PI — Interim / Quarterly Report 2023

Dec 22, 2023

Pan-International Industrial Corp. and Subsidiaries

CONSOLIDATED FINANCIAL STATEMENTS AND REVIEW REPORT OF INDEPENDENT ACCOUNTANTS

First Quarter of 2023 and 2022 (Stock code 2328)

Address: No. 97 Anxing Rd., Xindian District, New Taipei City

Tel.: (02)2211-3066

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

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Pan-International Industrial Corp. and Subsidiaries

CONSOLIDATED FINANCIAL STATEMENTS AND REVIEW REPORT OF INDEPENDENT ACCOUNTANTS FOR THE 1[st] QUARTER of 2023 AND 2022 Table of Contents

Item I. Cover II. Table of Contents III. Independent Auditors’ Review Report IV. Consolidated Balance Sheet V. Consolidated Comprehensive Income Statement VI. Consolidated Statement of Changes in Shareholders Equity VII. Consolidated Statement of Cash Flows VIII. Notes to Consolidated Financial Statements (I) Company History (II) The date and procedure for approval of the financial statements (III) Application of newly released and amended standards and interpretations (IV) Summary of Significant Accounting Policies (V) Sources of material aspects in accounting judgement, estimate, assumption and uncertainties (VI) Notes to important account items (VII) Related party transactions

Page No. 1 2 ~ 3 4 ~ 6 7 ~ 8 9 ~ 10 11 12 ~ 13 14 ~ 58 14 14 14 ~ 15 15 ~ 28 28 ~ 29 29 ~ 43 43 ~ 46

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Item (VIII) Pledged assets (IX) Significant contingent liabilities and unrecognized contractual commitment (X) Loss from major disasters (XI) Materiality after the reporting period (XII) Miscellaneous (XIII) Notes disclosure (XIV) Operating segments information	Page No. 46 46 46 46 47 ~ 58 58 58 ~ 59

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Independent Auditors’ Review Report (2023) Cai-Shen-Bao-Zi No. 23000439

To Pan-International Industrial Corp.

Foreword

We have reviewed the consolidated balance sheet of March 31, 2023 and 2022, the consolidated comprehensive income sheet, consolidated statement of changes in equity, consolidated statement of cash flows for the three months then ended, and the notes to the consolidated financial statements (including the summary of material accounting policies) of Pan-International Industrial Corp. and its subsidiaries. It is the responsibility of the management to prepare properly expressed consolidated financial reports in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and IAS 34 “Interim Financial Reporting” endorsed and issued into effect 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 Standard No. 2410. 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 paragraph of the qualified opinion

As stated in Notes 4 (3) and 6 (6) to the consolidated financial reports, the financial reports of the same period of some non-significant subsidiaries are included in the consolidated financial reports mentioned above and investments by equity method have not been verified by us. The total assets as of March 31, 2023 and 2022 were NT$1,209,960 thousand and NT$1,693,026 thousand, respectively, which accounted for 5% and 7% of the total consolidated assets (including investment by equity method), respectively. The total liabilities were NT$336,157 thousand and NT$428,548 thousand, accounting for 4% and 5% of the total

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consolidated liabilities, respectively. The comprehensive income for the three months ended March 31, 2023 and 2022 were NT$6,274 thousand and NT$18,484 thousand , which accounted for 1% and 5% of the consolidated comprehensive income, respectively.

Conclusion

According to our review results and the review report by other independent auditors, (please refer to the “Other matters” paragraph), except for the financial reports of the nonsignificant 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 endorsed and issued into effect by the Financial Supervisory Commission which may lead to the inability to properly express the consolidated financial status of Pan-International Industrial Corp. and its subsidiaries as of March 31, 2023 and 2022, and the consolidated financial position and the consolidated financial performance and consolidated cash flow for the period then ended.

Other item - Review by Other Independent Auditors

For some of the subsidiaries included in the consolidated financial reports of the PanInternational Group, their financial reports are not reviewed by us but by other independent auditors. We have implemented a necessary review of the adjustments to the conversion of these subsidiaries' financial reports into consistent accounting policies. Therefore, in our review report pertaining to the consolidated financial reports above, the amounts in the financial reports of these subsidiaries before adjustments are based on the review reports of other independent auditors. Their total assets as of March 31, 2023 and 2022 were NT$6,088,754 thousand and NT$5,384,917 thousand, respectively, accounting for 25% and 24% of the total consolidated assets. The operating revenue for the three months ended March 31, 2023 and 2022 was NT$2,302,508 thousand and NT$1,782,279 thousand, accounting for 38% and 30% of the consolidated operating revenue.

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PwC Taiwan

Yung-Chien Hsu

Independent Auditors

Min-Chuan Feng

Former Financial Supervisory Commission, Executive Yuan Approval No.: (1995)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

May 9, 2023

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Pan-International Industrial Corp. and its Subsidiaries Consolidated Balance Sheet

March 31, 2023, December 31, 2022, and March 31, 2022

(the consolidated balance sheet as of March 31, 2023 and 2022 was only reviewed but not audited according to the auditing standards) Unit: NTD thousand

Assets	Note	March 31, 2023 Amount % $ 7,507,168 31 10,339 - 17,440 - 3,060,907 12 3,076,545 12 642,213 3 3,852,136 16 151,183 1 18,317,931 75 2,004,824 8 716,202 3 2,697,748 11 361,589 2 99,699 - 37,104 - 65,724 - 161,579 1 6,144,469 25 $ 24,462,400 100	December 31, 2022 Amount % $ 6,713,571 27 10,239 - 35,075 - 3,555,291 14 4,173,927 16 742,484 3 3,893,919 15 126,203 1 19,250,709 76 1,752,355 7 733,731 3 2,686,495 11 385,399 1 100,319 - 37,072 - 71,071 - 387,352 2 6,153,794 24 $ 25,404,503 100	March 31, 2022	March 31, 2022
		Amount $ 7,507,168 10,339 17,440 3,060,907 3,076,545 642,213 3,852,136 151,183 18,317,931 2,004,824 716,202 2,697,748 361,589 99,699 37,104 65,724 161,579 6,144,469 $ 24,462,400	Amount $ 6,713,571 10,239 35,075 3,555,291 4,173,927 742,484 3,893,919 126,203 19,250,709 1,752,355 733,731 2,686,495 385,399 100,319 37,072 71,071 387,352 6,153,794 $ 25,404,503	Amount $ 6,391,275 9,513 614 2,748,854 2,816,564 629,242 4,074,878 253,047 16,923,987 2,194,430 764,528 2,162,256 399,607 217,899 37,379 69,120 72,071 5,917,290 $ 22,841,277	%
Current Assets 1100 Cash and cash equivalents 1110 Financial assets at FVTPL - Current 1150 Net notes receivable 1170 Net accounts receivable 1180 Accounts receivable - Related parties net 1200 Other receivables 130X Inventory 1470 Other current assets 11XX Total Current Assets Non-Current Assets 1517 Financial assets measured at fair value through other comprehensive income - Non- current 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) and 7 6 (3) 7 6 (5) 6 (4) 8 6 (5) 6 (6) and 8 6 (7) and 8 6 (8) and 8 6 (9) and 8 6 (10) 6 (13) and 8				28 - - 12 12 3 18 1
					74
					10 3 10 2 1 - - -
					26
					100

(continued)

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Pan-International Industrial Corp. and its Subsidiaries Consolidated Balance Sheet

March 31, 2023, December 31, 2022, and March 31, 2022

(the consolidated balance sheet as of March 31, 2023 and 2022 was only reviewed but not audited according to the auditing standards)

Unit: NTD thousand

						March 31, 2023				December 31, 2022	December 31, 2022			March 31, 2022
	LIABILITIES AND EQUITY		Note			Amount	%			Amount	%			Amount	%
	Current liability
2100	Short-term borrowings	6 (11)			$	1,515,768		6	$	2,101,238		8	$	1,002,604	5
2120	Financial liabilities measured	6 (2)
	at fair value through income -
	Current					-		-		-		-		1,284	-
2130	Contractual liabilities - Current	6 (19) and 7				210,541		1		273,608		1		504,433	2
2150	Notes payable					294,269		1		356,341		2		26,452	-
2170	Accounts payable					3,655,168	15			3,839,452	15			3,836,046	17
2180	Accounts payable - Related	7
	parties					1,335,447		6		1,511,347		6		1,198,502	5
2200	Other payables	6 (12)				1,305,371		5		1,642,799		7		1,468,484	7
2230	Current tax liabilities					230,802		1		335,586		1		263,087	1
2280	Lease liabilities - Current	7				83,769		-		89,159		-		86,570	-
2399	Other current liabilities - Other					21,527		-		23,204		-		7,030	-
21XX	Total current liabilities					8,652,662	35			10,172,734	40			8,394,492	37
	Non-current liabilities
2570	Deferred tax liabilities					364,252		2		346,399		1		292,387	1
2580	Lease liabilities - Non-current	7				84,514		-		99,595		1		157,434	1
2600	Other non-current liabilities	6 (13)				17,672		-		16,408		-		19,770	-
25XX	Total non-current
	liabilities					466,438		2		462,402		2		469,591	2
2XXX	Total liabilities					9,119,100	37			10,635,136	42			8,864,083	39
	Equity attributable to owners of
	the parent company
	Share capital	6 (14)
3110	Common share capital					5,183,462	21			5,183,462	21			5,183,462	23
	Capital surplus	6 (15)
3200	Capital surplus					1,503,606		7		1,503,606		6		1,503,606	6
	Retained earnings	6 (16)
3310	Legal reserve					1,269,138		5		1,269,138		5		1,138,619	5
3320	Special reserve					1,072,435		4		1,072,435		4		1,349,724	6
3350	Undistributed earnings					5,552,366	23			5,255,632	21			4,007,960	18
	Other equities	6 (17)
3400	Other equities			(		1,134,122 ) (		5) (		1,385,208) (		6) (		999,525 ) (	5)
31XX	Total equity attributable to
	owners of the parent
	company					13,446,885	55			12,899,065	51			12,183,846	53
36XX	Non-controlling interests	6 (18)				1,896,415		8		1,870,302		7		1,793,348	8
3XXX	Total equity					15,343,300	63			14,769,367	58			13,977,194	61
	Significant Contingent Liabilities	9
	and Unrecognized Commitments
	Significant Subsequent Events	11
3X2X	Total liabilities and equity				$	24,462,400	100		$	25,404,503	100		$	22,841,277	100

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

Chairman ： Song-Fa Lu

Accounting supervisor ： Feng-An Huang

Manager ： Song-Fa Lu

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Pan-International Industrial Corp. and its Subsidiaries Consolidated Statements of Comprehensive Income For the three months ended March 31, 2023 and 2022

(Only reviewed but not audited according to the auditing standards)

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

Item

January 1, 2023 to March 31,2023 January 1, 2022 to March 31,2022 Note Amount % Amount % 6 (19) and 7 $ 6,080,658 100 $ 5,962,146 100 6 (4) (22) And 7 ( 5,262,849) ( 87)( 5,346,789)( 90) 817,809 13 615,357 10 6 (22) ( 79,731) ( 1) ( 69,903 ) ( 1) ( 181,856) ( 3) ( 155,116 ) ( 3) ( 105,203) ( 2) ( 87,850 ) ( 1) 12 (3) ( 5,128) - 702 - ( 371,918) ( 6)( 312,167)( 5) 445,891 7 303,190 5 37,819 1 14,271 - 6 (20) 12,263 - 22,683 1 6 (21) ( 9,412) - 11,151 - 6 (23) ( 27,950) ( 1) ( 3,038 ) - 6 (6) ( 18,736) - 22,194 - ( 6,016) - 67,261 1 439,875 7 370,451 6 6 (24) ( 100,091) ( 2)( 88,397)( 1) $ 339,784 5 $ 282,054 5

