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LOOP Annual Report 2024

Aug 18, 2025

52258_rns_2025-08-18_c9b13bd3-b868-47e2-8e2d-e1b6fea9b6be.pdf

Annual Report

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Stock Code: 3025

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

Loop Telecommunication International, Inc.

2024 Annual Report

Published on June 3, 2025 Annual Report's website: http://mops.twse.com.tw https://www.looptelecom.com/tw

I. Name, title, and contact No. of the spokesperson of the Company: Spokesperson: Tsaih Hsing-Chuan 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, Hsin Ann 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, Hsin Ann 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. 67, Sec. 2, Dunhua South Rd., Daan 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’s Website:www.looptelecom.com

Table of Content

(I) Business Report to Shareholders Business Report to Shareholders 1
1. The 2024 operating results 3
2. Summary of the Business Plan of the Year (2025) 9
3. Future development strategies 9
4. Effects of the external competitive environment 10
5. Effects of the regulatory environment and macroeconomic environment 11
(II) Corporate Governance Report **12 **
1. Data on Directors, President, Vice Presidents, Assistant Vice Presidents, and directors of
departments and branches 12
2. Corporate governance implementation 25
3. Information on CPA fees 56
4. Information on replacement of CPAs 57
5. 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 58
6. 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 58
7. Information on relationships between shareholders with the top ten shareholdings 59
8. 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 59
**(III) ** **Capital and shares ** 60
1. Capital and shares 60
2. Corporate bonds 66
3. Preferred shares 66
4. Global depository receipts 66
5. Employee stock options and restricted stock awards 66
6. Mergers or receipt of new shares issued by other companies 67
7. Implementation status of the capital utilization plan 67
**(IV) ** **Operational Highlights ** 67
1. Scope of business 67
2. Overview of market and production and marketing 91
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 102
4. Information on environmental expenditure 102
5. Labor-capital relations 103
6. Cybersecurity management 107
7. Important contracts 109
8. KPIs of the Company 110
(V) Review and analysis of financial condition and financial performance and risk
management 111
1. Financial position 111
2. Financial performance 112
3. Cash flow analysis 112
4. Effect of major capital expenditures on finance and business in the most recent year 113
5.
Investment policy for the most recent year, the main reasons		 for profit or loss,
improvement plan, and investment plan for the coming year 113
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 113
7.
Risk management structure		 118
(VI) Special Items 120
1.
Information on affiliates		 120
2.
Securities under private placement in the most recent year and up to		 the publication date
of the annual report 124
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 124
4.
Other matters that require additional explanation		 124
(VII) Matters May Materially Affect Shareholders’ Interest or the Price of the Company’s
Securities 124
Attachment 1: Procedures for Handling Material Inside Information 125
Attachment 2: Code of Conducts or Ethics of Employees 128
**Attachment 3: Code of Ethical Conduct ** 129
Attachment 4: Regulations for Employees' Complaints 131
Attachment 5: Procedures for Protection of Personal Data 134

(I) Business Report to Shareholders

Dear shareholders,

In 2024, within the context of convergence and integration in the global communication market, emerging businesses have risen to prominence, bringing unprecedented industry impacts and challenges. However, the proactive development of network infrastructure by countries around the world has accelerated the demand for network speed upgrades among customers. The applications developed by integrating emerging AI with information defense will drive revenue for Taiwan's network equipment. For Loop, this is a pivotal year to shift from stable growth to international expansion. We have not only maintained our leadership position in the power and government markets but also successfully advanced the globalization of our core communication platform through product innovation and market deployment.

The consolidated revenue of the Company throughout the year was NT$649,951 thousand, with a net income of NT$209,057 thousand, representing a growth of 5% from 2023; earnings per share were NT$3.68. After the successful transformation of Loop’s industry model, the profit margin has been maintained stably above 60%. The operating profit margin and net profit margin both showed stable growth, and the financial structure, solvency, and turnover rates performed well, demonstrating operational resilience and profit strength.

Regarding our business, there were 45 countries having business dealings with the Company worldwide last year. Exports accounted for about 75% of the annual revenue. America, the EU, and the Taiwan markets all performed well, while Southeast Asia experienced a slight decline. In terms of industry, electricity and governmental agencies accounted for 80% of our total revenue, and communication and transportation markets accounted for approximately 15%. In 2024, 80% of the revenue came from 9% of the countries we engaged with. Among all 34 product lines, 80% of the revenue was from 12% of the sales products, indicating the effectiveness of our market focus strategy. In the future, we will continue to deepen our presence in the European, American, and Taiwan markets, accelerate expansion in emerging markets, and collaborate with international system integrators to develop next-generation communication technologies as new drivers for continuous growth.

I. Operating Results and Transformation Opportunities

Loop has been focusing on Mission Critical Communication (MCC) solutions for many years, covering the user access layer to the backbone core network, and has been widely applied in global power utilities, public sectors, and large infrastructure networks. As user demands shift from TDM circuits to IP data, video, and cloud applications, the traditional SDH/SONET architecture faces challenges of inadequate upgrade flexibility and high maintenance and operational costs.

In response to this wave of industry transformation, Loop is actively investing in new generation packet transport solutions, providing hybrid equipment that is compatible with traditional circuits and offers flexibility for transformation, helping customers smoothly transition to IP-based architectures. It also introduces technologies such as low latency and zero-packet-loss protection, significantly reducing latency variation and disconnection risks for critical applications.

II. Flagship Product G7800 and Market Outcomes

This year's key product, Loop-G7800, has been officially launched, positioned as a next-generation PTN high-bandwidth multifunctional communication platform with

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integration capabilities ranging from 64K to 100G, supporting circuit emulation and various customized interface configurations. It also targets the European, American, Southeast Asian, African, and Middle Eastern markets, demonstrating global competitive strength.

In addition, it supports phased implementation or one-time full network upgrades, suitable for government or utility projects with high budget sensitivity. Its flexible architecture is well-received by customers and has attracted the attention and adoption of clients from multiple countries.

III. Enhance Network Management, Cybersecurity, and AI Integration Applications

Besides the major communication products, Loop has been actively investing in AI and cybersecurity system integration in recent years, launching iNMS and iNET network management system - AI-powered network management operation architecture, iNET automated diagnostic module, and iNMS big data analysis system, to help users enhance network operation efficiency and cybersecurity resilience.

Loop's products have obtained international information security certifications such as ISO27001, IEC62443-4-1, and FIPS 140-3 to address the increasingly severe cybersecurity threats, and they support the FIPS 140-3 encryption standard. The Loop-ISS2150 firewall and ISS2110 government configuration management system are planned to be launched in 2025, providing a more comprehensive information security solution for the MCC environment.

IV. Future Strategy and Product Layout

Loop will continue to deepen its involvement in the MCC market, concentrating on four main areas: high-speed encrypted transmission, TDM/IP integration, enterprise cybersecurity, and IIoT applications.

  • G7800 platform upgrade

  • New modules will be introduced, including a 600G master control card, MACsec/IPsec encryption, and EoS protocol conversion, enhancing high-speed transmission and cybersecurity protection capabilities.

  • TDM/IP Hybrid Transmission Module Provide circuit emulation and protection modules for E1/DS1 and DS3 interfaces, supporting smooth migration from legacy TDM systems to full IP-based network architectures.

  • Enterprise/Government Cybersecurity Solutions Comprehensive offerings include Next-Gen Secured Office (ISS2180), MCC Firewall (ISS2150), and AI-powered Network Management (iNET/iNMS) integrated platform, enhancing cybersecurity protection and operational efficiency.

  • IIoT and OT Information Security Equipment Launch of IoT sensors (IoT0510), industrial control cybersecurity appliances, and the government GCB-compliant cybersecurity platform (ISS2110), establishing end-to-end industrial cybersecurity protection architecture.

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V. Conclusion

Looking forward to the future, we will continue to deepen our "mission-critical, secure, and intelligent" product strategy and create globally competitive highreliability network solutions with the G7800 as the core platform. Regarding the marketing strategy for sharing the experience of the successful new backbone transmission case of Loop Telecom with the international society, in the next generation of solutions, Loop Telecom's development team will integrate product software and hardware functionalities to develop vertically integrated maintenance services for international market customers, which is certain to bring more orders and enhance operational performance. Combining the MCC networking product portfolio under the new business and expanding the niche of various products, it is likely to become the growth focus for operations in the future. Our goal is to enter the top three in the utility market and become the leading brand in MCC transmission 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 explore new markets, continuously creating value to reward shareholders and customers.

The 2024 operating results, the summary of the 2025 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 2024 operating results

(1) Implementation achievement of the business plan

The Company’s total consolidated revenue for the year was NT$649,951 thousand, remaining stable compared to 2023, with an annual growth rate of 0.13%. Net income was NT$209,057 thousand, and earnings per share (EPS) stood at NT$3.68. The profit margin of Loop Telecom 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 Telecom 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. In the future, we will continue to deepen our presence in the European, American, and Taiwan markets, accelerate expansion in emerging markets, and collaborate with international system integrators to develop next-generation communication technologies as new drivers for continuous growth.

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

Unit: (In Thousands of New Taiwan Dollars)

Item 2023 2024 Ratio of
increase
(decrease)
Financial
income and
expenses		 Net revenue 649,097 649,951 0.13%
Grossprofit 446,054 445,115 -0.21%
Net operating (loss)
profit		 193,270 191,899 -0.71%
Financial
income and
expenses		 Interest income 15,525 11,902 -23.34%
Interest expenses 1,822 1,915 5.10%
Profitability Return on assets (%) 17.01 17.80 4.64%
Return on equity(%) 23.55 24.33 3.31%

Ratio of net profit
before tax to paid-in
capital(%)		 43.49 42.62 -2.00%
Net margin (%) 30.76 32.17 4.58%
Earnings per share
(NT$)		 3.00 3.68 22.67%

(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 2024 was NT$158,505 thousand, representing an increase of NT$6,281 thousand (approximately 4.1%) from the R&D amount in 2023.

R&D amount in 2023. R&D amount in 2023. R&D amount in 2023.
Unit:(In Thousands of New Taiwan Dollars)
Year
Item
2023		 2024
Research and development expenses 152,224 158,505
Net revenue 649,097 649,951
Ratio to net revenue 23% 24%

From 2024 to March 2025, equipment successfully developed by the Company is as follows:

  • January 2024 Completed the R&D of the Loop-AM3440 CCPB8GEHSWa and added support for MPLS-TP and CE functions.

  • May 2024 Completed the R&D of the Loop-iNMS Integrated Network Management System and added support for new product, Loop-G7800 PTN MPLS/CE Packet Transport Network.

May 2024 Completed the R&D of the Loop-iNET Intelligent Network Element Management System (EMS) and added support for the new Loop-G7800 PTN MPLS/CE Packet Transport Network.

June 2024 Completed the R&D of the Loop-G7860A to support the new 8GE-4PoEP card with 4-port PoE/PoE+/PoE++

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functions and the 8GE-8PoE board with 8-port PoE/PoE+ functions.

  • November 2024 Completed the R&D of the Loop-G7800 to support the new TE1-16-CEM board with 16-port T1 or E1 functions and Unframed T1/E1 Circuit Emulation (CEM) over PSN (SAToP).

  • November 2024 Completed the R&D of the Loop-G7800 to support the new TE1-32-CEM board with 32-port T1 or E1 functions and Unframed T1/E1 Circuit Emulation (CEM) over PSN (SAToP).

  • February 2025 Completed the R&D of the Loop-G7800 to support the new GFE-8T card, offering 8-port 1000/100/10 Mbps Ethernet Twist-Pair RJ45 on the 10G slot and 8-port 100/10 Mbps Ethernet Twist-Pair RJ45 on the 1G slot.

  • February 2025 Completed the R&D of the Loop-G7800 to support the new 8POE1 board, offering 8-port 1000/100/10 Mbps BaseT Ethernet with PoE+ on the 10G slot and 8-port 100/10 Mbps Ethernet with PoE+ on the 1G slot. PoE+ is powered via the system backplane.

  • February 2025 Completed the R&D of the Loop-G7800 to support the new 8POE2 board, offering 8-port 1000/100/10 Mbps BaseT Ethernet with PoE+ on the 10G slot and 8-port 100/10 Mbps Ethernet with PoE+ on the 1G slot. PoE+ is powered via external supply.

  • February 2025 Completed the R&D of the Loop-G7800 to support the new 4POEP1 board, offering 8-port 1000/100/10 Mbps BaseT Ethernet with PoE++ on ports 2/4/6/8 in the 10G slot, and 8-port 100/10 Mbps Ethernet with PoE++ on ports 2/4/6/8 in the 1G slot. PoE++ is powered via the system backplane. PoE++ is powered via the system backplane.

  • February 2025 Completed the R&D of the Loop-G7800 to support the new 4POEP2 board, offering 8-port 1000/100/10 Mbps BaseT Ethernet with PoE++ on ports 2/4/6/8 in the 10G slot, and 8-port 100/10 Mbps Ethernet with PoE++ on ports 2/4/6/8 in the 1G slot. PoE++ is powered via external supply.

  • February 2025 Completed the R&D of the Loop-G7800 to support the new B2G5-1-LoSW1 board with circuit emulation for STM-16/OC-48 traffic.

  • February 2025 Completed the R&D of the Loop-G7800 to support the new B2G5-2-LoSW1 board with circuit emulation for STM-16/OC-48 traffic.

The R&D Department completed a total of 13 brand-new and derived new products during the year, with products primarily focusing on iNET, iNMS, IP, PDH, SDH, MPLS, and TDMoE. Apart from iNMS, G7860A, O9400RPTN10G, O9500R-PTN10G and other series products, Loop-G7800 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.

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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.

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. In 2024, the Company also developed MPLS-TP transmission capabilities on the AM3440 platform, enabling it to serve as an edge node for small-scale MPLS core networks. This provides customers with a flexible deployment solution that supports multiservice integration, low-latency transmission, and highly stable operation under various conditions, ranging from 5U to 1U access network levels and space constraints.

Optical communication equipment:

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 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. (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

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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. In response to the market’s continued demand for high bandwidth, high switching capacity, and intelligent network management, the Company has been actively developing a new generation of products, such as the G7800 series with 400G switching capacity, to provide comprehensive optical transmission solutions and capture opportunities in the global mission-critical communications (MCC) market.

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 toptier 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 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.

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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 PTN10G 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.

5G 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. The new generation of 5G CPE not only delivers high-speed Ethernet services but also supports customers' existing on-site operations, meeting enterprise users' ongoing demands for voice, dedicated lines, and industrial control services. This integration capability simplifies the equipment complexity within the layered architecture of private 5G networks, reduces operational costs, and enhances deployment efficiency and timelines. For enterprises and operators in a critical phase of digital transformation, it serves as a vital bridge between existing infrastructure and future all-IP architectures.

