ZERO ONE - Interim / Quarterly Report 2021

Code：3029

ZERO ONE TECHNOLOGY CO., LTD.

AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS FOR THE

THREE MONTHS ENDED MARCH 31, 2021 AND 2020 AND

INDEPENDENT AUDITORS’ REVIEW REPORT

ADDRESS: 10F., NO.8, LN. 360, SEC. 1, NEIHU RD., TAIPEI CITY. OFFICE NUMBER : +886 2 2656 5656

§TABLE OF CONTENTS§

Contents 1、Cover 2、Table of Contents 3、Independent Auditors’ Review Report 4、Consolidated Balance Sheets 5、Consolidated Statements of Comprehensive Income 6、Consolidated Statements of Changes in Equity 7、Consolidated Statements of Cash Flows 8、Notes to Consolidated Financial Statements (1) General (2) The date and procedures of authorization of financial statements (3) Application of new, amended and revised standards and interpretations (4) Summary of significant accounting policies (5) Critical Accounting judgements and key sources of estimation and uncertainty (6) Explanation of significant accounts (7) Related parties transactions (8) Pledged assets (9) Significant contingent liabilities and unrecognized commitments (10) Foreign-currency-denominated assets and liabilities that have significant influence (11) Additional disclosures A. Information on significant transactions B. Information on investees C. Intercompany relationships and significant intercompany transactions D. Information on investment in mainland China E. Information of major shareholders (12) Segment information	Page No. 1 2 3~4 5 6~7 8 9~10 11 11 11~12 12~13 13 13~29 29 29 30 30 31、 34~37 31、39 31、38 31、40 31、41 32~33	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 Co., Ltd.

Introduction

We have reviewed the accompanying consolidated balance sheets of Zero One Technology Co., Ltd and its subsidiaries (the “Group”）as of March 31, 2021 and 2020, the related consolidated statements of comprehensive income, changes in equity and cash flows for the three months then ended March 31, 2021 and 2020, 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 consolidated financial position of the Group as of March 31, 2021 and 2020, and of its consolidated financial performance and its consolidated cash flows for the three months then ended March 31, 2021 and 2020 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 reviews resulting in this independent auditors' review report are Chien-Liang Liu and Pei-Te Chen.

Deloitte & Touche

Taipei, Taiwan Republic of China April 28, 2021

Notice to Readers

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

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

ZERO ONE TECHNOLOGY CO., LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS March 31, 2021, December 31, 2020, and March 31, 2020 (In Thousands of New Taiwan Dollars)

ASSETS CURRENT ASSETS Cash and cash equivalents (Note 6) Financial assets at fair value through profit or loss (Note 7) Financial assets at fair value through other comprehensive income (Note 8) Financial assets at amortized cost (Note 9) Notes receivable (Note 11) Trade receivables (Note 11) Current tax assets (Note 4) Inventories (Note 12) Other current assets Total current assets NON-CURRENT ASSETS Financial assets at fair value through profit or loss (Note 7) Financial assets at fair value through other comprehensive income (Note 8) Financial assets at amortized cost (Notes 9, 10 and 28) Investment accounted for using equity method (Note 14) Property, plant and equipment (Notes 15 and 28) Right-of-use assets (Note 16) 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 17) Trade payables Other payables (Note 18) Current tax liabilities (Note 4) Lease liabilities (Note 16) Other current liabilities Total current liabilities NON-CURRENT LIABILITIES Deferred tax liabilities (Note 4) Lease liabilities (Note 16) Net defined benefit liabilities (Notes 4 and 19) Other non-current liabilities Total non-current liabilities Total liabilities EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY (Note 20) 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		March 31, 2021 (Reviewed) Amount % $ 779,982 13 482,943 8 - - 153,070 3 363,980 6 2,097,294 36 831 - 1,040,624 18 29,414 1 4,948,138 85 36,052 1 379,119 7 82,734 1 3,700 - 306,276 5 16,927 - 1,347 - 36,946 1 8,328 - 28,072 - 899,501 15 $ 5,847,639 100 $ - - 2,338,591 40 658,529 11 89,028 2 9,510 - 241,097 4 3,336,755 57 20 - 7,799 - 20,288 1 800 - 28,907 1 3,365,662 58 1,263,292 22 481,206 8 219,863 4 - - 425,288 7 645,151 11 80,697 1 2,470,346 42 11,631 - 2,481,977 42 $ 5,847,639 100	March 31, 2021 (Reviewed) Amount % $ 779,982 13 482,943 8 - - 153,070 3 363,980 6 2,097,294 36 831 - 1,040,624 18 29,414 1 4,948,138 85 36,052 1 379,119 7 82,734 1 3,700 - 306,276 5 16,927 - 1,347 - 36,946 1 8,328 - 28,072 - 899,501 15 $ 5,847,639 100 $ - - 2,338,591 40 658,529 11 89,028 2 9,510 - 241,097 4 3,336,755 57 20 - 7,799 - 20,288 1 800 - 28,907 1 3,365,662 58 1,263,292 22 481,206 8 219,863 4 - - 425,288 7 645,151 11 80,697 1 2,470,346 42 11,631 - 2,481,977 42 $ 5,847,639 100	December 31, 2020 (Audited) Amount %	December 31, 2020 (Audited) Amount %		March 31, 2020 (Reviewed)	March 31, 2020 (Reviewed)
		Amount $ 779,982 482,943 - 153,070 363,980 2,097,294 831 1,040,624 29,414 4,948,138 36,052 379,119 82,734 3,700 306,276 16,927 1,347 36,946 8,328 28,072 899,501 $ 5,847,639 $ - 2,338,591 658,529 89,028 9,510 241,097 3,336,755 20 7,799 20,288 800 28,907 3,365,662 1,263,292 481,206 219,863 - 425,288 645,151 80,697 2,470,346 11,631 2,481,977 $ 5,847,639					Amount $ 514,883 66,897 6,300 884,502 279,764 1,818,321 - 1,131,859 10,381 4,712,907 28,447 242,616 89,431 - 311,774 6,564 1,167 45,515 6,362 - 731,876 $ 5,444,783 $ 251,000 1,921,645 477,565 85,023 3,550 174,433 2,913,216 - 3,065 21,347 1,171 25,583 2,938,799 1,248,462 473,245 184,732 16,844 587,633 789,209 13,352) 2,497,564 8,420 2,505,984 $ 5,444,783	%
			13 8 - 3 6 36 - 18 1 85 1 7 1 - 5 - - 1 - - 15 100 - 40 11 2 - 4 57 - - 1 - 1 58 22 8 4 - 7 11 1 42 - 42 100		$ 637,890 12 360,873 7 - - 238,510 4 230,490 4 1,909,941 35 831 - 1,242,141 23 28,402 - 4,649,078 85 35,391 1 339,515 6 69,526 1 - - 308,367 6 13,027 - 1,238 - 37,594 1 7,940 - 10,000 - 822,598 15 $ 5,471,676 100 $ - - 2,245,464 41 246,382 5 59,661 1 7,484 - 215,864 4 2,774,855 51 20 - 5,607 - 20,982 - 800 - 27,409 - 2,802,264 51 1,256,402 23 478,757 9 219,863 4 - - 667,898 12 887,761 16 34,350 1 2,657,270 49 12,142 - 2,669,412 49 $ 5,471,676 100	(		10 1 - 16 5 34 - 21 - 87 - 4 2 - 6 - - 1 - - 13 100 5 35 9 2 - 3 54 - - - - - 54 23 9 3 - 11 14 - 46 - 46 100

The accompanying notes are an integral part of the consolidated financial statements.

ZERO ONE TECHNOLOGY CO., AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME For the three months ended March 31, 2021 and 2020 (Reviewed, Not Audited) (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

For the Three Months Ended March 31	For the Three Months Ended March 31	For the Three Months Ended March 31
2021	% 100 90 10 4 1 - - 5 5 - - - - - - 5 1 4	2020
			%

ZERO ONE TECHNOLOGY CO., AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME For the three months ended March 31, 2021 and 2020 (Reviewed, Not Audited) (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

	For the Three Months Ended March 31	For the Three Months Ended March 31	For the Three Months Ended March 31	For the Three Months Ended March 31
	2021	% 2 - 2 6 4 - 4 6 - 6	2020
	Amount $ 64,414 96) 64,318 $ 179,649 $ 115,828 497) $ 115,331 $ 180,160 511) $ 179,649 $ 0.92 $ 0.90		Amount ( $ 22,069 ) ( 243) ( 22,312) $ 69,397 $ 92,869 ( 1,160) $ 91,709 $ 70,769 ( 1,372) $ 69,397 $ 0.75 $ 0.73	%
( ( (				( 1 ) - ( 1) 3 4 - 4 3 - 3

(Concluded)

The accompanying notes are an integral part of the consolidated financial statements.

