SYSCOM - Interim / Quarterly Report 2023

Stock Code: 2453

Syscom Computer Engineering Co. and Subsidiaries

Consolidated Financial Statements for the Three Months Ended March 31, 2023 and 2022 and Independent Auditors’ Review Report

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

The independent auditors’ review report and the accompanying consolidated 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’ review report and consolidated only financial statements, the Chinese version shall prevail.

§ Table of Contents §

Item
Page
1. Cover
1
2. Table of Contents
2
3. Independent Auditors’ Review Report
3～4
4. Consolidated Balance Sheets
5
5. Consolidated Statements of Comprehensive Income
6～7
6. Consolidated Statements of Changes in Equity
8
7. Consolidated Statements of Cash Flows
9～10
8. Notes to Consolidated Financial Statements
(1) General
11
(2) The Date and Procedures of Authorization of
Financial Statements
11
(3) Application of New and Revised Standards and
Interpretations
11
(4) Summary of Significant Accounting Policies
12
(5) Critical Accounting Judgments and Key
Sources of Estimation and Uncertainty
13
(6) Explanation of Significant Accounts
13～31
(7) Related Parties Transactions
31~33
(8) Assets Pledged as Collateral
33
(9) Significant Contingent Liabilities and
Unrecognized Commitments
34
(10) Significant Disaster Loss
-
(11) Significant Events after Reporting Period
-
(12) Significant Assets and Liabilities Denominated
in Foreign Currencies
34
(13) Separately Disclosed Items
A. Information about significant transactions
35、37～39
B. Information on investees
35、40
C. Information on investment in mainland
China
35、41
D. Information of major shareholders
35、42
(14) Segment Information
35～36 Notes to Financial
Statements

-
-
-
-
-
-
-
1
2
3
4
5
6-25
26
27
28
-
-
29
30
30
30
30
31

§ Table of Contents §
Item Page 1. Cover 1 2. Table of Contents 2 3. Independent Auditors’ Review Report 3`～`4 4. Consolidated Balance Sheets 5 5. Consolidated Statements of Comprehensive Income 6`～`7 6. Consolidated Statements of Changes in Equity 8 7. Consolidated Statements of Cash Flows 9`～`10 8. Notes to Consolidated Financial Statements (1) General 11 (2) The Date and Procedures of Authorization of Financial Statements 11 (3) Application of New and Revised Standards and Interpretations 11 (4) Summary of Significant Accounting Policies 12 (5) Critical Accounting Judgments and Key Sources of Estimation and Uncertainty 13 (6) Explanation of Significant Accounts 13`～`31 (7) Related Parties Transactions 31~33 (8) Assets Pledged as Collateral 33 (9) Significant Contingent Liabilities and Unrecognized Commitments 34 (10) Significant Disaster Loss - (11) Significant Events after Reporting Period - (12) Significant Assets and Liabilities Denominated in Foreign Currencies 34 (13) Separately Disclosed Items A. Information about significant transactions 35`、`37`～`39 B. Information on investees 35`、`40 C. Information on investment in mainland China 35`、`41 D. Information of major shareholders 35`、`42 (14) Segment Information 35`～`36	Notes to Financial Statements
	- - - - - - - 1 2 3 4 5 6-25 26 27 28 - - 29 30 30 30 30 31

INDEPENDENT AUDITORS’ REVIEW REPORT

The Board of Directors and Shareholders Syscom Computer Engineering Company

Introduction

We have reviewed the accompanying consolidated balance sheets of Syscom Computer Engineering Company and its subsidiaries (collectively, the “Group”) as of March 31, 2023 and 2022, the related consolidated statements of comprehensive income, changes in equity and cash flows for the three months then ended March 31, 2023 and 2022, and the notes to the consolidated financial statements, including a summary of significant accounting policies. Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34, “Interim Financial Reporting,” endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China. Our responsibility is to express a conclusion on the consolidated financial statements based on our reviews.

Scope of Review

Except as explained in the Basis for Qualified Conclusion paragraph, we conducted our reviews in accordance with the Standards on Review Engagements of the Republic of China 2410 “Review of Interim Financial Information Performed by the Independent Auditor of the Entity”. A review of consolidated financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Basis for Qualified Conclusion

As disclosed in Note 12 to the consolidated financial statements, the financial statements of non-significant subsidiaries included in the consolidated financial statements referred to in the first paragraph were not reviewed. As of March 31, 2023 and 2022, combined total assets of these non-significant subsidiaries were NT$384,949 thousand and NT$414,725 thousand, respectively, representing 9% and 11%, respectively, of the consolidated total assets, and combined total liabilities of these subsidiaries were NT$261,484 thousand and NT$242,380 thousand, respectively, representing 13% and 14%, respectively, of the consolidated total liabilities; for the three months ended March 31, 2023 and 2022, the amounts of combined total comprehensive loss of these subsidiaries were NT$12,367 thousand and NT$11,052 thousand,respectively, both representing (14) % of the consolidated total comprehensive income. As disclosed in Note 13 to the consolidated financial statements, as of March 31, 2023 and 2022, investments accounted for using the equity method were NT$68,593 thousand and NT$66,154 thousand, respectively, and for the three months ended March 31, 2023 and 2022, the comprehensive income(loss) of these equity-method investments were NT$(647) thousand and NT$1,591 thousand, respectively, which were calculated on the basis of financial statements that have not been reviewed.

Qualified Conclusion

Based on our reviews, except for the adjustments, if any, as might have been determined to be necessary had the financial statements of the non-significant subsidiaries, the investments accounted for using the equity method as described in the preceding paragraph been reviewed, nothing has come to our attention that caused us to believe that the accompanying consolidated financial statements do not present fairly, in all material respects, the consolidated financial position of the Group as of March 31, 2023 and 2022, and of its consolidated financial

performance and its consolidated cash flows for the three months ended March 31, 2023 and 2022 in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34 “Interim Financial Reporting”endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

The engagement partners on the reviews resulting in this independent auditors’ review report are Hsin-Wei Tai and Pei-De Chen.

Deloitte & Touche Taipei, Taiwan Republic of China

May 11, 2023

Notice to Readers

The accompanying consolidated financial statements are intended only to present the consolidated 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 review such consolidated financial statements are those generally applied in the Republic of China.

For the convenience of readers, the independent auditors’ review report and the accompanying consolidated 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’ review report and consolidated financial statements shall prevail.

SYSCOM COMPUTER ENGINEERING CO. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

