SYSCOM — Annual Report 2023

Dec 22, 2023

Stock Code: 2453

SYSCOM COMPUTER ENGINEERING CO.

Parent Company Only Financial Statements for the Years Ended December 31, 2023 and 2022 and Independent Auditors’ Report

Address: 6th Floor, No. 115, Emei Street, Wanhua District, Taipei City TEL: (02)2191-6066

The independent auditors’ report and the accompanying parent company only financial statements are the English translation of the Chinese version prepared and used in the Republic of China.

If there is any conflict between, or any difference in the interpretation of the English and Chinese language independent auditors’ report and parent company only financial statements, the Chinese version shall prevail.

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§ Table of Contents §

§ Table of Contents §
Item Page 1. Cover 1 2. Table of Contents 2 3. Independent Auditors’ Report 3～6 4. Parent Company Only Balance Sheets 7 5. Parent Company Only Statements of Comprehensive Income 8～9 6. Parent Company Only Statements of Changes in Equity 10 7. Parent Company Only Statements of Cash Flows 11～12 8. Notes to Parent Company Only Financial Statements (1) General 13 (2) The Date and Procedures of Authorization of Financial Statements 13 (3) Application of New and Revised Standards and Interpretations 13～14 (4) Summary of Significant Accounting Policies 14～23 (5) Critical Accounting Judgments and Key Sources of Estimation and Uncertainty 23 (6) Explanation of Significant Accounts 23～45 (7) Related Parties Transactions 45～47 (8) Assets Pledged as Collateral 47 (9) Significant Contingent Liabilities and Unrecognized Contract Commitments 47 (10) Significant Disaster Loss - (11) Significant events after the Balance Sheet Date - (12) Other Matters - (13) Significant Assets and Liabilities Denominated in Foreign Currencies 47～48 (14) Separately Disclosed Items A. Information on Significant Transactions 48~49、50～51 B. Information on investees 49、52 C. Information on investments in Mainland China 49、53 D. Information on major shareholders 49、54 9. List of major account tiles 55	Notes to Financial Statements
	- - - - - - - 1 2 3 4 5 6~24 25 26 27 - - - 28 29 29 29 29 -

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INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Shareholders Syscom Computer Engineering Company

Opinion

We have audited the accompanying financial statements of Syscom Computer Engineering Company (the “Company”), which comprise the balance sheets as of December 31, 2023 and 2022, and the statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the financial statements, including a summary of significant accounting policies.

In our opinion, based on our audits and the reports of other auditors (refer to Other Matter section), the accompanying financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and its financial performance and its cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and the Standards on Auditing of the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with The Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. Based on our audits and the reports of other auditors, we believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements for the year ended December 31, 2023. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key audit matters of the financial statements of the Company for the year ended December 31, 2023 are stated as follows:

Recognition of Contract Revenue

The Company generates revenue through rendering of services according to contract. Revenue from contract is recognized by reference to the stage of completion of contract activity. The stage of completion of the contract is measured based on the proportion of contract cost incurred for work performed to date relative to the estimated total contract cost. The management estimates total contract cost upon signing of the contract. However, the estimated total cost may change as the contract activity progresses and such change may have material impact on revenue recognition;

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therefore, the recognition of contract revenue is deemed to be a key audit matter.

We focused on the measurement of stage of completion while testing the recognition of contract revenue. The procedures we performed are the following:

1. We examined the underlying documents of original contract and related addendum used as basis for contract revenue recognized.

2. We verified the accuracy of accumulated incurred cost through test of details.

3. We assessed the appropriateness of underlying information and assumptions the management used in estimating total cost.

4. We performed retrospective review of discrepancy between actual costs incurred and estimated total cost of completed contract.

Please refer to Notes 4 and 5 to the accompanying financial statements for related disclosure on revenue recognition.

Other Matter

The financial statements as of and for the years ended December 31, 2023 and 2022 of some investees in which the Company had equity-method investments were audited by other auditors. Our opinion, insofar as it relates to the amounts included in the accompanying financial statements for these investees, is based solely on the reports of the other auditors. As of December 31, 2023 and 2022, the aforementioned investments accounted for using equity method amounted to NT$202,135 thousands and NT$203,541 thousands, which were 4% and 5% of total assets of the Company. For the years ended December 31, 2023 and 2022, investment loss from the aforementioned equity-method investments amounted to NT$1 thousands and NT$2,371 thousands, which represented 0% and (0.8%) of the profit before income tax of the Company.

Responsibilities of Management and Those Charged with Governance for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance, including the Audit Committee, are responsible for overseeing the Company’s financial reporting process.

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Auditors’ Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Standards on Auditing of the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with the Standards on Auditing of the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

1. Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

2. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.

3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

4. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Company to cease to continue as a going concern.

5. Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

6. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the financial statements. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

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We also provide those charged with governance with statements that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements for the year ended December 31, 2023 and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audit resulting in this independent auditors’ report are Li-Wen Kuo and Pei-De Chen.

Deloitte & Touche Taipei, Taiwan Republic of China March 12, 2024

Notice to Readers

The accompanying financial statements are intended only to present the financial position, financial performance 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 audit such financial statements are those generally applied in the Republic of China.

For the convenience of readers, the independent 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. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language independent auditors’ report and financial statements shall prevail.

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SYSCOM COMPUTER ENGINEERING CO. BALANCE SHEETS

DECEMBER 31, 2023 AND 2022

(In Thousands of New Taiwan Dollars)

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December 31, 2023 December 31, 2022
Code ASSETS Amount ％ Amount ％
CURRENT ASSETS
1100 Cash and cash equivalents (Notes 4 and 6) $ 732,897 16 $ 446,088 11
1110 Financial assets at fair value through profit or loss - current (Notes 4
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and 7) 10,000 19,505
1136 Financial assets at amortized cost - current (Notes 4, 9 and 26) 184,678 4 164,382 4
1140 Contract assets - current (Notes 4 and 19) 471,815 10 478,405 11
1150 Notes receivable (Note 4) 8,831 - 2,299 -
1172 Accounts receivable (Notes 4, 10, and 25) 1,336,959 28 1,394,927 33
1200 Other receivables (Note 4) 5,578 - 5,103 -
130X Inventories (Notes 4 and 11) 456,133 10 421,379 10
1410 Prepayments 411,779 9 376,022 9
1479 Other current assets 88,970 2 118,551 3
11XX Total current assets 3,707,640 79 3,426,661 81
NON-CURRENT ASSETS
1517 Financial assets at fair value through other comprehensive income -
non-current (Notes 4 and 8) 33,026 1 25,737 1
1535 Financial assets at amortized cost - non-current (Notes 4, 9, and 26) 197,630 4 128,829 3
1550 Investments accounted for using the equity method (Notes 4 and 12) 269,993 6 273,059 6
1600 Property, plant and equipment (Notes 4, 13, and 25) 336,501 7 328,345 8
1755 Right-of-use assets (Notes 4 and 14) 81,661 2 3,481 -
1821 Intangible assets (Notes 4 and 15) 392 - 492 -
1840 Deferred tax assets (Notes 4 and 21) 9,606 - 11,643 -
1990 Other non-current assets (Note 4) 53,655 1 46,808 1
15XX Total non-current assets 982,464 21 818,394 19
1XXX TOTAL $ 4,690,104 100 $ 4,245,055 100
Code LIABILITIES AND EQUITY
CURRENT LIABILITIES
2130 Contract liabilities - current (Notes 4 and 19) $ 455,424 10 $ 220,867 5
2150 Notes payable 131 - 16,026 -
2170 Accounts payable (Note 25) 1,443,177 31 1,390,693 33
2200 Other payables (Note 16) 397,340 9 366,124 9
2230 Current tax liabilities 17,509 - 30,344 1
2280 Lease liabilities - current (Notes 4, 14 and 25) 41,048 1 2,069 -
2399 Other current liabilities 17,379 - 14,017 -
21XX Total current liabilities 2,372,008 51 2,040,140 48
NON-CURRENT LIABILITIES
2572 Deferred tax liabilities (Notes 4 and 21) 9,614 - 10,416 -
2580 Lease liabilities - non-current (Notes 4, 14 and 25) 41,490 1 1,479 -
2640 Net defined benefits liabilities - non-current (Notes 4 and 17) 43,419 1 54,503 1
2645 Guarantee deposits received 14,532 - 17,291 1
2670 Other non-current liabilities (Note 12) 94,834 2 71,381 2
25XX Total non-current liabilities 203,889 4 155,070 4
2XXX Total liabilities 2,575,897 55 2,195,210 52
Equity (Notes 4 and 18)
3100 Share capital - ordinary shares 1,000,000 21 1,000,000 23
3200 Capital surplus 1,797 - 1,547 -
Retained earnings
3310 Legal reserve 330,483 7 303,977 7
3320 Special reserve 17,619 1 17,619 1
3350 Unappropriated earnings 752,580 16 722,955 17
3300 Total retained earnings 1,100,682 24 1,044,551 25
3400 Other equity 11,728 - 3,747 -
3XXX Total equity 2,114,207 45 2,049,845 48
TOTAL $ 4,690,104 100 $ 4,245,055 100
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The accompanying notes are an integral part of the financial statements. (With Deloitte & Touche auditors’ report dated March 12, 2024)

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SYSCOM COMPUTER ENGINEERING CO.

STATEMENTS OF COMPREHENSIVE INCOME

FOR THE YEARS ENDED DECEMBER 31,2023 AND 2022

(In Thousands of New Taiwan Dollars, Except Earnings Per Share)

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2023 2022
Code Amount ％ Amount ％
OPERATING REVENUE (Notes 4,
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Code OPERATING REVENUE (Notes 4,	2023 Amount		％	2022 Amount		％
5, 19, and 25) 4100 Sales 4600 Maintenance revenue 4300 Rental revenue 4000 Total operating revenue OPERATING COSTS (Notes 4, 11, 20, and 25) 5110 Cost of goods sold 5600 Maintenance costs 5300 Rental costs 5000 Total operating costs 5900 GROSS PROFIT OPERATING EXPENSES (Notes 10, 17, 20, and 25) 6100 Selling and marketing expenses 6300 Research and development expenses 6450 Expected credit loss recognized on trade receivables 6000 Total operating expenses 6900 PROFIT FROM OPERATIONS NON-OPERATING INCOME AND EXPENSES (Note 4) 7100 Interest income (Note 20) 7010 Other income (Notes 20 and 25) 7020 Other gains and losses (Note 20) 7050 Finance costs (Notes 20 and 25) ( 7070 Share of profit or loss of subsidiaries, associates and joint ventures (Note 12) ( 7000 Total non-operating income and expenses	$ 4,666,572 1,431,116 17,731 6,115,419 3,531,049 1,019,247 14,185 4,564,481 1,550,938 1,047,139 204,962 - 1,252,101 298,837 7,535 52,367 856 2,810 ) 25,684) 32,264		76 24 - 100 58 17 - 75 25 17 3 - 20 5 - 1 - ( - ( - ( 1	$ 4,328,914 1,327,885 17,880 5,674,679 3,280,653 962,166 14,457 4,257,276 1,417,403 936,247 189,458 - 1,125,705 291,698 2,904 60,806 9,085 ) 313 ) 36,358) 17,954	(	76 24 - 100 58 17 - 75 25 17 3 - 20 5 - 1 - - 1 ) -

(Continued)

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2023 2022
Code Amount ％ Amount ％
7900 PROFIT BEFORE INCOME TAX $ 331,101 6 $ 309,652 5
7950 INCOME TAX EXPENSE (Notes 4 and
21) 52,808 1 58,922 1
8200 NET PROFIT FOR THE YEAR 278,293 5 250,730 4
OTHER COMPREHENSIVE INCOME
(Notes 17, 18, and 21)
8310 Items that will not be reclassified
subsequently to profit or loss:
8311 Remeasurement of defined
benefit plans ( 4,059 ) - 17,235 1
8316 Unrealized (loss) gain on
investments in equity
instruments at fair value
through other
comprehensive income 7,289 - 910 -
8330 Share of the other
comprehensive income
(loss) of subsidiaries,
associates and joint
ventures accounted for
using the equity method 1,085 - 543 -
8349 Income tax relating to items
that will not be
reclassified subsequently
to profit or loss 812 - ( 3,447 ) -
8360 Items that may be reclassified
subsequently to profit or loss:
8361 Exchange differences on
translating the financial
statements of foreign
operations 861 - 9,855 -
8380 Share of the other
comprehensive income
(loss) of subsidiaries,
associates and joint
ventures accounted for
using the equity method ( 169 ) - ( 97 ) -
8300 Other comprehensive (loss)
income for the year, net of
income tax 5,819 - 24,999 1
8500 TOTAL COMPREHENSIVE INCOME
FOR THE YEAR $ 284,112 5 $ 275,729 5
EARNINGS PER SHARE (Note
22)
9710 Basic $ 2.78 $ 2.51
9810 Diluted $ 2.78 $ 2.50
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The accompanying notes are an integral part of the financial statements. (With Deloitte & Touche auditors’ report dated March 12, 2024)

(Concluded)

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SYSCOM COMPUTER ENGINEERING CO.

STATEMENTS OF CHANGES IN EQUITY

FOR THE YEARS ENDED DECEMBER 31,2023 AND 2022

(In Thousands of New Taiwan Dollars, except Dividend Per Share)

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Other equity
Unrealized gain or
loss on financial
Retained earnings Exchange differences assets at fair value
Co d e on translating the through other
Share capital - Unappropriated financial statements of comprehensive
ordinary shares Capital surplus Legal reserve Special reserve earnings foreign operations income Total equity
A1 BALANCE AT JANUARY 1, 2022 $ 1,000,000 $ 1,547 $ 281,889 $ 17,619 $ 669,982 ( $ 20,350 ) $ 13,429 $ 1,964,116
Appropriation of the 2021 earnings
B1 Legal reserve - - 22,088 - ( 22,088 ) - - -
B5 Cash dividends - NT$1.9 per share - - - - ( 190,000 ) - - ( 190,000 )
D1 Net profit for the year ended December 31, 2022 - - - - 250,730 - - 250,730
D3 Other comprehensive income (loss) for the year ended
December 31, 2022, net of income tax - - - - 14,331 9,758 910 24,999
D5 Total comprehensive income (loss) for the year ended
December 31, 2022 - - - - 265,061 9,758 910 275,729
Z1 BALANCE AT DECEMBER 31, 2022 1,000,000 1,547 303,977 17,619 722,955 ( 10,592 ) 14,339 2,049,845
Appropriation of the 2022 earnings
B1 Legal reserve - - 26,506 - ( 26,506 ) - - -
B5 Cash dividends - NT$2.2 per share - - - - ( 220,000 ) - - ( 220,000 )
D1 Net profit for the year ended December 31, 2023 - - - - 278,293 - - 278,293
D3 Other comprehensive income (loss) for the year ended
December 31, 2023, net of income tax - - - - ( 2,162 ) 692 7,289 5,819
D5 Total comprehensive income (loss) for the year ended
December 31, 2023 - - - - 276,131 692 7,289 284,112
C3 Unclaimed dividends - 522 - - - - - 522
M5 Actual acquisition of interests in subsidiaries - ( 272 ) - - - - - ( 272 )
Z1 BALANCE AT DECEMBER 31, 2023 $ 1,000,000 $ 1,797 $ 330,483 $ 17,619 $ 752,580 ( $ 9,900 ) $ 21,628 $ 2,114,207
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The accompanying notes are an integral part of the financial statements.