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

(continued)

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Pan-International Industrial Corp. and its Subsidiaries Consolidated Statements of Comprehensive Income For the three months ended March 31, 2023 and 2022

(Only reviewed but not audited according to the auditing standards)

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

Item

January 1, 2023 to March 31,2023 January 1, 2022 to March 31,2022 Note Amount % Amount % 6 (17) $ 263,821 4 ($ 253,747)( 4) 263,821 4 ( 253,747)( 4) 6 (17) (18) ( 29,672) - 373,318 6 ( 29,672) - 373,318 6 $ 234,149 4 $ 119,571 2 $ 573,933 9 $ 401,625 7 $ 296,734 4 $ 217,941 4 43,050 1 64,113 1 $ 339,784 5 $ 282,054 5 $ 547,820 9 $ 290,850 5 26,113 - 110,775 2 $ 573,933 9 $ 401,625 7 6 (25) $ 0.57 $ 0.42 $ 0.57 $ 0.42

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

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

Chairman ： Song-Fa Lu

Accounting supervisor ： Feng-An Huang

Manager ： Song-Fa Lu

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Pan-International Industrial Corp. and its Subsidiaries Consolidated Statement of Changes in Shareholders Equity For the three months ended March 31, 2023 and 2022

(Only reviewed but not audited according to the auditing standards)

Unit: NTD thousand

2022 Balance on January 1 Net income for the period Other comprehensive income recognized for the period Total comprehensive income in the current period Earnings distribution and provisions for 2021: Cash dividends Balance on March 31 2023 Balance on January 1 Net income for the period Other comprehensive income recognized for the period Total comprehensive income in the current period Balance on March 31	Note				Equityattributable to owne	Equityattributable to owne	rs of theparent com	pany		Total	Non-controlling interests	Total Equity
		Common share capital $ 5,183,462 - - - - $ 5,183,462 $ 5,183,462 - - - $ 5,183,462		Capitalsurplus	Capital reserve - difference between the price and face value from the acquisition or disposal of subsidiaryequity		Retained earnings	Undistributed earnings $ 4,308,365 217,941 - 217,941 ( 518,346 ) $ 4,007,960 $ 5,255,632 296,734 - 296,734 $ 5,552,366	Otherequities Exchange differences arising from the translation of the financial statements of foreign operations Unrealized gain (loss) on financial assets at fair value through other comprehensive income ($ 1,360,659 ) $ 288,225 - - 326,656 ( 253,747 ) 326,656 ( 253,747 ) - - ($ 1,034,003 ) $ 34,478 ($ 965,367 ) ($ 419,841 ) - - ( 12,735 ) 263,821 ( 12,735 ) 263,821 ($ 978,102 ) ($ 156,020 )
			Capital reserve - issuance premium	Capital reserve - treasury shares Share transactions		Legal reserve	Special reserve		Exchange differences arising from the translation of the financial statements of foreign operations
	6 (17) 6 (16) 6 (17)		$ 1,402,318 - - - - $ 1,402,318 $ 1,402,318 - - - $ 1,402,318	$ 98,543 - - - - $ 98,543 $ 98,543 - - - $ 98,543	$ 2,745 - - - - $ 2,745 $ 2,745 - - - $ 2,745	$ 1,138,619 - - - - $ 1,138,619 $ 1,269,138 - - - $ 1,269,138	$ 1,349,724 - - - - $ 1,349,724 $ 1,072,435 - - - $ 1,072,435		($ 1,360,659 ) - 326,656 326,656 - ($ 1,034,003 ) ($ 965,367 ) - ( 12,735 ) ( 12,735 ) ($ 978,102 )	$ 12,411,342 217,941 72,909 290,850 ( 518,346 ) $ 12,183,846 $ 12,899,065 296,734 251,086 547,820 $ 13,446,885	$ 1,682,573 64,113 46,662 110,775 - $ 1,793,348 $ 1,870,302 43,050 ( 16,937 ) 26,113 $ 1,896,415	$ 14,093,915 282,054 119,571 401,625 ( 518,346 ) $ 13,977,194 $ 14,769,367 339,784 234,149 573,933 $ 15,343,300

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

Chairman: Song-Fa Lu

Accounting supervisor: Feng-An Huang

Manager: Song-Fa Lu

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Pan-International Industrial Corp. and its Subsidiaries Consolidated Statement of Cash Flows

For the three months ended March 31, 2023 and 2022

(Only reviewed but not audited according to the auditing standards)

Unit: NTD thousand

CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax Adjustments income and expenses items Depreciation expenses and amortizations Anticipated credit impairment loss (gain) Net benefits of financial assets and liabilities measured at fair value through the income Interest expense Interest income Dividend income Share of profits and losses of affiliated companies recognized by the equity method Net losses (gains) from the disposal of property, plant and equipment Loss on disposal of investments Unrealized conversion gains (losses) Changes in assets/liabilities related to operating activities Net change in assets related to operating 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 operating activities Contractual liabilities Notes payable Accounts payable Accounts payable - Related parties Other payables Other current liabilities Other non-current liabilities Cash inflow from operations Income tax paid Net cash inflow from operating activities Cash flows from investing activities Purchase property, plant and equipment assets Proceeds from disposal of property, plant and equipment Increase in refundable deposits Decrease in other non-current assets Interest received Dividend received Net Cash inflow (outflow) from investing activities Cash flows from financing activities Decrease in short-term borrowings

Note January 1, 2023 to March 31,2023 January 1, 2022 to March 31,2022 $ 439,875 $ 370,451 6 (22) 164,110 137,638 12 (3) 5,128 ( 702 ) 6 (21) ( 10,322 ) ( 23,337 ) 6 (23) 27,950 3,038 ( 37,819 ) ( 14,271 ) 6 (20) ( 2 ) ( 3 ) 6 (6) 18,736 ( 22,194 ) 6 (21) ( 124 ) 11,238 6 (21) 1,079 - ( 12,560 ) 20,920 10,135 26,679 17,862 15,512 483,771 214,219 1,104,720 559,855 93,278 105,109 32,776 888,120 ( 24,754 ) 21,982 ( 63,067 ) ( 434,634 ) ( 63,831 ) ( 39,657 ) ( 192,269 ) ( 1,145,583 ) ( 173,379 ) ( 134,656 ) ( 313,107 ) ( 199,742 ) ( 1,804 ) ( 20,208 ) 1,208 525 1,507,590 340,299 ( 136,128 ) ( 72,889 ) 1,371,462 267,410 6 (27) ( 178,366 ) ( 216,619 ) 140 2,890 ( 11,560 ) ( 3,252 ) 236,881 473 37,819 14,271 2 3 84,916 ( 202,234 ) 6 (28) ( 567,596 ) ( 55,938 )

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

Chairman ： Song-Fa Lu

Accounting supervisor ： Feng-An Huang

Manager ： Song-Fa Lu

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Pan-International Industrial Corp. and its Subsidiaries Consolidated Statement of Cash Flows

For the three months ended March 31, 2023 and 2022

(Only reviewed but not audited according to the auditing standards)

Unit: NTD thousand

Lease principal repayment Interest paid Net cash outflow from financing activities Impact of changes in the exchange rate on cash and cash equivalents Increase in cash and cash equivalents in the current period Cash and cash equivalents at the beginning of the period Cash and cash equivalents at the end of the period	Note January 1, 2023 to March 31,2023 January 1, 2022 to March 31,2022 ( 9,372 ) ( 11,188 ) ( 27,950 ) ( 3,038 ) ( 604,918 ) ( 70,164 ) ( 57,863 ) 154,478 793,597 149,490 6,713,571 6,241,785 $ 7,507,168 $ 6,391,275

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

Chairman ： Song-Fa Lu

Accounting supervisor ： Feng-An Huang

Manager ： Song-Fa Lu

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Pan-International Industrial Corp. and Subsidiaries Notes to consolidated financial reports First Quarter of 2023 and 2022

(Only reviewed but not audited according to the auditing standards)

Unit: NTD thousand (unless otherwise noted)

I. Company History

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 date and procedure for approval of the financial statements

This consolidated financial report was announced after being submitted to the Board of Directors on May 9, 2023.

III. Application of newly released and amended standards and interpretations

(I) The impact of adopting the new and revised International Financial Reporting Standards (IFRS) recognized and promulgated by the FSC

The following table sets forth the standards and interpretations for the new issues, amendments, and revisions of IFRS recognized and promulgated by the FSC for application in 2023:

New issued/amended/revised standards and interpretations	Effective date of the release of the International Accounting Standards Board
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"	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.

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

None.

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

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

Effective date of the release of the International Accounting New rules/amendments/amended standards and interpretations Standards Board Amendments to IFRS 10 and IAS 28 "Asset sales or investments To be decided by IASB between investors and their associated enterprises or joint ventures" Amendment to IFRS 16 "Lease Liabilities for Sale and Leaseback" January 1, 2024 IFRS 17 “Insurance contracts” January 1, 2023 Amendment to IFRS 17 “Insurance contracts” January 1, 2023 Amendment to IFRS 17 “Initial Application of IFRS 17 and IFRS January 1, 2023 9 ─ Information Comparison” Amendment to IAS 1 "Classification of current or non-current January 1, 2024 liabilities" Amendment to IAS 1 "Non-current liabilities with contract terms January 1, 2024 and conditions"

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" endorsed and issued into effect by the FSC.

(II) Basis of preparation

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

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

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

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

5. The preparation of financial reports in accordance with the International Financial Reporting Standards, International Accounting Standards, Interpretation and Interpretation Announcements (hereinafter referred to as IFRSs) recognized by the Financial Supervisory Commission 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

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items with high judgment or complexity, or major assumptions and estimates involving consolidated financial statements. Please refer to note 5 for details.

(III) Basis of consolidation

1. Principles for preparation of consolidated financial reports

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

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

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

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

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

2. Subsidiaries listed in the consolidated financial reports:

Investor	Investee	Main Business	% of Ownership	% of Ownership	March 31, 2022 Explanation
			March 31, 2023	December 31, 2022
Pan- International Industrial Corp. Pan- International Industrial Corp.	PAN- INTERNATIONAL ELECTRONICS INC.(PIU) Pan Global Holding Co., Ltd. (PGH)	Engaged in the import and sales of various electronic products. Engaged in reinvestment in the Asia Pacific and mainland China businesses, and production and	100 100	100 100	100 (5) 100 (1) (2) (3) (4) (5)

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manufacturing of electronic signal cables, connectors, and computer peripheral products. PanYann-Yang Engaged in the 100 100 100 (4) International Investments Corp. domestic (5) Industrial investment Corp. business.

