BLG - Audit Report / Information 2021

Stock Code: 1805

Better Life Group Co., Ltd.

Parent Company Only Financial Statements and Independent Auditors' Report

For the Years Ended December 31, 2021 and 2020

Address: 4F, No. 303, Xinhu 1st Road, Neihu District, Taipei City Tel.: (02)2791-5688

～ 1 ～

Table of Contents
Item I. Cover II. Table of Contents III. Independent Auditors’ Report IV. Balance Sheets V. Statements of Comprehensive Income VI. Statements of Changes in Equity VII. Statements of Cash Flows VIII. Notes to Parent Company Only Financial Statements (I) Organization and Operations (II) The Authorization of Financial Statements (III) Application of New and Revised International Financial Reporting Standards (IV) Summary of Significant Accounting Policies (V) Critical Accounting Judgements and Key Sources of Estimation and Uncertainty (VI) Summary of Significant Accounting Items (VII) Related Party Transactions (VIII) Assets Pledged (IX) Significant Contingent Liabilities and Unrecognized Commitments (X) Major Disaster Loss (XI) Material Events After the Balance Sheet Date (XII) Others (XIII) Additional Disclosures 1. Information on significant transactions 2. Information on investees 3. Information on investments in mainland China 4. Information on major shareholders (XIV) Information on Operating Segments IX. Statements of Significant Accounting Items	Page No.
	1 2 3 4 5 6 7 8 8 8~9 9~20 21 22~41 42~44 44 45 45 45 46 47~48 48 49 49 49 50~55

Table of Contents

Item
I.
Cover
II.
Table of Contents
III. Independent Auditors’ Report
IV. Balance Sheets
V.
Statements of Comprehensive Income
VI. Statements of Changes in Equity
VII. Statements of Cash Flows
VIII. Notes to Parent Company Only Financial Statements
(I) Organization and Operations
(II) The Authorization of Financial Statements
(III) Application of New and Revised International Financial Reporting
Standards
(IV) Summary of Significant Accounting Policies
(V) Critical Accounting Judgements and Key Sources of Estimation and
Uncertainty
(VI) Summary of Significant Accounting Items
(VII) Related Party Transactions
(VIII) Assets Pledged
(IX) Significant Contingent Liabilities and Unrecognized Commitments
(X) Major Disaster Loss
(XI) Material Events After the Balance Sheet Date
(XII) Others
(XIII) Additional Disclosures
1. Information on significant transactions
2. Information on investees
3. Information on investments in mainland China
4. Information on major shareholders
(XIV) Information on Operating Segments
IX. Statements of Significant Accounting Items

Page No.

1
2
3
4
5
6
7
8
8
8~9
9~20
21
22~41
42~44
44
45
45
45
46
47~48
48
49
49
49
50~55

～ 2 ～

Independent Auditors’ Report

To Better Life Group Co., Ltd.,

Audit opinion

We have audited the accompanying financial statements of Better Life Group Co., LTD., which comprise the balance sheet as of December 31, 2021 and 2020, and the Statements of Comprehensive Income, the statement of changes in equity and the statement of cash flows from January 1, 2021 to December 31, 2021 and from January 1, 2020 to December 31, 2020, as well as the notes to the parent company only financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying parent company only financial statements present fairly, in all material respects, the financial position of the Better Life Group Co., LTD. as of December 31, 2021 and 2020 and for the years then ended, and its financial performance and cash flows for the years then ended in conformity with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for the audit opinion

We conducted our audits in accordance with the Regulations Governing the Auditing and Attestation of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the Republic of China. We explain further our responsibility under the standards in the section concerning the auditor’s responsibility in the audit of parent company only financial statements. The personnel in our firm, subject to independence requirements, maintains independence from Better Life Group Co., LTD. and fulfills other responsibilities in accordance with the Norm of Professional Ethics for Certified Public Accountant and under the norms. We are convinced that we have acquired enough and appropriate audit evidence to serve as the basis of audit opinion.

Key audit matters

Key audit matters are the matters of most significance based on our professional judgement and audits of parent company only financial statements for 2021. These matters have been dealt with in the audit of the parent company only financial statements as a whole and during the process of forming the audit opinion. Hence, we do not issue opinions separately on such matters. Key audit matters of the parent company only financial statements of the Company are stated as follows:

I. Revenue recognition
Please refer to Note 4 (15) to the parent company only financial statements regarding the accounting policy of revenue recognition. Please refer to Note 6 (18) for the detailed breakdown of contract revenue.

Description:

The primary operating revenue for Better Life Group Co., LTD. in 2021 were from the sale of real estate. The risk of material misstatement lies in the truthfulness of revenue. As operating revenue are concerned with the operating performance of management, it is possible that management seeks to achieve expected net profits with early or deferred operating revenue recognition and causes material misstatement of operating revenue. Hence, the testing of revenue recognition was one of the significant assessments for our audits of Better Life Group Co., LTD.’s financial statements. Audit procedures

The audit procedures we have implemented for the specific aspects described in the above-

～ 3-1 ～

mentioned key audit matters include:

Performed a control test on sales and payment collection cycles to evaluate how the control prevents and detects errors and fraud in revenue recognition;
Performed a cut-off test on revenue from the sale of property to assess whether the revenue in the preceding paragraph is recognized in an appropriate period.
Substantive tests on revenue recognition by sampling and cross referencing the documents in relation to real estate sale contracts and property ownership registrations and by inspecting the sale system data and general ledger entries, in order to assess whether Better Life Group Co., LTD. recognized revenue according to relevant standards and regulations.
II. Inventory valuation

Please refer to Note 4 (7) to the parent company only financial statements for the accounting policy of inventory valuation. Please refer to Note 5 to the parent company only financial statements for the uncertainties in relation to the accounting estimates and assumptions of inventory valuation and to Note 6 (4) to the parent company only financial statements for inventory details.

Description:

Inventory is an important operating asset for Better Life Group Co., LTD. It accounted for approximately 58% of the total assets. Inventory valuation is based on International Financial Reporting Standards No. 2. The net realizable value of Better Life Group Co., LTD.’s inventory is based on future selling prices and construction costs estimated by management and subject to the influence of the political and economic environments. Inappropriate estimates of the net realizable value will result in a misstatement of financial reports. Hence, the testing of inventory valuation was one of the significant assessments for our audits of Better Life Group Co.,LTD.’s financial statements.

Audit procedures:

Our main inspection procedures on the above key audit matter include the acquisition of Better Life Group Co., LTD.’s data for estimates of the net realizable value of inventory, sampling of such data to check against the contracts sold, reference to the Ministry of Interior’s most recently published actual transaction prices of real estate or the transaction prices in the same proximity so as to evaluate the next realizable value of properties available for sale. To assess whether the net realizable value of buildings under construction is reasonable, we sampled and inspected the return-on-investment analysis by the Company, compared the return-on-investment data and market prices and, where necessary, obtained the appraisal reports.

Responsibility of management and those charged with governance for parent company only financial statements

The responsibilities of the management are to prepare the parent company only financial statements with fair presentation in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and to maintain necessary internal control associated with the preparation in order to ensure that the financial statements are free from material misstatement arising from fraud or error. When preparing the parent company only financial statements, management is also responsible for the assessment of Better Life Group Co., LTD.’s ability to continue as a going concern, disclosure of relevant matters and the adoption of the going concern basis of accounting unless management either intends to liquidate Better Life Group Co., LTD. or cease operations or has no realistic alternative but to do so. Those charged with governance (including the Audit Committee) in Better Life Group Co., LTD. are responsible for overseeing the financial reporting process.

～ 3-1 ～

Auditors’ responsibilities for the audit of the parent company only financial statements

Our objectives are to obtain reasonable assurance about whether the parent company only financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with the auditing standards generally accepted will always detect a material misstatement when it exists. Untruthful expressions might have been caused by frauds or errors. Misstatements individually or in aggregate are considered material, if they could reasonably be expected to influence the economic decisions of users taken on the basis of these parent company only financial statements.

We have utilized our professional judgment and maintained professional doubt when performing the audit work in accordance with the auditing standards generally accepted in the Republic of China. We also performed the following tasks:

Identify and assess the risks of material misstatement of the parent company only financial statements due to fraud or error, design and perform audit procedures responsive to those risks and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. Fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Therefore, the risk of not detecting a material misstatement resulting from fraud is higher than the one resulting from error.
Obtain a necessary understanding of internal control relevant to the audit in order to design audit procedures appropriate to the circumstances, but not for the purpose of expressing an opinion on the effectiveness of Better Life Group Co., LTD.’s internal control.
Evaluated the adequacy of accounting policies adopted by the management and the reasonability of accounting estimates and related disclosures made.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on Better Life Group Co., LTD.’s ability to continue as a going concern. If we conclude that a material uncertainty exists with such events or conditions, we are required to draw attention in our auditors’ report to the related disclosures in the parent company only financial statements or, if such disclosures are inappropriate, to modify our opinion. Conclusions made by the CPAs are based on the audit findings obtained as of the date of audit report. However, future events or conditions may render Better Life Group Co., LTD. unable to continue as a going concern.
Evaluate the overall presentation, structure and content of the parent company only financial statements, including the notes, and whether the parent company only financial statements fairly represent the underlying transactions and events.
Obtained sufficient and appropriate audit evidence concerning the financial information of investees using the equity method, to express an opinion on the parent company only financial statements. We were responsible for guiding, supervising, and performing the audit and forming an audit opinion about Better Life Group Co., LTD.

The matters communicated between us and the governing bodies included the planned scope and times of the audit and material audit findings (including any material defects in internal control identified during the audit).

We also provided the governing bodies with a declaration that we have complied with the Norm of Professional Ethics for Certified Public Accountant of the Republic of China regarding independence and communicated with them all relations and other matters that may possibly be regarded as detrimental to our independence (including relevant protective measures).

～ 3-2 ～

We determined the key audit matters for Better Life Group Co., LTD.’s 2021 parent company only financial statements based on our communication with those charged with governance. We have clearly indicated such matters in the auditors' report. unless legal regulations prohibit the public disclosure of specific matters, or in extremely rare cases, where we decided not to communicate over specific items in the auditors' report for it could be reasonably anticipated that the negative effects of such disclosure would be greater than the public interest it brings forth .

KPMG Taiwan

CHANG SHU YING CPA:

TZENG GUO YANG

Competent Security Authority Approval Document No. : March 16, 2022

Jin-Guan-Zheng-VI No. 0940100754 Jin-Guan-Zheng-VI No. 0940129108

Notes to Readers

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

The independent auditors’ audit report and the accompanying parent company only financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language independent auditors’ audit report and parent company only financial statements, the Chinese version shall prevail.

～ 3-3 ～

(English Translation of Balance Sheets Originally Issued in Chinese) Better Life Group Co., Ltd.

Balance Sheets

For the Year Ended December 31, 2021 and 2020

Unit: In Thousand New Taiwan Dollars

2021.12.31	2021.12.31	2020.12.31	2020.12.31
Amount	％	Amount	％
$ 34,481 394 43,050 836,516 61,716 20,996 29,063 219,817 15,472	2 - 3 58 4 2 2 15 1	10,432 1,269 - 890,219 76,467 19,430 11,679 192,170 3,356	1 - - 66 6 2 1 14 - 90 1 3 5 1 - - - 10 100
1,261,505	87	1,205,022
17,944 53,686 196 13,549 83,047 163 1,154	2 4 - 1 6 - -	18,628 41,608 65,169 10,558 - 342 1,724
169,739	13	138,029
$ 1,431,244	100	1,343,051

～ 4 ～

(English Translation of Balance Sheets Originally Issued in Chinese) Better Life Group Co., Ltd.

Balance Sheets (Continued)

For the Year Ended December 31, 2021 and 2020

Unit: In Thousand New Taiwan Dollars

2021.12.31	2021.12.31	2020.12.31	2020.12.31
Amount	％	Amount	％
$ 423,053 - 48,776 6,100 32,142 7,870 2,919 3 26,925	30 - 3 - 2 1 - - 2	606,684 26,989 21,934 10,137 33,960 6,963 3,527 - 20,583	45 2 2 - 3 - - - 2 54 - - 54 75 - - (28) (1) 46 100
547,788	38	730,777
276,030 11,100	19 1	- 7,437
834,918	58	738,214
1,002,654 21,938 4,320 (416,218) (16,368)	70 2 - (29) (1)	1,002,654 110 4,320 (382,541) (19,706)
596,326	42	604,837
$ 1,431,244	100	1,343,051

(Please refer to the notes to parent company only financial statements) Chairman: Chung, Hsi-Chi Manager: Lin, Jui-Shan Accounting Manager:

Accounting Manager: Huang, Wen-Cheng

～ 4-1 ～

(English Translation of Statements of Comprehensive Income Originally Issued in Chinese)

Better Life Group Co., Ltd.

Statements of Comprehensive Income

For the Years Ended December 31, 2021 and 2020

Unit: NTD thousands

2021		2020
Amount	％	Amount	％
$ 136,378 130,332	100 96	205,278 190,102	100 93
6,046	4	15,176	7
16,112 36,976	12 27	17,169 38,964	8 19
53,088	39	56,133	27
(47,042)	(35)	(40,957)	(20)
3,197 4,301 9,611 (14,776) 12,154	2 3 7 (11) 9	3,864 2,703 (3) (13,311) (14,071)	2 1 - (6) (7)
14,487	10	(20,818)	(10)
(32,555) 1,122	(25) 1	(61,775) -	(30) -
(33,677)	(26)	(61,775)	(30)
3,414 -	3 -	- -	- -
3,414	3	-	-
(76) -	- -	525 -	- -
(76)	-	525	-
3,338	3	525	-
$ (30,339)	(23)	(61,250)	(30)
$	(0.34)		(0.62)
$	(0.34)		(0.62)

(Please refer to the notes to parent company only financial statements) Chairman: Chung, Hsi-Chi Manager: Lin, Jui-Shan Accounting Manager:

Accounting Manager: Huang, Wen-Cheng

～ 5 ～

(English Translation of Statements of Changes in Equity Originally Issued in Chinese) Better Life Group Co., Ltd.

Statements of Changes in Equity

For the Years Ended December 31, 2021 and 2020

Unit: In Thousand New Taiwan Dollars

Share capital	Capital surplus	Retained earnings	Retained earnings	Other equity items	Total equity
				Exchange difference on translation of financial statements of foreign operations Unrealized gain (loss) on financial assets at fair value through other comprehensive income (435) (19,796)
Common stock		Legal reserve	Undistributed earnings
$ 1,002,654	110	4,320	(320,766)		666,087 (61,775) 525 (61,250) 604,837 (33,677) 3,338 (30,339) 21,828 596,326
- -	- -	- -	(61,775) -	- - 525 -
-	-	-	(61,775)	525 -
1,002,654 - -	110 - -	4,320 - -	(382,541) (33,677) -	90 (19,796) - - (76) 3,414
-	-	-	(33,677)	(76) 3,414
-	21,828	-	-	- -
$ 1,002,654	21,938	4,320	(416,218)	14 (16,382)

(Please refer to the notes to parent company only financial statements) Manager: Lin, Jui-Shan

Accounting Manager: Huang, Wen-Cheng

Chairman: Chung, Hsi-Chi

～ 6 ～

(English Translation of Statements of Cash Flows Originally Issued in Chinese)

Better Life Group Co., Ltd.

