ZIPPY Technology Corp.

Stock Code：2420

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2023 Annual Report

Annual Report Website：http://mops.twse.com.tw Company Website：http://www.zippy.com Publication Date：April 30, 2024

Names, titles, contact numbers and e-mail addresses of spokespersons and spokespersons of the company:
(1) Spokesperson：

Name：Robert Kuo

Title：General Manager Tel：(02)2918-8512

E-mail：[email protected]

(2) Deputy Spokesperson：

Name：Linda cheng

Title：Senior Manager Tel：(02)2299-6968

E-mail：[email protected]

Address and telephone number of head quarter and factory：
Head quarter：10F., No.50, Minquan Rd., Xindian Dist., New Taipei City 23141, Taiwan Tel：(02)2918-8512

Factory：No.120, Sec. 2, Ganyuan St., Shulin Dist., New Taipei City 23853, Taiwan Tel：(02)2668-5388

Factory：4F, No.48, Wuquan Rd., Wugu Dist., New Taipei City 24886, Taiwan Tel：(02)2299-6968

Stock Transfer Agent：

SinoPac securities Stock Agency Department

Address：3F., No. 17, Bo’ai Rd., Zhongzheng Dist., Taipei City 100, Taiwan

Tel：(02)2381-6288

Website：http://www.sinotrade.com.tw

Information of the Certified Public Accountants for the Latest Financial Report：

Name of CPA：GUO, ROU-LAN and CHEN, YING-RU

CPA Firm：KPMG

Address：Taipei 101 Tower, 68F, No.7, Sec. 5, Xinyi Road, Taipei City 110615, Taiwan Tel：(02)8101-6666

Website：http://www.kpmg.com.tw

Overseas Securities Exchange：NA
Corporate Website：http://www.zippy.com

	Contents	Contents
I.	Letter to Shareholders ......................................................................................................................... 1
	1.1	2023 Consolidated Business Report ……………………………………………………................1
	1.2	Summary of 2024 business plan …………………………………………………………………..2
II.	Company Profile ................................................................................................................................... 5
	2.1	Date of incorporation. ..................................................................................................................... 5
	2.2	Company History:........................................................................................................................... 5
III.	Corporate Governance Report ........................................................................................................... 6
	3.1	Organization .................................................................................................................................... 6
	3.2	Directors, Supervisors and Management Team .............................................................................. 8
	3.3	Remuneration paid to general directors, independent directors, supervisors, general managers
		and deputy general managers in the most recent year ................................................................... 14
	3.4	Implementation of Corporate Governance .................................................................................... 18
	3.5	Information Regarding the Company’s Audit Fee and Independence .......................................... 62
	3.6	Change Certified Public Accoutant infomation ............................................................................ 62
	3.7	The chairman, general manager, and manager in charge of financial or accounting affairs have
		worked in a firm or related company within the last year ............................................................. 62
	3.8	Changes in shareholding of directors, supervisors, managers and major shareholders: ............... 63
	3.9	Information on the top ten shareholders ........................................................................................ 64
	3.10	Ownership of shares in affiliated enterprises ................................................................................ 65
IV.	Capital Overview ................................................................................................................................ 66
	4.1	Capital and Shares ......................................................................................................................... 66
	4.2	Bonds ............................................................................................................................................. 71
	4.3	Preferred Shares ............................................................................................................................ 71
	4.4	Global Depository Receipts .......................................................................................................... 71
	4.5	Employee Stock Options. .............................................................................................................. 71
	4.6	Restricted Employee Shares .......................................................................................................... 71
	4.7	Status of New Shares Issuance in Connection with Mergers and Acquisitions. ........................... 71
	4.8	Financing Plans and Implementation ............................................................................................ 71
V.	Operational Highlights ...................................................................................................................... 72
	5.1	Business Activities ........................................................................................................................ 72
	5.2	Market and Sales Overview .......................................................................................................... 79
	5.3	Human Resources .......................................................................................................................... 86
	5.4	Environmental Protection Expenditure ......................................................................................... 87
	5.5	Labor Relations ............................................................................................................................. 87
	5.6	Cyber Security Management ......................................................................................................... 92
	5.7	Important Contracts ....................................................................................................................... 95
VI.	Financial Information ........................................................................................................................ 96
	6.1	Five-Year Financial Summary ....................................................................................................... 96

	6.2	Five-Year Financial Analysis ...................................................................................................... 101
	6.3	Audit Committee’s Report in the Most Recent Year ................................................................... 103
	6.4	Consolidated Financial Statements for the Years Ended December 31, 2023 and 2022, and
		Independent Auditors’Report ...................................................................................................... 103
	6.5	Individual Financial Statements for the Years Ended December 31, 2023 and 2022, and
		Independent Auditors’Report ...................................................................................................... 103
	6.6	The Effect on Company or its Affiliates have Experienced Financial Difficulties ..................... 103
VII.	Review of Financial Conditions, Operating Results, and Risk Management ............................. 104
	7.1	Analysis of Financial Status ........................................................................................................ 104
	7.2	Analysis of Operation Results ..................................................................................................... 105
	7.3	Analysis of Cash Flow ................................................................................................................ 106
	7.4	Major Capital Expenditure Items ................................................................................................ 106
	7.5	Investment Policy in Last Year, Main Causes for Profits or Losses,Improvement Plans and the
		Investment Plans for the Coming Year ........................................................................................ 107
	7.6	Analysis of Risk Management .................................................................................................... 107
	7.7	Other Important Matters .............................................................................................................. 109
VIII. Special Disclosure ............................................................................................................................. 110
	8.1	Summary of Affiliated Companies .............................................................................................. 110
	8.2	Private Placement Securities in the Most Recent Years .............................................................. 114
	8.3	The Shares in the Company Held or Disposed of by Subsidiaries in the Most Recent Years .... 114
	8.4	Other Matters that Require Additional Description .................................................................... 114
IX.	Matters to be disclosed in the latest year and up to the date of publication of the annual
	report in accordance with Article 36 of the Securities Exchange ................................................ 114
Appendix		1、Audit Committee’s Report in the Most Recent Year ......................................................... 115
Appendix		2、Consolidated Financial Statements for the Years Ended December 31, 2023 and 2022,
		and Independent Auditors’Report ...................................................................................... 116
Appendix		3、Individual Financial Statements for the Years Ended December 31, 2023 and
		2022, and Independent Auditors’Report ............................................................................ 175
Appendix		4、Statement of Internal Control System ................................................................................ 231

I. Letter to Shareholders

Dear Ms., Mr. Shareholders:

First of all, welcome to the shareholders meeting today, and thank all shareholders for their love and support for the company. Now the company’s business situation in the past year and its outlook for this year are reported as follows:

In the year of 2023, the company still kept its previous operating attitude, with diligence and hard work, and hoped to get the best operating results. The following is the 2023 annual business results report:

1.1. 2023 Consolidated Business Report:

1.1.1. Operational Highlights:(detail see page 105)

Unit:NT$ Thousands

			Unit:NT$	Thousands
Items	2022	2023	Diff amt	Diff %
Sales Revenues	2,642,175	2,126,487	(515,688)	(19.52%)
Operating Profit	1,115,001	906,238	(208,763)	(18.72%)
Operating Income	698,274	535,250	(163,024)	(23.35%)
Non-Operating Income and Expenses	166,127	144,323	(21,804)	(13.12%)
Profit before Income Tax	864,401	679,573	(184,828)	(21.38%)
Net Income	677,032	538,494	(138,538)	(20.46%)

1.1.2. Analysis of financial revenue and expenditure and profitability:(detail see page 101、102、 106)

Unit:NT$ Thousands

Items	Items	2022	2023
Annual net cash flow from operating activities		519,412	848,184
Annual net cash flow from investing activities		(34,490)	(13,076)
Annual net cash flow from financialing activities		(539,383)	(587,883)
Profitability	Return on total assets (%)	12.26	10.16
	Return on stockholders' equity (%)	19.00	14.57
	PBT To pay-in Capital (%)	56.63	44.52
	Net profit margin (%)	25.62	25.32
	Basic earnings per share ($)	4.43	3.55

1.1.3. Research and development status:

The company attaches great importance to research and development, and has outstanding achievements, and will continue to work hard on the development of new products in the future. The latest three years of successful new product development or process and specification improvement, and the number of patent applications for approval in different countries are as follows:

Year	2021	2022	2023
Number	1	5	1

In order to maintain its leading position in the industry, the company invests a considerable amount of research and development expenses every year. The research expenses in the past three years are as follows:

		Unit:NT$Thousands	Unit:NT$Thousands
Year	2021	2022	2023
Research And Development Expense	77,869	70,873	68,239
% Of Operating Income	3%	3%	3%

1.2. Summary of 2024 business plan:

1.2.1 The impact of external competitive environment, regulatory environment and overall operating environment on the company.

In 2023, global armed conflicts will surge, the energy map will shift, and artificial intelligence (AI) will develop rapidly. The world situation will change faster than anyone can imagine. Although inflation has slowed significantly in advanced economies worldwide, interest rates remain high. There are doubts about whether inflation is under control, and there is no certainty when interest rates will fall. 2024 will be the year with the most elections in the history of the world. Predicting its impact on the United States, China, Taiwan, and the world is difficult. Many countries will usher in new heads of state and political situations, and how they will jointly face many challenges such as regional wars, geopolitics, and net-zero transformation. As the world's second-largest economy, China is important to global development and may fall into deflation. Some industries in the Chinese economy are indeed very competitive globally. "Recovery or decline" of the Chinese economy is a key issue for the global economy in 2024. Overall, the domestic economy is expected to improve next year gradually, but factors such as rising inflation and geopolitical risks remain and require close observation.

Generally speaking, integrating the opinions of major domestic and foreign economic forecasting agencies, 2024 is expected to be a year when the clouds clear and the sun shines. As of now, major domestic and foreign institutions have forecasts for 2024 ranging from 2.3% to 3.4%. The four major variables affecting the global economy include the deterioration of the Israel-Kazakhstan war, the rise and fall of raw material and freight prices, the slow recovery of China's real estate, and the direction of global central bank monetary policies. We are reminded to pay close attention. The deadlock on the U.S. debt ceiling has been temporarily resolved in the financial market. However, the balance of risks for global growth is still tilted to the downside. The IMF warned that if the Russia-Ukraine war intensifies, extreme climate shocks occur, or inflation remains high or even rises, financial markets will return to shock. The pace of China's recovery

remains bleak, partly due to unresolved real estate issues and their cross-border spillovers. As for Japan, which has been experiencing deflation for 20 years, it is also expected to usher in a new situation in 2024. After exiting the negative interest rate policy (NIRP) in January, it is expected to get rid of zero interest rates in July and officially start raising interest rates. Central banks in emerging Asia, including South Korea and Taiwan, have room to implement slight interest rate cuts as inflation is expected to fall.

Looking forward to 2024, the destocking of semiconductors is ending, the demand for AI and electric vehicles is gaining momentum, and the world's giants are competing for huge business opportunities in space. Taiwan is building a "national space team." In addition, in the application of network technologies such as AI, 5G, big data, Internet of Things, edge computing, etc., the data on the Internet has increased exponentially, which is very difficult for general servers with CPU as the main source of computing power. This is a serious test, and the data processing capabilities of the server must be improved, so the AI server came into being. Generative AI ignites competition and business opportunities among technology giants. Taiwan controls nearly 60% of the world’s advanced process production capacity and nearly 80% of server shipments. The main power module manufacturers that supply AI servers are also in Taiwan. Generative AI Intelligence (AI) requires huge computing power, which increases the power consumption of server chips. From various aspects, AI drives the computer industry's regeneration and brings golden opportunities to Taiwanese companies. It is also a great opportunity for power supply manufacturers to new challenges and opportunities. Furthermore, the EU Carbon Border Adjustment Mechanism (CBAM) will be officially launched in 2026, starting a trend of carbon tariff legislation in various countries. With the advent of the carbon price era, the world is paying more and more attention to green competitiveness, and the dual-axis transformation of energy and digital is imperative.

This year (2024) operation plan and future development strategy

After the severe challenges of 2023, the new normal after the epidemic has boosted the demand for digital transformation. AI focus has been strengthened to extract valuable information from large amounts of data for analysis by combining 5G, edge computing... and other tools to achieve intelligent and autonomous prediction effects. In addition to insisting on high quality in every aspect of operations, Zippy Technology Corp. also strengthens its competitiveness with value services and continuous innovation, provides optimal customized design integration services from the customer's perspective, and loyally accompanies customers to focus on emerging industries' applications.

The operational growth of the Power Supply Division depends on the fermentation progress of projects where customers have introduced generative AI. Related IPC customers will drive increased demand for edge computing (Edge Computing). It will stick to the rugged power supply application market and high-end customers that have achieved preliminary results in the United States. For customers who demand special specifications, the CRPS series power supplies continue to deepen and apply new technologies such as GaN or SiC to develop titanium server power supply products of more than 4000W.

The main growth momentum of the Electronic Components Division next year will be in the electric vehicle market, automotive waterproof switch products, and the high-end home appliance application market. In recent years, Zippy Technology Corp. has targeted the motorcycle market and machine tool market and gradually expanded the use of waterproof switches, and observed To meet the market's potential application needs,

we took the lead in developing small DC switches that can withstand high currents and have successively pushed them to customers for testing, which is expected to add momentum to future performance. In addition to traditional micro switches, Zippy Technology Corp.'s Switch products have long strokes and are waterproof and dustproof. At the same time, to help customers solve abnormal problems such as product automatic detection of short circuits and open circuits in electronic circuits, Zippy Technology Corp. also simultaneously develops a detection switch with a resistor design inside the switch and also provides customized services for assembling the switch and welding PCB components or external wiring materials.

Faced with the severe challenges of the general environment, which is changing rapidly, the company must change at a faster pace, and at the same time, its strategic direction must be precise. While actively sprinting for revenue, it must focus more on squatting, adjusting the company's constitution, and maintaining stable profits. To ensure a win-win situation for shareholders, employees, and management, continuous satisfaction and steady profits. We will continue strengthening and accelerating the digitization and automation of internal flexible production and manufacturing processes to respond to customer's changing needs in small quantities, variety, and ultra-short delivery times and help customers relieve internal inventory pressure.

1.2.2 Conclusion

Looking forward to 2024, Zippy Technology Corp. continues to adjust its internal organizational strategies in response to market changes, pursues continuous innovation and reform while growing steadily, dares to accept challenges, accumulates experience and cultivates strength, and continues to integrate internal resources for the new generation of human resources. We will strive for excellence in manufacturing quality and operating efficiency, deepen the stable development of existing customers, and strive to develop new customer sources. Continuously promote the corporate culture of "positive thinking, broad-minded and broad-minded", demonstrating Zippy Technology Corp.'s intention and determination to pursue goals and achieve various commitments. Facing the wave of global digital transformation, Zippy Technology Corp. will proceed steadily and accelerate the pace of building a global digital operation model. It will use technology and big data analysis to process various operating procedures, continue strengthening the supply chain's resilience, and is committed to building a happy enterprise to attract global talents. adhering to the original intention, pursuing transcendence while not forgetting the fundamentals, based on the product advantages accumulated over the past four decades, continuing to focus on industry needs, and hoping that the performance in 2024 will break through the past and set new highs, creating new opportunities for shareholders, customers, and employees. more value and share fruitful business results.

Best wishes for good healthy and good luck!

Chairman: Chou, Chin-Wen

II. Company Profile

2.1 Date of incorporation: Taiwan, April 25, 1983.
2.2 Company History:
2.2.1. The company's mergers and acquisitions and reorganization in the most recent year: None.
2.2.2.Companies reinvested in investment-related enterprises: None.
2.2.3. Directors, supervisors or large shareholders holding more than 10% of the shares are transferred or replaced in a large amount, and changes in management rights: None.
2.2.4.Significant changes in the company's organization, operating methods or business content: None.
2.2.5. Other important matters sufficient to affect shareholders' equity and its impact on the company: None.
2.2.6. Other Important Matters: None.

III.Corporate Governance Report

3.1 Organization system

3.1.1. Organizational structure

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Board of
Shareholders
Audit Committee
Board of Directors
Remuneration
Committee Audit Dept
Chairman
Chairman’s Office
General Manager
Sustainable
General Manager's
Development
Office
Committee
General management Electronic components Power Supply
Division Division Division
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3.1.2. Department functions:

Major Department	Major Department	Major Business Activities
Audit Department		Internal Audit
Chairman’s Office	Planning Department	1. Implementation of various projects 2. Communication and integration of culture and resources between business offices and with the head quarter 3. The executive and concurrent unit of corporate governance
General Manager's Office	Special Assistant	Project management and support
	Cyber Security Department	1. Manage the company's cyber security policies, standards and plans. 2. Enhance cyber security awareness, implement control mechanisms, verify implementation results, and provide cyber security on-the-job training.
General Affairs Department	Information Technology Department	The establishment and maintenance of computer hardware and software
	Human Resources Department	1. Human Resource 2. General affairs administration 3. Introduction and management of foreign workers 4. Occupational safety and health
	Legal Department	1. Handling of legal affairs 2. Legal research and assistance in review and production of legal documents
	Financial Department	Accounting and financial transaction affairs
Business Unit	Sales Department	1. Formulate sales forecast, marketing plan and product price execution plan 2. Product introduction, business contact and quotation for customers 3. Coordinate with technical deparrment to make and deliver samples according to customer needs 4. Responsible for quotation and opening of internal orders, procurement and production
	Business Support Department	1. Handle matters related to orders and shipments 2. Assist in the processing of customer needs
	Research & Development Department	1. Research and development of new products and strategic products of the company 2. The development, improvement and implementation of the company's products and reliability testing
	Factory Affairs Department	1. Product production, testing and packing 2. Production planning and arrangement of products and other businesses 3. Raw material control 4. Warehouse management of raw materials, WIP and finished products 5. Quality control 6. Procurement of raw materials, equipment, etc 7. Development, management and evaluation of third-party vendors

3.2 Directors, supervisors, general managers, deputy general managers, associates, supervisors of various departments and branches

3.2.1. Director Information

2024.03.23

																	2024.03.23	2024.03.23	2024.03.23
Title	Nationality or Registered Address	Name	Gender Age	Date Elected	Term (Years)	Date First Elected	Shareholding when Elected		Current Shareholding		Spouse & Minor Shareholding		Shareholding by Nominee Arrangement		Education/Work experience	Selected Current Positions	Executives, Directors or Supervisors who are spouses or within two degrees of kinship
							Shares	%	Shares	%	Shares	%	Shares	%			Title	Name	Relation -ship
Chairman	R.O.C	CHOU, CHIN-WEN	Male 61~70	2022.05.27	3	1998.06.08	9,918,432	6.50%	9,918,432	6.50%	3,527,943	2.31%	-	-	Chairman/General Manager of ZIPPY TECHNOLOGY CORP	Note 1	None	None	None
Director	R.O.C	KAO,MING- CHUAN	Male 61~70	2022.05.27	3	1998.06.08	7,825,423	5.13%	7,825,423	5.13%	1,296,946	0.85%	-	-	General Manager/Deputy General Manager of ZIPPY TECHNOLOGY CORP	Note 2	None	None	None
Director	R.O.C	TSAI, CHIN-SHAN	Male 61~70	2022.05.27	3	1998.06.08	6,575,752	4.31%	6,575,752	4.31%	1,832,074	1.20%	-	-	Deputy General Manager of ZIPPY TECHNOLOGY CORP	Note 3	None	None	None
Director	R.O.C	CHUNG, YEN-YEN	Male 61~70	2022.05.27	3	1998.06.08	10,360,267	6.79%	10,337,267	6.77%	2,468,067	1.62%	-	-	Chairman/General Manager/ Supervisorsof ZIPPY TECHNOLOGY CORP	Note 4	None	None	None
Independent Director	R.O.C	CHOU, CHAI-FA	Male 71~80	2022.05.27	3	2016.06.08	15,000	0.01%	15,000	0.01%	-	-	-	-	General Manager of Chunchi Construction Co., Ltd.	Note 5	None	None	None
Independent Director	R.O.C	CHEN,HUA NG-HUNG	Male 61~70	2022.05.27	3	2016.06.08	-	-	-	-	-	-	-	-	Senior Management Consultant of Zhenguan Consultant Co., Ltd.	Note 6	None	None	None
Independent Director	R.O.C	LIU, HSUEH-LI	Female 61~70	2022.05.27	3	2022.05.27	-	-	-	-	-	-	-	-	CFO of NEXT ANIMATION STUDIO LIMITED TAIWAN BRANCH(HONG KONG)	Note 7	None	None	None

Note 1： Chairman of ZIPPY TECHNOLOGY CORP

Legal Representative and General Manager of ZIPPY USA , ZIPPY International Holding , ZIPPY (Dongguan) Electronics Co., Ltd. , ZIPPY (Suzhou) Electronics Co., Ltd. ,

Landmark, and KOBOT

Legal Representative and Chairman of ZIPPY TECHNOLOGY EUROPE GMBH

Note 2： General Manager of ZIPPY TECHNOLOGY CORP and ZIPPY TECHNOLOGY EUROPE GMBH

Chairman of QUAN-FA CORPORATION COMPANY

Director of ZIPPY (Suzhou) Electronics Co., Ltd.

Legal Representative of ZIPPY (Hua Nan) Branch

Legal Representative and General Manager of G-BRIM International Inc.

Note 3： Director of ZIPPY (Suzhou) Electronics Co., Ltd

Note 4： Directors of Hengshang Enterprise, Boxu Enterprise and Laiyi Digital Technology

Note 5： Deputy General Manager of Dunxin Construction Co., Ltd.

Note 6： Senior Management Consultant of Zhenguan Consultant Co., Ltd.

Note 7： Great China Area CFO of Aegis, Great China Area CFO of Media GroupM

3.2.2. Professional qualifications and independence analysis of the board:

2024.03.23

						2024.03.23
Criteria Name	Professional qualification and work experience（Note1）		Independence（Note2）			Number of other public companies in which the individual is concurrently serving as an independent director
		1	2	3	4
CHOU, CHIN-WEN	More than five years working experience in business and otherwise necessary for the business of the Company; Not been a person of any conditions defined in Article 30 of the CompanyAct.	-	-	-	-	0
KAO, MING-CHUAN	More than five years working experience in financial, accounting and otherwise necessary for the business of the Company; Not been a person of any conditions defined in Article 30 of the CompanyAct.	-	-	-	-	0
TSAI, CHIN-SHAN	More than five years working experience in business and otherwise necessary for the business of the Company; Not been a person of any conditions defined in Article 30 of the CompanyAct.	-	-	-	-	0
CHUNG, YEN-YEN	More than five years working experience in business and otherwise necessary for the business of the Company; Not been a person of any conditions defined in Article 30 of the CompanyAct.	-	-	-	-	0
CHOU, CHAI-FA	A member of Audit Committee and Remuneration Committee, more than five years working experience in business, financial and accounting; Not been a person of any conditions defined in Article 30 of the CompanyAct.	�	15,000 shares / 0.01%	�	No such situation	0
CHEN, HUANG-HUNG	A member of Audit Committee and Remuneration Committee, more than five years working experience in business, financial and accounting; Not been a person of any conditions defined in Article 30 of the CompanyAct.	�	No shares	�	No such situation	0
LIU, HSUEH-LI	A member of Audit committee, more than five years working experience in business, financial and accounting; Not been a person of any conditions defined in Article 30 of the CompanyAct.	�	No shares	�	No such situation	0

Note 1： Please refer to page 8, 3.2.1. Directors Information.

Note 2： The independece criteria to indicate whether the independent directors had met any of the conditions:

(1) Including but not limited to oneself, the spouse, and second-level blood relative whether are the directors, supervisors, or employee of the Company or the affiliated enterprises.
(2) The shares and proportion of the Company which held by a natural-person shareholder, together with those held by the person's spouse and second-level blood relative (or held by the person under others' names).
(3) Whether serve in the directors, supervisors, or employee of a company which has specific relationship with the Company. (Please refer to Article 3, paragraph 1, section 5-8, of Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies).
(4) The remuneration is received by providing commercial, legal, financial, accounting or related services to the Company or the affiliated enterprises in the last two years.

3.2.3. Diversity and independence of the board:

3.2.3.1. Diversity of the board:

According to Article 20 of “Corporate Governance Best Practice Principles” of the Company, all members of the board shall have the knowledge, skills, and experience necessary to perform their duties. The board of directors shall possess the following abilities, ability to make operational judgments, ability to perform accounting and financial analysis, ability to conduct management administration, ability to conduct crisis management, knowledge of the industry, an international market perspective, ability to lead, ability to make policy decisions. In addition, the composition of the board of directors shall be determined by taking diversity into consideration, and that an appropriate policy on diversity based on the company's business operations, operating dynamics, and development needs be formulated and include the following two general standards, basic requirements and values (gender, age, nationality, and culture), professional knowledge and skills (e.g., law, accounting, industry, finance, marketing, technology).

The specific management goals and achievements of the Company’s diversity policy are as follows:

(e.g., law, accounting, industry, finance, marketing, technology). The specific management goals and achievements of the Company’s diversity policy are as follows:
Managementgoal	Achievement
Directors concurrentlyservingas companyofficers not exceed one-third of the total number of the board members.	Completed
At least two of directors shall have industry, marketing, or technologyexpertise.	Completed

The Company's implementation of the diversity of board members is as follows:

Diversity Item Name	Nationality	Gender	Age	Legal	Accounting and Financial	Marketing and Technology	Management Administration	Knowledge of the Industry	Lead and Make Policy Decisions	Make Operational Judgments	Conduct Crisis Management	International Market Perspective
CHOU, CHIN-WEN	R.O.C	Male	61~70	-	-	�	�	�	�	�	�	�
KAO, MING-CHUAN	R.O.C	Male	61~70	-	�	�	�	�	�	�	�	�
TSAI, CHIN-SHAN	R.O.C	Male	61~70	-	-	�	�	�	�	�	�	�
CHUNG, YEN-YEN	R.O.C	Male	61~70	-	-	�	�	�	�	�	�	�
CHOU, CHAI-FA	R.O.C	Male	71~80	-	�	�	�	�	�	�	�	�
CHEN, HUANG-HUNG	R.O.C	Male	61~70	-	�	�	�	�	�	�	�	�
LIU,HSUEH-LI	R.O.C	Female	61~70	-	�	�	�	�	�	�	�	�

3.2.3.2. Independence of the board:

The Company has three independent directors, 43% of the total number of the board members, and their tenures are not more than three consecutive terms. Besides, the Company would periodically check their eligibilities and make written declarations to conform the relative regulation of TWSE and TPEx during their tenures, and cofirm that they have not been a person of any conditions defined in Article 26-3, paragraph 3 - 4 of the Securities and Exchange Act (including to explain the relationship of spouse and second-level blood relative among directors, supervisors, or directors and supervisors) to ensure the independence of the board.

3.2.4. Introduction of the management team:

2024.03.23

													2024.03.23	2024.03.23	2024.03.23
Title	Nation ality	Name	Gender	On-board Date	Current Shareholding		Spouse & Minor Shareholding		Shareholding By Nominee Arrangement		Education/Work experience	Selected Current Positions	Executives, Directors or Supervisors who are spouses or within two degrees of kinship
					Shares	%	Shares	%	Shares	%			Title	Name	Relation -ship
General Manager	R.O.C	KAO, MING-CHUAN	Male	2018.08.24	7,825,423	5.13%	1,296,946	0.85%	-	-	Deputy General Manager of ZIPPY TECHNOLOGY CORP	Note 1	None	None	None
Deputy General Manager of Electronic Components Division	R.O.C	LIN, CHING-HSIN	Male	2022.01.26	-	-	413	-	-	-	RD Director of ZIPPY TECHNOLOGY CORP	None	None	None	None
Deputy General Manager of Power Supply Division	R.O.C	HUANG, YUNG-HSIN	Male	2022.01.26	9,036	0.01%	-	-	-	-	RD Director of ZIPPY TECHNOLOGY CORP	None	None	None	None
Sales senior manager	R.O.C	CHENG, CHIU-YI	Female	2020.10.27	2,000	0.00%	-	-	-	-	Sales Director of ZIPPY TECHNOLOGY CORP	None	None	None	None
RD senior manager	R.O.C	CHANG, YU-YUAN	Male	2010.07.08	443	0.00%	-	-	-	-	RD Director of ZIPPY TECHNOLOGY CORP	None	None	None	None
Factory Chief	R.O.C	WANG, CHIU-FU	Male	2019.08.01	-	-	-	-	-	-	Factory Director of ZIPPY TECHNOLOGY CORP	None	None	None	None

Note 1： Chairman of QUAN-FA CORPORATION COMPANY

Director of ZIPPY (Suzhou) Electronics Co. Ltd.

Legal Representative of ZIPPY (Hua Nan) Branch Legal Representative and General Manager of G-BRIM International Inc. General Manager of ZIPPY TECHNOLOGY EUROPE GMBH

3.3 Remuneration of directors, supervisors, the president, and vice president:

3.3.1. Remuneration of directors:

																					Unit: NT$Thousands	Unit: NT$Thousands	Unit: NT$Thousands
	Title	Name			Remuneration						Ratio of total to net income		Relevant remuneration received by directors who are also employees								Ratio of total to net income		Compensation paid to directors from an invested company other than the company's subsidiary or parent company
			Compe nsa tion (A)		Retire- ment Pension (B)		Bonus (C) (Note 1)		Allowance (D)				Salary and allowance (E)		Severance pay (F)		Employees bonus(G) (Note 1)
			The company	Companies in the financial report	The company	Companies in the financial report	The company	Companies in the financial report	The company	Companies in the financial report	The company	Companies in the financial report	The company	Companies in the financial report	The company	Companies in the financial report	company	The	Companie s in the financial report		The company	Companies in the financial report
																	Cash	Stock	Cash	Stock
Director	Chairman	CHOU, CHIN-WEN	-	-	-	-	12,605	12,605	120	120	12,725 2.35%	12,725 2.35%	16,000	16,000	96	96	-	-	-	-	28,821 5.52%	28,821 5.52%	None
	Director	KAO, MING-CHUAN
	Director	TSAI, CHIN-SHAN
	Director	SHIH, TSUN-TE
	Director	LIN, HSIEN-CHANG
	Director	CHUNG, YEN-YEN
Independent Director	Independent Director	CHOU, CHAI-FA	-	-	-	-	1,500	1,500	180	180	1,680 0.31%	1,680 0.31%	-	-	-	-	-	-	-	-	1,680 0.31%	1,680 0.31%	None
	Independent Director	CHEN, HUANG-HUNG
	Independent Director	LIU, HSUEH-LI

Please describe policies, systems, standards, and structures of independent directors’ remuneration, and the relveance between the remuneration payment and factors, such as responsibilities, risks, and investing time: Fixed payment. If the Company has no profit, the remuneration would be negotiated.
Apart from those disclosed in the above table, the remuneration received by directors for providing services to all companies in financial reports of recent years (such as taking a post as an adviser, other than employee): None.

Note 1: The remuneration of directors and supervisors and the remuneration of employees listed and approved by the board of directors on March 6, 2024, but has not been actually distributed, so it is estimated based on the proportion of last year’s distribution.

Remuneration Scale

	Remuneration Scale	Remuneration Scale	Remuneration Scale	Remuneration Scale
Bracket	Name
	Total of (A+B+C+D)		Total of (A+B+C+D+E+F+G)
	The Company	Companies in the financial report	The Company	Companies in the financial report
Below NT$1,000,000	CHOU, CHAI-FA CHEN, HUANG-HUNG LIU, HSUEH-LI	CHOU, CHAI-FA CHEN, HUANG-HUNG LIU, HSUEH-LI	CHOU, CHAI-FA CHEN, HUANG-HUNG LIU, HSUEH-LI	CHOU, CHAI-FA CHEN, HUANG-HUNG LIU, HSUEH-LI
NT$1,000,000（Included）～NT$2,000,000（Excluded）
NT$2,000,000（Included）～NT$3,500,000（Excluded）	CHOU, CHIN-WEN KAO, MING-CHUAN TSAI, CHIN-SHAN CHUNG, YEN-YEN	CHOU, CHIN-WEN KAO, MING-CHUAN TSAI, CHIN-SHAN CHUNG, YEN-YEN	TSAI, CHIN-SHAN CHUNG, YEN-YEN	TSAI, CHIN-SHAN CHUNG, YEN-YEN
NT$3,500,000（Included）～NT$5,000,000（Excluded）
NT$5,000,000（Included）～NT$10,000,000（Excluded）
NT$10,000,000（Included）～NT$15,000,000（Excluded）			CHOU, CHIN-WEN KAO, MING-CHUAN	CHOU, CHIN-WEN KAO, MING-CHUAN
NT$15,000,000（Included）～NT$30,000,000（Excluded）
NT$30,000,000（Included）～NT$50,000,000（Excluded）
NT$50,000,000（Included）～NT$100,000,000（Excluded）
Over NT$100,000,000
Total	7	7	7	7

3.3.2. Remuneration of General Manager and Deputy General Manager:

Unit: NT$ Thousands

Title	Name	Compensa tion (A)	Compensa tion (A)	Retire-ment Pension(B)	Retire-ment Pension(B)	Bonus (C)	Bonus (C)	Allowance (D) (Note)	Allowance (D) (Note)	Allowance (D) (Note)	Allowance (D) (Note)	Ratio of total to net income(%)	Ratio of total to net income(%)	Compensation paid to directors from an invested company other than the company's subsidiary or parent company
		The company	Companies in the financial report	The Company	Companies in the financial report	The Company	Companies in the financial report	The Company		Companies in the financial report		The Company	Companies in the financial report
								Cash	Stock	Cash	Stock
General Manager	KAO, MING-CHUAN	14,583	14,583	319	319	-	-	3,417	-	3,417	-	18,319 3.38%	18,319 3.38%	None
Deputy General Manager	LIN, CHING-HSIN
Deputy General Manager	HUANG, YUNG-HSIN

Note: The remuneration of employees’ bonus approved by the board of directors on March 6, 2024, but has not been actually distributed, so it is estimated based on the proportion of last year’s distribution.

on the proportion of last year’s distribution.
	Remuneration scale
Bracket	Name
	The Company	Companies in the financial report
Below NT$1,000,000
NT$1,000,000（Included）～NT$2,000,000（Excluded）
NT$2,000,000（Included）～NT$3,500,000（Excluded）
NT$3,500,000（Included）～NT$5,000,000（Excluded）
NT$5,000,000（Included）～NT$10,000,000（Excluded）	KAO, MING-CHUAN LIN, CHING-HSIN HUANG,YUNG-HSIN	KAO, MING-CHUAN LIN, CHING-HSIN HUANG,YUNG-HSIN
NT$10,000,000（Included）～NT$15,000,000（Excluded）
NT$15,000,000（Included）～NT$30,000,000（Excluded）
NT$30,000,000（Included）～NT$50,000,000（Excluded）
NT$50,000,000（Included）～NT$100,000,000（Excluded）
Over NT$100,000,000
Total	3	3

3.3.3. Employee Profit Sharing Granted to Management Team:

Unit: NT$ Thousands

	Title	Name	Stock	Cash(Note)	Total	Ratio of Total Amount to Net Income(%)
Manager	General Manger	KAO, MING-CHUAN	-	6,442	6,442	1.19%
	Deputy General Manager	LIN, CHING-HSIN
	Deputy General Manager	HUANG, YUNG-HSIN
	Senior manager	CHANG, YU-YUAN
	Senior manager	WANG, CHIU-FU
	Senior manager	CHENG, CHIU-YI
	Senior manager	YANG, CHU-TING

3.3.4. Compare and state the ratio of total remuneration paid to the company’s directors, supervisors, general manager and deputy general manager by the company and the companies in the consolidated financial statements to net income in the past two years.
Analysis of the ratio of the total remuneration paid by the company and all companies to the directors, supervisors, general managers and deputy general managers of the company to the net profit after tax.

profit after tax.
Title	2022 Ratio of total to net income（％）		2023 Ratio of total to net income（％）
	The Company	Companies in the financial report	The Company	Companies in the financial report
Director	5.76%	5.75%	5.63%	5.63%
General Manager and Deputy General Manager	2.86%	2.85%	3.38%	3.38%

Remuneration policies, standards and combinations, procedures for determining remuneration, and the correlation between operating performance and future risks:

The company's remuneration policy for directors and supervisors is clearly set out in the company's articles of association. It is authorized by the board of directors to undergo performance evaluation based on the level of participation and contribution to the company's operations and the risks of future operations, and to negotiate with peer standards. The salary of the general manager and deputy general manager refers to the achievement of the performance of each manager and the contribution to the company, and at the same time, the amount of remuneration is set in consideration of the risk factors that may be faced in the operation and management process in the future.

The company's remuneration policy depends on the company's financial situation and operating results for the year, as well as consideration of future capital use planning, According to Article 30 of the company's articles of association to distribute directors, supervisors and employees compensation, so that the possibility of future risks to a minimum.

3.4 Implementation of corporate governance:

3.4.1 Board of directors

1. Board of directors

In recent years, the board of directors has met 6 times [A]. The attendance of directors is as follows:

Title	Name	Attendance in Person[B]	By Proxy	Attendance Rate (%) [B/A]	Remark
Chairman	CHOU, CHIN-WEN	6	0	100%	Re-elected on 2022.05.27
Director	KAO, MING-CHUAN	6	0	100%	Re-elected on 2022.05.27
Director	TSAI, CHIN-SHAN	6	0	100%	Re-elected on 2022.05.27
Director	CHUNG, YEN-YEN	6	0	100%	Newly appointed on 2022.05.27
Independent Director	CHOU, CHAI-FA	6	0	100%	Re-elected on 2022.05.27 No more than 3 consecutive terms
Independent Director	CHEN, HUANG-HUNG	6	0	100%	Re-elected on 2022.05.27 No more than 3 consecutive terms
Independent Director	LIU, HSUEH-LI	6	0	100%	Newly appointed on 2022.05.27 No more than 3 consecutive terms
Other matters that should be recorded: I、Should any of the following circumstances occur at the Board of Directors Meeting, the date of the Board of Directors, the stage, contents proposed, opinions of all independent directors, and the Company's handling of independent directors' opinions, shoud any exist, shall be specified: (1) Matters as stipulated in Paragraph 3 of Article 14 of the Securities Exchange Act: Not Applicable (due to the establishment of the audit committee). (2) Other directors' meeting records or written statements that were opposed or reserved by independent directors were resolved: None.

II、Directors' implementation of the avoidance of interest-related proposals. The names of directors, contents of proposals, and reasons for avoidance of interests, and participation in voting should be stated:

Board of directors meeting	Board of directors	Contents proposed	Cause of conflict of interest and status of voting participation
The 1th time of the 14th term in 2023 2023.01.12	Directors CHOU, CHIN-WEN KAO, MING-CHUAN	1. Passed the managers’ 2022 bonus proposal. 2. Passed to the managers’ 2023 remuneration proposal.	Except for the directors prohibited from discussion and voting, the other attending directors have no objection, and this resolution is approved.
The 1th time of the 14th term in 2024 2024.01.24	Directors CHOU, CHIN-WEN KAO, MING-CHUAN	1. Passed the managers’ 2023 bonus proposal. 2. Passed to the managers’ 2024 remuneration proposal.	Except for the directors prohibited from discussion and voting, the other attending directors have no objection, and this resolution is approved.

III、A Listed and OTC company should disclose the assessment period, duration, scope, method, content of self-assessment of the Board of Directors:

2. Assessment performance of the Board of Directors

Assessmentperiod	Assessment duration	Assessment scope	Assessment method	Assessment content
Once a year	2023.01.01~ 2023.12.31	Includes the entire Board of Directors, individual board members, and functional committee	The Board of Directors, functional committees, and internal self-assessment of the members of the Board of Directors	The contents of the evaluation items are detailed in Note 1. According to the statistical results, the overall board performance should be an effective operation.

Note 1: The assessment content includes at least the following items according to the assessment scope:

(1) Performance evaluation of the board of directors: includes the degree of participation in the company's operations, the quality of the board's decision-making, the composition and structure of the board of directors, the selection and continuous training of directors, internal control, etc.
(2) Performance evaluation of individual directors: includes the company's objectives and tasks, directors' responsibilities, participation in the company's operations, internal relationship management and communication, directors' professional and continuous training, internal control, etc.

(3) Performance evaluation of functional committees: includes the degree ofparticipation in the company’s operations, the recongnition of the responsibilities of functional committees, the quality of functional committees’ decision-making, the composition and selection of functional committees, and internal control. IV、The objectives of strengthening the functions of the board of directors in the current year and the most recent year (for example, the establishment of an audit committee, the enhancement of information transparency, etc.) and the assessment of implementation: (1) The board of directors passed the performance evaluation statistics to show that the overall board performance should be an effective operation. (2) Each director participates in a number of courses related to corporate governance in order to strengthen the knowledge and skills required by the directors. V、Communication between independent directors, internal audit supervisors and certified public accoutant: (1) The internal audit supervisor regularly submits audit reports to independent directors. Independent directors may also check the company's business and financial status at any time, and may request the board of directors or managers to submit reports, and then contact the certified public accoutant if necessary. (2) The key audit items of the 2023 annual report were disclosed. After verification, the Company’s accountants also communicated reports with supervisors and independent directors on important issues of the Company. VI、Others: (1) Directors' training in the current year and the most recent year: Title Name Date Course Hours Institute Chairman CHOU, CHIN-WEN 2023.08.15 Patent layout and litigation practice 3.0 hours Taiwan Corporate Governance Association 2023.11.21 Directors and senior executives of listed companies’understanding of current supervision bycompetent authorities 3.0 hours Taiwan Corporate Governance Association Director KAO, ING-CHUAN 2023.07.25 Common legal issues in corporate merger and acquisition contracts 3.0 hours Taiwan Corporate Governance Association 2023.10.31 From the perspective of management rights and shareholder activism, analysis of foreign investment voting practice cases, international thinkingon the responsibilities of directors and supervisors 3.0 hours Taiwan Corporate Governance Association	(3) Performance evaluation of functional committees: includes the degree ofparticipation in the company’s operations, the recongnition of the responsibilities of functional committees, the quality of functional committees’ decision-making, the composition and selection of functional committees, and internal control. IV、The objectives of strengthening the functions of the board of directors in the current year and the most recent year (for example, the establishment of an audit committee, the enhancement of information transparency, etc.) and the assessment of implementation: (1) The board of directors passed the performance evaluation statistics to show that the overall board performance should be an effective operation. (2) Each director participates in a number of courses related to corporate governance in order to strengthen the knowledge and skills required by the directors. V、Communication between independent directors, internal audit supervisors and certified public accoutant: (1) The internal audit supervisor regularly submits audit reports to independent directors. Independent directors may also check the company's business and financial status at any time, and may request the board of directors or managers to submit reports, and then contact the certified public accoutant if necessary. (2) The key audit items of the 2023 annual report were disclosed. After verification, the Company’s accountants also communicated reports with supervisors and independent directors on important issues of the Company. VI、Others: (1) Directors' training in the current year and the most recent year: Title Name Date Course Hours Institute Chairman CHOU, CHIN-WEN 2023.08.15 Patent layout and litigation practice 3.0 hours Taiwan Corporate Governance Association 2023.11.21 Directors and senior executives of listed companies’understanding of current supervision bycompetent authorities 3.0 hours Taiwan Corporate Governance Association Director KAO, ING-CHUAN 2023.07.25 Common legal issues in corporate merger and acquisition contracts 3.0 hours Taiwan Corporate Governance Association 2023.10.31 From the perspective of management rights and shareholder activism, analysis of foreign investment voting practice cases, international thinkingon the responsibilities of directors and supervisors 3.0 hours Taiwan Corporate Governance Association	(3) Performance evaluation of functional committees: includes the degree ofparticipation in the company’s operations, the recongnition of the responsibilities of functional committees, the quality of functional committees’ decision-making, the composition and selection of functional committees, and internal control. IV、The objectives of strengthening the functions of the board of directors in the current year and the most recent year (for example, the establishment of an audit committee, the enhancement of information transparency, etc.) and the assessment of implementation: (1) The board of directors passed the performance evaluation statistics to show that the overall board performance should be an effective operation. (2) Each director participates in a number of courses related to corporate governance in order to strengthen the knowledge and skills required by the directors. V、Communication between independent directors, internal audit supervisors and certified public accoutant: (1) The internal audit supervisor regularly submits audit reports to independent directors. Independent directors may also check the company's business and financial status at any time, and may request the board of directors or managers to submit reports, and then contact the certified public accoutant if necessary. (2) The key audit items of the 2023 annual report were disclosed. After verification, the Company’s accountants also communicated reports with supervisors and independent directors on important issues of the Company. VI、Others: (1) Directors' training in the current year and the most recent year: Title Name Date Course Hours Institute Chairman CHOU, CHIN-WEN 2023.08.15 Patent layout and litigation practice 3.0 hours Taiwan Corporate Governance Association 2023.11.21 Directors and senior executives of listed companies’understanding of current supervision bycompetent authorities 3.0 hours Taiwan Corporate Governance Association Director KAO, ING-CHUAN 2023.07.25 Common legal issues in corporate merger and acquisition contracts 3.0 hours Taiwan Corporate Governance Association 2023.10.31 From the perspective of management rights and shareholder activism, analysis of foreign investment voting practice cases, international thinkingon the responsibilities of directors and supervisors 3.0 hours Taiwan Corporate Governance Association	(3) Performance evaluation of functional committees: includes the degree ofparticipation in the company’s operations, the recongnition of the responsibilities of functional committees, the quality of functional committees’ decision-making, the composition and selection of functional committees, and internal control. IV、The objectives of strengthening the functions of the board of directors in the current year and the most recent year (for example, the establishment of an audit committee, the enhancement of information transparency, etc.) and the assessment of implementation: (1) The board of directors passed the performance evaluation statistics to show that the overall board performance should be an effective operation. (2) Each director participates in a number of courses related to corporate governance in order to strengthen the knowledge and skills required by the directors. V、Communication between independent directors, internal audit supervisors and certified public accoutant: (1) The internal audit supervisor regularly submits audit reports to independent directors. Independent directors may also check the company's business and financial status at any time, and may request the board of directors or managers to submit reports, and then contact the certified public accoutant if necessary. (2) The key audit items of the 2023 annual report were disclosed. After verification, the Company’s accountants also communicated reports with supervisors and independent directors on important issues of the Company. VI、Others: (1) Directors' training in the current year and the most recent year: Title Name Date Course Hours Institute Chairman CHOU, CHIN-WEN 2023.08.15 Patent layout and litigation practice 3.0 hours Taiwan Corporate Governance Association 2023.11.21 Directors and senior executives of listed companies’understanding of current supervision bycompetent authorities 3.0 hours Taiwan Corporate Governance Association Director KAO, ING-CHUAN 2023.07.25 Common legal issues in corporate merger and acquisition contracts 3.0 hours Taiwan Corporate Governance Association 2023.10.31 From the perspective of management rights and shareholder activism, analysis of foreign investment voting practice cases, international thinkingon the responsibilities of directors and supervisors 3.0 hours Taiwan Corporate Governance Association	(3) Performance evaluation of functional committees: includes the degree ofparticipation in the company’s operations, the recongnition of the responsibilities of functional committees, the quality of functional committees’ decision-making, the composition and selection of functional committees, and internal control. IV、The objectives of strengthening the functions of the board of directors in the current year and the most recent year (for example, the establishment of an audit committee, the enhancement of information transparency, etc.) and the assessment of implementation: (1) The board of directors passed the performance evaluation statistics to show that the overall board performance should be an effective operation. (2) Each director participates in a number of courses related to corporate governance in order to strengthen the knowledge and skills required by the directors. V、Communication between independent directors, internal audit supervisors and certified public accoutant: (1) The internal audit supervisor regularly submits audit reports to independent directors. Independent directors may also check the company's business and financial status at any time, and may request the board of directors or managers to submit reports, and then contact the certified public accoutant if necessary. (2) The key audit items of the 2023 annual report were disclosed. After verification, the Company’s accountants also communicated reports with supervisors and independent directors on important issues of the Company. VI、Others: (1) Directors' training in the current year and the most recent year: Title Name Date Course Hours Institute Chairman CHOU, CHIN-WEN 2023.08.15 Patent layout and litigation practice 3.0 hours Taiwan Corporate Governance Association 2023.11.21 Directors and senior executives of listed companies’understanding of current supervision bycompetent authorities 3.0 hours Taiwan Corporate Governance Association Director KAO, ING-CHUAN 2023.07.25 Common legal issues in corporate merger and acquisition contracts 3.0 hours Taiwan Corporate Governance Association 2023.10.31 From the perspective of management rights and shareholder activism, analysis of foreign investment voting practice cases, international thinkingon the responsibilities of directors and supervisors 3.0 hours Taiwan Corporate Governance Association	(3) Performance evaluation of functional committees: includes the degree ofparticipation in the company’s operations, the recongnition of the responsibilities of functional committees, the quality of functional committees’ decision-making, the composition and selection of functional committees, and internal control. IV、The objectives of strengthening the functions of the board of directors in the current year and the most recent year (for example, the establishment of an audit committee, the enhancement of information transparency, etc.) and the assessment of implementation: (1) The board of directors passed the performance evaluation statistics to show that the overall board performance should be an effective operation. (2) Each director participates in a number of courses related to corporate governance in order to strengthen the knowledge and skills required by the directors. V、Communication between independent directors, internal audit supervisors and certified public accoutant: (1) The internal audit supervisor regularly submits audit reports to independent directors. Independent directors may also check the company's business and financial status at any time, and may request the board of directors or managers to submit reports, and then contact the certified public accoutant if necessary. (2) The key audit items of the 2023 annual report were disclosed. After verification, the Company’s accountants also communicated reports with supervisors and independent directors on important issues of the Company. VI、Others: (1) Directors' training in the current year and the most recent year: Title Name Date Course Hours Institute Chairman CHOU, CHIN-WEN 2023.08.15 Patent layout and litigation practice 3.0 hours Taiwan Corporate Governance Association 2023.11.21 Directors and senior executives of listed companies’understanding of current supervision bycompetent authorities 3.0 hours Taiwan Corporate Governance Association Director KAO, ING-CHUAN 2023.07.25 Common legal issues in corporate merger and acquisition contracts 3.0 hours Taiwan Corporate Governance Association 2023.10.31 From the perspective of management rights and shareholder activism, analysis of foreign investment voting practice cases, international thinkingon the responsibilities of directors and supervisors 3.0 hours Taiwan Corporate Governance Association
Title	Name	Date	Course	Hours	Institute
Chairman	CHOU, CHIN-WEN	2023.08.15	Patent layout and litigation practice	3.0 hours	Taiwan Corporate Governance Association
		2023.11.21	Directors and senior executives of listed companies’understanding of current supervision bycompetent authorities	3.0 hours	Taiwan Corporate Governance Association
Director	KAO, ING-CHUAN	2023.07.25	Common legal issues in corporate merger and acquisition contracts	3.0 hours	Taiwan Corporate Governance Association
		2023.10.31	From the perspective of management rights and shareholder activism, analysis of foreign investment voting practice cases, international thinkingon the responsibilities of directors and supervisors	3.0 hours	Taiwan Corporate Governance Association

Title	Name	Date	Course	Hours	Institute
Director	TSAI, CHIN-SHAN	2023.11.14	Emerging money laundering models and regulatory trends	3.0 hours	Taiwan Corporate Governance Association
		2023.11.17	Corporate Governance Supervisor Compliance Practice	3.0 hours	Taiwan Corporate Governance Association
Director	CHUNG, YEN-YEN	2023.08.22	Sustainability and digital dual-axis transformation	3.0 hours	Taiwan Corporate Governance Association
		2023.10.24	AI Applications, Law and Audit	3.0 hours	Taiwan Corporate Governance Association
Independent Director	CHOU, CHAI-FA	2023.04.18	Corporate growth strategies and external innovation	3.0 hours	Taiwan Corporate Governance Association
		2023.04.25	Offensive and defensive strategies in management rights disputes and legal liabilityrisks of companyleaders(independent directors)	3.0 hours	Taiwan Corporate Governance Association
		2023.07.11	Risks are everywhere, how to effectively manage them?	3.0 hours	Taiwan Corporate Governance Association
		2023.07.28	How audit committees interpret and use audit quality indicators (AQI)	3.0 hours	Taiwan Corporate Governance Association
Independent Director	CHEN,HUANG- HUNG	2023.05.11	How to understand financial statements - a lesson for directors and supervisors with non-financial backgrounds	3.0 hours	Taiwan Academy of Banking and Finance
		2023.05.23	Review and analysis of financial statements by directors and supervisors	3.0 hours	Taiwan Academy of Bankingand Finance
Independent Director	LIU, HSUEH-LI	2023.07.28	How audit committees interpret and use audit quality indicators (AQI)	3.0 hours	Taiwan Corporate Governance Association
		2023.10.17	How can independent directors combine business judgment and fulfill their dutyof loyalty?	3.0 hours	Taiwan Corporate Governance Association

(2) Proposals for the annual board meeting: please refer to page 60, 3.4.11 Important resolutions of the shareholders meeting and the board of directors in the most recent year and as of the printing date of the annual report.

