ZERO ONE — Audit Report / Information 2021

Dec 31, 2021

Code ： 3029

ZERO ONE TECHNOLOGY CO., LTD.

PARENT COMPANY ONLY FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020 AND

INDEPENDENT AUDITORS’ REPORT

Address: 10F., No. 8, Ln. 360, Sec. 1, Neihu Rd., Neihu Dist., Taipei City Office Number : +886 2 2656 5656

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§TABLE OF CONTENTS§

Contents 1、Cover 2、Table of Contents 3、Independent Auditors’ Auditor Report 4、Parent company only Balance Sheets 5、Parent company only Statements of Comprehensive Income 6、Parent company only Statements of Changes in Equity 7、Parent company only Statements of Cash Flows 8、Notes to Parent company only Financial Statements (1) General (2) The date and procedures of authorization of financial statements (3) Application of new and revised standards and interpretations (4) Summary of significant accounting policies (5) Critical accounting judgements and key sources of estimation and uncertainty (6) Explanation of significant accounts (7) Related parties transactions (8) Assets pledged as collateral (9) Significant contingent liabilities and unrecognized commitments (10) Significant Disaster Loss (11) Significant events after the Balance Sheet Date (12) Foreign-currency-denominated assets and liabilities that have significant influence (13) Separately disclosed items A. Information on significant transactions B. Information on investees C. Information on investment in Mainland China D. Information on major shareholders 9、List of major account tiles	Page No. 1 2 3～5 6 7～8 9 10～11 12 12 12～13 13～19 19 20～37 37～38 39 39 - - 39 40～44 40、45 40、46 40、47 48～63	Financial Report’s Note No. - - - - - - - 1 2 3 4 5 6～25 26 27 28 - - 29 30 30 30 30 -

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INDEPENDENT AUDITORS' REPORT

The Board of Directors and Shareholders Zero One Technology Co., Ltd.

Opinion

We have audited the accompanying parent company only financial statements of Zero One Technology Co., Ltd. (the “Company”), which comprise the parent company only balance sheets as of December 31, 2021 and 2020, and the parent company only statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the parent company only financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying parent company only financial statements present fairly, in all material respects, the parent company only financial position of the Company as of December 31, 2021 and 2020, and its parent company only financial performance and its parent company only cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and 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 Parent Company Only Financial Statements section of our report. We are independent of the Company in accordance with The Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the parent company only financial statements for the year ended December 31, 2021. These matters were addressed in the context of our audit of the parent company only financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key audit matters for the Company's parent company only financial statements for the year ended December 31, 2021 are stated as follows:

– Authenticity of the Occurrence of Operating Income Operating Income from Some Clients

The operating income of Zero One Technology Co., Ltd. mainly comes from the sales of computer software and hardware, peripheral equipment and components, and the fact that the growth rate of operating income from some clients exceeds the average growth rate, has in turn created a significant impact on the operating income and profit of Zero One Technology Co., Ltd., in consideration of the higher innate risk of fraud that income recognition carries, and that there may be pressure on management to achieve expected financial goals, we consider such revenue a key audit matter.

We address the above mentioned income that the management evaluated by taking main audit procedures as follows:

1. Understand and test the main internal control systems for such income, and evaluate the effectiveness of its design and implementation.

2. Obtain the detailed accounts of these incomes, select samples to perform tests of details, and review

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documents such as purchase orders, delivery orders, and invoices to confirm the authenticity of these incomes.

1. Obtain the detailed accounts of these incomes, and select samples to test whether there is a significant difference in the subjects of the payment reconciliation and the amounts of the receipts, so as to confirm the authenticity of these incomes.

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

Management is responsible for the preparation and fair presentation of the parent company only financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and for such internal control as management determines is necessary to enable the preparation of parent company only financial statements that are free from material misstatement, whether due to fraud or error.

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

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

Auditors' Responsibilities for the Audit of the Parent Company Only Financial Statements

Our objectives are to obtain reasonable assurance about whether the parent company only financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the 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 parent company only financial statements.

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

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

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

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

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

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

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

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the parent company only financial statements for the year ended December 31, 2021 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 Chien-Liang Liu and Pei-De Chen.

Deloitte & Touche Taipei, Taiwan Republic of China February 23, 2022

Notice to Readers

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

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

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ZERO ONE TECHNOLOGY CO., LTD.

PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31, 2021 AND 2020

(In Thousands of New Taiwan Dollars)

ASSETS CURRENT ASSETS Cash and cash equivalents (Notes 4 and 6) Financial assets at fair value through profit or loss (Notes 4 and 7) Financial assets at amortized cost (Notes 4 and 9) Notes receivable (Notes 4 and 11) Trade receivables (Notes 4, 11 and 26) Inventories (Notes 4, 5 and 12) Other current assets (Note 26) Total current assets NON-CURRENT ASSETS Financial assets at fair value through profit or loss (Notes 4 and 7) Financial assets at fair value through other comprehensive income (Notes 4 and 8) Financial assets at amortized cost (Notes 4, 9, 10 and 27) Investments accounted for using the equity method (Notes 4 and 13) Property, plant and equipment (Notes 4,14 and 27) Right-of-use assets (Notes 4 and 15) Intangible assets Deferred tax assets (Notes 4 and 21) Refundable deposits Total non-current assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES Trade payables (Note 26) Other payables (Notes 16 and 26) Current tax liabilities (Note 4) Lease liabilities (Notes 4 and 15) Other current liabilities (Note 19) Total current liabilities NON-CURRENT LIABILITIES Deferred tax liabilities (Notes 4 and 21) Lease liabilities (Notes 4 and 15) Net defined benefit liabilities (Notes 4 and 17) Guarantee deposit received Total non-current liabilities Total liabilities EQUITY (Notes 4 and 18) Ordinary shares Capital surplus Retained earnings Legal reserve Unappropriated earnings Total retained earnings Other equity Total equity TOTAL	December 31, 2021 Amount % $ 783,779 10 331,209 4 893,930 12 288,710 4 2,538,701 34 1,620,945 21 35,077 1 6,492,351 86 37,846 - 240,575 3 45,964 1 380,841 5 315,903 4 11,201 - 1,691 - 40,779 1 6,819 - 1,081,619 14 $ 7,573,970 100 $ 2,973,433 39 254,086 4 96,370 1 5,162 - 309,856 4 3,638,907 48 476 - 6,370 - 19,224 - 800 - 26,870 - 3,665,777 48 1,519,707 20 1,234,325 16 263,963 4 831,516 11 1,095,479 15 58,682 1 3,908,193 52 $ 7,573,970 100	December 31, 2021 Amount % $ 783,779 10 331,209 4 893,930 12 288,710 4 2,538,701 34 1,620,945 21 35,077 1 6,492,351 86 37,846 - 240,575 3 45,964 1 380,841 5 315,903 4 11,201 - 1,691 - 40,779 1 6,819 - 1,081,619 14 $ 7,573,970 100 $ 2,973,433 39 254,086 4 96,370 1 5,162 - 309,856 4 3,638,907 48 476 - 6,370 - 19,224 - 800 - 26,870 - 3,665,777 48 1,519,707 20 1,234,325 16 263,963 4 831,516 11 1,095,479 15 58,682 1 3,908,193 52 $ 7,573,970 100	December 31, 2021 Amount % $ 783,779 10 331,209 4 893,930 12 288,710 4 2,538,701 34 1,620,945 21 35,077 1 6,492,351 86 37,846 - 240,575 3 45,964 1 380,841 5 315,903 4 11,201 - 1,691 - 40,779 1 6,819 - 1,081,619 14 $ 7,573,970 100 $ 2,973,433 39 254,086 4 96,370 1 5,162 - 309,856 4 3,638,907 48 476 - 6,370 - 19,224 - 800 - 26,870 - 3,665,777 48 1,519,707 20 1,234,325 16 263,963 4 831,516 11 1,095,479 15 58,682 1 3,908,193 52 $ 7,573,970 100	December 31, 2020	December 31, 2020	December 31, 2020	December 31, 2020
		Amount $ 783,779 331,209 893,930 288,710 2,538,701 1,620,945 35,077 6,492,351 37,846 240,575 45,964 380,841 315,903 11,201 1,691 40,779 6,819 1,081,619 $ 7,573,970 $ 2,973,433 254,086 96,370 5,162 309,856 3,638,907 476 6,370 19,224 800 26,870 3,665,777 1,519,707 1,234,325 263,963 831,516 1,095,479 58,682 3,908,193 $ 7,573,970			Amount $ 567,436 350,270 232,010 230,490 1,871,194 1,223,050 26,599 4,501,049 35,391 253,319 64,451 206,746 307,276 6,762 765 35,976 4,281 914,967 $ 5,416,016 $ 2,227,047 232,528 59,660 5,223 210,909 2,735,367 - 1,597 20,982 800 23,379 2,758,746 1,256,402 478,757 219,863 667,898 887,761 34,350 2,657,270 $ 5,416,016		%
							10 6 4 4 35 23 1
							83
							- 5 1 4 6 - - 1 -
							17
							100
							41 5 1 - 4
							51
							- - - -
							-
							51
							23
							9
							4 12
							16
							1
							49
							100

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

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ZERO ONE TECHNOLOGY CO., LTD.

PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

OPERATING REVENUE (Notes 4 ,19 and 26) OPERATING COSTS (Notes 12 and 26) GROSS PROFIT OPERATING EXPENSES (Notes 17 and 20) Selling and marketing expenses General and administrative expenses Research and development expenses Reversal of expected credit losses (Note 11) Total operating expenses PROFIT FROM OPERATIONS NON-OPERATING INCOME AND EXPENSES Interest income (Note 26) Other income (Note 26) Other gains and losses (Note 20) Net gain on derecognition of financial assets at amortized cost (Note 9) Finance costs Share of profit or loss of subsidiaries accounted for using the equity method Total non-operating income and expenses		2021	% 100 90 10 4 1 - - 5 5 - - - - - - -		2020
		Amount $ 12,630,074 11,404,014 1,226,060 451,247 142,206 4,019 6,681) 590,791 635,269 4,682 13,679 29,304 2,692 2,256 ) 8,598) 39,503			Amount $ 9,658,778 8,661,534 997,244 365,426 123,760 - 3,262) 485,924 511,320 17,740 11,013 16,062 1,260 2,045 ) 441) 43,589	%
	( ( (			( ( (		100 90 10 4 1 - - 5 5 1 - - - - - 1

(Continued)

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PROFIT BEFORE INCOME TAX INCOME TAX EXPENSE (Notes 4 and 21) NET PROFIT OTHER COMPREHENSIVE INCOME (LOSS) Items that will not be reclassified subsequently to profit or loss: Remeasurement of defined benefit plans Unrealized gain (loss) on investments in equity instruments at fair value through other comprehensive income Share of other comprehensive income of subsidiaries accounted for using the equity method Income tax relating to items that will not be reclassified subsequently to profit or loss Items that may be reclassified subsequently to profit or loss: Share of other comprehensive income of subsidiaries accounted for using the equity method Other comprehensive income for the year, net of income tax TOTAL COMPREHENSIVE INCOME FOR THE YEAR EARNINGS PER SHARE (Note 22) From continuing operations Basic Diluted		2021	% 5 1 4 - 1 - - - 1 5		2020
		Amount $ 674,772 137,413 537,359 224 37,493 31,693 45 ) 68) 69,297 $ 606,656 $ 4.24 $ 4.13			Amount $ 554,909 113,286 441,623 212 ) 3,974 17,997 43 74 21,876 $ 463,499 $ 3.55 $ 3.44	%
	( (			(		6 1 5 - - - - - - 5

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

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ZERO ONE TECHNOLOGY CO., LTD.

PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

BALANCE, JANUARY 1, 2020 Appropriation of the 2019 earnings Legal reserve Special reserve Cash dividends -NT $2 per share Net profit for the year ended December 31, 2020 Other comprehensive income (loss) for the year ended December 31, 2020 Total comprehensive income (loss) for the year ended December 31, 2020 Changes in percentage of ownership interests in subsidiaries Share based payment transaction – employee restricted shares Share based payment transaction – employee stock options Cancellation of employee restricted shares Issuance of ordinary shares under employee stock options Disposals of investments in equity instruments at fair value through other comprehensive income BALANCE, DECEMBER 31, 2020 Appropriation of the 2020 earnings Legal reserve Cash dividends – NT $3 per share Net profit for the year ended December 31, 2021 Other comprehensive income (loss) for the year ended December 31, 2021 Total comprehensive income (loss) for the year ended December 31, 2021 Issuance of shares for cash The difference between the consideration received or paid and the carrying amount of the subsidiaries’ net assets during actual disposal or acquisition Share based payment transaction – employee restricted shares Share based payment transaction – employee stock options Cancellation of employee restricted shares Issuance of ordinary shares under employee stock options Disposals of investments in equity instruments at fair value through other comprehensive income BALANCE, DECEMBER 31, 2021	Share Capital Shares (In Thousand) Issued Capital 124,635 $ 1,246,352 - - - - - - - - - - - - - - - - - - ( 12 ) ( 120 ) 1,017 10,170 - - 125,640 1,256,402 - - - - - - - - - - 25,000 250,000 - - - - - - ( 15 ) ( 150 ) 1,346 13,455 - - 151,971 $ 1,519,707		**Retained Earnings **	Total $ 696,340 - - 249,574 ) 441,623 169) 441,454 718 ) - - - - 259 887,761 - 377,836 ) 537,359 179 537,538 - - - - - - 48,016 $ 1,095,479	Other Equity	Other Equity	Total $ 7,476 - - - ( - 22,045 22,045 - ( 5,088 - - - 259) 34,350 - - ( - 69,118 69,118 - - 3,230 - - - 48,016) $ 58,682	Total Equity $ 2,420,304 - - 249,574 ) 441,623 21,876 463,499 3,199 ) 5,088 6,894 - 14,258 - 2,657,270 - 377,836 ) 537,359 69,297 606,656 997,430 68 3,230 1,518 - 19,857 - $ 3,908,193
					Exchange Unrealized Gain (Loss) on Financial Assets at Fair Value Differences on Translation of the Financial Statements of Foreign Comprehensive Operations Income $ - $ 17,865 ( - - - - - - - - 74 21,971 74 21,971 - - - - - - - - - - - ( 259) 74 39,577 ( - - - - - - ( 68) 69,186 ( 68) 69,186 - - - - - - - - - - - - - ( 48,016) $ 6 $ 60,747 (	Unearned Employee Benefits $ 10,389 ) - - - - - - - 5,088 - - - - ( 5,301 ) - - - - - - - 3,230 - - - - ( $ 2,071)
		Capital Surplus $ 470,136 - - - - - - ( 2,481 ) - 6,894 120 4,088 - 478,757 - - - - - 747,430 68 - 1,518 150 6,402 - $ 1,234,325	Unappropriated Legal Reserve Special Reserve Earnings $ 184,732 $ 16,844 $ 494,764 35,131 - ( 35,131 ) - ( 16,844 ) 16,844 - - ( 249,574 ) ( - - 441,623 - - ( 169) ( - - 441,454 - - ( 718 ) ( - - - - - - - - - - - - - - 259 219,863 - 667,898 44,100 - ( 44,100 ) - - ( 377,836 ) ( - - 537,359 - - 179 - - 537,538 - - - - - - - - - - - - - - - - - - - - 48,016 $ 263,963 $ - $ 831,516

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

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ZERO ONE TECHNOLOGY CO., LTD.

