LOOP - Annual Report 2023 | FinancialReports.eu

Stock Code: 3025

Loop Telecommunication International, Inc. and its subsidiaries

Consolidated Financial Statements for the Years Ended December 31, 2023 and 2022 and Independent Auditors’ Report

Address: 7F, No.8, Xin’an Road, Hsinchu Science Park Tel: (03)5787696

§Table of Contents§

Item I. Cover II. Table of Contents III. Declaration of Consolidated Financial Statements of Affiliated Enterprises IV. Independent Auditors’ Report Translated from Chinese V. Consolidated Balance Sheet VI. Consolidated Statement of Comprehensive Income VII. Consolidated Statement of Changes in Equity VIII. Consolidated Statement of Cash Flows IX. Notes to Consolidated Financial Statements (I) Company History (II) Approval date and procedures of the financial statements (III) New standards, amendments and interpretations adopted: (IV) Summary of significant accounting policies (V) Significant accounting judgments and key source of uncertainties for estimations and assumptions (VI) Explanation of significant accounting items (VII) Related party transactions (VIII) Pledged assets (IX) Significant contingent liabilities and unrecognized contractual commitments (X) Losses due to severe disasters (XI) Significant subsequent events (XII) Assets and liabilities in foreign currencies of material effects (XIII) Disclosures notes 1. Information on significant transactions 2. Information on investees 3. Information on investments in Mainland China 4. Information on major shareholders (XIV) Segment information	Pages 1 2 3 4`～`7 8 9`～`10 11 12`～`13 14 14 14`～`15 15`～`25 25`～`26 26`～`51 51 51 - - - 52 53`、`56`、`60 53`、`57 53`～`54 58`～`59 54`、`61 54`～`55	Notes to the Financial Statements
		- - - - - - - - 1 2 3 4 5 6 to 26 27 28 - - - 29 30 30 30 30 31

Declaration of Consolidated Financial Statements of Affiliated Enterprises

The entities that are required to be included in the consolidated financial statements of the Company for 2023 (from January 1, 2023 to December 31, 2023) under the Criteria Governing Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises are the same as those included in the consolidated financial statements prepared in conformity with International Financial Reporting Standards No. 10, "Consolidated Financial Statements" endorsed by the Financial Supervisory Commission. In addition, the information required to be disclosed in the combined financial statements is included in the consolidated financial statements. Consequently, the Company and its subsidiaries will not prepare a separate set of combined financial statements.

Very truly yours

Loop Telecommunication International, Inc.

Chairman: Yeh Maw-Lin

March 12, 2024

Independent Auditors’ Report Translated from Chinese

Shareholders and the Board of Directors of Loop Telecommunication International, Inc.,

Opinion

We have audited the accompanying consolidated balance sheet of Loop Telecommunication International, Inc. and its subsidiaries (the “Company”) as of December 31, 2023 and 2022, and the consolidated statement of comprehensive income, changes in equity and cash flows for the years then ended, and notes to the consolidated financial statements (including a summary of significant accounting policies).

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2023 and 2022, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Basis for opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and the Standards on Auditing of the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Company in accordance with The Norm of Professional Ethics for Certified Public Accountants of the Republic of China and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

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

provide a separate opinion on these matters.

Key audit matters for the Company’s consolidated financial statements for the year ended December 31, 2023 is stated as follows:

Revenue recognition

The major revenue sources of the Company includes the production and sales of user remote line disconnectors, high-speed network access equipment, smart network resource management selectors, and other relevant products. As revenue has material effects on the 2023 consolidated financial statements of Loop Telecommunication International, Inc., revenue recognition involves manual control operations, and there are risks related to sales counterparties and the authenticity of transactions due to the significant growth in the revenue from partial customers, we have identified the revenue recognition as a key audit matter. For the accounting policies of revenue recognition, please refer to Note 4.(12) to the consolidated financial statements.
In response to the abovementioned risks, we have performed the following audit procedures:
- (1) Understand and test the internal control systems and procedures related to the cycle of sales transactions to identify and evaluate the effectiveness of the internal control procedures involved in making sales transactions.
- (2) Sample whether internal orders are approved by the responsible supervisor.
- (3) Sample whether external orders and transportation documents have been obtained for revenue recognition and whether the amount and the invoiced amount are consistent.
- (4) Sample whether the amount of collection after the period for relevant sales income transactions, remittance certificates, and counterparties is consistent with the amount of revenue recognition and counterparties.

Other matters

We have also audited the parent company only financial statements of Loop Telecommunication International, Inc. as of and for the years ended December 31, 2023 and 2022 on which we have issued an unmodified opinion.

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

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the IFRS, IAS, IFRIC, and SIC endorsed and issued into effect

by the Financial Supervisory Commission of the Republic of China, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

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

Those charged with governance, including members of the Audit Committee, are responsible for overseeing the Company’s financial reporting process.

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

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

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

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the management.
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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 Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements (including the disclosures) and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient and appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

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

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 determined those matters that were of most significance in the audit of the consolidated financial statements for the year ended December 31, 2023 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.

Deloitte & Touche Taiwan Accountant Huang Yu-Feng Accountant Tseng Jian-Ming Approval No. of the Securities and Futures Approval No. of the Financial Supervision Bureau Commission Tai-Cai-Zheng-Liu-Zi No.0920123784 Jin-Guan-Shen-Zheng-Zi No.1100356048

March 12, 2024

Notice to Readers

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

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

Loop Telecommunication International, Inc. and its subsidiaries

Consolidated Balance Sheet

December 31, 2023 and 2022

(In Thousands of New Taiwan Dollars)

Assets Current assets Cash and cash equivalents (Notes 4 and 6) Financial assets at fair value through profit or loss - current (Notes 4 and 7) Financial assets at amortized cost - current (Notes 4 and 8) Contract assets - current (Notes 4 and 21) Net accounts receivable (Notes 4, 5, 9, and 21) Other receivables (Notes 4 and 9) Inventories (Notes 4, 5, and 10) Other current assets (Note 16) Total current assets Non-current assets Financial assets at amortized cost - non-current (Notes 4, 8, and 28) Property, plant and equipment (Notes 4, 12, and 28) Right-of-use assets (Notes 4 and 13) Investment property (Notes 4, 14, and 28) Intangible assets (Notes 4 and 15) Deferred income tax assets (Notes 4 and 23) Refundable deposits (Note 28) Net defined benefit assets (Notes 4 and 19) Total non-current assets Total assets Financial liabilities and equity Current liabilities Short-term borrowings (Notes 4, 17, and 28) Contract liabilities - current (Notes 4 and 21) Accounts payable Other payables (Note 18) Income tax payable (Notes 4 and 23) Lease liabilities - current (Notes 4 and 13) Long-term liabilities - current portion (Notes 4, 17, and 28) Other current liabilities (Note 18) Total current liabilities Non-current liabilities Deferred income tax liabilities (Notes 4 and 23) Lease liabilities - non-current (Notes 4 and 13) Net defined benefit liabilities - non-current (Notes 4 and 19) Guarantee deposits Non-current liabilities (Note 18) Total non-current liabilities Total liabilities Equity (Note 20) Common stock Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Total retained earnings Other equity Total equity Total Liabilities and Equity		December31,2023 Amount `％` $ 269,074 21 10,541 1 103,169 8 233 - 230,989 18 1,419 - 374,974 29 7,953 1 998,352 78 12,056 1 153,385 12 45,576 4 30,719 2 4,560 - 6,439 - 32,911 3 1,427 - 287,073 22 $ 1,285,425 100 $ 192,000 15 4,561 - 35,455 3 82,768 6 48,424 4 2,256 - - - 9,758 1 375,222 29 945 - 50,329 4 - - 1,493 - 14,242 1 67,009 5 442,231 34 567,365 44 43,953 4 26,563 2 2,786 - 205,278 16 234,627 18 2,751) - 843,194 66 $ 1,285,425 100	December31,2023 Amount `％` $ 269,074 21 10,541 1 103,169 8 233 - 230,989 18 1,419 - 374,974 29 7,953 1 998,352 78 12,056 1 153,385 12 45,576 4 30,719 2 4,560 - 6,439 - 32,911 3 1,427 - 287,073 22 $ 1,285,425 100 $ 192,000 15 4,561 - 35,455 3 82,768 6 48,424 4 2,256 - - - 9,758 1 375,222 29 945 - 50,329 4 - - 1,493 - 14,242 1 67,009 5 442,231 34 567,365 44 43,953 4 26,563 2 2,786 - 205,278 16 234,627 18 2,751) - 843,194 66 $ 1,285,425 100		December31,2022 Amount `％` $ 361,283 34 33,546 3 15,773 1 32,776 3 41,771 4 1,150 - 312,977 29 2,934 - 802,210 74 12,026 1 146,206 14 42,591 4 31,858 3 8,638 1 5,713 - 30,212 3 - - 277,244 26 $ 1,079,454 100 $ - - 3,002 - 29,638 3 59,150 5 9,235 1 1,159 - 1,936 - 30,462 3 134,582 12 3,455 - 48,109 5 16,731 2 1,190 - 23,304 2 92,789 9 227,371 21 709,206 66 48,208 4 19,174 2 3,088 - 75,193 7 97,455 9 2,786) - 852,083 79 $ 1,079,454 100	December31,2022 Amount `％` $ 361,283 34 33,546 3 15,773 1 32,776 3 41,771 4 1,150 - 312,977 29 2,934 - 802,210 74 12,026 1 146,206 14 42,591 4 31,858 3 8,638 1 5,713 - 30,212 3 - - 277,244 26 $ 1,079,454 100 $ - - 3,002 - 29,638 3 59,150 5 9,235 1 1,159 - 1,936 - 30,462 3 134,582 12 3,455 - 48,109 5 16,731 2 1,190 - 23,304 2 92,789 9 227,371 21 709,206 66 48,208 4 19,174 2 3,088 - 75,193 7 97,455 9 2,786) - 852,083 79 $ 1,079,454 100
		Amount $ 269,074 10,541 103,169 233 230,989 1,419 374,974 7,953 998,352 12,056 153,385 45,576 30,719 4,560 6,439 32,911 1,427 287,073 $ 1,285,425 $ 192,000 4,561 35,455 82,768 48,424 2,256 - 9,758 375,222 945 50,329 - 1,493 14,242 67,009 442,231 567,365 43,953 26,563 2,786 205,278 234,627 2,751) 843,194 $ 1,285,425			Amount $ 361,283 33,546 15,773 32,776 41,771 1,150 312,977 2,934 802,210 12,026 146,206 42,591 31,858 8,638 5,713 30,212 - 277,244 $ 1,079,454 $ - 3,002 29,638 59,150 9,235 1,159 1,936 30,462 134,582 3,455 48,109 16,731 1,190 23,304 92,789 227,371 709,206 48,208 19,174 3,088 75,193 97,455 2,786) 852,083 $ 1,079,454
	(			(

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

Loop Telecommunication International, Inc. and its subsidiaries

Consolidated Statement of Comprehensive Income

For the years ended December 31, 2023 and 2022

(In Thousands of New Taiwan Dollars, Except Earnings Per Share)

Net revenue (Notes 4 and 21) Cost of revenue (Notes 4, 10, and 22) Gross profit Operating expenses (Note 22) Sales and marketing expenses General and administrative expenses Research and development expenses Subtotal Income from operations Non-revenue and expenses (Note 22) Interest income Other income Other gains and losses Finance costs Total non- operating income and expenses Income before income tax Income tax expenses (Notes 4 and 23) Net income (Cont’d)		2023		`％` 100 31 69 8 7 24 39 30 2 6 - - 8 38 7 31		2022
		Amount $ 649,097 203,043 446,054 52,732 47,828 152,224 252,784 193,270 15,525 36,495 3,297 1,822) 53,495 246,765 47,106 199,659				Amount $ 438,242 197,678 240,564 44,881 46,459 134,715 226,055 14,509 4,029 36,119 29,994 1,248) 68,894 83,403 16,000 67,403		`％`
	(				(			100 45 55 10 11 31 52 3 1 8 7 - 16 19 4 15

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(Cont’d)

Other comprehensive income (Notes 4, 19, and 20) Items that will not be reclassified subsequently to profit or loss: Remeasurements of defined benefit obligation Items that may be reclassified subsequently to profit or loss Exchange differences arising on translation of foreign operations Other comprehensive income, net of income tax Total comprehensive income Earnings per share (Note 24) Basic Diluted		2023		`％` - - - 31		2022
		Amount $ 4,178 35 4,213 $ 203,872 $ 3.00 $ 2.97				Amount $ 6,487 302 6,789 $ 74,192 $ 0.95 $ 0.94		`％`
								2 - 2 17