Statements of Cash Flows

For the Years Ended December 31, 2021 and 2020

Unit: NTD thousands

Cash flow from operating activities: Net loss before tax for the current period Adjustments: Income and expenses Depreciation expense Amortization expense Interest expense Interest income Share of (profit) loss of subsidiaries, associates, and joint ventures recognized using equity method Loss on disposal and scrapping of property, plant and equipment Gain on reversal of property, plant and equipment Gain on lease modifications Total income and expenses Changes in assets/liabilities related to operating activities: Net change in assets related to operating activities: Notes receivable Accounts receivable Inventories Prepayments Other financial assets Construction deposits paid Incremental cost of obtaining contracts Total net change in assets related to operating activities Net change in liabilities related to operating activities: Contract liabilities Notes payable Accounts payable Other payables Non-current liabilities Other financial liabilities - current Total net change in liabilities related to operating activities Total net change in assets and liabilities related to operating activities Total adjustments Cash outflow from operations Interest received Interest paid Income tax paid Net cash outflow from operating activities	2021	2020
	$ (32,555) 3,610 179 14,776 (3,197) (12,154) 205 (11,787) (400)	(61,775) 5,167 135 13,311 (3,864) 14,071 - - (1) 28,819 850 - 16,811 (16,305) 4,503 (3,308) 3,381 5,932 6,135 10,137 (2,141) 1,803 20,395 (18,846) 17,483 23,415 52,234 (9,541) 3,864 (11,221) - (16,898)
	(8,768)
	875 (43,050) 55,329 13,184 (20,531) (27,647) (12,116)
	(33,956)
	26,842 (4,037) (8,218) 765 6,342 3
	21,697
	(12,259)
	(21,027)
	(53,582) 3,197 (13,087) (1,122)
	(64,594)

～ 7 ～

(English Translation of Statements of Cash Flows Originally Issued in Chinese)

Better Life Group Co., Ltd.

Statements of Cash Flows (Continued)

For the Years Ended December 31, 2021 and 2020

Unit: NTD thousands

Cash flow from investing activities: Financial assets (payment returned due to capital reduction) at fair value through other comprehensive income - non-current Acquisition of investment using the equity method Acquisition of property, plant and equipment Guarantee deposits paid Other receivables - related parties Acquisition of intangible assets Other financial assets Net cash inflows (outflows) from investing activities Cash flow from financing activities: Increase (decrease) in short-term borrowings Increase (decrease) in short-term notes payable Lease principal repaid Corporate bonds issued Net cash inflows (outflows) from financing activities Increase (decrease) in cash and cash equivalents in the current period Balance of cash and cash equivalents at the beginning of the period Balance of cash and cash equivalents at the end of the period	2021 4,098 - (205) 570 - - 3,147	2020 2,820 (61,826) - 1,758 18,193 (267) 3,307
	7,610	(36,015)
	(183,631) (27,304) (3,032) 295,000	377,424 (459,594) (4,967) -
	81,033	(87,137)
	24,049 10,432	(140,050) 150,482
	$ 34,481	10,432

(Please refer to the notes to parent company only financial statements) Chairman: Chung, Hsi-Chi Manager: Lin, Jui-Shan Accounting Manager:

Accounting Manager: Huang, Wen-Cheng

～ 7-1 ～

Better Life Group Co., Ltd. Notes to parent company only Financial Statements For the Years Ended December 31, 2021 and 2020 (NTD thousands unless otherwise specified)

I. Organization and Operations

Better Life Group Co., Ltd. (hereinafter referred to as the “Company”) was established on June 30, 1978 after approved by the Ministry of Economic Affairs. Its registered address is 4F, No. 303, Xinhu 1st Road, Neihu District, Taipei City. In October 1989, its stock was approved for being listed on the Taiwan Stock Exchange for trading. The Company's original name was Kaiju Co., Ltd. and it was renamed Better Life Group Co., Ltd. as approved by the shareholders' meeting on June 26, 2009, referenced Letter Shou-Shang No. 09801153160 from the Ministry of Economic Affairs.

The Company’s principal business is to contract construction companies to build public housing projects and commercial buildings for lease out and sales.

II. The Authorization of Financial Statements

The parent company only financial statements have been approved and released by the Board of Directors on March 16, 2022.

III. Application of New and Revised International Financial Reporting Standards
(I) Impact of adoption of new and revised standards and interpretations endorsed by the FSC The Company has adopted the new and revised IFRS since January 1, 2021, which has not caused a material impact on the parent company only financial statements.
- Amendments to IFRS 4 (Deferral of effective date of IFRS 9)
- Interest Rate Benchmark Reform—Phase 2—Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16
  - The Company has adopted the new and revised IFRS since April 1, 2021, which has not caused a material impact on the parent company only financial statements.
- Amendment to IFRS 16 (COVID-19-Related Rent Concessions After June 30, 2021)
(II) Impact of not adopting the IFRSs endorsed by the FSC
- The Company has assessed the application of the newly revised IFRS that have taken effect on January 1, 2022, which will not cause a material impact on the parent company only financial statements.
- Amendments to IAS 16 (Property, Plant and Equipment — Proceeds before Intended Use)
- Amendments to IAS 37 (Onerous Contracts — Cost of Fulfilling a Contract)
- Annual Improvements to IFRSs 2018-2020 Cycle
- Amendments to IFRS 3 (Reference to the Conceptual Framework)

～ 8 ～

Notes to Parent Company Only Financial Statements of Better Life Group Co., Ltd. (Continued)

(III) New and revised standards and interpretations not yet endorsed by the FSC

The standards and interpretations that have been issued and revised by the International Accounting Standards Board (IASB) but have not yet been endorsed by the FSC and may be relevant to the Company are as follows:

New and revised Effective date standards Major revisions announced by IASB Amendments to IAS The amendments aim to improve consistency January 1, 2023 1 (Classification of in the application of the standard to assist Liabilities as Current companies in determining whether debts or or Non-current) other liabilities with uncertain settlement dates shall be classified as current (or likely to be due within one year) or non-current on the balance sheet. The amendments also clarify the requirement for classification of debts that may be settled by an enterprise through conversion into equity.

The Company is currently evaluating the impact of the above standards and interpretations on the Company's financial position and operating results and will disclose relevant impacts when completing the evaluation.

The Company does not expect that other new and revised standards that have not yet been endorsed will have a material impact on the parent company only financial statements.

IV. Summary of Significant Accounting Policies

A summary of the significant accounting policies adopted in the parent company only financial statements is as follows. Except for the description of accounting changes in Note 3, the accounting policies below have been applied consistently throughout the reporting period presented in the parent company only financial statements.

(I) Statement of compliance

The parent company only financial statements have been prepared in accordance with the Regulations

Governing the Preparation of Financial Reports by Securities Issuers.

(II) Basis of preparation
Basis for measurement

Except for financial assets at fair value through other comprehensive income, the parent company only financial statements has been prepared at historical cost:

Functional currency and currency presented
The Company adopts the currency used in the main economic environment in which it operates as its functional currency. The parent company only financial statements are presented in the Company's functional currency, namely New Taiwan dollars (NTD). All financial information presented in NTD is in the unit of thousands of NTD.

～ 9 ～

Notes to Parent Company Only Financial Statements of Better Life Group Co., Ltd. (Continued)

(III) Foreign currency
Foreign currency transactions
- Foreign currency transactions are translated into functional currency at the exchange rate prevailing on the transaction date. On the end date of each reporting period (hereinafter referred to as the “balance sheet date”), foreign currency monetary items are translated into the functional currency at the exchange rate prevailing on the balance sheet date, and foreign currency non-monetary items measured at fair value are translated into the functional currency at the exchange rate prevailing on the day of measurement. Foreign currency non-monetary items measured at historical cost are translated at the exchange rate prevailing on the transaction date.
- Foreign currency translation differences arising from a translation are normally recognized in profit or loss, except for the circumstances below where such differences are recognized in other comprehensive income:
- (1) Equity instrument designated at fair value through other comprehensive income;
- (2) Financial liabilities designated as net investment hedge for foreign operations, which are within the effective scope of hedging; or
- (3) Qualified cash flow hedge, which within the effective scope of hedging.
Foreign operations
- Assets and liabilities of foreign operations, including goodwill arising from acquisition and fair value adjustments, are translated into NTD at the exchange rate prevailing on the balance sheet date; income and expense items are translated into NTD at the average exchange rate in the current period. Resulting exchange differences are recognized in other comprehensive income
- When the disposal of a foreign operation results in the loss of control, joint control, or material impact, the cumulative exchange differences related to the foreign operation are fully reclassified to profit or loss. In the event of a partial disposal of a subsidiary with foreign operations, the relevant cumulative exchange differences are re-attributed to noncontrolling interests on a pro-rata basis. In the event of a partial disposal of an investment involving an associate or a joint venture of a foreign operation, the relevant cumulative exchange differences are reclassified to profit or loss on a pro rata basis.
- If there is no repayment plan for the monetary receivables or payables of an foreign operation and it is impossible to settle the receivables or payables in the foreseeable future, the foreign exchange gains and losses incurred shall be regarded as a part of the net investment in the foreign operation and recognized in other comprehensive income.
(IV)Criteria for classification of current and non-current assets and liabilities Assets that meet one of the following criteria are classified as current assets; all other assets that are not current assets are classified as non-current assets:
Assets expected to be realized in the ordinary course of business (usually longer than one year for the construction industry), or intended to be sold or consumed;
Assets held primarily for the purpose of trading;
Assets expected to be realized within 12 months after the balance sheet date; or
Assets that are cash or cash equivalents, excluding assets restricted from being exchanged or used to settle a liability for at least 12 months after the balance sheet date.

Liabilities that meet one of the following criteria are classified as current liabilities; all other liabilities that are not current liabilities are classified as non-current liabilities:

Liabilities expected to be settled in the ordinary course of business (usually longer than one year for the construction industry);
Liabilities held primarily for the purpose of trading;

～ 10 ～

Notes to Parent Company Only Financial Statements of Better Life Group Co., Ltd. (Continued)

Liabilities expected to be settled within 12 months after the balance sheet date; or
Liabilities with a repayment deadline that cannot be unconditionally deferred for at least 12 months after the balance sheet date. However, the terms of a liability that could, at the option of the counterparty, result in its settlement by issue of equity instruments do not affect its classification.
(V) Cash and cash equivalents

Cash includes cash on hand and demand deposits. Cash equivalents refer to short-term and highly liquid investments that can be converted into a certain amount of cash at any time and the risk of value changes is very small. Time deposits that meet the aforementioned definition and whose purpose is to satisfy short-term cash commitments in operations are classified as cash equivalents.

(VI)Financial instruments

Accounts receivable and debt securities issued are initially recognized when incurred. All other financial assets and financial liabilities are initially recognized when the Company becomes a party to the contractual terms of the financial instruments. Financial assets (except receivables that do not contain significant financial components) or financial liabilities that are not measured at fair value through profit or loss are initially measured at fair value plus transaction costs directly attributable to the acquisition or issuance. Accounts receivable that do not contain significant financial components are initially measured at transaction prices.

Financial assets

If the purchase or sale of financial assets conforms to the regular way purchase or sale , the Company shall adopt trade date accounting or settlement date accounting consistently to recognize the purchase or sale of the financial assets in the same category. Financial assets are classified as financial assets at amortized cost and equity instrument investments at fair value through other comprehensive income upon initial recognition. The Company only reclassifies all affected financial assets from the first day of next reporting period when changing the financial assets management model.

(1) Financial assets at amortized cost

If the financial assets are in alignment with the following criteria and not designated as at fair value through profit or loss, such assets are measured at amortized cost:

Held under a certain business model, of which the objective is to collect contractual cash flows by holding the financial assets3
The cash flows on specific dates specified in the contractual terms are solely payments for the principal and interest on the principal amount outstanding.
Such assets are subsequently amortized by the effective interest method plus or less the initially recognized amount using the effective interest method, adjusted for the allowance for losses measured at amortized cost. Interest income, foreign exchange gains or losses, and impairment losses are recognized in profit or loss. Upon derecognition, the gain or loss is included in profit or loss.
(2) Financial assets at fair value through other comprehensive income Upon initial recognition, the Company may make an irrevocable election to recognize subsequent changes in fair value of equity instrument investments not held for trading in other comprehensive income. The foregoing election is made as per each instrument.

Equity instrument investments are subsequently measured at fair value. Dividend income (unless it clearly represents a recovery of part of the investment) is recognized in profit or loss. The remaining net gain or loss is recognized in other comprehensive income and is not reclassified to profit or loss.

～ 11 ～

Notes to Parent Company Only Financial Statements of Better Life Group Co., Ltd. (Continued)

Dividend income from equity investments is recognized on the date when the Company is entitled to receive dividends (usually the ex-dividend date).

(3) Impairment of financial assets

The Company recognizes financial assets at amortized cost (including cash and cash equivalents, financial assets at amortized cost, notes and accounts receivable, other receivables, guarantee deposits paid, and other financial assets), debt instrument investments at fair value through other comprehensive income, and expected credit losses on contract assets in allowance for losses.

The allowance for losses for the financial assets below are measured at 12-month expected credit losses, and the allowance for losses for the rest are measured at the lifetime expected credit losses:

‧ Debt securities are judged to be of low credit risk on the balance sheet date; and
‧The credit risk of other debt securities and bank deposits (i.e. the risk of default during the expected duration of the financial instruments) has not increased significantly since the initial recognition.

Allowance for losses on accounts receivable and contract assets are measured at lifetime expected credit losses.

When determining whether the credit risk has increased significantly since the initial recognition, the Company takes into account reasonable and corroborative information (obtainable without undue cost or effort), including qualitative and quantitative information, and analyzes it based on the Company's historical experience,credit assessments, and forward-looking information.

If the credit risk rating of an financial instrument is equivalent to the globally defined "investment grade" (BBB in Standard & Poor's, Baa3 in Moody's, or twA in Taiwan Ratings, or higher than such levels), the Company regards that the credit risk of the debt securities is low.

If a contract payment is overdue for more than 30 days, the Company assumes that the credit risk of an financial asset has increased significantly.

If a contract payment is overdue for more than 360 days, or the borrower is unlikely to fulfill its credit obligations and pay the full amount to the Company, the Company will deem the financial asset in default.

Lifetime expected credit losses refer to the expected credit losses arising from all possible default events during the expected duration of a financial instrument. Twelve-month expected credit losses are expected credit losses on a financial instrument arising from possible default events within 12 months after the balance sheet date (or a shorter period if the expected duration of the financial instrument is less than 12 months).