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax Adjustments for: Depreciation expenses Amortization expenses Reversal of expected credit losses Net gain on fair value change of financial assets at fair value through profit or loss Finance costs Net gain on derecognition of financial assets at amortized cost Interest income Dividend income Compensation costs of employee stock options Share of loss of subsidiaries accounted for using the equity method Loss on disposal of property, plant and equipment Gain on disposal of investments accounted for using equity method Write-down (reversal of write-down) of inventories Net loss on foreign currency exchange Changes in operating assets and liabilities Financial assets mandatorily classified as at fair value through profit or loss Notes receivable Trade receivables Inventories Other current assets Trade payables Other payables Other current liabilities Net defined benefit liabilities Cash generated from operations Income tax paid Net cash generated from operating activities	2021 $ 674,772 22,066 1,068 ( 6,681 ) ( 10,050 ) 2,256 ( 2,692 ) ( 4,682 ) ( 8,468 ) 4,748 8,598 - - 26,162 705 26,656 ( 58,220 ) ( 662,489 ) ( 440,071 ) 18,400 750,339 23,479 98,947 ( 1,534) 463,309 ( 105,075) 358,234	2020
		$ 554,909 20,255 778 ( 3,262 ) ( 5,050 ) 2,045 ( 1,260 ) ( 17,740 ) ( 8,535 ) 11,982 441 40 ( 275 ) ( 7,898 ) 5,618 ( 316,149 ) 46,405 ( 127,308 ) 88,620 3,780 206,993 ( 139,983 ) 69,781 ( 1,148) 383,039 ( 105,427) 277,612

(Continued)

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2021 CASH FLOWS FROM INVESTING ACTIVITIES Purchase of financial assets at fair value through other comprehensive income ( $ 19,690 ) Proceeds from sale of financial assets at fair value through other comprehensive income 47,240 Proceeds from the return of capital upon investees' capital reduction of financial assets at fair value through other comprehensive income - Purchase of financial assets at amortized cost ( 950,487 ) Disposal of financial assets at amortized cost 308,260 Acquisition of investments accounted for using the equity method ( 151,000 ) Proceeds from disposal of investments accounted for using equity method - Payments for property, plant and equipment ( 8,112 ) Proceeds from disposal of property, plant and equipment - Increase in refundable deposits ( 2,538 ) (Increase) decrease in other receivables-related parties ( 5,000 ) Payments for intangible assets ( 980 ) Interest received 5,734 Dividend received from subsidiaries - Other dividends received 8,468 Net cash (used in) generated from investing activities ( 768,105) CASH FLOWS FROM FINANCING ACTIVITIES Repayments of short-term borrowings - Refund of guarantee deposits received - Repayment of principal portion of lease liabilities ( 7,308 ) Dividends paid ( 377,836 ) Proceeds from issuance of shares 997,430 Exercise of employee stock options 19,857 Interest paid ( 2,256) Net cash generated from (used in) financing activities 629,887 EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH AND CASH EQUIVALENTS HELD IN FOREIGN CURRENCIES ( 3,673) NET INCREASE IN CASH AND CASH EQUIVALENTS 216,343 CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR 567,436 CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR $ 783,779 The accompanying notes are an integral part of the parent company only financial statements.

2020

( $ 84,217 ) 24,217 3,078 ( 236,229 ) 700,682 ( 49,000 ) 275 ( 6,359 ) 500 ( 1,527 ) 10,000 ( 185 ) 20,642 630 8,535 391,042 ( 150,000 ) ( 362 ) ( 5,066 ) ( 249,574 ) - 14,258 ( 2,049) ( 392,793) ( 6,777) 269,084 298,352 $ 567,436 (Concluded)

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ZERO ONE TECHNOLOGY CO., LTD. NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2021 and 2020

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

1. GENERAL

Zero One Technology Co., Ltd. (the “Company” or “ZOTC”) was incorporated as a company limited by shares under the provisions of the Company Law of the Republic of China on June 27, 1980. On January 21, 2000, ZOTC’s Shares were listed on Taipei Exchange (TPEX). On August 26, 2002, ZOTC’s shares were listed on the Taiwan Stock Exchange (TWSE). ZOTC is a dedicated foundry in the technology industry which engages mainly in the design, manufacturing, packaging, selling, consulting and services of electronic information, computer software, hardware, accessories, components and Chinese data processing, etc.

The parent company only financial statements are expressed by the functional currency (New Taiwan dollars) of the Company.

2. THE DATE AND PROCEDURES OF AUTHORIZATION OF FINANCIAL STATEMENTS

The accompanying parent company only financial statements were approved by the Board of Directors and issued on February 23, 2022.

3. APPLICATION OF NEW AND REVISED STANDARDS AND INTERPRETATIONS

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

Application of the IFRSs endorsed and issued into effect by the FSC did not have any material impact on the Company’s accounting policies.

• (2) The IFRSs endorsed by the Financial Supervisory Commission (FSC) for application starting from 2022

New / Revised / Amended Standards and Interpretations “Annual Improvements to IFRS Standards 2018–2020” Amendments to IFRS 3 “Reference to the Conceptual Framework” Amendments to IAS 16 “Property, Plant and Equipment - Proceeds before Intended Use” Amendments to IAS 37 “Onerous Contracts - Cost of Fulfilling a Contract”	Effective Date Announced by IASB
	January 1, 2022 (Note 1) January 1, 2022 (Note 2) January 1, 2022 (Note 3) January 1, 2022 (Note 4)

• Note 1: The amendments to IFRS 9 are applied prospectively to modifications and exchanges of financial liabilities that occur on or after the annual reporting periods beginning on or after January 1, 2022. The amendments to IAS 41 “Agriculture” are applied prospectively to the fair value measurements on or after the annual reporting periods beginning on or after January, 2022. The amendments to IFRS 1 “First-time Adoptions of IFRSs” are applied retrospectively for annual reporting periods beginning on or after January 1, 2022.

• Note 2: The amendments are applicable to business mergers for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after January 1, 2022.

• Note 3: The amendments are applicable to property, plant and equipment that are brought to the location and condition necessary for them to be capable of operating in the manner intended by management on or after January 1, 2021.

• Note 4: The amendments are applicable to contracts for which the entity has not yet fulfilled all its obligations on January 1, 2022.

As of the date the accompanying parent company only financial statements were authorized for issue, the Company is continuously assessing the possible impact that the application of aforementioned standards and interpretations will have on the Company’s financial position and financial performance, and will disclose the relevant impact when the assessment is completed.

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(3) New IFRSs in issue by the IASB but not yet endorsed and issued into effect by the FSC

New / Revised / Amended Standards and Interpretations Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets between an Investor and its Associate or Joint Venture” IFRS 17 “Insurance Contracts” Amendments to IFRS 17 Amendments to IFRS 17 “Initial Application of IFRS 17 and IFRS 9 - Comparative Information” Amendments to IAS 1 “Classification of Liabilities as Current or Non-current” 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”

Effective Date Announced by the IASB (Note 1)

To be determined by IASB January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 (Note 2) January 1, 2023 (Note 3) January 1, 2022 (Note 4)

• Note 1: Unless stated otherwise, the above new, revised or amended standards and interpretations are effective for annual reporting periods beginning on or after their respective effective dates.

• Note 2: The amendments will be applied prospectively for annual reporting periods beginning on or after January 1, 2023.

• Note 3: The amendments are applicable to changes in accounting estimates and changes in accounting policies that occur on or after the beginning of the annual reporting period beginning on or after January 1, 2023.

• Note 4: Except for deferred taxes that will be recognized for temporary differences associated with lease and decommissioning obligations on January1, 2022, the amendments will be applied prospectively to transactions that occur on or after January 1, 2022.

As of the date the parent company only financial statements were authorized for issue, the Company is continuously evaluating the possible impact that the application of above standards and interpretations will have on the Company’s financial position and financial performance, and will disclose the relevant impact when the evaluation is completed.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

• (1) Statement of compliance

These parent company only financial statements have been prepared in conformity with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

• (2) Basis of preparation

The parent company only financial statements have been prepared on the historical cost basis except for financial instruments which are measured at fair values, and net defined benefit liabilities which are measured at the present value of the defined benefit obligation less the fair value of plan assets.

The fair value measurements, which are grouped into Levels 1 to 3 based on the degree to which the fair value measurement inputs are observable and based on the significance of the inputs to the fair value measurement in its entirety, are described as follows:

• A. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities, which can be acquired during measurement date;

• B. Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and

• C. Level 3 inputs are unobservable inputs for the asset or liability.

When preparing the parent company only financial statements, the Company account for subsidiaries by using the equity method. In order to agree with the amount of net income, other comprehensive income and equity attributable to shareholders of the parent company in the consolidated financial statements, the differences of the accounting treatment between the parent company only basis and the consolidated basis are adjusted under the heading of investments accounted for using equity method, share of profits of subsidiaries,

• 13 -

share of other comprehensive income of subsidiaries and the related equity items in the parent company only financial statements.

• (3) Classification of current and non-current assets and liabilities

Current assets include:

• A. Assets held primarily for the purpose of trading;

• B. Assets expected to be realized within twelve months after the reporting period; and

• C. Cash and cash equivalents unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

Current liabilities include:

• A. Liabilities held primarily for the purpose of trading;

• B. Liabilities due to be settled within twelve months after the reporting period, even if an agreement to refinance, or to reschedule payments, on a long-term basis is completed after the reporting period and before the parent company only financial statements are authorized for issue; and

• C. Liabilities for which the Company does not have an unconditional right to defer settlement for at least twelve months after the reporting period, unless issuing equities to defer settlement wouldn’t affect classification, depending on liabilities conditions.

Assets and liabilities that are not classified as current are non-current assents and liabilities, respectively.

(4) Foreign currencies

In preparing the Company’s financial statements, transactions in currencies other than the Company’s functional currency (i.e., foreign currencies) are recognized at the rates of exchange prevailing at the dates of the transactions.

At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Exchange differences on monetary items arising from settlement or translation are recognized in profit or loss in the period in which the arise.

Non-monetary items denominated in foreign currencies that are measured at fair value are retranslated at the rates prevailing at the date when the fair value is determined. Exchange differences arising from the retranslation of non-monetary items are included in profit or loss for the period except for exchange differences arising from the retranslation of non-monetary items in respect of which gains and losses are recognized directly in other comprehensive income, in which case, the exchange differences are also recognized directly in other comprehensive income.

Non-monetary item denominated in a foreign currency and measured at historical cost is stated at the reporting currency as originally translated from the foreign currency.

• (5) Inventories

Inventories are stated at the lower of cost or net realizable value. Inventory write-downs are made by item, except where it may be appropriated to group similar or related items. The net realizable value is the estimated selling price of inventories less the estimated costs necessary to make the sale under normal situations. Inventories are recorded at the weighted-average cost on the balance sheet date.

(6) Investment in subsidiaries

The Company uses the equity method to account for its investments in subsidiaries.

Subsidiaries are the entities controlled by the Company.

Under the equity method, the investment is initially recognized at cost and the carrying amount is increased or decreased to recognize the Company’s share of the profit or loss and other comprehensive income of the subsidiary after the date of acquisition. Besides, the Company also recognizes the Company’s share of the change in other equity of the subsidiary.

Changes in the Company’s ownership interests in subsidiaries that do not result in the Company’s loss of control over the subsidiaries are accounted for as equity transactions. Any difference between the carrying amounts of the investment and the fair value of the consideration paid or received is recognized directly in equity.

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• (7) Property, plant and equipment

Property, plant and equipment are stated at cost, less recognized accumulated depreciation and accumulated impairment loss.

Depreciation is recognized using the straight-line method. Each significant part is depreciated separately. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.

Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in profit or loss.

• (8) Impairment of property, plant and equipment, right-of-use assets, and intangible assets (excluding goodwill)

At the end of each reporting period, the Company reviews the carrying amounts of its property, plant and equipment, right of use assets and intangible assets (excluding goodwill), to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs. Corporate assets are also allocated to individual cashgenerating units or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.

Recoverable amount is the higher of fair value less costs to sell and value in use. If the recoverable amount of an asset or cash-generating unit is estimated to be less than its carrying amount, the carrying amount of the asset or cash-generating unit is reduced to its recoverable amount, with the resulting impairment loss recognized in profit or loss

• (9) Financial instruments

Financial assets and financial liabilities are recognized on parent company only balance sheets when a group entity becomes a party to the contractual provisions of the instruments.

Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss.

• A. Financial assets

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

a. Measurement category

The Company’s financial assets are classified into the following categories: financial assets at FVTPL, financial assets at amortized cost, and investments in equity instruments at FVTOCI.

• (a) Financial assets at FVTPL

For certain financial assets which include debt instrument that do not meet the criteria of amortized cost or FVTOCI, it is mandatorily required to measure them at FVTPL. Financial assets mandatorily classified as at FVTPL include investments in equity instruments which are not designated as at FVTOCI and debt instruments that do not meet the amortized cost criteria or the FVTOCI criteria.

Financial assets at FVTPL are subsequently measured at fair value, with any gains or losses arising on remeasurement recognized in profit or loss. The dividends, interest earned and net gain or loss recognized in profit or loss on the financial asset. Fair value is determined in the manner described in Note 25.

• (b) Financial assets at amortized cost

Financial assets that meet the following two conditions are subsequently measured at amortized cost:

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• a). The financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and

• b). The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Subsequent to initial recognition, financial assets at amortized cost, including cash and cash equivalents, notes and trade receivables and other financial assets are measured at amortized cost, which equals to gross carrying amount determined by the effective interest method less any impairment loss. Exchange differences are recognized in profit or loss.

Interest income is calculated by applying the effective interest rate to multiply the gross carrying amount of a financial asset.

Cash equivalents, held to meet short-term cash commitments, include time deposits with original maturities within 3 months from the date of acquisition, which are highly liquid, readily convertible to a known amount of cash, as well as deposits in the bank and repurchase bonds, which are subject to an insignificant risk of changes in value.

• (c) Investments in equity instruments at FVTOCI

On initial recognition, the Company may make an irrevocable designate investments in equity instruments that is not held for trading as at FVTOCI. Designation at FVTOCI is not permitted if the equity investment is held for trading or if it is contingent consideration recognized by an acquirer in a business combination.

Investments in equity instruments at FVTOCI are subsequently measured at fair value with gains and losses arising from changes in fair value recognized in other comprehensive income and accumulated in other equity. The cumulative gain or loss will not be reclassified to profit or loss on disposal of the equity investments, instead, they will be transferred to retained earnings.

Dividends on these investments in equity instruments at FVTOCI are recognized in profit or loss when the Company’s right to receive the dividends is established, unless the dividends clearly represent a recovery of part of the cost of the investment.

b. Impairment of financial assets

The Company recognizes a loss allowance for expected credit losses on financial assets at amortized cost (including notes and trade receivables).

The Company always recognizes the loss allowance by lifetime Expected Credit Loss (i.e. ECL) for notes and accounts receivable. For all other financial instruments, the Company recognizes lifetime ECL when there has been a significant increase in credit risk since initial recognition. If, on the other hand, the credit risk on the financial instrument has not increased significantly since initial recognition, the Company measures the loss allowance at an amount equal to 12-month ECL.

