ZERO ONE - Interim / Quarterly Report 2021

Code ： 3029

ZERO ONE TECHNOLOGY CO., LTD.

AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS FOR THE

NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020 AND INDEPENDENT AUDITORS’ REVIEW REPORT

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

§TABLE OF CONTENTS§

Contents
Page No.
1、Cover
1
2、Table of Contents
2
3、Independent Auditors’ Review Report
3
4、Consolidated Balance Sheets
4
5、Consolidated Statements of Comprehensive Income
5
6、Consolidated Statements of Changes in Equity
6
7、Consolidated Statements of Cash Flows
7～8
8、Notes to Consolidated Financial Statements
(1) General
9
(2) The date and procedures of authorization of financial
statements
9
(3) Application of new and revised standards and
interpretations
9～10
(4) Summary of significant accounting policies
10～11
(5) Critical Accounting judgements and key sources of
estimation and uncertainty
11
(6) Explanation of significant accounts
11～29
(7) Transactions with related parties
29
(8) Assets pledged as collateral
29
(9) Significant contingent liabilities and unrecognized
commitments
29
(10)Significant assets and liabilities denominated in
foreign currencies
29～30
(11)Separately disclosed items
A. Information on significant transactions
30、33～37
B. Information on investees
31、38
C. Information on investment in Mainland China
31、39
D. Information of major shareholders
31、40
(12)Segment information
31～32 Financial
Report’s
Note No.
-
-
-
-
-
-
-
1
2
3
4
5
6～26
27
28
29
30
31
31
31
31
32

INDEPENDENT AUDITORS’ REVIEW REPORT

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

Introduction

We have reviewed the accompanying consolidated balance sheets of Zero One Technology Co., Ltd and its subsidiaries (the “Group” ） as of September 30, 2021 and 2020 and the related consolidated statements of comprehensive income for the three months ended September 30, 2021 and 2020 and for the nine months ended September 30, 2021 and 2020, the consolidated statements of changes in equity and cash flows for the nine months then ended September 30, 2021 and 2020, and the notes to the consolidated financial statements, including a summary of significant accounting policies. Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34, “Interim Financial Reporting,” endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China. Our responsibility is to express a conclusion on the consolidated financial statements based on our reviews.

Scope of Review

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

Conclusion

Based on our reviews, nothing has come to our attention that caused us to believe that the accompanying consolidated financial statements do not present fairly, in all material respects, the consolidated financial position of the Group as of September 30, 2021 and 2020, its consolidated financial performance for the three months ended September 30, 2021 and 2020, and its consolidated financial performance and its consolidated cash flows for the nine months ended September 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 November 3, 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

(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 28) Investment accounted for using equity method (Note 14) Property, plant and equipment (Notes 15 and 28) Right-of-use assets (Note 16) Other intangible assets Deferred tax assets (Note 4) Refundable deposits Prepayments for investments Total non-current assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term borrowings (Note 17) Trade payables Other payables (Note 18) Current tax liabilities (Note 4) Lease liabilities (Note 16) Other current liabilities Total current liabilities NON-CURRENT LIABILITIES Deferred tax liabilities (Note 4) Lease liabilities (Note 16) Net defined benefit liabilities (Notes 4 and 19) Other non-current liabilities Total non-current liabilities Total liabilities EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY (Note 20) Ordinary shares Capital surplus Retained earnings Legal reserve Unappropriated earnings Total retained earnings Other equity Total equity attributable to owners of the Company NON-CONTROLLING INTERESTS Total equity TOTAL	September 30, 2021 (Reviewed) Amount % $ 936,120 14 23,937 - 234,206 3 570,911 8 2,669,091 39 831 - 1,630,222 24 16,148 - 6,081,466 88 36,533 1 348,371 5 51,112 1 13,627 - 310,081 4 13,585 - 2,331 - 44,611 1 8,711 - - - 828,962 12 $ 6,910,428 100 $ 450,000 6 3,029,985 44 337,179 5 65,592 1 7,925 - 243,224 4 4,133,905 60 410 - 6,055 - 19,663 - 800 - 26,928 - 4,160,833 60 1,268,742 18 485,485 7 263,963 4 690,845 10 954,808 14 29,645 1 2,738,680 40 10,915 - 2,749,595 40 $ 6,910,428 100	September 30, 2021 (Reviewed) Amount % $ 936,120 14 23,937 - 234,206 3 570,911 8 2,669,091 39 831 - 1,630,222 24 16,148 - 6,081,466 88 36,533 1 348,371 5 51,112 1 13,627 - 310,081 4 13,585 - 2,331 - 44,611 1 8,711 - - - 828,962 12 $ 6,910,428 100 $ 450,000 6 3,029,985 44 337,179 5 65,592 1 7,925 - 243,224 4 4,133,905 60 410 - 6,055 - 19,663 - 800 - 26,928 - 4,160,833 60 1,268,742 18 485,485 7 263,963 4 690,845 10 954,808 14 29,645 1 2,738,680 40 10,915 - 2,749,595 40 $ 6,910,428 100	September 30, 2021 (Reviewed) Amount % $ 936,120 14 23,937 - 234,206 3 570,911 8 2,669,091 39 831 - 1,630,222 24 16,148 - 6,081,466 88 36,533 1 348,371 5 51,112 1 13,627 - 310,081 4 13,585 - 2,331 - 44,611 1 8,711 - - - 828,962 12 $ 6,910,428 100 $ 450,000 6 3,029,985 44 337,179 5 65,592 1 7,925 - 243,224 4 4,133,905 60 410 - 6,055 - 19,663 - 800 - 26,928 - 4,160,833 60 1,268,742 18 485,485 7 263,963 4 690,845 10 954,808 14 29,645 1 2,738,680 40 10,915 - 2,749,595 40 $ 6,910,428 100		December 31, 2020 (Audited) Amount %	September 30, 2020 (Reviewed)	September 30, 2020 (Reviewed)	September 30, 2020 (Reviewed)
		Amount $ 936,120 23,937 234,206 570,911 2,669,091 831 1,630,222 16,148 6,081,466 36,533 348,371 51,112 13,627 310,081 13,585 2,331 44,611 8,711 - 828,962 $ 6,910,428 $ 450,000 3,029,985 337,179 65,592 7,925 243,224 4,133,905 410 6,055 19,663 800 26,928 4,160,833 1,268,742 485,485 263,963 690,845 954,808 29,645 2,738,680 10,915 2,749,595 $ 6,910,428					Amount $ 399,898 40,107 540,973 185,379 1,865,612 829 918,165 31,150 3,982,113 34,977 316,499 86,494 - 308,094 14,852 973 38,553 6,499 10,000 816,941 $ 4,799,054 $ - 1,787,415 184,459 37,511 7,444 205,994 2,222,823 57 7,492 20,863 800 29,212 2,252,035 1,252,722 476,039 219,863 576,421 796,284 10,388 2,535,433 11,586 2,547,019 $ 4,799,054	%
			14 - 3 8 39 - 24 - 88 1 5 1 - 4 - - 1 - - 12 100 6 44 5 1 - 4 60 - - - - - 60 18 7 4 10 14 1 40 - 40 100		$ 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			8 1 11 4 39 - 19 1 83 1 7 2 - 6 - - 1 - - 17 100 - 37 4 1 - 4 46 - - 1 - 1 47 26 10 5 12 17 - 53 - 53 100