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2. Summary of the Business Plan of the Year (2025)

(1) Business policy

For the first quarter of 2025, the Company reported consolidated revenue of NT$88,142 thousand, representing a 23% decrease compared to NT$113,879 thousand in the same period last year. Earnings per share (EPS) were NT$0.05.

Since 2019, the Company has consistently maintained a gross profit margin above 50%, reflecting its solid performance within the network communications industry.The Company’s efforts to deepen its presence in the Taiwan market have yielded positive results, complemented by steady growth across other regions. As the Company continues to advance its global sales strategy and market expansion, the overall geographical revenue mix is expected to become more balanced.

Financially, the Company continues to demonstrate sound performance across key indicators, including capital structure, debt-servicing capacity, and accounts receivable turnover.Looking ahead, supported by favorable market conditions in the communications industry and long-term partnerships with leading international system integrators, revenue from Europe and the United States is expected to sustain growth. Meanwhile, the domestic market has entered a new stage of development, Southeast Asian markets are showing signs of recovery, and the Company is actively expanding into emerging markets. By investing in next-generation communication technologies to flexibly meet customer needs, the Company is well-positioned to capitalize on new growth momentum under evolving industry trends.

(2) Estimated sales volume and its basis, and material production and marketing policy

Due to the transition in the industry pattern of Loop Telecom, 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.

Regarding our business, there were 45 countries having business dealings with the Company worldwide last year. Exports accounted for about 75% of the annual revenue. In terms of industry, electricity and governmental agencies accounted for 80% of our total revenue. In the first quarter of 2025, 80% of our revenue was from 9% of countries having businesses with us. Among all 34 product lines, 80% of the revenue was from 12% of the sales products.

3. Future development strategies

Loop Telecom will continue to deepen its focus on the MCC critical communication market, concentrating on four main areas: high-speed encrypted transmission, TDM/IP integration, enterprise cybersecurity, and IIoT applications.

 G7800 Platform Upgrade

New modules will be introduced, including a 600G master control card, MACsec/IPsec encryption, and EoS protocol conversion, enhancing high-speed transmission and cybersecurity protection capabilities.

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  • TDM/IP Hybrid Transmission Module

  • Provide circuit emulation and protection modules for E1/DS1 and DS3 interfaces, supporting smooth migration from legacy TDM systems to full IP-based network architectures.

  • Enterprise/Government Cybersecurity Solutions

  • Comprehensive offerings include Next-Gen Secured Office (ISS2180), MCC Firewall (ISS2150), and AI-powered Network Management (iNET/iNMS) integrated platform, enhancing cybersecurity protection and operational efficiency.

  • IIoT and OT Information Security Equipment

  • Launch of IoT sensors (IoT0510), industrial control cybersecurity appliances, and the government GCB-compliant cybersecurity platform (ISS2110), establishing end-to-end industrial cybersecurity protection architecture.

Looking forward to the future, we will continue to deepen our "mission-critical, secure, and intelligent" product strategy and create globally competitive highreliability network solutions with the G7800 as the core platform. Regarding our successful backbone transmission case, our marketing strategy will leverage this experience to engage with the international market. In next-generation solutions, our development team will integrate product software and hardware functionalities to develop vertically integrated maintenance services for international customers, generating additional revenue streams and enhancing operational performance. Under the new business framework, the MCC Networking Product Portfolio will strengthen the utilization of automated testing systems and expand various product niches, positioning it as a key growth driver for future operations.

Our goal is to enter the top three in the utility market and become the leading brand in MCC transmission 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 explore new markets, continuously creating value to reward shareholders and customers.

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 2024, 80% of the revenue came from the 9% of countries having businesses with the Company. Among all 34 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 Telecom has increased instead of decreased.

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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 2024, 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

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(II) Corporate Governance Report

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

(1) Data on Directors

April 27,2025 April 27,2025 April 27,2025 April 27,2025
Title Nationality or Place of
Registration		 Name Gender/Age Date elected (appointed) Tenure Date initially elected Remarks
Other directors of departments,
Current shareholding of Shares held in the
Shareholding when Directors or supervisors who are
elected Current shareholding spouse and underage name of other Major career Concurrent duties in spouses or relatives within the
hild
c ren persons achievements (academic
the Company and		 second degree of kinship
background) other companies

Shares		 Shareholding
ratio
Shareholding Shareholding Shareholding
Shares Shares Shares Title Name Relationship
ratio ratio ratio
Chairman Republic of China Yeh Maw-Lin Male/73 June 29, 2022 3 years October 28, 1991 5,625,844 9.92% 1,223,337
2.16%		 Bachelor's degree in Chairman and
telecommunication, President, Loop
National Chiao Tung Telecommunication
University International, Inc.
Chen Hua-
7,032,306
9.92%		 None None
Ph.D. in electrical		 Director, Chongqing Director Wife (Note 1)
Ling
engineering, Loop Technology Co.,
The University of Notre Ltd.
Dame; Senior Director, Tianjin Loop
management,NYNEX TechnologyCo.,Ltd.
Director Republic of China Chen Hua-Ling Female/70 June 29, 2022 3 years June 29, 2022 1,223,337 2.16% 5,625,844
9.92%
Department of Public
Administration,
Yeh Maw-
1,938,922
2.73%		 None None None Chairman Husband -
National Chung Hsing
Lin
University
Director Republic of China Fan Zheng-Chun Male/71 June 29, 2022 3 years June 25, 2013 194,400 0.34% 33 0.00% Jiin Yeeh Ding
Enterprise Corp.
Director
Institute of Business Independent Director,
243,000 0.34% None None Management, Tatung
Hantic precision		 None None None -
University technology, Inc
Director, Tianjin Loop
Electron Technology
Co.,Ltd.
Director Republic of China Chiu Dong-Sheng Male/60 June 29, 2022 3 years June 29, 2022 288,485 0.51% None None
Director of the
Department of Business
management
370,607 0.52% None None
Administration,		 None None None -
department,
Doshisha University
Shimamura Co., Ltd.

12

Title Nationality or Place of
Registration		 Name Gender/Age Date elected (appointed) Tenure Date initially elected Remarks
Other directors of departments,
Current shareholding of Shares held in the
Shareholding when Directors or supervisors who are
elected Current shareholding spouse and underage name of other Major career Concurrent duties in spouses or relatives within the
hild
c ren persons achievements (academic
the Company and		 second degree of kinship
background) other companies

Shares		 Shareholding
ratio
Shareholding Shareholding Shareholding
Shares Shares Shares Title Name Relationship
ratio ratio ratio
Independent director Republic of China Huang Yun-Ming Male/82 June 29, 2022 3 years June 29, 2022 None None
AT&T Consultant,
2007-2016
Quintum Technology
None None None None None None
Director of Engineering,		 None
 None None None -
2000-2007
Lucent Technology
Technical Manager
1994-2000
Independent director Republic of China Chiang Ming-Hsiung Male/70 June 29, 2022 3 years June 29, 2022 None None
Assistant manager,
Quan Ya Computer Co.,
None None None None None None
Ltd.		 None None None None -
Chairman, Acrosser
Technology Co., Ltd.
Independent director Republic of China Chang Kuo-Hwa Male/73 June 29, 2022 3 years June 29, 2022 None None StarVox Comm. Inc.
(U.S.A)
Co-fotmder，CTO VP
Engineering
None None None None None None None None None None -
Centrify Corp.(U.S.A)
System Quality
Architect.
Independent director Republic of China Ko Shu-Mei Female/55 June 29, 2022 3 years June 29, 2022 None None
Chief of the finance
section, United Fiber
Optic Communication
Inc.
None None None None None None None None None None -
Associate vice president
of the management
section, Aquaoptics
Corp.

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

13

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.

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:
c-1 Disclosure of professional qualification of Directors and supervisors and independence of Independent Directors:		 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:
c-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 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 Article30of theCompanyAct 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 Article30of theCompanyAct 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 Company Act
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 Company Act do not exist. None of
thegovernment,corporation,or its representative is elected.

14

Independent director
Chiang Ming-Hsiung		 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 Company Act do not exist. None of the
government,corporation,or its representative is elected.
Independent director
Chang Kuo-Hwa		 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
30of theCompanyAct 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 Article30of theCompanyAct do not exist.
(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
Chiang Ming-Hsiung
Chang Kuo-Hwa
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 Companyand another companyare held bythe same

15

  • person, not a director, supervisor, or employee of another company.

    1. 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.
    1. 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.
    1. 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.

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.

16

c-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: (1) operational judgment, (2) accounting and financial analysis, (3) business management, (4) crisis management, (5) industry knowledge, (6) international market perspective, (7) leadership, and (8) decision-making capability.

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:

di
Na		 Core of
versification
me		 Basic composition Basic composition Basic composition Basic composition Profes sional background sional background 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
Chen Hua-
Ling		 Female
Fan Zheng-
Chun		 Male
Chiu Dong-
Sheng		 Male
Independent
director		 Huang Yun-
Ming		 Male

Chiang
Ming-
Hsiung		 Male
Chang Kuo-
Hwa		 Male
Ko Shu-Mei Female

Currently, the Board consists of 8 members, including 2 female directors, accounting for 25%. The proportion of either gender has yet to reach one-third. The primary reason is that nominations for board candidates have historically focused on industry experience and professional background, with gender diversity not fully reflected in the selection criteria.

17

To enhance gender diversity on the Board, the Company will continue to implement the following measures:

  • I. Incorporate gender diversity as a consideration in the evaluation and selection process during board elections and supplementary nominations.

  • II. Encourage shareholders with nomination rights to recommend candidates who possess both professional qualifications and gender diversity.

  • III. Regularly review the composition of the Board and optimize it in line with corporate governance guidelines.

Board independence:

Board independence: Board independence: Board independence:
December 31,2024
Criteria
Name
(Note 1)
Possession of over five years of working experience and
qualification		 the following professional 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
Chen Hua-Ling - - - - - - None
Fan Zheng-Chun - - 1
Chiu Dong-Sheng - - None
HuangYun-Ming - - None
ChiangMing-Hsiung - - None
ChangKuo-Hwa - - 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,

18

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.

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

April 27, 2025

Title Nationalit
Name		 Gender Date elected
(appointed)
Remarks
Managers who are spouses
Shareholding of spouse
 Shares held in the
Shareholding or relatives within the
and underage children name of other persons Major career achievements Concurrent duties in the
Coman and other

second degree
y (academic background) py
companies		 Name
Shareholding Shareholding Shareholding
Shares Shares Shares Title
Relationship
ratio ratio ratio
Yeh Maw-Lin Male 1991.10.28 5,625,844
9.92%		 1,223,337
2.16%		 None None Bachelor's degree in None
telecommunication, National Director, Chongqing Loop
Chairman and Republic Chiao Tung University Technology Co., Ltd.
None None (Note 1)
President of China Ph.D. in electrical engineering, Director, Tianjin Loop
The University of Notre Dame Technology Co., Ltd.
Senior manager,NYNEX
Tseng Ching-Lin Male 2006.08.07 1,938 0.00% None None None None None
Vice President, Master's degree in physics, Fu
Sales & Republic Jen Catholic University
None None None -
Marketing of China President, SDO
Department Communications Corp.
Liu Dong-Jie Male 2005.02.14 1,032 0.00% None None None None None
Master's degree in electrical
Vice President, machinery, University of Supervisor, Tianjin Loop
Republic
Engineering Southern California Electron Technology Co., None None -
of China
Department Assistant manager, Syncom Ltd.
Networks Inc.

19

Title Nationalit Name Gender Date elected
(appointed)
Remarks
Managers who are spouses
Shareholding of spouse
 Shares held in the
Shareholding or relatives within the
and underage children name of other persons Major career achievements Concurrent duties in the
Coman and other

second degree
y (academic background) py
companies		 Name
Shareholding Shareholding Shareholding
Shares Shares Shares Title
Relationship
ratio ratio ratio
Chang Xiao-Ling Female 2021.03.25 149 0.00% None None None None None
Bachelor's degree in
Director of the accounting, Fu Jen Catholic
Finance and Republic University
None None None -
Accounting of China Chief accountant, Taiwan
Department Mobile Co., Ltd.
Financial accounting
Tsaih Hsing-
Chuan		 Female 2023.03.28 8,679 0.02% None None None None None
Bachelor's degree in
Chief of International Business, Tunghai
Republic
corporate
University		 None None None -
of China
governance Director of Procurement
Fujitsu Taiwan

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.

20

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

A. Remunerations of the Directors

December 31, 2024 (In Thousands of New Taiwan Dollars)

Directors' remuneration Remuneration for concu rrent duty as an employee Total
Total remuneration Remuneration

Disability		 Directors' Fees for (A+B+C+D) as a % Salary, bonus, and Disability (A+B+C+D+E+F+
Compensation


retirement		 compensation professional of net profit after tax

special
retirement		 Employee's compensation (G) (Note 1) G) as a % of the
(A) benefits (B)
(C) (Note 1)
practice (D)

reimbursement (E)		 benefits (F)
Net Income		 Remuneration
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		 The Company All companies
within the financial
statements		 The Company All companies
within the financial
statements		 All companies The Company All companies
within the financial
statements		 received from an
Title Name The Company
within the financial		 investee other than a
statements subsidiary or from the
parent company
Amount Amount Amount Amount
in cash in shares in cash in shares
Chairman
and
President		 Yeh Maw-Lin 0
0
0
0		 1,584
1,584
8
8		 1,592
0.76%

1,592
0.76%

7,836
7,836
0
0
2,060
0
2,060
0
11,488
5.50%

11,488
5.50%

None
Director Fan Zheng-Chun 0
0
0
0		 1,304
1,304
8
8		 1,312
0.63%

1,312
0.63%

0
0
0
0
0
0
0
0
1,312
0.63%

1,312
0.63%

None
Director Chen Hua-Ling 0
0
0
0		 1,304
1,304
8
8		 1,312
0.63%

1,312
0.63%

0
0
0
0
0
0
0
0
1,312
0.63%

1,312
0.63%

None
Director Chiu Dong-Sheng 0
0
0
0		 1,303
1,303
8
8		 1,311
0.63%

1,311
0.63%

0
0
0
0
0
0
0
0
1,311
0.63%

1,311
0.63%

None
Independent
director
Huang Yun-Ming		 100
100
0
0
0
0
0
0
100
0.05%

100
0.05%

0
0
0
0
0
0
0
0
100
0.05%

100
0.05%

None
Independent
director
Chiang Ming-
Hsiung		 100
100
0
0
0
0
0
0
100
0.05%

100
0.05%

0
0
0
0
0
0
0
0
100
0.05%

100
0.05%

None
Independent
director
Chang Kuo-Hwa		 100
100
0
0
0
0
0
0
100
0.05%

100
0.05%

0
0
0
0
0
0
0
0
100
0.05%

100
0.05%

None
Independent
director
Ko Shu-Mei		 100
100
0
0
0
0
0
0
100
0.05%

100
0.05%

0
0
0
0
0
0
0
0
100
0.05%

100
0.05%

None
1.
Please describe the policy, system, standards, and structure of the remuneration of Independent Directors and describe the linkage of duties and risks assumed, time invested, and other factors 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 Directors 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 standards 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 2024; the proposal for earning distribution is to be resolved at the shareholders' meeting on June 26, 2025.

