EXCELSIOR — Annual Report 2021

Nov 8, 2021

Stock Code:4104

EXCELSIOR MEDICAL CO., LTD. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

With Independent Auditors’ Report For the Years Ended December 31, 2021 and 2020

Address: 17F., No.880, Zhongzheng Rd., Zhonghe Dist., New Taipei City 235, Taiwan, R.O.C.

Telephone: (02)22251888

The independent auditors’ report and the accompanying consolidated 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’ report and consolidated financial statements, the Chinese version shall prevail.

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Table of contents

Contents 1. Cover Page 2. Table of Contents 3. Representation Letter 4. Independent Auditors’ Report 5. Consolidated Balance Sheets 6. Consolidated Statements of Comprehensive Income 7. Consolidated Statements of Changes in Equity 8. Consolidated Statements of Cash Flows 9. Notes to the Consolidated Financial Statements (1)Company History (2)Financial Statements Authorization Date and Authorization Process (3)New Standards, Amendments and Interpretations Adopted (4)Summary of Significant Accounting Policies (5)Significant Accounting Assumptions and Judgments, and Major Sources of Estimation Uncertainty (6)Explanation of Significant Accounts (7)Related Party Transactions (8)Pledged Assets (9)Significant Commitments and Contingencies (10)Losses due to major disasters (11)Subsequent events (12)Other (13)Other disclosures i) Information on significant transactions ii) Information on investees iii)Information on investment in mainland China iv) Major shareholders (14)Segment Information

Page

1 2 3 4 5 6 7 8 9 9 9～10 10～26 26～27 27～68 68～73 73 73～74 74 74 74 75～78 79～80 81～82 82 82～85

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Representation Letter

The entities that are required to be included in the combined financial statements of Excelsior Medical Co., Ltd. as of and for the year ended December 31, 2021 under the Criteria Governing the Preparation of Affiliation Reports, Consolidated Business Reports, and Consolidated Financial Statements of Affiliated Enterprises are the same as those included in the consolidated financial statements prepared in conformity with International Financial Reporting Standards No. 10, "Consolidated Financial Statements."endorsed by the Financial Supervisory Commission in addition, the information required to be disclosed in the combined financial statements is included in the consolidated financial statements. Consequently, Excelsior Medical Co., Ltd. and Subsidiaries do not prepare a separate set of combined financial statements.

Company name: Excelsior Medical Co., Ltd. Chairman: Fu Hui-Tung Date: March 11, 2022

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KPMG

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Independent Auditors’ Report

To the Board of Directors of Excelsior Medical Co., Ltd.:

Opinion

We have audited the consolidated financial statements of Excelsior Medical Co., Ltd. and its subsidiaries (“the Group”), which comprise the consolidated statement of financial position as of December 31, 2021 and 2020, the consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, based on our audits and the reports of other auditors (please refer to Other Matter paragraph), the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at December 31, 2021 and 2020, and its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and with the International Financial Reporting Standards (“ IFRSs” ), International Accounting Standards (“ IASs” ), Interpretations developed by the International Financial Reporting Interpretations Committee (“ IFRIC” ) or the former Standing Interpretations Committee (“SIC”) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Certification of Financial Statements by Certified Public Accountants and the auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the Certified Public Accountants Code of Professional Ethics in Republic of China (“ the Code”), and we have fulfilled our other ethical responsibilities in accordance with the Code. Based on our audits and the reports of other auditors, we believe that the audit evidence we have obtained, is sufficient and appropriate to provide a basis of our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Based on our judgment, the key audit matter that should be disclosed in this report is as follows:

1. Impairment Assessment on Receivables

Please refer to Note (4)(g) for accounting policies of account receivable allowance provision.

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KPMG, a Taiwan partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee.

Description of key audit matter:

The management of the Group performed its assessment based on the default risk of accounts receivable and the rate of expected loss. Because the assessment of impairment loss of receivables involves critical accounting estimates, which are subject to the judgment of the management, the assessment of the impairment loss of receivables is deemed to be a key audit matter.

How the matter was addressed in our audit:

Our main audit procedures in response to the assessment of the impairment of receivables were assessing the reasonableness of the methodology and assumptions used by the management for the impairment assessment of receivables and whether the methodology was adopted consistently, testing the reasonableness of the information used by the management for assessing the impairment of receivables, reviewing the accuracy of the calculation of the allowance for receivables, and evaluating the adequacy of the Group’s disclosure for impairment of receivables.

Other Matter

We did not audit the financial statements of certain subsidiaries included in the consolidated financial statements of the Group. Those statements were audited by other auditors, whose reports have been furnished to us, and our opinion, insofar as it relates to the amounts included for such subsidiaries, is based solely on the report of other auditors. As of December 31, 2021 and 2020, the total assets of these subsidiaries were NT$446,627 thousand and NT$442,964 thousand, constituting 3% and 3% of consolidated total assets, respectively. The total operating revenues of these subsidiaries for the year ended December 31, 2021 and 2020 were NT$253,352 thousand and NT$252,013 thousand, constituting 4% and 4% of consolidated total operating revenues, respectively. We also did not audit the financial statements of certain associates and joint ventures, which represented investment in other entities accounted for using the equity method of the Group. Those statements were audited by other auditors, whose reports have been furnished to us, and our opinion, insofar as it relates to the amounts included for such entities, is based solely on the reports of other auditors. As of December 31, 2021 and 2020, the carrying amounts of these investments were NT$550,602 thousand and NT$546,435 thousand, constituting 4% and 4% of consolidated total assets, respectively. The share of comprehensive income of associates and joint ventures accounted for using the equity method for the years ended December 31, 2021 and 2020, amounted to NT$100,402 thousand and NT$107,286 thousand, were constituting 15% and 17% of consolidated total comprehensive income, respectively.

Excelsior Medical Co., Ltd. has prepared its parent-company-only financial statements as of and for the years ended December 31, 2021 and 2020, on which we have issued an unmodified opinion with an Other Matter paragraph.

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and with the IFRSs, IASs, IFRC, SIC endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

Those charged with governance (including the Audit Committee) are responsible for overseeing the Group’s financial reporting process.

〜 4-1 〜

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s 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 in the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with auditing standards generally accepted in the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

1. Identify and assess the risks of material misstatement of the consolidated financial statements, whether 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. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

2. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.

3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

4. 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 the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern.

5. Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

6. Obtain sufficient and appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

〜 4-2 〜

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audit resulting in this independent auditors’ report are Tsao-Jen Wu and WanWan Lin.

KPMG

Taipei, Taiwan (Republic of China) March 11, 2022

Notes to Readers

The accompanying consolidated financial statements are intended only to present the consolidated statement of 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 consolidated financial statements are those generally accepted and applied in the Republic of China.

The independent auditors’ report and the accompanying consolidated 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’ report and consolidated financial statements, the Chinese version shall prevail.

〜 4-3 〜

(ENGLISH TRANSLATION OF CONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUDED IN CHINESE)

EXCELSIOR MEDICAL CO., LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

ASSETS Current assets: 1100 Cash and cash equivalents (Note (6)(a)) 1110 Current financial assets at fair value through profit or loss (Note (6)(b)) 1136 Current financial assets at amortized cost (Note (6)(d)) 1151 Notes receivable (Notes (6)(e), (7) and (8)) 1152 Other notes receivable (Notes (6)(e), (7) and (8)) 1170 Accounts receivable (Notes (6)(e) and (7)) 1200 Other receivables (Notes (6)(e) and (7)) 130X Inventories (Note (6)(f)) 1476 Other current financial assets (Note (8)) 1479 Other current assets, others Non-current assets: 1517 Non-current financial assets at fair value through other comprehensive income (Note (6)(c)) 1550 Investments accounted for using equity method (Note (6)(g)) 1600 Property, plant and equipment (Notes (6)(j) and (8)) 1755 Right-of-use assets (Note (6)(k)) 1760 Investment property, net (Notes (6)(l) and (8)) 1780 Intangible assets (Note (6)(m)) 1840 Deferred tax assets (Note (6)(v)) 1930 Long-term notes and accounts receivable (Note (6)(e)) 1975 Net defined benefit asset (Note (6)(u)) 1980 Other non-current financial assets (Note (8)) 1990 Other non-current assets, others TOTAL ASSETS	December 31, 2021 Amount % $ 3,072,264 20 - - 682,603 5 256,809 2 290,515 2 1,361,094 9 2,566,629 17 910,243 6 16,793 - 150,593 1 9,307,543 62 701,541 5 2,629,538 17 636,488 4 277,673 2 1,019,102 7 33,004 - 202,413 1 17,269 - 12,021 - 227,114 2 41,294 - 5,797,457 38 $ 15,105,000 100	December 31, 2020 Amount % 2,618,464 19 166 - 774,526 6 220,226 2 184,942 1 1,225,050 9 2,309,331 16 851,236 6 161,639 1 156,220 1 8,501,800 61 735,437 5 2,492,993 18 534,339 4 299,972 2 1,005,090 7 32,653 - 215,485 2 12,196 - 8,614 - 144,159 1 21,894 - 5,502,832 39 14,004,632 100 LIABILITIES AND EQUITY Current liabilities: 2100 Short-term borrowings (Note (6)(n)) 2120 Current financial liabilities at fair value through profit or loss (Note (6)(b)) 2130 Current contract liabilities 2150 Notes payable 2170 Accounts payable (Note (7)) 2200 Other payables (Notes (6)(o) and (7)) 2230 Current tax liabilities 2280 Current lease liabilities (Note (6)(s) and (7)) 2322 Long-term borrowings, current portion (Note (6)(r)) 2399 Other current liabilities, others (Notes (6)(p), (q) and (7)) Non-Current liabilities: 2570 Deferred tax liabilities (Note (6)(v)) 2580 Non-current lease liabilities (Notes (6)(s) and (7)) 2640 Net defined benefit liability (Note (6)(u)) 2670 Other non-current liabilities, others (Note (6)(q)) Total liabilities Equity attributable to owners of parent (Note (6)(w)): 3100 Share capital 3200 Capital surplus 3300 Retained earnings 3400 Other equity Total equity attributable to owners of parent 36XX Non-controlling interests (Notes (6)(i) and (w)) Total equity TOTAL LIABILITIES AND EQUITY	December 31, 2021	December 31, 2020 Amount % 404,498 3 46 - 311,978 2 398 - 881,868 6 2,001,349 14 63,892 - 78,369 1 4,251 - 273,283 2 4,019,932 28 156,960 1 225,457 2 17,248 - 5,331 - 404,996 3 4,424,928 31 1,411,490 10 3,276,107 24 3,017,380 22 (114,080) (1) 7,590,897 55 1,988,807 14 9,579,704 69 14,004,632 100
			Amount %
			$ 479,966 3 673 - 379,224 3 398 - 947,132 6 2,721,225 18 63,875 - 72,244 1 - - 290,292 2 4,955,029 33 176,695 1 209,782 2 12,474 - 5,308 - 404,259 3 5,359,288 36 1,411,490 9 3,276,107 22 3,192,892 21 (142,100) (1) 7,738,389 51 2,007,323 13 9,745,712 64 $ 15,105,000 100