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 September 30 2021 2020 Amount `％` Amount `％` $ 4,272,343 100 $ 2,467,016 100 3,912,151 91 2,206,966 89 360,192 9 260,050 11 113,762 3 98,387 4 38,429 1 34,752 2 3,656 - 2,056 - 1,269 - 942 - 157,116 4 136,137 6 203,076 5 123,913 5 988 - 3,193 - 13,092 - 7,290 - 3,154 - 7,472 1 2,692 - - - 775 ) - ( 471 ) - 770) - - - 18,381 - 17,484 1 221,457 5 141,397 6 42,253 1 26,765 1 179,204 4 114,632 5 1,114 - ( 11,565 ) ( 1 ) 15 ) - 207 - - - ( 60) - 1,099 - ( 11,418) ( 1) $ 180,303 4 $ 103,214 4 $ 179,571 4 $ 115,138 5 367) - ( 506) - $ 179,204 4 $ 114,632 5 $ 180,706 4 $ 103,661 4 403) - ( 447) - $ 180,303 4 $ 103,214 4 $ 1.42 $ 0.92 $ 1.39 $ 0.90	For the Three Months Ended September 30 2021 2020 Amount `％` Amount `％` $ 4,272,343 100 $ 2,467,016 100 3,912,151 91 2,206,966 89 360,192 9 260,050 11 113,762 3 98,387 4 38,429 1 34,752 2 3,656 - 2,056 - 1,269 - 942 - 157,116 4 136,137 6 203,076 5 123,913 5 988 - 3,193 - 13,092 - 7,290 - 3,154 - 7,472 1 2,692 - - - 775 ) - ( 471 ) - 770) - - - 18,381 - 17,484 1 221,457 5 141,397 6 42,253 1 26,765 1 179,204 4 114,632 5 1,114 - ( 11,565 ) ( 1 ) 15 ) - 207 - - - ( 60) - 1,099 - ( 11,418) ( 1) $ 180,303 4 $ 103,214 4 $ 179,571 4 $ 115,138 5 367) - ( 506) - $ 179,204 4 $ 114,632 5 $ 180,706 4 $ 103,661 4 403) - ( 447) - $ 180,303 4 $ 103,214 4 $ 1.42 $ 0.92 $ 1.39 $ 0.90	For the Three Months Ended September 30 2021 2020 Amount `％` Amount `％` $ 4,272,343 100 $ 2,467,016 100 3,912,151 91 2,206,966 89 360,192 9 260,050 11 113,762 3 98,387 4 38,429 1 34,752 2 3,656 - 2,056 - 1,269 - 942 - 157,116 4 136,137 6 203,076 5 123,913 5 988 - 3,193 - 13,092 - 7,290 - 3,154 - 7,472 1 2,692 - - - 775 ) - ( 471 ) - 770) - - - 18,381 - 17,484 1 221,457 5 141,397 6 42,253 1 26,765 1 179,204 4 114,632 5 1,114 - ( 11,565 ) ( 1 ) 15 ) - 207 - - - ( 60) - 1,099 - ( 11,418) ( 1) $ 180,303 4 $ 103,214 4 $ 179,571 4 $ 115,138 5 367) - ( 506) - $ 179,204 4 $ 114,632 5 $ 180,706 4 $ 103,661 4 403) - ( 447) - $ 180,303 4 $ 103,214 4 $ 1.42 $ 0.92 $ 1.39 $ 0.90	For the Three Months Ended September 30 2021 2020 Amount `％` Amount `％` $ 4,272,343 100 $ 2,467,016 100 3,912,151 91 2,206,966 89 360,192 9 260,050 11 113,762 3 98,387 4 38,429 1 34,752 2 3,656 - 2,056 - 1,269 - 942 - 157,116 4 136,137 6 203,076 5 123,913 5 988 - 3,193 - 13,092 - 7,290 - 3,154 - 7,472 1 2,692 - - - 775 ) - ( 471 ) - 770) - - - 18,381 - 17,484 1 221,457 5 141,397 6 42,253 1 26,765 1 179,204 4 114,632 5 1,114 - ( 11,565 ) ( 1 ) 15 ) - 207 - - - ( 60) - 1,099 - ( 11,418) ( 1) $ 180,303 4 $ 103,214 4 $ 179,571 4 $ 115,138 5 367) - ( 506) - $ 179,204 4 $ 114,632 5 $ 180,706 4 $ 103,661 4 403) - ( 447) - $ 180,303 4 $ 103,214 4 $ 1.42 $ 0.92 $ 1.39 $ 0.90		For the Nine Months Ended September	For the Nine Months Ended September	For the Nine Months Ended September	For the Nine Months Ended September	30
	2021	`％` 100 91 9 3 1 - - 4 5 - - - - - - - 5 1 4 - - - - 4 4 - 4 4 - 4		2020		2021	`％` 100 90 10 4 1 - - 5 5 - - - - - - - 5 1 4 - - - - 4 4 - 4 4 - 4		2020
	Amount $ 4,272,343 3,912,151 360,192 113,762 38,429 3,656 1,269 157,116 203,076 988 13,092 3,154 2,692 775 ) 770) 18,381 221,457 42,253 179,204 1,114 15 ) - 1,099 $ 180,303 $ 179,571 367) $ 179,204 $ 180,706 403) $ 180,303 $ 1.42 $ 1.39			Amount $ 2,467,016 2,206,966 260,050 98,387 34,752 2,056 942 136,137 123,913 3,193 7,290 7,472 - 471 ) - 17,484 141,397 26,765 114,632 11,565 ) 207 60) 11,418) $ 103,214 $ 115,138 506) $ 114,632 $ 103,661 447) $ 103,214 $ 0.92 $ 0.90		Amount $ 9,840,049 8,915,505 924,544 336,854 113,893 6,851 1,820) 455,778 468,766 3,597 16,204 26,745 2,692 889 ) 1,873) 46,476 515,242 104,181 411,061 25,263 229 ) - 25,034 $ 436,095 $ 412,200 1,139) $ 411,061 $ 437,322 1,227) $ 436,095 $ 3.28 $ 3.19			Amount $ 7,598,541 6,800,124 798,417 275,558 107,562 4,789 1,794 389,703 408,714 15,368 13,353 2,944 - 2,068 ) - 29,597 438,311 90,014 348,297 1,092 ) 221 ) - 1,313) $ 346,984 $ 349,978 1,681) $ 348,297 $ 348,781 1,797) $ 346,984 $ 2.82 $ 2.73	`％`
( ( ( ( (			( ( ( ( ( (		( ( ( ( ( (			( ( ( ( ( (		100 90 10 4 1 - - 5 5 1 - - - - - 1 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 nine months ended September 30, 2021 and 2020

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

				Equity Attributable to Owners of the Company	Equity Attributable to Owners of the Company	Equity Attributable to Owners of the Company	Equity Attributable to Owners of the Company	Equity Attributable to Owners of the Company								Total Equity	Total Equity
Share Capital Shares (In Thousand) Issued Capital 124,635 $ 1,246,352 - - - - - - - - - - - - - - - - - - ( 12 ) ( 120 ) 649 6,490 - - - - - - 125,272 $ 1,252,722 125,640 $ 1,256,402 - - - - - - - - - - - - - - ( 15 ) ( 150 ) 1,249 12,490 - - 126,874 $ 1,268,742		Capital Surplus $ 470,136 - - - - - - ( 2,481 ) - 5,413 120 2,851 - - - $ 476,039 $ 478,757 - - - - - - 683 150 5,895 - $ 485,485		Retained Earnings			Total $ 696,340 - - 249,574 ) 349,978 - 349,978 718 ) - - - - - 258 - $ 796,284 $ 887,761 - 377,836 ) 412,200 - 412,200 - - - - 32,683 $ 954,808		Other Equity				Total $ 7,476 - - - - 1,197) 1,197) - 4,367 - - - - 258 ) - $ 10,388 $ 34,350 - - - 25,122 25,122 2,856 - - - 32,683) $ 29,645
								Exchange differences on translating the financial statements of foreign operations $ - - - - - ( 155) ( 155) - - - - - - - - ($ 155) $ 74 - - - ( 161) ( 161) - - - - - ($ 87)	Unrealized gain (loss) on Financial Assets at FVTOCI $ 17,865 - - - - ( 1,042) ( 1,042) - - - - - - ( 258 ) - $ 16,565 $ 39,577 - - - 25,283 25,283 - - - - ( 32,683) $ 32,177		Unearned Employee benefits $ 10,389 ) - - - - - - - 4,367 - - - - - - $ 6,022) $ 5,301 ) - - - - - 2,856 - - - - $ 2,445)
Shares (In Thousand) 124,635 - - - - - - - - - ( 12 ) 649 - - - 125,272 125,640 - - - - - - - ( 15 ) 1,249 - 126,874			Legal Reserve $ 184,732 35,131 - - - - - - - - - - - - - $ 219,863 $ 219,863 44,100 - - - - - - - - - $ 263,963	Special Reserve $ 16,844 - ( 16,844 ) - - - - - - - - - - - - $ - $ - - - - - - - - - - - $ -	Unappropriated Earnings $ 494,764 ( 35,131 ) 16,844 ( 249,574 ) 349,978 - 349,978 ( 718 ) - - - - - 258 - $ 576,421 $ 667,898 ( 44,100 ) ( 377,836 ) 412,200 - 412,200 - - - - 32,683 $ 690,845
( (	( (	(		(	( ( ( ( (	( ( (		( ( ( ( ( (	( ( ( (	( ( ( (		( ( ( (		( ( ( (	( ( ( ( ( ( (	( ( ( (	$ 2,426,189 - - 249,574 ) 348,297 1,313) 346,984 - 4,367 5,413 - 9,341 108 ) - 4,407 $ 2,547,019 $ 2,669,412 - 377,836 ) 411,061 25,034 436,095 2,856 683 - 18,385 - $ 2,749,595

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

ZERO ONE TECHNOLOGY CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Reviewed, Not Audited)

(In Thousands of New Taiwan Dollars)

CONSOLIDATED STATEMENTS OF CASH FLOWS (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 change of financial assets and liabilities at fair value through profit or loss Finance costs Net gain on derecognition of financial assets at amortized cost Interest income Dividend income Costs of share-based payment Share of loss of associates accounted for using equity method 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 Nine Months Ended September 30
		2021 $ 515,242 17,987 901 1,820 ) 5,470 ) 889 2,692 ) 3,597 ) 11,700 ) 3,539 1,873 - 41,907 6,763 341,264 340,421 ) 754,020 ) 440,128 ) 14,463 780,695 91,608 27,360 1,319) 283,324 104,877) 178,447		2020
	( ( ( ( ( ( ( ( ( (		( ( ( ( ( ( ( ( (	$ 438,311 17,268 606 1,794 2,008 ) 2,068 - 15,368 ) 10,911 ) 9,780 - 275 ) 2,933 885 22,629 93,749 113,347 ) 396,752 3,637 242,470 ) 195,560 ) 62,922 1,055) 472,340 106,047) 366,293 (Continued)