21

B. Remunerations of the President and Vice Presidents

December 31, 2024 (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
i		 All
i		 All
i		 Th C All companies within All
i		 other than a
subsidiary or
The
Company		 companes
within the
financial
statements		 The
Company		 companes
within the
financial
statements		 The
Company		 companes
within the
financial
statements		 e ompany the financial statements
The
Company		 companes
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
6,285
6,285
0
0
1,551
1,551
2,060
0
2,060
0
9,896
4.74%

9,896
4.74%

None
Vice
president		 Liu
Dong-Jie
2,417
2,417
0
0
444
444
530
0
530
0
3,391
1.62%

3,391
1.62%

None
Vice
president		 Tseng
Ching-
Lin		 2,389
2,389
0
0
2,795
2,795
667
0
667
0
5,851
2.80%

5,851
2.80%

None

Note 1: The Company recorded earnings after tax in 2024; the proposal for earning distribution is to be resolved at the shareholders' meeting on June 26, 2025.

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

December 31,2024(In Thousands of New Taiwan Dollars) December 31,2024(In Thousands of New Taiwan Dollars) December 31,2024(In Thousands of New Taiwan Dollars) December 31,2024(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
2,060		 2,060 0.99
Vice president Liu Dong-Jie 0
530
530
0.25
Vice president Tseng Ching-Lin 0
667
667
0.32

Note 1: The Company recorded earnings after tax in 2024; the proposal for earning distribution is to be resolved at the shareholders' meeting on June 26, 2025.

22

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

December 31,2024(In Thousands of New Taiwan Dollars) December 31,2024(In Thousands of New Taiwan Dollars) December 31,2024(In Thousands of New Taiwan Dollars) December 31,2024(In Thousands of New Taiwan Dollars) December 31,2024(In Thousands of New Taiwan Dollars) December 31,2024(In Thousands of New Taiwan Dollars) December 31,2024(In Thousands of New Taiwan Dollars)
Salary (A) Disability retirement
benefits (B)		 Bonus and allowance
(C)		 Employee compensation (D)
(Note 1)		 Total remuneration
(A+B+C+D) as a % of
net profit after tax		 Remuneration
received from
an investee
Title Name All
i		 All
i		 All
i		 Th C All companies within All
i		 other than a
subsidiary or
The
Company		 companes
within the
financial
statements		 The
Company		 companes
within the
financial
statements		 The
Company		 companes
within the
financial
statements		 e ompany the financial statements
The
Company		 companes
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
6,285
6,285
0
0
1,551
1,551
2,060
0
2,060
0
9,896
4.74%

9,896
4.74%

None
Vice
president		 Liu
Dong-Jie
2,417
2,417
0
0
444
444
530
0
530
0
3,391
1.62%

3,391
1.62%

None
Vice
president		 Tseng
Ching-
Lin		 2,389
2,389
0
0
2,795
2,795
667
0
667
0
5,851
2.80%

5,851
2.80%

None

Note 1: The Company recorded earnings after tax in 2024; the proposal for earning distribution is to be resolved at the shareholders' meeting on June 26, 2025.

23

(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 2023(%)		 Ratio of total remuneration to net
income in 2023(%)		 Ratio of total remuneration to net
income in 2024(%)		 Ratio of total remuneration to net
income in 2024(%)		 Description
The
Company		 All companies within
the financial statements		 The
Company		 All companies within the
financial statements
Director
(Note)		 6.71 6.71 7.59 7.59 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 were due to the increase in net
profit in 2024.
6.
The total remuneration of the President and Vice Presidents as a percentage of
net profit after tax decreased, primarily due to the retirement of Vice President
Lai Yong-Zan on July31,2023.
President and
vice president		 11.54 11.54 9.16 9.16

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

24

2. 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 13th meeting of 12th session; the attendance/presence of Directors and supervisors is as follows:

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		 3 1 75
Director Chen Hua-
Ling		 4 0 100
Independent director Huang Yun-
Ming		 3 1 75
Independent director Chang Kuo-
Hwa		 4 0 100
Independent director Chiang Ming-
Hsiung		 4 0 100
Independent director KoShu-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 content proposals, 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 12th
meeting of the
12th session of
the Board.
2025.03.13 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

25

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.

IV. Evaluation
periodicity		 Evaluation
period		 Evaluation scope Evaluation method Evaluation content
Once each
year		 2024.01.01~
2024.12.31		 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

26

(2) Operation of the Audit Committee

A. The Audit Committee of the Company was established on June 29, 2022, the information on the members is as follows:

Identity
Criteria
Name		 Identity
Criteria
Name		 Professional qualifications and
experience		 Independence Number of
concurrent duty
as a Audit
Committee
member at a
public company
Independent
director
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
Chiang
Ming-
Hsiung		 National Taipei Institute of
Technology. Used to be the
chairman of 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
Kuo-
Hwa		 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
Convener Ko Shu-
Mei
 Department of Business
Administration, Providence
University. Used to be the assistant
vice president of the management
~~s~~ection 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
Independent
director

27

  • 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:
follows:
Title Name Number of
attendance(B)		 Number of
attendance by proxy		 Attendance rate
(%) (B/A)		 Remarks
Independent
director		 Huang Yun-
Ming		 3 1 75
Independent
director		 Chang Kuo-
Hwa		 4 0 100
Independent
director		 Chiang Ming-
Hsiung		 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.

28

C. Disclose the 2024 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
2024.03.12 1.
2023 consolidated financial
statements, parent company
only financial statements
and business report
2.
The evaluation of the
independence and adequacy
of the Company's CPAs
3.
Pre-approval of the
provision of non-assurance
services by the appointed
CPAs, their firm, and
affiliated entities to the
company and its
subsidiaries		 Approved by all members
of the Audit Committee		 Proposed to the Board and
approved by receiving the
consent of all attending
Directors
2024.05.13 1.
The 2024 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
2024.08.09 1.
The 2024 Q2 consolidated
financial statements
2.
Auditor Appointment Cases		 Approved by all members
of the Audit Committee		 Proposed to the Board and
approved by receiving the
consent of all attending
Directors
2024.11.08 1.
The 2024 Q3 consolidated
financial statements
2.
Established the “Operating
Procedures for the
Preparation and Assurance
of the Sustainability
Report.”		 Approved by all members
of the Audit Committee		 Proposed to the Board and
approved by receiving the
consent of all attending
Directors
2025.03.13 1.
2024 consolidated financial
statements, parent company
only financial statements
and business report
2.
The evaluation of the
independence and adequacy
of the Company's CPAs
3.
Pre-approval of the
provision of non-assurance
services by the appointed
CPAs, their firm, and
affiliated entities to the
company and its
subsidiaries
4.
Internal operational rotation
of the CPA firm		 Approved by all members
of the Audit Committee		 Proposed to the Board and
approved by receiving the
consent of all attending
Directors

29

(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 The State of Operation The differences from the
Corporate Governance
Best Practice Principles
for TWSE/TPEx Listed
Companies for
TWSE/GTSM Listed
Companies and the
reasons therefor.
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

30

Evaluation Items The State of Operation The differences from the
Corporate Governance
Best Practice Principles
for TWSE/TPEx Listed
Companies for
TWSE/GTSM Listed
Companies and the
reasons therefor.
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)
Eight 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 "Audit 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

31

Evaluation Items The State of Operation The differences from the
Corporate Governance
Best Practice Principles
for TWSE/TPEx Listed
Companies for
TWSE/GTSM Listed
Companies and the
reasons therefor.
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 13, 2025, 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 byCPAs.
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 Tsaih Hsing-Chuan (attached to the President's
Office Secretariat) to concurrently act as Chief of corporate governance. Tsaih Hsing-Chuan 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 2024 and completed 12 hours of continuing education during that year. For details
on the continuingeducation, please refer topage 107 of 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.

32

Evaluation Items The State of Operation The differences from the
Corporate Governance
Best Practice Principles
for TWSE/TPEx Listed
Companies for
TWSE/GTSM Listed
Companies and the
reasons therefor.
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.)?
(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 theprescribed deadline?



(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.
(III) The Company declared its Q1, Q2 and Q3 financial statements, along with the monthly
business performance statements, before the prescribed deadline and announced and declared
its annual financial statements within 75 days from the end of the fiscal year.		 None
None
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,supplier		 (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		 None
None

33

Evaluation Items The State of Operation The differences from the
Corporate Governance
Best Practice Principles
for TWSE/TPEx Listed
Companies for
TWSE/GTSM Listed
Companies and the
reasons therefor.
Yes No Summary description
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)?		 educational training system. (i.e., subsidies for employees' club 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 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 Companyhas no right to affect the investment and management strategies.		 None
None
None
None
None
None
None
None

34

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
content,and amount)?
The Company will decide in accordance with relevant specifications based on the


No
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
transactions should be approved by the Board of Directors and agreed upon by the
shareholders' meetingor reported?
The Company will decide in accordance with relevant specifications based on the


No
operating status of the Company.
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 meetingminutes?


Yes		 Execute according to relevant specifications.
Has the Company convened its annual shareholders' meeting by the end of May? The Company will decide in accordance with relevant specifications based on the
No
operatingstatus of the Company.
Has the Company uploaded both Chinese and English 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 both Chinese and English annual report eighteen 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 insiders by using information undisclosed to the market that includes (but is
not limited to) the prohibition of trading shares by Directors during the lock-up
period 30 days and 15 days before the announcement of the financial statements
andquarterlyfinancial statements and specifythe implementation status?
The Company will decide in accordance with relevant specifications based on the
No
operating status of the Company.
Does the company's shareholders' meeting adopt live online broadcasting, or upload
uninterrupted audio and video recordings of the entire meeting after the
shareholders' meeting?
The Company will decide in accordance with relevant specifications based on the

No
operating status of the Company.
Has the Company formulated its Corporate Governance Best Practice Principles
that are approved by the Board?		 The Company has established relevant corporate governance policies; please refer
Yes to the corporate governance implementation in the annual report and the regulations
of the Companyunder corporategovernance on its Chinese website.
Has the Company established the diversification policies of its Board members and
disclosed the substantial management objectives and implementation status of the
diversification policies on its website and in the annual report?
Four Directors and four Independent Directors of the Company possess operating
experience or academic experiences; stringent procedures are adopted for the
No nomination of members, with their expertise taken into consideration. The Company
will continue to promote relevant diversification policies according to the
Regulations for the Performance Evaluation of the Board.

35

Strengthen
the Board's
structure and
operation:
Strengthen
the Board's
structure and
operation:		 Are the Chairman and President or a position of the same level (top-level manager)
the sameperson,or a spouse or a relative within the first degree of kinship?		 The Company will decide in accordance with relevant specifications based on the
No
operatingstatus of the Company.
Has the Company established the succession plan for Board members and the
important management and disclosed the operations on its website or in the annual
report?
The Company will decide in accordance with relevant specifications based on the
No
operating status of the Company.
Has the Company disclosed the qualification and experience of members of the
Audit Committee, the annual working highlight, and operating status?		 The Company has established the Audit Committee according to the law; for the
qualification and experience of members of the Audit Committee, the annual
Yes
working highlight, and operating 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 being Independent Directors, and one member or above
possessing the professional ability required by the committee, and disclosed the
composition,duties,and operatingstatus?

The Company will decide in accordance with relevant specifications based on the


No
operating status of the Company.

Has the Company disclosed the separate communication status (i.e.,
communication methods for the financial statements and the finance and business
status of the Company, matters, and results) between Independent Directors with
the chief auditor and CPAs on its website?
The Company has disclosed the communication status between Independent
Yes Directors with the chief auditor and CPAs under the Board of corporate governance
in the investor section on its 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)and dulydisclosed the evaluationprocedures in its annual report?
Yes Execute according to relevant specifications.

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 of directors, disclose the organizational structure of risk
management, risk management procedures, and their operation, and report to the
board of directors at least once ayear?
The Company will decide in accordance with relevant specifications based on the
No
operating status of the Company.
Has the Regulations for the Performance Evaluation of the Board formulated by the
Company been approved by the Board and stated that it shall execute an external
evaluation at least every three years? Has the Company executed the evaluations in
the year under evaluation or the past two years and disclosed the implementation
status and evaluation results on its website or in the annual report?
The Company has established Regulations for the Performance Evaluation of
Directors and Supervisors and intends to periodically evaluate Board performance
Yes
at the end of each year, regularly examine the efficacy of the Board, and report to
the Board.
Have Independent Directors of the Company completed the continuing education
based on the number of hours specified in the "Directions for the Implementation of
Continuing Education for Directors and Supervisors of TWSE Listed and TPEx
Listed Companies"?
The Company has encouraged Independent Directors to participate in relevant

No
continuing education programs; however, it 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 annual report,and reported to the Board at least once ayear?
The Company will decide in accordance with relevant specifications based on the
No
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
qualification certificate?
The Company will decide in accordance with relevant specifications based on the


No
operating status of the Company.

36

Improve
information
transparency
Improve
information
transparency		 Has the Company announced its annual financial statements audited and certified by
CPAs within two months from the end of a fiscalyear?		 The Company will decide in accordance with relevant specifications based on the

No
operatingstatus of the Company.
Has the Company disclosed its English interim financial statements within two
months after the declaration deadline for the Chinese interim financial statements?		 The Company will decide in accordance with relevant specifications based on the

No
operatingstatus of the Company.
Does the company upload to the MOPS the information on changes in shareholding
of insiders for theprevious month before the 10th dayof each month?		 The Company will decide in accordance with relevant specifications based on the

No
operatingstatus of the Company.
Has the Company disclosed the substantial and accurate dividend policy in its annual
report?		 The Company will decide in accordance with relevant specifications based on the

No
operatingstatus of the Company.

Has the Company voluntarily disclosed the individual remuneration of Directors and
supervisors in its annual report?		 The Company has disclosed the individual remuneration of Directors according to

Yes
relevant specifications.
Has the Company disclosed the linkage between the performance evaluation and
remuneration of Directors and managers in its annual report?		 The Company will decide in accordance with relevant specifications based on the

No
operatingstatus of the Company.