3.4.2 The operation of the audit committee or the participation of the supervisors in the operation of the board of directors:

The operation of the audit committee:

Operation of the Audit Committee

A total of 2 meetings of the audit committee were held in 2023. Attendance status is as follows:

Title	Title	Name	Attendance in Person (B)	Attendance in Person (B)	By proxy	By proxy	Attendance Rate (%) (B/A)	Attendance Rate (%) (B/A)	Remarks	Remarks
Convener		CHOU, CHAI-FA	6		0		100%		Newly appointed on 2022.05.27
Committee member		CHEN, UANG-HUNG	6		0		100%		Newly appointed on 2022.05.27
Committee member		LIU, HSUEH-LI	6		0		100%		Newly appointed on 2022.05.27
Other scenarios to be described: A. If the audit committee is found to have any of the following situations, it should state the date of the board meeting, session, case content, resolution result by the audit committee, and administration of the Company regarding the opinion of the audit committee a. Items listed in Article 14-5 of the Securities and Exchange Act: Audit Committee Contents proposed Matters stipulated in paragraphs 14-3 of the Securities Exchange Act Items suggested or opposed by independent directors Administration of the Company regarding the opinion of the Audit Committee Resolution result by the Audit Committee The 1th time of the 14th term in 2023 2023.01.12 Passed the 2023 annual audit plan change proposal. 14-5-2 No No The matter is approved by all the attendees The 1th time of the 14th term in 2023 2023.01.12 Passed internal control statement that was effective in design and implementation in 2022. 14-5-2 No No The matter is approved by all the attendees Passed 2022 business report and financial statement proposal. 14-5-10 No No The matter is approved by all the attendees
Audit Committee	Contents proposed			Matters stipulated in paragraphs 14-3 of the Securities Exchange Act		Items suggested or opposed by independent directors		Administration of the Company regarding the opinion of the Audit Committee		Resolution result by the Audit Committee
The 1th time of the 14th term in 2023 2023.01.12	Passed the 2023 annual audit plan change proposal.			14-5-2		No		No		The matter is approved by all the attendees
The 1th time of the 14th term in 2023 2023.01.12	Passed internal control statement that was effective in design and implementation in 2022.			14-5-2		No		No		The matter is approved by all the attendees
	Passed 2022 business report and financial statement proposal.			14-5-10		No		No		The matter is approved by all the attendees

Audit Committee	Contents proposed	Matters stipulated in paragraphs 14-3 of the Securities Exchange Act	Items suggested or opposed by independent directors	Administration of the Company regarding the opinion of the Audit Committee	Resolution result by the Audit Committee
The 1th time of the 14th term in 2023 2023.01.12	Passed 2022 surplus distribution proposal.	14-5-11	No	No	The matter is approved by all the attendees
	Passed the amendment to the Company's "Internal Control Self-Assessment Measures".	14-5-1	No	No	The matter is approved by all the attendees
The 1th time of the 14th term in 2023 2023.01.12	Passed the 2023 Q1 consolidated financial statement of the Company.	14-5-10	No	No	The matter is approved by all the attendees
	Passed the amendment to the Company's "Internal Control Self-Assessment Measures".	14-5-1	No	No	The matter is approved by all the attendees
The 1th time of the 14th term in 2023 2023.01.12	Change in the Company's Finance and Accounting Supervisor.	14-5-9	No	No	The matter is approved by all the attendees
The 1th time of the 14th term in 2023 2023.01.12	Passed the 2023 Q2 consolidated financial statement of the Company.	14-5-10	No	No	The matter is approved by all the attendees
	Passed the amendment of the Company's "Subsidiary Internal Control System" proposal.	14-5-1	No	No	The matter is approved by all the attendees

Audit Committee	Contents proposed	Matters stipulated in paragraphs 14-3 of the Securities Exchange Act	Items suggested or opposed by independent directors	Administration of the Company regarding the opinion of the Audit Committee	Resolution result by the Audit Committee
The 1th time of the 14th term in 2023 2023.01.12	Passed the 2024 annual audit plan.	14-5-11	No	No	The matter is approved by all the attendees
	Passed the audit fees, professionalism and independence assessment of the CPAs.	14-5-8	No	No	The matter is approved by all the attendees
	Passed the 2023 Q3 consolidated financial statement of the Company.	14-5-10	No	No	The matter is approved by all the attendees
	Passed the case of the Company's endorsement guarantee for its subsidiaries	14-5-6	No	No	The matter is approved by all the attendees

b. Apart from the aforementioned items, other cases of resolution not passed by the Audit Committee but agreed to by two-thirds of the entire board of directors: None
B. Regarding execution by independent board directors preventing cases of conflict of interest, name of independent board director, motion content, case of conflict of interest avoided, and voting participation should be described: None
C. Communication of independent board directors with the Chief audit officer and CPA (company finance, major issues of business conditions conducted through communications, and the methods and results should be described).
a. The Chief audit officer will prepare an audit report, follow it up after it is submitted, and hand it over to an independent board director for review by the end of the month after the month in which the auditing items were completed. The chief audit officer should report to Independent Directors about internal auditing business and report the audit results upon completion at least quarterly.
b. The CPAs discuss with directors at annual corporate communication meeting.

D. Communication and scenario of independent board directors with the Chief audit officer and CPA

Date of meeting	Subject of communication	Items of communication	Process execution results of the Company
2023.01.12 Audit Committee	All Independent Directors Chief internal auditor Principal accountingofficer	Passed the 2023 annual audit plan change proposal.	Submit to the Board for resolution.
2023.03.14 Audit Committee	All Independent Directors Chief internal auditor Principal accounting officer Planningdepartment manager	1. 2022 Q4 annual internal audit implementation 2. Discussion on the statement of Internal Control System for 2022	Submit to the Board for resolution.
2023.05.09 Audit Committee	All Independent Directors Chief internal auditor Principal accounting officer Planningdepartment manager	2023 Q1 annual internal audit implementation	Submit to the Board for resolution.
2023.08.10 Audit Committee	All Independent Directors Principal accountingofficer	2023 Q2 annual internal audit implementation	Submit to the Board for resolution.
2023.11.08 Audit Committee	All Independent Directors Principal accounting officer	1. 2023 Q3 annual internal audit implementation 2. Discussion on the 2024 Internal Audit Plan	Submit to the Board for resolution.
2023.11.08 Communication meeting between the CPA and independent directors	CPA All Independent Directors Principal accounting officer	1. 2023 key audit matters 2. Annual Audit Plan	Independent director discussion

E. The audit committee intends to assist the board of directors in overseeing the quality and integrity of the company's accounting, auditing, and financial reporting processes and financial controls. Matters to be deliberated by the audit committee include:

a. Establish or amend the internal control system in accordance with Article 14.1 of the Securities Exchange Act

b. Evaluate the effectiveness of the internal control system

c. According to Article 36.1 of the Securities and Exchange Act, establish or amend the procedures for asset acquisition or disposal, transaction of derivative commodities, lending, endorsement or security provision and other material financial transactions.
d. Items relevant to the directors’ interest

e. Transaction of major asset or derivative commodities

f. Lending of large amounts, endorsements and security provisions

g. Raising, issuance or private placement of securities of an equity nature.

h. Appointment, discharge and remuneration of certified public accountant.

i. Appointment and removal of finance, accounting or internal audit supervisors

  - j. Annual financial reports signed or sealed by the chairman of the board of directors, the manager and accountant in charge, and the second quarter financial report subject to audit and certification by the accountant

k. Other major issues stipulated by the company or the competent authority
F. Business performance of the audit committee in 2023.
- a. The Company holds quarterly audit committee meetings to supervise the company's financial and business conditions and internal control system.
- b. Refer A.a. for detailed operations in 2023. c. Review of financial reports.
- d. Evaluate the effectiveness of the internal control system: The audit committee evaluates the effectiveness of the Company's internal control systems, policies, and procedures (including financial, operational, risk management, information security, compliance, and other control measures) and then reviews the regular reports submitted by the audit department and the registered public accountant and management.
The situation of supervisors participating in the operation of the board of directors: Not Applicable (due to the establishment of the audit committee)

3.4.3 Corporate governance implementation status and deviations from “Corporate Governance Best-Practice Principles for TSEC/TPEx Listed Companies”

Companies”
Item	Implementation Status			Non-implementati on and its reason(s)
	Y	N	Summary
1. If the Company established and disclosed Corporate Governance Principles in accordance with Corporate Governance Best-Practice Principles for TWSE/GTSM Listed Companies?	�		The Company has set up the “Corporate Governance Best Practice Principles” which has been disclosed on the Corporation’s official website.	Compliant with the governance practice.
2. Shareholding Structure & Shareholders’ Rights (1) If the Company established internal procedures to handle shareholder suggestions, proposals, complaints and litigation and execute accordingly? (2) If the Company maintained of a list of major shareholders and a list of ultimate owners of these major shareholders? (3) If risk management mechanism and “firewall” between the Company and its affiliates are in place?	� � �		(1) The Company has established the spokesperson procedures and relevant processes. (2) The company regularly updates the shareholders register and the list of major shareholders in accordance with the regulations, it is disclosed that shareholders holding more than 5% of shares or the proportion of shareholding accounts for the top ten shareholders' names, shareholding amount and proportion in both the annual report and company website. (3) The company's various investment transactions are handled in accordance with the "Regulations Governing the Acquisition and Disposal of Assets", "Subsidiary Management System", "Related Party Transaction Management Regulations", "Internal Control System", "Internal Audit Implementation Rules" and other related laws and regulations.	No difference. No difference. No difference.

Item	Implementation Status	Implementation Status	Implementation Status	Non-implementati on and its reason(s)
	Y	N	Summary
(4) If the Company established internal policies that forbid insiders from trading based on non-disclosed information?	�		(4) The Company has formulated the "Procedures for Preventing Insider Trading" to prohibit company insiders from utilizing information undisclosed to the market to transact negotiable securities. We provide internal training at least once a year, which includes the security of matter information, insider trading prevention and the relevant regulations. In 2023, there were 54 people attending the courses for insider trading prevention,totaling54 traininghours	No difference.
3. Structure of Board of Directors and its responsibility (1) Does the Board of Directors set a diversity policy and implement specific management objectives?	�		(1) Zippy advocates the diversity policy of directors, to strengthen corporate governance, promote the holistic development of the Board membership, and improve the overall performance of the company. The BOD emphasizes composition diversity such as age, gender, etc., with members equipped with various role-related knowledge, skills, and industrial backgrounds. In order to enhance the functions of the BOD and achieve the ideal goal of corporate governance, Article 20 of Zippy's "Corporate Goverance Best Practice Principle" states that the BOD should have the following functions: a. Ability to make operational judgments. b. Ability to perform accounting and financial analysis. c. Ability to conduct management administration. d. Ability to conduct crisis management. e. Knowledge of the industry. f. An international market perspective. g. Ability to lead. h. Ability to make policy decisions. The company's board of directors consists of 7 directors (including 3 independent directors) with the above abilities. The average term of office of Zippy’s directors is more than 10 years, and 2 independent directors stay over 3 years. The Board members are all from	(1) Compliant with the governance practices.

Item	Implementation Status	Implementation Status	Implementation Status	Non-implementati on and its reason(s)
	Y	N	Summary
(2) If the Company established any other functional committee in addition to Remueration Committee, and Audit Committee as required by law? (3) Whether the Company has established a performance assessment method and the assessment method for the Board of Directors, conducted the performance assessment annually and regularly, and reported the results of the performance assessment to the Board of Directors, as well as applied it as a reference for individual directors' remuneration and nomination for renewal?	� �		our country, and all the three independent directors account for 42%, one woman independent director included. 2 directors who are also employee accounts for 28%. All directors are over 60 years old. The policy and implementation to diversify BOD membership have met the standards in Article 20 of Zippy’s “Corporate Governance Best Practice Principles." In the future, the diversity policy will be revised in a timely manner according to the operation type and development needs of the BOD, including but not limited to the two major standards of basic conditions and values, professional knowledge and skills, so as to ensure that members of the board of directors should generally have necessary knowledge, skills and qualities to perform their duties. (2) The Company has a sustainable development committee. It operates according to the Sustainable Development Committee Charter and publishes the sustainability report every year. (3) The Company has regulations for evaluating the performance of the Board which has been approved by the Board of Directors and has been exposed in the Corporate Governance section of the company’s official website. The relevant specifications are described as follows: a. Evaluation cycle and period: The Company's board of directors should perform an internal board performance evaluation at least once a year. At the end of each year, the Company's board of directors shall conduct an internal board performance evaluation every year according to the evaluation procedures and the evaluation indexes in Articles 6 and 8. The evaluation shall be completed before the end of the first quarter of the following year.	(2) Compliant with the governance practices. (3) The company has a sustainable development committee. In the future, other functional committees will be set up according to

Item	Implementation Status	Implementation Status	Implementation Status	Non-implementati on and its reason(s)
	Y	N	Summary
(4) If the Company assess the independence of CPA periodically?	�		b. Scope and methods of evaluation: The Company's board evaluation scope covers the evaluation of the board as a whole, individual directors, Audit committee and Remueration committee. Methods of evaluations include the internal evaluation of the board, self-evaluation by individual board members, peer evaluation, and evaluation by appointed external professional institutions, experts, or other appropriate methods. c. The Company has already conducted the 2023 performance evaluation for the board of directors and board members in accordance with the "The Regulation of Evaluation of the Board of Directors." The executive unit has collected the self-evaluation questionnaires for directors’ appraisal of all board members, and the self-evaluation questionnaire for board performance appraisal evaluated by the chairman. The result report is made according to Article 8 of the above regulation, and sent to the board of directors for review. According to statistical results, overall board performance is an effective operation. (4) The Company shall select as its external auditor a professional, responsible, and independent attesting CPA, based on Article 29 of "Corporate Governance Best-Practice Principles for TWSE-TPEx Listed Companies.~~”~~We refer to the Audit Quality Indicators (AQIs) to evaluate the independence and suitability of the CPA engaged by the Company regularly at least once a year, and the evaluation results must be reported to the board of directors. In 2023, ZIPPY referred to the AQIs and evaluated that the two certified public accountants, Guo Rou-Lan and Chen Ying-Ru, have independence and suitability without any issues. The important items of the evaluation are as follows:	the Company's development needs and legal regulations. (4) Compliant with the governance practices.

		Implementation Status
Y	N	Summary
		Evaluation Items	Results
		1. The certified public accountants do not have any direct or material indirect financial interests with ZIPPY.	Yes
		2. The certified public accountants do not have any material close business relationships with ZIPPY.	Yes
		3. The certified public accountants did not have any potential employment relationships when auditingZIPPY.	Yes
		4. The certified public accountants did not have any money borrowingincidents with ZIPPY.	Yes
		5. The certified public accountants did not receive any material gifts or presents from ZIPPY and its directors or managerial officers(exceeding general social customs).	Yes
		6. The certified public accountants have not provided audit services to ZIPPY for seven consecutiveyears.	Yes
		7. The certified public accountants do not hold any shares of ZIPPY	Yes
		8. During the audit period or the most recent two years, the certified public accountants themselves, their spouses or dependents, and their audit team members did not serve as directors, managerial officers, or positions that significantly influence the audit case of ZIPPY, and they confirmed that they will not serve in the aforementioned positions during future auditperiod.	Yes
		9. The certified public accountants have complied with the independence regulations stipulated in Statement of Auditing Standards No. 10, and obtained the "Independence Statement" issued by the certified public accountants.	Yes

Item	Implementation Status	Implementation Status	Implementation Status	Non-implementati on and its reason(s)
	Y	N	Summary
4. As a TWSE/TPEx listed company, does the Company have set a corporate governance unit or personnel, and appoints a corporate governance supervisor responsible for the concerned affairs (including but not limited to offering necessary datas for the directors and supervisors, assisting them in complying with laws and regulations, handling matters and meeting minutes related to the BOD and shareholders' meetings,and so on)?	�		At the BOD meeting on May 9, 2023, ZIPPY approved the appointment of Mr. Lin Jing-Xin, Deputy General Manager of the Electronic Components Division, as the Corporate Governance Officer. In 2023, the Corporate Governance Officer attended 3 training courses, totaling 9 hours.	Compliant with the governance practices.
5. If the Company established communication channel with interested parties (Including but not limited to shareholders, employees, customers and suppliers, etc.) and disclosed key corporate social responsibility issues frequently enquired by stakeholders on the designated area of the corporate website?	�		1. The company has a spokesperson system and a contact area on the external website. 2. The company's website has set up a special area for stakeholders.	Compliant with the governance practices.
6. If the Company engaged professional transfer agent to host annual general shareholders’ meeting?	�		We engage SinoPac Securities Co., Ltd. to handle shareholders meeting matters.	Compliant with the governance practices.
7. Information Disclosure (1) If the Company set up a corporate website to disclose information regarding the Company’s finance, business and corporate governance?	�		(1) The Company updates and discloses financial business and corporate governance information through the MOPS and the company website (http://www.zippy.com).	Compliant with the governance practices

Item	Implementation Status	Implementation Status	Implementation Status	Non-implementati on and its reason(s)
	Y	N	Summary
(2) If the Company adopted any other information disclosure channels (e.g., maintaining an English-language website, appointing designated personnel to handle information collection and disclosure, appointing spokespersons, webcasting investors conference, etc)? (3) Whether the Company publishes and reports the annual financial statement within two months after the end of the fiscal year and announces and reports the first, second, and third quarter financial statements and the operation situation of each month in advance within the prescribed period?	�	�	(2) Compliant with the governance practices. (3) The company temporarily does not consider publishing and reporting annual financial report within two months after the end of the fiscal year. The announcement of the Q1, Q2 and Q3 financial reports and the monthly operating status as early as possible within the prescribed time limit, according to the date of approval by the board and Monthly closing status.	Compliant with the governance practices. Compliant with the governance practices..
8. If the Company had other important information to facilitate better understanding of the Company’s corporate governance practices (including but not limited to employee rights, employee wellness, investor relations, supplier relations, rights of stakeholders, directors’and supervisors’ training records, the implementation of risk management policies and risk evaluation measures, the implementation of customer relations policies, and purchasing insurance for directors and supervisors)?	�		1. Employee rights and interests: The Company regulates employees in accordance with the Labor Standards Act and relevant laws and regulations, so that the employees’ rights and interests are protected, including working hours and wages, vacation and retirement applications. 2. Employee care: Out of humane spirit, an employee welfare committee and emergency allowances are set up.We provide employees to enjoy company's additional benefits, such as cash gift, wedding/funeral/medical subsidies, children's scholarships and travel subsidies. If an employee is in difficulty, the Company can immediately help. 3. Investor Relations: Set up a spokesperson system and company website to enable investors to understand the operation of the Company.	Compliant with the governance practices.

Item	Implementation Status	Implementation Status	Implementation Status
	Y	N	Summary
			4. Supplier relations: The Company maintains good relations with suppliers. 5. Further training of directors: Please refer to pages 20~21. 6. The Company has purchased liability insurance for directors. 7. Directors shall recuse themselves from resolutions due to conflicts of interests. 8. The Company reports annually to Board of Directors on the risk of environment and the implementation of risk management measures, and announced “The Report of Risk Management Assessment and The Current Status of Risk Already Incurred in 2023” on the company website. 9. The Company has a special section for stakeholders on the company website to state: a. Communication with interested parties including communication method and frequency. b. Identification of interested parties including employees, customers, suppliers and government authorities. c. Concerned issues.
9. Please describe the improvements of the corporate governance evaluation results released by the corporate governance center of the Taiwan Stock Exchange Corporation in the last year, and propose priority matters or measures to strengthen areas yet unimproved: (1) Hold at least two institutional investor conferences each year. (2) Regarding the training of directors (including independent directors), timely inform the directors of the recommended courses, and promote and encourage participation. (3) Does the company set up a full-time (part-time) unit that promotes corporate governance, corporate social responsibility, and corporate integrity management, and explains the operation and execution of the set-up unit in the annual report and company website? A. The concurrent corporate governance unit is the planning department of the chairman's office, and handles related matters in accordance with the "Corporate Governance Practice Code" published on the company's website. B. The Company established the CSR Committee in 2019. In 2022, it was renamed "Sustainable Development Committee and the Sustainable Development Committee Charter approved by the BOD was also published on the company's website." The committee is affiliated to the general manager's office. It holds a regular meeting yearly with meeting minutes, releasing a sustainability report every year. C. In order to achieve sound ethical corporate management,the Companyannounced the " Ethical Corporate Management Best Practice

Item	Implementation Status	Implementation Status	Implementation Status	Non-implementati on and its reason(s)
	Y	N	Summary
Principles" approved by the BOD on the company’s website, and designated the Planning Department as a concurrent unit responsible for the formulation and supervision of integrity management policies and prevention programs Implementation, mainly manage the following matters, and report to the BOD at least once a year: a. Assist in integrating integrity and ethical values into the company's business strategy, and cooperate with the legal system to formulate relevant anti-fraud measures to ensure integrity management. b. Regularly analyze and evaluate the risks of dishonesty in the business scope, and formulate plans to prevent dishonesty, as well as formulate work procedures and behavior guidelines related to work business in each plan. c. Plan the internal organization, organization and responsibility, and place a mutual supervision and check mechanism for business activities with a high risk of dishonesty in the business scope. d. Promotion and coordination of integrity policy advocacy training. e. Plan the reporting system to ensure the effectiveness of the implementation. f. Assist the board of directors and management to check and evaluate whether the preventive measures established by the implementation of integrity management are operating effectively, and regularly evaluate and follow the relevant business processes and make reports. We will make regular analysis and assessment of the risks of dishonest behaviors in the business scope, specific practices, and plans to prevent dishonesty. The relevant report will be consolidated and submitted to the board of directorsyearly.

3.4.4 Status of remueration committee:

On December 23, 2009, the Company passed the resolution of the board of directores to establish the “remuneration committee.” Its duties are to formulated and regularly review the performance evaluation of directors and managers and the policies, systems, standards and structures of salary remuneration and to determine the remuneration of directores and managers, and make an appropriate combination with the Company’s operating performance and goals, so as to attract and retain high-quality talents and enhance the competivieness of the Company.

1. Remueration committee

							2024.03.23
Title	Critiria Name	Professional qualification and work experience		Independence（Note2）			Number of other public companies in which the individual is concurrently serving as an independent director
			1	2	3	4
Independent Director (Convenor)	CHOU, CHAI-FA	More than five years working experience in business, financial and accounting. (Note 1)	�	15,000 shares / 0.01%	�	No such situation	0
Independent Director	CHEN, HUANG-HUNG	More than five years working experience in business, financial and accounting. (Note 1)	�	No shares	�	No such situation	0
Other	WU, SHUEN-TE	More than five years professional qualifications for an instructor of higher position in an academic department related to the business needs of the Company in a public or privatejunior college,or university.	�	No shares	�	No such situation	0

Note1: Please refer to page 10, 3.2.2. Professional qualifications and independence analysis of the board.

Note2: The independence criteria to indicate whether the remuneration committee members had met any of the conditons:

(1) Including but not limited to oneself, the spouse, and second-level blood relative whether are the directors, supervisors, or employee of the Company or the affiliated enterprises.
(2) The shares and proportion of the Company which held by a natural-person shareholder, together with those held by the person's spouse and second-level blood relative (or held by the person under others' names).
(3) Whether serve in the directors, supervisors, or employee of a company which has specific relationship with the Company. (Please refer to Article 6, paragraph 1, section 5-8, of Regulations Governing the Appointment and Exercise of Powers by the Remuneration Committee of a Company Whose Stock is Listed on the Taiwan Stock Exchange or the Taipei Exchange).
(4) The remuneration is received by providing commercial, legal, financial, accounting or related services to the Company or the affiliated enterprises in the last two years

The state of the remueration committee's implementation
a. The remueration committee comprised of 3 members.
b. Tenure of the remueration committee is from May 27, 2022 to May 26, 2025. A total of 2 (A) meetings of the remueration committee were held in 2023, the status of attendance is as follows:

Title	Name	Attendance in Person (B)	By Proxy	Attendance Rate (%) [B/A]	Remarks
Chairman	CHOU, CHAI-FA	2	0	100%	Re-elected on 2022.05.27
Member	CHEN, HUANG-HUNG	2	0	100%	Re-elected on 2022.05.27
Member	WU, SHUEN-TE	2	0	100%	Re-elected on 2022.05.27
Other information to be disclosed: 1. If Board of Directors did not adopt or revise the proposal made by the Remueration Committee, please specify the date, session, agendas and resolutions of the Board of Directors meeting and how the Company handled the proposal made by the Remueration Committee (If amount of the compensation approved by the Board of Directors is higher than that proposed by the Remueration Committee, please specify the reasons and differences in proposals.): None. 2. If any members of the Remueration Committee were against or reserved their opinions towards the resolutions, please specify the date, session, agendas, opinions of all members and how the opinions were handled: None.

c. Operation of the salary and remuneration committee in 2023:

Date	Contents proposed	Result of resolution	Company’s disposal of the salary and committee’s suggestion
2023.01.12	1. 2022 Manager compensation and year-end bonus planning 2. 2023 employee compensation and director compensation	All members of the committee agree to adopt the proposal	Submitted to the board of directors; all present directors agree to adopt the proposal
2023.03.14	2022 remuneration distribution to employees, and board directors	All members of the committee agree to adopt the proposal	Submitted to the board of directors; all present directors agree to adopt the proposal

3.4.5 Sustainable development implementation status and deviation from the “Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies”:

Companies”:
Item	Implementation Status			Non-implement -ation and its reason(s)
	Y	N	Summary
1. Does the company establish a governance structure and set up a dedicated (part-time) unit to promote sustainable development, which is authorized and supervised by the BOD?	�		1. The company's governance structure for promoting sustainable development. 2. Execution by respective organizational team, including but not limited to I. Corporate Governance Team: (1) Comply with competent authorities, laws, articles of incorporation, and relevant company regulations to implement corporate governance. (2) Establish and implement the company's internal control and internal audit systems. (3) Anti-corruption and protection of shareholders' rights. (4) Respect stakeholders' rights and interests. (5) Protect intellectual property rights; establish information security and privacy management. (6) Ensure accuracy of financial data and enhance company information transparency. Corporate Governance Team Employee Safety and Health Team Environmental Management Team Supply Chain Management Team Sustainable Development Committee Board of Directors Sustainability Executive Specialist	No difference

Item	Implementation Status	Implementation Status	Implementation Status	Non-implement -ation and its reason(s)
	Y	N	Summary
			II. Employee Safety and Health Team : (1) Comply with labor laws and regulations, prohibit child labor, protect legal rights of employees, respect labor human rights, eliminate all forms of forced labor and employment discrimination, and not infringe on workers' basic rights to health and safety. (2) Ensure no differential treatment in personnel appointments on the basis of gender, race, age, marital and family status, etc., and implement equal rights in salary and benefits, employment conditions, professional training, and promotion opportunities. (3) Establish diverse communication channels for employees. (4) Regularly hold employee training courses related to corporate sustainability. III. Environmental Management Team : (1) Provide employees with a safe and healthy working environment. (2) Formulate the company's energy saving, carbon reduction, and greenhouse gas reduction strategies, and regularly disclose related data. (3) Use recyclable and reusable renewable resources. (4) Reduce pollutants and properly handle waste and hazardous substance management. (5) Appoint dedicated environmental safety and health management personnel. (6) Enhance the utilization rate of various resources, adopt renewable materials with lower environmental impact, and enable sustainable use of resources. (7) Properly respond to environmental safety and health issues of concern to stakeholders. IV. Supply Chain Management Team : (1)Obtain corporate sustainability commitments from qualified suppliers and conduct irregular corporate sustainability audits on suppliers. (2)Promotegreenprocurement and responsibleprocurement.

Item	Implementation Status	Implementation Status	Implementation Status	Non-implement -ation and its reason(s)
	Y	N	Summary
			(3)Establish transparent and effective customer and supplier complaint procedures, and handle complaints fairly and in a timely manner. (4)Protect and respect the intellectual property rights and personal privacy data of customers and suppliers. Following the vision and mission of the company's ESG policy, the "CSR Committee" was established in 2019. It was renamed the "Sustainable Development Committee" in 2022, being the highest-level sustainable development decision-making center of Zippy, which is led by our chairman. A number of senior executives from different fields jointly review the company's core operating capabilities, and formulate mid-term and long-term sustainable development plans. The "Sustainable Development Committee" will serve as a cross-departmental communication platform for integrating vertically and horizontally. Through periodic meetings and task force based on issues, we identify concernerd sustainable issues of the company and stakeholders, formulate corresponding strategies and work policies, and compile budgets related to sustainable development of each organization to implement annual plans. We also track the implementation results to ensure that the sustainable development strategy is fully implemented in regular operation. The sustainable development committee will report to the BOD on the implementation results of sustainable development (including ESG reports) and future work plans every year, describing the formulation of management policies, strategies, and objectives, as well as review measures. The report is published on the company's website under [Corporate Governance]> [Annual Execution] at https://www.zippy.com/zh-tw/control.aspx#Implement The management team must propose corporate strategies to the BOD. The BOD must evaluate the odds of success of these strategies, regularly review the progress of the strategies and urge the team foradjustment when necessary.

Item	Implementation Status	Implementation Status	Implementation Status	Non-implement -ation and its reason(s)
	Y	N	Summary

2. Does the Company follow materiality principle to conduct risk assessment for environmental, social and corporate governance topics related to company operation, and establish risk management related policy or strategy?	�		1. The boundary of this risk assessment includes not only the Taiwan parent company, but also Zippy Technology (Dongguan), G-BRIM International Inc., Zippy Technology (Suzhou), Zippy Technology USA, ZIPPY TECHNOLOGY EUROPE GMBH, and QUAN-FA CORPORATION COMPANY. 2. Zippy has risk management principles. The execution of risk management is based on the four-tier structure –risk environment, risk management priority, risk evaluation and countermeasures. “The Report of Risk Management Assessment and The Current Status of Risk Already Incurred” should be reported yearly on the board meeting. It refers to ESG sustainable evaluation – the aspects of strategic risk, operational risk, financial risk, legal compliance risk, cybersecurity risk, integrity risk, climate risk and other risks, as well as the climate-related risk analysis report of the 2023 TCFD climate-related financial disclosures https://www.zippy.com/zh-tw/esgTCFD.aspx, to ensure that the company’s risk management is carried out accordingto theplan.	No difference
3. Environmental Topics (1) Has the Company set an environmental management system designed to industry characteristics? (2) Is the company committed to improving energy efficiency and using recycled materials with low impact on the environment?	�		(1) Some factories have passed ISO14001:2015 environmental management system certification (certification acquisition date: 2012-04-19 validity period: 2023-10-13 to 2026-10-12 TUV NORD certificate No. 44 104 122111), to achieve pollution prevention, energy saving and carbon reduction, and environmental protection. At the same time, effective prevention and management of potential accidents and emergencies in the area are carried out, emergency preparedness measures are taken to prevent the occurrence of major accidents, to avoid and reduce environmental impacts. (2) Since 2022, we do annual statistical analysis of whole company’s current energy consumption and production trends, and require business divisions to incorporate GHG emmission reduction targets into the business plan to track for improvements. The materials and processes of the products produced by Zippy are both free of harmful substances,which meet the requirements of high recycling	No difference No difference

Item	Implementation Status	Implementation Status	Implementation Status	Non-implement -ation and its reason(s)
	Y	N	Summary
(3) Does the Company evaluate current and future climate change potential risks and opportunities and take measures related to climate related topics? (4) Does the Company collect data for greenhouse gas emissions, water usage and waste quantity in the past two years, and set energy conservation, greenhouse gas emissions reduction, water usage reduction and other waste management policies?			rate and renewable materials, in order to reduce pollution and damage to the environment. (3) Zippy has introduced Task Force on Climate-Related Financial Disclosures (TCFD) since 2022, identified climate risks and opportunities that have high impacts on the company's operations, to formulate management objectives and action plans. We also disclose the TCFD Report in the ESG section of our official website. (4) In response to the government's resource recycling policy, the Company has established a standby mode for process equipment to automatically shut down during breaks. The environment regularly commissions external certification agencies for testing, and commissions Class A waste disposal agencies to handle business waste in response to environmental protection policies and actually save energy and reduce carbon operation. The Company has passed the ISO14001 certification and disclosed electricity consumption, water consumption, hazardous industrial waste weight, and GHG emission in recent 3 years on the website since 2017. We set a 0.5% annual carbon emission reduction target. The above disclosures willbe verified by third partiesinaccordance with regulations.	No difference No difference
4. Social Topics (1) Does the Company set policies and procedures in compliance with regulations and internationally recognized human rights principles? (2) Has the Company established appropriatelymanaged employee	�		(1) In accordance with relevant regulations such as the Labor Standards Act, the Company formulates Employee Handbook to protect the rights and interests of employees and the company. At present, the international basic labor rights laws include the “GRI Standards” for corporate sustainability report and RBA (Responsible Business Alliance) Code of Conduct about labor health, safety and environmental standards. The Company announces the “ZIPPY Human Right and Employee Right Policy,” also stipulate in our sustainability report. Other related documents such as employee handbook and human resources procedures, reveal and implement the spirit in our internal processes as well. (2) The Company has established evaluation methods of bonus, rewards and punishment,which are calculated and distributed accordingto the company’s	No difference No difference

Item	Implementation Status	Implementation Status	Implementation Status	Non-implement -ation and its reason(s)
	Y	N	Summary
welfare measures (include salary and compensation, leave and others), and link operational performance or achievements with employee salary and compensation? (3) Does the Company provide employees with a safe and healthy working environment, with regular safety and health training? (4) Has the Company established effective career development training plans? (5) Does the company comply with relevant laws and international standards, and formulate relevant			profitability, and the year-end bonus is issued at the end of the year; if the employee has credit or deduction during the year, the bonus will be added or deducted when the year-end bonus is issued. If the Company has surplus in the year, it will also pay employee compensation. All kinds of employee welfare are disclosed in the sustainability report on the company's website. (3) In the work environment, air circulation, tin fume, emission filtration, noise protection, machine operation, and drinking water safety are all specially monitored to ensure employee safety. In 2022, the exhaust equipment in the n-hexane work area was replaced to provide employees with a more suitable work environment. Each plant conducts on-site disaster drills annually in accordance with the fire protection plan to prevent accidents from occurring, and requires everyone to know CPR. Annual routine health examinations are conducted, and the contracted hospital assists in analyzing abnormal health items, with professional medical personnel following up and caring for employees on a monthly basis. In 2023, there were 0 occupational accidents and 0 affected employees, accounting for 0% of the total number of employees. In 2023, there were 0 fire incidents and 0 affected employees, accounting for 0% of the total number of employees. (4) Career development training program: Each unit of the company submits training plans for the improvement of employee capabilities and functions every year, and the human resources unit promotes relevant courses and training. There is also a qualified lecturer training system, in addition to the training of teachers who can also be used as a reserve cadre in the future. (5) There is a customer area on our external official website to deal with the problems reported by customers. At the same time, the company has formulated the "Procedure for Product and Service Requirements" toprotect the rights and	No difference No difference No difference

Item	Implementation Status	Implementation Status	Implementation Status	Non-implement -ation and its reason(s)
	Y	N	Summary
consumer or customer rights protection policies and grievance procedures for issues such as customer health and safety, customer privacy, marketing and labelling of products and services? (6) Does the Company set supplier management policy and request suppliers to comply with related standards on the topics of environmental, occupational safety and health or labor right, and their implementation status?			interests of customers. Zippy’s products are made in accordance with customized specifications, also with QR code linking to the MES traceability in compliance with relevant regulations and international standards. Zippy follows up and updates the latest relevant laws and regulations on customer rights and interests, and formulates policies and countermeasures by a dedicated unit. We also implement key education and training to strengthen employees' legal concept of customer protection and privacy. (6) Before the company communicates with its suppliers, it evaluates important processing plants and upstream suppliers in accordance with ISO 14001 and quality system specifications to assess whether the suppliers have past environmental and social records. The content of the contract between the company and the main supplier, including the clause that the supplier may terminate or cancel the contract at any time if it violates its corporate social responsibility policy and has a significant impact on the environment and society.	No difference
5. Does the company adopt internationally widely recognized standards or guidelines when preparng ESG reports and so on, to disclose non-financial information? Is it advisable to obtain a third-party assurance or verification for reports to enhance the reliability of the information in the report?	�		The Company’s sustainability report was prepared with reference to the GRI Standards, SASB, TCFD and the operating regulations for the preparation and verification of the sustainability report. Although it has not been certified by a third-party verification unit, the overall operation still conforms to the spirit and norms of the sustainable development best practice principles.	No difference
6. If the company has its own sustainable development principles in accordance with the "Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies" and the operating regulations for the preparation and verification of the sustainability report., please describe the differences between its operation and the established code. Atpresent,the company's sustainabilityreport is compiled accordingto the framework of the "Sustainable Development Best Practice Principles for

Item	Implementation Status	Implementation Status	Implementation Status
	Y	N	Summary
TWSE/TPEx Listed Companies," and so are the Sustainable Development Best Practice Principles of Zippy formulated in 2022. Internal procedures and norms have been established.
7. Other important information helpful to understand the implementation of sustainable development: The company upholds social responsibility and abides by corporate ethics, not only to create more profits, but also to maintain balanced relationship with our employees, customers, suppliers, stakeholders and the community, so as to obtain support from all parties. (1) Environmental protection: The materials and processes of the products produced by our company are free of hazardous substances and processes, and meet the requirements of high recycle rate and hazardous free substances, in order to reduce environmental pollution and damage. Some factories have passed the ISO14001 environmental management system certification to achieve pollution prevention, energy saving and consumption reduction, comprehensive utilization, turning harm into profit, reducing costs, and avoiding and reducing environmental impacts. At the same time, in response to the government's resource recycling policy, battery recycling bins and resource recycling bins were installed in the office, and energy-saving and carbon-reduction programs were implemented such as using energy-saving lights and air conditioning with fixed temperature and time settings. (2) Community Participation, Social Contribution, Service and Public Welfare: According to the actual needs of the society, carry out activities to give back to the society, and respond to donation activities when disasters occur. (3) Consumer rights: Provide high-quality, in-demand and good-performance products; take appropriate measures to deal with customer complaints and provide complete and correct product information; honest and not exaggerated product advertisements, etc. (4) Human rights, safety and health and others: Since its establishment, the company has always been based on the principle of humanized management, giving employees full respect and care, and establishing good employee relations and benefits, so that employees have job satisfaction and provide equal employment There is no gender or racial discrimination when hiring employees; provide employees with a comfortable and safe working environment; protect employees’ basic human rights, such as work rules, pensions, medical care, accident insurance, etc.

3.4.6 Implementation of Climate-Related Information

Item	Implementation status
1. Describe the board of directors' and management's oversight and governance of climate-related risks and opportunities. 2. Describe how the identified climate risks and opportunities affect the business, strategy, and finances of the business (short, medium, and long term).	1. A greenhouse gas inventory progress report is submitted to the Board of Directors quarterly, including plans for talent training, strategic goals, control mechanisms, and external verification; as well as carbon inventory reports for individual companies and consolidated subsidiaries. 2. Climate risks and opportunities impact our short-term, medium-term, and long-term business, strategy, and financial objectives. I. Short-term goals Risk management is incorporated into the "Task Force on Climate-related Financial Disclosures (TCFD)" framework, through the identification of greenhouse gases to formulate corresponding measures to improve the ability to deal with climate risks. In order to ensure the sustainable development of the company, each production base has successively introduced automated production systems and digital processes management to reduce unnecessary waste, improve management and product quality and efficiency. Innovative research and development of high-efficiency and low-carbon products, combined with customers and suppliers to consider the use of renewable low-carbon raw materials, to ensure that the products 100% comply with relevant regulations on the non-use of harmful substances, and reduce the impact on the environment and energy in the production process. The production base implements environment, energy, greenhouse gas inventory, waste, etc. and has been certificated the ISO14001 environmental management system to effectively control the company's energy resource consumption and emissions. Using digital analysis of production data to optimize energy usage and improve overall operational performance and production efficiency. II. Short-Term Action Plan Incorporate climate change impact factors into the company's risk management policy, according to the four core elements of TCFD (1) Corporate Governance, (2) Strategy, (3) Risk Management, (4) Metrics and Targets: Understand the risks and opportunities of the company's transition to a low-carbon economy, and collect relevant climate laws and courses to help decision-making and provide financial impact information to achieve the company's sustainable development goals. Reduce unnecessarywaste in the company,and use new technologies orprocesses to effectively

Item

Implementation status

1. Describe the board of directors' and
management's oversight and
governance of climate-related risks
and opportunities.
2. Describe how the identified climate
risks and opportunities affect the
business, strategy, and finances of
the business (short, medium, and
long term).

1. A greenhouse gas inventory progress report is submitted to the Board of Directors quarterly, including plans
for talent training, strategic goals, control mechanisms, and external verification; as well as carbon
inventory reports for individual companies and consolidated subsidiaries.
2. Climate risks and opportunities impact our short-term, medium-term, and long-term business, strategy, and
financial objectives.
I. Short-term goals
Risk management is incorporated into the "Task Force on Climate-related Financial Disclosures
(TCFD)" framework, through the identification of greenhouse gases to formulate corresponding
measures to improve the ability to deal with climate risks. In order to ensure the sustainable development
of the company, each production base has successively introduced automated production systems and
digital processes management to reduce unnecessary waste, improve management and product quality
and efficiency.
Innovative research and development of high-efficiency and low-carbon products, combined with
customers and suppliers to consider the use of renewable low-carbon raw materials, to ensure that the
products 100% comply with relevant regulations on the non-use of harmful substances, and reduce the
impact on the environment and energy in the production process. The production base implements
environment, energy, greenhouse gas inventory, waste, etc. and has been certificated the ISO14001
environmental management system to effectively control the company's energy resource consumption
and emissions. Using digital analysis of production data to optimize energy usage and improve overall
operational performance and production efficiency.
II. Short-Term Action Plan
Incorporate climate change impact factors into the company's risk management policy, according to the
four core elements of TCFD (1) Corporate Governance, (2) Strategy, (3) Risk Management, (4) Metrics
and Targets: Understand the risks and opportunities of the company's transition to a low-carbon
economy, and collect relevant climate laws and courses to help decision-making and provide financial
impact information to achieve the company's sustainable development goals.
Reduce unnecessarywaste in the company,and use new technologies orprocesses to effectively

Item		Implementation status
3. Describe the financial impact of extreme weather events and transformative actions.	improve work efficiency and productivity. Through innovative design, we provide power supply products with low loss, small size, and light weight, which are in line with the development trend of end products, light and thin, and energy saving and environmental protection. Introduce green manufacturing processes to use hazardous substances free green materials and increase the proportion of recycled materials, and cooperate with value chain partners to provide high-quality green products. Production bases and subsidiaries check out the hotspots of greenhouse gas emissions according to ISO 14064 greenhouse gas emissions, and carry out corresponding carbon reduction measures. III. Medium- and Long-Term Goals and Action Plans Continue to carry out "TCFD Climate-Related Financial Disclosure" and respond to the "SBTi Science-Based Reduction Target Initiative", with the goal of controlling temperature rise at 2.0°C as the basis for setting the carbon reduction schedule, and formulating the Group's Science-Based Carbon Target (SBT), Formulate relevant carbon reduction pathways and strategies, and regularly track and revise results. At the same time, it is in line with the goal of net-zero transformation of the "Taiwan 2050 Net-Zero Emissions Pathway". Promote sustainable supply chain plans, consider green procurement, require suppliers to meet low-carbon, easy-to-recycle, and non-toxic standards, and cooperate with suppliers to carry out greenhouse gas emission reduction plans to leverage the power of the entire value chain and jointly develop low-carbon Circular Economy. 3. The Impact of Extreme Climate Events and Transition Actions on Finance Zippy began to introduce pilot projects in 2022 to analyze the possible impact of climate change on operating costs and revenues, capital expenditures and distribution, to understand the possible financial impacts of various events on the company, and to develop coping strategies, and in 2022 Simulate scenarios within 2°C of global warming, estimate the carbon reduction responsibilities that Zippy needs to undertake and promote energy-saving solutions. Zippy conducts a survey every year and re-examines the results every year to confirm the rationality and ensure that the identified results are in line with the current situation. Based on short-term, medium-term, and long-term timelines, Zippy screens out high-risk projects and corresponds to opportunity projects by means of possibility and impact.

Item	Implementation status
4. Describe how climate risk identification, assessment, and management processes are integrated into the overall risk management system.	4. The comprehensive risk score ranks projects with high climate risk concerns, and manages them from the two aspects of "mitigation" and "adaptation". I. Mitigation: Actively promote energy conservation and improve energy use efficiency to reduce Zippy's dependence on energy. II. Adaptation: establish a business sustainability plan for climate-related physical risks, and at the same time start to analyze and grasp the impact of climate change to respond to research and development strategies, provide customers with integrated solutions, and assist customers in adapting to climate change. Climate Risk and Opportunity Matrix Analysis Chart R1 Customer Behavior Change Opp1 R&D and Innovation of New Products and Services R2 International Norms and Initiatives Opp2 Use of More Efficient Production Processes R3 Mandatory regulations for products and services Opp3 Develop or expand low-carbon products R4 Products and services are replaced by low-carbon technologies Opp4 Recycling R5 Increase severity of extreme weather events Opp5 Reduce water use R6 Airpollution emission limit Opp6 Participate in carbon tradingmarket R1 R2 R3 R4 R5 R6/R7 R8 R9/R10 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5 Degree of Impact Possibility of Impact Accesment of Climate Risk Opp1 Opp2 Opp3 Opp4 Opp5 Opp6 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5 Degree of Opportunity Possibility of Opportunity Accesmeny of Climate Opportunity

Item

Implementation status

4. Describe how climate risk
identification, assessment, and
management processes are
integrated into the overall risk
management system.

4. The comprehensive risk score ranks projects with high climate risk concerns, and manages them from the
two aspects of "mitigation" and "adaptation".
I.
Mitigation: Actively promote energy conservation and improve energy use efficiency to reduce Zippy's
dependence on energy.
II. Adaptation: establish a business sustainability plan for climate-related physical risks, and at the same
time start to analyze and grasp the impact of climate change to respond to research and development
strategies, provide customers with integrated solutions, and assist customers in adapting to climate
change.
Climate Risk and Opportunity Matrix Analysis Chart
R1
Customer Behavior Change
Opp1
R&D and Innovation of New Products and Services
R2
International Norms and Initiatives
Opp2
Use of More Efficient Production Processes
R3
Mandatory regulations for products and services
Opp3
Develop or expand low-carbon products
R4
Products and services are replaced by low-carbon technologies
Opp4
Recycling
R5
Increase severity of extreme weather events
Opp5
Reduce water use
R6
Airpollution emission limit
Opp6
Participate in carbon tradingmarket
R1
R2
R3
R4
R5
R6/R7
R8
R9/R10
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
5.5
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
5.5
Degree of Impact
Possibility of Impact
Accesment of Climate Risk
Opp1
Opp2
Opp3
Opp4
Opp5
Opp6
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
5.5
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
5.5
Degree of Opportunity
Possibility of Opportunity
Accesmeny of Climate Opportunity

Item	Implementation status	Implementation status	Implementation status
5. If scenario analysis is used to assess resilience to climate change risks, the scenarios, parameters, assumptions, analysis factors and major financial impacts used should be described.	R7 Fuel/energy tariff related laws and regulations R8 General environmental laws and regulations (including regulations under planning) R9 raw material cost increase R10 Transfer of consumer/customer preferences R11 average temperature increase 5. The time range of Zippy’s reference is the scenario from 2030 to 2050. In the scenario analysis, all factories and subsidiaries’ bases are included to analyze the physical risks such as temperature under different conditions, climate change and rainfall, and calculate the energy consumption under different scenarios, usage, water scarcity or flooding of the plant area. Business As Usual，BAU, Scenarios Nationally Determined Reduction Scenarios Actively Mitigate the Situation Scenario Description RCP8.5 RCP4.5 20% of 2005 emissions by 2030. RCP6.0 Reduce emissions to 50% of 2005 levels by2050. RCP2.6 Long-term goal of carbon neutrality by 2050 Analysis Results If the average temperature rise exceeds 2.0 degrees C, the annual rainfall in Taiwan in 2050 may decrease by 56.6mm compared with 1985-2005 With the average temperature rise limited to 2.0 degrees C, the annual rainfall in Taiwan in 2050 may decrease by 49.8 mm compared to 1985-2005 The average temperature rise is limited to 1.5 degrees C, and the annual rainfall in Taiwan in 2050 may be 47.6mm lower than that in 1985-2005 Risk 1. The global average temperature rise will increase the energy consumption of air conditioners and reduce the efficiency of compressors. 2. In the case of water shortage or flood impact caused by abnormal weather conditions, if the water cleaning process cannot be carried out under the condition of water restriction, production will be reduced to cope with it. When severe water shortage occurs, part of the production process will be shut down. 3. If the power supply is unstable or Taipower cuts power supply in different areas, if it cannot be reduced, it may lead to relying on diesel generators to generate electricity by itself in the future, increasing production costs and operatingrisks,and relativelyreducingcompetitiveness.
		Business As Usual，BAU, Scenarios	Nationally Determined Reduction Scenarios
	Scenario Description	RCP8.5	RCP4.5 20% of 2005 emissions by 2030. RCP6.0 Reduce emissions to 50% of 2005 levels by2050.
	Analysis Results	If the average temperature rise exceeds 2.0 degrees C, the annual rainfall in Taiwan in 2050 may decrease by 56.6mm compared with 1985-2005	With the average temperature rise limited to 2.0 degrees C, the annual rainfall in Taiwan in 2050 may decrease by 49.8 mm compared to 1985-2005
	Risk

Item

Implementation status

6. If there is a transition plan for
managing climate-related risks,
describe the content of the plan,
and the indicators and targets used
to identify and manage physical
risks and transition risks.
7. If internal carbon pricing is used as
a planning tool, the basis for setting
the price should be stated.
8. If climate-related targets have been
set, the activities covered, the
scope of greenhouse gas emissions,
the planning horizon, and the
progress achieved each year should
be specified. If carbon credits or
renewable energy certificates
(RECs) are used to achieve
relevant targets, the source and
quantity of carbon credits or RECs
to be offset should be specified.

