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SYSCOM Interim / Quarterly Report 2023

Dec 22, 2023

52093_rns_2023-12-22_5b6c602a-f4f9-4d97-bc80-874d84552e1d.pdf

Interim / Quarterly Report

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Stock Code: 2453

Syscom Computer Engineering Co. and Subsidiaries

Consolidated Financial Statements for the Six Months Ended June 30, 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.

  • 1 -

§ Table of Contents §

§ 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
13～32
(7) Related Parties Transactions
32~34
(8) Assets Pledged as Collateral
34
(9) Significant Contingent Liabilities and
Unrecognized Commitments
34
(10) Significant Disaster Loss
-
(11) Other Matters
-
(12) Significant Events after Reporting Period
-
(13) Significant Assets and Liabilities Denominated
in Foreign Currencies
35~36
(14) Separately Disclosed Items
A. Information about significant transactions
36、38～40
B. Information on investees
36、41
C. Information on investment in mainland
China
36、42
D. Information of major shareholders
36、43
(15) Segment Information
37		 Notes to Financial
Statements
-
-
-
-
-
-
-
1
2
3
4
5
6-25
26
27
28
-
-
-
29
30
30
30
30
31
  • 2 -

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 June 30, 2023 and 2022, the related consolidated statements of comprehensive income for the three months ended June 30, 2023 and 2022 and for the six months ended June 30,2023 and 2022, the consolidated statements of changes in equity and cash flows for the six months then ended, and the related 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 June 30, 2023 and 2022, combined total assets of these non-significant subsidiaries were NT$377,872 thousand and NT$416,796 thousand, respectively, representing 9% and 11%, respectively, of the consolidated total assets, and combined total liabilities of these subsidiaries were NT$255,919 thousand and NT$257,878 thousand, respectively, representing 11% and 13%, respectively, of the consolidated total liabilities; for the three months ended June 30, 2023 and 2022 and for the six months ended June 30,2023 and 2022, the amounts of combined total comprehensive loss of these subsidiaries were NT$12,985 thousand, NT$25,982 thousand, NT$25,352 thousand and NT$37,033 thousand, respectively, representing (26)%, (92)%, (19)% and (35)%, respectively, of the consolidated total comprehensive income. As disclosed in Note 13 to the consolidated financial statements, as of June 30, 2023 and 2022, investments accounted for using the equity method were NT$67,431 thousand and NT$65,369 thousand, respectively, and for the three months ended June 30, 2023 and 2022 and for the six months ended June 30, 2023 and 2022, the comprehensive income(loss) of these equity-method investments were NT$(140) thousand, NT$320 thousand, NT$(787) thousand and NT$1,911 thousand, respectively, which were calculated on the basis of financial statements that have not been reviewed. In addition, the information related to the subsidiaries and investee companies mentioned in Note 30 have also 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

  • 3 -

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 June 30, 2023 and 2022, its consolidated financial performance for the three months ended June 30, 2023 and 2022, and of its consolidated financial performance and its consolidated cash flows for the six months ended June 30, 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

August 9, 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.

  • 4 -

SYSCOM COMPUTER ENGINEERING CO. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

JUNE 30, 2023, DECEMBER 31, 2022 AND JUNE 30, 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)
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		 June 30,2023
Amount
％
$ 569,612
13
454
-
177,690
4
521,665
12
2,702
-
964,905
23
4,563
-
312
-
662,332
16
438,238
10
137,038

3
3,479,511
81
38,050
1
174,861
4
67,431
2
357,460
8
119,248
3
2,625
-
10,545
-
55,730

1
825,950
19
$ 4,305,461
100
$ 173,178
4
252,555
6
1,329
-
1,268,300
29
399,689
9
32,696
1
48,693
1
21,062

1
2,197,502
51
10,709
-
71,325
2
41,941
1
14,524

-
138,499

3
2,336,001
54
1,000,000
23
1,399

-
330,483
8
17,619
-
598,150
14
946,252
22
18,079

1
1,965,730
46
3,730

-
1,969,460
46
$ 4,305,461
100		 (In Thousands of New Taiwan Dollars)
December 31,2022
June 30,2022
Amount
％
Amount
％
$ 600,941
13
$ 663,374
17
19,956
-
277,326
7
202,721
5
216,633
5
486,381
11
449,370
11
2,598
-
4,867
-
1,489,172
34
752,097
19
6,054
-
21,124
1
265
-
266
-
453,997
10
461,077
12
383,124
9
342,451
9
119,540

3

90,479

2
3,764,749
85
3,279,064
83
25,737
1
29,772
1
129,195
3
120,022
3
69,518
2
65,369
2
357,328
8
352,858
9
20,655
-
42,757
1
2,410
-
2,455
-
13,665
-
18,060
-
51,683

1

39,215

1
670,191
15

670,508
17
$ 4,434,940
100
$ 3,949,572
100
$ 180,922
4
$ 167,547
4
238,583
6
232,666
6
16,026
-
883
-
1,400,023
32
1,096,697
28
392,297
9
364,688
9
33,097
1
28,563
1
8,513
-
27,777
1
14,796

-

21,165

-
2,284,257
52
1,939,986
49
11,130
-
11,148
-
12,426
-
16,421
-
54,658
1
74,331
2
17,656

1

16,703

1
95,870

2

118,603

3
2,380,127
54
2,058,589
52
1,000,000
22
1,000,000
26
1,547

-

1,547

-
303,977
7
303,977
8
17,619
1
17,619
-
722,955
16

553,672
14
1,044,551
24

875,268
22
3,747

-

5,263

-
2,049,845
46
1,882,078
48
4,968

-

8,905

-
2,054,813
46
1,890,983
48
$ 4,434,940
100
$ 3,949,572
100		 (In Thousands of New Taiwan Dollars)
December 31,2022
June 30,2022
Amount
％
Amount
％
$ 600,941
13
$ 663,374
17
19,956
-
277,326
7
202,721
5
216,633
5
486,381
11
449,370
11
2,598
-
4,867
-
1,489,172
34
752,097
19
6,054
-
21,124
1
265
-
266
-
453,997
10
461,077
12
383,124
9
342,451
9
119,540

3

90,479

2
3,764,749
85
3,279,064
83
25,737
1
29,772
1
129,195
3
120,022
3
69,518
2
65,369
2
357,328
8
352,858
9
20,655
-
42,757
1
2,410
-
2,455
-
13,665
-
18,060
-
51,683

1

39,215

1
670,191
15

670,508
17
$ 4,434,940
100
$ 3,949,572
100
$ 180,922
4
$ 167,547
4
238,583
6
232,666
6
16,026
-
883
-
1,400,023
32
1,096,697
28
392,297
9
364,688
9
33,097
1
28,563
1
8,513
-
27,777
1
14,796

-

21,165

-
2,284,257
52
1,939,986
49
11,130
-
11,148
-
12,426
-
16,421
-
54,658
1
74,331
2
17,656

1

16,703

1
95,870

2

118,603

3
2,380,127
54
2,058,589
52
1,000,000
22
1,000,000
26
1,547

-

1,547

-
303,977
7
303,977
8
17,619
1
17,619
-
722,955
16

553,672
14
1,044,551
24

875,268
22
3,747

-

5,263

-
2,049,845
46
1,882,078
48
4,968

-

8,905

-
2,054,813
46
1,890,983
48
$ 4,434,940
100
$ 3,949,572
100		 (In Thousands of New Taiwan Dollars)
December 31,2022
June 30,2022
Amount
％
Amount
％
$ 600,941
13
$ 663,374
17
19,956
-
277,326
7
202,721
5
216,633
5
486,381
11
449,370
11
2,598
-
4,867
-
1,489,172
34
752,097
19
6,054
-
21,124
1
265
-
266
-
453,997
10
461,077
12
383,124
9
342,451
9
119,540

3

90,479

2
3,764,749
85
3,279,064
83
25,737
1
29,772
1
129,195
3
120,022
3
69,518
2
65,369
2
357,328
8
352,858
9
20,655
-
42,757
1
2,410
-
2,455
-
13,665
-
18,060
-
51,683

1

39,215

1
670,191
15

670,508
17
$ 4,434,940
100
$ 3,949,572
100
$ 180,922
4
$ 167,547
4
238,583
6
232,666
6
16,026
-
883
-
1,400,023
32
1,096,697
28
392,297
9
364,688
9
33,097
1
28,563
1
8,513
-
27,777
1
14,796

-

21,165

-
2,284,257
52
1,939,986
49
11,130
-
11,148
-
12,426
-
16,421
-
54,658
1
74,331
2
17,656