• (1) Pan-International Precision Electronic Co., Ltd., a 2nd-tier subsidiary of PGH, acquired an 80% equity in CJ Electric Systems Co., Ltd. in June 2021. Hence the new investee was included in this consolidated financial report. Pan-International Precision Electronic Co., Ltd. acquired an additional 20% shares in circulation of CJ Electric Systems Co., Ltd. in September 2022 worth $71,576 in cash. The book value of non-controlling interests of CJ Electric Systems Co., Ltd. was $61,540 as of the date of acquisition. For the specific transaction, non-controlling interests lost were worth $61,540.

• (2) PGH's subsidiary GREAT HAVEN HOLDINGS LTD. was de-registered in November 2022.

• (3) Pan-International Corporation (S) Pte Ltd. (PIS), a sub-subsidiary of PGH, conducted a cash capital increase in the first quarter of 2023. The Group did not subscribe in proportion to its shareholding, causing the shareholding to fall to 30%. As a result, the Group lost its control over PIS, so it will not be included in the consolidated financial statements from the date of loss of control.

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

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

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

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

• Major limitation: No such situation.

• Subsidiaries with significant non-controlling interests in the group

The total amount of non-controlling interests of the Group as of March 31, 2023, December 31, 2022, and March 31, 2022 were NT$1,896,415, NT$1,870,302, and NT$1,793,348, respectively. The following is the information about the significant non-controlling interests of the Group and its subsidiaries:

Name of subsidiary	Main business location		Non-controllinginterests December 31,2022 March 31,2022 Amount Shareh olding percent age Amount Sharehol ding percenta ge $ 1,832,190 49 $ 1,703,710 49	Non-controllinginterests December 31,2022 March 31,2022 Amount Shareh olding percent age Amount Sharehol ding percenta ge $ 1,832,190 49 $ 1,703,710 49
		March 31,2023 Amount Shareh olding percent age $ 1,860,364 49
		Amount	Amount	Shareh olding percent age Amount
P.I.E. INDUSTRIAL	Malaysia	$ 1,860,364	$ 1,832,190	49 $ 1,703,710

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BERHAD

Summary financial information of subsidiaries: Balance sheet

Balance sheet
			March	31,		December 31,					March 31,
			2023			2022					2022
Current Assets		$	4,496,175		$	4,702,333				$	4,089,927
Non-Current Assets			1,348,798			1,334,687					1,155,645
Current liability	(		1,941,870) (			2,204,321 ) (					1,688,901 )
Non-current liabilities	(			73,618) (			61,208 ) (				49,652 )
Net total assets		$	3,829,485		$	3,771,491				$	3,507,019
Comprehensive Income Statement
			January1 to March 31,2023					January1 to March 31,2022
Income			$			2,302,508			$		1,782,279
Net income before tax						127,147					155,966
Income tax expense			(			34,280	)	(			31,670 )
Net income for the period						92,867					124,296
Other comprehensive income (after tax) (						26,499	)				103,224
Total comprehensive income in the
current period			$			66,368			$		227,520
Total comprehensive profit and loss
attributable to non-controlling
interests			$			32,242			$		110,529
Cash Flow Statement
			January1 to March 31,2023					January		1 to March 31,2022
Net cash inflow (outflow) from operating
activities			$			403,745			$		88,285
Net cash outflow from investment
activities			(			72,355	)	(			47,544 )
Net cash inflow (outflow) from financing
activities			(			235,363	)	(			139,774 )
Effects of exchange rate changes	on the
balance of cash and cash equivalents			(			1,127	)				6,591
Decrease in cash and cash equivalents in
the current period						94,900		(			92,442 )
Cash and cash equivalents at the
beginning of the period						438,891					518,935
Cash and cash equivalents at the end of
the period			$			533,791			$		426,493

• (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

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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.

1. 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. Assets and liabilities expressed on each balance sheet are converted at the closing exchange rate on that 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.

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

3. 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.

   • (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.

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

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

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

3. (2) Held mainly for trading purposes.

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

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

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

• (VI) Cash equivalents

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

(VII) Financial assets at FVTPL

1. Financial assets that are not measured at amortized cost or at fair value through other comprehensive income.

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

3. The Group measures their fair value at the time of 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.

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

(VIII) Financial assets at FVTOCI

1. Refers to an irrevocable choice at the time of initial recognition to report changes in the fair value of equity instrument investments that are not held for trading in other comprehensive income; or debt instrument investments that meet the following conditions at the same time:

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

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

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

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

6. (1) Changes in the fair value of equity instruments are recognized in other comprehensive income. At the time of derecognition, the accumulated profits or losses previously

~20~

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

1. 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.

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

3. 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.

4. 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.

5. (X) Accounts and notes receivable

6. 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.

7. 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.

8. (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 or contract assets, 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.

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(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 the estimated costs necessary to make the sale.

- (XV) Investment by equity method Affiliated enterprises

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

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

3. When there is a change in equity from a related company that is not profit or loss or other comprehensive profit or loss and does not affect the shareholding ratio of the related company, the Group shall recognize the change in ownership as a “capital reserve” based on the shareholding ratio.

4. 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.

5. 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

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

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

~22~

or loss when incurred.

1. 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.

2. 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	15~51	years
Equipment	3~9	years
Others	1~6	years

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

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

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

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

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

(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 15–51 years.

(XIX) Intangible asset

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

(XX) Impairment of non-financial assets

1. The group estimates the recoverable amount of assets with signs of impairment on the balance sheet date. When the recoverable amount is lower than its book value, the

~23~

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.

1. 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.

2. 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.

(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

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

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

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

1. It refers to financial liabilities that are incurred for the primary purpose of repurchasing in the near term and derivatives held for trading other than those designated as hedging instruments under hedging accounting.

2. 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

~24~

on the contract signing date, and recognized as financial assets or liabilities measured at fair value through income; subsequently, they are measured at fair value, and the profit or loss is recognized in profit or loss.

(XXVII) Employee welfare

1. Short-term employee benefits

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

1. Pension

2. (1) Defined allocation plan

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

• (2) Defined benefit plan

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

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

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

• Employee remuneration and director’s remuneration

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

(XXVIII) Income tax

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

2. The group calculates the current income tax based on the tax rate enacted or substantively enacted on the balance sheet date by the country where the group operates

~25~

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.

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

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

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

4. The 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.

5. 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.

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

~26~

(XXIX) Dividend distribution

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

(XXX) Revenue recognition

1. The group manufactures and sells 3C related products. Revenue from sales is recognized when the control of the product is transferred to the customer, that is, when the product is delivered to the buyer, the buyer has discretion over the price of the product, and the group has no outstanding performance obligation that may affect the customer's acceptance of the product. When the product is delivered to the designated place, the risk of obsolescence and loss has been transferred to the customer, and the customer accepts the product according to the sales contract, or if there is objective evidence to prove that all acceptance criteria have been met. Accounts receivable are recognized when the goods are delivered to the customer. Since then, the Group has unconditional rights to the contract price, and the consideration can be collected from the customer after a certain period of time.

2. The terms of payment for sale transactions are usually due 30 to 120 days after the date of shipment. Since the time interval between the transfer of the promised goods or services to the customer and the customer's payment does not exceed one year, the Group has not adjusted the transaction price to reflect the time value of the currency.

(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

1. 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.

2. 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

~27~

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

V. Sources of material aspects in accounting judgement, estimate, assumption and uncertainties

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 see below for a detailed description of the uncertainties of significant accounting judgments, estimates, and assumptions:

(I) Important judgment on the adoption of accounting policies

Recognition of gross or net income

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

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

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

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

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

(II) Important accounting estimates and assumptions

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

~28~

on the estimated product demand in a specific period in the future, so significant changes may occur.

VI. Notes to important account items

(I) Cash and cash equivalents

ash and cash equivalents
Cash on hand and working capital Checking and demand deposit accounts Time deposit Bond repos	March 31,2023	December 31,2022	March 31,2022
	$ 674 5,086,166 2,011,180 409,148	$ 741 4,607,881 1,855,202 249,747	$ 971 5,195,748 1,194,556 -
	$ 7,507,168	$ 6,713,571	$ 6,391,275

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

2. The bank deposits pledged by the Group as of March 31, 2023, December 31, 2022, and March 31, 2022 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. inancial assets at FVTPL
Item Current items: Mandatory financial assets measured at fair value through income Open-end funds Financial liabilities mandatorily measured at fair value through income Foreign exchange forward contracts	March 31, 2023	December 31, 2022	March 31, 2022
	$ 10,339	$ 10,239	$ 9,513
	$ -	$ -	$ 1,284

1. The financial products held by the Group from January 1 to March 31, 2023 and 2022 were recognized as net income of NT$10,322 and net income of NT$23,337, respectively.

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

explained as follows:
Derivative financial liabilities	March 31,	2022
	Contract amount (Nominal principal) (NT$ thousand) RMB (BUY) 190,242 USD (SELL) 30,000	Contractperiod
Current items: Foreign exchange forward contracts		March 2022–April 2022

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,

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but hedge accounting is not applicable. As of March 31, 2023 and December 31, 2022, the foreign exchange forward transactions above have been squared and settled.

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

(III) Notes and accounts receivable

March 31, 2023 December 31, 2022 Note receivable $ 17,440 $ 35,075 Accounts receivable 3,072,031 3,560,514 Less: Allowance for impairment loss ( 11,124 ) ( 5,223 ) ( $ 3,078,347 $ 3,590,366	March 31, 2022 $ 614 2,758,565 9,711 ) 2,749,468

1. The group does not hold any collateral.

2. The balance of accounts receivable and notes receivable as of March 31, 2023, December 31, 2022, and March 31, 2022 were generated from customer contracts, and the balance of notes receivable and accounts receivable of customer contracts on January 1, 2022 was NT$2,933,483.

3. Without considering the collateral or other credit enhancements held, the maximum amount of exposure that best represents the credit risk of notes and accounts receivable of the Group on March 31, 2023, December 31, 2022, and March 31, 2022 is the book value of each type of notes and accounts receivable.

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

(IV) Inventory

Inventory
Raw materials Work in process Finished products Raw materials Work in process Finished products Raw materials Work in process Finished products		March 31,2023
	Cost Allowance for valuation losses $ 1,213,756 ( $ 38,262 ) 1,117,582 ( 9,298 ) 1,681,447 ( 113,089 ) $ 4,012,785 ( $ 160,649 ) December 31,2022		Book value
			$ 1,175,494 1,108,284 1,568,358
			$ 3,852,136
	Cost Allowance for valuation losses $ 1,410,711 ( $ 23,541 ) 993,314 ( 19,990 ) 1,663,402 ( 129,977 ) $ 4,067,427 ( $ 173,508 ) March 31,2022		Book value
			$ 1,387,170 973,324 1,533,425
			$ 3,893,919
	Cost Allowance for valuation losses $ 1,677,695 ( $ 29,229 ) 1,093,269 ( 26,374 ) 1,445,660 ( 86,143 ) $ 4,216,624 ( $ 141,746 )		Book value
			$ 1,648,466 1,066,895 1,359,517
			$ 4,074,878

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

			January 1 to March 31,		January 1 to March 31,
			2023		2022
Cost of inventory sold		$	5,298,736	$	5,388,190
Inventory valuation rebound profit	(		12,820 ) (		5,513 )
Income from sales of scrap materials	(		23,067 ) (		35,888 )
		$	5,262,849	$	5,346,789

During the periods from January 1 to March 31, 2023 and 2022, 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.

	was lower than the cost.	was lower than the cost.	was lower than the cost.	was lower than the cost.
(V)	Financial assets measured at fair value through other comprehensive income				-Non-current March 31,2022
		Item	March 31,2023	December 31,2022 $ 827,081 925,274 $ 1,752,355
		Current items: Equity instruments Listed and OTC stocks Non-listed, OTC, or emerging stocks Total	$ 1,085,309 919,515		$ 1,389,461 804,969
			$ 2,004,824		$ 2,194,430

1. Please refer to Note 6 (17) other equity items for the items the Group recognized in other comprehensive income due to changes in fair value from January 1 to March 31, 2023 and 2022.

