ZERO ONE - Audit Report / Information 2022

Code ： 3029

ZERO ONE TECHNOLOGY CO., LTD. PARENT COMPANY ONLY FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 AND

INDEPENDENT AUDITORS’ REPORT

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

§TABLE OF CONTENTS§

Contents 1`、`Cover 2`、`Table of Contents 3`、`Independent Auditors’ Audit 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`～`38 38`～`39 40 40 - - 40 41`～`46 41`、`47 41`、`48 41 49`～`64	Financial Report’s Note No. - - - - - - - 1 2 3 4 5 6`～`25 26 27 28 - - 29 30 30 30 30 -

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, 2022 and 2021, 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, 2022 and 2021, and its parent company only financial performance and its parent company only cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and the Standards on Auditing of the Republic of China. Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Parent Company Only Financial Statements section of our report. We 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, 2022. 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, 2022 are stated as follows:

Authenticity of the Occurrence of Operating Income

The operating income of Zero One Technology Co., Ltd. mainly comes from the sales of enterprise computer software and hardware. Considering that there may be greater risks of fraud in income recognition and that the management could be under pressure to meet expected financial goals; therefore, we consider such revenue of significant growth rates and those from clients with substantial operating income a key audit matter.

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

Conduct tests of controls to understand the Group’s revenue recognition process and the design and implementation of related controls.
Obtain the detailed accounts of these incomes, select samples to perform tests of details, and review documents such as purchase orders, delivery orders, and invoices to confirm the authenticity of these incomes.
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Obtain the detailed accounts of these incomes, and select samples to test whether there is an anomaly 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 Standards on Auditing of the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these parent company only financial statements.

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

;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.
;Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.
;Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors' report to the related disclosures in the 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.
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.
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;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, 2022 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 21, 2023

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.

ZERO ONE TECHNOLOGY CO., LTD.

PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31, 2022 AND 2021

(In Thousands of New Taiwan Dollars)

December 31, 2022 Amount % $ 801,767 10 996,422 13 2,790 - 146,570 2 319,273 4 2,489,921 31 1,945,996 25 29,818 - 6,732,557 85 35,146 - 218,861 3 129,849 2 382,156 5 310,439 4 18,220 - 4,198 - 47,114 1 3,316 - 1,149,299 15 $ 7,881,856 100 $ 3,300,605 42 233,505 3 93,531 1 9,941 - 269,036 4 3,906,618 50 4,241 - 8,614 - 13,288 - 800 - 26,943 - 3,933,561 50 1,530,317 19 1,240,628 16 322,518 4 828,494 11 1,151,012 15 26,338 - 3,948,295 50 $ 7,881,856 100	December 31, 2021	December 31, 2021
Amount $ 801,767 996,422 2,790 146,570 319,273 2,489,921 1,945,996 29,818 6,732,557 35,146 218,861 129,849 382,156 310,439 18,220 4,198 47,114 3,316 1,149,299 $ 7,881,856 $ 3,300,605 233,505 93,531 9,941 269,036 3,906,618 4,241 8,614 13,288 800 26,943 3,933,561 1,530,317 1,240,628 322,518 828,494 1,151,012 26,338 3,948,295 $ 7,881,856	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	%
		10 4 - 12 4 34 21 1
		86
		- 3 1 5 4 - - 1 -
		14
		100
		39 4 1 - 4
		48
		- - - -
		-
		48
		20
		16
		4 11
		15
		1
		52
		100

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

ZERO ONE TECHNOLOGY CO., LTD.

PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (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 Expected credit impairment loss (gain) (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		2022	% 100 89 11 5 1 - - 6 5 - - 1 - - - 1		2021
						%
						100 90 10 4 1 - - 5 5 - - - - - - -

(Continued)

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 (loss) 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 (loss) 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) Basic Diluted		2022	% 6 1 5 - - - - - - 5		2021
						%
						5 1 4 - 1 - - - 1 5

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

ZERO ONE TECHNOLOGY CO., LTD.

PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

BALANCE, JANUARY 1, 2021 Appropriation of the 2020earnings 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 Appropriation of the 2021 earnings Legal reserve Cash dividends – NT $3.6 per share Net profit for the year ended December 31, 2022 Other comprehensive income (loss) for the year ended December 31, 2022 Total comprehensive income (loss) for the year ended December 31, 2022 Changes in equity of associates accounted for using equity method Changes in percentage of ownership interests in subsidiaries Share based payment transaction – employee restricted shares Share based payment transaction – employee stock options Issuance of ordinary shares under employee stock options Disposals of investments in equity instruments at fair value through other comprehensive income BALANCE, DECEMBER 31, 2022	Share Capital Shares (In Thousand) Issued Capital 125,640 $ 1,256,402 - - - - - - - - - - 25,000 250,000 - - - - - - ( 15 ) ( 150 ) 1,346 13,455 - - 151,971 1,519,707 - - - - - - - - - - - - - - - - - - 1,061 10,610 - - 153,032 $ 1,530,317	Capital Surplus $ 478,757 - - - - - 747,430 68 - 1,518 150 6,402 - 1,234,325 - - - - - 1,027 - - 823 4,453 - $ 1,240,628	Retained Earnings	Total $ 887,761 - 377,836 ) 537,359 179 537,538 - - - - - - 48,016 1,095,479 - 547,962 ) 613,580 3,321 616,901 - 439 ) - - - 12,967 ) $ 1,151,012	Other Equity	Other Equity	Total $ 34,350 - - ( - 69,118 69,118 - - 3,230 - - - 48,016 ) 58,682 - - ( - 46,888 ) ( 46,888 ) - - ( 1,577 - - 12,967 $ 26,338	Total Equity $ 2,657,270 - 377,836 ) 537,359 69,297 606,656 997,430 68 3,230 1,518 - 19,857 - 3,908,193 - 547,962 ) 613,580 43,567 ) 570,013 1,027 439 ) 1,577 823 15,063 - $ 3,948,295
					Exchange Differences on Translation of the Financial Statements of Foreign Operations Unrealized Gain (Loss) on Financial Assets at Fair Value Comprehensive Income $ 74 $ 39,577 ( - - - - - - ( 68 ) 69,186 ( 68 ) 69,186 - - - - - - - - - - - - - ( 48,016) 6 60,747 ( - - - - - - 161 ( 47,049) 161 ( 47,049) - - - - - - - - - - - 12,967 $ 167 $ 26,665 (	Unearned Employee Benefits $ 5,301 ) - - - - - - - 3,230 - - - - ( 2,071 ) - - - - ( - ( - - 1,577 - - - $ 494 )
			Unappropriated Legal Reserve Earnings $ 219,863 $ 667,898 44,100 ( 44,100 ) - ( 377,836 ) ( - 537,359 - 179 - 537,538 - - - - - - - - - - - - - 48,016 263,963 831,516 58,555 ( 58,555 ) - ( 547,962 ) ( - 613,580 - 3,321 - 616,901 - - - ( 439 ) ( - - - - - - - ( 12,967 ) ( $ 322,518 $ 828,494

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

ZERO ONE TECHNOLOGY CO., LTD.

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax Adjustments for: Depreciation expenses Amortization expenses Expected credit impairment loss (gain) Net loss (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 (gain) loss of subsidiaries accounted for using the equity method Write-down of inventories Gain on lease modification Net (gain) 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 (used in) generated from operating activities	2022 $ 756,683 26,739 1,177 12,543 338 1,059 - ( 22,834 ) ( 8,433 ) 2,400 ( 16,385 ) 37,613 ( 1 ) ( 51,720 ) ( 662,851 ) ( 30,563 ) 35,660 ( 371,723 ) 1,607 341,068 ( 23,092 ) ( 40,820 ) ( 1,785) ( 13,320 ) ( 149,342) ( 162,662)	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

(Continued)

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CASH FLOWS FROM INVESTING ACTIVITIES Purchase of financial assets at fair value through other comprehensive income Proceeds from sale of financial assets at fair value through other comprehensive income Purchase of financial assets at amortized cost Disposal of financial assets at amortized cost Acquisition of investments accounted for using the equity method Payments for property, plant and equipment Decrease (increase) in refundable deposits Decrease (increase) decrease in other receivables-related parties Payments for intangible assets Interest received Other dividends received Net cash generated (used in) from investing activities CASH FLOWS FROM FINANCING ACTIVITIES Repayment of principal portion of lease liabilities Dividends paid Proceeds from issuance of shares Exercise of employee stock options Interest paid Net cash (used in) generated from financing activities EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH AND CASH EQUIVALENTS HELD IN FOREIGN CURRENCIES NET INCREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR	2022 ( $ 40,988 ) 28,682 ( 1,261,282 ) 1,931,038 - ( 4,112 ) 3,503 5,000 ( 2,150 ) 21,580 8,433 689,704 ( 9,633 ) ( 547,962 ) - 15,063 ( 1,059) ( 543,591) 34,537 17,988 783,779 $ 801,767	2021
		( $ 19,690 ) 47,240 ( 950,487 ) 308,260 ( 151,000 ) ( 8,112 ) ( 2,538 ) ( 5,000 ) ( 980 ) 5,734 8,468 ( 768,105) ( 7,308 ) ( 377,836 ) 997,430 19,857 ( 2,256) 629,887 ( 3,673) 216,343 567,436 $ 783,779

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

(Concluded)

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ZERO ONE TECHNOLOGY CO., LTD. NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2022 and 2021

(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 (ROC) 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 21, 2023.