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(ENGLISH TRANSLATION OF CONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN CHINESE) EXCELSIOR MEDICAL CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT EARNINGS PER SHARE)

4000 Operating revenue (Notes (6)(y) and (7)) 5000 Operating costs (Notes (6)(f) and (7)) Gross profit from operations 5910 Less: Unrealized profit from sales 5920 Add: Realized profit from sales Operating expenses: 6100 Selling expenses (Note (7)) 6200 Administrative expenses (Note (7)) 6450 Expected credit loss (Note (6)(e)) Net operating income Non-operating income and expenses: 7100 Interest income (Note (6)(aa)) 7010 Other income (Notes (6)(aa) and (7)) 7020 Other gains and losses (Notes (6)(aa) and (7)) 7050 Finance costs (Notes (6)(aa) and (7)) 7060 Share of profit of associates and joint ventures accounted for using equity method (Note (6)(g)) 7900 Profit before tax 7950 Less: Tax expense (Note (6)(v)) Profit Other comprehensive income (loss): 8310 Items that may not be reclassified subsequently to profit or loss: 8311 Gains (losses) on remeasurements of defined benefit plans 8316 Unrealized gains (losses) from investments in equity instruments measured at fair value through other comprehensive income 8320 Share of other comprehensive income of associates and joint ventures accounted for using equity method, components of other comprehensive income that will not be reclassified to profit or loss 8349 Less: Income tax related to components of other comprehensive income that will not be reclassified to profit or loss Total items that will not be reclassified subsequently to profit and loss 8360 Items that will be reclassified to profit or loss 8361 Exchange differences on translation 8370 Share of other comprehensive income of associates and joint ventures accounted for using equity method, components of other comprehensive income that will be reclassified to profit or loss 8399 Less: Income tax related to components of other comprehensive income that will be reclassified to profit or loss Total items that will be reclassified subsequently to profit and loss Other comprehensive income, net 8500 Total comprehensive income Profit attributable to: 8610 Owners of parent 8620 Non-controlling interests Comprehensive income attributable to: 8710 Owners of parent 8720 Non-controlling interests Earnings per share (Note (6)(x)) 9750 Basic earnings per share (NT dollars) 9850 Diluted earnings per share (NT dollars)	For the Y	ears End	ed December 31,	% 100 80
	2021	% 100 79 21 2 2 21 8 4 - 12 9 - - - - 4 4 13 2 11 - - - - - (2) 1 - (1) (1) 10 9 2 11 9 1 10 4.30 4.28	2020 Amount 6,675,494 5,368,920 1,306,574 110,977 110,901 1,306,498 495,902 278,617 2,909 777,428 529,070 23,255 32,248 13,550 (10,768) 242,028 300,313 829,383 160,297 669,086 681 47,852 26,868 3,756 71,645 (171,023) 46,876 (24,206) (99,941) (28,296) 640,790 571,670 97,416 669,086 513,296 127,494 640,790
	Amount $ 6,573,152 5,199,126 1,374,026 121,722 120,315 1,372,619 509,139 261,402 7,052 777,593 595,026 10,692 24,940 18,406 (8,761) 233,433 278,710 873,736 151,447 722,289 5,401 6,516 22,735 (761) 35,413 (118,494) 31,647 (16,272) (70,575) (35,162) $ 687,127 $ 607,149 115,140 $ 722,289 $ 578,655 108,472 $ 687,127 $ $
				20 2 2
				20
				8 4 -
				12
				8
				- - - - 4
				4
				12 2 10 - 1 - - 1 (2) 1 - (1) - 10
				9 1
				10
				8 2
				10
				4.06
				4.04

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(ENGLISH TRANSLATION OF CONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN CHINESE) EXCELSIOR MEDICAL CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Balance as of January 1, 2020 Profit for the year Other comprehensive income (loss) for the year Total comprehensive income (loss) for the year Appropriation and distribution of retained earnings: Legal reserve appropriated Special reserve reversed Cash dividends of ordinary share Changes in equity of associates and joint ventures accounted for using equity method Capital increased by cash Changes in ownership interests in subsidiaries Changes in non-controlling interests Disposal of investments in equity instruments designated at fair value through other comprehensive income Balance as of December 31, 2020 Profit for the year Other comprehensive income (loss) for the year Total comprehensive income (loss) for the year Appropriation and distribution of retained earnings: Legal reserve appropriated Special reserve appropriated Cash dividends of ordinary share Changes in equity of associates and joint ventures accounted for using equity method Changes in ownership interests in subsidiaries Changes in non-controlling interests Disposal of investments in equity instruments designated at fair value through other comprehensive income Balance as of December 31, 2021				Equity attributable t	o owners of parent				Non-controlling interests 1,685,571	Total equity 8,631,912
	Share capital	Capital surplus 2,816,807		Retained earnings		Total other equity interest		Equity attributable to owners of parent 6,946,341
						Exchange differences on translation of foreign financial statements (107,903)	Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income 51,554
	Ordinary shares		Legal reserve 727,039	Special reserve 26,629	Unappropriated retained earnings 2,150,725
	$ 1,281,490 - - - - - - - 130,000 - - - 1,411,490 - - - - - - - - - - $ 1,411,490
		- -	- -	- -	571,670 (944)	- (91,466)	- 34,036	571,670 (58,374)	97,416 30,078	669,086 (28,296)
		-	-	-	570,726	(91,466)	34,036	513,296	127,494	640,790
		- - - 333 455,000 3,967 - -	51,476 - - - - - - -	- 29,720 - - - - - -	(51,476) (29,720) (465,792) 7,490 - 262 - 301	- - - - - - - -	- - - - - - - (301)	- - (465,792) 7,823 585,000 4,229 - -	- - - - - - 175,742 -	- - (465,792) 7,823 585,000 4,229 175,742 -
		3,276,107 - -	778,515 - -	56,349 - -	2,182,516 607,149 3,617	(199,369) - (61,073)	85,289 - 28,962	7,590,897 607,149 (28,494)	1,988,807 115,140 (6,668)	9,579,704 722,289 (35,162)
		-	-	-	610,766	(61,073)	28,962	578,655	108,472	687,127
		- - - - - - -	57,878 - - - - - -	- 57,731 - - - - -	(57,878) (57,731) (494,021) 62,440 418 - (4,091)	- - - - - - -	- - - - - - 4,091	- - (494,021) 62,440 418 - -	- - - - - (89,956) -	- - (494,021) 62,440 418 (89,956) -
		3,276,107	836,393	114,080	2,242,419	(260,442)	118,342	7,738,389	2,007,323	9,745,712

〜 7 〜

(ENGLISH TRANSLATION OF CONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN CHINESE) EXCELSIOR MEDICAL CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Cash flows from operating activities: Profit before tax Adjustments: Adjustments to reconcile profit (loss): Depreciation expense Amortization expense Expected credit loss Net loss (gain) on financial assets or liabilities at fair value through profit or loss Interest expense Interest income Dividend income Share-based payments Share of profit of associates and joint ventures accounted for using equity method (Gain) loss on disposal of property, plan and equipment Impairment loss on non-financial assets Unrealized profit from sales Realized profit from sales Others Total adjustments to reconcile profit Changes in operating assets and liabilities: Changes in operating assets: Notes receivable Accounts receivable Other receivables and notes Inventories Net defined benefit asset Other current assets Other operating assets Total changes in operating assets Changes in operating liabilities: Contract liabilities Notes payable Accounts payable Other payables Other current liabilities Net defined benefit liability Other operating liabilities Total changes in operating liabilities Total changes in operating assets and liabilities Total adjustments Cash inflow generated from operations Interest received Income taxes paid Net cash flows from operating activities