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

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Loop Telecommunication International, Inc. and its subsidiaries

Consolidated Statement of Changes in Equity

For the years ended December 31, 2023 and 2022

(In Thousands of New Taiwan Dollars; unless specified otherwise)

Balance on January 1, 2022 Earnings distribution and appropriation in 2021 Legal reserve Special reserve Cash dividends of shareholders Netincomein 2022 Other comprehensive income, net of income tax in 2022 Total comprehensive income in 2022 Balance of December 31, 2022 Capital reduction Earnings distribution and appropriation in 2022 Legal reserve Special reserve Cash dividends of shareholders Cash distribution from the capital reserve Netincomein 2023 Other comprehensive income, net of income tax in 2023 Total comprehensive income in 2023 Balance of December 31, 2023	Capital stock Shares (1,000 shares) Amount 70,921 709,206 - - - - - - - - - - - - 70,921 709,206 ( 14,184 ) ( 141,841 ) - - - - - - - - - - - - - - 56,737 $ 567,365	Capital stock Shares (1,000 shares) Amount 70,921 709,206 - - - - - - - - - - - - 70,921 709,206 ( 14,184 ) ( 141,841 ) - - - - - - - - - - - - - - 56,737 $ 567,365	Capital surplus 48,208 - - - - - - 48,208 - - - - ( 4,255 ) - - - $ 43,953		Retained earnings	Unappropriated earnings 32,920 ( 3,166 ) ( 83 ) ( 28,368 ) 67,403 6,487 73,890 75,193 - ( 7,389 ) 302 ( 66,665 ) - 199,659 4,178 203,837 $ 205,278	Other Equity Exchange differences arising on translation of foreign operations ( 3,088 ) - - - - 302 302 ( 2,786 ) - - - - - - 35 35 ($ 2,751)	Total equity
	Shares (1,000 shares) 70,921 - - - - - - 70,921 ( 14,184 ) - - - - - - - 56,737			Legal reserve 16,008 3,166 - - - - - 19,174 - 7,389 - - - - - - $ 26,563	Special reserve 3,005 - 83 - - - - 3,088 - - ( 302 ) - - - - - $ 2,786
								806,259 - - ( 28,368 ) 67,403 6,789 74,192 852,083 ( 141,841 ) - - ( 66,665 ) ( 4,255 ) 199,659 4,213 203,872 $ 843,194

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

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Loop Telecommunication International, Inc. and its subsidiaries

Consolidated Statement of Cash Flows

For the years ended December 31, 2023 and 2022

(In Thousands of New Taiwan Dollars)

Cash flows from operating activities Income before income tax Item of profit or loss: Depreciation expense Amortization expense Losses (gains) on financial assets and liabilities at fair value through profit or loss Finance costs Interest income Dividend income Losses of inventory write-down or obsolescence Net losses (gains) on foreign exchange Changes in operating assets and liabilities Contract assets Accounts receivables Other receivables Inventories Other current assets Contract liabilities Accounts payable Other payables Other current liabilities Net defined benefit assets and liability Other non-current liabilities Cash from operations Interest paid Income tax paid Net cash generated by operating activities	2023 $ 246,765 15,869 4,510 ( 990 ) 1,822 ( 15,525 ) ( 46 ) 4,051 12,714 32,543 ( 191,141 ) ( 25 ) ( 66,048 ) ( 5,019 ) 1,559 6,220 23,379 ( 20,791 ) ( 13,980 ) ( 9,062) 26,805 ( 1,575 ) ( 11,153) 14,077	2022
		$ 83,403 15,419 3,658 508 1,248 ( 4,029 ) ( 43 ) 3,876 ( 25,165 ) 116,099 88,855 869 ( 20,951 ) 8,376 1,890 ( 15,098 ) 12,063 29,237 ( 4,930 ) 23,304 318,589 ( 1,248 ) ( 9,367) 307,974

(Cont’d)

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(Cont’d)

Cash flows from investing activities Acquisition of financial assets at amortized cost Disposal of financial assets at amortized cost Acquisition of financial assets at fair value through profit or loss Disposal of financial assets at fair value through profit or loss Acquisition of property, plant and equipment Refundable deposits paid Acquisition of intangible assets Interest received Dividends received Net cash used in investing activities Cash flows from financing activities Increasing in short-term debt Repayment of long-term debt Guarantee deposits received (refunded) Repayment for the principal of lease liabilities Cash dividends paid Capital reduction Net cash used in financing activities Effect of exchange rate changes on cash and cash equivalents Net (decrease) increase in cash and cash equivalents during the year Cash and cash equivalents, beginning of year Cash and cash equivalents, end of year	2023 ( $ 1,023,345 ) 935,919 - 23,995 ( 19,376 ) ( 2,699 ) ( 432 ) 15,281 46 ( 70,611) 192,000 ( 1,936 ) 303 ( 2,197 ) ( 70,920 ) ( 141,841) ( 24,591) ( 11,084) ( 92,209 ) 361,283 $ 269,074	2022
		( $ 335,426 ) 333,765 ( 33,733 ) - ( 2,267 ) ( 16,167 ) ( 6,797 ) 3,180 43 ( 57,402) - ( 2,289 ) ( 83 ) ( 2,308 ) ( 28,368 ) - ( 33,048) 24,136 241,660 119,623 $ 361,283

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

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Loop Telecommunication International, Inc. and its subsidiaries

Notes to Consolidated Financial Statements

For the years ended December 31, 2023 and 2022

(In Thousands of New Taiwan Dollars; unless specified otherwise)

I. Company History

Loop Telecommunication International, Inc. (the “Company”) was established in Hsinchu Science Park in December 1991 and commenced its operation in December of the same year. The Company primarily engages in the R&D, development, production, manufacturing, and sales of user remote line disconnectors, protectors and their components, line reactors and their components, subtitle phones and their components, and smart network resource management multiplexers.

Shares of the Company were listed on Taipei Stock Exchange for trading in February 2001 and transferred to Taiwan Stock Exchange for listing and trading in August 2002.

The consolidated financial statements are presented in New Taiwan Dollars (NTD), which is the Company’s functional currency.

The Company and its subsidiaries are referred to as the Company, collectively, below.

II. Approval date and procedures of the financial statements

The accompanying consolidated financial statements were approved by the Board on March 12, 2024.

III. New standards, amendments and interpretations adopted:

(I) Initial application of the amendments to the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations IFRIC(IFRIC), and SIC Interpretations (SIC) (collectively “IFRSs”) endorsed and issued into effect by the Financial Supervisory Commission (FSC).

The initial application of the amendments to the IFRSs endorsed and issued into

effect by the FSC did not cause significant change to the Company’s accounting policies.

(II) IFRSs endorsed by the FSC that are applicable in 2024

New, revised or amended Effective date issued standards and interpretations by IASB(Note 1)

Amendments to IFRS 16 “Leases Liability in a Sale January 1, 2024 (Note 2) and Leaseback”

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New, revised or amended Effective date issued standards and interpretations by IASB(Note 1) Amendments to IAS 1 “Classification of Liabilities as January 1, 2024 Current or Non-current” Amendments to IAS 1 “Non-current Liabilities with January 1, 2024 Covenants” Amendments to IAS 7 and IFRS 7 “Supplier Finance January 1, 2024 (Note 3) Arrangements”

Note 1: Unless stated otherwise, the above IFRSs are effective for annual reporting periods beginning on or after their respective effective dates.
Note 2: A seller-lessee shall apply the Amendments to IFRS 16 retrospectively to sale and leaseback transactions entered into after the date of initial application of IFRS 16.
Note 3: The amendments provide some transition relief regarding disclosure requirements.

As of the date the consolidated financial statements were authorized for issue, the Group evaluates that the amendments to the above standards or interpretation are not expected to cause significant effects.

(II) The IFRSs in issue but not yet endorsed and issued into effect by the FSC

New, revised or amended standards and interpretations 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” Amendment to IFRS 17 Amendments to IFRS 17 “Initial Application of IFRS 9 and IFRS 17 -Comparative Information” Amendments to IAS 21 “Lack of Exchangeability”	Effective date issued byIASB(Note 1)
	To be determined January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2025 (Note 2)

Note 1: Unless stated otherwise, the above IFRSs are effective for annual reporting

periods beginning on or after their respective effective dates.

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

As of the date the consolidated financial statements were authorized for issue, the Group is continuously assessing the possible impact that the application of the other standards and interpretations will have on the Group’s financial position and financial performance and will disclose the relevant impact when the assessment is completed.

IV. Summary of significant accounting policies

(I) Statement of compliance

The consolidated statements were prepared according to the Regulations Governing the Preparation of Financial Reports by Securities Issuers and IFRSs endorsed and issued into effect by the FSC.

(II) Basis of preparation

Except for financial instruments at fair value and net defined benefit liabilities recognized based on the present value of defined benefit obligations less the fair value of plan assets, the consolidated financial statements are prepared based on historical costs.

The measurement of fair value is divided into levels 1 to 3 based on the observable level and significance of relevant inputs:

Level 1 input: Refer to quotations (unadjusted) of equivalent assets or liabilities available in the active market on the measurement date.
Level 2 input: Refer to direct (i.e., prices) or indirect (i.e., inferred from prices) observable inputs of assets or liabilities other than level 1 quotations
Level 3 input: Refer to unobservable inputs of assets or liabilities.
(III) Classification of current and non-current assets and liabilities
Current assets include:
Assets held primarily for the purpose of trading;
Assets expected to be realized within 12 months after the balance sheet date; and
Cash and cash equivalents (excluding those restricted for being used for exchange or settling liabilities over 12 months after the balance sheet date).

Current liabilities include:

Liabilities held primarily for the purpose of trading;
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Liabilities expected to be settled within 12 months after the reporting period (they shall be current liabilities even if a long-term refinancing or re-arranged payment agreement is entered into after the balance sheet date and before the approval of the publication of the financial statements); and
Liabilities with a settlement deadline that cannot be unconditionally deferred to at least 12 months after the reporting period. However, terms of a liability that could, at the option of the counterparty, result in its settlement by issuing equity instruments do not affect its classification.

Liabilities that are not current assets or current liabilities described above are non-current assets and non-current liabilities.

(IV) Basis of consolidation

The consolidated financial statements comprise the Company and entities controlled by the Company (i.e., subsidiaries). The Company prepares consolidated financial statements using uniform accounting policies for like transactions and other events in similar circumstances. When preparing the consolidated financial statements, transactions, accounting balances, gains and losses between all entities are eliminated in full.

For details of subsidiaries, shareholding, and scope of business, please refer to Note 11 and Table 2 and Table 3.

(V) Foreign currency

When each entity is preparing its financial statements, transactions in currencies other than the functional currency of the entity (foreign currencies) are translated into functional currencies at the exchange rate on the transaction date for records.

Monetary items in foreign currencies are translated at the closing exchange rate on each balance sheet date. Exchange differences arising from the delivery of monetary items or the translation of monetary items are recognized in profit or loss in the year of occurrence.

Non-monetary items in foreign currencies at fair value are translated at the exchange rate on the date determining the fair value, and the exchange difference arising thereof is presented as profit or loss of the period; however, for changes in fair value recognized in other comprehensive income, exchange difference arising thereof shall be recognized in other comprehensive income.

Non-monetary items in foreign currencies at historical costs shall be translated at the exchange rate on the transaction date without re-translation.

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When preparing the consolidated financial statements, assets and liabilities of the Company and its foreign operations (including subsidiaries in different countries or using currencies different from the Group) are translated into NTD at the exchange rate on each balance sheet date. Items of income and expenses are translated at the average exchange rate of the period, and the exchange difference arising thereof is recognized in other comprehensive income.

(VI) Inventory

Inventory includes raw materials, work-in-progress, and finished goods. Inventories are stated at the lower of cost or net realizable value. Except for inventories of the same category, the comparison of the lower of cost and net realizable value is made on an item-by-item basis. The net realizable value represents the estimated selling price in the ordinary course of business, less all estimated costs of completion and necessary selling expenses. The weighted average method is adopted for the calculation of the costs of inventory.

(VII) Property, plant and equipment

Property, plant and equipment are recognized at costs, and subsequently measured at the amount of costs less cumulative depreciation and cumulative impairment losses.

The Company separately provides depreciation for each material component of property, plant and equipment within the useful life on a straight-line basis. The Company shall examine the estimated useful life, residual value, and depreciation method at least at the end of each year and postpone the effects of changes in applicable accounting estimation.

For the derecognition of property, plant and equipment, the difference between the net disposal considerations and the carrying amount of such assets is recognized in profit or loss.

(VIII) Investment properties

Investment properties refer to properties held for earning rental or capital appreciation or both (including right-of-use assets that fulfill the definition of investment properties).