Expected credit losses reflect the weighted average of credit losses with the respective risks of a default occurring as the weights. Lifetime ECL represents the expected credit losses that will result from all possible default events over the expected life of a financial instrument. In contrast, 12-month ECL represents the portion of lifetime ECL that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date.

In order for the Company to fulfill the purpose of internal credit and risk management control, under the premise that does not take into account of the collaterals owned by the Company, the following will be deemed as a default of the financial assets:

• (a) Either internal or external information indicates that it is impossible for the debtors to clear the debts;

• (b) Any delay in payment – unless there is reasonable and supporting information that indicates the basis for delaying the payment is more appropriate.

The Company recognizes an impairment gain or loss in profit or loss for all financial instruments with a corresponding adjustment to their carrying amount through a loss allowance account.

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• c. De-recognition of financial assets

The Company derecognizes a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party.

On derecognition of a financial asset at amortized cost in its entirety, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss. On derecognition of an investment in an equity instrument at FVTOCI, the cumulative gain or loss that had been recognized in other comprehensive income is transferred directly to retained earnings, without recycling through profit or loss.

B. Equity Instruments

The equity instruments issued by the Group are recognized based on the amount obtained after deducting the cost of direct issue.

C. Financial liabilities

a. Subsequent measurement

All financial liabilities are measured at amortized cost using the effective interest method.

b. De-recognition of financial liabilities

The difference between the carrying amount of the financial liability derecognized and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognized in profit or loss.

(10) Revenue recognition

The Company identifies the contract with the customers, allocates the transaction price to the performance obligations, and recognizes revenue when performance obligations are satisfied.

Revenue from sale of goods

Revenue from sale of goods comes from sales of computer software, hardware, accessories, equipment, and components, etc. Customers have the right of quotation and user, and the responsibility of resale as goods after shipment and taking risks of losses of obsolete goods. The Company recognizes revenues and trade receivable as goods after shipment.

• (11) Leases

At the inception of a contract, the Company assesses whether the contract is, or contains, a lease.

• A. The Company as lessor

Leases are classified as finance leases whenever the terms of a lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

Lease payments (less any lease incentives payable) from operating leases are recognized as income on a straight-line basis over the terms of the relevant leases.

• B. The Company as lessee

Except for payments for low-value asset leases and short-term leases which are recognized as expenses on a straight-line basis, the Company recognizes right-of-use assets and lease liabilities for all leases at the commencement date of the lease.

Right-of-use assets are initially measured at cost, which comprises the initial measurement of lease liabilities adjusted for lease payments made at or before the commencement date, and less any lease incentives received, any initial direct costs incurred and an estimate of costs needed to restore the underlying assets. Right-of-use assets are subsequently measured at cost less accumulated depreciation and impairment losses and adjusted for any remeasurement of the lease liabilities. Right-of-use assets are presented on a separate line in the parent company only balance sheets.

Right-of-use assets are depreciated using the straight-line method from the commencement dates to the earlier of the end of the useful lives of the right-of-use assets or the end of the lease terms.

• 17 -

Lease liabilities are initially measured at the present value of the lease payments, which comprise fixed payments. The lease payments are discounted using the interest rate implicit in a lease, if that rate can be readily determined. If that rate cannot be readily determined, the Company uses the lessee’s incremental borrowing rates.

Subsequently, lease liabilities are measured at amortized cost using the effective interest method, with interest expense recognized over the lease terms. When there is a change in a lease term or a change in future lease payments resulting from a change in an index or a rate used to determine those payments, the Company remeasures the lease liabilities with a corresponding adjustment to the right-of-use-assets. However, if the carrying amount of the right-of-use assets is reduced to zero, any remaining amount of the remeasurement is recognized in profit or loss. Lease liabilities are presented on a separate line in the parent company only balance sheets.

(12) Costs of loans

All Costs of loans incurred shall be recognized as profits and losses at the current period.

• (13) Employee benefit

• A. Short-term employee benefits.

Liabilities recognized in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for service rendered by employees.

B. Retirement benefits

Payments to defined contribution retirement benefit plans are recognized as an expense when employees have rendered service entitling them to the contribution.

Defined benefit costs (including service cost, net interest and remeasurement) under the defined benefit retirement benefit plans are determined using the Projected Unit Credit Method. Service cost (including current service cost as well as previous service cost, and net interest on the net defined benefit liability (asset) are recognized as employee benefits expense in the period they occur, or when the plan amendment or curtailment occurs/when the settlement occurs. Remeasurement, comprising actuarial gains and losses and the return on plan assets (excluding interest), is recognized in other comprehensive income in the period in which they occur. Remeasurement recognized in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to profit or loss.

Net defined benefit liability (asset) represents the actual deficit (surplus) in the Company’s defined benefit plan.

(14) Share-based payment arrangements

The fair value and expected estimate amounts of the stock options and restricted shares determined at the grant date of the stock options is expensed on a straight-line basis over the vesting period, based on the Company’s estimate of stock options that will eventually vest, with a corresponding increase in capital surplus - employee stock options. The fair value determined at the grant date of the stock options is recognized as an expense in full at the grant date when the stock options granted vest immediately.

When restricted shares for employees of the company are issued, other equity – unearned employee benefits is recognized on the grant date, with a corresponding increase in capital surplus – employee restricted shares. If restricted shares for employees are granted for consideration and should be returned, they are recognized as payables.

At the end of each reporting period, the Company revises its estimate of the number of stock options expected to vest. The impact of the revision of the original estimates is recognized in profit or loss such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to the capital surplus – employee stock options and capital surplus – employee restricted shares.

• (15) Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.

• A. Current tax

The Company recognizes current earnings (losses) in accordance with the Income Tax Act of the Republic of China, and calculate the amount for tax payable (recoverable).

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Income tax on unappropriated earnings is expensed in the year the shareholders approved the appropriation of earnings which is the year subsequent to the year the earnings are generated according to Taiwan’s Income Tax Act.

Adjustments of prior years’ tax liabilities are added to or deducted from the current year’s tax provision.

B. Deferred tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the parent company only financial statements and the corresponding tax bases used in the computation of taxable profit.

Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences, net operating loss carryforwards and tax credits for research and development expenses to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized.

Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries, except where the Company is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments are only recognized to the extent that it is probable that there will be sufficient taxable profits against which to utilize the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the deferred tax asset to be recovered. The deferred tax assets which originally not recognized is also reviewed at the end of each reporting period and recognized to the extent that it is probable that sufficient taxable profits will be available to allow all or part of the deferred tax asset to be recovered.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the year in which the liability is settled or the asset is realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

C. Current and deferred tax for the year

Current and deferred tax are recognized in profit or loss, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognized in other comprehensive income or directly in equity respectively.

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION AND UNCERTAINTY

In the application of the Company’s accounting policies, the Company is required to make judgments, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered relevant. Actual results may differ from these estimates.

The Company considers the recent development of the COVID-19 in Taiwan and its economic environment implications when making its critical accounting estimates in cash flow projections, growth rate, discount rate, profitability, etc. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised if the revisions affect only that period or in the period of the revisions and future periods if the revisions affect both current and future periods.

Write-down of inventory

Net realizable value of inventory is the estimated selling price in the ordinary course of business less the estimated costs necessary to close the sales. The estimation of net realizable value was based on current market conditions and the historical experience of selling products of a similar nature. Changes in market conditions may have a material impact on the estimation of net realizable value.

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6. CASH AND CASH EQUIVALENTS

CASH AND CASH EQUIVALENTS
Cash on hand and revolving funds Checking accounts and demand deposits in banks Cash equivalents Repurchase agreements collateralized by bonds	December 31, 2021 $ 152 645,227 138,400 $ 783,779	December 31, 2020
			$ 207 538,749 28,480 $ 567,436

As the end of reporting period, the market rate intervals of demand deposits in banks and repurchase agreements collateralized by bonds were as follows:

agreements collateralized by bonds were as follows:
Demand deposits in banks Repurchase agreements collateralized by bonds	December 31, 2021 0.005%~0.25% 0.30%~0.39%	December 31, 2020
		0.005%~0.32% 0.45%

7. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

Financial assets－current Mandatorily measured at FVTPL Domestic convertible bonds Domestic listed ordinary shares Fund beneficiary certificates Financial assets－non-current Mandatorily measured at FVTPL Domestic listed preference shares Fund beneficiary certificates	December 31, 2021 $ 30,045 1,163 300,001 $ 331,209 $ 14,681 23,165 $ 37,846	December 31, 2020	December 31, 2020
			$ 15,966 1,785 332,519 $ 350,270 $ 14,403 20,988 $ 35,391

8. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

Investments in equity instruments Non-current Domestic investment Listed ordinary shares and emerging market ordinary shares Listed preference shares Unlisted shares	December 31, 2021 $ 77,277 130,945 32,353 $ 240,575	December 31, 2020	December 31, 2020
			$ 70,729 164,448 18,142 $ 253,319

The investments in those ordinary and preferred shares are in line with the Company’s medium- to long-term strategies and the investment profits are expected to be gained in the long run. The management of the Company management elected to designate these investments in equity instruments as at FVTOCI as they believe that recognizing short-term fluctuations in these investments’ fair value in profit or loss would not be consistent with the Company’s strategy of holding these investments for long-term purposes.

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9. FINANCIAL ASSETS AT AMORTIZED COST

FINANCIAL ASSETS AT AMORTIZED COST
Current Domestic investment Time deposits with original maturities of more than three months (1) Repurchase agreements collateralized by bonds (2) Non-current Domestic investment Pledged time deposit (3) Foreign investment Barclays Bank corporate bond (USD) (4) Prudential plc corporate bond (USD) (5) Perusahaan Listrik Negara corporate bond (USD) (6)	December 31, 2021 $ 146,570 747,360 $ 893,930 $ 30,523 - - 15,441 $ 45,964	December 31, 2020
			$ 232,010 - $ 232,010 $ 20,390 14,895 29,166 - $ 64,451

• (1) As of December 31, 2021 and 2020 the market interest rate intervals of time deposit over 3 months portion were 0.77%~0.815% and 0.77%~2.10%, respectively.

• (2) As of December 31, 2021, the market interest rate of repurchase agreements collateralized by bonds over 3 months portion was 0.30%~0.40%.

• (3) Please refer to Note 27 for more details on financial assets at amortized cost under pledge.

• (4) The Company purchased Barclays Bank corporate bond (USD) by USD 527 thousand, with a coupon rate of 4.836%, in August, 2019. As for adjustment portion of investments, the Company sold all bonds by $15,560 thousand, and recognized $1,003 thousand of gain from sale of financial assets at amortized cost in July, 2021.

• (5) The Company purchased Prudential plc corporate bond (USD) by USD 1,040 thousand, with a coupon rate of 4.875%, in August, 2019. As for adjustment portion of investments, the Company sold all bonds by $28,936 thousand, and recognized $444 thousand of gain from sale of financial assets at amortized cost in July, 2021.

• (6) The Company purchased Perusahaan Listrik Negara corporate bond (USD) by USD 559 thousand, with a coupon rate of 5.25% in May, 2021.

• (7) The Company purchased AT&T corporate bond (USD) by USD 460 thousand with a coupon rate of 3.65% and USD 553 thousand with a coupon rate of 4.50%, in March 2021 and November 2019, respectively. The bonds purchased in March 2021 was of USD 460 thousand. As for adjustment portion of investments, the Company sold all bonds by $14,021 thousand, and recognized $1,245 thousand of gain from sale of financial assets at amortized cost in August, 2021; the purchased bonds of USD 553 thousand in November 2019 were sold in November 2020 and recognized $1,260 thousand of gain from sale of financial assets at amortized cost.

• (8) Please refer to Note 10 for relevant credit risk management and impairment assessment information for financial assets at amortized cost.

10. CREDIT RISK MANAGEMENT FOR INVESTMENTS IN DEBT INSTRUCTMENTS

The investments in debt instruments of the Company are mainly financial assets at amortized cost.

The strategy that the Company adopts is to invest in debt instruments that are rated as investment grade or higher and have low credit risk for the purpose of impairment assessment. The credit rating information is provided by external independent agencies. The Company consistently monitors changes in the credit risks of the invested debt instruments by tracking ratings and relevant information, and reviews the yield curve of bonds, material information of the bond-issuers, etc., so as to evaluate if there is a significant increase in the debt instruments since initial recognition.

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The Company assesses the information of investment risk provided by external rating agencies and evaluates the 12-month expected credit loss or lifetime expected credit loss. The bonds that the Company invested are all of investment grade, and the credit risk of the bond-issuers is low and is capable to settle the contractual cash flows. The Company does not anticipate that the corporate bonds invested will have any material expected credit loss resulted from default within the 12 months after the date of the financial statements, and thus did not recognize allowance for loss as of December 31, 2021 and 2020.

11. NOTES AND TRADE RECEIVABLE

Measured at amortized cost Notes receivable Trade receivable Overdue receivable Less: Allowances for impairment loss - trade receivable Less: Allowances for impairment loss - overdue receivable		December 31, 2021 $ 288,710 2,543,452 - 4,751 ) - $ 2,827,411		December 31, 2020
	(		( (	$ 230,490 1,882,626 1,474 11,432 ) 1,474) $ 2,101,684

The average credit period of sales of goods of the Company was 60-90 days, and no interest was charged on trade receivable.

In order to minimize credit risk, the Company’s management has delegated a team responsible for determining credit limits, credit approvals and other monitoring procedures to ensure that follow-up action is taken to recover overdue receivables. In addition, the Company reviews the recoverable amount of each individual trade receivable at the end of the reporting period to ensure that adequate allowance is made for possible irrecoverable amounts. In this regard, the Company’s management believes the Company’s credit risk was significantly reduced.

The Company applies the approach to providing for expected credit losses which permits the use of lifetime expected loss provision for all trade receivable. The expected credit losses of trade receivable on durable are estimated using a provision matrix by reference to past default experience of the debtor and an analysis of the debtor’s past experience of receivable and current financial position, expectation of GDP and prospect of the industry, deciding the rate of the expected credit losses by the different levels of credit limits of customers and actual conditions, based on the degree of doubtful accounts triggered by customers of different industries.

The Company writes off an account receivable when there is information indicating that the respective debtor is experiencing severe financial difficulty and there is no realistic prospect of recovery of the receivable. For accounts receivable that have been written off, the Company continues to engage in enforcement activity to attempt to recover the receivables which are due. Where recoveries are made, these are recognized in profit or loss.

