Skip to main content

AI assistant

Sign in to chat with this filing

The assistant answers questions, extracts KPIs, and summarises risk factors directly from the filing text.

Sign up Log in

LOOP Annual Report 2023

Jul 11, 2024

52258_rns_2024-07-11_a0b16355-d731-4414-8ae9-6a00391fd2fa.pdf

Annual Report

Open in viewer

Opens in your device viewer

Stock Code: 3025

==> picture [120 x 43] intentionally omitted <==

Loop Telecommunication International, Inc.

2023Annual Report

Published on June 3, 2024

Annual Report's website: http://mops.twse.com.tw/mops/web/index https://www.looptelecom.com/tw

I. Name, title, and contact No. Of the spokesperson of the Company: Spokesperson: Cai Xing-Juan Title: Assistant Vice President of the Business Development Department Tel.: (03)5787696 ext. 1068 E-mail: [email protected] Acting spokesperson: Chiang Hui-Ping Title: Assistant manager of the Sales Department Tel.: (03)5787696 ext. 8101 E-mail: [email protected]

  • II. Address and phone number of headquarters, branch offices and plants

Headquarters Address: 6F, No.8, Xin'an Road, Hsinchu Science Park. Tel.: (03)5787696 Fax: (03)5787695 Taipei Office Address: 6F, No.36, Alley 38, Lane 358, Ruiguang Road, Neihu District, Taipei City. Tel.: (02) 26590399 Fax: (02) 26592324 Tainan Office Address: 10F, No.88, Zhongshan Road, West Central District, Tainan City. Tel.: (06) 2226860 Fax: (06) 2226870 Plant Address: 7F, No.8, Xin'an Road, Hsinchu Science Park Tel.: (03)5787696 Fax: (03)5787695

III. Name, address, Tel., and website of the stock transfer agency Name: Register & Transfer Agency Department of Yuanta Securities Co., Ltd Address: B1, No.210, Sec.3, Chengde Road, Datong District, Taipei City Tel.: (02) 25863117

Website: http://www.yuanta.com.tw

  • IV. Names of CPAs for the most recent year and the name, address, Tel., and website of the CPA's firm:

CPA: Huang Yu-Feng and Tseng Jian-Ming Firm: Deloitte & Touche Taiwan Address: 6F, No.2, Zhanye 1st Road, Hsinchu Science Park. Tel.: (03) 5780899 Website: www.deloitte.com.tw

  • V. Name of any exchanges where the Company's securities are traded offshore and the method by which to access information on said offshore securities: None.

  • VI. The Company: www.looptelecom.com

Table of Content

(I) Business Report To Shareholders .................................................................................................................. 1 1. The 2023 operating results ........................................................................................................................... 3 2. Summary of the business plan of the year (2024) ........................................................................................ 8 3. Future development strategies ...................................................................................................................... 9 4. Effects of the external competitive environment ........................................................................................ 10 5. Effects of the regulatory environment and macroeconomic environment .................................................. 11 (II) Company Profile ............................................................................................................................................ 12 1. Establishment date ...................................................................................................................................... 12 2. Company history ........................................................................................................................................ 12 (III) Corporate Governance Report .................................................................................................................... 23 1. Organization ............................................................................................................................................... 23 2. Data on directors, president, vice presidents, assistant vice presidents, and directors of departments and branches ...................................................................................................................................................... 26 3. Corporate governance implementation ....................................................................................................... 40 4. Information on CPA fees ............................................................................................................................ 69 5. Information on replacement of CPAs ......................................................................................................... 70 6. The Chairman, President, or managers in charge of financial or accounting matters of the Company working in the CPA's firm or its affiliates in the most recent year ............................................................. 71 7. Transfer of equity and changes in equity pledges of directors, supervisors, managers, and shareholders with a shareholding of 10% and above in the most recent year and up to the date of publication of the annual report ................................................................................................................................................ 71 8. Information on relationships between shareholders with the top ten shareholdings .................................. 72 9. The total number of shares held in any single investee by the Company, its Directors, managers, or any companies controlled either directly or indirectly by the Company........................................................... 72 (IV) Capital And Shares........................................................................................................................................ 73 1. Capital and shares ....................................................................................................................................... 73 2. Issuance of corporate bonds, conversion of corporate bonds, exchange of corporate bonds, corporate bonds issued under shell registry, and corporate bonds with options ......................................................... 80 3. Issuance of preferred shares and preferred shares with options ................................................................. 80 4. Global depository receipts .......................................................................................................................... 80 5. Employee stock options and restricted stock awards ................................................................................. 80 6. Mergers or receipt of new shares issued by other companies .................................................................... 80 7. Implementation status of the capital utilization plan .................................................................................. 81 (V) Operational Highlights ................................................................................................................................. 81 1. Scope of business ....................................................................................................................................... 81 2. Overview of market and production and marketing ................................................................................... 96 3. The number of employees for the most recent two years and up to the date of publication of the annual report, their average years of service, average age, and education distribution ratio ................... 106 4. Information on environmental expenditure .............................................................................................. 106 5. Labor-capital relations .............................................................................................................................. 106 6. Cybersecurity management ...................................................................................................................... 110 7. Important Contracts: ..................................................................................................................................111 (VI) Finance Overview ........................................................................................................................................ 112 1. Condensed balance sheet and statement of consolidated income for the most recent five years ............. 112 2. Financial analysis for the most recent five years ...................................................................................... 116

  1. Audit Committee's Review Report of the financial statements of the most recent year: ......................... 120 4. Financial statements of the most recent year ............................................................................................ 121 5. Parent company only financial statements of the most recent year .......................................................... 121 6. KPIs of the Company: .............................................................................................................................. 121 7. If The Company and its affiliates have experienced financial difficulties in the most recent year and up to the date of publication of the annual report, explain how said difficulties affect the company's financial conditions .................................................................................................................................. 121 (VII) Review And Analysis Of Financial Condition And Financial Performance And Risk Management 122 1. Financial position ..................................................................................................................................... 122 2. Financial performance: ............................................................................................................................. 123 3. Cash flow analysis: ................................................................................................................................... 123 4. Effect of major capital expenditures on finance and business in the most recent year ............................ 124 5. Investment policy for the most recent year, the main reasons for profit or loss, improvement plan, and investment plan for the coming year ........................................................................................................ 124 6. Analysis and evaluation of risks shall be performed for the following matters in the most recent year and up to the publication date of the annual report .................................................................................. 124 7. Risk management structure ...................................................................................................................... 127 (VIII) Special Items ............................................................................................................................................ 129 1. Information on affiliates ........................................................................................................................... 129 2. Private placement of securities processing status during the most recent year and up to the publication date of the annual report ........................................................................................................................... 133 3. Holding or disposal of the company's shares by its subsidiaries in the most recent year and up to the publication date of the annual report ........................................................................................................ 133 4. Other matters that require additional explanation .................................................................................... 133 (IX) Materially Affect Shareholders' Interest Or The Price Of The Company's Securities ......................... 133 Attachment 1 Procedures for Handling Material Inside Information ........................................................... 134 Attachment 2 Code of Conducts or Ethics of Employees ................................................................................ 137 Attachment 3 Code of Ethical Conduct ............................................................................................................ 139 Attachment 4 Regulations for Employees’ Complaints ................................................................................... 141 Attachment 5 Procedures for Protection of Personal Data ............................................................................. 143

(I) Business Report to Shareholders

Dear shareholders,

In 2023, apart from the United States and the United Kingdom, various countries in European successively launched the national infrastructure upgrade plans in response to the changing market dynamics. Additionally, there was an increasing demand for upgraded internet speeds, driven by emerging AI applications and corporate market needs. These factors contributed to the rising penetration rate of highspeed networking equipment, which boded well for the revenue of Taiwan’s Network Communication Equipment industry. Loop Telecommunication responded to the transformation of the industry pattern and our long-established brand has obtained fruitful results in being highly recognized, which has been reflected in breakthroughs of revenue, gross profit, and the overall performance. Facing the ever-changing market revolution, the product has been successfully transformed into a contractor for value-added MCC solutions in recent years, which will have significant effects on the increase in subsequent operating income.

The consolidated revenue of the Company throughout the year was NT$649,097 thousand, representing a growth of 48% from 2022; net income was NT$199,659 thousand, and earnings per share were NT$3.00. Since 2019, the profit margin of Loop Telecommunication has been maintained stably above 50%. Due to the promotion of infrastructure construction in the European and American markets, the continuous growth of emerging markets and the results of deep cultivation in the Taiwan market being reflected, the profit margin, operating profit margin and net profit margin have reached a record high over the years. A good result of growth in all three aspects was shown, which is quite amazing in the Networking Communication industry. In addition, we maintained favorable performance in terms of financial structure, solvency, accounts receivable turnover, and other financial indicators.

Regarding our business, there were 46 countries having business dealings with the Company worldwide last year. Export sales accounted for about 70% of the operating income throughout the year. Of which, there was significant growth in Americans, the European Union and Taiwan market, while India and the Middle East declined slightly. In terms of industry, electricity and government agencies accounted for 70% of the total revenue, and the transportation and private corporate market accounted for about 20%. In 2023, 80% of our operating income was from 9% of countries having dealings with us. Among all 27 product lines, 80% of the revenue was from 12% of the sales products. With the good prospects of the communication market, Loop Telecommunication has long cooperated with international SI factory. Europe and the United States are expected to continue to grow, and the domestic market has entered the next stage of development. The Southeast Asian market has been on recovery one by one and we have continue to develop emerging markets. Our active developments of next generation communication technology to flexibly meet customer demand will be regarded as the growth momentum under the new trend.

In recent years, Loop Telecommunication has developed mission-critical communications (MCC) solutions and successfully transformed its product strategy into a number of important infrastructure markets at home and abroad. Presently, most of the mission-critical backbone network infrastructure constructions based on SDH/SONET technology are about to be replaced. The technology needs to be upgraded to MPLS-TP based packet transmission network to replace the SDH/SONET based TDM technology to meet the high frequency bandwidth requirements service. Therefore, it is expected that the mission-critical backbone network is bound to enter a new wave of replacement tide in the next 5 - 10 years. In response to the rapidly changing market need, Loop Telecommunication’s product line includes more than 30 products, and continues to expand the new features of new products such as G7860A, WDM1800, O9400-PTN10G, O9500-PTN10G and other mixed service multiplex equipment that provide a good transformation solution for customers in the growing pains of old and new backbone transmission communication technology conversion. Meanwhile, it enables customers to perform end-to-end circuit management in the new generation packet transport network through a network management system similar to the concept of TDM network, saving customers the potential cost of maintenance operations personnel training. Additionally, we have developed our own ultra-low latency zero packet drop protection switching technology for the access service product line (AM3440, IP6704A), which can solve the main hindrances that mission-critical users will encounter when facing the transition from backbone technology to packet transmission network, such as uncontrollable delay variation and asymmetric delay, etc. On the basis of these innovative technologies, Loop Telecommunication’s all-round upgrade from transmission backbone and service access to network management system will provide customers with a total solution for dozens of MCC backbone networks to the access end.

1

This year, the Company’s key development project is the flagship Loop-G7800, which is a new generation of PTN high frequency wide multi-function transmission access equipment, and a highlight of Loop Telecommunication’s strong entry into the MCC market. Loop-G7800 is based on the Company’s years of accumulation and continuous innovation of technology. The company has also invested in a large amount of cost to develop open-source management integrated automated test platform to improve quality control at all stages from R&D to production. We have also developed more than a dozen types of interface cards that support service multiple speeds. Apart from serving as a backbone node, G7800 can support 100G packet transmission network interfaces from traditional low-speed 64K circuits to the next generation of mission-critical backbone requirement on a single system, and can be configured according to customers’ applications. The comprehensive feature allows customers to have more flexibility for network planning in the future; regardless of phased budgeting projects increased based on requirements or the new era overall transmission network solutions that wish to be settled at one go, the Loop-G7800 product line will be able to satisfy such customers. At present, multiple partners have been actively inquiring about the release of G7800.

Except for the major backbone and access network product series used worldwide, Loop Telecommunication has explored Information Security System (ISS), Artificial Intellence Solution (AI Solution), iNMS-Big Data Analysis/AI, Automatic System Diagnosis and Repair, inet-Circuit Creation/ Auto-Diagnostic, Corporate New Era Office Network, Corporate 5G Private Network, and other new technologies in recent years to expand into new markets of corporate and governmental information security network overall solution development. In recent years, due to frequent information security events, the requirements for information security of corporations and the government have been increasing. Loop Telecommunication has obtained ISO27001 information security certification and performed a firmware upgrade for different products catering to the MCC market to support FIPS 140-3. Meanwhile, the Company also plans to launch the Loop-ISS2150 mission-critical network firewall and Loop-ISS2110 government configuration baseline network setting management system to assist customers in establishing the optimized MCC information security protection environment.

Looking into to the future, the Company will continue to launch the following products and services

  1. Primarily used in MCC market

  2. High frequency width multi-function transmission access equipment G7800:

  3. Circuit simulation capability, circuit handover matrix card G7800-XCU interface card with STM64/OC-192 capacity

  4. G7800-CC4 main control card with 600G level exchange capability

  5. GFEO 10G interface card that supports L2 link level and L2.5/L3 end-to-end encrypted transmission technology

  6. GFE-PoE power over Ethernet interface card that supports PoE/PoE+/PoE++ and other specifications

  7. B2G5-2eos interface card that supports Ethernet packet transfer from SDH/SONET to PTN protocol conversion

  8. MXP-10GADM interface card that supports OTN optical plug multiplexing capability

  9. Highport E1/DS1 circuit emulates TE1-CEM interface card

  10. Highport E3/DS3 circuit emulates TE3-CEM interface card

  11. Solutions primarily used in the interconversion from TDM transmission and packet transmission

  12. O9500R-8GES16SWA interface card that supports multiple virtual connection groups

  13. O9500R-PTN100G interface card with 400G level exchange capability

  14. O9500R-XGEO interface card with multi-port 10G expansion capability that supports encrypted transmission

  15. Inet network management system - circuit management and diagnosis module

  16. Solutions primarily used in exclusive MCC’s 5G for enterprises

  17. MCC 5G-CPE and 5G CPE corporate core network service information security network solutions primarily used in new-generation corporate offices

  18. INMS and inet network management system-AI intelligent network management operation framework

  19. New generation corporate area network solution ISS2180 Next Generation Secured Office Networking Solution

  20. IIoT and video monitoring equipment iot0510 outdoor sensors

  21. OT operation technical information security equipment ISS2150 MCC-FW

  22. Government configuration baseline information security management system ISS2110 GCB-NE, GCB-Linux.

2

For future market strategies, the MCC market is enormous, and it requires customized overall solutions. At present, many countries have initiated dedicated acts for infrastructure. Due to the high competitiveness of Loop Telecommunication network transmission equipment and solutions, it has a leading position in the total solution market in the mission-critical communications through international partners and local system integrators. The next step is to expand the market through the advent of new products, which actively participate in large-scale communication exhibitions and arrange product seminars held in various countries, and publicize the effectiveness of Loop Telecommunication’s new product features and enhance exposure opportunities and brand orientation.

Marketing strategy wise, apart from sharing the experience internationally, Loop Telecommunication's successful case in the new backbone transmission will develop more important new customer groups. In the MCC business, the annual service revenue is also one of the main revenue of products/solutions. Loop Telecommunication development team will develop a vertically integrated way to collect maintenance service revenue from customers in the international market, it is believed that it can bring more orders and drive operational performance for the Company. MCC networking product portfolio under the new business will strengthen the use of automated test system and the new product G7800 combined with the niche of various products, which will become the world’s first star product, and is expected to become the growth focus for operations in the future. At present, Loop Telecommunication is the world’s top three MCC solutions. Based on the existing foundation, the Company continues to reinforce its management and makes constant efforts by adhering to the philosophy of continuing to develop new products and exploring new markets. In the future, the Company will become a leader, grasp business opportunities, create excellent performance, and continue to strive for maximized operating performance for all shareholders.

The 2023 operating results, the summary of the 2024 business plan, future development strategies of the Company, and effects of the external competitive environment, regulatory environment, and macroeconomic environment are summarized and reported as follows:

1. The 2023 operating results

(1) Implementation achievement of the business plan

The consolidated revenue of the Company throughout the year was NT$649,097 thousand, representing an increase of 48% from 2022; net income was NT$199,659 thousand, and earnings per share were NT$3.00. The profit margin of Loop Telecommunication has been maintained stably above 50% since 2019, which is a relatively outstanding performance in the network and communication industry. With the effects achieved through focusing on the market in Taiwan and the continual growth in different regions, Loop Telecommunication has adopted global sales and arrangements, and the regional ratio of the overall revenue will become more comprehensive. In addition, we maintained favorable performance in terms of financial structure, solvency, accounts receivable turnover, and other financial indicators.

(2) Budget execution:

Actual revenue surpassed internal estimates, driven by a favorable outlook in the communications market. Loop Telecom's long-term partnerships with international SI heavyweights are expected to sustain growth in Europe and America. The domestic market has also entered the next development phase, while the markets in Southeast Asia are recovering. Continued development in emerging markets and proactive advancement in next-gen communication technologies will fuel growth under new trends.

3

(3) Analysis of financial income and expenses, and profitability:

(In Thousands of New Taiwan Dollars) (In Thousands of New Taiwan Dollars) (In Thousands of New Taiwan Dollars) (In Thousands of New Taiwan Dollars)
Item 2022 2023 Ratio of increase
(decrease)
Financial
income and
expenses		 Net revenue 438,242 649,097 48.11%
Gross profit 240,564 446,054 85.42%

Net operating (loss) profit
14,509		 193,270 1232.07%
Interest income 4,029
15,525
285.33%
Interest expenses 1,248
1,822
45.99%
Profitability Return on assets (%) 6.60
17.01
157.73%
Return on equity (%) 8.13
23.55
189.67%

Ratio of net profit before
tax to paid-in capital (%)
11.76
43.49
269.81%
Net margin (%) 15.38
30.76
100.00%
Earnings per share (NT$) 0.95
3.00
215.79%

(4) R&D status:

In response to industry trends, the Company has always been focusing on the spirit of R&D; the R&D funding invested in 2023 was NT$152,224 thousand, representing an increase of NT$17,509 thousand (approximately 13%) from the R&D amount in 2022.

(In Thousands of New Taiwan Dollars) (In Thousands of New Taiwan Dollars) (In Thousands of New Taiwan Dollars)
Year
Item		 2022 2023
Research and development expenses 134,715 152,224
Net revenue 438,242 649,097
Ratio to net revenue 31% 24%

From May 2019 to March 2024, equipment successfully developed by the Company is as follows:

May 2018 Completed the R&D of Loop-O9500R PTN/SDH/SONET/PDH IMAP and added PTN10G Interface Card to support MPLS-TP and Carrier Ethernet for Packet Transport Network (PTN) services.

June 2018 Loop-AM3440 Access DCS-MUX passed the Alstom Systems India Private Limited Type Test and Factory Acceptance Test.

Loop-iNMS Integrated Network Management System supported the Loop-O9500R PTN10G card MPLS VPLS/VPWS circuit management module.

July 2018 Loop-inet Intelligent Network Element Management System (EMS) supported the TDM circuit diagnosis and management module.

August 2018 Completed the R&D of Loop-AM3430 Access DCS-MUX.

Completed the R&D of Loop-O9400R PTN/SDH/SONET ADM/TM and added PTN10G Interface Card to support MPLS-TP and Carrier Ethernet for Packet Transport Network (PTN) services.

September 2018 Completed the R&D of Loop-AM3440 ABRA card and added the support for the Voice Bridge function.

Completed the R&D of Loop-AM3440 Access DCS-MUX and added the support for the MQT1 board function.

Completed the Loop-G7860A mPTN MPLS/CE Packet Transport Network to support MPLS-TP and Carrier Ethernet for Packet Transport Network (PTN) services.

October 2018 Completed the R&D of Loop-AM3440 ABRA card for combination use with OCUDP card and added the support for the Data Bridge (MJU) function.

Completed the R&D of Loop-AM3440 ABRA for combination use with 12FXSA card and added the support for the Voice Conference function.

Loop-inet Intelligent Network Element Management System (EMS) supported the Loop-O9500R PTN10G card MPLS VPLS circuit management module.

4

November 2018 Completed the R&D of Loop-O9500R and added the support for the 4C37SFP LS-Fiber Optical interface card.

  • Completed the R&D of Loop-O9500R and added the support for the 8-port Gbe over SDH/SONET Interface Card with Switch (8GESW) interface card.

  • Completed the R&D of Loop-O9500R 6UDTEA interface card and added the support for the Mode 5 RS422 interface and Local Loopback/Remote Loopback functions.

  • Loop-O9500R passed the phase 1 plant acceptance test procedures for the RY MUX project of Taipower Company.

  • December 2018 Completed the R&D of Loop-AM3440-E IP/TDM DCS-MUX.

  • January 2019 Completed the R&D of Loop-O9610S-GE Gigabit Ethernet Electrical/Optical Converter.

  • February 2019 Completed the R&D of Loop-AM3440 CCPA Packet controller module with two Combo gbe (SFP/RJ45) interfaces for Dome uplink.

  • Completed the R&D of Loop-G7820 L2/L3 Intelligent Switch.

  • Loop-iNMS Integrated Network Management System supported the Loop-O9400R PTN10G card MPLS VPLS/VPWS circuit management module.

  • March 2019 Completed the R&D of Loop- IP6820 and added the support for the I4GEPOE+ interface, including 4 gbe ports, 2 dry contact ports, and IEEE802.3at poe + over 8 LAN ports.

  • April 2019 Loop-IP6704A TDMoEthernet passed the Alstom Systems India Private Limited Type Test and Factory Acceptance Test.

  • Completed the R&D of Loop-O9400R and added the support for the 8-port Gbe over SDH/SONET Interface Card with Switch (8GESW) interface card.

  • Completed the R&D of Loop-O9400R PTN10G card and added the support for the L3 function.

  • May 2019 Loop-IP6810, Loop-IP6820, and Loop-O9500R passed the

  • Kenya Power & Lightning Co. Ltd. Factory Acceptance Test.

  • Completed the R&D of Loop-O9400R and added the support for the 8-port Gbe over SDH/SONET Interface Card with Switch (8GESW) interface card.

  • Completed the R&D of Loop-O9400R PTN10G card and added the support for the L3 function.

  • Loop-iNET Intelligent Network Element Management System (EMS) supported the Loop-O9500R PTN10G card MPLS VPWS circuit management module and LoopAM3440 TTA card Protection Profile.

  • June 2019 Completed the R&D of Loop-AM3440 and added the support for the VoIPGA interface card.

  • Completed the R&D of Loop-O9550 and added the support for the VoIPGA interface card.

  • Loop-iNET Intelligent Network Element Management System (EMS) supported the Loop-O9500R PTN10G card MPLS VPLS circuit management module.

  • July 2019 Completed the R&D of Loop-O9400R and added the support for the PTnext interface card.

March 2020 Completed the R&D of the new model Loop-O9150S SDH STM-1 TM/ADM.

  • April 2020 Completed the R&D of the new product Loop-WDM1800 Wavelength Division Multiplexing Multi-Service Platform.

  • June 2020 Completed the R&D of the new Loop-O9500R-8GES16SWA board.

  • August 2020 Completed the R&D of Loop-IP6704A and added support for the M4E1 and ODP interface cards.

  • December 2020 Completed the R&D of new model Loop-IP6704A-DACS (Digital Access Cross Connect System (DACS).

  • December 2020 Completed the R&D of Loop-AM3440 8EMA/12FXSA/12FXOA/12MAGA OCUDP and supported the TELCO50 interface.

April 2021 Completed the R&D of new product Loop-AM3430 Access DCS-MUX.

June 2021 Completed the R&D of the new generation model of Loop-AM3440, including the new CCPB, supported Dome, TDMoIP and TDMoMPLS functions, and accommodated the interface cards of older models.

  • July 2021 Completed the R&D of Loop-iNMS, added the support for the Pseudowire Circuit Management (PWCKT), and provided Loop PTN networking management solutions.

  • December 2021 Completed the R&D of the new model Loop-G7820-24S and supported 8 x 1/10gbesfp+ports 24x1 Gbe SFP ports and 8 x 10/100M/1gberj45 ports.

5

January 2022 Completed the R&D of the new product Loop-WDM1800; the WDM module includes the following cards/boards:

Transponder Modules

Wavelength Division Multiplexing (Mux/Demux) Modules Optical Link Protection Modules Amplifier Modules Dispersion Compensation Modules (DCM) Optical Time-Domain Reflectometer (OTDR) Modules

May 2022 Completed the R&D of the new generation Dry Contact type C board, which may be used with Loop-O9500R PTN/SDH/SONET/PDH IMAP products.

September 2022 Completed the R&D of the new generation model of Loop-AM3440, including the new CCPB-8gehswa, supported Dome, TDMoIP and TDMoMPLS functions, and accommodated the interface cards of older models.

 Packet controller module

 Support cross-connect function

 4 x Gbe and 4 x FE/Gbe SFP interface with built-in L2 switch

 Supports SAToP, CESoPSN, and MEF-8

 Up to 64 pseudowires

 Supports SyncE September 2022 Completed the R&D of the new product Loop-AM3440-E IP/TDM DCS-MUX MPLSTP/CE SWITCH.

January 2023 Completed the R&D of the new board Muxponder, which can be used with LoopWDM1800.

May 2023 Completed the R&D of Loop-G7820 L2/L3 Intelligent Switch that supports Layer 3 functions.

May 2023 Completed the R&D of Loop-G7860A mptn MPLS/CE Packet Transport Network equipment that supports 6 port DS3 interface cards. July 2023 Completed the R&D of Loop-AM3430 Access DCS-MUX product, which can be used with 8SRU interface cards.

October 2023 Completed the R&D of the 12FXS02 and 12FXS03 audio interface card product, which can be used with the Loop-AM3440 Access DCS-MUX product. October 2023 Completed the R&D of the new product Loop-G7800 PTN MPLS/CE Packet Transport Network interface that supports high-speed 100G/10G/1G Ethernet, and accommodated the AM3440/O9500-PTN series interface cards. October 2023 Completed the R&D of the new CCPA02 control card for the Loop-O9500R PTN/SDH/SONET/PDH IMAP. January 2024 Completed the R&D of the Loop-AM3440 CCPB- 8gehswa and added support for MPLS-TP and CE functions.

The R&D Department completed a total of 10 brand-new and derived new products during the year, with products primarily focusing on inet, iNMS, IP, PDH, SDH, MPLS, and Dome. Apart from iNMS, G7860A, O9400R-PTN10G, O9500R-PTN10G and other series products, LoopG7800 is the future development focus. In accordance with the market demand, the Company will continue to develop new products and new technologies to satisfy customers' requirements.

Current status of existing products and new products of the Company and future sales application and development are as follows:

Access multiplexer series products:

Loop-AM3440 of the Company is widely adopted worldwide, including the power system, transportation, governmental and military communication network, and other markets in Taiwan. Its high reliability, stability, various access interfaces, and the application cards developed based on customers' application requirements allow Loop-AM3440 to continue to maintain the leading position in the access multiplexer market.

6

Broadband packet backbone networks have become popular; however, the tradition TDM access service for end equipment is still generally being used. In response to the actual requirements of the market, the Company developed cards that carry TDM via packet transport network by using the self-owned FPGA technologies to allow AM3440 to satisfy the point-to-point communication of access to TDM and IP-mixed networks. Meanwhile, we also tested and verified that AM3440 is able to satisfy the stringent requirements in terms of delay of the end operations in the packet networking environment with large-scale international companies. The outstanding performance and reliable quality will make it an indispensable access multiplexer for the new generation NGSDH and PTN backbone network.

Optical communication equipment:

For optical communication equipment, the Company primarily provides transmission communication equipment, telecommunication broadband products, optical fiber network access equipment, local end equipment, and other products; at present, the Company's optical communication transmission equipment continues to maintain its mainstream position.

The Company's optical communication transmission equipment continues to maintain its mainstream position. Loop-O9100, Loop-O93XX, Loop-O9400R, Loop-O9400S, Loop-O9500R, Loop-O9400 PTN10G, Loop-O9500 PTN10G, and other products will become the main force of the Company in the market. In addition, the development of optical communication products in recent years has turned from bottom speed, high speed, to high speed and large bandwidth. FOM products of low threshold are low speed. STM-16 products are high speed up to 2.5Gbps LoopO9400R and Loop-O 9500R will improve from STM-4 (a speed of 622Mbps) to STM-16 (a speed of 2.5Gbps) to align with the SDH international standards for optical fiber transmission equipment and packet transport network (PTN) with high speed and large bandwidth of up to 10Gbps. (PTN: Packet Transport Network). Furthermore, LOOP-AM 3440, one of the major sales products, was redesigned, and the SDH/SONET interface was added, and it became Loop-O 9550, the new generation SDH and IP-mixed equipment. Apart from this, the Company has completed the development of the new product PTN10G card for the Loop-O9500 PTN10G and O9400 PTN10G series products.

PTN transport equipment possesses a transfer capacity of up to 100G, is equipped with automated path routing ability, and provides multiple service integration platform interfaces that are organized based on customers' requirements for applications. The connection of optical fiber interfaces will be adopted to form the transmission relay to comprehensively integrate and accommodate various service interfaces and various functions for satisfying customers' requirements. This will allow the product lines of optical communication transmission equipment of the Company to become more comprehensive and allow it to provide total solutions as an optical communication transmission equipment supplier.

IP transmission equipment series products:

The Company has launched Loop-IP6704A/IP6702A/AM3440-E TDMoIP that can transmit T1, E1, and Voice signals on IP networks and Loop-IP 6416 Inverse Mux that can transmit IP data and Voice signals on PDH network. For Loop-IP 6704A products, we have successfully developed the increase in multiple different interface channels and added TDMoIP function cards for Loop-AM 3440 and Loop-O 9500. The Company directly developed TDM over Ethernet; under the segregation of adding the FPGA design, it maintained its advantages through maintaining the upgrades of product functions, uniqueness of customization, and the timeliness of time to market. The Company has always been attaching its attention to the development of new products. For the TDM over Ethernet product and equipment market, it is confident that it can develop products that compete with large-scale international companies; by doing so, it hopes to bring up the trend for the R&D capacity of the communication system industry in Taiwan to make further breakthroughs, and to secures a seat as a top-tier large-scale international company. In addition, the design of LOOP-IP6750 is the first network equipment of the Company that combines PDH E1, TDMoIP, Gigabit Ethernet, and IEEE 1588 V2 functions. The development of IP6750 not only satisfies the functional requirements of the third-generation ED. With our R&D experience accumulated over two decades, we decided to introduce the FPGA design to improve the flexibility for customization and functional upgrades of products in the future, which is the segregation with the design of large-scale companies at present. Due to the introduction of the FPGA design, we possess mobility, timeliness, and uniqueness of customization for the R&D of new functions in the future to satisfy the requirements of customers in the market. The Company

7

focused on the R&D of CO-end and CPE-end equipment. For the R&D segregation, apart from placing the standardized IC into the design, as the existing standards and protocols are not sufficient for the application of actual circuits and functions, peripheral circuit designs and the innovation of FPGA system functions are required to be introduced. The Company adopted the existing standards as the foundation and introduced the peripheral circuit design to create new functionality and innovation breakthroughs.

Corporate grade network management and integration solution:

With the booming development of network technologies and the constant new development of network management technologies, the heterogeneity, diversification, and complexity of network systems have gone far beyond the level that can be understood by network management professionals in the past. The third-generation network management system of the Company provides integrated smart network management solutions. Based on the logical layer network management structure formulated by ITU-T, the iNMS flagship network management system supports the newly launched MPLS-TP and PTN-10G innovative products and equipment, provides point-to-point operation planning, remote route building, built-in diagnosis, and other automated functions that can significantly reduce the costs of users generating from operating expenses and effectively improve the business execution efficiency. In addition, the developing inet network management system has low coupling and high integration features. We were contracted for the metro network management integration of Orlando and Tampa airports in the U.S., the parallel integrations of NEC train marks, and the CCTV safety control monitoring systems in Taiwan, providing comprehensive turnkey solutions for customers. The Company is the OEM/ODM network equipment and network management system supplier of GE in the U.S. (power applications account for approximately 50% of the total turnover of the Company). Apart from actively participating in material domestic and foreign power system projects leveraging its network management system, the Company has been selected as the supplier for the network management solutions of material transportation constructions (i.e., metro in Singapore and metro in Indonesia). For network element management, in response to the market trends, the Company has launched brand-new graphical network management setting tools to replace local craft terminal (LCT) setting tools in the form of orders in the past, providing convenient and friendly user experiences and operating environments for customers. Adhering to its reputation and faith as the top brand of network communication equipment in Taiwan, the Company seeks advances in the field of network management and has been actively pursing the improvement in the awareness of Taiwan in the international market.

4G LTE base station transmission equipment:

Customers of the Company are mostly from developing countries (i.e., India, Southeast Asia, and the Middle East); countries in such regions have an increasing demand for the communication equipment of the Company at present. Furthermore, the Company is actively developing smart network equipment management systems and IP transmission equipment to satisfy the requirements of the future market. Currently, the development of the MPLS-TP 10G carrier Ethernet equipment we invested in is completed, and we continue to explore relevant product lines. In the future, the Company will also make arrangements for the design of 5G communication products.

2. Summary of the Business Plan of the Year (2024)

(1) Business policy

The consolidated revenue in 2024 Q1 was NT$113,879 thousand, revenue decreased by 25% compared to the same period in the previous year, and the earnings per share was NT$0.63. The profit margin of Loop Telecommunication has been maintained stably above 50% since 2019, which is a relatively outstanding performance in the network and communication industry. With the effects achieved through focusing on the market in Taiwan and the continual growth in different regions, Loop Telecommunication has adopted global sales and arrangements, and the regional ratio of the overall revenue will become more comprehensive. In addition, we maintained favorable performance in terms of financial structure, solvency, accounts receivable turnover, and other financial indicators. With the stabilization of the pandemic, it is likely to maintain the growth in the European and American region as in prior years, and the development of the market in Southeast Asia and different regions has also recovered. Loop Telecommunication has long been cooperating with large-scale international SI companies to develop markets and new products, which is deemed as the market driver under the trend of the new norms.

8

  • (2) Estimated sales volume and its basis, and material production and marketing policy Due to the transition in the industry pattern of Loop, it will achieve the objectives of low costs and high performance, leveraging its product R&D capacity accumulated for nearly 30 years and through effective resource management. In recent years, we have promoted the use of MCC (Mission Critical Communication) in particular application fields, and there was a breakthrough reflected in our profit margin and overall performance.

  • For the business, there are 30 countries worldwide having business dealings with the Company. Benefiting from the recovery plan in Europe and the infrastructure act in the U.S., export sales accounted for approximately 80% of our revenue throughout the year. By industry, the power market accounts for 40%, and governmental agencies account for 30% of the total revenue. In the first quarter of 2024, 80% of our revenue was from 13% of countries having dealings with us. Among all 32 product lines, 80% of the revenue was from 10% of the sales products.

3. Future development strategies

The Company's key development project this year is the flagship Loop-G7800, a next-generation PTN high-bandwidth multi-functional transmission access equipment. It is a major highlight of Loop’s strong entry into the MCC market. The Loop-G7800 is based on The Company's years of accumulated and continuously innovative technology. At the same time, the Company has invested heavily in developing a source code management integrated automated testing platform to enhance quality management in every stage from R&D to production. In addition to serving as a backbone node, the G7800 also supports over a dozen types of interface cards that accommodate multiple rates of service. This enables support for a range of network interfaces from traditional low-speed 64K circuits to next-generation critical mission backbone requirements of 100G packet transmission networks, all within a single system. Furthermore, configurations can be tailored according to customer applications. The comprehensive feature allows customers to have more flexibility for network planning in the future; regardless of phased budgeting projects increased based on requirements or the new era overall transmission network solutions that wish to be settled at one go, the Loop-G7800 product line will be able to satisfy such customers. At present, multiple partners have been actively inquiring about the launch of G7800.

Except for the major backbone and access network product series used worldwide, Loop has explored Information Security System (ISS), Artificial Intelligence (AI), iNMS-Big Data Analysis/AI, automatic system diagnosis and repair, inet-Circuit Creation/Auto-Diagnostic, corporate new era office network, corporate 5G private network, and other new technologies in recent years to expand into new markets of corporate and governmental information safety network overall solution development. In recent years, due to frequent information security events, the requirements for information of corporations and the government have been increasing. Loop has obtained the ISO27001 information security certification and performed a firmware upgrade for different products catering to the MCC market to support FIPS 140-3. Meanwhile, the Company also plans to launch the Loop-ISS2150 mission-critical network firewall and Loop-ISS2110 government configuration baseline network setting management system to assist customers in establishing the optimized MCC information safety protection environment.

Looking into the year ahead, the Company will continue to launch the following products and services

  1. Primarily used in the MCC market

  2. High-bandwidth multi-functional transmission access equipment G7800:

  3. Features electronic circuit simulation functions. Circuit switching matrix card G7800-XCU interface card with STM-64/OC-192 capacity

  4. G7800-CC4 main control card with 600G-level switching capability

  5. The GFEO 10G interface card supports L2 link-layer and L2.5/L3 end-to-end encryption transmission technologies

  6. The GFE-poe Ethernet power sourcing equipment (PSE) interface card supports specifications such as poe/poe+/poe++

  7. The B2G5-2eos interface card supports the conversion of Ethernet packets from SDH/SONET to PTN protocols

  8. The MXP-10GADM interface card supports OTN optical channel grooming capability

  9. The TE1-CEM interface card supports high-port density E1/DS1 circuit emulation

  10. The TE3-CEM interface card supports high-port density E3/DS3 circuit emulation

9

  1. Solutions primarily used in the conversion for TDM transmission and packet switching transmission

  2. The O9500R-8GES16SWA interface card supports the functionality of multiple virtual connection groups

  3. The O9500R-PTN100G interface card has a switching capability at the 400G level

  4. The O9500R-XGEO interface card supports multi-port 10G expansion capability with encryption transmission support

  5. Inet network management system - Circuit management and diagnostic module

  6. Solutions primarily used in exclusive MCC's 5G for enterprises

  7. MCC 5G CPE corporate and core network service

  8. Information security solutions primarily used in new-generation corporate offices

  9. INMS and inet network management systems - AI intelligent network management operation framework

  10. Next Generation Enterprise LAN Solution ISS2180 Next Generation Secured

  11. Office Networking Solution

  12. Iiot and video monitoring equipment iot0510 outdoor sensors

  13. OT operating technology information security equipment ISS2150 MCC-FW

  14. Government Configuration Baseline Security Management System ISS2110 GCB-NE, GCB-Linux

For strategies in the future market, the MCC market is enormous and requires customized overall solutions. At present, many countries have initiated dedicated acts for major infrastructure. Loop's network transmission equipment and solutions are highly competitive. With the Company’s international partners and local system integration suppliers, it occupies a leading position in the MCC overall solution market. The next step is to expand the Company’s market presence by actively participating in major communication exhibitions held worldwide and organizing product seminars. Through showcasing the performance and features of new Loop products, the Company aims to increase exposure and enhance brand visibility.

Regarding the marketing strategy for sharing the experience of the successful new backbone transmission case of Loop Telecommunications with the international society, it may develop new customers and spare no effort in creating critical new customer groups. In the MCC business, annual service revenue is also one of the main sources of income alongside product/solution sales Loop Telecom’s team will develop a vertical integration strategy to target international customers for maintenance service revenue. This is expected to generate more orders for the company and boost its operational performance. Combining the MCC networking product portfolio will enhance its utilization of automated testing systems under the new business. The niche of integrating the new G7800 with various products will create a globally leading product, which is likely to become the growth focus for operations in the future. At present, Loop Telecommunication is one of the top three companies for MCC solutions around the world. Based on the existing foundation, the Company continues to reinforce its management and makes constant efforts by adhering to the philosophy of continuing to develop new products and explore new markets. In the future, the Company will become a leader, grasp business opportunities, create excellent performance, and continues to strive for the maximized operating performance for all shareholders.

4. Effects of the external competitive environment

During the period of uncertain prospects due to the sluggish economy in the external environment, the Company continued to strive to achieve its objective of annual growth for different operations. In 2023, 80% of the revenue came from the 9% of countries having dealings with the Company. Among all 27 product lines, 80% of the revenue was from 12% of the sales products. Adhering to the continuous development of new products and new markets is the way to maintain competitive. In terms of market and industry, we have achieved the effects of dispersed revenue and healthy development in regions worldwide. Certain competitors within the industry exited the market successively, and the dependence of existing customers on Loop has increased instead of decreased.

10

5. Effects of the regulatory environment and macroeconomic environment

The management team has been keeping abreast of policies and laws, and regulations that may affect the business and operations of the Company. In 2023, changes in relevant laws and regulations had no material effect on the Company's operations.

We wish you, ladies and gentlemen, Good health and the best of luck.

Chairman: Yeh Maw-Lin

President: Yeh Maw-Lin

Chief Accountant: Chang Xiao-Ling

11

(II) Company Profile

1. Establishment Date

December 3, 1991 Address and phone number of headquarters, branch offices and plants Headquarter: 6F, No.8, Xin'an Road, Hsinchu Science Park Tel.: (03) 5787696 Plant: 7F, No.8, Xin'an Road, Hsinchu Science Park Tel.: (03) 5787696 Taipei Office: 6F, No.36, Alley 38, Lane 358, Ruiguang Road, Neihu District, Taipei City Tel.: (02) 26590399 Tainan Office: 10F, No.88, Zhongshan Road, West Central District, Tainan City Tel.: (06) 2226860

2. Company History

Year/month
July 1991
December 1991
February 1992
April 1992
November 1992
February 1993
April 1993
November 1993
December 1993
June 1994
August 1994
September 1994
February 1995
March 1995		 Milestone
With the approval of the Science Park Bureau, the preparatory office of the Company
applied with the Bureau to invest in the establishment of "Loop Telecommunication
International, Inc." in May 1991.
Rented a plant at 1F, No.11, Gongye East 9th Road, Hsinchu Science Park.
Formally established Loop Telecommunication International, Inc..
The registered capital was NT$225 million.
The paid-in capital was NT$56.25 million.
Performed a capital increase in cash of NT$9.9 million.
Formally commenced feeding and pilot production.
The "general and private line user telemetering maintenance terminator" received
innovative technology research plan subsidies from the Park Bureau.
Performed a capital increase in cash and from technology contribution of NT$53.85
million.
The "network access equipment" received crucial part and component R&D product
subsidies from the Park Bureau.
Rented a plant at 2F, No.22, Zhangye 2nd Road, Hsinchu Science Park.
The "subtitle telephone and multi-function front-end processor" received innovative
technology research plan subsidies from the Park Bureau.
The "smart high-speed digital network service system" received innovative technology
research plan subsidies from the Park Bureau.
The "second generation digital wireless CT2 base and handphone" received the crucial
par and component R&D product subsidies from the Park Bureau.
The "T-2200 network access equipment" produced by the Company passed the
production capacity inspection of the Telecommunications Bureau in Taiwan.
The "high-speed T1/E1 digital network access equipment" produced by the Company
won the Innovative Product Award from the Science Park in 1994.
Our phone telemetering interface processors obtained a patent from the Bureau of
Standards, Metrology and Inspection, Ministry of Economic Affairs.
FT1 CSU/DSU 100/200 won the Excellence Award from the Ministry of Economic
Affairs.

12

Year/month
May 1995
June 1995
August 1995
April 1997
August 1997
September 1997
December 1997
May 1998
July 1998
November 1998
January 1999
July 1998
June 1999
September 1999
November 1999
December 1999
March 2000
April 2000
May 2000
August 2000
September 2000
December 2000		 Milestone
The testing method of our high-speed data transmission machine obtained a patent
from the Bureau of Standards, Metrology and Inspection, Ministry of Economic
Affairs.
Passed the ISO-9001 quality assurance certification.
The "frame-relay transmission network equipment with data compression functions"
received the crucial par and component R&D product subsidies from the Park Bureau.
The "European high-speed symmetric user line transmission equipment" received
innovative subsidies.
The "IDSL high-speed multiplexer" received innovative subsidies.
Performed a capital increase in cash and from technology contribution of NT$75
million, and the paid-in capital became NT$195 million.
Became a public company.
Re-elected Directors and supervisors, and Mr. Jin Shi-Tian was newly elected.
Completed the R&D of "European E1 secured communication transmission
equipment" and obtained innovative technology subsidies from the Park Bureau.
E1200 obtained the CE168X and BABT certifications.
The Ministry of Economic Affairs approved investments in Tianjin Xingtong and
Hangzhou Xingtong in Mainland China via a business in a third-party region.
Completed the R&D of the "multi-media consolidation time slot exchanger" and
received the SME R&D promotion product subsidies from the Ministry of Economic
Affairs.
The registered capital was NT$365 million.
The "corporate Internet telephone and data system" received the dominating new
product development subsidies from the Industrial Development Bureau, Ministry of
Economic Affairs.
Performed a capital increase in cash and from technology contribution of NT$30
million and a capital increase from earnings in 1998 of NT$65 million, and the paid-in
capital became NT$290 million.
Entered into a plant construction contract with Futsu Construction Co., Ltd.; the
Company possesses a self-built plant of 2,200 pings.
Received the Rising Star Award from the Asia Pacific Industry Research and
Development Fund.
Received the mentoring program subsidiaries for the "CE label" of industrial products
from the Industrial Development Bureau, Ministry of Economic Affairs.
Rated as a "level A" company in terms of technology management and financial
position by the Ministry of Economic Affairs.
LOOP-4200 products won the Excellence Award from the Ministry of Economic
Affairs.
The Ministry of Economic Affairs approved investments in Zhejiang Quark Software
Co., Ltd. In Mainland China via a business in a third-party region
The Ministry of Economic Affairs approved investments in Tianjin Xingtong Smart
Instruments Co., Ltd. In Mainland China via a business in a third-party region.
The registered capital was NT$471.6 million.
The SFC approved the shares of the Company to be traded on the Taipei Stock
Exchange.
Performed a capital increase from earnings in 1999 of NT$101.65 million, and the
paid-in capital became NT$391.65 million.
Received the 9th National Award of Outstanding smes.
The self-built plant of 2,200 pings was completed.
IMAP passed the NEBS certification of the U.S..

13

Year/month
February 2001
March 2001
April 2001
June 2001
August 2001
September 2001
October 2001
December 2001
June 2002
August 2002
November 2002
September 2003
November 2004
June 2006
December 2006
June 2007
August 2007
December 2007
August 2009
October 2009
June 2000		 Milestone
Our shares were listed on tpex.
The "Loop-V 4200-9" obtained the EN60950, UL1950, and CSA22.2 certifications.
The "data and digital audio message identification method" obtained a certification
from the United States Patent and Trademark Office.
The "Loop-V 4200-28" obtained the NEBS: GR-63-Core/ESU certification.
The "Loop-V 4200-28" obtained the NEBS: GR-1089-CORE / Telecom, GR-63-
CORE / ESU, and EMC certifications.
Performed a capital increase from earnings in 2000 of NT$130.35 million, and the
paid-in capital became NT$522 million.
The "Loop-H3900" obtained the India Interface Approval Certificate.
Loop-V 4200-28 IMAP won the 8th Taiwan smes Innovation Award.
Won the 9th Industrial Technology Advancement Award from the Ministry of
Economic Affairs.
Won the Excellent Company Innovative Product Award of the Science Park
The "network access equipment with IP-VPN" received innovative technology
subsidies from the Park.
Loop-V 4200-28 IMAP won the Innovative Product Award of the Science Park in
2001.
The Ministry of Economic Affairs approved investments in Suzhou Loop Co., Ltd. In
Mainland China via a business in a third-party region.
The SFC approved the shares of the Company to be transferred from the Taipei Stock
Exchange to the Taiwan Stock Exchange for trading.
The "high-density optical fiber time slot exchange equipment" received the Innovative
Technology R&D Award from the Hsinchu Park Bureau.
Issued the first tranche of secured domestic convertible corporate bonds.
The "EFM access network system and crucial module vertical integration technology
development project" obtained funding and subsidies under the science R&D project of
the Ministry of Economic Affairs.
Completed the R&D of the second generation C5500 Mizar Controller and obtained
the certification from Chunghwa Telecom.
Completed the development of Loop-H 3308-4 multi-wire ultra-broadband to transmit
10/100 M Ethernet/IP and a patent application had been made for the technology,
which is the first in Taiwan.
Purchased the Taipei Neihu Plant of a total of 448m2 to establish the second R&D
center.
Purchased the 6th floor of the building of a total of 3,129m2 to expand the production
capacity.
Acquired the equity of Tianjin Loop Electron Technology Co., Ltd. From the initial
shareholders, and the equity held increased from 50% to 75%.
Issued the second tranche of employee stock options in the amount of 2,000 thousand
shares.
Sold 649 thousand treasury shares to employees.
The Loop-O 9400-6R STM-16/OC-48 high-speed interface has a speed of up to
2.5Gbps, and the product won the "Hsinchu Science Park 2009 Product Innovation
Award."
Completed the Integrated Network Management System (iNMS).
The Loop-O 9340 LEAPS product won subsidies from the "Hsinchu Science Park
Foundation Solidification and Advancement Research Project Subsidized by the
National Science and Technology Council, Executive Yuan."
Chairman Jin Shi-Tian's term of office expired, and the Board elected Mr. Yeh Maw-
Lin as the new Chairman.

14

Year/month
January 2011
February 2011
March 2011
April 2011
May 2011
July 2011
July 2011
September 2011
October 2011
October 2011
February 2012
March 2012
April 2012
May 2012
June 2012
July 2012
August 2012
September 2012
November 2012
March 2013
April 2013
May 2013		 Milestone
Completed the R&D of Loop-AM 3440 and added the 1FOMA interface.
Completed the R&D of Loop-W 8220 2.5/3.5ghz Outdoor wimax CPE.
Completed the R&D of Loop-ACC-RSSI-Meter Receiver signal strength indicator
tool.
Completed the R&D of Loop-IP 6702 to adopt the use of IP to transmit traditional
E1/T1 communication signals.
Completed the R&D of Loop-O 9500 and added the MAG interface.
Completed the R&D of Loop-W 8140 wifi integration wireless system that supports
the IEEE 802.11a/b/g/n standards.
Completed the R&D of the second generation Loop-IP 7920 Gbps Ethernet
demarcation equipment.
The Loop-IP 7920 Gbps Ethernet demarcation equipment ring application equipment
and development plan received the subsidies under the "Small-scale Enterprise
Innovative R&D Project of the Ministry of Economic Affairs."
Completed the R&D of Loop-ACC RSSI Meter.
Completed the R&D of Loop-AM 3440 and added the PLM card.
Completed the R&D of Loop-V 4200-9 and added the PLM card.
Completed the R&D of Loop-G 1701 Powerline 500M Wall Plug Ethernet Bridge.
Completed the R&D of Loop-C 5600 and added the H3304RA card.
Completed the R&D of Loop-H 3310 2BRH interface.
Completed the R&D of Loop-W 8210 wimax 3.5G Outdoor BS/SS.
Completed the R&D of Loop-IP 6820 Self-Healing Ring NTU.
Completed the R&D of Loop-IP 7920 Optical Bypass Module.
Completed the R&D of Loop-O 9150S SDH STM-1 TM/ADM.
Completed the R&D of Loop-AM 3440 and added the 8UDTE card.
Completed the R&D of Loop-W 8150 wifi integration wireless system that supports
the IEEE 802.11a/b/g/n standards.
Completed the R&D of Loop-W 8210 wimax 5.8G Outdoor BS/SS.
Completed the R&D of Loop-inet web-based intelligent network management system.
Completed the R&D of Loop-O 9500 and added the 8DBRA card.
Completed the R&D of Loop-IP 6510-LN Multiple WAN Router.
The Ministry of Economic Affairs approved an indirect capital increase in Chongqing
Loop Technology Co., Ltd. In Mainland China via a business in a third-party region,
and the share capital increased from US$2.1 million to US$2.4 million.
Completed the R&D of Loop-AM 3440-8UDTEA card.
Completed the R&D of Loop-V 4150 high capacity DS0 Cross Connect System.
Completed the R&D of Loop-V 4150 Relay Protection Shelf that supports 1:N board
protection.
Completed the R&D of Loop-O 9500 and added the 3E1 card.
Completed the R&D of Loop-IP 6702 and added the IP optical port transmission of
E1/T1 communication signals.
Completed the R&D of Loop-E 15002S and added the 8-channel Alarm Input
interface.
The Loop-G 7860 (general label PTN project) received "subsidies under the
Dominating New Product Development Project" of the Institute for Information
Industry.

15

Year/month
May 2013
June 2013
July 2013
August 2013
September 2013
October 2013
November 2013
December 2013
February 2014
March 2014
April 2014
May 2014		 Milestone
Completed the R&D of Loop-IP 6820 Self-Healing Ring NTU and added the DTE
(RS232/RS422/RS485) interface.
Completed the R&D of Loop-inet web-based intelligent network management system
that supports traditional Chinese and simplified Chinese interfaces.
Completed the R&D of Loop-O 9500 and added the CONF card.
Completed the R&D of Loop-IP 7925 Carrier Ethernet Transport with CFM & ERPS.
Completed the R&D of Loop-V 4150 and added the 3 port T3 card with MX3
functions.
Completed the R&D of Loop-O 9500 and added the 8UDTE card.
Completed the R&D of Loop-O 9550 SDH/SONET IMAP.
Completed the R&D of Loop-W 8171 2.4G wifi Module.
Completed the R&D of Loop-inet web-based intelligent network management system
that supports the File Transfer Tool to provide users with convenient equipment
software and equipment backup with an upgraded interface.
Completed the R&D of Loop-O 9500 and added the DC 48V~125V power module.
Completed the R&D of Loop-inet web-based intelligent network management system
that supports Graphical Cross Connection Tool to provide users with convenient
graphical interface settings and circuit inquiries.
Purchased the Tainan Plant of a total of 940.43m2 to use as an R&D center.
Completed the R&D of Loop-AM 3440 and added the Echo Canceller (ECA) card.
Completed the R&D of Loop-AM 3440 8UDTE card and added the Terminal Server
and Omnibus functions.
Completed the R&D of Loop-inet web-based intelligent network management system
that supports network system backup and protection functions.
Completed the R&D of Loop-IP 6610 that supports the industry-grade working
temperature of -40oc~70oc.
Completed the R&D of Loop-IP 6763 to maximize the support for 512 Pseudowires.
Completed the R&D of Loop-O 9550-CGC 3U Chassis.
Completed the R&D of Loop-ACC-RPT Radio Planning Tool.
Completed the R&D of Loop-V 4150 3 port T3 card and added the 1:1 protection
functions.
Completed the R&D of Loop-AM 3440 and added the V.110 card.
Completed the R&D of Loop-iNMS integrated network management system that
supports the Pseudowire Circuit Management function.
Completed the R&D of Loop-O 9550-CGD 2U Chassis.
Completed the R&D of Loop-O 9400R-CHAA 6U Chassis that supports up to 2.5G
Mbps mapping bandwidth and the new card 4GESW.
Completed the R&D of Loop-O 9550 and added the Fiber Optical (FOM) card.
Completed the R&D of Loop-AM 3440 and added the Analog Bridge (ABRA) card.
Completed the R&D of Loop-inet integrated network management system that
supports NE Firmware Upgrade and Configuration Upload/Download functions and
Auto Discovery functions.

