SYSCOM - Interim / Quarterly Report 2023

Stock Code: 2453

Syscom Computer Engineering Co. and Subsidiaries

Consolidated Financial Statements for the

Nine Months Ended September 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.

§ 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
11～12
(4) Summary of Significant Accounting Policies
12～13
(5) Critical Accounting Judgments and Key
Sources of Estimation and Uncertainty
13
(6) Explanation of Significant Accounts
13～33
(7) Related Parties Transactions
33~35
(8) Assets Pledged as Collateral
35
(9) Significant Contingent Liabilities and
Unrecognized Commitments
36
(10) Significant Disaster Loss
-
(11) Other Matters
-
(12) Significant Events after Reporting Period
-
(13) Significant Assets and Liabilities Denominated
in Foreign Currencies
36~37
(14) Separately Disclosed Items
A. Information about significant transactions
37、39～41
B. Information on investees
37、42
C. Information on investment in mainland
China
37～38、43
D. Information of major shareholders
38、44
(15) Segment Information
38 Notes to Financial
Statements

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

§ Table of Contents §
Item Page 1. Cover 1 2. Table of Contents 2 3. Independent Auditors’ Review Report 3`～`4 4. Consolidated Balance Sheets 5 5. Consolidated Statements of Comprehensive Income 6`～`7 6. Consolidated Statements of Changes in Equity 8 7. Consolidated Statements of Cash Flows 9`～`10 8. Notes to Consolidated Financial Statements (1) General 11 (2) The Date and Procedures of Authorization of Financial Statements 11 (3) Application of New and Revised Standards and Interpretations 11`～`12 (4) Summary of Significant Accounting Policies 12`～`13 (5) Critical Accounting Judgments and Key Sources of Estimation and Uncertainty 13 (6) Explanation of Significant Accounts 13`～`33 (7) Related Parties Transactions 33~35 (8) Assets Pledged as Collateral 35 (9) Significant Contingent Liabilities and Unrecognized Commitments 36 (10) Significant Disaster Loss - (11) Other Matters - (12) Significant Events after Reporting Period - (13) Significant Assets and Liabilities Denominated in Foreign Currencies 36~37 (14) Separately Disclosed Items A. Information about significant transactions 37`、`39`～`41 B. Information on investees 37`、`42 C. Information on investment in mainland China 37`～`38`、`43 D. Information of major shareholders 38`、`44 (15) Segment Information 38	Notes to Financial Statements
	- - - - - - - 1 2 3 4 5 6-25 26 27 28 - - - 29 30 30 30 30 31

INDEPENDENT AUDITORS’ REVIEW REPORT

The Board of Directors and Shareholders Syscom Computer Engineering Company

Introduction

We have reviewed the accompanying consolidated balance sheets of Syscom Computer Engineering Company and its subsidiaries (collectively, the “Group”) as of September 30, 2023 and 2022, the related consolidated statements of comprehensive income for the three months ended September 30, 2023 and 2022 and for the nine months ended September 30,2023 and 2022, the consolidated statements of changes in equity and cash flows for the nine 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 September 30, 2023 and 2022, combined total assets of these non-significant subsidiaries were NT$388,850 thousand and NT$418,662 thousand, respectively, representing 8% and 10%, respectively, of the consolidated total assets, and combined total liabilities of these subsidiaries were NT$274,201 thousand and NT$267,897 thousand, respectively, representing 10% and 12%, respectively, of the consolidated total liabilities; for the three months ended September 30, 2023 and 2022 and for the nine months ended September 30,2023 and 2022, the amounts of combined total comprehensive loss of these subsidiaries were NT$13,591 thousand, NT$27,479 thousand, NT$38,943 thousand and NT$64,512 thousand, respectively, representing (22%), (51%), (20%) and (40%), respectively, of the consolidated total comprehensive income. As disclosed in Note 13 to the consolidated financial statements, as of September 30, 2023 and 2022, investments accounted for using the equity method were NT$66,013 thousand and NT$66,861 thousand, respectively, and for the three months ended September 30, 2023 and 2022 and for the nine months ended September 30, 2023 and 2022, the comprehensive income(loss) of these equity-method investments were NT$(1,560) thousand, NT$1,394 thousand, NT$(2,347) thousand and NT$3,305 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 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 September 30, 2023 and 2022, its consolidated financial performance for the three months ended September 30, 2023 and 2022, and of its consolidated financial performance and its consolidated cash flows for the nine months ended September 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 Li-Wen, Kuo and Pei-De Chen.

Deloitte & Touche Taipei, Taiwan Republic of China

November 13, 2023

Notice to Readers

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

For the convenience of readers, the independent auditors’ review report and the accompanying consolidated financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language independent auditors’ review report and consolidated financial statements shall prevail.

SYSCOM COMPUTER ENGINEERING CO. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

