PI - Interim / Quarterly Report 2023

PAN-INTERNATIONAL INDUSTRIAL CORP. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND REVIEW REPORT OF INDEPENDENT ACCOUNTANTS THIRD QUARTER IN 2023 AND 2022

(Stock code 2328)

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

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

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Pan-International Industrial Corp. and Subsidiaries

CONSOLIDATED FINANCIAL STATEMENTS AND REVIEW REPORT OF INDEPENDENT ACCOUNTANTS 3[rd] QUARTER IN 2023 AND 2022 Table of Contents

Item One. Cover Two. Table of Contents Three. Independent Auditors’ Review Report Four. Consolidated Balance Sheets Five. Consolidated Statements of Comprehensive Income Six. Consolidated Statements of Changes Equity Seven. Consolidated Statements of Cash Flows Eight. Notes to consolidated financial reports I. Organization and operations II. The Authorization of Financial Reports III. Application of Newly Released and Revised Standards and Interpretations IV. Summary of Significant Accounting Policies V. Major Sources of Uncertainty in Significant Accounting Judgments, Estimates, and Assumptions VI. Notes to Important Account Items	Page
	1 2 ~ 3 4 ~ 6 7 ~ 8 9 ~ 10 11 12 13 ~ 70 13 13 13 ~ 14 14 ~ 30 30 ~ 31 31 ~ 51

Item
One.
Cover
Two. Table of Contents
Three. Independent Auditors’ Review Report
Four. Consolidated Balance Sheets
Five.
Consolidated Statements of Comprehensive Income
Six.
Consolidated Statements of Changes Equity
Seven. Consolidated Statements of Cash Flows
Eight. Notes to consolidated financial reports
I.
Organization and operations
II.
The Authorization of Financial Reports
III.
Application of Newly Released and Revised Standards and
Interpretations
IV.
Summary of Significant Accounting Policies
V.
Major Sources of Uncertainty in Significant Accounting Judgments,
Estimates, and Assumptions
VI.
Notes to Important Account Items

Page

1
2 ~ 3
4 ~ 6
7 ~ 8
9 ~ 10
11
12
13 ~ 70
13
13
13 ~ 14
14 ~ 30
30 ~ 31
31 ~ 51

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Item VII. Related Party Transactions VIII. Pledged Assets IX. Significant Contingent Liabilities and Unrecognized Commitments X. Major Disaster Losses XI. Significant Subsequent Events XII. Others XIII. Additional Disclosures XIV. Operating Departments Information	Page
	52 ~ 55 56 56 57 57 57 ~ 68 68 ~ 69 69 ~ 70

~3~

Independent Auditors’ Review Report (2023) Cai-Shen-Bao-Zi No. 23002184

To Pan-International Industrial Corp.

Foreword

The consolidated balance sheet of Pan-International Industrial Corp. and its subsidiaries as of September 30, 2023 and 2022, the consolidated comprehensive income statement for the three months ended September 30, 2023 and 2022 and for the nine months ended September 30, 2023 and 2022, the consolidated statement of changes in equity and consolidated cash flow statement for the nine months ended September 30, 2023 and 2022, as well as the notes to the consolidated financial statements (including the summary of significant accounting policies), have been duly reviewed by us. It is the responsibility of the management to prepare properly expressed consolidated financial reports in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and IAS 34 “Interim Financial Reporting” 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.

~4~

Basis for Qualified Conclusion

As stated in notes 4(3) and 6(7) to the consolidated financial reports, the financial reports of the same period of some non-significant subsidiaries are included in the consolidated financial reports mentioned above and investments by equity method have not been verified by us. The total assets as of September 30, 2023 and 2022 were NT$718,233 thousand and NT$689,390 thousand, respectively, which accounted for 3% and 3% of the total consolidated assets (including investment by equity method), respectively. The total liabilities were NT$301,487 thousand and NT$362,750 thousand, accounting for 3% and 3% of the total consolidated liabilities, respectively. The comprehensive income for the three months and nine months ended September 30, 2023 and 2022 were NT$5,440 thousand, NT$3,393 thousand, NT$21,115 thousand, and NT$16,601 thousand in income, which accounted for 1%, 1%, 2% and 2% of the consolidated comprehensive income, respectively.

Conclusion

According to our review results and the review report by other independent auditors (please refer to Other item), except that the financial reports of the non-significant subsidiaries and investments under the equity method mentioned in the paragraph about 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 terms of materiality in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and IAS 34 Interim Financial Reporting recognized and released by the Financial Supervisory Commission which may prevent appropriate representation of the financial status of Pan-International Industrial Corp. and its subsidiaries as of September 30, 2023 and 2022, the consolidated financial performance for the three months ended September 30, 2023 and 2022, and for the nine months ended September 30, 2023 and 2022, and consolidated cash flow for the nine months ended September 30, 2023 and 2022.

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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 September 30, 2023 and 2022 were NT$6,325,154 thousand and NT$5,918,789 thousand, respectively, accounting for 26% and 24% of the total consolidated assets. Their operating revenue for the three months ended September 30, 2023 and 2022, and for the nine months ended September 30, 2023 and 2022 were NT$2,061,823 thousand, NT$1,769,881 thousand, NT$6,306,964 thousand, and NT$5,560,279 thousand respectively, accounting for 30%, 27%, 33%, and 30% of the consolidated operating revenue.

PwC Taiwan

Yung-Chien Hsu

Independent Auditors

Jen-Chieh Wu

Former Financial Supervisory Commission, Executive Yuan Approval No.: (1995)Tai-Cai-Cheng-VI No. 13377 Financial Supervisory Commission Approval No.: Jin-Guan-Cheng-Shen-Zi No. 1120348565

November 13, 2023

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Pan-International Industrial Corp. and Subsidiaries Consolidated Balance Sheets September 30, 2023, December 31, 2022, and September 30, 2022

Assets	Note	September 30, 2023 Amount % $ 6,408,889 26 10,774 - 653,027 3 17,199 - 3,834,912 16 3,512,393 14 112,205 - 3,823,393 15 185,562 1 18,558,354 75 1,893,535 8 4,856 - 700,265 3 2,721,905 11 312,499 1 98,350 1 69,132 - 65,315 - 177,413 1 6,043,270 25 $ 24,601,624 100	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	Unit: NTD thousand September 30, 2022 Amount % $ 7,035,532 28 10,125 - - - 5,422 - 3,691,777 15 3,292,817 13 643,803 3 4,089,498 17 182,696 1 18,951,670 77 1,755,517 7 - - 749,972 3 2,523,173 10 393,496 2 132,123 1 37,261 - 66,359 - 104,781 - 5,762,682 23 $ 24,714,352 100
		Amount $ 6,408,889 10,774 653,027 17,199 3,834,912 3,512,393 112,205 3,823,393 185,562 18,558,354 1,893,535 4,856 700,265 2,721,905 312,499 98,350 69,132 65,315 177,413 6,043,270 $ 24,601,624
Current Assets 1100 Cash and cash equivalents 1110 Financial assets at FVTPL - Current 1136 Financial assets measured at after-amortization cost - Current 1150 Net notes receivable 1170 Net accounts receivable 1180 Accounts receivable - Related parties net 1200 Other receivables 130X Inventory 1470 Other current assets 11XX Total Current Assets Non-Current Assets 1517 Financial assets measured at fair value through other comprehensive income - Non- current 1535 Financial assets measured at after-amortization cost - Non- current 1550 Investment by equity method 1600 Property, plant, and equipment 1755 Right-of-use assets 1760 Net investment property 1780 Intangible asset 1840 Deferred tax assets 1900 Other non-current assets 15XX Total Non-Current Assets 1XXX Total Assets	6 (1) 6 (2) 6 (3) and 8 6 (4) 6 (4) 7 6 (5) 8 6 (6) 6 (3) and 8 6 (7) and 8 6 (8) and 8 6 (9) and 8 6 (10) and 8 6 (11) 8

(To be Continued)

~7~

Pan-International Industrial Corp. and Subsidiaries Consolidated Balance Sheets September 30, 2023, December 31, 2022, and September 30, 2022

														Unit: NTD thousand	Unit: NTD thousand	Unit: NTD thousand
						September 30, 2023				December 31, 2022				September 30, 2022
	LIABILITIES AND EQUITY		Note			Amount	%			Amount	%			Amount	%
	Current liability
2100	Short-term borrowings	6	(12)		$	496,466		2	$	2,101,238		8	$	2,480,371	10
2130	Contractual liabilities - Current	6	(20) and 7			251,904		1		273,608		1		377,683		2
2150	Notes payable					786,718		3		356,341		2		111,839		-
2170	Accounts payable					3,732,205	15			3,839,452	15			3,966,773	16
2180	Accounts payable - Related	7
	parties					1,640,830		7		1,511,347		6		1,233,540		5
2200	Other payables	6	(13)			1,702,742		7		1,642,799		7		1,356,540		6
2230	Current tax liabilities					219,279		1		335,586		1		270,103		1
2280	Lease liabilities - Current	7				53,136		-		89,159		-		94,829		-
2399	Other current liabilities - Other					20,820		-		23,204		-		20,934		-
21XX	Total current liabilities					8,904,100	36			10,172,734	40			9,912,612	40
	Non-current liabilities
2570	Deferred tax liabilities					386,056		2		346,399		1		323,521		1
2580	Lease liabilities - Non-current	7				71,725		-		99,595		1		128,589		1
2600	Other non-current liabilities					25,299		-		16,408		-		23,158		-
25XX	Total non-current
	liabilities					483,080		2		462,402		2		475,268		2
2XXX	Total liabilities					9,387,180	38			10,635,136	42			10,387,880	42
	Equity attributable to owners of
	the parent company
	Share capital	6	(15)
3110	Common share capital					5,183,462	21			5,183,462	21			5,183,462	21
	Capital surplus	6	(16)
3200	Capital surplus					1,503,606		6		1,503,606		6		1,503,606		6
	Retained earnings	6	(17)
3310	Legal reserve					1,401,022		6		1,269,138		5		1,269,138		5
3320	Special reserve					1,385,207		6		1,072,435		4		1,072,435		4
3350	Undistributed earnings					5,034,505	20			5,255,632	21			4,903,477	20
	Other equities	6	(18)
3400	Other equities			(		1,195,124) (		5) (		1,385,208 ) (		6) (		1,346,316)(		5)
31XX	Total equity attributable to
	owners of the parent
	company					13,312,678	54			12,899,065	51			12,585,802	51
36XX	Non-controlling interests	6	(19)			1,901,766		8		1,870,302		7		1,740,670		7
3XXX	Total equity					15,214,444	62			14,769,367	58			14,326,472	58
	Significant Contingent Liabilities	9
	and Unrecognized Commitments
3X2X	Total liabilities and equity				$	24,601,624	100		$	25,404,503	100		$	24,714,352	100

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

Managerial Officers: Tsai, Ming-Feng

Chairman: Lee, Kuang-Yao

Accounting supervisor: Tai, Chih-Hao

~8~

Pan-International Industrial Corp. and Subsidiaries Consolidated Statements of Comprehensive Income For the nine months ended September 30, 2023 and 2022

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

				July 1 to September 30,	July 1 to September 30,	July 1 to September 30,	July 1 to September 30,	July 1 to September	July 1 to September	30,	30,	January 1 to September	January 1 to September	30,	30,	January 1 to September	January 1 to September	30,
					2023				2022				2023				2022
	Item	Note			Amount	%			Amount	%			Amount	%			Amount	%
4000	Operating revenue	6 (20) and 7		$	6,885,374	100		$	6,483,846	100		$	19,183,151	100		$	18,657,591	100
5000	Operating cost	6 (5) (23) and 7 (			6,072,946)(	88)(			5,623,535)(	87)(			16,906,161)(	88)(			16,512,282 ) (	89)
5900	Operating profit margin				812,428	12			860,311	13			2,276,990	12			2,145,309	11
	Operating expenses	6 (23)
6100	Selling and marketing expenses		(		75,761 ) (		1) (		79,915 ) (		1) (		214,455 ) (		1 ) (		224,884 ) (	1 )
6200	General and administrative expenses		(		190,586 ) (		3) (		181,588 ) (		3) (		584,299 ) (		3 ) (		505,324 ) (	3 )
6300	Research and development expenses		(		113,880 ) (		1) (		110,684 ) (		2) (		327,551 ) (		2 ) (		289,054 ) (	1 )
6450	Expected credit impairment benefit (loss)	12 (2)	(		1,836)		- (		4,847)		-		234		- (		1,933 )	-
6000	Total operating expenses		(		382,063)(		5)(		377,034)(		6)(		1,126,071)(		6)(		1,021,195 ) (	5)
6900	Operating profit				430,365		7		483,277		7		1,150,919		6		1,124,114	6
	Non-operating income and expense
7100	Interest income				39,039		-		29,832		-		119,424		1		65,786	-
7010	Other income	6 (21)			13,349		-		116,820		2		54,319		-		156,046	1
7020	Other gains and losses	6 (22)			39,249		1		66,645		1		182,354		1		142,266	1
7050	Financial costs	6 (24)	(		8,038 )		- (		11,713 )		- (		52,848 )		- (		22,781 )	-
7060	Share of profits and losses of affiliated companies and	6 (7)
	joint ventures recognized by the equity method		(		1,928)		-		133		- (		34,668)		-		7,638	-
7000	Total non-operating income and expenses				81,671		1		201,717		3		268,581		2		348,955	2
7900	Net income before tax				512,036		8		684,994	10			1,419,500		8		1,473,069	8
7950	Income tax expense	6 (25)	(		116,650)(		2)(		130,483)(		2)(		324,803)(		2)(		341,726 ) (	2)
8200	Net income for the period			$	395,386		6	$	554,511		8	$	1,094,697		6	$	1,131,343	6

(To be Continued)

~9~

Pan-International Industrial Corp. and Subsidiaries Consolidated Statements of Comprehensive Income For the nine months ended September 30, 2023 and 2022

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

Item	Note	July 1 to September 30, 2023 Amount % ($ 198,393)( 3) ( 198,393)( 3) 370,992 5 370,992 5 $ 172,599 2 $ 567,985 8 $ 329,646 5 65,740 1 $ 395,386 6 $ 450,398 6 117,587 2 $ 567,985 8 $ 0.64 $ 0.63	July 1 to September 30, 2022 Amount % ($ 162,457) ( 2) ( 162,457) ( 2) 267,258 4 267,258 4 $ 104,801 2 $ 659,312 10 $ 492,331 7 62,180 1 $ 554,511 8 $ 572,606 9 86,706 1 $ 659,312 10 $ 0.95 $ 0.95	January 1 to September 30, 2023 Amount % $ 110,492 1 110,492 1 45,827 - 45,827 - $ 156,319 1 $ 1,251,016 7 $ 949,214 5 145,483 1 $ 1,094,697 6 $ 1,139,298 6 111,718 1 $ 1,251,016 7 $ 1.83 $ 1.82	January 1 to September 30, 2022 Amount % ($ 828,884)( 4) ( 828,884)( 4) 606,823 3 606,823 3 ($ 222,061)( 1) $ 909,282 5 $ 976,683 5 154,660 1 $ 1,131,343 6 $ 702,801 4 206,481 1 $ 909,282 5 $ 1.88 $ 1.88
		Amount ($ 198,393) ( 198,393) 370,992 370,992 $ 172,599 $ 567,985 $ 329,646 65,740 $ 395,386 $ 450,398 117,587 $ 567,985 $	Amount ($ 162,457) ( 162,457) 267,258 267,258 $ 104,801 $ 659,312 $ 492,331 62,180 $ 554,511 $ 572,606 86,706 $ 659,312 $	Amount $ 110,492 110,492 45,827 45,827 $ 156,319 $ 1,251,016 $ 949,214 145,483 $ 1,094,697 $ 1,139,298 111,718 $ 1,251,016 $
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	6 (18) 6 (18) 6 (26)
		$	$	$	$