The maximum period over which expected credit losses are measured is the maximum contract period over which the Company is exposed to credit risk. Expected credit losses are an estimate of weighted probability of credit losses over the expected lifetime of a financial instrument. Credit losses are measured at the present value of all cash shortfalls, that is the difference between the cash flows that the Company can receive as per the contract and the cash flows that the Company expects to receive. Expected credit losses are discounted at the effective interest rate on the financial asset.

The Company assesses whether financial assets at amortized cost are credit-impaired on each balance sheet date. A financial asset is credit-impaired when one or more events have occurred with an adverse effect on the estimated future cash flows of the

～ 12 ～

Notes to Parent Company Only Financial Statements of Better Life Group Co., Ltd. (Continued)

financial asset. Evidence that indicates a financial asset is credit-impaired includes the observable information below:

The borrower or issuer encountered significant financial difficulties;
Default, such as delayed or overdue payment for more than 360 days;
The Company, for financial or contractual reasons related to the borrower's financial difficulties, grants the borrower a concession that the borrower would not otherwise consider
The borrower is likely to file for bankruptcy or other financial restructuring; or

• The active market for the financial asset disappears due to financial difficulties. The allowance for losses for a financial asset measured at amortized cost is deducted from the carrying amount of the asset. The allowance for losses on investment in debt instruments at fair value through other comprehensive income is with profit or loss adjusted and recognized in other comprehensive income (without reducing the carrying amount of the asset)

When the Company cannot reasonably expect to recover the whole or part of an financial asset, it directly reduces the total carrying amount of the financial asset. For individuals, the Company's policy is to write off the total carrying amount of an financial asset when it is overdue for more than 360 days based on the past experience of similar assets. For companies, the Company analyzes the timing and amount of write-off for each company on the basis of whether it can reasonably expect to recover the financial asset. The Company does not expect a material reversal of an amount written off. However, financial assets that have been written off are still enforceable to be aligned with the Company's procedures for recovering overdue amounts.

(4) Derecognition of financial assets

The Company derecognizes a financial asset when the contractual rights to the cash inflow from the financial asset expire, when it transfers the financial assets and substantially all the risks and rewards of ownership of the asset to another party, or when it has not transferred, retained substantially all the risks and rewards of ownership, and retained control over the financial asset For transfer of transfer financial assets, if the Company has retained all or substantially all the risks and rewards of ownership of the asset to be transferred, it continues to recognize the asset on the balance sheet.

Financial liabilities and equity instruments
(1) Classification of liabilities and equity

Debt and equity instruments issued by the Company are classified as financial liabilities or equity as per the substance of a contractual agreement and the definition of financial liabilities and equity instruments.

(2) Equity transactions

Equity instrument refers to any contract that demonstrates the Company's remaining interest in assets less all of its liabilities. Equity instruments issued by the Company are recognized at the acquisition price less direct issue costs.

(3) Financial liabilities

Financial liabilities are classified as those at amortized cost or at fair value through profit or loss. Financial liabilities are classified at fair value through profit or loss if they are held for trading, derivatives, or designated upon initial recognition. Financial liabilities at fair value through profit or loss are measured at fair value and the

～ 13 ～

Notes to Parent Company Only Financial Statements of Better Life Group Co., Ltd. (Continued)

relevant net gain and loss, including any interest expense, is recognized in profit or loss.

Other financial liabilities are subsequently measured at amortized cost using the effective interest method. Interest expense and exchange gains or losses are recognized in profit or loss. Any gain or loss is also recognized in profit or loss upon derecognition.

(4) Derecognition of financial liabilities

The Company derecognizes financial liabilities when contractual obligations have been fulfilled, cancelled, or expired. When the terms of financial liabilities are revised and the cash flow of the revised liabilities is significantly different, the initial financial liabilities are derecognized, and new financial liabilities are recognized at fair value as per the revised terms.

When a financial liability is derecognized, the difference between its carrying amount and the total consideration paid or payable (including any non-cash assets transferred or liabilities assumed) is recognized in profit or loss.

(5) Offset of financial assets and liabilities

Financial assets and financial liabilities are offset and presented in an net amount on the balance sheet only when the Company has legally enforceable rights to offset financial assets and financial liabilities and intends to settle on a net basis or to realize assets and settle liabilities simultaneously .

(VII) Inventories

The initial cost of inventories is the expenditure necessary to bring inventories to a condition and location ready for sale or construction. Development costs of property include construction, land, borrowing, and project costs incurred during the development period. Upon completion, the construction in progress will be reclassified to the buildings and land held for sale, and the operating costs will be reclassified as per the proportion of sales to the development costs of the property. Subsequently, it will be measured at the lower of cost or net realizable value. When the cost of inventory is higher than the net realizable value, the cost should be written down to the net realizable value, and the amount written down should be recognized in cost of sales in the current period. The methods for determining the net realizable value are as follows:

Construction land: Net realizable value is calculated based on replacement cost or estimated selling price (as per the market condition at the time) less estimated selling expenses.
Construction in progress: The net realizable value is calculated based on the estimated selling price (according to the market condition at the time) less the costs and selling expenses required till completion.
Buildings and land held for sale: Net realizable value is calculated based on estimated selling price (as per the market condition at the time) less estimated selling expenses.
(VIII) Investment in subsidiaries

When preparing the parent company only financial statements, the Company adopts the equity mthod to valuate the investees over which the Company has control. With the equity method, the current profit or loss and other comprehensive income in the parent company only financial statements are the same as the current profit or loss and other comprehensive income attributable to the owners of the parent company in the consolidated financial statements. The owner's equity in the parent company only financial statements is the same as the equity attributable to the owners of the parent company in the consolidated financial statements. Changes in the Company's ownership interests in subsidiaries that do not result in the loss of its control over them are treated as equity transactions with the owners.

～ 14 ～

Notes to Parent Company Only Financial Statements of Better Life Group Co., Ltd. (Continued)

(IX) Investment property
Investment property refers to property held for earning rents or asset appreciation or both, but not for sale in normal business activities, production, provision of goods or services, or for administrative purposes. Investment property is initially measured at cost, and subsequently measured at cost less accumulated depreciation and accumulated impairment. The depreciation method, useful life, and residual value are handled in accordance with the rules of property, plant and equipment.

Gains or losses on the disposal of investment property (calculated as the difference between the net proceed from the disposal and the carrying amount of the property) are recognized in profit or loss.

Rent income from investment property is recognized in operating income on a straight-line basis over the lease term. The lease incentives are recognized as part of the rent income over the lease term.

(X) Property, plant and equipment
Recognition and measurement
- Property, plant and equipment are measured at cost (including capitalized borrowing costs) less accumulated depreciation and any accumulated impairment.
- When the useful lives of material components of property, plant and equipment are different, they are treated as separate items (major components) of property, plant and equipment.

Gain or loss on disposal of property, plant and equipment is recognized in profit or loss.

Subsequent cost
Subsequent expenditures are capitalized only when it is probable that the future economic benefits will flow to the Company.
Depreciation

Depreciation is calculated at the cost of an asset less its residual value and is recognized in profit or loss on a straight-line basis over the estimated useful life of each component. Land is not depreciated.

The estimated useful life for the current and comparative periods are as follows: Leasehold improvement 5 years

The Company reviews the depreciation method, useful life, and residual value on each balance sheet date and makes appropriate adjustments if necessary.

Reclassification to investment property

When the property for self-use is changed into investment property, the property is reclassified as investment property at the carrying amount upon the change of use.

(XI) Lease

The Company assesses whether a contract is or contains a lease on the date of the establishment the contract and determines a contract is or contains a lease if the contract transfers control over the use of the identified asset for a period of time in exchange for consideration.

Lessee

The Company recognizes the right-of-use asset and lease liability on the lease commencement date. The right-of-use asset is initially measured at cost, which includes the initially measured amount of the lease liability, adjusted for any lease payments paid on or before the lease commencement date, plus the initial direct costs incurred and the estimated costs for dismantling, removing the asset, or restoring its location or the asset, and less any lease incentives received.

～ 15 ～

Notes to Parent Company Only Financial Statements of Better Life Group Co., Ltd. (Continued)

The right-of-use asset is subsequently depreciated on a straight-line basis from the lease commencement date to the end of the useful life of the right-of-use asset or the end of the lease term, whichever is earlier. In addition, the Company regularly assesses whether the right-of-use asset is impaired and accounts for any impairment loss that has occurred, and adjusts the right-of-use asset if the lease liability is remeasured.

The lease liability is initially measured at the present value of the unpaid lease payments at the lease commencement date. If the interest rate implicit in a lease is easy to be determined, the discount rate is said rate; if it is not easy to determine such a rate, the Company's incremental borrowing rate is adopted. Generally speaking, the Company adopts its incremental borrowing rate as the discount rate.

Lease payments included in the lease liability measurement include:

(1) Fixed payments, including substantive fixed payments;
(2) The lease payment depends on the change in an index or rate, and the index or rate on the lease commencement date is adopted for the initial measurement;
(3) The residual value guarantee amount expected to be paid; and
(4) The exercise price or penalty to be paid when it is reasonably ascertain that the purchase or lease termination will be executed.

Interest on lease liabilities is subsequently accrued using the effective interest method, and the amount is re-measured under each of the circumstances below:

(1) Changes in the index or rate used to determine lease payments result in changes in future lease payments;
(2) There is a change in the residual value guarantee amount expected to be paid;
(3) There is a change in the evaluation of the option of purchasing the asset;
(4) A change in the evaluation of whether to extend or terminate a lease has resulted in a change in the evaluation of the lease term;
(5) The subject leased, scope of lease, or other terms are modified.

When the lease liability is re-measured due to the aforementioned changes in the index or rate used to determine the lease payment, changes in the residual value guarantee amount, and changes in the evaluation of the purchase, extension, or termination, the carrying amount of the right-of-use asset is adjusted accordingly. When the carrying amount of the right-of-use asset has been reduced to zero, the remaining remeasured amount is recognized in profit or loss.

For lease modifications with a reduced scope of the lease, the carrying amount of the rightof-use asset is reduced to reflect the partial or full termination of the lease, and the difference between said amount and the remeasured amount of the lease liability is recognized in profit or loss.

The Company presents right-of-use assets and lease liabilities not in alignment with the definition of investment property on a separate line in the balance sheet.

For short-term leases of buildings and transportation equipment and leases of low-value assets, the Company elects not to recognize right-of-use assets and lease liabilities and recognizes relevant lease payments in expenses on a straight-line basis over the lease term instead.

Lessor

Transactions in which the Company is the lessor are classified on the lease commencement date as per whether a lease contract is with substantially all risks and rewards attached to the ownership of the asset transferred; if so, such a contract is classified as a finance lease, otherwise it is classified as an operating lease. During

～ 16 ～

Notes to Parent Company Only Financial Statements of Better Life Group Co., Ltd. (Continued)

evaluation, the Company considers relevant specific indicators, including whether the lease term covers a major part of the economic life of the asset.

If the Company is a sublessor, it accounts for headlease and sublease transactions separately and classifies sublease transactions based on the right-of-use assets derived from a headlease. If a headlease is a short-term lease to which recognition exemption applies, the sublease transaction derived therefrom should be classified as an operating lease.

If an agreement contains lease and non-lease components, the Company allocates the consideration in the agreement as per IFRS 15.

(XII) Intangible assets
Recognition and measurement

The Company acquires other intangible assets with finite useful life, including computer software, which are measured at the cost less accumulated amortization and accumulated impairment.

Subsequent expenditure

Subsequent expenditure is capitalized only to the extent that the future economic benefits of a specific asset will increase. All other expenditures are recognized in profit or loss as incurred.

Amortization

Amortization is calculated at the cost of the asset less the estimated residual value and is recognized in profit or loss using the straight-line method over the estimated useful life from when an intangible asset becomes available for use.

The estimated useful life for the current and comparative periods are as follows: Computer software 3 years

The Company reviews the amortization method, useful life, and residual value of intangible assets on each balance sheet date and makes appropriate adjustments if necessary.

(XIII) Impairment of non-financial assets

The Company evaluates if there is any sign of impairment of non-financial assets at the balance sheet date. The Company estimates the recoverable amount of such assets with a sign of impairment. The Company test the impairment of good will.

Impairment testing aims at the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows

from other assets or groups of assets. Goodwill acquired in a business combination is allocated to each cash-generating unit or group of cash-generating units that is expected to benefit from the synergies of the combination.

The recoverable amount is the higher of the individual asset or the air value of the cashgenerating unit less cost of disposal and its value in use. In assessing value in use, estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects present market assessments of the time value of money and the risks specific to the asset or cash-generating unit.

An impairment loss is recognized when the recoverable amount of an individual asset or cashgenerating unit is lower than the carrying amount thereof.

Impairment losses are recognized immediately in current profit or loss with the carrying amount of the cash-generating unit's amortized goodwill reduced first; then the carrying amount of each asset in proportion to the carrying amount thereof in the unit reduced. Goodwill impairment losses are not reversed. Non-financial assets other than goodwill are reversed only when it does not exceed the carrying amount (less depreciation or amortization)

～ 17 ～

Notes to Parent Company Only Financial Statements of Better Life Group Co., Ltd. (Continued)

that would have been determined if such assets had not been recognized for impairment losses in prior years.

(XIV) Provision for warranty liability

The recognition of provision is a present obligation due to past events, which makes it probable that the economic resources may flow out from the Company to settle the obligation in the future and the amount of the obligation can be estimated reliably. The provision is discounted at a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the liability, and the amortization of the discount is recognized in interest expense.

Provision for warranty liability is recognized when goods or services are sold and is measured based on historical warranty information and all probable outcomes weighted by respective probabilities.

(XV) Revenue recognition
Revenue from customer contracts

Revenue is measured as the consideration to which the transfer of goods or services is expected to be entitled. The Company recognizes revenue when the control over goods or services is transferred to customers and its performance obligations are fulfilled. The Company’s main revenue items are described as follows:

(1) Land development and property sales

The Company develops and sells residential property and often launches pre-sale property projects during or before construction. The Company recognizes revenue when control over property is transferred. Due to contractual restrictions, property usually has no other uses for the Company. However, after the legal ownership of property is transferred to a customer, the Company has an enforceable right to receive a payment for the contract performed so far. Therefore, the Company recognizes revenue when the legal ownership of property is transferred or handed over to a customer.

Revenue is measured at the transaction price in the contractual agreement. If it is a sale of a finished property project, the consideration, in most cases, can be collected when the legal ownership of property is transferred. In a few cases, the payment can be deferred as per the contractual agreement but cannot be deferred for over 12 months. Thus, transaction prices are not adjusted to reflect the effect of significant financial components. In the case of a pre-sale property project, the payment is usually collected in installments during the period from when the contract is signed to when the property is transferred to a customer. If the contract contains a significant financial component, the transaction price is adjusted as per the borrowing rate for the project during said period to reflect the effect of time value of money. Advance receipts are recognized in contract liabilities, and interest expenses and contract liabilities are recognized when it is determined that the effect of the time value of money needs to be adjusted. The cumulative contract liabilities are reclassified to revenue when the property is transferred to a customer.

