ZERO ONE - Interim / Quarterly Report 2021

Code：3029

ZERO ONE TECHNOLOGY CO., LTD.

AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS FOR THE

SIX MONTHS ENDED JUNE 30, 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. Information on investment in mainland China D. Information of major shareholders (12) Segment information	Page No. 1 2 3~4 5 6 7 8~9 10 10 10~11 11~12 12 12~28 29 29 29 29~30 30、 33~37 30、38 30~31、 39 31、40 31~32	Financial Report’s Note No. - - - - - - - 1 2 3 4 5 6~25 26 27 28 29 30 30 30 30 31

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 June 30, 2021 and 2020, the related consolidated statements of comprehensive income for the three months ended June 30, 2021 and 2020 and for the six months ended June 30, 2021 and 2020, the consolidated statements of changes in equity and cash flows for the six months then ended, 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 June 30, 2021 and 2020, its consolidated financial performance for the three months ended June 30, 2021 and 2020, and its consolidated financial performance and its consolidated cash flows for the six months ended June 30, 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 August 4, 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 June 30, 2021, December 31, 2020, and June 30, 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 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 27) Investment accounted for using equity method (Note 14) Property, plant and equipment (Notes 15 and 27) 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 Trade payables Other payables (Note 17) 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 18) Other non-current liabilities Total non-current liabilities Total liabilities EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY (Note 19) Share capital Ordinary shares Capital surplus Retained earnings Legal reserve Unappropriated earnings Total retained earnings Other equity Total equity attributable to owners of the Company NON-CONTROLLING INTERESTS Total equity TOTAL		June 30, 2021 (Reviewed) Amount % $ 798,895 14 168,478 3 153,070 3 75,888 1 2,419,014 41 831 - 1,447,000 24 16,426 - 5,079,602 86 37,023 - 338,686 6 96,853 2 2,897 - 305,603 5 14,516 - 2,654 - 42,369 1 8,322 - 7,500 - 856,423 14 $ 5,936,025 100 $ 2,426,243 41 617,068 10 74,066 1 8,641 - 221,426 4 3,347,444 56 138 - 6,205 - 20,032 1 800 - 27,175 1 3,374,619 57 1,264,182 21 482,535 8 219,863 4 555,374 9 775,237 13 28,134 1 2,550,088 43 11,318 - 2,561,406 43 $ 5,936,025 100	June 30, 2021 (Reviewed) Amount % $ 798,895 14 168,478 3 153,070 3 75,888 1 2,419,014 41 831 - 1,447,000 24 16,426 - 5,079,602 86 37,023 - 338,686 6 96,853 2 2,897 - 305,603 5 14,516 - 2,654 - 42,369 1 8,322 - 7,500 - 856,423 14 $ 5,936,025 100 $ 2,426,243 41 617,068 10 74,066 1 8,641 - 221,426 4 3,347,444 56 138 - 6,205 - 20,032 1 800 - 27,175 1 3,374,619 57 1,264,182 21 482,535 8 219,863 4 555,374 9 775,237 13 28,134 1 2,550,088 43 11,318 - 2,561,406 43 $ 5,936,025 100	December 31, 2020 (Audited) Amount %	December 31, 2020 (Audited) Amount %		June 30, 2020 (Reviewed)	June 30, 2020 (Reviewed)
		Amount $ 798,895 168,478 153,070 75,888 2,419,014 831 1,447,000 16,426 5,079,602 37,023 338,686 96,853 2,897 305,603 14,516 2,654 42,369 8,322 7,500 856,423 $ 5,936,025 $ 2,426,243 617,068 74,066 8,641 221,426 3,347,444 138 6,205 20,032 800 27,175 3,374,619 1,264,182 482,535 219,863 555,374 775,237 28,134 2,550,088 11,318 2,561,406 $ 5,936,025					Amount $ 579,172 54,951 705,043 189,187 1,926,305 - 923,472 25,442 4,403,572 30,178 281,458 88,169 - 310,423 9,355 966 40,935 6,007 10,000 777,491 $ 5,181,063 $ 1,955,363 503,451 60,920 5,192 192,638 2,717,564 145 4,216 21,126 800 26,287 2,743,851 1,249,632 475,630 219,863 461,743 681,606 21,402 2,428,270 8,942 2,437,212 $ 5,181,063	%
			14 3 3 1 41 - 24 - 86 - 6 2 - 5 - - 1 - - 14 100 41 10 1 - 4 56 - - 1 - 1 57 21 8 4 9 13 1 43 - 43 100		$ 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			11 1 14 4 37 - 18 - 85 1 5 2 - 6 - - 1 - - 15 100 38 9 1 - 4 52 - - 1 - 1 53 24 9 4 9 13 1 47 - 47 100

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

ZERO ONE TECHNOLOGY CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In Thousands of New Taiwan Dollars, Except Earnings Per Share) (Reviewed, Not Audited)