(With Deloitte & Touche auditors’ report dated March 12, 2024)

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SYSCOM COMPUTER ENGINEERING CO.

STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31,2023 AND 2022

(In Thousands of New Taiwan Dollars)

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Code 2023 2022
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CASH FLOWS FROM OPERATING ACTIVITIES A10000 Income before income tax A20010 Adjustments for: A20100 Depreciation expenses A20200 Amortization expenses A20400 Net gain on financial assets at fair value through profit or loss ( A20900 Finance costs A21200 Interest income ( A21300 Dividend income ( A22400 Share of loss of subsidiaries, associates and joint ventures A22500 Gain on disposal of property, plant and equipment ( A23700 Write-downs of inventories A24100 Net loss on foreign currency exchange A30000 Changes in operating assets and liabilities A31125 Contract assets A31130 Notes receivable ( A31150 Accounts receivable A31180 Other receivables ( A31200 Inventories ( A31230 Prepayments ( A31240 Other current assets A32125 Contract liabilities A32130 Notes payable ( A32150 Accounts payable A32180 Other payables A32230 Other current liabilities A32240 Net defined benefits liabilities ( A33000 Cash generated from operations A33100 Interest received A33200 Dividends received A33300 Interest paid ( A33500 Income tax paid ( AAAA Net cash generated from operating activities	$ 331,101 100,349 100 2,300 ) ( 2,810 7,535 ) ( 586 ) ( 25,684 164 ) ( 165 390 6,590 ( 6,532 ) 57,541 475 ) 42,341 ) ( 35,757 ) ( 1,171 ( 234,557 15,895 ) 52,253 31,216 3,362 ( 15,143) ( 720,561 7,535 586 2,810 ) ( 63,596) ( 662,276	$ 309,652 101,337 100 426 ) 313 2,904 ) 465 ) 36,358 382 ) 167 3,475 152,740 ) 117 91,132 2,057 161,077 ) 83,003 ) 1,539 ) 29,378 15,958 85,833 16,383 1,411 ) 4,650) 283,663 2,904 465 313 ) 57,961) 228,758 (Continued)

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Code 2023 2022
CASH FLOWS FROM INVESTING ACTIVITIES
B00010 Acquisition of financial assets at fair value
through other comprehensive income $ - ( $ 2,379 )
B00040 Proceeds from sale (acquisition) of financial
assets at amortized cost ( 89,097 ) 458
B00100 Purchase of financial assets at fair value
through profit or loss ( 10,000 ) ( 720,000 )
B00200 Proceeds from sale of financial assets at fair
value through profit or loss 21,805 935,930
B02700 Payments for property, plant and equipment ( 59,092 ) ( 46,733 )
B02800 Proceeds from disposal of property, plant and
equipment 324 429
B03800 Decrease(Increase) in refundable deposits 21,563 ( 49,182 )
B07600 Dividends from subsidiaries received 2,942 2,664
BBBB Net cash (used in) generated from
investing activities ( 111,555 ) 121,187
CASH FLOWS FROM FINANCING ACTIVITIES
C03000 Guarantee deposits received ( 2,759 ) 4,028
C04020 Repayment of the principal portion of lease
liabilities ( 41,341 ) ( 38,886 )
C04500 Dividends paid ( 220,000 ) ( 190,000 )
C05400 Acquisition of subsidiaries ( 602 ) -
C09900 Unclaimed dividends 522 -
CCCC Net cash used in financing activities ( 264,180 ) ( 224,858 )
DDDD EFFECTS OF EXCHANGE RATE CHANGES ON
THE BALANCE OF CASH AND CASH
EQUIVALENTS HELD IN FOREIGN
CURRENCIES 268 804
EEEE NET INCREASE IN CASH AND CASH
EQUIVALENTS 286,809 125,891
E00100 CASH AND CASH EQUIVALENTS AT THE
BEGINNING OF THE YEAR 446,088 320,197
E00200 CASH AND CASH EQUIVALENTS AT THE END
OF THE YEAR $ 732,897 $ 446,088
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The accompanying notes are an integral part of the financial statements. (With Deloitte & Touche auditors’ report dated March 12, 2024)

(Concluded)

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SYSCOM COMPUTER ENGINEERING CO. Notes to Parent Company Only Financial Statements Years Ended December 31, 2023 and 2022

(Amounts in thousands of NTD, unless stated otherwise)

1. General

SYSCOM COMPUTER ENGINEERING CO. (the " Company") was incorporated in July 1975. The Company mainly leases and sells computer systems and designs computer software. It also provides services for the integration of computer information systems and maintenances of computer hardware. The Company's shares have been listed on the Taiwan Stock Exchange since May 22, 2001.

The financial statements are presented in the Company’s functional currency, New Taiwan dollars.

1. The Date and Procedures of Authorization of Financial Statements

The financial statements were approved by the Board of Directors on March 12, 2024.

1. Application of New and Revised Standards and Interpretations

2. (1) Initial application of the amendments to the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) (collectively, the “IFRS Accounting Standards”) endorsed and issued into effect by the Financial Supervisory Commission (FSC).

Except for the following, the initial application of the IFRS Accounting Standards endorsed and issued into effect by the FSC did not have material impact on the Company’s accounting policies:

Amendments to IAS 1 “Disclosure of Accounting Policies”

When applying the amendments, the Company refers to the definition of material to determine its material accounting policy information to be disclosed. Accounting policy information is material if it can reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements. Moreover:

• Accounting policy information that relates to immaterial transactions, other events or conditions is immaterial and need not be disclosed;

• The Company may consider the accounting policy information material because of the nature of the related transactions, other events or conditions, even if the amounts are immaterial; and

• Not all accounting policy information relating to material transactions, other events or conditions is itself material.

The accounting policy information is likely to be considered material to the financial statements if that information relates to material transactions, other events or conditions and:

• A. The Company changed its accounting policy during the reporting period and this change resulted in a material change to the information in the financial statements;

• B. The Company chose the accounting policy from options permitted by the standards;

• C. The accounting policy was developed in accordance with IAS 8 “Accounting Policies, Changes in Accounting Estimates and Errors” in the absence of an IFRS that specifically applies;

• D. The accounting policy relates to an area for which the Company is required to make significant judgments or assumptions in applying an accounting policy, and the Company discloses those judgments or assumptions; or

• E. The accounting is complex, and users of the financial statements would otherwise not understand those material transactions, other events or conditions.

• Refer to Note 4 for related accounting policy information.

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• (2) The IFRS Accounting Standards endorsed by the FSC for application starting from 2024.

Effective Date New/Amended/Revised Standards and Interpretations Announced by IASB (Note 1) Amendments to IFRS 16 “Leases Liability in a Sale and January 1, 2024 (Note 2) Leaseback” Amendments to IAS 1 “Classification of Liabilities as January 1, 2024 Current or Non-current” Amendments to IAS 1 “Non-current Liabilities with January 1, 2024 Covenants” Amendments to IAS 7 and IFRS 7 “Supplier Finance January 1, 2024 (Note 3) Arrangements”

Note 1: Unless stated otherwise, the above IFRS Accounting Standards are effective for annual reporting periods beginning on or after their respective effective dates.

Note 2: A seller-lessee shall apply the Amendments to IFRS 16 retrospectively to sale and leaseback transactions entered into after the date of initial application of IFRS 16. Note 3: The amendments provide some transition relief regarding disclosure requirements. As of the date the consolidated financial statements were authorized for issue, the Company has assessed that the application of other standards and interpretations will not have a material impact on the Company’s financial position and financial performance.

• (3) IFRSs issued by the IASB but not yet endorsed and issued into effect by the FSC

Effective Date Announced by New/Amended/Revised Standards and Interpretations the IASB (Note 1) Amendments to IFRS 10 and IAS 28 “Sale or Contribution To be determined by IASB of Assets between an Investor and its Associate or Joint Venture” IFRS 17 “Insurance Contracts” January 1, 2023 Amendments to IFRS 17 January 1, 2023 Amendments to IFRS 17 “Initial Application of IFRS 9 and January 1, 2023 IFRS 17 - Comparative Information” Amendments to IAS 21 “Lack of Exchangeability” January 1, 2025 (Note 2)

Note 1: Unless stated otherwise, the above IFRS Accounting Standards are effective for annual reporting periods beginning on or after their respective effective dates.

• Note 2: An entity shall apply those amendments for annual reporting periods beginning on or after January 1, 2025. Upon initial application of the amendments, the entity recognizes any effect as an adjustment to the opening balance of retained earnings. When the entity uses a presentation currency other than its functional currency, it shall, at the date of initial application, recognize any effect as an adjustment to the cumulative amount of translation differences in equity.

As of the date the Company’s consolidated financial statements were authorized for issue, the Company is continuously assessing the possible impact of the application of other standards and interpretations on the Company’s financial position and financial performance and will disclose the relevant impact when the assessment is complete.

1. Summary of Significant Accounting Policies

2. (1) Statement of Compliance

The financial statements have been prepared in conformity with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

• (2) Basis of Preparation

The financial statements have been prepared on the historical cost basis except for financial instruments which are measured at fair value and net defined benefit liabilities which are measured at the present value of the defined benefit obligations less the fair value of the plan assets.

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The fair value measurements, which are grouped into Levels 1 to 3 based on the degree to which the fair value measurement inputs are observable and based on the significance of the inputs to the fair value measurement in its entirety, are described as follows:

• A. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities;

• B. Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and

• C. Level 3 inputs are unobservable inputs for the asset or liability.

When preparing the accompanying financial statements, the Company used equity method to account for its investment in subsidiaries, associates and joint ventures. In order for the amounts of the net profit, other comprehensive income and total equity in the parent company only financial statements to be the same with those amounts attributable to the owner of the Company in its consolidated financial statements, adjustments arising from the differences in accounting treatment between parent company only basis and consolidated basis were made to the captions of “investments accounted for using equity method”, “share of profit (loss) of subsidiaries, associates and joint ventures accounted for using equity method”, “share of other comprehensive income of subsidiaries, associates and joint ventures accounted for using equity method” and related equity items, as appropriate, in the parent company only financial statements.

• (3) Classification of current and non-current assets and liabilities

• Current assets include:

• A. Assets held primarily for the purpose of trading;

• B. Assets expected to be realized within twelve months after the reporting period; and

• C. Cash and cash equivalents unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

• Current liabilities include:

• A. Liabilities held primarily for the purpose of trading;

• B. Liabilities due to be settled within twelve months after the reporting period; and

• C. Liabilities for which the Company does not have an unconditional right to defer settlement for at least twelve months after the reporting period.

Assets and liabilities that are not classified as current are classified as noncurrent.

(4) Foreign Currencies

In preparing the Company’s financial statements, transactions in currencies other than the Company’s functional currency (foreign currencies) are recognized at the rates of exchange prevailing at the dates of the transactions.

At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Exchange differences on monetary items arising from settlement or translation are recognized in profit or loss in the period in which they arise.

Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined and related exchange differences are recognized in profit or loss. Conversely, when the fair value changes were recognized in other comprehensive income, related exchange difference shall be recognized in other comprehensive income.

Non-monetary items that are measured at historical cost in a foreign currency are not retranslated.

• (5) Inventories

Inventories are stated at the lower of cost or net realizable value item by item, except for those that may be appropriate to group items of similar or related inventories. The cost of the prepayments for contracts was evaluated base on each contract. Net realizable value is the estimated selling price of inventories less all estimated costs of completion and costs necessary to make the sale. The calculation of the cost of inventory is derived using the weighted-average method.

• 15 -

(6) Investments in subsidiaries

The Company uses the equity method to account for its investments in subsidiaries. A subsidiary is an entity that is controlled by the Company.

Under the equity method, the investment in subsidiaries is initially recognized at cost and the increase or decrease of carrying amount reflects the recognition of the Company’s share of profit or loss and other comprehensive income of the subsidiaries after the date of acquisition. Besides, the Company also recognizes the Company’s share of the change in other equity of the subsidiaries.

Changes in the Company’s ownership interests in subsidiaries that do not result in the Company’s loss of control over the subsidiaries are accounted for as equity transactions. Any difference between the carrying amounts of the investment of the subsidiaries and the fair value of the consideration paid or received is recognized directly in equity.

When the Company’s share of losses of a subsidiary exceeds its interest in that subsidiary (which includes any carrying amount of the investment accounted for using the equity method and long-term interests that, in substance, form part of the Company’s net investment in the subsidiary), the Company continues recognizing its share of further losses.

Any excess of the cost of acquisition over the Company’s share of the net fair value of the identifiable assets and liabilities of a subsidiary at the date of acquisition is recognized as goodwill, which is included within the carrying amount of the investment and is not amortized. Any excess of the Company’s share of the net fair value of the identifiable assets and liabilities over the cost of acquisition is recognized immediately in profit or loss.

The Company assesses its investment for any impairment by comparing the carrying amount with the estimated recoverable amount as assessed based on the investee’s financial statements as a whole. Impairment loss is recognized when the carrying amount exceeds the recoverable amount. If the recoverable amount of the investment subsequently increases, the Company recognizes a reversal of the impairment loss; the adjusted post-reversal carrying amount should not exceed the carrying amount that would have been recognized (net of amortization or depreciation) had no impairment loss been recognized in prior years. An impairment loss recognized on goodwill cannot be reversed in a subsequent period.

When the Company loses control of a subsidiary, it recognizes the investment retained in the former subsidiary at its fair value at the date when control is lost. The difference between the fair value of the retained investment plus any consideration received and the carrying amount of the previous investment at the date when control is lost is recognized as a gain or loss in profit or loss. Besides, the Company accounts for all amounts previously recognized in other comprehensive income in relation to that subsidiary on the same basis as would be required if the Company had directly disposed of the related assets or liabilities

Profits or losses resulting from downstream transactions are eliminated in full only in the parent company’s financial statements. Profits and losses resulting from upstream transactions and transactions between subsidiaries are recognized only in the parent company’s financial statements only to the extent of interests in the subsidiaries of parties that are not related to the Company.

(7) Investments in associates and joint ventures

An associate is an entity over which the company has significant influence and which is neither a subsidiary nor an interest in a joint venture. A joint venture is a joint arrangement whereby the Company and other parties that have joint control of the arrangement have rights to the net assets of the arrangement.

The Company uses the equity method to account for its investments in associates and joint ventures.

Under the equity method, investments in an associate and a joint venture are initially recognized at cost and adjusted thereafter to recognize the Company’s share of profit or loss and other comprehensive income of the associate and the joint venture. The Company also recognizes the changes in the Company’s share of equity of associates and joint ventures.

Any excess of the cost of acquisition over the Company’s share of net fair value of the identifiable assets and liabilities of an associate and a joint venture at the date of acquisition is recognized as goodwill, which is included within the carrying amount of the investment and

• 16 -

is not amortized. Any excess of the Company’s share of net fair value of the identifiable assets and liabilities over the cost of acquisition, after reassessment, is recognized immediately in profit or loss.