2. The fair value of equity instruments sold by the Group in 2021 was NT$761,284, and the accumulated disposal benefits were NT$336,187, which were transferred from other equity to undistributed earnings. According to the agreement, the sale price of the preceding equity transaction shall be collected within 18 months after the closing date. As of March 31, 2023, the Group has not received the sale price of NT$252,468, which is listed as other receivables.

3. None of the Group's financial assets measured at fair value through other comprehensive income were pledged as of March 31, 2023, December 31, 2022, and March 31, 2022.

(VI) Investment by equity method

Long Time Tech. Co., Ltd. Pan-International Corporation (S) Pte Ltd.	March 31,2023	December 31,2022 $ 733,731 - $ 733,731	March 31,2022
	$ 714,994 1,208		$ 764,528 -
	$ 716,202		$ 764,528

1. The Group's investment by equity method during the three months ended March 31, 2022 was evaluated based on financial reports compiled by the affiliated enterprise which were not reviewed by an independent auditor during the same period.

2. The share of operating results of the Group’s significant affiliated companies is summarized as follows:

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January 1 to March 31, 2023 January 1 to March 31, 2022 Current net profit (loss) of continuing business units ( $ 18,736 ) $ 22,194 Total comprehensive income in the current period ( $ 18,736[$] 22,194

1. The Group's subsidiaries Pan Global Holding Co., Ltd. and Tekcon Electronics Corporation hold 22.41% 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.

2. Pan-International Corporation (S) Pte Ltd. (PIS), a sub-subsidiary of the Group, conducted a cash capital increase in the first quarter of 2023. The Group did not subscribe in proportion to its shareholding in 2023, causing the shareholding to fall to 30%. As the Group is not the company’s single largest shareholder, indicating that the Group has no actual power to lead its relevant activities, the Group lost its control over PIS and only has significant influence on it.

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

4. (VII) Property, plant, and equipment

January 1, 2023 Cost Cumulative depreciation 2023 January 1 Addition Disposal Transfer Depreciation expenses Net exchange difference March 31 March 31, 2023 Cost Cumulative depreciation

Land Buildings Equipment Others Unfinished construction and equipment to be accepted Total $ 23,617 $ 811,024 $ 5,735,467 $ 881,950 $ 212,340 $ 7,664,398 ( 453,224 ) ( 3,888,716 ) ( 635,963 ) - ( 4,977,903 ) $ 23,617 $ 357,800 $ 1,846,751 $ 245,987 $ 212,340 $ 2,686,495 $ 23,617 $ 357,800 $ 1,846,751 $ 245,987 $ 212,340 $ 2,686,495 - - 72,655 13,197 51,764 137,616 - - - ( 16 ) - ( 16 ) - ( 819 ) 18,430 - ( 18,430 ) ( 819 ) - ( 6,946 ) ( 107,676 ) ( 21,982 ) - ( 136,604 ) 19 8,560 2,960 1,180 ( 1,643 ) 11,076 $ 23,636 $ 358,595 $ 1,833,120 $ 238,366 $ 244,031 $ 2,697,748 $ 23,636 $ 819,753 $ 5,816,549 $ 894,980 $ 244,031 $ 7,798,949 - ( 461,158 ) ( 3,983,429 ) ( 656,614 ) - ( 5,101,201 ) $ 23,636 $ 358,595 $ 1,833,120 $ 238,366 $ 244,031 $ 2,697,748

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January 1, 2022 Cost Cumulative depreciation 2022 January 1 Addition Disposal Transfer Depreciation expenses Net exchange difference March 31 March 31, 2022 Cost Cumulative depreciation

Land Buildings Equipment Others Unfinished construction and equipment to be accepted Total $ 23,211 $ 656,219 $ 5,110,913 $ 789,034 $ 235,854 $ 6,815,231 - ( 394,779 ) ( 3,681,747 ) ( 585,793 ) - ( 4,662,319 ) $ 23,211 $ 261,440 $ 1,429,166 $ 203,241 $ 235,854 $ 2,152,912 $ 23,211 $ 261,440 $ 1,429,166 $ 203,241 $ 235,854 $ 2,152,912 - 5,746 49,400 6,216 9,289 70,651 - - ( 10,970 ) ( 3,158 ) - ( 14,128 ) - - 18,242 1,313 ( 19,071 ) 484 - ( 5,762 ) ( 89,436 ) ( 17,233 ) - ( 112,431 ) 191 7,173 45,997 5,382 6,025 64,768 $ 23,402 $ 268,597 $ 1,442,399 $ 195,761 $ 232,097 $ 2,162,256 $ 23,402 $ 681,511 $ 5,269,400 $ 819,431 $ 232,097 $ 7,025,841 - ( 412,914 ) ( 3,827,001 ) ( 623,670 ) - ( 4,863,585 ) $ 23,402 $ 268,597 $ 1,442,399 $ 195,761 $ 232,097 $ 2,162,256

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

(VIII) Lease transaction - Lessee

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

2. The lease term of office equipment and transportation equipment leased by the Group does not exceed 12 months.

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

are as follows:
Land Houses Land Houses	March 31,2023 December 31,2022 March 31,2022 Book value Book value Book value $ 198,824 $ 202,154 $ 162,060 162,765 183,245 237,547 $ 361,589 $ 385,399 $ 399,607 January1 to March 31,2023 January1 to March 31,2022 Depreciation expenses Depreciation expenses $ 2,319 $ 1,635 22,389 20,984 $ 24,708 $ 22,619			March 31,2022
			$	Book value
	$			162,060 237,547
	$		$	399,607
		Depreciation expenses
		$ 1,635 20,984
		$ 22,619

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1. The increase in the group's right-of-use assets during the three months ended March 31, 2023 and 2022 were NT$1,139 and NT$91,196, respectively.

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

Items affecting current profit and loss Interest expenses on lease liabilities Expenses of short-term lease contracts	January1 to March 31,2023	January1 to March 31,2022
	$ 1,794 3,164	$ 1,667 4,171

1. The total cash outflow from the leases of the Group during the three months ended March 31, 2023 and 2022 were NT$14,330 and NT$17,026, respectively.

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

(IX) Investment property

			Land	Buildings	Total
January 1, 2023
Cost		$	79,107 $	108,215 $	187,322
Cumulative depreciation and
impairment			- (	87,003 ) (	87,003 )
		$	79,107 $	21,212 $	100,319
2023
January 1		$	79,107 $	21,212 $	100,319
Depreciation expenses			- (	407 ) (	407 )
Net exchange difference	(		1,001 )	788 (	213 )
March 31		$	78,106 $	21,593 $	99,699
March 31, 2023
Cost		$	78,106 $	108,591 $	186,697
Cumulative depreciation and
impairment			- (	86,998 ) (	86,998 )
		$	78,106 $	21,593 $	99,699
			Land	Buildings	Total
January 1, 2022
Cost		$	105,386 $	211,248 $	316,634
Cumulative depreciation and
impairment			- (	102,107 ) (	102,107 )
		$	105,386 $	109,141 $	214,527
2022
January 1		$	105,386 $	109,141 $	214,527
Depreciation expenses			- (	1,463 ) (	1,463 )
Net exchange difference			1,288	3,547	4,835
March 31		$	106,674 $	111,225 $	217,899

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March 31, 2022 Cost Cumulative depreciation and impairment	$ 106,674 $ 216,200 $ 322,874 - ( 104,975 ) ( 104,975 ) $ 106,674 $ 111,225 $ 217,899

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

January 1 to March 31, 2023 January 1 to March 31, 2022 Rental income of investment property[$] 6,899 $ 13,099 Direct operating expenses of investment property that generate rental income in the current period[$] 407 $ 1,463

1. The fair value of the investment property held by the Group as of March 31, 2023, December 31, 2022, and March 31, 2022 were NT$419,829, NT$419,829, and NT$528,369, respectively, which were obtained from the evaluation of government announcement information, and the results belong to the third level of fair value.

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

(X) Intangible assets - Goodwill

ntangible assets-Goodwill
Balance at the beginning of the period Net exchange difference Ending balance	March 31,2023 $ 37,072 32 $ 37,104	December 31,2022 $ 36,218 854 $ 37,072		March 31,2022 $ 36,218 1,161 $ 37,379

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

antai) Co., Ltd. Short-term borrowings
Nature of the borrowings	March 31,2023 $ 1,515,768 December 31,2022 $ 2,101,238 March 31,2022 $ 1,002,604	Interest rate bracket 3.22%~5.41% Interest rate bracket 2.41%~5.39% Interest rate bracket 0.65%~1.08%	Collateral
Bank loans - Credit loans Nature of the borrowings			None. Collateral
Bank loans - Credit loans Nature of the borrowings			None. Collateral
Bank loans - Credit loans			None.

As of March 31, 2023, the Group had an undrawn limit of NT$8,173,669.

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(XII) Other payables

Other payables
Salary, bonus, and employee remuneration payable Equipment payment payable Utility fees payable Repair expenses payable Consumables payable Dividends payables Others	March 31, 2023 $ 475,942 155,171 67,394 45,117 18,145 - 543,602	December 31, 2022 $ 596,849 194,860 63,263 76,253 148,760 - 562,814	March 31, 2022 $ 436,745 94,417 67,985 50,233 50,547 518,346 250,211 $ 1,468,484
	$ 1,305,371	$ 1,642,799

(XIII) Pension

1. Measures for defined retirement benefits

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

3. (2) From January 1 to March 31, 2023 and 2022, the Group recognized pension cost amounting to $693 and $692, respectively, in accordance with the above regulations governing the recognition of pension fund.

4. (3) The Group expected to appropriate $1,701 for payment to the retirement plan for 2024.

5. Measures for defined retirement allocation

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

~36~

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 January 1 to March 31, 2023 and 2022, the Group recognized pension cost amounting to $39,209 and $40,102, respectively, in accordance with the above regulations governing the recognition of pension fund.

• (XIV) Share capital

• As of March 31, 2023, 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 authorizes the Board of Directors to distribute all or part of the dividends and bonuses that shall be distributed, capital surplus, or legal reserves in cash, which shall be approved through a resolution by more than half of the directors present at a Board meeting attended by more than two-thirds of all directors, and the rule that a resolution by a shareholders' meeting is required as in the preceding paragraph shall not apply.

• The Company is in a growth stage, 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

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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.

