TECOM Co., Ltd. — Annual Report 2023

Nov 8, 2023

Tecom Co., LTD.

Parent Company Only 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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Tecom Co., LTD

Parent Company Only Financial Statements for the years ended December 31, 2023 and 2022 with Independent Auditors’ Report Table of contents

Tecom Co., LTD Parent Company Only Financial Statements for the years ended December 31, 2023 and 2022 with Independent Auditors’Report Table of contents
Items 1. Cover page 2. Table of contents 3. Independent auditors’ report 4. Parent Company Only balance sheets 5. Parent Company Only statements of comprehensive income 6. Parent Company Only statements of changes in equity 7. Parent Company Only statements of cash flows 8. Notes to the Parent Company Only financial statements (1) Company history and business scope (2) Approval date and procedures of the parent company only 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) Pledged assets (9) Significant Contingencies and Unrecognized Contract Commitments (10) Losses due to major disasters (11) Significant subsequent events (12) Others (13) Other disclosures (14) Segment information 9. Statements of significant accounts Cash and cash equivalents Accounts receivables Inventories Financial assets at fair value through other comprehensive income Changes in investments accounted for using equity method Table of changes in property, plant and equipment Table of changes in accumulated depreciation of property, plant and equipment Table of changes in investment properties Table of changes in accumulated depreciation of investment properties Short-term borrowings Accounts payables Operating revenue Operating costs Manufacturing costs Selling expenses General and administrative expenses Research and development expenses Summary of employee benefits, depreciation and amortization expenses by function	Page
	1 2 ~ 3 4 ~ 7 8 ~ 9 10 11 12 ~ 13 14 ~ 59 14 14 14 ~ 15 15 ~ 23 23 ~ 24 24 ~ 45 45 ~ 49 49 49 50 50 50 ~ 58 58 ~ 59 59 Table 1 Table 2 Table 3 Table 4 Table 5 Table 6 Table 7 Table 8 Table 9 Table 10 Table 11 Table 12 Table 13 Table 14 Table 15 Table 16 Table 17 Table 18

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Independent Auditors’ Report (113) No. Finance-Auditing-Reporting- 23003198

The Board of Directors and Shareholders

Tecom Co., LTD.

Opinion

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

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

Basis for Opinion

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

Key Audit Matters

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

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

Inventory Valuation

Description

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

How our audit addressed the matter

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

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

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

3. Checked the allowance for inventory valuation loss recognized.

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

Management is responsible for the preparation and fair presentation of the parent company only financial statements in accordance with the requirements of the Regulations Governing the Preparation of Financial Reports by Securities Issuers and for such internal control as management determines is necessary to enable the preparation of parent company only financial statements that are free from material misstatement, whether due to fraud or error. In preparing the parent company only financial statements, management is responsible for assessing the ability to continue as a going concern of Tecom Co., LTD. disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate Tecom Co., LTD. or to cease operations, or has no realistic alternative but to do so.

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

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

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

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

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

2. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control of Tecom Co., LTD.

3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

4. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the ability to continue as a going concern of Tecom Co., LTD. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the parent company only financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause Tecom Co., LTD. to cease to continue as a going concern.

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1. Evaluate the overall presentation, structure and content of the parent company only financial statements, including the accompanying notes, and whether the parent company only financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

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

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

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

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

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

For and on behalf of PricewaterhouseCoopers, Taiwan

Securities ： Financial-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. SEPARATE BALANCE SHEETS DECEMBER 31, 2023 AND 2022

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

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

(continued)

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

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Liabilities and Equity

December31,2023 December31,2022 Notes AMOUNT % AMOUNT % 6(11) and 8 $ 324,000 26 $ 740,000 44 6 (14) 5,035 - 4,031 - 2,070 - 2,280 - 6 (12) 52,129 4 86,567 5 6 (12) and 7 3,255 - 2,975 - 6 (13) and 7 55,993 5 51,272 3 5,046 - 3,618 - 7 7,929 1 7,823 1 - - - - 6 (16) 200,000 16 - - 6 (14) 6,568 1 6,052 1 662,025 53 904,618 54 6 (15) and 7 133,000 11 133,000 8 6 (16) and 8 - - 200,000 12 1,563 - 1,360 - 6 (29) 880 - 880 - 7 175,885 14 183,277 11 6 (6)(17) 56,230 5 63,310 3 367,558 30 581,827 34 1,029,583 83 1,486,445 88 6 (19) 142,719 12 142,719 8 160,000 13 160,000 10 6 (20) 6,237 - 6,237 - 6 (21) ( 116,306) ( 9) ( 124,694) ( 7 ) 6 (2) 26,781 2 ( 40,604) ( 2 ) 6 (19) ( 13,812) ( 1) ( 13,795) ( 1 ) 205,619 17 211,071 12 9 11 $ 1,235,202 100 $ 1,697,516 100

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

3X2X TOTAL LIABILITIES AND EQUITY

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

Chairman: Liu, Chao-Kai

CEO:Tien, Ying-Juei

Accounting Manager: Wang, Yen-Li

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

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

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

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

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

Accounting Manager: Wang, Yen-Li

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

Share capital

Notes 2 0 2 2 Balance at January 1, 2022 Net income for the year Other comprehensive income (loss) for the year 6(2)(18) Total comprehensive income for the year Changes in the net value of investment equity of associates accounted for using the equity method not recognized by shareholding percentage 6(6) Capital reduction to cover accumulated deficit 6(19) Disposal of financial assets at fair value through other comprehensive income 6(2) Balance at December 31, 2022 2 0 2 3 Balance at January 1, 2023 Net loss for the year Other comprehensive income (loss) for the year 6(2)(18) Total comprehensive income for the year Disposal of financial assets at fair value through other comprehensive income 6(2) Acquisition of the parent’s treasury stocks by subsidiaries 6(6)(19) Balance at December 31, 2023	Notes	Ordinary shares	Capital reserve	Legal reserve	Accumulated deficit	Unrealized Gain (Loss) on Financial Assets at Fair value through other comprehensive income	Treasury stock	Total equity
		$ 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

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

Chairman: Liu, Chao-Kai

CEO:Tien, Ying-Juei

Accounting Manager: Wang, Yen-Li

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Tecom Co., LTD.

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

Cash flows from operating activities: Income (loss) before income tax Adjustments for: The profit or loss items: Depreciation expenses Amortization expenses Expected credit losses (reversal gains) Interest expense Interest income Dividend income Gains arising from lease modification Share of loss (profit) of subsidiaries and joint ventures accounted for using the equity method Unrealized (realized) profit from sales Gain on disposal of investments Changes in operating assets and liabilities： Changes in operating assets Contract assets Notes receivables Notes receivables from related parties Accounts receivables Accounts receivables from related parties Other receivables Inventories Prepayments Other current assets Changes in operating liabilities Notes payables Accounts payables Accounts payables to related parties Contract liabilities Other payables Provisions for liabilities Other current liabilities Accrued pension liabilities Cash generated from (used in) operating activities Interest received Interest paid Dividends received Net cash flows generated from (used in) operating activities

Notes 2023 2022 ( $ 36,094 ) $ 9,378 6(7)(8)(9)(27) 20,942 20,111 6(10)(27) 1,858 2,136 12(2) 131 ( 62 ) 6(26) 24,764 26,725 6(23) ( 8,800 ) ( 3,260 ) 6(24) ( 6,806 ) ( 14,747 ) 6(25) - ( 32 ) 6(6) ( 14,126 ) ( 21,723 ) 113 ( 39 ) 6(25) - ( 80 ) ( 10,091 ) - 10,731 21,741 120 ( 112 ) ( 13,123 ) 21,984 8,092 ( 1,808 ) ( 1,886 ) 3,533 66,299 ( 14,964 ) ( 504 ) 8,464 ( 290 ) ( 1,226 ) ( 210 ) ( 753 ) ( 34,438 ) ( 38,493 ) 280 ( 5,125 ) 1,004 1,034 2,851 ( 5,125 ) 1,620 ( 906 ) 516 ( 50 ) ( 8,634 ) ( 8,804 ) 4,319 ( 2,203 ) 9,641 2,132 ( 25,219 ) ( 26,396 ) 24,111 25,080 12,852 ( 1,387 )

(continued)

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Tecom Co., LTD.

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

Cash flows from investing activities: Decrease (increase) in financial assets at amortized cost Proceeds from disposal of financial assets at fair value through other comprehensive income Proceeds from disposal of investment accounted for using equity method Funds returned from the liquidation of subsidiaries Acquisition of property, plant and equipment Acquisition of intangible assets Decrease (increase) in guaranteed deposits paid Net cash flows generated from investing activities Cash flows from financing activities: Increase in short term borrowings Decrease in short term borrowings Repayments of long-term borrowings Increase in guaranteed deposits received Repayment of principal portion of lease liabilities Net cash flows used in financing activities Net (decrease) increase in cash and cash equivalents Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year

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

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

Chairman: Liu, Chao-Kai

CEO:Tien, Ying-Juei Accounting Manager: Wang, Yen-Li

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Tecom Co., LTD. NOTES TO SEPARATE 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 as a company limited by shares under the provisions of the Company Act of the Republic of China (R.O.C.). The Company is 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 . This company is held by Teco Electric & Machinery Co., Ltd. with 63.52% of the shares, which is the ultimate e of the Company.