16

Year/month
July 2014
September 2014
November 2014
December 2014
January 2015
February 2015
March 2015
April 2015
May 2015
June 2015
July 2015
August 2015
October 2015		 Milestone
Completed the R&D of Loop-AM 3440 and added the Mini LS-Fiber Optical (M1C37)
card.
Completed the R&D of Loop-AM 3440 and added the ixc3440 Craft GUI Mapping
Tool.
Completed the R&D of Loop-AM O9400R and added the 4GESW card.
Completed the R&D of Loop-O 9550 and added the Mini LS-Fiber Optical (M1C37)
card.
Completed the R&D of Loop-V 4150 and added the STM-1/OC3 (B155) card.
Completed the R&D of Loop-W 8140 and added the Router function and the built-in
Iperf Throughput Diagnostic function.
Completed the R&D of Loop-inet integrated network management system that
supports Cross Connect Mapping Export/Import functions.
Completed the R&D of Loop-IP7930 Ethernet Demarcation Device (EDD).
Completed the R&D of Loop-inet integrated network management system that
supports ecfm functions and Log Server functions.
Completed the R&D of Loop-O9170 SDH STM-1 MUX system.
Completed the R&D of Loop-AM3440 8UDTE card to support Half Duplex mode
under the Terminal Server and Omnibuse functions.
Completed the R&D of Loop-IP6320 L2/L3 Intelligent Switch.
Completed the R&D of Loop-W8150 802.11 a/n and b/g/n Wireless Device.
Completed the R&D of Loop-IP6830 Industrial Ethernet Device.
The Tainan R&D Center is formally put into use.
Completed the R&D of Loop-AM3440 and added the 3T1 card.
Completed the R&D of Loop-inet integrated network management system that
supports the Loop-IP6320 management functions and provides Loop-O9170 Graphical
Cross connection tool.
Completed the R&D of the introduction tools for the Loop-inet integrated network
management system for users to carry out circuit marker and Performance
management.
Completed the R&D of the full introduction of the Loop-inet integrated network
management system to the loopview network management System.
Completed the R&D of Loop-O9170 SDH STM-1 MUX and added RS232/RS485 and
FXS/FXO/E&M interfaces to the TG4/TG5 expansion card slot.
Completed the R&D of Loop-AM3440 and added the SDA-24Vdc/-48Vdc (-18 to -75
Vdc) 150W power module.
Completed the R&D of Loop-IP6330 gbe Intelligent Switch.
Completed the R&D of Loop-AM3440 Dome card and added the MEF8 function.
Completed the R&D of Loop-O9550 and added the 6-channel RS232 with V.110
encoding (6RS232A) card.
Completed the R&D of Loop-O9400R Fanless CHAA Chassis.
Completed the R&D of Loop-O9400R and added the tdmog card.
Completed the R&D of Loop-O9500R and added the STM-1/4/16 (OC-3/12/48)
Controller (CC16).
Completed the R&D of Loop-G7860 mptn MPLS/CE Packet Transport Network
equipment.

17

Year/month
November 2015
December 2015
January 2016
February 2016
April 2016
May 2016
June 2016
July 2016
August 2016
September 2016
October 2016
November 2016
December 2016
January 2017		 Milestone
Completed the R&D of Loop-AM3440 and added the Mini Quad E1/T1 (4-channel
E1/T1 interfaces) card (M4TE).
Completed the R&D of Loop-iNMS Integrated Network Management System and
added the Pseudowire Circuit Management Subsystem, including Pseudowire Circuit
for TDMoIP, Dome and MPLS-TP.
Completed the R&D of IP7930-B and added 2 pairs of Ethernet Bonding ports.
Completed the R&D of Loop-AM3440 and added the Transfer Trip card (TTA).
Completed the R&D of Loop-O9500R and added the Fanless CHAA Chassis.
Completed the R&D of Loop-O9500R and added the 6-channel UDTEA (6UDTEA)
card.
Completed the R&D of Loop-G7860 and added Two port 10gbe cards with SFP+
interfaces (2XG).
Completed the R&D of Loop-O9400R and added the Multiplex Section-Shared
Protection Rings (MS-springs) function.
Completed the R&D of Loop-W8230 Packet Microwave Radio equipment.
Completed the R&D of Loop-G7860 and added the STM-1/OC3 or STM-4/OC12
interfaces (B16) card.
Completed the R&D of Loop-inet and added the TDM tools.
Completed the R&D of Loop-iNMS, added the Pseudowire management tools, and
provided the Loop-G7860 PTN product integration management platform.
Completed the R&D of Loop-AM3440 and added the 6-channel G.703 (6CDA) card.
Supported Co-directional and Contra-directional models.
Completed the R&D of Loop-AM3440 6-channel UDTEA (6UDTEA) cards and added
X.21, RS422, RS232, and V110 sub-rate interfaces.
Completed the R&D of Loop-IP6702A TDMoEthernet equipment.
Completed the R&D of Loop-O9400R and added the STM16/OC-48 Interface Module
(B2G5) card.
Completed the R&D of Loop-inet and added the third-party equipment connection
interface; the Intrusion Alarm System (IAS) utilizes an alert to trigger CCTV; when an
alert occurs, the image of CCTV will immediately show on the CCTV management
interface.
Completed the R&D of Loop-O9340S Multi-Services Gigabit FOM that complied with
the information safety requirements of Chunghwa Telecom and passed the tests of the
Chunghwa Telecom laboratories.
Completed the R&D of Loop-O9500R SDH/SONET IMAP that supports 4 port gbe
card (4GESW).
Completed the R&D of Loop-G7860 mptn MPLS/CE Packet Transport Network that
supports 8 port gbe/FE card with SFP interfaces (8SFP)
Completed the R&D of Loop-LCT Graphical Configuration Tool.
Completed the R&D of Loop-IP7930T Ethernet Demarcation Device that supports the
real-time packet monitor functions.
Completed the R&D of Loop-AM3440 3E1 card and added E1 1+1 protection
functions.
Completed the R&D of Loop-AM3440 6-channel UDTEA (6UDTEA) card and added
V54 Loopback functions to V.35/V.36/EIA530/RS449 interfaces.

18

Year/month
February 2017
April 2017
July 2017
August 2017
September 2017
October 2017
December 2017
January 2018		 Milestone
Completed the R&D of Loop-AM3440 8-channel Data Bridge Card (6UDTEA) card
and added the UART interface.
Completed the R&D of Loop-AM3440 12FXOA Voice Card.
Completed the R&D of Loop-G7860 mptn MPLS/CE Packet Transport Network
equipment that supports fan-free designs and complies with the hardening temperature
specifications (-20 to 55 ºc).
Completed the R&D of Loop-IP6320A L2/L3 Intelligent Switch.
Completed the R&D of Loop-O9500 that supports the Transfer Trip Card (TTA).
Completed the R&D of Loop-O9550 that supports the Quad FXSA Voice Card
(QFXSA).
Completed the R&D of Loop-O9550 that supports the Quad E&M Voice Card
(QEMA).
Completed the R&D of Loop-IP6702A TDMoEthernet and added the T1 interface.
Completed the R&D of Loop-IP6704A TDMoEthernet and added T1, Quad FXSA
(QFXSA), and Quad FXO (QFXO) Voice interfaces.
Completed the R&D of Loop-inet, which supports Language Localization Tools to
provide multiple language translation tools.
Completed the R&D of Loop-O9500 and added the 6-channel G.703 (6CDA) card.
Completed the R&D of Loop-O9500 and added the 6-channel UDTEA (6UDTEA)
card.
Completed the R&D of Loop-LCT Graphical Configuration Tool to provide simple
graphical management tools.
Completed the R&D of Loop-O9500 and added the B2G5 STM16/OC-48 card.
Completed the R&D of Loop-AM3440 and added the 4-port Magneto (QMAGA) card.
Completed the R&D of Loop-IP6750 Service Aggregation & Access Device. Including
E1/T1 and Gigabit Ethernet tributary that supports MEF-8 cesoeth, synce and
IEEE1588v2 Precision Timing, G.8031 Ethernet Linear Protection Switching, and a
RFC2544 built-in traffic generator, and passed the CE 1.0 MEF certification.
Completed the R&D of Loop-inet that supports IP6750 equipment and provides
management method of point-to-point and point-to-multiple points.
Completed the R&D of Loop-AM3440 and added the CCB.
Completed the R&D of Loop-O9400R SDH/SONET ADM/TM and added the CHPA
frame and CCPA to support the PTN10G board and accommodate older boards.
Completed the R&D of Loop-O9500R PTN/SDH/SONET/PDH IMAP and added the
CHPA frame and CCPA to support the PTN10G board and accommodate older boards.
Completed the R&D of Loop-IP6340 24 Giga+4 1000 SFP Ports Smart Managed
Switch.
Completed the R&D of Loop-O9500R PTN/SDH/SONET/PDH IMAP and added the
Transfer Trip Card (TTA).
Completed the R&D of Loop-O9550 SDH/SONET IMAP and added the 6-port
Universal Data Interface Card (6UDTEA ).
Completed the R&D of Loop-O9550 SDH/SONET IMAP and added the Transfer Trip
Card (TTA).
Completed the R&D of Loop-AM3440 and added the TDMoEa Interface Card.
Completed the R&D of Loop-AM3440 and added the 12 port Magneto Interface Card
(12MAGA).

19

Year/month
March 2018
April 2018
May 2018
June 2018
July 2018
August 2018
September 2018
October 2018
November 2018
December 2018
January 2019
February 2019		 Milestone
Completed the R&D of Loop-AM3440 TTA and added the support for the multiplex of
all four inputs into one 64k channel function.
Completed the R&D of Loop-IP6820 and added the I4DTEISO Card that supports 4
DTE (RS232) ports with isolated circuit, RJ45 interfaces and 2 Dry Contact ports
Completed the R&D of Loop-AM3440 6UDTEA card and added the support for the
Through Clock function.
Completed the R&D of Loop-AM3440 ABRA card and added the support for the Data
Bridge function.
Completed the R&D of Loop-IP6704A and added support for the MEF8 and synce
functions.
Completed the R&D of Loop-O9500R PTN/SDH/SONET/PDH IMAP and added
PTN10G Interface Card to support MPLS-TP and Carrier Ethernet for Packet Transport
Network (PTN) services.
Loop-AM3440 Access DCS-MUX passed the Alstom Systems India Private Limited
Type Test and Factory Acceptance Test.
Loop-iNMS Integrated Network Management System supported the Loop-O9500R
PTN10G card MPLS VPLS/VPWS circuit management module.
Loop-inet Intelligent Network Element Management System (EMS) supported the
TDM circuit diagnosis and management module.
Completed the R&D of Loop-AM3430 Access DCS-MUX.
Completed the R&D of Loop-O9400R PTN/SDH/SONET ADM/TM and added
PTN10G Interface Card to support MPLS-TP and Carrier Ethernet for Packet Transport
Network (PTN) services.
Completed the R&D of Loop-AM3440 ABRA card and added the support for the Voice
Bridge function.
Completed the R&D of Loop-AM3440 Access DCS-MUX and added the support for
the MQT1 board function.
Completed the Loop-G7860A mptn MPLS/CE Packet Transport Network to support
MPLS-TP and Carrier Ethernet for Packet Transport Network (PTN) services.
Completed the R&D of Loop-AM3440 ABRA card for combination use with OCUDP
card and added the support for the
Data Bridge (MJU) function.
Completed the R&D of Loop-AM3440 ABRA for combination use with 12FXSA card
and added the support for the Voice Conference function.
Loop-inet Intelligent Network Element Management System (EMS) supported the
Loop-O9500R PTN10G card MPLS VPLS circuit management module.
Completed the R&D of Loop-O9500R and added the support for the 4C37SFP LS-
Fiber Optical interface
Card.
Completed the R&D of Loop-O9500R and added the support for the 8-port gbe over
SDH/SONET Interface Card with Switch (8GESW) interface card.
Completed the R&D of Loop-O9500R 6UDTEA interface card and added the support
for the Mode 5 RS422 interface and Local Loopback/Remote Loopback functions.
Loop-O9500R passed the phase 1 plant acceptance test procedures for the RY MUX
project of Taipower Company.
Completed the R&D of Loop-AM3440-E IP/TDM DCS-MUX.
Completed the R&D of Loop-O9610S-GE Gigabit Ethernet Electrical/Optical
Converter.
Completed the R&D of Loop-AM3440 CCPA Packet controller module with two
Combo gbe (SFP/RJ45) interface for Dome uplink.
Completed the R&D of Loop-G7820 L2/L3 Intelligent Switch.
Loop-iNMS Integrated Network Management System supported the Loop-O9400R
PTN10G card MPLS VPLS/VPWS circuit management module.

20

Year/month
March 2019
April 2019
May 2019
June 2019
July 2019
March 2020
April 2020
June 2020
August 2020
December 2020
December 2020
April 2021
June 2021
July 2021
December 2021
January 2022		 Milestone
Completed the R&D of Loop- IP6820 and added the support for the I4GEPOE+
interface, including 4 gbe ports,
2 dry contact ports, and IEEE802.3at poe + over 8 LAN ports.
Loop-IP6704A TDMoEthernet passed the Alstom Systems India Private
Limited Type Test and Factory Acceptance Test.
Completed the R&D of Loop-O9400R and added the support for the 8-port gbe over
SDH/SONET
Interface Card with Switch (8GESW) interface card.
Completed the R&D of Loop-O9400R PTN10G card and added the support for the L3
function.
Loop-IP6810, Loop-IP6820, and Loop-O9500R passed the Kenya Power & Lightning
Co.Ltd Factory Acceptance Test.
Completed the R&D of Loop-O9400R and added the support for the 8-port gbe over
SDH/SONET Interface Card with Switch (8GESW) interface card.
Completed the R&D of Loop-O9400R PTN10G card and added the support for the L3
function.
Loop-inet Intelligent Network Element Management System (EMS)
Support Loop-O9500R PTN10G card MPLS VPWS circuit management module and
Loop-AM3440 TTA card Protection Profile.
Completed the R&D of Loop-AM3440 and added the support for the voipga interface
card.
Completed the R&D of Loop-O9550 and added the support for the voipga interface
card.
Loop-inet Intelligent Network Element Management System (EMS) supported the
Loop-O9500R PTN10G card MPLS VPLS circuit management module.
Completed the R&D of Loop-O9400R and added the support for the ptnext interface
card.
Completed the R&D of the new model Loop-O9150S SDH STM-1 TM/ADM.
Completed the R&D of the new product Loop-WDM1800 Wavelength Division
Multiplexing Multi-Service Platform.
Completed the R&D of the new Loop-O9500R-8GES16SWA board.
Completed the R&D of Loop-IP6704A and added support for the M4E1 and ODP
interface cards.
Completed the R&D of new model Loop-IP6704A-DACS (Digital Access Cross
Connect System (DACS).
Completed the R&D of Loop-AM3440 8EMA/12FXSA/12FXOA/12MAGA/OCUDP
And supported the TELCO50 interface.
Completed the R&D of new product Loop-AM3430 Access DCS-MUX.
Completed the R&D of the new generation model of Loop-AM3440, including the new
CCPB supported
Dome, TDMoIP and TDMoMPLS functions, and accommodated the interface cards of
older models.
Completed the R&D of Loop-iNMS, added the support for the Pseudowire Circuit
Management
(PWCKT), and provided Loop PTN networking management solutions.
Completed the R&D of the new model Loop-G7820-24S and supported 8 x
1/10gbesfp+ports 24x1
Gbe SFP ports and 8 x 10/100M/1gberj45 port.
Completed the R&D of the new product Loop-WDM1800; the WDM module includes
the following cards/boards:
Transponder Modules
Wavelength Division Multiplexing (Mux/Demux) Modules
Optical Link Protection Modules
Amplifier Modules
Dispersion Compensation Modules (DCM)

21

Year/month
May 2022
September 2022
September 2022
January 2023
May 2023
May 2023
July 2023
October 2023
October 2023
October 2023
January 2024		 Milestone
Optical Time-Domain Reflectometer (OTDR) Modules
Completed the R&D of the new generation Dry Contact type C board, which may be
used with Loop-O9500R PTN/SDH/SONET/PDH IMAP products.
Completed the R&D of the new generation model of Loop-AM3440, including the new
CCPB-8gehswa, supported Dome, TDMoIP and TDMoMPLS functions, and
accommodated the interface cards of older models.

Packet controller module

Support cross-connect function

4 x gbe and 4 x FE/gbe SFP interface with built-in L2 switch

Supports satop, cesopsn, and MEF-8

Up to 64 pseudowires

Supports synce
Completed the R&D of the new product Loop-AM3440-E IP/TDM DCS-MUX MPLS-
TP/CE SWITCH.
Completed the R&D of the new board Muxponder, which can be used with Loop-
WDM1800.
Completed the R&D of Loop-G7820 Intelligent Switch that supports Layer 3
functions.
Completed the R&D of Loop-G7860A mptn MPLS/CE Packet Transport Network
equipment that supports 6 port DS3 interface cards.
Completed the R&D of Loop-AM3440 Access DCS-MUX product, which can be used
with 8SRU interface cards.
Completed the R&D of the 12FXS02 and 12FXS03 audio interface card product,
which can be used with the Loop-AM3440 Access DCS-MUX product.
Completed the R&D of Loop-G7800 PTN MPLS/CE Packet Transport Network that
supports that supports high-speed 100G/10G/1G Ethernet interface, and accommodates
the AM3440/O9500-PTN series of interface cards.
Completed the R&D of the new CCPA02 control card for the Loop-O9500R
PTN/SDH/SONET/PDH IMAP.
Completed the R&D of the Loop-AM3440 CCPB- 8gehswa and added support for
MPLS-TP and CE functions.

22

(III) Corporate Governance Report

1. Organization

(1) Organizational chart

==> picture [556 x 428] intentionally omitted <==

----- Start of picture text -----

Shareholder
Remuneration Board of
Audit Committee
Committee Directors
Auditing Office
Chairman
President
President
Office
Engineering Department Management Department Sales Department Production Department
RD System IP Technology Administration Purchasing Business I Business II Business III Manufacturing Management Quality control
System Marketing Document Control Financial & Accounting Product Publication Production / Material Production Engineering
Alpha Lab Engineering
----- End of picture text -----

23

(2) Scope of Business of Major Departments

Shareholders' meeting

  • A. Establishing and amending the Articles of Incorporation.

  • B. Determining the capital increase/reduction of the Company.

  • C. Auditing and ratifying the reports of the Board and the Audit Committee.

  • D. Electing Directors.

  • E. Other permissions authorized under laws and regulations

Board of Directors meeting

  • A. Reviewing and determining material rules and regulations of the Company.

  • B. Determining the business policy.

  • C. Determining budgets and final accounts.

  • D. Formulation of earning distribution.

  • E. Formulation of the capital increase/reduction.

  • F. Determining material candidates of the Company.

  • G. Determining adjustments to the organization and other material matters of the Company.

  • H. Preparation and review of annual business reports.

  • I. Determining material matters of joint ventures.

  • J. Other permissions authorized under the Company Act and the shareholders' meeting.

Audit Committee

  • A. Investigation of the Company's financial position.

  • B. Audit of the Company's accounts and books.

  • C. Inquiring about the operating status of the Company.

  • D. Monitoring the execution of operations by the Company's employees and correcting violations of laws and dereliction of duty.

  • E. Other permissions authorized under the Company Act and the shareholders' meeting.

Remuneration Committee

  • A. Reviewing the remuneration of Directors and managers.

Managerial officer

  • A. The President shall execute its duties by adhering to the orders of the Board and the Chairman.

  • B. Managers of all levels shall execute their duties by adhering to the orders of the President.

President's Office

  • A. Strategical planning.

  • B. Operating analysis.

  • C. Investigating and evaluating the healthiness, reasonableness, and effectiveness of the Company's internal control system and various management systems.

  • D. Matters for the affairs of Board meetings and shareholders' meetings, issuance of shares, and public offerings.

Audit Office

  • A. Responsible for the planning of the internal audit operations and the follow-up on execution and improvement achievements.

24

Management Department

  • A. Coordinating general affairs, human affairs, safety, plant affairs, and administration.

  • B. Preparation of the data on capital allocation, budgets, final accounts, receipt and pay-out, accounting, calculation of costs, and handling of accounting affairs.

  • C. Procurement of raw materials and machinery, and equipment.

  • D. Bonded operations, accounting handling and import/export, and freight operations.

  • E. Planning and management of the information system of the entire Company.

Engineering Department (digital transmission, communication network, users' end, and system integration)

  • A. R&D of new products.

  • B. Introduction of new technologies.

  • C. Formulation of the material list of procedures and products.

  • D. Improving production technologies, providing service technologies, and improving procedures.

  • E. Control and management of engineering data.

Production Department

  • A. Intake quality and finished good testing, analysis, and processing.

  • B. Testing and follow-up for the reasons for returned products.

  • C. Promoting the quality activities of the entire Company (i.e., ISO9001 and ISO14001).

  • D. Collecting materials and investing personnel and machinery, and equipment to produce products according to the production plan.

  • E. Repair of returned products.

  • F. Improvement recommendations for procedures.

  • G. Production scheduling and planning and supplies requirement determination.

  • H. Warehouse management, raw material and finished goods preservation, and account handling.

  • I. Raw material distribution and shipping and packaging of finished goods.

Sales Department

  • A. Studying domestic and foreign business sales and markets and understanding new product trends.

  • B. Formulating production and marketing activity strategies, promotional advertisements, and expanding markets.

  • C. Transportation, storage, and promotion of products, collection of payments for goods, and contact for domestic and foreign distribution operations.

  • D. Operation management of subsidiaries.

25

2. Data on Directors, President, Vice Presidents, Assistant Vice Presidents, and directors of departments and branches

(1) Data on Directors

April 26, 2024 April 26, 2024 April 26, 2024 April 26, 2024
Title Nationalit
y or Place
of
Registrati
on
Name		 Gender Date
elected
(appointed
)		 Tenure Date
initially
elected		 Shareholding when
elected		 Current
shareholding		 Current
shareholding of
spouse and
underage children		 Shares held in
the name of
other persons
Major career
achievements
(academic
background)		 Concurrent
duties in the
Company and
other companies		 Other directors of departments,
Directors or supervisors who
are spouses or relatives within
the second degree of kinship
Remarks
Shares Shareholding
ratio		 Shares Shareholding
ratio		 Shares Shareholding
ratio		 Shares Shareholding
ratio		 Title Name Relationship
Chairman Republic
of China		 Yeh
Maw-
Lin		 Male 2022.06.29 3 years 1991.10.28 7,268,230 10.25% 5,625,844 None None Bachelor's degree in
telecommunication,
National Chiao
Tung University
Ph.D. In electrical
engineering, The
University of Notre
Dame; Senior
management,
NYNEX
Chairman and
President, Loop
Telecommunicati
on International,
Inc.
Director,
Chongqing Loop
Technology Co.,
Ltd.
Director, Tianjin
Loop
Technology
Co.,Ltd.		 Director Chen
Hua-
Ling		 Wife (Note 1)
Director Republic
of China		 Chen
Hua-
Ling		 Female 2022.06.29 3 years 2022.06.29 1,888,922 2.66% None None Department of
Public
Administration,
National Chung
Hsing University		 None Chairman
Yeh
Maw-
Lin		 Husband
Director Republic
of China		 Fan
Zheng-
Chun		 Male 2022.06.29 3 years 2013.06.25 243,000 0.34% None None Institute of Business
Management,
Tatung University
Director, Jiin
Yeeh Ding
Enterprise Corp.
Independent
Director, Hantic
precision
technology, Inc
Director, Tianjin
Loop Electron
Technology Co.,
Ltd.		 None None None

26

Title Nationalit
y or Place
of
Registrati
on
Name		 Gender Date
elected
(appointed
)		 Tenure Date
initially
elected		 Shareholding when
elected		 Shareholding when
elected		 Current
shareholding		 Current
shareholding		 Current
shareholding of
spouse and
underage children		 Current
shareholding of
spouse and
underage children		 Shares held in
the name of
other persons		 Shares held in
the name of
other persons
Major career
achievements
(academic
background)		 Concurrent
duties in the
Company and
other companies		 Other directors of departments,
Directors or supervisors who
are spouses or relatives within
the second degree of kinship		 Other directors of departments,
Directors or supervisors who
are spouses or relatives within
the second degree of kinship		 Other directors of departments,
Directors or supervisors who
are spouses or relatives within
the second degree of kinship
Remarks
Shares Shareholding
ratio		 Shares Shareholding
ratio		 Shares Shareholding
ratio		 Shares Shareholding
ratio		 Title Name Relationship
Director Republic
of China		 Chiu
Dong-
Sheng		 Male 2022.06.29 3 years 2022.06.29 370,607 0.52% None None Department of
Business
Administration,
Doshisha University
Director of the
management
department,
Shimamura Co.,
Ltd.		 None None None
Independent
director
Republic
of China		 Huang
Yun-
Ming		 Male 2022.06.29 3 years 2022.06.29
None		 None None None None None None None 1. AT&T
Consultant,
2007-2016
2. Quintum
Technology
Director of
Engineering,2000
-2007
3. Lucent
Technology
Technical
Manager 1994-
2000		 None None None None
Independent
director
Republic
of China		 Jiang
Min-
Shiung		 Male 2022.06.29 3 years 2022.06.29
None		 None None None None None None None 1. Assistant
manager, Quan
Ya Computer
Co., Ltd.
2. Chairman,
Acrosser
Technology Co.,
Ltd.		 None None None None
Independent
director
Republic
of China		 Chang
Guo-
Hua		 Male 2022.06.29 3 years 2022.06.29
None		 None None None None None None None Co-fotmder, CTO
VP Engineering
System Quality
Architect.		 None None None None

27

Title Nationalit
y or Place
of
Registrati
on
Name		 Gender Date
elected
(appointed
)		 Tenure Date
initially
elected		 Shareholding when
elected		 Shareholding when
elected		 Current
shareholding		 Current
shareholding		 Current
shareholding of
spouse and
underage children		 Current
shareholding of
spouse and
underage children		 Shares held in
the name of
other persons		 Shares held in
the name of
other persons
Major career
achievements
(academic
background)		 Concurrent
duties in the
Company and
other companies		 Other directors of departments,
Directors or supervisors who
are spouses or relatives within
the second degree of kinship		 Other directors of departments,
Directors or supervisors who
are spouses or relatives within
the second degree of kinship		 Other directors of departments,
Directors or supervisors who
are spouses or relatives within
the second degree of kinship
Remarks
Shares Shareholding
ratio		 Shares Shareholding
ratio		 Shares Shareholding
ratio		 Shares Shareholding
ratio		 Title Name Relationship
Independent
director
Republic
of China		 Ko
Shu-
Mei		 Female 2022.06.29 3 years 2022.06.29
None		 None None None None None None None 1. Chief of the
finance section,
United Fiber
Optic
Communication
Inc.
2. Associate vice
president of the
management
section,
Aquaoptics Corp.
None		 None None None

28

Note 1：If the Chairman and the President or an equivalent position (senior management) of the Company are the same person, spouse, or relatives within the first degree of kinship, the information related to the reason, reasonableness, necessity, and countermeasures (i.e., increasing the number of Independent Directors and having over half of the Directors who are not concurrently employees or managers) shall be specified. The Chairman is concurrently the President of the Company to improve the operating efficiency and decision-making enforcement. To reinforce the independence of the Board, the Company intends to plan for improving the Board's functions and enhancing the supervisory functions in the future. Substantial measures are as follows:

(1) The current Independent Directors possess expertise in finance and accounting and the communication industry field and are able to exert their duties of supervision.

(2) Independent Directors may have comprehensive discussions at different functional committee meetings and provide professional recommendations to the Board for reference to implement the specifications of corporate governance.

(3) Over half of the Board members are not concurrently the Company's employees or managers.

A. Major shareholder of a corporate shareholder: None.

B. Major shareholder of a corporate shareholder major shareholder who is a corporation: None.

29

C. Do Directors or supervisors possess five years of working experience required for business, law, finance, or corporate operations and comply with the

following circumstances:

1. Disclosure of professional qualification of Directors and supervisors and independence of Independent Directors:

(1) Professional qualification
of Directors
Name		 Professional qualifications and experience (Note 1)
Chairman
Yeh Maw-Lin		 Bachelor's degree in telecommunication, National Chiao Tung University; Ph.D. In electrical engineering, The University of Notre Dame; Senior
manager, NYNEX. Currently, he is the Chairman and the President of the Company; he is familiarized with the development trends in the
communication and semiconductor industries. Circumstances specified in Subparagraphs of Article 30 of the CompanyAct do not exist.
Director
Fan Zheng-Chun		 Institute of Business Management of Tatung University. He used to be a director of Jiin Yeeh Ding Enterprise Corp. And an independent director
of Hantic precision technology, Inc, and he possesses the working experience required for business, law, finance, accounting, and corporate
operations and complies with the following circumstances. Circumstances specified in Subparagraphs of Article 30 of the Company Act do not
exist.
Director
Chen Hua-Ling		 Department of Public Administration of National Chung Hsing University
Possess the working experience required for business, finance, and corporate operations. Circumstances specified in Subparagraphs of Article 30
of the CompanyAct do not exist.
Director
Chiu Dong-Sheng		 Department of Business Administration, Doshisha University. He used to be the director of the management department of Shimamura Co., Ltd.,
and he possesses the working experience required for business, law, finance, and corporate operations and complies with the following
circumstances. Circumstances specified in Subparagraphs of Article 30 of the CompanyAct do not exist.
Independent director
Huang Yun-Ming		 He possesses a master's degree and Ph.D. In metallurgy and materials engineering from The University of Notre Dame. He is the convener of the
Remuneration Committee of the Company and possesses the working experience required for business and corporate operations. Circumstances
specified in Subparagraphs of Article 30 of the CompanyAct do not exist. None of thegovernment,corporation,or its representative is elected.
Independent director
Jiang Min-Shiung		 National Taipei Institute of Technology. He used to be the assistant manager of Quan Ya Computer Co., Ltd. And the chairman of Acrosser
Technology Co., Ltd.. Possess the working experience required for finance, accounting, business, and corporate operations. Circumstances
specified in Subparagraphs of Article 30 of the CompanyAct do not exist. None of thegovernment,corporation,or its representative is elected.
Independent director
Chang Guo-Hua		 Master's degree from National Chiao Tung University and Arizona State University. He used to be starvox Comm. Inc. (U.S.A) Co-founder, CTO
VP Engineering and Centrify Corp. (U.S.A) System Quality Architect. He possesses the working experience required for business, law, finance,
and corporate operations. Circumstances specified in Subparagraphs of Article 30 of the CompanyAct do not exist.
Independent director
Ko Shu-Mei		 Department of Business Administration, Providence University. Used to be the chief of the finance section of United Fiber Optic Communication
Inc. And the associate vice president of the management section of Aquaoptics Corp.. Possess the working experience required for finance,
accounting,business,and corporate operations. Circumstances specified in Subparagraphs of Article 30 of the CompanyAct do not exist.

30

(2) Condition disclosures for the
independence of Independent Directors
Name		 Number of concurrent duties as an
independent director at a public company		 Independence (Note 2)
Independent director
Huang Yun-Ming
Jiang Min-Shiung
Chang Guo-Hua
Ko Shu-Mei		 0 Compliant with the independence specifications before being elected and during
the term of office:
1. Not an employee of the company or any of its affiliates.
2. Not a Director or supervisor of the Company or any of its affiliates.
3. Not a natural-person shareholder who holds shares, together with those held
by the person's spouse, minor children, or held by the person under others'
names, in an aggregate of 1% or more of the total number of issued shares of
the Company or ranking in the top 10 in holdings.
4. Not a spouse, relative within the second degree of kinship, or lineal relative
within the third degree of kinship of any person set out in the three preceding
subparagraphs.
5. Not a director, supervisor, or employee of a corporate shareholder who
directly holds over 5% of the total issued shares of the Company, or has top
five ranking in shareholding, or is a representative appointed as the Director or
supervisor of the Company according to paragraph 1 or paragraph 2, Article
27 of the Company Act.
6. If over half of the number of employees or shares with voting rights of the
Company and another company are held by the same person, not a director,
supervisor, or employee of another company.
7. If the Chairman, President, or equivalent positions of the Company or another
company or institution are the same person or spouses, not a director,
supervisor, or employee of another company or institution.
8. Not a Director, supervisor, manager, or shareholder holding 5% or more of the
shares of a specified company or institution that has a financial or business
relationship with the Company.
9. Not a proprietor, partner, director, supervisor, manager, or its spouse of a
professional, proprietorship, partnership, company, or institution that provides
audit services to, or receives an accumulated compensation of over NT$0.5
million within the most recent two years through providing business, legal,
finance,accounting,and relevant services to the Companyor its affiliates.

Note 1 : Professional qualification and experience: Describe the professional qualifications and experience of the individual Directors and supervisors. For members of the Audit Committee with accounting or financial expertise, the accounting or financial backgrounds and working experience shall be specified. In addition, the existence of any circumstances set out in subparagraphs under Article 30 of the Company Act shall be specified.

Note 2 : For an Independent Director, specify their independence status, including but not limited to whether the Independent Director, its spouse, or relatives within the second degree of kinship is a Director, supervisor, or employee of the Company or its affiliates, the number of shares held by the Independent Director, its spouse, or relatives within the second degree of kinship (or held in the name of others) and the ratio, whether the Independent Director is a director, supervisor, or employee of a company with particular relationships with the Company (please refer to subparagraphs 5 to 8, paragraph 1, Article 3 of the Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies), and the compensation received in the most recent two years for providing business, legal, financial, and accounting services to the Company or its affiliates.

31

2. Board diversification and independence:

Board diversification:

To implement Board diversification, the Company clearly stated in Article 19 of its "Corporate Governance Best Practice Principles" that diversification shall be

considered for the composition of Board members, an appropriate diversification policy shall be formulated based on its operations, operating patterns, and long-term

development requirements, and members shall possess knowledge, skills, and literacy required to execute their duties.

To achieve the ideal objective of corporate governance, the overall Board shall possess the following abilities:

  • I. The ability to make judgments about operations.

  • II. Accounting and financial analysis ability.

  • III. Business management ability.

  • IV. Crisis management ability.

  • V. Knowledge of the industry.

  • VI. An international market perspective.

  • VII. Leadership ability.

  • VIII. Decision-making ability.

32

The Company also adheres to the principles of meritocracy when selecting members of the Board with reference to gender, age, nationality, culture, and

other diverse aspects. The implementation status is as follows:

Core of diversification
Name		 Core of diversification
Name		 Basic composition Basic composition Basic composition Basic composition Professional background Professional background Professional background Expertise and skills Expertise and skills Expertise and skills
Nationality Gender Concurrently an
employee		 Age Term of
office and
seniority of
Independent
Director
(Less than 3
years)		 Financial
accounting		 Industry
experience		 Technology The ability to make
judgments about
operations		 Accounting and
financial analysis		 Business management
ability		 Crisis management
ability		 Industry knowledge Cosmopolitan market
view		 Leadership Decision-making ability
<60 61-70 >70
Director Yeh Maw-
Lin		 Republic
of China

 Male ˇ
Chen
Hua-Ling		 Female
Chiu
Dong-
Sheng		 Male
Fan
Zheng-
Chun		 Male
Independent
director		 Huang
Yun-Ming		 Male
Jiang Min-
Shiung		 Male
Chang
Guo-Hua		 Male
Ko Shu-
Mei		 Female

33

December 31, 2023

Criteria
Name(Note 1)
Possession of over five years of working experience and the
following professional qualification
Possession of over five years of working experience and the
following professional qualification
Possession of over five years of working experience and the
following professional qualification		 Independence (Note 1) Independence (Note 1) Independence (Note 1) Independence (Note 1) Number of
concurrent
duties as an
independent
director at a
public
company
Positions above lecturers
in business, law, finance,
accounting, or relevant
departments required for
corporate operations at a
public or private
universityor college.		 Judges, prosecutors,
lawyers, accountants, or
other professionals and
technicians passing
national exams with
certificates required for
corporate operations.		 Possess the working
experience required for
business, law, finance,
accounting, business,
and corporate
operations.
1		 2 3 4 5 6 7 8 9 10 11 12
Yeh Maw-Lin - - - - - - - None
Fan Zheng-Chun - - 1
Chiu Dong-Sheng - - None
Chen Hua-Ling - - - - - - None
HuangYun-Ming - - None
JiangMin-Shiung - - None
ChangGuo-Hua - - None
Ko Shu-Mei - - None

Note 1 ： If a Director or supervisor complies with the following conditions two years before being elected and during the term of office, please check "  " in the space below.

  • (1) Not an employee of the company or any of its affiliates.

  • (2) Not a Director or supervisor of the Company or any of its affiliates (however, this shall not include the concurrent position of independent directors of its parent company, subsidiaries, or subsidiaries of the same parent company established according to the Act or local laws and regulations of the countries).

  • (3) Not a natural-person shareholder who holds shares, together with those held by the person's spouse, minor children, or held by the person under others' names, in an aggregate of 1% or more of the total number of issued shares of the Company or ranking in the top 10 in holdings.

  • (4) Not a spouse, relative within the second degree of kinship, or lineal relative within the third degree of kinship of any person set out in the three preceding subparagraphs.

  • (5) Not a director, supervisor, or employee of a corporate shareholder who directly holds over 5% of the total issued shares of the Company, or has top five ranking in shareholding, or is a representative appointed as the Director or supervisor of the Company according to paragraph 1 or paragraph 2, Article 27 of the Company Act (however, this shall not include the concurrent position of independent directors of its parent company, subsidiaries, or subsidiaries of the same parent company established according to the Act or local laws and regulations of the countries).

  • (6) If over half of the number of employees or shares with voting rights of the Company and another company are held by the same person, not a director, supervisor, or employee of another company (however, this shall not include the concurrent position of independent directors of its parent company, subsidiaries, or subsidiaries of the same parent company established according to the Act or local laws and regulations of the countries).

  • (7) If the Chairman, President, or equivalent positions of the Company or another company or institution are the same person or spouses, not a director, supervisor, or employee of another company or institution (however, this shall not include the concurrent position of independent directors of its parent company, subsidiaries, or subsidiaries of the same parent company established according to the Act or local laws and regulations of the countries).

  • (8) Not a Director, supervisor, manager, or shareholder holding 5% or more of the shares of a specified company or institution that has a financial or business relationship with the Company (however, if a specified company or institution holds over 20% (but less than 50%) of the Company's total issued shares, this shall not include the concurrent position of independent directors of its parent company, subsidiaries, or subsidiaries of the same parent company established according to the Act or local laws and regulations of the countries).

  • (9) Not a proprietor, partner, director, supervisor, manager, or its spouse of a professional, proprietorship, partnership, company, or institution that provides audit services to, or receives an accumulated compensation of over NT$0.5 million within the most recent two years through providing business, legal, finance, accounting, and relevant services to the Company or its affiliates. However, this shall not apply to members of the Remuneration Committee, acquisition review committee, or special merger committee who exercise their powers according to the Securities and Exchange Act, the Business Mergers and Acquisitions Act, or other relevant laws and regulations.

  • (10) Not a spouse or a relative within the second degree of kinship of another Director.

  • (11) Note having any circumstances specified in subparagraphs of Article 30 of the Company Act.

  • (12) No government, corporation, or its representative who is not an employee of the Company or its affiliates is elected according to Article 27 of the Company Act.

34

(2) Data on President, Vice Presidents, Assistant Vice Presidents, and directors of departments and branches

April 26, 2024

Shareholding of Shares held in Managers who are
Shareholding spouse and the name of spouses or relatives within
underage children other persons the second degree

Concurrent duties in the
Date elected Major career achievements (academic
Title Nationality Name Gender
Company and other		 Remarks
(appointed) Shares Shareholding
ratio		 Shares Shareholding
ratio		 Shares Shareholding
ratio		 background) Title Name
companies

Relationship
5,625,844 9.92% 1,218,337 2.15% - - Bachelor's degree in None None
Director, Chongqing
telecommunication, National Chiao
Loop Technology Co.,
Chairman and Republic of Yeh Tung University
Male 1991.10.28
Ltd.		 None (Note 1)
President China Maw-Lin Ph.D. In electrical engineering, The
Director, Tianjin Loop
University of Notre Dame
Technology Co.,Ltd.
Senior manager,NYNEX
21,938 0.04% - - - - None None
Vice Master's degree in physics, Fu Jen
President, Republic of Ceng Catholic University
Male 2006.08.07 None None
Sales China Qing-Lin President, SDO Communications
Department Corp.
- - - - - - None None
Master's degree in electrical
Vice
machinery, University of Southern Supervisor, Tianjin Loop
President, Republic of Liu
Male 2005.02.14 California Electron Technology None
Engineering China Dong-Jie
Assistant manager, Syncom Networks
Co., Ltd.
Department
Inc.
149 0% - - - - None None
Director of Bachelor's degree in accounting, Fu
the Finance Chang Jen Catholic University
Republic of
and
Xiao-		 Female 2021.03.25
Chief accountant, Taiwan Mobile Co.,
None		 None
China
Accounting Ling Ltd.
Department Financial accounting
9,679 0.02% - - - - None None
Bachelor's degree in International
Chief of
Republic of Cai Xing- Business, Tunghai University
corporate Female 2023.03.28 None None
China Juan Procurement, Fujitsu Taiwan
governance
Director

Note 1 : If the Chairman and the President or an equivalent position (senior management) of the Company are the same person, spouse, or relatives within the first degree of kinship, the information related to the reason, reasonableness, necessity, and countermeasures (i.e., increasing the number of Independent Directors and having over half of the Directors who are not concurrently employees or managers) shall be specified.

The Chairman is concurrently the President of the Company to improve the operating efficiency and decision-making enforcement. To reinforce the independence of the Board, the Company intends to plan for improving the Board's functions and enhancing the supervisory functions in the future. Substantial measures are as follows:

(1) The current Independent Directors possess expertise in finance and accounting and the communication industry field and are able to exert their duties of supervision.

(2) Independent Directors may have comprehensive discussions at different functional committee meetings and provide professional recommendations to the Board for reference to implement the specifications of corporate governance.

  • (3) Over half of the Board members are not concurrently the Company's employees or managers.

35

(3) Remunerations of the Directors, Supervisors, President, and Vice Presidents

A. Remunerations of the Directors

December 31,2023(In Thousands of New Taiwan Dollars) December 31,2023(In Thousands of New Taiwan Dollars) December 31,2023(In Thousands of New Taiwan Dollars) December 31,2023(In Thousands of New Taiwan Dollars) December 31,2023(In Thousands of New Taiwan Dollars) December 31,2023(In Thousands of New Taiwan Dollars) December 31,2023(In Thousands of New Taiwan Dollars) December 31,2023(In Thousands of New Taiwan Dollars) December 31,2023(In Thousands of New Taiwan Dollars) December 31,2023(In Thousands of New Taiwan Dollars) December 31,2023(In Thousands of New Taiwan Dollars)

Remuneration received from an investee other than a
subsidiary or from the parent company
Director s' remuneration Remuneration for concurrent duty as an employee
Total Remuneration
Total remuneration
(A+B+C+D) as a % of net
Disability
 Directors' compensation
(C)		 Fees for professional Salary, bonus, and
 Disability retirement Employee compensation (G) (A+B+C+D+E+F+G)
as a % of the Net
Compensation (A) retirement benefits
(B)		 (Note 1)
practice (D)		 profit after tax special reimbursement
(E)
benefits (F)
(Note 1)		 Income
The Company The Company
All companies
ihi h
Title Name The Company
wtn te
financial
All Th All Th Th All Th All Th All Th All statements All
All i
companies e Company companies e Company companes
within the		 e Company companies e Company companies e Company companies e Company companies companies
within the within the
fiil		 within the within the within the within the Amount in cash Amount in
shares		 Amount in cash Amount in
shares		 within the
financial financial nanca
statements		 financial financial financial financial financial
statements statements statements statements statements statements statements
Chairman and
President
Yeh Maw-Lin
0
0
0
0		 2,243
2,243
0
0
2,243
1.12%

2,243
1.12%

7,450
7,450
0
0
355
0
355
0
10,048
5.03%

10,048
5.03%
None
Director Fan Zheng-
Chun		 0
0
0
0		 1,122
1,122
0
0
1,122
0.56%

1,122
0.56%

0
0
0
0
0
0
0
0
1,122
0.56%

1,122
0.56%
None
Director Chen Hua-
Ling		 0
0
0
0		 1,122
1,122
0
0
1,122
0.56%

1,122
0.56%

0
0
0
0
0
0
0
0
1,122
0.56%

1,122
0.56%
None
Director Chiu Dong-
Sheng		 0
0
0
0		 1,122
1,122
0
0
1,122
0.56%

1,122
0.56%

0
0
0
0
0
0
0
0
1,122
0.56%

1,122
0.56%
None
Independent
director		 Huang Yun-
Ming		 0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0		 None
Independent
director		 Jiang Min-
Shiung		 0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0		 None
Independent
director		 Chang Guo-
Hua		 0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0		 None
Independent
director		 Ko Shu-Mei 0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0		 None
1.
Please describe the policy, system, standards, and structure of th		 e remuneration of Independent Directors and describe the linkage of duties and risks assumed, time invested, and other fact ors to the amount of remuneration: The Company refers to the
results of Directors' performance evaluation for the remuneration of Independent Directors. In addition, according to Article 31 of the Articles of Incorporation, to provide incentives to Dire ctors for their active participation in the Company's operations,
the Board is authorized to determine the remuneration of Independent Directors based on their level of participation and the value of contributions with reference to domestic and foreign sta ndards within the industry.
2.
Except for the disclosures in the table above,compensation received byDirectors of the Companyby providingservices(i.e.,beinga non-employee consultant of theparent company/all companies in the financial report/investee): None.

Note 1 : The Company recorded earnings after tax in 2023; the proposal for earning distribution is to be resolved at the shareholders' meeting on June 25, 2024.

36

B. Remunerations of the President and Vice Presidents

December 31, 2023 (In Thousands of New Taiwan Dollars)

Title Name Salary (A) Salary (A) Disability retirement benefits
(B)		 Disability retirement benefits
(B)		 Bonus and allowance (C) Bonus and allowance (C) Employee compensation (D)
(Note 1)		 Employee compensation (D)
(Note 1)		 Employee compensation (D)
(Note 1)		 Employee compensation (D)
(Note 1)		 Total remuneration
(A+B+C+D) as a % of net
profit after tax		 Total remuneration
(A+B+C+D) as a % of net
profit after tax		 Remuneration
received from
an investee
other than a
subsidiary or
from the
parent
company
The Company All companies
within the
financial
statements
The Company		 All companies
within the
financial
statements		 The Company All companies
within the
financial
statements		 The Company All companies within
the financial
statements
The Company
All companies
within the
financial
statements
Amount in
cash		 Amount in
shares		 Amount in
cash
Amount
in shares
Chairman and
President
Yeh Maw-Lin		 5,993
5,993
0
0
1,457
1,457
355
0
355
0
7,805
3.91%

7,805
3.91%

None
Other
supervisors		 Lai Yong-Zan
(Note 2)		 1,305
1,305
4,966
4,966
400
400
147
0
147
0
6,818
3.41%

6,818
3.41%

None
Vice president Liu Dong-Jie 2,370
2,370
0
0
539
539
179
0
179
0
3,088
1.55%

3,088
1.55%

None
Vice president Ceng Qing-
Lin		 2,343
2,343
0
0
2,787
2,787
203
0
203
0
5,333
2.67%

5,333
2.67%

None

Note 1 : The Company recorded earnings after tax in 2023; the proposal for earning distribution is to be resolved at the shareholders' meeting on June 25, 2024. Note 2 : Vice President Lai Yong-Zan retired on July 31, 2023, and transitioned to Vice President-level advisor position on August 1, 2023.

C. Names of managers who distribute employee remuneration and the distribution status

December 31,2023(In Thousands of New Taiwan Dollars) December 31,2023(In Thousands of New Taiwan Dollars) December 31,2023(In Thousands of New Taiwan Dollars) December 31,2023(In Thousands of New Taiwan Dollars)
Title Name Amount in shares Amount in cash (Note 1) Total Total as % of net profit after tax
Managerial
officer		 Chairman and President Yeh Maw-Lin 0
355
355
0.18

Othersupervisors		 Lai Yong-Zan
(Note 2)		 0
147
147
0.07
Vice president Liu Dong-Jie 0
179
179
0.09
Vice president Ceng Qing-Lin 0
203
203
0.10

Note 1 : The Company recorded earnings after tax in 2023; the proposal for earning distribution is to be resolved at the shareholders' meeting on June 25, 2024. Note 2 : Vice President Lai Yong-Zan retired on July 31, 2023, and transitioned to Vice President-level advisor position on August 1, 2023.

37

D. Remuneration of senior management with the top five remunerations of the listed company (disclosure of name and remuneration individually)

December 31, 2023 (In Thousands of New Taiwan Dollars)

Salary (A) Salary (A) Disability retirement benefits
(B)		 Disability retirement benefits
(B)		 Bonus and allowance (C) Bonus and allowance (C) Employee compensation (D)
(Note 1)		 Employee compensation (D)
(Note 1)		 Employee compensation (D)
(Note 1)		 Employee compensation (D)
(Note 1)		 Total remuneration
(A+B+C+D) as a % of net
profit after tax		 Total remuneration
(A+B+C+D) as a % of net
profit after tax		 Remuneration
received from
an investee
Title Name All companies All companies All companies
The Coman		 All companies within the All
 other than a
subsidiary or
The Company

within the
financial
statements
The Company
within the
financial
statements
The Company
within the
financial
statements
py		 financial statements The Company
companies
within the
financial
statements		 from the
parent
company
Amount in
cash		 Amount in
shares		 Amount in
cash		 Amount in
shares
Chairman
and
President		 Yeh Maw-Lin 5,993
5,993
0
0
1,457
1,457
355
0
355
0
7,805
3.91%

7,805
3.91%

None
Other
supervisors		 Lai Yong-Zan
(Note 2)		 1,305
1,305
4,966
4,966
400
400
147
0
147
0
6,818
3.41%

6,818
3.41%

None
Vice
president		 Liu Dong-Jie 2,370
2,370
0
0
539
539
179
0
179
0
3,088
1.55%

3,088
1.55%

None
Vice
president		 Ceng Qing-Lin 2,343
2,343
0
0
2,787
2,787
203
0
203
0
5,333
2.67%

5,333
2.67%

None

Note 1 : The Company recorded earnings after tax in 2023; the proposal for earning distribution is to be resolved at the shareholders' meeting on June 25, 2024. Note 2 : Vice President Lai Yong-Zan retired on July 31, 2023, and transitioned to Vice President-level advisor position on August 1, 2023.

38

(4) The comparison of total remuneration, as a percentage of net profit after tax, as paid by the Company and by all other companies included in the consolidated statements during the most recent two years to Directors, supervisors, President, and Vice Presidents, and description of the remuneration policies, standards, and packages, the procedures for determining remunerations, and its linkage to operating performance and future risks

Ratio of total remuneration to net income in 2022(%) Ratio of total remuneration to net income in 2022(%) Ratio of total remuneration to net income in 2023(%) Ratio of total remuneration to net income in 2023(%) Description
The Company The Company The Company All companies within the financial
statements
Director (Note) 12.09 12.09 6.71 6.71 1. If the Company has net income for the period after the final
account of the year, it shall compensate cumulative losses
(including the adjustments to undistributed earnings),
appropriate 10% as the legal reserve according to the law;
however, this shall not apply when the legal reserve has
reached the paid-in capital of the Company. Then, it shall
appropriate or reverse the special reserve according to the
requirements under laws and regulations and of the competent
authority. The Company shall appropriate no less than 10%
and no more than 5% of the net profit before tax of the period
before
deducting
remuneration
of
employees
and
remuneration of Directors as the remuneration of employees
and remuneration of Directors, respectively; however, if the
Company has cumulative losses (including adjusted
undistributed earnings), it shall preserve the compensation
amount.
2. Remuneration paid to Directors is the remuneration of
Directors appropriated based on the requirements of the
Articles of Incorporation. Remuneration paid to the President
and Vice Presidents is distributed based on their individual
performance.
3. According to the above, the remuneration of Directors,
President, and Vice Presidents is implemented based on the
existing specifications of the Company, which has no material
effect on the operating risks of the Company in the future.
4. Except for collecting reasonable remuneration from the
Company, the Directors, President, and Vice Presidents of the
Company had not collected any remuneration from other
companies in the consolidated statements.
5. Major changes in the remuneration of Directors, President,
and Vice Presidents were due to the increase in net profit in
2023.
Supervisor 0.42 0.42 - -
President and
vice president		 24.41 24.41 11.54 11.54

Note: Include President and Vice Presidents who are concurrently employees.

39

3. Corporate governance implementation

(1) Operation of the Board:

Four Board meetings were held in the most recent year, and there were four meetings for the 12th session; the attendance/presence of Directors and supervisors is as follows:

Title Name Number of
attendance
(presence)		 Number of
attendance by
proxy		 Attendance
(presence) rate (%)		 Remarks
Chairman Yeh Maw-Lin 4 0 100
Director Fan Zheng-Chun 4 0 100
Director Chiu Dong-Sheng 4 0 100
Director Chen Hua-Ling 4 0 100
Independent director Huang Yun-Ming 4 0 100
Independent director Chang Guo-Hua 4 0 100
Independent director Jiang Min-Shiung 4 0 100
Independent director Ko Shu-Mei 4 0 100
Other matters to be recorded:
I. In the event of any of the following in a Board of Directors meeting, the dates of meeting, session, contents of motions,
the opinions of independent directors, and the Company's response to the opinions should be specified:
(I) Matters specified in Article 14-3 of the Securities and Exchange Act: None.
(II) Any objections or qualified opinions raised by an Independent Director against a Board resolution with records or
written statements other than the abovementioned matters: None.
II. For the execution status regarding the recusal of Directors for proposals of conflict of interests, describe the name of the
Director,the contentproposals,the reason for the recusal for conflict of interests,and votingstatus.
Meeting title
Date
Name of
Director
Motion content
Recusal for the conflicts of interest and
votingstatus
The 4th
meeting of the
12th session
of the Board.
2023.03.28
Director
Yeh Maw-Lin
1. Proposal for the
remuneration of
managers and Directors.
2. Proposal for the
remuneration of other
managers.
Director Yeh Maw-Lin recused himself
from the venue due to the conflicts of
interests and consigned the Board to
elect Director Huang Yun-Ming to host
the meeting for the discussion of the
proposal; the proposal was approved by
the remaining attending Directors with
no dissenting opinion.
The same as the above

40

III.A company listed on TWSE or tpex shall disclose information on the Director's self-evaluation (or peer evaluation) in terms of the cycle, period, scope, method, and content and shall complete the Questionnaire of Self-Performance Evaluation of Board Members in the table enclosed.