MARCH 31, 2023, DECEMBER 31, 2022 AND MARCH 31, 2022

Code 1100 1110 1136 1140 1150 1172 1200 1220 130X 1410 1479 11XX 1517 1535 1550 1600 1755 1821 1840 1990 15XX 1XXX Code 2100 2130 2150 2170 2200 2230 2280 2399 21XX 2572 2580 2640 2645 25XX 2XXX 3110 3200 3310 3320 3350 3300 3400 31XX 36XX 3XXX	ASSETS CURRENT ASSETS Cash and cash equivalents (Notes 6) Financial assets at fair value through profit or loss - current (Notes 7) Financial assets at amortized cost - current (Notes 9 and 27) Contract assets - current (Notes 21) Notes receivable Accounts receivable (Notes 10 and 26) Other receivables Current tax assets Inventories (Notes 11) Prepayments Other current assets Total current assets NON-CURRENT ASSETS Financial assets at fair value through other comprehensive income - non-current (Notes 8) Financial assets at amortized cost - non-current (Notes 9 and 27) Investments accounted for using the equity method (Notes13) Property, plant and equipment (Notes 14, 26 and 27) Right-of-use assets (Notes 15 and 26) Intangible assets (Notes 16) Deferred tax assets (Notes 4) Other non-current assets Total non-current assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term borrowings (Notes 17 and 27) Contract liabilities - current (Notes 21) Notes payable Accounts payable (Note 26) Other payables (Note 18) Current tax liabilities Lease liabilities - current (Notes 15and 26) Other current liabilities Total current liabilities NON-CURRENT LIABILITIES Deferred tax liabilities (Notes 4) Lease liabilities - non-current (Notes 15and 26) Net defined benefits liabilities - non-current (Notes 4) Guarantee deposits received Total non-current liabilities Total liabilities EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY (Notes 20) Share capital - ordinary shares Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Total retained earnings Other equity Total equity of the owners of the Company Non-controlling interests (Note 20) Total equity TOTAL		March 31, 2023 (Reviewed) Amount `％` $ 860,744 21 21,098 1 177,276 4 429,489 10 445 - 823,231 20 7,450 - 266 - 558,814 13 419,558 10 117,499 3 3,415,870 82 28,878 1 125,913 3 68,593 2 350,361 8 128,626 3 2,832 - 11,136 - 51,718 1 768,057 18 $ 4,183,927 100 $ 189,881 5 202,887 5 1,261 - 1,240,752 30 134,235 3 53,544 1 47,652 1 21,115 - 1,891,327 45 10,966 - 81,608 2 42,314 1 17,587 1 152,475 4 2,043,802 49 1,000,000 24 1,426 - 303,977 7 17,619 1 807,386 19 1,128,982 27 5,387 - 2,135,795 51 4,330 - 2,140,125 51 $ 4,183,927 100		(In Thousands of New Taiwan Dollars) December 31, 2022 (Audited) March 31, 2022 (Reviewed) Amount `％` Amount `％` $ 600,941 13 $ 427,627 11 19,956 - 663,238 18 202,721 5 203,924 5 486,381 11 356,695 9 2,598 - 4,349 - 1,489,172 34 594,498 16 6,054 - 8,521 - 265 - 258 - 453,997 10 399,397 11 383,124 9 301,884 8 119,540 3 149,193 4 3,764,749 85 3,109,584 82 25,737 1 30,897 1 129,195 3 120,586 3 69,518 2 66,154 2 357,328 8 360,218 9 20,655 - 53,248 1 2,410 - 2,640 - 13,665 - 18,287 1 51,683 1 38,602 1 670,191 15 690,632 18 $ 4,434,940 100 $ 3,800,216 100 $ 180,922 4 $ 151,625 4 238,583 6 185,118 5 16,026 - 1,398 - 1,400,023 32 1,027,209 27 392,297 9 151,678 4 33,097 1 47,636 1 8,513 - 36,870 1 14,796 - 25,120 1 2,284,257 52 1,626,654 43 11,130 - 11,534 - 12,426 - 18,443 1 54,658 1 75,216 2 17,656 1 15,571 - 95,870 2 120,764 3 2,380,127 54 1,747,418 46 1,000,000 22 1,000,000 26 1,547 - 1,547 - 303,977 7 281,889 7 17,619 1 17,619 1 722,955 16 738,753 20 1,044,551 24 1,038,261 28 3,747 - 3,131 - 2,049,845 46 2,042,939 54 4,968 - 9,859 - 2,054,813 46 2,052,798 54 $ 4,434,940 100 $ 3,800,216 100	(In Thousands of New Taiwan Dollars) December 31, 2022 (Audited) March 31, 2022 (Reviewed) Amount `％` Amount `％` $ 600,941 13 $ 427,627 11 19,956 - 663,238 18 202,721 5 203,924 5 486,381 11 356,695 9 2,598 - 4,349 - 1,489,172 34 594,498 16 6,054 - 8,521 - 265 - 258 - 453,997 10 399,397 11 383,124 9 301,884 8 119,540 3 149,193 4 3,764,749 85 3,109,584 82 25,737 1 30,897 1 129,195 3 120,586 3 69,518 2 66,154 2 357,328 8 360,218 9 20,655 - 53,248 1 2,410 - 2,640 - 13,665 - 18,287 1 51,683 1 38,602 1 670,191 15 690,632 18 $ 4,434,940 100 $ 3,800,216 100 $ 180,922 4 $ 151,625 4 238,583 6 185,118 5 16,026 - 1,398 - 1,400,023 32 1,027,209 27 392,297 9 151,678 4 33,097 1 47,636 1 8,513 - 36,870 1 14,796 - 25,120 1 2,284,257 52 1,626,654 43 11,130 - 11,534 - 12,426 - 18,443 1 54,658 1 75,216 2 17,656 1 15,571 - 95,870 2 120,764 3 2,380,127 54 1,747,418 46 1,000,000 22 1,000,000 26 1,547 - 1,547 - 303,977 7 281,889 7 17,619 1 17,619 1 722,955 16 738,753 20 1,044,551 24 1,038,261 28 3,747 - 3,131 - 2,049,845 46 2,042,939 54 4,968 - 9,859 - 2,054,813 46 2,052,798 54 $ 4,434,940 100 $ 3,800,216 100	(In Thousands of New Taiwan Dollars) December 31, 2022 (Audited) March 31, 2022 (Reviewed) Amount `％` Amount `％` $ 600,941 13 $ 427,627 11 19,956 - 663,238 18 202,721 5 203,924 5 486,381 11 356,695 9 2,598 - 4,349 - 1,489,172 34 594,498 16 6,054 - 8,521 - 265 - 258 - 453,997 10 399,397 11 383,124 9 301,884 8 119,540 3 149,193 4 3,764,749 85 3,109,584 82 25,737 1 30,897 1 129,195 3 120,586 3 69,518 2 66,154 2 357,328 8 360,218 9 20,655 - 53,248 1 2,410 - 2,640 - 13,665 - 18,287 1 51,683 1 38,602 1 670,191 15 690,632 18 $ 4,434,940 100 $ 3,800,216 100 $ 180,922 4 $ 151,625 4 238,583 6 185,118 5 16,026 - 1,398 - 1,400,023 32 1,027,209 27 392,297 9 151,678 4 33,097 1 47,636 1 8,513 - 36,870 1 14,796 - 25,120 1 2,284,257 52 1,626,654 43 11,130 - 11,534 - 12,426 - 18,443 1 54,658 1 75,216 2 17,656 1 15,571 - 95,870 2 120,764 3 2,380,127 54 1,747,418 46 1,000,000 22 1,000,000 26 1,547 - 1,547 - 303,977 7 281,889 7 17,619 1 17,619 1 722,955 16 738,753 20 1,044,551 24 1,038,261 28 3,747 - 3,131 - 2,049,845 46 2,042,939 54 4,968 - 9,859 - 2,054,813 46 2,052,798 54 $ 4,434,940 100 $ 3,800,216 100	(In Thousands of New Taiwan Dollars) December 31, 2022 (Audited) March 31, 2022 (Reviewed) Amount `％` Amount `％` $ 600,941 13 $ 427,627 11 19,956 - 663,238 18 202,721 5 203,924 5 486,381 11 356,695 9 2,598 - 4,349 - 1,489,172 34 594,498 16 6,054 - 8,521 - 265 - 258 - 453,997 10 399,397 11 383,124 9 301,884 8 119,540 3 149,193 4 3,764,749 85 3,109,584 82 25,737 1 30,897 1 129,195 3 120,586 3 69,518 2 66,154 2 357,328 8 360,218 9 20,655 - 53,248 1 2,410 - 2,640 - 13,665 - 18,287 1 51,683 1 38,602 1 670,191 15 690,632 18 $ 4,434,940 100 $ 3,800,216 100 $ 180,922 4 $ 151,625 4 238,583 6 185,118 5 16,026 - 1,398 - 1,400,023 32 1,027,209 27 392,297 9 151,678 4 33,097 1 47,636 1 8,513 - 36,870 1 14,796 - 25,120 1 2,284,257 52 1,626,654 43 11,130 - 11,534 - 12,426 - 18,443 1 54,658 1 75,216 2 17,656 1 15,571 - 95,870 2 120,764 3 2,380,127 54 1,747,418 46 1,000,000 22 1,000,000 26 1,547 - 1,547 - 303,977 7 281,889 7 17,619 1 17,619 1 722,955 16 738,753 20 1,044,551 24 1,038,261 28 3,747 - 3,131 - 2,049,845 46 2,042,939 54 4,968 - 9,859 - 2,054,813 46 2,052,798 54 $ 4,434,940 100 $ 3,800,216 100
			Amount $ 860,744 21,098 177,276 429,489 445 823,231 7,450 266 558,814 419,558 117,499 3,415,870 28,878 125,913 68,593 350,361 128,626 2,832 11,136 51,718 768,057 $ 4,183,927 $ 189,881 202,887 1,261 1,240,752 134,235 53,544 47,652 21,115 1,891,327 10,966 81,608 42,314 17,587 152,475 2,043,802 1,000,000 1,426 303,977 17,619 807,386 1,128,982 5,387 2,135,795 4,330 2,140,125 $ 4,183,927		Amount $ 600,941 19,956 202,721 486,381 2,598 1,489,172 6,054 265 453,997 383,124 119,540 3,764,749 25,737 129,195 69,518 357,328 20,655 2,410 13,665 51,683 670,191 $ 4,434,940 $ 180,922 238,583 16,026 1,400,023 392,297 33,097 8,513 14,796 2,284,257 11,130 12,426 54,658 17,656 95,870 2,380,127 1,000,000 1,547 303,977 17,619 722,955 1,044,551 3,747 2,049,845 4,968 2,054,813 $ 4,434,940		Amount $ 427,627 663,238 203,924 356,695 4,349 594,498 8,521 258 399,397 301,884 149,193 3,109,584 30,897 120,586 66,154 360,218 53,248 2,640 18,287 38,602 690,632 $ 3,800,216 $ 151,625 185,118 1,398 1,027,209 151,678 47,636 36,870 25,120 1,626,654 11,534 18,443 75,216 15,571 120,764 1,747,418 1,000,000 1,547 281,889 17,619 738,753 1,038,261 3,131 2,042,939 9,859 2,052,798 $ 3,800,216	`％`
								11 18 5 9 - 16 - - 11 8 4 82 1 3 2 9 1 - 1 1 18 100 4 5 - 27 4 1 1 1 43 - 1 2 - 3 46 26 - 7 1 20 28 - 54 - 54 100

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

(With Deloitte & Touche auditors’ review report dated May 11, 2023)

SYSCOM COMPUTER ENGINEERING CO. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE THREE MONTHS ENDED MARCH 31,2023 AND 2022

(Reviewed, Not Audited)

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

	For the Three Months Ended March 31	For the Three Months Ended March 31	For the Three Months Ended March 31	For the Three Months Ended March 31
	2023	`％` 73 27 - 100 54 19 - 73 27 14 5 - 19 8 - 1 - - - 1 9 2 7		2022
	Amount $ 903,691 338,793 4,437 1,246,921 669,139 239,993 4,120 913,252 333,669 177,620 53,306 ( 4) 230,922 102,747 2,505 3,972 2,299 3,845 ) 647) 4,284 107,031 23,040 83,991			Amount $ 942,239 270,050 4,604 1,216,893 716,806 198,240 3,832 918,878 298,015 170,696 65,506 ( 14) 236,188 61,827 722 23,545 664 1,266 ) 1,591 25,256 87,083 19,218 67,865	`％`
( (			(		78 22 - 100 59 16 1 76 24 14 5 - 19 5 - 2 - - - 2 7 2 5

(Continued)

For the Three Months Ended March 31	For the Three Months Ended March 31	For the Three Months Ended March 31	For the Three Months Ended March 31
2023	`％` - - - - 7 7 - 7 7 - 7		2022
Amount 3,141 ( 1,470) ( 40) 1,631 $ 85,622 $ 84,431 ( 440) $ 83,991 $ 86,071 ( 449) $ 85,622 $ 0.84 $ 0.84			Amount 8,449 1,787 60) 10,176 $ 78,041 $ 68,771 906) $ 67,865 $ 78,823 782) $ 78,041 $ 0.69 $ 0.69	`％`
		( ( (		1 - - 1 6 6 - 6 6 - 6

The accompanying notes are an integral part of the consolidated financial statements. (With Deloitte & Touche auditors’ review report dated May 11, 2023)

(Concluded)

SYSCOM COMPUTER ENGINEERING CO. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

FOR THE THREE MONTHS ENDED MARCH 31,2023 AND 2022

(Reviewed, Not Audited)