For the Years Ended December 31, 2021 2020 $ 873,736 829,383 198,633 162,691 4,321 4,776 7,052 2,909 6,640 200 8,761 10,768 (10,692) (23,255) (19,320) (23,231) - 4,152 (233,433) (242,028) (5) 100 - 4,282 121,722 110,977 (120,315) (110,901) (1,804) 71 (38,440) (98,489) (36,676) 47,359 (138,477) 65,028 (363,772) 196,476 (121,871) (36,471) (804) (866) 6,037 (68,221) (5,073) 6,182 (660,636) 209,487 67,246 (8,584) - (5,773) 65,264 (171,239) 719,867 191,162 17,009 (320) (1,976) (938) (2,884) (882) 864,526 3,426 203,890 212,913 165,450 114,424 1,039,186 943,807 8,917 23,111 (103,054) (97,485) 945,049 869,433

2021 $ 873,736 198,633 4,321 7,052 6,640 8,761 (10,692) (19,320) - (233,433) (5) - 121,722 (120,315) (1,804) (38,440) (36,676) (138,477) (363,772) (121,871) (804) 6,037 (5,073) (660,636) 67,246 - 65,264 719,867 17,009 (1,976) (2,884) 864,526 203,890 165,450 1,039,186 8,917 (103,054) 945,049

〜 8 〜

(ENGLISH TRANSLATION OF CONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN CHINESE) EXCELSIOR MEDICAL CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Cash flows from investing activities: Proceeds from disposal of financial assets at fair value through other comprehensive income Acquisition of financial assets at amortized cost Proceeds from disposal of financial assets at amortized cost Acquisition of financial assets at fair value through profit or loss Proceeds from disposal of financial assets at fair value through profit or loss Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Increase in refundable deposits Decrease in refundable deposits Acquisition of intangible assets Acquisition of investment properties Proceeds from disposal of investment property Increase in other financial assets Decrease in other financial assets Increase in other non-current assets Decrease in other non-current assets Dividends received Net cash flows (used in) investing activities Cash flows from financing activities: Increase in short-term borrowings Decrease in short-term borrowings Repayments of long-term borrowings Increase in guarantee deposits received Decrease in guarantee deposits received Payment of lease liabilities Cash dividends paid Capital increased by cash Interest paid Change in non-controlling interests Net cash flows used in financing activities Effect of exchange rate changes on cash and cash equivalents Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period

〜 8-1 〜

(ENGLISH TRANSLATION OF CONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUDED IN CHINESE) EXCELSIOR MEDICAL CO., LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, UNLESS OTHERWISE SPECIFIED)

(1) Company History

Excelsior Medical Co., Ltd. (the Company) was incorporated on March 15, 1988 as a company limited by shares and registered under the Ministry of Economic Affairs, R.O.C. The address of the Company's registered office is 17F., No.880, Zhongzheng Rd., Zhonghe Dist., New Taipei City 235, Taiwan, R.O.C.. The Company and its subsidiaries (the Group) engaged primarily in the sale of medical supplies and equipment, medicines and home medical devices.

The Company’s shares were traded on the Taipei Exchange (formerly the GreTai Securities Market) from June 8, 2001 to December 30, 2007 and have been traded on the Taiwan Stock Exchange since December 31, 2007.

(2) Financial Statements Authorization Date and Authorization Process

The consolidated financial statements were authorized for issuance by the Board of Directors on March 11, 2022.

(3) New Standards, Amendments and Interpretations Adopted:

• (a) The impact of the International Financial Reporting Standards (“IFRSs”) endorsed by the Financial Supervisory Commission, R.O.C. which have already been adopted.

The Group has initially adopted the following new amendments, which do not have a significant impact on its consolidated financial statements, from January 1, 2021:

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

• ●Amendments to IFRS 9, IAS39, IFRS7, IFRS 4 and IFRS 16 “Interest Rate Benchmark Reform— Phase 2”

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

• (b) The impact of IFRS issued by the FSC but not yet effective

The Group assesses that the adoption of the following new amendments, effective for annual period beginning on January 1, 2022, would not have a significant impact on its consolidated 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 IFRS Standards 2018–2020

• ●Amendments to IFRS 3 “Reference to the Conceptual Framework”

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(ENGLISH TRANSLATION OF CONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUDED IN CHINESE) EXCELSIOR MEDICAL CO., LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, UNLESS OTHERWISE SPECIFIED)

• (c) The impact of IFRS issued by IASB but not yet endorsed by the FSC

The Group does not expect the following new and amended standards, which have yet to be endorsed by the FSC, to have a significant impact on its consolidated financial statements:

• ●Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets Between an Investor and Its Associate or Joint Venture”

• ●IFRS 17 “ Insurance Contracts” and amendments to IFRS 17 “ Insurance Contracts”

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

• ●Amendments to IAS 1 “Disclosure of Accounting Policies”

• ●Amendments to IAS 8 “Definition of Accounting Estimates”

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

(4) Summary of Significant Accounting Policies

The significant accounting policies presented in the consolidated financial statements are summarized below. The following accounting policies were applied consistently throughout the periods presented in the consolidated financial statements.

• (a) Statement of compliance

These consolidated financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers (hereinafter referred to the Regulations) and International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations and SIC Interpretations endorsed and issued into effect by the Financial Supervisory Commission, R.O.C. (hereinafter referred to the IFRSs endorsed by FSC).

• (b) Basis of preparation

1. Basis of measurement

The consolidated financial statements have been prepared on historical cost basis except for the following material items in the balance sheet:

1) Financial assets at fair value through profit or loss are measured at fair value;

• 2) Financial assets at fair value through other comprehensive income are measured at fair value;

• 3) The defined benefit liabilities (or assets) are measured at fair value of plan assets, net of aggregation of the present value of the defined benefit obligation, with a limit based on a defined benefit asset.

• Functional and presentation currency

The functional currency of each Group entity is determined based on the primary economic environment in which the entity operates. The consolidated financial statements are presented in New Taiwan Dollars, which is the Company’ s functional currency. All financial information presented in New Taiwan Dollars has been rounded to the nearest thousand.

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(ENGLISH TRANSLATION OF CONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUDED IN CHINESE) EXCELSIOR MEDICAL CO., LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, UNLESS OTHERWISE SPECIFIED)

• (c) Basis of consolidation

• Principle of preparation of the consolidated financial statements

The consolidated financial statements comprise the Company and subsidiaries. Subsidiaries are entities controlled by the Group. The Group ‘controls’ an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.

The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until the date on which control ceases. Intragroup balances and transactions, and any unrealized income and expenses arising from Intragroup transactions are eliminated in preparing the consolidated financial statements. The Group attributes the profit or loss and each component of other comprehensive income to the owners of the parent and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance.

The Group prepares consolidated financial statements using uniform accounting policies for like transactions and other events in similar circumstances. Changes in the Group’s ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received will be recognized directly in equity, and the Group will attribute it to the owners of the parent.

2.List of subsidiaries in the consolidated financial statements：

Name of Investor	Name of Subsidiary	Principal Activity	Shareholding 2021.12.31 2020.12.31 Note % 38.50 % 38.50 Note 1 % 98.02 % 98.02 % 100.00 % 100.00 % 40.00 % 40.00 Note 1 % 100.00 % 100.00
			2021.12.31
The Company 〞 〞 〞 〞	Dynamic Medical Technologies Inc. (“Dynamic”) Bestsmile Co., Ltd. (“Bestsmile”) Excelsior Healthcare Co., Limited (Excelsior Healthcare) Arich Enterprise Co., Ltd. (Arich) Excelsior Asset Management Co., Ltd. (“Excelsior Asset”)	Sale, maintenance and lease of laser medical equipment for beauty treatment, and sale of consumables of beauty treatment and cosmetic products Sale of medical equipment, and medical management consultancy service Investment business Sale of medicines, and logistics service Sales of medical equipment, precision instrument and real estate	% 38.50 % 98.02 % 100.00 % 40.00 % 100.00

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(ENGLISH TRANSLATION OF CONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUDED IN CHINESE) EXCELSIOR MEDICAL CO., LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, UNLESS OTHERWISE SPECIFIED)

