Getac : Quarterly Reports

GETAC HOLDINGS CORP. (FORMERLY

GETAC TECHNOLOGY CORP.) AND

SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND

INDEPENDENT AUDITORS' REPORT

DECEMBER 31, 2023 AND 2022

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For the convenience of readers and for information purpose only, the auditors' report and the accompanying financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. In the event of any discrepancy between the English version and the original Chinese version or any differences in the interpretation of the two versions, the Chinese-language auditors' report and financial statements shall prevail.

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GETAC HOLDINGS CORP. (FORMERLY GETAC TECHNOLOGY CORP.)

DECEMBER 31, 2023 AND 2022 CONSOLIDATED FINANCIAL STATEMENTS

AND INDEPENDENT AUDITORS' REPORT

TABLE OF CONTENTS

Contents

Page

1.	Cover Page		1
2.	Table of Contents	2	~ 3
3.	Declaration of Consolidated Financial Statements of Affiliated Enterprises		4
4.	Independent Auditors' Report	5 ~ 11
5.	Consolidated Balance Sheets	12	~ 13
6.	Consolidated Statements of Comprehensive Income		14
7.	Consolidated Statements of Changes in Equity		15
8.	Consolidated Statements of Cash Flows	16	~ 17
9.	Notes to the Consolidated Financial Statements	18 ~ 103
	(1)	HISTORY AND ORGANISATION		18
	(2)	THE DATE OF AUTHORISATION FOR ISSUANCE OF THE		18
		CONSOLIDATED FINANCIAL STATEMENTS AND
		PROCEDURES FOR AUTHORISATION
	(3)	APPLICATION OF NEW STANDARDS, AMENDMENTS AND	19	~ 20
		INTERPRETATIONS
	(4)	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	20	~ 43

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Contents

Page

(5)	CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND		43
	KEY SOURCES OF ASSUMPTION UNCERTAINTY
(6)	DETAILS OF SIGNIFICANT ACCOUNTS	44	~ 83
(7)	RELATED PARTY TRANSACTIONS	84	~ 89
(8)	PLEDGED ASSETS		89
(9)	SIGNIFICANT CONTINGENT LIABILITIES AND		89
	UNRECOGNISED CONTRACT COMMITMENTS
(10)	SIGNIFICANT DISASTER LOSS		90
(11)	SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE		90
(12)	OTHERS	90 ~ 100
(13)	SUPPLEMENTARY DISCLOSURES	100	~ 101
(14)	SEGMENT INFORMATION	101	~ 103

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Declaration of Consolidated Financial Statements of Affiliated Enterprises

In connection with the Consolidated Financial Statements of Affiliated Enterprises of Getac Holdings Corp. (the "Consolidated FS of the Affiliates"), we represent to you that, the entities required to be included in the Consolidated FS of the Affiliates as of and for the year ended December 31, 2023 in accordance with the "Criteria Governing Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises" are the same as those required to be included in the Consolidated Financial Statements of Getac Holdings Corp. and its subsidiaries (the "Consolidated FS of the Group") in accordance with International Financial Reporting Standard 10. Additionally, the information required to be disclosed in the Consolidated FS of Affiliates is disclosed in the Consolidated FS of the Group. Consequently, Getac Holdings Corp. does not prepare a separate set of Consolidated FS of Affiliates.

Very truly yours,

GETAC HOLDINGS CORP.

By

Hwang, Ming-Hang, Chairman

February 26, 2024

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INDEPENDENT AUDITORS' REPORT TRANSLATED FROM CHINESE

PWCR 23000459

To the Board of Directors and Stockholders of Getac Holdings Corp.

Opinion

We have audited the accompanying consolidated balance sheets of Getac Holdings Corp. (Formerly Getac Technology Corp.) and its subsidiaries (the "Group") as at December 31, 2023 and 2022, and the related consolidated statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of material accounting policies.