The following table details the loss allowance of trade receivable:

December 31, 2021

December 31, 2021
Gross carrying amount Loss allowance (Lifetime ECLs) Amortized cost December 31, 2020 Gross carrying amount Loss allowance (Lifetime ECLs) Amortized cost		Not Past Due $ 2,793,363 435) $ 2,792,928 Not Past Due $ 2,099,693 5,895) $ 2,093,798		1-30 Days Past Due $ 19,768 776) $ 18,992 1-30 Days Past Due $ 2,687 899) $ 1,788		31-60 Days Past Due $ 12,883 1,625) $ 11,258 31-60 Days Past Due $ 10,160 4,344) $ 5,816		61-90 Days Past Due $ 5,297 1,064) $ 4,233 61-90 Days Past Due $ 576 294) $ 282	More Than 90 DaysPast Due $ 851 ( 851) $ - More Than 90 DaysPast Due $ 1,474 ( 1,474) $ -		Total
	(		(		(		(			(	$ 2,832,162 4,751) $ 2,827,411 Total
	(		(		(		(		(	(	$ 2,114,590 12,906) $ 2,101,684

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The movements of the loss allowance of trade receivable were as follows:

The movements of the loss allowance of trade receivable were as follows:	The movements of the loss allowance of trade receivable were as follows:	The movements of the loss allowance of trade receivable were as follows:
2021 2020 Balance at January 1 $ 12,906 $ 35,510 Less: Amounts written off ( 1,474 ) ( 19,342 ) Less: Reversal of loss allowance ( 6,681) ( 3,262) Balance at December 31 $ 4,751 $ 12,906 12.INVENTORIES December 31, 2021 December 31, 2020 Commodities $ 1,620,945 $ 1,223,050 The nature of the cost of goods sold is as follows: December 31, 2021 December 31, 2020 Cost of sales $ 11,377,852 $ 8,669,432 Write-down (reversal of write-down) of inventories 26,162 ( 7,898) $ 11,404,014 $ 8,661,534 13.INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD December 31, 2021 December 31, 2020 Investments in subsidiaries $ 380,841 $ 206,746 (1) Investments in subsidiaries December 31, 2021 December 31, 2020 Zotech Co., Ltd. $ 37,348 $ 43,132 Zerone Win Investment Co., Ltd. 331,797 154,088 Asiaone Holdings Ltd. 11,696 9,526 $ 380,841 $ 206,746 Percentage ofowners'equity and votingright Name of subsidiaries December 31, 2021 December 31, 2020 Zotech Co., Ltd. 85.37% 85.37% Zerone Win Investment Co., Ltd. 100.00% 100.00% Asiaone Holdings Ltd. 100.00% 100.00%					2020
				$ 35,510 ( 19,342 ) ( 3,262) $ 12,906 December 31, 2020
				$ 1,223,050 December 31, 2020
			(	$ 8,669,432 7,898) $ 8,661,534 December 31, 2020
	Investments in subsidiaries (1) Investments in subsidiaries Zotech Co., Ltd. Zerone Win Investment Co., Ltd. Asiaone Holdings Ltd. Name of subsidiaries Zotech Co., Ltd. Zerone Win Investment Co., Ltd. Asiaone Holdings Ltd.
				$ 206,746 December 31, 2020
		December 31, 2021 85.37% 100.00% 100.00%	December 31, 2020
			85.37% 100.00% 100.00%

(2) Investments in associates

The Company invested and founded Chi-Ta International Co., Ltd., that engaged mainly in researching and manufacturing hardware of auto-used electronic equipment, with investment amount to $10,000 thousand, and share-holding ratio of 30% in March, 2014, since it kept net losses, foresaw decrease in future cash flows, evaluated recognized $7,243 thousand of impairment losses in 2015, and recognized book value of $0 thousand after recognized deficits. In April, 2020, the Company disposed all shares and recognized $275 thousand in gains.

• 23 -

14. PROPERTY, PLANT AND EQUIPMENT

Cost Balance at January 1, 2020 Additions Disposals Reclassification Balance at December 31, 2020 Accumulated depreciation Balance at January 1, 2020 Disposals Depreciation Balance at December 31,2020 Carrying amounts at December 31, 2020 Cost Balance at January 1, 2021 Additions Disposals Reclassification Balance at December 31, 2021 Accumulated depreciation Balance at January 1, 2021 Disposals Depreciation Balance at December 31, 2021 Carrying amounts at December 31, 2021		Land $ 234,892 - - - $ 234,892 $ - - - $ - $ 234,892 $ 234,892 - - - $ 234,892 $ - - - $ - $ 234,892		Buildings $ 128,185 - - - $ 128,185 $ 71,666 - 1,816 $ 73,482 $ 54,703 $ 128,185 - - - $ 128,185 $ 73,482 - 1,816 $ 75,298 $ 52,887	Machinery and equipment	Office equipment $ 34,586 3,129 ( 505 ) 1,753 $ 38,963 $ 23,832 ( 505 ) 7,407 $ 30,734 $ 8,229 $ 38,963 5,258 ( 639 ) 1,600 $ 45,182 $ 30,734 ( 639 ) 5,919 $ 36,014 $ 9,168		Delivery equipment $ 2,458 - - - $ 2,458 $ 984 - 492 $ 1,476 $ 982 $ 2,458 - - - $ 2,458 $ 1,476 - 492 $ 1,968 $ 490	Other equipment $ 15,535 3,230 ( 926 ) 891 $ 18,730 $ 5,183 ( 386 ) 5,463 $ 10,260 $ 8,470 $ 18,730 2,854 - 13,400 $ 34,984 $ 10,260 - 6,258 $ 16,518 $ 18,466	Total
					$ 8,173 - ( 133 ) - $ 8,040 $ 8,173 ( 133 ) - $ 8,040 $ - $ 8,040 - ( 1,110 ) - $ 6,930 $ 8,040 ( 1,110 ) - $ 6,930 $ -					$ 423,829 6,359 ( 1,564 ) 2,644 $ 431,268 $ 109,838 ( 1,024 ) 15,178 $ 123,992 $ 307,276 $ 431,268 8,112 ( 1,749 ) 15,000 $ 452,631 $ 123,992 ( 1,749 ) 14,485 $ 136,728 $ 315,903

Depreciation expenses were depreciated on a straight-line basis over the estimated useful life of the asset:

Buildings	7-50 Years
Machinery equipment	3 Years
Office equipment	3-5 Years
Delivery equipment	5 Years
Other equipment	3 Years

Please refer to Note 27 for more details on property, plant and equipment under pledge.

15. LEASE ARRANGEMENTS

(1) Right-of-use assets

ight-of-use assets
Carrying amounts of right-of-use assets Buildings Office equipment Additions to right-of-use assets Depreciation charge for right-of-use assets Buildings Office equipment	December 31, 2021 $ 11,058 143 $ 11,201 2021 $ 12,020 $ 7,380 201 $ 7,581	December 31, 2020
			$ 6,418 344 $ 6,762 2020
			$ 4,507 $ 4,876 201 $ 5,077

• 24 -

(2) Lease liabilities

(2) Lease liabilities
Carrying amounts of lease liabilities Current Non-current Range of discount rate for lease liabilities was Buildings Office equipment (3) Other lease information Expenses relating to short-term leases Expenses relating to low-value asset leases Total cash (outflow) for leases OTHER PAYABLE Salaries and bonuses payable Employees', directors', and supervisors' compensation payable Others	December 31, 2021 $ 5,162 $ 6,370 as follows: December 31, 2021 0.75%～1.20% 1.20% 2021 $ 634 $ 31 ($ 8,080) December 31, 2021 $ 124,199 43,071 86,816 $ 254,086	December 31, 2020
		$ 5,223 $ 1,597 December 31, 2020
			1.20% 1.20% 2020
		$ 168 $ 32 ($ 5,358) December 31, 2020
			$ 84,202 35,420 112,906 $ 232,528

16. OTHER PAYABLE

17. RETIREMENT BENEFIT PLANS

(1) Defined contribution plans

The plan under the R.O.C. Labor Pension Act (the “Act”) is deemed a defined contribution plan. Pursuant to the Act, ZOTC has made monthly contributions equal to 6% of each employee’s monthly salary to employees’ pension accounts.

(2) Defined benefit plans

ZOTC has defined benefit plans under the R.O.C. Labor Standards Act that provide benefits based on an employee’s length of service and average monthly salary for the six-month period prior to retirement. The Company contributes an amount equal to 2% of salaries paid each month to their respective pension funds (the Funds), which are administered by the Labor Pension Fund Supervisory Committee (the Committee) and deposited in the Committee’s name in the Bank of Taiwan. Before the end of each year, the Company assesses the balance in the Funds. If the amount of the balance in the Funds is inadequate to pay retirement benefits for employees who conform to retirement requirements in the next year, the Company is required to fund the difference in one appropriation that should be made before the end of March of the next year. The Funds are operated and managed by Bureau of Labor Funds, Ministry of Labor; as such, the Company does not have any right to intervene in the investments of the Funds.

Amounts recognized in respect of these defined benefit plans in the parent company only balance sheets were as follows:

were as follows:
Present value of defined benefit obligation Fair value of plan assets Net defined benefit liability	December 31, 2021 $ 61,127 ( 41,903) $ 19,224	December 31, 2020
	(	(	$ 60,393 39,411) $ 20,982

• 25 -

Movements in net defined benefit liabilities were as follows:

Balance at January 1, 2020 Service cost Current service cost Interest expense (income) Recognized in profits or losses Remeasurements Return on plan assets (excluding amounts included in interest, net) Actuarial loss arising from changes in demographic assumptions Actuarial loss arising from changes in financial assumptions Actuarial loss arising from experience adjustments Recognized in other comprehensive income Contribution from employer Balance at December 31, 2020 Balance at January 1, 2021 Service cost Current service cost Interest expense (income) Recognized in profits or losses Remeasurements Return on plan assets (excluding amounts included in interest, net) Actuarial loss arising from changes in demographic assumptions Actuarial loss arising from changes in financial assumptions Actuarial gain arising from experience adjustments Recognized in other comprehensive income Contribution from employer Balance at December 31, 2021	Present value of defined benefit obligations $ 58,307 256 437 693 - 185 1,320 ( 112) 1,393 - $ 60,393 $ 60,393 159 302 461 - 1,269 ( 631 ) ( 365) 273 - $ 61,127		Fair value of plan assets $ 36,389) - 275) 275) 1,181 ) - - - 1,181) 1,566) $ 39,411) $ 39,411) - 201) 201) 497 ) - - - 497) 1,794) $ 41,903)		Net defined benefit liability/assets
	( ( (	( ( ( ( ( ( ( ( ( ( ( ( ( (		( ( ( ( ( ( ( (	$ 21,918 256 162 418 1,181 ) 185 1,320 112) 212 1,566) $ 20,982 $ 20,982 159 101 260 497 ) 1,269 631 ) 365) 224) 1,794) $ 19,224

An analysis by function of the amounts recognized in profit or loss in respect of the defined benefit plans is as follows:

s as follows:
Selling and marketing expenses General and administrative expenses		2021 $ 146 114 $ 260		2020
				$ 181 237 $ 418

Through the defined benefit plans under the R.O.C. Labor Standards Act, the Company is exposed to the following risks:

• A. Investment risk: The pension funds are invested in domestic and foreign equity and debt securities, bank deposits, etc. The investment is conducted at the discretion of the government’s designated authorities or under the mandated management. However, under the R.O.C. Labor Standards Act, the rate of return on the Company’s assets shall not be less than the average interest rate on a two-year time deposit published by the local banks and the government is responsible for any shortfall in the event that the rate of return is less than the required rate of return.

• 26 -

• B. Interest risk: A decrease in the government bond interest rate will increase the present value of the defined benefit obligation; however, this will be partially offset by an increase in the return on the debt investments of the plan assets.

• C. Salary risk: The present value of the defined benefit obligation is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the present value of the defined benefit obligation.

The actuarial valuations of the present value of the defined benefit obligation were carried out by qualified actuaries. The principal assumptions at the measurement date were as follows:

Discount rate Future salary increase rate	December31,2021 0.625% 2.750%	December31,2020
		0.500% 2.750%

If main actuarial assumptions vary within a reasonable extent, as for other assumption remaining unchanged, the present value of defined benefit obligation increases (decreases) shall be as follows:

Discount rate increases by 0.25% decreases by 0.25% Future salary increase rate increases by 0.25% decreases by 0.25%	December31,2021 ($ 1,252) $ 1,294 $ 1,247 ($ 1,214)	December31,2020	December31,2020
	( (	( (	$ 1,321) $ 1,368 $ 1,317 $ 1,280)

As actuarial assumptions may be correlative with one another, it is less likely that only one single assumption will be changed, the above sensitive analysis cannot indicate actual changes of the present value of defined benefit obligation.

f defined benefit obligation.
Contribution amounts within 1 year Average duration of the defined benefit obligation	December31,2021 $ 1,843 8.3 Years	December31,2020
			$ 1,609 8.8 Years

18. EQUITY

• (1) Ordinary Shares

Authorized shares (in thousands) Authorized capital Issued and paid shares (in thousands) Issued capital	December31,2021 200,000 $ 2,000,000 151,971 $ 1,519,707	December31,2020	December31,2020
			150,000 $ 1,500,000 125,640 $ 1,256,402

The change in share capital is mainly due to the issuance of new shares from cash capital increase, employee stock options exercised and the cancellation of employee restricted shares.

As per the resolution of the Board of Directors’ Meeting held on October 13, 2021, the Company issued 25,000 thousand new shares with a par value of $10 per share at an issue price of $40, with December 21, 2021 as the base date for the capital increase.

• (2) Capital Surplus

May be used to offset a deficit, distributed as cash dividends, or transferred to share capital (Note) Premium on shares issued above par value Treasury stock transactions	December31,2021 $ 1,159,835 25,343	December31,2020
		$ 405,951 25,343 (Continued)

• 27 -

From exercised and invalid employees stock options The difference between the consideration received or paid and the carrying amount of the subsidiaries’ net assets during actual disposal or acquisition May not be used for any purpose Employees restricted shares Employees stock options	December 31, 2021 21,459 68 8,426 19,194 $ 1,234,325	December 31, 2020	December 31, 2020
			12,837 - 8,276 26,350 $ 478,757

(Concluded)

Note: Such capital surplus may be used to offset a deficit; in addition, when ZOTC has no deficit, such capital surplus may be distributed as cash dividends or transferred to share capital (limited to a certain percentage of ZOTC’s paid-in capital surplus and once a year).

(3) Retained earnings and dividend policy

Under the dividends policy as set forth in the Articles of Incorporation, where ZOTC earns profits in a fiscal year, such profit shall first be set aside to pay applicable taxes, offset losses of previous years, then set aside 10% for legal reserve, and also set aside or reverse a special reserve in accordance with the laws and regulations. Should there be any remaining profits, those profits, plus the accumulated undistributed retained earnings from the previous year shall be used first by ZOTC’s board of directors as the basis for proposing a distribution plan of dividends for preferred shares for the same year, any further remaining unappropriated earnings after the distribution of dividends of preferred shares shall be distributed in accordance with the proposal submitted by the board of directors, for approval at the shareholders’ meeting. The distributable dividends and bonuses may be paid in cash after a supermajority resolution of the board of directors, which shall be submitted to the shareholders’ meeting. For the policies on the distribution of employees’ compensation and remuneration of directors and supervisors, refer to employees’ compensation and remuneration of directors in Note 20 (4).

ZOTC adopts a dividend distribution policy whereby only surplus profits of ZOTC shall be distributed to shareholders. Based on the Company’s future capital budget planning and the needs for working capital requirements, as well as taking account into the impact to the extent of the diluted earnings per share and return on equity, no less than 30% of the remaining balance is to be allocated to shareholders and the ratio for cash dividends shall not be lower than 10% of the total shareholders’ dividends distributed for the same year.

The appropriation for legal capital reserve shall be made until the reserve equals the Company’s paid-in capital. The reserve may be used to offset a deficit, or be distributed as dividends in cash for the portion in excess of 25% of the paid-in capital if the Company incurs no loss.