			Equity attributable to o	wners of the Company	( In Thousands of New Taiwan Dollars, except Dividend Per Share) Other equity Exchange differences on translating the financial statements of foreign operations Unrealized gain or loss on financial assets at fair value through other comprehensive income Total Non-controlling interests Total equity ( $ 20,350 ) $ 13,429 $ 1,964,116 $ 10,641 $ 1,974,757 - - 68,771 ( 906 ) 67,865 1,603 8,449 10,052 124 10,176 1,603 8,449 78,823 ( 782) 78,041 ($ 18,747) $ 21,878 $ 2,042,939 $ 9,859 $ 2,052,798 ( $ 10,592 ) $ 14,339 $ 2,049,845 $ 4,968 $ 2,054,813 - - 84,431 ( 440 ) 83,991 ( 1,501) 3,141 1,640 ( 9) 1,631 ( 1,501) 3,141 86,071 ( 449) 85,622 - - ( 121) ( 189) ( 310) ($ 12,093) $ 17,480 $ 2,135,795 $ 4,330 $ 2,140,125	( In Thousands of New Taiwan Dollars, except Dividend Per Share) Other equity Exchange differences on translating the financial statements of foreign operations Unrealized gain or loss on financial assets at fair value through other comprehensive income Total Non-controlling interests Total equity ( $ 20,350 ) $ 13,429 $ 1,964,116 $ 10,641 $ 1,974,757 - - 68,771 ( 906 ) 67,865 1,603 8,449 10,052 124 10,176 1,603 8,449 78,823 ( 782) 78,041 ($ 18,747) $ 21,878 $ 2,042,939 $ 9,859 $ 2,052,798 ( $ 10,592 ) $ 14,339 $ 2,049,845 $ 4,968 $ 2,054,813 - - 84,431 ( 440 ) 83,991 ( 1,501) 3,141 1,640 ( 9) 1,631 ( 1,501) 3,141 86,071 ( 449) 85,622 - - ( 121) ( 189) ( 310) ($ 12,093) $ 17,480 $ 2,135,795 $ 4,330 $ 2,140,125	( In Thousands of New Taiwan Dollars, except Dividend Per Share) Other equity Exchange differences on translating the financial statements of foreign operations Unrealized gain or loss on financial assets at fair value through other comprehensive income Total Non-controlling interests Total equity ( $ 20,350 ) $ 13,429 $ 1,964,116 $ 10,641 $ 1,974,757 - - 68,771 ( 906 ) 67,865 1,603 8,449 10,052 124 10,176 1,603 8,449 78,823 ( 782) 78,041 ($ 18,747) $ 21,878 $ 2,042,939 $ 9,859 $ 2,052,798 ( $ 10,592 ) $ 14,339 $ 2,049,845 $ 4,968 $ 2,054,813 - - 84,431 ( 440 ) 83,991 ( 1,501) 3,141 1,640 ( 9) 1,631 ( 1,501) 3,141 86,071 ( 449) 85,622 - - ( 121) ( 189) ( 310) ($ 12,093) $ 17,480 $ 2,135,795 $ 4,330 $ 2,140,125	( In Thousands of New Taiwan Dollars, except Dividend Per Share) Other equity Exchange differences on translating the financial statements of foreign operations Unrealized gain or loss on financial assets at fair value through other comprehensive income Total Non-controlling interests Total equity ( $ 20,350 ) $ 13,429 $ 1,964,116 $ 10,641 $ 1,974,757 - - 68,771 ( 906 ) 67,865 1,603 8,449 10,052 124 10,176 1,603 8,449 78,823 ( 782) 78,041 ($ 18,747) $ 21,878 $ 2,042,939 $ 9,859 $ 2,052,798 ( $ 10,592 ) $ 14,339 $ 2,049,845 $ 4,968 $ 2,054,813 - - 84,431 ( 440 ) 83,991 ( 1,501) 3,141 1,640 ( 9) 1,631 ( 1,501) 3,141 86,071 ( 449) 85,622 - - ( 121) ( 189) ( 310) ($ 12,093) $ 17,480 $ 2,135,795 $ 4,330 $ 2,140,125
Share capital - ordinary shares $ 1,000,000 - - - $ 1,000,000 $ 1,000,000 - - - - $ 1,000,000	Capital surplus $ 1,547 - - - $ 1,547 $ 1,547 - - - ( 121) $ 1,426		Retained earnings	Unappropriated earnings $ 669,982 68,771 - 68,771 $ 738,753 $ 772,955 84,431 - 84,431 - $ 807,386	Other equity Exchange differences on translating the financial statements of foreign operations Unrealized gain or loss on financial assets at fair value through other comprehensive income ( $ 20,350 ) $ 13,429 - - 1,603 8,449 1,603 8,449 ($ 18,747) $ 21,878 ( $ 10,592 ) $ 14,339 - - ( 1,501) 3,141 ( 1,501) 3,141 - - ($ 12,093) $ 17,480
					Exchange differences on translating the financial statements of foreign operations ( $ 20,350 ) - 1,603 1,603 ($ 18,747) ( $ 10,592 ) - ( 1,501) ( 1,501) - ($ 12,093)
		Legal reserve $ 281,889 - - - $ 281,889 $ 303,977 - - - - $ 303,977	Special reserve $ 17,619 - - - $ 17,619 $ 17,619 - - - - $ 17,619
					( ( ( ( ( (	(	(	$ 1,974,757 67,865 10,176 78,041 $ 2,052,798 $ 2,054,813 83,991 1,631 85,622 310) $ 2,140,125

The accompanying notes are an integral part of the consolidated financial statements. (With Deloitte & Touche auditors’ review report dated May 11, 2023)

SYSCOM COMPUTER ENGINEERING CO. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31,2023 AND 2022

(Reviewed, Not Audited)

(In Thousands of New Taiwan Dollars)

Code CASH FLOWS FROM OPERATING ACTIVITIES A10000 Income before income tax A20010 Adjustments for: A20100 Depreciation expenses A20200 Amortization expenses A20300 Expected credit loss reversed on trade receivables A20400 Net gain on financial assets at fair value through profit or loss A20900 Finance costs A21200 Interest income A22300 Share of profit or loss of associates and joint ventures accounted for using the equity method A23800 Reversal of write-downs of inventories A24100 Net loss (gain) on foreign currency exchange A29900 Lease modification gain 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 inflows from operations A33100 Interest received A33300 Interest paid A33500 Income tax paid AAAA Net cash inflow from operating activities	For the Three Months Ended March 31	For the Three Months Ended March 31	For the Three Months Ended March 31	For the Three Months Ended March 31
		2023 $ 107,031 28,116 170 4 ) 1,142 ) 3,845 2,505 ) 647 100 ) 1,532 ) - 56,892 2,153 665,407 1,405 ) 104,515 ) 36,463 ) 2,563 ) 35,696 ) 14,765 ) 158,959 ) 258,157 ) 6,319 12,344) 240,430 2,520 3,823 ) 210) 238,917		2022
	( ( ( ( ( ( ( ( ( ( ( ( ( ( ( (		( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( (	$ 87,083 27,364 160 14 ) 359 ) 1,266 722 ) 1,591 ) 275 ) 629 ) 146 ) 2,463 1,309 ) 988,298 1,261 108,346 ) 6,397 ) 6,295 ) 23,122 ) 1,330 293,866 ) 225,478 ) 8,622 2,279) 447,019 737 1,100 ) 3,710) 442,946

(Continued)

Code CASH FLOWS FROM INVESTING ACTIVITIES B00050 Proceeds from sale of financial assets at amortized cost B00100 Purchase of financial assets at fair value through profit or loss B00200 Proceeds from sale of financial assets at fair value through profit or loss B02700 Payments for property, plant and equipment B03700 Decrease (Increase) in refundable deposits B04500 Payments for intangible assets BBBB Net cash inflows(outflows) from investing activities CASH FLOWS FROM FINANCING ACTIVITIES C00100 Proceeds from short-term borrowings C03000 (Decrease)Increase in guarantee deposits received C04020 Repayment of the principal portion of lease liabilities C05400 Acquisition of interests in subsidiaries CCCC Net cash outflows from financing activities DDDD EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH AND CASH EQUIVALENTS HELD IN FOREIGN CURRENCIES EEEE NET INCREASE(DECREASE) IN CASH AND CASH EQUIVALENTS E00100 CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD E00200 CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD	For the Three Months Ended March 31	For the Three Months Ended March 31
	2023 $ 28,727 - - ( 9,091 ) 4,569 ( 588) 23,617 10,297 ( 69 ) ( 12,046 ) ( 310) ( 2,128) ( 603) 259,803 600,941 $ 860,744	2022
		$ 8,100 ( 707,950 ) 280,080 ( 3,240 ) ( 63,489 ) - ( 486,499) 9,456 1,841 ( 11,385 ) - ( 88) 3,168 ( 40,473 ) 468,100 $ 427,627

The accompanying notes are an integral part of the consolidated financial statements. (With Deloitte & Touche auditors’ review report dated May 11, 2023)

(Concluded)

10 -

SYSCOM COMPUTER ENGINEERING CO. AND SUBSIDIARIES Notes to Consolidated Financial Statements For the Three Months Ended March 31, 2023 and 2022 (Reviewed, Not Audited)

(Amounts in thousands of NTD, unless otherwise indicated)

General

SYSCOM COMPUTER ENGINEERING CO. (hereinafter referred to as "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 consolidated financial statements are presented in the Company’s functional currency, the New Taiwan dollar.

The Company and its subsidiaries are hereinafter collectively referred to as the "The Group ".

The Date and Procedures of Authorization of Financial Statements The consolidated financial statements were approved by the Board of Directors on May 11, 2023.
Application of New, Amended and Revised Standards and Interpretations (1) Application of the amendments to the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) (collectively,”IFRSs”) endorsed and issued into effect by the Financial Supervisory Commission (FSC).

Application of the amendments to the IFRSs endorsed and issued into effect by the FSC did not have a significant effect on the Group’s accounting policies.

(2) New IFRSs issued by the IASB but not yet endorsed and issued into effect by the FSC

Effective Date Announced by New/ Revised /Amended 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”

Amendments to IFRS 16 “Leases Liability in a Sale and January 1, 2024 (Note 2) Leaseback” IFRS 17 “Insurance contracts” January 1, 2023 Amendment to IFRS 17 January 1, 2023 Amendment to IFRS 17 "Initial Application of IFRS 17 and January 1, 2023 IFRS 9 - Comparative Information" Amendment 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”

Note 1: Unless stated otherwise, the above new, revised or amended standards and interpretations 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.