	For the Three Months Ended June 30 2021 2020 Amount % Amount % $ 2,672,217 100 $ 2,599,718 100 2,387,599 89 2,297,222 89 284,618 11 302,496 11 110,829 4 94,775 4 37,748 2 38,319 1 1,611 - 1,281 - 739 - 336 - 150,927 6 134,711 5 133,691 5 167,785 6 1,585 - 5,248 - 2,734 - 6,005 1 11,098 - 1,996 - 61 ) - ( 527 ) - 803) - - - 14,553 - 12,722 1 148,244 5 180,507 7 31,718 1 38,551 1 116,526 4 141,956 6 40,265 ) ( 1 ) 32,542 1 118 ) - ( 185 ) - - - 60 - 40,383) ( 1) 32,417 1 $ 76,143 3 $ 174,373 7 $ 116,801 4 $ 141,971 6 275) - ( 15) - $ 116,526 4 $ 141,956 6 $ 76,456 3 $ 174,351 7 313) - 22 - $ 76,143 3 $ 174,373 7 $ 0.93 $ 1.15 $ 0.91 $ 1.11	For the Three Months Ended June 30 2021 2020 Amount % Amount % $ 2,672,217 100 $ 2,599,718 100 2,387,599 89 2,297,222 89 284,618 11 302,496 11 110,829 4 94,775 4 37,748 2 38,319 1 1,611 - 1,281 - 739 - 336 - 150,927 6 134,711 5 133,691 5 167,785 6 1,585 - 5,248 - 2,734 - 6,005 1 11,098 - 1,996 - 61 ) - ( 527 ) - 803) - - - 14,553 - 12,722 1 148,244 5 180,507 7 31,718 1 38,551 1 116,526 4 141,956 6 40,265 ) ( 1 ) 32,542 1 118 ) - ( 185 ) - - - 60 - 40,383) ( 1) 32,417 1 $ 76,143 3 $ 174,373 7 $ 116,801 4 $ 141,971 6 275) - ( 15) - $ 116,526 4 $ 141,956 6 $ 76,456 3 $ 174,351 7 313) - 22 - $ 76,143 3 $ 174,373 7 $ 0.93 $ 1.15 $ 0.91 $ 1.11	For the Three Months Ended June 30 2021 2020 Amount % Amount % $ 2,672,217 100 $ 2,599,718 100 2,387,599 89 2,297,222 89 284,618 11 302,496 11 110,829 4 94,775 4 37,748 2 38,319 1 1,611 - 1,281 - 739 - 336 - 150,927 6 134,711 5 133,691 5 167,785 6 1,585 - 5,248 - 2,734 - 6,005 1 11,098 - 1,996 - 61 ) - ( 527 ) - 803) - - - 14,553 - 12,722 1 148,244 5 180,507 7 31,718 1 38,551 1 116,526 4 141,956 6 40,265 ) ( 1 ) 32,542 1 118 ) - ( 185 ) - - - 60 - 40,383) ( 1) 32,417 1 $ 76,143 3 $ 174,373 7 $ 116,801 4 $ 141,971 6 275) - ( 15) - $ 116,526 4 $ 141,956 6 $ 76,456 3 $ 174,351 7 313) - 22 - $ 76,143 3 $ 174,373 7 $ 0.93 $ 1.15 $ 0.91 $ 1.11	For the Three Months Ended June 30 2021 2020 Amount % Amount % $ 2,672,217 100 $ 2,599,718 100 2,387,599 89 2,297,222 89 284,618 11 302,496 11 110,829 4 94,775 4 37,748 2 38,319 1 1,611 - 1,281 - 739 - 336 - 150,927 6 134,711 5 133,691 5 167,785 6 1,585 - 5,248 - 2,734 - 6,005 1 11,098 - 1,996 - 61 ) - ( 527 ) - 803) - - - 14,553 - 12,722 1 148,244 5 180,507 7 31,718 1 38,551 1 116,526 4 141,956 6 40,265 ) ( 1 ) 32,542 1 118 ) - ( 185 ) - - - 60 - 40,383) ( 1) 32,417 1 $ 76,143 3 $ 174,373 7 $ 116,801 4 $ 141,971 6 275) - ( 15) - $ 116,526 4 $ 141,956 6 $ 76,456 3 $ 174,351 7 313) - 22 - $ 76,143 3 $ 174,373 7 $ 0.93 $ 1.15 $ 0.91 $ 1.11		For the	Six Months Ended June 30	Six Months Ended June 30	Six Months Ended June 30
	2021	% 100 89 11 4 2 - - 6 5 - - - - - - 5 1 4 ( 1 ) - - ( 1) 3 4 - 4 3 - 3		2020		2021	% 100 90 10 4 1 - - 5 5 - - - - - - 5 1 4 1 - - 1 5 4 - 4 5 - 5		2020
	Amount $ 2,672,217 2,387,599 284,618 110,829 37,748 1,611 739 150,927 133,691 1,585 2,734 11,098 61 ) 803) 14,553 148,244 31,718 116,526 40,265 ) 118 ) - 40,383) $ 76,143 $ 116,801 275) $ 116,526 $ 76,456 313) $ 76,143 $ 0.93 $ 0.91			Amount $ 2,599,718 2,297,222 302,496 94,775 38,319 1,281 336 134,711 167,785 5,248 6,005 1,996 527 ) - 12,722 180,507 38,551 141,956 32,542 185 ) 60 32,417 $ 174,373 $ 141,971 15) $ 141,956 $ 174,351 22 $ 174,373 $ 1.15 $ 1.11		Amount $ 5,567,706 5,003,354 564,352 223,092 75,464 3,195 3,089) 298,662 265,690 2,609 3,112 23,591 114 ) 1,103) 28,095 293,785 61,928 231,857 24,149 214 ) - 23,935 $ 255,792 $ 232,629 772) $ 231,857 $ 256,616 824) $ 255,792 $ 1.85 $ 1.81			Amount $ 5,131,525 4,593,158 538,367 177,171 72,810 2,733 852 253,566 284,801 12,175 6,063 4,528 ) 1,597 ) - 12,113 296,914 63,249 233,665 10,473 428 ) 60 10,105 $ 243,770 $ 234,840 1,175) $ 233,665 $ 245,120 1,350) $ 243,770 $ 1.89 $ 1.84	%
( ( ( ( ( ( (			( ( (		( ( ( ( ( (			( ( ( ( (		100 89 11 4 1 - - 5 6 - - - - - - 6 1 5 - - - - 5 5 - 5 5 - 5

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 six months ended June 30, 2021 and 2020 (Reviewed, Not Audited)

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

For the six months ended June 30, 2021 and 2020 (Reviewed, Not Audited) (In Thousands of New Taiwan Dollars, Unless Specified	Otherwise)
BALANCE, JANUARY 1, 2020 Appropriation of the 2019 earnings Legal reserve Special reserve Cash dividends – NT $2.0 per share Net profit (loss) for the six months ended June 30, 2020 Other comprehensive income (loss) for the six months ended June 30, 2020, net of income tax Total comprehensive income (loss) for the six months ended June 30, 2020, net of income tax Share based payment transaction – employee restricted stock Share based payment transaction - employee stock option Cancellation of employee restricted stock Issuance of ordinary shares under employee share options Non-controlling interests BALANCE, JUNE 30, 2020 BALANCE, JANUARY 1, 2021 Appropriation of the 2020 earnings Cash dividends – NT $3.0 per share Net profit (loss) for the six months ended June 30, 2021 Other comprehensive income (loss) for the six months ended June 30, 2021, net of income tax Total comprehensive income (loss) for the six months ended June 30, 2021, net of income tax Share based payment transaction –employee restricted stock Share based payment transaction - employee stock option Cancellation of employee restricted stock Issuance of ordinary shares under employee share options Disposals of investments in equity instruments at fair value through other comprehensive income BALANCE, JUNE 30, 2021				Equity Attributable to Owners of the Company											Total $ 2,420,304 - - 249,574 ) 234,840 10,280 245,120 3,646 3,933 - 4,841 - $ 2,428,270 $ 2,657,270 377,836 ) 232,629 23,987 256,616 2,480 94 ) - 11,652 - $ 2,550,088	Non-controlling Interests $ 5,885 - - - ( 1,175 ) ( 175) ( 1,350) - - - - 4,407 $ 8,942 $ 12,142 - ( 772 ) ( 52) ( 824) - - - - - $ 11,318	Total Equity
	Share Capital Shares (In Thousand) Issued Capital 124,635 $ 1,246,352 - - - - - - - - - - - - - - - - ( 12 ) ( 120 ) 340 3,400 - - 124,963 $ 1,249,632 125,640 $ 1,256,402 - - - - - - - - - - - - ( 15 ) ( 150 ) 793 7,930 - - 126,418 $ 1,264,182	Capital Surplus $ 470,136 - - - - - - - 3,933 120 1,441 - $ 475,630 $ 478,757 - - - - - ( 94 ) 150 3,722 - $ 482,535		Retained Earnings			Total $ 696,340 - - 249,574 ) 234,840 - 234,840 - - - - - $ 681,606 $ 887,761 377,836 ) 232,629 - 232,629 - - - - 32,683 $ 775,237		Other Equity				Total $ 7,476 - - - - 10,280 10,280 3,646 - - - - $ 21,402 $ 34,350 - - 23,987 23,987 2,480 - - - 32,683) $ 28,134
								Exchange differences on translating the financial statements of foreign operations $ - - - - - ( 240) ( 240) - - - - - ($ 240) $ 74 - - ( 150) ( 150) - - - - - ($ 76)	Unrealized gain (loss) on financial assets at FVTOCI $ 17,865 - - - - 10,520 10,520 - - - - - $ 28,385 $ 39,577 - - 24,137 24,137 - - - - ( 32,683) $ 31,031		Unearned employee benefits $ 10,389 ) - - - - - - 3,646 - - - - $ 6,743) $ 5,301 ) - - - - 2,480 - - - - $ 2,821)
			Legal Reserve $ 184,732 35,131 - - - - - - - - - - $ 219,863 $ 219,863 - - - - - - - - - $ 219,863	Special Reserve $ 16,844 - ( 16,844 ) - - - - - - - - - $ - $ - - - - - - - - - - $ -	Unappropriated Earnings $ 494,764 ( 35,131 ) 16,844 ( 249,574 ) 234,840 - 234,840 - - - - - $ 461,743 $ 667,898 ( 377,836 ) 232,629 - 232,629 - - - - 32,683 $ 555,374
	( (	(		(	( ( (	( (		( ( ( ( ( (	(	( ( ( (		(		( ( (		( ( ( ( ( (	( ( (	$ 2,426,189 - - 249,574 ) 233,665 10,105 243,770 3,646 3,933 - 4,841 4,407 $ 2,437,212 $ 2,669,412 377,836 ) 231,857 23,935 255,792 2,480 94 ) - 11,652 - $ 2,561,406