SEPTEMBER 30, 2023, DECEMBER 31, 2022 AND SEPTEMBER 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 2110 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) Short-term bills payable (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		September 30,2023 Amount `％` $ 801,218 17 10,206 - 182,839 4 565,327 12 8,105 - 968,442 20 15,586 - 678 - 811,214 17 515,252 11 97,963 2 3,976,830 83 31,612 1 183,120 4 66,013 1 354,972 8 107,410 2 2,497 - 9,659 - 60,280 1 815,563 17 $ 4,792,393 100 $ 262,074 5 49,961 1 512,958 11 737 - 1,468,516 31 262,879 6 4,002 - 47,077 1 23,121 - 2,631,325 55 10,044 - 60,919 1 41,565 1 17,963 1 130,491 3 2,761,816 58 1,000,000 21 1,275 - 330,483 7 17,619 - 666,258 14 1,014,360 21 11,842 - 2,027,477 42 3,100 - 2,030,577 42 $ 4,792,393 100		(In Thousands of New Taiwan Dollars) December 31,2022 September 30,2022 Amount `％` Amount `％` $ 600,941 13 $ 502,117 12 19,956 - 20,662 1 202,721 5 209,280 5 486,381 11 601,118 15 2,598 - 8,466 - 1,489,172 34 1,004,499 24 6,054 - 3,765 - 265 - 269 - 453,997 10 592,905 14 383,124 9 398,937 10 119,540 3 113,875 3 3,764,749 85 3,455,893 84 25,737 1 22,913 - 129,195 3 129,502 3 69,518 2 66,861 2 357,328 8 356,113 9 20,655 - 31,839 1 2,410 - 2,312 - 13,665 - 17,437 - 51,683 1 53,201 1 670,191 15 680,178 16 $ 4,434,940 100 $ 4,136,071 100 $ 180,922 4 $ 183,662 4 - - - - 238,583 6 268,373 7 16,026 - 589 - 1,400,023 32 1,325,729 32 392,297 9 248,718 6 33,097 1 11,054 - 8,513 - 18,328 - 14,796 - 19,341 1 2,284,257 52 2,075,794 50 11,130 - 10,979 - 12,426 - 14,525 - 54,658 1 73,236 2 17,656 1 17,171 1 95,870 2 115,911 3 2,380,127 54 2,191,705 53 1,000,000 22 1,000,000 24 1,547 - 1,547 - 303,977 7 303,977 7 17,619 1 17,619 1 722,955 16 611,409 15 1,044,551 24 933,005 23 3,747 - 2,332 - 2,049,845 46 1,936,884 47 4,968 - 7,482 - 2,054,813 46 1,944,366 47 $ 4,434,940 100 $ 4,136,071 100	(In Thousands of New Taiwan Dollars) December 31,2022 September 30,2022 Amount `％` Amount `％` $ 600,941 13 $ 502,117 12 19,956 - 20,662 1 202,721 5 209,280 5 486,381 11 601,118 15 2,598 - 8,466 - 1,489,172 34 1,004,499 24 6,054 - 3,765 - 265 - 269 - 453,997 10 592,905 14 383,124 9 398,937 10 119,540 3 113,875 3 3,764,749 85 3,455,893 84 25,737 1 22,913 - 129,195 3 129,502 3 69,518 2 66,861 2 357,328 8 356,113 9 20,655 - 31,839 1 2,410 - 2,312 - 13,665 - 17,437 - 51,683 1 53,201 1 670,191 15 680,178 16 $ 4,434,940 100 $ 4,136,071 100 $ 180,922 4 $ 183,662 4 - - - - 238,583 6 268,373 7 16,026 - 589 - 1,400,023 32 1,325,729 32 392,297 9 248,718 6 33,097 1 11,054 - 8,513 - 18,328 - 14,796 - 19,341 1 2,284,257 52 2,075,794 50 11,130 - 10,979 - 12,426 - 14,525 - 54,658 1 73,236 2 17,656 1 17,171 1 95,870 2 115,911 3 2,380,127 54 2,191,705 53 1,000,000 22 1,000,000 24 1,547 - 1,547 - 303,977 7 303,977 7 17,619 1 17,619 1 722,955 16 611,409 15 1,044,551 24 933,005 23 3,747 - 2,332 - 2,049,845 46 1,936,884 47 4,968 - 7,482 - 2,054,813 46 1,944,366 47 $ 4,434,940 100 $ 4,136,071 100	(In Thousands of New Taiwan Dollars) December 31,2022 September 30,2022 Amount `％` Amount `％` $ 600,941 13 $ 502,117 12 19,956 - 20,662 1 202,721 5 209,280 5 486,381 11 601,118 15 2,598 - 8,466 - 1,489,172 34 1,004,499 24 6,054 - 3,765 - 265 - 269 - 453,997 10 592,905 14 383,124 9 398,937 10 119,540 3 113,875 3 3,764,749 85 3,455,893 84 25,737 1 22,913 - 129,195 3 129,502 3 69,518 2 66,861 2 357,328 8 356,113 9 20,655 - 31,839 1 2,410 - 2,312 - 13,665 - 17,437 - 51,683 1 53,201 1 670,191 15 680,178 16 $ 4,434,940 100 $ 4,136,071 100 $ 180,922 4 $ 183,662 4 - - - - 238,583 6 268,373 7 16,026 - 589 - 1,400,023 32 1,325,729 32 392,297 9 248,718 6 33,097 1 11,054 - 8,513 - 18,328 - 14,796 - 19,341 1 2,284,257 52 2,075,794 50 11,130 - 10,979 - 12,426 - 14,525 - 54,658 1 73,236 2 17,656 1 17,171 1 95,870 2 115,911 3 2,380,127 54 2,191,705 53 1,000,000 22 1,000,000 24 1,547 - 1,547 - 303,977 7 303,977 7 17,619 1 17,619 1 722,955 16 611,409 15 1,044,551 24 933,005 23 3,747 - 2,332 - 2,049,845 46 1,936,884 47 4,968 - 7,482 - 2,054,813 46 1,944,366 47 $ 4,434,940 100 $ 4,136,071 100	(In Thousands of New Taiwan Dollars) December 31,2022 September 30,2022 Amount `％` Amount `％` $ 600,941 13 $ 502,117 12 19,956 - 20,662 1 202,721 5 209,280 5 486,381 11 601,118 15 2,598 - 8,466 - 1,489,172 34 1,004,499 24 6,054 - 3,765 - 265 - 269 - 453,997 10 592,905 14 383,124 9 398,937 10 119,540 3 113,875 3 3,764,749 85 3,455,893 84 25,737 1 22,913 - 129,195 3 129,502 3 69,518 2 66,861 2 357,328 8 356,113 9 20,655 - 31,839 1 2,410 - 2,312 - 13,665 - 17,437 - 51,683 1 53,201 1 670,191 15 680,178 16 $ 4,434,940 100 $ 4,136,071 100 $ 180,922 4 $ 183,662 4 - - - - 238,583 6 268,373 7 16,026 - 589 - 1,400,023 32 1,325,729 32 392,297 9 248,718 6 33,097 1 11,054 - 8,513 - 18,328 - 14,796 - 19,341 1 2,284,257 52 2,075,794 50 11,130 - 10,979 - 12,426 - 14,525 - 54,658 1 73,236 2 17,656 1 17,171 1 95,870 2 115,911 3 2,380,127 54 2,191,705 53 1,000,000 22 1,000,000 24 1,547 - 1,547 - 303,977 7 303,977 7 17,619 1 17,619 1 722,955 16 611,409 15 1,044,551 24 933,005 23 3,747 - 2,332 - 2,049,845 46 1,936,884 47 4,968 - 7,482 - 2,054,813 46 1,944,366 47 $ 4,434,940 100 $ 4,136,071 100
			Amount $ 801,218 10,206 182,839 565,327 8,105 968,442 15,586 678 811,214 515,252 97,963 3,976,830 31,612 183,120 66,013 354,972 107,410 2,497 9,659 60,280 815,563 $ 4,792,393 $ 262,074 49,961 512,958 737 1,468,516 262,879 4,002 47,077 23,121 2,631,325 10,044 60,919 41,565 17,963 130,491 2,761,816 1,000,000 1,275 330,483 17,619 666,258 1,014,360 11,842 2,027,477 3,100 2,030,577 $ 4,792,393		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 $ 502,117 20,662 209,280 601,118 8,466 1,004,499 3,765 269 592,905 398,937 113,875 3,455,893 22,913 129,502 66,861 356,113 31,839 2,312 17,437 53,201 680,178 $ 4,136,071 $ 183,662 - 268,373 589 1,325,729 248,718 11,054 18,328 19,341 2,075,794 10,979 14,525 73,236 17,171 115,911 2,191,705 1,000,000 1,547 303,977 17,619 611,409 933,005 2,332 1,936,884 7,482 1,944,366 $ 4,136,071	`％`
								12 1 5 15 - 24 - - 14 10 3 84 - 3 2 9 1 - - 1 16 100 4 - 7 - 32 6 - - 1 50 - - 2 1 3 53 24 - 7 1 15 23 - 47 - 47 100

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

(With Deloitte & Touche auditors’ review report dated November 13, 2023)

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	Ended September	Ended September	30		For the Nine	Months	Ended September	Ended September	30
			2023			2022			2023			2022
Code			Amount	`％`		Amount	`％`		Amount	`％`		Amount	`％`
	OPERATING REVENUE
	(Notes 21 and 26)
4100	Sales		$ 1,200,131	77		$ 1,153,905	77		$ 3,161,391	75		$ 3,003,469	75
4600	Maintenance revenue		361,353	23		334,248	23		1,069,852	25		970,370	24
4300	Rental revenue		4,610	-		4,488	-		13,425	-		13,571	1
4000	Total operating revenue		1,566,094	100		1,492,641	100		4,244,668	100		3,987,410	100
	OPERATING COSTS (Notes
	11, 19, 22, and 26)
5110	Cost of goods sold		886,068	56		873,684	59		2,346,177	55		2,269,187	57
5600	Maintenance costs		260,140	17		224,125	15		749,098	18		685,371	17
5300	Rental costs		3,396	-		4,205	-		10,759	-		11,285	-
5000	Total operating costs		1,149,604	73		1,102,014	74		3,106,034	73		2,965,843	74
5900	GROSS PROFIT		416,490	27		390,627	26		1,138,634	27		1,021,567	26
	OPERATING EXPENSES
	(Notes 10, 19, 22, and 26)
6100	Selling and marketing
	expenses		302,810	19		274,963	18		767,796	18		698,363	17
6300	Research and development
	expenses		69,055	5		59,766	4		178,002	4		183,120	5
6450	Expected credit loss
	(reversal of credit loss)on
	trade receivables	(	104)	-	(	10)	-	(	81)	-	(	48)	-
6000	Total operating expenses		371,761	24		334,719	22		945,717	22		881,435	22
6900	PROFIT FROM OPERATIONS		44,729	3		55,908	4		192,917	5		140,132	4
	NON-OPERATING INCOME
	AND EXPENSES
7100	Interest income (Note 22)		1,777	-		991	-		7,290	-		2,735	-
7010	Other income (Notes 22 and
	26)		27,950	2		17,940	1		37,017	1		57,996	1
7020	Other gains and losses (Note
	22)		5,585	-	(	6,538 )	-		3,121	-	(	12,071 )	-
7050	Finance costs (Notes 22 and
	26)	(	4,300 )	-	(	2,132 )	-	(	12,064 )	-	(	5,076 )	-
7060	Share of profit or loss of
	associates and joint
	ventures (Note 13)	(	1,560)	-		1,394	-	(	2,347)	-		3,305	-
7000	Total non-operating
	income and expenses		29,452	2		11,655	1		33,017	1		46,889	1
7900	PROFIT BEFORE INCOME
	TAX		74,181	5		67,563	5		225,934	6		187,021	5
7950	INCOME TAX EXPENSE
	(Notes 4 and 23)		6,431	1		11,255	1		37,562	1		36,711	1
8200	NET PROFIT		67,750	4		56,308	4		188,372	5		150,310	4
												(Continued)