1

16,703

1
95,870

2

118,603

3
2,380,127
54
2,058,589
52
1,000,000
22
1,000,000
26
1,547

-

1,547

-
303,977
7
303,977
8
17,619
1
17,619
-
722,955
16

553,672
14
1,044,551
24

875,268
22
3,747

-

5,263

-
2,049,845
46
1,882,078
48
4,968

-

8,905

-
2,054,813
46
1,890,983
48
$ 4,434,940
100
$ 3,949,572
100		 (In Thousands of New Taiwan Dollars)
December 31,2022
June 30,2022
Amount
％
Amount
％
$ 600,941
13
$ 663,374
17
19,956
-
277,326
7
202,721
5
216,633
5
486,381
11
449,370
11
2,598
-
4,867
-
1,489,172
34
752,097
19
6,054
-
21,124
1
265
-
266
-
453,997
10
461,077
12
383,124
9
342,451
9
119,540

3

90,479

2
3,764,749
85
3,279,064
83
25,737
1
29,772
1
129,195
3
120,022
3
69,518
2
65,369
2
357,328
8
352,858
9
20,655
-
42,757
1
2,410
-
2,455
-
13,665
-
18,060
-
51,683

1

39,215

1
670,191
15

670,508
17
$ 4,434,940
100
$ 3,949,572
100
$ 180,922
4
$ 167,547
4
238,583
6
232,666
6
16,026
-
883
-
1,400,023
32
1,096,697
28
392,297
9
364,688
9
33,097
1
28,563
1
8,513
-
27,777
1
14,796

-

21,165

-
2,284,257
52
1,939,986
49
11,130
-
11,148
-
12,426
-
16,421
-
54,658
1
74,331
2
17,656

1

16,703

1
95,870

2

118,603

3
2,380,127
54
2,058,589
52
1,000,000
22
1,000,000
26
1,547

-

1,547

-
303,977
7
303,977
8
17,619
1
17,619
-
722,955
16

553,672
14
1,044,551
24

875,268
22
3,747

-

5,263

-
2,049,845
46
1,882,078
48
4,968

-

8,905

-
2,054,813
46
1,890,983
48
$ 4,434,940
100
$ 3,949,572
100
Amount
$ 569,612

454
177,690
521,665

2,702
964,905

4,563
312
662,332

438,238

137,038

3,479,511

38,050
174,861
67,431
357,460
119,248
2,625
10,545
55,730

825,950

$ 4,305,461

$ 173,178
252,555
1,329
1,268,300

399,689
32,696
48,693
21,062

2,197,502

10,709
71,325
41,941
14,524

138,499

2,336,001

1,000,000

1,399

330,483
17,619
598,150

946,252

18,079

1,965,730

3,730

1,969,460

$ 4,305,461
 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
$ 663,374

277,326
216,633
449,370

4,867
752,097

21,124
266
461,077

342,451
90,479

3,279,064

29,772
120,022
65,369
352,858
42,757
2,455
18,060
39,215

670,508

$ 3,949,572

$ 167,547
232,666
883
1,096,697

364,688
28,563
27,777
21,165

1,939,986

11,148
16,421
74,331
16,703

118,603

2,058,589

1,000,000

1,547

303,977
17,619
553,672

875,268

5,263

1,882,078

8,905

1,890,983

$ 3,949,572
 ％

































































17
7
5
11
-
19
1
-
12
9

2
83
1
3
2
9
1
-
-

1
17
100
4
6
-
28
9
1
1

-
49
-
-
2

1

3
52
26

-
8
-
14
22

-
48

-
48
100

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

(With Deloitte & Touche auditors’ review report dated August 9, 2023)

  • 5 -

SYSCOM COMPUTER ENGINEERING CO. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

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

For the Three Months EndedJune 30 Three Months EndedJune 30 Three Months EndedJune 30 Three Months EndedJune 30 For the Six Months Six Months EndedJune 30
2023 2022 2023 2022
Code Amount ％ Amount ％ Amount ％ Amount ％
OPERATING REVENUE
(Notes 21 and 26)
4100
Sales
 $ 1,057,569 74 $ 907,325
 71 $ 1,961,260
 73 $ 1,849,564
 74
4600
Maintenance revenue		 369,706 26 366,072
 29 708,499
 27 636,122
 26
4300
Rental revenue
 4,378 - 4,479
 - 8,815
-		 9,083
 -
4000
Total operating revenue
 1,431,653 100 1,277,876
 100 2,678,574
 100 2,494,769
 100


OPERATING COSTS (Notes
11, 19, 22, and 26)
5110
Cost of goods sold		 790,970 55 678,697
 53 1,460,109
 55 1,395,503
 56
5600
Maintenance costs		 248,965 18 263,006
 21 488,958
 18 461,246
 19
5300
Rental costs
 3,243 - 3,248
 - 7,363
-		 7,080
 -
5000
Total operating costs
 1,043,178 73 944,951
 74 1,956,430
 73 1,863,829
 75

5900
GROSS PROFIT
 388,475 27 332,925
 26 722,144
 27 630,940
 25


OPERATING EXPENSES
(Notes 10, 19, 22, and 26)
6100
Selling and marketing
expenses 287,366 20 252,704
 20 464,986
 18 423,400
 17
6300
Research and development
expenses 55,641 4 57,848 4 108,947 4 123,354 5
6450
Expected credit loss
(reversal of credit loss)on
trade receivables 27 - ( 24)
 - 23
-		 ( 38)
 -
6000
Total operating expenses
 343,034 24 310,528
 24 573,956
 22 546,716
 22

6900
PROFIT FROM OPERATIONS		 45,441
3		 22,397
 2 148,188
5		 84,224
 3


NON-OPERATING INCOME
AND EXPENSES
7100
Interest income (Note 22)		 3,008 - 1,022 - 5,513 - 1,744 -
7010
Other income (Notes 22 and
26) 5,095 - 16,511 1 9,067 - 40,056 2
7020
Other gains and losses (Note
22) (
4,763 )		 - (
6,197 )
-		 (
2,464 )
-		 (
5,533 )
-
7050
Finance costs (Notes 22 and
26) (
3,919 )		 - (
1,678 )
-		 (
7,764 )
-		 (
2,944 )
-
7060
Share of profit or loss of
associates and joint
ventures (Note 13) ( 140) - 320
 - ( 787)
-		 1,911
 -
7000
Total non-operating
income and expenses ( 719) - 9,978
 1 3,565
-		 35,234
 2

7900
PROFIT BEFORE INCOME
TAX 44,722 3 32,375 3 151,753 5 119,458 5

7950
INCOME TAX EXPENSE
(Notes 4 and 23) 8,091
1		 6,238
 1 31,131
1		 25,456
 1

8200
NET PROFIT
 36,631
2		 26,137
 2 120,622
4		 94,002
 4
(Continued)
  • 6 -
Code
OTHER COMPREHENSIVE
INCOME
8310
Items that will not be
reclassified subsequently
to profit or loss:
8316
Unrealized (loss) gain
on investments in
equity instruments at
fair value through
other comprehensive
income(Note 20)
8360
Items that may be
reclassified subsequently
to profit or loss:
8361
Exchange differences on
translating the
financial statements
of foreign
operations(Note 20)
8370
Share of the other
comprehensive
income of associates
and joint ventures
accounted for using
the equity
method(Note 20)
8300
Total other
comprehensive
income, net of income
tax

8500TOTAL COMPREHENSIVE
INCOME

NET INCOME
ATTRIBUTABLE TO:
8610
Owners of the Company

8620
Non-controlling interests

8600


TOTAL COMPREHENSIVE
INCOME (LOSS)
ATTRIBUTABLE TO:
8710
Owners of the Company

8720
Non-controlling interests

8700


EARNINGS PER SHARE (Note
24)
9710
Basic

9810
Diluted
 For the Three Months EndedJune 30
2023
2022
Amount
％
Amount
％
$ 9,172
1
( $ 1,125 )
-

3,753
-
3,408
-

153)

-
(
200)

-

12,772

1

2,083

-

$ 49,403

3
$ 28,220

2

$ 37,270
3
$ 27,007
2


639)

-
(
870)

-

$ 36,631

3
$ 26,137

2

$ 49,962
3
$ 29,139
2


559)

-
(
919)

-

$ 49,403

3
$ 28,220

2

$ 0.37
$ 0.27

$ 0.37
$ 0.27
 For the Three Months EndedJune 30
2023
2022
Amount
％
Amount
％
$ 9,172
1
( $ 1,125 )
-

3,753
-
3,408
-

153)

-
(
200)

-

12,772

1

2,083

-

$ 49,403

3
$ 28,220

2

$ 37,270
3
$ 27,007
2


639)

-
(
870)

-

$ 36,631

3
$ 26,137

2

$ 49,962
3
$ 29,139
2


559)

