TECOM - AGM Information 2024 | FinancialReports.eu

Stock Code:2321

TECOM 東訊股份有限公司 Handbook for the 2024 Annual Meeting of Shareholders

Time: 9 a.m. on Tuesday (Weekday), June 18, 2024 Location: 23,R & D 2 ROAD, HSINCHU SCIENCE PARK, HSIN-CHU TAIWAN R.O.C.

(Company conference room)

1.Meeting Procedures ---------------------------------------------------------------------------------- 1 2.Meeting Agenda -------------------------------------------------------------------------------------- 2 (1) Management Presentations ----------------------------------------------------------------- 3 (2) Proposals -------------------------------------------------------------------------------------- 3 (3) Election Matters ------------------------------------------------------------------------------ 4 (4) Other Proposals ------------------------------------------------------------------------------- 4 (5) Questions and Motions ---------------------------------------------------------------------- 5 3.Appendix (1) Business Report ------------------------------------------------------------------------------ 6 (2)Audit Committee Report --------------------------------------------------------------------- 9 (3) Auditor's Report and Financial Statements for the Year 2023 ------------------------ 10 (4) 2023 Deficit Compensation Statement --------------------------------------------------- 30 (5) List of Director Candidates ------------------------------------------------------------------- 31 (6) Request to lift the non-competition restrictions for directors ------------------------- 34 4. Annex (1) Articles of Incorporation ------------------------------------------------------------------- 36 (2) Rules of Procedure for Shareholder Meetings ----------------------------------------------- 42 (3) Procedures for Election of Directors ----------------------------------------------------- 45 (4) Ownership of Shares by Directors -------------------------------------------------------- 46

Tecom Co., Ltd.

Procedure for the 2024 Annual Meeting of Shareholders

1. Call the Meeting to Order

2. Chairperson Remarks

3. Management Presentation

4. Proposals

5. Election Matters

6. Other Proposals

7. Questions and Motions

8. Adjournment

Tecom Co., Ltd.

Procedure for the 2024 Annual Meeting of Shareholders

Time: 9 a.m. on Tuesday (Weekday), June 18, 2024

Location: 23,R & D 2 ROAD, HSINCHU SCIENCE PARK, HSIN-CHU TAIWAN

R.O.C.(Company conference room)

Meeting Method: In-person Shareholders Meeting

1.Call the meeting to order

2.Chairperson Remarks

3. Reports on Company Affairs

(1) 2023 Business Report
(2) 2023 Audit Report of Audit Committee

4. Proposals

Proposal No.1: 2023 Business Report and Financial Statements

Proposal No.2: Approval of the Deficit Compensation for the fiscal year 2023.

5. Election Matters

The election of the 22[nd] term of directors of the company (including independent

directors.

※The voting on each of the above cases, after a case-by-case discussion, will be held at the same time as the election and the votes will be counted separately.

6. Other Proposals

Proposal No.1:The plan to lift the restrictions on non-competition restrictions for the company’s 22[nd] term of directors and their representatives.

7. Questions and Motions

8. Adjournment

Management Presentations

Please review the business report for the 2023 fiscal year.
(Please refer to pages 6-8 of this manual.)
Please review the audit committee report for the 2023 fiscal year.
(Please refer to page 9 of this manual.)

Proposals

Proposal 1 Proposed by the board of directors

Subject: Approval of the 2023 annual business report and financial statements Explanation:

The financial statements of the company for the 2023 fiscal year (including the consolidated financial statements) have been audited by accountants Li, Tien-Yi and Liu, Qian-Yu of PricewaterhouseCoopers Taiwan, and along with the annual business report, have been submitted to the audit committee of the company for review. An audit report has been issued.
Please refer to pages 6 to 8 and 10 to 29 of this manual for the annual business report, auditor's report, and various financial statements.

Resolution:

Proposal 2 Proposed by the board of directors Subject: Approval of the Deficit Compensation for the fiscal year 2023. Explanation:

The Deficit Compensation for the fiscal year 2023 has been reviewed and approved by the Board of Directors and the Audit Committee, and the audit report is on file.
The net loss after tax for the fiscal year 2023 was NT$36,094,064, and the accumulated deficit amount was NT$116,306,370.
Please refer to page 30 of this manual for the Deficit Compensation for the fiscal year 2023.

Resolution:

Election Matters

Proposed by the board of directors

Subject：Submission of the election of the 22[nd] term of directors of the company (including independent directors)

Explanation ： 1. Term of office for the 21st term of directors and independent directors will expire on July 21, 2024, and in compliance with the law, reelection should be held at the 2024 shareholders’ meeting.
According to the provisions of Article 14 of the Company‘ s Articles of Incorporation, 9 directors (including 3 independent directors) are elected through a candidate nomination system, for a term of three years starting from June 18, 2024 to June 17, 2027, and will take office immediately after the general shareholder's meeting, and the original directors will be dismissed at the same time.
For the education, professional experience and other relevant information of the company director candidates (including independent directors), please refer to pages 31-33 of this manual.
Independent director candidate, Lin , Chiang-lian, has served as an independent director for the company for three consecutive terms. His experience and expertise in finance and taxation, familiarity with relevant laws and corporate governance has brought help to the company. While performing his duties as an independent director, he can still use his expertise and give professional advice on the board of directors’ supervision. Therefore, the planned independent director nomination for him will continue for this election.
Please refer to page 45 of this Manual for the Procedures for Election of Directors

Resolution:

Other Proposals

Proposal 1 Proposed by the board of directors

Subject：Proposal to Lift he non-competition restrictions for the company’s 22[nd] term of new directors and their representatives, please refer to referendum.

Explanation: 1. According to Article 209 of the Company Act, directors who, for themselves

or others run business which are similar to the scope of the company’s business for himself or others, shall explain and obtain permission from the shareholders’ meeting.

After examining the director candidates (including independent directors) nominated by the company’s board of directors, part of the business of the company where he holds concurrent positions are the same or similar to the company. In compliance with Article 209 of the Company law, a list of directors to be exempted from non-competition restrictions is prepared. Please refer to pages 34-35 of this manual. We would like to request the shareholders to approve and lift the non-competition restrictions on the new directors and their representatives without prejudice to the interests of the company.
This resolution was passed on the 18[th] meeting of the 21[th] term of the board of directors of the company on May 6, 2024.

Resolution:

Questions and Motions

Adjournment

`【` Appendix 1 `】`

Business Report

Looking back at 2023, the global demand for products is weak, and the global supply chain continues to adjust inventories, pushing down the country’s export and performance on investments. With the economic outlook full of uncertainty, corporate investment plans are more conservative. As a result, the Directorate General of Budget, Accounting and Statistics revised the economic growth rate downward in 2023 to 1.42%, setting a new low level in the last 14 years and a new low since the financial crisis.

In additional, the housing market lacks a strong foundation, especially since the overall economic situation still remains uncertain. The number of houses sold and transferred throughout the year decreased in the last 2 years, from 267,666 in 2021 to only 236,363 in 2023, even lower than 250,175 in 2020, posing a challenge to the company’s smart home related business.

Since the start of this year, the entire industry had been facing high prices of raw materials and energy, resulting to an increasing pressure on production costs. In addition to the pressure of compliance requirements, energy conservation and emission reduction in the global supply chain, the company continues to actively explore new business and develop new products to respond to new opportunities and customer needs brought about by new market trends. The company is committed to cost control and financial structure strengthening in order to reduce annual losses, continuously transforming, to create higher value to shareholders.

Results of Business Plan Implementation
In order to maintain our competitiveness in research and development and to maintain our leading position in the market, in additional to organization changes in 2023, the company is committed to cost savings and actively reducing operational costs. The company also continues to invest in progressive and innovative application such as Artificial Intelligence of Things (Aiot), solutions for energy conservation and emission reduction, digital carbon disk tools, business communication applications to develop high margin opportunities. In fiscal year 2023, our individual operating income was NTD $535.78 million, with a net loss after tax of NTD $36.09 million. Our consolidated operating income was NTD $804 million, with a consolidated net loss after tax of NTD $21.9 million.
2023 Financial Revenue and Expenditure Analysis and Profitability Analysis The 2023 and 2022 Financial Revenue and Expenditure Analysis and Profitability Analysis are as follows:

ollows:
	(Unit: NTD thousand dollars) 2023 2022 535,782 661,904 (55,677) (22,382) (36,094) 9,378 (5,435) (15,402) 804,032 1,010,890 (21,935) 20,660 (20,191) 32,592 10,468 7,812
Items	2023	2022
Individual
Operating revenue	535,782	661,904
Operating profit(loss)	(55,677)	(22,382)
Net Income(Loss)	(36,094)	9,378
Total comprehensive income	(5,435)	(15,402)
Combined
Operatingrevenue	804,032	1,010,890
Operating profit(loss)	(21,935)	20,660
Net Income(Loss)	(20,191)	32,592
Total comprehensive income	10,468	7,812

Note ： Please refer to our company's financial reports and annual reports for comprehensive information on all financial matters.

3. Research Development Expenditure

Our company's R&D capabilities have not only been recognized by domestic and international customers, but we also place great emphasis on product layout. Our annual R&D expenses totaled NT$76.93 million. Our main R&D focuses include the on enterprise-level new-generation IP mobile switchboard systems, full-network smart home systems, cloudbased smart security video solutions, Industrial IoT smart electro-mechanical health management systems and cloud services, energy efficiency monitoring and management, corporate carbon management, and digital carbon inventory tools, etc. These are the key drivers of our company's sales growth.

4. 2024 Business Objectives

In addition to continuously laying out new technologies and observing global economic trends to adjust our market strategy, we actively leverage group resources to accelerate the company's transformation and implement improvements to our operational quality. Looking ahead to 2024, the growth trend of digital transformation and AIoT applications remains strong, a full range of smart electro-mechanical health management systems and cloud services provide a diversified application service integration platform. New products and new businesses expansion drive revenue growth and at the same time, deepen our business management and maintain a stable financial structure, with the main goal of improving shareholder returns.

5. 2024 Business Policy and Sales Policy (1) Business Policy

We will continue to develop our development of management platforms and access control intercom security systems for smart homes/buildings and communities, as well as related products such as smart office communication systems. We will actively expand into domestic and international markets.
We will launch a series of products and cloud service platforms for the Industrial Internet of Things "Intelligent Inspection System", leading the industry in innovative applications.
We will invest in the field of ESG, provide digital and low-carbon solutions for our customers, We also collaborate with relevant certification organizations, assist customers to follow the carbon reduction roadmap, carry out dual cycles of management carbon reduction and equipment carbon reduction to achieve the ultimate goal of carbon neutrality.
Improve product quality as expected.
Control costs and improve operating efficiency.