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 six months ended June 30, 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 on fair value changes of financial assets and liabilities at fair value through profit or loss Finance costs Interest income Dividend income Compensation costs of share-based payment Share of loss of associates accounted for using equity method Gain on disposal of property, plant and equipment Gain on disposal of investments accounted for using equity method 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 Net cash generated from operating activities	For the Six Months Ended June 30	For the Six Months Ended June 30
	2021 $ 293,785 11,900 578 ( 3,089 ) ( 5,242 ) 114 ( 2,609 ) ( 1,678 ) 2,386 1,103 - - 21,884 9,476 194,261 154,602 ( 508,897 ) ( 229,539 ) 14,535 178,216 ( 4,883 ) 5,562 ( 950) 131,515 ( 52,180) 79,335	2020
		$ 296,914 11,493 429 852 ( 799 ) 1,597 ( 12,175 ) ( 4,101 ) 7,579 - ( 40 ) ( 275 ) 12,734 6,011 11,375 89,941 ( 171,876 ) 382,647 8,567 ( 72,126 ) ( 125,730 ) 49,566 ( 792) 491,791 ( 57,278) 434,513

(Continued)

ZERO ONE TECHNOLOGY CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS For the six months ended June 30, 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 Proceeds from disposal of investments accounted for using equity method Increase in prepayments for investments Payments for property, plant and equipment Proceeds from disposal of property, plant and equipment Increase in refundable deposits Payments for intangible assets Interest received Dividends received Net cash generated from (used in) investing activities CASH FLOWS FROM FINANCING ACTIVITIES Decrease in short-term borrowings Proceeds from guarantee deposits received Repayment of the principal portion of lease liabilities Exercise of employee share options Interest paid Increase in non-controlling interests Net cash generated from (used in) financing activities EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH AND CASH EQUIVALENTS HELD IN FOREIGN CURRENCIES NET INCREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD	For the Six Months Ended June 30	For the Six Months Ended June 30
	2021 ( $ 21,821 ) 56,799 ( 194,501 ) 251,154 ( 4,000 ) - ( 7,500 ) ( 2,654 ) - ( 382 ) ( 980 ) 3,673 - 79,788 - - ( 4,445 ) 11,652 ( 114 ) - 7,093 ( 5,211) 161,005 637,890 $ 798,895	2020
		( $ 19,217 ) - ( 410,019 ) 387,488 - 275 ( 10,000 ) ( 3,419 ) 40 ( 666 ) - 12,451 155 ( 42,912) ( 150,000 ) ( 371 ) ( 3,403 ) 4,841 ( 1,601 ) 4,407 ( 146,127) ( 1,799) 243,675 335,497 $ 579,172

(Concluded)

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

ZERO ONE TECHNOLOGY CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED JUNE 30, 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 approved by the Board of Directors on August 4, 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 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) Amendments to IFRSs endorsed by the FSC for application starting from January 1, 2022

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

Note 1: The amendments to IFRS 9 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 2: The amendments are applicable to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after January 1, 2022.
Note 3: The amendments are applicable to property, plant and equipment that are brought to the location and condition necessary for them to be capable of operating in the manner intended by management on or after January 1, 2021.
Note 4: The amendments are applicable to contracts for which the entity has not yet fulfilled all its obligations on January 1, 2022.
10 -
(3) IFRSs issued by the IASB but not yet endorsed and issued into effect by the FSC

New / Revised / Amended Standards and Interpretations Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets between an Investor and its Associate or Joint Venture” IFRS 17 “Insurance Contracts” Amendments to IFRS 17 Amendments to IAS 1 “Classification of Liabilities as Current or Non- current” Amendments to IAS 1 “Disclosure of Accounting Policies” Amendments to IAS 8 “Definition of Accounting Estimates” Amendments to IAS 12 “Deferred Tax related to Assets and Liabilities arising from a Single Transaction”	Effective Date Announced by the IASB (Note 1)
	To be determined by IASB January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 (Note 2) January 1, 2023 (Note 3) January 1, 2022 (Note 4)

New / Revised / Amended Standards and Interpretations
Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets
between an Investor and its Associate or Joint Venture”

IFRS 17 “Insurance Contracts”

Amendments to IFRS 17

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

Amendments to IAS 1 “Disclosure of Accounting Policies”

Amendments to IAS 8 “Definition of Accounting Estimates”

Amendments to IAS 12 “Deferred Tax related to Assets and Liabilities
arising from a Single Transaction”

Effective Date
Announced by the IASB (Note 1)

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

Note 1: Unless stated otherwise, the above new, revised or amended standards and interpretations are effective for annual reporting periods beginning on or after their respective effective dates.
Note 2: The amendments will be applied prospectively for annual reporting periods beginning on or after January 1, 2023.
Note 3: The amendments are applicable to changes in accounting estimates and changes in accounting policies that occur on or after the beginning of the annual reporting period beginning on or after January 1, 2023.
Note 4: Except that deferred taxes will be recognized for temporary differences associated with lease and decommissioning obligations on January1, 2022, the amendments will be applied prospectively to transactions that occur on or after January 1, 2022.

As of the date the 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

11 -

results in the non-controlling interests having a deficit balance.

See Note 13, Tables 4 and 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.

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

In the application of the Group’s accounting policies, the management is required to make judgments, estimates and assumptions which are based on historical experience and other factors that are not readily apparent from other sources. Actual results may differ from these estimates.

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

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 Repurchase agreements collateralized by bonds		June 30, 2021 $ 270 519,971 278,654 $ 798,895	December 31, 2020 $ 213 609,197 28,480 $ 637,890		June 30, 2020
					$ 114 470,531 108,527 $ 579,172

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		June 30, 2021 $ 2,050 - 166,428 $ 168,478 $ 14,672 22,351 $ 37,023	December 31, 2020 $ 15,966 1,785 343,122 $ 360,873 $ 14,403 20,988 $ 35,391		June 30, 2020
					$ 34,666 1,310 18,975 $ 54,951 $ 14,980 15,198 $ 30,178

12 -

8. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

Investments in equity instruments

Investments in equity instruments
Non-current Domestic investment Listed and emerging market ordinary shares Listed preference shares Unlisted shares		June 31, 2021 $ 113,135 186,838 38,713 $ 338,686	December 31, 2020 $ 123,829 197,544 18,142 $ 339,515		June 31, 2020
					$ 111,117 166,598 3,743 $ 281,458

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.

9. FINANCIAL ASSETS AT AMORTIZED COST

Current Domestic investment Time deposits with original maturities of more than three months (1) Non-current Domestic investment Pledged time deposit (2) Foreign investment Barclays Bank corporate bond (USD) (3) Prudential plc. corporate bond (USD) (4) AT&T corporate bond (USD) (5) Perusahaan Listrik Negara corporate bond (USD) (6)		June 30, 2021 $ 153,070 $ 25,560 14,533 28,373 12,819 15,568 $ 96,853	December 31, 2020 $ 238,510 $ 25,465 14,895 29,166 - - $ 69,526		June 30, 2020
					$ 705,043 $ 25,345 15,623 30,815 16,386 - $ 88,169

(1) As of June 30, 2021, December 31 and June 30, 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) Please refer to Note 27 for more details on financial assets at amortized cost under pledge.
(3) The Group purchased Barclays Bank corporate bond (USD) by USD 527 thousand, with a coupon rate of 4.836%, in August 2019.
(4) The Group purchased Prudential plc. corporate bond (USD) by USD 1,040 thousand, with a coupon rate of 4.875%, in August 2019.
(5) 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.
(6) The Group purchased Perusahaan Listrik Negara corporate bond (USD) by USD 559 thousand, with a coupon rate of 5.25%, in May 2021.
(7) Please refer to Note 10 for relevant credit risk management and impairment assessment information for financial assets at amortized cost.
13 -

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 June 30, 2021, December 31 and June 30, 2020.