-
(
919)

-

$ 49,403

3
$ 28,220

2

$ 0.37
$ 0.27

$ 0.37
$ 0.27
 For the Three Months EndedJune 30
2023
2022
Amount
％
Amount
％
$ 9,172
1
( $ 1,125 )
-

3,753
-
3,408
-

153)

-
(
200)

-

12,772

1

2,083

-

$ 49,403

3
$ 28,220

2

$ 37,270
3
$ 27,007
2


639)

-
(
870)

-

$ 36,631

3
$ 26,137

2

$ 49,962
3
$ 29,139
2


559)

-
(
919)

-

$ 49,403

3
$ 28,220

2

$ 0.37
$ 0.27

$ 0.37
$ 0.27
 For the Six Months Six Months EndedJune 30 EndedJune 30
2023 ％
1

-

-


1


3

3


-


3

3


-


3


 2022 2023 ％
1

-

-


1


5

4


-


4

5


-


5


 2022
Amount
$ 9,172
3,753

153)

12,772

$ 49,403

$ 37,270

639)

$ 36,631

$ 49,962

559)

$ 49,403

$ 0.37
$ 0.37		 Amount
( $ 1,125 )
3,408
(
200)


2,083

$ 28,220

$ 27,007
(
870)

$ 26,137

$ 29,139
(
919)

$ 28,220

$ 0.27
$ 0.27		 Amount
$ 12,313
2,283

193)

14,403

$ 135,025

$ 121,701

1,079)

$ 120,622

$ 136,033

1,008)

$ 135,025

$ 1.22
$ 1.22		 Amount
$ 7,324
5,195

260)

12,259

$ 106,261

$ 95,778

1,776)

$ 94,002

$ 107,962

1,701)

$ 106,261

$ 0.96
$ 0.96		 ％

(



(


(
(



(


(
(



(


(


 -
-

-

-

4
4

-

4
4

-

4

The accompanying notes are an integral part of the consolidated financial statements. (With Deloitte & Touche auditors’ review report dated August 9, 2023)

(Concluded)

  • 7 -

SYSCOM COMPUTER ENGINEERING CO. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

FOR THE SIX MONTHS ENDED JUNE 30,2023 AND 2022

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

Equity attributable to owners of the Company

C o d e
A1
BALANCE AT JANUARY 1, 2022

Appropriation of the 2021 earnings
B1
Legal reserve
B5
Cash dividends - NT$1.9 per share
D1
Net profit for the six months ended June 30, 2022
D3
Other comprehensive income (loss) for the six
months ended June 30, 2022, net of income tax
D5
Total comprehensive income (loss) for the six
months ended June 30, 2022
O1
Cash dividends from subsidiary

Z1
BALANCE AT JUNE 30, 2022

A1
BALANCE AT JANUARY 1, 2023

Appropriation of the 2022 earnings
B1
Legal reserve
B5
Cash dividends - NT$2.2 per share
D1
Net profit for the six months ended June 30, 2023
D3
Other comprehensive income (loss) for the six
months ended June 30, 2023, net of income tax
D5
Total comprehensive income (loss) for the six
months ended June 30, 2023
M5
Actual acquisition of interests in subsidiaries
O1
Cash dividends from subsidiary

Z1
BALANCE AT JUNE 30, 2023
 Share capital -
ordinary shares
$ 1,000,000

-
-

-

-


-


-

$ 1,000,000

$ 1,000,000

-
-

-

-


-

-


-

$ 1,000,000
 Capitalsurplus
$ 1,547

-
-
-

-


-


-

$ 1,547

$ 1,547

-
-
-

-


-

(
148)

-

$ 1,399
 Retained earnings Unappropriated
earnings
$ 669,982

(
22,088 )
(
190,000 )
95,778

-


95,778


-

$ 553,672

$ 772,955

(
26,506 )
(
220,000 )
121,701

-


121,701

-

-

$ 598,150
 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

-
-
-
-

-
-

4,860

7,324


4,860

7,324


-

-

($ 15,490)
$ 20,753

( $ 10,592 )
$ 14,339

-
-
-
-

-
-

2,019

12,313


2,019

12,313

-
-


-

-

($ 8,573)
$ 26,652
 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

-
-
-
-

-
-

4,860

7,324


4,860

7,324


-

-

($ 15,490)
$ 20,753

( $ 10,592 )
$ 14,339

-
-
-
-

-
-

2,019

12,313


2,019

12,313

-
-


-

-

($ 8,573)
$ 26,652
 Total
$ 1,964,116

-

190,000 )
95,778

12,184

107,962

-

$ 1,882,078

$ 2,049,845

-

220,000 )
121,701

14,332

136,033


148 )

-

$ 1,965,730
 Non-controlling
interests
$ 10,641

-
-

(
1,776 )

75

(
1,701)

(
35)

$ 8,905

$ 4,968

-
-

(
1,079 )

71

(
1,008)

(
202 )

(
28)

$ 3,730
 Totalequity
Exchange
differences on
translating the
financial statements
of foreign
operations

( $ 20,350 )

-
-
-

4,860


4,860


-

($ 15,490)

( $ 10,592 )

-
-
-

2,019


2,019

-

-

($ 8,573)
Legal reserve
$ 281,889

20,088
-
-
-

-

-

$ 303,977

$ 303,977

26,506
-
-
-

-

-
-

$ 330,483
 Special reserve
$ 17,619

-

-

-

-


-


-

$ 17,619

$ 17,619

-

-

-

-


-

-

-

$ 17,619








































(
(





(
(



 (



(
(



(









(





(


(
(

(
(


(

(
(
(
(


(


(


(
(
 $ 1,974,757
-

190,000 )
94,002
12,259
106,261

35)
$ 1,890,983
$ 2,054,813
-

220,000 )
120,622
14,403
135,025

350 )

28)
$ 1,969,460

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

(With Deloitte & Touche auditors’ review report dated August 9, 2023)

  • 8 -

SYSCOM COMPUTER ENGINEERING CO. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30,2023 AND 2022

(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 (gain)

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
Write-downs of inventories (reversal of
write-downs of inventories)
A24100
Net loss 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 Six Months EndedJune 30 For the Six Months EndedJune 30 For the Six Months EndedJune 30
2023
$ 151,753
55,572
339
23

2,306 )
7,764

5,513 )
787

140 )
3,428
-

35,284 )

104 )
525,186
1,445

210,794 )

55,142 )

8,662 )
13,972

14,697 )

131,425 )

212,549 )
6,266

12,717)
77,202
5,532

7,639 )

28,914)
46,181		 2022

(
(
(
(
(
(
(
(
(
(
(
(
(
(
(
(
(
(
(
(
(
(
(
(
(
(
(
(
(
(
 $ 119,458
54,932
322

38 )

679 )
2,944

1,744 )

1,911 )
240
8,784

146 )

90,212 )

1,827 )
827,112

11,339 )

170,666 )

47,083 )

3,039 )
24,426
815

225,938 )

202,479 )
4,667

3,164)
283,435
1,766

2,628 )

29,255)
253,318

(Continued)

  • 9 -
Code
CASH FLOWS FROM INVESTING
ACTIVITIES
B00040
Acquisition 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
Increase in refundable deposits

B04500
Payments for intangible assets
B06000
Increase in lease receivables
BBBB
Net cash outflows from investing activities
CASH FLOWS FROM FINANCING
ACTIVITIES
C00100
Increase (decrease) in short-term borrowings
C03000
Increase (decrease) in guarantee deposits received
C04020
Repayment of the principal portion of lease
liabilities
C05400
Acquisition of interests in subsidiaries
CCCC
Net cash Inflows(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 Six Months EndedJune 30 For the Six Months EndedJune 30 For the Six Months EndedJune 30
2023
$ 20,635 )

4,500 )
26,308

28,054 )

12,792 )

586 )

91)

40,350)

9,796 )

3,132 )

24,301 )

350)

37,579)
419

31,329 )
600,941
$ 569,612		 2022

(
(
(

(
(
(
(
(
(
(
(
(

(

 (
(
(
(

(
(




 $ 4,045 )

707,950 )
666,312

11,549 )

8,644 )
-
-

65,876)
20,033
2,973

22,947 )
-
59
7,773
195,274
468,100
$ 663,374

The accompanying notes are an integral part of the consolidated financial statements. (With Deloitte & Touche auditors’ review report dated August 9, 2023)

(Concluded)

  • 10 -

SYSCOM COMPUTER ENGINEERING CO. AND SUBSIDIARIES Notes to Consolidated Financial Statements For the Six Months Ended June 30, 2023 and 2022

(Amounts in thousands of NTD, unless otherwise indicated)

1. 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 ".