2. THE DATE OF AUTHORIZATION FOR ISSUANCE OF THE SEPARATE FINANCIAL STATEMENTS AND

PROCEDURES FOR AUTHORIZATION

The parent company only 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”	Effective date by International Accounting Standards Board
	January 1, 2023 January 1, 2023

Amendments to IAS 12 “Deferred Tax related to Assets and Liabilities arising from a Single January 1, 2023 Transaction”

Amendments to IAS 12 “International Tax Reform — Pillar Two Model Rules” May 23, 2023

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

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

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

• (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

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

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

(1) Compliance statement

These separate financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Statements by Securities Issuers.

• (2) Basis of preparation

• A. Except for the following items, these separate 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 International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the FSC (collectively referred herein as the “IFRSs”) requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Company’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the separate financial statements are disclosed in Note 5.

(3) Foreign currency translation

Items included in the financial statements are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). The separate financial statements are presented in “New Taiwan Dollars (NTD)”, which is the Company’s functional and 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.

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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 are re -translated at the exchange rates prevailing at the end of the financial reporting period. Exchange differences arising upon re-translation are recognized in profit or loss.

• 3.Non-monetary assets and liabilities denominated in foreign currencies at fair value through profit or loss are re-translated at the exchange rates prevailing at the end of the financial reporting period. The translation differences are recognized in profit or loss as part of the fair value gain or loss. Non-monetary assets and liabilities at fair value through other comprehensive income are re-translated at the exchange rates prevailing at the end of the financial reporting period. The translation differences are recognized in other comprehensive income. However, non-monetary 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 (losses)”.

(4) Classification of current and non - current items

• A. Assets that meet one of the following criteria are classified as current assets; otherwise they are classified as non-current assets:

• (a) Assets arising from operating activities that are expected to be realized, or are intended to be sold or consumed within the normal operating cycle;

• (b) Assets held mainly for trading purposes;

• (c) Assets that are expected to be realized within twelve months from the balance sheet date;

• (d) Except cash or equivalents that are restricted for exchange or payment of liabilities within the next twelve months in the balance sheet.

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

• B. Liabilities that meet one of the following criteria are classified as current liabilities; otherwise they are classified as non -current liabilities:

• (a) Liabilities that are expected to be settled within the normal operating cycle;

• (b) Liabilities arising mainly from trading purposes;

• (c) The liabilities due within the next twelve months of the balance sheet date ;

• (d) 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 classification.

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

• (5) Financial assets at fair value through other comprehensive income

• 1.Financial assets at fair value through other comprehensive income comprise equity securities which are not held for trading, and for which the Company 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.

• 3.At initial recognition, the Company measures the financial assets at fair value plus transaction costs. The Company 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 Company’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 Company, and the amount of the dividend can be measured reliably.

• (6) Financial assets at amortized cost

• 1.Financial assets at amortized cost are those that meet all of the following criteria:

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  - (1) The objective of the Company’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 Company measures the financial assets at fair value plus transaction costs. Interest income from these financial assets is included in finance income using the effective interest method. A gain or loss is recognized in profit or loss when the asset is derecognized or impaired.

• 4.The Company’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.

• (7) Accounts and notes receivable

• 1.Accounts and notes receivable entitle the Company 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.

• (8) Impairment of financial assets

At each balance sheet date, the Company shall assess whether the credit risk on financial assets at amortized cost has increased significantly since initial recognition. The Company 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 Company 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 Company 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 Company shall measure the loss allowance at an amount equal to lifetime expected credit losses.

• (9) Derecognition of financial assets

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

– (10) Leasing arrangements (lessor) operating leases

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.

(11) Inventories

Inventories are stated 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 (allocated based on normal operating capacity). 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.

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(12) Investments accounted for under equity method /subsidiaries and associates

1. Subsidiaries are all entities (including structured entity) controlled by the Company. The Company controls an entity when the Company is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.

2. Unrealized gains on transactions between the Company and its subsidiaries are eliminated to the extent of the Company’s interest in the subsidiaries. Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Company.

3. The Company’s share of its subsidiaries’ post -acquisition profits or losses is recognized in profit or loss, and its share of post -acquisition movements in other comprehensive income is recognized in other comprehensive income. When the Company’s share of losses in a subsidiary equals or exceeds its interest in the subsidiary, the Company should continue to recognize losses in proportion to its ownership.

4. 4.Changes in a parent’s ownership interest in a subsidiary that do not result in the parent losing control of the subsidiary (transaction with non -controlling interests) are accounted for as equity transactions, i.e. transactions with owners in their capacity as owners. Any difference between the amount by which the non -controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity.

5. 5.In the case that an associate issues new shares and the Company does not subscribe or acquire new shares proportionately, which results in a change in the Company’s ownership percentage of the associate but maintains significant influence on the associate, then ‘capital reserve’ and ‘investments accounted for under the equity method’ shall be adjusted for the increase or decrease of its share of equity interest. If the above condition causes a decrease in the Company’s ownership percentage of the associate, in addition to the above adjustment, the amounts previously recognized in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately on the same basis as would be required if the relevant assets or liabilities were disposed of.

6. The related enterprises refer to all individuals over which the Company has significant influence but no control. Generally, they are directly or indirectly holding more than 20% of the voting rights of the Company. The Company adopts the equity method for investment in related enterprises, and the acquisition is recorded in cost.

7. 7.An investment in an associate is adjusted thereafter to recognize the Company’s share of profit or loss and other comprehensive income of the associate in profit or loss and other comprehensive income accordingly. If the Company’s share of losses of an associate equals or exceeds its interest in the associate (including any receivables without collaterals), the Company 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.

8. 8.When the equity changes of non-operating income and other comprehensive income of the affiliated companies occur without affecting the ratio of shareholding in the affiliated companies, the Company shall record such equity changes in “Capital Reserves” in proportion to the ratio of shareholding.

9. The Company’s share of unrealized profits or losses arising from transactions between the Company 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 Company.

10. When the Company disposes an associate, if the Company 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 Company would be reclassified to profit or loss on the disposal of the related assets or liabilities, the Company reclassifies the gain or loss to profit or loss. If the Company still has significant influence over the associate, the Company shall only reclassify to profit or loss the proportion of the gain or loss that had previously been recognized in other comprehensive income relating to that reduction in ownership interest

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1. According to the Accounting Standards for the Preparation of Financial Reports of Securities Issuers, the income and other comprehensive income of the individual financial report in the current period should be the same as the apportionment of the income and other comprehensive income belonging to the parent company in the consolidated financial report based on the basis of consolidation. The equity of the individual financial report should be the same as the equity belonging to the parent company in the consolidated financial report based on the basis of consolidation.

(13) 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 Company 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.

• 3.Plant and equipment that apply cost model are depreciated using the straight -line method to allocate their cost over their estimated useful lives. Each component of property, plant and equipment that is significant in relation to the total cost of the item is depreciated separately.

• 4.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 f ollow:

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

(14) Lessee ' s lease transactions － Right - of - use Assets / Lease liability

• 1.The Company 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 Company'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 Company 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.

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(15) Investment properties

Investment properties is recognized as cost and is subsequently measured under the cost model. Depreciation is recorded by the straight -line method on assets other than land, with a useful life ranging from 10 to 55 years.

(16) 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.

(17) Impairment of non - financial asset

If any indication an asset may be impaired is present, the Company 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.

(18) 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.

2. 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.

(19) Notes and accounts payable

• 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 payable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

(20) Derecognition of financial liabilities

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

(21) 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.

(22) Bonds payable

Ordinary corporate bonds issued by the Company are initially recognized at fair value less transaction costs. Any difference between the proceeds (net of transaction costs) and the redemption value is presented as an addition to or deduction from bonds payable, which is amortized to profit or loss over the period of bond circulation using the effective interest method as an adjustment to ‘finance costs.

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(23) Provisions

Provisions for warranty are recognized when the Company 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.

(24) Employee benefit

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.

• (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 Company 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 Company 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.

• 3.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.

(25) 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.

• 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 shareholders meeting resolves the earning distribution .

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1. 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 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.

2. 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.

3. 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.

4. 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.

(26) 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.

2. 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.

(27) Revenue recognition

1.Sales of goods

• (1) The Company is engaged in manufacture and sales of communication systems, and smart electromechanical 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.

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• (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 Company does not adjust the transaction price to reflect the time value of money.

• (3) The Company’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) If 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.

• 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.

(28) 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.

5. CRITICAL ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS ON UNCERTAINTY

The preparation of these separate financial statements requires management to make critical judgements in applying the Company’s accounting policies and make critical assumptions at the end of the financial reporting period and estimates concerning future events. The resulting accounting estimates and assumptions might be different from the actual results, and will be continually evaluated and dusted based on historical experience and other factors; and the related information is addressed below:

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

None.

• (2) Critical accounting estimates and assumption s

Evaluation of inventories

As inventories are stated at the lower of cost and net realizable value, the Company must determine the net realizable value of inventories on balance sheet date based on judgments and estimates. Due to the rapid technology innovation, the Company 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 Company’s inventories were $105,702.

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6. Cash and cash equivalents

(1) Cash

Cash on hand Checking accounts and demand deposits Time deposits

December 31, 2023 $ 211 19,711 12,612 $ 32,534	December 31, 2022 $ 103 26,897 - $ 27,000

• 1.The Company 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

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 Company 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.

2. 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

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

2. (3) Financial assets at amortized cost

Items Current items: Demand deposit Time deposits Total	December 31, 2023 $ 22,667 62,106 $ 84,773	December 31, 2022
		$ 22,556 223,334 $ 245,890

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

Interest income	2023 $ 8,303	2022 $ 3,158

1. Without considering other credit enhancements, the amounts representing the maximum credit risk exposure of financial assets at amortized cost as of December 31, 2023 and 2022 are $84,773 and $245,890, respectively.