11. NOTES, TRADE RECEIVABLE AND OVERDUE RECEIVABLES

Measured at amortized cost Notes receivable Trade receivable Overdue receivables Deduct: Allowance for impairment loss		June 30, 2021 $ 75,888 2,427,356 411 8,753) $ 2,494,902		December 30, 2020 $ 230,490 1,921,373 1,474 12,906) $ 2,140,431		June 30, 2020
	(		(		(	$ 189,187 1,941,851 4,401 19,947) $ 2,115,492

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:

June 30, 2021

June 30, 2021
		Not Past Due	1-30 Days Past Due			31-60 Days Past Due			61-90 Days Past Due		More Days	Than 90 Past Due		Total
Gross carrying amount		$ 2,490,681	$	12,483		$	55		$	25	$	411		$ 2,503,655
Loss allowance (Lifetime ECLs)	(	5,268)	(	3,044)	(		20)	(		10)	(	411)	(	8,753)
Amortized cost		$ 2,485,413	$	9,439		$	35		$	15	$	-		$ 2,494,902
December 31, 2020
		Not Past Due	1-30 Days Past Due			31-60 Days Past Due			61-90 Days Past Due		More Days	Than 90 Past Due		Total
Gross carrying amount		$ 2,138,258	$	2,869		$	10,160		$	576	$	1,474		$ 2,153,337
Loss allowance (Lifetime ECLs)	(	5,895)	(	899)	(		4,344)	(		294)	(	1,474)	(	12,906)
Amortized cost		$ 2,132,363	$	1,970		$	5,816		$	282	$	-		$ 2,140,431

14 -

June 30, 2020

June 30, 2020	June 30, 2020	June 30, 2020	June 30, 2020	June 30, 2020	June 30, 2020
Not Past Due 1-30 Days Past Due 31-60 Days Past Due 61-90 Days Past Due More Than 90 Days Past Due Total Gross carrying amount $ 2,109,030 $ 12,978 $ 8,006 $ 1,024 $ 4,401 $ 2,135,439 Loss allowance (Lifetime ECLs) ( 6,252) ( 4,964) ( 3,775) ( 555) ( 4,401) ( 19,947) Amortized cost $ 2,102,778 $ 8,014 $ 4,231 $ 469 $ - $ 2,115,492 The movements of the loss allowance of trade receivable were as follows: For the Six Months Ended June 30, 2021 For the Six Months Ended June 30, 2020 Balance at January 1 $ 12,906 $ 35,510 Add: Net remeasurement of loss allowance - 852 Deduct: Reversal of loss allowance ( 3,089 ) - Amounts written off ( 1,064) ( 16,415) Balance at June 30 $ 8,753 $ 19,947 .INVENTORIES June 30, 2021 December 31, 2020 June 30, 2020 Raw materials $ 11,933 $ 3,555 $ 7,585 Work in process 1,673 2,626 1,735 Finished goods 580 336 515 Commodities 1,432,814 1,235,624 913,608 Inventory in transit - - 29 $ 1,447,000 $ 1,242,141 $ 923,472						Total
			$
			$

	$			(	$ 35,510 852 - 16,415) $ 19,947 June 30, 2020 $ 7,585 1,735 515 913,608 29 $ 923,472
	$

		$ 3,555 2,626 336 1,235,624 - $ 1,242,141

12. INVENTORIES

Cost of goods sold for inventories amounted to $2,387,599 thousand, $2,297,222 thousand, $5,003,354 thousand and $4,593,158 thousand, respectively, for the three and six months ended June 30, 2021 and 2020. The cost of goods sold included inventory write-downs of $30,963 thousand, $4,737 thousand, $21,884 thousand and $12,734 thousand, respectively, for the three and six months ended June 30, 2021 and 2020.

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 distribution of information product	Proportion of Ownership (%)	Proportion of Ownership (%)	Proportion of Ownership (%)	Re-mark
			June 31, 2021	December 31, 2020	June 31, 2020
The Company Zerone Win Investment Co., Ltd.	Zotech Co., Ltd. Zerone Win Investment Co., Ltd. Asiaone Holdings Ltd. WingWill International Co., Ltd. Petacom Technology Co., Ltd. DigiCosmos Tech. Co., Ltd.		85.37% 100.00% 100.00% 87.93% 100.00% 100.00%	85.37% 100.00% 100.00% 87.93% 100.00% -	85.37% 100.00% 100.00% 70.00% 100.00% -	A A A A, B A A, C

15 -

Investor	Investee	Nature of Activities Services of Network Technology	Proportion of Ownership (%) June 31, 2021 December 31, 2020 June 31, 2020 Re-mark 70.00% 70.00% 70.00% A	Proportion of Ownership (%) June 31, 2021 December 31, 2020 June 31, 2020 Re-mark 70.00% 70.00% 70.00% A
			June 31, 2021
Asiaone Holdings Ltd.	Techone (Shanghai) Co., Ltd.		70.00%	70.00% 70.00% 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 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.

  - C. It was established in May, 2021.

(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. Name of Associates TrustONE Security Inc.
	June 30, 2021 32%	December 31, 2020 -	June 30, 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 impact.

15. PROPERTY, PLANT AND EQUIPMENT

PROPERTY, PLANT AND EQUIPMENT
Land Buildings Office equipment Delivery equipment Other equipment		June 30, 2021 $ 234,892 53,794 8,737 738 7,442 $ 305,603	December 31, 2020 $ 234,892 54,703 9,246 982 8,544 $ 308,367		June 30, 2020
					$ 234,892 55,610 10,078 1,229 8,614 $ 310,423

Except for depreciation recognized, property, plant and equipment of the Group were not significantly increased, disposed nor impaired for the six months ended June 30, 2021 and 2020.

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

Buildings	7-50 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 27.

16 -

16. LEASE ARRANGEMENTS

(1) Right-of-use assets

.LEASE ARRANGEMENTS (1) Right-of-use assets
June 30, 2021 December 31, 2020 Carrying amounts of right-of-use assets Buildings $ 14,273 $ 12,683 Office equipment 243 344 $ 14,516 $ 13,027 For the Three Months Ended June 30, 2021 For the Three Months Ended June 30, 2020 For the Six Months Ended June 30, 2021 Additions to right-of-use assets $ 6,226 Depreciation charge for right- of-use assets Buildings $ 2,349 $ 1,665 $ 4,611 Office equipment 50 51 101 $ 2,399 $ 1,716 $ 4,712 (2) Lease liabilities June 30, 2021 December 31, 2020 Carrying amounts of lease liabilities Current $ 8,641 $ 7,484 Non-current $ 6,205 $ 5,607 Range of discount rate for lease liabilities was as follows: June 30, 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 June 30, 2021 For the Three Months Ended June 30, 2020 For the Six Months Ended June 30, 2021 Expenses relating to short-term leases $ 350 $ 41 $ 461 Expenses relating to low-value asset leases $ 13 $ 10 $ 25 Total cash (outflow) for leases ($ 2,874) ($ 1,790) ($ 5,045) .OTHER PAYABLE June 30, 2021 December 31, 2020 Dividends payable $ 377,836 $ - Salaries and bonuses payable 50,567 91,256 Compensation of employees, remuneration of directors and supervisors payable 54,127 35,420 Others 134,538 119,706 $ 617,068 $ 246,382	June 30, 2020
	$ 8,911 444 $ 9,355 For the Six Months Ended June 30, 2020
		$ 4,507 $ 3,302 101 $ 3,403 June 30, 2020
	$ 5,192 $ 4,216 June 30, 2020
	1.20% 1.20% For the Six Months Ended June 30, 2020
	(	$ 102 $ 26 $ 3,577) June 30, 2020
	$ 249,574 44,770 28,396 180,711 $ 503,451

17. OTHER PAYABLE

18. RETIREMENT BENEFIT PLANS

For the three months ended and six months ended June 30, 2021 and 2020, the pension expenses of defined benefit plans were $65 thousand, $105 thousand, $131 thousand and $209 thousand, respectively, and these were calculated based on the pension cost rate determined by the actuarial calculation on December 31, 2021 and 2020, respectively.