  1. The Date and Procedures of Authorization of Financial Statements The consolidated financial statements were approved by the Board of Directors on August 9, 2023.

  2. Application of New, Amended and Revised Standards and Interpretations

  3. (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.

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

New/Revised/Amended Standards and Interpretations
Amendments to IFRS 10 and IAS 28 “Sale or Contribution
of Assets between an Investor and its Associate or Joint
Venture”
Amendments to IFRS 16 “Leases Liability in a Sale and
Leaseback”
IFRS 17 “Insurance contracts”
Amendment to IFRS 17
Amendment to IFRS 17 "Initial Application of IFRS 17 and
IFRS 9 - Comparative Information"
Amendment to IAS 1 "Classification of liabilities as
current or non-current"
Amendments to IAS 1 “Non-current Liabilities with
Covenants”
Amendments to IAS 7 and IFRS 7 “Supplier Finance
Arrangements”
Amendments to IAS 12 “International Tax Reform - Pillar
Two Model Rules”		 Effective Date Announced by
the IASB(Note 1)
To be determined by IASB
January 1, 2024 (Note 2)
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2024
January 1, 2024
January 1, 2024
Note 3

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.

Note 3: The requirement that the Group applies the exception and the requirement to disclose that fact is applied immediately upon issuance of the amendments and retrospectively in accordance with IAS 8. The remaining disclosure requirements

-11-

are applied for annual reporting periods beginning on or after January 1, 2023, but not for any interim period ending on or before December 31, 2023.

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.

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.

  1. 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.

  1. 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

-12-

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. 3. 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 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

7.

Cash and cash equivalents Cash and cash equivalents
June 30,
2023
Cash on hand

$ 710
Checking accounts and demand
deposits

239,850
Cash equivalents (investments
with original maturities of
less than 3 months)

Time deposits

75,772
Commercial papers


253,280

$ 569,612
Financial assets at fair value through profit or loss
June 30,
2023
Financial assets mandatorily
classified as at FVTPL
Non-derivative financial
assets
Fund beneficiary certificates
$ 454		 December 31,
2022
$ 707
297,539
71,704

230,991
$ 600,941
December 31,
2022
$ 19,956		 June 30,
2022


$ 572
308,573
73,918
280,311
$ 663,374
June 30,
2022

Financial assets mandatorily
classified as at FVTPL
Non-derivative financial
assets
Fund beneficiary certificates

$ 277,326

-13-

8. Financial assets at fair value through other comprehensive income

Investments in equity
instruments-non-current
Domestic investments
Listed shares
Unlisted shares		 June 30,
2023
$ 36,455
1,595
$ 38,050		 December 31,
2022
$ 24,142

1,595
$ 25,737		 June 30,
2022






$ 28,177
1,595
$ 29,772

These investments in equity instruments are not held for trading. Instead, they are held for medium to long-term strategic purposes. Accordingly, the management elected to designate these investments in equity instruments as at FVTOCI as they believe that recognizing short-term fluctuations in these investments’ fair value in profit or loss would not be consistent with the 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 medium to long-term strategic purpose. The company's common stocks will be available for trading on the Pioneer Stock Board of the Emerging Stock Market on November 26, 2021, and as regular Emerging Stock Market stocks starting February 15, 2022.

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
 June 30,
2023
$ 245,741
106,810
$ 352,551
$ 177,690
174,861
$ 352,551		 December 31,
2022
$ 231,060

100,856
$ 331,916
$ 202,721

129,195
$ 331,916		 June 30,
2022















$ 225,172
111,483
$ 336,655
$ 216,633
120,022
$ 336,655

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

10. Accounts receivable

Accounts receivable
At amortized cost

Accounts receivable

Less:Allowance for impairment
loss
 June 30,
2023

$ 966,414

1,509)
$ 964,905
 December 31,
2022

$ 1,490,655

1,483)
$ 1,489,172
 June 30,
2022


(

(

(
 $ 753,530
1,433)
$ 752,097

-14-

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 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. June 30, 2023

June 30, 2023
Less than
60 Days
61 to 90
Days
91 to120
Days
Gross carrying amount
$ 749,828 $ 54,905 $ 57,611
Loss allowance (Lifetime
ECL)

-

-

-

Amortized cost
$ 749,828
$ 54,905
$ 57,611

December 31, 2022
Less than
60 Days
61 to 90
Days
91 to120
Days
Gross carrying amount
$ 1,231,408 $ 157,786 $ 22,655
Loss allowance (Lifetime
ECL)

-

-

-

Amortized cost
$ 1,231,408
$ 157,786
$ 22,655

June 30, 2022
Less than
60 Days
61 to 90
Days
91 to120
Days
Gross carrying amount
$ 611,210
$ 73,217
$ 17,393

Loss allowance (Lifetime
ECL)

-

-

-

Amortized cost
$ 611,210
$ 73,217
$ 17,393

The movements of the loss allowance of accounts receivable we
For the Six Months
EndedJune 30,2023
Balance at January 1
$ 1,483
Impairment (Reversal) of loss
allowance
23
Foreign exchange gains and losses

3
Balance at June 30
$ 1,509		 Less than
60 Days		 61 to 90
Days		 91 to120
Days		 Over 120
Days		 Total


$ 749,828
-

$ 749,828

Less than
60 Days

$ 54,905
-

$ 54,905

61 to 90
Days

$ 57,611
-

$ 57,611

91 to120
Days
(
 $ 104,070

1,509)

$ 102,561

Over 120
Days
(
 $ 966,414

1,509)
$ 964,905
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

(

r		 $

$
e as


$ 1,483
23
3
$ 1,509
(

 $ 1,460

38 )
11
$ 1,433

-15-

11. Inventories

Inventories
Commodities
Prepayments for contracts
Inventories in transit
Maintenance materials
Total		 June 30,
2023
$ 346,292
260,696
54,619
725
$ 662,332		 December 31,
2022
$ 220,735
226,770
5,862

630
$ 453,997		 June 30,
2022






$ 197,060
168,546
94,212
1,259
$ 461,077

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 three months and six months ended June 30, 2023 and 2022 were $790,970 thousand, $678,697 thousand, $1,460,109 thousand and $1,395,503 thousand respectively. The cost of goods sold related to the inventories which included the write-down of inventories (reversal of write-down of inventories), totaling ($40) thousand, $515 thousand, ($140) thousand and $240 thousand, respectively. The reversals of previous write-downs resulted from the sale of these inventories.

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 (%)
June
30,2023
December
31,2022
June
30,2022

100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
97.50%
97.50%
97.50%
91.80%
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 (%)
June
30,2023
December
31,2022
June
30,2022

100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
97.50%
97.50%
97.50%
91.80%
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
June
30,2023
100.00%
100.00%
97.50%
91.80%
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、C
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%.

  • C. In June 2023, the Company acquired additional 15 thousand shares of Syscom Computer (Thailand) Co.,Ltd. from an unrelated party for $40 thousand; after the acquisition of further interests, the Company’s percentage of ownership in Syscom Computer (Thailand) Co.,Ltd. increased to 91.80%.

  • (2) Subsidiaries excluded from the consolidated financial statements: None. (3) Subsidiaries with material non-controlling interests: None.

-16-

13. 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.		 June 30,
2023
$ 13,375
54,056
$ 67,431
June 30,
2023
$ 13,375		 December 31,
2022
$ 15,486

54,032
$ 69,518
December 31,
2022
$ 15,486		 June 30,
2022




$ 11,987
53,382
$ 65,369
June 30,
2022
$ 11,987

As at the end of the reporting period, the		 proportions of ownership and voting rights in proportions of ownership and voting rights in
associates held by the Group were as follows:
June 30,
December 31,		 June 30,
Name of the company
2023		 2022 2022
DBMaker Japan Inc.
49.89%		 49.89% 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
June 30,
2023
December 31,
2022
June 30,
2022
Joint venture that is not
individually material
CloudMaster Co., Ltd.

$ 54,056

$ 54,032

$ 53,382
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:
June 30,
2023
December 31,
2022
June 30,
2022
CloudMaster Co., Ltd.
50.00%
50.00%
50.00%		 June 30,
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.

-17-

14. Property, plant and equipment

Property, plant and equipment
Assets used by the Group

Assets leased under operating
leases

Assets used by the Group
Land

Computer equipment

Buildings

Maintenance equipment

Leasehold improvements

Others

 June 30,
2023
$ 336,192

21,268
$ 357,460

June 30,
2023
$ 122,887
106,209
45,950
47,463
5,438
8,245
$ 336,192		 December 31,
2022

$ 333,516


23,812

$ 357,328

December 31,
2022
$ 122,714
112,492
46,804
35,641
6,850

9,015
$ 333,516		 June 30,
2022






$ 326,380
26,478
$ 352,858
June 30,
2022






$ 122,314
107,563
47,492
32,829
7,717
8,465
$ 326,380

(1) Assets used by the Group

Except for the recognition of depreciation expenses, the Group’s property, plant and equipment did not have significant addition, disposal and impairment for the six months ended June 30, 2023 and 2022.

