidiaries Consolidated Statements of Comprehensive Income January 1 to September 30, 2021 and 2020

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

															Unit: NTD thousand	Unit: NTD thousand
												(except	in NTD		for earnings per	share)
				July 1 to September			July 1 to September					January 1 to			January 1 to
					30,2021			30,2020			September 30,2021			September 30,2020
	Item	Note			Amount	%		Amount	%			Amount	%		Amount	%
	Items that will not be reclassified subsequently to profit
	or loss
8316	Unrealized evaluation profit and loss of equity	6 (17)
	instrument investment measured at fair value through
	other comprehensive income		($		278,940 ) (	4)	$	173,500		3	$	606,901	3	$	137,425	1
8349	Income tax related to items not reclassified	6 (17)			-	-		-		- (		36,885)	-		-	-
8310	Total of items not reclassified to profit or loss		(		278,940)(	4)		173,500		3		570,016	3		137,425	1
	Items that may be reclassified subsequently to profit or
	loss:
8361	Currency translation difference	6 (17) (18)	(		44,018)(	1)		110,033		2 (		345,087) (	2 ) (		252,317) (	2)
8360	Total of items that may be reclassified subsequently to
	profit or loss:		(		44,018)(	1)		110,033		2 (		345,087) (	2 ) (		252,317) (	2)
8300	Other comprehensive income (net)		($		322,958)(	5)	$	283,533		5	$	224,929	1 ($		114,892) (	1)
8500	Total comprehensive income in the current period			$	14,125	-	$	618,654	11		$	1,040,134	6	$	366,387	2
	NET PROFIT ATTRIBUTABLE TO:
8610	Owners of the parent company			$	290,623	4	$	294,699		5	$	690,759	4	$	468,737	3
8620	Non-controlling interests				46,460	1		40,422		1		124,446	1		12,542	-
				$	337,083	5	$	335,121		6	$	815,205	5	$	481,279	3
	Total comprehensive income attributable to:
8710	Owners of the parent company		($		14,072 )	-	$	566,412	10		$	1,025,017	6	$	432,597	2
8720	Non-controlling interests				28,197	-		52,242		1		15,117	- (		66,210)	-
				$	14,125	-	$	618,654	11		$	1,040,134	6	$	366,387	2
	Earnings per share (EPS)	6 (25)
9750	Basic earnings per share			$		0.56	$		0.57		$		1.33	$		0.90
9850	Diluted earnings per share			$		0.56	$		0.57		$		1.33	$		0.90

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

~8~

Pan-International Industrial Corp. and Subsidiaries Consolidated Statements of Changes Equity January 1 to September 30, 2021 and 2020

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

					Equitya	ttributable to owners of theparent com	ttributable to owners of theparent com	ttributable to owners of theparent com	pany				Unit Non-controlling interests	: N
Common share capital	Capital		surplus			Retained earnings			O	ther 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
$ 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 - - - 102,932 - - - $ 1,062,342 $ 1,062,342 - - - 76,277 - - - - - $ 1,138,619		$ 883,205 - - - - 429,069 - - $ 1,312,274 $ 1,312,274 - - - - 37,450 - - - - $ 1,349,724	$ 3,741,403 468,737 - 468,737 ( 102,932 ) ( 429,069 ) ( 518,346 ) - $ 3,159,793 $ 3,453,829 690,759 - 690,759 ( 76,277 ) ( 37,450 ) ( 336,925 ) - 641 336,187 $ 4,030,764	($ 1,061,916 ) - ( 173,565 ) ( 173,565 ) - - - - ($ 1,235,481 ) ($ 1,163,132 ) - ( 235,758 ) ( 235,758 ) - - - - - - ($ 1,398,890 )	( $ 250,358 ) - 137,425 137,425 - - - - ( $ 112,933 ) ( $ 186,592 ) - 570,016 570,016 - - - - - ( 336,187 ) $ 47,237	$ 10,958,812 468,737 ( 36,140 ) 432,597 - - ( 518,346 ) - $ 10,873,063 $ 11,165,789 690,759 334,258 1,025,017 - - ( 336,925 ) - 641 - $ 11,854,522		$ 1,619,122 12,542 ( 78,752 ) ( 66,210 ) - - - ( 63,557 ) $ 1,489,355 $ 1,622,505 124,446 ( 109,329 ) 15,117 - - - ( 24,081 ) - - $ 1,613,541	$ 12,577,934 481,279 ( 114,892 ) 366,387 - - ( 518,346 ) ( 63,557 ) $ 12,362,418 $ 12,788,294 815,205 224,929 1,040,134 - - ( 336,925 ) ( 24,081 ) 641 - $ 13,468,063

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

~9~

Pan-International Industrial Corp. and Subsidiaries

Consolidated Statements of Cash Flows

January 1 to September 30, 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 benefits of financial assets and liabilities measured at fair
value through the income

Interest expense

Interest income
Dividend income

Income from rental reduction
Share of profits and losses of affiliated companies recognized by
the equity method

Unrealized foreign exchange gain
Net loss from the disposal of property, plant and equipment

Gain on disposal of investments

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
Notes payable
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 (outflow) from operating activities
Cash flows from investing activities
Acquisition of financial assets at FVTPL
Proceeds from disposal of financial assets measured at fair value through
other comprehensive income

Refund of capital investment in financial assets measured at fair value
through other comprehensive income
Acquisition of subsidiaries (deducting cash acquired)

Purchase property, plant and equipment assets

Proceeds from disposal of property, plant and equipment
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
Cash dividend payment

Interest paid
Number of cash dividends paid to non-controlling interests

Net cash outflow from financing activities
Impact of changes in the exchange rate on cash and cash equivalents
Increase (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 September
30,2021
January 1 to September
30,2020
$ 1,107,091 $ 700,037
6 (22)
307,981
296,143
12 (2)
2,566
16,931
6 (21)
(
10,323 ) (
23,597 )
6 (23)
9,377
31,808
(
66,738 ) (
88,008 )
6 (20)
(
25,408 ) (
11,678 )
(
3,090 ) (
4,308 )
6 (6)
41,239
38,772
(
47,822 ) (
40,800 )
6 (21)
5,225
453
6 (21)
(
14,520 )
-
44,306
50,461
3,686
6,074
(
828,129 ) (
239,453 )
(
32,150 )
1,758,368
(
40,213 )
46,061
(
1,079,241 )
332,497
(
24,303 )
19,839
(
17,358 )
-
615,465 (
528,906 )
24,941 (
484,109 )
1,556 (
153,327 )
492 (
25,221 )
297,616
168,462
1,498
4,739
273,744
1,871,238
(
393,071 ) (
245,515 )
(
119,327 )
1,625,723
(
1,902 )
-
6 (5)
239,883
-
814
-
6 (27)
(
100,004 )
-
6 (27)
(
465,008 ) (
266,996 )
11,405
38,861
1,276
87
(
3,800 ) (
1,599 )
66,738
88,272
25,408
11,678
(
225,190 ) (
129,697 )
6 (27)
206,856 (
223,650 )
(
49,387 ) (
42,206 )
6 (16)
(
336,925 ) (
518,346 )
(
7,940 ) (
30,412 )
6 (18)
(
61,002 ) (
63,557 )
(
248,398 ) (
878,171 )
(
121,326 )
186
(
714,241 )
618,041
7,544,242
6,200,511
$ 6,830,001$ 6,818,552

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

~10~

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

II. The Authorization of Financial Reports

This consolidated financial report was announced after being submitted to the Board of Directors on November 10, 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:

Effective date of the release of the International Accounting Standards New issued/amended/revised standards and interpretations Board Amendment to IFRS 4 "Extension of temporary exemption from the January 1, 2021 application of IFRS 9" Amendments to the IFRS 9, IAS 39, IFRS 7, IFRS 4, and IFRS 16 second January 1, 2021 stage “Interest rate benchmark reform” Amendment to IFRS 16 "COVID-19-Related Rent Concessions After April 1, 2021 (Note) June 30, 2021" Note: FSC has authorized early application from January 1, 2021 onward.

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

~11~

Newissued/amended/revised standards and interpretations	Effective date of the release of the International Accounting Standards Board January 1, 2022 January 1, 2022 January 1, 2022 January 1, 2022 have no significant impact
Amendment to IFRS 3 "Index to conceptual framework" 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 The Group has assessed that the standards and interpretations above on the financial position and financial performance of the Group.

(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 issued/amended/revised standards and interpretations	Effective date of the release of the International Accounting Standards Board
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” Amendments to IAS 12 regarding "Deferred Tax related to Assets and Liabilities arising from a Single Transaction"	To be decided by IASB January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023

recognized by the FSC:

New issued/amended/revised standards and interpretations

Effective date of the
release of the International
Accounting Standards
Board

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”
Amendments to IAS 12 regarding "Deferred Tax related to Assets and
Liabilities arising from a Single Transaction"

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

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

Except for the following important items, this consolidated financial report is prepared at historical cost:
(1) Financial assets and liabilities (including derivatives) are measured at fair value through income.
(2) Financial assets measured at fair value through other comprehensive income.

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

Principles for preparation of consolidated financial reports
(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.
(2) Intra-group transactions, balances and unrealized gains and losses have been eliminated. Necessary adjustments have been made to the accounting policies of the subsidiaries which are consistent with the policies adopted by the group.
(3) The components of profit and loss and other comprehensive income belong to the owners and non- controlling interests of the parent company; the total amount of comprehensive income also belongs to the owners and non-controlling interests of the parent company, even if it results in a loss of the balance of non-controlling interests.
(4) If the change in the shareholding of a subsidiary does not result in a loss of control (transactions with a non- controlling interest), it is treated as an equity transaction, that is, a transaction with the owner. The difference between the adjustment amount of a noncontrolling interest and the fair value of the consideration paid or received is directly recognized under equity.
(5) When the group loses control over a subsidiary, the remaining investment in this subsidiary is re-measured at fair value and is regarded as the fair value of the originally recognized financial assets or the cost of the investment in the originally recognized affiliated enterprise or joint venture, and the difference between the fair value and the book value is recognized as the current profit and loss. All amounts previously recognized in other comprehensive income related to the subsidiary are reclassified as profit and loss.

~13~

2. Subsidiaries listed in the consolidated financial reports:

Name	Name	Main Business	%	ofOwnership	ofOwnership	Explanation
			September 30,2021	December 31,2020	September 30,2020
Pan- International Electronics Inc. Pan- International Electronics Inc. Pan- International Electronics Inc.	PAN- INTERNATIONAL 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	100 100 100	(5) (1) (2) (4) (5) (6) (3) (5) (6)

(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) New Ocean Precision Components (Ganzhou) Co., Ltd., a 2nd-tier subsidiary of Yen Yung International Investment Co., Ltd., was resolved in April 2021.
(4) Dongguan Pan-International Precision Electronics Co., Ltd., a 2nd-tier subsidiary of PGH, acquired an 80% equity in Wuhu Ruichang Electric System Co., Ltd. in June 2021. Hence the new investee was included in this consolidated financial report.
(5) The disclosure of the indirect reinvestment of the above subsidiaries in companies in Mainland China is shown in Table 9.
(6) The financial reports of some insignificant subsidiaries of the Group have not been reviewed by an independent auditor.