Name of Investor	Name of Subsidiary	Principal Activity	Shareholding 2021.12.31 2020.12.31 Note % 100.00 % 100.00 % 100.00 % 100.00 % 94.91 % 94.91 % 100.00 % 100.00 % 80.00 % 80.00 % 99.99 % 99.99 % 100.00 % 100.00 % 100.00 % 100.00 % 70.00 % 70.00 % 70.00 % 70.00 % 100.00 % 100.00
			2021.12.31
The Company and Excelsior Healthcare Dynamic The Company and Dynamic Hong Kong Dynamic Excelsior Beauty Excelsior Healthcare 〞 Hong Kong Excelsior Excelsior Investment (Malaysia) Co., Ltd. 〞 MEDI- CHEM SYSTEMS SDN. BHD.	Excelsior Medical (HK) Co., Limited (“Hong Kong Excelsior”) Dynamic Medical Technologies (Hong Kong) Ltd. (“Hong Kong Dynamic”) Excelsior Beauty Co., Ltd. (“Excelsior Beauty”) Guangzhou Dynamic Inc. (“Guangzhou Dynamic”) CYJ International Taiwan Inc. (CYJ Taiwan) EG Healthcare, Inc. Excelsior Investment (Malaysia) Co., Ltd. SinoExcelsior Investment Inc. ("SinoExcesior Investment") RENAL LABORATORIES SDN. BHD. MEDI-CHEM SYSTEMS SDN. BHD. RENAL MANAGEMENT SDN. BHD.	Investment business Retail and wholesale of medical equipment, cosmetic health-care products and medical herbs and academic training Sale of aesthetic medical and cosmetic health-care products Sale and maintenance of medical equipment Sales and treatment of hair protecting and conditioning Sale and lease of medical equipment, and medical management consultancy service Investment business Medical management consultancy service Manufacture of medical equipment Sale of medical equipment Lease business	% 100.00 % 100.00 % 94.91 % 100.00 % 80.00 % 99.99 % 100.00 % 100.00 % 70.00 % 70.00 % 100.00

Note 1: Although the Company holds less than 50% of the shares of Dynamic and Arich, these companies’ other equity shares are highly separated. Therefore, the Company still maintains control over Dynamic and Arich, and these companies are included in the consolidated financial statements.

1. Subsidiaries excluded from the consolidated financial statements: None.

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(ENGLISH TRANSLATION OF CONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUDED IN CHINESE) EXCELSIOR MEDICAL CO., LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, UNLESS OTHERWISE SPECIFIED)

• (d) Foreign Currencies

• 1.Foreign currency transactions

Transactions in foreign currencies are translated into the respective functional currencies of Group entities at the exchange rates at the dates of the transactions. At the end of each subsequent reporting period, monetary items denominated in foreign currencies are translated into the functional currencies using the exchange rate at that date. Non-monetary items denominated in foreign currencies that are measured at fair value are translated into the functional currencies using the exchange rate at the date that the fair value was determined. Non-monetary items denominated in foreign currencies that are measured based on historical cost are translated using the exchange rate at the date of the transaction.

Exchange differences are generally recognized in profit or loss, except for those differences relating to the following, which are recognized in other comprehensive income:

• 1) an investment in equity securities designated as at fair value through other comprehensive income;

• 2) a financial liability designated as a hedge of the net investment in a foreign operation to the extent that the hedge is effective; or

• 3) qualifying cash flow hedges to the extent that the hedges are effective.

• 2.Foreign operations

The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated into the presentation currency at the exchange rates at the reporting date. The income and expenses of foreign operations are translated into the presentation currency at the average exchange rate. Exchange differences are recognized in other comprehensive income.

When a foreign operation is disposed of such that control, significant influence, or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal. When the Group disposes of only part of its interest in a subsidiary that includes a foreign operation while retaining control, the relevant proportion of the cumulative amount is reattributed to non controlling interests. When the Group disposes of only part of its investment in an associate or joint venture that includes a foreign operation while retaining significant influence or joint control, the relevant proportion of the cumulative amount is reclassified to profit or loss.

When the settlement of a monetary receivable from or payable to a foreign operation is neither planned nor likely to occur in the foreseeable future, exchange differences arising from such a monetary item that are considered to form part of the net investment in the foreign operation are recognized in other comprehensive income.

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(ENGLISH TRANSLATION OF CONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUDED IN CHINESE) EXCELSIOR MEDICAL CO., LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, UNLESS OTHERWISE SPECIFIED)

• (e) Classification of Current and Non-Current Assets and Liabilities

An asset is classified as current under one of the following criteria, and all other assets are classified as non-current.

• 1.It is expected to be realized, or intended to be sold or consumed, in the normal operating cycle;

• 2.It is held primarily for the purpose of trading;

• 3.It is expected to be realized within twelve months after the reporting period; or

• 4.The asset is cash or a cash equivalent, unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

A liability is classified as current under one of the following criteria, and all other liabilities are classified as non-current.

• 1.It is expected to be settled in the normal operating cycle;

• 2.It is held primarily for the purpose of trading;

• 3.It is due to be settled within twelve months after the reporting period; or

• 4.The Group does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting period. Terms of a liability that could, at the option of the counterparty, result in its settlement by issuing equity instruments do not affect its classification.

• (f) Cash and Cash Equivalents

Cash comprises cash on hand and demand deposits. Cash equivalents are short term, highly liquid investments that are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value. Time deposits which meet the above definition and are held for the purpose of meeting short term cash commitments rather than for investment or other purposes should be recognized as cash equivalents.

Bank overdrafts that are repayable on demand and form an integral part of the Group’ s cash management are included as a component of cash and cash equivalents for the purpose of the consolidated statement of cash flows.

• (g) Financial instruments

Trade receivables and debt securities issued are initially recognized when they are originated. All other financial assets and financial liabilities are initially recognized when the Group becomes a party to the contractual provisions of the instrument. A financial asset (unless it is a trade receivable without a significant financing component) or financial liability is initially measured at fair value plus, for an item not at fair value through profit or loss (FVTPL), transaction costs that are directly attributable to its acquisition or issue. A trade receivable without a significant financing component is initially measured at the transaction price.

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(ENGLISH TRANSLATION OF CONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUDED IN CHINESE) EXCELSIOR MEDICAL CO., LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, UNLESS OTHERWISE SPECIFIED)

1.Financial assets

All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis.

On initial recognition, a financial asset is classified as measured at: amortized cost; Fair value through other comprehensive income (FVOCI) – equity investment; or FVTPL. Financial assets are not reclassified subsequent to their initial recognition unless the Group changes its business model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model.

• 1) Financial assets measured at amortized cost

A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as at FVTPL:

• ‧it is held within a business model whose objective is to hold assets to collect contractual cash flows; and

• ‧ its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

These assets are subsequently measured at amortized cost, which is the amount at which the financial asset is measured at initial recognition, plus/minus, the cumulative amortization using the effective interest method, adjusted for any loss allowance. Interest income, foreign exchange gains and losses, as well as impairment, are recognized in profit or loss. Any gain or loss on derecognition is recognized in profit or loss.

• 2) Fair value through other comprehensive income (FVOCI)

A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL:

• ‧it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and

• ‧ its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Some trade receivables are held within a business model whose objective is achieved by both collecting contractual cash flows and selling by the Group; therefore, those receivables are measured at FVOCI. However, they are included in the ‘trade receivables’ line item.

On initial recognition of an equity investment that is not held for trading, the Group may irrevocably elect to present subsequent changes in the investment’ s fair value in other comprehensive income. This election is made on an instrument-by-instrument basis.

Equity investments at FVOCI are subsequently measured at fair value. Dividends are recognized as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognized in other comprehensive income and are never reclassified to profit or loss.

Dividend income is recognized in profit or loss on the date on which the Group’ s right to receive payment is established.

〜 15 〜

(ENGLISH TRANSLATION OF CONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUDED IN CHINESE) EXCELSIOR MEDICAL CO., LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, UNLESS OTHERWISE SPECIFIED)

3) Fair value through profit or loss (FVTPL)

All financial assets not classified as amortized cost or FVOCI described as above are measured at FVTPL, including derivative financial assets. Trade receivables that the Group intends to sell immediately or in the near term are measured at FVTPL; however, they are included in the ‘ trade receivables’ line item. On initial recognition, the Group may irrevocably designate a financial asset, which meets the requirements to be measured at amortized cost or at FVOCI, as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognized in profit or loss.

• 4) Impairment of financial assets

The Group recognizes loss allowances for expected credit losses (ECL) on financial assets measured at amortized cost (including cash and cash equivalents, amortized costs, notes and trade receivables, other receivable, leases receivable, guarantee deposit paid and other financial assets).

The Group measures loss allowances at an amount equal to lifetime ECL, except for the following which are measured as 12-month ECL:

‧debt securities that are determined to have low credit risk at the reporting date; and

• ‧other debt securities and bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition.

Loss allowance for trade receivables are always measured at an amount equal to lifetime ECL.

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECL, the Group considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis based on the Group’s historical experience and informed credit assessment as well as forward-looking information.

Lifetime ECL are the ECL that result from all possible default events over the expected life of a financial instrument.

12-month ECL are the portion of ECL that result from default events that are possible within the 12 month after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months).

The maximum period considered when estimating ECL is the maximum contractual period over which the Group is exposed to credit risk.

ECL are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e the difference between the cash flows due to the Group in accordance with the contract and the cash flows that the Group expects to receive). ECL are discounted at the effective interest rate of the financial asset.

〜 16 〜

(ENGLISH TRANSLATION OF CONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUDED IN CHINESE) EXCELSIOR MEDICAL CO., LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, UNLESS OTHERWISE SPECIFIED)

At each reporting date, the Group assesses whether financial assets carried at amortized cost and debt securities at FVOCI are credit-impaired. A financial asset is ‘credit-impaired’ when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. Evidence that a financial assets is credit-impaired includes the following observable data:

• ‧significant financial difficulty of the borrower or issuer;

• ‧a breach of contract such as a default or being past due;

• ‧ the lender of the borrower, for economic or contractual reasons relating to the borrower’ s financial difficulty, having granted to the borrower a concession that the lender would not otherwise consider;

• ‧it is probable that the borrower will enter bankruptcy or other financial reorganization; or

‧the disappearance of an active market for a security because of financial difficulties.

Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the assets. For debt securities at FVOCI, the loss allowance is charge to profit or loss and is recognized in other comprehensive income instead of reducing the carrying amount of the asset.

The gross carrying amount of a financial asset is written off when the Group has no reasonable expectations of recovering a financial asset in its entirety or a portion thereof. For corporate customers, the Group individually makes an assessment with respect to the timing and amount of write-off based on whether there is a reasonable expectation of recovery. The Group expects no significant recovery from the amount written off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Group’ s procedures for recovery of amounts due.

• 5) Derecognition of financial assets

The Group derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Group neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.

The Group enters into transactions whereby it transfers assets recognized in its statement of balance sheet, but retains either all or substantially all of the risks and rewards of the transferred assets. In these cases, the transferred assets are not derecognized.

• 2.Financial liabilities and equity instruments

• 1) Classification of debt or equity

Debt and equity instruments issued by the Group are classified as financial liabilities or equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

〜 17 〜

(ENGLISH TRANSLATION OF CONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUDED IN CHINESE) EXCELSIOR MEDICAL CO., LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, UNLESS OTHERWISE SPECIFIED)

• 2) Equity instrument

An equity instrument is any contract that evidences residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued are recognized as the amount of consideration received, less the direct cost of issuing.

• 3) Financial liabilities

Financial liabilities are classified as measured at amortized cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held-for-trading, it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognized in profit or loss.

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

• 4) Derecognition of financial liabilities

The Group derecognizes a financial liability when its contractual obligations are discharged or cancelled, or expire. The Group also derecognizes a financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognized at fair value.

On derecognition of a financial liability, the difference between the carrying amount of a financial liability extinguished and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognized in profit or loss.

• 5) Offsetting of financial assets and liabilities

Financial assets and financial liabilities are offset and the net amount presented in the statement of balance sheet when, and only when, the Group currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realize the asset and settle the liability simultaneously.

3.Derivative financial instruments

The Group holds derivative financial instruments to hedge its foreign currency and interest rate exposures. Embedded derivatives are separated from the host contract and accounted for separately if the host contract is not a financial asset and certain criteria are met.

Derivatives are initially measured at fair value. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are generally recognized in profit or loss.

• (h) Inventories

Inventories are measured at the lower of cost and net realizable value. The cost of inventories is calculated using the weighted average method, and includes expenditure incurred in acquiring the inventories, production or conversion costs and other costs incurred in bringing them to their present location and condition.

Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.

〜 18 〜

(ENGLISH TRANSLATION OF CONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUDED IN CHINESE) EXCELSIOR MEDICAL CO., LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, UNLESS OTHERWISE SPECIFIED)

(i) Investment in Associates

Associates are those entities in which the Group has significant influence, but not control or joint control, over their financial and operating policies.

Investments in associates are accounted for using the equity method and are recognized initially at cost. The cost of the investment includes transaction costs. The carrying amount of the investment in associates includes goodwill arising from the acquisition less any accumulated impairment losses.

The consolidated financial statements include the Group’ s share of the profit or loss and other comprehensive income of those associates, after adjustments to align their accounting policies with those of the Group, from the date on which significant influence commences until the date on which significant influence ceases. The Group recognizes any changes of its proportionate share in the investee within capital surplus, when an associate’s equity changes due to reasons other than profit and loss or comprehensive income, which did not result in changes in actual proportionate share.

Gains and losses resulting from transactions between the Group and an associate are recognized only to the extent of unrelated Group’s interests in the associate.

When the Group’s share of losses of an associate equals or exceeds its interests in an associate, it discontinues recognizing its share of further losses. After the recognized interest is reduced to zero, additional losses are provided for, and a liability is recognized, only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate.

(j) Investment Property

Investment property is property held either to earn rental income or for capital appreciation or for both, but not for sale in the ordinary course of business, use in the production or supply of goods or services, or for administrative purposes. Investment property is measured at cost on initial recognition, and subsequently at cost, less accumulated depreciation and accumulated impairment losses. Depreciation expense is calculated based on the depreciation method, useful life, and residual value which are the same as those adopted for property, plant and equipment.

Any gain or loss on disposal of an investment property (calculated as the difference between the net proceeds from disposal and the carrying amount) is recognized in profit or loss.

Rental income from investment property is recognized as other revenue on a straight-line basis over the term of the lease. Lease incentives granted are recognized as an integral part of the total rental income, over the term of the lease.

• (k) Property, Plant, and Equipment

• 1.Recognition and measurement

Items of property, plant and equipment are measured at cost (including capitalization of borrowing cost) less accumulated depreciation and any accumulated impairment losses.

If significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

Any gain or loss on disposal of an item of property, plant and equipment is recognized in profit or loss.

〜 19 〜

(ENGLISH TRANSLATION OF CONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUDED IN CHINESE) EXCELSIOR MEDICAL CO., LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, UNLESS OTHERWISE SPECIFIED)

2.Subsequent expenditure

Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with the expenditure will flow to the Group.

3.Depreciation

Depreciation is calculated on 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 lives of each component of an item of property, plant and equipment.

Land is not depreciated.

The estimated useful lives of property, plant and equipment for current and comparative periods are as follows:

1)	Buildings	5 years~ 55 years
2)	Medical equipment	2 years~ 8 years
3)	Other equipment	2 years~ 10 years

Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

• (l) Leases

At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

(i) As a leasee

The Group recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be reliably determined, the Group’s incremental borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rate.

〜 20 〜

(ENGLISH TRANSLATION OF CONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUDED IN CHINESE) EXCELSIOR MEDICAL CO., LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, UNLESS OTHERWISE SPECIFIED)

Lease payments included in the measurement of the lease liability comprise the following:

• － fixed payments, including in-substance fixed payments;

• － variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;

The lease liability is measured at amortized cost using the effective interest method. It is remeasured when:

• － there is a change in future lease payments arising from the change in an index or rate; or

• － there is a change in the Group’s estimate of the amount expected to be payable under a residual value guarantee; or

• － there is a change in the lease term resulting from a change of its assessment on whether it will exercise an option to purchase the underlying asset, or

• － there is a change of its assessment on whether it will exercise a extension or termination option; or

• －

• there is any lease modifications

When the lease liability is remeasured, other than lease modifications, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or in profit and loss if the carrying amount of the right-of-use asset has been reduced to zero.

When the lease liability is remeasured to reflect the partial or full termination of the lease for lease modifications that decrease the scope of the lease, the Group accounts for the remeasurement of the lease liability by decreasing the carrying amount of the right-of-use asset to reflect the partial or full termination of the lease, and recognize in profit or loss any gain or loss relating to the partial or full termination of the lease.

The Group presents right-of-use assets that do not meet the definition of investment and lease liabilities as a separate line item respectively in the statement of financial position.

The Group has elected not to recognize right-of-use assets and lease liabilities for short-term leases of storage room, machinery and parking space that have a lease of low-value assets. The Group recognizes the lease payments associated with these leases as an expense on a straightline basis over the lease term.

• (ii) As a leasor

When the Group acts as a lessor, it determines at lease commencement whether each lease is a finance lease or an operating lease. To classify each lease, the Group makes an overall assessment of whether the lease transfers to the lessee substantially all of the risks and rewards of ownership incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then the lease is an operating lease. As part of this assessment, the Group considers certain indicators such as whether the lease is for the major part of the economic life of the asset.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, UNLESS OTHERWISE SPECIFIED)

When the Group is an intermediate lessor, it accounts for its interests in the head lease and the sub-lease separately. It assesses the lease classification of a sub-lease with reference to the right-of-use asset arising from the head lease. If a head lease is a short-term lease to which the Group applies the exemption described above, then it classifies the sub-lease as an operating lease.

If an arrangement contains lease and non-lease components, the Group applies IFRS15 to allocate the consideration in the contract.

The Group recognizes lease payments received under operating lease as income on a straightline basis over the lease term as part of ‘other income’.

• (m) Intangible Assets

• 1.Recognition and measurement

Goodwill arising on the acquisition of subsidiaries is measured at cost, less accumulated impairment losses.

Other intangible assets that are acquired by the Group and have finite useful lives are measured at cost less accumulated amortization and any accumulated impairment losses.

• 2.Subsequent expenditure

Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure, including expenditure on internally generated goodwill and brands, is recognized in profit or loss as incurred.

• 3.Amortization

Amortization is calculated over the cost of the asset, less its residual value, and is recognized in profit or loss on a straight-line basis over the estimated useful lives of intangible assets, other than goodwill, from the date that they are available for use.

The estimated useful lives for current and comparative periods are as follows:

1)	Computer software	1 years~ 3 years
2)	Other intangible assets	2 years~ 5 years

Amortization methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

• (n) Impairment of Non-Financial Assets

At each reporting date, the Group reviews the carrying amounts of its non-financial assets (other than inventories and deferred tax assets) to determine whether there is any indication of impairment. If any such indication exists, then the asset’ s recoverable amount is estimated. Goodwill is tested annually for impairment.