Evaluation
periodicity		 Evaluation period Evaluation scope Evaluation method Evaluation content
Once each year
2022.01.01~
2022.12.31		 1. Board of Directors meeting
2. Individual Directors
3. Remuneration Committee
and Audit Committee		 Internal self-
evaluation of the
Board
Self-evaluation of
Director		 1. Performance evaluation of
the Board
2. Performance evaluation of
individual Directors
3. Performance evaluation of
functional committees

  • (I) Functional objectives of the Board

  • To implement corporate governance and improve the functions of the Board, the Company has established the "Regulations for the Performance Evaluation of the Board" to reinforce the functions of the Board.

  • The Company regularly arranges for Directors to participate in professional continuing education programs to maintain their core values, professional advantages, and abilities.

  • (II)Execution evaluation:

  • The Company established its Remuneration Committee in 2011 to assist the Board in executing its duties. 2. The Company immediately uploads material resolutions to MOPS after Board meetings to protect shareholders' interests. It has established a spokesperson system to ensure timely and adequate disclosures of material information for shareholders and stakeholders to refer to information related to the finance and business of the Company.

  • IV. Targets (i.e., establishing the Audit Committee and improving information transparency) to improve the functions of the Board and the execution evaluations for the year and the most recent year.

  • (I) Board meetings of the Company comply with the "Regulations Governing Procedure for Board of Directors Meetings of Public Companies" to realize corporate governance.

  • (II)The Company established its "Remuneration Committee" in 2011, and the composing members are Huang YunMing, Chang Guo-Hua, Jiang Min-Shiung, and Ko Shu-Mei; member Huang Yun-Ming is the convener.

41

(2) Operation of the Audit Committee

A. The Audit Committee of the Company was established on June 29, 2022. Information on members:

Identity Criteria
Name		 Professional qualifications and
experience		 Independence Number of
concurrent duty
as a
Remuneration
Committee
member at a
public company
Convener Huang Yun-
Ming		 Ph.D. In differential dynamical,
University of Minnesota. Used to
be a consultant for AT&T and a
chief engineer for Quintum.
Possess the working experience
required for business and
corporate operations.		 1. The person, his spouse, or his second-
degree relatives do not serve as
directors, supervisors or employees of
the Company.
2. No share of the Company is held by the
person, spouse, or relatives within the
second degree of kinship (or in others'
name).
3. Not a director, supervisor, or employee
of a company which has a specific
relationship with the Company.
4. No compensation is received for
providing business, legal, financial,
accounting, and other services to the
Company or its affiliates for the most
recent two years.		 0
Independent
director
Independent
director		 Jiang Min-
Shiung		 National Taipei Institute of
Technology. Used to be the
chairman of Acrosser Technology
Co., Ltd.. Acrosser Technology
Co., Ltd. Possess the working
experience required for finance,
accounting, and corporate
operations.		 1. The person, his spouse, or his second-
degree relatives do not serve as
directors, supervisors or employees of
the Company.
2. No share of the Company is held by the
person, spouse, or relatives within the
second degree of kinship (or in others'
name).
3. Not a director, supervisor, or employee
of a company which has a specific
relationship with the Company.
4. No compensation is received for
providing business, legal, financial,
accounting, and other services to the
Company or its affiliates for the most
recent two years.		 0
Independent
director		 Chang Guo-
Hua		 Bachelor's degree from Chiao
Tung University and a master's
degree from Arizona State
University. Used to be the co-
founder of starvox and
The engineering vice president of
CTO. Possess the working
experience required for business
and corporate operations.		 1. The person, his spouse, or his second-
degree relatives do not serve as
directors, supervisors or employees of
the Company.
2. No share of the Company is held by the
person, spouse, or relatives within the
second degree of kinship (or in others'
name).
3. Not a director, supervisor, or employee
of a company which has a specific
relationship with the Company.
4. No compensation is received for
providing business, legal, financial,
accounting, and other services to the
Company or its affiliates for the most
recent two years.		 0
Independent
director		 Ko Shu-Mei Department of Business
Administration, Providence
University. Used to be the
assistant vice president of the
management section of
aquaoptics.
Acrosser Technology Co., Ltd.
Possess the working experience
required for finance, accounting,
and corporate operations.		 1. The person, his spouse, or his second-
degree relatives do not serve as
directors, supervisors or employees of
the Company.
2. No share of the Company is held by the
person, spouse, or relatives within the
second degree of kinship (or in others'
name).
3. Not a director, supervisor, or employee
of a company which has a specific
relationship with the Company.
4. No compensation is received for
providing business, legal, financial,
accounting, and other services to the
Company or its affiliates for the most
recent two years.		 0

42

B. Term of office of members of the 1st session: The term of office from June 29, 2022 to June 28, 2025 for a total of 4 persons. The 4 meetings were held for the 1st session of the Audit Committee in the most recent year; the attendance/presence of Independent Directors is as follows:

Title Name Number of
Attendance (B)		 Number of
attendance
By proxy		 Attendance
rate (%)
(B/A)		 Remarks
Independent
director		 Huang Yun-Ming 4 0 100
Independent
director		 Chang Guo-Hua 4 0 100
Independent
director		 Jiang Min-Shiung 4 0 100
Independent
director		 Ko Shu-Mei 4 0 100
Other matters to be recorded:
I. If any of the following circumstances occurs to the operations of the Audit Committee, the date of the Audit
Committee meeting, session, content of proposals, opposing opinions or qualified opinions of Independent
Directors, or the content of material recommendations, resolutions of the Audit Committee, and the
Company's response to the opinions of the Audit Committee shall be specified.
(I) Matters specified in Article 14-5 of the Securities and Exchange Act.
(II) Any other proposals not approved by the Audit Committee that were approved by two-thirds of all
Directors other than the abovementioned matters.
II. For the execution status regarding the recusal of Independent Directors for proposals of conflict of interests,
describe the name of the Independent Director, the content of the proposal, reason for the recusal for conflict
of interests, and voting status: None.
III. Communication between Independent Directors and the chief audit and cpas:
(I) The internal auditor of the Company regularly communicates with Independent Directors regarding the
results of the audit report and carries our internal audit reporting at the quarterly Board meetings; if there
is any special circumstance, the chief auditor will immediately notify Independent Directors. The
communication between Independent Directors and the chief auditor is healthy.
(II) Independent Directors carry out communications regarding the financial position in person or in writing
with cpas as they deem necessary.

43

C. Disclose the 2023 date of meetings, content of proposals, resolutions, and the Company's response to the

Audit Committee's opinion

Audit Committee Content of proposals and the
Subsequent response		 Resolution Company's handling of the
audit committee's opinions
2023.03.28 1. Reviewed and discussed the 2022
consolidated financial statements, parent
company only financial statements and
business report.
2. Evaluation of the independence and
competence of the Company’s certifying
accountant.		 Approved by all
members of the Audit
Committee		 Proposed to the Board and
approved by receiving the
consent of all attending
Directors
2023.05.11 1. Reviewed and discussed the 2023 Q1
consolidated financial statements.		 Approved by all
members of the Audit
Committee		 Proposed to the Board and
approved by receiving the
consent of all attending
Directors
2023.08.10 1. Reviewed and discussed the 2023 Q2
consolidated financial statements.		 Approved by all
members of the Audit
Committee		 Proposed to the Board and
approved by receiving the
consent of all attending
Directors
2023.11.09 1. Reviewed and discussed the 2023 Q3
consolidated financial statements.
2. Establishment of the “Financial Statement
Preparation Process Management
Regulations”.		 Approved by all
members of the Audit
Committee		 Proposed to the Board and
approved by receiving the
consent of all attending
Directors
2024.03.12 1. Reviewed and discussed the 2023
consolidated financial statements, parent
company only financial statements and
business report.
2. Evaluation of the independence and
competence of the Company’s certifying
accountant.		 Approved by all
members of the Audit
Committee		 Proposed to the Board and
approved by receiving the
consent of all attending
Directors

44

  • (3) Implementation of corporate governance and the differences from the Corporate Governance Best Practice Principles for TWSE/tpex Listed Companies and the reasons therefor
Evaluation Items Implementation status Implementation status Implementation status Deviations from the
Corporate
Governance
bestpractice
Principles for
TWSE/tpex Listed
Companies
And the reasons
Yes No Summary description
I. Has the Company formulated and disclosed its
corporate governance best practice principles in
accordance with the Corporate Governance Best
Practice Principles for TWSE/tpex Listed
Companies?		 The Company has established the following according to the "Corporate Governance Best
Practice Principles for TWSE/tpex Listed Companies":
1. Procedures for the Acquisition or Disposal of Assets.
2. Procedures for Loans to Others.
3. Regulations for Endorsements/Guarantees.
4. Rules and Procedures of Shareholders' Meeting.
5. Rules of Procedure of Board Meetings.
6. Regulations for the Election of Directors and Supervisors.
7. Code of Ethical Conduct.
8. Procedures for Handling Material Inside Information.
9. Code of Conducts or Ethics of Employees.
10. Charter of Remuneration Committee.
11. Regulations for Employees' Complaints.
12. Regulations for the Performance Evaluation of the Board. The items above have been
placed under corporate governance in the investor section on the Company's website for
stakeholders to refer to.		 None
II. The Company's equity structure and shareholder
equity
(I)
Has the Company established internal
operating procedures to handle shareholder
recommendations, doubts, disputes and
litigations and implemented them in
accordance with the procedures?
(II)
Does the Company have a list of the major
shareholders who actually control the
Company and those who ultimately have
control over the major shareholders?
(III) Has the Company established and
implemented risk control and firewall
mechanisms between affiliated companies?






(I)
The Company has established a spokesperson system according to the requirements to
handle relevant matters; if there is any dispute, the Company will engage the attorney
of its attorney's firm for handling.
(II)
The professional stock affairs agency is responsible for the list and regular declaration
of relevant information according to the requirements. The Company keeps abreast of
the shareholding status of Directors, managers, and shareholders with 10% of
shareholding or above at all times.
(III) Apart from the independent operations, if the Company has business dealings with an
affiliate, it is deemed as an independent third party. Upholding the principles of
fairness and reasonableness, the Company has established the Regulations for
Monitoring and Control of Subsidiaries and established appropriate risk control
systems and firewalls.		 None
None
None

45

Evaluation Items Implementation status Implementation status Implementation status Deviations from the
Corporate
Governance
bestpractice
Principles for
TWSE/tpex Listed
Companies
And the reasons
Yes No Summary description
(IV) Has the Company formulated internal
regulations to prevent insiders from trading
securities using undisclosed information on
the market?		 (IV) The Company has established its Procedures for Handling Material Inside
Information, Code of Conduct or Ethics of Employees, Code of Ethical Conduct, and
Regulations for Employees' Complaints according to laws and regulations. It provides
educational training to Directors, managers, and employees upon the establishment of
relevant laws and regulations and provides educational training to new Directors,
managers, and employees in due course. Please refer to Attachments 1, 2, 3, and 4 of
the handbook.		 None
III. Composition and responsibilities of the Board of
Directors
(I) Is a diversification policy formulated and
implemented for the composition of Board
members?
(II) In addition to the Remuneration Committee and
the Audit Committee established in accordance
with law, has the company voluntarily set up
other functional committees?
(III) Has the Company established its Rules for
Performance Evaluation of Board of Directors
and the evaluation methods, conducted regular
performance evaluation each year and provided
the results to the Board as the reference for
individual Directors' remuneration and
nomination for re-appointment?




(I)
Seven Directors (including Independent Directors) of the Company possess operating
experience or academic experiences; stringent procedures are adopted for the
nomination of members, with their expertise taken into consideration. The election of
the Directors of the Company adheres to the diversification policy according to the
"Regulations for the Election of Directors and Supervisors," including professional
knowledge and skills: professional background (i.e., law, accounting, industry, finance,
marketing, or technology), professional skills, and industry experiences.
(II)
The Company has established its "Remuneration Committee" and established its duties
in accordance with the spirit of the Securities and Exchange Act for operations. In the
future, it will establish other functional committees according to laws and regulations
and the operating scale of the Company.
(III) The Company has established Regulations for the Performance Evaluation of the
Board and periodically carries out the performance evaluation each year according to
the law. It has also amended the provisions of Article 31 of the Articles of
Incorporation and established the Regulations for the Performance Evaluation of
Directors and Supervisors and intended to periodically evaluate Board performance at
the end of each year, regularly examine the efficacy of the Board, and report to the
Board.
None

None
None

46

Evaluation Items Implementation status Deviations from the
Corporate
Governance
bestpractice
Principles for
TWSE/tpex Listed
Companies
And the reasons
Yes No Summary description
(IV) Has the Company regularly evaluated the
independence of cpas?		 (IV) The Company regularly evaluates the independence of cpas each year and reports to
the Board regarding the evaluation results.
1.
The evaluation system is as follows:
Regularly evaluate the independence of cpas and obtain the Statement of
Independence issued by cpas each year.
2.
The evaluation results are as follows:
The Company has executed the independence and adequacy evaluation of cpas.
On March 12, 2024,
The Board has approved the resolution that cpas are not related parties of the
Company and that there was no interest between them and the Company and has
obtained the Statement of Independence issued by cpas.		 None
IV.
Has the Company allocated an appropriate
number of qualified persons and appointed a chief
of corporate governance in charge of corporate
governance affairs (including but not limited to
furnishing information required for business
execution by Directors and supervisors, assisting
Directors and supervisors to comply with laws,
handling matters relating to Board meetings and
shareholders' meetings according to laws, and
preparing minutes of Board meetings and
shareholders' meetings)?









The Company’s Board of Directors has approved the resolution to appoint New Business
Development Department Assistant Vice President Cai Xing-Juan (attached to the President's
Office Secretariat) to concurrently act as Chief of corporate governance. The Assistant Vice
President of the New Business Development Department has served as a managerial officer
in charge of corporate governance affairs in a public company for more than three years.
The following affairs are handled by the Chief of corporate governance:
1.
Board of Directors meeting and Shareholders' meeting.
2.
Meeting minutes for Board of Directors meeting and Shareholders' meeting.
3.
Assisting Directors in their appointment and continued education.
4.
Providing Directors with the information necessary to perform their duties.
5.
Assisting Directors in complying with regulations.
6.
Report to the Board of Directors the examination results of whether the qualifications
of independent directors comply with relevant laws and regulations during the
nomination, election, and tenure.
7.
Manage affairs related to Director changes.
8.
Other matters stipulated in the Company's Articles of Incorporation or contracts, etc.
The Chief of corporate governance has executed relevant operations regarding the above
responsibilities in 2023 and completed 18 hours of continuing education during that year. For
details on the continuingeducation, please refer topage 109of thisyear's Annual Report.		 None
The Management Department of the Company is responsible for handling and assisting in
legal affairs, legal compliance, company registration, and alteration registration of the
Company, and all relevant registration documents require the Finance Department to sign for
approval.

47

Evaluation Items Implementation status Deviations from the
Corporate
Governance
bestpractice
Principles for
TWSE/tpex Listed
Companies
And the reasons
Yes No Summary description
V. Has the Company established communication
channels with stakeholders (including but not
limited to shareholders, employees, customers,
and suppliers), set up a section for stakeholders
on its corporate website, and responded
appropriately to important corporate social
responsibility issues that are of concern to
stakeholders?		 The Company has established a spokesperson system that is dedicated to handling relevant
matters. For suppliers, customers, banks, investors, and other stakeholders, the Company has
established appropriate communication channels and set up a stakeholder section on its
website.		 None
VI.
Has the company appointed a professional
stock affairs agency to handle matters for
shareholder meetings?		 The Company engages the Register & Transfer Agency Department of Yuanta Securities. None
VII. Public disclosure of information
(I) Has the Company set up a website to disclose
finance and business matters and corporate
governance information?
(II) Has the Company adopted other means of
information disclosure (such as setting up an
English website, appointing dedicated personnel
responsible for the collection and disclosure of
Company information, implementing a
spokesperson system, posting the Company's
earnings calls on its website,etc.)?



(I)
The Company has established an English website and updated the latest product
information and relevant information at all times, and disclosed information on finance
and business regularly according to relevant requirements.
(II)
The Company has disclosed relevant finance and business information on MOPS
regularly or from time to time according to the requirements of the TWSE, established
an English website that discloses the latest product information, and established and
implemented a spokesperson system that is responsible for providing services to
investors.
None
None
(III) Has the Company published and declared its
annual financial statements within two months
from the end of the fiscal year and published
and declared its Q1, Q2 and Q3 financial
statements along with the monthly business
performance statements before the prescribed
deadline?		 (III) The Company declared its Q1, Q2 and Q3 financial statements, along with the
monthly business performance statements, before the prescribed deadline and intended
to announce and declare its annual financial statements within two months from the
end of the fiscal year.		 None
VIII. Does the Company have other important
information that is helpful to understand its
implementation of corporate governance
(including but not limited to employees'
interest,employee care,investor relations,		 (I)
Employees' interest: The Company has been protecting employees' legal interests
according to the Labor Standard Act and treated employees with integrity.
(II)
Employee care: We have established a healthy relationship of mutual trust with
employees through improving the benefits system that stabilizes employees' life and
a favorable educational trainingsystem.(i.e.,subsidies for employees' club
None

48

Evaluation Items Implementation status Deviations from the
Corporate
Governance
bestpractice
Principles for
TWSE/tpex Listed
Companies
And the reasons
Yes No Summary description
supplier relations, stakeholder rights,
continuing education of Directors and
supervisors, implementation of risk
management policies and risk measurement
standards, implementation of customer
policies, the Company's purchase of liability
insurance for Directors and supervisors)?		 activities, provision of cultural, entertainment, and health inspection subsidies, and
parking lot.)
(III)
Investor relations: There is a spokesperson in place who is dedicated to handling
shareholders' recommendations.
(IV)
Supplier relations: The Company has maintained healthy relations with suppliers.
(V)
Stakeholders' interest: Stakeholders may have communication with and
recommendations to the Company to protect their legal interest.
(VI)
Directors' continuing education: Directors of the Company possess industry and
professional backgrounds and experiences in operating and management practices.
(VII)
Implementation of risk management policies and risk measurement standards: The
Company has established its Procedures for Handling Material Inside Information,
Code of Conduct or Ethics of Employees, Code of Ethical Conduct, Regulations for
Employees' Complaints, and Procedures for the Protection of Personal Data; please
refer to Attachments 1, 2, 3, 4, and 5 of the handbook.
(VIII)
Implementation of customer policies: The Company maintains stable and healthy
relationships with customers to create its profits.
(IX)
Purchase of liability insurance for Directors of the Company: The Company has
purchased liability insurance for Directors.
(X)
Post-employment benefit plan
1.
Defined contribution plan: 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.
2.
Defined benefit plan: The pension system, organized in accordance with the
"Labor Standards Act" of Taiwan, 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 2% 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 bythe end of March in the following year. The Bureau of Labor Funds,

49

Evaluation Items Implementation status Deviations from the
Corporate
Governance
bestpractice
Principles for
TWSE/tpex Listed
Companies
And the reasons
Yes No Summary description
Ministry of Labor, is entrusted with the management of the account, and the
Company has no right to affect the investment and management strategies.
IX. Please explain improvements that have been made based on the latest results of the Corporate Governance Evaluation issued by the Taiwan Stock Exchange Corporation Governance
Center,andpropose matters and measures for matters notyet improved.		 IX. Please explain improvements that have been made based on the latest results of the Corporate Governance Evaluation issued by the Taiwan Stock Exchange Corporation Governance
Center,andpropose matters and measures for matters notyet improved.		 IX. Please explain improvements that have been made based on the latest results of the Corporate Governance Evaluation issued by the Taiwan Stock Exchange Corporation Governance
Center,andpropose matters and measures for matters notyet improved.		 IX. Please explain improvements that have been made based on the latest results of the Corporate Governance Evaluation issued by the Taiwan Stock Exchange Corporation Governance
Center,andpropose matters and measures for matters notyet improved.
Category of indicator Content of indicator Whether any
improvement is
made		 Descriptions of matters not yet improved
Protect shareholders' interest and
treat shareholders fairly		 Has the Company reported the remuneration collected by Directors at the annual
shareholders' meeting (including the remuneration policy, individual remuneration
The Company will decide in accordance with relevant
content, and amount)? No
specifications based on the operating status of the Company.
Does the company establish written regulations for financial transactions between

related parties? The content should include management procedures for transactions
such as purchases, sales of goods, acquisition, or disposal of assets, and significant
The Company will decide in accordance with relevant
transactions should be approved by the Board of Directors and agreed upon by the
No
specifications based on the operating status of the Company.
shareholders' meeting or reported?
Has the annual shareholders' meeting been attended by over half of the Directors

(including at least one Independent Director) and the convener of the Audit Committee

(or at least one supervisor)? Has the list of attendance been disclosed in the meeting

Yes		 Execute according to relevant specifications.
minutes?
Has the Company convened its annual shareholders' meeting by the end of May? The Company will decide in accordance with relevant
No
specifications based on the operatingstatus of the Company.
Has the Company uploaded the meeting handbook and supplementary information for

the shareholders' meeting 30 days before the annual shareholders' meeting?
Yes		 Execute according to relevant specifications.
Has the Company uploaded the annual report 18 days before the annual shareholders'
meeting? Yes Execute according to relevant specifications.

50

Whether any
Category of indicator Content of indicator
improvement is		 Descriptions of matters not yet improved
made
Has the Company uploaded the English meeting notice, meeting handbook, and The Company's operating scale is relatively small, and the foreign
supplementary information 30 days before the annual shareholders' meeting? No investment ratio is relatively low; therefore, the English meeting
notice is notprovided atpresent.
Has the Company uploaded the English annual report sixteen days before the annual

shareholders' meeting?		 Yes Execute according to relevant specifications.
Has the Company established and disclosed the internal specifications on its website
regarding the prohibition of trading securities by Directors, employees, or other
Protect shareholders' interest and insiders by using information undisclosed to the market that includes (but is not limited
treat shareholders fairly to) the prohibition of trading shares by Directors during the lock-up period 30 days and The Company will decide in accordance with relevant
No
15 days before the announcement of the financial statements and quarterly financial specifications based on the operating status of the Company.
statements) and specify the implementation status?
Does the company's shareholders' meeting adopt live online broadcasting, or upload
uninterrupted audio and video recordings of the entire meeting after the shareholders' The Company will decide in accordance with relevant
No
meeting? specifications based on the operating status of the Company.
The Company has established relevant corporate governance
Has the Company formulated its Corporate Governance Best Practice Principles that policies; please refer to the corporate governance implementation
Yes
are approved by the Board? in the annual report and the regulations of the Company under
corporategovernance on its Chinese website.
Four Directors and four Independent Directors of the Company
possess operating experience or academic experiences; stringent
Has the Company established the diversification policies of its Board members and
procedures are adopted for the nomination of members, with their

disclosed the substantial management objectives and implementation status of the		 No
expertise taken into consideration. The Company will continue to
diversification policies on its website and in the annual report?
promote relevant diversification policies according to the
Regulations for the Performance Evaluation of the Board.
The Company will decide in accordance with relevant
Are the Chairman and President or a position of the same level (top-level manager) the No
li ihi h fi d f kihi? specifications based on the operating status of the Company.
Strengthen the Board's structure same person, or a spouse or a reatve wtn te rst egree o nsp
and operation: Has the Company established the succession plan for Board members and the
The Company will decide in accordance with relevant

important management and disclosed the operations on its website or in the annual		 No

report?		 specifications based on the operating status of the Company.
The Company has established the Audit Committee according to
the law; for the qualification and experience of members of the
Has the Company disclosed the qualification and experience of members of the Audit
Yes Audit Committee, the annual working highlight, and operating
Committee, the annual working highlight, and operating status?
status, please refer to the corporate governance implementation in
the annual report.
Has the Company established a Nomination Committee, Risk Management Committee,
Sustainable Development Committee, or other functional committees not specified by
the law with a number of members no less than three persons, over half of the members The Company will decide in accordance with relevant

No
being Independent Directors, and one member or above possessing the professional specifications based on the operating status of the Company.
ability required by the committee, and disclosed the composition, duties, and operating
status?

51

Whether any
Category of indicator Content of indicator
improvement is		 Descriptions of matters not yet improved
made
Has the Company disclosed the separate communication status (i.e., communication The Company has disclosed the communication status between
methods for the financial statements and the finance and business status of the Independent Directors with the chief auditor and cpas under the
Yes
Company, matters, and results) between Independent Directors with the chief auditor Board of corporate governance in the investor section on its
and cpas on its website? Chinese website.
Has the Board of the Company regularly (at least once a year) evaluated the
independence and qualifications of cpas according to Audit Quality Indicators (aqis) Yes Execute according to relevant specifications.
and dulydisclosed the evaluationprocedures in its annual report?
The Company has regularly performed internal performance
Has the Company regularly performed internal performance evaluations of functional
evaluations of functional committees and disclosed the
committees (at least including the Audit Committee and the Remuneration Committee)
Yes implementation status and evaluation results in the annual report;
each year and disclosed the implementation status and evaluation results on its website
please refer to the corporate governance operation in the annual
or in the annual report?
report.
Is the Company’s chief of corporate governance a full-time position? Has the Company
The Company will decide in accordance with relevant
specified its scope of powers and continuing education status on its website and in the No
specifications based on the operating status of the Company.
annual report?
Does the company have a functional committee at the level of the audit committee or
board of directors (such as a risk management committee) to oversee risk management,
and does it establish risk management policies and procedures approved by the board The Company will decide in accordance with relevant

No
Strengthen the Board's structure of directors, disclose the organizational structure of risk management, risk management specifications based on the operating status of the Company.

and operation:		 procedures, and their operation, and report to the board of directors at least once a
year?
Has the Regulations for the Performance Evaluation of the Board formulated by the

The Company has established Regulations for the Performance
Company been approved by the Board and stated that it shall execute an external
Evaluation of Directors and Supervisors and intends to
evaluation at least every three years? Has the Company executed the evaluations in the


Yes		 periodically evaluate Board performance at the end of each year,
year under evaluation or the past two years and disclosed the implementation status and
regularly examine the efficacy of the Board, and report to the
evaluation results on its website or in the annual report?
Board.
Have Independent Directors of the Company completed the continuing education based
The Company has encouraged Independent Directors to
on the number of hours specified in the "Directions for the Implementation of Continuing

No		 participate in relevant continuing education programs; however, it
Education for Directors and Supervisors of TWSE Listed and tpex Listed Companies"?
is subject to their own decisions.
Has the Company established an intellectual property management plan that is linked to
the operating objectives, disclosed the implementation status on its website or in the The Company will decide in accordance with relevant

No
annual report, and reported to the Board at least once a year? specifications based on the operating status of the Company.
Is there at least one person among the company's internal auditors who possesses the
certificate as a CIA or CISA, or has passed the CPA examination by holding a The Company will decide in accordance with relevant

No
qualification certificate? specifications based on the operating status of the Company.
Has the Company concurrently issued material information in English? Yes Execute according to relevant specifications.
The Company will decide in accordance with relevant
Improve information transparency Has the Company announced its annual financial statements audited and certified by
No
cas within two months from the end of a fiscalear? specifications based on the operatingstatus of the Company.
p y
Has the Company uploaded the English annual financial statements sixteen days before The Company has provided English annual financial statements

Yes
the annual shareholders' meeting? in 2023 accordingto relevant specifications.

52

Whether any
Category of indicator Content of indicator
improvement is		 Descriptions of matters not yet improved
made
Has the Company disclosed its English interim financial statements within two months The Company will decide in accordance with relevant

No
after the declaration deadline for the Chinese interim financial statements? specifications based on the operating status of the Company.
Does the company upload to the MOPS the information on changes in shareholding of The Company will decide in accordance with relevant

No
insiders for theprevious month before the 10th dayof each month? specifications based on the operatingstatus of the Company.
Has the Company disclosed the substantial and accurate dividend policy in its annual The Company will decide in accordance with relevant

No
report? specifications based on the operatingstatus of the Company.
Has the Company voluntarily disclosed the individual remuneration of Directors and The Company has disclosed the individual remuneration of

Yes
supervisors in its annual report? Directors accordingto relevant specifications.
Has the Company disclosed the linkage between the performance evaluation and The Company will decide in accordance with relevant

No
Improve information transparency remuneration of Directors and managers in its annual report? specifications based on the operatingstatus of the Company.
Does the Company website disclose information related to finance, business, and

Yes		 Execute according to relevant specifications.
corporategovernance?
Has the Company established an English website that includes information related to

Yes		 Execute according to relevant specifications.
finance,business,and corporategovernance?
Has the Company been invited (initiated) to convene at least two investor conferences?
The Company will decide in accordance with relevant
Is the gap between the first and the last investor conferences during the year under
No
specifications based on the operating status of the Company.
evaluation over three months?
The Company has disclosed the individual remuneration of the
Has the Company voluntarily disclosed the individual remuneration of the President and

Yes		 President and Vice Presidents in its annual report according to
Vice Presidents in its annual report?
relevant specifications.
Has the Company established a dedicated (concurrent) department for sustainable

development to carry out risks assessments for environmental, social, or corporate
governance issues related to the Company's operations based on the principle of
The scale of the Company is relatively small, and the Company
materiality and establish relevant risk management policies or strategies with the Board
No
will make additions based on the circumstances in the future.
monitoring the promoting status of sustainable development, and disclosed them on its
website and in the annual report?
Has the Company established a dedicated (concurrent) department for ethical corporate

management to be responsible for the formulation and supervision of ethical corporate
management policies and preventive plans? Has the Company described the operation The scale of the Company is relatively small, and the Company


No
and implementation status of the department established on its website or in the annual will make additions based on the circumstances in the future.
report and reported to the Board at least once a year?
Promote sustainable development
Has the Company regularly disclosed the substantial plans and implementation The scale of the Company is relatively small, and the Company

No
achievements of ESG on its website, or in the annual report or Sustainability Report? will make additions based on the circumstances in the future.
Has the Company prepared its Sustainability Report in accordance with the GRI
standards issued by the GRI and uploaded it to MOPS or its website before the end of The scale of the Company is relatively small, and the Company

No
September? will make additions based on the circumstances in the future.
Has the Sustainability Report prepared by the Company been verified by a third-party
The scale of the Company is relatively small, and the Company

certifying institution?
No
will make additions based on the circumstances in the future.

53

Whether any
Category of indicator Content of indicator
improvement is		 Descriptions of matters not yet improved
made
The Company has disclosed the protection policies related to
working environments and personal safety under the declaration
Has the Company established policies and substantial management plans to protect
of human rights protection of corporate governance in the investor
human rights with reference to the International Bill of Human Rights and disclosed
Yes
section on its Chinese website. Indicator Category Content of
policies and implementation status on its website or in the annual report?
indicator Whether any improvement is made Descriptions of
matters notyet improved
The Company's scale is relatively small, and the foreign
Promote sustainable development Has the Company uploaded the English Sustainability

No		 investment ratio is relatively low, and the Company will make
Report on MOPS and its website?
additions based on the circumstances in the future.
Has the Company established policies to appropriately reflect operational performance
or results in employee compensation, and disclose this on the Company's website or in The scale of the Company is relatively small, and the Company

No
the annual report? will make additions based on the circumstances in the future.
The Company has disclosed the employee benefit measures,
Has the Company disclosed various employee benefit measures, retirement systems, and

Yes		 retirement systems, and implementation status in the annual
the implementation status on its website and in the annual report?
report.
At present, the Company has no sufficient internal/external
Has the Company disclosed the annual emissions of ghgs, water consumption, and the resources to evaluate the emissions of CO2 or other ghgs, and it

No
total weight of wastes in the past two years? will make additions according to laws, regulations, and policies in
the future.
At present, the Company has no sufficient internal/external
Has the Company established management policies for GHG reduction or water resources to evaluate the emissions of CO2 or other ghgs, and it
consumption, or other waste reduction (including the reduction objective, promoting
No		 will make additions according to laws, regulations, and policies in
Promote sustainable development
measures, and the achievement)? the future.
Has the Company obtained ISO 14001, ISO50001, or similar environmental or energy
The scale of the Company is relatively small, and the Company
management system verification? No
will make additions based on the circumstances in the future.
Has the Company disclosed the identification of stakeholders, issues of concern,
The scale of the Company is relatively small, and the Company
communication channels, and response methods on its website or in the annual report? No
will make additions based on the circumstances in the future.
Does the company's website or annual report disclose the ethical corporate
management policy approved by the board of directors, which clearly specifies specific

practices and preventive measures against dishonest conduct, and explains the		 Yes Execute according to relevant specifications.
implementation status?
Has the Company established and disclosed the details of the whistleblowing system
for illegal (including corruption) and unethical conduct of internal and external The scale of the Company is relatively small, and the Company
No
personnel on its website? will make additions based on the circumstances in the future.
Has the Company disclosed the supplier management policies it formulated that
require suppliers to comply with relevant specifications on environmental protection,
The scale of the Company is relatively small, and the Company
occupational safety and health, or labor rights issues on its website or in the annual No
will make additions based on the circumstances in the future.
report or the Sustainability Report and described the implementation status?

54

Category of indicator Whether any
Content of indicator
improvement is		 Descriptions of matters not yet improved
made
Promote sustainable development Has the Company disclosed the governing status, strategies, risk management,
indicators, objectives, and relevant information regarding risks and opportunities The scale of the Company is relatively small, and the Company
No
related to climate based on the TCFD structure? will make additions based on the circumstances in the future.
Does the company invest in environmentally sustainable machinery and equipment
related to energy conservation or green energy, or invest in domestic green energy
industries (such as renewable energy power plants), or issue or invest its funds in The scale of the Company is relatively small, and the Company
No
sustainable development financial products with substantive benefits in green or social will make additions based on the circumstances in the future.
impact investment projects, and disclose its investment situation and specific benefits?
Has the Company established diversification policies or promoted gender equity
The scale of the Company is relatively small, and the Company
policies, and disclosed the implementation status? No
will make additions based on the circumstances in the future.
Has the Company assessed risks or opportunities to the community and taken
corresponding measures, and disclosed its specific measures and implementation The scale of the Company is relatively small, and the Company
No
effectiveness on the Company's website, annual report, or sustainability report? will make additions based on the circumstances in the future.
Has the company allocated resources to support domestic cultural development, and
disclosed its methods of support and outcomes on the Company's website, annual The scale of the Company is relatively small, and the Company
No
report, or sustainability report? will make additions based on the circumstances in the future.

55

  • (4) If the Company has established its Remuneration Committee, the composition, responsibilities, and operations of the Committee shall be disclosed:

A. Information on members of the Remuneration Committee

Identity Criteria
Name		 Professional qualifications and
experience		 Independence Number of
concurrent duty
as a
Remuneration
Committee
member at a
public company
Convener Huang Yun-
Ming		 Ph.D. In differential dynamical,
University of Minnesota. Used to
be a consultant for AT&T and a
chief engineer for Quintum.
Possess the working experience
required for business and
corporate operations.		 1. The person, his spouse, or his second-
degree relatives do not serve as
directors, supervisors or employees of
the Company.
2. No share of the Company is held by the
person, spouse, or relatives within the
second degree of kinship (or in others'
name).
3. Not a director, supervisor, or employee
of a company which has a specific
relationship with the Company.
4. No compensation is received for
providing business, legal, financial,
accounting, and other services to the
Company or its affiliates for the most
recent two years.		 0
Independent
director
Independent
director		 Jiang Min-
Shiung		 National Taipei Institute of
Technology. Used to be the
chairman of Acrosser Technology
Co., Ltd.. Acrosser Technology
Co., Ltd. Possess the working
experience required for finance,
accounting, and corporate
operations.		 1. The person, his spouse, or his second-
degree relatives do not serve as
directors, supervisors or employees of
the Company.
2. No share of the Company is held by the
person, spouse, or relatives within the
second degree of kinship (or in others'
name).
3. Not a director, supervisor, or employee
of a company which has a specific
relationship with the Company.
4. No compensation is received for
providing business, legal, financial,
accounting, and other services to the
Company or its affiliates for the most
recent two years.		 0
Independent
director		 Chang Guo-
Hua		 Bachelor's degree from Chiao
Tung University and a master's
degree from Arizona State
University. Used to be the co-
founder of starvox and
The engineering vice president of
CTO. Possess the working
experience required for business
and corporate operations.		 1. The person, his spouse, or his second-
degree relatives do not serve as
directors, supervisors or employees of
the Company.
2. No share of the Company is held by the
person, spouse, or relatives within the
second degree of kinship (or in others'
name).
3. Not a director, supervisor, or employee
of a company which has a specific
relationship with the Company.
4. No compensation is received for
providing business, legal, financial,
accounting, and other services to the
Company or its affiliates for the most
recent two years.		 0
Independent
director		 Ko Shu-Mei Department of Business
Administration, Providence
University. Used to be the
assistant vice president of the
management section of
aquaoptics.
Acrosser Technology Co., Ltd.
Possess the working experience
required for finance, accounting,
and corporate operations.		 1. The person, his spouse, or his second-
degree relatives do not serve as
directors, supervisors or employees of
the Company.
2. No share of the Company is held by the
person, spouse, or relatives within the
second degree of kinship (or in others'
name).
3. Not a director, supervisor, or employee
of a company which has a specific
relationship with the Company.
4. No compensation is received for
providing business, legal, financial,
accounting, and other services to the
Company or its affiliates for the most
recent two years.		 0

56

B. Information on the operation of the Remuneration Committee

  • a. The Company's Remuneration Committee comprises four members.

  • b. Term of office of members of the 5th session: The term of office from June 29, 2022 to June 28, 2025. Two meetings were held for the 5th session of the Remuneration Committee in the most recent year, and the qualification and attendance of members are as follows:

Title Name Number of attendance (B) Number of
attendance by proxy		 Attendance rate (%)
(B/A)		 Remarks
Convener HuangYun-Ming 2 0 100
Committee member JiangMin-Shiung 2 0 100
Committee member ChangGuo-Hua 2 0 100
Committee member Ko Shu-Mei 2 0 100
Other matters to be recorded:
I. If the Board does not adopt or amend the recommendations from the Remuneration Committee, the date, session, content of
proposals, resolution of the Board, and the Company's response to the recommendations of the Remuneration Committee shall
be specified (if the remuneration approved by the Board is more favorable than the recommendation of the Remuneration
Committee, the differences and reasons shall be specified): None.
II. For any objections or qualified opinions raised by a member of the Remuneration Committee against a resolution with records
or written statements, the date of the Remuneration Committee meeting, session, content of proposals, opinions of all members,
and the Company's response to the opinions of members shall be described: None.

C. Disclose the 2023 date of meetings, content of proposals, resolutions, and the Company's response to the Remuneration Committee's opinion
Remuneration Committee Content of proposals and the subsequent
response		 Resolution Company's handling of the
remuneration committee's
opinions
2023.08.10 1. Review and discussion of the
proposal for the distribution of
employee remuneration and Director
remuneration in 2022
2. Proposal for the remuneration policy
for the Chairman and Directors
3. Proposal for the remuneration policy
of managers
4. Proposal for the remuneration policy
of other managers
5. Proposal for the working plan in 2024		 Approved by all
members of the
Remuneration
Committee		 Proposed to the Board
and approved by
receiving the consent of
all attending Directors
2024.03.12 1. Review and discussion of the
proposal for the distribution of
employee remuneration and Director
remuneration in 2023
2. Proposal for the remuneration of the
Chairman and managers
3. Proposal for the remuneration of
other managers		 Approved by all
members of the
Remuneration
Committee		 Proposed to the Board
and approved by
receiving the consent of
all attending Directors

57

(5) Implementation of promoting sustainable development and the differences from the Sustainable Development Best Practice Principles for TWSE/tpex Listed Companies and the reasons therefor

Implementation Items Implementation status Implementation status Implementation status Deviations from the Sustainable
Development Best Practice
Principles
For TWSE/tpex Listed
Companies
And the Reasons
Yes No Summary description
I.
Has the Company established a
governance framework for
promoting sustainable
development, and established an
exclusively (or concurrently)
dedicated unit to be in charge of
promoting sustainable
development?		 Has the board of directors authorized senior management to handle related matters under the supervision
of the board?		 The Company has not established
a governing structure for the
promotion of sustainable
development or a dedicated
(concurrent) department.
II.
The Company will establish the
governing structure for the
promotion of sustainable
development or the dedicated
(concurrent) department based on
the actual requirements in the
future. II.		 The Company has established evaluations of environmental, social and corporate governance issues
related to the Company's operations and relevant risk management policies or strategies, and the
environmental, social and corporate governance issues have no material effect on investors and other
stakeholders of the Company.
The Company complies with relevant labor regulations and respects basic labor human rights principles
generally recognized internationally, protects the legal interest of employees, and has established relevant
management rules and systems.
None
III.
Environmental Issues
(I)
Has the Company set up an
appropriate environmental
management system based on the
characteristics of its industry?		 The Company has established the ISO14001 environmental management system. Measurement of
operating environments: The Company implements measures for factors in operating environments every
six months to ensure the health of employees. The measurement items include noise, air quality, lead
operations, and illuminance. All measurement items shall comply with the requirements under laws and
regulations, or improvement measures shall be adopted. The Company has established emergency
management measures: The Company has established emergency management measures to ensure the
reduction of the possibility of impacts and hazards on the environment and safety upon the occurrence of
emergencies and the immediate response upon the occurrence of any disaster. The Company also
cooperates with the fire control exercise once every six months of the building and appoints personnel to
join theprogram accordingto the management committee of the building.
None
(II)
Is the Company committed to
improving energy efficiency and to
the use of renewable materials with
low environmental impact?		 Saving water and electricity resource: To effectively utilize limited water resources in Taiwan, the
Company promotes the water-saving concept with employees at all times and changes to water-saving
faucets to avoid wasting water resources. For electricity, apart from installing automated power factor
adjustment equipment, high power is the key condition for selecting power consumption equipment to
improve power consumption efficiency. We maintain sufficient lighting for the operating areas. For non-
operating areas, turn off or only keep lighting that will not affect the safety of personnel; personnel shall
turn off the light to save power consumption when leaving. The A/C of offices and meeting rooms shall
maintain the setting of an appropriate temperature; when there are fewer persons or when they leave, the
temperature of A/Cs shall be appropriatelyadjusted or turned off.		 None

58

Implementation Items Implementation status Implementation status Implementation status Deviations from the Sustainable
Development Best Practice
Principles
For TWSE/tpex Listed
Companies
And the Reasons
Yes No Summary description
(III) Has the Company evaluated the
potential risks and opportunities of
climate change to the Company at
present and in the future and
adopted countermeasures for related
issues?
(IV) Has the Company made statistics on
ghgs emissions, water consumption,
and the total weight of wastes for
the past two years and formulated
policies for ghgs emissions
reduction, water consumption
reduction, or other waste
management?



For waste management and recycling, in response to the energy-saving and carbon dioxide reduction
policies for the achievements of sustainable use of resources, the Company prioritizes the reduction of
garbage volume for the management waste, followed by the consideration for outsourced reutilization.
To duly grasp the flow of waste, we carefully selected the waste clearing supplier and confirmed the
certifications, on-site operations, and the traffic route to ensure all wastes are duly processed or reused
legally, avoiding a second time of pollution to the environment.
The Company is a network equipment solution supplier, and major potential risks, including the increase
in raw material costs and exchange rate fluctuations, may cause impacts and affect its operations.
However, in terms of recycling efficacy, the Company encourages employees to recycle waste paper for
reuse, save electricity, and reduce water consumption to minimize operating costs.
Saving water and electricity resource: To effectively utilize limited water resources, the Company
promotes the water-saving concept with employees at all times and changes to water-saving faucets to
avoid wasting water resources. For electricity, apart from installing automated power factor adjustment
equipment, high power is the key condition for selecting power consumption equipment to improve
power consumption efficiency. We maintain sufficient lighting for the operating areas. For non-operating
areas, turn off or only keep lighting that will not affect the safety of personnel; personnel shall turn off
the light to save power consumption when leaving. The A/C of offices and meeting rooms shall maintain
the setting of an appropriate temperature; when there are fewer persons or when they leave, the
temperature of A/Cs shall be appropriately adjusted or turned off to achieve energy-saving and carbon
dioxide reduction and reduce damage to climate and environments.		 None
None
IV.
Social Issues
(I)
Has the Company formulated
relevant management policies and
procedures in accordance with
relevant regulations as well as the
International Bill of Human Rights?
(II)
Has the Company established
reasonable employee welfare
measures (including remuneration,
vacations, and other benefits), and
appropriately reflect operational
performance or results in employee
remuneration?


The Company complies with relevant labor regulations and respects basic labor human rights principles
generally recognized internationally, protects the legal interest of employees, and has established relevant
management rules and systems.
The Company has established relevant employee welfare measures in accordance with the Labor
Standards Act, and conducts regular annual assessments based on the Company's annual operational
performance, issuing project and performance bonuses annually to share the results of success with
employees.

None
None

59

Implementation Items Implementation status Deviations from the Sustainable
Development Best Practice
Principles
For TWSE/tpex Listed
Companies
And the Reasons
Yes No Summary description
(III) Does the Company provides
employees with a safe and healthy
working environment and regularly
organize safety and health
education for employees?
(IV) Has the Company established an
effective career development
training program for employees?
According to the requirements under labor safety and health regulations, the Company provides standard
operating environments, performs environmental factor tests for CO2, lead operations, and illumination
regularly according to the requirements, and tests drinking water regularly according to the requirements
to comply with the requirements under regulations; it also organizes safety and health education
regularly for employees.
Relevant labor safety personnel of the Company have participated in educational training, and there are a
total of 16 persons who have obtained certificates related to labor safety and health.
The Company has a comprehensive employee training plan and organizes diverse educational training
based on different duties, expertise, and requirements. Meanwhile, it assists in the functional
development of employees, improves their professional literacy, and provides secondary specialty
development plans in due course to enrich employees' careers.
Internal and external educational training of ethical corporate management organized by the Company:
In 2023, regarding the internal and external educational training of ethical corporate management
organized (including compliance with ethical corporate management regulations, occupational safety and
health management, information safety incident identification and handling, accounting system, internal
control, and other relevant programs), the number of participants was 286, with a total number of man-
hour reaching 209,066 hours.		 None

None
(V)
Has the Company complied with
relevant regulations and
international standards with regard
to customer health and safety,
customer privacy, marketing, and
labeling of products and services,
and established relevant policies to
protect the interests of consumers or
customers and complaint
procedures?
(VI) Has the Company formulated
supplier management policies that
require suppliers to comply with
relevant specifications on
environmental protection,
occupational safety and health, or
labor rights issues?

In 2006, in response to the Restriction of Hazardous Substances (rohs) of the EU and the requirements of
customers regarding hazardous substance management, the Company continued to implement the
management plans for suppliers' environmental protection, safety, and health and linked them with the
sustainable indicators of three major factors of environmental protection, social responsibility, and risk
management.
What is the implementation status? The Company has established the non-corruption commitment terms
and procurement order contract terms for suppliers to provide specifications related to issues of direct or
indirect offering, bribery, commission provision, rebates, or other inappropriate measures. If any
violation occurs, the Company may directly terminate or cancel orders or all contracts, and suppliers
shall compensate all damages and expenses that occurred thereof.		 None
None

60

Implementation Items Implementation status Implementation status Implementation status Deviations from the Sustainable
Development Best Practice
Principles
For TWSE/tpex Listed
Companies
And the Reasons
Yes No Summary description
V.
Has the Company referred to
international reporting standards or
guidelines in its preparation of the
sustainability report and other
reports which disclose the
Company's non-financial
information? Has the Company
obtained the assurance or
certification of a certifying
institution for the reports above?		 The Company's scale is relatively small, and the Company will make additions based on the
circumstances in the future.		 The Company will establish a
dedicated (concurrent)
department for corporate social
responsibility based on the actual
requirements in the future.
VI.
If the Company has adopted its own Sustainable Development Best Practice Principles based on the Sustainable Development Best Practice Principles for TWSE/tpex Listed Companies,
please describe any differences from the principles in the Company's operations:
The Company has always been complying with laws and regulations and spared no effort in environmental protection and public safety; however, it has not established the "Sustainable
Development Best Practice Principles for TWSE/tpex Listed Companies"; it will establish such principles as soon as possible according to laws and regulations.
VII. Other important information to facilitate a better understanding of the Company's promotion of sustainable development:
For details, please refer topages 58 to 61 of the handbook.

61

(6) Implementation of ethical corporate management and differences from the Ethical Corporate Management Best Practice Principles for TWSE/tpex Listed Companies and the reasons therefor

Item Implementation status
1. Describe the board of directors' and management's oversight and governance of
climate-related risks and opportunities.		 The company regularly reports to the board of directors and conducts quarterly control
of the schedule for greenhouse gas inventory and verification planning. As of June
2022, the company has appointed one full-time (or part-time) employee as a facilities
personnel and has established the following schedule for greenhouse gas inventory and
verification planning:
Inventory planning: Scheduled for October 2026
Verificationplanning: Scheduled for October 2027
2. Describe how the identified climate risks and opportunities affect the business,
strategy, and finances of the business (short, medium, and long term).		 In the future, the company will develop in accordance with international sustainability
standards and regulations, and, based on the specific circumstances of the industry and
the company, will continuously assess the potential impact of climate risks on its
operations. The company will gradually identify relevant climate risks and establish
corresponding management actions and strategies.
3. Describe the financial impact of extreme weather events and transformative actions.
4. Describe how climate risk identification, assessment, and management processes are
integrated into the overall risk management system.
5. If scenario analysis is used to assess resilience to climate change risks, the scenarios,
parameters, assumptions, analysis factors and major financial impacts used should be
described.		 The company has not yet implemented scenario analysis assessments. In the future, it
will consider whether to adopt such assessments based on its specific circumstances to
enhance resilience in facingclimate change risks.
6. If there is a transition plan for managing climate-related risks, describe the content of
the plan, and the indicators and targets used to identify and manage physical risks and
transition risks.		 The company has not yet formulated a transition plan for managing climate-related
risks. In the future, it will conduct detailed risk assessments and planning based on its
specific circumstances to mitigate climate-related risks.
7. If internal carbon pricing is used as a planning tool, the basis for setting the price
should be stated.		 The company has not yet used internal carbon pricing as a planning tool.
8. If climate-related targets have been set, the activities covered, the scope of greenhouse
gas emissions, the planning horizon, and the progress achieved each year should be
specified. If carbon credits or renewable energy certificates (recs) are used to achieve
relevant targets, the source and quantity of carbon credits or recs to be offset should
be specified.		 In response to climate change, the company has implemented an office energy-saving
plan, starting with reducing energy consumption in the office and among employees to
minimize harm to the climate and environment. In the future, the company will follow
the reference guidelines and relevant regulations issued by the competent authorities
to carry out greenhouse gas inventory and verification plans.
9. Greenhouse gas inventory and assurance status and reduction targets, strategy, and
concrete action plan		 The company's paid-in capital has not reached NT$5 billion. According to the
Financial Supervisory Commission's directive No. 11103849344, the disclosure of the
greenhouse gas inventory and assurance should be completed starting from 2026 and
2028, respectively. The company will continue to manage the completion of the
greenhouse gas inventory and verification disclosure schedule according to the
reference guidelines and relevant regulations issued by the competent authorities.

62

(7) Implementation of ethical corporate management and differences from the Ethical Corporate Management Best Practice Principles for TWSE/tpex Listed Companies and the reasons therefor

Companies and the reasons therefor
Evaluation Items Implementation status Deviations from the Ethical
Corporate Management
Best Practice Principles for
TWSE/tpex Listed
Companies and the
Reasons
Yes No Summary description
I.
Formulate ethical corporate management policy
and plan
(I)
Does the Company have an ethical corporate
management policy approved by its Board, and
bylaws and publicly available documents
addressing its policy and measures of ethical
corporate management, and commitment
regarding active implementation of such policy
from the Board and the senior management?
(II)
Has the Company established a risk assessment
mechanism against unethical conduct, analyzed
and assessed on a regular basis business activities
within their business scope which are at a higher
risk of being involved in unethical conduct, and
established prevention programs accordingly
which at least cover the prevention measures
against the conducts listed in Paragraph 2, Article
7 of the Ethical Corporate Management Best
Practice Principles for TWSE/GTSM Listed
Companies?
(III) Has the Company clearly set the operating
procedures, behavior guidelines, and punishment
and complaint system for violations in its
unethical conduct prevention program,
implemented it, and regularly reviewed and
revised it?


The Company has established terms of ethical conduct in contracts entered into with
external parties due to business activities. For those with records of unethical conduct, the
Company may perform a demotion, cease their rights, or exclude them from the list of
qualified suppliers; the Company has established its "Ethical Corporate Management Best
Practice Principles," which was implemented after being approved by the shareholders'
meeting in 2015.
The Company has formulated its working rules and regulations for rewards and punishments
and implements educational training for new employees.
The Management Department reviews contracts to prevent the risk related to the violation of
laws of contracts entered into, and the Audit Office audits and continues to follow up on the
implementation status from time to time.
The Company has established the "Ethical Corporate Management Best Practice Principles,"
which states that persons shall not have any private business conduct with companies having
dealings with the Company or accept gifts, rebates, or other illegal benefits leveraging their
duties or engage in other conducts that damage the Company's interest.
Compliant with the Ethical
Corporate Management
Best Practice Principles for
TWSE/tpex Listed
Companies


Compliant with the Ethical
Corporate Management
Best Practice Principles for
TWSE/tpex Listed
Companies


Compliant with the Ethical
Corporate Management
Best Practice Principles for
TWSE/tpex Listed
Companies
II.
The implementation of ethical corporate
management
(I)
Does the company assess the ethics records of
whom it has business relationship with and
include business conduct and ethics related
clauses in the business contracts?
The Company duly evaluates the credit of customers to avoid engaging in transactions with
those with unethical conduct, and it has established the "Ethical Corporate Management
Best Practice Principles," which was implemented after being approved by the shareholders'
meeting in 2015 and disclosed in the corporate governance section on its website.
Compliant with the Ethical
Corporate Management
Best Practice Principles for
TWSE/tpex Listed
Companies

63

Evaluation Items Implementation status Implementation status Implementation status Deviations from the Ethical
Corporate Management
Best Practice Principles for
TWSE/tpex Listed
Companies and the
Reasons
Yes No Summary description
(II)
Has the Company set up a dedicated department
that is subordinated to the Board to promote
ethical corporate management, and does it
regularly (at least once a year) report to the Board
on its ethical corporate management policy and
unethical conduct prevention program and
monitor their implementation?
(III) Does the Company establish policies to prevent
conflict of interests, provide appropriate
communication and complaint channels and
implement such policies properly?
(IV) Has the Company established effective
accounting and internal control systems in place
for the implementation of ethical corporate
management? Has the internal audit department
formulated relevant audit plans based on the
assessment results of unethical conduct risk to
perform audits on compliance with the unethical
conduct prevention program or engage cpas to
perform such audits?
(V)
Does the Company provide internal and external
education and training in ethical corporate
management on a regular basis?