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Subsidiaries not included in the consolidated financial reports: No such situation.
Different adjustment and treatment methods of subsidiary accounting period: No such situation.
Major limitation: No such situation.
Subsidiaries with significant non-controlling interests in the group

The total amount of non-controlling interests of the Group as of September 30, 2021, December 31, 2020, and September 30, 2020 were NT$1,613,541, NT$1,622,505, and NT$1,489,355 respectively. The following is the information about the significant noncontrolling interests of the Group and its subsidiaries:

Investee	Main business location				Non-controllinginterests	Non-controllinginterests
		September 30, 2021 Amount Shareholding percentage			December 31, 2020 Amount Shareholding percentage		September 30, 2020 Amount Shareholding percentage
P.I.E. INDUSTRIAL BERHAD	Malaysia	$1,535,639		49	$1,583,933	49	$1,449,964 49

Summary financial information of subsidiaries: Balance sheet

Balance sheet
Current assets Non-Current Assets Current liability Non-current liabilities Net total assets	September 30, 2021	December 31,2020	September 30, 2020
		$ 3,683,194 864,567 ( 1,256,703) ( 30,596) $ 3,260,462
	$ 4,136,819 974,536 ( 1,917,916) ( 32,388) $ 3,161,051		$ 3,786,925 862,046 ( 1,634,075) ( 30,203) $ 2,984,693

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Comprehensive Income Statement

Comprehensive Income Statement	Comprehensive Income Statement	Comprehensive Income Statement	Comprehensive Income Statement	Comprehensive Income Statement
July1 to September 30,2021 Income $ 1,598,190 Net income before tax 117,761 Income tax expense ( 29,499) Net income for the period 88,262 Other comprehensive income (after tax) ( 37,571) Total comprehensive income in the current period $ 50,691 Total comprehensive profit and loss attributable to non-controlling interests $ 24,626 January1 to September 30,2021 Income $ 5,026,132 Net income before tax 328,547 Income tax expense ( 84,550) Net income for the period 243,997 Other comprehensive income (after tax) ( 218,407) Total comprehensive income in the current period $ 25,590 Total comprehensive profit and loss attributable to non-controlling interests $ 12,432 Cash Flow Statement January1 to September 30,2021 Net Cash inflow (outflow) from business activities ($ 13,495) Net cash outflow from investment activities ( 226,828) Net cash outflow from financing activities 152,642 Effects of exchange rate changes on the balance of cash and cash equivalents ( 72,084) Decrease in cash and cash equivalents in the current period ( 159,765) Cash and cash equivalents at the beginning of the period 1,012,026 Cash and cash equivalents at the end of the year $ 852,261					July1 to September 30,2020 $ 1,599,098 120,007 ( 24,437) 95,570 ( 21,519) $ 117,089 $ 56,882 January1 to September 30,2020 $ 3,095,424 98,008 ( 21,656) 76,352 ( 160,255) $ 83,903 $ 40,760 January1 to September 30,2020
		( (	(
		$		25,590
		$		12,432
				September 30,2021 13,495) 226,828) 152,642 72,084) 159,765) 1,012,026 852,261
	($ ( (					($ 80,880) ( 142,924) 135,279 ( 36,703) ( 234,026) 1,227,197 $ 993,171
	(
	$

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(IV) Foreign exchange conversion

This consolidated financial report is presented in NTD, the functional currency of the company, as the presentation currency.
Foreign currency transactions and balances
(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.
(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.
(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.
(4) All exchange gains and losses are reported in "other gains and losses" in the income statement.
Conversion of foreign operations
(1) For all group individuals and affiliated enterprises whose functional currency is different from the presentation currency, their operating results and financial status shall be converted into the presentation currency in the following ways:
- A. The assets and liabilities expressed in each balance sheet are converted at the spot exchange rate on the balance sheet date;
- B. The income and expense losses expressed in each consolidated income statement are converted at the current average exchange rate; and
- C. All exchange differences arising from the conversion are recognized in other comprehensive income.
(2) 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.
(3) 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

Assets that meet one of the following conditions are classified as current assets:
(1) The asset is expected to be realized in the normal business cycle or intended to be sold or consumed.

~17~

(2) Held mainly for trading purposes.
(3) Expected to be realized within 12 months after the balance sheet date.
(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.

Liabilities that meet one of the following conditions are classified as current liabilities:
(1) Those that are expected to be settled in the normal business cycle.
(2) Held mainly for trading purposes.
(3) Expected to be settled within 12 months after the balance sheet date.
(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

Financial assets that are not measured at amortized cost or at fair value through other comprehensive income.
The group adopts transaction day accounting for financial assets measured at fair value through income in compliance with trading practices.
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.
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

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:
(1) The financial asset is held under the business model to collect contractual cash flow and for sale.
(2) The cash flow generated on a specific date from the contractual terms of the financial assets is entirely the interest in the payment of the principal and the outstanding principal amount.

~18~

The group adopts transaction day accounting for financial assets measured at fair value through other comprehensive income in accordance with trading practices.
The group measures their fair value plus transaction costs at the time of original recognition, and is subsequently measured at fair value:
(1) Changes in the fair value of equity instruments are recognized in other comprehensive income. At the time of derecognition, the accumulated profits or losses previously recognized in other comprehensive income shall not be reclassified to profit or loss but transferred to retained earnings. When the right to receive dividends is established, the economic benefits related to dividends are likely to flow in and the number of dividends can be reliably measured, the group recognizes dividend income in profit or loss.
(2) Changes in the fair value of debt instruments are recognized in other comprehensive income, and the impairment loss, interest income, and foreign currency exchange gain or loss before derecognition are recognized in profit or loss. At the time of derecognition, the accumulated gain or loss previously recognized in other comprehensive income is reclassified from equity to profit or loss.

(IX) Financial assets measured at after-amortization cost

Refers to those who meet the following conditions at the same time:
(1) Holding the financial asset under the business model to collect the contractual cash flow.
(2) The cash flow generated on a specific date from the contractual terms of the financial assets is entirely the interest in the payment of the principal and the outstanding principal amount.
The group adopts transaction day accounting for financial assets measured at afteramortization cost in accordance with trading practices.
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.
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

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.
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.

~19~

(XI) Impairment of financial assets

On each balance sheet date, the Group takes into account all reasonable and verifiable information (including forward-looking) for financial assets measured at amortized cost. If the credit risk does not increase significantly after the original recognition, the loss allowance is measured at 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 in the period.

(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) 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.

~20~

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.

(XVI) Property, plant, and equipment

Property, plant and equipment are recorded based on the acquisition cost, and the relevant interest during the acquisition and construction period is capitalized.
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.
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.
The group reviews the residual value, service life, and depreciation method of each asset at the end of each fiscal year. If the expected value of the residual value or service life is different from the previous estimate, or the expected consumption pattern of the future economic benefits contained in the asset has changed significantly, then from the date of the change, it shall be handled in accordance with the provisions of the International Accounting Standard No. 8 "Accounting Policies, Changes and Errors in Accounting Estimates." The service life of each asset is as follows:

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

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

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.
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. Lease payments include fixed payments, less any lease incentives receivable.
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.
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.

(XVIII) 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.

(XIX) Intangible asset

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

(XX) Impairment of non-financial assets

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.
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.
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.

~22~

(XXI) 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.

(XXII) Note payable and accounts payable

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.
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.

(XXIII) Financial liabilities measured at fair value through the income

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:
(1) They belong to a mixed (combined) contract; or
(2) Inconsistent measurement or recognition can be eliminated or significantly reduced; or
(3) They are a tool to manage and evaluate the performance on a fair value basis in accordance with a written risk management policy.
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.

(XXIV) Derecognition of financial liabilities

The Group will derecognize financial liabilities if the specified contractual obligation has been performed, canceled, or expired.

(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.

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(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.

2. Pension

(1) Defined allocation plan

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

(2) Defined benefit plan
- A. The net obligation under a defined benefit plan is calculated by discounting the future benefit amount earned by the employee in the current or past service, and the fair value of the plan asset is deducted from the present value of the defined benefit obligation on the balance sheet date. The net obligation of defined benefits is calculated annually by an actuary using the projected unit benefit method. The discount rate is determined by reference to the market yield of high-quality corporate bonds that are consistent with the currency and period of the defined benefit plan on the balance sheet date; in countries where there is no deep market for high-quality corporate bonds, the market yield of government bonds (on the balance sheet date) is used.
- B. The remeasured amount arising from a defined benefit plan is recognized in other comprehensive income in the period in which it occurs and is expressed in retained earnings.
- C. The interim pension cost is calculated based on the pension cost rate determined at the end of the previous fiscal year on the basis from the beginning until the end of the current period. If there are major market changes and major reductions, settlements, or other major one-off events after the ending date, adjustments shall be made and relevant information revealed in accordance with the aforementioned policies.
Employee remuneration and director’s remuneration

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

(XXVIII) Income tax

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.

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

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(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

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.
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.

(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) Business combination

The Group accounts for business combinations using the acquisition method. Consideration of business combination is determined based on the fair value of assets transferred, the fair value of liabilities created or borne, and the fair value of equity instruments issued. The amount of consideration includes the fair value of any asset or liability given rise by contingent consideration. Acquisition-related costs are expensed at the time incurred. Identifiable assets acquired and liabilities borne in a business combination are measured at fair value as of the acquisition date. The Group accounts for acquisitions on a transaction-by-transaction basis. Components of non-controlling interests that represent shareholders’ current ownership and shareholders’ proportional entitlement to a business’ net assets in the event of liquidation are measured at fair value or based on the percentage of non-controlling interests relative to the acquirer’s net identifiable assets as of the acquisition date; all other components of noncontrolling interests are measured at fair value as of the acquisition date.

~26~

If the sum of consideration, acquiree’s non-controlling interests, and fair value of acquiree’s equity currently held exceeds the fair value of identifiable assets acquired and liabilities borne from the acquisition, the excess is recognized as goodwill on the acquisition date; if the fair value of identifiable assets acquired and liabilities borne from the acquisition exceeds the sum of consideration, acquiree’s non-controlling interests, and fair value of acquiree’s equity currently held, the shortfall is recognized through current profit and loss on the acquisition date.

(XXXIII)Operating 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:

Being responsible for fulfilling the promise of providing a particular product or service.
Bearing the inventory risk before transferring the particular product or service to the customer, or bearing the inventory risk after transferring the control.
Having the discretion to fix the price of a particular product or service.

(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:

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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	September 30,2021	December 31,2020	September 30,2020
	$ 1,033 5,423,207 1,405,761	$ 5,619 6,241,449 1,297,174	$ 5,902 5,581,002 1,231,648
	$ 6,830,001	$ 7,544,242	$ 6,818,552

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.
The bank deposits pledged by the Group as of September 30, 2021, December 31, 2020, and September 30, 2020 are classified as other current assets and other non-current assets. Please refer to Note 8 for details.

(II) Financial assets at FVTPL

refer to Note 8 for details. Financial assets at FVTPL
Item Current items: Mandatory financial assets measured at fair value through income Open-end funds Foreign exchange forward contracts Non-current items: Mandatory financial assets measured at fair value through income Non-listed, OTC, or emerging stocks	September 30,2021	December 31,2020	September 30,2020
	$ 9,253 8,787	$ 50,916 3,334	$ 42,074 9,210
	$ 18,040	$ 54,250	$ 51,284
	$ 1,902	$ -	$ -

For the financial products held by the Group from July 1 to September 30, 2021 and 2020, and from January 1 to September 30, 2021 and 2020, a net gain of NT$12,276, NT$5,148, NT$10,323, and NT$$23,597 were recognized respectively.

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

explained as follows:
Derivative financial assets	September30,2021
	Contract amount (Nominalprincipal) (NT$ thousand)	Contractperiod
Current items: Foreign exchange forward contracts Derivative financial assets	RMB(BUY) 202,855 USD(SELL) 31,000 December 31,2030	July 2021 - November 2021
	Contract amount (Nominalprincipal) (NT$ thousand)	Contractperiod
Current items: Foreign exchange forward contracts Derivative financial assets	RMB(BUY) 72,783 USD(SELL) 11,000 September 30,2020	December 2020 - January 2021
	Contract amount (Nominalprincipal) (NT$thousand)	Contractperiod
Current items: Foreign exchange forward contracts	RMB(BUY) 275,440 USD(SELL) 40,000	September 2020 - November 2020

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.

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

(III) Notes and accounts receivable

Notes and accounts receivable
Item Note receivable Accounts receivable Less: Allowance for impairment loss	September 30,2021		December 31,2020	September 30,2020
	$ $	40 3,366,878 ( 9,015) 3,357,903	$ 41 2,570,432 ( 6,201) $ 2,564,272	$ $	131 2,770,265 ( 7,930) 2,762,466

The group does not hold any collateral.
The balance of accounts receivable and notes receivable as of September 30, 2021, December 31, 2020, and September 30, 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.
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 September 30, 2021, December 31, 2020, and September 30, 2020 is the book value of each type of notes and accounts receivable.
Please refer to note 12(2) for details of relevant credit risk information.

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(IV) Inventory

Inventory	Inventory
September 30,2021 Cost Allowance for valuation losses Book value Raw materials $ 1,611,495 ($ 79,444) $ 1,532,051 Work in process 975,033 ( 23,596) 951,437 Finished products 1,031,640 (102,852) 928,788 $ 3,618,168 ($ 205,892) $ 3,412,276 December 31,2020 Cost Allowance for valuation losses Book value Raw materials $ 980,033 ($ 92,289) $ 887,744 Work in process 511,455 ( 10,825) 500,630 Finished products 671,899 ( 93,077) 578,822 $ 2,163,387 ($ 196,191) $ 1,967,196 September 30,2020 Cost Allowance for valuation losses Book value Raw materials $ 1,292,748 ($ 125,314) $ 1,167,434 Work in process 515,417 ( 19,228) 496,189 Finished products 534,355 ( 84,752) 449,603 $ 2,342,520 ($ 229,294) $ 2,113,226 The cost of inventory recognized as expense losses by the Group in the current period: July1 to September 30,2021 July1 to September 30,2020 Cost of inventory sold $ 6,157,343 $ 4,658,717 Inventory valuation loss ( rebound profit) 16,315 ( 47,272) Income from sales of scrap materials ( 10,495) ( 11,711) $ 6,163,163 $ 4,599,734 January1 to September 30,2021 January1 to September 30,2020 Cost of inventory sold $ 15,192,960 $ 13,535,842 Valuation loss (rebound profit) of inventory ( 11,524) 76,720 Income from sales of scrap materials ( 33,247) ( 25,820) $ 15,148,189 $ 13,586,742			September 30,2021
		Cost	Allowance for valuation losses	Book value
		$ 1,611,495 975,033 1,031,640	($ 79,444) ( 23,596) (102,852) ($ 205,892)	$ 1,532,051 951,437 928,788 $ 3,412,276
		$ 3,618,168
			December 31,2020
		Cost	Allowance for valuation losses		Book value
		$ 980,033 511,455 671,899	($ 92,289) ( 10,825) ( 93,077) ($ 196,191)	$ 887,744 500,630 578,822 $ 1,967,196
		$ 2,163,387
			September 30,2020
		Cost	Allowance for valuation losses	Book value
		$ 1,292,748 515,417 534,355	($ 125,314) ( 19,228) ( 84,752) ($ 229,294)	$ 1,167,434 496,189 449,603 $ 2,113,226
		$ 2,342,520
	$ 6,157,343 $ 4,658,717 16,315 ( 47,272) ( 10,495) ( 11,711) $ 6,163,163 $ 4,599,734
	January1 to September 30,2021 January1 to September 30,2020
	$ 15,192,960 $ 13,535,842 ( 11,524) 76,720 ( 33,247) ( 25,820)
	$ 15,148,189 $ 13,586,742

From January 1 to September 30, 2021 and July 1 to September 30, 2020, 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.