For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or CGUs. Goodwill arising from a business combination is allocated to CGUs or groups of CGUs that are expected to benefit from the synergies of the combination.

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(ENGLISH TRANSLATION OF CONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUDED IN CHINESE) EXCELSIOR MEDICAL CO., LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, UNLESS OTHERWISE SPECIFIED)

The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU.

An impairment loss is recognized if the carrying amount of an asset or CGU exceeds its recoverable amount.

Impairment losses are recognized in profit or loss. They are allocated first to reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other assets in the CGU on a pro rata basis.

An impairment loss in respect of goodwill is not reversed. For other assets, an impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.

(o) Provisions

A provision is recognized if, as a result of a past event, the Group has a present obligation that can be estimated reliably, and it is probably that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects the current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognized as finance cost.

(p) Revenue

1.Revenue from contracts with customers

Revenue is measured based on the consideration to which the Group expects to be entitled in exchange for transferring goods or services to a customer. The Group recognizes revenue when it satisfies a performance obligation by transferring control of a good or a service to a customer. The accounting policies for the Group’s main types of revenue are explained below.

1) Sale of goods

The Group recognizes revenue when control of the products has transferred, being when the products are delivered to the customer, the customer has full discretion over the channel and price to sell the products, and there is no unfulfilled obligation that could affect the customer’s acceptance of the products. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customer, and either the customer has accepted the products in accordance with the sales contract, the acceptance provisions have lapsed, or the Group has objective evidence that all criteria for acceptance have been satisfied.

The Group’s obligation for the sales of goods components under the standard warranty terms is recognized as a provision for warranty.

A receivable is recognized when the goods are delivered as this is the point in time that the Group has a right to an amount of consideration that is unconditional.

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(ENGLISH TRANSLATION OF CONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUDED IN CHINESE) EXCELSIOR MEDICAL CO., LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, UNLESS OTHERWISE SPECIFIED)

2) Services

The Group provides maintenance and warranty services. Revenue from providing services is recognized in the accounting period in which the services are rendered. Under the IFRS 15, the total consideration in the service contracts will be allocated to all services based on their standalone selling prices. The stand-alone selling prices will be determined based on the list prices at which the Group sells the services in separate transactions.

3) Financing components

The Group does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. As a consequence, the group does not adjust any of the transaction prices for the time value of money.

• (q) Employee Benefits

1.Defined contribution plans

Obligations for contributions to defined contribution plans are expensed as the related service is provided.

• 2.Defined benefit plans

The Group’s net obligation in respect of defined benefit plans is calculated separately for each the plan by estimating the amount of future benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets.

The calculation of defined benefit obligations is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a potential asset for the Group, the recognized asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. To calculate the present value of economic benefits, consideration is given to any applicable minimum funding requirements.

Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognized immediately in other comprehensive income, and accumulated in retained earnings. The Group determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined benefit liability (asset). Net interest expense and other expenses related to defined benefit plans are recognized in profit or loss.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognized immediately in profit or loss. The Group recognizes gains and losses on the settlement of a defined benefit plan when the settlement occurs.

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(ENGLISH TRANSLATION OF CONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUDED IN CHINESE) EXCELSIOR MEDICAL CO., LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, UNLESS OTHERWISE SPECIFIED)

• 3.Other long-term employee benefits

The Group’ s net obligation in respect of long-term employee benefits is the amount of future benefit that employees have earned in return for their service in the current and prior periods. That benefit is discounted to determine its present value. Remeasurements are recognized in profit or loss in the period in which they arise.

• 4.Termination benefits

Termination benefits are expensed at the earlier of when the Group can no longer withdraw the offer of those benefits and when the Group recognizes costs for a restructuring. If benefits are not expected to be settled wholly within 12 months of the reporting date, then they are discounted.

• 5.Short-term employee benefits

Short-term employee benefits are expensed as the related service is provided. A liability is recognized for the amount expected to be paid if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

• (r) Income Taxes

Income taxes comprise current taxes and deferred taxes. Except for expenses related to business combinations or recognized directly in equity or other comprehensive income, all current and deferred taxes are recognized in profit or loss.

Current taxes comprise the expected tax payables or receivables on the taxable profits (losses) for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax payables or receivables are the best estimate of the tax amount expected to be paid or received. It is measured using tax rates enacted or substantively enacted at the reporting date.

Deferred taxes arise due to temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their respective tax bases. Deferred taxes are recognized except for the following:

• 1.temporary differences on the initial recognition of assets and liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profits (losses) at the time of the transaction;

• 2.temporary differences related to investments in subsidiaries, associates and joint arrangements to the extent that the Group is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future; and

• 3.taxable temporary differences arising on the initial recognition of goodwill.

Deferred tax assets are recognized for the carry forward of unused tax losses, unused tax credits, and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefits will be realized; such reductions are reversed when the probability of future taxable profits improves.

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(ENGLISH TRANSLATION OF CONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUDED IN CHINESE) EXCELSIOR MEDICAL CO., LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, UNLESS OTHERWISE SPECIFIED)

Deferred taxes are measured at tax rates that are expected to be applied to temporary differences when they reserve, using tax rates enacted or substantively enacted at the reporting date.

Deferred tax assets and liabilities are offset if the following criteria are met:

• 1.the Group has a legally enforceable right to set off current tax assets against current tax liabilities; and

• 2.the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on either:

• 1) the same taxable entity; or

• 2) different taxable entities which intend to settle current tax assets and liabilities on a net basis, or to realize the assets and liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.

• (s) Earnings per Share

The Group discloses the Company’s basic and diluted earnings per share attributable to ordinary shareholders of the Company. Basic earnings per share is calculated as the profit attributable to ordinary shareholders of the Company divided by the weighted average number of ordinary shares outstanding. Diluted earnings per share is calculated as the profit attributable to ordinary shareholders of the Company divided by the weighted average number of ordinary shares outstanding after adjustment for the effects of all potentially dilutive ordinary shares.

(t) Operating Segments

An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the Group). Operating results of the operating segment are regularly reviewed by the Group’s chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance. Each operating segment consists of standalone financial information.

(5) Significant Accounting Assumptions and Judgments, and Major Sources of Estimation Uncertainty

In preparing these consolidated financial statements, management has made judgments, estimates, and assumptions that affect the application of the accounting policies and the reported amount of assets, liabilities, income, and expenses. Actual results may differ from these estimates.

The management continues to monitor the accounting estimates and assumptions. The management recognizes any changes in accounting estimates during the period and the impact of those changes in accounting estimates in the next period.

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(ENGLISH TRANSLATION OF CONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUDED IN CHINESE) EXCELSIOR MEDICAL CO., LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, UNLESS OTHERWISE SPECIFIED)

Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment within the next financial year is as follows:

The loss allowance of trade receivable

The Group has estimated the loss allowance of trade receivable that is based on the risk of a default occurring and the rate of expected credit loss. The Group has considered historical experience, current economic conditions and forward-looking information at the reporting date to determine the assumptions to be used in calculating the impairments and the selected inputs. The relevant assumptions and input values, please refer to Note (6)(e).

(6) Explanation of Significant Accounts

• (a) Cash and cash equivalents

Cash on hand, demand deposits and checking accounts Time deposits Cash and cash equivalents in consolidated statement of cash flows	December 31, 2021 $ 2,030,451 1,041,813 $ 3,072,264	December 31, 2020
		1,756,766 861,698
		2,618,464

The Group interest risk and sensibility analysis of the financial assets and liabilities was disclosed in Note (6)(ac).

• (b) Financial assets and liabilities at fair value through profit or loss

Mandatorily measured at fair value through profit or loss: Derivative instruments not used for hedging Forward foreign exchange contracts Held-for-trading financial liabilities Derivative instruments not used for hedging Forward foreign exchange contracts	December 31, 2021 $ - $ 673	December 31, 2020
		166
		46

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(ENGLISH TRANSLATION OF CONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUDED IN CHINESE) EXCELSIOR MEDICAL CO., LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, UNLESS OTHERWISE SPECIFIED)

The Group uses derivative financial instruments to hedge the certain foreign exchange and interest risk the Group is exposed to, arising from its operating, financing and investing activities. The following derivative instruments, without the application of hedge accounting, were classified as held-for-trading financial instruments:

Forward foreign exchange contracts:

Forward foreign exchange contracts purchased Forward foreign exchange contracts purchased Foreign exchange forward purchased Foreign exchange forward purchased		December 31, 2021
	Amount (in thousands) JPY 257,425 USD 515	Currency Maturity period JPY against TWD 2022.01~2022.03 USD against TWD 2022.01 December 31, 2020
	Amount (in thousands) JPY 107,538 USD 400	Currency Maturity period JPY against TWD 2021.02~2021.03 USD against TWD 2021.01

• (c) Financial assets at fair value through other comprehensive income

Equity investments at fair value through other comprehensive income Domestic listed shares Foreign listed shares Domestic unlisted shares Foreign unlisted shares Total	December 31, 2021 $ 90,528 152,234 149,478 309,301 $ 701,541	December 31, 2020
		103,792 194,205 129,680 307,760
		735,437

• 1.Equity investments at fair value through other comprehensive income

The Group designated the investments shown above as equity securities at fair value through other comprehensive income because these equity securities represent those investments that the Group intends to hold for long term for strategic purposes.