ZERO ONE TECHNOLOGY CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Reviewed, Not Audited)

(In Thousands of New Taiwan Dollars)

CONSOLIDATED STATEMENTS OF CASH FLOWS (Reviewed, Not Audited) (In Thousands of New Taiwan Dollars)
CASH FLOWS FROM INVESTING ACTIVITIES Purchase of financial assets at fair value through other comprehensive income Proceeds from sale of financial assets at fair value through other comprehensive income Proceeds from capital reduction of financial assets at fair value through other comprehensive income Purchase of financial assets at amortized cost Proceeds from sale of financial assets at amortized cost 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 Payment for intangible assets Interest received Dividends received Net cash generated from investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from short-term borrowings Repayments of short-term borrowings Refund of guarantee deposits received Repayment of the principal portion of lease liabilities Dividends paid to owners of the Company Exercise of employee share options Interest paid Dividends paid to non-controlling interests Increase in non-controlling interests Net cash generated from (used in) financing activities EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH AND CASH EQUIVALENTS HELD IN FOREIGN CURRENCIES NET INCREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD	For the Nine Months Ended September 30
		2021 $ 30,392 ) 56,799 - 285,637 ) 309,670 15,500 ) - - 3,391 ) - 771 ) 980 ) 4,916 8,400 43,114 450,000 - - 6,864 ) 377,836 ) 18,385 816 ) - - 82,869 6,200) 298,230 637,890 $ 936,120		2020
	( ( ( ( ( ( ( ( ( (		( ( ( ( ( ( ( ( ( ( ( ( ( (	$ 93,118 ) 24,217 3,078 190,696 ) 342,035 - 275 10,000 ) 4,488 ) 540 1,158 ) 184 ) 15,375 10,911 96,787 - 150,000 ) 371 ) 5,286 ) 249,574 ) 9,341 2,072 ) 108 ) 4,407 393,663) 5,016) 64,401 335,497 $ 399,898

(Concluded)

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 NINE MONTHS ENDED SEPTEMBER 30, 2021 and 2020

(Reviewed, Not Audited)

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

1. GENERAL

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

The consolidated financial statements are expressed by the functional currency (New Taiwan Dollars) of the Group.

2. THE DATE AND PROCEDURES OF AUTHORIZATION OF FINANCIAL STATEMENTS

The accompanying consolidated financial statements were approved by the Board of Directors and issued

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

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

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

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

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

New / Revised / Amended Standards and Interpretations Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets between an Investor and its Associate or Joint Venture” IFRS 17 “Insurance Contracts” Amendments to IFRS 17 Amendments to 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”as endorsed and issued into effect by the FSC. Disclosure information included in these consolidated financial statements is less than the disclosure information required in a complete set of annual consolidated financial statements.

(2) Basis of preparation

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

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

A. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities;
B. Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for an asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and
C. Level 3 inputs are unobservable inputs for an asset or liability.
(3) Basis of consolidation

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

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See Note 13, Table 4 and Table 5 for detailed information on the subsidiaries, including the percentages of ownership and main businesses.

(4) Other Significant Accounting Policies

Except for the following, please refer to the consolidated financial statements for the year ended December 31, 2020.

A. Defined retirement benefits

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

B. Taxation

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

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

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	September 30, 2021 $ 287 880,133 55,700 $ 936,120	December 31, 2020 $ 213 609,197 28,480 $ 637,890	September 30, 2020
				$ 440 370,358 29,100 $ 399,898

7. FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS

Financial assets`－`current Mandatorily measured at FVTPL Domestic convertible bond Domestic listed ordinary shares Fund beneficiary certification Financial assets`－`non-current Mandatorily measured at FVTPL Domestic listed preference shares Fund beneficiary certification	September 30, 2021 $ 7,736 - 16,201 $ 23,937 $ 14,445 22,088 $ 36,533	December 31, 2020 $ 15,966 1,785 343,122 $ 360,873 $ 14,403 20,988 $ 35,391	September 30, 2020	September 30, 2020
				$ 22,718 1,241 16,148 $ 40,107 $ 14,493 20,484 $ 34,977

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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	September 30, 2021 $ 118,890 183,268 46,213 $ 348,371	December 31, 2020 $ 123,829 197,544 18,142 $ 339,515	September 30, 2020
				$ 100,956 196,800 18,743 $ 316,499

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) Repurchase agreements collateralized by bonds (2) Non-current Domestic investment Pledged time deposit (3) Foreign investment Barclays Bank corporate bond (USD) (4) Prudential plc corporate bond (USD) (5) AT&T corporate bond (USD) (6) Perusahaan Listrik Negara corporate bond (USD) (7)	September 30, 2021 $ 150,570 83,636 $ 234,206 $ 35,561 - - - 15,551 $ 51,112	December 31, 2020 $ 238,510 - $ 238,510 $ 25,465 14,895 29,166 - - $ 69,526	September 30, 2020	September 30, 2020
				$ 482,773 58,200 $ 540,973 $ 25,345 15,239 29,883 16,027 - $ 86,494

(1) As of September 30, 2021, December 31 and September 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 0.63%~2.10%, respectively.
(2) As of September 30, 2021 and 2020, the market interest rate intervals of repurchase agreements collateralized by bonds with original maturities more than three months were 0.4% and 0.6%, respectively.
(3) Please refer to Note 28 for more details on financial assets at amortized cost under pledge.
(4) The Group purchased Barclays Bank corporate bond (USD) by USD 527 thousand, with a coupon rate of 4.836%, in August, 2019. As for adjustment portion of investments, the Group sold all bonds by $15,560 thousand, and recognized $1,003 thousand of gain from sale of financial assets at amortized cost in July, 2021.
(5) The Group purchased Prudential plc corporate bond (USD) by USD 1,040 thousand, with a coupon rate of 4.875%, in August, 2019. As for adjustment portion of investments, the Group sold all bonds by $28,936 thousand, and recognized $444 thousand of gain from sale of financial assets at amortized cost in July, 2021.
(6) The Group purchased AT&T corporate bond (USD) by USD 460 thousand with a coupon rate of 3.65% and USD 553 thousand with a coupon rate of 4.50%, in March, 2021 and November, 2019, respectively. The bonds purchased in March, 2021 was of USD 460 thousand. As for adjustment portion of investments, the Group sold all bonds by $14,021 thousand, and recognized $1,245 thousand of gain from sale of financial
12 -

assets at amortized cost in August, 2021; the purchased bonds of USD 553 thousand in November, 2019 were sold in November, 2020.

(7) The Group purchased Perusahaan Listrik Negara corporate bond (USD) by USD 559 thousand, with a coupon rate of 5.25% in May, 2021.
(8) Please refer to Note 10 for relevant credit risk management and impairment assessment information for financial assets at amortized cost.

10. CREDIT RISK MANAGEMENT FOR INVESTMENTS IN DEBT INSTRUCTMENTS

The investments in debt instruments of the 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 September 30, 2021, December 31 and September 30, 2020.

11. NOTES, TRADE RECEIVABLE AND OVERDUE RECEIVABLES

Measured at amortized cost Notes receivable Trade receivable Overdue receivables Deduct:Allowance for bad debts		September 30, 2021 $ 570,911 2,678,703 - 9,612) $ 3,240,002		December 31, 2020 $ 230,490 1,921,373 1,474 12,906) $ 2,140,431		September 30, 2020
	(		(		(	$ 185,379 1,882,100 4,401 20,889) $ 2,050,991

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.

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The following table details the loss allowance of trade receivable: September 30, 2021

12.	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 $3,224,073 $ 21,191 $ 4,350 $ - $ - $ 3,249,614 Loss allowance (Lifetime ECLs) ( 4,385) ( 4,158) ( 1,069) - - ( 9,612) Amortized cost $3,219,688 $ 17,033 $ 3,281 $ - $ - $ 3,240,002 December 31, 2020 NotPastDue 1-30 Days PastDue 31-60 Days PastDue 61-90 Days PastDue More Than 90 Days 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 September 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 $2,045,592 $ 5,604 $ 3,348 $ 12,876 $ 4,460 $ 2,071,880 Loss allowance (Lifetime ECLs) ( 5,979 ) ( 1,823) ( 1,437) ( 7,190) ( 4,460) ( 20,889) Amortized cost $2,039,613 $ 3,781 $ 1,911 $ 5,686 $ - $ 2,050,991 The movements of the loss allowance of trade receivable were as follows: For the Nine Months Ended September 30, 2020 For the Nine Months Ended September 30, 2019 Balance at January 1 $ 12,906 $ 35,510 Add: Net remeasurement of loss allowance - 1,794 Less: Reversal of loss allowance ( 1,820 ) - Amounts written of ( 1,474) ( 16,415) Balance at September 30 $ 9,612 $ 20,889 INVENTORIES September 30, 2021 December 31, 2020 September 30, 2020 Raw materials $ 9,860 $ 3,555 $ 5,703 Work in process 5,674 2,626 3,675 Finished goods 270 336 484 Commodities 1,614,232 1,235,624 908,065 Inventory in transit 186 - 238 $ 1,630,222 $ 1,242,141 $ 918,165		Total $ 3,249,614 9,612) $ 3,240,002 Total $ 2,153,337 12,906) $ 2,140,431 Total
		(

Cost of goods sold for inventories amounted to $3,912,151 thousand, $2,206,966 thousand, $8,915,505 thousand and $6,800,124 thousand, respectively, for the three and nine months ended September 30, 2021 and 2020. The cost of goods sold included inventory write-downs (reversals of inventory write-downs) of $20,023 thousand, ($9,801) thousand, $41,907 thousand and $2,933 thousand, respectively, for the three and nine months ended September 30, 2021 and 2020. The increase in net realizable value of inventories is recognized by disposal of the commodities, which had been allowed for inventory valuation loss.