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 2023

New / Revised / Amended Standards and Interpretations 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 IASB
	January 1, 2023 (Note 1) January 1, 2023 (Note 2) January 1, 2023 (Note 3)

Note 1: The amendments will be applied prospectively for annual reporting periods beginning on or after January 1, 2023
Note 2: The amendments will be 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 3: Except for deferred taxes that were recognized on January 1, 2022 for temporary differences associated with leases and decommissioning obligations, the amendments were 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 had assessed that the application of above standards and interpretations would not have a material impact on the Company’s financial position and financial performance.

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

Effective Date New / Revised / Amended Standards and Interpretations Announced by the IASB (Note 1) Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets To be determined by IASB between an Investor and its Associate or Joint Venture” Amendments to IFRS 16 “Leases Liability in a Sale and Leaseback” January 1, 2024 (Note 2) IFRS 17 “Insurance Contracts” January 1, 2023 Amendments to IFRS 17 January 1, 2023 Amendments to IFRS 17 “Initial Application of IFRS 17 and IFRS 9 January 1, 2023 - Comparative Information” Amendments to IAS 1 “Classification of Liabilities as Current or January 1, 2024 Non-current” Amendments to IAS 1 “Non-current Liabilities with Covenants” January 1, 2024

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: A seller-lessee shall apply the Amendments to IFRS 16 retrospectively to sale and leaseback transactions entered into after the date of initial application of IFRS 16.

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

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(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.

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.

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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 in 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 the Income Tax Act in the Republic of China.

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 estimates and underlying assumptions are reviewed on an ongoing basis by the management. 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 Cash equivalents Time deposits Repurchase agreements collateralized by bonds	December 31, 2022 $ 121 165,680 214,830 421,136 $ 801,767	December 31, 2021
			$ 152 645,227 - 138,400 $ 783,779

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:	agreements collateralized by bonds were as follows:
7.	December 31, 2022 Demand deposits 0.330%~0.455% Time deposits 4.39%~4.45% Repurchase agreements collateralized by bonds 4.10%~4.30% FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS December 31, 2022 Financial assets`－`current Mandatorily measured at FVTPL Domestic convertible bonds $ 39,885 Domestic listed ordinary shares 5,587 Fund beneficiary certificates 950,950 $ 996,422 Financial assets`－`non-current Mandatorily measured at FVTPL Domestic listed preference shares $ 13,532 Fund beneficiary certificates 21,614 $ 35,146		December 31, 2021
			0.005%~0.25% - 0.30%~0.39% December 31, 2021
		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
				$ 30,045 1,163 300,001 $ 331,209 $ 14,681 23,165 $ 37,846

FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

Investments in equity instruments Current Domestic investment Listed ordinary shares Non-current Domestic investment Listed ordinary shares Listed preference shares Unlisted shares	December 31, 2022 $ 2,790 $ 53,673 133,796 31,392 $ 218,861	December 31, 2021	December 31, 2021
			$ - $ 77,277 130,945 32,353 $ 240,575

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

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 Perusahaan Listrik Negara corporate bond (USD) (4) Southern California Edison corporate bond (USD) (5) British Telecommunications plc corporate bond (USD) (6) TSMC Arizona corporate bond (USD) (7)	December 31, 2022 $ 146,570 - $ 146,570 $ 34,857 32,584 16,664 15,580 30,164 $ 129,849	December 31, 2021	December 31, 2021
			$ 146,570 747,360 $ 893,930 $ 30,523 15,441 - - - $ 45,964

(1) As of December 31, 2022 and 2021 the market interest rate intervals of time deposit over 3 months portion were 0.785%~1.44% and 0.77%~0.815%, 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 Perusahaan Listrik Negara corporate bond (USD) by USD 505 thousand with a coupon rate of 4.875% and USD 559 thousand with a coupon rate of 5.25%, in January 2022 and May 2021, respectively.
(5) The Company purchased Southern California Edison corporate bond (USD) by USD 544 thousand with a coupon rate of 4% in January 2022.
(6) The Company purchased British Telecommunications plc corporate bond (USD) by USD 508 thousand with a coupon rate of 4.25% in February 2022.
(7) The Company purchased TSMC Arizona corporate bond (USD) by USD 982 thousand with a coupon rate of 3.875% in December 2022.
(8) 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 Group 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.
(9) 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 Group sold all bonds by $28,936 thousand, and recognized $444 thousand of gain from sale of financial assets at amortized cost in July, 2021.
(10)The Company purchased AT&T corporate bond (USD) by USD 460 thousand with a coupon rate of 3.65% in March 2021. As for adjustment portion of investments, the Group 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.
(11)Please refer to Note 10 for relevant credit risk management and impairment assessment information for financial assets at amortized cost.
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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.

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, 2022 and 2021.

11. NOTES, TRADE AND OVERDUE 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, 2022		December 31, 2021
	( (	$ 319,273 2,505,906 1,309 15,985 ) 1,309) $ 2,809,194	(	$ 288,710 2,543,452 - 4,751 ) - $ 2,827,411

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, 2022

ember 31, 2022
Gross carrying amount Loss allowance (Lifetime ECLs) Amortized cost		Not Past Due $ 2,778,104 5,109) $ 2,772,995		1-30 Days Past Due $ 11,597 2,332) $ 9,265		31-60 Days Past Due $ 27,523 5,594) $ 21,929		61-90 Days Past Due $ 7,493 2,488) $ 5,005	More Than 90 Days Past Due $ 1,771 ( 1,771) $ -		Total
	(		(		(		(		(	(	$ 2,826,488 17,294) $ 2,809,194

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December 31, 2021

ember 31, 2021
Gross carrying amount Loss allowance (Lifetime ECLs) Amortized cost		Not Past Due $ 2,793,363 435) $ 2,792,928		1-30 Days Past Due $ 19,768 776) $ 18,992		31-60 Days Past Due $ 12,883 1,625) $ 11,258		61-90 Days Past Due $ 5,297 1,064) $ 4,233	More Than 90 Days Past Due $ 851 ( 851) $ -		Total
	(		(		(		(		(	(	$ 2,832,162 4,751) $ 2,827,411

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

Balance at January 1 Add: Net remeasurement of loss allowance Less: Amounts written off Less: Reversal of loss allowance Balance at December 31		2022 $ 4,751 12,543 - - $ 17,294		2021
			( (	$ 12,906 - 1,474 ) 6,681) $ 4,751

12. INVENTORIES

Commodities The nature of the cost of goods sold is as follows: Cost of inventories sold Write-down of inventories		December 31, 2022 $ 1,945,996 2022 $ 10,961,773 37,613 $ 10,999,386		December 31, 2021 $ 1,620,945 2021
				$ 11,377,852 26,162 $ 11,404,014

13. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

Investments in subsidiaries

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.	December 31, 2022 December 31, 2021 $ 44,199 $ 37,348 324,049 331,797 13,908 11,696 $ 382,156 $ 380,841 Percentage ofowners'equity and votingright
	December 31, 2022 85.37% 100.00% 100.00%	December 31, 2021 85.37% 100.00% 100.00%

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14. PROPERTY, PLANT AND EQUIPMENT

