Zero One Technology Co., Ltd. - Interim / Quarterly Report 2020

Code ： 3029

ZERO ONE TECHNOLOGY CO., LTD.

AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019 AND INDEPENDENT AUDITORS’ REPORT

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

§TABLE OF CONTENTS§

Contents
Page No.
1、Cover
1
2、Table of Contents
2
3、Independent Auditors’ Review Report
3
4、Consolidated Balance Sheets
4
5、Consolidated Statements of Comprehensive Income
5
6、Consolidated Statements of Changes in Equity
6
7、Consolidated Statements of Cash Flows
7～8
8、Notes to Consolidated Financial Statements
(1) General
9
(2) The date and procedures of authorization of
financial statements
9
(3) Application of new and revised standards and
interpretations
9~10
(4) Summary of significant accounting policies
10~11
(5) Critical Accounting judgements and key sources
of estimation and uncertainty
11
(6) Explanation of significant accounts
11~32
(7) Transactions with related parties
32
(8) Assets pledged as collateral
32
(9) Significant
contingent
liabilities
and
unrecognized commitments
32
(10)Significant assets and liabilities denominated in
foreign currencies
32～33
(11)Separately disclosed items
A. Information on significant transactions
34、37～40
B. Information on investees
34、41
C.;Intercompany relationships and significant
intercompany transactions
34、42
D. Information on investment in Mainland China
34、43
E. Information of major shareholders
34、44
(12)Segment information
34~36 Financial
Report’s
Note No.
-
-
-
-
-
-
-
1
2
3
4
5
6～26
27
28
29
30
31
31
31
31
31
32

INDEPENDENT AUDITORS’ REVIEW REPORT

The Board of Directors and Shareholders Zero One Technology Company Limited

Introduction

We have reviewed the accompanying consolidated financial statements of Zero One Technology Company Limited and its subsidiaries (the “Group” ） as of September 30, 2020 and 2019 and the consolidated statements of comprehensive income for the three months ended September 30, 2020 and 2019 and the nine months ended September 30, 2020 and 2019, changes in equity and cash flows for the nine-month periods then ended September 30, 2020 and 2019, and the notes to the consolidated financial statements, including a summary of significant accounting policies. Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34, “Interim Financial Reporting,” endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China. Our responsibility is to express a conclusion on the consolidated financial statements based on our reviews.

Scope of Review

We conducted our reviews in accordance with Statement of Auditing Standards No. 65 “Review of Financial Information Performed by the Independent Auditor of the Entity”. A review of consolidated financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our reviews, nothing has come to our attention that caused us to believe that the accompanying consolidated financial statements do not present fairly, in all material respects, the financial position of the Company as of September 30, 2020 and 2019, its consolidated financial performance for the three months ended September 30, 2020 and 2019 and the nine months ended September 30, 2020 and 2019 and its consolidated cash flows for the nine months ended September 30, 2020 and 2019, in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34 “Interim Financial Reporting” endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

The engagement partners on the audit resulting in this independent auditors' report are Chen Ming, Li and Pei Te, Chen.

Deloitte & Touche

Taipei, Taiwan Republic of China November 4, 2020

ZERO ONE TECHNOLOGY CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS September 30, 2020, December 31, 2019, and September 30, 2019

(In Thousands of New Taiwan Dollars)

ASSETS CURRENT ASSETS Cash and cash equivalents (Note 6) Financial assets at fair value through profit or loss - current (Note 7) Financial assets at amortized cost-current (Note 9) Notes receivable (Note 10) Trade receivables (Note 10) Current tax assets (Note 4) Inventories (Note 11) Other current assets Total current assets NON-CURRENT ASSETS Financial assets at fair value through profit or loss - non-current (Note 7) Financial assets at fair value through other comprehensive income- non-current (Note 8) Financial assets at amortized cost - non-current (Notes 9 and 28) Property, plant and equipment (Notes 14 and 28) Right-of-use assets (Notes 15) Other intangible assets Deferred tax assets (Note 4) Refundable deposits Prepayments for investments Total non-current assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term borrowings (Note 16) Financial liabilities at fair value through profit or loss - current (Note 7) Trade payables Other payables (Note 17) Current tax liabilities (Note 4) Lease liabilities - current (Notes 15) Other current liabilities Total current liabilities NON-CURRENT LIABILITIES Deferred tax liabilities (Note 4) Lease liabilities - non-current (Notes 15) Net defined benefit liabilities - non-current (Notes 4 and 19) Other non-current liabilities Total non-current liabilities Total liabilities EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY (Note 20) Share capital Ordinary shares Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Total retained earnings Other equity Total equity attributable to owners of the Company NON-CONTROLLING INTERESTS Total equity TOTAL	September 30, 2020 (Reviewed) Amount % $ 399,898 8 40,107 1 540,973 11 185,379 4 1,865,612 39 829 - 918,165 19 31,150 1 3,982,113 83 34,977 1 316,499 7 86,494 2 308,094 6 14,852 - 973 - 38,553 1 6,499 - 10,000 - 816,941 17 $ 4,799,054 100 $ - - - - 1,787,415 37 184,459 4 37,511 1 7,444 - 205,994 4 2,222,823 46 57 - 7,492 - 20,863 1 800 - 29,212 1 2,252,035 47 1,252,722 26 476,039 10 219,863 5 - - 576,421 12 796,284 17 10,388 - 2,535,433 53 11,586 - 2,547,019 53 $ 4,799,054 100	September 30, 2020 (Reviewed) Amount % $ 399,898 8 40,107 1 540,973 11 185,379 4 1,865,612 39 829 - 918,165 19 31,150 1 3,982,113 83 34,977 1 316,499 7 86,494 2 308,094 6 14,852 - 973 - 38,553 1 6,499 - 10,000 - 816,941 17 $ 4,799,054 100 $ - - - - 1,787,415 37 184,459 4 37,511 1 7,444 - 205,994 4 2,222,823 46 57 - 7,492 - 20,863 1 800 - 29,212 1 2,252,035 47 1,252,722 26 476,039 10 219,863 5 - - 576,421 12 796,284 17 10,388 - 2,535,433 53 11,586 - 2,547,019 53 $ 4,799,054 100	September 30, 2020 (Reviewed) Amount % $ 399,898 8 40,107 1 540,973 11 185,379 4 1,865,612 39 829 - 918,165 19 31,150 1 3,982,113 83 34,977 1 316,499 7 86,494 2 308,094 6 14,852 - 973 - 38,553 1 6,499 - 10,000 - 816,941 17 $ 4,799,054 100 $ - - - - 1,787,415 37 184,459 4 37,511 1 7,444 - 205,994 4 2,222,823 46 57 - 7,492 - 20,863 1 800 - 29,212 1 2,252,035 47 1,252,722 26 476,039 10 219,863 5 - - 576,421 12 796,284 17 10,388 - 2,535,433 53 11,586 - 2,547,019 53 $ 4,799,054 100	December 31, 2019 (Audited) Amount %	December 31, 2019 (Audited) Amount %	September 30, 2019 (Reviewed)	September 30, 2019 (Reviewed)	September 30, 2019 (Reviewed)
		Amount $ 399,898 40,107 540,973 185,379 1,865,612 829 918,165 31,150 3,982,113 34,977 316,499 86,494 308,094 14,852 973 38,553 6,499 10,000 816,941 $ 4,799,054 $ - - 1,787,415 184,459 37,511 7,444 205,994 2,222,823 57 7,492 20,863 800 29,212 2,252,035 1,252,722 476,039 219,863 - 576,421 796,284 10,388 2,535,433 11,586 2,547,019 $ 4,799,054					Amount $ 906,079 77,941 250,507 207,836 1,925,121 - 749,373 14,518 4,131,375 29,990 200,757 66,935 312,262 10,038 1,263 42,599 4,535 - 668,379 $ 4,799,754 $ 360,000 589 1,725,429 167,063 66,684 5,098 163,777 2,488,640 - 4,539 20,827 1,170 26,536 2,515,176 1,242,672 466,269 184,732 16,844 381,394 582,970 13,873) 2,278,038 6,540 2,284,578 $ 4,799,754	%
			8 1 11 4 39 - 19 1 83 1 7 2 6 - - 1 - - 17 100 - - 37 4 1 - 4 46 - - 1 - 1 47 26 10 5 - 12 17 - 53 - 53 100		$ 335,497 7 65,425 1 699,048 13 279,128 5 1,754,979 34 1,314 - 1,319,535 25 34,794 1 4,489,720 86 30,280 1 251,768 5 81,624 1 314,412 6 8,303 - 1,395 - 42,509 1 5,341 - - - 735,632 14 $ 5,225,352 100 $ 150,000 3 - - 2,035,186 39 381,418 7 57,249 1 4,553 - 143,072 3 2,771,478 53 793 - 3,803 - 21,918 1 1,171 - 27,685 1 2,799,163 54 1,246,352 24 470,136 9 184,732 4 16,844 - 494,764 9 696,340 13 7,476 - 2,420,304 46 5,885 - 2,426,189 46 $ 5,225,352 100	(		19 2 5 4 40 - 16 - 86 1 4 1 7 - - 1 - - 14 100 8 - 36 4 1 - 3 52 - - - - - 52 26 10 4 - 8 12 - 48 - 48 100

ZERO ONE TECHNOLOGY CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME For the nine months ended September 30, 2020 and 2019

(Reviewed, Not Audited) (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

	For the Three Months	For the Three Months	Ended September 30	Ended September 30		For the Nine Months	For the Nine Months	Ended September 30	Ended September 30
	2020	`％` 100 89 11 4 2 - - 6 5 - - 1 - - 1 6 1 5 ( 1 ) - - ( 1) 4 5 - 5 4 - 4		2019		2020	`％` 100 90 10 4 1 - - 5 5 1 - - - - 1 6 1 5 - - - - 5 5 - 5 5 - 5		2019
	Amount $ 2,467,016 2,206,966 260,050 98,387 34,752 2,056 942 136,137 123,913 3,193 7,290 7,472 - 471) 17,484 141,397 26,765 114,632 11,565 ) 207 60) 11,418) $ 103,214 $ 115,138 506) $ 114,632 $ 103,661 447) $ 103,214 $ 0.92 $ 0.90			Amount $ 2,382,849 2,175,566 207,283 88,018 34,982 1,526 30,832 155,358 51,925 7,091 4,624 1,750 ) 3,745 965) 12,745 64,670 12,902 51,768 2,265 - - 2,265 $ 54,033 $ 52,323 555) $ 51,768 $ 54,588 555) $ 54,033 $ 0.42 $ 0.41		Amount $ 7,598,541 6,800,124 798,417 275,558 107,562 4,789 1,794 389,703 408,714 15,368 13,353 2,944 - 2,068) 29,597 438,311 90,014 348,297 1,092 ) 221 ) - 1,313) $ 346,984 $ 349,978 1,681) $ 348,297 $ 348,781 1,797) $ 346,984 $ 2.82 $ 2.73			Amount $ 6,480,591 5,845,444 635,147 245,721 99,394 4,509 21,311 370,935 264,212 17,463 7,796 6,473 3,745 1,553) 33,924 298,136 62,522 235,614 8,248 - - 8,248 $ 243,862 $ 237,067 1,453) $ 235,614 $ 245,315 1,453) $ 243,862 $ 1.92 $ 1.88	`％`
( ( ( ( ( (			( ( ( (		( ( ( ( ( (			( ( (		100 90 10 4 2 - - 6 4 1 - - - - 1 5 1 4 - - - - 4 4 - 4 4 - 4

ZERO ONE TECHNOLOGY CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY For the nine months ended September 30, 2020 and 2019

(Reviewed, Not Audited) (In Thousands of New Taiwan Dollars, Unless Specified Otherwise)