Does the Company website disclose information related to finance, business, and
corporategovernance?

Yes		 Execute according to relevant specifications.
Has the Company held (either by invitation or voluntarily) at least two investor
conferences, disclosed complete video links for at least two of the meetings, and
ensured that the interval between the first and last investor conference in the
evaluationyear was more than three months?
The Company will decide in accordance with relevant specifications based on the


No
operating status of the Company.
Has the Company voluntarily disclosed the individual remuneration of the President
and Vice Presidents in its annual report?		 The Company has disclosed the individual remuneration of the President and Vice

Yes
Presidents in its annual report accordingto relevant specifications.
Promote
sustainable
development		 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
materiality and establish relevant risk management policies or strategies with the
Board monitoring the promoting status of sustainable development, and disclosed
them on its website and in the annual report?

The Company has established a cross-departmental Sustainable Development


Yes
Committee in 2024.

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 and implementation status of the department established on
its website or in the annual report and reported to the Board at least once ayear?
The scale of the Company is relatively small, and the Company will make additions


No
based on the circumstances in the future.

Has the Company prepared its Sustainability Report in accordance with the GRI
standards issued bythe GRI and uploaded it to MOPS?

Yes		 The Company has uploaded the Sustainability Report on August 31, 2024.
Has the Sustainability Report prepared by the Company been verified by a third-party
certifyinginstitution?		 The scale of the Company is relatively small, and the Company will make additions

No
based on the circumstances in the future.
Has the Company established policies and substantial management plans to protect
human rights with reference to the International Bill of Human Rights and disclosed
policies and implementation status on its website or in the annual report?		 The Company has disclosed the protection policies related to working environments
and personal safety under the declaration of human rights protection of corporate

Yes		 governance in the investor section on its Chinese website. Indicator Category
Content of indicator Whether any improvement is made Descriptions of matters not
yet improved
Promote sustainable development Has the Company uploaded the English
Sustainability Report on MOPS and its website?		 The Company's scale is relatively small, and the foreign investment ratio is

No		 relatively low, and the Company will make additions based on the circumstances in
the future.

37

Promote
sustainable
development		 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 annual report?
The scale of the Company is relatively small, and the Company will make additions


No
based on the circumstances in the future.
Has the Company disclosed various employee benefit measures, retirement systems,
and the implementation status on its website and in the annual report?		 The Company has disclosed the employee benefit measures, retirement systems, and
implementation status in the annual report.

Yes
To date, the trade union has not submitted any request for collective bargaining
negotiations,and no collective bargainingagreement has been entered into.
Has the Company disclosed the annual water consumption and the total weight of
wastes in thepast twoyears?

Yes		 The Company will disclose relevant information in the Sustainability Report.
Has the Company established management policies for reducing water consumption,
or other waste management (including the reduction objective, promoting measures,
and the achievement)?


Yes		 The Company will disclose relevant information in the Sustainability Report.
Has the Company disclosed the identification of stakeholders, issues of concern,
communication channels, and response methods on its website or in the annual
report?
Yes The Company will disclose relevant information in the Sustainability Report.
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 implementation status?
Yes Execute according to relevant specifications.

Has the Company established and disclosed the details of the whistleblowing system
for illegal (including corruption) and unethical conduct of internal and external
personnel on its website?


Yes		 The Company will disclose relevant information in the Sustainability Report.
Has the Company disclosed the supplier management policies it formulated that
require suppliers to comply with relevant specifications on environmental
protection, occupational safety and health, or labor rights issues on its website or in
the annual report or the Sustainability Report and described the implementation
status?
Yes The Company will disclose relevant information in the Sustainability Report.
Has the Company disclosed the governing status, strategies, risk management,
indicators, objectives, and relevant information regarding risks and opportunities
related to climate based on the TCFD structure?
Yes The Company will disclose relevant information in the Sustainability Report.
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
sustainable development financial products with substantive benefits in green or
social impact investment projects, and disclose its investment situation and specific
benefits?
The scale of the Company is relatively small, and the Company will make
No
additions based on the circumstances in the future.
Has the Company established diversification policies or promoted gender equity
policies,and disclosed the implementation status?
Yes The Company will disclose relevant information in the Sustainability Report.
Has the Company assessed risks or opportunities to the community and taken
corresponding measures, and disclosed its specific measures and implementation
effectiveness on the Company's website,annual report,or sustainabilityreport?
The scale of the Company is relatively small, and the Company will make
No
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
report,or sustainabilityreport?
The scale of the Company is relatively small, and the Company will make

No
additions based on the circumstances in the future.

38

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

) If the Company has established its Remuneration Committee, the
composition, responsibilities, and operations of the Committee shall be
disclosed:		 ) If the Company has established its Remuneration Committee, the
composition, responsibilities, and operations of the Committee shall be
disclosed:		 ) If the Company has established its Remuneration Committee, the
composition, responsibilities, and operations of the Committee shall be
disclosed:		 ) If the Company has established its Remuneration Committee, the
composition, responsibilities, and operations of the Committee shall be
disclosed:		 ) 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
March31,2025
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 twoyears.
0
Independent
director
Independent
director
Chiang
Ming-
Hsiung		 National Taipei Institute of
Technology. Used to be the
chairman of 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 twoyears.
0
Independent
director
Chang
Kuo-Hwa		 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

39

  • 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:

are as follows:
Title Name Number of
attendance (B)		 Number of
attendance by proxy		 Attendance rate
(%) (B/A)		 Remarks
Convener Huang Yun-Ming 2 1 50
Committee
member		 Chiang Ming-
Hsiung		 2 0 100
Committee
member		 Chang Kuo-Hwa 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 2024 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
2024.08.09 1. Review and discussion of the proposal for the
distribution of employee remuneration and
Director remuneration in 2023
2. The proposal for the distribution of remuneration
for the Chairman and Directors
3. The proposal for the distribution of remuneration
for the managers
4. The proposal for the distribution of remuneration
for other managers
5. The proposal for the distribution of stock
ownership trust plan for managers and other
managers
6. Proposal for the working plan in 2025		 Approved by all
members of the
Remuneration
Committee		 Proposed to the Board
and approved by
receiving the consent of
all attending Directors
2025.03.13 1. Review and discussion of the proposal for the
distribution of employee remuneration and
Director remuneration in 2024
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

40

(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 The differences from the
Sustainable Development
Best Practice Principles
for TWSE/TPEx Listed
Companies and the
reasons therefor.
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.
Has the Company, in
accordance with the materiality
principle, conducted risk
assessments on environmental,
social, and corporate
governance (ESG) issues related
to its operations, and established
corresponding risk management
policies or strategies?

The Company has referred to the GRI Standards and industry-relevant topics to collect and screen a
list of sustainability topics related to its operations. Items identified as of moderate to high concern to
stakeholders have been designated as material topics for 2024, including one environmental topic,
one social topic, and five governance topics.
Relevant management policies have been established, with the evaluation boundary covering the
Taipei,Hsinchu,and Tainan offices.
None
ESG Aspect Material Topic Description
Governance Financial
Stability		 The Company’s financial statements are audited by a CPA
firm and financial and business information is updated and
disclosed in a timely manner. In line with industry
development and customer needs, the Company develops and
refines its core technologies and products to ensure future
growth momentum andprofitability.
Corporate
Governance		 The highest governance body effectively fulfills its
supervisory and management functions, with regular meetings
of the Board of Directors, Audit Committee, and
Remuneration Committee.
Business
Ethics		 An "Ethical Corporate Management Best Practice Principles"
has been established, and regular internal audits are conducted
to ensure compliance with laws and regulations.
Regulatory
Compliance		 The Company actively monitors relevant policies and
regulations, and to date, has not been subject to any significant
monetaryfines or other non-monetarysanctions.

41

Implementation Items Implementation Status Implementation Status The differences from the
Sustainable Development
Best Practice Principles
for TWSE/TPEx Listed
Companies and the
reasons therefor.
Yes No Summary description
Governance Information
Security		 Certified under ISO 27001 for information security. A 24/7
monitoring system is in place to detect abnormal activities,
and regular employee training and education on cybersecurity
areprovided.
Environmental Energy and
Resource
Management		 Certified under ISO 14001 for environmental management.
Promotes energy conservation, carbon reduction, water
resource conservation, and waste recycling, along with related
training programs.
Social Employee
Benefits		 Comprehensive leave and retirement systems are in place; the
Company has established an employee stock ownership trust
and an employee benefits committee.
III.
Environmental Issues
(I)
Has the Company set up
an appropriate
environmental
management system
based on the
characteristics of its
industry?
(II)
Is the Company
committed to improving
energy efficiency and to
the use of renewable
materials with low
environmental impact?
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 the program according to the management committee of the building.
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 appropriately adjusted
or turned off.








None
None

42

Implementation Items Implementation Status Implementation Status Implementation Status Implementation Status The differences from the
Sustainable Development
Best Practice Principles
for TWSE/TPEx Listed
Companies and the
reasons therefor.
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.
In 2024, the Company conducted its first greenhouse gas inventory, covering the headquarters
includingthe Hsinchu,Taipei,and Tainan offices.
2024
Scope 1
Scope 2
Total
Emissions
Emissions(metric tons CO2e/year)
57.25
753.93
811.18
Percentage
7.06%
92.94%
100%		 None

None
2024 Scope 1 Scope 2 Total
Emissions
Emissions(metric tons CO2e/year) 57.25 753.93 811.18
Percentage 7.06% 92.94% 100%

43

Implementation Items Implementation Status The differences from the
Sustainable Development
Best Practice Principles
for TWSE/TPEx Listed
Companies and the
reasons therefor.
Yes No Summary description
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?
(III)
Does the Company
provides employees
with a safe and healthy
working environment
and regularly organize
safety and health
education for
employees?




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.
The Company has established an "Occupational Safety and Health Management Committee" and
formulated the "Occupational Safety and Health Regulations," clearly outlining its commitments and
objectives. These regulations cover risk assessment, incident management, health services, and
continuous improvement, with regular internal and external audits and evaluations to ensure the
system operates effectively.
The Company provides 6 hours of occupational safety and health education and training for new
employees, and conducts training every three years for current employees. In addition, the
Company's Information Fire Safety Management Committee holds periodic fire safety reviews and
conducts two fire drills annually, which include scenarios such as earthquakes and occupational
safety and health.
In 2024, there were zero workplace accidents, zero occupational injuries, and zero occupational
diseases.		 None
None
None

44

Implementation Items Implementation Status Implementation Status Implementation Status Implementation Status The differences from the
Sustainable Development
Best Practice Principles
for TWSE/TPEx Listed
Companies and the
reasons therefor.
Yes No Summary description
(IV)
Has the Company
established an effective
career development
training program for
employees?		 The Company employs one occupational safety and health administrator with a Class B certification
and one operations supervisor with a Class A certification, both responsible for managing
occupational safety and health-related affairs and operations.
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.
Employee internal and external trainingin 2024:
Course
Total participants
Total training
hours
Internal
TechnologySummit
89 participants
299hours
On-site trainingcourses for new employees
9 participants
18 hours
Information security promotion
156participants
312 hours
ESG / ISO 14001 environmental
managementpromotion
270 participants
540 hours
Foreign language courses
105participants
105 hours
Others
24participants
14 hours
External
Finance & Accounting / Audit / Corporate
Governance
28 participants
163 hours
Occupational Safetyand Health
18participants
226.5 hours
Information Security
3participants
113 hours
Others
3participants
7 hours
Employee internal and external training in 2024
705 participants
1,797.5 hours		 None
Course Total participants Total training
hours
Internal TechnologySummit 89 participants 299hours
On-site trainingcourses for new employees 9 participants 18 hours
Information security promotion 156participants 312 hours
ESG / ISO 14001 environmental
managementpromotion		 270 participants 540 hours
Foreign language courses 105participants 105 hours
Others 24participants 14 hours
External Finance & Accounting / Audit / Corporate
Governance		 28 participants 163 hours
Occupational Safetyand Health 18participants 226.5 hours
Information Security 3participants 113 hours
Others 3participants 7 hours
Employee internal and external training in 2024 705 participants 1,797.5 hours

45

Implementation Items Implementation Status The differences from the
Sustainable Development
Best Practice Principles
for TWSE/TPEx Listed
Companies and the
reasons therefor.
Yes No Summary description
(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
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?
In 2024, the Company established a cross-departmental Sustainable Development Committee. Under
the committee, execution teams were formed based on functional responsibilities to identify ESG
material topics related to the Company’s operations, formulate management strategies and objectives,
and prepare the annual sustainability report.
Due to the Company's relatively small scale, third-party assurance or verification of the sustainability
report has not yet been planned. However, the Company has scheduled greenhouse gas verification to
be conducted in 2027.


The Company will
establish a dedicated
(concurrent) department
for corporate social
responsibility based on
the actual requirements
in the future.

46

Implementation Items Implementation Status Implementation Status Implementation Status The differences from the
Sustainable Development
Best Practice Principles
for TWSE/TPEx Listed
Companies and the
reasons therefor.
Yes No Summary description
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 41 to 47 of the handbook.

(6) Climate-Related Initiatives Implementation

) Climate-Related Initiatives Implementation
Item Implementation Status
1.
Describe the supervision and governance by the board of directors and management
regarding climate-related risks and opportunities.		 The Company regularly reports to the board of directors and conducts quarterly supervision of
greenhouse gas inventory and verification schedule planning. In June 2022, the Company appointed one
full-time (or part-time) facility staff member and established the following plans:
(I)
Inventory plan: October 2024
(II)
Verification plan: Scheduled for October 2027
2.
Describe how the identified climate risks and opportunities impact the Company’s
business, strategy, and financialplanning (short-, medium-, and long-term).		 Please refer to the Table 1 below
3.
Describe the financial impact of extreme weather events and transition actions.
4.
Describe how the identification, assessment, and management of climate risks are
integrated into the overall risk management framework.
5.
If scenario analysis is used to assess resilience to climate change risks, describe the
scenarios, parameters, assumptions, analytical factors, and key financial impacts.		 The Company has not yet conducted a scenario analysis. In the future, it will evaluate the adoption of
such analyses based on its specific circumstances to enhance resilience to climate-related risks.
6.
If there is a transition plan for managing climate-related risks, describe the plan’s
content, as well as the indicators and targets used to identify and manage physical
and transition risks.		 The Company has not yet formulated a transition plan for managing climate-related risks. In the future,
detailed risk assessments and planning will be carried out based on the Company’s specific conditions
to mitigate climate-related risks.
7.
If internal carbon pricing is used as a planning tool, describe the pricing basis.		 The Company does not currently use internal carbon pricing as a planning tool.
8.
If climate-related targets are set, describe the activities covered, the scope of
greenhouse gas emissions, the planning timeline, and annual progress; if carbon
offsets or renewable energy certificates (RECs) are used to achieve these targets,
provide the sources and quantities of offsets or RECs.		 In response to climate change, the Company has implemented an office energy-saving plan, starting with
reducing energy consumption in offices and among employees to minimize environmental impact.
Future implementation of greenhouse gas inventory and verification will follow the guidelines and
regulations issued by competent authorities.
9.
Status of greenhouse gas inventory and assurance, as well as reduction targets,
strategies, and specific action plans.		 As the Company’s paid-in capital is less than NT$5 billion, in accordance with FSC letter No.
11103849344, disclosure of greenhouse gas inventory and assurance results shall be completed starting
from 2026 and 2028, respectively. The Company will continue to manage the progress of these
disclosures in line with referenceguidelines and regulations issued bythe competent authority.