(2) Sales Policy

Continue to adjust the channel structure, introduce the integration of new products, import product quality and strengthen after sales service, establish a diversified internet service system, to improve profitability.
Develop thoroughly the smart electro-mechanical health management systems and cloud services, assist electromechanical equipment maintenance partners to utilize digital solutions to improve preventive maintenance abilities, ensure the operations of customers’ factories and production equipment, reduce energy consumption and carbon emissions.

  3. Conduct research and development on new technologies, provide an ESG dual cycle platform, develop application service products, empower customers and partners.

Impact of External Competitive Environment, Regulatory Environment, and Macro Business Environment
Our company, with its profound technical capabilities and accumulated product development experience, has been widely applauded domestically and internationally, and has brought stability to the company’s operations. However with the market trends of smart home manufacturing, smart home operations and maintenance, and energy conservation and emission reduction, the group has pooled in resources in recent years to actively invest in industry 4.0. Industrial IoT-level solutions have also been shipped. Through product differentiation, the group has established market presence which has turned into a competitive weapon to turn losses into profits in 2024.

In terms of regulatory environment, the external competitive environment quickly changes. In addition to looking into industry and market changes, the company also looks into changes in significant domestic and international strategies and legal environment changes. The company also collaborates with relevant authorities and while taking into consideration the company’s operations and management, takes the needed measures in response to the impact of environmental changes. T mention, under the ESF-related authorities including the Financial Supervisory Commission and Ministry of Environment, the company not only follows legal regulations, but also follows trends and converts them into innovative market opportunities.

Our company's management team and all employees deeply understand the expectations of shareholders and the general public. Looking ahead, in fiscal year 2024, in addition to pursuing revenue growth, our primary goal is to ensure profitability and continue to reduce the combined debt of our company and the group. In addition to revenue growth, the company also aims to maintain its gross profit margins of its main businesses. We will continue to focus on stable risk control, actively optimize our business model and strategy to improve operational performance, while also providing greater profits and growth to our shareholders. We would like to express our gratitude to all shareholders for their support and encouragement over the past year.

Chairman: Liu, Chao-Kai General Manager: Tien, Ying-Juei Accounting Supervisor: Wang, Yen-Li

【 Appendix 2 】

Audit Committee Report

To: Shareholders’ Annual General Meeting for Year 2023, Tecom Co., Ltd.

The Board of Directors has presented the operating report, financial statements, and deficit offsetting proposal for the 2023 fiscal year. The financial statements have been audited by Li, Tien-Yi and Liu, Qian-Yu of Pricewaterhouse Coopers Taiwan, and their audit report has been issued.

The aforementioned operating report, financial statements, and deficit offsetting proposal have been audited by the Audit Committee and found to be in compliance. Therefore, in accordance with Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Act, we hereby submit this report for your review at the 2024 Annual Shareholders' Meeting.

The Audit Committee, Chairman:

Lin , Chiang-liang

March 4, 2024

`【` Appendix 3 `】`

Independent Auditors’ Report

(113) No. Finance-Auditing-Reporting- 23003198

The Board of Directors and Shareholders

Tecom Co., LTD.

Opinion

We have audited the accompanying parent company only balance sheets of Tecom Co., LTD. as of December 31, 2023 and 2022, and the related parent company only statements of comprehensive income, changes in equity and cash flows for the years ended December 31, 2023 and 2022, and notes to the parent company only financial statements, including the summary of significant accounting policies (together referred as “the parent company only financial statements”).

In our opinion, making Reference to the Audits of Component Auditors of our audit report the parent company only financial statements referred to above present fairly, in all material respects, the financial position of Tecom Co., LTD. as at December 31, 2023 and 2022, and its financial performance and its cash flows for the years ended December 31, 2023 and 2022, in conformity with the requirements of the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

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

Key Audit Matters

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

The key audit matter about the parent company only financial statements of the Company for the year ended December 31, 2023 is as below:

Inventory Valuation

Description

Tecom Co., LTD. measures the inventories at the lower of cost and net realizable value. Please refer to Notes 5(2) for accounting assumptions and judgments, major sources of estimation uncertainty and information for inventory respectively. Please refer to Note 6(5) for the explanations about inventories. Inventory and allowance for inventory valuation loss are NT$ 147,812 thousand and NT$42,110 thousand, respectively as of December 31, 2023. Tecom Co., LTD. measures the inventories at the lower of cost and net realizable value. Due to the large inventory amount, Tecom Co. is at high risk of inventory impairment loss caused by the rapid changes in industry technology resulting in outdated products or lack of market sales value. Therefore, the valuation of inventories has been identified as a key audit matter.

How our audit addressed the matter

Our audit procedures performed for the above matter are as follows:

Assessed the rationality of policies on allowance for inventory valuation loss.
Selected specific part numbers and verified the net realizable value.
Checked the allowance for inventory valuation loss recognized.

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

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

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

Those charged with governance, including audit committee, are responsible for overseeing the financial reporting process of Tecom Co., LTD.

Auditor’s Responsibilities for the Audit of the Parent Company Only Financial Statements

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

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

Identify and assess the risks of material misstatement of the parent company only financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
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 internal control of Tecom Co., LTD.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
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 ability to continue as a going concern of Tecom Co., LTD. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the parent company only 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 auditor’s report. However, future events or conditions may cause Tecom Co., LTD. to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the parent company only finan-

cial statements, including the accompanying notes, and whether the parent company only financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within Tecom Co., LTD. to express an opinion on the parent company only financial statements. We are responsible for the direction, supervision and performance of the Company 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.

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

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

Accountants: Li, Tien-Yi Liu, Chien-Yu

For and on behalf of PricewaterhouseCoopers, Taiwan

Securities ： Financial-SupervisoryCompetent Securities-AuditingAuthority 1020028992 ApprovedFinancial-Supervisorycertified No. Securities-Auditing1090350620

March 4,2024

Tecom Co., LTD. SEPARATE BALANCE SHEETS DECEMBER 31, 2023 AND 2022

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

ASSETS CURRENT ASSETS 1100 Cash and cash equivalents 1120 Financial assets at fair value through other comprehensive income - current 1136 Financial assets at amortized cost - current 1140 Contract assets - current 1150 Notes receivables, net 1160 Notes receivables from related parties, net 1170 Accounts receivables, net 1180 Accounts receivables from related parties, net 1200 Other receivables 1220 Current income tax assets 130X Inventories 1410 Prepayments 1470 Other current assets 11XX Total current assets NONCURRENT ASSETS 1517 Financial assets at fair value through other comprehensive income - non current 1550 Investments accounted for using equity method 1600 Property, plant and equipment 1755 Right-of-use assets 1760 Investment properties, net 1780 Intangible assets 1840 Deferred income tax assets 1900 Other noncurrent assets 15XX Total noncurrent assets 1XXX TOTAL ASSETS	Notes 6(1) 6(2) 6(3) and 8 6(22) 6(4) 6(4) and 7 6(4) 6(4) and 7 7 6(5) 6(2) 6(6) 6(7) and 8 6(8) and 7 6(9) and 8 6(10) 6(29) 8	December 31,2023 AMOUNT % $ 32,534 3 16,050 1 84,773 7 10,091 1 15,569 1 101 - 88,282 7 17,154 2 3,248 - 945 - 105,702 9 3,461 - 2,117 - 380,027 31 250,140 20 219,866 18 47,963 4 171,992 14 35,288 3 1,152 - 115,508 9 13,266 1 855,175 69 $ 1,235,202 100	December 31,2022	December 31,2022
			AMOUNT $ 27,000 31,997 245,890 - 26,300 221 75,290 25,246 2,204 - 172,001 2,957 1,827 610,933 467,152 222,301 61,571 180,857 22,790 2,496 115,508 13,908 1,086,583 $ 1,697,516	%
				2 2 15 - 2 - 4 1 - - 10 - -
				36
				27 13 4 11 1 - 7 1
				64
				100

(continued)

Tecom Co., LTD. SEPARATE BALANCE SHEETS DECEMBER 31, 2023 AND 2022 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Liabilities and Equity	December31,2023 December31,2022 Notes AMOUNT % AMOUNT % 6(11) and 8 $ 324,000 26 $ 740,000 44 6 (14) 5,035 - 4,031 - 2,070 - 2,280 - 6 (12) 52,129 4 86,567 5 6 (12) and 7 3,255 - 2,975 - 6 (13) and 7 55,993 5 51,272 3 5,046 - 3,618 - 7 7,929 1 7,823 1 - - - - 6 (16) 200,000 16 - - 6 (14) 6,568 1 6,052 1 662,025 53 904,618 54 6 (15) and 7 133,000 11 133,000 8 6 (16) and 8 - - 200,000 12 1,563 - 1,360 - 6 (29) 880 - 880 - 7 175,885 14 183,277 11 6 (6)(17) 56,230 5 63,310 3 367,558 30 581,827 34 1,029,583 83 1,486,445 88 6 (19) 142,719 12 142,719 8 160,000 13 160,000 10 6 (20) 6,237 - 6,237 - 6 (21) ( 116,306) ( 9 ) ( 124,694) ( 7) 6 (2) 26,781 2 ( 40,604) ( 2) 6 (19) ( 13,812) ( 1 ) ( 13,795) ( 1) 205,619 17 211,071 12 9 11 $ 1,235,202 100 $ 1,697,516 100
CURRENT LIABILITIES 2100 Short-term borrowings 2130 Contract liabilities - current 2150 Notes payable 2170 Accounts payable 2180 Accounts payable from related parties 2200 Other payables 2250 Provisions for liabilities - current 2280 Lease liabilities - current 2310 Receipts in advance 2320 Long-term liabilities - current portion 2399 Other current liabilities - others 21XX Total current liabilities Non-current liabilities 2530 Bonds payable 2540 Long-term borrowings 2550 Provisions for liabilities - non-current 2570 Deferred income tax liabilities 2580 Lease liabilities - non-current 2600 Other non-current liabilities 25XX Total noncurrent liabilities 2XXX Total liabilities Equity Share capital 3110 Ordinary shares 3120 Preferred shares Capital reserve 3200 Capital reserve Retained earnings 3350 Accumulated deficit Other equity 3400 Other equity 3500 Treasury stock 3XXX Total Equity SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED CONTRACT COMMITMENTS SIGNIFICANT SUBSEQUENT EVENTS 3X2X TOTAL LIABILITIES AND EQUITY