The appropriations of 2020 and 2019 earnings have been approved by ZOTC’s shareholder’s meeting held on August 4, 2021 and June 10, 2020, respectively, were as follows:

Legal capital reserve Reversal of special reserve Cash dividends	Appropriation of Earnings For Fiscal Year 2020 For Fiscal Year 2019 $ 44,100 $ 35,131 - ( 16,844 ) 377,836 249,574	Dividends Per Share($)	Dividends Per Share($)
	For Fiscal Year 2020 $ 44,100 - 377,836	For Fiscal Year 2020 $ 3.0	For Fiscal Year 2019
			$ 2.0

The appropriations of earnings for 2021 have been proposed by ZOTC’s board of directors on February 23, 2022. The appropriations and dividends per share were as follows:

Legal reserve Cash dividends	Appropriation of Earnings $ 58,555 547,962	DividendsPerShare ($)
		$ 3.6

The appropriations of earnings for 2021 are subject to the resolution of the shareholders’ meeting to be held on May 26, 2022.

• 28 -

19. REVENUE

• (1) Income from contracts with clients

come from contracts with clients
Sales revenue Service revenue		2021 $ 12,562,027 68,047 $ 12,630,074		2020
				$ 9,594,796 63,982 $ 9,658,778

• (2) Remaining balance of the contracts

emaining balance of the contracts
Notes receivable (Note 11) Trade receivable (Note 11) Contract liability (Other current liabilities)	December 31, 2021 $ 288,710 $ 2,538,701 $ 45,161	December 31, 2020
			$ 230,490 $ 1,871,194 $ 17,423

20. NET INCOME

• (1) Other Gains and losses

(1) Other Gains and losses
Gain on financial assets at FVTPL Net foreign exchange gain (loss) Loss on disposal of property, plant and equipment Gain on disposal of investment accounted for using the equity method (2) Depreciation & amortization Property, plant and equipment Right-of-use assets Intangible assets An analysis of depreciation by function Operating expenses An analysis of amortization by function Operating expenses (3) Employee benefits expense Post-employment benefits Defined contribution plans Defined benefit plans (Note 17) Share-based payment Equity-settled Other employee benefits Salaries expense Others Total employee benefits expense Employee benefits expense summarized by function Operating expenses		2021 $ 10,050 19,254 - - $ 29,304 2021 $ 14,485 7,581 1,068 $ 23,134 $ 22,066 $ 1,068 2021 $ 10,489 260 10,749 4,748 372,491 44,186 416,677 $ 432,174 $ 432,174		2020
			(	$ 5,050 10,777 40 ) 275 $ 16,062 2020
				$ 15,178 5,077 778 $ 21,033 $ 20,255 $ 778 2020
				$ 9,454 418 9,872 11,982 290,705 37,857 328,562 $ 350,416 $ 350,416

• 29 -

(4) Compensation for employees and remuneration of directors

ZOTC shall allocate compensation to employees and Directors of ZOTC not less than 1%~15% and not more than 3% of surplus earnings during the period, respectively, and the amount of employees’ and Directors’ compensation for the years ended December 31, 2021 and 2020, with resolution of the board of directors on February 23, 2022 and February 24, 2021, were as follows:

Estimate Rate

Estimate Rate
Compensation of employee Compensation of director Amount Compensation of employee Compensation of director	2021 4% 2% 2021 Cash	2020
		4% 2% 2020
		Cash
	$ 28,714	$ 23,613
	14,357	11,807

If changes in the very amount after the end of the reporting period, it will be booked next year, based on accounting estimate regulations.

The distribution amount of employees’ and director’s compensation in 2020, and 2019 has no difference compared to the recognized amount of the parent company only financial statements in 2020 and 2019.

Relevant information about employees’ and director’s compensation can be found on the website of “Market Observation Post System” of TWSE.

21. INCOME TAXES

• (1) Income tax recognized in profit or loss

The major components of income tax expenses were as follows:

The major components of income tax expenses were	s were	as follows:
Current tax In respect of the current year Surtax on undistributed retained earnings Adjustments for previous years ( Deferred tax In respect of the current year ( Income tax expense recognized in profit or loss A reconciliation of accounting profit and income tax Profit before income tax from continuing operations Income tax expense calculated at the statutory rate Tax-exempt income ( Tax effect of expenses not deductible for tax Surtax on undistributed retained earnings The adjustment of current income tax expenses for previous years ( Others Total income tax expense recognized in profit or loss		2021 $ 141,121 953 289) 141,785 4,372) $ 137,413 expense was as follows: 2021 $ 674,772 $ 134,954 2,854 ) 4,649 953 289 ) - $ 137,413		2020
			(	$ 105,290 3,771 901) 108,160 5,126 $ 113,286 2020
	( (		( ( (	$ 554,909 $ 110,982 2,640 ) 3,052 3,771 901 ) 978) $ 113,286

• 30 -

(2) Deferred tax balances

Movements of deferred tax assets and deferred tax liabilities were as follows:

2021

2021
Deferred taxassets Temporary differences Allowance for inventory valuation losses Defined benefit plans Others Deferred tax liabilities Temporary differences Unrealized foreign exchange gains Others 2020 Deferred taxassets Temporary differences Allowance for inventory valuation losses Allowances for impairment loss Defined benefit plans Others Deferred tax liabilities Temporary differences Unrealized foreign exchange gains		Beginning Balance $ 27,081 4,197 4,698 $ 35,976 $ - - $ - Beginning Balance $ 28,661 2,993 4,383 5,815 $ 41,852 $ 793	Recognized in Profit or Loss $ 5,233 ( 307 ) ( 78) $ 4,848 $ 47 429 $ 476 Recognized in Profit or Loss ( $ 1,580 ) ( 2,993 ) ( 229 ) ( 1,117) ($ 5,919) ($ 793)	Recognized in Other Comprehensive Income $ - ( 45 ) - ($ 45) - - $ - Recognized in Other Comprehensive Income $ - - 43 - $ 43 $ -		Ending Balance
						$ 32,314 3,845 4,620 $ 40,779 $ 47 429 $ 476 Ending Balance
			( ( ( ( ( (			$ 27,081 - 4,197 4,698 $ 35,976 $ -

(3) Income tax assessment

The Company’s tax returns through 2019 had been assessed by the tax authorities.

22. EARNINGS PER SHARE

The earnings and weighted average number of ordinary shares outstanding used in the computation of earnings per share were as follows:

arnings per share were as follows:
Net Profit for the Year Earnings used in the computation of basic/diluted earnings per share		2021 $ 537,359		2020
				$ 441,623

• 31 -

Shares Weighted average number of ordinary shares used in the computation of basic earnings per share Effect of potentially dilutive ordinary shares： Employees’ compensation Employee stock options Employee restricted shares Weighted average number of ordinary shares outstanding in computation of diluted earnings per share		2021 126,765 739 2,295 367 130,166	Units: Thousand shares 2020	Units: Thousand shares 2020
				124,381 702 2,674 448 128,205

If the Company will distribute bonus to employees and the bonus will be settled in cash or shares, the Company will assume that the entire amount of the compensation or bonus will be settled in shares and the resulting potential shares are included in the weighted average number of shares outstanding used in the computation of diluted earnings per share, if the effect is dilutive. Such dilutive effect of the potential shares is included and considered in the computation of diluted earnings per share until the number of shares to be distributed to employees is resolved in the following year.

23.SHARE - BASED PAYMENT ARRANGEMENTS

(1) Employee stock option plan

In August 2015, September 2016, January 2018, and September 2018, 1,000, 1,860, 2000, and 2,000 options were granted to qualified employees of ZOTC, and each option entitles the holder to subscribe for 1,000 ordinary shares of the Company when exercisable. The options granted are valid for 6 years and shall be exercised a portion of them after two years from the date of grant. The options were granted at an exercise price equal to the fair value of ZOTC’s ordinary shares on the grant date. For any subsequent changes in the Company’s ordinary shares, the exercise price of options will be adjusted by the regulated formula, accordingly.

Information about employee stock options was as follows:

Employee stock options Balance, begin of period Options exercised Invalid options Balance, end of period Options exercisable, end of the period	2021 Number of Options (In Thousands) Weighted Average Exercise Price ($) 4,468 $ 16.70 ( 1,346 ) 14.76 ( 88) 16.35 3,034 15.93 1,595	2020	2020
	Number of Options (In Thousands) 4,468 ( 1,346 ) ( 88) 3,034 1,595	Number of Options (In Thousands) 5,653 ( 1,017 ) ( 168) 4,468 1,820	Weighted Average Exercise Price ($)
	( (	( (	$ 17.18 14.02 17.51 16.70

Information about outstanding options at the end of reporting period was as follows:

December 31, 2021 Range of Exercise Price ($) Weighted- Over-Age Remaining Contractual Life (Years) $ - - 12.50 (Note) 0.68 15.40 (Note) 2.01 16.90 (Note) 2.67	December 31, 2020	December 31, 2020
Range of Exercise Price ($) $ - 12.50 (Note) 15.40 (Note) 16.90 (Note)	Range of Exercise Price ($) $ 11.70 (Note) 13.40 (Note) 16.80 (Note) 18.40 (Note)	Weighted- Over-Age Remaining Contractual Life (Years)
		0.67 1.68 3.01 3.67

Note: The issued price will be adjusted by methods of issuance.

• 32 -

The Company adopted binomial option pricing model and Black-Scholes price model to evaluate inputs of stock options in September 2018, January 2018, September 2016 and August 2015 as follows:

Securities price of the vested date Exercised price Foreseeable volatility rate Duration Foreseeable dividend rate Risk-free interest rate	September, 2018 20.65 Dollars 20.65 Dollars 32.96% 6 Years 0% 0.72%	January, 2018	September, 2016	August, 2015
		19.85 Dollars 19.85 Dollars 33.81% 6 Years 0% 0.74%	16.95 Dollars 16.95 Dollars 38.26% 6 Years 0% 0.56%	15.65 Dollars 15.65 Dollars 39.14%~40.47% 4~5 Years 0% 0.77%~0.87%

The compensation cost recognized were $1,459 thousand and $6,894 thousand for the years ended December 31, 2021 and 2020, respectively.

• (2) Employee restricted shares

The shareholders meeting of the Company, on June 11, 2018, resolved to issue employee restricted shares amounting to $7,000 thousand, consisting of 700 thousand shares, respectively, par value in $10, the subscription price is $0 (The issue price is $0), and authorized the Board to decide the issue price at the issuance date. The Board resolved to issue $7,000 thousand, with total share number of 700 thousand shares, on April 30, 2019 and the record date of issuance is June 13, 2019.

An employee who remains employed at the Company after the period as follows has elapsed from the time of employee restricted shares and who personal performance have met with the criteria listing, will be eligible for vesting of an installment of the shares.

• A. An employee who remains employed at the Company after 1 year has elapsed from the time of employee restricted shares, and who personal performance have met with the criteria listing of 75 scores and above, will be eligible for vesting of an installment of 25% of the shares.

• B. An employee who remains employed at the Company after 2 year has elapsed from the time of employee restricted shares, and who personal performance have met with the criteria listing of 75 scores and above, will be eligible for vesting of an installment of 25% of the shares.

• C. An employee who remains employed at the Company after 3 year has elapsed from the time of employee restricted shares, and who personal performance have met with the criteria listing of 75 scores and above, will be eligible for vesting of an installment of 25% of the shares.

• D. An employee who remains employed at the Company after 4 year has elapsed from the time of employee restricted shares, and who personal performance have met with the criteria listing of 75 scores and above, will be eligible for vesting of an installment of 25% of the shares.

After employees received the vested shares from the Company, it will redeem and cancel the issued employee restricted shares as employees breach the labor contract and working regulations, for the employee restricted shares that don't meet the vesting conditions.

When employees fail to meet the vesting conditions of employee restricted shares as redeemed by the Company without charge will be cancelled, based on the relevant regulations.

Compensation costs by issuance of employee restricted shares recognized were $3,230 thousand and $5,088 thousand in 2021 and 2020 respectively. As of December 31, 2021 and 2020, unearned employee benefits totaled $2,071 thousand and $5,301 thousand respectively, accounted for as a decrease in other equity.

(3) Reserve of cash capital increase for employee stock options

The Company reserved the cash capital increase for employee stock options in November 2021, this was calculated based on Black-Scholes price model and the parameters used are as follows:

Securities price of the vested date	$37.65
Exercised price	$40.00
Foreseeable volatility rate	20.07%
Foreseeable duration	0.0658 year
Risk-free interest rate	0.2352%

• 33 -

The cost incurred for reserving cash capital increase for employee stock options in 2021 was 59 thousand dollars.

24. CAPITAL RISK MANAGEMENT

The Company engages mainly in the agent of software and hardware, without any plans of imposed capital requirements at present and in the future. The Company manages its capital to ensure requirements of operating funds and dividend expenses, based on growth and development of scale of enterprise and prospective of the industry. The Company periodically reviews the policy of capital risk management, for seeking a steady and conservative policy.

The capital structure of the Company consists of net debt and equity (comprising share capital, capital reserves, retained earnings and other equity).

The Company is not subject to any externally imposed capital requirements.

25. FINANCIAL INSTRUMENTS

• (1) Information about Fair value of financial instruments that are not measured at fair value

Except as detailed in the following table, the management believes the carrying amounts of financial liabilities not measured at fair value recognized in the parent company only financial statements approximate or cannot be measured their fair values:

Financial Assets Measured at amortized cost －Foreign corporate bonds	December 31, 2021 Carrying Amount Fair Value $ 15,441 $ 15,585	December 31, 2020	December 31, 2020
	Carrying Amount $ 15,441	Carrying Amount $ 44,061	Fair Value
			$ 45,323

(2) Information about fair value of financial instruments measured at fair value on a recurring basis.

• A. Fair value hierarchy

December 31, 2021

December 31, 2021
Financial assets measured at FVTPL Domestic convertible bonds Domestic listed shares Fund beneficiary certification Total Financial assets measured at FVTOCI Equity investments －Domestic listed shares and emerging market shares －Domestic unlisted shares Total December 31, 2020 Financial assets measured at FVTPL Domestic convertible bonds Domestic listed shares Fund beneficiary certification Total		Level 1 $ 30,045 15,844 313,599 $ 359,488 $ 208,222 - $ 208,222 Level 1 $ 15,966 16,188 344,978 $ 377,132		Level 2 $ - - - $ - $ - - $ - Level 2 $ - - - $ -		Level 3 $ - - 9,567 $ 9,567 $ - 32,353 $ 32,353 Level 3 $ - - 8,529 $ 8,529		Total
								$ 30,045 15,844 323,166 $ 369,055 $ 208,222 32,353 $ 240,575 Total
								$ 15,966 16,188 353,507 $ 385,661

December 31, 2020

(Continued)

• 34 -

Financial assets measured at FVTOCI Equity investments －Domestic listed shares and emerging market shares －Domestic unlisted shares Total		Level 1 $ 223,085 - $ 223,085		Level 2 $ - - $ -		Level 3 $ 12,092 18,142 $ 30,234		Total
								$ 235,177 18,142 $ 253,319

(Concluded)

There were no transfers between Level 1 and Level 2 in 2021 and 2020, respectively.

• B. Valuation techniques and inputs applied for Level 3 fair value measurement

Fund beneficiary certificates are an asset-based method that estimates the fair value of individual assets covered by the valuation and evaluation targets, and the total market value of individual liabilities.

Domestic unlisted stocks are based on the market method, which is mainly calculated by referring to the relevant information of listed companies or those with similar industrial nature, and taking into account of their liquidity discounts.