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 Cost Balance at January 1, 2022 Additions Disposals Reclassification Balance at December 31, 2022 Accumulated depreciation Balance at January 1, 2022 Disposals Depreciation Balance at December 31, 2022 Carrying amounts at December 31, 2022		Land $ 234,892 - - - $ 234,892 $ - - - $ - $ 234,892 $ 234,892 - - - $ 234,892 $ - - - $ - $ 234,892		Buildings $ 128,185 - - - $ 128,185 $ 73,482 - 1,816 $ 75,298 $ 52,887 $ 128,185 - - - $ 128,185 $ 75,298 - 1,817 $ 77,115 $ 51,070	Machinery and equipment	Office equipment $ 38,963 5,258 ( 639 ) 1,600 $ 45,182 $ 30,734 ( 639 ) 5,919 $ 36,014 $ 9,168 $ 45,182 4,112 ( 651 ) 807 $ 49,450 $ 36,014 ( 651 ) 5,700 $ 41,063 $ 8,387		Delivery equipment $ 2,458 - - - $ 2,458 $ 1,476 - 492 $ 1,968 $ 490 $ 2,458 - - - $ 2,458 $ 1,968 - 490 $ 2,458 $ -		Other equipment $ 18,730 2,854 - 13,400 $ 34,984 $ 10,260 - 6,258 $ 16,518 $ 18,466 $ 34,984 - - 6,718 $ 41,702 $ 16,518 - 9,094 $ 25,612 $ 16,090	Total
					$ 8,040 - ( 1,110 ) - $ 6,930 $ 8,040 ( 1,110 ) - $ 6,930 $ - $ 6,930 - ( 461 ) - $ 6,469 $ 6,930 ( 461 ) - $ 6,469 $ -						$ 431,268 8,112 ( 1,749 ) 15,000 $ 452,631 $ 123,992 ( 1,749 ) 14,485 $ 136,728 $ 315,903 $ 452,631 4,112 ( 1,112 ) 7,525 $ 463,156 $ 136,728 ( 1,112 ) 17,101 $ 152,717 $ 310,439

December 31, 2022 $ 234,892 $ 51,070 $ - $ 8,387 $ - $ 16,090 $ 310,43	December 31, 2022 $ 234,892 $ 51,070 $ - $ 8,387 $ - $ 16,090 $ 310,43
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

Right-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, 2022 $ 18,220 - $ 18,220 2022 $ 16,727 $ 9,565 73 $ 9,638	December 31, 2021
			$ 11,058 143 $ 11,201 2021 $ 12,020 $ 7,380 201 $ 7,581

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(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 Compensation of employees and directors payable Others	December 31, 2022 $ 9,941 $ 8,614 as follows: December 31, 2022 0.75%`～`1.20% - 2022 $ 146 $ 149 ( $ 10,100 ) December 31, 2022 $ 115,468 36,000 82,037 $ 233,505	December 31, 2021
		$ 5,162 $ 6,370 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

16. OTHER PAYABLE

17. RETIREMENT BENEFIT PLANS

(1) Defined contribution plans

The plan under the ROC 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 ROC 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, 2022 $ 60,586 ( 47,298) $ 13,288	December 31, 2021
	(	(	$ 61,127 41,903) $ 19,224

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Movements in net defined benefit liabilities were as follows:

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 gain 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 Balance at January 1, 2022 Interest expense (income) Recognized in profits or losses Remeasurements Return on plan assets (excluding amounts included in interest, net) Actuarial gain arising from changes in financial assumptions Actuarial loss arising from experience adjustments Recognized in other comprehensive income Contribution from employer Balance at December 31, 2022	Present value of defined benefit obligations $ 60,393 159 302 461 - 1,269 ( 631 ) ( 365) 273 - $ 61,127 $ 61,127 382 382 - ( 1,833 ) 910 ( 923) - $ 60,586	( ( ( ( ( ( ( ( ( ( ( ( ( (	Fair value of plan assets $ 39,411) - 201) 201) 497 ) - - - 497) 1,794) $ 41,903 ) $ 41,903 ) 268) 268) 3,228 ) - - 3,228) 1,899) $ 47,298 )	( ( ( ( ( ( ( ( (	Net defined benefit liability/assets $ 20,982 159 101 260 497 ) 1,269 631 ) 365) 224) 1,794) $ 19,224 $ 19,224 114 114 3,228 ) 1,833 ) 910 4,151) 1,899) $ 13,288

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		2022 $ 58 56 $ 114		2021
				$ 146 114 $ 260

Through the defined benefit plans under the ROC 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 ROC 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.
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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	December 31, 2022 1.250% 3.000%	December 31, 2021
		0.625% 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%	December 31, 2022 ( $ 1,151 ) $ 1,186 $ 1,148 ( $ 1,119 )	December 31, 2021	December 31, 2021
	( (	( (	$ 1,252 ) $ 1,294 $ 1,247 $ 1,214 )

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.

Contribution amounts within 1 year Average duration of the defined benefit obligation	December 31, 2022 $ 1,956 7.7 Years	December 31, 2021 $ 1,843 8.3 Years

18. EQUITY

(1) Ordinary Shares

Authorized shares (in thousands) Authorized capital Issued and paid shares (in thousands) Issued capital		December 31, 2022 200,000 $ 2,000,000 153,032 $ 1,530,317		December 31, 2021 200,000 $ 2,000,000 151,971 $ 1,519,707

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.

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(2) Capital Surplus

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 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 Vested employees restricted shares May be used to offset a deficit only Share of changes in equities of associates May not be used for any purpose Employees restricted shares Employees stock options	December 31, 2022 $ 1,164,288 25,343 28,456 68 6,712 1,027 1,714 13,020 $ 1,240,628	December 31, 2021
			$ 1,159,835 25,343 21,459 68 4,621 - 3,805 19,194 $ 1,234,325

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 2021 and 2020 earnings were as follows:

The appropriations of 2021 and 2020 earnings were as follows:
Legal reserve Cash dividends Cash dividends per share ($)		For Fiscal Year 2021 $ 58,555 $ 547,962 $ 3.6		For Fiscal Year 2020
				$ 44,100 $ 377,836 $ 3

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The above appropriations of earnings have been approved by ZOTC’s board of directors on February 23, 2022 and February 24, 2021. The remaining appropriations of earnings were approved by shareholder’s meeting held on May 26, 2022 and August 4, 2021, respectively.

The appropriations of earnings for 2022 have been proposed by ZOTC’s board of directors on February 21, 2023. The appropriations and dividends per share were as follows:

Legal reserve Cash dividends	Appropriation of Earnings $ 60,350 551,080	Dividends Per Share ($)
		$ 3.6

The above appropriation for cash dividends was resolved by ZOTC’s board of directors; the other proposed appropriations are subject to the resolution of the shareholders’ meeting to be held on May 30, 2023.

19. REVENUE

(1) Income from contracts with clients

come from contracts with clients
Sales revenue Service revenue emaining balance of the contracts Notes receivable (Note 11) Trade receivable (Note 11) Contract liability (Other current liabilities)		2022 $ 12,277,629 85,410 $ 12,363,039 December 31, 2022 $ 319,273 $ 2,489,921 $ 26,246		2021
				$ 12,562,027 68,047 $ 12,630,074 December 31, 2021 $ 288,710 $ 2,538,701 $ 45,161

(2) Remaining balance of the contracts

20. NET INCOME

(1) Other Gains and losses

ther Gains and losses
Net foreign exchange gain Net (loss) gain arising on financial assets measured at FVTPL Gain on lease modification epreciation & 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 mployee benefits expense Post-employment benefits Defined contribution plans Defined benefit plans (Note 17)		2022 $ 26,390 338 ) 1 $ 26,053 2022 $ 17,101 9,638 1,177 $ 27,916 $ 26,739 $ 1,177 2022 $ 12,409 114 12,523	2021
	(		$ 19,254 10,050 - $ 29,304 2021
			$ 14,485 7,581 1,068 $ 23,134 $ 22,066 $ 1,068 2021
			$ 10,489 260 10,749

(2) Depreciation & amortization

(3) Employee benefits expense

(Continued)

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Share-based payment Equity-settled (Note 23) Other employee benefits Salaries expense Others Total employee benefits expense Employee benefits expense summarized by function Operating expenses		2022 2,400 389,469 53,176 442,645 $ 457,568 $ 457,568		2021
				4,748 372,491 44,186 416,677 $ 432,174 $ 432,174

(Concluded)

(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, 2022 and 2021, with resolution of the board of directors on February 21, 2023 and February 23, 2022, were as follows:

Estimate Rate Compensation of employee Compensation of director Amount Compensation of employee Compensation of director	2022 3.0% 1.5% 2022 Cash	2021
		4% 2% 2021
		Cash
	$ 24,000	$ 28,714
	12,000	14,357

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 2021, and 2020 has no difference compared to the recognized amount of the parent company only financial statements in 2021 and 2020.