2. Please refer to Note 8 for the details of financial assets at amortized cost pledged as collaterals.

3. Please refer to Note 12(2) for the information on the credit risk of financial assets at amortized cost.

(4) 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 $ 15,569 101 - $ 15,670 $ 88,973 17,154 ( 691) $ 105,436	December 31, 2022
		$ 26,300 221 - $ 26,521 $ 75,850 25,246 ( 560) $ 100,536

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

Not past due Less than 30 days past due Between 31 and 90 days past due Between 91 and 180 days past due More than 181 days past due	December 31, 2023 Accounts receivable Notes receivable $ 91,213 $ 15,670 4,559 - 2,559 - 4,893 - 2,903 - $ 106,127 $ 15,670	December 31, 2022	December 31, 2022
	Accounts receivable $ 91,213 4,559 2,559 4,893 2,903 $ 106,127	Accounts receivable $ 82,352 6,332 7,111 4,187 1,114 $ 101,096	Notes receivable $ 26,521 - - - - $ 26,521

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

• 2.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 recei vables from contracts with customers was $169,422.

• 3.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 $1 5,670 and $26,521, respectively. The amounts most representing the maximum credit risk exposure of accounts receivables as of December 31, 2023 and 2022 are $1 05,436 and $100,536, respectively.

• 4.Please refer to Note 12(2) for the information on the credit risk of accounts and notes receivables.

(5) Inventories

Merchandise Finished goods Work in process Raw materials		December 31, 2023	Carrying amount $ - 53,828 4,005 47,869 $ 105,702
	Cost $ - 77,568 4,005 66,239 $ 147,812	Loss allowance $ - ( 23,740) ( 18,370) ($ 42,110)

Merchandise Finished goods Work in process Raw materials		December 31, 2022
	Cost $ 8,736 116,438 6,384 99,667 $ 231,225	Loss allowance ($ 8,507) ( 19,702) ( 24) ( 30,991) ($ 59,224)	Carrying amount
			$ 229 96,736 6,360 68,676 $ 172,001

Inventory costs recognized as expenses or losses are as follows ：

Cost of inventories sold Maintenance costs Construction costs Inventory valuation losses Others		2023 $ 362,826 846 12,264 9,311 13,569 $ 398,816	2022 $ 471,984 1,154 - 2,058 12,855 $ 488,051

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(6) Investments accounted for using equity method/Other non - current liabilities

2023 At January 1 $ 215,168 Return of paid-up capital due to liquidation of subsidiaries ( 47) Share of profit or loss of investments accounted for using equity method 14,126 Earnings distribution of investments accounted for using equity method ( 17,305) Realized (unrealized) sales gross profit ( 113) Adjustment of not recognizing according to shareholding ratio - Treasury stock acquired by subsidiaries ( 17) At December 31 $ 211,812 December 31, 2023 Subsidiary： Baycom Opto-Electronic Technology Co., LTD. $ 201,593 Tecom Global Tech Investment (B.V.I) Limited - Wuhan Dongxun Technology Co., Ltd. ( 8,054) Associate： A-Tel Inc. - Taian Technology Sdn. Bhd. 3 E-JOY Electronic International Co., LTD. 6,779 Tecnos International Consultation Co., LTD 9,841 Teco Tour Travel Service Co., LTD. 1,650 $ 211,812	2022 $ 203,729 - 21,723 ( 10,333) 39 10 - $ 215,168 December 31, 2022 $ 205,405 ( 7,133) - - 3 5,812 9,412 1,669 $ 215,168	2022

• 1.The information about the Company's subsidiaries, please refer to Note 4 (3) in the Company's 2023 consolidated financial statements

• 2.Associate

• (1) The Company has no individual significant associate.

• (2) Aggregate information of carrying amounts and operation results of the Company's individual insignificant associates was as follows:

As of Demcember 31, 2023 and 2022, the carrying amount of the Company's individual insignificant associates are $18,273 and $16,896, respectively.

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

• (7) Property, plant and equipment

Buildings and Machinery structures equipment Test equipment Other equipment Total

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At January 1, 2023 Cost $ 126,265 $ 1,183 Accumulated depreciation and impairment ( 71,661) ( 555) $ 54,604 $ 628 2023 At January 1 $ 54,604 $ 628 Additions - - Reclassifications (Note) ( 13,673) - Depreciation expense ( 2,049) ( 237) At December 31 $ 38,882 $ 391 December 31, 2023 Cost $ 93,818 $ 1,183 Accumulated depreciation and impairment ( 54,936) ( 792) $ 38,882 $ 391 Buildings and structures Machinery equipment At January 1, 2022 Cost $ 125,952 $ 1,268 Accumulated depreciation and impairment ( 69,216) ( 399) $ 56,736 $ 869 2022 At January 1 $ 56,736 $ 869 Additions - - Reclassifications 140 - Depreciation expense ( 2,272) ( 241) At December 31 $ 54,604 $ 628 December 31, 2022 Cost $ 126,265 $ 1,183 Accumulated depreciation and impairment ( 71,661) ( 555) $ 54,604 $ 628	$ - - $- $ - 133 - ( 26) $ 107 $ 133 ( 26) $ 107 Test equipment $ 1,251 ( 1,105) $ 146 $ 146 - - ( 146) $- $ - - $-	$ 9,683 ( 3,344) $ 6,339 $ 6,339 6,677 - ( 4,433) $ 8,583 $ 13,943 ( 5,360) $ 8,583 Other equipment $ 8,134 ( 2,742) $ 5,392 $ 5,392 3,980 - ( 3,033) $ 6,339 $ 9,683 ( 3,344) $ 6,339		$ 137,131 ( 75,560) $ 61,571
				$ 61,571 6,810 ( 13,673) ( 6,745) $ 47,963
				$ 109,077 ( 61,114) $ 47,963

Note: Reclassified to investment properties.

1. The major components of the building and construction of the Company 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.

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(8) 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 1,687 367 $ 171,992	December 31, 2022 $ 178,030 1,970 857 $ 180,857

Land Building Transportation equipment (business car)	Depreciation expense 2023 2022 $ 8,092 $ 8,094 4,440 4,886 490 490 $ 13,022 $ 13,470
	2023 $ 8,092 4,440 490 $ 13,022

1. Additions to the right-of-used assets for the years ended December 31, 2023 and 2022 amounted to $4,157 and $3,573, respectively.

2. 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 $ 4,701 $ 1,550 $ 98 $-	2022 $ 4,899 $ 1,145 $ 84 $ 32

1. The cash outflows arising from leases for the years ended December 31, 2023 and 2022 amounting to $17,792 and $17,833, respectively.

2. 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.

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(9) Investment property

January 1,2023 Cost Accumulated depreciation and impairment 2023 January 1 Depreciation expense Reclassifications (Note) December 31 December 31, 2023 Cost Accumulated depreciation and impairment January 1,2022 Cost Accumulated depreciation and impairment 2022 January 1 Depreciation expense Reclassifications December 31 December 31, 2022 Cost Accumulated depreciation and impairment	Buildings and structures
	$ 52,701 ( 29,911) $ 22,790 $ 22,790 ( 1,175) 13,673 $ 35,288 $ 85,147 ( 49,859) $ 35,288 Buildings and structures
	$ 53,012 ( 29,133) $ 23,879 $ 23,879 ( 949) ( 140) $ 22,790 $ 52,701 ( 29,911) $ 22,790

Note: Transferred from property, plant and equipment.

1.Rental income and direct operating expenses of investment properties ：

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2023 Rental income from investment properties $ 7,452 Operating expenses incurred by investment properties that generates rental income in the current period $ 1,514	2022
	$ 5,248 $ 1,230

1. The fair value of the investment properties held by the Company as December 31, 2023 and 2022 amounted to both $48,174, which was the result of self -evaluation. The evaluation adopted the income method, which belongs to the level 3 fair value. The discount rate is 1.595%.

(10) Intangible assets

January 1, 2023 Cost Accumulated amortization 2023 At January 1 Additions Amortization expenses At December 31 December 31, 2023 Cost Accumulated amortization January 1,2022 Cost Accumulated amortization 2022 At January 1 Additions Amortization expenses At December 31 December 31, 2022 Cost Accumulated amortization	Computer software $ 3,348 ( 1,831) $ 1,517 $ 1,517 443 ( 1,117) $ 843 $ 1,642 ( 799) $ 843 Computer software $ 3,170 ( 1,701) $ 1,469 $ 1,469 1,493 ( 1,445) $ 1,517 $ 3,348 ( 1,831) $ 1,517	Technology $ 2,073 ( 1,094) $ 979 $ 979 71 ( 741) $ 309 $ 2,144 ( 1,835) $ 309 Technology $ 2,073 ( 403) $ 1,670 $ 1,670 - ( 691) $ 979 $ 2,073 ( 1,094) $ 979	Total $ 5,421 ( 2,925) $ 2,496 $ 2,496 514 ( 1,858) $ 1,152 $ 3,786 ( 2,634) $ 1,152 Total $ 5,243 ( 2,104) $ 3,139 $ 3,139 1,493 ( 2,136) $ 2,496 $ 5,421 ( 2,925) $ 2,496

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Intangible assets are amortized as follows ：

Operating costs Selling expenses Administrative expenses Research and development expenses	2023 $ 109 510 135 1,104 $ 1,858	2022 $ 168 199 396 1,373 $ 2,136	2022

• (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 $ 460,000 280,000 $ 740,000	Interest rate range Collateral 1.84%~2.34% Please refer to Note 8. 2.70%~2.948% None. Interest rate range Collateral 1.40%~1.97% Please refer to Note 8. 2.12%~2.892% None.	Interest rate range Collateral 1.84%~2.34% Please refer to Note 8. 2.70%~2.948% None. Interest rate range Collateral 1.40%~1.97% Please refer to Note 8. 2.12%~2.892% None.
				1.84%~2.34% 2.70%~2.948% Interest rate range
				1.40%~1.97% 2.12%~2.892%

The interest expenses arising from long -term and short-term borrowings recognized in profit or loss for the years 2023 and 2022 amounted to $17,388 and $19,161, respectively.