(3) Categories of financial instruments

ategories of financial instruments
Financial assets Measured at FVTPL Mandatorily measured at FVTPL Financial assets measured at amortized cost (Note 1) Financial assets measured at FVTOCI －Investments in equity instruments Financial liabilities Measured at amortized cost (Note 2)	December 31, 2021 $ 369,055 4,587,999 240,575 3,228,319	December 31, 2020
		$ 385,661 2,972,799 253,319 2,460,375

• Note 1: The balances included financial assets at amortized cost, which comprise cash and cash equivalents, investments in debt instruments, notes receivable, trade receivable, other receivable, and refundable deposits.

• Note 2: The balances included financial liabilities measured at amortized cost, which comprise trade payable, other payable, and deposits received.

• (4) Financial risk management objectives and policies

The Company’s principal financial risk management objective is to manage the market risk, credit risk and liquidity risk based on related protocols and internal control procedures. The Company’s financial department measures the aforementioned risks based on the Company’s risk appetite, and reports to the board of directors for carrying out relevant policies at any time.

A. Market risk

The Company’s activities exposed it primarily to the financial risks of changes in foreign currency exchange rates.

a. Foreign currency risk

The Company’s purchases are denominated in foreign currencies, thus the Company is exposed to foreign currency risks. To protect against reductions in value of foreign currency denominated assets and the volatility of future cash flows caused by changes in foreign exchange rates, the Company utilizes derivative financial instruments, such as forward exchange contracts and options, for avoiding foreign currency risks.

The carrying amounts of the Company’s foreign currency denominated monetary assets and monetary liabilities of non-functional currency calculated (including those eliminated on consolidation) at the end of the reporting period are set out in Note 29.

• 35 -

Sensitivity analysis

The Company’s exchange rate exposure was in the exchange rate of U.S. dollars.

The sensitivity analysis included only outstanding foreign currency denominated monetary items and adjusts their translation at the end of the reporting period for a 5% change in foreign currency rates. If the New Taiwan dollar appreciates/depreciates 5% against the relevant currency,, the Company’s net profit in 2021 and 2020 would decrease/increase by $381 thousand and increase/decrease $41,819 thousand, respectively.

b. Interest rate risk

The Company exposed to the risk of interest rate at fair value, since holding the fixed-rate loan, accessing the interest rate of the bank loan regularly, observing influences on profits or losses from fluctuation range of the interest rate, keeping contact with the bank based on the actual requirement, and acquiring the best interest rate of the loan.

The carrying amount of the Company’s financial assets and financial liabilities with exposure to risks of interest rates at the end of the reporting period were as follows:

Interest rate risks at fair value －Financial assets －Financial liabilities Interest rate risks at cash flows －Financial assets	December 31, 2021 $ 940,739 11,532 782,782	December 31, 2020
		$ 197,519 6,820 666,171

Sensitivity analysis

The sensitivity analyses below were determined based on the Company’s exposure to interest rates for non-derivative instruments at the end of the reporting period.

If interest rates had been 50 basis points higher/lower and all other variables were held constant, the Company’s pre-tax profit in 2021 and 2020 would increase/ decrease by $3,914 thousand and $3,331 thousand, respectively. Exposure is triggered by risks of cash flows of the Company’s variable interest rates of deposits.

c. Other price risk

The Company is exposed to price risks arising from investments of public offering securities, corporate bonds and fund beneficiary certificates. The investments should be approved by the management, for controlling risks by holding different investment portfolios.

Sensitivity analysis

The following sensitivity analysis is based on risk exposure of equity prices at the end of the reporting period.

If equity prices had been 5% higher/lower, pre-tax profit in 2021 and 2020 would have increased/decreased by $18,453 thousand and $19,283 thousand, respectively, as a result of the changes in fair value of financial assets at FVTPL, and the other comprehensive income in would have increased/decreased by $12,029 thousand and $12,666 thousand, respectively, as a result of the changes in fair value of financial assets at FVTOCI.

B. Credit risk

Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in financial loss to the Company. As at the end of the reporting period, the Company’s maximum exposure to credit risk which will cause a financial loss to the Company due to failure to discharge an obligation by the counterparties is arising from the carrying amount of the respective recognized financial assets as stated in the parent company only balance sheets.

The Company adopted a policy of only dealing with creditworthy counterparties. Credit exposure is controlled by counterparty limits that are reviewed and approved by the financial department regularly.

• 36 -

To decrease a credit risk, the key management personnel of the Company is responsible for decision of rating criteria, credit limits approval, and other censor procedure, etc., in order to collect delinquent trade receivable. Otherwise, the Company reviews each trade receivable to assure allowance of impairment losses of uncollectable bad debts, hence the key management personnel considers credit concentration risk of trade receivable is insignificant.

The credit concentration risk of the current fund is insignificant, since the Company only transacts with financial institutions with good rating.

Trade receivable consisted of a large number of customers. Ongoing credit evaluation is performed on the financial condition of certain customer’s trade receivable. If necessary, purchasing insurance for credit enhancing procedures is a must.

The credit risk of the Company concentrates on top 5 customers of the Company. As of December 31, 2021 and 2020, the Company’s five largest customers accounted all for 34% and 33% of trade receivable, respectively.

C. Liquidity risk

The Company manages and maintains sufficient cash and cash equivalents so as to cope with its operations and mitigate the effects of fluctuations in cash flows. The Company’s management supervises financing line of the banking facilities and ensures compliance with the terms of loan agreements.

Liquidity & interest rate risk table

The table below summarizes the due analysis of the maturity profile of the Company’s non-derivative financial liabilities, enacted by contractual undiscounted payments of cash flow of financial liabilities, according to remaining contracts on the earliest date on which the Company may be required to pay, including interest and principal of cash flows.

The other non-derivative financial liabilities are listed at their contract repayment dates.

;December 31, 2021 Non-derivative financial liabilities No Interest-bearing liabilities Lease liabilities December 31, 2020 Non-derivative financial liabilities No Interest-bearing liabilities Lease liabilities	Less than 1 Year $ 3,227,519 5,232 $ 3,232,751 Less than 1 Year $ 2,459,575 5,271 $ 2,464,846		1-5 Years $ - 6,432 $ 6,432 1-5 Years $ - 1,599 $ 1,599		5+Years
					$ - - $ - 5+Years
					$ - - -

As of December 31, 2021 and 2020, the Company’s unused short-term credit of limit of the bank were $1,600,000 thousand and $1,250,000 thousand, respectively.

26. RELATED PARTIES TRANSACTIONS

The details of transactions between the Company and related parties are disclosed as follows.

(1) The Names and Relationships of Related-parties

The Names and Relationships of Related-parties
Name of the related parties Zotech Co., Ltd. Zerone Win Investment Co., Ltd. PetaCom Technology Co., Ltd. Wing Will International Co., Ltd. DigiCosmos Tech. Co., Ltd. AsiaOne Holdings Ltd. Techone (Shanghai) Co., Ltd. TrustONE Security Inc. Leukocyte-Lab Co. Ltd. K Way Information Corp.	Relationship with the Company
	Subsidiaries Subsidiaries Subsidiaries Subsidiaries Subsidiaries Subsidiaries Subsidiaries Associates Associates Other related parties

• 37 -

(2) Operating revenue

Operating revenue
Line Items Sales revenue Service revenue	Types of related parties Subsidiaries Associates Other related parties Subsidiaries		2021 $ 45,786 147 327 $ 46,260 $ 3,997		2020
					$ 28,350 - 244 $ 28,594 $ 2,838

Prices and payment terms for transactions with related parties and non-related parties were similar.

• (3) Purchases

Purchases
Types of related parties Subsidiaries Associates		2021 $ 17,373 1,194 $ 18,567		2020
				$ 12,505 - $ 12,505

• (4) Receivables from related parties (excluding loans and contract assets to related parties)

Line Items Trade receivable Other receivable	Types of related parties Subsidiaries Other related parties Subsidiaries		December 31, 2021 $ 10,459 343 48 $ 10,850		December 31, 2020
					$ 8,236 223 - $ 8,459

For the year ended December 31, 2021 and 2020 no impairment loss was recognized for trade receivables from related parties.

• (5) Payables to related parties

Line Items Types of related parties December 31, 2021 Trade payable Subsidiaries $ 16,059 Associates 582 Other Payables Subsidiaries 9 $ 16,650 ) Loans to related parties (Recognized as other current assets) Types of relatedparties／Name December 31, 2021 Subsidiaries $ 5,000 Interest income Types of relatedparties／Name 2021 Subsidiaries $ 48 ) Non-operating income Line Items Types of related parties 2021 Rental income Subsidiaries $ 981 ) Compensation of key management personnel 2021 Short-term employee benefits $ 45,768	December 31, 2021		December 31, 2020 $ 8,413 - - $ 8,413 December 31, 2020	December 31, 2020
				$ - 2020
				$ 205 2020
				$ 743 2020
				$ 43,730

• (6) Loans to related parties (Recognized as other current assets)

• (7) Non-operating income

• (8) Compensation of key management personnel

The compensation of directors and other key management personnel are decided by personal performance and economic market trend through the Remuneration Committee.

• 38 -

27. ASSETS PLEDGED AS COLLATERAL

The following assets were provided as collateral for bank borrowings and tariff guarantee for imported commodities:

mmodities:
Property, plant and equipment, Net Pledged time deposits (Financial assets at amortized cost－non-current)	December 31, 2021 $ 206,231 30,523 $ 236,754	December 31, 2020
			$ 207,620 20,390 $ 228,010

1. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

2. (1) As of December 31, 2021, the Company issued $87,000 thousand of cashier order for payment guaranteed for Microsoft Taiwan Corporation.

3. (2) As of December 31, 2021, the Company issued $50,000 thousand of cashier order for payment guaranteed for Microsoft Regional Sales Corporation.

29.;FOREIGN - CURRENCY- DEMONINATED ASSETS AND LIABILITIES THAT HAVE SIGNIFICANT INFLUENCE

The following information was aggregated by the foreign currencies other than functional currency of the Company. The exchange rates disclosed were used to translate the foreign currencies into the functional currency. The significant assets and liabilities denominated in foreign currencies were as follows:

December 31, 2021

December 31, 2021
Financial assets Monetary items USD Financial liabilities Monetary items USD December 31, 2020 Financial assets Monetary items USD Financial liabilities Monetary items USD	Foreign Currencies $ 45,791 45,516 Foreign Currencies $ 11,659 41,026	Exchange Rate 27.68 (USD:NTD) 27.68 (USD:NTD) Exchange Rate 28.48 (USD:NTD) 28.48 (USD:NTD)		Carrying Amount
				$ 1,267,495 $ 1,259,883 Carrying Amount
				$ 332,048 $ 1,168,420

The material foreign exchange gains (losses) (realized and unrealized) were as follows:

Foreign Currencies USD	2021	Net Foreign Exchange Gains (Losses) $ 19,254	2020
	Exchange Rate 28.009 (USD:NTD)		Exchange Rate	Net Foreign Exchange Gains (Losses) $ 10,777
			29.549 (USD:NTD)		$ 10,777

• 39 -

30. SEPARATELY DISCLOSED ITEMS

• (1) Significant Transactional Items

• A. Financing provided to others: Table 1.

• B. Endorsements/guarantees provided: None.

• C. Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures): Table 2.

• D. Marketable securities acquired and disposed at costs or prices at least NT$300 million or 20% of the paidin capital: None.

• E. Acquisition of individual real estate at costs of at least NT$300 million or 20% of the paid-in capital: None.

• F. Disposal of individual real estate at prices of at least NT$300 million or 20% of the paid-in capital: None.

• G. Total purchases from or sales to related parties amounting to at least NT$100 million or 20% of the paidin capital: None.

• H. Trade receivable from related parties amounting to at least NT$100 million or 20% of the paid-in capital: None.

• I. Trading in derivative instruments: None.

• (2) Information on investees: Table 3.

• (3) Information on investment in Mainland China：

• A. The name of the investee in mainland China, the main business and products, its issued capital, method of investment, information on inflow or outflow of capital, percentage of ownership, income (losses)of the investee, ending balance, amount received as dividends from the investee, and the limitation on investee: Table 4.

• B. Significant direct or indirect transactions with the investee, its price and terms of payment, unrealized gain or loss, and other related information which is helpful to understand the impact of investment in mainland China on financial reports: None.

  • a. The amount and percentage of purchases and the balance and percentage of the related payables at the end of the period.

  • b. The amount and percentage of sales and the balance and percentage of the related receivables at the end of the period.

  • c. The amount of property transactions and the amount of the resultant gains or losses.

  • d. The balance of negotiable instrument endorsements or guarantees or pledges of collateral at the end of the period and the purposes.

  • e. The highest balance, the end of period balance, the interest rate range, and total current period interest with respect to financing of funds.

  • f. Other transactions that have a material effect on the profit or loss for the period or on the financial position, such as the rendering or receiving of services.

• (4) Information on major shareholder：List of all shareholders with ownership of 5 percent or greater showing the names and the number of shares and percentage of ownership held by each shareholder: Table 5.

• 40 -

ZERO ONE TECHNOLOGY CO., LTD. FINANCING PROVIDED TO OTHERS

FOR THE YEARS ENDED DECEMBER 31, 2021

Table 1

(In Thousands of New Taiwan Dollars)

No. (Note 1)	Lender	Borrower	Financial Statement Account	Related Party	Maximum Balance for the Period (Note 2)	Ending Balance	Amount Actually Drawn	Interest Rate (%)	Nature for Financing (Note 3)	Transaction Amount	Reasons for Short-term Financing	Allowance for Bad Debt	Collateral	Collateral	Financing Limit for Each Borrower (Note 4)	Aggregate Financing Limit (Note 5)	Note
													Item	Value
0 0	ZOTC ZOTC	Zerone Win Investment Co., Ltd. WingWill International Co., Ltd.	Other receivables from related parties Other receivables from related parties	Yes Yes	$ 50,000 20,000	$ 50,000 20,000	$ - 5,000	3% 3%	2 2	$ - -	Operating Capital Operating Capital	$ - -	－ －	$ - $ -	$ 390,819 390,819	$ 781,639 781,639

Note 1：The number column is organized as follows：

• (1) Number 0 represents the issuer.

• (2) The Counter-party is numbered from 1 in order.

Note 2：Maximum Balance of financing provided to others for the period.

Note 3：Reference for the nature for financing provided to others.

• (1) 1:The borrower has business contact with the creditor.

• (2) 2:The borrower has short-term financing necessities.

Note 4：For short-term financing necessities, the total amount available for lending purpose shall not exceed 10% of the net worth reviewed or audited by CPA during the period.

Note 5：The total amount available for lending purpose shall not exceed 20% of the company’s net worth reviewed or audited by CPA during the period.

• 41 -

ZERO ONE TECHNOLOGY CO., LTD.