						Equity Attributable to Owners of the Company	Equity Attributable to Owners of the Company	Equity Attributable to Owners of the Company	Equity Attributable to Owners of the Company	Equity Attributable to Owners of the Company							Non- controlling Interests $ 8,293 - - - ( 1,453 ) - ( 1,453) - - - - - ( 300 ) - $ 6,540 $ 5,885 - - - ( 1,681 ) ( 116) ( 1,797) 3,199 - - - - ( 108 ) - 4,407 $ 11,586	Total Equity	Total Equity
Share Capital Shares (In Thousand) Issued Capital 122,896 $ 1,228,965 - - - - - - - - - - - - 338 3,377 - - 333 3,330 700 7,000 - - - - - - 124,267 $ 1,242,672 124,635 $ 1,246,352 - - - - - - - - - - - - - - - - - - ( 12 ) ( 120 ) 649 6,490 - - - - - - 125,272 $ 1,252,722			Capital Surplus $ 446,515 - - - - - - 1,722 8,715 1,161 8,156 - - - $ 466,269 $ 470,136 - - - - - - 2,481 ) - 5,413 120 2,851 - - - $ 476,039			Retained	Earnings		Total $ 537,661 - - 184,603 ) 237,067 - 237,067 - - - - - - 7,155) $ 582,970 $ 696,340 - - 249,574 ) 349,978 - 349,978 718 ) - - - - - 258 - $ 796,284		Other Equity				Total $ 16,844 ) - - - - 8,248 8,248 - - - 15,156 ) 2,724 - 7,155 $ 13,873) $ 7,476 - - - - 1,197) 1,197) - 4,367 - - - - 258 ) - $ 10,388
										Exchange differences on translating the financial statements of foreign operations $ - - - - - - - - - - - - - - $ - $ - - - - - ( 155) ( 155) - - - - - - - - ($ 155)	Unrealized gain (loss) on Financial Assets at FVTOCI ( $ 16,844 ) - - - - 8,248 8,248 - - - - - - 7,155 ($ 1,441) $ 17,865 - - - - ( 1,042) ( 1,042) - - - - - - ( 258 ) - $ 16,565		Unearned Employee benefits $ - - - - - - - - - - 15,156 ) 2,724 - - $ 12,432) $ 10,389 ) - - - - - - - 4,367 - - - - - - $ 6,022)
Shares (In Thousand) 122,896 - - - - - - 338 - 333 700 - - - 124,267 124,635 - - - - - - - - - ( 12 ) 649 - - - 125,272				Legal Reserve $ 159,438 25,294 - - - - - - - - - - - - $ 184,732 $ 184,732 35,131 - - - - - - - - - - - - - $ 219,863		Special Reserve $ 15,501 - 1,343 - - - - - - - - - - - $ 16,844 $ 16,844 - 16,844 ) - - - - - - - - - - - - $ -	Unappropriated Earnings $ 362,722 ( 25,294 ) ( 1,343 ) ( 184,603 ) 237,067 - 237,067 - - - - - - ( 7,155) $ 381,394 $ 494,764 ( 35,131 ) 16,844 ( 249,574 ) 349,978 - 349,978 ( 718 ) - - - - - 258 - $ 576,421
(	(	(			(		( ( ( ( ( ( (	( ( ( (		( ( (	( ( ( ( (	( ( ( (		( ( ( ( ( (		( ( ( (	( ( ( ( ( ( (	( ( ( ( (	$ 2,204,590 - - 184,603 ) 235,614 8,248 243,862 5,099 8,715 4,491 - 2,724 300 ) - $ 2,284,578 $ 2,426,189 - - 249,574 ) 348,297 1,313) 346,984 - 4,367 5,413 - 9,341 108 ) - 4,407 $ 2,547,019

ZERO ONE TECHNOLOGY CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS For the nine months ended September 30, 2020 and 2019 (Reviewed, Not Audited)

(In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax Adjustments for: Depreciation expenses Amortization expenses Expected credit loss recognized on trade receivables Net gain on fair value change of financial assets and liabilities at fair value through profit or loss Finance costs Net gain on derecognition of financial assets at amortized cost Interest income Dividend income Costs of share-based payment Gain on disposal of investments accounted for using equity method Write-downs of inventories Net loss(gain) on foreign currency exchange Changes in operating assets and liabilities Financial assets mandatorily classified as at fair value through profit or loss Notes receivable Trade receivables Inventories Other current assets Trade payables Other payables Other current liabilities Net defined benefit liabilities Cash generated from operations Income tax paid Net cash generated from operating activities	For the Nine Months Ended September 30	For the Nine Months Ended September 30
	2020 $ 438,311 17,268 606 1,794 ( 2,008 ) 2,068 - ( 15,368 ) ( 10,911 ) 9,780 ( 275 ) 2,933 885 22,629 93,749 ( 113,347 ) 396,752 3,637 ( 242,470 ) ( 195,560 ) 62,922 ( 1,055) 472,340 (106,047) 366,293	2019
		$ 298,136 15,013 579 21,311 ( 5,024 ) 1,553 ( 3,745 ) ( 17,463 ) ( 4,406 ) 11,439 - 3,643 ( 1,090 ) 24,646 ( 46,706 ) ( 218,211 ) 186,541 13,194 68,579 ( 78,070 ) 56,706 ( 752) 325,873 ( 57,087) 268,786

(Continued)

ZERO ONE TECHNOLOGY CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS For the nine months ended September 30, 2020 and 2019 (Reviewed, Not Audited

ZERO ONE TECHNOLOGY CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS For the nine months ended September 30, 2020 and 2019 (Reviewed, Not Audited	ZERO ONE TECHNOLOGY CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS For the nine months ended September 30, 2020 and 2019 (Reviewed, Not Audited	ZERO ONE TECHNOLOGY CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS For the nine months ended September 30, 2020 and 2019 (Reviewed, Not Audited	ZERO ONE TECHNOLOGY CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS For the nine months ended September 30, 2020 and 2019 (Reviewed, Not Audited
(In Thousands of New Taiwan Dollars)
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 Proceeds from capital reduction of financial assets at fair value through other comprehensive income Purchase of financial assets at amortized cost Proceeds from sale of financial assets at amortized cost Proceeds from disposal of investments accounted for using equity method Increase in prepayments for investments Payments for property, plant and equipment Proceeds from disposal of property, plant and equipment Increase in refundable deposits Payment for intangible assets Interest received Dividends received Net cash generated from investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from short-term borrowings Repayments of short-term borrowings Proceeds from guarantee deposits received Refund of guarantee deposits received Repayment of the principal portion of lease liabilities Dividends paid to owners of the Company Exercise of employee share options Interest paid Dividends paid to non-controlling interests Increase in non-controlling interests Net cash generated from (used in) 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 PERIOD CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD	For the Nine Months Ended September 30 2020 2019 ( $ 93,118 ) ( $ 65,460 ) 24,217 21,594 3,078 - ( 190,696 ) ( 49,558 ) 342,035 406,861 275 - ( 10,000 ) - ( 4,488 ) ( 6,693 ) 540 - ( 1,158 ) ( 1,378 ) ( 184 ) ( 670 ) 15,375 13,787 10,911 4,406 96,787 322,889 - 260,000 ( 150,000 ) - - 370 ( 371 ) - ( 5,286 ) ( 5,058 ) ( 249,574 ) ( 184,603 ) 9,341 4,491 ( 2,072 ) ( 1,553 ) ( 108 ) - 4,407 - (393,663) 73,647 ( 5,016) 2,131 64,401 667,453 335,497 238,626 $ 399,898 $ 906,079
		2020 $ 93,118 ) 24,217 3,078 190,696 ) 342,035 275 10,000 ) 4,488 ) 540 1,158 ) 184 ) 15,375 10,911 96,787 - 150,000 ) - 371 ) 5,286 ) 249,574 ) 9,341 2,072 ) 108 ) 4,407 393,663) 5,016) 64,401 335,497 399,898
	( ( ( ( ( ( ( ( ( ( ( ( ( ( $		( ( ( ( ( ( ( ( $

(Concluded)

ZERO ONE TECHNOLOGY CO., LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2020 and 2019

(Reviewed, Not Audited)

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

1. GENERAL

Zero One Technology Company Limited (ZOTC) was incorporated as a company limited by shares under the provisions of the Group Law of the Republic of China in 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 consolidated financial statements are expressed by the functional currency (New Taiwan Dollars) of the Group.

2. THE DATE AND PROCEDURES OF AUTHORIZATION OF FINANCIAL STATEMENTS

The accompanying consolidated financial statements were approved by the Board of Directors and issued on November 4, 2020.

APPLICATION OF NEW, AMENDED 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, the “IFRSs”) endorsed and issued into effect by the Financial Supervisory Commission (FSC).

Except for the following, the initial application of the IFRSs endorsed and issued into effect by the FSC did not have material impact on the Group’s accounting policies:

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

FSC
New,Revised,Amended Standards and Interpretations “Annual Improvements to IFRS Standards 2018–2020” Amendments to IFRS 3 “Reference to the Conceptual Framework” Amendments to IFRS 4 “Extension of the Temporary Exemption from Applying IFRS 9” Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 “Interest Rate Benchmark Reform - Phase 2” Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets between An Investor and Its Associate or Joint Venture” IFRS 17 “Insurance Contracts” Amendments to IFRS 17 Amendments to IAS 1 “Classification of Liabilities as Current or Non-current” Amendments to IAS 16 “Property, Plant and Equipment - Proceeds before Intended Use” Amendments to IAS 37 “Onerous Contracts–Cost of Fulfilling a Contract”	Effective Date Issued bythe IASB(Note 1)
	January 1, 2022 (Note 2) January 1, 2022 (Note 3) Effective immediately upon promulgation by the IASB January 1, 2021 To be determined by IASB January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2022 (Note 4) January 1, 2022 (Note 5)

FSC

New,Revised,Amended Standards and Interpretations
“Annual Improvements to IFRS Standards 2018–2020”

Amendments to IFRS 3 “Reference to the Conceptual
Framework”

Amendments to IFRS 4 “Extension of the Temporary Exemption
from Applying IFRS 9”

Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16
“Interest Rate Benchmark Reform - Phase 2”

Amendments to IFRS 10 and IAS 28 “Sale or Contribution of
Assets between An Investor and Its Associate or Joint
Venture”

IFRS 17 “Insurance Contracts”

Amendments to IFRS 17

Amendments to IAS 1 “Classification of Liabilities as Current or
Non-current”

Amendments to IAS 16 “Property, Plant and Equipment -
Proceeds before Intended Use”

Amendments to IAS 37 “Onerous Contracts–Cost of Fulfilling a
Contract”

Effective Date Issued
bythe IASB(Note 1)

January 1, 2022 (Note 2)
January 1, 2022 (Note 3)
Effective immediately upon
promulgation by the IASB
January 1, 2021
To be determined by IASB
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2022 (Note 4)
January 1, 2022 (Note 5)

Note 1: Unless stated otherwise, the above New IFRSs are effective for annual reporting periods beginning on or after their respective effective dates.

Note 2: The amendments to IFRS 9 are applied prospectively to modifications and exchanges of financial liabilities that occur on or after the annual reporting periods beginning on or after January 1, 2022. The amendments to IAS 41 “Agriculture” are applied prospectively to the fair value measurements on or after the annual reporting periods beginning on or after January 1, 2022. The amendments to IFRS 1 “First-time Adoptions of IFRSs” are applied retrospectively for annual reporting periods beginning on or after January 1, 2022.
9 -
Note 3: The amendments are applicable to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after January 1, 2022.
Note 4: The amendments are applicable to property, plant and equipment that are brought to the location and condition necessary for them to be capable of operating in the manner intended by management on or after January 1, 2021.
Note 5: The amendments are applicable to contracts for which the entity has not yet fulfilled all its obligations on January 1, 2022.