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:

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		2022 $ 154,715 - 8,212) 146,503 3,400) $ 143,103		2021
	( (		( (	$ 141,121 953 289) 141,785 4,372) $ 137,413

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A reconciliation of accounting profit and income tax expense was as follows:

Profit before income tax Income tax expense calculated at the statutory rate Tax-exempt income Tax effect of expenses not deductible for tax Surtax on undistributed retained earnings Investment tax credits The adjustment of current income tax expenses for previous years Total income tax expense recognized in profit or loss	( ( (	2022 $ 756,683 $ 151,337 2,946 ) 7,424 - 4,500 ) 8,212) $ 143,103	( (	2021 $ 674,772 $ 134,954 2,854 ) 4,649 953 - 289) $ 137,413

(2) Deferred tax balances

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

2022

2022
Deferred tax assets Temporary differences Allowance for inventory valuation losses Defined benefit plans Others Deferred tax liabilities Temporary differences Unrealized foreign exchange gains Others 2021 Deferred taxassets Temporary differences Allowance for inventory valuation losses Defined benefit plans Others Deferred tax liabilities Temporary differences Unrealized foreign exchange gains Others	Beginning Balance $ 32,314 3,845 4,620 $ 40,779 $ 47 429 $ 476 Beginning Balance $ 27,081 4,197 4,698 $ 35,976 $ - - $ -	Recognized in Profit or Loss $ 7,522 ( 357 ) - $ 7,165 $ 3,355 410 $ 3,765 Recognized in Profit or Loss $ 5,233 ( 307 ) ( 78) $ 4,848 $ 47 429 $ 476	Recognized in Other Comprehensive Income $ - ( 830 ) - ( $ 830 ) $ - - $ - Recognized in Other Comprehensive Income $ - ( 45 ) - ( $ 45 ) $ - - $ -	Ending Balance
				$ 39,836 2,658 4,620 $ 47,114 $ 3,402 839 $ 4,241 Ending Balance
		( (	( (	$ 32,314 3,845 4,620 $ 40,779 $ 47 429 $ 476

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(3) Income tax assessment

The Company’s tax returns through 2020 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 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		2022 $ 613,580 2022 152,325 693 1,566 232 154,816	2021 $ 537,359 Units: Thousand shares 2021
				126,765 739 2,295 367 130,166

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	2022 Number of Options (In Thousands) Weighted Average Exercise Price ($) 3,034 $ 15.93 ( 1,061 ) 14.20 - - 1,973 15.15 1,973	2021	2021
	Number of Options (In Thousands) 3,034 ( 1,061 ) - 1,973 1,973	Number of Options (In Thousands) 4,468 ( 1,346 ) ( 88) 3,034 1,595	Weighted Average Exercise Price ($)
	(	( (	$ 16.70 14.76 16.35 15.93

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

December 31, 2022 Range of Exercise Price ($) Weighted- Over-Age Remaining Contractual Life (Years) $ - - 14.20 (Note) 1.01 15.50 (Note) 1.67	December 31, 2021	December 31, 2021
Range of Exercise Price ($) $ - 14.20 (Note) 15.50 (Note)	Range of Exercise Price ($) $ 12.50 (Note) 15.40 (Note) 16.90 (Note)	Weighted- Over-Age Remaining Contractual Life (Years)
		0.68 2.01 2.67

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

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

Securities price of the vested date Exercised price Foreseeable volatility rate Duration Foreseeable dividend rate Risk-free interest rate	September, 2018	January, 2018	September, 2016
	20.65 Dollars 20.65 Dollars 32.96% 6 Years 0% 0.72%	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%

The compensation cost recognized were $823 thousand and $1,459 thousand for the years ended December 31, 2022 and 2021, 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 are allotted with new shares, the share restrictions before the vested conditions are met are as follows:

The new shares with employee restricted shares shall not be sold, transferred, donated, pledged, requested to be bought back by the Company, or otherwise disposed with other methods.
The right to attend, propose, speak, and vote at the shareholders' meeting shall be exercised in accordance with the trust custody contract.
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Participation in allotment, dividend distribution and cash capital increase subscription is not allowed; In case of fifteen business days before the closing date of the Company's allotment, dividend and share subscription base date to the base date of rights distribution, employees who have fulfilled the vested conditions are not eligible for the rights of share allotment, dividends and subscriptions of their unrestricted shares during this period.
If the Company handles capital reduction such as cash capital reduction that is not due to statutory capital reduction, the new shares of the employee restrict shares shall be canceled in accordance with the capital reduction ratio. In the case of cash capital reduction, the returned cash must be delivered to the trust, and can only be delivered to employees after the vested conditions are met, but if the vested conditions are not met, the Company will take back the cash.
After the new shares with employee restricted shares are issued, they should be delivered to the trust immediately, and before the vested conditions are fulfilled, the trustee shall not be requested to return the new shares with restricted employee shares for any reason or method.

After employees have been allocated of new shares with employee restricted shares given by the Company, the Company has the right to take back their shares without giving any compensation and handle the new shares with employee restricted shares that have been allocated but have not yet met the vested conditions in the event where the employees violate the labor contract or work rules.

When the employee fails to meet the vested conditions, the Company will take back the new shares with restricted shares granted without giving any compensation according to law and cancel them.

Compensation costs by issuance of employee restricted shares recognized were $1,577 thousand and $3,230 thousand in 2022 and 2021 respectively. As of December 31, 2022 and 2021, unearned employee benefits totaled $494 thousand and $2,071 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%

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.

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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 assets and 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, 2022 Carrying Amount Fair Value $ 94,992 $ 77,938	December 31, 2021	December 31, 2021
	Carrying Amount $ 94,992	Carrying Amount $ 15,441	Fair Value
			$ 15,585

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

A. Fair value hierarchy

Fair value hierarchy
December 31, 2022 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 `－`Domestic unlisted shares Total 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 `－`Domestic unlisted shares Total	Level 1 $ 39,885 19,119 963,373 $1,022,377 $ 190,259 - $ 190,259 Level 1 $ 30,045 15,844 313,599 $ 359,488 $ 208,222 - $ 208,222	Level 2 $ - - - $ - $ - - $ - Level 2 $ - - - $ - $ - - $ -	Level 3	Total
			$ - - 9,191 $ 9,191 $ - 31,392 $ 31,392 Level 3	$ 39,885 19,119 972,564 $1,031,568 $ 190,259 31,392 $ 221,651 Total
			$ - - 9,567 $ 9,567 $ - 32,353 $ 32,353	$ 30,045 15,844 323,166 $ 369,055 $ 208,222 32,353 $ 240,575

There were no transfers between Level 1 and Level 2 in 2022 and 2021, 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.

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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, 2022 $ 1,031,568 3,890,696 221,651 3,534,910	December 31, 2021
		$ 369,055 4,587,999 240,575 3,228,319

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

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 5% against the relevant currency, the Company’s net profit in 2022 and 2021 would increase by $23,194 thousand and decrease $381 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.

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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, 2022 $ 770,532 18,555 307,533	December 31, 2021
		$ 940,739 11,532 782,782

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 and all other variables were held constant, the Company’s pre-tax profit in 2022 and 2021 would increase by $1,538 thousand and $3,914 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, pre-tax profit in 2022 and 2021 would have increased by $51,578 thousand and $18,453 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 by $11,083 thousand and $12,029 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.

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, 2022 and 2021, the Company’s five largest customers accounted all for 35% and 34% of trade receivable, respectively.

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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, 2022

December 31, 2022
Non-derivative financial liabilities No interest-bearing liabilities Lease liabilities December 31, 2021 Non-derivative financial liabilities No interest-bearing liabilities Lease liabilities	Less than 1 Year $ 3,534,110 10,061 $ 3,544,171 Less than 1 Year $ 3,227,519 5,232 $ 3,232,751	1-5 Years
		$ - 8,670 $ 8,670 1-5 Years

		$ - 6,432 $ 6,432

As of December 31, 2022 and 2021, the Company’s unused short-term credit of limit of the bank were $1,600,000 thousand.