The Group has sold its common stocks designated at fair value through other comprehensive income because of operation strategies for the years ended December 31, 2021 and 2020. The shares sold had a fair value of $40,172 thousand and $1,009 thousand, respectively. The Group realized a gain of $4,091 thousand and $301 thousand, respectively, which was included in other comprehensive income, and thereafter, was transferred to retained earnings from other equity.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, UNLESS OTHERWISE SPECIFIED)

• 2.For credit risk and market risk, please refer to Note (6)(ac).

3.As of December 31, 2021 and 2020, the aforesaid financial assets were not pledged as collateral.

• (d) Financial assets measured at amortized cost

Financial assets measured at amortized cost
Time deposits with original maturity of more than 3 months	December 31, 2021 $ 682,603	December 31, 2020
		774,526

The Group has assessed that these financial assets are held to maturity to collect contractual cash flows, which consist solely of payments of principal and interest on principal amount outstanding. Therefore, these investments have been classified as financial assets measured at amortized cost.

The market interest rates of the time deposits with original maturity of more than 3 moths were 0.24%~1.76% and 0.26%~1.76% per annum as of December 31, 2021 and 2020, respectively.

• (e) Notes receivable, accounts receivable, lease payment receivable and other receivables

Notes receivable Other notes receivable Accounts receivable Trade receivables - fair value through other comprehensive income Lease payment receivable Other receivables Less: Loss allowance Unrealized interests income	December 31, 2021 $ 261,529 290,515 1,414,587 9,317 19,625 2,572,458 (75,475) (240) $ 4,492,316	December 31, 2020 222,994 184,942 1,285,872 3,603 14,582 2,312,487 (72,628) (107) 3,951,745

The Group has assessed a portion of its trade receivables that was held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; therefore, such trade receivables were measured at fair value through other comprehensive income.

Arich Enterprise Co., Ltd. (“ Arich” ) engages in medical logistics services, providing inventory management services, logistics services, customer service and domestic transportation planning services. Arich recognizes the medical logistics service revenue at a percentage of the net profit on its sale of medicines. The inventories for medical logistics services do not belong to Arich. The receivables from customers and the payables to medical companies are classified as other notes receivable, other trade receivables, other notes payable, and other trade payables.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, UNLESS OTHERWISE SPECIFIED)

The Group applies the simplified approach to provide for its expected credit losses, i.e. the use of lifetime expected loss provision for all receivables. To measure the expected credit losses, trade receivables have been grouped based on shared credit risk characteristics and the days past due, as well as incorporated forward looking information, including macroeconomic and relevant industry information. The loss allowance provision were determined as follows:

Current 1 to 90 days past due 91 to 180 days past due 181 to 365 days past due More than 365 days past due Current 1 to 90 days past due 91 to 180 days past due 181 to 365 days past due More than 365 days past due	December 31, 2021	December 31, 2021	Loss allowance provision (26,621) (4,480) (1,806) (3,462) (39,106) (75,475) Loss allowance provision (28,711) (2,102) (1,314) (1,217) (39,284) (72,628)
	Gross carrying amount Weighted- average loss rate $ 4,448,614 0.60% 41,494 10.80% 8,290 21.79% 18,746 18.47% 40,105 97.51% $ 4,557,249 December 31, 2020
		Weighted- average loss rate 0.74% 5.58% 11.77% 16.94% 82.44%

The Group’s lease payment receivables were as follows:

December 31, 2021 Less than one year Between one and five years December 31, 2020 Less than one year Between one and five years	Gross investment in the lease $ 10,062 32,258 $ 42,320 $ 6,549 9,689 $ 16,238	Unearned finance income (1,854) (5,079) (6,933) (753) (903) (1,656)	Present value of minimum lease payments receivable
			8,208 27,179
			35,387
			5,796 8,786
			14,582

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(ENGLISH TRANSLATION OF CONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUDED IN CHINESE) EXCELSIOR MEDICAL CO., LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, UNLESS OTHERWISE SPECIFIED)

The Group entered into finance lease arrangements for certain vehicles and equipment. All leases were denominated in New Taiwan dollars. The average term of finance leases entered into was 5 years.

The interest rate inherent in the leases was fixed at the contract date for the entire lease term. The average effective interest rate contracted was approximately 3.00%~6.00% and 3.00%~6.00% per annum as of December 31, 2021 and 2020.

The lease payment receivables as of December 31, 2021 and 2020 were neither past due nor impaired.

The movement in the allowance for notes and trade receivable was as follows:

Balance as of January 1 Impairment losses recognized Amounts written off Impairment losses reversed Effect of movements in exchange rate Balance as of December 31	For the Years Ended December 31,	For the Years Ended December 31,
	2021 $ 72,628 17,933 (10,881) (2,351) (1,854) $ 75,475	2020
		73,738 31,727 (28,818) (3,996) (23)
		72,628

As of December 31, 2021 and 2020, the receivables from installment sales were $9,317 thousand and $3,603 thousand, respectively, and the related unrealized interest income were $229 thousand and $107 thousand, respectively.

The Group signed the accounts receivable factoring agreements without recourse with financial institutions. According to the agreements, the Group transfers almost all risks and rewards to debtors, thus is eligible for derecognizing the financial assets. The relevant information of the unexpired accounts receivable at the reporting date were as follows:

		December 31, 2021	December 31, 2021	December 31, 2021
Purchaser		Amount Advanced Unpaid - -	Amount Advanced Paid 10,500 11,935	Amount Recognized in Other Receivables - -	Range of Interest Rate Significant Transferring Terms 4.27% None 2.02%~2.22% None

		December 31, 2020	December 31, 2020	December 31, 2020
Purchaser		Amount Advanced Unpaid - -	Amount Advanced Paid 8,840 5,632	Amount Recognized in Other Receivables - -	Range of Interest Rate Significant Transferring Terms 1.25%-3.19% None 1.77%-2.02% None

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(ENGLISH TRANSLATION OF CONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUDED IN CHINESE) EXCELSIOR MEDICAL CO., LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, UNLESS OTHERWISE SPECIFIED)

The Group entered into separate trade receivables factoring agreements with financial institutions, Hotai Finance Co., Ltd., and Chailease Finance Co., Ltd. According to the agreements, losses from commercial disputes (such as sales returns and discounts) were borne by the Group, while losses from credit risk were borne by the counterparties.

The Group derecognized the above trade receivables because it has transferred substantially all of the risks and rewards of their ownership, and it does not have any continuing involvement in them. The amounts receivable from the financial institutions were recognized as “other receivables” upon the derecognition of those trade receivables.

• (f) Inventories

Inventories
Merchandise Inventory in-transit Total	December 31, 2021 $ 825,120 85,123 $ 910,243	December 31, 2020
		762,161 89,075
		851,236

The details of cost of goods sold were as follows :

Cost of goods sold Losses (reversal) on inventory valuation and obsolescence Loss on inventory scrapped Repair and maintenance costs Others operating costs Total	For the Years Ended December 31, 2021 2020 $ 4,641,684 4,920,695 9,378 (44,175) 2,553 4,795 224,804 221,698 320,707 265,907 $ 5,199,126 5,368,920
	2021 $ 4,641,684 9,378 2,553 224,804 320,707 $ 5,199,126

The factor leading to the net realizable value of inventories is lower than the cost vanished, so that the reversal gain of inventories is recognized due to the increase in net realizable value for the year ended December 31, 2020.

As of December 31, 2021 and 2020, none of the combined company's inventories had been provided with pledge guarantees.

• (g) Investments accounted for using equity method

A summary of the Group’ s financial information for investments accounted for using the equity method at the reporting date is as follows:

Associates	December 31, 2021 $ 2,629,538	December 31, 2020
		2,492,993

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, UNLESS OTHERWISE SPECIFIED)

1.Associates

Associates which are material to the Group consisted of the followings:

	Main operating
Nature of	location/ Registered		Proportion of	shareholding
Name of Relationship	Country of		and voting rights
			December 31,	December 31,
Associates with the Group	the Company		2021	2020
Asia Best Long-term care	Cayman Islands		% 49.38	% 49.38
Healthcare and rehabilitation
services
) Asia Best Healthcare:
			December 31,	December 31,
			2021	2020
Current assets		$	1,327,188	1,156,129
Non-current assets			3,775,520	3,978,430
Current liabilities			(278,067)	(186,014)
Non-Current liabilities			(2,049,407)	(2,178,146)
Net assets		$	2,775,234	2,770,399
Net assets attributable to the Group		$	1,405,198	1,404,421
		For the Years Ended December 31,
			2021	2020
Operating revenue		$	269,440	287,505
Profit		$	103,173	124,426
Other comprehensive income			38,113	65,634
Total comprehensive income		$	141,286	190,060
Dividends received		$	28,205	29,974

1) Asia Best Healthcare:

The Group’ s financial information for investments accounted for using equity method that are individually insignificant was as follows:

Carrying amount of individually insignificant associates’ equity	December 31, 2021 $ 1,224,340	December 31, 2020
		1,088,572

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(ENGLISH TRANSLATION OF CONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUDED IN CHINESE) EXCELSIOR MEDICAL CO., LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, UNLESS OTHERWISE SPECIFIED)

Attributable to the Group: Profit Other comprehensive income Total comprehensive income	For the Years Ended December 31,	For the Years Ended December 31,
	2021 $ 182,486 34,604 $ 217,090	2020
		180,588 43,123 223,711

None of the combined company's investments using the equity method is provided as a pledge.