Liabilities and Equity

December31,2023
December31,2022
Notes
AMOUNT

%
AMOUNT

%
6(11) and 8
$ 324,000
26
$ 740,000
44
6 (14)
5,035
-
4,031
-
2,070
-
2,280
-
6 (12)
52,129
4
86,567
5
6 (12) and 7
3,255
-
2,975
-
6 (13) and 7
55,993
5
51,272
3
5,046
-
3,618
-
7
7,929
1
7,823
1
-
-
-
-
6 (16)
200,000
16
-
-
6 (14)
6,568
1
6,052
1
662,025
53
904,618
54
6 (15) and 7
133,000
11
133,000
8
6 (16) and 8
-
-
200,000
12
1,563
-
1,360
-
6 (29)
880
-
880
-
7
175,885
14
183,277
11
6 (6)(17)
56,230
5
63,310
3
367,558
30
581,827
34
1,029,583
83
1,486,445
88
6 (19)
142,719
12
142,719
8
160,000
13
160,000
10
6 (20)
6,237
-
6,237
-
6 (21)
(
116,306) (
9 )
(
124,694) (
7)
6 (2)
26,781
2
(
40,604) (
2)
6 (19)
(
13,812) (
1 )
(
13,795) (
1)
205,619
17
211,071
12
9
11
$ 1,235,202
100
$ 1,697,516
100

CURRENT LIABILITIES
2100
Short-term borrowings
2130
Contract liabilities - current
2150
Notes payable
2170
Accounts payable
2180
Accounts payable from related parties
2200
Other payables
2250
Provisions for liabilities - current
2280
Lease liabilities - current
2310
Receipts in advance
2320
Long-term liabilities - current portion
2399
Other current liabilities - others
21XX
Total current liabilities
Non-current liabilities
2530
Bonds payable
2540
Long-term borrowings
2550
Provisions for liabilities - non-current
2570
Deferred income tax liabilities
2580
Lease liabilities - non-current
2600
Other non-current liabilities
25XX
Total noncurrent liabilities
2XXX
Total liabilities
Equity
Share capital
3110
Ordinary shares
3120
Preferred shares
Capital reserve
3200
Capital reserve
Retained earnings
3350
Accumulated deficit
Other equity
3400
Other equity
3500
Treasury stock
3XXX
Total Equity
SIGNIFICANT CONTINGENT
LIABILITIES AND UNRECOGNIZED
CONTRACT COMMITMENTS
SIGNIFICANT SUBSEQUENT EVENTS
3X2X
TOTAL LIABILITIES AND EQUITY

3X2X TOTAL LIABILITIES AND EQUITY

The accompanying notes are an integral part of the parent company only financial statements.

Chairman: Liu, Chao-Kai

CEO:Tien, Ying-Juei

Accounting Manager: Wang, Yen-Li

Tecom Co., LTD. DECEMBER 31, 2023 AND 2022 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT EARNINGS PER SHARE IN NEW TAIWAN DOLLARS)

					2023				2022
		Notes			AMOUNT	%			AMOUNT	%
4000	Operating revenues	6(22) and7		$	535,782	100		$	661,904	100
5000	Operating costs	6(5) and 7	(		398,816 ) (	75)	(		488,051) (	74)
5900	Gross profit				136,966	25			173,853	26
5910	Unrealized profit from sales		(		6,286 ) (	1)	(		6,173 ) (	1)
5920	Realized profit from sales				6,173	1			6,212	1
5950	Gross profit, net				136,853	25			173,892	26
	Operating expenses	6(27)(28)
6100	Selling expenses		(		72,050 ) (	13)	(		71,767 ) (	11)
6200	Administrative expenses		(		48,086 ) (	9)	(		48,263 ) (	7)
6300	Research and development
	expenses		(		72,263 ) (	14)	(		76,306 ) (	11)
6450	Expected credit gains (losses)	12 (2)			131	-			62	-
6000	Total operating expenses		(		192,530 ) (	36)	(		196,274) (	29)
6900	Operating loss		(		55,677 ) (	11)	(		22,382) (	3)
	Non-operating income and expenses
7100	Interest income	6(23)			8,800	2			3,260	1
7010	Other income	6(24) and 7			18,490	3			21,376	3
7020	Other gains and losses	6(25)			2,931	1	(		12,126 ) (	2)
7050	Financial costs	6(26) and 7	(		24,764 ) (	5)	(		26,725 ) (	4)
7070	Share of profit of subsidiaries,	6(6)
	associates and joint ventures
	accounted for using the equity
	method				14,126	3			21,723	3
7000	Total non-operating income
	and expenses				19,583	4			31,760	5
7900	Income (loss) before income tax				36,094	7			9,378	2
7950	Income tax expense	6(29)			-	-			-	-
8200	Net income (loss)			$	36,094	7		$	9,378	2
	Other comprehensive income,
	net
	Not to be reclassified to profit
	or loss in subsequent periods
8311	Remeasurements of defined	6(18)
	benefit plans			$	130	-		$	2,933	-
8316	Unrealized valuation gains or	6(2)
	losses from equity instruments
	investments measured at fair
	value through other
	comprehensive income		(		30,529 ) (	6)	(		27,713) (	4)
8300	Other comprehensive income,
	net		(	$	30,659 ) (	6)	($		24,780) (	4)
8500	Total comprehensive income		(	$	5,435 ) (	1)	($		15,402) (	2)
	Earnings (losses) per share	6 (30)
9750	Basic earnings per share		(	$		2.60)		$		0.51
9850	Diluted earnings per share		(	$		2.60)		$		0.24

The accompanying notes are an integral part of the parent company only financial statements.

Chairman: Liu, Chao-Kai

CEO:Tien, Ying-Juei

Accounting Manager: Wang, Yen-Li

Tecom Co., LTD. SEPARATE STATEMENTS OF CHANGES IN EQUITY YEARS ENDED DECEMBER 31, 2023 AND 2022 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Share capital

Notes Ordinary shares 2 0 2 2 Balance at January 1, 2022 $ 445,997 Net income for the year - Other comprehensive income (loss) for the year 6(2)(18) - Total comprehensive income for the year - Changes in the net value of investment equity of associates accounted for using the equity meth- od not recognized by shareholding percentage 6(6) - Capital reduction to cover accumulated deficit 6(19) ( 303,278 ) Disposal of financial assets at fair value through other comprehensive income 6(2) - Balance at December 31, 2022 $ 142,719 2 0 2 3 Balance at January 1, 2023 $ 142,719 Net loss for the year - Other comprehensive income (loss) for the year 6(2)(18) - Total comprehensive income for the year - Disposal of financial assets at fair value through other comprehensive income 6(2) - Acquisition of the parent’s treasury stocks by subsidiaries 6(6)(19) - Balance at December 31, 2023 $ 142,719	Notes	Ordinary shares	Capital reserve	Legal reserve	Accumulated deficit	Unrealized Gain (Loss) on Financial Assets at Fair value through other comprehen- sive income	Treasury stock	Total equity
			$ 500,000 - - - - ( 340,000 ) - $ 160,000 $ 160,000 - - - - - $ 160,000	$ 6,227 - - - 10 - - $ 6,237 $ 6,237 - - - - - $ 6,237	($ 647,113 ) 9,378 2,933 12,311 - 643,278 ( 133,170 ) ($ 124,694 ) ($ 124,694 ) ( 36,094 ) 130 ( 35,964 ) 44,352 - ($ 116,306 )	($ 64,853 ) - ( 27,713 ) ( 27,713 ) - - 133,170 $ 40,604 $ 40,604 - 30,529 30,529 ( 44,352 ) - $ 26,781

The accompanying notes are an integral part of the parent company only financial statements.

Chairman: Liu, Chao-Kai

CEO:Tien, Ying-Juei

Accounting Manager: Wang, Yen-Li

Tecom Co., LTD.

Statement of cash flow

For the years ended December 31,2023 AND 2022 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Cash flows from operating activities:
Income (loss) before income tax
Adjustments for:
The profit or loss items:
Depreciation expenses

Amortization expenses

Expected credit losses (reversal gains)

Interest expense

Interest income

Dividend income

Gains arising from lease modification

Share of loss (profit) of subsidiaries and joint
ventures accounted for using the equity method

Unrealized (realized) profit from sales
Gain on disposal of investments

Changes in operating assets and liabilities：
Changes in operating assets
Contract assets
Notes receivables
Notes receivables from related parties
Accounts receivables
Accounts receivables from related parties
Other receivables
Inventories
Prepayments
Other current assets
Changes in operating liabilities
Notes payables
Accounts payables
Accounts payables to related parties
Contract liabilities
Other payables
Provisions for liabilities
Other current liabilities
Accrued pension liabilities
Cash generated from (used in) operating activities
Interest received
Interest paid
Dividends received
Net cash flows generated from (used in)
operating activities Notes
2023
2022
( $ 36,094 ) $ 9,378
6(7)(8)(9)(27)
20,942
20,111
6(10)(27)
1,858
2,136
12(2)
131 (
62 )
6(26)
24,764
26,725
6(23)
(
8,800 ) (
3,260 )
6(24)
(
6,806 ) (
14,747 )
6(25)
- (
32 )
6(6)
(
14,126 ) (
21,723 )
113 (
39 )
6(25)
- (
80 )
(
10,091 )
-
10,731
21,741
120 (
112 )
(
13,123 )
21,984
8,092 (
1,808 )
(
1,886 )
3,533
66,299 (
14,964 )
(
504 )
8,464
(
290 ) (
1,226 )
(
210 ) (
753 )
(
34,438 ) (
38,493 )
280 (
5,125 )
1,004
1,034
2,851 (
5,125 )
1,620 (
906 )
516 (
50 )
(
8,634 ) (
8,804 )
4,319 (
2,203 )
9,641
2,132
(
25,219 ) (
26,396 )
24,111
25,080
12,852 (
1,387 )

(continued)

Tecom Co., LTD.

Statement of cash flow For the years ended December 31,2023 AND 2022 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Cash flows from investing activities:
Decrease (increase) in financial assets at amortized
cost
Proceeds from disposal of financial assets at fair
value through other comprehensive income
Proceeds from disposal of investment accounted for
using equity method
Funds returned from the liquidation of subsidiaries

Acquisition of property, plant and equipment

Acquisition of intangible assets

Decrease (increase) in guaranteed deposits paid
Net cash flows generated from investing activities
Cash flows from financing activities:
Increase in short term borrowings

Decrease in short term borrowings

Repayments of long-term borrowings

Increase in guaranteed deposits received
Repayment of principal portion of lease liabilities

Net cash flows used in financing activities
Net (decrease) increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year

Notes
2023
2022
$ 161,117 ( $ 9,450 )
263,488
44,506
-
80
6(6)
47
-
6(31)
(
4,093 ) (
5,017 )
6(10)
(
514 ) (
1,493 )
(
683 )
824
419,362
29,450
6(32)
2,964,000
1,914,491
6(32)
(
3,380,000 ) (
1,741,603 )
6(32)
- (
280,000 )
763
1,008
6(32)
(
11,443 ) (
11,705 )
(
426,680 ) (
117,809 )
5,534 (
89,746 )
27,000
116,746
$ 32,534 $ 27,000

The accompanying notes are an integral part of the parent company only financial statements.

CEO:Tien, Ying-Juei

Chairman: Liu, Chao-Kai

Accounting Manager: Wang, YenLi

Independent Auditors’ Report (113) No. Finance-Auditing-Reporting- 23003052

The Board of Directors and Shareholders

Tecom Co., LTD.