For the Three Months Ended September 30 2023 2022 Amount `％` Amount `％` ( $ 6,438 ) - ( $ 9,238 ) ( 1 ) 45 - 6,292 - 12 - 21 - ( 6,381) - ( 2,925) - $ 61,369 4 $ 53,383 4 $ 68,018 4 $ 57,737 4 ( 358) - ( 1,429) - $ 67,750 4 $ 56,308 4 $ 61,871 4 $ 54,806 4 ( 502) - ( 1,423) - $ 61,369 4 $ 53,383 4 $ 0.68 $ 0.58 $ 0.67 $ 0.58	For the Three Months Ended September 30 2023 2022 Amount `％` Amount `％` ( $ 6,438 ) - ( $ 9,238 ) ( 1 ) 45 - 6,292 - 12 - 21 - ( 6,381) - ( 2,925) - $ 61,369 4 $ 53,383 4 $ 68,018 4 $ 57,737 4 ( 358) - ( 1,429) - $ 67,750 4 $ 56,308 4 $ 61,871 4 $ 54,806 4 ( 502) - ( 1,423) - $ 61,369 4 $ 53,383 4 $ 0.68 $ 0.58 $ 0.67 $ 0.58	For the Three Months Ended September 30 2023 2022 Amount `％` Amount `％` ( $ 6,438 ) - ( $ 9,238 ) ( 1 ) 45 - 6,292 - 12 - 21 - ( 6,381) - ( 2,925) - $ 61,369 4 $ 53,383 4 $ 68,018 4 $ 57,737 4 ( 358) - ( 1,429) - $ 67,750 4 $ 56,308 4 $ 61,871 4 $ 54,806 4 ( 502) - ( 1,423) - $ 61,369 4 $ 53,383 4 $ 0.68 $ 0.58 $ 0.67 $ 0.58		For the Nine Months	For the Nine Months	Ended September 30	Ended September 30
2023	`％` - - - - 4 4 - 4 4 - 4	2022		2023	`％` - - - - 5 5 - 5 5 - 5	2022
Amount ( $ 6,438 ) 45 12 ( 6,381) $ 61,369 $ 68,018 ( 358) $ 67,750 $ 61,871 ( 502) $ 61,369 $ 0.68 $ 0.67		Amount ( $ 9,238 ) 6,292 21 ( 2,925) $ 53,383 $ 57,737 ( 1,429) $ 56,308 $ 54,806 ( 1,423) $ 53,383 $ 0.58 $ 0.58		Amount $ 5,875 2,328 181) 8,022 $ 196,394 $ 189,809 1,437) $ 188,372 $ 197,904 1,510) $ 196,394 $ 1.90 $ 1.89		Amount ( $ 1,914 ) 11,487 ( 239) 9,334 $ 159,644 $ 153,515 ( 3,205) $ 150,310 $ 162,768 ( 3,124) $ 159,644 $ 1.54 $ 1.53	`％`
			( ( (				- - - - 4 4 - 4 4 - 4

The accompanying notes are an integral part of the consolidated financial statements. (With Deloitte & Touche auditors’ review report dated November 13, 2023)

(Concluded)

SYSCOM COMPUTER ENGINEERING CO. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

FOR THE NINE MONTHS ENDED SEPTEMBER 30,2023 AND 2022

			Equity attributable to o	wners ofthe Company	( In Thousands of New Taiwan Dollars, except Dividend Per Share) Other equity Exchange differences on translating the financial statements of foreign operations Unrealized gain or loss on financial assets at fair value through other comprehensive income Total Non-controlling interests Totalequity ( $ 20,350 ) $ 13,429 $ 1,964,116 $ 10,641 $ 1,974,757 - - - - - - - ( 190,000 ) - ( 190,000 ) - - 153,515 ( 3,205 ) 150,310 11,167 ( 1,914) 9,253 81 9,334 11,167 ( 1,914) 162,768 ( 3,124) 159,644 - - - ( 35) ( 35) ($ 9,183) $ 11,515 $ 1,936,884 $ 7,482 $ 1,944,366 ( $ 10,592 ) $ 14,339 $ 2,049,845 $ 4,968 $ 2,054,813 - - - - - - - ( 220,000 ) - ( 220,000 ) - - 189,809 ( 1,437 ) 188,372 2,220 5,875 8,095 ( 73) 8,022 2,220 5,875 197,904 ( 1,510) 196,394 - - ( 272 ) ( 330 ) ( 602 ) - - - ( 28) ( 28) ($ 8,372) $ 20,214 $ 2,027,477 $ 3,100 $ 2,030,577	( In Thousands of New Taiwan Dollars, except Dividend Per Share) Other equity Exchange differences on translating the financial statements of foreign operations Unrealized gain or loss on financial assets at fair value through other comprehensive income Total Non-controlling interests Totalequity ( $ 20,350 ) $ 13,429 $ 1,964,116 $ 10,641 $ 1,974,757 - - - - - - - ( 190,000 ) - ( 190,000 ) - - 153,515 ( 3,205 ) 150,310 11,167 ( 1,914) 9,253 81 9,334 11,167 ( 1,914) 162,768 ( 3,124) 159,644 - - - ( 35) ( 35) ($ 9,183) $ 11,515 $ 1,936,884 $ 7,482 $ 1,944,366 ( $ 10,592 ) $ 14,339 $ 2,049,845 $ 4,968 $ 2,054,813 - - - - - - - ( 220,000 ) - ( 220,000 ) - - 189,809 ( 1,437 ) 188,372 2,220 5,875 8,095 ( 73) 8,022 2,220 5,875 197,904 ( 1,510) 196,394 - - ( 272 ) ( 330 ) ( 602 ) - - - ( 28) ( 28) ($ 8,372) $ 20,214 $ 2,027,477 $ 3,100 $ 2,030,577	( In Thousands of New Taiwan Dollars, except Dividend Per Share) Other equity Exchange differences on translating the financial statements of foreign operations Unrealized gain or loss on financial assets at fair value through other comprehensive income Total Non-controlling interests Totalequity ( $ 20,350 ) $ 13,429 $ 1,964,116 $ 10,641 $ 1,974,757 - - - - - - - ( 190,000 ) - ( 190,000 ) - - 153,515 ( 3,205 ) 150,310 11,167 ( 1,914) 9,253 81 9,334 11,167 ( 1,914) 162,768 ( 3,124) 159,644 - - - ( 35) ( 35) ($ 9,183) $ 11,515 $ 1,936,884 $ 7,482 $ 1,944,366 ( $ 10,592 ) $ 14,339 $ 2,049,845 $ 4,968 $ 2,054,813 - - - - - - - ( 220,000 ) - ( 220,000 ) - - 189,809 ( 1,437 ) 188,372 2,220 5,875 8,095 ( 73) 8,022 2,220 5,875 197,904 ( 1,510) 196,394 - - ( 272 ) ( 330 ) ( 602 ) - - - ( 28) ( 28) ($ 8,372) $ 20,214 $ 2,027,477 $ 3,100 $ 2,030,577	( In Thousands of New Taiwan Dollars, except Dividend Per Share) Other equity Exchange differences on translating the financial statements of foreign operations Unrealized gain or loss on financial assets at fair value through other comprehensive income Total Non-controlling interests Totalequity ( $ 20,350 ) $ 13,429 $ 1,964,116 $ 10,641 $ 1,974,757 - - - - - - - ( 190,000 ) - ( 190,000 ) - - 153,515 ( 3,205 ) 150,310 11,167 ( 1,914) 9,253 81 9,334 11,167 ( 1,914) 162,768 ( 3,124) 159,644 - - - ( 35) ( 35) ($ 9,183) $ 11,515 $ 1,936,884 $ 7,482 $ 1,944,366 ( $ 10,592 ) $ 14,339 $ 2,049,845 $ 4,968 $ 2,054,813 - - - - - - - ( 220,000 ) - ( 220,000 ) - - 189,809 ( 1,437 ) 188,372 2,220 5,875 8,095 ( 73) 8,022 2,220 5,875 197,904 ( 1,510) 196,394 - - ( 272 ) ( 330 ) ( 602 ) - - - ( 28) ( 28) ($ 8,372) $ 20,214 $ 2,027,477 $ 3,100 $ 2,030,577	( In Thousands of New Taiwan Dollars, except Dividend Per Share) Other equity Exchange differences on translating the financial statements of foreign operations Unrealized gain or loss on financial assets at fair value through other comprehensive income Total Non-controlling interests Totalequity ( $ 20,350 ) $ 13,429 $ 1,964,116 $ 10,641 $ 1,974,757 - - - - - - - ( 190,000 ) - ( 190,000 ) - - 153,515 ( 3,205 ) 150,310 11,167 ( 1,914) 9,253 81 9,334 11,167 ( 1,914) 162,768 ( 3,124) 159,644 - - - ( 35) ( 35) ($ 9,183) $ 11,515 $ 1,936,884 $ 7,482 $ 1,944,366 ( $ 10,592 ) $ 14,339 $ 2,049,845 $ 4,968 $ 2,054,813 - - - - - - - ( 220,000 ) - ( 220,000 ) - - 189,809 ( 1,437 ) 188,372 2,220 5,875 8,095 ( 73) 8,022 2,220 5,875 197,904 ( 1,510) 196,394 - - ( 272 ) ( 330 ) ( 602 ) - - - ( 28) ( 28) ($ 8,372) $ 20,214 $ 2,027,477 $ 3,100 $ 2,030,577
Share capital - ordinary shares $ 1,000,000 - - - - - - $ 1,000,000 $ 1,000,000 - - - - - - - $ 1,000,000	Capitalsurplus $ 1,547 - - - - - - $ 1,547 $ 1,547 - - - - - ( 272) - $ 1,275		Retained earnings	Unappropriated earnings $ 669,982 ( 22,088 ) ( 190,000 ) 153,515 - 153,515 - $ 611,409 $ 772,955 ( 26,506 ) ( 220,000 ) 189,809 - 189,809 - - $ 666,258	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 - - - - - - 11,167 ( 1,914) 11,167 ( 1,914) - - ($ 9,183) $ 11,515 ( $ 10,592 ) $ 14,339 - - - - - - 2,220 5,875 2,220 5,875 - - - - ($ 8,372) $ 20,214
					Exchange differences on translating the financial statements of foreign operations ( $ 20,350 ) - - - 11,167 11,167 - ($ 9,183) ( $ 10,592 ) - - - 2,220 2,220 - - ($ 8,372)
		Legal reserve $ 281,889 22,088 - - - - - $ 303,977 $ 303,977 26,506 - - - - - - $ 330,483	Special reserve $ 17,619 - - - - - - $ 17,619 $ 17,619 - - - - - - - $ 17,619
				( ( ( (	( ( ( (	( (	( ( (	( ( ( ( (	$ 1,974,757 - 190,000 ) 150,310 9,334 159,644 35) $ 1,944,366 $ 2,054,813 - 220,000 ) 188,372 8,022 196,394 602 ) 28) $ 2,030,577