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

Chairman: Lee, Kuang-Yao

Managerial Officers: Tsai, Ming-Feng Accounting supervisor: Tai, Chih-Hao

~10~

Pan-International Industrial Corp. and Subsidiaries Consolidated Statement of Changes in Shareholders Equity

For the nine months ended September 30, 2023 and 2022

Unit: NTD thousand

Note					Equityattributable to ow	Equityattributable to ow	Equityattributable to ow	ners of theparent c	ompany			Non- controlling interests
	Common share capital			Capital surplus	Capital reserve - difference between the price and face value from the acquisition or disposal of equity with subsidiaries.			Retained earnings	Undistributed earnings	Other equities
		Capital reserve - Issuance premium		Capital reserve - Treasury share transaction			Legal reserve	Special reserve		Currency translation difference	Unrealized Gain (Loss) on Financial Assets at Fair Value through Other Comprehensive Income
6 (18) 6 (17) 6 (19) 6 (27) 6 (18) 6 (17) 6 (19)	$5,183,462 - - - - - - - - - $5,183,462 $5,183,462 - - - - - - - $ 5,183,462		$1,402,318 - - - - - - - - - $1,402,318 $1,402,318 - - - - - - - $ 1,402,318	$ 98,543 - - - - - - - - - $ 98,543 $ 98,543 - - - - - - - $ 98,543		$ 2,745 - - - - - - - - - $ 2,745 $ 2,745 - - - - - - - $ 2,745	$1,138,619 - - - 130,519 - - - - - $1,269,138 $1,269,138 - - - 131,884 - - - $ 1,401,022	$1,349,724 - - - - ( 277,289) - - - - $1,072,435 $1,072,435 - - - - 312,772 - - $ 1,385,207	$4,308,365 976,683 - 976,683 ( 130,519 ) 277,289 ( 518,346 ) - 41 ( 10,036 ) $4,903,477 $5,255,632 949,214 - 949,214 ( 131,884 ) ( 312,772 ) ( 725,685 ) - $ 5,034,505	($1,360,659 ) - 555,002 555,002 - - - - - - ($ 805,657 ) ($ 965,367 ) - 79,592 79,592 - - - - ($ 885,775 )	$ 288,225 - ( 828,884 ) ( 828,884 ) - - - - - - ($ 540,659 ) ($ 419,841 ) - 110,492 110,492 - - - - ($ 309,349 )	$1,682,573 154,660 51,821 206,481 - - - ( 86,844 ) - ( 61,540 ) $1,740,670 $1,870,302 145,483 ( 33,765 ) 111,718 - - - ( 80,254 ) $ 1,901,766	$14,093,915 1,131,343 ( 222,061) 909,282 - - ( 518,346) ( 86,844) 41 ( 71,576) $14,326,472 $14,769,367 1,094,697 156,319 1,251,016 - - ( 725,685) ( 80,254) $ 15,214,444

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

Chairman: Lee, Kuang-Yao

Managerial Officers: Tsai, Ming-Feng

Accounting supervisor: Tai, Chih-Hao

~11~

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

For the nine months ended September 30, 2023 and 2022

Unit: NTD thousand

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

Expected credit impairment (benefit) loss

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 loss 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
Acquisition of financial assets measured at after-amortization
cost
Refund of capital investment in financial assets measured at fair
value through other comprehensive income
Share capital returned from liquidation of the investee company
Purchase property, plant and equipment assets

Proceeds from disposal of property, plant and equipment
Acquisition of intangible assets

Increase in refundable deposits
Increase in other non-current assets
Interest received
Dividend received
Net cash outflow from investment activities
Cash flows from financing activities
Decrease in short-term borrowings

Lease principal repayment

Cash dividend payment

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

Acquisition of stock options in subsidiaries

Net cash inflow (outflow) from financing activities
Impact of changes in the exchange rate on cash and cash
equivalents
Increase (decrease) in cash and cash equivalents in the current
period
Cash and cash equivalents at the beginning of the period
Cash and cash equivalents at the end of the period

Note
January1 to September 30,2023 January1 to September 30,2022
$ 1,419,500 $ 1,473,069
6 (23)
478,298
443,403
12 (2)
(
234 )
1,933
6 (22)
(
10,498 ) (
33,898 )
6 (24)
52,848
22,781
(
119,424 ) (
65,786 )
6 (21)
(
14 ) (
87,262 )
6 (7)
34,668 (
7,638 )
6 (22)
3,346
8,998
6 (22)
5,739
-
(
12,539 )
188,482
9,834
32,766
17,852
19,691
(
289,318 ) (
706,791 )
656,700
68,434
625,557
151,917
49,469
873,800
(
56,244 )
90,837
(
21,704 ) (
561,383 )
427,872
44,847
(
104,521 ) (
1,012,429 )
131,639 (
106,112 )
205,730
71,254
(
2,305 ) (
7,041 )
8,834
3,931
3,511,085
907,803
(
375,542 ) (
283,904 )
3,135,543
623,899
(
376,572 )
-
37,424
-

-
41
6 (28)
(
629,108 ) (
650,952 )
9,438
5,671
6 (11)
(
18,696 )
-
(
10,256 ) (
6,092 )
(
66,358 ) (
32,223 )
119,424
65,786
14
87,262
(
934,690) (
530,507)
6 (29)
(
1,592,233 )
1,263,683
6 (29)
(
60,271 ) (
43,693 )
6 (17)
(
725,685 ) (
518,346 )
(
52,848 ) (
22,781 )
6 (19)
(
80,254 ) (
86,844 )
6 (27)
- (
71,576)
(
2,511,291 )
520,443
5,756
179,912
(
304,682 )
793,747
6,713,571
6,241,785
$ 6,408,889 $ 7,035,532

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

Managerial Officers: Tsai, Ming-Feng

Chairman: Lee, Kuang-Yao

Accounting supervisor: Tai, Chih-Hao

~12~

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

Unit: NTD thousand (unless otherwise noted)

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Organization and operations

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

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The Authorization of Financial Reports

This consolidated financial report was announced after being submitted to the Board of Directors on November 13, 2023.

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Application of Newly Released and Revised 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 AccountingStandards 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" Amendments to IAS 12 "International Tax Reform - Pillar Two Model Rules"	January 1, 2023 January 1, 2023 January 1, 2023 May 23, 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

The following table sets forth the standards and interpretations for the new issues, amendments, and revisions of International Financial Reporting Standards (IFRS) recognized by the FSC for application in 2024:

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Effective date of the release of the International New issued/amended/revised standards and interpretations Accounting Standards Board Amendment to IFRS 16 "Lease Liabilities for Sale and January 1, 2024 Leaseback" Amendment to IAS 1 "Classification of current or non-current January 1, 2024 liabilities" Amendment to IAS 1 "Non-current liabilities with contract January 1, 2024 terms and conditions" Amendments to IAS 7 and IFRS 7 "Supplier Finance January 1, 2024 Arrangements"

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

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

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

Effective date of the release of the International New issued/amended/revised standards and interpretations Accounting Standards Board Amendments to IFRS 10 and IAS 28 "Asset sales or To be decided by IASB investments between investors and their associated enterprises or joint ventures" 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 January 1, 2023 IFRS 9 - Information Comparison”

Amendments to IAS No. 21 "Lack of Exchangeability" January 1, 2025

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

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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

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

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(1) Financial assets and liabilities (including derivatives) are measured at fair value through income.
(2) Financial assets measured at fair value through other comprehensive income.
(3) Defined benefit liabilities are recognized according to the net amount of retirement fund assets minus the present value of defined benefit obligations.
The preparation of financial reports in accordance with the International Financial Reporting Standards, International Accounting Standards, Interpretation and Interpretation Announcements (hereinafter referred to as IFRSs) recognized by the 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 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

Principles for preparation of consolidated financial reports
(1) All subsidiaries of the Group are included in the individual entities of the consolidated financial reports. Subsidiaries refer to individual entities (including structured individual entities) controlled by the group. When the group is exposed to or entitled to variable remuneration from participation in an individual entity, and can influence such remuneration through the power over the individual entity, the group controls such an individual entity. Subsidiaries are included in the consolidated financial reports from the date when the Group obtains their control, and the merger is terminated from the date of loss of control.
(2) Intra-group transactions, balances, and unrealized gains and losses have been eliminated. Necessary adjustments have been made to the accounting policies of the subsidiaries which are consistent with the policies adopted by the Group.
(3) The components of profit and loss and other comprehensive income are attributable to the owners and non-controlling interests of the parent company; the total amount of comprehensive income is also attributable to the owners and non-controlling interests of the parent company, even if it results in a loss of the balance of non-controlling interests.
(4) If the changes in the proportion of shareholding over the subsidiary do not result in the loss of control (transactions with non-controlling interests), it is processed as equity transaction and seen as transactions among owners. The difference between the adjustment amount of a non-controlling interest and the fair value of the consideration paid or received is directly recognized under equity.
(5) When the Group loses control over a subsidiary, the remaining investment in this subsidiary is re-measured at fair value and is regarded as the fair value of the originally recognized financial assets or the cost on initial recognition of the associate or joint venture. Any difference between the fair value and the book value is recognized as the current profit and loss. All amounts previously recognized in other comprehensive income related to the subsidiary are reclassified as profit and loss.

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2. Subsidiaries listed in the consolidated financial reports:

% of Ownership

Investor	Name of subsidiary	Main Business	September 30, 2023	December 31, 2022	September 30, 2022	Explanation
Pan-International Industrial Corp. Pan-International Industrial Corp. Pan-International Industrial Corp. Yann-Yang Investments Corp. PAN GLOBAL HOLDING CO., LTD. PAN GLOBAL HOLDING CO., LTD. PAN GLOBAL HOLDING CO., LTD. PAN GLOBAL HOLDING CO., LTD. PAN GLOBAL HOLDING CO., LTD.	PAN- INTERNATIONAL ELECTRONICS INC.(PIU) PAN GLOBAL HOLDING CO., LTD. (PGH) Yann-Yang Investments Corp. Tekcon Electronics Corporation P.I.E. INDUSTRIAL BERHAD GREAT HAVEN HOLDINGS LTD. BEYOND ACHIEVE ENTERPRISES LTD. TEAM UNION INTERNATIONAL LTD. EAST HONEST HOLDINGS LIMITED	Engaged in the import and sales of various electronic products. Engaged in reinvestment in the Asia Pacific and mainland China businesses, and production and manufacturing of electronic signal cables, connectors, and computer peripheral products. Engaged in the domestic investment business. Engaged in manufacturing and distribution of various electronic products. The holding company of the overseas reinvestment business. The holding company of the overseas reinvestment business. The holding company of the overseas reinvestment business. The holding company of the overseas reinvestment business. The holding company of the overseas	100 100 100 83.58 51.42 - 100 100 100	100 100 100 83.58 51.42 - 100 100 100	100 100 100 83.58 51.42 100 100 100 100	(6) (1) (6)

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		reinvestment
		business.
Tekcon Electronics	TEKCON	The holding	100	100	100	(6)
Corporation	BAHAMAS LTD	company of the
		overseas
		reinvestment
		business.
TEKCON	Tekcon Huizhou	OEM	100	100	100	(6)
BAHAMAS LTD	Electronics Co., Ltd.	manufacturing of
		connectors and
		connection cables.
TEKCON	CARBO	The holding	-	100	100	(5)
BAHAMAS LTD	ENTERPRISES	company of the				(6)
	LIMITED	overseas
		reinvestment
		business.
P.I.E.	PAN-	Production and	100	100	100
INDUSTRIAL	INTERNATIONAL	sales of electric
BERHAD	WIRE & CABLE	cables.
	(MALASIA) SDN.
	BHD.
P.I.E.	PAN-	Production and	100	100	100
INDUSTRIAL	INTERNATIONAL	sales of connection
BERHAD	ELECTRONICS	cables and
	(MALASIA) SDN.	electronic
	BHD.	products.
P.I.E.	PAN-	Production and	100	100	100
INDUSTRIAL	INTERNATIONAL	sales of connection
BERHAD	ELECTRONICS	cables.
	(THAILAND) CO.,
	LIMITED.
PAN-	PAN-	Sales of	30	100	100	(2)
INTERNATIONAL	INTERNATIONAL	connection wires
ELECTRONICS	CORPORATION	and connectors.
(MALASIA) SDN.	(S) PTE. LIMITED.
BHD.
PAN-	PIE ENTERPRISE	Sales of	100	100	100
INTERNATIONAL	(M) SDN. BHD.	connection cables
ELECTRONICS		and electronic
(MALASIA) SDN.		products.
BHD.

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PAN-	PIW ENTERPRISE	Sales of electric	100	100	100
INTERNATIONAL	(MALASIA) SDN.	cables.
WIRE & CABLE	BHD.
(MALASIA) SDN.
BHD.
BEYOND	New Ocean	Production and	100	100	100
ACHIEVE	Precision	operation of
ENTERPRISES	Component	various plugs,
LTD.	(Jiangxi) Co., Ltd.	sockets,
		telecommunication
		systems, etc..
TEAM UNION	Pan-International	Production and	100	100	100
INTERNATIONAL	Precision Electronic	sales of electric
LTD.	Co., Ltd.	cables.
EAST HONEST	Honghuasheng	PCB production	100	100	100
HOLDINGS	Precision	and assembly, etc..
LIMITED	Electronics (Yantai)
	Co., Ltd.
Pan-International	Pan-International	Production and	100	100	100	(6)
Precision Electronic	Sunrise Trading	sales of electrical
Co., Ltd.	Corp.	cables, computer
		accessories,
		wireless
		Bluetooth,
		Turnkey, etc..
Pan-International	CJ Electric Systems	Manufacture and	100	100	100
Precision Electronic	Co., Ltd.	sales of
Co., Ltd.		automotive wiring
		harness products.
Pan-International	YiBing Pan-	Auto parts and	100	100	-	(3)
Precision Electronic	International	accessories, smart
Co., Ltd.	Vehicle Wire Co.,	vehicle equipment
	Ltd.	manufacturing,
		etc..
CJ Electric Systems	Chaohu Ruichang	Manufacture and	100	100	100
Co., Ltd.	Electric System Co.,	sales of
	Ltd.	automotive wiring
		harness products.
CJ Electric Systems	Ordos City	Manufacture and	100	100	100
Co., Ltd.	Ruichang Electric	sales of
	System Co., Ltd.	automotive wiring
		harness products.
CJ Electric Systems	Wuhu Herzhong	Manufacture and	100	100	100
Co., Ltd.	Automotive	sales of
	Electronics Co., Ltd.	automotive wiring
		harness products.
CJ Electric Systems	Anqing Ruiyu	Manufacture and	48.78	48.78	-	(4)
Co., Ltd.	Automotive	sales of
	Electrical System	automotive wiring
	Co., Ltd.	harness products.