If there are any matters related to the promotion of ethical corporate management, the
Management Department is responsible for the promotion, and it shall report to the Board
regarding the policies of ethical corporate management, plans for preventing unethical
conduct, and supervisory and implementation status at the end of each year.
The Company has established and implemented its "Ethical Corporate Management Best
Practice Principles," which mentioned the recusal of stakeholders.
To ensure the implementation of ethical corporate management, the Company has
established an effective accounting system and internal control system. In addition, our
internal auditors regularly perform audits on compliance with the abovementioned system
and communicate with cpas for the performance of improvement plans.
The Company will keep abreast of the development of specifications related to ethical
management, examine and amend relevant specifications of the Company, and promote to
employees and announce for general acknowledgment.		 Compliant with the Ethical
Corporate Management
Best Practice Principles for
TWSE/tpex Listed
Companies

Compliant with the Ethical
Corporate Management
Best Practice Principles for
TWSE/tpex Listed
Companies
Compliant with the Ethical
Corporate Management
Best Practice Principles for
TWSE/tpex Listed
Companies
Compliant with the Ethical
Corporate Management
Best Practice Principles for
TWSE/tpex Listed
Companies
III.
The operation of the Company's whistleblower
reporting system
(I)
Does the Company establish specific
whistleblowing and reward procedures, set up
conveniently accessible whistleblowing channels
and designate responsible individuals to handle
the complaints received?		 The Company has established its "Regulations for Employees' Complaints" (please refer to
Attachment 4); after the initial circumstances were verified for the opinion or complaint of
employees, the Company will make arrangements based on the working rules or regulations
for rewards and punishments.
Compliant with the Ethical
Corporate Management
Best Practice Principles for
TWSE/tpex Listed
Companies

64

Evaluation Items Implementation status Implementation status Implementation status Deviations from the Ethical
Corporate Management
Best Practice Principles for
TWSE/tpex Listed
Companies and the
Reasons
Yes No Summary description
(II)
Has the Company established its SOP for
investigating the complaints received, subsequent
measures to be adopted, and the related
confidentiality system after the investigation?		 The "Code of Ethical Conduct" states that the Company has established relevant procedures
or systems and allowed employees to acknowledge the safety protection of whistleblowers
without suffering from any revenge.		 Compliant with the Ethical
Corporate Management
Best Practice Principles for
TWSE/tpex Listed
Companies
(III) Has the Company adopted proper measures to
protect whistleblowers from inappropriate
disposals due to whistleblowing?		 The "Code of Ethical Conduct" states that the Company has established relevant procedures
or systems and allowed employees to acknowledge the safety protection of whistleblowers
without suffering from any revenge.		 Compliant with the Ethical
Corporate Management
Best Practice Principles for
TWSE/tpex Listed
Companies
IV.
Enhance Information Disclosure
Has the Company disclosed the content and
implementation results of its Ethical Corporate
Management Best Practice Principles on its website and
MOPS?
The Company has disclosed the content of its "Ethical Corporate Management Best Practice
Principles," and the promotional achievements shall be arranged subject to the requirements
under laws and regulations in due course.
Disclosures will be made
based on the actual
requirements in the future
V.
If the Company has adopted its own Ethical Corporate Management Best Practice Principles based on the Ethical Corporate Management Best Practice Principles for TWSE/tpex Listed
Companies, please describe any differences from the principles in the Company's operations:
The Company has established its "Ethical Corporate Management Best Practice Principles," which was submitted to and approved by the shareholders' meeting and implemented in June
2015. Disclosed as above,and there is no supplementarydisclosure atpresent.
VI.
Other important information to facilitate a better understanding of the Company's implementation of ethical corporate management (i.e., the examination and modification to the Ethical
Corporate Management Best Practice Principles established by the Company):
The Company complies with the Company Act, relevant specifications of TWSE/tpex, and relevant laws and regulations as the foundation of implementing ethical corporate management;
for business dealings with externalparties,it forbids anycounterpartyfrom involvingin anyunethical conduct.

(8) The inquiry method for the Corporate Governance Best Practice Principles and relevant rules established by the Company: Http://www.looptelecom.com 。

(9) Other important information to facilitate a better understanding of the Company's implementation of corporate governance: None .

65

(10) Implementation of internal control system

A. Statement of internal control:

Loop Telecommunication International, Inc.
The Statement of Internal Control System
Date: March 12, 2024
The Company makes the following statement according to the self-evaluation conducted of the internal control system for 2023:
I.
The Company acknowledges that it is the responsibility of the Board and managerial officers to establish, implement, and maintain
the established internal control system. Its purpose is to reasonably ensure that operational effectiveness and efficiency (including
profits, performance, and asset safety) and reporting are reliable, timely, and transparent, as well as to ensure compliance with
relevant regulations and laws, where financial records and statements are prepared in accordance with the Insurance Act and
relevant requirements with a consistent basis of preparation; this shall serve as a part of the results for the internal control system
of financial reporting.
II. An internal control system has inherent limitations. No matter how perfectly designed, an effective internal control system can
provide only reasonable assurance of accomplishing the stated objectives above. Moreover, the effectiveness of an internal control
system may be subject to changes due to extenuating circumstances beyond control. Nevertheless, the internal control system of
the Company contains self-monitoring mechanisms, and the Company takes immediate remedial actions in response to any
identified deficiencies.
III. The Company evaluates the design and operating effectiveness of the internal control system based on the criteria provided in the
"Regulations Governing the Establishment of Internal Control Systems by Public Companies" (the "Regulations"). The criteria
adopted by the "Regulations" identify five components of internal control based on the process of management control: 1. Control
environment; 2. Risk assessment; 3. Control activities; 4. Information and communication; and 5. Monitoring operations. Each key
component includes several items. Please refer to the "Regulations" for the aforementioned items.
IV. The Company has evaluated the design and implementation effectiveness of the internal control system according to the
determining items for the internal control system above.
V. In accordance with the results of the aforementioned evaluation, the Company has found that the design and implementation of the
internal control system (including the overall execution status and legal compliance for operations, financial reporting, and
information security) as of December 31, 2023 are effective; apart from the matters set out in the schedule, it can be reasonably
assured that the Board and the managers understand that the objectives for operations, financial reporting, and compliance with the
relevant guidelines and laws are achieved, and it is considered that the financial records and statements are prepared in accordance
with the Insurance Act and relevant requirements with a consistent basis of preparation, and the accuracy is adequate.
VI. The statement is an integral part of the Company's annual report and prospectus and will be made public. Any falsehood,
concealment, or other illegality in the content made public will entail legal liability under Articles 20, 32, 171, and 174 of the
Securities and Exchange Act.
VII. The statement was approved by the Board on March 12, 2024. Among the eight attending Directors, none of them held an opposing
opinion, and all of them agreed with the content of the statement, which is hereby issued.
Loop Telecommunication International, Inc.
Chairman: Yeh Maw-Lin
President: Yeh Maw-Lin

66

  • B. Where a CPA has been engaged to carry out a project review of the internal control system, the CPA's review report shall be disclosed: None .

  • (11) If there has been any legal penalty imposed against the Company or its internal personnel, or any disciplinary penalty imposed by the Company against its internal personnel for violation of the requirements under its internal control system, during the most recent year and up to the publication date of the annual report, where the result of such penalty could have a material effect on shareholder equity or securities prices, specify the penalty, the main shortcomings, and condition of improvement: None .

  • (12) Material resolutions of shareholders' meetings or Board meetings during the most recent year and up to the publication date of the annual report:

  • A. Material resolutions of the annual shareholders' meeting and the implementation status

Time Material resolution of the shareholders' meeting: Execution
2023/06/28 Material resolution of the 2023 annual shareholders'
meeting:
Report Items
1. The 2022 business report
2. 2022 Audit Committee's Review Report
3. The report of the distribution of remuneration of
employees and remuneration of Directors and
supervisors in 2022
Ratification
1. Approved the 2022 business report, consolidated
financial statements, and parent company only
financial statements
2. Approved the proposal for earning distribution for
2022
Discussion
1. Proposal for the discussion of cash dividends
distribution from the capital reserve
2. Proposal for the amendment to the "Articles of
Incorporation"
3. Proposal for the capital reduction in cash of the
Company		 Approved as a resolution.
September 3, 2023 was set
as the ex-dividend date, and
September 15, 2023 was the
cash dividends distribution
date.

67

B. Board of Directors meeting

Meeting date
(session)		 Motion content Opinions of all Independent
Directors and the Company's
response to the opinions of
Independent Directors
2023/08/10
(The 3rd regular
meeting in 2023)		 Reviewed and discussed the 2023 Q2 consolidated financial
statements and parent company only financial statements.
Proposal for the distribution of employee remuneration and
Director remuneration in 2022.
Proposal for the remuneration of managers and Directors in 2022.
Proposal for the remuneration of other managers in 2022.
Proposal for the working plan of the Remuneration Committee in
2024.
Proposal for the qualification of members appointed for the 5th
session of the "Remuneration Committee."
The Company intends to apply for the rollover of the
comprehensive loan limits with Mega International Bank in the
amount of NT$40 million.
The Company intends to apply for the rollover of the pre-
purchase/pre-sale forward exchange transactions and currency
exchange exposure transaction limits with Mega International
Bank in the amount of US$0.15 million.
Cumulative performance for contracting operations of derivatives
(pre-sale forward exchange).
The Company matters related to the ex-dividend date in 2023.
Established the Company’s date for the reduction of capital, the
base date for the capital reduction, and the plan for the issuance of
securities.










Approved by receiving the
consent of all attending Directors
2023/11/09
(The 4th regular
meeting in 2023)		 Reviewed and discussed the 2023 Q3 consolidated financial
statements and parent company only financial statements.
Proposal for the 2024 annual audit plan of the Company.
The Company is undertaking a capital reduction in cash to
facilitate the refund of share capital, and is in the process of
formulating related matters concerning the issuance of shares
subsequent to the capital reduction.
The Company established the “Framework for the Preparation and
Presentation of Financial Statements".
Cumulative performance for contracting operations of derivatives
(pre-sale forward exchange).





Approved by receiving the
consent of all attending Directors
2024/03/12
(The 1st regular
meeting in 2024)		 Reviewed and discussed the 2023 consolidated financial
statements and parent company only financial statements.
Proposal for the 2024 business plan.
Proposal for the distribution of employee remuneration and
Director remuneration in 2023.
Proposal for earning distribution for 2023.
Proposal for the remuneration of the Chairman and managers.
Proposal for the remuneration of other managers.
Proposal for the performance evaluation of the Board in 2023.
Proposal for the amendments to the Company’s “Regulations
Governing the Exercise of Powers by the Audit Committee”.
Proposal for the amendment to the Company’s “Rules of Procedure
of Board Meetings”.
The Company intends to apply for a short-term (secured) loan of
NT$100 million from Yuanta Commercial Bank and continue with
two additional short-term comprehensive credit lines of NT$80
million and NT$72 million respectively.
Cumulative performance for contracting operations of derivatives
(pre-sale forward exchange).
Evaluation of the effectiveness of the internal control system and
the "Statement of Internal Control" in 2023.
The Board of Directors meeting to discuss matters pertaining to the
2024 annual shareholders' meeting. Proposal for establishing
matters related to the acceptance of shareholders' proposals in
2024. The Company has executed the independence and adequacy
evaluation of cpas. Pre-approval of the provision of non-assurance
services by the appointed cpas, their firm, and affiliated entities to
the companyand its subsidiaries.














Approved by receiving the
consent of all attending Directors

68

Meeting date
(session)		 Motion content Opinions of all Independent
Directors and the Company's
response to the opinions of
Independent Directors
2024/05/13
(The 2nd regular
meeting in 2024)		 Reviewed and discussed the 2024 Q1 consolidated financial
statements and parent company only financial statements.
Cumulative performance for contracting operations of derivatives
(pre-sale forward exchange).
The report of the acceptance of shareholders' proposals for the
2024 annual shareholders' meeting.


Approved by receiving the
consent of all attending Directors

  • a. Any objections or qualified opinions raised by an Independent Director against a Board resolution with records or written statements: None.

  • b. Implementation status of the recusal of Independent Directors for proposals in which they have interest: None.

  • c. Communication between the Independent Directors and chief auditor and cpas (e.g., material matters, methods, and results of communication regarding the Company's financial and business status):

    1. The chief auditor and cpas have pre-meetings with particular Independent Directors to discuss the finance and business status before the regular Board meeting each quarter. There was no circumstance above in 2023. The communication between Independent Directors and the chief auditor is healthy.

    2. Cpas and Independent Directors carry our meetings in person regarding the finance and business status of the Company; Independent Directors may have communication via phone calls or e-mails with the Finance Department at all times.

    3. Cpas of the Company report the auditing or reviewing the status of the quarterly financial statements and other communication matters requirements under relevant laws and regulations at Board meetings each quarter; if there is any special circumstance, they will also immediately report to Board members; in 2023, there were no abovementioned special circumstances. The communication between Independent Directors and cpas is healthy.

  • (13) During the most recent year and up to the publication date of the annual report, where a Director has expressed a dissenting opinion with respect to a material resolution passed by the Board, and the said dissenting opinion with records or written statements, disclose the principal content thereof: None .

  • (14) A summary of resignations and dismissals of the Company's Chairman, President, chief accountant, chief financial officer, chief internal auditor, chief of corporate governance, and chief of research and development during the most recent year and up to the publication date of the annual report: None .

4. Information on CPA fees

  • (1) The amount of audit fees and non-audit fees paid to cpas and its firm and affiliates and the content of nonaudit services shall be disclosed:

Information on CPA fees

(In Thousands of New Taiwan Dollars) (In Thousands of New Taiwan Dollars) (In Thousands of New Taiwan Dollars) (In Thousands of New Taiwan Dollars) (In Thousands of New Taiwan Dollars) (In Thousands of New Taiwan Dollars) (In Thousands of New Taiwan Dollars)
CPA firm CPA name CPA audit period Audit fee
(Note 1)		 Non-audit fee Total
 Remarks
System
design		 Business
registration		 Human
resources		 Others Subtotal
Deloitte &
Touche Taiwan		 Huang Yu-Feng
Tseng Jian-Ming		 2023/1/1~2023/12/31
3,200
0
0
0
120
(Note 2)

120		 3,320

  • Note: 1. Audit fees refer to fees paid by the Company to cpas related to the audit, review, re-inspection of financial statements, and the review of financial forecast.

  • Capital reduction verification, taxation certification, assurance, or other financial advisory services.

  • (2) When the Company changes its CPA's firm and the audit fees paid for the year in which such change took place are lower than those for the preceding year, the amount of the audit fees before and after the change and the reasons shall be disclosed: None .

  • (3) When the audit fees paid for the current year are lower than those for the preceding year by 10% or more, the reduction in the amount of audit fees, reduction percentage, and reasons shall be disclosed: None .

69

5. Information on replacement of cpas

(1) Former cpas

1) Former cpas
Date of change From 2021 Q4
Reason for the change and description Internal operational rotation of the firm
Description of whether the Company
or cpas terminate or reject the
appointment		 Party
Circumstances		 Cpas The Company
Propose to terminate the
appointment		 Not applicable
Reject the (continued)
appointment		 Not applicable
Opinions in the auditor's report issued
other than unqualified opinions within
the most recent twoyears and reason		 Not applicable
Whether cpas have any opinion
different from the issuer		 Yes Accounting principles or practices
Disclosure of financial reports
Scope or step of audit
Others
No
Description: None
Other disclosures
(disclosures to be made in accordance
with items 1-4 to 1-7, subparagraph 6,
Article 10 of the Regulations)

(2) Successor cpas

2) Successor cpas
CPA firm Deloitte & Touche Taiwan
CPA name Huang Yu-Feng and Tseng Jian-Ming
Appointment date From 2021 Q4
Consultation matters regarding the treating
method or accounting principles of particular
transactions and opinions that may be issued for
the financial statements and results		 None
Written opinion of succession cpas for matters
With opinions different from the former cpas		 None
  • (3) Response letter of the former cpas regarding matters stated in item 1 and point 2, item 3, subparagraph 6, Article 10 of the Regulations: None.

(4) Evaluation of the Independence and Competence of the Auditor:

The Company evaluates the independence of the signing auditor once a year according to the following standards:

  • A. Obtaining a declaration of independence from the signing auditor.

  • B. Establishing evaluation items based on quality indicators (AQI) issued by regulatory authorities and referring to the ROC CPA Professional Ethics Standards Bulletin No. 10 "Integrity, Objectivity, and Independence" to compile the evaluation results of the auditor's independence and competence.

After thorough communication with the appointed auditor and individual evaluations of their competence, the Company has not identified any circumstances that might affect the independence and competence of the signing auditor.

The evaluation results for the most recent year were discussed and approved by the Audit Committee on March 12, 2024, and subsequently approved by the Board of Directors on March 12, 2024.

70

6. The Chairman, President, or managers in charge of financial or accounting matters of the Company working in the CPA's firm or its affiliates in the most recent year: None .

7. Transfer of equity and changes in equity pledges of Directors, supervisors, managers, and shareholders with a shareholding of 10% and above in the most recent year and up to the date of publication of the annual report

Changes in equity of Directors, managers, and major shareholders

Title Name 2023 2023 Currentyear as of April 26
Increase
(decrease) in
the number of
shares held		 Increase
(decrease) in
the number of
sharespledged		 Increase
(decrease) in
the number of
shares held		 Increase
(decrease) in
the number of
sharespledged
Chairman Yeh Maw-Lin 0 0 0 0
Director Fan Zheng-Chun 0 0 0 0
Director Chiu Dong-Sheng 0 0 0 0
Director Chen Hua-Ling (355,000) 0 0 0
Director Chen Hua-Ling (Note 2) 0 0 (16,000) 0
Independent
director		 Huang Yun-Ming 0 0 0 0
Independent
director		 Jiang Min-Shiung 0 0 0 0
Independent
director		 Chang Guo-Hua 0 0 0 0
Independent
director		 Ko Shu-Mei 0 0 0 0
Chief of
corporate
governance		 Cai Xing-Juan 12,594 0 0 0
Chief of
corporate
governance		 Cai Xing-Juan (Note 2) 0 0 (8,000) 0
Director of the
Finance and
Accounting
Department		 Chang Xiao-Ling 6,437 0 0 0
Director of the
Finance and
Accounting
Department		 Chang Xiao-Ling (Note 2) 0 0 (5,000) 0
Vicepresident Lai Yong-Zan (5,000) 0 0 0
Other supervisors
Lai Yong-Zan(Note 1)		 (10,000) 0 0 0
Vicepresident Liu Dong-Jie 0 0 0 0
Vicepresident Ceng Qing-Lin (48,000) 0 0 0
Vicepresident CengQing-Lin (Note 2) 21,058 0 0 0

Note 1 : 2023/08/01 Transitioned to Vice President-level advisor position. Note 2 : 2023/12/11 Processed the listing of new shares after cash reduction

  • (1) Information on the transfer of equity: None.

  • (2) Information on the pledge of equity: None .

71

8. Information on relationships between shareholders with the top ten shareholdings

Data on shareholders with the top ten shareholdings who are related parties

Name Shareholding Shareholding Shareholding of spouse
and underage children		 Shareholding of spouse
and underage children		 Total shares held in the
name of others		 Total shares held in the
name of others		 The title or name of the
top ten shareholders
who are spouses or
relatives within the
second degree of
kinship with related
parties and their
relationship		 The title or name of the
top ten shareholders
who are spouses or
relatives within the
second degree of
kinship with related
parties and their
relationship		 Remarks
Shares
(thousand
shares)		 Shareholding
ratio
Shares
(thousand
shares)		 Shareholding
ratio
Shares
(thousand
shares)		 Shareholding
ratio
Name		 Relationship
Yeh Maw-Lin 5,626 9.92% 1,218 2.15% 0 0 Chen Hua-
Ling
Yeh, Li-
Tung		 Spouse
Father and
daughter
Chen Hua-Ling 1,218 2.15% 5,626 9.92% 0 0 Yeh Maw-
Lin
Yeh, Li-
Tung		 Spouse
Mother and
daughter
Yeh, Li-Tung 1,051 1.85% 0 0 0 0 Yeh Maw-
Lin
Chen Hua-
Ling		 Father and
daughter
Mother and
daughter
Chang, Shih-Lung 987 1.74% 0 0 0 0 None None
Hu, I-Lung 679 1.20% 0 0 0 0 None None
Tsai, Ho-Chin 606 1.07% 0 0 0 0 None None
Huang, Chueh-Hui 427 0.75% 0 0 0 0 None None
Citibank Custody
Citigroup Global
Markets - Asia
Pacific Integrated
EquityFinance		 326 0.57% 0 0 0 0 None None
Lai, Feng-Mei 317 0.56% 0 0 0 0 None None
Tsai, Ho-Lu 310 0.55% 0 0 0 0 None None

9. The total number of shares held in any single investee by the Company, its Directors, managers, or any companies controlled either directly or indirectly by the Company

Consolidated shareholding ratio

Unit: Share; %

Investee (Note) Ownership by the Company Ownership by the Company Investments of Directors,
managers and any
companies controlled either
directly or indirectly by the
Company		 Investments of Directors,
managers and any
companies controlled either
directly or indirectly by the
Company		 Total Ownership Total Ownership
Shares Ownership Shares Ownership Shares Ownership
Tech-Plan (BVI) Ltd. 4,016,000 shares 100% 0 0 4,016,000 shares 100%
Loop Telecom NA, Inc. 5,000 shares 100% 0 0 5,000 shares 100%

Note: Refer to long-term investments of the Company accounted for by adopting the equity method.

72

(IV) Capital and shares

1. Capital and shares

(1) Source of share capital

(In New Taiwan Dollars) (In New Taiwan Dollars) (In New Taiwan Dollars) (In New Taiwan Dollars) (In New Taiwan Dollars) (In New Taiwan Dollars) (In New Taiwan Dollars)
Year/ month Issue
price		 Authorized capital stock Paid-in capital Remarks
Shares Amount Shares Amount Source of share
capital		 Capital paid in
by properties
other than cash		 Others
84.01 NT$10 22,500,000 shares
225,000,000		 12,000,000 shares 120,000,000 - - -
86.09 NT$10 22,500,000 shares
225,000,000		 19,500,000 shares 195,000,000 Capital increase 14,550,000
Note 1
88.09 NT$10 36,500,000 shares
365,000,000		 22,500,000 shares 225,000,000 Capital increase 5,587,500
Note 2
88.09 NT$10 36,500,000 shares
365,000,000		 29,000,000 shares 290,000,000 Capital increase
from earnings		 None Note 3
89.09 NT$10 47,160,000 shares
471,600,000		 39,165,000 shares 391,650,000 Capital increase
from earnings		 None Note 4
90.09 NT$10 97,320,000 shares
973,200,000		 52,200,000 shares 522,000,000 Capital increase
from earnings		 None Note 5
91.08 NT$10 128,000,000 shares 1,280,000,000 63,654,000 shares 636,540,000 Capital increase
from earnings		 None Note 6
93.02 NT$10 128,000,000 shares 1,280,000,000 64,927,266 shares 649,272,660 Convertible
corporate bonds		 None Note 7
93.11 NT$10 128,000,000 shares 1,280,000,000 65,239,998 shares 652,399,980 Convertible
corporate bonds		 None Note 7
94.07 NT$10 128,000,000 shares 1,280,000,000 68,909,100 shares 689,091,000 Convertible
corporate bonds		 None Note 8
94.11 NT$10 128,000,000 shares 1,280,000,000 69,371,204 shares 693,712,040 Convertible
corporate bonds		 None Note 8
95.04 NT$10 128,000,000 shares 1,280,000,000 70,544,948 shares 705,449,480 Convertible
corporate bonds		 None Note 8
95.08 NT$10 128,000,000 shares 1,280,000,000 70,591,158 shares
705,911,580		 Convertible
corporate bonds		 None Note 8
95.10 NT$10 128,000,000 shares 1,280,000,000 71,663,242 shares 716,632,420 Convertible
corporate bonds		 None Note 8
96.02 NT$10 128,000,000 shares 1,280,000,000 75,570,735 shares 755,707,350
Convertible
corporate bonds
and employee
stock options		 None Note 9
96.06 NT$10 128,000,000 shares 1,280,000,000 78,727,983 shares 787,279,830
Convertible
corporate bonds
and employee
stock options		 None Note 9
96.08 NT$10 128,000,000 shares 1,280,000,000 80,294,832 shares 802,948,320
Convertible
corporate bonds
and employee
stock options		 None Note 9
96.10 NT$10 128,000,000 shares 1,280,000,000 81,712,562 shares 817,125,620
Convertible
corporate bonds
and employee
stock options		 None Note 9
97.01 NT$10 128,000,000 shares 1,280,000,000 82,155,298 shares 821,552,980
Convertible
corporate bonds
and employee
stock options		 None Note 9
97.07 NT$10 128,000,000 shares 1,280,000,000 82,210,750 shares 822,107,500 Convertible
corporate bonds		 None Note 9
97.12 NT$10 128,000,000 shares 1,280,000,000 79,210,750 shares 792,107,500 Cancelation of
treasurystock		 None Note 10
98.10 NT$10 128,000,000 shares 1,280,000,000 78,176,650 shares 781,766,500
Capital reduction
through treasury
shares
None		 Note 11
98.12 NT$10 128,000,000 shares 1,280,000,000 77,639,650 shares 776,396,500 Cancelation of
treasurystock		 None Note 12
99.03 NT$10 128,000,000 shares 1,280,000,000 78,192,750 shares 781,927,500 Employee stock
options		 None Note 13
99.07 NT$10 128,000,000 shares 1,280,000,000 78,194,750 shares 781,947,500 Employee stock
options		 None Note 14
99.09 NT$10 128,000,000 shares 1,280,000,000 78,209,900 shares 782,099,000 Employee stock
options		 None Note 15

73

Year/ month Issue
price		 Authorized capital stock Authorized capital stock Paid-in capital Paid-in capital Remarks
Shares Amount Shares Amount Source of share
capital		 Capital paid in
by properties
other than cash		 Others
100.01 NT$10 128,000,000 shares 1,280,000,000 78,222,550 shares 782,225,500 Employee stock
options		 None Note 16
100.12 NT$10 128,000,000 shares 1,280,000,000 72,885,550 shares 728,855,500 Cancelation of
treasurystock		 None Note 17
101.06 NT$10 128,000,000 shares 1,280,000,000 70,920,550 shares 709,205,500 Cancelation of
treasurystock		 None Note 18
112.08 NT$10 128,000,000 shares 1,280,000,000 56,736,440 shares 567,364,400 Capital
Reduction		 None Note 19

  • Note 1 : 1997/09/30 Capital increase: ordinary shares of NT$60,450,000 and technology shares of NT$14,550,000. (1997.10.06 Letter (86)Yuan-Tou-Zi No.20538)

  • Note 2 : 1999/09/06 Capital increase: ordinary shares of NT$24,412,500 and technology shares of NT$5,587,500. (Letter (88)-Tai-CaiZheng-(Yi) No.62181).

  • Note 3 : 1999/09/06 Capital increase from earnings: ordinary shares of NT$65,000,000. (Letter (88)-Tai-Cai-Zheng-(Yi) No.62181). Note 4 : 2000/09/02 Capital increase from earnings: ordinary shares of NT$101,650,000. (Letter (89)-Tai-Cai-Zheng-(Yi) No.71850). Note 5 : 2001/09/07 Capital increase from earnings: ordinary shares of NT$130,350,000. (Letter (90)-Tai-Cai-Zheng-(Yi) No.141585). Note 6 : 2002/08/12 Capital increase from earnings: ordinary shares of NT$114,540,000. (Letter (91)-Tai-Cai-Zheng-(Yi) No.0910138722). Note 7 : 2003/08/15 Issued convertible corporate bonds of NT$200,000,000 with a conversion price of NT$13.43; a total of 14,892,833 ordinary shares may be converted into (i.e., NT$148,928,330). The conversion price of NT$13.43; 171 bonds were converted in 2004/02, and 42 bonds were converted in 2004/11. (Letter (92)-Tai-Cai-Zheng-(Yi) No.0920134849).

  • Note 8 : 2004/07/06 The conversion price was reduced from NT$13.43 to NT$10.82; 397 bonds were converted in 2005/07, 50 bonds were converted in 2005/11, 127 bonds were converted in 2006/04, 5 bonds were converted in 2006/08, and 116 bonds were converted in 2006/10. (Letter (93)-Zheng-Zai-Zi No.1898).

  • Note 9 : 2007/02/05 The convertible price of the corporate bonds was NT$10.82, and 411 bonds were converted. In addition, employee stock options for 109,000 shares were exercised with an execution price of NT$14.55. 335 corporate bonds were converted, and 61,150 shares of employee stock options were exercised in 2007/06, 155 corporate bonds were converted, and 134,325 shares of employee stock options were exercised in 2007/08, 129 corporate bonds were converted, and 225,500 shares of employee stock options were exercised in 2007/10, 46 corporate bonds were converted, and 17,600 shares of employee stock options were exercised in 2008/01, and 46 corporate bonds were converted, and 55,452 shares of employee stock options were exercised in 2008/07.

  • Note 10 : 2008/10-11 Repurchased 3,000,000 treasury shares, which were fully canceled on 2008/12/18.

  • Note 11 : The Company repurchased a total of 1,683,000 treasury shares in 2006 and transferred 648,900 shares to employees in 2007, with 1,034,100 shares left, which were fully canceled in October 2009.

  • Note 12 : The Company repurchased a total of 537,000 treasury shares in 2009, which were fully canceled in December 2009.

  • Note 13 : In 2010 Q1, a total of 553,100 shares were subscribed by employees.

  • Note 14 : In 2010 Q2, a total of 2,000 shares were subscribed by employees.

  • Note 15 : In 2010 Q3, a total of 15,150 shares were subscribed by employees.

  • Note 16 : In 2010 Q3, a total of 12,650 shares were subscribed by employees.

  • Note 17 : The Company repurchased a total of 5,337,000 treasury shares in 2011, which were fully canceled in December 2011. Note 18 : The Company repurchased a total of 1,965,000 treasury shares in 2012, which were fully canceled in June 2012. Note 19 : 2023/08/09 Capital reduction: ordinary shares of NT$141,841,100. (TSEC Letter No. 1121803806).

April 26,2024 / Unit: shares April 26,2024 / Unit: shares
Type of equity Authorized capital stock Remarks
Shares outstanding Unissued shares Total
Listed Unlisted Total
Common shares 56,736,440 0 56,736,440 71,263,560 128,000,000

Information related to shell registry: Not applicable.

(2) Shareholder structure

(2) Shareholder structure (2) Shareholder structure (2) Shareholder structure (2) Shareholder structure (2) Shareholder structure (2) Shareholder structure (2) Shareholder structure
April 26,2024(Base date)
Shareholder
Structure
Quantity

Government
agencies		 Financial
institutions		 Other legal
persons		 Individuals Foreign
institutions
and foreigners		 Total
Number of people 0
0
125
20,724
34
20,883
No. Of Shares Held 0
0
411,856
54,686,431
1,638,153
56,736,440
Ownership 0%
0%
0.72%
96.39%
2.89%
100%

74

(3) Diffusion of ownership:

Common shares

NT$10 per share

April 26, 2024 (Note)

April 26, 2024 (No
Shareholding tier Number of
Shareholders		 No. Of Shares Held Ownership
1 to 999
1,000 to 5,000
5,001 to 10,000
10,001 to 15,000
15,001 to 20,000
20,001 to 30,000
30,001 to 40,000
40,001 to 50,000
50,001 to 100,000
100,001 to 200,000
200,001 to 400,000
400,001 to 600,000
600,001 to 800,000
800,001 to 1,000,000
Over NT$1,000,001		 11,298
8,097
832
205
138
118
64
33
52
27
12
1
2
1
3
1,221,602

15,522,131

6,575,050

2,625,641

2,508,233

3,025,268

2,270,325

1,515,202

3,792,161

3,841,495

3,245,187

427,000

1,285,400

986,764

7,8944,981
2.15%

27.36%

11.59%

4.63%

4.42%

5.33%

4.00%

2.67%

6.68%

6.77%

5.72%

0.75%

2.27%

1.74%

13.92%
Total 20,883
56,736,440
100.00%

Note: Refer to the date for the latest equity dispersion provided by the stock affairs agency.

Preferred shares: Not applicable.

(4) List of major shareholder

Shares
Name of major shareholder		 No. Of Shares Held
(thousand shares)		 Ownership
(%)
Yeh Maw-Lin 5,626 9.92%
Chen Hua-Ling 1,218 2.15%
Yeh, Li-Tung 1,051 1.85%
Chang, Shih-Lung 987 1.74%
Hu, I-Lung 679 1.20%
Tsai, Ho-Chin 606 1.07%
Huang, Chueh-Hui 427 0.75%
Citibank Custody Citigroup Global Markets - Asia Pacific
Integrated EquityFinance
326		 0.57%
Lai, Feng-Mei 317 0.56%
Tsai, Ho-Lu 310 0.55%

75

  • (5) Market price, net value, earnings, and dividends per share and the relevant information for the most recent two years
Item Item 2022 2023 2024
As of March 31
(Note 6)
Market price per share Highest NT$27.85 NT$58.10 NT$85.00
Lowest NT$15.70 NT$19.50 NT$47.30
Average NT$23.34 NT$43.08 NT$67.63
Net value per share
(Note 5)		 Before distribution NT$12.01 NT$12.68 NT$15.49
After distribution - - -
Earnings per share
(Note 1)		 Weighted average number of shares
(thousand shares)		 70,921 66,490 56,737
Earnings per share NT$0.95 NT$3.00 NT$0.63
Earnings per share
(Note 7)		 Weighted average number of shares
(thousand shares)		 71,433 67,141 57,142
Earningsper share NT$0.94 NT$2.97 NT$0.62
Dividends per share Cash dividends NT$1.00 NT$3.20 -
Stock
dividends		 Stock dividend from
retained earnings		 - - -

Stock dividend from
capital surplus		 - - -
Accumulated unpaid dividends - - -
Investment return
analysis		 Price-to-earnings ratio (Note 2) 21.61 12.59 None
Price-to-dividend ratio (Note 3) 20.53 11.81 None
Cash dividend yield (Note 4) 4.87% 8.47% None

Note 1 : Earnings per share that are basic earnings after tax. Note 2 : Price/earnings ratio = average closing price per share for the year/earnings per share. Note 3 : Price/dividend ratio = average closing price per share for the year/cash dividends per share. Note 4 : Cash dividend yield = cash dividend per share/average closing price per share for the year.

Note 5 : The proposal for the 2023 earning distribution has not been resolved by the annual shareholders' meeting; therefore, it is not presented at present. Note 6 : As the book closure date period for the shares of the Company is from 2024/04/27 to 2024/06/25, the data in the column only disclosed up to 2024/03/31. Note 7 : Earnings per share that are diluted earnings after tax.

(6) The Company's dividend policy and implementation:

Dividend policy

To continue to expand its scale and improve profitability with equal considerations given to the capital adequacy ratio, the Company adopts the residual dividend policy. The market where the Company operates is the information and communication industry with high growth. In response to the long-term business development, future capital requirements, and long-term financial planning of the Company, and satisfying the cash inflow requirements of shareholders, if the Company records any earnings from its final account, apart from paying all taxes according to the law, it shall first compensate cumulative losses from prior years. It may appropriate special reserve based on the Company's requirements. Then, the remaining balance shall be combined with the cumulative undistributed earnings from prior years; after retaining partial earnings based on the operating status and for a balanced dividend policy, the Company may make distribution after a resolution is made by the shareholders' meeting based on the following principles:

  • A. Remuneration of employees shall be no less than 10%; remuneration of employees may be made in shares or cash ; upon the distribution of remuneration of employees, the distribution targets may include employees, who fulfill certain conditions, of subordinated companies; such conditions shall be established by the Board.

  • B. Remuneration of Directors shall be no more than 5%.

  • C. The remaining shall be shareholders' bonuses.

76

Based on the capital budget planning of the Company, it distributes share dividends to retain the capital required, and the remaining portion may be distributed in cash dividends. The total cash dividend distribution mentioned above shall not be lower than 10% of the total dividend distribution, in principle. If the Company has no earnings or retained earnings of the year, no dividend or bonus shall be distributed. For earning distribution, the Company distributes cash dividends to shareholders. In 2023, earnings available for distribution was NT$184,929,476, and the Company intends to distribute NT$3.2 per share (totaling NT$181,556,608). The proposal is awaiting approval from the 2024 annual shareholders' meeting. The calculation of cash dividends shall be rounded to NT$1 based on the distribution ratio; the total fractional amount less than NT$1 is included in other income of the Company.

Based on the Company Act amended in May 2015 and the amended Articles approved by the shareholders' meeting in June 2016, the Company distribute no less than 10% and no more than 5% of the net profit before tax of the period before deducting remuneration of employees and remuneration of Directors and supervisors as the remuneration of employees and remuneration of Directors, respectively. The proposal for the earning distribution of 2023 is expected to be resolved at the annual shareholders' meeting to be convened in 2024.

77

Loop Telecommunication International, Inc.

Table of Earning Distribution

2023

(In New Taiwan Dollars)
Item Amount
Undistributed earnings at the beginning of the period 1,441,158
Net income in 2023 199,659,029
Add: Remeasurement of defined benefit obligation recognized in
retained earnings		 4,177,916
Amount of net income of the period plus items other than net income
of the period
Included in the undistributed earnings of the year 203,836,945
Less: Legal reserve (20,383,695)
Add: Reversal of special reserve according to the law 35,068
Earnings available for distribution for the year 184,929,476
Less: Cash dividends of shareholders (Note 6) (181,556,608)
Undistributed earnings at the end of the period 3,372,868

Remarks:

[Remuneration of employees at 10% (NT$ 28,041,528) was otherwise distributed. ]

[Remuneration of Directors at 2% (NT$ 5,608,306) was otherwise distributed. ]

  1. After the distribution of the abovementioned dividends, if there are changes in the payout ratio due to changes in the number of outstanding shares, the Company intends to authorize the Board to make adjustments and arrange relevant matters.

  2. The abovementioned dividend distribution was reported to and approved by the shareholders' meeting as a resolution. The Company intends to authorize the Board to arrange the date for dividend distribution and other relevant matters based on actual circumstances according to relevant laws and regulations.

  3. If changes are required for matters related to the abovementioned dividend distribution due to regulatory requirements, amendments to the approval of the competent authority, or the operating evaluation of the objective environment, the Company intends to authorize the Board to make arrangements based on actual circumstances.

  4. Article 29 of the Articles of Incorporation: The Company shall appropriate no less than 10% and no more than 5% of the net profit before tax of the period before deducting remuneration of employees and remuneration of Directors as the remuneration of employees and remuneration of Directors, respectively; however, if the Company has cumulative losses (including adjusted undistributed earnings), it shall preserve the compensation amount.

  5. The abovementioned shareholders' dividends and remuneration of employees and Directors are distributed in cash.

  6. The cash dividend for this period is calculated based on the outstanding shares as of February 29, 2024, totaling 56,736,440 shares. The dividend payment is NT$3.2 per share.

78

  • (7) Effect of stock grants proposed or at the shareholders' meeting on business performance and earnings per share of the Company: Not applicable .

(8) Remunerations of employees and Directors

  • A. Based on the percentage or scope of remuneration of employees and Directors stipulated in the Company's Articles of Incorporation:

  • Based on the distribution policy of remuneration of employees and Directors stipulated in the Articles of Incorporation. If the Company records any earnings from its final account, apart from paying all taxes according to the law, it shall first compensate cumulative losses from prior years. It may appropriate special reserve based on the Company's requirements. Then, the remaining balance shall be combined with the cumulative undistributed earnings from prior years; after retaining partial earnings based on the operating status and for a balanced dividend policy, the Company may make distribution after a resolution is made by the shareholders' meeting based on the following principles:

  • a. Remuneration of employees shall be no less than 10%: Remuneration of employees may be made in shares or cash, and the distribution targets may include employees, who fulfill certain conditions, of subordinated companies; such conditions shall be resolved by the Board.

  • b. Remuneration of Directors shall be no more than 5%.

  • c. The remaining shall be shareholders' bonuses.

B. The estimation basis for the amount of employee and Director remunerations shall be subject to the calculation basis for the number of shares of employee remuneration through stock distribution and the accounting for differences between the actual distribution amount and the estimated amount: If there is any material change in the distribution amount resolved by the Board before the date on which the consolidated annual financial statements are approved for publication, adjustments shall be made to the consolidated annual expenses initially provided regarding such changes. If there is any change in the amount after the date on which the annual financial statements are approved for publication, it shall be processed as changes in accounting estimation and adjusted and accounted for in the following year. If the shareholders' meeting resolved to distribute employee bonuses in share dividends, the number of shares of share dividends shall be determined by dividing the amount of bonuses resolved by the fair value of shares; the calculation basis of the fair value of shares is the closing price on the day before the day on which a resolution was made by the shareholders' meeting, taking into account the effects of ex-right and ex-dividend.

C. Remuneration distribution approved by the Board:

  • a. Amount of remuneration for employees and Directors distributed in cash or shares. If there is any difference from the estimated amount in the year of expense recognition, the difference, reason, and measures adopted in response shall be disclosed: The proposal of the 2023 earning distribution of the Company was approved by the Board as a resolution on March 12, 2024; the intended earning distribution approved by the Board is as follows. Treatment for the amount of differences: None.
Item Estimated amount in
2023		 Approved by the Board for
distribution in 2023		 Difference
Employee compensation 28,041,528
28,041,528
0
Directors' compensation 5,608,306
5,608,306
0
Total 33,649,834
33,649,834
0

  • b. The amount of any employee compensation distributed in shares and the size of that amount as a percentage of the sum of the after-tax net income stated in the unconsolidated financial statements for the current period and total employee compensation: None.

  • c. The estimated earnings per share after considering the intended remuneration of employees and Directors to be distributed: In 2008, the Company expensed the remuneration of employees and the remuneration of Directors. In 2008, the Company accounted for the estimation of expenses of remuneration of employees and remuneration of Directors in the financial statements. In 2023, the estimated earnings per share were equivalent to the amount accounted for in the financial statements.

79

  • D. The actual distribution of employee and Director remunerations in the preceding year (including the number of shares, the amount distributed, and stock price), and, if there is any difference from the actual distribution and the employee and Director remunerations recognized, the differences, reasons, and handling status shall be described:

  • a. Amount of remuneration for employees and Directors distributed in cash or shares. If there is any difference from the estimated amount in the year of expense recognition, the difference, reason, and measures adopted in response shall be disclosed: The proposal of the 2022 earning distribution of the Company was approved by the Board as a resolution on March 28, 2023; the intended earning distribution approved by the Board is as follows. Treatment for the amount of differences: None.

Item Estimated amount in 2022 Approved by the Board for
distribution in 2022		 Difference
Employee compensation 9,477,674
9,477,674
0
Directors' compensation 1,895,535
1,895,535
0
Total 11,373,209
11,373,209
0

  • b. The amount of any employee compensation distributed in shares and the size of that amount as a percentage of the sum of the after-tax net income stated in the unconsolidated financial statements for the current period and total employee compensation: None.

  • c. The estimated earnings per share after considering the intended remuneration of employees, Directors, and supervisors to be distributed: In 2008, the Company expensed the remuneration of employees and the remuneration of Directors and supervisors. In 2008, the Company accounted for the estimation of expenses of remuneration of employees and remuneration of Directors and supervisors in the financial statements. In 2022, the estimated earnings per share were equivalent to the amount accounted for in the financial statements.

(9) Repurchase of shares by the Company: None .

2. Issuance of corporate bonds, conversion of corporate bonds, exchange of corporate bonds, corporate bonds issued under shell registry, and corporate bonds with options: None .

3. Issuance of preferred shares and preferred shares with options: None.

4. Global depository receipts: None.

5. Employee stock options and restricted stock awards:

  • (1) Employee stock options and restricted stock awards

  • A. Status of unexpired employee stock options of the Company as of the publication date of the annual report shall be disclosed, and the effects on shareholders' interest: None.

  • B. Name, acquisition, and subscription status of managers who acquired employee stock options and the top ten employees in terms of the number of shares that may be subscribed based on the options acquired as of the publication date of the annual report: None .

  • (2) Restricted stock awards:

  • A. Status of unvested restricted stock awards as of the publication date of the annual report shall be disclosed, and the effects on shareholders' interest: None.

  • B. Name and acquisition status of managers who acquired restricted stock awards and the top ten employees in terms of the number of shares that may be acquired as of the publication date of the annual report: None .

6. Mergers or receipt of new shares issued by other companies: None .

  • (1) For any merger or receipt of shares newly issued by other companies completed in the most recent year and up to the publication date, the following matters shall be disclosed:

  • A. For companies with shares listed on TWSE (the "TWSE-listed companies") or companies with shares approved to be traded at tpex (the "tpex-listed companies") according to the requirements under Article 3 or Article 3-1 of the Taipei Exchange Rules Governing the Review of Securities for Trading on the tpex, the evaluation opinion of the underwriter for any merger or receipt of shares newly issued by other companies in the most recent quarter shall be disclosed: None.

80

  • B. Except for companies stated in the preceding item, the implementation status in the most recent quarter shall be disclosed; if the implementation progress or the benefit has not achieved the estimated objective, substantially describe the effects on shareholders' interest and the improvement plan: None .

  • (2) If the Board approved a merger or receipt of shares newly issued by other companies as a resolution in the most recent year and up to the publication date of the annual report, disclose the implementation status and the basic information of the company of the merger or receipt; for any on-going merger or receipt of shares newly issued by other companies, disclose the implementation status and effects on shareholders' interest: None .

7. Implementation status of the capital utilization plan: None .

(V) Operational Highlights

1. Scope of business

(1) Scope of business:

Major content of scope of business:

CC01100 Controlled Telecommunications Radio-Frequency Devices and Materials Manufacturing I301010 Information Software Services

CC01120 Data Storage Media Manufacturing and Duplicating

  • I. Research, development, production, manufacturing, and sales of the following products:

  • User remote line disconnectors, protectors and their components.

  • Line reactors and their components.

  • Subtitle phones and their components.

  • Smart network resource management multiplexer, network access equipment (including T1/E1, FT1/FE1 CSU, and CSU/DSU) and its components, PCM carrier terminal (including D4/AD4) and its components, 64K/56Kbps transmission equipment (including DDS) and its components, high-speed digital user transmission systems and their components, and dlcs.

  • LAN/WAN equipment, network management systems, their sub-systems, and their components.

  • Overall service for digital network terminal connectors, their sub-systems, and their components.

  • Convertors, remote controls for cable tvs, and their components.

  • Communication system power supply units and their components.

  • Radio communication systems and their components.

  • II. Consultation, design, installation and repair related to the abovementioned businesses.

  • III. Import/export trading operations related to the businesses of the Company.

(2) Industry overview

A. Current status and development of the industry

  • Looking ahead to the performance of Taiwan's telecommunications industry in 2024, with the integration of technologies such as satellite communication, artificial intelligence, Internet of Things, and cloud applications, coupled with rapid development in emerging application areas, the demand for communication equipment market will continue to be driven. It is estimated that the output value of Taiwan's telecommunications industry reached NT$1.3 trillion in 2023, with a growth rate of 2.4%. Looking ahead to 2024, the output value of Taiwan's telecommunications industry is expected to reach NT$1.33 trillion, with an annual growth of 1.9%.

In 2024, the development of AI technology will become a new driving force for the ICT industry. It has gradually been widely used in various terminal devices, and the application of artificial intelligence will drive the development of terminal products such as AI pcs, AI smartphones, humanoid robots, and more. It is also foreseeable that AI will have diverse applications in cloud, edge computing, and the collaborative development of the Internet of Things (iot). With the accelerating arrival of the AI era, emphasizing data protection and security regulations tailored for AI becomes increasingly crucial. Ensuring data privacy and legality will be essential issues that AI development must address.

As the global commercial deployment of 5G progresses into the post-5G era, the high-speed and low-latency mobile communication characteristics of 5G, along with support from iot technology, can be applied in diverse fields. Particularly, the development of millimeter wave applications is crucial and is expected to contribute to the growth of the network equipment market.

81

B. Connectivity between the upstream, midstream, and downstream of the industry

The communication and networking industry utilizes wired or wireless transmission or accepts symbols, signals, text, video, audio, and other messages. The upstream of the industry chain are suppliers who assemble parts and components of various communication terminals, and the downstream are suppliers of various terminal application products.

==> picture [463 x 187] intentionally omitted <==

----- Start of picture text -----

Semiconductor Electronic parts Metal material Plastic material
Cable industry
industry and components industry industry
Network product
R&D manufacturing
industry
General user Computer network Computer Computer system Corporate network
network product integration system planning
equipment supplier
distributor company and installation
----- End of picture text -----

Source: Compiled by the Company

a. Upstream

The upstream of the communication and networking industry includes network IC chips, microprocessors, GPS and sensor chips, memory, active/passive elements, pcbs, cooling fans and antenna, plastic and metal cover, and other parts and components of relevant communication products that are primarily used in the equipment of the downstream of the communication and networking industry.

Taiwanese companies occupy a material position in the global broadband terminal industry, including the upstream chips and parts and components for xdsl modems, Cable Modem, PON CPE, Wi-Fi routers, LTE CPE, exchanger, and other products, and the downstream brand terminal or foundry businesses. For main chips, wired network chips may be divided into wide area network (WAN) and local area network (LAN) chips. WAN terminals include xdsl, cable modem, and FTTH; the mainstream LAN terminals are PLC and moca.

b. Downstream

The downstream of the communication and networking industry can be divided into network equipment, optical communication equipment, wireless communication equipment, wired communication equipment, and telecommunication service industries.

  • b-1 Network equipment: Major products are modems, network cards, gateways, routers, and stbs. With the continual popularization of the 4K video and audio content and the fast penetration of iot and mobile devices in markets of all countries, the requirements for 4G LTE modems, wireless modules, VDSL Modem, Cable Modem, PON ONU, and high-end home gateway continued to increase. In addition, the emergence of smart home applications and home network connection video services has driven the shipping of OTT network stbs, smart Wi-Fi routers, broadband power cables, smart speakers, and other smart household end products.

  • b-2 Optical communication equipment: Major products include optical cable, optical active and passive elements, and optical transmission terminal equipment. Due to the continual increase the global broadband users and the emergence of the cloud calculation industry, telecommunication companies worldwide have been actively providing various integrated services (i.e., network TV, video conference, video surveillance, and smart household applications) to improve the average revenue contributions of users. Internet companies have also accelerated the establishment of global data centers, which brought about the growth in the demand for high bandwidth equipment and allows the global communication industry to attache attention to the development of FTTH and optical communication parts and components. FTTH networks and mobile broadband networks have driven the growth in PON terminals and optical receiver module industries. The demand for intranet and external connection of data centers brought about the development of 40G/100G optical receivers, aocs, and other elements. At the current stage, multiple optical communication companies in Taiwan have invested in active and passive optical elements, and the major products include GPON/EPON terminal products, BOSA on Board, and optical receivers for FTTH, data centers, and mobile stations.

82

  • b-3 Wireless communication equipment: Major products include mobile phones, GPS systems, satellite and micro-communication equipment. The development of hand-held devices will turn to simple and humanized interfaces and integration with back-end application service trends, and application software and content service will be valued. Furthermore, with the complete wireless communication infrastructure and the increase in transmission speed, device and vertical markets turned to network connection and smart iot applications, facilitating the rapid expansion of the scale of the wireless communication equipment market. At present, the mainstream wireless communication equipment is smartphones, and large-scale international companies, including Apple, Huawei, and Samsung, occupy the leading position. Chinese companies, including Xiaomi, Oppo, and Vivo, rose to catch up and have successfully entered the international market; the intense competition continued. In other fields, many Taiwanese companies actively invested in the vehicle information/communication and entertainment market and launched automotive wireless modules, GPS, vehicle video and audio, vehicle sensors, and other equipment.

  • b-4 Wired communication equipment: Include analog and Internet telephones, facsimile, and network cameras. Within the scope, major products developed by communication companies in Taiwan include Internet telephones, entire sets of network communication systems (i.e., network telephone exchangers and Internet telephone gateways), online video conference meeting devices, and other user products. Due to the software development of the Internet telephone industry and the popularization of social media communication, large-scale international companies took the lead in the market. The room for the development of relevant domestic hardware producers was compressed, and they are attempting to integrate mobile and social media communication application models to launch new products.

  • b-5 Telecommunication industry: As of 2019 Q2, there are 570 telecommunication companies in over 180 countries worldwide that provide 4G LTE commercial network services, and the number of accumulated users reached 3.6 billion, with an annual growth rate of 43%; LET users accounted for 42% of total mobile users, giving rise to over 5,000 user devices. The enormous data flows generated after the high-speed growth of mobile users continued to pose challenges to telecommunication companies in terms of connection speed and transmission quality, and signal optimization systems upon network congestion. Governments in different countries have also opened up for mobile telecommunication companies to introduce commercial small-cell equipment to provide high-quality mobile network services.

C. Development trends of products

In terms of wired broadband service constructions, broadband service providers in different countries are actively carrying out a new wave of high-speed broadband network constructions in response to the broadband popularization policies of governments and the stimulation of competition within the industry by adopting a 1Gbps connection as the target. Overall, telecommunication companies worldwide are focusing on improving the existing communication quality and exploring new application services to satisfy the basic requirements of users for high-speed connection by adopting both fixed network and 4G LTE communication; the new generation smart household services have also been launched and is marketed by using the all-in-one mobile/fixed network packaging service model.