Self-owned investment properties are initially measured at costs (including transaction costs), and subsequently measured at the amount of costs less cumulative depreciation and cumulative impairment losses.

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Investment properties obtained via leases are initially measured at costs (including the initial measurement of lease liabilities), and subsequently measured at the amount of costs less cumulative depreciation and cumulative impairment losses, with adjustments made to the remeasurement of lease liabilities.

Depreciation is provided for all investment properties on a straight-line basis. For properties under property, plant and equipment, their carrying amounts are transferred to investment properties upon the end of the self-use period.

For the derecognition of investment properties, the difference between the net disposal considerations and the carrying amount of such assets is recognized in profit or loss.

(IX) Intangible assets
Individually acquired

Intangible assets with definite useful life that are individually acquired are initially measured at costs, and subsequently measured at the amount of costs less cumulative amortization and cumulative impairment losses. Intangible assets are amortized on a straight-line basis within their useful like. The Company shall examine the estimated useful life, residual value, and amortization method at least at the end of each year and postpone the effects of changes in applicable accounting estimation. Intangible assets with indefinite useful life are presented at costs less cumulative impairment losses.

Derecognition

For the derecognition of intangible assets, the difference between the net disposal considerations and the carrying amount of such assets is recognized in profit or loss of the period.

(X) Impairment of property, plant and equipment, right-of-use assets, and intangible assets

The Company evaluates whether there is any indication of impairment of property, plant and equipment, right-of-use assets, and intangible assets on each balance sheet date. If any such indication of impairment exists, then the asset's recoverable amount is estimated. If the recoverable amount of the individual asset cannot be estimated, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

The recoverable amount is the higher of fair value less disposal costs and its value in use. If the recoverable amount of individual assets or cash-generating units is lower than their carrying amounts, the carrying amount of such assets or

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cash-generating units shall be reduced to the recoverable amount, and the impairment losses shall be recognized in profit or loss.

If impairment losses are subsequently reversed, the carrying amount of such assets or cash-generating units shall be increased to the recoverable amount after amendments; however, the increased carrying amount shall not exceed the carrying amount determined of the carrying amount of such assets or cash-generating units if there were no impairment losses recognized in prior years (less amortization or depreciation). The reversal of impairment losses is recognized in profit or loss.

(XI) Financial instruments

Financial assets and financial liabilities are recognized in the consolidated balance sheet when the Company becomes a party to the contract terms of such instruments.

For the initial recognition of financial assets and financial liabilities, if financial assets or financial liabilities are not measured at fair value through profit or loss, they shall be measured at the carrying amount plus the transaction costs directly attributable to the acquisition or issuance of financial assets or financial liabilities. Transaction costs directly attributable to the acquisition or issuance of financial assets or financial liabilities at fair value through profit or loss are immediately recognized as profit or loss.

Financial assets

Regular transactions of financial assets are recognized and derecognized by adopting trade date accounting.

(1) Measurement category

On initial recognition, financial assets are classified as financial assets at amortized cost and financial assets at fair value through profit or loss.

A. Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss include financial assets designated as measuring at value through profit or loss.

Financial assets at fair value through profit or loss are measured at fair value, and their dividends and remeasurement gains or losses are recognized in other income and other gains and losses,

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respectively. For the determination method of fair value, please refer to Note 26.

B. Financial assets measured at amortized cost

If the financial assets of the Company concurrently fulfill both of the following conditions, they are recognized as financial assets at amortized costs:

a. Held under a certain operating model, and the purpose of the model if to hold financial assets to collect contract cash flows; and
b. Contract terms generate cash flows on particulate dates, and such cash flows are fully used to pay the principal and interests of the outstanding principal.

Financial assets at amortized costs (including cash and cash equivalents, accounts receivable and other receivables at amortized costs) are measured at a total carrying amount determined by using the effective interest method less amortized costs of any impairment losses after the initial recognition; any gains or losses on exchange gains are recognized in profit or loss.

Cash equivalents include short-term and high-liquidity time deposits within 3 months that can be converted to a fixed amount of cash at any time with minor risk of changes in value, and are used to satisfy short-term cash commitments instead of investments or other purposes.

(2) Impairment of financial assets and contract assets

The Company evaluates the impairment losses of financial assets at amortized costs (including accounts receivable) and contract assets based on ECL on each balance sheet date.

Loss allowance of accounts receivables and contract assets are recognized based on the lifetime ECL. For other financial assets, the Company evaluates whether credit risks have significantly increased after the initial recognition. If there is no significant increase, the Company recognizes loss allowance based on the 12-month ECL; if there is a significant increase, the Company recognizes loss allowance based on the lifetime ECL.

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ECL is average credit loss using default risks as its weight. 12-month ECL refers to ECL that may arise from possible defaults of financial instruments within 12 months after the reporting date; lifetime ECL refers to ECL that may arise from all defaults of financial instruments during the lifetime.

The Company reduces the carrying amount via the allowance account for the impairment losses of all financial assets.

(3) Derecognition of financial assets

The Company derecognizes financial assets when the contractual rights to the cash flows from the financial asset become invalid, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred.

For the derecognition of financial assets at amortized cost, the difference between the carrying amount and the considerations received is recognized in profit or loss.

Equity instruments

Debt and equity instruments issued by the Company are classified as financial liabilities or equity in accordance with the substance of the contractual agreements and the definitions of a financial liability and an equity instrument.

Equity instruments issued are recognized as the amount of consideration received, less the direct cost of issuing.

The retrieval of the Company’s own equity instruments is recognized and deducted under equity. Acquisition, disposals, issuance, or cancellation of the Company’s own equity instruments is not recognized in profit or loss.

Financial liabilities
(1) Subsequent measurement

All financial liabilities are measured at amortized costs by adopting the effective interest method.

(2) Derecognition of financial liabilities

For the derecognition of financial liabilities, the difference between the carrying amount and the considerations paid (including any non-cash assets transferred or liabilities assumed) is recognized as profit or loss.

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(XII) Revenue recognition

After the Company has identified the performance obligations in a contract with a customer, it allocates the transaction price to each performance obligation and recognizes income when fulfilling each performance obligation.

Sales revenue of products

Sales revenue of products is primarily from the sales of optical transport network access equipment, U interface and MDSL interface multiplexer, network management systems, Internet access equipment, time-slot interchanger, and other products. From the shipping of products sold, customers are entitled to pricing and use, hold the primary responsibilities for reselling, and assume the risks of product obsolescence. The Company recognizes income and contract assets at the point of time and transfers them to accounts receivable after the performance of the remaining obligations. Prepayments for the sales of products are recognized as contract liabilities before the products arrive.

Service revenue
Service revenue arises from educational training services and
software/hardware installation services.

With educational training services and software/hardware installation services provided by the Company, customers also obtain and consume performance benefits. The Company recognizes relevant income based on the service provided by technicians over time during the contract period. It is agreed in contracts that customers shall make payments after the installation and acceptance; therefore, the Company recognizes contract assets when providing services and transfers them to accounts receivable upon the completion of installation and acceptance.

(XIII) Lease

The Company evaluates whether a contract is (or includes) a lease on the establishment date of the contract.

The Company as the lessor

All leases are classified as operating leases.

Under operating leases, lease payments are recognized as gains during the relevant leasing period on a straight-line basis.

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Variable rentals not subject to the index or rate used in the lease agreement are recognized as gains during the period.

When a lease contains elements of land and building, the Company evaluates the classification of elements into financing lease or operating lease depending on whether the majority of all risks and compensation of the ownership of each element is transferred to the lessee. Lease payments are allocated to land and buildings based on the corresponding ratio of the fair value of leasing rights of land and buildings on the establishment date of the contract. If lease payments may be reliably allocated to such two elements, each element is treated based on the applicable lease classification. If lease payments may not be reliably allocated to such two elements, the overall lease is classified as a financing lease; however, if such two elements are evidently in line with the standards of operating leases, the overall lease is classified as an operating lease.

The Company as the lessee

Except for lease payments of low-value target asset leases and short-term leases with recognition exemption applicable recognizing as expenses within the leasing period on a straight-line basis, right-of-use assets and lease liabilities are recognized for other leases on the commencement date of leases.

Right-of-use assets obtained via leases are initially measured at costs (including the initial measurement of lease liabilities), and subsequently measured at the amount of costs less cumulative depreciation and cumulative impairment losses, with adjustments made to the remeasurement of lease liabilities. Apart from those complying with the definition of investment properties, right-of-use assets are separately presented in the consolidated balance sheet. For the recognition and measurement of right-of-use assets fulfilling the definition of investment properties, please refer to the accounting policies of investment properties in (VIII).

Depreciation is provided for investment properties one a straight-line basis from the commencement date of the lease to the earlier of the expiry of the useful life or the expiry of the leasing period.

Lease liabilities are initially measured at the current value of lease payments (including fixed payments). If the implied interest rate of leases may be easily confirmed, lease payments are discounted by using the interest rate. If

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the interest rate may not be easily confirmed, the incremental borrowing interest rate of lessees is used.

Subsequently, lease liabilities are measured at amortized costs, and the interest expenses are allocated during the leasing period. If there is any change in lease payment in the future resulting from the index or rate used to determine the lease payment during the leasing period, the Company remeasures lease liabilities and makes adjustments to right-of-use assets accordingly; however, if the carrying amount of the right-of-use assets is reduced to nil, the remaining remeasurement amount shall be recognized in profit or loss. Lease liabilities are separately presented in the consolidated balance sheet.

(XIV) Borrowing costs

All borrowing costs are recognized as profit or loss during the period of occurrence.

(XV) Employees benefits
Short-term employee benefits

Liabilities related to short-term employee benefits are measured at the non-discounted amount expected to be paid in exchange for employees’ services.

Post-employment benefits

Pension of the defined contribution plan is recognized as expenses based on the amount of pension to be contributed during the period in which employees provide their services.

The projected unit credit method is adopted for the actuarial valuation of defined benefit costs of the defined benefit plan (including service costs, net profit, and remeasurement). Current period service costs and net interest of net defined liabilities (assets) are recognized as employee benefit expenses upon occurrence. Remeasurements (including actuarial gains or losses and plan asset compensation after interest) are recognized in other comprehensive income and presented as other equity upon the occurrence and will not be reclassified to profit or loss subsequently.

Net defined benefit liabilities (assets) are the appropriation deficit (surplus) of the defined benefit plan. Net defined benefit assets shall not exceed the

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current value of the amount of appropriation refunded from the plan or the amount of appropriation that may be reduced in the future.

Severance benefits

The Company recognizes severance benefit liabilities when it can no longer cancel the offer of severance benefits or recognize relevant reorganization costs (the earlier).

(XVI) Income tax

Income tax expenses are the sum of income tax of the period and deferred income tax.

Income tax of the period

The additional income tax on undistributed earnings calculated based on the Income Tax Act of the Republic of China is recognized during the year of the shareholders’ resolution.

Adjustments to income taxes payable in prior years are recognized as income tax of the period.

Deferred income tax

Deferred income tax is calculated based on the temporary difference between the carrying amount of assets and liabilities accounted for and the taxation basis for calculating income tax.

Deferred income tax liabilities shall be recognized for all taxable temporary differences, and deferred income tax assets are recognized when it is likely to offset the deductible temporary differences and income tax credits arising from R&D and other expenses.

Temporary taxable differences related to subsidiaries it invested are recognized as deferred income tax liabilities, except when the Company is able to control the point of time to reverse the temporary differences, and such temporary differences are not likely to be reversed in the foreseeable future. Deductible temporary differences related to such investments are only recognized as deferred income tax assets when it is likely that there will be sufficient taxable income to realize the temporary differences and when it is expected to be within the reversal scope in the foreseeable future.

The carrying amount of deferred income tax assets is re-examined on each balance sheet date, and the carrying amount is adjusted for those having no possible, sufficient taxable income to recover the entire or partial assets. For

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those not recognized as deferred income tax assets initially, the Company also re-examines them on each balance sheet date and increases their carrying amounts when it is likely to have taxable income to recover the entire or partial assets in the future.

Deferred income tax assets and liabilities are measured at the tax rate of the period in which the liabilities or assets are expected to be settled or realized, respectively, and the tax rate is based on the tax rate and tax laws enacted or substantially enacted on the balance sheet date. The measurement of deferred income tax reflects the tax consequences of the method for recovering or settling the carrying amount of its assets and labilities by the Company after the balance sheet date.

Deferred income tax of the period

Deferred income tax of the period is recognized in profit or loss; however, deferred income tax related to items recognized in other comprehensive income or directly included in equity is recognized in other comprehensive income or directly included in equity, respectively.