MARKETABLE SECURITIES HELD

FOR THE YEAR ENDED DECEMBER 31, 2021

Table 2

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Holding Company	Marketable Securities Type and Issuer’s Name （Note 1）	Security Issuer’s Relationship with the Holding Company	Financial Statement Account		December 31, 2021	December 31, 2021		Note
				Shares/Units	Carrying Values	Percentage of Ownership (%)	Market Prices/ Net value of equities
ZOTC	Beneficiary certificates Taishin 1699 Money Market Fund Taishin Ta-Chong Money Market Fund FSITC Taiwan Money Market KGI Kaefer Fund KGI Taiwan Multi-Asset Income Fund KGI Taiwan Select-Asset Income Fund Corporate bond M.J. International Co. Ltd.－1st convertible bonds Chailease Holding Company Limited－1st convertible bonds Perusahaan Listrik Negara corporate bond (USD) Stock Fubon Financial Holding Co., Ltd. Cathay Financial Holdings Preferred Shares A Union Bank of Taiwan Preferred Shares A K Way Information Corp. China Electric Mfg. Corp.	－ － － － － － － － － － － － Director of ZOTC －	Financial assets at FVTPL － current Financial assets at FVTPL － current Financial assets at FVTPL － current Financial assets at FVTPL－non- current Financial assets at FVTPL－non- current Financial assets at FVTPL－non- current Financial assets at FVTPL － current Financial assets at FVTPL － current Financial assets at amortized cost －non-current Financial assets at FVTPL － current Financial assets at FVTPL－non- current Financial assets at FVTPL－non- current Financial assets at FVTOCI－non- current Financial assets at FVTOCI－non- current	7,310,743 6,968,447 6,463,581 170,199 1,198,020 500,325 20（Units） 250（Units） 5（Units） 15,248 166,000 80,000 655,000 2,689,200	$ 100,001 100,000 100,000 3,669 13,598 5,898 2,070 27,975 15,441 1,163 10,441 4,240 17,980 59,297	- - - - - - - - - - - - 2.14 0.83	$ 100,001 100,000 100,000 3,669 13,598 5,898 2,070 27,975 15,585 1,163 10,441 4,240 17,980 59,297

（ Continued ）

• 42 -

Holding Company	Marketable Securities Type and Issuer’s Name （Note 1）	Security Issuer’s Relationship with the Holding Company	Financial Statement Account		December 31, 2021	December 31, 2021		Note
				Shares/Units	Carrying Values	Percentage of Ownership (%)	Market Prices/ Net value of equities
ZOTC Zerone Win Investment Co.	Unex Technology Corp. Da-Chang Start-Up Investment Co. Ltd Cathay Financial Holdings Preferred Shares A Union Bank of Taiwan Preferred Shares A Fubon Financial Holding Co., Ltd. Preferred Shares B Taishin Financial Holding Co., Ltd. Preferred Shares E CTBC Financial Holding Co., Ltd. Preferred Shares B Cathay Financial Holding Co., Ltd. Preferred Shares B Kwong Lung Enterprise Co., Ltd. Preferred Shares A WPG Holdings Limited Preferred Shares A United Orthopedic Corporation Preferred Shares A QST International Corporation Preferred Shares A Miiicasa Holdings (Cayman) Inc. Duofu Co., Ltd. Jotangi Technology Co., Ltd. Stock WPG Holdings Limited Preferred Stock A Shin Kong Financial Holding Co., Ltd. Preferred Stock A Tatung System Technologies Inc.	－ － － － － － － － － － － － － － － － －	Financial assets at FVTOCI－non- current Financial assets at FVTOCI－non- current Financial assets at FVTOCI－non- current Financial assets at FVTOCI－non- current Financial assets at FVTOCI－non- current Financial assets at FVTOCI－non- current Financial assets at FVTOCI－non- current Financial assets at FVTOCI－non- current Financial assets at FVTOCI－non- current Financial assets at FVTOCI－non- current Financial assets at FVTOCI－non- current Financial assets at FVTOCI－non- current Financial assets at FVTOCI－non- current Financial assets at FVTOCI－non- current Financial assets at FVTOCI－non- current Financial assets at FVTOCI－non- current Financial assets at FVTOCI－non- current Financial assets at FVTOCI－non- current	175,000 3,000,000 134,000 70,000 400,000 240,000 90,000 230,000 270,000 700,000 200,000 70,000 2,500,000 10,000 796,250 240,000 50,000 1,500,000	$ 2,404 29,949 8,429 3,710 25,240 12,744 5,778 14,605 13,378 34,685 9,230 3,146 - - - 11,892 2,130 59,925	1.68 2.73 - - - - - - - - - - 3.45 0.22 9.32 - - 1.69	$ 2,404 29,949 8,429 3,710 25,240 12,744 5,778 14,605 13,378 34,685 9,230 3,146 - - - 11,892 2,130 59,925

（ Continued ）

• 43 -

Holding Company	Marketable Securities Type and Issuer’s Name （Note 1）	Security Issuer’s Relationship with the Holding Company	Financial Statement Account	December	31,	31,	2021	Note
				Shares/Units	Carrying Values	Percentage of Ownership (%)	Market Prices/ Net value of equities
Zerone Win Investment Co. PetaCom Technology Co. Ltd. Zotech Co. Ltd.	LEO Systems, Inc. GrandTech C.G. Systems Inc. InfinitiesSoft Solutions Inc. FiduciaEdge Technologies Co., Ltd. Beneficiary certificates Taishin 1699 Money Market Fund Stock WPG Holdings Limited Preferred Shares A	－ － － － － －	Financial assets at FVTOCI－non- current Financial assets at FVTOCI－non- current Financial assets at FVTOCI－non- current Financial assets at FVTOCI－non- current Financial assets at FVTPL － current Financial assets at FVTOCI－non- current	20,000 70,000 1,714,286 500,000 1,110,000 200,000	509 3,486 28,800 7,500 15,183 9,910	0.02 0.12 15.00 4.09 - -	509 3,486 28,800 7,500 15,183 9,910

Note 1：Securities, indicated by the above table, are derivative from stock, bonds, beneficiary certificates, and the above items, based on IFRS 9 “Financial Instruments”.

Note 2：Relevant information about Investments in equity of subsidiaries, associates, see Table 3 & Table 4.

（ Concluded ）

• 44 -

ZERO ONE TECHNOLOGY CO., LTD.

INFORMATION ON INVESTEES

FOR THE YEAR ENDED DECEMBER 31, 2021

Table 3

(In Thousands of New Taiwan Dollars)

Investor Company	Investee Company	Location	Main Businesses	Investment Amount	Investment Amount	As of December 31, 2021	As of December 31, 2021	As of December 31, 2021	Net Income (Loss) of the Investee	Share of Profits/Losses of Investee	Note
				December 31, 2021	December 31, 2020	Number of Ownership	Percentage of Ownership	Carrying Values
ZOTC Zerone Win Investment Co., Ltd.	Zotech Co., Ltd. Zerone Win Investment Co., Ltd. Asiaone Holdings Ltd. WingWill International Co., Ltd. Petacom Technology Co., Ltd. DigiCosmos Tech. Co., Ltd. TrustOne Security Inc. Leukocyte-Lab Co. Ltd.	Taiwan Taiwan Republic of Seychelles Taiwan Taiwan Taiwan Taiwan Taiwan	Manufacturing for computer equipment Investment Holding company Services of cloud information software Services of information product agent Consulting service for information security R&D, sale and service of information software IT Security Mgt& R&D, sales & consulting service etc.	$ 35,000 300,000 10,063 25,500 50,000 25,000 4,000 11,500	$ 35,000 149,000 10,063 25,500 50,000 - - -	3,500,000 30,000,000 320,000 8,793,103 50,000,000 2,500,000 4,000,000 240,000	85.37 100.00 100.00 87.93 100.00 50.00 32.00 37.50	$ 37,348 331,797 11,696 ( 2,722 ) 52,754 24,882 1,397 10,144	( $ 6,667 ) ( 5,145 ) 2,238 ( 9,897 ) 5,202 ( 236 ) ( 8,136 ) ( 11,353 )	( $ 5,691 ) ( 5,145 ) 2,238 ( 8,703 ) 5,202 ( 186 ) ( 2,603 ) ( 1,356 )	Subsidiary Subsidiary Subsidiary Sub-subsidiary Sub-subsidiary Sub-subsidiary Associates Associates

Note: Please refer to Table 4 for Information on investment in Mainland China.

• 45 -

ZERO ONE TECHNOLOGY CO., LTD.

INFORMATION ON INVESTMENTS IN MAINLAND CHINA

FOR THE YEAR ENDED DECEMBER 31, 2021

Table 4												(In Thousands of New Taiwan Dollars/Foreign Currency)	(In Thousands of New Taiwan Dollars/Foreign Currency)	(In Thousands of New Taiwan Dollars/Foreign Currency)	(In Thousands of New Taiwan Dollars/Foreign Currency)
Investee Company	Main Businesses and Products	Paid-in Capital		Method of Investment	Accumulated Outward Remittance for Investment from Taiwan as of January 1, 2021		Remittance of Funds		Accumulated Outward Remittance for Investment from Taiwan as of December 31, 2021	Net Income (Loss) of the Investee	% Ownership of Direct or Indirect Investment	Investment Gain (Loss) (Note 2)	Carrying Amount as of 31 December, 2021	Accumulated Repatriation of Investment Income as of 31 December, 2021	Note
							Outward	Inward
Techone (Shanghai) Co., Ltd.	Technical service of network technology	$ 13,132 ( RMB 3,000 )		(Note 1)	$ 9,118		$ -	$ -	$ 9,118	$ 3,278	70%	$ 2,295	$ 11,391	$ -	－
Accumulated Outward Remittance for Investments in Mainland China as of December 31, 2021			Investment Amount Authorized by the Investment Commission, MOEA			Upper Limit on the Amount of Investments Stipulated by the Investment Commission, MOEA (Note 3)
$ 9,118			$ 9,118			$ 2,344,916

Note 1 ： The company directly holds 100% of a subsidiary-Asiaone Holdings Ltd., which reinvests the company in Mainland China.

Note 2 ： Amount was recognized based on the financial statements which were audited by CPAs on December 31, 2021.

Note 3 ： Determined by sixty percent (60%) of the Company’s consolidated net worth, audited by CPAs on December 31, 2021 (3,908,193×60% ＝ 2,344,916).

Note 4 ： For foreign currency conversion, gain (loss) are converted by the average exchange rate in 2021. Other amounts are converted into New Taiwan Dollars by the exchange rate on December 31, 2021.

• 46 -

ZERO ONE TECHNOLOGY CO., LTD. INFORMATION ON MAJOR SHAREHOLDERS

DECEMBER 31, 2021

Table 5

Shareholders	Shares	Shares
	Total Shares Owned (In Thousands)	Ownership Percentage
Ceres Investment Co., Ltd. Ceres Capital Co., Ltd.	10,021,843 9,500,000	6.59% 6.25%

• Note ： This table presents information provided by the Taiwan Depository & Clearing Corporation on stockholders holding greater than 5% of the Company’s ordinary and preference shares including treasury stock in dematerialized form that have completed the process of registration and delivery by book-entry transfer as of the last business day for the current quarter. The share capital recorded, and the actual registered non-physical shares in this parent company only financial statements may differ due to different basis of preparation.

• 47 -

§THE CONTENTS OF STATEMENTS OF MAJOR ACCOUNTING ITEMS§

ITEMS NO. ／ INDEX MAJOR ACCOUNTING ITEMS IN ASSETS, LIABILITIES AND EQUITY STATEMENT OF CASH AND CASH EQUIVALENTS Statement 1 STATEMENT OF FINANCIAL ASSETS AT FVTPL － CURRENT Statement 2 STATEMENT OF FINANCIAL ASSETS AT － AMORTIZED COST CURRENT Note 9 STATEMENT OF NOTES RECEIVABLE Statement 3 STATEMENT OF TRADE RECEIVABLE Statement 4 STATEMENT OF INVENTORIES Statement 5 STATEMENT OF FINANCIAL ASSETS AT FVTPL － NON-CURRENT Statement 6 STATEMENT OF FINANCIAL ASSETS AT － FVTOCI NON-CURRENT Statement 7 STATEMENT OF FINANCIAL ASSETS AT － AMORTIZED COST NON-CURRENT Note 9 STATEMENT OF CHANGES IN INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD Statement 8 STATEMENT OF CHANGES IN PROPERTY, PLANT AND EQUIPMENT Note 14 STATEMENT OF CHANGES IN ACCUMULATED DEPRECIATION OF PROPERTY, PLANT AND EQUIPMENT Note 14 STATEMENT OF DEFERRED INCOME TAX ASSETS Note 21 STATEMENT OF TRADE PAYABLES Statement 9 STATEMENT OF OTHER PAYABLES Note 16 STATEMENT OF OTHER CURRENT LIABILITIES Statement 10 MAJOR ACCOUNTING ITEMS IN PROFIT OR LOSS STATEMENT OF OPERATING REVENUE Statement 11 STATEMENT OF OPERATING COST Statement 12 STATEMENT OF OPERATING EXPENSES Statement 13 STATEMENT OF EMPLOYEE BENEFITS, DEPRECIATION, DEPLETION AND AMORTIZATION BY FUNCTION Statement 14

• 48 -

ZERO ONE TECHNOLOGY CO., LTD.

STATEMENT OF CASH AND CASH EQUIVALENTS DECEMBER 31, 2021

STATEMENT 1 Item Cash on hand and revolving funds Demand deposits Repurchase agreements collateralized by bonds	(In Thousands of New Taiwan Dollars) Description Amount $ 152 New Taiwan dollar 586,142 USD 2,129 thousand＠27.68; EUR 5 thousand＠31.32 59,085 USD 5,000 thousand@ 27.68; annual interest rate at 0.30%~0.39%; Expired by 2022.02.18 138,400 $ 783,779

• 49 -

ZERO ONE TECHNOLOGY CO., LTD.

－ STATEMENT OF FINANCIAL ASSETS AT FVTPL CURRENT

DECEMBER 31, 2021

Statement 2

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Name of financial instruments Taishin 1699 Money Market Fund Taishin Ta-Chong Money Market Fund FSITC Taiwan Money Market M.J. International Co. Ltd.－1st convertible bonds Chailease Holding Company Limited－ 1stconvertible bonds Fubon Financial Holding Co., Ltd. Add (Less)：Valuation adjustment	Description Fund beneficiary certificates Fund beneficiary certificates Fund beneficiary certificates Convertible bond Convertible bond Stock	Units 7,310,743 6,968,447 6,463,581 20 (Units) 250 (Units) 15,248	Par value (Dollars) 10 10 10 100,000 100,000 10	Total $ 73,107 69,684 64,636 2,000 25,000 152	Acquisition Cost $ 100,000 100,000 100,000 2,026 25,250 898 328,174 3,035 $ 331,209	Fair value	Fair value
						Units (Dollars) 13.6786 14.3504 15.4713 103.5 111.9 76.3		Total
								$ 100,001 100,000 100,000 2,070 27,975 1,163 $ 331,209

• 50 -

ZERO ONE TECHNOLOGY CO., LTD.

STATEMENT OF NOTES RECEIVABLE

DECEMBER 31, 2021

Statement 3 (In Thousands of New Taiwan Dollars)

The firm name Non-related parties Stark Technology Inc. Apex Fong Yi Technology Co., Ltd. Genesis Technology, Inc. Openpower Information Co., Ltd. Others (Note) Less: Allowances for impairment loss	Description Payment for goods Payment for goods Payment for goods Payment for goods Payment for goods		Amount
			$ 115,189 29,376 26,562 18,076 99,507 288,710 - $ 288,710

Note ： The amount of individual company included in others does not exceed 5% of the account balance.