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13. SUBSIDIARIES

(1) Subsidiaries included in the consolidated financial statements

The consolidated entities were as follows:

Investor	Investee	Nature of Activities	Proportion of Ownership (%)	Proportion of Ownership (%)	Proportion of Ownership (%)	Remark
			September 30, 2021	December 31, 2020	September 30, 2020
The Company Zerone Win Investment Co., Ltd. Asiaone Holdings Ltd.	Zotech Co., Ltd. Zerone Win Investment Co., Ltd. Asiaone Holdings Ltd. WingWill International Co., Ltd. Petacom Technology Co.,Ltd DigiCosmos Tech. Co., Ltd. Techone (Shanghai)Co., Ltd.	Manufacturing for computer equipment Investment Holding company Services of Cloud & information software Services of distribution of information product Services of distribution of information product Services of Network Technology	85.37% 100.00% 100.00% 87.93% 100.00% 100.00% 70.00%	85.37% 100.00% 100.00% 87.93% 100.00% - 70.00%	85.37% 100.00% 100.00% 87.93% 100.00% - 70.00%	A A A A A A, B 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. It was established in May, 2021.
(2) Subsidiaries excluded from the consolidated financial statements：None.

14. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

September 30, 2021 December 31, 2020 September 30, 2020 $ 2,127 $ - $ - 11,500 - - $ 13,627 $ - $ - Percentage of Equity Holding and Voting Rights	September 30, 2021 December 31, 2020 September 30, 2020 $ 2,127 $ - $ - 11,500 - - $ 13,627 $ - $ - Percentage of Equity Holding and Voting Rights

September 30, 2021 32% 37.5%	December 31, 2020 - -	September 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%.

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The Group invested in Leukocyte-Lab Co. Ltd. in September, 2021, which engages mainly in information security management, sale and consulting service, with the investment amount of $11,500 thousand, and share-holding ratio of 37.5%.

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	September 30, 2021 $ 234,892 53,340 8,549 614 12,686 $ 310,081	December 31, 2020 $ 234,892 54,703 9,246 982 8,544 $ 308,367	September 30, 2020 $ 234,892 55,156 10,199 1,106 6,741 $ 308,094
				$ 234,892 55,156 10,199 1,106 6,741 $ 308,094

Except for depreciation recognized, property, plant and equipment haven’t been increased, disposed and impaired for the nine months ended September 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 28.

16. LEASE ARRANGEMENTS

(1) Right-of-use assets

(1) Right-of-use assets
September 30, 2021 December 31, 2020 Carrying amounts of right-of-use assets Buildings $ 13,392 $ 12,683 Office equipment 193 344 $ 13,585 $ 13,027 For the Three Months Ended September 30, 2021 For the Three Months Ended September 30, 2020 For the Nine Months Ended September 30, 2021 Additions to right-of-use assets $ 7,781 Depreciation charge for right-of-use assets Buildings $ 2,434 $ 1,864 $ 7,045 Office equipment 50 50 151 $ 2,484 $ 1,914 $ 7,196 (2) Lease liabilities September 30, 2021 December 31, 2020 Carrying amounts of lease liabilities Current $ 7,925 $ 7,484 Non-current $ 6,055 $ 5,607	September 30, 2020
		$ 14,458 394 $ 14,852 For the Nine Months Ended September 30, 2020
	$ 11,914 $ 5,166 151 $ 5,317 September 30, 2020
		$ 7,444 $ 7,492

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Range of discount rate for lease liabilities was as follows:

Buildings Office equipment Other lease information Expenses relating to short-term leases Expenses relating to low-value asset leases Total cash (outflow) for leases	September 30, 2021 December 31, 2020 0.85%~4.75% 0.95%~4.75% 1.20% 1.20% For the Three Months Ended September 30, 2021 For the Three Months Ended September 30, 2020 For the Nine Months Ended September 30, 2021 $ 201 $ 548 $ 662 $ 13 $ 12 $ 38 ($ 7,721)	September 30, 2021 December 31, 2020 0.85%~4.75% 0.95%~4.75% 1.20% 1.20% For the Three Months Ended September 30, 2021 For the Three Months Ended September 30, 2020 For the Nine Months Ended September 30, 2021 $ 201 $ 548 $ 662 $ 13 $ 12 $ 38 ($ 7,721)	September 30, 2021 December 31, 2020 0.85%~4.75% 0.95%~4.75% 1.20% 1.20% For the Three Months Ended September 30, 2021 For the Three Months Ended September 30, 2020 For the Nine Months Ended September 30, 2021 $ 201 $ 548 $ 662 $ 13 $ 12 $ 38 ($ 7,721)		September 30, 2020	September 30, 2020
					0.95%~4.75% 1.20% For the Nine Months Ended September 30, 2020
		(	$ 662 $ 38 $ 7,721)		(	$ 650 $ 38 $ 6,088)

(3) Other lease information

17. SHORT- TERM BORROWINGS

SHORT-TERM BORROWINGS
Unsecured borrowings `－`Line of credit borrowings	September 30, 2021 $ 450,000	December 31, 2020 $ -	September 30, 2020
				$ -

Interest rate of bank revolving loans was 0.75%~0.78% on September 30, 2021.

18. OTHER PAYABLES

OTHER PAYABLES
Salaries and bonuses payable Compensation of employees, remuneration of directors and supervisors payable Sales tax payable Others	September 30, 2021 $ 71,611 32,957 32,677 199,934 $ 337,179	December 31, 2020 $ 91,256 35,420 1,284 118,422 $ 246,382	September 30, 2020
				$ 61,484 27,998 1,502 93,475 $ 184,459

19. RETIREMENT BENEFIT PLANS

For the three and nine months ended September 30, 2021 and 2020, the Group’s pension costs under the defined benefit plan were made payment $66 thousand, $105 thousand, $197 thousand and $314 thousand, respectively, decided by actuarial pension costs rate on December 31, 2020 and 2019.

20. EQUITY

(1) Ordinary Shares

rdinary Shares
Shares authorized (in thousands of shares) Authorized capital Shares issued and fully paid (in thousands of shares) Issued capital		September 30, 2021 200,000 $ 2,000,000 126,874 $ 1,268,742		December 31, 2020 150,000 $ 1,500,000 125,640 $ 1,256,402		September 30, 2020
						150,000 $ 1,500,000 125,272 $ 1,252,722

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

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(2) Capital Surplus

May be used to offset a deficit, distributed as cash dividends, or transferred to share capital(A) Premium on shares issued above par value Treasury stock transactions Only be used to offset a deficit From exercised and invalid employees share options May not be used for any purpose Employees restricted stock Employees stock options	September 30, 2021 $ 411,846 25,343 20,817 8,426 19,053 $ 485,485	December 31, 2020 $ 405,951 25,343 12,837 8,276 26,350 $ 478,757	September 30, 2020	September 30, 2020
				$ 404,714 25,343 10,583 8,276 27,123 $ 476,039

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

(3) Retained earnings and dividend policy

Under the dividends policy as set forth in the Articles of Incorporation, where ZOTC earns profits in a fiscal year, such profit shall first be set aside to pay applicable taxes, offset losses of previous years, then set aside 10% for legal reserve, and also set aside or reverse a special reserve in accordance with the laws and regulations. Should there be any remaining profits, those profits, plus the accumulated undistributed retained earnings from the previous year shall be used first by ZOTC’s board of directors as the basis for proposing a distribution plan of dividends for preferred shares for the same year, any further remaining unappropriated earnings after the distribution of dividends of preferred shares shall be distributed in accordance with the proposal submitted by the board of directors, for approval at the shareholders’ meeting. The distributable dividends and bonuses may be paid in cash after a supermajority resolution of the board of directors, which shall be submitted to the shareholders’ meeting. For the policies on the distribution of compensation of employees and remuneration of directors and supervisors, refer to compensation of employees and remuneration of directors in Note 21 (7).

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

An appropriation of earnings to a legal reserve shall be made until the legal reserve equals ZOTC’s paid-in capital. The legal reserve may be used to offset deficits. If ZOTC has no deficit and the legal reserve has exceeded 25% of ZOTC’s paid-in capital, the excess may be transferred to capital or distributed in cash.

