TECOM Co., Ltd.

Tecom Co., LTD.

Consolidated Financial Statements for the years ended December 31, 2023 and 2022 with Independent Auditors’ Report (Stock Symbol 2321)

Company Address ：No. 23, Sec. 2, Yanfa 2nd Rd., Hsinchu City, Taiwan (R.O.C.)

Telephone Number：(03)577-5141

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Consolidated Financial Statements for the years ended December 31, 2023 and 2022 Independent Auditors’ Report

Table of contents

Item Page
1
2 ~ 3
4
5 ~ 8
9 ~ 10
11
12
13 ~ 14
15 ~ 61
15
15
15 ~ 16
16 ~ 27

27
28 ~ 47
47 ~ 50
50
51

I、Cover page
II、Table of contents
III、Representation letter
IV、Independent auditors’ report
V、Consolidated balance Sheets
VI、Consolidated statements of comprehensive income
VII、Consolidated statements of changes in equity
VIII、Consolidated statements of cash flow
IX、Notes to the consolidated financial statements
(1) Company history and business scope
(2) Approval date and procedures of the consolidated financial statements
(3) New standards, amendments and interpretations adopted
(4) Summary of significant accounting policies
(5) Major sources of uncertainty arising from significant accounting
judgments, estimates, and assumptions
(6) Explanation of significant accounts
(7) Related party transactions
(8) Restricted assets
(9) Significant Contingencies and Unrecognized Contract Commitments

Table of contents
Item	Page 1 2 ~ 3 4 5 ~ 8 9 ~ 10 11 12 13 ~ 14 15 ~ 61 15 15 15 ~ 16 16 ~ 27 27 28 ~ 47 47 ~ 50 50 51
I`、`Cover page II`、`Table of contents III`、`Representation letter IV`、`Independent auditors’ report V`、`Consolidated balance Sheets VI`、`Consolidated statements of comprehensive income VII`、`Consolidated statements of changes in equity VIII`、`Consolidated statements of cash flow IX`、`Notes to the consolidated financial statements (1) Company history and business scope (2) Approval date and procedures of the consolidated financial statements (3) New standards, amendments and interpretations adopted (4) Summary of significant accounting policies (5) Major sources of uncertainty arising from significant accounting judgments, estimates, and assumptions (6) Explanation of significant accounts (7) Related party transactions (8) Restricted assets (9) Significant Contingencies and Unrecognized Contract Commitments

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Item Page

(10) Losses due to major disasters	51
(11) Significant subsequent events	51
(12) Others	51 ~ 59
(13) Other disclosures	60
(14) Segment information	60 ~ 61

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Tecom Co., LTD.

Statement of Consolidated Financial Statements of Affiliated Enterprises

For the 2023 fiscal year (from January 1,2023 to December 31, 2023) of the Company in accordance with “Regulation Governing the Preparation of Consolidated Financial Statements and Related Reports of Affiliated Enterprises”, the companies that should be included in the preparation of consolidated financial statements of affiliated enterprises and companies that should be included in the preparation of consolidated financial statements of parent-subsidiary enterprises according to International Financial Reporting Standard No. 10 are the same, and the information that should be disclosed in the consolidated financial statements of affiliated enterprises has already been disclosed in the consolidated financial statements of parent-subsidiary enterprises, therefore a separate consolidated financial statement of affiliated enterprises will not be prepared.

We hereby declare that all the information provided is true and accurate.

Tecom Co., LTD. CEO: Liu, Chao-Kai March 4,2024

Independent Auditors’ Report

(113) No. Finance-Auditing-Reporting- 23003052

The Board of Directors and Shareholders

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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

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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:

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.

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

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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.

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

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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 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-Supervisory-Securitie Competent s-Auditing-1020028992 Authority Financial-Supervisory-Securitie Approved-certi s-Auditing-1090350620 fied No.

March 4, 2024

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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)

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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

Accounting Manager: Wang, Yan-Li

Chairman: Liu, Chao-Kai

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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, Yan-Li

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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			non-controlling interests
Share		capital		Capital Reserve		Accumulated deficit	Unrealized Gain (Loss) on Financial Assets at Fair value through other comprehensive 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, Yan-Li

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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)

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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

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

Chairman: Liu, Chao-Kai CEO:Tien, Ying-Juei

Accounting Manager: Wang, Yan-Li

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Tecom Co., LTD. and Subsidiaries NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2023 AND 2022

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT AS OTHERWISE INDICATED)

1. HISTORY AND ORGANISATION

Tecom Co., LTD. (the “Company”) was incorporated in Republic of China (R.O.C.). The Company and its subsidiaries (collectively referred herein as the “Group”) are primarily engaged in research, development, manufacture and sales of private branch exchange (PBX) systems and its components and peripherals, as well as agency sales of mobile phone related products. The Company is held by TECO Electric & Machinery Co., Ltd. with 63.52% of the shares, which is the ultimate of the group.

2. APPROVAL DATE AND PROCEDURES OF THE CONSOLIDATED FINANCIAL STATEMENTS

These consolidated financial statements were authorized for issuance by the Board of Directors on March 4, 2024.

3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

(1). Effect of the adoption of new issuances of or amendments to International Financial Reporting Standards ( “ IFRS ” ) as endorsed by the Financial Supervisory Commission ( “ FSC ” ) New standards, interpretations and amendments endorsed by the FSC effective from 202 3 are as follows:

New Standards, Interpretations and Amendments Amendments to IAS 1 “Disclosure of Accounting Policies” Amendments to IAS 8 “Definition of Accounting Estimates” Amendments to IAS 12 “Deferred Tax related to Assets and Liabilities arising from a Single Transaction” Amendments to IAS 12 “International Tax Reform — Pillar Two Model Rules”	Effective date by International Accounting Standards Board
	January 1, 2023 January 1, 2023 January 1, 2023 May 23, 2023

The above standards and interpretations have no significant impact on the Group’s financial condition and financial performance based on the Group’s assessment.

(2). Effect of new issuances of or amendments to IFRSs that the came into effect as endorsed by the FSC but not yet adopted by the Group

New standards, interpretations and amendments that the came into effect as endorsed by the FSC effective from 2024 are as follows:

effective from 2024 are as follows:
New Standards, Interpretations and Amendments Amendments to IFRS 16 “Lease Liability in Sale and Leaseback” Amendments to IAS 1 “Classification of Liabilities as Current or Non-current” Amendments to IAS 1 “Non-current Liabilities with Covenants Amendments to IAS 7 and IFRS 7 “Supplier Finance Arrangements”	Effective date by International Accounting Standards Board
	January 1, 2024 January 1, 2024 January 1, 2024 January 1, 2024

The above standards, interpretations and amendments have no significant impact on the Group’s financial condition and financial performance based on the Group’s assessment.

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(3). IFRSs issued by IASB but not yet endorsed by the FSC

New standards, interpretations and amendments issued by IASB but not yet included in the IFRSs as endorsed by the FSC are as follows:

New Standards, Interpretations and Amendments Amendments to IFRS 10 and IAS 28, “Sale or contribution of assets between an investor and its associate or joint venture” IFRS 17, “Insurance contracts” Amendments to IFRS 17, “Insurance contracts” Amendment to IFRS 17, “Initial application of IFRS 17 and IFRS 9 –comparative information” Amendments to IAS 21 “Lack of Exchangeability”	Effective date by International Accounting Standards Board
	To be determined by International Accounting Standards Board January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2025

New Standards, Interpretations and Amendments
Amendments to IFRS 10 and IAS 28, “Sale or contribution of assets between an investor
and its associate or joint venture”
IFRS 17, “Insurance contracts”
Amendments to IFRS 17, “Insurance contracts”
Amendment to IFRS 17, “Initial application of IFRS 17 and IFRS 9 –comparative
information”
Amendments to IAS 21 “Lack of Exchangeability”

Effective date by International
Accounting Standards Board

To be determined by
International Accounting
Standards
Board
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2025

The above standards, interpretations and amendments have no significant impact on the Group’s financial condition and financial performance based on the Group’s assessment.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Unless otherwise stated, the principal accounting policies applied in the preparation of these consolidated financial statements set out below have been consistently applied to all the periods presented.

(1) Compliance statement

The accompanying consolidated financial statements have been prepared in conformity with the Regulations Governing the Preparation of Financial Reports by Securities Issuers , International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations that came into effect as endorsed by the FSC (collectively, referred herein as the “IFRSs”).

(2) Basis of preparation

A.Except for the following items, these consolidated financial statements have been prepared under the historical cost convention ：
(a) Financial assets at fair value through profit or loss
(b) Financial assets at fair value through other comprehensive income.
(c) Defined benefit liabilities recognized based on the net amount of pension fund assets less present value of defined benefit obligation.
B.The preparation of financial statements in conformity with IFRSs requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 5.

(3) Basis of consolidation

A.Basis for preparation of consolidated financial statements
(a) All subsidiaries are included in the Group’s consolidated financial statements. Subsidiaries are all entities (including structured entities) controlled by the Group. The Group controls an entity when the Group is exposed, or has rights, to variable returns from its involvement

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with the entity and has the ability to affect those returns through its power over the entity. Consolidation of subsidiaries begins from the date the Group obtains control of the subsidiaries and ceases when the Group loses control of the subsidiaries.

(b) Transactions, balances and unrealized gains and losses between companies within the Group have been eliminated. The accounting policies of subsidiaries have been adjusted as necessary to be consistent with the policies adopted by the Group.
(c) Profit or loss and each component of other comprehensive income are attributed to the owners of the parent and to the non-controlling interests. Total comprehensive income is attributed to the owners of the parent and to the non -controlling interests even if this results in the noncontrolling interests having a deficit balance.
(d) If the changes in the shares of the subsidiaries do not result in a loss of control (transactions with non-controlling interests), they are treated as equity transactions, that is, transactions between the owners. The difference between the adjustment amount of non -controlling interests and the fair value of the consideration paid or receivable is recognized directly in equity.
(e) When the Group loses control of a subsidiary, the Group remeasures any investment retained in the former subsidiary at its fair value. That fair value is regarded as the fair value on initial recognition of a financial asset or the cost on initial recognition of the associate or joint venture. Any difference between fair value and carrying amount is recognized in profit or loss. The accounting principles of all amounts previously recognized in other comprehensive income in relation to the subsidiary shall be as same as the basis of dispose of related assets or liabilities, which means any gain or loss previously recognized as other comprehensive income upon disposal of the related assets or liabilities will be reclassified to profit or loss when control of the subsidiary is lost.

B.Subsidiaries included in the consolidated financial statements:

Investor	Subsidiary			Ownership (%)	Ownership (%)
		Main Business
Name	Name	Activities	December 31,	2023	December 31, 2022	Explanation
	Baycom	Research, manufacture	43.76		43.76	Note 1
Tecom Co.,	Opto-Electronics	and sales of optical
LTD.	Technology Co.,	fiber communication
	Ltd.	systems and optical
		fibers, optical fiber
		cables and their
		components
	Tecom Global	Investment	-		100.00	Note 2
Tecom Co.,	Tech Investment
LTD.	(B.V.I.) Limited
Tecom Global	Wu Han Tecom	Technology	-		100.00	Note 2
Tech Investment	Co., Ltd.	development,
(B.V.I.) Limited		production, sales and
		technical service
		business of
		communication
		network information
		related products
	Wu Han Tecom	Technology	100.00		-	Note 2
Tecom Co.,	Co., Ltd.	development,
LTD.		production, sales and
		technical service
		business of
		communication
		network information
		related products

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Notes 1 ： As of December 31, 2023 and 2022, the Company had full board seats of Baycom Opto-Electronics Technology Co., Ltd. and had control power. Although it did not directly or indirectly hold more than half of the voting shares, it was regarded as a subsidiary.
Notes2 ： The investment structure adjustment has been approved by the Investment Commission in February, 2023. The Company directly invests in Wu Han Tecom Co., Ltd. The legal deregistration procedures of Tecom Global Tech Investment (B.V.I.) Limited have been completed in October, 2023.
3.Subsidiaries not included in the consolidated financial statements: None.
4.Adjustments for subsidiaries with different balance sheet dates: None.
5.Significant restrictions: None.
6.Subsidiaries that have non-controlling interests that are material to the Group ：

The total non-controlling interest of the Group as of December 31, 2023 and 2022 was respectively was respectively$259,049 and $263,948. The information on non-controlling interest and respective subsidiaries is as follows:

Subsidiary Names Baycom Opto-Electronics Technology Co., Ltd.	Principal Place of business Taiwan	Non-controlling interest December 31, 2023 December 31, 2022 Amount Ownership (%) Amount Ownership (%) Note $ 259,049 56.24% $ 263,948 56.24%
		Amount $ 259,049

Summarized financial information of the subsidiary ：

Balance sheets

Current assets Non-current assets Current liabilities Non-current liabilities Total net assets	Baycom Opto-Electronics Technology Co., Ltd. December 31, 2023 December 31, 2022 $ 349,788 $ 393,460 162,428 162,568 ( 44,160) ( 72,899) ( 7,414) ( 13,777) $ 460,642 $ 469,352	Baycom Opto-Electronics Technology Co., Ltd.	Baycom Opto-Electronics Technology Co., Ltd.	Baycom Opto-Electronics Technology Co., Ltd.
			December 31, 2022 $ 393,460 162,568 ( 72,899) ( 13,777) $ 469,352	December 31, 2022

Statements of comprehensive income

Statements of comprehensive income
Revenue Net profit before tax Income tax expense Net profit, current Other comprehensive income (loss), net of tax Total comprehensive income (loss) for the period Total comprehensive income (loss) attributable to non-controlling interests Dividends paid to non-controlling interests	Baycom Opto-Electronics Technology Co., Ltd. 2023 2022 $ 257,532 $ 330,601 34,061 49,768 ( 5,782) ( 8,488) 28,279 41,280 - - $ 28,279 $ 41,280 $ 15,903 $ 23,214 $ 20,780 $ 11,333
		$ 330,601 49,768 ( 8,488) 41,280 - $ 41,280 $ 23,214 $ 11,333

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Statements of cash flows

Statements of cash flows
Net cash inflows generated by operating activities Net cash inflows (outflows) generated By (used in) investing activities Net cash outflows used in financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Net cash flows from financing activities	Baycom Opto-Electronics Technology Co., Ltd. 2023 2022 $ 61,685 $ 101,866 ( 129,185) 85,307 ( 58,349) ( 11,092) ( 125,849) 176,081 235,441 59,360 $ 109,592 $ 235,441
		$ 101,866 85,307 ( 11,092) 176,081 59,360 $ 235,441

(4). Foreign currency translation

The financial statements of each individual consolidated entity were expressed in the currency which reflected its primary economic environment (functional currency). The consolidated financial statements are presented in New Taiwan Dollars, which is the Company’s functional and the Group’s presentation currency.