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Ordos City Anqing Ruiyu Manufacture and 51.22 51.22 - (4) Ruichang Electric Automotive sales of System Co., Ltd. Electrical System automotive wiring Co., Ltd. harness products.

(1) GREAT HAVEN HOLDINGS LTD. was de-registered in November 2022.
(2) Pan-International Corporation (S) Pte Ltd. (PIS) 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.
(3) YiBing Pan-International Vehicle Wire Co., Ltd. was established in 2022Q4 and has been included as an entity in the consolidated financial statement since its establishment.
(4) Anqing Ruiyu Automotive Electrical System Co., Ltd. was established in 2022Q4 and has been included as an entity in the consolidated financial statement since its establishment.
(5) CARBO ENTERPRISES LIMITED was dissolved and liquidated in August 2023.
(6) Financial reports as of September 30, 2023 and 2022 have not yet been reviewed by CPAs.
Subsidiaries not included in the consolidated financial reports: No such situation.
Different adjustment and treatment methods of subsidiary accounting period: No such situation.
Major limitation: No such situation.
Subsidiaries with significant non-controlling interests in the Group.

The total amount of non-controlling interests of the Group as of September 30, 2023, December 31, 2022, and September 30, 2022 were NT$1,901,766, NT$1,870,302, and NT$1,740,670, respectively. The following is the information about the significant noncontrolling interests of the Group and its subsidiaries:

Name of subsidiary	Main business location			Non-controllinginterests	Non-controllinginterests
		September	30,2023	December	31,2022	September 30,2022
		Amount	Shareholding percentage	Amount	Shareholding percentage	Amount	Shareholdin g percentage
P.I.E. INDUSTRIA L BERHAD	Malaysia	$1,867,072	49	$1,832,190	49	$1,701,794	49

Summary financial information of subsidiaries:

Balance sheet

Balance sheet
Current Assets Non-Current Assets Current liability Non-current liabilities Net total assets	September 30,2023		December 31,2022		September 30,2022
		$ 4,843,819 1,344,651 ( 2,272,594) ( 72,582)		$ 4,702,333 1,334,687 ( 2,204,321) ( 61,208)		$ 4,515,157 1,260,540 ( 2,221,549) ( 51,073) $ 3,503,075
		$ 3,843,294		$ 3,771,491

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Comprehensive Income Statement

July	1 to September 30,2023	1 to September 30,2023	July
$ 2,061,823 167,589 ( 29,275) 138,314 98,969 $ 237,283 $ 115,273 January1 to September 30,2023	$ 2,061,823 167,589 ( 29,275)
	138,314 98,969
	$ 237,283
	$ 115,273
$ 6,306,964 397,851 ( 89,509) 308,342 ( 60,953) $ 247,389 $ 120,182 January1 to September 30,2023	$ 6,306,964 397,851 ( 89,509)
	308,342 ( 60,953)
	$ 247,389
	$ 120,182
		$ 818,770 ( 152,682) ( 541,691) 537	$ 160,849 ( 230,580) ( 14,099) 24,292 ( 59,538) 518,935 $ 459,397
		124,934
		438,891
		$ 563,825

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(IV) Foreign exchange conversion

This consolidated financial report is presented in NTD, the functional currency of the company, as the presentation currency.
Foreign currency transactions and balances
(1) Foreign currency transactions are converted into the functional currency at the spot exchange rate on the transaction date or measurement date, and the conversion difference arising from the conversion of such transactions is recognized as current profit and loss.
(2) The balance of foreign currency monetary assets and liabilities shall be evaluated and adjusted at the spot exchange rate on the balance sheet date, and the conversion difference arising from the adjustment shall be recognized as the current profit and loss.
(3) The balance of foreign currency non-monetary assets and liabilities measured at fair value through income shall be evaluated and adjusted according to the spot exchange rate on the balance sheet date, and the exchange difference arising from the adjustment shall be recognized as the current profit and loss; if the balance is measured at fair value through other comprehensive income, it shall be evaluated and adjusted according to the spot exchange rate on the balance sheet date, and the exchange difference arising from the adjustment shall be recognized in others comprehensive income; if it is not measured by fair value, it is measured according to the historical exchange rate on the initial trading day.
(4) All exchange gains and losses are reported in "other gains and losses" in the income statement.
Conversion of foreign operations
(1) For all group individuals and affiliated enterprises whose functional currency is different from the presentation currency, their operating results and financial status shall be converted into the presentation currency in the following ways:
- A. 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.

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

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

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

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

Liabilities that meet one of the following conditions are classified as current liabilities:
(1) Those that are expected to be settled in the normal business cycle.
(2) Held mainly for trading purposes.
(3) Expected to be settled within 12 months after the balance sheet date.
(4) The repayment period cannot be unconditionally deferred to at least 12 months after the balance sheet date. The terms of the liabilities may be based on the choice of the counterparty; the fact that the liabilities are settled due to the issuance of equity instruments does not affect its classification.

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

(VI) Cash equivalents

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

(VII) Financial assets at FVTPL

Financial assets that are not measured at amortized cost or at fair value through other comprehensive income.
The group adopts transaction day accounting for financial assets measured at fair value through income in compliance with trading practices.
The Group measures their fair value at the time of initial recognition, and the relevant transaction costs are recognized in profit or loss; subsequently, they are measured at fair value, and the profit or loss is recognized in profit or loss.
When the right to receive dividends is established, the economic benefits related to dividends are likely to flow in and the number of dividends can be reliably measured, the Group recognizes dividend income in profit or loss.

(VIII) Financial assets at FVTOCI

Financial assets at FVTOCI refer to an irrevocable choice at the time of initial recognition to report changes in the fair value of equity instrument investments that are not held for trading in other comprehensive income; or debt instrument investments that meet the following conditions at the same time:
(1) The financial asset is held under the business model to collect contractual cash flow and for sale.
(2) The cash flow generated on a specific date from the contractual terms of the financial assets is entirely the interest in the payment of the principal and the outstanding principal amount.
The Group adopts transaction day accounting for financial assets measured at fair value through other comprehensive income in accordance with trading practices.
The Group measures their fair value plus transaction costs at the time of original recognition, and is subsequently measured at fair value:

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

Financial assets measured at after-amortization cost refer to those who meet the following conditions at the same time:
(1) Holding the financial asset under the business model to collect the contractual cash flow.
(2) The cash flow generated on a specific date from the contractual terms of the financial assets is entirely the interest in the payment of the principal and the outstanding principal amount.
The Group adopts transaction day accounting for financial assets measured at afteramortization cost in accordance with trading practices.
The Group measures its fair value plus transaction cost at the time of original recognition. Subsequently, the effective interest method is adopted to recognize interest income and impairment loss in the current period according to the amortization procedure, and the profit or loss is recognized in profit and loss at the time of derecognition.
Due to the short holding period, the fixed deposits held by the Group that does not conform to cash equivalents have an insignificant discount effect and are therefore measured by the investment amount.

(X) Accounts and notes receivable

Accounts and notes receivable refer to accounts and notes which, according to the contract, have the unconditional right to receive the amount of consideration obtained from the transfer of goods or services.
For short-term accounts and notes receivable with unpaid interest, as they have little effect on discount, the Group measures them based on the original invoice amount.

(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.

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(XII) Derecognition of financial assets

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

(XIII) Lessor’s lease transaction - Operating lease

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

(XIV) Inventory

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

- (XV) Investment by equity method Affiliated enterprises

Affiliated enterprises refer to all individual entities in which the Group has a significant influence on them but has no control over them. Generally, the Group directly or indirectly holds more than 20% of its voting rights. The Group's investment in affiliated enterprises is treated with the equity method and recognized at cost when acquired.
The Group recognizes the share of profit or loss of the affiliated enterprise as the current income and recognizes the share of other comprehensive income after the acquisition as other comprehensive income. If the group's share of loss in any affiliated enterprise is equal to or exceeds its interest in the associated enterprise (including any other unsecured receivables), the group does not recognize any further loss, unless the group has a legal or constructive obligation to the associated enterprise or has made payments on its behalf.
When 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.
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.

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When the Group disposes of an affiliated enterprise, if there is a loss of significant influence on the affiliated enterprise, the accounting treatment of all amounts previously recognized in other comprehensive income related to the affiliated enterprise is the same as if the Group directly disposes of the relevant assets or liabilities, that is, if the interests or losses previously recognized as other comprehensive income will be reclassified as profit and loss, then if there is a loss of significant influence on the affiliated enterprise, the profit or loss will be reclassified as profit and loss from equity. If the Group still has a significant influence on the affiliated enterprise, the amount previously recognized in other comprehensive income shall be transferred out in the above manner only in proportion.
If the Group loses its significant influence on the affiliated enterprise when it disposes the stake in the affiliated enterprise, the capital surplus associated with the affiliated enterprise will be moved to the income statement. If the Group retains its significant influence on the affiliated enterprise, profit or loss will be recognized according to the percentage of ownership disposed.

(XVI) Property, plant, and equipment

Property, plant and equipment are recorded based on the acquisition cost, and the relevant interest during the acquisition and construction period is capitalized.
Subsequent costs are included in the book value of assets or recognized as a separate asset only when the future economic benefits related to the project are likely to flow into the Group and the cost of the project can be measured reliably. The book value of the reset part should be derecognized. All other maintenance costs are recognized in current profit or loss when incurred.
For property, plant and equipment, the cost model is adopted for the subsequent measurement. Except that land is not depreciated, the depreciation is calculated by the straight-line method according to the estimated service life. If the components of property, plant and equipment are significant, they are separately depreciated.
The Group reviews the residual value, service life, and depreciation method of each asset at the end of each fiscal year. If the expected value of the residual value or service life is different from the previous estimate, or the expected consumption pattern of the future economic benefits contained in the asset has changed significantly, then from the date of the change, it shall be handled in accordance with the provisions of the International Accounting Standard No. 8 "Accounting Policies, Changes and Errors in Accounting Estimates." The service life of each asset is as follows:

Buildings 15 ~ 51 years Equipment 3 ~ 9 years Others 1 ~ 6 years

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

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

~25~

Lease liabilities are recognized at the present value of the lease payments that have not been paid at the beginning of the lease at the discounted current value of the group's incremental borrowing rate. Lease payments include fixed payments, less any lease incentives receivable.
Subsequently, the interest method is adopted and measured by the after-amortization cost, and interest expenses are provided during the lease period. When the lease period or lease payment changes but not due to contract modification, the lease liabilities will be reassessed and the right-of-use assets will be re-measured.
The right-of-use assets are recognized at cost on the lease start date, and the cost is measured based on the original amount of the lease liability.

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

(XVIII) Investment property

Investment property is recognized at the acquisition cost, and the cost model is adopted for the subsequent measurement. Except for land, depreciation is made on a straight-line method based on the estimated service life, and the service life is 15–51 years.

(XIX) Intangible asset

Goodwill is generated by corporate acquisition based on the purchase method.
Computer software is recognized at acquisition cost, and amortized using the straight-line method over the estimated useful life of 10 years.

(XX) Impairment of non-financial assets

The Group estimates the recoverable amount of assets with signs of impairment on the balance sheet date. When the recoverable amount is lower than its book value, the impairment loss is recognized. The recoverable amount refers to the fair value of an asset minus disposal cost or its right-of-use value, whichever is higher. Except for goodwill, when there is no impairment or reduction in the assets recognized in the previous year, the impairment loss will be reversed, but the book value of the assets increased by the reversal of the impairment loss shall not exceed the book value of the assets if the impairment loss is not recognized after deduction of the depreciation or amortization.
The recoverable amount of goodwill is regularly estimated. When the recoverable amount is lower than its book value, the impairment loss is recognized. The impairment loss of goodwill impairment will not be reversed in subsequent years.
Goodwill is allocated to cash-generating units for impairment testing. This allocation is based on the identification of the operating department, 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.

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(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) Notes payable and accounts payable

Notes payable and accounts payable refer to debts arising from the purchase of raw materials, commodities, or labor services on credit and notes payable due to business and non-business reasons.
For short-term accounts and notes payable that belong to unpaid interest, as the discounting effect is insignificant, the Group uses the original invoice amount to measure the value.

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

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

(XXIV) Derecognition of financial liabilities

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

(XXV) The offset of financial assets and liabilities

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

(XXVI) Non-hedging derivatives and embedded derivatives

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

(XXVII) Employee welfare

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.

Pension

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

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

(XXVIII) Income tax

Income tax expense includes current and deferred income tax. Income tax is recognized in profit or loss, except for income tax related to items included respectively in other comprehensive income or directly included in equity.
The group calculates the current income tax based on the tax rate enacted or substantively enacted on the balance sheet date by the country where the group operates and the taxable income is generated. The management assesses the status of income tax returns regularly concerning 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.

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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 nor does it generate a corresponding taxable and deductible temporary difference, then it is not recognized. If there is a temporary difference arising from the investment in subsidiaries and affiliated enterprises, the Group can control the reversal time point of the temporary difference, and the temporary difference is likely to not be reversed in the foreseeable future, then it will not be recognized. Deferred income tax is subject to the tax rate (and tax law) that has been enacted or substantively enacted on the balance sheet date and is expected to apply when the relevant deferred income tax assets are realized or the deferred income tax liabilities are settled.
Deferred income tax assets are recognized to the extent that the temporary differences are likely to be used to offset future taxable income, and the unrecognized and recognized deferred income tax assets are reassessed on each balance sheet date.
The current income tax assets and current income tax liabilities can be offset when there is a legal enforcement right to offset the recognized current income tax assets and liabilities and there is an intention to pay off on a net basis or to realize assets and liabilities at the same time. When there is a legal enforcement right to offset the current income tax assets and current income tax liabilities, and the deferred income tax assets and liabilities are generated by the same taxpayer, or different taxpayers of the same tax authority and each entity intends to pay off the assets and liabilities on a net basis or realize the assets and settle the liabilities at the same time, then the deferred income tax assets and liabilities can be offset against each other.
The portion of unused income tax deduction for deferred use generated from the procurement of equipment or technology, R&D spending and investment in equity shall be recognized as deferred income tax assets within the scope of using unused income tax deduction for taxation with a high probability in the future.
The interim income tax expense is calculated by applying the estimated annual average effective tax rate to the interim pre-tax, and relevant information is disclosed in accordance with the policies above.

(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.