Opinion

We have audited the accompanying consolidated balance sheets of Tecom Co., LTD. and its subsidiaries (the “Group”) as of December 31, 2023 and 2022, and the related consolidated statements of comprehensive income, changes in equity and cash flows for the years ended December 31, 2023 and 2022, and notes to the consolidated financial statements, including the summary of significant accounting policies (together referred as “the consolidated financial statements”).

In our opinion, based on our audits and the reports of other auditors (please refer to the section “Other Matter — Making Reference to the Audits of Component Auditors” of our audit report) the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Group and its subsidiaries as of December 31, 2023 and 2022, and their consolidated financial performance and cash flows for the years ended December 31, 2023 and 2022, in conformity with the requirements of the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Financial Reporting Standards (IFRSs), International Accounting Standards (IASs), Interpretations developed by the International Financial Reporting Interpretations Committee (IFRIC) or the former Standing Interpretations Committee (SIC) as endorsed and issued into effective by Financial Supervisory Commission of the Republic of China.

Basis for Opinion

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

Key Audit Matters

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

provide a separate opinion on these matters.

The key audit matter about the consolidated financial statements of the Group for the year ended December 31, 2023 is as below:

Inventory Valuation

Description

The Group measures the inventories at the lower of cost and net realizable value. Please refer to Notes 5(2) for accounting assumptions and judgments, major sources of estimation uncertainty and information for inventory respectively. Please refer to Note 6(6) for the explanations about inventories. Inventory and allowance for inventory valuation loss are NT$ 169,056 thousand and NT$52,151 thousand, respectively as of December 31, 2023. The Group measures the inventories at the lower of cost and net realizable value. Due to the large inventory amount, the Group is at high risk of inventory impairment loss caused by the rapid changes in industry technology resulting in outdated products or lack of market sales value. Therefore, the valuation of inventories has been identified as a key audit matter. Audit procedures in response

Our audit procedures performed for the above matter are as follows:

1. Assessed the rationality of policies on allowance for inventory valuation loss.

2. Selected specific part numbers and verified the net realizable value.

3. Checked the allowance for inventory valuation loss recognized.

Other Matter — Parent Company Only Financial Statements

Tecom Co., LTD. has prepared its parent company only financial statements as of and for the years ended December 31, 2023 and 2022, on which we have issued an unqualified opinion for your reference.

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 requirements of the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the IFRS, IAS, IFRIC and SIC endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China, 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.

In preparing the consolidated financial statements, management is responsible for assessing the ability to continue as a going concern of the Group 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 audit committee, are responsible for overseeing the financial reporting process of the Group.

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

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

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 internal control.
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 internal control of the Group.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
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 ability to continue as a going concern of the Group. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s 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 auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the accompanying notes, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
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.

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

Accountants: Li, Tien-Yi Liu, Chien-Yu

For and on behalf of PricewaterhouseCoopers, Taiwan

Securities ： Financial-SupervisoryCompetent Securities-AuditingAuthority 1020028992 ApprovedFinancial-Supervisorycertified No. Securities-Auditing1090350620

March 4, 2024

Tecom Co., LTD. and Subsidiaries CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2023 AND 2022 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Note	December 31,2023 AMOUNT % $ 143,638 10 14,430 1 16,050 1 254,644 18 10,091 1 17,334 1 400 - 130,376 9 8,039 1 9,460 1 116,905 8 5,169 1 2,067 - 728,603 52 250,140 18 18,273 1 98,351 7 173,955 13 1,374 - 115,981 8 13,557 1 671,631 48 $ 1,400,234 100	December 31,2022	% 14 1 2 16 - 1 - 8 1 - 10 - -
	AMOUNT $ 143,638 14,430 16,050 254,644 10,091 17,334 400 130,376 8,039 9,460 116,905 5,169 2,067 728,603 250,140 18,273 98,351 173,955 1,374 115,981 13,557 671,631 $ 1,400,234	AMOUNT $ 265,304 10,493 31,997 295,081 - 26,464 2,220 153,546 11,996 2,320 192,213 5,106 1,397 998,137 467,152 16,896 92,095 183,801 2,644 115,981 16,240 894,809 $ 1,892,946
6 (1) 6 (2) 6 (3) 6 (4) and 8 6(21) 6 (5) 6 (5) and 7 6 (5) 6 (5) and 7 7 6 (6) 6 (3) and 8 6 (7) 6(8) and 8 6(9)and7 6(10) 8
			53
			24 1 5 10 - 6 1
			47
			100

(continued)

Tecom Co., LTD. and Subsidiaries CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2023 AND 2022 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Liabilities and Equity CURRENT LIABILITIES 2100 Short-term borrowings 2130 Contract liabilities - current 2150 Notes payable 2170 Accounts payable 2180 Accounts payable from related parties 2200 Other payables 2230 Current income tax liabilities 2250 Provisions for liabilities - current 2280 Lease liabilities - current 2320 Long-term liabilities - current portion 2399 Other current liabilities 21XX Total current liabilities Non-current liabilities 2540 Long-term borrowings 2550 Provisions for liabilities - non-current 2570 Deferred income tax liabilities 2580 Lease liabilities - non-current 2600 Other non-current liabilities 25XX Total noncurrent liabilities 2XXX Total liabilities EQUITY ATTRIBUTABLE TO SHAREHOLDERS OF THE PARENT Share capital 3110 Ordinary shares 3120 Preferred shares Capital reserve 3200 Capital reserve Retained earnings 3350 Accumulated deficit Other equity 3400 Other equity 3500 Treasury stock 31XX Equity attributable to shareholders of the parent 36XX NON - CONTROLLING INTERESTS 3XXX Total Equity SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED CONTRACT COMMITMENTS SIGNIFICANT SUBSEQUENT EVENTS 3X2X TOTAL LIABILITIES AND EQUITY	Notes 6(11) and 8 6(21) 6(12) 6(12) and 7 6(13) and 7 7 6(15) 6(14) 6(15) and 8 6(28) 7 6(16)(17) 6(18) 6(19) 6(20) ( 6(18) ( 4 (3) 9 11	December 31,2023 December 31,2022 AMOUNT % AMOUNT % $ 324,000 23 $ 755,000 40 5,091 1 4,392 - 2,901 - 3,142 - 74,560 5 115,763 6 583 - 1,346 - 72,726 5 68,105 4 6,792 1 6,953 1 5,046 - 3,617 - 8,933 1 8,813 1 200,000 14 - - 7,292 1 6,974 - 707,924 51 974,105 52 - - 200,000 10 2,281 - 2,064 - 880 - 880 - 176,905 13 185,301 10 47,576 3 55,577 3 227,642 16 443,822 23 935,566 67 1,417,927 75 142,719 10 142,719 8 160,000 11 160,000 9 6,237 1 6,237 - 116,306 ) ( 8 ) ( 124,694 ) ( 7 ) 26,781 2 40,604 2 13,812 ) ( 1 ) ( 13,795 )( 1 ) 205,619 15 211,071 11 259,049 18 263,948 14 464,668 33 475,019 25 $ 1,400,234 100 $ 1,892,946 100

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

CEO:Tien, Ying-Juei

Chairman: Liu, Chao-Kai

Accounting Manager: Wang, Yen-Li

Tecom Co., LTD. and Subsidiaries CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Item 4000 Operating revenues 5000 Operating costs 5950 Gross profit, net Operating expenses 6100 Selling expenses 6200 Administrative expenses 6300 Research and development expenses 6450 Expected credit gains (losses) 6000 Total operating expenses 6900 Operating Income (losses) Non-operating income and expenses 7100 Interest income 7010 Other income 7020 Other gains and losses 7050 Financial costs 7060 Share of profit of associates and joint ventures accounted for using the equity method 7000 Total non-operating income and expenses 7900 Income (loss) before income tax 7950 Income tax expense 8200 Net income (loss) Other comprehensive income Not to be reclassified to profit or loss in subsequent periods 8311 Remeasurements of defined benefit plans 8316 Unrealized valuation gains or losses from equity instruments investments measured at fair value through other comprehensive income 8300 Other comprehensive income, net 8500 Total comprehensive income NET INCOME (LOSS) ATTRIBUTABLE TO 8610 Shareholders of the parent 8620 Non-controlling interests TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO: 8710 Shareholders of the parent 8720 Non-controlling interests Earnings (losses) per share 9750 Basic earnings per share 9850 Diluted earnings per share	Notes 6(21) and 7 6(6) and 7 ( 6(26)(27) and 7 ( ( ( 12 (2) ( 6(22) 6(23) and 7 6(24) 6(25) ( 6(7) 6(28) ( 6(17) 6(3) ( ( ( 6(29) ( (	2023
		$

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

CEO:Tien, Ying-Juei

Chairman: Liu, Chao-Kai

Accounting Manager: Wang, Yen-Li

Tecom Co., LTD. and Subsidiaries

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

December 31, 2023 AND 2022 Unit: NT thousand

				EquityAttributable to Shareholders oftheParent	EquityAttributable to Shareholders oftheParent	EquityAttributable to Shareholders oftheParent	EquityAttributable to Shareholders oftheParent	EquityAttributable to Shareholders oftheParent			non-controlling interests
Share		capital		Capital Reserve		Accumulated deficit	Unrealized Gain (Loss) on Financial Assets at Fair value through other compre- hensive income		Treasury stock	Total
Ordinary shares			Preferred Shares
(	$ 445,997 - - - - - 303,278 ) - $ 142,719 $ 142,719 - - - - - - $ 142,719		$ 500,000 - - - - - ( 340,000 ) - $ 160,000 $ 160,000 - - - - - - $ 160,000		$ 6,227 - - - 10 - - - $ 6,237 $ 6,237 - - - - - - $ 6,237	($ 647,113 ) 9,378 2,933 12,311 - - 643,278 ( 133,170 ) ($ 124,694 ) ($ 124,694 ) ( 36,094 ) 130 ( 35,964 ) - 44,352 - ($ 116,306 )		($ 64,853 ) - ( 27,713 ) ( 27,713 ) - - - 133,170 $ 40,604 $ 40,604 - 30,529 30,529 - ( 44,352 ) - $ 26,781	($ 13,795 ) - - - - - - - ($ 13,795 ) ($ 13,795 ) - - - ( 17 ) - - ($ 13,812 )	$ 226,463 9,378 ( 24,780 ) ( 15,402 ) 10 - - - $ 211,071 $ 211,071 ( 36,094 ) 30,659 ( 5,435 ) ( 17 ) - - $ 205,619	$ 252,067 23,214 - 23,214 - ( 11,333 ) - - $ 263,948 $ 263,948 15,903 - 15,903 ( 22 ) - ( 20,780 ) $ 259,049	$ 478,530 32,592 ( 24,780 ) 7,812 10 ( 11,333 ) - - $ 475,019 $ 475,019 ( 20,191 ) 30,659 10,468 ( 39 ) - ( 20,780 ) $ 464,668