Foreign currency transactions and balances

1.Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions are recognized in profit or loss in the period in which they arise.
2.Monetary assets and liabilities denominated in foreign currencies at the period end are retranslated at the exchange rates prevailing at the balance sheet date. Exchange differences arising upon re-translation at the balance sheet date are recognized in profit or loss.
3.Non-monetary assets and liabilities denominated in foreign currencies held at fair value through profit or loss are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognized in profit or loss. Non-monetary assets and liabilities denominated in foreign currencies held at fair value through other comprehensive income are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognized in other comprehensive income. However, nonmonetary assets and liabilities denominated in foreign currencies that are not measured at fair value are translated using the historical exchange rates at the dates of the initial transactions.
4.All foreign exchange gains and losses are presented in the statement of comprehensive income within “other gains and losses”.
(5). Classification of current and non - current items
1.Assets that meet one of the following criteria are classified as current assets; otherwise, they are classified as non-current assets:
- (1) Assets arising from operating activities that are expected to be realized, or are intended to be sold or consumed within the normal operating cycle;
- (2) Assets held mainly for trading purposes;
- (3) Assets and liabilities to be realized within the next twelve months ;
- (4) Cash or cash equivalents, except those that are restricted to exchanging or settling liabilities within at least twelve months after the date of the balance sheet ;

The Group classifies all assets not meeting the above criteria as non -current assets.

2.Liabilities that meet one of the following criteria are classified as current liabilities; otherwise, they are classified as non-current liabilities:
(1) Liabilities that are expected to be settled within the normal operating cycle;
(2) Liabilities arising mainly from trading purposes;
(3) Those expected to be settled within twelve months after the balance sheet date ;
(4) Liabilities for which the repayment date cannot be extended unconditionally to more than twelve months after the balance sheet date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its

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classification.

The Group classifies all liabilities not meeting the above criteria as non -current liabilities.

(6). Cash equivalents

Cash equivalents refer to short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Time deposits that meet the above criteria and are held for the purpose of meeting short -term cash commitment in operations are classified as cash equivalents.

(7). Financial assets at fair value through profit or loss
1.Financial assets at fair value through profit or loss are financial assets that are not measured at amortized cost or fair value through other comprehensive income.
2.On a regular way purchase or sale basis, financial assets at fair value through profit or loss are recognized and derecognized using trade date accounting.
3.At initial recognition, the Group measures the financial assets at fair value , and recognizes relevant transaction costs in profit or loss. The Group subsequently measures the financial assets at fair value, and the gains or losses are recognized in profit or loss.
Dividends are recognized in profit or loss as dividend revenue when the Group’s right to receive payment of the dividend is established, it is probable that the economic benefits associated with the dividend will flow to the Group, and the amount of the dividend can be measured reliably.
(8). Financial assets at fair value through other comprehensive income
1.Financial assets at fair value through other comprehensive income are equity instruments which are not held for trading, and for which the Group has made an irrevocable election at initial recognition to recognize changes in fair value in other comprehensive.
2.A regular way purchase or sale of financial assets at fair value through other comprehensive income are recognized and derecognized, as applicable, using trade date accounting.
At initial recognition, the Group measures the financial assets at fair value plus transaction costs. The Group subsequently measures the financial assets at fair value. The changes in fair value of equity instruments are recognized in other comprehensive income. The cumulative gain or loss recognized in other comprehensive income shall not be reclassified to profit or loss upon derecognition, but instead shall be transferred to the “retained earnings” item. Dividends are recognized in profit or loss as dividend revenue when the Group’s right to receive payment of the dividend is established, it is probable that the economic benefits associated with the dividend will flow to the Group, and the amount of the dividend can be measured reliably.
(9). Financial assets at amortized cost
1.Financial assets at amortized cost are those that meet all of the following criteria:
- (1) The objective of the Group’s business model is achieved by collecting contractual cash flows. (2) The assets’ contractual cash flows represent solely payments of principal and interest.
2.A regular way purchase or sale of financial assets at amortized cost are recognized and derecognized, as applicable, using trade date accounting.
3.At initial recognition, the Group measures the financial assets at fair value plus transaction costs , and subsequently recognizes interest income by effective interest rate method based on amortization procedures during the outstanding period . A gain or loss is recognized in profit or loss when the asset is derecognized or impaired.
4.The Group’s time deposits which do not fall under cash equivalents are those with a short maturity period and are measured at initial investment amount as the effect of discounting is immaterial.
5.The bank deposit which is subject to restriction on use does not meet the definition of cash and cash equivalents, and is classified as financial assets measured at amortized cost.
(10). Accounts and notes receivable
1.Accounts and notes receivable entitle the Group a legal right to receive consideration in exchange for transferred goods or rendered services.
2.The short-term accounts and notes receivable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

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(11). Impairment of financial assets

At each balance sheet date, the Group shall assess whether the credit risk on financial assets at amortized cost has increased significantly since initial recognition. The Group shall consider all the reasonable and provable information (including foreseeing information). If the credit risk on the financial assets has not increased significantly since initial recognition, the Group shall measure the loss allowance for that instrument at an amount equal to 12 -month expected credit losses. If the credit risk on a financial instrument has increased significantly since initial recognition, the Group shall measure the loss allowance for that instrument at an amount equal to lifetime expected credit losses. For those accounts receivables or contract assets not containing significant financing component, the Group shall measure the loss allowance at an amount equal to lifetime expected credit losses.

(12). Derecognition of financial assets

The Group derecognizes a financial asset when the contractual rights to receive cash flows from the financial asset have expired.

– (13). Leasing arrangements operating lease

Lease income from an operating lease net of any incentives given to the lessee is recognized in profit or loss on a straight -line basis over the lease term.

(14). Inventories

Inventories are measured at the lower of cost and net realizable value. Cost is determined using the weighted-average method. The cost of finished goods and work in progress comprises raw materials, direct labor, other direct costs and related production overheads. It excludes borrowing costs. The item-by-item approach is used in applying the lower of cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs of related variable selling expenses.

(15). Investments accounted for under the equity method - associates

1.Associates are all entities over which the Group has significant influence but not control. In general, it is presumed that the investor has significant influence, if an investor holds, directly or indirectly 20 percent or more of the voting power of the investee. Investments in associates are accounted for using the equity method and are initially recognized at cost.
An investment in an associate is adjusted thereafter to recognize the Group’s share of profit or loss and other comprehensive income of the associate in profit or loss and other comprehensive income accordingly. If the Group’s share of losses of an associate equals or exceeds its interest in the associate (including any receivables without collaterals), the Group discontinues recognizing its share of further losses. After the Company’s interest is reduced to zero, additional losses are provided for, and a liability is recognized, only to the extent that the Company has incurred legal or constructive obligations or made payments on behalf of the associate.
3.When changes in an associate’s equity do not arise from profit or loss or other comprehensive income of the associate and such changes do not affect the Group’s ownership percentage of the associate, the Group recognizes change in ownership interests in the associate in ‘capital reserve’ in proportion to its ownership.
4.The Group’s share of unrealized profits or losses arising from transactions between the Group and associates are eliminated. Unless transactions provide evidence of an impairment loss of the assets transferred, the unrealized losses shall be eliminated as well. Appropriate adjustments of accounting policies of the associates have been made to be uniform with the accounting policies of the Group.
5.When the Group disposes an associate, if the Group losses significant influence of the associate, the amount previously recognized in other comprehensive income which relates to the associate, the accounting treatment shall be the same as disposal of the related assets and liabilities. That is, if a gain or loss previously recognized in other comprehensive income by the Group would be reclassified to profit or loss on the disposal of the related assets or liabilities, the Group reclassifies the gain or loss to profit or loss. If the Group still has significant influence over the associate, the Group shall only reclassify to profit or loss the proportion of the gain or loss that had previously been recognized in other comprehensive

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income relating to that reduction in ownership interest

(16). Property, plant and equipment

1.Property, plant and equipment are initially recorded at cost. Borrowing costs incurred during the construction period are capitalized.
2.Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.
Property, plant and equipment shall be depreciated over estimated useful life by straight -line method under cost model. Each component of property, plant and equipment that is significant in relation to the total cost of the item is depreciated separately.
The residual value ,the useful life, and depreciation method of an item of property, plant, and equipment shall be reviewed at each financial year -end and, if expectations of residual value and useful live differ from previous estimates, or there are significant changes in the pattern in which the asset’s future economic benefits are expected to be consumed, the changes shall be accounted for as a change in an accounting estimate in accordance with IAS 8 “Accounting Policies, Changes in Accounting Estimates and Errors. ” The estimated useful lives of property, plant and equipment are as follows :

Buildings and structures 25 ～ 55 years Machinery equipment 3 ～ 5 years Test equipment 3 ～ 5 years Other equipment 2 ～ 5 years

(17). Lessee ' s lease transactions － Right - of - use Assets / Lease liabilities

1.The Group recognizes right-of-use assets and lease liabilities for all leases at the inception of the lease. When a lease contract is a short -term lease or a lease of a low-value underlying asset, the lease payments are recognized as an expense on a straight -line basis over the lease term.
2.Lease liabilities are recognized at the present value of the lease payments outstanding at the inception of the lease, discounted at the Group's incremental borrowing rate of interest. Lease payments are fixed rental payments.
3.Right-of-use assets are recognized at cost at the inception of the lease, which is the original measurement of lease liabilities and any original direct costs incurred.

Right-of-use assets are measured by cost model subsequently. The Group shall depreciate the right-of-use assets from the commencement date to the earlier of the useful life of the right-of-use asset or the end of the lease term. When re-evaluating lease liabilities, any re-measurement amounts of lease liabilities shall be adjusted accordingly with the right-of-use asset.

(18). Intangible assets

Intangible assets including computer software and technology are amortized on a straight-line basis over its estimated useful life of 1 to 3 years.

(19). Impairment of non - financial assets

If any indication an asset may be impaired is present, the Group shall assess the recoverable amount of the asset at the balance sheet date. If the recoverable amount of the asset is less than it carrying amount, impairment loss shall be recognized. Recoverable amount is the higher of the asset’s net fair value and its value in use. If the circumstances or reasons for recognizing impairment loss for an asset in prior years no longer exist or diminish, the impairment loss shall be reversed. The increased carrying amount of an asset attributable to a reversal of an impairment loss shall not exceed the carrying amount that would have been determined , net of amortization or depreciation, had no impairment loss ben recognized for the asset in prior years.

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(20). Borrowings

1.Borrowings comprise long-term and short-term bank borrowings. Borrowings are recognized initially at fair value, net of transaction costs incurred. Subsequently, any difference between the proceeds, net of transaction costs, and the redemption value is recognized in profit or loss over the period of the borrowings as interest expenses using the effective interest method.
When it is likely that some or all of the credit limit will be drawn down, the cost incurred at the establishment of the limit is recognized as transaction costs of the loan and deferred to be recognized as an adjustment to the effective interest rate when advances are made; when it is unlikely that some or all of the credit limit will be drawn down, the cost is recognized as a prepayment and amortized over the period related to the limit.

(21). Notes and accounts payables

1.Accounts payable are liabilities for purchases of raw materials, goods or services and notes payable are those resulting from operating and non -operating activities.
2.The short-term notes and accounts payables without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.
(22). Derecognition of financial liabilities

A financial liability is derecognized when the obligation specified in the contract is either discharged or cancelled or expires.

(23). Offsetting financial instruments

Financial assets and liabilities are offset and reported in the net amount in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously.

(24). Provisions

Provisions (including warranty and decommissioning liabilities) are recognized when the Group has a present legal or constructive obligation as a result of past events, and it is probable that an outflow of economic resources will be required to settle the obligation and the amount of the obligation can be reliably estimated. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation on the balance sheet date, which is discounted using a pre-tax discount rate that reflects the current market assessments of the time value of money and the risks specific to the obligation. When discounting is used, the increase in the provision due to passage of time is recognized as interest expense. Provisions are not recognized for future operating losses.

(25). Employee benefits

1.Short-term employee benefits

Short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in respect of service rendered by employees in a period and should be recognized as expense in that period when the employees render service.

2.Pensions
(1) Defined contribution plans

For defined contribution plans, the contributions are recognized as pension expense when they are due on an accrual basis. Prepaid contributions are recognized as an asset to the extent of a cash refund or a reduction in the future payments.

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(2) Defined benefit plans
- A. Net obligation under a defined benefit plan is defined as the present value of an amount of pension benefits that employees will receive on retirement for their services with the Group in current period or prior periods. The liability recognized in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets. The net defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The rate used to discount is determined by using interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the related pension liability; when there is no deep market in high -quality corporate bonds, the Group uses interest rates of government bonds (at the balance sheet date) instead.
- B. Remeasurements arising on defined benefit plan are recognized in other comprehensive income in the period in which they arise and are recorded as retaining earning.
Employees’ compensation and directors’ and supervisors’ remuneration

Employees’ compensation and directors’ and supervisors’ remuneration are recognized as expense and liability, provided that such recognition is required under legal or constructive obligation and those amounts can be reliably estimated. Any difference between the resolved amounts and the subsequently actual distributed amounts is accounted for as changes in estimates.