ZERO ONE TECHNOLOGY CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY For the three months ended March 31, 2021 and 2020 (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 $ 5,885 ( 1,160 ) ( 212) ( 1,372) - - - - 3,907 $ 8,420 $ 12,142 - ( 497 ) ( 14) ( 511) - - - - - $ 11,631		Total Equity
Share Capital Shares (In Thousand) Issued Capital 124,635 $ 1,246,352 - - - - - - - - - - ( 12 ) ( 120 ) 223 2,230 - - 124,846 $ 1,248,462 125,640 $ 1,256,402 - - - - - - - - - - - - ( 15 ) ( 150 ) 704 7,040 - - 126,329 $ 1,263,292		Capital Surplus $ 470,136 - - - - 1,966 120 1,023 - $ 473,245 $ 478,757 - - - - - ( 871 ) 150 3,170 - $ 481,206		Retained Earnings			Total $ 696,340 92,869 - 92,869 - - - - - $ 789,209 $ 887,761 377,836 ) 115,828 - 115,828 - - - - 19,398 $ 645,151		Other Equity				Total $ 7,476 - 22,100) 22,100) 1,272 - - - - $ 13,352) $ 34,350 - - 64,332 64,332 1,413 - - - 19,398) $ 80,697
								Exchange differences on translating the financial statements of foreign operations $ - - ( 170) ( 170) - - - - - ($ 170) $ 74 - - ( 67) ( 67) - - - - - $ 7	Unrealized gain (loss) on Financial Assets at FVTOCI $ 17,865 - ( 21,930) ( 21,930) - - - - - ($ 4,065) $ 39,577 - - 64,399 64,399 - - - - ( 19,398) $ 84,578		Unearned Employee benefits $ 10,389 ) - - - 1,272 - - - - $ 9,117) $ 5,301 ) - - - - 1,413 - - - - $ 3,888)
Shares (In Thousand) 124,635 - - - - - ( 12 ) 223 - 124,846 125,640 - - - - - - ( 15 ) 704 - 126,329			Legal Reserve $ 184,732 - - - - - - - - $ 184,732 $ 219,863 - - - - - - - - - $ 219,863	Special Reserve $ 16,844 - - - - - - - - $ 16,844 $ - - - - - - - - - - $ -	Unappropriated Earnings $ 494,764 92,869 - 92,869 - - - - - $ 587,633 $ 667,898 ( 377,836 ) 115,828 - 115,828 - - - - 19,398 $ 425,288
( (	( (	(			(	(		( ( ( ( (	( ( ( (	( ( ( (		( ( ( (		( ( (	( ( ( ( ( (	( ( (	$ 2,426,189 91,709 22,312) 69,397 1,272 1,966 - 3,253 3,907 $ 2,505,984 $ 2,669,412 377,836 ) 115,331 64,318 179,649 1,413 871 ) - 10,210 - $ 2,481,977

The accompanying notes are an integral part of the consolidated financial statements.

ZERO ONE TECHNOLOGY CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS For the three months ended March 31, 2021 and 2020 (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 (reversed) recognized on trade receivables Net (gain) loss on fair value changes of financial assets and liabilities at fair value through profit or loss Finance costs Interest income Compensation costs of employee share options Share of loss of associates accounted for using equity method Gain on disposal of property, plant and equipment (Reversal of) write-downs of inventories Net loss on foreign currency exchange Changes in operating assets and liabilities Financial assets mandatorily classified as at fair value through profit or loss Notes receivable Trade receivables Inventories Other current assets Trade payables Other payables Other current liabilities Net defined benefit liabilities Cash generated from operations Income tax (paid) returned Net cash generated from operating activities	For the Three Months Ended March 31	For the Three Months Ended March 31
	2021 $ 145,541 6,034 235 ( 3,828 ) ( 2,296 ) 53 ( 1,024 ) 542 300 - ( 9,079 ) 6,016 ( 120,435 ) ( 133,490 ) ( 180,756 ) 209,907 7,616 82,850 34,846 25,233 ( 694) 67,571 ( 195) 67,376	2020
		$ 116,407 5,718 228 516 3,604 1,070 ( 6,927 ) 3,238 - ( 40 ) 7,997 481 ( 3,243 ) ( 636 ) ( 63,624 ) 179,679 23,228 ( 118,141 ) 95,638 31,361 ( 571) 275,983 591 276,574

(Continued)

ZERO ONE TECHNOLOGY CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS For the three months ended March 31, 2021 and 2020 (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 Purchase of financial assets at amortized cost Proceeds from sale of financial assets at amortized cost Acquisition 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 Interest received Net cash generated from (used in) investing activities CASH FLOWS FROM FINANCING ACTIVITIES Increase in short-term borrowings Repayment of the principal portion of lease liabilities Exercise of employee share options Interest paid Increase in non-controlling interests Net cash generated from financing activities EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH AND CASH EQUIVALENTS HELD IN FOREIGN CURRENCIES NET INCREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD	For the Three Months Ended March 31	For the Three Months Ended March 31
	2021 ( $ 2,428 ) 17,284 ( 178,829 ) 251,151 ( 4,000 ) ( 18,072 ) ( 1,290 ) - ( 388 ) 2,449 65,877 - ( 1,995 ) 10,210 ( 53 ) - 8,162 677 142,092 637,890 $ 779,982	2020
		( $ 19,217 ) - ( 446,063 ) 253,944 - - ( 1,393 ) 40 ( 1,021 ) 8,110 ( 205,600) 101,000 ( 1,689 ) 3,253 ( 1,068 ) 3,907 105,403 3,009 179,386 335,497 $ 514,883 (Concluded)

The accompanying notes are an integral part of the consolidated financial statements.

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ZERO ONE TECHNOLOGY CO., LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 2021 and 2020

(Reviewed, Not Audited)

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

1. GENERAL

Zero One Technology Co., Ltd. (the “Company” or “ZOTC”) was incorporated as a company limited by shares under the Company Act of the Republic of China on June 27, 1980. On January 21, 2000, ZOTC’s shares were listed on the 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 ZOTC.

2. THE DATE AND PROCEDURES OF AUTHORIZATION OF FINANCIAL STATEMENTS

The accompanying consolidated financial statements were reported by the Board of Directors and issued on April 28, 2021.

3. 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, “IFRSs”) endorsed and issued into effect by the Financial Supervisory Commission (FSC).

The initial application of the amendments to the IFRSs endorsed and issued into effect by the FSC did not have a significant effect on the Group’s accounting policies.

(2) IFRSs issued by the IASB but not yet endorsed and issued into effect by the 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 10 and IAS 28 “Sale or Contribution of Assets between an Investor and its Associate or Joint Venture” Amendments to IFRS 16 “Covid-19 Related Rent Concessions beyond 30 June 2021” IFRS 17 “Insurance Contracts” Amendments to IFRS 17 Amendments to IAS 1 “Classification of Liabilities as Current or Non- current” Amendments to IAS 1 “Disclosure of Accounting Policies” Amendments to IAS 8 “Definition of Accounting Estimates” Amendments to IAS 16 “Property, plant and equipment – Proceeds before Intended Use” Amendments to IAS 37 “Onerous Contracts – Cost of Fulfilling a Contract”	Effective Date Announced by the IASB (Note 1)
	January 1, 2022 (Note 2) January 1, 2022 (Note 3) To be determined by IASB April 1, 2021 (Note 8) January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 (Note 6) January 1, 2023 (Note 7) January 1, 2022 (Note 4) January 1, 2022 (Note 5)

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 10 and IAS 28 “Sale or Contribution of Assets
between an Investor and its Associate or Joint Venture”

Amendments to IFRS 16 “Covid-19 Related Rent Concessions beyond
30 June 2021”

IFRS 17 “Insurance Contracts”

Amendments to IFRS 17

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

Amendments to IAS 1 “Disclosure of Accounting Policies”

Amendments to IAS 8 “Definition of Accounting Estimates”

Amendments to IAS 16 “Property, plant and equipment – Proceeds
before Intended Use”

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

Effective Date
Announced by the IASB (Note 1)

January 1, 2022 (Note 2)
January 1, 2022 (Note 3)
To be determined by IASB
April 1, 2021 (Note 8)
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2023 (Note 6)
January 1, 2023 (Note 7)
January 1, 2022 (Note 4)
January 1, 2022 (Note 5)

Note 1: Unless stated otherwise, the above new, revised or amended standards and interpretations are effective for annual reporting periods beginning on or after their respective effective dates.
Note 2: The amendments to IFRS 9 will be 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” will be 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” will be applied retrospectively for annual reporting periods beginning on or after January 1, 2022.
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.
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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.
Note 6: The amendments are effective for annual periods beginning on or after January 1, 2023.
Note 7: The amendments are applicable to changes in accounting estimates and changes in accounting policies that occur on or after the beginning of the annual reporting period beginning on or after January 1, 2023.
Note 8: The amendments are effective for annual periods beginning on or after April 1, 2021 for lessees, the accumulated amounts are recognized at the beginning of the annual reporting period.