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

(With Deloitte & Touche auditors’ review report dated November 13, 2023)

SYSCOM COMPUTER ENGINEERING CO. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 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 reversed A20400 Net gain on financial assets at fair value through profit or loss A20900 Finance costs A21200 Interest income A21300 Dividend income A22300 Share of profit or loss of associates and joint ventures accounted for using the equity method A22500 Loss(gain) on disposal of property, plant and equipment A23800 Write-downs of inventories (reversal of write-downs of inventories) A24100 Net loss(gain) on foreign currency exchange A29900 Lease modification gain A30000 Changes in operating assets and liabilities A31125 Contract assets A31130 Notes receivable A31150 Accounts receivable A31180 Other receivables A31200 Inventories A31230 Prepayments A31240 Other current assets A32125 Contract liabilities A32130 Notes payable A32150 Accounts payable A32180 Other payables A32230 Other current liabilities A32240 Net defined benefits liabilities A33000 Cash inflows from operations A33100 Interest received A33200 Dividends received A33300 Interest paid A33500 Income tax paid AAAA Net cash inflows from operating activities	For the Nine Months Ended September 30	For the Nine Months Ended September 30	For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2023 $ 225,934 83,025 508 81 ) 2,058 ) 12,064 7,290 ) 586 ) 2,347 6 142 ) 189 ) 163 ) 78,946 ) 5,507 ) 525,170 9,534 ) 364,531 ) 132,156 ) 689 274,375 15,289 ) 68,012 130,577 ) 8,325 13,093) 440,313 7,314 586 11,087 ) 64,251) 372,875		2022
	( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( (		( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( (	$ 187,021 83,065 481 48 ) 1,137 ) 5,076 2,735 ) 465 ) 3,305 ) 382 ) 27 17,269 323 ) 241,960 ) 5,426 ) 577,568 6,013 ) 302,460 ) 103,439 ) 6,579 ) 60,133 521 1,046 128,384 ) 2,843 4,259) 140,161 2,759 465 4,868 ) 57,703) 80,814

(Continued)

Code CASH FLOWS FROM INVESTING ACTIVITIES B00010 Acquisition of financial assets at fair value through other comprehensive income 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 B02800 Proceeds from disposal of property, plant and equipment B03800 Decrease (increase) in refundable deposits B04500 Payments for intangible assets B06000 Increase in lease receivables BBBB Net cash inflows (outflows) from investing activities CASH FLOWS FROM FINANCING ACTIVITIES C00100 Increase in short-term borrowings C00500 Proceeds from short-term bills payable C03000 Proceeds from guarantee deposits received C04020 Repayment of the principal portion of lease liabilities C04500 Dividends paid C05400 Acquisition of interests in subsidiaries C05800 Cash dividends distributed to noncontrolling interests CCCC Net cash outflows from financing activities DDDD EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH AND CASH EQUIVALENTS HELD IN FOREIGN CURRENCIES EEEE NET INCREASE 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 Nine Months Ended September 30	For the Nine Months Ended September 30	For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2023 $ - 34,043 ) 14,500 ) 26,308 34,822 ) 6 12,377 588 ) 86) 45,348) 72,682 49,917 307 36,819 ) 220,000 ) 602 ) 24) 134,539) 7,289 200,277 600,941 $ 801,218		2022
	( ( ( ( ( ( ( ( ( ( (		( ( ( ( ( ( ( ( (	$ 2,379 ) 6,172 ) 727,950 ) 943,434 30,322 ) 428 42,486 ) - - 134,553 25,660 - 3,441 34,378 ) 190,000 ) - 35) 195,312) 13,962 34,017 468,100 $ 502,117

The accompanying notes are an integral part of the consolidated financial statements. (With Deloitte & Touche auditors’ review report dated November 13, 2023)

(Concluded)

10 -

SYSCOM COMPUTER ENGINEERING CO. AND SUBSIDIARIES Notes to Consolidated Financial Statements

For the Nine Months Ended September 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 ".

The Date and Procedures of Authorization of Financial Statements

The consolidated financial statements were approved by the Board of Directors on November 13, 2023.

Application of New, Amended and Revised Standards and Interpretations (1) Application of 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 IFRSs endorsed and issued into effect by the FSC did not have a
- significant effect on the Group’s accounting policies.
(2) The IFRSs endorsed by the FSC for application starting from 2024

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

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

Note 2: A seller-lessee shall apply the Amendments to IFRS 16 retrospectively to sale and leaseback transactions entered into after the date of initial application of IFRS 16.

Note 3: The amendments provide some transition relief regarding disclosure requirements. As of the date the 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.

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

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

-11-

Effective Date Announced by the IASB (Note 1)(Note 1)Note 1)) January 1, 2023

New/ Revised /Amended Standards and Interpretations the IASB (Note 1)(Note 1)Note 1)) Amendments to IFRS 17 “Initial Application of IFRS 17 January 1, 2023 and IFRS 9 - Comparative Information” Amendments to IAS 21 “Lack of Exchangeability” January 1, 2025 (Note 2)

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

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

As of the date the 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.

-12-

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

(4) Other significant accounting policies

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

Defined benefits of retirement

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

2. Income tax expense

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

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

6. Cash and cash equivalents

6.	Cash and cash equivalents
7.	September 30, 2023 Cash on hand $ 799 Checking accounts and demand deposits 575,987 Cash equivalents (investments with original maturities of less than 3 months) Time deposits 131,610 Commercial papers 92,822 $ 801,218 Financial assets at fair value through profit or loss September 30, 2023 Financial assets mandatorily classified as at FVTPL Non-derivative financial assets Fund beneficiary certificates $ 10,206	December 31, 2022 $ 707 297,539 71,704 230,991 $ 600,941 December 31, 2022 $ 19,956	September 30, 2022
			$ 732 268,887 79,741 152,757 $ 502,117 September 30, 2022
	Financial assets mandatorily classified as at FVTPL Non-derivative financial assets Fund beneficiary certificates
				$ 20,662

-13-

8. Financial assets at fair value through other comprehensive income

Investments in equity instruments-non-current Domestic investments Listed shares Unlisted shares	September 30, 2023 $ 30,017 1,595 $ 31,612	December 31, 2022 $ 24,142 1,595 $ 25,737	September 30, 2022	September 30, 2022
				$ 21,318 1,595 $ 22,913

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. Since September 14, 2023, the company has obtained approval from the Taipei Exchange for the over-the-counter trading of its stocks on the securities market.

9. Financial assets at amortized cost

Financial assets at amortized cost
Pledged time deposits Time deposits with original maturities of more than 3 months Current Non-current Total	September 30, 2023 $ 258,876 107,083 $ 365,959 $ 182,839 183,120 $ 365,959	December 31, 2022 $ 231,060 100,856 $ 331,916 $ 202,721 129,195 $ 331,916	September 30, 2022
				$ 232,503 106,279 $ 338,782 $ 209,280 129,502 $ 338,782

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

10. Accounts receivable

Accounts receivable
At amortized cost Accounts receivable Less:Allowance for impairment loss		September 30, 2023 $ 969,849 1,407) $ 968,442		December 31, 2022 $ 1,490,655 1,483) $ 1,489,172		September 30, 2022
	(		(		(	$ 1,005,930 1,431) $ 1,004,499

-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. September 30, 2023

September 30, 2023
Less than 60 Days 61 to 90 Days 91 to120 Days Gross carrying amount $ 772,867 $ 47,893 $ 19,408 Loss allowance (Lifetime ECL) - - - Amortized cost $ 772,867 $ 47,893 $ 19,408 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 September 30, 2022 Less than 60 Days 61 to 90 Days 91 to120 Days Gross carrying amount $ 798,185 $ 89,861 $ 50,245 Loss allowance (Lifetime ECL) - - - Amortized cost $ 798,185 $ 89,861 $ 50,245 The movements of the loss allowance of accounts receivable we For the Nine Months Ended September 30,2023 Balance at January 1 $ 1,483 Reversal of loss allowance ( 81 ) Foreign exchange gains and losses 5 Balance at September 30 $ 1,407	Less than 60 Days	61 to 90 Days			91 to120 Days		Over 121 Days				Total
	$ 772,867 - $ 772,867 Less than 60 Days	$ 47,893 - $ 47,893 61 to 90 Days			$ 19,408 - $ 19,408 91 to120 Days	(	$ 129,681 1,407) $ 128,274 Over 121 Days			(	$ 969,849 1,407) $ 968,442 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 121 Days			(	$ 1,490,655 1,483) $ 1,489,172 Total
						( r	$
							$
							e as
			(	$ 1,483 81 ) 5 $ 1,407				(	$ 1,460 48 ) 19 $ 1,431