(12) Accounts payables

Accounts payables Accrued accounts payables r payables Payables for Salaries Accrued expense payables Others	December 31, 2023 $ 55,274 110 $ 55,384 December 31, 2023 $ 21,397 10,939 23,657 $ 55,993	December 31, 2022 $ 87,567 1,975 $ 89,542 December 31, 2022
		$ 24,455 7,155 19,662 $ 51,272

• (13) Other payables

• (14) Other current liabilities

Refund liability Others	December 31, 2023 $ 5,582 986 $ 6,568	December 31, 2022
		$ 5,527 525 $ 6,052

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(15) Bonds payable

Private placement bonds payable Less: the current portion	December 31, 2023 $ 133,000 - $ 133,000	December 31, 2022 $ 133,000 - $ 133,000

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 bond, with a coupon rate of 2%, and a circulation period of 5 years from November 17, 2021 to November 17, 2026. The unsecured ordinary corporate bonds will be repaid in cash at the maturity date, and the interest will be paid annually.

- (16) Long term borrowing

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

(17)	Other non-current liabilities December 31, 2022 Accrued pension liabilities $ 45,735 Credit balance of investments accounted for using equity method 8,054 Guaranteed deposits received 2,441 $ 56,230	December 31, 2021
		$ 54,499 7,133 1,678 $ 63,310

• (18) 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 ：

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

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

Changes i	n net defined	benefit liabilities are as	benefit liabilities are as	follows：
		Present value of				Net	defined benefit
		Defined benefit obligations		Fair value of plan assets		Liability
	2023
At January 1		($	80,836)	$ 25,524		($	55,312)
Current service costs		(	315)	-		(		315)
Interest income (expenses)		(	970)	306		(		664)
		(	82,121)	25,830		(	56,291)
Remeasurements
Experience adjustments			71	59				130
			71	59				130
Pension fund	contributions		-	9,600				9,600
Paid pension			16,851 (	16,851)				-
At December	31	($	65,199)	$ 18,638		($	46,561)
		Present value of					Net defined benefit
		Defined benefit obligations		Fair value of plan assets			Liability
	2022
At January 1		($	83,138)	$ 16,109			($	67,029)
Current service costs		(	347)		113		(	234)
Interest income (expenses)		(	582)		-		(	582)
		(	84,067)	16,222			(	67,845)
Remeasurements
Actuarial gains and losses			2,899		-			2,899
arising	from changes in
financial assumptions
Experience adjustments		(	766)		800				34
			2,133		800			2,933
Pension fund	contributions		-	9,600				9,600
Paid pension			1,098	( 1,098)					-
At December	31	($	80,836)	$ 25,524			($	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 fore mentioned 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 ：

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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 ：

December 31, 2023 Effect on Present value of defined benefit obligations December 31, 2022 Effect on Present value of defined benefit obligations	Discount rate Increase by 1% Decrease by 1% ($ 4,498) $ 4,614 ($ 5,577) $ 5,723	Discount rate Increase by 1% Decrease by 1% ($ 4,498) $ 4,614 ($ 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%		Increase by 1%
	($ 4,498) ($ 5,577)	$ 4,614 $ 5,723	$ 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 Company 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 Company plans to pay is $2,787 in 2024.

• 2.(1) Effective since July 1, 2005, the Company has 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 contributes 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 pension costs recognized under the defined contribution pension plans of the Company were $6,906 and $7,120 for the years ended December 31, 2023 and 2022, respectively.

(19) Ordinary shares

1. 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 stock $160,000, with a par value of $10 (in dollars) per share . All proceeds from shares issued have been collected.

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

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

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

At January 1 Capital reduction to cover accumulated deficit At December 31	2023 16,000,001 - 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 reduction was December 8, 2022 .

1. 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 ：

2. (1) The dividends of preferred shares are not cumulative.

3. (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.

4. (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.

5. (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"

6. (5) The preferred shareholders have the right to vote, to elect, and to be elected.

7. (6) When the Company issues new shares by cash, preferred shareholders have the same preemptive stock options as ordinary shareholders

8. (7) When the Company distribute the re sidual assets, the preferred shareholders have the same order and percentage as ordinary shareholders.

9. (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.

10. (9) The preferred shareholders have no right to sell back.

11. (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.

12. (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.

13. (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.

14. 3.Treasury stock

15. (1) The subsidiary of the Company, BAYCOM OPTO-ELECTRONICS TECHNOLOGY

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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.

(20) 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

(21) Retained earnings (accumulated deficits)

1. According to the Article of Incorporation, the annual net income of the Company shall be appropriated in accordance with the priorities listed as follows:

2. (1) Tax payment.

3. (2) Recovery of losses.

4. (3) Appropriation of 10% for legal reserve unless the total legal reserve accumulated has already reached the amount of Groups’ authorized capital.

5. (4) Appropriation or reversal of special reserve pursuant to applicable law or regulation.

6. (5) Distribution of preferred shares dividends

7. (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.

8. 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 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.

9. 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.

10. 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.

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When debit balance on other equity items is reversed subsequently, the reversed amount could be included in the distributable earnings.

1. The accumulated deficits off-set for 2022 were resolved by the shareholders meeting on June 16, 2023.

(22) Operating revenue

2023 2022 Revenue from contracts with customers $ 535,782 $ 661,904

• 1.Disaggregation of revenue from contracts with customers

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

2023

023
Rev enu e fro m con tra ct s wit h ext ern al cus tom er s	Bus ine ss co Taiwan $449,935	Bus ine ss co	m mu ni cat io	n sy ste m Others $ 194	Int ell ig ent ele ctr om e sys tem an d ot he Taiwan USA $55,790 $561	Int ell	ig ent ele ctr om e	c han ica l r s Others $16,269	Total $535,782
							sys tem an d ot he
			USA $13,033

2022

022
Rev enu e fro m con tra ct s wit h ext ern al cus tom er s	Bus ine ss co Taiwan $446,717	Bus ine ss co	m mu ni cat io	n sy ste m Others $31,371	Int ell ig ent sys te Taiwan $109,230	Int ell	ig ent	ele ctr om e	c han ica l r s Others $13,310	Total $661,904
							sys te	m an d ot he
			USA $61,026					USA $ 250

• 2.Contract assets and liabilities

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

Contract liabilities - construction contracts Contract liabilities - product sales contracts	December 31, 2023 $ 10,091 $ 5,035	December 31, 2022 $- $ 4,031	January 1, 2022
			$- $ 2,997

• (2) Contract liabilities at the beginning of the period recognized as revenue in the

• current period

Product sales contract	2023 $ 2,780	2022
		$ 2,658

(23) Interest income

Interests from bank deposits	2023 $ 8,800	2022
		$ 3,260

(24) Other income

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Rent income Dividend income Other income - others	2023 $ 7,083 6,806 4,601 $ 18,490	2022
		$ 5,318 14,747 1,311 $ 21,376

(25) Other gains and losses

Gain arising from lease modification Foreign currency exchange gains Gains on disposal of investments Depreciation of investment properties Other gains and losses	2023 $ - 4,721 - ( 1,175) ( 615) $ 2,931	2022
		$ 32 13,244 80 ( 949) ( 281) $ 12,126

(26) Financial cost

Interest expense	2023 $ 24,764	2022
		$ 26,725

(27) Additional information on nature of expenses

Employee benefits expense Depreciation expense Amortization expense	2023 $ 163,261 20,942 1,858 $ 186,061	2022 $ 164,364 20,111 2,136 $ 186,611

(28) Employee benefit expenses

Wages and salaries Labor and health insurance fees Pension expenses Other personnel expenses	2023 $ 136,338 13,358 7,885 5,680 $ 163,261	2022
		$ 136,767 13,537 7,936 6,124 $ 164,364

1. 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.

2. The accrued amounts of employees and directors remuneration for the years ended

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December 31, 2023 and 2022 are both $0. The amounts 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 incur s accumulated deficit, the amounts accrued are $0.

1. The information about the employees’ and directors’ remuneration resolved by the board of directors is available at the Market Observation Post System website. .

(29) Income tax

• 1.Income tax expenses

• (1) Components of income tax expense:

Total current income tax Total deferred income tax Income tax expense	2023 $ - - $-	2022 $ - - $-

(2) Amount of 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 Tax payables calculated by profit before tax multiplying the enacted tax rates ($ 7,219) Items that shall be excluded based on tax laws 90 Tax exempt income based on tax laws ( 4,338) Origination and reversal of temporary differences 2,054 Tax losses not recognized as deferred tax assets 9,413 Income tax expense $-	2022
	$ 1,875 - ( 1,893) ( 1,421) 1,439 $-

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

Tax loss Temporary differences -Deferred tax labilities: Remeasurement of defined obligations			2023		December 31 $ 115,508 $ 880-
	At January 1 $ 115,508 ($ 880)	Recognized in Profit or Loss $- $-	Recognized in Other Comprehensive Income $- $-	Recognized in equity $- $-

Tax loss Temporary differences： -Deferred tax labilities: Remeasurement of defined obligations			2022		December 31 $ 115,508
	At January 1 $ 115,508 ($ 880)	Recognized in Profit or Loss $- $-	Recognized in Other Comprehensive Income $- $-	Recognized in equity $- $-
					$ 880-

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

December 31, 2023

Year		Amount		Unused	Unrecognized deferred	Unrecognized deferred
incurred		filed/assessed		amount	income tax assets		Year of 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		Amount		Unused	Unrecognized deferred	Unrecognized deferred
incurred		filed/assessed		amount	income tax assets		Year of expiration
2013	$	140,434	$	140,434	$	140,434	2023
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		39,564	2029
2021		498,607		498,607		-	2031
2022		22,512		22,512		-	2032
	$	1,450,442	$	1,450,442	$	872,902

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

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

Deductible temporary differences	December 31, 2023 $ 128,941	December 31, 2022
		$ 172,828

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

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(30) Earnings (losses) per share

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

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 .