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

Chairman: Liu, Chao-Kai

CEO:Tien, Ying-Juei

Accounting Manager:Wang, YenLi

Tecom Co., LTD. and Subsidiaries CONSOLIDATED STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2023 AND 2022

Unit: NT thousand

Cash flows from operating activities:
Income (loss) before income tax
Adjustments for:
The profit or loss items:
Depreciation expenses

Amortization expenses

Expected credit losses (reversal gains)

Net gains on financial assets at fair value
through profit or loss

Interest expense

Interest income

Dividend income

Share of profit of associates accounted for using
equity method

Losses on disposal of property, plant and
equipment

Gains on disposal of investments

Gains arising from lease modification

Changes in operating assets and liabilities
Changes in operating assets
Financial assets at fair value through profit
or loss
Contract assets
Notes receivable
Notes receivable from related parties
Accounts receivable
Accounts receivable from related parties
Other receivables
Other receivables from related parties
Inventories
Prepayments
Other current assets
Changes in operating liabilities
Contract liabilities
Notes payables
Accounts payables
Accounts payables to related parties
Other payables
Provisions for liabilities
Other current liabilities
Accrued pension liabilities
Cash
inflows
generated
from
operations
Interest received
Dividend received
Interest paid
Income tax paid
Net cash inflows from operating activities

Notes
2023
2022
( $ 14,409 ) $ 41,080
6(8)(9)
(26)
24,713
23,553
6(10)(26)
2,252
2,565
12(2)
142 (
62 )
6(2)(24)
(
474 ) (
1,699 )
6(25)
22,152
24,106
6(22)
(
11,939 ) (
4,838 )
6(23)
(
6,806 ) (
14,747 )
6(7)
(
2,511 ) (
2,627 )
6(24)
-
4
6(24)
- (
80 )
6(24)
- (
32 )
(
3,463 )
64,842
(
10,091 )
-
9,130
24,740
1,820 (
2,111 )
23,029 (
3,212 )
3,958
5,625
(
7,957 )
613
(
5 )
75,307
13,992
(
63 )
10,688
(
670 ) (
1,082 )
699
428
(
241 ) (
653 )
(
41,203 ) (
70,189 )
(
763 ) (
6,260 )
3,368 (
2,125 )
1,644 (
895 )
318
50
(
8,634 ) (
8,803 )
59,303
92,871
12,761
3,620
7,941
16,260
(
22,607 ) (
23,752 )
(
5,943 ) (
6,898 )
51,455
82,101

(continued)

Tecom Co., LTD. and Subsidiaries CONSOLIDATED STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2023 AND 2022

Cash flows from investing activities:

Decrease in financial assets at amortized cost
Proceeds from disposal of financial assets at
fair value through other comprehensive income
Acquisition of property, plant and equipment

Proceeds from disposal of property, plant and
equipment
Acquisition of intangible assets
Proceeds
from
disposal
of
investments
accounted for using equity method
Increase (decrease) in guaranteed deposit paid
Acquisition of intangible assets

Net cash flows generated from investing
activities
Cash flows from financing activities:
Increase in short term borrowings

Decrease in short term borrowings

Repayments of long-term borrowings

Increase in guaranteed deposit received

Repayment of principal portion of lease liabilities

Cash dividend paid to minority shareholders
Net cash flows used in in financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the year

Cash and cash equivalents at the end of the year

Unit: NT thousand
Notes
2023
2022
$ 40,437 $ 39,467
263,488
44,506
6(30)
(
11,891 ) (
12,362 )
-
4
(
982 ) (
1,854 )
-
80

(
683 )
824
6(10)
290,369
70,665
2,964,000
1,973,492
6(31)
(
3,395,000 ) (
1,741,604 )
6(31)
- (
280,000 )
6(31)
763
1,008
6(31)
(
12,434 ) (
12,681 )
6(31)
(
20,780 ) (
11,333 )
(
39 )
-
(
463,490 ) (
71,118 )
(
121,666 )
81,648
6(1)
265,304
183,656
6(1)
$ 143,638 $ 265,304

`【` Appendix 4 `】`

Tecom Co.,Ltd.

2023 Deficit Compensation Statement

(Unit: NTD ＄ )

	(Unit: NTD`＄`)
Items	Total
Beginning accumulated deficit Disposition of equity instruments measured at fair value through other comprehensive income Determination of re-measurement of benefit plan 2023 Net Loss After Tax	(124,692,986) 44,351,231 129,449 (36,094,064)
Deficit yet to be compensated	(116,306,370)

Chairman: Liu, Chao-Kai General Manager: Tien, Ying-Juei Accounting Supervisor: Wang, Yen-Li

`【` Appendix 5 `】`

List of Director Candidates

	List	of Director Candidates
Candidat e Category	Name	Education	Number of Shares Held (Unit: Share)
Director	LIU, CHAO-KAI	PhD in Electrical Engineering, University of Illinois, United States Bachelor of Electrical Engineering, National Taiwan University Chairman, Dongxun Co., Ltd. Chairman, TECO Electric Co., Ltd. ManagingDirector,TECO Electric Co.,Ltd.	1,177,340
Director	YANG , SHIH- CHIEN	PhD in Electrical Engineering, Northwestern University Councilor, Executive Yuan and Convener of the Executive Yuan Science and Technology Advisory Board Parliamentary Secretary, Ministry of Economic Affairs Director, Industrial Development Administration, Ministry of Economic Affairs Chairman, Global Strategic Management Consulting Co., Ltd.	0
Director	TECO Electric Co., Ltd. Representative: SUN, CHIEN-JUNG	PhD, Department of Power Mechanical Engineering, National Tsing Hua University Master's degree, Department of Mechanical Engineering, National Taiwan University Electromechanical Systems and Automation Business Group, TECO Electric Co., Ltd. Director, Zero Carbon Mechanical and Electrical Systems Development Division Vice President, Fusheng Co., Ltd. Senior Engineer,Nanya TechnologyCo.,Ltd.	19,228,898
Director	TECO Electric Co., Ltd. Representative: PENG,CHI-TSENG	Master of Science in Telecommunications, University of Pittsburgh	19,228,898

Candidat e Category	Name	Education	Number of Shares Held (Unit: Share)
		EMBA, National Chengchi University General Manager, Air and Intelligent Life Business Group of TECO Electric Co., Ltd. Chairman, Dongsheng Electric Co., Ltd. General Manager, Taiwan Home Delivery Co., Ltd. Assistant Vice President, Tivoli SW (greater China region) of IBM
Director	TECO Electric Co., Ltd. Representative: LIU, AN-BING	Master of Industrial Management, National Taiwan University of Science and Technology Director of Financial Management Center, TECO Electric Co. Ltd. Deputy General Manager, Shanghai Dongyuan Deco Co., Ltd. General Manager, TECO TURKEY A.S. Chief Financial Officer, Motovario SpA	19,228,898
Director	TECO Electric Co., Ltd. Representative: TIEN, YING-JUEI	Master of Business Administration (EMBA), School of Economics and Management, Tsinghua University, Beijing Master of Laws, Tamkang University, Institute of European Studies, School of International Relations General Manager, Dongxun Co., Ltd Advisor, Taiwan-Israel International Information Security and Technology Exchange Association Global Deputy General Manager, Business and Marketing Department of Zhaoqin Technology Co.,Ltd.	19,228,898
Independe nt Director	CHEN, SHUI-LIEN	PhD in Business Administration, National Central University Master of Business Administration, National Cheng Kung University Professor, Department of Management Science, Tamkang University Head, Department of Management Science, Tamkang University	0

Candidat e Category	Name	Education	Number of Shares Held (Unit: Share)
Independe nt Director	LIN, CHIANG- LIANG	Ph. D., Department of Accounting, National Chengchi University Professor, Accounting Department, Chung Yuan University Consultant, Evaluation and Forensic Accounting Committee of the National Federation of Certified Public Accountant Associations of the R.O.C Member, North District, Internal Revenue Service Review Committee of the Ministry of Finance Member, Common Government Accounting Standards Review Committee of the Directorate General of Budget,Accountingand Statistics	0
Independe nt Director	LEE, FENG AO	Master of Laws (Mainland China Law), Soochow University Bachelor of Laws, Department of Law, Taipei University Director, Kung Won Law Firm Director, Chunshu Technology Co., Ltd. Director, Tung Foundation Chairman, Taiwan Toy and Children's Article Manufacturers Association	0

`【` Appendix 6】

Proposal to lift directors’ non-competition restrictions

Appendix 6】 Proposal	to lift directors’ non-competition restrictions
Name	Current Role in Other Companies
LIU, CHAO-KAI	Chairman, GDH CO., LTD. Director, Ericsson Taiwan Ltd. Director, ANTAI Technology Co., Ltd (Xiamen) Director, Motovario S.p.A (MTV) Director, Eagle Holding Co. Director,Tecocapital Investment(Samoa)Co.,Ltd.
YANG, SHIH- CHIEN	Chairman, Global Strategic Management Consulting Co., Ltd. Director, Yageo Corp. Independent Director, Tuokai Industrial Co., Ltd. Director, Shentong Computer Co., Ltd. Independent Director, Nanzi Electronics Co., Ltd. Independent Director, Natural Beauty Bio-Technology Ltd (Hong Kong)
TECO Electric Co., Ltd. Representative: SUN, CHIEN-JUNG	Electromechanical Systems and Automation Business Group, TECO Electric Co., Ltd. Director, Zero Carbon Mechanical and Electrical Systems Development Division Director of InSynerger Technology Co., Ltd. Director, Anhua Mechanical and Electrical Engineering Co., Ltd. Director, JCDecaux Singapore Thailand Branch Director, JCDecaux Singapore Malaysia Branch Director, Qingdao Dongyuan Precision Electromechanical Co., Ltd. Director, Teco Electric Motors Africa Pty Ltd.
TECO Electric Co., Ltd. Representative: PENG, CHI-TSENG	Chairman, Dongsheng Electric Co., Ltd. Chairman, Jiangxi Dongcheng Air-Conditioning Equipment Co.,Ltd. Chairman, Dongguan Dongcheng Air Conditioning Equipment Co., Ltd. Chairman, Nanchang Dongyuan Motor Co., Ltd. General Manager, Air and Intelligent Life Business Group of TECO Electric Co., Ltd. General Manager, ANTAI Technology Co., Ltd (Xiamen) General Manager, Taiwan Home Delivery Co., Ltd. Director, Anyue International Co., Ltd. Director, Green Power Recycling Co., Ltd. Director, Kunlin Refrigeration Machinery Co., Ltd. Director, Shihua Development Co., Ltd. Director, Yuantong Communication Co., Ltd. Director of FETC International Co.,Ltd. Director of TECO Smart Technologies Co., Ltd. TAC Director,JCDecaux Australia Limited

Name	Current Role in Other Companies
	3C Director, TECO Director, ECO Technology（Vietnam）Co.，Lt Chairman, Anyue Australia Director, TECO Elektrik Turkey A.Ş. (TET)
TECO Electric Co., Ltd. Representative: LIU, AN-BING	Director of Financial Management Center, TECO Electric Co. Ltd. Deputy General Manager, Shanghai Dongyuan Deco Co., Ltd. Supervisor, Dongan Investment Holding Co. Ltd. Director, Teco International Investment Co., Ltd. Director of Antai International Trade Co., Ltd. Supervisor, Dongdai Co., Ltd. Supervisor, Anhua Mechanical And Electrical Equipment Co., Ltd. Director, Motovario SpA
LIN, CHIANG- LIANG	Independent director, Member and Convener of the Audit Committee, and Member of the Salary and Remuneration Committee of Jingtuo Technology Co., Ltd. Independent director, Member and Convener of the Audit Committee, Member and Convener of the Salary and Remuneration Committee of Ruiyun Technology Co., Ltd. Independent director, Member and Convener of the Audit Committee, Member and Convener of the Salary and Remuneration Committee of Yongzhi Electronics Co., Ltd.
LEE, FENG AO	Independent Director & Member of the Audit Committee and a Member of the Salary and Remuneration Committee of Black Pine Ltd. Director, Chunshu Technology Co., Ltd.