17 -

19. EQUITY

(1) Ordinary Shares

Ordinary Shares
Shares authorized (in thousands of shares) Authorized capital Shares issued and fully paid (in thousands of shares) Issued capital		June 30, 2021 150,000 $ 1,500,000 126,418 $ 1,264,182		December 31, 2020 150,000 $ 1,500,000 125,640 $ 1,256,402		June 30, 2020
						150,000 $ 1,500,000 124,963 $ 1,249,632

The change in share capital is mainly due to the exercise of employee share options, and the cancellation of employee restricted stock.

(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) From exercised and invalid employees share options May not be used for any purpose Employees restricted stock Employees share options		June 30, 2021 $ 409,673 25,343 - 17,877 8,426 21,216 $ 482,535	December 31, 2020 $ 405,951 25,343 - 12,837 8,276 26,350 $ 478,757		June 30, 2020
					$ 403,307 25,343 2,481 8,662 8,276 27,561 $ 475,630

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 20 (7).

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.

18 -

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) $ 249,574 $ 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.

ZOTC suspended the originally scheduled shareholders’ meeting in response to FSC’s announcement: “Measures for Public Companies to Postpone Shareholders’ Meetings for Pandemic Prevention.” The appropriations of earnings for 2020 are to be presented for approval in the shareholders’ meeting to be held on August 4, 2021.

(4) Other equity

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

change differences on translating the financial statements of foreign operations
For the Six Months Ended June 30, 2021 Balance at January 1 $ 74 In respect of the current period Exchange differences on translating the financial statements of foreign operations ( 150) Balance at June 30 ($ 76) nrealized gain (loss) on financial assets at FVTOCI For the Six Months Ended June 30, 2021 Balance at January 1 $ 39,577 In respect of the current period Unrealized gain (loss)－equity instruments 24,137 Cumulative gain (loss) of equity instruments transferred to retained earnings due to disposal ( 32,683) Balance at June 30 $ 31,031	For the Six Months Ended June 30, 2020
	$ - ( 240) ($ 240) For the Six Months Ended June 30, 2020
		$ 17,865 10,520 - $ 28,385

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 employee restricted stock. Refer to Note 23 for the information of relevant explanation.

Balance at January 1 Share-based payment expenses recognized Balance at June 30	For the Six Months Ended June 30, 2021 ( $ 5,301 ) 2,480 ($ 2,821)	For the Six Months Ended June 30, 2020	For the Six Months Ended June 30, 2020
	( (	( (	$ 10,389 ) 3,646 $ 6,743)

19 -

20. NET INCOME

(1) Interest Income

Bank deposits Financial assets at amortized cost Others (2) Other Income Dividend income Others (3) Other gains and losses Net foreign exchange profit (loss) Net gain arising on financial assets measured at FVTPL Gain on disposal of property, plant and equipment Gain on disposal of investments accounted for using equity method (4) Finance costs Interests on bank borrowings Interests on lease liabilities (5) Depreciation & amortization Property, plant and equipment Right-of-use assets Intangible assets	For the Three Months Ended June 30, 2021 $ 469 1,112 4 $ 1,585 For the Three Months Ended June 30, 2021 $ 1,678 1,056 $ 2,734 For the Three Months Ended June 30, 2021 $ 8,152 2,946 - - $ 11,098 For the Three Months Ended June 30, 2021 $ - 61 $ 61 For the Three Months Ended June 30, 2021 $ 3,467 2,399 343 $ 6,209	For the Three Months Ended June 30, 2020 $ 1,307 3,938 3 $ 5,248 For the Three Months Ended June 30, 2020 $ 4,101 1,904 $ 6,005 For the Three Months Ended June 30, 2020 ( $ 2,682 ) 4,403 - 275 $ 1,996 For the Three Months Ended June 30, 2020 $ 502 25 $ 527 For the Three Months Ended June 30, 2020 $ 4,059 1,716 201 $ 5,976	For the Six Months Ended June 30, 2021 $ 512 2,090 7 $ 2,609 For the Six Months Ended June 30, 2021 $ 1,678 1,434 $ 3,112 For the Six Months Ended June 30, 2021 $ 18,349 5,242 - - $ 23,591 For the Six Months Ended June 30, 2021 $ - 114 $ 114 For the Six Months Ended June 30, 2021 $ 7,188 4,712 578 $ 12,478	For the Six Months Ended June 30, 2020	For the Six Months Ended June 30, 2020
				$ 1,925 10,246 4 $ 12,175 For the Six Months Ended June 30, 2020
				$ 4,101 1,962 $ 6,063 For the Six Months Ended June 30, 2020
				( $ 5,642 ) 799 40 275 ($ 4,528) For the Six Months Ended June 30, 2020
				$ 1,551 46 $ 1,597 For the Six Months Ended June 30, 2020
					$ 8,090 3,403 429 $ 11,922

20 -

An analysis of depreciation by function Operating expenses An analysis of amortization by function Operating expenses	For the Three Months Ended June 30, 2021 $ 5,866 $ 343	For the Three Months Ended June 30, 2020 $ 5,775 $ 201	For the Six Months Ended June 30, 2021 $ 11,900 $ 578	For the Six Months Ended June 30, 2020	For the Six Months Ended June 30, 2020
					$ 11,493 $ 429

(6) Employee benefits expense

Post-employment benefits Defined contribution plans Defined benefit plans (Note 18) 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 June 30, 2021 $ 3,003 65 3,068 1,844 102,280 $ 107,192 $ 882 106,310 $ 107,192	For the Three Months Ended June 30, 2020 $ 2,669 105 2,774 4,341 92,246 $ 99,361 $ 853 98,508 $ 99,361	For the Six Months Ended June 30, 2021 $ 5,904 131 6,035 2,386 205,420 $ 213,841 $ 1,774 212,067 $ 213,841	For the Six Months Ended June 30, 2020	For the Six Months Ended June 30, 2020
					$ 5,169 209 5,378 7,579 173,026 $ 185,983 $ 1,784 184,199 $ 185,983

(7) Compensation of employees and remuneration of directors

The Company shall allocate compensation of employees and remuneration of directors 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 and six months ended June 30, 2021 and 2020 were as follows:

Estimate Rate

Compensation of employees Remuneration of directors Amount Compensation of employees Remuneration of directors	For the Three Months Ended June 30, 2021 4.00% 2.00% For the Three Months Ended June 30, 2021 $ 6,328 3,165	For the Three Months Ended June 30, 2020 4.00% 2.00% For the Three Months Ended June 30, 2020 $ 7,606 3,803	For the Six Months Ended June 30, 2021 4.00% 2.00% For the Six Months Ended June 30, 2021 $ 12,471 6,236	For the Six Months Ended June 30, 2020
				4.00% 2.00% For the Six Months Ended June 30, 2020 $ 12,627 6,313

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.

21 -

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:

0, respectively, are as follows:
Compensation of employees Remuneration of directors	2020 Cash $ 23,613 11,807	2019
		Cash
		$ 18,911 9,456

There was no difference between the actual amounts of the compensation of employees and the 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.

21. INCOME TAXES

(1) Income tax recognized in profit or loss

Major components of income tax expense were as follows:

Current tax In respect of the current period Adjustments for prior year Deferred tax In respect of the current period Income tax expense recognized in profit or loss	For the Three Months Ended June 30, 2021 $ 37,487 ( 464 ) ( 5,305) $ 31,718	For the Three Months Ended June 30, 2020 $ 33,436 330 4,785 $ 38,551	For the Six Months Ended June 30, 2021 $ 67,049 ( 464 ) ( 4,657) $ 61,928	For the Six Months Ended June 30, 2020	For the Six Months Ended June 30, 2020
	( (		( (		$ 61,933 330 986 $ 63,249

(2) Income tax assessment

The Company and subsidiaries’ income tax returns have been assessed by the tax authority were 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

22. EARNINGS PER SHARE

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

Net Profit for the Period

Earnings used in the computation of basic and diluted earnings per share	For the Three Months Ended June 30, 2021	For the Three Months Ended June 30, 2021	For the Three Months Ended June 30, 2020 $ 141,971	For the Six Months Ended June 30, 2021 $ 232,629	For the Six Months Ended June 30, 2020	For the Six Months Ended June 30, 2020
		$ 116,801				$ 234,840

22 -

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 Employees restricted stock Weighted average number of ordinary shares outstanding used in the computation of diluted earnings per share	For the Three Months Ended June 30, 2021 125,856 273 2,287 413 128,829	For the Three Months Ended June 30, 2020 123,935 319 2,597 489 127,340	For the Six Months Ended June 30, 2021 125,638 448 2,335 430 $ 128,851	For the Six Months Ended June 30, 2020	For the Six Months Ended June 30, 2020
					124,092 515 2,440 476 $ 127,523

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.