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

Item September 30,2021 Non-current items: Equity instruments Listed and OTC stocks $ 1,406,002 Non-listed, OTC, or emerging stocks 767,131 Total $ 2,173,133	December 31, 2020 September 30, 2020 $ 1,166,154 $ 962,361 1,201,559 1,731,786 $ 2,367,713 $ 2,694,147	December 31, 2020 September 30, 2020 $ 1,166,154 $ 962,361 1,201,559 1,731,786 $ 2,367,713 $ 2,694,147
Non-current items: Equity instruments Listed and OTC stocks Non-listed, OTC, or emerging stocks Total		$ 962,361 1,731,786
		$ 2,694,147

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 September 30, 2021 and 2020.
The Group disposed equity instruments totaling NT$761,284 in fair value in 2021, for which a cumulative gain on disposal of NT$336,187 was reclassified from other equities into unappropriated earnings. As of September 30, 2021, the Group still had NT$521,401 of disposal proceeds that remained uncollected and were presented as other receivables. Please refer to Table 4 in Note 13 for details concerning this transaction.
None of the Group’s financial assets measured at fair value through other comprehensive income were pledged as of September 30, 2021, December 31, 2020, and September 30, 2020.

(VI) Investment by equity method

2020. Investment by equity method
Long Time Tech. Co., Ltd.	September 30,2021	December 31,2020	September 30,2020
	$ 763,315	$ 804,554	$ 799,782

The Group’s investment by the equity method on January 1 to September 30, 2021 and 2020, were evaluated based on financial reports compiled by the affiliated enterprise which were not reviewed by an independent auditor during the same period.
The share of operating results of the group’s individual non-significant affiliated companies is summarized as follows:

is summarized as follows:
Current net loss of continuing business units Total comprehensive income in the current period Current net loss of continuing business units Total comprehensive income in the current period	July 1 to September 30, 2021 ($ 20,963) ($ 20,963) January 1 to September 30, 2021 ($ 41,239) ($ 41,239)	July 1 to September 30, 2020
		($ 3,908)

		($ 3,908)
		January 1 to September 30, 2020
		($ 38,772)

		($ 38,722)

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.
Please refer to Note 8 for details on investment by equity method that the Group had placed as collateral for contractual liabilities.

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(VII) Property, plant, and equipment

January 1, 2021 Cost Cumulative depreciation 2021 January 1 Addition Acquisition through business combination Disposal Transfer Depreciation expenses Net exchange difference September 30 September 30, 2021 Cost Cumulative depreciation January 1, 2020 Cost Cumulative depreciation 2020 January 1 Addition Disposal Transfer Depreciation expenses Net exchange difference September 30 September 30, 2020 Cost Cumulative depreciation	Land Buildings Equipment Others Unfinished construction and equipment to be accepted Total
	$ 24,010 $ 577,238 $ 4,673,728 $ 687,857 $ 28,766 $ 5,991,599 - ( 348,789) ( 3,425,163) ( 546,963) - ( 4,320,915)
	$ 24,010 $ 228,449 $ 1,248,565 $ 140,894 $ 28,766 $ 1,670,684
	$ 24,010 $ 228,449 $ 1,248,565 $ 140,894 $ 28,766 $ 1,670,684 - 11,584 200,672 74,120 135,837 422,213 - 35,954 69,078 4,936 - 109,968 - ( 629) ( 8,735) ( 3,100) ( 4,166) ( 16,630) - - - 2,104 ( 2,104) - - ( 13,507) ( 194,383) ( 30,313) - ( 238,203) ( 856) ( 13,232) ( 32,736) ( 2,085) ( 4,396) ( 53,305)
	$ 23,154 $ 248,619 $ 1,282,461 $ 186,556 $ 153,937 $ 1,894,727
	$ 23,154 $ 635,377 $ 4,886,158 $ 758,760 $ 153,937 $ 6,457,386 -( 386,758) ( 3,603,697) ( 572,204) -( 4,562,659)
	$ 23,154 $ 248,619 $ 1,282,461 $ 186,556 $ 153,937 $ 1,894,727
	Land Buildings Equipment Others Unfinished construction and equipment to be accepted Total
	$ 24,394 $ 642,881 $ 4,457,094 $ 671,793 $ 104,729 $ 5,900,891 -( 341,713) ( 3,344,344) ( 532,306) -( 4,218,363)
	$ 24,394 $ 301,168 $ 1,112,750 $ 139,487 $ 104,729 $ 1,682,528
	$ 24,394 $ 301,168 $ 1,112,750 $ 139,487 $ 104,729 $ 1,682,528 - 13,672 226,701 21,676 31,326 293,375 - - ( 30,280) ( 1,507) ( 7,527) ( 39,314) - ( 68,191) 96,567 2,500 ( 103,183) ( 72,307) - ( 11,511) ( 183,365) ( 24,342) - ( 219,218) ( 581) ( 10,798) ( 20,161) ( 1,537) ( 3,203) ( 36,280)
	$ 23,813 $ 224,340 $ 1,202,212 $ 136,277 $ 22,142 $ 1,608,784
	$ 23,813 $ 563,654 $ 4,589,570 $ 667,273 $ 22,142 $ 5,866,452 -( 339,314) ( 3,387,358) ( 530,996) -( 4,257,668)
	$ 23,813 $ 224,340 $ 1,202,212 $ 136,277 $ 22,142 $ 1,608,784

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Please refer to Note 6(26) for detailed explanation on increases in property, plant and equipment following the business combination in the 2[nd] quarter of 2021.
Please refer to Note 8 for details of the Group’s pledged property, plant and equipment.
(VIII) Lease transaction - Lessee
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.
The book value and recognized depreciation expense information of the right-of-use assets are as follows:

are as follows:
Land Houses Land Houses Land Houses	September30,2021	December31,2020		September30,2020
	Book value	Book	value	Book value
	$ 123,675 177,796	$	73,017 215,162	$ 72,764 231,418
	$ 301,471	$	288,179	$ 304,182
	July1 to September 30,2021		July1 to September 30,2020
	Depreciation expenses $ 984 19,352		Depreciation expenses $ 623 20,292
	$ 20,336 January 1 to September 30, 2021 Depreciation expenses $ 2,347 58,040 $ 60,387		$ 20,915 January 1 to September 30, 2020 Depreciation expenses $ 1,875 60,669 $ 62,544

Increases in right-of-use assets for the periods January 1 to September 30, 2021 and 2020, were reported at NT$79,535 and NT$0, respectively. The NT$79,535 increase in right-ofuse assets for the periods January 1 to September 30, 2021 was the result of business combination. Please refer to Note 6(26) for details.
The information on profit and loss items related to lease contracts is as follows:

Items affecting current profit and loss Interest expenses on lease liabilities Expenses of short-term lease contracts Items affecting current profit and loss Interest expenses on lease liabilities Expenses of short-term lease contracts	July1 to September 30,2021 July1 to September 30,2020
	$ 1,342 $ 1,715 3,872 5,729 January1 to September 30,2021 January1 to September 30,2020
	$ 4,200 $ 5,529 9,933 14,414

The total cash outflow from the leases of the Group for the periods July 1 to September 30, 2021 and 2020, and January 1 to September 30, 2021 and 2020, were NT$22,853, NT$23,581, NT$59,529, and NT$60,257, respectively.

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6. Please refer to Note 8 for details of the Group’s right-of-use assets pledged as collateral.

(IX) Investment property

Investment property	Investment property
Land Buildings Total January 1, 2021 Cost $ 112,596 $ 221,048 $ 333,644 Cumulative depreciation and impairment - ( 99,086) ( 99,086) $ 112,596 $ 121,962 $ 234,558 2021 January 1 $ 112,596 $ 121,962 $ 234,558 Depreciation expenses - ( 4,468) ( 4,468) Net exchange difference ( 6,058) ( 8,032) ( 14,090) September 30 $ 106,538 $ 109,462 $ 216,000 September 30, 2021 Cost $ 106,538 $ 210,456 $ 316,994 Cumulative depreciation and impairment - ( 100,994) ( 100,994) $ 106,538 $ 109,462 $ 216,000 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 - ( 46,25) ( 4,625) Net exchange difference ( 5,413) ( 691) ( 6,104) September 30 $ 110,828 $ 122,944 $ 233,772 September 30, 2020 Cost $ 110,828 $ 219,931 $ 330,759 Cumulative depreciation and impairment - ( 96,987) ( 96,987) $ 110,828 $ 122,944 $ 233,772 1. Rental income and direct operating expenses of investment property: July1 to September 30,2021 July1 to September 30,2020 Rental income of investment property $ 6,639 $ 8,683 Direct operating expenses of investment property that generate rental income in the current period $ 1,457 $ 1,535 January1 to September 30,2021 January1 to September 30,2020 Rental income of investment property $ 29,479 $ 25,132 Direct operating expenses of investment property that generate rental income in the current period $ 4,468 $ 4,625				Land	Buildings		Total
			$	112,596 - 112,596 112,596 - ( 6,058) 106,538 106,538 - 106,538 Land	$ 221,048 ( 99,086) $ 121,962 $ 121,962 ( 4,468) ( 8,032) $ 109,462 $ 210,456 ( 100,994) $ 109,462 Buildings		$ 333,644 ( 99,086) $ 234,558 $ 234,558 ( 4,468) ( 14,090) $ 216,000 $ 316,994 ( 100,994) $ 216,000 Total
			$
			$ $
			$
			$

					$ ( $ $ ( $
					$ ( $
		$ 6,639				$ 8,683
	$ 1,457 $ 1,535 January1 to September 30,2021 January1 to September 30,2020					$ 1,535
	$ 29,479 $ 25,132
	$ 4,468 $ 4,625

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The fair value of the investment property held by the Group as of September 30, 2021, December 31, 2020, and September 30, 2020 were NT$509,846, NT$522,431, and NT$505,789 respectively, which were obtained from the evaluation of government announcement information, and the results belong to the third level of fair value.
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	September 30,2021		December 31,2020		September 30,2020
		$ 36,963 ( 983) $ 35,980		$ 37,142 ( 179) $ 36,963		$ 37,142 ( 771) $ 36,371

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.

(XI) Short-term borrowings

(Yantai) Co., Ltd. Short-term borrowings
Nature of the borrowings	September 30,2021	Interest Rate	Collateral
Bank loans - Credit loans Nature of the borrowings	$ 1,727,367	0.47%-0.65% 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
	September 30,2020
Bank loans - Credit loans	$ 1,309,500	0.5%-1.03%	None.

As of September 30, 2021, the Group had an undrawn limit of NT$5,796,250.

(XII) Other payables

ther payables
Salary, bonus, and employee remuneration payable Consumables payable Equipment payment payable Utility fees payable Repair expenses payable Others	September 30,2021 $ 530,262 62,335 61,468 49,786 47,094 223,235 $ 974,180		December 31,2020		September 30,2020
		$ 530,262 62,335 61,468 49,786 47,094 223,235		$ 433,318 55,533 105,069 42,439 96,293 $ 173,154 $ 905,806		$ 399,177 55,968 56,922 43,605 63,380 $ 204,530
		$ 974,180				$ 823,582

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(XIII) Pension

Measures for defined retirement benefits
(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 above. 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.
(2) From July 1 to September 30, 2021 and 2020, and from January 1 to September 30, 2021 and 2020, the Group recognized pension costs of NT$606, NT$552, NT$1,763, and NT$1,658, respectively, according to the above-mentioned pension measures.
(3) The Group expected to appropriate $1,747 for payment to the retirement plan in 2022.
Measures for defined retirement allocation
(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.
(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.
(3) From July 1 to September 30, 2021 and 2020, and from January 1 to September 30, 2021 and 2020, the pension costs recognized by the Group in accordance with the pension measures above were NT$33,943, NT$30,950, NT$101,291, and

~36~

NT$130,621 respectively.

(XIV) Share capital

As of September 30, 2021, the authorized capital of the Company comprised 600,000,000 shares (including 30,000,000 shares under subscription warrants or subscription rights of convertible bonds); 518,346,282 shares were 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

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.
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.
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.
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.