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

ugust 4, 2021 and June 10, 2020,	respectively, were as follows:
Legal capital Reversal of special reserve Cash dividends	Appropriation of Earnings For Fiscal Year 2020 For Fiscal Year 2019 $ 44,100 $ 35,131 - ( 16,844 ) 377,836 249,574	Dividends Per Share(NT$)
	For Fiscal Year 2020 $ 44,100 - 377,836	For Fiscal Year 2020 $ 3.0	For Fiscal Year 2019 $ 2.0

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(4) Other equity

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

For the Nine Months Ended September 30, 2021 Balance at January 1 $ 74 In respect of the current period Exchange differences on translating the financial statements of foreign operations ( 161) Balance at September 30 ($ 87) B. Unrealized gain (loss) from financial assets at FVTOCI For the Nine Months Ended September 30, 2021 Balance at January 1 $ 39,577 In respect of the current period Unrealized gain (loss)`－`equity instruments 25,283 Cumulative gain (loss) of equity instruments transferred to retained earnings due to disposal ( 32,683) Balance at September 30 $ 32,177	For the Nine Months Ended September 30, 2020	For the Nine Months Ended September 30, 2020
	$ - ( 155) ($ 155) For the Nine Months Ended September 30, 2020
	( (	$ 17,865 1,042 ) 258) $ 16,565

B. Unrealized gain (loss) from 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 24 for the information of relevant explanation.

Balance at January 1 Share-based payment expenses recognized Balance at September 30	For the Nine Months Ended September 30, 2021 ( $ 5,301 ) 2,856 ($ 2,445)	For the Nine Months Ended September 30, 2020	For the Nine Months Ended September 30, 2020
	( (	( (	$ 10,389 ) 4,367 $ 6,022)

21. NET PROFIT

(1) Interest income

nterest income
Bank deposits Financial assets at amortized cost Others ther income Dividend income Others	For the Three Months Ended September 30, 2021 $ 94 894 - $ 988 For the Three Months Ended September 30, 2021 $ 10,022 3,070 $ 13,092	For the Three Months Ended September 30, 2020 $ 36 3,156 1 $ 3,193 For the Three Months Ended September 30, 2020 $ 6,810 480 $ 7,290	For the Nine Months Ended September 30, 2021 $ 606 2,984 7 $ 3,597 For the Nine Months Ended September 30, 2021 $ 11,700 4,504 $ 16,204	For the Nine Months Ended September 30, 2020
				$ 1,961 13,402 5 $ 15,368 For the Nine Months Ended September 30, 2020
					$ 10,911 2,442 $ 13,353

(2) Other income

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(3) Other gains and losses

ther gains and losses
Net foreign exchange profit Net gain arising on financial assets measured at FVTPL Loss on disposal of property, plant and equipment Gain on disposal of investments accounted for using equity method inance costs Interests on bank borrowings Interests on lease liabilities epreciation & amortization Property, plant and equipment Right-of-use assets Intangible assets An analysis of depreciation by function Operating expenses An analysis of amortization by function Operating expenses mployee benefits expense Post-employment benefits Defined contribution plans Defined benefit plans `（`Note 19`）`	For the Three Months Ended September 30, 2021 $ 2,926 228 - - $ 3,154 For the Three Months Ended September 30, 2021 $ 732 43 $ 775 For the Three Months Ended September 30, 2021 $ 3,603 2,484 323 $ 6,410 $ 6,087 $ 323 For the Three Months Ended September 30, 2021 $ 3,160 66 3,226	For the Three Months Ended September 30, 2020 $ 6,303 1,209 ( 40 ) - $ 7,472 For the Three Months Ended September 30, 2020 $ 403 68 $ 471 For the Three Months Ended September 30, 2020 $ 3,861 1,914 177 $ 5,952 $ 5,775 $ 177 For the Three Months Ended September 30, 2020 $ 2,854 105 2,959	For the Nine Months Ended September 30, 2021 $ 21,275 5,470 - - $ 26,745 For the Nine Months Ended September 30, 2021 $ 732 157 $ 889 For the Nine Months Ended September 30, 2021 $ 10,791 7,196 901 $ 18,888 $ 17,987 $ 901 For the Nine Months Ended September 30, 2021 $ 9,064 197 9,261	For the Nine Months Ended September 30, 2020
				$ 661 2,008 - 275 $ 2,944 For the Nine Months Ended September 30, 2020
				$ 1,954 114 $ 2,068 For the Nine Months Ended September 30, 2020
				$ 11,951 5,317 606 $ 17,874 $ 17,268 $ 606 For the Nine Months Ended September 30, 2020
					$ 8,023 314 8,337 (Continued)

(4) Finance costs

(5) Depreciation & amortization

(6) Employee benefits expense

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Share-Based Payment Equity-settled Other employee benefits Total employee benefits expense Analysis by function Operating costs Operating expenses	For the Three Months Ended September 30, 2021 $ 1,153 112,058 $ 116,437 $ 825 115,612 $ 116,437	For the Three Months Ended September 30, 2020 $ 2,201 92,481 $ 97,641 $ 905 96,736 $ 97,641	For the Nine Months Ended September 30, 2021 $ 3,539 317,478 $ 330,278 $ 2,599 327,679 $ 330,278	For the Nine Months Ended September 30, 2020	For the Nine Months Ended September 30, 2020
					$ 9,780 265,507 $ 283,624 $ 2,689 280,935 $ 283,624

(Concluded)

(7) Compensation of employees and remuneration of directors

The Group shall allocate compensation to the employees and directors of the Group not less than 1%~15% and not more than 3% of annual profits during the period, respectively, and the estimate of employees’ compensation and remuneration of directors for the three and nine months ended September 30, 2021 and 2020 were as follows:

Estimate Rate

Estimate Rate
Compensation of employees Remuneration of directors Amount Compensation of employees Remuneration of directors	For the Three Months Ended September 30, 2021 4.00% 2.00% For the Three Months Ended September 30, 2021 $ 9,500 4,750	For the Three Months Ended September 30, 2020 4.00% 2.00% For the Three Months Ended September 30, 2020 $ 6,038 3,020	For the Nine Months Ended September 30, 2021 4.00% 2.00% For the Nine Months Ended September 30, 2021 $ 21,971 10,986	For the Nine Months Ended September 30, 2020
				4.00% 2.00% For the Nine Months Ended September 30, 2020
				$ 18,665 9,333

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

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

bruary 26, 2020, 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 -

22. INCOME TAXES RELATING TO CONTINUING OPERATION S

(1) Income tax recognized in profit or loss

Major components of income tax expense are as follows:

Current tax In respect of the current period Income tax on unappropriated earnings Adjustments for prior year Deferred tax In respect of the current period Income tax expense recognized in profit or loss	For the Three Months Ended September 30, 2021 $ 43,270 953 - ( 1,970) $ 42,253	For the Three Months Ended September 30, 2020 $ 24,531 - - 2,234 $ 26,765	For the Nine Months Ended September 30, 2021 $ 110,319 953 ( 464 ) ( 6,627) $ 104,181	For the Nine Months Ended September 30, 2020	For the Nine Months Ended September 30, 2020
	(		( (		$ 86,464 - 330 3,220 $ 90,014

(2) Income tax assessment

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

Co. Name 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

23. 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

Net Profit for the Period
Earnings used in the computation of basic/diluted earnings per share Shares Weighted average number of ordinary shares used in the computation of basic earnings per share	For the Three Months Ended September 30, 2021 $ 179,571 For the Three Months Ended September 30, 2021 126,185	For the Three Months Ended September 30, 2020 $ 115,138 For the Three Months Ended September 30, 2020 124,524	For the Nine Months Ended September 30, 2021 $ 412,200 For the Nine Months Ended September 30, 2021 125,820	For the Nine Months Ended September 30, 2020
				$ 349,978 For the Nine Months Ended September 30, 2020
				124,245 (Continued)

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Effect of potentially dilutive ordinary shares: Employees’ Compensation Employee stock options Restricted stock awards Weighted average number of ordinary shares used in the computation of diluted earnings per share	For the Three Months Ended September 30, 2021 472 2,214 280 129,151	For the Three Months Ended September 30, 2020 477 3,027 371 128,399	For the Nine Months Ended September 30, 2021 588 2,372 385 129,165	For the Nine Months Ended September 30, 2020 607 2,734 450 128,036

(Concluded)

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

24. SHARE - BASED PAYMENT ARRANGEMENTS

(1) Employee Share Option Plan

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

Information on employee share options is as follows:

Employee share option Balance at January 1 Options exercised Options forfeited Outstanding options, at September 30 Options exercisable, at September 30	For the Nine Months Ended September 30, 2021 Number of Options (In Thousands of Units) Weighted Average Exercise Price (NT$) 4,468 $ 16.70 ( 1,249 ) 14.72 ( 88) 16.65 3,131 16.18 1,691	For the Nine Months Ended September 30, 2020	For the Nine Months Ended September 30, 2020
	Number of Options (In Thousands of Units) 4,468 ( 1,249 ) ( 88) 3,131 1,691	Number of Options (In Thousands of Units) 5,653 ( 649 ) - 5,004 2,246	Weighted Average Exercise Price (NT$) $ 17.18 14.39 - 16.48
	( (	(

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

September 30, 2021	September 30, 2021	December 2020	31, Weighted- Over-Age Remaining Contractual Life (Years) 0.67 1.68 3.01 3.67	September 30, 2020	September 30, 2020
Range of Exercise Price (NT$)	Weighted- Over-Age Remaining Contractual Life (Years)	Range of Exercise Price (NT$)		Range of Exercise Price (NT$)	Weighted- Over-Age Remaining Contractual Life (Years)
$ 10.90 (Note) 12.50 (Note) 15.70 (Note) 17.20 (Note)	- 0.93 2.26 2.92	$ 11.70 (Note) 13.40 (Note) 16.80 (Note) 18.40 (Note)		$ 11.70 (Note) 13.40 (Note) 16.80 (Note) 18.40 (Note)	0.92 1.93 3.26 3.92

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

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

Securities price of the vested date Exercised price Foreseeable volatility rate Duration Foreseeable dividend rate 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 were $777 thousand, $1,480 thousand, $683 thousand and $5,413 thousand for the three and nine months ended September 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 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.
C. An employee who remains employed at the company after 3 years 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.
D. An employee who remains employed at the company after 4 years 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.