(26). Income tax
1.The tax expense for the period comprises current and deferred tax. Tax is recognized in profit or loss, except to the extent that it relates to items recognized in other comprehensive income or items recognized directly in equity, in which cases the tax is recognized in other comprehensive income or equity.
2.The current income tax expense is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in accordance with applicable tax regulations. It establishes provisions where appropriate based on the amounts expected to be paid to the tax authorities. An additional tax is levied on the unappropriated retained earnings and is recorded as income tax expense in the year the s hareholders meeting resolves the earning distribution.
Deferred income tax is recognized, using the balance sheets liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, the deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction that at the time of the transaction affects neither accounting nor taxable profit (or loss). Deferred income tax is provided on temporary differences arising on investments in subsidiaries, except where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred income tax is determined using tax rates (or tax law) that have been enacted or substantially enacted by the end of the balance sheet date and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled.
Deferred income tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized. At the end of the balance sheet date, unrecognized and recognized deferred income tax assets are reassessed.
Current income tax assets and liabilities are offset and the net amount is reported in the balance sheets when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. Deferred income tax assets and liabilities are offset on the balance sheets when the entity has the legally enforceable right to offset current tax assets against current tax liabilities and they are levied by the same taxation authority on either the same entity or different entities that intend to settle on a net basis or realize the asset and settle the liability simultaneously.

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A deferred tax asset shall be recognized for the carryforward of unused tax credits to the extent that it is possible that future taxable profit will be available against which the unused tax credits can be utilized.
(27). Share capital
1.Ordinary shares are classified as equity. The classification of preferred shares is based on the evaluation of the specific rights attached to the preferred shares in relation to the substance and definition of the contractual agreement and financial liabilities and equity instruments. When the basic characteristics of financial liabilities are displayed, they are classified as liabilities, otherwise they are classified as equity. The net amount after deducting income tax from the increase in costs directly related to the issuance of new shares is listed in equity as a price deduction.
When the Company repurchases the issued shares, the consideration paid shall be recognized as a reduction of shareholders’ equity after netting off any directly attributable incremental costs. When the repurchased shares are reissued, the difference between the sales proceeds received and the carrying amount, net of any directly attributable incremental costs and any related income taxes, shall be recognized as an adjustment to equity.
(28). Revenue recognition
1.Sales of goods
- (1) The Group is engaged in manufacture and sales of business communication systems, smart electromechanical and optical fiber related products . Sales are recognized when control of the products has transferred, being when the products are delivered to the customer, and there is no unfulfilled obligation that could affect the customer ’s acceptance of the products. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customer, and either the customer has accepted the products in accordance with the sales contract, or the Group has objective evidence that all criteria for acceptance have been satisfied.
- (2) Sales revenue is recognized based on the price specified in the contract, net of the estimated sales discounts. Historical experience is usually used to estimate the sales discounts. Revenue is recognized only to the extent that it is highly probable that a significant reversal in the amount will not occur, and shall be re -estimated at each balance sheet date. A refund liability is recognized at expected sales discounts payable to customers in relation to sales made until the end of the reporting period. The sales are made mainly with a credit term of open account 30 to 120 days. As the time interval between the transfer of committed goods or services and the payment of customer does not exceed one year, the Group does not adjust the transaction price to reflect the time value of money.
- (3) The Group’s obligation to provide a repair for faulty products under the standard warranty terms is recognized as a provision when sales are made.
- (4) An accounts receivable is recognized when the goods are delivered as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due.
- (5) Customer shall pay the contract price according to the payment terms agreed upon . If the customer pays in advance before the transfer of goods control, it shall be recognized as a contract liability and recognized as revenue after the transfer of goods control.
2.Costs of obtaining contracts with customers

Although the incremental costs incurred in obtaining customer contracts are expected to be recoverable, as the related contract period is less than one year, such costs are expensed upon occurrence.

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(29). Government grants

Government grants shall be recognized at fair value when there is reasonable assurance that the Group will comply with the conditions attaching to them, and that the grants will be received. Government grants shall be recognized in profit or loss on a systematic basis over the periods in which the Group recognizes as expenses the related cost for which the grants are intended to compensate.

(30). Operating segments

Operating segments are reported in a manner consistent with the internal management reports provided to the chief operating decision -maker. The chief operating decision-maker is responsible for allocating resources and assessing performance of the operating segments.

5. CRITICAL ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS ON UNCERTAINTY

When preparing these consolidated financial statements, the management has exercised its judgment to determine the accounting policies adopted and has made accounting estimates and assumptions based on reasonable expectations of future events, considering the circumstances as of the balance sheet date. Significant accounting estimates and assumptions may involve inherent uncertainties and could differ from actual results. The management will continue to evaluate and adjust these estimates and assumptions based on historical experience and other factors. Such estimates and assumptions carry a risk of significant adjustments to the carrying amounts of assets and liabilities in the next financial year. Please refer to the following explanation regarding the uncertainties associated with significant accounting judgments, estimates, and assumptions:

(1) Critical judgments in applying the Group ’s accounting policies

None.

(2) Critical accounting estimates and assumptions

Evaluation of inventories

As inventories are stated at the lower of cost and net realizable value, the Group must determine the net realizable value of inventories on balance sheet date based on judgments and estimates. Due to the rapid technology innovation, the Group evaluates the amounts of normal inventory consumption, obsolete inventories or inventories without market selling value on balance sheet date, and writes down the cost of inventories to the net realizable value.

As of December 31, 2023 the carrying amount of the Group’s inventories was $116,905.

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

Cash on hand Checking accounts and demand deposits Time deposits	December 31, 2023 $ 377 31,955 111,306 $ 143,638	December 31, 2022 $ 270 46,677 218,357 $ 265,304

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1.The Group transacts with a variety of financial institutions with high credit quality for the purpose of dispersing credit risk, so it expects that the probability of counterparty default is low.
2.The information of cash classified as "Financial assets at amortized cost" due to restrictions on use is stated in Note 8.

(2) Financial assets at fair value through profit or loss

Assets Current items: Financial assets mandatorily measured at fair value through profit or loss Beneficiary certificates Fair value adjustments	December 31, 2023 $ 13,972 458 $ 14,430	December 31, 2022 $ 10,473 20 $ 10,493

Amounts recognized in profit in relation to financial assets at fair value through profit or loss are listed below:

Financial assets and mandatorily measured at fair value through profit or loss Beneficiary certificates	2023 $ 474	2022 $ 1,699

(3) Financial assets at fair value through other comprehensive income

Items Current items: Equity instruments Listed and OTC stocks Fair value adjustments subtotal Non-current items: Equity instruments Listed and OTC stocks Unlisted ,non-OTC stocks, and stocks in emerging market Fair value adjustments subtotal Total	December 31, 2023 $ 16,562 ( 512) 16,050 200,024 22,823 222,847 27,293 250,140 $ 266,190	December 31, 2022
		$ 35,722 ( 3,725) 31,997 400,000 22,823 422,823 44,329 467,152 $ 499,149

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1.The Group has elected to classify equity investments that are considered to be strategic investments as financial assets at fair value through other comprehensive income. As of December 31, 2023 and 2022 the fair value above is respectively $266,190 and $499,149.
Amounts recognized in profit or loss and comprehensive income in relation to the financial assets at fair value through other comprehensive income is listed below:

2023 Equity instruments at fair value through other comprehensive income Changes in fair value recognized in other comprehensive income (loss) $ 30,529 Accumulated gains (losses) transferred to retained earnings due to derecognition $ 44,352 Dividend income recognized in profit or loss Those held at the end of the current period $ 6,806 Derecognition during the period - $ 6,806	2022
	($ 27,713) ($ 133,170) $ 12,452 2,295 $ 14,747

3.Details of the Group’s financial assets at fair value through other comprehensive income pledged to others are provided in Note 8.

(4) Financial assets at amortized cost

Items Current items: Demand deposit Time deposits Total	December 31, 2023 $ 22,667 231,977 $ 254,644	December 31, 2022
		$ 22,557 272,524 $ 295,081

1.Amounts recognized in profit or loss in relation to financial assets at amortized cost are listed below:

Interest income	2023 $ 8,950	2022
		$ 3,740

2.Without considering other credit enhancements, the amounts most representing the maximum credit risk exposure of financial assets at amortized cost as of December 31, 2023 and 2022 are $254,644 and $295,081, respectively.

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As of December 31, 2023 and 2022, the financial assets measured at amortized cost pledged as collaterals amounted to $85,095 and $247,074, respectively.Please refer to Notes 8 for details.
4.Please refer to Note 12(2) for the information on the credit risk of financial assets at amortized cost. As the counterparty of the Group's investment in time deposits are financial institutions of good credit quality, the default risk is expected to be extremely low.
(5) Notes and Accounts receivable (including from related party )

Notes receivable Notes receivable from related party Less: Loss allowance Accounts receivable Accounts receivable from related party Less: Loss allowance	December 31, 2023 $ 17,334 400 - $ 17,734 $ 131,078 8,039 ( 702) $ 138,415	December 31, 2022
		$ 26,464 2,220 - $ 28,684 $ 154,106 11,996 ( 560) $ 165,542

1.The aging analysis of notes and accounts receivable is as follows:

December 31, 2023 Accounts receivable Notes receivable Not past due $ 129,603 $ 17,734 Less than 30 days past due 5,903 - Between 31 and 90 days past due 1,494 - Between 91 and 180 days past due 1,900 - More than 181 days past due 217 - $ 139,117 $ 17,734	December 31,	2022 Notes receivable
	Accounts receivable $ 149,768 16,097 28 149 60 $ 166,102
		$ 28,684 - - - - $ 28,684

The aging analysis is based on the number of days overdue.

The accounts receivables and notes receivables as of December 31, 2023 and 2022 were due to the contracts with customers. As of January 1, 2022, the balance of account receivables from contracts with customers was $219,206.
Without considering other credit enhancements, the amounts most representing the maximum credit risk exposure of notes receivables as of December 31, 2023 and 2022 are $17,734 and $28,684, respectively. The amounts most representing the maximum credit risk exposure of accounts receivables as of December 31, 2023 and 2022 are $138,415 and $165,542, respectively.
4.Please refer to Note 12(2) for the information on the credit risk of accounts and notes receivables.

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(6) Inventories

Merchandise Finished goods Work in process Raw materials		December 31, 2023
	Cost $ 15 82,512 8,113 78,416 $ 169,056	Loss allowance $ - ( 31,922) ( 590) ( 19,639) ($ 52,151)	Carrying amount $ 15 50,590 7,523 58,777 $ 116,905

Merchandise Finished goods Work in process Raw materials		December 31, 2022	December 31, 2022
	Cost $ 8,736 121,462 14,018 117,428 $ 261,644	Loss allowance ($ 8,507) ( 28,077) ( 641) ( 32,206) ($ 69,431)	Carrying amount $ 229 93,385 13,377 85,222 $ 192,213

Inventory costs recognized as expenses or losses are as follows:

Cost of inventories sold Maintenance costs Construction cost Inventory valuation losses Others	2023 $ 557,877 846 12,264 10,410 13,629 $ 595,026	2022
		$ 734,672 1,154 - 2,186 12,747 $ 750,759

(7) Investments accounted for using equity method

2023 At January 1 $ 16,896 Share of profit or loss of investments accounted for using equity method 2,511 Earnings distribution of investments accounted for using equity method ( 1,134) Adjustment of not recognizing according to shareholding ratio - At December 31 $ 18,273	2022
	$ 15,771 2,627 ( 1,512) 10 $ 16,896

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Associate`：` Tecnos International Consulting Co., Ltd. Teco Tour Travel Service co., ltd. Taian Technology Sdn. Bhd. A-Tel Inc. E-Joy International Co., Ltd.	December 31, 2023 $ 9,841 1,650 3 - 6,779 $ 18,273	December 31, 2022
		$ 9,412 1,669 3 - 5,812 $ 16,896

The Group has no individual significant associate.
2.Aggregate information of the carrying amounts and operation results of the G roup's individual insignificant associates was as follows:

Loss from continuing operations Other comprehensive income (net after tax) Total comprehensive loss for the year	2023 ($ 6,673) - ($ 6,673)	2022 ($ 3,922) - ($ 3,922)

(8) Property, plant and equipment

	2023		Total $ 205,019 ( 112,924) $ 92,095
Machinery equipment $ 11,751 ( 5,152) $ 6,599 $ 6,599 8,624 ( 2,361) $ 12,862 $ 17,843 ( 4,981) $ 12,862	Test equipment $ 350 ( 56) $ 294 $ 294 133 ( 106) $ 321 $ 483 ( 162) $ 321	Other equipment $ 13,953 ( 6,143) $ 7,810 $ 7,810 8,208 ( 5,020) $ 10,998 $ 19,362 ( 8,364) $ 10,998
			$ 92,095 16,965 ( 10,709) $ 98,351
			$ 216,653 ( 118,302) $ 98,351

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2022

		2022
Buildings and structures At January 1 Cost $ 178,965 Accumulated depreciation and impairment ( 98,350) $ 80,615 At January 1 $ 80,615 Additions - Disposals - Depreciation expense ( 3,223) At December 31 $ 77,392 At December 31 Cost $ 178,965 Accumulated depreciation and impairment ( 101,573) $ 77,392	Machinery equipment $ 12,418 ( 8,539) $ 3,879 $ 3,879 4,438 - ( 1,718) $ 6,599 $ 11,751 ( 5,152) $ 6,599	Test equipment $ 1,419 ( 1,185) $ 234 $ 234 270 - ( 210) $ 294 $ 350 ( 56) $ 294	Other equipment $ 14,719 ( 7,528) $ 7,191 $ 7,191 4,576 ( 6) ( 3,951) $ 7,810 $ 13,953 ( 6,143) $ 7,810	Total $ 207,521 ( 115,602) $ 91,919
				$ 91,919 9,284 ( 6) ( 9,102) $ 92,095
				$ 205,019 ( 112,924) $ 92,095

1.The major components of the building and construction of the Group are buildings, which are depreciated over 55 years, and the rest are decoration projects, which are depreciated over 25 years.
2.Please refer to Note 8 for the information on property, plant and equipment pledge as collaterals.
(9) Lease transactions - lessee
1.The underlying assets leased by the Group include land, buildings and business vehicles, etc., and the lease periods after considering the extension options and the period of the contract are usually from 1 to 23 years. The lease contracts are negotiated individually and include various terms and conditions. In addition to the leased assets not being used as collateral for borrowing, there are no other restrictions.
2.The carrying amount of right-of-use assets and depreciation expenses recognized are shown as below:

Land Building Transportation equipment (business car)	Carrying amount	Carrying amount
	December 31, 2023 $ 169,938 3,650 367 $ 173,955	December 31, 2022 $ 178,030 4,914 857 $ 183,801

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Depreciation expense

Land Building Transportation equipment (business car)	2023 $ 8,092 5,422 490 $ 14,004	2022
		$ 8,094 5,867 490 $ 14,451

3.Additions to the right-of-used assets for the years ended December 31, 2023 and 2022 amounted to $4,158 and $3,573, respectively.
4.The information on profit or loss related to lease contracts is shown as below:

Items affecting current profit or loss Interest expense on the lease liabilities Expenses for short-term lease contracts Expenses for the leases of low-value assets Gains arising from lease modification	2023 $ 4,739 $ 1,945 $ 146 $-	2022 $ 4,952 $ 1,149 $ 450 $ 32

The cash outflows arising from leases for the years ended December 31, 2023 and 2022 amounting to $19,264 and $19,232, respectively.
6.When determining the lease term, all facts and circumstances that would give rise to economic incentives for the exercise of any extension options were taken into consideration. If a significant event occurs that affects the evaluation of exercising any extension options, the lease term will be re-estimated.