As of the date the Group’s consolidated financial statements were authorized for issue, the Group is continuously evaluating the possible impact that the application of above standards and interpretations will have on the Group’s financial position and financial performance, and will disclose the relevant impact when the evaluation is completed.

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4. Summary of Significant Accounting Policies (1) Statement of Compliance

These interim consolidated financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and IAS 34 “Interim Financial Reporting” endorsed and issued into effect by the FSC. The consolidated financial statements do not present all the disclosures required for a complete set of annual consolidated financial statements prepared under the IFRSs endorsed and issued into effect by the FSC.

(2) Basis of Preparation

The consolidated financial statements were prepared on the historical cost basis, except for financial instruments measured at fair value and net defined benefit liabilities recognized at the present value of the defined benefit obligation less the fair value of plan assets. The evaluation of fair value could be classified into Level 1 to Level 3 by the observable intensity and importance of the related input value:

A. Level 1 input value: refers to the quotation of the same asset or liability in an active market as of the evaluation (before adjustment).
B. Level 2 input value: refers to the direct (the price) or indirect (inference of price) observable input value of asset or liability further to the quotation of Level 1.
C. Level 3 input value: the unobservable input value of asset or liability.
(3) Basis of Consolidation

The consolidated financial statements include the financial statements of the Company and entities controlled by the Company (subsidiaries). The subsidiaries’ financial statements have been properly adjusted to make the accounting policies consistent with the accounting policies of the Group. In preparing the consolidated financial statements, all intra-group transactions, account balances, gains and losses have been eliminated. The total comprehensive income of the subsidiaries is attributable to the shareholders and non-controlling interests of the Company, even if this results in a loss balance for the non-controlling interests.

When a change in the Group 's ownership interest in a subsidiary does not result in a loss of control, it is treated as an equity transaction. The carrying amounts of the Group and non-controlling interests have been adjusted to reflect the changes in their relative interests in subsidiaries. The difference between the adjustment of the non-controlling interests and the fair value of the consideration paid or received is recognized directly in equity attributable to shareholders of the Company.

Please refer to Note 12 and Tables 4 and 5 for details of subsidiaries, shareholding percentage and principal businesses.

(4) Other significant accounting policies

Except for the following, please refer to the consolidated financial statements for the year ended 2022.

Defined benefits of retirement

Pension cost for an interim period is calculated on a year-to-date basis by using the actuarially determined pension cost rate at the end of the prior financial year, adjusted for significant market fluctuations for the current period, and for amendments in significant plans, settlements, or other significant one-off events.

Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax. The interim period income tax expense is accrued using the tax rate that would be applicable to expected total annual earnings, that is, the estimated average annual effective income tax rate applied to the pre-tax income of the interim period.

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. If a temporary difference arises from the initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit

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nor the accounting profit, and at the time of the transaction, does not give rise to equal taxable and deductible temporary differences, the resulting deferred tax asset or liability is not recognized. In addition, a deferred tax liability is not recognized on taxable temporary differences arising from the initial recognition of goodwill.

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

In the application of the Group’s accounting policies, the management is required to make judgments, estimates and assumptions which are based on historical experience and other factors that are not readily apparent from other sources. Actual results may differ from these estimates.

The Group has taken the recent development of the COVID-19 outbreak and its possible impact on the economic environment into consideration in making significant accounting estimates related to cash flow projections, growth rates, discount rates, profitability, etc. Management will continue to review the estimates and underlying assumptions. If a revision of an estimate affects only the current period, it is recognized in the period in which it is revised. If a revision of an accounting estimate affects both the current and future periods, it is recognized in the period in which it is revised and in the future periods.

The consolidated financial statements for critical accounting judgments and key sources of estimation uncertainty are consistent with the consolidated financial statements for the year ended December 31, 2022.

6. Cash and cash equivalents

6.	Cash and cash equivalents	Cash and cash equivalents
7. 8.	March 31, 2023 December 31, 2022 Cash on hand $ 796 $ 707 Checking accounts and demand deposits 280,578 297,539 Cash equivalents (investments with original maturities of less than 3 months) Time deposits 76,249 71,704 Commercial papers 503,121 230,991 $ 860,744 $ 600,941 Financial assets at fair value through profit or loss March 31, 2023 December 31, 2022 Financial assets mandatorily classified as at FVTPL Non-derivative financial assets Beneficiary certificates $ 21,098 $ 19,956 Financial assets at fair value through other comprehensive income Investments in equity instruments-non-current March 31, 2023 December 31, 2022 Domestic investments Listed shares $ 27,283 $ 24,142 Unlisted shares 1,595 1,595 $ 28,878 $ 25,737		March 31, 2022
			$ 735 288,463 71,431 66,998 $ 427,627 March 31, 2022
			$ 663,238 March 31, 2022
	Investments in equity instruments	-non-current March 31, 2023 $ 27,283 1,595 $ 28,878
	Domestic investments Listed shares Unlisted shares
			$ 29,302 1,595 $ 30,897

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

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short-term fluctuations in these investments’ fair value in profit or loss would not be consistent with the Group’s strategy of holding these investments for long-term purposes.

The Group 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 mediumto 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.

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		March 31, 2023 $ 227,598 75,591 $ 303,189 $ 177,276 125,913 $ 303,189	December 31, 2022 $ 231,060 100,856 $ 331,916 $ 202,721 129,195 $ 331,916		March 31, 2022
					$ 218,261 106,249 $ 324,510 $ 203,924 120,586 $ 324,510

Refer to Note 27 for information relating to financial assets at amortized cost pledged as security.

Based on the Group’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 Group 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 March 31, 2023, December 31, 2022 and March 31, 2022.

10. Accounts receivable

Accounts receivable
At amortized cost Accounts receivable Less: Allowance for impairment loss		March 31, 2023 $ 824,708 1,477) $ 823,231		December 31, 2022 $ 1,490,655 1,483) $ 1,489,172		March 31, 2022
	(		(		(	$ 595,950 1,452) $ 594,498

The average credit period of sales of goods was 30 to 120 days. No interest was charged on accounts receivable.

In order to minimize credit risk, the management of the Group 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 Group 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 Group’s credit risk was significantly reduced.

The Group 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 Group 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

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the debtor has been placed under liquidation. For accounts receivable that have been written off, the Group 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 Groupe 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.

March 31, 2023

March 31, 2023
Gross carrying amount Loss allowance (Lifetime ECL) Amortized cost December 31, 2022 Gross carrying amount Loss allowance (Lifetime ECL) Amortized cost March 31, 2022 Gross carrying amount Loss allowance (Lifetime ECL) Amortized cost	Less than 60 Days	61 to 90 Days	91 to120 Days		Over 120 Days		Total
	$ 610,097 - $ 610,097 Less than 60 Days	$ 68,670 - $ 68,670 61 to 90 Days	$ 47,537 - $ 47,537 91 to120 Days	(	$ 98,404 1,477) $ 96,927 Over 120 Days	(	$ 824,708 1,477) $ 823,231 Total
	$ 1,231,408 - $ 1,231,408 Less than 60 Days	$ 157,786 - $ 157,786 61 to 90 Days	$ 22,655 - $ 22,655 91 to120 Days	(	$ 78,806 1,483) $ 77,323 Over 120 Days	(	$ 1,490,655 1,483) $ 1,489,172 Total
	$ 463,147 - $ 463,147	$ 42,737 - $ 42,737	$ 9,787 - $ 9,787	(	$ 80,279 1,452) $ 78,827	(	$ 595,950 1,452) $ 594,498

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

March 31, 2023	2023 $ 1,483 ( 4 ) ( 2) $ 1,477 December 31, 2022 $ 220,735 226,770 5,862 630 $ 453,997	2023 $ 1,483 ( 4 ) ( 2) $ 1,477 December 31, 2022 $ 220,735 226,770 5,862 630 $ 453,997		2022	2022
	$ ( ( $		(	$ 1,460 14 ) 6 $ 1,452 March 31, 2022

$ 238,656 246,147 73,402 609		$ 220,735 226,770 5,862 630 $ 453,997			$ 176,014 148,023 74,634 726 $ 399,397
$ 558,814

Inventories

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.

The cost of inventories recognized as cost of goods sold for the March 31,2023 and 2022 was $669,139 thousand and $716,806 thousand, respectively. The cost of goods sold included reversal of write-downs of inventories of $100 thousand and $275 thousand, respectively. The reversals of previous write-downs resulted from the sale of these inventories.

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12. Subsidiaries (1) Subsidiaries included in the consolidated financial statements The consolidated entities were as follows:

Investor The Company Coach Technology Management Inc. Casemaker Inc. and SYSCOM INTERNA- TIONAL INC.	Investee Casemaker Inc. SYSCOM INTERNATIONAL INC. Coach Technology Management Inc. Syscom Computer (Thailand)Co., Ltd. Wisemaker Technology Co. Netmaker Technology Co., Ltd. (Netmaker Technology Co.) Syscom Computer (Thailand)Co., Ltd. Syscom Computer (Shenzhen)Co., Ltd. Xian Linan Computer Co., Ltd.	Nature of Activities Sales of computer software, hardware and related products. Investments in other businesses Diagnostic consulting for corporate management, domestic and foreign investment referral, and computerized design consulting Development and maintenance of software and other businesses Sales of computer software, hardware and related products. Information software, data processing and electronic information supply services Development and maintenance of software and other businesses Computer equipment software development, sales of selfdeveloped technical achievements services, computer system integration and network wiring engineering Development and manufacture of computer equipment and computer software; sale of self-manufactured products and provision of technical services	Proportion of Ownership (%) March 31,2023 December 31,2022 March 31,2022 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 97.50% 97.50% 97.50% 91.40% 91.40% 91.40% 99.04% 98.72% 98.72% 86.60% 86.60% 86.60% 0.54% 0.54% 0.54% 98.27% 98.27% 98.27% 74.38% 74.38% 74.38%	Proportion of Ownership (%) March 31,2023 December 31,2022 March 31,2022 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 97.50% 97.50% 97.50% 91.40% 91.40% 91.40% 99.04% 98.72% 98.72% 86.60% 86.60% 86.60% 0.54% 0.54% 0.54% 98.27% 98.27% 98.27% 74.38% 74.38% 74.38%	Description
			March 31,2023 100.00% 100.00% 97.50% 91.40% 99.04% 86.60% 0.54% 98.27% 74.38%	December 31,2022 100.00% 100.00% 97.50% 91.40% 98.72% 86.60% 0.54% 98.27% 74.38%
					A A A A A`、`B A A A A

  - A. The subsidiaries are not significant subsidiaries. The financial statements have not been reviewed by CPAs.