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

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
 June 30,
2023
$ 21,268
 December 31,
2022

$ 23,812
 June 30,
2022


$ 26,478

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.

-18-

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

as follows:
Year 1
Year 2
Year 3
Year 4		 June 30,
2023
$ 17,143
16,897
8,325
-
$ 42,365		 December 31,
2022
$ 17,323
16,831
16,740

-
$ 50,894		 June 30,
2022






$ 17,661
17,029
16,830
8,325
$ 59,845

Except for the recognition of depreciation expenses, the Group’s Leased equipment did not have significant addition, disposal and impairment for the six months ended June 30, 2023 and 2022.

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

  1. Lease agreements (1) Right-of-use assets
se agreements
Right-of-use assets
Carrying amounts
Buildings
 June 30,
2023
$ 119,248
 December 31,
2022

$ 20,655
 June 30,
2022


$ 42,757
Addition of right-of-use assets
Depreciation charge for
right-of-use assets
Buildings
 For the Three Months Ended
June 30
2023
2022


$ 12,395
$ 11,057
 For the Three Months Ended
June 30
2023
2022


$ 12,395
$ 11,057
 For the Three Months Ended
June 30
2023
2022


$ 12,395
$ 11,057
 For the Six Months Ended
June 30		 For the Six Months Ended
June 30		 For the Six Months Ended
June 30		 For the Six Months Ended
June 30
2023
$ 12,395
 2023
$ 123,694

$ 24,819
 2022



$ 875
$ 21,989

Except for the aforementioned addition and recognized depreciation, the Group did not have significant sublease or impairment of right-of-use assets during the six months ended June 30, 2023 and 2022.

(2) Lease liabilities

Lease liabilities
Carrying amounts
Current

Non-current
 June 30,
2023
$ 48,693
$ 71,325		 December 31,
2022
$ 8,513
$ 12,426		 June 30,
2022



$ 27,777
$ 16,421

The ranges of discount rate for lease liabilities were 0.75%-7.28%, 0.75%-2.61% and 0.75%-2.61% per annum as of June 30, 2023, December 31, 2022 and June 30, 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.

-19-

(4) Other lease information

Lease-out arrangements under operating leases for freehold property, plant, and 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
June 30
2023
2022
$ 1,706
$ 1,270

$ 146
($ 435)

 For the Three Months Ended
June 30
2023
2022
$ 1,706
$ 1,270

$ 146
($ 435)

 For the Three Months Ended
June 30
2023
2022
$ 1,706
$ 1,270

$ 146
($ 435)

 For the Six Months Ended
June 30		 For the Six Months Ended
June 30		 For the Six Months Ended
June 30
2023
$ 1,706

$ 146
 2023
$ 3,332

$ 235

$ 30,004)
 2022


(

(

(		 $ 2,115
$ 183
$ 25,881)

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.

16. Intangible assets

ngible assets
Computer software

Goodwill

 June 30,
2023
$ 2,032
593
$ 2,625		 December 31,
2022
$ 1,817

593
$ 2,410		 June 30,
2022




$ 1,862
593
$ 2,455

Except for the recognition of amortization expenses, the Group’s intangible assets did not have significant addition, disposal and impairment for the six months ended June 30, 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
 June 30,
2023
$ 173,178		 December 31,
2022
$ 180,922		 June 30,
2022
$ 167,547

The range of weighted average effective interest rates on bank loans was 4.50%- 7.69%, 2.08%- 7.08% and 1.77%-5.16% per annum as of June 30,2023, December 31, 2022 and June 30,2022, respectively.

18. Other payables

Other payables
Payables for dividends

Payables for salaries or bonus

Payables for insurance

Payables for pension

Payable for compensation of
employees

Payables for value-added tax

Payables for annual leave

Others

 June 30,
2023
$ 220,031
90,980
29,050
20,427
14,327
7,132
748
16,994
$ 399,689		 December 31,
2022
$ -
288,394
18,507
14,858
9,600
26,275
2,414

32,249
$ 392,297		 June 30,
2022




$ 192,702
79,440
27,382
23,729
12,198
11,589
481
17,167
$ 364,688

-20-

19. Retirement benefits plans

For the three months and six months ended, June 30, 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:

valuation as of December 31, 2022 and 2021 were as follows:
For the Three Months Ended
June 30
For the Six Months Ended
June 30
2023
2022
2023
2022
Operating costs
$ 39
$ 52
$ 67
$ 89
Operating expenses

233

196

477

408
$ 272
$ 248
$ 544
$ 497
Equity
Share capital - ordinary shares
June 30,
2023
December 31,
2022
June 30,
2022
Number of authorized shares
(in thousands)

157,000

157,000

157,000
Amount of authorized shares $ 1,570,000
$ 1,570,000
$ 1,570,000
Number of issued and fully
paid shares (in thousands)
100,000

100,000

100,000
Amount of issued and fully
paid shares
$ 1,000,000
$ 1,000,000
$ 1,000,000		 For the Six Months Ended
June 30
2023

2022
$ 89
408
$ 497
June 30,
2022



157,000
1,570,000
100,000
1,000,000
$
$

20. Equity

  • (1) Share capital - ordinary shares

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

  • (2)

Capital surplus

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

(3) Retained earnings and dividend policy

The shareholders of the Company held their regular meeting on June 13, 2023 and in that meeting, resolved the amendments to the Company’s Articles of Incorporation. The amendments explicitly stipulate that the board of directors is authorized to adopt a special resolution to distribute dividends and bonuses in cash and a report of such distribution should be submitted in the shareholders’ meeting.

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

-21-

Company has no deficit and the legal reserve has exceeded 25% of the Company’s paid-in capital, the excess may be transferred to capital or distributed in cash.

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

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

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




$ 22,088
$ 190,000
$ 1.9

(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 June 30		 For the Six Months EndedJune 30 For the Six Months EndedJune 30 For the Six Months EndedJune 30
2023
$ 10,592 )
2,212
193)
$ 8,573)		 2022
(
(
(		 (
(
(		 $ 20,350 )
5,120
260)
$ 15,490)
  • B. Unrealized gain (loss) on financial assets at FVTOCI
Unrealized gain (loss) on financial assets at FVTOCI at FVTOCI at FVTOCI
Balance at January 1
Unrealized gain - equity
instruments
Balance at June 30		 For the Six Months EndedJune 30
2023
$ 14,339
12,313
$ 26,652		 2022




$ 13,429
7,324
$ 20,753

-22-

(6) Non-controlling interests

For the Six Months Ended June 30

Balance at January 1
Share in loss for the period
Other comprehensive income (loss)
during the period
Exchange difference on
translating the financial
statements of foreign
operations
Effective acquisition of partial
interest in a subsidiary by
the parent company (Note
12)
Cash dividends from
subsidiaries
Balance at June 30		 2023
$ 4,968

1,079 )
71

202 )
28)
$ 3,730		 2022

(
(
(
(
(
 $ 10,641

1,776 )
75
-
35)
$ 8,905

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
June 30
2023
2022
$ 1,057,569 $ 907,325
369,706
366,072

4,378

4,479

$ 1,431,653
$ 1,277,876
 For the Six Months Ended
June 30
2023
$ 1,057,569
369,706
4,378

$ 1,431,653
 2023
$ 1,961,260

708,499
8,815

$ 2,678,574
 2022











$ 1,849,564

636,122
9,083
$ 2,494,769

(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.

-23-

(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
 June 30,
2023
$ 964,905

$ 521,665

-

$ 521,665

$ 252,555
 December 31,
2022
$ 1,489,172

$ 486,381

-

$ 486,381

$ 238,583
 June 30,
2022












$ 752,097
$ 449,370
-
$ 449,370
$ 232,666

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.