Action plan
1. The company set up water resource management strategies at the initial stage of establishment, including:
various water saving plans, feasibility analysis of filtration and reuse, and improvement plans mainly for
the recycling and reuse of cleaning water used in the process to reduce waste.
2. Planning low-carbon energy technology transformation such as: low-temperature thermoelectric system
and waste heat recovery technology.
3. Mitigate the impact of risks through strategies such as improving product design energy efficiency,
avoiding the impact of transformation risks on productivity and market demand, resulting in impacts on
assets and revenue, and improving the ability to deal with risks and corporate resilience.
6. None
7. None
8. Indicators and Targets
ZIPPY conducts greenhouse gas reduction management through the scope 1 and 2 reduction targets of the
SBT, and promotes management performance of climate issue by referring to the GRI Standards, SASB and
TCFD-related indicators, including energy resource usage as well as management indicators for measuring
the degree of climate risk impact.
The indicators used by ZIPPY to assess climate-related risks include the degree of achievement of
science-based emission reduction targets (SBTs) and the carbon emission intensity of business units.
According to the "Sustainable Development Roadmap for Listed/OTC Companies" released by the
Financial Supervisory Commission in March 2022, our company, being a listed/OTC company with paid-in
capital of less than NT$5 billion, is subject to the following greenhouse gas inventory schedule, with
quarterlyreportingto the BOD:

Item

Implementation status

Item	Expected Completion Time
Formulation of talent training, strategy objectives, control mechanisms, internal verification and external verificationplanning	August 2023
Individual company (parent company) completion of inventory	August 2026
Consolidated subsidiary completion of inventory	February 2027
Individual company (parent company) completion of external verification	August 2028
Consolidated subsidiary completion of external verification	August 2029

In February 2023, the initial greenhouse gas emission inventory for 2022 was completed, and analysis revealed that electricity consumption accounted for 93% of the largest carbon emission source. The heads of each business unit are studying the inclusion of carbon emission reduction targets in the 2023 annual operation plan, starting with the promotion of energy-saving LED lighting upgrades for gradual carbon reduction.

In compliance with the Corporate Governance Evaluation Indicator 4.18, the company's ESG section on its official website uploaded the TCFD "Climate-Related Financial Disclosure Report" in Q1 2023, disclosing ZIPPY's governance, strategy, risk management, indicators and targets related to climate-related risks and opportunities, incorporating climate change issues into sustainable operation considerations. In Q2 2023, the 2022 greenhouse gas emissions and reduction information was reported on the Public Information Observation Station. The greenhouse gas inventory task force personnel from various units, the property management department, and the planning department actively participated in net-zero carbon-related forums, continuously updating carbon reduction information for internal sharing. Arrangements will also be made to enroll in the Ministry of Economic Affairs' Industrial Development Bureau's Low-Carbon Net-Zero Training Program to cultivate industry net-zero seed personnel.

==> picture [523 x 91] intentionally omitted <==

Item		Implementation status	Implementation status
9. Greenhouse gas inventory and assurance status and reduction targets, strategy, and concrete action plan (separately fill out in points 1-1 and 1-2 below)	9.	1-1 Greenhouse Gas Inventory and Assurance Status for the Most Recent 2 Fiscal Years 1-1-1 Greenhouse Gas Inventory Information Greenhouse Gas Inventory InformationDescribe the emission volume (metric tons CO2e), intensity (metric tons CO2e/NT$ million), and data coverage of greenhouse gases in the recent 2 fiscal years. � ZIPPY conducts an inventory of direct emissions (Scope 1) and indirect emissions (Scope 2) of greenhouse gases in accordance with the Greenhouse Gas Protocol. � The company uses indicators to assess climate-related risks and opportunities under its strategy and risk management processes. � Carbon reduction target: Reduce greenhouse gas emission intensity by 0.5% annually Emission Source Unit 2022 2023 Increase/Decrease Compared to Previous Year(%) Direct emissions (Scope 1) tCO2e 183 156 -15% Indirect emissions (Scope 2) tCO2e 4,881 4,151 -15% Total tCO2e 5,064 4,307 -15% Million revenue 2,642 2,126 -20% Greenhouse gas emission intensity (Scope 1 & 2) tCO2e / Million revenue 1.92 2.03 6% Notes: 1. Data scope: Greenhouse gas inventory forms provided by ZIPPY Technology Corp., G-BRIM international Inc., ZIPPY (Dongguan) Electronics Co.,LTD., ZIPPY (Suzhou) Electronics Co.,LTD., ZIPPY USA INC., ZIPPY TECHNOLOGY EURPOE GmbH, andQuan-Fa Co., Ltd. 2. Calculation basis: Bureau of Energy's Greenhouse Gas Emission Coefficient Management Table version 6.0.4, Carbon Footprint Calculator 3. ZIPPY did not use renewable energy
		Greenhouse Gas Inventory InformationDescribe the emission volume (metric tons CO2e), intensity (metric tons CO2e/NT$ million), and data coverage of greenhouse gases in the recent 2 fiscal years.
		� � �	ZIPPY conducts an inventory of direct emissions (Scope 1) and indirect emissions (Scope 2) of greenhouse gases in accordance with the Greenhouse Gas Protocol. The company uses indicators to assess climate-related risks and opportunities under its strategy and risk management processes. Carbon reduction target: Reduce greenhouse gas emission intensity by 0.5% annually Emission Source Unit 2022 2023 Increase/Decrease Compared to Previous Year(%) Direct emissions (Scope 1) tCO2e 183 156 -15% Indirect emissions (Scope 2) tCO2e 4,881 4,151 -15% Total tCO2e 5,064 4,307 -15% Million revenue 2,642 2,126 -20% Greenhouse gas emission intensity (Scope 1 & 2) tCO2e / Million revenue 1.92 2.03 6% Notes: 1. Data scope: Greenhouse gas inventory forms provided by ZIPPY Technology Corp., G-BRIM international Inc., ZIPPY (Dongguan) Electronics Co.,LTD., ZIPPY (Suzhou) Electronics Co.,LTD., ZIPPY USA INC., ZIPPY TECHNOLOGY EURPOE GmbH, andQuan-Fa Co., Ltd. 2. Calculation basis: Bureau of Energy's Greenhouse Gas Emission Coefficient Management Table version 6.0.4, Carbon Footprint Calculator 3. ZIPPY did not use renewable energy

Item

Implementation status

1-1-2 Greenhouse Gas Assurance Information
Describe the status of assurance for the most recent 2 fiscal years as of the printing date of the annual
report, including the scope of assurance, assurance institutions, assurance standards, and assurance
opinion.
None
1-2Greenhouse Gas Reduction Targets, Strategy, and Concrete Action Plan
Specify the greenhouse gas reduction base year and its data, the reduction targets, strategy and
concrete actionplan,and the status of achievement of the reduction targets.
�
Our company, being a listed/OTC company with paid-in capital of less than NT$5 billion, is
subject to the following greenhouse gas inventory schedule:
Individual company (parent company) completion of inventory: August 2026
Consolidated subsidiary completion of inventory: February 2027
Individual company (parent company) completion of external verification: August 2028
Consolidated subsidiary completion of external verification: August 2029
�
Carbon reduction target:
Reduce greenhouse gas emission intensity by 0.5% annually
�
Strategy:
Please refer to (6) Implementation of Climate-related Information: 2. Strategy Description
�
Carbon reduction target:
Reduce greenhouse gas emission intensity by 0.5% annually
�
Specific action plans:
Starting this year, the group is implementing a collaborative energy-saving policy, strictly
controlling air conditioning temperatures and reducing operating hours, and turning off lights in
designated areas during breaks. The Taiwan headquarters set up an LED lighting upgrade in
March-April. At the factory, energy-efficient air conditioners were replaced at the beginning of
the year, bathroom lighting was changed to motion-sensing LEDs, and 30 idle light fixtures were
removed to save energy. The China factory does not operate on Sundays, and all power is shut

Item				Implementation status
		�

3.4.7 Ethical Corporate Management implementation status and deviation from the “Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies”:

TWSE/GTSM Listed Companies”:
Items	Implementation Status			Non-implementation and its reason(s)
	Y	N	Summary
1. Establishment of Corporate Conduct and Ethics Policy and Implementation Measures. (1) Does the company have a clear ethical corporate management policy approved by its Board of Directors, and bylaws and publicly available documents addressing its corporate conduct and ethics policy and measures, and commitment regarding implementation of such policy from the Board of Directors and the top management team? (2) Whether the company has established an assessment mechanism for the risk of unethical conduct; regularly analyzes and evaluates within a business context, the business activities with a higher risk of unethical conduct; has formulated a program to prevent unethical conduct with a scope no less than the activities prescribed in paragraph 2, Article 7 of the Ethical Corporate Management Best Practice Principles for TWSE/ GTSM Listed Companies?	�		(1) The "Ethical Corporate Management Best Practice Principles" has been formulated to obtain the consensus of the senior management, approved by the board of directors, and the directors are required to sign the "Ethical Management Statement". (2) Evaluation mechanism:In order to improve the management of integrity management, the company designates the Planning Department as a dedicated unit to be responsible for the formulation and supervision of the integrity management policy and prevention plan, mainly responsible for the following matters, and report yearly to the board of directors: a. Assist in integrating integrity and ethical values into the company's business strategy, and cooperate with laws and regulations to establish relevant anti-fraud measures to ensure integrity in business. b. Regularly analyze and evaluate the high risk of dishonesty in the business area, especially those involving bribery and receiving bribery, providing or accepting unreasonable gifts, entertainment or other improper benefits as the focus of control. Based on this, we will formulate plans to prevent dishonest behavior, and formulate standard operating procedures and behaviorguidelines related to work and business within each	No difference No difference

Items				Implementation Status	Non-implementation and its reason(s)
	Y	N		Summary
(3) Whether the company has established relevant policies that are duly enforced to prevent unethical conduct, provided implementation procedures, guidelines, consequences of violation and complaint procedures, and periodically reviews and revises such policies?			(3)	plan. c. Plan the reporting system to ensure the effectiveness of implementation. d. Assist the board of directors and management to check and evaluate whether the preventive measures established in the implementation of integrity management are operating effectively, and regularly evaluate the compliance with relevant business processes and report “The Ethical Corporate Management Practice”annually_._ Relevant policies are stated in the " Regulation of Incentive for Informing of Unethical or Unseemly Conduct ", “Employee Handbook”, and "Ethical Corporate Management Best Practice Principles", and education training is implemented on employees' integrity behavior, conflicts of interest, intellectual rights and patent rights protection, trade secrets, etc. These policies are reviewed and revised through regular internal audits.	No difference
2. Ethic Management Practice (1) Does the company assess the integrity records of its counterparties and specify the integrity behavior clauses in the contracts it signs with its counterparties?	�		(1)	The company requires suppliers/partners to have a letter of integrity commitment, and strictly requires employees to comply with the regulations. Our webpage (http://www.zippy.com/zh-TW/CSRArea.aspx) reveals:Concerned issues: a. Hazardous substance management b. Quality standards c. Integrity commitments. Communication method and frequency: a. Suppliers' assessment reports of no hazardous substances	No difference

Items	Implementation Status	Implementation Status	Implementation Status	Non-implementation and its reason(s)
	Y	N	Summary
(2) Whether the company has set up a dedicated unit to promote the company’s ethical standards and reports at least once a year directly to the Board of Directors on its ethical corporate management policy and relevant matters, and program to prevent unethical conduct and monitor its implementation? (3) Whether the company has established policies to prevent conflict of interests provide appropriate communication and complaint channels and implement such policies properly? (4) To implement relevant policies on ethical conducts, has the company established effective accounting and internal control systems, audit plans based on the assessment of unethical conduct, and have its ethical conduct program audited by internal auditors or CPA periodically? (5) Does the company provide internal and external ethical conduct training programs on a regular basis?			b. Letter of integrity commitment c. Approval sheet (2) The Planning Department is the dedicated unit, and its operating procedures and behavior guidelines have been formulated such as ” Ethical Corporate Management Best Practice Principles,” “Guidelines for the Adoption of Codes of Ethical Conduct Companies” and “Procedures for Preventing Insider Trading.“ “The Ethical Corporate Management Practice of 2023” has been reviewed at Mar.6, 2024 and also been published in the official website. (3) At present, employee communication can respond to conflicts of interest incidents through the internal system "Cooperation Platform" or “Irregular Business Conduct Reporting” on our official website. (4) The Company has established written accounting system, internal control system and internal audit implementation rules to implement the principle of integrity operation. (5) In addition to the new employees training, internal and external training on integrity management is also included in the annual training plan. In 2022, there were 6 people attending courses for” Corporate Fraud Detection and Prevention Practice: Legal Responsibility, Forensics and Big Data Analysis” and “ Prohibition of Insider Trading,” totaling 12 hours. In 2023, 54 new employees participated in integrity management

Items	Implementation Status	Implementation Status	Implementation Status	Non-implementation and its reason(s)
	Y	N	Summary
			education and training courses for 54 hours; 23 employees participated in internal training for 23 hours; 14 employees participated in external training for 45 hours.
3. Implementation of Complaint Procedures (1) Does the company establish specific complaint and reward procedures, set up conveniently accessible complaint channels, and designate responsible individuals to handle the complaint received? (2) Whether the company has established standard operation procedures for investigating the complaints received, follow-up measures after investigation are completed, and ensuring such complaints are handled in a confidential manner? (3) Does the company adopt proper measures to prevent a complainant from retaliation for his/her filing a complaint?	�		(1) The “Ethical Corporate Management Best Practice Principles,” “Regulation of Incentive for Informing of Unethical or Unseemly Conduct” has been formulated, to build reporting channels and related disciplinary and appeal systems, and the " Irregular Business Conduct Reporting" has been available on our website. (2) Following (1), standard operating procedures, follow-up measures for investigation completion, and confidentiality mechanisms have been established. (3) Following (1), the company promises to protect whistleblowers from retaliation due to reporting.	No difference
4. Information Disclosure Does the company disclose its guidelines on business ethics as well as information about implementation of such guidelines on its website and Market Observation Post System (MOPS)?	�		We have disclosed the Ethical Corporate Management Best Practice Principles of Zippy on the official website and the MOPS. The annual report of “Ethical Corporate Management Practice” is approved by the board of directors and then published on the official website every year.	No difference

Items	Implementation Status	Implementation Status	Implementation Status
	Y	N	Summary
5. If the company has established corporate governance policies based on Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies, please describe any discrepancy between the policies and their implementation. At present, the “Ethical Corporate Management Best Practice Principles” has been established and approved by the board of directors. At the same time, the internal implementation is basically consistent with the norms in the code.
6. Other important information to facilitate better understanding of the company’s corporate conduct and ethics compliance practices (e.g., review the company’s corporate conduct and ethics policy). The “Ethical Corporate Management Best Practice Principles” refers to the latest "Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies" and was revised by the Board of Directors on August 14, 2019. The directors also jointly signed the "Ethical Management Statement". In addition, the company requires the manufacturer to sign a letter of commitment to integrity, and the purchase contract signed with the manufacturer also proves the determination of related integrity management. Supplier meetings are held from time to time to announce the company’s integrity management principle.

If the company has established corporate governance policies based on Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies, please describe any discrepancy between the policies and their implementation.

At present, the “Ethical Corporate Management Best Practice Principles” has been established and approved by the board of directors. At the same time, the internal implementation is basically consistent with the norms in the code.

Other important information to facilitate better understanding of the company’s corporate conduct and ethics compliance practices (e.g., review the company’s corporate conduct and ethics policy).

The “Ethical Corporate Management Best Practice Principles” refers to the latest "Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies" and was revised by the Board of Directors on August 14, 2019. The directors also jointly signed the "Ethical Management Statement". In addition, the company requires the manufacturer to sign a letter of commitment to integrity, and the purchase contract signed with the manufacturer also proves the determination of related integrity management. Supplier meetings are held from time to time to announce the company’s integrity management principle.

3.4.8 If a company has formulated a corporate governance code and related regulations, it should disclose its inquiry method: “Corporate Governance” under “Shareholder Services” on the company webpage can be used to inquire about important company internal regulations related to corporate governance.
3.4.9 Other important information that is sufficient to enhance the understanding of corporate governance and operation conditions must be disclosed together: None.
3.4.10 Implementation status of internal control system:
Internal control statement: (detailed on page 231 of Appendix 4)
Those who entrust an accountant to review the internal control system: None.
3.4.11 The company and its internal personnel have been punished in accordance with the law in the most recent year and as of the date of publication of the annual report, the company's penalties for its internal personnel for violating the provisions of the internal control system, major deficiencies and improvements: No such situation.
3.4.12 Important resolutions of the shareholders meeting and the board of directors in the most recent year and as of the printing date of the annual report.
1.Major resolutions of shareholders’ meeting

Meetingdate	Abstract of importantproposals	Execution situation
2023.05.30	1. Ratification of the 2022 business report and financial statements.	Approved by 90,465,964 voting rights (among which, 5,437,936 voting rights were exercised electronically), accounting for 98.06% of the total voting rights. The approved voting rights exceed the statutory amount, and this proposal ispassed.
	2. Adoption of the proposal for distribution of 2022 profits.	Approved by 90,542,971 voting rights (among which, 5,514,943 voting rights were exercised electronically), accounting for 98.15％of the total voting rights. The approved voting rights exceed the statutory amount, and this proposal is passed. NT$ 3.50 cash dividend is alloted per share. Ex-dividend base date: August 12, 2023. Date of cash dividend distribution: September 5, 2023.

2.Major resolutions of board meetings

Meetingdate

Important resolution matters

2023.01.12

1. Passed the managers’ 2022 bonus proposal.
2. Passed to the managers’ 2023 remuneration proposal.
3. Passed the 2023 business plan.
4. Passed the2023 annualaudit planchange proposal.

2023.03.14

1. Passed internal control statement that was effective in design and implementation
in 2022.
2. Passed 2022 business report and financial statement proposal.
3. Passed 2022 surplus distribution proposal.
4. Passed the 2022 employees' compensation and distribution of directors and
supervisors' compensation
5. Passed to agree upon relevant matters of the 2023 general meeting of the Company.
6. Passed the amendment to the Company's "Internal Control Self-Assessment
Measures".

Meetingdate	Important resolution matters
	7. Passed the domestic andforeignbankcreditline.
2023.05.09	1. Passed the 2023 Q1 consolidated financial statement of the Company. 2. Passed the amendment to the Company's " Internal Control Self-Assessment Measures ". 3. Passed the amendment to the Company's " Regulation of approval authority ". 4. Passed the domestic and foreign bank credit line.. 5. Passed the appointment ofCorporategovernance officer.
2023.07.20	1. Passed to change the principal financial officer/principal accounting officer. 2. Passed the ex-dividend base date of cash dividend and the book closure date of shares.
2023.08.10	1. Passed the 2023 Q2 consolidated financial statement of the Company. 2. Passed the amendment of the Company's "Subsidiary Internal Control System" proposal. 3. Passed the domestic and foreign bank credit line.
2023.11.08	1. Passed the 2024 annual audit plan. 2. Passed the audit fees, professionalism and independence assessment of the CPAs. 3. Passed the 2023 Q3 consolidated financial statement of the Company. 4. Passed the case of the Company's endorsement guarantee for its subsidiaries. 5. Passed the domestic and foreign bank credit line.
2024.01.24	1. Passed the professionalism and independence assessment of the CPAs in 2024. 2. Passed the managers’ 2023 bonus proposal. 3. Passed to the managers’ 2024 remuneration proposal. 4. Passed the 2024 business plan. 5. Passed the amendment to the Company's " Regulations on the Property Management " 6. Passed the amendment to the Company's " Investment cycle operating procedures regulations " 7. Passed to make the Company's " Operational Requirements for the Preparation and Verification of Sustainability Reports" 8. Passed the amendment to the Company's " Financial and Non-Financial Information Management Regulations " 9. Passed the amendment to the Company's " Remueration Committee Charter " 10. Passed the amendment to the Company's " Management of the prevention of insider trading " 11. Passed the amendment to the Company's " Related party transaction management regulations " 12. Passed the amendment to the Company's " Liability commitments and contingencies management regulations "
2024.03.06	1. Passed internal control statement that was effective in design and implementation in 2023. 2. Passed 2023 business report and financial statement proposal. 3. Passed 2023 surplus distribution proposal. 4. Passed the 2023 employees' compensation and distribution of directors and supervisors' compensation 5. Passed to agree upon relevant matters of the 2024 general meeting of the Company. 6. Passed the domestic and foreign bank credit line. 7. Passed the amendment to the Company's " Remuneration and Assessment Methods for Directors and Managers"

3.4.13 Statement of dissenting opinions of directors and supervisors: No directors or supervisors have different opinions on important resolutions passed by the board of directors in the most recent year and as of the publication date of the annual report.
3.4.14 A summary of the resignation and dismissal of the company’s chairman, general manager, accounting supervisor, financial supervisor, internal audit supervisor and R&D supervisor in the most recent year and as of the printing date of the annual report:

				2024.04.30 Reasons of Resignation or Dismissal Personal career planning Resignation
Title	Name	Date of Appointment	Date of Termination	Reasons of Resignation or Dismissal
Finance and Accounting Officer	CHENG, PO-JUI	2019.08.01	2023.07.20	Personal career planning
Finance and Accounting Officer	YANG, CHU-TING	2023.07.20	2024.04.01	Resignation

3.5 Information regarding the company’s audit fee and independence
3.5.1 Range of CPAs’ fee

CPA Firm	CPA	Auditing Period	Auditing Fees	Non- Auditing Fees	Total	Remark
KPMG	GUO, ROU-LAN	2023/1/1~2023/12/31	3,787	160	3,947	Non-auditing fee is transfer pricing.
KPMG	CHEN, YING-RU	2023/1/1~2023/12/31

3.5.2 If the CPA firm changes and the audit fee paid in the year of such change is reduced form the audit fee of the previous year, the amounts of the audit fees before and after shuch change and the reason of such chage should be disclosed: None.
3.5.3 If the audit fee is reduced by more than 10% from the previous year, the amount, ratio, and reason for the reduction of the audit fee should be disclosed: None.
3.6 Information regarding the replacement of CPA: None.
3.7 If the chairman, president, and financial or accounting manager of the Company who had worked for the independent auditor or the related party in the most recent year, the name, title, and the term with the independent auditor or the related party must be disclosed: None.

3.8 Changes in shareholding of directors, supervisors, managers and major shareholders who own 10% or more:

Changes in shareholding of directors, supervisors, managers and major shareholders

Unit: Thousand shares

				Unit: Thousand shares	Unit: Thousand shares
Title	Name	2023		2024/1/1~2024/3/23
		Holding Increase (Decrease)	Pledged Holding Increase (Decrease)	Holding Increase (Decrease)	Pledged Holding Increase (Decrease)
Chairman	CHOU, CHIN-WEN	-	-	-	-
Director	KAO, MING-CHUAN	-	-	-	-
Director	TSAI, CHIN-SHAN	-	-	-	-
Director	CHUNG, YEN-YEN	-	-	-	-
Independent Director	CHOU, CHAI-FA	-	-	-	-
Independent Director	CHEN, HUANG-HUNG	-	-	-	-
Independent Director	LIU, HSUEH-LI	-	-	-	-
Deputy General Manager	LIN, CHING-HSIN	-	-	-	-
Deputy General Manager	HUANG, YUNG-HSIN	-	-	-	-
Senior Manager	CHANG, YU-YUAN	-	-	-	-
Senior Manager	WANG, CHIU-FU	-	-	-	-
Senior Manager	CHENG, CHIU-YI	-	-	-	-

＊The company has no shareholder holding more than ten percent of the total stock.

＊The counterparty of the equity transfer or equity pledge is not a related party.

3.9 Information on the relationship of the top 10 shareholders as related parties, spouses, or blood relatives within two degrees:

2024.03.23 Unit: share

2024.03.23							Unit: share	Unit: share
Name	Shareholding		Spouse and Minor		Shareholding by Nominee Arrangement		The Relationship
	Shares	%	Shares	%	Shares	%	Name	Relations
CHUNG, YEN-YEN	10,337,267	6.77%	2,468,067	1.62%	-	-	HSU, LING-YU	Husband and wife
							CHUNG, MENG-TING	Father and child
CHOU, CHIN-WEN	9,918,432	6.50%	3,527,943	2.31%	-	-	SUN, AN-LI	Husband and wife
KAO, MING-CHUAN	7,825,423	5.13%	1,296,946	0.85%	-	-	WANG, SU-CHING	Husband and wife
TSAI, CHIN-SHAN	6,575,752	4.31%	1,832,074	1.20%	-	-	CHIANG, MEI-LI	Husband and wife
SUN, AN-LI	3,527,943	2.31%	9,918,432	6.50%	-	-	CHOU, CHIN-WEN	Husband and wife
KAO, MING-CHUAN trust property account entrusted by Esun Commercial Bank	3,300,000	2.16%	-	-	-	-	-	-
TSAI, CHIN-SHAN rust property account entrusted by Esun Commercial Bank	3,000,000	1.97%	-	-	-	-	-	-
HSU, LING-YU	2,468,067	1.62%	10,337,267	6.77%	-	-	CHUNG, YEN-YEN	Husband and wife
							CHUNG, MENG-TING	Mother and child
CHUNG, MENG-TING	2,386,859	1.56%	-	-	-	-	CHUNG, YEN-YEN	Father and child
							HSU, LING-YU	Mother and child
CHIANG, MEI-LI trust property account entrusted by Esun Commercial Bank	2,100,000	1.38%	-	-	-	-	-

Note1: The date of formulating data is the book closure date of shares.

3.10 Ownership of shares in affiliated enterprises

2024.03.23 Unit: shares; %

2024.03.23					Unit: shares; %	Unit: shares; %
Long-Term Investment (Note1)	Ownership by Zippy		Direct/Indirect Ownership by Directors and Management		Total
	Shares	%	Shares	%	Shares	%
Zippy USA , Inc	300,000	100%	-	-	300,000	100%
Zippy International Holdings Limited	10,234,246	100%	-	-	10,234,246	100%
QUAN-FA CORPORATION COMPANY	4,492,854	63.92%	-	-	4,492,854	63.92%
Landmark International Holding LTD	4,425,000	100%	-	-	4,425,000	100%
Zippy Technology Europe GmbH	-	100%	-	-	-	100%
Zippy (Dongguan) Electronics Co., Ltd.	-	100%	-	-	-	100%
Zippy (Suzhou) Electronics Co., Ltd.	-	100%	-	-	-	100%
KOBOT INTERNATIONAL INC.	-	100%	-	-	-	100%
G-BRIM International Inc.	-	100%	-	-	-	100%

Note 1: It is the investment of company by adopting the Equity Method.

Note 2: The date of formulating data is the book closure date of shares.

IV. Capital overview

4.1 Capital and shares

4.1.1 Capital and shares:

							Unit:Share;2024.03.31	Unit:Share;2024.03.31
Month / Year	Par Value (NT)	Authorized Capital		Paid-in Capital			Remark
		Shares	Amount	Shares	Amount	Sources of Capital	Capital Increased by Assets Other than Cash	Other
before 2012	10	200,000,000	2,000,000,000	152,648,688	1,526,486,880	-	-	-

	Unit: Share;2024.03.31	Unit: Share;2024.03.31	Unit: Share;2024.03.31	Unit: Share;2024.03.31	Unit: Share;2024.03.31	Unit: Share;2024.03.31
Shares category	Authorized Capital					Remark
	Issued shares (listed)			Unissued shares	Total
	Issued shares (Listed)	Non-issued	Total
Registered Common Shares	152,648,688	-	152,648,688	47,351,312	200,000,000	-

Information for shelf registration: None.

1.1.2 Composition of Shareholders

	2024.03.23	2024.03.23	2024.03.23	2024.03.23	2024.03.23	2024.03.23
Composition Number	Government Agencies	Financial Institutions	Other Juridical Person	Domestic Natural Persons	Foreign Institutions & Natural Persons	Total
Number of Shareholders	4	10	208	32,719	107	33,048
Shareholding (shares)	630,170	2,837,816	14,731,100	125,724,632	8,724,970	152,648,688
Percentage	0.41%	1.86%	9.65%	82.36%	5.72%	100%

＊China company holding ratio: None.

4.1.3 Shareholding distribution status

2024.03.23

			2024.03.23
Class of Shareholding	Number of	Shareholding
			Percentage
(Unit : Share)	Shareholders	(Shares)


1 ~ 999	20,931	749,067	0.49%


1,000 ~ 5,000	9,291	19,840,186	13.00%


5,001 ~ 10,000	1,493	11,635,651	7.62%


10,001 ~ 15,000	408	5,255,681	3.44%


15,001 ~ 20,000	262	4,853,229	3.18%


20,001 ~ 30,000	238	6,060,495	3.97%


30,001 ~ 40,000	119	4,279,499	2.80%


40,001 ~ 50,000	89	4,079,036	2.67%


50,001 ~ 100,000	108	7,638,497	5.00%


100,001 ~ 200,000	50	6,867,967	4.50%


200,001 ~ 400,000	22	5,765,850	3.78%


400,001 ~ 600,000	10	5,091,545	3.34%


600,001 ~ 800,000	7	4,926,822	3.23%


800,001 ~ 1,000,000	2	1,896,144	1.24%


Above 1,000,001	18	63,709,019	41.74%


Total	33,048	152,648,688	100%

Preferred share: The Company did not issue any preferred share.

4.1.4 List of major shareholder

	2024.03.23	2024.03.23
Shareholder's Name	Shareholding
	Shares	Percentage
CHUNG, YEN-YEN	10,337,267	6.77%
CHOU, CHIN-WEN	9,918,432	6.50%
KAO, MING-CHUAN	7,825,423	5.13%
TSAI, CHIN-SHAN	6,575,752	4.31%
SUN, AN-LI	3,527,943	2.31%
KAO, MING-CHUAN trust property account entrusted by Esun Commercial Bank	3,300,000	2.16%
TSAI, CHIN-SHAN trust property account entrusted by Esun Commercial Bank	3,000,000	1.97%
HSU, LING-YU	2,468,067	1.62%
CHUNG, MENG-TING	2,386,859	1.56%
CHIANG, MEI-LI trust property account entrusted by Esun Commercial Bank	2,100,000	1.38%

4.1.5 Market price per share, net value, earnings & dividends for latest two years

Unit:NT$；Thousand shares

Item	year	year	2022	2023	2024/1/1~ 2024/3/31
Market Price per Share	Highest Market Price		45.25	53.50	55.20
	Lowest Market Price		36.50	39.00	47.00
	Average Market Price		41.34	45.39	50.68
Net Worth Per Share	Before Distribution		23.99	24.01	25.41
	After Distribution		20.49 (Note 5)	21.01 (Note 5)	-
Earnings Per Share	Weighted Average Share Numbers		152,649	152,649	152,649
	Earnings Per Share		4.43	3.55	1.23
Dividends Per Share	Cash Dividends		3.50	3.00 (Note 5)	-
	Stock Dividend	Dividends from Retained Earnings	-	-	-
		Dividends from Capital Surplus	-	-	-
	Accumulated Undistributed Dividends		-	-	-
Return on Investment	Price / Earnings Ratio (Note2)		9.33	12.79	-
	Price / Dividend Ratio (Note3)		11.81	15.13 (Note 5)	-
	Cash Dividend Yield Rate (Note4)		8%	7% (Note 5)	-

Note 1: Source of the materials: Taiwan Stock Exchange Corporation.

Note 2: P/E ratio = average closing price per share for the year/earnings per share.

Note 3: P/D ratio = average closing price per share for the year/cash dividend per share.

Note 4: Cash dividend yield = cash dividend per share/average closing price per share for the year.
Note 5: Including the 2023 dividend amount resolved by the board of directors on March 6, 2024.

4.1.6 Corporate dividend policy and implementation condition:
Corporate dividend policy:

Zippy is in the stage of corporate growth with a changeable industrial environment. Considering the company's future capital requirements, financial planning and surplus, the board of directors will draft a surplus distribution proposal and handle it after the resolution of the shareholders meeting.

If the company has a surplus after its final accounts, it shall first pay income tax and make up for the losses of the previous year. The 10% allocation shall be the statutory surplus reserve and the special surplus reserve shall be withdrawn or transferred in accordance with Article 41 of the Securities and Exchange Act., If the remaining balance is added to the accumulated undistributed surplus of the previous year, the board of directors shall draft a surplus distribution plan.

It is submitted to the shareholders meeting for resolution and distribution. Among them, the cash dividend shall not be less than 10% of the total dividend, but when the cash dividend per share is less than 1 NT, the full stock dividend may be paid.

Dividend distribution considerations: The company will consider the company’s environment and growth stage, respond to future capital needs and long-term financial planning, and meet shareholders’ demand for cash inflows.

Proposed dividend distribution at the shareholders meeting:

The company's earnings distribution proposal is to pay a cash dividend of NT 3.00 share. In the future, if the company’s shares are bought back or the treasury shares are transferred, converted and cancelled, which affects the number of shares outstanding, and therefore the shareholder’s allotment rate changes, it is proposed to authorize the board of directors to handle the changes. After this proposal is passed at the shareholders’ meeting, the board of directors is authorized to set another base date.

4.1.7 The impact of the free allotment proposed by the shareholders meeting on the company's operating performance and earnings per share:

This (2024) shareholders meeting did not propose free allotment.

4.1.8 Remuneration of employees, and directors
Percentage or scope of remuneration of employees, and directors as stated in the Articles of Incorporation

Percentage: employee compensation shall not be less than 2% of the total surplus distribution of the current year, and the remuneration of directors and supervisors shall not exceed 2% of the total surplus distribution of the year. However, when the company still has accumulated losses, it shall reserve the compensation amount in advance. The employee compensation in the preceding paragraph shall be distributed and paid in stock or cash by the resolution of the board.

Scope: Employees include employees of the company and affiliated companies that meet certain conditions.

The calculation basis of the estimated amount of compensation for employees, directors and supervisors in the current period, the calculation basis for the amount of employee compensation distributed by stocks, and the accounting treatment when the actual distribution amount is different from the estimated amount:
(1) Basis of estimation: the company’s net profit before tax for the current year before deducting employee remuneration and directors and supervisors’ remuneration multiplied by the company’s estimated staff remuneration and

directors and supervisors’ remuneration as stipulated in the articles of association the distribution rate is the basis of estimation.

(2) The employee compensation in this period will be distributed in cash without allotment of stocks.
(3) Accounting treatment when there is a difference between the actual allotment amount and the estimated amount: If the amount of employee compensation originally recognized in the financial report is different due to the resolution of the board of directors, the difference amount should be treated according to the change in accounting estimates and listed as the next year The profit and loss will not affect the previously recognized financial report.
Remuneration distribution approved by the board of directors:
(1) If there is a difference between the employee compensation and the compensation of directors and supervisors distributed in cash or stocks and the annual estimated amount of recognized expenses, the difference, the reason and the handling situation should be disclosed:

Cash compensation for employees: NT$21,157,986.

Remuneration of directors and supervisors: NT$14,105,324.

There are no differences with the expenses recognized in annual financial report of 2023.

(2) The amount of employee compensation distributed by stocks and the proportion of the total amount of individual or individual financial report after-tax net profit and total employee compensation for the current period: no shares are allotted.
The actual distribution of employee compensation and directors and supervisors' compensation in the previous year:

		2022
	Board Resolution	Actual allotment	Number of differences
Distribution 1.Employee compensation 2.Directors remuneration	25,881,560 17,254,374	25,881,560 17,254,374	- -

4.1.9 The company bought back the company's shares: None.
4.2 Bonds: None.
4.3 Preferred shares: None.
4.4 Global depository receipts: None.
4.5 Employee stock options: None.
4.6 Restricted employee shares: None.
4.7 Status of new shares issuance in connection with mergers and acquisitions: None.
4.8 Financing plans and implementation: None.

V.Operational highlights

5.1 Business activities
5.1.1. Business scope
1. Major business contents:
  - (1) C805050 Industrial plastic products manufacturing
  - (2) C901010 Ceramics and ceramic products manufacturing
  - (3) CA02990 Other metal products manufacturing
  - (4) CA05010 Powder metallurgy industry
  - (5) CB01010 Machinery and equipment manufacturing industry
  - (6) CC01030 Electrical and audio-visual electronics manufacturing
  - (7) CC01060 Wired communication machinery and equipment manufacturing industry
  - (8) CC01070 Wireless communication machinery and equipment manufacturing industry
  - (9) CC01080 Electronic Components Manufacturing
  - (10) CC01110 Computer and peripheral equipment manufacturing industry
  - (11) CC01990 Other electrical and electronic machinery equipment manufacturing
  - (12) CQ01010 Mold manufacturing industry
  - (13) F401010 International Trade Industry
  - (14) F401021 Telecom Control Radio Frequency Equipment Input Industry
  - (15) CC01120 Data storage media manufacturing and copying industry
  - (16) G202010 Parking lot business.
  - (17) ZZ99999 In addition to permitted businesses, may operate businesses that are not prohibited or restricted by law
2. Proportion of consolidated business:

Unit:NT$ Thousands

		Unit:NT$Thousands
Product name	2023 Sales amount(Net income)	Operating proportion
Micro Switch	1,131,755	53.22%
Power Supply	994,732	46.78%
Total	2,126,487	100.00%

※ The sales of the above products include finished products, semi-finished products, etc..

The company's current products:

Micro switch, switching power supply, etc.

New products planned to be developed:
(1) Switch aspect:
Research and develop waterproof switches required by various industries and switches with high temperature resistance and high amperage for special industrial purposes.
Research and develop automotive waterproof switches and peripheral related modules.

  - Development of indirect detection customer loop switch.

  - Research and development of high current switches for automobiles and motorcycles.

(2) Power Supply aspect:
- Develop general-purpose terminal desktop industrial specification switching power supply with easy assembly characteristics.
- Developed the industrial specification switching power supply of general-purpose Fanless Open Frame.
- Development of switching power supplies for medical equipment applications with high efficiency and low noise characteristics.
- Research and development of military specification switching power supply with high reliability and high environmental tolerance.
- Develop a backup switching power supply with narrow width (or short body), high efficiency, and intelligent control characteristics to meet the application needs of Netcom equipment, storage systems, data centers, and high-speed computing.
- Develop high-power output and intelligent control characteristics of N+1 rack-mounted switching power supply to meet the application needs of DC distributed power system.
- Developed DC/DC and HVDC input switching power supply with intelligent protection characteristics of input power to meet the needs of applications such as vehicles, mobile devices and occasions requiring DC backup.
- Develop high-efficiency and constant voltage/constant current intelligent control switching power supply for power battery charging.
- Research and develop 5G base station applications and 48V output switching power supply.
- Develop 54V output switching power supply for AI server applications.
- Develop POE switching power supply.
- Develop a Fanless backup switching power supply to meet the application needs of low noise characteristic.
- Developed a power supply with wide temperature range(-40℃~70℃) and titanium gold grade conversion efficiency.
5.1.2. Industry overview
Industry status and development:
(1) MicroSwitch

In recent years, due to rising labor costs, the manpower willing to invest in traditional manufacturing has also been greatly reduced, and the difficulty of personnel training has increased. At the same time, it is also facing price-cutting competition in the red supply chain. In order to maintain the Quality and cost competitiveness, the company invests a lot of capital expenditure in automated manufacturing to make up for the reduction of labor bonuses, control costs and maintain stable quality.

The micro switch business group has gradually shifted its marketing focus to customers who need high-end quality requirements. Such as: car locks and fuel tank applications in the automotive industry, security applications and related peripheral modules, industrial control industry and high-end home appliances, and other related fields...etc.

In addition, in order to achieve quietness in the cabin, the automotive industry has improved the airtightness of the car body, and has reduced engine noise and tire noise by introducing of hybrid vehicles and electric vehicles. With the development of automobile electrification, the circuits around the driver's seat increase, so the electronic components mounted need to be further miniaturized. To this end, the company continues to research and develop related products that meet the requirements of miniaturization and has both precise operation and quiet performance, and continues to expand the popularity and market share of the ZIPPY brand in the automotive market and business in other application industries. It is expected that there will be more spaces for growth in the future.

(2) Power Suppply

In recent years, as the scale of the personal computer and consumer electronics market has gradually declined and the red supply chain price competition on the other side has led to a sharp decline in profits, the current domestic switching power supply manufacturers such as Delta, Lite-On, Kangshu, and Chisun Energy Manufacturers such as FSP and FSP have also gradually adjusted their product strategies in due course. In addition to continuing to maintain a certain market share in the original large-volume personal computer and consumer electronics markets to meet factory capacity requirements and maintain purchase bargaining power, they will gradually focus on various interests. Basic high-end power supplies are used in the market to achieve balance, such as Netcom equipment, servers, storage systems, cloud computing and data centers, industrial control and network security, medical treatment and smart charging.

The rapid advancement of semiconductor process technology has allowed the advent of a variety of new generations of high-performance CPU and GPU chips, making artificial intelligence (AI) technology that has been discussed for many years to begin to be used and developed, and the following new technology applications can be gradually realized: smart city, self Driving, unmanned shops, robots, smart surveillance, smart medical care, etc. The development of such technologies requires the development of a variety of new hardware architecture products to support the development of high-speed computing servers, 5G equipment and systems, 4K/8K high-resolution images, and huge amounts of memory data storage space, and support the development of such hardware devices The output power requirements of switching power supplies have also been greatly increased. However, with limited hardware system installation space and constant chassis size, the power density of the power supply must obviously also be increased. In addition, the power supply must also be shared The communication protocol provides various status displays for the system to understand and perform necessary interactive control.

Due to the continuous digital transformation of enterprises, the gradual fermentation of AI applications, and the active promotion of hybrid cloud and edge computing by cloud players, global server shipments in 2020 are expected to grow by about 5%; in the medium and long term, the aforementioned driving forces will continue. In addition, the volume of 5G transmission data will explode in 2023, which is expected to drive computing demand. It is estimated that the compound annual growth rate (CAGR) of global server shipments from 2020 to 2024 will reach 6.5%.

In response to this market demand, the company has actively developed various switching power supplies with high power output, high power density, high efficiency, and intelligent control characteristics to meet the above various application needs, while also considering the continuity of product structure

design. And product design integration, so that customers can easily upgrade the system without changing their chassis design, and even make more space for customers to place more system modules, so as to enhance customers' willingness to cooperate and satisfaction to seize more business opportunities .

Relevance of the industry up, middle and downstream:
(1) MicroSwitch
- a. The relationship between upstream raw materials and industry:

The main raw materials of the micro switch are copper, silver, PBT, Nylon, etc., among which copper can be supplied by the domestic supply chain provided. The main sources of silver wire and silver dots are from Japan and South Korea, and Zippy has several suppliers available, the main raw material acquisition and processing in the country is quite high.

b. Relevance of downstream application products and micro switches:

The downstream applications of micro-switches are mainly in household appliances, business machinery and equipment, electromechanical and peripheral equipment, auto parts, security equipment, communication and communication equipment, etc. The company, as a provider of electronic parts, strengthens overall solutions to gain customer trust with quality, and Automate and standardize the manufacturing process and expand the supply chain system of various industries.

Due to the close cooperation of upstream, midstream and downstream manufacturers, the industrial supply chain is complete. The structure table is as follows:

strengthens overall solutions to gain customer trust with quality, and Automate and standardize the manufacturing process and expand the supply chain system of various industries. Due to the close cooperation of upstream, midstream and downstream manufacturers, the industrial supply chain is complete. The structure table is as follows:	strengthens overall solutions to gain customer trust with quality, and Automate and standardize the manufacturing process and expand the supply chain system of various industries. Due to the close cooperation of upstream, midstream and downstream manufacturers, the industrial supply chain is complete. The structure table is as follows:	strengthens overall solutions to gain customer trust with quality, and Automate and standardize the manufacturing process and expand the supply chain system of various industries. Due to the close cooperation of upstream, midstream and downstream manufacturers, the industrial supply chain is complete. The structure table is as follows:

MicoSwitch
Upstream	Midstream	Downstream
Raw materials, semi-finished products	Finished product	Application products
Metal materials-phosphor bronze, brass, beryllium copper Electroplating material-gold plating, silver plating Plastic materials-PBT, Nylon Other materials-wire	Micro Switch	Information Products Home appliance Communication Products Automotive components Security equipment Industrial equipment Smart meter Electric locomotive

(2) Power Supply:

a. The relationship between upstream raw materials and industry:

The main parts of a switching power supply can be roughly divided into active components, passive components, PCBs, heat dissipation components, magnetic components, other types of electronic components, casings and packaging materials. The control ICs, power semiconductors, capacitors, and fans of active components are mostly supplied by the United States and Japan.

Passive components and magnetic materials can be manufactured in China except for special transformer cores. In the domestic electronics industry, the rate of self-made is quite high. On the other hand, as the degree of digitization increases in the future, Micro Controller or DSP chips will gradually be applied to power supplies.

b. Relevance of downstream application products and Power Supply:

The domestically produced switching power supplies are mainly used in industrial computers, communication applications, storage systems and medical equipment. With the vigorous development of the computer information industry, power supplies are downstream communication products, computer peripherals, network equipment, indispensable components such as consumer electronics, industrial equipment, cloud computing data center equipment, etc., have also brought vast business opportunities to the power supply industry.


	Power Supply
Upstream	Midstream	Downstream
Raw materials, semi-finishedproducts	Finished product	Application products
Active component manufacturing -Control IC -semiconductor Passive component manufacturing -capacitance -resistance -Surge absorber Magnetic component manufacturing -transformer -Inductor -filter other -chassis -fan -heat sink -Wire Aprinted circuit board	Redundant power supply Switching power supply	Information Products Server Medical and instrument industry Communication Products Cloud Computing Data Center Network product security Industrial Specification Application Products Military application products Power battery charging products 5G base station power supply POE power supply

(3).Product development trends and competition: See page 77.

5.1.3.Overview of technology and R&D:

In order to maintain its leading position in the industry, the company has set the proportion of R&D expenditure to revenue as one of the company’s KPIs, and invests a certain amount of R&D expenses on average each year. The research expenses for the last three years and the first quarter of this year are as follows:

			Unit:NT$Thousands	Unit:NT$Thousands
Year	2021	2022	2023	2024Q1
R&D	77,869	70,873	68,239	21,052
Percentage of operatingincome	3%	3%	3%	3%

R&D achievements in the last three years:

The company has successfully developed new products or improved its manufacturing process and specifications in the last three years, and the number of patent applications approved in different countries is as follows:

Year	2021	2022	2023	2024Q1
Numbers	1	5	1	2

3. Future research and development plan:

The company will use existing technology to match the industrial development direction of various products, and take one of the 5.1.1.4. The new products that the company plans to develop on page 72 are the future research and development goals.

5.1.4.Long-term and short-term business development plans:
Micro Switch

Short-term development:

(1) Based on existing products, extend the development of switches that meet the special needs of customers and the application of popular products in the current market, such as adding different foot types and fittings of existing micro switches to meet customers' different types of foot types and The needs of different fittings.
(2) Micro switches in the target industry.
(3) The rotary switch of the wireless remote control application is combined with the car audio and handwriting board to match the exclusive rotary switch.
(4) In addition to continuing to develop related products that are in line with the goal of miniaturization, precise operation, and quiet performance, we have also taken the lead in developing small, high-current DC switches and have successively launched them to customers for testing. The company will continue to expand the ZIPPY brand in automobiles. The popularity and share of the motorcycle market and business in other application industries are expected to add momentum to future performance.

Long-term development:

(1) Continue to manage the diversified sales of waterproof switches, the development of high amperage home appliances, industrial switches, consumer products, and the increase and extension of peripheral modules related to switch applications and other potential demands the electronic parts.
(2) Product R&D and manufacturing adopt an automated production structure to improve production efficiency and production quality.
(3) Provide customized module requirements.
(4) In the future, we will continue to strengthen and accelerate the digitalization and automation of internal flexible production and manufacturing processes to meet the various changing needs of customers with small quantities, variety, and short delivery times, and help customers relieve inventory pressure.

2. Power Supply

(1) The vast majority of power supply manufacturers prefer to develop such products due to the wide range of AC/DC applications. Our company provides AC/DC and DC/DC solutions almost in the same Form Factor, allowing customers to select and design their systems. More flexibility to increase customer willingness to cooperate.
(2) The size of the mechanism is designed to maintain commonality. Therefore, the chassis could be upgraded painlessly when customers’ system function is improved. Each generation of power supply can be introduced into the application of customers’ new products in order to increase customers’ share.
(3) To develop and integrate products with high power output and high power density (narrow width or short body), and provide global high-quality engineering design services to facilitate differentiated sales of products and customers in higher-tech markets.
(4) Focusing on small niche markets, we have been working on a small number of diversified customized products for a long time, and we can make product adjustments in response to customer needs. The product line is complete. At the same time, it adopts a strategic quotation model and provides customers with an advantage over the industry's short delivery period to ensure that the established profit is maintained in small orders, but it can remain competitive in the medium and large orders in response to the gradual reduction of the competitor MOQ.
(5) For the main end-user customers in each region (that is, customers of direct customer system assembly plants), construct benign interactions and provide resource support, so that they recognize the company's brand and directly designate the new giant to existing SI customers in terms of power supply selection.
(6) Committed to the market development of other related application fields: such as medical, military, automation equipment, industrial applications, power battery applications, etc., and actively develop its own brand channels and market development in emerging developing countries, and develop towards a comprehensive market, with a view to improving ZIPPY (Emacs) International brand awareness and share.
(7) Carry out the integration of product design platform and materials, and take the improvement of the production and manufacturing automation ratio as design considerations to enhance quality and market price competitiveness.