  - B. In January and February 2023, the Company acquired additional 9 thousand shares of Wisemaker Technology Co. from an unrelated party for $310 thousand; after the acquisition of further interests, the Company’s percentage of ownership in Wisemaker Technology Co. increased to 99.04%.

(2) Subsidiaries excluded from the consolidated financial statements: None.
(3) Subsidiaries with material non-controlling interests: None.
Investments accounted for using the equity method

Investments in associates Investments in joint ventures (1) Investments in associates Associates that is not individually materiality Unlisted companies DBMaker Japan Inc.		March 31, 2023 $ 14,725 53,868 $ 68,593 March 31, 2023 $ 14,725	December 31, 2022 $ 15,486 54,032 $ 69,518 December 31, 2022 $ 15,486		March 31, 2022
					$ 13,069 53,085 $ 66,154 March 31, 2022
					$ 13,069

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

Name of the company DBMaker Japan Inc.	March 31, 2023 49.89%	December 31, 2022 49.89%	March 31, 2022
			49.89%

Refer to Table 4 “Information on Investees” for the nature of activities, principal place of business and country of incorporation of the associates.

(2) Investments in joint ventures

Investments in joint ventures
March 31, 2023 December 31, 2022 March 31, 2022 Joint venture that is not individually material CloudMaster Co., Ltd. $ 53,868 $ 54,032 $ 53,085 At the end of the reporting period, the proportion of ownership and voting rights in jointly controlled entity held by the Group was as follows: March 31, 2023 December 31, 2022 March 31, 2022 CloudMaster Co., Ltd. 50.00% 50.00% 50.00%		March 31, 2022
	50.00%

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

Refer to Table 4 “Information on Investees” for the nature of activities, principal place of business and country of incorporation of the Joint venture.

In March 2013, under the authorization of the Investment Commission of the Ministry of Economic Affairs, the Group 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 Group’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 Group 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 Group 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 were calculated based on the joint venture’s financial statements that have not been reviewed by CPAs.

14. Property, plant and equipment

Property, plant and equipment
Assets used by the Group Assets leased under operating leases		March 31, 2023 $ 327,867 22,494 $ 350,361	December 31, 2022 $ 333,516 23,812 $ 357,328		March 31, 2022
					$ 332,342 27,876 $ 360,218

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(1) Assets used by the Group

Assets used by the Group
Land Computer equipment Buildings Maintenance equipment Leasehold improvements Others		March 31, 2023 $ 122,609 109,297 46,249 35,355 5,715 8,642 $ 327,867	December 31, 2022 $ 122,714 112,492 46,804 35,641 6,850 9,015 $ 333,516		March 31, 2022
					$ 121,871 109,047 47,652 34,754 10,081 8,937 $ 332,342

Except for the recognition of depreciation expenses, the Group’s property, plant and equipment did not have significant addition, disposal and impairment for the three months ended March 31, 2023 and 2022.

Depreciation expenses were depreciated on a straight-line basis over the estimated useful life of the asset:

Buildings 39 to 60 years Maintenance equipment 6 years Computer equipment 3 to 6 years Leasehold improvements 3 to 10 years Others - Office equipment 3 to 8 years -Transportation equipment 5 years

Property, plant and equipment pledged as collateral for bank borrowings is set out in Note 27.

(2) Assets leased under operating leases

Leased equipment		March 31, 2023 $ 22,494	December 31, 2022 $ 23,812		March 31, 2022
					$ 27,876

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 Year 4		March 31, 2023 $ 17,286 16,926 12,532 - $ 46,744	December 31, 2022 $ 17,323 16,831 16,740 - $ 50,894		March 31, 2022
					$ 17,706 17,148 16,830 12,532 $ 64,216

Except for the recognition of depreciation expenses, the Group’s Leased equipment did not have significant addition, disposal and impairment for the three months ended March 31, 2023 and 2022.

The equipment leased under operating leases are depreciated on a straight-line basis over 1 to 6 years estimated useful lives.

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15. (1)	Lease agreements Right-of-use assets Carrying amounts Buildings		March 31, 2023 $ 128,626	December 31, 2022 $ 20,655		March 31, 2022
						$ 53,248

Addition of right-of-use assets Depreciation charge for right-of-use assets Buildings		For the Three Months	Ended March 31	Ended March 31
		2023 $ 120,331 $ 12,424		2022
				$ - $ 10,932

Except for the aforementioned addition and recognized depreciation, the Group did not have significant sublease or impairment of right-of-use assets during the three months ended March 31, 2023 and 2022.

(2) Lease liabilities

Lease liabilities
Carrying amounts Current Non-current		March 31, 2023 $ 47,652 $ 81,608	December 31, 2022 $ 8,513 $ 12,426		March 31, 2022
					$ 36,870 $ 18,443

The ranges of discount rate for lease liabilities were 0.75%-5.31%, 0.75%-2.61% and 0.75%-2.61% per annum as of March 31, 2023, December 31, 2022 and March 31, 2022, respectively.

(3) Material leasing activities and terms

As lessee, the Group leases buildings for the use as offices and dormitory with lease terms of 2 to 10 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 Group 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 14.

equipment were set out in Note 14.
Expenses relating to short-term leases Expenses relating to variable lease payments not included in the measurement of lease liabilities Total cash outflow for leases		For the Three Months	Ended March 31
		2023 $ 1,626 $ 89 $ 18,247)		2022
	(		(	$ 845 $ 618 $ 12,809)

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

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16. Intangible assets

ngible assets
Goodwill Computer software		March 31, 2023 $ 593 2,239 $ 2,832	December 31, 2022 $ 593 1,817 $ 2,410		March 31, 2022
					$ 593 2,047 $ 2,640

Except for the recognition of amortization expenses, the Group’s intangible assets did not have significant addition, disposal and impairment for the three months ended March 31, 2023 and 2022. Computer software is being depreciated on a straight-line basis and will be amortized over 1 to 10 years.

17. Loans

Loans
Unsecured borrowings Line of credit borrowings		March 31, 2023 $ 189,881		December 31, 2022 $ 180,922		March 31, 2022
						$ 151,625

The range of weighted average effective interest rates on bank loans was 2.11%- 7.37%, 2.08%- 7.08% and 1.70%-5.07% per annum as of March 31,2023, December 31, 2022 and March 31,2022, respectively.

18. Other payables

Other payables
Payables for salaries or bonus Payables for insurance Payables for pension Payables for value-added tax Payable for compensation of employees Payables for annual leave Others		March 31, 2023 $ 50,118 27,640 20,191 6,821 12,924 747 15,794 $ 134,235	December 31, 2022 $ 288,394 18,507 14,858 26,275 9,600 2,414 32,249 $ 392,297		March 31, 2022
					$ 45,709 26,654 23,526 16,303 11,170 479 27,837 $ 151,678

19. Retirement benefits plans

For the three months ended March 31, 2023 and 2022, relevant pension costs for defined benefit plans which were determined by the pension cost rates of actuarial valuation as of December 31, 2022 and 2021 were as follows:

For the Three Months Ended March 31

Operating costs Operating expenses		2023 $ 28 244 $ 272		2022
				$ 37 212 $ 249

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20. Equity

(1) Share capital - ordinary shares

uity 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		March 31, 2023 157,000 $ 1,570,000 100,000 $ 1,000,000		December 31, 2022 157,000 $ 1,570,000 100,000 $ 1,000,000		March 31, 2022
						157,000 $ 1,570,000 100,000 $ 1,000,000

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.

(3) Retained earnings and dividend policy

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, 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 22,(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 for 2022 that were proposed by the board of directors on March 17, 2023 and the appropriations of earnings for 2021 that had been resolved by the shareholders in their meeting on June 15, 2022, 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 2022 are subject to the resolution in the shareholders’ meeting to be held on June 13, 2023.

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(4) Special reserve

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

Balance at January 1 Exchange differences on translating the financial statements of foreign operations Share from associates and joint venture accounted for using the equity method Balance at March 31		For the Three Months	Ended March 31	Ended March 31
		2023 $ 10,592 ) 1,461 ) 40) $ 12,093)		2022
	( ( ( (		( ( (	$ 20,350 ) 1,663 60) $ 18,747)

assets	at FVTOCI For the Three Months	Ended March 31	Ended March 31
	2023 $ 14,339 3,141 $ 17,480 For the Three Months		2022
		$ 13,429 8,449 $ 21,878 Ended March 31
	2023 $ 4,968 440 ) 9 ) 189) $ 4,330		2022
( ( (		(	$ 10,641 906 ) 124 - $ 9,859

-22-

21. Revenue

Revenue
Revenue from contracts with customers Contract revenue and revenue from sale of goods Revenue from rendering of services Rental income Rental income from equipment	For the Three Months	Ended March 31
	2023 $ 903,691 338,793 4,437 $ 1,246,921		2022
			$ 942,239 270,050 4,604 $ 1,216,893

(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 Group requires partial payments from the customers when the contract is signed. Revenue is recognized on a straight-line basis during the contract period.

(2) Contract balances

Contract balances
Accounts receivable (Note 10) Contract assets System integration services Less: Allowance for impairment loss Contract assets - current Contract liabilities System integration services		March 31, 2023 $ 823,231 $ 429,489 - $ 429,489 $ 202,887		December 31, 2022 $ 1,489,172 $ 486,381 - $ 486,381 $ 238,583		March 31, 2022
						$ 594,498 $ 356,695 - $ 356,695 $ 185,118

The changes in the balance of contract assets and contract liabilities primarily result from the timing difference between the Group’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.