-15-

11. Inventories

Inventories
Commodities Prepayments for contracts Inventories in transit Maintenance materials Total	September 30, 2023 $ 357,783 355,601 96,712 1,118 $ 811,214	December 31, 2022 $ 220,735 226,770 5,862 630 $ 453,997	September 30, 2022
				$ 260,420 251,976 79,338 1,171 $ 592,905

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 nine months ended September 30, 2023 and 2022 were $886,068 thousand, $873,684 thousand, $2,346,177 thousand and $2,269,187 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 ($2) thousand, ($213) thousand, ($142) thousand and $27 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 (%) September 30,2023 December 31,2022 September 30,2022 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 97.50% 97.50% 97.50% 92.47% 91.40% 91.40% 99.24% 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 (%) September 30,2023 December 31,2022 September 30,2022 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 97.50% 97.50% 97.50% 92.47% 91.40% 91.40% 99.24% 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
			September 30,2023 100.00% 100.00% 97.50% 92.47% 99.24% 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 、 February and August 2023, the Company acquired additional 14 thousand shares of Wisemaker Technology Co. from an unrelated party for $494 thousand; after the acquisition of further interests, the Company’s percentage of ownership in Wisemaker Technology Co. increased to 99.24%.
C. In June and July 2023, the Company acquired additional 40 thousand shares of Syscom Computer (Thailand) Co.,Ltd. from an unrelated party for $108 thousand; after the acquisition of further interests, the Company’s percentage of ownership in Syscom Computer (Thailand) Co.,Ltd. increased to 92.47%.
(2) Subsidiaries excluded from the consolidated financial statements: None. (3) Subsidiaries with material non-controlling interests: None.

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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.	September 30, 2023 $ 11,710 54,303 $ 66,013 September 30, 2023 $ 11,710	December 31, 2022 $ 15,486 54,032 $ 69,518 December 31, 2022 $ 15,486	September 30, 2022	September 30, 2022
			$ 13,230 53,631 $ 66,861 September 30, 2022
				$ 13,230

As at the end of the reporting period, the proportions of ownership	As at the end of the reporting period, the proportions of ownership	and voting rights in
associates held by the Group were as follows:
September 30,	December 31,	September 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
Joint venture that is not individually material CloudMaster Co., Ltd.	September 30, 2023 $ 54,303	December 31, 2022 $ 54,032	September 30, 2022
				$ 53,631

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:

CloudMaster Co., Ltd.	September 30, 2023 50.00%	December 31, 2022 50.00%	September 30, 2022
			50.00%

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	September 30, 2023 $ 334,913 20,059 $ 357,972 September 30, 2023 $ 123,344 104,031 45,761 48,406 5,607 7,764 $ 334,913	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	September 30, 2022
			$ 330,991 25,122 $ 356,113 September 30, 2022
				$ 123,134 110,097 47,585 34,611 6,063 9,501 $ 330,991

(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 nine months ended September 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 September 30, 2023 Leased equipment $ 20,059	December 31, 2022 $ 23,812	September 30, 2022	September 30, 2022
			$ 25,122

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	September 30, 2023 $ 17,094 16,869 4,117 - $ 38,080	December 31, 2022 $ 17,323 16,831 16,740 - $ 50,894	September 30, 2022
				$ 17,500 16,910 16,831 4,117 $ 55,358

Except for the recognition of depreciation expenses, the Group’s Leased equipment did not have significant addition, disposal and impairment for the nine months ended September 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.

September 30, 2023 December 31, 2022 September 30, 2022 $ 107,410 $ 20,655 $ 31,839 For the Three Months Ended September 30 For the Nine Months Ended September 30 2023 2022 2023 2022 $ 130,106 $ 875 $ 12,500 $ 11,055 $ 37,319 $ 33,044	September 30, 2023 December 31, 2022 September 30, 2022 $ 107,410 $ 20,655 $ 31,839 For the Three Months Ended September 30 For the Nine Months Ended September 30 2023 2022 2023 2022 $ 130,106 $ 875 $ 12,500 $ 11,055 $ 37,319 $ 33,044	September 30, 2023 December 31, 2022 September 30, 2022 $ 107,410 $ 20,655 $ 31,839 For the Three Months Ended September 30 For the Nine Months Ended September 30 2023 2022 2023 2022 $ 130,106 $ 875 $ 12,500 $ 11,055 $ 37,319 $ 33,044

2023 $ 12,500	2023 $ 130,106 $ 37,319	2022
		$ 875 $ 33,044

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

(2) Lease liabilities

Lease liabilities
Carrying amounts Current Non-current	September 30, 2023 $ 47,077 $ 60,919	December 31, 2022 $ 8,513 $ 12,426	September 30, 2022
				$ 18,328 $ 14,525

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 September 30, 2023, December 31, 2022 and September 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 September 30 2023 2022 $ 2,121 $ 1,669 $ 199 $ 10	For the Three Months Ended September 30 2023 2022 $ 2,121 $ 1,669 $ 199 $ 10	For the Three Months Ended September 30 2023 2022 $ 2,121 $ 1,669 $ 199 $ 10		For the Nine Months Ended September 30	For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2023 $ 2,121 $ 199			2023 $ 5,453 $ 434 $ 49,260)		2022
				(		(	$ 3,784 $ 193 $ 42,931)

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.

Intangible assets

ngible assets
Computer software Goodwill	September 30, 2023 $ 1,904 593 $ 2,497	December 31, 2022 $ 1,817 593 $ 2,410	September 30, 2022
				$ 1,719 593 $ 2,312

Except for the recognition of amortization expenses, the Group’s intangible assets did not have significant addition, disposal and impairment for the nine months ended September 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

(1) Short-term borrowings

Loans Short-term borrowings
Unsecured borrowings Line of credit borrowings	September 30, 2023 $ 262,074		December 31, 2022 $ 180,922	September 30, 2022
					$ 183,662

The range of weighted average effective interest rates on bank loans was 1.82%- 9.13%, 2.08%- 7.08% and 1.92%-5.01% per annum as of September 30,2023, December 31, 2022 and September 30,2022, respectively.

(2) Short-term bills payable

Short-term bills payable
Commercial paper Less: Unamortized discounts on bills payable	September 30, 2023 $ 50,000 ( 39) $ 49,961	December 31, 2022 $ - - $ -	September 30, 2022
	(			$ - - $ -

-20-

Outstanding short-term bills payable were as follows: September 30, 2023

PromissoryInstitution Nominal Amount Commercial paper Dah Chung Bills Finance Corporation $ 50,000 Other payables Payables for salaries or bonus Payables for insurance Payables for pension Payables for value-added tax Payable for compensation of employees Payables for annual leave Others	Discount Amount CarryingAmount Interest Rate $ 39 $ 49,961 1.798% September 30, 2023 December 31, 2022 $ 168,086 $ 288,394 29,568 18,507 20,997 14,858 16,390 26,275 7,028 9,600 749 2,414 20,061 32,249 $ 262,879 $ 392,297	Interest Rate		StartingDate EndingDate 2023/09/26 2023/10/16 September 30, 2022 $ 171,103 27,535 19,685 12,809 5,865 485 11,236 $ 248,718	EndingDate

18. Other payables

19. Retirement benefits plans

For the three months and nine months ended, September 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:

For the Three Months Ended September 30 For the Nine Months Ended September 30 2023 2022 2023 2022 Operating costs $ 43 $ 53 $ 110 $ 142 Operating expenses 230 197 707 605 $ 273 $ 250 $ 817 $ 747 Equity Share capital - ordinary shares September 30, 2023 December 31, 2022 September 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 Nine Months Ended September 30	For the Nine Months Ended September 30	For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2023		2022 $ 142 605 $ 747 September 30, 2022	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.

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(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 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.

-22-

(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 September 30	For the Nine Months Ended September 30	For the Nine Months Ended September 30	For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2023 $ 10,592 ) 2,401 181) $ 8,372)		2022
	( ( (		( ( (	$ 20,350 ) 11,406 239) $ 9,183)

B. Unrealized gain (loss) on financial assets at FVTOCI

Unrealized gain (loss) on financial	assets at FVTOCI	assets at FVTOCI	assets at FVTOCI	assets at FVTOCI
Balance at January 1 Unrealized gain - equity instruments Balance at September 30	For the Nine Months Ended September 30
		2023 $ 14,339 5,875 $ 20,214		2022
			(	$ 13,429 1,914) $ 11,515

(6) Non-controlling interests

Non-controlling interests
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 September 30	For the Nine Months Ended September 30
		2023 $ 4,968 1,437 ) 73 ) 330 ) 28) $ 3,100		2022
	( ( ( (		( (	$ 10,641 3,205 ) 81 - 35) $ 7,482

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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 September 30 2023 2022 $ 1,200,131 $ 1,153,905 361,353 332,248 4,610 4,488 $ 1,566,094 $ 1,492,641		For the Nine Months Ended September 30
		2023 $ 1,200,131 361,353 4,610 $ 1,566,094		2023 $ 3,161,391 1,069,852 13,425 $ 4,244,668	2022
					$ 3,003,469 970,370 13,571 $ 3,987,410

(1) Contract information Revenue from contracts with customers

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

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

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

(2) Contract balances Accounts receivable (Note 10) Contract assets System integration services Less:Allowance for impairment loss Contract assets - current Contract liabilities System integration services		September 30, 2023 $ 968,442 $ 565,327 - $ 565,327 $ 512,958		December 31, 2022 $ 1,489,172 $ 486,381 - $ 486,381 $ 238,583		September 30, 2022
						$ 1,004,499 $ 601,118 - $ 601,118 $ 268,373

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.