23. 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:

Information on employee share options is as follows:	Information on employee share options is as follows:	Information on employee share options is as follows:	Information on employee share options is as follows:	Information on employee share options is as follows:	Information on employee share options is as follows:
For the Six Months Ended June 30, 2021 For the Six Months Ended June 30, 2020 Employee share options Number of Options (In Thousands of Units) Weighted Average Exercise Price (NT$) Number of Options (In Thousands of Units) Weighted Average Exercise Price (NT$) Balance at January 1 4,468 $ 16.70 5,653 $ 17.18 Options exercised ( 793 ) 14.69 ( 340 ) 14.24 Options forfeited ( 88) 17.82 - - Outstanding options, at June 30 3,587 17.12 5,313 16.37 Options exercisable, at June 30 1,601 1,291 Information on outstanding options at the end of reporting period is as follows: June 30, 2021 December 31, 2020 June 30, 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) 0.17 $ 11.70 (Note) 0.67 $ 11.70 (Note) 1.17 13.40 (Note) 1.18 13.40 (Note) 1.68 13.40 (Note) 2.18 16.80 (Note) 2.51 16.80 (Note) 3.01 16.80 (Note) 3.51 18.40 (Note) 3.17 18.40 (Note) 3.67 18.40 (Note) 4.17						For the Six Months Ended June 30, 2020
							Weighted Average Exercise Price (NT$)
			( ( at				$ 17.18 14.24 - 16.37 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) 1.17 2.18 3.51 4.17
$ 11.70 (Note) 13.40 (Note) 16.80 (Note) 18.40 (Note)	0.17 1.18 2.51 3.17	$ 11.70 (Note) 13.40 (Note) 16.80 (Note) 18.40 (Note)		0.67 1.68 3.01 3.67	$ 11.70 (Note) 13.40 (Note) 16.80 (Note) 18.40 (Note)

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

23 -

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 recognized (reversed) were $777 thousand, $1,967 thousand, ($94) thousand and $3,933 thousand for the three and six months ended June 30, 2021 and 2020, respectively.

(2) Employees restricted stock

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

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

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

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

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

Compensation costs by issuance of employee restricted stocks recognized were $1,067 thousand, $2,374 thousand, $2,480 thousand and $3,646 thousand for the three and six months ended June 30, 2021 and 2020, respectively. As of June 30, 2021 and for the same period in 2020, the unearned employee benefit totaled $2,821 thousand and $6,743 thousand, accounted for as the decrease in other equity.

24. 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).

24 -

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

25. 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	June 30, 2021	June 30, 2021	December 31, 2020	December 31, 2020	June 30, 2020	June 30, 2020
	Carrying Amount	Fair Value	Carrying Amount	Fair Value	Carrying Amount	Fair Value

－ Foreign corporate bonds $ 71,293 $ 74,362 $ 44,061 $ 45,323 $ 62,824 $ 65,090

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

June 30, 2021

June 30, 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 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	Level 1	Level 2 $ - - - $ - $ - - $ - Level 2 $ - - - $ - $ - - $ -	Level 3 $ - - 9,089 $ 9,089 $ 12,092 38,713 $ 50,805 Level 3 $ - - 8,529 $ 8,529 $ 12,092 18,142 $ 30,234	Total
	$ 2,050 14,672 179,690 $ 196,412 $ 287,881 - $ 287,881 Level 1			$ 2,050 14,672 188,779 $ 205,501 $ 299,973 38,713 $ 338,686 Total

	$ 15,966 16,188 355,581 $ 387,735 $ 309,281 - $ 309,281			$ 15,966 16,188 364,110 $ 396,264 $ 321,373 18,142 $ 339,515

25 -

June 30, 2020

une 30, 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 $ 34,666 16,290 31,051 $ 82,007 $ 267,277 - $ 267,277		Level 2 $ - - - $ - $ - - $ -		Level 3 $ - - 3,122 $ 3,122 $ 10,438 3,743 $ 14,181		Total
								$ 34,666 16,290 34,173 $ 85,129 $ 277,715 3,743 $ 281,458

There were no transfers of financial assets between the fair value measurements of Level 1 and Level 2 for the six months ended June 30, 2021 and 2020.

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)	June 30, 2021 $ 205,501 3,557,131 338,686 3,044,111	December 31, 2020 $ 396,264 3,098,473 339,515 2,492,646	June 30, 2020
			$ 85,129 3,503,246 281,458 2,459,614

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

Note 2: The balances included financial liabilities measured at amortized cost, which comprise 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 are denominated in foreign currencies, thus the Group is exposed to foreign currency risks. Exchange rate exposures are managed within approved policy parameters utilizing foreign financial instruments.

26 -

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 29.

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 six months ended June 30, 2021 and 2020 would increase/decrease by $22,833 thousand and $1,637 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, 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 amounts of the Group’s financial assets and financial liabilities with exposure to risks of interest rates at the end of the reporting period were as follows:

Interest rate risks at fair value －Financial assets －Financial liabilities Interest rate risks at cash flows －Financial assets	June 30, 2021 $ 398,539 14,846 650,009	December 31, 2020 $ 206,574 13,091 739,139	June 30, 2020
			$ 771,858 9,408 600,412

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 six months ended June 30, 2021 and 2020 would increase/ decrease by $1,625 thousand and $1,501 thousand, respectively. Exposure is triggered by risks of cash flows of the Group’s variable interest rates of deposits.

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

Sensitivity analysis

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

If equity prices had been 5% higher/lower, pre-tax profit for the six months ended June 30, 2021 and 2020 would have increased/decreased by $10,275 thousand and $4,256 thousand, respectively, as a result of the changes in fair value of financial assets at FVTPL, and the other comprehensive income for the six months ended June 30, 2021 and 2020 would have increased/decreased by $16,934 thousand and $14,073 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.

27 -

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 44%, 33% and 36% of trade receivable, respectively, as of June 30, 2021, December 31, 2020 and June 30, 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.

June 30, 2021

June 30, 2021
Non-derivative financial liabilities No Interest-bearing liabilities Lease liabilities December 31, 2020 Non-derivative financial liabilities No Interest-bearing liabilities Lease liabilities June 30, 2020 Non-derivative financial liabilities No Interest-bearing liabilities Lease liabilities	Less than 1 Year $ 3,043,311 8,783 $ 3,052,094 Less than 1 Year $ 2,491,846 7,636 $ 2,499,482 Less than 1 Year $ 2,458,814 5,271 $ 2,464,085	1-5 Years $ - 6,275 $ 6,275 1-5 Years $ - 5,192 $ 5,192 1-5 Years $ - 4,235 $ 4,235	5+ Years
			$ - - $ - 5+ Years
			$ - - $ - 5+ Years

			$ - - $ -

The working capital of the Group is sufficient to meet the cash flow demand, therefore the Group does not have financial problems. Even if the demand exists, it shall be short-term. The Group’s loans are less than one year and the Group has available bank facilities.

As of June 30, 2021, December 31, 2020 and June 30, 2020, the Group’s unused short-term credit of limit of the bank were $1,250,000 thousand, $1,250,000 thousand and $1,220,000 thousand, respectively.