Observing the development trends of the wired broadband market in 2019, for FTTH, three major telecommunication companies were actively making arrangements for fttx and selectively upgrading to 10G PON network in urban areas; European and American telecommunication companies have also followed up in response to the demand in the local markets. For xdsl, AT&T in the U.S., British Telecom, Deutsche Telekom, Chunghwa Telecom, and leading telecommunication companies worldwide have continued to purchase VDSL equipment of G.fast specifications for network upgrades. In terms of cable modems, large-scale wired television broadcasting companies in Europe and America (i.e., Comcast and Liberty Global) continued to expand the procurement of DOCSIS3.1 Cable Modem and network constructions; the advances in technologies and the development trends of Gigabit broadband will bring about the continual growth of the global wired broadband market.

Regarding mobile broadband networks, global telecommunication companies continued to make arrangements for the advanced version of the 4G LTE (LTE-Advanced/LTE-Advanced Pro) network in 2019 and introduced corresponding small-scale stations for enterprises and large indoor/outdoor public areas, giving rise to the demand for mobile communication equipment and parts and components. In addition, the lower power wide area network (LPWAN) has become the new leverage for telecommunication companies to develop iot services; apart from lora and Sigfox successively secured the opportunities for system installation in North America, Europe, and Asia, Vodafone, SK Telecom, T-Mobile, and other major mobile telecommunication companies in Europe and America have also commenced the commercial services by adopting the NB-iot technologies launched by 3GPP in 2017, becoming new business opportunities worthy of attention in the wireless WAN industry.

83

Lastly, for LAN, Wi-Fi remains the most popular technology. With the continual expansion of the scope of application products, the scale of the overall Wi-Fi market continued to create a new high. Due to the slowdown of shipping of major application products, including smartphones, PC, tablets, smart TV, other home appliance products, and iot devices used in various smart fields have become the material growing momentum of Wi-Fi. In particular, the market of emerging wearable devices (i.e., smart watches, VR head-wear displays, smart speakers, and other products) recorded favorable performance, which will give rise to the global shipping of Wi-Fi equipment in 2019.

When 5G enters the stage of commercialization, despite the gaps between 5G proprietary technologies and the mobile communication industry in Taiwan, we hope to actively prepare the 5G innovative technologies and product R&D in the future based on relevant R&D experience of wimax/LTE, 3G/4G ODM/OEM experience and ability foundation, and the R&D and manufacturing advantages of parts and components for the semiconductor and information/communication terminal electronics to create innovative application services, In the hope of developing products, systems, sub-systems, elements, and innovative applications with advantages of the Taiwanese industries in the 5G era.

For instance, establish the prototype of proprietary 5G product systems, including mm-wave ultra-high frequency communication system, software virtualization technologies (i.e., small station virtualization, imec, and light vepc) in the initial development period of 5G, make arrangements for crucial technologies of products, and target the improvement of the proprietary technologies of the domestic 5G network communication industry and the arrangements for core patents in Taiwan to support the R&D gaps (i.e., core network and iot application platform) of the communication industry in Taiwan, and in turn, bring about the entrance into the system integration field of the network communication industry.

D. Product competitive status

Major competitors of the Company worldwide include ABB, Siemens, Nokia (Alcatel-Lucent), Cisco, Huawei, and other major equipment companies. Facing the intense industry competition and market changes, the communication system integration solutions developed, produced, marketed, and established by Loop have spread across Asia, Europe, America, Australia, the Middle East, and other countries, proving that the reliability, stability, and durability are recognized and supported worldwide.

(3) Technology and R&D overview

A. R&D expenses invested and technologies or products successfully developed in each of the most recent five years.

a. R&D expenses invested in each of the most recent five years

Since the establishment of the Company, its R&D strategic target has been focusing on the R&D of the "Local Loop Access" field, and it constantly developed new technologies, new products, new software platforms, and made innovations. The experience of R&D over the years has successfully established the core technologies for digital transmission equipment. Therefore, R&D expenses each year maintain at a certain level.

certain level.
(In Thousands of New Taiwan Dollars)
Item/year 2018 2019 2020 2021 2022 2023
Net revenue 548,039
544,995
598,096
515,510
438,242
649,097
Research and development
expenses		 125,973
133,994
139,363
140,729
134,715
152,224
Ratio of R&D expenses to
net operating income		 23%
24%
23%
27%
31%
24%

84

b. Technologies or products successfully developed in the most recent five years

b-1 2006-2008

The demand in the global communication industry has recovered to normal from mid-2006, and the regional and product markets with requirements are different from the bubble economy before 2002. The R&D efforts and achievements of the Company during 2002 and 2007 well fit. In particular, Loop-iNMS can help telecommunication companies to more effectively manage the entire network system. The Company will develop more products for the application of Loop-iNMS in the following years to achieve success by way of total solutions, avoiding the vicious cycle of haggling after the popularization of hardware products. In 2007, we successfully developed Loop-IP 6700 and Loop-IP 6416, which can provide transmission IP for copper wire TDM systems and transmission of TDM for IP networks to serve as the connection of new and old networks. Due to the popularization of the Internet and the consideration of installation costs, users mostly connect to their corporate network via Ethernet; therefore, reliable Ethernet line services in line with economic benefits are required. The SDH backbone network operated by operators for years undoubtedly is the most reliable backbone transmission network in line with economic benefits for Ethernet. In recent years, optical communication products have become mainstream, and the Company has developed Loop-O 9100S, Loop-O 9400S, Loop-O 9400R, and Loop-O 9500 in 2008 and upgraded to STM-16/OC-48 and products with a higher speed to align with the international mainstream.

b-2 2008-2010

In the future, the Company will continue to develop new products and reinforce new technologies; it is estimated to have the following series of products:

2.1 Copper family:

Copper wire transmission is no longer the mainstream application in the market at present. Due to the increase in the demand for network bandwidth speed, network transmission has turned from the traditional copper wire to optical communication products (i.e., SDH and IP). However, in the third world, Southeast Asia, and South Asia markets, and for particular users (i.e., military customers), there is potentially enormous market demand. Currently, we majorly focus on overseas and domestic tenders. Due to the product stability, the copper wire transmission products of the Company are the first choices for many telecommunication companies. In the past, the Company has developed a series of copper wire transmission access products. For example: Loop-H 3900S/H 3900R, Loop-H 3300S/H3300R, Loop-H 3310S/H3310R, Loop-H 3300-3S, and other products. The design is for 1-pair (2 wires) and 2-pair (4 wires) copper wire transmission access products. At present, it develops multi-pair copper cables (4-pair or 8-pair) for point-to-point applications. They can improve the effective transmission bandwidth of Ethernet to 20-40Mbps with a transmission distance of 5km or above. Loop-H 3304R-Eth-2bis is applied to bonding protocol that is developed and designed by us using FPGA; it provides high capacity G.SHDSL (rack cards) and supports Ethernet transmission interfaces. Future sales and application:

As the demand for optical over copper wire communication has become the mainstream strategy of telecommunication companies worldwide, the ratio of the copper wire access product market has been decreasing on a yearly basis; alongside the matured product technologies, the Company will not invest additional R&D human resources to the series products; at present it focuses on the sales via domestic and foreign tenders. However, if a tender has special functional requirements, the Company will provide additional customized services to satisfy customers' requirements, which is something that general large-scale telecommunication equipment companies are incapable of.

  • 2.2 PDH family:

Multiplexers performing 64K time-slot exchanges by using the E1 interface are extensively used by global telecommunication companies and public utility and private network companies due to multiple low-speed (N x 64K) interface daughter cards and flexible use. The Company developed and designed daughter cards by using FPGA to provide diverse functional interfaces for users to access applications. In the past, the Company has developed low-speed (64K) timeslot exchange multiplexers, such as AM3410, AM3420, AM3420-5U, and AM3440-A/B/C/D. In particular, the AM3440 series can compete with products from large-scale companies (i.e., ALCATEL-LUCENT 1511MAX), and the product functions went even further. Currently: relevant product series developed by the Company are as follows: Loop-AM 3440-A: 5U exchange multiplexers with multiple low-speed daughter cards to connect to the interface.

85

Loop-AM 3440-B: 2.5U exchange multiplexers with multiple low-speed daughter cards to connect to the interface.

Loop-AM 3440-C: 3U exchange multiplexers with multiple low-speed daughter cards to connect to the interface.

Loop-AM 3440-D: 2U exchange multiplexers with multiple low-speed daughter cards to connect to the interface.

Loop-V 4200-9: 1U exchange multiplexers with multiple low-speed daughter cards to connect to the interface.

Loop-V 4200-28: exchange multiplexers with multiple low-speed daughter cards and high-speed (STM-1/DS3/E3) connections to the interface.

Future sales and application:

The revenue from the AM 3440 series products is the main force of the Company currently. It will continue to add cards based on the interface requirements of major customers in the hope of recording continual growth of its revenue, providing customized services for system functions, and improving the core functions of products to fulfill the application-oriented requirements of customers. So far, the development of the Dome interface card (used in Loop-AM 3440-A /B /C) for Loop-AM 3440 is completed, and the development of additional SDH/SONET interface for exchange multiplexers is completed to strengthen the comprehensiveness of system application functions of series products, which will have substantial help for the sales in the global market, create outstanding performance, and stimulate the continual growth of revenue in the future. The Dome interface allows Loop-AM 3440 series products to become cross-field products that not only support traditional TDM uploading interface (E1/T1) but also support IP uploading interface (TDM data/voice over IP network). In particular, Loop-AM 3440 further provided a mutual protection system between TDM and IP; the material functional innovation allows the field of sales of the series products to spread to the telecommunication market, electricity market, transportation, and other transportation networks.

Based on the market demand, before the backbone of the telecommunication transmission network upgrades to IP, the demand for PDH transmission equipment increased instead of decreased. Also, as large-scale equipment companies were focusing on the development of IP backbone development, the Company grasped the opportunities arising thereof and actively cooperated with large-scale equipment companies, allowing them to provide overall system transmission solutions, and provided ODM services for large-scale companies to secure and grasp additional business opportunities for the Company. Furthermore, for air traffic and electric power communication, the Company also designed customized products for customers in the hope of improving its sales performance.

2.3 Hybrid transmission products:

For transmission and access equipment that can connect to the traditional TDM network and the latest Ethernet, as the traditional TDM network has been used for years, it is unable to fully replace them in a short period of time. The latest Ethernet has features of low costs and high bandwidth that significantly exceed the traditional TDM network. Hybrid transmission products are transmission and access products required for the succession of IP and TDM transmission markets.

The transmission equipment (Loop-IP 6700-TDMoE/IP6716-TDMoE/IP6702TDMoE/A M3440-TDMoE /IP6440-eopdh/IP6416-eopdh) developed by the Company at present allows the existing TDM users to connect to Ethernet or Ethernet users to connect to TDM network, achieving the best economic benefits. The substantial benefits are as follows:

Transmit traditional TDM data (E1/T1/V.35) via Ethernet (Dome); transmit data on Ethernet via TDM network (eopdh-IP inverse multiplexer); Dome (TDM over Ethernet daughter cards): provide hybrid equipment for Loop-AM 3440 to transform from the initial TDM transmission equipment to TDM and IP uploading interface.

Future sales and application:

Ethernet has become the mainstream technology of global telecommunication companies. In the future, the major development of the series products is to transmit traditional TDM data (E1/T1/V.35) via Ethernet (circuit simulation). In the future, the demand in the power and telecommunication markets will be considerable. However, Loop-IP 6716 is currently available for the 16-E1 Dome circuit simulator. In 2011, the Company completed the Loop-IP 6702, which is a 2-E1 Dome circuit simulator with low costs. The development of the product focuses on the 2-E1 Dome circuit simulators required in the markets of developing countries. In 2014, the Company developed Loop-IP 6763, which provides 63E1/STM-1 Dome circuit simulators.

86

Therefore, the Company is able to provide comprehensive Dome solutions. Moreover, the Company is developing Loop-G 7860, equipment for To10G.

b-3 2010-2014

  • 3.1 IP access:

IP transmission equipment has been the trend in recent years; gigabit service access network products, IP-access demarcation devices, IP-based mobile backhaul, industrial ethernet, and pure optical fiber WDM have been our R&D focuses.

Currently, the Company is actively developing the LOOP OS system that can perform the modulization of the functions required by the IP network. Leveraging the feature, developing modules may be shared; the development system will also be able to effectively shorten the development period of products. For future applications, the development of new IP products will focus on the time to market; therefore, the development of the LOOP OS system is in line with the requirement. In the future, as high-speed Ethernet has become the mainstream access network of global telecommunication companies, the major product development of the series products will focus on the following future applications. (1) Ethernet demarcation device (2) IP mobile backhaul) (3) 1G/10Gbps gigabit multi-access platform) (4) industrial Ethernet. (5) Highspeed 10G L2/L3 industrial Ethernet switch.

  • 3.2 Wireless family:

The Company has been actively developing high-performance wireless access equipment of low price; therefore, apart from developing the 2.4/5.8G, multi-SSID Loop-W 8150 wifi with instant detection of transmission speed, it also developed a built-in function module to respond to the demand for LTE transmission. The launch of LTE provided a new market, and there will be a series of new applications structure based on the LTE 4G network in the following three to five years. As such, the Company invested in the R&D of LTE 4G to respond to the immense business opportunities.

  • 3.3 SDH family:

It is estimated that traditional communication products, including CSU/DSU, MUX, DLC, Channel Bank, and other products, will enter the latter stage of the product lifecycle with an insignificant growth rate, and optical communication equipment will rise. After experiencing the technology bubbles in 2000, the optical communication market showed a stable recovery in recent years. In the long run, the emergence of multi-media applications will stimulate the increase in the demand of household and corporate users for transmission speed; it is estimated that the global optical communication market will maintain a stable growth momentum. According to the estimation of Gartner, a research and survey institution, the number of global optical fiber users will formally exceed 100 million in 2011 and reach 200 million by 2014, giving rise to immense business opportunities.

The Company's optical communication transmission equipment continues to maintain its mainstream position. Loop-O9100, Loop-O93XX, Loop-O9400R, Loop-O9400S, LoopO9500R, Loop-O9400R PTN, Loop-O9500R PTN, and other products will become the main force of the Company in the market. In addition, the development of optical communication products in recent years has turned from bottom speed, high speed, and to high speed and large bandwidth. FOM products of low threshold are low speed. STM-16 products are high speed up to 2.5Gbps Loop-O9400R and Loop-O 9500R will improve from STM-4 (a speed of 622Mbps) to STM-16 (a speed of 2.5Gbps) to align with the SDH international standards for optical fiber transmission equipment and packet transport network (PTN) with high speed and large bandwidth of up to 10Gbps to provide high-capacity fiber loop backbone applications for LoopO9400R PTN and Loop-O9500R PTN.

Furthermore, LOOP-AM 3440, one of the major sales products, was redesigned, and the SDH/SONET interface was added, and it became Loop-O 9550, the new generation SDH and IP-mixed equipment. Moreover, the Company has developed

New PTN10G interface cards and provided more ports in ptnext for Loop-O 9500R PTN and O 9400R PTN series products to satisfy customers' requirements and offer flexible applications. The Loop-O9400R PTN and Loop-O9500R PTN transport equipment possesses a transfer capacity of up to 100G, is equipped with automated path routing ability, and provides multiple service integration platform interfaces that are organized based on customers' requirements for applications. The connection of optical fiber interfaces will be adopted to form the transmission relay to comprehensively integrate and accommodate various service interfaces and various functions for satisfying customers' requirements. This will allow the product lines of optical

87

communication transmission equipment of the Company to become more comprehensive and allow it to provide total solutions as an optical communication transmission equipment supplier.

  • 3.4 EMS/NMS and iNMS: Integrated Network Management/inet/LCT:

For over 50 communication transmission products developed by the Company and new equipment to be developed in the future, we have completed a set of smart integrated network management software, Loop-iNMS, to concurrently monitor such equipment. Regarding TDM channel equipment, SDH/SONET equipment, and Ethernet (i.e., MPLS-TP) equipment, the feature is that the single system can concurrently manage different types of network, provides smart routing and point-to-point creation functions; the network management integration may also connect to the upper layer OSS/BSS network management system through a northbound interface. The network management system of the Company has been sold to over 50 countries/regions worldwide. The Company is the one and only communication equipment manufacturer in Taiwan that developed smart network equipment management systems. LoopiNMS successfully drove the sales of the full series products of the Company and became the top seller of Loop; it provides the best solution for network management. The initial user interface of iNMS design was in English (minor parts also in other languages); adhering to the spirit and faith of local products and local services in Taiwan, the Company actively invested in human resources to support the localization of the network management system in traditional Chinese. Our major customers in Taiwan include Chunghwa Telecom, Taipower, and Taiwan Railways (all are installations around the island), and we provide original, local, and professional services and customer-oriented customized solutions.

b-4 2016-2020

With over two decades of R&D experience accumulated, the Company integrated multiple service interfaces of PDH, SDH fiber technologies, Ethernet router technologies, and MPLS technologies as a comprehensive network solution. It included the cross-field and cross-company product integration into the Company's network system to directly face end users (i.e., electric power communication and military network of the government), directly cooperate with large-scale international SI companies (i.e., NEC), and directly cooperate with iot customers (i.e., power plants, public transport, and governmental agencies) to develop new products in the hope of providing popular products and comprehensive solutions under the trends of the iot industry.

b-5 2021-2025

In recent years, Loop has commenced its strategic transformation to strongly promote mission-critical communications solutions. Several strategic transformation products have successfully entered multiple domestic and foreign infrastructure markets. The majority of the critical mission backbone network infrastructure, based on SDH/SONET technology, is reaching the end of its life cycle, and must be upgraded to packet transport networks primarily based on MPLS-TP to replace TDM technology of SDH/SONET to meet the high bandwidth demand services. Therefore, it can be anticipated that in the next 5 to 10 years, there will be a new wave of replacements for critical mission backbone networks. To contend with rapidly changing market needs, Loop's product line includes over 30 products, and it has been committed to the R&D of new products such as G7860A, WDM1800, O9400-PTN10G, O9500-PTN10G, and other mixed service multiplexers. This can provide excellent transition plans for customers during the transitional period from old to new backbone transmission communication technologies. At the same time, this enables customers to perform end-to-end circuit management in the new generation packet transmission network through a network management system similar to the concept of TDM networks, potentially saving customers the training costs of maintenance and operation personnel. Meanwhile, the Company also upgraded the access service product line (AM3440-CCPB and IP6704A) and developed proprietary ultra-low latency and zeropacket-loss protection switching technologies to solve two major hindrances such as difficult-tocontrol latency variations and asymmetrical delays faced by MCC users during the transitional period of backbone technologies. Building upon these innovative technologies, Loop's comprehensive upgrade from backbone transmission to service access and network management systems will provide customers with dozens of MCC backbone network to access end-to-end solutions.

For strategies in the future market, the MCC market is enormous and requires customized overall solutions. At present, many countries have initiated dedicated acts for major infrastructure. Loop's network transmission equipment and solutions are highly competitive. With the Company’s international partners and local system integration suppliers, it occupies a leading position in the MCC overall solution market. The next step is to expand the Company’s market presence by actively participating in major communication exhibitions held worldwide and organizing product seminars. Through showcasing the performance and features of new Loop products, the Company aims to

88

increase exposure and enhance brand visibility.

Loop Telecom’s team will develop a vertical integration strategy to target international customers for maintenance service revenue. This is expected to generate more orders for the company and boost its operational performance. Combining the MCC networking product portfolio will enhance its utilization of automated testing systems under the new business. The niche of integrating the new G7800 with various products will create a globally leading product, which is likely to become the growth focus for operations in the future. At present, Loop Telecommunication is one of the top three companies for MCC solutions around the world. Based on the existing foundation, the Company continues to reinforce its management and makes constant efforts by adhering to the philosophy of continuing to develop new products and explore new markets. In the future, the Company will become a leader, grasp business opportunities, create excellent performance, and continues to strive for the maximized operating performance for all shareholders.

  • B. Current plant for the most recent year and new products being developed The Company's key development project this year is the flagship Loop-G7800, a next-generation PTN highbandwidth multi-functional transmission access equipment. It is a major highlight of Loop’s strong entry into the MCC market. The Loop-G7800 is based on The Company's years of accumulated and continuously innovative technology. At the same time, the Company has invested heavily in developing a source code management integrated automated testing platform to enhance quality management in every stage from R&D to production. In addition to serving as a backbone node, the G7800 also supports over a dozen types of interface cards that accommodate multiple rates of service. This enables support for a range of network interfaces from traditional low-speed 64K circuits to next-generation critical mission backbone requirements of 100G packet transmission networks, all within a single system. Furthermore, configurations can be tailored according to customer applications. The comprehensive feature allows customers to have more flexibility for network planning in the future; regardless of phased budgeting projects increased based on requirements or the new era overall transmission network solutions that wish to be settled at one go, the Loop-G7800 product line will be able to satisfy such customers. At present, multiple partners have been actively inquiring about the launch of G7800.

Except for the major backbone and access network product series used worldwide, Loop has explored Information Security System (ISS), Artificial Intelligence (AI), iNMS-Big Data Analysis/AI, automatic system diagnosis and repair, inet-Circuit Creation/Auto-Diagnostic, corporate new era office network, corporate 5G private network, and other new technologies in recent years to expand into new markets of corporate and governmental information safety network overall solution development. In recent years, due to frequent information security events, the requirements for information of corporations and the government have been increasing. Loop has obtained the ISO27001 information security certification and performed a firmware upgrade for different products catering to the MCC market to support FIPS 140-3. Meanwhile, the Company also plans to launch the Loop-ISS2150 mission-critical network firewall and Loop-ISS2110 government configuration baseline network setting management system to assist customers in establishing the optimized MCC information safety protection environment.

  • a. Access multiplexer series products Loop-AM3440 of the Company is widely adopted worldwide, including the power system, transportation, governmental and military communication network, and other markets in Taiwan. Its high reliability, stability, various access interfaces, and the application cards developed based on customers' application requirements allow Loop-AM3440 to continue to maintain the leading position in the access multiplexer market.

  • Broadband packet backbone networks have become popular; however, the tradition TDM access service for end equipment is still generally being used. In response to market demands, the Company has utilized proprietary FPGA technology to design and develop the new generation control card, AM3440, along with an expansion backplane featuring Ethernet high-speed buses. This enables it to meet the end-to-end service communication requirements for various access services in TDM and packet hybrid networks. Due to differences in transmission characteristics between packet networks and the constant bit rate (CBR) performance of TDM networks, meeting stringent quality requirements such as low latency for critical mission services becomes even more challenging. The Company’s self-developed end-to-end packet loss protection algorithm has the capability to meet the latency requirements of end-to-end services in packet network environments, and has been tested and verified by major international companies. Furthermore, to address the cybersecurity requirements of critical mission networks, the Company in 2023 obtained validation for compliance with the United States Federal Information Processing Standards (FIPS) 140-3 security standard for cryptographic modules. Furthermore, the AM3440 platform has development to

89

support MPLS-TP transport capabilities. The outstanding performance and reliable quality will make it an indispensable access multiplexer for the new generation NG-SDH and PTN backbone network.

  • b. Optical communication equipment

Due to the development of optoelectronic technologies, optoelectronic cables with high transmission bandwidth with an attenuation of less than 1db each km may be produced in mass. Together with the development of high-order digital multiplex technologies and the development of high-performance "optoelectronic devices," high-speed(), high-capacity optical communication systems with a transmission speed per second reaching 90million "bits," even 400 million "bits" per second have entered the stage of practical use. Light can also generate a series of patterns by flashing (i.e., on and off of the flashlight), which is called the "optical signal." Light possesses greater transmission information capacity than power; that is, light can surely generate shorter pulses and form patterns of high density and abundant information within the same period of time. Under such speed, "stacks" are formed by combining such graphic units to transmit multiple different information within one fiber. This is the reason why "optical fiber" is able to concurrently accommodate much information for transmission.

Advantages of optical fiber communication

  • A. Long-distance communication with a reduction in costs:

  • If an optical fiber with a 1.3µm wavelength for transmission, there is a loss of approximately 0.4-0.5db per km, an optical fiber with a 1.5µm wavelength has a low transmission loss of approximately 0.20.25db per km.

  • Compared to traditional copper cable transmission systems, the distance between repeaters for optical communication is lengthened to tens of kilometers, and optical communication can significantly reduce the number of repeaters, reducing the costs of communication systems.

  • For example, the distance between Taipei and Keelung is slightly over 20 kilometers; if an optical fiber connection is adopted, the establishment of a large-scale machine room in Keelung is not required. The low transmission loss of optical fibers lengthens the transmission distance between repeaters and reduces the costs and complexity of systems; therefore, optical fibers are more suitable for long-term transmission.

  • B. Optical fibers are delicate, light, and flexible and may be easily bounded; therefore, when optical fibers are bounded as optical cables for laying and installation, they save room for pipes. Optical fibers effectively improve the use rate of pipes, possess high economic efficiency for allocation rooms, and are suitable for aircraft, satellites, and vessels.

  • C. Optical fibers possess enormous communication bandwidth reaching 1-2ghz or above. The bandwidth of general cable modems is approximately 330mhz-550mhz; in comparison, optical fibers possess ultra-high signal carrier capacity.

  • D. Optical fiber materials are generally quartz glass, which has non-corrosive, fire-proof, and water-proof characteristics and long, useful life. In addition, optical fibers have favorable flexibility and adaptability to perfectly protect wrappers and tensile substances, allowing optical fiber transmission to save operating costs.

  • E. They are not affected by electromagnetic waves, applicable to fields that may be easily stroke by lightning or high power fields, significantly improving the fidelity for communication.

  • F. With high confidentiality, signals will not radiate outside of optical fibers, which is suitable for military, bank connections, and computer networks.

Due to the abovementioned advantages of optical fiber systems, countries are optimistic about the prospects of optical fiber communication and have invested major capital and human resources in R&D. With the arrival of the information era, communication networks of high capacity, low loss, and favorable reliability are fundamental, and optical fiber communication systems are the best options. Therefore, it is estimated that the majority of the copper cable will be replaced with optical fibers in the near future.

The scope of the overall optical fiber communication industry is relatively extensive, from local end equipment, transmission equipment, parts and components in transmission equipment, and user network equipment have proprietary products of optical fiber communication. Even though there are many diverse products, categorization may be made based on products that can have commercial mass production at present; parts and components can be roughly divided into three categories: optical fibers and optical cables made with optical fibers, active optical elements, and passive optical elements.

90

Loop-O9500 PTN and Loop-O9400 PTN are also new-generation optical fiber transmission network multiplexers that can concurrently support two transmission networks in one frame. For example, optical fibers synchronize the SDH/SONET transmission network and MPLS-TP packet switching transmission network to use as the applications of transmission backbone, and the equipment possesses add-drop, multiplex and de-multiplex functions that can support low-speed audio/data, Teleprotection interface, and the exchange capacity and other interface signal compilation and multiplexing of the high-speed STM-4/OC-12, STM1/OC-3, DS3, E1, T1, Ethernet, MPLS-TP PTN for long-term transmission through optical cables. The transmission equipment system possesses protection systems and abilities, such as LSP 1+1/1:1 protection, provides the automated routing function and multi-service integration platform (PDH/SONET/SDH/PTN) to connect services of each point via the optical fiber interface, constituting the transmission repeater to complete, integrate, and accommodate various service interfaces, achieving data exchange requirements of different regions. The transmission equipment protocol and the protection system switching time is less than 50ms, which is fully in compliance with the structural specifications of the International Telecommunication Union (ITU): and in compliance with the framework regulations set by the Internet Engineering Task Force (IETF). It is also in compliance with new generation synchronized transmission equipment technologies; the system provides complete applications for high-capacity optical fiber loop backbone networks and comprehensive solutions and is in line with the MCC market.

With the constant growth in the demand for high bandwidth and transfer capacity, equipment functions, and network management, the trend of optical fiber communication has been formed. Certainly, the Company will actively invest a great amount of R&D personnel to constantly develop new series products (i.e., G7800) and next gen 400G transfer capacity SDH to satisfy the enormous demand for communication equipment for the business opportunities in the market. The optical fiber communication industry is also expected to become a new star industry in Taiwan and the global MCC market.

  • c. IP transmission equipment series products

The Company has launched Loop-IP6704/AM3440-E/G7860A TDMoIP, which can transmit T1, E1, and Voice signals on IP networks and IP6510, which can transmit IP data and Voice signals on PDH networks. For Loop-IP 6704/AM3440-E products, we have successfully developed the increase in multiple different interface channels and added TDMoIP function cards for Loop-AM 3440 and Loop-O 9500. IP6704/AM3440-E DACS products combined the FPGA design, special TDM over Ethernet, and TDM DACS, which increased the design difficulty; however, functional upgrades and customization uniqueness of the product are maintained to achieve the timeliness of time to market, possessing advantages. The Company has always been attaching its attention to the development of new products. For the TDM over Ethernet product and equipment market, it is confident that it can develop products that compete with large-scale international companies; by doing so, it hopes to bring up the trend for the R&D capacity of the communication system industry in Taiwan to make further breakthroughs, and to secures a seat as a top-tier large-scale international company. In addition, the design of LOOP G7860A is the first network equipment of the Company that combines SDH/SONET, PDH E1, TDMoIP, Gigabit, Ethernet, POE/POE+, T3, Stackable, and IEEE 1588 V2 functions. The development of G7860A not only satisfies the functional requirements of 2G/3G/4G/5G telecom. With our R&D experience accumulated over two decades and the market penetration capacity of marketing in markets of over 80 countries, we decided to introduce the FPGA design to improve the flexibility for customization and functional upgrades of products in the future, which is the segregation with the design of large-scale companies at present. Due to the introduction of the FPGA design, we possess mobility, timeliness, and uniqueness of customization for the R&D of new functions in the future to satisfy the requirements of customers in the market. The Company focused on the R&D of CO-end and CPE-end equipment. For the R&D segregation, apart from placing the standardized IC into the design, as the existing standards and protocols are not sufficient for the application of actual circuits and functions, peripheral circuit designs and the innovation of FPGA system functions are required to be introduced. The Company adopted the existing standards as the foundation and introduced the peripheral circuit design to create new functionality and innovation breakthroughs. In addition, 61850 switch products for power are equipped with HSR/PRP modules of high availability and are compliant with the majority of the stringent and redundant requirements to ensure no data packet is lost and guarantee that goose data packets will arrive at their destination.

The currently planned high-density managed rack-mount L2/L3 61850 switch will provide the flexibility required for applications. Users can choose between different 4/8 port modules and easily customize the device.

This layer 2 or layer 3 switch is designed specifically for substations, supports ipv4 static routing, RIP v1/v2, and ospfv2. It is based on hardware-based IEEE1588v2 (accredited with nanosecond precision), making it one of the most reliable GMC backups. In addition, synce (Synchronous Ethernet) is embedded, fully supporting the PTP Power Profile.

91

When configured with high availability HSR/PRP modules, it complies with the strictest redundancy requirements, ensuring no packet loss and guaranteeing GOOSE packets reach their respective destinations. Its high efficiency ensures no data packet loss and provides network redundancy self-recovery mechanisms under full load, allowing for the establishment of a reliable network through almost any redundant ring topology. This switch supports ITU-T G.8032 ERPS Ring, IEEE802.1D-2004 RSTP, STP, and MSTP, enabling network redundancy and providing intelligent features such as Quality of Service (qos), IGMP, Port mirror, etc.

There are two types of power input models available for selection. One is for low DC voltage (redundant 24-120VDC input), and the other is for higher voltage applications commonly found in distribution networks (redundant 110-240VAC, 24-120VDC, or 120-380VDC input). The additional 4x10ge uplink SFP slots make it suitable as the backbone of substations.

  • d. Corporate grade network management and integration solution

With the flourishing development of network technology, MCC critical mission networks now place greater emphasis on enhancing network resilience and cybersecurity. Besides adopting international standards certifications such as ISO 27001, IEC 62443-4-1, and FIPS 140-3, the Company’s network management personnel have also established robust cybersecurity defenses for traditional OT domain customers. Comprehensive solutions have been introduced to improve on DCN management channel single point failures, featuring SPI/IDS/IPS/DPI security gateway devices, and compliant products. Furthermore, the Company's third-generation network management system adheres to the logical layered network management architecture established by ITU-T, which integrates traditional TDM network management while actively incorporating a diverse range of MPLS-TP/IP next-generation network product equipment, such as G7800, G7820, G7860A, O9400R/PTN, O9500R/PTN, and AM3440/CCPB. Covering end-to-end business planning, automated circuit creation, and advanced rapid network diagnostic capabilities, The Company’s services provide customers with cost-effective upgrade solutions for existing systems, significantly reducing operational and capital expenditure costs associated with replacement. This comprehensive approach enhances the quality and efficiency of business execution. With the rapid rise of the AI industry chain, the Company has actively invested resources in R&D for developing the AI sector. Building upon the expert system established in the existing network management system, Loop is creating an aiops intelligent operations platform that integrates technologies such as data mining, machine learning, and big data analytics. Through data science analysis tools, this platform tightly integrates increasingly complex operational tasks, providing enhanced visibility for network management, accelerating collaboration mechanisms on the network control plane, and enabling precise predictive analysis for proactive issue response. Based on the practical implementation of the aforementioned cybersecurity solutions, the introduction of AI intelligent technologies, and the comprehensive integration of MPLS products, the Company's network management solutions have garnered high interest and trust from major customers and multiple projects. In the future, Loop Telecom will continue to excel in providing network management solutions for critical infrastructure in transportation, aviation, energy, military, and emergency public safety sectors.

  • e. 4G LTE base station transmission equipment

Customers of the Company are mostly from developing countries (i.e., India, Southeast Asia, and the Middle East); countries in such regions have an increasing demand for the communication equipment of the Company at present. Furthermore, the Company is actively developing smart network equipment management systems and IP transmission equipment to satisfy the requirements of the future market. Currently, the development of the MPLS-TP 10G carrier Ethernet equipment we invested in is completed, and we continue to explore relevant product lines. Additionally, our company is currently developing 5G CPE equipment, which will allow us to extend our long-standing technical expertise and experience in optical communication networks to 5G wireless transmission networks. This will enable customers to transition existing services to wireless transmission networks and provide new types of service content.

92

C. Estimated completion progress of the unfinished R&D plan

Project Estimated completion time
G7860A_POE Phase 1 Estimated to complete the development in April 2024
G7800-B_Backplane Estimated to complete the development in April 2024
G7800_POE Estimated to complete the development in April 2024
INMS_V9.03.04 New Feature Estimated to complete the development in April 2024
G7800 Phase 2-b Estimated to complete the development in April 2024
G7800_GEDTT Estimated to complete the development in April 2024
G7800_6RS232i Estimated to complete the development in April 2024
AM3440_8RS232_02 Estimated to complete the development in June 2024

Other major factors that affect the success of the R&D regarding the R&D plans in the above table are as follows:

  • a. Adopt accurate market strategies and accuracy evaluation to align with the requirements of major customers.

  • b. Provide customization functions in accordance with the demand in the market to satisfy the requirements

  • of major customers.

  • c. Increase R&D human resources and improve the excellent R&D technologies of the Company to build a stable and healthy R&D team.

  • d. Duly introduce the IBM system to effectively control the development progress of products so as to complete the development based on the existing budgets and the target timeline required by customers, ensuring the time to market of our R&D achievements.

D. R&D expenses expected to be invested in the following three years

(In Thousands of New Taiwan Dollars)

Item/year 2023 2024 2025
Net revenue (the Company did not disclose
its financial forecast)		 Not applicable Not applicable Not applicable
Research and development expenses 162,871 171,015 179,566
Ratio of R&D expenses to net operating
income		 Not applicable Not applicable Not applicable

E. Current progress of uncompleted R&D plans and R&D expenses required to be invested:

Project Commencement
date of plan		 Initial
completion date
Estimated
completion date
Current
completion
progress
G7860A_POE Phase 1 2023/5/8 2024/1/31 2024/4/5 77.70%
G7800-B_Backplane 2023/9/18 2024/4/5 2024/4/5 60.10%
G7800_POE 2023/5/4 2024/1/26 2024/4/12 76.70%
INMS_V9.03.04 New Feature 2024/1/2 2024/3/29 2024/4/12 51.10%
G7800 Phase 2-b 2023/8/9 2024/1/25 2024/4/17 81.00%
G7800_GEDTT 2023/8/1 2024/2/29 2024/4/22 85.80%
G7800_6RS232i 2023/9/4 2024/2/29 2024/4/22 68.70%
AM3440_8RS232_02 2023/12/11 2024/6/18 2024/6/18 31.90%

93

F. Major factors and risks affecting the success of R&D in the future

Item R&D plans in the most recent year Major factors affecting the success of R&D
1 G7800_32TE1 a.
New Software and Architecture design
b. New Mechanism/Platform
c.
Man power management
2 G7800_B2G5 Phase3 a.
New Software and Architecture design
b. New Mechanism/Platform
c.
Manpower management
3 G7800_POE a.
New Software and Architecture design
b. New poe chip, never used before
4 G7800_JEVO Phase 2 a.
New Software and Architecture design
5 G7800_L3 redundancy a.
New Software and Architecture design
6 G7800_MEF 3.0 a.
New Testing environment setup
b. New Testing Method
7 G7800-B_Backplane a.
New Architecture design
b. High Speed SERDES
8 AM3440_8RS232 a.
Man power management
9 G7800B_efan Box a.
New FAN and power module

(4) Long-term and short-term business development plans:

A. Development of long-term and short-term business.

a. Development of short-term business

a-1 Products and services:

The short-term development is primarily order production. The Company continues to make improvements and adopts customers' requirements as the core to developing new products with high added value. In terms of technologies, we will establish technological capacity for our selfowned brands, reinforce the R&D of products and software with high gross profits, and expand regional and other industrial development to effectively grasp business opportunities.

a-2 Finance:

The consolidated revenue of the Company throughout the year was NT$649,097 thousand; net income was NT$199,659 thousand, and earnings per share were NT$3.00. The benefits of focusing on the Taiwanese market have been recorded, together with the constant reinforcement of internal management and optimization and reformation of the organization of the Company; the Company will improve its efficiency and continue to explore new customers, new products, and the SI market, to allow its overall profit margin to achieve 60% or above. We maintained favorable performance in terms of financial structure, solvency, accounts receivable turnover, and other financial indicators.

a-3 Investment:

In 2013, Loop commenced its strategic transformation, strongly promoted mission-critical solutions, and successfully entered multiple domestic and foreign markets in recent years. As the bandwidth hungry applications in the mission-critical communication (MCC) network continued to increase TDM-based network backbone is gradually replaced by Packet-based one. Facing the transition period from existing technologies to new technologies, the provision of the new generation packet transport network technologies and concurrently accessing the existing legacy services have become the solutions most required by MCC users. Loop's product line includes over 60 products, and it has been committed to the R&D of new products (i.e., G7860A, WDM1800, O9400-PTN10G, O9500-PTN10G, and other mixed service multiplexers for the abovementioned requirements. Meanwhile, it also upgraded the access service product line (AM3440-CCPB, IP6704A, and G7820) and developed Loop proprietary ultra-low latency and zero-packet-loss protection switching technologies to solve two major hindrances faced by MCC users in terms of

94

the packet transport network. Combining the network management system with point-to-point circuit management capability, creating more than a dozen overall solutions from MCC backbone networks to access terminals for customers.

  • b. Long-term business plan

  • In the future, we will reinforce the development capacity for new products, improve product R&D efficiency, and shorten the development time of products. Also, we will promote the logo of Loop's selfown brands. Apart from satisfying the functional requirements of customers for products, we may continue to maintain the high added value of product customization, avoiding price competition within the industry. We recorded growth in the EU and central Asia, while there has been a slight decrease for the Southeast Asia and Indian markets. Meanwhile, we will enhance our ODM and OEM operations by focusing on major customers, and we intend to actively secure cooperating opportunities with major customers in the future. In terms of industry, electricity and governmental agencies account for 70% of our total revenue, and transportation and private corporate markets account for approximately 20%. To expand our operations, we have also entered the oil industry, power industry, public utilities, and private enterprises. For example, Taiwan Railway, HK MRT, India railway, India power, European power, oil and natural gas, Shell Oil Company, Basin power, Internexa, and other relevant industries. The Company will continue to expand its overall marketing channels and improve its production and marketing integration capacity and put new products into mass production to continue to contribute to the future profits of the Company.

Moreover, based on the tender cooperating model, the Company continues to cooperate with large-scale international companies and SI companies of different marketing countries and provide customized designs as advantages to secure new tenders. Implement the R&D model of Time to Market and enhance the application systems to provide integrated services to customers, which not only provides single products to customers but also provides integrated application service consultation, improving the cooperating relationships with customers and the development of new ODM customers.

It is estimated that the global macroeconomic environment will improve successively. With our existing basis, the Company will strive to improve its marketing, R&D management, production management, and competitive strength in other aspects. At present, the Company has 27 product lines and has business dealings with 46 countries; our operations are market demand-oriented. Apart from the communication industry, the Company will continue to actively explore power, transportation, oil, natural gas, banks, governmental agencies, and other relevant communication markets, grasp business opportunities, and create a favorable performance.

95

2. Overview of market and production and marketing

  • (1) Market analysis:

A. Sales regions of main products of the Company

80% of our revenue was from 9% of countries having dealings with us. Our export sales accounted for approximately 70% of the revenue throughout the year. In particular, we recorded growth in America, the EU, and Taiwan. There has been a slight decrease for the Indian and Middle East markets.

(In Thousands of New Taiwan Dollars) (In Thousands of New Taiwan Dollars) (In Thousands of New Taiwan Dollars) (In Thousands of New Taiwan Dollars) (In Thousands of New Taiwan Dollars) (In Thousands of New Taiwan Dollars)
Year 2021 2022 2023
Sales region Sales amount % Sales amount % Sales amount %
Domestic 252,119
49
107,240
24
204,850
32
Overseas America 54,651
12
101,558
23
130,725
20
Europe 71,234
14
85,562
20
209,900
32
Asia 115,254
24
102,028
23
93,457
14
Others 22,252
1
41,854
10
10,165
2
Subtotal 263,391
51
331,002
76
444,247
68
Total 515,510 100
438,242		 100
649,097		 100
  • B. Market share and the supply/demand in the market and the potential of growth in the future

The product sales in the main market of the Company in 2022 and 2023 and the future insight into the market sales are as follows.

a. Sales (provision) region of major products (services):

Region/year 2022 2023
Domestic 24%
32%
Asia 23%
14%
Africa 1%
1%
America 23%
20%
Europe 20%
32%
Others 9%
1%
Total 100%
100%

b. Market share:

The Company is a dedicated communication network equipment manufacturer, and the overall products account for approximately 0.05% of the market share of the overall production value of the communication industry in Taiwan. The sales ratio of main products throughout the year and the domestic market share of communication equipment are as follows: PDH series 25%/0.012%, SDH series 20%/0.010%, iNMS 4%/0.002%, MPT series 34%/0.017%, and others 17%/0.009%.

c. Insight into the demand/supply and growth potential of the market in the future In 2021, the production value of the communication industry in Taiwan grew stably, and it is likely to grow further in 2024. Despite the trade war between the U.S. and China, other changes in the international environment, and the effects of inflation, interest rates, and other macroeconomic factors on the communication industry, the global communication market is expected to maintain positive growth. Operators transfer the focus on network-building from the coverage rate to capacity, low latency, and user experience, bringing about the further technological development of products related to the network infrastructure of operators (i.e., [macro cell, small cell, and switch router], CA, Wi-Fi, LWA (LTE/Wifi aggregation and high-end small cell technologies). The application requirements and network challenges of the next-generation mobile communication network call for high-speed mobile bandwidth, broad coverage, iot, and low latency, facilitating the active arrangements by leading international companies for high-frequency access technologies, network virtualization, software open source, customized application, edge computing, iot connection technologies, and other focuses.

96

Apart from deepening our existing product lines (i.e., SDH, PDH multiplexer, and the entire series of inet/iNMS), the Company will invest a greater portion of its R&D capacity in the future trending technologies and the expansion of the bandwidth of products. The bandwidth has been upgraded from 2.5G to 10G, and the Company is aiming at 100G, allowing the Company to have mature and comprehensive technologies for PTN, MPLS, carrier Ethernet, DWDM, and other products and comply with the requirements of iot in the future.

  • C. Competition advantages, favorable and unfavorable factors in the long term, and countermeasures a. Competition advantages

The Company focuses on the development of communication and telecommunication systems. With over three decades of R&D experience, the Company is one of a few companies with vertical R&D capacity from downstream to upstream and is the only local provider of overall solutions for the backbone networks of telecommunication transmission in Taiwan. Products developed by Loop include communication transmission technologies of 64Kbps in the early stage to PDH, SDH, and to the latest PTN technologies. It has accumulated over 100 types of communication interface cards and over 50 kinds of products of different categories. By adopting the integrated network management system in traditional Chinese that we developed, we integrated hardware, software, equipment, and network management and became a reliable provider of integrated solutions for communication and information systems.

Our communication system integration solutions have spread across Asia, Europe, America, Australia, the Middle East, and other countries, proving that our reliability, stability, and durability are recognized and supported worldwide.

The international competition will only become more intense and fast. Facing the challenges in the competitive environment, the Company will strive toward reducing production costs, leveraging on the advantages it possesses in terms of technologies to expand its sales rate and market share of its products so as to improve its profits in due course. Looking ahead, the Company will continue to focus on launching the following products and services: (1) Optical communication equipment: Integrate PTN and SDH/SONET platforms to provide total solutions. (2) IP transmission equipment: Combine the L2/L3 Ethernet access transmission and carrier Ethernet (including CE and MPLS-TP) technologies to develop the next-generation G7860A and G7820 transmission network equipment. (3) IP/TDM Hybrid equipment: Combine abundant existing terminal equipment interfaces and applications, the Company will continue to improve the emulating bridging and virtual network equipment of IP67xx series and TDM over Ethernet and widely apply relevant technologies on the hybrid card equipment of the Company. (4) 5G communication transmission equipment: Based on technologies and experience accumulated for 3G/3.5/4G base station, the Company has completed WDM1800 and MPLS-TP 10G carrier Ethernet equipment and has been actively making arrangements for 5G communication technologies. (5) Comprehensive network management system: In response to the newly launched MPLS/CE PTN and innovative products based on PWE3 technologies to provide point-to-point business planning, circuit building, business diagnosis, flow engineering, qos, and other advanced network management functions. (6) Next-generation corporate office LAN: Integrate self-owned products of the Company, relevant information safety software/hardware equipment, iiot solutions, and A.I. to assist customers in building office network system structures that satisfy information safety, the physical safety of assets, and office environment safety.

For strategies in the future market, the MCC market is enormous and requires customized overall solutions. At present, many countries have initiated dedicated acts for major infrastructure. Loop's network transmission equipment and solutions are highly competitive. With the Company’s international partners and local system integration suppliers, it occupies a leading position in the MCC overall solution market. The next step is to expand the Company’s market presence by actively participating in major communication exhibitions held worldwide and organizing product seminars. Through showcasing the performance and features of new Loop products, the Company aims to increase exposure and enhance brand visibility.

b. Favorable factors:

  • b-1 Finance: The financial structure, solvency, operating ability, profitability, cash flow, and other financial ratios are above the general level within the industry.

  • b-2 Market: There are 46 countries having business dealings with the Company worldwide. Our export sales accounted for approximately 70% of the revenue throughout the year. In particular, we recorded growth in America, the EU, and Taiwan. There has been a slight decrease for the Indian and Middle East markets. In terms of industry, electricity and governmental agencies account for 70% of our total revenue, and transportation and private corporate markets account for approximately 20%. In 2023, 80% of our revenue was from 9% of countries having dealings with

97

us. Among all 27 product lines, 80% of the revenue was from 12% of the sales products. Driven by a favorable outlook in the communications market, Loop Telecom's long-term partnerships with international SI heavyweights are expected to sustain growth in Europe and America. The domestic market has also entered the next development phase, while the markets in Southeast Asia are recovering. Continued development in emerging markets and proactive advancement in next-gen communication technologies will fuel growth under new trends.

c. Technology:

With over three decades of R&D experience accumulated, the Company integrated multiple service interfaces of PDH, SDH fiber technologies, Ethernet router technologies, and MPLS technologies as a comprehensive network solution. It included the cross-field and cross-company product integration into the Company's network system to directly face end users (i.e., electric power communication and military network of the government), directly cooperate with large-scale international SI companies (i.e., NEC), and directly cooperate with iot customers (i.e., power plants, public transport, and governmental agencies) to develop new products in the hope of providing popular products and comprehensive solutions under the trends of the iot industry.

Facing the intense situation of the trade war between the U.S. and China and uncertainties derived from the war and geopolitics, the economic environment became challenging. 5G brought about the digital transition of all industries, giving rise to a new wave of evolution within the network industry and to business opportunities of new technologies and new applications. Based on the existing foundation, the Company continues to reinforce its management and makes constant efforts by adhering to the philosophy of continuing to develop new products and explore new markets.

With the successful R&D experience of 3G/4G and in response to the requirements of 5G communication in the future, the Company has also been actively developing optical fronthaul series products (i.e., OBSAI, CPRI, and other DWDM series products). They were launched for sale in 2020. Facing the transition period from existing technologies to new technologies, the provision of the new generation packet transport network technologies and concurrently accessing the existing legacy services have become the solutions most required by MCC users. Loop's product line includes over 60 products, and it has been committed to the R&D of new products (i.e., G7860A, WDM1800, O9400PTN10G, O9500-PTN10G, and other mixed service multiplexers for the abovementioned requirements. Meanwhile, it also upgraded the access service product line (AM3440-CCPB, IP6704A, and G7820) and developed Loop proprietary ultra-low latency and zero-packet-loss protection switching technologies to solve two major hindrances faced by MCC users in terms of the packet transport network. Combining the network management system with point-to-point circuit management capability, creating more than a dozen overall solutions from MCC backbone networks to access terminals for customers. Such solutions may be used in domestic and foreign power company, transportation, airport, and military markets. They will have material contributions to our revenue in the following years.

From R&D to production, and to market branding, the Company has transformed from a pure product supplier to a contractor of solutions and stands out as a professional manufacturer in Taiwan. The Company has gained recognition of extensive users and ODM orders with large-scale international companies in the intensive global competition, and its strong software/hardware capacity is unlikely to be plagiarized or duplicated.

d. Management:

The Company has an outstanding R&D leader and R&D management team and has introduced internationalized CQ, RPM, CAR, and CCT systems of IBM for the progress follow-up of projects and human resource and working hour management of the R&D Department so as to effectively grasp the procedures and resource allocation of different projects on a timely basis.

D. Unfavorable factors:

a. Finance:

The export sales market accounts for over 70% of the Company's revenue. Any intense fluctuation of the exchange rate of NTD will cause considerable exchange effects.

  • b. Market:

Due to the trade war between the U.S. and China and changes in international situations, the growth in the emerging market recorded was less favorable than expected. Furthermore, the transition of communication technologies and the conservative market affected the Company's operating performance. Facing the changes in the market, the Company has transformed from a pure product supplier to a contractor of solutions, which will have material effects on the contributions to its revenue in the future.

98

  • c. Countermeasures:

    • c-1 When providing quotes to export sales, the Company also considers the development of exchange rates to minimize the level of impacts of the fluctuation of exchange rates on the profits of orders accepted, engages in quotations of multiple currencies based on the circumstances, and uses strong currencies for trading to avoid possible risks.

    • c-2 Facing the competition between enterprises and within the environment, the Company continues to observe market requirements and develop functional and differentiated products. To maintain the competitiveness of its new products and break through the resource restrictions of new product development, the Company will call for more outstanding talents in the future to carry out R&D and innovation and reduce operating costs.

    • c-3 In light of the global economic development, the Company continues to develop new markets and combinations of different industrial patterns and new products. In the future, the Company will fully invest in performing the market pattern of "solution provider," focus on the requirements of major customers and the application requirements in the future market, and provide comprehensive and integrated transmission systems for customers' use. Furthermore, the Company strives for ODM opportunities with large-scale international companies and seeks concepts and targets for the development of new products. It will closely combine the strategies of new products under development and the practices of product development management procedures and adopt product specifications and expected benefit audits that are in line with the market requirements as the foundation to improve the success rate of product development and profitability.

  • (2) Main use of major products and their manufacturing procedures:

A. Main use of major products

  • AM3440 may be used in telecommunication, railway communication, electric power communication, hydraulic communication, traffic communication control, security systems, and automated control communication; the main use is as follows:

  • a. E1 multiplexers are used for TDM E1/T1 network transmission.

  • b. Point-to-point video conference (V.35 or Ethernet interface).

  • c. Environment monitoring (dry contact or Ethernet interface) (i.e., door alarm and video surveillance

  • d. Auto-control (RS232 interface), such as: SCADA system, automation control, and traffic light control.

  • e. Audio, data, and Ethernet transmission.

  • f. Teleprotection/SCADA applications.

  • g. Teletra wireless transmission applications.

  • h. E1 DS0 SNCP is used in police/fire control/emergency relief systems.

  • i. RS232 radar clock transparent transmission is used in airborne radar.

  • j. ECA is used in echo cancelation for transformation from 2-line to 4-line transmission of audio circuits.

  • k. ABRA is used in the point-to-point transmission of analog audio modems of the power category.

  • l. 6UDEA/8UDTEA is used in banking and SCADA.