`【` Annex 1 `】`

Tecom Co.,Ltd Articles of Incorporation

Chapter 1 General Principles

Article 1: The Company is organized in accordance with the provisions of the Company Act and is named Tecom Co.,Ltd
Article 2: The business operations of the Company are as follows:
CC01060 - Manufacture of wired communication machinery and equipment
CC01070 - Manufacture of wireless communication machinery and equipment
CC01080 - Manufacture of electronic components
CC01100 - Manufacture of telecommunication control radio frequency equipment
CC01110 - Manufacture of computers and peripheral equipment
CC01990 - Manufacture of other electrical and electronic machinery and equipment
E701010 - Telecommunications engineering services
F401010 - International trade
F601010 - Intellectual property rights services
I301030 - Electronic information supply services
CB01990 - Manufacture of other machinery
F113020 - Wholesale of electrical appliances (limited to non-local operations)
F213010 - Retail of electrical appliances (limited to non-local operations)
(A) 1.Centralized User Switching System (CRCS).
1. Communication network systems.
2. Data communication networks.
3. Private Automatic Branch Exchange (PABX) systems for users.
4. Wireless communication equipment.
5. Fiber optics, cables, and components.
6. Professional microcomputers and their peripherals.
7. Switching DC power supply equipment.
8. Microwave communication equipment.
9. Aerospace communication and control systems.
10. Communication and control equipment for rail vehicles.
11. Tester equipment for communication circuit users, composite terminal boards, fuses, remote telemetry interface isolators for telephone user loops, and line facility safety monitoring management systems.
Research and development, design, manufacturing, sales, promotion, and after-sales service for the above items and their peripherals.
(B) Engage in import and export trade related to the company's business.
Article 3:The Company may be guaranteed by related enterprises as required for business needs.
Article4: For business purposes, our company authorizes the board of directors to make investments in related businesses, without being subject to the restrictions set forth in Article 13 of the Company Law.
Article 5:The company has its headquarters located in the Hsinchu Science Park in Taiwan, and may establish branch offices or representative offices domestically or abroad when necessary, subject to the approval of the board of directors and relevant authorities.

Chapter 2 Shareholdings

Article 6: The total capital of the Company is set at NT$9,450,000,000, divided into 945,000,000 shares with a par value of NT$10 per share. The aforementioned shares may include the issuance of preferred shares. The unissued shares are authorized by the Board of Directors to be issued as needed.
Within the total capital mentioned above, NT$200,000,000 is reserved for the issuance of employee stock options or convertible bonds with warrants. The Board of Directors is fully authorized to handle the issuance amount and method according to business needs.
Article 6-1: Convertible Preferred Stocks (Class A)
The rights, obligations, and other terms and conditions of the Convertible Preferred Stocks (Class A) of our company are as follows:
1.If the company has profits after paying taxes, compensating for losses, and setting aside legal surplus reserves according to the law, the remaining profits will be used to pay dividends to the Convertible Preferred Stocks (Class A) first.
2.The dividend rate for the Convertible Preferred Stocks (Class A) is set at 3% per annum based on the issue price, and the dividend for the Convertible Preferred Stocks (Class A) cannot be accumulated.
3.In the year when the aforementioned dividend is received, the Convertible Preferred Stocks (Class A) may participate in the distribution only if the dividend for the ordinary shares exceeds 3% of the face value. Before conversion, the Convertible Preferred Stocks (Class A) cannot participate in the distribution of profits or capital reserves of ordinary shares.
4.The term of the Convertible Preferred Stocks (Class A) is five years. After the expiration of the term, if the shareholder does not convert the stocks during the conversion period, the dividend for the Convertible Preferred Stocks (Class A) will be changed to "3% annual interest rate and cumulative".
5.The Convertible Preferred Stocks (Class A) shareholders have no right of redemption.
6.From two years after the issuance of the Convertible Preferred Stocks (Class A), except during the period of suspension of transfer according to the law, the shareholder of the Convertible Preferred Stocks (Class A) may apply for conversion to the issuing company at any time, and every one Convertible Preferred Stocks (Class A) can be converted into one ordinary share.
7.The order and proportion of distribution of residual property by the Convertible Preferred Stocks (Class A) shareholders are the same as those of the ordinary shares.
8.The Convertible Preferred Stocks (Class A) shareholders have the same voting rights, election rights, and eligibility for election as the ordinary shareholders at the ordinary shareholders' meeting.
9.When the company issues new shares in cash, the Convertible Preferred Stocks (Class A) shareholders have the same priority rights of subscription as the ordinary shareholders.
10.If the company reduces its capital and the stocks are reduced proportionally according to the shareholdings of the shareholders, the dividend rights of the Convertible Preferred Stocks (Class A) accumulated before the reduction of capital will not be eliminated due to the reduction of capital, and the dividends after the reduction of capital will be accumulated based on the reduced number of stocks.
Article 7:The stocks of our company are mainly registered stocks and may be exempted from printing. They are issued or registered in accordance with the law.
Article 8: The transfer of stock ownership and name change shall be suspended within 60 days prior to the annual general meeting of shareholders, 30 days prior to the extraordinary general meeting of shareholders, or 5 days prior to the record date for the distribution of dividends or other benefits as determined by the company.

Chapter 3 Shareholder’s Meeting

Article 9:The shareholders' meeting consists of two types: the regular meeting and the special meeting. The regular meeting is held once a year and is convened within six months after the end of each fiscal year by the board of directors in accordance with the law. The special meeting is convened when necessary in accordance with the law.
When the shareholders' meeting is convened, it may be held through video conferencing or other means announced by the competent authority.
Article 10:When a shareholder is unable to attend a shareholders' meeting due to unavoidable circumstances, they may issue a power of attorney issued by the company, which specifies the scope of authorization and is signed or stamped by the shareholder to authorize a proxy to attend on their behalf. Except for trust enterprises or share service agencies approved by the securities regulatory authority, if one person is authorized by two or more shareholders, their voting rights shall not exceed 3% of the total number of issued shares. Any excess voting rights shall not be counted.
Article 11:Each shareholder of our company, except as otherwise provided by law, shall have one voting right per share; provided that those subject to restrictions or those who are not entitled to exercise voting rights under the provisions of Article 179, paragraph 2 of the Company Act are not subject to this restriction.
Article 12:When the shareholders' meeting is held, the convener with the legal right to convene the meeting shall act as the chairperson. When there are two or more conveners, they should elect one person to serve as the chairperson.
Article 13:The resolution of the shareholders' meeting shall be passed by the affirmative vote of the holders of more than half of the total issued shares represented by the shareholders present in person or by proxy at the meeting, unless otherwise provided by the Company Act.

Chapter 4 Board of Directors and Audit Committee

Article 14:The company has a board of directors consisting of nine members who serve a three-year term and are elected by the shareholders' meeting from among those who have legal capacity, with the possibility of consecutive re-election. The election of directors follows a candidate nomination system in accordance with Article 192-1 of the Company Act. Of the total number of directors, three are independent directors, and an audit committee is established in accordance with the law, which is composed of all independent directors. Matters related to the exercise of supervisory powers under the Company Act, Securities and Exchange Act, and other legal regulations are handled by the audit committee. The number of members, terms, rules of procedure, and resources to be provided by the company when exercising its duties shall be separately stipulated in the audit committee's organizational charter in accordance with the law.
During their term, the directors may purchase liability insurance in accordance with the law for the compensation responsibility they should bear in the execution of their business scope. The remuneration of all directors of the Company shall be determined by the board of directors based on their degree of participation in the company's operations and the value of their contributions, taking into account the domestic industry standards.
Article 15:The board of directors organizes the board of directors and executes all business of the company in accordance with laws, regulations, and resolutions of the shareholders' meeting. According to the Company Act, the directors elect one person as the chairman to represent the company. When the chairman is on leave or unable to exercise his/her duties due to reasons, one director shall be designated by the chairman to act as a proxy. If not designated, the directors shall elect one person to act as a proxy.

Article 15-1:The board of directors of the Company may be notified of its meetings by written notice, fax, or email.
Article 16:Except for matters that require a resolution of the shareholders' meeting in accordance with the law, all major policies and operational matters of the Company shall be resolved and implemented by the board of directors.
Article 17:The Board of Directors shall be convened by the Chairman of the Board unless convened pursuant to Article 203 or Article 203-1 of the Company Law, and the Chairman shall act as the presiding officer. In the event that the Chairman is unable to perform his/her duties due to leave of absence or other reasons, he/she shall designate one director to act on his/her behalf. In the absence of such designation, the directors shall elect one director to act on his/her behalf.
Article 18:The decisions of the board of directors require the presence of a majority of the directors and must be approved by a majority of the directors present, unless otherwise provided by law. In case a director cannot attend a board meeting, they may appoint another director to attend on their behalf through a written authorization with a specific scope of authorization. The authorized director may only represent one absent director.The minutes of the board meeting should be signed or stamped by the chairman and distributed to all directors within the prescribed time limit.
Article 19:(omitted)

Chapter 5 General Manager

Article 20:The company has one General Manager and several Deputy General Managers, who are appointed and dismissed by the Board of Directors in accordance with Article 29 of the Company Law.