26. RELATED PARTIES TRANSACTIONS

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

(1) The name and relationship of related party

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Name of the related party Relationship with the Company
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Name of the related party	Relationship with the Company
Zotech Co., Ltd.	Subsidiary
Zerone Win Investment Co., Ltd.	Subsidiary
Petacom Technology Co., Ltd.	Subsidiary
Wing Will International Co., Ltd.	Subsidiary
DigiCosmos Tech. Co., Ltd.	Subsidiary
Asiaone Holdings Ltd.	Subsidiary
Techone (Shanghai) Co., Ltd.	Subsidiary
TrustONE Security Inc.	Associate
Leukocyte-Lab Co. Ltd.	Associate
InfinitiesSoft Solutions Inc.	Associate (since June 29, 2022)
K Way Information Corp.	Other related party

(2) Operating revenue

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Line Items Types of related parties 2022 2021
Sales revenue Subsidiaries $ 105,661 $ 45,786
Associates 250 147
Other related parties 844 327
$ 106,755 $ 46,260
Service revenue Subsidiaries $ 4,453 $ 3,997
----- End of picture text -----

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

38 -
(3) Purchases

Purchases
Types of related parties Subsidiaries Associates		2022 $ 34,521 11,283 $ 45,804		2021
				$ 17,373 1,194 $ 18,567

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

Line Items Trade receivable Other receivable	Types of related parties Subsidiaries Associates Other related parties Subsidiaries		December 31, 2022 $ 24,636 5 590 - $ 25,231		December 31, 2021
					$ 10,459 - 343 48 $ 10,850

For the year ended December 31, 2022 and 2021 no impairment loss was recognized for trade receivables from related parties.

(5) Payables to related parties

Line Items Trade payable Other Payables	Types of related parties Subsidiaries Associates Subsidiaries		December 31, 2022 $ 13,692 1,506 74 $ 15,272		December 31, 2021
					$ 16,059 582 9 $ 16,650

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

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

December 31, December 31,
Types of related parties ／ Name 2022 2021
Subsidiaries $ - $ 5,000
Interest income
Types of related parties ／ Name 2022 2021
Subsidiaries $ 204 $ 48
(7) Non-operating income
Line Items Types of related parties 2022 2021
Rental income Subsidiaries $ 790 $ 981
(8) Compensation of key management personnel
2022 2021
Short-term employee benefits $ 47,725 $ 45,768
----- End of picture text -----

(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.

39 -

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, 2022 $ 204,843 34,857 $ 239,700	December 31, 2021
			$ 206,231 30,523 $ 236,754

28. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

(1) As of December 31, 2022, the Company issued $87,000 thousand of cashier order for payment guaranteed for Microsoft Taiwan Corporation.
(2) As of December 31, 2022, the Company issued $50,000 thousand of cashier order for payment guaranteed for Microsoft Regional Sales Corporation.

29.;FO REIGN - CU RREN CY - DEM ONINAT ED ASSETS AND LIABILITIES T HAT HA VE

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, 2022

December 31, 2022
Financial assets Monetary items USD Financial liabilities Monetary items USD December 31, 2021 Financial assets Monetary items USD Financial liabilities Monetary items USD	Foreign Currencies $ 25,031 40,136 Foreign Currencies $ 45,791 45,516	Exchange Rate 30.71 (USD:NTD) 30.71 (USD:NTD) Exchange Rate 27.68 (USD:NTD) 27.68 (USD:NTD)	Carrying Amount
			$ 768,702 $ 1,232,577 Carrying Amount
			$ 1,267,495 $ 1,259,883

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

Foreign Currencies USD	2022	Net Foreign Exchange Gains (Losses) $ 26,390	2021
	Exchange Rate 29.805 (USD:NTD)		Exchange Rate 28.009 (USD:NTD)	Net Foreign Exchange Gains (Losses) $ 19,254

40 -

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: Table 3.
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 4.
(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 5.
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: None.
41 -

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

FOR THE YEARS ENDED DECEMBER 31, 2022

Table 1

(In Thousands of New Taiwan Dollars)

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

Maximum
Amount Interest Nature for Reasons for Allowance Collateral Financing Limit for Aggregate
No. Financial Statement Related Balance for Ending Transaction
Lender Borrower Actually Rate Financing Short-term for Bad Each Borrower Financing Limit Note
(Note 1) Account Party the Period Balance Amount
Drawn (%) (Note 3) Financing Debt (Note 4) (Note 5)
(Note 2) Item Value
0 ZOTC Zerone Win Investment Co., Other receivables from Yes $ 50,000 $ - $ - 3% 2 $ - Operating $ - － $ - $ 394,830 $ 789,659
Ltd. related parties Capital
0 ZOTC Wing Will International Co., Other receivables from Yes 20,000 20,000 - 3% 2 - Operating - － $ - 394,830 789,659
Ltd. related parties Capital
----- End of picture text -----

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.

42 -

ZERO ONE TECHNOLOGY CO., LTD. MARKETABLE SECURITIES HELD

DECEMBER 31, 2022

Table 2

(In Thousands of New Taiwan Dollars)

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

Security Issuer’s December 31, 2022 Note
Marketable Securities Type and Issuer’s Name Relationship with Percentage of Market Prices/
Holding Company Financial Statement Account
（ Note 1 ） the Holding Shares/Units Carrying Values Ownership Net value of
Company (%) equities
ZOTC Beneficiary certificates
Taishin 1699 Money Market Fund － Financial assets at FVTPL － 47,267,987 $ 650,654 - $ 650,654
current
Taishin Ta-Chong Money Market Fund － Financial assets at FVTPL － 20,808,963 300,296 - 300,296
current
KGI Kaefer Fund － Financial assets at FVTPL－non- 170,199 3,689 - 3,689
current
KGI Taiwan Multi-Asset Income Fund － Financial assets at FVTPL－non- 1,198,020 12,423 - 12,423
current
KGI Taiwan Select-Asset Income Fund － Financial assets at FVTPL－non- 500,325 5,502 - 5,502
current
Corporate bond
M.J. International Co. Ltd. － 1st convertible － Financial assets at FVTPL － 20 （ Units ） 1,950 - 1,950
bonds current
Chailease Holding Company Limited － 1st － Financial assets at FVTPL － 180 （ Units ） 17,658 - 17,658
convertible bonds current
Taishin Financial Holding Co., Ltd. － 1st － Financial assets at FVTPL － 60 （ Units ） 6,012 - 6,012
exchangeable bonds current
Giant Manufacturing Co., Ltd. － 1st － Financial assets at FVTPL － 100 （ Units ） 9,630 - 9,630
convertible bonds current
Topco Technologies Corp. － 1st convertible － Financial assets at FVTPL － 45 （ Units ） 4,635 - 4,635
corporate bonds current
Perusahaan Listrik Negara corporate bond － Financial assets at amortized cost 10 （ Units ） 32,584 - 25,240
－
(USD) non-current
Southern California Edison corporate bond － Financial assets at amortized cost 5 （ Units ） 16,664 - 12,016
－
(USD) non-current
British Telecommunications plc corporate bond － Financial assets at amortized cost 5 （ Units ） 15,580 - 11,196
－
(USD) non-current
TSMC Arizona corporate bond (USD) － Financial assets at amortized cost 5 （ Units ） 30,164 - 29,486
－
non-current
----- End of picture text -----

（ Continued ）

43 -

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

Security Issuer’s December 31, 2022
Marketable Securities Type and Issuer’s Name Relationship with Percentage of Market Prices/
Holding Company Financial Statement Account Note
（ Note 1 ） the Holding Shares/Units Carrying Values Ownership Net value of
Company (%) equities
ZOTC Stock
Fubon Financial Holding Co., Ltd. － Financial assets at FVTPL － 68,510 $ 3,857 - $ 3,857
current
Cathay Financial Holding Co., Ltd. － Financial assets at FVTPL － 43,257 1,730 - 1,730
current
Cathay Financial Holding Co., Ltd. Preferred － Financial assets at FVTPL－non- 166,000 9,396 - 9,396
Shares A current
Union Bank of Taiwan Preferred Shares A － Financial assets at FVTPL－non- 80,000 4,136 - 4,136
current
Sino-American Silicon Products Inc. － Financial assets at FVTOCI － 20,000 2,790 - 2,790
current
－
K Way Information Corp. Director of Financial assets at FVTOCI non- 655,000 18,176 2.14 18,176
ZOTC current
－－
China Electric Mfg. Corp. Financial assets at FVTOCI non- 2,689,200 35,497 0.83 35,497
current
－－
Unex Technology Corp. Financial assets at FVTOCI non- 175,000 1,412 1.68 1,412
current
－－
Da-Chang Start-Up Investment Co. Ltd Financial assets at FVTOCI non- 3,000,000 29,980 2.73 29,980
current
Cathay Financial Holding Co., Ltd. Preferred － Financial assets at FVTOCI － non- 134,000 7,584 - 7,584
Shares A current
Union Bank of Taiwan Preferred Shares A － Financial assets at FVTOCI － non- 70,000 3,619 - 3,619
current
Fubon Financial Holding Co., Ltd. Preferred － Financial assets at FVTOCI － non- 400,000 23,000 - 23,000
Shares B current
Taishin Financial Holding Co., Ltd. Preferred － Financial assets at FVTOCI － non- 240,000 12,384 - 12,384
Shares E current
Taishin Financial Holding Co., Ltd. － Financial assets at FVTOCI － non- 1,350,000 23,153 - 23,153
Exchangeable Preferred Shares F current
CTBC Financial Holding Co., Ltd. Preferred － Financial assets at FVTOCI － non- 90,000 5,337 - 5,337
Shares B current
Cathay Financial Holding Co., Ltd. Preferred － Financial assets at FVTOCI － non- 230,000 12,558 - 12,558
Shares B current
WPG Holdings Limited Preferred Shares A － Financial assets at FVTOCI － non- 700,000 34,300 - 34,300
current
United Orthopedic Corporation Preferred － Financial assets at FVTOCI － non- 200,000 9,840 - 9,840
Shares A current
QST International Corporation Preferred － Financial assets at FVTOCI － non- 45,000 2,021 - 2,021
Shares A current
Miiicasa Holdings (Cayman) Inc. － Financial assets at FVTOCI － non- 2,500,000 - 3.45 -
current
（ Continued ）
----- End of picture text -----