(31) Supplemental information on cash flows

Investing activities with partial cash payments ：

Purchase of property, plant and equipment Add: Opening balance of payable on equipment Less: Ending balance of payable on equipment Less: Opening balance of prepayments for equipment Add: Ending balance of prepayments for equipment Cash paid	2023 $ 6,810 1,333 ( 2,724) ( 2,134) 808 $ 4,093	2022 $ 3,980 906 ( 1,333) ( 670) 2,134 $ 5,017

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(32) Changes in liabilities from financing activities

Short-term Borrowings January 1, 2023 $740,000 Changes in cash flows from financing activities ( 416,000) Interest expenses - Interest expenditures - Increase in lease liabilities - December 31, 2023 $324,000 Short-term Borrowings January 1, 2022 $567,112 Changes in cash flows from financing activities 172,888 Interest expenses - Interest expenditures Gains on lease modifications - Increase in lease liabilities- Others - December 31, 2022 $740,000	Long-term borrowings (including the current portion) Corp. bonds (including the current portion) Lease principal repayment $ 200,000 $ 133,000 $191,100 - - ( 11,443) - - 4,701 - - ( 4,701) - - 4,157 $ 200,000 $ 133,000 $183,814 Long-term borrowings (including the current portion) Corp. bonds (including the current portion) Lease principal repayment $ 480,000 $ 133,000 $199,594 ( 280,000) - ( 11,705) - - 4,899 ( 4,899) - - ( 32) - - 3,573 - - ( 330) $ 200,000 $ 133,000 $191,100	Long-term borrowings (including the current portion) Corp. bonds (including the current portion) Lease principal repayment $ 200,000 $ 133,000 $191,100 - - ( 11,443) - - 4,701 - - ( 4,701) - - 4,157 $ 200,000 $ 133,000 $183,814 Long-term borrowings (including the current portion) Corp. bonds (including the current portion) Lease principal repayment $ 480,000 $ 133,000 $199,594 ( 280,000) - ( 11,705) - - 4,899 ( 4,899) - - ( 32) - - 3,573 - - ( 330) $ 200,000 $ 133,000 $191,100

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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 Baycom Opto-Electronic Technology CO., LTD. Wu Han Tecom Co., Ltd TECO Electric & Machinery Co., Ltd Guandehong Technology Co., Ltd. Taiwan Ericsson Co., Ltd. WANTGO.COM CO., LTD. JIE ZHENG PROPERTY SERVICE & MANAGEMENT CO., LTD. INFORMATION TECHNOLOGY TOTAL SERVICES CO., LTD. TONG DAI CO., LTD. Dong An Asset Development Management Co., Ltd. TECO Technology（Vietnam）Co.，Ltd. Yatec Engineering Corporation E-JOY Electronic Internationa Co., LTD. A-OK TECHNICAL SERVICE CO., LTD. TAIWAN PELICAN EXPRESS CO., LTD. TAISAN ELECTRIC CO., LTD. Century Development Corporation SANKYO CO.,LTD Motovario S.p.A TECO Australia Pty Limited (TAC) Teco - Westinghouse Motor Company TECO Westinghouse Motor Industrial Canada TECO Westinghouse Motor Company S. A. de C. V. TECO(PHILIPPINES)3C APPLIANCES,INC. TECO ELECTRIC & MACHINERY (PTE) LTD. TECO New Zealand Ltd. YUBANTEC INDIA PRIVATE LIMITED

Related Party Category

Subsidiary Subsidiary Parent Company Substantive related party Substantive related party Substantive related party Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Fellow subsidiary Other related party

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(3) Significant transactions and balances with related parties

1.Opearating revenue

Sales of goods： －Fellow subsidiary －Substantive related party －Subsidiary －Parent company	2023 $ 4,301 58 14,002 6,627 $ 24,988	2022
		$ 2,248 54 29,851 16,894 $ 49,047

Sales are based on normal commercial terms and conditions 2.Purchases of goods

Purchases of goods －Subsidiary －Parent company	2023 $ 17,176 16,105 $ 33,281	2022
		$ 15,020 13,680 $ 28,700

Purchases of goods are based on normal commercial terms and conditions. 3.Receivables from related parties

Notes receivables: －Fellow subsidiary Accounts receivables: －Fellow subsidiary －Wu Han Tecom Co., Ltd －Parent company Other receivables －Substantive related party －Subsidiary Allowance for bad debts Subtotal Ttl	December 31, 2023 $ 101 2,141 13,026 1,987 17,154 11 295 306 - 306 $ 17,561	December 31, 2022 $ 221 145 23,409 1,692 25,246 5 269 274 - 274 $ 25,741

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

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Accounts payables: －Subsidiary －Parent company Other payables to related parties： －Fellow subsidiary －Wu Han Tecom Co., Ltd －Parent company	December 31, 2023 $ 2,672 583 $ 3,255 $ 26 6,186 266 $ 6,478	December 31, 2022
		$ 1,629 1,346 $ 2,975 $ 60 8,016 481
		$ 8,557

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 t he payables.

5.Other related party transactions

Bonds payable －Baycom Opto-Electronic Technology Co.,LTD. Interest expenses-bonds payable －Baycom Opto-Electronic Technology Co.,LTD. Service costs/other expense －Wu Han Tecom Co., Ltd －Taiwan Ericsson Co., Ltd. －Other Subsidiaries －Parent company	December 31, 2023 $ 133,000 2023 $ 2,660 2023 $ 20,336 - 326 1,984 $ 22,646	December 31, 2022
		$ 133,000
		2022
		$ 2,660
		2022 $ 20,572 ( 3,297) 221 2,400 $ 19,896

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1. Lease transactions － lessee

2. (1) The Company 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	December 31, 2023 $ 3,573	December 31, 2022
		$ 3,573

• (3) Rent expenses

Fellow subsidiary Parent company Ttl	2023 $ 91 345 $ 436	2022 $ 48 382 $ 430

• (4) Lease liability

Interest expenses

Fellow subsidiary	2023 $ 48	2022 $ 48

1. Leasing transaction － Lessor

In 2023 and 2022, the Company received rental income of $5,821 and $5,313 respectively from leasing part of the plants and offices to related parties, which is collected on a monthly basis .

－Substantive related party －Baycom Opto-Electronic Technology Co.,LTD.	2023 $ 73 5,748 $ 5,821	2022 $ 65 5,248 $ 5,313

• 8.Loans to related parties

Loans from related parties

Interest expense Baycom Opto-Electronic Technology CO., LTD.	2023 $-	2022
		$ 23

The terms of the loan to the subsidiary is to repay the loan by a lump sum payment one year after the loan is provided, and the interest for the year ended December 31, 2022 is charged at 1.7%.

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(4) Key management compensation

Salaries and other short-term employee benefits Post-employment benefits Total	2023 $ 12,821 428 $ 13,249	2022 $ 8,262 216 $ 8,478

8. RESTRICTED ASSETS

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

Assets Item	Carrying	amount	Purpose Lease security deposit and borrowing restrictions Guarantee for the customs duties Guarantee for bank loans Guarantee for bank loans
	December 31, 2023 s $ 84,773 681 242,530 74,170 $ 402,154	December 31, 2022 $ 245,890 662 460,000 77,394 $ 783,946
Cash and bank deposits (recognized a financial assets at amortized cost) Guaranteed deposits paid Financial assets at fair value through other comprehensive income－non-current Plant in Hsinchu

9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNISED CONTRACT

(1) Contingencies

None.

(2) Commitments

As of December 31, 2023, the Company commissioned banks to issue the guarantee bills and guarantee letters for the fulfillment of sale contracts and bids, with a total amount of $ 4,588.

10. SIGNIFICANT DISASTER LOSS

None.

11. SIGNIFICANT SUBSEQUENT EVENTS

None.

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1. OTHERS

(1) Capital management

The Company’s objectives when managing capital are to safeguard the Company’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 Company may issue new shares or sell assets to reduce debts. The Company 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 Company 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 $ 657,000 32,534 689,534 205,619 $ 895,153 77%	December 31, 2022
		$ 1,073,000 ( 27,000) 1,046,000 211,071 $ 1,257,071 83%

(2) Financial instruments

1.Financial instruments by category

Financial assets Financial assets at fair value through other comprehensive income Investments in equity instruments measured at fair value through profit or loss (current and non-current) Financial assets, loans and receivables at amortized cost Cash and cash equivalents Financial assets at amortized cost Notes receivable Accounts receivable Other receivables Guaranteed deposits paid	December 31, 2023 $ 266,190 32,534 84,773 15,670 105,436 3,248 2,458 $ 510,309	December 31, 2022
		$ 499,149 27,000 245,890 26,521 100,536 2,204 1,775 $ 903,075

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Financial liabilities Short-term borrowings Notes payables Accounts payables Other payables Bonds payables (including current portion) Long-term borrowings (including current portion) Guaranteed deposits received Lease liabilities	December 31, 2023 $ 324,000 2,070 55,384 55,993 133,000 200,000 2,441 $ 772,888 $ 183,814	December 31, 2022
		$ 740,000 2,280 89,542 51,272 133,000 200,000 1,678 $ 1,217,772 $ 191,100

• 2.Risk management policies

• (1) The Company’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 Company'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 Company's financial position and financial performance.