Some contracts include multiple items to be delivered, such as the sale of residential property and interior design services, which are regarded as a separate performance obligation and the transaction price is amortized on a stand-alone selling price basis. If no directly observable price is available, the stand-alone selling price is estimated based on expected cost plus margin. The interior design service is recognized in revenue when the service is completed.

～ 18 ～

Notes to Parent Company Only Financial Statements of Better Life Group Co., Ltd. (Continued)

(2) Significant financial components - advance receipts for property Revenue is measured at the transaction price in the contractual agreement. If it is a sale of a finished property project, the consideration, in most cases, can be collected when the legal ownership of property is transferred. In a few cases, the payment can be deferred as per the contractual agreement but cannot be deferred for over 12 months. In the case of a pre-sale property project, the payment is usually collected in installments during the period from when the contract is signed to when the property is transferred to a customer. The Company evaluates whether the contract consideration is different from the current selling price and whether the aforementioned advance consideration received includes financing factors per contract. The advance consideration received by the Company is mainly to provide protection for contract performance by customers, thereby reducing the resale price risk and subsidy caused by any customer's non-performance of the contract to the Company. Therefore, it is not a significant financial component of obtaining financial financing from customers. Thus, the time value of money of the transaction consideration is not adjusted.
Cost of customer contracts
(1) Incremental cost of obtaining contracts

If the Company expects to recover its incremental costs of obtaining customer contracts, it recognizes such costs in assets. Incremental costs of obtaining a contract are costs incurred when a customer contract is obtained that would not have been incurred if the contract had not been obtained. Costs of obtaining a contract that will be incurred regardless of whether the contract is obtained are recognized in expenses when incurred, unless such costs are clearly chargeable to customers regardless of whether a contract has been obtained.

The Company recognizes in assets the incremental costs incurred in obtaining customer contracts, which are expected to be recovered through the sale of property and amortizes them on a systematic basis consistent with that adopted for the transfer of presale property to customers.

(XVI) Employee benefits
Defined contribution plan
- Contribution obligations to the defined contribution plan are recognized in expenses in the period during which the employee provides service.
Short-term employee benefits
- Short-term employee benefits are recognized as expenses when the relevant services are provided. If the Company has a present legal or constructive payment obligation due to an employee's past services and the obligation can be estimated reliably, the amount of benefits is recognized in liabilities.
(XVII) Income tax

Income tax includes current income and deferred taxes. Current income tax and deferred tax are recognized in profit or loss, except in relation to business combinations or items directly recognized in equity or other comprehensive income.

Current income tax includes the expected income tax payable or tax refund receivable based on the taxable income (loss) for the year and any adjustments to income tax payable or tax refund receivable in prior years. The amount is the best estimate of the amount expected to be paid or received based on tax rates and tax laws that have been enacted or substantively enacted at the balance sheet date.

～ 19 ～

Notes to Parent Company Only Financial Statements of Better Life Group Co., Ltd. (Continued)

Deferred tax is recognized based on the temporary differences between the carrying amounts of an asset and liability for financial reporting purposes and its tax base. Temporary differences arising from the circumstances below are not recognized in deferred tax:

Assets or liabilities are initially recognized for a transaction that is not a business combination, and such assets or liabilities does not affect accounting profit and taxable income (loss) at the time of the transaction;
For temporary differences arising from investments in subsidiaries, associates, and joint venture interests, the Company can control the timing of the reversal of such temporary differences and it is likely that they will not be reversed in the foreseeable future; and
Taxable temporary differences arises from the initial recognition of goodwill. Unused tax losses and unused tax credits to the extent that it is probable that future taxable profit will be available against which the unused tax losses and unused tax credits can be utilized, as well as deductible temporary differences are recognized in deferred tax assets. It is reassessed at each balance sheet date to reduce the relevant income tax benefits to the extent that it is not probable that they will be realized; or to reverse the previously reduced amount to the extent that it becomes probable that sufficient taxable income will be available.

Deferred tax is measured at the tax rate at which the temporary difference is expected to reverse, based on tax rates and tax laws that have been enacted or substantively enacted at the balance sheet date, with tax-related uncertainties reflected.

The Company will offset deferred tax assets and deferred tax liabilities only when the criteria below are met at the same time:

Has the statutory enforcement power to offset current income tax assets and current income tax liabilities; and
Deferred tax assets and deferred tax liabilities are related to one of the following taxpayers with income tax levied by the same tax authority: (1) The same taxpayer; or
- (2) Different taxpayers but each taxpayer intends to settle the current tax liabilities and assets on a net basis or to realize both in each future period, in which significant amounts of deferred tax assets are expected to be recovered and deferred tax liabilities are expected to be settled.
(XVIII) Earnings per share

The Company presents basic and diluted earnings per share attributable to holders of the Company’s ordinary shares. The Company’s basic earnings per share is calculated by dividing the profit or loss attributable to the equity holders of the Company's ordinary shares by the weighted average number of ordinary shares outstanding in the current period. Diluted earnings per share is calculated by having the profit or loss attributable to the equity holders of the Company's ordinary shares and the weighted average number of ordinary shares outstanding adjusted for the effect of all potential dilutive ordinary shares.

(XIX) Segment information

The Company has disclosed segment information in the consolidated financial statements, so does not disclose such information in the parent company only financial statements.

～ 20 ～

Notes to Parent Company Only Financial Statements of Better Life Group Co., Ltd. (Continued)

V. Critical Accounting Judgements and Key Sources of Estimation and Uncertainty When the management prepares the parent company only financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, it shall make judgments, estimates, and assumptions, which will affect the accounting policies adopted and the amounts of assets, liabilities, income, and expenses presented. Actual results may differ from estimates.

The management continues to review estimates and basic assumptions, and changes in accounting estimates are recognized in the period in which they are changed and future periods affected. The accounting policies involve significant judgement, and the information with a material impact on the amounts recognized in this parent company only financial statements is as follows: None. The uncertainties in the following assumptions and estimates with significant risks of causing the carrying amount of assets and liabilities to be adjusted significantly in the next fiscal year and the impact of the COVID-19 pandemic has been reflected. The relevant information is as follows: Inventory valuation

As inventories should be measured at the lower of cost or net realizable value, the Company's assessment of the net realizable value of inventories on the balance sheet date is an estimate based on future selling prices in the market and construction costs. Being susceptible to political and economic environments, the net realizable value may undergo significant changes. Please refer to Note 6(4) for details of inventory valuation.

～ 21 ～

Notes to Parent Company Only Financial Statements of Better Life Group Co., Ltd. (Continued)

VI. Summary of Significant Accounting Items

(I) Cash and cash equivalents

Cash on hand Demand deposit Checking deposit Cash and cash equivalents listed in the statements of cash flows	2021.12.31	2020.12.31
	$ 142 34,321 18	167 4,271 5,994
	$ 34,481	10,432

Please refer to Note 6(21) for the information on the interest rate risk and sensitivity analysis of the Company's financial assets and liabilities.

(II) Financial assets at fair value through other comprehensive income (FVTOCI)

2021.12.31 Equity instrument at fair value through other comprehensive income: Domestic unlisted stock - Tech Alliance Corp. $ 3,667 Domestic unlisted stock - Technology Associates Corporation 274 Domestic unlisted stock - Shin Kong Real Estate Management Co., Ltd. 1,890 Foreign unlisted stock - World Join International Ltd. 12,113 Total $ 17,944	2020.12.31
	3,784 612 2,300 11,932 18,628

Equity instrument investments at fair value through other comprehensive income: These equity instrument investments held by the Company are for long-term strategic investment and are not held for trading purposes, so they have been designated as measured at fair value through other comprehensive income.
Tech Alliance Corp. and Technology Associates Corporation invested by the Company had the cash capital reduction proposals passed at their general meeting of shareholders on July 6, 2021 and June 30, 2020, respectively, and set August 2, 2021 and September 1, 2020 as the record date of capital reduction, respectively; the capital refunded for the capital reduction was NT$4,098,000 and NT$2,820,000, respectively. As of December 31, 2021, all the capital refund receivable had been recovered.

The Company did not dispose of its strategic investments in 2021 and 2020, and the cumulative profits or losses during these periods were not reclassified in equity.

Please refer to Note 6(21) for market risk information.
The Company’s above financial assets have not been pledged as collateral.
(III) Notes and accounts receivable

Notes receivable - from operations Accounts receivable at amortized cost Less: Allowance for losses	2021.12.31	2020.12.31
	$ 394 47,262 (4,212)	1,269 4,212 (4,212)
	$ 43,444	1,269

～ 22 ～

Notes to Parent Company Only Financial Statements of Better Life Group Co., Ltd. (Continued)

The Company adopts a simplified approach to estimate expected credit losses for all notes and accounts receivables, which are measured at lifetime expected credit losses. To this end, such notes and accounts receivables are grouped by common credit risk characteristics that represent a customer's ability to pay all amounts due as per the contract terms with forwardlooking information incorporated. The Company's expected credit loss analysis for the notes and accounts receivable is as follows:

	2021.12.31
Carrying amounts of notes and accounts receivable	Weighted average expected credit loss rate	Allowance for lifetime expected credit losses
$ 43,444 4,212	- 100%	- 4,212
$ 47,656		4,212

	2020.12.31
Carrying amounts of notes and accounts receivable	Weighted average expected credit loss rate	Allowance for lifetime expected credit losses
$ 1,269 4,212	- 100%	- 4,212
$ 5,481		4,212

The changes in allowances for losses on the Company’s notes and accounts receivable are as follows:

		2021	2020
Opening balance (ending balance)	$	4,212	4,212
As of December 31, 2021 and 2020, the Company's notes and accounts receivable were not
pledge as collateral.
(IV) Inventories
		2021.12.31	2020.12.31
Construction business:
Buildings and land held for sale	$	622,620	709,920
Construction in progress		213,896	49,296
Land held for construction site		-	131,003
	$	836,516	890,219
Inventory expected to be recovered after more than 12	$	441,049	559,943
months
The details of operating costs are as follows:
		2021	2020
Buildings and land held for sale reclassified after	$	130,332	190,102
sold

～ 23 ～

Notes to Parent Company Only Financial Statements of Better Life Group Co., Ltd. (Continued)

In 2021 and 2020, please refer to Note 6(20) for information on the Company’s interest capitalization.
As of December 31, 2021 and 2020, the Company's inventories were not pledge as collateral. See Note 8.

(V) Prepayments

Construction business - Sample house interior design cost Construction business - Pre-construction development costs Others	2021.12.31	2020.12.31
	$ 7,029 52,422 2,265	21,746 53,993 728
	$ 61,716	76,467

(VI)Investment using the equity method

The Company's investments using the equity method at the balance sheet date are listed below:

Subsidiaries	2021.12.31	2020.12.31
	$ 53,686	41,608

Please refer to the 2021 consolidated financial statements for information on subsidiaries.
As of December 31, 2021 and 2020, the Company's investments using the equity method were not pledged as collateral.

(VII) Property, plant and equipment

The details of the changes in cost, depreciation, and impairment losses of the Company’s property, plant and equipment in 2021 and 2020 are as follows:

Land	Leasehold improvements	Other equipment	Total
$ 82,029 - (76,647) -	632 - - (632)	- 205 - -	82,661 205 (76,647) (632) 5,587 82,661 82,661 17,492 113 (11,787) (427) 5,391 17,364 128
$ 5,382	-	205
$ 82,029	632	-
$ 82,029	632	-
	323 104 - (427)	- 9 - -
$ 5,382	-	9
$ 17,169 -	195 128	- -

～ 24 ～

Notes to Parent Company Only Financial Statements of Better Life Group Co., Ltd. (Continued)

Land	Leasehold improvements	Other equipment	Total
$ 17,169	323	-	17,492
$ -	-	196	196
$ 64,860	309	-	65,169
$ 64,860	437	-	65,297

Please refer to Note 8 for details of the collateral for bank loans and financing facilities as of December 31, 2021 and 2020.
As part of the land is agricultural land, and the land use should be changed before the ownership can be obtained, such a part of the land was registered in the name of an individual. At present, the protection measures, including an entrustment contract and a trust deed have been signed with said individual, and the land parcel will be transferred to the Company at an appropriate time. Said agricultural land has been reclassified to investment property.
Reclassification to investment property
- The Company signed a land lease agreement with the lessee on November 25, 2021 to establish a solar power zone, and reclassified the property as investment property at the carrying amount upon change of use. As the fair value was higher than the book value on the date of change of use, the initially recognized impairment loss reversed amounted to NT$11,787,000. The comparative method was mainly adopted, supplemented by the land development analysis method, to compare the price and analyze and adjust the fair value, which belongs to Level 3.
(VIII) Investment property

Investment property includes land leased out by the Company to lessees under operating leases. The initial period of the leased investment property is 20 years. At the end of a lease term, the Company will negotiate subsequent lease terms with a lessee.

The details of the changes in the Company’s investment property in 2021 are as follows:

Land and improvements	Land and improvements	Total
$ - 6,400 76,647		- 6,400 76,647
$ 83,047		83,047
$ -		-
$ -		-
$ 83,047		83,047
	$ 208,099

～ 25 ～

Notes to Parent Company Only Financial Statements of Better Life Group Co., Ltd. (Continued)

The fair value of investment property is based on independent appraisers’ valuation (who possess relevant recognized professional qualifications and recent experience related to the investment property valuated in terms of location and type). The input used in the fair value valuation technique is level 3 input.

To improve the use efficiency of land, the Company decided to lease the land to others to set up solar power system facilities, so it was reclassified from property, plant and equipment to investment property (please refer to Note 6(7) for details). Said lease contract includes the initial lease term, and the subsequent lease term is negotiated with the lessee, and no contingent rent is charged.

Please refer to Note 8 for details of the Company's investment property pledged as collateral. (IX) Right-of-use assets

The details of cost and depreciation of the Company’s leased land, buildings, machinery and equipment, and transportation equipment are as follows:

Land	Buildings Transportation equipment	Office equipment	Total
$ 547 - (547)	16,317 1,107 13,198 - (16,317) -	225 - -	18,196 13,198 (16,864) 14,530 23,981 1,107 (3,162) (3,730) 18,196 7,638 3,497 (10,154) 981 5,784 5,039 (3,162) (23) 7,638 13,549 10,558 18,197
$ -	13,198 1,107	225
$ 681 - - (134)	19,904 3,162 - 1,107 - (3,162) (3,587) -	234 - - (9)
$ 547	16,317 1,107	225
$ 221 45 (266)	7,310 15 3,038 369 (9,888) -	92 45 -
$ -	460 384	137
$ 136 108 - (23)	3,981 1,620 3,329 1,557 - (3,162) - -	47 45 - -
$ 221	7,310 15	92
$ -	12,738 723	88
$ 326	9,007 1,092	133
$ 545	15,923 1,542	187

～ 26 ～

Notes to Parent Company Only Financial Statements of Better Life Group Co., Ltd. (Continued)

(X) Short-term borrowings

The details of the Company's short-term borrowings are as follows:

2021.12.31	2021.12.31	2020.12.31
$ - 423,053		10,000 596,684
$ 423,053		606,684
$ 415,207		290,576
	1.85%~2.09%	1.85%~2.12%

Please refer to Note 8 for the details of the Company's assets pledged for bank borrowings.