V. Significant accounting judgments and key source of uncertainties for estimations and assumptions

When adopting accounting policies, the management shall make relevant judgments, estimations, and assumptions based on its historical experience and other relevant factors when it is difficult to obtain relevant information from other sources. Actual results may differ from these estimates.

Uncertainties for estimations and assumptions

(I) Estimated impairment of financial assets

The estimated impairment of accounts receivable is based on the assumption of the Company for default probability and default loss ratio. The Company considers its historical experience, current market status, and forward-looking information to form the assumptions and select the input value for impairment assessment. For the material assumptions and inputs adopted, please refer to Note 9. If the actual cash flow in the future is less than the Company’s expectations, there may be material impairment losses.

(II) Inventory impairment
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The net realizable value of inventories is estimated based on the balance of estimated selling price during the course of normal operations less the estimated costs required to be invested in until the completion and the costs required until the completion of sales; such estimates are evaluated based on the current market condition and the historical sales experience of similar products; any change in the market condition may materially affect the results of such estimates.

VI. Cash and cash equivalents

Cash and cash equivalents
Cash in hand and working capital Bank checks and demand deposits Cash equivalents (investments with an initial expiry within 3 months) Time deposits with banks	December 31,2023 $ 389 94,007 174,678 $ 269,074	December 31,2022
			$ 380 95,115 265,788 $ 361,283

The market interest range of deposits and time deposits with banks on the balance sheet date is as follows:

	sheet date is as follows:
VII.	December 31,2023 Bank deposits 0.001%~1.45% Time deposits 1.10%~5.21% Financial instruments at fair value through profit or loss December 31,2023 Financial assets-current Measured at fair value through profit or loss - Domestic listed stocks $ 211 - Beneficiary certificates 10,330 $ 10,541	December 31,2022
		0.001%~3.80% 0.92%~4.40% December 31,2022
	Financial assets-current Measured at fair value through profit or loss - Domestic listed stocks - Beneficiary certificates
			$ 3,375 30,171 $ 33,546

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VIII. Financial assets at amortized costs

Financial assets at amortized costs
Current Time deposits with an initial expiry exceeding 3 months Time deposits pledged Non-current Time deposits pledged	December 31,2023 $ 1,542 101,627 $ 103,169 $ 12,056	December 31,2022
			$ 15,773 - $ 15,773 $ 12,026

(I) The interest rate

range of time deposits with an initial expiry exceeding 3 months and time deposits pledged is as follows:

as follows:
Time deposits with an initial expiry over 3 months Time deposits pledged	December 31,2023 1.12% 0.55%~5.33%	December 31,2022
		3.77% 0.32%~1.44%

(II) For information on financial assets at amortized costs, please refer to Note 28.

IX. Accounts receivable and other receivables

Accounts receivables Financial assets measured at amortized cost Total carrying amount Less: loss allowance Other receivables Others	December 31,2023 $ 231,554 ( 565) $ 230,989 $ 1,419	December 31,2022	December 31,2022
	(	(	$ 49,264 7,493) $ 41,771 $ 1,150

The average credit period of product sales is settled by month or within 30 to 90 days from the issuance of the invoice; no interest is accrued for accounts receivable. The Company adopts the policy to engage in transactions with counterparties with equivalent ratings. For the credit rating information, the Company rated major customers based on publicly available financial information and historical transaction records and allocated the total transaction amount to different customers with qualified

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credit ratings. In addition, it regularly reviews and approves the credit limits of counterparties to manage its credit exposure.

The Company recognizes loss allowance of accounts receivable based on lifetime expected credit loss. Lifetime expected credit loss is calculated by using the provision matrix, which considers the past default records and current financial positions of customers, industrial and economic status, and considers GDP and the unemployment rate. Based on the Company’s past experience of credit losses, there is no material difference between the loss patterns of different customer bases; therefore, customer bases are not further distinguished for the provision matrix, and the expected credit loss rate is determined based on the number of overdue days of accounts receivable.

Loss allowance of accounts receivable measured based on the provision matrix is as follows:

December 31, 2023

Total carrying amount Loss allowance (lifetime ECL) Amortized costs	Not overdue $ 231,270 ( 281) $ 230,989	Overdue for 1 to 60 days $ - - $ -	Overdue for 61 to 120 days $ - - $ -	Overdue for 121 to 364 days $ 9 ( 9) $ -		Overdue more than 365 days $ 275 275) $ -		Total
	(			(	(		(	$ 231,554 565) $ 230,989

December 31, 2022

Total carrying amount Loss allowance (lifetime ECL) Amortized costs	Not overdue $ 40,169 - $ 40,169	Overdue for 1 to 60 days $ 407 - $ 407	Overdue for 61 to 120 days $ 647 - $ 647	Overdue for 121 to 364 days $ 168 - $ 168		Overdue more than 365 days $ 7,873 7,493) $ 380		Total
					(		(	$ 49,264 7,493) $ 41,771

Changes in loss allowance of accounts receivable are as follows:

Beginning balance Amounts written off Differences in currency exchange Ending balance	2023 $ 7,493 ( 6,951 ) 23 $ 565		2022
			$ 7,395 - 98 $ 7,493

X. Inventories

Inventories
Finished goods Work in progress Raw material	December 31,2023 $ 72,723 43,465 258,786 $ 374,974	December 31,2022 $ 82,346 39,077 191,554 $ 312,977
			$ 82,346 39,077 191,554 $ 312,977

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The nature of costs of sales is as follows:

Costs of goods sold Losses for market price decline and obsolete and slow-moving inventories		2023 $ 197,026 4,051 $ 201,077		2022
				$ 192,828 3,876 $ 196,704

XI. Subsidiary

Subsidiaries included in the consolidated financial statements

The consolidated financial statements entities include:

Name of the investors The Company Tech-Plan`（`BVI`）`Ltd. Loop Telecommunication International Ltd. Maxi View Holdings Ltd.	Name of subsidiaries Tech-Plan`（`BVI`）`Ltd. Loop Telecom NA, Inc. Maxi View Holdings Ltd. Loop Telecommunication International Ltd. Chongqing Loop Technology Co., Ltd. Tianjin Loop Electron Technology Co., Ltd. Tianjin Loop Technology Co.,Ltd	Main Business Activity Investment business Development and trading of digital communication equipment and software Investment business Investment business R&D, design, production, processing, and trading of digital communication equipment Development and trading of digital communication equipment and software Development and trading of digital communication equipment and software	Shareholding	Shareholding
			December 31,2023 100% 100% 100% 100% 100% 100% 100%	December 31,2022
				100% 100% 100% 100% 100% 100% 100%

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XII. Property, plant and equipment

Costs Balance on January 1, 2023 Addition Disposal Net exchange differences Balance on December 31, 2023 Cumulative depreciation Balance on January 1, 2023 Depreciation Disposal Net exchange differences Balance on December 31, 2023 Net amount on December 31, 2023 Costs Balance on January 1, 2022 Addition Disposal Net exchange differences Balance on December 31, 2022 Cumulative depreciation Balance on January 1, 2022 Depreciation Disposal Net exchange differences Balance on December 31, 2022 Net amount on December 31, 2022		Buildings $ 226,725 - - 227) $ 226,498 $ 89,560 5,437 - 176) $ 94,821 $ 131,677 $ 226,535 - - 190 $ 226,725 $ 83,721 5,705 - 134 $ 89,560 $ 137,165	Machinery and equipment $ 6,931 5,231 ( 1,640 ) ( 31) $ 10,491 $ 4,081 1,629 ( 1,640 ) ( 23) $ 4,047 $ 6,444 $ 5,972 1,672 ( 740 ) 27 $ 6,931 $ 3,642 1,159 ( 740 ) 20 $ 4,081 $ 2,850	R&D equipment $ 13,802 11,091 ( 6,109 ) - $ 18,784 $ 10,170 3,409 ( 6,109 ) - $ 7,470 $ 11,314 $ 17,005 58 ( 3,261 ) - $ 13,802 $ 10,242 3,189 ( 3,261 ) - $ 10,170 $ 3,632	Transportation equipment $ 630 820 - ( 1) $ 1,449 $ 413 124 - ( 3) $ 534 $ 915 $ 629 - - 1 $ 630 $ 320 91 - 2 $ 413 $ 217	Office equipment $ 8,061 1,366 ( 2,462 ) ( 51) $ 6,914 $ 6,151 1,187 ( 2,462 ) ( 49) $ 4,827 $ 2,087 $ 8,708 355 ( 1,042 ) 40 $ 8,061 $ 5,907 1,251 ( 1,042 ) 35 $ 6,151 $ 1,910	Other equipment $ 1,285 965 ( 427 ) - $ 1,823 $ 853 449 ( 427 ) - $ 875 $ 948 $ 2,660 - ( 1,375 ) - $ 1,285 $ 1,895 333 ( 1,375 ) - $ 853 $ 432	Total
	( (				( (			$ 257,434 19,473 ( 10,638 ) ( 310) $ 265,959 $ 111,228 12,235 ( 10,638 ) ( 251) $ 112,574 $ 153,385 $ 261,509 2,085 ( 6,418 ) 258 $ 257,434 $ 105,727 11,728 ( 6,418 ) 191 $ 111,228 $ 146,206

As there was no indication of impairment in 2023 and 2022, the Company did not

perform any impairment assessment.

Depreciation expenses are provided for based on the following useful lives on a straight-line basis:

basis:
Buildings	11 to 51 years
Machinery and equipment	3 to 10 years
R&D equipment	4 years
Transportation equipment	4 to 6 years
Office equipment	3 to 10 years
Other equipment	4 to 5 years

The material components of the Company’s building are primarily plant and interior fitting, and the depreciation is provided based on their useful life of 35 to 51 years and 11 years, respectively.

For the amount of property, plant and equipment pledged for borrowings, please refer to Note 28.

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XIII. Lease agreement

(I) Right-of-use assets

Right-of-use assets
Carrying amount of right-of-use assets Land Buildings Addition of right-of-use assets Depreciation expenses of right-of-use assets Land Buildings Gains on the sublease of right-of-use assets (accounted for as other income)	December 31,2023 $ 41,163 4,413 $ 45,576 2023 $ 5,514 $ 1,394 1,101 $ 2,495 ($ 598)	December 31,2022
		(	$ 42,591 - $ 42,591 2022
	(		$ 1,217 $ 1,394 1,155 $ 2,549 $ 590)

Except for the additional and recognition of depreciation fees, right-of-use assets of the Company have no material sub-lease or impairment in 2023 and 2022.

(II) Lease liabilities

Lease liabilities
Carrying amount of lease liabilities Current Non-current	December 31,2023 $ 2,256 $ 50,329	December 31,2022
			$ 1,159 $ 48,109

The range of discount rate of lease liabilities is as follows:

Land Buildings	December 31,2023 2.30% 2.93%	December 31,2022
		2.30% -

(III) Material leasing activities and terms

The Company also rents certain land and buildings for use as plant, office, and dormitory, with a leasing period of 5 to 51 years. Lease payments may be adjusted for the land lease in Hsinchu Science Park based on the announced land price and other reasons at all times. Upon the end of the leasing period, the Company has no preemptive right for the acquisition of land and buildings it rented, and it is agreed

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that the Company may not sublease or transfer the entire or partial lease target without the consent of the lessor.

In 2019, the Company subleased partial right-of-use assets to Company A; relevant right-of-use assets are presented as investment properties; please refer to Note 14.

(IV) Other leases

Other leases
Expenses of short-term leases Total cash (outflow) of leases		2023 $ - $ 3,466)		2022
	(		(	$ 476 $ 3,943)

The Company chose the application of recognition exemption for employee dormitory and office leases that fulfill the conditions of short-term leases and do not recognize relevant right-of-use assets and lease liabilities for such leases.

XIV. Investment properties

Investment properties
Costs Balance on January 1, 2023 and December 31, 2023 Cumulative depreciation Balance on January 1, 2023 Depreciation Balance on December 31, 2023 Net amount on December 31, 2023 Costs Balance on January 1, 2022 Addition Balance on December 31, 2022 Cumulative depreciation Balance on January 1, 2022 Depreciation Balance on December 31, 2022 Net amount on December 31, 2022	Completed investment properties	Right-of-use assets $ 7,969 $ 1,011 240 $ 1,251 $ 6,718 $ 7,937 32 $ 7,969 $ 771 240 $ 1,011 $ 6,958	Total
	$ 39,159 $ 14,259 899 $ 15,158 $ 24,001 $ 39,159 - $ 39,159 $ 13,357 902 $ 14,259 $ 24,900		$ 47,128 $ 15,270 1,139 $ 16,409 $ 30,719 $ 47,096 32 $ 47,128 $ 14,128 1,142 $ 15,270 $ 31,858

During the leasing period, rental commitments commence after the balance sheet date are as follows:

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December 31, 2023 December 31, 2022 Rental commitment of investment properties $ 11,981 $ 17,550

The depreciation of investment properties is provided for based on the following useful lives on a straight-line basis:

Completed investment properties 35 to 51 years Right-of-use assets 20 years

The fair value of investment properties is measured at the level 3 input by the independent appraiser Integration Appraiser Firm which is not a related party. The appraisal is performed by adopting the weighted average of the cost approach and the market comparison approach, and unobservable material inputs adopted include the discount rate; the fair value derived from the assessment is as follows:

Fair value measurement	December 31,2023 $ 66,348	December 31,2022	December 31,2022
			$ 66,684

For the amount of investment properties pledged for borrowings, please refer to Note 28.