99

B. According to the operating specifications of ISO9001, the production procedures of the Company are as follows:

==> picture [457 x 411] intentionally omitted <==

----- Start of picture text -----

Development procedures
for new products:
Market evaluation
Product specification
formulation
Hardware Software structural
structural design design
Detail design of Detail design of
hardware software
Software/hardware
system integration test
EMC PreScan
Small-amount production
Mass production
----- End of picture text -----

100

Small-amount production:

==> picture [365 x 361] intentionally omitted <==

101

Mass production procedures:

==> picture [420 x 390] intentionally omitted <==

----- Start of picture text -----

Production Visual Final Quality
Schedule Inspection Lot Sampling
Inspection (F/T)
Material
Burn-In
Preparation
Packing
Production Final
Assembly Function Test
Final Quality
Lot Sampling
Inspection (Visual)
PCBA Final
Function Test Assembly
Turn-In
Pre-Work
----- End of picture text -----

(3) Supply of main raw materials

Products produced by the Company are composed of many parts and components that we purchased from extensive counterparties; therefore, the Company only enters into long-term supply orders for crucial parts and components. Raw material procurement of the Company is relatively dispersed, and there is no risk of overly concentrated sources. The Company has always maintained favorable cooperating relationships with suppliers, and the level of cooperation of suppliers is high; therefore, the supply status in the most recent three years remained healthy, and there was no supply shortage or interruption in the past three years. The supplying status of major raw materials of the Company at present is set out in the following table:

Main raw materials Main supplier Supplyingstatus
PCB Kintech and Circuitech Favorable
IC Avnet and WT Microelectronics Normal
Power supplier Universal Microelectronics,MEAN WELL Normal
LCD SDEC Technologyand Winstar Display Favorable
Cable Yuh Chieh and Goal Ray Favorable
Connector OUPIIN Enterprise and Chief Land Favorable

102

  • (4) List of customers accounting for 10% or above of the Company's total purchases (sales) in any of the most recent two years and purchases (sales) amount and ratio, and the descriptions of the reasons for the changes:

  • A. Information on the major supplier for the most recent two years

(In Thousands of New Taiwan Dollars) (In Thousands of New Taiwan Dollars) (In Thousands of New Taiwan Dollars) (In Thousands of New Taiwan Dollars)
2022 2023 As of 2024 Q1
Item Name Amount Ratio to net
purchase
throughout the
year [%]
Relationship
with the
issuer
Name		 Amount Ratio to net
purchase
throughout the
year [%]
Relationship
with the
issuer
Name		 Amount Ratio to net
purchase as of
Q1 of the year
[%]		 Relationship
with the
issuer
1 WT Microelectronics 25,186
17.17
None		 WT Microelectronics 67,300
29.23
None		 WT
Microelectronics
13,927
45.92
None
2 Avnet 12,959
8.84
None		 Avnet 34,510
15.00
None		 Avnet 2,453
8.09
None
3 Chongqing Loop 8,567
5.84
Parent
company
and
subsidiary		 Chongqing Loop 13,543
5.88
Parent
company
and
subsidiary		 Universal
Microelectronics
1,433
4.73
None
4 Universal
Microelectronics		 8,102
5.53
None		 Kintech 8,642
3.75
None		 Qinyi 1,351
4.45
None
5 Kintech 6,382
4.35
None		 Universal
Microelectronics		 8,640
3.75
None		 Yuan Tsu 1,254
4.13
None
6 Yuan Tsu 5,726
3.90
None		 Yuan Tsu 7,473
3.25
None		 Chongqing
Loop		 1,232
4.06
Parent
company
and
subsidiary
7 ILU 5,309
3.62
None		 Macnica Galaxy 7,326
3.18
None		 Kintech 783
2.58
None
8 Macnica Galaxy 4,033
2.75
None		 ILU 7,065
3.07
None		 Microchip 605
2.00
None
9 Tianjin Loop 3,191
2.18
Parent
company
and
subsidiary		 Mouldex 5,663
2.46
None		 Alltek 559
1.84
None
10 Mouldex 2,905
1.98
None		 Qinyi 4,946
2.15
None		 Ficer 545
1.80
None
Others 64,289
43.84		 Others 65,113
28.28		 Others 6,188
20.40
Total net purchase 146,649
100.00		 Total net purchase 230,221
100.00		 Total net
purchase		 30,330
100.00

Description: There has been no material change in suppliers, with a total purchase reaching 10% or above in the most recent two years; therefore, the Company has no intention to analyze.

103

B. Data on major customers of sales for the most recent two years:

(In Thousands of New Taiwan Dollars)

2022 2022 2022 2023 2023 2023 As of 2024 Q1 As of 2024 Q1 As of 2024 Q1
Item Name Amount Ratio to
annual net
l (%)		 Relationship
with the
i		 Name Amount Ratio to
annual net
l (%)		 Relationship
with the
i		 Name Amount Ratio to net
purchase as
of Q1 of
th

Relationship
with the
i
saes ssuer saes ssuer e year
[%]		 ssuer
1 E 90,308
20.61
None		 E 107,296 16.53
None		 A 27,209
23.89
None
2 F 76,978
17.57
None		 F 104,532 16.10
None		 E 24,518
21.53
None
3 A 39,497
9.01
None		 A 101,173 15.59
None		 G 12,980
11.40
None
4 Z 37,495
8.55
None		 Z 59,143 9.11
None		 D 9,680
8.50
None
5 H 34,030
7.76
None		 H 51,528 7.94
None		 F 7,208
6.33
None
6 G 21,558
4.92
None		 Q 42,864 6.60
None		 AE 6,117
5.37
None
7 AD 13,418
3.06
None		 B 23,716 3.65
None		 Q 5,897
5.18
None
8 N 13,184
3.01
None		 G 22,162 3.42
None		 AK 3,553
3.12
None
9 D 12,610
2.88
None		 AK 13,317 2.05
None		 AL 3,350
2.94
None
10 Q 7,846
1.79
None		 AF 11,690 1.80
None		 AM 3,147
2.76
None
Others 91,318
20.84		 Others 111,676 17.21 Others 10,220
8.98
Total net sales 438,242
100.00		 Total net sales 649,097 100.00 Total net sales 113,879
100

Note: Specify the name of customers who contribute to 10% of total sales or above in the most recent two years and their sales amount and ratio; however, code names may be used instead if the name of customers may not be disclosed due to agreements in the contract or if the counterparties are individual and not related parties.

104

(1) Production volume and value in the most recent two years:

Unit of production capacity and production volume: Machine
Unit of production value: NT$ thousand		 Unit of production capacity and production volume: Machine
Unit of production value: NT$ thousand		 Unit of production capacity and production volume: Machine
Unit of production value: NT$ thousand		 Unit of production capacity and production volume: Machine
Unit of production value: NT$ thousand		 Unit of production capacity and production volume: Machine
Unit of production value: NT$ thousand		 Unit of production capacity and production volume: Machine
Unit of production value: NT$ thousand		 Unit of production capacity and production volume: Machine
Unit of production value: NT$ thousand
Product 2022 2023
Name Production
capacity		 Production
Volume		 Value Production
capacity		 Production
Volume		 Value
U interface multiplexer 28,000
18,508
128,415
32,000
14,301
148,395
Optical fiber network 23,000
8,052
196,800
41,600
14,044
356,513
High-speed digital user line equipment 2,500
30
687
6,700
80
1,844
Internet access equipment 7,500
280
5,851
13,900
459
10,875
Time-slot interchanger 5,500
580
3,410
8,800
413
5,461
High-speed network access equipment 4,500
99
1,295
5
1
12
Network management system 13,000
1,971
16,559
22,000
2,362
27,923
Others 14,361
85,225		 18,291
98,074
Total 84,000
43,881
438,242
125,005
49,951
649,097

(2) Sales volume and value in the most recent two years:

Unit of sales volume: Machine Unit of sales value: NT$ thousand Unit of sales value: NT$ thousand Unit of sales value: NT$ thousand Unit of sales value: NT$ thousand Unit of sales value: NT$ thousand Unit of sales value: NT$ thousand Unit of sales value: NT$ thousand Unit of sales value: NT$ thousand
Product 2022 2023
Name Domestic Overseas Domestic Overseas
Volume Value Volume Value Volume Value Volume Value
U interface multiplexer 4,442
30,820
14,066
97,595
4,505
46,744
9,796
101,651
Optical fiber network access equipment
1,932
47,232
6,120
149,568
4,424
112,302
9,620
244,211
High-speed digital user line equipment 7
165
23
522
25
581
55
1,263
Internet access equipment 67
1,404
213
4,447
145
3,426
314
7,449
Time-slot interchanger 139
818
441
2,592
130
1,720
283
3,741
High-speed network access equipment 24
311
75
984		 1
12
Network management system 473
3,974
1,498
12,585
744
8,796
1,618
19,127
Others 3,447
20,454
10,914
64,771
5,762
30,893
12,529
67,181
Total 10,531
105,178
33,350
333,064
15,735
204,462
34,216
444,635

105

3. The number of employees for the most recent two years and up to the date of publication of the annual report, their average years of service, average age, and education distribution ratio:

March 31,2024
2022
2023
Current year as of March 31,
2024
129persons
140persons
138persons
17persons
17persons
17persons
146persons
157persons
155persons
44.09years old
43.73years old
43.88years old
12.75years
12.08years
12.30years
0.69%
0.64%
0.65%
23.29%
26.11%
25.81%
61.64%
59.24%
59.35%
10.27%
10.19%
10.32%
4.11%
3.82%
3.87%		 March 31,2024
2022
2023
Current year as of March 31,
2024
129persons
140persons
138persons
17persons
17persons
17persons
146persons
157persons
155persons
44.09years old
43.73years old
43.88years old
12.75years
12.08years
12.30years
0.69%
0.64%
0.65%
23.29%
26.11%
25.81%
61.64%
59.24%
59.35%
10.27%
10.19%
10.32%
4.11%
3.82%
3.87%		 March 31,2024
2022
2023
Current year as of March 31,
2024
129persons
140persons
138persons
17persons
17persons
17persons
146persons
157persons
155persons
44.09years old
43.73years old
43.88years old
12.75years
12.08years
12.30years
0.69%
0.64%
0.65%
23.29%
26.11%
25.81%
61.64%
59.24%
59.35%
10.27%
10.19%
10.32%
4.11%
3.82%
3.87%
Year 2022 2023 Current year as of March 31,
2024
Number of
employees		 Indirect staff 129persons
140persons
138persons
Direct staff 17persons
17persons
17persons
Total 146persons
157persons
155persons
Average age 44.09years old
43.73years old
43.88years old
Average service seniority 12.75years
12.08years
12.30years
Education
background
distribution ratio		 Phd 0.69%
0.64%
0.65%
Master degree 23.29%
26.11%
25.81%
College diploma 61.64%
59.24%
59.35%
Senior high school 10.27%
10.19%
10.32%
Below senior high school 4.11%
3.82%
3.87%

4. Information on environmental expenditure

Any losses suffered by the Company in the most recent year and up to the publication date of the annual report due to labor disputes (for any compensation and violation of environmental protection regulations found in the environmental protection audits, specify the disposition dates, disposition reference numbers, the articles of law violated, the substance of the legal violations and the content of the dispositions), and disclose an estimate of possible expenses that could incur currently and in the future and countermeasures; if it is not able to be reasonably estimated, the fact that it cannot be reasonably estimated shall be specified:

The Company focuses on the conservation of environments and received the excellent environmental cleanliness and recycling inspection award of the Park in October 1999. It formally announced its environmental policies in 2004 in the hope of improving the environmental protection awareness of employees, suppliers, and channel providers and reducing the impacts of operations on environments through internal and external education and promotion. Over the years, Loop has been adhering to the operating philosophy of sustainable corporate development and has deeply recognized the importance of environmental protection; therefore, the Company adopts pollution prevention and continual improvements as its basic structure for development.

Commitments of Loop: The Company will: ◆make the best use of resources on earth; ◆develop products of green concepts; ◆ improve procedure technologies and minimize impacts on the environment; ◆ comply with the requirements of environmental regulations; ◆commit to pollution control and continue to improve the current status of environments; ◆ implement environmental protection education; ◆ appropriately carry out environmental communication to create an enterprise of sustainable development. For the processing of waste, the Company has its SOP in place; there was no environmental pollution event; therefore, there was no loss, and there was no pollution to the environment.

5. Labor-capital relations

(1) Welfare measures, continuing education, training, and retirement systems of employees and their implementation, and the labor-capital agreements and measures for protecting employees' interests:

A. Employee benefit measures

The Company has comprehensive and favorable benefit measures; major items include:

  • a. Insurance:

  • a-1 Labor insurance and National Health Insurance:

    • Employees of the Company participate in labor insurance and National Health Insurance according to the law.

  • a-2 Group insurance:

Formal employees of the Company are entitled to the group insurance purchased by the Company on behalf of employees after three months from the day reporting to work, and the premium is borne by the Company. Employees are entitled to different coverage based on the range of salaries.

106

  • b. Educational training program:

Based on the training demand of employees, the Company organizes new employee training, professional technology training, management talent training, self-development training, quality management training, safety and health, and other training programs and provides comprehensive professional skills cultivation and self-growth and development for employees.

  • c. Profit-sharing and share ownership method:

  • The Company shares a fixed ratio of its earning after the final account of the year, with relevant taxes, reserves, and dividends deducted, with all employees.

  • d. Bonus system:

The bonus system of the Company has performance bonuses and evaluation bonuses, and the distribution basis of bonuses is the performance of employees within a certain period.

  • e. Domestic/foreign company trip:

A domestic or foreign company trip for employees is organized once a year.

  • f. Employee dormitory:

The Company has an employee dormitory allocated by the Park Bureau for new employees and general employees as the residence so as to fully care for employees.

  • g. Leisure equipment:

The Company has a table tennis room, gym, yoga classroom, library, reading area, and other facilities to provide the best activity venues for employees to dine and chill.

  • h. Employee Benefits Committee:

The Company has established its Employee Benefits Committee according to the law and appropriated benefit funds as scheduled according to the requirements. Members of the committee are publicly elected by employees, and the committee organizes various benefit activities.

B. Employee training, continuing education system, and its implementation:

Employee educational training expenses:

  • a. Onboarding training for new employees: Include the introduction to the Company's system, corporate culture, organization, and operating system, an introduction to system operation, a description of job scope, new product development procedures, and professional knowledge training and succession.

  • b. In response to the development of the business and management system, the Company enhanced its talent cultivation and improved human resources structure and the quality of human resources; therefore, it established the "Procedures for Educational Training" observation by employees. The Company provides subsidies and funding for educational training each year for employees to choose internal training or external training related to their own work. Employees may combine the development of their abilities with hobbies to maximize the learning effects; the content is summarized as follows:

  • b-1 Internal training: For new R&D personnel, the Company arranges senior R&D personnel to provide guidance to pass down the R&D experience and fully invest in product and technology R&D and allows them to learn the latest communication technologies through technical exchanges with the industry sector. For administration-related personnel, their knowledge, abilities, and aspiration are improved based on their working field, and professional lecturers are also invited to visit the Company for training from time to time.

  • b-2 External training: The Company encourages employees to participate in professional/relevant seminars and appoints them to receive training from domestic and foreign professional training institutions.

Relevant educational training performance in 2023 is set out in the followingtable: Relevant educational training performance in 2023 is set out in the followingtable: Relevant educational training performance in 2023 is set out in the followingtable: Relevant educational training performance in 2023 is set out in the followingtable: Relevant educational training performance in 2023 is set out in the followingtable:
Item Number of
classes		 Total number
Ofpersons		 Total number
Of hours		 Total expenses
1. New employee training 27
145
134
0
2. Professional function training 29
125
546
29,100
3. Management talent training 4
4
21
13,000
4. General knowledge training 10 12
30		 18,620
Total 70 286 731
60,720

C. Employee retirement system and its implementation:

Employee retirement system: The retirement system of the Company is subject to the Labor Standards Act and Labor Pension Act.

107

D. Labor-capital agreements and measures for protecting employees' interest:

  • Labor-capital agreements: Employees of the Company have premium quality, and our business philosophies and management policies are duly implemented. In addition, there is employee communication/activity time and the "Employee Benefits Committee" in place. The internal communication channels are smooth, and the labor-capital relations over the years have been healthy; there has been no labor-capital dispute.

  • E. Code of Conducts or Ethics of Employees: Please refer to Attachment 2 of the handbook .

F. Working environment and employees' personal safety protection measures

No. Objective/target Plan Description of current status Execution
1 Fully transformed to
lead-free products		 Transformed to lead-
free procedures in
2009		 Lead-free operating procedures were fully introduced
for the products of the Company		 Continued to execute the
100% lead-free product
procedures
2 Recycled and reused the
packaging cartons of
products		 Recycled and reused
the cartons of finished
goods		 Required suppliers to always recycle packaging
cartons to minimize the environmental load and
comply with the objective of energy-saving and
carbon dioxide reduction		 Required suppliers to
always recycle
3 Implemented garbage
classification and
recycling in our plant		 Garbage classification Classification, declaration, and clearing of garbage
are completed according to the requirements of the
Environmental Protection Administration to align
with the policy of energy-saving and carbon dioxide
reduction		 Continued implementing
4 Checked whether the
power circuits were
overloaded, added
protective tubes for
wires, and installed
electricity leakage
breakers		 Improved power use
safety and personal
safety		 Added EMT tubes for power cables to avoid sparks
that may result from mouse biting or aging and
installed electricity leakage breakers for shower and
pantry		 Installed electricity leakage
breakers and metal EMT
tubes to protect power
cables
5 Reduced the use of
wood pallets		 Reduced the quantity
of wood pallets		 Wood pallets may be easily damaged, and the use of
wood pallets for in-house product transport is not
environmental-friendly		 Purchased static plastic
pallets to increase the
number of repeated use
6 Isolated environmental
noises		 Reduced noises that
discomfort human
bodies		 The noise pollution of the AC unit exceeded 80db Isolated the AC machine
room and added soundproof
doors and soundproof rock
wools
7 Labeled power-use
safety areas		 Labeled power area
warnings		 Added warnings for the power use areas to remind
persons that entered shall be aware of the power use
safetyand noiseprevention		 Added label warning and
relevant preventive
equipment

G. Subsequent environmental and labor safety and health management

a. Restriction on hazardous substance (ROHS)

ROHS became formally effective on July 1, 2006; products sold to the EU shall not contain six hazardous substances, including lead, cadmium, mercury, hexavalent chromium, PBB, and PBDE. The Company made active promotion and cooperation and formally commenced its lead-free operations in 2009, and required relevant suppliers to propose products free of hazardous substances that are in compliance with the EU requirements.

b. Promote the recycling and reuse of product cartons

The Company promotes recycling and reuse to reduce the generation of waste and reduce production costs. Apart from garbage classification, the Company also require suppliers to remove product cartons upon intake and bring them back, and use the used cartons for the next intake to achieve the energysaving, carbon dioxide reduction, and environmental protection promoted by the government.

  • c. Implement automatic check and inspection before starting the operations

  • When working in different operating environments, employees may have physical injuries due to unsafe environments, equipment, management, and other factors. Therefore, the Company promotes automatic inspection before starting the operations in the hope of discovering potential hazardous factors and controlling and improving hazardous factors.

d. On-site operating environment inspection

To ensure the operating environments of the Company comply with labor safety operating specifications, the Company performed regular tests for CO2, noise, and lighting of operating environments to ensure the operating environments of employees are comfortable and safe; for noise pollution source areas due to the AC unit, it adopted soundproof materials for noise isolation to eliminate noise pollution.

108

  • (2) Any losses suffered by the Company in the most recent year and up to the publication date of the annual report due to labor disputes (including any violations of the Labor Standards Act found in labor inspection, specifying the disposition dates, disposition reference numbers, the articles of law violated, the substance of the legal violations and the content of the dispositions), and disclose an estimate of possible expenses that could incur currently and in the future and countermeasures: None .

  • (3) Continuing education and training related to corporate governance of managers of the Company:

Continuing education of managers in 2023

Title Name Date Organizer Course name Number
of hours
of
continuing
education
Director of the
Finance and
Accounting
Department		 Chang Xiao-
Ling		 2023/12/07~12/08 Accounting Research and
Development Foundation		 TWSE chief accountant
continuing education course		 12
Chief of corporate
governance		 Cai Xing-
Juan		 2023/05/26 Taiwan Investor Relations
Institute		 ESG Development Trends
from the Perspective of
Shareholder Activism		 3
Cai Xing-
Juan		 2023/06/09 Securities and Futures Institute Preventing Insider Trading
Awareness Seminar		 3
Cai Xing-
Juan		 2023/06/30 Taiwan Investor Relations
Institute		 Strategies for Corporate
Operations and News Crisis
Management		 3
Cai Xing-
Juan		 2023/07/31 Taiwan Academy of Banking and
Finance		 Director, supervisor and
governance managers seminar		 3
Cai Xing-
Juan		 2023/09/14 Taiwan Investor Relations
Institute		 Taiwan Business Merger
Practices		 3
Cai Xing-
Juan		 2023/10/18 Securities and Futures Institute Challenges in Post-Pandemic
Talent Sustainability		 3
Chief auditor Xu Zheng 2023/12/13 The Institute of Internal Auditors Latest Case Analysis on
“Business Mergers and
Acquisitions Act” and
“Corporate Governance”		 6
Xu Zheng 2023/12/19 The Institute of Internal Auditors Policy Analysis and
Highlights on Internal Audit
and Internal Control of “Audit
Practices of Subsidiaries
Financial Report Compilation”
and “Sustainability Reports”
(Includes Sustainable
Development Action Plan for
TWSE/tpex Listed
Companies”
6
  • (4) Acquisition of relevant certificates designated by the competent authority by personnel of the Company related to financial information transparency:

Proficiency Test for Enterprise Internal Control Basic Ability organized by the SFC and Accounting Research and Development Foundation: Two persons.

109

6. Cybersecurity management

  • (I) Describe the cybersecurity risk management structure, the cybersecurity policy, the specific management plan, and the resources invested in cybersecurity management:

  • Cybersecurity risk management structure: The Company established a dedicated department for information safety in 2022 to be responsible for the formulation of cybersecurity policies, the promotion of cybersecurity measures, and regular examination. The information safety committee has a chief of information safety, who is concurrently the director of the information department, and three members. When any information safety event occurs, they shall contract responsible personnel for operating procedures of relevant departments for crisis management. In addition, the Company has also passed the ISO27001 audit.

The audit department also included cybersecurity inspection in the items of the annual audit plan each year.

  1. Cybersecurity policy:

The Company's cybersecurity policy states the requirements, standards, and specifications for cybersecurity management operations, including but not limited to electronic hardware equipment safety management, installation of operating systems and applications, e-mail management and control, network firewall installation, the establishment of Internet use access, wireless network use specifications, anti-virus software installation, access control of system program data, updates and maintenance of internal servers, and development of safety monitoring of systems.

  1. Substantial management plan:

  2. (1) Safety management of electronic hardware equipment:

    • A. Servers and major equipment are placed in the machine room with access control, and only personnel with permission can access them by using cards.

    • B. Install protection software that has automatic updates of virus signatures for computer equipment to ensure it can effectively detect viruses and vicious software and acts.

  3. (2) Installation, management, and control of operating systems and applications:

    • A. The using department shall propose a permission application based on the information functions, application system, and programs required. After the application is approved by the director of the department and the director of the information department based on their work duties, information personnel will set its use permission.

    • B. For any personnel change or resignation, the information department will immediately alter its account and use permission to ensure information safety.

  4. (3) Internet use authorization:

    • A. Install firewall control and endpoint protection and invasion detection software for the external network to detect and block external invasion and attacks.

    • B. Install attack detection equipment for the internal network to regularly detect anomalies of the internal network and computers.

  5. (4) Safety monitoring of the system:

    • A. UPS and voltage stabilizers are installed for the mainframe in the machine room to prevent system damage resulting from a power outage or abnormal power supply.

    • B. Established a remote-backup system; when the local machine room loses its function due to disasters, the recovery plan may be initiated by the remote backup mainframe and storage equipment.

    • C. Reinforced the data backup and recovery system and regularly made schedules for backup storage to enhance the completeness and efficiency of system recovery.

  6. Resources for cybersecurity management:

  7. (1)The information safety committee regularly examines the internal information safety management and operating status, provides reports and recommendations to the management, and regularly compiles and reports to the Board each year.

  8. (2)The audit department also regularly submits cybersecurity audit reports to the Board.

  9. (3)All employees had executed the consent for employee information management regulations and completed information safety educational training.

110

  • (II) List any losses suffered by the Company in the most recent year and up to the publication date of the annual report due to significant cybersecurity incidents, the possible impacts therefrom, and countermeasures: There was no significant cybersecurity incident that occurred to the Company.

7. Important contracts:

Type of
contract		 Party Contract starting and
Endingdate		 Main content Restrictive
terms
Land lease Science Park Bureau 2019/08/06~2038/12/31
2007/06/12~2026/12/31		 Leasing land with an area of 2,101.05m2
Leasingland withanarea of 1,384.65m2		 None
Insurance
contract		 1.
Fubon Insurance
2.
Nan Shan General Insurance
3.
AIG Taiwan		 2023/10/01~2024/09/30
2023/12/31~2024/12/31
2024/04/01~2025/04/01		 Liability insurance for Directors, supervisors,
and material employees
Fire insurance
Commercial general liability insurance
None
4.
Nan Shan General Insurance		 2023/10/15~2024/10/15 Transportation cargo open policy insurance

111

(VI) Finance overview

1. Condensed balance sheet and statement of consolidated income for the most recent five years

(1) Condensed Consolidated Balance Sheet

(1) Condensed Consolidated Balance Sheet (1) Condensed Consolidated Balance Sheet (1) Condensed Consolidated Balance Sheet (1) Condensed Consolidated Balance Sheet (1) Condensed Consolidated Balance Sheet (1) Condensed Consolidated Balance Sheet (1) Condensed Consolidated Balance Sheet
(In Thousands of New Taiwan Dollars)
Year
Item		 2019 2020 2021 2022 2023 Financial
information as of
March 31, 2024
(Note 1)
Current assets 734,029
790,673
721,419
802,210
998,352
894,361
Property, plant and equipment 168,742
164,449
155,782
146,206
153,385
152,924
Intangible assets 572
2,072
5,499
8,638
4,560
3,884
Other assets 112,334
114,949
109,623
122,400
129,128
124,265
Total Assets 1,015,677
1,072,143
992,323
1,079,454
1,285,425
1,175,434
Current
liabilities
Before distribution		 114,724
140,674
106,707
134,582
375,222
230,928

After distribution		 155,859
211,595
135,075
205,502
Note 2
Not applicable
Non-current liabilities 91,360
85,871
79,357
92,789
67,009
65,682
Total Liabilities Before distribution 206,084
226,545
186,064
227,371
442,231
296,610

After distribution		 247,219
297,466
214,432
298,291
Note 2
Not applicable
Equity attributable to owners of the
parent company
809,593
845,598
806,259
852,083
843,194
878,824
Capital stock 709,206
709,206
709,206
709,206
567,365
567,365
Capital surplus 49,626
49,626
48,208
48,208
43,953
43,953
Retained
earnings
Before distribution		 53,661
89,771
51,933
97,455
234,627
270,240

After distribution		 12,526
18,850
23,565
26,535
Note 2
Not applicable
Other equity (2,900)
(3,005)
(3,088)
(2,786)
(2,751)
(2,734)
Treasury stock 0
0
0
0
0
0
Non-controlling interests 0
0
0
0
0
0
Total equity
Before distribution		 809,593
845,598
806,259
852,083
843,194
878,824

After distribution		 768,458
774,677
777,891
781,163
Note 2
Not applicable

Note 1 : As of the quarter before the publication date of the annual report, the financial information had been certified and reviewed by cpas.

Note 2 : The proposal for the 2023 earning distribution is to be resolved by the shareholders' meeting.

112

(2) Condense Consolidated Statement of Comprehensive Income

Unit:(In Thousands of New Taiwan Dollars) Unit:(In Thousands of New Taiwan Dollars) Unit:(In Thousands of New Taiwan Dollars) Unit:(In Thousands of New Taiwan Dollars) Unit:(In Thousands of New Taiwan Dollars) Unit:(In Thousands of New Taiwan Dollars) Unit:(In Thousands of New Taiwan Dollars)
Year
Item		 2019 2020 2021 2022 2023 Financial
information as of
March 31, 2024
(Note 1)
Net revenue 544,995
598,096
515,510
438,242
649,097
113,879
Gross profit 287,932
333,646
266,319
240,564
446,054
79,940
Net operating (loss) profit 56,121
94,784
39,999
14,509
193,270
19,693
Non-operating income and expenses 2,658
(1,128)
(154)
68,894
53,495
22,442
Income before income tax 58,779
93,656
39,845
83,403
246,765
42,135
Net income (loss) 49,353
78,648
33,026
67,403
199,659
35,613
Other comprehensive income (net
after taxes)		 (565)
(1,508)
(1,444)
6,789
4,213
17
Total comprehensive income 48,788
77,140
31,582
74,192
203,872
35,630
Net profits attributable to
shareholders ofparent company		 49,503
78,648
33,026
67,403		 199,659
35,613
Net profits attributable to non-
controllinginterests		 (150)
0
0
0
0
0
Total comprehensive income
attributable to shareholders of parent
company		 48,941
77,140
31,582
74,192
203,872
35,630
Total comprehensive income
attributable to non-controlling
interests		 (153)
0
0
0
0
0
Basic earnings per share 0.70
1.11
0.47
0.95
3.00
0.63

Note 1 : As of the quarter before the publication date of the annual report, the financial information had been certified and reviewed by cpas.

113

(3) Condensed Parent Company Only Balance Sheet

(In Thousands of New Taiwan Dollars)

Year
Item		 2019 2020 2021 2022 2023 Financial
information as of
March 31, 2024
(Note 3)
Current assets 724,426
784,445
715,202
798,472
996,770
-
Property, plant and equipment 163,162
159,406
151,301
142,313
149,883
-
Intangible assets 572
2,072
5,499
8,638
4,560
-
Other assets 122,061
117,866
110,765
121,497
127,725
-
Total Assets 1,010,221
1,063,789
982,767
1,070,920
1,278,938
-
Current liabilities
Before
distribution		 109,268
132,320
97,151
126,048
368,735
-

After distribution
150,403
203,241
125,519
196,968
Note 2
-
Non-current liabilities 91,360
85,871
79,357
92,789
67,009
-
Total Liabilities
Before
distribution		 200,628
218,191
176,508
218,837
435,744
-

After distribution
241,763
289,112
204,876
289,757
Note 2
-
Capital stock 709,206
709,206
709,206
709,206		 567,365
-
Capital surplus 49,626
49,626
48,208
48,208
43,953
-
Retained earnings
Before
distribution		 53,661
89,771
51,933
97,455
234,627
-

After distribution
12,526
18,850
23,565
26,535
Note 2
-
Other equity (2,900)
(3,005)
(3,088)
(2,786)
(2,751)
-
Treasury stock 0
0
0
0
0
-
Total equity
Before
distribution		 809,593
845,598
806,259
852,083
843,194
-

After distribution
768,458
774,677
777,891
781,163
Note 2
-

Note 1 : As of the quarter before the publication date of the annual report, the financial information had been certified and reviewed by cpas.

Note 2 : The proposal for the 2023 earning distribution is to be resolved by the shareholders' meeting. Note 3 : The Company has not issued the parent company only quarterly financial statements as of March 31, 2024.

114

(4) Condensed Parent Company Only Statement of Comprehensive Income

(In Thousands of New Taiwan Dollars) (In Thousands of New Taiwan Dollars) (In Thousands of New Taiwan Dollars) (In Thousands of New Taiwan Dollars) (In Thousands of New Taiwan Dollars) (In Thousands of New Taiwan Dollars) (In Thousands of New Taiwan Dollars)
Year
Item		 2019 2020 2021 2022 2023 Financial
information as of
March 31, 2024
(Note 2)
Net revenue 544,515
598,175
515,380
438,234
648,696
-
Gross profit 286,106
333,802
265,658
235,360
443,136
-
Net operating (loss) profit 60,539
101,343
41,743
16,850
193,680
-
Non-operating income and expenses (1,610)
(7,687)
(1,898)
66,553
53,085
-
Net profit (loss) before tax 58,929
93,656
39,845
83,403
246,765
-
Net income (loss) 49,503
78,648
33,026
67,403
199,659
-
Other comprehensive income (net after
taxes)
(562)
(1,508)
(1,444)
6,789
4,213
-
Total comprehensive income 48,941
77,140
31,582
74,192
203,872
-
Basic earnings per share 0.70
1.11
0.47
0.95
3.00
-

Note 1 : As of the quarter before the publication date of the annual report, the financial information had been certified and reviewed by cpas.

Note 2 : The Company has not issued the parent company only quarterly financial statements as of March 31, 2024.

(5) Names and opinions of cpas for the most recent five years

Year CPA firm CPA name CPA name Audit opinion
2019 Deloitte & Touche Taiwan Lin Zheng-Zhi Huang Yu-Feng Unqualified opinion
2020 Deloitte & Touche Taiwan Lin Zheng-Zhi Huang Yu-Feng Unqualified opinion
2021 Deloitte & Touche Taiwan Tseng Jian-Ming Huang Yu-Feng Unqualified opinion
2022 Deloitte & Touche Taiwan Huang Yu-Feng Tseng Jian-Ming Unqualified opinion
2023 Deloitte & Touche Taiwan Huang Yu-Feng Tseng Jian-Ming Unqualified opinion

(6) Description of the reason for the replacement of cpas in the most recent five years:

In 2021 Q4, due to the internal CPA rotation of Deloitte & Touche Taiwan, our cpas were replaced.

115

2. Financial analysis for the most recent five years

(1) Financial analysis - IFRS

Year (Note 1)
Analysis item (Note 3)		 Year (Note 1)
Analysis item (Note 3)
Financial analysis for the most recent five years
Financial analysis for the most recent five years
Financial analysis for the most recent five years
Financial analysis for the most recent five years
Financial analysis for the most recent five years		 Current year as
of March 31,
2024 (Note 2)
2023 2022 2021 2020 2019
Financial
structure
(%)		 Debt to assets ratio 34.40
21.06
18.75
21.13
20.29
25.23
Ratio of long-term capital to
property, plant, and
equipment
593.41
646.26
568.50
566.42
533.92
617.63
Solvency Current ratio 266.07
596.08
676.07
562.06
639.82
387.29
Quick ratio 164.02
361.34
388.17
332.26
383.24
207.25
Interests coverage multiplier
(times)
136.44
67.83
30.80
69.56
45.53
59.77
Operating
performance		 Accounts receivable
turnover rate(times)		 4.76
5.10
2.75
3.93
4.52
0.78
Average collection days 77
72
133
93
81
117
Inventory turnover rate
(times)		 0.59
0.65
0.85
0.93
0.98
0.09
Accounts payable turnover
rate(times)		 6.24
5.27
5.04
5.74
5.30
0.80
Average sales days 619
562
429
392
372
1,011
Property, plant and
equipment turnover rate
(times)		 4.33
2.90
3.22
3.59
2.91
0.74
Total assets turnover rate
(times)		 0.55
0.42
0.50
0.57
0.57
0.09
Profitability Return on assets (%) 17.01
6.60
3.30
7.64
5.24
2.94
Return on equity (%) 23.55
8.13
4.00
9.50
6.28
4.14

Ratio of net profit before
tax to paid-in capital (%)
(Note 7)		 43.49
11.76
5.62
13.21
8.29
7.43
Net margin (%) 30.76
15.38
6.41
13.15
9.06
31.27
Earnings per share (NT$) 3.00
0.95
0.47
1.11
0.70
0.63
Cash flow Cash flow ratio (%) 3.75
228.84
90.50
-13.57
-8.58
78.35
Cash flow adequacy ratio
(%)		 96.67
90.00
-18.68
-14.46
-51.39
144.86
Cash flow reinvestment
ratio(%)		 -6.08
28.84
2.84
-6.46
-1.07
18.56
Leverage Operating leverage 2.17
14.37
6.03
3.07
4.27
4.01
Financial leverage 1.01
1.09
1.03
1.01
1.02
1.04
Reasons for the changes in the financial ratios reaching 20% or above in the most recent two years are described as follows:
1.
Decrease in solvency: Primarily due to the increase in short-term borrowings.
2.
Increase in operating performance: Primarily due to the increase in net sales.
3.
Increase in profitability: Primarily due to the increase in net profit (before tax) after tax of the period.
4.
Decrease in cash flow: Primarily due to the increase in account receivables.

Note 1: Years not audited or certified by cpas shall be specified.

Note 2: Companies with shares listed on TWSE or tpex; the financial information of the current year as of Q1 before the publication date of the annual report shall be included in the analysis.

  • Note 3: At the end of the table of the annual report, the following calculation formulas shall be presented:

  • Financial structure

    • (1) Debt-to-asset ratio = Total liabilities / Total assets

116 

  - (2) Long-term fund to property, plant and equipment ratio = (Shareholders' equity + non-current liabilities) / Net property, plant and equipment

  1. Solvency

    • (1) Current ratio = current assets/current liabilities

    • (2) Quick ratio = (Current assets - inventory - prepayments)/current liabilities.

    • (3) Interests coverage multiplier = income before income tax and interest expense/interest expense for the period

  2. Operating performance

    • (1) Receivables (including accounts receivable and notes receivable due to business operation) turnover = Net sales / the balance of average receivables of different periods (including accounts receivable and notes receivable due to business operation)

    • (2) Average collection days = 365 / Receivable turnover ratio

    • (3) Average inventory turnover = Cost of goods sold / average inventory

    • (4) Payables (including accounts payables and notes payable due to business operation) turnover = Cost of goods sold / the balance of average payables of different periods (including accounts payables and notes payable due to business operation)

    • (5) Average sales days = 365/inventory turnover rate

    • (6) Property, plant, and equipment turnover = Net sales/average property, plant, and equipment.

    • (7) Total assets turnover rate = net sales/average total assets

  3. Profitability

    • (1) Return on total assets = [Net income + Interest expenses× (1 - tax rate)] / Average total assets

    • (2) Return on equity = net profits after tax/average total equity

    • (3) Net profit margin = net profits after tax/net sales

    • (4) Earnings per share = (Profit or loss attributable to owners of the parent - preferred stock dividend)/weighted average number of issued shares. (Note 4)

  4. Cash flow

    • (1) Cash flow ratio = Net cash provided by operating activities / Current Liabilities

    • (2) Cash flow adequacy ratio = sum of net cash flow from operating activities for the most recent 5 years / sum of capital expenditures, inventory additions, and cash dividend for the most recent 5 years.

    • (3) Cash reinvestment ratio = (net cash flow from operating activities - cash dividend) / (gross property, plant, and equipment + long-term investment + other non-current assets + working capitals). (Note 5)

  5. Leverage:

    • (1) Operating leverage = (Net revenue - variable cost of revenue and expenses)/operating gains (Note 6).

    • (2) Financial leverage = operating profits / (operating profits - interest expense).

  6. Note 4: Regarding the calculation formula for earnings per share above, please be aware of the following matters upon measurement:

  7. Adopt the weighted average number of ordinary shares as the basis instead of the number of issued shares at the end of the year.

  8. If there is any capital increase in cash or treasury share transactions, the circulation period shall be considered when calculating the weighted average number of shares.

  9. If there is any capital increase from earnings or capital increase from the capital reserve, when calculating the earnings per share for prior years and the interim period, retrospective adjustments shall be made based on the ratio of capital increase without considering the issuance period of the capital increase.

  10. If preferred shares are non-convertible cumulative preferred shares, their dividend of the year (whether distributed or not) shall be deducted from net income, or net loss after tax shall be increased. If preferred shares are not cumulative, in the case of having a net income, dividends of preferred shares shall be deducted from net income; if losses are recorded, no adjustment is required.

  11. Note 5: Please be aware of the following matters for the measurement of cash flow analysis:

  12. Net cash flow from operating income refers to the net cash inflow from operating income in the statement of cash flow.

  13. Capital expenditures refer to cash outflow from investments.

  14. The increase in inventory is only included when the closing balance is higher than the opening balance; if inventory decreases at the end of the year, calculate it as 0.

  15. Cash dividends include cash dividends of ordinary shares and preferred shares.

  16. Gross amount of property, plant and equipment refers to total property, plant and equipment before deducting accumulated depreciation.

  17. Note 6: Issuers shall distinguish cost of revenue and operating expenses into fixed and variant based on nature; if any estimate or subjective judgment is involved, please be aware of the rationale and maintain consistency.

  18. Note 7: If shares of the Company have no par value or the par value is not NT$10, the calculation of the abovementioned ratio to paid-in capital shall be calculated based on equity attributable to owners of the parent company in the balance sheet.

117

(2) Individual Financial Analysis - International Financial Reporting Standards

Year (Note 1)
Analysis item (Note 3)		 Year (Note 1)
Analysis item (Note 3)
Financial analysis for the most recent five years
Financial analysis for the most recent five years
Financial analysis for the most recent five years
Financial analysis for the most recent five years
Financial analysis for the most recent five years		 Current year
as of March
31, 2024
(Note 2)
2023 2022 2021 2020 2019
Financial
structure
(%)		 Debt to assets ratio 34.07
20.43
17.96
20.51
19.86
Not
applicable
Ratio of long-term capital
to property, plant, and
equipment		 607.28
663.94
585.33
584.34
552.18
Solvency Current ratio 270.32
633.47
736.18
592.84
662.98
Quick ratio 165.75
381.25
419.99
349.12
395.35
Interests coverage
multiplier(times)		 137.79
68.92
31.46
70.48
56.54
Operating
performance		 Accounts receivable
turnover rate(times)		 4.76
5.12
2.76
3.94
4.52
Average collection days 77
71
132
93
81
Inventory turnover rate
(times)		 0.60
0.67
0.85
0.94
1.00
Accounts payable
turnover rate(times)		 6.38
5.45
5.08
5.81
5.42
Average sales days 607
545
429
389
367
Property, plant and
equipment turnover rate
(times)		 4.44
2.99
3.32
3.71
3.00
Total assets turnover rate
(times)		 0.55
0.43
0.50
0.58
0.57
Profitability Return on assets (%) 17.12
6.66
3.33
7.69
5.24
Return on equity (%) 23.55
8.13
4.00
9.50
6.30

Ratio of net profit before
tax to paid-in capital (%)
(Note 7)		 43.49
11.76
5.62
13.21
8.31
Net margin (%) 30.78
15.38
6.41
13.15
9.09
Earnings per share (NT$) 3.00
0.95
0.47
1.11
0.70
Cash flow Cash flow ratio (%) 4.07
245.06
98.76
-10.93
-9.71
Cash flow adequacy ratio
(%)		 98.26
93.51
-14.12
-10.53
-54.70
Cash flow reinvestment
ratio(%)		 -6.07
29.34
2.97
-6.04
-1.18
Leverage Operating leverage 2.16
12.34
5.77
2.94
4.23
Financial leverage 1.01
1.08
1.03
1.01
1.02
Reasons for the changes in the financial ratios reaching 20% or above in the most recent two years are described as follows:
1. Financial structure: The increase in liabilities was primarily due to the increase in short-term borrowings.
2. Decrease in solvency: Primarily due to the increase in short-term borrowings.
3. Increase in operating performance: Primarily due to the increase in net sales.
4. Increase in profitability: Primarily due to the increase in net profit (before tax) after tax of the period.
5. Decrease in cash flow: Primarily due to the increase in account receivables.
6. Leverage: Primarilydue to the increase in operating profits.

Note 1: Years not audited or certified by cpas shall be specified. Note 2: The Company has not issued the parent company only quarterly financial statements as of March 31, 2024. Note 3: At the end of the table of the annual report, the following calculation formulas shall be presented:

  1. Financial structure

  2. (1) Debt-to-asset ratio = Total liabilities / Total assets

  3. (2) Long-term fund to property, plant and equipment ratio = (Shareholders' equity + non-current liabilities) / Net property, plant and equipment

  4. Solvency

  5. (1) Current ratio = current assets/current liabilities

  6. (2) Quick ratio = (Current assets - inventory - prepayments)/current liabilities.

118 

  - (3) Interests coverage multiplier = income before income tax and interest expense/interest expense for the period

  1. Operating performance

    • (1) Receivables (including accounts receivable and notes receivable due to business operation) turnover = Net sales / the balance of average receivables of different periods (including accounts receivable and notes receivable due to business operation)

    • (2) Average collection days = 365 / Receivable turnover ratio

    • (3) Average inventory turnover = Cost of goods sold / average inventory

    • (4) Payables (including accounts payables and notes payable due to business operation) turnover = Cost of goods sold / the balance of average payables of different periods (including accounts payables and notes payable due to business operation)

    • (5) Average sales days = 365/inventory turnover rate

    • (6) Property, plant, and equipment turnover = Net sales/average property, plant, and equipment.

    • (7) Total assets turnover rate = net sales/average total assets

  2. Profitability

    • (1) Return on total assets = [Net income + Interest expenses× (1 - tax rate)] / Average total assets

    • (2) Return on equity = net profits after tax/average total equity

    • (3) Net profit margin = net profits after tax/net sales

    • (4) Earnings per share = (Profit or loss attributable to owners of the parent - preferred stock dividend)/weighted average number of issued shares. (Note 4)

  3. Cash flow

    • (1) Cash flow ratio = Net cash provided by operating activities / Current Liabilities

    • (2) Cash flow adequacy ratio = sum of net cash flow from operating activities for the most recent 5 years / sum of capital expenditures, inventory additions, and cash dividend for the most recent 5 years.

    • (3) Cash reinvestment ratio = (net cash flow from operating activities - cash dividend) / (gross property, plant, and equipment + long-term investment + other non-current assets + working capitals). (Note 5)

  4. Leverage:

    • (1) Operating leverage = (Net revenue - variable cost of revenue and expenses)/operating gains (Note 6).

    • (2) Financial leverage = operating profits / (operating profits - interest expense).

  5. Note 4: Regarding the calculation formula for earnings per share above, please be aware of the following matters upon measurement:

  6. Adopt the weighted average number of ordinary shares as the basis instead of the number of issued shares at the end of the year.

  7. If there is any capital increase in cash or treasury share transactions, the circulation period shall be considered when calculating the weighted average number of shares.

  8. If there is any capital increase from earnings or capital increase from the capital reserve, when calculating the earnings per share for prior years and the interim period, retrospective adjustments shall be made based on the ratio of capital increase without considering the issuance period of the capital increase.

  9. If preferred shares are non-convertible cumulative preferred shares, their dividend of the year (whether distributed or not) shall be deducted from net income, or net loss after tax shall be increased. If preferred shares are not cumulative, in the case of having a net income, dividends of preferred shares shall be deducted from net income; if losses are recorded, no adjustment is required.

  10. Note 5: Please be aware of the following matters for the measurement of cash flow analysis:

  11. Net cash flow from operating income refers to the net cash inflow from operating income in the statement of cash flow.

  12. Capital expenditures refer to cash outflow from investments.

  13. The increase in inventory is only included when the closing balance is higher than the opening balance; if inventory decreases at the end of the year, calculate it as 0.

  14. Cash dividends include cash dividends of ordinary shares and preferred shares.

  15. Gross amount of property, plant and equipment refers to total property, plant and equipment before deducting accumulated depreciation.

Note 6: Issuers shall distinguish cost of revenue and operating expenses into fixed and variant based on nature; if any estimate or subjective judgment is involved, please be aware of the rationale and maintain consistency.

  • Note 7: If shares of the Company have no par value or the par value is not NT$10, the calculation of the abovementioned ratio to paid-in capital shall be calculated based on equity attributable to owners of the parent company in the balance sheet.

119

3. Audit Committee's Review Report of the financial statements of the most recent year:

Audit Committee's Review Report

The Board has prepared the 2023 business report, financial statements (including consolidated financial statements), and the Table of Earning Distribution, in which Deloitte & Touche Taiwan, engaged by the Board, has audited the financial statements and issued an auditor's report.

We have reviewed the abovementioned books and statements and consider that they comply with the requirements of the Company Act and relevant laws and regulations; therefore, we issue the review report as above according to the requirements under Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Act.

Submitted for examination Sincerely,

The 2024 annual shareholders' meeting of Loop Telecommunication International, Inc.

Convener of the Audit Committee: Ko Shu-Mei

March 12, 2024

120

4. Financial statements of the most recent year ： Please refer to page 144 of the annual report.

5. Parent company only financial statements of the most recent year audited and certified by cpas : Please refer to page 212 of the annual report.

6. Kpis of the Company:

(1) Financial indicator

Meaning: The control of the Company's operating performance, financial structure, and profitability

Percentage Formula Objective 2022 2023
Earnings per share-EPS Net income/weighted average
number of issued shares		 >1 0.95
3.00
NP % Net profits after tax/net sales >10% 15.38%
30.76%
Liability ratio Total liabilities/total assets <23% 21.06%
34.40%
Current ratio Current assets/current liabilities >225% 596.08
266.07
Inventory turnover Cost of goods sold/average
inventory		 >3 0.65
0.59

(2) Performance indicator

Meaning: Expense control regarding personnel of Sales, R&D, and Production departments and profit creation

Department Percentage Formula Objective 2022 2023
Sales Department (SP/Sales Expense)
Level of contribution of sales
personnel		 Net profit of sales/sales
expenses		 >3.5 5.36 8.46
Sales Department (Revenue/Sales Expense) Revenue/sales expenses >10 9.76
12.31
R&D Department Resource Utilization Rate Baseline*Complete% /
Working Hours (in pass
12 month)		 >80% 75%
86%
R&D Department (ECR/(Lab) man-month) (ECR/(Lab) man-month) <0.5 1.25
0.65
Production
Department		 Annual increase/decrease rate
of idle stock		 Comparison of the amount
in the same period of two
years		 <Revenue0.5% 0.87%
0.62%

7. If the Company and its affiliates have experienced financial difficulties in the most recent year and up to the date of publication of the annual report, explain how said difficulties affect the Company's financial conditions: None .

121

(VII) Review and analysis of financial condition and financial performance and risk management

1. Financial position:

(In Thousands of New Taiwan Dollars) (In Thousands of New Taiwan Dollars)
Year
Item
2022		 2023 Difference
Amount Increase/decrease
ratio(%)
Current assets 802,210
998,352
196,142
24%
Fixed assets 146,206
153,385
7,179
5%
Other assets 131,038
133,688
2,650
2%
Total Assets 1,079,454
1,285,425
205,971
19%
Current liabilities 134,582
375,222
240,640
179%
Long-term liabilities 92,789
67,009
-25,780
-28%
Total Liabilities 227,371
442,231
214,860
94%
Capital stock 709,206
567,365
-141,841
-20%
Capital surplus 48,208
43,953
-4,255
-9%
Retained earnings 97,455
234,627
137,172
141%
Total shareholders' equity 852,083
843,194
-8,889
-1%
Analysis of changes exceeding 20%:
1. The increase in current assets was primarily due to the increase of accounts receivables due during the period.
2. The increase in current liabilities was primarily due to the increase in short-term borrowings during the period.
3. The decrease in long-term liabilities was primarily due to the decrease in net defined benefit liabilities during the
period.
4. The decrease in capital stock was primarily due to the decrease in cash reductions of capital during the period.
5. The increase in retained earnings was primarily due to the net profits in 2023.
Effects of changes in the financial position in the most recent two years: There was no material effect on the financial
position.
Future response plan: Not applicable.

122

2. Financial performance:

Financial performance: Financial performance: Financial performance: Financial performance: Financial performance: Financial performance: Financial performance: Financial performance:
(In Thousands of New Taiwan Dollars)
Year
Item
2022		 2023 Amount increased
(decreased)		 Increase /
decrease(%)		 Analysis of
change
Total net revenue
Net revenue
Operating cost
Gross profit
Operating expenses
Operating profit
Non-operating income and gains
Non-operating expenses and losses
Gains before tax
Income tax gains (expenses)
Net profit (loss)		 $438,242
438,242
197,678
240,564
226,055
14,509
73,888
-4,994
83,403
-16,000
$67,403
$649,097

649,097

203,043

446,054

252,784

193,270

56,456

-2,961

246,765

-47,106

$199,659
210,855

210,855

5,365

205,490

26,729

178,761

-17,432

2,033

163,362

-31,106

132,256
48%

48%

3%

85%

12%

1232%

-24%

-41%

196%

194%

196%



1


1

2

3



1

14,509
73,888
-4,994
83,403
-16,000
14,509
73,888
-4,994

$67,403
Analysis of changes exceeding 20%:
1. The increase in gross profit, operating gains, and net income was primarily due to the increase in net revenue of the
year.
2. The decrease in non-operating income and gains was primarily due to the decrease in net currency exchange losses.
3. The decrease in non-operating expenses and losses was primarily due to the decrease in other losses.
Effects of changes in the financial position in the most recent two years: There was no material effect on financial
performance.
Future response plan: Make adjustments according to operating strategies and solidify key products for active
arrangements; meanwhile, continue to improve the management and actively improve and stabilize the financial structure
in the hope of improvingthe operations.

3. Cash flow analysis:

Cash flow analysis: Cash flow analysis: Cash flow analysis: Cash flow analysis: Cash flow analysis: Cash flow analysis: Cash flow analysis:
(In Thousands of New Taiwan Dollars)
Opening cash
balance		 Net cash flow from
operating and
investing activities
throughout theyear		 Cash outflow from
financing activities
throughout the year		 Cash residual
amount		 Effects on changes
in exchange rates		 Remedy for estimated cash
deficit
Investment
plan		 Financing
plan
361,283 (56,534) (24,591) 269,074 (11,084) None None
1.
Analysis of changes in cash flows during the year:
Cash inflow from operating income: Primarily due to the net income during the period.
Cash outflow from investing activities: Primarily due to the acquisition of financial assets measured at amortized cost.
Cash outflow from financing activities: Primarily due to the distribution of cash dividends and cash reductions of capital.
2.
Improvement plan for insufficient liquidity and liquidity analysis: There is no insufficient cash liquidity.
3.
Remedial measures for cash deficiency and liquidity analysis: None.

123

4. Effect of major capital expenditures on finance and business in the most recent year: None .

5. Investment policy for the most recent year, the main reasons for profit or loss, improvement plan, and investment plan for the coming year:

Description Investment policy Main reasons for
gains or losses		 Improvement plan Investment gains
or losses
recognized during
the period
(NT$thousand)		 Other future
investment
plans
Tianjin Loop Develop and
provide service for
Mainland China		 Gain from price
recovery of
inventory		 Not applicable $391 None
Tianjin Hutong Develop and
provide service for
Mainland China		 Operating income
failed to achieve the
expectations		 Continue to explore
new customers in
Mainland China		 ($463) None
Chongqing Cantong Develop LOOP-inet
(smart network
equipment
management
system)		 Operating income
failed to achieve the
expectations		 Adjustments will be
made to product
strategies in due
course according to
the overall trends of
the market		 ($122) None

6. Analysis and evaluation of risks shall be performed for the following matters in the most recent year and up to the publication date of the annual report:

  • (1) Effects of changes in interest rates and exchange rates and inflation on the Company's profit or loss and future countermeasures

A. Effects on the Company's profit or loss:

Effects on the Company's profit or loss:
Item 2023 (NT$ thousand; %)
Net interest income and expenses 14,972
Net exchangeprofit 2,307
Ratio of net interest income and expenses to net revenue 7.747%
Ratio of net interest income and expenses to net profit before
tax		 6.067%
Ratio of net exchangeprofit to net revenue 1.194%
Ratio of net exchangeprofit to netprofit before tax 0.935%

a. Changes in interest rates

Financial assets and financial liabilities with cash flow risks due to changes in interest rates in 2023 were NT$105,043 thousand and NT$192,000 thousand. If changes in market interest rates will result in changes in the effective interest rates of such financial products, assuming that the market interest rates increase by 0.1%, the net profit before tax of the consolidated Company in 2023 and 2022 decreases/increases by NT$87 thousand and NT$10 thousand. The main reason is the exposure of the net asset interest rate due to changes in the interest rates of the consolidated company.

b. Changes in exchange rates

The Company has import/export business and capital transactions denominated in foreign currencies. Changes in exchange rates primarily affect the costs of sales and income. In 2023, derivatives (forward exchange agreements) with risks due to changes in exchange rates were US$0 thousand. If changes in market exchange rates will result in changes in the fair value of such financial products, when NTD depreciates by 1% against foreign currencies, the net profit before tax of the Company in 2023 will decrease by NT$2,686 thousand.

c. Inflation

There is no effect caused by inflation.