5.2 Overview of market, production and sales

5.2.1. Market analysis

1. Amount of each major product sales area:

Unit:NT$ Thousands

					Unit:NT$Thousands	Unit:NT$Thousands	Unit:NT$Thousands	Unit:NT$Thousands
Year Area	2022				2023
	Micro Switch	Power Supply	Total	proportion	Micro Switch	Power Supply	Total	proportion
Domestic	178,110	496,215	674,325	26%	167,865	265,048	432,913	20%
United States	107,637	512,658	620,295	23%	93,601	379,893	473,494	22%
China	287,100	164,248	451,348	17%	352,507	67,311	419,818	20%
Germany	38,324	214,295	252,619	10%	29,977	187,062	217,039	10%
Italy	174,347	3,896	178,243	7%	200,695	2,681	203,376	10%
Other countries	320,940	144,405	465,345	17%	287,110	92,737	379,847	18%
Net operating income	1,106,458	1,535,717	2,642,175	100%	1,131,755	994,732	2,126,487	100%

Competitors and competitive niches:
(1) Micro Switch

Over the years, the company has continuously invested in basic precision technology research in electronic components, product innovation and quality system improvement, and coupled with service support customers as the main axis, thus creating a diversified customer base, such as communications, home appliances, security systems, electric Tools, automobiles, electric vehicles, industrial equipment, security equipment... etc. Therefore, customers' trust and support for our products are the biggest niche. At present, the competitors are major manufacturers in Europe, America and Japan. As the automobile market pays great attention to production quality and risk control, the company has obtained the very strict automobile quality certification IATF 16949 and has many years of European, American and land vehicle markets experienc.

(2) Power Supply

Major brands and system integration vendors tend to provide standard C+P and C+P+M (MB) solutions from chassis manufacturers or motherboard manufacturers to standardize hardware design and accumulate sufficient purchases to significantly reduce hardware costs and internal engineering research and development Manpower itself focuses on software/firmware development and marketing strategies, and price is the only consideration.

FSP/3Y, Delta, Acbel, Chicony & Seasonic are frequently encountered domestic competitors, and Chinese power supply brands Great Wall, ASPower, and Gospel are also closely following. They often compete with each other for market share, especially in Standard Form Factors such as Flex ATX, Desktop, and CRPS are widely used in the market. Moreover, the competitor's MOQ for customers has been adjusted downward from 1~2K to 300~500, and recently it has been relaxed to 100~300, which has really impacted our current quotation.

In addition, Artesyn (Emerson) and MURATA are also very active in Europe and America. Their products are highly modular and digitized, and their product range is quite complete, posing a direct threat to the new giant. Compuare is sold with Supermicro motherboards, which affects our sales in the US market.

Compared with the above competitors, the key niche for Zippy to remain competitive is:

3-year warranty
4-6 week lead time
Flexible MOQ from 1 to 1000+
More than 10 years of long product supply and extended life
Product diversity and commonality of AC/DC models
Extensibility customized design and production capacity
The global layout team serves well and quickly

Approximate market share of major products:

(1) Micro Switch

At present, the company’s micro switches have a global market share of about 4% to 5%. Due to years of hard work, many world-renowned brands of consumer products and home appliances use the company’s micro switches and the company’s micro switches. The design, manufacturing and service are widely trusted by many major manufacturers, and thus extend to more product lines. The company will do its best to continue to expand in the automotive industry chain. The popularity of the ZIPPY brand continues to heat up, creating greater profits with a stable niche.

(2) Power Supply

The company specializes in the research and development of high-wattage, high-performance, and long-life switching power supplies. The main focus is server-level and industrial-grade computer systems switching power supplies, providing customized products for customers. Tailor to "exclusive" requirements. The main markets are North America, Europe, China, the Middle East and other regions. The customer base mainly includes motherboard system vendors, system integrators, storage equipment manufacturers, and chassis manufacturers.

Future market development and the company's business goals:
(1) Micro Switch

In recent years, the company has actively deployed the supply chain in line with the first-tier automotive and home appliance markets. In response to market trends, in addition to developing a variety of high-ampere, long-life micro switches, as the development of automotive electrification and car body airtightness, the development of miniaturization In addition, the waterproof micro switch with precise operation sense and silent performance is also an incentive for sustainable growth and profitability in the future.

(2) Power Supply

Operational focus this year: to improve technology and R&D standards to prepare for future layout and increase market share; to strengthen flexible production and customized demand production.

Advantages and disadvantages of development prospects and countermeasures:
(1) Favorable factors
a. The product has a wide range of applications, which are indispensable components of various electronic products and are not easily affected by the introduction of downstream product designs.
b. Strong ability in product and process research and development, able to grasp the market pulse at any time, actively develop various new products, and be able to research and develop related automated production equipment by itself.

     - c. Complete product line, providing guests with all-round resources.

     - d. Flexible production, short delivery time.

     - e. Flexible production, short delivery time.

     - f. Deeply cultivate self-owned intellectual property products, separate markets and strengthen marketing capabilities.

  - (2) Disadvantages

     - a. Product life cycle in the IT field is short and price competition is fierce.

     - b. Traditional switches and power supplies have many competitors and followers, resulting in product price competition.

     - c. Customized production, small quantity and variety, high material cost.

  - (3) Countermeasures

     - a. The company has introduced automated production equipment, which can greatly save assembly manpower in order to reduce operating and manufacturing costs.

     - b. Active research and development, the development of new products with higher added value, and the common design of product materials, to avoid fierce price competition for low-end products.

     - c. Build high-quality customer service relationships.

     - d. Strengthen strategic cooperation, integrate resources with relevant key suppliers and partners, and cooperate in multiple angles.

5.2.2. Important uses and production processes of main products:
The important uses of the main products are as follows:

Main Products

Uses

Micro Switch

Telephones, photocopiers, fax machines, desk lamps, security and
monitoring systems, power tools, commercial small household appliances,
small household appliances, electric toys, paper shredders, computer
peripherals (mouse, keyboard or handwriting board), communication
devices, televisions Amusement instruments, health equipment, audio,
auto parts, water heaters, gas stoves, equipment and instruments, remote
controls, small home appliance control panels, car digital audio panels,
smart appliances and other products.

Power Supply

High-end servers, high-end industrial computers, storage system
computers, military specification power supplies, medical equipment
switching power supplies, redundant switching power supplies, POE
application switching power supplies.

2. Production process:

(1) Micro Switch:

（Middle shrapnel） ▽Copper material ○Stamping □Stamping inspection	（spring）（Foot）（main part） ▽wire material ▽Copper material ▽Plastic material ○Spring formin ○Stamping ○Injection Molding ○Heat treatmen ○Heat treatme □Injection inspection □Stamping inspection □Stamping inspection ○plating □thickness test ○Hook （NO foot）（NO foot） ▽Copper materi ▽Copper material ○Press molding ○Press molding □Stamping inspection □Stamping inspection ○plating ○plating □thickness test □thickness test point Silver point ○Riveted silver point ○Riveted silver point ○combination （Cover） ▽Plastic material ○cleaning ○Injection Molding □Injection inspection ○combination ▽Electricity test □Hand feeling test □Finished product inspection	（spring）（Foot）（main part） ▽wire material ▽Copper material ▽Plastic material ○Spring formin ○Stamping ○Injection Molding ○Heat treatmen ○Heat treatme □Injection inspection □Stamping inspection □Stamping inspection ○plating □thickness test ○Hook （NO foot）（NO foot） ▽Copper materi ▽Copper material ○Press molding ○Press molding □Stamping inspection □Stamping inspection ○plating ○plating □thickness test □thickness test point Silver point ○Riveted silver point ○Riveted silver point ○combination （Cover） ▽Plastic material ○cleaning ○Injection Molding □Injection inspection ○combination ▽Electricity test □Hand feeling test □Finished product inspection	（spring）（Foot）（main part） ▽wire material ▽Copper material ▽Plastic material ○Spring formin ○Stamping ○Injection Molding ○Heat treatmen ○Heat treatme □Injection inspection □Stamping inspection □Stamping inspection ○plating □thickness test ○Hook （NO foot）（NO foot） ▽Copper materi ▽Copper material ○Press molding ○Press molding □Stamping inspection □Stamping inspection ○plating ○plating □thickness test □thickness test point Silver point ○Riveted silver point ○Riveted silver point ○combination （Cover） ▽Plastic material ○cleaning ○Injection Molding □Injection inspection ○combination ▽Electricity test □Hand feeling test □Finished product inspection
Heat treatmen ○plating □thickness test Silver point ○Riveted silver point （Button） ▽Plastic material ○Injection Molding □Injection inspection Silver	□Stamping inspection □Stamping inspection ○plating □thickness test
			Hook ○
	○ （NO foot）（NO foot） ▽Copper materi ▽Copper material ○Press molding ○Press molding □Stamping inspection □Stamping inspection ○plating ○plating □thickness test □thickness test point Silver point ○Riveted silver point ○Riveted silver point
		（Cover）

(2)Power Supply:

==> picture [478 x 574] intentionally omitted <==

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Parts bad Wipe the
receiving Circuit board repair packaging
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inspection control
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Inspection
bad
Voltage
repair
Issue adjustment Product
storage
Parts Finished product
Processing assembly
Process quality
control
Process quality
control
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Solder cleaning Inspection repair
output
Process quality
control
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Burn-in test repair
Tin fill
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control test
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automatic repair
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5.2.3. The source and supply of main raw materials:

The source and supply of main raw materials:	The source and supply of main raw materials:	The source and supply of main raw materials:

	2023
Name	Main source	Supplysituation
Beryllium Copper	Japan and the United States	Normal
Silver wire	Japan, Korea and China	Normal
Plastic pellets	Domestic, Japan, Holland, and the United States	Normal
Capacitor	Domestic, Japan, China, Malaysia, Indonesia	Normal
PCB	Domestic and China	Normal
Brass	Domestic	Normal
Red copper	Domestic and Singapore	Normal
SUS	Domestic, Japan and Malaysia	Normal
Semiconductor	Domestic, Japan, Europe, Malaysia, Philippines, China, Thailand, Singapore	Normal
Transformers and coils	China	Normal
Iron case, heat sink	Domestic	Normal
fan	China and Philippines	Normal
Wire	Domestic and China	Normal
Printed circuit board	Domestic	Normal
Resistance	Domestic and China	Normal

5.2.4. The names of customers who have accounted for more than 10% of the total purchases (sales) in any of the most recent two years and their purchases (sales) amount and proportion:
List of major sales customers: None.
- The company's business scope spans two major categories: micro switches and power supplies. The products are diverse and the sales targets are scattered. In any of the last two years, there are no customers whose sales amount has exceeded 10% of the total.
List of major purchasers: None.

Due to the large number of products our company requires, there are also many raw materials and suppliers required. In any of the last two years, there has been no supplier with a purchase amount of more than 10% of the total amount.

5.2.5. Production value table for the last two years:

Unit: 1,000 pcs; NT$ Thousand

				Unit: 1,000pcs; NT$ Thousand	Unit: 1,000pcs; NT$ Thousand	Unit: 1,000pcs; NT$ Thousand
Quantity & Value Major Product	2022			2023
	Capacity	output	value	Capacity	output	value
Micro Switch	185,937	117,701	717,765	207,077	106,710	670,997
Power Supply	578	301	856,065	578	145	486,205
Total	186,515	118,002	1,573,830	207,655	106,855	1,157,202

5.2.6. Sales volume value table for the last two years:

Unit: 1,000 pcs, NT$ Thousand

					Unit: 1,000pcs, NT$ Thousand	Unit: 1,000pcs, NT$ Thousand	Unit: 1,000pcs, NT$ Thousand	Unit: 1,000pcs, NT$ Thousand
Quantity & Value Major Product	2022				2023
	Domestic sales		Oreign sales		Domestic sales		Oreign sales
	Quantity	Value	Quantity	Value	Quantity	Value	Quantity	Value
Micro Switch	43,669	178,110	102,233	928,348	12,896	167,865	98,625	963,890
Power Supply	110	496,215	200	1,039,502	47	265,048	114	729,684
Total	43,779	674,325	102,433	1,967,850	12,943	432,913	98,739	1,693,574

※Others: including semi-finished products and materials.

5.3 Information of employees

nformation of employees	nformation of employees
Year		2022	2023	Up to 2024/3/31
Number	Staff	339	317	322
	technician	110	109	112
	Operator	464	446	469
	Total	913	872	903
Average years		41.96	43.04	43.15
Average years of service		9.45	11.07	11.20
Education Distribution ratio	PHD	0.00%	0.00%	0.00%
	Master	2.52%	2.75%	2.76%
	Junior college	28.15%	29.36%	28.25%
	High school	23.55%	22.71%	22.04%
	Below high school	45.78%	45.18%	46.95%

5.4 Environmental protection expenditure information:

Since our company is in the electronic parts industry, and its factories are not likely to pollute the environment, no environmental issues have ever occurred. There were no incidents of sanctions due to environmental issues in the most recent year and as of the publication date of the annual report.

According to laws and regulations, the company does not need to apply for pollution facility installation permits or pollution discharge permits, nor does it need to pay pollution prevention and control fees and does not need to set up environmental protection professionals.
Details of pollution prevention equipment: None.
The process of improving environmental pollution in recent years: None.
Losses due to environmental pollution in the most recent year: None.
Estimated major environmental protection capital expenditure in the coming year: None.

5.5 Labor relations:

Measures for employee welfare:
(1) When applying for labor insurance, employees can enjoy dividends, shares, and bonus systems.
(2) Establish an employee welfare committee, allocate 1% ~ 5% of the capital, allocate 0.05% ~ 0.15% of the total monthly operating income, and allocate 40% of the leftover income as the employee welfare committee fund. The scope of its benefits Including employee birthday gifts, wedding and funeral gifts, festive gifts, employee travel, end-tooth activities, etc.
Further education and training:
(1) Evaluate the required abilities of personnel according to the qualification appraisal form. If employees are transferred or their functions are not professional enough, in order to improve their professional skills, employees can propose out-of-plant education and training by themselves. After the supervisor agrees, they can be trained outside the factory.
(2) The company has formulated "Human Resource Management Procedures" to closely cooperate with the company's growth and employee talent development plan, so that employees can have technical and management capabilities when performing various duties, and stimulate their potential and improve production efficiency. Improve the quality of employees through education and training to strengthen the company's competitiveness, and then cultivate training teachers so that the company's technical knowledge can be passed on.

(3) The company’s manager education and training this year.

Department	Title	Name	Course	Training hours
Sales Department	Senior Manager	CHENG, CHIU-YI	AI application power ZIPPY product education and training ATX Overview and Particularities Key differences between ATX3.0 andATX3.1	4
Factory Chief	Assistant Manager	WANG, SHIH-CHIEH	First responder safety and health	4
RD Department	Assistant Manager	NI,YU-TING	Patent rights contract DIP model product introduction	3
Sales Department	Manager	LIAO, CHI-HUNG	AI application power ATX Overview and Particularities Keydifferences between ATX3.0and ATX3.1	3
Sales Department	Assistant Manager	LIAO, HSIN-YU	AI application power	1
RD Department	Manager	FAN, CHIH-FU	Transformer introduction	1.5
RD Department	Assistant Manager	CHEN, YUN-CHENG	Transformer introduction	1.5
Planning Department	Manager	LIU, YI-LANG	Policy analysis on self-preparation of financial statements and sustainability reporting and key discussions on internal audit and internal control practices EXCEL chart dataprocessingtechnology	3
Audit Department	Manager	CHEN, SHU-CHUAN	The "corporate governance" qualities that internal auditors should have and the practice of financial reporting risk assessment Promote sustainable development of enterprises through risk management Policy analysis on self-preparation of financial statements and sustainability reporting and key discussions on internal audit and internal control practices Practical measures to improve the “Three Lines of Defense of Internal Control” Common internal control management deficiencies in enterprises and analysis of practical cases Regulations and practical analysis on capital loans, endorsement guarantees and acquisition of assets for disposal	16
Accounting Department	Senior Manager	YANG, CHU-TING	Continuing training course for accounting officers of issuers, securities firms, and securities exchanges	16

(4) Education and training of employees other than managers of the company this year:

Year	Number of participants	Total hours	Number of courses(hours)	Number of courses(hours)	Expenses
			Internal training	Outside training
2023	245	918	785	133	NT$ 51,000

Course content includes product expertise, sales and procurement skills, quality management, ISO14000 related, Various internal and external education and training courses related to internal control systems, environmental protection, etc.

Retirement system and implementation status:

The company’s retirement system is handled in accordance with the Labor Standards Law, and is divided into two methods: the new system and the old system. The employee chooses the applicable method: (1) Those who choose the old system will allocate 2% per month and deposit in a special account in the Central Trust Bureau; (2) For those who choose the new system, 6% of the insured salary will be withdrawn in the personal account for the employees who choose the new system.

Labor-management agreements and employee codes of conduct:

Zippy ‘s code of conduct for global employee standards requires employees to commit to complying with laws and ethical principles to maintain the new giant’s assets, rights and image, so that the company can continue to operate and develop, and it will be announced during the training of new employees . In addition to complying with current effective government regulations and company policies and personnel regulations, employees are committed to the principles of "protecting the earth, saving energy and reducing carbon, implementing environmental requirements, continuous environmental improvement" and "positive thinking".

The key points of the ``Personnel Regulations'' are as follows:

(1) When contacting third parties related to work tasks, they should comply with laws and regulations, business practices and business ethics to avoid conflicts of interest.
(2) Maintain the security of the company's resources, and strictly prohibit illegal or improper use of resources.
(3) Properly protect the company's information, business, technical data, and other business secrets and confidential information.
(4) It is forbidden to obtain the business secrets and confidential information of others by improper methods, or to infringe the intellectual property rights of others.
(5) Comply with relevant provisions of patent rights.
(6) Do not use inside information to gain benefits for yourself or others.
(7) Comply with and implement environmental safety regulations, and at the same time cooperate with the company's practices to promote related commitments and policies to new stakeholders (such as supply chains).

At the same time, it also regulates internal education and training, punishment and appeal channels. Every employee of Zippy Technology Corp. is responsible for maintaining the reputation of Zippy Technology Corp. according to the highest ethical standards to ensure the rights and interests of Zippy Technology Corp. and all stakeholders.

Employee policies and communication channels
Employees are the company’s most important asset, so we have established new giant rules and regulations, and we do comply with the following:
(1) It is forbidden to hire forced employees and child labor. Employees are free to resign with reasonable notice in advance. Employees under the age of 18 must not engage in hazardous work. You should check your ID card, health insurance card, and graduation certificate when you apply. If you find child labor, you should actively notify your school or contact the Social Affairs Bureau to get in touch with your parents or guardians. If the parents or guardians are not currently working, the company should assist them. Looking for a suitable job, if the employee is the only source of income, he should be referred to the New Taipei City Social Bureau.
(2) Prohibition of forced labor: do not force labor to engage in illegal or dangerous work...etc.
(3) Employees should be free from harassment and discrimination. No employee or applicant should be discriminated against because of race, religion, color, nationality, age, gender, disability or other factors unrelated to Zippy Technology Corp.'s legal business interests.
(4) The remuneration of employees should comply with all applicable salary laws and local regulations, including minimum wages and legal benefits.
(5) Maintain employee health, safety and sanitary conditions: workplace safety promotion and education, and annual health inspection and tracking of all employees.
- ※ The company has established operating procedures for the occupational disaster prevention plan, which details the protection measures and operating specifications for the personal safety of employees in the working environment, and has been published on the website.
- ※ The labor safety and health inspections are entrusted to the labor safety consulting company every year, and the defects are listed as the annual improvement focus, and the improvement effects are tracked.
- ※ Implement work environment inspections every six months, and submit inspection reports, and track improvement effects.
- ※ Implement disaster prevention exercises every six months, and keep photos and records for verification.
- ※ The annual health check is carried out every year, and all direct and indirect personnel participate in the health check.
(6) Listen to the voices and feedback of employees: employees independently organize employee welfare committees and societies to allow employees to participate in and make decisions about employee welfare, and have reasonable and legal communication channels.

(7) Announcement of the personnel reward and punishment system: In accordance with the personnel rules and regulations, the reward and punishment system will be announced to let employees know when they arrive.
(8) Working hours: follow the Labor Standards Law, and extend the working time for 3 months, but not more than 54 hours per month.
(9) Work remuneration: Employed in accordance with the company's personnel regulations, so that employees clearly understand the job management and remuneration, and regularly review the basic salary and overtime calculation of employees in accordance with the provisions of the Labor Standards Law to meet the requirements of the law.
The company and financial information disclosure related personnel have obtained relevant licenses designated by the competent authority: None.
Various measures to safeguard the rights and interests of employees: The company’s employee benefits and treatments are comparable to or better than the Labor Law, and there are currently no special safeguards.
Losses and countermeasures caused by labor disputes in the most recent year and up to the date of publication of the annual report:

As the company always pays attention to employee welfare, under the harmonious operation of labor and management, no major labor disputes have occurred.

5.6 Cyber Security Management

5.6.1 The risk management framework, policies, specific management plans and resources which are invested in cyber security management
(1) Organizational structure of cyber security
- Since September 2019, Zippy has established the "Cyber Security Committee" with the general manager as the convener, who assigned one information security supervisor with a team responsible for comprehensive cyber security governance, planning, supervision and implementation, in order to build a corporate cyber defense capability and employees’good awareness of cybersecurity threat. The committee submits the "Cyber Security Risk Management Report" to the BOD for review every year.

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Board of Directors
Chairman
Audit Dept.
General Manager
Cyber Security Committee
Planning & Execution Information security
Units Support Units supervisor
Electronic
Planning Information Power Supply Legal F&A HR
Components
Dept. Dept. Division Dept. Dept. Dept.
Division
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(2) Information Security Strategies

Information Security Governance	� Refined management system � Control risks and strengthen prevention � Build a joint defense system	Continue to improve the management system by strengthening education and training, information security infrastructure design, and deepening protection technology
Legal Compliance	� Regular review/revision � Establish a compliance cycle	Establish a compliance cycle to regularly review and revise internal regulations to comply with international cyber security standards and overseas laws
Technology Applications	� Collect internal and external datas � Data analysis � Anticipate threats and make decisions	Use big data analysis to predict information security risks and make early security decisions

(3) Information Security Policies

We abide by laws and regulations to formulate relevant information security management regulations, and provide appropriate protection measures for Zippy's electronic products to ensure confidentiality, integrity, usability and legal compliance.

Cyber security is to protect the company's assets, including physical and non-physical assets, which cannot be used or approached without the authorization of the competent authority.

Developing cyber security is the responsibility of the management. Management staff should be aware of, understand and be familiar with its purpose and procedures, and supervise its effective implementation to exert the substantive effect.

(4) Information Security Management

In order to effectively prevent confidential information from theft, override, loss or omission, and protect the confidentiality, integrity and availability of the information system, our information security department assists all departments in implementing relevant information security control measures:

CybersecurityArchitecture Inspection
a. After reviewing the appropriateness, structure and mechanism of the relevant measures for continuous operation, there is no risk of single point of failure. We conducted risk analysis on the appropriateness of the continuous business operation. The result of the assessment of cybersecurity architecture shows no significant risks currently.
b. Examination of the maximum impact and risk tolerance of failures at each site:
- Server virtualization, regular data offline backup, PC backup, disaster recovery exercise, and hardware maintenance, are all within the risk tolerance.
Network Activity Inspection
a. Currently, the access records of equipments and account permissions are in normal operation.
b. After reviewing network equipment, cybersecurity facilities (firewall, spam filtering, phishing detection, webpage protection, etc.) and the granting/monitoring mechanism of account permissions still complies with the internal control operation regulations.
Scanning and Repairing Vulnerability of Network Equipments, Servers, Terminals and Other Equipments
a. We regularly or timely scan the weaknesses of network equipments, servers and terminals, to make improvements and repair for the weaknesses found.
b. We evaluate the scope of the vulnerability scanning operation, operation mode, vulnerability improvement plan and repair situation, and provide evaluation suggestions based on the scanning results, focusing on identifying possible weaknesses and loopholes in the structure, improving and repairing them, to reduce the overall security risk.

Website Security Check

Zippy proceeds the penetration testing, which is divided into three steps,

Data collection;
ICT analysis;
Target penetration.

By simulating hacker attacks, and using security detection tools to conduct penetration tests on websites that allow external links, we can find out the weaknesses of the website as soon as possible and repair it early.

Security Settings Check

Our server security policy settings are as follows:

Check the settings of the server's "password policy" and "account lockout policy", and use analysis tools and manual operations to check whether the relevant domain security policy settings comply with internal control regulations.

Email Social Engineering Exercise

Our MIS engineers keep conducting the simulation exercises of cybersecurity incidents from time to time, advocating and strengthening cyber security training to all employees within the scope of internal security monitoring.

The main evaluation items are:

Mail content and attachment files
Mail delivery time and method
Mail open rate and click-through rate

The main goal of follow-up improvement mechanism exercise is to let employees understand the risks of using e-mails, improve their crisis awareness of preventing social engineering attacks, and reduce the risks of social engineering attacks, thereby protecting customer data and important operational information.

5.6.2 List the losses suffered, the possible impacts, and the countermeasures due to major cybersecurity incidents in the most recent year and as of the publication date of the annual report. If it cannot be reasonably estimated, the fact that it cannot be reasonably estimated should be stated: None.

5.7 Important contracts: important contracts that are still valid until the date of publication of the annual report

report
Contract Nature	Counterparty	Contract Term	Major Contents	Restrictions
Bank loan contract	China Trust Commercial Bank	2013/03~ 2028/02	Loan to purchase Wugu building	1. Take Wugu Building as collateral 2. Financial ratio restriction: from the first half of the year of 2014 A. Debt ratio: not higher than 155% B. Interest protection multiple: not less than 6 times C. Tangible net worth: not less than NT$2 billion
House lease	FOUNDER FIVE LTD	2022/1/19~ 2032/3/18	Lease Wugu Building 1F, C area	None
House lease	JUO YU CO., LTD.	2022/08/15~ 2025/08/14	Lease Wugu Building 1F, AB area	None
House lease	Uni-President’s corporate	2021/01/15~ 2033/01/14	Lease Wugu Building 1F	None
House lease	Taiwan Mobile Co.	2024/03/01~ 2030/02/29	Lease Wugu Building 2F	None
House lease	Pronology Services Inc.	2022/05/01~ 2025/04/30	Lease Wugu Building 3F,6F	None
House lease	KEENG-JHR PLASTIC COMPANY	2018/07/01~ 2028/06/30	Lease ZIPPY Yilan Wujie factory-B	None
House lease	KEENG-JHR PLASTIC COMPANY	2019/09/01~ 2025/08/31	Lease ZIPPY Yilan Wujie factory-A	None
House lease	ASIA SKIN COSMETICS COMPANY	2023/10/01~ 2026/09/30	Lease Wugu Building 5F-A	None
House lease	Reliance Biosciences Incorporated	2020/08/11~ 2026/09/26	Lease Xindian Building No. 52, 10F	None
House lease	AURORA CORPORATION	2022/12/01~ 2027/12/31	Lease Wugu Building 5F-C	None

VI. Financial overview

6.1 Financial Information

6.1.1. Condensed balance sheet and comprehensive income statement

1.Condensed balance sheet for the last five years - consolidated

Unit:NT$ Thousands

Year Item	Year Item	Financial information for the last five years	Financial information for the last five years	Financial information for the last five years	Financial information for the last five years	Financial information for the last five years	2024/01/01 ~2024/03/31
		2019	2020	2021	2022	2023
Current assets		2,295,107	2,041,510	2,206,590	2,127,746	1,987,843	2,266,689
P&P&E		1,300,482	1,263,501	1,263,211	1,247,284	1,193,209	1,185,532
Intangible assets		22,958	22,317	21,346	21,082	20,261	20,441
Other assets		2,257,477	2,240,874	2,204,628	2,190,887	2,178,845	2,178,895
Total assets		5,876,024	5,568,202	5,695,775	5,586,999	5,380,158	5,651,557
Current liabilities	Before distribution	1,425,195	1,041,891	1,044,829	739,167	585,535	655,488
	After distribution	1,730,492	1,431,145	1,502,775	-	-	-
Non-current liabilities		1,328,853	1,274,688	1,222,772	1,150,817	1,099,659	1,086,522
Total liabilities	Before distribution	2,754,048	2,316,579	2,267,601	1,889,984	1,685,194	1,742,010
	After distribution	3,059,345	2,705,833	2,725,547	-	-	-
Equity attributable to owners of the parent company		3,088,179	3,216,771	3,393,830	3,662,299	3,664,580	3,878,794
Equity		1,526,487	1,526,487	1,526,487	1,526,487	1,526,487	1,526,487
Additional Paid-In Capital		135,568	135,564	135,564	135,564	135,562	135,562
Retained Earning	Before distribution	1,467,487	1,605,789	1,797,660	2,024,209	2,030,759	2,219,143
	After distribution	1,162,190	1,216,535	1,339,714	-	-	-
Other Equity		(41,363)	(51,069)	(65,881)	(23,961)	(28,228)	(2,398)
Treasury stock		-	-	-	-	-	-
Non-control Equity		33,797	34,852	34,344	34,716	30,384	30,753
Total Equity	Before distribution	3,121,976	3,251,623	3,428,174	3,697,015	3,694,964	3,909,547
	After distribution	2,816,679	2,862,369	2,970,228	-	-	-

Note 1： The financial information of each year has been checked and approved by accountants.

Note 2： The surplus in 2023 was distributed by the resolution of the board of directors, and the resolution of the shareholders meeting is still pending.

Note 3： 2024 quarter report has been reviewed by accountants.

2.Condensed consolidated income statement for the last five years - consolidated

Unit:NT$ Thousands

Year Item	Financial information for the last five years	Financial information for the last five years	Financial information for the last five years	Financial information for the last five years	Financial information for the last five years	2024/01/01 ~2024/03/31
	2019	2020	2021	2022	2023
Operating income	2,669,131	2,475,359	2,662,857	2,642,175	2,126,487	558,781
Operating margin	1,010,246	921,827	1,026,604	1,115,001	906,238	258,653
Operating profit and loss	543,295	512,113	629,840	698,274	535,250	157,529
Non-operating income and expenses	69,046	44,003	102,567	166,127	144,323	75,347
Profit before tax	612,341	556,116	732,407	864,401	679,573	232,876
Profit and Loss	487,940	444,452	583,651	677,032	538,494	188,753
Loss of closed business units	-	-	-	-	-	-
Net profit (Loss)	487,940	444,452	583,651	677,032	538,494	188,753
Other comprehensive gains and losses of the current period (Net after tax)	(17,043)	(8,744)	(16,197)	50,769	(5,030)	25,830
Total comprehensive profit and loss for the current period	470,897	435,708	567,454	727,801	533,464	214,583
Net profit attributable to the parent company	486,389	442,737	582,520	675,837	541,605	188,384
Net profit attributable to non-controlling equity	1,551	1,715	1,131	1,195	(3,111)	369
Total comprehensive profit and loss attributable to the parent company	469,397	433,893	566,313	726,415	536,553	214,214
Total comprehensive profit and loss attributable to non-controlling Equity	1,500	1,815	1,141	1,386	(3,089)	369
Earnings per share	3.19	2.90	3.82	4.43	3.55	1.23

Note 1： The financial information of each year has been checked and approved by accountants.

Note 2： 2023 was distributed by the resolution of the board of directors, and the resolution of the shareholders meeting is still pending.

Note 3： 2024 quarter report has been reviewed by accountants

3.Condensed consolidated Balance Sheet for the last five years - individual

Unit:NT$ Thousands

Year Item	Year Item	Year Item	Financial information for the	Financial information for the	Financial information for the	last five years
			2019	2020	2021	2022	2023
Current assets			1,974,289	1,631,776	1,763,545	1,563,223	1,398,096
P&P&E			1,020,522	1,007,615	1,023,119	1,004,876	964,716
Intangible assets			22,958	22,317	21,346	21,082	20,261
Other assets			2,747,844	2,792,133	2,776,458	2,890,037	2,918,394
Total assets			5,765,613	5,453,841	5,584,468	5,479,218	5,301,467
Current liabilities		Before distribution	1,360,311	972,822	977,708	673,333	543,179
		After distribution	1,665,608	1,362,076	1,435,654	-	-
Non-current liabilities			1,317,123	1,264,248	1,212,930	1,143,586	1,093,708
Total liabilities		Before distribution	2,677,434	2,237,070	2,190,638	1,816,919	1,636,887
		After distribution	2,982,731	2,626,324	2,648,584	-	-
Equity attributable to owners of the parent company			-	-	-	-	-
Equity			1,526,487	1,526,487	1,526,487	1,526,487	1,526,487
Additional Paid-In Capital			135,568	135,564	135,564	135,564	135,562
Retained earning		Before distribution	1,467,487	1,605,789	1,797,660	2,024,209	2,030,759
		After distribution	1,162,190	1,216,535	1,339,741	-	-
Other Equity			(41,363)	(51,069)	(65,881)	(23,961)	(28,228)
Treasury stock			-	-	-	-	-
Non-control equity			-	-	-	-	-
Total Equity	Before distribution		3,088,179	3,216,771	3,393,830	3,662,299	3,664,580
	After distribution		2,782,882	2,827,517	2,935,884	-	-

Note 1： The financial information of each year has been checked and approved by accountants.

Note 2： The surplus in 2023 was distributed by the resolution of the board of directors, and the resolution of the shareholders meeting is still pending.

4.Condensed consolidated income statement for the last five years - individual

Unit:NT$ Thousands

Condensed consolidated income	statement for the last five years - individual Unit:NT$ Thousands	statement for the last five years - individual Unit:NT$ Thousands	statement for the last five years - individual Unit:NT$ Thousands	statement for the last five years - individual Unit:NT$ Thousands	statement for the last five years - individual Unit:NT$ Thousands
Year Item	Financial information for the last five years
	2019	2020	2021	2022	2023
Operating income	2,471,630	2,298,188	2,498,290	2,430,884	1,995,167
Operating margin	794,338	725,795	879,101	878,283	779,027
Operating profit and loss	473,055	440,890	602,251	576,841	517,660
Non-operating income and expenses	120,138	97,904	114,960	242,742	152,342
Profit before tax	593,193	538,794	717,211	819,583	670,002
Profit and Loss	486,389	442,737	582,520	675,837	541,605
Loss of closed business units	-	-	-	-	-
Net profit (Loss)	486,389	442,737	582,520	675,837	541,605
Other comprehensive gains and losses of the current period (Net after tax)	(16,992)	(8,844)	(16,207)	50,578	(5,052)
Total comprehensive profit and loss for the current period	469,397	433,893	566,313	726,415	536,553
Net profit attributable to f the parent company	486,389	442,737	582,520	675,837	541,605
Net profit attributable to non-controlling equity	-	-	-	-	-
Total comprehensive profit and loss attributable to the parent company	469,397	433,893	566,313	726,415	536,553
Total comprehensive profit and loss attributable to non-controlling Equity	-	-	-	-	-
Earnings per share	3.19	2.90	3.82	4.43	3.55

Note 1： The financial information of each year has been checked and approved by accountants.

Note 2： The surplus in 2023 was distributed by the resolution of the board of directors, and the resolution of the shareholders meeting is still pending.

6.1.2. Names and opinions of certified accountants in the last five years:

Year	Name	Opinions
2019	KPMG Guo, Rou-lan Accountant Yang,Liu-fengAccountant	unqualified opinion
2020	KPMG Guo, Rou-lan Accountant Yang,Liu-fengAccountant	unqualified opinion
2021	KPMG Guo, Rou-lan Accountant Chen,Ying-Ru Accountant	unqualified opinion
2022	KPMG Guo, Rou-lan Accountant Chen,Ying-Ru Accountant	unqualified opinion
2023	KPMG Guo, Rou-lan Accountant Chen,Ying-Ru Accountant	unqualified opinion

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6.2 Financial analysis for the last five years 6.2.1. Consolidated financial analysis

Analysis	Year ratio	Financial analysis in the last five years	Financial analysis in the last five years	Financial analysis in the last five years	Financial analysis in the last five years	Financial analysis in the last five years	2024/01/01 ~ 2024/03/31
		2019	2020	2021	2022	2023
Financial structure (%)	Debt to assets ratio	46.87	41.60	39.81	33.83	31.32	30.82
	The ratio of long-term capital to PP&E	342.24	358.24	368.18	388.67	401.83	421.42
Solvency %	Current ratio	161.04	195.94	211.19	287.86	339.49	345.80
	Quick ratio	111.62	125.16	122.97	163.33	229.75	252.71
	Interest coverage ratio	28.20	27.38	50.21	48.43	29.99	41.39
Managem ent capacity	Accounts receivable turnover (times)	5.33	5.04	5.71	6.37	6.19	6.88
	Days sales in accounts receivable	68.48	72.42	63.92	57.29	58.96	53.05
	Inventory turnover (times)	2.25	2.26	1.98	1.62	1.52	1.86
	Accounts payable turnover (times)	3.31	3.72	3.36	3.60	5.50	6.27
	Average days in sales	162.22	161.50	184.34	225.30	240.13	196.23
	PP&E turnover (times)	2.03	1.93	2.11	2.10	1.74	1.88
	Total assets turnover (times)	0.45	0.44	0.47	0.47	0.40	0.40
Profitabili ty	Return on assets (%)	8.78	8.06	10.57	12.26	10.16	14.02
	Return on equity (%)	15.73	13.95	17.48	19.00	14.57	19.86
	Ratio of net profit before tax to paid-in capital(%)	40.11	36.43	47.98	56.63	44.52	15.26
	Profit ratio (%)	18.28	17.96	21.92	25.62	25.32	33.78
	Earnings per share (yuan)	3.19	2.90	3.82	4.43	3.55	1.23
Cash flow	Cash flow ratio (%)	49.49	48.74	74.40	70.27	144.86	38.47
	Cash flow adequacy ratio (%)	120.96	115.58	112.67	125.78	136.88	136.88
	Cash reinvestment ratio (%)	5.52	3.96	7.33	1.10	5.63	4.35
Leverage	Degree of operating leverage	1.89	1.64	1.27	1.59	1.96	1.11
	Degree of financial leverage	1.04	1.04	1.02	1.03	1.05	1.04
Reasons for changes in various financial ratios in the last two years. (If the difference does not exceed 20%, the analysis is not required.) 1. Quick ratio: Mainly due to the decrease in current liabilities for the current period. 2. Interest coverage ratio: Mainly due to the decrease in Net profit before income tax and the increase in interest expense for the current period. 3. Accounts payable turnover: Mainly due to the decrease in average accounts payables and the decrease in cost of goods sold for the current period. 4. Return on shareholders' equity: Mainly due to the decrease in Net profit for the period and the increase in average net equity for the current period. 5. Ratio of net profit before tax to paid-in capital: Mainly due to the decrease in Net profit for the period for the current period. 6. Cash flow ratio: Mainly due to the increase in Net cash flows from operating activities and the decrease in current liabilities for the current period. 7. Cash reinvestment ratio: Mainly due to the increase in net cash inflow from operating activities and the increase in working capital for the current period. 8. Degree of operatingleverage: Mainlydue to the decrease in Operating profit for the currentperiod.

Accounts payable turnover: Mainly due to the decrease in average accounts payables and the decrease in cost of goods sold for the current period.
Return on shareholders' equity: Mainly due to the decrease in Net profit for the period and the increase in average net equity for the current period.
Ratio of net profit before tax to paid-in capital: Mainly due to the decrease in Net profit for the period for the current period.
Cash flow ratio: Mainly due to the increase in Net cash flows from operating activities and the decrease in current liabilities for the current period.
Cash reinvestment ratio: Mainly due to the increase in net cash inflow from operating activities and the increase in working capital for the current period.

Note 1. Financial ratios are reviewed by accountants.

101

6.2.2. Financial analysis of individual financial statements

Year Analysis ratio	Year Analysis ratio	Financial analysis in the last five years	Financial analysis in the last five years	Financial analysis in the last five years	Financial analysis in the last five years	Financial analysis in the last five years
		2019	2020	2021	2022	2023
Financial structure (%)	Debt to assets ratio	46.44	41.02	39.23	33.16	30.88
	The ratio of long-term capital to PP&E	431.67	444.72	450.27	478.26	493.23
Solvency %	Current ratio	145.14	167.74	180.38	232.16	257.39
	Quick ratio	103.74	108.70	104.31	125.89	169.44
	Interest coverage ratio	28.01	27.04	50.51	46.99	30.45
Management capacity	Accounts receivable turnover (times)	6.56	6.11	6.70	7.79	8.31
	Days sales in accounts receivable	55.64	59.73	54.47	46.85	43.92
	Inventory turnover (times)	3.12	3.07	2.50	2.04	1.90
	Accounts payable turnover (times)	3.47	3.88	3.42	3.72	5.64
	Average days in sales	116.98	118.89	146.00	178.92	192.10
	PP&E turnover (times)	2.41	2.27	2.46	2.40	2.03
	Total assets turnover (times)	0.43	0.42	0.45	0.44	0.38
Profitability	Return on assets (%)	8.91	8.19	10.76	12.47	10.39
	Return on equity (%)	15.86	14.04	17.62	19.16	14.78
	Ratio of net profit before tax to paid-in capital (%)	38.86	35.30	46.98	53.69	43.89
	Profit ratio (%)	19.68	19.26	23.32	27.80	27.15
	Earnings per share (yuan)	3.19	2.90	3.82	4.43	3.55
Cash flow	Cash flow ratio (%)	43.31	52.93	75.34	68.47	141.50
	Cash flow adequacy ratio (%)	118.12	108.60	107.32	122.90	118.55
	Cash reinvestment ratio (%)	3.42	4.33	6.93	0.06	4.45
Leverage	Degree of operating leverage	2.64	2.38	1.95	2.32	2.49
	Degree of financial leverage	1.05	1.05	1.02	1.03	1.05
Reasons for changes in various financial ratios in the last two years. (If the difference does not exceed 20%, the analysis is not required.) 1. Quick ratio: Mainly due to the decrease in current liabilities for the current period. 2. Interest coverage ratio: Mainly due to the decrease in Net profit before income tax and the increase in interest expense for the current period. 3. Accounts payable turnover: Mainly due to the decrease in average accounts payables and the decrease in cost of goods sold for the current period. 4. Return on shareholders' equity: Mainly due to the decrease in Net profit for the period and the increase in average net equity for the current period. 5. Cash flow ratio: Mainly due to the increase in Net cash flows from operating activities and the decrease in current liabilities for the current period. 6. Cash reinvestment ratio: Mainly due to the increase in net cash inflow from operating activities and the increase in workingcapital for the currentperiod.

Interest coverage ratio: Mainly due to the decrease in Net profit before income tax and the increase in interest expense for the current period.
Accounts payable turnover: Mainly due to the decrease in average accounts payables and the decrease in cost of goods sold for the current period.
Return on shareholders' equity: Mainly due to the decrease in Net profit for the period and the increase in average net equity for the current period.
Cash flow ratio: Mainly due to the increase in Net cash flows from operating activities and the decrease in current liabilities for the current period.
Cash reinvestment ratio: Mainly due to the increase in net cash inflow from operating activities and the increase in working capital for the current period.

Note 1. Financial ratios are reviewed by accountants.

102

Key financial ratio calculation formula

Financial structure
(1) Debt to assets ratio = Total liabilities / Total assets
(2) The ratio of long-term capital to property, plant and equipment = (Net shareholders' equity + Non-current liabilities) / Net property, plant and equipment
Solvency
(1) Current ratio = Current assets / Current liabilities
(2) Quick ratio = (Current assets – Inventory - Prepayments) / Current liabilities
(3) Interest coverage ratio = Net profit before income tax and interest expense / Interest expense
Operating ability
(1) Accounts receivable turnover (including accounts receivable and notes receivable derived from business operation) = Net sales / Average accounts receivable (including accounts receivable and notes receivable derived from business operation)
(2) Days sales in accounts receivable = 365 / Accounts receivable turnover
(3) Inventory turnover = Cost of goods sold / Average inventory amount
(4) Accounts payable turnover (including accounts payable and notes payable derived from business operation) turnover = Cost of goods sold / Average accounts payables (including accounts payable and notes payable derived from business operation)
(5) Average days in sales = 365 / Inventory turnover
(6) Property, plant and equipment turnover = Net sales/ Average of net property, plant and equipment
(7) Total assets turnover = Net sales / Average total assets
Profitability
(1) Return on assets = [After-tax profit and loss + Interest expense x (1 - Tax rate)] / Average total assets
(2) Return on shareholders' equity = After-tax profit and loss / Average net equity
(3) Profit ratio = After-tax profit and loss / Net sales
(4) Earnings per share = (Profit (loss) attributable to owners of parent - Preferred stock dividend) / Weighted average stock shares issued
Cash flow
(1) Cash flow ratio = Net cash flows from operating activities / Current liabilities
(2) Cash flow adequacy ratio = Net cash flow from operating activities in the past five years / In the past five years (Capital expenditure + Inventory interest + Cash dividends)
(3) Cash reinvestment ratio = (Net cash flow from operating activities - Cash dividends) / (Property, plant and equipment + Long-term investment + Other assets + Working capital)
Leverage
(1) Degree of operating leverage = (Net operating income - Variable operating costs and expense) / Operating profit
(2) Degree of financial leverage = Operating profit / (Operating profit - Interest expense)
6.3 The Audit Committee’s report of the most recent financial report: (Details on page 115 of Appendix 1)
6.4 The consolidated financial report of the most recent year that has been verified by an accountant: (Details on page 116 of Appendix 2)
6.5 The individual financial report of the most recent year that has been verified by an accountant: (Details on page 175 of Appendix 3)
6.6 In the most recent year and as of the date of publication of the annual report, the company and its affiliated companies, if any financial difficulties occur, should specify its impact on the company’s financial status: None.

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VII. Financial status and financial performance review analysis and risk issues

7.1 Financial status

Financial status
			Unit:NT$Thousands
Year			Difference
Item	2023	2022
			Amount	%

Current assets	1,987,843	2,127,746	(139,903)	(6.58)
PP&E	1,193,209	1,247,284	(54,075)	(4.34)
Intangible assets	20,261	21,082	(821)	(3.89)
Other assets	2,178,845	2,190,887	(12,042)	(0.55)
Total assets	5,380,158	5,586,999	(206,841)	(3.70)
Current liabilities	585,535	739,167	(153,632)	(20.78)
Non-current liabilities	1,099,659	1,150,817	(51,158)	(4.45)
Total liabilities	1,685,194	1,889,984	(204,790)	(10.84)
Equity	1,526,487	1,526,487	-	-
Additional Paid-In Capital	135,562	135,564	(2)	-
Retained surplus	2,030,759	2,024,209	6,550	0.32
Other shareholders' equity	(28,228)	(23,961)	(4,267)	17.81
Non-controlling interests	30,384	34,716	(4,332)	(12.48)
Total shareholders' equity	3,694,964	3,697,015	(2,051)	(0.06)

Note: If the difference does not exceed 20%, the analysis is not required.

Description of major changes:

Decrease in current liabilities: mainly due to the decrease in accounts payable at the end of the period.

104

7.2 Financial Performance

Financial Performance
			Unit:NT$Thousands
Year
			Difference
Item	2023	2022


			Amount	%


Net operating income	2,126,487	2,642,175	(515,688)	(19.52)


Operating costs	1,220,249	1,527,174	(306,925)	(20.10)


Operating margin	906,238	1,115,001	(208,763)	(18.72)


Operating expenses	370,988	416,727	(45,739)	(10.98)


Operating income	535,250	698,274	(163,024)	(23.35)


Non-operating income and expenses	144,323	166,127	(21,804)	(13.12)


Net profit before tax	679,573	864,401	(184,828)	(21.38)


Income tax expense	141,079	187,369	(46,290)	(24.71)


Net profit for the period	538,494	677,032	(138,538)	(20.46)

Other comprehensive gains and
losses for the current period (net after	(5,030)	50,769	(55,799)	(109.91)
tax)
Total comprehensive profit and loss
	533,464	727,801	(194,337)	(26.70)
for the currentperiod

Net profit attributable to owners of
	541,605	675,837	(134,232)	(19.86)
theparent company

Total comprehensive profit and loss
attributable to owners of the parent	536,553	726,415	(189,862)	(26.14)
company

Note: If the difference does not exceed 20%, the analysis is not required.

Description of major changes:

Operating costs: Mainly due to the decrease in operating income in the current period, the relative operating costs decreased accordingly.
Operating income: Mainly due to the decrease in operating income in the current period, the relative operating income decreased accordingly.
Net profit before tax: This is mainly due to the decrease in operating profit in the current period and the increase in net foreign currency exchange losses due to exchange rate fluctuations.
Income tax expense: Mainly due to the decrease in net profit before tax for the current period and the relative decrease in income tax expenses.
Net profit for the period: This is mainly due to the decrease in operating profit in the current period and the increase in net foreign currency exchange losses due to exchange rate fluctuations.
Other comprehensive gains and losses for the current period: Mainly due to exchange rate fluctuations, the increase in exchange losses recognized in the financial statements of foreign operating institutions.
Total comprehensive profit and loss for the current period: Mainly due to the decrease in net operating profit and increase in exchange losses this year.
Total comprehensive profit and loss attributable to owners of the parent company: Mainly due to the decrease in net operating profit and increase in exchange losses this year.

105

7.3 Cash Flow

7.3.1. Analysis of cash liquidity this year:

Unit:NT$ Thousands

				Unit:NT$Thousands	Unit:NT$Thousands
Beginning cash balance A	Annual net cash flow from operating activities B	Annual net cash outflow C	Cash surplus (insufficient) amount A+B-C	Remedial measures for cash shortfall
				Investment plan	Financial management plan
640,366	848,184	603,539	885,011	-	-

Analysis of cash flow situation this year:
(1)Net cash inflow from operating activities was NT 848,184 thousand, mainly due to operating profit and net changes in assets and liabilities related to operating activities.
(2)The net cash outflow from investment activities was NT 13,076 thousand, mainly due to the increase in acquisition of real property, plant and equipment, and prepayments of equipment.
(3)Net cash outflow from financing activities was NT 587,883 thousand, which was mainly due to the distribution of cash dividends and the decrease of short-term and long-term borrowings.
Remedial measures and liquidity analysis for insufficient cash: None.

7.3.2. Analysis of cash liquidity in the coming year:

Unit:NT$ thousands

				Unit:NT$thousands	Unit:NT$thousands
				Remedial measures for cash
	Annual net
		Annual net	Cash surplus
Beginning cash	cash flow from	cash outflow	(insufficient)	shortfall
balance A	operating	C	amount A+B-C	Investment	Financial
	activities B			plan	managementplan

885,011	550,000	600,000	835,011	-	-

Analysis of future annual cash flow situation:
(1) Operating activities: The estimated net cash inflow from operating activities is NT$ 550 million.
(2) Investment activities: Due to the purchase of various sporadic real estate and equipment, it is estimated that the cash outflow from investment activities is NT$ 50 million.
(3) Fund-raising activities: It is estimated that the surplus for the year 2023 will be distributed, resulting in a total cash dividend outflow of 458 million yuan from shareholders, and the repayment of long-term loans this year is about NT$ 50 million. Other financing activities are expected to remain the same as year 2023, and cash outflows from financing activities are expected to be approximately NT$ 550 million.
Remedial measures and liquidity analysis for estimated cash shortage: None.
7.4 The impact of major capital expenditures on financial operations in recent years
1.There were no major capital expenditures in 2023.
2.Impact on financial business: As the company's own funds are still abundant, there is no significant impact.