XV. Intangible assets

Intangible assets
Costs Balance on January 1, 2023 Individually acquired Disposal Net exchange differences Balance on December 31, 2023 Cumulative amortization Balance on January 1, 2023 Amortization expense Disposal Net exchange differences Balance on December 31, 2023 Net amount on December 31, 2023	Software
	$ 15,503 432 ( 2,828 ) ( 1) $ 13,106 $ 6,865 4,510 ( 2,828 ) ( 1) $ 8,546 $ 4,560

(Cont’d)

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(Cont’d)

Costs Balance on January 1, 2022 Individually acquired Disposal Net exchange differences Balance on December 31, 2022 Cumulative amortization Balance on January 1, 2022 Amortization expense Disposal Net exchange differences Balance on December 31, 2022 Net amount on December 31, 2022	Software
	$ 8,838 6,797 ( 133 ) 1 $ 15,503 $ 3,339 3,658 ( 133 ) 1 $ 6,865 $ 8,638

The Company provides for the amortization fees of intangible assets based on a straight-line basis over 3 years.

XVI. Other assets

Other assets
Current Temporary payments Prepayments for goods Other prepayments Overpaid sales tax Prepaid insurance premium	December 31,2023 $ 5,374 1,312 709 475 83 $ 7,953	December 31,2022
			$ 658 73 1,134 975 94 $ 2,934

XVII. Borrowings Short-term borrowings

Short-term borrowings
Secure borrowings (Note 28) Bank borrowings	December 31,2023 $ 192,000	December 31,2022
			$ -

The range of interest rates for bank loans were from 1.79% to 1.90% on December 31, 2023.

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- Long term borrowings

Long-term borrowings
Secure borrowings(Note 28) Bank borrowings Less: Presented as due within one year Long-term borrowings	December 31,2023 $ - ( - ) $ -	December 31,2022
	(	(	$ 1,936 1,936) $ -

Bank borrowings are secured by the building of the Company and shall be repaid in installments each month starting from October 2013, with settlement in October 2023. As of December 31, 2022, the effective annual interest rate was 2.08%.

XVIII. Other liabilities

Other liabilities
Current Other payables Remunerations of employees and Directors payable Bonuses payable Salaries payable Insurance premium payable Service fees payable Equipment payments payables Others Other current liabilities Advance (Note) Receipts under custody Others Other non-current liabilities Advance (Note)	December 31,2023 $ 33,650 11,738 10,413 2,461 2,792 182 21,532 $ 82,768 $ 9,063 646 49 $ 9,758 $ 14,242	December 31,2022
			$ 11,374 10,207 9,806 3,072 1,795 85 22,811 $ 59,150 $ 29,778 550 134 $ 30,462 $ 23,304

Note: The Company has entered into a trademark licensing contract of NT$82,860 thousand (US$3,000 thousand), and the amount was fully collected in cash in January 2022. The Company allocates and recognizes trademark licensing income on a straight-line basis; it recognized trademark licensing income of NT$29,778 thousand in both 2023 and 2022 (accounted for as other income).

XIX. Retirement benefit plan

(I) Defined contribution plans
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The pension system under the “Labor Pension Act” applicable to the Company is a defined contribution plan managed by the government, and the Company appropriates 6% of the monthly salaries of employees to the personal accounts with the Bureau of Labor Insurance.

(II) Defined benefit plans

The pension system, organized in accordance with the “Labor Standards Act” of R.O.C., is a defined benefit plan managed by the government. The payment of an employee’s retirement pension is calculated based on the service seniority and average wages during the six months before the approved retirement date. The Company appropriates 6% of the total monthly salaries of employees as the pension for the Supervisory Committee of Labor Retirement Reserve to deposit in the account with the Bank of Taiwan in the name of the Committee. At the end of the year, if it is estimated that the balance of the account is not sufficient to make the payments for laborers who are estimated to fulfill the retirement conditions in the following year, the Company will appropriate the difference in a lump sum by the end of March in the following year. The Bureau of Labor Funds, Ministry of Labor, is entrusted with the management of the account, and the Company has no right to affect the investment and management strategies.

The amount of the defined benefit plan included in the consolidated balance sheet is as follows:

sheet is as follows:
Defined benefit obligation Fair value of plan assets Net defined benefit liabilities	December 31,2023 $ 46,420 (47,847) ($ 1,427)	December 31,2022
	( (	(	$ 54,458 37,727) $ 16,731

39 -

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

							Net defined	Net defined
	Defined benefit			Fair value of		benefit liabilities
	obligation			plan assets				(assets)
January 1, 2022	$	63,268	(	$	35,120)		$	28,148
Service costs
Current period service
costs		87			-			87
Interest expenses
(income)		316	(		183)			133
Recognized in profit or
loss	$	403	($		183)		$	220
Remeasurement
Compensation of plan
assets (except for
amounts included in net
interest)		-	(		2,743 )	(		2,743 )
Actuarial losses -
experience adjustments	(	3,744)			-	(		3,744)
Recognized in other
comprehensive income	(	3,744)	(		2,743)	(		6,487)
Appropriated by the
employer		-	(		5,150)	(		5,150)
Benefit payments	(	5,469)			5,469			-
December 31, 2022		54,458	(		37,727)			16,731
Service costs
Interest expenses
(income)		681	(		505)			176
Recognized in profit or
loss		681	(		505)			176
Remeasurement
Compensation of plan
assets (except for
amounts included in
net interest)		-	(		476 )	(		476 )
Actuarial gains -
experience adjustments	(	3,702)			-	(		3,702)
Recognized in other
comprehensive income	(	3,702)	(		476)	(		4,178)
Appropriated by the
employer			(		14,156)	(		14,156)
Benefit payments	(	5,017)			5,017			-
December 31, 2023	$	46,420	(	$	47,847)	(	$	1,427)

40 -

The amount of the defined benefit plan recognized in profit or loss is summarized by

function as follows:

function as follows:
Operating cost Sales and marketing expenses General and administrative expenses Research and development expenses		2023 $ 45 20 20 91 $ 176		2022
				$ 57 23 27 113 $ 220

The Company is exposed to the following risks due to the pension system under the “Labor Standards Act”:

Investment risks: The Bureau of Labor Funds, Ministry of Labor, invests labor pension funds in domestic (foreign) equity securities, debt securities, bank deposits, and other targets by way of self-utilization or entrusted management; however, the amount available for allocation of the Company’s plan assets shall not be lower than the gains calculated at the interest rate for two-year time deposits with local banks.
Interest rate risks: A decrease in the government bonds interest rate will lead to an increase in the current value of the defined benefit obligations; however, debt investment returns of plan assets will also increase; both items have partial offsetting effects on net defined benefit liabilities.
Salary risks: The calculation of the current value of defined benefit obligations refers to the future salaries of the plan’s participants. Therefore, an increase in the salaries of the plan’s participants will result in an increase in the current value of defined benefit obligations.

The actuarial valuation for the current value of defined benefit obligations of the Company is performed by a qualified actuary; the material assumption adopted on the measurement date is as follows:

the measurement date is as follows:
Discount rate Expected increase rate of salaries	December 31,2023 1.25% 3.00%	December 31,2022
		1.25% 3.00%

If there are reasonable and possible changes in a material actuarial assumption and when all other assumptions remain unchanged, the increase (decrease) in the current value of defined benefit obligations is as follows:

41 -

Discount rate Increased by 0.25% Decreased by 0.25% Expected increase rate of salaries Increased by 1.00% Decreased by 1.00%	December 31,2023 ($ 800) $ 824 $ 3,425 ($ 3,114)	December 31,2022	December 31,2022
	( (	( (	$ 1,041) $ 1,073 $ 4,505 $ 4,070)

As actuarial assumptions may be correlated, the possibility of having changes in a single assumption is low; therefore, the abovementioned sensitivity analysis may not be able to reflect the actual changes in the current value of defined benefit obligations.

obligations.
Amount expected to be appropriated in one year Average maturity of defined benefit obligations	December 31,2023 $ 14,156 9.8 years	December 31,2022
		$ 5,150 10.7 years

XX. Equity

(I) Common stock

Common stock
Authorized shares ( in thousands) Authorized capital Number of issued and paid-in shares (in thousands) Issued share capital	December 31,2023 128,000 $ 1,280,000 56,737 $ 567,365	December 31,2022
			128,000 $ 1,280,000 70,921 $ 709,206

The par value of issued ordinary shares is NT$10 per share, and each share is entitled to one vote and the right to receive dividends.

On June 28, 2023, the shareholders' meeting approved the resolution to reduce its capital and return the capital contribution in cash in the amount of NT$141,841 thousand and reduce the paid-in capital in the amount of 14,184 thousand shares; the paid-in capital after the capital reduction was NT$567,365 thousand, and the capital reduction ratio is approximately 20%. The capital reduction was approved and declared effective on August 9, 2023 by the FSC, and the base date of capital reduction was September 8, 2023 resolved by the Board of Directors on August 10, 2023. The alteration registration had been made on September 19, 2023.

42 -

(II) Capital surplus

December 31, 2023 December 31, 2022

Available for loss compensation, cash distribution, or appropriation to share capital(Note) Premium of share issuance Premium of corporate bond conversion Treasury share transactions Only available for loss compensation Uncollected dividends of shareholders’ past due	$ 2,658 31,731 9,357 207 $ 43,953	$ 6,913 31,731 9,357 207 $ 48,208

Note: Such capital reserve may be used in loss compensation, and may be used in cash distribution or appropriation to share capital when the Company has no loss; however, appropriation to share capital is limited to a certain ratio of the paid-in ratio.

(III) Retained earnings and dividend policy

According to the requirements of earning distribution policy in the Articles of Incorporation, if the Company records earnings from the final account of the year, after paying taxes and compensating cumulative losses according to the law, the Company shall appropriate 10% as the statutory surplus reserve. For the remaining earnings, the Company shall appropriate or reverse special surplus reserve according to the requirements of laws and regulations. Shall there be remaining balances, the Company shall combine such balances with the cumulated undistributed earnings, and the Board shall prepare the proposal for earning distribution and submit it to the shareholders’ meeting for the resolution of distributing dividends and bonuses to shareholders. For the distribution policy of remuneration of employees and Directors stipulated in the Articles of Incorporation, please refer to Note 22 (7).

In addition, according to the requirements of the Articles of Incorporation, the Company responds to the current and future development plans and takes investment environments, capital requirements, and domestic and foreign competition status into account, with equal consideration given to shareholders’ benefits. The Board shall prepare the proposal for earning distribution, and the shareholders’ meeting shall

43 -

make the resolution. Distribution of shareholders' dividends/bonuses may be made in shares or cash; however, in principle, the ratio of cash dividends to the total distribution amount shall not be less than 10%.

The appropriation of the legal reserve shall be until its balance reaches the total paid-in capital of the Company. Legal reserve may be used in loss compensation. When the Company has no loss, the part of the legal reserve that exceeds the total paid-in capital for 25% may be distributed in cash.

The Company held its annual shareholders’ meetings on June 28, 2023 and June 29, 2022 and the proposals for earning distribution for 2022 and 2021 approved as resolutions are as follows:

resolutions are as follows:
Legal reserve Special reserve Cash dividends Cash dividends per share (NT$)		2022 $ 7,389 $ 302) $ 66,665 $ 0.94		2021
	(			$ 3,166 $ 83 $ 28,368 $ 0.40

In addition, on June 28, 2023, the Board of the Company intended to distribute cash of NT$4,255 thousand from its capital reserve, NT$0.06 per share.

On March 12,

, the proposal for the earning distribution of 2023 discussed by the Board is as follows:

follows:
Legal reserve Special reserve Cash dividends Cash dividends per share (NT$)		2023
	(	$ 20,384 $ 35) $ 181,557 $ 3.20

The proposal for the earning distribution and the proposal for the cash distribution from the capital reserve of 2023 are expected to be resolved at the annual shareholders’ meeting to be convened on June 25, 2024.