• 51 -

ZERO ONE TECHNOLOGY CO., LTD. STATEMENT OF TRADE RECEIVABLE

DECEMBER 31, 2021

Statement 4 (In Thousands of New Taiwan Dollars)

The Company’s name Kinmax Technology Inc. MiTAC Information Technology Corp. Genesis Technology, Inc. Systex Corporation Others (Note) Less: Allowances for impairment loss Total	Description Payment for goods Payment for goods Payment for goods Payment for goods Payment for goods		Amount
			$ 376,445 159,431 158,746 129,521 1,719,309 2,543,452 4,751 $ 2,538,701

Note ： The amount of individual company included in others does not exceed 5% of the account balance.

• 52 -

ZERO ONE TECHNOLOGY CO., LTD.

STATEMENT OF INVENTORIES

DECEMBER 31, 2021

Statement 5 (In Thousands of New Taiwan Dollars)

Items Commodities		Book value $ 1,620,945	Net	realizable value (Note)
				$ 1,646,762

• Note ： The net realizable value is the estimated selling price of inventories less the estimated costs necessary to make the sale under normal situations.

• 53 -

ZERO ONE TECHNOLOGY CO., LTD.

－ STATEMENT OF FINANCIAL ASSETS AT FVTPL NON-CURRENT

FOR THE YEAR ENDED DECEMBER 31, 2021

Statement 6

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Name KGI Kaefer Fund KGI Taiwan Multi-Asset Income Fund KGI Taiwan Select-Asset Income Fund Cathay Financial Holding Co., Ltd. Preferred Shares A Union Bank of Taiwan Preferred Shares A	Beginning Balance Shares Book value 170,199 $ 3,354 1,198,020 12,459 500,325 5,175 166,000 10,259 80,000 4,144 $ 35,391	Beginning Balance Shares Book value 170,199 $ 3,354 1,198,020 12,459 500,325 5,175 166,000 10,259 80,000 4,144 $ 35,391	Addition Shares Amount - $ - - - - - - - - - $ -	Addition Shares Amount - $ - - - - - - - - - $ -	Decrease Shares Amount - $ - - - - - - - - - $ -	Decrease Shares Amount - $ - - - - - - - - - $ -	Valuation for the current year $ 315 1,139 723 182 96 $ 2,455	Balance, December 31, 2021 Shares Book value 170,199 $ 3,669 1,198,020 13,598 500,325 5,898 166,000 10,441 80,000 4,240 $ 37,846	Balance, December 31, 2021 Shares Book value 170,199 $ 3,669 1,198,020 13,598 500,325 5,898 166,000 10,441 80,000 4,240 $ 37,846	Remark
	Shares 170,199 1,198,020 500,325 166,000 80,000		Shares - - - - -		Shares - - - - -			Shares 170,199 1,198,020 500,325 166,000 80,000

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ZERO ONE TECHNOLOGY CO., LTD.

－ STATEMENT OF FINANCIAL ASSETS AT FVTOCI NON-CURRENT

FOR THE YEAR ENDED DECEMBER 31, 2021

Statement 7

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Name K Way Information Corp. China Electric Mfg. Corp ASIX Electronics Corp. Promaster Technology Corp. Unex Technology Corp. Da-Chang Start-Up Investment Co. Ltd. Cathay Financial Holding Co., Ltd. Preferred Shares A Union Bank of Taiwan Preferred Shares A Fubon Financial Holding Co., Ltd. Preferred Shares B Taishin Financial Holding Co., Ltd. Preferred Shares E CTBC Financial Holding Co., Ltd. Preferred Shares B Cathay Financial Holding Co., Ltd. Preferred Shares B Kwong Lung Enterprise Co., Ltd. Preferred Shares A WPG Holdings Limited Preferred Shares A United Orthopedic Corporation Preferred Shares A QST International Corp. Preferred Shares A Chailease Holding Company Limited Class A Preferred Shares Miiicasa Holdings (Cayman) Inc. DuoFu Co., Ltd Jotangi Technology Co., Ltd.	Beginning Balance Shares Book value 490,000 $ 16,243 2,689,200 37,514 81,066 4,880 1,157,137 12,092 175,000 3,231 1,500,000 14,911 134,000 8,281 70,000 3,626 400,000 25,000 240,000 12,624 90,000 5,706 230,000 14,467 270,000 13,581 700,000 35,070 200,000 9,500 150,000 6,713 300,000 29,880 2,500,000 - 10,000 - 796,250 - $ 253,319	Beginning Balance Shares Book value 490,000 $ 16,243 2,689,200 37,514 81,066 4,880 1,157,137 12,092 175,000 3,231 1,500,000 14,911 134,000 8,281 70,000 3,626 400,000 25,000 240,000 12,624 90,000 5,706 230,000 14,467 270,000 13,581 700,000 35,070 200,000 9,500 150,000 6,713 300,000 29,880 2,500,000 - 10,000 - 796,250 - $ 253,319	Addition Shares Amount 165,000 $ 4,690 - - - - 107,035 - - - 1,500,000 15,000 - - - - - - - - - - - - - - - - - - - - - - - - - - - - $ 19,690	Addition Shares Amount 165,000 $ 4,690 - - - - 107,035 - - - 1,500,000 15,000 - - - - - - - - - - - - - - - - - - - - - - - - - - - - $ 19,690	Decrease Shares Amount - $ - - - 81,066 13,512 1,264,172 22,687 - - - - - - - - - - - - - - - - - - - - - - 80,000 3,686 300,000 30,042 - - - - - - $ 69,927	Decrease Shares Amount - $ - - - 81,066 13,512 1,264,172 22,687 - - - - - - - - - - - - - - - - - - - - - - 80,000 3,686 300,000 30,042 - - - - - - $ 69,927	Valuation for the current year ( $ 2,953 ) 21,783 8,632 10,595 ( 827 ) 38 148 84 240 120 72 138 ( 203 ) ( 385 ) ( 270 ) 119 162 - - - $ 37,493	Ending Balance Shares Book value 655,000 $ 17,980 2,689,200 59,297 - - - - 175,000 2,404 3,000,000 29,949 134,000 8,429 70,000 3,710 400,000 25,240 240,000 12,744 90,000 5,778 230,000 14,605 270,000 13,378 700,000 34,685 200,000 9,230 70,000 3,146 - - 2,500,000 - 10,000 - 796,250 - $ 240,575	Ending Balance Shares Book value 655,000 $ 17,980 2,689,200 59,297 - - - - 175,000 2,404 3,000,000 29,949 134,000 8,429 70,000 3,710 400,000 25,240 240,000 12,744 90,000 5,778 230,000 14,605 270,000 13,378 700,000 34,685 200,000 9,230 70,000 3,146 - - 2,500,000 - 10,000 - 796,250 - $ 240,575	Remark
	Shares 490,000 2,689,200 81,066 1,157,137 175,000 1,500,000 134,000 70,000 400,000 240,000 90,000 230,000 270,000 700,000 200,000 150,000 300,000 2,500,000 10,000 796,250		Shares 165,000 - - 107,035 - 1,500,000 - - - - - - - - - - - - - -		Shares - - 81,066 1,264,172 - - - - - - - - - - - 80,000 300,000 - - -			Shares 655,000 2,689,200 - - 175,000 3,000,000 134,000 70,000 400,000 240,000 90,000 230,000 270,000 700,000 200,000 70,000 - 2,500,000 10,000 796,250

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ZERO ONE TECHNOLOGY CO., LTD.

STATEMENT OF CHANGES IN INVESTMENTSACCOUNTED FOR USING THE EQUITY METHOD

FOR THE YEAR ENDED DECEMBER 31, 2021

Statement 8

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Name Zotech Co., Ltd. Zerone Win Investment Co., Ltd. Asiaone Holdings Ltd.	Beginning Balance Shares Amount 3,500,000 $ 43,132 14,900,000 154,088 320,000 9,526 $ 206,746	Beginning Balance Shares Amount 3,500,000 $ 43,132 14,900,000 154,088 320,000 9,526 $ 206,746	Addition Shares Amount - $ - 15,100,000 151,000 - - $ 151,000	Addition Shares Amount - $ - 15,100,000 151,000 - - $ 151,000	Decrease Shares Amount - $ - - - - - $ -	Decrease Shares Amount - $ - - - - - $ -	Increase (Decrease) in Using the Equity Method (Note 1) ( $ 5,784 ) 26,709 2,170 $ 23,095		Ending Balance		Amount $ 37,348 331,797 11,696 $ 380,841	Net value of equity $ 37,348 331,797 11,696	Collateral/Pledge
	Shares 3,500,000 14,900,000 320,000		Shares - 15,100,000 -		Shares - - -			Shares 3,500,000 30,000,000 320,000	Percentage of ownership％ 85.37 100 100
													None None None

Note 1 ： Including

1. Share of profit or loss of subsidiaries accounted for using the equity method ( $ 8,598 )

2. The difference between the consideration 68 received or paid and the carrying amount of the subsidiaries’ net assets during actual disposal or acquisition

3. Share of other comprehensive income (loss) of subsidiaries accounted for using equity method. 31,693

4. Exchange differences on translation of the financial statements of foreign operations ( 68 ) $ 23,095

5. 56 -

ZERO ONE TECHNOLOGY CO., LTD.

STATEMENT OF TRADE PAYABLES

DECEMBER 31, 2021

Statement 9	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)
The Company’s name		Amount
CISCO SYSTEMS INTERNATIONAL	B.V.	$ 649,838
Trend Micro Inc.		313,240
Others (Note)		2,010,355
		$ 2,973,433

Note ： The amount of individual company included in others does not exceed 5% of the account balance.

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ZERO ONE TECHNOLOGY CO., LTD.

STATEMENT OF OTHER CURRENT LIABILITIES

DECEMBER 31, 2021

Statement 10	(In Thousands of New Taiwan Dollars)
Items	Amount
Receipts under custody	$ 234,482
Contract liability—current	45,161
Temporary receipts	30,213
	$ 309,856

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ZERO ONE TECHNOLOGY CO., LTD.

STATEMENT OF OPERATING REVENUE

FOR THE YEAR ENDED DECEMBER 31, 2021

Statement 11 (In Thousands of New Taiwan Dollars)

Items Sales revenue Service revenue Less: sales returns Less:sales discounts	Description Selling hardware and software suite		Amount
			$ 12,577,640 68,047 12,645,687 6,402 9,211 $ 12,630,074

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ZERO ONE TECHNOLOGY CO., LTD. STATEMENT OF OPERATING COST

FOR THE YEAR ENDED DECEMBER 31, 2021

Statement 12 (In Thousands of New Taiwan Dollars)

Items Costs of goods sold Inventory, beginning of year Add：Purchases Inventory, ending of year Others Total costs of sales and purchases Write-down of inventories Losses on scrap of inventories	Amount
	$ 1,358,455 11,908,427 ( 1,782,512 ) ( 112,807) 11,371,563 26,162 6,289 $ 11,404,014

Note ： The above statement indicates that the amount of all items regarding inventories is recognized by original costs of inventories, with no deduction of allowance for inventory valuation losses.

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ZERO ONE TECHNOLOGY CO., LTD.

STATEMENT OF OPERATING EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 2021

Statement 13

(In Thousands of New Taiwan Dollars)

Items Payroll Expenses Entertainment expense Insurance expense Depreciation expense Reversal of expected credit losses Others (Note)	Selling and marketing expenses $ 291,398 43,690 32,513 9,976 - 73,670 $ 451,247	General and administrative expenses $ 92,938 790 8,347 12,090 - 28,041 $ 142,206	Research & Development Expenses $ 3,652 - 223 - - 144 $ 4,019	Reversal of expected credit losses $ - - - - ( 6,681 ) - ($ 6,681)	Total
					$ 387,988 44,480 41,083 22,066 ( 6,681 ) 101,855 $ 590,791

Note ： The amount of each item in others does not exceed 5% of the account balance.

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ZERO ONE TECHNOLOGY CO., LTD.

STATEMENT OF EMPLOYEE BENEFIT, DEPRECIATION AND AMORTIZATION BY FUNCTION FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

Statement 14

(In Thousands of New Taiwan Dollars)

Employee benefit expenses (Note) Salary and bonus Labor and health insurance Pension Directors’ compensation Others Depreciation Amortization		2021		Total $ 362,756 23,682 10,749 14,483 20,504 $ 432,174 $ 22,066 $ 1,068		2020
	Classified as Operating Cost $ - - - - - $ - $ - $ -	Classified as Operating Expenses $ 362,756 23,682 10,749 14,483 20,504 $ 432,174 $ 22,066 $ 1,068			Classified as Operating Cost $ - - - - - $ - $ - $ -	Classified as Operating Expenses $ 291,972 19,701 9,872 10,715 18,156 $ 350,416 $ 20,255 $ 778		Total
								$ 291,972 19,701 9,872 10,715 18,156 $ 350,416 $ 20,255 $ 778

• Note 1: As of December 31, 2021 and 2020, the Company had 291 and 267 employees, respectively, and there were 6 non-employee directors for both years. The calculation basis is consistent to employee benefit expenses.

• Note 2: (1) Average employee benefit expenses for 2021 and 2020 were $1,466 thousand and $1,302 thousand, respectively.

• (2) Average salary and bonus for 2021 and 2020 were $1,273 thousand and $1,119 thousand, respectively.

• (3) The change in the average salary and bonus is 13.76%.

• Note 3: In accordance with Securities and Exchange Act, the Company set up the Audit Committee to replace supervisors on June 10, 2020. The compensation for supervisors in 2020 was $1,116 thousand.

• Note 4: The Company’s compensation policies (including directors, supervisors, mana gers and employees) are as follows:

• (1) Directors and supervisors: Accordingly to Article 19 of the Company’s Articles of Incorporation, the compensation for directo rs and supervisors shall be no more than 3% of annual profits. The Company allocates 2% of the current year ’s annual profits for the compensation to directors and supervisors, and will provide reasonable reward by taking into account of the Company’s operating results and the contrib ution they made.

• 62 -

The procedures to determine the compensation is ba sed on the Company’s “Rules for Distribution of Compensation to Directors and Supervisors.” Apart from referencing the company’s overall operational efficiencies, future management risk and developing trend of the ind ustry, the personal efficiency achievement rate, contribution to the overall performance, and devotion to company performance, achievement rate, profitability rate, operational efficiency and contribution are also collectively evaluated before calculating the compensation ratio. Relevant performance appraisals and the soundness of the compensation are reviewed and approved by the Remuneration Committee and the Board in accordance with the charter of relevant laws and requirements, so as to achieve the balance of the Company’s sustainability and risk management.

• (2) Managers: Based on the Company’s compensation policy to managers, criteria such as industry standards and personal performanc e evaluation items, which include financial indicators (such as the Company’s revenue, achievement rate for profi t before tax and after tax) and non-financial related indicators (such as taking on the role as trainer and any gross misconduct of the department in terms of legal and co mpliance and operational risks incidents) are also included in the evaluation. The pr ocedures to determine and distribute the compensation is based on the Company’s performance appraisal evaluation guidelines. Relevant performance appraisals and the soundness of the compensation are reviewed and approved by the Remuneration Committee and the Board in accordance with the charter of relevant laws and requirements, so as to achieve the balance of the Company’s sustainability and risk management.

• (3) Employees: The Company conducts annual market survey regularly by analyzing salary, bonus and annua l income statistics. Salary adjustment is processed based on Company’s work rules and the results of individual performance appraisals so as to ensure the fairness of internal and external practices which meets the market standards.

• 63 -