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(XXX) Revenue recognition

The Group manufactures and sells electronic components. Revenue from sales is recognized when the control of the product is transferred to the customer, that is, when the product is delivered to the buyer, the buyer has discretion over the price of the product, and the Group has no outstanding performance obligation that may affect the customer's acceptance of the product. When the product is delivered to the designated place, the risk of obsolescence and loss has been transferred to the customer, and the customer accepts the product according to the sales contract, or if there is objective evidence to prove that all acceptance criteria have been met. Accounts receivable are recognized when the goods are delivered to the customer. Since then, the Group has unconditional rights to the contract price, and the consideration can be collected from the customer after a certain period of time.
The terms of payment for sale transactions are usually due 30 to 120 days after the date of shipment. Since the time interval between the transfer of the promised goods or services to the customer and the customer's payment does not exceed one year, the Group has not adjusted the transaction price to reflect the time value of the currency.

(XXXI) Government subsidy

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

(XXXII) Operation 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.

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

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

(I) Important judgment for accounting policy adoption

Recognition of gross or net income

According to the type of transaction and its economic essence, the Group determines whether the nature of its commitment to customers is the performance obligation of providing specific goods or services by itself (i.e. the Group is the principal), or is the performance obligation of another party providing such goods or services (i.e. the Group is the agent). When the Group controls a particular product or service before transferring it to a customer, the Group acts as

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the principal and recognizes the total amount of consideration that it is expected to be entitled to receive for the transfer of the particular product or service as income. If the Group does not control the specific product or service before transferring it to customers, the Group acts as an agent to arrange for another party to provide the particular product or service to customers, and any fee or commission that the Group is entitled to receive via this arrangement is recognized as income.

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

Being responsible for fulfilling the promise of providing a particular product or service.
Bearing the inventory risk before transferring the particular product or service to the customer, or bearing the inventory risk after transferring the control.
Having the discretion to fix the price of a particular product or service.
(II) Important accounting estimates and assumptions

Inventory evaluation

Since inventory must be priced at the lower of the cost and net realizable value, the Group must use judgment and estimation to determine the net realizable value of inventory on the balance sheet date. Due to rapid changes in technology, the Group assesses the amount of inventory on the balance sheet due to normal wear and tear, obsolescence, or lack of market sales value, and reduces the inventory cost to the net realizable value. This inventory evaluation is mainly based on the estimated product demand in a specific period in the future, so significant changes may occur. Please refer to Note 6 (5) for the carrying amount of the Group’s inventory as of September 30, 2023.

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Notes to Important Account Items

(I) Cash and cash equivalents

Cash on hand and working capital Checking and demand deposit accounts Time deposit Bond repos	September 30,2023	September 30,2023	December 31,2022	December 31,2022	September 30,2022	September 30,2022
		$ 783 4,272,449 1,138,080 997,577		$ 741 4,607,881 1,855,202 249,747		$ 681 5,236,847 1,698,194 99,810 $ 7,035,532
		$ 6,408,889		$ 6,713,571

The credit quality of the financial institutions with which the Group interacts is good, and the Group interacts with several financial institutions to diversify credit risks. The probability of default is expected to be very low.
The bank deposits pledged by the Group as of September 30, 2023 are classified as financial assets measured at amortized cost, and listed under other current assets and other non-current assets as of December 31, 2022 and September 30, 2022 Please refer to Note 8.

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(II) Financial assets at FVTPL

Item September 30, 2023 December 31, 2022 September 30, 2022 Mandatory financial assets measured at fair value through income Open-end funds $ 10,774 $ 10,239 $ 10,125 Financial liabilities mandatorily measured at fair value through income Foreign exchange forward contracts $ - $ - $ -

Current items:

Mandatory financial assets measured at fair value through income

Financial liabilities mandatorily measured at fair value through income

For the financial products held by the Group from July 1 to September 30, 2023 and 2022, and from January 1 to September 30, 2023 and 2022, a net gain of NT$92, NT$5,547, NT$10,498, and NT$$33,898 were recognized respectively.
The Group has not pledged financial assets measured at fair value through income.

(III) Financial assets measured at after-amortization cost

Item		September 30,2023
Current items: Pledged time deposits Restricted bank deposits Non-current items: Pledged time deposits		$ 3,523 649,504 $ 653,027 $ 4,856

Please refer to Note 8 for the Group's financial assets measured at amortized cost as collaterals.

(IV) Notes and accounts receivable

Note receivable Accounts receivable Less: Allowance for impairment loss	September 30,2023	September 30,2023	September 30,2023	December 31,2022	December 31,2022	December 31,2022	September 30,2022	September 30,2022
			$ 17,199 3,840,009 ( 5,097)			$ 35,075 3,560,514 ( 5,223)		$ 5,422 3,704,039 ( 12,262) $ 3,697,199
			$ 3,852,111			$ 3,590,366

The Group does not hold any collateral.
The balance of accounts receivable and notes receivable as of September 30, 2023, December 31, 2022, and September 30, 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.
Without considering the collateral or other credit enhancements held, the maximum amount of exposure that best represents the credit risk of notes and accounts receivable of the Group on September 30, 2023, December 31, 2022, and September 30, 2022 is the book value of each type of notes and accounts receivable.
Please refer to note 12(2) for details of relevant credit risk information.

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(V) Inventory

	September 30,2023	September 30,2023
Cost		Allowance for valuation losses	Book value
$ 1,437,269 850,238 1,725,754 $ 4,013,261	($ 37,286) ( 8,924) ( 143,658) ($ 189,868) December 31,2022		$ 1,399,983 841,314 1,582,096 $ 3,823,393


Cost		Allowance for valuation losses	Book value
$ 1,410,711 993,314 1,663,402 $ 4,067,427	($ 23,541) ( 19,990) ( 129,977) ($ 173,508) September 30,2022		$ 1,387,170 973,324 1,533,425 $ 3,893,919

Cost		Allowance for valuation losses	Book value
$ 1,675,482 1,034,749 1,553,354 $ 4,263,585		($ 62,538) ( 20,014) ( 91,535) ($ 174,087)	$ 1,612,944 1,014,735 1,461,819 $ 4,089,498

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

July1 to September 30,2023	July1 to September 30,2023	July1 to September 30,2023	July1 to September 30,2022
$ 6,062,609 27,947 ( 17,610) $ 6,072,946 January 1 to September 30, 2023	$ 6,062,609 27,947 ( 17,610)		$ 5,632,643 11,935 ( 21,043) $ 5,623,535 January 1 to September 30, 2022
		$ 6,072,946
$ 16,956,237 16,330 ( 66,406) $ 16,906,161	$ 16,956,237 16,330 ( 66,406)		$ 16,565,165 26,112 ( 78,995) $ 16,512,282

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

Item	September 30,2023	September 30,2023	December 31,2022	December 31,2022	September 30,2022	September 30,2022
Non-current items: Equity instruments Listed and OTC stocks Non-listed, OTC, or emerging stocks Total		$ 935,050 958,485		$ 827,081 925,274		$ 864,278 891,239 $ 1,755,517
		$ 1,893,535		$ 1,752,355

Please refer to note 6(18) other equity items for the items the Group recognized in other comprehensive income due to changes in fair value from January 1 to September 30, 2023 and 2022.
None of the Group's financial assets measured at fair value through other comprehensive income were pledged as of September 30, 2023, December 31, 2022, and September 30, 2022.

(VII) Investment by equity method

September 30,2023	December 31,2022	December 31,2022
$ 699,271 994	$ 733,731 -
	$ 733,731
($ 1,928) ($ 1,928) January 1 to September 30, 2023		$ 133 $ 133 January 1 to September 30, 2022
($ 34,668) ($ 34,668)		$ 7,638 $ 7,638

The share of operating results of the Group’s significant affiliated companies is summarized as follows:
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.
Please refer to Note 8 for details on investment by equity method that the Group had placed as collateral for contractual liabilities.

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(VIII) Property, plant, and equipment

Land	Buildings	Buildings	Buildings		Equipment	Others	Others	Others	Unfinished construction and equipment to be accepted	Unfinished construction and equipment to be accepted	Unfinished construction and equipment to be accepted		Total $ 7,664,398 ( 4,977,903) $ 2,686,495 $ 2,686,495 477,043 12,784) 51,440) 391,089) 13,680 $ 2,721,905 $ 7,930,258 ( 5,208,353) $ 2,721,905 Total
$ 23,617 -	$ 811,024 ( 453,224)			(	$ 5,735,467 3,888,716)	$ 881,950 ( 635,963)			$ 212,340 - $ 212,340 $ 212,340 103,496 ( 4,249) ( 76,800) - ( 2,597) $ 232,190 $ 232,190 - $ 232,190 Unfinished construction and equipment to be accepted	$ 212,340 -		( ( (
$ 23,617	$ 357,800				$ 1,846,751	$ 245,987				$ 212,340
$ 23,617 - - - - ( 59)	$ 357,800 - ( 56) 3,821 ( 20,982) 21,158			( ( (	$ 1,846,751 313,405 6,904) 21,486 302,068) 5,062)	$ 245,987 60,142 ( 1,575) 53 ( 68,039) 240				$ 212,340 103,496 ( 4,249) ( 76,800) - ( 2,597)
$ 23,558	$ 361,741				$ 1,867,608	$ 236,808				$ 232,190
$ 23,558 -	$ 836,843 ( 475,102)			(	$ 5,926,051 4,058,443)	$ 911,616 ( 674,808)				$ 232,190 -
$ 23,558	$ 361,741				$ 1,867,608	$ 236,808				$ 232,190
Land	Buildings				Equipment	Others
$ 23,211 -	$ 656,219 ( 394,779)			(	$ 5,110,913 3,681,747)	$ 789,034 ( 585,793)				$ 235,854 - $ 235,854 $ 235,854 23,851 ( 45) ( 128,648) - 5,949 $ 136,961 $ 136,961 - $ 136,961			$ 6,815,231 ( 4,662,319) $ 2,152,912 $ 2,152,912 622,022 ( 14,669) 62,956 ( 364,216) 64,168 $ 2,523,173 $ 7,528,608 ( 5,005,435) $ 2,523,173
$ 23,211	$ 261,440				$ 1,429,166	$ 203,241
$ 23,211 - - - - 49	$ 261,440 15,982 - 61,008 ( 18,392) 8,907			( (	$ 1,429,166 503,223 11,442) 124,909 290,860) 44,780	$ 203,241 78,966 ( 3,182) 5,687 ( 54,964) 4,483
$ 23,260 $ 23,260 - $ 23,260		$ 328,945 $ 759,250 ( 430,305)	$ 328,945		$ 1,799,776		$ 234,231 $ 863,944 ( 629,713)	$ 234,231			$ 136,961 $ 136,961 -
					$ 5,745,193 ( 3,945,417)
		$ 328,945			$ 1,799,776		$ 234,231				$ 136,961

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

(IX) Lease transaction - Lessee
The underlying lease assets of the Group include land, plants and buildings, and the terms of the lease contracts usually range from 1 to 5 years. The lease contracts are negotiated individually and contain various terms and conditions. There are no other restrictions except that the leased assets may not be used as a loan guarantee.
The lease term of office equipment and transportation equipment leased by the Group does not exceed 12 months.
The book value and recognized depreciation expense information of the right-of-use assets are as follows:

are as follows:
Land Houses Land Houses Land Houses		September 30,2023			December 31,2022				September 30,2022
				Book value		Book value				Book value
		$ 192,842 $ 119,657 $ 312,499 $ July1 to September 30,2023		$ 192,842 119,657		$	202,154 183,245		$ 179,291 214,205 $ 393,496 September 30,2022
				$ 312,499		$	385,399
							July1 to
			Depreciation expenses					Depreciation expenses
	$ 2,292 $ 1,804 22,167 21,894 $ 24,459 $ 23,698 January1 to September 30,2023 January1 to September 30,2022		$ 2,292 22,167
			$ 24,459
			Depreciation expenses					Depreciation expenses
			$ 6,888 66,659					$ 5,428 63,578 $ 69,006
			$ 73,547

The increase in the Group's right-of-use assets from July 1 to September 30, 2023 and 2022, and from January 1 to September 30, 2023 and 2022 were NT$0, NT$16,061, NT$2,221 and NT$113,605 respectively.
The information on profit and loss items related to leasing contracts is as follows:

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Items affecting current profit and loss Interest expenses on lease liabilities Expenses of short-term lease contracts Items affecting current profit and loss Interest expenses on lease liabilities Expenses of short-term lease contracts Gain on lease modification	July1 to September 30,2023	July1 to September 30,2022
	$ 1,418 6,074 January 1 to September 30, 2023	$ 2,038 4,264 January 1 to September 30, 2022
	$ 4,804 15,995 -	$ 7,426 11,274 -

The total cash outflow from the leases of the Group for the three months ended September 30, 2023 and 2022, and for the nine months ended September 30, 2023 and 2022, were NT$48,843, NT$27,965, NT$81,070, and NT$62,393, respectively.
Please refer to Note 8 for details of the Group's right-of-use assets pledged as collateral.