47

Table 1

ble 1
Aspect Issue Impact
**duration **		 Financial
impact		 Impact on the Company Response strategy
Physical risks Increased severity of
extreme weather
events such as
typhoons and floods		 Medium term Increased
operating costs,
increased
capital
expenditure
Extreme weather events may cause supply chain
disruptions, affecting the Company’s production
and even leading to temporary shutdowns.
Insufficient product supply may further impact
delivery schedules, resulting in increased costs or
product returns from customers. In addition,
extreme climate conditions may cause power
outages or traffic congestion near the plant,
disrupting
production
processes
and
raising
concerns about employee commuting safety,
thereby affecting the production environment and
work
efficiency,
and
ultimately
reducing
productivity.		  The Company has purchased flood and earthquake
insurance, building insurance, and business
interior renovation insurance to mitigate risks
caused by extreme climate events.
 A reasonable inventory management strategy has
been established, maintaining appropriate stock
levels and a secondary backup stock mechanism to
cope with supply chain disruptions or traffic
obstructions, aiming to minimize losses caused by
disasters.
 The Company continues to strengthen employee
training in response to natural disasters.
Opportunities Development and/or
expansion of low-
carbon products and
services		 Short term Increased
revenue,
reduced
operating costs
Environmental awareness regarding products or
services in the market will impact the Company,
including shifts in market demand, competitive
advantage,
business
model
innovation,
technological innovation, and environmental image.
Therefore, strengthening the development of
environmentally friendly products, building a
sustainable business model, and incorporating eco-
friendly concepts such as “low-pollution and
disassemblable product design” will help maintain
market competitiveness and achieve sustainable
development.		  The Company’s products comply with ISO 9001
quality
assurance
procedures,
ISO
14001
environmental management certification, ISO
27001 information security certification, and IEC
62443-4-1 (secure product development lifecycle)
certification.
 During the product design stage, emphasis is
placed on energy efficiency, ease of disassembly,
maintenance, and parts replacement, as well as the
use of recycled cardboard boxes.
Opportunities Adoption of energy-
saving measures		 Long term Increased
operating costs
The Company’s greenhouse gas emissions are
mainly derived from purchased electricity. Rising
electricity costs pose significant pressure on
corporate carbon reduction. The use of renewable
energy not only effectively reduces carbon
emissions but also aligns with government policies
to save electricity and lower operating costs,
contributing to an enhanced environmental image.
In response to the future trend of green energy, this
also offers a market advantage.		 The Company has allocated a budget to replace
outdated equipment with energy-efficient products to
reduce electricity expenses and lower carbon
emissions.

48

(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

Evaluation Items The State of Operation Differences from the Ethical
Corporate Management Best
Practice Principles for
TWSE/TPEx Listed Companies
and the reasons for the differences
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?



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.
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

49

Evaluation Items The State of Operation Differences from the Ethical
Corporate Management Best
Practice Principles for
TWSE/TPEx Listed Companies
and the reasons for the differences
Yes No Summary description
(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 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
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
(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?

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.
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

50

Evaluation Items The State of Operation The State of Operation The State of Operation Differences from the Ethical
Corporate Management Best
Practice Principles for
TWSE/TPEx Listed Companies
and the reasons for the differences
Yes No Summary description
(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?

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
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?
(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 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.
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
Compliant with the Ethical
Corporate Management Best
Practice Principles for
TWSE/TPEx Listed Companies

51

Evaluation Items The State of Operation The State of Operation The State of Operation Differences from the Ethical
Corporate Management Best
Practice Principles for
TWSE/TPEx Listed Companies
and the reasons for the differences
Yes No Summary description
(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) Other important information to facilitate a better understanding of the Company's implementation of corporate governance: None.

(9) Implementation of internal control system

  • A. The Company has established an internal control system in accordance with regulations and continues to have the internal audit unit perform audits and follow-ups based on the audit plan. The 2024 Internal Control System Statement can be found in the announcements on the Market Observation Post System (MOPS). (MOPS's website:https://mops.twse.com.tw/mops/#/web/t06sg20 /Path: MOPS > Listed Company > Corporate Governance > Company Rules/Internal Control > Internal Control System Statement Announcement)

  • 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.

52

  • (10) 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

status
Time Material resolution of the shareholders'
meeting:		 Implementation Status
2024/06/25 Material resolution of the 2024 annual
shareholders' meeting:
Report Items
1. The 2023 business report
2. 2023 Audit Committee's Review
Report
3. The report of the distribution of
remuneration of employees and
remuneration of Directors and
supervisors in 2023
Ratification
1. Approved the 2023 business report,
consolidated financial statements, and
parent company only financial
statements
2. Approved the proposal for earning
distribution for 2023		 Approved as a resolution.
September 2, 2024 was set
as the ex-dividend date, and
September 16, 2024 was the
cash dividends distribution
date.

B. Board of Directors meeting

Meeting date
(term)		 Motion content Opinions of all Independent
Directors and the
Company's response to the
opinions of Independent
Directors
2024/08/09
(The 3rd
regular
meeting in
2024)		 1.
Reviewed and discussed the 2024 Q2
consolidated financial statements and parent
company only financial statements.
2.
Proposal for the distribution of employee
remuneration and Director remuneration in
2023.
3.
Proposal for the remuneration of managers
in 2023.
4.
Proposal for the remuneration of other
managers in 2023.
5.
Proposal for the distribution of stock
ownership trust plan for managers and other
managers.
6.
Proposal for the working plan of the
Remuneration Committee in 2025.
7.
The Company intends to apply for the
rollover of the comprehensive loan limits
with Mega International Bank in the
amount ofNT$40million.

Approved by receiving the
consent of all attending
Directors

53

Meeting date
(term)		 Motion content Opinions of all Independent
Directors and the
Company's response to the
opinions of Independent
Directors
8.
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.
9.
Cumulative performance for contracting
operations of derivatives (pre-sale forward
exchange).
10. The Company matters related to the ex-
dividend date in 2024.
11. Auditor Appointment Cases.
2024/11/08
(The 4th
regular
meeting in
2024)		 1.
Reviewed and discussed the 2024 Q3
consolidated financial statements and parent
company only financial statements.
2.
Proposal for the 2025 annual audit plan of
the Company.
3.
Established the “Operating Procedures for
the Preparation and Assurance of the
Sustainability Report.”
4.
Cumulative performance for contracting
operations of derivatives (pre-sale forward
exchange).
5.
The Company intends to apply for a short-
term (secured) loan of NT$100 million
from Yuanta Commercial Bank.
Approved by receiving the
consent of all attending
Directors
2025/03/13
(The 1st
regular
meeting in
2025)		 1.
Reviewed and discussed the 2024
consolidated financial statements and parent
company only financial statements.
2.
Proposal for the distribution of employee
remuneration and Director remuneration in
2024.
3.
Proposal for earning distribution for 2024.
4.
The amendments to the "Articles of
Incorporation".
5.
Changes of the CPAs due to Internal
operational rotation of the CPA firm
6.
Proposal for the remuneration of managers
and Directors.
7.
Proposal for the remuneration of other
managers.
8.
Proposal for the performance evaluation of
the Board in 2024.
9.
Cumulative performance for contracting
operations of derivatives (pre-sale forward
exchange).
Approved by receiving the
consent of all attending
Directors

54

Meeting date
(term)		 Motion content Opinions of all Independent
Directors and the
Company's response to the
opinions of Independent
Directors
10. The Company intends to continue with two
additional short-term comprehensive credit
lines of NT$80 million and NT$72 million
respectively from Yuanta Commercial
Bank.
11. Evaluation of the effectiveness of the
internal control system and the "Statement
of Internal Control" in 2024.
12. Proposal for the full re-election of directors.
13. Proposal to lift the non-competition
restrictions on newly elected directors.
14. The Board of Directors meeting to discuss
matters pertaining to the 2025 annual
shareholders' meeting.
15. Proposal for establishing matters related to
the acceptance of shareholders' proposals in
2024.
16. Proposal for the Company to establish
procedures for accepting the nomination of
director and independent director
candidates by shareholders.
17. Proposal for the 2025 business plan.
2025/05/13
(The 2nd
regular
meeting in
2025)		 1.
Reviewed and discussed the 2025 Q1
consolidated financial statements and parent
company only financial statements.
2.
Cumulative performance for contracting
operations of derivatives (pre-sale forward
exchange).
3.
Proposal regarding the nomination of
director and independent director
candidates and the review procedures for
the nominees.
4.
The report of the acceptance of
shareholders' proposals for the 2025 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):

55

  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 2024. 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 2024, there were no abovementioned special circumstances. The communication between Independent Directors and CPAs is healthy.

  4. (11) 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.

3. 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 non-audit 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
(Note 2)		 Subtotal
Deloitte &
Touche Taiwan		 Huang Yu-Feng
Tseng Jian-Ming		 2024/1/1~
2024/12/31
2,860
0
0
0
290
290		 3,150

  • 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.

  • 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.

56

4. Information on replacement of CPAs

(1) Former CPAs

Date of change From 2025 Q1

1)
Former CPAs
Date of change From 2025Q1
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 two years
and reason		 Not applicable
Whether CPAs have
any opinion different
from the issuer		 Yes Accounting principles or practices
Disclosure of financial reports
Scope or stepof audit
Others
None
Description: Not applicable
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 Wen Chih-Yuan
Yeh Dong-Hui
Appointment date From 2025Q1
Consultation matters regarding the
treating method or accounting
principles of particular transactions
and opinions that may be issued for
the financial statements and results		 Not applicable
Written opinion of succession CPAs
for matters
with opinions different from the
former CPAs		 Not applicable

57

  • (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) The evaluation of the independence and adequacy of the Company's CPAs:

The Company conducts an annual assessment of the independence of its CPAs based on the following standards:

  • A. Obtain an independence declaration issued by the CPAs.

  • B. Establish assessment items based on the Audit Quality Indicators (AQIs) published by the competent authority and with reference to R.O.C. CPA Professional Ethics Bulletin No. 10 “Integrity, Fairness, Objectivity, and Independence” to compile the evaluation results of the CPAs’ independence and adequacy.

After thorough communication with the engaged CPAs, the Company evaluates their adequacy one by one and has not identified any circumstances that may affect the independence or adequacy of the CPAs.

The most recent assessment results were approved by the Audit Committee on March 13,

2025, and subsequently approved by the Board of Directors on the same date.

5. 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.

6. 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:

  • (1) Information on the transfer of equity: Please refer to the announcement on the Market Observation Post System (MOPS) for details.

MOPS's website ： https://mops.twse.com.tw/mops/#/web/query6_1

  • Path ： MOPS > Individual Company > Equity Changes/Securities Issuance > Share Transfer Data Query > Post-Event Filing of Insider Share Transaction Changes

  • (2) Information on the pledge of equity: Please refer to the announcement on the Market Observation Post System for details.

MOPS's website ： https://mopsov.twse.com.tw/mops/web/STAMAK03_1

  • Path ： MOPS > Individual Company > Equity Changes/Securities Issuance > Insider Pledge/Unpledge > Insider Pledge/Unpledge Announcements

58

7. 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% 1,223 2.16% 0 0 Chen Hua-Ling
Yeh Li-Tung		 Spouse
Daughter		 -
Chen Hua-Ling 1,223 2.16% 5,626 9.92% 0 0 Yeh Maw-Lin
Yeh Li-Tung		 Spouse
Daughter		 -
Yeh Li-Tung 1,115 1.96% 0 0 0 0 Yeh Maw-Lin
Chen Hua-Ling		 Daughter
Daughter		 -
ChangShih-Lung 987 1.74% 0 0 0 0 None None -
Citibank (Taiwan) Ltd.
as custodian for UBS
Europe SE Investment
Account		 744 1.31% 0 0 0 0 None None -
Tsai Ho-Chin 606 1.07% 0 0 0 0 None None -
HSBC (Taiwan) Ltd. as
custodian for Morgan
Stanley Investment
Account		 547 0.96% 0 0 0 0 None None -
Yuanta Commercial
Bank as custodian for
Loop
Telecommunication
International Inc.
Employee Trust Fund
Account		 408 0.72% 0 0 0 0 None None -
Liu Shih-Chang 400 0.71% 0 0 0 0 None None -
HSBC (Taiwan)
Commercial Bank Ltd.
as custodian for
Macquarie Group
Limited – Principal
Trading Platform
Investment Account		 339 0.60% 0 0 0 0 None None -

8. 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; %

Unit: Share;% Unit: Share;%
Investee (Note) Ownership by the Company Investments of Directors, managers
and any companies controlled either
directly or indirectly by the
Company		 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.