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(3) Revenue from contracts with customers For the Nine Months Ended September 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 $ 2,968,074 1,048,991 13,367 $ 4,048,432	Business segments of the entities controlled bythe Company $ 175,317 20,861 58 $ 196,236		Total
				$ 3,161,391 1,069,852 13,425 $ 4,244,668

For the Nine Months Ended September 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 $ 2,805,481 953,385 13,416 $ 3,772,282	Business segments of the entities controlled bythe Company $ 197,988 16,985 155 $ 215,128		Total
				$ 3,003,469 970,370 13,571 $ 3,987,410

Net profit

For the Three Months Ended September 30 2023 2022 $ 1,777 $ 991 For the Three Months Ended September 30 2023 2022 $ 20,444 $ 11,058 4,128 2,932 1,747 1,634 1,631 2,316 $ 27,950 $ 17,940	For the Nine Months Ended September 30	For the Nine Months Ended September 30
	2023	2022

2023 $ 20,444 4,128 1,747 1,631 $ 27,950	2023	2022
	$ 20,878 8,807 4,700 2,632 $ 37,017	$ 40,490 7,398 4,383 5,725 $ 57,996

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(3) Other gains and losses

Other gains and losses
Net foreign exchange gain (loss) Net gain(loss) on fair value changes of financial assets mandatorily classified as at FVTPL Net gain(loss) on disposal of property, plant and equipment Others	For the Three Months Ended September 30				For the Nine Months Ended September 30
		2023		2022		2023 $ 1,436 2,058 6 ) 367) $ 3,121		2022
	( ( (	$ 5,872 248 ) 6 ) 33) $ 5,585	( ( (	$ 6,585 ) 458 382 793) $ 6,538)	( (		( ( (	$ 12,277 ) 1,137 382 1,313) $ 12,071)

(4) Finance costs Interest on bank loans Interest on lease liabilities	For the Three Months Ended September 30 2023 2022 $ 3,640 $ 1,943 660 189 $ 4,300 $ 2,132	For the Three Months Ended September 30 2023 2022 $ 3,640 $ 1,943 660 189 $ 4,300 $ 2,132	For the Three Months Ended September 30 2023 2022 $ 3,640 $ 1,943 660 189 $ 4,300 $ 2,132	For the Nine Months Ended September 30	For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2023 $ 3,640 660 $ 4,300			2023 $ 10,011 2,053 $ 12,064	2022
						$ 4,365 711 $ 5,076

(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 September 30 2023 2022 $ 5,422 $ 5,426 22,031 22,707 $ 27,453 $ 28,133 $ 169 $ 159		For the Nine Months Ended September 30
		2023 $ 5,422 22,031 $ 27,453 $ 169		2023 $ 16,388 66,637 $ 83,025 $ 508	2022
					$ 15,712 67,353 $ 83,065 $ 481

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(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 September 30 2023 2022 $ 411,453 $ 392,890 35,627 31,688 12,649 12,114 459,729 436,692 15,665 14,754 273 250 15,938 15,004 $ 475,667 $ 451,696 $ 166,792 $ 176,014 308,875 275,682 $ 475,667 $ 451,696		For the Nine Months Ended September 30
		2023 $ 411,453 35,627 12,649 459,729 15,665 273 15,938 $ 475,667 $ 166,792 308,875 $ 475,667		2023 $ 1,052,687 108,246 37,048 1,197,981 46,193 817 47,010 $ 1,244,991 $ 474,290 770,701 $ 1,244,991	2022
					$ 1,010,874 101,002 35,903
					1,147,779
					43,386 747
					44,133
					$ 1,191,912
					$ 478,038 713,874
					$ 1,191,912

(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 $2,301 thousand, $2,117 thousand, $7,028 thousand and $5,865 thousand, both representing 3% of net profit before tax for the three and nine months ended September 30, 2023 and 2022, respectively. The Company did not accrue remuneration of directors for the nine months ended September 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.

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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 Income tax on unappropriated earnings 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 September 30 2023 2022 $ 4,928 $ 10,801 5 - 1,277 - 221 454 $ 6,431 $ 11,255	For the Three Months Ended September 30 2023 2022 $ 4,928 $ 10,801 5 - 1,277 - 221 454 $ 6,431 $ 11,255		For the Nine Months Ended September 30	For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2023 $ 4,928 5 1,277 221 $ 6,431			2023 $ 36,286 5 1,649 ) 2,920 $ 37,562		2022
				(		(	$ 37,196 - 1,993 ) 1,508 $ 36,711

(2) Income tax assessments

The Company and subsidiaries’ income tax returns have been assessed by the tax authority are as follows:

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

24. Earnings per share

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

Net profit for the period

Net profit for the period
Earnings used in the computation of basic earnings per share Earnings used in the computation of diluted earnings per share	For the Three Months Ended September 30 2023 2022 $ 68,108 $ 57,737 $ 68,108 $ 57,737	For the Nine Months Ended September 30
	2023 $ 68,108 $ 68,108		2023 $ 189,809 $ 189,809	2022
				$ 153,515 $ 153,515

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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 Ended September 30		(Thousand shares) For the Nine Months Ended September 30 2023 2022 100,000 100,000 189 339 100,189 100,339
	2023 100,000 140 100,140	2022
		100,000 244
		100,244

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 September 30, 2023

Fair value hierarchy September 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	Level 1 $ 10,206 $ 30,017 - $ 30,017 Level 1 $ 19,956 $ 24,142 - $ 24,142	Level 2 $ - $ - - $ - Level 2 $ - $ - - $ -	Level 3 $ - $ - 1,595 $ 1,595 Level 3 $ - $ - 1,595 $ 1,595	Total
				$ 10,206 $ 30,017 1,595 $ 31,612 Total
				$ 19,956 $ 24,142 1,595 $ 25,737

-29-

September 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 $ 20,662 $ 21,318 - $ 21,318		Level 2 $ - $ - - $ -		Level 3 $ - $ - 1,595 $ 1,595		Total
								$ 20,662 $ 21,318 1,595 $ 22,913

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

(3) Categories of financial instruments

Financial assets Mandatorily classified as at FVTPL Financial assets at amortized cost (Note 1) Financial assets at FVTOCI Equity instruments Financial liabilities Financial liabilities at amortized cost (Note 2)	September 30, 2023 $ 10,206 2,159,310 31,612 2,044,167	December 31, 2022 $ 19,956 2,430,681 25,737 1,989,268	September 30, 2022
			$ 20,662 1,857,629 22,913 1,758,698

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, short-term bills payable 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.

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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 nine months ended September 30, 2023 and 2022, there would be an increase of $3,390 thousand and $12,009 thousand, respectively, in pre-tax profit associated with New Taiwan dollars strengthen 10% against USD. For a 10% weakening of New Taiwan dollars against USD, there would be an equal and opposite impact on pre-tax profit and the balances would be negative. The effect of exchange rate changes was mainly attributable to the exposure outstanding on USD cash, payables and borrowings, which were not hedged at the end of the reporting period.

b. Interest rate risk

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

follows:
Fair value interest rate risk - Financial assets - Financial liabilities Cash flow interest rate risk - Financial assets - Financial liabilities	September 30, 2023 $ 573,485 157,957 585,915 262,074	December 31, 2022 $ 633,596 45,439 293,368 156,422	September 30, 2022
			$ 575,063 54,353 261,565 162,162

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 nine months ended September 30, 2023 and 2022 would increase/decrease by $607 thousand and $186 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

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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 September 30, 2023 and 2022, the Group had available unutilized short-term bank loan facilities set out in (b) below.