(X) Investment property

January 1, 2023 Cost Cumulative depreciation and impairment 2023 January 1 Depreciation expenses Net exchange difference September 30 September 30, 2023 Cost Cumulative depreciation and impairment		Land	Buildings	Total
	$ 79,107 - $ 79,107 $ 79,107 - ( 580) $ 78,527 $ 78,527 - $ 78,527		$ 108,215 ( 87,003) $ 21,212 $ 21,212 ( 1,217) ( 172) $ 19,823 $ 107,583 ( 87,760) $ 19,823	$ 187,322 ( 87,003) $ 100,319 $ 100,319 ( 1,217) ( 752) $ 98,350 $ 186,110 ( 87,760) $ 98,350

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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 Transfer ( 20,773) ( 61,008) ( 81,781) Depreciation expenses - ( 4,436) ( 4,436) Net exchange difference 68 3,745 3,813 September 30 $ 84,681 $ 47,442 $ 132,123 September 30, 2022 Cost $ 84,681 $ 149,858 $ 234,539 Cumulative depreciation and impairment - ( 102,416) ( 102,416) $ 84,681 $ 47,442 $ 132,123 1. Rental income and direct operating expenses of investment property: July1 to September 30,2023 July1 to September 30,2022 Rental income of investment property $ 4,292 $ 9,670 Direct operating expenses of investment property that generate rental income in the current period $ 426 $ 1,487 January1 to September 30,2023 January1 to September 30,2022 Rental income of investment property $ 15,488 $ 32,090 Direct operating expenses of investment property that generate rental income in the current period $ 1,217 $ 4,436	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 Transfer ( 20,773) ( 61,008) ( 81,781) Depreciation expenses - ( 4,436) ( 4,436) Net exchange difference 68 3,745 3,813 September 30 $ 84,681 $ 47,442 $ 132,123 September 30, 2022 Cost $ 84,681 $ 149,858 $ 234,539 Cumulative depreciation and impairment - ( 102,416) ( 102,416) $ 84,681 $ 47,442 $ 132,123 1. Rental income and direct operating expenses of investment property: July1 to September 30,2023 July1 to September 30,2022 Rental income of investment property $ 4,292 $ 9,670 Direct operating expenses of investment property that generate rental income in the current period $ 426 $ 1,487 January1 to September 30,2023 January1 to September 30,2022 Rental income of investment property $ 15,488 $ 32,090 Direct operating expenses of investment property that generate rental income in the current period $ 1,217 $ 4,436	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 Transfer ( 20,773) ( 61,008) ( 81,781) Depreciation expenses - ( 4,436) ( 4,436) Net exchange difference 68 3,745 3,813 September 30 $ 84,681 $ 47,442 $ 132,123 September 30, 2022 Cost $ 84,681 $ 149,858 $ 234,539 Cumulative depreciation and impairment - ( 102,416) ( 102,416) $ 84,681 $ 47,442 $ 132,123 1. Rental income and direct operating expenses of investment property: July1 to September 30,2023 July1 to September 30,2022 Rental income of investment property $ 4,292 $ 9,670 Direct operating expenses of investment property that generate rental income in the current period $ 426 $ 1,487 January1 to September 30,2023 January1 to September 30,2022 Rental income of investment property $ 15,488 $ 32,090 Direct operating expenses of investment property that generate rental income in the current period $ 1,217 $ 4,436	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 Transfer ( 20,773) ( 61,008) ( 81,781) Depreciation expenses - ( 4,436) ( 4,436) Net exchange difference 68 3,745 3,813 September 30 $ 84,681 $ 47,442 $ 132,123 September 30, 2022 Cost $ 84,681 $ 149,858 $ 234,539 Cumulative depreciation and impairment - ( 102,416) ( 102,416) $ 84,681 $ 47,442 $ 132,123 1. Rental income and direct operating expenses of investment property: July1 to September 30,2023 July1 to September 30,2022 Rental income of investment property $ 4,292 $ 9,670 Direct operating expenses of investment property that generate rental income in the current period $ 426 $ 1,487 January1 to September 30,2023 January1 to September 30,2022 Rental income of investment property $ 15,488 $ 32,090 Direct operating expenses of investment property that generate rental income in the current period $ 1,217 $ 4,436
$ 4,292 $ 426 January1 to September 30,2023	$	4,292
	$	426
	$ 15,488		$ 32,090 $ 4,436
	$ 1,217

The fair value of the investment property held by the Group as of September 30, 2023, December 31, 2022, and September 30, 2022 were NT$364,854, NT$419,829, and NT$419,829, respectively, which were obtained from the evaluation of government announcement information, and the results belong to the third level of fair value.
Please refer to note 8 for details of the Group's pledged investment property.

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(XI) Intangible asset

Computer software		Total
$ - -	$ 37,072 - $ 37,072 $ 37,072 - - - ( 109) ( $ 36,963 $ 36,963 - $ 36,963	$ 37,072 - $ 37,072 $ 37,072 18,696 16,859 ( 3,366) 129) $ 69,132 $ 89,474 ( 20,342) $ 69,132 Goodwill $ 36,218 - $ 36,218 $ 36,218 1,043 $ 37,261 $ 37,261 - $ 37,261
$-
$ - 18,696 16,859 ( 3,366) ( 20)
$ 32,169 $ 52,511 ( 20,342)
$ 32,169

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

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(XII) Short-term borrowings

Nature of the borrowings	September 30,2023	September 30,2023	September 30,2023	Interest Rate	Collateral
Bank loans - Credit loans Nature of the borrowings	$ 496,466 December 31,2022	$ 496,466		3.58%-4.74% Interest Rate	None. Collateral
Bank loans - Credit loans Nature of the borrowings	$ 2,101,238 September 30,2022		$ 2,101,238	2.41%-5.39% Interest Rate	None. Collateral
Bank loans - Credit loans			$ 2,480,371	1.50%-3.96%	None.

As of September 30, 2023, December 31, 2022, and September 30, 2022, the Group's undrawn borrowing lines were NT$7,444,379, NT$7,675,351, and NT$7,357,161, respectively.

(XIII) Other payables

Salary, bonus, and employee remuneration payable Consumables payable Repair expenses payable Utility fees payable Equipment payment payable Others	September 30,2023	September 30,2023	December 31,2022	December 31,2022	September 30,2022	September 30,2022
		$ 621,123 170,253 65,695 56,391 42,332 746,948		$ 596,849 148,760 76,253 63,263 194,860 562,814		$ 570,366 70,680 65,161 62,175 213,033 375,125
		$ 1,702,742		$ 1,642,799		$ 1,356,540

(XIV) Pension

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

~40~

end of March in the following year. paragraph.

(2) From July 1 to September 30, 2023 and 2022, and from January 1 to September 30, 2023 and 2022, the pension costs recognized by the Group in accordance with the pension measures above were NT$2,962, NT$654, NT$4,336, and NT$1,983 respectively.
(3) The Group expected to appropriate $1,701 for payment to the retirement plan for 2024.
Measures for defined retirement allocation
(1) Since July 1, 2005, the Company and Tekcon have formulated measures for defined retirement allocation in accordance with the “Labor Pension Act” which applies to employees of Taiwan nationality. For employees of the Company and Tekcon who choose to apply the labor retirement pension system of the “Labor Pension Act,” 6% of their monthly salary is allocated as labor pension to the employee's personal account at the Bureau of Labor Insurance. The payment of labor pension shall be based on the balance of the employee's pension account and the number of accumulated benefits and shall be paid in the form of monthly pension or lump sum pension payment.
(2) The subsidiaries listed in the consolidated statements do not have their own retirement measures. PAN-INTERNATIONAL ELECTRONICS INC., P.I.E. Industrial Berhad and its subsidiaries in mainland China shall allocate a certain percentage of their total salary to the mandatory provident fund in accordance with the local government's mandatory regulations, and be deposited in the independent account of each employee, and the pension of each employee is managed and arranged by the government. The companies mentioned above have no further obligations except for the monthly allocation.
(3) From July 1 to September 30, 2023 and 2022, and from January 1 to September 30, 2023 and 2022, the pension costs recognized by the Group in accordance with the pension measures above were NT$40,428, NT$40,526, NT$119,463, and NT$118,320 respectively.

(XV) Share capital

As of September 30, 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.

(XVI) Capital surplus

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

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(XVII) 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 new shares or paying cash in proportion to the original number of shares held by the shareholders. However, if new shares or cash are issued, the amount of such reserve shall exceed 25% of the paid-in capital.
When the Company distributes earnings, it is required by laws and regulations to set aside a special reserve for the debit balance of other equity items on the balance sheet date of the current year before distribution. When the debit balance of other equity items is subsequently reversed, the amount of reversal can be included in the earnings available for distribution.
The shareholders resolved to pass distribution of 2022 and 2021 earnings during the meetings held on June 9, 2023 and June 15, 2022; details are as follows:

2022	2022	2021	2021	2021
Amount	Dividend per share(NT$)	Amount		Dividend per share(NT$)
$ 131,884 312,772 725,685	$ 1.40	$ 130,519 ( 277,289) 518,346 $ 371,576		$ 1.00
$ 1,170,341			$ 371,576

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(XVIII) Other items of equity

I)Other items of equity
January 1, 2023 Unrealized profit or loss of financial products - Group Currency conversion difference - Group September 30, 2023 January 1, 2022 Unrealized profit or loss of financial products - Group Currency conversion difference - Group September 30, 2022	Financial assets at FVTOCI	Adjustment for currencyconversion	Total
	($ 419,841) 110,492 -	($ 965,367) - 79,592 ($ 885,775)	($ 1,385,208) 110,492 79,592 ($ 1,195,124) Total
	($ 309,349)
	Financial assets at FVTOCI	Adjustment for currencyconversion
	$ 288,225 ( 828,884) -	($ 1,360,659) - 555,002 ($ 805,657)	($ 1,072,434) ( 828,884) 555,002 ($ 1,346,316)
	($ 540,659)

(XIX) Non-controlling interests

2023 2022 January 1 $ 1,870,302 $ 1,682,573 Share of non-controlling interest: Net income for the period 145,483 154,660 Conversion difference from the conversion of financial statements of a foreign operation ( 33,765) 51,821 Cash dividend payment ( 80,254) ( 86,844) Decrease in non-controlling interests - ( 61,540) September 30 $ 1,901,766 $ 1,740,670 (XX) Operating revenue July1 to September 30,2023 July1 to September 30,2022 Revenue from customer contracts $ 6,885,374 $ 6,483,846 January1 to September 30,2023 January1 to September 30,2022 Revenue from customer contracts $ 19,183,151 $ 18,657,591	2023 2022 January 1 $ 1,870,302 $ 1,682,573 Share of non-controlling interest: Net income for the period 145,483 154,660 Conversion difference from the conversion of financial statements of a foreign operation ( 33,765) 51,821 Cash dividend payment ( 80,254) ( 86,844) Decrease in non-controlling interests - ( 61,540) September 30 $ 1,901,766 $ 1,740,670 (XX) Operating revenue July1 to September 30,2023 July1 to September 30,2022 Revenue from customer contracts $ 6,885,374 $ 6,483,846 January1 to September 30,2023 January1 to September 30,2022 Revenue from customer contracts $ 19,183,151 $ 18,657,591	2023	2023	2022
		$ 1,870,302 145,483 ( 33,765) ( 80,254) - $ 1,901,766
		September 30,2023
$ 6,885,374 January1 to September 30,2023	$	6,885,374	$ 6,483,846 January1 to September 30,2022
	$ 19,183,151			$ 18,657,591

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:

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September 30,2023	September 30,2023	September 30,2023	September 30,2023	December 31,2022	September 30,2022	September 30,2022
$ 251,904				$ 273,608	$ 377,683
	$ 7,903 January1 to September 30,2023				$ 19,010 January1 to September 30,2022
	$ 134,481 July1 to September 30,2023 $ 6,696 5,417 8 1,228 $ 13,349 January1 to September 30,2023 $ 25,285 22,577 14 6,443 $ 54,319				$	642,524 1 to September 30,2022
					July
		$ 6,696 5,417 8 1,228 $ 13,349 January1 to September 30,2023	$ 6,696 5,417 8 1,228		$ 13,218 12,156 87,256 4,190 $ 116,820 January1 to September 30,2022
			$ 13,349
			$ 25,285 22,577 14 6,443			$ 23,657 39,111 87,262 6,016 $ 156,046
			$ 54,319

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(XXII) Other gains and losses

July1 to September 30,2023		July1 to September 30,2022
$ 92 ( 1,093) 47,749 ( 4,670) ( 2,829) $ 39,249 January1 to September 30,2023	$ 5,547 ( 199) 64,743 - ( 3,446) $ 66,645 January1 to September 30,2022	$ 5,547 ( 199) 64,743 - ( 3,446)
		$ 66,645
$ 10,498 ( 3,346) 183,612 ( 5,739) ( 2,671) $ 182,354		$ 33,898 ( 8,998) 119,114 - ( 1,748)
		$ 142,266

(XXIII) Employee benefit, depreciation and amortization expenses

Bynature	July1 to September 30,2023	July1 to September 30,2022
Employee benefits expense Salary expenses Labor and national health insurance expenses Pension expenses Other HR expenses Depreciation expenses Amortization expenses	$ 780,305 21,635 43,390 61,001 $ 906,331 $ 148,553 $ 7,251	$ 784,382 17,277 41,180 62,533 $ 905,372 $ 155,899 $ 3,468

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By nature January1 to September 30,2023	January1 to September 30,2022
Employee benefits expense
Salary expenses $ 2,467,925	$ 2,082,552
Labor and national health
insurance expenses 64,625	55,938
Pension expenses 123,799	120,303
Other HR expenses 174,455	158,359
$ 2,830,804	$ 2,417,152

Depreciation expenses $ 465,853	$ 437,658

Amortization expenses $ 12,445	$ 5,745
1. According to the articles of association of the Company, if the Company has any profit
in the year (the so-called profit refers to the gains before deducting the distribution of
employee remuneration and directors’ remuneration), it shall allocate no less than 5%
of it as employee remuneration and no more than	0.5% as directors’ remuneration,
which shall be distributed after the special resolution of the Board of Directors, and
shall be reported to the shareholders' meeting. However, if the Company still has a
cumulative loss, it shall reserve the amount of compensation in advance.

The estimated amounts of the Company’s employee remuneration for the three months ended September 30, 2023 and 2022, and for the nine months ended September 30, 2023 and 2022, were NT$19,216, NT$27,304, NT$57,002, and NT$58,779, respectively. The remuneration to the Directors was estimated at NT$1,921, NT$2,731, NT$5,700, and NT$5,878, respectively. The aforementioned amount was presented as a salary expense account in the book.

The period from January 1 to September 30, 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 September 30, 2023 were in the amounts of NT$48,980 and NT$$3,968, 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.

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(XXIV) Financial costs

July1 to September 30,2023	July1 to September 30,2023	July1 to September 30,2022	July1 to September 30,2022
$ 6,078 1,418 542 $ 8,038 January1 to September 30,2023	$ 6,078 1,418 542	$ 9,599 2,038 76 $ 11,713 January1 to September 30,2022
	$ 8,038
	$ 45,085 4,804 2,959		$ 14,161 7,426 1,194 $ 22,781
	$ 52,848

(XXV) Income tax

1. Income tax expense

Components of income tax expenses:

Income tax for the current period: Income tax arising from current income Extra tax on undistributed earnings Income tax over estimates of previous year Total income tax for the current period Deferred income tax: The original value and reversal of temporary differences Income tax expense	July	1 to September 30,2023	July1 to September 30,2022	July1 to September 30,2022
		$ 112,437 - ( 1,578)		$ 115,783 - ( 1,190)
		110,859		114,593
		5,791		15,890
		$ 116,650		$ 130,483

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Income tax for the current period: Income tax arising from current income Extra tax on undistributed earnings Income tax over estimates of previous year Total income tax for the current period Deferred income tax: The original value and reversal of temporary differences Income tax expense	January1 to September 30,2023	January1 to September 30,2023	January1 to September 30,2022	January1 to September 30,2022
		$ 322,378 7,425 ( 40,165)		$ 288,522 46,681 ( 32,907)
		289,638		302,296
		35,165		39,430
		$ 324,803		$ 341,726

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

(XXVI) Earnings per share (EPS)

July1 to September 30,2023	July1 to September 30,2023	July1 to September 30,2023	July1 to September 30,2023	July1 to September 30,2023
After-tax amount	The weighted average number of outstanding shares (1000 shares)		Earnings per share (NT$)
$ 329,646		518,346		$ 0.64 $ 0.63
329,646 -		518,346 1,539
$ 329,646		519,885

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July1 to September 30,2022	July1 to September 30,2022	July1 to September 30,2022	July1 to September 30,2022	July1 to September 30,2022
After-tax amount	The weighted average number of outstanding shares (1000 shares)		Earnings per share (NT$)
$ 492,331		518,346
492,331 -		518,346 1,792
$ 492,331		520,138
After-tax amount	The weighted average number of outstanding shares (1000 shares)		Earnings per share (NT$)
$ 949,214		518,346		$ 1.83 $ 1.82
949,214 -		518,346 2,101
$ 949,214		520,447