  • (3) Revenue from contracts with customers For the Six Months Ended June 30, 2023
For the Six Months Ended June 30, 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
$ 1,847,596

695,079

8,757

$ 2,551,432
 Business
segments of the
entities controlled
bythe Company
$ 113,664

13,420

58

$ 127,142
 Total






$ 1,961,260
708,499
8,815
$ 2,678,574

For the Six Months Ended June 30, 2022

For the Six Months Ended June 30, 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
$ 1,715,473

623,844

8,929

$ 2,348,246
 Business
segments of the
entities controlled
bythe Company
$ 134,091

12,278

154

$ 146,523
 Total






$ 1,849,564
636,122
9,083
$ 2,494,769

-24-

22. Net profit

  • (1) Interest income
Interest income
Bank deposits

Other income
Government grants

Marketing incentive
income
Rental income
Others

 For the Three Months Ended
June 30
2023
2022
$ 3,008
$ 1,022

For the Three Months Ended
June 30
2023
2022
$ 434
$ 10,944

2,783
3,332
1,477
1,022
401

1,213

$ 5,095
$ 16,511
 For the Six Months Ended
June 30
2023
2022
$ 5,513
$ 1,744
For the Six Months Ended
June 30		 2022
2023
$ 434

2,783
1,477
401

$ 5,095
 2023
$ 434

4,679
2,953
1,001

$ 9,067
 2022








$ 29,432
4,466
2,749
3,409
$ 40,056

  • (2) Other income

  • (3) Other gains and losses

Other gains and losses
Net foreign exchange losses

Net gain on fair value
changes of financial assets
mandatorily classified as at
FVTPL
Others

 For the Three Months Ended
June 30
2023
2022
( $ 5,844 ) ( $ 6,457 )
1,164
320
(
83)
(
60)

($ 4,763)
($ 6,197)
 For the Six Months Ended
June 30
2023 (


(

(		 2023
$ 4,436 )

2,306

334)

$ 2,464)
 2022
(
(
(		 $ 5,844 )
1,164

83)
$ 4,763)		 (

(
(		 (

(
(		 $ 5,692 )

679
520)
$ 5,533)
  • (4) Finance costs
Finance costs
Interest on bank loans

Interest on lease liabilities
 For the Three Months Ended
June 30
2023
2022
$ 3,236 $ 1,439

683

239

$ 3,919
$ 1,678
 For the Six Months Ended
June 30
2023

2023
$ 6,371
1,393

$ 7,764
 2022


$ 3,236
683

$ 3,919

$ 2,422

522
$ 2,944
  • (5) Depreciation and amortization
Depreciation and amortization
An analysis of depreciation by
function
Operating costs

Operating expenses


An analysis of amortization by
function
Operating expenses
 For the Three Months Ended
June 30
2023
2022
$ 5,518 $ 5,144

21,938

22,424

$ 27,456
$ 27,568

$ 169
$ 162
 For the Six Months Ended
June 30
2023
$ 5,518
21,938

$ 27,456

$ 169
 2023
$ 10,966
44,606

$ 55,572

$ 339
 2022












$ 10,286
44,646
$ 54,932
$ 322

-25-

(6) Employee benefits expenses

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
June 30
2023
2022

$ 383,523 $ 360,668

35,407
33,465

12,622

11,704


431,552

405,837


15,597
14,416

272

248


15,869

14,664

$ 447,421
$ 420,501

$ 167,222 $ 163,356

280,199

257,145

$ 447,421
$ 420,501
 For the Six Months Ended
June 30
2023
$ 383,523

35,407
12,622

431,552


15,597
272

15,869

$ 447,421

$ 167,222
280,199

$ 447,421
 2023
$ 641,234

72,619
24,399

738,252


30,528
544

31,072

$ 769,324

$ 307,498
461,826

$ 769,324
 2022









































$ 617,984

69,314
23,789
711,087

28,632
497
29,129
$ 740,216
$ 302,024
438,192
$ 740,216

(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 $1,403 thousand, $1,028 thousand, $4,727 thousand and $3,748 thousand, both representing 3% of net profit before tax for the three and six months ended June 30, 2023 and 2022, respectively. The Company did not accrue remuneration of directors for the six months ended June 30, 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.

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.

-26-

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
June 30
2023
2022
$ 10,683 $ 8,420

2,926 ) (
2,023 )
334
(
159)

$ 8,091
$ 6,238
 For the Three Months Ended
June 30
2023
2022
$ 10,683 $ 8,420

2,926 ) (
2,023 )
334
(
159)

$ 8,091
$ 6,238
 For the Six Months Ended
June 30		 For the Six Months Ended
June 30		 For the Six Months Ended
June 30
2023
$ 10,683

2,926 )
334

$ 8,091
 2023
$ 31,358


2,926 )
2,699

$ 31,131
 2022

(
(
(
(
(

 $ 26,395

1,993 )
1,054
$ 25,456

  • (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

Shares
Weighted average number of
ordinary shares used in the
computation of basic earnings
per share
Effect of potentially dilutive
ordinary shares:
Employees’ compensation
Weighted average number of
ordinary shares used in the
computation of diluted earnings
per share



For the Three Months
EndedJune 30
2023
2022
$ 37,270
$ 27,007

$ 37,270
$ 27,007

For the Three Months
EndedJune 30		 For the Six Months Ended
June 30
2023
2022
$ 121,701
$ 95,778
$ 121,701
$ 95,778
(Thousand shares)
For the Six Months Ended
June 30
2023
2022

100,000
100,000

143

288

100,143

100,288



2023



2022 2023


100,000
69
100,000

146


100,146


100,000
143

100,143

100,069

-27-

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.

  • (2) Fair value of financial instruments measured at fair value on a recurring basis Fair value hierarchy June 30, 2023
Fair value hierarchy
June 30, 2023
Financial assets at FVTPL
Fund beneficial certificates

Financial assets at FVTOCI
Investments in equity instruments
at FVTOCI
Listed shares

Unlisted shares

Total

December 31, 2022
Financial assets at FVTPL
Fund beneficial certificates

Financial assets at FVTOCI
Investments in equity instruments
at FVTOCI
Listed shares

Unlisted shares

Total

June 30, 2022
Financial assets at FVTPL
Fund beneficial certificates


Financial assets at FVTOCI

Investments in equity instruments
at FVTOCI

Listed shares

Unlisted shares

Total
 Level 1
$ 454

$ 36,455
-

$ 36,455

Level 1
$ 19,956

$ 24,142
-

$ 24,142

Level 1
$ 277,326

$ 28,177
-

$ 28,177
 Level 2
$ -

$ -
-

$ -

Level 2
$ -

$ -
-

$ -

Level 2
$ -

$ -
-

$ -
 Level 3

$ -




$ -
1,595

$ 1,595

Level 3

$ -




$ -
1,595

$ 1,595

Level 3

$ -

$ -
1,595

$ 1,595
 Total
















$ 454
$ 36,455
1,595
$ 38,050
Total
















$ 19,956
$ 24,142
1,595
$ 25,737
Total
















$ 277,326
$ 28,177
1,595
$ 29,772

There were no transfers between Levels 1 and 2 for the six months ended June 30, 2023 and 2022.

-28-

(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)
 June 30,
2023
$ 454

1,894,333
38,050
1,842,496		 December 31,
2022
$ 19,956

2,430,681
25,737
1,989,268		 June 30,
2022
$ 277,326
1,778,117
29,772
1,629,815

  • 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, short-term bills payable, 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.

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 six months ended June 30, 2023 and 2022, there would be an increase of $3,533 thousand and $10,315 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

-29-

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		 June 30,
2023
$ 684,306


120,018


233,346

173,178		 December 31,
2022
$ 633,596

45,439
293,368
156,422		 June 30,
2022
$ 693,640
44,198
302,608
167,547

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 1 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 six months ended June 30, 2023 and 2022 would increase/decrease by $75 thousand and $169 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 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 June 30, 2023 and 2022, the Group had available unutilized short-term bank loan facilities set out in (b) below.

-30-

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. June 30, 2023

repayment dates.
June 30, 2023
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 $ - $ 1,668,104
 $ -
 $ - $ -
Lease liabilities 4,270 8,546 38,121
 72,463 -
Variable interest rate
liabilities 7,209 66,715 104,008 - -
Fixed interest rate liabilities - -
 -
 - -
$ 11,479 $ 1,743,365
 $ 142,129
 $ 72,463 $ -
Additional information about the maturity analysis for lease liabilities:
Less than 1year 1 to 5years 5 to 10years
Lease liabilities $ 50,937 $ 72,463
 $ -
December 31, 2022
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
 $ -
June 30, 2022
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
 $ -
 $ 1,461,544
$ -
 $ - $ -
Lease liabilities
 3,930 7,866 16,673
 16,865 -
Variable interest rate
liabilities
 36,132
 20,762 113,308
 - -
$
40,062
 $ 1,490,172
$ 129,981
 $ 16,865 $ -
Additional information about the maturity analysis for lease liabilities:
Less than 1year 1 to 5years 5 to 10years
Lease liabilities $ 28,469 $ 16,865
$ -

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.