-23-

(3) Revenue from contracts with customers For The Three Months Ended March 31, 2023

Type of products or services Contract revenue and revenue from sale of goods Revenue from rendering of services Rental income		Reportable segment
	Business segments of the Company $ 861,668 332,821 4,379 $ 1,198,868	Business segments of the entities controlled bythe Company $ 42,023 5,972 58 $ 48,053		Total
				$ 903,691 338,793 4,437 $ 1,246,921

For the Three Months Ended March 31, 2022

Type of products or services Contract revenue and revenue from sale of goods Revenue from rendering of services Rental income		Reportable segment
	Business segments of the Company $ 880,194 263,532 4,464 $ 1,148,190	Business segments of the entities controlled bythe Company $ 62,045 6,518 140 $ 68,703		Total
				$ 942,239 270,050 4,604 $ 1,216,893

	For the Three Months	Ended March 31	Ended March 31
	2023 $ 2,505 For the Three Months		2022
		$ 722 Ended March 31
	2023 $ 1,476 - 2,496 $ 3,972 For the Three Months		2022
		$ 1,727 18,488 3,330 $ 23,545 Ended March 31
	2023 $ 1,408 1,142 251) $ 2,299		2022
(		(	$ 765 359 460) $ 664

-24-

(4) Finance costs

(4) Finance costs
Interest on bank loans Interest on lease liabilities (5) Depreciation and amortization An analysis of depreciation by function Operating costs Operating expenses An analysis of amortization by function Operating expenses (6) Employee benefits expenses Short-term employee benefits Salary Labor and health Insurance Others Post-employment benefits (Note 19) Defined contribution plans Defined benefits plans Total employee benefits expense An analysis of employee benefits expense by function Operating costs Operating expenses	For the Three Months	Ended March 31
	2023 $ 3,135 710 $ 3,845 For the Three Months			2022
		$ 983 283 $ 1,266 Ended March 31
	2023 $ 5,448 22,668 $ 28,116 $ 170 For the Three Months			2022
		$ 5,142 22,222 $ 27,364 $ 160 Ended March 31
			2022
			$ 257,316 35,849 12,085 305,250 14,216 249 14,465 $ 319,715 $ 138,668 181,047 $ 319,715

(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 $3,324 thousand and $2,720 thousand, both representing 3% of net profit before tax for the three months ended March 31, 2023 and 2022, respectively. The Company did not accrue remuneration of directors for the three months ended March 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.

-25-

The appropriations of employees’ compensation and remuneration of directors for 2022 and 2021 that were resolved by the board of directors on March 17, 2023 and March 18, 2022, respectively. The employees’ compensation amounted to $9,600 thousand and $8,450 thousand, respectively. The Company did not accrue remuneration of directors for the years ended December 31, 2022 and 2021

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 2023 and 2022 is available at the Market Observation Post System website of the Taiwan Stock Exchange.

23. Income tax

(1) Income tax recognized in profit or loss

The major components of income tax expense were as follows:

Current tax In respect of the current period Adjustments for prior years Deferred tax In respect of the current period Income tax expense recognized in profit or loss		For the Three Months	Ended March 31	Ended March 31
		2023 $ 20,675 - 2,365 $ 23,040		2022
				$ 17,975 30 1,213 $ 19,218

(2) Income tax assessments The Company and subsidiaries’ income tax returns have been assessed by the tax authority are as follows:

Income tax assessments The Company and subsidiaries’ income tax returns authority are as follows:	have been assessed
Name of the company The Company Netmaker Technology Co., Ltd. Wisemaker Technology Co. Coach Technology Management Inc.	Year of assessment
	2020 2021 2021 2021

24. 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 period

Net profit for the period
Earnings used in the computation of basic earnings per share Earnings used in the computation of diluted earnings per share	For the Three Months	Ended March 31
	2023 $ 84,431 $ 84,431		2022
			$ 68,771 $ 68,771

-26-

The weighted average number of ordinary shares outstanding (in thousand shares) is as follows:

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		For the Three Months	Ended March 31	Ended March 31
		2023 100,000 198 100,198		2022
				100,000 381 100,381

Since the Group offered to settle compensation paid to employees in cash or shares, the Group 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.

25. Financial instruments

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

The Group’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.

	value.	value.
(2)	Fair value of financial instruments measured at Fair value hierarchy March 31, 2023 Level 1 Financial assets at FVTPL Beneficial certificates $ 21,098 Financial assets at FVTOCI Investments in equity instruments at FVTOCI Listed shares $ 27,283 Unlisted shares - Total $ 27,283 December 31, 2022 Level 1 Financial assets at FVTPL Beneficial certificates $ 19,956 Financial assets at FVTOCI Investments in equity instruments at FVTOCI Listed shares $ 24,142 Unlisted shares - Total $ 24,142		fair value on a recurring basis Level 2 Level 3 $ - $ - $ - $ - - 1,595 $ - $ 1,595 Level 2 Level 3 $ - $ - $ - $ - - 1,595 $ - $ 1,595	Total
		$ 21,098 $ 27,283 - $ 27,283 Level 1		$ 21,098 $ 27,283 1,595 $ 28,878 Total
		$ 19,956 $ 24,142 - $ 24,142		$ 19,956 $ 24,142 1,595 $ 25,737

-27-

March 31, 2022 Financial assets at FVTPL Beneficial certificates Investments in equity instruments at FVTOCI Investments in equity instruments at FVTOCI Listed shares Unlisted shares Total		Level 1 $ 663,238 $ 29,302 - $ 29,302		Level 2 $ - $ - - $ -		Level 3 $ - $ - 1,595 $ 1,595		Total
								$ 663,238 $ 29,302 1,595 $ 30,897

There were no transfers between Levels 1 and 2 for the three months ended March 31, 2023 and 2022.

(3) 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)	March 31, 2023 $ 21,098 1,995,059 28,878 1,566,129	December 31, 2022 $ 19,956 2,430,681 25,737 1,989,268	March 31, 2022
			$ 663,238 1,359,505 30,897 1,331,910

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 short-term loans, notes payable, accounts payable and other payables.

(4) Financial risk management objectives and policies

The Group’s major financial instruments include equity and debt investments, accounts receivable, accounts payable, borrowings and lease liabilities. The Group’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 Group 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 Group’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 Group have foreign currency sales and purchases, which exposes the Group to foreign currency risk.

The carrying amounts of the Group’s foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period are set out in Note 29.

-28-

Sensitivity analysis

The Group is mainly exposed to USD.

The following details the Group’s sensitivity to a 10% increase and decrease in New Taiwan dollars (the functional currency) against the relevant 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 three months ended March 31, 2023 and 2022, there would be an increase of $9,036 thousand and $15,710 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.

b. Interest rate risk

The Group is exposed to interest rate risk because the Group borrow funds at both fixed and floating interest rates. The risk is managed by the Group by maintaining an appropriate mix of fixed and floating rate borrowings. The carrying amount of the Group’s financial assets and financial liabilities with exposure to interest rates at the end of the reporting period were as follows:

follows:
Fair value interest rate risk - Financial assets - Financial liabilities Cash flow interest rate risk - Financial assets - Financial liabilities	March 31, 2023 $ 882,551 146,260 275,676 172,881	December 31, 2022 $ 633,596 45,439 293,368 156,422	March 31, 2022
			$ 460,661 55,313 288,198 151,625

Sensitivity analysis

The sensitivity analysis below was determined based on the Group’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 25 basis points higher/lower and all other variables were held constant, the Group’s pre-tax profit for the three months ended March 31, 2023 and 2022 would increase/decrease by $64 thousand and $85 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 Group. As at the end of the reporting period, the Group’s maximum exposure to credit risk, which would cause a financial loss to the Group due to the failure of counterparties to discharge its obligation and

-29-

due to the financial guarantees provided by the Group, could arise from the carrying amount of the respective recognized financial assets as stated in the consolidated Balance Sheet.

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

C. Liquidity risk

The Group manages liquidity risk by monitoring and maintaining a level of cash and cash equivalents deemed adequate to finance the Group’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 Group relies on bank borrowings as a significant source of liquidity. As of March 31, 2023 and 2022, the Group 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 Group’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 Group 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.

March 31, 2023

repayment dates. March 31, 2023
	Payment on
	demand or less
	than 1	month	1`～`3 months		3 months`～`1year			1`～`5years	More than 5years
Non-derivative financial
liabilities
Non-interest bearing	$	-	$	1,375,137	$	-	$	-	$	-
Lease liabilities		4,285		8,417		37,189		83,087		-
Variable interest rate
liabilities		969		74,490		101,306		-		-
Fixed interest rate liabilities		31		17,025		-		-		-
	$	5,285	$	1,475,069	$	138,495	$	83,087	$	-
Additional information about the maturity					analysis for lease liabilities:
		Less than 1year			1	to 5years		5 to 10years
Lease liabilities		$	49,891		$	83,087		$		-
December 31, 2022

	Payment on	Payment on
	demand or less
	than 1	month	1`～`3 months	3 months`～`1year		1`～`5	years	More than 5years
Non-derivative financial
liabilities
Non-interest bearing	$	-	$ 1,807,257	$	-	$	-	$	-
Lease liabilities		836	1,672		6,497		12,714		-
Variable interest rate
liabilities		810	84,349		74,291		-		-
Fixed interest rate liabilities		6,541	18,051		-		-		-
	$	8,187	$ 1,911,329	$	80,788	$	12,714	$	-
Additional information about the maturity				analysis for lease			liabilities:
		Less than 1year		1	to 5years		5 to 10years
Lease liabilities		$	9,005	$	12,714		$		-

-30-

March 31, 2022

	Payment on	Payment on
	demand or less
	than 1 month		1`～`3 months		3 months`～`1year			1`～`5years	More than 5years
Non-derivative financial
liabilities
Non-interest bearing	$	-	$	1,179,711	$	-	$	-	$	-
Lease liabilities		3,903		7,805		35,174		29,119		-
Variable interest rate
liabilities		18,855		73,512		60,225		-		-
Fixed interest rate
liabilities		-		-		-		-		-
	$	22,758	$	1,261,028	$	95,399	$	29,119	$	-
Additional information about the				maturity	analysis for lease liabilities:
		Less than		1year	1	to 5years		5 to 10years
Lease liabilities		$	46,882		$	29,119		$		-

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.

b. Financing facilities

Financing facilities
Secured bank financing facilities Amount unused Unsecured bank financing facilities, reviewed annually and payable on demand: Amount used Amount unused		March 31, 2023 $ - $ 576,425 1,606,584 $ 2,183,009		December 31, 2022 $ - $ 610,515 1,685,614 $ 2,296,129		March 31, 2022
						$ 40,000 $ 434,548 2,058,161 $ 2,492,709

26. Related Party Transactions

Transactions and balances between the Company and its subsidiaries, which were related parties of the Company, had been eliminated on consolidation and are not disclosed in this note. Besides as disclosed elsewhere in the other notes, details of transactions between the Group and other related parties were disclosed below.