(10) Intangible assets

2023

		2023
At January 1 Cost Accumulated amortization At January 1 Additions Amortization expenses At December 31 At December 31 Cost Accumulated amortization	Computer software $ 10,115 ( 8,450) $ 1,665 $ 1,665 912 ( 1,511) $ 1,066 $ 2,053 ( 987) $ 1,066	Technology $ 2,073 ( 1,094) $ 979 $ 979 70 ( 741) $ 308 $ 2,143 ( 1,835) $ 308	Total
			$ 12,188 ( 9,544) $ 2,644 $ 2,644 982 ( 2,252) $ 1,374 $ 4,196 ( 2,822) $ 1,374

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At January 1 Cost Accumulated amortization At January 1 Additions Amortization expenses At December 31 At December 31 Cost Accumulated amortization	Computer software $ 9,577 ( 7,892) $ 1,685 $ 1,685 1,854 ( 1,874) $ 1,665 $ 10,115 ( 8,450) $ 1,665	Technology $ 2,073 ( 403) $ 1,670 $ 1,670 - ( 691) $ 979 $ 2,073 ( 1,094) $ 979	Total $ 11,650 ( 8,295) $ 3,355 $ 3,355 1,854 ( 2,565) $ 2,644 $ 12,188 ( 9,544) $ 2,644

Intangible assets are amortized as follows ：

Operating costs Selling expenses Administrative expenses Research and development expenses

2023 $ 138 510 500 1,104 $ 2,252	2022
	$ 263 199 729 1,374 $ 2,565

(11) Short - term borrowings

Type of borrowings Bank borrowings Secured borrowings Credit borrowings Type of borrowings Bank borrowings Secured borrowings Credit borrowings	December 31, 2023 $ 214,000 110,000 $ 324,000 December 31, 2022 $ 460,000 295,000 $ 755,000	Interest rate range 1.84%~2.34% 2.70%~2.948% Interest rate range 1.4%~1.97% 2.12~2.892%	Collateral Please refer to Note 8. None. Collateral Please refer to Note 8. None.

The interest expenses arising from long-term and short-term borrowings recognized in profit or loss for the years 2023 and 2022 amounted to $17,392 and $18,939, respectively.

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(12) Accounts payable (including related parties)

(13) (14)	Accounts payables Accrued accounts payables Other payables Payables for salaries Others Other current liabilities Refund liabilities Others	December 31, 2023 $ 75,033 110 $ 75,143 December 31, 2023 $ 35,379 37,347 $ 72,726 December 31, 2023 $ 5,582 1,710 $ 7,292	December 31, 2022
			$ 115,134 1,975 $ 117,109 December 31, 2022
			$ 37,832 30,273 $ 68,105 December 31, 2022
			$ 5,527 1,447 $ 6,974

- (15) Long term borrowings

Borrowing period Type of borrowing and repayment term Interest rate range Collateral December 31, 2023 Bank Secured Borrowings December 29, 2021~ December 29, 2.42% Note 8 $ 200,000 2024. Interests shall be paid monthly, and the principal shall be repaid at maturity. Less: the current portion ( 200,000) $ - Borrowing period Type of borrowing and repayment term Interest rate range Collatera l December 31, 2022 Bank Secured Borrowings December 29, 2021~ December 29, 2.17.% Note 8 200,000 2024. Interests shall be paid monthly, and the principal shall be repaid at maturity. - Less: the current portion $ 200,000

(16) Other non - current liabilities

Accrued pension liabilities Guaranteed deposits received	December 31, 2023 $ 45,735 1,841 $ 47,576	December 31, 2022
		$ 54,499 1,078 $ 55,577

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(17) Pensions

1.(1) The Company has a defined benefit pension plan in accordance with the Labor Standards Law of Taiwan, covering all regular employees’ service years prior to the enforcement of the Labor Pension Act on July 1, 2005 and service years thereafter of employees who chose to continue to be subject to the pension mechanism under the Law. Under the defined benefit pension plan, two units are accrued for each year of service for the first 15 years and one unit for each additional year thereafter, subject to a maximum of 45 units. Pension benefits are based on the number of units accrued and the average monthly salaries and wages of the last 6 months prior to retirement. The Company contributes monthly an amount equal to 2% of the employees’ monthly salaries and wages to the retirement fund deposited with Bank of Taiwan, the trustee, under the name of the independent retirement fund committee.
(2) The amounts recognized in the balance sheets are as follows:

The amounts recognized in the balance sheets are as follows:
December 31, 2023 Present value of defined benefit obligations contributed ($ 65,199) Fair value of plan assets 18,638 ( 46,561) Cumulative unadjusted amount 826 Net liabilities recognized in the balance sheets ($ 45,735)	December 31, 2022
	($ 80,836) 25,524
	( 55,312) 813
	($ 54,499)

(3) Changes in net defined benefit liabilities are as follows:

	2023
Present value of defined benefit obligations	Fair value of plan assets	Net defined benefit liability ($ 55,312) ( 315) ( 664) ( 56,291) 130 130 9,600 - ($ 46,561)
($ 80,836) ( 315) ( 970) ( 82,121) 71 71 - 16,851 ($ 65,199)	$ 25,524 - 306 25,830 59 59 9,600 ( 16,851) $ 18,638 2022
Present value of defined benefit obligations	Fair value of plan assets	Net defined benefit liability ($ 67,029) ( 234) ( 582) ( 67,845)
($ 83,138) ( 347) ( 582) ( 84,067)	$ 16,109 113 - 16,222

Remeasurements

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Actuarial gains and losses arising from changes in financial assumptions 2,899 Experience adjustments ( 766) 2,133 Pension fund contribution - Paid pension 1,098 At December 31 ($ 80,836)	- 800 800 9,600 ( 1,098) $ 25,524	2,899 34 2,933 9,600 - ($ 55,312)

(4) The Bank of Taiwan was commissioned to manage the Fund of the Company’s defined benefit pension plan in accordance with the Fund’s annual investment and utilization plan and the “Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund” (Article 6: The scope of utilization for the Fund includes deposit in domestic or foreign financial institutions, investment in domestic or foreign listed, over-the-counter, or private placement equity securities, investment in domestic or foreign real estate securitization products, etc.). With regard to the utilization of the Fund, its minimum earnings in the annual distributions on the final financial statements shall be no less than the earnings attainable from the amounts accrued from two -year time deposits with the interest rates offered by local banks. If the earnings are less than aforementioned rates, government shall make payment for the deficit after being authorized by the Regulator. The Company has no right to participate in managing and operating that fund and hence the Company is unable to disclose the classification of plan asset fair value in accordance with IAS 19 paragraph 142. The composition of fair value of plan assets as of December 31, 2023 and 2022 is given in the Annual Labor Retirement Fund Utilization Report announced by the government.
(5) The principal actuarial assumptions used in calculating pension are summarized as follows:

Discount rate Future salary increases rate	2023 1.20% 1.70%	2022 1.20%
		1.70%

The assumption of future mortality is estimated based on the sixth empirical life table in Taiwan.

The analysis of the present value of the definite benefit obligations for changes in the main assumptions adopted is as follows:

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Discount rate Increase by 1% Decrease by 1% December 31, 2023 Effect on present value of defined benefit obligations ($ 4,498) $ 4,614 December 31, 2022 Effect on present value of defined benefit obligations ($ 5,577) $ 5,723	Future salary increases rate Increase by 1% Decrease by 1% $ 3,929 ($ 3,855) $ 4,874 ($ 4,780)	Future salary increases rate Increase by 1% Decrease by 1% $ 3,929 ($ 3,855) $ 4,874 ($ 4,780)
	Increase by 1% $ 3,929 $ 4,874
		($ 3,855) ($ 4,780)

The sensitivity analysis above is based on the analysis of the impact of a single assumption change with other assumptions unchanged. In practice, many assumptions may be correlated.The methods used in the sensitivity analysis in this period are the same as those used in calculation of net pension liabilities in the balance sheets. The method and assumptions used in the sensitivity analysis in this period are the same as those in the previous period.

(6) The Group plans to contribute $9,600 to the pension plan in 2024.
(7) As of December 31, 2023, the weighted average duration of the pension plan is 7 years. The amount of pension that the Group plans to pay is $2,787 in 2024.
(1) Effective since July 1, 2005, the Company and its domestic subsidiaries have established a defined contribution pension plan (New Plan) under the Labor Pension Act, covering all regular employees with R.O.C. nationality. Under the New Plan, the Company and its domestic subsidiaries contribute monthly an amount based on 6% of the employees’ monthly salaries and wages to the employees’ individual pension accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of employment.
(2) The Company’s subsidiaries in Mainland China have a defined contribution plan. Monthly contributions to an independent fund administered by the government in accordance with the pension regulations in the People’s Republic of China are based on a certain percentage of employees’ monthly salaries and wages. Other than the monthly contributions, the Group has no further obligations.
(3) The pension costs recognized under the defined contribution pension plans of the Group were $11,006 and $10,769 for the years ended December 31, 2023 and 2022, respectively.

(18) Ordinary shares

As of December 31, 2023, the Company’s authorized capital was $9,450,000 (including 20,000 thousand shares which for employee stock option), and the paid -in capital was $142,719 and preferred shares $160,000, with a par value of $10 (in dollars) per share. All proceeds from shares issued have been collected.

The Group’s outstanding shares are shown as below: (Unit ： share)

2023 At January 1 14,135,561 Capital reduction to cover accumulated deficit - Treasury stocks acquired by subsidiaries( 2,653) At December 31 14,132,908	2022
	44,463,407 ( 30,327,846) - 14,135,561

The Group’s outstanding preferred shares are shown as below:(Unit ： share)

2023 At January 1 16,000,001 Capital reduction to cover accumulated deficit - At December 31 16,000,001	2022
	50,000,003 ( 34,000,002) 16,000,001

In order to improve the financial structure, the shareholders’ meeting on November 16 , 2022 resolved to execute capital reduction to cover the accumulated deficit of $643,278. 30,328 thousand of ordinary shares and 34,000 thousand of preferred shares were cancelled by a par value of NT$10 per share, and the capital reduction rate was 68%. This capital reduction was approved by the competent authority on December 6 , 2022, and the base date of the capital

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reduction was December 8, 2022.

On October 12, 2012, the Company resolved by the Extraordinary Meeting of Shareholders to handle the cash capital increase by convertible preferred shares through private placement. The purpose of the cash capital increase is to increase working capital. The number of private placement shares is 333,333,350, and the subscription price per share is $1.5. The capital increase has raised $500,000, and the change registration has been completed . The main rights and obligations of this convertible preferred shares issued by private placement are shown as below:
(1) The dividends of preferred shares are not cumulative.
(2) The dividends of preferred shares shall be paid before distributing dividends to ordinary shareholders, which are calculated at an annual interest rate of 3% based on the issue price.
(3) Except when the dividends of ordinary shares distributed in the year of the aforementioned dividends exceed 3% of the par value, preferred shares shall not participate in the distribution of ordinary shares' earnings or capital reserves before the conversion.
(4) The issuance period of this preferred shares is five years. After the period, if the shareholders do not perform the conversion, the preferred stock dividend has been changed to "3% annual interest and cumulative"
(5) The preferred shareholders have the right to vote, to elect, and to be elected.
(6) When the Company issues new shares by cash, preferred shareholders have the same preemptive stock options as ordinary shareholders
(7) When the Company distribute the residual assets, the preferred shareholders have the same order and percentage as ordinary shareholders.
(8) According to Article 68 of the “Regulations Governing the Offering and Issuance of Securities by the Issuer,” the private placement preferred shares issued can apply for public offering after three years from the date of delivery of private placement securities.
(9) The preferred shareholders have no right to sell back.
(10) Investors may submit conversion applications to the issuing company at any time, except for suspension period, since the date from two years after the issuance of preferred shares. Each preferred share shall be converted into 1 ordinary share.
(11) The Board of Directors is authorized to formulate the issuance, conversion, and other related matters of preferred shares in accordance with the relevant laws and regulations.
(12) If the Company executes capital reduction, which gives rise to shares held by shareholders reduced based on the percentage of ownership, the accumulated dividend rights of preferred shares before the capital reduction will not be eliminated due to the capital reduction. After the capital reduction, the dividends shall be accumulated according to the number of shares reduced.
3.Treasury stock
(1) The subsidiary of the Company, BAYCOM OPTO-ELECTRONICS TECHNOLOGY CO., LTD., acquired 6,447 thousand of shares of the Company in 2011 for group strategic investment plans. The carrying amount per share is $4.89, and the total carrying amount is $31,496. The amount recognized in treasury stock for the 2,821 shares calculated by the percentage of ownership of 43.76% is $13,784.
(2) After capital reduction and subscription of odd shares, the number of shares held by BAYCOM OPTO-ELECTRONICS TECHNOLOGY CO., LTD. are 318 thousand and 312 thousand, respectively, as of December 31, 2023 and 2022. The average carrying amount per share and the fair value per share amounted to $99.34 and $101.15, and $15.05 and $6.01, respectively, as of December 31, 2023 and 2022 .