106

7.5 The reinvestment policy in the most recent year, the main reason for its profit or loss, improvement plan and investment plan for the next year:
1.The company's reinvestment strategy is to expand sales bases to increase market share and expand production bases as the main consideration.
2.Please refer to page 113 for the profit or loss of each reinvested company in the most recent year.
3.Investment plan for the next year: None.

7.6 Risks

7.6.1. The impact of interest rate, exchange rate changes, and inflation on the profit and loss of the company in the most recent year and as of the date of publication of the annual report, and Future response measures.
Market risk refers to the risk of changes in market prices, such as changes in exchange rates and interest rate equity instrument prices, which affect the company's income or the value of financial instruments held. The goal of market risk management is to control the exposure of market risks within an acceptable range and optimize the return on investment.

(1) Exchange rate risk

The company is exposed to exchange rate risks arising from sales, purchases and borrowing transactions that are not denominated in the functional currency of each group company. The functional currencies of the group companies are mainly New Taiwan Dollars, as well as US Dollars, Euros and Renminbi. The main currencies for these transactions are NT Dollar, Euro, U.S. Dollar, Japanese Yen and RMB.

Loan interest is priced in the currency of the principal of the loan. Generally speaking, the currency of the loan is the same as the currency of the cash flow generated by the company's operations, mainly in the New Taiwan dollar, but also in RMB and US dollars. In this case, economic hedging is provided without the need to sign derivatives, so hedging accounting is not adopted.

When short-term imbalances occur in monetary assets and liabilities denominated in other foreign currencies, the company uses real-time exchange rates to buy or sell foreign currencies to ensure that the net exposure remains at an acceptable level.

(2) Interest rate risk

The company’s long-term and short-term borrowings are debts with floating interest rates. Therefore, changes in market interest rates will cause the effective interest rates of long-term and short-term borrowings to change accordingly, which will cause the risk of future cash flow fluctuations. However, the market interest rate does not change much, so the interest rate changes will not generate significant cash flow risk.

The impact of the recent year's inflation on the company's profit and loss and future countermeasures: None.

107

7.6.2. Policies for high-risk, high-leverage investments, fund loans to others, endorsements and derivatives transactions in the most recent year and as of the publication date of the annual report, the main reasons for profit or loss, and future countermeasures:

Based on the prudent business philosophy, the company focuses on the operation of its products in the industry and does not engage in any high-risk or high-leverage investments. Regarding related transactions such as fund loans to others and endorsement guarantees, they are all handled in accordance with the company's "Acquisition or Disposal of Assets Processing Guidelines", "Funds Loan to Others Operation Method", "Endorsement Guarantee Operation Method" and other implementation policies. , In the future, it will also be strictly implemented in accordance with relevant regulations to protect the maximum rights and interests of the company and shareholders.

7.6.3. Future R&D plans and estimated R&D expenses
See page 77 for future R&D plans.
Estimated R&D expenses for further investment: about NT$ 70 million.
7.6.4. The impact of major domestic and foreign policy and legal changes on the company's financial business in the most recent year and as of the date of publication of the annual report and corresponding measures:

The company pays intensive attention to and grasps any policies and laws that may affect the company's operations, and cooperates with the adjustment of the company's internal related systems to meet the requirements of the laws and regulations.

7.6.5. The impact of technological changes and industrial changes on the company’s financial business in the most recent year and as of the date of publication of the annual report and corresponding measures:

The company is a manufacturer of professional electronic components. The changes in technology have enabled the company’s products to increase the level of technology and use. It can provide opportunities for the company to sell and manufacture new products. It shows that changes in technology have no negative impact on the company’s financial business.

The company's products have a wide range of applications, continue to develop new products in line with the market, and work closely with related industries to expand market share. It is expected that there is still room for substantial growth in the future. The company's own funds are abundant, and industrial changes have no negative impact on the company's finances.

7.6.6. The impact of changes in corporate image in the most recent year and up to the date of publication of the annual report on corporate crisis management and corresponding measures: The company has always abided by laws and regulations and fulfilled its social responsibilities, and has not reported any bad corporate image.

108

7.6.7. Expected benefits, possible risks and countermeasures of mergers and acquisitions in the most recent year and up to the date of publication of the annual report:

Currently, the company has no merger-related incidents.

7.6.8. Expected benefits, possible risks and countermeasures of plant expansion in the most recent year and as of the publication date of the annual report: None.
7.6.9. Risks and countermeasures faced by purchase or sales concentration in the most recent year and as of the date of publication of the annual report: None.
7.6.10. In the most recent year and as of the publication date of the annual report, directors, supervisors, or major shareholders holding more than 10% of the shares, the impact, risks and countermeasures of the company's massive transfer or replacement of shares:
The company’s directors, supervisors, or major shareholders holding more than 10% of the company’s shares have very stable holdings of the company’s shares without substantial transfers.
7.6.11. The impact, risks and countermeasures of the company’s operating rights changes in the most recent year and as of the date of publication of the annual report:

At present, the company does not have any changes in its operating rights.

7.6.12. The handling of litigation or non-litigation incidents in the most recent year and as of the publication date of the annual report:
There are no major litigation, non-litigation, or administrative disputes in the company's directors, supervisors, general managers, persons in charge, and major shareholders whose shareholding ratio exceeds 10%.
The company's handling of litigation or non-litigation incidents: None.
7.6.13. Other important risks and corresponding measures in the most recent year and as of the publication date of the annual report: None.
7.7 Other important matters: None.

109

VIII. Special records

8.1 Related information of related companies

8.1.1. Affiliated business merger report
Organization Chart of Affiliated Enterprises

==> picture [688 x 364] intentionally omitted <==

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

ZIPPY TECHNOLOGY
CORP.
100.00% 100.00% 100.00% 100.00% 63.92%
ZIPPY ZIPPY LANDMARK QUAN-FA
ZIPPY USA INC. INTERNATIONAL TECHNOLOGY INTERNATIONAL CORPORATION
HOLDING CO. EUROPE GMBH LTD. COMPANY
100.00% 100.00% 100.00% 100.00%
KOBOT
ZIPPY (Dongguan) ZIPPY (Suzhou) G-BRIM
INTERNATIONAL
Electronics Co., LTD. Electronics Co., LTD. international Inc.
INC
----- End of picture text -----

110

2. Basic information of each affiliated company

Unit:NT$ Thousands

				Unit:NT$Thousands
Company Name	Date of establishment	Address	Paid-in capital	Business item
ZIPPY U.S.A INC	1997.03.03	1 Morgan,Irvine CA92618 USA	US$300	Various micro switch and power supply trading business, etc.
ZIPPY INTERNATIONAL HOLDING LTD.	1997.09.25	P.0 957 0FFSHORE INCORPORATIONS SENTRE,ROAD,TOWN,TORTO LA	US$10,234	Reinvestment business
ZIPPY (Dongguan) Electronics Co., LTD.	1998.12.02	No. 108, Jinchai Road, Niuyang Community, Liaobu Town, Dongguan City	RMB60,008	Production of various switches, power supplies, molds, computer peripherals, computer optical fiber parts and trading,etc.
QUAN-FA Co., Ltd	2000.12.26	No. 45, Xihe 3rd Road, Zhen'an Village, Wujie Township, Yilan County	NT$70,293	Wire and cable manufacturing, electronic component manufacturing, etc.
KOBOT INTERNATIONAL INC.	2001.07.01	1 Morgan,Irvine CA92618 USA	US$500	Leasing company
ZIPPY TECHNOLOGY EUROPE GMBH	2004.03.15	Giesenheide 23,40724 Hilden, GERMANY	EUR$300	Sale of electrical parts, computer accessories, etc.
LANDMARK INTERNATIONAL HOLDING LTD.	2003.12.29	LEVEL 2,LOTEMAU CENTRE VAEA STREET,APIA SAMOA	US$4,425	reinvestment business
G-BRIM international Inc.	2004.01	Room 25011, Genesis, No.666 Xiangcheng Avenue, Xiangcheng District, Suzhou City, Jiangsu Province	US2,500	Mainly sell computer key components, power supplies, precision ceramics, precision molds and key components of network equipment,etc.
ZIPPY (Suzhou) Electronics Co., LTD.	2006.09.27	2310, 2311, Building G, Hualian City Panorama, District 27,	USD1,500	Mainly engaged in electronic products, plastic products, rubber products, hardware products, import and export and related supportingbusinesses, etc.
		Dalang Community, Xin'an Street,
		Bao'an District, Shenzhen, Guangdong,China

Presumed to have control and affiliation with the same shareholder information: None.

111

4. Information on directors, supervisors and general managers of related companies

Unit:Share

			Unit:Share	Unit:Share
Company name	Title	Name or representative	shares
			shares	%
ZIPPY U.S.A INC.	Director	ZIPPY TECHNOLOGY CORP. Representative: CHOU, CHIN-WEN	300,000	100%
	General manager	CHOU, CHIN-WEN
ZIPPY INTERNATIONAL HOLDING LTD.	Director	ZIPPY TECHNOLOGY CORP. Representative: CHOU, CHIN-WEN	10,234,246	100%
	General manager	CHOU, CHIN-WEN
ZIPPY (Dongguan) Electronics Co.,LTD.	Director	ZIPPY INTERNATIONAL HOLDING LTD. Representative: CHOU, CHIN-WEN	-	100%
	General manager	CHOU, CHIN-WEN
QUAN-FA Co., Ltd	Chairman	ZIPPY TECHNOLOGY CORP Representative: KAO, MING-CHUAN	4,492,854	63.92%
	Director	LIN, QING-LONG	1,106,361	15.7%
	Supervisor	HUANG, YUNG-HSIN	-	-
	Director/ General manager	ZHANG, CHUN-JIE	1,106,449	15.7%
KOBOT INTERNATIONAL INC.	Director	ZIPPY INTERNATIONAL HOLDING LTD. Representative: CHOU, CHIN-WEN	-	100%
	General manager	CHOU, CHIN-WEN
ZIPPY TECHNOLOGY EUROPE GMBH	Director	ZIPPY TECHNOLOGY CORP. Representative: CHOU, CHIN-WEN	-	100%
	General manager	KAO, MING-CHUAN
LANDMARK INTERNATIONAL HOLDING LTD.	Director	ZIPPY TECHNOLOGY CORP. Representative: CHOU, CHIN-WEN	4,425,000	100%
	General manager	CHOU, CHIN-WEN
ZIPPY (Suzhou) Electronics Co., LTD.	Director	LANDMARK INTERNATIONAL HOLDING LTD. Representative: CHOU, CHIN-WEN	-	100%
	General manager	CHOU, CHIN-WEN
G-BRIM international Inc.	Director	LANDMARK INTERNATIONAL HOLDING LTD. Representative: KAO,MING-CHUAN	-	100%
	General manager	KAO, MING-CHUAN

112

5. Overview of operations of related companies

Unit:NT$ Thousands

Company Name	Capital	Total assets	Total Liability	Net value	Operating income	Operating profit	Current profit and loss (After tax)	Earnings per share (NT)
ZIPPY U.S.A INC	US$300	302,937	12,038	290,286	379,019	3,836	8,835	-
ZIPPY TECHNOLOGY EUROPE GMBH	EUR300	112,379	43,351	69,027	144,969	8,676	5,740	-
QUAN-FA Co., Ltd	NT$70,293	96,630	12,410	84,219	41,573	(9,749)	(8,623)	-
ZIPPY INTERNATIONAL HOLDING LTD.	US$10,234	299,318	-	299,318	-	(106)	31,252	-
KOBOT INTERNATIONAL INC.	US$500	197,610	69,558	128,052	-	(5,676)	12,772	-
ZIPPY (Dongguan) Electronics Co.,LTD.	RMB60,008	188,733	17,658	171,075	328,339	9,497	18,578	-
LANDMARK INTERNATIONAL HOLDING LTD.	US$4,425	185,310	-	185,310	-	(62)	(2,199)	-
ZIPPY (Suzhou) Electronics Co., LTD.	US$2,500	123,453	44,990	78,463	281,484	(1,840)	(1,319)	-
G-BRIM international Inc.	US$1,500	115,113	9,061	106,052	24,294	(4,812)	(827)	-

8.1.2. Consolidated financial statements of related companies: (Detailed Appendix 2)

113

8.2 In the most recent year and as of the publication date of the annual report, the status of private equity securities: None.
8.3 In the most recent year and as of the publication date of the annual report, the status of the subsidiary holding or disposing of the company’s stock: None.
8.4 Other necessary supplementary explanations: None.
IX. The most recent year and as of the date of publication of the annual report, matters that should be disclosed in accordance with Article 36 of the Securities Exchange Law: None.

114

Appendix 1

ZIPPY TECHNOLOGY CORP.

Audit Committee’s Review Report

The Board of Directors has prepared and submitted to us the Company’s 2023 Business Report, Financial Statements and proposal for profit distribution. The Financial Statements have been audited, certified and issued an audit report by CPA firm of KPMG. The Business Report, Financial Statements and profit distribution proposal have been reviewed and determined to be correct and accurate by the Audit Committee members. According to Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Act, we hereby submit this report.

ZIPPY TECHNOLOGY CORP.

Convener of the Audit Committee: Chou, Chai-Fa Date：March 6, 2024

115

Appendix 2

Representation Letter

The entities that are required to be included in the combined financial statements of Zippy Technology Corp. as of and for the year ended December 31, 2023 under the Criteria Governing the Preparation of Affiliation Reports, Consolidated Business Reports, and Consolidated Financial Statements of Affiliated Enterprises are the same as those included in the consolidated financial statements prepared in conformity with International Financial Reporting Standards No. 10 by the Financial Supervisory Commission, "Consolidated Financial Statements." In addition, the information required to be disclosed in the combined financial statements is included in the consolidated financial statements. Consequently, Zippy Technology Corp. and Subsidiaries do not prepare a separate set of combined financial statements.

Company name: Zippy Technology Corp. Chairman: Chin-Wen Chou Date: March 6, 2024

116

Independent Auditors’ Report

To the Board of Directors of Zippy Technology Corp.:

Opinion

We have audited the consolidated financial statements of Zippy Technology Corp. and its subsidiaries (“the Group”), which comprise the consolidated statement of financial position as of December 31, 2023 and 2022, and the consolidated statement of comprehensive income, changes in equity and cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at December 31, 2023 and 2022, and its consolidated financial performance and its consolidated cash flows for the year ended December 31, 2023 and 2022 in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and with the International Financial Reporting Standards (“IFRSs”), International Accounting Standards (“IASs”), Interpretations developed by the International Financial Reporting Interpretations Committee (“IFRIC”) or the former Standing Interpretations Committee (“SIC”) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Basis for Opinion

We conducted our audit in accordance with the Regulations Governing Auditing and Certification of Financial Statements by Certified Public Accountants and the auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the Certified Public Accountants Code of Professional Ethics in Republic of China (“the Code”), and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis of our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Revenue recognition

Please refer to Note 4(o), and 6(s) for accounting policies and related disclosure information for revenue, respectively.

Description of the key audit matter:

The main business items of the Group are power supplies and micro switches. Sales transactions of the Group are mainly for export. There is uncertainty in the timing of export revenue recognition due to the long delivery period and the risk reward and ownership of the goods. The focus of attention is whether the timing of revenue recognition meets the transaction terms. Therefore, the timing for revenue recognition has been identified as a key audit matter in the current period.

117

How the matter was addressed in our audit:

In relation to the key audit matter above, we have performed certain key audit procedures that included assessing the appropriateness of the accounting policies and the design of related internal control for the timing of revenue recognition to the Group; conducting internal control tests to confirm whether the internal control is effectively implemented; executing the cut-off test for revenue recognition based on the transactions for a period of time before and after the report date.

Other Matter

Zippy Technology Corp. has additionally prepared its parent company only financial statements as of and for the years ended December 31, 2023 and 2022, on which we have issued an unqualified opinion.

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

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with Regulations Governing the Preparation of Financial Reports by Securities Issuers and IFRSs, IASs, interpretation as well as related guidance endorsed by the Financial Supervisory Commission of the Republic of China, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

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

Those charged with governance (including the Audit Committee) are responsible for overseeing the Group’s financial reporting process.

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

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

As part of an audit in accordance with auditing standards generally accepted in the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

118

Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

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

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

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

The engagement partners on the audit resulting in this independent auditors’ report are Rou-Lan Kuo and Ying-Ru Chen.

KPMG

Taipei, Taiwan (Republic of China)

March 6, 2024

Notes to Readers

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

The independent auditors ’ audit report and the accompanying consolidated financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language independent auditors ’ audit report and consolidated financial statements, the Chinese version shall prevail.

119

(ENGLISH TRANSLATION OF CONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN CHINESE)

ZIPPY TECHNOLOGY CORP. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2023 AND 2022

(AMOUNTS EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

2023.12.3	1	2022.12.	2023.12.3	1	2022.12.	31
Amount	％	Amount	Amount	％	Amount	％
$ 885,011) 92,275) 68,700) 19,665) 274,030) 5,500) 89) 603,253) 39,320)	17) 2) 1) - 5) - - 11) 1)	640,366) 92,215) 79,020) 19,411) 370,964) 5,276) - 889,267) 31,227)	$ 13,605) 11,258) 10,187) 158,297) 173,115) 152,491) 1,644) 50,000) 14,938)	- - - 3) 3) 3) - 1) 1)	13,083) 13,809) 11,644) 263,342) 206,456) 167,090) 2,014) 50,000) 11,729)	- - - 5) 4) 3) - 1) -
1,987,843)	37)	2,127,746)	585,535)	11)	739,167)	13)
1,193,209) 9,310) 2,113,147) 20,261) 37,078) 18,870) 440)	22) - 39) 1) 1) - -	1,247,284) 11,679) 2,127,882) 21,082) 34,157) 16,667) 502)	1,108,000) 613) 6) 17,465) 23,575)	20 - - - -	1,108,000) - 1,661) 17,223) 23,933)	20 - - - 1)
			1,099,659)	20)	1,150,817)	21)
			1,685,194)	31)	1,889,984)	34)
			1,526,487) 135,562) 2,030,759) (28,228)	28) 3) 38) (1)	1,526,487) 135,564) 2,024,209) (23,961)	27) 2) 36) -
3,392,315)	63)	3,459,253)

			3,664,580) 30,384)	68 1)	3,662,299) 34,716)	65 1)
			3,694,964)	69	3,697,015)	66
$ 5,380,158)	100)	5,586,999)	$ 5,380,158)	100	5,586,999)	100

The accompanying notes are an integral part of financial statements

120

(ENGLISH TRANSLATION OF CONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN CHINESE) ZIPPY TECHNOLOGY CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022 (AMOUNTS EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

For theyears ended December 31,	For theyears ended December 31,	For theyears ended December 31,	For theyears ended December 31,
2023		％	2022	％
		100) 57)	2,642,175) 1,527,174)	100) 58)
	906,238)	43)	1,115,001)	42)
	79,269) 223,939) 68,239) (459)	4) 11) 3) -	85,612) 262,861) 70,873) (2,619)	3) 10) 3) -
	370,988)	18)	416,727)	16)
	535,250)	25)	698,274)	26)
	19,410) 147,821) 537) (23,445)	1) 7) - (1)	4,325) 138,724) 41,304) (18,226)	- 5) 2) (1)
	44,323)	7)	166,127)	6)
	679,573) 141,079)	32) 7)	864,401) 187,369)	32) 7)
	538,494)	25)	677,032)	25)
	(953) 190)	- -	11,061) (2,212)	- -
	(763)	-	8,849)	-
	(4,267) -	- -	41,920) -	2) -
	(4,267)	-	41,920)	2)
	(5,030)	-	50,769)	2)
		25)	727,801)	27)
		25) -	675,837) 1,195)	25) -
		25)	677,032)	25)
		25) -	726,415) 1,386)	27) -
		25)	727,801)	27)
		3.55) 3.54)		4.43)
				4.41)

The accompanying notes are an integral part of financial statements

121

(ENGLISH TRANSLATION OF CONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN CHINESE) ZIPPY TECHNOLOGY CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022 (AMOUNTS EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

		Equity attributable to owners ofparent	Equity attributable to owners ofparent	Equity attributable to owners ofparent	Equity attributable to owners ofparent			Non- Controlling Interests	Total Equity
Capital Stock	Capital Surplus		Retained Earnings			Other Equity	Total Equity Attributable to Owners of Parent
Share Capital		Legal Reserve	Special Reserve	Unappropriated Retained Earnings	Total	Exchange Differences on Translation of Foreign Financial Statements
	135,564)	798,109)	51,068	948,483)	1,797,660)	(65,881)	3,393,830)	34,344)	3,428,174)
- -	- -	- -	- -	675,837) 8,658)	675,837) 8,658)	- 41,920)	675,837) 50,578)	1,195) 191)	677,032) 50,769)
-	-	-	-	684,495)	684,495)	41,920)	726,415)	1,386)	727,801)
- - - -	- - - -	58,113) - - -	- 14,811) - -	(58,113) (14,811) (457,946) -	- - (457,946) -	- - - -	- - (457,946) -	- - - (1,014)	- - (457,946) (1,014)
1,526,487) - -	135,564) - -	856,222) - -	65,879 - -	1,102,108) 541,605) (785)	2,024,209) 541,605) (785)	(23,961) - (4,267)	3,662,299) 541,605) (5,052)	34,716) (3,111) 22)	3,697,015) 538,494) (5,030)
-	-	-	-	540,820)	540,820)	(4,267)	536,553)	(3,089)	533,464)
- - - - -	- - - (2) -	68,450) - - - -	- (41,919) - - -	(68,450) 41,919) (534,270) - -	- - (534,270) - -	- - - - -	- - (534,270) (2) -	- - - - (1,243)	- - (534,270) (2) (1,243)
	135,562)	924,672)	23,960	1,082,127)	2,030,759)	(28,228)	3,664,580)	30,384)	3,694,964)

The accompanying notes are an integral part of financial statements

122

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) ZIPPY TECHNOLOGY CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022

(AMOUNTS EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Cash flows from operating activities: Profit before tax $ Adjustments: Adjustments to reconcile profit: Depreciation expense Amortization expense Expected credit loss (gain) Interest expense Interest income Loss on disposal of property, plant and equipment Total adjustments to reconcile profit Changes in operating assets and liabilities: Changes in operating assets: Financial assets at fair value through profit or loss, mandatorily measured at fair value Notes receivable Accounts receivable Other receivables Inventories Other current assets Total changes in operating assets Changes in operating liabilities: Contract liabilities Notes payable Accounts payable Other payables Other current liabilities Net defined benefit liabilities, non-current Total changes in operating liabilities Total changes in operating assets and liabilities Total adjustments Cash inflow (outflow) generated from operations Interest received Interest paid Income taxes paid Net cash flows from (used in) operating activities Cash flows from investing activities: Acquisition of financial assets at amortized cost Proceeds from disposal of financial assets at amortized cost Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Decrease in guarantee deposits paid Acquisition of intangible assets Increase in prepayments for business facilities Net cash flows (used in) from investing activities Cash flows from financing activities: Increase (decrease) in short-term borrowings Repayments of long-term borrowings Increase (decrease) in guarantee deposits received Payment of lease liabilities Cash dividends paid Payment of overdue cash dividends Change in non-controlling interests Net cash flows used in (from) financing activities Effect of exchange rate changes on cash and cash equivalents Net (decrease) increase in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period $	2023 679,573) 85,724) 1,049) (459) 23,445) (19,410) (33) 90,316) (1,276) (254) 97,393) 2,617) 286,105) (1,209) 383,376) (2,551) (1,457) (105,045) (27,074) 3,209) (521) (133,439) 249,937) 340,253) 1,019,826) 16,569) (23,282) (164,929) 848,184) - 10,320) (16,243) 142) 62) (228) (7,129) (13,076) - (50,000) (358) (2,010) (534,270) (2) (1,243) (587,883) (2,580) 244,645) 640,366) 885,011)	2022
		864,401) 84,689) 969) (2,619) 18,226) (4,325) 53)
		96,993)
		(7,987) 9,399) 36,069) 8,760) 12,934) 952)
		60,127)
		(4,334) (18,462) (279,834) 12,169) (605) (13,835)
		(304,901)
		(244,774)
		(147,781)
		716,620) 4,183) (17,793) (183,598)
		519,412)
		(79,020) - (19,495) 790) (8) (705) (15,072)
		(113,510)
		(31,283) (50,000) 2,922) (2,062) (457,946) - (1,014)
		(539,383)
		18,971)
		(114,510) 754,876)
		640,366)

The accompanying notes are an integral part of financial statements

123

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) ZIPPY TECHNOLOGY CORP. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(1) Overview

Zippy Technology Corp. (the “Company”) was established on April 25, 1983, which was a limited company. The Group reorganized into a company limited by shares in 1988. The shares of the Group was listed and traded at the ROC Securities Over-the-Counter Trading Center on May 25, 1996. Through the listing application to the Taiwan Stock Exchange in June 2000, the shares of the Group became officially listed and traded on the Taiwan Stock Exchange on September 11, 2000. The Company and its subsidiaries (together referred to as the “Group” and individually as “Group entities”). The Group engages primarily in the designing, manufacturing and trading of micro switches, power supplies. Please refer to Note 14 for details.

(2) Financial Statements Authorization Date and Authorization Process

The consolidated financial statements were authorized for issuance by the Board of Directors on March 6, 2024.

(3) New Standards, Amendments and Interpretations not yet Adopted:

(a) The impact of the International Financial Reporting Standards (“IFRSs”) endorsed by the Financial Supervisory Commission, R.O.C. (“FSC”) which have already been adopted.

The Group has initially adopted the following new amendments, which do not have a significant impact on its consolidated financial statements, from January 1, 2023:

Amendments to IAS 1 “Disclosure of Accounting Policies”
Amendments to IAS 8 “Definition of Accounting Estimates”
Amendments to IAS 12 “Deferred Tax Related to Assets and Liabilities Arising from a Single Transaction”

The Group has initially adopted the following new amendments, which do not have a significant impact on its consolidated financial statements, from May 23, 2023:

Amendments to IAS12 “International Tax Reform – Pillar Two Model Rules”
b) The impact of IFRS issued by IASB but not yet endorsed by the FSC.

The Group assesses that the adoption of the following new amendments, effective for annual period beginning on January 1, 2024, would not have a significant impact on its consolidated financial statements:

Amendments to IAS 1 “Classification of Liabilities as Current or Non-current”
Amendments to IAS 1 “Non-current Liabilities with Covenants”
Amendments to IAS 7 and IFRS 7 “Supplier Finance Arrangements”
Amendments to IFRS16 “Requirements for Sale and Leaseback Transactions”

124

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

ZIPPY TECHNOLOGY CORP. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

The Group expects that adopting the following IFRSs, which IASB issues but not yet endorsed by the FSC, would not have any material impact on its financial statements.

Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets Between an Investor and Its Associate or Joint Venture”
IFRS 17 “Insurance Contracts” and Amendments to IFRS 17 “Insurance Contracts”
Amendments to IAS 21 “Lack of Exchangeability”

(4) Summary of Significant Accounting Policies

The accompanying consolidated financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of, the English and Chinese language consolidated financial statements, the Chinese version shall prevail.

The significant accounting policies presented in the consolidated financial statements are summarized below. Except for the explanation, the following accounting policies were applied consistently throughout the periods presented in the consolidated financial statements.

(a) Statement of compliance

These consolidated annual financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers (hereinafter referred to as “the Regulations”) and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations and SIC Interpretations endorsed by FSC (hereinafter referred to as the IFRSs endorsed by FSC).

(b) Basis of preparation
Basis of measurement

Except for the following significant accounts, the consolidated financial statements have been prepared on a historical cost basis:

1) Financial instruments at fair value through profit or loss are measured at fair value (including derivative financial instruments);
2) The defined benefit liabilities (assets) are measured at fair value of the plan assets less the present value of the defined benefit obligation, limited as explained in Note 4(p).
Functional and presentation currency

The functional currency of each Group entity is determined based on the primary economic environment in which the entity operates. The consolidated financial statements are presented in New Taiwan Dollar, which is the Company’s functional currency. All financial information presented in New Taiwan Dollar has been rounded to the nearest thousand.

125

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) ZIPPY TECHNOLOGY CORP. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(c) Basis of consolidation
Principle of preparation of the consolidated financial statements

The consolidated financial statements comprise the Company and subsidiaries. Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.

The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until the date on which control ceases. Intra group balances and transactions, and any unrealized income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements. The Group attributes the profit or loss and each component of other comprehensive income to the owners of the parent and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance.

The Group prepares consolidated financial statements using uniform accounting policies for like transactions and other events in similar circumstances. Changes in the Group’s ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received will be recognized directly in equity, and the Group will attribute it to the owners of the parent.

List of subsidiaries in the consolidated financial statements

Investor	Name of Subsidiary	Principal activity	Shareholding Ratio	Shareholding Ratio
			2023.12.31	2022.12.31
The Group 〞〞〞〞 ZIPPY International Holding Ltd. 〞 Landmark International Holding Ltd. 〞	ZIPPY USA Inc. ZIPPY International Holding Ltd. QUAN-FA CORPORATION COMPANY ZIPPY Technology Europe Gmbh Landmark International Holding Ltd. Zippy (Dongguan) Electronics Co., Ltd. KOBOT International Inc. Zippy (Suzhou) Electronics Co. , Ltd. G-BRIM International Inc.	Trading in micro switches, power supplies, and computer accessories Reinvestment business Wire and cable manufacturing, electronic component manufacturing Trading in electrical parts and computer accessories Reinvestment business Mainly produce various switches, power supplies, molds, computer peripheral equipment, computer optical fiber parts and sales Leasing Mainly sell computer key components, power supplies, precision ceramics, precision molds and key components of network equipment Mainly engaged in electronic products, plastic products, rubber products, hardware products, import and export and related supporting businesses, etc.	100.00% 100.00% 63.92% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%	100.00% 100.00% 63.92% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%

Subsidiaries excluded from the consolidated financial statements: None.

126

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) ZIPPY TECHNOLOGY CORP. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(d) Foreign currencies
Foreign currency transactions

Transactions in foreign currencies are translated into the respective functional currencies of Group entities at the exchange rates at the dates of the transactions. At the end of each subsequent reporting period, monetary items denominated in foreign currencies are translated into the functional currencies using the exchange rate at that date. Non-monetary items denominated in foreign currencies that are measured at fair value are translated into the functional currencies using the exchange rate at the date that the fair value was determined. Nonmonetary items denominated in foreign currencies that are measured based on historical cost are translated using the exchange rate at the date of the transaction.

Exchange differences are generally recognized in profit or loss, except for those differences relating to the following, which are recognized in other comprehensive income:

1) an investment in equity securities designated as at fair value through other comprehensive income;
2) a financial liability designated as a hedge of the net investment in a foreign operation to the extent that the hedge is effective; or
3) qualifying cash flow hedges to the extent that the hedges are effective.

2. Foreign operations

The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated into the presentation currency at the exchange rates at the reporting date. The income and expenses of foreign operations are translated into the presentation currency at the average exchange rate. Exchange differences are recognized in other comprehensive income.

When a foreign operation is disposed of such that control, significant influence, or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal. When the Group disposes of only part of its investment in an associate or joint venture that includes a foreign operation while retaining significant influence or joint control, the relevant proportion of the cumulative amount is reclassified to profit or loss.

When the settlement of a monetary receivable from or payable to a foreign operation is neither planned nor likely to occur in the foreseeable future, exchange differences arising from such a monetary item that are considered to form part of the net investment in the foreign operation are recognized in other comprehensive income.

(e) Classification of current and non-current assets and liabilities

An asset is classified as current under one of the following criteria, and all other assets are classified as non-current.

It is expected to be realized, or intended to be sold or consumed, in the normal operating cycle;
It is held primarily for the purpose of trading;

127

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) ZIPPY TECHNOLOGY CORP. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

It is expected to be realized within twelve months after the reporting period; or
The asset is cash or a cash equivalent (as defined in IAS 7) unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

A liability is classified as current under one of the following criteria, and all other liabilities are classified as non-current.

An entity shall classify a liability as current when:

It is expected to be settled in the normal operating cycle;
It is held primarily for the purpose of trading;
It is due to be settled within twelve months after the reporting period; or
The Group does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting period. Terms of a liability that could, at the option of the counterparty, result in its settlement by issuing equity instruments do not affect its classification.

(f) Cash and cash equivalents

Cash comprises cash on hand and demand deposits. Cash equivalents are short term, highly liquid investments that are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value. Time deposits which meet the above definition and are held for the purpose of meeting short term cash commitments rather than for investment or other purposes should be recognized as cash equivalents.

(g) Financial instruments

Trade receivables are initially recognized when they are originated. All other financial assets and financial liabilities are initially recognized when the Group becomes a party to the contractual provisions of the instrument. A financial asset or financial liability is initially measured at fair value plus, for an item not at fair value through profit or loss (FVTPL), transaction costs that are directly attributable to its acquisition or issue.

Financial assets

All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis.

On initial recognition, a financial asset is classified as measured at: amortized cost and FVTPL. Financial assets are not reclassified subsequent to their initial recognition unless the Group changes its business model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model.

1) Financial assets measured at amortized cost

A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as at FVTPL:

‧it is held within a business model whose objective is to hold assets to collect contractual cash

128

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) ZIPPY TECHNOLOGY CORP. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

flows; and

‧its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

These assets are subsequently measured at amortized cost, which is the amount at which the financial asset is measured at initial recognition, plus/minus, the cumulative amortization using the effective interest method, adjusted for any loss allowance. Interest income, foreign exchange gains and losses, as well as impairment, are recognized in profit or loss. Any gain or loss on derecognition is recognized in profit or loss.

2) Fair value through profit or loss (FVTPL)

All financial assets not classified as amortized cost described as above are measured at FVTPL, including derivative financial assets. The Group intends to sell accounts receivable immediately or in the near future, which is measured at FVTPL, but is included under accounts receivable. On initial recognition, the Group may irrevocably designate a financial asset, which meets the requirements to be measured at amortized cost or at FVOCI, as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognized in profit or loss.

3) Impairment of financial assets

The Group recognizes loss allowances for expected credit losses (ECL) on financial assets measured at amortized cost (including cash and cash equivalents, amortized costs, notes and trade receivables, other receivable and guarantee deposit paid).

The Group measures loss allowances at an amount equal to lifetime ECL, except for the following which are measured as 12-month ECL:

‧debt securities that are determined to have low credit risk at the reporting date; and
‧other debt securities and bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition.

Loss allowance for trade receivables and contract assets are always measured at an amount equal to lifetime ECL.

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECL, the Group considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis based on the Group’s historical experience and informed credit assessment as well as forward-looking information.

Lifetime ECL are the ECL that result from all possible default events over the expected life of a financial instrument.

12-month ECL are the portion of ECL that result from default events that are possible within the 12 month after the reporting date (or a shorter period if the expected life of the instrument is less

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ZIPPY TECHNOLOGY CORP. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

than 12 months).

The maximum period considered when estimating ECL is the maximum contractual period over which the Group is exposed to credit risk.

ECL are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e the difference between the cash flows due to the Group in accordance with the contract and the cash flows that the Group expects to receive). ECL are discounted at the effective interest rate of the financial asset.

At each reporting date, the Group assesses whether financial assets carried at amortized cost is credit-impaired. A financial asset is ‘credit-impaired’ when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. Evidence that a financial assets is credit-impaired includes the following observable data:

‧significant financial difficulty of the borrower or issuer;
‧a breach of contract such as a default;
‧the lender of the borrower, for economic or contractual reasons relating to the borrower's financial difficulty, having granted to the borrower a concession that the lender would not otherwise consider;
‧it is probable that the borrower will enter bankruptcy or other financial reorganization; or
‧the disappearance of an active market for a security because of financial difficulties.

Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the assets.

The gross carrying amount of a financial asset is written off when the Group has no reasonable expectations of recovering a financial asset in its entirety or a portion thereof. For corporate customers, the Group individually makes an assessment with respect to the timing and amount of write-off based on whether there is a reasonable expectation of recovery. The Group expects no significant recovery from the amount written off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Group’s procedures for recovery of amounts due.

4) Derecognition of financial assets

The Group derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Group neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.

Financial liabilities and equity instruments
1) Financial liabilities

Financial liabilities are classified as measured at amortized cost.

Other financial liabilities are subsequently measured at amortized cost using the effective

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

interest method. Interest expense and foreign exchange gains and losses are recognized in profit or loss. Any gain or loss on derecognition is also recognized in profit or loss.

2) Derecognition of financial liabilities

The Group derecognizes a financial liability when its contractual obligations are discharged or cancelled, or expire. The Group also derecognizes a financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognized at fair value.

On derecognition of a financial liability, the difference between the carrying amount of a financial liability extinguished and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognized in profit or loss.

3) Offsetting of financial assets and liabilities

Financial assets and financial liabilities are offset and the net amount presented in the statement of balance sheet when, and only when, the Group currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realize the asset and settle the liability simultaneously.

(h) Inventories

Inventories are measured at the lower of cost and net realizable value. The cost of inventories is based on the weighted average method, and includes expenditure incurred in acquiring the inventories, production or conversion costs and other costs incurred in bringing them to their existing location and condition. In the case of manufactured inventories and work in progress, cost includes an appropriate share of production overheads based on normal operating capacity.

Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.

(i) Investment Property

Investment property is property held either to earn rental income or for capital appreciation or for both, but not for sale in the ordinary course of business, use in the production or supply of goods or services, or for administrative purposes. Investment property is measured at cost on initial recognition, and subsequently at cost, less accumulated depreciation and accumulated impairment losses. Depreciation expense is calculated based on the depreciation method, useful life, and residual value which are the same as those adopted for property, plant and equipment.

Any gain or loss on disposal of an investment property (calculated as the difference between the net proceeds from disposal and the carrying amount) is recognized in profit or loss.

Rental income from investment property is recognized as other revenue on a straight-line basis over the term of the lease. Lease incentives granted are recognized as an integral part of the total rental income, over the term of the lease.

A property is reclassified to property, plant, and equipment at its carrying amount when the use of the property changes from owner occupied to property, plant, and equipment.

(j) Property, plant, and equipment

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(English Translation of Consolidated Financial Statements Originally Issued in Chinese) ZIPPY TECHNOLOGY CORP. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Recognition and measurement

Items of property, plant and equipment are measured at cost, which includes capitalized borrowing costs, less accumulated depreciation and any accumulated impairment losses.

If significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

Any gain or loss on disposal of an item of property, plant and equipment is recognized in profit or loss.

Subsequent expenditure

Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with the expenditure will flow to the Group.

Depreciation

Depreciation is calculated on the cost of an asset less its residual value and is recognized in profit or loss on a straightline basis over the estimated useful lives of each component of an item of property, plant and equipment.

Land is not depreciated.

The estimated useful lives of property, plant and equipment for current and comparative periods are as follows:

are as follows:
Buildings	5 ~ 55 years
Machinery	1 ~ 10 years
Transportation equipment	4 ~07 years
Furniture and office facilities	3 ~ 15 years
Other equipment	2 ~ 39 years

Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

Reclassification to investment property

A property is reclassified to investment property at its carrying amount when the use of the property changes from owner occupied to investment property.

(k) Leases

At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

(i) As a leasee

The Group recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be reliably determined, the Group’s incremental borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rate.

Lease payments included in the measurement of the lease liability comprise the following:

－ fixed payments, including in-substance fixed payments;
－ variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;
－
－
amounts expected to be payable under a residual value guarantee; and
payments for purchase or termination options that are reasonably certain to be exercised.

The lease liability is measured at amortized cost using the effective interest method. It is remeasured when:

－
there is a change in future lease payments arising from the change in an index or rate; or
－ there is a change in the Group’s estimate of the amount expected to be payable under a residual value guarantee; or
－
there is a change in the lease term resulting from a change of its assessment on whether it will exercise an option to purchase the underlying asset; or
－ there is a change of its assessment on whether it will exercise a purchase, extension or termination option; or
－
there is any lease modifications

When the lease liability is remeasured, other than lease modifications, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or in profit and loss if the carrying amount of the right-of-use asset has been reduced to zero.

When the lease liability is remeasured to reflect the partial or full termination of the lease for lease modifications that decrease the scope of the lease, the Group accounts for the remeasurement of the lease liability by decreasing the carrying amount of the right-of-use asset to reflect the partial or full termination of the lease, and recognize in profit or loss any gain or loss relating to the partial or full termination of the lease.

The Group presents right-of-use assets that do not meet the definition of investment properties and lease liabilities as a separate line item respectively in the statement of financial position.

For a contract that contains lease components and non-lease components, the Group allocates

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

the consideration in the contract to each lease component on the basis of its relative stand-alone price. Only for a lease of land and building, the Group elects not to separate non-lease components from lease components, and instead account for each lease component and any associated non-lease components as a single lease component.

The Group has elected not to recognize right-of-use assets and lease liabilities for short-term leases of parking space and photocopying equipment rental that have a lease term of 12 months or less and leases of low-value assets, including other equipment. The Group recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

(ii) As a leasor

When the Group acts as a lessor, it determines at lease commencement whether each lease is a finance lease or an operating lease. To classify each lease, the Group makes an overall assessment of whether the lease transfers to the lessee substantially all of the risks and rewards of ownership incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then the lease is an operating lease. As part of this assessment, the Group considers certain indicators such as whether the lease is for the major part of the economic life of the asset.

For a contract that contains lease components and non-lease components, the Group uses IFRS 15 to allocate the consideration in the contract.

(l) Intangible assets

Recognition and measurement

Expenditure on research activities is recognized in profit or loss as incurred.

Development expenditure is capitalized only if the expenditure can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable and the Group intends to, and has sufficient resources to, complete development and to use or sell the asset. Otherwise, it is recognized in profit or loss as incurred. Subsequent to initial recognition, development expenditure is measured at cost, less accumulated amortization and any accumulated impairment losses.

Other intangible assets, which are acquired by the Group and have finite useful lives, are measured at cost less accumulated amortization and any accumulated impairment losses.

Subsequent expenditure

Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure, including expenditure on internally generated goodwill and brands, is recognized in profit or loss as incurred.

Amortization

Amortization is calculated over the cost of the asset, less its residual value, and is recognized in profit or loss on a straight-line basis over the estimated useful lives of intangible assets.

The estimated useful lives for current and comparative periods are as follows:

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(English Translation of Consolidated Financial Statements Originally Issued in Chinese) ZIPPY TECHNOLOGY CORP. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Computer software cost 5 ~10 years Capitalized development cost 2 years

Amortization methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

(m) Impairment of non-financial assets

At each reporting date, the Group reviews the carrying amounts of its non-financial assets (other than inventories, deferred tax assets, and investment property measured at fair value) to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated.

For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or CGUs.

The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU.

An impairment loss is recognized if the carrying amount of an asset or CGU exceeds its recoverable amount.

Impairment losses are recognized in profit or loss. They are allocated first to reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other assets in the CGU on a pro rata basis.

For other assets, an impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.

(n) Provisions

A provision is recognized if, as a result of a past event, the Group has a present obligation that can be estimated reliably, and it is probably that an outflow of economic benefits will be required to settle the obligation.

(o) Revenue
Revenue from contracts with customers

Revenue is measured based on the consideration to which the Group expects to be entitled in exchange for transferring goods or services to a customer. The Group recognizes revenue when it satisfies a performance obligation by transferring control of a good or a service to a customer. The accounting policies for the Group’s main types of revenue are explained below.

1) Sale of goods – power supplies and micro switch

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(English Translation of Consolidated Financial Statements Originally Issued in Chinese) ZIPPY TECHNOLOGY CORP. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

The Group recognizes revenue when control of the products has transferred, being when the products are delivered to the customer, the customer has full discretion over the channel and price to sell the products, and there is no unfulfilled obligation that could affect the customer’s acceptance of the products. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customer, and either the customer has accepted the products in accordance with the sales contract, the acceptance provisions have lapsed, or the Group has objective evidence that all criteria for acceptance have been satisfied.

A receivable is recognized when the goods are delivered as this is the point in time that the Group has a right to an amount of consideration that is unconditional.

2) Financing components

The Group does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. As a consequence, the group does not adjust any of the transaction prices for the time value of money.

(p) Employee benefits

1. Defined contribution plans

Obligations for contributions to defined contribution plans are expensed as the related service is provided.

2. Defined benefit plans

The Group’s net obligation in respect of defined benefit plans is calculated separately for each the plan by estimating the amount of future benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets.

The calculation of defined benefit obligations is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a potential asset for the Group, the recognized asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. To calculate the present value of economic benefits, consideration is given to any applicable minimum funding requirements.

Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognized immediately in other comprehensive income, and accumulated in retained earnings within equity. The Group determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined benefit liability (asset). Net interest expense and other expenses related to defined benefit plans are recognized in profit or loss.

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(English Translation of Consolidated Financial Statements Originally Issued in Chinese) ZIPPY TECHNOLOGY CORP. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

loss. The Group recognizes gains and losses on the settlement of a defined benefit plan when the settlement occurs.

Short-term employee benefits

Short-term employee benefits are expensed as the related service is provided. A liability is recognized for the amount expected to be paid if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

(q) Income taxes

Income taxes comprise current taxes and deferred taxes. Except for expenses related to business combinations or recognized directly in equity or other comprehensive income, all current and deferred taxes are recognized in profit or loss.

Current taxes comprise the expected tax payables or receivables on the taxable profits (losses) for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax payables or receivables are the best estimate of the tax amount expected to be paid or received that reflects uncertainty related to income taxes, if any. It is measured using tax rates enacted or substantively enacted at the reporting date.

Deferred taxes arise due to temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their respective tax bases. Deferred taxes are recognized except for the following:

temporary differences on the initial recognition of assets and liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profits (losses) at the time of the transaction;
temporary differences related to investments in subsidiaries, associates and joint arrangements to the extent that the Group is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future; and
taxable temporary differences arising on the initial recognition of goodwill.

Deferred tax assets are recognized for the carry forward of unused tax losses, unused tax credits, and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date, and are reduced to the extent that it is no longer probable that the related tax benefits will be realized; such reductions are reversed when the probability of future taxable profits improves.

Deferred taxes are measured at tax rates that are expected to be applied to temporary differences when they reserve, using tax rates enacted or substantively enacted at the reporting date.

Deferred tax assets and liabilities are offset if the following criteria are met:

the Group has a legally enforceable right to set off current tax assets against current tax liabilities; and

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(English Translation of Consolidated Financial Statements Originally Issued in Chinese) ZIPPY TECHNOLOGY CORP. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on either:
1) the same taxable entity; or
2) different taxable entities which intend to settle current tax assets and liabilities on a net basis, or to realize the assets and liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.

(r) Earnings per share

The Group discloses the Company’s basic and diluted earnings per share attributable to ordinary equity holders of the Company. The calculation of basic earnings per share is based on the profit attributable to the ordinary shareholders of the Company divided by the weighted-average number of ordinary shares outstanding. The calculation of diluted earnings per share is based on the profit attributable to ordinary shareholders of the Company, divided by the weighted-average number of ordinary shares outstanding after adjustment for the effects of all dilutive potential ordinary shares, such as convertible bonds and employee compensation.

(s) Operating segments

An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the Group). Operating results of the operating segment are regularly reviewed by the Group’s chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance. Each operating segment consists of standalone financial information.

(5) Significant Accounting Judgments, Estimation, Assumptions, and Sources of Estimation Uncertainty

The preparation of the consolidated financial statements in conformity with the Regulations and the IFRSs endorsed by the FSC requires management to make judgments, estimates, and assumptions that affect the application of the accounting policies and the reported amount of assets, liabilities, income, and expenses. Actual results may differ from these estimates.

The management continues to monitor the accounting estimates and assumptions. The management recognizes any changes in accounting estimates during the period and the impact of those changes in accounting estimates in the next period.

The Group does not have any accounting policies which involve significant judgment which have significant influence to the annual financial statements.

Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment within the next financial year and reflection from the impact of the new crown virus epidemic is as follows:

(a) Loss allowance for Accounts receivable

Loss allowance of accounts receivable for the Group is estimated based on the assumptions of default risk and expected loss rate. The Group considers historical experience, current market conditions and

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(English Translation of Consolidated Financial Statements Originally Issued in Chinese) ZIPPY TECHNOLOGY CORP. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

forward-looking estimates on each reporting day to determine the assumptions and input values to be used when calculating impairments. Refer to note 6(d) for further description of related assumptions and input values.

(b) Valuation of inventories

As inventories are stated at the lower of cost or net realizable value, the Group estimates the net realizable value of inventories for obsolescence and unmarketable items at the end of the reporting period and then writes down the cost of inventories to net realizable value. The net realizable value of the inventory is mainly determined based on assumptions as to future demand within a specific time horizon. Due to the rapid industrial transformation, there may be significant changes in the net realizable value of inventories. Refer to note 6(f) for further description of the valuation of inventories.

(6) Explanation to Significant Accounts

(a) Cash and cash equivalents

Cash $ Checking deposits Demand deposits Time deposits Cash and cash equivalents in statement of cash flows $	2023.12.31	2022.12.31
	604 3,541 292,274 588,592	458 3,172 432,476 204,260
	885,011	640,366

Refer to Note 6(v) for the currency risk of the financial assets of the Group.

(b) Financial assets and liabilities at fair value through profit or loss
Financial assets and liabilities at fair value through profit or loss

Mandatorily measured at fair value through profit or loss - Beneficiary certificates $	2023.12.31 92,275	2022.12.31
		92,215

1) Refer to Note 6(v) for the credit risks exposure of the financial instrument.

2) As of December 31, 2023 and 2022, the aforesaid financial assets were not pledged as collateral.

Time deposits $	2023.12.31	2022.12.31
	68,700	79,020

The Group has assessed that these financial assets are held to maturity to collect contractual cash flows, which consist solely of principal receivables and interest on the principal amount outstanding.

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(English Translation of Consolidated Financial Statements Originally Issued in Chinese) ZIPPY TECHNOLOGY CORP. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Therefore, these investments were classified as financial assets at amortized cost.

As of December 31, 2023, and 2022, the Group held domestic time deposits, with average interest rates of 1.10% and 0.89%, maturing in October 2024 and October 2023, respectively.

(d) Notes and accounts receivables

Notes receivable $ Accounts receivable Less: Loss allowance $	2023.12.31	2022.12.31
	19,802 275,035 (1,142)	19,548 372,427 (1,600)
	293,695	390,375

The Group applies the simplified approach to provide for its expected credit losses, i.e. the use of lifetime expected loss provision for all receivables. To measure the expected credit losses, trade receivables have been grouped based on shared credit risk characteristics and the days past due, as well as incorporated forward looking information, including macroeconomic and relevant industry information. The loss allowance provisions in Taiwan and Mainland China were determined as follows:

	2023.12.31
Gross carrying amount	Weighted- average	Loss allowance provision
	0.30% 19.60%	683 2,461
		3,144

Note: as of the end of February 29, 2024, the amount that received by the Company is $12,555.