59

(III) 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)
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
1995.01 NT$10 22,500,000 shares
225,000,000		 12,000,000 shares 120,000,000 - - -
1997.09 NT$10 22,500,000 shares
225,000,000		 19,500,000 shares 195,000,000 Capital increase 14,550,000 (Note 1)
1999.09 NT$10 36,500,000 shares
365,000,000		 22,500,000 shares 225,000,000 Capital increase 5,587,500 (Note 2)
1999.09 NT$10 36,500,000 shares
365,000,000		 29,000,000 shares 290,000,000 Capital increase from
earnings		 None (Note 3)
2000.09 NT$10 47,160,000 shares
471,600,000		 39,165,000 shares 391,650,000 Capital increase from
earnings		 None (Note 4)
2001.09 NT$10 97,320,000 shares
973,200,000		 52,200,000 shares 522,000,000 Capital increase from
earnings		 None (Note 5)
2002.08 NT$10 128,000,000 shares 1,280,000,000 63,654,000 shares 636,540,000 Capital increase from
earnings		 None (Note 6)
2004.02 NT$10 128,000,000 shares 1,280,000,000 64,927,266 shares 649,272,660 Convertible corporate
bonds		 None (Note 7)
2004.11 NT$10 128,000,000 shares 1,280,000,000 65,239,998 shares 652,399,980 Convertible corporate
bonds		 None (Note 7)
2005.07 NT$10 128,000,000 shares 1,280,000,000 68,909,100 shares 689,091,000 Convertible corporate
bonds		 None (Note 8)
2005.11 NT$10 128,000,000 shares 1,280,000,000 69,371,204 shares 693,712,040 Convertible corporate
bonds		 None (Note 8)
2006.04 NT$10 128,000,000 shares 1,280,000,000 70,544,948 shares 705,449,480 Convertible corporate
bonds		 None (Note 8)
2006.08 NT$10 128,000,000 shares 1,280,000,000 70,591,158 shares
705,911,580		 Convertible corporate
bonds		 None (Note 8)
2006.10 NT$10 128,000,000 shares 1,280,000,000 71,663,242 shares 716,632,420 Convertible corporate
bonds		 None (Note 8)
2007.02 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)
2007.06 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)
2007.08 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)
2007.10 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)
2008.01 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)
2008.07 NT$10 128,000,000 shares 1,280,000,000 82,210,750 shares 822,107,500 Convertible corporate
bonds		 None (Note 9)
2008.12 NT$10 128,000,000 shares 1,280,000,000 79,210,750 shares 792,107,500 Cancelation of treasury
stock		 None (Note 10)
2009.10 NT$10 128,000,000 shares 1,280,000,000 78,176,650 shares 781,766,500 Capital reduction
through treasuryshares		 None (Note 11)
2009.12 NT$10 128,000,000 shares 1,280,000,000 77,639,650 shares 776,396,500 Cancelation of treasury
stock		 None (Note 12)
2010.03 NT$10 128,000,000 shares 1,280,000,000 78,192,750 shares 781,927,500 Employee stock options
None		 (Note 13)
2010.07 NT$10 128,000,000 shares 1,280,000,000 78,194,750 shares 781,947,500 Employee stock options
None		 (Note 14)
2010.09 NT$10 128,000,000 shares 1,280,000,000 78,209,900 shares 782,099,000 Employee stock options
None		 (Note 15)
2011.01 NT$10 128,000,000 shares 1,280,000,000 78,222,550 shares 782,225,500 Employee stock options
None		 (Note 16)
2011.12 NT$10 128,000,000 shares 1,280,000,000 72,885,550 shares 728,855,500 Cancelation of treasury
stock		 None (Note 17)
2012.06 NT$10 128,000,000 shares 1,280,000,000 70,920,550 shares 709,205,500 Cancelation of treasury
stock		 None (Note 18)
2023.08 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)-TaiCai-Zheng-(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).

60

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 27,2025 / Unit: shares April 27,2025 / 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) List of major shareholder

(2) List of major shareholder
Shares
Name of major shareholder		 Shares (thousand
shares)		 Shareholding ratio (%)
Yeh Maw-Lin 5,626 9.92%
Chen Hua-Ling 1,223 2.16%
Yeh Li-Tung 1,115 1.96%
Chang Shih-Lung 987 1.74%
Citibank (Taiwan) Ltd. as custodian for UBS Europe SE
Investment Account
744		 1.31%
Tsai Ho-Chin 606 1.07%
HSBC (Taiwan) Ltd. as custodian for Morgan Stanley
Investment Account
547		 0.96%
Yuanta Commercial Bank as custodian for Loop
Telecommunication International Inc. Employee Trust
Fund Account

408		 0.72%
Liu Shih-Chang 400 0.71%
HSBC (Taiwan) Commercial Bank Ltd. as custodian for
Macquarie Group Limited – Principal Trading Platform
Investment Account

339		 0.60%

61

(3) 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.

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 2024, earnings available for distribution was NT$195,603,864, and the Company intends to distribute NT$3.3 per share (totaling NT$187,230,252). The proposal is awaiting approval from the 2025 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 2024 is expected to be resolved at the annual shareholders' meeting to be convened in 2025.

62

Loop Telecommunication International, Inc. Table of Earning Distribution

2024

(In New Taiwan Dollars)
Item Amount
Undistributed earnings at the beginning of the period 3,372,868
Net income in 2024 209,056,336
Add: Remeasurement of defined benefit obligation
recognized in retained earnings		 4,418,819
Amount of net income of the period plus items other than net
income of the period
included in the undistributed earnings of the year 213,475,155
Less: Legal reserve (21,347,516)
Add: Reversal of special reserve according to the law 103,357
Earnings available for distribution for the year 195,603,864
Less: Cash dividends of shareholders (Note 4) (187,230,252)
Undistributed earnings at the end of the period 8,373,612

  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.

  1. 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.

  1. The cash dividend for this period is calculated based on the outstanding shares as of February 28, 2025, totaling 56,736,440 shares. The dividend payment is NT$3.3 per share.

63

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

  • (5) 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.

64

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 2024 earning distribution of the Company was approved by the Board as a resolution on March 13, 2025; the intended earning distribution approved by the Board is as follows. Treatment for the amount of differences: None.
Item Estimated amount
in 2024
Approved by the Board
for distribution in 2024		 Difference
Employee
compensation		 27,473,535
27,473,535
0
Directors'
compensation		 5,494,707
5,494,707
0
Total 32,968,242
32,968,242
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 2024, the estimated earnings per share were equivalent to the amount accounted for in the financial statements.

  • 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 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

65 

     - 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 2023, the estimated earnings per share were equivalent to the amount accounted for in the financial statements.
  • (6) 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.

66

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.

    • 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.

(IV) 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

67

its components, high-speed digital user transmission systems and their components, and DLCs.

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

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

  3. Convertors, remote controls for cable TVs, and their components.

  4. Communication system power supply units and their components.

  5. Radio communication systems and their components.

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

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

(2) Industry overview

A. Current status and development of the industry

In 2024, Taiwan's telecommunications industry benefited from global broadband infrastructure expansion and growing demand for Wi-Fi 6/6E products, which also boosted the momentum of shipment. However, inventory pressure in the first half of the year restrained overall growth. The industry’s output value for 2024 is estimated at approximately NT$1.28 trillion, representing a 2.1% decline compared to 2023. Looking ahead to 2025, the development of Taiwan's telecommunications industry will be driven by ongoing integration and innovation in technologies such as AI, IoT, cloud computing, and satellite communications, which will continue to stimulate market demand for communication equipment and solutions. The industry’s output value is projected to reach NT$1.29 trillion in 2025, reflecting a yearover-year growth of 1.2%.

In 2025, AI technology is expected to be more widely integrated across the information and communications technology sector, accelerating the development of AI PCs, smart terminal devices, and humanoid robots. It will also demonstrate strong integration capabilities in cloud, edge computing, and IoT application scenarios. Moreover, data privacy and AI governance are gaining increasing attention. Individuals, enterprises, and governments will face more complex AI-related risks and digital trust challenges. Establishing secure and compliant mechanisms for data processing and model deployment will be critical for industry development.

Globally, the 5G sector has entered the post-5G and 6G research and development phase. Taiwan is also actively promoting millimeter wave applications, private network deployments, and implementation in vertical fields, driving upgrades in network communication equipment and fostering growth in emerging applications. Nevertheless, the telecommunications industry also faces transformation and challenges due to geopolitical risks, pressures for technological self-sufficiency, difficulties in acquiring key components, and competition over international standards.

68

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 [447 x 184] intentionally omitted <==

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

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

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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.

  • 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

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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 (LTEAdvanced/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,

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T-Mobile, and other major mobile telecommunication companies in Europe and America have also commenced the commercial services by adopting the NBIoT technologies launched by 3GPP in 2017, becoming new business opportunities worthy of attention in the wireless WAN industry.

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 Telecom 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.

  • 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

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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.

(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)
Item/year 2019 2020 2021 2022 2023 2024
Net revenue 544,995
598,096
515,510
438,242
649,097
649,951
Research and
development expenses		 133,994
139,363
140,729
134,715
152,224
158,505
Ratio of R&D
expenses to net
operatingincome		 24%
23%
27%
31%
23%
24%

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

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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 (4pair 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) time-slot 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. Loop-AM 3440-B: 2.5U exchange multiplexers with multiple low-speed daughter cards to connect to the interface.

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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 lowspeed daughter cards to connect to the interface.

Loop-V 4200-28: exchange multiplexers with multiple lowspeed 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 TDMoE 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 TDMoE 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

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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/IP6716TDMoE/IP6702-TDMoE/AM3440-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 (TDMoE); transmit data on Ethernet via TDM network (EoPDH-IP inverse multiplexer); TDMoE (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 TDMoE circuit simulator. In 2011, the Company completed the Loop-IP 6702, which is a 2- E1 TDMoE circuit simulator with low costs. The development of the product focuses on the 2-E1 TDMoE circuit simulators required in the markets of developing countries. In 2014, the Company developed Loop-IP 6763, which provides 63E1/STM-1 TDMoE circuit simulators. Therefore, the Company is able to provide comprehensive TDMoE 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

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device (2) IP mobile backhaul) (3) 1G/10Gbps gigabit multiaccess platform) (4) industrial Ethernet. (5) High-speed 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, Loop-O9500R, 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. (PTN: with high speed and large bandwidth of up to 10Gbps to provide high-capacity fiber loop backbone applications for Loop-O9400R 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

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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 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. Loop-iNMS successfully drove the sales of the full series products of the Company and became the top series; 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

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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

For many years, Loop Telecom has provided customers with comprehensive solutions for mission-critical communications (MCC), spanning from the user access layer to the network core layer. Currently, in key mission-critical communication networks for sectors such as power utilities and government agencies, business operations are gradually shifting toward IP data, video, and cloud services. The traditional SDH/SONET backbone network infrastructure, built on TDM technology, is increasingly constrained by the limited flexibility of SDH bandwidth utilization and the high cost of upgrades, and is thus expected to gradually phase out of the mainstream market. As a result, over the next 5 to 10 years, it is anticipated that most users will transition to solutions based on packet transmission technologies, ushering in a new wave of backbone infrastructure replacement. To contend with rapidly changing market needs, Loop Telecom'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 to provide excellent transition plans for customers during the transitional period. 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. 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. Building upon these innovative technologies, Loop Telecom'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. To seize highly competitive orders and contracts, the development of the new G7800 product is being accelerated, along with strengthened R&D management. In the MCC switch market, the Company is committed to launching solutions that meet market demands and stand up to rigorous validation. Currently, several major international companies have expressed interest in initiating ODM cooperation with the Company, and development of the next-generation switch solution has already commenced. At the same time, the commercialization of

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cybersecurity solutions is being expedited to enter the market and generate revenue as soon as possible, with a strong emphasis on promotion and effective management. Loop Telecom will expand its 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 Telecom with the international society, in the next generation of solutions, Loop Telecom's development team will integrate product software and hardware functionalities to develop vertically integrated maintenance services for international market customers, which is certain to bring more orders and enhance operational performance. Combining the MCC networking product portfolio under the new business and expanding the niche of various products, it is likely to become the growth focus for operations in the future.

Our goal is to enter the top three in the utility market and become the leading brand in MCC transmission 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 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 is prominently launching its flagship model, the Loop-G7800, positioned as a next-generation PTN high-bandwidth multi-functional transmission access device. It marks Loop Telecom's official entry into the MCC field, expanding both its product portfolio and technological depth. 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 Company also continue to develop a dozen types of interface cards that accommodate multiple rates of service. This enables support for a range of network interfaces from traditional lowspeed 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.

With the Loop-G7800 integrating multiple key core advantages, customers will gain greater flexibility and foresight in network planning. Whether for phased implementation under budget-constrained projects or full-scale upgrades to next-generation transmission architectures, the G7800 series is fully equipped to support such needs. The product has already attracted significant attention from numerous partners, and its future growth potential is highly promising.

Except for the major backbone and access network product series used worldwide, Loop Telecom 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

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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 security of corporations and the government have been increasing. Loop Telecom has obtained ISO27001 and IEC62443-4-1 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 LoopISS2110 government configuration baseline network setting management system to assist customers in establishing the optimized MCC information security 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. In 2024, the Company also developed MPLS-TP transmission capabilities on the AM3440 platform, enabling it to serve as an edge node for small-scale MPLS core networks. This provides customers with a flexible deployment solution that supports multi-service integration, lowlatency transmission, and highly stable operation under various conditions, ranging from 5U to 1U access network levels and space constraints.

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 highperformance "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

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(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:

  1. 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 0.2-0.25dB per km.

  2. 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.

  3. 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.

  4. 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.

  5. 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.

  6. D. Optical fiber materials are generally quartz glass, which has noncorrosive, 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.

  7. E. They won't be affected by electromagnetic waves, applicable to fields that may be easily stroke by lightning or high power fields, significantly improving the fidelity for communication.

  8. 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

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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.

Due to the numerous advantages of optical fiber systems, the Company has developed several optical fiber system products, such as the LoopO9500R PTN and Loop-O9400R PTN optical Transport Network (OTN) multiplexer equipment. These devices are widely used across global markets, including Taiwan's power systems, transportation, government, and military communication networks. Their high reliability, stability, diverse access interfaces, and customizable interface card designs have reinforced the Company’s leading position in the optical fiber transmission equipment market.

In addition to providing backbone network transmission capabilities, the Company’s optical fiber multiplexer equipment is designed to prevent single points of failure, making it a critical component for ensuring the stable operation of transmission networks. Only network equipment with high fault tolerance and effective downtime risk reduction can guarantee continuous and stable service, delivering a truly reliable network experience.

However, with the advancement of telecommunications technology and the smartification of infrastructure, modern communication protocols can no longer be efficiently transmitted over traditional TDM (Time Division Multiplexing)-based networks. As these legacy networks approach the end of their service life and the availability of spare components diminishes, the industry is actively transitioning to the development of next-generation optical fiber telecom transmission equipment.

The migration from TDM to MPLS-TP-based Packet Transport Network (PTN) has become an inevitable technological evolution. Multiprotocol Label Switching Transport Profile (MPLS-TP) integrates the advantages of packet switching with traditional transport network characteristics and is poised to become the mainstream technology for future carrier networks. Its operational layer is situated between Layer 2 and Layer 3 of the OSI model, commonly referred to as “Layer 2.5,” and it supports labelswitched paths, multi-service transport, and various physical layer technologies.

MPLS-TP technology offers the following features:

  • Incorporates transport-grade Operation, Administration & Maintenance (OAM ) mechanisms, which effectively detect, identify, and locate user-layer faults. It also enables rapid protection switching in the event of link or node failures, thereby reducing maintenance costs.

  • Combines Layer 2 and Layer 3 protocols through a universal packetswitched transport technology.