• (2) Risk management is executed by the Company’s finance department by following authorize policies. The finance department cooperates with the Company's operating units, and takes 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.

• Significant financial risks and degrees of financial risks

• (1) Market risk

Foreign exchange risk

• A. The Company 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 Company manages its foreign exchange risk through the Company Finance Department. To manage the foreign exchange risk arising from future business transactions and recognized assets and liabilities, all companies within the Company are regularly reviewed by the Company 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 Company's businesses involve a number of non -functional currencies (the Company'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:

~50~

(Foreign currency: Functional currency) Financial assets Monetary items USD : TWD CNY：TWD Non-monetary items: none. Financial liabilities Monetary items USD：TWD CNY：TWD Non-monetary items: none. (Foreign currency: Functional currency) Financial assets Monetary items USD : TWD CNY：TWD Non-monetary items: none. Financial liabilities Monetary items USD：TWD CNY：TWD		December 31, 2023 Exchange rate Carrying amount (NT) 30.705 $ 84,531 4.327 15,209 30.705 $ 32,302 4.327 5,409 December 31, 2022 Exchange rate Carrying amount (NT) 30.71 $ 241,104 4.408 23,310 30.71 $ 65,781 4.408 1,666	December 31, 2023 Exchange rate Carrying amount (NT) 30.705 $ 84,531 4.327 15,209 30.705 $ 32,302 4.327 5,409 December 31, 2022 Exchange rate Carrying amount (NT) 30.71 $ 241,104 4.408 23,310 30.71 $ 65,781 4.408 1,666
	Foreign currency amount(thousand) $ 2,753 3,515 $ 1,052 1,250
	Foreign currency amount(thousand) $ 7,851 5,288 $ 2,142 378	Exchange rate 30.71 4.408 30.71 4.408
			(NT) $ 241,104 23,310 $ 65,781 1,666

Non-monetary items: none.

• D. The total amount of all exchange gains (losses) (including realized and unrealized) recognized by the Company due to exchange rate fluctuations was $4,721 and $13,244, respectively, for the years ended December 31, 2023 and 2022.

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• E. The information would be materially affected by the exchange rate fluctuations is as follows ：

(Foreign currency: Functional currency) Financial assets Monetary items USD : TWD CNY：TWD Financial liabilities Monetary items USD：TWD CNY：TWD (Foreign currency: Functional currency) Financial assets Monetary items USD : TWD CNY：TWD Financial liabilities Monetary items USD：TWD CNY：TWD	2023 Sensitivity Analysis Effect on profit and loss Effect on profit and loss Effect on profit and loss
	1% $ 845 $ - 1% 152 - 1% ($ 323) $ - 1% ( 54) - 2022 Sensitivity Analysis Effect on profit and loss Effect on profit and loss Effect on profit and loss
	1% $ 2,411 $ - 1% 233 - 1% ($ 658) $ - 1% ( 17) -

Price risk

A. The Company’s equity instruments, which are exposed to price risk, are the held 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 Company diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the Company.

• B. The Company mainly invests in equity instruments comprised of shares and open-end funds issued by the domestic companies. The value of equity instruments is susceptible to market price risk arising from uncertainties about future performance of equity markets. 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 Company’s other comprehensive income for the years ended December 31, 2023 and 2022 by $2,662 and 4,991, respectively.

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Cash flow and fair value interest rate risk

• A. The Company’s main interest rate risk arises from short-term and long-term borrowings with variable rates which expose the Company to cash flow interest rate risk. During the years ended December 31, 2023 and 2022, the Company’s borrowings at variable rates were denominated in USD and NTD.

• B. Borrowings of the Company are measured at amortized cost and the interest rate will be repriced according to the contractual agreement every year, thus the Company 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 by $5,256 and $8,584, 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 Company arising from default by the clients or counterparties of financial instruments. Company 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 Company manages credit risk in terms of the Company. The Company 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 Company 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 under general model ：

  • (1) The Company 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 Company 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 at amortized cost held by the Company 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.

• D. Credit Risk Impairment Assessment of Accounts Receivable and Notes Receivable ：

  • (1) The Company estimates the expected credit losses based on the simplified approach with a loss rate method for the receivables and receivables from customers according to their ratings.

  • (2) The Company 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 ：

Group 1 December 31, 2023 Expected loss rate 0.03%~1% Total carrying amount $ 49,572 Loss allowance $ 158 Group 1 December 31, 2022 Expected loss rate 0.03%~1% Total carrying amount $ 53,510	Group 2 0.03%~2% $ 15,106 $ - Group 2 0.03%~2% $ 11,071	Group 3 0.03%~5% $ 35,343 $ 4 Group 3 0.03%~5% $ 31,831	Group 4 0.03%~10% $ 18,229 $ 392 Group 4 0.03%~10% $ 28,518	Group 5 0.03%~30% $ 3,547 $ 137 Group 5 0.03%~30% $ 2,687	Total $ 121,797 $ 691 Total $ 127,617

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Loss allowance $ - $ - $ 25 $ 489 $ 46 $ 560

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

At January 1 Provision for impairment loss(reversal) Amount written off At December 31	2023 Accounts receivables $ 560 131 - $ 691	2022 Accounts receivables
		$ 622 ( 62) - $ 560

• (3) Liquidity risk

• A. Cash flow forecasting is performed in the various departments of the Company and aggregated by the Company treasury. The Company treasury monitors rolling forecasts of the Company’s liquidity requirements to ensure it has sufficient cash to meet operational needs.

• B. The Company of unutilized borrowing amounts are shown as below s:

Floating Rate expiry within 1 year expiry more than 1 year	December 31, 2023 $ 277,510 - $ 277,510	December 31, 2022
		$ 425,061 - $ 425,061

~54~

• C. The table below analyses the Company’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: December 31, 2023Less than 1 year Short-term borrowings $ 326,006 Notes payables 2,070 Accounts payables 55,384 Other payables 55,993 Bonds payable 2,660 Lease liabilities 12,396 Long-term borrowings (including current portion) 204,840 Non-derivative financial liabilities: December 31, 2022Less than 1 year Short-term borrowings $ 747,735 Notes payables 2,280 Accounts payables 89,542 Other payables 51,272 Bonds payable 2,660 Lease liabilities 12,926 Long-term borrowings (including current portion) 4,360	Between 1 and 2 years $ - - - - 5,320 11,965 - Between 1 and 2 years $ - - - - 5,320 12,096 4,160	Between 2 and 5 years $ - - - - 143,640 33,330 - Between 2 and 5 years $ - - - - 146,300 33,935 200,000	More than 5 years
			$ - - - - - 177,763 - More than 5 years
			$ - - - - - 188,873 -

The Company 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 listed and over-the-counter stocks invested by the Company shall be attributed accordingly.

• Level 2 ： Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

• Level 3 ： Unobservable inputs for the asset or liability.

• 2.Financial instruments not measured at fair value:

• Except for those listed in the table below, the carrying amounts of the Company’s cash and cash equivalents, financial assets at amortized cost, notes receivables, accounts receivables, other receivables and guaranteed deposits paid (listed other non-current assets

~55~

and financial assets measured at amortized cost ), short-term borrowings, notes payables, accounts payables, other payables and long-term borrowings (including current portion) approximate to their fair values:

Financial liabilities ： Bonds payables (Including current portion) Financial liabilities ： Bonds payables (Including current portion)

	December 31, 2023	December 31, 2023
Carrying amount $ 133,000		Fair value
	Level 1 Level 2 $- $- December 31, 2022		Level 3 $ 133,000
Carrying amount $ 133,000		Fair value
	Level 1 $-	Level 2 $-	Level 3 $ 133,000

1. 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 Level 2 Level 3 Total Assets Fair value on a recurring basis Financial assets at fair value through other comprehensive income - Equity instruments $265,089 $- $ 1,101 $266,190 Debt：None. December 31, 2022 Level 1 Level 2 Level 3 Total Assets Fair value on a recurring basis Financial assets at fair value through other comprehensive income - Equity instruments $498,382 $- $ 767 $ 499,149 Debt：None.

• (2)The methods and assumptions the Company used to measure fair value are as follows:

• A. The Company used market quoted prices as their fair values (that is, Level 1), which is closing price of listed and OTC shares , and shares in emerging market.

• B. Except for financial instruments with active markets, the fair value of other financial instruments is measured by using valuation techniques.

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• C.When assessing non-standard and low-complexity financial instruments, the Company 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.

• 5.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 :

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

(4) The future financial fitness plan

As of December 31,2023, the accumulated loss exceeded 50% of the paid-in capital, the debt-to-capital ratio was 83%. 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:

2. (1) Actively promote ESG transformation and launch 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.

3. (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.

4. (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.

5. (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.

6. (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.

7. 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.

8. Financial perspective ： Keep to maintain support from banks. The Company 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

1. A. Basic information: Refer to Table 5.

2. Significant transactions, either directly or indirectly through a third area, with investee companies in China: Please refer to Table 6.

3. (4) Major shareholders

Major shareholders ： Refer to Table 7.