In our opinion, based on our audits and the report of other auditors, as described in the Other matter - Reference to audits of other auditors section of our report, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at December 31, 2023 and 2022, and its consolidated financial performance and its consolidated cash flows for the years then ended, in accordance with the "Regulations Governing the Preparation of Financial Reports by Securities Issuers" and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations that came into effect as endorsed by the Financial Supervisory Commission.

Basis for opinion

We conducted our audits in accordance with the "Regulations Governing Financial Statement Audit and Attestation Engagements of Certified Public Accountants" and Standards on Auditing of the Republic of China. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the consolidated

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financial statements section of our report. We are independent of the Group in accordance with the Norm of Professional Ethics for Certified Public Accountants of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

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

The key audit matters in relation to the consolidated financial statements for the year ended December 31, 2023 are outlined as follows:

Evaluation of inventories

Description

Refer to Note 4(13) for the accounting policies on evaluation of inventories, Note 5(2) for the critical accounting estimates and assumptions on evaluation of inventories and Note 6(6) for the details of inventories.

The Group is engaged in the research, development, manufacture and sales of notebook computers, handheld equipment for military and industrial computer system, structure parts for electronic, automotive and home appliance industries, and aerospace fasteners. Due to the rapid technological innovations and market competition, there is a higher risk of inventory losses due to slow-moving inventory and obsolescence. As inventories are stated at the lower of cost and net realisable value, the determination of net realisable value of inventories is subject to subjective judgment and uncertainties. Thus, we considered the evaluation of inventories as a key audit matter.

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How our audit addressed the matter

We performed the following audit procedures in respect of the above key audit matter: Sampled and validated inventory line items from the inventory aging report and agreed quantities and amounts to inventory sub-ledger and examined the appropriateness of categorization within the inventory aging report; verified the classification of obsolete inventories; and sampled and validated the net realisable value of slow-moving and obsolete inventories against respective historical information for diminution in inventory value in order to ensure the reasonableness of provision for inventory loss.

Revenue recognition of sales of products

Description

Refer to Note 4(31) for the accounting policies on recognition of sales of products, and Note 6(25) for the details of operating revenue. Sales of products is the main operating activity and relevant to the Group's financial performance. The Group sells different kinds of products with various transaction terms, which require judgment in determining the timing of the transfer of control of goods. Thus, we considered revenue recognition of sales of products as a key audit matter.

How our audit addressed the matter

We performed the following audit procedures in respect of the above key audit matter: Obtained an understanding of and evaluated internal controls over the revenue recognition of sales of products, and tested the operating effectiveness of related control activities; sampled and validated transaction terms, performance obligations, prices, orders, shipping documents and assessed appropriateness of amount and timing of revenue recognition; sampled transactions from a specific period of time prior to and after the balance sheet date; and validated respective transaction terms and shipping documents in order to ensure sales of products are recognised in the proper period.

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Other matter - Reference to audits of other auditors

We did not audit the financial statements of certain investments accounted for under the equity method for the years ended December 31, 2023 and 2022 which were audited by other auditors. Therefore, our opinion expressed herein, insofar as it relates to the amounts included in respect of these investees, is based solely on the reports of other auditors. The balances of related investments accounted for under the equity method was NT$1,109,095 thousand and NT$944,003 thousand, constituting 3% and 3% of the total consolidated assets as of December 31, 2023 and 2022, respectively, and comprehensive income from these investments accounted for under the equity method amounted to NT$265,394 thousand and NT$137,403 thousand, constituting 7% and 4% of the total consolidated comprehensive income for the years then ended, respectively.

Other matter - Parent company only financial statements

We have audited and expressed an unqualified opinion with other matter section on the parent company only financial statements of Getac Holdings Corp. as at and for the years ended December 31, 2023 and 2022.

Responsibilities of management and those charged with governance for the consolidated financial statements

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 the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations that came into effect as endorsed by the Financial Supervisory Commission, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

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

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

Auditors' responsibilities for the audit of the consolidated financial statements

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

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

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

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internal controls.

1. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal controls.
2. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
3. Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our report. However, future events or conditions may cause the Group to cease to continue as a going concern.
4. Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
5. Obtain sufficient appropriate audit evidence regarding the financial information of

the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

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

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