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

2. On April 18, 2023, the Company’s board of directors passed the 2022 earnings distribution proposal, and the shareholders’ meeting passed the 2021 earnings distribution proposal on June 15, 2022 as follows:

		2022	2022				2021	2021
			Dividend per share						Dividend per
	Amount		(NT$)			Amount			share(NT$)
Legal reserve $		131,884			$	130,519
Special reserve		312,772			(	277,289 )
Cash dividends		725,685	$	1.40		518,346		$	1.00
$	1,170,341				$	371,576
(XVII) Other items of equity
					Adjustment for
		Financial assets at			currency
			FVTOCI		conversion				Total
January 1, 2023	(	$	419,841	)	( $	965,367 ) ( $			1,385,208 )
Unrealized profit or loss of
financial products - Group			263,821			-			263,821
Currency conversion difference
- Group			-		(	12,735 ) (			12,735 )
March 31, 2023	(	$	156,020	)	( $	978,102 ) ( $			1,134,122 )
					Adjustment for
		Financial assets at			currency
			FVTOCI		conversion				Total
January 1, 2022		$	288,225		( $	1,360,659 ) ( $			1,072,434 )
Unrealized profit or loss of
financial products - Group	(		253,747	)		-	(		253,747 )
Currency conversion difference
- Group			-			326,656			326,656
March 31, 2022		$	34,478		( $	1,034,003 ) ( $			999,525 )
(XVIII) Non-controlling interests
			2023					2022
January 1		$			1,870,302	$			1,682,573
Share of non-controlling interest:
Net income for the period					43,050				64,113
Conversion difference from the
conversion of financial statements
of a foreign operation					16,937				46,662
March 31		$			1,896,415	$			1,793,348

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(XIX) Operating revenue

January 1 to March 31, 2023 January 1 to March 31, 2022 Revenue from customer contracts[$] 6,080,658 $ 5,962,146

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

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

follows:
Contractual liabilities	March 31,2023 $ 210,541	December 31,2022	March 31,2022 $ 504,433	January1,2022
		$ 273,608		$ 939,066

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

January 1 to March 31, 2023 January 1 to March 31, 2022 Opening balance of contract liabilities recognized as income in the current period[$] 85,492 $ 609,484

(XX) Other income

XX) Other income
Dividend income Rental income Subsidy income Other income - Other (XXI) Other gains and losses Net gains of financial assets and liabilities measured at fair value through the income Gains (losses) from the disposal of property, plant and equipment Net foreign currency conversion loss Loss on disposal of investments Others	January1 to March 31,2023	January1 to March 31,2022
	$ 2 8,954 1,258 2,049	$ 3 15,135 6,495 1,050
	$ 12,263	$ 22,683
	January 1 to March 31, 2023 $ 10,322 124 ( 19,091 ) ( 1,079 ) 312 $ 9,412	January 1 to March 31, 2022 $ 23,337 ( 11,238 ) ( 2,749 ) - 1,801 $ 11,151

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(XXII) Employee benefit, depreciation and amortization expenses

Bynature Employee benefits expense Salary expenses Labor and national health insurance expenses Pension expenses Other HR expenses Depreciation expenses Amortization expenses	January1 to March 31,2023 $ 823,697 22,131 39,902 51,303 $ 937,033 $ 161,719 $ 2,391	January1 to March 31,2022
		$ 612,779 19,908 40,794 44,608
		$ 718,089
		$ 136,513
		$ 1,125

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

2. The estimated amounts of the Company’s employee remuneration from January 1 to March 31, 2023 and 2022 were NT$18,239 and NT$$11,403, respectively. The remuneration to the Directors was estimated at NT$1,824 and NT$1,140, respectively. The aforementioned amount was presented as salary expense in the book.

The period from January 1 to March 31, 2023 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.

The amounts of employee remuneration and director's remuneration for 2022 were NT$79,012 and NT$7,901, respectively, which were consistent with the amounts recognized in the 2022 financial statements and paid in cash. The unpaid 2022 employee remuneration and director's remuneration as of March 31, 2023 were in the amounts of NT$79,012 and NT$$7,901, respectively, and recognized in “Other payables”.

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

(XXIII) Financial costs

II) Financial costs
Interest expenses on bank loans Interest expenses on lease liabilities Other financial costs	January1 to March 31,2023 $ 24,702 1,794 1,454 $ 27,950	January1 to March 31,2022
		$ 865 1,667 506
		$ 3,038

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(XXIV) Income tax

1. Income tax expense

Components of income tax expenses:

January1 to March 31,2023 Income tax for the current period: Income tax arising from current income $ 108,541 Income tax under (over)estimates of previous years ( 23,213 ) Total income tax for the current period 85,328 Deferred income tax: The original value and reversal of temporary differences 14,763 Income tax expense $ 100,091	January1 to March 31,2022 $ 82,224 101 82,325 6,072 $ 88,397

1. The corporate income tax return of the Company has been approved by the tax collection authorities up to 2020.

(XXV) Earnings per share (EPS)

collection authorities up to 2020. ) Earnings 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	January1 to March 31,2023
	After-tax amount $ 296,734 296,734 - $ 296,734	The weighted average number of outstanding shares (1000 shares)	Earnings per share (NT$)
		518,346	$ 0.57
		518,346 2,171	$ 0.57
		520,517

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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	January1 to March 31,2022	January1 to March 31,2022
	After-tax amount	The weighted average number of outstanding shares (1000 shares)	Earnings per share (NT$)
	$ 217,941	518,346	$ 0.42
	217,941 -	518,346 1,754	$ 0.42
	$ 217,941	520,100

(XXVI) Transactions with non-controlling interests

Pan-International Precision Electronics Co., Ltd., a 2nd-tier subsidiary of the Company, acquired an additional 20% shares in circulation of CJ Electric Systems Co., Ltd. in the third quarter of 2022 worth RMB 16,000 thousand in cash. The book value of noncontrolling interests of CJ Electric Systems Co., Ltd. was $61,540 as of the date of acquisition. For the specific transaction, non-controlling interests lost were worth $61,540 and equity attributable to owners of the parent company dropped by $10,036. Impacts of the changes in the equity of CJ Electric Systems Co., Ltd. for the fourth quarter of 2022 on the equity attributable to the owners of the parent company are as follows:

		2022
Book value of acquired non-controlling interests	$		61,540
Consideration paid to non-controlling interests	(		71,576 )
Retained earnings - All changes in equities of subsidiaries are
recognized	( $		10,036 )

(XXVII) Supplementary information on cash flow

Investment activities with partial cash payment:

		January1 to March 31,2023 January1 to March 31,2022	January1 to March 31,2023 January1 to March 31,2022	January1 to March 31,2023 January1 to March 31,2022
Purchase of property, plant and
equipment		$	137,616 $	70,651
Add: equipment payable at the
beginning of the period			194,860	235,818
Less: equipment payable at the
end of the period	(		155,171 ) (	94,417 )
Net exchange difference			1,061	4,567
Cash paid during the period		$	178,366 $	216,619

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(XXVIII) Changes in liabilities from financing activities

					2023
			Short-term			Total	liabilities from financing
			borrowings	Lease	liabilities		activities
January 1		$	2,101,238	$	188,754	$	2,289,992
Changes in financing cash
flow	(		567,596 ) (		11,166 ) (		578,762 )
Net exchange difference			17,874		794		17,080)
Other non-cash changes			-		10,099		10,099)
March 31		$	1,515,768	$	168,283	$	1,684,051
					2022
			Short-term			Total	liabilities from financing
			borrowings	Lease	liabilities		activities
January 1		$	1,028,206	$	166,173	$	1,194,379
Changes in financing cash
flow	(		55,938 ) (		12,855 ) (		68,793 )
Net exchange difference			30,336		7,422		37,758
Other non-cash changes			-		83,264		83,264
March 31		$	1,002,604	$	244,004	$	1,246,608

VII. Related Party Transactions

(I) Related party’s name and relationship

Name of related party Relationship with the Group Hon Hai Precision Industry Co., Ltd. and subsidiaries (Hon Hai and With significant influence on subsidiaries) the group Sharp Corporation and subsidiaries (Sharp and subsidiaries) Other related parties Foxconn Technology Co., Ltd. and subsidiaries (FTC and subsidiaries) Other related parties GENERAL INTERFACE SOLUTION LIMITED Other related parties Cyber TAN Technology, Inc and Subsidiaries Other related parties Chery Holding Group and Subsidiaries Other related parties (Note 1) Long Time Tech. Co., Ltd. Affiliates Pan-International Corporation (S) Pte Ltd. Affiliate (Note 2)

(Note 1) Listed as non-related party in September 2022

(Note 2) The Group has lost control over it since March 2023 but still has significant influence on it, so it is an affiliate of the Group.

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(II) Major transactions with related parties

1. Operating revenue

Operating revenue
With significant influence on the group - Hon Hai Precision Industry Co., Ltd. and subsidiaries Other related parties - Sharp and subsidiaries - Other	January1 to March 31,2023 $ 1,622,087 910,813 107,232 $ 2,640,132	January1 to March 31,2022
		$ 1,410,063 444,743 452,897
		$ 2,307,703

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

urchase
With significant influence on the group - Hon Hai Precision Industry Co., Ltd. and subsidiaries Other related parties - Foxconn Technology Co., Ltd. and subsidiaries Affiliates	January1 to March 31,2023 $ 526,619 589,004 1,406 $ 1,117,029	January1 to March 31,2022
		$ 520,166 276,921 - $ 797,087

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

3. Receivables from related parties

account. Receivables from related parties
			March 31,	December 31,		March 31,
			2023	2022		2022
Note receivable:
Other related parties - others		$	- $		- $	9,012
Accounts receivable:
With significant influence on the
group
- Hon Hai Precision Industry Co.,
Ltd. and subsidiaries			1,954,646	3,165,783		2,172,897
Other related parties
- Sharp and subsidiaries			859,137	788,580		307,841
- Others			263,454	221,535		328,135
Affiliates			536		-	-
			3,077,773	4,175,898		2,817,885
Less: Allowance for impairment
loss	(		1,228 ) (	1,971 ) (		1,321 )
		$	3,076,545$	4,173,927$		2,816,564

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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. Accounts payables from related parties

Accounts payable: With significant influence on the group - Hon Hai Precision Industry Co., Ltd. and subsidiaries Other related parties - Foxconn Technology Co., Ltd. and subsidiaries - Others Affiliates	March 31,2023	December 31,2022 $ 1,059,124 452,223 - - $ 1,511,347	March 31,2022 $ 965,730 232,473 299 - $ 1,198,502
	$ 864,448 470,918 - 81
	$ 1,335,447

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.

5. Contractual liabilities

Contractual liabilities
With significant influence on the group - Hon Hai Precision Industry Co., Ltd. and subsidiaries Other related parties	March31,2023	December31,2022 $ 105,098 157 $ 105,255	March31,2022 $ 301,175 18,917 $ 320,092
	$ 94,681 -
	$ 94,681

The preceding contract liabilities of NT$93,422, NT$101,310, and NT$300,701 as of March 31, 2023, December 31, 2022, and March 31, 2022 are guaranteed by the Group's investment by equity method, and the number of pledged shares is 7,812,500 shares. Please refer to Note 8 for details.