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(19) Capital reserve

Pursuant to the R.O.C. Company Act, capital reserve arising from paid -in capital in excess of par value on issuance of common stocks and donations can be used to cover accumulated deficit or to issue new stocks or cash to shareholders in proportion to their share ownership, provided that the Company has no accumulated deficit. Further, the R.O.C. Securities and Exchange Act requires that the amount of capital reserve to be capitalized mentioned above should not exceed 10% of the paid in capital each year. Capital reserve should not be used to cover accumulated deficit unless the legal reserve is insufficient.

2023 Change in net equity of associates At January 1 $ 6,237 Changes in equity of associates not recognized according to percentage of ownership - At December 31 $ 6,237	2022
	Change in net equity of associates $ 6,227 10
	$ 6,237

(20) Retained earnings (accumulated deficits)

Under the Article of Incorporation, the annual net income of the Company shall be appropriated in accordance with the priorities listed as follows:
(1) Tax payment.
(2) Recovery of losses.
(3) Appropriation of 10% for legal reserve unless the total legal reserve accumulated has already reached the amount of Groups’ authorized capital.
(4) Appropriation or reversal of special reserve pursuant to applicable law or regulation.
(5) Distribution of preferred shares dividends
(6) The Board of Directors proposes to the shareholders meeting for resolutions to distribute the amount of the net profit, which includes the balance of the undistributed profit from the previous year, as dividends to the shareholders.
The Company’s dividend distribution policy is subject to the Company’s current and future investment environment, fund requirements, competition from local and abroad, and capital budgets, as well as taking into consideration the interests of shareholders, balance dividend, and the long-term financial planning. The Board of Directors shall prepare a proposal for the distribution of dividends to shareholders meeting each year in accordance with the law. The proportion of cash dividends distributed from the aforementioned shareholders' dividends each year shall not exceed 50%, but shall not be lower than 5%. However, this dividend distribution policy can be adjusted by the Board of Directors after resolution and submitted to the shareholders meeting for resolution according to the actual operating conditions.
Except for covering accumulated deficit or issuing new stocks or cash to shareholders in proportion to their share ownership, the legal reserve shall not be used for any other purpose. However, the legal reserve may be distributed by issuing new shares or by cash, for the portion in excess of 25% of the paid -in capital.
In accordance with the regulations, the Company shall set aside special reserve from the debit balance on other equity items at the balance sheet date before distributing earnings. When debit balance on other equity items is reversed subsequently, the reversed amount could be included in the distributable earnings.
5.The accumulated deficits off-set for 2022 were resolved by the shareholders meeting on June 16, 2023.

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(21) Operating revenue

2023 2022 Revenue from contracts with customers $ 804,032 $ 1,010,890

1.Disaggregation of revenue from contracts with customers

The Group’s revenue can be divided into major product lines and geographical regions as follows:

	follows:	follows:	follows:
Rev enu e fro m con tra ct s wit h ext ern al cus tom er s Rev enu e fro m con tra ct s wit h ext ern al cus tom er s	2023`：` Bus ine ss com mu ni cat io Taiwan USA $436,203 $13,033 2022`：` Bus ine ss com mu ni cat io Taiwan USA $446,591 $61,026	2023`：` Bus ine ss com mu ni cat io		n sy ste m Others $10,913 n sy ste m Others $31,497	Int ell ig ent ele ctr om e sys tem an d ot he Taiwan USA $69,522 $560 Int ell ig ent ele ctr om e sys tem an d ot he Taiwan USA $109,230 $250	Int ell	ig ent ele ctr om e	c han ica l r s Others $16,270 c han ica l r s Others $31,696	Optical fibre cable Taiwan USA Others $217,377 $10,518 $29,636 Optical fibre cable Taiwan USA Others $180,946 $35,533 $114,121	Total $ 804,032 Total $1,010,890
							sys tem an d ot he
			USA $61,026

2.Contract liabilities

(1)The contract assets and contract liabilities related to revenue from contracts with customers recognized by the Group are as follows :

December 31, 2023 Contract liabilities - construction contracts $ 10,091 Contract liabilities - product sales contracts $ 5,091	December 31, 2022 $- $ 4,392	January 1, 2022
		$- $ 3,964

(2)Contract liabilities at the beginning of the period recogni zed as revenue in the current period

Product sales contract	2023 $ 4,153	2022 $ 3,794

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(22) Interest income

(23) (24) (25)	2023 Interests from bank deposits $ 11,939 Other income 2023 Rent income $ 1,335 Dividend income 6,806 Other income - others 3,649 $ 11,790 Other gains and losses 2023 Losses on disposal of property, plant and equipment $ - Gains on disposal of investments - Gains arising from lease modification - Foreign currency exchange gains 4,813 Gains on financial assets at fair value through profit or loss 474 Other net loss ( 1,849) $ 3,438 Financial cost 2023 Interest expense $ 22,152	2022 $ 4,838 2022 $ 70 14,747 944 $ 15,761 2022 ($ 4) 80 32 20,738 1,699 ( 1,245) $ 21,300 2022 $ 24,106

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(26) Additional information on nature of expenses

2023 Employee benefits expenses $ 232,083 Depreciation expenses of property, plant and equipment 10,709 Depreciation expenses of right-of-use assets 14,004 Amortization expenses of intangible assets 2,252 $ 259,048	2022
	$ 234,931 9,102 14,451 2,565 $ 261,049

(27) Employee benefit expenses

Wages and salaries Labor and health insurance fee Pension expenses Other personnel expenses	2023 $ 193,259 16,705 11,985 10,134 $ 232,083	2022
		$ 196,466 16,763 11,585 10,117 $ 234,931

According to the Company’s Articles of Incorporation, the Company shall allocate remuneration to employees at the rate of 1%~10% of annual profits, and to directors at the rate of no higher than 5% of annual profits during the period; provided, however, that when the Company has accumulated losses, the profits shall be preserved to make up for losses, before distributing to employees and directors.
The amount shall be accrued based on the profit condition as of the current period for the years ended December 31, 2023 and 2022. Since as of December 31, 2023 and 2022, the Company incurrs accumulated deficit, the amounts accrued are $0.
The information about the employees’ and directors’ remuneration resolved by the board of directors is available at the Market Observation Post System website.

(28) Income tax

1.Income tax expenses

(1) Components of income tax expense:

Current income tax`：` Current income tax on profits for the year Additional tax on unappropriated earnings Overestimation on income tax in prior years Total current income tax Income tax expense	2023 $ 6,718 10 ( 946) 5,782 $ 5,782	2022
		$ 9,701 10 ( 1,223) 8,488 $ 8,488

(2) Amount of income taxes related to other comprehensive income ： None.
(3) Amount of income tax on income directly debited or credited in equity ： None.
2.The relationship between income tax expenses and accounting profit

2023 2022

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Income tax calculated by profit (loss) before tax multiplying the enacted tax rates ($ 273) Tax exempt income based on tax laws ( 4,345) Origination and reversal of temporary differences 1,923 Additional tax on unappropriated earnings 10 Overestimation on income tax in prior years ( 946) Tax losses not recognized as deferred income tax assets 9,413 $ 5,782	$ 9,961 ( 715) 455 10 ( 1,223) - $ 8,488

The amounts of deferred income tax assets or liabilities arising from temporary differences and tax losses are as follows ：

At January 1 Deferred tax assets -Temporary differences: Allowance for loss on decline in value of inventory $ 473 Tax loss 115,508 $ 115,981 Deferred tax liabilities -Temporary differences: Remeasurement of defined obligations ($ 880)			2023		At December 31
	At January 1	Recognized in Profit or Loss $ - - $- $-	Recognized in Other Comprehensive Income $ - - $- $-	Recognized in equity $ - - $- $-
					$ 473 115,508 $ 115,981 ($ 880)

At January 1 Deferred tax assets -Temporary differences: Allowance for loss on decline in value of inventory $ 473 Tax loss 115,508 Deferred tax assets $ 115,981 Deferred tax liabilities -Temporary differences: Remeasurement of defined obligations ($ 880)			2022		At December 31 $ 473 115,508 $ 115,981 ($ 880)
		Recognized in Profit or Loss $ - - $- $-	Recognized in Other Comprehensive Income $ - - $- $-	Recognized in equity $ - - $- $-

4.Expiration dates of unused taxe loss and amounts of unrecognized deferred income tax assets are as follows:

December 31, 2023

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Year		Amount		Unused	Unrecognized deferred	Unrecognized deferred	Year of
incurred		filed/assessed		amount		income tax assets	expiration
2014	$	135,719	$	135,719	$	135,719	2024
2015		278,639		278,639		278,639	2025
2016		99,269		99,269		99,269	2026
2017		116,640		116,640		116,640	2027
2018		62,637		62,637		62,637	2028
2019		95,985		95,985		50,340	2029
2021		498,607		498,607		-	2031
2022		23,384		23,384		-	2032
2023		9,904		9,904		-	2033
	$	1,320,784	$	1,320,784	$	743,244

				December 31,	2022
Year incurred 2013 2014 2015 2016 2017 2018 2019 2021 2022	$	Amount filed/assessed 140,434 135,719 278,639 99,269 116,640 62,637 95,985 498,607 22,512 1,450,442	$		Unrecognized deferred income tax assets $ 140,434 135,719 278,639 99,269 116,640 62,637 39,564 - - $ 872,902	Year of expiration 2023 2024 2025 2026 2027 2028 2029 2031 2032
	$				$

As described in Note 12(4) of the financial statements, the Group continues improving the operating condition, thus, tax losses may be utilized in future periods have been recognized as deferred income tax assets.

5.Deductible temporary differences not recognized deferred income tax assets ：

Deductible temporary differences	December 31, 2023 $ 132,169	December 31, 2022
		$ 176,114

6.Profit-seeking Enterprise Income Taxes of the Company have been verified by the tax collection authority until 2021.

~45~

(29) Earnings (losses) per share

2023 Weighted average number of ordinary shares outstanding (in thousands of shares) Amount after tax Basic losses per share Losses attributable to shareholders of the parent ($ 36,094) less`：`preferred shares dividends ( 720) Losses attributable to ordinary shareholders of the parent ($ 36,814) 14,133 Diluted losses per share Losses attributable to shareholders of the ordinary shareholders of the parent ( 36,814) 14,133 Effect of dilutive potential ordinary shares 3% of cumulative convertible preferred shares - - Losses attributable to shareholders of the ordinary shareholders of the parent plus the effect of potential ordinary shares ($ 36,814) 14,133 2022 Weighted average number of ordinary shares Amount after tax outstanding (shares in thousand) Basic earnings per share Profit attributable to shareholders of the parent $ 9,378 less`：`preferred shares dividends ( 2,123) Profit attributable to ordinary shareholders of the parent $ 7,255 14,136 Diluted losses per share Losses attributable to shareholders of the ordinary shareholders of the parent 7,255 14,136 Effect of dilutive potential ordinary shares 3% of cumulative convertible preferred shares - 16,000 Losses attributable to shareholders of the ordinary shareholders of the parent plus the effect of potential ordinary shares $ 7,255 30,136	2023 Weighted average number of ordinary shares outstanding (in thousands of shares) Amount after tax Basic losses per share Losses attributable to shareholders of the parent ($ 36,094) less`：`preferred shares dividends ( 720) Losses attributable to ordinary shareholders of the parent ($ 36,814) 14,133 Diluted losses per share Losses attributable to shareholders of the ordinary shareholders of the parent ( 36,814) 14,133 Effect of dilutive potential ordinary shares 3% of cumulative convertible preferred shares - - Losses attributable to shareholders of the ordinary shareholders of the parent plus the effect of potential ordinary shares ($ 36,814) 14,133 2022 Weighted average number of ordinary shares Amount after tax outstanding (shares in thousand) Basic earnings per share Profit attributable to shareholders of the parent $ 9,378 less`：`preferred shares dividends ( 2,123) Profit attributable to ordinary shareholders of the parent $ 7,255 14,136 Diluted losses per share Losses attributable to shareholders of the ordinary shareholders of the parent 7,255 14,136 Effect of dilutive potential ordinary shares 3% of cumulative convertible preferred shares - 16,000 Losses attributable to shareholders of the ordinary shareholders of the parent plus the effect of potential ordinary shares $ 7,255 30,136		2023	2023
		Weighted average number of ordinary shares outstanding (in thousands of shares) Amount after tax ($ 36,094) ( 720) ($ 36,814) 14,133 ( 36,814) 14,133 - - ($ 36,814) 14,133 2022	Weighted average number of ordinary shares outstanding (in thousands of shares)
				14,133 14,133 - 14,133 2022

		($ 36,814)

	Weighted average number of ordinary shares outstanding (shares in thousand) 14,136 14,136 16,000 30,136


Losses attributable to shareholders of the ordinary shareholders of the parent Effect of dilutive potential ordinary shares 3% of cumulative convertible preferred shares Losses attributable to shareholders of the ordinary shareholders of the parent plus the effect of potential ordinary shares

The Company reduced the capital to make up for the deficit in the year 2022. The weighted average number of shares outstanding for the year ended December 31, 2022 has been retrospectively adjusted to the shares after the capital reduction to make up for the deficit.