After employees received the vested shares from the Company, it will redeem and cancel the issued employee restricted stock 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 $376 thousand, $721 thousand, $2,856 thousand and $4,367 thousand for the three and nine months ended September 30, 2021 and 2020. As of September 30, 2021 and 2020, the unearned employee benefit totaled $2,445 thousand and $6,022 thousand, accounted for as the decrease in other equity.

25. CAPITAL RISK MANAGEMENT

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

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

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

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26. FINANCIAL INSTRUMENTS

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

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

Financial Assets Financial assets at amortized cost	September 30, 2021	September 30, 2021	December 31, 2020	December 31, 2020	September 30, 2020	September 30, 2020
	Carrying Amount	Fair Value	Carrying Amount	Fair Value	Carrying Amount	Fair Value

－ Foreign corporate bonds $ 15,551 $ 15,597 $ 44,061 $ 45,323 $ 61,149 $ 62,464

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

A. Fair value hierarchy

Fair value hierarchy
September 30, 2021 Financial assets measured at FVTPL Convertible bonds Domestic listed shares Fund beneficiary certification Total Financial assets measured at FVTOCI Equity investments `－`Domestic listed shares and emerging market shares `－`Domestic unlisted shares Total December 31, 2020 Financial assets measured at FVTPL Convertible bonds Domestic listed shares Fund beneficiary certification Total Financial assets measured at FVTOCI Equity investments `－`Domestic listed shares and emerging market shares `－`Domestic unlisted shares Total	Level 1 $ 7,736 14,445 29,355 $ 51,536 $ 290,066 - $ 290,066 Level 1 $ 15,966 16,188 355,581 $ 387,735 $ 309,281 - $ 309,281	Level 2 $ - - - $ - $ - - $ - Level 2 $ - - - $ - $ - - $ -	Level 3 $ - - 8,934 $ 8,934 $ 12,092 46,213 $ 58,305 Level 3 $ - - 8,529 $ 8,529 $ 12,092 18,142 $ 30,234	Total
				$ 7,736 14,445 38,289 $ 60,470 $ 302,158 46,213 $ 348,371 Total
				$ 15,966 16,188 364,110 $ 396,264 $ 321,373 18,142 $ 339,515

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September 30, 2020 Financial assets measured at FVTPL Convertible bonds Domestic listed shares Fund beneficiary certification Total Financial assets measured at FVTOCI Equity investments `－`Domestic listed shares and emerging market shares `－`Domestic unlisted shares Total		Level 1 $ 22,718 28,392 15,734 $ 66,844 $ 287,319 - $ 287,319		Level 2 $ - - - $ - $ - - $ -		Level 3 $ - 8,240 - $ 8,240 $ 10,437 18,743 $ 29,180		Total
								$ 22,718 36,632 15,734 $ 75,084 $ 297,756 18,743 $ 316,499

There were no transfers between Level 1 and Level 2 for nine months ended September 30, 2021 and 2020, respectively.

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

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

(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)	September 30, 2021 $ 60,470 4,475,988 348,371 3,817,964	December 31, 2020 $ 396,264 3,098,473 339,515 2,492,646	September 30, 2020
			$ 75,084 3,091,277 316,499 1,972,674

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

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

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

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A. Market risk

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

(A) Foreign currency risk

The Group’s purchases 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.

The carrying amounts of the Group’s foreign currency denominated monetary assets and monetary liabilities of non-functional currency calculated (including those eliminated on consolidation) at the end of the reporting period are set out in Note 30.

Sensitivity analysis

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

The sensitivity analysis included only outstanding foreign currency denominated monetary items and adjusts their translation at the end of the reporting period for a 5% change in foreign currency rates. If the New Taiwan dollar appreciates/depreciates 5% against the relevant currency, the Group’s net profit for the nine months ended September 30, 2021 and 2020 would increase/decrease by $18,258 thousand and $6,684 thousand, respectively.

(B) Interest rate risk

The Group was exposed to interest rate risk at fair value, because the Group borrowed funds at fixed interest rates. The Group assesses the interest rate of the bank loan regularly, observes influences on profits or losses from fluctuation range of the interest rate, and keeps contact with the bank based on the actual requirement to acquire favorable interest rate of the loan.

The carrying amount of the Group’s financial assets and financial liabilities with exposure to 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	September 30, 2021 $ 200,980 463,980 1,020,171	December 31, 2020 $ 206,574 13,091 739,139	September 30, 2020
			$ 526,686 14,936 500,239

Sensitivity analysis

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

If interest rates had been 50 basis points higher/lower and all other variables were held constant, the Group’s pre-tax profit for the nine months ended September 30, 2021 and 2020 would increase/ decrease by $3,826 thousand and $1,876 thousand, respectively. Exposure is triggered by risks of cash flows of the Group’s variable interest rates of deposits.

(C) Other price risk

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

Sensitivity analysis

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

If equity prices had been 5% higher/lower, pre-tax profit for the nine months ended September 30, 2021 and 2020 would have increased/decreased by $3,024 thousand and $3,754 thousand, respectively, as a result of the changes in fair value of financial assets at FVTPL, and the other comprehensive income for the nine months ended September 30, 2021 and 2020 would have increased/decreased by $17,419 thousand and $15,825 thousand, respectively, as a result of the changes in fair value of financial assets at FVTOCI.

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B. Credit risk

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

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

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

The credit 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 49%, 33% and 36% of trade receivable, respectively, as of September 30, 2021, December 31, 2020 and September 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 interest and principal of cash flows.

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

September 30, 2021

September 30, 2021
Non-derivative financial liabilities No Interest-bearing liabilities Lease liabilities Fixed interest rate liabilities December 31, 2020 Non-derivative financial liabilities No Interest-bearing liabilities Lease liabilities September 30, 2020 Non-derivative financial liabilities No Interest-bearing liabilities Lease liabilities	Less than 1 Year $ 3,367,091 8,054 450,750 $ 3,825,895 Less than 1 Year $ 2,491,846 7,636 $ 2,499,482 Less than 1 Year $ 1,971,874 7,620 $ 1,979,494	1-5 Years $ - 6,115 - $ 6,115 1-5 Years $ - 5,192 $ 5,192 1-5 Years $ - 7,608 $ 7,608	5+ Years
			$ - - - $ - 5+ Years
			$ - - $ - 5+ Years
			$ - - $ -

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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. After considering the financial position of the Group, the management does not think the banks will execute their rights of requiring the Group to repay the bank loans.

As of September 30, 2021, December 31, 2020 and September 30, 2020, the Group’s unused short-term credit of limit of the bank were $800,000 thousand, $1,250,000 thousand and $1,250,000 thousand, respectively.

27. TRANSACTIONS WITH RELATED PARTIES

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

Compensation of key management personnel

Short-term employee benefits	For the Three Months Ended September 30, 2021 $ 7,857	For the Three Months Ended September 30, 2020 $ 3,287	For the Nine Months Ended September 30, 2021 $ 43,380	For the Nine Months Ended September 30, 2020	For the Nine Months Ended September 30, 2020
					$ 41,558

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

28. ASSETS PLEDGED AS COLLATERAL

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

September 30, 2021 $ 206,579 35,561 $ 242,140	December 31, 2020 $ 207,620 25,465 $ 233,085	September 30, 2020	September 30, 2020
			$ 207,967 25,345 $ 233,312

29.;SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

(1) As of September 30, 2021, the Group opens NT$ 87,000 thousand of cashier order for payment guaranteed for Microsoft Taiwan Corporation.
(2) As of September 30, 2021, the Group opens NT$ 50,000 thousand of cashier order for payment guaranteed for Microsoft Regional Sales Corporation.