When the Company subscribes for additional new shares of an associate and a joint venture at a percentage different from its existing ownership percentage, the resulting carrying amount of the investment differs from the amount of the Company’s proportionate interest in the associate and the joint venture. The Company records such a difference as an adjustment to investments with the corresponding amount charged or credited to capital surplus - changes in capital surplus from investments in associates and joint ventures accounted for using the equity method. If the Company’s ownership interest is reduced due to its additional subscription of the new shares of the associate and the joint venture, the proportionate amount of the gains or losses previously recognized in other comprehensive income in relation to that associate and joint ventures is reclassified to profit or loss on the same basis as would be required if the investee had directly disposed of the related assets or liabilities. When the adjustment should be debited to capital surplus, but the capital surplus recognized from investments accounted for using the equity method is insufficient, the shortage is debited to retained earnings.

When the Company’s share of losses of an associate and a joint venture equals or exceeds its interest in that associate and joint venture (which includes any carrying amount of the investment accounted for using the equity method and long-term interests that, in substance, form part of the Company’s net investment in the associate and joint venture), the Company discontinues recognizing its share of further losses. Additional losses and liabilities are recognized only to the extent that the Company has incurred legal obligations, or constructive obligations, or made payments on behalf of that associate and joint venture.

The entire carrying amount of an investment (including goodwill) is tested for impairment as a single asset by comparing its recoverable amount with its carrying amount. Any impairment loss recognized is not allocated to any asset, including goodwill, that forms part of the carrying amount of the investment. Any reversal of that impairment loss is recognized to the extent that the recoverable amount of the investment subsequently increases.

When the Company transacts with its associate and joint venture, profits and losses resulting from the transactions with the associate and joint venture are recognized in the Company’s financial statements only to the extent of interests in the associate and joint venture that are not related to the Company.

(8) Property, plant and equipment

Property, plant and equipment are initially measured at cost, and subsequently measured at cost less accumulated depreciation and accumulated impairment loss.

Depreciation on property, plant and equipment is recognized using the straight-line method. Each significant part is depreciated separately. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.

On derecognition of an item of property, plant and equipment, the difference between the net disposal proceeds and the carrying amount of the asset is recognized in profit or loss.

(9) Intangible assets

A. Acquired separately

Intangible assets with finite useful lives that are acquired separately are initially measured at cost and subsequently measured at cost less accumulated amortization and accumulated impairment loss. Amortization is recognized on a straight-line basis. The estimated useful lives, residual values, and amortization methods are reviewed at the end of each reporting period, with the effect of any changes in estimates accounted for on a prospective basis. Intangible assets with indefinite useful lives that are acquired separately are measured at cost less accumulated impairment loss.

• 17 -

B. Derecognition

On derecognition of an intangible asset, the difference between the net disposal proceeds and the carrying amount of the asset is recognized in profit or loss.

• (10) Impairment of property, plant and equipment, right-of-use assets, intangible assets (excluding goodwill) and incremental costs of obtaining contracts

At the end of each reporting period, the Company reviews the carrying amounts of its property, plant and equipment, right-of-use assets and intangible assets, excluding goodwill, to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cashgenerating unit to which the asset belongs. Company assets are allocated to the smallest group of cash-generating units on a reasonable and consistent basis of allocation.

Intangible assets with indefinite useful lives and not yet available for use are tested for impairment at least annually and whenever there is an indication that the asset may be impaired.

The recoverable amount is the higher of fair value less costs to sell and value in use. If the recoverable amount of an asset or cash-generating unit is estimated to be less than its carrying amount, the carrying amount of the asset or cash-generating unit is reduced to its recoverable amount, with the resulting impairment loss recognized in profit or loss.

When an impairment loss is subsequently reversed, the carrying amount of the corresponding asset or cash-generating unit is increased to the revised estimate of its recoverable amount, but only to the extent of the carrying amount that would have been determined had no impairment loss been recognized on the asset or cash-generating unit in prior years. A reversal of an impairment loss is recognized in profit or loss.

(11) Financial instruments

Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the instruments.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issuance of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss.

• A. Financial assets

All regular way purchases or sales of financial assets are recognized and derecognized on a trade date or settlement date basis.

• a. Measurement category

Financial assets are classified into the following categories: Financial assets at FVTPL, financial assets at amortized cost and investments in equity instruments at FVTOCI.

• (a) Financial assets at FVTPL

Financial assets are classified as at FVTPL when the financial asset is mandatorily classified as at FVTPL. Financial assets mandatorily classified as at FVTPL include investments in debt instruments that do not meet the amortized cost criteria or the FVTOCI criteria.

Financial assets at FVTPL are subsequently measured at fair value, and any dividends or interest earned on such financial assets are recognized in other income and interest income, respectively; any remeasurement gains or losses on such financial assets are recognized in other gains or losses. Fair value is determined in the manner described in Note 24.

(b)Financial assets at amortized cost

Financial assets that meet the following conditions are subsequently measured at amortized cost:

• 18 -

• i. The financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and

• ii. The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Subsequent to initial recognition, financial assets at amortized cost, including cash and cash equivalents, debt instruments at amortized cost, notes receivable, accounts receivable, other receivables and refundable deposits, are measured at amortized cost, which equals the gross carrying amount determined using the effective interest method less any impairment loss. Exchange differences are recognized in profit or loss.

Interest income is calculated by applying the effective interest rate to the gross carrying amount of such a financial asset.

Cash equivalents include time deposits and commercial papers with original maturities within 3 months from the date of acquisition, which are highly liquid, readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. These cash equivalents are held for the purpose of meeting short-term cash commitments.

(c) Investments in equity instruments at FVTOCI

On initial recognition, the Company may make an irrevocable election to designate investments in equity instruments as at FVOCI. Designation at FVOCI is not permitted if the equity investment is held for trading or if it is contingent consideration recognized by an acquirer in a business combination.

Investments in equity instruments at FVTOCI are subsequently measured at fair value with gains and losses arising from changes in fair value recognized in other comprehensive income and accumulated in other equity. The cumulative gain or loss will not be reclassified to profit or loss on disposal of the equity investments. Instead, it will be transferred to retained earnings.

Dividends on these investments in equity instruments are recognized in profit or loss when the Company’s right to receive the dividends is established, unless the dividends clearly represent a recovery of part of the cost of the investment.

b.

Impairment of financial assets and contract assets

The Company recognizes a loss allowance for expected credit losses on financial assets at amortized cost (including accounts receivable), lease receivables, as well as contract assets.

The Company always recognizes lifetime Expected Credit Loss (ECL) for accounts receivable, lease receivables and contract assets. For all other financial instruments, the Company recognizes lifetime ECL when there has been a significant increase in credit risk since initial recognition. If, on the other hand, the credit risk on the financial instrument has not increased significantly since initial recognition, the Company measures the loss allowance for that financial instrument at an amount equal to 12-month ECL.

Expected credit losses reflect the weighted average of credit losses with the respective risks of default occurring as the weights. Lifetime ECL represent the expected credit losses that will result from all possible default events over the expected life of a financial instrument. In contrast, 12-month ECL represent the portion of lifetime ECL that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date. The Company recognizes an impairment loss for all financial instruments with a corresponding adjustment to their carrying amount through a loss allowance account.

c.

Derecognition of financial assets

The Company derecognizes a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial

• 19 -

asset and substantially all the risks and rewards of ownership of the asset to another entity.

On derecognition of a financial asset at amortized cost in its entirety, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss. On derecognition of an investment in an equity instrument at FVTOCI, the cumulative gain or loss that had been recognized in other comprehensive income is transferred directly to retained earnings, without recycling through profit or loss.

B. Financial liabilities

• a. Subsequent measurement

All financial liabilities are measured at the amortized cost using the effective interest method.

• b. Derecognition of financial liabilities

The difference between the carrying amount of the financial liability derecognized and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognized in profit or loss.

(12) Revenue recognition

The Company identifies the performance obligations in the contract with the customers, allocates transaction price to each performance obligation and recognizes revenue when performance obligations are satisfied.

• A. Revenue from sales

Contract revenue

Contract revenue comes from software and hardware integration services.

As the Company provides software and hardware integration services, customers simultaneously receive and consume the benefits provided by the Company’s performance. The effort of technical personnel and the completion of the equipment are required to perform software and hardware integration services. The Company measures the stage of completion based on the proportion of contract costs incurred on the work performed to date relative to the estimated total costs. Customers paid in installments according to contract. Contract assets are recognized over the period in which the services are performed and are reclassified to trade receivables at the point at which the customer is invoiced. If the milestone payments exceed the revenue recognized to date, then the Company recognizes contract liabilities for the difference. When it is probable that total contract costs will exceed the total contract revenue, the expected loss is recognized as an expense immediately.

Revenue from the sale of goods

Revenue from the sale of goods comes from sales of computer software, hardware and peripherals. The Company recognizes revenue and accounts receivable when performance obligations are satisfied. The performance obligations are satisfied when customers obtain control and right of use of the promised goods and bear inventory risks.

• B. Revenue from the rendering of services

Revenue from the rendering of services comes from follow-up maintenance services of software and hardware during the contract period. The Company recognizes revenue over time.

(13) Leases

At the inception of a contract, the Company assesses whether the contract is, or contains, a lease.

• A. The Company as lessor

Leases are classified as finance leases whenever the terms of a lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

Under finance leases, the lease payments comprise fixed payments. The net investment in a lease is measured at (a) the present value of the sum of the lease payments receivable by a lessor and any unguaranteed residual value accrued to the

• 20 -

lessor plus (b) initial direct costs and is presented as a finance lease receivable. Finance lease income is allocated to the relevant accounting periods so as to reflect a constant, periodic rate of return on the Company’s net investment outstanding in respect of leases.

Lease payments from operating leases are recognized as income on a straight-line basis over the terms of the relevant leases.

B. The Company as lessee

The Company recognizes right-of-use assets and lease liabilities for all leases at the commencement date of a lease, except for short-term leases and low-value asset leases accounted for applying a recognition exemption where lease payments are recognized as expenses on a straight-line basis over the lease terms.

Right-of-use assets are initially measured at cost, which comprises the initial measurement of lease liabilities adjusted for lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs needed to restore the underlying assets, and less any lease incentives received. Rightof-use assets are subsequently measured at cost less accumulated depreciation and impairment losses and adjusted for any remeasurement of the lease liabilities. Right-ofuse assets are presented on a separate line in the balance sheets.

Right-of-use assets are depreciated using the straight-line method from the commencement dates to the earlier of the end of the useful lives of the right-of-use assets or the end of the lease terms.

Lease liabilities are initially measured at the present value of the lease payments, which comprise fixed payments. The lease payments are discounted using the interest rate implicit in a lease, if that rate can be readily determined. If that rate cannot be readily determined, the Company uses the lessee’s incremental borrowing rates.

Subsequently, lease liabilities are measured at amortized cost using the effective interest method, with interest expense recognized over the lease terms. When there is a change in a lease term or a change in future lease payments resulting from a change in an index or a rate used to determine those payments, the Company remeasures the lease liabilities with a corresponding adjustment to the right-of-use-assets. However, if the carrying amount of the right-of-use assets is reduced to zero, any remaining amount of the remeasurement is recognized in profit or loss. Lease liabilities are presented on a separate line in the balance sheets.

(14) Government Grants

Government grants are not recognized until there is reasonable assurance that the Company will comply with the conditions attached to them and that the grants will be received.

Government grants are recognized in profit or loss on a systematic basis over the periods in which the Company recognizes as expenses the related costs for which the grants are intended to compensate. Specifically, government grants whose primary condition is that the Company should purchase, construct or otherwise acquire non-current assets are recognized as deferred revenue and transferred to profit or loss on a systematic and rational basis over the useful lives of the related assets.

Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the Company with no future related costs are recognized in profit or loss in the period in which they become receivable.

(15) Employee Benefits

A. Short-term employee benefits

Liabilities recognized in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related service.

B. Retirement benefits

Payments to defined contribution retirement benefit plans are recognized as an expense when employees have rendered service entitling them to the contributions.

• 21 -

Defined benefit costs (including service cost, net interest and remeasurement) under defined benefit retirement benefit plans are determined using the projected unit credit method. Service cost (including current service cost) and net interest on the net defined benefit liability (asset) are recognized as employee benefit expenses in the period in which they occur. Remeasurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling, and the return on plan assets (excluding interest), is recognized in other comprehensive income in the period in which it occurs. Remeasurement recognized in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to profit or loss.

Net defined benefit liability (asset) represents the actual deficit (surplus) in the Company’s defined benefit plan. Any surplus resulting from this calculation is limited to the present value of any refunds from the plans or reductions in future contributions to the plans.

(16) Income tax

• Income tax expense represents the sum of the tax currently payable and deferred tax.

• A. Current tax

Income tax payable (refundable) is based on taxable profit (loss) for the year determined according to the applicable tax laws of each tax jurisdiction. According to the Income Tax Act in the ROC, an additional tax on unappropriated earnings is provided for in the year the shareholders approve to retain earnings. Adjustments of prior years’ tax liabilities are added to or deducted from the current year’s tax provision.

• B. Deferred tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities and the corresponding tax bases used in the computation of taxable profit.

Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences, research and development expenditures and personnel training expenditures to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized.

Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries and associates and interests in joint arrangements, except where the Company is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognized to the extent that it is probable that there will be sufficient taxable profits against which to utilize the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. A previously unrecognized deferred tax asset is also reviewed at the end of each reporting period and recognized to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liabilities are settled or the assets are realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

• C. Current and deferred tax

Current and deferred tax are recognized in profit or loss, except when they relate to items that are recognized in other comprehensive income or directly in equity, in

• 22 -

which case, the current and deferred tax are also recognized in other comprehensive income or directly in equity, respectively.

5. Critical Accounting Judgments and Key Sources of Estimation and Uncertainty

In the application of the Company’s accounting policies, the management is required to make judgments, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered relevant. Actual results may differ from these estimates.

When developing material accounting estimates, the Company considers the possible impact on the cash flow projection, growth rates, discount rates, profit abilities and other relevant material estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Critical accounting judgments

Timing of recognition of revenue

For every contract, the Company determines whether its performance obligation is satisfied over time or at a point in time based on the conditions in the contract and applicable regulation. The Company generates revenue through rendering of software and hardware integration services according to contract. The effort of technical personnel and the completion of the equipment are required to perform software and hardware integration services. The Company measures the stage of completion based on the proportion of contract costs incurred on the work performed to date relative to the estimated total contract costs. Customers paid in installments according to contract. Contract assets are recognized over the period in which the services are performed. Contract revenue is recognized by reference to the stage of completion of each contract. The Company estimated total contract cost upon signing the contract. If the estimated cost changes, the Company amends the percentage of completion and the related contract revenue.