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

September 30, 2023

		Payment on	Payment on
	demand or less
		than 1 month		1`～`3 months		3 months`～`1year			1`～`5years	More than 5years
Non-derivative financial
liabilities
Non-interest bearing	$		-	$	1,730,066	$	-	$	-	$	-
Lease liabilities			4,224		8,447		36,757		62,162		-
Variable interest rate
liabilities			71,338		83,127		113,127		-		-
Fixed interest rate
liabilities			50,000		-		-		-		-
	$		125,562	$	1,821,640	$	149,884	$	62,162	$	-
Additional information about the					maturity	analysis for lease liabilities:
			Less than		1year	1	to 5years		5 to 10years
Lease liabilities			$	49,428		$	62,162		$		-
December 31, 2022

	Payment on	Payment on
	demand or less
	than 1	month	1`～`3 months		3 months`～`1year			1`～`5years	More than 5years
Non-derivative financial
liabilities
Non-interest bearing	$	-	$	1,807,257	$	-	$	-	$	-
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		$		-

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September 30, 2022

	Payment on	Payment on
	demand or less
	than 1 month		1`～`3 months		3 months`～`1year			1`～`5years	More than 5years
Non-derivative financial
liabilities
Non-interest bearing	$	-	$	1,574,420	$	-	$	-	$	-
Lease liabilities		3,941		7,883		6,965		14,886		-
Variable interest rate
liabilities		38,757		974		125,611		-		-
Fixed interest rate
liabilities		21,530		-		-		-		-
	$	64,228	$	1,583,277	$	132,576	$	14,886	$	-
Additional information about the				maturity	analysis for lease liabilities:
		Less than		1year	1	to 5years		5 to 10years
Lease liabilities		$	18,789		$	14,886		$		-

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

b. Financing facilities

Financing facilities
Secured bank financing facilities Amount unused Unsecured bank financing facilities, reviewed annually and payable on demand: Amount used Amount unused	September 30, 2023 $ - $ 1,017,351 1,572,852 $ 2,590,203		December 31, 2022 $ - $ 610,515 1,685,614 $ 2,296,129	September 30, 2022 $ 40,000 $ 532,862 1,786,542 $ 2,319,404
					$ 40,000 $ 532,862 1,786,542 $ 2,319,404

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

oup and other related parties were disclosed below. Related-party and its relationship
Relatedparty Chuan Gao Investment Co., Ltd.( Chuan Gao Investment) Furly Investment Co., Ltd.( Furly Investment) Welida Investment Co., Ltd. DBMaker Japan Inc. CloudMaster Co., Ltd.	Relationship
	Substantive related party Substantive related party Substantive related party Associate Joint ventures

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

Related PartyCategories Associate Joint ventures	For the Three Months Ended September 30 2023 2022 $ 10,123 $ 4,731 142 9 $ 10,265 $ 4,740	For the Three Months Ended September 30 2023 2022 $ 10,123 $ 4,731 142 9 $ 10,265 $ 4,740	For the Three Months Ended September 30 2023 2022 $ 10,123 $ 4,731 142 9 $ 10,265 $ 4,740	For the Nine Months Ended September 30	For the Nine Months Ended September 30	For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2023 $ 10,123 142 $ 10,265			2023 $ 25,323 858 $ 26,181		2022
							$ 13,712 40 $ 13,752

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

Operating costs (including sales, maintenance and rental)	Operating costs (including sales, maintenance and rental)	Operating costs (including sales, maintenance and rental)
For the Three Months Ended September 30 For the Nine Months Ended September 30 Related PartyCategories 2023 2022 2023 2022 Associate $ - $ 2,723 $ 2,797 $ 7,484 Joint ventures - 2,506 4 2,642 $ - $ 5,229 $ 2,801 $ 10,126 Receivables from related parties (excluding loans to related parties) Line Item Related Party Categories September 30, 2023 December 31, 2022 September 30, 2022 Accounts receivable Associate $ 7,354 $ 2,798 $ 2,909 Joint ventures 142 72 - $ 7,496 $ 2,870 $ 2,909			For the Nine Months Ended September 30
				2023			2022
				$ 2,797 4	$ 7,484 2,642 $ 10,126 September 30, 2022
				$ 2,801
Accounts receivable	Associate Joint ventures	$ 7,354 142 $ 7,496				$ 2,909 - $ 2,909

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

The outstanding accounts receivable from related parties are unsecured. For the nine months ended September 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 Substantive related party Joint ventures	September 30, 2023 $ 1,601 - 5 $ 1,606	December 31, 2022 $ 2,151 10 1,473 $ 3,634	September 30, 2022	September 30, 2022
					$ - - 10 $ 10

The outstanding accounts payable from related parties are unsecured.

(6) Acquisitions of property, plant and equipment

For the Nine Months Ended September 30

Related PartyCategories 2023 2022 Associate $ - $ 3,821 Lease agreement For the Nine Months Ended September 30 Related PartyCategories/Name 2023 2022 Acquisition of right-of-use assets Substantive related party Chuan Gao Investment $ 68,488 $ - Furly Investment 51,843 - $ 120,331 $ -	Related PartyCategories 2023 2022 Associate $ - $ 3,821 Lease agreement For the Nine Months Ended September 30 Related PartyCategories/Name 2023 2022 Acquisition of right-of-use assets Substantive related party Chuan Gao Investment $ 68,488 $ - Furly Investment 51,843 - $ 120,331 $ -	2022
Associate Lease agreement Acquisition of right-of-use assets
	2023 $ 68,488 51,843 $ 120,331	2022
		$ - - $ -

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Line Item Name September 30, 2023 December 31, 2022 September 30, 2022 Lease liabilities Chuan Gao Investment $ 56,571 $ 5,758 $ 11,633 Furly Investment 39,186 - 3,869 $ 95,757 $ 5,758 $ 15,502 For the Three Months Ended September 30 For the Nine Months Ended September 30 Name 2023 2022 2023 2022 Finance costs Chuan Gao Investment $ 298 $ 49 $ 985 $ 210 Furly Investment 213 19 705 101 $ 511 $ 68 $ 1,690 $ 311	Line Item Name September 30, 2023 December 31, 2022 September 30, 2022 Lease liabilities Chuan Gao Investment $ 56,571 $ 5,758 $ 11,633 Furly Investment 39,186 - 3,869 $ 95,757 $ 5,758 $ 15,502 For the Three Months Ended September 30 For the Nine Months Ended September 30 Name 2023 2022 2023 2022 Finance costs Chuan Gao Investment $ 298 $ 49 $ 985 $ 210 Furly Investment 213 19 705 101 $ 511 $ 68 $ 1,690 $ 311	September 30, 2022	September 30, 2022	September 30, 2022
	2023 $ 985 705 $ 1,690			2022
				$ 210 101 $ 311

(8) Rental expenses

Name	For the Three Months Ended September 30 2023 2022 $ 1,349 $ 1,346 334 473 - 18 $ 1,683 $ 1,837	For the Three Months Ended September 30 2023 2022 $ 1,349 $ 1,346 334 473 - 18 $ 1,683 $ 1,837	For the Nine Months Ended September 30 2023 2022 $ 3,361 $ 1,740 1,003 1,146 - 54 $ 4,364 $ 2,940	For the Nine Months Ended September 30 2023 2022 $ 3,361 $ 1,740 1,003 1,146 - 54 $ 4,364 $ 2,940
	2023	2022	2023 $ 3,361 1,003 - $ 4,364	2022
Chuan Gao Investment Furly Investment Substantive related party	$ 1,349 334 - $ 1,683	$ 1,346 473 18		$ 1,740 1,146 54
		$ 1,837		$ 2,940

(9) Rental income

Line Item	For the Three Months Ended September 30	For the Three Months Ended September 30	For the Nine Months Ended September 30	For the Nine Months Ended September 30
	2023 $ 442	2022	2023 $ 1,361	2022
Other income		$ 367		$ 1,161

(10) Compensation of key management personnel

Short-term employee benefits Post-employment benefits	For the Three Months Ended September 30 2023 2022 $ 68,828 $ 64,699 3,264 3,170 $ 72,092 $ 67,869	For the Three Months Ended September 30 2023 2022 $ 68,828 $ 64,699 3,264 3,170 $ 72,092 $ 67,869	For the Three Months Ended September 30 2023 2022 $ 68,828 $ 64,699 3,264 3,170 $ 72,092 $ 67,869	For the Nine Months Ended September 30	For the Nine Months Ended September 30	For the Nine Months Ended September 30	For the Nine Months Ended September 30
		2023 $ 68,828 3,264 $ 72,092			2023		2022
					$ 205,375 9,722 $ 215,097		$ 182,719 9,084 $ 191,803

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	September 30, 2023 $ 258,876 - $ 258,876	December 31, 2022 $ 231,060 - $ 231,060	September 30, 2022
				$ 232,503 74,110 $ 306,613

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28. Significant Contingent Liabilities and Unrecognized Commitments

As of September 30, 2023, for the contracts with customers and the application for government grants, the Group issued guarantee notes and had bank guarantee amounting to $108,931 thousand and $705,277 thousand, respectively.

29. Significant Assets and Liabilities Denominated in Foreign Currencies

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

September 30, 2023

September 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 September 30, 2022 Financial assets Monetary items USD Non-monetary items JPY Financial liabilities Monetary items USD	Foreign currency $ 4,394 54,165 5,445 Foreign currency $ 3,012 66,636 6,266 Foreign currency $ 1,866 60,110 5,649	Exchange rate 32.27 0.2162 32.27 Exchange rate 30.71 0.2324 30.71 Exchange rate 31.75 0.2201 31.75	Carryingamount
			$ 141,800 11,710 175,695 Carryingamount
			$ 92,484 15,486 192,435 Carryingamount
			$ 59,250 13,230 179,343

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The significant realized and unrealized foreign exchange gains (losses) were as follows: For the Three Months Ended September 30

2023	2023	2022
		Exchange rate 30.4043 (USD: NTD) 6.8298 (USD: RMB) Ended September 30	Net exchange (loss) gain
			$ 2,354 ( 8,945 )
2023	Net exchange (loss) gain $ 6,723 ( 5,275 )	2022
Exchange rate 30.928(USD: NTD) 7.008(USD: RMB)		Exchange rate 29.285 (USD: NTD) 6.597 (USD: RMB)	Net exchange (loss) gain
			$ 3,966 ( 15,855 )

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.