44 -

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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 4 & Table 5.

（ Concluded ）

45 -

ZERO ONE TECHNOLOGY CO., LTD.AND SUBSIDIARIES

MARKETABLE SECURITIES ACQUIRED OR DISPOSED OF AT COSTS OR PRICES OF AT LEAST NT$300 MILLION OR 20% OF THE PAID-IN CAPITAL

FOR THE YEAR ENDED DECEMBER 31, 2022

Table 3

(In Thousands of New Taiwan Dollars)

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

Type and Beginning Balance Acquisition Disposal Ending Balance
Financial
Company Name of
Statement Counterparty Relationship Gain (Loss) on
Name Marketable Number of Shares Amount (Note) Number of Shares Amount Number of Shares Amount Carrying Amount Number of Shares Amount (Note)
Account Disposal
Securities
ZOTC Beneficiary
certificates
Taishin 1699 Financial assets — — 7,310,743 $ 100,001 54,576,112 $ 750,000 14,618,868 $ 200,131 $ 200,000 $ 131 47,267,987 $ 650,654
－
Money at FVTPL
Market current
Fund
Taishin Ta- Financial assets — — 6,968,447 100,000 20,808,963 300,000 6,968,447 100,064 100,000 64 20,808,963 300,296
－
Chong at FVTPL
Money current
Market
Fund
FSITC Financial assets — — 6,463,581 100,000 25,835,709 400,000 32,299,290 500,323 500,000 323 - -
－
Taiwan at FVTPL
Money current
Market
----- End of picture text -----

Note: The beginning balance and ending balance included adjustments of unrealized gains or loss on financial assets.

46 -

ZERO ONE TECHNOLOGY CO., LTD.

INFORMATION ON INVESTEES

FOR THE YEAR ENDED DECEMBER 31, 2022

Table 4

(In Thousands of New Taiwan Dollars)

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

Investment Amount As of December 31, 2022
Net Income Share of
Investee Number of Percentage Carrying
Investor Company Location Main Businesses December 31, December 31, (Loss) of the Profits/Losses of Note
Company Ownership of Values
2022 2021 Investee Investee
Ownership
ZOTC Zotech Co., Ltd. Taiwan Manufacturing for $ 35,000 $ 35,000 3,500,000 85.37 $ 44,199 $ 8,306 $ 7,090 Subsidiary
computer equipment
Zerone Win Investment Taiwan Investment 300,000 300,000 30,000,000 100.00 324,049 7,244 7,244 Subsidiary
Co., Ltd.
Asiaone Holdings Ltd. Republic of Holding company 10,063 10,063 320,000 100.00 13,908 2,051 2,051 Subsidiary
Seychelles
Zerone Win Wing Will International Taiwan Services of cloud 54,499 25,500 28,999,000 99.99 24,464 ( 1,440 ) ( 1,374 ) Sub-subsidiary
Investment Co., Co., Ltd. information software
Ltd.
Petacom Technology Taiwan Services of information 50,000 50,000 50,000,000 100.00 70,616 19,863 19,863 Sub-subsidiary
Co., Ltd. product agent
DigiCosmos Tech. Co., Taiwan Consulting service for 25,000 25,000 2,500,000 50.00 21,669 ( 6,426 ) ( 3,213 ) Sub-subsidiary
Ltd. information security
TrustONE Security Inc. Taiwan R&D, sale and service 7,200 4,000 7,200,000 32.00 1,430 ( 11,567 ) ( 3,166 ) Associate
of information
software
Leukocyte-Lab Co. Ltd. Taiwan IT Security Mgt& 11,500 11,500 240,000 34.78 6,327 ( 7,630 ) ( 4,845 ) Associate
R&D, sales &
consulting service
etc.
InfinitiesSoft Solutions Taiwan Software development, 37,800 28,800 2,780,889 24.33 19,871 ( 4,894 ) ( 3,594 ) Associate
Inc. and services of
information and
computer software
----- End of picture text -----

Note: Please refer to Table 5 for Information on investment in Mainland China.

47 -

ZERO ONE TECHNOLOGY CO., LTD.

INFORMATION ON INVESTMENTS IN MAINLAND CHINA

FOR THE YEAR ENDED DECEMBER 31, 2022

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

Table 5 (In Thousands of New Taiwan Dollars/Foreign Currency)
Remittance of Accumulated
Accumulated Accumulated
Funds Outward
Outward % Ownership Carrying Repatriation of
Main Remittance for Net Income Investment
Investee Method of Remittance for of Direct or Amount as of 31 Investment
Businesses and Paid-in Capital Investment from (Loss) of the Gain (Loss) Note
Company Investment Investment from Indirect December, Income as of 31
Products Outward Inward Taiwan as of Investee (Note 2)
Taiwan as of Investment 2022 December,
December 31,
January 1, 2022 2022
2022
Techone Technical $ 13,224 (Note 1) $ 9,118 $ - $ - $ 9,118 $ 2,950 70% $ 2,065 $ 13,617 $ - －
(Shanghai) service of ( RMB 3,000 )
Co., Ltd. network
technology
Accumulated Outward Remittance for Upper Limit on the Amount of Investments
Investment Amount Authorized by
Investments in Mainland China as of Stipulated by the Investment Commission,
the Investment Commission, MOEA
December 31, 2022 MOEA (Note 3)
$ 9,118 $ 9,118 $ 2,390,027
----- End of picture text -----

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, 2022.

Note 3 ： According to the "Principles for the Review of Investment or Technical Cooperation in the Mainland Area" stipulated by the Investment Commission, Ministry of Economic Affairs, the limit is 60% of net worth of the Company or the consolidated financial statements. (3,983,378 × 60% ＝ 2,390,027)

Note 4 ： For foreign currency conversion, gain (loss) are converted by the average exchange rate in 2022. Other amounts are converted into New Taiwan Dollars by the exchange rate on December 31, 2022.