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The shareholders resolved to pass distribution of 2020 and 2019 earnings during the meetings held on July 15, 2021 and June 12, 2020; details are as follows:

2020	2020	2020	2019	2019
Amount Dividend per share(NT$)			Amount Dividend per share(NT$)
	($ 186,592) 570,016 ( 373,072) 36,885 - $ 47,237	($ 1,163,132) - - - ( 235,758)		($ 1,349,724) 570,016 ( 373,072) 36,885 ( 235,758)
		($ 1,398,890)		($ 1,351,653)
	Financial assets at FVTOCI	Adjustment for currencyconversion		Total
	($ 250,358) 137,425 - ($ 112,933)	($ 1,061,916) - ( 173,565)		($ 1,312,274) 137,425 ( 173,565)
		($ 1,235,481)		($ 1,348,414)

(XVII) Other items of equity

(XVIII) Non-controlling interests

Unrealized profit or loss of financial products - Group 137,425 - 137,425 Currency conversion difference - Group - ( 173,565) ( 173,565) September 30, 2020 ($ 112,933) ($ 1,235,481) ($ 1,348,414) (XVIII)Non-controlling interests	Unrealized profit or loss of financial products - Group 137,425 - 137,425 Currency conversion difference - Group - ( 173,565) ( 173,565) September 30, 2020 ($ 112,933) ($ 1,235,481) ($ 1,348,414) (XVIII)Non-controlling interests	137,425 - 137,425 - ( 173,565) ( 173,565) ($ 112,933) ($ 1,235,481) ($ 1,348,414)
2021 2020 January 1 $ 1,622,505 $ 1,619,122 Share of non-controlling equity: Net income for the period 124,446 12,542 Business combination 36,921 - Conversion difference from the conversion of financial statements of a foreign operation ( 109,329) ( 78,752) Cash dividend payment ( 61,002) ( 63,557) September 30 $ 1,613,541 $ 1,489,355 (XIX)Operating revenue July1 to September 30,2021 July1 to September 30,2020 Revenue from customer contracts $ 6,902,497 $ 5,412,622 January1 to September 30,2021 January1 to September 30,2020 Revenue from customer contracts $ 17,027,101 $ 15,061,690		2021 2020
	$ 6,902,497 $ 5,412,622
	January1 to September 30,2021 January1 to September 30,2020
	$ 17,027,101 $ 15,061,690

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

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

follows:
September30,2021 December31,2020 September30,2020 January1,2020 Contractual liabilities $ 693,238 $ 395,622 $ 431,573 $ 263,111 Recognized income of contract liabilities at the beginning of the period: July1 to September 30,2021 July1 to September 30,2020 Opening balance of contract liabilities recognized as income in the current period $ 6,066 $ 169,777 January1 to September 30,2021 January1 to September 30,2020 Opening balance of contract liabilities recognized as income in the current period $ 57,750 $ 240,429 (XX)Other income July1 toSeptember30,2021 July1 toSeptember30,2020 Rental income $ 8,908 $ 11,604 Dividend income 24,746 10,443 Subsidy income 5,976 7,197 Other income - Other 8,537 10,183 $ 48,167 $ 39,427 January1 to September 30,2021 January1 to September 30,2020 Rental income $ 36,563 $ 33,125 Dividend income 25,408 11,678 Subsidy income 11,914 17,548 Other income - Other 11,354 50,862 $ 85,239 $ 113,213 (XXI)Other gains and losses July1 to September 30,2021 July1 to September 30,2020 Net foreign currency conversion gain (loss) $ 24,843 ($ 77,289) Net gains of financial assets and liabilities measured at fair value through the income 12,276 5,148 Gains (losses) from the disposal of property, plant and equipment ( 386) 4,266 Others (457) 41 $ 36,276 ($ 67,834) January 1 to September 30, 2021 January 1 to September 30, 2020 Gain on disposal of investments $ 14,520 $ - Net foreign currency conversion gain (loss) 12,265 ( 16,739) Net gains of financial assets and liabilities measured at fair value through the 10,323 23,597	September30,2021 December31,2020				September30,2020 January1,2020
	$ 693,238			$ 395,622	$ 431,573 $ 263,111
		$ 6,066 $ 169,777 January1 to September 30,2021 January1 to September 30,2020
		$ 57,750				$ 240,429 July1 toSeptember30,2020
		July1 toSeptember30,2021
		$ 8,908 24,746 5,976 8,537				$ 11,604 10,443 7,197 10,183 $ 39,427 January1 to September 30,2020
		$ 48,167
		January1 to September 30,2021
		$	36,563 25,408 11,914 11,354				$ 33,125 11,678 17,548 50,862
		$	85,239				$ 113,213
							July1 to September 30,2020
			$ 24,843 12,276 ( 386) (457)				($ 77,289) 5,148 4,266 41
				$ 36,276			($ 67,834) January 1 to September 30, 2020
				January 1 to September 30, 2021
				$ 14,520 12,265 10,323			$ - ( 16,739) 23,597

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income Losses from the disposal of property, plant and equipment Others	( 5,225) ( 5,401)	( 453) ( 1,211)
	$ 26,482	$ 5,194

(XXII) Employee benefit, depreciation and amortization expenses

Bynature	July1 to September 30,2021	July1 to September 30,2020
Employee benefits expense Salary expenses Labor and national health insurance expenses Pension expenses Other HR expenses Depreciation expenses Amortization expenses Bynature	$ 672,006 17,546 34,549 99,851 $ 823,952	$ 534,109 11,999 31,502 49,892 $ 627,502 $ 97,613 $ 3,252 January1 to September 30,2020

	$ 104,286
	$ 2,406
	January1 to September 30,2021
Employee benefits expense Salary expenses Labor and national health insurance expenses Pension expenses Other HR expenses Depreciation expenses Amortization expenses	$ 1,772,458 53,047 103,054 221,381	$ 1,504,515 40,808 132,279 115,430
	$ 2,149,940	$ 1,793,032 $ 286,387 $ 9,756
	$ 303,058
	$ 4,923

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.
The estimated amounts of the Company’s employee remuneration for the periods July 1 to September 30, 2021 and 2020, and January 1 to September 30, 2021 and 2020, were NT$18,104 and NT$18,049, NT$43,853, and NT$28,427, respectively. The remuneration to the Directors was estimated at NT$1,810, NT$2,843, NT$4,385, and NT$2,843, respectively. The aforementioned amount was presented as a salary expense account in the book.

The period from January 1 to September 30, 2021 is based on the profit status as of the current period. It is estimated according to the proportion specified in the articles of association of the Company.

~40~

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 September 30, 2021, the remunerations to the employees and Directors pending payment amounted to NT$40,144 and NT$2,025 in 2020, 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

XIII)Financial costs
Interest expenses on bank loans Interest expenses on lease liabilities Interest expenses on bank loans Interest expenses on lease liabilities	July1 to September 30,2021	July1 to September 30,2020
	$ 1,771 1,342	$ 3,162 1,715
	$ 3,113	$ 4,877
	January1 to September 30,2021	January1 to September 30,2020
	$ 5,177 4,200	$ 26,279 5,529
	$ 9,377	$ 31,808

(XXIV) Income tax

1. Income tax expense

(1) Components of income tax expenses:

	July1 to September 30,2021		July1 to September 30,2020
	$ 115,983 15,606 ( 195)		$ 136,514 - ( 824)
	131,394		135,690 ( 10,312)
	7,605
$ 138,999 January1 to September 30,2021	$ 138,999	$ 125,378 January1 to September 30,2020	$ 125,378
$ 258,445 15,606 5,665			$ 277,250 - ( 26,365)

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279,716	279,716	250,885
12,170		( 32,127)
$ 291,886
	$ -	$ 36,885

The corporate income tax return of the Company has been approved by the tax collection authorities up to 2019.

(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 income for the period attributable to the common shareholders of the parent company plus the effect of potential common shares	July1 to September 30,2021
	After-tax amount	The weighted average number of outstanding shares (1000 shares) Earnings per share(NT$)
	$ 290,623	$ 518,346 $ 0.56
	290,623 -	518,346 1,120 $ 519,466 $ 0.56
	$ 290,623
	July1 to September 30,2020
	After-tax amount	The weighted average number of outstanding shares (1000 shares) Earnings per share(NT$)
	$ 294,699	$ 518,346 $ 0.57
	294,699 -	518,346 1,638 $ 519,984 $ 0.57
	$ 294,699
	January1 to September 30,2021

~42~

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 income for the period attributable to the common shareholders of the parent company plus the effect of potential common shares	After-tax amount	The weighted average number of outstanding shares (1000 shares) Earnings per share(NT$)
	$ 690,759	$ 518,346 $ 1.33
	690,759 -	518,346 1,384 $ 519,730 $ 1.33
	$ 690,759
	January1 to September 30,2021
	After-tax amount	The weighted average number of outstanding shares (1000 shares) Earnings per share(NT$)
	$ 468,737	$ 518,346 $ 0.90
	468,737 -	518,346 2,800 $ 521,146 $ 0.90
	$ 468,737

(XXVI) Business combination

Dongguan Pan-International Precision Electronics Co., Ltd., one of the Company’s 2nd-tier subsidiaries, acquired an 80% equity in Wuhu Ruichang Electric System Co., Ltd. (referred to as “Wuhu Ruichang” below) on June 1, 2021 for a sum of RMB 34,054 thousand, and gained controlling interest over Wuhu Ruichang. Business registrations were completed on June 1, 2021, and the new entity has since been included in the consolidated report. Wuhu Ruichang is mainly involved in the manufacturing of wiring harnesses for automobiles. The purpose of the acquisition is to integrate the resources of the two parties, which in turn creates synergy and expands automobile product lines for the Group.
Information on the consideration paid for the acquisition of Wuhu Ruichang, the fair value of assets acquired and liabilities assumed on the acquisition date, and the fair value of non-controlling interests on the acquisition date is as follows:

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Consideration for acquisition - cash Fair value of non-controlling interests Fair value of identifiable assets acquired and liabilities borne Cash Accounts receivable Inventory Other receivables Other current assets Property, plant, and equipment Right-of-use assets Other non-current assets Accounts payable Other payables Current tax liabilities Lease liabilities Other current liabilities Other non-current liabilities Total net identifiable assets Goodwill	June 1, 2021 $ 147,548 36,921
	$ 184,469
	$ 47,544 244,038 460,705 63,428 15,680 109,968 79,535 864 ( 683,599) ( 119,136) ( 3,359) ( 22,688) ( 7,190) ( 1,321)
	184,469
	$ -

Consideration for the acquisition was being collected in installments as of September 30, 2021, and the Group is still evaluating the fair value of net realizable assets.

The Group has consolidated Wuhu Ruichang since June 1, 2021; Wuhu Ruichang’s contributions in terms of operating revenue and profit before tax amounted to NT$648,128 and NT$25,008, respectively. Assuming that Wuhu Ruichang has been consolidated since January 1, 2021, the Group’s operating revenues and profit before tax would have been NT$17,636,738 and NT$1,107,833, respectively.

(XXVII) Supplementary information on cash flow

Investment activities with only 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 September 30,2021	January1 to September 30,2020
	$ 422,213 105,069 ( 61,468) ( 806)	$ 293,375 30,733 ( 56,922) ( 190)
	$ 465,008	$ 266,996

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Fair value information relating to assets and liabilities acquired through business combination:

combination:
Fair value of net identifiable assets Less: fair value of non-controlling interests Cash paid for business combination Less: cash received from business combination Consolidated net cash outflow from business combination		January1 to September 30,2021
		$ 184,469 ( 36,921)
		147,548 ( 47,544)
		$ 100,004

(XXVIII)Changes in liabilities from financing activities

		2021	2021
Short-term borrowings		Lease liabilities Total liabilities from financingactivities
$ 1,568,333 206,856 ( 47,822) - -		$ 220,959 $ 1,789,292 ( 55,023) 151,833 ( 2,329) ( 50,151) 22,688 22,688 ( 2,422) ( 2,422)
$ 1,727,367		$ 183,873	$ 1,911,240
		2020
Short-term borrowings	Lease liabilities		Total liabilities from financing activities
$ 1,573,950 ( 223,650) ( 40,800) - $ 1,309,500	$ 295,287 ( 46,339) ( 2,380) ( 9,722)		$ 1,869,237 ( 269,989) ( 43,180) ( 9,722) $ 1,546,346
	$ 236,846

VII. Related Party Transactions

(I) Related party’s name and relationship

Related Party Name

Hon Hai Precision Industry Co., Ltd. and subsidiaries (Hon Hai and subsidiaries) Sharp Corporation and subsidiaries (Sharp and subsidiaries) Foxconn Technology Corporation and subsidiaries (FTC and subsidiaries) General Interface Solution Limited Cyber TAN Technology, Inc and Subsidiaries Chery Holding Group and Subsidiaries Long Time Tech. Co., Ltd.