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The highest balance, the end of period balance, the interest rate range, and total current period interest with respect to financing of funds.
Other transactions that have a material effect on the profit or loss for the year or on the financial position, such as the rendering or receipt of services.
(4) Information of major shareholders: list all shareholders with ownership of 5% or greater showing the name of the shareholder, the number of shares owned, and percentage of ownership of each shareholder(Table 6).

31. Segment Information

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

(1) Segment revenue and results

	Segment revenue For the Nine Months Ended September 30 2023 2022 $ 4,051,563 $ 3,774,738 222,895 251,241 29,790) ( 38,569) $ 4,244,668 $ 3,987,410	Segment revenue For the Nine Months Ended September 30 2023 2022 $ 4,051,563 $ 3,774,738 222,895 251,241 29,790) ( 38,569) $ 4,244,668 $ 3,987,410	Segmentprofit or loss	Segmentprofit or loss
			For the Nine Months Ended September 30
	2023 $ 4,051,563 222,895 29,790) $ 4,244,668		2023	2022 $ 153,825 ( 15,483 ) 1,790 140,132 46,889 $ 187,021
(		(	$ 199,834 ( 8,423 ) 1,506 192,917 33,017 $ 225,934

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		September 30, 2023 $ 4,402,950 389,443 $ 4,792,393 $ 2,487,615 274,201 $ 2,761,816		December 31, 2022 $ 4,025,953 408,987 $ 4,434,940 $ 2,097,252 282,875 $ 2,380,127		September 30, 2022
						$ 3,716,816 419,255 $ 4,136,071 $ 1,923,808 267,897 $ 2,191,705

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SYSCOM COMPUTER ENGINEERING CO. AND SUBSIDIARIES Endorsements/Guarantees Provided

For the Nine Months Ended September 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 $405,495 Same as above Same as above Same as above	$ 351,743 ( USD 10,900 ) 63,733 ( USD 1,975 ) 85,000 15,000	$ 329,154 ( USD 10,200 ) 42,758 ( USD 1,325 ) 85,000 15,000	$ 160,930 ( USD 4,987 ) 26,853 ( USD 832 ) 4,500 -	$ - - - -	16.23 2.11 4.19 0.74	50% of the net worth $1,013,739 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 September 30, 2023.

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SYSCOM COMPUTER ENGINEERING CO. AND SUBSIDIARIES Marketable Securities Held

September 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.	Beneficial certificates Yuanta Japan Leaders Equity Fund Stocks Engsound Technical Enterprise Co., Ltd. Turn Cloud Technology Service Inc. Shin Kong Financial Holding Co., Ltd. Dimension Computer Technology Co., Ltd. Beneficial certificates Fuh Hwa Money Market Fund	`－` `－` `－` `－` `－` `－`	Financial assets at fair value through profit or loss- current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through profit or loss - current	1,000 273 195 166 2 31	$ 9,750 1,595 28,432 1,540 45 456	- 9.09 0.90 - - -	$ 9,750 1,595 28,432 1,540 45 456

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

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SYSCOM COMPUTER ENGINEERING CO. AND SUBSIDIARIES

Intercompany Relationships and Significant Intercompany Transactions and Subsidiary and Between Subsidiaries For the Nine Months Ended September 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. Netmaker Technology Co. Wisemaker Technology Co. Wisemaker Technology Co. Wisemaker TechnologyCo.	1 1 1 1 1 1 1 1	Prepayment for purchases Sales revenue Maintenance revenue Cost of goods sold Maintenance costs Accounts payable Cost of goods sold Maintenance costs	$ 11,025 1,130 1,701 6,068 5,514 3,523 11,690 6,941	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.

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SYSCOM COMPUTER ENGINEERING CO. AND SUBSIDIARIES Information on Investees September 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 of September 30,2023	As of September 30,2023	As of September 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 42,191 JPY 53,260 THB 33,134 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 2,679 5 3,440 6,500 20	97.50 100.00 100.00 86.60 99.24 49.89 92.47 50.00 0.54	$ 4,662 101,009 ( 87,439 ) 39,719 54,243 11,710 2,998 54,303 17	$ 339 ( 2,631 ) ( 14,415 ) 517 ( 1,384 ) ( 5,609 ) ( 112 ) 903 ( 112)	$ 331 ( 2,631 ) ( 14,415 ) 448 ( 1,364 ) ( 2,798 ) ( 103 ) 451 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 nine months ended September 30,2023.

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

For the Nine Months Ended September 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 September 30,2023	Net Income (Loss) of the Investee	% Ownership of Direct or Indirect Investment	Investment Gain (Loss)	Carrying Amount as of September 30, 2023	Accumulated Repatriation of Investment Income as of September 30, 2023
						Outward	Inward
Syscom Computer (Shenzhen)Co., Ltd. Xian Linan Computer Co., Ltd.	Computer equipment software development, sales of self-developed technical achievements services, computer system integration and network wiring engineering. Development and manufacture of computer equipment and computer software; sale of self-manufactured products and provision of technical services.	$ 145,215 ( USD 4,500 ) 74,221 ( USD 2,300 )	Note 1 Note 1	$ ( USD ( USD	134,566 4,170 ) 48,986 1,518 )	$ - -	$ - -	$ 134,566 ( USD 4,170 ) 48,986 ( USD 1,518 )	( $ 12,000 ) (( USD 388)) (Note 2) ( 4,993 ) ( (USD 161 )) (Note 2)	98.27% 74.38%	( $ 11,792 ) ( (USD 381 )) (Note 2) ( 3,714 ) ( (USD 120)) (Note 2)	( $ 86,541 ) ( (USD 2,682 )) (Note 2) ( 6,582 ) ( (USD 204 )) (Note 2)	$ - -

Accumulated Outward Remittance for Investment in Mainland China as of September 30,2023		Investment Amounts Authorized by Investment Commission, MOEA			Upper Limit on the Amount of Investment Stipulated by Investment Commission, MOEA (Note 3)
$ 183,552 (USD 5,688)		$ 183,552 (USD 5,688) (Note 1(II))			$ 1,216,486
		14,076 (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 September 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 = $2,027,477 × 60% = $1,216,486

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

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SYSCOM COMPUTER ENGINEERING CO. Information on major shareholders September 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.

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SYSCOM — Interim / Quarterly Report 2023

52093_rns_2023-12-22_bbedb9ab-f4f0-4851-9742-d06faeee7475.pdf

§ Table of Contents §

INDEPENDENT AUDITORS’ REVIEW REPORT

Introduction

Scope of Review

Basis for Qualified Conclusion

Qualified Conclusion

Notice to Readers

SYSCOM COMPUTER ENGINEERING CO. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

SEPTEMBER 30, 2023, DECEMBER 31, 2022 AND SEPTEMBER 30, 2022

SYSCOM COMPUTER ENGINEERING CO. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

SYSCOM COMPUTER ENGINEERING CO. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

SYSCOM COMPUTER ENGINEERING CO. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30,2023 AND 2022

SYSCOM COMPUTER ENGINEERING CO. AND SUBSIDIARIES Notes to Consolidated Financial Statements

1. General

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

2. Income tax expense

6. Cash and cash equivalents

8. Financial assets at fair value through other comprehensive income

9. Financial assets at amortized cost

10. Accounts receivable

11. Inventories

12. Subsidiaries

13. Investments accounted for using the equity method

14. Property, plant and equipment

(4) Other lease information

17. Loans

18. Other payables

19. Retirement benefits plans

20. Equity

21. Revenue

(1) Contract information Revenue from contracts with customers

23. Income tax

(1) Income tax recognized in profit or loss

(2) Income tax assessments

24. Earnings per share

Net profit for the period

Shares

25. Financial instruments

(3) Categories of financial instruments

(4) Financial risk management objectives and policies

A. Market risk

Sensitivity analysis

The Group is mainly exposed to USD.

b. Interest rate risk

Sensitivity analysis

B. Credit risk

C. Liquidity risk

September 30, 2022

26. Related Party Transactions

27. Assets Pledged as Collateral

28. Significant Contingent Liabilities and Unrecognized Commitments

29. Significant Assets and Liabilities Denominated in Foreign Currencies

30. Separately Disclosed Items

31. Segment Information

SYSCOM COMPUTER ENGINEERING CO. AND SUBSIDIARIES Endorsements/Guarantees Provided

Table 1

SYSCOM COMPUTER ENGINEERING CO. AND SUBSIDIARIES Marketable Securities Held

Table 2

SYSCOM COMPUTER ENGINEERING CO. AND SUBSIDIARIES

Table 3

SYSCOM COMPUTER ENGINEERING CO. AND SUBSIDIARIES Information on Investees September 30, 2023

Table 4

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

Table 5

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SYSCOM Interim / Quarterly Report 2023