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

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(1) Statement of compliance

These 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” endorsed and issued into effect by the FSC. The consolidated financial statements do not present all the disclosures required for a complete set of annual consolidated financial statements prepared under the IFRSs endorsed and issued into effect by the FSC.

(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 present value of defined benefits plans deducts net defined benefit liabilities measured at fair value.

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

A. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities, which can be acquired during measurement date;
B. Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices);
C. Level 3 inputs are unobservable inputs for the asset or liability.

(3) Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Group and the entities controlled by the Group (i.e. its subsidiaries). When necessary, adjustments are made to the financial statements of subsidiaries to ensure their accounting policies are in line with those used by the Group. 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 Group and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.

See Note 13, Tables 4&5 for the detailed information of subsidiaries, the percentage of ownership and main business.

(4) Other Significant Accounting Policies

Except for the following, please refer to the consolidated financial statements for the year ended 2020.

A. Defined benefits of retirement

Pension cost for an interim period is calculated on a year-to-date basis by using the actuarially determined pension cost rate at the end of the prior financial year, adjusted for significant market fluctuations for the current period, and for amendments in significant plans, settlements, or other significant one-off events.

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B. Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax. The interim period income tax expense is accrued using the tax rate that would be applicable to expected total annual earnings, that is, the estimated average annual effective income tax rate applied to the pre-tax income of the interim period.

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

Please refer to the consolidated financial statements for the year ended December 31, 2020 for main sources of critical accounting judgments, estimates and uncertainty assumptions explanations.

6. CASH AND CASH EQUIVALENTS

CASH AND CASH EQUIVALENTS
Cash on hand Checking accounts and demand deposits Cash equivalents Time deposits in banks Repurchase agreements collateralized by bonds		March 31, 2021 $ 268 751,150 - 28,564 $ 779,982	December 31, 2020 $ 213 609,197 - 28,480 $ 637,890		March 31, 2020
					$ 72 86,506 105,697 322,608 $ 514,883

7. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

Financial assets－current Mandatorily measured at FVTPL Domestic convertible bond Domestic listed ordinary shares Fund beneficiary certificates Financial assets－non-current Mandatorily measured at FVTPL Domestic listed preference shares Fund beneficiary certificates		March 31, 2021 $ 14,721 1,740 466,482 $ 482,943 $ 14,515 21,537 $ 36,052	December 31, 2020 $ 15,966 1,785 343,122 $ 360,873 $ 14,403 20,988 $ 35,391		March 31, 2020
					$ 39,557 - 27,340 $ 66,897 $ 14,133 14,314 $ 28,447

8. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

Investments in equity instruments

Investments in equity instruments
Current Domestic investment Listed preference shares Non-current Domestic investment Listed and emerging market ordinary shares Listed preference shares Unlisted shares		March 31, 2021 $ - $ 163,701 197,276 18,142 $ 379,119	December 31, 2020 $ - $ 123,829 197,544 18,142 $ 339,515		March 31, 2020
					$ 6,300 $ 88,756 150,117 3,743 $ 242,616

The investments in those ordinary and preferred shares are in line with the Group’s medium- to long-term strategies and the investment profits are expected to be gained in the long run. The management of the Group 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.

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9. FINANCIAL ASSETS AT AMORTIZED COST

Current Domestic investment Time deposits with original maturities of more than three months (1) Repurchase agreements collateralized by bonds (2) Non-current Domestic investment Pledged time deposit (3) Barclays Bank corporate bond (USD) (4) Prudential plc. corporate bond (USD) (5) AT&T corporate bond (USD) (6)		March 31, 2021 $ 153,070 - $ 153,070 $ 25,561 14,904 29,142 13,127 $ 82,734	December 31, 2020 $ 238,510 - $ 238,510 $ 25,465 14,895 29,166 - $ 69,526		March 31, 2020
					$ 753,930 130,572 $ 884,502 $ 25,346 15,936 31,434 16,715 $ 89,431

(1) As of March 31, 2021, December 31 and March 31, 2020, the market interest rate intervals of time deposit with original maturities of more than three months were 0.63%~0.815%, 0.63%~2.10% and 0.77%~2.10%, respectively.
(2) As of March 31, 2020, the market interest rate intervals of repurchase agreements collateralized by bonds with original maturities of more than three months was 2.00%~2.10%.
(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 Prudential plc.. 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 460 thousand with a coupon rate of 3.65% and USD 553 thousand with a coupon rate of 4.50%, in March 2021 and November 2019, respectively. The purchased bonds of USD 553 thousand in November 2019 were sold in November 2020.
(7) Please refer to Note 10 for relevant credit risk management and impairment assessment information for financial assets at amortized cost.

10. CREDIT RISK MANAGEMENT FOR INVESTMENTS IN DEBT INSTRUCTMENTS

The investments in debt instruments of the Group are mainly financial assets at amortized cost. The strategy that the Group adopts is to invest in debt instruments that are rated as investment grade or higher and have low credit risk for the purpose of impairment assessment. The credit rating information is provided by external independent agencies.

The Group consistently monitors changes in the credit risks of the invested debt instruments by tracking ratings and relevant information, and reviews the yield curve of bonds, material information of the bond-issuers, etc., so as to evaluate if there is a significant increase in the debt instruments since initial recognition.

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

14 -

11. NOTES, TRADE RECEIVABLE AND OVERDUE RECEIVABLES

Measured at amortized cost Notes receivable Trade receivable Overdue receivables Deduct: Allowance for impairment loss		March 31, 2021 $ 363,980 2,104,898 1,474 9,078) $ 2,461,274		December 31, 2020 $ 230,490 1,921,373 1,474 12,906) $ 2,140,431		March 31, 2020
	(		(		(	$ 279,764 1,833,531 20,816 36,026) $ 2,098,085

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.

The Group measures the loss allowance for trade receivables at an amount equal to lifetime ECLs. The expected credit losses on trade receivable are estimated using a provision matrix by reference to past default experience of the customer, the customer’s current financial position, and economic conditions of the industry, as well as forecasts of GDP and prospects of the industry. As the Group’s historical data of credit loss indicates that there is no significant difference in terms of the types of loss resulted from different customer groups, therefore, the segregation of customers was not further differentiated in the matrix, and the number of days of trade receivables overdue was used to determine the ratio of the expected credit loss.

The Group writes off an account receivable when there is information indicating that the respective debtor is experiencing severe financial difficulty and there is no realistic prospect of recovery of the receivable. For accounts receivable that have been written off, the 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:

March 31, 2021

March 31, 2021
Not Past Due 1-30 Days Past Due 31-60 Days Past Due 61-90 Days Past Due Gross carrying amount $ 2,464,817 $ 3,116 $ 945 $ - Loss allowance (Lifetime ECLs) ( 6,266) ( 934) ( 404) - Amortized cost $ 2,458,551 $ 2,182 $ 541 $ - December 31, 2020 Not Past Due 1-30 Days Past Due 31-60 Days Past Due 61-90 Days Past Due Gross carrying amount $ 2,138,258 $ 2,869 $ 10,160 $ 576 Loss allowance (Lifetime ECLs) ( 5,895) ( 899) ( 4,344) ( 294) Amortized cost $ 2,132,363 $ 1,970 $ 5,816 $ 282 March 31, 2020 Not Past Due 1-30 Days Past Due 31-60 Days Past Due 61-90 Days Past Due Gross carrying amount $ 2,096,480 $ 4,394 $ 2,509 $ 7,205 Loss allowance (Lifetime ECLs) ( 5,632) ( 1,823) ( 1,143) ( 3,905) Amortized cost $ 2,090,848 $ 2,571 $ 1,366 $ 3,300 The movements of the loss allowance of trade receivable were as follows: For the Three Months Ended March 31, 2021 Balance at January 1 $ 12,906 Add: Net remeasurement of loss allowance - Deduct: Reversal of loss allowance ( 3,828) Balance at March 31 $ 9,078	More Than 90 Days Past Due Total $ 1,474 $ 2,470,352 ( 1,474) ( 9,078) $ - $ 2,461,274 More Than 90 Days Past Due Total $ 1,474 $ 2,153,337 ( 1,474) ( 12,906) $ - $ 2,140,431 More Than 90 Days Past Due Total $ 23,523 $ 2,134,111 ( 23,523) ( 36,026) $ - $ 2,098,085 For the Three Months Ended March 31, 2020 $ 35,510 516 - $ 36,026				Total
				(	$ 2,470,352 9,078) $ 2,461,274 Total
				(	$ 2,153,337 12,906) $ 2,140,431 Total
	(	$
		$

			$ 35,510 516 - $ 36,026

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12. INVENTORIES

NVENTORIES
Raw materials Work in process Finished goods Commodities		March 31, 2021 $ 3,577 3,700 243 1,033,104 $ 1,040,624		December 31, 2020 $ 3,555 2,626 336 1,235,624 $ 1,242,141		March 31, 2020
						$ 3,446 2,423 239 1,125,751 $ 1,131,859

Cost of goods sold for inventories amounted to $2,615,755 thousand and $2,295,936 thousand, respectively, for the three months ended March 31, 2021 and 2020. The cost of goods sold included reversals of inventory writedowns of $9,079 thousand and inventory write-downs of $7,997 thousand for the three months ended March 31, 2021 and 2020. The reversals of inventory write-downs were recognized by disposal of commodities which had been written down.