6. Cash and cash equivalents

6.	Cash and cash equivalents	Cash and cash equivalents
7.	December 31, 2023 December 31, 2022 Cash on hand $ 405 $ 405 Checking accounts and demand deposits 437,531 220,787 Cash equivalents (investments with original maturities of less than 3 months) Commercial papers 294,961 224,896 $ 732,897 $ 446,088 The market rate ranges of bank deposits and commercial papers with original maturities of less than 3 months at the balance sheet date were as follows: December 31, 2023 December 31, 2022 Bank demand deposits 0.58% 0.46% Commercial papers with original maturities of less than 3 months 0.95% 0.78%~0.80% Financial assets at fair value through profit or loss December 31, 2023 December 31, 2022 Financial assets mandatorily classified as at FVTPL Non-derivative financial assets Fund beneficial certificates $ 10,000 $ 19,505		December 31, 2022
			0.46% 0.78%~0.80% December 31, 2022
	Financial assets mandatorily classified as at FVTPL Non-derivative financial assets Fund beneficial certificates
				$ 19,505

The market rate ranges of bank deposits and commercial papers with original maturities of less than 3 months at the balance sheet date were as follows:

• 23 -

8.

Financial assets at fair value through other comprehensive income

Investments in equity instruments- non-current Domestic investments Listed shares Unlisted shares	December 31, 2023 $ 31,431 1,595 $ 33,026	December 31, 2022	December 31, 2022
			$ 24,142 1,595 $ 25,737

These investments in equity instruments are not held for trading. Instead, they are held for medium to long-term strategic purposes. Accordingly, the management elected to designate these investments in equity instruments as at FVTOCI as they believe that recognizing short-term fluctuations in these investments’ fair value in profit or loss would not be consistent with the Company’s strategy of holding these investments for long-term purposes.

The Company purchased the common stocks of Turn Cloud Technology Service Inc. in January 2020, which was designated as investment at FVTOCI because it was for the medium to long-term strategic purpose. The company's common stocks will be available for trading on the Pioneer Stock Board of the Emerging Stock Market on November 26, 2021, and as regular Emerging Stock Market stocks starting February 15, 2022. Since September 14, 2023, the company has obtained approval from the Taipei Exchange for the over-the-counter trading of its stocks on the securities market.

9. Financial assets at amortized cost

Financial assets at amortized cost
Pledged time deposits Time deposits with original maturities of more than 3 months Current Non-current Total	December 31, 2023 $ 326,187 56,121 $ 382,308 $ 184,678 197,630 $ 382,308	December 31, 2022
			$ 230,417 62,794 $ 293,211 $ 164,382 128,829 $ 293,211

The ranges of interest rates for time deposits with original maturities of more than 3 months were approximately 0.78%-1.54% and 0.76%-1.40% per annum as of December 31, 2023 and 2022, respectively.

Refer to Note 26 for information relating to financial assets at amortized cost pledged as security.

Based on the Company’s assessment, the credit risk of the above-mentioned financial assets at amortized cost is not expected to be high and has not increased since initial recognition. The Company does not expect to recognize any credit loss resulting from default events on financial assets at amortized cost that are possible within 12 months after the reporting date. Accordingly, no impairment loss was recognized as of December 31, 2023 and 2022.

10. Accounts receivable

Accounts receivable
At amortized cost Accounts receivable Less: Allowance for impairment loss	December 31, 2023 $ 1,337,728 ( 769) $ 1,336,959	December 31, 2022
	(	(	$ 1,395,696 769) $ 1,394,927

The average credit period of sales of goods was 60 to 120 days. No interest was charged on accounts receivable.

• 24 -

In order to minimize credit risk, the management of the Company has delegated a team responsible for determining credit limits, credit approvals and other monitoring procedures to ensure that follow-up action is taken to recover overdue debts. In addition, the Company reviews the recoverable amount of each individual trade debt at the end of the reporting period to ensure that adequate allowance is made for possible irrecoverable amounts. In this regard, the management believes the Company’s credit risk was significantly reduced.

The Company measures the loss allowance for all accounts receivables at an amount equal to lifetime ECLs. The expected credit losses on accounts receivable are estimated by reference to past default experience of the debtor, an analysis of the debtor’s current financial position, past experience with collecting payments, observable changes in national or local economic conditions that correlate with defaults on receivables, as well as indicators of the industry in which the debtors operate.

The Company writes off a accounts receivable when there is information indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery, e.g. when the debtor has been placed under liquidation. For accounts receivable that have been written off, the Company continues to engage in enforcement activity to attempt to recover the receivables due. Where recoveries are made, these are recognized in profit or loss.

Considering the above conditions, the Company assesses the credit risk of individual customers based on the aging schedule of accounts receivable (based on invoice date). The following table details the loss allowance of accounts receivable.

December 31, 2023

December 31, 2023
Gross carrying amount Loss allowance (Lifetime ECL) Amortized cost December 31, 2022 Gross carrying amount Loss allowance (Lifetime ECL) Amortized cost		Less than 60 Days		61 to 90 Days		91 to120 Days		Over 121 Days		Total
		$ 1,139,986 - $ 1,139,986 Less than 60 Days		$ 58,181 - $ 58,181 61 to 90 Days		$ 6,481 - $ 6,481 91 to120 Days	(	$ 133,080 769) $ 132,311 Over 121 Days	(	$ 1,337,728 769) $ 1,336,959 Total
		$ 1,155,380 - $ 1,155,380		$ 149,060 - $ 149,060		$ 19,356 - $ 19,356	(	$ 71,900 769) $ 71,131	(	$ 1,395,696 769) $ 1,394,927

The movements of the loss allowance of accounts receivable were as follows:

			2023		2022
	Balance at January 1	$	769	$	769
	Impairment loss provided for the
	year		-		-
	Balance at December 31	$	769	$	769
11.	Inventories
		December 31, 2023		December 31, 2022
	Commodities	$	205,959	$	219,550
	Prepayments for contracts		244,401		195,721
	Inventories in transit		5,397		5,862
	Maintenance materials		376		246
	Total	$	456,133	$	421,379

The commodities mainly consisted of computer hardware and software. Prepayment for contracts are the cost incurred to date related to computer hardware, software and labor.

• 25 -

The cost of inventories recognized as cost of goods sold for the years ended December 31, 2023 and 2022 was $3,531,049 thousand and $3,280,653 thousand, respectively. The cost of goods sold included inventory write-downs of $165 thousand and $167 thousand, respectively.

1. Investments accounted for using the equity method

Investments in subsidiaries Investments in associates Investments in joint ventures (1) Investments in subsidiaries Unlisted companies Casemaker Inc. SYSCOM INTERNATIONAL INC. Wisemaker Technology Co. Netmaker Technology Co., Ltd. Coach Technology Management Inc. Syscom Computer(Thailand)Co., Ltd. Add: Transfer of credit balance of long-term investments to other non-current liabilities	December 31, 2023 $ 202,135 12,432 55,426 $ 269,993 December 31, 2023 $ 96,751 ( 94,834 ) 60,187 35,643 6,550 3,004 107,301 94,834 $ 202,135	December 31, 2022	December 31, 2022
		$ 203,541 15,486 54,032 $ 273,059 December 31, 2022
	(	(	$ 98,578 71,381 ) 58,256 39,271 4,331 3,105 132,160 71,381 $ 203,541

At the end of the reporting period, the proportions of ownership and voting rights in subsidiaries held by the Company were as follows:

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Proportion of Ownership and Voting Rights
December 31, December 31,
Name of the subsidiary Description
2023 2022
----- End of picture text -----

Name of the subsidiary	December 31, 2023	December 31, 2022	Description
Casemaker Inc.	100.00%	100.00%	(A)
Wisemaker Technology Co.	99.24%	98.72%	(A)、(B)
SYSCOM INTERNATIONAL	100.00%	100.00%	(A)
INC.(SYSCOM)
Netmaker Technology Co., Ltd.	86.60%	86.60%	(A)
Coach Technology Management	97.50%	97.50%	(A)
Inc.
Syscom Computer(Thailand)Co.,	92.47%	91.40%	(A)、(C)
Ltd.

• A. Except for SYSCOM, whose financial statements for the year ended December 31, 2023 and 2022 have been audited by CPA, the investments in subsidiaries accounted for using the equity method and the share of profit or loss and other comprehensive income of those investments for the years ended December 31, 2023 and 2022 were based on the subsidiaries’ financial statements which have been audited by other auditors for the same period.

• B. In January 、 February and August 2023, the Company acquired additional 14 thousand shares of Wisemaker Technology Co. from an unrelated party for $494 thousand; after

• 26 -

the acquisition of further interests, the Company’s percentage of ownership in Wisemaker Technology Co. increased to 99.24%.

• C. In June and July 2023, the Company acquired additional 40 thousand shares of Syscom Computer (Thailand) Co.,Ltd. from an unrelated party for $108 thousand; after the acquisition of further interests, the Company’s percentage of ownership in Syscom Computer (Thailand) Co.,Ltd. increased to 92.47%.

• (2) Investments in associates

December 31, 2023 December 31, 2022

Associates that is not individually materiality Unlisted companies DBMaker Japan Inc. $ 12,432 $ 15,486

All the associates were accounted for using the equity method.

As at the end of the reporting period, the proportions of ownership and voting rights in associates held by the Company were as follows:

Name of the company DBMaker Japan Inc.	Proportion of Ownershipand VotingRights	Proportion of Ownershipand VotingRights
	December 31, 2023 49.89%	December 31, 2022
		49.89%

The summarized financial information below represents amounts shown in the associates’ financial statements prepared in accordance with IFRSs adjusted by the Company for equity accounting purposes.

for equity accounting purposes.
The Company’s share of: Net profit for the year Other comprehensive income Total comprehensive income		2023 $ 2,087 ) 967) $ 3,054 )	2022
	( ( (		$ 3,639 ( 332) $ 3,307

The investments accounted for using the equity method and the share of profit or loss and other comprehensive income of those investments for the years ended December 31, 2023 and 2022 were calculated based on the financial statements which have not been audited. Management believes there is no material impact on the equity method accounting or the calculation of the share of profit or loss and other comprehensive income from the financial statements of associates which have not been audited.

• (3) Investments in joint ventures

December 31, 2023 December 31, 2022 Joint ventures of no materiality individually Cloudmaster Co., Ltd. $ 55,426 $ 54,032

At the end of the reporting period, the proportion of ownership and voting rights in jointly controlled entity held by the Company was as follows:

Proportion of Ownership and Voting Rights Name of the company December 31, 2023 December 31, 2022 Cloudmaster Co., Ltd. 50.00% 50.00% The joint venture is accounted for using the equity method.

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The summarized financial information below represents amounts shown in the joint venture’s financial statements prepared in accordance with IFRSs adjusted by the Company for equity accounting purposes.

for equity accounting purposes.
The Company’s share of: Net profit for the year Other comprehensive income Total comprehensive income		2023 $ 1,564 170) $ 1,394		2022
	(		(	$ 1,394 97) $ 1,297

In March 2013, under the authorization of the Investment Commission of the Ministry of Economic Affairs, the Company incorporated CloudMaster under the joint venture agreement and had 50% of ownership. CloudMaster provides services in information software, data processing and electronic information. Under the joint venture agreement, in the meetings of the board of directors and the shareholders of CloudMaster, majority rule shall prevail. However, the Coompany’s seat in CloudMaster’s board of director does not exceed half of the board. Besides, under CloudMaster’s policies, significant strategic decisions should be made by unanimous agreement of the shareholders of both entities, and the Company has no right to obtain the variable rewards which is unavailable to CloudMaster’s shareholders and does not have direct ability to affect the rewards from investing in CloudMaster. As a result, the Company has no control over CloudMaster.

The investments accounted for using the equity method and the share of profit or loss and other comprehensive income of those investments for the years ended December 31, 2023 and 2022 were based on the joint venture’s financial statements audited by auditors for the same years.

For information on the nature of business, principal place of business and country of incorporation of the above associates and joint ventures, please refer to Table 3 "Information on Investees".

13. Property, plant and equipment

Property, plant and equipment
Assets used by the Company Assets leased under operating leases	December 31, 2023		December 31, 2022
		$ 317,606 18,895 $ 336,501		$ 304,533 23,812 $ 328,345

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(1) Assets used by the Company

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Maintenance Computer Leasehold
Land Buildings equipment equipment improvements Others Total
Cost
Balance at January
1, 2023 $ 110,307 $ 75,940 $ 90,116 $ 246,637 $ 99,939 $ 16,282 $ 639,221
Addition - - 18,548 31,481 6,805 2,258 59,092
Disposal - - ( 9,045 ) ( 29,986 ) - ( 1,307 ) ( 40,338 )
Reclassification - - 6,211 618 - - 6,829
December 31, 2023
Balance $ 110,307 $ 75,940 $ 105,830 $ 248,750 $ 106,744 $ 17,233 $ 664,804
Accumulated
depreciation
Balance at January
1, 2023 $ - $ 37,670 $ 55,743 $ 138,557 $ 94,948 $ 7,770 $ 334,688
Disposal - - ( 9,045 ) ( 29,986 ) - ( 1,147 ) ( 40,178 )
Depreciation
expenses - 1,289 14,191 32,979 2,509 2,265 53,233
Reclassification - - ( 361 ) ( 184 ) - - ( 545 )
December 31, 2023
Balance $ - $ 38,959 $ 60,528 $ 141,366 $ 97,457 $ 8,888 $ 347,198
December 31, 2023
Net $ 110,307 $ 36,981 $ 45,302 $ 107,384 $ 9,287 $ 8,345 $ 317,606
Cost
Balance at January
1, 2022 $ 110,307 $ 75,940 $ 88,748 $ 262,630 $ 95,186 $ 15,832 $ 648,643
Addition - - 9,306 30,285 4,753 2,389 46,733
Disposal - - ( 10,419 ) ( 46,550 ) - ( 1,939 ) ( 58,908 )
Reclassification - - 2,481 272 - - 2,753
December 31, 2022
Balance $ 110,307 $ 75,940 $ 90,116 $ 246,637 $ 99,939 $ 16,282 $ 639,221
Accumulated
depreciation
Balance at January
1, 2022 $ - $ 36,381 $ 53,260 $ 152,423 $ 85,094 $ 7,311 $ 334,469
Disposal - - ( 10,419 ) ( 46,550 ) - ( 1,892 ) ( 58,861 )
Depreciation
expenses - 1,289 12,929 32,684 9,854 2,351 59,107
Reclassification - - ( 27 ) - - - ( 27 )
December 31, 2022
Balance $ - $ 37,670 $ 55,743 $ 138,557 $ 94,948 $ 7,770 $ 334,688
December 31, 2022
Net $ 110,307 $ 38,270 $ 34,373 $ 108,080 $ 4,991 $ 8,512 $ 304,533
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The above items of property, plant and equipment are depreciated on a straight-line basis over their estimated useful lives as follows:

Buildings 50 to 60 years Maintenance equipment 6 years Computer equipment 6 years Leasehold improvements 1 to 10 years Others - Office equipment 6 to 8 years -Transportation equipment 5 years

As of December 31, 2023 and 2022, the property, plant and equipment were not pledged as collateral.