Relationship with the Group With significant influence on the group Other related parties Other related parties Other related parties Other related parties Other related parties Affiliates

~45~

(II) Major transactions with related parties

1. Operating income

1.Operating income
With significant influence on the group - Hon Hai and subsidiaries Other related parties - Sharp and subsidiaries - Others With significant influence on the group - Hon Hai and subsidiaries Other related parties - Sharp and subsidiaries - Others	July1 to September 30,2021	July1 to September 30,2020 $ 1,921,784 11,650 2,531 $ 1,935,965
	$ 2,097,763 514,267 471,540
	$ 3,083,570
	January1 to September 30,2021	January1 to September 30,2020 $ 5,983,557 406,085 90,547
	$ 4,994,759 1,755,440 613,495
	$ 7,363,694	$ 6,480,189

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 days.

2. Purchase

2.Purchase
With significant influence on the group - Hon Hai and subsidiaries Other related parties - Sharp and subsidiaries - FTC and subsidiaries With significant influence on the group - Hon Hai and subsidiaries Other related parties - Sharp and subsidiaries - FTC and subsidiaries	July1 to September 30,2021	July1 to September 30,2020
	$ 574,425 - 467,905	$ 718,734 ( 11,001) 91,468
	$ 1,042,330	$ 799,201
	January1 to September 30,2021	January1 to September 30,2020
	$ 1,859,665 ( 951) 1,420,062	$ 1,914,259 2,332,003 783,491
	$ 3,278,776	$ 5,029,753

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.

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3. Receivables from related parties

Receivables from related parties
Note receivable: Other related parties - others Accounts receivable: With significant influence on the group - Hon Hai and subsidiaries Other related parties - Sharp and subsidiaries -Others Less: Allowance for impairment loss	September 30,2021	December 31,2020	September 30,2020 $ - 2,149,923 12,061 151,877
	$ 30,563 2,398,463 286,668 238,881	$ - 2,067,171 567,382 125,497
	2,954,575 ( 1,506)	2,760,050 ( 881)	2,313,861 ( 885)
	$ 2,953,069	$ 2,759,169	$ 2,312,976

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.

4. Other receivables

her receivables
With significant influence on the group - Hon Hai and subsidiaries Other related parties - Sharp and subsidiaries	September 30,2021	December 31,2020	September 30,2020
	$ 193 -	$ 1,332 1,684	$ 5,905 30,188
	$ 193	$ 3,016	$ 36,093

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 - FTC and subsidiaries - Others	September 30,2021	December 31,2020	September 30,2020
	$ 992,564 370,418 -	$ 1,113,108 241,948 1,037	$ 1,052,393 1,059 638,328
	$ 1,362,982	$ 1,356,093	$ 1,691,780

Accounts payable from 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.

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(2) Lease liabilities:

A. Ending balance

A. Ending balance
With significant influence on the group B. Interest expenses With significant influence on the group With significant influence on the group 7.Others	September 30,2021	December	31,2020	September 30,2020
	$ 84,957	$	113,332	$ 120,037
	July1 to September 30,2021 $ 625 January1 to September 30,2021 $ 2,079		July1 to September 30,2020 $ 863 January1 to September 30,2020 $ 2,772

In an attempt to expand the current line of automobile products, the Group acquired a 50% equity in Wuhu Ruichang Electric Systems Co., Ltd. in June 2021 from Hon Hai and subsidiaries, a group of companies that has significant influence in the Group. Consideration of this transaction amounted to NT$91,472.

(III) Compensation of key management personnel

Short-term employee benefits Post-employment benefits Total Short-term employee benefits Post-employment benefits Total	July1 to September 30,2021 $ 6,905 60 $ 6,965 January1 to September 30,2021 $ 11,517 180 $ 11,697	July1 to September 30,2021	July1 to September 30,2020
		$ 6,905 60	$ 7,163 60 $ 7,223 January1 to September 30,2020
		$ 6,965
			$ 11,731 180 $ 11,911

VIII. Pledged Assets

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

Asset item		Book value	September30,2020 Guaranteepurpose
	September30,2021	December31,2020
Other current assets - Pledge deposit Other non-current assets - Pledge deposit Property, plant, and equipment Investment property Right-of-use assets Investment by equity method (Long Time Technology)	$ 1,917 - 43,205 9,423 55,967 212,977	$ 720 1,306 10,411 10,813 - -	$ 698 Issuing of letter of credit and customs deposit 1,282 Customs deposit 9,949 Guarantee mortgage for bank line overdraft (note) 10,513 Guarantee mortgage for a bank line - Guarantee mortgage for a bank line - Contractual liabilities $ 22,442
	$ 323,489	$ 23,250

Note: As of September 30, 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.

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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

(I) The Group has adopted relevant measures in response to the outbreak of COVID-19. The spread of disease did not have a material impact on the Group’s operations and business performance in the 3rd quarter of 2021.

(II) Capital management

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

The group’s strategy for 2021 is the same as that in 2020, both of which are committed to maintaining the net debt ratio below 70%.

(III) Financial instrument

1. Types of financial instruments

The book values of the financial assets measured at amortized cost as classified by the Group as per IFRS 9 (including cash and cash equivalents, notes receivable, accounts receivables (including related parties), and other receivables) as of September 30, 2021, December 31, 2020, and September 30, 2020 were NT$13,865,656, NT$12,986,273, and NT$11,979,701, respectively. The book values of financial liabilities measured at amortized cost as classified by the Group (including short-term borrowings, notes payable, accounts payable (including related parties), and other payables) were NT$8,085,630, NT$6,644,047, and NT$6,566,627, respectively. In addition, the book values of lease liabilities as of September 30, 2021, December 31, 2020, and September 30, 2020 were NT$183,873, NT$220,959, and NT$236,846, 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.

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2. Risk management Policy

(1) Types of risks

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

(2) Management objectives
- A. All the risks above can be eliminated by internal control or operation process, except that market risk is controlled by external factors. Therefore, each risk can be reduced to zero through management.
- B. In terms of market risk, the objective is to optimize the overall position through rigorous analysis, proposal, implementation and process, with due consideration of the overall external trend, internal operating conditions and the actual impact of market fluctuations.
- C. The group’s overall risk management policy focuses on the unpredictability of the financial market and seeks to reduce potential adverse effects on the group’s financial position and financial performance.
(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.
Nature and extent of significant financial risks
(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.

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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:

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:	nal currency of the company and some subsidiaries, and RMB ggit are the functional currencies of some subsidiaries). p is affected by exchange rate fluctuations. The information on ets and liabilities with significant exchange rate fluctuations is	nal currency of the company and some subsidiaries, and RMB ggit are the functional currencies of some subsidiaries). p is affected by exchange rate fluctuations. The information on ets and liabilities with significant exchange rate fluctuations is
September 30,2021 Foreign currency (thousand) Exchange rate Book value (NT$) Sensitivityanalysis Range of change Impact on profit and loss (foreign currency: functional foreign currency) Financial assets Monetary item USD: NTD $ 150,847 27.85 $4,201,089 1% $ 42,011 USD: RMB 86,365 6.4854 2,413,185 1% 24,132 USD: MYR 64,797 4.1876 1,804,596 1% 18,046 Foreign operations USD: NTD 333,858 27.85 9,297,946 Financial liabilities Monetary item USD: NTD 135,535 27.85 3,774,650 1% 37,747 USD: MYR 56,357 4.1876 1,569,542 1% 15,695 USD: RMB 17,091 6.4854 477,552 1% 4,776 December 31,2020 Foreign currency (thousand) Exchange rate Book value (NT$) Sensitivity analysis Range of change Impact on profit and loss (foreign currency: functional foreign currency) Financial assets Monetary item USD: NTD $ 125,768 28.48 $ 3,581,873 1% $ 35,819 USD: RMB 52,794 6.5249 1,500,053 1% 15,001 USD: MYR 50,365 4.0290 1,434,395 1% 14,344 Foreign operations USD: NTD 313,825 28.48 8,937,740 Financial liabilities Monetary item USD: NTD 134,057 28.48 3,817,943 1% 38,179 USD: MYR 30,972 4.0290 882,083 1% 8,821 USD: RMB 39,476 6.5249 1,121,645 1% 11,216 September 30,2020 Foreign currency (thousand) Exchange rate Book value (NT$) Sensitivityanalysis Range of change Impact on profit and loss (foreign currency: functional foreign currency) Financial assets Monetary item USD: NTD $ 109,039 29.10 $ 3,173,035 1% $ 31,730 USD: RMB 78,135 6.8101 2,273,109 1% 22,731 USD: MYR 61,681 4.1580 1,794,917 1% 17,949 Foreign operations USD: NTD 391,026 29.10 9,283,646	September 30,2021
	Foreign currency (thousand) Exchange rate Book value (NT$)	Sensitivityanalysis
		Range of change Impact on profit and loss

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Financial liabilities
Monetary item
USD: NTD	115,142	29.10	3,350,632	1%	33,506
USD: MYR	41,119	4.1580	1,196,563	1%	11,966
USD: RMB	13,181	6.8101	383,463	1%	3,835

D. Nature

The total amount of exchange gains and losses (including realized and unrealized) recognized on monetary accounts due to exchange rate fluctuations from July 1 to September 30, 2021 and 2020, and from January 1 to September 30, 2021 and 2020, were NT$24,843 (gain), NT$77,289 (loss), NT$12,265 (gain), and NT$16,739 (loss), respectively.

Price risk

A. The group’s equity instruments exposed to price risk are financial assets measured at fair value through other comprehensive income and equity investments available for sale. In order to manage the price risk of equity instrument investment, the group diversifies its portfolio in accordance with the limits set by the group.
B. The group mainly invests in equity instruments issued by domestic and foreign companies. The prices of these equity instruments will be affected by the uncertainty of the future values of the investment objects. If the prices of these equity instruments rose or fell by 1%, with all other factors remain unchanged, the impact on other comprehensive income of equity investment classified measured at fair value through other comprehensive income would increase or decrease by NT$21,731 and NT$26,941, respectively, for the periods January 1 to September 30, 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.

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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.
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 181 days	September 30,2021 December 31,2020 September 30,2020
	$ 6,301,093 $ 5,303,552 $ 5,051,240 14,096 20,552 29,481 302 257 1,167 6,002 6,162 2,369 $ 6,321,493 $ 5,330,523 $ 5,084,257

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 and payment receivable. There is no material concern regarding non-performance or repayment. Therefore, the allowance for loss is measured based on the 12-month expected credit loss. The allowance for loss recognized by the Group on September 30, 2021, December 31, 2020, and September 30, 2020 all amounted to NT$0.

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J. The Group classifies the accounts receivable of customers according to the characteristics of credit rating standards, and for future-looking considerations, the Group 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. Loss rate methods as of September 30, 2021, December 31, 2020, and September 30, 2020 are as follows:

September 30, 2021 Expected loss rate Total Book value Allowance for loss December 31, 2020 Expected loss rate Total Book value Allowance for loss September 30, 2020 Expected loss rate Total Book value Allowance for loss	Group1 Group2 Group3 Group4 Total
	0.04% 0.04% 0.09% 0.1%~100% $ 5,901,553 $ 407,803 $ - $ 12,137 $ 6,321,493
	$ 2,362 $ 163 $ - $ 7,996 $ 10,521 Group1 Group2 Group3 Group4 Total
	0.04% 0.04% 0.09% 0.1%~100% $4,882,814 $ 425,661 $ - $ 22,048 $ 5,330,523
	$ 1,953 $ 170 $ - $ 4,959 $ 7,082
	Group1 Group2 Group3 Group4 Total
	0.04% 0.04% 0.09% 0.1%~100% $ 3,991,511 $ 1,076,547 $ - $ 16,199 $ 5,084,257
	$ 1,597 $ 431 $ - $ 6,787 $ 8,815

Group 1: Rated A by Standard & Poor’s, Fitch or Moody’s, or no external agency rating, and rated A according to the group’s credit standards.
Group 2: Rated BBB by Standard & Poor’s or Fitch, or Baa by Moody’s, or no external agency rating, and rated B or C according to the group’s credit standards.
Group 3: Rated BB+ or below by Standard & Poor’s or Fitch, or Ba1 or below by Moody’s.
Group 4: No external agency rating, and non-A, B, or C rated customers according to the group’s credit standards.
K. The simplified statement of changes in the allowance for loss of accounts receivable and other receivables (including those of related parties) of the group is as follows:

is as follows:
January 1 Recognition of impairment loss Write-off Effect of first-time consolidation of subsidiary Effect on foreign currency exchange differences September 30	2021 $ 7,082 2,566 - 752 121 $ 10,521	2020
		$ 4,720 16,931 ( 12,644) - ( 192)
		$ 8,815

L. All the Group’s debt instrument investments measured at after-amortization cost as of September 30, 2021, December 31, 2020, and September 30, 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.

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(3) Liquidity risk

A. the cash flow forecast is carried out by each operating entity within the group and summarized by the group’s finance department. The group’s finance department monitors the forecast of the group’s liquidity funds demand to ensure that it has sufficient funds to meet operational needs, and maintains sufficient unspent loan commitments at all times so that the group will not exceed the relevant borrowing limits or violate the terms. These forecasts take into account the group’s debt financing plan, compliance with debt terms, and compliance with the financial ratios in the internal balance sheet and external regulatory requirements, such as foreign exchange control.
B. When the remaining cash held by the group exceeds the requirement for the management of working capital, the finance department will invest the remaining funds in interest-bearing demand deposits, time deposits, money market deposits and securities, and the instruments selected to have appropriate maturities or sufficient liquidity to meet the forecast above and provide sufficient liquidity, and it is expected that cash flow will be generated immediately for the management of liquidity risk.
C. The following table shows the grouping of the group’s non-derivative financial liabilities according to their maturity dates. The non-derivative financial liabilities are analyzed according to the remaining period from the balance sheet date to the contract maturity date. The amount of contractual cash flow disclosed in the table below is the undiscounted amount.