-31-

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
June 30,
2023
$ -

$ 876,569

1,620,721

$ 2,497,290
 December 31,
2022
$ -

$ 610,515

1,685,614

$ 2,296,129
 June 30,
2022









$ 40,000
$ 520,653
1,860,135
$ 2,380,788

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

  • (2) Operating revenue (sales, maintenance and rental revenue)
Related PartyCategories
Associate

Joint ventures

 For the Three Months Ended
June 30

2023
2022
$ 8,810 $ 5,845

294

22

$ 9,104
$ 5,867
 For the Three Months Ended
June 30

2023
2022
$ 8,810 $ 5,845

294

22

$ 9,104
$ 5,867
 For the Three Months Ended
June 30

2023
2022
$ 8,810 $ 5,845

294

22

$ 9,104
$ 5,867
 For the Six Months Ended
June 30		 For the Six Months Ended
June 30		 For the Six Months Ended
June 30		 For the Six Months Ended
June 30
2023
$ 8,810
294

$ 9,104
 2023
$ 15,200
716

$ 15,916
 2022








$ 8,981
31
$ 9,012
  • (3) Operating costs (including sales, maintenance and rental)
Related PartyCategories
Associate

Joint ventures

 For the Three Months Ended
June 30

2023
2022
$ 2,797 $ -

-

129

$ 2,797
$ 129
 For the Three Months Ended
June 30

2023
2022
$ 2,797 $ -

-

129

$ 2,797
$ 129
 For the Three Months Ended
June 30

2023
2022
$ 2,797 $ -

-

129

$ 2,797
$ 129
 For the Six Months Ended
June 30		 For the Six Months Ended
June 30		 For the Six Months Ended
June 30		 For the Six Months Ended
June 30
2023
$ 2,797
-

$ 2,797
 2023
$ 2,797
4

$ 2,801
 2022








$ 4,761
136
$ 4,897

-32-

(4) Receivables from related parties (excluding loans to related parties)
Line Item
Related Party
Categories
June 30,
2023
December 31,
2022
Accounts
receivable
Associate

$ 2,842
$ 2,798
Joint ventures


12

72

$ 2,854
$ 2,870		 Receivables from related parties (excluding loans to related parties)
Line Item
Related Party
Categories
June 30,
2023
December 31,
2022
Accounts
receivable
Associate

$ 2,842
$ 2,798
Joint ventures


12

72

$ 2,854
$ 2,870		 Receivables from related parties (excluding loans to related parties)
Line Item
Related Party
Categories
June 30,
2023
December 31,
2022
Accounts
receivable
Associate

$ 2,842
$ 2,798
Joint ventures


12

72

$ 2,854
$ 2,870		 Receivables from related parties (excluding loans to related parties)
Line Item
Related Party
Categories
June 30,
2023
December 31,
2022
Accounts
receivable
Associate

$ 2,842
$ 2,798
Joint ventures


12

72

$ 2,854
$ 2,870		 Receivables from related parties (excluding loans to related parties)
Line Item
Related Party
Categories
June 30,
2023
December 31,
2022
Accounts
receivable
Associate

$ 2,842
$ 2,798
Joint ventures


12

72

$ 2,854
$ 2,870		 June 30,
2022
Accounts
receivable

 Associate

Joint ventures




$ 2,842
12
$ 2,854



$ 3,117
15
$ 3,132

The outstanding accounts receivable from related parties are unsecured. For the six months ended June 30, 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

 June 30,
2023
$ 1,592
4
6
$ 1,602		 December 31,
2022
$ 2,151
1,473

10
$ 3,634		 June 30,
2022






$ -
5
7
$ 12

The outstanding accounts payable from related parties are unsecured.

  • (6) Acquisitions of property, plant and equipment
(7) Related PartyCategories
Associate
Lease agreement
Name
Acquisition of right-of-use assets
Chuan Gao Investment Co., Ltd.
Furly Investment Co., Ltd.
Line Item
Name
Lease
liabilities
Chuan Gao Investment
Co., Ltd.
Furly Investment Co.,
Ltd.		 Related PartyCategories
Associate
Lease agreement
Name
Acquisition of right-of-use assets
Chuan Gao Investment Co., Ltd.
Furly Investment Co., Ltd.
Line Item
Name
Lease
liabilities
Chuan Gao Investment
Co., Ltd.
Furly Investment Co.,
Ltd.		 For the Six Months EndedJune 30 For the Six Months EndedJune 30 For the Six Months EndedJune 30 For the Six Months EndedJune 30 For the Six Months EndedJune 30 For the Six Months EndedJune 30
2023
2022
$ -
$ 304
For the Six Months EndedJune 30		 2022
2023


December 31,
2022		 2022
$ 68,488

51,843
$ 120,331
June 30,
2023
$ 62,422

43,427

$ 105,849
 $ -
-
-
June 30,
2022
$


Chuan Gao Investment
Co., Ltd.
Furly Investment Co.,
Ltd.



$ 5,758

-

$ 5,758
 $ 17,280
7,724
$ 25,004

-33-

Name
Finance costs
Chuan Gao Investment Co.,
Ltd.

Furly Investment Co., Ltd.

 For the Three Months Ended
June 30
2023
2022
$ 328 $ 70

235

34

$ 563
$ 104
 For the Three Months Ended
June 30
2023
2022
$ 328 $ 70

235

34

$ 563
$ 104
 For the Three Months Ended
June 30
2023
2022
$ 328 $ 70

235

34

$ 563
$ 104
 For the Six Months Ended
June 30		 For the Six Months Ended
June 30		 For the Six Months Ended
June 30
2023
$ 328

235

$ 563
 2023 2022






$ 687
492

$ 1,179

$ 161
82
$ 243

(8) Rental expenses

For the Three Months Ended For the Six Months Ended June 30 June 30

Line Item
Related Party
Categories/Name
Operating
expenses
Chuan Gao Investment
Co., Ltd.
Furly Investment Co., Ltd.
Substantive related party
Rental income
Line Item
Name
Other
income
CloudMaster Co., Ltd.
 Related Party
Categories/Name		 2023
2022
$ 1,006 $ 197

334
336

-

18
$ 1,340
$ 551
For the Three Months Ended
June 30		 2023 2022 2023
2022
$ 2,012 $ 394

669
673


-

36

$ 2,681
$ 1,103
For the Six Months Ended
June 30
2023
2022
$ 919
$ 794		 2023
2022
$ 2,012 $ 394

669
673


-

36

$ 2,681
$ 1,103
For the Six Months Ended
June 30
2023
2022
$ 919
$ 794		 2022
$ 197

336
18		 $ 394

673
36
$ 551 $ 1,103
2023
$ 441
 2022 2023
$ 919
 2022
Other
income
 $ 324
 $ 794

(9) Rental income

(10) Compensation of key management personnel

Short-term employee benefits
Post-employment benefits

 For the Three Months Ended
June 30
2023
2022
$ 74,151 $ 62,142

3,256

3,046

$ 77,407
$ 65,188
 For the Three Months Ended
June 30
2023
2022
$ 74,151 $ 62,142

3,256

3,046

$ 77,407
$ 65,188
 For the Three Months Ended
June 30
2023
2022
$ 74,151 $ 62,142

3,256

3,046

$ 77,407
$ 65,188
 For the Six Months Ended
June 30		 For the Six Months Ended
June 30		 For the Six Months Ended
June 30
2023
$ 74,151
3,256

$ 77,407
 2023

2022






$ 136,547
6,458
$ 143,005		 $ 118,020

5,914
$ 123,934

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

27. 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

 June 30,
2023
$ 245,741
-
$ 245,741		 December 31,
2022
$ 231,060

-
$ 231,060		 June 30,
2022




$ 225,172
74,273
$ 299,445

28. Significant Contingent Liabilities and Unrecognized Commitments

As of June 30, 2023, for the contracts with customers , the Group issued guarantee notes and had bank guarantee amounting to $108,214 thousand and $703,391 thousand, respectively.