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(2) Assets leased under operating leases

Assets leased under operating leases
Cost Balance at January 1, 2023 Disposals Reclassification Balance at December 31, 2023 Accumulated depreciation and impairment Balance at January 1, 2023 Disposals Depreciation expenses Balance at December 31, 2023 Balance on December 31, 2023, net Cost Balance at January 1, 2022 Reclassification Balance at December 31, 2022 Accumulated depreciation and impairment Balance at January 1, 2022 Depreciation expenses Balance at December 31, 2022 Balance on December 31, 2022, net	Machinery equipment
	$ 30,604 ( 507 ) 48 $ 30,145 $ 6,792 ( 507 ) 4,964 $ 11,250 $ 18,895 $ 30,406 198 $ 30,604 $ 1,144 5,648 $ 6,792 $ 23,812

Operating leases relate to leases of equipment with lease terms between 1 to 3 years. The lessees do not have bargain purchase options to acquire the assets at the expiry of the lease periods.

The maturity analysis of lease payments receivable under operating lease payments was as follows:

as follows:
Year 1 Year 2 Year 3	December 31, 2023 $ 17,029 16,787 12 $ 33,828	December 31, 2022
			$ 17,323 16,831 16,740 $ 50,894

The above items of property, plant and equipment leased under operating leases are depreciated on a straight-line basis over 1 to 6 years estimated useful lives.

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14. (1) (2)	Lease agreements Right-of-use assets December 31, 2023 Carrying amount Buildings $ 81,661 2023 Addition to right-of-use assets $ 120,331 Depreciation charge for right-of- use assets Buildings $ 42,151 Lease liabilities December 31, 2023 Carrying amount of lease liabilities Current $ 41,048 Non-current $ 41,490 The range of discount rate for lease liabilities were as follows: December 31, 2023 Buildings 1.20%~2.10%	December 31, 2022
		$ 3,481 2022 $ - $ 36,582 December 31, 2022
		$ 2,069 $ 1,479 December 31, 2022
		1.20%~1.50%

• (3) Material leasing activities and terms

As lessee, the Company leases buildings for the use as offices and dormitory with lease terms of 2 to 7.3 years. All lease contracts with lease terms over 5 years specify that lease payments will be adjusted every 5 years on the basis of changes in market rental rates. The Company does not have bargain purchase options to acquire the leasehold buildings at the end of the lease terms.

• (4) Other lease information

Lease-out arrangements under operating leases for freehold property, plant, and equipment were set out in Note 13.

Expenses relating to short-term leases Total cash outflow from leases	(	2023 $ 7,748 $ 51,559 )	(	2022 $ 5,548 $ 44,865 )

As lessee, the Company leases certain buildings and leasehold improvements which qualify as short-term leases. The Company has elected to apply the recognition exemption and thus, did not recognize right-of-use assets and lease liabilities for these leases.

1. Intangible assets

Intangible assets
Balance at January 1, 2023 Amortization expenses Carrying amounts at December 31, 2023		Computer software cost
	(	$ 492 100) $ 392

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Balance at January 1, 2022 Amortization expenses Carrying amounts at December 31, 2022		Computer software cost
	(	$ 592 100) $ 492

Computer software is being depreciated on a straight-line basis and will be amortized over 1 to 10 years.

As of December 31, 2023 and 2022, the Company had assessed that there was no indication that computer software costs may have been impaired and therefore no impairment assessment was performed.

16. Other payables

Other payables
Payables for salaries or bonus Payables for value-added tax Payables for insurance Payables for pension Payables for compensation of employees Payables for annual leave Others	December 31, 2023 $ 283,100 42,075 18,872 15,469 10,300 1,505 25,839 $ 397,340	December 31, 2022
			$ 270,900 25,582 17,740 14,293 9,600 2,389 25,620 $ 366,124

17. Retirement benefit plans

(1) Defined contribution plans

The Company adopted a pension plan under the Labor Pension Act (the “LPA”), which is a state-managed defined contribution plan. Under the LPA, an entity makes monthly contributions to employees’ individual pension accounts at 6% of monthly salaries and wages.

(2) Defined benefit plans

The defined benefit plan adopted by the Company in accordance with the Labor Standards Law is operated by the government of the ROC. Pension benefits are calculated on the basis of the length of service and average monthly salaries of the 6 months before retirement. The Company contributes amounts equal to 2% of total monthly salaries and wages to a pension fund administered by the pension fund monitoring committee. Pension contributions are deposited in the Bank of Taiwan in the committee’s name. Before the end of each year, the Company assesses the balance in the pension fund. If the amount of the balance in the pension fund is inadequate to pay retirement benefits for employees who conform to retirement requirements in the next year, the Company is required to fund the difference in one appropriation that should be made before the end of March of the next year. The pension fund is managed by the Bureau of Labor Funds, Ministry of Labor (“the Bureau”); the Company has no right to influence the investment policy and strategy.

The amounts included in the balance sheets in respect of the Company’s defined benefit plans were as follows:

plans were as follows:
Present value of defined benefit obligation Fair value of plan assets Net defined benefit liabilities	December 31, 2023 $ 207,129 ( 163,710) $ 43,419	December 31, 2022
	(	(	$ 202,589 148,086) $ 54,503

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Movements in net defined benefit liabilities (assets) were as follows:

Balance at January 1, 2022 Current service cost Net interest expense (income) Recognized in profit or loss Remeasurement Return on plan assets (excluding amounts included in net interest) Actuarial gains - changes in financial assumptions Actuarial losses - experience adjustments Recognized in other comprehensive income Contributions from the employer Benefits paid Balance at December 31, 2022 Current service cost Interest expense (income) Recognized in profit or loss Remeasurement Return on plan assets (excluding amounts included in net interest) Actuarial losses - changes in financial assumptions Actuarial losses - experience adjustments Recognized in other comprehensive income Contributions from the employer Benefits paid Balance at December 31, 2023	Present value of defined benefit obligation $ 220,060 228 1,377 1,605 - ( 8,420 ) 2,239 ( 6,181) - ( 12,895) 202,589 145 2,430 2,575 - 1,266 4,323 5,589 - ( 3,624) $ 207,129	( ( ( ( ( ( ( ( ( ( ( ( (	Fair value of plan assets $ 143,672) - 887) 887) 11,054 ) - - 11,054) 5,368) 12,895 148,086) - 1,763) 1,763) 1,530 ) - - 1, 530) 15,955) 3,624 $ 163,710 )	Net defined benefit liabilities (assets) $ 76,388 228 490 718 ( 11,054 ) ( 8,420 ) 2,239 ( 17,235) ( 5,368) - 54,503 145 667 812 ( 1,530 ) 1,266 4,323 4,059 ( 15,955) - $ 43,419

An analysis by function of the amounts recognized in profit or loss in respect of the defined benefit plans is as follows:

Operating expenses		2023 $ 812		2022 $ 718

Through the defined benefit plans under the Labor Standards Law, the Company is exposed to the following risks:

A. Investment risk: The plan assets are invested in domestic and foreign equity and debt securities, bank deposits, etc. The investment is conducted at the discretion of the Bureau or under the mandated management. However, in accordance with relevant regulations, the return generated by plan assets should not be below the interest rate for a 2-year time deposit with local banks.

• 33 -

• B. Interest rate risk: A decrease in the government bond interest rate will increase the present value of the defined benefit obligation; however, this will be partially offset by an increase in the return on the plan’s debt investments.

• C. Salary risk: The present value of the defined benefit obligation is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the present value of the defined benefit obligation.

The actuarial valuations of the present value of the defined benefit obligation were carried out by qualified actuaries. The significant assumptions used for the purposes of the actuarial valuations were as follows:

valuations were as follows:
Discount rate Expected rate of salary increase	December 31, 2023 1.15% 2.00%	December 31, 2022
		1.25% 2.00%

If possible reasonable changes in each of the significant actuarial assumptions will occur and all other assumptions will remain constant, the present value of the defined benefit obligation would increase (decrease) as follows:

Discount rate 0.25% increase 0.25% decrease Expected rate of salary increase 0.25% increase 0.25% decrease	December 31, 2023 ( $ 3,141 ) $ 3,222 $ 3,187 ( $ 3,123 )	December 31, 2022	December 31, 2022
	( (	( (	$ 3,352 ) $ 3,442 $ 3,408 $ 3,336 )

The sensitivity analysis presented above may not be representative of the actual changes in the present value of the defined benefit obligation as it is unlikely that changes in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

Expected contributions to the plans for the next year Average duration of the defined benefit obligation ity Share capital - ordinary shares Number of authorized shares (in thousands) Amount of authorized shares Number of issued and fully paid shares (in thousands) Amount of issued and fully paid shares	December 31, 2023 $ 2,314 6.14Years December 31, 2023 157,000 $ 1,570,000 100,000 $ 1,000,000	December 31, 2022 $ 2,289 6.71Years December 31, 2022 157,000 $ 1,570,000 100,000 $ 1,000,000

1. Equity

2. (1) Share capital - ordinary shares

Fully paid ordinary shares, which have a par value of $10, carry one vote per share and carry a right to dividends.

(2) Capital surplus

Such capital surplus arise from the difference between consideration paid or received and the carrying amount of the subsidiaries’ net assets during actual acquisition or disposal under equity transactions and from donated assets.

• 34 -

• (3) Retained earnings and dividends policy

The shareholders of the Company held their regular meeting on June 13, 2023 and in that meeting, resolved the amendments to the Company’s Articles of Incorporation. Under the dividends policy as set forth in the Articles, where the Company made profit in a fiscal year, the profit shall be first utilized for paying taxes, offsetting losses of previous years, setting aside as legal reserve 10% of the remaining profit, unless the legal reserve has reached the Company’s total paid-up capital. The remaining profit shall be set aside or reverse a special reserve in accordance with the laws and regulations, and then any remaining profit together with any undistributed retained earnings shall be used by the Company’s board of directors as the basis for proposing a distribution plan. The board of directors is authorized to adopt a special resolution to distribute dividends and bonuses in cash and a report of such distribution should be submitted in the shareholders’ meeting. However, other additional distribution should be resolved in the shareholders’ meeting for distribution of dividends and bonus to shareholders.

Under the dividends policy as set forth in the Articles before the amendments where the Company made profit in a fiscal year, the profit shall be first utilized for paying taxes, offsetting losses of previous years, setting aside as legal reserve 10% of the remaining profit, unless the legal reserve has reached the Company’s total paid-up capital. The remaining profit shall be set aside or reverse a special reserve in accordance with the laws and regulations, and then any remaining profit together with any undistributed retained earnings shall be used by the Company’s board of directors as the basis for proposing a distribution plan, which should be resolved in the shareholders’ meeting for distribution of dividends and bonus to shareholders. For the policies on distribution of employees’ compensation and remuneration of directors, refer to “employee’s compensation and remuneration of directors ” in Note 20,(7).

The Company distributes both cash and share dividends, taking into account its profitability, future capital expenditure requirements and cash position. The distribution of cash dividends should not be less than 10% of the total dividends of the year. The Company may raise the percentage of cash dividend distribution only if the Company’s earnings and cash position are strong.

An appropriation of earnings to the legal reserve shall be made until the legal reserve equals the Company’s paid-in capital. The legal reserve may be used to offset deficits. If the Company has no deficit and the legal reserve has exceeded 25% of the Company’s paid-in capital, the excess may be transferred to capital or distributed in cash.

Pursuant to existing regulations, the Company is required to set aside additional special reserve equivalent to the net debit balance of the other equity interests. Any special reserve appropriated may be reversed to the extent that the net debit balance reverses and is thereafter distributed.

The appropriations of earnings and dividends per share for 2022 and 2021 were approved in the shareholders’ meetings on June 13, 2023 and June 15, 2022, respectively, were as follows:

Legal reserve Cash dividends Cash dividends per share (NT$)		2022 $ 26,506 $ 220,000 $ 2.2		2021 $ 22,088 $ 190,000 $ 1.9

The appropriation of earnings for 2023 had been proposed by the Company’s board of directors on March 12, 2024. The appropriation and dividends per share were as follows:

Legal reserve Cash dividends Cash dividends per share (NT$)		2023 $ 27,613 $ 240,000 $ 2.4

The above appropriations for cash dividends were resolved by the Company’s board of directors, other additional distribution should be resolved in the shareholders’ meeting to be held on June 12, 2024.

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(4) Special reserves

On the first-time adoption of IFRSs, the Company appropriated for special reserve, the amount that was the same as the cumulative translation differences transferred to retained earnings, which was $17,619 thousand.

• (5) Other equity items

• A. Exchange differences on translating the financial statements of foreign operations

19.	2023 Balance at January 1 ( $ 10,592 ) Exchange differences on translating the financial statements of foreign operations 861 Share from subsidiaries, associates and joint venture accounted for using the equity method ( 169) Balance at December 31 ( $ 9,900 ) B. Unrealized gain (loss) on financial assets at FVTOCI 2023 Balance at January 1 $ 14,339 Unrealized (loss) gain - equity instruments 7,289 Balance at December 31 $ 21,628 Revenue 2023 Revenue from contracts with customers Contract revenue and revenue from sale of goods $ 4,666,572 Revenue from rendering of services 1,431,116 Rental income Rental income from equipment 17,731 $ 6,115,419			2022
			( ( (	$ 20,350 ) 9,855 97) $ 10,592 ) 2022
				$ 13,429 910 $ 14,339 2022
			$	4,328,914 1,327,885 17,880 5,674,679
			$

(1) Contract information Revenue from contracts with customers

Contract revenue comes from rendering of computer software and hardware integration services according to contract, which is recognized by reference to the stage of completion of contract activity. The consideration promised is paid by customers based on the schedule in the contract.

Revenue from the sale of goods is recognized when performance obligations are satisfied. The performance obligations are satisfied when customers obtained control and right of use of the promised good and bear inventory risks. Revenue from rendering of services

Revenue from rendering of services comes from maintenance services. The Company requires partial payments from the customers when the contract is signed. Revenue is recognized on a straight-line basis during the contract period.

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(2) Contract balances

Accounts receivable (Note 10) Contract assets System integration services Less: Allowance for impairment loss Contract assets - current Contract liabilities System integration services	December 31, 2023 $ 1,336,959 $ 471,815 - $ 471,815 $ 455,424	December 31, 2022 $ 1,394,927 $ 478,405 - $ 478,405 $ 220,867

The changes in the balance of contract assets and contract liabilities primarily result from the timing difference between the Company’s performance and the respective customer’s payment. Except for adjustments resulting from the changes in the measure of progress, there was no significant change in the current period.