28 -

26. 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

Short-term employee benefits	For the Three Months Ended June 30, 2021 $ 5,070	For the Three Months Ended June 30, 2020 $ 9,356	For the Six Months Ended June 30, 2021 $ 35,523	For the Six Months Ended June 30, 2020	For the Six Months Ended June 30, 2020
					$ 38,271

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

27. 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)		June 30, 2021 $ 206,926 25,560 $ 232,486	December 31, 2020 $ 207,620 25,465 $ 233,085		June 30, 2020
					$ 208,314 25,345 $ 233,659

SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS
(1) As of June 30, 2021, the group opens NT$ 87,000 thousand of cashier order for payment guaranteed for Microsoft Taiwan Corporation.
(2) As of June 30, 2021, the group opens NT$ 50,000 thousand of cashier order for payment guaranteed for Microsoft Regional Sales Corporation.

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

SIGNIFICANT INFLUENCE

The 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:

June 30, 2021

June 30, 2021
Financial assets Monetary items USD Financial liabilities Monetary items USD December 31, 2020 Financial assets Monetary items USD Financial liabilities Monetary items USD	Foreign Currencies $ 27,681 44,072 Foreign Currencies $ 12,526 41,312	Exchange Rate 27.86 (USD:NTD) 27.86 (USD:NTD) Exchange Rate 28.48 (USD:NTD) 28.48 (USD:NTD)	Carrying Amount
			$ 771,193 $ 1,227,846 Carrying Amount
			$ 356,740 $ 1,176,566

29 -

June 30, 2020

June 30, 2020
Financial assets Monetary items USD Financial liabilities Monetary items USD	Foreign Currencies $ 31,951 33,056	Exchange Rate 29.630 (USD:NTD) 29.630 (USD:NTD)		Carrying Amount
				$ 946,708 $ 979,449

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

For the six months ended June 30, 2021 Exchange rate Net Foreign exchange gain (loss) 28.172 (USD:NTD) $ 18,349 For the three months ended June 30, 2021 Exchange rate Net Foreign exchange gain (loss) 27.977 (USD:NTD) $ 8,152	For the six months ended June 30, 2020	For the six months ended June 30, 2020
	Exchange rate Net Foreign exchange gain (loss) 30.001 (USD:NTD) ($ 5,642) For the three months ended June 30, 2020	Net Foreign exchange gain (loss)
Exchange rate 27.977 (USD:NTD)	Exchange rate 29.895 (USD:NTD)	Net Foreign exchange gain (loss)
		($ 2,682)

30. 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)
30 -
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)

31. 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 six months ended June 30, 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		The business division of brands distribution $ 5,463,940 - $ 5,463,940 $ 337,491		Other $ 103,766 21,001 $ 124,767 $ 3,663	Internal write- off $ - ( 21,001) ($ 21,001) $ -		Total
					( (	$ 5,567,706 - 5,567,706 $ 5,567,706 $ 341,154 ( 75,464 ) 2,609 3,112 23,591 ( 114 ) ( 1,103 ) $ 293,785

31 -

For the six months ended June 30, 2020 Revenues from external customers Inter-segment revenues Segment revenues Consolidated revenues Segment profit (loss) General administration division costs and remuneration of directors Interest income Other income Other gains and losses Finance costs Net income before tax		The business division of brands distribution $ 5,063,573 - $ 5,063,573 $ 352,117		Other $ 67,952 15,570 $ 83,522 $ 5,494	Internal write- off $ - ( 15,570) ($ 15,570) $ -		Total
					( (	$ 5,131,525 - 5,131,525 $ 5,131,525 $ 357,611 ( 72,810 ) 12,175 6,063 ( 4,528 ) ( 1,597 ) $ 296,914

Segment profit represents the profit before tax earned by each segment without allocation of central administration costs and remuneration of directors, share of profit or loss of associates, dividend income, interest income, gains or losses on disposal of property, plant and equipment, gains or losses on disposal of financial instruments, exchange gains or losses, valuation gains or losses on financial 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.

(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 six months ended June 30, 2021 $ 1,950,154 2,382,537 926,506 306,988 1,521 $ 5,567,706	For the six months ended June 30, 2020	For the six months ended June 30, 2020
			$ 1,442,685 2,379,131 1,067,839 239,878 1,992 $ 5,131,525

32 -

ZERO ONE TECHNOLOGY CO., LTD. AND SUBSIDIARIES

FINANCING PROVIDED TO OTHERS FOR THE SIX MONTHS ENDED JUNE 30, 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	$ 50,000 20,000	$ 50,000 20,000	$ - -	3% 3%	2 2	$ - -	Operating capital Operating capital	$ - -	－－	$ - -	$ 255,009 255,009	$ 510,018 510,018

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.

33 -

ZERO ONE TECHNOLOGY CO., LTD. AND SUBSIDIARIES

MARKETABLE SECURITIES HELD JUNE 30, 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		June 30, 2021			Note
				Number of Shares	Carrying Amount	Percentage of Ownership (%)	Fair Value
ZOTC	Beneficiary certificates Jih Sun Money Market Fund KGI Kaefer Fund KGI Taiwan Multi-Asset Income Fund KGI Taiwan Select-Asset Income Fund Corporate bond M.J. International Co. Ltd.－1st convertible corporate bonds Barclays Bank Corporate Bond (USD) Prudential plc. Corporate Bond (USD) AT&T Corporate Bond (USD) Perusahaan Listrik Negara Corporate Bond (USD) Stock Cathay Financial Holdings Preferred Shares A Union Bank of Taiwan Preferred Shares A K Way Information Corp. China Electric Mfg. Corp.	－－－－－－－－－－－ Director of ZOTC －	Financial assets at FVTPL － current Financial assets at FVTPL－non- current Financial assets at FVTPL－non- current Financial assets at FVTPL－non- current Financial assets at FVTPL － current Financial assets at amortized cost －non-current 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－non- current Financial assets at FVTPL－non- current Financial assets at FVTOCI－ non-current Financial assets at FVTOCI－ non-current	10,034,989 170,199 1,198,020 500,325 20（Units） 5（Units） 10（Units） 5（Units） 5（Units） 166,000 80,000 540,000 2,689,200	$ 150,235 3,526 13,262 5,563 2,050 14,533 28,373 12,819 15,568 10,408 4,264 16,065 31,598	- - - - - - - - - - - 1.76 0.83	$ 150,235 3,526 13,262 5,563 2,050 15,634 28,842 14,106 15,780 10,408 4,264 16,065 31,598

(Continued)

34 -

Holding Company Name	Type and Name of Marketable Securities (Note 1)	Relationship with the Holding Company	Financial Statement Account		June 30, 2021	June 30, 2021		Note
				Number of Shares	Carrying Amount	Percentage of Ownership (%)	Fair Value
ZOTC Zerone Win Investment Co., Ltd.	Promaster Technology Corp. Unex Technology Corp. Da-Chang Start-Up Investment Co. Ltd. Cathay Financial Holding Co., Ltd. Preferred Shares A Union Bank of Taiwan Preferred Shares A Fubon Financial Holding Co., Ltd. Preferred Shares B Taishin Financial Holding Co., Ltd. Preferred Shares E CTBC Financial Holding Co., Ltd. Preferred Shares B Cathay Financial Holding Co., Ltd. Preferred Shares B Kwong Lung Enterprise Co., Ltd. Preferred Shares A WPG Holdings Limited Preferred Shares A United Orthopedic Corporation Preferred Shares A QST International Corporation Preferred Shares A Chailease Holding Company Limited Class A Preferred Shares Miiicasa Holdings (Cayman) Inc. Duofu Co., Ltd. Jotangi Technology Co., Ltd. Stock WPG Holdings Limited Preferred Shares A	－－－－－－－－－－－－－－－－－	Financial assets at FVTOCI－ non-current Financial assets at FVTOCI－ non-current Financial assets at FVTOCI－ non-current Financial assets at FVTOCI－ non-current Financial assets at 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	1,157,137 175,000 1,500,000 134,000 70,000 400,000 240,000 90,000 230,000 270,000 700,000 200,000 70,000 300,000 2,500,000 10,000 796,250 240,000	$ 12,092 3,231 14,911 8,402 3,731 25,240 12,816 5,715 14,490 13,743 35,350 9,750 3,241 30,000 - - - 12,120	2.72 1.68 2.73 - - - - - - - - - - - 3.45 0.22 9.32 -	$ 12,092 3,231 14,911 8,402 3,731 25,240 12,816 5,715 14,490 13,743 35,350 9,750 3,241 30,000 - - - 12,120