Except for the above impact, as of the date the consolidated financial statements were authorized for issue, the Group is continuously assessing the possible impact that the application of other standards and interpretations will have on the Group’s financial position and financial performance and will disclose the relevant impact when the assessment is completed.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(1)Statement of compliance

These interim consolidated financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and IAS 34 “Interim Financial Reporting”as endorsed and issued into effect by the FSC. Disclosure information included in these consolidated financial statements is less than the disclosure information required in a complete set of annual consolidated financial state ments. (2)Basis of preparation

The consolidated financial statements have been prepared on the historical cost basis except for financial instruments which are measured at fair value, and net defined benefit liabilities which are measured at the present v alue 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;

B. Level 2 inputs are inputs other than quoted prices included with in Level 1 that are observable for an 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 an asset or liability.
(3)Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and the entities controlled by the Company (i.e., its subsidiaries, including structured entities). When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the Company. All intra-group transactions, balances, income and expenses are eliminated in full upon consolidation. Total comprehensive income of subsidiaries is attributed to the owners of the Company and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.

See Note 12, Tables 3&5 for detailed information on subsidiaries (including percentages of ownership and main businesses).

10 -

(4)Other Significant Accounting Policies

Except for the following, please refer to the consolidated financial statements for the year ended December 31, 2019.

A. ;Defined retirement benefits

;;Pension cost for an interim period is calculated on a year -to-date basis by using the actuarially determined pension cost rate a t the end of the prior financial year, adjusted for significant market fluctuations since that time an d for significant plan amendments, settlements, or other significant one -off events

B. ;Taxation

;;Income tax expense represents the sum of the tax curre ntly payable and deferred tax. Interim period income taxes are assessed on an annual basis and calculated by applying to an interim period's pre -tax income the tax rate that would be applicable to expected total annual earnings.

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

Key sources of the same critical accounting judgments, estimates and uncertainty assumption have been followed in these consolidated financial statements for the year ended December 31, 2019.

6. CASH AND CASH EQUIVALENTS

September 30, 2020 December 31, 2019 Cash on hand $ 440 $ 183 Checking accounts and demand deposits 370,358 118,757 Cash equivalents Time Deposits in banks - 216,557 Repurchase Agreements Collateralized by Bonds 29,100 - $ 399,898 $ 335,497 FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS September 30, 2020 December 31, 2019 Financial assets`－`current Mandatorily measured at FVTPL Domestic convertible bond $ 22,718 $ 31,182 Domestic listed ordinary shares 1,241 - Fund beneficiary certification 16,148 34,243 $ 40,107 $ 65,425 Financial assets`－`non-current Mandatorily measured at FVTPL Domestic listed preference shares $ 14,493 $ 15,041 Fund beneficiary certification 20,484 15,239 $ 34,977 $ 30,280	September 30, 2020 December 31, 2019 Cash on hand $ 440 $ 183 Checking accounts and demand deposits 370,358 118,757 Cash equivalents Time Deposits in banks - 216,557 Repurchase Agreements Collateralized by Bonds 29,100 - $ 399,898 $ 335,497 FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS September 30, 2020 December 31, 2019 Financial assets`－`current Mandatorily measured at FVTPL Domestic convertible bond $ 22,718 $ 31,182 Domestic listed ordinary shares 1,241 - Fund beneficiary certification 16,148 34,243 $ 40,107 $ 65,425 Financial assets`－`non-current Mandatorily measured at FVTPL Domestic listed preference shares $ 14,493 $ 15,041 Fund beneficiary certification 20,484 15,239 $ 34,977 $ 30,280	September 30, 2019	September 30, 2019
		$ 151 320,156 53,436 532,336 $ 906,079 September 30, 2019
Financial assets`－`current Mandatorily measured at FVTPL Domestic convertible bond Domestic listed ordinary shares Fund beneficiary certification Financial assets`－`non-current Mandatorily measured at FVTPL Domestic listed preference shares Fund beneficiary certification	September 30, 2020 $ 22,718 1,241 16,148 $ 40,107 $ 14,493 20,484 $ 34,977
			$ 40,343 - 37,598 $ 77,941 $ 14,950 15,040 $ 29,990 (Continued)

11 -

Financial liabilities`－`current Financial liabilities held for trading Foreign exchange forward contracts (1)	September 30, 2020 $ -	December 31, 2019 $ -	September 30, 2019	September 30, 2019
				$ 589 (Concluded)

(1)At the end of the reporting period, outstanding forward exchange contracts not under hedge accounting are as follows:

September 30, 2019

September 30, 2019
Buy Foreign exchange contracts	Currency USD/NTD	MaturityDate 2019.11.25 2019.11.25 2019.12.05 2019.12.05	Notional Amount (In Thousands)
			USD 1,000/NTD 31,249 USD 1,000/NTD 30,999 USD 1,000/NTD 31,291 USD 1,000/NTD 31,211

The Group entered into forward exchange contracts to manage risk exposures due to exchange rate fluctuations of foreign currency denominated assets and liabilities.

8.;FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE

INCOME

Investments in equity instruments

Non-current Domestic investment Listed and emerging market ordinary shares Listed preference shares Unlisted shares	September 30, 2020 $ 100,956 196,800 18,743 $ 316,499	December 31, 2019 $ 98,473 149,552 3,743 $ 251,768	September 30, 2019	September 30, 2019
				$ 55,992 140,500 4,265 $ 200,757

These investments in equity instruments are held for medium to long-term strategic purposes. Accordingly, the 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 Group’s strategy of holding these investments for long-term purposes.

9. FINANCIAL ASSETS AT AMORTIZED COST

Current Domestic investment Time deposits with original maturities more than three months(1) Repurchase agreements collateralized by bonds (2)	September 30, 2020 $ 482,773 58,200 $ 540,973	December 31, 2019 $ 307,809 391,239 $ 699,048	September 30, 2019	September 30, 2019
				$ 250,507 - $ 250,507 (Continued)

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Non-current Domestic investment Pledged Time Deposit (3) Barclays Bank Corporate Bond (USD) (4) PCA Life Assurance Co., Ltd. Corporate Bond (USD) (5) AT&T Corporate Bond (USD) (6) ;Yuanta Securities Asia Financial Services Limited 2018 Non-secured USD-denominated Private Fixed Rate Notes (7)	September 30, 2020 $ 25,345 15,239 29,883 16,027 - $ 86,494	December 31, 2019 $ 18,058 15,807 31,179 16,580 - $ 81,624	September 30, 2019	September 30, 2019
				$ 18,287 16,366 32,282 - - $ 66,935

(Concluded)

(1) As of September 30, 2020, December 31 and September 30, 2019, the annual interest rate of time deposit over 3 months portion is 0.63%~2.10%, 0.88%~2.33% and 0.88%~2.86%, respectively.
(2) As of September 30, 2020 and December 31, 2019, the market interest rate of repurchase agreements collateralized by bonds with original maturities more than three months is 0.6% and 2.70%~2.90%, respectively.
(3) Please refer to Note 28 for more details on financial assets at amortized cost under pledge.
(4) The group purchased Barclays Bank Corporate Bond (USD)by USD 527 thousand, with a coupon rate of 4.836%, in August, 2019.
(5) The group purchased PCA Life Assurance Co., Ltd. Corporate Bond (USD) by USD 1,040 thousand, with a coupon rate of 4.875%, in August, 2019.
(6) The group purchased AT&T Corporate Bond (USD) by USD 553 thousand, with a coupon rate of 4.50%, in November, 2019.
(7) The group purchased Yuanta Securities Asia Financial Services Limited issued 5-year corporate bonds, with the face value of USD 2,000 thousand and a coupon rate of 4.10%, in August, 2018. As for adjustment portion of investments, the Group sold all bonds by NTD$ 64,954 thousand, and recognized NT$ 3,745 thousand of gain from sale of financial assets at amortized cost, in August, 2019.

10. NOTES, TRADE RECEIVABLE AND OVERDUE RECEIVABLES

Measured at amortized cost Notes receivable Trade receivable Overdue receivables Deduct:Allowance for bad debts		September 30, 2020 $ 185,379 1,882,100 4,401 20,889) $ 2,050,991		December 31, 2019 $ 279,128 1,769,673 20,816 35,510) $ 2,034,107		September 30, 2019
	(		(		(	$ 207,836 1,967,438 20,405 62,722) $ 2,132,957

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

In order to minimize credit risk, the Group’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 Group 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 Group’s management believes the Group’s credit risk was significantly reduced.

13 -

The Group measures the loss allowance for tra de receivables at an amount equal to lifetime ECLs. 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 current financial position and past experience of receivable, and the change in global and regional economic conditions of uncollectible accounts, deciding the rate of the expected credit losses by the level of credit limits of customers and actual conditions, based on the degree of doubtful accounts triggered by customers of different industries.

The Group writes off an account receivable when there is i nformation 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 Group continues to engage in enforcement activity to attempt to recover the receivables which are due. Where recoveries are made, these are recognized in profits or losses.

The following table details the loss allowance of trade receivable: September 30, 2020

Not Past Due Gross carrying amount $2,045,592 Loss allowance (Lifetime ECLs) ( 5,979 ) Amortized cost $2,039,613 December 31, 2019 Not Past Due Gross carrying amount $1,992,952 Loss allowance (Lifetime ECLs) ( 3,903 ) Amortized cost $1,989,049 September 30, 2019 Not Past Due Gross carrying amount $2,058,559 Loss allowance (Lifetime ECLs) ( 2,857 ) Amortized cost $2,055,702		Not Past Due	1-30 Days Past Due	1-30 Days Past Due	31-60 Days Past Due	31-60 Days Past Due	61-90 Days Past Due $ 12,876 ( 7,190) $ 5,686 61-90 Days Past Due $ 696 ( 347) $ 349 61-90 Days Past Due	61-90 Days Past Due $ 12,876 ( 7,190) $ 5,686 61-90 Days Past Due $ 696 ( 347) $ 349 61-90 Days Past Due	More Than 90 Days Past Due $ 4,460 ( 4,460) $ - More Than 90 Days Past Due $ 58,481 ( 23,981) $ 34,500 More Than 90 Days Past Due $ 26,906 ( 26,906) $ -		Total $2,071,880 20,889) $2,050,991 Total
			$ 5,604 ( 1,823) $ 3,781 1-30 Days Past Due		$ 3,348 ( 1,437) $ 1,911 31-60 Days Past Due					(
			$ 4,757 ( 1,879) $ 2,878 1-30 Days Past Due		$ 12,731 ( 5,400) $ 7,331 31-60 Days Past Due					(	$2,069,617 35,510) $2,034,107 Total
Gross carrying amount Loss allowance (Lifetime ECLs) Amortized cost
	(	$2,058,559 2,857 ) $2,055,702	(	$ 71,821 18,885) $ 52,936	(	$ 25,699 8,530) $ 17,169	(	$ 12,694 5,544) $ 7,150	$ 26,906 ( 26,906) $ -		$2,195,679 ( 62,722) $2,132,957

The following table details information about the change in the loss allowance of trade receivable:

of trade receivable:
Balance at January 1 Add: Net remeasurement of loss allowance Less: Amounts written off Balance at September 30	For the Nine Months Ended September 30, 2020 $ 35,510 1,794 ( 16,415) $ 20,889	For the Nine Months Ended September 30, 2019
			$ 41,411 21,311 - $ 62,722

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11. INVENTORIES

NVENTORIES
Raw materials Work in process Finished goods Commodities Inventory in transit		September 30, 2020 $ 5,703 3,675 484 908,065 238 $ 918,165		December 31, 2019 $ 3,314 1,289 3,091 1,311,841 - $ 1,319,535		September 30, 2019
						$ 3,399 3,817 4,040 738,117 - $ 749,373

Cost of goods sold for inventories were NT$ 2,206,966 thousand, NT$2,175,566 thousand, NT$6,800,124 thousand and NT$5,845,444 thousand, respectively, for the three and nine months ended September 30, 2020 and 2019. The increase in net realizable value in the amount of NT$9,801 thousand, respectively, and allowance for inventory valuation and obsolescence loss in the amount of NT$15,505 thousand, NT$2,933 thousand and NT$3,643 thousand, respectively, were included in the cost of revenue for the three and nine months ended September 30, 2020 and 2019. The increase in net realizable value of inventories is recognized by disposal of the commodities, which had been allowed for inventory valuation loss.