6. Lease transaction - Lessee

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

• (2) Lease liabilities:

A. Ending balance

March 31, 2023 December 31, 2022 March 31, 2022

With significant influence on the group[$] 29,724 $ 39,286 $ 69,586 B. Interest expenses January 1 to March 31, 2023 January 1 to March 31, 2022

With significant influence on the group[$] 250 $

511

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(III) Compensation of key management personnel

Short-term employee benefits Post-employment benefits Total	January1 to March 31,2023	January1 to March 31,2022
	$ 4,256 60	$ 3,572 60
	$ 4,316	$ 3,632

VIII.Pledged Assets

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

Asset item Other current assets - Pledge time deposit Other non-current assets - Pledge time deposit Property, plant, and equipment Investment property Right-of-use assets Investment by equity method (Long Time Technology)		Book value	March 31, 2022 $ 652 4,957 42,881 9,841 57,736 213,313 $ 329,380	Guaranteepurpose
	March 31, 2023 $ 678 4,874 38,186 10,207 55,205 199,494 $ 308,644	December 31, 2022
		$ 676 4,848 39,126 10,171 55,309 204,721		Issuing of letter of credit and customs deposit Customs deposit Guarantee mortgage for bank line overdraft (note) Guarantee mortgage for a bank line Guarantee mortgage for a bank line Contractual liabilities
		$ 314,851

Note: As of March 31, 2023, the land, buildings and structures above have been pledged as collateral for the overdraft facilities of financial institutions since 2005. The overdraft had been paid off, but the pledge has not been canceled.

IX. Significant Contingent Liabilities and Unrecognized Commitments

(I) Contingent matters

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

(II) Commitments

On November 30, 2021, the Group's Board of Directors approved the purchase of pre-sale factory buildings. The total transaction amount is NT$488,880 and paid in 5 installments. As of March 31, 2023, the outstanding payment is NT$381,330.

X. Loss from major disasters

None.

XI. Materiality after the reporting period

The Board of the Company passed the 2022 earnings distribution proposal on April 18, 2023. Additional information is specified in Note 6 (16).

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XII. Miscellaneous

• (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 during the three months ended March 31, 2023.

(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 2023 is the same as that in 2022, 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 March 31, 2023, December 31, 2022, and March 31, 2022 were NT$14,304,273, NT$15,220,348, and NT$12,586,549, 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$8,106,023, NT$9,451,177, and NT$7,532,088, respectively. In addition, the book values of lease liabilities as of March 31, 2023, December 31, 2022, and March 31, 2022 were NT$168,283, NT$188,754, and NT$244,004, 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.

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

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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 operating 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 (operating activities) on the abovementioned income, the assets and liabilities recognized on the balance sheet, and the net investment in foreign operations also have exchange rate risks.

B. Management

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

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

C. Extent

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

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March 31, 2023

(Foreign currency: functional currency) Financial assets Monetary item USD: NTD USD: RMB USD: MYR EUR: MYR Foreign operations USD: NTD Financial liabilities Monetary item USD: NTD USD: RMB USD: MYR (Foreign currency: functional currency) Financial assets Monetary item USD: NTD USD: RMB USD: MYR EUR: MYR Foreign operations USD: NTD Financial liabilities Monetary item USD: NTD USD: RMB USD: MYR	Foreign currency (thousand)	Exchange rate	Book value (NT$)	Sensitivityanalysis	Sensitivityanalysis
				Range of change	Impact on profit and loss
	$ 103,812 45,280 110,302 3,056 364,164 96,362 6,642 33,964				$ 158,054 68,935 167,935 5,065 146,711 10,112 51,710
	Foreign currency (thousand)	Exchange rate	Book value (NT$)	Sensitivityanalysis
				Range of change	Impact on profit and loss
	$ 154,693 87,721 103,099 2,504 354,215 150,655 7,392 40,959	30.71 6.9646 4.4131 4.7019 30.71 30.71 6.9646 4.4131	$ 4,750,622 2,693,031 3,166,170 81,931 10,877,954 4,626,615 226,934 1,257,851	5% 5% 5% 5% 5% 5% 5%	$ 237,531 134,652 158,309 4,097 231,331 11,347 62,893

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March 31, 2022

(Foreign currency: functional currency) Financial assets Monetary item USD: NTD USD: RMB USD: MYR EUR: MYR Foreign operations USD: NTD Financial liabilities Monetary item USD: NTD USD: RMB USD: MYR	Foreign currency (thousand)	Exchange rate	Book value (NT$)	Sensitivityanalysis	Sensitivityanalysis
				Range of change	Impact on profit and loss
	$ 111,631 67,813 47,803 5,164 347,310 112,380 6,179 49,688	28.63 6.3482 4.2052 4.6885 28.63 28.63 6.3482 4.2052	$ 3,195,996 1,939,790 1,368,600 164,835 9,943,493 3,217,439 176,750 1,422,567	1% 1% 1% 1% 1% 1% 1%	$ 31,960 19,398 13,686 1,648 32,174 1,768 14,226

D. Nature

The total amounts of exchange gains and losses (including realized and unrealized) recognized in the group's monetary items due to exchange rate fluctuations for the three months ended March 31, 2023 and 2022 were NT$19,091 in losses and NT$2,749 in losses, respectively.

Price risk

• A. The equity instruments of the Group exposed to price risk are financial assets measured at fair value through other comprehensive incomes. 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$20,048and NT$21,944, respectively, for the nine months ended March 31, 2023 and 2022.

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

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contractual obligations, which mainly comes from the inability of the counterparties to repay the accounts receivable in accordance with the collection conditions, and the contractual cash flow classified as debt instrument investment measured at after-amortization cost.

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

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

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.

• D. 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.

• E. 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.

• F. 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.

• G. 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	March 31,2023 $ 6,122,212 41,730 3,263 39 $ 6,167,244	December 31,2022 $ 7,717,356 54,012 80 39 $ 7,771,487	March 31,2022
			$ 5,548,594 22,084 217 6,169
			$ 5,577,064

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

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

• Other receivables of the Group are mainly tax refund receivables, receivables on disposal of investments, and receivables on advance payments for other parties. There is no doubt of material non-performance or repayment. Therefore, the

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allowance for loss is measured according to the expected 12 months credit loss amount. The allowances for loss recognized by the Group on March 31, 2023, December 31, 2022, and March 31, 2022 were NT$98,904, NT$0, and NT$0, respectively.

• I. 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 March 31, 2023, December 31, 2022, and March 31, 2022 are as follows:

March 31, 2023 Expected loss rate Total Book value Allowance for loss December 31, 2022 Expected loss rate Total Book value Allowance for loss March 31, 2022 Expected loss rate Total Book value Allowance for loss	Group1	Group2	Group3	Group4	Total
	0.04%	0.04%	0.09%	92.21%	$ 6,167,244
	$ 5,799,174	$ 357,375	$ -	$ 10,695
	$ 2,320	$ 143	$ -	$ 9,889	$ 12,352
	Group1	Group2	Group3	Group4	Total
	0.04%	0.04%	0.09%	0.1%~100%	$ 7,771,487
	$ 7,336,321	$ 428,359	$ -	$ 6,807
	$ 2,935	$ 171	$ -	$ 4,088	$ 7,194
	Group1	Group2	Group3	Group4	Total
	0.04%	0.04%	0.09%	0.1%~100%	$ 5,577,064
	$ 5,210,612	$ 352,842	$ -	$ 13,610
	$ 2,084	$ 141	$ -	$ 8,807	$ 11,032

• 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.

• J. The table of changes in the allowance for losses of accounts receivable (including notes) and other receivables (including related parties) after the Group adopted a simplified approach is as follows:

January 1 Impairment loss (reversed) Net exchange difference March 31	2023 2022 $ 7,194 $ 11,607 5,128 ( 702 ) 30 127 $ 12,352 $ 11,032

• K. All the Group’s debt instrument investments measured at after-amortization cost as of March 31, 2023, December 31, 2022, and March 31, 2022 had a low credit risk. Therefore, the book value is measured according to the expected credit loss

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in 12 months after the balance sheet date.

(3) Liquidity risk

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

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

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

March 31, 2023 Non-derivative financial liabilities: Lease liabilities December 31, 2022 Non-derivative financial liabilities: Lease liabilities March 31, 2022 Non-derivative financial liabilities: Lease liabilities	Less than 1 year	1 ~ 2years	2 ~ 5years	Total
	$ 85,392 Less than 1 year	$ 39,740 1 ~ 2years	$ 55,085 2 ~ 5years	$ 180,217 Total
	$ 95,184 Less than 1 year	$ 42,958 1 ~ 2years	$ 57,847 2 ~ 5years	$ 195,989 Total
	$ 91,957	$ 80,264	$ 82,918	$ 255,139

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

(IV) Fair value information

1. 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

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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.

• 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.

1. 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.

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

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

March 31, 2023 Financial assets: Repetitive fair value Financial assets at FVTPL -Open-end funds Financial assets at FVTOCI - Equity securities December 31, 2022 Financial assets: Repetitive fair value Financial assets at FVTPL -Open-end funds Financial assets at FVTOCI - Equity securities	Level 1	Level 2	Level3	Total
	$ 10,339	$ -	$ -	$ 10,339
	$ 1,085,309	$ -	$ 919,515	$ 2,004,824
	Level 1	Level 2	Level3	Total
	$ 10,239	$ -	$ -	$ 10,239
	$ 827,081	$ -	$ 925,274	$ 1,752,355

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March 31, 2022 Financial assets: Repetitive fair value Financial assets at FVTPL -Open-end funds Financial assets at FVTOCI - Equity securities Financial liabilities: Repetitive fair value Financial assets at FVTPL -Foreign exchange forward contracts		Level 1	Level 2 $ - $ - $ 1,284	Level 3	Total
		$ 9,513		$ -	$ 9,513
		$ 1,389,461		$ 804,969	$ 2,194,430
		$ -		$ -	$ 1,284

• (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:

Listed and OTC stocks Open-end funds Market quotation 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. 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.

• D. 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.

• E. The Group has incorporated credit risk assessment adjustments into its calculation for the fair values of financial and non-financial instruments to reflect counterparty credit risks and the Group's credit quality, respectively.

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1. There was no transfer between Levels 1 and 2 during the three months ended March 31, 2023 and 2022.

2. The following table shows the changes in level 3 during the three months ended March 31, 2023 and 2022:

2023 and 2022:
				Equitysecurities
			2023		2022
January 1		$	925,274 $			785,661
Profit(loss) recognized in other comprehensive
income				1,480 (		4,989 )
Net exchange difference	(			7,239 )		24,297
March 31		$	919,515 $			804,969

1. There was no transfer into or out of Level 3 during the three months ended March 31, 2023 and 2022.

2. For the fair value of level 3 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.

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

Non-derivative equity instruments: Non-listed and non- OTC stocks Non-listed and non- OTC stocks	Fair value on March 31,2023	Evaluation techniques	Significant unobservable input value	Range (weighted average)	Relationship between input value and fair value
	$ 856,319 63,196	Net asset value method Comparable public company approach	Lack of market liquidity discount Price–to-book ratio Lack of market liquidity discount	24% 1.18 20%	The higher the market liquidity discount, the lower the fair value. The higher the multiplier, the higher the fair value. The higher the market liquidity discount, the lower the fair value.

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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 December 31, 2022	Evaluation techniques Net asset value method Comparable public company approach Evaluation techniques Net asset value method Comparable public company approach	Significant unobservable input value	Range (weighted average)	Relationship between input value and fair value
	$ 856,726 68,548 Fair value on March 31,2022		Lack of market liquidity discount Price–to-book ratio Lack of market liquidity discount Significant unobservable input value	24% 1.29 20% Range (weighted average)	The higher the market liquidity discount, the lower the fair value. The higher the multiplier, the higher the fair value. The higher the market liquidity discount, the lower the fair value. Relationship between input value and fair value
	$ 730,262 74,707		Lack of market liquidity discount Price–to-book ratio Lack of market liquidity discount	26% 1.42 20%	The higher the market liquidity discount, the lower the fair value. The higher the multiplier, the higher the fair value. The higher the market liquidity discount, the lower the fair value.