1. Net profit (1) Interest income

Net profit (1) Interest income
Bank deposits (2) Other income Government grants Marketing incentive income Rental income Others (3) Other gains and losses Gain on disposal of property, plant and equipment Net gain on fair value changes of financial assets mandatorily classified as at FVTPL Net foreign exchange gain Others (4) Finance costs Interest on lease liabilities Interest on bank loans Others			$	2023 7,535 2023 30,619 13,319 4,692 3,737 52,367 2023 $ 164 2,300 1,303 2,911) $ 856 2023 2,110 697 3 2,810		2022 $ 2,904 2022
			$			$ 39,070 10,563 4,930 6,243 $ 60,806 2022
			$
			(		( (	$ 382 426 1,707 11,600) $ 9,085 ) 2022
			$			$ 311 - 2 $ 313
			$

• 37 -

(5) Depreciation and amortization

(5)	Depreciation and amortization
			2023		2022
	An analysis of depreciation by
	function
	Operating costs	$	20,330	$	19,629
	Operating expenses		80,019		81,708
		$	100,349	$	101,337
	An analysis of amortization by
	function
	Operating expenses	$	100	$	100
(6)	Employee benefits expenses
			2023		2022
	Short-term employee benefits
	Salary	$	1,351,135	$	1,266,755
	Labor and health insurance		119,283		110,272
	Others		48,323		46,741
			1,518,741		1,423,768
	Post-employment benefits (Note
	17)
	Defined contribution plans		59,895		55,739
	Defined benefit plans		812		718
			60,707		56,457
	Total employee benefits
	expense	$	1,579,448	$	1,480,225
	An analysis of employee benefits
	expense by function
	Operating costs	$	570,980	$	582,220
	Operating expenses		1,008,468		898,005
		$	1,579,448	$	1,480,225

• (7) Employees’ compensation and remuneration of directors

According to the Articles of Incorporation of the Company, the Company accrued employees’ compensation at rates of no less than 3%. The employees’ compensation in the amounts of $10,300 thousand and $9,600 thousand, representing 3.02% and 3.01% of net profit before tax for the years ended December 31, 2023 and 2022, respectively, were approved by the Company’s board of directors on March 12, 2024 and March 17, 2023, respectively. The Company did not accrue remuneration of directors for the years ended December 31, 2023 and 2022.

If there is a change in the amounts after the annual financial statements are authorized for issue, the differences are recorded as a change in the accounting estimate.

There is no difference between the actual amounts of employees’ compensation and remuneration of directors paid and the amounts recognized in the financial statements for the years ended December 31, 2022 and 2021.

Information on the employees’ compensation resolved by the Company’s board of directors in 2024 and 2023 is available at the Market Observation Post System website of the Taiwan Stock Exchange.

• 38 -

21. Income tax

• (1) Major components of tax expense recognized in profit or loss

Current tax In respect of the current year Adjustments for prior years Deferred tax In respect of the current year Income tax expense recognized in profit or loss		2023 $ 52,393 ( 1,632 ) 2,047 $ 52,808		2022
				$ 59,006 ( 2,023 ) 1,939 $ 58,922

A reconciliation of accounting profit and income tax expense is as follows:

Profit before income tax Income tax expense calculated at the statutory rate Nondeductible expenses in determining taxable income Tax-exempt income Investment tax credits Unrecognized deductible temporary differences Adjustments for prior years’ tax Income tax expense recognized in profit or loss	( ( (	2023 $ 331,101 $ 66,220 2,937 1,208 ) 18,475 ) 4,966 1,632) $ 52,808	( ( (	2022 $ 309,652 $ 61,930 1,512 1,031 ) 9,428 ) 7,962 2,023) $ 58,922

• (2) Deferred tax assets and liabilities

The movements of deferred tax assets and deferred tax liabilities are as follows: For the year ended December 31, 2023

Deferred tax assets Temporary differences Unrealized write-downs of inventories Defined benefit obligations Others Deferred tax liabilities Temporary differences Unappropriated earnings of subsidiaries and associates		Opening Balance	Recognized in profit or loss $ 33 ( 3,029 ) 147 ( $ 2,849 ) $ 802	Recognized in other comprehensive income $ - 812 - $ 812 $ -	Closing Balance	Closing Balance
	(	$ 351 10,901 391 $ 11,643 $ 10,416 )			(	$ 384 8,684 538 $ 9,606 $ 9,614 )

• 39 -

For the year ended December 31, 2022

Deferred tax assets Temporary differences Unrealized write-downs of inventories Defined benefit obligations Others Deferred tax liabilities Temporary differences Unappropriated earnings of subsidiaries and associates		Opening Balance	Recognized in profit or loss ( $ 1,172 ) ( 930 ) 1 ( $ 2,101 ) $ 162	Recognized in other comprehensive income $ - ( 3,447 ) - ( $ 3,447 ) $ -	Closing Balance	Closing Balance
	(	$ 1,523 15,278 390 $ 17,191 $ 10,578 )			(	$ 351 10,901 391 $ 11,643 $ 10,416 )

• (3) Income tax recognized in other comprehensive income

Deferred tax In respect of the current year - Remeasurement of defined benefit plans		2023 $ 812 )		2022
	(			$ 3,447

• (4) Deductible temporary differences for which no deferred tax assets have been recognized in the balance sheets

December 31, 2023 December 31, 2022 Deductible temporary differences $ 335 $ 335

• (5) Income tax assessment

The income tax returns of the Company through 2021 have been assessed by the tax authorities.

22. Earnings per share

The earnings and weighted average number of ordinary shares outstanding in the computation of earnings per share were as follows:

Net profit for the year

Earnings used in the computation of basic earnings per share Earnings used in the computation of diluted earnings per share		2023 $ 278,293 $ 278,293		2022 $ 250,730 $ 250,730

• 40 -

Shares

Shares
Weighted average number of ordinary shares used in the computation of basic earnings per share Effect of potentially dilutive ordinary shares: Employees’ compensation Weighted average number of ordinary shares used in the computation of diluted earnings per share		2023 100,000 222 100,222	(Thousand shares) 2022
				100,000 447 100,447

Since the Company offered to settle compensation paid to employees in cash or shares, the Company assumed the entire amount of the compensation will be settled in shares and the resulting potential shares were included in the weighted average number of shares outstanding used in the computation of diluted earnings per share, as the effect is dilutive. Such dilutive effect of the potential shares is included in the computation of diluted earnings per share until the number of shares to be distributed to employees is resolved in the following year.

23. Capital management

The Company manages its capital to ensure that the Company will be able to continue as going concerns while maximizing the return to shareholders through the optimization of the debt and equity balance. The Company’s overall strategy remains unchanged from 2013.

The capital structure of the Company consists of net debt (borrowings offset by cash and cash equivalents) and equity attributable to owners of the Company (comprising issued capital, reserves, retained earnings and other equity).

The Company is not subject to any externally imposed capital requirements.

Key management personnel of the Company review the capital structure on an annual basis. As part of this review, the key management personnel consider the cost of capital and the risks associated with each class of capital. Based on recommendations of the key management personnel, in order to balance the overall capital structure, the Company may adjust the amount of dividends paid to shareholders, or the amount of new debt issued or existing debt redeemed

24. Financial instruments

• (1) Fair value of financial instruments not measured at fair value

The Company’s management believes the carrying amounts of financial assets and financial liabilities recognized in the financial statements approximate their fair values. Therefore, the carrying amounts of balance sheet is a reasonable basis for estimating the fair value.

• (2) Fair value of financial instruments that are measured at fair value on a recurring basis Fair value hierarchy

• December 31, 2023

Fair value hierarchy December 31, 2023
Financial assets at FVTPL Fund beneficial certificates Financial assets at FVTOCI Investments in equity instruments at FVTOCI - Listed shares - Unlisted shares		Level 1		Level 2 $ - $ - - $ -		Level 3 $ - $ - 1,595 $ 1,595		Total
		$ 10,000 $ 31,431 - $ 31,431						$ 10,000 $ 31,431 1,595 $ 33,026

• 41 -

December 31, 2022

December 31, 2022
Financial assets at FVTPL Fund beneficial certificates Financial assets at FVTOCI Investments in equity instruments at FVTOCI - Listed shares - Unlisted shares		Level 1 $ 19,505 $ 24,142 - $ 24,142		Level 2 $ - $ - - $ -		Level 3 $ - $ - 1,595 $ 1,595		Total
								$ 19,505 $ 24,142 1,595 $ 25,737

There were no transfers between Level 1 and Level 2 f in the current and prior periods.

• (3) Categories of financial instruments

Categories of financial instruments
Financial assets Mandatorily classified as at FVTPL Financial assets at amortized cost (Note 1) Financial assets at FVTOCI Equity instruments Financial liabilities Financial liabilities at amortized cost (Note 2)	December 31, 2023 $ 10,000 2,466,573 33,026 1,840,648	December 31, 2022
		$ 19,505 2,141,628 25,737 1,772,843

Note 1: The balances include financial assets measured at amortized cost, which comprise cash and cash equivalents, debt investments, notes receivable, accounts receivable and other receivables.

Note 2: The balances include financial liabilities measured at amortized cost, which comprise notes payable, accounts payable and other payables.

(4) Financial risk management objectives and policies

The Company's major financial instruments include equity and debt investments, accounts receivable, accounts payable and lease liabilities. The Company’s Corporate Treasury function provides services to the business, coordinates access to domestic and international financial markets, monitors and manages the financial risks relating to the operations of the Company through internal risk reports which analyze exposures by degree and magnitude of risks. These risks include market risk (including currency risk and interest rate risk), credit risk and liquidity risk.

• A. Market risk

The Company’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates (see a. below) and interest rates (see b. below).

• a. Foreign currency risk

The Company have foreign currency sales and purchases, which exposes the Company to foreign currency risk.

The carrying amounts of the Company’s foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period are set out in Note 28.

Sensitivity analysis

The Company is mainly exposed to USD.

The following details the Company’s sensitivity to a 10% increase and decrease in New Taiwan dollars (the functional currency) against the relevant

• 42 -

b.

foreign currencies. The sensitivity rate of 10% used when reporting foreign currency risk internally to key management personnel and representing management’s assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis included only outstanding foreign currency denominated monetary items and foreign currency forward contracts designated as cash flow hedges and adjusts their translation at the end of the reporting period for a 10% change in foreign currency rates. For the years ended December 31, 2023 and 2022, there would be an increase of $8,625 thousand and $5,205 thousand, respectively, in pre-tax profit associated with New Taiwan dollars strengthen 10% against USD. For a 10% weakening of New Taiwan dollars against USD, there would be an equal and opposite impact on pre-tax profit and the balances would be negative. The effect of exchange rate changes was mainly attributable to the exposure outstanding on USD cash, payables and borrowings, which were not hedged at the end of the reporting period. Interest rate risk

The Company is exposed to interest rate risk because the Company borrow funds at both fixed and floating interest rates. The risk is managed by the Company by maintaining an appropriate mix of fixed and floating rate borrowings.

The carrying amounts of the Company's financial assets and financial liabilities with exposure to interest rates at the end of the reporting period were as follows:

as follows:
Fair value interest rate risk - Financial assets - Financial liabilities Cash flow interest rate risk - Financial assets	December 31, 2023 $ 677,269 82,538 437,492	December 31, 2022
		$ 518,107 3,548 220,766

Sensitivity analysis

The sensitivity analysis below was determined based on the Company’s exposure to interest rates for non-derivative instruments at the end of the reporting period. For floating rate liabilities, the analysis was prepared assuming the amount of each liability outstanding at the end of the reporting period was outstanding for the whole year. A 25 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management’s assessment of the reasonably possible change in interest rates.

If interest rates had been 1 basis points higher/lower and all other variables were held constant, the Company’s pre-tax profit for the years ended December 31, 2023 and 2022 would increase/decrease by $1,094 thousand and $552 thousand, respectively.

B. Credit risk

Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in financial loss to the Company. As at the end of the reporting period, the Company’s maximum exposure to credit risk, which would cause a financial loss to the Company due to the failure of counterparties to discharge its obligation and due to the financial guarantees provided by the Company, could arise from the carrying amount of the respective recognized financial assets as stated in the balance sheets.

The Company adopted a policy of only dealing with creditworthy counterparties. Before trading with new customers, the Company assessed the credit quality of potential customer by internal credit checking and set the credit limit which is reassessed annually.

• 43 -

C. Liquidity risk

The Company manages liquidity risk by monitoring and maintaining a level of cash and cash equivalents deemed adequate to finance the Company’s operations and mitigate the effects of fluctuations in cash flows. In addition, management monitors the utilization of bank borrowings and ensures compliance with loan covenants.

The Company relies on bank borrowings as a significant source of liquidity. As of December 31, 2023 and 2022, the Company had available unutilized short-term bank loan facilities set out in b. below

a. Liquidity and interest risk rate table for non-derivative financial liabilities

The following table details the Company’s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The table has been drawn up based on the undiscounted cash flows of financial liabilities from the earliest date on which the Company can be required to pay. The table included both interest and principal cash flows. Specifically, bank loans with a repayment on demand clause were included in the earliest time band regardless of the probability of the banks choosing to exercise their rights. The maturity dates for other non-derivative financial liabilities were based on the agreed repayment dates.

December 31, 2023

	On Demand or	On Demand or
	Less than
	1 Month			1～3 months		3 months～1 year				1～5 years		More than 5 years
Non-derivative financial
liabilities
Non-interest bearing	$	-	$	1,840,648		$	-		$		-	$	-
Lease liabilities	3,621			7,242			31,440			41,892			-
Financial guarantee
contracts		-			-		423,170				-		-
	$ 3,621		$	1,847,890		$	454,610		$	41,892		$	-
Further information about the maturity							analysis		for	lease liabilities was as
follows:
	Less than 1 year						1 to 5 years				5 to 10 years
Lease liabilities	$			42,303		$	41,892 $					-
December 31, 2022
	On Demand or
	Less than
	1 Month			1～3 months		3 months～1 year				1～5 years		More than 5 years
Non-derivative financial
liabilities
Non-interest bearing	$	-	$	1,772,843		$	-		$		-	$	-
Lease liabilities		175		350			1,576			1,495			-
Financial guarantee
contracts		-			-		495,391				-		-
	$	175	$	1,773,193		$	496,967		$	1,495		$	-
Further information about the maturity							analysis		for	lease liabilities was as
follows:
	Less than 1 year						1 to 5 years				5 to 10 years
Lease liabilities	$			2,101		$		1,495 $				-

Further information about the maturity analysis for lease liabilities was as follows:

December 31, 2022

Further information about the maturity analysis for lease liabilities was as follows:

The amounts included above for financial guarantee contracts are the maximum amounts the Company could be required to settle under the arrangement with option to demand full guaranteed amount if that amount is claimed by the counterparty to the guarantee. Based on expectations at the end of the reporting period, the Company considers that it is more likely than not that no amount will be payable under the arrangement.

The amounts included above for variable interest rate instruments for both non-derivative financial assets and liabilities is subject to change if changes in variable interest rates differ from those estimates of interest rates determined at the end of the reporting period.

• 44 -

b. Financing facilities

December 31, 2023 December 31, 2022

Unsecured bank financing facilities, reviewed annually and payable on demand:

- Amount used - Amount unused	$ 727,236 1,657,764 $ 2,385,000	$ 418,077 1,416,923 $ 1,835,000

1. Related Parties Transactions

Besides information disclosed elsewhere in the other notes, details of transactions between the Company and other related parties are disclosed below.