-34-

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:

June 30, 2023

June 30, 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
June 30, 2022
Financial assets
Monetary items
USD
Non-monetary items
JPY
Financial liabilities
Monetary items
USD		 Foreign currency
$ 4,435
62,211
5,570
Foreign currency
$ 3,012
66,636
6,266
Foreign currency
$ 2,248
54,934
5,718		 Exchange rate
31.14
0.215
31.14
Exchange rate
30.71
0.2324
30.71
Exchange rate
29.72
0.2182
29.72		 Carryingamount
$ 138,106
13,375
173,439
Carryingamount
$ 92,484
15,486
192,435
Carryingamount
$ 66,803
11,987
169,950
The significant realized and unrealized foreign exchange gains (losses) were a
For the Three Months EndedJune 30
2023
2022
Foreign
currency
Exchange rate
Net
exchange
(loss) gain
Exchange rate
USD
30.705(USD: NTD)
$ 2,449 29.455 (USD: NTD)

USD
7.009(USD: RMB)
(
8,317 ) 6.611 (USD: RMB)
 The significant realized and unrealized foreign exchange gains (losses) were a
For the Three Months EndedJune 30
2023
2022
Foreign
currency
Exchange rate
Net
exchange
(loss) gain
Exchange rate
USD
30.705(USD: NTD)
$ 2,449 29.455 (USD: NTD)

USD
7.009(USD: RMB)
(
8,317 ) 6.611 (USD: RMB)
 The significant realized and unrealized foreign exchange gains (losses) were a
For the Three Months EndedJune 30
2023
2022
Foreign
currency
Exchange rate
Net
exchange
(loss) gain
Exchange rate
USD
30.705(USD: NTD)
$ 2,449 29.455 (USD: NTD)

USD
7.009(USD: RMB)
(
8,317 ) 6.611 (USD: RMB)
 The significant realized and unrealized foreign exchange gains (losses) were a
For the Three Months EndedJune 30
2023
2022
Foreign
currency
Exchange rate
Net
exchange
(loss) gain
Exchange rate
USD
30.705(USD: NTD)
$ 2,449 29.455 (USD: NTD)

USD
7.009(USD: RMB)
(
8,317 ) 6.611 (USD: RMB)
 s follows:
2023 Net
exchange
(loss) gain
$ 2,449
(
8,317 )		 2022
Exchange rate
30.705(USD: NTD)

7.009(USD: RMB)
 Exchange rate
29.455 (USD: NTD)

6.611 (USD: RMB)
 Net
exchange
(loss) gain
$ 1,179
(
7,334 )

-35-

For the Six Months Ended June 30

Foreign
currency
USD

USD
 2023 Net
exchange
(loss) gain
$ 1,996
(
6,457 )		 2022
Exchange rate
30.550(USD: NTD)

6.925(USD: RMB)
 Exchange rate
28.725 (USD: NTD)

6.481 (USD: RMB)
 Net
exchange
(loss) gain
$ 1,612
(
6,910 )

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).

-36-

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.

(1) Segment revenue and results

Reportable segment
Business segments of the
Company

Business segments of the
entities controlled by
the Company
Elimination of
inter-segment revenue
Total of reportable segments

Non-operating income and
expense
Net profit before tax		 Segment revenue
For the Six Months Ended
June 30
2023
2022
$ 2,553,828 $ 2,350,032

142,160
169,190


17,414)
(
24,453)

$ 2,678,574
$ 2,494,769

 Segment revenue
For the Six Months Ended
June 30
2023
2022
$ 2,553,828 $ 2,350,032

142,160
169,190


17,414)
(
24,453)

$ 2,678,574
$ 2,494,769

 Segmentprofit or loss Segmentprofit or loss
For the Six Months Ended
June 30
2023
$ 2,553,828
142,160

17,414)

$ 2,678,574
 2023 2022
$ 93,165
(
9,594 )

653

84,224

35,234
$ 119,458

(

(
 $ 151,539
(
3,870 )

519
148,188

3,565
$ 151,753

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
 June 30,
2023
$ 3,926,996

378,465

$ 4,305,461

$ 2,080,082

255,919

$ 2,336,001
 December 31,
2022
$ 4,025,953

408,987

$ 4,434,940

$ 2,097,252

282,875

$ 2,380,127
 June 30,
2022















$ 3,532,183
417,389
$ 3,949,572
$ 1,800,711
257,878
$ 2,058,589

-37-

SYSCOM COMPUTER ENGINEERING CO. AND SUBSIDIARIES Endorsements/Guarantees Provided For the Six Months Ended June 30, 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
$393,146
Same as above
Same as above
Same as above		 $ 339,426
( USD
10,900 )
61,502
( USD
1,975 )
85,000
15,000		 $ 286,488
( USD
9,200 )
42,818
( USD
1,375 )
85,000
15,000		 $ 156,051
( USD
5,011 )
17,183
( USD
552 )
-
-		 $ -
-
-
-		 14.57
2.18
4.32
0.76		 50% of the net
worth
$982,865
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 June 30, 2023.

-38-

SYSCOM COMPUTER ENGINEERING CO. AND SUBSIDIARIES Marketable Securities Held June 30, 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/units		 Carrying amount Percentage of
Ownership (%)		 Fair value
SYSCOM COMPUTER
ENGINEERING CO.
Coach Technology Management
Inc.		 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
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		 273
195
166
2
31		 $ 1,595
34,933
1,478
44

454		 9.09
1.00
-
-
-		 $ 1,595
34,933
1,478
44
454

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.

-39-

SYSCOM COMPUTER ENGINEERING CO. AND SUBSIDIARIES

Intercompany Relationships and Significant Intercompany Transactions and Subsidiary and Between Subsidiaries

For the Six Months Ended June 30, 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
The Company
The Company		 Netmaker Technology Co.
Netmaker Technology Co.
Netmaker Technology Co.
Netmaker Technology Co.
Wisemaker Technology Co.
Wisemaker Technology Co.
Wisemaker Technology Co.
Wisemaker TechnologyCo.		 1
1
1
1
1
1
1
1		 Prepayment for purchases
Maintenance revenue
Cost of goods sold
Maintenance costs
Other receivables
Accounts payable
Cost of goods sold
Maintenance costs		 $ 11,786
1,219
5,906
3,666
2,942
3,476
11,690
4,617		 General trading terms
General trading terms
General trading terms
General trading terms
General trading terms
General trading terms
General trading terms
General tradingterms		 -
-
-
-
-
-
-
-

Note: 1.Parent to subsidiary.

.

-40-

SYSCOM COMPUTER ENGINEERING CO. AND SUBSIDIARIES Information on Investees June 30, 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 ofJune 30,2023 As ofJune 30,2023 Net Income (Loss) of
the Investee(Note)		 Share of Profit (Loss) Note
June 30, 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
33,059
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
3,415
6,500
20		 97.50
100.00
100.00
86.60
99.04
49.89
91.80
50.00
0.54		 $ 5,242
99,027
(
77,930 )
39,247
51,488
13,375
3,030
54,056
18		 $ 934
(
1,103 )
(
8,359 )
(
28 )
(
4,058 )
(
2,012 )
(
49 )

434
(
49)		 $ 911
(
1,103 )
(
8,359 )
(
24 )
(
4.015 )
(
1,004 )
(
45 )

217
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 six months ended June 30,2023.

-41-

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

For the Six Months Ended June 30, 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
June 30,2023
Net Income (Loss) of
the Investee
% Ownership
of Direct or
Indirect
Investment		 Investment Gain
(Loss)		 Carrying Amount as
of
June 30, 2023
Accumulated
Repatriation of
Investment Income
as of June 30, 2023		 Note
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.
$ 140,130
( USD
4,500 )
71,622
( USD
2,300 )		 Note 1
Note 1		 $ ( USD
( USD		 129,854

4,170 )
47,271

1,518 )		 $ -
-		 $ -
-		 $ 129,854
( USD
4,170 )
47,271
( USD
1,518 )		 ( $ 6,406 )
(( USD 210))
(Note 2)
(
3,671 )
( (USD
120 ))
(Note 2)		 98.27%
74.38%		 ( $ 6,295 )
( (USD
206 ))
(Note 2)
(
2,731 )
( (USD 89))
(Note 2)		 ( $ 77,614 )
( (USD
2,492 ))
(Note 2)
(
5,352 )
( (USD
172 ))
(Note 2)		 $ -
-
Accumulated Outward Remittance for Investment
in Mainland China as of
June 30,2023		 Investment Amounts Authorized by Investment
Commission, MOEA		 Upper Limit on the Amount of Investment
Stipulated by Investment Commission, MOEA
(Note 3)
$ 177,124
(USD
5,688)		 $ 177,124
(USD
5,688) (Note 1(II))		 $ 1,179,438
13,583
(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 June 30, 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 = $1,965,730 × 60% = $1,179,438

Note 4: The foreign currency amounts of original investment amount and carrying value are expressed in New Taiwan dollars at exchange rate as of June 30, 2023. The foreign currency amount of net income is expressed in New Taiwan dollars at average exchange rate for the six months ended June 30, 2023.

-42-

SYSCOM COMPUTER ENGINEERING CO.

Information on major shareholders June 30, 2023

Table 6

Table 6
Name of major shareholder Shareholding
Number of shares held Shareholding
percentage
Jui-Fu Liu
Chi-Shan Liu
Su-Chen Yang		 18,346,787
7,598,911
7,256,001		 18.34%
7.59%
7.25%

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.

-43-

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