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(30) Supplemental information on cash flows

Investing activities with partial cash payments ：

Purchase of property, plant and equipment Add: Opening balance of payables on equipment Less: Ending balance of payables on equipment Less: Opening balance of prepayments for equipment Add: Ending balance of prepayments for equipment Cash paid	2023 $ 16,965 1,333 ( 3,041) ( 4,174) 808 $ 11,891	2022
		$ 9,284 906 ( 1,333) ( 669) 4,174 $ 12,362

(31) Changes in liabilities from financing activities

Short-term borrowings January 1, 2023 $ 755,000 Changes in cash flows from financing activities ( 431,000) Interest expenses - Interest expenditures - Increase in lease liabilities - December 31, 2023 $ 324,000 Short-term borrowings January 1, 2022 $ 523,112 Changes in cash flows from financing activities 231,888 Interest expenses - Interest expenditures - Increase in lease liabilities - Modifications in lease liabilities - December 31, 2022 $ 755,000	Long-term borrowings (including the Guaranteed deposits	Lease principal repayment $ 194,114 ( 12,434) 4,739 ( 4,739) 4,158 $ 185,838 Lease principal repayment $ 203,583 ( 12,681) 4,952 ( 4,952) 3,180 32 $ 194,114	Total liabilities from financing activities $ 1,150,192 ( 442,671) 4,739 ( 4,739) 4,158 $ 711,679 Total liabilities from financing activities $ 1,206,765 ( 59,785) 4,952 ( 4,952) 3,180 32 $ 1,150,192
	current portion) received $ 200,000 $ 1,078 - 763 - - - - - - $ 200,000 $ 1,841 Long-term borrowings (including the Guaranteed deposits
	current portion) received $ 480,000 $ 70 ( 280,000) 1,008 - - - - - - - - $ 200,000 $ 1,078

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7. RELATED PARTY TRANSACTIONS

(1) Parent Company and the final Controller

The Company is controlled by TECO Electric & Machinery Co., Ltd. (registered in Taiwan), which owns 63.52% of the shares of the Company, and is the ultimate parent company and ultimate controller of the Company. The remaining 36.48% is held by the public.

(2) Names and relationships of related parties

Names of related parties Related Party Category TECO Electric & Machinery Co., Ltd. Ultimate parent company Guandehong Technology Co., Ltd. Substantive related party Taiwan Ericsson Co., Ltd. Substantive related party WANTGO.COM CO., LTD. Substantive related party Wuxi Teco Electric & Machinery Co., Ltd Fellow subsidiary JIE ZHENG PROPERTY SERVICE & MANAGEMENT CO., LTD. Fellow subsidiary Qindao Teco Precision Mechatronics Co., Ltd. Fellow subsidiary INFORMATION TECHNOLOGY TOTAL SERVICES CO., LTD. Fellow subsidiary TONG DAI CO., LTD. Fellow subsidiary Dong An Asset Development Management Co., Ltd. Fellow subsidiary TECO Technology （ Vietnam ） Co. ， Ltd. Fellow subsidiary Yatec Engineering Corporation Fellow subsidiary E-Joy International Co., Ltd. Fellow subsidiary A-OK Technology Service Co., Ltd. Fellow subsidiary Asia Innovation Technology (Xiamen) Co., Ltd. Fellow subsidiary Taiwan Pelican Express Co., Ltd. Fellow subsidiary Taian Shen Electric Co., Ltd. Fellow subsidiary Taian (Subic) Electric Co., Ltd. Fellow subsidiary TAIAN TECHNOLOGY (WUXI) CO. LTD. Fellow subsidiary Century Development Co., Ltd. Fellow subsidiary SANKYO CO.,LTD Fellow subsidiary Shanghai TECO Electric & Machinery Co., Ltd. Fellow subsidiary Motovario S.p.A Fellow subsidiary TECO Australia Pty Limited (TAC) Fellow subsidiary TECO - Westinghouse Motor Company Fellow subsidiary TECO (PHILIPPINES)3C&APPIANCES,INC Fellow subsidiary TECO ELECTRIC & MACHINERY (PTE) LTD. Fellow subsidiary TECO New Zealand Ltd. Fellow subsidiary YUBANTEC INDIA PRIVATE LIMITED Other related party

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(3) Significant transactions with related parties

1.Operating revenue

Operating revenue
Sales of goods`：` Fellow subsidiary Substantive related party Parent company	2023 $ 21,240 58 6,627 $ 27,925	2022
		$ 36,965 54 16,894 $ 53,913

Sales are based on normal commercial terms and conditions.

Purchases of goods

Purchases of goods
Purchases of goods Parent Company	2023 $ 16,105	2022
		$ 13,680

Purchases of goods are based on normal commercial terms and conditions.

3.Receivables from related parties

Notes receivables`：` Fellow subsidiary Accounts receivables`：` Fellow subsidiary Parent company Subtotal Other receivables`：` Substantive related party Allowance for bad debts Subtotal Total	December 31, 2023 $ 400 6,052 1,987 8,039 11 - 11 $ 8,450	December 31, 2022 $ 2,220 10,304 1,692 11,996 170 ( 164) 6 $ 14,222

Receivables from related parties mainly arise from sales transactions, with a maturity of 30 to 120 days after the date of sale.

4.Payables to related parties

Payables to related parties
Accounts payables`：` Parent company Other payables`：` Fellow subsidiary Parent Company	December 31, 2023 $ 583 $ 26 266 $ 292	December 31, 2022
		$ 1,346 $ 60 481 $ 541

The accounts payable to related parties are mainly from purchase transactions, and payment shall be made within 25 to 90 days after receipt of goods. There is no interest attached to th e payables. 5.Service costs/other expenses

Service costs/other expenses
Fellow subsidiary Taiwan Ericsson Co., Ltd. Parent Company	2023 $ 3,947 - 1,984 $ 5,931	2022
		$ 221 ( 3,297) 2,400 ($ 676)

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6.Lease transactions － lessee
(1) The Group rents offices and parking areas from fellow subsidiaries. The periods of the lease contracts are 1 year. The rents are paid at the end of each month or quarter.

The Group rents cars from the parent company. The lease period is 1 year, and the rents are paid at the end of each month.

(2) Acquisition of right-of-use assets

Fellow subsidiary (3) Rent expenses Fellow subsidiary Parent company Total		2023 $ 3,573 2023 $ 91 345 $ 436	2022 $ 3,573 2022 $ 48 382 $ 430	2022 $ 3,573 2022 $ 48 382 $ 430


				$ 48 382 $ 430

The rent expenses recognized for the years ended December 31, 2023 and 2021 are in the scope leases of low value in IFRS 16.

(4) Lease liabilities

Lease liabilities
A. Interest expenses Fellow subsidiary	2023 $ 48	2022
		$ 48

7.Leasing transaction － Lessor

In 2023 and 2022, the Group received rental income of $ 73 and $65 respectively from leasing part of the plants and offices to related parties, which is collected on a monthly basis.

Substantive related party Guandehong Technology Co., Ltd.	December 31, 2022 $ 12 61 $ 73	December 31, 2021 $ 12 53
		$ 65

(4) Key management compensation

Short-term employee benefits Post-employment benefits Total	December 31, 2023 $ 19,862 428 $ 20,290	December 31, 2022
		$ 18,123 216
		$ 18,339

8. RESTRICTED ASSETS

The details of the Group’s restricted assets are as follows:

Carrying amount Assets Item December 31, 2023 Bank deposits (recognized as financial assets at amortized cost) $ 85,095 Guaranteed deposits paid 681 Financial assets at fair value through other comprehensive income`－`non-current 242,530 Plant in Hsinchu 74,170 $ 402,476	December 31, 2022 $ 247,074 662 460,000 77,394 $ 785,130	Purpose Lease security deposit and borrowing restrictions Guarantee for the customs duties Guarantee for bank loans Guarantee for bank loans

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SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNISED CONTRACT COMMITMENTS
(1) Contingencies

None.

(2) Commitments

As of December 31, 2023, the Group commissioned banks to issue the guarantee bills and guarantee letters for the fulfillment of sale contracts and bids, with a total amount of $ 5,788. 10. SIGNIFICANT DISASTER LOSS

None.

11. SIGNIFICANT SUBSEQUENT EVENTS

None.

12. OTHERS

(1) Capital management

The Group’s objectives when managing capital are to safeguard the Group’s ability to operate with the goal to provide returns for shareholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure . The group may issue new shares or sell assets to reduce debts. The Group monitors capital on the basis of the debt capital ratio. This ratio is calculated as net debt divided by total capital. Net debt is calculated as total borrowings (including ‘current and non -current borrowings’ as shown in the consolidated balance sheet) less cash and cash equivalents. Total capital is calculated as ‘equity’ as shown in the consolidated balance sheet add the total net debts.

The strategy of capital management is the same in 202 3 and 2022. The Group is committed to improving the capital structure and reducing the debt -to-capital ratio through appropriate planning and management. The debt to capital ratios as of December 31, 2023 and 2022 are shown as below ：

Total borrowings Less`：`cash and cash equivalents Net debt Total equity Total capital Debt to capital ratio	December 31, 2023 $ 524,000 ( 143,638) 380,362 464,668 $ 845,030 45%	December 31, 2022
		$ 955,000 ( 265,304) 689,696 475,019
		$ 1,164,715 59%

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`(2)` Financial instruments

1.Financial instruments by category

December 31, 2023 Financial assets Financial assets at fair value through profit or loss Financial assets mandatorily measured at fair value through profit or loss $ 14,430 Financial assets at fair value through other comprehensive income 266,190 Financial assets at amortized cost Cash and cash equivalents 143,638 Financial assets at amortized cost 254,644 Notes receivables 17,734 Accounts receivables 138,415 Other receivables 9,460 Guaranteed deposits paid 2,749 $ 847,260 December 31, 2023 Financial liabilities Financial liabilities at amortized cost Short-term borrowings $ 324,000 Notes payables 2,901 Accounts payables 75,143 Other payables 72,726 Long-term borrowings (including current portion) 200,000 Guaranteed deposits received 1,841 $ 676,611 Lease liabilities $ 185,838	December 31, 2022
	$ 10,493 499,149 265,304 295,081 28,684 165,542 2,320 2,066
	$ 1,268,639 December 31, 2022
	$ 755,000 3,142 117,109 68,105 200,000 1,078 $ 1,144,434 $ 194,114

2.Risk management policies

(1) The Group’s operation is influence by several financial risks, including market risk (including foreign exchange risk, interest rate risk and price risk), credit risk, and liquidity risk. The Group's overall risk management policy focuses on the unpredictable item of financial markets and seeks to reduce the risk that potentially pose adverse effects on the Group's financial position and financial performance.

(2) Risk management is executed by the Group’s finance department by following authorize policies. The finance department cooperates with the Group's operating units, and take charge in identifying, evaluating and hedging financial risks. The Management has a written policy covering overall risk management. It also has written policies covering specific issues, such as exchange rate risk, interest rate risk, credit risk, derivative and non-derivative financial instruments used, and the investment of excess working capital.

3.Significant financial risks and degrees of financial risks

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(1) Market risk

Foreign exchange risk

A. The Group is operating on a cross-border basis, so it is exposed to foreign exchange risks arising from the differences between the functional currencies of the Company and its subsidiaries, primarily USD and CNY. The related foreign exchange risks arise from future commercial transactions and assets and liabilities already recognized.
B. The Group manages its foreign exchange risk through the Group Finance Department. To manage the foreign exchange risk arising from future business transactions and recognized assets and liabilities, all companies within the Group are regularly reviewed by the Group Finance Department for exchange rate fluctuations. When future business transactions, recognized assets or liabilities are priced in currencies other than the functional currency of the entity, foreign exchange risk arises.
C. The Group's businesses involve a number of non -functional currencies (the Group's functional currency is NTD), so they are affected by exchange rate fluctuations. The foreign assets and liabilities with significant exchange rate fluctuations are as follows.

December 31, 2023	December 31, 2023	December 31, 2023	Carrying amount
Foreign currency amount(thousand) Exchange rate $ 3,671 30.705 3,523 4.327 $ 1,067 30.705 1,250 4.327 December 31, 2022 Foreign currency amount(thousand) Exchange rate $ 8,852 30.710 5,302 4.408 $ 2,219 30.710 2,189 4.408
			(NTD) $ 112,718 15,244 32,762 5,409 Carrying amount
	Foreign currency amount(thousand) $ 8,852 5,302 $ 2,219 2,189	Exchange rate 30.710 4.408 30.710 4.408
			(NTD) $ 271,845 23,371 68,145 9,649

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D.The total amount of all exchange gains (losses) (including realized and unrealized) recognized by the Group due to exchange rate fluctuations are $4,813 and 20,738 respectively for the years ended December 31, 2023 and 2022.
E. The foreign currency market risks arising from significant fluctuations in exchange rate are analyzed as follows :

2023 Sensitivity Analysis Extent of variation Effect on profit or loss (Foreign currency: Functional currency) Financial assets Monetary items USD`：`TWD 1% $ 1,127 CNY`：`TWD 1% 152 Financial liabilities Monetary items USD`：`TWD 1% ($ 328) CNY`：`TWD 1% ( 54) 2022 Sensitivity Analysis Extent of variation Effect on profit and loss (Foreign currency: Functional currency) Financial assets Monetary items USD`：`TWD 1% $ 2,718 CNY`：`TWD 1% 234 Financial liabilities Monetary items USD`：`TWD 1% ($ 681) CNY`：`TWD 1% ( 96)	2023	2023	Effect on other comprehensive income $ - - $ - - Effect on other comprehensive income
	Extent of variation
		$ 2,718 234 ($ 681) ( 96)	$ - - $ - -

Price risk

A. The Group’s equity instruments, which are exposed to price risk, are financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income. To manage its price risk arising from investments in equity instruments, the Group diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the Group.