(IV) Special reserve

pecial reserve
Beginning balance (Reversal) Appropriation of special reserve Ending balance		2023 $ 3,088 302) $ 2,786		2022
	(			$ 3,005 83 $ 3,088

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(V) Other Components of Equity

Exchange differences on translation of foreign operations

Beginning balance Generated during the year Translation difference of foreign operations Ending balance	2023 ( $ 2,786 ) 35 ($ 2,751)	2022
		( $ 3,088 ) 302 ($ 2,786)

XXI. Net revenue

Net revenue
Revenue from contracts with customers Income from product sales Service revenue		2023 $ 601,439 47,658 $ 649,097		2022
				$ 402,957 35,285 $ 438,242

(I) Description of contracts with customers
Sales revenue of products

Refer to the sales of optical transport network access equipment, U interface and MDSL interface multiplexer, network management systems, Internet access equipment, time-slot interchanger, and other products.

Service revenue

Partial contracts entered into with customers include educational training services and software/hardware installation services.

(II) Contract balance

Contract balance
Accounts receivable (Note 9) Contract assets - current Sales of products Contract liabilities - current Sales of products	December 31, 2023 $ 230,989 $ 233 $ 4,561	December 31, 2022 $ 41,771 $ 32,776 $ 3,002	January1,2022
				$ 130,098 $ 148,875 $ 1,112

Changes in contract assets and liabilities are primarily due to the difference in the point of time fulfilling the performance obligations and the point of time that customers make payments.

The amount of contract liabilities at the beginning of the year recognized as revenue of the current period is as follows:

45 -

Contract liabilities from the beginning of the year Sales of products		2023 $ 2,650		2022
				$ 393

(III) Breakdown of revenue from contracts with customers

For the details of revenue, please refer to Note 32.

XXII.	Net income
(I)	Interest income
			2023		2022
	Bank deposits		$ 15,525		$ 4,029
(II)	Other income
			2023		2022
	Trademark licensing income
	(Note 18)		$ 29,778		$ 29,778
	Income and expenses of
	investment properties
	Rental income		6,418		6,322
	Depreciation of investment
	properties	(	1,139 )	(	1,142 )
	Dividend income		46		43
	Others		1,392		1,118
			$ 36,495		$ 36,119
(III) Other gains and losses
			2023		2022
	Net gains on currency
	exchange		$ 2,307		$ 32,598
	Net (losses) gains on financial
	assets at fair value through
	profit or loss		990	(	508 )
	Others		-	(	2,096)
			$ 3,297		$ 29,994

46 -

(IV) Finance costs Interest of lease liabilities Interest of bank borrowings (V) Depreciation and amortization Summary of depreciation expenses by function Operating cost Operating expenses Other expenses Summary of amortization expenses by function Operating cost Operating expenses (VI) Employee benefits expense Short-term employee benefits Post-employment benefits (Note 19) Defined contribution plans Defined benefit plans Other employee benefits Total employee benefits expenses Summary by function Operating cost Operating expenses		2023 $ 1,269 553 $ 1,822 2023 $ 6,130 8,602 1,139 $ 15,871 $ 557 3,953 $ 4,510 2023 $ 207,858 6,861 176 7,037 11,304 $ 226,199 $ 39,150 187,049 $ 226,199		2022
				$ 1,159 89 $ 1,248 2022
				$ 5,281 8,996 1,142 $ 15,419 $ 128 3,530 $ 3,658 2022
				$ 176,620 6,558 220 6,778 8,843 $ 192,241 $ 33,304 158,937 $ 192,241

(VII) Remunerations of employees and Directors

According to the requirements of the Articles of Incorporation, if there is any balance after retaining the amount for compensating cumulative losses, the Company

shall distribute no less than 10% and no more than 5% of the net income before tax

and before deduction remuneration of employees and Directors of the year as remuneration of employees and remuneration of Directors, respectively. In 2023 and 2022, remuneration of employees and remuneration of Directors were resolved by the Board on March 12, 2024 and March 28, 2023, respectively, as follows:

47 -

	2022	2022
	10% 2% 2022
Cash		Shares
$ 9,478 1,896		$ - -

If there is any change in the amount after the approval date for the publication of the consolidated financial statements, it shall be treated as a change in accounting estimate, and adjusted and accounted for in the following year.

In 2022 and 2021, the actual distribution amount of remuneration of employees and remuneration of Directors has no difference from the amount recognized in the 2022 and 2021 consolidated financial statements.

For information on the remuneration of employees and remuneration of Directors resolved by the Board of the Company, please visit “MOPS” of the Taiwan Stock Exchange for inquiries.

(VIII) Foreign currency exchange gains and losses

Total gains on currency exchange		2023 $ 2,307		2022
				$ 32,598

XXIII. Income tax

(I) Income tax recognized in profit or losses

The major components of income tax expenses are as follows:

Income tax of the period Generated during the year Additional tax on undistributed earnings Adjustments from prior years		2023 $ 49,908 - 434 50,342		2022
				$ 9,510 2 2,048 11,560

(Cont’d)

48 -

(Cont’d)

Deferred income tax Generated during the year Income tax expenses recognized in profit or losses		2023 $ 3,236) $ 47,106		2022
	(			$ 4,440 $ 16,000

The reconciliation of accounting Net income before tax Income tax expense at the statutory rate Non-deductible items in determining taxable income Tax-exempted income Adjustments in temporary differences Investment tax credits during the period Additional tax on undistributed earnings Adjustments from prior years Income tax expenses recognized in profit or losses (II) Tax liability Tax liability Income tax payable	income and income tax expenses is as follows: 2023 2022 $ 246,765 $ 83,403 $ 49,353 $ 16,681 - 1,069 ( 85 ) ( 9 ) ( 1,429 ) 283 ( 1,167 ) ( 4,074 ) - 2 434 2,048 $ 47,106 $ 16,000 December 31,2023 December 31,2022 $ 48,424 $ 9,235	income and income tax expenses is as follows: 2023 2022 $ 246,765 $ 83,403 $ 49,353 $ 16,681 - 1,069 ( 85 ) ( 9 ) ( 1,429 ) 283 ( 1,167 ) ( 4,074 ) - 2 434 2,048 $ 47,106 $ 16,000 December 31,2023 December 31,2022 $ 48,424 $ 9,235	income and income tax expenses is as follows: 2023 2022 $ 246,765 $ 83,403 $ 49,353 $ 16,681 - 1,069 ( 85 ) ( 9 ) ( 1,429 ) 283 ( 1,167 ) ( 4,074 ) - 2 434 2,048 $ 47,106 $ 16,000 December 31,2023 December 31,2022 $ 48,424 $ 9,235
		$ 83,403 $ 16,681 1,069 ( 9 ) 283 ( 4,074 ) 2 2,048 $ 16,000 December 31,2022
			$ 9,235

(III) Deferred income tax assets and liabilities

Changes in deferred income tax assets and liabilities are as follows:

2023

2023
Deferred income tax assets Temporary difference Unrealized allowance for inventory valuation and obsolescence losses Others		Beginning balance $ 5,629 84 $ 5,713	Changes duringtheyear $ 810 ( 84) $ 726		Ending balance
			(		$ 6,439 - $ 6,439

(Cont’d)

49 -

(Cont’d)

Deferred income tax liabilities Temporary difference Unrealized exchange gains 2022 Deferred income tax assets Temporary difference Unrealizedallowance for inventory valuation and obsolescence losses Unrealized exchange losses Others Deferred income tax liabilities Temporary difference Unrealized exchange gains		Beginning balance $ 3,455 Beginning balance $ 4,854 1,733 111 $ 6,698 Beginning balance $ -	Changes duringtheyear ($ 2,510) Changes duringtheyear $ 775 ( 1,733 ) ( 27) ($ 985) Changes duringtheyear $ 3,455		Ending balance
					$ 945 Ending balance
					$ 5,629 - 84 $ 5,713 Ending balance
					$ 3,455

(IV) Deductible temporary differences of deferred income tax assets not recognized in the consolidated balance sheet

consolidated balance sheet
Deductible temporary differences	December 31,2023 $ 55,878	December 31,2022
			$ 63,866

(V) Assessment of tax

The profit-seeking business income tax declarations of the Company as of 2021 have been approved by the taxation authority.

XXIV. Earnings per share

(In New Taiwan Dollars per share)

Basic earnings per share Diluted earnings per share		2023 $ 3.00 $ 2.97		2022
				$ 0.95 $ 0.94

50 -

Net income and the weighted average number of ordinary shares used to calculate earnings per share are as follows:

Net income for the year

Net income for the year
Net income used to calculate basic and diluted earnings per share Shares Weighted average number of ordinary shares used to calculate basic earnings per share Impacts of potential ordinary shares with diluted effects: Remuneration of employees Weighted average number of ordinary shares used to calculate diluted earnings per share		2023 2022 $ 199,659 $ 67,403 Unit: thousand shares 2023 2022 66,490 70,921 651 512 67,141 71,433

If the Company may choose to distribute remuneration of employees in stock or in cash, when calculating the diluted earnings per share, it assumes that remuneration of employees will be distributed in stock and calculates the diluted earnings per share by including the weighted average number of outstanding shares when potential ordinary shares have diluted effects. When calculating diluted earnings per share before resolving

the number of shares for the distribution of remuneration of employees in the following

year, the Company continues to consider the diluted effects of such potential ordinary shares.

XXV. Capital risk management

The Company engages in capital management to ensure all enterprises within the Group can optimize the balance of liabilities and equity with a precondition of continuing operations so as to maximize shareholders’ return. The overall strategy of the Company has no significant change.

The capital structure of the Company is composed of equity (i.e., share capital, capital reserve, retained earnings, and other equity items).

The Company is not required to comply with other external capital requirements.

51 -

XXVI. Financial instruments

(I) Information on fair value - financial instruments not measured at fair value

The management of the Company considers that the carrying amounts of financial assets and financial liabilities not measured at fair value are equivalent to their fair value.

(II) Information on fair value - financial instruments at fair value on a repeatability basis
Fair value hierarchy

December 31, 2023

December 31, 2023
Financial asset measured at fair value through profit or loss Domestic listed stocks Beneficiary certificates ecember 31, 2022 Financial asset measured at fair value through profit or loss Domestic listed stocks Beneficiary certificates	Level 1 $ 211 10,330 $ 10,541 Level 1 $ 3,375 30,171 $ 33,546	Level 2 $ - - $ - Level 2 $ - - $ -	Level3 $ - - $ - Level3 $ - - $ -	Total
				$ 211 10,330 $ 10,541 Total
				$ 3,375 30,171 $ 33,546

December 31, 2022

In 2023 and 2022, there was no measurement transfer between level 1 and level 2 fair value.

(III) Categories of financial instruments

Categories of financial instruments
Financial assets Measured at fair value through profit or loss Financial assets at amortized costs (Note 1) Financial liabilities Measured at amortized costs (Note 2)	December 31,2023 $ 10,541 616,707 310,223	December 31,2022
		$ 33,546 432,003 90,724

Note 1: The balance includes cash and cash equivalents, financial assets at amortized costs (current and non-current), accounts receivable, other receivables, and other financial assets at amortized costs.

52 -

Note 2: The balance includes accounts payable, other payables, long-term borrowings (including those due within one year), and other financial liabilities at amortized costs.

(IV) Financial risk management purpose and policy

The Company’s main financial instruments include investments in equity instruments, cash and cash equivalents, accounts receivable, bank borrowings, accounts payable, and lease liabilities. The financial management department of the Company provides services for all business departments, coordinates the entrance to domestic and international financial markets for operations, analyzes the internal risk of exposure based on the level and width of risks, and monitors and manages financial risks related to the operations of the Company. Such risks include market risks (including exchange rate risks, interest rate risks, and other price risks), credit risks, and liquidity risks.

Market risk

The major financial risks assumed by the Company due to its operating activities are the risk of changes in exchange rates (please refer to (1) below for details) and the risk of changes in interest rates (please refer to (2) below for details).

There is no change in the exposure to financial instrument market risks of the Company and its management and measurement methods of such exposures.

(1) Exchange rate risks

The Company engages in sales and purchases denominated in foreign currencies, resulting in the exposure of the Company to changes in exchange rates. The management of exchange rate exposure of the Company is to utilize natural hedging methods for risk management within the scope permitted under its policies.

For the carrying amount of monetary assets and monetary liabilities denominated in non-functional currencies of the Company on the balance sheet date, please refer to Note 29.

Sensitivity analysis

The Company is primarily affected by the fluctuation of the USD’s exchange rate.