September 30, 2021 Non-derivative financial liabilities: Lease liabilities December 31, 2020 Non-derivative financial liabilities: Lease liabilities September 30, 2020 Non-derivative financial liabilities: Lease liabilities	Less than 1year	1 ~ 2years	2 ~5 years	Total
	$ 82,610 $ 78,281 $ 80,083	$ 82,779 $ 74,930 $ 73,439	$ 24,532 $ 189,921 $ 77,214 $ 230,425 $ 94,191 $ 247,713

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

(IV) Fair value information

The levels of evaluation techniques used to measure the fair value of financial and nonfinancial instruments are defined as follows:
Level 1: The quoted price (unadjusted) is available to the enterprise in an active market for the same assets or liabilities on the measurement date. An active market refers to a market in which assets or liabilities are traded in sufficient frequency 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.

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Level 2: The input value of assets or liabilities are directly or indirectly observable, except those in Level 1. The fair value of the derivative instruments invested by the group belongs to this level.
Level 3: The input value of assets or liabilities are unobservable. The equity instruments invested by the group without an active market belong to this level.
Financial instruments not measured at fair value

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

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:

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

re is as follows:
September 30, 2021 Financial assets: Repetitive fair value Financial assets at FVTPL -Open-end funds -Foreign exchange forward contracts - Equity securities Financial assets at FVTOCI - Equity securities 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 September 30, 2020 Financial assets: Repetitive fair value	Level 1	Level 2		Level 3	Total
	$ 9,253 - - $ 9,253 $ 1,406,002	$ - 8,787 - $ 8,787		$ - - 1,902	$ 9,253 8,787 1,902
				$ 1,902	$ 19,942
		$ -		$ 767,131	$ 2,173,133
	Level 1	Level 2		Level 3	Total
	$ 50,916 -	$ - 3,334			$ 50,916 3,334
	$ 50,916	$ 3,334			$ 54,250 $ 2,367,713
	$ 1,166,154	$ -	$ 1,201,559
	Level 1	Level 2	Level 3		Total

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Financial assets at FVTPL -Open-end funds -Foreign exchange forward contracts Financial assets at FVTOCI - Equity securities	$ 42,074 -	$ - 9,210	$ - -	$ 42,074 9,210 $ 51,284 $ 2,694,147
	$ 42,074	$ 9,210 $ -	$ - $ 1,731,786
	$ 962,361

(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 instruments classified by their characteristics 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 September 30, 2021 and 2020.

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The following table shows the changes in level 3 from January 1 to September 30, 2021 and 2020:

and 2020:
January 1 Acquired this period Amounts sold of current period Profit recognized in other comprehensive income The refund of cost and share payment from investee Effect on foreign currency exchange differences September 30	Equitysecurities
	2021	2020 $ 1,751,723 - - 30,102 - ( 50,039) $ 1,731,786
	$ 1,201,559 1,902 ( 761,284) 346,005 ( 173) ( 18,976)
	$ 769,033

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.

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

Fair value on
September 30,2021
Evaluation
techniques
Significant
unobservable
input value
Range
(weighted
average)
Relationship
between input
value and fair value

$ 676,689 Net asset value
method
Lack of market
liquidity discount
24%
The higher the
market liquidity
discount, the lower
the fair value.
92,344 Comparable
public company
approach
Price–to-book
ratio
1.72
The higher the
multiplier, the
higher the fair
value.
Lack of market
liquidity discount
20%
The higher the
market liquidity
discount, the lower
the fair value.
Fair value on
December 31,2020
Evaluation
techniques
Significant
unobservable
input value
Range
(weighted
average)
Relationship
between input
value and fair value

$ 1,134,447 Net asset value
method
Lack of market
liquidity discount
24%
The higher the
market liquidity
discount, the lower
the fair value.
67,112 Comparable
public company
approach
Price–to-book
ratio
1.72
The higher the
multiplier, the
higher the fair
value.
Lack of market
20%
The higher the

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Non-derivative equity instruments: Non-listed and non- OTC stocks Non-listed and non- OTC stocks	liquidity discount market liquidity discount, the lower the fair value. Fair value on September 30,2020 Evaluation techniques Significant unobservable input value Range (weighted average) Relationship between input value and fair value
	$ 1,659,532 Net asset value method Lack of market liquidity discount 22% The higher the market liquidity discount, the lower the fair value. 72,254 Comparable public company approach Price–to-book ratio 1.37 The higher the multiplier, the higher the fair value. Lack of market liquidity discount 20% The higher the market liquidity discount, the lower the fair value.

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
	Favorable change Unfavorable change
Equity instruments September 30, 2021 Lack of market liquidity discount ±1% Equity instruments September 30, 2021 Price–to-book ratio ±1% Financial assets Period Input value Change	$ 3,263 ($ 3,263) $ 523 ($ 532) Recognized in other comprehensive income Favorable change Unfavorable change
Equity instruments December 31, 2020 Lack of market liquidity discount ±1% Equity instruments December 31, 2020 Price–to-book ratio ±1% Financial assets Period Input value Change	$ 3,668 ($ 3,668) $ 527 ($ 527) Recognized in other comprehensive income
	Favorable change Unfavorable change
Equity instruments September 30, 2020 Lack of market liquidity discount ±1% Equity instruments September 30, 2020 Price–to-book ratio ±1%	$ 4,825 ($ 4,825) $ 526 ($ 526)

XIII. Additional Disclosures

(I) Information about significant transactions

Loans to others: Please refer to Table 1.
Endorsements/guarantees provided: Please refer to Table 2.
Marketable securities held at the end of the period (excluding investment in subsidiaries, affiliated enterprises and jointly controlled entities): Please refer to Table 3.
The cumulative amount of buying or selling the same securities reaches NT$300 million or more, or 20% of the paid-in capital: Please refer to Table 4.

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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.
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.
Total purchases from or sales to related parties amounting reaches NT$100 million or more, or 20% of the paid-in capital: Please refer to Table 5.
Total accounts receivable from related parties amounting reaches NT$100 million or more, or 20% of the paid-in capital: Please refer to Table 6.
Engagement in derivatives trading: Please refer to note 6(2).
Significant Inter-company Transactions during the Reporting Period: Please refer to Table 7.

(II) Information about investees

The name and location of the investee company and other relevant information (excluding mainland China investee companies): Please refer to Table 8.

(III) Information on investments in mainland China

Basic information: Please refer to Table 9.
Major transactions directly with investee companies in mainland China or indirectly through enterprises in a third region: Please refer to Tables 5, 6, and 7.
(IV) Information on major shareholders

Information of major shareholders: Please refer to Table 10.

XIV. Operating Departments Information

(I) General information

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

The information of each operating 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.

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(II) Segments Information

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

is as follows:
July1 to September 30,2021	Electronic Components	Consumer Electronics and Computer Peripherals	Total
Segment Revenue Segment profit and loss July1 to September 30,2020	$ 3,742,920	$ 3,159,577	$ 6,902,497 $ 482,507 Total
	$ 351,523	$ 130,984
	Electronic Components	Consumer Electronics and Computer Peripherals
Segment Revenue Segment profit and loss January1 to September 30,2021	$ 2,891,268	$ 2,521,354	$ 5,412,622 $ 461,816 Total
	$ 302,452	$ 159,364
	Electronic Components	Consumer Electronics and Computer Peripherals
Segment Revenue Segment profit and loss January1 to September 30,2020	$ 9,030,899	$ 7,996,202	$ 17,027,101 $ 1,391,858 Total
	$ 754,680	$ 637,178
	Electronic Components	Consumer Electronics and Computer Peripherals
Segment Revenue Segment profit and loss	$ 9,918,715	$ 5,142,975	$ 15,061,690 $ 735,747
	$ 571,878	$ 163,869

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

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

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

Income	July1 to September 30,2021	July1 to September 30,2020
Profit and loss of the segments to be reported Other profit and loss Pre-tax profit and loss of continuing operating departments Income	$ 482,507 ( 6,425)	$ 461,816 ( 1,317)
	$ 476,082	$ 460,499
	January1 to September 30,2021	January1 to September 30,2020
Profit and loss of the segments to be reported Other profit and loss Pre-tax profit and loss of continuing operation segments	$ 1,391,858 ( 284,767)	$ 735,747 ( 35,710)
	$ 1,107,091	$ 700,037

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Pan-International Industrial Corp. and Subsidiaries Loans to others January 1 to September 30, 2021

Table 1

Unit: NTD thousand (unless otherwise noted)

Serial No. (note 1) Loan extending company	Borrower Dealing items (note 2) Whether a relatedparty 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 Na	Collateral Loans and limits for individual entities (note 7) Total loan limit (note 7) Remarks me Value
0 Pan-International Industrial Corp. 1 Dongguan Pan- International Precision Electronics Co., Ltd.	PAN GLOBAL HOLDING CO.,LTD Other receivables - related parties Yes $ 313,940 $ - $ - NA Short-term financing $ - Operating turnover $ - No Wuhu Ruichang Electric Systems Co., Ltd. Other receivables - related parties Yes 86,254 86,168 86,168- 4.00% Short-term financing - Operating turnover $ - No	ne. $ - $ 1,185,452 $ 4,741,809 ne. - 417,437 417,737

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: This field is to be filled in with accounts receivable from affiliated enterprises, receivables from related parties, transactions with shareholders, prepayments, provisional payments, etc. if nature is a loan to others.
Note 3: The maximum balance of loans to others in the current year.
Note 4: The loan nature of the fund shall be filled in if it is a business transaction or if there is a need for short-term financing.
Note 5: Where the nature of the loan is a business transaction, the amount of the business transaction shall be filled in. The business transaction amount refers to the number of business transactions between the lending company and the borrowing object in the most recent year.
Note 6: If the nature of the loan is necessary for short-term financing, the reason for the loan and the purpose of the loan borrower shall be specified, such as loan repayment, purchase of equipment, business turnover, etc. Note 7: Loans to external parties are capped at 40% of the Company's net worth overall and 10% of the Company's net worth per borrower.

Loans to external parties by Dongguan Pan-International Precision Electronics Co., Ltd. are capped at 40% of its net worth overall and 40% of its net worth per borrower.

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

Table 1 page 1

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Pan-International Industrial Corp. and Subsidiaries Endorsement/guarantee provided January 1 to September 30, 2021

	Table 2	Table 2															Unit: NTD thousand	Unit: NTD thousand	Unit: NTD thousand
																	(unless otherwise noted)
			Guaranteed Party										Ratio of the cumulative
													endorsement/
					Endorsement/guarantee		Maximum						guarantee amount to			Endorsement/	Endorsement/	Endorsement/
		Name of company of			limit for a single		endorsement/guarantee		Ending	Transaction	Amount of		the net value in the	Endorsement/guarantee		guarantee from the	guarantee from subsidiary	guarantee to
Serial	No.	the		Relation		enterprise	balance of the period		balance	Amounts	endorsement/guarantee		latest financial		limit	parent company to	to parent company	mainland China
(note	1)	endorsement/guarantee	Companyname	(note 2)		(Note 3)	(note 4)		(note 5)	(Note 6)	backed byassets		statement	(Note 3)		subsidiary (note 7)	(note 7)	(note 7)	Remarks
1		P.I.E INDUSTRIAL	PAN-	2	$	1,580,526	$	1,118,417 $ 1,089,679		$ 530,013	$	-	9.19	$	3,161,051	Y	N	N
		BERHAD	INTERNATIONAL
			ELECTRONICS(M)
			SDN. BHD.
1		P.I.E INDUSTRIAL	PAN-	2		1,580,526		88,239	85,004	3,192		-	0.72		3,161,051	Y	N	N
		BERHAD	INTERNATIONAL
			WIRE&CABLE(M)
			SDN. BHD.

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 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 sum of endorsements and guarantees granted by the Company to external parties are capped at 100% of the Company's net worth overall, and 50% of the Company's net worth per endorsed/guaranteed party; the sum of endorsements and guarantees granted by the Company and subsidiaries to external parties are capped at 100% of the Company's net worth overall, and 50% of the Company's net worth per endorsed/guaranteed party. 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.