• (1) Related-party and its relationship

Related Party Relationship Furly Investment Co., Ltd. (Furly Investment) Substantive related party Chuan Gao Investment Co., Ltd. (Chuan Gao Investment) Substantive related party Welida Investment Co., Ltd. Substantive related party DBMaker Japan Inc. Associates CloudMaster Co., Ltd. Joint venture Netmaker Technology Co., Ltd. Subsidiaries CASEMaker Inc. Subsidiaries WiseMaker Technology Co. Subsidiaries Syscom Computer(Thailand)Co., Ltd. Subsidiaries Coach Technology Management Inc. Subsidiaries Syscom Computer(Shenzhen)Co., Ltd. Subsidiaries Xian Linan Computer Co., Ltd. Subsidiaries

• (2) Operating revenue (sales, maintenance and rental revenue)

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Related Party Categories 2023 2022
Subsidiaries $ 4,635 $ 17,058
Associates 120 230
Joint venture 1,131 113
$ 5,886 $ 17,401
(3) Operating costs (sales, maintenance and rental revenue)
Related Party Categories 2023 2022
Subsidiaries $ 52,299 $ 61,543
Associates 2,797 9,580
Joint venture 4 2,669
$ 55,100 $ 73,792
----- End of picture text -----

• 45 -

(4) Receivables from related parties (excluding loans to related parties)

Line Item Accounts receivable	Related Party Categories Subsidiaries Associates Joint venture		December 31, 2023 $ 1,226 - 247 $ 1,473		December 31, 2022
					$ 15,075 178 72 $ 15,325

The outstanding accounts receivable from related parties are unsecured. For the years ended December 31, 2023 and 2022, no impairment loss was recognized on accounts receivable from related parties.

• (5) Payables to related parties (excluding loans from related parties)

Line Item Accounts payable	Related Party Categories Subsidiaries Associates Joint venture Substantive related party		December 31, 2023 $ 6,653 1,206 1,500 9 $ 9,368		December 31, 2022
					$ 26,520 2,151 1,473 10 $ 30,154

The outstanding accounts payable from related parties are unsecured.

• (6) Acquisition of property, plant and equipment

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----- Start of picture text -----

Purchase Price
Related Party Categories 2023 2022
Subsidiaries $ - $ 87
Associates 4,295 7,660
$ 4,295 $ 7,747
(7) Lease agreement
Related Party
Categories/Name 2023 2022
Acquisition of right-
of-use assets Substantive related party
Chuan Gao Investment $ 68,488 $ -
-
Furly Investment 51,843
$ 120,331 $ -
Related Party Categories December 31, December 31,
Line Item /Name 2023 2022
Lease liabilities Substantive related party
Chuan Gao Investment $ 46,923 $ 1,037
-
Furly Investment 34,923
$ 81,846 $ 1,037
Related Party Categories
Line Item /Name 2023 2022
Finance costs Substantive related party
Chuan Gao Investment $ 1,194 $ 163
Furly Investment 895 106
$ 2,089 $ 269
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• 46 -

(8) Endorsement and guarantee

Refer to Table 1 for information relating to endorsements and guarantees provided with related parties.

• (9) Rental expenses

Rental expenses
Line Item Operating expenses	Related Party Categories/Name Substantive related party Chuan Gao Investment Furly Investment others		2023 $ 4,880 1,302 - $ 6,182		2022
					$ 2,709 1,565 72 $ 4,346

(10) Rental revenue

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Line Item Related Party Categories/Name 2023 2022
Other income Joint venture
Cloudmaster Co., Ltd. $ 1,779 $ 1,685
Subsidiaries
Wisemaker Technology Co. 1,132 1,479
Netmaker Technology Co., 500 484
Ltd.
Others 16 18
1,648 1,981
$ 3,427 $ 3,666
----- End of picture text -----

• (11) Compensation of key management personnel

Short-term employee benefits Post-employment benefits		2023 $ 327,660 12,765 $ 340,425		2022
				$ 291,365 12,024 $ 303,389

The remuneration of directors and key executives was determined by the remuneration committee based on the performance of individuals and market trends.

26. Assets Pledged as Collateral

The assets pledged as collaterals for system design contract, bank loans and for product warranty were as follows:

Pledge deposits (classified as financial assets at amortized cost)	December 31, 2023 $ 326,187	December 31, 2022 $ 230,417

27. Significant Contingent Liabilities and Unrecognized Commitments

As of December 31, 2023, for the contracts with customers and the application for government grants, the Company issued guarantee notes and had bank guarantee amounting to $100,272 thousand and $727,236 thousand, respectively.

28. Significant Assets and Liabilities Denominated in Foreign Currencies

The Company’s significant financial assets and liabilities denominated in foreign currencies aggregated by the foreign currencies other than functional currencies and the related exchange rates between foreign currencies and respective functional currencies were as follows:

• 47 -

December 31, 2023

December 31, 2023
Financial assets Monetary items USD JPY HKD Non-monetary items USD JPY Financial liabilities Monetary items USD JPY HKD Non-monetary items USD December 31, 2022 Financial assets Monetary items USD JPY HKD Non-monetary items USD JPY Financial liabilities Monetary items USD JPY Non-monetary items USD	Foreign Currencies $ 3,089 99 236 3,151 57,237 281 5,553 79 3,089 Foreign currency $ 2,783 921 355 3,210 66,636 1,088 9,255 2,324	Exchange rate 30.705 0.2172 3.929 30.705 0.2172 30.705 0.2172 3.929 30.705 Exchange rate 30.71 0.2324 3.938 30.71 0.2324 30.71 0.2324 30.71	Carrying amount
			$ 94,862 22 927 96,751 12,432 8,614 1,206 310 94,834 Carrying amount
			$ 85,455 214 1,399 98,578 15,486 33,408 2,151 71,381

The significant realized and unrealized foreign exchange gains (losses) were as follows:

Foreign currency USD	2023	Net Foreign Exchange Gain (Loss) $ 1,303	2022
	Exchange rate 31.155(USD: NTD)		Exchange rate 29.805 (USD: NTD)	Net Foreign Exchange Gain (Loss)
				$ 1,707

1. Separately Disclosure Items

2. (1) Information about significant transactions:

3. A. Financing provided to others: None.

4. B. Endorsements/guarantees provided (Table 1).

5. C. Marketable securities held (excluding investment in subsidiaries, associates and joint ventures) (Table 2).

6. 48 -

7. D. Marketable securities acquired and disposed of at costs or prices at least NT$300 million or 20% of the paid-in capital: None.

8. E. Acquisition of individual real estate at costs of at least NT$300 million or 20% of the paid-in capital: None.

9. F. Disposal of individual real estate at prices of at least NT$300 million or 20% of the paidin capital: None.

10. G. Total purchases from or sales to related parties amounting to at least NT$100 million or 20% of the paid-in capital: None.

11. H. Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital: None.

12. I. Trading in derivative instruments: None.

13. (2) Information on investees: (Table 3).

14. (3) Information on investments in Mainland China:

15. A. Information on any investee company in mainland China, showing the name, principal business activities, paid-in capital, method of investment, inward and outward remittance of funds, ownership percentage, investment income or loss, carrying amount of the investment at the end of the period, repatriations of investment income, and limit on the amount of investment in the mainland China area: (Table 4).

16. B. Any of the following significant transactions with investee companies in mainland China, either directly or indirectly through a third party, and their prices, payment terms, and unrealized gains or losses: None.

    • a. The amount and percentage of purchases and the balance and percentage of the related payables at the end of the period.

    • b. The amount and percentage of sales and the balance and percentage of the related receivables at the end of the period.

    • c. The amount of property transactions and the amount of the resultant gains or losses.

    • d. The balance of negotiable instrument endorsements or guarantees or pledges of collateral at the end of the period and the purposes.

    • e. The highest balance, the end of period balance, the interest rate range, and total current period interest with respect to financing of funds.

    • f. Other transactions that have a material effect on the profit or loss for the year or on the financial position, such as the rendering or receipt of services.

17. (4) Information of major shareholders: list all shareholders with ownership of 5% or greater showing the name of the shareholder, the number of shares owned, and percentage of ownership of each shareholder:(Table 5)

18. 49 -

SYSCOM COMPUTER ENGINEERING CO. Endorsements/Guarantees Provided For the Year Ended December 31, 2023

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Table 1 (In Thousands of New Taiwan Dollars/Foreign Currency)
Endorsee/ Ratio of
Guarantee Accumulated Endorsement
Endorsement Endorsement
Limits on Outstanding Endorsement /Guarantee
Maximum Amount /Guarantee /Guarantee
Endorsement/ Endorsement/ Amount Endorsed/ /Guarantee to Aggregate Given on
Endorser/ Endorsed/ Actual Borrowing Given by Given by
No. Guarantee Given Guarantee at the Guaranteed by Net Equity in Endorsement/ Behalf of
Guarantor Guaranteed During Amount Parent on Subsidiaries
Name Relationship on Behalf of the Period End of the Period Collateral Latest Guarantee Limit Behalf of on Behalf of Companies in
Each Party (Note 1) Financial Mainland
Subsidiaries Parent
Statements China
(%)
0 Syscom Syscom Computer Indirect 20% of the net $ 334,685 $ 282,486 $ 153,125 $ - 13.36 50% of the net Yes No Yes
Computer (Shenzhen) Co., Ltd. subsidiary worth ( USD 10,900 ) ( USD 9,200 ) ( USD 4,987 ) worth
Engineering $422,841 $1,057,104
Co.
Xian Linan Computer Co., Indirect Same as above 60,642 40,684 29,947 - 1.92 Same as above Yes No Yes
Ltd. subsidiary ( USD 1,975 ) ( USD 1,325 ) ( USD 975 )
Netmaker Technology Co., Subsidiaries Same as above 85,000 85,000 7,500 - 4.02 Same as above Yes No No
Ltd.
Coach Technology Subsidiaries Same as above 15,000 15,000 - - 0.71 Same as above Yes No No
Management Inc.
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Note:The above amounts were translated into New Taiwan dollar at the prevailing exchange rate as of December 31, 2023.

• 50 -

Table 2

SYSCOM COMPUTER ENGINEERING CO. Marketable securities held December 31, 2023

(In Thousands of New Taiwan Dollars and in thousands of Shares (Thousands of Units))

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December 31, 2023
Relationship with the Holding
Holding Company Name Type and name of marketable securities Financial Statement Account Number of Percentage of Fair value Note
Company Carrying amount
shares/units Ownership (%)
SYSCOM COMPUTER Beneficial certificates
ENGINEERING CO.
Yuanta Japan Leaders Equity Fund － Financial assets at fair value through 1,000 $ 10,000 - $ 10,000
profit or loss - current
Stocks
Engsound Technical Enterprise Co., － Financial assets at fair value through 273 1,595 9.09 1,595
Ltd. other comprehensive income - non-
current
Turn Cloud Technology Service Inc. － Financial assets at fair value through 195 29,898 0.90 29,898
other comprehensive income - non-
current
Shin Kong Financial Holding Co., － Financial assets at fair value through 166 1,470 - 1,470
Ltd. other comprehensive income - non-
current
Dimension Computer Technology － Financial assets at fair value through 2 63 - 63
Co., Ltd. other comprehensive income - non-
current
Coach Technology Management Beneficial certificates
Inc.
Fuh Hwa Money Market Fund － Financial assets at fair value through 31 457 - 457
profit or loss - current
----- End of picture text -----

Note 1: The securities referred to in this table include stocks, bonds, mutual funds and securities derived from the above - mentioned items within the scope of International Financial Reporting Standard No. 9 “Financial Instruments”. Note 2: The above shares or certificates were not provided as guarantee.

• 51 -

SYSCOM COMPUTER ENGINEERING CO. Information on investees

For the Year Ended December 31, 2023

Table 3

(In Thousands of New Taiwan Dollars/Thousands of Shares)

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Original investment amount Holding at the end of the period
Investor Company Investee Company Location Main Businesses and Products December 31, 2023 December 31, 2022 Number of Shares Percentage of Carrying amount Net Income (Loss) of the Investee Share of Profit (Loss) Note
(Thousands) Ownership
SYSCOM COMPUTER Coach Technology Management Inc. Taipei City Diagnostic consulting for corporate $ 19,200 $ 19,200 1,950 97.50 $ 6,550 $ 2,276 $ 2,219 Subsidiaries
ENGINEERING CO. management, domestic and foreign
investment referral, and computerized
design consulting.
Casemaker Inc. California, Sales of computer software, hardware USD 1,300 USD 1,300 1,300 100.00 96,751 ( 1,922) ( 1,922) Subsidiaries
U.S.A. and related products.
SYSCOM INTERNATIONAL INC. Cayman Investments in other businesses USD 6,050 USD 6,050 6,050 100.00 ( 94,834 ) ( 25,160 ) ( 25,160 ) Subsidiaries
Islands
Netmaker Technology Co., Ltd. Taipei City Information software, data processing 18,763 18,763 2,858 86.60 35,643 ( 4,752 ) ( 4,115 ) Subsidiaries
and electronic information supply
services
Wisemaker Technology Co. Taipei City Sales of computer software, hardware 42,191 41,697 2,679 99.24 60,187 4,003 3,982 Subsidiaries
and related products.
DBMaker Japan, Inc. Tokyo, Development and sales of computer JPY 53,260 JPY 53,260 5 49.89 12,432 ( 4,184 ) ( 2,087 ) Investee accounted
Japan system software and hardware for using the
equity method
Syscom Computer(Thailand)Co., Ltd. Thailand Development and maintenance of THB 33,134 THB 33,014 3,440 92.47 3,004 ( 178) ( 165) Subsidiaries
software and other businesses
Cloudmaster Co., Ltd. Taipei City Information software, data processing 65,000 65,000 6,500 50.00 55,426 3,128 1,564 Investee accounted
and electronic information supply for using the
services equity method
Coach Technology Syscom Computer(Thailand)Co., Ltd. Thailand Development and maintenance of THB 200 THB 200 20 0.54 17 ( 178) Not applicable Subsidiary
Management Inc. software and other businesses
----- End of picture text -----

Note: The foreign currency amount of the net income of the investee is expressed in New Taiwan dollars at the average exchange rate in 2023.

• 52 -

SYSCOM COMPUTER ENGINEERING CO. Information on investments in Mainland China For the Year Ended December 31, 2023

Table 4

(In Thousands of New Taiwan Dollars/Foreign Currency)

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Accumulated Outward Remittance of Funds Accumulated Outward Accumulated
Investee Company Main Businesses and Products Paid-in capital InvestmentMethod of Investment from Remittance for Taiwan as of Outward Inward Investment from Remittance for Taiwan as of Net Income (Loss) of the Investee % Ownership of Direct or Indirect Investment Gain (Loss) Carrying Amount as December 31, 2023of Investment Income as of December 31, Repatriation of Note
Investmen
January 1, 2023 December 31, 2023 2023
Syscom Computer equipment $ 138,173 Note 1 $ 128,040 $ - $ - $ 128,040 ( $ 25,361 ) 98.27% ( $ 24,922 ) ( $ 96,311 ) $ -
Computer(Shenzhen)Co software ( USD 4,500 ) ( USD 4,170 ) ( USD 4,170 ) ( (USD 814 )) ( (USD 800 )) ( (USD 3,137 ))
., Ltd. development, sales (Note 2) (Note 2) (Note 2)
of self-developed
technical
achievements
services, computer
system integration
and network wiring
engineering.
Xian Linan Computer Co., Development and 70,622 Note 1 46,610 - - 46,610 ( 2,513 ) 74.38% ( 1,869 ) ( 4,532 ) -
Ltd. manufacture of ( USD 2,300 ) ( USD 1,518 ) ( USD 1,518 ) ( (USD 81 )) ( (USD 60 )) ( (USD 148 ))
computer (Note 2) (Note 2) (Note 2)
equipment and
computer software;
sale of self-
manufactured
products and
provision of
technical services.
Accumulated Outward Remittance for Investment Upper Limit on the Amount of Investment
in Mainland China as of Investment Amounts Authorized by Investment Stipulated by Investment Commission, MOEA
Commission, MOEA
December 31, 2023 (Note 3)
$ 174,650 $ 174,650
( USD 5,688 ) ( USD 5,688 ) (Note 1(2))
$ 1,268,524
13,394
( USD 436 ) (Note 1(1))
----- End of picture text -----

Note 1: Investment methods are classified into the following two categories:

(1) An investee of CASEMaker, Inc., a wholly owned subsidiary of Syscom Computer Engineering Company and capital increase from capital surplus.