53 -

The following table describes the sensitivity analysis of the Company when the exchange rate of the functional currency appreciates and depreciates by 1% for each of the relevant foreign currencies. The sensitivity ratio used to report to the major management within the Company for exchange rate risks is 1%, which also represents the scope of reasonable and possible changes in exchange rates assessed by the management. The sensitivity analysis only includes outstanding monetary items in foreign currencies, and adjustments are made to their translation at the end of the period based on a change of 1%. The positive figures in the following table refer to the increase in net income before tax when NTD depreciates by 1% against relevant currencies; when NTD appreciates by 1% against relevant currencies, the effects on net income before tax will be the same amount in negative.

Profit or loss	Effects of	USD
	2023 $2,686(i)	2022
		$ 3,300(i)

(i) Primarily originated from cash and cash equivalents, accounts receivable, other receivables, and accounts payable denominated in USD that is outstanding on the balance sheet date with no cash flow hedging performed.
(2) Interest rate risks

Interest rate exposure arising from the borrowing of capital at fixed and floating rates by entities within the Company. The Company manages the interest rates risk by maintaining an adequate portfolio of fixed and variable interest rates.

The carrying amount of financial assets and financial liabilities under interest rate exposure on the balance sheet date is as follows:

With fair value interest rate risks - Financial assets - Financial liabilities With cash flow interest rate risks - Financial assets - Financial liabilities Sensitivity analysis	December 31,2023 $ 278,503 52,585 105,043 192,000	December 31,2022
		$ 282,187 49,268 106,119 1,936

54 -

The following sensitivity analysis is based on the risk exposure to the interest rates risk of non-derivative instruments on the balance sheet date. Regarding liabilities with variable interest rates, the analysis is based on the assumption that the amount of liabilities outstanding on the balance sheet date was outstanding throughout the reporting period. The rate of change used to report to the major management within the Group is an increase or decrease of 0.1% in the interest rate, which also represents the scope of reasonable and possible changes in interest rates assessed by the management.

With other variables remaining unchanged, if the interest rate increases/decreases by 0.1%, the net income before tax of the Company will increase/decrease by NT$87 thousand and NT$104 thousand in 2023 and 2022, respectively, primarily due to the interest rate exposure of net assets at variable interest rates.

(3) Other price risks

The Company has equity price exposure arising from its investments in equity securities. Such equity investments are not held for trading purposes but strategic investments; the Company is not actively trading such investments. In addition, the Company has appointed a particular team to monitor price risks and evaluate the timing to increase the hedging positions of the risks hedged.

Sensitivity analysis

The following sensitivity analysis is based on the equity price on the balance sheet date.

If the equity price increases/decreases by 5%, net income before tax in 2023 and 2022 will increase/decrease by NT$527 thousand and NT$1,677 thousand, respectively, due to the increase/decrease in the fair value of financial assets at fair value through profit or loss.

2. Credit risks

Credit risks refer to risks of financial losses of the Group resulting from the delay in performing contract obligations of counterparties. As of the balance sheet date, the maximum credit risk exposure of financial losses that may incur to the Company due to non-performance of obligations by

55 -

counterparties and the provision of financial guarantees is the carrying amount of financial assets recognized in the consolidated balance sheet.

To mitigate credit risks, the management of the Company has appointed a dedicated team to be responsible for the decision of loan limits, loan approval, and other monitoring procedures to ensure that appropriate actions are adopted for the recovery of overdue amounts receivable. In addition, the Company reviews the recoverable amount of amounts receivables on a case-by-case basis on the balance sheet date to ensure impairment losses are provided for amounts receivable not recoverable. Accordingly, the management of the Company considers that the credit risks of the Company have reduced significantly.

3.

Liquidity risks

The Company supports its operations and mitigates the effects of cash flow fluctuation by managing and maintaining abundant positions of cash and cash equivalents. The management of the Company monitors the use status of financing limits with banks and ensures compliance with the terms of borrowing contracts.

Bank borrowings represent a material source of liquidity to the Company. As of December 31, 2023 and 2022, the Group has not utilized any financing limit; please refer to the description of the financing limit in (2) below.

(1) Table of liquidity and interest rate risks of non-derivate financial liabilities

The maturity analysis of remaining contracts for non-derivative liabilities is prepared in accordance with the earliest date on which the Company may be requested to make repayment based on the undiscounted cash flow of financial liabilities (including principals and estimated interests). Therefore, bank borrowings that the Company may be requested to repay immediately are set out in the earliest period in the following table, without considering the probability of banks exercising their rights immediately; the maturity analysis of other non-derivative financial liabilities is prepared based on the repayment dates agreed upon.

56 -

December 31, 2023

Non-derivative financial liabilities Accounts payable Other payables Lease liabilities Instruments at floating interest rates		Request of instant payment or less than 1 month $ 10,519 73,335 289 - $ 84,143	1 to 3 months $ 22,252 8,561 578 192,181 $ 223,572	3 months to 1 year $ 2,684 872 2,600 - $ 6,156		Over 1year $ - - 67,224 - $ 67,224		Total
								$ 35,455 82,768 70,691 192,181 $ 381,095

Further information on the maturity analysis of the abovementioned financial liabilities is as follows:

Lease liabilities Instruments at floating interest rates	Less than 1 year	Less than 1 year	1 to 5years	1 to 5years		5 to 10 years		10 to 15 years		15 to 20 years $ 11,398 - $ 11,398		Over 20 years
		$ 3,467 192,181 $ 195,648		$ 12,680 - $ 12,680		$ 11,398 - $ 11,398		$ 11,398 - $ 11,398				$ 20,350 - $ 20,350

December 31, 2022

Non-derivative financial liabilities Accounts payable Other payables Lease liabilities Instruments at floating interest rates		Request of instant payment or less than 1 month $ 11,239 7,760 190 195 $ 19,384	1 to 3 months $ 18,342 45,497 380 391 $ 64,610	3 months to 1 year $ 57 5,893 1,711 1,368 $ 9,029		Over 1year $ - - 65,943 - $ 65,943		Total
								$ 29,638 59,150 68,224 1,954 $ 158,966

Further information on the maturity analysis of the abovementioned

financial liabilities is as follows:

Lease liabilities Instruments at floating interest rates	Less than 1 year	Less than 1 year	1 to 5years	1 to 5years		5 to 10 years		10 to 15 years		15 to 20 years $ 11,398 - $ 11,398		Over 20 years
		$ 2,281 1,954 $ 4,235		$ 9,119 - $ 9,119		$ 11,398 - $ 11,398		$ 11,398 - $ 11,398				$ 22,630 - $ 22,630

(2) Financing limit

December 31, 2023 December 31, 2022

Non-secured bank borrowings limits - Amount not utilized $ 20,000 $

(Cont’d)

57 -

(Cont’d)

Secured bank borrowings limits (may be extended with the consent of both parties) - Amount utilized - Amount not utilized	December 31,2023 $ 192,000 344,073 $ 536,073	December 31,2022	December 31,2022
			$ 1,936 352,875 $ 354,811

XXVII. Related party transactions

When preparing the consolidated financial statements, transactions, accounting balances, gains and losses between the Company and subsidiaries (who are related parties of the Company) are eliminated in full; therefore, they are not disclosed in the note.

Compensation of key management personnel

Short-term employee benefits Post-employment benefits Other employee benefits		2023 $ 19,325 678 153 $ 20,156		2022
				$ 18,070 375 144 $ 18,589

The salary of Directors and other major management is determined by the Remuneration Committee based on individual performance and market trends.

XXVIII. Pledged assets

The following assets were provided as collateral for bank borrowings, performance guarantees, and lease deposits:

guarantees, and lease deposits:
	December 31, 2023	December 31, 2022
Time deposits pledged (accounted
for financial assets at amortized
costs - current)	$ 101,627	$	-
Time deposits pledged (accounted
for financial assets at amortized
costs - non-current)	12,056		12,026
Property, plant and equipment and
investment properties	22,560		23,425
Refundable deposits	32,911		30,212
	$ 169,154	$	65,663

58 -

XXIX. Assets and liabilities in foreign currencies of material effects

The following information is presented as a summary of foreign currencies other than functional currencies of entities within the Company, and the exchange rates disclosed are the exchange rates used to translate such foreign currencies into functional currency. Assets and liabilities in foreign currencies of material effects are as follows:

Unit: Foreign currencies/NT$ thousand

December 31, 2023

Assets in foreign currencies Monetary items USD JPY GBP RMB Liabilities in foreign currencies Monetary items USD RMB December 31, 2022 Assets in foreign currencies Monetary items USD RMB EURO GBP	Foreign currency $ 9,358 21,367 105 943 611 544 Foreign currency $ 11,235 1,257 155 104	Exchange rate 30.705 0.217 39.150 4.327 30.705 4.327 Exchange rate 30.71 4.408 32.72 37.09	Carryingamount	Carryingamount
			$ 287,337 4,641 4,111 4,080 $ 300,169 $ 18,761 2,354 $ 21,115 Carryingamount

				$ 345,027 5,541 5,072 3,857 $ 359,497

(Cont’d)

59 -

(Cont’d)

Foreign currency Exchange rate Carrying amount Liabilities in foreign currencies Monetary items USD 489 30.71 $ 15,017

(Losses) gains (unrealized) on currency exchange of material effects are as follows:

Foreign currency USD	2023	Net exchange gains or losses $ 4,239	2022
	Exchange rate 30.705		Exchange rate 30.71	Net exchange gains or losses
					$ 17,269

XXX. Disclosures notes

(I) Information on significant transactions:
Financings provided to others: None.
Endorsements and guarantees provided to others: None
Marketable securities held (excluding investments in the equity of subsidiaries). (Table 1)
Marketable securities acquired and disposed of at costs or prices of at least NT$300 million or 20% of the paid-in capital: None
Acquisition of individual real estate properties at costs of at least NT$300 million or 20% of the paid-in capital: None
Disposal of individual real estate properties at prices of at least NT$300 million or 20% of the paid-in capital: None
Total purchases from or sales to related parties of at least NT$100 million or 20% of the paid-in capital: None
Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital: None
Information about the derivative financial instruments transaction: None
Others: The business relationship between the parent and the subsidiaries and significant transactions between them (Table 5)
(II) Information on investees (Table 2)
(III) Information on investments in Mainland China:
Name of investees in Mainland China, major scope of business, paid-in capital, investment methods, outward/inward remittance of capital, shareholding ratio,
60 -

carrying amount of investments at the end of the period, gains or losses on investments remitted back, and investment limits in Mainland China. (Table 3)

Material transactions that occurred directly or indirectly via a third-party region with investees in Mainland China, their prices, payment conditions, and unrealized gains or losses: (Table 4)
- (1) Purchase amount and ratio and ending balance and ratio of relevant amounts payable.
- (2) Sales amount and ratio and ending balance and ratio of relevant amounts receivable.
- (3) Amount of property transaction and gains or losses arising thereof.
- (4) Ending balance of note endorsements/guarantees of provision of collateral and its purpose.
- (5) Maximum balance of fund accommodation, closing balance, interest rate range, and total interest of the period.
- (6) Other transactions have material effects on the profit or loss of the period or financial position (i.e., provision or receipt of services).
(IV) Information on major shareholders: Name of major shareholders with a shareholding of 5% or above and shareholding ratio. (Table 6)

XXXI. Segment information

(I) Segment income, operating achievements, and total assets and liabilities of segments: The operating decision-maker of the Company focuses on the financial information of products to allocate resources and evaluate segment performance; each product has similar economic features, each product adopts similar procedures, and products are sold via unified and centralized sales methods; therefore, the Company is reported as a single operating segment. Furthermore, for the segment information provided by the Company to the operating decision-maker for review, the measurement basis is equivalent to that of financial statements; therefore, the consolidated statement of comprehensive income in 2023 and 2022 may be referred to for the reportable segment income and operating achievements in 2023 and 2022. The consolidated balance sheet as of December 31, 2023 and 2022 may be referred to for the reportable segment assets as of December 31, 2023 and 2022.

61 -

(II) Revenue from major products

Revenue from major products of the Company is analyzed as follows:

Product Optical transport network access equipment U interface and MDSL interface multiplexer Network management system Internet access equipment Time-slot interchanger Others		2023 $ 356,445 148,394 27,923 10,875 5,461 99,999 $ 649,097		2022
				$ 236,872 132,501 7,003 3,039 3,582 55,245 $ 438,242

(III) Geographic information

Information on the revenue of continuing operations from external customers by

operating venue and on non-current assets by location of assets is set out as follows:

Europe Taiwan America Asia (other than Taiwan) Others		External customer 2023 2022 $ 209,894 $ 85,562 204,480 107,240 118,741 101,558 87,222 102,028 28,760 41,854 $ 649,097 $ 438,242	External customer 2023 2022 $ 209,894 $ 85,562 204,480 107,240 118,741 101,558 87,222 102,028 28,760 41,854 $ 649,097 $ 438,242	Non-current assets	Non-current assets	Non-current assets	Non-current assets
		2023		December 31, 2023		December 31, 2022 $ - 223,352 - 5,941 - $ 229,293
		$ 209,894 204,480 118,741 87,222 28,760 $ 649,097			$ - 228,770 - 5,470 - $ 234,240		$ - 223,352 - 5,941 - $ 229,293

Non-current assets exclude deferred income tax assets, refundable deposits, and financial instruments.