48 -

§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 OF FINANCIAL ASSETS AT FVTPL － CURRENT STATEMENT OF FINANCIAL ASSETS AT － AMORTIZED COST CURRENT STATEMENT OF NOTES RECEIVABLE STATEMENT OF TRADE RECEIVABLE STATEMENT OF INVENTORIES STATEMENT OF FINANCIAL ASSETS AT FVTPL － NON-CURRENT STATEMENT OF FINANCIAL ASSETS AT － FVTOCI NON-CURRENT STATEMENT OF FINANCIAL ASSETS AT － AMORTIZED COST NON-CURRENT STATEMENT OF CHANGES IN INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD STATEMENT OF CHANGES IN PROPERTY, PLANT AND EQUIPMENT STATEMENT OF CHANGES IN ACCUMULATED DEPRECIATION OF PROPERTY, PLANT AND EQUIPMENT STATEMENT OF DEFERRED INCOME TAX ASSETS STATEMENT OF TRADE PAYABLES STATEMENT OF OTHER PAYABLES STATEMENT OF OTHER CURRENT LIABILITIES MAJOR ACCOUNTING ITEMS IN PROFIT OR LOSS STATEMENT OF OPERATING REVENUE STATEMENT OF OPERATING COST STATEMENT OF OPERATING EXPENSES STATEMENT OF EMPLOYEE BENEFIT, DEPRECIATION, DEPLETION AND AMORTIZATION BY FUNCTION

Statement 1 Statement 2 Note 9 Statement 3 Statement 4 Statement 5

Statement 6 Statement 7 Note 9

Statement 8 Note 14

Note 14

Note 21 Statement 9 Note 16 Statement 10

Statement 11 Statement 12 Statement 13

Statement 14

49 -

ZERO ONE TECHNOLOGY CO., LTD. STATEMENT OF CASH AND CASH EQUIVALENTS

DECEMBER 31, 2022

STATEMENT 1

(In Thousands of New Taiwan Dollars)

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

Item Description Amount
Cash on hand and $ 121
revolving funds
Checking accounts and New Taiwan dollar 143,636
demand deposits
USD 714 thousand ＠ 30.71; EUR 3 22,044
thousand ＠ 32.72
Time deposits USD 6,995 thousand@ 30.71; annual 214,830
interest rate at 4.39%~4.45%;
Expired by February 4, 2023
Repurchase agreements USD 13,713 thousand@ 30.71; 421,136
collateralized by bonds annual interest rate at
4.10%~4.30%; Expired by January
16, 2023
$ 801,767
----- End of picture text -----

50 -

ZERO ONE TECHNOLOGY CO., LTD.

`－` STATEMENT OF FINANCIAL ASSETS AT FVTPL CURRENT

DECEMBER 31, 2022

Statement 2

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

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

Fair value
Name of financial instruments Description Units Par value (Dollars) Total Acquisition Cost Units (Dollars) Total
Taishin 1699 Money Market Fund Fund beneficiary certificates 47,267,987 10 $ 472,680 $ 650,000 $ 13.7652 $ 650,654
Taishin Ta-Chong Money Market Fund Fund beneficiary certificates 20,808,963 10 208,090 300,000 14.4311 300,296
－
M.J. International Co. Ltd. 1st Convertible bond 20 (Units) 100,000 2,000 2,026 97.5 1,950
convertible bonds
－
Chailease Holding Company Limited Convertible bond 180 (Units) 100,000 18,000 18,180 98.1 17,658
1st convertible bonds
－
Taishin Financial Holding Co., Ltd. Exchangeable bond 60 (Units) 100,000 6,000 6,060 100.2 6,012
1st exchangeable bonds
－
Giant Manufacturing Co., Ltd. 1st Convertible bond 100 (Units) 100,000 10,000 10,100 96.3 9,630
convertible bonds
－
Topco Technologies Corp. 1st Convertible bond 45 (Units) 100,000 4,500 4,536 103 4,635
convertible cbonds
Fubon Financial Holding Co., Ltd. Stock 68,510 10 685 4,906 56.3 3,857
Cathay Financial Holding Co., Ltd. Stock 43,257 10 433 1,514 40 1,730
997,322 $ 996,422
Add (Less) ： Valuation adjustment ( 900 )
$ 996,422
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51 -

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

DECEMBER 31, 2022

Statement 3

(In Thousands of New Taiwan Dollars)

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

The firm name Description Amount
Non-related parties
Stark Technology Inc. Payment for goods $ 63,253
Openpower Information Co., Ltd. Payment for goods 58,651
Apex Fong Yi Technology Co., Ltd. Payment for goods 35,379
Genesis Technology Inc. Payment for goods 17,416
WeiCloud Technology Co., Ltd Payment for goods 16,915
Others (Note) Payment for goods 127,659
319,273
-
Less: Allowances for impairment
loss
$ 319,273
----- End of picture text -----

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 TRADE RECEIVABLE

DECEMBER 31, 2022

Statement 4

(In Thousands of New Taiwan Dollars)

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

The Company’s name Description Amount
Kinmax Technology Inc. Payment for goods $ 278,213
Hwacom Systems Inc. Payment for goods 265,441
Kyndryl Taiwan Corporation Payment for goods 141,764
High Performance Information Co., Ltd Payment for goods 136,818
Others (Note) Payment for goods 1,683,670
2,505,906
Less: Allowances for impairment loss 15,985
Total $ 2,489,921
----- End of picture text -----

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

53 -

ZERO ONE TECHNOLOGY CO., LTD.

STATEMENT OF INVENTORIES

DECEMBER 31, 2022

Statement 5

(In Thousands of New Taiwan Dollars)

Net realizable value Items Book value (Note) Commodities $ 1,945,996 $ 2,011,654

Note ： The net realizable value is the estimated selling price of inventories less the estimated costs necessary to make the sale under normal situations.
54 -

ZERO ONE TECHNOLOGY CO., LTD.

`－` STATEMENT OF FINANCIAL ASSETS AT FVTPL NON-CURRENT

FOR THE YEAR ENDED DECEMBER 31, 2022

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 $ 3,669 1,198,020 13,598 500,325 5,898 166,000 10,441 80,000 4,240 $ 37,846	Beginning Balance 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	Addition Shares Amount - $ - - - - - - - - - $ -	Addition Shares Amount - $ - - - - - - - - - $ -	Decrease Shares Amount - $ - - - - - - - - - $ -	Decrease Shares Amount - $ - - - - - - - - - $ -	Valuation for the current year $ 20 ( 1,175 ) ( 396 ) ( 1,045 ) ( 104) ($ 2,700 )	Balance, December 31, 2022 Shares Book value 170,199 $ 3,689 1,198,020 12,423 500,325 5,502 166,000 9,396 80,000 4,136 $ 35,146	Balance, December 31, 2022 Shares Book value 170,199 $ 3,689 1,198,020 12,423 500,325 5,502 166,000 9,396 80,000 4,136 $ 35,146	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

55 -

ZERO ONE TECHNOLOGY CO., LTD.

`－` STATEMENT OF FINANCIAL ASSETS AT FVTOCI NON-CURRENT

FOR THE YEAR ENDED DECEMBER 31, 2022

Statement 7

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

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Valuation for
Beginning Balance Addition Decrease the current Ending Balance
Name Shares Book value Shares Amount Shares Amount year Shares Book value Remark
K Way Information Corp. 655,000 $ 17,980 - $ - - $ - $ 196 655,000 $ 18,176
- - - -
China Electric Mfg. Corp 2,689,200 59,297 ( 23,800 ) 2,689,200 35,497
- - - -
Unex Technology Corp. 175,000 2,404 ( 992 ) 175,000 1,412
Da-Chang Start-Up Investment Co.
Ltd. 3,000,000 29,949 - - - - 31 3,000,000 29,980
Cathay Financial Holding Co., Ltd.
Preferred Shares A 134,000 8,429 - - - - ( 845 ) 134,000 7,584
Union Bank of Taiwan Preferred
Shares A 70,000 3,710 - - - - ( 91 ) 70,000 3,619
Fubon Financial Holding Co., Ltd.
Preferred Shares B 400,000 25,240 - - - - ( 2,240 ) 400,000 23,000
Taishin Financial Holding Co., Ltd.
Preferred Shares E 240,000 12,744 - - - - ( 360 ) 240,000 12,384
CTBC Financial Holding Co., Ltd.
Preferred Shares B 90,000 5,778 - - - - ( 441 ) 90,000 5,337
Cathay Financial Holding Co., Ltd.
Preferred Shares B 230,000 14,605 - - - - ( 2,047 ) 230,000 12,558
Kwong Lung Enterprise Co., Ltd.
Preferred Shares A 270,000 13,378 - - 270,000 13,482 104 - -
WPG Holdings Limited Preferred
Shares A 700,000 34,685 - - - - ( 385 ) 700,000 34,300
United Orthopedic Corporation
Preferred Shares A 200,000 9,230 - - - - 610 200,000 9,840
QST International Corp. Preferred
Shares A 70,000 3,146 - - 25,000 1,160 35 45,000 2,021
Taishin Financial Holding Co., Ltd.
- -
Exchangeable Preferred Shares F 1,350,000 23,828 ( 675 ) 1,350,000 23,153
- - - - - - -
Miiicasa Holdings (Cayman) Inc. 2,500,000 2,500,000
- - - - - - -
Duofu Co., Ltd 10,000 10,000
- - - - - - -
Jotangi Technology Co., Ltd. 796,250 796,250
$ 240,575 $ 23,828 $ 14,642 ($ 30,900 ) $ 218,861
----- End of picture text -----

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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, 2022