SUBSIDIARIES
(1)Subsidiaries included in the consolidated financial statements

The consolidated entities were as follows:

Investor	Investee	Nature of Activities	Proportion of Ownership (%)	Proportion of Ownership (%)	Proportion of Ownership (%)	Re- mark
			September 30, 2020	December 31, 2019	September 30, 2019
The Company Zerone Win Investmen t Co., Ltd. Asiaone Holdings Ltd.	Zotech technology Co., Ltd. Zerone Win Investment Co., Ltd. Asiaone Holdings Ltd. WingWill International Co., Ltd. PetaCom technology Co., Ltd. Techone (Shanghai)Co., Ltd.	Manufacturing for computer equipment Investment Holding company Services of Cloud & information software Services of distribution of information product Services of Network Technology	85.37% 100.00% 100.00% 87.93% 100.00% 70.00%	85.37% 100.00% 100.00% 70.00% 100.00% -	85.37% 100.00% 100.00% 70.00% 100.00% -	A A A, B A, D A A, C

A. It’s not a major subsidiary. Its financial statements haven’t been reviewed by CPAs, beside the management personnel of the Group considers no material influence as the financial statements of the above subsidiaries haven’t been reviewed by CPAs.
B. It was established in September, 2019.
C. It was established in January, 2020.
D. The equity interest increased to 87.93%, due to the investee company’s capital increase in July, 2020.
(2)Subsidiaries excluded from the consolidated financial statements ： None.
15 -

13. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

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

14. PROPERTY, PLANT AND EQUIPMENT

Land Buildings Machinery equipment Office equipment Delivery equipment Other equipment	September 30, 2020 $ 234,892 55,156 - 10,199 1,106 6,741 $ 308,094	December 31, 2019 $ 234,892 56,519 - 11,021 1,474 10,506 $ 314,412	September 30, 2019 $ 234,892 56,972 4 12,512 1,598 6,284 $ 312,262	September 30, 2019 $ 234,892 56,972 4 12,512 1,598 6,284 $ 312,262
				$ 234,892 56,972 4 12,512 1,598 6,284 $ 312,262

Except for depreciation recognized, property, plant and equipment haven’t been increased, disposed and impaired for the nine months ended September 30, 2020 and 2019.

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

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	2-3 Years

Property, plant and equipment used by the Group and pledged as collateral for bank borrowings are set out in Note 28.

15. LEASE ARRANGEMENTS

(1) Right-of-use assets

SE ARRANGEMENTS ight-of-use assets
Carrying amounts of right-of-use assets Buildings Office equipment	September 30, 2020 $ 14,458 394 $ 14,852	December 31, 2019 $ 7,758 545 $ 8,303	September 30, 2019
				$ 9,443 595 $ 10,038

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			For	the Three	For the	Three	For the Nine	For the Nine	For the Nine	For the Nine	For the Nine	For the Nine
			Months Ended		Months	Ended	Months Ended		Months Ended
			September 30,		September 30,		September 30,		September 30,
				2020	2019		2020				2019
Additions to	right-of-use
assets							$	11,914		$	8,194
Depreciation	charge	for
right-of-use	assets
Buildings			$	1,864	$	1,702	$	5,166		$	4,422
Office equipment				50		50		151				151
			$	1,914	$	1,752	$	5,317		$	4,573
Lease liabilities
				September 30,		December		31,	September			30,
				2020			2019				2019
Carrying amounts		of	lease
liabilities
Current				$	7,444	$	4,553		$		5,098
Non-current				$	7,492	$	3,803		$		4,539

ange of discount rate for lease liabilities was						as follows:
				September 30,		December		31,	September			30,
				2020			2019				2019
Buildings				0.95%~4.75%			1.20%				1.20%
Office equipment				1.20%			1.20%				1.20%

(2) Lease liabilities

Range of discount rate for lease liabilities was as follows:

(3) Other lease information

3) Other lease information	3) Other lease information
For the Three Months Ended September 30, 2020 For the Three Months Ended September 30, 2019 For the Nine Months Ended September 30, 2020 For the Nine Months Ended September 30, 2019 Expenses relating to short-term leases $ 548 $ 63 $ 650 $ 312 Expenses relating to low-value asset leases $ 12 $ 19 $ 38 $ 37 Total cash (outflow) for leases ($ 6,088) ($ 5,368) SHORT-TERM BORROWINGS September 30, 2020 December 31, 2019 September 30, 2019 Secured borrowings `－`Secured borrowings (Note 28) $ - $ - $ 180,000 Unsecured borrowings `－`Line of credit borrowings $ - $ 150,000 $ 180,000		For the Nine Months Ended September 30, 2019
			$ 180,000 $ 180,000

16. SHORT - TERM BORROWINGS

Interest rate of bank revolving loans is 0.94% on December 31 and September 30, 2019.

17. OTHER PAYABLES

OTHER PAYABLES
Payables for salaries & bonuses Compensation of employees, remuneration of directors and supervisors payable Others	September 30, 2020 $ 61,484 27,998 94,977 $ 184,459	December 31, 2019 $ 83,057 28,379 269,982 $ 381,418	September 30, 2019
				$ 54,317 19,084 93,662 $ 167,063

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18. BOND PAYABLE

On May 19, 2014, the Group issued no any interest unsecured bonds (the second tranche), which were listed on Taipei Exchange (TPEX). The bonds had an aggregate face value of $500,000 thousand, with each unit having a face value of NT$100 thousand, and the offering price was $100.20% of the face value, and its conversion period is 5 years from June 20, 2014 to May 9, 2019. The conversion price was $20 per share on the issuance date.

Within the period between one month after the issuance date and 40 days before the last convertible date, if the closing price of ordinary shares of the Group on the TWSE for a period of 30 consecutive trading days bef ore redemption has been at least 30% of the conversion price in effect on each such trading day, or in the event that the principal amount of the bonds originally outstanding is 10 % lower than the issued amount of the bonds, the Group may redeem all bonds at face value by cash.

The convertible bonds issued over 3 years, the holder could ask the Group to redeem bonds at face value by cash.

The convertible bonds contain two components: The host liability instrument and the conversion option derivative instrument, and the conversion option derivative instrument was accounted as paid-in capital –option. The effective interest rate of the host liability instrument on initial recognition was 2.0618% per annum.

Balance on January 1, 2019, liability components Interest (2.0618%) Convertible bonds changed into ordinary shares ( Balance on September 30, 2019, liability components	$ 5,085 15 5,100) $ -

19. RETIREMENT BENEFIT PLANS

For the three and nine months ended September 30, 2020 and 2019, the Group’s pension costs under the defined benefit plan were made payment NT$105 thousand, NT$131 thousand, NT$314 thousand and NT$393 thousand, respectively, decided by actuarial pension costs rate on December 31, 2019 and 2018.

20. EQUITY

(1)Ordinary Shares

Shares authorized (in thousands of shares) Authorized capital Shares issued and fully paid (in thousands of shares) Issued capital		September 30, 2020 150,000 $ 1,500,000 125,272 $ 1,252,722		December 31, 2019 150,000 $ 1,500,000 124,635 $ 1,246,352		September 30, 2019
						150,000 $ 1,500,000 124,267 $ 1,242,672

The change in share capital is mainly due to bonds payable that changes into ordinary shares, employee stock options exercised, and restricted stock awards issued(recalled).

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(2)Capital Surplus

May be used to offset a deficit, distributed as cash dividends, or transferred to share capital (A) Premium on shares issued above par value Treasury stock transactions Only be used to offset a deficit From shares of changes in equities of;subsidiaries(B) Invalid employees stock options May not be used for any purpose Restricted stock awards Employees stock options	September 30, 2020 $ 414,997 25,343 - 300 8,276 27,123 $ 476,039	December 31, 2019 $ 408,165 25,343 2,481 300 8,156 25,691 $ 470,136	September 30, 2019	September 30, 2019
				$ 404,907 25,343 2,481 300 8,156 25,082 $ 466,269

A. Such capital surplus may be used to offset a deficit; in addition, when the Group has no deficit, such capital surplus may be distributed as cash dividends or transferred to share capital (limited to a certain percentage of the Group’s paid-in capital surplus and once a year).
B. Such capital surplus arises from the effects of changes in ownership inter ests in subsidiaries resulting from equity transactions other than actual disposals or acquisitions or from changes in capital surplus of subsidiaries accounted for using the equity method.
(3)Retained earnings and dividend policy

Under the dividends policy as set forth in the Articles of Incorporation, where the Company made a profit in a fiscal year, the profit shall be first utilized for paying taxes, offsetting losses of previous years, setting aside as legal reserve 10% of the remaining profit, setting aside or reversing a special reserve in accordance with the laws and regulations, and then any remaining profit together with any undistributed retained earnings shall be used by the Company’s board of directors as the basis for proposing a distribution plan, which should be resolved in the shareholders’ meeting for the distribution of dividends and bonuses to shareholders. For the policies on the distribution of employees’ compensation and remuneration of directors and supervisors after the amendment, refer to employees’ compensation and remuneration of directors in Note 21-7.

Distribution of earnings shall be made preferably by way of surplus cash dividend, according to future capital budget plan, and operating fund requirements. The Group considers its influences on diluted earning per shares and return on equity, and the ratio for cash dividend shall not below 10% of the total distribution.

The appropriation for legal capital reserve shall be made un til the reserve equals the Group’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 Group incurs no loss.

19 -

Under Rule No. 1010012865 and Rule No. 1010047490 issued by the FSC and the directive titled “Questions and Answers for Special Reserves Appropriated Following Adoption of IFRSs”, the Group shall appropriate or reverse to a special reserve.

The appropriations of 2019 and 2018 earnings have been approved by ZOTC’s shareholders’ meeting on June 10, 2020 and June 13, 2019, respectively, were as follows:

were as follows:
Legal capital reserve Special reserve recognized(reversed) Cash dividends	Appropriation of Earnings For Fiscal Year 2019 For Fiscal Year 2018 $ 35,131 $ 25,294 ( 16,844 ) 1,343 249,574 184,603	Dividends Per Share(NT$)
	For Fiscal Year 2019 $ 35,131 ( 16,844 ) 249,574	For Fiscal Year 2019 $ 2.0	For Fiscal Year 2018
			$ 1.5

(4)Other equity
A. Exchange differences on translating the financial statements of foreign operations

Balance at January 1 In respect of the current period Exchange differences on translating the financial statements of foreign operations Balance at September 30	For the Nine Months Ended September 30, 2020 $ - ( 155) ($ 155)	For the Nine Months Ended September 30, 2019	For the Nine Months Ended September 30, 2019
	( (		$ - - $ -

B. Unrealized Gain/Loss from financial assets measured at FVTOCI

Balance at January 1 In respect of the current period Unrealized profits and losses`－` equity instruments Cumulative gain (loss) of equity instruments transferred to retained earnings due to disposal Balance at September 30	For the Nine Months Ended September 30, 2020 $ 17,865 ( 1,042 ) ( 258) $ 16,565	For the Nine Months Ended September 30, 2019	For the Nine Months Ended September 30, 2019
	( (	( (	$ 16,844 ) 8,248 7,155 $ 1,441)

C. Unearned employee benefit

In the shareholders’ meetings held on June 11, 2018, the shareholders approved the issuance of restricted stock awards. Refer to Note 24 for the information of relevant explanation.