13. SUBSIDIARIES

(1) Subsidiaries included in the consolidated financial statements

The consolidated entities were as follows:

Investor	Investee	Nature of Activities Manufacturing for computer equipment Investment Holding company Services of cloud & information software Services of distribution of information product Services of Network Technology	Proportion of Ownership (%)	Proportion of Ownership (%)	Proportion of Ownership (%)	Re-mark
			March 31, 2021	December 31, 2020	March 31, 2020 85.37% 100.00% 100.00% 70.00% 100.00% 70.00%
The Company Zerone Win Investment Co., Ltd. Asiaone Holdings Ltd.	Zotech Co., Ltd. Zerone Win Investment Co., Ltd. Asiaone Holdings Ltd. WingWill International Co., Ltd. Petacom Technology Co., Ltd. Techone (Shanghai) Co., Ltd.		85.37% 100.00% 100.00% 87.93% 100.00% 70.00%	85.37% 100.00% 100.00% 87.93% 100.00% 70.00%		A A A A, B A A

  - A. These are not major subsidiaries. The financial statements have not been reviewed by CPAs. The management of the Group holds the view that there is not been any material impact given the fact that the financial statements of the above subsidiaries have not been reviewed by CPAs.

  - B. The shareholding ratio went up to 87.93% as a result of the Group’s participation in the cash capital increase in July 2020.

(2) Subsidiaries excluded from the consolidated financial statements: None.
INVESTMENT ACCOUNTED FOR USING THE EQUITY METHOD

Investments in Associates Individual Insignificant Associate TrustONE Security Inc.		March 31, 2021 $ 3,700		December 31, 2020 $ -	March 31, 2020
					$ -

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Name of Associates TrustONE Security Inc.	Percentage of Equity Holding and Voting Rig h ts	Percentage of Equity Holding and Voting Rig h ts	Percentage of Equity Holding and Voting Rig h ts
	March 31, 2021 32%	December 31, 2020 -	March 31, 2020
			-

The Group invested in TrustOne Security Inc. in February 2021, which engages mainly in the R&D, sale and service of information software, with the investment amount of $4,000 thousand, and share-holding ratio of 32%.

The investment was accounted for using the equity method and the share of profit or loss and other comprehensive income of the invested company was calculated on the basis of the financial statements that have not been reviewed by CPAs. The management of the Group holds the view that the calculations of the financial statements that were not reviewed by the CPAs have not resulted in any material impacts.

15. PROPERTY, PLANT AND EQUIPMENT

PROPERTY, PLANT AND EQUIPMENT
Land Buildings Machinery equipment Office equipment Delivery equipment Other equipment		March 31, 2021 $ 234,892 54,248 194 8,947 860 7,135 $ 306,276	December 31, 2020 $ 234,892 54,703 - 9,246 982 8,544 $ 308,367		March 31, 2020
					$ 234,892 56,064 - 9,468 1,352 9,998 $ 311,774

Except for depreciation recognized, property, plant and equipment of the Group were not significantly increased, disposed nor impaired for the three months ended March 31, 2021 and 2020.

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

Buildings	7-50 Years
Machinery equipment	3 Years
Office equipment	3-5 Years
Delivery equipment	5 Years
Other equipment	2-3 Years

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

16. LEASE ARRANGEMENTS

(1) Right-of-use assets

SE ARRANGEMENTS ight-of-use assets
Carrying amounts of right-of-use assets Buildings Office equipment Additions to right-of-use assets Depreciation charge for right-of-use assets Buildings Office equipment	March 31, 2021 December 31, 2020 $ 16,634 $ 12,683 293 344 $ 16,927 $ 13,027 For the Three Months Ended March 31, 2021 $ 6,226 $ 2,262 51 $ 2,313	December 31, 2020	March 31, 2020 $ 6,070 494 $ 6,564 For the Three Months Ended March 31, 2020		March 31, 2020

				$ - $ 1,637 50 $ 1,687

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(2) Lease liabilities

(2) Lease liabilities	(2) Lease liabilities	(2) Lease liabilities
March 31, 2021 December 31, 2020 Carrying amounts of lease liabilities Current $ 9,510 $ 7,484 Non-current $ 7,799 $ 5,607 Range of discount rate for lease liabilities was as follows: March 31, 2021 December 31, 2020 Buildings 0.94%～4.75% 0.95%～4.75% Office equipment 1.20% 1.20% (3) Other lease information For the Three Months Ended March 31, 2021 Expenses relating to short-term leases $ 111 Expenses relating to low-value asset leases $ 12 Total cash (outflow) for leases ($ 2,171) .SHORT-TERM LOANS March 31, 2021 December 31, 2020 Guaranteed Loan －Line of credit loans $ - $ -			December 31, 2020		March 31, 2020 $ 3,550 $ 3,065 March 31, 2020 1.20% 1.20% For the Three Months Ended March 31, 2020			March 31, 2020
			$ 7,484 $ 5,607 December 31, 2020					$ 3,550 $ 3,065 March 31, 2020
		$				(	$ 61 $ 16 $ 1,787) March 31, 2020
		$
		$

	$ -			$ -				$ 251,000

17. SHORT - TERM LOANS

Interest rate of bank revolving loans was 0.85%~1.00% on March 31, 2020.

18. OTHER PAYABLE

THER PAYABLE
Dividends Payable Salaries and bonuses payable Compensation of employees, remuneration of directors and supervisors payable Others		March 31, 2021 $ 377,836 45,164 44,634 190,895 $ 658,529	December 31, 2020 $ - 91,256 35,420 119,706 $ 246,382		March 31, 2020
					$ - 38,186 35,910 403,469 $ 477,565

19. RETIREMENT BENEFIT PLANS

For the three months ended March 31, 2021 and 2020, the pension expenses of defined benefit plans were $66 thousand and $104 thousand, respectively, and these were calculated based on the pension cost rate determined by the actuarial calculation on December 31, 2020 and 2019, respectively.

20. EQUITY

(1) Ordinary Shares

rdinary Shares
Shares authorized (in thousands of shares) Authorized capital Shares issued and fully paid (in thousands of shares) Issued capital		March 31, 2021 150,000 $ 1,500,000 126,329 $ 1,263,292		December 31, 2020 150,000 $ 1,500,000 125,640 $ 1,256,402		March 31, 2020
						150,000 $ 1,500,000 124,846 $ 1,248,462

The change in share capital is mainly due to the exercise of employee share options, and the issuance (recall) of employee restricted stock awards.

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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 share options May not be used for any purpose Restricted stock awards Employees share options		March 31, 2021 $ 426,111 25,343 - 300 8,426 21,026 $ 481,206	December 31, 2020 $ 418,488 25,343 - 300 8,276 26,350 $ 478,757		March 31, 2020
					$ 410,544 25,343 2,481 300 8,276 26,301 $ 473,245

A. Such capital surplus may be used to offset a deficit; in addition, when ZOTC has no deficit, such capital surplus may be distributed as cash dividends or transferred to share capital (limited to a certain percentage of ZOTC’s capital surplus and once a year).
B. Such capital surplus arises from the effects of changes in ownership interests 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 ZOTC earns profits in a fiscal year, such profit shall first be set aside to pay applicable taxes, offset losses of previous years, then set aside 10% for legal reserve, and also set aside or reverse a special reserve in accordance with the laws and regulations. Should there be any remaining profits, those profits, plus the accumulated undistributed retained earnings from the previous year shall be used first by ZOTC’s board of directors as the basis for proposing a distribution plan of dividends for preferred shares for the same year, any further remaining unappropriated earnings after the distribution of dividends of preferred shares shall be distributed in accordance with the proposal submitted by the board of directors, for approval at the shareholders’ meeting. The distributable dividends and bonuses may be paid in cash after a supermajority resolution of the board of directors, which shall be submitted to the shareholders’ meeting. For the policies on the distribution of employees’ compensation and remuneration of directors and supervisors, refer to employees’ compensation and remuneration of directors in Note 21 (6).