(1) Related-party and its relationship

Related party Relationship Furly Investment Co., Ltd. Investors with significant influence over the Group Chuan Gao Investment Co., Ltd. Investors with significant influence over the Group Welida Investment Co., Ltd. Substantive related party DBMaker Japan Inc. Associate CloudMaster Co., Ltd. Joint ventures

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

For the Three Months Ended March 31

Related PartyCategories Associate Joint ventures		2023 $ 6,390 422 $ 6,812		2022
				$ 3,136 9 $ 3,145

(3) Operating costs (including sales, services and rental)

Related PartyCategories Associate Joint ventures		For the Three Months	Ended March 31	Ended March 31
		2023 $ - 4 $ 4		2022
				$ 4,761 7 $ 4,768

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

Line Item	Related Party Categories	March 31, 2023	March 31, 2023	December 31, 2022 $ 2,798 72 $ 2,870	March 31, 2022	March 31, 2022
Accounts receivable	Associate Joint ventures		$ 3,029 436 $ 3,465			$ 3,233 2 $ 3,235

The outstanding accounts receivable from related parties are unsecured. For the three months ended March 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 Associate Joint ventures Investors with significant influence over the Group	March 31, 2023 $ 1,694 10 - $ 1,704	December 31, 2022 $ 2,151 1,473 10 $ 3,634	March 31, 2022	March 31, 2022
					$ - 12 - $ 12

The outstanding accounts payable from related parties are unsecured.

(6) Acquisitions of property, plant and equipment

Acquisitionprice	Acquisitionprice	Acquisitionprice
For the Three Months	Ended March 31
2023 $ -		2022
		$ 304

For the Three Months Ended March 31

Related PartyCategory/Name Acquisition of right-of-use assets Chuan Gao Investment Co., Ltd. Furly Investment Co., Ltd.		2023 $ 68,488 51,843 $ 120,331		2022
				$ - - $ -

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Line Item Lease liabilities	Related Party Category/Name Chuan Gao Investment Co., Ltd. Furly Investment Co., Ltd.		March 31, 2023 $ 68,452 47,646 $ 116,098	December 31, 2022	December 31, 2022		March 31, 2022
					$ 5,758 - $ 5,758		$ 23,126 11,565 $ 34,691

For the Three Months Ended March 31

Name Finance costs Chuan Gao Investment Co., Ltd. Furly Investment Co., Ltd.		2023 $ 359 257 $ 616		2022
				$ 91 48 $ 139

Related Party Categories/Name	For the Three Months Ended March 31 2023 2022 $ 1,006 $ 197 335 337 - 18 $ 1,341 $ 552 For the Three Months Ended March 31 2023 2022 $ 478 $ 470 For the Three Months Ended March 31	For the Three Months Ended March 31	For the Three Months Ended March 31	For the Three Months Ended March 31	For the Three Months Ended March 31
					2022
Chuan Gao Investment Co., Ltd. Furly Investment Co., Ltd. Substantive related party Name
		2023	2022 $ 470 Ended March 31		2022
	2023 $ 62,396 3,202 $ 65,598			2022
				$ 55,878 2,868 $ 58,746

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

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

warranty were as follows:
Pledge deposits (classified as financial assets at amortized cost) Property, plant and equipment -net		March 31, 2023 $ 227,598 - $ 227,598	December 31, 2022 $ 231,060 - $ 231,060		March 31, 2022
					$ 218,261 74,435 $ 292,696

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28. Significant Contingent Liabilities and Unrecognized Commitments

As of March 31, 2023, for the contracts with customers , the Group issued guarantee notes and had bank guarantee amounting to $106,449 thousand and $386,544 thousand, respectively. 29. Significant Assets and Liabilities Denominated in Foreign Currencies

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

March 31, 2023

March 31, 2023
Financial assets Monetary items USD Non-monetary item JPY Financial liabilities Monetary items USD December 31, 2022 Financial assets Monetary items USD Non-monetary items JPY Financial liabilities Monetary items USD March 31, 2022 Financial assets Monetary items USD Non-monetary items JPY Financial liabilities Monetary items USD	Foreign currency $ 2,862 64,356 5,829 Foreign currency $ 3,012 66,636 6,266 Foreign currency $ 851 55,541 6,340	Exchange rate 30.45 0.2288 30.45 Exchange rate 30.71 0.2324 30.71 Exchange rate 28.625 0.2353 28.625	Carryingamount
			$ 87,136 14,725 177,491 Carryingamount
			$ 92,484 15,486 192,435 Carryingamount
			$ 24,374 13,069 181,478

The significant realized and unrealized foreign exchange gains (losses) were as follows: For the Three Months Ended March 31

Foreign currency USD USD	2023	Net exchange (loss) gain ( $ 453 ) 1,859	2022
	Exchange rate 30.595(USD: NTD) 6.842(USD: RMB)		Exchange rate 27.994 (USD: NTD) 6.351 (USD: RMB)	Net exchange (loss) gain
				$ 433 424

-34-

30. Separately Disclosed Items

(1) Information about significant transactions and (2)investees:
A. Financing provided to others: None.
B. Endorsements/guarantees provided (Table 1).
C. Marketable securities held (excluding investment in subsidiaries, associates and joint ventures) (Table 2).
D. Marketable securities acquired and disposed of at costs or prices at least NT$300 million or 20% of the paid-in capital: None.
E. Acquisition of individual real estate at costs of at least NT$300 million or 20% of the paid-in capital: None.
F. Disposal of individual real estate at prices of at least NT$300 million or 20% of the paid-in capital: None.
G. Total purchases from or sales to related parties amounting to at least NT$100 million or 20% of the paid-in capital: None.
H. Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital: None.
I. Trading in derivative instruments: None.
J. Other: Intercompany relationships and significant intercompany transactions: (Table 3).
K. Information on investees (Table 4).
(3) Information on investments in Mainland China:
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 5).
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.
(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 6).

31. Segment Information

Information reported to the chief operating decision maker for the purpose of resource allocation and assessment of segment performance focuses on the types of goods or services delivered or provided. The Group’s reportable segments were the operating segments of the Company and the entities controlled by the Company.

-35-

(1) Segment revenue and results

	Segment revenue For the Three Months Ended March 31 2023 2022 $ 1,200,401 $ 1,148,931 55,149 73,275 8,629) ( 5,313) $ 1,246,921 $ 1,216,893	Segment revenue For the Three Months Ended March 31 2023 2022 $ 1,200,401 $ 1,148,931 55,149 73,275 8,629) ( 5,313) $ 1,246,921 $ 1,216,893	Segmentprofit or loss	Segmentprofit or loss
			For the Three Months Ended March 31
	2023 $ 1,200,401 55,149 8,629) $ 1,246,921		2023	2022 $ 69,872 ( 8,357 ) 312 61,827 25,256 $ 87,083
(		(	$ 109,952 ( 7,442 ) 237 102,747 4,284 $ 107,031

Segment revenue reported above represents revenue generated from external customers and inter-segment transactions.

(2) Total segment assets and liabilities

Segment assets Business segments of the Company Business segments of the entities controlled by the Company Total Segment liabilities Business segments of the Company Business segments of the entities controlled by the Company Total		March 31, 2023 $ 3,798,385 385,542 $ 4,183,927 $ 1,782,318 261,484 $ 2,043,802		December 31, 2022 $ 4,025,953 408,987 $ 4,434,940 $ 2,097,252 282,875 $ 2,380,127		March 31, 2022
						$ 3,384,898 415,318 $ 3,800,216 $ 1,505,038 242,380 $ 1,747,418

-36-

SYSCOM COMPUTER ENGINEERING CO. AND SUBSIDIARIES Endorsements/Guarantees Provided

For the Three Months Ended March 31, 2023

Table 1

(In Thousands of New Taiwan Dollars and U.S Dollars, Unless Stated Otherwise)

No.	Endorser/ Guarantor	Endorsee/ Guarantee		Limits on Endorsement/ Guarantee Given on Behalf of Each Party	Maximum Amount Endorsed/ Guaranteed During the Period	Outstanding Endorsement/ Guarantee at the End of the Period (Note 1)	Actual Borrowing Amount	Amount Endorsed/ Guaranteed by Collateral	Ratio of Accumulated Endorsement /Guarantee to Net Equity in Latest Financial Statements (%)	Aggregate Endorsement/ Guarantee Limit	Endorsement /Guarantee Given by Parent on Behalf of Subsidiaries	Endorsement /Guarantee Given by Subsidiaries on Behalf of Parent	Endorsement /Guarantee Given on Behalf of Companies in Mainland China
		Name	Relationship
0	Syscom Computer Engineering Co.	Syscom Computer (Shenzhen) Co., Ltd. Xian Linan Computer Co., Ltd. Netmaker Technology Co., Ltd. Coach Technology Management Inc.	Indirect subsidiary Indirect subsidiary Subsidiaries Subsidiaries	20% of the net worth $427,159 Same as above Same as above Same as above	$ 331,905 ( USD 10,900 ) 60,139 ( USD 1,975 ) 85,000 15,000	$ 331,950 ( USD 10,900 ) 41,869 ( USD 1,375 ) 85,000 15,000	$ 155,639 ( USD 5,111 ) 17,236 ( USD 566 ) 17,000 -	$ - - - -	15.54 1.96 3.98 0.70	50% of the net worth $1,067,898 Same as above Same as above Same as above	Yes Yes Yes Yes	No No No No	Yes Yes No No

Note : The above amounts were translated into New Taiwan dollar at the prevailing exchange rate as of March 31, 2023.