Balance, beginning of period Issued at the current period Share-based payment expenses recognized Balance, end of period	For the Nine Months Ended September 30, 2020 ( $ 10,389 ) - 4,367 ($ 6,022)	For the Nine Months Ended September 30, 2019	For the Nine Months Ended September 30, 2019
	( (	( (	$ - 15,156 ) 2,724 $ 12,432)

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21. NET PROFIT (LOSS) FROM CONTINUING OPERATIONS

(1)Interest income

(1)Interest income
Bank deposits Financial assets at amortized cost Others (2)Other income Dividend income Others (3)Other gains and losses Net gain arising on financial assets measured at FVTPL Net foreign exchange Profit(loss) Gain on disposal of investments accounted for using equity method Loss on disposal of property, plant and equipment (4)Financial costs Interests on bank borrowings Interests on lease liabilities Interests on convertible bonds	For the Three Months Ended September 30, 2020 $ 36 3,156 1 $ 3,193 For the Three Months Ended September 30, 2020 $ 6,810 480 $ 7,290 For the Three Months Ended September 30, 2020 $ 1,209 6,303 - ( 40) $ 7,472 For the Three Months Ended September 30, 2020 $ 403 68 - $ 471	For the Three Months Ended September 30, 2019 $ 474 6,617 - $ 7,091 For the Three Months Ended September 30, 2019 $ 4,390 234 $ 4,624 For the Three Months Ended September 30, 2019 $ 627 ( 2,377 ) - - ($ 1,750) For the Three Months Ended September 30, 2019 $ 937 28 - $ 965	For the Nine Months Ended September 30, 2020 $ 1,961 13,402 5 $ 15,368 For the Nine Months Ended September 30, 2020 $ 10,911 2,442 $ 13,353 For the Nine Months Ended September 30, 2020 $ 2,008 661 275 - $ 2,944 For the Nine Months Ended September 30, 2020 $ 1,954 114 - $ 2,068	For the Nine Months Ended September 30, 2019
				$ 2,900 14,562 1 $ 17,463 For the Nine Months Ended September 30, 2019
				$ 4,406 3,390 $ 7,796 For the Nine Months Ended September 30, 2019
				$ 5,024 1,449 - - $ 6,473 For the Nine Months Ended September 30, 2019
					$ 1,471 67 15 $ 1,553

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(5)Depreciation & amortization

(5)Depreciation & amortization
For the Three Months Ended September 30, 2020 Property, plant and equipment $ 3,861 Right-of-use assets 1,914 Intangible assets 177 $ 5,952 An analysis of depreciation by function Operating costs $ - Operating expenses 5,775 $ 5,775 An analysis of amortization by function Operating expenses $ 177 (6)Employee benefits expense For the Three Months Ended September 30, 2020 Post-employment benefits Defined contribution plans $ 2,854 Defined benefit plans `（`Note 19`）` 105 2,959 Share-Based Payment Equity Swap 2,201 Other employee benefits 92,481 Total employee benefits expense $ 97,641 An analysis of employee benefits expense by function Operating costs $ 905 Operating expenses 96,736 $ 97,641	For the Three Months Ended September 30, 2019 $ 3,611 1,752 199 $ 5,562 $ 5 5,358 $ 5,363 $ 199 For the Three Months Ended September 30, 2019 $ 2,599 131 2,730 4,898 80,185 $ 87,813 $ 1,015 86,798 $ 87,813	For the Nine Months Ended September 30, 2020 $ 11,951 5,317 606 $ 17,874 $ - 17,268 $ 17,268 $ 606 For the Nine Months Ended September 30, 2020 $ 8,023 314 8,337 9,780 265,507 $ 283,624 $ 2,689 280,935 $ 283,624	For the Nine Months Ended September 30, 2019
			$ 10,440 4,573 579 $ 15,592 $ 153 14,860 $ 15,013 $ 579 For the Nine Months Ended September 30, 2019
				$ 7,235 393 7,628 11,439 231,609 $ 250,676 $ 3,224 247,452 $ 250,676

(7)Employees’ compensation and remuneration of directors

The Group shall allocate compensation to the employees and directors of the Group not less than 1%~15% and not more than 3% of annual profits during the period, respectively, and the estimate of employees’ compensation and remuneration of directors for the three and nine months ended September 30, 2020 and 2019 is as follows:

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Estimate Rate

Estimate Rate
Employees’ compensation Remuneration of directors Amount Employees’ compensation Remuneration of directors	For the Three Months Ended September 30, 2020 4.00% 2.00% For the Three Months Ended September 30, 2020 $ 6,038 3,020	For the Three Months Ended September 30, 2019 4.00% 2.00% For the Three Months Ended September 30, 2019 $ 2,735 1,367	For the Nine Months Ended September 30, 2020 4.00% 2.00% For the Nine Months Ended September 30, 2020 $ 18,665 9,333	For the Nine Months Ended September 30, 2019
				4.00% 2.00% For the Nine Months Ended September 30, 2019
				$ 12,723 6,361

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 employees’ compensation and the remuneration of directors for the years ended December 31, 2019 and 2018, which were approved by the Company’s board of directors on February 26, 2020 and February 27, 2019, respectively, are as follows:

Employees’ compensation Remuneration of directors	2019 Cash Stock $ 18,911 $ - 9,456 -	2018	2018
	Cash $ 18,911 9,456	Cash $ 13,425 6,712	Stock
			$ - -

There is no difference between the actual amounts of employees’ compensation and remuneration of directors paid and the amounts recognized in the consolidated financial statements for the years ended December 31, 2019 and 2018.

Information on the employees’ compensation and remuneration of directors resolved by the Group’s board of directors is available at the Market Observation Post System website of the Taiwan Stock Exchange.

22. INCOME TAXES RELATING TO CONTINUING OPERATIONS

(1)Income tax recognized in profit or loss

Major components of income tax expense are as follows:

Current tax In respect of the current period Adjustments for prior year Deferred tax In respect of the current period Income tax expense recognized in profit or loss	For the Three Months Ended September 30, 2020 $ 24,531 - 2,234 $ 26,765	For the Three Months Ended September 30, 2019 $ 23,613 - ( 10,711) $ 12,902	For the Nine Months Ended September 30, 2020 $ 86,464 330 3,220 $ 90,014	For the Nine Months Ended September 30, 2019	For the Nine Months Ended September 30, 2019
		(		(	$ 67,919 - 5,397) $ 62,522

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(2)Income tax assessment

The Company and subsidiaries’ income tax returns have been assessed by the Tax Authority as follows:

Tax Authority as follows:
Co. Name The company Zotech technology Co., Ltd. Zerone Win Investment Co., Ltd. WingWill International Co., Ltd. PetaCom technology Co., Ltd.	Year of Assessment
	2018 2018 2018 2018 2018

23. EARNINGS PER SHARE

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

Net Profit for the Period

	Net Profit for the Period Effect of potentially dilutive ordinary shares: Convertible bonds Earnings in computation of diluted earnings per share Shares Weighted average number of ordinary shares outstanding for basic earnings per share Effect of potentially dilutive ordinary shares: Convertible bonds Employees’ Compensation Employee stock options Restricted stock awards Weighted average number of ordinary shares outstanding for diluted earnings per share	For the Three Months Ended September 30, 2020 $ 115,138 - $ 115,138 For the Three Months Ended September 30, 2020 124,524 - 477 3,027 371 128,399	For the Three Months Ended September 30, 2019 $ 52,323 - $ 52,323 For the Three Months Ended September 30, 2019 123,388 - 387 2,530 312 126,617	For the Nine Months Ended September 30, 2020 $ 349,978 - $ 349,978 For the Nine Months Ended September 30, 2020 124,245 - 607 2,734 450 128,036	For the Nine Months Ended September 30, 2019	For the Nine Months Ended September 30, 2019
					$ 237,067 15 $ 237,082 For the Nine Months Ended September 30, 2019
						123,236 74 672 1,982 119 126,083

If the Group offered to settle the compensation or bonuses paid to employees in shares or cash, the Group assumed that the entire amount of the compensation or bonuses will be settled in shares, and the resulting potential shares were include d in the weighted average number of shares outstanding used in the computation of diluted earnings per share, as the effect is dilutive. Such dilu tive effect of the potential shares is included in the computation of diluted earnings per share until the number of shares to be distributed to employees is resolved in the following year.

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24. SHARE - BASED PAYMENT ARRANGEMENTS

(1)Employee Share Option Plan

; Qualified employees of the Company and its subsidiaries were granted 1,000, 1,860, 2000 and 2,000 options in August 2015, September 2016, January 2018 and September 2018. Each option entitles the holder with the right to subscri be for one thousand ordinary shares of the Company. The options granted are valid for 6 years and exercisable at certain percentage s after the second anniversary from the grant date. The options were granted at an exercise price equal to the closing price of the Company’s ordinary shares at the grant date. For any subsequent changes in the Company’s ordinary shares, the exercise price is adjusted accordingly.

Information on employee share options is as follows:

Employee Stock options Balance at January 1 Options exercised Options forfeited Outstanding options, at September 30 Options exercisable, at September 30	For the Nine Months Ended September 30,2020 Number of Options (In Thousands of Units) Weighted Average Exercise Price (NT$) 5,653 $ 17.18 ( 649 ) 14.39 - - 5,004 16.48 2,246	For the Nine Months Ended September 30,2019	For the Nine Months Ended September 30,2019
	Number of Options (In Thousands of Units) 5,653 ( 649 ) - 5,004 2,246	Number of Options (In Thousands of Units) 6,468 ( 333 ) ( 33) 6,102 1,422	Weighted Average Exercise Price (NT$)
	(	( (	$ 17.68 13.48 13.55 16.93

Information on outstanding options at the end of reporting period is as follows:

follows:	follows:
September 30, 2020		December 31, 2019 Range of Exercise Price(NT$) Weighted- Over-Age Remaining Contractual Life(Years) $ 12.40`（`Note`）` 1.67 14.20`（`Note`）` 2.68 17.80`（`Note`）` 4.01 19.50`（`Note`）` 4.67	September 30, 2019
Range of Exercise Price(NT$)	Weighted- Over-Age Remaining Contractual Life(Years)	Range of Exercise Price(NT$)	Range of Exercise Price(NT$)	Weighted- Over-Age Remaining Contractual Life(Years)
$ 11.70`（`Note`）` 13.40`（`Note`）` 16.80`（`Note`）` 18.40`（`Note`）`	0.92 1.93 3.26 3.92	$ 12.40`（`Note`）` 14.20`（`Note`）` 17.80`（`Note`）` 19.50`（`Note`）`	$ 12.40`（`Note`）` 14.20`（`Note`）` 17.80`（`Note`）` 19.50`（`Note`）`	1.92 2.93 4.26 4.92

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

The Group adopts BOPM and Black-Scholes price model to evaluate inputs of stock options in September, 2018, January, 2018, September, 2016 and August, 2015 as follows:

as follows:
Securities price of the vested date Exercised price Foreseeable volatility rate Duration Foreseeable dividend rate No risk rates	September 2018 20.65 Dollars 20.65 Dollars 32.96% 6 Years 0% 0.72%	January 2018 19.85 Dollars 19.85 Dollars 33.81% 6 Years 0% 0.74%	September 2016 16.95 Dollars 16.95 Dollars 38.26% 6 Years 0% 0.56%	August 2015
				15.65 Dollars 15.65 Dollars 39.14%~40.47% 4~5 Years 0% 0.77%~0.87%

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The compensation cost recognized were $1,480 thousand, $2,855 thousand, $5,413 thousand and $8,715 thousand for the three and nine months ended September 30, 2020 and 2019, respectively.