(XI) Short-term notes payable

The details of the Company’s short-term notes payable are as follows:

Less: Discounted short-term notes payable Total	2020.12.31	2020.12.31
	Guarantee or acceptance institution Interest rate range Amount
	Bills Company A 1.94%	$ 27,000 (11)
		$ 26,989

Please refer to Note 8 for the details of the Company's short-term notes payable pledged for bank borrowings.

(XII) Corporate bonds payable

The information on the Company’s corporate bonds payable is as follows:

Amount of ordinary corporate bonds issued Unamortized balance of discounted corporate bonds payable Cumulative amount of redemption Cumulative amount of conversion Balance of corporate bonds payable at the end of the period	2021.12.31
	$ 300,000 (23,970) - -
	$ 276,030

Equity components - conversion right (recognized in capital surplus- stock options): Please refer to Note 6(16) for details.

Interest expenses: Please refer to Note 6(20) for details.

The main rights and obligations attached to the Company's issued and outstanding secured convertible corporate bonds are as follows:

Item	The first issue of secured convertible corporate bonds in 2021
Total issue amount	NT$300,000,000
Issue date	2021.9.24
Issueperiod	2021.9.24~2024.9.24
Coupon rate	0%
Trustee	Land Bank of Taiwan Co.,Ltd.

～ 27 ～

Notes to Parent Company Only Financial Statements of Better Life Group Co., Ltd. (Continued)

Item	The first issue of secured convertible corporate bonds in 2021
Repayment method	Unless the bondholders apply for conversion into the Company’s ordinary shares as per the Company's conversion method, or the Company redeems them in advance as per the conversion method, or securities firms buy back and cancel them, the Company will redeem the bonds in cash in a lump sum upon maturity.
Redemption method	From the day following the full three months after the issue of the convertible corporate bonds (December 25, 2021) to 40 days before the end of the issue period (August 15, 2024), if the closing price of the Company's ordinary shares exceeds the current conversion price by 30% or higher for 30 consecutive business days, or when the balance of the outstanding convertible corporate bonds is lower than 10% of the initial total issue amount, the Company may redeem the bonds in advance.
Conversion method	Conversion period From the day following the full three months after the issue date of the convertible corporate bonds (December 25, 2021) to the maturity date (September 24, 2024), the bondholders shall convert the bonds into the Company’s ordinary shares as per the conversion method.
Conversion price	NT$15.8

(XIII) Lease liabilities

The Company's lease liabilities are as follows:

Lease liabilities The Company's lease liabilities are as follows:
Current Non-current	2021.12.31	2020.12.31
	$ 2,919	3,527
	$ 11,100	7,437

Please refer to Note 6(21) on financial instruments for maturity analysis, The amounts recognized in profit or loss are as follows:

Interest expense on lease liabilities Expense on short-term leases Amounts recognized in the statements of cash flows Total cash outflow from leases	2021 2020
	$ 329 497 $ 412 647 are as follows: 2021 2020
	$ 3,773 6,111

The Company leases in buildings as offices, and the lease terms of the offices range from one to five years. In addition, the Company leases in parking space, machinery, and transportation equipment, with the lease terms ranging from one to three years.

The above lease contracts contain an option for lease extension, which is only enforceable by the Company and not by the lessor. When it is not reasonably certain that an option to extend the lease term will be exercised, payments related to the period covered by the option are not included in the lease liabilities.

Also, the lease term of some transportation equipment leased by the Company is three years, and these leases are short-term leases. The Company elects to apply the exemption from

～ 28 ～

Notes to Parent Company Only Financial Statements of Better Life Group Co., Ltd. (Continued)

recognition and does not recognize the relevant right-of-use assets and lease liabilities.

(XIV) Employee benefits

Defined contribution plan

The Company's defined contribution plan is as per the Labor Pension Act, and the Company makes a contribution equal to 6% of each employee’s monthly salary to employees’ individual pension accounts under the Bureau of Labor Insurance. Under this plan, after the Company has provided a fixed amount to the Bureau of Labor Insurance, it has no legal or constructive obligation to pay additional amounts.

The Company’s pension expenses under the defined contribution plan in 2021 and 2020 were NT$698,000 and NT$780,000, respectively, which have been contributed to the Bureau of Labor Insurance.

(XV) Income tax
Income tax expense

The details of the Company's income tax expenses for 2021 and 2020 are as follows:

Current income tax expense Land value increment tax Deferred tax expense	2021	2020
	$ - 1,122 -	- - -
	$ 1,122	-

The reconciliation between the Company's income tax expense and net loss before tax in 2021 and 2020 is as follows:

Net loss before tax Income tax calculated at the domestic tax rate where the Company is located Land value increment tax Book-tax difference Unrealized investment (income) loss Book-tax difference in capitalized interest Current tax losses on unrecognized deferred tax assets Changes in unrecognized temporary differences Total	2021	2020
	$ (32,555) (6,735) 1,122 639 (2,431) 1,109 7,505 (87) $ 1,122	(61,775)
		(12,355) - 410 2,814 1,347 7,852 (68)
		-

Deferred tax assets

Unrecognized deferred tax assets

Items not recognized in deferred tax assets by the Company are as follows:

Deductible temporary differences Tax loss	2021.12.31	2020.12.31
	$ 747 95,464	833 87,695
	$ 96,211	88,528

Taxable losses are determined in accordance with the Income Tax Act, and the losses for the previous ten years may be deducted from the net income for the year after being approved by the tax authority before the income is taxed. Such an item is not recognized in deferred tax assets because it is not highly probable that the Company will have sufficient taxable income in the future for the temporary differences.

～ 29 ～

Notes to Parent Company Only Financial Statements of Better Life Group Co., Ltd. (Continued)

As of December 31, 2021, the deadlines for using the tax losses that the Company has not recognized in deferred tax assets are as follows:

Year	Losses not yet used Last valid year
Approved amount in 2013 Approved amount in 2014 Approved amount in 2015 Approved amount in 2016 Approved amount in 2018 Approved amount in 2019 Amount filed in 2020 Estimated amount in 2021	$ 62,773 2023 53,343 2024 78,675 2025 75,403 2026 80,915 2028 48,108 2029 40,580 2030 37,524 2031 $ 477,321

The Company's profit-seeking enterprise income tax returns filed have been approved by the tax authority up to the year 2019.
(XVI) Capital and other interests

The total amount of the Company's authorized capital as of December 31, 2021 and 2020 was both NT$6,750,000,000, divided into 675,000,000 shares in both years, with a par value of NT$10 per share. The paid-in capital is NT$1,002,654,000, with a par value of NT$10 per share, and all the capital funds for the outstanding shares have been received.

Issue of ordinary shares

On August 4, 2021, the Company’s shareholders' meeting passed a resolution to conduct capital increase in cash through a private placement to increase its working capital and enhance future development and authorized the Board of Directors, within a scope of not more than 30,000,000 shares, to conduct capital increase in cash by issuing ordinary shares in one or two tranches through private placement within one year after the resolution was adopted by the shareholders' meeting.

Capital surplus

he balance of the Company's capital surplus is as follows:

Gain on disposal of assets Stock options - issue of convertible corporate bonds	2021.12.31	2020.12.31
	$ 110 21,828	110 -
	$ 21,938	110

Pursuant to the Company Act, the Company shall issue new shares or pay out cash in proportion to the existing shareholders' shares from the realized capital surplus after the capital surplus is used to compensate the deficit first. The realized capital surplus referred to in the preceding paragraph includes the premium from the shares issued at par and the income from gifts. Pursuant to the Regulations Governing the Offering and Issuance of Securities by Securities Issuers, the total amount of capital surplus to be used as capital shall not exceed 10% of the paid-in capital.

～ 30 ～

Notes to Parent Company Only Financial Statements of Better Life Group Co., Ltd. (Continued)

3. Retained earnings

Under the earnings distribution policy as set forth in the Company’s Articles of Incorporation, where the Company made a profit in a fiscal year, the profit shall be first used for paying taxes, offsetting the cumulative deficit, setting aside 10% of the remaining profit as a legal reserve unless it has reached the total amount of the Company’s paid-in capital, setting aside an amount for or reversing a special reserve in accordance with operational needs and the laws and regulations, and then any remaining profit, together with any undistributed retained earnings at the beginning of the period, shall be adopted by the Company’s Board of Directors as the basis for making a distribution proposal, which shall then be submitted to the shareholders’ meeting for a resolved before distribution.

(1) Legal reserve

When the Company suffers no losses, it may, upon a resolution by the shareholders' meeting, issue new shares or pay out cash from the legal reserve, but only to the extent that such reserve exceeds 25% of the paid-in capital.

(2) Earnings distribution

The Company’s shareholders' meeting passed a resolution on August 4, 2021 and June 18, 2020 to compensate the 2020 and 2019 losses.

Other interests (net of tax)

Exchange difference on translation of financial statements of foreign operations	Exchange difference on translation of financial statements of foreign operations	Unrealized gain (loss) on financial assets at fair value through other comprehensive income	Total
$ $	90 (76) -	(19,796) - 3,414	(19,706) (76) 3,414
	14	(16,382)	(16,368)
$ $	(435) 525 90	(19,796) - (19,796)	(20,231) 525 (19,706)

(XVII) Loss per share

The Company’s basic earnings per share in 2021 and 2020 were calculated based on the net loss attributable to the equity holders of the Company's ordinary shares and the weighted average number of outstanding ordinary shares. The relevant numbers are as follows:

Basic loss per share
(1) Net loss attributable to equity holders of the Company’s ordinary shares

Net loss attributable to equity holders of the Company’s ordinary shares for the current period	2021 2020
	$ (33,677) (61,775)

～ 31 ～

Notes to Parent Company Only Financial Statements of Better Life Group Co., Ltd. (Continued)

(2) Weighted average number of outstanding ordinary shares

Weighted average number of outstanding ordinary shares Basic loss per share (NTD)	2021 2020
	100,265 100,265
	$ (0.34) (0.62)

2. Diluted loss per share

The Company’s diluted earnings per share in 2021 and 2020 were calculated based on the net income attributable to the equity holders of the Company's ordinary shares and the weighted average number of outstanding ordinary shares, adjusted for the effect of all potential dilutive ordinary shares. The relevant numbers are as follows:

(1) Net loss attributable to equity holders of the Company’s ordinary shares (diluted)

Net loss attributable to equity holders of the Company’s ordinary shares (basic) Interest expense on convertible corporate bonds Net loss attributable to equity holders of the Company’s ordinary shares (diluted)	2021	2020
	$ (33,677) (Note) $ (33,677)	(61,775) -
		(61,775)

(2) Weighted average number of outstanding ordinary shares (diluted)

	2021	2020
100,265 (Note) 100,265 $ (0.34)	100,265 (Note) 100,265	100,265 -
		100,265
		(0.62)

Note: It is not included in the calculation of diluted earnings per share due to its antidilution effect.

(XVIII) Revenue from customer contracts
Details of revenue

Revenue from customer contracts recognized Rent income 2. Details of revenue Main region/market: Taiwan Main product/service line: Product sales (sales of property) Contract type: Fixed-price contract	2021	2020
	$ 136,276 102	205,141 137 205,278 2020
	$ 136,378
	2021
	$ 136,276	205,141 205,141 205,141
	$ 136,276
	$ 136,276

～ 32 ～

Notes to Parent Company Only Financial Statements of Better Life Group Co., Ltd. (Continued)

Time point of revenue recognition:

time 2021.12.31	136,276	205,141 2020.1.1
	2020.12.31
$ 394 47,262 (4,212)	1,269 4,212 (4,212)	2,119 4,212 (4,212) 2,119 15,799
$ 43,444	1,269
$ 48,776	21,934

Please refer to Note 6(3) for the information on notes receivable, accounts receivable, and impairment thereof.

The opening balances of contract liabilities on January 1, 2021 and 2020 were recognized in income in the amounts of NT$0 and NT$6,565,000 in 2021 and 2020, respectively. Changes in contract liabilities are mainly from the difference between the time when the Company transfers goods or services to customers to meet performance obligations (that is, when contract liabilities are recognized in revenue) and the time when customers make a payment. The amounts of refunds due to changes in contract liabilities as a result of contract cancellation by customers were NT$0 and NT$2,576,000, respectively, and the amounts reclassified to income of liquidated damages were NT$0 and NT$765,000.

(XIX) Remuneration to employees, directors, and supervisors

As per the Company's Articles of Incorporation, where it makes a profit in a year, it shall distribute no less than 4% of the balance as employees’ remuneration and no more than 4% as directors’ and supervisor's remuneration. However, when the Company still has a cumulative deficit, it shall reserve an amount in advance to compensate it.

The Company suffered pre-tax losses in 2021 and 2020, so there was no need to estimate the remuneration to employees, directors, and supervisors. Relevant information is available on the Market Observation Post System (MOPS).

(XX) Non-operating income and expenses

Interest income

The details of the Company's interest income for 2021 and 2020 are as follows:

Interest income Interest on bank deposits Imputed interest on security deposits Borrowings - related parties Guarantee deposits paid Other interest income	2021	2020
	$ 11 9 - 3,147 30	34 26 402 3,340 62 3,864
	$ 3,197

～ 33 ～

Notes to Parent Company Only Financial Statements of Better Life Group Co., Ltd. (Continued)

2. Other income

The details of the Company's other income for 2021 and 2020 are as follows:

Management fees income Rent income Income of liquidated damages Others	2021	2020
	$ 4,024 50 - 227	929 614 765 395
	$ 4,301	2,703

3. Other gains and losses

The details of the Company's other gains and losses for 2021 and 2020 are as follows:

Foreign currency exchange gain Gain on lease modifications Gain on reversal of impairment of property, plant and equipment Others	2021	2020
	$ 1 400 11,787 (2,577)	- 1 - (4)
	$ 9,611	(3)

4. Financial costs

The details of the Company's financial costs for 2021 and 2020 are as follows:

	2021	2020
$	11,841 329 1,374 2,858 (1,626)	9,022 497 3,800 - (8)
$	14,776	13,311
	1.85%~2.01%	1.91%~2%

(XXI) Financial instruments

1. Credit risk

(1) Maximum exposure to credit risk

The carrying amount of financial assets represents the maximum exposure to credit risk.