30.;SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

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

September 30, 2021

September 30, 2021
Financial assets Monetary items USD Financial liabilities Monetary items USD	Foreign Currencies $ 48,493 61,605	Exchange Rate 27.85`（`USD:NTD`）` 27.85`（`USD:NTD`）`		Carrying Amount
				$ 1,350,530 $ 1,715,699

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December 31, 2020

December 31, 2020
Financial assets Monetary items USD Financial liabilities Monetary items USD September 30, 2020 Financial assets Monetary items USD Financial liabilities Monetary items USD	Foreign Currencies $ 12,526 41,312 Foreign Currencies $ 24,018 28,612	Exchange Rate 28.48`（`USD:NTD`）` 28.48`（`USD:NTD`）` Exchange Rate 29.10`（`USD:NTD`）` 29.10`（`USD:NTD`）`	Carrying Amount
			$ 356,740 $ 1,176,566 Carrying Amount
			$ 698,924 $ 832,609

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

For the Nine Months Ended September 30, 2021 Exchange Rate Net Foreign exchange gain (loss) 28.067 (USD:NTD) $ 21,275 For the Three Months Ended September 30, 2021 Exchange Rate Net Foreign exchange gain (loss) 27.858 (USD:NTD) $ 2,926	For the Nine Months Ended September 30, 2020	For the Nine Months Ended September 30, 2020
	Exchange Rate Net Foreign exchange gain (loss) 29.817 (USD:NTD) $ 661 For the Three Months Ended September 30, 2020	Net Foreign exchange gain (loss)
Exchange Rate 27.858 (USD:NTD)	Exchange Rate 29.450 (USD:NTD)	Net Foreign exchange gain (loss)
		$ 6,303

SEPARATELY DISCLOSED ITEMS
(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)
30 -
(2) Information on investees: (Table 4)
(3) Information on investment in Mainland China:
A. Information on any investee company in mainland China, showing the name, principal business activities, paid-in capital, method of investment, inward and outward remittance of funds, ownership percentage, net income of investees, investment income or loss, carrying amount of the investment at the end of the period, repatriations of investment income, and limit on the amount of investment in the mainland China area. (Table 5)
B. Any of the following significant transactions with investee companies in mainland China, either directly or indirectly through a third party, and their prices, payment terms, and unrealized gains or losses: None.
- (i) The amount and percentage of purchases and the balance and percentage of the related payables at the end of the period.
- (ii) The amount and percentage of sales and the balance and percentage of the related receivables at the end of the period.
- (iii) The amount of property transactions and the amount of the resultant gains or losses.
- (iv) The balance of negotiable instrument endorsements or guarantees or pledges of collateral at the end of the period and the purposes.
- (v) The highest balance, the end of period balance, the interest rate range, and total current period interest with respect to financing of funds.
- (vi) Other transactions that have a material effect on the profit or loss for the period or on the financial position, such as the rendering or receiving of services.
(4) Information on major shareholder: List of all shareholders with ownership of 5 percent or greater showing the name, the number of shares and percentage of ownership held by each shareholder. (Table 6)

32. SEGMENT INFORMATION

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

(1) Segments revenue & operating results

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

portable segments:
For the nine months ended September 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 Net gain on derecognition of financial assets at amortized cost Finance costs Share of loss of associates accounted for using equity method Net income before tax		The business division of brands distribution $ 9,672,710 - $ 9,672,710 $ 596,363		Other $ 167,339 38,004 $ 205,343 $ 13,704)		Eliminations $ - 38,004) $ 38,004) $ -		Total
			(		( (		$ 9,840,049 - 9,840,049 $ 9,840,049 $ 582,659 ( 113,893 ) 3,597 16,204 26,745 2,692 ( 889 ) ( 1,873) $ 515,242

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For the nine months ended September 30, 2020 Revenues from external customers Inter-segment revenues Segment revenues Consolidated revenues Segment profit (loss) General administration division costs and remuneration of directors Interest income Other income Other gains and losses Finance costs Net income before tax		The business division of brands distribution $ 7,485,310 - $ 7,485,310 $ 518,039		Other $ 113,231 26,951 $ 140,182 $ 1,763)		Eliminations $ - 26,951) $ 26,951) $ -		Total
			(		( (		$ 7,598,541 - 7,598,541 $ 7,598,541 $ 516,276 ( 107,562 ) 15,368 13,353 2,944 ( 2,068) $ 438,311

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:

d services:
IT Infrastructure Network & Information Security Cloud Platform & Application Big Data & Application Other	For the Nine Months Ended September 30, 2021 $ 4,125,362 3,651,634 1,645,925 413,903 3,225 $ 9,840,049	For the Nine Months Ended September 30, 2020
			$ 2,216,140 3,578,137 1,434,828 366,445 2,991 $ 7,598,541

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ZERO ONE TECHNOLOGY CO., LTD. AND SUBSIDIARIES

FINANCING PROVIDED TO OTHERS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021

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

No. (Note 1)	Lender	Borrower	Financial Statement Account	Related Party	Maximum Balance for the Period (Note 2)	Ending Balance	Amount Actually Drawn	Interest Rate (%)	Nature for Financing (Note 3)	Transaction Amount	Reasons for Short-term Financing	Allowance for Bad Debt	Collateral	Collateral	Financing Limit for Each Borrower (Note 4)	Aggregate Financing Limit (Note 5)	Note
													Item	Value
0 0	ZOTC ZOTC	Zerone Win Investment Co., Ltd. WingWill International Co., Ltd.	Other receivables from related parties Other receivables from related parties	Yes Yes	$ 50,000 20,000	$ 50,000 20,000	$ - 5,000	3% 3%	2 2	$ - -	Operating Capital Operating Capital	$ - -	`－` `－`	$ - $ -	$ 273,868 273,868	$ 547,736 547,736

Note 1：The number column is organized as follows：

(1) Number 0 represents the issuer.

(2) The investee companies are numbered from 1 in order.

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

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

(1) 1:The borrower has business contact with the creditor.
(2) 2:The borrower has short-term financing necessities.

Note 4：For short-term financing necessities, the financing limit for each borrower shall not exceed 10% of the lender’s net worth as stated in its latest financial statement audited or reviewed by CPAs.

Note 5：Aggregate financing limit shall not exceed 20% of the lender’s net worth as stated in its latest financial statement audited or reviewed by CPAs.

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ZERO ONE TECHNOLOGY CO., LTD.AND SUBSIDIARIES

MARKETABLE SECURITIES HELD SEPTEMBER 30, 2021

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

Holding Company Name	Type and Name of Marketable Securities (Note 1)	Relationship with the Holding Company	Financial Statement Account		September 30,2021	September 30,2021		Note
				Number of Shares	Carrying Amount	Percentage of Ownership (%)	Fair Value
ZOTC	Beneficiary certificates KGI Kaefer Fund KGI Taiwan Multi-Asset Income Fund KGI Taiwan Select-Asset Income Fund Corporate bond M.J. International Co. Ltd.`－`1st convertible bonds LITON TECHNOLOGY CORP.`－`4th convertible bonds EVA AIRWAYS CORPORATION`－`5th convertible bonds 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. Promaster Technology Corp. Unex Technology Corp. Da-Chang Start-Up Investment Co. Ltd.	`－` `－` `－` `－` `－` `－` `－` `－` `－` Director of ZOTC `－` `－` `－`	Financial assets at FVTPL `－` non-current Financial assets at FVTPL `－` non-current Financial assets at FVTPL `－` non-current Financial assets at FVTPL `－` current Financial assets at FVTPL `－` current Financial assets at FVTPL `－` current Financial assets at 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 Financial assets at FVTOCI`－` non-current Financial assets at FVTOCI`－` non-current Financial assets at FVTOCI`－` non-current	170,199 1,198,020 500,325 20`（`Units`）` 10`（`Units`）` 40`（`Units`）` 5`（`Units`）` 166,000 80,000 580,000 2,689,200 1,264,172 175,000 1,500,000	3,437 13,154 5,497 2,050 1,170 4,516 15,551 10,309 4,136 15,370 27,430 12,092 3,231 14,911	- - - - - - - - - 1.89 0.83 2.72 1.68 2.73	3,437 13,154 5,497 2,050 1,170 4,516 15,597 10,309 4,136 15,370 27,430 12,092 3,231 14,911

(Continued)

34 -

Holding Company Name	Type and Name of Marketable Securities (Note 1)	Relationship with the Holding Company	Financial Statement Account		September 30,2021	September 30,2021		Note
				Number of Shares	Carrying Amount	Percentage of Ownership (%)	Fair Value
ZOTC Zerone Win 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 Shin Kong Financial Holding Co., Ltd. Preferred Shares A Tatung System Technologies Inc.	`－` `－` `－` `－` `－` `－` `－` `－` `－` `－` `－` `－` `－` `－` `－` `－` `－`	Financial assets at FVTOCI`－` non-current Financial assets at FVTOCI`－` non-current Financial assets at FVTOCI`－` non-current Financial assets at FVTOCI`－` non-current Financial assets at FVTOCI`－` non-current Financial assets at FVTOCI`－` non-current Financial assets at FVTOCI`－` non-current Financial assets at FVTOCI`－` non-current Financial assets at FVTOCI`－` non-current Financial assets at FVTOCI`－` non-current Financial assets at FVTOCI`－` non-current Financial assets at FVTOCI`－` non-current Financial assets at FVTOCI`－` non-current Financial assets at FVTOCI`－` non-current Financial assets at FVTOCI`－` non-current Financial assets at FVTOCI`－` non-current Financial assets at FVTOCI`－` non-current	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 50,000 1,500,000	$ 8,321 3,619 24,960 12,504 5,607 14,306 13,176 34,615 9,240 3,122 29,970 - - - 11,868 2,070 60,075	- - - - - - - - - - - 3.45 0.22 9.32 - - 1.69	$ 8,321 3,619 24,960 12,504 5,607 14,306 13,176 34,615 9,240 3,122 29,970 - - - 11,868 2,070 60,075