(2)Restricted stock awards

The shareholders meeting of the company, on June 11, 2018, resolved to issue restricted stock awards amounting to NT$7,000 thousand, consisting of 700 thousand shares, respectively, par value in NT$10, the subscription price is NT$0(The issue price is NT$ 0), and authorized the Board to decide the issue price at the issuance date. The Board resolved to issue NT$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 RSA 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 RSA, 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 RSA, 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 RSA, 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 RSA, and who personal performance have met with the criteria listing of 75 scores and above, will be eligible for vesting of an installment of 25% of the shares.

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

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

Compensation costs by issuance of restricted stock awards recognized were NT$721 thousand, NT$2,043 thousand, NT$4,367 thousand and NT$2,724 thousand for the three and nine months ended September 30, 2020 and 2019. As of September 30, 2020 and 2019, unearned employee benefit totaled NT$6,022 thousand and NT$12,432 thousand, accounted for as the decrease in other equity.

25. CAPITAL RISK MANAGEMENT

The Group engages as a distributor of software, without any plans of imposed capital requirements at present or in the future. The Group 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 Group periodically reviews the policy of capital risk management, for the purpose of seeking a steady and conservative policy.

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

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

26. 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 consolidated financial statements approxima te or cannot be measured their fair values:

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Financial Assets Financial assets at amortized cost `－`Foreign corporate bonds	September 30, 2020	September 30, 2020	December 31, 2019	December 31, 2019	September 30, 2019	September 30, 2019
	Carrying Amount	Fair Value	Carrying Amount	Fair Value	Carrying Amount	Fair Value
	$ 61,149	$ 62,464	$ 63,566	$ 64,992	$ 48,648	$ 49,113

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

recurring basis.
A.Fair value hierarchy September 30, 2020 Financial assets measured at FVTPL Convertible bonds Fund beneficiary certification Domestic listed shares Total Financial assets measured at FVTOCI Equity investments `－`Domestic listed shares and emerging market shares `－`Domestic Unlisted shares Total December 31, 2019 Financial assets measured at FVTPL Convertible bonds Domestic listed shares Fund beneficiary certification Total Financial assets measured at FVTOCI Equity investments `－`Domestic listed shares and emerging market shares `－`Domestic Unlisted shares Total	Level 1 $ 22,718 28,392 15,734 $ 66,844 $ 287,319 - $ 287,319 Level 1 $ 31,182 15,041 46,403 $ 92,626 $ 237,587 - $ 237,587	Level 2 $ - - - $ - $ - - $ - Level 2 $ - - - $ - $ - - $ -	Level 3 $ - 8,240 - $ 8,240 $ 10,437 18,743 $ 29,180 Level 3 $ - - 3,079 $ 3,079 $ 10,438 3,743 $ 14,181	Total
				$ 22,718 36,632 15,734 $ 75,084 $ 297,756 18,743 $ 316,499 Total
				$ 31,182 15,041 49,482 $ 95,705 $ 248,025 3,743 $ 251,768

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September 30, 2019

September 30, 2019
Financial assets measured at FVTPL Convertible bonds Fund beneficiary certification Domestic listed shares Total Financial assets measured at FVTOCI Equity investments `－`Domestic listed shares and emerging market shares `－`Domestic Unlisted shares Total		Level 1 $ 40,343 14,950 47,678 $ 102,971 $ 187,651 - $ 187,651		Level 2 $ - - - $ - $ - - $ -		Level 3 $ - - 4,960 $ 4,960 $ 8,841 4,265 $ 13,106		Total
								$ 40,343 14,950 52,638 $ 107,931 $ 196,492 4,265 $ 200,757

There were no transfers between Level 1 and Level 2 for nine months ended September 30, 2020 and 2019, respectively.

B. Valuation techniques and inputs applied for the purpose of measuring Level 2 fair value measurement

fair value measurement
Financial Instruments Derivatives - foreign exchange forward contracts	Valuation Techniques and Inputs
	Discounted cash flow: Future cash flows are estimated based on observable forward exchange rates at the end of the year and contract forward rates, discounted at a rate that reflects the credit risk of various counterparties.

C.Valuation techniques and inputs applied for Level 3 fair value Measurement

The market approach is used to arrive at their fair value, for which, the estimate and assumption regarding relevant information of expe cted present value of profits and losses calculated by held investments , in consideration of liquidity discount, with reference to the listed and emerging market companies and similar companies.

(3)Categories 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 Financial liabilities designated as at FVTPL`－`Held for trading Measured at amortized cost (Note 2)	September 30, 2020 $ 75,084 3,091,277 316,499 - 1,972,674	December 31, 2019 $ 95,705 3,170,472 251,768 - 2,567,775	September 30, 2019
			$ 107,931 3,367,657 200,757 589 2,253,662

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

Note 2:The balances included financial liabilities measured at amortized cost, which comprise short-term loans, trade payable, other payable, and deposits received.
(4)Financial risk management objectives and policies

The Group’s principal financial risk management objective is to manage the market risk, credit risk and liquidity risk relating to the operations, based on related protocols and internal control procedures. The Group’s financial department measures the aforementioned risks based on the Group’s risk appetite, and reports to the board of directors for carrying out relevant policies. A. ;Market risk

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

(A) Foreign currency risk

The Group’s purchases and investments are denominated in foreign currencies. Consequently, the Group 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 Group utilizes derivative financial instruments, such as forward exchange contracts and options, for avoiding foreign currency risks.

The carrying amounts of the Group’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 30.

Sensitivity analysis

The Group’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 th e end of the reporting period for a 5% change in foreign currency ra tes. If interest rates had been 5 % higher/lower, the Group’s net profit for the nine months ended September 30, 2020 and 2019 would increase/decrease by $6,684 thousand and $1,161 thousand, respectively.

(B) Interest rate risk

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

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

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Interest rate risks at fair value `－`Financial assets `－`Financial liabilities Interest rate risks at cash flows `－`Financial assets `－`Financial liabilities	September 30, 2020 $ 526,686 14,936 $ 500,239 -	December 31, 2019 $ 874,635 158,356 $ 231,807 -	September 30, 2019
			$ 780,845 269,637 $ 442,990 100,000

Sensitivity analysis

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

If interest rates had been 50 basis points higher/lower and all other variables were held constant, the Group’s pre-tax profit for the nine months ended September 30, 2020 and 2019 would increase/ decrease by $1,876 thousand and $1,286 thousand, respectively. Exposure is triggered by risks of cash flows of the Group’s variable interest rates of deposits.

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

Sensitivity analysis

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

If equity prices had been 5% higher/lower, pre-tax profit for the nine months ended September 30, 2020 and 2019 would have increased/decreased by NT$3,754 thousand and NT$5,397 thousand, respectively, as a result of the changes in fair value of financial assets at FVTPL, and the other comprehensive income for the nine months ended September 30, 2020 and 2019 would have increased/decreased by NT$15,825 thousand and NT$10,038 thousand, respectively, as a result of the changes in fair value of financial assets at FVTOCI.

B.;Credit risk

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

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

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

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

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Trade receivable consisted of many 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 Group’s concentration of credit risk was mainly in the Group’s five largest customers, which accounted for 36%, 33% and 32% of trade receivable, respectively, as of September 30, 2020, December 31, 2019 and September 30, 2019.

C. ;Liquidity risk

The Group 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 Group’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 Group’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 whi ch the Group may be required to pay, including interest and principal of cash flows.

The following tables detail the bank loans are listed on the earliest date on which the Group may be required to pay without considering the probability of the lending bank executing its rights; other non-derivative financial liabilities are listed at their contract repayment dates.

September 30, 2020

September 30, 2020
Non-derivative financial liabilities No Interest-bearing liabilities Lease liabilities December 31, 2019 Non-derivative financial liabilities No Interest-bearing liabilities Lease liabilities Fixed interest rate liabilities September 30, 2019 Non-derivative financial liabilities No Interest-bearing liabilities Lease liabilities Fixed interest rate liabilities	Less than 1 Year $ 1,971,874 7,620 $ 1,979,494 Less than 1 Year $ 2,416,604 4,617 150,118 $ 2,571,339 Less than 1 Year $ 1,892,492 5,176 360,282 $ 2,257,950	1-5 Years $ - 7,608 $ 7,608 1-5 Years $ - 3,831 - $ 3,831 1-5 Years $ - 4,579 - $ 4,579	5+ Years
			$ - - $ - 5+ Years
			$ - - - $ - 5+ Years
			$ - - - $ -

The operating fund of the Group are sufficient to meet cash flow demand; If the demand exists, it shall be short-term. Thus, bank loans within 1 year are the maximum amounts with available limit of credit. After considering the financial position of the Group, the management does not think the banks will execute their rights of requiring the Group to repay the bank loans.

As of September 30, 2020, December 31, 2019 and September 30, 2019, the Group’s unused short-term credit of limit of the bank were 1,250,000 thousand, 920,000 thousand and 710,000 thousand, respectively.

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The Group’s cash and cash equivalents are sufficient to meet the demand of operating demands; the Group does not apply for the overdraft limit from the bank.

27. TRANSACTIONS WITH RELATED PARTIES

Transactions and balances apply for the profits and losses, revenues and expenses between the Group and its subsidiaries, which were related parties of the Group, had been eliminated on consolidation and are not disclosed in this note. Besides information disclosed elsewhere in the other notes, details of transactions between the Group and other related parties are disclosed as follows.

Compensation of key management personnel

Short-term employee benefits	For the Three Months Ended September 30, 2020 $ 3,287	For the Three Months Ended September 30, 2019 $ 4,610	For the Nine Months Ended September 30, 2020	For the Nine Months Ended September 30, 2020	For the Nine Months Ended September 30, 2019 $ 35,876	For the Nine Months Ended September 30, 2019 $ 35,876
				$ 41,558		$ 35,876

; Salaries of the boarders and other key management personnel are decided by personal performance and economic market trend through the renumeration committee.

28. ASSETS PLEDGED AS COLLATERAL

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

29.;	September 30, 2020 December 31, 2019 September 30, 2019 Property, plant and equipment, Net $ 207,967 $ 209,009 $ 209,356 Pledged Time Deposits(Financial assets at amortized cost `－` non-current) 25,345 18,058 18,287 $ 233,312 $ 227,067 $ 227,643 SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED

COMMITMENTS

a.;As of September 30, 2020, the group opens NT 87,000 thousand of cashier order for payment guaranteed for Microsoft Taiwan Corporation.
b.;As of September 30, 2020, the group opens NT 50,000 thousand of cashier order for payment guaranteed for Microsoft Regional Sales Corporation.