(2) Credit concentration risk

As the Company has a large customer base and does not have significant customer concentration in transactions, there is no significant credit concentration risk of accounts receivable.

～ 34 ～

Notes to Parent Company Only Financial Statements of Better Life Group Co., Ltd. (Continued)

(3) Credit risk of receivables and debt securities

Please refer to Appendix 6(3) for the information on credit risk exposure of notes and accounts receivable.

Other financial assets at amortized cost include other receivables (listed in other financial assets - current). Allowances for overdue receivables for 2021 and 2020 have been provided.

Said financial assets are with low credit risk, so the allowance for losses for the periods was measured at the amount of 12-month expected credit loss (please refer to Note 4(6) for information on how the Company determines the credit risk as low).

Liquidity risk

The table below shows the maturity dates of contractual financial liabilities, including estimated interest but excluding the effect of netting arrangement.

December 31, 2021 Non-derivative financial liabilities Floating-rate instruments Fixed-rate instruments Non-interest bearing liabilities Lease liabilities December 31, 2020 Non-derivative financial liabilities Floating-rate instruments Fixed-rate instruments Non-interest bearing liabilities Lease liabilities	Carrying amount Contractua l cash flow Within 6 months $ 423,053 434,835 139,195 276,030 300,000 - 46,115 46,115 46,115 14,019 14,625 1,523	6–12 months 1–2years 2–5years More than 5years
		2,736 201,655 91,249 - - - 300,000 - - - - - 1,604 3,193 8,305 -
	$ 759,217 795,575 186,833	4,340 204,848 399,554 -
	$ 606,684 623,887 350,246 26,989 27,436 262 51,060 51,060 51,060 10,964 11,547 1,924	2,473 179,919 91,249 - 27,174 - - - - - - - 1,928 3,855 3,840 -
	$ 695,697 713,930 403,492	31,575 183,774 95,089 -

The Company does not expect that the timing of the cash flows for the maturity analysis will occur significantly earlier or that the actual amounts will be significantly different.

Interest rate analysis

The exposure of the Company's financial assets and financial liabilities to interest rate risk is described in liquidity risk management in this note.

The sensitivity analysis below is based on the exposure of derivative and non-derivative instruments to interest rate risk at the balance sheet date. For floating-rate liabilities, the analysis is based on an assumption that the amount of a liability outstanding at the balance sheet date is outstanding throughout the year. The sensitivity to a 1% change in interest rate is used when reporting the interest rate risk internally to key management personnel and also represents the management’s assessment of the reasonably possible change in interest rates.

If the interest rate increased/decreased by 1% and all other variables remain unchanged, the Company’s net income before tax for 2021 and 2020 would have decreased/increased by NT$3,615,000 and NT$5,934,000, respectively, mainly due to the Company’s borrowings at variable interest rates.

～ 35 ～

Notes to Parent Company Only Financial Statements of Better Life Group Co., Ltd. (Continued)

Information on fair value
(1) Valuation process of fair value of financial instruments
- The Company's accounting policies and disclosures include the adoption of fair value to measure its financial and non-financial assets and liabilities. The Company has established relevant internal control systems for fair value measurement. Of them, a valuation team has been established to be responsible for reviewing all significant fair value measurements (including Level 3 fair value) and reporting directly to the Chief Financial Officer. The team regularly reviews significant unobservable inputs and adjustments. If an input used to measure fair value is based on external third-party information (such as a broker or pricing service institution), the valuation team will assess the evidence provided by the third party in support of the input to confirm that the valuation and its fair value level are aligned with the requirements of IFRS.

The Company adopts observable inputs in the market wherever possible when measuring its assets and liabilities. The fair value levels are based on the inputsused in the valuation techniques and are classified as follows:

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices).
Level 3 inputs are not based on observable inputs (unobservable inputs) for the asset or liability.
(2) Types and fair values of financial instruments The Company's financial assets at FVTOCI are measured at fair value on a recurring basis. The carrying amounts and fair values of various types of financial assets and financial liabilities (including fair value level information, but the carrying amounts of financial instruments not measured by fair value is a reasonable approximation of fair value, and the fair values of lease liabilities, as per regulations, are not required to be disclosed) are listed below:

	2021.12.31	2021.12.31	2021.12.31
Carrying amount		Fairvalue
	Level 1	Level 2	Level 3	Total
$ 17,944	-	-	17,944	17,944
	2020.12.31
Carrying amount		Fairvalue
	Level 1	Level 2	Level 3	Total
	-	-	18,628	18,628
$ 18,628

(3) Fair value valuation techniques for financial instruments not at fair value The methods and assumptions adopted by the Company to estimate instruments not at fair value are as follows:

～ 36 ～

Notes to Parent Company Only Financial Statements of Better Life Group Co., Ltd. (Continued)

(3.1) Financial assets and liabilities at amortized cost

If there is information on quoted prices from transactions or market makers, the latest transaction price and quoted price should be adopted as the basis for valuating the fair value. If there is no information on market prices for reference, the valuation method is adopted for estimation. The estimates and assumptions used in the valuation method are the discounted value of cash flows to estimate the fair value.

(4) Fair value valuation techniques for financial instruments at fair value
(4.1) Non-derivative financial instruments

When a financial instrument is quoted in an active market, the quoted price in the active market is the fair value. The market prices announced by major exchanges and Taipei Exchange that sells popular bonds are the basis for the fair value of listed equity instruments and debt instruments with quoted prices in the active markets. A financial instrument is deemed to be with quoted prices in the active markets if its quoted prices can be obtained from exchanges, brokers, underwriters, industry associations, pricing services institutions, or competent authorities in a timely and regular manner, and the prices represent the prices in actual fair market transactions that occur frequently. If the above criteria are not met, the market is deemed inactive. Generally speaking, a large bid-ask spread, a significant increase in the bid-ask spread, or a low trading volume are all indicators of an inactive market. Except for the above financial instruments with active markets, the fair values of other financial instruments are obtained through valuation techniques or with reference to the quoted prices by counterparties. The fair value obtained through valuation techniques may be calculated and obtained with reference to the present fair value of other financial instruments with substantively similar criteria and characteristics, discounted cash flow method, or other valuation techniques, including the use of models based on market information available at the balance sheet date.

If a financial instrument held by the Company is with no active market and its fair value is in the category of equity instruments without quoted prices based on the type and attribute, its fair value is measured using the asset method with the main assumption based on the balance sheet of the investee. The estimate has been adjusted for the effect of the discount on the control premium and liquidity of the equity securities.
(5) Transfer between Levels 1 and 2: None.
(6) Details of changes in Level 3

equity securities. Transfer between Levels 1 and 2: None. Details of changes in Level 3
January 1, 2021 Total gain or loss Recognized in other comprehensive income Capital refunded for capital reduction December 31, 2021 January 1, 2020 Capital refunded for capital reduction December 31, 2020	At fair value through other comprehensive income
	Equity instruments without quoted prices $ 18,628 3,414 (4,098) $ 17,944 $ 21,448 (2,820) $ 18,628	Equity instruments without quoted prices

～ 37 ～

Notes to Parent Company Only Financial Statements of Better Life Group Co., Ltd. (Continued)

(7) Quantitative information on measurement of significant unobservable fair value input (Level 3)
The Company's fair value classified as Level 3 mainly includes financial assets at FVTOCI - equity securities investment.

Most of the Company's fair values are classified as Level 3 (with only a single significant unobservable input), and there are multiple, significant unobservable inputs only in investments in equity instruments without active markets. Significant unobservable inputs for investments in equity instruments with no active market are independent of each other and therefore do not correlate.

Quantitative information on significant unobservable inputs is listed as follows:

			Significant unobservable	Significant unobservable	Significant unobservable
			input and	relations	with fair
Item	Valuation technique	Significant unobservable input		value
Financial assets at FVTOCI –	Asset method	‧Discount on liquidity (32.30% on both	‧The higher the		liquidity
investments in equity instruments		December 31, 2021 and 2020)	discount, the lower the fair
without active markets		‧Discount on non-controlling interests	value
		(6.45% on December 31, 2021 and	‧The higher	the non-controlling
		17.87% on December 31, 2020)	interest	discount,	the lower
			the fair	value

(8) Analysis of sensitivity of Level 3 fair value to reasonably possible alternative assumptions

The measurement of fair values of financial instruments by the Company is reasonable, but the use of different valuation models or valuation parameters may result in different valuation results. For financial instruments classified as Level 3, if the valuation parameters change, the effect on the current profit or loss or other comprehensive income is as follows:

Increase or decrease Input Change December 31, 2021 Financial assets at fair value through other comprehensive income Investment in equity instruments without active markets Non-controlling interest discount +10% Non-controlling interest discount -10% Liquidity discount +10% Liquidity discount -10% December 31, 2020 Financial assets at fair value through other comprehensive income Investment in equity instruments without active markets Non-controlling interest discount +10% Non-controlling interest discount -10% Liquidity discount +10% Liquidity discount -10%	Increase or decrease Input Change	Changes in fair value reflected in other comprehensive income
		Favorable change Unfavorable change
		- (1,870) 1,870 - - (2,583) 2,583 - - (2,186) 2,186 - - (2,652) 2,652 -

The Company’s favorable and unfavorable changes refer to the fluctuations of fair values, and fair values are calculated with the valuation techniques based on different unobservable inputs. If the fair value of a financial instrument is affected by more than one input, the above table only reflects the effect of changes in a single input without taking into account the correlation and variability between the inputs

～ 38 ～

Notes to Parent Company Only Financial Statements of Better Life Group Co., Ltd. (Continued)

(XXII) Financial risk management

Summary

The Company is exposed to the risks below due to the use of financial instruments:

(1) Credit risk
(2) Liquidity risk
(3) Market risk

This note indicates the Company's exposure to each of the above risks and its objectives, policies, and procedures for risk measurement and management. Please refer to the notes to the parent company only financial statements for more quantitative information.

Risk management framework
The Board of Directors is responsible for establishing and supervising the Company’s risk management structure at its discretion. The Board of Directors has fully delegated the management to be responsible for the development and management of the Company's risk management policy, and it shall regularly report on the operations to the Board of Directors. The formulation of the Company's risk management policy aims to identify and analyze the risks faced by the Company, set appropriate risk limits and control, and monitor risks and observance of risk limits. The risk management policy and system are regularly reviewed to reflect changes in market conditions and the Company's operations. The Company develops a disciplined and constructive control environment through training, management guidelines, and operating procedures, enabling all employees to understand their roles and responsibilities.

The Company's Audit Committee supervises how the management monitors compliance with the Company's risk management policy and procedures and reviews the appropriateness of the Company's risk management framework governing the risks faced. Internal auditors assist the Company's Audit Committee with its supervisory role. These personnel conduct regular and exception reviews of risk management controls and procedures and report the review results to the Board and Audit Committee.

Credit risk

The Company’s credit risk is the risk of financial loss suffered by the Company arising from the failure of customers or counterparties of financial instruments to fulfill contractual obligations, mainly from the Company's accounts receivable from customers.

(1) Accounts receivable and other receivables
The a credit policy has been established in the Company's internal control system, according to which the Company should analyze the credit rating of each new customer before making a standard payment or formulating shipping terms and conditions. The Company's review and control mechanism includes customers’ historical transaction records and external credit ratings. Maximum procurement amounts are set on a customer-by-customer basis and represent the maximum outstanding amount that does not require the management team’s approval. Such maximum amounts are under regular review.
As the Company has a large customer base for the construction business with customers distributed over different areas, there is no significant customer concentration and the credit concentration risk of accounts receivable is not likely to be significant. As most of the counterparties engaging in real estate development and sales business are generally individuals, the funds received are mainly paid by remittance, bills or notes, and mortgage, so the relevant credit risk is relatively low.

～ 39 ～

Notes to Parent Company Only Financial Statements of Better Life Group Co., Ltd. (Continued)

In addition, the Company's construction projects are based on its operating regulations on project contracting. Its contracting and construction technology conforms to the regulations with a positive reputation. Therefore, it can ensure the quality and progress of its construction projects. When necessary, it requires the construction companies to make a security deposit to ensure the construction quality. Other receivables are mainly from landowners, other joint construction partners, and subsidiaries. After assessment, the debtors should be able to repay the debts, so the credit risk of the Company's other receivables is not significant.

(2) Investment

The credit risk of bank deposits, fixed-income investments, and other financial instruments is measured and monitored by the Company’s finance department. As the Company's transaction counterparties and contract counterparties are all creditworthy banks, financial institutions rated at investment grade and above, corporate organizations, and government agencies, there is no significant doubts over contract performance, hence no significant credit risk.

(3) Guarantee

As of the end of 2021 and 2020, the Company and other co-builders, in joint investment in construction projects or joint construction projects, provide endorsements and guarantees to each other. Please refer to Note 13 for details of such endorsements and guarantees.

Liquidity risk
Liquidity risk is the risk arising when the Company cannot deliver cash or other financial assets to settle financial liabilities and fails to fulfill relevant obligations. The Company's approach to managing liquidity is to ensure, as much as possible, that the Company, under normal circumstances and pressure, has sufficient liquidity to cover its liabilities as they fall due, without resulting in a risk of incurring unacceptable losses or causing damage to the Company's reputation.

The Company calculates the funds required for the cost of each development and construction project, payments that can be collected from customers during the sales period, and the construction loans from banks and properly plans the times of receipts of funds to ensure that it has sufficient working capital to cover the liabilities that are due. As part of the funds required for the development and construction projects can be financed by banks, and customers can also obtain mortgages from banks to cover most of the payment when housing units are handed over to customers; thus, the Company is not susceptible to the risk of material losses or reputational damage.

Market risk

Market risk refers to the risk that affects the Company's revenue or the value of financial instruments held due to changes in market prices, such as changes in exchange rates, interest rates, or equity instrument prices. The purpose of market risk management is to control the exposure to market risks within a range of tolerance and optimize return on investment. The Company does not engage in transactions in financial instruments (including derivative financial instruments) for the main purpose of speculation.

(1) Exchange rate risk

The Group’s functional currency is mainly in NTD. The Company's main business transactions (including receivables, payables, loans, or financing) are mainly denominated in NTD, so there is no risk of significant fluctuations in foreign exchange rates.

～ 40 ～

Notes to Parent Company Only Financial Statements of Better Life Group Co., Ltd. (Continued)

(2) Interest rate risk

The Company's policy is to have the management review and control the optimal interest rate portfolio of financial liabilities, in order to control the risk of interest rate fluctuations in the Company's finance.

The Company’s interest rate risk mainly comes from bank borrowings. As per the Company’s assessment, the interest rate level is stable in its operating environment in recent years, and there should not be significant interest rate risk.

(XXIII) Capital management

The Company's capital management aims to ensure the ability to continue as a going concern, continue to provide bonuses to shareholders and interests to other stakeholders, and maintain an optimal capital structure to reduce capital costs.

