Panjit International : 2023Q2 CONSOLIDATED FINANCIAL STATEMENT

PANJIT INTERNATIONAL INC. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

WITH REPORT OF INDEPENDENT ACCOUNTANTS

FOR THE SIX-MONTH PERIODS ENDED 30 JUNE 2023 AND 2022

Address: No.24, Gangshan N. Rd., Gangshan Dist., Kaohsiung City, Taiwan, R.O.C.

Telephone: [phone]

The reader is advised that these financial statements have been prepared originally in Chinese. In the event of a conflict between these financial statements and the original Chinese version or difference in interpretation between the two versions, the Chinese financial statements shall prevail.

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Review Report of Independent Accountants

To: PANJIT INTERNATIONAL INC.

Introduction

We have reviewed the accompanying consolidated balance sheets of PANJIT INTERNATIONAL INC. (the "Company") and its subsidiaries as of 30 June 2023 and 2022, the related consolidated statements of comprehensive income for the three-month and six-month periods ended 30 June 2023 and 2022 and consolidated statements of changes in equity and cash flows for the six-month periods ended 30 June 2023 and 2022, and notes to the consolidated financial statements, including the summary of significant accounting policies (together "the consolidated financial statements"). Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34, "Interim Financial Reporting" as endorsed and became effective by Financial Supervisory Commission of the Republic of China. Our responsibility is to express a conclusion on these consolidated financial statements based on our reviews.

Scope of Review

Except as explained in the following paragraph, we conducted our reviews in accordance with Statement of Auditing Standards No. 2410, "Review of Financial Statements". A review of consolidated financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with auditing standards generally accepted in the Republic of China and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Basis for Qualified Conclusion

As explained in Note 4, the financial statements of certain insignificant subsidiaries were not reviewed by independent accountants. Those statements reflected total assets of NT$4,516,682 thousand and NT$4,635,809 thousand, constituting 16% and 15% of the consolidated total assets, and total liabilities of NT$871,629 thousand and NT$1,255,713 thousand, constituting 6% and 8% of the consolidated total liabilities as of 30 June 2023 and 2022, respectively; and total comprehensive income of NT$209,260 thousand, NT$151,031 thousand, NT$223,196 thousand and NT$528,079 thousand, constituting 64% , 29%, 36% and 37% of the consolidated total comprehensive income for the three-month and six-month periods ended 30 June 2023 and 2022, respectively. As explained in Note 6. (8), the financial statements of certain associates and joint ventures accounted for under the equity method were not reviewed by independent accountants. Those associates and joint ventures under equity method amounted to NT$137,566 thousand and NT$125,894 thousand as of 30 June 2023 and 2022, respectively. The related shares of profits from the associates and joint ventures under the equity method amounted to (NT$970) thousand, (NT$4,069) thousand, (NT$1,932) thousand and (NT$7,653) thousand for the three-month and six-month periods ended 30 June 2023 and 2022,

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respectively. The information related to above subsidiaries, and associates and joint ventures accounted for under the equity method disclosed in Note 13 was also not reviewed by independent accountants.

Qualified Conclusion

Based on our reviews and the review reports of other independent accountants (please refer to the Other Matter paragraph of our report), except for the effect of such adjustments, if any, as might have been determined to be necessary had the financial statements of certain insignificant subsidiaries, associates and joint ventures accounted for using equity method and the information been reviewed by independent accountants described in the preceding paragraph, nothing has come to our attention that causes us to believe that the accompanying consolidated financial statements do not present fairly, in all material respects, the consolidated financial position of the Company and its subsidiaries as at 30 June 2023 and 2022, and their consolidated financial performance for the three-month and six- month periods ended 30 June 2023 and 2022, and their consolidated cash flows for the six-month periods ended 30 June 2023 and 2022, in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34, "Interim Financial Reporting" as endorsed and became effective by Financial Supervisory Commission of the Republic of China.

Other Matter - Making Reference to the Reviews of Other Independent Accountants

We did not review the financial statements of certain investment accounted for under the equity method, which reflected the associates and joint ventures under equity method in the amount of NT1,499,505 thousand and NT$1,667,510 thousand, constituting 5% and 6% of consolidated total assets as of 30 June 2023 and 2022, and the related shares of profits from the associates and joint ventures under the equity method of NT$32,062 thousand, NT$41,432thousand, NT$26,993 thousand, and NT$53,511 thousand, constituting 8%, 7%,4% and 4% of consolidated pretax income for the three-month and six-month periods ended 30 June 2023 and 2022, respectively. Those financial statements were reviewed by other independent accountants, whose reports thereon have been furnished to us, and our review results are based solely on the reports of the other independent accountants.

Ernst & Young Taiwan

Aug 8, 2023

Notice to Readers

The accompanying parent company only financial statements are intended only to present the parent company only financial position, results of operations and cash flows in accordance with accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to review such parent company only financial statements are those generally accepted and applied in the Republic of China.

Accordingly, the accompanying parent company only financial statements and report of independent accountants are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic of China, and their applications in practice. As the financial statements are the responsibility of the management, Ernst & Young cannot accept any liability for the use of, or reliance on, the English translation or for any errors or misunderstandings that may derive from the translation.