30.;SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN

CURRENCIES

The Group’s significant financial assets and liabilities denominated in foreign currencies aggregated by the foreign currencies other than functional currencies of the entities in the Group and the related exc hange rates between foreign currencies and respective functional currencies were as follows:

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September 30, 2020 Financial assets Monetary items USD Financial liabilities Monetary items USD December 31, 2019 Financial assets Monetary items USD Financial liabilities Monetary items USD September 30, 2019 Financial assets Monetary items USD Financial liabilities Monetary items USD	Foreign Currencies $ 24,018 28,612 Foreign Currencies $ 31,858 45,703 Foreign Currencies $ 36,730 35,982	Exchange Rate 29.10`（`USD:NTD`）` 29.10`（`USD:NTD`）` Exchange Rate 29.980`（`USD:NTD`）` 29.980`（`USD:NTD`）` Exchange Rate 31.04`（`USD:NTD`）` 31.04`（`USD:NTD`）`		Carrying Amount
				$ 698,924 $ 832,609 Carrying Amount
				$ 955,103 $ 1,370,176 Carrying Amount
				$ 1,140,099 $ 1,116,881

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

For the Nine Months Ended September 30,2020 Exchange Rate Net Foreign exchange profit(loss) `（`USD:NTD`）`29.817 $ 661 For the Three Months Ended September 30,2020 Exchange Rate Net Foreign exchange profit(loss) `（`USD:NTD`）`29.450 $ 6,303	For the Nine Months Ended September 30,2019	For the Nine Months Ended September 30,2019	For the Nine Months Ended September 30,2019
	Exchange Rate
Exchange Rate `（`USD:NTD`）`29.450	Exchange Rate	Net Foreign exchange profit(loss) ($ 2,377)
	`（`USD:NTD`）`31.197		$ 2,377)

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31. SEPARATELY DISCLOSED ITEMS

Information about (1) significant transactions and (2) investees:
A. Financing provided to others (Table 1)
B. Endorsements/guarantees provided (None)
C. Marketable securities held (excluding investments in subsidiaries, associate s and joint ventures) (Table 2)
D. Marketable securities acquired or disposed of at costs or prices of at least NT$300 million or 20% of the paid-in capital (None)
E. Acquisition of individual real estate at costs of at least NT$300 million or 20% of the paid-in capital (None)
F. Disposal of individual real estate at prices of at least NT$300 million or 20% of the paid-in capital (None)
G. Total purchases from or sales to related parties amounting to at least NT$100 million or 20% of the paid-in capital (None)
H. Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital (None)
I. Trading in derivative instruments (None)
J. Other: Intercompany relationships and significant intercompany transactions (Table 4)
K. Information on investees (Table 3)
(3)Information on investment in Mainland China ：
A. Information on any investee company in mainland China, showing the name, principal business activities, paid-in capital, method of investment, inward and outward remittance of funds, ownership percentage, net income of investees, investment income or loss, carrying amount of the investment at the end of the year, repatriations of investment income, and limit on the amount of investment in the mainland China area(Table 5)
B. Any of the following significant transactions with investee companies in mainland China, either directly or indirectly through a third party, and their prices, payment terms, and unrealized gains or losses: None.
(4)Information of major shareholder: List of all shareholders with ownership of 5 percent or greater showing the names and the number of shares and percentage of ownership held by each shareholder(Table 6)

32. SEGMENT INFORMATION

The management monitors the operating results focusing on the types of products and services acquired or provided of its business units separately for the purpose of making decisions about resource allocation and performance assessment. The department of the Group’s business division of brands distribution or others shall be reported.

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(1)Segments revenue & operating results

The following was an analysis of the Group’s revenue and results from continuing operations by reportable segments:

January 1, 2020 to September 30, 2020 Revenues from external customers Inter-segment revenues Segment revenues Consolidated revenues Segment profit (loss) General administration division costs and remuneration of directors Interest income Other income Other profit (loss) Financial costs Net income before tax January 1, 2019 to September 30, 2019 Revenues from external customers Inter-segment revenues Segment revenues Consolidated revenues Segment profit (loss) General administration division costs and remuneration of directors Interest income Other income Other profit (loss) Net gain/(loss) on derecognition of financial assets at amortized cost Financial costs Net income before tax	The business division of brands distribution $ 7,485,310 - $ 7,485,310 $ 518,039 $ 6,418,375 11,823 $ 6,430,198 $ 394,185		Other $ 113,231 26,951 $ 140,182 $ 1,763) $ 62,216 2,247 $ 64,463 $ 9,308)	Eliminations $ - ( 26,951) ($ 26,951) $ - $ - ( 14,070) ($ 14,070) $ -		Total
		( (		( ( ( (	$ 7,598,541 - 7,598,541 $ 7,598,541 $ 516,276 ( 107,562 ) 15,368 13,353 2,944 ( 2,068) $ 438,311 $ 6,480,591 - 6,480,591 $ 6,480,591 $ 384,877 ( 120,665 ) 17,463 7,796 6,473 3,745 ( 1,553) $ 298,136

Segment profit represents the profit before tax earned by each segment without allocation of central administration costs and directors’ salaries, dividend income, interest income, gains or losses on disposal of property, plant and equipment, gains or losses on disposal of financial instruments, exchange gains or losses, valuation gains or losses on financial instr uments, finance costs and income tax expense. This was the measure reported to the chief operating decision maker for the purpose of resource allocation and assessment of segment performance.

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(2)Total segment assets and liabilities

The assets and liabilities of the Group haven’t been provided to the operating management personnel, hence valuation number of assets and liabilities shall not be recovered.

(3)Revenue from major products and services

The following is an analysis of the Group’s revenue from con tinuing operations from its major products and services:

IT Infrastructure Network & Information Security Cloud Platform & Application Big Data & Application Other	For the Nine Months Ended September 30, 2020 $ 2,216,140 3,578,137 1,434,828 366,445 2,991 $ 7,598,541	For the Nine Months Ended September 30, 2019	For the Nine Months Ended September 30, 2019
			$ 1,683,660 3,233,463 1,136,587 421,418 5,463 $ 6,480,591

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

FOR NINE MONTHS ENDED SEPTEMBER 30, 2020

Table 1 (In Thousands of New Taiwan Dollars, Unless Specified Otherwise)

No. `（`Note 1`）`	Lender	Borrower	Financial Statement Account	Related Party	Highest Balance for the Period `（`Note 2`）`	Ending Balance	Actual Borrowing Amount	Interest Rate (%)	Nature of Financing `（`Note 3`）`	Business Transaction Amount	Reasons for Short-term Financing	Allowance for Impairme nt Loss	Collateral	Collateral	Financing Limit for Each Borrower `（`Note 4`）`	Aggregate Financing Limit`（`Note 5`）`	Note
													Item	Value
0 0	The company The company	Zerone Win Investment Co., Ltd. WingWill international Co., Ltd.	Other receivables from related parties Other receivables from related parties	Yes Yes	$40,000 20,000	$40,000 20,000	$ - -	3% 3%	2 2	$ - $-	Operating Capital Operating Capital	$ - $ -	`－` `－`	$`－` $`－`	$ 253,543 253,543	$ 507,087 507,087

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

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ZERO ONE TECHNOLOGY CO., LTD.AND SUBSIDIARIES MARKETABLE SECURITIES HELD

Table 2 (In Thousands of New Taiwan Dollars, Unless Specified Otherwise)

Holding Company Name	Type and Name of Marketable Securities `（`Note 1`）`	Relationship with the Holding Company	Financial Statement Account	September 30,2020	September 30,2020	September 30,2020		Note
				Number of Shares	Carrying Amount	Percentage of Ownership (%)	Fair Value
The company	Beneficiary certifications KGI Emerging Market Bond 1-5 ETF Fund KGI Kaefer Fund KGI Taiwan Multi-Asset Income Fund KGI Asset-selection Taiwan Fund Corporate bond China Airlines Ltd. `－`6 Convertible Corporate Bonds Tong Ming Enterprise Co., Ltd `－`1 Convertible Corporate Bonds Quang Viet Enterprise Co.,Ltd. `－`1 Convertible Corporate Bonds Interactive Digital Technologies Inc.`－`1 Convertible Corporate Bonds CSBC Corporation, Taiwan `－` 1 Convertible Corporate Bonds QST International Corp.`－`4 Convertible Corporate Bonds Taiwan Union Technology Corporation `－`3 Convertible Corporate Bonds Lion Travel Service Co., Ltd `－`1 Convertible Corporate Bonds Bonny Worldwide Limited `－` 1 Convertible Corporate Bonds M.J. International Co., Ltd. `－` 1 Convertible Corporate Bonds Browave Corporation `－`2 Convertible Corporate Bonds	`－` `－` `－` `－` `－` `－` `－` `－` `－` `－` `－` `－` `－` `－` `－`	Financial assets at FVTPL－ current Financial assets at FVTPL－ non-current Financial assets at FVTPL－ non-current Financial assets at FVTPL－ non-current Financial assets at FVTPL－ current Financial assets at FVTPL－ current Financial assets at FVTPL－ current Financial assets at FVTPL－ current Financial assets at FVTPL－ current Financial assets at FVTPL－ current Financial assets at FVTPL－ current Financial assets at FVTPL－ current Financial assets at FVTPL－ current Financial assets at FVTPL－ current Financial assets at FVTPL－ current	65,000 170,199 1,198,020 500,325 30`（`Units`）` 10`（`Units`）` 30`（`Units`）` 10`（`Units`）` 25`（`Units`）` 41`（`Units`）` 30`（`Units`）` 10`（`Units`）` 5`（`Units`）` 20`（`Units`）` 10`（`Units`）`	$ 2,514 3,208 12,244 5,032 2,986 999 3,079 1,085 2,738 4,059 3,195 973 530 2,074 1,000	- - - - - - - - - - - - - - -	$ 2,514 3,208 12,244 5,032 2,986 999 3,079 1,085 2,738 4,059 3,195 973 530 2,074 1,000

（ Continued ）

38 -

Holding Company Name	Type and Name of Marketable Securities `（`Note 1`）`	Relationship with the Holding Company	Financial Statement Account	September 30,2020	September 30,2020	September 30,2020
				Number of Shares	Carrying Amount	Percentage of Ownership (%)	Fair Value
The company	Barclays Bank Corporate Bond (USD) PCA Life Assurance Co., Ltd. Corporate Bond (USD) AT&T Corporate Bond (USD) Securities Actron Technology Corporation Cathay Financial Holding Co., Ltd.`－` Preferred Share A Union Bank of Taiwan`－`Preferred Share A K Way Information Corporation China Electric Mfg. Corporation Asix Electronics Corporation	`－` `－` `－` `－` `－` `－` Note 3 `－` `－` `－` `－` `－` `－` `－` `－` `－` `－` `－`	Financial assets at amortized cost`－`non-current Financial assets at amortized cost`－`non-current Financial assets at amortized cost`－`non-current Financial assets at FVTPL－ current Financial assets at FVTPL－ non-current Financial assets at FVTPL－ non-current Financial assets at FVTOCI`－` non-current Financial assets at FVTOCI`－` non-current Financial assets at FVTOCI`－` non-current Financial assets at FVTOCI`－` non-current Financial assets at FVTOCI`－` non-current Financial assets at FVTOCI`－` non-current Financial assets at FVTOCI`－` non-current Financial assets at FVTOCI`－` non-current Financial assets at FVTOCI`－` non-current Financial assets at FVTOCI`－` non-current Financial assets at FVTOCI`－` non-current Financial assets at FVTOCI`－` non-current	5`（`Units`）` 10`（`Units`）` 5`（`Units`）` 15,000 166,000 80,000 490,000 2,689,200 81,066 1,111,563 175,000 1,500,000 134,000 70,000 400,000 240,000 90,000 230,000	$ 15,239 29,883 16,027 1,241 10,325 4,168 16,660 29,985 2,874 10,437 3,743 15,000 8,335 3,647 25,000 12,744 5,841 14,398	- - - - - - 1.60 0.83 0.16 2.72 1.68 3.75 - - - - - -	$ 15,925 29,478 17,061 1,241 10,325 4,168 16,660 29,985 2,874 10,437 3,743 15,000 8,335 3,647 25,000 12,744 5,841 14,398
	Promaster Technology Corp. Unex Technology Corporation Ta Chang Financial Holding Co.,Ltd.
	Cathay Financial Holding Co., Ltd.`－` Preferred Share A Union Bank of Taiwan`－`Preferred Share A Fubon Financial Holding Co., Ltd.`－` Preferred Share B Taishin Financial Holding Co., Ltd.`－` Preferred Share E CTBC Financial Holding Co., Ltd.`－` Preferred Share B
	Cathay Financial Holding Co., Ltd.`－` Preferred Share B