	2022.12.31
Gross carrying amount	Weighted- average	Loss allowance provision
	0.30% 22.71%	852 4,628
		5,480

The loss allowance provisions in other foreign regions were determined as follows:

	2023.12.31
Gross carrying amount	Weighted- average	Loss allowance provision
	0.30% 0.22%~19.60%	102 40
		142

140

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ZIPPY TECHNOLOGY CORP. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

	2021.12.31
Gross carrying amount	Weighted- average	Loss allowance provision
	0.30% 0.22%~0.69%	175 64
		239

The movement in the allowance for notes and accounts receivable was as follows:

Balance at January 1, 2023 and 2022 $ Impairment losses (reversed) recognized Effect of movements in exchange rate Balance at December 31, 2023 and 2022 $	For the years ended December 31, 2023 2022 1,600) 4,198) (459) (2,619) 1)) 21)) 1,142) 1,600)	For the years ended December 31, 2023 2022 1,600) 4,198) (459) (2,619) 1)) 21)) 1,142) 1,600)
		2022
		4,198) (2,619) 21))
		1,600)

As of December 31, 2023 and 2022, none of the receivables above are pledged as collateral for loans and borrowings.

(d) Other receivables

Other receivables $ None of other receivables are past due.	2023.12.31	2022.12.31
	5,500	5,276

Please refer to Note 6(v) for further credit risk information.

(e) Inventories

Finished goods $ Work in process Raw materials Materials and supplies in transit $	2023.12.31	2022.12.31
	95,226 153,903 341,517 12,607	163,308 222,558 490,525 12,876
	603,253	889,267

For the years ended December 31, 2023 and 2022, the write-down of inventories amounted to $8,024 and $12,332, which is recognized in operating cost, due to the net realizable value of inventories is lower than the cost.

As of December 31, 2023 and 2022, the aforesaid inventories were not pledged as collateral.

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(English Translation of Consolidated Financial Statements Originally Issued in Chinese) ZIPPY TECHNOLOGY CORP. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(f) Property, plant and equipment

The cost, depreciation, and impairment of the property, plant and equipment of the Group for the years ended December 31, 2023 and 2022 were as follows:

Land	Building and construction	Machinery and equipment	Office equipment	Other facilities	Total
$ 753,342 - - - 585 $ 753,927 $ 746,923 - - - 6,419 $ 753,342 $ - - - - $ - $ - - - - $ - $ 753,927 $ 746,923 $ 753,342	518,020 - - (456) (1,506)	371,404 4,261 4,837 - (943)	59,127 858 - (347) (68)	281,742 4,694 47 (1,935) (446)	1,983,635 9,813 4,884 (2,738) (2,378)
	516,058	379,559	59,570	284,102	1,993,216
	506,788 - - - 11,232	358,728 6,382 8,629 (3,173) 838	54,154 3,901 1,007 (920) 985	258,025 6,804 11,303 (12) 5,622	1,924,618 17,087 20,939 (4,105) 25,096
	518,020	371,404	59,127	281,742	1,983,635
	246,067 15,054 (456) (2,018)	213,940 31,742 - (383)	44,569 4,828 (342) (55)	231,775 17,346 (1,831) (229)	736,351 68,970 (2,629) (2,685)
	258,647	245,299	49,000	247,061	800,007
	226,832 15,241 - 3,994	184,678 31,335 (2,347) 274	40,232 4,359 (905) 883	209,665 16,918 (10) 5,202	661,407 67,853 (3,262) 10,353
	246,067	213,940	44,569	231,775	736,351
	257,411	132,260	10,570	37,041	1,193,209
	279,956	174,050	13,922	48,360	1,263,211
	271,953	157,464	14,558	49,967	1,247,284

As of December 31, 2023 and 2022, the property, plant and equipment were pledged as collateral, please refer to Note 8.

142

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

ZIPPY TECHNOLOGY CORP. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(g) Right-of-use assets

The Group leases many assets including land, buildings and construction. Information about leases for which the Group as a lessee is presented below:

Land Cost: Balance as of January 1, 2023 $ 9,064 Deduction - Effect of movements in exchange rate (172) Balance as of December 31, 2023 $ 8,892 Balance as of January 1, 2022 $ 8,907 Additions - Effect of movements in exchange rate 157 Balance as of December 31, 2022 $ 9,064 Accumulated depreciation and impairment losses: Balance as of January 1, 2023 $ 989 Depreciation for the year 246 Deduction - Effect of movements in exchange rate (22) Balance as of December 31, 2023 $ 1,213 Balance as of January 1, 2022 $ 729 Depreciation for the year 247 Effect of movements in exchange rate 13 Balance as of December 31, 2021 $ 989 Carrying amounts: Balance as of December 31, 2023 $ 7,679 Balance as of January 1, 2022 $ 8,178 Balance as of December 31, 2022 $ 8,075	Land	Building and construction	Total
		9,462 (976) (47)	18,526 (976) (219)
		8,439	17,331
		9,214 195 53	18,121 195 210
		9,462	18,526
		5,858 1,958 (976) (32)	6,847 2,204 (976) (54)
		6,808	8,021
		3,776 2,072 10	4,505 2,319 23
		5,858	6,847
		1,631	9,310
		5,438	13,616
		3,604	11,679

143

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) ZIPPY TECHNOLOGY CORP. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(h) Investment property

Investment property includes its own assets held by the Group. The original non-removable period of leased investment property is one to four years, and some lease contracts stipulate that the lessee has the option to extend the period upon expiration.

The rental income of leased investment property is a fixed amount.

		Own	assets
		Land and	Building and
		improvement	construction		Total
Cost or deemed cost:
Balance as of January 1, 2023	$	1,799,575	502,032		2,301,607
Effect of movements in exchange rate		35	(1,430)		(1,395)
Balance as of December 31, 2023	$	1,799,610	500,602		2,300,212
Balance as of January 1, 2022	$	1,795,609	496,210		2,291,819
Effect of movements in exchange rate		3,966	5,822		9,788
Balance as of December 31, 2022	$	1,799,575	502,032		2,301,607
Accumulated depreciation and
impairment losses:
Balance as of January 1, 2023	$	-	173,725		173,725
Depreciation for the year		-	14,550		14,550
Effect of movements in exchange rate		-	(1,210)		(1,210)
Balance as of December 31, 2023	$	-	187,065		187,065
Balance as of January 1, 2022	$	-	157,116		157,116
Depreciation for the year		-	14,517		14,517
Effect of movements in exchange rate		-	2,092		2,092
Balance as of December 31, 2022	$	-	173,725		173,725
Carrying amounts:
Balance as of December 31, 2023	$	1,799,610	313,537		2,113,147
Balance as of January 1, 2022	$	1,795,609	339,094		2,134,703
Balance as of December 31, 2022	$	1,799,575	328,307		2,127,882
Fair value:
Balance as of December 31, 2023				$	2,954,877
Balance as of December 31, 2022				$	2,867,164

144

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) ZIPPY TECHNOLOGY CORP. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Investment property includes several commercial properties leased to others. Each lease contract includes the original non-cancellable lease term of one year, and the subsequent lease term is negotiated with the lessee, and no contingent rent is collected. For relevant information, please attach Notes 6 (n) and 6 (u).

The fair value of the Group's investment property is based on the evaluation of independent evaluators. The evaluation is based on market value.

For the year ended December 31, 2023 and 2022, the direct operating expenses incurred by the Group's investment property that generated rental income were $3,768 and $2,685, respectively.

Please refer to Note 8 for details of the investment property pledged as collateral as of December 31, 2023 and 2022.

(i) Intangible assets

The costs of intangible assets and amortization of the Group for the years ended December 31, 2023 and 2022 were as follows:

Software Cost: Balance as of January 1, 2023 $ 20,745 Additions 228 Effect of movements in exchange rate 239 Balance as of December 31, 2023 $ 21,212 Balance as of January 1, 2022 $ 19,790 Additions 705 Effect of movements in exchange rate 250 Balance as of December 31, 2022 $ 20,745 Accumulated amortization and impairment losses: Balance as of January 1, 2023 $ 18,711 Amortization for the year 1,049 Effect of movements in exchange rate 239 Balance as of December 31, 2023 $ 19,999 Balance as of January 1, 2022 $ 17,492 Amortization for the year 969 Effect of movements in exchange rate 250 Balance as of December 31, 2022 $ 18,711	Software	Other intangible assets	Total
		20,048 - -	40,793 228 239
		20,048	41,260
		20,048 - -	39,838 705 250
		20,048	40,793
		1,000 - -	19,711 1,049 239
		1,000	20,999
		1,000 - -	18,492 969 250
		1,000	19,711

145

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

ZIPPY TECHNOLOGY CORP. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Software Carrying amounts: Balance as of December 31, 2023 $ 1,213 Balance as of January 1, 2022 $ 2,298 Balance as of December 31, 2022 $ 2,034	Software	Other intangible assets	Total
		19,048	20,261
		19,048	21,346
		19,048	21,082

The amortization of intangible assets is respectively included in the statement of comprehensive income:

	income:
			For the years ended December		31,
			2023	2022
	Operating expenses	$		1,049	969
(j)	Short-term borrowings

The significant details of short-term borrowings were as follows:

2023.12.31 Unsecured bank loans $ 13,605 Unused credit line $ 2,227,041 Interest Rate 4.90%	2022.12.31
	13,083
	2,189,739
	3.34%

Please refer to Note 8 for details of the related assets pledged as collateral.

(k) Long-term borrowings

The significant terms and conditions of long-term borrowings were as follows:

	2023.12.31	2023.12.31
Currency	Interest Rate		Amount
TWD

Currency	Interest Rate	Maturity Date Amount 2028.03.08 $ 1,158,000 50,000 $ 1,108,000 $ -	Amount
TWD	1.11%~1.74%

146

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) ZIPPY TECHNOLOGY CORP. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Please refer to Note 8 for details of the related assets pledged as collateral.

Under credit/loan agreements, the Group shall maintain certain consolidated financial ratios on balance sheet date of semi and annual financial statements. (i.e. liabilities to equity ratio, interest coverage ratio, tangible net worth, etc.) Otherwise, the loans are due and payable immediately. The Group was in compliance with the financial covenants mentioned above.

(l) Lease liabilities

The Group’s lease liabilities were as follows:

Current $ Non-current $	2023.12.31	2022.12.31
	1,644	2,014
	6	1,661

For the maturities analysis, please refer to Note 6(v).

The amounts recognized in profit or losses were as follows:

Interest on lease liabilities $ Expenses relating to short-term leases $	For the years ended December 31, 2023 70 606	For the years ended December 31, 2022
		133
		687

The amounts recognized in the statement of cash flows for the Group was as follows:

Total cash outflow for leases $	For the years ended December 31, 2023 2,686	For the years ended December 31, 2022
		2,882

1. Real estate leases

As of December 31, 2023 and 2022, the Group leases houses and buildings as office premises and factories. The lease period of office premises is usually two to three years. The lease period of factories is usually five to six years. Part of the lease includes the option to extend the same period as the original contract when the lease period expires.

2. Other leases

The Group leases parking spaces, photocopying equipment and dormitories for a lease period of one year. These leases are short-term leases. The Group has elected not to recognize right-of-use assets and lease liabilities for these leases.

(m) Operating Leases

The Group leases its investment properties. Since almost all risks and rewards belonging to the ownership of the underlying asset have not been transferred and paid, these lease contracts are classified as operating leases. Please refer to note 6 (i) Investment property for details.

Maturity analyses of lease payments, showing the undiscounted lease payments to be received after the reporting date are as follows:

147

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) ZIPPY TECHNOLOGY CORP. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Less than one year $ One to two years Two to three years Three to four years Four to five years More than five years Total undiscounted lease payments $	2023.12.31	2022.12.31
	114,388 73,472 43,769 39,441 37,103 100,175	116,890 98,518 54,618 23,981 21,192 81,620
	408,348	396,819

Please refer to Note 6(u) for further information of the rental revenues incurred by leasing investment properties for the years ended December 31, 2023 and 2022.

(n) Employee benefits

1. Defined benefit plans

Reconciliation of defined benefit obligation at present value and plan asset at fair value are as follows:

Present value of the defined benefit obligations $ Fair value of plan assets Net defined benefit liabilities $	2023.12.31	2022.12.31
	92,055 (74,590)	104,067 (86,844)
	17,465	17,223

The Group makes defined benefit plan contributions to the pension fund account at Bank of Taiwan that provides pensions for employees upon retirement. The plans (covered by the Labor Standards Law) entitle a retired employee to receive an annual payment based on years of service and average salary for the six months prior to retirement.

1) Composition of plan assets

The Group allocates pension funds in accordance with the Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund, and such funds are managed by the Bureau of Labor Funds, Ministry of Labor. With regard to the utilization of the funds, minimum earnings in the annual distributions on the final financial statements shall be no less than the earnings attainable from the amounts accrued two-year time deposits with interest rates offered by local banks.

The Group’s pension reserve account in Bank of Taiwan amounted to $73,732 at the end of December 31, 2023. For information on the utilization of the labor pension fund assets including the assets allocation and yield of the fund, please refer to the website of the Bureau of Labor Funds, Ministry of Labor.

2) Movements in present value of the defined benefit obligations

The movements in present value of defined benefit obligations for the Group on 2023 and 2022 were as follows:

148

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

ZIPPY TECHNOLOGY CORP. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Defined benefit obligation at January 1 $ Current service costs and interest Remeasurement on the net defined benefit liability －Experience adjustments arising on the actuarial gain or loss －Actuarial loss (gain) arising from changes in financial assumptions Benefits paid by the plan assets Defined benefit obligation at December 31 $	For the years ended December 31,	For the years ended December 31,
	2023 104,067 1,755 537 703 (15,007) 92,055	2022
		112,840 889 3,375 (8,207) (4,830)
		104,067

3) Movements of defined benefit plan assets

The movements in the present value of the defined benefit plan assets for the Group on 2023 and 2022 were as follows:

Fair value of plan assets at January 1 $ Interest income Remeasurement on the net defined benefit liability －Return on plan assets (excluding current interest) Contributions made Benefits paid by the plan assets Fair value of plan assets at December 31 $	For the years ended December 31,	For the years ended December 31,
	2023	2022
	86,844 1,476 288 989 (15,007)	72,933 445 6,230 12,066 (4,830)
	74,590	86,844

4) Expenses recognized in profit or loss

The expenses recognized in profit or loss for the Group were as follows:

Current service costs $ Net interest of net liabilities for defined benefit obligations $ Operating cost $ Selling expenses Administration expenses $	For the years ended December 31,	For the years ended December 31,
	2023	2022 249 195 444 99 8 337
	132 147
	279
	274 - 5
	279	444

149

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

ZIPPY TECHNOLOGY CORP. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

5) Actuarial assumptions

The following are the Group’s principal actuarial assumptions:

Present Value of defined benefit obligations:

Discount rate Future salary increases rate	December 31, 2023	December 31, 2022
	1.625%~1.63% 0.50%~1.00%	1.75% 0.50%~1.00%

The expected allocation payment made by the Group to the defined benefit plans for the one year period after the reporting date was $383.

The weighted-average duration of the defined benefit obligation is 10.66 years.

6) Sensitivity analysis

If the actuarial assumptions had changed, the impact on the present value of the defined benefit obligation shall be as follows:

obligation shall be as follows:
		Influences of defined benefit
		obligations
		Increased	Decreased
December 31, 2023
Discount rate (0.25% change)	$	(1,395)	1,437
Increase in future salary (0.25% change)		1,408	(1,373)
December 31, 2022
Discount rate (0.25% change)	$	(1,677)	1,728
Increase in future salary (0.25% change)		1,696	(1,654)

Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation by the amounts shown above. The method used in the sensitivity analysis is consistent with the calculation of pension liabilities in the balance sheets.

There is no change in the method and assumptions used in the preparation of sensitivity analysis for 2023 and 2022.

2. Defined contribution plans

In accordance with the provisions of the Labor Pension Act, the Group contributes an amount equal to 6% of the employee’s monthly wages to the Labor Pension personal account with the

150

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

ZIPPY TECHNOLOGY CORP. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Bureau of the Labor Insurance. The foreign subsidiaries of the Group implements the definite allocation of retirement and resignation measures, allocates retirement funds in accordance with local laws and regulations, and recognizes the amount of retirement funds allocated in each period as current expenses.

The pension costs incurred from the contributions to the Bureau of the Labor Insurance amounted to $13,808 and $14,675 for the years ended December 31, 2023 and 2022, respectively. Except for the accounts payable of $2,423 and $2,206, respectively, the Group has been contributed to the Bureau of the Labor Insurance.

The pension expenses contributed by the foreign entities following the local regulations amounted to $8,114 and $7,764 for the years ended December 31, 2023 and 2022, respectively.

(o) Income taxes

The components of income tax expense (gain) in the years 2023 and 2022 were as follows:

ome taxes The components of income tax expense (gain) in the years 2023 and 2022 were as follows:	023 and 2022 were as follows:	023 and 2022 were as follows:
For the years ended December 31, 2023 2022 Current tax expense Current period $ 142,919) 188,332) Adjustment for prior periods 248) 1,323) 143,167) 189,655) Deferred tax expense Origination and reversal of temporary differences (2,088) (2,286) Income tax expense from continuing operations $ 141,079) 187,369)	For the years ended December 31,
	2023	2022
		188,332) 1,323)
	143,167)	189,655)
	(2,088)	(2,286)
		187,369)

There was no income tax that was directly recognized in equity for 2023 and 2022.

The amount of income tax recognized in other comprehensive income for 2023 and 2022 was as follows:

For the years ended December 31, 2023 2022 Items that will not be reclassified subsequently to profit or loss: Remeasurement from defined benefit plans $ 190) (2,212)	For the years ended December 31,	For the years ended December 31,
	2023	2022
		(2,212)

A reconciliation of income before income tax and income tax expense recognized in profit or loss was as follows:

151

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

ZIPPY TECHNOLOGY CORP. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

For the years ended December 31, 2023 2022 Income before tax $ 679,573) 864,401) Income tax using the statutory tax rate 135,915) 172,880) Impact of tax rate differences in foreign jurisdictions 375) 7,437) Tax exemption for securities trading income (203) - Permanent differences 2,687) 6,906) Tax adjustments in prior periods 248) 1,323) Tax credits (3,671) (3,691) Undistributed earnings additional tax 5,728) 2,514) Income tax expense $ 141,079) 187,369)	For the years ended December 31,	For the years ended December 31,
	2023	2022
		864,401)
	135,915) 375) (203) 2,687) 248) (3,671) 5,728)	172,880) 7,437) - 6,906) 1,323) (3,691) 2,514)
		187,369)

Deferred Tax Assets and Liabilities
1) Unrecognized Deferred Tax Liabilities

The Group did not recognize any temporary differences related to investment in subsidiaries since the Group has the ability to control the time point when temporary differences are reversed, and it is certain that the differences will not be reversed in the foreseeable future. Related information as of December 31, 2023 and 2022 were as follow:

2023.12.31 Tax effect of taxable Temporary Differences $ 77,025	2023.12.31	2022.12.31
		74,550

2) Unrecognized Deferred Tax Assets

Deferred tax assets that have not been recognized in respect of the following items:

2023.12.31 Tax effect of deductible Temporary Differences $ 1,101	2023.12.31	2022.12.31
		7,351

As of December 31, 2023 and 2022, the Group estimates that some temporary differences will unlikely to be realized in the foreseeable future, so deferred income tax assets were not recognized.

3) Recognized Deferred Tax Assets and Liabilities

The movements in deferred tax assets and liabilities for the years ended December 31, 2023 and 2022 were as follows:

152

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

ZIPPY TECHNOLOGY CORP. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Unrealized exchange gains	Other	Total
- - -	- (621) 8	- (621) 8
-	(613)	(613)
- - -	(340) 366 (26)	(340) 366 (26)
-	-	-

Unrealized Profit	Allowance for Inventory Valuation Losses	Defined Benefit Plans	Others	Total
7,794 619 - -	10,078 1,427 - 5	3,444 (141) 190 -	12,841 804 - 17	34,157 2,709 190 22
8,413	11,510	3,493	13,662	37,078
4,639 3,155 - -	7,347 2,652 - 79	7,981 (2,325) (2,212) -	13,353 (1,562) - 1,050	33,320 1,920 (2,212) 1,129
7,794	10,078	3,444	12,841	34,157

The Company’s income tax returns through 2021 have been examined and approved by the Tax Authority.

(p) Capital and reserves

153

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) ZIPPY TECHNOLOGY CORP. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

As of December 31, 2023 and 2022, the authorized capital of the Company both consisted of 200,000 thousand shares and both issued worth $2,000,000, with par value of $10 per share, and its outstanding capital both consisted of 152,649 thousand shares of stock. All issued shares were paid up upon issuance.

Reconciliations of shares outstanding for the years ended December 31, 2023 and 2022, were as follows:

Balance as of January 1 Balance as of December 31	(Unit: Thousand Shares) Common Stock	(Unit: Thousand Shares) Common Stock
	For the Years Ended December 31,
	2023	2022
	152,649	152,649
	152,649	152,649

1. Capital surplus

The components of the capital surplus were as follows:

2023.12.31 Share capital $ 134,815 The movement of net stockholders of associates and joint ventures entity for using equity method 119 Other 628 $ 135,564	2023.12.31	2022.12.31
		134,815 119 630
		135,564

In accordance with the ROC Company Act, realized capital reserves can only be reclassified as share capital or distributed as cash dividends after offsetting losses. The aforementioned capital reserves include share premiums and donation gains. In accordance with the securities offering and Issuance Guidelines, the amount of capital reserve to be reclassified under share capital shall not exceed 10 percent of the actual share capital amount.

2. Retained earnings

According to the Articles of Incorporation, after-tax earnings are initially used to offset cumulative losses, and 10% of the remainder is set aside as a legal reserve, except when the legal reserve of the Company reaches paid-in capital of the Company. Special reserve may be appropriated if necessary, and then any remaining profit together with any undistributed retained earnings shall be distributed according to the distribution plan proposed by the Board of Directors and submitted to the shareholders’ meeting for approval.

154

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) ZIPPY TECHNOLOGY CORP. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

1) Legal reserve

If the Company experienced profit for the year, the meeting of shareholders shall decide on the distribution of the statutory earnings reserve either by new shares or by cash, of up to 25 percent of the actual share capital.

2) Special reserve

In accordance with Permit No.1010012865 as issued by the Financial Supervisory Commission on April 6 2012, a special reserve equal to the contra account of other shareholders' equity is appropriated from the current and prior period earnings. When the debit balance of any of the contra accounts in the shareholders' equity is reversed, the related special reserve can be reversed. The subsequent reversals of the contra accounts in shareholders' equity shall qualify for additional distributions.

3) Earnings Distribution

During the meeting of shareholders on May 30, 2023 and May 27, 2022, the shareholders approved to distribute the 2022 and 2021 earnings, respectively, as follows:

Dividends distributed to common shareholders Cash	2022	2022		2021	2021
	Dividend per share ($)	Amount		Dividend per share ($)	Amount
	$ 3.50	534,270 $ 3.00			457,946

On March 6 2024 the Company's Board of Directors resolved to appropriate the 2023 earnings respectively, as follows:

respectively, as follows:
Dividends distributed to common shareholders Cash	2023 Dividend per share ($) Amount $ 3.00 457,946
	Dividend per share ($)
	$ 3.00

(q) Earnings per share

The following are the calculation of basic earnings per share and diluted earnings per share:

Basic earnings per share: Profit attributable to ordinary shareholders Weighted average number of ordinary shares (thousand shares) Basic earnings per share (NT dollars)	For the years ended December 31,	For the years ended December 31,
	2023 $ 541,605 152,649 $ 3.55	2022
		675,837
		152,649
		4.43

155

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

ZIPPY TECHNOLOGY CORP. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Diluted earnings per share:

Diluted earnings per share:
Profit attributable to ordinary shareholders of the Company (adjusted for the effects of all dilutive potential ordinary shares) $ 541,605 Weighted average number of ordinary shares (thousand shares) 152,649 Effect of dilutive potential common shares (thousand shares) profit sharing to employees 554 Weighted average number of ordinary shares (adjusted for the effects of all dilutive potential ordinary shares) 153,203 Diluted earnings per share (NT dollars) $ 3.54	675,837
	152,649 754
	153,403
	4.41

(r) Revenue from contracts with customers

Disaggregation of revenue

For the years ended December 31, 2023	For the years ended December 31, 2023	For the years ended December 31, 2023
Power Supplies		Total
265,048 379,893 67,311 187,062 2,681 92,737		432,913 473,494 419,818 217,039 203,376 379,847
994,732		2,126,487
994,732		2,126,487
Power Supplies	Marco Switches 178,110 107,637 287,100 38,324 174,347 320,940 1,106,458 1,106,458	Total
496,215 512,658 164,248 214,295 3,896 144,405		674,325 620,295 451,348 252,619 178,243 465,345
1,535,717		2,642,175
1,535,717		2,642,175

156

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) ZIPPY TECHNOLOGY CORP. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

2. Contract balances Contract liabilities $	2023.12.31	2022.12.31	2022.1.1
	11,258	13,809	18,143

Contract liabilities are mainly derived from the difference between the time when the Group transfers goods or services to the customer to meet the performance obligation and the time when the customer pays. The Group will transfer revenue when the performance obligation is met.

(s) Remuneration of employees, directors and supervisors

The Company’s articles of incorporation require that earnings shall first be offset against any deficit. A minimum of 2% will be distributed as employee remuneration and a maximum of 2% will be allocated as directors’ and supervisors’ remuneration. The recipients of shares and cash may include employees of the Company’s affiliated companies who meet certain conditions. Distribution remuneration for employees, directors and supervisors shall be submitted to the shareholders' meeting report.

The remuneration of employees amounted to $21,158 and $25,882 and the remuneration of directors amounted to $14,105 and $17,254 for the years ended December 31, 2023 and 2022, respectively. These amounts are calculated using the Company's profit before tax for each period described above, and are determined using the earnings allocation method which stated under the Company's article. These remunerations were expensed under operating cost or expenses in 2023 and 2022. If there is a difference between the actual distribution amount in the following year and the estimated amount, it shall be dealt with according to the change in accounting estimates, and the difference shall be recognized as the profit and loss of the following year.

For the years ended December 31, 2022 and 2021, the Company estimated its employee remuneration amounted to $25,882 and $22,649, and the remuneration of directors amounted to $17,254 and $15,019, respectively. There were no differences between the amounts to be distributed as remuneration to employees and directors and those of the estimation made by the Company. Related information would be available at the Market Observation Post System after the meeting of the shareholders has been convened.

(t) Non-operating income and expenses
Interest income

The details of other income for the years ended December 31, 2023 and 2022, were as follows:

For the years ended December 31, 2023 2022 Interest income $ 19,410) 4,325)	For the years ended December 31,	For the years ended December 31,
	2023	2022
		4,325)

2. Other income

The details of other income for the years ended December 31, 2023 and 2022, were as follows:

157

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

ZIPPY TECHNOLOGY CORP. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

For the years ended December 31, 2023 2022 Rental income $ 120,431) 106,310) Others 27,390) 32,414) Total $ 147,821) 138,724)	For the years ended December 31,	For the years ended December 31,
	2023	2022
		106,310) 32,414)
		138,724)

3. Other income and losses

The details of other income and losses for the years ended December 31, 2023 and 2022, were as follows:

For the years ended December 31, 2023 2022 Losses from disposal of property, plant and equipment $ 33) (53) Foreign exchange (losses) gains 1,020) 44,921) Net gains on financial assets measured at fair value through profit or loss 2,290) 2,139) Other losses (2,806) (5,703) Total $ 537) 41,304)	For the years ended December 31,	For the years ended December 31,
	2023	2022
		(53) 44,921) 2,139) (5,703)
		41,304)

Finance costs

The details of finance expenses for the years ended December 31, 2023 and 2022, were as follows:

For the years ended December 31, 2023 2022 Interest expenses Bank borrowings $ (23,375) (18,093) Other (70) (133) Total $ (23,445) (18,226)	For the years ended December 31,	For the years ended December 31,
	2023	2022
		(18,093) (133)
		(18,226)

(u) Financial instruments

Credit risks

1) Credit risks exposure

The maximum credit risk exposure of the Group on December 31, 2023 and 2022 that may be caused by the failure of the counterparty to perform its obligations and financial guarantees provided by the Group mainly comes from:

A. the book value of financial assets recognized on the balance sheet

2) Condition of credit risk concentration

In order to reduce the credit risk of accounts receivable, the Group continuously evaluates the financial status of customers. The Group still regularly evaluates the possibility of accounts receivable recovery and makes allowance for losses, and the impairment losses are always

158

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) ZIPPY TECHNOLOGY CORP. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

within the expectations of the management. As of December 31, 2023 and 2022, 28% and 29% of accounts receivable were attributable to four major customers. Thus, credit risk is significantly centralized.

3) Credit risk of accounts receivable

Please refer to Note (6) (d) for further information about credit risk exposure of notes receivable and accounts receivable.

Other financial assets measured at amortized cost include other receivables. Please refer to Note (6) (e) for further information and the provision of allowance for losses.

Other receivables are financial assets with low credit risk. Therefore, the amount of allowance for losses for the period is calculated based on the 12-month expected credit loss amount for the period (please refer to Note (4) (g) for the explanation of how the Group determines that the credit risk is low).

Liquidity risks

The following are the contractual maturities of financial liabilities of the Group, including the impact of estimation of interest:

Contractual cash flows	Less than 6 months	6 to 12 months	1 to 2 years	2 to 5 years	More than 5 years
1,188,733 13,965 10,187 158,297 1,667 173,115 23,575	35,404 227 10,187 158,297 915 173,115 337	35,169 13,738 - - 746 - 35	69,574 - - - 6 - 14,901	1,048,586 - - - - - 1,678	- - - - - - 6,624
1,569,539	378,482	49,688	84,481	1,050,264	6,624
1,235,311 13,270 11,644 263,342 3,762 206,456 23,933	33,183 13,270 11,644 263,342 1,102 206,456 594	33,050 - - - 982 - 486	65,564 - - - 1,672 - 5,049	192,288 - - - 6 - 16,205	911,226 - - - - - 1,599
1,757,718	529,591	34,518	72,285	208,499	912,825

159

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

ZIPPY TECHNOLOGY CORP. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

The Group is not expecting that the cash flows included in the maturity analysis could occur significantly earlier or at significantly different amounts.

Currency risks
1) Exposure to currency risks

The Group’s exposures to significant currency risk were those from its foreign currency denominated financial assets and liabilities as follows:

	2023.12.31
Foreign currency (In thousand)	Exchange rate	TWD
	USD：TWD 30.7350 EUR：TWD 34.0114 CNY：TWD 4.3338 USD：TWD 30.7350 CNY：TWD 4.3338 EUR：TWD 34.0114 USD：EUR 0.9037 2022.12.31	660,249 36,018 83,244 418,334 355,588 69,043 25,449
Foreign currency (In thousand)	Exchange rate	TWD
	USD：TWD 30.7080 USD：EUR 0.9388 EUR：TWD 32.7086 CNY：TWD 4.4175 JPY：TWD 0.2324 USD：TWD 30.7080 CNY：TWD 4.4175 EUR：TWD 32.7086 JPY：TWD 0.2324 USD：TWD 30.7080 TWD：CNY 0.2264	455,338 19,407 39,463 88,169 6,149 396,686 345,957 60,805 7,975 37,617 167

160

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) ZIPPY TECHNOLOGY CORP. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

2) Sensitivity analysis

The Group’s exposure to foreign currency risk arises from the translation of the foreign currency exchange gains and losses on cash and cash equivalents, accounts receivable, other receivables, loans, accounts payable and other payables that are denominated in foreign currency. A 1% depreciation or appreciation of the functional currency against all the non-functional currency as of December 31, 2023 and 2022 would have increased or decreased the net profit after tax by $6,032 and $4,505, respectively. The analysis is performed on the same basis for both periods.

3) Gains or losses on foreign exchange

For the years ended December 31, 2023 and 2022, the foreign exchange gain (loss), including realized and unrealized, amounted to $1,020 and $44,921, respectively.

Interest rate analysis

The Group’s financial assets and financial liabilities with interest rate exposure risk were noted in the liquidity risk section.

The following sensitivity analysis in interest rates is based on the risk exposure to interest rates on the reporting date. For variable rate instruments, the sensitivity analysis assumes the variable rate liabilities are outstanding for the whole year on the reporting date.

If the interest rate increases or decreases by 1%, the Group’s profit will decrease or increase by $8,973 and $9,369 for the years ended December 31, 2023 and 2022, respectively, assuming all other variable factors remain constant. This is mainly due to the Group's variable rate in borrowings.

Fair value of financial instruments
1) Fair value hierarchy

Financial assets at fair value through profit or loss are measured on a recurring basis. However, for financial instruments not measured at fair value whose carrying amount is estimated reasonably close to the fair value and for equity investments that has no quoted prices in the active markets and lease liabilities information is not required:

		2023.12.31
Book Value		Fair	Value
	Level 1	Level 2	Level 3	Total
	37,019	-	55,256	92,275

161

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) ZIPPY TECHNOLOGY CORP. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

2023.12.31

Book Value		Fair	Value
	Level 1	Level 2	Level 3	Total
885,011 68,700 299,195 440	- - - -	- - - -	- - - -	- - - -
1,253,346	-	-	-	-
	37,019	-	55,256	92,715
	- - - - -	- - - - -	- - - - -	- - - - -
	-	-	-	-

		2022.12.31
Book Value		Fair	Value
	Level 1	Level 2	Level 3	Total
	-	-	92,215	92,215
719,386 395,651 502	- - -	- - -	- - -	- - -
1,115,539	-	-	-	-
	-	-	92,215	92,215
	- - - - -	- - - - -	- - - - -	- - - - -
	-	-	-	-

162

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) ZIPPY TECHNOLOGY CORP. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

2) Valuation techniques and assumption for financial instruments measured at fair value:

The fair value of financial assets and liabilities were decided in accordance with the solutions as follows:

(2.1) Funds are financial assets with standard terms which are traded in the active markets. Their fair values are based on the quoted market prices.
(2.2) The fair value of unquoted equity instruments were estimated using either the discounted cash flow model in which future cash flow were estimated and discounted or the fair value of the recognized assets and liabilities of the consolidated subsidiaries on the measurement day.
3) Transfers between levels

There were no transfers between any level of the fair value for the years ended December 31, 2023 and 2022.

4) The following table shows the movements in fair value measurements under level 3 of the fair value hierarchy:

value hierarchy:
Balance as of January 1, $ Purchase Disposals/pay off Effect of movements in exchange rate Balance as of December 31, $	At fair value through profit or loss
	For the years ended December 31,
	2023	2022
	92,215 34,093 (69,836) (1,216)	82,775 53,893 (45,906) 1,453
	55,256	92,215

The Group's measurement of the fair value of financial instruments is reasonable, but the use of different evaluation models or evaluation parameters may lead to different evaluation results. For financial instruments classified as level 3, a 0.5% up or down of the evaluation parameter changes would have increased (decreased) the net profit by $276.

5) Quantified information for significant unobservable inputs (Level 3) used in fair value measurement

The Group uses level 3 inputs to measure financial assets at fair value through profit or loss.

Quantified information of significant unobservable inputs was as follows:

Item Financial assets at fair value through profit or loss－beneficiary certificate	Valuation Technique Net Asset Value Method	Significant Non-observable Input ‧Market Interest Rate ‧Net Asset Value	The Relationship between Significant Non-observable Input and FairValue
			‧The higher discount rate is, the lower fair value will be.

163

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

ZIPPY TECHNOLOGY CORP. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(v) Financial risk management
Overview

The Group has exposures to the following risks from its financial instruments:

1) Credit risk
2) Liquidity risk

3) Market risk

The following likewise discusses the Group’s objectives, policies and processes for measuring and managing the above mentioned risks.

Risk management framework

The Group's financial management department provides services for each business, coordinates the entry into the domestic and international financial markets, and monitors and manages the financial risks related to the Group's operations by analyzing internal risk reports based on the degree and breadth of risk. The Group will use derivative financial instruments to evade storm risk in order to reduce the impact of these risks. The use of derivative financial instruments is regulated by the policies adopted by the Group's board of directors, which are written principles for exchange rate risk, interest rate risk, credit risk, the use of derivative financial instruments and non-derivative financial instruments, and the investment of remaining liquid funds. Internal auditors continue to review compliance with policies and the risk limit. The Group does not trade financial instruments (including derivative financial instruments) for speculative purposes. The financial management department reports quarterly to the Group's board of directors. The board of directors is an independent organization responsible for monitoring risks and implementing policies to reduce risk.

Credit risk

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligation. The Group is exposed to credit risk primarily through its accounts receivable.

1) Accounts receivable and other receivable

The Group’s credit risk exposure is mainly affected by the individual conditions of each customer. However, the management also considers the statistical data of the Group’s customer base, including the default risk of the customer's industry and country, as these factors may affect credit risk.

The sales department has established a credit policy. According to this policy, the Group must analyze the credit rating of each new customer individually before granting standard payment and shipping conditions and terms. The Group’s review is based on external ratings and, in some cases, bank notes. The purchase limit is established by individual customers. This limit is regularly reviewed. Customers who do not meet the Group’s benchmark credit rating can only trade with the Group on an advance receipt basis.

The Group has set up a loss allowance account to reflect the estimated loss of accounts receivable and other receivables and investments.

164

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) ZIPPY TECHNOLOGY CORP. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

2) Investments

The credit risk of bank deposits, fixed income investments and other financial instruments is measured and monitored by the Group’s financial department. Since the Group’s trading partners and contract performance parties are creditworthy banks and financial institutions and corporate organizations with investment grade or above, there are no major performance concerns, so there is no major credit risk.

3) Guarantee

The Group’s policy stipulates that only financial guarantees can be provided to related parties or parties with transactions. Please refer to Note 13 (a) for further guarantee information as of December 31, 2023 and 2022.

4. Liquidity risk

Liquidity risk is a risk that the Group is unable to meet the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Group’s approach to managing liquidity is to ensure, as much as possible, that it always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation.

Generally speaking, the Group ensures that there is sufficient cash to meet the expected operating expenditure requirements for 60 days, including the fulfillment of financial obligations, but excludes potential impacts that cannot be reasonably expected under extreme circumstances, such as natural disasters. As of December 31, 2023 and 2022, the Group’s unused credit line were amounted to $2,028,515 and $2,227,041, respectively.

Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rate, and equity prices which will affect the Group’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters while optimizing the return.

In order to manage market risks, the Group chooses reputable securities investment trust companies for financial asset transactions, and manages market risks through professional managers

1) Currency risk

The Group is exposed to currency risk on sales, purchases and borrowings that are denominated in a currency other than the functional currency of the Group primarily the New Taiwan Dollars (TWD), and USD, EUR and CNY, etc.. The currencies used in these transactions are denominated in TWD, EUR, USD, JPY and CNY.

Loan interest is priced in the currency of the principal of the loan. Generally speaking, the currency of the loan is the same as the currency of the cash flow generated by the Group’s operations, mainly the New Taiwan dollar. In this case, economic hedging is provided without the need to sign derivatives, so hedging accounting is not adopted.

165

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) ZIPPY TECHNOLOGY CORP. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Regarding other monetary assets and liabilities denominated in foreign currencies, when short-term imbalance occurs, the Group buys or sells foreign currencies at real-time exchange rates to ensure that the net risk insurance remains at an acceptable level.

2) Interest rate risk

The Group’s interest rate risk arises from long-term and short-term borrowings bearing floating interest rates. The fluctuations of the market interest rate changes with the floating interest rates of the long-term and short-term borrowings, and thus affect the future cash flow. However, market interest rates have not changed much, so changes in interest rates will not generate significant cash flow risks.

(w) Capital Management

The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. Capital consists of ordinary shares, additional paid-in capital, retained earnings, and non-controlling interests of the Group. The Board of Directors monitors the return on capital as well as the level of dividends to ordinary shareholders.

The Group’s capital management goal is to ensure the ability to continue operations, to continue to provide shareholder compensation and other stakeholders' benefits, and to maintain the best capital structure to reduce capital costs.

In order to maintain or adjust the capital structure, the Group may adjust dividends paid to shareholders, reduce capital to return shareholders' shares, issue new shares or sell assets to settle liabilities.

The Group’s debt to equity ratio at the reporting date was as follows:

Profit $ Total Equity $ Return on Equity	2023.12.31	2022.12.31
	541,605	675,837
	3,664,580	3,662,299
	14.78%	18.45%

According to the Group’s management, there were no changes in the Group’s approach to capital management as of December 31, 2023.

(x) Investing and financing activities not affecting current cash flow
The Group’s financing activities not affecting current cash flow were acquisition of right-of-use assets from leasing. Please refer to Note 6(h).

Reconciliation of liabilities arising from financing activities was as follows:

Cash flows	Non-cash changes	December 31, 2023
	Foreign exchange movement
- (2,010)	522) (15)	13,605) 1,650)
(2,010)	507)	15,255)

166

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

ZIPPY TECHNOLOGY CORP. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Cash flows	Non-cash changes	December 31, 2022
	Foreign exchange movement
(31,283) (2,062)	563) 238)	13,083) 3,675)
(33,345)	801)	16,758)

(7) Related Party Transactions

(a) The Company is the ultimate controlling party of the Group
(b) Significant transactions with related parties: None.
(c) Key management personnel compensation

Key management personnel compensation includes:

Short-term employee benefits $ Post-employment benefit $	For the years ended December 31,	For the years ended December 31,
	2023 67,282 889	2022
		70,991 870
	68,171	71,861

(8) Pledged Assets

The carrying values of pledged assets were as follows:

Pledged assets	Object	2023.12.31	2022.12.31 $ 803,862 1,983,301
Property, plant and equipment Investment property Total	long-term, short-term borrowings Long-term borrowings	$ 799,490 1,973,059 $ 2,772,549
			$ 2,787,163

(9) Significant Commitments and Contingencies: None.

(10) Losses Due to Major Disasters: None.

(11) Subsequent Events: None.

(12) Other

(a) The employee benefits, depreciation, depletion and amortization expenses categorized by function were as follows:

By function By item	For theyears ended December 31, 2023	For theyears ended December 31, 2023	For theyears ended December 31, 2023	For theyears ended December 31, 2022	For theyears ended December 31, 2022	For theyears ended December 31, 2022
	Operating costs	Operating and non-operating expense	Total	Operating costs	Operating and non-operating expense	Total
Employee benefits Salary Labor and health insurance Pension Others Depreciation Amortization	292,242 29,025 13,734 11,996 54,873 338	220,525 16,718 8,467 8,320 30,851 711	512,767 45,743 22,201 20,316 85,724 1,049	321,441 29,350 13,655 13,320 53,219 344	274,023 14,484 9,228 9,060 31,470 625	595,464 43,834 22,883 22,380 84,689 969

167

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) ZIPPY TECHNOLOGY CORP. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(13) Other disclosures

(a) Information on significant transactions

The following is the information on significant transactions required by the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” for the Group for the year ended December 31, 2023:

Loans to other parties:

														(In Thousands	(In Thousands	of EUR/USD)
Number	Name of lender	Name of borrower	Account name	Related party	Highest balance of financing to other parties during the period	Ending balance	Actual usage amount during the period	Range of interest rates during the period	Purposes of fund financing for the borrower	Transaction amount for business between two parties	Reasons for short-term financing	Allowance for bad debt	Coll	ateral	Individual funding loan limits	Maximum limit of fund financing
													Item	Value
1	Zippy USA Inc.	Kobot International Inc.	Other receivables- related parties	Y	59,041 (USD 1,920)	46,740 (USD 1,520)	46,740 (USD 1,520)	1.51~ 2.50	2	-	Working Capital	-		-	580,571	580,571

Note 1: Purpose of fund financing for the borrower:

  - (1) For those companies with business contact, please fill in 1.

  - (2) For those companies with short-term financing needs, please fill in 2.

Note 2: (1) The Company’s total fund financing amount cannot exceed 40% of its net asset value.
- (2) For those companies with business contact, the amount of each fund financing cannot exceed the trading amount between the two parties. If the trading amount exceeds 10% of its net asset value, the amount of each fund financing cannot exceed 10%of its net asset value. The trading amount means the higher of sales or purchases.
- (3) For those companies with short-term financing needs, the amount of each fund financing cannot exceed 10%of its net asset value.
Note 3: The policies of loans to other parties for the subsidiaries:
- (1) Total financing amount cannot exceed 2 times of the subsidiary’s net asset value.
- (2) For those companies with short-term financing needs, the amount of each fund financing cannot exceed 10% of the subsidiaries net asset value.
- (3) For the subsidiary leading to the foreign companies that are 100% directly or indirectly owned by the Company, the amount of fund financing cannot exceed 2 time of the subsidiary’s net asset value.
Note 4: The transactions and its limits with the Group, which were calculated based on the exchange rate at the end of the period , were eliminated in the consolidated financial statements.
Guarantees and endorsements for other parties:

											(In Thou	sands of EUR/USD)	sands of EUR/USD)
No.	Endorsement/ guarantee provider	Counter-	party	Limitation on endorsement/ guarantee amount provided to each guaranteed party (Note 2)	Maximum balance for the year (Note 2)	Ending balance	Amount actually drawn	Amount of endorsement/ guarantee collateralized by properties	Ratio of accumulated endorsement/ guarantee to net equity per latest financial statements	Maximum endorsement guarantee amount allowance (Note 2 and 3)	Guarantee provided by parent company	Guarantee provided by a subsidiary	Guarantee provided to subsidiaries in Mainland China
		Name	Nature of relationship (Note 1)
0 0	The Company 〞	Zippy (Dongguan) Electronics Co., Ltd. Zippy Technology Europe GmbH.	4 4	1,465,832 1,465,832	46,125) (USD 1,500) 51,060) (EUR 1,500)	46,125) (USD 1,500) 51,060) (EUR 1,500)	- 13,616 (EUR 400)	- -	1.26% 1.39%	1,832,290 1,832,290	Y Y	N N	Y N

Note 1: (1) The Company has business with the receiving parties.

(2) The Company holds directly or indirectly more than 50% of the common stock of the subsidiaries.
(3) The Company holds directly or indirectly more than 50% by the investee.
(4) The Company holds directly or indirectly more than 90% of the common stock of the subsidiaries.
(5) Based on the needs of contracting projects, companies in the same industry or jointly created mutual insurance companies in accordance with contractual provisions.
(6) The stockholders of the Company provide guarantee for the investee to their stockholding percentage.
(7) The inter-industry is engaged in joint and several guarantees for the performance of the pre-sale house sales contract in accordance with the regulations of the Consumer Protection Law.
Note 2: (1) The maximum guarantees and endorsements provide by the Company cannot exceed 50% of net asset of the Company.
(2) The maximum guarantees and endorsements for individual counter party cannot exceed 40% of net asset of the Company.
(3) The maximum guarantees and endorsements provide by the Company and subsidiaries cannot exceed 50% of net asset of the Company.
(4) For those companies with business contact, the amount of each guarantees and endorsements cannot exceed the trading amount within twelve months between the two parties.
Note 3: The policies of loans to other parties for the subsidiaries:
(1) Total amount of guarantees and endorsements cannot exceed 2 times of the subsidiary’s net asset value.
(2) The amount of guarantees and endorsements for individual counter party cannot exceed 40% of net asset of the subsidiary or the net asset of the endorsed company is limited; if approved by the board of directors, the maximum endorsement guarantee of the subsidiary to other subsidiaries hold directly or indirectly 100% by a single parent company cannot exceed 2 time of the subsidiary’s net asset value.
Note 4: The amount of guarantees and endorsements were exchanged to New Taiwan Dollars in the actual exchange rate at the time of guarantee.

168

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

ZIPPY TECHNOLOGY CORP. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Securities held as balance sheet date (excluding investment subsidiaries, associates and joint ventures) :

Name of holder	Category and name of security	Relationship with the Company	Account title		Ending balance	Ending balance		Highest percentage of ownership (%) during theyear	Note
				Shares/Units (thousands) (Note)	Carrying value	Percentage of ownership (%)	Fair value
The Company G-BRIM International Inc. Zippy (Dongguan) Electronics Co., Ltd.	Fuh Hwa Money Market Beneficiary certificate Beneficiary certificate	- - -	Financial assets at fair value through profit or loss 〞〞	2,503 - -	37,019 33,587 21,669	- - -	37,019 33,587 21,669	- -

Note: Refers to the number of fund units (thousand units)

Individual securities acquired or disposed of with accumulated amount exceeding the lower of TWD300 million or 20% of the capital stock:

Company holding securities	Security type and name	Account	Counter -party	Relation -ship	Beginning	Beginning	Pu	rchase		S	ale		Ending (Note)	Ending (Note)
					Shares (in thousands)	Amount	Shares (note 1)	Amount	Shares (note 1)	Price	Cost	Gain (loss) on disposal	Shares (in thousands)	Amount
The Company	Fuh Hwa Money Market	Financial assets at fair value through profit or loss	-	-	-	-	68,118	1,003,000	65,615	967,015	966,000	1,015	2,503	37,019

Acquisition of individual real estate with amount exceeding the lower of TWD300 million or 20% of the capital stock: None.
Disposal of individual real estate with amount exceeding the lower of TWD300 million or 20% of the capital stock: None.
Related-party transactions for purchases and sales with amounts exceeding the lower of TWD100 million or 20% of the capital stock:

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Transactions with terms
Transaction details different from others Notes/Accounts receivable (payable)
Percentage Percentage of total
Name of Nature of Purchase/ of total Payment Unit Ending notes/accounts
company Related party relationship Sale Amount purchases/sale terms price Payment terms balance receivable (payable) Note
The Company [Zippy (Dongguan) ] Associate Purchases 329,601) 63.63% 2~4 months Note 1 Note 2 21,049 11.47%
Electronics Co., Ltd. under equity method
〞〞〞 Purchasing (147,791) - % 2~4 months Note 1 Note 2 - - %
material for
subsidiaries
〞 Zippy USA Inc. 〞 Sales (286,038) 14.34% 2~4 months Note 1 Note 2 9,842 3.41%
〞 Zippy (Suzhou) 〞 Sales (274,326) 13.75% 2~4 months Note 1 Note 2 39,735 13.76%
Electronics Co. ,
Ltd.
〞 Zippy Technology 〞 Sales (122,512) 6.14% 2~4 months Note 1 Note 2 25,981 9.00%
Europe GmbH.
----- End of picture text -----

Note 1: Based on the negotiated price while trading.

Note 2: Normal customers are within one to two months, while related party transactions are within two to four months.