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PANJIT INTERNATIONAL INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

June 30, 2023, December 31, 2022, and June 30, 2022

(Expressed in Thousand of New Taiwan Dollars)

Asset	Note		June 30, 2023				December 31, 2022				June 30, 2022
	Amount			%			Amount			%			Amount			%
Current asset
Cash and cash equivalents	6(1)		$2,121,069				7		$3,033,568				10		$2,319,068				8
Financial assets at fair value through profit or loss - current	6(2)		2,684,458				9		2,993,980				10		3,838,512				13
Notes receivable, net	6(5),(21)		753,277				3		352,859				1		802,036				3
Trade receivable, net	6(6),(21)		3,781,588				13		3,360,160				12		4,175,344				14
Trade receivable-related parties, net	6(6), (21)/7		45,667				-		56,700				-		105,496				-
Other receivables, net			677,040				2		146,057				-		150,962				-
Other receivables-related parties, net	7		10,807				-		3,352				-		5,217				-
Inventories, net	6(7)		3,282,615				12		3,754,265				13		3,416,636				11
Prepayments			507,755				2		758,487				3		504,087				2
Other current assets	8		128,837				1			150,376				1			309,000				1
Total current assets			13,993,113				49		14,609,804				50		15,626,358				52
Non-current assets
Financial assets at fair value through profit or loss - non-current	6(2)		38,071				-		37,485				-		23,708				-
Financial assets at fair value through other comprehensive income - non-current	6(3)		535,763				2		521,889				2		1,368,452				5
Financial assets measured at amortized cost-Non-current	6(4)		27,442				-		26,622				-		25,324				-
Investments accounted for using the equity method	6(8)		1,954,355				7		2,038,347				7		2,052,495				7
Property, Plant, and Equipment	6(9)		7,726,817				27		7,411,293				25		6,184,681				21
Right-of-use assets	6(22)		1,264,079				4		1,296,176				5		1,288,372				4
Intangible assets	6(10),(11)		1,640,254				6		1,661,358				6		1,619,573				5
Deferred tax assets			360,548				1		350,643				1		427,477				1
Prepayment for equipments			127,684				1		443,341				2		883,381				3
Refundable deposits	8		533,137				2		637,470				2		651,795				2
Other non-current assets, others	8		134,805				1			132,418				-			100,856				-
Total non-current assets			14,342,955				51			14,557,042				50			14,626,114				48
Total assets			$28,336,068				100		$29,166,846				100		$30,252,472				100

(The accompanying notes are an integral part of the consolidated financial statements.)

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PANJIT INTERNATIONAL INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

June 30, 2023, December 31, 2022, and June 30, 2022

(Expressed in Thousand of New Taiwan Dollars)

Liabilities and equity	Note		June 30, 2023				December 31, 2022				June 30, 2022
	Amount			%			Amount			%			Amount			%
Current Liabilities
Short-term borrowings	6(12)		$2,184,969				8		$2,769,949				10		$4,221,852				14
Financial liabilities at fair value through profit or loss - current	6(13)		8,115				-		-				-		126				-
Contractual liabilities - current	6(20)		19,737				-		10,041				-		8,879				-
Notes payable	6(14)		468,393				2		605,905				2		823,751				3
Trade payable			1,268,281				4		1,417,681				5		1,897,850				6
Trade payable-related parties	7		42,582				-		59,068				-		143,684				1
Other payables			2,516,949				9		1,742,971				6		2,563,150				8
Other payables - related parties	7		36,810				-		37,903				-		38,146				-
Current tax liabilities			278,840				1		295,814				1		364,330				1
Lease liabilities - current	6(22) / 7		51,263				-		52,735				-		48,093				-
Long-term borrowings, current portion	6(16) / 8		507,000				2		478,875				2		247,834				1
Other current liabilities			122,968				1			76,945				-			24,844				-
Total current liabilities			7,505,907				27		7,547,887				26		10,382,539				34
Non-current Liabilities
Long-term borrowings	6(16) / 8		5,988,875				21		6,033,741				21		4,872,462				16
Deferred tax liabilities			99,944				1		91,895				-		83,686				-
Lease liabilities - non-current	6(22) / 7		296,191				1		321,641				1		334,094				1
Long-term deferred revenue	6(15)		88,616				-		98,807				-		107,721				1
Defined benefit liabilities-non-current			62,834				-		66,945				-		93,670				-
Other non-current liabilities			95,052				-			96,695				-			106,180				1
Total non-current liabilities			6,631,512				23		6,709,724				22		5,597,813				19
Total liabilities			14,137,419				50		14,257,611				48		15,980,352				53
Equity attributable to the parent company
Capital stock
Common stock	6(18)		3,821,149				14		3,828,149				13		3,828,149				13
Capital surplus	6(18)		6,005,745				21		6,016,861				21		5,985,455				20
Retained earnings	6(18)
Legal reserve			729,336				3		505,733				2		505,733				1
Special reserve			717,237				2		717,237				2		717,237				2
Unappropriated earnings			2,194,228				8			3,116,721				11			2,100,025				7
Total retained earnings			3,640,801				13			4,339,691				15			3,322,995				10
Other components of equity			(565,085)				(2)		(552,617)				(2)		(88,681)				-
Treasury stock	6(18)		-				-			(16,507)				-			(16,507)				-
Equity attributable to owners of the parent company			12,902,610				46			13,615,577				47			13,031,411				43
Non-controlling interests	6(18)		1,296,039				4			1,293,658				5			1,240,709				4
Total equity			14,198,649				50		14,909,235				52		14,272,120				47
Total liabilities and equity			$28,336,068				100		$29,166,846				100		$30,252,472				100

(The accompanying notes are an integral part of the consolidated financial statements.)

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