ZOTC adopts a dividend distribution policy whereby only surplus profits of ZOTC shall be distributed to shareholders. Based on the Company’s future capital budget planning and the needs for working capital requirements, as well as taking account into the impact to the extent of the diluted earnings per share and return on equity, the ratio for cash dividends shall not be lower than 10% of the total shareholders’ dividends distributed for the same year.

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

The appropriations of earnings for 2020 and 2019 are as follows:

The appropriations of earnings for 2020 and 2019 are as follows:
Legal reserve Reversal of special reserve Cash dividends Cash dividends per share (NT$)		For Fiscal Year 2020 $ 44,100 $ - $ 377,836 $ 3		For Fiscal Year 2019
			(	$ 35,131 $ 16,844) $ 349,574 $ 2

The cash dividends listed above were approved by the board of directors on February 24, 2021 and February 26, 2020, respectively. The remaining appropriations of earnings for 2019 were approved by the shareholders’ meeting on June 10, 2020. The appropriations of earnings for 2020 are to be presented for approval in the shareholders’ meeting to be held on May 28, 2021 (expected).

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(4) Other equity

A. Exchange differences on translating the financial statements of foreign operations

For the Three Months Ended March 31, 2021 Balance at January 1 $ 74 In respect of the current period Exchange differences on translating the financial statements of foreign operations ( 67) Balance at March 31 $ 7 nrealized gain/(loss) on financial assets at FVTOCI For the Three Months Ended March 31, 2021 Balance at January 1 $ 39,577 In respect of the current period Unrealized gain (loss)－equity instruments 64,399 Cumulative gain (loss) of equity instruments transferred to retained earnings due to disposal ( 19,398) Balance at March 31 $ 84,578	For the Three Months Ended March 31, 2020	For the Three Months Ended March 31, 2020
	$ - ( 170) ($ 170) For the Three Months Ended March 31, 2020
	( (	$ 17,865 21,930 ) - $ 4,065)

B. Unrealized gain/(loss) on financial assets at FVTOCI

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 at January 1 Share-based payment expenses recognized Balance at March 31	For the Three Months Ended March 31, 2021 ( $ 5,301 ) 1,413 ($ 3,888)	For the Three Months Ended March 31, 2020	For the Three Months Ended March 31, 2020
	( (	( (	$ 10,389 ) 1,272 $ 9,117)

21. NET INCOME

(1) Interest Income

Bank deposits Financial assets at amortized cost Others her gains and losses Net foreign exchange profit (loss) Net gain (loss) arising on financial assets measured at FVTPL Gain on disposal of property, plant and equipment	For the Three Months Ended March 31, 2021 $ 43 978 3 $ 1,024 For the Three Months Ended March 31, 2021 $ 10,197 2,296 - $ 12,493	For the Three Months Ended March 31, 2020	For the Three Months Ended March 31, 2020
		$ 618 6,308 1 $ 6,927 For the Three Months Ended March 31, 2020
		( ( (	$ 2,960 ) 3,604 ) 40 $ 6,524)

(2) Other gains and losses

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(3) Finance costs

Interests on bank borrowings Interests on lease liabilities	For the Three Months Ended March 31, 2021 $ - 53 $ 53	For the Three Months Ended March 31, 2020	For the Three Months Ended March 31, 2020
			$ 1,049 21 $ 1,070

(4) Depreciation & amortization

Property, plant and equipment Right-of-use assets Intangible assets An analysis of depreciation by function Operating expenses An analysis of amortization by function Operating expenses	For the Three Months Ended March 31, 2021 $ 3,721 2,313 235 $ 6,269 $ 6,034 $ 235	For the Three Months Ended March 31, 2020	For the Three Months Ended March 31, 2020
			$ 4,031 1,687 228 $ 5,946 $ 5,718 $ 228

(5) Employee benefits expense

Post-employment benefits Defined contribution plans Defined benefit plans (Note 19) Share-based payment Equity-settled Other employee benefits Total employee benefits expense An analysis of employee benefits expense by function Operating costs Operating expenses	For the Three Months Ended March 31, 2021 $ 2,901 66 2,967 542 103,140 $ 106,649 $ 892 105,757 $ 106,649	For the Three Months Ended March 31, 2020 $ 2,500 104 2,604 3,238 80,780 $ 86,622 $ 931 85,691 $ 86,622	For the Three Months Ended March 31, 2020 $ 2,500 104 2,604 3,238 80,780 $ 86,622 $ 931 85,691 $ 86,622
			$ 2,500 104 2,604 3,238 80,780 $ 86,622 $ 931 85,691 $ 86,622

(6) Compensation of employees and remuneration of directors

The Company shall allocate compensation of employees and remuneration of directors and supervisors at the range between 1%~15% and no more than 3% of annual profits during the period, respectively. The estimate of compensation of employees and remuneration of directors for the three months ended March 31, 2021 and 2020 is as follows:

Estimate Rate

Estimate Rate
Compensation of employees Remuneration of directors	For the Three Months Ended March 31, 2021 4.00% 2.00%	For the Three Months Ended March 31, 2020
		4.00% 2.00%

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Amount

Amount
Compensation of employees Remuneration of directors	For the Three Months Ended March 31, 2021 $ 6,143 $ 3,071	For the Three Months Ended March 31, 2020
			$ 5,021 $ 2,510

If there is a change in the amounts after the annual consolidated financial statements are authorized for issue, the differences are recorded as a change in the accounting estimate.

The compensation of employees and the remuneration of directors for the years ended December 31, 2020 and 2019, which were approved by the Company’s board of directors on February 24, 2021 and February 26, 2020, respectively, are as follows:

2019, which were approved by 0, respectively, are as follows:	the Company’s board of directors on	February 24, 2021 and February 26,	February 24, 2021 and February 26,
Compensation of employees Remuneration of directors	2020 Cash Stock $ 23,613 $ - 11,807 -	2019
	Cash	Cash	Stock $ - -
	$ 23,613 11,807	$ 18,911 9,456

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, 2020 and 2019.

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

22. INCOME TAXES

(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 Deferred tax In respect of the current period Income tax expense recognized in profit or loss	For the Three Months Ended March 31, 2021 $ 29,562 648 $ 30,210	For the Three Months Ended March 31, 2020	For the Three Months Ended March 31, 2020
		(	$ 28,497 3,799) $ 24,698

(2) Income tax assessment

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

Company The Company Zotech Co., Ltd. Zerone Win Investment Co., Ltd. WingWill International Co., Ltd. Petacom Technology Co., Ltd	Year of Assessment
	2018 2019 2019 2019 2019

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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
Earnings used in the computation of basic and diluted earnings per share Shares Weighted average number of ordinary shares used in the computation of basic earnings per share Effect of potentially dilutive ordinary shares: Compensation of employees Employee share options Restricted stock awards Weighted average number of ordinary shares outstanding used in the computation of diluted earnings per share	For the Three Months Ended March 31, 2021 $ 115,828 For the Three Months Ended March 31, 2021 125,420 486 2,344 424 128,674	For the Three Months Ended March 31, 2020
		$ 92,869 For the Three Months Ended March 31, 2020
			124,025 572 1,973 378 126,948

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

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 subscribe for one thousand ordinary shares of the Company. The options granted are valid for 6 years and exercisable at certain percentages 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 capital surplus, the exercise price is adjusted accordingly.

Information on employee share options is as follows:

Employee share options Balance at January 1 Options exercised Options forfeited Outstanding options, at March 31 Options exercisable, at March 31	For the Three Months Ended March 31, 2021 Number of Options (In Thousands of Units) Weighted Average Exercise Price (NT$) 4,468 $ 16.70 ( 704 ) 14.50 ( 88) 17.82 3,676 17.10 1,818	For the Three Months Ended March 31, 2020	For the Three Months Ended March 31, 2020
	Number of Options (In Thousands of Units) 4,468 ( 704 ) ( 88) 3,676 1,818	Number of Options (In Thousands of Units) 5,653 ( 223 ) - 5,430 1,443	Weighted Average Exercise Price (NT$)
	( (	(	$ 17.18 14.59 - 17.28

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

March 31,	2021	December 31, 2020	December 31, 2020	March 31, 2020	March 31, 2020
Range of Exercise Price (NT$)	Weighted- Over-Age Remaining Contractual Life (Years)	Range of Exercise Price (NT$)	Weighted- Over-Age Remaining Contractual Life (Years)	Range of Exercise Price (NT$)	Weighted- Over-Age Remaining Contractual Life (Years)
$ 11.70 (Note) 13.40 (Note) 16.80 (Note) 18.40 (Note)	0.42 1.43 2.76 3.42	$ 11.70 (Note) 13.40 (Note) 16.80 (Note) 18.40 (Note)	0.67 1.68 3.01 3.67	$ 12.40 (Note) 14.20 (Note) 17.80 (Note) 19.50 (Note)	1.42 2.43 3.76 4.42

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

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

Securities price of the vested date Exercised price Foreseeable volatility rate Duration Foreseeable dividend rate 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%

The compensation cost (reversed) recognized were ($871) thousand and $1,966 thousand for the three months ended March 31, 2021 and 2020, 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.