Chapter 6 Accounting

Article 21:The fiscal year of the company starts from January 1st and ends on December 31st each year, and the financial statements will be prepared after the end of the fiscal year.
Article 22:The company shall prepare the following documents after the end of each fiscal year, which shall be audited by the audit committee and submitted to the regular shareholders' meeting for approval upon the board's approval:
1.Business report;
2.Financial statements;
3.Proposal for surplus earnings distribution or loss offset.
Article 23:According to the profit status of the current year, the company should allocate 1% to 10% of the profit to distribute employee compensation; director compensation should not exceed 5%. The recipients of employee compensation may include employees of subsidiary companies who meet certain conditions. However, if the company still has accumulated losses, they should be compensated first.
The distribution ratio of employee and director compensation mentioned in the preceding paragraph, as well as the decision to distribute employee compensation in the form of stocks or cash, shall be resolved by the board of directors with the approval of at least two-thirds of the directors present and the majority of the directors attending the meeting, and shall be reported to the shareholders' meeting.
The profit status of the current year referred to in the preceding paragraph refers to the profit before tax for the current year after deducting employee and director compensation.
Article 24:If the company has profits in its annual final accounts, they shall be distributed in the following order:
1.Payment of taxes.

2.Compensation of accumulated deficit.
3.Reservation of 10% as legal reserve. However, if the legal reserve has reached the total capital amount, this requirement does not apply.
4.Allocation or reversal of special surplus reserves in accordance with relevant laws and regulations.
5.Distribution of special stock dividends.
6.The remaining balance shall be added to the undistributed earnings of the previous year and distributed as dividends to shareholders. The Board of Directors shall prepare a profit distribution plan. If the plan involves cash dividends, the Board of Directors shall be authorized to make a special resolution for distribution and report it to the shareholders' meeting.
The dividend distribution policy of the company should take into account factors such as the current and future investment environment, capital requirements, domestic and international competition, and capital budgeting, while balancing shareholder rights and interests and the long-term financial planning of the company. The proportion of cash dividends in the above-mentioned shareholder dividends for each year should not exceed 50%, but must be no less than 5%.

When the company has no deficit, it may distribute all or part of the legal reserve and the capital surplus that complies with the regulations of the Company Law in the form of new shares or cash. If the legal reserve is to be distributed in the form of new shares or cash, the amount shall not exceed 25% of the paid-in capital.

If the company distributes all or part of the legal reserve and the capital surplus that complies with the regulations of the Company Law in the form of cash in accordance with the above regulations, the Board of Directors shall be authorized to make a special resolution for distribution and report it at the latest shareholder meeting.

Article 25:Any matters not stipulated in this Articles of Incorporation shall be handled in accordance with the provisions of the Company Act.
Article 26:If there are any matters not covered in this Articles of Incorporation, a provisional shareholders' meeting may be called to make and implement amendments in accordance with the Company Law.
Article 27:This chapter was established on September 5th, 1980. The first revision was made on March 16th, 1981.

The second revision was made on November 1st, 1981. The third revision was made on December 29th, 1981. The fourth revision was made on April 19th, 1982. The fifth revision was made on January 4th, 1983. The sixth revision was made on March 30th, 1985. The seventh revision was made on April 30th, 1986. The eighth revision was made on April 30th, 1987. The ninth revision was made on June 15th, 1987. The tenth revision was made on November 5th, 1987. The eleventh revision was made on November 25th, 1988. The twelfth revision was made on June 30th, 1989. The thirteenth revision was made on November 1st, 1989. The fourteenth revision was made on April 4th, 1990. The fifteenth revision was made on March 22nd, 1991. The sixteenth revision was made on April 18th, 1992. The seventeenth revision was made on April 28th, 1992. The eighteenth revision was made on June 8th, 1993. The nineteenth revision was made on June 3rd, 1994. The twentieth revision was made on June 6th, 1995.

The twenty-first revision was made on June 14th, 1996. The twenty-second revision was made on May 29th, 1997. The twenty-third revision was made on May 26th, 1998. The twenty-fourth revision was made on May 20th, 1999. The twenty-fifth revision was made on May 11th, 2000. The twenty-sixth revision was made on June 11th, 2002. The twenty-seventh revision was made on June 9th, 2003. The twenty-eighth revision was made on June 8th, 2004. The twenty-ninth revision was made on June 9th, 2006. The thirtieth revision was made on June 13th, 2008. The thirty-first revision was made on June 28th, 2011. The thirty-second revision was made on June 22nd, 2012. The thirty-third revision was made on October 12th, 2012. The thirty-fourth revision was made on June 26th, 2014. The thirty-fifth revision was made on June 22nd, 2016. The thirty-sixth revision was made on June 19th, 2017. The thirty-seventh revision was made on June 12th, 2018. The thirty-eighth revision was made on June 18th, 2020. The thirty-ninth revision was made on July 22nd, 2021. The fortieth revision was made on June 15th, 2022

`【` Annex 2 `】`

Tecom Co.,Ltd

Rules of Procedure for Shareholder Meetings

Date: June 15, 2022 Passed by the 2022 Annual Shareholders' Meeting.

Article 1: The shareholders' meeting of the Company shall be conducted in accordance with these Rules, except as otherwise provided by laws or the Company's Articles of Incorporation. Any change to the method of convening the shareholders' meeting of the Company shall be resolved by the Board of Directors and made no later than the issuance of the notice for the shareholders' meeting.
Article 2: Shareholders or their proxies attending the meeting shall submit a sign-in card to represent their attendance. The attendance and voting at the shareholders' meeting shall be based on the shareholding, with the number of shares held by the attending shareholder counted according to the sign-in card and the number of shares reported on the video conference platform, plus the number of shares exercised by written or electronic voting.
Article 3: The chairman shall announce the opening of the meeting and the number of shares without voting rights and the number of shares present. However, if less than half of the total issued shares have representatives in attendance, the chairman may announce a postponement of the meeting, which may be postponed twice for a total of no more than one hour. If the quorum is still not met after two postponements, but shareholders representing more than one-third of the total issued shares are present, the chairman shall announce the adjournment of the meeting. If the quorum is still not met after two postponements and the number of shares represented is more than one-third of the total issued shares, a false resolution may be passed in accordance with Article 175, Paragraph 1 of the Company Act, and the false resolution shall be notified to all shareholders for another shareholders' meeting to be convened within one month. In the case of a video conference shareholders' meeting, shareholders who wish to attend the meeting via video conference should register with the company again. If the number of shares represented reaches more than half of the total issued shares before the end of the meeting, the false resolution shall be resubmitted for voting in accordance with Article 174 of the Company Act.
Article 3-1: The location of the shareholders' meeting shall be the company's location or a location that is convenient for shareholders to attend and suitable for holding the meeting. The meeting shall not start earlier than 9 a.m. or later than 3 p.m. When the company convenes a video conference shareholders' meeting, it is not subject to the restrictions of the preceding paragraph regarding the location of the meeting.
Article 4: If the shareholders' meeting is convened by the board of directors, the agenda shall be determined by the board of directors, and the meeting shall proceed in accordance with the scheduled agenda, which shall not be changed without the resolution of the shareholders' meeting.
If the shareholders' meeting is convened by a person other than the board of directors with the right to convene such a meeting, the provisions of the preceding paragraph shall apply.
Before the agenda set forth in the preceding two paragraphs is concluded (including any temporary motions), the chairman may not adjourn the meeting without a resolution.
After the meeting is adjourned, the shareholders may not elect another chairman to continue the meeting at the same location or find another venue.
Article 4-1: The company shall record the entire process of shareholder registration, meeting proceedings, and vote counting continuously and without interruption by audio and video recording from the start of shareholder registration. The audio and video recordings should be kept for at least one year. However, if a shareholder initiates litigation in accordance with Article 189 of the Company Act, they should be kept until the litigation is concluded.
When the company's shareholder meeting is held through a video conference, the registration, sign-in, inquiry, voting, and vote counting data of the shareholders should be recorded and saved. The entire process of the video conference should also be recorded continuously and without interruption by audio and video recording.

The company should keep the data and recordings mentioned above properly during the retention period and provide the recordings to the designated party responsible for managing the video conference affairs. When the company's shareholder meeting is held through a video conference, the backstage operations of the video conference platform should also be recorded by audio and video.

Article 4-2: If the shareholders' meeting is convened by the board of directors, the chairman shall be the chairman of the board. If the chairman of the board is absent or unable to perform his or her duties for any reason, he or she shall designate one director as a proxy. If the chairman fails to designate a proxy, the directors shall elect one from among themselves.
If the shareholders' meeting is convened by a person other than the board of directors, the chairman shall be appointed by that person. If there are two or more persons with the power to convene the meeting, they shall elect one chairman from among themselves.
The company may appoint a lawyer, accountant, or other relevant personnel to attend the shareholders' meeting as a non-voting attendee.
When the company convenes a virtual shareholders' meeting, the chairman and the record keeper shall be located in the same place within the country, and the chairman shall announce the address of that location at the start of the meeting.
Article 5: Before attending the shareholders' meeting, shareholders must first fill out a speaking slip stating the topic of their speech, shareholder account number (or attendance certificate number) and account name, and the order of speaking shall be determined by the chairman. Shareholders who only submit speaking slips without speaking shall be deemed as not having spoken. If the content of the speech does not match the information on the speaking slip, the content of the speech shall prevail. During the shareholders' meeting, other shareholders may not speak or interfere without the consent of the chairman and the speaking shareholder. Any violation shall be stopped by the chairman. After a shareholder has spoken, the chairman may personally or designate relevant personnel to respond.
When the company's shareholders' meeting is held via video conference, shareholders who participate via video may ask questions in writing on the video conference platform after the chairman announces the start of the meeting until the adjournment of the meeting. Each question on each agenda item may not exceed two times, and each time may not exceed 200 words.
Questions that do not violate the rules or exceed the scope of the agenda should be disclosed on the video conference platform of the shareholders' meeting for public knowledge.
Article 6: When a legal person attends a shareholders' meeting as a proxy, the legal person may only appoint one representative to attend.
When a legal person shareholder appoints two or more representatives to attend a shareholders' meeting, only one of them may speak on the same agenda item.
Article 7: Each shareholder may speak on the same agenda item no more than twice without the consent of the chairperson, and each time may not exceed five minutes.
Article 8: If a shareholder violates the provisions of the preceding article or exceeds the scope of the agenda during their speech, it shall be considered as not having spoken, and the chairperson may also stop them from speaking.
Article 9: The chairman should provide sufficient explanation and discussion opportunities for the agenda, amendments or interim motions proposed by the shareholders. When he or she deems that the discussion has reached the stage for voting, he or she may declare the discussion closed and proceed to the vote.
Article 10: The inspectors and vote counters for voting on resolutions shall be appointed by the chairman, but the inspectors must be shareholders. The voting results shall be announced on the spot and recorded.
For shareholders who participate in the meeting through a video conference platform, after the chairman announces the meeting, they shall vote on various resolutions and election proposals through the video conference platform and must complete the voting before the chairman announces the end of the voting. Failure to do so shall be deemed as abstention.
When the company's shareholder meeting is held by video conference, the voting and election results shall be announced after the chairman announces the end of the voting.
For shareholders who have registered to attend the meeting by video conference and wish to attend the physical shareholder meeting in person, they must cancel their registration in the same manner

as the registration two days before the meeting; those who cancel after the deadline may only attend the shareholder meeting by video conference.