14. SEGMENT INFORMATION

N/A

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Tecom Co., LTD.

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-Electronic Technology Co., Ltd. included in the consolidation individual, the relevant transactions have been written off when preparing the combined financial statements.

Tecom Co., LTD.

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

Name of the acquiring or selling company Table 2	Type and name of the security	Account Table 2	Counter-party（ Note 1）	Relationsh ip（Note	Beginningof	theperiod	Acquisition	Acquisition		S	ale		End of th Expressed in th (Except as oth	eperiod ousands of NTD erwise indicated)
					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.

Significant inter-company transactions during the reporting period

For the year ended December 31, 2023

Table 3

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.

Information on investees

For the year ended December 31, 2023

			For the year ended December 31, 2023	December 31, 2023	December 31, 2023
Table 4 Investor	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		Expressed in thousands of NTD (Except as otherwise indicated) (loss) of the investee income (loss) recognised Footnote
							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.

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	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 Expressed in thousan (Except as otherwise	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.

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. Major Shareholders Information December 31, 2023

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

Tecom Co., LTD STATEMENT OF CASH AND CASH EQUIVALENTS DECEMBER 31, 2023

Expressed in thousands of New Taiwan dollars

	DECEMBER 31, 2023
Statement 1 Item Petty cash Bank Deposits Demand deposits ─NTD ─Foreign currency Checking accounts Time deposits – foreign currency	Description USD 80,504.99 FX 30.705 Others USD 400,000.00 FX 30.705	Expressed i Amount
		$ 211 14,979 2,472 2,202 58 12,612 $ 32,534

Statement 1 p1

Tecom Co., LTD

STATEMENT OF ACCOUNTS RECEIVABLES DECEMBER 31, 2023

Statement 2 Customer Name General customers─ Order Intelligent Buildings Co., Ltd. Songyu Technology Co., ltd. HUNG CHIA TECH INC., LTD. Others Less：Allowance for bad debts Related Parties─ TECO Electric & Machinery Co., Ltd Wuhan Dongxun Technology Co., Ltd. Others Less：Allowance for bad debts Total	Items	Expressed in thousands of New Taiwan dollars Amount Notes $ 11,198 7,969 5,311 64,495 None of the miscellaneous items exceeds 5% of the balance of this item. The amount of accounts receivable longer than 1 year is $0. 88,973 ( 691) 88,282 1,987 13,026 2,141 None of the related parties exceeds 5% of the balance of this item. The amount of accounts receivable longer than 1 year is $0. 17,154 - 17,154 $ 105,436

Statement 2 p1

Tecom Co., LTD STATEMENT OF INVENTORIES DECEMBER 31, 2023

Statement 3

Expressed in thousands of New Taiwan dollars

Items Summary Merchandise Finished goods Work in process Raw materials Less: Allowance for loss for market price decline and obsolete and slow-moving inventories	Amount Cost Net Realizable Value Note $ - $ - Measure at net realizable value 77,568 97,307 Measure at net realizable value 4,005 7,617 Measure at net realizable value 66,239 78,680 Measure at net realizable value 147,812 $ 183,604 ( 42,110) $ 105,702	Collateral
	Cost $ - 77,568 4,005 66,239 147,812 ( 42,110) $ 105,702
		None. None. None. None.

Statement 3 p1

Tecom Co., LTD

STATEMENT OF FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED DECEMBER 31, 2023

Statement 4

Expressed in thousands of New Taiwan dollars

Name Taiwan High Speed Rail Corporation NEOVIDEO TECHNOLOGY CORPORATION Edimax Technology Co., Ltd. International Integrated Systems, Inc	Beginning Balance	Fair value $466,385 87 31,997 680 $499,149	Additions Number of shares Amount - $ 24,649 - - - 1,185 - 334 $ 26,168	Decrease	Amount $241,995 - 17,132 - $259,127	Ending Balance		Collateral Note	Footnote
	Number of shares 16,222,080 1,066,667 2,119,000 94,706			Number of shares 8,110,080 - 1,119,000 -		Number of shares 8,112,000 1,066,667 1,000,000 94,706	Fair value $249,039 87 16,050 1,014 $266,190
			shares - - - -

Note: Please refer to Note 8 for the explanations on the shares pledge as collaterals for long-term bank borrowings.

Statement 4 p1

Tecom Co., LTD

STATEMENT OF CHANGES IN INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD FOR THE YEAR ENDED DECEMBER 31, 2023

Statement 5

Expressed in thousands of New Taiwan dollars

	Increases in Investment (Note) Shares Amount - $ 12,376 - - 200,000 - - - - - 132,704 967 48,611 1,563 - - $ 14,906	Increases in Investment (Note) Shares Amount - $ 12,376 - - 200,000 - - - - - 132,704 967 48,611 1,563 - - $ 14,906	Decrease in Investment (Note) Shares Amount - ( 16,188) ( 995,000) 7,133 - ( 8,054) -- - - - - - ( 1,134) - ( 19) ($ 18,262)	Decrease in Investment (Note) Shares Amount - ( 16,188) ( 995,000) 7,133 - ( 8,054) -- - - - - - ( 1,134) - ( 19) ($ 18,262)	Balance, December 31, 2023 Market price or equity net value Pledged as collateral Shares Own ship Amount Unit price Total price 14,700,741 43.76% $ 201,593 $ 13.71 $ 201,593 None - 0.00% - - - None 200,000 100.00% ( 8,054) - ( 8,054) 596,925 28.19% -- - None 1,100,000 10.00% 3 - 3 None 567,799 4.90% 6,779 11.94 6,779 None 684,426 5.26% 9,841 14.38 9,841 None 480,000 16.00% 1,650 3.44 1,650 None $ 211,812 $ 211,812	Balance, December 31, 2023 Market price or equity net value Pledged as collateral Shares Own ship Amount Unit price Total price 14,700,741 43.76% $ 201,593 $ 13.71 $ 201,593 None - 0.00% - - - None 200,000 100.00% ( 8,054) - ( 8,054) 596,925 28.19% -- - None 1,100,000 10.00% 3 - 3 None 567,799 4.90% 6,779 11.94 6,779 None 684,426 5.26% 9,841 14.38 9,841 None 480,000 16.00% 1,650 3.44 1,650 None $ 211,812 $ 211,812	Balance, December 31, 2023 Market price or equity net value Pledged as collateral Shares Own ship Amount Unit price Total price 14,700,741 43.76% $ 201,593 $ 13.71 $ 201,593 None - 0.00% - - - None 200,000 100.00% ( 8,054) - ( 8,054) 596,925 28.19% -- - None 1,100,000 10.00% 3 - 3 None 567,799 4.90% 6,779 11.94 6,779 None 684,426 5.26% 9,841 14.38 9,841 None 480,000 16.00% 1,650 3.44 1,650 None $ 211,812 $ 211,812	Footnotes
	Shares		Shares - ( 995,000) - - - - - -		Shares 14,700,741 - 200,000 596,925 1,100,000 567,799 684,426 480,000	Own ship
							collateral None None None None None None None
$ 205,405 ( 7,133) - - 3 5,812 9,412 1,669 $ 215,168	- - 200,000 - - 132,704 48,611 -	$ 12,376 - - - - 967 1,563 - $ 14,906		( 16,188) 7,133 ( 8,054) - - - ( 1,134) ( 19) ($ 18,262)		43.76% 0.00% 100.00% 28.19% 10.00% 4.90% 5.26% 16.00%

Note: Increase/decrease in the current period adopted the gains or losses in investments recognized by equity method, the cash dividends paid by investees, and the refund of paid-up capital arising from liquidation of investees.

Statement 5 p1

Tecom Co., LTD

STATEMENTS OF CHANGES IN PROPERTY, PLANT AND EQUIPMENT FOR THE YEAR ENDED DECEMBER 31, 2023

Statement 6

Expressed in thousands of New Taiwan dollars

Item Buildings and structures Machinery equipment Test equipment Other equipment	Beginning balance $ 126,265 1,183 - 9,683 $ 137,131	Increase in the period $ - - 133 6,677 $ 6,810	Decrease in the period $ - - - ( 2,417) ($ 2,417)	Transfer in the period ($ 32,447) - - - ($ 32,447)	Ending balance Pledged as collateral Note $ 93,818 Note 1 1,183 None 133 None 13,943 None $ 109,077

Note 1: The carrying amount of property, plant and equipment, and investment properties pledged as collaterals to the banks is $74,170.

Statement 6 p1

Tecom Co., LTD

STATEMENTS OF CHANGES IN ACCUMULATED DEPRECIATION OF PROPERTY, PLANT AND EQUIPMENT FOR THE YEAR ENDED DECEMBER 31, 2023

Statement 7

Expressed in thousands of New Taiwan dollars

Item Buildings and structures Machinery equipment Test equipment Other equipment	Beginning balance ($ 71,661) ( 555) - ( 3,344) ($ 75,560)	Increase in the period ($ 2,049) ( 237) ( 26) ( 4,433) ($ 6,745)	Decrease in the period $ - - - 2,417 $ 2,417	Reclassification in the period $ 18,774 - - - $ 18,774	Ending balance ($ 54,936) ( 792) ( 26) ( 5,360) ($ 61,114)

Statement 7 p1

Tecom Co., LTD

STATEMENTS OF CHANGES IN COSTS OF INVESTMENT PROPERTIES FOR THE YEAR ENDED DECEMBER 31, 2023

Statement 8

Expressed in thousands of New Taiwan dollars

Pledged as Item Beginning balance Increase in the period Decrease in the period Transfer in the period Ending balance collateral Note Buildings and structures $ 52,701 $ - $ - $ 32,446 $ 85,147 Note

Note: The carrying amount of property, plant and equipment, and investment properties pledged as collaterals to the banks is $74,170.