169

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) ZIPPY TECHNOLOGY CORP. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Receivables from related parties with amounts exceeding the lower of NT$100 million or 20% of capital stock: None.
Trading in derivative instruments: None.
Business relationships and significant inter-company transactions:

. B	usiness relations	hips and signific	ant inter-	company tran	sactions:	sactions:
No.	Name of company	Name of counterparty	Existing relationship with the counter-party		Transactions
				Account name	Amount	Terms of trading	Percentage of the consolidated total revenue or total assets
0 0 0 0 0 0 0 0 0 0 1 2 2 3	The Company 〞〞〞〞〞〞〞〞〞 ZIPPY USA Inc. Zippy (Dongguan) Electronics Co., Ltd. QUAN-FA CORPORATION COMPANY 〞	ZIPPY USA Inc. Zippy Technology Europe Gmbh. Zippy (Suzhou) Electronics Co. , Ltd. G-BRIM International Inc. Zippy (Dongguan) Electronics Co., Ltd. ZIPPY USA Inc. Zippy Technology Europe Gmbh. Zippy (Suzhou) Electronics Co. , Ltd. G-BRIM International Inc. Zippy (Dongguan) Electronics Co., Ltd. Kobot International Inc. The Company 〞〞	1 1 1 1 1 1 1 1 1 1 3 2 2 2	Sales Sales Sales Sales - Account Receivable Account Receivable Account Receivable Account Receivable Other Receivable Other Receivable Sales Sales Account Receivable	286,038 122,512 274,326 15,877 147,791 9,842 25,981 39,735 6,010 21,049 46,740 329,601 41,267 11,163	Negotiated price Negotiated price Negotiated price Negotiated price Procurement Two to four months Two to four months Two to four months Two to four months Note 1 Loan Negotiated price Negotiated price Two to four months	13.45% 5.76% 12.90% 0.75% - % 0.18% 0.48% 0.74% 0.11% 0.39% 0.87% 15.50% 1.94% 0.21%

Note 1: In principle, the payment period depends on the capital needs, and the purchase is made by prepayment of part of the payment for the payment. Note 2: The labeling method is as follows:

1.Parent company labeled 0.
2.Subsidiaries labeled in number sequence from 1.

Note 3: Relationship is classified into three types:

1.Parent company to subsidiary.
2.Subsidiary to parent company.
3.Subsidiary to subsidiary.
Note 4: The transaction amount is calculated as a proportion of the consolidated revenue or assets. If categorized as an asset or liability, the calculation is compared with the consolidated asset; if categorized as income or loss, the calculation is compared with the consolidated income or loss.

Note 5: The transactions with the Group were eliminated in the consolidated financial statements.

170

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) ZIPPY TECHNOLOGY CORP. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(b) Information on investment:

The following is the information on investees for the year ended December 31, 2023 (excluding investees in Mainland China):

										Unit: Thousand Shares	Unit: Thousand Shares	Unit: Thousand Shares
Investor company	Investee company	Location	Main businesses and products	Original investment amount		Balance as of December 31		, 2023	Highest percentage of ownership (%) during the year	Net income (loss) of the investee (Note 1)	Share of profits/losses of investee (Note 1)	Note
				December 31, 2023	December 31, 2022	Shares/Units (In thousands)	Percentage of ownership	Carrying value
The Company 〞〞〞〞 Zippy International Holding Ltd.	Zippy USA Inc. Zippy International Holding Ltd. QUAN-FA CORPORATION COMPANY Zippy Technology Europe GmbH. Landmark International Holding Ltd. Kobot International Inc.	USA BVI Taiwan Germany Samoa USA	Trading in micro switches, power supplies, and computer accessories Reinvestment business Wire and cable manufacturing, electronic component manufacturing Trading in electrical parts and computer accessories Reinvestment business Leasing	8,247 325,823 5,360 12,573 145,906 16,470	8,247 325,823 5,360 12,573 145,906 16,470	300 10,234 4,493 (Note 2) 4,425 (Note 2)	100.00% 100.00% 63.92% 100.00% 100.00% 100.00%	277,863 292,212 53,538 44,244 180,452 128,052	100.00% 100.00% 63.92% 100.00% 100.00% 100.00%	8,835 34,732 (8,623) 5,740 (2,199) 12,772	8,835 34,732 (5,512) 5,740 (2,199) 12,772	Subsidiary 〞〞〞〞 Sub-Subsidiary

Note 1: Based on the financial report of the investment company audited by CPA to recognize under equity method.

Note 2: Obtaining equity.

Note 3: The aforementioned inter-company transactions were eliminated in the consolidated financial statements.

171

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) ZIPPY TECHNOLOGY CORP. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(c) Information on investment in Mainland China:

The names of investees in Mainland China, the main businesses and products, and other information:

==> picture [483 x 220] intentionally omitted <==

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

(In Thousands of USD)
Investment flows Accumulated
Accumulated Highest Investment Book Accumulated
Total amount Method of investment from outflow of investment from outflow of Net income Percentage ownership (%) percentage of income (losses) value remittance of earnings in
Main businesses of paid-in investment Taiwan as of Taiwan as of (losses) of the of during the (Note 2 and (Note 2 current period
Name of investee and products capital (Note 1) January 1, 2022 Out-flow Inflow December 31, 2022 investee ownership year 3) and 3) (Note 10)
Zippy (Dongguan) Mainly produce 276,957 (2) 276,957 - - 276,957 18,578) 100.00% 100.00% 18,578) 171,075 -
Electronics Co., Ltd. various switches, power supplies, (USD 8,500 (USD 8,783) (USD 8,783)
molds, computer and equipment
peripheral equipment, investment
computer optical fiber parts and sales USD 283)
Zippy (Suzhou) Mainly sell computer 82,375 (2) 82,375 - - 82,375 (1,319)) 100.00% 100.00% (1,319)) 78,463 -
Electronics Co. , Ltd. key components, power supplies, (USD 2,500) (USD 2,500) (USD 2,500)
precision ceramics,
precision molds and
key components of
network equipment
G-BRIM Mainly engaged in 49,333 (2) 49,333 - - 49,333 (827)) 100.00% 100.00% (827)) 106,052 -
International Inc. electronic products, plastic products, (USD 1,500) (USD 1,500) (USD 1,500)
rubber products,
hardware products,
import and export
and related
supporting
businesses, etc.
----- End of picture text -----

Note 1: There are three ways of investments as following:

(a) Direct investment in Mainland China.
(b) Indirect investment in Mainland china through a subsidiary in a third place (Zippy International Holding Ltd. and Landmark International Ltd.).
(c) Others
Note 2: The base of recognition of investment income (loss) is the financial statement audited by CPA of the investee company.

Note 3: The inter-company transactions with the Company were eliminated in the consolidated financial statements

2. Limitation on investment in Mainland China:

imitation on investment in	Mainland China:
Accumulated Investment in Mainland China as of December 31, 2023	Investment Amounts Authorized by Investment Commission, MOEA	Upper Limit on Investment (Note 3,4)
392,886) (USD 12,783)	399,555) (USD 13,000)	2,198,748

Note 1: The amount of paid-in capital and accumulated investment in Mainland China were exchanged to New Taiwan Dollars in historical exchange rates. Others were exchanged to New Taiwan Dollars in spot rate at the date of the audited entity's financial reports.

Note 2: The upper limit on investment is 60% of net value.

3. Significant transactions:

The significant inter-company transactions, which eliminated in the consolidated financial statements, with the subsidiary in Mainland China for the year ended December 31, 2023, are disclosed in “Information on significant transactions”.

172

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) ZIPPY TECHNOLOGY CORP. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Information on major shareholder:

Shareholding Shareholder’s Name	Shares	Percentage
Chung, Yen-Yen	10,337,267	6.77%
Chou, Chin-Wen	9,918,432	6.49%
Kao, Ming-Chuan	7,825,423	5.12%

(14) Segment Information

(a) Information about reportable segments and their measurement and reconciliations

The Group reportable segments: Power Supply Division, Switch Division, and others. Each division independently manufactures and sells related products. The reportable ds of the Group provide different products based on product business units. Since each product business unit requires different technologies and marketing strategies, it must be managed separately. Taxation is not able to be allocated to each reportable segment. In addition, all reportable segments include depreciation and amortization and other significant non-cash items. The reportable amount is the same as the report used by the chief operating decision maker. The operating segment accounting policies are similar to those described in Note (4) “Significant accounting policies”. Reportable segment profit or loss is based on operating profit or loss before taxation, and as the base of performance evaluation.

Information and reconciliations of operating segments of the Group:

	For the year ended December 31, 2023	For the year ended December 31, 2023	For the year ended December 31, 2023
Power supply	Switch	Other	Adjustment and Elimination	Total
	1,131,755) 602,665)	- -	- (1,068,358)	2,126,487) -
	1,734,420)	-	(1,068,358)	2,126,487)
	360,728)	18,204)	(16,700)	679,573)
	For the year ended December 31, 2022
Power supply	Switch	Other	Adjustment and Elimination	Total
	1,106,458) 625,215)	- -	- (1,201,793)	2,642,175) -
	1,731,673)	-	(1,201,793)	2,642,175)
	346,221)	16,486)	(47,464)	864,401)

Intersegment revenues for the years ended December 31, 2023 and 2022, which amounted to $1,068,358 and $1,201,793, respectively, should be eliminated from total revenues of reportable segments.

(b) Product and service information

173

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) ZIPPY TECHNOLOGY CORP. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

The reportable segments are divided by the departmental information of the Group, which is based on different products and services, and revenue from external customers has been disclosed in it. Therefore, product and service information was not additionally disclosed.

(c) Geographical information

In presenting information on the basis of geography, the revenue is based on the geographical location of customers and non-current assets are based on the geographical location of the assets.

By region Non-current assets Taiwan USA Mainland China Germany Total	2023.12.31 $ 3,031,960 181,527 95,943 45,367	2022.12.31 3,082,074 184,464 113,102 44,954
	$ 3,354,797	3,424,594

Non-current assets include property, plant and equipment, right-of-use assets, investment property, intangible assets and other assets, not including financial instruments, deferred tax assets, pension fund assets and rights arising from an insurance contract (non-current).

(d) Major customers

The Group did not have customers whose sales revenue accounted for more than 10% of the consolidated income statement in both the year of 2023 and the year of 2022.

174

Appendix 3

Independent Auditors’ Report

To the Board of Directors of Zippy Technology Corp.:

Opinion

We have audited the financial statements of Zippy Technology Corp.(“the Company”), which comprise the balance sheet as of December 31, 2023 and 2022, and the statements of comprehensive income, changes in equity and cash flows for the years then ended, and notes to the financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2023 and 2022, and its financial performance and its cash flows for the years ended December 31, 2023 and 2022 in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Certification of Financial Statements by Certified Public Accountants and the auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Certified Public Accountants Code of Professional Ethics in Republic of China (“the Code”), and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis of our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Revenue Recognition

Please refer to Note 4(o), and 6(q) for accounting policies and related disclosure information for revenue, respectively.

Description of the key audit matter:

The main business items of the Company are power supplies and micro switches. Sales transactions of the Company are mainly for export. There is uncertainty in the timing of export revenue recognition due to the long delivery period and the risk reward and ownership of the goods. The focus of attention is whether the timing of revenue recognition meets the transaction terms. Therefore, the timing for revenue recognition has been identified as a key audit matter in the current period.

175

How the matter was addressed in our audit:

In relation to the key audit matter above, we have performed certain key audit procedures that included assessing the appropriateness of the accounting policies and the design of related internal control for the timing of revenue recognition to the Company; conducting internal control tests to confirm whether the internal control is effectively implemented; executing the cut-off test for revenue recognition based on the transactions for a period of time before and after the report date.

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

Management is responsible for the preparation and fair presentation of the financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

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

Those charged with governance (including the Audit Committee) are responsible for overseeing the Company’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Financial Statements

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

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

176

Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the investment in other entities accounted for using the equity method to express an opinion on the financial statements. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion.

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

The engagement partners on the audit resulting in this independent auditors’ report are Rou-Lan Kuo and Ying-Ru Chen.

KPMG

Taipei, Taiwan (Republic of China) March 6, 2024

Notes to Readers

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

The independent auditors’ audit report and the accompanying parent company only financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language independent auditors’ audit report and parent company only financial statements, the Chinese version shall prevail.

177

(ENGLISH TRANSLATION OF PARENT COMPANY ONLY FINANCIAL STATEMENTS ORIGINALLY ISSUDED IN CHINESE) ZIPPY TECHNOLOGY CORP. BALANCE SHEETS

DECEMBER 31, 2023 AND 2022

(AMOUNTS EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

2023.12.3	1	2022.12.3	2023.12.3	1	2022.12.3	1
Amount	％	Amount	Amount	％	Amount	％
$ 591,604 37,019 7,454 199,784 81,568 2,919 - 475,199 848 1,701	11 1 - 4 2 - - 9 - -	457,404 - 9,368 261,759 85,823 2,854 30,441 701,898 11,040 2,636	11,258 8,945 153,599 21,049 149,782 11,327 130,146 50,000 7,073	- - 3 - 3 - 3 1 -	13,809 10,348 257,551 - 179,380 14,477 143,862 50,000 3,906	- - 5 - 3 - 3 1 -
			543,179	10	673,333	12
1,398,096	27	1,563,223	1,058,000 15,251 20,457	20 - 1	1,108,000 14,825 20,761	20 - 1
848,606 964,716 2,027,225 20,261 25,706 16,773 84	16 18 38 - 1 - -	816,535 1,004,876 2,037,467 21,082 21,914 14,033 88
			1,093,708	21	1,143,586	21
			1,636,887	31	2,190,638	33
			1,526,487 135,562 2,030,759 (28,228)	29 3 38 (1)	1,526,487 135,564 2,024,209 (23,961)	28 2 37 -
3,903,371	73	3,915,995

			3,664,580	69	3,393,830	67
$ 5,301,467	100	$ 5,479,218	$ 5,301,467	100	$ 5,479,218	100

The accompanying notes are an integral part of financial statements

178

(ENGLISH TRANSLATION OF PARENT COMPANY ONLY FINANCIAL STATEMENTS ORIGINALLY ISSUDED IN CHINESE) ZIPPY TECHNOLOGY CORP.

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022 (AMOUNTS EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

For theyears ended December 31,	For theyears ended December 31,	For theyears ended December 31,	For theyears ended December 31,	For theyears ended December 31,
2023		％	2022	％
$ 1,995,167) 1,213,045) 782,122) 42,064) 38,969) 779,027) 40,891) 152,502) 68,239) (265) 261,367) 517,660) 16,617) 114,988) 1,894) (22,753) 41,596) 152,342) 670,002) 128,397) 541,605) (1,028) 38) 205) (785) (4,267) - (4,267) (5,052) $ 536,553) $ $		100) 61)	2,430,884) 1,536,829)	100) 63)
	782,122) 42,064) 38,969)	39) 2) 2)	894,055) 38,969) 23,197)	37) 2) 1)
	779,027)	39)	878,283)	36)
	40,891) 152,502) 68,239) (265)	2) 8) 3) -	44,711) 188,758) 70,873) (2,900)	2) 8) 3) -
	261,367)	13)	301,442)	13)
	517,660)	26)	576,841)	23)
	16,617) 114,988) 1,894) (22,753) 41,596)	1) 6) - (1) 2)	2,946) 107,442) 44,325) (17,821) 105,850)	- 4) 2) (1) 4)
	152,342)	8)	242,742)	9)
	670,002) 128,397)	34) 6)	819,583) 143,746)	32) 6)
	541,605)	28)	675,837)	26)
	(1,028) 38) 205)	- - -	10,400) 338) (2,080)	- - -
	(785)	-	8,658)	-
	(4,267) -	- -	41,920) -	2) -
	(4,267)	-	41,920)	2)
	(5,052)	-	50,578)	2)
		28)	726,415)	28)
		3.55)		4.43)
		3.54)		4.41)

The accompanying notes are an integral part of financial statements

179

(ENGLISH TRANSLATION OF PARENT COMPANY ONLY FINANCIAL STATEMENTS ORIGINALLY ISSUDED IN CHINESE) ZIPPY TECHNOLOGY CORP.

STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022 (AMOUNTS EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Capital Stock	Capital Surplus		Retained Earnings	Retained Earnings		Other Equity	Total Equity
						Exchange Differences on Translation of Foreign Financial Statements
Share Capital		Legal Reserve	Special Reserve	Unappropriated Retained Earnings	Total
	135,564)	798,109)	51,068	948,483)	1,797,660)	(65,881)	3,393,830)
- -	- -	- -	- -	675,837) 8,658)	675,837) 8,658)	- 41,920)	675,837) 50,578)
-	-	-	-	684,495)	684,495)	41,920)	726,415)
- - -	- - -	58,113) - -	- 14,811) -	(58,113) (14,811) (457,946)	- - (457,946)	- - -	- - (457,946)
1,526,487) - -	135,564) - -	856,222) - -	65,879 - -	1,102,108) 541,605 (785)	2,024,209) 541,605) (785)	(23,961) - (4,267)	3,662,299) 541,605) (5,052)
-	-	-	-	540,820)	540,820)	(4,267)	536,553)
- - - -	- - - (2)	68,450) - - -	- (41,919) - -	(68,450) 41,919) (534,270) -	- - (534,270) -	- - - -	- - (534,270) (2)
	135,562)	924,672)	23,960	1,082,127)	2,030,759)	(28,228)	3,664,580)

The accompanying notes are an integral part of financial statements

180

(ENGLISH TRANSLATION OF PARENT COMPANY ONLY FINANCIAL STATEMENTS ORIGINALLY ISSUDED IN CHINESE) ZIPPY TECHNOLOGY CORP. STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022 (AMOUNTS EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Cash flows from operating activities: Profit before income tax Adjustments: Adjustments to reconcile profit before income tax to net cash provided by operating activities: Depreciation expense Amortization expense Expected credit loss (gain) Net loss (gain) on financial assets and liabilities at fair value through profit or loss Interest expense Interest income Share of profit of subsidiaries, associates and joint ventures accounted for using equity method Loss on disposal of property, plant and equipment Unrealized profit (loss) from sales Realized profit (loss) from sales Total adjustments to reconcile profit Changes in operating assets and liabilities: Changes in operating assets: Notes receivable Accounts receivable Accounts receivable due from related parties Other receivables Other receivables due from related parties Inventories Other prepayments Other current assets Total changes in operating assets Changes in operating liabilities: Contract liabilities Notes payable Accounts payable Payables to related parties Other payables Other payables due to related parties Other current liabilities Net defined benefit liabilities, non-current Total changes in operating liabilities Total changes in operating assets and liabilities Total adjustments Cash inflow (outflow) generated from operations Interest received Dividends received Interest paid Income taxes paid Net cash flows from (used in) operating activities Cash flows from investing activities: Acquisition of financial assets at fair value through profit or loss Acquisition of property, plant and equipment income Proceeds from disposal of property, plant and equipment Increase in guarantee deposits paid Acquisition of intangible assets Increase in prepayments for business facilities Net cash flows (used in) from investing activities Cash flows from financing activities: Decrease in short-term borrowings Repayments of long-term borrowings (Decrease) increase in guarantee deposits received Cash dividends paid Payment of overdue cash dividends Net cash flows (used in) from financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period	2023 $ 670,002) 62,209) 1,049) (265) (1,090) 22,753) (16,617) (41,596) (17) 42,064) (38,969) 29,521) 1,914) 62,240) 4,255) 451) 30,441) 226,699) 10,192) 935) 337,127) (2,551) (1,403) (103,952) 21,049) (30,611) (3,150) 3,167) (602) (118,053) 219,074) 248,595) 918,597) 16,101) 2,201) (22,590) (145,700) 768,609) (35,929) (7,377) 120) 4) (228) (6,423) (49,833) --- (50,000) (304) (534,270) (2) (584,576) 134,200) 457,404) 591,604)	2022
		819,583) 60,977) 969) (2,900) --- 17,821) (2,946) (105,850) 52) 38,969) (23,197)
		(16,105)
		7,350) 72,110) (26,467) 7,803) 9,640) 23,686) 4,324) 150)
		98,596)
		(3,551) (17,870) (273,610) --- 22,611) (6,959) (988) (11,488)
		(291,855)
		(193,259)
		(209,364)
		610,219) 2,897) 1,799) (17,388) (136,485)
		461,042)
		--- (22,771) 790) --- (705) (12,629)
		(35,315)
		(25,000) (50,000) 2,544) (457,946) ---
		(530,402)
		(104,675) 562,079)
		457,404)

The accompanying notes are an integral part of financial statements

181

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese)

ZIPPY TECHNOLOGY CORP.

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(1) Overview

Zippy Technology Corp. (the “Company”) was established on April 25, 1983, which was a limited company. The Company reorganized into a company limited by shares in 1988. The shares of the Company was listed and traded at the ROC Securities Over-the-Counter Trading Center on May 25, 1996. Through the listing application to the Taiwan Stock Exchange in June 2000, the shares of the Company became officially listed and traded on the Taiwan Stock Exchange on September 11, 2000. The Company engages primarily in the designing, manufacturing and trading of micro switches, power supplies.

(2) Financial Statements Authorization Date and Authorization Process

The financial statements were authorized for issuance by the Board of Directors on March 6, 2024.

(3) New Standards, Amendments and Interpretations not yet Adopted:

(a) The impact of the International Financial Reporting Standards (“IFRSs”) endorsed by the Financial Supervisory Commission, R.O.C. (“FSC”) which have already been adopted.

The Company has initially adopted the following new amendments, which do not have a significant impact on its financial statements, from January 1, 2023:

Amendments to IAS 1 “Disclosure of Accounting Policies”
Amendments to IAS 8 “Definition of Accounting Estimates”
Amendments to IAS 12 “Deferred Tax Related to Assets and Liabilities Arising from a Single Transaction”

The Company has initially adopted the following new amendments, which do not have a significant impact on its consolidated financial statements, from May 23, 2023:

Amendments to IAS12 “International Tax Reform – Pillar Two Model Rules”
(b) The impact of IFRS issued by IASB but not yet endorsed by the FSC.

The Company assesses that the adoption of the following new amendments, effective for annual period beginning on January 1, 2024, would not have a significant impact on its financial statements:

Amendments to IAS 1 “Classification of Liabilities as Current or Non-current”
Amendments to IAS 1 “Non-current Liabilities with Covenants”
Amendments to IAS 7 and IFRS 7 “Supplier Finance Arrangements”
Amendments to IFRS16 “Requirements for Sale and Leaseback Transactions”
(c) The impact of IFRS issued by IASB but not yet endorsed by the FSC

182

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese)

ZIPPY TECHNOLOGY CORP.

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

The Company expects that the adoption of the following IFRSs, which IASB issues but not yet endorsed by the FSC, would not have any material impact on its financial statements.

Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets Between an Investor and Its Associate or Joint Venture”
IFRS 17 “Insurance Contracts” and Amendments to IFRS 17 “Insurance Contracts”
Amendments to IAS 21 “Lack of Exchangeability”

(4) Significant Accounting Policies

The accompanying parent company only financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of, the English and Chinese language parent company only financial statements, the Chinese version shall prevail.

The significant accounting policies presented in the financial statements are summarized below. Except for the explanation, the following accounting policies were applied consistently throughout the periods presented in the financial statements.

(a) Statement of compliance

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

(b) Basis of preparation
Basis of measurement

Except for the defined benefit liabilities (assets) are measured at fair value of the plan assets less the present value of the defined benefit obligation, limited as explained in Note 4(p), the financial statements have been prepared on a historical cost basis.

Functional and presentation currency

The functional currency of the Company is determined based on the primary economic environment in which the entity operates. The financial statements are presented in New Taiwan Dollar, which is the Company’s functional currency. All financial information presented in New Taiwan Dollar has been rounded to the nearest thousand.

(c) Foreign currencies
Foreign currency transaction

Transactions in foreign currencies are translated into the respective functional currencies of Company entities at the exchange rates at the dates of the transactions. At the end of each subsequent reporting period, monetary items denominated in foreign currencies are translated into the functional currencies using the exchange rate at that date. Non-monetary items denominated in foreign currencies that are measured at fair value are translated into the functional currencies using the exchange rate at the date that the fair value was determined. Nonmonetary items denominated in foreign currencies that are measured based on historical cost are translated using the exchange rate at the date of the transaction.

183

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese)

ZIPPY TECHNOLOGY CORP.

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Exchange differences are generally recognized in profit or loss, except for those differences relating to the following, which are recognized in other comprehensive income:

1) an investment in equity securities designated as at fair value through other comprehensive income;
2) a financial liability designated as a hedge of the net investment in a foreign operation to the extent that the hedge is effective; or
3) qualifying cash flow hedges to the extent that the hedges are effective.
Foreign operations

When a foreign operation is disposed of such that control, significant influence, or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal. When the Company disposes of only part of its investment in an associate or joint venture that includes a foreign operation while retaining significant influence or joint control, the relevant proportion of the cumulative amount is reclassified to profit or loss.

(d) Classification of current and non-current assets and liabilities

An asset is classified as current under one of the following criteria, and all other assets are classified as non-current.

It is expected to be realized, or intended to be sold or consumed, in the normal operating cycle;
It is held primarily for the purpose of trading;
It is expected to be realized within twelve months after the reporting period; or
The asset is cash or a cash equivalent (as defined in IAS 7) unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

A liability is classified as current under one of the following criteria, and all other liabilities are classified as non-current.

An entity shall classify a liability as current when:

184

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese)

ZIPPY TECHNOLOGY CORP.

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

It is expected to be settled in the normal operating cycle;
It is held primarily for the purpose of trading;
It is due to be settled within twelve months after the reporting period; or
The Company does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting period. Terms of a liability that could, at the option of the counterparty, result in its settlement by issuing equity instruments do not affect its classification.
(e) Cash and cash equivalents

(f) Financial instruments

Trade receivables are initially recognized when they are originated. All other financial assets and financial liabilities are initially recognized when the Company becomes a party to the contractual provisions of the instrument. A financial asset or financial liability is initially measured at fair value plus, for an item not at fair value through profit or loss (FVTPL), transaction costs that are directly attributable to its acquisition or issue.

Financial assets

All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis.

On initial recognition, a financial asset is classified as measured at: amortized cost and FVTPL. Financial assets are not reclassified subsequent to their initial recognition unless the Company changes its business model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model.

1) Financial assets measured at amortized cost

A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as at FVTPL:

‧it is held within a business model whose objective is to hold assets to collect contractual cash flows; and
‧its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

185

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese)

ZIPPY TECHNOLOGY CORP.

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

2) Fair value through profit or loss (FVTPL)

All financial assets not classified as amortized cost or FVOCI described as above are measured at FVTPL, including derivative financial assets. On initial recognition, the Company may irrevocably designate a financial asset, which meets the requirements to be measured at amortized cost or at FVOCI, as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognized in profit or loss.

3) Impairment of financial assets

The Company recognizes loss allowances for expected credit losses (ECL) on financial assets measured at amortized cost (including cash and cash equivalents, amortized costs, notes and trade receivables, other receivable and guarantee deposit paid).

The Company measures loss allowances at an amount equal to lifetime ECL, except for the following which are measured as 12-month ECL:

‧debt securities that are determined to have low credit risk at the reporting date; and
‧other debt securities and bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition.

Loss allowance for trade receivables and contract assets are always measured at an amount equal to lifetime ECL.

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECL, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis based on the Company’s historical experience and informed credit assessment as well as forward-looking information.

Lifetime ECL are the ECL that result from all possible default events over the expected life of a financial instrument.

12-month ECL are the portion of ECL that result from default events that are possible within the 12 month after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months).

The maximum period considered when estimating ECL is the maximum contractual period over which the Company is exposed to credit risk.

ECL are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e the difference between the cash flows due to the Company in accordance with the contract and the cash flows that the Company expects to receive). ECL are discounted at the effective interest rate of the financial asset.

At each reporting date, the Company assesses whether financial assets carried at amortized cost is credit-impaired. A financial asset is ‘credit-impaired’ when one or more events that have

186

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese)

ZIPPY TECHNOLOGY CORP.

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

a detrimental impact on the estimated future cash flows of the financial asset have occurred. Evidence that a financial assets is credit-impaired includes the following observable data:

‧significant financial difficulty of the borrower or issuer;
‧a breach of contract such as a default;
‧the lender of the borrower, for economic or contractual reasons relating to the borrower's financial difficulty, having granted to the borrower a concession that the lender would not otherwise consider;
‧it is probable that the borrower will enter bankruptcy or other financial reorganization; or
‧the disappearance of an active market for a security because of financial difficulties.

Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the assets.

The gross carrying amount of a financial asset is written off when the Company has no reasonable expectations of recovering a financial asset in its entirety or a portion thereof. For corporate customers, the Company individually makes an assessment with respect to the timing and amount of write-off based on whether there is a reasonable expectation of recovery. The Company expects no significant recovery from the amount written off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Company’s procedures for recovery of amounts due.

4) Derecognition of financial assets

The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Company neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.

Financial liabilities and equity instruments
1) Financial liabilities

Financial liabilities are classified as measured at amortized cost.

Other financial liabilities are subsequently measured at amortized cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognized in profit or loss. Any gain or loss on derecognition is also recognized in profit or loss.

2) Derecognition of financial liabilities

The Company derecognizes a financial liability when its contractual obligations are discharged or cancelled, or expire. The Company also derecognizes a financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognized at fair value.

187

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese)

ZIPPY TECHNOLOGY CORP.

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

3) Offsetting of financial assets and liabilities

Financial assets and financial liabilities are offset and the net amount presented in the statement of balance sheet when, and only when, the Company currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realize the asset and settle the liability simultaneously.

(g) Inventories

Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.

(h) Investment in subsidiaries

The subsidiaries in which the Company holds controlling interest are accounted for under equity method in the parent company only financial statements. Under equity method, the net income, other comprehensive income and equity in the parent company only financial statement are the same as those attributable to the owners of parent in the consolidated financial statements.

The changes in ownership of the subsidiaries are recognized as equity transaction.

(i) Investment Property

Any gain or loss on disposal of an investment property (calculated as the difference between the net proceeds from disposal and the carrying amount) is recognized in profit or loss.

A property is reclassified to property, plant, and equipment at its carrying amount when the use of the property changes from owner occupied to property, plant, and equipment.

(j) Property, plant, and equipment
Recognition and measurement

188

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese)

ZIPPY TECHNOLOGY CORP.

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Items of property, plant and equipment are measured at cost, which includes capitalized borrowing costs, less accumulated depreciation and any accumulated impairment losses.

If significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

Any gain or loss on disposal of an item of property, plant and equipment is recognized in profit or loss.

Subsequent expenditure

Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with the expenditure will flow to the Company.

Depreciation

Land is not depreciated.

The estimated useful lives of property, plant and equipment for current and comparative periods are as follows:

are as follows:
Buildings	37 ~ 55 years
Machinery	8 ~ 10 years
Transportation equipment	4 ~ 7 years
Furniture and office facilities	3 ~ 5 years
Other equipment	2 ~ 10 years

Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

Reclassification to investment property

A property is reclassified to investment property at its carrying amount when the use of the property changes from owner occupied to investment property.

(k) Leases

At inception of a contract, the Company assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

As a leasee

The Company recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

189

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese)

ZIPPY TECHNOLOGY CORP.

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be reliably determined, the Company’s incremental borrowing rate. Generally, the Company uses its incremental borrowing rate as the discount rate.

Lease payments included in the measurement of the lease liability comprise the following:

－ fixed payments, including in-substance fixed payments;

－ variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;

－ amounts expected to be payable under a residual value guarantee; and

－ payments for purchase or termination options that are reasonably certain to be exercised.

The lease liability is measured at amortized cost using the effective interest method. It is remeasured when:

－ there is a change in future lease payments arising from the change in an index or rate; or

－ ’ there is a change in the Company s estimate of the amount expected to be payable under a residual value guarantee; or

－ there is a change in the lease term resulting from a change of its assessment on whether it will exercise an option to purchase the underlying asset; or

－ there is a change of its assessment on whether it will exercise a purchase, extension or termination option; or

－ there is any lease modifications

When the lease liability is remeasured to reflect the partial or full termination of the lease for lease modifications that decrease the scope of the lease, the Company accounts for the remeasurement of the lease liability by decreasing the carrying amount of the right-of-use asset to reflect the partial or full termination of the lease, and recognize in profit or loss any gain or loss relating to the partial or full termination of the lease.

The Company presents right-of-use assets that do not meet the definition of investment properties and lease liabilities as a separate line item respectively in the statement of financial position.

For a contract that contains lease components and non-lease components, the Company allocates the consideration in the contract to each lease component on the basis of its relative stand-alone price. Only for a lease of land and building, the Company elects not to separate non-lease

190

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese)

ZIPPY TECHNOLOGY CORP.

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

components from lease components, and instead account for each lease component and any associated non-lease components as a single lease component.

The Company has elected not to recognize right-of-use assets and lease liabilities for short-term leases of parking space and photocopying equipment rental that have a lease term of 12 months or less and leases of low-value assets, including other equipment. The Company recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

2. As a leasor

When the Company acts as a lessor, it determines at lease commencement whether each lease is a finance lease or an operating lease. To classify each lease, the Company makes an overall assessment of whether the lease transfers to the lessee substantially all of the risks and rewards of ownership incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then the lease is an operating lease. As part of this assessment, the Company considers certain indicators such as whether the lease is for the major part of the economic life of the asset.

For a contract that contains lease components and non-lease components, the Company uses IFRS 15 to allocate the consideration in the contract.

(l) Intangible assets

Recognition and measurement

Expenditure on research activities is recognized in profit or loss as incurred.

Development expenditure is capitalized only if the expenditure can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable and the Company intends to, and has sufficient resources to, complete development and to use or sell the asset. Otherwise, it is recognized in profit or loss as incurred. Subsequent to initial recognition, development expenditure is measured at cost, less accumulated amortization and any accumulated impairment losses.

Other intangible assets, which are acquired by the Company and have finite useful lives, are measured at cost less accumulated amortization and any accumulated impairment losses.

Subsequent expenditure

Amortization

Amortization is calculated over the cost of the asset, less its residual value, and is recognized in profit or loss on a straight-line basis over the estimated useful lives of intangible assets.

The estimated useful lives for current and comparative periods are as follows:

Computer software cost 5 ~10 years Capitalized development cost 2 years

191

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese)

ZIPPY TECHNOLOGY CORP.

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Amortization methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

(m) Impairment of non-financial assets

At each reporting date, the Company reviews the carrying amounts of its non-financial assets (other than inventories, deferred tax assets, and investment property measured at fair value) to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated.

An impairment loss is recognized if the carrying amount of an asset or CGU exceeds its recoverable amount.

(n) Provisions

A provision is recognized if, as a result of a past event, the Company has a present obligation that can be estimated reliably, and it is probably that an outflow of economic benefits will be required to settle the obligation.

(o) Revenue
Revenue from contracts with customers

Revenue is measured based on the consideration to which the Company expects to be entitled in exchange for transferring goods or services to a customer. The Company recognizes revenue when it satisfies a performance obligation by transferring control of a good or a service to a customer. The accounting policies for the Company’s main types of revenue are explained below.

1) Sale of goods – power supplies and micro switch

The Company recognizes revenue when control of the products has transferred, being when the products are delivered to the customer, the customer has full discretion over the channel and price to sell the products, and there is no unfulfilled obligation that could affect the customer’s acceptance of the products. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customer, and either the

192

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese)

ZIPPY TECHNOLOGY CORP.

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

customer has accepted the products in accordance with the sales contract, the acceptance provisions have lapsed, or the Company has objective evidence that all criteria for acceptance have been satisfied.

A receivable is recognized when the goods are delivered as this is the point in time that the Company has a right to an amount of consideration that is unconditional.

2) Financing components

The Company does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. As a consequence, the group does not adjust any of the transaction prices for the time value of money.

(p) Employee benefits
Defined contribution plans

Obligations for contributions to defined contribution plans are expensed as the related service is provided.

Defined benefit plans

The Company’s net obligation in respect of defined benefit plans is calculated separately for each the plan by estimating the amount of future benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets.

The calculation of defined benefit obligations is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a potential asset for the Company, the recognized asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. To calculate the present value of economic benefits, consideration is given to any applicable minimum funding requirements.

Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognized immediately in other comprehensive income, and accumulated in retained earnings within equity. The Company determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined benefit liability (asset). Net interest expense and other expenses related to defined benefit plans are recognized in profit or loss.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognized immediately in profit or loss. The Company recognizes gains and losses on the settlement of a defined benefit plan when the settlement occurs.

Short-term employee benefits

Short-term employee benefits are expensed as the related service is provided. A liability is recognized for the amount expected to be paid if the Company has a present legal or constructive

193

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese)

ZIPPY TECHNOLOGY CORP.

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

(q) Income taxes

temporary differences on the initial recognition of assets and liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profits (losses) at the time of the transaction;
temporary differences related to investments in subsidiaries, associates and joint arrangements to the extent that the Company is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future; and
taxable temporary differences arising on the initial recognition of goodwill.

Deferred taxes are measured at tax rates that are expected to be applied to temporary differences when they reserve, using tax rates enacted or substantively enacted at the reporting date.

Deferred tax assets and liabilities are offset if the following criteria are met:

the Company has a legally enforceable right to set off current tax assets against current tax liabilities; and
the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on either:
1) the same taxable entity; or
2) different taxable entities which intend to settle current tax assets and liabilities on a net basis, or to realize the assets and liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.

194

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese)

ZIPPY TECHNOLOGY CORP.

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(r) Earnings per share

The Company discloses the Company’s basic and diluted earnings per share attributable to ordinary equity holders of the Company. The calculation of basic earnings per share is based on the profit attributable to the ordinary shareholders of the Company divided by the weighted-average number of ordinary shares outstanding. The calculation of diluted earnings per share is based on the profit attributable to ordinary shareholders of the Company, divided by the weighted-average number of ordinary shares outstanding after adjustment for the effects of all dilutive potential ordinary shares, such as convertible bonds and employee compensation.

(s) Operating segments

Please refer to the consolidated financial report of Zippy Technology Corp. for the years ended December 31, 2022 and 2021 for operating segments information.

(5) Significant Accounting Judgments, Estimation, Assumptions, and Sources of Estimation Uncertainty

The preparation of the financial statements in conformity with the Regulations Governing the Preparation of Financial Reports by Securities Issuers requires management to make judgments, estimates, and assumptions that affect the application of the accounting policies and the reported amount of assets, liabilities, income, and expenses. Actual results may differ from these estimates.

The Company does not have any accounting policies which involve significant judgment which have significant influence to the annual financial statements.

(a) Loss allowance for Accounts receivable

Loss allowance of accounts receivable for the Company is estimated based on the assumptions of default risk and expected loss rate. The Company considers historical experience, current market conditions and forward-looking estimates on each reporting day to determine the assumptions and input values to be used when calculating impairments. Refer to note 6(b) for further description of related assumptions and input values.

(b) Valuation of inventories

As inventories are stated at the lower of cost or net realizable value, the Company estimates the net realizable value of inventories for obsolescence and unmarketable items at the end of the reporting period and then writes down the cost of inventories to net realizable value. The net realizable value of the inventory is mainly determined based on assumptions as to future demand within a specific time horizon. Due to the rapid industrial transformation, there may be significant changes in the net realizable value of inventories. Refer to note 6(d) for further description of the valuation of inventories.

195

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese)

ZIPPY TECHNOLOGY CORP.

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(6) Explanation to Significant Accounts

(a) Cash and cash equivalents

Cash $ Checking deposits Demand deposits Time deposits Cash and cash equivalents in statement of cash flows $	2023.12.31	2022.12.31
	207 112 71,324 519,961	202 104 278,824 178,274
	591,604	457,404

Refer to Note 6(t) for the currency risk of the financial assets of the Company.

(b) Financial assets and liabilities at fair value through profit or loss
Financial assets and liabilities at fair value through profit or loss

		2023.12.31	2022.12.31
Mandatorily measured at fair value through profit or
loss - Beneficiary certificates	$	37,019	-
1) Refer to Note 6(t) for the credit risks exposure of the financial instrument.
2) As of December 31, 2023 and 2022, the aforesaid financial		assets were not pledged as collateral.
Notes and accounts receivables
		2023.12.31	2022.12.31
Notes receivable	$	7,592	9,506
Accounts receivable		200,395	262,635
Accounts receivable due from related parties		81,568	85,823
Less: Loss allowance		(749)	(1,014)
	$	288,806	356,950

The Company applies the simplified approach to provide for its expected credit losses, i.e. the use of lifetime expected loss provision for all receivables. To measure the expected credit losses, trade receivables have been grouped based on shared credit risk characteristics and the days past due, as well as incorporated forward looking information, including macroeconomic and relevant industry information. The loss allowance provisions were determined as follows:

196

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese)

ZIPPY TECHNOLOGY CORP.

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

	2023.12.31
Gross carrying amount	Weighted- average	Loss allowance provision
	0.30% 19.60%	831 2,461
		3,292

Note: as of the end of February 29, 2024, the amount that received by the Company is $12,555.

	2022.12.31
Gross carrying amount	Weighted- average	Loss allowance provision
	0.30% 22.71%	1,016 4,412
		5,428

The movement in the allowance for notes and accounts receivable was as follows:

Balance at January 1, 2023 and 2022 $ Impairment losses (reversed) recognized Balance at December 31, 2023 and 2022 $	For the years ended December 31,	For the years ended December 31,
	2023	2022
	1,014) (265)	3,914 (2,900)
	749)	1,014

As of December 31, 2023 and 2022, none of the receivables above are pledged as collateral for loans and borrowings.

(d) Other receivables

Other receivables $ Other receivables－related parties $ None of other receivables are past due.	2023.12.31	2022.12.31
	2,919 -	2,854 30,441
	2,919	33,295

Please refer to Note 6(t) for further credit risk information.

197

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese)

ZIPPY TECHNOLOGY CORP.

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(e) Inventories

Raw materials $ Work in process Finished goods $	2023.12.31	2022.12.31
	284,313 139,627 51,259	400,741 207,760 93,397
	475,199	701,898

The movement in the allowance for inventory valuation and obsolescence losses was as follows:

Balance at January 1, 2023 and 2022 $ Write-down (write-up) of inventories Balance at December 31, 2023 and 2022 $	For the years ended December 31, 2023 2022 45,620 33,387 8,550 12,233 54,170 45,620	For the years ended December 31, 2023 2022 45,620 33,387 8,550 12,233 54,170 45,620
		2022
		33,387 12,233
		45,620

For the years ended December 31, 2023, the write-down of inventories amounted to $8,550, which is recognized in operating cost, due to the net realizable value of inventories is lower than the cost.

For the years ended December 31, 2022, the write-down of inventories amounted to $12,233, which is recognized in operating cost, due to the net realizable value of inventories is lower than the cost.

As of December 31, 2023 and 2022, the aforesaid inventories were not pledged as collateral.

(f) Investments accounted for using equity method

The investment using equity method was as follows:

Subsidiaries $	2023.12.31	2022.12.31
	848,606	816,535

1. Subsidiaries

Please refer to the consolidated financial statements for the year ended December 31, 2023.

198

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) ZIPPY TECHNOLOGY CORP.

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(g) Property, plant and equipment

The cost, depreciation, and impairment of the property, plant and equipment of the Company for the years ended December 31, 2023 and 2022 were as follows:

Land	Building and construction	Machinery and equipment	Transportatio n	Office equipment	Other facilities	Total
$ 680,361 - - - $ 680,361 $ 680,361 - - - $ 680,361 $ - - - $ - $ - - - $ - $ 680,361 $ 680,361 $ 680,361	241,444 - - -	308,099 2,690 3,636 -	958 - - -	40,860 858 - (303)	205,503 4,679 47 (1,026)	1,477,225 8,227 3,683 (1,329)
	241,444	314,425	958	41,415	209,203	1,487,806
	241,444 - - -	300,527 4,205 6,540 (3,173)	958 - - -	37,033 3,598 1,007 (778)	187,519 6,681 11,303 -	1,447,842 14,484 18,850 (3,951)
	241,444	308,099	958	40,860	205,503	1,477,225
	97,351 5,306 -	182,891 26,303 -	958 - -	28,466 4,562 (300)	162,683 15,796 (926)	472,349 51,967 (1,226)
	102,657	209,194	958	32,728	177,553	523,090
	92,045 5,306 -	159,173 26,064 (2,346)	885 73 -	25,111 4,118 (763)	147,509 15,174 -	424,723 50,735 (3,109)
	97,351	182,891	958	28,466	162,683	472,349
	138,787	105,231	-	8,687	31,650	964,716
	149,399	141,354	73	11,922	40,010	1,023,119
	144,093	125,208	-	12,394	42,820	1,004,876

As of December 31, 2023 and 2022, the property, plant and equipment were pledged as collateral, please refer to Note 8.

199

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese)

ZIPPY TECHNOLOGY CORP.

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(h) Investment property

Investment property includes its own assets held by the Company. The original non-removable period of leased investment property is one to four years, and some lease contracts stipulate that the lessee has the option to extend the period upon expiration.

The rental income of leased investment property is a fixed amount.

Land and improvement Cost or deemed cost: Balance as of January 1, 2023 $ 1,759,235 Balance as of December 31, 2023 $ 1,759,235 Balance as of January 1, 2022 $ 1,759,235 Balance as of December 31, 2022 $ 1,759,235 Accumulated depreciation and impairment losses: Balance as of January 1, 2023 $ - Depreciation for the year - Balance as of December 31, 2023 $ - Balance as of January 1, 2022 $ - Depreciation for the year - Balance as of December 31, 2022 $ - Carrying amounts: Balance as of December 31, 2023 $ 1,759,235 Balance as of January 1, 2022 $ 1,759,235 Balance as of December 31, 2022 $ 1,759,235 Fair value: Balance as of December 31, 2023 Balance as of December 31, 2022	Land and improvement	Building and construction Total 378,942 2,138,177 378,942 2,138,177 378,942 2,138,177 378,942 2,138,177 100,710 100,710 10,242 10,242 110,952 110,952 90,468 90,468 10,242 10,242 100,710 100,710 267,990 2,027,225 288,474 2,047,709 278,232 2,037,467 $ 2,650,483 $ 2,650,483	Total
			2,138,177
			2,138,177
			2,138,177
			2,138,177
			100,710 10,242
			110,952
			90,468 10,242
			100,710
			2,027,225
			2,047,709
			2,037,467

The fair value of the Company's investment property is based on the evaluation of independent evaluators. The evaluation is based on market value.

200

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese)

ZIPPY TECHNOLOGY CORP.

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

For the year ended December 31, 2023 and 2022, the direct operating expenses incurred by the Company's investment property that generated rental income were $ 3,768 and $ 2,685, respectively.

Please refer to Note 8 for details of the investment property pledged as collateral as of December 31, 2023 and 2022.

(i) Intangible assets

The costs of intangible assets and amortization of the Company for the years ended December 31, 2023 and 2022 were as follows:

Software Cost: Balance as of January 1, 2023 $ 14,742 Additions 228 Balance as of December 31, 2023 $ 14,970 Balance as of January 1, 2022 $ 14,037 Additions 705 Balance as of December 31, 2022 $ 14,742 Accumulated amortization and impairment losses: Balance as of January 1, 2023 $ 12,708 Amortization for the year 1,049 Balance as of December 31, 2023 $ 13,757 Balance as of January 1, 2022 $ 11,739 Amortization for the year 969 Balance as of December 31, 2022 $ 12,708 Carrying amounts: Balance as of December 31, 2023 $ 1,213 Balance as of January 1, 2022 $ 2,298 Balance as of December 31, 2022 $ 2,034	Software	Other intangible assets 20,048 - 20,048 20,048 - 20,048 1,000 - 1,000 1,000 - 1,000 19,048 19,048 19,048	Total
	$ 14,742 228		34,790 228
	$ 14,970		35,018
	$ 14,037 705		34,085 705
	$ 14,742		34,790
			13,708 1,049
	$ 13,757		14,757
	$ 11,739 969		12,739 969
	$ 12,708		13,708
	$ 1,213		20,261
	$ 2,298		21,346
	$ 2,034		21,082

The amortization of intangible assets is respectively included in the statement of comprehensive income:

		For the years ended December	For the years ended December	31,
Operating expenses		2023	2022
	$		1,049	969

201

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese)

ZIPPY TECHNOLOGY CORP.

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(j) Short-term borrowings

The significant details of short-term borrowings were as follows:

Short-term borrowings The significant details of short-term borrowings were as follows:
2023.12.31 Unused credit line $ 1,945,000	2022.12.31
	2,145,000

Please refer to Note 8 for details of the related assets pledged as collateral.

(k) Long-term borrowings

The significant terms and conditions of long-term borrowings were as follows:

Secured bank loans Deduct: due within one year Total Unused credit line		2023.12.31	2023.12.31
	Currency	Interest Rate	Maturity Date Amount 2028.03.08 $ 1,108,000 50,000 $ 1,058,000 $ -	Amount
	TWD	1.71%~2.06%

Secured bank loans Deduct: due within one year Total Unused credit line		2022.12.31	2022.12.31
	Currency	Interest Rate	Maturity Date Amount 2028.03.08 $ 1,158,000 50,000 $ 1,108,000 $ -	Amount
	TWD	1.11%~1.74%

Under credit/loan agreements, the Company shall maintain certain consolidated financial ratios on balance sheet date of semi and annual financial statements. (i.e. liabilities to equity ratio, interest coverage ratio, tangible net worth, etc.) Otherwise, the loans are due and payable immediately. The Company was in compliance with the financial covenants mentioned above.

Please refer to Note 8 for details of the related assets pledged as collateral.

(l) Operating Leases
Leases as Lessor

The Company leases its investment properties. Since almost all risks and rewards belonging to the ownership of the underlying asset have not been transferred and paid, these lease contracts are classified as operating leases. Please refer to note 6 (h) Investment property for details.

Maturity analyses of lease payments, showing the undiscounted lease payments to be received after the reporting date are as follows:

202

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese)

ZIPPY TECHNOLOGY CORP.

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Less than one year $ One to two years Two to three years Three to four years Four to five years More than five years Total undiscounted lease payments $	2023.12.31	2022.12.31
	92,762 60,060 32,814 28,157 25,480 62,112	95,934 77,274 41,651 13,500 10,398 34,089
	301,385	272,846

Please refer to Note 6(s) for further information of the rental revenues incurred by leasing investment properties for the years ended December 31, 2023 and 2022.

(m) Employee benefits

1. Defined benefit plans

Reconciliation of defined benefit obligation at present value and plan asset at fair value are as follows:

Present value of the defined benefit obligations $ Fair value of plan assets Net defined benefit liabilities $	2023.12.31	2022.12.31
	86,283 (71,032)	98,102 (83,277)
	15,251	14,825

The Company makes defined benefit plan contributions to the pension fund account at Bank of Taiwan that provides pensions for employees upon retirement. The plans (covered by the Labor Standards Law) entitle a retired employee to receive an annual payment based on years of service and average salary for the six months prior to retirement.

1) Composition of plan assets

The Company allocates pension funds in accordance with the Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund, and such funds are managed by the Bureau of Labor Funds, Ministry of Labor. With regard to the utilization of the funds, minimum earnings in the annual distributions on the final financial statements shall be no less than the earnings attainable from the amounts accrued two-year time deposits with interest rates offered by local banks.

The Company’s pension reserve account in Bank of Taiwan amounted to $70,174 at the end of December 31, 2023. For information on the utilization of the labor pension fund assets including

203

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese)

ZIPPY TECHNOLOGY CORP.

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

the assets allocation and yield of the fund, please refer to the website of the Bureau of Labor Funds, Ministry of Labor.