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

Financial assets	Period March 31, 2023 March 31, 2023 Period December 31, 2022 December 31, 2022	Input value Lack of market liquidity discount Price–to-book ratio Input value Lack of market liquidity discount Price–to-book ratio	Change	Recognized in other comprehensive income Favorable change Unfavorable change $ 3,693 ( $ 3,693 ) $ 536 ( $ 536 ) Recognized in other comprehensive income Favorable change Unfavorable change $ 3,730 ( $ 3,730 ) $ 531 ( $ 531 )
Equity instruments Equity instruments Financial assets			±1% ±1% Change
Equity instruments Equity instruments			±1% ±1%

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Financial assets	Period	Input value Lack of market liquidity discount Price–to-book ratio	Change	Recognized in other comprehensive income Favorable change Unfavorable change $ 3,891 ( $ 3,891 ) $ 526 ( $ 526 )
Equity instruments Equity instruments	March 31, 2022 March 31, 2022		±1% ±1%

XIII. Notes disclosure

(I) Information about significant transactions

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

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

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

4. The cumulative amount of buying or selling the same securities reaches NT$300 million or more, or 20% of the paid-in capital: No such situation.

5. The cumulative amount of property acquired reaches NT$300 million or more, or 20% of the paid-in capital: No such situation.

6. The cumulative amount of property disposal reaches NT$300 million or more, or 20% of the paid-in capital: No such situation.

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

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

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

10. Significant Inter-company Transactions during the Reporting Period: Please refer to Table 6.

(II) Information about investees

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

(III) Information on investments in mainland China

1. Basic information: Please refer to Table 8.

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

(IV) Information on major shareholders

Information of major shareholders: Please refer to Table 9.

XIV. Operating segments 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

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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 operating departments information 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.

(II) Segments Information

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

is as follows:
January1 to March 31,2023	Electronic Components	Consumer Electronics and Computer Peripherals	Total
Segment Revenue Segment profit and loss January1 to March 31,2022	$ 3,283,008	$ 2,797,650	$ 6,080,658
	$ 300,591	$ 163,312	$ 463,903
	Electronic Components	Consumer Electronics and Computer Peripherals	Total
Segment Revenue Segment profit and loss	$ 2,925,999	$ 3,036,147	$ 5,962,146
	$ 187,643	$ 182,615	$ 370,258

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:

Profit and loss Profit and loss of the segments to be reported Other profit and loss Pre-tax profit and loss of continuing operating departments	January1 to March 31,2023 $ 463,903 24,028 $ 439,875	January1 to March 31,2022 $ 370,258 193 $ 370,451

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Pan-International Industrial Corp. and Subsidiaries Loans to others

January 1, 2023 to March 31, 2023

Table 1

Unit: NTD thousand (unless otherwise noted)

Serial No. (note 1) Loan extending company Borrower Dealing items (note 2) Whether a related party Maximum amount of the period (note 3) Ending balance (note 8) 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	Collateral Loans limits for individual entities (note 7) Total loan limit (note 7) Remarks Name Value
1 Honghuasheng Precision Electronics (Yantai) Co., Ltd. CJ Electric Systems Co., Ltd. Other receivables - related parties Yes 266,700 265,860 265,860 3.70% Short-term financing - Operating turnover -	None. None. 7,965,998 15,931,996

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: The total amount of funds lending from the Company to a foreign subsidiary that the Company, directly and indirectly, holds 100% of its voting shares shall not exceed 400% of the lender's net worth, and the limit for an individual entity shall not exceed 200% of the lender's net worth.

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

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Pan-International Industrial Corp. and Subsidiaries Endorsement/guarantee provided January 1, 2023 to March 31, 2023

Table 2

Unit: NTD thousand (unless otherwise noted)

Table 2	Pan-International Industrial Corp. and Subsidiaries Endorsement/guarantee provided January 1, 2023 to March 31, 2023 Unit: NTD thousand (unless otherwise noted)
Serial No. (note 1) Name of company of the endorsement/guarantee	Guaranteed Party Endorsement/gua rantee limit for a single enterprise (note 3) Maximum endorsement/guar antee balance of the period (note 4) Endorsement/guar antee balance of the period (note 5) Transaction Amounts (note 6) Amount of endorsement/gua rantee backed by assets Ratio of the cumulative endorsement/gua rantee amount to the net value in the latest financial report Endorsement/gua rantee limit (note 3) Endorsement/gu arantee from the parent company to subsidiary (note 7) Endorsement/gu arantee from subsidiary to parent company (note 7) Endorsement/gu arantee to entities in the Mainland China (note 7) Remarks Companyname Relation (note 2)
1 P.I.E Industrial Berhad 1 P.I.E Industrial Berhad	Pan- International Electronics(M) Sdn.Bhd. 2 $1,914,743 $1,181,100 $1,181,100 $465,021 $- 8.78 $3,829,485 Y N N PAN- INTERNATIO NAL WIRE&CABLE (M) SDN.BHD. 2 $1,914,743 90,966 90,525 4,209 - 0.68 3,829,485 Y N N

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

• (1) Fill in 0 for the issuer.

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

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

• (1). A company with business relations.

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

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

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

• (5). A company with mutual guarantees in accordance with the contract 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 paragraph 8, Article 12 of the Regulations Governing Loaning of Funds and Making of Endorsements/ Guarantees by Public Companies, it refers to the amount decided by the chairman of the board.

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

Note 7: Y is required only for an endorsement/guarantee of a listed parent company to a subsidiary, an endorsement/guarantee of a subsidiary to a listed parent company, and an endorsement/guarantee to mainland China.

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Pan-International Industrial Corp. and Subsidiaries

Marketable securities held at period end (excluding investment in subsidiaries, associates and jointly controlled entities). March 31, 2023

Table 3

Unit: NTD thousand (unless otherwise noted)

Marketable securities held at period end (excluding investment March 31, Table 3	in subsidiaries, associates and jointly controlled entities). 2023 Unit: NTD thousand (unless otherwise noted)
HoldingCompanyName Type of marketable securities Name of marketable securities Relationship with the HoldingCompany Financial report Account	End of theperiod Remarks Number of shares/beneficiary certificates Book value Shares Ratio Fair value
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 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 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 Yann-Yang 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 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	74,848,918 $1,085,309 0.78 $1,085,309 12,831,500 63,196 5.23 63,196 23,368 86 - 86 540,755 2,062 - 2,062 255,391 8,191 0.61 8,191 3,400,000 - 2.73 - 50,400,000 38,596 17.50 38,596 28,498,993 817,723 16.87 817,723

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Table 4

Pan-International Industrial Corp. and Subsidiaries

Total purchases from or sales to related parties amounting to at least NT$100 million or 20% of the paid-in capital or more. March 31, 2023

Unit: NTD thousand (unless otherwise noted)

Table 4	March 31, 2023 Unit: NTD thousand (unless otherwise noted)
Buyer/Seller Related Party Relation	Transaction details Transaction terms different from general ones and reasons Note/Accounts Receivable(Payable) Remarks Purchase/Sale Amount Percentage of total purchase(sale) Creditperiod Unit Price Creditperiod 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 (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. Hon Hai Precision Industry Co., Ltd. A company that evaluates the Company by the equity method Pan-International Industrial Corp. Foxconn Technology Co., Ltd. Other related parties Pan-International Industrial Corp. Honghuasheng Precision Electronics (Yantai) Co., Ltd. Subsidiary of the Company’s indirect reinvestment Pan-International Industrial Corp. 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. PAN- INTERNATIONAL ELECTRONICS(M) SDN.BHD. SHARP NORTH MALAYSIA SDN.BHD. Other related parties 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. 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.	Sales $256,504 11 Monthly settlement 90 days T/T No sale to other customers with no basis for comparison No significant difference $160,114 7 Sales 556,628 24 Monthly settlement 90 days T/T No sale to other customers with no basis for comparison No significant difference 535,796 23 Sales 117,827 5 Monthly settlement 90 days T/T No sale to other customers with no basis for comparison No significant difference 160,550 7 Sales 122,307 5 Monthly settlement 90 days T/T No sale to other customers with no basis for comparison No significant difference 125,457 5 Sales 104,233 4 Monthly settlement 90 days T/T No sale to other customers with no basis for comparison No significant difference 205,457 9 Purchase 1,231,642 60 Monthly settlement 90 days A single supplier with no basis for comparison No significant difference (624,451) (42) Purchase 168,286 8 Monthly settlement 90 days A single supplier with no basis for comparison No significant difference (133,314) (9) Purchase 118,362 6 Monthly settlement 90 days A single supplier with no basis for comparison No significant difference (185,447) (12) Sales 897,688 39 Monthly settlement of 30 days No sale to other customers with no basis for comparison No significant difference 842,392 39 Sales 283,297 100 Monthly settlement 60 days T/T No sale to other customers with no basis for comparison No significant difference 460,751 100 Purchase 589,004 27 Monthly settlement 90 days A single supplier with no basis for comparison No significant difference (470,918) (41) Purchase 131,353 6 Monthly settlement 90 days A single supplier with no basis for comparison No significant difference (46,565) (4) Purchase 179,009 94 Monthly settlement 120 days A single supplier with no basis for comparison No significant difference (359,418) (89)

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Pan-International Industrial Corp. and Subsidiaries

Total accounts receivable from related parties amounting to at least NT$100 million or 20% of the paid-in capital or more. March 31, 2023

Table 5

March 31, 2023
Table 5 CompanyName Related Party Relation Balance of accounts receivable from related parties (Note 1) Turnover Rate	Unit: NTD thousand (unless otherwise noted) Overdue Accounts receivable from related parties recovered after theperiod Provision for bad debt Amount Actions Taken
Pan-International Industrial Corp. Hongfujin Precision Industry (Wuhan) Co., Ltd. Subsidiary of the indirect reinvestment of Hon Hai Precision Industry Co., Ltd. $160,550 2.52 Pan-International Industrial Corp. Hongfujin Precision Industry (Yantai) Co., Ltd. Subsidiary of the indirect reinvestment of Hon Hai Precision Industry Co., Ltd. 535,796 3.28 Pan-International Industrial Corp. Hongfutai Precision Electronics (Yantai) Co., Ltd. A company that evaluates the Company by the equity method 160,114 2.62 Pan-International Industrial Corp. Hon Hai Precision Industry Co., Ltd. A company that evaluates the Company by the equity method 125,457 4.24 Pan-International Industrial Corp. Foxconn Technology Co., Ltd. Other related parties 205,457 2.40 Honghuasheng Precision Electronics (Yantai) Co., Ltd. Pan-International Industrial Corp. The Company’s parent company 624,451 4.75 Pan-International Precision Electronics Co., Ltd. Pan-International Industrial Corp. The Company’s parent company 133,314 4.51 PAN-INTERNATIONAL ELECTRONICS(M) SDN.BHD. SHARP NORTH MALAYSIA SDN.BHD. Other related parties 842,392 4.46 New Ocean Precision Component (Jiangxi) Co., Ltd. Foxconn Interconnect Technology Limited Subsidiary of the indirect reinvestment of Hon Hai Precision Industry Co., Ltd. 460,751 2.06	$- Payment received after the period $39,840 $64 - Payment received after the period 217,837 214 - Payment received after the period - 64 3,131 Payment received after the period 26,935 50 16,699 Payment received after the period 33 82 - Payment received after the period 258,658 250 - Payment received after the period 51,498 53 267,522 Payment received after the period 234,778 - - Payment received after the period 35,096 184

Note 1: Please refer to the description in Table 1 for the transaction information of the related party's capital loan and its receivables amounting to NT$100 million or over 20% of the paid-in capital.