Shareholders who exercise their voting rights in writing or electronically and participate in the shareholder meeting via video conference, except for temporary motions, shall not exercise their voting rights on the original resolution or propose amendments to the original resolution or vote on amendments to the original resolution.
Article 11: The voting on a proposal shall be passed by the affirmative vote of more than half of the voting rights represented at the shareholders' meeting, unless otherwise provided by the Company Act or the Articles of Incorporation. When voting, the chairman or his designated personnel shall announce the number of voting rights of the attending shareholders, and the shareholders shall vote. The results of the shareholders' agreement, opposition and abstention shall be entered into the public information observation station on the same day after the shareholders' meeting is held. When the shareholder meeting of the Company is held via video conference, the results of the voting on each proposal and the election shall be disclosed on the video conference platform of the shareholder meeting immediately after the voting is completed in accordance with the regulations, and shall be disclosed continuously for at least fifteen minutes after the chairman announces the adjournment of the meeting.
Article 11-1: If there are amendments or substitute proposals for the same agenda item, the chairman shall determine the order of voting for all proposals together with the original proposal. If one of the proposals has been passed, the other proposals shall be deemed to be rejected, and there is no need for further voting.
Article 12:During the meeting, the chairman may, at his discretion, announce a break and adjourn the meeting.
Article 13:During a meeting, in the event of an air raid alert, the meeting will be stopped and everyone should evacuate. The meeting will resume one hour after the alert has been lifted. In the case of a virtual shareholders' meeting, the chairman should announce at the beginning of the meeting that if there is a natural disaster, incident, or other force majeure that causes a disruption in the virtual meeting platform or participation for more than 30 minutes before the chairman announces adjournment, the meeting shall be postponed or continued within five days and shall not be subject to Article 182 of the Company Law, except for the situation provided in Item 4 of Article 44-2 of the Regulations Governing the Handling of Shareholder Services of a Public Company that does not require postponement or continuation of the meeting.
In the case of a virtual-assisted shareholders' meeting, if the meeting cannot continue due to the circumstances described above and the total number of shares represented at the meeting still meets the statutory quorum after deducting the shares represented by virtual attendance, the meeting shall continue without being subject to the previous provisions regarding postponement or continuation of the meeting.
Article 14: The chairman may direct the inspector(s) (or security personnel) to assist in maintaining order at the meeting venue. When the inspector(s) (or security personnel) are present to assist in maintaining order, they should wear a badge with the words "Inspector" on it.
Article 15: Any matters not specified in this rule shall be handled in accordance with the Company Act, the Company's Articles of Incorporation, and relevant laws and regulations.
Article 16: This rule shall be effective upon its adoption by the shareholders' meeting and any amendments thereto shall also be effective in the same manner.

`【` Annex 3 `】`

Tecom CO.,Ltd

Rules for Election of Directors

Article 1: The company's election of directors shall be conducted in accordance with the provisions of this method.
Article 2: Each share in the company shall have the right to vote in the election of directors, adopting a cumulative voting system, unless otherwise provided in the company's articles of incorporation, and the number of directors to be elected shall be equal to the number of shares held by the shareholder. The shareholder may either cast all of their votes for one candidate or divide their votes among several candidates in the election.
Article 3: The election of directors of this company shall be conducted in accordance with the candidate nomination system in accordance with Article 192-1 of the Company Law. The shareholders’ meeting shall select the directors from the candidate list except as otherwise provided in the company's articles of incorporation and related laws and regulations.
Each share shall have the right to vote for the same number of directors as there are to be elected, unless otherwise provided by law. The shareholders may either vote for a single candidate or divide their votes among several candidates.
The election of directors shall be conducted by the shareholders' meeting from among those who have legal capacity, and the number of directors elected shall be determined in accordance with the provisions of the company's articles of incorporation based on the number of votes received. When electing directors, independent directors and non-independent directors shall be elected together, but the number of seats shall be calculated separately for independent directors and general directors. The election of independent directors shall be conducted in accordance with the " Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies" and other relevant laws and regulations.
If two or more candidates receive the same number of votes and exceed the prescribed number of seats, the winner shall be determined by drawing lots among those who received the same number of votes. If the candidate is absent, the chairman shall draw lots on his or her behalf.
Article 4: Before the vote counting begins, the chairman shall appoint several scrutineers and vote counters with shareholder status to perform relevant duties. Ballot boxes are prepare by the board of directors, and the votes will be inspected by scrutineers in public before voting.
Article 5: The board of directors should prepare candidate votes equivalent to the number of directors to be elected, he will fill in the number of votes and distribute them to the shareholders in the meeting. The candidate’s names may be replaced by the attendance card number printed on the candidate ticket.
Article 6: The ballot shall be considered invalid under any of the following circumstances:
1.Ballots not prepared by the board of directors.
Blank ballot papers in the ballot box.
3.Illegible handwriting that cannot be identified.
Inconsistent list of candidates after verification.
Other words included in addition to filling in the number of votes.
Article 7: After the voting is complete, the ballots will be counted on the spot and the results will be announced by the chairman.
Article 8: The elected directors shall, within five days from the date of their election, submit the original letter of consent to the company.
Article 9: Unspecified matters in these regulations shall be handled in accordance with the Company Act and relevant laws and regulations.
Article 10: This regulation shall come into force after being passed by the shareholders' meeting, and the same shall apply to any amendments made thereafter.
Article 11: This regulation was passed by the shareholders' meeting on March 22, 1991. The first revision was passed by the shareholders' meeting on April 28, 1992. The second revision was passed by the shareholders' meeting on June 11, 2002. The third revision was passed by the shareholders' meeting on June 26, 2014. The fourth revision was passed by the shareholders' meeting on June 19, 2017. The fifth revision was passed by the shareholders' meeting on June 16, 2023.

`【` Annex 4 `】`

Tecom Co., Ltd. Ownership of Shares by Directors

The actual paid-in capital of the company is NT$302,719,290, and the total number of shares issued is 30,271,929.
According to Article 2 of the "Rules and Review Procedures for Director and Supervisor Share Ownership Ratios at Public Companies", if there are two or more independent directors elected, the shareholding percentage of all directors excluding independent directors is reduced to 80% based on the calculation of the ratio. All directors of the company are required by law to hold a total of 3,600,000 shares.
As of the record date for the shareholders' meeting, the individual and total shareholding status of the directors is shown in the following table:

			04/20/2024
			Share
		Ownership
Title	Name/Legal name		ownershi
		of shares
			pratio

President	Liu,Chao-Kai	1,177,340	3.89%
Director	TECO Electric Machinery Co Ltd Representative: Chiu, Chwen-Jy	19,228,898	63.52%
Director	TECO Electric Machinery Co Ltd Representative: Lin, Hong-Hsiang
Director	TECO Electric Machinery Co Ltd Representative: Chen,Kuo-Rong
Director	TECO Electric Machinery Co Ltd Representative: Sun, Chien-Jung
Director	Yang ,Shih-Chien	0	0.00 %
Independ ent Director	Chen, Hai-Ming	0	0.00%
Independ ent Director	Lin , Chiang-liang	0	0.00%
Independ ent Director	Lee, Feng-Ao	0	0.00%
Total of all directors		20,406,238	67.41%

AI assistant

TECOM — AGM Information 2024

52005_rns_2024-06-26_53d57000-416a-4e0f-ad77-2ddeed1f5dbe.pdf

Table of Contents

Tecom Co., Ltd.

Tecom Co., Ltd.

Procedure for the 2024 Annual Meeting of Shareholders

2.Chairperson Remarks

3. Reports on Company Affairs

4. Proposals

5. Election Matters

6. Other Proposals

7. Questions and Motions

8. Adjournment

Management Presentations

Proposals

Election Matters

Other Proposals

Questions and Motions

Adjournment

【 Appendix 1 】

Business Report

3. Research Development Expenditure

4. 2024 Business Objectives

5. 2024 Business Policy and Sales Policy (1) Business Policy

(2) Sales Policy

Audit Committee Report

【 Appendix 3 】

Independent Auditors’ Report

Opinion

Basis for Opinion

Key Audit Matters

Inventory Valuation

Description

How our audit addressed the matter

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

Auditor’s Responsibilities for the Audit of the Parent Company Only Financial Statements

Tecom Co., LTD. SEPARATE BALANCE SHEETS DECEMBER 31, 2023 AND 2022

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Tecom Co., LTD. SEPARATE BALANCE SHEETS DECEMBER 31, 2023 AND 2022 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Tecom Co., LTD. DECEMBER 31, 2023 AND 2022 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT EARNINGS PER SHARE IN NEW TAIWAN DOLLARS)

Tecom Co., LTD. SEPARATE STATEMENTS OF CHANGES IN EQUITY YEARS ENDED DECEMBER 31, 2023 AND 2022 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Share capital

Tecom Co., LTD.

Statement of cash flow

For the years ended December 31,2023 AND 2022 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Tecom Co., LTD.

Statement of cash flow For the years ended December 31,2023 AND 2022 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Opinion

Basis for Opinion

Key Audit Matters

Inventory Valuation

Description

Other Matter — Parent Company Only Financial Statements

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

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements

Tecom Co., LTD. and Subsidiaries CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2023 AND 2022 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Tecom Co., LTD. and Subsidiaries CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2023 AND 2022 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Tecom Co., LTD. and Subsidiaries CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022

Tecom Co., LTD. and Subsidiaries

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

Tecom Co., LTD. and Subsidiaries CONSOLIDATED STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2023 AND 2022

Tecom Co., LTD. and Subsidiaries CONSOLIDATED STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2023 AND 2022

【 Appendix 4 】

Tecom Co.,Ltd.

2023 Deficit Compensation Statement

【 Appendix 5 】

List of Director Candidates

【 Appendix 6】

Proposal to lift directors’ non-competition restrictions

【 Annex 1 】

Tecom Co.,Ltd Articles of Incorporation

Chapter 1 General Principles

Chapter 3 Shareholder’s Meeting

Chapter 4 Board of Directors and Audit Committee

Chapter 5 General Manager

Chapter 6 Accounting

【 Annex 2 】

Tecom Co.,Ltd

TECOM AGM Information 2024

`【` Appendix 1 `】`

`【` Appendix 3 `】`

`【` Appendix 4 `】`

`【` Appendix 5 `】`

`【` Appendix 6】

`【` Annex 1 `】`

`【` Annex 2 `】`

`【` Annex 3 `】`

`【` Annex 4 `】`