~49~

January	to September 30,2022	to September 30,2022	to September 30,2022
After-tax amount	The weighted average number of outstanding shares (1000 shares)	Earnings per share (NT$)
$ 976,683	518,346		$ 1.88 $ 1.88
976,683 -	518,346 2,277
$ 976,683	520,623

Dongguan 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 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 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 third quarter of 2022 on the equity attributable to the owners of the parent company are as follows:

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

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(XXVIII) Supplementary information on cash flow

Investment activities with partial cash payment:

Purchase of property, plant and equipment Add: equipment payable at the beginning of the period Less: equipment payable at the end of the period Effect on foreign currency exchange differences Cash paid during the period	January1 to September 30,2023	January1 to September 30,2023	January1 to September 30,2022	January1 to September 30,2022	January1 to September 30,2022
	$ 477,043 194,860 ( 42,332) ( 463) $ 629,108			(	$ 622,022 235,818 213,033) 6,145 $ 650,952
		$ 629,108

(XXIX) Changes in liabilities from financing activities

January 1 Changes in financing cash flow Effect of exchange rate changes Other non-cash changes September 30			2023 Lease liabilities Total liabilities from financingactivities $ 188,754 $ 2,289,992 ( 60,271) ( 1,652,504) 902 ( 11,637) ( 4,524) ( 4,524) $ 124,861 $ 621,327
	Short-term borrowings $2,101,238 ( 1,592,233) ( 12,539) - $ 496,466		Lease liabilities $ 188,754 ( 60,271) 902 ( 4,524) $ 124,861

January 1 Changes in financing cash flow Effect of exchange rate changes Other non-cash changes September 30		2022	2022	2022
	Short-term borrowings	Lease liabilities		Total liabilities from financingactivities
	$ 1,028,206 1,263,683 188,482 - $ 2,480,371	(	$ 166,173 51,119) 5,936 102,428 $ 223,418	$ 1,194,379 1,212,564 194,418 102,428 $ 2,703,789

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Related Party Transactions

(I) Related party’s name and relationship

Related PartyName	Relationshipwith the Group
Hon Hai Precision Industry Co., Ltd. and subsidiaries (Hon Hai and subsidiaries) Sharp Corporation and subsidiaries (Sharp and subsidiaries) Foxconn Technology Co., Ltd. and subsidiaries (FTC and subsidiaries) GENERAL INTERFACE SOLUTION LIMITED Cyber TAN Technology, Inc and Subsidiaries Chery Holding Group and Subsidiaries LONG TIME TECH. CO., LTD. Pan-International Corporation (S) Pte Ltd. (Note 1)Listed as non-related party in September 2022	With significant influence on the group Other related parties Other related parties Other related parties Other related parties Other related parties (Note 1) Affiliates Affiliate (Note 2)

Related PartyName

Relationshipwith the Group

Hon Hai Precision Industry Co., Ltd. and subsidiaries (Hon Hai
and subsidiaries)
Sharp Corporation and subsidiaries (Sharp and subsidiaries)
Foxconn Technology Co., Ltd. and subsidiaries (FTC and
subsidiaries)
GENERAL INTERFACE SOLUTION LIMITED
Cyber TAN Technology, Inc and Subsidiaries
Chery Holding Group and Subsidiaries
LONG TIME TECH. CO., LTD.
Pan-International Corporation (S) Pte Ltd.
(Note 1)Listed as non-related party in September 2022

With significant influence
on the group
Other related parties
Other related parties
Other related parties
Other related parties
Other related parties (Note
1)
Affiliates
Affiliate (Note 2)

(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.

(II) Major transactions with related parties

1. Operating revenue

1.Operating revenue
With significant influence on the group - Hon Hai Precision Industry Co., Ltd. and subsidiaries Other related parties - Sharp and subsidiaries - Others Affiliates With significant influence on the group - Hon Hai Precision Industry Co., Ltd. and subsidiaries Other related parties - Sharp and subsidiaries - Others Affiliates	July1 to September 30,2023		July1 to September 30,2022
	$ 1,649,394 800,530 64,564 599 $ 2,515,087 January1 to September 30,2023	$ 1,649,394 800,530 64,564 599	$ 1,975,138 303,200 620,112 - $ 2,898,450 January1 to September 30,2022	$ 1,975,138 303,200 620,112 -
		$ 2,515,087		$ 2,898,450
		$ 4,698,795 2,446,885 297,053 868		$ 4,928,039 1,295,262 1,657,953 -
		$ 7,443,601		$ 7,881,254

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

2. Purchase

2.Purchase
With significant influence on the group - Hon Hai Precision Industry Co., Ltd. and subsidiaries Other related parties - Foxconn Technology Co., Ltd. and subsidiaries - Sharp and subsidiaries Affiliates With significant influence on the group - Hon Hai Precision Industry Co., Ltd. and subsidiaries Other related parties - Foxconn Technology Co., Ltd. and subsidiaries - Sharp and subsidiaries Affiliates	July1 to September 30,2023		July1 to September 30,2022
	$ 1,008,263 575,563 - 2,684 $ 1,586,510 January1 to September 30,2023	$ 1,008,263 575,563 - 2,684	$ 653,692 270,950 63 - $ 924,705 January1 to September 30,2022
		$ 2,180,671 1,722,358 - 4,784		$ 1,749,286 900,654 63 - $ 2,650,003
		$ 3,907,813

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

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3. Receivables from related parties

September 30, 2023 December 31, 2022 September 30, 2022

With significant influence on the group

With significant influence on the group
- Hon Hai Precision Industry Co., Ltd. and subsidiaries Other related parties - Sharp and subsidiaries - Others Affiliates Less: Allowance for impairment loss (	$ 2,462,185 915,377 135,415 465 3,513,442 1,049) $ 3,512,393	$ 3,165,783 788,580 221,535 - 4,175,898 ( 1,971) $ 4,173,927	$ 2,650,606 439,900 203,775 - 3,294,281 ( 1,464) $ 3,292,817

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

September 30, 2023 December 31, 2022 September 30, 2022

With significant influence on the group

With significant influence on the group
- Hon Hai Precision Industry Co., Ltd. and subsidiaries Other related parties - Foxconn Technology Co., Ltd. and subsidiaries - Others	$ 1,233,109 407,693 28 $ 1,640,830		$ 1,059,124 452,223 - $ 1,511,347		$ 1,079,905 153,635 - $ 1,233,540

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

September 30, 2023 December 31, 2022 September 30, 2022

With significant influence on the group

- Hon Hai Precision Industry Co., Ltd. and subsidiaries Other related parties	$ 72,742 - $ 72,742	$ 105,098 157 $ 105,255	$ 117,388 269 $ 117,657

The preceding contract liabilities of NT$72,298, NT$101,310, and NT$116,960 as of September 30, 2023, December 31, 2022, and September 30, 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.

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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

September 30, 2023 December 31, 2022 September 30, 2022

With significant influence on the group

$ 9,940 $ 39,286 $ 49,680

B. Interest expenses

July 1 to September 30, 2023 July 1 to September 30, 2022 With significant influence on the group $ 112 $ 382

January 1 to September 30, 2023 January 1 to September 30, 2022

With significant influence on the group $ 541 (III)Compensation of key management personnel July1 to September 30,2023 Short-term employee benefits $ 6,380 Post-employment benefits 60 Total $ 6,440 January1 to September 30,2023 Short-term employee benefits $ 12,097 Post-employment benefits 180 Total $ 12,277	With significant influence on the group $ 541 (III)Compensation of key management personnel July1 to September 30,2023 Short-term employee benefits $ 6,380 Post-employment benefits 60 Total $ 6,440 January1 to September 30,2023 Short-term employee benefits $ 12,097 Post-employment benefits 180 Total $ 12,277	$ 1,344 July1 to September 30,2022	$ 1,344 July1 to September 30,2022
July
$ 6,380 60 $ 6,440 January1 to September 30,2023	$ 6,380 60	$ 7,161 60 $ 7,221 January1 to September 30,2022
	$ 6,440
	$ 12,097 180		$ 12,164 180 $ 12,344
	$ 12,277

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Pledged Assets

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

		Book value	Book value			Guaranteepurpose
September 30,2023		December 31,2022		September 30,2022
	$ 653,027 4,856 33,828 10,035 54,223 195,108		$ 676 4,848 39,126 10,171 55,309 204,721		$ 636 4,920 40,148 9,614 56,520 209,252	Issuance of secured letter of credit Customs deposit Guarantee mortgage for bank line overdraft (note) Guarantee mortgage for a bank line Guarantee mortgage for a bank line Contractual liabilities
	$ 951,077		$ 314,851		$ 321,090

Note: As of September 30, 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.

==> picture [16 x 10] intentionally omitted <==

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 September 30, 2023, the outstanding payment is NT$351,990.

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Major Disaster Losses

No such situation.

==> picture [16 x 10] intentionally omitted <==

Significant Subsequent Events

No such situation.

==> picture [20 x 9] intentionally omitted <==

Others

(I) 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 noncurrent 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%.

(II) 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, the carrying amounts of financial assets, notes receivable, accounts receivable (including related parties), and other receivables) as of September 30, 2023, December 31, 2022, and September 30, 2022 were NT$14,543,481, NT$15,220,348, and NT$14,669,351, 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$8,358,961, NT$9,451,177, and NT$9,149,063, respectively. In addition, the book values of lease liabilities as of September 30, 2023, December 31, 2022, and September 30, 2022 were NT$124,861, NT$188,754, and NT$223,418, respectively. Please refer to Notes 6 (2) and (6) 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.

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.

~57~

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

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

(3) Management system
- A. Risk management shall be carried out by the Finance Department of the Group in accordance with the policies approved by the Board of Directors. It is responsible for identifying, assessing and avoiding financial risks through close cooperation with group operating units.
- B. The board of directors has written principles for overall risk management, and also provides written policies for specific areas and matters, such as exchange rate risk, interest rate risk, credit risk, use of derivatives and non-derivative financial instruments, and investment of surplus working capital.
Nature and extent of significant financial risks
(1) Market risk

Exchange rate risk

A. Nature: The group is a multinational electronic OEM company, and most of the exchange rate risks in its 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. Intensity

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:

~58~

	September 30,2023	September 30,2023	September 30,2023	September 30,2023
Foreign currency (thousand)	Exchange rate	Book value (NTD)	Sensitivityanalysis
			Range of change	Impact on profit and loss
$ 119,918 86,718 61,024 2,872 322,571 112,447 7,088 35,625	32.27 7.1798 4.6970 4.9357 32.27 32.27 7.1798 4.6970	$ 3,869,754 5% 2,748,858 5% 1,969,244 5% 97,390 5% 10,409,357 3,628,665 5% 224,681 5% 1,149,619 5% December 31,2022		$193,488 137,443 98,462 4,870 181,433 11,234 57,481
Foreign currency (thousand)	Exchange rate	Book value (NT$)	Sensitivityanalysis
			Range of change	Impact on profit and loss
$ 154,693 87,721 103,009 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

~59~

September 30, 2022

Foreign currency (thousand)	Exchange rate	Book value (NTD)	Sensitivityanalysis	Sensitivityanalysis
			Range of change	Impact on profit and loss
$ 133,736 50,927 52,274 6,108 337,376 128,817 8,863 48,832	31.75 7.0998 4.6361 4.5645 31.75 31.75 7.0998 4.6361	$ 4,246,118 1,617,309 1,659,700 190,936 10,711,683 4,089,940 281,466 1,550,416	5% 5% 5% 5% 5% 5% 5%	$212,306 80,865 82,985 9,547 204,497 14,073 77,521

D. Nature

The total amount of exchange gains and losses (including realized and unrealized) recognized on monetary accounts due to exchange rate fluctuations for the three months ended September 30, 2023 and 2022, and for the nine months ended September 30, 2023 and 2022, were NT$47,749 (gain), NT$64,743 (gain), NT$183,612 (gain), and NT$119,114 (gain), 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$18,935 and NT$17,555, respectively, for the nine months ended September 30, 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.

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(2) Credit risk
A. The credit risk of the Group is the risk of financial loss due to the failure of customers or counterparties of financial instrument transactions to fulfill their contractual obligations, which mainly comes from the inability of the counterparties repaying the accounts receivable in accordance with the collection conditions, and the contractual cash flow classified as debt instrument investment measured at afteramortization 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. When the contract payment is overdue for more than 90 days according to the agreed payment terms, the Group deems 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) are as follows:

Not Past Due Less than 90 days 91 ~ 180 days More than 181 days	September 30,2023	September 30,2023	September 30,2023	December 31,2022	December 31,2022	December 31,2022	September 30,2022	September 30,2022
			$ 7,358,621 11,496 494 39			$ 7,717,356 54,012 80 39		$ 6,989,612 9,272 361 4,497 $ 7,003,742
			$ 7,370,650			$ 7,771,487

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

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H. Other receivables (including related parties):
The Group’s other receivables are primarily tax refund receivables, receivables on disposal of investments, and receivables on advance payments for other parties. Expected credit loss are estimated individually for other significant receivables in default; there is no concern over material non-performance or non-repayment with other counterparties. Therefore, a loss allowance for 12-month expected credit loss is recognized. The allowances for loss recognized by the Group on September 30, 2023, December 31, 2022, and September 30, 2022 were NT$104,815, NT$$99,748 and NT$103,126, 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 September 30, 2023, December 31, 2022, and September 30, 2022 are as follows:

September 30,2023	Group1	Group2	Group3	Group4	Total
	0.04%	0.04%	0.09%	0.1%~100%	$ 7,370,650 $ 6,146 Total
Expected loss rate Total Book value Allowance for loss December 31,2022
	$6,971,222	$ 384,548	$ 49	$ 14,831
	$ 2,789	$ 154	$-	$ 3,203
	Group1	Group2	Group3	Group4
	0.04%	0.04%	0.09%	0.1%~100%	$ 7,771,487 $ 7,194 Total
Expected loss rate Total Book value Allowance for loss September 30,2022
	$7,336,321	$ 428,359	$-	$ 6,807
	$ 2,935	$ 171	$-	$ 4,088
	Group1	Group2	Group3	Group4
	0.04%	0.04%	0.09%	0.1%~100%	$ 7,003,742 $ 13,726
Expected loss rate Total Book value Allowance for loss
	$6,440,905	$ 548,386	$-	$ 14,451
	$ 2,576	$ 219	$-	$ 10,931

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:

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January 1 (Reversed) recognized impairment loss Effect on foreign currency exchange differences September 30	2023 $ 7,194 ( 234) ( 814) $ 6,146	2022 $ 11,607 1,933 186 $ 13,726

K. All the Group’s financial assets measured at after-amortization cost as of September 30, 2023, December 31, 2022 and September 30, 2022 had a low credit risk. Therefore, the book value is measured according to the expected credit loss in 12 months after the balance sheet date.
(3) Liquidity risk
A. The cash flow forecast is carried out by each operating entity within the Group and summarized by the Group’s finance department. The group’s finance department monitors the forecast of the group's liquidity funds demand to ensure that it has sufficient funds to meet operational needs, and maintains sufficient unspent loan commitments at all times so that the group will not exceed the relevant borrowing limits or violate the terms. These forecasts take into account the group's debt financing plan, compliance with debt terms, and compliance with the financial ratios in the internal balance sheet and external regulatory requirements, such as foreign exchange control.
B. When the remaining cash held by the Group exceeds the requirement for the management of working capital, the finance department will invest the remaining funds in interest-bearing demand deposits, time deposits, money market deposits, and securities. The instruments selected have appropriate maturities or sufficient liquidity to meet the forecast above and provide sufficient liquidity. It is expected that cash flow will be generated immediately for the management of liquidity risk.
C. The following table shows the grouping of the Group's non-derivative financial liabilities according to their maturity dates. The non-derivative financial liabilities are analyzed according to the remaining period from the balance sheet date to the contract maturity date. The amount of contractual cash flow disclosed in the table below is the undiscounted amount.