  • Offers high network survivability and scalability.

  • Compatible with packet switching, TDM, and wavelength technologies,

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with a universal and distributed control plane architecture.

In summary, MPLS-TP is a core trend in the future development of network technologies. As such, the Company has developed the LoopO9500 PTN and Loop-O9400 PTN transmission multiplexer devices, which represent a new generation of high-capacity fiber optic transmission network equipment. These devices are capable of simultaneously supporting two transmission networks within a single chassis, such as: 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 STM16/OC-48, STM-4/OC-12, STM-1/OC-3, DS3, E3, E1, T1, Ethernet, MPLS-TP PTN. It features 100G switching capacity and supports the aggregation of 10G and 1G Ethernet bandwidth interfaces for longdistance backbone transmission over 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 multiservice 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 LoopIP 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

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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.

With the rapid development of networks, various emerging services such as Triple Play, Carrier Ethernet (CE), and FTTx have raised higher requirements for traditional packet transport networks. These include aspects such as investment costs, operation and maintenance costs, QoS assurance, service access, network scalability, reliability, and manageability. Compared to traditional transport networks like SDH/SONET, which lack a control plane and cannot meet these new demands, the Company’s G7860A has been designed with MPLS-TP transport network capabilities and supports next-generation packet transport networks with packet service handling capabilities. The G7860A MPLS-TP packet transport network provides 80G switching capacity and supports 10G and 1G Ethernet bandwidth interfaces, enabling signal aggregation and multiplexing for long-distance transmission via optical cables as part of the backbone network architecture. This transmission equipment features multiple protection mechanisms, such as LSP 1+1 / 1:1 protection with automatic rerouting. It supports a multi-service integration platform that interconnects service locations via optical fiber interfaces, forms relay transmission paths, and integrates various service interfaces to meet data exchange needs across different regions. Its protocol and protection mechanism allow for switching times of less than 50ms, ensuring uninterrupted communication.

Since traditional transport networks have already established high

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standards in reliability and maintenance, MPLS-TP must be equipped with comprehensive OAM capabilities, which primarily include:

  • Fault Management

  • Performance Monitoring

  • Protection Switching

MPLS-TP OAM can monitor the forwarding and connectivity status of network links in real time and provides a basis for evaluating network performance. When a link failure occurs, it assists operators in quickly switching to a backup path to maintain network stability and reliability. 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.

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 convergence of IT/OT networks and the rapid advancement of global digital transformation, today’s critical infrastructure networks place greater emphasis on network resilience and information security than ever before. In addition to successively adopting international standard certifications such as ISO 27001, IEC 62443-4-1, and FIPS 1403, the Company has also introduced solutions tailored for traditional OT network administrators. These include mechanisms to prevent single points of failure in DCN management channels, security gateway devices featuring SPI/IDS/IPS/DPI functions, and integrated network management solutions compliant with international cybersecurity regulations. 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. From end-to-end service planning and automated circuit provisioning to advanced and rapid network diagnostics and micro-segmentation

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technology based on network security, the Company provides customers with simple and effective upgrade solutions. These offerings significantly reduce operational and capital expenditure costs associated with system replacement, while comprehensively enhancing the quality and efficiency of service 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 above implementations of cybersecurity solutions, integration of AI intelligent technologies, and comprehensive incorporation of MPLS products, the Company’s network management solutions have gained strong interest and trust from major clients and multiple projects. Looking ahead, the Company will continue to make significant strides in the network infrastructure of critical sectors such as transportation, aviation, energy, defense, public safety, and oil and gas.

5G base station transmission equipment

  • e. 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. The new generation of 5G CPE not only delivers highspeed Ethernet services but also supports customers' existing on-site operations, meeting enterprise users' ongoing demands for voice, dedicated lines, and industrial control services. This integration capability simplifies the equipment complexity within the layered architecture of private 5G networks, reduces operational costs, and enhances deployment efficiency and timelines. For enterprises and operators in a critical phase of digital transformation, it serves as a vital bridge between existing infrastructure and future all-IP architectures.

C. Estimated completion progress of the unfinished R&D plan
Project Estimated completion time
G7800_GFEO_phase 1 Estimated to complete the development in
March 2025
G7800B-CC2-FL Estimated to complete the development in
March 2025
G7800_32TE1_Phase2-c Estimated to complete the development in
March 2025

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Project Estimated completion time
G7800_32TE1_FR Estimated to complete the development in
March 2025
G7800_XCU Estimated to complete the development in
April 2025
G7800-B_JEVO Phase 1-3 Estimated to complete the development in
May2025
G7800_CC4M_HW Estimated to complete the development in
August 2025

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 2024 2025 2026
Net revenue (the Company did not
disclose its financial forecast)		 Not
applicable		 Not
applicable		 Not
applicable
Research and development expenses 171,015 179,566 188,544
Ratio of R&D expenses to net
operatingincome		 Not
applicable		 Not
applicable		 Not
applicable

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

required to be invested:
Project Commencement
date of plan
Initial
completion
date
Estimated
completion
date
Current
completion
progress
G7800_GFEO_phase 1 2024/4/15 2025/3/3 2025/3/3 75.30%
G7800B-CC2-FL 2024/9/18 2025/3/5 2025/3/5 55.20%
G7800_32TE1_Phase2-c
2024/6/24		 2025/3/17 2025/3/17 92.40%
G7800_32TE1_FR 2024/9/9 2025/3/25 2025/3/25 55.70%
G7800_XCU 2024/6/3 2025/4/30 2025/4/30 62.50%
G7800-B_JEVO Phase
1-3		 2024/7/1 2025/6/5 2025/6/5 94.70%
G7800_CC4M_HW 2024/7/1 2025/8/22 2025/8/22 31.30%

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

Item R&D plans in the most
recentyear		 Major factors affecting the success of R&D
1 G7800_GFEO_phase 1 a. New Software and Architecture design
b. New Mechanism/Platform
c. Man power management
2 G7800B-CC2-FL a. New CPU/FPGA ((Automotive grade) new
Architecture
b. Man power management
c. Highly experienced and technically
proficient engineer with deep domain
knowledge
3 G7800_32TE1_Phase2-c a. New Software and Architecture design
b. Man power management
4 G7800_32TE1_FR a. New Architecture
b. Man power management
c. Highly experienced and technically
proficient engineer with deep domain
knowledgeNew Software and Architecture
design
5 G7800_XCU a. Man power resource
b. New software architectureNew Software
and Architecture design
6 G7800-B_JEVO Phase 1-3
a. Mutual adjustments with GE causing
development delays
b. Hardware compatibility
7 G7800_CC4M_HW a. New Architecture design
b. Man power management

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

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

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 self-owned 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$649,951 thousand, with a net income of NT$209,057 thousand and earnings per share were NT$3.68. 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

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terms of financial structure, solvency, accounts receivable turnover, and other financial indicators.

a-3 Investment:

In 2013, Loop Telecom 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 Telecom offers a product line that includes over 60 products. In response to the aforementioned demands, the Company has in recent years focused on developing new products such as the flagship Loop-G7800, a next-generation PTN high-bandwidth multi-functional transmission access device. Additionally, it has launched hybrid service multiplexer equipment including the G7860A, WDM1800, O9400-PTN10G, and O9500-PTN10G. 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.

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 self-own 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. America, the EU, and the Taiwan markets all performed well, while Southeast Asia experienced a slight decline. 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 accounted for 80% of our total revenue, and communication and transportation markets accounted for approximately 15%. 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

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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 34 product lines and has business dealings with 45 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.

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. Exports accounted for about 75% of the annual revenue. America, the EU, and the Taiwan markets all performed well, while Southeast Asia experienced a slight decline.

Unit: (In Thousands ofNewTaiwan Dollars) Unit: (In Thousands ofNewTaiwan Dollars) Unit: (In Thousands ofNewTaiwan Dollars) Unit: (In Thousands ofNewTaiwan Dollars) Unit: (In Thousands ofNewTaiwan Dollars) Unit: (In Thousands ofNewTaiwan Dollars)
Year 2022 2023 2024
Sales region Sales amount % Sales amount % Sales amount %
Domestic 107,240
24
204,480
32
161,237
25
Overseas America 101,558
23
118,741
18
234,419
36
Europe 85,562
20
209,894
32
177,650
27

Asia		 102,028
23
87,222
14
61,516
10
Others 41,854
10
28,760
4
15,129
2
Subtotal 331,002
76
444,617
68
488,714
75
Total 438,242
100
649,097
100
649,951
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 2023 and 2024 and the future insight into the market sales are as follows.

a. Sales (provision) region of major products (services):
Region/year 2023 2024
Domestic 32%
25%
Asia 14%
10%
Africa 1%
0%

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Region/year 2023 2024
America 18%
36%
Europe 32%
27%
Others 3%
2%
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 26%/0.013%, SDH series 15%/0.008%, iNMS 4%/0.002%, MPT series 39%/0.02%, and others 16%/0.008%.

c. Insight into the demand/supply and growth potential of the market in the future

Since 2021, the output value of Taiwan's telecommunications industry has shown steady growth, with expectations for further improvement in 2025. Despite global challenges such as geopolitical conflicts, inflationary pressures, and high interest rates, the global telecommunications market is still projected to develop positively. Companies are shifting their focus from coverage expansion to increasing capacity, reducing latency, and enhancing user experience, thereby driving demand for network infrastructure upgrades. Foundational equipment such as macro cells, small cells, switches, and routers, along with key technologies like carrier aggregation (CA), Wi-Fi 6/6E/7, and advanced small cell technologies (e.g., LWA), will continue to evolve toward higher speeds, multi-band support, and lower power consumption. Next-generation mobile communication applications will center on high-speed broadband, widearea connectivity, ultra-low latency, and massive IoT. Leading international players are actively investing in high-frequency access technologies, network virtualization, open-source software architectures, application-specific customization, edge computing, and IoT integration. These efforts are propelling the industry toward greater intelligence, modularity, and platformization.

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.

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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 Telecom 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

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requires customized overall solutions. To seize highly competitive orders and contracts, the development of the new G7800 product is being accelerated, along with strengthened R&D management. In the MCC switch market, the Company is committed to launching solutions that meet market demands and stand up to rigorous validation. Currently, several major international companies have expressed interest in initiating ODM cooperation with the Company, and development of the nextgeneration switch solution has already commenced. At the same time, the commercialization of cybersecurity solutions is being expedited to enter the market and generate revenue as soon as possible, with a strong emphasis on promotion and effective management. Loop Telecom will expand its 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 45 countries having business dealings with the Company worldwide last year. Exports accounted for about 75% of the annual revenue. America, the EU, and the Taiwan markets all performed well, while Southeast Asia experienced a slight decline. In terms of industry, electricity and governmental agencies accounted for 80% of our total revenue, and communication and transportation markets accounted for approximately 15%. In 2024, 80% of the revenue came from 9% of the countries we engaged with. Among all 34 product lines, 80% of the revenue was from 12% of the sales products. With the good prospects of the communication market, Loop Telecom 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.

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

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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 Telecom offers a product line that includes over 60 products. In response to the aforementioned demands, the Company has in recent years focused on developing new products such as the flagship Loop-G7800, a nextgeneration PTN high-bandwidth multi-functional transmission access device. Additionally, it has launched hybrid service multiplexer equipment including the G7860A, WDM1800, O9400-PTN10G, and O9500-PTN10G. 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.

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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.

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.

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(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.

  • 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.

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

Development procedures for new products:

==> picture [457 x 408] intentionally omitted <==

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

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 -----

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Small-amount production:

Propose the requirement and quantity for small-amount pilot production Prepare materials Transfer the semi-finished PCB Prepare the production testing plan assembly SOP and matter of notice to and testing instruments contractors Outsource semi-finished goods for assembly Outsource semi-finished goods testing Finished system assembly and test Warehouse entry of finished goods

99

Mass production procedures:

==> picture [420 x 389] intentionally omitted <==

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

Production
Visual Inspection Final Quality Lot
Schedule
Sampling Inspection (F/T)
Material
Burn-In
Preparation
Packing
Production
Final Function Test
Assembly
Final Quality Lot
Sampling Inspection
(Visual)
PCBA Function
Test Final 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

100

  • (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

Unit: (In Thousands of New Taiwan Dollars)

2023 2023 2023 2024 2024 2024
Ratio to net
 Ratio to net
Item Name Amount purchase
throughout the
year[%]		 Relationship
with the issuer		 Name Amount purchase
throughout the
year[%]		 Relationship
with the issuer
1 WT
Microelectronics		 67,300
29.23
None		 Avnet 19,460
18.40
None
2 Avnet 34,510
15.00
None		 WT
Microelectronics		 17,834
16.87
None
Others 128,411
55.77		 Others 68,437
64.73
Total netpurchase 230,221
100.00		 Total netpurchase 105,731
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.

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

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)
2023 2024
Item Name Amount Ratio to annual Relationship Name Amount Ratio to annual Relationship
net sales (%) with the issuer net sales (%) with the issuer
1 E 107,296
16.53
None		 E 208,763
32.12
None
2 F 104,464
16.09
None		 F 90,884
13.98
None
3 A 101,173
15.59
None		 A 79,150
12.18
None
Others 336,164
51.79		 Others 271,154
41.72
Total net sales 649,097
100.00		 Total net sales 649,951
100.00

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.

101

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 31,2025 March 31,2025 March 31,2025
Year 2023 2024 Current year as of
March 31,2025
Number of
employees
Indirect staff		 140persons
142persons
144persons

Direct staff		 17persons
17persons
15persons
Total 157persons
159persons
159persons
Average age 43.73years old
43.40years old
43.71years old
Average service seniority 12.08years
12.05years
12.24years
Education
background
distribution
ratio		 PhD 0.64%
1.26%
1.26%
Master degree 26.11%
27.67%
27.67%
College diploma 59.24%
57.87%
57.87%
Senior high school 10.19%
9.44%
9.44%
Below senior high school 3.82%
3.76%
3.76%

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 Telecom 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 Telecom: 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

102

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.

  • 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

103

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 seminars and appoints them to receive training from domestic and foreign professional training institutions.

Relevant educational training performance in 2024 is set out in the following table:

Item Number of
classes		 Total number
ofpersons		 Total number
of hours		 Total
expenses
1. New employee training 19
100
98
0
2. Professional function
training		 59
155
474
102,700
3. Management talent
training		 18
18
116
74,400
4. General knowledge
training		 13
55
235
25,200
Total
109
328
923
202,300

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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.

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

measures
No. Objective/target Plan Description of current status Implementation Status
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
electricityleakage 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 andpantry		 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 safety
and 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,

105

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 energy-saving, 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.

  • (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.