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 $ 37,348 30,000,000 331,797 320,000 11,696 $ 380,841	Beginning Balance Shares Amount 3,500,000 $ 37,348 30,000,000 331,797 320,000 11,696 $ 380,841	Addition Shares Amount - $ - - - - - $ -	Addition Shares Amount - $ - - - - - $ -	Decrease Shares Amount - $ - - - - - $ -	Decrease Shares Amount - $ - - - - - $ -	Increase (Decrease) in Using the Equity Method (Note 1) $ 6,851 ( 7,748 ) 2,212 $ 1,315		Ending Balance		Amount $ 44,199 324,049 13,908 $ 382,156	Net value of equity $ 44,199 324,049 13,908	Collateral/Pledge
	Shares 3,500,000 30,000,000 320,000		Shares - - -		Shares - - -			Shares 3,500,000 30,000,000 320,000	Percentage of ownership`％` 85.37 100.00 100.00
													None None None

Note 1 `：` Including

Share of profit or loss of subsidiaries $ 16,385 accounted for using the equity method
Changes in equity from investees accounted 588 for using the equity method
Share of other comprehensive income (loss) ( 15,819 ) of subsidiaries accounted for using equity method.
Exchange differences on translation of the 161 financial statements of foreign operations $ 1,315
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ZERO ONE TECHNOLOGY CO., LTD. STATEMENT OF TRADE PAYABLES

DECEMBER 31, 2022

DECEMBER 31, 2022	DECEMBER 31, 2022	DECEMBER 31, 2022
Statement 9 (In Thousands of New Taiwan Dollars) The Company’s name Amount CISCO SYSTEMS INTERNATIONAL B.V. $ 480,374 Trend Micro Inc. 466,774 NetApp B.V. 291,214 Others (Note) 2,062,243 $ 3,300,605
		$ 480,374 466,774 291,214 2,062,243 $ 3,300,605

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, 2022

DECEMBER 31, 2022	DECEMBER 31, 2022	DECEMBER 31, 2022
Statement 10 (In Thousands of New Taiwan Dollars) Items Amount Receipts under custody $ 216,926 Contract liability—current 26,246 Temporary receipts 25,864 $ 269,036
		$ 216,926 26,246 25,864 $ 269,036

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

FOR THE YEAR ENDED DECEMBER 31, 2022

Statement 11 (In Thousands of New Taiwan Dollars)

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Items Description Amount
Sales revenue Selling hardware and software $ 12,295,309
suite
Service revenue 85,410
12,380,719
Less: sales returns 8,292
Less: sales discounts 9,388
$ 12,363,039
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ZERO ONE TECHNOLOGY CO., LTD. STATEMENT OF OPERATING COST

FOR THE YEAR ENDED DECEMBER 31, 2022

Statement 12

(In Thousands of New Taiwan Dollars)

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

Items Amount
Costs of goods sold
Inventory, beginning of year $ 1,782,512
Add ： Purchases 10,913,938
Inventory, ending of year ( 2,145,176 )
Others 406,055
Total costs of sales and purchases 10,957,329
Write-down of inventories 37,613
Losses on scrap of inventories 4,429
Inventory shrinkage 15
$ 10,999,386
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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, 2022

Statement 13

(In Thousands of New Taiwan Dollars)

==> picture [443 x 189] intentionally omitted <==

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

Selling and General and Research &
marketing administrative Development Expected
Items expenses expenses Expenses credit losses Total
Payroll Expenses $ 315,443 $ 80,726 $ 8,223 $ - $ 404,392
Entertainment expense 71,388 150 - - 71,538
Insurance expense 36,263 9,401 647 - 46,311
Depreciation expense 12,730 13,972 37 - 26,739
- - -
Expected credit losses 12,543 12,543
Others (Note) 92,685 28,195 666 - 121,546
$ 528,509 $ 132,444 $ 9,573 $ 12,543 $ 683,069
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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, 2022 AND 2021

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		2022		Total $ 379,770 27,915 12,523 12,099 25,261 $ 457,568 $ 26,739 $ 1,177		2021
	Classified as Operating Cost $ - - - - - $ - $ - $ -	Classified as Operating Expenses $ 379,770 27,915 12,523 12,099 25,261 $ 457,568 $ 26,739 $ 1,177			Classified as Operating Cost $ - - - - - $ - $ - $ -	Classified as Operating Expenses $ 362,756 23,682 10,749 14,483 20,504 $ 432,174 $ 22,066 $ 1,068		Total
								$ 362,756 23,682 10,749 14,483 20,504 $ 432,174 $ 22,066 $ 1,068

Note 1: As of December 31, 2022 and 2021, the Company had 320 and 291 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 2022 and 2021 were $1,419 thousand and $1,466 thousand, respectively.
(2) Average salary and bonus for 2022 and 2021 were $1,209 thousand and $1,273 thousand, respectively.
(3) The change in the average salary and bonus is (5.03)%.
Note 3: The Company’s compensation policies (including directors, managers and employees) are as follows:
(1) Directors: Accordingly to Article 19 of the Company’s Articles of Incorporation, the compensation for directors shall be no more than 3% of annual profits. The Company allocates 1.5% of the current year’s annual profits for the compensation to directors, and will provide reasonable reward by taking into account of the Company’s operating results and the contribution they made. The procedures to determine the compensation is based on the Company’s “Rules for Distribution of Compensation to Directors.” Apart from referencing the company’s overall operational efficiencies, future management risk and developing trend of the industry, the personal efficiency achievement rate, contribution to the overall
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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 performance evaluation items, which include financial indicators (such as the Company’s revenue, achievement rate for profit 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 compliance and operational risks incidents) are also included in the evaluation. The procedures 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 annual 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.
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AI assistant

ZERO ONE — Audit Report / Information 2022

52262_rns_2022-10-27_cf66ea47-eac5-4a97-ad27-155497ba7021.pdf

§TABLE OF CONTENTS§

INDEPENDENT AUDITORS' REPORT

Opinion

Basis for Opinion

Key Audit Matters

Authenticity of the Occurrence of Operating Income

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

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

Notice to Readers

ZERO ONE TECHNOLOGY CO., LTD.

PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31, 2022 AND 2021

ZERO ONE TECHNOLOGY CO., LTD.

PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

ZERO ONE TECHNOLOGY CO., LTD.

PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

ZERO ONE TECHNOLOGY CO., LTD.

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021 (In Thousands of New Taiwan Dollars)

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

(4) Foreign currencies

(6) Investment in subsidiaries

(7) Property, plant and equipment

a. Measurement category

b. Impairment of financial assets

B. Equity Instruments

C. Financial liabilities

b. De-recognition of financial liabilities

(10) Revenue recognition

Revenue from sale of goods

A. The Company as lessor

(12) Costs of loans

B. Retirement benefits

B. Deferred tax

C. Current and deferred tax for the year

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

6. CASH AND CASH EQUIVALENTS

9. FINANCIAL ASSETS AT AMORTIZED COST

10. CREDIT RISK MANAGEMENT FOR INVESTMENTS IN DEBT INSTRUCTMENTS

11. NOTES, TRADE AND OVERDUE RECEIVABLE

December 31, 2021

12. INVENTORIES

13. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

14. PROPERTY, PLANT AND EQUIPMENT

15. LEASE ARRANGEMENTS

(2) Lease liabilities

16. OTHER PAYABLE

17. RETIREMENT BENEFIT PLANS

(2) Defined benefit plans

18. EQUITY

(2) Capital Surplus

(3) Retained earnings and dividend policy

19. REVENUE

20. NET INCOME

(4) Compensation for employees and remuneration of directors

21. INCOME TAXES

(2) Deferred tax balances

2022

(3) Income tax assessment

22. EARNINGS PER SHARE

23.SHARE-BASED PAYMENT ARRANGEMENTS

(1) Employee stock option plan

(2) Employee restricted shares

24. CAPITAL RISK MANAGEMENT

25. FINANCIAL INSTRUMENTS

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

Sensitivity analysis

Sensitivity analysis

c. Other price risk

Sensitivity analysis

B. Credit risk

C. Liquidity risk

Liquidity & interest rate risk table

December 31, 2022

26. RELATED PARTIES TRANSACTIONS

27. ASSETS PLEDGED AS COLLATERAL

ZERO ONE Audit Report / Information 2022

`－` STATEMENT OF FINANCIAL ASSETS AT FVTPL CURRENT

`－` STATEMENT OF FINANCIAL ASSETS AT FVTPL NON-CURRENT

`－` STATEMENT OF FINANCIAL ASSETS AT FVTOCI NON-CURRENT

Note 1 `：` Including