To maintain or adjust the capital structure, the Company may adjust the dividends paid to shareholders, reduce capital and refund capital to shareholders, issue new shares, or sell assets to settle liabilities.

The Company controls capital based on the debt-to-equity ratio. The ratio is calculated with net debt divided by total capital. Net debt is the total debt on the balance sheet less cash and cash equivalents. Total capital refers to all components of equity (i.e. share capital, capital surplus, retained earnings, and other equity) plus net debt.

The Company’s capital management strategy in 2021 was the same as in 2020, that is, to maintain the debt-to-equity ratio at a certain level to ensure financing at a reasonable cost. The debt-to-equity ratios as of December 31, 2021 and 2020 were as follows:

	2021.12.31	2020.12.31
$	834,918 (34,481)	738,214 (10,432)
	800,437 596,326	727,782 604,837
$	1,396,763	1,332,619
	57.31%	54.61%

(XXIII) Non-cash transactions and investments and financing activities

The Company's non-cash transactions and investments and financing activities in 2021 and 2020 are as follows:

Please refer to Note 6(9) for details of the right-of-use assets obtained through leases.
The reconciliation of liabilities from financing activities is as follows:

2021.1.1	Cash flows	Non-cash movement	Non-cash movement	Non-cash movement	2021.12.31
		Others
$ 606,684 26,989 - 10,964	(183,631) (27,304) 295,000 (3,032)	- (Note 1) 315 (Note 4) (18,970) (Note 2) 6,087 (12,568)			423,053 - 276,030 14,019
$ 644,637	81,033			(12,568)	713,102
$ 229,260 484,485 18,532	377,424 (459,594) (4,967)		- (Note 1) 2,098 (Note 3) (2,601)		606,684 26,989 10,964
$ 732,277	(87,137)		(503)		644,637

～ 41 ～

Notes to Parent Company Only Financial Statements of Better Life Group Co., Ltd. (Continued)

Note 1: It is the discounted amortized short-term notes payable.

Note 2: It is an increase of NT$13,198,000 and a decrease of NT$7,111,000 in rent. Note 3: It is an increase of NT$1,107,000 and a decrease of NT$3,708,000 in rent. Note 4: It is the stock options for convertible corporate bonds recognized in the amount of NT$21,828,000 less discount amortization of NT$2,858,000.

VII. Related Party Transactions

(I) Name of related party and relations

During the periods covered by the parent company only financial statements, the Company’s subsidiaries and other related parties with transactions with the Company are as follows:

Name of related party

Relations with the Company

Better Life Green Energy Technology Co., Ltd. Subsidiary of the Company Better Life Real Estate Co., Ltd. Subsidiary of the Company Better Life Jinxia (Xiamen) Tourism Management Subsidiary of the Company Service Co., Ltd. Better Life Group Travel Service Co., Ltd. Subsidiary of the Company Puyuan Development Co., Ltd. A supervisor at the company is a member of the key management personnel of the Company Puyuan Advertising Co., Ltd. A director at the company is a member of the key management personnel of the Company Puqun Advertising Co., Ltd. A director at the company is a member of the key management personnel of the Company Puyi Interior Design Co., Ltd. A director at the company is a member of the key management personnel of the Company Puyuan Construction Co., Ltd. A director at the company is a member of the key management personnel of the Company Puxu Advertising Co., Ltd. A director at the company is a member of the key management personnel of the Company Pushi Construction Co., Ltd. A director at the company is a member of the key management personnel of the Company Puquan Advertising Co., Ltd. A director at the Company Pucheng Construction Co., Ltd. Substantive related party Chang, Chia-Sheng Substantive related party Chang, Chun-Kuei A relative within first degree of kinship of a director at the Company

～ 42 ～

Notes to Parent Company Only Financial Statements of Better Life Group Co., Ltd. (Continued)

(II) Significant transactions with related parties
Purchase of goods from related parties
- (1) The amount of goods purchased by the Company from other related parties for contracting of projects is as follows:

contracting of projects is as follows:
Pucheng Construction Co., Ltd. Belongs to other related parties	Purchases 2021 2020 $ 28,108 22,640 2,286 1,739
		2020
		22,640 1,739
	$ 30,394	24,379

The price of a project outsourced by the Company to a related party is determined through price comparison and negotiation between both parties, and the payment is made as per the agreed payment terms. Please refer to Note 9 for details of the construction contracts signed by the Company and related parties as of December 31, 2021 and 2020.

(2) The Company purchased land from a related party, - Chang, Chia-Sheng, in June 2020 to facilitate the construction and development business. The total contract price was NT$130,800,000, and the ownership transfer was completed on November 30, 2020. This transaction was recognized in construction in progress. Said acquisition price is based on a real property appraisal report.

Payables to related parties

The details of the Company's payables to related parties are as follows:

Account Related party category	2021.12.31	2020.12.31
Notes payable Pucheng Construction Co., Ltd. Accounts payable Pucheng Construction Co., Ltd. Accounts payable Puqun Advertising Co., Ltd. Accounts payable Subsidiaries Accounts payable Belongs to other related parties Other payables Subsidiaries	$ 6,100 - 10,361 9,554 200 -	8,871 8,872 - 745 200 1,429
	$ 26,215	20,117

Leases
(1) Lease-out

The Company leased an office to its subsidiary in 2021 and 2020 and signed a twoyear lease contract as per the rental market in nearby areas. The rental income in 2021 and 2020 was both NT$91,000.

(2) Lease-in

In June 2018 and November 2021, the Company leased in office buildings as the headquarters from a related party and signed two-year and five-year lease contracts with reference to the office rental market in nearby areas. The interest expenses recognized for 2021 and 2020 were NT$256,000 and NT$40,000 as well as NT$448,000 and NT$0, respectively. As of December 31, 2021 and 2020, the balance of lease liabilities was NT$12,612,000 and NT$9,401,000, respectively In addition, the guarantee deposits paid due to the above leases as of December 31, 2021 and 2020 were NT$0 and NT$579,000, respectively.

Others
(1) The Company signed an marketing agency contract with its subsidiary Better Life Real Estate Co., Ltd. for the sale of the Kang Chiao Villa project. See Note 9. In 2021 and 2020, the Company paid the marketing agency service fee to the subsidiary, in the

～ 43 ～

Notes to Parent Company Only Financial Statements of Better Life Group Co., Ltd. (Continued)

amounts of NT$7,993,000 and NT$11,481,000, respectively, recognized in operating expenses, and the incremental cost of obtaining contracts was recognized in the amounts of NT$5,605,000 and NT$3,356,000, respectively.

(2) The Company signed an marketing agency contract with Puqun Advertising Co., Ltd. and Puyuan Advertising Co., Ltd. Better Life Real Estate Co., Ltd., respectively, for the sale of property. See Note 9. In 2021 and 2020, the Company paid the marketing agency service fee to the related parties, in the amounts of NT$0 and NT$413,000, respectively, recognized in operating expenses, and the incremental cost of obtaining contracts was recognized in the amounts of NT$9,867,000 and NT$0, respectively.
(3) The Company received guarantee notes from Pucheng Construction Co., Ltd. for construction projects and other business needs as of December 31, 2021 and 2020, both in the amount of NT$28,612,000.
(4) The Company paid guarantee deposits and notes to the related party, Chang, ChunKuei, in the amounts of NT$24,500,000 and NT$24,500,000 as of December 31, 2021 for a joint construction and separate sale project in the Huaya Section in Guishan District. In addition, it engaged in a joint investment in a construction project with Puyuan Development Co., Ltd. and Pushi Construction Co., Ltd.
(5) The Company and Puyuan Construction Co., Ltd. jointly invested in a construction project in the Meiren Section in Songshan District.
(6) The company and its subsidiary, Better Life Green Energy Technology Co., Ltd., signed a solar power management contract in 2021. It is agreed that the Company has to pay a monthly management service fee of NT$60,000 to the subsidiary and the necessary costs for the construction of a solar power zone in a solar power project till a development permit is obtained and the category of land use is changed. As of December 31, 2021, the estimated accounts payable amounted to NT$6,400,000.
(III) Transactions with key management personnel Key management personnel’s remuneration includes:

Short-term employee benefits

2021	2020
$ 9,824	9,559

VIII. Assets Pledged

Assets Pledged	Assets Pledged	Assets Pledged
The details of the book value of the assets pledged by the Company as collateral are as follows: Name of asset Asset pledged as collateral 2021.12.31 2020.12.31
Inventories -Construction industry Bank borrowings and short-term notes payable Other financial assets-current Reserve account Other financial assets-current Trust account Investment property (initially listed in property, plant and equipment) Bank deposits and corporate bonds payable	$ 836,516 5,890 21,347 83,047 $ 946,800	890,219 9,037 - - 899,256

～ 44 ～

Notes to Parent Company Only Financial Statements of Better Life Group Co., Ltd. (Continued)

IX. Significant Contingent Liabilities and Unrecognized Commitments

(I) Significant unrecognized commitments:
The information on the sales contracts signed between the Company and the customers for the projects launched is as follows:

for the projects launched is as follows:
Total contract price Advance receipts	2021.12.31	2020.12.31
	$ 304,292	68,248 21,934
	$ 48,776

The construction contracting contracts signed and payments made by the Company for the construction projects it invests are as follows:

the construction projects it invests are as follows:
Payables not yet priced as per contract Payables to related parties that have not been priced as per contract	2021.12.31	2020.12.31
	$ 224,335	277,474
	$ 221,990	257,917

The situation of joint construction contract and joint investment contract on construction projects signed by the Company and the landlords is as follows:

projects signed by the Company and the landlords is as	follows:	follows:
Project name or land lot Joint construction method	Joint construction deposits paid (construction depositspaid)
	2021.12.31	2020.12.31
Xinyi Section, Xinyi District Joint investment in construction and joint construction and allocation of housing units $ 195,317 Zhongshan Section, Zhongshan District Joint investment in construction and joint construction and allocation of housing units - Meiren Section, Songshan District Joint investment in construction and joint construction and allocation of housing units - Huaya Section, Guishan District Joint investment in construction and joint construction and separate sale 24,500 $ 219,817	$ 195,317 - - 24,500	192,170 - - -
		192,170

The Company paid the guarantee notes for business needs as of December 31, 2021 and 2020 in the amounts of NT$24,500,000 and NT$0, respectively.
The Company signed an marketing agency contract with its subsidiary Better Life Real Estate Co., Ltd. for the sale of the Kang Chiao Villa project from November 17, 2017 to December 31, 2021.
As of December 31, 2021, the Company’s advance receipts for the authorization of a third party to integrate and dispose of a project under development amounted to NT$20,000,000, recognized in other current liabilities.
The Company signed a contract with other related parties to assist with the sale of the Puyuan project from January 15, 2021.
The Company leased a parcel of land in Miaoli to a non-related party on November 25, 2021 to install a solar power system. As per the contract, the Company will charge a special business commission fee of NT$36,000,000 when the project is completed and will charge a monthly rent at the agreed rate. Said land has been reclassified from property, plant and equipment to investment property. See Note 6(8).
X. Major Disaster Loss: None.
XI. Material Events After the Balance Sheet Date: None.

～ 45 ～

Notes to Parent Company Only Financial Statements of Better Life Group Co., Ltd. (Continued)

XII. Others

The statement of employee benefits, depreciation, depletion, and amortization expenses of the year by function is as follows:

By function By nature	2021	2021	2021	2020	2020	2020
	Operating costs	Operating expenses	Total	Operating costs	Operating expenses	Total
Employee benefit expenses Salary and wages Labor and health insurance Pension Directors’ remuneration Other employee benefit expenses Depreciation expense Depletion expense Amortization expense	- - - - - - - -	18,764 1,358 698 3,960 634 3,610 - 179	18,764 1,358 698 3,960 634 3,610 - 179	- - - - - - - -	20,517 1,407 780 3,695 608 5,167 - 135	20,517 1,407 780 3,695 608 5,167 - 135

Additional information on the Company’s number of employees and employee benefit expenses for 2021 and 2020 is as follows:

2021	2021	2020
25		24
7		7
$ 1,192		1,371
$ 1,042		1,207
(13.67)% $ -	(13.67)%	(0.41)% 230

The Company's remuneration policy (including directors, supervisors, managers, and employees) information is as follows:

(I) The Company's remuneration policy for directors and supervisors is that when directors and supervisors perform their duties at the Company, the Company may pay them remuneration when either making a profit or suffering a loss. Please refer to Note 6(19) for the rules of the remuneration to directors and supervisors.
(II) The employees’ salary and remuneration is determined based on their regular performance evaluation results, which serve as the basis for the amounts of their salaries, bonuses, and annual salary adjustments or promotions. Please refer to Note 6(19) for the rules of the remuneration to employees.

～ 46 ～

Notes to Parent Company Only Financial Statements of Better Life Group Co., Ltd. (Continued)

XIII. Additional Disclosures

(I) Information on significant transactions
In 2021, the relevant information on significant transactions that the Company shall disclose in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers is as follows:
Loans to others: None.
Endorsements/Guarantees provided to others:

Unit: In Thousand New Taiwan Dollars

Code	Endorser / Guarantor	Endorsed / Gu party	aranteed	Maximum endorsement / guarantee amount to a single enterprise	Maximum endorsement / guarantee balance for the current period	Endorsement/ Guarantee balance at the end of the period	Amount drawn	Dndorsement / Guarantee amount with assets pledged	Ratio of cumulative endorsement / guarantee to net worth as in the latest financial statements	Maximum endorsement / guarantee amount	Endorsement / guarantee form parent to subsidiary	Endorsement / guarantee form subsidiary to parent	Endorsement / guarantee to entity in mainland China
		Company name	Relations
0	The Company	Yunpeng Construction Co., Ltd.	5	596,326	388,800	388,800	203,094	-	65.20%	1,196,652	N	N	N
0	The Company	Tianyi Construction Co., Ltd.	5	596,326	453,600	453,600	236,943	-	76.07%	1,196,652	N	N	N

Note 1: The Company is coded “0”.

Note 2: There are 7 types of relations between the endorser/guarantor and the endorsed/guaranteed party as follows; just indicate the type:
(1) Companies with business dealings.
(2) A company in which the Company directly or indirectly holds more than 50% of the voting shares.
(3) A company directly or indirectly holds more than 50% of the voting shares of the Company.
(4) A company in which the Company directly or indirectly holds more than 90% of the voting shares.
(5) Companies that need to purchase insurance for each other in the same industry or as co-builders in accordance with contractual provisions based on the needs for contracting construction projects.
(6) A company that is endorsed and guaranteed by all shareholders of the Company based on their ownership percentage due to a joint investment relationship.
(7) The companies that are engaged in joint and several guarantees for the performance of a pre-sale property contract in accordance with the Consumer Protection Act.
Note 3: The maximum amount of all endorsements/guarantees shall not exceed 40% of the net worth as in the most recent financial statements; the maximum amount of the endorsement/guarantee to a single enterprise shall not exceed 10% of the net worth as in the most recent financial statements except for subsidiaries that directly hold more than 90% of the Company’s ordinary shares, to which the maximum amount of the endorsement/guarantee shall not exceed 20% of the net worth of the net worth as in the most recent financial statements. The net worth in the most recent financial statements audited or reviewed by the CPAs shall prevail.
Note 4: For joint investment in construction or joint construction, the Company and co-builders should provide endorsements and guarantees to each other as per contracts; mutual endorsements and guarantees are required for contracting of construction projects as per contracts; however, for a joint-and-several guarantor engaging in the performance of a pre-sale housing project contract with a partner as per the Consumer Protection Act, when the total amount of endorsement/guarantee may not exceed 200% of the net worth in the current period and the total amount of endorsement/guarantee to a single enterprise may not exceed 100% of the net worth in the current period, the restrictions in the preceding paragraph does not apply.