24 -

Compensation costs by issuance of restricted stock awards recognized were $1,413 thousand and $1,272 thousand for the three months ended March 31, 2021 and 2020, respectively. As of March 31, 2021 and for the same period in 2020, the unearned employee benefit totaled $3,888 thousand and $9,117 thousand, accounted for as the decrease in other equity.

25. CAPITAL RISK MANAGEMENT

The Group operates as a distributor of software, and has no plans to impose any large capital expenditures presently or in the future. The Group manages its capital to meet requirements of operating funds and dividend expenses, based on scale of the enterprise, and the growth and development of industry perspectives. The Group periodically reviews the policy of capital risk management which is in line with the principle of adopting 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. FINNANCIAL 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 approximate or cannot be measured their fair values:

Financial Assets Financial assets at amortized cost －Foreign corporate bonds	March 31, 2021	March 31, 2021	December 31, 2020	December 31, 2020	March 31, 2020	March 31, 2020
	Carrying Amount	Fair Value	Carrying Amount	Fair Value	Carrying Amount	Fair Value
	$ 57,173	$ 59,632	$ 44,061	$ 45,323	$ 64,085	$ 61,010

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

A. Fair value hierarchy

March 31, 2021

arch 31, 2021
Financial assets measured at FVTPL Convertible bonds Domestic listed shares Fund beneficiary certificates Total Financial assets measured at FVTOCI Equity investments －Domestic listed shares and emerging market shares －Domestic Unlisted shares Total		Level 1		Level 2 $ - - - $ - $ - - $ -		Level 3 $ - - 8,922 $ 8,922 $ 12,092 18,142 $ 30,234		Total
		$ 14,721 16,255 479,097 $ 510,073 $ 348,885 - $ 348,885						$ 14,721 16,255 488,019 $ 518,995 $ 360,977 18,142 $ 379,119

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December 31, 2020

December 31, 2020
Financial assets measured at FVTPL Convertible bonds Domestic listed shares Fund beneficiary certificates Total Financial assets measured at FVTOCI Equity investments －Domestic listed shares and emerging market shares －Domestic Unlisted shares Total March 31, 2020 Financial assets measured at FVTPL Convertible bonds Domestic listed shares Fund beneficiary certificates Total Financial assets measured at FVTOCI Equity investments －Domestic listed shares and emerging market shares －Domestic Unlisted shares Total	Level 1 $ 15,966 16,188 355,581 $ 387,735 $ 309,281 - $ 309,281 Level 1 $ 39,557 14,133 38,745 $ 92,435 $ 234,735 - $ 234,735	Level 2 $ - - - $ - $ - - $ - Level 2 $ - - - $ - $ - - $ -	Level 3 $ - - 8,529 $ 8,529 $ 12,092 18,142 $ 30,234 Level 3 $ - - 2,909 $ 2,909 $ 10,438 3,743 $ 14,181	Total
				$ 15,966 16,188 364,110 $ 396,264 $ 321,373 18,142 $ 339,515 Total

				$ 39,557 14,133 41,654 $ 95,344 $ 245,173 3,743 $ 248,916

There were no transfers between Level 1 and Level 2 for three months ended March 31, 2021 and 2020, respectively.

B. 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 expected 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 companies in the same industry.

(3) Categories of financial instruments

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 Measured at amortized cost (Note 2)	March 31, 2021 $ 518,995 3,498,554 379,119 2,997,920	December 31, 2020 $ 396,264 3,098,473 339,515 2,492,646	March 31, 2020
			$ 95,344 3,598,252 248,916 2,651,381

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.

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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 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 financial risk which the Group needs to manage as a result of operating activities is 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 the end of the reporting period for a 5% change in foreign currency rates. If interest rates had been 5 % higher/lower, the Group’s net profit for the three months ended March 31, 2021 and 2020 would increase/decrease by $34,194 thousand and $2,054 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:

Interest rate risks at fair value －Financial assets －Financial liabilities Interest rate risks at cash flows －Financial assets	March 31, 2021 $ 134,330 17,309 881,188	December 31, 2020 $ 206,574 13,091 739,139	March 31, 2020
			$ 1,274,857 257,615 213,887

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 three months ended March 31, 2021 and 2020 would increase/ decrease by $1,101 thousand and $267 thousand, respectively. Exposure is triggered by risks of cash flows of the Group’s variable interest rates of deposits.

(C) Other price risk

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.

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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 three months ended March 31, 2021 and 2020 would have increased/decreased by $25,950 thousand and $4,767 thousand, respectively, as a result of the changes in fair value of financial assets at FVTPL, and the other comprehensive income for the three months ended March 31, 2021 and 2020 would have increased/decreased by $18,956 thousand and $12,446 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 and financial guarantees 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 are 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 management 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.

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 42%, 33% and 43% of trade receivable, respectively, as of March 31, 2021, December 31, 2020 and March 31, 2020.

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 which the Group may be required to pay, including principal and interest 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 nonderivative financial liabilities are listed at their contract repayment dates.

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March 31, 2021

March 31, 2021
Non-derivative financial liabilities No Interest-bearing liabilities Lease liabilities December 31, 2020 Non-derivative financial liabilities No Interest-bearing liabilities Lease liabilities March 31, 2020 Non-derivative financial liabilities No Interest-bearing liabilities Lease liabilities Fixed rate instrument	Less than 1 Year $ 2,997,120 9,684 $ 3,006,804 Less than 1 Year $ 2,491,846 7,636 $ 2,499,482 Less than 1 Year $ 2,399,210 3,603 251,194 $ 2,654,007	1-5 Years $ - 7,899 $ 7,899 1-5 Years $ - 5,192 $ 5,192 1-5 Years $ - 3,083 - $ 3,083	5+ Years
			$ - - $ - 5+ Years
			$ - - $ - 5+ Years

			$ - - - $ -

The operating funds of the Group are sufficient to meet the cash flow demand; if the demand exists, it shall be short-term. Therefore, 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 March 31, 2021, December 31, 2020 and March 31, 2020, the Group’s unused short-term credit of limit of the bank were $1,250,000 thousand, $1,250,000 thousand and $969,000 thousand, respectively.

27. RELATED PARTIES TRANSACTIONS

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. Except for information disclosed elsewhere in other notes, details of transactions between the Group and other related parties are disclosed as follows.

Compensation of key management personnel

ompensation of key management personnel
Short-term employee benefits	For the Three Months Ended March 31, 2021 $ 32,465	For the Three Months Ended March 31, 2020
			$ 28,915

Salaries of the board members and other key management personnel are determined by personal performance and economic market trend through the renumeration committee.

28. PLEDGED ASSETS

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

ported commodities:
Property, plant and equipment, Net Pledged Time Deposits(Financial assets at amortized cost－non-current)		March 31, 2021 $ 207,273 25,561 $ 232,834	December 31, 2020 $ 207,620 25,465 $ 233,085		March 31, 2020
					$ 208,662 25,346 $ 234,008

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29. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

(1) As of March 31, 2021, the group opens NT$ 87,000 thousand of cashier order for payment guaranteed for Microsoft Taiwan Corporation.
(2) As of March 31, 2021, the group opens NT$ 50,000 thousand of cashier order for payment guaranteed for Microsoft Regional Sales Corporation.

30. ; FOREIGN - CURRENCY - DEMONINATED ASSETS AND LIABILITIES THAT HAVE

SIGNIFICANT INFLUENCE

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 exchange rates between foreign currencies and respective functional currencies were as follows:

March 31, 2021

Financial assets Monetary items USD Financial liabilities Monetary items USD December 31, 2020 Financial assets Monetary items USD Financial liabilities Monetary items USD March 31, 2020 Financial assets Monetary items USD Financial liabilities Monetary items USD	Foreign Currencies $ 21,139 45,105 Foreign Currencies $ 12,526 41,312 Foreign Currencies $ 43,075 44,434	Exchange Rate 28.535 (USD:NTD) 28.535 (USD:NTD) Exchange Rate 28.48 (USD:NTD) 28.48 (USD:NTD) Exchange Rate 30.225 (USD:NTD) 30.225 (USD:NTD)		Carrying Amount
				$ 603,201 $ 1,287,071 Carrying Amount
				$ 356,740 $ 1,176,566 Carrying Amount
				$ 1,301,942 $ 1,343,018