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Pan-International Industrial Corp. and Subsidiaries Significant Inter-company Transactions during the Reporting Period March 31, 2023

Table 6

Pan-International Industrial Corp. and Subsidiaries Significant Inter-company Transactions during the Reporting Period March 31, 2023
Table 6 Serial No. (Note 1) Transaction Company Counterparty Relationship with the transaction parties (Note 2)	Unit: NTD thousand (unless otherwise noted) Description of Transactions(note 4 and note 7)
	Account Amount Transaction Terms Percentage over consolidated total revenue or total assets(note 3)
0 Pan-International Industrial Corp. Honghuasheng Precision Electronics (Yantai) Co., Ltd. 1 0 Pan-International Industrial Corp. Pan-International Precision Electronics Co., Ltd. 1 1 Pan-International Precision Electronics Co., Ltd. Pan-International Industrial Corp. 2 2 Honghuasheng Precision Electronics (Yantai) Co., Ltd. Pan-International Industrial Corp. 2	Purchase $1,231,642 Note 6 20 Purchase 168,286 Note 6 3 Accounts receivable 133,314 Note 6 1 Accounts receivable 624,451 Note 6 3

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 party; just mark the type (there is no need to repeatedly disclose the same transaction between parent and subsidiary companies or between subsidiary companies. For example, if a parent company discloses a transaction with a subsidiary, 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 it belongs to the account of assets and liabilities, it shall be calculated in the way that the ending balance accounts for the total consolidated assets; if it belongs to the account of income it shall be calculated in the way that the accumulated amount in the period end accounts for the total consolidated revenue.

Note 4: The standard for disclosing the transaction information above between the parent company and a subsidiary is that the amount of purchase, sale and receivables from related parties reaches NT$100 million or 20% of the paid-in capital. Note 5: The transaction price is similar to that of the general customer, with a collection period of 120 days monthly settlement. Note 6: Transaction prices are negotiated and the collection period is monthly settlement 90 days. Note 7: Please refer to the description in Table 1 for the transaction information of the related party's capital loan and its receivables amounting to NT$100 million or over 20% of the paid-in capital.

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Pan-International Industrial Corp. and Subsidiaries

The name and location of the investee company and other relevant information (excluding mainland China investee companies) January 1, 2023 to March 31, 2023

	January 1, 2023 to March 31, 2023
Table 7 Investor Investor Company Location Main Businesses and Products	Unit: NTD thousand (unless otherwise noted) Original Investment Amount Shares held as at end of theperiod Net income (loss) of the Investee for currentperiod Investment gains and losses recognized in the currentperiod Remarks End of theperiod 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. Yann-Yang Investment Co., Ltd Taiwan Investment company Yann-Yang 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. 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 P.I.E. INDUSTRIAL BERHAD PAN-INTERNATIONAL CORPORATION (S) PTE. LIMITED. (PIS) Singapore Manufacturing and sale of connectors for electronic signal cables	$3,472,484 $3,472,484 $12,220 100 $10,866,309 $211,291 $211,291 73,142 73,142 28,000 100 222,490 1,367 1,367 363,997 363,997 33,316,236 100 192,264 (10,519) (10,519) 393,898 393,898 21,960,504 83.58 183,501 (12,574) (10,509) 42,478 42,478 197,459,985 51.42 1,969,121 92,867 47,752 Note 1 292,320 292,320 9,600,000 100 679,702 (11,942) (11,942) Note 2 499,380 499,380 3,120,001 100 1,392,972 27,217 27,217 Note 3 3,264,769 3,264,769 665,799,420 100 3,983,626 159,722 159,722 Note 4 646,000 646,000 20,187,500 16.93 515,500 (79,797) (13,510) 250,000 250,000 7,812,500 5.48 199,494 (79,797) (5,226) 2,291 2,291 100,000 30 1,208 (1,079) - Note 5

Note 1: The company mainly reinvests in Pan-International Electronics (Malaysia) Sdn indirectly through PIB Bhd. and Pan-International Wire & Cable (Malaysia) Sdn. Bhd. from the production of cable-attached connectors or electronic products and sales in Malaysia. Note 2: The company mainly reinvests in New Ocean Precision Component (Jiangxi) Co., Ltd. indirectly through BAE. Please refer to Table 8 for details on the disclosure of information about the investment in the mainland China. Note 3: The company mainly reinvests in Pan-International Precision Electronics Co., Ltd. indirectly through TUI. Please refer to Table 8 for details on the disclosure of information about the investment in the mainland China. Note 4: The company mainly reinvests in Honghuasheng Precision Electronics (Yantai) Co., Ltd. indirectly through EHH. Please refer to Table 8 for details on the disclosure of information about the investment in the mainland China. Note 5: PIS, the Company's sub-subsidiary, conducted a cash capital increase in the first quarter of 2023. The Group did not subscribe for the shares in proportion to the shareholding, resulting in a drop of the shareholding by 30%. 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.

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Ma Table 8 Name of the investee in mainland China Main Businesses and Products Paid-in Capital Method of Investments (Note 2) Cumulative outward remittance of investment amount from Taiwan at the beginningof theperiod

Pan-International Industrial Corp. and Subsidiaries inland China investment information - Basic information January 1, 2023 to March 31, 2023 Unit: NTD thousand (unless otherwise noted) Investment Flows of currentperiod Cumulative outward remittance of the investment amount from Taiwan in the period end Net income (loss) of the Investee for currentperiod % Ownership of Direct or Indirect Investment Investment gains and losses recognized in the current period (Note 3) Book value of the investment at the end of theperiod Investment gains repatriated as of the end of theperiod Remarks Outward Inward

Pan-International Precision Electronics Co., Ltd. Manufacturing and sale of wires, cables, connecting wires, connecting wire connectors, and wire plugs. $499,380 2 $380,625 $- $- $380,625 $27,217 100 27,217 $1,392,972 $- Note 6 Fuyu Property (Shanghai) Co., Ltd. Engaging in the e- commerce business of industrial design, other specialized design services, car rental, retail of other commodities, sale of computer and peripheral equipment and software, retail of communication equipment, retail of audio- visual equipment, retail of spare parts and supplies for locomotives, and e- commerce of retail goods and equipment above. 5,191,027 2 829,763 - - 829,763 19,176 16.87 - 817,723 - Note 8 New Ocean Precision Component (Jiangxi) Co., Ltd. Manufacturing and operation of various types of plugs and sockets and telecommunications. 292,320 2 - - - - (11,942) 100 (11,942) 679,702 - Honghuasheng Precision Electronics (Yantai) Co., Ltd. Production and sale of hard single (double) side printed circuit boards, hard multi-layer printed circuit boards, flexible multi-layer printed circuit boards, and other printed circuit boards 2,612,610 2 2,694,825 - - 2,694,825 159,722 100 159,722 3,982,999 - Note 4

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Companyname	The cumulative amount of outward remittance of investment from Taiwan to mainland China at the end of the period (notes 5 and 6) Investment amount approved bythe Investment Commission,MOEA In compliance with the investment limit stipulated by the Investment Commission, MOEA for investment in mainland China.(note 7).
Pan-International Industrial Corp.	$4,317,536 $6,164,280 $-

• 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: The field of investment gains and losses recognized in the current period is recognized under the financial statements reviewed by CPAs.

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 March 31, 2023:

Other modes. e field of investment gains and losses recognized in the current period is recognized under the financial statements reviewed by CPAs. 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 pproved by the Investment Commission, MOEA was USD 107,217 thousand. e following are the investment withdrawal cases approved by the Investment Commission, MOEA as of March 31, 2023:	Honghuasheng Precision Electronics (Yantai) Co., Ltd.; the investment amount
Date Approval letter No. Investor Company	Original investment amount remitted from Taiwan
September 5, 2003 0920028972 Dongguan Junwang Technology Co., Ltd. December 9, 2010 09900496780 Saibo Digital Technology (Guangzhou) Co., Ltd. May 30, 2011 10000205680 Yunnan Saibo Digital Technology Co., Ltd. May 30, 2011 10000205690 Chongqing Saibotel Digital Square Co., Ltd. May 30, 2011 10000205700 Nanchong Saibo Digital Square Co., Ltd. March 22, 2017 10600038030 UER Battery Technology (Shenzhen) Co., Ltd. May 9, 2017 10630024870 Ganchuang International Trade (Shenzhen) Co., Ltd.	US$91 thousand 476 thousand 190 thousand 454 thousand 58 thousand 1,100 thousand 8,650 thousand
	US$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: The company received the letter from the Investment Commission, MOEA referenced Jing-Shen-II No. 10000518690 in November 2011 for cancellation of the approved investment amount of US$500 thousand in Pan-International Precision Electronics Co., Ltd. which had not yet been invested; on October 30, 2014, the company received the letter from the Investment Commission, MOEA referenced Jing-Shen-Er-Zi No. 10300233110 for transfer of 42 companies including Qingdao Saiboter Digital Technology Square Co., Ltd. to Samoa Le Zhiwan Ranch Holding Investment Limited; in March 2017, the company received the letter from the Investment Commission, MOEA referenced Jing-Shen-Er-Zi No. 10600038030 for cancellation of the approved investment amount of US$5,200 thousand in UER Battery Technology (Shenzhen) Co., Ltd. which had not yet been invested.

Note 7: The Company received a letter from the Industrial Development Bureau, MOEA referenced Jing-Shou-Gong-Zi No.11120436260 in December 2022 certifying the compliance with the operation scope of operation headquarters, and no investment limit is required from November 29, 2022 to November 28, 2025.

• 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 March 31, 2023, 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
			March 31, 2023
Table	9
					Share
		Name of major shareholders		Number of shares held		Shares Ratio

Hon Hai Precision Industry Co., Ltd. 107,776,254 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 holding more than 5% of the company’s common and special shares that have completed scriptless registration (including treasury shares). The share capital reported in the financial report and the actual number of shares that have completed the scriptless registration may be different due to differences in the basis of compilation and calculation.

Note 2: If the shareholder puts the shares into a trust, the aforementioned information will be disclosed by the trustors’ individual account opened by the trustee. As for shareholders’ insider declaration of the ownership percentage over 10% according to the Securities and Exchange Act, including the shares on hand and those being put in a trust but with the decision power over the usage of the trust assets, please refer to the insider declaration information on MOPS. Note 3: The preparation principle of this table is to calculate the distribution of the balance of each credit transaction based on the shareholders’ register on the book-close day of the extraordinary shareholders' meeting (short-sale securities are not purchased back). Note 4: Shareholding ratio (%) = total number of shares held by the shareholder/total number of shares that have completed scriptless registration. Note 5: The total number of shares (including treasury shares) that have completed scriptless registration is 518,346,282 shares = 518,346,282 (common shares) + 0 (special shares).

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