（ Continued ）

39 -

Holding Company Name	Type and Name of Marketable Securities `（`Note 1`）`	Relationship with the Holding Company	Financial Statement Account	September 30,2020	September 30,2020	September 30,2020		Note
				Number of Shares	Carrying Amount	Percentage of Ownership (%)	Fair Value
The company Zerone Win Investment Co., Ltd. Petacom Technology Co., Ltd. Zotech Co., Ltd.	Kwong Lung Enterprise Co., Ltd. `－` Preferred Share A WPG Holdings Limited. `－`Preferred Share A United Orthopedic Corporation `－` Preferred Share A QST International Corp. `－`Preferred Share A Chailease Holding Company Limited`－` Preferred Share A Miiicasa Holdings (Cayman) Inc. Duofu Co., Ltd. Jotangi Technology Co., Ltd. Securities WPG Holdings Limited. `－`Preferred Share A Shin Kong Financial Holding Co., Ltd. `－`Preferred Share A Chailease Holding Company Limited`－` Preferred Share A Tatung System Technologies Inc. Beneficiary certifications Taishin 1699 Money Market Fund Securities WPG Holdings Limited. `－`Preferred Share A	`－` `－` `－` `－` `－` `－` `－` `－` `－` `－` `－` `－` `－`	Financial assets at FVTOCI`－` non-current Financial assets at FVTOCI`－` non-current Financial assets at FVTOCI`－` non-current Financial assets at FVTOCI`－` non-current Financial assets at FVTOCI`－` non-current Financial assets at FVTOCI`－` non-current Financial assets at FVTOCI`－` non-current Financial assets at FVTOCI`－` non-current Financial assets at FVTOCI`－` non-current Financial assets at FVTOCI`－` non-current Financial assets at FVTOCI`－` non-current Financial assets at FVTOCI`－` non-current Financial assets at FVTPL－ current Financial assets at FVTOCI`－` non-current	270,000 700,000 200,000 150,000 300,000 2,500,000 10,000 796,250 240,000 50,000 89,000 2,000,000 1,000,000 200,000	$ 13,486 35,000 9,200 6,075 29,970 - - - 12,000 2,213 8,891 41,000 13,634 10,000	- - - - - 3.45 0.27 9.32 - - - 2.26 - -	$ 13,486 35,000 9,200 6,075 29,970 - - - 12,000 2,213 8,891 41,000 13,634 10,000

（ Concluded ）

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

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

Note 3 ： Elected as the director of the company on June 10, 2020, and used to be the supervisor of the company.

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ZERO ONE TECHNOLOGY CO., LTD.AND SUBSIDIARIES INFORMATION ON INVESTEES

FOR NINE MONTHS ENDED SEPTEMBER 30, 2020

Table 3 (In Thousands of New Taiwan Dollars)

Investor Company	Investee Company	Location	Main Businesses and Products	Original Investment Amount	Original Investment Amount	As of 30 September 2020	As of 30 September 2020	As of 30 September 2020	Net Income (Loss) of the Investee	Share of Profit (Loss)	Note
				30 September 2020	31 December 2019	Number of Shares	%	Carrying Amount
The Company Zerone Win Investment Co., Ltd.	Zotech Technology Co., Ltd. Navizot Inc. Zerone Win Investment Co., Ltd. Asiaone Holdings Ltd. WingWill International Co., Ltd. PetaCom technology Co., Ltd.	Taipei City Taipei City Taipei City Republic of Seychelles Taipei City Taipei City	Services of telecommunication apparatus Services of telecommunication apparatus Investment Holding company Services of cloud information software Services of distribution of information product	$ 35,000 - 149,000 10,063 25,500 50,000	$ 35,000 10,000 100,000 10,063 7,000 50,000	3,500,000 - 14,900,000 320,000 25,500,000 50,000,000	85.37 - 100.00 100.00 87.93 100.00	$ 40,527 - 138,754 8,512 8,374 41,759	( $ 2,606 ) - ( 3,973 ) ( 879 ) ( 4,137 ) ( 1,736 )	( $ 2,225 ) - ( 3,973 ) ( 879 ) ( 3,189 ) ( 1,736 )	Subsidiary Disposed by the Company in April, 2020 Subsidiary Subsidiary Sub-subsidiary Sub-subsidiary

Note: Please reference table 5 for Information on investment in Mainland China.

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ZERO ONE TECHNOLOGY CO., LTD.AND SUBSIDIARIES INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT INTERCOMPANY TRANSACTIONS FOR NINE MONTHS ENDED SEPTEMBER 30, 2020

Table 4 ; ( In Thousands of New Taiwan Dollars)

Table 4				;	(In Thousands of	(In Thousands of	New Taiwan Dollars)
No. `（`Note 1`）`	Investee Company	Counterparty	Relationship `（`Note 2`）`		Transaction Details
				Financial Statement Accounts	Amount (Note 4)	Payment Terms (Note 5)	% of Total Sales or Assets `（`Note 3`）`
0	The company	WingWill International Co., Ltd. Techone (Shanghai) Co., Ltd.	1 1	Sales revenue Sales revenue	$15,769 5,028	Note 5 Note 5	- -

Note 1 ： Business between the parent and subsidiaries is numbered as follows:

Parent:0.
Subsidiaries are numbered from 1 in order.
Note 2 ： 3 types of relationship between parties is numbered as follows:
Parent to subsidiary.
Subsidiary to parent.
Between subsidiaries.
Note 3 ： Percentage of transaction amounts to consolidated operating revenues or consolidated total assets: If the a ccount is a balance sheet account, it shall be calculated by dividing the ending balance into consolidated total ass ets; if the account is an income statement account, it shall be calculated by dividing the yearly cumulative balance into consolidated operating revenues.
Note 4 ： Only the related parties’ transactions over 5,000 thousand are disclosed.
Note 5 ： Transaction conditions of the related parties are similar to those of customers.
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ZERO ONE TECHNOLOGY CO., LTD.AND SUBSIDIARIES

INFORMATION ON INVESTMENTS IN MAINLAND CHINA FOR NINE MONTHS ENDED SEPTEMBER 30, 2020 Table 5

(In Thousands of New Taiwan Dollars/Foreign Currency)

Investee Company	Main Businesses and Products	Paid-in	Capital	Method of Investment	Accumulated Outward Remittance for Investment from Taiwan as of January 1, 2020	Remittance of Funds	Remittance of Funds	Accumulated Outward Remittance for Investment from Taiwan as of September 30, 2020	Net Income (Loss) of the Investee	% Ownership of Direct or Indirect Investment	Investment Gain (Loss) (Note 2)	Carrying Amount as of September 30, 2020	Accumulated Repatriation of Investment Income as of September 30, 2020	Note
						Outward	Inward
Techone (Shanghai) Co., Ltd.	Services of Network Technology	$ ( RMB	12,807 3,000 )	`（`Note 1`）`	$ -	$ 9,118	$ -	$ 9,118	( $1,172 )	70%	( $ 821 )	$ 8,142	$ -	`－`

Accumulated Outward Remittance for Investments in Mainland China as of September 30,2020			Investment Amount Authorized by the Investment Commission, MOEA			Upper Limit on the Amount of Investments Stipulated by the Investment Commission, MOEA(Note 3)
$ 8,862 (USD 305)			$ 8,862 (USD 305)			$ 1,521,260

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 not reviewed by CPAs on September 30, 2020.

Note 3 ： Determined by sixty percent (60%) of the Company’s consolidated net worth, reviewed by CPAs on September 30, 2020(2,535,433×60% ＝ 1,521,260 ）。

Note 4 ： For foreign currency conversion, income (loss) are converted by the average exchange rate in 2020 Q3. Other amounts are converted into New Taiwan Dollars by the exchange rate on September 30, 2020.

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ZERO ONE TECHNOLOGY CO., LTD.AND SUBSIDIARIES

INFORMATION ON MAJOR SHAREHOLDERS

September 30, 2020

Table 6

Shareholders	Shares	Shares
	Total Shares Owned (In Thousands)	Ownership Percentage
Ceres Investment Co., Ltd. Chia Hsin Lin	9,506,594 9,373,292	7.58% 7.48%

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

44 -

AI assistant

Zero One Technology Co., Ltd. — Interim / Quarterly Report 2020

52262_rns_2020-12-07_878eb0f1-4587-4623-a8bf-e3707bc386d8.pdf

AND SUBSIDIARIES

§TABLE OF CONTENTS§

INDEPENDENT AUDITORS’ REVIEW REPORT

Introduction

Scope of Review

Conclusion

ZERO ONE TECHNOLOGY CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS September 30, 2020, December 31, 2019, and September 30, 2019

ZERO ONE TECHNOLOGY CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME For the nine months ended September 30, 2020 and 2019

ZERO ONE TECHNOLOGY CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY For the nine months ended September 30, 2020 and 2019

ZERO ONE TECHNOLOGY CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS For the nine months ended September 30, 2020 and 2019 (Reviewed, Not Audited)

ZERO ONE TECHNOLOGY CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS For the nine months ended September 30, 2020 and 2019 (Reviewed, Not Audited

1. GENERAL

2. THE DATE AND PROCEDURES OF AUTHORIZATION OF FINANCIAL STATEMENTS

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(4)Other Significant Accounting Policies

A. ;Defined retirement benefits

B. ;Taxation

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

6. CASH AND CASH EQUIVALENTS

8.;FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE

INCOME

9. FINANCIAL ASSETS AT AMORTIZED COST

10. NOTES, TRADE RECEIVABLE AND OVERDUE RECEIVABLES

11. INVENTORIES

13. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

14. PROPERTY, PLANT AND EQUIPMENT

15. LEASE ARRANGEMENTS

16. SHORT - TERM BORROWINGS

17. OTHER PAYABLES

18. BOND PAYABLE

19. RETIREMENT BENEFIT PLANS

20. EQUITY

(2)Capital Surplus

21. NET PROFIT (LOSS) FROM CONTINUING OPERATIONS

(1)Interest income

(5)Depreciation & amortization

Estimate Rate

22. INCOME TAXES RELATING TO CONTINUING OPERATIONS

(2)Income tax assessment

23. EARNINGS PER SHARE

Net Profit for the Period

24. SHARE - BASED PAYMENT ARRANGEMENTS

(2)Restricted stock awards

25. CAPITAL RISK MANAGEMENT

26. FINANCIAL INSTRUMENTS

Sensitivity analysis

Sensitivity analysis

B.;Credit risk

C. ;Liquidity risk

Liquidity & interest rate risk table

September 30, 2020

27. TRANSACTIONS WITH RELATED PARTIES

Compensation of key management personnel

28. ASSETS PLEDGED AS COLLATERAL

COMMITMENTS

30.;SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN

CURRENCIES

31. SEPARATELY DISCLOSED ITEMS

32. SEGMENT INFORMATION

(1)Segments revenue & operating results

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

ZERO ONE TECHNOLOGY CO., LTD.AND SUBSIDIARIES INFORMATION ON INVESTEES

FOR NINE MONTHS ENDED SEPTEMBER 30, 2020

ZERO ONE TECHNOLOGY CO., LTD.AND SUBSIDIARIES INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT INTERCOMPANY TRANSACTIONS FOR NINE MONTHS ENDED SEPTEMBER 30, 2020

ZERO ONE TECHNOLOGY CO., LTD.AND SUBSIDIARIES

INFORMATION ON INVESTMENTS IN MAINLAND CHINA FOR NINE MONTHS ENDED SEPTEMBER 30, 2020 Table 5

ZERO ONE TECHNOLOGY CO., LTD.AND SUBSIDIARIES

INFORMATION ON MAJOR SHAREHOLDERS

Table 6

More from Zero One Technology Co., Ltd.

Zero One Technology Co., Ltd. Interim / Quarterly Report 2020