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

Foreign currencies USD	For the three months ended March 31, 2021 Exchange rate Net Foreign exchange gain (loss) 28.366 (USD:NTD) $ 10,197	For the three months ended March 31, 2021 Exchange rate Net Foreign exchange gain (loss) 28.366 (USD:NTD) $ 10,197	For the three months ended March 31, 2020	For the three months ended March 31, 2020	For the three months ended March 31, 2020
	Exchange rate 28.366 (USD:NTD)		Exchange rate 30.106 (USD:NTD)		Net Foreign exchange gain (loss)
					($ 2,960)

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31. ADDITIONAL DISCLOSURES

(1) Information about significant transactions:
A. Financing provided to others (Table 1)
B. Endorsements/guarantees provided (None)
C. Marketable securities held (excluding investments in subsidiaries, associates 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 3)
(2) Information on investees: (Table 4)
(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 period, 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.
(i) The amount and percentage of purchases and the balance and percentage of the related payables at the end of the period.
(ii) The amount and percentage of sales and the balance and percentage of the related receivables at the end of the period.
(iii) The amount of property transactions and the amount of the resultant gains or losses.
(iv) The balance of negotiable instrument endorsements or guarantees or pledges of collateral at the end of the period and the purposes.
(v) The highest balance, the end of period balance, the interest rate range, and total current period interest with respect to financing of funds.
(vi) Other transactions that have a material effect on the profit or loss for the period or on the financial position, such as the rendering or receiving of services.
(4) Information on major shareholder: List of all shareholders with ownership of 5 percent or greater showing the name, the number of shares and percentage of ownership held by each shareholder. (Table 6)
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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 assessments. The department of the Group’s business division of brands distribution and others shall be reported.

(1) Segments revenue & operating results

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

gments:
For the three months ended March 31, 2021 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 gains and losses Finance costs Share of loss of associates accounted for using equity method Net income before tax For the three months ended March 31, 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 gains and losses Finance costs Net income before tax		The business division of brands distribution $ 2,847,769 - $ 2,847,769 $ 168,001 $ 2,505,956 - $ 2,505,956 $ 156,602		Other $ 47,720 9,882 $ 57,602 $ 1,714 $ 25,851 5,525 $ 31,376 $ 5,095)	Internal write- off $ - ( 9,882) ($ 9,882) $ - $ - ( 5,525) ($ 5,525) $ -		Total
			(		( ( ( (	$ 2,895,489 - 2,895,489 $ 2,895,489 $ 169,715 ( 37,716 ) 1,024 378 12,493 ( 53 ) ( 300 ) $ 145,541 $ 2,531,807 - 2,531,807 $ 2,531,807 $ 151,507 ( 34,491 ) 6,927 58 ( 6,524 ) ( 1,070 ) $ 116,407

Segment profit represents the profit before tax earned by each segment without allocation of central administration costs and directors’ salaries, share of profit or loss of associates, lease 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 instruments, 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 decision maker, hence valuation number of assets and liabilities shall not be disclosed.

(3) Revenue from major products and services

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

IT Infrastructure Network & Information Security Cloud Platform & Application Big Data & Application Other	For the three months ended March 31, 2021 $ 1,034,650 1,258,842 450,738 150,769 490 $ 2,895,489	For the three months ended March 31, 2020	For the three months ended March 31, 2020
			$ 745,404 1,181,875 503,506 100,601 421 $ 2,531,807

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ZERO ONE TECHNOLOGY CO., LTD. AND SUBSIDIARIES

FINANCING PROVIDED TO OTHERS FOR THE THREE MONTHS ENDED MARCH 31, 2021 Table 1

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

No.	Lender	Borrower	Financial Statement Account	Related Party	Maximum Balance for the Period (Note 2)	Ending Balance	Amount Actually Drawn	Interest Rate	Nature for Financing (Note 3)	Transaction Amounts	Reason for Short-term Financing	Allowance for Bad Debt	Collateral	Collateral	Financing Limit for Each Borrower (Note 4)	Aggregate Financing Limit (Note 5)	Note
													Item	Value
0 0	ZOTC ZOTC	Zerone Win Investment Co., Ltd. WinWill 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	$ - -	－－	$ - -	$ 247,035 247,035	$ 494,069 494,069

Note 1：The number column is organized as follows：

(1)Number 0 represents the issuer.

(2)The investee companies are 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 financing limit for each borrower shall not exceed 10% of the lender’s net worth as stated in its latest financial statement audited or reviewed by CPAs. Note 5：Aggregate financing limit shall not exceed 20% of the lender’s net worth as stated in its latest financial statement audited or reviewed by CPAs.

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ZERO ONE TECHNOLOGY CO., LTD. AND SUBSIDIARIES

MARKETABLE SECURITIES HELD MARCH 31, 2021 Table 2

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		March 31,	2021		Note
				Number of Shares	Carrying Amount	Percentage of Ownership (%)	Fair Value
ZOTC	Beneficiary certificates Taishin 1699 Money Market Fund Jih Sun Money Market Fund FSITC Money Market FSITC Taiwan Money Market Prudential Financial Money Market Fund KGI Kaefer Fund KGI Taiwan Multi-Asset Income Fund KGI Taiwan Select-Asset Income Fund Corporate bond Tong Ming Enterprise Co., Ltd.－1st domestic unsecured convertible corporate bonds Quang Viet Enterprise Co., Ltd.－1st convertible corporate bonds M.J. International Co. Ltd.－1st convertible corporate bonds Rossmax International Ltd.－2nd convertible corporate bonds Jentech Precision Industrial Co. Ltd.－3rd convertible corporate bonds Mercuries & Associates Holding, Ltd.－ 1stconvertible corporate bonds	－－－－－－－－－－－－－－	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－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	10,993,924 10,034,989 166,708 6,474,839 1,880,394 170,199 1,198,020 500,325 10 (Units) 30 (Units) 20 (Units) 20 (Units) 25 (Units) 30 (Units)	$ 150,126 150,141 30,002 100,004 30,023 3,556 12,615 5,366 1,022 3,207 2,084 2,230 2,863 3,315	- - - - - - - - - - - - - -	$ 150,126 150,141 30,002 100,004 30,023 3,556 12,615 5,366 1,022 3,207 2,084 2,230 2,863 3,315

(Continued)

35 -

Holding Company Name	Type and Name of Marketable Securities (Note 1)	Relationship with the Holding Company	Financial Statement Account		March 31,	2021		Note
				Number of Shares	Carrying Amount	Percentage of Ownership (%)	Fair Value
ZOTC	Barclays Bank Corporate Bond (USD) Prudential plc. Corporate Bond (USD) AT&T Corporate Bond (USD) Securities Actron Technology Corp. Cathay Financial Holdings Preferred Shares A Union Bank of Taiwan Preferred Shares A K Way Information Corp. China Electric Mfg. Corp. Asix Electronics Corp. Promaster Technology Corp. Unex Technology Corp. Da-Chang Start-Up Investment Co. Ltd. Cathay Financial Holding Co., Ltd. Preferred Shares A Union Bank of Taiwan Preferred Shares A Fubon Financial Holding Co., Ltd. Preferred Shares B Taishin Financial Holding Co., Ltd. Preferred Shares E CTBC Financial Holding Co., Ltd. Preferred Shares B Cathay Financial Holding Co., Ltd. Preferred Shares B	－－－－－ Director of ZOTC －－－－－－－－－－	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 80,000 525,000 2,689,200 15,066 1,157,137 175,000 1,500,000 134,000 70,000 400,000 240,000 90,000 230,000	$ 14,904 29,142 13,127 1,740 10,259 4,256 19,714 34,421 3,028 12,092 3,231 14,911 8,281 3,724 24,880 12,744 5,715 14,329	- - - - - - 1.71 0.83 0.02 2.72 1.68 2.73 - - - - - -	$ 16,346 30,307 12,979 1,740 10,259 4,256 19,714 34,421 3,028 12,092 3,231 14,911 8,281 3,724 24,880 12,744 5,715 14,329

(Continued)

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Holding Company Name	Type and Name of Marketable Securities (Note 1)	Relationship with the Holding Company	Financial Statement Account		March 31,	2021		Note
				Number of Shares	Carrying Amount	Percentage of Ownership (%)	Fair Value
ZOTC Zerone Win Investment Co., Ltd. Petacom Technology Co., Ltd. Zotech Co., Ltd.	Kwong Lung Enterprise Co., Ltd. Preferred Shares A WPG Holdings Limited Preferred Shares A United Orthopedic Corporation Preferred Shares A QST International Corporation Preferred Shares A Chailease Holding Company Limited Class A Preferred Shares Miiicasa Holdings (Cayman) Inc. Duofu Co., Ltd. Jotangi Technology Co., Ltd. Securities WPG Holdings Limited Preferred Shares A Shin Kong Financial Holding Co., Ltd. Preferred Shares A Chailease Holding Company Limited Class A Preferred Shares Tatung System Technologies Inc. LEO Systems, Inc. GrandTech C.G. Systems Inc. Beneficiary certificates Taishin 1699 Money Market Fund Securities WPG Holdings Limited Preferred Shares A	－－－－－－－－－－－－－－－－	Financial assets at FVTOCI－ non-current Financial assets at FVTOCI－ non-current Financial assets at FVTOCI－ non-current Financial assets at FVTOCI－ non-current Financial assets at 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 70,000 1,700,000 20,000 15,000 453,000 200,000	$ 13,851 35,420 9,980 6,915 30,000 - - - 12,144 2,173 7,000 93,160 481 805 6,186 10,120	- - - - - 3.45 0.22 9.32 - - - 1.92 0.02 0.03 - -	$ 13,851 35,420 9,980 6,915 30,000 - - - 12,144 2,173 7,000 93,160 481 805 6,186 10,120

(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 4.