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B. The Group mainly invests in equity instruments and open -end funds issued by the domestic companies. The prices of the equity instruments are susceptible to market price risk arising from uncertainties about future value of the investments. Assuming a hypothetical increase or decrease of 1% in the price of the aforementioned financial assets at fair value through profit or loss while the other conditions remain unchanged could increase and decrease the Group’s net income after tax for the years ended December 31, 2023 and 2022 by $144 and $105, respectively. A change of increase or decrease 1% in the price of the aforementioned financial assets at fair value through other comprehensive income could increase or decrease the Group’s other comprehensive income for the years ended December 31, 2023 and 2022 by $2,662 and $4,991, respectively. Cash flow and fair value interest rate risk
A. The Group’s main interest rate risk arises from long -term and short-term borrowings with variable rates which expose the Group to cash flow interest rate risk. During the years ended December 31, 2023 and 2022, the Group’s borrowings at variable rates were denominated in USD and NTD.
B. Borrowings of the Group are measured at amortized cost and the interest rate will be repriced according to the contractual agreement every year, thus the Group is exposed to the risk of future market rate fluctuations.
C. If interest rates on borrowings had increased or decreased 1% with all other variables held constant, net income after-tax for the years ended December 31, 2023 and 2022 would have decreased or increased $4,192 and $7,640, respectively, mainly as a result of interest expenses varying by floating rate borrowings .
(2) Credit risk
A. Credit risk refers to the risk of financial loss to the Group arising from default by the clients or counterparties of financial instruments. Group is exposed to credit risks from accounts receivables that the counterparty is unable to pay off by the payment term, and the contractual cash flows at amortized cost.
B. The Group manages credit risk in terms of the Group. The Group only accepts banks or institutions assessed to be with good credit quality as correspondent bank or financial institutions. Based on the internal credit policies, the Group shall manage and implement credit risk analysis before determine payment terms and delivery terms with new customers. Internal risk control evaluates customers’ credit quality by considering the financial condition, past experiences, and other factors. The individual risk limits are established by the management level according to the internal rating, and the credit limit is monitored regularly.
C. Credit risk impairment assessment of financial assets at amortized cost ：
- (1) The Group adopts IFRS 9 assuming that if the contract payments were past due over 30 days based on the terms, there has been a significant increase in credit risk on that instrument since initial recognition; if past due over 90 days, a default has occurred.
- (2) The Group has taken into consideration of the forward -looking considerations to adjust historical and current information and consider the credit ratings of the issuing banks to estimate the expected credit losses.
- (3) The financial assets measured at amortized cost held by the Group include time deposits in banks and restricted deposits in banks, the credit ratings of which are all good, without any overdue in the past. Considering the overall economic environment without significant changes, the risk of credit loss is extremely low and the impact on the financial statements is also small.

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D. Credit Risk Impairment Assessment of Accounts Receivable and Notes Receivable ：
(1) The Group estimates the expected credit losses based on the simplified approach with a loss rate method for the accounts receivables and notes receivables from customers according to their ratings.
(2) The Group has incorporated an adjustment to the loss rate based on past and current information over a certain period to estimate the provision for losses on receivables and receivables as of December 31, 2023 and 2022, as follows:

December 31, 2023 Expected loss rate Total carrying amount Loss allowance December 31, 2022 Expected loss rate Total carrying amount Loss allowance	Group A 0.03%~1% $ 65,740 $ 169 Group A 0.03%~1% $ 84,260 $ -	Group B 0.03%~2% $ 31,562 $ - Group B 0.03%~2% $ 28,197 $ -	Group C 0.03%~5% $ 43,982 $ 4 Group C 0.03%~5% $ 69,428 $ 25	Group D 0.03%~10% $ 12,020 $ 392 Group D 0.03%~10% $ 10,214 $ 489	Group E 0.03%~30% $ 3,547 $ 137 Group E 0.03%~30% $ 2,687 $ 46	Total $156,851 $ 702 Total $ 194,786 $ 560

(3) The Group’s allowances of trade receivables are shown as below:

At January 1 Provision for impairment loss Reversal of impairment loss At December 31	2023 Accounts receivables $ 560 142 - $ 702	2022 Accounts receivables
		$ 622 - ( 62) $ 560

(3) Liquidity risk

A. Cash flow forecasting is performed by each operating entity of the Group and aggregated by Group treasury. The Financial Department of the Group monitors the forecast of the Group's liquidity needs to ensure that there are sufficient funds to meet operating needs and maintain sufficient uncommitted loan commitment at all times.
B. The Group of unutilized borrowing amounts are shown as below:

Floating Rate expiry within 1 year expiry more than 1 year	December 31, 2023 $ 387,030 12,543 $ 399,573	December 31, 2022
		$ 535,061 55,000 $ 590,061

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C.The table below analyses the Group’s non -derivative financial liabilities based on the remaining period at the balance sheet date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.

Non-derivative financial liabilities:

Non-derivative financial liabilities:
December 31, 2023 Less than 1 year Short-term loans $ 326,006 Notes payable 2,901 Accounts payable 75,143 Other payables 72,726 Lease liability 13,424 Long-term loans (including expiry within one year) 204,840	Between 1 and 2 years $ - - - - 12,993 -	Between 2 and 5 years $ - - - - 33,330 - ds	More than 5 years
			$ - - - - 177,763 -

Derivative financial liabilities ： None.

Non-derivative financial liabilities:

Non-derivative financial liabilities:
December 31, 2022 Less than 1 year Short-term loans $ 762,735 Notes payable 3,142 Accounts payable 117,109 Other payables 68,105 Lease liability 13,954 Long-term loans (including expiry within one year) 4,360 Derivative financial liabilities`：`None.	Between 1 and 2 years $ - - - - 13,124 4,160	Between 2 and 5 years $ - - - - 34,963 200,000	More than 5 years
			$ - - - - 188,873 -

The Group does not expect the timing of occurrence of the cash flows estimated through the maturity date analysis to be significantly earlier, nor expect the actual cash flow amount to be significantly different.

`(3)` Fair value information

1.The different levels that the inputs to valuation techniques are used to measure fair value of financial and non-financial instruments have been defined as follows:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. A market is regarded as active where a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. The fair value of the Group’s investment in listed stocks is included in Level 1.
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. The fair value of the Group’s investment in derivative instruments is included in Level 2.
Level 3: Unobservable inputs for the asset or liability. The fair value of the Group’s equity investment without active market is included in Level 3.

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2.Financial instruments not measured at fair value:

The carrying amounts of the Group’s financial instruments not measured at fair value (including cash and cash equivalents, financial assets at amortized cost, notes receivables, accounts receivables, other receivables, guaranteed deposits paid (recognized as other non-current assets and financial assets at amortized cost) , short-term borrowings, notes payables, accounts payables, other payables and long-term borrowings (including current portion) approximate to their fair values:

The related information on financial and non -financial instruments classified based on the nature of assets and liabilities, characteristics and fair value hierarchy is as follows :
(1) The related information on the nature of the assets and liabilities is as follows:

December 31, 2023 Level 1 Assets Fair value on a recurring basis Financial assets at fair value through profit or loss-Beneficiary certificates $14,430 Financial assets at fair value through other comprehensive income - Equity securities 265,089 Total $ 279,519 Debt`：`None. December 31, 2022 Level 1 Assets Fair value on a recurring basis Financial assets at fair value through profit or loss-Beneficiary certificates $ 10,493 Financial assets at fair value through other comprehensive income - Equity securities 498,382 Total $ 508,875 Debt`：`None.	Level 2 $ - - $- Level 2 $ - - $-	Level 3 $ - 1,101 $ 1,101 Level 3 $ - 767 $ 767	Total $ 14,430 266,190
			$ 280,620 Total $ 10,493 499,149
			$ 509,642

(2)The methods and assumptions the Group used to measure fair value are as follows:
- A. The Group used market quoted prices as their fair values (that is, Level 1) , which is closing price of listed shares.
- B. Except for financial instruments with active markets, the fair value of other financial instruments is measured by using valuation techniques.
- C.When assessing non-standard and low-complexity financial instruments, the Group adopts valuation technique that is widely used by market participants. The inputs used in the valuation method to measure these financial instruments are normally observable in the market.
There is no transfer between level 1 and level 2 in 2023 and 2022.
Changes of level 3 of financial instruments in 2023 and 2022:

Equity securities

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January 1, 2023 Gains recognized in other comprehensive income December 31, 2023 January 1, 2022 Gains recognized in other comprehensive income December 31, 2022	$ 767 334 $ 1,101 Equity securities $ 767 - $ 767

`(4)` The future financial fitness plan

As of December 31, 2023, the debt-to-capital ratio was 67%, which is 8 % lower than same period last year. The active plans for financial fitness were shown as below:

1.Operation perspective ： In order to strengthen operational performance, in addition to continuously deploying new technologies and actively integrating group resources, we will deepen management and strengthen financial structure in the future to enhance shareholder return on equity. The related important point as shown below:
(1) Actively promote ESG transformation and lau nch ESG-Ready platform. The 5 largest EST functions are completely modularized, which offers enterprises the options to deploy the required functions at which point of time, to establish ESG ability step by step and attain the best investment returns.
(2) Launch industrial Internet of Things "Intelligent Mechanical and Electrical Monitoring Equipment and Cloud Health Management Platform" series products, innovate applications and lead the industry.
(3) Strengthen team integration of combat capability, expand sales channels, and target mainland China, North America, Europe and emerging markets as the goal for expanding the product agency.
(4) To continue adjusting the channel structure, introduce the agency of new products, and improve product quality and strengthen after -sales maintenance services, to enhance profitability.
(5) In order to create the unique products and services, the Company will focus on the customers and create a large IT platform of digital life.
Continuously adjust and deepen the organization structure, strictly evaluate the performance of each department, consolidate core talents, merge available resources, reduce unnecessary expenses, increase future cash inflows, enhance operational efficiency and business growth.
3.Financial perspective ： Keep to maintain support from bank. The Group continue improving the management capacity and profitability to strengthen financial structure. With the successful operation of open-source savings and the support of major shareholders - TECO Electric Co., Ltd. as well as the continuous improvement of operational performance, the Company has successfully obtained continuous support from major banks for short -term and mid to long-term funds. For large and large orders, it also obtains project quotas from banks to support them. The Company's operations are not short of funds.

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13. SUPPLEMENTARY DISCLOSURES

`(1)` Significant transactions information

A. Loan to others: None.
B. Provision of endorsements and guarantees to others: None.
C. Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures): Refer to Table 1.
D. Acquisition or sale of the same security with the accumulated cost reaching NT$300 million or 20% of paid-in capital or more: Refer to Table 2.
E. Acquisition of real estate reaching NT$300 million or 20% of paid -in capital or more: None.
F. Disposal of real estate reaching NT$300 million or 20% of paid -in capital or more: None.
G. Purchases or sales of goods from or to related parties reaching NT$100 million or 20% of paid in capital or more: None.
H. Receivables from related parties reaching NT$100 million or 20% of paid -in capital or more: None.
I. Trading in derivative instruments undertaken during the reporting periods: None.
J. Significant inter-company transactions during the reporting periods: Refer to Table 3.
(2) Information on investees

Names, locations and other information of investee companies (not including investees in Mainland China): Refer to Table 4.

(3) Information on investments in Mainland China
A. Basic information: Refer to Table 5.
B. Significant transactions, either directly or indirectly through a third area, with investee companies in China: Please refer to Table 6.
(4) Major shareholders

Major shareholders ： Refer to Table 7.

14. SEGMENT INFORMATION

(1) General information

The management hierarchy of the Group has identified the reportable segments based on the information used by the decision-makers in making decisions.

The Group's Board of Directors manages its business from a regional and product perspective; territorially, the Group currently focuses on product sales in Taiwan and the United States. The operating units disclosed by the Group mainly derive their revenue from business communication systems, smart electromechanics, and fiber optic cables.

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`(2)` Segment information

The related information provided to decision maker is as follows

2023 ：

2023`：`
External income Internal Revenue Segment income Department (loss) profit 2022`：` External income Internal Revenue Segment income Department (loss) profit	Business communication system $ 460,148 51,570 $ 511,718 $ 4,460 Business communication system $ 637,529 65,278 $ 702,807 ($ 12,011)	Intelligent electromechanical system and others $ 86,352 $ - $ 86,352 $ ($ 53,462) $ Intelligent electromechanical system and others $ 42,760 $ - $ 42,760 $ ($ 3,724) $			Optical fibre cable 257,532 - 257,532 27,067 Optical fibre cable 330,601 - 330,601 36,395	Total $ 804,032 51,570
						$ 855,602
						($ 21,935) Total $ 1,010,890 65,278
		$	and others 42,760 - 42,760 3,724)
		$		$		$ 1,076,168 $ 20,660
		($		$

`(3)` Reconciliation for segment income

There is no profit adjustment for operating department and the Company.

`(4)` Information on products and services

Please refer to Notes 6(21) for the Group’s product revenue information in 2023 and 2022.

`(5)` Geographical information

Geographical information for the years ended December 31, 2023 and 2022 is as follows:

Taiwan USA Others Total	2023 Revenue Non-current assets $ 723,102 $ 273,331 24,111 - 56,819 349 $ 804,032 $ 273,680	2022 Revenue Non-current assets $ 736,894 $ 278,241 96,809 - 177,187 299 $ 1,010,890 $ 278,540	2022 Revenue Non-current assets $ 736,894 $ 278,241 96,809 - 177,187 299 $ 1,010,890 $ 278,540
	Revenue $ 723,102 24,111 56,819 $ 804,032	Revenue $ 736,894 96,809 177,187 $ 1,010,890
			$ 278,241 - 299 $ 278,540

`(6)` Major customer information

Major customer information for the years ended December 31, 2023 and 2022 is as follows:

A		2023 Dept. fiber optic cable	2022	2022
	Revenue $ 80,054		Revenue $ 108,445	Dept fiber optic cable

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Tecom Co., LTD. and Subsidiaries

Holding of marketable securities (not including subsidiaries, associates and joint ventures)

For the year ended December 31, 2023 Table 1

Securities held by Table 1	Marketable securities	Relationship with the securities issuer	General ledger account		As of December 31,2023	As of December 31,2023	Fair value Footnote (Except as otherwise indicated) Expressed in thousands of NTD	Fair value Footnote (Except as otherwise indicated) Expressed in thousands of NTD
				Number of shares	Book value	Ownership	Fair value
Tecom Co., LTD. Tecom Co., LTD. Tecom Co., LTD. Tecom Co., LTD. Baycom Opto-Electronics Technology Co., Ltd. Baycom Opto-Electronics Technology Co., Ltd. Baycom Opto-Electronics Technology Co., Ltd. Baycom Opto-Electronics Technology Co., Ltd.	Taiwan High Speed Rail Corporation(Ordinary shares) NEOVIDEO TECHNOLOGY CORPORATION(Ordinary shares) EDIMAX TECHNOLOGY CO., LTD.(Ordinary shares) International Integrated Systems, Inc. (Ordinary shares) Fuhua Investment Trust Guardian Fund CAPITAL MONEY MARKET FUND Tecom Co., LTD.(Ordinary shares) Tecom Co., LTD.(unsecured corp bond)	The parent company is its legal person director None None None None None Parent Company Parent Company	Financial assets measured at fair value through other comprehensive income, non-current Financial assets measured at fair value through other comprehensive income, non-current Financial assets measured at fair value through other comprehensive income,current Financial assets measured at fair value through other comprehensive income, non-current Financial assets measured at fair value through profit or loss, current Financial assets measured at fair value through profit or loss, current Financial assets measured at fair value through other comprehensive income, non-current Financial assets measured at amortized cost,non-current	8,112,000 1,066,667 1,000,000 94,706 545,765 211,062 317,689 -	249,038 $ 87 16,050 1,014 10,930 3,501 4,781 133,000	0.14% 19.39% 0.47% 0.13% - - 1.03% -	249,038 $ 87 16,050 1,014 10,930 3,501 4,781 133,000	Note 1 Note 2

Note 1 ： The Ordinary shares of the Company held by the Company is required for bank secured loans, and it is used as a secured. Please refer to Note 8 for details. Note 2 ： The company issued the first domestic unsecured payable company bonds in Taiwan in 2021 with a total amount of NT$133,000, each with a face value of NT$1,000, fully issued according to the face value of the ticket, with a coupon rate of 2%, and a circulation period of 5 years from November 17, 2021 to November 17, 2026.