(Continued)

35 -

Holding Company Name	Type and Name of Marketable Securities (Note 1)	Relationship with the Holding Company	Financial Statement Account		September 30,2021	September 30,2021		Note
				Number of Shares	Carrying Amount	Percentage of Ownership (%)	Fair Value
Zerone Win Investment Co., Ltd. Petacom Technology Co., Ltd. Zotech Co., Ltd.	LEO Systems, Inc. GrandTech C.G. Systems Inc. InfinitiesSoft Solutions Inc. FiduciaEdge Technologies Co., Ltd. Beneficiary certificates Taishin 1699 Money Market Fund Stock WPG Holdings Limited Preferred Shares A	`－` `－` `－` `－` `－` `－`	Financial assets at FVTOCI`－` non-current Financial assets at FVTOCI`－` non-current Financial assets at FVTOCI`－` non-current Financial assets at FVTOCI`－` non-current Financial assets at FVTPL `－` current Financial assets at FVTOCI`－` non-current	20,000 70,000 857,143 500,000 1,185,097 200,000	$ 469 3,454 20,571 7,500 16,201 9,890	0.02 0.12 8.82 4.20 - -	$ 469 3,454 20,571 7,500 16,201 9,890

(Concluded)

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

Note 2 ： Relevant information about Investments in equity of subsidiaries and associates, please refer to Table 4 & 5.

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ZERO ONE TECHNOLOGY CO., LTD.AND SUBSIDIARIES

INFORMATION ON INVESTEES

FOR NINE MONTHS ENDED SEPTEMBER 30, 2021

Table3 (In Thousands of New Taiwan Dollars)

No. (Note 1)	Investee Company	Counterparty	Relationship (Note 2)		Transaction Details	Transaction Details
				Financial Statement Accounts	Amount (Note 4)	Payment Terms	% of Total Sales or Assets (Note 3)
0	ZOTC	WingWill International Co., Ltd. Techone (Shanghai) Co., Ltd.	1 1	Sales revenue Trade receivables Other trade receivables Sales revenue	$ 26,210 8,178 5,010 7,280	Note 5 Note 5 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.
Between subsidiaries.
Note 3：Percentage of transaction amounts to consolidated operating revenues or consolidated total assets: If the account is a balance sheet account, it shall be calculated by dividing the ending balance into consolidated total assets; if the account is an income statement account, it shall be calculated by dividing the cumulative balance into consolidated operating revenues.
Note 4：Only the related parties’ transactions over 5,000 thousand are disclosed.
Note 5：The terms of transactions with intercompany partners are similar to non-related parties.
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ZERO ONE TECHNOLOGY CO., LTD. AND SUBSIDIARIES

INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT INTERCOMPANY TRANSACTIONS FOR NINE MONTHS ENDED SEPTEMBER 30, 2021

Table 4 ; (In Thousands of New Taiwan Dollars)

Investor	Investee	Location	Main Businesses	Original Investment Amount	Original Investment Amount	As of September 30,2021	As of September 30,2021	As of September 30,2021	Net Income (Loss) of the Investee	Share of Profit (Loss)	Note
				September 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. Leukocyte-Lab Co. Ltd	Taipei City Taipei City Republic of Seychelles Taipei City 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 Information security management, sales and consulting service etc.	$ 35,000 300,000 10,063 25,500 50,000 50,000 4,000 11,500	$ 35,000 149,000 10,063 25,500 50,000 - - -	3,500,000 30,000,000 320,000 8,793,103 50,000,000 5,000,000 4,000,000 240,0000	85.37 100.00 100.00 87.93 100.00 100.00 32.00 37.50	$ 37,098 326,939 10,642 969 41,995 50,000 2,127 11,500	( $ 6,938 ) ( 9,930 ) 1,277 ( 5,700 ) ( 5,556 ) - ( 5,852 ) -	( $ 5,923 ) ( 9,930 ) 1,277 ( 5,012 ) ( 5,556 ) - ( 1,873 ) -	Subsidiary Subsidiary Subsidiary Sub- subsidiary Sub- subsidiary Sub- subsidiary Associate Associate

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

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ZERO ONE TECHNOLOGY CO., LTD. AND SUBSIDIARIES

INFORMATION ON INVESTMENTS IN MAINLAND CHINA FOR NINE MONTHS ENDED SEPTEMBER 30, 2021 Table 5

(In Thousands of New Taiwan Dollars/Foreign Currency)

Investee Company	Main Businesses and Products	Paid-in Capital	Paid-in Capital	Method of Investment	Accumulated Outward Remittance for Investment from Taiwan as of January 1, 2021	Remittance of Funds	Remittance of Funds	Accumulated Outward Remittance for Investment from Taiwan as of September 30, 2021	Net Income (Loss) of the Investee	% Ownership of Direct or Indirect Investment	Investment Gain (Loss) (Note 2)	Carrying Amount as of September 30, 2021	Accumulated Repatriation of Investment Income as of September 30, 2021	Note
						Outward	Inward
Techone (Shanghai) Co., Ltd.	Services of Network Technology	$ 12,915 ( RMB 3,000 )		(Note 1)	$ 9,118	$ -	$ -	$ 9,118	$ 1,881	70%	$ 1,316	$ 10,320	$ -	`－`

Accumulated Outward Remittance for Investments in Mainland China as of September 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			$ 1,643,208

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

Note 2 ： Amount was recognized based on the financial statements which were not reviewed by CPAs on September 30, 2021.

Note 3 ： Determined by sixty percent (60%) of the Company’s net worth, reviewed by CPAs on September 30, 2021 (2,738,680×60% ＝ 1,643,208 ）。

Note 4 ： For foreign currency conversion, gain (loss) are converted by the average exchange rate in 2021 Q3. Other amounts are converted into New Taiwan Dollars by the exchange rate on September 30, 2021.
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ZERO ONE TECHNOLOGY CO., LTD. AND SUBSIDIARIES

INFORMATION ON MAJOR SHAREHOLDERS SEPTEMBER 30, 2021

Table 6

Shareholders	Shares	Shares
	Number of Shares	Ownership Percentage
Ceres Investment Co., Ltd.	9,506,594	7.49%

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

40 -

AI assistant

ZERO ONE — Interim / Quarterly Report 2021

52262_rns_2021-12-31_c9a496a2-9478-4007-8197-f5a932beb80d.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

(In Thousands of New Taiwan Dollars)

ZERO ONE TECHNOLOGY CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

ZERO ONE TECHNOLOGY CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY For the nine months ended September 30, 2021 and 2020

ZERO ONE TECHNOLOGY CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Reviewed, Not Audited)

(In Thousands of New Taiwan Dollars)

ZERO ONE TECHNOLOGY CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Reviewed, Not Audited)

(In Thousands of New Taiwan Dollars)

ZERO ONE TECHNOLOGY CO., LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021 and 2020

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

(4) Other Significant Accounting Policies

A. Defined retirement benefits

B. Taxation

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

6. CASH AND CASH EQUIVALENTS

7. FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS

8.;FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

Investments in equity instruments

9. FINANCIAL ASSETS AT AMORTIZED COST

10. CREDIT RISK MANAGEMENT FOR INVESTMENTS IN DEBT INSTRUCTMENTS

11. NOTES, TRADE RECEIVABLE AND OVERDUE RECEIVABLES

13. SUBSIDIARIES

14. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

15. PROPERTY, PLANT AND EQUIPMENT

16. LEASE ARRANGEMENTS

17. SHORT- TERM BORROWINGS

18. OTHER PAYABLES

19. RETIREMENT BENEFIT PLANS

20. EQUITY

(2) Capital Surplus

(3) Retained earnings and dividend policy

(4) Other equity

C. Unearned employee benefit

21. NET PROFIT

(2) Other income

(7) Compensation of employees and remuneration of directors

Estimate Rate

22. INCOME TAXES RELATING TO CONTINUING OPERATION S

(1) Income tax recognized in profit or loss

23. EARNINGS PER SHARE

24. SHARE - BASED PAYMENT ARRANGEMENTS

(1) Employee Share Option Plan

(2) Employees restricted stock

25. CAPITAL RISK MANAGEMENT

26. FINANCIAL INSTRUMENTS

A. Market risk

(A) Foreign currency risk

Sensitivity analysis

(B) Interest rate risk

Sensitivity analysis

(C) Other price risk

Sensitivity analysis

B. Credit risk

C. Liquidity risk

Liquidity & interest rate risk table

27. TRANSACTIONS WITH RELATED PARTIES

28. ASSETS PLEDGED AS COLLATERAL

29.;SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

30.;SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

December 31, 2020

ZERO ONE Interim / Quarterly Report 2021