2) Movements in present value of the defined benefit obligations

The movements in present value of defined benefit obligations for the Company on 2023 and 2022 were as follows:

Defined benefit obligation at January 1 $ Current service costs and interest Remeasurement on the net defined benefit liability －Experience adjustments arising on the actuarial gain or loss －Actuarial loss (gain) arising from changes in financial assumptions Benefits paid by the plan assets Defined benefit obligation at December 31 $	For the years ended December 31,	For the years ended December 31,
	2023	2022
	98,102) 1,652) 655) 648) (14,774)	106,495) 850) 3,198) (7,611) (4,830)
	86,283)	98,102)

3) Movements of defined benefit plan assets

The movements in the present value of the defined benefit plan assets for the Company on 2023 and 2022 were as follows:

Fair value of plan assets at January 1 $ Interest income Remeasurement on the net defined benefit liability －Return on plan assets (excluding current interest) Contributions made Benefits paid by the plan assets Fair value of plan assets at December 31 $	For the years ended December 31,	For the years ended December 31,
	2023	2022
	83,277 1,414 276 839 (14,774)	69,782 425 5,988 11,912 (4,830)
	71,032	83,277

4) Expenses recognized in profit or loss

The expenses recognized in profit or loss for the Company were as follows:

204

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese)

ZIPPY TECHNOLOGY CORP.

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Current service costs $ Net interest of net liabilities for defined benefit obligations $ Operating cost $ Selling expenses Administration expenses $	For the years ended December 31,	For the years ended December 31,
	2023	2022 249 176 425 82 8 335
	131 107
	238
	238 - -
	238	425

5) Actuarial assumptions

The following are the Company’s principal actuarial assumptions:

Present Value of defined benefit obligations:

Discount rate Future salary increases rate	For the years ended December 31,	For the years ended December 31,
	2023 1.63% 1.00%	2022
		1.75% 1.00%

The expected allocation payment made by the Company to the defined benefit plans for the one year period after the reporting date was $237.

The weighted-average duration of the defined benefit obligation is 10.70 years.

6) Sensitivity analysis

If the actuarial assumptions had changed, the impact on the present value of the defined benefit obligation shall be as follows:

obligation shall be as follows:
		Influences of defined benefit
		obligations
		Increased	Decreased
December 31, 2023
Discount rate (0.25% change)	$	(1,287)	1,325
Increase in future salary (0.25% change)		1,298	(1,266)
December 31, 2022
Discount rate (0.25% change)	$	(1,555)	1,602
Increase in future salary (0.25% change)		1,572	(1,533)

205

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese)

ZIPPY TECHNOLOGY CORP.

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

There is no change in the method and assumptions used in the preparation of sensitivity analysis for 2023 and 2022.

Defined contribution plans

In accordance with the provisions of the Labor Pension Act, the Company contributes an amount equal to 6% of the employee’s monthly wages to the Labor Pension personal account with the Bureau of the Labor Insurance.

The pension costs incurred from the contributions to the Bureau of the Labor Insurance amounted to $12,132 and $12,917 for the years ended December 31, 2023 and 2022, respectively. Except for the accounts payable of $2,154 and $1,912, respectively, the Company has been contributed to the Bureau of the Labor Insurance.

(n) Income taxes
The components of income tax expense (gain) in the years 2023 and 2022 were as follows:

ome taxes The components of income tax expense (gain) in the years 2023 and 2022 were as follows:	023 and 2022 were as follows:	023 and 2022 were as follows:
For the years ended December 31, 2023 2022 Current tax expense Current period $ 131,675) 144,021) Adjustment for prior periods 309) 1,310) 131,984) 145,331) Deferred tax expense Origination and reversal of temporary differences (3,587) (1,585) Income tax expense from continuing operations $ 128,397) 143,746)	For the years ended December 31,
	2023	2022
		144,021) 1,310)
	131,984)	145,331)
	(3,587)	(1,585)
		143,746)

There was no income tax that was directly recognized in equity for 2023 and 2022.

The amount of income tax recognized in other comprehensive income for 2023 and 2022 was as follows:

For the years ended December 31, 2023 2022 Items that will not be reclassified subsequently to profit or loss: Remeasurement from defined benefit plans $ 205) (2,080)	For the years ended December 31,	For the years ended December 31,
	2023	2022
		(2,080)

A reconciliation of income before income tax and income tax expense recognized in profit or loss was as follows:

206

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese)

ZIPPY TECHNOLOGY CORP.

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

For the years ended December 31, 2023 2022 Income before tax $ 670,002) 819,583) Income tax using the statutory tax rate 134,000) 163,917) Tax exemption for securities trading income (203) - Other permanent differences (7,766) (20,302) Tax adjustments in prior periods 309) 1,310) Tax credits (3,671) (3,691) Undistributed earnings additional tax 5,728) 2,512) Income tax expense $ 128,397) 143,746)	For the years ended December 31,	For the years ended December 31,
	2023	2022
		819,583)
	134,000) (203) (7,766) 309) (3,671) 5,728)	163,917) - (20,302) 1,310) (3,691) 2,512)
		143,746)

Deferred Tax Assets and Liabilities
1) Unrecognized Deferred Tax Liabilities

The Company did not recognize any temporary differences related to investment in subsidiaries since the Company has the ability to control the time point when temporary differences are reversed, and it is certain that the differences will not be reversed in the foreseeable future. Related information as of December 31, 2023 and 2022 were as follow:

2023.12.31 Tax effect of taxable Temporary Differences $ 77,025) 2) Unrecognized Deferred Tax Assets	2023.12.31	2022.12.31
		74,550)

Deferred tax assets that have not been recognized in respect of the following items:

2023.12.31 Tax effect of deductible Temporary Differences $ 1,101)	2023.12.31	2022.12.31
		7,351)

As of December 31, 2023 and 2022, the Company estimates that some temporary differences will unlikely to be realized in the foreseeable future, so deferred income tax assets were not recognized.

3) Recognized Deferred Tax Assets and Liabilities

Deferred Tax Assets: Balance at January 1, 2023 $ Recognized in profit or loss Recognized in other comprehensive income Balance at December 31, 2023 $	Unrealized Profit	Allowance for Inventory Valuation Losses	Defined Benefit Plans	Others	Total
	7,794 619 -	9,124 1,710 -	2,965 (120) 205	2,031 1,378 -	21,914 3,587 205
	8,413	10,834	3,050	3,409	25,706

207

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese)

ZIPPY TECHNOLOGY CORP.

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Balance at January 1, 2022 $ Recognized in profit or loss Recognized in other comprehensive income Balance at December 31, 2022 $	Unrealized Profit	Allowance for Inventory Valuation Losses	Defined Benefit Plans	Others	Total 22,409 1,585 (2,080) 21,914
	4,639 3,155 -	6,677 2,447 -	7,343 (2,298) (2,080)	3,750 (1,719) -
	7,794	9,124	2,965	2,031

The Company’s income tax returns through 2021 have been examined and approved by the Tax Authority.

(o) Capital and reserves

Reconciliations of shares outstanding for the years ended December 31, 2023 and 2022, were as follows:

Balance as of January 1 Balance as of December 31	(Unit: Thousand Shares) Common Stock	(Unit: Thousand Shares) Common Stock
	For the Years Ended December 31,
	2023	2022
	152,649	152,649
	152,649	152,649

1. Capital surplus

The components of the capital surplus were as follows:

2023.12.31 Share capital $ 134,815 The movement of net stockholders of associates and joint ventures entity for using equity method 119 Other 628 $ 135,562	2023.12.31	2022.12.31
		134,815 119 630
		135,564

In accordance with the ROC company Act, realized capital reserves can only be reclassified as share capital or distributed as cash dividends after offsetting losses. The aforementioned capital reserves include share premiums and donation gains. In accordance with the securities offering and

208

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese)

ZIPPY TECHNOLOGY CORP.

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Issuance Guidelines, the amount of capital reserve to be reclassified under share capital shall not exceed 10 percent of the actual share capital amount.

Retained earnings

1) Legal reserve

2) Special reserve

In accordance with Permit No.1010012865 as issued by the Financial Supervisory Commission on 6 April 2012, a special reserve equal to the contra account of other shareholders' equity is appropriated from the current and prior period earnings. When the debit balance of any of the contra accounts in the shareholders' equity is reversed, the related special reserve can be reversed. The subsequent reversals of the contra accounts in shareholders' equity shall qualify for additional distributions.

3) Earnings Distribution

During the meeting of shareholders on May 30, 2023 and May 27, 2022, the shareholders approved to distribute the 2022 and 2021 earnings, respectively, as follows:

Dividends distributed to common shareholders Cash	2022	2022		2021 Dividend per share ($) Amount 3.00 457,946
	Dividend per share ($)	Amount		Dividend per share ($)
	$ 3.50	534,270		3.00

On March 6, 2024, the Company's Board of Directors resolved to appropriate the 2023 earnings respectively, as follows:

Dividends distributed to common shareholders Cash	2023	2023
	Dividend per share ($)	Amount
	$ 3.00	457,946

209

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese)

ZIPPY TECHNOLOGY CORP.

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(p) Earnings per share

The following are the calculation of basic earnings per share and diluted earnings per share:

Basic earnings per share: Profit attributable to ordinary shareholders Weighted average number of ordinary shares (thousand shares) Basic earnings per share (NT dollars) Diluted earnings per share: Profit attributable to ordinary shareholders of the Company (adjusted for the effects of all dilutive potential ordinary shares) Weighted average number of ordinary shares (thousand shares) Effect of dilutive potential common shares profit sharing to employees (thousand shares) Weighted average number of ordinary shares (adjusted for the effects of all dilutive potential ordinary shares) Diluted earnings per share (NT dollars)	For the years ended December 31, 2023 2022 $ 541,605 675,837 152,649 152,649 $ 3.55 4.43 $ 541,605 675,837 152,649 152,649 554 754 153,203 153,403 $ 3.54 4.41	For the years ended December 31, 2023 2022 $ 541,605 675,837 152,649 152,649 $ 3.55 4.43 $ 541,605 675,837 152,649 152,649 554 754 153,203 153,403 $ 3.54 4.41
	2023 $ 541,605 152,649 $ 3.55
		675,837
		152,649
		4.43
	$ 541,605 152,649 554 153,203 $ 3.54	675,837
		152,649 754
		153,403
		4.41

(q) Revenue from contracts with customers
Disaggregation of revenue

For the years ended December 31, 2023	For the years ended December 31, 2023	For the years ended December 31, 2023
Power Supplies	Marco Switches 167,865 93,600 493,140 29,977 200,695 139,319 1,124,596 1,124,596	Total
264,742 286,912 58,894 164,605 2,681 92,737		432,607 380,512 552,034 194,582 203,376 232,056
870,571		1,995,167
870,571		1,995,167

210

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese)

ZIPPY TECHNOLOGY CORP.

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

For the years ended December 31, 2022	For the years ended December 31, 2022	For the years ended December 31, 2022
Power Supplies	Marco Switches 178,110 107,637 500,727 38,324 174,347 90,964 1,090,109 1,090,109 2022.12.31	Total
496,077 364,400 144,032 187,965 3,896 144,405		674,187 472,037 644,759 226,289 178,243 235,369
1,340,775		2,430,884
1,340,775		2,430,884
2023.12.31		2022.1.1
11,258	13,809	17,360

Contract liabilities are mainly derived from the difference between the time when the Company transfers goods or services to the customer to meet the performance obligation and the time when the customer pays. The Company will transfer revenue when the performance obligation is met.

(r) Remuneration of employees, directors and supervisors

The remuneration of employees amounted to $25,882 and $22,649 and the remuneration of directors amounted to $17,254 and $15,019 for the years ended December 31, 2022 and 2021, respectively. There were no differences between the amounts to be distributed as remuneration to employees and

211

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese)

ZIPPY TECHNOLOGY CORP.

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

directors in 2022 and 2021 and the amounts stated in the individual reports. Related information would be available at the Market Observation Post System.

(s) Non-operating income and expenses
Interest income

The details of other income for the years ended December 31, 2023 and 2022, were as follows:

For the years ended December 31, 2023 2022 Interest income $ 16,617 2,946	For the years ended December 31,	For the years ended December 31,
	2023	2022
		2,946

Other income

The details of other income for the years ended December 31, 2023 and 2022, were as follows:

For the years ended December 31, 2023 2022 Rental income $ 99,104 86,311 Others 15,884 21,131 Total $ 114,988 107,442	For the years ended December 31,	For the years ended December 31,
	2023	2022
		86,311 21,131
		107,442

3. Other income and losses

The details of other income and losses for the years ended December 31, 2023 and 2022, were as follows:

For the years ended December 31, 2023 2022 Losses from disposal of property, plant and equipment $ 17 (52) Foreign exchange (losses) gains 910 44,377 Net gains (losses) on financial assets (liabilities) measured at fair value through profit or loss 1,090 - Others (123) - Total $ 1,894 44,325	For the years ended December 31,	For the years ended December 31,
	2023	2022
		(52) 44,377 - -
		44,325

Finance costs

The details of finance expenses for the years ended December 31, 2023 and 2022, were as follows:

For the years ended December 31, 2023 2022 Interest expenses Bank borrowings $ (22,753) (17,821)	For the years ended December 31,	For the years ended December 31,
	2023	2022
		(17,821)

212

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese)

ZIPPY TECHNOLOGY CORP.

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Share of profit (loss) of subsidiaries, associates and joint ventures accounted for using equity method

Share of profit (loss) of subsidiaries, associates and joint ventures accounted for using equity method	t ventures accounted for using equity	t ventures accounted for using equity
For the years ended December 31, 2023 2022 Long-term investment income $ 41,596 105,850	For the years ended December 31,
	2023	2022
		105,850

(t) Financial instruments
Credit risks
1) Credit risks exposure

The maximum credit risk exposure of the Company on December 31, 2023 and 2022 that may be caused by the failure of the counterparty to perform its obligations and financial guarantees provided by the Company mainly comes from:

A. the book value of financial assets recognized on the balance sheet

B. financial guarantees provided by the Company were $97,185 and $95,205, respectively.

2) Condition of credit risk concentration

In order to reduce the credit risk of accounts receivable, the Company continuously evaluates the financial status of customers. The Company still regularly evaluates the possibility of accounts receivable recovery and makes allowance for losses, and the impairment losses are always within the expectations of the management. As of December 31, 2023 and 2022, 34% and 36% of accounts receivable were attributable to three major customers. Thus, credit risk is significantly centralized.

3) Credit risk of accounts receivable

Please refer to Note (6) (c) for further information about credit risk exposure of notes receivable and accounts receivable.

Other financial assets measured at amortized cost include other receivables. Please refer to Note (6) (d) for further information and the provision of allowance for losses.

Other receivables are financial assets with low credit risk. Therefore, the amount of allowance for losses for the period is calculated based on the 12-month expected credit loss amount for the period (please refer to Note (4) (f) for the explanation of how the Company determines that the credit risk is low).

Liquidity risks

The following are the contractual maturities of financial liabilities of the Company, including the impact of estimation of interest:

213

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese)

ZIPPY TECHNOLOGY CORP.

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Contractual cash flows	Less than 6 months	6 to 12 months	1 to 2 years	2 to 5 years	More than 5 years
1,188,733 8,945 174,648 161,109 20,457	35,404 8,945 174,648 161,109 337	35,169 - - - 34	69,574 - - - 12,091	1,048,586 - - - 1,678	- - - - 6,317
1,553,892	380,443	35,203	81,665	1,050,264	6,317
1,235,311 10,348 257,551 179,380 14,477 20,761	33,183 10,348 257,551 179,380 14,477 190	33,050 - - - - 486	65,564 - - - - 5,049	192,288 - - - - 13,744	911,226 - - - - 1,292
1,717,828	495,129	33,536	70,613	206,032	912,518

The Company is not expecting that the cash flows included in the maturity analysis could occur significantly earlier or at significantly different amounts.

3. Currency risks

1) Exposure to currency risks

The Company’s exposures to significant currency risk were those from its foreign currency denominated financial assets and liabilities as follows:

214

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese)

ZIPPY TECHNOLOGY CORP.

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Financial assets Monetary items USD EUR CNY Non-monetary items USD CNY EUR Financial Liabilities Monetary items CNY Financial assets Monetary items USD EUR CNY JPY Non-monetary items USD CNY EUR Financial Liabilities Monetary items JPY USD		2023.12.31	TWD 659,450 36,018 83,244 418,334 355,588 69,043 21,049 TWD 454,202 39,643 88,169 6,149 396,686 345,957 60,805 TWD 7,975 37,617
	Foreign currency (Inthousand) $ 21,456 1,059 19,208 $ 13,611 82,050 2,030 $ 4,857	Exchange rate USD：TWD 30.7350 EUR：TWD 34.0114 CNY：TWD 4.3338 USD：TWD 30.7350 CNY：TWD 4.3338 EUR：TWD 34.0114 CNY：TWD 4.3338 2022.12.31
	Foreign currency (In thousand) $ 14,791 1,212 19,959 26,457 $ 12,918 78,315 1,859	Exchange rate USD：TWD 30.7080 EUR：TWD 32.7086 CNY：TWD 4.4175 JPY：TWD 0.2324 USD：TWD 30.7080 CNY：TWD 4.4175 EUR：TWD 32.7086 2021.12.31
	Foreign currency (Inthousand) $ 34,317 1,225	Exchange rate JPY：TWD 0.2324 USD：TWD 30.7080

215

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese)

ZIPPY TECHNOLOGY CORP.

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

2) Sensitivity analysis

The Company’s exposure to foreign currency risk arises from the translation of the foreign currency exchange gains and losses on cash and cash equivalents, accounts receivable, other receivables, accounts payable and other payables that are denominated in foreign currency. A 1% depreciation or appreciation of the functional currency against all the non-functional currency as of December 31, 2023 and 2022 would have increased or decreased the net profit after tax by $6,061 and $4,341, respectively. The analysis is performed on the same basis for both periods.

3) Gains or losses on foreign exchange

For the years ended December 31, 2023 and 2022, the foreign exchange gain (loss), including realized and unrealized, amounted to $910 and $44,377, respectively.

4. Interest rate analysis

The Company’s financial assets and financial liabilities with interest rate exposure risk were noted in the liquidity risk section.

If the interest rate increases or decreases by 1%, the Company’s profit will decrease or increase by $8,864 and $9,264 for the years ended December 31, 2023 and 2022, respectively, assuming all other variable factors remain constant. This is mainly due to the Company's variable rate in borrowings.

Fair value of financial instruments
1) Fair value hierarchy

216

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese)

ZIPPY TECHNOLOGY CORP.

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

		2023.12.31	2023.12.31
		Fair Value
	Level 1 37,019	Level 2 -	Level 3 -	Total 37,019
591,604 291,725 84	- - -	- - -	- - -	- - -
883,413	-	-	-	-
	37,019	-	-	37,019
	- - - -	- - - -	- - - -	- - - -
	-	-	-	-

		2022.12.31	2022.12.31
Book Value	Level 1	Fair Value
		Level 2	Level 3	Total
457,404 390,245 88	- - -	- - -	- - -	- - -
	-	-	-	-
	- - - -	- - - -	- - - -	- - - -
	-	-	-	-

217

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese)

ZIPPY TECHNOLOGY CORP.

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

2) Valuation techniques and assumption for financial instruments measured at fair value:

The fair value of financial assets and liabilities were decided in accordance with the solutions as follows:

(2.1) Funds are financial assets with standard terms which are traded in the active markets. Their fair values are based on the quoted market prices.
(2.2) The fair value of unquoted equity instruments were estimated using either the discounted cash flow model in which future cash flow were estimated and discounted or the fair value of the recognized assets and liabilities of the consolidated subsidiaries on the measurement day.
3) Transfers between levels

There were no transfers between any level of the fair value for the years ended December 31, 2023 and 2022.

(u) Financial risk management
Overview

The Company has exposures to the following risks from its financial instruments:

1) credit risk
2) liquidity risk
3) market risk

The following likewise discusses the Company’s objectives, policies and processes for measuring and managing the above mentioned risks.

Risk management framework

The Company's financial management department provides services for each business, coordinates the entry into the domestic and international financial markets, and monitors and manages the financial risks related to the Company's operations by analyzing internal risk reports based on the degree and breadth of risk. The Company will use derivative financial instruments to evade storm risk in order to reduce the impact of these risks. The use of derivative financial instruments is regulated by the policies adopted by the Company's board of directors, which are written principles for exchange rate risk, interest rate risk, credit risk, the use of derivative financial instruments and non-derivative financial instruments, and the investment of remaining liquid funds. Internal auditors continue to review compliance with policies and the risk limit. The Company does not trade financial instruments (including derivative financial instruments) for speculative purposes. The financial management department reports quarterly to the Company's board of directors. The board of directors is an independent organization responsible for monitoring risks and implementing policies to reduce risk.

Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligation. The Company is exposed to credit risk primarily through its accounts receivable.

218

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese)

ZIPPY TECHNOLOGY CORP.

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

1) Accounts receivable and other receivable

The Company's credit risk exposure is mainly affected by the individual conditions of each customer. However, the management also considers the statistical data of the Company's customer base, including the default risk of the customer's industry and country, as these factors may affect credit risk.

The sales department has established a credit policy. According to this policy, the Company must analyze the credit rating of each new customer individually before granting standard payment and shipping conditions and terms. The Company's review is based on external ratings and, in some cases, bank notes. The purchase limit is established by individual customers. This limit is regularly reviewed. Customers who do not meet the Company's benchmark credit rating can only trade with the Company on an advance receipt basis.

The Company has set up a loss allowance account to reflect the estimated loss of accounts receivable and other receivables and investments.

2) Investments

The credit risk of bank deposits, fixed income investments and other financial instruments is measured and monitored by the Company's financial department. Since the Company’s trading partners and contract performance parties are creditworthy banks and financial institutions and corporate organizations with investment grade or above, there are no major performance concerns, so there is no major credit risk.

3) Guarantee

The Company’s policy stipulates that only financial guarantees can be provided to related parties or parties with transactions. Please refer to Note 13(a) for further guarantee information as of December 31, 2023 and 2022.

4. Liquidity risk

Liquidity risk is a risk that the Company is unable to meet the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure, as much as possible, that it always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.

Generally speaking, the Company ensures that there is sufficient cash to meet the expected operating expenditure requirements for 60 days, including the fulfillment of financial obligations, but excludes potential impacts that cannot be reasonably expected under extreme circumstances, such as natural disasters. As of December 31, 2023 and 2022, the Company's unused credit line were amounted to $1,945,000 and $2,145,000, respectively.

Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rate, and equity prices which will affect the Company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters while optimizing the return.

In order to manage market risks, the Company chooses reputable securities investment trust companies for financial asset transactions, and manages market risks through professional managers

219

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese)

ZIPPY TECHNOLOGY CORP.

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

1) Currency risk

The Company is exposed to currency risk on sales, purchases and borrowings that are denominated in a currency other than the functional currency of the Company primarily the New Taiwan Dollars (TWD), and USD, EUR and CNY, etc.. The currencies used in these transactions are denominated in TWD, EUR, USD, JPY and CNY.

Loan interest is priced in the currency of the principal of the loan. Generally speaking, the currency of the loan is the same as the currency of the cash flow generated by the Company's operations, mainly the New Taiwan dollar. In this case, economic hedging is provided without the need to sign derivatives, so hedging accounting is not adopted.

Regarding other monetary assets and liabilities denominated in foreign currencies, when short-term imbalance occurs, the Company buys or sells foreign currencies at real-time exchange rates to ensure that the net risk insurance remains at an acceptable level.

2) Interest rate risk

The Company’s interest rate risk arises from long-term and short-term borrowings bearing floating interest rates. The fluctuations of the market interest rate changes with the floating interest rates of the long-term and short-term borrowings, and thus affect the future cash flow. However, market interest rates have not changed much, so changes in interest rates will not generate significant cash flow risks.

(v) Capital Management

The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. Capital consists of ordinary shares, additional paid-in capital, retained earnings of the Company. The Board of Directors monitors the return on capital as well as the level of dividends to ordinary shareholders.

The Company's capital management goal is to ensure the ability to continue operations, to continue to provide shareholder compensation and other stakeholders' benefits, and to maintain the best capital structure to reduce capital costs.

In order to maintain or adjust the capital structure, the Company may adjust dividends paid to shareholders, reduce capital to return shareholders' shares, issue new shares or sell assets to settle liabilities.

The Company’s debt to equity ratio at the reporting date was as follows:

Profit Total Equity Return on Equity	2023.12.31	2022.12.31
	$ 541,605	675,837
	$ 3,664,580	3,662,299
	14.78%	18.45%

According to the Company’s management, there were no changes in the Company’s approach to capital management as of December 31, 2023.

220

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese)

ZIPPY TECHNOLOGY CORP.

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(7) Related Party Transactions

(a) Names and relationship with related parties

The followings are entities that have had transactions with related party during the periods covered in the parent company only financial statements.

Name of related party Zippy USA Inc. Zippy International Holding Ltd. QUAN-FA CORPORATION COMPANY Zippy Technology Europe GmbH Landmark International Holding Ltd. Kobot International Inc. Zippy (Dongguan) Electronics Co., Ltd. Zippy (Suzhou) Electronics Co. , Ltd. G-BRIM International Inc.	Relationship with the Company
	Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Indirect holding subsidiary Indirect holding subsidiary Indirect holding subsidiary Indirect holding subsidiary

(b) Significant transactions with related parties
Sale revenue

The amounts of significant sales transactions and outstanding balances between the Company and related parties were as follows:

For the years ended December 31, 2023 2022 Subsidiaries Zippy USA Inc. $ 286,038 362,696 Zippy (Suzhou) Electronics Co. , Ltd. 274,326 226,311 Other subsidiaries 138,389 146,915 $ 698,753 735,922	For the years ended December 31,	For the years ended December 31,
	2023	2022
		362,696 226,311 146,915
		735,922

The sales price to related parties for the Company is determined in accordance with mutual agreements. The collection term is within two to three months, and the Company collects within one to two months. Unrealized profit (loss) from sales to the subsidiaries of the Company for the years ended December 31, 2023 and 2022 were $42,064 and $38,969, respectively.

2. Purchase

The amounts of significant purchase transactions between the Company and related parties were as follows:

221

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese)

ZIPPY TECHNOLOGY CORP.

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

For the years ended December 31, 2023 2022 Zippy (Dongguan) Electronics Co., Ltd. $ 329,601 399,054	For the years ended December 31,	For the years ended December 31,
	2023	2022
		399,054

The purchase of goods from related parties is mainly the purchase of raw materials. The price and terms were determined in accordance with mutual agreements. The payment period with the related party is usually within two to four months, except that some related parties use the prepayment method for payment or depending on their funding needs.

3. Purchasing material for subsidiaries

The amounts of significant purchase transactions between the Company and related parties were as follows:

terms were determined in accordance with mutual agreements. The payment period with the related party is usually within two to four months, except that some related parties use the prepayment method for payment or depending on their funding needs. Purchasing material for subsidiaries The amounts of significant purchase transactions between the Company and related parties were as follows:	ments. The payment period with the ept that some related parties use the ing needs. e Company and related parties were as	ments. The payment period with the ept that some related parties use the ing needs. e Company and related parties were as
For the years ended December 31, 2023 2022 Zippy (Dongguan) Electronics Co., Ltd. $ 147,791 229,976	For the years ended December 31,
	2023	2022
		229,976

4. Processing and repair costs

The amounts of significant processing and repair costs between the Company and related parties were as follows:

Zippy (Dongguan) Electronics Co., Ltd. $ 147,791 229,976 Processing and repair costs The amounts of significant processing and repair costs between the Company and related parties were as follows:	147,791 229,976 ween the Company and related parties	147,791 229,976 ween the Company and related parties
For the years ended December 31, 2023 2022 QUAN-FA CORPORATION COMPANY $ 41,267 66,967	For the years ended December 31,
	2023	2022
		66,967

Accounts receivable from related parties

The amounts of accounts receivable between the Company and related parties were as follows:

Financial Statement Account	Related Party Categories 2023.12.31 Subsidiaries Zippy (Suzhou) Electronics Co. , Ltd. $ 39,735 Zippy Technology Europe Gmbh $ 25,981 Zippy USA Inc. 9,842 G-BRIM International Inc. 6,010 Subsidiaries Zippy (Dongguan) Electronics Co., Ltd. - $ 81,568	2023.12.31	2022.12.31
Accounts receivable Other receivables			20,671 31,342 31,066 2,744 30,441
			116,264

As of December 31, 2023 and 2022, no allowance for losses has been provided for the above accounts receivable.

222

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese)

ZIPPY TECHNOLOGY CORP.

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Accounts payable to Related Parties

The amounts of accounts payables between the Company and related parties were as follows:

Financial Statement Account	Related Party Categories 2023.12.31 Subsidiaries Zippy (Dongguan) Electronics Co., Ltd. $ 21,049 Subsidiaries QUAN-FA CORPORATION COMPANY 11,163 Other subsidiaries 164 $ 32,376	2022.12.31
Accounts payable Other payables		- 14,250 227
		14,477

Other payables are mainly the payments of processing costs.

Prepayments to Related Parties

The amounts of prepayments between the Company and related parties were as follows:

2023.12.31 Zippy (Dongguan) Electronics Co., Ltd. $ -	2023.12.31	2022.12.31
		10,471

Property transactions

For the years ended December 31, 2020, the Company sold machinery to Zippy (Dongguan) Electronics Co., Ltd., generated gain on disposal of $213 and other income of $17,190. As of December 31, 2023 and 2022, the unrealized other revenues were $7,105 and $10,586.

Guarantee

The Company had provided a guarantee for loans for related parties were as follows:

2023.12.31 Zippy (Dongguan) Electronics Co., Ltd. $ 46,125 Zippy Technology Europe GmbH. 51,060 $ 97,185	2023.12.31	2022.12.31
		46,080 49,125
		95,205

The Company provided collateral for subsidiaries’ loans, please refer to Note 8.
(c) Key management personnel compensation

Key management personnel compensation includes:

For the years ended December 31, 2023 2022 Short-term employee benefits $ 57,908 61,737 Post-employment benefit 708 683 $ 58,616 62,420	For the years ended December 31,	For the years ended December 31,
	2023	2022
		61,737 683
		62,420

223

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese)

ZIPPY TECHNOLOGY CORP.

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(8) Pledged Assets

The carrying values of pledged assets were as follows:

ledged Assets The carrying values of pledged assets were as follows:
Pledged assets Object 2023.12.31 Property, plant and equipment Long-term, Short-term borrowings $ 799,490 Investment property Long-term borrowings 1,973,059 Total $ 2,772,549	2023.12.31	2022.12.31
		803,862 1,983,301
		2,787,163

(9) Significant Commitments and Contingencies: None.

(10) Losses Due to Major Disasters: None.

(11) Subsequent Events: None.

(12) Other

(a) The employee benefits, depreciation, depletion and amortization expenses categorized by function were as follows:

By function By item	For the years ended December 31, 2023	For the years ended December 31, 2023	For the years ended December 31, 2023	For the years ended December 31, 2022	For the years ended December 31, 2022	For the years ended December 31, 2022	For the years ended December 31, 2022
	Operating costs	Operating and non-operating expense	Total	Operating costs	Operating and non-operating expense		Total
Employee benefits Salary Labor and health insurance Pension Remuneration of directors Others Depreciation Amortization	203,374 23,825 7,198 - 6,949 43,504 338	151,962 11,886 5,172 14,378 5,523 18,705 711	355,336 35,711 12,370 14,378 12,472 62,209 1,049	207,971 24,103 7,303 - 7,263 41,929 344	199,020 11,730 6,039 17,323 5,550 19,048 625		406,991 35,833 13,342 17,323 12,813 60,977 969
The Company For the years ended December 31, 2023 and 2022 employees and expenses were as follows: 2023 Number of employees 563 Number of directors who were not employees 5 The average employee benefit $ 745 The average salaries and wages $ 637 Average adjustment of employee salaries and wages (10.78)% Remuneration of supervisors $ -						employee benefits 2022
				563		575
				5		5
						823
						714
				(10.78)%		13.88 %
						984

The Company For the years ended December 31, 2023 and 2022 employees and employee benefits expenses were as follows:

224

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) ZIPPY TECHNOLOGY CORP.

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

The Company’s salary and remuneration policy (including directors, supervisors, managers and employees) are as follows:

The Company’s remuneration policy is aimed at enhancing long-term competitiveness and sustainable operation capabilities, enhancing the overall operation of the Company in the future, and creating long-term sustainable shareholders value. The remuneration policy for directors and supervisors is clearly stipulated in the Company's articles of association, and is distributed after approval by the remuneration committee, board of directors and shareholders’ meeting. The salaries of managers and employees are considered and adjusted in accordance with relevant company regulations and comprehensive evaluation items, such as company operating performance (revenue, net profit after tax, etc.), overall salary, and personal performance.

225

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese)

ZIPPY TECHNOLOGY CORP.

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(13) Other disclosures

(a) Information on significant transactions

The following is the information on significant transactions required by the “ Regulations Governing the Preparation of Financial Reports by Securities Issuers” for the Company for the year ended December 31, 2023:

Loans to other parties:

1. Loans to other parties:	1. Loans to other parties:	1. Loans to other parties:	1. Loans to other parties:	1. Loans to other parties:	1. Loans to other parties:	1. Loans to other parties:	1. Loans to other parties:	1. Loans to other parties:	1. Loans to other parties:	1. Loans to other parties:	1. Loans to other parties:	1. Loans to other parties:
													(In Thousands of EUR/USD)
Number	Name of lender	Name of borrower	Account name	Related party	Highest balance of financing to other parties during the period	Ending balance	Actual usage amount during the period	Range of interest rates during the period	Purposes of fund financing for the borrower	Transaction amount for business between two parties	Reasons for short-term financing	Allowance for bad debt	Collateral		Individual funding loan limits	Maximum limit of fund financing
													Item	Value
1 Z	ippy USA Inc. K i	obot nternational Inc. r r p	Other eceivables- elated arties	Y	59,04 (USD 1,920	1 ) 46,740 (USD 1,520)	46,740 (USD 1,520)	1.51 ~ 2.50	2	-	Working Capital	-		-	580,571	580,571

Note 1: Purpose of fund financing for the borrower:

  - (1) For those companies with business contact, please fill in 1.

  - (2) For those companies with short-term financing needs, please fill in 2.

Note 2: (1) The Company’s total fund financing amount cannot exceed 40% of its net asset value.
- (2) For those companies with business contact, the amount of each fund financing cannot exceed the trading amount between the two parties. If the trading amount exceeds 10% of its net asset value, the amount of each fund financing cannot exceed 10%of its net asset value. The trading amount means the higher of sales or purchases.
(3) For those companies with short-term financing needs, the amount of each fund financing cannot exceed 10%of its net asset value.
Note 3: The policies of loans to other parties for the subsidiaries:
- (1) Total financing amount cannot exceed 2 times of the subsidiary’s net asset value.
- (2) For those companies with short-term financing needs, the amount of each fund financing cannot exceed 10% of the subsidiaries net asset value.
- (3) For the subsidiary leading to the foreign companies that are 100% directly or indirectly owned by the Company, the amount of fund financing cannot exceed 2 time of the subsidiary’s net asset value.
Note 4: The transactions and its limits with the Group, which were calculated based on the exchange rate at the end of the period, were eliminated in the consolidated financial statements.
Guarantees and endorsements for other parties:

											(In Thou	sands of EUR/USD)	sands of EUR/USD)
No.	Endorsement/ guarantee provider	Counter	-party	Limitation on endorsement/ guarantee amount provided to each guaranteed party (Note 2)	Maximum balance for the year (Note 2)	Ending balance	Amount actually drawn	Amount of endorsement/ guarantee collateralized by properties	Ratio of accumulated endorsement/ guarantee to net equity per latest financial statements	Maximum endorsement guarantee amount allowance (Note 2 and 3)	Guarantee provided by parent company	Guarantee provided by a subsidiary	Guarantee provided to subsidiaries in Mainland China
		Name	Nature of relationship (Note 1)
0 0	The Company 〞	Zippy (Dongguan) Electronics Co., Ltd. Zippy Technology Europe GmbH.	4 4	1,465,832 1,465,832	46,125 (USD 1,500) 51,060 (EUR 1,500)	46,125 (USD 1,500) 51,060 (EUR 1,500)	- 13,616 (EUR 400)	- -	1.26% 1.39%	1,832,290 1,832,290	Y Y	N N	Y N

Note 1: (1) The Company has business with the receiving parties.

(2) The Company holds directly or indirectly more than 50% of the common stock of the subsidiaries.
(3) The Company holds directly or indirectly more than 50% by the investee.
(4) The Company holds directly or indirectly more than 90% of the common stock of the subsidiaries.
(5) Based on the needs of contracting projects, companies in the same industry or jointly created mutual insurance companies in accordance with contractual provisions.
(6) The stockholders of the Company provide guarantee for the investee to their stockholding percentage.
(7) The inter-industry is engaged in joint and several guarantees for the performance of the pre-sale house sales contract in accordance with the regulations of the Consumer Protection Law.
Note 2: (1) The maximum guarantees and endorsements provide by the Company cannot exceed 50% of net asset of the Company.
(2) The maximum guarantees and endorsements for individual counter party cannot exceed 50% of net asset of the Company.
(3) The maximum guarantees and endorsements provide by the Company and subsidiaries cannot exceed 50% of net asset of the Company.
(4) For those companies with business contact, the amount of each guarantees and endorsements cannot exceed the trading amount within twelve months between the two parties.

Note 3: The policies of loans to other parties for the subsidiaries:

226

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) ZIPPY TECHNOLOGY CORP.

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(1) Total amount of guarantees and endorsements cannot exceed 2 times of the subsidiary’s net asset value.
(2) The amount of guarantees and endorsements for individual counter party cannot exceed 40% of net asset of the subsidiary or the net asset of the endorsed company is limited; if approved by the board of directors, the maximum endorsement guarantee of the subsidiary to other subsidiaries hold directly or indirectly 100% by a single parent company cannot exceed 2 time of the subsidiary’s net asset value.

Note 4: The amount of guarantees and endorsements were exchanged to New Taiwan Dollars in the actual exchange rate at the time of guarantee.

Securities held as balance sheet date (excluding investment subsidiaries, associates and joint ventures) :

==> picture [426 x 63] intentionally omitted <==

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

Ending balance
Shares/Units
Category and name of Relationship with (thousands) Carrying Percentage of
Name of holder security company Account title (Note) value ownership (%) Fair value Note
The Company Fuh Hwa Money Market - Financial assets at 2,503 37,019 - 37,019
fair value through
profit or loss
----- End of picture text -----

Note: Refers to the number of fund units (thousand units)

Individual securities acquired or disposed of with accumulated amount exceeding the lower of TWD300 million or 20% of the capital stock:

Company holding securities	Security type and name	Account	Counter -party	Relation -ship	Beginning	Beginning	Pu	rchase			Sale		Ending (Note)	Ending (Note)
					Shares (in thousands)	Amount	Shares (Note )	Amount	Shares (Note )	Price	Cost	Gain (loss) on disposal	Shares (in thousands)	Amount
The Company	Fuh Hwa Money Market	Financial assets at fair value through profit or loss	-	-	-	-	68,118	1,003,000	65,615	967,015	966,000	1,015	2,503	37,019

Note: Refers to the number of fund units (thousand units)

Acquisition of individual real estate with amount exceeding the lower of TWD300 million or 20% of the capital stock: None.
Disposal of individual real estate with amount exceeding the lower of TWD300 million or 20% of the capital stock: None.
Related-party transactions for purchases and sales with amounts exceeding the lower of TWD100 million or 20% of the capital stock:

Name of company	Related party	Nature of relationship		Transaction details	Transaction details		Transactio different	ns with terms from others	Notes/Accounts receivable (payable)	Notes/Accounts receivable (payable)	Note
			Purchase/ Sale	Amount	Percentage of total purchases/sale	Payment terms	Unit price	Payment terms	Ending balance	Percentage of total notes/accounts receivable (payable)
The Company 〞〞〞〞	Zippy (Dongguan) Electronics Co., Ltd. 〞 Zippy USA Inc. Ltd. Zippy (Suzhou) Electronics Co. , Ltd. Zippy Technology Europe GmbH.	Associate under equity method 〞〞〞〞	Purchases Purchasing material for subsidiaries Sales Sales Sales	329,601 (147,791) (286,038) (274,326) (122,512)	63.63% - % 14.34% 13.75% 6.14%	2~4 months 2~4 months 2~4 months 2~4 months 2~4 months	Note 1 Note 1 Note 1 Note 1 Note 1	Note 2 Note 2 Note 2 Note 2 Note 2	21,049 - 9,842 39,735 25,981	11.47% - % 3.41% 13.76% 9.00%

Note 1: Based on the negotiated price while trading.

Note 2: Normal customers are within one to two months, while related party transactions are within two to four months.

227

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) ZIPPY TECHNOLOGY CORP.

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Receivables from related parties with amounts exceeding the lower of NT$100 million or 20% of capital stock: None.
Trading in derivative instruments: None.
(b) Information on investment:

The following is the information on investees for the year ended December 31, 2023 (excluding investees in Mainland China):

Unit: thousand shares

Investor company	Investee company	Location	Main businesses and products	Original inves	tment amount	Balance as of December	Balance as of December	31, 2023	Net income (loss) of the investee (Note 1)	Share of profits/losses of investee (Note 1)	Note
				December 31, 2022	December 31, 2021	Shares/Units (In thousands)	Percentage of ownership	Carrying value
The Company 〞〞〞〞 Zippy International Holding Ltd.	Zippy USA Inc. Zippy International Holding Ltd. QUAN-FA CORPORATI ON COMPANY Zippy Technology Europe GmbH. Landmark International Holding Ltd. Kobot International Inc.	USA BVI Taiwan Germany Samoa USA	Trading in micro switches, power supplies, and computer accessories Reinvestment business Wire and cable manufacturing, electronic component manufacturing Trading in electrical parts and computer accessories Reinvestment business Leasing	8,247 325,823 5,360 12,573 145,906 16,470	8,247 325,823 5,360 12,573 145,906 16,470	300 10,234 4,493 (Note 2) 4,425 (Note 2)	100.00% 100.00% 63.92% 100.00% 100.00% 100.00%	277,863 292,212 53,835 44,244 180,452 128,052	8,835) 34,732) (8,623) 5,740) (2,199) 12,772)	8,835) 34,732) (5,512) 5,740) (2,199) 12,772)	Subsidiary 〞〞〞〞 Sub-subsidiary

Note 1: Based on the financial report of the investment company audited by CPA to recognize under equity method. Note 2: Obtaining equity.

228

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) ZIPPY TECHNOLOGY CORP.

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(c) Information on investment in Mainland China:
The names of investees in Mainland China, the main businesses and products, and other information:

information:	information:	information:	information:
										(In Thousands of USD)
Name of investee	Main businesses andproducts	Total amount of paid-in capital	Method of investment (Note 1)	Accumulated outflow of investment from Taiwan as of January 1, 2021	Investm	ent flows	Accumulated outflow of investment from Taiwan as of December 31, 2021	Net income (losses) of the investee	Percentage of ownership	Investment income (losses) (Note 2 and 3)	Book value (Note 2 and 3)	Accumulated remittance of earnings in current period (Note 10)
					Out-flow	Inflow
Zippy (Dongguan) Electronics Co., Ltd.	Mainly produce various switches, power supplies, molds, computer peripheral equipment, computer optical fiber parts and sales	276,957 (USD 8,500 and equipment investment USD 283)	(2)	276,957 (USD 8,783)	-	-	276,957 (USD 8,783)	18,578	100.00%	18,578	171,075	-
Zippy (Suzhou) Electronics Co. , Ltd.	Mainly sell computer key components, power supplies, precision ceramics, precision molds and key components of network equipment	82,375 (USD 2,500)	(2)	82,375 (USD 2,500)	-	-	82,375 (USD 2,500)	(1,319)	100.00%	(1,319)	78,463	-
G-BRIM International Inc.	Mainly engaged in electronic products, plastic products, rubber products, hardware products, import and export and related supporting businesses, etc.	49,333 (USD 1,500)	(2)	49,333 (USD 1,500)	-	-	49,333 (USD 1,500)	(872)	100.00%	(872)	106,052	-

Note 1: There are three ways of investments as following:

(a) Direct investment in Mainland China.
(b) Indirect investment in Mainland china through a subsidiary in a third place (Zippy International Holding Ltd. and Landmark International Ltd.).
(c) Others
Note 2: The base of recognition of investment income (loss) is the financial statement audited by CPA of the investee company.

Note 3: The inter-company transactions with the Company were eliminated in the consolidated financial statements

2. Limitation on investment in Mainland China:

imitation on investment in	Mainland China:
Accumulated Investment in Mainland China as of December 31, 2023	Investment Amounts Authorized by Investment Commission, MOEA	Upper Limit on Investment
392,886 (USD 12,783)	399,555 (USD 13,000)	2,198,748

Note 2: The upper limit on investment is 60% of net value.

229

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese)

ZIPPY TECHNOLOGY CORP.

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS (CONT'D) For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

3. Significant transactions:

(d) Information on major shareholders:

Information on major shareholders:
Shareholding Shareholder’s Name	Shares	Percentage
Chung, Yen-Yen	10,337,267	6.77%
Chou, Chin-Wen	9,918,432	6.49%
Kao, Ming-Chuan	7,825,423	5.12%

(14) Segment Information

Please refer to consolidated financial report of Zippy Technology Corp. for the year ended December 31, 2023.

230

Appendix 4

ZIPPY TECHNOLOGY CORP.

Statement of Internal Control System

Mar. 6, 2024

Based on the findings of self-assessment, the company states the following with regard to its internal control system in 2023:

The company is fully aware that establishing, operating and maintaining an internal control system are the responsibilities of its Board of Directors and management. The aim of the internal control system is to provide reasonable assurance to effectiveness and efficiency of operations (including profitability, performance and safeguarding of assets), reliability, timeliness, transparency, and regulatory compliance of reporting and compliance with applicable laws, regulations, and bylaws.
An internal control system has inherent limitations. No matter how perfectly designed, an effective internal control system can only provide reasonable assurance of accomplishing the aforementioned three objectives. Moreover, the effectiveness of an internal control system may be subject to changes of environmental or circumstances. Nevertheless, the internal control system of the company contains self-monitoring mechanism and the company takes corrective actions whenever a deficiency is identified.
The company evaluates the design and operating effectiveness of its internal control system based on the criteria provided in the Regulations Governing Establishment of Internal Control Systems by Public Companies (herein below, the “Regulations”). The criteria adopted by the Regulations identify five components of internal control based on the process of management control: (1) control environment, (2) risk assessment, (3) control activities, (4) information and communication, and (5) monitoring activities. Each component further contains several items. Please refer to the Regulations for details.
The company has evaluated the design and operating effectiveness of its internal control system according to the aforesaid criteria.
Based on the findings of the assessment mentioned in the preceding paragraph, the company believes that, as of December 31, 2023, its internal control system (including its supervision and management of subsidiaries), as well as its internal controls to monitor the achievement of its objectives concerning effectiveness and efficiency of operations, reliability, timeliness, transparency, and regulatory compliance of reporting, and compliance with applicable laws, regulations, and bylaws, were effective in design and operation, and reasonably assured the achievement of the above-stated objectives.

231

This Statement will be integral part of the company’s Annual Report and Prospectus, and will be made public. Any falsehood, concealment, or other illegality in the content made public will entail legal liability under Articles 20, 32, 171 and 174 of the Securities and Exchange Act.
This Statement has been passed by the Board of Directors in their meeting held on Mar. 6, 2024 with zero of seven attending directors expressing dissenting opinions, and the remainder all affirming the content of this Statement.

ZIPPY TECHNOLOGY CORP. Chairman: Chou, Chin-Wen President: Kao, Ming-Chuan

232

AI assistant

ZIPPY Technology Corp. — Annual Report 2023

52069_rns_2024-05-21_940a2211-ae0e-48f4-bd0f-f836c2477239.pdf

Stock Code：2420

ZIPPY TECHNOLOGY CORP.

2023 Annual Report

Contents

I. Letter to Shareholders

1.1. 2023 Consolidated Business Report:

1.1.1. Operational Highlights:(detail see page 105)

1.1.3. Research and development status:

1.2. Summary of 2024 business plan:

1.2.2 Conclusion

Best wishes for good healthy and good luck!

II. Company Profile

III.Corporate Governance Report

3.1.1. Organizational structure

3.1.2. Department functions:

3.2 Directors, supervisors, general managers, deputy general managers, associates, supervisors of various departments and branches

3.2.1. Director Information

Note 1： Chairman of ZIPPY TECHNOLOGY CORP

3.2.2. Professional qualifications and independence analysis of the board:

Note 1： Please refer to page 8, 3.2.1. Directors Information.

Note 2： The independece criteria to indicate whether the independent directors had met any of the conditions:

3.2.3. Diversity and independence of the board:

3.2.3.1. Diversity of the board:

3.2.3.2. Independence of the board:

3.2.4. Introduction of the management team:

Note 1： Chairman of QUAN-FA CORPORATION COMPANY

3.3 Remuneration of directors, supervisors, the president, and vice president:

3.3.1. Remuneration of directors:

Remuneration Scale

3.3.2. Remuneration of General Manager and Deputy General Manager:

3.3.3. Employee Profit Sharing Granted to Management Team:

3.4 Implementation of corporate governance:

3.4.1 Board of directors

1. Board of directors

2. Assessment performance of the Board of Directors

Operation of the Audit Committee

D. Communication and scenario of independent board directors with the Chief audit officer and CPA

3.4.4 Status of remueration committee:

1. Remueration committee

c. Operation of the salary and remuneration committee in 2023:

3.4.6 Implementation of Climate-Related Information

3.4.7 Ethical Corporate Management implementation status and deviation from the “Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies”:

3.9 Information on the relationship of the top 10 shareholders as related parties, spouses, or blood relatives within two degrees:

3.10 Ownership of shares in affiliated enterprises

IV. Capital overview

4.1 Capital and shares

4.1.1 Capital and shares:

1.1.2 Composition of Shareholders

＊China company holding ratio: None.

4.1.3 Shareholding distribution status

4.1.4 List of major shareholder

V.Operational highlights

(2) Power Suppply

(2) Power Supply:

b. Relevance of downstream application products and Power Supply:

5.1.3.Overview of technology and R&D:

3. Future research and development plan:

2. Power Supply

5.2 Overview of market, production and sales

5.2.1. Market analysis

1. Amount of each major product sales area:

(1) Micro Switch

(2) Power Supply

2. Production process:

(1) Micro Switch:

(2)Power Supply:

5.2.3. The source and supply of main raw materials:

5.2.5. Production value table for the last two years:

5.2.6. Sales volume value table for the last two years:

※Others: including semi-finished products and materials.

5.3 Information of employees

5.4 Environmental protection expenditure information:

5.5 Labor relations:

5.6 Cyber Security Management

(3) Information Security Policies

VI. Financial overview

6.1 Financial Information

ZIPPY Technology Corp. Annual Report 2023