September 30, 2023 Non-derivative financial liabilities:	Less than 1year	1 ~ 2years	2 ~ 5years
	$ 57,767 Less than 1year	$ 37,207 1 ~ 2years	$ 38,687 2 ~ 5years
Lease liabilities December 31, 2022 Non-derivative financial liabilities:
	$ 95,184 Less than 1year	$ 42,958 1 ~ 2years	$ 57,847 2 ~ 5years
Lease liabilities September 30, 2022 Non-derivative financial liabilities:

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(III) Fair value information

The levels of evaluation techniques used to measure the fair value of financial and nonfinancial instruments are defined as follows:
Level 1: The quoted price (unadjusted) is available to the enterprise in an active market for the same assets or liabilities on the measurement date. An active market refers to a market in which assets or liabilities are traded in sufficient frequency and quantity to provide pricing information on an ongoing basis. The fair value of the listed and OTC stocks and beneficiary certificates invested by the Group belongs to this level.
Level 2: The input value of assets or liabilities is 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 is unobservable. The equity instruments invested by the Group without an active market belong to this level.
Financial instruments not measured at fair value

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

For the Group’s financial and non-financial instruments measured at fair value, the Group classifies them according to the nature, characteristics, risk, and fair value level of the assets and liabilities. The relevant information is as follows:
(1) The information about the Group’s classification of its assets and liabilities by their nature is as follows:

September 30, 2023 Financial assets: Repetitive fair value Financial assets at FVTPL -Open-end funds Financial assets at FVTOCI - Equity securities		Level 1		Level 2		Level 3		Total
		$ 10,774		$-		$-		$ 10,774 $ 1,893,535
		$ 935,050		$-		$ 958,485

~64~

Level 1	Level 2	Level 3	Total
$ 10,239	$-	$-	$ 10,239 $ 1,752,355 Total
$ 827,081	$-	$ 925,274
Level 1	Level 2	Level 3
$ 10,125	$-	$-	$ 10,125 $ 1,755,517
$ 864,278	$-	$ 891,239

(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.

~65~

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.
There was no transfer between Levels 1 and 2 during the nine months ended September 30, 2023 and 2022.
The following table shows the changes in level 3 during the nine months ended September 30, 2023 and 2022:

30, 2023 and 2022:
January 1 Profit (loss) recognized in other comprehensive income Effect on foreign currency exchange differences September 30	Equity securities 2023 2022
	$ 925,274 ( 10,146) 43,357	$ 785,661 603 104,975 $ 891,239
	$ 958,485

There was no transfer into or out of Level 3 during the nine months ended September 30, 2023 and 2022.
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.

~66~

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:

Fair value on September 30,2023	Evaluation techniques	Significant unobservable input value	Range (weighted average)	Relationship between input value and fair value
$ 896,335 62,150 Fair value on December 31,2022	Net asset value method Comparable public company approach Evaluation techniques	Lack of market liquidity discount Price–to- book ratio Lack of market liquidity discount Significant unobservable input value	24% 1.14 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
$ 856,726 68,548 Fair value on September 30,2022	Net asset value method Comparable public company approach Evaluation techniques	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
$ 820,454 70,785	Net asset value method Comparable public company approach	Lack of market liquidity discount Price–to- book ratio Lack of market liquidity discount	26% 1.34 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.

~67~

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

Financial assets	Period	Input value	Change	Recognized in other comprehensive income	Recognized in other comprehensive income
				Favorable change	Unfavorable change
Equity instruments Equity instruments Financial assets	September 30, 2023 September 30, 2023 Period	Lack of market liquidity discount Price–to-book ratio Input value	±1% ±1% Change	$ 3,657 ($ 3,657) $ 545 ($ 545) Recognized in other comprehensive income
				Favorable change	Unfavorable change
Equity instruments Equity instruments Financial assets	December 31, 2022 December 31, 2022 Period	Lack of market liquidity discount Price–to-book ratio Input value	±1% ±1% Change	$ 3,730 ($ 3,730) $ 531 ($ 531) Recognized in other comprehensive income
				Favorable change	Unfavorable change
Equity instruments Equity instruments	September 30, 2022 September 30, 2022	Lack of market liquidity discount Price–to-book ratio	±1% ±1%	$ 3,879 $ 528	($ 3,879) ($ 528)

==> picture [24 x 9] intentionally omitted <==

Additional Disclosures

(I) Information about significant transactions

Loans to others: Please refer to Table 1.
Endorsements/guarantees provided: Please refer to Table 2.
Marketable securities held at the end of the period (excluding investment in subsidiaries, affiliated enterprises and jointly controlled entities): Please refer to Table 3.
The cumulative amount of buying or selling the same securities reaches NT$300 million or more, or 20% of the paid-in capital: No such situation.
The cumulative amount of property acquired reaches NT$300 million or more, or 20% of the paid-in capital: No such situation.
The cumulative amount of property disposal reaches NT$300 million or more, or 20% of the paid-in capital: No such situation.
Total purchases from or sales to related parties amounting to at least NT$100 million or 20% of the paid-in capital or more: Please refer to Table 4.
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.
Engagement in derivatives trading: Please refer to note 6(2).
Significant Inter-company Transactions during the Reporting Period: Please refer to Table 6.

~68~

(II) Information about investees

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

(III) Information on investments in mainland China

Basic information: Please refer to Table 8.
Major transactions directly with investee companies in 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.

==> picture [25 x 9] intentionally omitted <==

Operating Departments Information

(I) General information

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

The 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:

July1 to September 30,2023	Electronic Components	Consumer Electronics and Computer Peripherals	Total
Segment Revenue Segment profit and loss July1 to September 30,2022
	$ 4,377,951 $ 277,881 Electronic Components	$ 2,507,423	$ 6,885,374 $ 515,902
		$ 238,021
		Consumer Electronics and Computer Peripherals	Total
Segment Revenue Segment profit and loss	$ 3,989,377 $ 414,452	$ 2,494,469	$ 6,483,846 $ 669,902
		$ 255,450

~69~

January 1 to September 30, 2023	Electronic Components	Electronic Components	Consumer Electronics and Computer Peripherals	Total
Segment Revenue Segment profit and loss January 1 to September 30, 2022		$ 11,491,385	$ 7,691,766 $ 559,878	$ 19,183,151 $ 1,464,917 Total
		$ 905,039
	Electronic Components		Consumer Electronics and Computer Peripherals
Segment Revenue Segment profit and loss		$ 10,282,406	$ 8,375,185 $ 607,767	$ 18,657,591 $ 1,538,668
		$ 930,901

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	July1	to September 30,2023	to September 30,2023	July1	to September 30,2022	to September 30,2022
Profit and loss of the segments to be reported Other profit and loss Pre-tax profit and loss of continuing operating departments Profit and loss	January	$ 515,902 ( 3,866) $ 512,036		January	$ 669,902 15,092 $ 684,994 1 to September 30,2022
		1 to September 30,2023			1
Profit and loss of the segments to be reported Other profit and loss Pre-tax profit and loss of continuing operating departments		$ 1,464,917 ( 45,417) $ 1,419,500				$ 1,538,668 ( 65,599) $ 1,473,069
			$ 1,419,500

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Pan-International Industrial Corp. and Subsidiaries Loans to others January 1 to September 30, 2023

Serial No. (note 1)	Table 1 Loan extending company	Borrower	Dealing items (note 2)	Whether a relatedparty	Maximum amount of the period (note 3)	Ending balance (note 8)	Transaction Amounts	Interest Rate	Loan nature (note 4)	Business Transaction Amounts (note 5)	Reason for short- term financing (note 6)	Provision for allowance for loss for bad debt	Colla	teral	Unit: NTD thousand (unless otherwise noted) Loans and limits for individual entities(note 7) Total loan limit (note 7) Remarks $ 8,451,742 $ 16,903,484	Unit: NTD thousand (unless otherwise noted) Loans and limits for individual entities(note 7) Total loan limit (note 7) Remarks $ 8,451,742 $ 16,903,484	Unit: NTD thousand (unless otherwise noted) Loans and limits for individual entities(note 7) Total loan limit (note 7) Remarks $ 8,451,742 $ 16,903,484
													Name	Value
1	Honghuasheng Precision Electronics (Yantai) Co., Ltd.	CJ Electric Systems Co., Ltd.	Other receivables - related parties	Yes	$ 266,700	$ 264,900	$ 264,900	3.65%	Short- term financing	$ -	Operating turnover	$ -	None.	None.	$ 8,451,742	$ 16,903,484

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.

Table 1 page 1

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Pan-International Industrial Corp. and Subsidiaries Endorsement/guarantee provided January 1 to September 30, 2023

Pan-International Industrial Corp. and Subsidiaries
Endorsement/guarantee provided
January 1 to September 30, 2023

Table 2
Serial
No.
(note 1)
Name of company of the
endorsement/guarantee

Unit: NTD thousand
(unless otherwise noted)
Guaranteed Party
Endorsement/
guarantee limit for
a single enterprise
(note 3)
Maximum
endorsement/
guarantee balance
of the period
(note 4)
Endorsement/
guarantee balance
of the period
(note 5)
Transaction
Amounts
(note 6)
Amount of
endorsement/
guarantee
backed by
assets
Ratio of the
cumulative
endorsement/
guarantee amount to
the net value in the
latest financial report
Endorsement/
guarantee limit
(note 3)
Endorsement/
guarantee from
the parent
company to
subsidiary
(note 7)
Endorsement/
guarantee from
subsidiary to
parent
company
(note 7)
Endorsement/
guarantee to
mainland
China (note
7)
Remarks
Companyname
Relation
(note 2)
PAN-
INTERNATIONAL
ELECTRONICS(M)
SDN.BHD.
2
$ 1,921,647
$ 1,239,426
$ 1,239,426
$ 399,416
$ -
9.30
$ 3,843,294
N
N
N
PAN-
INTERNATIONAL
WIRE&CABLE(M)
SDN.BHD.
2
1,921,647
93,062
93,062
4,191
-
0.70
3,843,294
N
N
N

1
P.I.E INDUSTRIAL
BERHAD
1
P.I.E INDUSTRIAL
BERHAD

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 total amount of external endorsements/guarantees shall not exceed 100% of the company's net value, and the limit of endorsements/guarantees for a single enterprise shall not exceed 50% of the net worth of the endorsements/guarantees.
The total amount of endorsements/guarantees provided by the Company and its subsidiaries to others shall not exceed 100% of the Company’s net value; the total amount of endorsements/guarantees by the Company and its subsidiaries to a single enterprise shall not exceed 50% of the Company's net worth.
The total amount of endorsements/guarantees provided by the company to a foreign subsidiary that the company, directly and indirectly, holds 100% of its voting shares shall not exceed 50% of the parent company's net worth, and the limit for an individual entity shall not exceed 20% of the parent company's net worth.
Note 4: The maximum balance of endorsements/guarantees for others in the current year.
Note 5: The amount approved by the board of directors’ meeting shall be filled in. However, if the board of directors’ meeting authorizes the chairman of the board to decide in accordance with 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.

Table 2 page 1

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Unit: NTD thousand (unless otherwise noted)

Pan-International Industrial Corp. and Subsidiaries

Marketable securities held at period end (excluding investment in subsidiaries, associates and jointly controlled entities). September 30, 2023

Table 3

HoldingCompanyName Type of marketable securities Name of marketable securities Pan-International Industrial Corp. Common share Innolux Corporation Pan-International Industrial Corp. Common share Syntrend Creative Park Co., Ltd. P.I.E. INDUSTRIAL BERHAD Open-end funds EASTSPRING INVESTMENTS ISLAMIC INCOME FUND P.I.E. INDUSTRIAL BERHAD Open-end funds AFFIN HWANG AIIMAN MONEY MARKET FUND I P.I.E. INDUSTRIAL BERHAD Open-end funds AFFIN HWANG USD CASH FUND Yann-Yang Investments Corp. Common share Lico Technology Corporation PAN GLOBAL HOLDING CO., LTD. Common share FSK HOLDINGS LIMITED PAN GLOBAL HOLDING CO., LTD. B share CYBERTAN TECHNOLOGY CORP.	Relationship with the Holding Company	Financial report Account	Period end Remar ks Number of shares/beneficiary certificates Book value Shares Ratio Fair value
	None. The largest shareholder of this company is the largest shareholder of Hon Hai Precision Industry Co., Ltd. None. None. None. None. The investment company is evaluated by the equity method; the same as the Company. The investment company is evaluated by the equity method; the same as the Company.	Financial assets measured at fair value through other comprehensive income - Non-current Financial assets measured at fair value through other comprehensive income - Non-current Financial assets measured at fair value through income - Current Financial assets measured at fair value through income - Current Financial assets measured at fair value through income - Current Financial assets measured at fair value through income - Non-current Financial assets measured at fair value through other comprehensive income - Non-current Financial assets measured at fair value through other comprehensive income - Non-current	71,106,472 $ 935,050 0.78 $ 935,050 12,831,500 62,150 5.23 62,150 23,476 87 - 87 542,486 2,090 - 2,090 255,538 8,597 1.87 8,597 3,400,000 - 2.73 - 50,400,000 27,816 17.50 27,816 28,498,993 868,519 10.46 868,519

Table 3 page 1

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Pan-International Industrial Corp. and Subsidiaries

Total purchases from or sales to related parties amounting to at least NT$100 million or 20% of the paid-in capital or more. September 30, 2023

Table 4

Unit: NTD thousand (unless otherwise noted)