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SYSCOM COMPUTER ENGINEERING CO. AND SUBSIDIARIES Marketable Securities Held March 31, 2023

Table 2

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

Holding Company Name	Type and name of marketable securities	Relationship with the Holding Company	Financial Statement Account		March 31, 2023	March 31, 2023		Note
				Number of shares	Carrying amount	Percentage of Ownership (%)	Fair value
SYSCOM COMPUTER ENGINEERING CO. Coach Technology Management Inc.	Beneficial certificates Yuanta Global Leaders Balanced Fund – TWD(A) Stocks Engsound Technical Enterprise Co., Ltd. Turn Cloud Technology Service Inc. Shin Kong Financial Holding Co., Ltd. Dimension Computer Technology Co., Ltd. Beneficial certificates Fuh Hwa Money Market Fund	`－` `－` `－` `－` `－` `－`	Financial assets at fair value through profit or loss - current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through profit or loss - current	1,966 273 195 166 2 31	$ 20,645 1,595 25,841 1,399 43 453	- 9.09 1.00 - - -	$ 20,645 1,595 25,841 1,399 43 453

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.

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SYSCOM COMPUTER ENGINEERING CO. AND SUBSIDIARIES

Intercompany Relationships and Significant Intercompany Transactions and Subsidiary and Between Subsidiaries For the Three Months Ended March 31, 2023

Table 3

(In Thousands of New Taiwan Dollars)

No.	Name of the trader	Counterparty of the transaction	Relationship with the trader (Note)		Transaction details	Transaction details
				Account on the financial statements	Amount	Trading terms	As a percentage of consolidated total revenue or total assets
0	The Company The Company The Company The Company The Company The Company	Netmaker Technology Co. Netmaker Technology Co. Netmaker Technology Co. Wisemaker Technology Co. Wisemaker Technology Co. Wisemaker TechnologyCo.	1 1 1 1 1 1	Prepayment for purchases Accounts payable Maintenance costs Accounts payable Cost of goods sold Maintenance costs	$ 11,653 1,911 1,832 3,416 5,557 2,323	General trading terms General trading terms General trading terms General trading terms General trading terms General tradingterms	- - - - -

Note: 1.Parent to subsidiary.

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SYSCOM COMPUTER ENGINEERING CO. AND SUBSIDIARIES Information on Investees March 31, 2023

Table 4

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

Investor Company	Investee Company	Location	Main Businesses and Products	Original investment amount	Original investment amount	As of March 31,2023	As of March 31,2023	As of March 31,2023	Net Income (Loss) of the Investee(Note)	Share of Profit (Loss)	Note
				March 31, 2023	December 31, 2022	Number of Shares (Thousands)	Percentage of Ownership	Carrying amount
SYSCOM COMPUTER ENGINEERING CO. Coach Technology Management Inc.	Coach Technology Management Inc. Casemaker Inc. SYSCOM INTERNATIONAL INC. Netmaker Technology Co., Ltd. Wisemaker Technology Co. DBMaker Japan, Inc. Syscom Computer(Thailand)Co., Ltd. Cloudmaster Co., Ltd. Syscom Computer(Thailand)Co., Ltd.	Taipei City California, U.S.A. Cayman Islands Taipei City Taipei City Tokyo, Japan Thailand Taipei City Thailand	Diagnostic consulting for corporate management, domestic and foreign investment referral, and computerized design consulting. Sales of computer software, hardware and related products. Investments in other businesses Information software, data processing and electronic information supply services Sales of computer software, hardware and related products. Development and sales of computer system software and hardware Development and maintenance of software and other businesses Information software, data processing and electronic information supply services Development and maintenance of software and other businesses	$ 19,200 USD 1,300 USD 6,050 18,763 42,007 JPY 53,260 THB 33,014 65,000 THB 200	$ 19,200 USD 1,300 USD 6,050 18,763 41,697 JPY 53,260 THB 33,014 65,000 THB 200	1,950 1,300 6,050 2,858 2,674 5 3,400 6,500 20	97.50 100.00 100.00 86.60 99.04 49.89 91.40 50.00 0.54	$ 3,990 97,391 ( 76,287 ) 38,990 56,902 14,725 3,085 53,868 18	( $ 350 ) ( 293 ) ( 4,565 ) ( 324 ) ( 1,563 ) ( 1,051 ( 34) ( 246 ) ( 34)	( $ 342 ) ( 293 ) ( 4,565 ) ( 280 ) ( 1.543 ) ( 524) ( 31) ( 123 ) Not applicable	Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Equity-method investee Subsidiary Equity-method investee Subsidiary

Note: The foreign currency amount of the net income of the investee is expressed in New Taiwan dollars at the average exchange rate of the three months ended March 31,2023.

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SYSCOM COMPUTER ENGINEERING CO. AND SUBSIDIARIES Information on Investments in Mainland China

For the Three Months Ended March 31, 2023

Table 5

(In Thousands of New Taiwan Dollars/foreign currency)

Investee Company	Main Businesses and Products	Paid-in capital	Method of Investment	Accumulated Outward Remittance for Investment from Taiwan as of January1,2023	Accumulated Outward Remittance for Investment from Taiwan as of January1,2023	Remittance of Funds	Remittance of Funds	Accumulated Outward Remittance for Investment from Taiwan as of March 31,2023	Net Income (Loss) of the Investee	% Ownership of Direct or Indirect Investment	Investment Gain (Loss)	Carrying Amount as of March 31, 2023	Accumulated Repatriation of Investment Income as of March 31, 2023
						Outward	Inward
Syscom Computer (Shenzhen)Co., Ltd. Xian Linan Computer Co., Ltd.	Computer equipment software development, sales of self-developed technical achievements services, computer system integration and network wiring engineering. Development and manufacture of computer equipment and computer software; sale of self-manufactured products and provision of technical services.	$ 137,025 ( USD 4,500 ) 70,035 ( USD 2,300 )	Note 1 Note 1	$ ( USD ( USD	126,977 4,170 ) 46,223 1,518 )	$ - -	$ - -	$ 126,977 ( USD 4,170 ) 46,223 ( USD 1,518 )	( $ 4,108 ) (( USD 135)) (Note 2) ( 1,148 ) ( (USD 38 )) (Note 2)	98.27% 74.38%	( $ 4,037 ) ( (USD 1,333 )) (Note 2) ( 854 ) ( (USD 28)) (Note 2)	( $ 77,508 ) ( (USD 2,545)) (Note 2) ( 3,611 ) ( (USD 119 )) (Note 2)	$ - -

Accumulated Outward Remittance for Investment in Mainland China as of March 31,2023		Investment Amounts Authorized by Investment Commission, MOEA			Upper Limit on the Amount of Investment Stipulated by Investment Commission, MOEA (Note 3)
$ 173,200 (USD 5,688)		$ 173,200 (USD 5,688) (Note 1(II))			$ 1,281,477
		13,282 (USD 436) (Note 1(I))

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

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

(II) 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 not reviewed by CPAs on March 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 = $2,135,795 × 60% = $1,281,477

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

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

Table 6

Table 6
Name of major shareholder	Shareholding
	Number of shares held	Shareholding percentage
Jui-Fu Liu Furly Investment Co., Ltd. Su-Chen Yang Chi-Shan Liu	18,346,787 8,529,801 8,524,001 7,598,911	18.34% 8.52% 8.43% 7.59%

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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AI assistant

SYSCOM — Interim / Quarterly Report 2023

52093_rns_2023-12-22_8f1b4e44-0dea-4422-bf84-40f74c33f2d8.pdf

§ Table of Contents §

INDEPENDENT AUDITORS’ REVIEW REPORT

Introduction

Scope of Review

Basis for Qualified Conclusion

Qualified Conclusion

Notice to Readers

SYSCOM COMPUTER ENGINEERING CO. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

MARCH 31, 2023, DECEMBER 31, 2022 AND MARCH 31, 2022

SYSCOM COMPUTER ENGINEERING CO. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE THREE MONTHS ENDED MARCH 31,2023 AND 2022

(Reviewed, Not Audited)

SYSCOM COMPUTER ENGINEERING CO. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

FOR THE THREE MONTHS ENDED MARCH 31,2023 AND 2022

SYSCOM COMPUTER ENGINEERING CO. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31,2023 AND 2022

4. Summary of Significant Accounting Policies (1) Statement of Compliance

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

6. Cash and cash equivalents

9. Financial assets at amortized cost

10.

Accounts receivable

March 31, 2023

12. Subsidiaries (1) Subsidiaries included in the consolidated financial statements The consolidated entities were as follows:

14. Property, plant and equipment

16. Intangible assets

17.

Loans

18.

Other payables

19. Retirement benefits plans

20. Equity

21. Revenue

For the Three Months Ended March 31, 2022

23. Income tax

24. Earnings per share

Net profit for the period

25. Financial instruments

(3) Categories of financial instruments

(4) Financial risk management objectives and policies

A. Market risk

Sensitivity analysis

The Group is mainly exposed to USD.

b. Interest rate risk

Sensitivity analysis

March 31, 2022

26. Related Party Transactions

28. Significant Contingent Liabilities and Unrecognized Commitments

March 31, 2023

30. Separately Disclosed Items

31. Segment Information

(2) Total segment assets and liabilities

SYSCOM COMPUTER ENGINEERING CO. AND SUBSIDIARIES Endorsements/Guarantees Provided

Table 1

SYSCOM COMPUTER ENGINEERING CO. AND SUBSIDIARIES Marketable Securities Held March 31, 2023

Table 2

SYSCOM COMPUTER ENGINEERING CO. AND SUBSIDIARIES

Table 3

SYSCOM COMPUTER ENGINEERING CO. AND SUBSIDIARIES Information on Investees March 31, 2023

Table 4

SYSCOM COMPUTER ENGINEERING CO. AND SUBSIDIARIES Information on Investments in Mainland China

Table 5

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SYSCOM Interim / Quarterly Report 2023