～ 47 ～

Notes to Parent Company Only Financial Statements of Better Life Group Co., Ltd. (Continued)

Securities held at the end of the period (excluding investment in subsidiaries, associates, and joint ventures):

Unit: In Thousand New Taiwan Dollars

Holding company	Type and name of securities	Relations with holding company	Account	End of period	End of period	End of period	End of period	Remarks
				Number of shares	Carrying amount	Shareholding	Fair value
The Company The Company The Company The Company The Company The Company	Stock - Technology Associates Corporation Stock - Tech Alliance Corp. Stock - Nexcell Battery Co., Ltd. Stock - Nexcell Battery Co., Ltd. Stock - World Join International Ltd. Stock -Shin Kong Real Estate Management Co., Ltd.	- - - - - -	Financial assets at fair value through other comprehensive income - non- current `〃` `〃` `〃` Financial assets at fair value through other comprehensive income - non- current `〃`	482,505 100,000 200,000 15 547,103 500,000	3,667 274 - - 12,113 1,890	4.95 % 2.50 % 0.20 % - % 7.50 % 1.67 %	3,667 274 - - 12,113 1,890

Securities acquired or sold amounting to at least NT$300 million or 20% of the paid-in capital: None.
Acquisition of real estate amounting to at least NT$300 million or 20% of the paid-in capital: None.
Disposal of real estate amounting to at least NT$300 million or 20% of the paid-in capital: None.
Total purchases from or sales to related parties amounting to at least NT$100 million or 20% of the paid-in capital: None.
Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital: None.
Trading in derivative instruments: None.
(II) Information on investees:

Information on the Company’s investees in 2021 is as follows (excluding the investees in mainland China):

Unit: In Thousand New Taiwan Dollars

Investor	Investee	Region	Principal business	Initial investment amount	Initial investment amount	Holdings at the end of period	Holdings at the end of period	Holdings at the end of period	Profit or loss on investee for the current period	Profit or loss recognized for the current period	Remarks
				End of the current period	Last year	Number of shares	Percentage	Carrying amount
The Company The Company The Company	Better Life Green Energy Technology Co., Ltd. Better Life Real Estate Co., Ltd. Better Life Group Travel Service Co., Ltd.	Taiwan Taiwan Taiwan	Trade Marketing agency for the sale of real estate Travel agency	91,000 110,000 9,000	91,000 110,000 9,000	9,100,000 11,000,000 -	100.00% 100.00% 100.00%	9,537 33,333 1,740	(17) 16,741 (1,337)	(17) 15,372 (1,337)	Subsidiaries Subsidiaries Subsidiaries

～ 48 ～

Notes to Parent Company Only Financial Statements of Better Life Group Co., Ltd. (Continued)

(III) Information on investments in mainland China
The name of the investee in mainland China, principal business, and other relevant information:

Unit: In Thousand New Taiwan Dollars

Investee	Principal business	Paid-in capital	Investm ent method	Cumulative investment remitted from Taiwan at the beginning of period	Cumulative amount of investment remitted or recovered in current period	Cumulative amount of investment remitted or recovered in current period	Cumulative outward remittance from Taiwan at the end of current period	Profit or loss on investee for the current period	Shareholding in direct or indirect investment	Profit or loss recognized for the current period	Carrying amount of investment at the end of period	Cumulative repatriatio n of investment income at the end of current period
					Outward remitted	Repatria ted
Better Life Jinxia (Xiamen) Tourism Management Service Co., Ltd.	Metal (non-metal) product wholesale and tourism management services	29,064 (USD1,050)	(Note 1)	29,064 (Note 2) (USD1,050)	-	-	29,064 (Note 2) (USD1,050)	(1,864) (RMB427)	100.00%	(1,864) (Note 3) (RMB427)	9,076 (RMB2,089)	-

Note 1: The investment method used is direct investment in Mainland China.

Note 2: It is translated with the investment amount in subsidiary in the original currency multiplied by the exchange rate at the end of the period.

Note 3: The basis for recognition of investment income and losses is the financial statements audited by CPAs appointed by the parent company in Taiwan.

Maximum investment amount in mainland China:

Company name	Cumulative outward remittance for investment in mainland China at the end of current period	Investment amount authorized by Investment Commission, MOEA	Maximum investment amount stipulated by Investment Commission, MOEA
The Company	29,064 (USD1,050)	248,428 (USD8,975)	357,796 (Note 4)

Note 4: Maximum amount: Net worth of equity for current period × 60% = NT$596,326,000 × 60% = NT$357,796,000.
Significant transactions with investees in mainland China: None.
(IV) Information on major shareholders:

Unit: Shares

Shares Name of major shareholder	Number of shares held	Shareholding
Puquan Advertising Co., Ltd.	9,067,200	9.04%
Sant Law International Corporation	8,626,910	8.60%
Tsai, Hung-Chien	8,458,744	8.43%
Liao, Heng-I	6,496,000	6.47%

XIV. Information on Operating Segments

Please refer to the 2021 consolidated financial statements for information on subsidiaries.

～ 49 ～

Better Life Group Co., Ltd.

Statement of Cash and Cash Equivalents

As of December 31, 2021

Unit: In Thousand New Taiwan Dollars

Item	Summary	Amount
Cash on hand Demand deposit Checking deposit		$ 142 34,321 18 $ 34,481

Statement of Inventories

Item Summary	Amount	Net realizable value	Remarks (pledge)
Buildings and land held for sale Qingpu Section, Taoyuan Buildings and land held for sale Xiugang Section, Xindian Construction in progress Xinyi Subsection 3 Construction in progress Meiren Section, Songshan District Total	$ 34,997 587,623 81,524 132,372 $ 836,516	36,797 613,752 215,015 158,880	Short-term notes payable Bank borrowings Bank borrowings Bank borrowings
		1,024,444

～ 50 ～

Better Life Group Co., Ltd.

Statement of Construction Deposits Paid

As of December 31, 2021

Unit: In Thousand New Taiwan Dollars

Please refer to Note 9(1) for relevant information.

Statement of Movement in Investment Property

For the Years Ended December 31, 2021 and 2020

Please refer to Note 6(8) for relevant information.

～ 51 ～

Better Life Group Co., Ltd.

Statement of Movement in Investment Under Equity Method For the Years Ended December 31, 2021 and 2020

Unit: In Thousand New Taiwan Dollars

				Increase in current	Increase in current	Decrease in current	Decrease in current				Market price or net	Market price or net
	Opening	balance			period		period	Ending balance			worth of	equity
	Number of			Number	of	Number	of	Number of					Collateral
Name	shares		Amount	shares	Amount	shares	Amount	shares	Shareholding	Amount	Unitprice	Totalprice	or pledge	Remarks
Investment using the
equity method:
Better Life Green Energy	9,100,000	$	9,554	-	-	-	(17)	9,100,000	100.00%	9,537	1.05	9,537	None
Technology Co., Ltd.
Better Life Real Estate	11,000,000		17,961	-	15,372	-	-	11,000,000	100.00%	33,333	3.03	33,333	None
Co., Ltd.
Better Life Group Travel	-		3,077	-	-	-	(1,337)	-	100.00%	1,740	-	1,740	None
Service Co., Ltd.
Better Life Jinxia	-		11,016	-	-	-	(1,940)	-	100.00%	9,076	-	9,076	None
(Xiamen) Tourism
Management Service Co.,
Ltd.
		$	41,608		15,372		(3,294)			53,686		53,686

The details of the increase and decrease of long-term equity investment using the equity method in the current period are as follows:

Investee	Income (loss) on investment recognized under the equity method	Exchange difference on translation of financial statements of foreign operations	Total (17) 15,372 (1,337) (1,940) 12,078
Better Life Green Energy Technology Co., Ltd. Better Life Real Estate Co., Ltd. Better Life Group Travel Service Co., Ltd. Better Life Jinxia (Xiamen) Tourism Management Service Co., Ltd.	$ (17) 15,372 (1,337) (1,864) $ 12,154	- - - (76)
		(76)

～ 52 ～

Better Life Group Co., Ltd.

Statement of Short-Term Borrowings

As of December 31, 2021

Unit: In Thousand New Taiwan Dollars

Type of Ending Interest rate Financing Remar borrowings Lender balance Contract period range facility Mortgage or collateral ks Secured bank Financial $ 225,600 2020.09.01~2024.09.0 1.85%~1.9% 410,260 Construction in progress borrowings institution A 1 and buildings and land held for sale 〃 Financial 197,453 107.09.18~112.08.09 1.91%~2.01% 378,000 Construction in progress institution B Unsecured Financial - 2021.05.29~111.05.28 2.09% 50,000 borrowings institution C Total $ 423,053 838,260

Statement of Corporate Bonds Payable

Please refer to Note 6(12) for relevant information.

～ 53 ～

Better Life Group Co., Ltd.

Statement of Operating Income

For the Years Ended December 31, 2021

and 2020

Unit: In Thousand New Taiwan Dollars

Please refer to Note 6(18) for relevant information.

Statement of Operating Costs

Please refer to Note 6(14) for relevant information.

～ 54 ～

Better Life Group Co., Ltd.

Statement of General and Administrative Expenses

For the Years Ended December 31, 2021 and 2020

Unit: In Thousand New Taiwan Dollars

Item	Selling expenses	Administrative and general expenses	Remarks
Salary and wages (including directors' remuneration and pensions) Commission expense Advertisement Service expense Other expenses Total	$ 96 4,091 9,352 69 2,504	23,326 - 22 4,608 9,019	Note
	$ 16,112	36,975

Note: Those who did not reach 10% or more of the amount

Statement of Non-Operating Income and Expenses

Please refer to Note 6(20) for relevant information.

～ 55 ～

AI assistant

BLG — Audit Report / Information 2021

51925_rns_2021-11-11_14d2a9e5-3ea1-42f8-99e3-0b9eacdcfcee.pdf

Better Life Group Co., Ltd.

Table of Contents

Independent Auditors’ Report

Audit opinion

Basis for the audit opinion

Key audit matters

Responsibility of management and those charged with governance for parent company only financial statements

Auditors’ responsibilities for the audit of the parent company only financial statements

Notes to Readers

(English Translation of Balance Sheets Originally Issued in Chinese) Better Life Group Co., Ltd.

Balance Sheets

For the Year Ended December 31, 2021 and 2020

Unit: In Thousand New Taiwan Dollars

(English Translation of Balance Sheets Originally Issued in Chinese) Better Life Group Co., Ltd.

Balance Sheets (Continued)

For the Year Ended December 31, 2021 and 2020

Unit: In Thousand New Taiwan Dollars

(English Translation of Statements of Comprehensive Income Originally Issued in Chinese)

Better Life Group Co., Ltd.

Statements of Comprehensive Income

For the Years Ended December 31, 2021 and 2020

Unit: NTD thousands

(English Translation of Statements of Changes in Equity Originally Issued in Chinese) Better Life Group Co., Ltd.

Statements of Changes in Equity

For the Years Ended December 31, 2021 and 2020

Unit: In Thousand New Taiwan Dollars

(English Translation of Statements of Cash Flows Originally Issued in Chinese)

Better Life Group Co., Ltd.

Statements of Cash Flows

For the Years Ended December 31, 2021 and 2020

Unit: NTD thousands

(English Translation of Statements of Cash Flows Originally Issued in Chinese)

Better Life Group Co., Ltd.

Statements of Cash Flows (Continued)

For the Years Ended December 31, 2021 and 2020

Unit: NTD thousands

Better Life Group Co., Ltd. Notes to parent company only Financial Statements For the Years Ended December 31, 2021 and 2020 (NTD thousands unless otherwise specified)

II. The Authorization of Financial Statements

IV. Summary of Significant Accounting Policies

Notes to Parent Company Only Financial Statements of Better Life Group Co., Ltd. (Continued)

Notes to Parent Company Only Financial Statements of Better Life Group Co., Ltd. (Continued)

Notes to Parent Company Only Financial Statements of Better Life Group Co., Ltd. (Continued)

(3) Financial liabilities

Notes to Parent Company Only Financial Statements of Better Life Group Co., Ltd. (Continued)

Notes to Parent Company Only Financial Statements of Better Life Group Co., Ltd. (Continued)

Notes to Parent Company Only Financial Statements of Better Life Group Co., Ltd. (Continued)

Notes to Parent Company Only Financial Statements of Better Life Group Co., Ltd. (Continued)

Notes to Parent Company Only Financial Statements of Better Life Group Co., Ltd. (Continued)

Notes to Parent Company Only Financial Statements of Better Life Group Co., Ltd. (Continued)

VI. Summary of Significant Accounting Items

Notes to Parent Company Only Financial Statements of Better Life Group Co., Ltd. (Continued)

Notes to Parent Company Only Financial Statements of Better Life Group Co., Ltd. (Continued)

(V) Prepayments

(VI)Investment using the equity method

(VII) Property, plant and equipment

Notes to Parent Company Only Financial Statements of Better Life Group Co., Ltd. (Continued)

Please refer to Note 8 for details of the Company's investment property pledged as collateral. (IX) Right-of-use assets

Notes to Parent Company Only Financial Statements of Better Life Group Co., Ltd. (Continued)

(XIII) Lease liabilities

Notes to Parent Company Only Financial Statements of Better Life Group Co., Ltd. (Continued)

3. Retained earnings

(2) Earnings distribution

(XVII) Loss per share

Notes to Parent Company Only Financial Statements of Better Life Group Co., Ltd. (Continued)

(2) Weighted average number of outstanding ordinary shares

2. Diluted loss per share

(2) Weighted average number of outstanding ordinary shares (diluted)

Notes to Parent Company Only Financial Statements of Better Life Group Co., Ltd. (Continued)

(XIX) Remuneration to employees, directors, and supervisors

(XX) Non-operating income and expenses

Notes to Parent Company Only Financial Statements of Better Life Group Co., Ltd. (Continued)

2. Other income

3. Other gains and losses

4. Financial costs

(XXI) Financial instruments

1. Credit risk

(1) Maximum exposure to credit risk

BLG Audit Report / Information 2021