(Continued)

35 -

Holding Company Name	Type and Name of Marketable Securities (Note 1)	Relationship with the Holding Company	Financial Statement Account		June 30, 2021	June 30, 2021
				Number of Shares	Carrying Amount	Percentage of Ownership (%)	Fair Value
Zerone Win Investment Co., Ltd. Petacom Technology Co., Ltd. Zotech Co., Ltd.	Shin Kong Financial Holding Co., Ltd. Preferred Shares A Tatung System Technologies Inc. LEO Systems, Inc. GrandTech C.G. Systems Inc. InfinitiesSoft Solutions Inc. Beneficiary certificates Taishin 1699 Money Market Fund Stock WPG Holdings Limited Preferred Shares A	－－－－－－－	Financial assets at FVTOCI－ non-current Financial assets at FVTOCI－ non-current Financial assets at FVTOCI－ non-current Financial assets at FVTOCI－ non-current Financial assets at FVTOCI－ non-current Financial assets at FVTPL － current Financial assets at FVTOCI－ non-current	50,000 1,500,000 20,000 70,000 857,143 1,185,097 200,000	$ 2,140 49,500 464 3,416 20,571 16,193 10,100	- 1.69 0.02 0.12 9.38 - -	$ 2,140 49,500 464 3,416 20,571 16,193 10,100

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 and associates, please refer Table 4.

36 -

ZERO ONE TECHNOLOGY CO., LTD.AND SUBSIDIARIES

INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT INTERCOMPANY TRANSACTIONS FOR THE SIX MONTHS ENDED JUNE 30, 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	$ 13,912 6,002	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.

37 -

ZERO ONE TECHNOLOGY CO., LTD. AND SUBSIDIARIES

INFORMATION ON INVESTEES FOR THE SIX MONTHS ENDED JUNE 30, 2021 Table 4

(In Thousands of New Taiwan Dollars)

Investor	Investee	Location	Main Businesses	Original Investment Amount	Original Investment Amount	As	of June 30,2021	of June 30,2021	Net Income (Loss) of the Investee	Share of Profit (Loss)	Note
				June 30, 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. DigiCosmos Tech. Co., Ltd. TrustOne Security Inc.	Taipei City Taipei City Republic of Seychelles Taipei City Taipei City Taipei City Taipei City	Manufacturing for computer equipment Investment Holding company Services of cloud information software Services of distribution of information product Services of distribution of information product R&D, sale and service of information software	$ 35,000 300,000 10,063 25,500 50,000 50,000 4,000	$ 35,000 149,000 10,063 25,500 50,000 - -	3,500,000 30,000,000 320,000 25,500,000 50,000,000 5,000,000 4,000,000	85.37 100.00 100.00 87.93 100.00 100.00 32.00	$ 40,364 312,112 10,059 1,664 40,486 50,000 2,897	( $ 3,323 ) ( 14,460 ) 683 ( 4,910 ) ( 7,065 ) - ( 3,447 )	( $ 2,837 ) ( 14,460 ) 683 ( 4,317 ) ( 7,065 ) - ( 1,103 )	Subsidiary Subsidiary Subsidiary Sub- subsidiary Sub- subsidiary Sub- subsidiary Associate

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

38 -

ZERO ONE TECHNOLOGY CO., LTD.

INFORMATION ON INVESTMENTS IN MAINLAND CHINA FOR THE SIX MONTHS ENDED JUNE 30, 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 June 30, 2021	Net Income (Loss) of the Investee	% Ownership of Direct or Indirect Investment	Investment Gain (Loss) (Note 2)	Carrying Amount as of June 30, 2021	Accumulated Repatriation of Investment Income as of June 30, 2021	Note
						Outward	Inward
Techone (Shanghai) Co., Ltd.	Services of Network Technology	$ 12,927 ( RMB 3,000 )		(Note 1)	$ 9,118	$ -	$ -	$ 9,118	$ 1,023	70%	$ 716	$ 9,730	$ -	－

Accumulated Outward Remittance for Investments in Mainland China as of June 30, 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			$ 1,530,053

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 June 30, 2021.

Note 3：Determined by sixty percent (60%) of the Company’s net worth, reviewed by CPAs on June 30, 2021 (2,550,088×60%＝1,530,053).

Note 4：For foreign currency conversion, gain (loss) are converted by the average exchange rate in 2021 Q2. Other amounts are converted into New Taiwan Dollars by the exchange rate on June 30, 2021.

39 -

ZERO ONE TECHNOLOGY CO., LTD. AND SUBSIDIARIES

INFORMATION ON MAJOR SHAREHOLDERS JUNE 30, 2021

Table 6

Shareholders	Shares	Shares
	Number of Shares	Ownership Percentage
Ceres Investment Co., Ltd. Chia Hsin Lin	9,506,594 9,338,292	7.51% 7.38%

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.

40 -

AI assistant

ZERO ONE — Interim / Quarterly Report 2021

52262_rns_2021-12-31_45353ba6-3891-44db-aed4-c437a493007d.pdf

ZERO ONE TECHNOLOGY CO., LTD.

AND SUBSIDIARIES

§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 June 30, 2021, December 31, 2020, and June 30, 2020 (In Thousands of New Taiwan Dollars)

ZERO ONE TECHNOLOGY CO., LTD. AND SUBSIDIARIES

ZERO ONE TECHNOLOGY CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY For the six months ended June 30, 2021 and 2020 (Reviewed, Not Audited)

ZERO ONE TECHNOLOGY CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS For the six months ended June 30, 2021 and 2020 (Reviewed, Not Audited)

ZERO ONE TECHNOLOGY CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS For the six months ended June 30, 2021 and 2020 (Reviewed, Not Audited) (In Thousands of New Taiwan Dollars)

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

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

June 30, 2021

June 30, 2020

12. INVENTORIES

13. SUBSIDIARIES

15. PROPERTY, PLANT AND EQUIPMENT

16. LEASE ARRANGEMENTS

17. OTHER PAYABLE

18. RETIREMENT BENEFIT PLANS

19. EQUITY

(4) Other equity

C. Unearned employee benefit

20. NET INCOME

(1) Interest Income

(7) Compensation of employees and remuneration of directors

Estimate Rate

21. INCOME TAXES

(1) Income tax recognized in profit or loss

22. EARNINGS PER SHARE

Net Profit for the Period

Shares

23. SHARE - BASED PAYMENT ARRANGEMENTS

(1) Employee Share Option Plan

(2) Employees restricted stock

24. CAPITAL RISK MANAGEMENT

25. FINNANCIAL INSTRUMENTS

June 30, 2021

June 30, 2020

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

A. Market risk

Sensitivity analysis

(B) Interest rate risk

Sensitivity analysis

Sensitivity analysis

B. Credit risk

C. Liquidity risk

Liquidity & interest rate risk table

June 30, 2021

26. RELATED PARTIES TRANSACTIONS

27. PLEDGED ASSETS

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

SIGNIFICANT INFLUENCE

June 30, 2021

June 30, 2020

30. ADDITIONAL DISCLOSURES

31. SEGMENT INFORMATION

(2) Total segment assets and liabilities

(3) Revenue from major products and services

ZERO ONE TECHNOLOGY CO., LTD. AND SUBSIDIARIES

ZERO ONE Interim / Quarterly Report 2021