124

B. Future countermeasures:

a. Countermeasures for changes in interest rates

The Company has a stable financial structure and favorable credit standing. If there is a demand for capital accommodation, it can obtain capital with reasonable costs from banks or the capital market. For interest rates of bank borrowings, the Company maintains close contact with banks to understand the trending of interest rates to serve as a reference to secure the most favorable borrowing and asset allocation. The main terms of mid-to-long-term working capital are described as follows:

Loan item Loan A Loan B
Content Short-term (secured) Case A - Comprehensive Case B - Comprehensive Comprehensive bank loans
loan loans - 1 loans - 2
Limit NT$40 million
NT$100 million NT$80 million NT$72 million
Criteria NTD: Calculated at an annual
rate of 1.8% based on the
three-month or six-month
TAIBOR, but not to be lower
than the bank's NTD basic
loan rate, with adjustments to
the interest rate once per
month.
USD: Calculated by adding
1% to the annual rate of the
three-month or six-month
TAIFX OFFER, then dividing
by 0.946, but not to be lower
than the bank's USD basic
loan rate.
NTD: Fixed savings interest
rate index + interest at the
variable rate of + 0.93%
Fixed savings interest rate
USD: LIBOR on the same
index + interest at the
date/period + 1% and

variable rate of + 0.93%
divided by 0.946 (at present,
interest per annum is
1.3319%) for the fixed
interest
Period 1 year 1 year 1 year 1 year
(2023.07.19-2024.07.18)
Drawdown
period		 2023.07.19-2024.07.18
2023.09.06~2024.09.06 2023.11.23~2024.11.23 2023.11.23~2024.11.23
Unused balance 2023/12/31 balance 2023/12/31 balance NT$ 39,000,000
Unused balance
NT$ 100,000,000 NT$ 72,000,000
NT$ 80,000,000
No unused balance No unused balance
Remarks Using the plant on Ruiguang
Plant on Xin'an Rd.,
Deposit certificate Rd., Taipei and equipment
Hsinchu City
as collateral

b. Countermeasures for changes in exchange rates

The Company and abundant working capital and has relatively better flexibility to respond to the risk of changes in interest rates in financial operations. For changes in exchange rates, the Company has established a risk assessment team. Our purchases are primarily denominated in USD, which is offset by regular purchase and sales payments. The Company offsets the exchange rate fluctuations of different currencies to achieve a certain level of natural hedging effects from changes in exchange rates. Apart from partial dynamic and natural hedging, the Company sells the remaining currencies by selecting better timing to avoid risks of changes in exchange rates. The Company and customers have reached a consensus for the handling principles; if the appreciation/depreciation of the exchange rate exceeds a certain level, it will be reflected immediately on the quotation.

c. Countermeasures for inflation

The selling price of products and the purchasing price of raw materials are determined based on the pricing strategies and the supply/demand status in the market. With the increase in the market supply and the intense market competition, the price showed a dropping trend; therefore, there was no effect of inflation in the most recent two years. Regarding the effects of inflation, the industry the Company is in is estimated to have no inflation; however, the Company keeps abreast of price volatility rates in relevant markets and will horizontally adjust product quotations based on the prices or execute cost control plans in due course.

125

  • (2) Policies regarding high-risk investments, high-leverage investments, loans to others, endorsement/guarantees, and derivative transactions, and main reasons for gains or losses, and countermeasures in the future:

To manage financial risks, the Company had not engaged in any high-risk/high-leverage financial investment from the beginning of 2023 to the publication date of the annual report. To control certain risks, the Company has established its internal management regulations and procedures based on the optimization of finance and operations according to relevant laws and regulations and requirements of the SFC. Such management regulations include "Procedures for Derivative Transactions," "Procedures for Loans to Others," "Procedures for Acquisitions or Disposals of Assets," and "Procedures for Endorsements and Guarantees." In addition, forward exchange agreements of the Company are for hedging purposes instead of transaction or speculative operations.

(3) Future R&D plan and R&D expenses expected to be invested:

  • A. Future R&D plan: Please refer to pages 84-92 of the annual report.

  • B. Current progress of uncompleted R&D plans and R&D expenses required to be invested : Please refer to pages 93-94 of the annual report.

  • (4) Effect of changes in domestic and foreign policies and laws of significance on the finance and business of the Company and countermeasures:

The management team has been keeping abreast of policies and laws, and regulations that may affect the business and operations of the Company. In 2023, changes in relevant laws and regulations had no material effect on the Company's operations.

  • (5) Effect of changes in technologies and industry on the finance and business matters of the Company, and countermeasures:

  • In 2023, 80% of our revenue was from 9% of countries having dealings with us. Among all 27 product lines, 80% of the revenue was from 12% of the sales products. There are 46 countries having business dealings with the Company worldwide. Our export sales accounted for approximately 70% of the revenue throughout the year. In particular, we recorded growth in America, the EU, and Taiwan. There has been a slight decrease for the Indian and Middle East markets. In terms of industry, electricity and governmental agencies account for 70% of our total revenue, and transportation and private corporate markets account for approximately 20%. Driven by a favorable outlook in the communications market, Loop Telecom's long-term partnerships with international SI heavyweights are expected to sustain growth in Europe and America. The domestic market has also entered the next development phase, while the markets in Southeast Asia are recovering. Continued development in emerging markets and proactive advancement in next-gen communication technologies will fuel growth under new trends.

The Company regularly carries out market demand forecasts for its products and services. The demand forecast will be adjusted based on the dynamic changes in the market environment. In addition, the Company will continue to observe the changes in the market and closely work with customers. If the market demand is less favorable than expected, the Company will adjust its production capacity plan in due course to minimize the negative effects on the financial performance of the Company. The Company established a dedicated department for information safety in 2022 to be responsible for the formulation of cybersecurity policies, the promotion of cybersecurity measures, and regular examination. The information safety committee has a chief of information safety, who is concurrently the director of the information department, and three members. When any information safety event occurs, they shall contract responsible personnel for operating procedures of relevant departments for crisis management.

  • (6) Effects of changes in the corporate image on crisis management of the enterprise and countermeasures: As of the end of 2023, there were no such circumstances.

  • (7) Expected benefits of M&As, possible risks, and countermeasures: As of the end of 2023, there were no such circumstances.

126

  • (8) Expected benefits of the expansion of plants, possible risks, and countermeasures: As of the end of 2023, there were no such circumstances.

  • (9) Risks related to concentrated sales or purchases and countermeasures:

The Company purchases raw materials from different suppliers as much as possible to ensure there is sufficient raw material supply for mass production and minimize the risk of centralized procurement. Even though the company acquires partial raw materials from a single supplier, it continuously seeks other purchase methods to minimize the risk of centralized procurement. In 2023, the top 10 customers of sales accounted for 82.8% of the Company's revenue. As the Company focuses on communication transmission equipment manufacturing and services, partial customers account for a significant ratio of its sales income, which is a characteristic of the industry.

  • (10) Effects and risk of mass transfer or change in the equity held by Directors or major shareholders with a shareholding over 10% of the Company, and countermeasures

The Company generally has close contact with major shareholders for them to release their shares by adopting methods having the least possible negative impacts on the stock price of the Company and other shareholders.

  • (11) Effects of changes in management rights on the Company, risks, and countermeasures: None .

  • (12) Litigious and non-litigious matters. List major litigious, non-litigious or administrative disputes that involve the Company and its Directors, President, persons with actual responsibility for the Company, major shareholders holding a stake of greater than 10%, and subsidiaries that have been concluded by means of a final and unappealable judgment, or are still under litigation. Where such a dispute could materially affect shareholders' equity or the prices of the Company's securities, disclose the facts of the dispute, the amount of money at stake in the dispute, the date of litigation commencement, the main parties involved in the dispute, and the status of the dispute as of the publication date of the annual report: None .

  • (13) Other important risks and countermeasures: None .

7. Risk management structure:

(1) Risk management structure and operation

  • A. The Company has enhanced its corporate risk management, including risk detection, assessment, reporting, and handling, based on the latest development of internal audit requirements of the standards by adopting a cautious and stringent attitude. Risk control of the Company is divided into three levels (systems): The organizer or the undertaker is the "first system," it shall be responsible for the initial risk detection, assessment, consideration and design of the control and prevention. The second system is the review committee hosted by the President (or Vice President); it is responsible for feasibility evaluation and assessment of risks. The third system is the review of the Legal Affairs Office and Audit Office and review and discussion by Directors and supervisors. The Company has no chief risk officer, and the purpose is to allow all employees to fully exert risk control. Hierarchical prevention measures are adopted instead of being controlled by one person, which is the method to implement risk control. As shown in the following table.

  • B. For material risk assessment matters of the Company, if it is a matter of implementation that the review and discussion of the second and the third systems are not required, a meeting shall be held with the Audit Office to detect risks, make assessments, and provide preventive recommendations. If there are any imminent, possible risks detected, employees may also report to their superiors for due prevention. For significant matters (i.e., investment and wealth management and construction tender), review meetings or tender monitoring will be performed for each proposal, and regular audits will be implemented.

127

(2) Organizational chart of risks management

Significant risk assessment matters Direct department for
Risk control
(Business organizer)
(first system)		 Risk discussion/review
and control
(second system)		 Board meetings,
supervisor meetings,
And Audit Office
(third system)
I.
Interest rate, exchange rate, and
financial risks
II.
High-risk and high-leverage
investments, loans to others,
derivative transactions, and wealth
management and investments		 Department of Finance
Department of Finance		 Wealth management
and investment review
team		 Board meeting and
supervisor meeting:
(decision-making of risk
assessment and control
and final control)
III.
R&D plan
IV.
Changes in policies and laws
V.
Changes in technologies and
industry
VI.
Changes in corporate image
VII. Benefits of investments and M&As		 R&D Department
Management Department
Market system
Market system
Management Department		 MSRD meeting
(member: directors of
different departments)
VIII. Expansion of plants or production
IX.
Concentrated purchase or sales		 Management Department and
Production Department
Procurement Department and
Management Department		 Production and
marketing meeting		 Audit Office: (risk
inspection, assessment,
supervision,
improvement follow-up,
and reporting)
X.
Changes in equity of Directors,
supervisors, and major
shareholders XI.
XI.
Changes in management rights		 Stock affairs and the Board
Stock affairs and the Board		 Management
Department meeting
XII. Litigious and non-litigious matters
XIII. Other operatingmatters		 Management Department
Management Department
XIV. Employee's conduct, ethics, and
integrity		 Directors of different levels
and the Administration Section		 Management
Department meeting
XV. Compliance with SOP and
regulations		 Directors of different levels Audit Office
XVI. Management of procedures of the
Board		 Board's Office Audit Office

128

(VIII) Special Items

1. Information on affiliates:

(1) Name and organizational chart of affiliates

As of the end of 2023, the investment relationships and shareholding ratio of the Company and its subsidiaries are set out in the following figure:

==> picture [533 x 280] intentionally omitted <==

----- Start of picture text -----

Loop Telecommunication International, Inc.
100% 100%
Tech-Plan (BVI) Ltd. Loop Telecom NA, Inc.
100% 100%
Maxi View Holdings Ltd. Loop Telecommunication
75%
International Ltd.
100% 100%
100%
Tianjin Loop
Tianjin Loop Electron Chongqing Cantong
Technology Co.,
Technology Co., Ltd. Technology Co., Ltd.
Ltd.
----- End of picture text -----

129

(2) Basic information on affiliates:

(2) Basic information on affiliates:
December 31,2023
Company name Establishment
Date
Address		 Paid-in capital Paid-in capital
1. Tech-Plan (BVI) Ltd.
2. Maxi View Holdings Ltd.
3. Loop Telecommunication
International Ltd.
4. Tianjin Loop Electron Technology Co.,
Ltd.
5. Chongqing Loop Technology Co., Ltd.
6. Tianjin Loop Technology Co.,Ltd.
7. Loop Telecom NA, Inc		 1998.08.12
1998.11.16
2002.06.20
2001.10.30
2002.06.25
2015.10.14
2018.01.23		 Portcullis Chambers, 4th Floor, Ellen Skelton
Building, 3076 Sir Francis Drake Highway,
Road Town, Tortola VG1110, VIRGIN
ISLANDS, BRITISH
15/F BOC GROUP LIFE ASSURANCE
TOWER 136 DES VOEUX ROAD CENTRAL
CENTRAL HK
P.O. BOX 32052 Grand Cayman KYI-
1208,Cayman Islands.
No.405, 4F, Building A, Keyuan Science and
Trading Building, No. 240, Baiti Road, Nankai
District, Tianjin City, China
No. 10-5, Building C, Yugao Plaza, No. 200,
Keyuan 1st Road, Shiqiaopu, Chongqing City,
China
No.405, 4F, Building A, Keyuan Science and
Trading Building, No. 240, Baiti Road, Nankai
District, Tianjin City, China
2000 G Avenue, Suite 804 Plano, Texas 75074		 USD4,016,000
USD1,616,000
USD2,400,000
USD850,000
USD2,400,000
USD600,000
USD5,000		 General investment
General investment
General investment
Development, production, sales, and relevant technical
consultation services of data communication equipment,
computers, network systems, and software/hardware of
computers
R&D, design, production, and processing of data
communication equipment (excluding satellite
communication equipment), computer network system
equipment, network testing instruments and equipment,
computers and external equipment, office automation
equipment, and relevant service software/hardware of
the abovementioned products, sales of products
produced by the Company, and provision of relevant
after-sales services.
R&D, production, and sales of communication
equipment, computer network system equipment,
network testing instruments and equipment, computers
and external equipment, office automation equipment,
relevant service software/hardware of the
abovementioned products, and product system
integration
Development and trading of digital communication
equipment and software

Relevant information on those with presumed controlled or subordinated relationships: None.

130

(3) Name of directors and presidents of affiliates and their shareholding:

December 31,2023
Shareholding (Note 2) (Note 3)
Number of shares (amount
of capital contribution)
Shareholding (capital
contribution)ratio
USD4,016,000
100%
(Note 4)
(Note 4)
USD1,616,000
100%
(Note 4)
(Note 4)
USD2,400,000
100%
(Note 4)
(Note 4)
USD850,000
100%
(Note 4)
(Note 4)
(Note 4)
(Note 4)
(Note 4)
(Note 4)
(Note 4)
(Note 4)
USD2,400,000
100%
(Note 4)
(Note 4)
(Note 4)
(Note 4)
USD600,000
100%
(Note 4)
(Note 4)
(Note 4)
(Note 4)
(Note 4)
(Note 4)
USD5,000
100%
(Note 4)
(Note 4)
(Note 4)
(Note 4)		 December 31,2023
Shareholding (Note 2) (Note 3)
Number of shares (amount
of capital contribution)
Shareholding (capital
contribution)ratio
USD4,016,000
100%
(Note 4)
(Note 4)
USD1,616,000
100%
(Note 4)
(Note 4)
USD2,400,000
100%
(Note 4)
(Note 4)
USD850,000
100%
(Note 4)
(Note 4)
(Note 4)
(Note 4)
(Note 4)
(Note 4)
(Note 4)
(Note 4)
USD2,400,000
100%
(Note 4)
(Note 4)
(Note 4)
(Note 4)
USD600,000
100%
(Note 4)
(Note 4)
(Note 4)
(Note 4)
(Note 4)
(Note 4)
USD5,000
100%
(Note 4)
(Note 4)
(Note 4)
(Note 4)
Company name Title (Note 1) Name or representative Shareholding (Note 2) (Note 3)
Number of shares (amount
of capital contribution)		 Shareholding (capital
contribution)ratio
1.
Tech-Plan (BVI) Ltd.
2.
Maxi View Holdings Ltd.
3.
Loop Telecommunication International Ltd.
4.
Tianjin Loop Electron Technology Co., Ltd.
5.
Chongqing Loop Technology Co., Ltd.
6.
Tianjin Loop Technology Co.,Ltd.
7.
Loop Telecom NA, Inc		 Chairman
Director
Chairman
Director
Chairman
Director
Chairman
President
Director
Director
Supervisor
Chairman
(concurrently the president)
Director
Director
Chairman
Director
Director
(concurrently the president)
Supervisor
Director
Director
Director		 Representative of Loop Telecommunication International, Inc. - Yeh Maw-Lin
Representative of Loop Telecommunication International, Inc. - Yeh Maw-Lin
Representative of Loop Telecommunication International, Inc. - Yeh Maw-Lin
Representative of Loop Telecommunication International, Inc. - Yeh Maw-Lin
Representative of Loop Telecommunication International, Inc. - Yeh Maw-Lin
Representative of Loop Telecommunication International, Inc. - Yeh Maw-Lin
Representative of Loop Telecommunication International, Inc. - He Hwa-Chi
Wang Yen-Min
Representative of Loop Telecommunication International, Inc. - Wu Ming-Ze
Fan Zheng-Chun
Representative of Loop Telecommunication International, Inc. - Liu Dong-Jie
Representative of Loop Telecommunication International, Inc. - He Hwa-Chi
Representative of Loop Telecommunication International, Inc. - Wu Ming-Ze
Representative of Loop Telecommunication International, Inc. - Yeh Maw-Lin
Representative of Loop Telecommunication International, Inc. - He Hwa-Chi
Representative of Loop Telecommunication International, Inc. - Yeh Maw-Lin
Wang Yen-Min
Representative of Loop Telecommunication International, Inc. - Wu Ming-Ze
Representative of Loop Telecommunication International, Inc. - He Hwa-Chi
Representative of Loop Telecommunication International, Inc. - Wu Ming-Ze
Representative of LoopTelecommunication International,Inc. - Lai Yong-Zan		 USD4,016,000
(Note 4)
USD1,616,000
(Note 4)
USD2,400,000
(Note 4)
USD850,000
(Note 4)
(Note 4)
(Note 4)
(Note 4)
USD2,400,000
(Note 4)
(Note 4)
USD600,000
(Note 4)
(Note 4)
(Note 4)
USD5,000
(Note 4)
(Note 4)		 100%

(Note 4)
100%

(Note 4)
100%

(Note 4)
100%

(Note 4)

(Note 4)

(Note 4)

(Note 4)
100%

(Note 4)

(Note 4)
100%

(Note 4)

(Note 4)

(Note 4)

100%

(Note 4)
(Note 4)

Note 1: If an affiliate is a foreign company, specify the persons of equivalent positions. Note 2: If the investee is a limited company by shares, please specify the number of shares and shareholding ratio; for others, please specify the amount of capital contribution and capital contribution ratio and make remarks.

Note 3: If a Director is a corporation, relevant information on the representative shall be additionally disclosed. Note 4: The amount of capital contributions of representatives shall be disclosed in summary.

131

(4) Business overview of associates

(4) Business overview of associates
December 31,2023/(Unit: NT$thousand,except for otherwise specified)
Company name Amount of Capital Total Assets Total
Liabilities		 Net value Net revenue Operating
profit		 Profit or loss for
the period (after
tax)		 Net loss per share
(NT$) (after tax)
1. Tech-Plan (BVI) Ltd. (Note 1)

2. Maxi View Holdings Ltd. (Note 1)

3. Loop Telecommunication
International Ltd. (Note 1)

4. Tianjin Loop Electron Technology Co.,
Ltd.

5. Chongqing Loop Technology Co., Ltd.

6. Tianjin Loop Technology Co.,Ltd.

7. Loop Telecom NA, Inc		 USD4,016,000
USD1,616,000
USD2,400,000
USD850,000
USD2,400,000
USD600,000
USD$5,000
412

-293

712

3,000

7,971

4,868

184
-

-

-

3,515

7,267

7,155

31		 412
-293
712

-515

704

-2,287

153
-

-

-
745

12,510

6,474
-		 -
-
-

215

-172

-453
-		 -194
-72
-122

391

-122

-463
-
Not applicable

Not applicable

Not applicable

Not applicable


Not applicable


Not applicable

Not applicable

Note 1: Refer to investee. Note 2: If an affiliate is a foreign company, relevant figures shall be translated into NTD by adopting the exchange rate on the reporting date for presentation. The exchange rate of USD to NTD was NT$30.705.

Note 3: Consolidated financial statements of affiliates: Please refer to page 144 of the annual report. Note 4: Affiliation report of affiliates: Not applicable.

132

2. Regarding securities under private placement in the most recent year and up to the publication date of the annual report, the date and amount approved by the shareholders' meeting or the Board, the basis and rationale of pricing, the selection method of particular persons, reasons for the necessity of private placement, targets of the private placement, qualification and conditions, subscription quantity, relationships with the Company, participation in the Company's operations, actual subscription (or conversion) price, differences between the actual subscription (or conversion) price and the reference price, effects of the private placement of shareholders' interest, capital utilization plans after the full collection of share payments or considerations, utilization of capital from the private placement of securities, the progress of plan execution, and the exhibition of plan benefits: None .

3. Holding or disposal of the Company's shares by its subsidiaries in the most recent year and up to the publication date of the annual report: None .

4. Other matters that require additional explanation: None .

  • (IX) Any of the circumstances listed in subparagraph 2, paragraph 2, Article 36 of the Securities and Exchange Act, which may materially affect shareholders' interest or the price of the Company's securities, that have occurred in the most recent year (2023) and up to the publication date of the annual report: None .

133

Attachment 1

Procedures for Handling Material Inside Information

Chapter 1 General Provisions Article 1 (Purpose of the Procedures) These Procedures are specially adopted to establish sound mechanisms for the handling and disclosure of material inside information by the Company in order to prevent improper information disclosures and to ensure the consistency and accuracy of information released by the Company to the public. Article 2 (The handling of material inside information shall be subject to laws and regulations, and the Procedures) The Company shall implement its handling and disclosure of material inside information in accordance with applicable laws and regulations, the rules and regulations of the TWSE or the tpex, and these Procedures. Article 3 (Applicable targets) These Procedures shall apply to all Directors, supervisors, managers, and employees of the Company. The Company shall ensure that any other person who acquires knowledge of the Company's material inside information due to their position, profession, or relationship of control shall comply with the applicable provisions of these Procedures.

  • Article 4 (Coverage of material inside information) The term "material inside information" refers to in the Procedures formulated by the Management Department that handles material inside information of the Company and approved by the Board as a resolution; the Securities and Exchange Act, relevant laws and regulations, the rules and regulations of the TWSE or the tpex, and these Procedures were considered upon the formulation.

  • Article 5 (Dedicated department for handling material inside information: the Management Department) The Company shall establish a dedicated department for handling material inside information that composes an appropriate number of competent members based on the scale, business status, and management requirements of the Company, and such matters shall be approved by the Board; the powers are as follows: I. Responsibility for formulating the drafts of these Procedures and any amendments to them. II. Responsibility for receiving inquiries in connection with the methods of handling material inside information and for consultation, review, and recommendations relating to these Procedures.

  • III. Responsibility for receiving reports on unauthorized disclosures of material inside information and formulation of corresponding measures.

  • IV. Responsibility for designing a system for preserving all documents, files, electronic records, and other materials related to these Procedures.

  • V. Other activities related to these Procedures.

  • Chapter 2 Confidentiality Procedures for Material Inside Information Article 6 (Confidentiality firewall operation - employees) The Company's Directors, supervisors, managers, and employees shall exercise the due care and fiduciary duty of a good administrator and act in good faith when performing their duties and shall sign confidentiality agreements. No Directors, supervisors, managers, or employees with knowledge of material inside information of the Company may divulge the information to others. No Directors, supervisors, managers, or employees of the Company may inquire about or collect any non-public material inside information of the Company not related to their individual duties from a person with knowledge of such information, nor may they disclose to others any non-public material inside information of the Company of which they become aware for reasons other than the performance of their duties.

  • Article 7 (Confidentiality firewall operation - item)

Proper protection of confidentiality shall be given to files and documents containing the Company's material inside information when transmitted in written form. When transmitted by e-mail or other electronic means, such files and documents must be processed with appropriate security technology such as encryption or electronic signatures.

Files and documents containing the Company's material inside information shall be backed up and stored in a secure location.

134

  • Article 8 (Confidentiality firewall operation) The Company shall ensure that the firewalls specified in the preceding two articles are established and take the following additional steps:

  • I. Adopt adequate control measures for the firewalls and perform periodic testing. II. Enhance measures for custody and maintaining the secrecy of files and documents containing nonpublic material inside information of the Company.

Article 9 (Confidentiality operation for external institutions or personnel)

  • Any organization or person outside of the Company that is involved in any corporate action of the Company relating to a merger or acquisition, major memorandum of understanding, strategic alliance, other business partnership plans, or the signing of a major contract shall be required to sign a confidentiality agreement, and may not disclose to another party any material inside information of the Company's thus acquired.

  • Chapter 3 Disclosure Procedures for Material Inside Information Article 10 (Principles for disclosures of material inside information)

  • The Company shall comply with the following principles when making external disclosures of material inside information:

  • I. The information disclosed shall be accurate, complete, and timely. II. There shall be a well-founded basis for the information disclosure. III. The information shall be disclosed fairly.

  • Article 11 (Implementation of the spokesperson system)

Any disclosure of the Company's material inside information, except as otherwise provided by law or regulation, shall be made by the Company's spokesperson or by a deputy spokesperson acting in such capacity in confirmed sequential order.

  • When necessary, the disclosure may be made directly by a responsible person of the Company. The Company's spokesperson or deputy spokesperson shall communicate to outside parties only information within the scope authorized by the Company, and no personnel of the Company other than those serving as the Company's responsible person, spokesperson, or deputy spokesperson may disclose any material inside information of the Company to outside parties without authorization.

Article 12 (Disclosure records of material inside information)

The Company shall keep records of the following in respect of any disclosure of information to outside parties: I. The person who discloses the information, the date, and the time. II. How the information is disclosed. III. What information is disclosed. IV. IV. What written material is delivered. V. Any other relevant details. Article 13 (Response to untrue media release) If a media agency releases information that is in any respect inconsistent with material information disclosed by the Company, the Company shall promptly issue a clarification on the Market Observation Post System (MOPS) and request the media agency to correct the information.

  • Chapter 4 Handling Anomaly Article 14 (Report of anomaly)

  • Any Director, supervisor, manager, or employee of the Company that becomes aware of any unauthorized disclosure of the Company's material inside information shall report to the dedicated department and the Internal Audit Department of the Company as soon as practicable. Upon receipt of a report made pursuant to the preceding paragraph, the dedicated department shall formulate corresponding measures. When necessary, it may invite members from the Internal Audit Department and other departments to meet for discussion of the measures and shall keep a record of the results of the measures for future reference. The internal auditors shall also perform such audits as their duties may require.

Article 15 (Default handling)

The Company shall take measures to discover those responsible and take appropriate legal action against any personnel under either of the following circumstances:

  • I. Personnel of the Company disclose material inside information without authorization to any outside party or otherwise violate these Procedures or any other applicable law or regulation.

  • II. A spokesperson or deputy spokesperson of the Company communicates to any outside party any information beyond the scope authorized by the Company or otherwise violates these Procedures or any other applicable law or regulation.

If any person outside the Company divulges any material inside information of the Company, thereby causing damage to any property or interest of the Company, the Company shall pursue appropriate measures to hold the person divulging the information legally liable.

135

Chapter 5 Internal Control Operations and Internal Educational Promotion Article 16 (Internal control system)

These Procedures shall be incorporated into the Company's internal control system. The internal auditors shall keep themselves regularly informed of the status of compliance with these Procedures and shall prepare related audit reports so as to ensure full implementation of the procedures for handling material inside information.

Article 17 (Education and promotion)

At least once per year, the Company shall conduct educational campaigns to promote awareness among all Directors, supervisors, managers, and employees with respect to these Procedures and related laws and regulations.

The Company shall also provide educational campaigns to new Directors, supervisors, managers, and employees in a timely manner.

  • Chapter 6 Supplementary provisions

Article 18 The Procedures were implemented after being approved by the Board, and the same shall apply upon any amendment.

136

Attachment 2

Code of Conducts or Ethics of Employees

  1. The Company has prepared its working rules, employee handbook, new employee handbook, and Code of Ethical Conduct to serve as the basis for observation of daily work and behaviors of employees. The code of ethical conduct to be observed by the employees of the Company is as follows:

  2. (1) When executing their duties, employees of the Company shall focus on team spirit and reject selfish departmentalism, comply with the principles of honesty and credibility, and adhere to an active, earnest, and responsible attitude.

  3. (2) Employees of the Company shall have no discrimination or crowd-out due to gender, ethnicity, religion, political party, gender orientation, job grade, nationality, age, or other factors.

  4. (3) Employees of the Company shall jointly maintain a healthy and safe working environment; any sexual harassment or other violence, threat, or intimidation is banned.

  5. (4) Employees of the Company are responsible for maintaining and improving justifiable and legal benefits gained by the Company and shall avoid:

    • a. Facilitate opportunities for itself or any third party to gain profits by using the properties and information of the Company or leveraging the convenience of its duties.

    • b. Compete with the Company.

  6. (5) Employees of the Company shall treat counterparties of business dealings fairly; when having transactions with related parties, there shall be no special discount. When executing duties, employees of the Company shall not request, offer, deliver, or accept gifts, entertainment, rebate, bribery, or other unjust benefits in any form for its or any third party's benefits. However, gifts or entertainment that are social customs or permitted by the Company are excluded.

  7. (6) Regarding any information that may materially affect the trading price of the Company's securities acknowledged by employees of the Company due to their duties, before the public disclosure, the information shall be kept strictly confidential according to the requirements of the Securities and Exchange Act, and employees shall not use such information for insider trading.

  8. (7) Employees of the Company shall respect personal privacy and shall not spread rumors or slander. For matters or confidential information acknowledged due to their duties, they shall manage cautiously. Except for disclosures made by the Company or provision necessary due to the execution of duties, employees shall not leak such information to others or use it for purposes other than work; the same shall apply after resignation.

  9. (8) The information that shall be kept confidential in the preceding paragraph includes the date of personnel and customers, inventions, business secrets, technical data, product designs, manufacturing know-how, financial and accounting data, intellectual properties, and other information of the Company, and other undisclosed information that may be used by competitors or may harm the Company or customers upon leakage.

  10. (9) Employees of the Company shall ensure that all forms of paper-based information that they handle are accurate and complete, and duly preserved.

  11. (10)When executing their duties, employees of the Company shall avoid the theft, interference, destruction, and invasions of data, information systems, and network equipment to protect the confidentiality, completeness, and availability of information of the Company. .

  12. (11)Employees of the Company shall not affect other employees in any means for political donations, supporting particular political parties or candidates, or participation in other political activities. In addition, they shall also avoid engaging in political activities during working hours and at the workplace.

  13. (12)Employees of the Company shall respect legal requirements related to intellectual property rights and prohibit the illegal use or duplication of intellectual properties with copyright, including books, magazines, and software.

  14. (13)Directors of the Company shall reinforce the promotion of the internal ethical concepts of the Company and encourage employees to report with their name recorded when discovering any violation of laws, regulations, rules, or the code, and the Company shall keep the identity of the reporting personnel confidential and provide protection to avoid threats.

  15. To maintain the work equality of both genders and provide a working and service environment free of sexual harassment to employees, the Company has established its Regulations for Sexual Harassment Control and Handling for employees to observe.

  16. Computers are necessary instruments for employees of the Company. To regulate the use of electronic instruments by employees, it has established requirements for Internet management and use for employees to observe.

137

  1. The Company is an information system company, and the use and development of software are closely related to its daily work. To protect intellectual property rights, the Company has formulated the ethical commitment contract and letter of commitment for confidentiality and copyrights to regulate employees' work ethics.

  2. The code was implemented after being approved by the Board, submitted to supervisors, and reported to the shareholders' meeting; the same shall apply upon any amendment.

138

Attachment 3

Code of Ethical Conduct

Article 1 Purpose of and basis for adoption

  • To establish a favorable behavioral model to align with ethical standards and allow all stakeholders to learn more about the corporate ethical specifications of the Company, the code was established according to Article 1 of the "Guidelines for the Adoption of Codes of Ethical Conduct for TWSE/GTSM Listed Companies."

  • Article 2 The code includes the following eight items

  • (I) Prevention of conflicts of interest: Conflicts of interest occur when personal interest intervenes or is likely to intervene in the overall interest of the Company, for example, when a Director, supervisor, or manager of the Company is unable to perform its duties in an objective and efficient manner or when a person in such a position takes advantage of their position in the Company to obtain improper benefits for either themselves or their spouse, parents, children, or relatives within the third degree of kinship. The Company shall pay special attention to loans of funds, provisions of guarantees, and major asset transactions or the purchase (or sale) of goods involving the affiliated enterprise at which a Director, supervisor, or managers. The Company shall establish a policy aimed at preventing conflicts of interest and shall offer appropriate means for Directors, supervisors, and managers to voluntarily explain whether there is any potential conflict between them and the Company.

  • (II) Minimizing incentives to pursue personal gain: The Company shall prevent its Directors, supervisors, or managers from engaging in any of the following activities: (1) seeking an opportunity to pursue personal gain by using the Company's property or information or taking advantage of their positions; (2) obtaining personal gain by using the Company's property or information or taking advantage of their positions; (3) competing with the Company. When the Company has an opportunity for profit, it is the responsibility of the Directors, supervisors, and managers to maximize the reasonable and proper benefits that can be obtained by the Company.

  • (III) Confidentiality

The Directors, supervisors, and managers of the Company shall be bound by the obligation to maintain the confidentiality of any information regarding the Company itself or its suppliers and customers, except when authorized or required by law to disclose such information. Confidential information includes any undisclosed information that, if exploited by a competitor or disclosed, could result in damage to the Company or the suppliers and customers.

  • (IV) Fair trade:

Directors, supervisors, and managers shall treat all suppliers and customers, competitors, and employees fairly and may not obtain improper benefits through manipulation, nondisclosure, or misuse of the information learned by virtue of their positions or misrepresentation of important matters or through other unfair trading practices.

  • (V) Safeguarding and proper use of company assets: All Directors, supervisors, and managers have the responsibility to safeguard the Company's assets and to ensure that they can be effectively and lawfully used for official business purposes; any theft, negligence in care, or waste of the assets will directly impact the Company's profitability.

  • (VI) Legal compliance:

Except for strengthening its compliance with the Securities and Exchange Act and other applicable laws, regulations, and bylaws, the Company shall otherwise establish a code of conduct for employees to regulate the behaviors of employees.

  • (VII)Encouraging reporting on illegal or unethical activities:

  • The Company shall raise awareness of ethics internally and encourage employees to report to a supervisor, manager, chief auditor, or other appropriate individuals upon suspicion or discovery of any activity in violation of a law or regulation or the code of ethical conduct. To encourage employees to report illegal conduct, the Company has established relevant procedures and systems and made employees aware that the Company will use its best efforts to ensure the safety of informants and protect them from reprisals.

139

(VIII) Disciplinary measures:

When a Director, supervisor, or manager violates the Code of Ethical Conduct, the Company shall handle the matter in accordance with the disciplinary measures prescribed in the code, and shall immediately disclose on the MOPS the date of the violation by the violator, reasons for the violation, the provisions of the code violated, and the disciplinary actions that are taken. The Company has established relevant complaint systems to provide the violator with remedies.

  • Article 3 Procedures for exemption

The Code of Ethical Conduct adopted by the Company shall state any exemption for Directors, supervisors, or managers from compliance with the code be adopted by a resolution of the Board, and state the titles and names of those who were exempted, the date on which the Board approved the exemption, the application period of the exemption, reasons for the applicability of the exemption, and information on the applicable exemption standards shall be disclosed on MOPS within 2 days.

Article 4 Method of disclosure

The code will be disclosed in the Company's annual report, prospectus, and on MOPS; the same shall apply upon any amendment.

Article 5 Implementation

The code was implemented after being approved by the Board, submitted to supervisors, and reported to the shareholders' meeting; the same shall apply upon any amendment.

140

Attachment 4

Regulations for Employees' Complaints

Article 1 Purpose

To protect the legal interest of employees and assist individuals in solving difficulties, the Company provides smooth communication channels to solve problems encountered by employees for work and life in the hope of improving labor-capital harmony.

Article 2 Applicable targets

Apply to employees of the Company or service targets of employees.

Article 3 Scope of application

  • I. In the case when the results of rewards/punishments, evaluation, re-allocation, and other matters of an employee harm the individual's legal interest or result in dissenting opinions.

  • II. Sexual harassment complaint cases.

  • III. In the case when the current management rules, systems, administrative measures, or work requirements harm the individual's legal interest.

  • IV.Other matters related to official business affairs that affect the individual's legal interest.

Article 4 Procedures for complaint cases

  • I. Sexual harassment complaint cases:

  • (I) For the complaint of sexual harassment, complete the "Employee's Complaint Form" (Attachment 1) and file the complaint with the responsible acceptance department for complaints; the direct line is 2001, and the complaint may also be filed verbally or in writing.

  • (II) For a sexual harassment complaint filed verbally, the acceptance department or personnel shall complete the "Employee's Complaint Form" for recording and read out loud or allow the whistleblower to read it, confirm the content is free of mistakes, and sign or affix its seal. If there is any proxy involved, a power of attorney shall be enclosed when filing the complaint to the acceptance department.

  • (III) After the acceptance department receives the complaint, it may hand over the complaint case to the complaint handling/investigation department, when necessary; during the course of the investigation, the privacy and other legal interests of the personality of the party involved shall be protected, and the investigation shall be undisclosed.

  • (IV) When handling a sexual complaint case, the complaint handling/investigation department may notify the party involved and related parties to provide descriptions in person and provide the opportunity for the parties involved to provide comprehensive descriptions. Also, it shall guarantee that the whistleblower will not suffer from any revenge or other unfavorable treatments. When necessary, persons with relevant knowledge and experience may be invited.

  • (V) The complaint handling/investigation department shall determine whether to establish or reject the complaint case and provide recommendations to impose punishments or other disposals. For the decision above, the "Complaint Response Form" (Attachment 2) shall be used to notify the whistleblower and the counterparty of the complaint; the results of the decision shall be submitted to the chief decision-making director for sign-off for approval, and the HR department shall impose the punishments according to the requirements or relevant departments shall execute relevant matters. When the case is rejected, both parties involved shall be notified, and the Company shall re-state its stance of banning sexual harassment.

  • (VI) A complaint case shall be closed within three months from the filing. If the whistleblower or the counterparty of the complaint has any dissenting opinion against the decision of the complaint case, they may propose a reconsideration petition within 10 days. After the case is closed, no complaint shall be filed for the same subject.

  • (VII)The whistleblower may rescind the complaint during the consideration period; the rescind method shall be in writing. After it is delivered to the complaint handling/investigation department, the case shall be closed and archived for future reference, and no complaint shall be filed for the same subject.

141

  • (VIII) If there is any risk that personnel of the complaint handling/investigation department may involve in the complaint matter if there are other matters sufficient for considering that they may be biased, such personnel shall recuse themselves, and parties involved may also request for their recusal. Their recusal shall be subject to the decision made by the complaint handling/investigation department.

  • (IX) Personnel participating in the investigation and the consideration shall be responsible for the confidentiality of the complaint case. For any violation, the complaint handling/investigation department may immediately terminate their participation and impose punishments according to the requirements.

  • (X)For any of the following circumstances, the complaint handling/investigation department may determine to postpone the investigation and consideration:

  • (1) When the whistleblower proposes a request.

  • (2) When the sexual harassment case has entered judicial procedures or is transferred to the Control Yuan for investigation or the civil servant disciplinary committee for review and discussion.

  • (3) Other matters that require the postponement of the investigation and consideration.

  • II. Other complaints:

  • (I) For any petition or complaint of an employee shall complete the "Employee's Complaint Form" in person or via its proxy and enclose relevant data and evidence, and submit them to the director of the Administration Department.

  • (II) After the director of the Administration Department has received the complaint case, it shall investigate the truth. If any disposal is required, it shall coordinate with relevant directors to manage. If involving other departments, it shall actively negotiate and discuss the disposal with such departments. Also, it shall communicate with the parties involved within two months from the receipt of the case and inform them of the handling results or handling methods and progress.

  • (III) Upon the closure of the complaint case, the director of the Administration Department shall make a response to the whistleblower by using the "Complaint Response Form" (Attachment 2) If a whistleblower has any dissenting opinion against the handling results, it may complete another "Employee's Complaint Form" within 10 days from the receipt of the response, propose a new cause or new evidence, and apply for a review with the director of the Administration Department; the application for a review is up to one time.

  • (IV) During the handling process of the complaint case, parties involved in the complaint and relevant personnel who are responsible for handling the case shall not make any disclosure, and they shall be responsible for confidentiality; arrangements will be made according to human affairs rules for any violation. Parties involved in the complaint and relevant personnel are obliged to accept inquiries and faithfully provide responses and relevant information.

  • (V) Any complaint made anonymous or if the party is not the person involved, or any complaint not filed according to the regulations will not be accepted. Any false accusation, concealment, assault, or intentional interference will not be accepted, and arrangements will be made according to relevant rules.

Article 5 The regulations were implemented after being approved by the President; the same shall apply upon any amendment.

Article 6 Attachment:

Attachment 1: Employee's Complaint Form Attachment 2: Attachment 2: Complaint Response Form

142

Attachment 5

Procedures for Protection of Personal Data

  1. To comply with the implement personal data management, maintenance, and execution as stated in the Personal Data Protection Act (the "Act") and its implementation rules, Regulations for Personal Data File Safety and Maintenance for Non-governmental Agencies Designated by the FSC, and other laws and regulations related to personal data protection, the Company has established the procedures, and the application scope involves the Company and its subsidiaries.

  2. Personal data in the procedures refers to the name, date of birth, national ID No., passport No., characteristics, fingerprint, marital status, educational background, occupation, medical history, medication, gene, sexual life, health inspection, criminal record, contact methods, financial status, social activities of a natural person or other data that may directly or indirectly identify the individual.

  3. The Company shall establish and implement a personal data protection and safety management system and identify internal and external stakeholders to ensure the operation and implementation of personal data protection management.

  4. The Company shall measure the reasonable allocation of the management resources and allocate management personnel and relevant resources to plan for, establish, amend, and execute its personal data file safety maintenance plan and the handling method of personal data after the termination of the operation; the CEO is authorized to approve such specifications for implementation.

  5. The administration section of the Company is designated as the responsible department to accurately define the powers and responsibilities of departments related to personal data protection and promote and examine the protection and management of personal data to comply with the requirements under the Act and relevant laws and regulations.

  6. The Company shall collect, process, and use personal data within the scope of particular purposes by adopting reasonable and safe methods under the backdrop of legal organization operations and businesses.

  7. The Company shall establish and protect personal data files and make updates based on the requirements to ensure the accuracy and completeness of personal data.

  8. The Company shall establish the judging standards for the level of risk of personal data files to specify the acceptable risk value of personal data files and establish a relevant preservation period to comply with the requirements under the Act and relevant laws and regulations.

  9. The Company shall protect the personal data files collected, processed, and used by the Company by using reasonable safety technologies expected and establishing various information and data safety management measures, including advertisements, marketing, supplies, orders, or delivery of relevant products or services via general business activities or the Internet, and other business transactions.

  10. 10.The Company designates the Human Resources Department as the contact for personal data for parties involved to exercise their rights related to their personal data or file complaints and make consultations.

  11. 11.In response to the theft, alteration, damage, losses, leakage, or other safety incidents of personal data, the Company shall establish a complete response, reporting, and prevention system, and the content shall include response measures to be adopted after the occurrence of incidents, targets required to be reported, the reporting methods, and the discussion system for the corrective and preventive measures.

  12. 12.When consigning the collection, processing and use of personal data, the Company shall duly monitor the consigned party, specify the information safety responsibilities and confidentiality requirements of the consigned party and include them in the contract, and require the consigned party to observe and perform regular audits. The Company shall be equipped with an appropriate and sufficient transmission system to ensure the safety of personal data during domestic/overseas transmissions. The Company shall organize promotion and educational training for the awareness of its employees regarding personal data regularly to allow them to understand the requirements of relevant laws and regulations, the scope of responsibility of employees, and the systems, procedures, and measures of personal data protection matters.

  13. 13.To ensure the implementation of the personal data protection safety management system, the Company shall establish an appropriate personal data safety audit system and relevant record preservation systems.

  14. 14.The Company shall continue to implement and improve the personal data protection safety management system to ensure the safety of personal data files. The Audit Office shall carry out personal data protection management audits from time to time, and the CEO is authorized to approve the execution results; if there is any significant deficiency, it shall be reported to the Board.

  15. 15.The procedures were approved for implementation by the Board on October 30, 2014

143

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

144

§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

145

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

146

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.

147

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

Revenue recognition

  1. 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.

  2. 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.

148

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:

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

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

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

  4. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a

149

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.

  1. 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.

  2. 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.

150

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.

151

Loop Telecommunication International, Inc. and its subsidiaries

Consolidated Balance Sheet

December 31, 2023 and 2022

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		 (In Thousands of New Taiwan Dollars)
December31,2023
December31,2022
Amount
％
Amount
％
$ 269,074
21
$ 361,283
34
10,541
1
33,546
3
103,169
8
15,773
1
233
-
32,776
3
230,989
18
41,771
4
1,419
-
1,150
-
374,974
29
312,977
29
7,953

1

2,934

-
998,352

78

802,210

74
12,056
1
12,026
1
153,385
12
146,206
14
45,576
4
42,591
4
30,719
2
31,858
3
4,560
-
8,638
1
6,439
-
5,713
-
32,911
3
30,212
3
1,427

-

-

-
287,073

22

277,244

26
$ 1,285,425
100
$ 1,079,454
100
$ 192,000
15
$ -
-
4,561
-
3,002
-
35,455
3
29,638
3
82,768
6
59,150
5
48,424
4
9,235
1
2,256
-
1,159
-
-
-
1,936
-
9,758

1

30,462

3
375,222

29

134,582

12
945
-
3,455
-
50,329
4
48,109
5
-
-
16,731
2
1,493
-
1,190
-
14,242

1

23,304

2
67,009

5

92,789

9
442,231

34

227,371

21
567,365

44

709,206

66
43,953

4

48,208

4
26,563
2
19,174
2
2,786
-
3,088
-
205,278

16

75,193

7
234,627

18

97,455

9

2,751)

-
(
2,786)

-
843,194

66

852,083

79
$ 1,285,425
100
$ 1,079,454
100		 (In Thousands of New Taiwan Dollars)
December31,2023
December31,2022
Amount
％
Amount
％
$ 269,074
21
$ 361,283
34
10,541
1
33,546
3
103,169
8
15,773
1
233
-
32,776
3
230,989
18
41,771
4
1,419
-
1,150
-
374,974
29
312,977
29
7,953

1

2,934

-
998,352

78

802,210

74
12,056
1
12,026
1
153,385
12
146,206
14
45,576
4
42,591
4
30,719
2
31,858
3
4,560
-
8,638
1
6,439
-
5,713
-
32,911
3
30,212
3
1,427

-

-

-
287,073

22

277,244

26
$ 1,285,425
100
$ 1,079,454
100
$ 192,000
15
$ -
-
4,561
-
3,002
-
35,455
3
29,638
3
82,768
6
59,150
5
48,424
4
9,235
1
2,256
-
1,159
-
-
-
1,936
-
9,758

1

30,462

3
375,222

29

134,582

12
945
-
3,455
-
50,329
4
48,109
5
-
-
16,731
2
1,493
-
1,190
-
14,242

1

23,304

2
67,009

5

92,789

9
442,231

34

227,371

21
567,365

44

709,206

66
43,953

4

48,208

4
26,563
2
19,174
2
2,786
-
3,088
-
205,278

16

75,193

7
234,627

18

97,455

9

2,751)

-
(
2,786)

-
843,194

66

852,083

79
$ 1,285,425
100
$ 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
















(















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

152

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

153

(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.

154

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.

155

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)

156

(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.

157

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”

158

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 application,

159

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:

  1. Level 1 input: Refer to quotations (unadjusted) of equivalent assets or liabilities available in the active market on the measurement date.

  2. 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

  3. Level 3 input: Refer to unobservable inputs of assets or liabilities.

  4. (III) Classification of current and non-current assets and liabilities

Current assets include:

  1. Assets held primarily for the purpose of trading;

  2. Assets expected to be realized within 12 months after the balance sheet date; and

  3. Cash and cash equivalents (excluding those restricted for being used for exchange or settling liabilities over 12 months after the balance sheet date).

  4. Current liabilities include:

  5. Liabilities held primarily for the purpose of trading;

160

  1. 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

  2. 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 noncurrent 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.

161

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.

162

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.

  1. 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 cash-generating

163

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.

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

164

  • 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.

165

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.

  1. 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.

  1. Financial liabilities

  2. (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.

166

(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.

  1. 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.

  1. Service revenue

  2. Service revenue arises from educational training services and

  3. 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.

  1. 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.

167

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.

  2. 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 the

168

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 nondiscounted amount expected to be paid in exchange for employees’ services.

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

169

3. 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.

  1. 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.

  1. 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 those not recognized as deferred income tax assets initially, the Company also re-examines them on each balance sheet date and increases their carrying

170

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.

  1. 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.

171

(II) Inventory impairment

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: 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

172

VIII. Financial assets at amortized costs

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

173

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

174

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%

175

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		 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

(


(

(



(










 $ 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
 $ 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.

176

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 that

177

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

  2. (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:

178

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)

179

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

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

180

- 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

181

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:

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

182

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)

183

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”:

  1. 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.

  2. 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.

  3. 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:

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:

184

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.

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.
(I)		 Equity

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 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.

185

(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 make the resolution. Distribution of shareholders' dividends/bonuses may be made in shares

186

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 paidin 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:

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

(V) Other Components of Equity

Exchange differences on translation of foreign operations

187

XXI. Beginning balance
Generated during the year
Translation difference of
foreign operations
Ending balance
Net revenue
Revenue from contracts with customers
Income from product sales
Service revenue		 2023
2,786 )
35
2,751)
2023
$ 601,439
47,658
$ 649,097		 2022



( $
($		 (

(		 $ 3,088 )
302
$ 2,786)
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.

  1. 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:

188

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

189

(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:

190

Estimated ratio
2023
Remuneration of employees
10%
Directors' remuneration
2%
Amount
2023
Cash
Shares
Remuneration of
employees
$ 28,042
$ -
Directors'
remuneration
5,608
-		 2023 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)

191

(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 income and income tax expenses is as follows:

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

(II) Tax liability

(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)

192

(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

arnings per share
Basic earnings per share
Diluted earnings per share		 (In New Taiwan Dollars per share)
2023
2022
$ 3.00
$ 0.95
$ 2.97
$ 0.94


$ 0.95
$ 0.94

193

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.

194

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


cember 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.

195

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.

  1. 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.

The following table describes the sensitivity analysis of the Company when the exchange rate of the functional currency appreciates and

196

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

The following sensitivity analysis is based on the risk exposure to the interest rates risk of non-derivative instruments on the balance sheet date.

197

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.

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

198

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.

  1. 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.

199

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)

200

(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

201

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)

202

(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,

203

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)

  1. 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).

  2. (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.

204

(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:

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.

205

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.

206

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.

207

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..

208

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.

209

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.

210

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.

211

Stock Code: 3025

Loop Telecommunication International, Inc.

Parent Company Only 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

212

§Table of Contents§

Item
I.
Cover
II.
Table of Contents
III.
Independent Auditors’ Report Translated
from Chinese
IV.
Parent Company Only Balance Sheet
V.
Parent Company Only Statement of
Comprehensive Income
VI.
Parent Company Only Statement of Changes
in Equity
VII. Parent Company Only Statement of Cash
Flows
VIII. Notes to the Parent-Only 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) Disclosuresnotes
1. Information on
significant transactions
2. Information on investees
3. Information on investments in
Mainland China
4. Information on major shareholders
(XIV) Segment information
IX.
Breakdown of Major Accounting Items		 Pages
1
2
3～6
7
8～9
10
11～12
13
13
13～14
14～25
25
25～50
50～52
52
-
-
-
52～53
53～55
54、56
54、57～58
54、59
-
60～72		 Notes to the
Financial Statements
-
-
-
-
-
-
-
1
2
3
4
5
6 to 26
27
28
-
-
-
29
30
30
30
30
-
-

213

Independent Auditors’ Report Translated from Chinese

Opinion

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

In our opinion, the accompanying parent company only financial statements present fairly, in all material respects, the accompanying parent company only financial position of the Company as of December 31, 2023 and 2022, and its parent company only financial performance and its parent company only cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for opinion

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

Key Audit Matters

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

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

214

Revenue recognition

  1. The major revenue sources of 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 parent company only 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 parent company only financial statements.

  2. 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.

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

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

In preparing the parent company only financial statements, management is responsible for assessing the 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 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.

215

Auditors' Responsibilities for the Audit of the Parent Company Only Financial Statements

Our objectives are to obtain reasonable assurance about whether the parent company only financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an 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 the parent company only financial statements.

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

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

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

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

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

216

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

  2. Obtain sufficient and appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinions on the parent company only 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 determine those matters that were of most significance in the audit of the parent company only 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.

217

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.

218

Loop Telecommunication International, Inc.