The principal of the ordinary company bonds without warranty shall be paid in cash once according to the face value of the bonds, and the interest shall be paid annually. Since the private placement targets are Baycom Opto-Electronics Technology Co., Ltd. included in the consolidation individual, the relevant transactions have been written off when preparing the combined financial statements.

Tecom Co., LTD. and Subsidiaries

Acquisition or sale of the same security with the accumulated cost reaching NT$300 million or 20% of paid-in capital or more

For the year ended December 31, 2023

Table 2 Name of the acquiring or selling company	Type and name of the security	Table 2 Account	Counter-party（ Note 1）	Relationsh ip（Note	Beginningof	theperiod	Acquisition	Acquisition		S	ale		Expressed in th (Except as oth End of th	ousands of NTD erwise indicated) eperiod
					Nuber of shares	Amount	Nuber of shares	Amount	Nuber of shares	Price	~~Carrying~~	~~Gains or losses on~~	Nuber of shares	~~Amount (Note~~
Tecom Co., LTD.	Taiwan High Speed Rail Corporation	Financial assets measured at fair value through other comprehensive i t	N/A	N/A	16,222,080	$ 466,385	-	$ -	8,110,080	$ 245,606	~~amount~~ $ 199,976	~~disposals~~ $ 45,630	8,112,000	~~2)~~ $ 249,038

Note 1 ： Under the condition of securities recognized as investments accounted for using equity method, the two columns shall be filled. Under other conditions, the two columns shall not be filled. Note 2 ： Ending balance includes unrealized valuations gains or losses on financial assets.

Tecom Co., LTD. and Subsidiaries

Significant inter-company transactions during the reporting period

For the year ended December 31, 2023

Table 3

Expressed in thousands of NTD

(Except as otherwise indicated)

Transaction

Number (Note1)	Companyname	Counterparty	Relationship (Note2)	General ledger account	Amount	Transaction terms	Percentage of consolidated total operating revenues or total assets (Note 3)
0 0 0 0 1	Tecom Co., LTD. Tecom Co., LTD. Tecom Co., LTD. Tecom Co., LTD. Baycom Opto-Electronics Technology Co., Ltd.	Wu Han Tecom Co., Ltd. Wu Han Tecom Co., Ltd. Wu Han Tecom Co., Ltd. Wu Han Tecom Co., Ltd. Tecom Co., LTD.	1 1 1 1 2	Accounts receivable Sales revenue Service expenses Purchases Financial assets measured at amortized cost,non-	13,026 $ 14,002 20,336 17,176 133,000	Depending on Term Depending on Term Depending on Term Depending on Term Depending on Term	1% 2% 3% 2% 9%

Note 1: The information of transactions between the Company and the consolidated subsidiaries should be noted in “Number” column.

(1) Number 0 represents the Company.

(2) The consolidated subsidiaries are numbered in order from number 1.

Note 2: The transaction relationships with the counterparties are as follows:

If one of the subsidiaries has already disclosed the transactions between the subsidiaries, the other subsidiary does not need to disclose it again.

(1) The Company to the consolidated subsidiary.

(2) The consolidated subsidiary to the Company.
(3) The consolidated subsidiary to another consolidated subsidiary.

Note 3: In calculating the ratio, the transaction amount is divided by consolidated total assets for balance sheet accounts and is divided by consolidated total revenues for income statement accounts. Note 4 ： nly transactions with a value of more than one million are disclosed, and transactions between related parties are not disclosed separately.

Tecom Co., LTD. and Subsidiaries

Information on investees

For the year ended December 31, 2023

			For the year ended December 31, 2023	December 31, 2023	December 31, 2023
Investor Table 4	Investee	Location	December 31,202 December 31,202 Number of shares Main business activities Initial investment amount Shares held as	Initial investment amount		Shares held as	at December 31,2022		(loss) of the investee income (loss) recognised Footnote Expressed in thousands of NTD (Except as otherwise indicated)
							Ownership	Book value
Tecom Co., LTD. Tecom Co., LTD. Tecom Co., LTD. Tecom Co., LTD. Tecom Co., LTD. Tecom Co., LTD. Tecom Co., LTD.	Baycom Opto-Electronics Technology Co., Ltd. Tecom Global Tech Investment (B.V.I.) Limited A-Tel Inc. Taian Technology Sdn. Bhd. E-JOY ELECTRONICS INTERNATIONAL CO., LTD. TECNOS INTERNATIONAL CONSULTANT CO., LTD TECO TOUR TRAVEL SERVICE CO., LTD.	Taiwan British Virgin Islands Guatemala Malaysia Taiwan Taiwan Taiwan	Research, manufacture and sales of optical fiber communication systems and optical fibers, optical fiber cables and their components Investment Operating telecommunications system service business Production and sales of gate opening equipment industry Wholesale of telecommunication equipment, wholesale of precision instruments and wholesale of electrical appliances, etc. Operation of talent dispatch service, project contracting service and education and training business Operating a travel service business	431,258 $ - 63,177 8,360 999 2,499 2,912	431,258 $ 33,213 63,177 8,360 999 2,499 2,912	14,700,741 - 596,925 1,100,000 567,799 684,426 480,000	43.76 - 28.19 10 4.90 5.26 16.00	201,593 $ - - 3 6,779 9,841 1,650	28,279 $ - 32,493) ( - 17,800 30,369 113	12,376 $ - - - 966 1,563 18) (	Note 2 Note 1

Note 1 ： This company has invested in A-Tel Inc. receivables of $55,254 and has 100% impairment loss in the previous year.

Note 2 : Department of Investment Review has approved the investment structure adjustment in February, 2023. Tecom directly invested in Wuhan Dongxun Technology Co., Ltd. in Mainland China. The legal cancellation procedures of Tecom Global Tech Investment (B.V.I.) Limited in the third area engaging in investments have been completed in October, 2023.

Tecom Co., LTD. and Subsidiaries

Information on investments in Mainland China

For the year ended December 31, 2023

Table 5 Investee in Mainland China	Mainbusiness activities	Paid-incapital	Investment method	amount of remittance from Taiwanto	from Taiwan Chi	to Mainland na/	Net income of investee forthe yearended	of investee for the year ended	held by the Company	(loss) recognised by the Company forthe yearended	Expressed in thousan (Except as otherwise investments in Mainland China as of December amount of investment income	Expressed in thousan (Except as otherwise investments in Mainland China as of December amount of investment income	ds of NTD indicated) Footnote
					Mainland	back
Wu Han Tecom Co., Ltd.(Note 1)	Engage in technical development, production, sales and technical	6,950 $	Through investment in a third region and reinvesting in a mainland company	6,950 $	- $	- $	6,950 $	941) ($	100	941) ($	1,114) ($	- $	Note 7

Companyname	Accumulated amount of remittance from Taiwan to Mainland China	Investment amount approved by the Investment Commission of the Ministry of Economic Affairs (MOEA)	Ceiling on investments in Mainland China imposed by the Investment Commission of MOEA
Wu Han Tecom Co., Ltd.	$ 6,950	$ 681,144	$ 278,801

Note 1 ： The company has remitted US$995,000 to Tecom Global Tech Investment (B.V.I.) Limited,which US$200,000 has been remitted to invest in Wu Han Tecom Co., Ltd. 。 Tecom Global Tech Investment (B.V.I.) Limited has remitted back the investment fund in March, 2023, and the legal cancellation procedures have been completed in October, 2023,

Note 2 ： The company has remitted US$15,050,000 to Tecom Global Tech Investment Pte Limited, which US$15,000,000 has been remitted to invest in Wu Xi Tecom Co., Ltd. It was dissolved and liquidated in January 2021.

Note 3 ： The company has remitted US$1,500,000 to Tecom Tech Investment (B.V.I.) Limited, and all the investment has been remitted out of Tecom Communication Technology (Xiamen) Co., Ltd. and Beijing Tecom Innovation Technology Co., Ltd. Dissolution and liquidation were completed in October 2017 and May 2019 respectively 。

Note 4 ： As of December 31, 2023 the upper limit of the company's investment in the mainland was $278,801 , which was consolidated the net value 464,668 of 60%.

Note 5 ： When the above Mainland investment project was completed, the investment limit of the company to Mainland China was 60% of the net value of the company's Third Quarter 2010, which is $2,933,752, amounting to $1,760,251. Note 6 ： The investment profit and loss recognized in this period is the financial information checked by the certified accountant of the parent company in Taiwan. Note 7 ： There is upstream transactions occurred ($180).

Tecom Co., LTD. and Subsidiaries

Information on investments in Mainland China － Directly or indirectly through third-region invest in mainland China Major transactions

For the year ended December 31, 2023

Table 6

Expressed in thousands of NTD

(Except as otherwise indicated)

Investeein Mainland China	Salesrevebye	Salesrevebye	Accountsreceivable	Accountsreceivable	Otherexpense	Otherexpense	Accountpayable	Accountpayable
	Amount	%	Amount	%	Amount	%	Amount	%
Wuhan Dongxun Technology Co., Ltd Wuhan Dongxun Technology Co., Ltd	14,002 $ 1.74% Otherpayables		$ 13,026 0.93% Purchase		20,336 $	2.53%	2,672 $	0.29%
	Amount	%	Amount	%
	6,186 $	0.66%	17,176 $	2.14%

Tecom Co., LTD. and Subsidiaries Major Shareholders Information December 31, 2023

Tecom Co., LTD. and Subsidiaries Major Shareholders Information December 31, 2023	Tecom Co., LTD. and Subsidiaries Major Shareholders Information December 31, 2023	Tecom Co., LTD. and Subsidiaries Major Shareholders Information December 31, 2023
Table 7
Shareholdersshares	Number of Shares Held	Shareholding Ratio
TECO ELECTRIC & MACHINERY CO., LTD.	common stock 3,868,898 preferred stock 15,360,000	63.52%

Descript The Company apply for the information from TDCC:

(1) This table mainly discloses the shareholder information calculated by the central depository company based on the last business day of each quarter, which is the total number of ordinary shares and special shares that have completed the delivery of non-entity registration (including treasury stocks) exceeding five percent. As for the number of shares recorded in the company's financial report and the actual number of shares that have been completed without physical registration,there may be differences due to different calculation bases.
(2) If the shareholders deliver the shares to the trust, the trustees shall disclose the individual accounts of the trustees according to the trust. As for the internal shareholders’ equity declaration of more than 10% of the shares under the Securities and Futures Trading Act, the holdings include the shares held by himself and the trust delivered, and he has the right to decide the use of the trust assets. For the internal shareholders’ equity declaration information, please refer to the Public Information Observation Station.

As for the number of shares recorded in the company's financial report and the actual number of shares that have been completed without physical registration, there may be differences due to different calculation bases.

AI assistant

TECOM Co., Ltd. — Annual Report 2023

52005_rns_2023-11-08_f2e69403-a1ba-4093-bb24-cd3715e608c7.pdf

Tecom Co., LTD.

Table of contents

Tecom Co., LTD.

Statement of Consolidated Financial Statements of Affiliated Enterprises

Tecom Co., LTD.

Opinion

Basis for Opinion

Key Audit Matters

Inventory Valuation

Audit procedures in response

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

1. HISTORY AND ORGANISATION

2. APPROVAL DATE AND PROCEDURES OF THE CONSOLIDATED FINANCIAL STATEMENTS

3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

(3). IFRSs issued by IASB but not yet endorsed by the FSC

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(1) Compliance statement

(2) Basis of preparation

(3) Basis of consolidation

B.Subsidiaries included in the consolidated financial statements:

Balance sheets

Statements of cash flows

(11). Impairment of financial assets

(12). Derecognition of financial assets

– (13). Leasing arrangements operating lease

(14). Inventories

(16). Property, plant and equipment

(18). Intangible assets

(19). Impairment of non - financial assets

(20). Borrowings

(21). Notes and accounts payables

(23). Offsetting financial instruments

(25). Employee benefits

(29). Government grants

(30). Operating segments

5. CRITICAL ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS ON UNCERTAINTY

(1) Critical judgments in applying the Group ’s accounting policies

None.

(2) Critical accounting estimates and assumptions

Evaluation of inventories

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

(6) Inventories

(7) Investments accounted for using equity method

(11) Short - term borrowings

- (15) Long term borrowings

(17) Pensions

(18) Ordinary shares

(19) Capital reserve

2.Contract liabilities

(22) Interest income

(26) Additional information on nature of expenses

(27) Employee benefit expenses

1.Income tax expenses

(1) Components of income tax expense:

(29) Earnings (losses) per share

(30) Supplemental information on cash flows

(31) Changes in liabilities from financing activities

7. RELATED PARTY TRANSACTIONS

(1) Parent Company and the final Controller

(2) Names and relationships of related parties

(3) Significant transactions with related parties

4.Payables to related parties

8. RESTRICTED ASSETS

11. SIGNIFICANT SUBSEQUENT EVENTS

12. OTHERS

(2) Financial instruments

TECOM Co., Ltd. Annual Report 2023

`(2)` Financial instruments

`(3)` Fair value information

`(4)` The future financial fitness plan

`(1)` Significant transactions information

`(2)` Segment information

`(3)` Reconciliation for segment income

`(4)` Information on products and services

`(5)` Geographical information

`(6)` Major customer information