Statement 8 p1

Tecom Co., LTD

STATEMENTS OF CHANGES IN ACCUMULATED DEPRECIATION OF INVESTMENT PROPERTIES FOR THE YEAR ENDED DECEMBER 31, 2023

Statement 9

Expressed in thousands of New Taiwan dollars

Item Beginning balance Increase in the period Reclassification in the period Ending balance Note Buildings and structures ($ 29,911) ($ 1,175) ($ 18,773) ($ 49,859)

Statement 9 p1

Tecom Co., LTD STATEMENT OF SHORT-TERM BORROWINGS DECEMBER 31, 2023

Statement 10 Expressed in thousands of New Taiwan dollars Type of Loan Descriptions Ending Balance Period of contract Range of Interest Rate Credit Facility Collateral Unsecured Loan Credit Loan $ 110,000 2023/03/07~2024/03/07 2.70%~2.948% $ 110,000 None. Secured Loan Mortgage 214,000 2023/09/22~2024/03/22 1.84%~2.34% 214,000 Note $ 324,000

Note: The carrying amount of property, plant and equipment, and investment properties pledged as collaterals to the banks is $74,170.

Statement 10 p1

Statement 11 Vendor Name General manufacturers－ HONOR TONE Ltd. Others Related parties－ TECO Electric & Machinery Co., Ltd Wuhan Dongxun Technology Co., Ltd. Total	Tecom Co., LTD ACCOUNTS PAYABLES DECEMBER 31, 2023 Expressed in thousands of New Taiwan dollars Summary Amount Footnotes $ 21,339 30,790 None of the suppliers exceeds 5% of the balance of this item. 52,129 583 2,672 3,255 $ 55,384

Statement 11 p1

Tecom Co., LTD STATEMENT OF OPERATING REVENUE FOR THE YEAR ENDED DECEMBER 31, 2023

Statement 12

Expressed in thousands of New Taiwan dollars

Items Quantity Net operating income Business communication system 172,323 sets Smart electromechanical system and others 14,354 sets Total	Amount 463,162 72,620 $ 535,782	Note

Statement 12 p1

Tecom Co., LTD STATEMENT OF OPERATING COSTS FOR THE YEAR ENDED DECEMBER 31, 2023

Statement 13

Expressed in thousands of New Taiwan dollars

Items Merchandise cost Merchandise at January 1, 2023 Add: Merchandise purchased Less: Merchandise at December 31, 2023 Transferred to excess and obsolete material to be scrapped ( Transferred to finished goods ( Merchandises consumed in the period Direct raw materials Raw materials at January 1, 2023 Add：Raw materials purchased Transferred from work in process and finished goods Less：Ending balance ( Raw materials sold ( Transferred to expenses ( Transferred to excess and obsolete material to be scrapped ( Raw material consumed in the period Direct labor Manufacturing overhead Manufacturing cost Add: Work in process at January 1, 2023 Less : Work in process at December 31, 2023 ( Transferred to raw materials ( Transferred to expenses ( Finished goods cost Add : Finished goods at January 1, 2023 Finished goods purchased Transferred from merchandise Less : Finished goods at December 1, 2023 ( Transferred to raw material ( Transferred to maintenance costs ( Transferred to expenses (	Items Merchandise cost Merchandise at January 1, 2023 Add: Merchandise purchased Less: Merchandise at December 31, 2023 Transferred to excess and obsolete material to be scrapped ( Transferred to finished goods ( Merchandises consumed in the period Direct raw materials Raw materials at January 1, 2023 Add：Raw materials purchased Transferred from work in process and finished goods Less：Ending balance ( Raw materials sold ( Transferred to expenses ( Transferred to excess and obsolete material to be scrapped ( Raw material consumed in the period Direct labor Manufacturing overhead Manufacturing cost Add: Work in process at January 1, 2023 Less : Work in process at December 31, 2023 ( Transferred to raw materials ( Transferred to expenses ( Finished goods cost Add : Finished goods at January 1, 2023 Finished goods purchased Transferred from merchandise Less : Finished goods at December 1, 2023 ( Transferred to raw material ( Transferred to maintenance costs ( Transferred to expenses (	Amount $ 8,736 20,953 - 6,312) 2,627) $ 20,750 99,667 107,376 144,550 66,239) 30,423) 2,088) 14,169) 238,674 7,890 24,226 270,790 6,384 4,005) 81,505) 611) $ 191,053 116,438 127,678 2,627 77,568) 63,045) 48) 533)
	( ( (
	( ( ( (

Statement 13 p1

Tecom Co., LTD STATEMENT OF OPERATING COSTS FOR THE YEAR ENDED DECEMBER 31, 2023

Statement 13

Expressed in thousands of New Taiwan dollars

Items Transferred to excess and obsolete material to be scrapped Costs of goods sold Costs of raw materials sold Losses on inventory valuation Service costs Manufacturing overhead not allocated Other operating costs Total operating costs	(	Amount 5,943) 290,659 30,423 9,311 13,677 28,707 5,289 $ 398,816

Statement 13 p2

Statement 13 p3

Tecom Co., LTD MANUFACTURING COSTS FOR THE YEAR ENDED DECEMBER 31, 2023

Expressed in thousands of New Taiwan dollars

Statement 14 Items Processing cost Salary expenditure Depreciation expense Other expenses Less: Unallocated Manufacturing Overhead	Summary	Ex Amounts $ 21,839 16,650 7,488 6,956 ( 28,707) $ 24,226	pressed in thousands of New Taiwan dollar Footnotes None of the items exceeds 5% of the balance of this item.

Statement 14 p1

Tecom Co., LTD STATEMENT OF SELLING EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2023

Statement 15 Items Salary expenditure Insurance expense Depreciation Other expenses	Summary	Expressed in thousands of New Taiwan dollars Amounts Footnotes $ 42,822 5,295 4,980 18,953 None of the items exceeds 5% of the balance of this item. $ 72,050

Statement 15 p1

Tecom Co., LTD

STATEMENT OF GENERAL AND ADMINISTRATIVE EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2023

Expressed in thousands of New Taiwan dollars

Statement 16 Items Salary expenditure Service expenditure Depreciation Insurance expense Other expenses	Summary	Ex Amounts $ 28,569 5,027 5,817 2,795 5,878 $ 48,086	pressed in thousands of New Taiwan dollar Footnotes None of the items exceeds 5% of the balance of this item.

Statement 16 p1

Tecom Co., LTD

STATEMENT OF RESEARCH AND DEVELOPMENT EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2023

Expressed in thousands of New Taiwan dollars

Statement 17 Items Salary expenditure Service expenditure Other expenses	Summary	Ex Amounts $ 37,635 20,760 13,868 $ 72,263	pressed in thousands of New Taiwan dollars Footnotes None of the items exceeds 5% of the balance of this item.

Statement 17 p1

Tecom Co., LTD

SUMMARY OF EMPLOYEE BENEFITS, DEPRECIATION AND AMORTIZATION EXPENSES BY FUNCTION FOR THE YEAR ENDED DECEMBER 31, 2023

Statement 18

Expressed in thousands of New Taiwan dollars

Function Type	2023	2023	2023	2022	2022	2022
	belongs to business cost	belongs to business expense	Total	belongs to business cost	belongs to business expense	Total
Employee Benefit Expenses
Salary Expenses	$24,540	$109,026	$133,566	$24,643	$109,332	$133,975
Labor health insurance	2,826	10,532	13,358	2,822	10,715	13,537
Pension Expenses	1,483	6,402	7,885	1,479	6,457	7,936
Director's remuneration	-	2,772	2,772	-	2,792	2,792
Other employee benefit expenses	1,452	4,228	5,680	1,553	4,571	6,124
Depreciation expense	7,488	13,454	20,942	5,911	14,200	20,111
Amortization expenses	109	1,749	1,858	168	1,968	2,136

1. As of December 31, 2023 and 2022 the amount of employee of the Company was 155 people and 168 people. Among them, the number of directors who are not concurrently employees is 7. . 2. Companies which are listed on the stock exchange or traded on the OTC securities trading center shall be disclosure of the following information ： (1) .

2. (1) The average employee benefit cost is 1,084 thousand in this period.

The average employee benefit cost is 1,004 thousand in previous period.

• (2) The average Staff Salary Expenses is 902 thousand in this period.

The average Staff Salary Expenses is 832 thousand in previous period.

• (3) The change in the average employee salary is 8.41%.

(4)

A. This company has a company charter and the "Method for Paying Director and Functional Member Remuneration". According to the degree of participation and contribution of the directors and functional members in the operation of the Company, and reference to the domestic industry standards, the corresponding remuneration is regulated. In addition to director remuneration and business execution expenses, the Company shall pay director remuneration not more than 5% of the profits of the year, but when the Company has accumulated losses, it should be made up. The above remuneration shall be evaluated and proposed by the Salary Remuneration Committee, and then submitted to the Board of Directors for deliberation and decision.

• B. This company has a company charter and the "Performance Reward Method for Senior Management Level", which regulates the remuneration payment standards and performance evaluation for managers. The Salary Remuneration Committee shall evaluate and propose, and then submit to the Board of Directors for deliberation and decision.

• C. The salary & benefits policy of this company: The salary of the employees of this company is determined based on their educational background, professional knowledge and skills, and professional years of experience, and the annual salary adjustment is based on the Company's operating conditions, the employee's work performance, and the market conditions to determine the items and amount of salary adjustment.

Statement 18 p.1