106

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

Continuing education of managers in 2024

Title Name Date Organizer Course name Number of
hours of
continuing
education
Director of the
Finance and
Accounting
Department
Chang Xiao-Ling		 2025/01/13~
2025/01/14		 Accounting
Research and
Development
Foundation		 TWSE chief
accountant
continuing
education course		 12
Chief of
corporate
governance		 Tsaih Hsing-
Chuan		 2024/04/18 The Allied
Association for
Science Park
Industries		 Legal Risks and
Responses of
Directors and
Supervisors from
Major Fraud Cases		 3
Tsaih Hsing-
Chuan		 2024/04/18 The Allied
Association for
Science Park
Industries		 Preventing Insider
Trading Awareness
Seminar		 3
Tsaih Hsing-
Chuan		 2024/04/18 The Allied
Association for
Science Park
Industries		 How Do the
Directors
Supervise the
Establishment and
Promotion of a
Sound Risk
Management
System?		 3
Tsaih Hsing-
Chuan		 2024/9/23 Taiwan Academy
of Banking and
Finance		 Corporate
Governance
Conference		 3
Chief auditor Hsiao Chen-Ho 2024/08/28~
2024/08/30		 The Institute of
Internal Auditors		 Initial Training
Courses for Newly
Appointed Internal
Auditors		 18

(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.

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

107

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.

108 

  - (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.

  1. Resources for cybersecurity management:

    • (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.

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

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

  2. (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
2,101.05 m2
Leasing land with an area of
1,384.65 m2		 None
Insurance
contract		 1. Fubon Insurance
2. Fubon Insurance
3. Nan Shan General
Insurance
4. AIG Taiwan
5. Nan Shan General
Insurance		 2024/10/01~2025/09/30
2024/12/31~2025/12/31
2024/12/31~2025/12/31
2025/04/01~2026/04/01
2024/10/15~2025/10/15		 Liability insurance for
Directors, supervisors, and
material employees
Fire insurance
Fire insurance
Commercial general liability
insurance
Transportation cargo open
policyinsurance		 None

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8. KPIs of the Company:

(1) Financial indicator

Meaning: The control of the Company's operating performance, financial structure, and profitability

Percentage Formula Objective 2023 2024
Earnings per share (EPS) Net income/weighted average
number of issued shares		 >1 3.00
3.68
Net profits (%) Net profits after tax/net sales >10% 30.76%
32.17%
Liability ratio Total liabilities/total assets <23% 34.40%
19.07%
Current ratio Current assets/current
liabilities		 >225% 266.07
510.32%
Inventory turnover Cost of goods sold/average
inventory		 >3 0.59
0.56

(2) Performance indicator

Meaning: Expense control regarding personnel of Sales, R&D, and Production departments and profit creation

Department Percentage Formula Objective 2023 2024
Sales Department (SP/Sales Expense)
Level of contribution
of salespersonnel		 Net profit of sales/sales
expenses		 >3.5 8.46 9.83
Sales Department (Revenue/Sales
Expense)		 Revenue/sales expenses >10 12.31
14.35
R&D Department Resource Utilization
Rate		 Baseline*Complete% /
Working Hours (in pass 12
month)		 >80% 86%

85%
R&D Department (ECR/(Lab) man-
month)		 (ECR/(Lab) man-month) <0.5 0.65

0.55
Production
Department		 Annual
increase/decrease rate
of idle stock		 Comparison of the amount in
the same period of two years		 <Revenue 0.5% 0.62%

0.70%

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(V) Review and analysis of financial condition and financial performance and risk management

1. Financial position:

1. Financial position: 1. Financial position: 1. Financial position: 1. Financial position: 1. Financial position:
Unit:(In Thousands of New Taiwan Dollars)
Year
Item		 2023 2024 Difference
Amount Increase/decreas
e ratio(%)
Current assets 998,352
790,104
-208,248
-21%
Fixed assets 153,385
153,135
-250
0%
Other assets 133,688
138,162
4,474
3%
Total Assets 1,285,425
1,081,401
-204,024
-16%
Current liabilities 375,222
154,826
-220,396
-59%
Long-term liabilities 67,009
51,359
-15,650
-23%
Total Liabilities 442,231
206,185
-236,046
-53%
Capital stock 567,365
567,365
0
0%
Capital surplus 43,953
43,953
0
0%
Retained earnings 234,627
266,546
31,919
14%
Total
shareholders'
equity
843,194
875,216
32,022
4%
Analysis of changes exceeding 20%:
1.
The decrease in current assets was primarily due the decrease in current financial assets
at amortized cost during the period.
2.
The decrease in current liabilities was primarily due to the decrease in short-term
borrowings during the period.
3.
The decrease in long-term liabilities was primarily due to the decrease in prepayment
during the period.
Effects of changes in the financial position in the most recent two years: There was no material
effect on the financial position.
Future responseplan: Not applicable.

111

2. Financial performance:

Unit: (In Thousands of New Taiwan Dollars)

Year
Item
2023		 2024 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)		 $649,097
649,097
203,043
446,054
252,784
193,270
56,456
-2,961
246,765
-47,106
$199,659
$649,951

649,951

204,836

445,115

253,216

191,899

52,940

-3,054

241,785

-32,728

$209,057
854

854

1,793

-939

432

-1,371

-3,516

-93

-4,980
14,378

9,398
0%

0%

1%

0%

0%

-1%

-6%

3%

-2%

-31%

5%









1
Analysis of changes exceeding 20%:
1.
The decrease in income tax gains (expenses) was mainly due to differences between financial and
tax reporting for corporate income tax in 2023.
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:

3. Cash flow analysis: 3. Cash flow analysis: 3. Cash flow analysis: 3. Cash flow analysis: 3. Cash flow analysis: 3. Cash flow analysis: 3. Cash flow analysis:
Unit:(In Thousands of New Taiwan Dollars)
Opening cash
balance		 Net cash flow
from operating
and investing
activities
throughout the
year		 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
269,074 338,966 (375,709) 239,619 7,288 None None
1.
Analysis of changes in cash flows during the year:
Cash inflow from operating income: Primarily due to the accounts receivable during the period.
Cash outflow from investing activities: Primarily due to the disposal of financial assets measured
at amortized cost.
Cash outflow from financing activities: Primarily due to the distribution of cash dividends.
2.
Improvement plan for insufficient liquidity and liquidity analysis: There is no insufficient cash
liquidity.
3.
Remedial measures for cash deficiencyand liquidityanalysis: None.

112

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		 Operating
income failed to
achieve the
expectations		 Not applicable $67 None
Tianjin
Hutong		 Develop and
provide service
for Mainland
China		 Transfer of
prepayment to
other income		 Continue to
explore new
customers in
Mainland China		 $252 None
Chongqing
Cantong		 Develop LOOP-
iNET (smart
network
equipment
management
system)		 revenue growth
from iNET		 Adjustments will
be made to
product strategies
in due course
according to the
overall trends of
the market		 $2,478 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:

A. Effects on the Company'sprofit or loss:
Item 2024
(NT$thousand;%)
Net interest income and expenses 11,198
Net exchangeprofit 22,895
Ratio of net interest income and expenses to net
revenue		 1.723%
Ratio of net interest income and expenses to net
profit before tax		 4.631%
Ratio of net exchangeprofit to net revenue 3.523%
Ratio of net exchangeprofit to netprofit before tax 9.469%

a. Changes in interest rates

Financial assets and financial liabilities with cash flow risks due to changes in interest rates in 2024 were NT$147,757 thousand and NT$0 thousand. If changes in market interest rates will result in changes in the effective interest rates of such financial products,

113

assuming that the market interest rates increase by 0.1%, the net profit before tax of the consolidated Company in 2023 and 2024 decreases/increases by NT$148 thousand and NT$87 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 2024, 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 2024 will decrease by NT$2,125 thousand.

c. Inflation

There is no effect caused by inflation.

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-longterm working capital are described as follows:

Loan item Loan A Loan B
Content Short-term Case A – Case B – Comprehensive bank loans
(secured)loan Comprehensive loans - 1 Comprehensive loans - 2
Limit NT$100 million NT$80 million NT$72 million NT$40 million
Criteria NTD: FTP on the
same date/period
+ 0.75% fixed
interest rate		 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: TAIFX3 on the
index + interest at the
same date/period + 1%
variable rate of + 0.93%
and divided by 0.946 (at
present, interest per
annum is 5.9302%)) for
the fixed interest
Period 1year 1year 1year 1year(2024.07.19-2025.07.18)
Drawdown
period		 2024.10.24~2025
2024.07.19-2025.07.18
.10.23 (last 2025.02.17~2026.2.16
2025.02.17~2026.2.16
drawdown date) (last drawdown date)
(last drawdown date)
2025.10.24 2026.02.17 (repayment
2026.02.17 (repayment date
(repayment date date upon credit line
upon credit line maturity)
upon credit line maturity)
maturity)
Unused
balance		 NTD 100,000 NTD 39,000,000
NTD 80,000 thousand NTD 72,000 thousand
thousand
Note Using the plant on
Plant on Hsin Ann Rd.,
Ruiguang Rd., Taipei and
Hsinchu City
equipment as collateral

114

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.

(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 highrisk/high-leverage financial investment from the beginning of 2024 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 72-87 of the annual report.

  • B. Current progress of uncompleted R&D plans and R&D expenses required to be invested: Please refer to pages 87-89 of the annual report.

115

(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 2024, changes in relevant laws and regulations had no material effect on the Company's operations.

(5) Effect on the company's financial operations of developments in science and technology (including cyber security risks) as well as industrial change, and measures to be taken in response:

Loop Telecom has been deeply engaged in the international market, conducting business with 45 countries worldwide. In 2024, overseas sales accounted for approximately 75% of total revenue. By industry, the power and government sectors accounted for approximately 80% of total revenue, while the communications and transportation markets accounted for about 15%.

With the rapid advancement of technologies such as 5G, AI, and digital transformation, demand for communications applications and customer requirements has grown, raising expectations for product speed, stability, and security. To meet these demands, Loop Telecom continues to invest in nextgeneration communications technologies and flagship product development. The Company also partners with leading international system integrators to enhance product flexibility and market competitiveness. While the markets in Europe and the United States remain stable, the domestic market has entered a new phase of development. The Southeast Asian market is gradually recovering, and the Company continues to explore emerging markets.

Rapid changes in the industry have led to market demand uncertainties that may affect the Company’s revenue forecasts and resource allocation effectiveness. To address risks from industry changes, the Company regularly conducts market demand forecasts for its products and services and dynamically adjusts based on changes in the market environment. By continuously monitoring market trends and working closely with customers, the Company can promptly adjust production capacity and inventory strategies when demand falls short of expectations, thereby minimizing negative impacts on financial performance and ensuring operational stability.

Regarding information security risks, the increased digitization of business operations has raised cybersecurity threats such as hacking, data breaches, and system disruptions, which may pose potential risks to the Company’s financial performance, operational stability, and corporate reputation. To enhance cybersecurity resilience, the Company established a dedicated Information Security Unit and Committee in 2022. The head of the IT department also serves as the Chief Information Security Officer, working alongside three committee members to promote security policies and control mechanisms.

The Company has implemented a 24/7 cybersecurity monitoring system capable of detecting anomalies in real-time and responding swiftly according to established procedures, including analysis and continuous improvement. Simulated phishing tests and annual cybersecurity awareness training are also conducted to reduce human-related risks and improve employees’ ability to

116

identify and respond to potential cyber threats. In 2024, the Company experienced no major cybersecurity incidents, demonstrating the effectiveness of current security measures. ABC Company will continue to adopt innovative technologies and comply with international cybersecurity standards to ensure the safety and continuity of financial, business data, and operational systems.

(6) Effects of changes in the corporate image on crisis management of the enterprise and countermeasures:

As of the end of 2024, there were no such circumstances.

(7) Expected benefits of M&As, possible risks, and countermeasures:

As of the end of 2024, there were no such circumstances.

  • (8) Expected benefits of the expansion of plants, possible risks, and countermeasures:

As of the end of 2024, 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 2024, the top 10 customers of sales accounted for 83% 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.

117

  • (12) Litigious and non-litigious matters. List major litigious, nonlitigious 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.

118

(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 operating matters		 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

119

(VI) Special Items

1. Information on affiliates:

(1) Name and organizational chart of affiliates

As of the end of 2024, the investment relationships and shareholding ratio of the Company and its subsidiaries are set out in the following figure:

==> picture [534 x 347] 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
International Ltd.
100% 100%
100%
Tianjin Loop
Tianjin Loop Chongqing Loop
Electron
Technology Technology
Technology
Co., Ltd. Co., Ltd.
Co., Ltd.
----- End of picture text -----

120

(2) Basic information on affiliates:

December 31, 2024

December 31,2024
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.

121

(3) Name of directors and presidents of affiliates and their shareholding:

December 31,2024 December 31,2024
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-Tse
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-Tse
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-Tse
Representative of Loop Telecommunication International, Inc. - He Hwa-Chi
Representative of Loop Telecommunication International, Inc. - Wu Ming-Tse
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.

122

(4) Business overview of associates

December 31,2024 /(Unit: NT$thousand,except for otherwise specified) December 31,2024 /(Unit: NT$thousand,except for otherwise specified) December 31,2024 /(Unit: NT$thousand,except for otherwise specified) December 31,2024 /(Unit: NT$thousand,except for otherwise specified) December 31,2024 /(Unit: NT$thousand,except for otherwise specified) December 31,2024 /(Unit: NT$thousand,except for otherwise specified) December 31,2024 /(Unit: NT$thousand,except for otherwise specified) December 31,2024 /(Unit: NT$thousand,except for otherwise specified)
Company name Amount of Capital Total Assets Total
Liabilities		 Net value 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.
(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
3,302

46

3,256

3,121

10,883

5,167

196
-

-

-

3,595

7,636

7,319

33		 3,302
46
3,256

-474

3,247

-2,152

163
-

-

-
110

16,032

4,610
-		 -
-
-

-477

2,476

-1,005
-		 2,797
319
2,478

67

2,478

252
-
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$32.785.

Note 3: Consolidated financial statements of affiliates: Please refer to the information on the website of MOPS. Note 4: Affiliation report of affiliates: Not applicable.

123

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 .

  • (VII) 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 (2024) and up to the publication date of the annual report: None.

124

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

125

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. 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 non-public 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)
Article 12. 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.
(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. 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.

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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.

  • 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.

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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.

  17. 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.

  18. 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.

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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.

129

  • (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.

  • (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.

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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

131

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 signoff 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.

  • (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

132

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

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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. 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. 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. 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. 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. 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. The procedures were approved for implementation by the Board on October 30, 2014

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Loop Telecommunication International, Inc.

Chairman: Yeh Maw-Lin

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