Parent Company Only Balance Sheet December 31, 2023 and 2022

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)
Accounts receivable - related party (Notes 4, 5, and 27)
Other receivables (Notes 4, 9 and 27)
Inventories (Notes 4, 5, and 10)
Other current assets (Notes 16 and 27)
Total current assets
Non-current assets
Financial assets at amortized cost - non-current (Notes 4, 8, and 28)
Investments accounted for using equity method (Notes 4 and 11)
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
Accounts payable - related party (Note 27)
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
Other 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		 (In Thousands of New Taiwan Dollars)
December 31,2023
December 31,2022
Amount
％
Amount
％
$ 264,406
21
$ 355,599
33
10,541
1
33,546
3
103,169
8
15,773
2
233
-
32,776
3
230,989
18
41,771
4
-
-
201
-
1,835
-
886
-
372,867
29
310,379
29
12,730

1

7,541

1
996,770

78

798,472

75
12,056
1
12,026
1
565
-
1,145
-
149,883
12
142,313
13
43,608
3
40,543
4
30,719
2
31,858
3
4,560
-
8,638
1
6,439
1
5,713
-
32,911
3
30,212
3
1,427

-

-

-
282,168

22

272,448

25
$ 1,278,938
100
$ 1,070,920
100
$ 192,000
15
$ -
-
4,561
-
3,002
-
34,839
3
29,581
3
4,004
-
1,775
-
72,977
6
49,032
5
48,424
4
9,235
1
2,256
-
1,159
-
-
-
1,936
-
9,674

1

30,328

3
368,735

29

126,048

12
945
-
3,455
-
50,329
4
48,109
4
-
-
16,731
2
1,493
-
1,190
-
14,242

1

23,304

2
67,009

5

92,789

8
435,744

34

218,837

20
567,365

44

709,206

66
43,953

4

48,208

5
26,563
2
19,174
2
2,786
-
3,088
-
205,278

16

75,193

7
234,627

18

97,455

9
2,751)

-
(
2,786)

-
843,194

66

852,083

80
$ 1,278,938
100
$ 1,070,920
100		 (In Thousands of New Taiwan Dollars)
December 31,2023
December 31,2022
Amount
％
Amount
％
$ 264,406
21
$ 355,599
33
10,541
1
33,546
3
103,169
8
15,773
2
233
-
32,776
3
230,989
18
41,771
4
-
-
201
-
1,835
-
886
-
372,867
29
310,379
29
12,730

1

7,541

1
996,770

78

798,472

75
12,056
1
12,026
1
565
-
1,145
-
149,883
12
142,313
13
43,608
3
40,543
4
30,719
2
31,858
3
4,560
-
8,638
1
6,439
1
5,713
-
32,911
3
30,212
3
1,427

-

-

-
282,168

22

272,448

25
$ 1,278,938
100
$ 1,070,920
100
$ 192,000
15
$ -
-
4,561
-
3,002
-
34,839
3
29,581
3
4,004
-
1,775
-
72,977
6
49,032
5
48,424
4
9,235
1
2,256
-
1,159
-
-
-
1,936
-
9,674

1

30,328

3
368,735

29

126,048

12
945
-
3,455
-
50,329
4
48,109
4
-
-
16,731
2
1,493
-
1,190
-
14,242

1

23,304

2
67,009

5

92,789

8
435,744

34

218,837

20
567,365

44

709,206

66
43,953

4

48,208

5
26,563
2
19,174
2
2,786
-
3,088
-
205,278

16

75,193

7
234,627

18

97,455

9
2,751)

-
(
2,786)

-
843,194

66

852,083

80
$ 1,278,938
100
$ 1,070,920
100		 (In Thousands of New Taiwan Dollars)
December 31,2023
December 31,2022
Amount
％
Amount
％
$ 264,406
21
$ 355,599
33
10,541
1
33,546
3
103,169
8
15,773
2
233
-
32,776
3
230,989
18
41,771
4
-
-
201
-
1,835
-
886
-
372,867
29
310,379
29
12,730

1

7,541

1
996,770

78

798,472

75
12,056
1
12,026
1
565
-
1,145
-
149,883
12
142,313
13
43,608
3
40,543
4
30,719
2
31,858
3
4,560
-
8,638
1
6,439
1
5,713
-
32,911
3
30,212
3
1,427

-

-

-
282,168

22

272,448

25
$ 1,278,938
100
$ 1,070,920
100
$ 192,000
15
$ -
-
4,561
-
3,002
-
34,839
3
29,581
3
4,004
-
1,775
-
72,977
6
49,032
5
48,424
4
9,235
1
2,256
-
1,159
-
-
-
1,936
-
9,674

1

30,328

3
368,735

29

126,048

12
945
-
3,455
-
50,329
4
48,109
4
-
-
16,731
2
1,493
-
1,190
-
14,242

1

23,304

2
67,009

5

92,789

8
435,744

34

218,837

20
567,365

44

709,206

66
43,953

4

48,208

5
26,563
2
19,174
2
2,786
-
3,088
-
205,278

16

75,193

7
234,627

18

97,455

9
2,751)

-
(
2,786)

-
843,194

66

852,083

80
$ 1,278,938
100
$ 1,070,920
100		 (In Thousands of New Taiwan Dollars)
December 31,2023
December 31,2022
Amount
％
Amount
％
$ 264,406
21
$ 355,599
33
10,541
1
33,546
3
103,169
8
15,773
2
233
-
32,776
3
230,989
18
41,771
4
-
-
201
-
1,835
-
886
-
372,867
29
310,379
29
12,730

1

7,541

1
996,770

78

798,472

75
12,056
1
12,026
1
565
-
1,145
-
149,883
12
142,313
13
43,608
3
40,543
4
30,719
2
31,858
3
4,560
-
8,638
1
6,439
1
5,713
-
32,911
3
30,212
3
1,427

-

-

-
282,168

22

272,448

25
$ 1,278,938
100
$ 1,070,920
100
$ 192,000
15
$ -
-
4,561
-
3,002
-
34,839
3
29,581
3
4,004
-
1,775
-
72,977
6
49,032
5
48,424
4
9,235
1
2,256
-
1,159
-
-
-
1,936
-
9,674

1

30,328

3
368,735

29

126,048

12
945
-
3,455
-
50,329
4
48,109
4
-
-
16,731
2
1,493
-
1,190
-
14,242

1

23,304

2
67,009

5

92,789

8
435,744

34

218,837

20
567,365

44

709,206

66
43,953

4

48,208

5
26,563
2
19,174
2
2,786
-
3,088
-
205,278

16

75,193

7
234,627

18

97,455

9
2,751)

-
(
2,786)

-
843,194

66

852,083

80
$ 1,278,938
100
$ 1,070,920
100		 (In Thousands of New Taiwan Dollars)
December 31,2023
December 31,2022
Amount
％
Amount
％
$ 264,406
21
$ 355,599
33
10,541
1
33,546
3
103,169
8
15,773
2
233
-
32,776
3
230,989
18
41,771
4
-
-
201
-
1,835
-
886
-
372,867
29
310,379
29
12,730

1

7,541

1
996,770

78

798,472

75
12,056
1
12,026
1
565
-
1,145
-
149,883
12
142,313
13
43,608
3
40,543
4
30,719
2
31,858
3
4,560
-
8,638
1
6,439
1
5,713
-
32,911
3
30,212
3
1,427

-

-

-
282,168

22

272,448

25
$ 1,278,938
100
$ 1,070,920
100
$ 192,000
15
$ -
-
4,561
-
3,002
-
34,839
3
29,581
3
4,004
-
1,775
-
72,977
6
49,032
5
48,424
4
9,235
1
2,256
-
1,159
-
-
-
1,936
-
9,674

1

30,328

3
368,735

29

126,048

12
945
-
3,455
-
50,329
4
48,109
4
-
-
16,731
2
1,493
-
1,190
-
14,242

1

23,304

2
67,009

5

92,789

8
435,744

34

218,837

20
567,365

44

709,206

66
43,953

4

48,208

5
26,563
2
19,174
2
2,786
-
3,088
-
205,278

16

75,193

7
234,627

18

97,455

9
2,751)

-
(
2,786)

-
843,194

66

852,083

80
$ 1,278,938
100
$ 1,070,920
100		 (In Thousands of New Taiwan Dollars)
December 31,2023
December 31,2022
Amount
％
Amount
％
$ 264,406
21
$ 355,599
33
10,541
1
33,546
3
103,169
8
15,773
2
233
-
32,776
3
230,989
18
41,771
4
-
-
201
-
1,835
-
886
-
372,867
29
310,379
29
12,730

1

7,541

1
996,770

78

798,472

75
12,056
1
12,026
1
565
-
1,145
-
149,883
12
142,313
13
43,608
3
40,543
4
30,719
2
31,858
3
4,560
-
8,638
1
6,439
1
5,713
-
32,911
3
30,212
3
1,427

-

-

-
282,168

22

272,448

25
$ 1,278,938
100
$ 1,070,920
100
$ 192,000
15
$ -
-
4,561
-
3,002
-
34,839
3
29,581
3
4,004
-
1,775
-
72,977
6
49,032
5
48,424
4
9,235
1
2,256
-
1,159
-
-
-
1,936
-
9,674

1

30,328

3
368,735

29

126,048

12
945
-
3,455
-
50,329
4
48,109
4
-
-
16,731
2
1,493
-
1,190
-
14,242

1

23,304

2
67,009

5

92,789

8
435,744

34

218,837

20
567,365

44

709,206

66
43,953

4

48,208

5
26,563
2
19,174
2
2,786
-
3,088
-
205,278

16

75,193

7
234,627

18

97,455

9
2,751)

-
(
2,786)

-
843,194

66

852,083

80
$ 1,278,938
100
$ 1,070,920
100
Amount
$ 264,406
10,541
103,169
233
230,989
-
1,835
372,867
12,730

996,770

12,056
565
149,883
43,608
30,719
4,560
6,439
32,911
1,427

282,168

$ 1,278,938

$ 192,000
4,561
34,839
4,004
72,977
48,424
2,256
-
9,674

368,735

945
50,329
-
1,493
14,242

67,009

435,744

567,365

43,953

26,563
2,786
205,278

234,627

2,751)

843,194

$ 1,278,938
 Amount
$ 355,599
33,546
15,773
32,776
41,771
201
886
310,379
7,541

798,472

12,026
1,145
142,313
40,543
31,858
8,638
5,713
30,212
-

272,448

$ 1,070,920

$ -
3,002
29,581
1,775
49,032
9,235
1,159
1,936
30,328

126,048

3,455
48,109
16,731
1,190
23,304

92,789

218,837

709,206

48,208

19,174
3,088
75,193

97,455

2,786)

852,083

$ 1,070,920
 ％
















(































(















33
3
2
3
4
-
-
29
1
75
1
-
13
4
3
1
-
3
-
25
100
-
-
3
-
5
1
-
-
3
12
-
4
2
-
2
8
20
66
5
2
-
7
9
-
80
100

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

219

Loop Telecommunication International, Inc.

Parent Company Only 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, 21, and 27)

Cost of revenue (Notes 4, 10, 22, and
27)
Gross profit
Unrealized gross profit on sales with
subsidiaries (Note 4)
Realized 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

Share of losses of subsidiaries
accounted for using equity
method (Note 4)
Total non- operating income
and expenses		 2023 ％
100
32

68
-

68

8
7
23

38

30

2
6
-

-
-

8
 2022
％




















(
 100
46
54
-
54
10
9
31
50
4
1
8
7

-

1)
15

(Cont’d)

220

(Cont’d)

Income before income tax

Income tax expenses (Notes 4 and 23)
Net income

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 ％
38
7

31

-
-

-

31


 2022
Amount
$ 246,765

47,106

199,659

4,178
35

4,213

$ 203,872

$ 3.00
$ 2.97		 Amount
$ 83,403

16,000

67,403


6,487
302

6,789

$ 74,192

$ 0.95
$ 0.94		 ％

























19
4
15
2
-
2
17

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

221

Loop Telecommunication International, Inc.

Parent Company Only Statement of Changes in Equity

For the years ended December 31, 2023 and 2022

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 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		 (In Thousands of New
Retained earnings
Special reserve
Unappropriated
earnings
$ 3,005
$ 32,920
-
(
3,166 )
83
(
83 )
-
(
28,368 )
-
67,403

-

6,487

-

73,890
3,088
75,193
-
-
-
(
7,389 )
(
302 )
302
-
(
66,665 )
-
-
-
199,659

-

4,178

-

203,837
$ 2,786
$ 205,278		 Taiwan Dollars; unless specified otherwise)
Other Equity
Exchange
differences arising
on translation of
foreign operations
Total equity
( $ 3,088 )
$ 806,259
-
-
-
-
-
(
28,368 )
-
67,403

302

6,789

302

74,192
(
2,786 )
852,083
-
(
141,841 )
-
-
-
-
-
(
66,665 )
-
(
4,255 )
-
199,659

35

4,213

35

203,872
($ 2,751)
$ 843,194
Exchange
differences arising
on translation of
foreign operations
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





( $ 3,088 )
-
-
-
-

302

302
(
2,786 )
-
-
-
-
-
-

35

35
($ 2,751)

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

222

Loop Telecommunication International, Inc.

Parent Company Only 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

Net losses (gains) on financial assets at fair
value through profit or loss
Finance costs

Interest income

Dividend income

Allowance for inventory valuation and
obsolescence losses
Share of losses of subsidiaries accounted for
using the equity method
Unrealized gains on sales with subsidiaries

Net gains on foreign exchange

Changes in operating assets and liabilities

Contract assets

Accounts receivable (including those
from related parties)
Other receivables (including those from
related parties)
Inventories

Other current assets

Contract liabilities

Accounts payable (including those to
related parties)
Other payables

Net defined benefit assests and liability

Net defined benefit liability

Other non-current liabilities

Cash from operations

Interest paid

Income tax paid

Net cash generated by operating activities
 2023
$ 246,765



15,412

4,510
(
990 )

1,804
(
15,516 )

(
46 )

4,051
194

421


12,551



32,543
(
190,985 )
(
660 )
(
66,539 )

(
5,189 )

1,559
7,925


23,617
(
20,654 )
(
13,980 )

(
9,062)


27,731
(
1,555 )

(
11,153)


15,023
 2022
$ 83,403
14,688
3,658
508
1,228
(
4,016 )
(
43 )
3,876
3,341
(
978 )
(
25,977 )
116,099
88,190
2,585
(
18,743 )
4,123
1,890
(
13,377 )
10,967
29,688
(
4,930 )

23,304
319,484
(
1,228 )
(
9,367)

308,889

(Cont’d)

223

(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
(
19,297 )

(
2,699 )

(
432 )

15,272

46

(
70,541)

192,000
(
1,936 )

303

(
2,197 )

(
70,920 )

(
141,841)

(
24,591)

(
11,084)

(
91,193 )

355,599

$ 264,406
 2022
( $ 335,426 )
333,765
(
33,733 )
-
(
2,236 )
(
16,167 )
(
6,797 )
3,180

43
(
57,371)
-
(
2,289 )
(
83 )
(
2,308 )
(
28,368 )

-
(
33,048)

24,136
242,606

112,993
$ 355,599

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

224

Loop Telecommunication International, Inc.

Notes to the Parent-Only 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 parent company's only financial statements are presented in New Taiwan Dollars (NTD), which is the Company's functional currency.

II. Approval date and procedures of the financial statements

The parent company only 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 (the “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.

225

(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” 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 of approval for the publication of the parent company only financial statements, the Company has been continuing the evaluation of the amendments to the standards and interpretations above would not have a material effects on the financial positions and financial performance.

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

New, revised or amended Effective date issued standards and interpretations by IASB (Note 1) Amendments to IFRS 10 and IAS 28 “Sale or To be determined Contribution of Assets between An Investor and Its Associate or Joint Venture” IFRS 17 “Insurance Contracts” January 1, 2023 Amendment to IFRS 17 January 1, 2023 Amendments to IFRS 17 “Initial Application of IFRS January 1, 2023 9 and IFRS 17 -Comparative Information” Amendments to IAS 21 “Lack of Exchangeability” 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

226

balance of retained earnings. When the entity uses a presentation currency other than its functional currency, it shall, at the date of initial application, recognize any effect as an adjustment to the exchange differences on translation of foreign operations.

As of the date of approval for the publication of the parent company only financial statements, the Company has been continuing the evaluation regarding the effects of the amendments to standards and interpretations above on the financial positions and financial performance; relevant effects will be disclosed upon the completion of the evaluation.

IV. Summary of significant accounting policies

  • (I) Statement of compliance

The parent company only financial statements were prepared according to the Regulations Governing the Preparation of Financial Reports by Securities Issuers. (II) Basis of preparation

Except for financial instruments at fair value and net defined benefit liabilities recognized based on the presentt value of defined benefit obligations less the fair value of plan assets, the parent company only 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:

  1. Level 1 input: Refer to quotations (unadjusted) of equivalent assets or liabilities available in the active market on the measurement date.

  2. 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

  3. Level 3 input: Refer to unobservable inputs of assets or liabilities.

When preparing the parent company only financial statements, the Company adopts the equity method for the treatment of the subsidiaries it invested investment. To allow the profit or loss of the year, other comprehensive income, and equity in the parent company only financial statements to be equivalent to profit or loss of the year, other comprehensive income, and equity attributable to owners of the Company in the Company’s consolidated financial statements, “investments accounted for using the equity method,” “share of profit or loss of subsidiaries certain accounting differences accounted for using the equity method,” and relevant equity items are adjusted under the parent company only basis and consolidation basis.

227

  • (III) Classification of current and non-current assets and liabilities

Current assets include:

  1. Assets held primarily for the purpose of trading;

  2. Assets expected to be realized within 12 months after the balance sheet date; and 3. 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:

  1. Liabilities held primarily for the purpose of trading;

  2. 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

  3. 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) Foreign currency

When preparing the parent company only financial statements, transactions in currencies other than the functional currency of the Company (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.

228

(V)

When preparing the parent company only financial statements, assets and liabilities of the Company’s foreign operations (including subsidiaries in different countries or using currencies different from the Company) 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. 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.

  • (VI) Investments in subsidiaries

The Company adopts the equity method for treating investments in subsidiaries. Subsidiaries are entities the Company has control over.

Under the equity method, investments are initially recognized at costs, and the carrying amount after the acquisition increases/decreases in the share of profit or loss of subsidiaries and other comprehensive income and profit allocation entitled to the Company. In addition, changes in other equity of subsidiaries entitled to the Company are recognized based on the shareholding ratio.

Changes in the Company's ownership interest in a subsidiary that do not result in loss of control are treated as equity transactions. The carrying amount of investments and the differences between the fair value of considerations paid or received are directly recognized as equity.

If the share of loss of subsidiaries of the Company equals or exceeds the interests in such subsidiaries (including the carrying amount of subsidiaries under the equity method and other long-term equity of net investment components in such subsidiaries that is substantially attributable to the Company), it continues to recognize losses based on the shareholding ratio.

When assessing impairment, the Company considers cash-generating units and compares their recoverable amount and carrying amount for the financial statements as a whole. Subsequently, if the recoverable amount of assets increases, the reversal

229

of impairment losses is recognized as gains; however, the carrying amount of assets after the reversal of impairment losses shall not exceed the carrying amount of such assets less amortization that should be provided when no impairment loss is recognized. The impairment losses attributable to goodwill may not be reversed subsequently.

Unrealized profit or loss of downstream transactions between the Company and subsidiaries are eliminated in the parent company only financial statements. Profit or loss arising from upstream and side stream transactions between the Company and subsidiaries are recognized in the parent company only financial statements within the scope that are not related to the interest of the Company in subsidiaries.

(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.

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.

230

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.

  1. 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 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

231

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 parent company only 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.

1. 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 d4idends and remeasurement gains or losses are recognized in other income and other gains and losses, respect4ely. 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

232

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.

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

233

The Company derecognizes a financial asset 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.

  1. 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 by the Company are recognized at the amount after deducting direct issuance costs from the obtained proceeds.

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.

  1. Financial liabilities

  2. (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.

  • (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.

  1. 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

234

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.

  1. Service revenue

  2. Service revenue arises from educational training services and

  3. 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.

  1. 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.

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

235

2.

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 parent company only 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 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 parent company only balance sheet.

236

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

  1. 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.

  1. Income tax of the period

237

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.

  1. 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 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

238

the carrying amount of its assets and liabilities by the Company after the balance sheet date.

  1. 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.

239

(II) Inventory impairment

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

sh 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
$ 268
89,460
174,678
$ 264,406		 December 31,2022






$ 270
89,541
265,788
$ 355,599

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

sheet date is as follows: sheet date is as follows:
December 31,2023
Bank deposits
0.001%~1.45%
Time deposits
1.10%~5.21%
inancial 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

VII. Financial instruments at fair value through profit or loss

VIII. Financial assets at amortized costs

inancial 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

240

(I) The interest rate range of time deposits with an initial expiry exceeding 3 months and time deposits pledged is as follows:

time deposits pledged is as follows:
Time deposits with an initial
expiry exceeding 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
$ 1,835		 December 31,2022 December 31,2022

(
(

 $ 42,336

565)
$ 41,771
$ 886

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 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.

241

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 for
365 days
or above
$ 275

(
275)
$ -
 Total

(




(
(
(
 $ 231,554

565)
$ 230,989

December 31, 2022

Total carrying amount
Loss allowance
(lifetime ECL)

Amortized costs
 Current
$ 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 for
365 days
or above
$ 945

(
565)
$ 380
 Total









(
(
 $ 42,336

565)
$ 41,771

Changes in loss allowance of accounts receivable are as follows:

Balance at the beginning and the
end of the year		 2023
$ 565		 2022
$ 565

X. Inventories

Finished goods
Work in progress
Raw material		 December 31,2023
$ 70,616
43,465
258,786
$ 372,867		 December 31,2022
$ 79,748
39,077
191,554
$ 310,379		 December 31,2022
$ 79,748
39,077
191,554
$ 310,379



$ 79,748
39,077
191,554
$ 310,379

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
$ 199,543
4,051
$ 203,594

2022


$ 198,024
3,876
$ 201,900

242

XI. Investments accounted for using the equity method

Investments in subsidiaries
Tech-Plan (BVI) Ltd.
Loop Telecom NA, Inc.
Name of subsidiaries
Tech-Plan (BVI) Ltd.
Loop Telecom NA, Inc.		 December 31,2023
December 31,2022
$ 412
$ 992

153

153
$ 565
$ 1,145
Ownership interest and
votingrightpercentage		 December 31,2022


December 31,2023
100%
100%		 December 31,2022
100%
100%

For details of subsidiaries indirectly held by the Company, please refer to Note 30. In 2023 and 2022, the share of profit or loss and other comprehensive income of subsidiaries accounted for using the equity method is recognized based on the financial statements of the same period of subsidiaries audited by Accountants.

XII. Property, plant and equipment

Costs
Balance on January 1, 2023
Addition

Disposal

Balance on December 31,
2023
Cumulative depreciation
Balance on January 1, 2023
Depreciation

Disposal

Balance on December 31,
2023

Net amount on December
31, 2023

Costs

Balance on January 1, 2022
Addition

Disposal

Balance on December 31,
2022
Cumulative depreciation
Balance on January 1, 2022
Depreciation

Disposal

Balance on December 31,
2022

Net amount on December
31, 2022		 Buildings
$ 213,195
-
-
$ 213,195


$ 79,326
5,210
-
$ 84,536
$ 128,659
$ 213,195
-
-
$ 213,195


$ 74,130
5,196
-
$ 79,326
$ 133,869		 Machinery and
equipment		 Machinery and
equipment		 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
$ 542


820

-

$ 1,362

$ 324


124

-

$ 448

$ 914
$ 542


-

-

$ 542

$ 233


91

-

$ 324

$ 218		 Office
equipment
$ 5,206

1,287


2,462)

$ 4,031

$ 3,540

1,061


2,462)

$ 2,139


$ 1,892



$ 5,924

324


1,042)

$ 5,206

$ 3,449

1,133


1,042)

$ 3,540


$ 1,666
 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


























$ 5,073

5,231

(
1,640)

$ 8,664

$ 2,577

1,571
(
1,640)

$ 2,508

$ 6,156
$ 4,141

1,672
(
740)

$ 5,073

$ 2,217

1,100
(
740)

$ 2,577

$ 2,496

















(


(



(


(

(



(







(



(

(



(



(



(

 $ 239,103
19,394
10,638)
$ 247,859
$ 96,790
11,824
10,638)
$ 97,976
$ 149,883
$ 243,467
2,054

6,418)
$ 239,103
$ 92,166
11,042

6,418)
$ 96,790
$ 142,313

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

243

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

Buildings 11 to 51 years
Machinery and equipment 4 years
R&D equipment 4 years
Transportation equipment 6 years
Office equipment 4 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.

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
$ 39,195

4,413
$ 43,608
2023
$ 5,514
$ 1,348

1,101
$ 2,449
($ 598)		 December 31,2022




$ 40,543
-
$ 40,543
2022




(



(		 $ 1,217
$ 1,349
1,155
$ 2,504
$ 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.

244

(II) Lease liabilities

ase 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 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

(
(		 $ 57
$ 3,524)

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
 Completed
investment
properties
$ 39,159
 Right-of-use
assets
$ 7,969
 Total
$ 47,128

(Cont’d)

245

(Cont’d)

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
$ 14,259

899

$ 15,158
$ 24,001
$ 39,159

-

$ 39,159
$ 13,357

902

$ 14,259
$ 24,900		 Right-of-use
assets
$ 1,011

240

$ 1,251
$ 6,718
$ 7,937

32

$ 7,969
$ 771

240

$ 1,011
$ 6,958		 Total






























$ 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:

date are as follows:
Rental commitment of investment
properties		 December 31,2023
$ 11,981		 December 31,2022
$ 17,550

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

on a straight-line basis:
Completed investment properties 35 to 51 years
Right-of-use assets 20 years

246

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:

December 31, 2023 December 31, 2022 Fair value measurement $ 66,348 $ 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
Balance on December 31, 2023
Cumulative amortization
Balance on January 1, 2023
Amortization expense
Disposal
Balance on December 31, 2023
Net amount on December 31, 2023
Costs
Balance on January 1, 2022
Individually acquired
Disposal
Balance on December 31, 2022
Cumulative amortization
Balance on January 1, 2022
Amortization expense
Disposal
Balance on December 31, 2022
Net amount on December 31, 2022		 Software

(


(



(


(

 $ 15,465
432

2,828)
$ 13,069
$ 6,827
4,510

2,828)
$ 8,509
$ 4,560
$ 8,801
6,797

133)
$ 15,465
$ 3,302
3,658

133)
$ 6,827
$ 8,638

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

247

XVI. Other assets

Other assets
Current
Temporary payments
Prepayments for goods
Other prepayments
Overpaid sales tax
Prepaid insurance premium		 December 31,2023
$ 5,405
4,930
1,837
475

83
$ 12,730		 December 31,2022




$ 658
5,290
524
975
94
$ 7,541

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.

  • 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		 December 31,2023
$ 33,650
11,738
9,679
2,461
2,792
182
12,475
$ 72,977		 December 31,2022





$ 11,374
10,207
9,046
3,072
1,795
85
13,453
$ 49,032

(Cont’d)

248

(Cont’d)

Other liabilities
Advance (Note)
Receipts under custody
Others
Other non-current liabilities
Advance (Note)		 December 31,2023
$ 9,063
581

30
$ 9,674
$ 14,242		 December 31,2022 December 31,2022






$ 29,778
550
-
$ 30,328
$ 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

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

249

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 parent company only

balance sheet is set out as follows:

balance sheet is set out 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

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 payment
 ( 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

(Cont’d)

250

(Cont’d)

Net defined Net defined
Defined benefit Fair value of benefit liabilities
obligation plan assets (assets)
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 payment ( 5,017)
 5,017 -
December 31, 2023 $ 46,420
 ( $ 47,847) ( $
1,427)

The amount of the defined benefit plan recognized in profit or loss is summarized by function as follows:

by 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”:

  1. 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.

  2. 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

251

investment returns of plan assets will also increase; both items have partial offsetting effects on net defined benefit liabilities.

  1. 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:

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:

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.

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

252

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.

(II) Capital surplus

Capital surplus
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		 December 31,2023
$ 2,658
31,731
9,357

207
$ 43,953		 December 31,2022






$ 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.

253

(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 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 paidin 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.

254

On March 12, 2024, the proposal for the earning distribution of 2023 discussed by the Board is as follows:

by the Board is as 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
Special reserve
Beginning balance
(Reversal) Appropriation of special
reserve
Ending balance		 2023
$ 3,088

302)
$ 2,786		 2022

(

$ 3,005
83
$ 3,088
  • (V) Other Components of Equity Exchange differences on translation of foreign operations
XXI. Beginning balance
Generated during the year
Translation difference of
foreign operations
Ending balance
Net revenue
Revenue from contracts with customers
Revenue from product sales
Service revenue		 2023
( $ 2,786 )

35
($ 2,751)
2023
$ 601,038
47,658
$ 648,696		 2022
( $ 3,088 )

302
($ 2,786)
2022		 2022
( $ 3,088 )

302
($ 2,786)
2022




$ 402,949
35,285
$ 438,234

  • (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.

255

2. Service revenue

Partial contracts entered into with customers include educational training

services and software/hardware installation services.

(II) Contract balance

ontract 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







$ 129,573
$ 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:

Contract liabilities from the
beginning of the year
Sales of products		 2023
$ 2,650		 2022
$ 393
  • (III) Breakdown of revenue from contracts with customers
Breakdown of revenue from contracts with customers
Primary geographical markets
Europe
Taiwan
America
Asia (other than Taiwan)
Others
Major products
Optical transport network
access equipment
U interface and MDSL
interface multiplexer
Network management system
Internet access equipment
Time-slot interchanger
Others		 2023
$ 209,894
204,480
118,741
87,222
28,359
$ 648,696
$ 356,445
148,394
27,923
10,875
5,461
99,598
$ 648,696		 2022




















$ 85,562
107,240
101,558
102,028
41,846
$ 438,234
$ 236,872
132,501
7,003
3,039
3,582
55,237
$ 438,234

256

XXII. Net income
(I) Interest income
2023 2022
Bank deposits $ 15,516 $ 4,016
(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 1,167 575
$ 36,270 $ 35,576
(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 - ( 560)
$ 3,297 $ 31,530
(IV) Finance costs
2023 2022
Interest of lease liabilities $ 1,269 $ 1,159
Interest of bank borrowings 535 69
$ 1,804 $ 1,228
(V) Depreciation and amortization
2023 2022
Summary of depreciation
expenses by function
Operating cost $ 6,129 $ 5,281
Operating expenses 8,144 8,265
Other expenses 1,139 1,142
$ 15,412 $ 14,688

(Cont’d)

257

(Cont’d)

ont’d)
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
$ 557
3,953
$ 4,510
2023
$ 192,725
6,861
176
7,037
11,033
$ 210,795
$ 39,091
171,704
$ 210,795		 2022




$ 128
3,530
$ 3,658
2022














$ 163,185
6,558
220
6,778
6,898
$ 176,861
$ 33,277
143,584
$ 176,861

(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:

Estimated ratio

Estimated ratio
Remuneration of employees
Remuneration of Directors		 2023
10%
2%		 2022
10%
2%

258

Amount

Amount
Remuneration of
employees

Directors'
remuneration		 2023
Cash
Shares
$ 28,042 $ -
5,608
-		 2022
Cash Cash Shares
$ 28,042
5,608		 $ 9,478

1,896		 $ -

-

If there is any change in the amount after the approval date for the publication of the parent company only 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
$ 2,308		 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
Deferred income tax
Generated during the year
Income tax expenses recognized
in profit or losses		 2023
$ 49,908
-
434
50,342

3,236)
$ 47,106		 2022



(



$ 9,510
2
2,048
11,560
4,440
$ 16,000

259

The reconciliation of accounting income and income tax expenses is as follows:

2023 2022
Net income before tax $ 246,765 $ 83,403
Income tax expense calculated
at the statutory tax rate based
on net profit before tax $ 49,353 $ 16,681
Non-deductible items in
determining taxable income - 1,069
Tax-exempted income (
85 )		 (
9 )
Unrecognized deductible
temporary differences (
1,429 )		 283
Investment tax credits offset
during the period 63
(
1,167 )		 (
4,074 )
Additional tax on undistributed
earnings 63 - 2
Adjustments from prior years 434 2,048
Income tax expenses
recognized in profit or losses $ 47,106 $ 16,000
(II) Tax liability
December 31,2023 December 31,2022
Tax liability
Income tax payable $ 48,424 $ 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 exchange
losses
Others



Deferred income tax
liabilities
Temporary difference

Unrealized exchange gains		 Beginning
balance


$ 5,629

84

$ 5,713


Beginning
balance

$ 3,455
 Changes during
theyear


$ 810

(
84)

$ 726



Changes during
theyear


($ 2,510)
 Ending
balance








$ 6,439
-
$ 6,439
Ending
balance


(
$ 945

260

2022

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

$ 4,854

1,733

111

$ 6,698

Beginning
balance

$ -
 Changes during
theyear


$ 775

(
1,733 )
(
27)

($ 985)

Changes during
theyear


$ 3,455
 Ending
balance







$ 5,629

-
84
$ 5,713
Ending
balance



$ 3,455
  • (IV) Deductible temporary differences of deferred income tax assets not recognized in the parent company only balance sheet

December 31, 2023 December 31, 2022 Deductible temporary differences $ 55,878 $ 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

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		 2023
$ 199,659		 2022
$ 67,403

261

Shares

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		 Unit: thousand shares
2023
66,490
651
67,141		 2022




70,921
512
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 Company 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.

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

262

1. Fair value hierarchy

December 31, 2023

cember 31, 2023
Financial asset measured
at fair value through
profit or loss
Domestic listed stocks

Beneficiary certificates


cember 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
$ -

-

$ -
 Level 3
$ -

-

$ -

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
612,455
303,820		 December 31,2022
$ 33,546
426,256
82,324

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

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

263

(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.

1. Market risks

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 30.

Sensitivity analysis

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

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 Group for exchange rate risks is 1%, which also represents the scope of

264

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
$ 2,685(i)		 2022
$ 3,299(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		 December 31,2023
$ 278,503
52,585
100,496
192,000		 December 31,2022
$ 282,187
49,268
100,545
1,936

265

Sensitivity analysis

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 is expressed as the interest rate increases or decreases by 0.1% when reporting to the key management internally, which also represents the management's assessment of the reasonable and possible scope of change in interest rates.

With other variables remaining unchanged, if the interest rate increases/decreases by 0.1%, the net income before tax of the Company in 2023 and 2022 will increase/decrease by NT$92 thousand and NT$99 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.

  1. Credit risks

Credit risks refer to risks of financial losses of the Company 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 counterparties and the

266

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.

  1. 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 Company has not utilized any financing limit; please refer to the description of the financing limit in (3) 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 interest). 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.

267

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

69,161
289

-

$ 79,969
 1 to 3 months
$ 21,636

2,944
578

192,181

$ 217,339
 3 months to 1
year
$ 2,684

872
2,600

-

$ 6,156
 Over 1year
$ -

-
67,224

-

$ 67,224
 Total










$ 34,839
72,977
70,691

192,181
$ 370,688

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

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

-

-

-
$ 195,648
$ 12,680
$ 11,398
$ 11,398
December 31, 2022
Request of
instant payment
or less than 1
month
1 to 3 months
3 months to 1
year
Non-derivative
financial liabilities
Accounts payable
$ 11,239
$ 18,342
$ -

Other payables
3,152
41,435
4,445
Lease liabilities
190
380
1,711
Instruments at
floating interest
rates

195

391

1,368

$ 14,776
$ 60,548
$ 7,524
 Less than 1
year
 Less than 1
year
 1 to 5years 5 to 10
years		 10 to 15
years
$ 11,398

-

$ 11,398

Non-derivative
financial liabilities
Accounts payable

Other payables
Lease liabilities
Instruments at
floating interest
rates




December 31, 2022

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

268

(2) Financing limit

December 31, 2023 December 31, 2022

Non-secured bank
borrowing limits
Amount not utilized

Secured bank borrowing
limits (may be
extended with the
consent of both parties)
- Amount utilized

- Amount not utilized

 $ 20,000

$ 192,000

344,073

$536,073
 $ -
$ 1,936
352,875
$ 354,811

XXVII. Related party transactions

Transactions between the Company and its related parties are as follows:

  • (I) Names and relationships with related parties

Name of the related parties Relationship with the Company Tianjin Loop Technology Co.,Ltd Subsidiary Tianjin Loop Electron Technology Subsidiary Co., Ltd. Chongqing Loop Technology Co., Subsidiary Ltd. Loop Telecom NA, Inc Subsidiary

  • (II) Operating revenue
Operating revenue
Accountingitem

Operating revenue
 Type of relatedparties
Subsidiary
 2023
$ 704
 2022
$ 347
  • (III) Purchases
Purchases
Type of relatedparties
Subsidiary		 2023
$ 19,164		 2022
$ 11,441

The Company purchases from and sales to related parties without purchasing from other suppliers and sales to other customers as there is no market price available for comparison; the transacting price is determined by both parties with reference to the market status.

269

(IV) Amounts receivable from related parties

Accountingitem
Accounts receivable
(including those
from related
parties)

Other receivables
(including those
from related
parties)
 Type of relatedparties
Tianjin Loop
Technology Co.,Ltd

Tianjin Loop
Technology Co.,Ltd
 December 31,
2023
$ -

$ 695
 December 31,
2022		 December 31,
2022


$ 201
$ -

No guarantee is received for amounts due from related parties that are outstanding. In 2023 and 2022, no loss provision was made for amounts due from related parties.

(V) Prepayments for goods (accounted for as other current assets)

Accountingitem
Prepayments for
goods
 Type of relatedparties
Tianjin Loop
Technology Co.,Ltd
 December 31,
2023
$ 3,618
 December 31,
2022		 December 31,
2022
$ 5,244

(VI) Prepayments (accounted for as other current assets)

Prepayments (accounted for as other current assets)
Accountingitem
Type of relatedparties
December 31,
2023
Temporary payments Loop Telecom NA, Inc$ 31

Other prepayments (accounted for as other current assets)
Accountingitem
Type of relatedparties
December 31,
2023
Other prepaymentsTianjin Loop
Technology Co.,Ltd
$ 87

Chongqing Loop
Technology Co., Ltd

1,646

$ 1,733
 December 31,
2022
$ 31
December 31,
2022
$ 13

35
$ 48


(VII) Other prepayments (accounted for as other current assets)

(VIII) Amounts payable to related parties

Accountingitem
Accounts payable -
related parties

 Type of relatedparties
Chongqing Loop
Technology Co., Ltd.

Tianjin Loop
Technology Co.,Ltd

 December 31,
2023
$ 3,177


827

$ 4,004
 December 31,
2022		 December 31,
2022




$ 1,018
757
$ 1,775

No guarantee is provided for the balance of amounts payable to related parties that are outstanding.

270

(IX) Salary of the major management

Salary of the major management
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:
Time deposits pledged (accounted
for financial assets at amortized
costs - current)
Time deposits pledged (accounted
for financial assets at amortized
costs - non-current)
Property, plant and equipment and
investment properties
Refundable deposits		 December 31,2023
$ 101,627
12,056
22,560

32,911
$ 169,154		 December 31,2022








$ -
12,026
23,425
30,212
$ 65,663

XXIX. Assets and liabilities in foreign currencies of material effects

The following information is presented as a summary of foreign currencies other than the functional currency of 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:

271

Unit Foreign currencies/NT$ thousand

December 31, 2023

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
Liabilities in foreign
currencies
Monetary items
USD		 Foreign
currency
$ 9,354
21,367
105
943
$ 611
544
Foreign
currency
$ 11,232
1,257
155
104
489		 Exchange rate

30.705
0.217
39.150
4.327
30.705
4.327
Exchange rate

30.71
4.408
32.72
37.09
30.71		 Carryingamount
$ 287,215
4,641
4,111

4,080
$ 300,047
$ 18,761

2,354
$ 21,115
Carryingamount



$ 344,935
5,541
5,072
3,857
$ 359,405
$ 15,017

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

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

272

XXX. Disclosures notes

  • (I) Information on significant transactions:

  • Financings provided to others: None.

  • Endorsements and guarantees provided to others: None

  • Marketable securities held at the end of the period (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

(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, 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.

273

  • (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 5)

274

Loop Telecommunication International, Inc.

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
The Company
The Company
The Company
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 net assets of funds and 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.

275

Loop Telecommunication International, Inc.

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 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		 USD4,016 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.

276

Loop Telecommunication International, Inc.

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 Main business line Paid-in capital Method of
investment
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		 USD850 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		 USD600 thousand Note 1 USD300 thousand
( $ 9,212 )
Note 6		 - - USD300 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		 -
Ceiling on investments in Mainland China imposed by
the Investment Commission of the Ministry of
Economic Affairs is 60% of the net worth
$505,916
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..

277

Loop Telecommunication International, Inc.

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)

Investee in Mainland China Transaction category Purchases and sales Purchases and sales Transaction
conditions (Note)		 Notes and accounts
receivable(payable)		 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.

278

Loop Telecommunication International, Inc.

Information on major shareholders

December 31, 2023

Table 5

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 parent company only financial statements of the Company may differ from the actual number of shares delivered with non-physical registration completed due to 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.

279

§List of Major Accounting Items§

Item No./index
Breakdown of assets, liabilities, and equity items
Breakdown of cash and cash equivalents Breakdown 1
Breakdown of financial assets at fair value through Note 7
profit or loss - current
Breakdown of accounts receivable Breakdown 2
Breakdown of inventories Breakdown 3
Breakdown of other assets Note 16
Breakdown of changes in investments accounted for Breakdown 4
using the equity method
Breakdown of changes in property, plant and equipment Note 12
Breakdown of changes in right-of-use assets Breakdown 5
Breakdown of changes in investment properties Note 14
Breakdown of changes in intangible assets Note 15
Breakdown of deferred income tax assets Note 23 (3)
Breakdown of accounts payable Breakdown 6
Breakdown of other liabilities Note 18
Breakdown of lease liabilities Breakdown 7
Breakdown of long-term bank borrowings Breakdown 8
Breakdown of profit or loss items
Breakdown of operating revenue Breakdown 9
Breakdown of operating costs Breakdown 10
Breakdown of operating expenses Breakdown 11
Breakdown of financial costs Note 22 (4)
Summary of employee benefits and depreciation and Breakdown 12
amortization expenses that occurred during the
period by function

280

Loop Telecommunication International, Inc.

Breakdown of cash and cash equivalents

December 31, 2023

Breakdown 1

(In Thousands of New Taiwan Dollars)

Item
Bank deposits
Cash in hand and working capital
Subtotal
Transferred to financial assets at
amortized cost - current
(Note 3)
Transferred to financial assets at
amortized cost - non-current
(Note 4)
Total		 Summary
Time deposits (Note 1)
Deposits in foreign currency
(Note 2)
Demand deposit
Checking account deposits		 Amount
$ 289,903
60,370
28,726

364
379,363

268
379,631
( 103,169 )
(12,056)
$ 264,406

  • Note 1: Expired by July 2024 successively with an interest rate per annum ranging from 0.55% to 5.33%.

  • ＝

  • Note 2: Refer to approximately US$1,564 thousand (the exchange rate was US$1 NT$30.705), ＝

  • EUR$80 thousand (the exchange rate was EUR$1 NT$33.98), GBP$105 thousand (the ＝

  • exchange rate was GBP$1 NT$39.15) and other petty foreign currencies, including RMB and AUD.

  • Note 3: Time deposits with an initial expiry exceeding 3 months.

  • Note 4: Time deposits pledge with a bank as the collateral for the performance guarantee of the Company.

281

Loop Telecommunication International, Inc.

Breakdown of accounts receivable

December 31, 2023

Breakdown 2 (In Thousands of New Taiwan Dollars)

Client Name
Non-related party
Customer A
Customer B
Customer C
Customer D
Others (Note)
Less: loss allowance
Net amount		 Amount






(
 $ 101,490
51,318
36,224
24,857
17,665
231,554

565)
$ 230,989

Note: The balance of each customer has not exceeded 5% of the balance of the item.

282

Loop Telecommunication International, Inc.

Breakdown of inventories

December 31, 2023

Breakdown 3
Item
Finished goods
Work in progress
Raw material		 (In Thousands of New Taiwan Dollars)
Amount		 (In Thousands of New Taiwan Dollars)
Amount		 (In Thousands of New Taiwan Dollars)
Amount
Costs
$ 70,616
43,465
258,786
$ 372,867		 Net realizable value
(Note 2)






$ 199,746
128,647
264,318
$ 592,711

  • Note 1: The combined insurance amount of inventory and property, plant and equipment were NT$562,481 thousand.

  • Note 2: 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.

283

Loop Telecommunication International, Inc.

Breakdown of changes in investments accounted for using the equity method For the year ended December 31, 2023

Breakdown 4

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

Name of the investees
Tech-Plan (BVI) Ltd.
Loop Telecom NA, Inc.		 Beginningbalance
Shares
(In Thousands)
Amount
4,016
$ 992

5

153

$ 1,145
 Beginningbalance
Shares
(In Thousands)
Amount
4,016
$ 992

5

153

$ 1,145
 Investment
losses
recognized by
using the equity
method(Note 1)
( $ 194 )

-

($ 194)
 Amount of
translation
adjustments
$ 35

-

$ 35
 Others(Note 2)
( $ 421 )

-
($ 421)		 Endingbalance Amount
$ 412

153

$ 565
 Net value of
equity (Note 2)		 Net value of
equity (Note 2)
Shares
(In Thousands)
4,016

5

 Number of
shares (1,000
shares)

4,016
5		 Shareholding
(%)
100

100








$ 412
153
$ 565

Note 1: Calculated based on the financial statements audited by Accountants.

Note 2: Include the unrealized losses on sales of the year were NT$421 thousand.

284

Loop Telecommunication International, Inc.

Breakdown of changes in right-of-use assets For the year ended December 31, 2023

Breakdown 5

(In Thousands of New Taiwan Dollars)

Costs
Balance on January 1,
2023
Addition
Balance on December
31, 2023
Cumulative depreciation
Balance on January 1,
2023
Depreciation
Balance on December
31, 2023
Net amount on December 31,
2023		 Land
$ 46,267
-
$ 46,267
$ 5,724
1,348
$ 7,072
$ 39,195		 Buildings
$ 4,852
5,514
$ 10,366
$ 4,852
1,101
$ 5,953
$ 4,413		 Total


















$ 51,119
5,514
$ 56,633
$ 10,576
2,449
$ 13,025
$ 43,608

285

Loop Telecommunication International, Inc.

Breakdown of accounts payable

December 31, 2023

Breakdown 6 (In Thousands of New Taiwan Dollars)

Supplier
Accounts payable - related parties
Accounts payable - non-related parties:
WT Microelectronics
Qinyi Enterprise
Avnet
Kintech Electronics
Others (Note)
Total		 Amount



$ 4,004
9,905
2,386
2,335
2,045
18,168
34,839
$ 38,843

Note: The balance of each supplier has not exceeded 5% of the balance of the item.

286

Loop Telecommunication International, Inc.

Breakdown of lease liabilities

December 31, 2023

Breakdown 7

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

Name
Land
Building
Less: Lease liabilities -
current
Lease liabilities -
non-current		 Leasing period
1996.06~2026.12 and
2019.08~2038.12
2023.01~2027.12		 Discount rate

2.30%

2.93%

 Endingbalance Endingbalance

(
 $ 48,109
4,476

2,256)
$ 50,329

287

Loop Telecommunication International, Inc.

Breakdown of long-term bank borrowings December 31, 2023

Breakdown 8

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

Lenders
Bank borrowings
Yuanta
Commercial
Bank

Yuanta
Commercial
Bank

Yuanta
Commercial
Bank
 Summary
Borrowings
on pledge

Borrowings
on pledge

Borrowings
on pledge

 Borrowing
amount
$ 100,000
72,000
20,000
$ 192,000		 Contractperiod
2023.12.06~2024.01.
08
2023.12.06~2024.03.
04
2023.12.06~2024.01.
09		 Interest rate
range(%)
1.79

1.84

1.90
 Pledge or Guarantee


Financial assets at amortized
cost – current
Financial assets at amortized
cost – current
Property, plant and equipment

288

Loop Telecommunication International, Inc.

Breakdown of operating revenue

For the year ended December 31, 2023

Breakdown 9

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

Item
Optical transport network access equipment
U interface multiplexer and MDSL
interface multiplexer
Network management system
Internet access equipment
Time-slot interchanger
Others
Total		 Quantity
(thousand machines)
14
14
2
-
-
18		 Amount





$ 356,445
148,394
27,923
10,875
5,461
99,598
$ 648,696

289

Loop Telecommunication International, Inc.

Breakdown of operating costs

For the year ended December 31, 2023

Breakdown 10

(In Thousands of New Taiwan Dollars)

Item
Raw material
Raw materials at the beginning of the
year
Purchase of materials during the year
Other outward transfers
Raw materials at the end of the year
Raw material used
Direct labor costs
Manufacturing expenses
Manufacturing costs
Work-in-progress at the beginning of the year
Purchase of materials during the year
Other inward transfers
Work-in-progress at the end of the year
Cost of finished good
Finished good at the beginning of the year
Inward transfers or transfers to others of fees
Finished good at the end of the year
Total costs of sales
Service costs
Total operating cost		 Amount
$ 191,554
208,021
6,748
(258,786)
147,537
8,027

62,011
217,575
39,077
1,853
6,946
(43,465)
221,986
79,748
( 27,524 )
(70,616)
203,594

1,966
$ 205,560

290

Loop Telecommunication International, Inc.

Breakdown of operating expenses For the year ended December 31, 2023

Breakdown 11
Item
Salary expenses
Service fees
Insurance premium
Depreciation
Indirect materials
Others (Note)
Total		 Sales and
marketing
expenses
$ 26,698
10,442
1,336
427
-
13,196
$ 52,099		 (In Thousands of New Taiwan Dollars)
General and
administrative
expenses
Research and
development
expenses
$ 23,338
$ 96,811
5,609
1,876
1,370
7,283
740
6,977
-
18,208

13,655

21,069
$ 44,712
$ 152,224		 (In Thousands of New Taiwan Dollars)
General and
administrative
expenses
Research and
development
expenses
$ 23,338
$ 96,811
5,609
1,876
1,370
7,283
740
6,977
-
18,208

13,655

21,069
$ 44,712
$ 152,224		 (In Thousands of New Taiwan Dollars)
General and
administrative
expenses
Research and
development
expenses
$ 23,338
$ 96,811
5,609
1,876
1,370
7,283
740
6,977
-
18,208

13,655

21,069
$ 44,712
$ 152,224






$ 96,811
1,876
7,283
6,977
18,208
21,069
$ 152,224

Note: The amount of each entry item has not exceeded 5% of the amount of the item.

291

Loop Telecommunication International, Inc.

Summary of employee benefits and depreciation and amortization expenses that occurred during the period by function For the years ended December 31, 2023 and 2022

Breakdown 12

Employee benefits expense
Salary expenses

Labor and health insurance
Pension costs
Directors’ remuneration
Other employee benefits
expense
Total

Depreciation

Amortization expense
 2023 Total

$ 179,567

13,158

7,037

5,608
5,425

$ 210,795

$ 14,273

$ 4,510
 (In Thousands of New Taiwan Dollars)
2022

Operating
expenses
Total
$ 123,309 $ 150,779

9,516
12,405

5,331
6,778

1,968
1,968

3,460

4,931
$ 143,584
$ 176,861
$ 8,265
$ 13,546
$ 3,530
$ 3,658		 Thousands of New Taiwan Dollars)
2022

Operating
expenses
Total
$ 123,309 $ 150,779

9,516
12,405

5,331
6,778

1,968
1,968

3,460

4,931
$ 143,584
$ 176,861
$ 8,265
$ 13,546
$ 3,530
$ 3,658		 Thousands of New Taiwan Dollars)
2022

Operating
expenses
Total
$ 123,309 $ 150,779

9,516
12,405

5,331
6,778

1,968
1,968

3,460

4,931
$ 143,584
$ 176,861
$ 8,265
$ 13,546
$ 3,530
$ 3,658
Operating costs
$ 32,720

3,169
1,518
-

1,684

$ 39,091

$ 6,129

$ 557
 Operating
expenses
$ 146,847

9,989

5,519

5,608
3,741

$ 171,704

$ 8,144

$ 3,953
 Operating costs
$ 27,470

2,889

1,447

-

1,471

$ 33,277

$ 5,281

$ 128
 Operating
expenses
$ 123,309

9,516

5,331

1,968
3,460

$ 143,584

$ 8,265

$ 3,530








































  • Note 1: The number of employees of the year and the preceding year was 156 persons and 153 persons, respectively, and the number of Directors who are not concurrently employees was 8 persons and 7 persons, respectively.

Note 2: Companies whose shares are listed on TWSE or TPEx for trading shall additionally disclose the following information:

  • (1) The average employee benefits expenses of the year were NT$1,386 thousand (“total employee benefits expenses of the year - total Directors’ Remuneration”/“number of employees of the year - number of Directors who are not concurrently employees“).The average employee benefits expenses of the preceding year were NT$1,198 thousand (“total employee benefits expenses of the preceding year - total Directors’ Remuneration”/“number of employees of the preceding year - number of Directors who are not concurrently employees“).

  • (2) The average salary expenses of employees of the year were NT$1,213 thousand (total salary expenses of the year/“number of employees of the year - number of Directors who are not concurrently employees“).

The average salary expenses of employees of the preceding year were NT$1,033 thousand (total salary expenses of the preceding year/“number of employees of the preceding year - number of Directors who are not concurrently employees“).

  • (3) The average adjustments and changes in salary expenses reached 17.42% (“average salary expenses of employees of the year - average salary expenses of employees of the preceding year”/average salary expenses of employees of the preceding year).

  • (4) The remuneration of supervisors for the preceding year was NT$8 thousand. The Company has established its Audit Committee

in place for supervisors in June 2022; therefore, there will no longer be remuneration of supervisors.

  • (5) Remuneration policy

  • A. Based on the percentage or scope of remuneration of employees and Directors stipulated in the Company’s Articles of Incorporation:

Based on the distribution policy of remuneration of employees and Directors stipulated in the Articles of Incorporation. If the Company records any earnings from its final account of the year, apart from paying all taxes according to the law, it shall first compensate cumulative losses from prior years. It may appropriate special reserve based on the Company’s requirements. Then, the remaining balance shall be combined with the cumulative undistributed earnings from prior years; after retaining partial earnings based on the operating status and for a balanced dividend policy, the Company may make distribution after a resolution is made by the shareholders’ meeting based on the following principles:

  • a. Remuneration of employees shall be no less than 10%: Remuneration of employees may be made in shares or cash, and the distribution targets may include employees, who fulfill certain conditions, of subordinated companies; such conditions shall be resolved by the Board.

  • b. Remuneration of Directors shall be no more than 5%.

  • c. The remaining shall be shareholders’ bonuses.

292

Loop Telecommunication International, Inc.

Chairman: Yeh Maw-Lin

More from LOOP

Director's Dealing 2026
Jun 10
Director's Dealing 2026
Jun 10
Regulatory Filings 2026
May 26
Proxy Solicitation & Information Statement 2026
May 26
AGM Information 2026
May 26
AGM Information 2026
May 26
AGM Information 2026
May 26
Proxy Solicitation & Information Statement 2026
May 26
Regulatory Filings 2026
May 20
Interim / Quarterly Report 2026
May 14
View all filings →