Table 2 page 1

~63~

Table 3

Pan-International Industrial Corp. and Subsidiaries

Marketable securities held at period end (excluding investment in subsidiaries, associates and jointly controlled entities). September 30, 2021

Unit: NTD thousand (unless otherwise noted)

Name of the holding company
Type of marketable
securities
Name of marketable securities
Relationship with the Holding
Company
Ledger account

Period end
Number of
shares/beneficiary
certificates
Book value
Shares Ratio
Fair value
Remarks

Pan-International Industrial Corp.
Common share
Innolux Corporation
None.
Financial assets measured at fair value through
other comprehensive income - Non-current
Pan-International Industrial Corp.
Common share
WK Technology Fund
None.
Financial assets measured at fair value through
other comprehensive income - Non-current
Pan-International Industrial Corp.
Common share
Syntrend Creative Park Co., Ltd.
The largest shareholder of this
company is the largest shareholder of
Hon Hai Precision Co., Ltd.
Financial assets measured at fair value through
other comprehensive income - Non-current
Pan-International Industrial Corp.
Common share
InnoCare Optoelectronics Corporation
None.
Financial assets measured at fair value through
income - Non-current
P.I.E. INDUSTRIAL BERHAD
Open-end funds
EASTSPRING INVESTMENTS
ISLAMIC INCOME FUND
None.
Financial assets measured at fair value through
income - Current
P.I.E. INDUSTRIAL BERHAD
Open-end funds
AFFIN HWANG AIIMAN MONEY
MARKET FUND I
None.
Financial assets measured at fair value through
income - Current
P.I.E. INDUSTRIAL BERHAD
Open-end funds
AFFIN HWANG USD CASH FUND
None.
Financial assets measured at fair value through
income - Current
Yen Yung International
Investment Co., Ltd
Common share
Lico Technology Corporation
None.
Financial assets measured at fair value through
income - Non-current
PAN GLOBAL HOLDING CO.,
LTD.
Common share
UER HOLDINGS CORPORATION The investment company is evaluated
by the equity method; the same as the
Company.
Financial assets measured at fair value through
income - Non-current
PAN GLOBAL HOLDING CO.,
LTD.
Common share
FSK HOLDINGS LIMITED
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
PAN GLOBAL HOLDING CO.,
LTD.
B share
CYBERTAN TECHNOLOGY
CORP.
The investment company is evaluated
by the equity method; the same as the
Company.
Financial assets measured at fair value through
other comprehensive income - Non-current

82,705,987
$ 1,406,002
0.79
$ 1,406,002
4,219
-
0.42
-
12,831,500
90,442
5.23
90,442
82,694
1,902
0.24
1,902
23,233
80
-
80
538,024
1,923
-
1,923
254,968
7,250
1.00
7,250
3,400,000
-
2.73
-
1,781,979
-
8.22
-
50,400,000
54,260
17.50
54,260
28,498,993
622,429
16.87
622,429

Table 3 page 1

~64~

Pan-International Industrial Corp. and Subsidiaries

The cumulative amount of buying or selling the same securities reaches NT$300 million or more, or 20% of the paid-in capital January 1 to September 30, 2021

	January 1 to September 30, 2021
Table 4 Company bought or sold Name and type of marketable securities Financial report Account Related Party (Note 2) Relation (Note 2)	Unit: NTD thousand (unless otherwise noted) At beginningofperiod Buy Sell Period end
	Shares Amount Shares Amount Shares Selling price Book cost Gain/loss on disposal Shares Amount
PAN GLOBAL HOLDING CO.,LTD CYBERTAN TECHNOLOGY CORP.(A share) Note 1 Szitic (HK) Commercial Property Company Limited Note 3	17,467,125 $ 513,489 - $ - ( 17,467,125) $ 761,284 $ 425,097 $ - - $ -

Note 1: Presented as “Financial assets at FVTOCI.” Gain/loss on disposal includes NT$336,187 that were reclassified directly from other comprehensive income to retained earnings. Note 2: The two fields are mandatory for marketable securities that are accounted using the equity method, whereas the remainder can be left blank. Note 3: The counterparty is not a related party to the Company.

Table 4 page 1

~65~

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. September 30, 2020

Table 5

September 30, 2020

Table 5
Purchasing/selling company
Related Party
Relation

Unit: NTD thousand
(unless otherwise noted)
Transaction Details
Differences in transaction terms from
those ofgeneral transactions and reasons
Note/Accounts Receivable(Payable)
Remarks
Purchase/
Sale
Amount
Percentage of
total purchase
(sale)
Payment Terms
Unit Price
Credit period
Balance
Percentage of total notes
and accounts receivable
(payable)

Pan-International Industrial Corp.
Hongfutai Precision Electronics (Yantai)
Co., Ltd.
Subsidiary of the indirect reinvestment
of Hon Hai Precision Industry Co., Ltd.
Pan-International Industrial Corp.
Hongfujin Precision Industry (Wuhan)
Co., Ltd.
Subsidiary of the indirect reinvestment
of Hon Hai Precision Industry Co., Ltd.
Pan-International Industrial Corp.
FIH (Hong Kong) Mobil Limited
Subsidiary of the indirect reinvestment
of Hon Hai Precision Industry Co., Ltd.
Pan-International Industrial Corp.
PAN-INTERNATIONAL
ELECTRONICS (USA) INC.
Subsidiary of the Company’s indirect
reinvestment
Pan-International Industrial Corp.
Hongfujin Precision Industry (Shenzhen)
Co., Ltd.
Subsidiary of the indirect reinvestment
of Hon Hai Precision Industry Co., Ltd.
Pan-International Industrial Corp.
Hongfujin Precision Industry (Yantai) Co.,
Ltd.
Subsidiary of the indirect reinvestment
of Hon Hai Precision Industry Co., Ltd.
Pan-International Industrial Corp.
Hon Hai Precision Industry Co., Ltd.
A company that evaluates the Company
by the equity method
Pan-International Industrial Corp.
Dongguan Pan-International Electronics
Co., Ltd.
Subsidiary of the Company’s indirect
reinvestment
Pan-International Industrial Corp.
Honghuasheng Precision Electronics
(Yantai) Co., Ltd.
Subsidiary of the Company’s indirect
reinvestment
Pan-International Industrial Corp.
Dongguan Pan-International Precision
Electronics Co., Ltd.
Subsidiary of the Company’s indirect
reinvestment
Pan-International Industrial Corp.
Foxconn Interconnect Technology Limited Subsidiary of the indirect reinvestment
of Hon Hai Precision Industry Co., Ltd.
New Ocean Precision Component
(Jiangxi) Co., Ltd.
Foxconn Interconnect Technology Limited Subsidiary of the indirect reinvestment
of Hon Hai Precision Industry Co., Ltd.
PAN-INTERNATIONAL
ELECTRONICS(M) SDN.BHD.
S&O ELECTRONICS (Malaysia)
SDN.BHD.
Other related parties
PAN-INTERNATIONAL
ELECTRONICS(M) SDN.BHD.
Foxconn Technology Co., Ltd
Other related parties
PAN-INTERNATIONAL
ELECTRONICS(M) SDN.BHD.
Hon Hai Precision Industry Co., Ltd.
A company that evaluates the Company
by the equity method
Tekcon Electronics Corporation
Foxconn Interconnect Technology Limited Subsidiary of the indirect reinvestment
of Hon Hai Precision Industry Co., Ltd.
Tekcon Huizhou Electronics Co., Ltd.
Huaian Fulitong Trade Co., Ltd.
Subsidiary of the indirect reinvestment
of Hon Hai Precision Industry Co., Ltd.

Sales
$ 1,391,1877
16
Monthly settlement 90 days T/TNo sale to other
customers with no
basis for comparison
No significant
difference
$ 515,147
16

Sales
404,244
5
Monthly settlement 90 days T/TNo sale to other
customers with no
basis for comparison
No significant
difference
167,422
5

Sales
399,558
5
Monthly settlement 90 days T/TNo sale to other
customers with no
basis for comparison
No significant
difference
144,983
4
Sales
253,143
3
Monthly settlement 120 days T/TNo sale to other
customers with no
basis for comparison
No significant
difference
43,676
1

Sales
151,267
2
Monthly settlement 90 days T/TNo sale to other
customers with no
basis for comparison
No significant
difference
55,124
2

Sales
459,085
5
Monthly settlement 90 days T/TNo sale to other
customers with no
basis for comparison
No significant
difference
278,017
8

Sales
122,928
1
Monthly settlement 90 days T/TNo sale to other
customers with no
basis for comparison
No significant
difference
113,126
3
Sales
137,218
2
Monthly settlement 120 days T/TNo sale to other
customers with no
basis for comparison
No significant
difference
78,923
2
Purchase
2,932,307
36
Monthly settlement 90 daysA single supplier with
no basis for
comparison
No significant
difference
(
948,621)
(
44)
Purchase
1,010,271
13
Monthly settlement 90 daysA single supplier with
no basis for
comparison
No significant
difference
(
239,953)
(
11)

Purchase
855,441
11
Monthly settlement 90 daysA single supplier with
no basis for
comparison
No significant
difference
(
363,342)
(
17)

Sales
1,511,047
100
Monthly settlement 60 days T/TNo sale to other
customers with no
basis for comparison
No significant
difference
597,747
100
Sales
1,708,042
34
Monthly settlement of 30 daysNo sale to other
customers with no
basis for comparison
No significant
difference
273,822
19
Purchase
1,420,042
31
Monthly settlement 90 daysA single supplier with
no basis for
comparison
No significant
difference
(
370,401)
(
29)

Purchase
339,680
7
Monthly settlement 90 daysA single supplier with
no basis for
comparison
No significant
difference
(
84,258)
(
7)

Purchase
423,741
74
Monthly settlement 120 daysA single supplier with
no basis for
comparison
No significant
difference
(
271,010)
(
83)

Purchase
146,792
62
Monthly settlement 120 daysA single supplier with
no basis for
comparison
No significant
difference
(
119,937)
(
68)

Table 5 page 1

~66~

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. September 30, 2020

Table 5

Unit: NTD thousand (unless otherwise noted)

Purchasing/sellingcompany Related Party Relation	Transaction Details Differences in transaction terms from those of general transactions and reasons Note/Accounts Receivable(Payable) Remarks Purchase/ Sale Amount Percentage of total purchase (sale) Payment Terms Unit Price Creditperiod Balance Percentage of total notes and accounts receivable(payable)
Wuhu Ruichang Electric Systems Co., Ltd. Chery Automobile Co., Ltd. Other related parties Wuhu Ruichang Electric Systems Co., Ltd. Wuhu Chery Automobile Purchasing Co Ltd. Other related parties	Sales $ 181,796 28 Monthly settlement of 30 daysNo sale to other customers with no basis for comparison No significant difference $ 69,233 31 Sales 341,960 53 Monthly settlement of 30 daysNo sale to other customers with no basis for comparison No significant difference 62,441 28

Table 5 page 2

~67~

Total accounts receivable from related parties amounting to at least NT$100 million or 20% of the paid-in capital or more.

Table 6

Unit: NTD thousand (unless otherwise noted)

Pan-International Industrial Corp. and Subsidiaries

September 30, 2021

CompanyName Related Party Relation	Balance of accounts receivable from relatedparties Turnover Rate	Overdue accounts receivable from relatedparties Amount Action taken Accounts receivable from related parties recovered after theperiod Provision for the allowance for loss
Pan-International Industrial Corp. Hongfutai Precision Electronics (Yantai) Co., Ltd. Subsidiary of the indirect reinvestment of Hon Hai Precision Industry Co., Ltd. Pan-International Industrial Corp. Hongfujin Precision Industry (Wuhan) Co., Ltd. Subsidiary of the indirect reinvestment of Hon Hai Precision Industry Co., Ltd. Pan-International Industrial Corp. FIH (Hong Kong) Mobil Limited Subsidiary of the indirect reinvestment of Hon Hai Precision Industry Co., Ltd. Pan-International Industrial Corp. Hon Hai Precision Industry Co., Ltd. A company that evaluates the company by the equity method Pan-International Industrial Corp. Hongfujin Precision Industry (Yantai) Co., Ltd. Subsidiary of the indirect reinvestment of Hon Hai Precision Industry Co., Ltd. Honghuasheng Precision Electronics (Yantai) Co., Ltd. Pan-International Industrial Corp. The Company’s parent company Dongguan Pan-International Precision Electronics Co., Ltd. Pan-International Industrial Corp. The Company’s parent company New Ocean Precision Component (Jiangxi) Co., Ltd. Foxconn Interconnect Technology Limited Subsidiary of the indirect reinvestment of Hon Hai Precision Industry Co., Ltd. PAN-INTERNATIONAL ELECTRONICS(M) SDN.BHD. S&O ELECTRONICS (Malaysia) SDN.BHD. Other related parties	$ 515,147 2.8 167,422 4.0 144,983 2.8 113,126 1.7 278,017 4.0 948,621 5.1 239,953 5.4 597,747 3.9 273,822 5.4	5 $ -Payment received after the period $ 239,194 $ 207 2 -Payment received after the period - 67 7 -Payment received after the period - 58 0 -Payment received after the period 32,351 45 9 110Payment received after the period 6,886 111 9 -Payment received after the period 222,800 379 3 -Payment received after the period 125,578 - 1 -Payment received after the period 318,569 239 5 -Payment received after the period - -

Table 6 page 1

~68~

Table 7

Unit: NTD thousand (unless otherwise noted)

Pan-International Industrial Corp. and Subsidiaries Significant Inter-company Transactions during the Reporting Period September 30, 2021

No. (note1) 0 0 0 0 1 2	Transaction Company	Counterparty	Flow of Transactions (note 2)	Description of Transa	ctions(note 4) Transaction Terms Percentage of consolidated total revenue or assets (note 3) Note 5 1 Note 5 1 Note 6 167 Note 6 6 Note 6 1 Note 6 4
				Account Amount
	Pan-International Industrial Corp. Pan-International Industrial Corp. Pan-International Industrial Corp. Pan-International Industrial Corp. Dongguan Pan-International Precision Electronics Co., Ltd. Honghuasheng Precision Electronics (Yantai) Co., Ltd.	PAN-INTERNATIONAL ELECTRONICS (USA) INC. Dongguan Pan-International Electronics Co., Ltd. Honghuasheng Precision Electronics (Yantai) Co., Ltd. Dongguan Pan-International Precision Electronics Co., Ltd. Pan-International Industrial Corp. Pan-International Industrial Corp.	1 1 1 1 2 2	Sales $ 253,143 Sales 137,218 Purchase 2,932,307 Purchase 1,010,271 Accounts receivable 239,953 Accounts receivable 948,621

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) Subsidiaries are numbered in sequence in each company type starting numerically from 1.
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.