Buyer/Seller	Related Party	Relation		Transaction	Details		Differences in transact those ofgeneral transact	ion terms from ions and reasons	Note/Accounts R	eceivable(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. Pan-International Industrial Corp. Pan-International Industrial Corp. Pan-International Industrial Corp. Pan-International Industrial Corp. Pan-International Industrial Corp. Pan-International Industrial Corp. Pan-International Industrial Corp. Pan-International Industrial Corp. Pan-International Industrial Corp. PAN-INTERNATIONAL ELECTRONICS(M) SDN.BHD. Pan-International Precision Electronic Co., Ltd. New Ocean Precision Component (Jiangxi) Co., Ltd. PAN-INTERNATIONAL ELECTRONICS(M) SDN.BHD. PAN-INTERNATIONAL ELECTRONICS(M) SDN.BHD. Tekcon Electronics Corporation Honghuasheng Precision Electronics (Yantai) Co., Ltd.	PAN-INTERNATIONAL ELECTRONICS (USA) INC. Hongfutai Precision Electronics (Yantai) Co., Ltd. Hongfujin Precision Industry (Yantai) Co., Ltd. Hongfujin Precision Industry (Wuhan) Co., Ltd. FIH (Hong Kong) Mobil Limited Foxconn Technology Co., Ltd. Hon Hai Precision Industry Co., Ltd. Honghuasheng Precision Electronics (Yantai) Co., Ltd. Pan-International Precision Electronic Co., Ltd. FOXCONN INTERCONNECT TECHNOLOGY LIMITED SHARP NORTH MALAYSIA SDN.BHD. Hong-qi Mechatronics (Anhui) Co., Ltd. FOXCONN INTERCONNECT TECHNOLOGY LIMITED Foxconn Technology Co., Ltd Hon Hai Precision Industry Co., Ltd. FOXCONN INTERCONNECT TECHNOLOGY LIMITED Shenzhen Fujun Material Science Co., Ltd.	Subsidiary of the Company’s indirect reinvestment Subsidiary of the indirect reinvestment of Hon Hai Precision Industry Co., Ltd. Subsidiary of the indirect reinvestment of Hon Hai Precision Industry Co., Ltd. Subsidiary of the indirect reinvestment of Hon Hai Precision Industry Co., Ltd. Subsidiary of the indirect reinvestment of Hon Hai Precision Industry Co., Ltd. Other related parties A company that evaluates the Company by the equity method Subsidiary of the Company’s indirect reinvestment Subsidiary of the Company’s indirect reinvestment Subsidiary of the indirect reinvestment of Hon Hai Precision Industry Co., Ltd. Other related parties Subsidiary of the indirect reinvestment of Hon Hai Precision Industry Co., Ltd. Subsidiary of the indirect reinvestment of Hon Hai Precision Industry Co., Ltd. Other related parties A company that evaluates the Company by the equity method Subsidiary of the indirect reinvestment of Hon Hai Precision Industry Co., Ltd. Subsidiary of the indirect reinvestment of Hon Hai Precision Industry Co., Ltd.	Sales Sales Sales Sales Sales Sales Sales Purchase Purchase Purchase Sales Sales Sales Purchase Purchase Purchase Purchase					No significant difference No significant difference No significant difference No significant difference No significant difference No significant difference No significant difference No significant difference No significant difference No significant difference No significant difference No significant difference No significant difference No significant difference No significant difference No significant difference No significant difference

Table 4 page 1

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Table 5

Unit: NTD thousand (unless otherwise noted)

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. September 30, 2023

CompanyName	Related Party	Relation	Balance of accounts receivable from relatedparties(Note 1)	Turnover Rate	O	verdue	Accounts receivable from related parties recovered after the period
					Amount	Actions Taken
		Subsidiary of the indirect reinvestment of Hon Hai Precision Industry Co., Ltd. Subsidiary of the indirect reinvestment of Hon Hai Precision Industry Co., Ltd. A company that evaluates the company by the equity method Other related parties The Company’s parent company The Company’s parent company Other related parties Subsidiary of the indirect reinvestment of Hon Hai Precision Industry Co., Ltd.	$ 246,697 2.45 158,976 2.36 1,084,189 3.33 124,933 2.92 1,814,605 3.10 192,530 4.70 901,156 3.86 530,584 1.98		$ - Payment received after the period - Payment received after the period 54 Payment received after the period 79 Payment received after the period - Payment received after the period - Payment received after the period 15,367 Payment received after the period - Payment received after the period

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.

Table 5 page 1

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Unit: NTD thousand (unless otherwise noted)

Pan-International Industrial Corp. and Subsidiaries Significant Inter-company Transactions during the Reporting Period September 30, 2023

Table 6

Serial No. (note 1)	Transaction Company	Counterparty	Relationship with the transactionparties(Note 2)		Description of Transa	ctions(note 4 and note 7)
				Account	Amount	Transaction Terms	Percentage over consolidated total revenue or total assets (note 3)
0 0 0 1 2	Pan-International Industrial Corp. Pan-International Industrial Corp. Pan-International Industrial Corp. Pan-International Precision Electronic Co., Ltd. Honghuasheng Precision Electronics (Yantai) Co., Ltd.	Honghuasheng Precision Electronics (Yantai) Co., Ltd. Pan-International Precision Electronic Co., Ltd. PAN-INTERNATIONAL ELECTRONICS (USA) INC. Pan-International Industrial Corp. Pan-International Industrial Corp.	1 1 1 2 2	Purchase Purchase Sales Accounts receivable Accounts receivable	$ 3,789,699 Note 5 629,623 Note 5 289,830 Note 5 192,530 Note 5 1,814,605 Note 5		20 3 2 1 7

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: Transaction prices are negotiated and the collection period is monthly settlement 90 days.

Note 6: 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.

Table 6 page 1

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Pan-International Industrial Corp. and Subsidiaries

The name and location of the investee company and other relevant information (excluding mainland China investee companies) January 1 to September 30, 2023

Table 7

Unit: NTD thousand (unless otherwise noted)

Investor	Investor Company	Location	Main Businesses and Products	Original Inves	tment 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-International Industrial Corp. Pan-International Industrial Corp. Yann-Yang Investments Corp. PAN GLOBAL HOLDING CO., LTD. PAN GLOBAL HOLDING CO., LTD. PAN GLOBAL HOLDING CO., LTD. PAN GLOBAL HOLDING CO., LTD. PAN GLOBAL HOLDING CO., LTD. Tekcon Electronics Corporation PAN-INTERNATIONAL ELECTRONICS (MALASIA) SDN. BHD.	PAN GLOBAL HOLDING CO., LTD. PAN-INTERNATIONAL ELECTRONICS INC. Yann-Yang Investments Corp. Tekcon Electronics Corporation P.I.E. INDUSTRIAL BERHAD (PIB) BEYOND ACHIEVE ENTERPRISES LTD. (BAE) TEAM UNION INTERNATIONAL LTD. (TUI) EAST HONEST HOLDINGS LIMITED (EHH) LONG TIME TECH. CO., LTD. LONG TIME TECH. CO., LTD. PAN-INTERNATIONAL CORPORATION (S) PTE. LIMITED. (PIS)	The British Virgin Islands USA Taiwan Taiwan Malaysia The British Virgin Islands Hong Kong Hong Kong Taiwan Taiwan Singapore	Holding company Sale of electronic products Investment company Manufacturing and sale of connectors for electronic signal cables Holding company Holding company Holding company Holding company Electronic Components Electronic Components Manufacturing and sale of connectors for electronic signal cables

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 Dongguan Pan-International Precision Electronics Co., Ltd. indirectly through TUI. Please refer to Table 8 for details on the disclosure of information about the investment in the mainland China. Note 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.

Table 7 page 1

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Pan-International Industrial Corp. and Subsidiaries Mainland China investment information - Basic information January 1 to September 30, 2023

Table 8

Unit: NTD thousand (unless otherwise noted)

Name of the investee in mainland China	Main Businesses and Products	Paid-in Capital	Method of Investments (Note 2)	Cumulative outward remittance of investment amount from Taiwan at the beginning of the period	Investmen current	t Flows of period	Cumulative outward remittance of the investment amount from Taiwan in the period end	Net income (loss) of the Investee for currentperiod	% Ownership of Direct or Indirect Investment	Investment gains and losses recognized in the current period (note 3)	Book value of the investment at the end of theperiod	Investment gains repatriated as of the end of the period	Remarks
					Outward	Inward
Pan-International Precision Electronic Co., Ltd. Fuyu properties (Shanghai) Co., Ltd. New Ocean Precision Component (Jiangxi) Co., Ltd. Honghuasheng Precision Electronics (Yantai) Co., Ltd.	Manufacturing and sale of wires, cables, connecting wires, connecting wire connectors, and wire plugs. Engaging in the e-commerce business of industrial design, other specialized design services, car rental, retail of other commodities, sale of computer and peripheral equipment and software, retail of communication equipment, retail of audio-visual equipment, retail of spare parts and supplies for locomotives, and e- commerce of retail goods and equipment above. Manufacturing and operation of various types of plugs and sockets and telecommunications. Production and sale of hard single (double) side printed circuit boards, hard multi- layer printed circuit boards, flexible multi-layer printed circuit boards, and other printed circuit boards					$ - - - -							Note 6 Note 8 Note 4

Table 8 page 1

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The cumulative amount of outward remittance In compliance with the investment limit stipulated of investment from Taiwan to mainland China Investment amount approved by the by the Investment Commission, MOEA for Company name at the end of the period (notes 5 and 6) Investment Commission, MOEA investment in mainland China. (note 7). Pan-International Industrial Corp. $ 4,575,596 $ 6,597,259 $ -

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 September 30, 2023:

approved by the Investment Commission, MOEA was USD 107,217 thousand. Note 5: The following are the investment withdrawal cases approved by the Investment Commission, MOEA as of September 30, 2023:	approved by the Investment Commission, MOEA was USD 107,217 thousand. Note 5: The following are the investment withdrawal cases approved by the Investment Commission, MOEA as of September 30, 2023:
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.	USD 91 thousand 476 thousand 190 thousand 454 thousand 58 thousand USD 1,269 thousand

Because these reinvestment companies suffer losses, the amount of investment originally remitted from Taiwan cannot offset the amount of investment in mainland China.
Note 6: In November 2011, the Company was granted a document, IC(II) No. 10000518690 by the Investment Commission, MOEA, that approved the rescission of the unexecuted investment amount of US$500 thousand for Dongguan Pan-International Precision Electronics Co., Ltd.
On October 30, 2014, the Company was granted a document, IC(II) No. 10300233110 by the Investment Commission, MOEA that approved the transferring of Cyberport Digital Tech (Qingdao) Co., Ltd, and 42 other companies to Le Zhiwan Ranch Holding Investment Ltd. (Samoa);

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

Note 7: The Company received a letter from the Industrial Development Bureau, MOEA referenced Jing-Shou-Gong-Zi No.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 properties (Shanghai) Co., Ltd. was indirectly disposed of. As of September 30, 2023, the Company indirectly held 16.87% of Class B shares of its reinvestment business Fuyu properties (Shanghai) Co., Ltd.

Table 8 page 2

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Pan-International Industrial Corp. and Subsidiaries Information on major shareholders

September 30, 2023

Table 9

September 30, 2023 Table 9
Name of major shareholders	Sha	re Shares Ratio 20.79%
	Number of shares held 107,776,254
Hon Hai Precision Industry Co., Ltd.

Note 1: The information of major shareholders in this table is based on the information from the Central Depository on the last business day at the end of each quarter, covering shareholders holding more than 5% of the company’s common and special shares that have completed scriptless registration (including treasury shares). The share capital reported in the financial report and the actual number of shares that have completed the scriptless registration may be different due to differences in the basis of compilation and calculation.

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

Note 3: The preparation principle of this table is to calculate the distribution of the balance of each credit transaction based on the shareholders’ register on the book-close day of the extraordinary shareholders' meeting (short-sale securities are not purchased back). Note 4: Shareholding ratio (%) = total number of shares held by the shareholder/total number of shares that have completed scriptless registration. Note 5: The total number of shares (including treasury shares) that have completed scriptless registration is 518,346,282 shares = 518,346,282 (common shares) + 0 (special shares).

Table 9 page 1

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AI assistant

PI — Interim / Quarterly Report 2023

52009_rns_2023-12-22_d24216df-b54a-45d5-ba43-fa0d7549e0f8.pdf

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

Pan-International Industrial Corp. and Subsidiaries

CONSOLIDATED FINANCIAL STATEMENTS AND REVIEW REPORT OF INDEPENDENT ACCOUNTANTS 3[rd] QUARTER IN 2023 AND 2022 Table of Contents

To Pan-International Industrial Corp.

Foreword

Scope

Basis for Qualified Conclusion

Conclusion

Other item - Review by Other Independent Auditors

Pan-International Industrial Corp. and Subsidiaries Consolidated Balance Sheets September 30, 2023, December 31, 2022, and September 30, 2022

Pan-International Industrial Corp. and Subsidiaries Consolidated Balance Sheets September 30, 2023, December 31, 2022, and September 30, 2022

Pan-International Industrial Corp. and Subsidiaries Consolidated Statements of Comprehensive Income For the nine months ended September 30, 2023 and 2022

Pan-International Industrial Corp. and Subsidiaries Consolidated Statements of Comprehensive Income For the nine months ended September 30, 2023 and 2022

Pan-International Industrial Corp. and Subsidiaries Consolidated Statement of Changes in Shareholders Equity

For the nine months ended September 30, 2023 and 2022

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

For the nine months ended September 30, 2023 and 2022

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

Organization and operations

The Authorization of Financial Reports

Application of Newly Released and Revised Standards and Interpretations

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

Summary of Significant Accounting Policies

(I) Statement of compliance

(II) Basis of preparation

(III) Basis of consolidation

2. Subsidiaries listed in the consolidated financial reports:

Balance sheet

Comprehensive Income Statement

(IV) Foreign exchange conversion

(VI) Cash equivalents

(VII) Financial assets at FVTPL

(VIII) Financial assets at FVTOCI

(IX) Financial assets measured at after-amortization cost

(X) Accounts and notes receivable

(XI) Impairment of financial assets

(XII) Derecognition of financial assets

(XIII) Lessor’s lease transaction - Operating lease

(XIV) Inventory

- (XV) Investment by equity method Affiliated enterprises

(XVI) Property, plant, and equipment

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

(XVIII) Investment property

(XIX) Intangible asset

(XX) Impairment of non-financial assets

(XXI) Borrowings

(XXII) Notes payable and accounts payable

(XXIV) Derecognition of financial liabilities

(XXV) The offset of financial assets and liabilities

(XXVI) Non-hedging derivatives and embedded derivatives

(XXVIII) Income tax

(XXIX) Dividend distribution

(XXX) Revenue recognition

(XXXI) Government subsidy

(XXXII) Operation departments

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

(I) Important judgment for accounting policy adoption

Notes to Important Account Items

(I) Cash and cash equivalents

(II) Financial assets at FVTPL

(III) Financial assets measured at after-amortization cost

(IV) Notes and accounts receivable

(V) Inventory

(VII) Investment by equity method

(VIII) Property, plant, and equipment

(X) Investment property

(XI) Intangible asset

(XII) Short-term borrowings

(XIII) Other payables

(XIV) Pension

(XV) Share capital

(XVI) Capital surplus

(XVII) Retained earnings

(XVIII) Other items of equity

(XIX) Non-controlling interests

Contractual liabilities

(XXII) Other gains and losses

PI Interim / Quarterly Report 2023