(IV) Major customers

The breakdown of customers who account for 10% of the Company’s net

revenue or above is as follows:

revenue or above is as follows:
Customer A Customer B Customer C		2023 $ 107,296 $ 104,464 $ 101,173		2022
				$ 90,308 $ 78,171 Note

Note: Sales revenue has not reached 10% of the Company’s revenue.

62 -

Loop Telecommunication International, Inc. and its subsidiaries

Marketable securities held

December 31, 2023

Table 1

(In Thousands of New Taiwan Dollars; unless specified otherwise)

Names of companies held	Category of marketable securities	Name of marketable securities	Relationship with the securities issuer	Accounting item		At the end of theperiod	At the end of theperiod		Remarks
					Shares (In Thousands)	Carrying amount	Shareholding ratio(%)	Market price
The Company	Fund Common shares Common shares Common shares Preferred shares	Union Money Market Fund TPK Holding Co., Ltd. G-TECH Optoelectronics Corporation Sunspring Metal Corporation Formerica Optoelectronics Inc.	`－` `－` `－` `－` `－`	Financial assets at fair value through profit or loss - Current Financial assets at fair value through profit or loss - Current Financial assets at fair value through profit or loss - Current Financial assets at fair value through profit or loss - Current Financial assets at fair value through profit or loss - Current	761 3 2 2 8	$ 10,330 109 51 51 -	- - - - -	$ 10,330 109 51 51 -	Note 1 Note 1 Note 1 Note 1 `－`

Note 1: Calculated based on the closing price of shares on December 31, 2023.

Note 2: As of December 31, 2023 the abovementioned securities were not provided for guarantee, pledge, or being restricted from use due to other agreements.

63 -

Loop Telecommunication International, Inc. and its subsidiaries

Information on investees, location, and other relevant information

For the year ended December 31, 2023

Table 2

(In Thousands of New Taiwan Dollars; unless specified otherwise)

Name of the investors	Name of the investees	Location	Main business line	Original / investment amount	Original / investment amount	Held at the end of theperiod	Held at the end of theperiod	Held at the end of theperiod	Net loss of the investee for the period (Note)	Investment losses recognized during the period(Note)	Remarks
				Ending balance of the period	End of the preceding period	Shares (In Thousands)	Ratio (%)	Carrying amount (Note)
The Company Tech-Plan (BVI) Ltd.	Tech-Plan (BVI) Ltd. Loop Telecom NA, Inc. Maxi View Holdings Ltd. Loop Telecommunication International Ltd.	BVI The U.S. Hong Kong Cayman	Investment business Development and trading of digital communication equipment and software Investment business Investment business	USD 4,016 thousand USD 5 thousand USD1,616 thousand USD2,400 thousand	USD4,016 thousand USD 5 thousand USD1,616 thousand USD2,400 thousand	4,016 5 1,616 2,400	100 100 100 100	$ 412 153 ( 293 ) 712	( $ 194 ) - ( 72 ) ( 122 )	( $ 194 ) - ( 72 ) ( 122 )	Subsidiary of the Company Subsidiary of the Company Sub-subsidiary of the Company Sub-subsidiary of the Company

Note: Calculated based on the financial statements of the same period audited by Accountants.

64 -

Loop Telecommunication International, Inc. and its subsidiaries

Information on investments in Mainland China

For the year ended December 31, 2023

Table 3

(In Thousands of New Taiwan Dollars; unless specified otherwise)

Investee in Mainland China	Main business line	Paid-in capital	Method of investment	Accumulated investment amount of remittance from Taiwan at the beginning of the period	Accumulated investment amount of remittance from Taiwan at the beginning of the period	Investment flows	Investment flows	Accumulated investment amount of remittance from Taiwan at the end of the period	Shareholdin g ratio of the Company’s direct or indirect investments (%)	Investment gains or losses recognized during the period (Note 2)	Carrying amount of investments at the end of the period	Accumulated inward remittance of earnings as of the end of the period
						Outflow	Inflow
Tianjin Loop Electron Technology Co., Ltd.	Development and trading of digital communication equipment and software	USD 850 thousand	Note 1	USD296 thousand and RMB500 thousand ( $ 11,252 ) Note 3		$ -	$ -	USD296 thousand and RMB500 thousand ( $ 11,252 ) Note 3	100	$ 391	( $ 515 )	$ -
Tianjin Loop Technology Co.,Ltd	Development and trading of digital communication equipment and software	USD 600 thousand	Note 1	USD300 thousand ( $ 9,212 ) Note 6		-	-	USD 300 thousand ( $ 9,212 ) Note 6	100	( 463 )	( 2,287 )	-
Chongqing Loop Technology Co., Ltd.	R&D, design, production, processing, and trading of digital communication equipment	USD2,400 thousand	Note 1	USD2,400 thousand ( $ 73,692 )		-	-	USD2,400 thousand ( $ 73,692 )	100	( 122 )	704	-

Accumulated Investment in Mainland China at the end of the period(Note 5)		Investment amounts authorized by Investment Commission, MOEA			Ceiling on investments in Mainland China imposed by the Investment Commission of the Ministry of Economic Affairs is 60% of the net worth
USD 3,882 thousand and RMB 500 thousand ( $ 121,361)		USD 5,536 thousand ( $ 169,983)			$505,916

Note 1: Investment in the company in Mainland China through investing in establishing a company in a third-party region.

Note 2: Calculated based on the financial statements of the same period audited by Accountants.

Note 3: Maxi View Holdings Ltd. was established through the investments from earnings distributed by Tianjin Loop Communication Equipment Co., Ltd. Maxi View Holdings Ltd. acquired the residual equity of Tianjin Loop Electron Technology Co., Ltd. at RMB500 thousand in August 2019, and its shareholding ratio increased from 75% to 100%.

Note 4: For those involving foreign currencies, they are translated into NTD at the exchange rates on December 31, 2023 using the following rate: US$1=NT$30.705 and RMB$1=NT$4.327. Note 5: Include the cumulative outward remittance amount of US$886 thousand to Hangzhou Loop Electronics Co., Ltd. and Hangzhou Loop Smart Instrument Co., Ltd. Note 6: Exclude the investment amount of US$300 thousand from the earnings of Maxi View Holdings Ltd..

65 -

Loop Telecommunication International, Inc. and its subsidiaries

Material transactions that occurred directly or indirectly via a third-party region with investees in Mainland China, their prices, payment conditions, unrealized gains or losses, and other relevant information

For the year ended December 31, 2023

Table 4							(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)
Investee in Mainland China	Transaction category	Purchases and sales		Transaction conditions (Note)	Notes and accounts receivable(payable)		Unrealized gains or losses	Remarks
		Amount	Ratio		Amount	Ratio
Tianjin Loop Technology Co.,Ltd ChongqingLoopTechnologyCo., Ltd.	Sales Purchases Purchases	$ 704 5,609 13,555	0.11% 2.74% 6.62%	`－` `－` `－`	$ - ( 827 ) ( 3,177)	- 2.13% 8.18%	$ - - -	`－` `－` `－`

Note: For transactions between related parties, the transacting price is determined by both parties with reference to the market status; however, the collection of payments for goods shall be subject to the capital status of the related parties.

66 -

Loop Telecommunication International, Inc. and its subsidiaries

The business relationship between the parent and the subsidiaries and significant transactions between them

For the year ended December 31, 2023

Table 5

(In Thousands of New Taiwan Dollars)

No.	Company	Counter-party	Relationship with the counterparty (Note 1)		Status of transaction	Status of transaction
				Account	Amount	Transaction conditions (Note 2)	Ratio to the consolidated total revenue or total assets
0	The Company	Chongqing Loop Technology Co., Ltd. Tianjin Loop Technology Co.,Ltd Tianjin Loop Electron Technology Co., Ltd. LoopTelecom NA, Inc.	1 1 1 1	Purchases Accounts payable Other prepayments Sales Purchases Other receivables Prepayments for goods Accounts payable Other prepayments Temporary payments	$ 13,555 3,177 1,646 704 5,609 695 3,618 827 87 31	`－` `－` `－` `－` `－` `－` `－` `－` `－` `－`	2.09% 0.25% 0.13% 0.11% 0.86% 0.05% 0.28% 0.06% - -

Note 1: 1 refers to transactions between the parent company and subsidiaries.

Note 2: The selling price provided by the Company to related parties is equivalent to other customers; however, the credit period for general customers is 30 to 60 days, and for related parties is 180 days; however, the collection is temporarily made based on the capital status of subsidiaries at present.
67 -

Loop Telecommunication International, Inc.

Information on major shareholders

December 31, 2023

Table 6

Name of major shareholder	Shares
	Number of shares held(share)	Ownership
Yeh Maw-Lin	5,625,844	9.91%

Note 1: Information on the major shareholder in the table is provided by the centralized depository enterprise on the last business day of the current quarter for the calculation of the total number of ordinary shares and preferred shares of the Company with non-physical registration completed (including treasury shares) held by shareholders, in aggregate, reaching 5% or above. The share capital in the consolidated financial statements of the Company may differ from the actual number of shares delivered with non-physical registration completed due to a different preparation or calculation basis.
Note 2: Regarding the abovementioned data, if the shareholding of shareholders is entrusted, the individual account of the consignor for whom the trustee opens the trust account shall be presented separately. For the declaration of insiders with over 10% of equity according to the Securities and Exchange Act by a shareholder, the shareholding includes shareholding of the shareholder plus shares delivered to a trust that has rights to determine the utilization of trusted properties; for data on insider equity declaration, please refer to MOPS.
68 -

AI assistant

LOOP — Annual Report 2023

52258_rns_2023-11-10_4fe6ae6b-7a69-4f93-ba3c-b61a49b505b1.pdf

Loop Telecommunication International, Inc. and its subsidiaries

§Table of Contents§

Declaration of Consolidated Financial Statements of Affiliated Enterprises

Independent Auditors’ Report Translated from Chinese

Opinion

Basis for opinion

Key Audit Matters

Revenue recognition

Other matters

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

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

Notice to Readers

Loop Telecommunication International, Inc. and its subsidiaries

Consolidated Balance Sheet

December 31, 2023 and 2022

Loop Telecommunication International, Inc. and its subsidiaries

(Cont’d)

Loop Telecommunication International, Inc. and its subsidiaries

Consolidated Statement of Changes in Equity

Loop Telecommunication International, Inc. and its subsidiaries

Consolidated Statement of Cash Flows

(Cont’d)

Notes to Consolidated Financial Statements

I. Company History

II. Approval date and procedures of the financial statements

III. New standards, amendments and interpretations adopted:

IV. Summary of significant accounting policies

(VII) Property, plant and equipment

(XII) Revenue recognition

(XIII) Lease

V. Significant accounting judgments and key source of uncertainties for estimations and assumptions

Uncertainties for estimations and assumptions

VI. Cash and cash equivalents

VIII. Financial assets at amortized costs

IX. Accounts receivable and other receivables

December 31, 2023

December 31, 2022

XI. Subsidiary

Subsidiaries included in the consolidated financial statements

XII. Property, plant and equipment

XIII. Lease agreement

(II) Lease liabilities

(III) Material leasing activities and terms

(IV) Other leases

XIV. Investment properties

XV. Intangible assets

(Cont’d)

XVI. Other assets

XVII. Borrowings Short-term borrowings

- Long term borrowings

XVIII. Other liabilities

(II) Defined benefit plans

XX. Equity

(II) Capital surplus

(III) Retained earnings and dividend policy

(IV) Special reserve

Exchange differences on translation of foreign operations

(II) Contract balance

(VII) Remunerations of employees and Directors

XXIII. Income tax

(Cont’d)

(Cont’d)

(III) Deferred income tax assets and liabilities

2023

(V) Assessment of tax

XXIV. Earnings per share

Net income for the year

XXV. Capital risk management

XXVI. Financial instruments

Sensitivity analysis

Sensitivity analysis

2. Credit risks

3.

December 31, 2023

December 31, 2022

(2) Financing limit

XXVII. Related party transactions

LOOP Annual Report 2023