Table 7 page 1

~69~

Pan-International Industrial Corp. and Subsidiaries

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

January 1 to September 30, 2021

Table 8

Unit: NTD thousand (unless otherwise noted)

Investor
Investor Company
Location
Main Businesses and
Products

Original Investment Amount
As of September 30, 2021
Net income (loss) of
the Investee for
currentperiod
Investment gains and
losses recognized in the
currentperiod
Remarks
September 30, 2021
End of lastyear
Shares
Ratio
Book value

Pan-International Industrial Corp. PAN GLOBAL HOLDING CO.,
LTD.
The British
Virgin
Islands
Holding company
Pan-International Industrial Corp. PAN-INTERNATIONAL
ELECTRONICS INC.
USA
Sale of electronic
products
Pan-International Industrial Corp. Yen Yung International Investment Co.,
Ltd
Taiwan
Investment company
Yen Yung International
Investment Co., Ltd
Tekcon Electronics Corporation
Taiwan
Manufacturing and
sale of connectors for
electronic signal
cables
PAN GLOBAL HOLDING CO.,
LTD.
P.I.E. INDUSTRIAL BERHAD (PIB)
Malaysia Holding company
PAN GLOBAL HOLDING CO.,
LTD.
GREAT HAVEN HOLDINGS LTD.
(GHH)
The British
Virgin
Islands
Holding company
PAN GLOBAL HOLDING CO.,
LTD.
BEYOND ACHIEVE ENTERPRISE
LTD. (BAE)
The British
Virgin
Islands
Holding company
PAN GLOBAL HOLDING CO.,
LTD.
TEAM UNION INTERNATIONAL
LTD. (TUI)
Hong Kong Holding company
PAN GLOBAL HOLDING CO.,
LTD.
EAST HONEST HOLDINGS
LIMITED (EHH)
Hong Kong Holding company
PAN GLOBAL HOLDING CO.,
LTD.
Long Time Tech. Co., Ltd.
Taiwan
Electronic
Components
Tekcon Electronics Corporation
Long Time Tech. Co., Ltd.
Taiwan
Electronic
Components

$ 3,472,484
$ 3,472,484
$ 12,220
100
$ 9,100,270
$ 274,839
$ 274,839
73,142
73,142
28,000
100
197,676
6,275
6,275
363,997
473,997
33,316,236
100
193,352
3,455
3,455

393,898
393,898
21,960,504
83.58
184,546
5,549
4,638
38,851
38,851
197,459,985
51.42
1,625,413
243,996
125,463
Note 1
537,505
537,505
19,800,000
100
72,249
1
1
Note 2
267,360
267,360
9,600,000
100
602,833
(28,876)
(28,876)
Note 3
456,740
456,740
3,120,001
100
1,043,592
307,172
307,172
Note 4
2,986,004
2,986,004
665,799,420
100
3,674,522
219,086
219,086
Note 5
646,000
646,000
20,187,500
16.82
550,338
(82,167)
(29,732)
250,000
250,000
7,812,500
5.44
212,977
(82,167)
(11,507)

Note 1: The company mainly reinvests in Pan-International Electronics (Malaysia) Sdn indirectly through PIB BHD. and Pan-International Wire & Cable (Malaysia) Sdn. Bhd. from the production of cable-attached connectors or electronic products and sales in Malaysia. Note 2: The Company invested in NCIH International Holdings Limited indirectly through GHH. The investee was dissolved in September 2020.

Note 3: The Company invested in New Ocean Precision Component (Jiangxi) Co., Ltd. indirectly through BAE. Please refer to Table 9 for details on the disclosure of information about investments in mainland China. Note 4: The Company invested in Dongguan Pan-International Precision Electronics Co., Ltd. indirectly through TUI. Please refer to Table 9 for details on the disclosure of information about investments in mainland China. Note 5: The Company invested in Honghuasheng Precision Electronics (Yantai) Co., Ltd. indirectly through EHH. Please refer to Table 9 for details on the disclosure of information about investments 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.

Table 8 page 1

~70~

Pan-International Industrial Corp. and Subsidiaries Mainland China investment information - Basic information January 1 to September 30, 2021 Table 9

Table 9																				Unit:	NTD thousand
																			(unless otherwise noted)
						Investment Flows		of current		Cumulative
				Cumulative outward			period			outward	remittance
				remittance of						of the investment			Net income	% Ownership of	Investment gains and				Investment	gains
			Method of	investment amount						amount from		(loss) of the		Direct or	losses	recognized in	Book	value of the	repatriated	as of
Name of the investee			Investments	from Taiwan at the						Taiwan in the		Investee for		Indirect	the current period		investment at the		the end of	the
in mainland China	Main Businesses and Products	Paid-in Capital	(Note 2)	beginningof theperiod		Outward		Inward		period end		currentperiod		Investment		(note 3)	end of theperiod		period		Remarks
Dongguan Pan-	Manufacturing and sale of	$ 456,740	2	$	348,125	$	-	$	-	$	348,125	$	307,172	100	$	307,172	$	1,043,592	$	-	note 6
International	wires, cables, connecting
Precision Electronics	wires, connecting wire
Co., Ltd.	connectors, and wire plugs.
Fuyu Property	Engaging in the e-commerce	5,047,397	2		758,913		-		-		758,913		49,886	16.87		-		622,429		-	Note 8
(Shanghai) Co., Ltd.	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.
New Ocean Precision	Manufacturing and operation	267,360	2		-		-		-		-	(	28,876)	100	(	28,876)		602,833		-
Component (Jiangxi)	of various types of plugs and
Co., Ltd.	sockets and
	telecommunications.
Honghuasheng	Production and sale of hard	2,389,530	2		2,464,725		-		-		2,464,725		183,586	100		183,586		3,673,907		-	Note 4
Precision Electronics	single (double) side printed
(Yantai) Co., Ltd.	circuit boards, hard multi-
	layer printed circuit boards,
	flexible multi-layer printed
	circuit boards, and other
	printed circuit boards

Table 9 page 1

~71~

The cumulative amount of outward remittance of In compliance with the investment limit stipulated by investment from Taiwan to mainland China at the Investment amount approved by the Investment the Investment Commission, MOEA for investment in Company name end of the period (notes 5 and 6) Commission, MOEA mainland China. (note 7). Pan-International Industrial Corp. $ 3,948,879 $ 5,637,937 $ -

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:

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

Note 3: Except for Dongguan Pan-International Precision Electronics Co., Ltd., the figures in the investment profit and loss column recognized in the period are recognized in the financial report which is reviewed by accountants.

Note 4: In the first quarter of 2012, the company acquired 100% of the equity of East Honest Holdings Limited through the subsidiary Pan Global Holding Co., Ltd. and indirectly acquired Honghuasheng Precision Electronics (Yantai) Co., Ltd.; the investment amount approved by the Investment Commission, MOEA was USD 107,217 thousand.

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

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 0920028972 Dongguan Junwang Technology Co., Ltd. 09900496780 Saibo Digital Technology (Guangzhou) Co., Ltd. 10000205680 Yunnan Saibo Digital Technology Co., Ltd. 10000205690 Chongqing Saibotel Digital Square Co., Ltd. 10000205700 Nanchong Saibo Digital Square Co., Ltd. 10600038030 UER Battery Technology (Shenzhen) Co., Ltd. 10630024870 Ganchuang International Trade (Shenzhen) Co., Ltd.	Original investment amount remitted from Taiwan 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 42 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: The Company received a letter from the Industrial Development Bureau, MOEA referenced Jing-Shou-Gong-Zi No. 10820432920 in December 2019 certifying the compliance with the operation scope of operation headquarters, and no investment limit is required from December 4, 2019 to December 3, 2022.
Note 8: The Company’s subsidiary Pan Global Holding Co., Ltd. sold 16.87% of its-owned Class A shares of CYBERTAN TECHNOLOGY CORP. in the second quarter of 2021. The reinvestment business Fuyu Property (Shanghai) Co., Ltd. was indirectly disposed of. As of September 30, 2021, the Company indirectly held 16.87% of Class B shares of its reinvestment business Fuyu Property (Shanghai) Co., Ltd.

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Pan-International Industrial Corp. and Subsidiaries Information on major shareholders September 30, 2021

Table 10

Unit: NTD thousand

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

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: Total number of shares that have completed scriptless registration (including treasury shares) that have completed dematerialized registration and delivery is 518,346,282 shares = 518,346,282 (common shares) + 0 (preferred shares).

Page 1 of Table 10

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AI assistant

PI — Interim / Quarterly Report 2021

52009_rns_2021-12-14_baba1ced-3fdf-4588-96d6-575d9bc187a7.pdf

Pan-International Industrial Corp. and Subsidiaries

CONSOLIDATED FINANCIAL STATEMENTS AND REVIEW REPORT OF

INDEPENDENT ACCOUNTANTS 3[rd] QUARTER IN 2021 AND 2020

Table of Contents

Independent Auditors’ Review Report

To Pan-International Industrial Corp.

Foreword

Scope

Basis for Qualified Conclusion

Conclusion

Other item - Review by Other Accountants

Yung-Chien Hsu Independent Auditors Min-Chuan Feng

Pan-International Industrial Corp. and Subsidiaries Consolidated Balance Sheets

September 30, 2021, December 31, 2020, and September 30, 2020

Pan-International Industrial Corp. and Subsidiaries Consolidated Balance Sheets

September 30, 2021, December 31, 2020, and September 30, 2020

Pan-International Industrial Corp. and Subsidiaries Consolidated Statements of Comprehensive Income January 1 to September 30, 2021 and 2020

Pan-International Industrial Corp. and Subsidiaries Consolidated Statements of Comprehensive Income January 1 to September 30, 2021 and 2020

Pan-International Industrial Corp. and Subsidiaries Consolidated Statements of Changes Equity January 1 to September 30, 2021 and 2020

Pan-International Industrial Corp. and Subsidiaries

Consolidated Statements of Cash Flows

January 1 to September 30, 2021 and 2020

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

I. Organization and operations

II. The Authorization of Financial Reports

III. Application of Newly Released and Revised Standards and Interpretations

IV. Summary of Significant Accounting Policies

(I) Statement of compliance

(II) Basis of preparation

(III) Basis of consolidation

2. Subsidiaries listed in the consolidated financial reports:

Comprehensive Income Statement

(IV) Foreign exchange conversion

(V) Classification criteria for current and non-current assets and liabilities

(VI) Cash equivalents

(VII) Financial assets at FVTPL

(VIII) Financial assets at FVTOCI

(IX) Financial assets measured at after-amortization cost

(X) Accounts and notes receivable

(XI) Impairment of financial assets

(XII) Derecognition of financial assets

(XIII) Lessor’s lease transaction - Operating lease

(XIV) Inventory

- (XV) Investment by the equity method Affiliated enterprises

(XVI) Property, plant, and equipment

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

(XVIII) Investment property

(XIX) Intangible asset

(XX) Impairment of non-financial assets

(XXI) Borrowings

(XXII) Note payable and accounts payable

(XXIV) Derecognition of financial liabilities

(XXV) The offset of financial assets and liabilities

(XXVI) Non-hedging derivatives and embedded derivatives

(XXVII) Employee welfare

1. Short-term employee benefits

2. Pension

(XXVIII) Income tax

(XXIX) Dividend distribution

(XXX)Revenue recognition

(XXXI)Government subsidy

(XXXII) Business combination

(XXXIII)Operating departments

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

(I) Important judgment for accounting policy adoption

(II) Important accounting estimates and assumptions

Inventory evaluation

VI. Summary of Significant Accounting Items

(I) Cash and cash equivalents

(II) Financial assets at FVTPL

(IV) Inventory

(VII) Property, plant, and equipment

6. Please refer to Note 8 for details of the Group’s right-of-use assets pledged as collateral.

(IX) Investment property

(X) Intangible assets - Goodwill

(XI) Short-term borrowings

(XII) Other payables

PI Interim / Quarterly Report 2021