• (2) An investee of Syscom International Inc., a wholly owned subsidiary of Syscom Computer Engineering Company.

Note 2: Amount was recognized based on the financial statements which were audited by CPAs on December 31, 2023.

Note 3: According to the "Principles for the Review of Investment or Technical Cooperation in the Mainland Area" stipulated by the Investment Commission of the Ministry of Economic Affairs (MOEAIC), the upper limit is calculated as follows: 60% of the shareholders ’ equity = $2,114,207 × 60% = $1,268,524

Note 4: The foreign currency amounts of original investment amount and carrying value are expressed in New Taiwan dollars at exchange rate as of December 31, 2023. The foreign currency amount of net income is expressed in New Taiwan dollars at average exchange rate for the year ended December 31, 2023.

• 53 -

SYSCOM COMPUTER ENGINEERING CO. Information on major shareholders December 31, 2023

Table 5

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Shareholding
Name of major shareholder Shareholding
Number of shares held
percentage
Jui-Fu Liu 18,346,787 18.34%
Chi-Shan Liu 7,598,911 7.59%
Su-Chen Yang 7,256,001 7.25%
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Note: The information of major shareholders presented in this table is provided by the Taiwan Depository & Clearing Corporation based on the number of ordinary shares and preferred shares held by shareholders with ownership of 5% or greater, that have been issued without physical registration (including treasury shares) by the Corporation as of the last business day for the current quarter. The share capital in the parent company only financial statements may differ from the actual number of shares that have been issued without physical registration because of different preparation basis.

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§ THE CONTENTS OF STATEMENTS OF MAJOR ACCOUNTING ITEMS §

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Item Number/Index
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Item	Number/Index
Major Accounting Items In Assets, Liabilities And
Equity
Statement of cash and cash equivalents	StatementI
Statement of accounts receivable	StatementII
Statement of inventories	StatementIII
Statement of financial assets at fair value through	Note8
other comprehensive income - non-current
Statement of changes in property, plant, and	Note13
equipment
Statement of deferred income tax assets	Note21
Statement of changes in investments accounted for	StatementIV
using equity method
Statement of accounts payable	StatementV
Statement of other payables	Note16
Statement of deferred income tax liabilities	Note21
Major Accounting Items In Profit Or Loss
Statement of operating costs	StatementVI
Statement of operating expenses	StatementVII
Statement of employee benefits, depreciation and	StatementVIII
amortization expenses by function

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SYSCOM COMPUTER ENGINEERING CO.

Statement of cash and cash equivalents

DECEMBER 31,2023

Statement I

(In Thousands of New Taiwan Dollars/foreign currency, Unless Stated Otherwise)

Item Bank deposits（Note） Demand deposits（include NTD433,886 thousand、 JPY99 thousand、USD87 thousand and HKD236 thousand） Checking accounts Cash on hand Commercial papers Note：USD1=NT$30.705。 JPY1=NT$0.2172。 HKD1=NT$3.929。	Maturity date	Annual Interest Rate		Amount
				$ 437,492 39 405 294,961 $ 732,897

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SYSCOM COMPUTER ENGINEERING CO.

Statement of accounts receivable

DECEMBER 31,2023

Statement II

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

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The Company’s name Amount
Related parties
Netmaker Technology Co., Ltd. $ 1,226
Others （ Note ） 247
1,473
Non-related parties
Chunghwa Telecom Co., Ltd. - Network
Technology Group 226,660
Chunghwa Telecom Co., Ltd. -
Information Technology Group 131,883
Others （ Note ） 977,712
1,336,255
Less: Allowance for impairment loss 769
1,335,486
$ 1,336,959
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Note: The amount of individual company included in others does not exceed 5% of the account balance.

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SYSCOM COMPUTER ENGINEERING CO.

Statement of inventories

DECEMBER 31,2023

Statement III

(In Thousands of New Taiwan Dollars)

Item Prepayments for contracts Commodities Maintenance materials Inventories in transit	Description Cost of computer hardware, software and labor Computer hardware Parts, etc. Computer hardware		Book value $ 244,401 205,959 376 5,397 $ 456,133		Net realizable value
					$ 244,401 210,861 376 5,397 $ 461,035

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SYSCOM COMPUTER ENGINEERING CO.

Statement of changes in investments accounted for using the equity method

DECEMBER 31,2023

Statement IV

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise /Thousands of Shares)

Name of investee Company Investments accounted for using equity method Unlisted stock Casemaker, Inc. Netmaker Technology Co., Ltd. Wisemaker Technology Co. DBMaker Japan Inc. Coach Technology Management Inc. Cloudmaster Co., Ltd. Syscom Computer(Thailand)Co., Ltd. Other non-current liabilities Unlisted shares SYSCOM INTERNATIONAL INC.	Balance, January1,2023 Shares Amount 1,300 $ 98,578 2,858 39,271 2,665 58,256 5 15,486 1,950 4,331 6,500 54,032 3,400 3,105 273,059 6,050 ( 71,381) $ 201,678	Balance, January1,2023 Shares Amount 1,300 $ 98,578 2,858 39,271 2,665 58,256 5 15,486 1,950 4,331 6,500 54,032 3,400 3,105 273,059 6,050 ( 71,381) $ 201,678	Addition Shares Amount - $ - - - 14 494 - - - - - - 40 108 602 - - $ 602	Addition Shares Amount - $ - - - 14 494 - - - - - - 40 108 602 - - $ 602	Decrease Shares Amount - $ - - - - - - - - - - - - - - - - $ -	Decrease Shares Amount - $ - - - - - - - - - - - - - - - - $ -		Increase (Decrease) in Using the Equity Method （Note4） $ 1,827 ) 3,628 ) 1,437 3,054 ) 2,219 1,394 209) 3,668) 23,453) $ 27,121 )	Balance,December 31,2023 Shares Percentage of Ownership (%) Amount 1,300 100.00 $ 96,751 2,858 86.60 35,643 2,679 99.24 60,187 5 49.89 12,432 1,950 97.50 6,550 6,500 50.00 55,426 3,440 92.47 3,004 269,993 6,050 100.00 ( 94,834) $ 175,159	Balance,December 31,2023 Shares Percentage of Ownership (%) Amount 1,300 100.00 $ 96,751 2,858 86.60 35,643 2,679 99.24 60,187 5 49.89 12,432 1,950 97.50 6,550 6,500 50.00 55,426 3,440 92.47 3,004 269,993 6,050 100.00 ( 94,834) $ 175,159	Balance,December 31,2023 Shares Percentage of Ownership (%) Amount 1,300 100.00 $ 96,751 2,858 86.60 35,643 2,679 99.24 60,187 5 49.89 12,432 1,950 97.50 6,550 6,500 50.00 55,426 3,440 92.47 3,004 269,993 6,050 100.00 ( 94,834) $ 175,159		Net Equity Value or Market Price
	Shares 1,300 2,858 2,665 5 1,950 6,500 3,400 6,050		Shares - - 14 - - - 40 -		Shares - - - - - - - -				Shares 1,300 2,858 2,679 5 1,950 6,500 3,440 6,050	Percentage of Ownership (%) 100.00 86.60 99.24 49.89 97.50 50.00 92.47 100.00
		(					( ( ( ( ( ( (				(	(	$ 96,751 （Note1） 35,643 （Note1） 60,187 （Note1） 12,432 （Note2） 5,957 （Note1） 55,426 （Note1） 3,004 （Note1） 269,400 94,834) （Note1） $ 174,566

Note 1: The amounts of net equity value were based on audited financial statements on December 31, 2023.

Note 2: The amounts of net equity value were based on financial statements which have not been audited on December 31, 2023.

Note 3: Investments using the equity method were not provided as guarantee.

Note 4: Including

(1) Exchange differences on translating the financial statements of foreign operations $ 861 (2) Share of profit or loss of subsidiaries, associates and joint ventures ( 25,684 ) (3) Difference between consideration and carrying amount of subsidiaries acquired ( 272 ) (4) Share of the other comprehensive income (loss) of subsidiaries, associates and joint ventures accounted for using the equity method 916 (5) Acquisition of cash dividends from the investee company ( 2,942 ) ( $ 27,121 )

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SYSCOM COMPUTER ENGINEERING CO.

Statement of accounts payable

DECEMBER 31,2023

Statement V

(In Thousands of New Taiwan Dollars)

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The Company’s name Amount
Related parties
Netmaker Technology Co., Ltd. $ 5,802
Others （ Note ） 3,566
9,368
Non-related parties
Zero One Technology Co., Ltd 106,834
Metaage Corporation 105,067
BESTCOM Infotech Corp 102,878
Others （ Note ） 1,119,030
1,433,809
$ 1,443,177
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Note: The amount of individual company included in others does not exceed 5% of the account balance.

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SYSCOM COMPUTER ENGINEERING CO.

Statement of operating costs

FOR THE YEAR ENDED DECEMBER 31,2023

Statement VI

(In Thousands of New Taiwan Dollars)

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Item Amount
Inventory at the beginning of the year (Note) $ 422,747
Add: Purchases in the current year 2,699,288
Cost of invested software in the current year
(including labor and other related expenses) 223,008
Research and development expenses,
operating expenses, and transferred
maintenance materials 497,946
Costs recognized based on the percentage of
completion method (including the wiring
costs of outsourced projects) 320,071
Loss on decline in value of inventories 165
Less: Transferred maintenance, leased assets, and
other purchases 174,536
Inventory at the end of the year (Note) 457,640
Cost of goods sold 3,531,049
Maintenance materials at the beginning of the year
(Note) 387
Add: Purchases in the current year 22,858
Subcontracted works 473,151
Transferred operating expenses 373,648
Transferred merchandises 166,634
Less: Transfer of costs of goods sold, prepayments
for purchases and other expenses 17,019
Maintenance materials at the end of the year
(Note) 412
Maintenance cost 1,019,247
Rental costs 14,185
$ 4,564,481
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Note: The above statement indicates that the amount of all items regarding inventories is recognized by original costs of inventories, with no deduction of allowance for inventory valuation losses.

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SYSCOM COMPUTER ENGINEERING CO.

Statement of operating expenses

FOR THE YEAR ENDED DECEMBER 31,2023

Statement VII

(In Thousands of New Taiwan Dollars)

Item Salary expenses Depreciation expenses Insurance premiums Others (Note) Total		Selling and marketing expenses $ 695,940 72,435 70,391 208,373 $ 1,047,139	Research and development Expenses	Research and development Expenses
				$ 176,754 7,584 - 20,624 $ 204,962

Note: The amount of individual company included in others does not exceed 5% of the account balance.

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SYSCOM COMPUTER ENGINEERING CO.

Statement of employee benefits, depreciation and amortization by function

FOR THE YEARS ENDED DECEMBER 31,2023 AND 2022

Statement VIII

(In Thousands of New Taiwan Dollars)

Employee benefits expenses Salary expenses Labor and health insurance expenses Pension expenses Directors’ remuneration Other employee benefits expenses Depreciation expenses Amortization expenses		2023		Total $ 1,350,211 119,283 60,707 924 48,323 $ 1,579,448 $ 100,349 $ 100		2022
	Classified as Operating Costs $ 478,441 48,892 26,548 - 17,099 $ 570,980 $ 20,330 $ -	Classified as Operating Expenses $ 871,770 70,391 34,159 924 31,224 $ 1,008,468 $ 80,019 $ 100			Classified as Operating Costs $ 490,788 48,257 25,825 - 17,350 $ 582,220 $ 19,629 $ -	Classified as Operating Expenses $ 775,058 62,015 30,632 909 29,391 $ 898,005 $ 81,708 $ 100		Total
								$ 1,265,846 110,272 56,457 909 46,741 $ 1,480,225 $ 101,337 $ 100

• Note 1: The Company's average number of employees in 2023 and 2022 were 1,231 and 1,177, respectively, of which the average number of directors who did not serve as employees were both 5. The calculation basis for employee benefit expenses is consistent.

• Note 2: The average employee benefits expense for the current year was NT$1,288 thousand ("Total employee benefit expense for the current year - Total directors’ remuneration” / “Number of employees for the current year - Number of directors who are not concurrently serving as employees”).

• The average employee benefits expense for the previous year was NT$1,262 thousand ("Total

• employee benefit expense for the previous year - Total directors’ remuneration” / “Number of employees for the previous year - Number of directors who were not concurrently serving as employees”).

• Note 3: The average employee benefits expense for the current year was NT$1,101 thousand (Total salary expenses for the current year / “Number of employees for the current year - Number of directors who are not concurrently serving as employees”).

• The average employee benefits expense for the previous year was NT$1,080 thousand (Total

• salary expenses for the previous year / “Number of employees for the previous year - Number of directors who were not concurrently serving as employees”).

• Note 4: The average employee salary expense adjustment is 1.9% ("Average employee salary expenses for the current year - Average employee salary expenses for the previous year"/ Average employee salary expenses for the previous year).

• Note 5: The remuneration policy of the Company (including directors, managers and employees): The Company's policy (including directors, managers, and employees) is mainly based on the

• Company’s Articles of Incorporation, the "Remuneration System for Directors, Members of Functional Committees, and Managers" (formerly the "Remuneration System for Directors, Supervisors, and Managers") and the Company’s measures for determining salaries, and is subject to the Remuneration Committee's review and approval and submitted to the Board of Directors for resolution, and described as follows:

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1. Directors:

The remuneration to the Company's directors is mainly determined in accordance with the Company's Articles of Incorporation and the "Remuneration Policy for Directors, Functional Committee Members, and Managers". Currently, the Company's directors are only entitled to fixed remuneration such as monthly remuneration, transportation allowance, attendance fee, and not the related variable remuneration.

1. Managers and employees:

The remuneration to the Company's managers and employees, of which the fixed salary is determined based on education, work experience, professional skills, job functions, etc. The holiday bonuses, performance bonus and other variable remuneration are mainly determined by the business performance of the Company and the achievements of the departments or individuals performance management indicators. In addition, in accordance with the Article of Incorporation, no less than 3% of the annual profits shall be allocated as employees' remuneration, which shall be reviewed by the Remuneration Committee and submitted to the Board of Directors for resolution.

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