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ZERO ONE TECHNOLOGY CO., LTD.AND SUBSIDIARIES

INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT INTERCOMPANY TRANSACTIONS FOR THE THREE MONTHS ENDED MARCH 31, 2021 Table 3

Table 3
					(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	% of Total Sales or Assets (Note 3)
0	ZOTC	WingWill International Co., Ltd.	1	Sales revenue Trade receivables	$ 6,699 5,268	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：Three types of relationship between parties are numbered as follows:
Parent to subsidiary.
Subsidiary to parent.

3. Between subsidiaries.

Note 3：Percentage of transaction amounts to consolidated operating revenues or consolidated total assets: If the account is a balance sheet account, it shall be calculated by dividing the ending balance into consolidated total assets; if the account is an income statement account, it shall be calculated by dividing the cumulative balance into consolidated operating revenues. Note 4：Only the related parties’ transactions over 5,000 thousand are disclosed.

Note 5：The terms of transactions with intercompany partners are similar to non-related parties.

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ZERO ONE TECHNOLOGY CO., LTD. AND SUBSIDIARIES

INFORMATION ON INVESTEES FOR THE THREE MONTHS ENDED MARCH 31, 2021 Table 4

Table 4
									(In Thousands of New Taiwan Dollars)
Investor	Investee	Location	Main Businesses	Original Investment Amount		As of March 31,2021			Net Income (Loss) of the Investee	Share of Profit (Loss)	Note
				March 31, 2021	December 31, 2020	Number of Shares	%	Carrying Amount
ZOTC ZeroneWin Investment Co., Ltd.	Zotech Co., Ltd. ZeroneWin Investment Co., Ltd. Asiaone Holdings Ltd. WingWill International Co., Ltd. Petacom Technology Co., Ltd. TrustOne Security Inc.	Taipei City Taipei City Republic of Seychelles Taipei City Taipei City Taipei City	Services of telecommunication apparatus Investment Holding company Services of cloud information software Services of distribution of information product R&D, sale and service of information software	$ 35,000 149,000 10,063 25,500 50,000 4,000	$ 35,000 149,000 10,063 25,500 50,000 -	3,500,000 14,900,000 320,000 25,500,000 50,000,000 4,000,000	85.37 100.00 100.00 87.93 100.00 32.00	$ 42,527 201,232 9,252 3,869 41,961 3,700	( $ 810 ) ( 8,018 ) ( 206 ) ( 2,402 ) ( 5,590 ) ( 938 )	( $ 691 ) ( 8,018 ) ( 206 ) ( 2,112 ) ( 5,590 ) ( 300 )	Subsidiary Subsidiary Subsidiary Sub- subsidiary Sub- subsidiary Associate

Note: Please refer to Table 5 for information on investment in mainland China.

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ZERO ONE TECHNOLOGY CO., LTD.

INFORMATION ON INVESTMENTS IN MAINLAND CHINA FOR THE THREE MONTHS ENDED MARCH 31, 2021

Table 5

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, 2021	Remittance of Funds		Accumulated Outward Remittance for Investment from Taiwan as of March 31, 2021	Net Income (Loss) of the Investee	% Ownership of Direct or Indirect Investment	Investment Gain (Loss) (Note 2)	Carrying Amount as of March 31, 2021	Accumulated Repatriation of Investment Income as of March 31, 2021	Note
						Outward	Inward
Techone (Shanghai) Co., Ltd.	Services of Network Technology	$ 13,032 ( RMB 3,000 )		(Note 1)	$ 9,118	$ -	$ -	$ 9,118	( $ 295 )	70%	( $ 206 )	$ 8,890	$ -	－

Accumulated Outward Remittance for Investments in Mainland China as of March 31, 2021			Investment Amount Authorized by the Investment Commission, MOEA			Upper Limit on the Amount of Investments Stipulated by the Investment Commission, MOEA (Note 3)
$ 9,118			$ 9,118			$ 1,482,208

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 March 31, 2021.

Note 3：Determined by sixty percent (60%) of the Company’s net worth, reviewed by CPAs on March 31, 2021 (2,470,346×60%＝1,482,208).

Note 4：For foreign currency conversion, gain (loss) are converted by the average exchange rate in 2021 Q1. Other amounts are converted into New Taiwan Dollars by the exchange rate on March 31, 2021.

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ZERO ONE TECHNOLOGY CO., LTD. AND SUBSIDIARIES

INFORMATION ON MAJOR SHAREHOLDERS MARCH 31, 2021

Table 6

Shareholders	Shares	Shares
	Number of Shares	Ownership Percentage
Chia Hsin Lin Ceres Investment Co.,Ltd.	9,506,594 9,338,292	7.52% 7.39%

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

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For the Three Months Ended March 31	For the Three Months Ended March 31	For the Three Months Ended March 31
2021	% 100 90 10 4 1 - - 5 5 - - - - - - 5 1 4	2020
			%

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ZERO ONE — Interim / Quarterly Report 2021

52262_rns_2021-12-31_e967eff8-578c-439d-a7e5-f8b159cd4e62.pdf

ZERO ONE TECHNOLOGY CO., LTD.

AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS FOR THE

§TABLE OF CONTENTS§

INDEPENDENT AUDITORS’ REVIEW REPORT

Introduction

Scope of Review

Conclusion

Notice to Readers

ZERO ONE TECHNOLOGY CO., LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS March 31, 2021, December 31, 2020, and March 31, 2020 (In Thousands of New Taiwan Dollars)

ZERO ONE TECHNOLOGY CO., AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME For the three months ended March 31, 2021 and 2020 (Reviewed, Not Audited) (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

ZERO ONE TECHNOLOGY CO., AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME For the three months ended March 31, 2021 and 2020 (Reviewed, Not Audited) (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

ZERO ONE TECHNOLOGY CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY For the three months ended March 31, 2021 and 2020 (Reviewed, Not Audited)

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

ZERO ONE TECHNOLOGY CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS For the three months ended March 31, 2021 and 2020 (Reviewed, Not Audited)

ZERO ONE TECHNOLOGY CO., LTD. AND SUBSIDIARIES

1. GENERAL

2. THE DATE AND PROCEDURES OF AUTHORIZATION OF FINANCIAL STATEMENTS

3. APPLICATION OF NEW, AMENDED AND REVISED STANDARDS AND INTERPRETATIONS

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(1) Statement of compliance

(2) Basis of preparation

(3) Basis of consolidation

(4) Other Significant Accounting Policies

B. Taxation

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

6. CASH AND CASH EQUIVALENTS

7. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

8. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

9. FINANCIAL ASSETS AT AMORTIZED COST

10. CREDIT RISK MANAGEMENT FOR INVESTMENTS IN DEBT INSTRUCTMENTS

11. NOTES, TRADE RECEIVABLE AND OVERDUE RECEIVABLES

12. INVENTORIES

13. SUBSIDIARIES

15. PROPERTY, PLANT AND EQUIPMENT

16. LEASE ARRANGEMENTS

(2) Lease liabilities

17. SHORT - TERM LOANS

18. OTHER PAYABLE

19. RETIREMENT BENEFIT PLANS

20. EQUITY

(2) Capital Surplus

(3) Retained earnings and dividend policy

(4) Other equity

C. Unearned employee benefit

21. NET INCOME

(1) Interest Income

(2) Other gains and losses

(3) Finance costs

(4) Depreciation & amortization

(5) Employee benefits expense

(6) Compensation of employees and remuneration of directors

Estimate Rate

22. INCOME TAXES

23. EARNINGS PER SHARE

24. SHARE - BASED PAYMENT ARRANGEMENTS

(1) Employee Share Option Plan

25. CAPITAL RISK MANAGEMENT

26. FINNANCIAL INSTRUMENTS

March 31, 2021

December 31, 2020

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

A. Market risk

(A) Foreign currency risk

Sensitivity analysis

(B) Interest rate risk

Sensitivity analysis

(C) Other price risk

Sensitivity analysis

B. Credit risk

C. Liquidity risk

Liquidity & interest rate risk table

ZERO ONE Interim / Quarterly Report 2021