• (h) Changes in ownership interests in subsidiaries

The Group subscribed the shares issued for cash by its subsidiary Arich at a percentage different from its existing ownership percentage in April 2020, and a part of shares are available for subscription to employees of Arich. The changes in ownership interests in subsidiaries were recognized as capital surplus amounting to $3,967 thousand for the year ended December 31, 2020.

• (i) Material non-controlling interests of subsidiaries

The material non-controlling interests of subsidiaries were as follows:

Main operating location/ Registered Country of Subsidiaries the Company Dynamic Taiwan Arich Taiwan	Proportion of shareholding and voting rights
	December 31, 2021 December 31, 2020 % 61.50 % 61.50 % 60.00 % 60.00

The summarized financial information below represents amounts before intragroup eliminations were as follows:

• 1.Collective financial information of Dynamic and its subsidiaries:

Current assets Non-current assets Current liabilities Non-Current liabilities Net assets Non-controlling interests	December 31, 2021 $ 1,642,277 656,514 (657,555) (169,313) $ 1,471,923 $ 794,105	December 31, 2020 1,537,172 605,663 (555,670) (123,968)
		1,463,197
		798,341

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, UNLESS OTHERWISE SPECIFIED)

Operating revenue Net income Other comprehensive loss Total comprehensive income Profit, attributable to non-controlling interests Comprehensive income, attributable to non-controlling interests Net cash flows from operating activities Net cash flows from investing activities Net cash flows from financing activities Effect of exchange rate changes on cash and cash equivalents Net increase (decrease) in cash and cash equivalents Dividends paid to non-controlling interests 2.Collective financial information of Arich: Current assets Non-current assets Current liabilities Non-Current liabilities Net assets Non-controlling interests

For the Years Ended December 31, 2021 2020 $ 1,028,183 1,009,308 $ 141,689 116,642 (25,111) (7,023) $ 116,578 109,619 $ 81,587 69,215 $ 66,141 65,286 For the Years Ended December 31, 2021 2020 $ 277,645 248,551 (92,419) 17,288 (148,680) (151,443) (8,076) (10,721) $ 28,470 103,675 $ 64,888 63,366 December 31, 2021 December 31, 2020 $ 3,840,681 3,399,123 648,080 548,687 (2,531,376) (2,018,533) (139,397) (148,573) $ 1,817,988 1,780,704 $ 1,090,771 1,068,400

2021 $ 277,645 (92,419) (148,680) (8,076) $ 28,470 $ 64,888 December 31, 2021 $ 3,840,681 648,080 (2,531,376) (139,397) $ 1,817,988 $ 1,090,771

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, UNLESS OTHERWISE SPECIFIED)

Operating revenue Net income Other comprehensive income Total comprehensive income Profit, attributable to non-controlling interests Comprehensive income, attributable to non-controlling interests Net cash flows from operating activities Net cash flows from investing activities Net cash flows from financing activities Net increase in cash and cash equivalents Dividends paid to non-controlling interests

For the Years Ended December 31, 2021 2020 $ 945,661 1,251,395 $ 55,305 47,249 23,758 62,295 $ 79,063 109,544 $ 33,183 28,421 $ 47,438 65,554 $ 336,065 559,557 30,415 (47,868) (197,666) (267,786) $ 168,814 243,903 $ 25,068 26,745

2021 $ 945,661 $ 55,305 23,758 $ 79,063 $ 33,183 $ 47,438 $ 336,065 30,415 (197,666) $ 168,814 $ 25,068

(j) Property, plant and equipment

The cost, depreciation, and impairment of the property, plant and equipment of the Group for the years ended December 31, 2021 and 2020 were as follows:

Cost or deemed cost: Balance as of January 1, 2021 Additions Disposal and obsolescence Transfer from inventories Transfer to inventories Reclassification and others Effect of movements in exchange rates Balance as of December 31, 2021 Balance as of January 1, 2020 Additions Disposal and obsolescence Transfer from inventories Transfer to inventories Transfer to expense Effect of movements in exchange rates Balance as of December 31, 2020		Land $ 145,109 - - - - - (4,438) $ 140,671 $ 147,595 - - - - - (2,486) $ 145,109	Buildings 262,343 994 (2,164) - - - (10,448) 250,725 268,045 543 (392) - - - (5,853) 262,343	Medical equipment 337,238 110,051 (16,649) 51,800 (6,014) 17,575 (9,054) 484,947 328,795 18,151 (22,979) 30,891 (15,592) - (2,028) 337,238	Miscellaneous equipment 295,089 27,532 (10,673) 14,167 (3,034) 7,769 (4,664) 326,186 322,307 9,431 (34,412) 11,264 (11,628) (400) (1,473) 295,089	Equipment to be inspected and construction in progress 286 26,113 - - - (21,348) - 5,051 - 286 - - - - - 286	Total 1,040,065 164,690 (29,486) 65,967 (9,048) 3,996 (28,604)
							1,207,580
							1,066,742 28,411 (57,783) 42,155 (27,220) (400) (11,840)
							1,040,065

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(ENGLISH TRANSLATION OF CONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUDED IN CHINESE) EXCELSIOR MEDICAL CO., LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, UNLESS OTHERWISE SPECIFIED)

Depreciation and impairment losses: Balance as of January 1, 2021 Depreciation for the period Disposal and obsolescence Transfer to inventories Effect of movements in exchange rates Balance as of December 31, 2021 Balance as of January 1, 2020 Depreciation for the period Impairment loss recognized (reversed) Disposal and obsolescence Transfer to inventories Effect of movements in exchange rates Balance as of December 31, 2020 Carrying amount: Balance as of December 31, 2021 Balance as of January 1, 2020 Balance as of December 31, 2020		Land $ 4,000 - - - - $ 4,000 $ 4,000 - - - - - $ 4,000 $ 136,671 $ 143,595 $ 141,109	Buildings 75,596 4,875 (2,165) - (2,114)	Medical equipment 207,673 71,055 (16,649) (4,104) (6,513) 251,462 199,532 42,756 2,567 (22,680) (12,658) (1,844) 207,673 233,485 129,263 129,565	Miscellaneous equipment 218,457 37,465 (10,583) (1,841) (4,060) 239,438 230,330 32,892 1,715 (34,326) (10,827) (1,327) 218,457 86,748 91,977 76,632	Equipment to be inspected and construction in progress - - - - - - - - - - - - - 5,051 - 286	Total 505,726 113,395 (29,397) (5,945) (12,687)
			76,192				571,092
			72,017 4,999 - (392) - (1,028)				505,879 80,647 4,282 (57,398) (23,485) (4,199)
			75,596				505,726
			174,533				636,488
			196,028				560,863
			186,747				534,339

As of December 31, 2021 and 2020 the property, plant and equipment of the Group had been pledged as collateral for bank borrowings. Please refer to note(8).

• (k) Right-of-use assets

The Group leases many assets including buildings, machinery and other equipment. Information about leases for which the Group as a lessee was presented below:

Cost: Balance as of January 1, 2021 Additions Write-off Effect of movements in exchange rates Balance as of December 31, 2021 Balance as of January 1, 2020 Additions Write-off Effect of movements in exchange rates Balance as of December 31, 2020	Buildings $ 451,785 73,608 (55,124) (1,410) $ 468,859 $ 314,047 159,298 (21,421) (139) $ 451,785	Machinery and equipment 1,065 - (741) - 324 1,065 - - - 1,065	Other equipment 1,440 - (1,440) - - 1,440 - - - 1,440	Total 454,290 73,608 (57,305) (1,410)
				469,183
				316,552 159,298 (21,421) (139)
				454,290

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(ENGLISH TRANSLATION OF CONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUDED IN CHINESE) EXCELSIOR MEDICAL CO., LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, UNLESS OTHERWISE SPECIFIED)

Accumulated depreciation and impairment losses: Balance as of January 1, 2021 Depreciation for the year Write-off Effect of movements in exchange rates Balance as of December 31, 2021 Balance as of January 1, 2020 Depreciation for the year Write-off Effect of movements in exchange rates Balance as of December 31, 2020 Carrying amount: Balance as of December 31, 2021 Balance as of January 1, 2020 Balance as of December 31, 2020	Buildings $ 151,966 78,056 (37,970) (821) $ 191,231 $ 76,046 76,717 (740) (57) $ 151,966 $ 277,628 $ 238,001 $ 299,819	Machinery and equipment 912 108 (741) - 279 383 529 - - 912 45 682 153	Other equipment 1,440 - (1,440) - - 1,152 288 - - 1,440 - 288 -	Total 154,318 78,164 (40,151) (821) 191,510 77,581 77,534 (740) (57) 154,318 277,673 238,971 299,972

The Group added and modified parts of the lease contracts, resulting in an increase in right-of-use assets of $73,608 thousand and $159,298 thousand for the years ended December 31, 2021 and 2020, respectively.

The Group terminated and modified parts of the lease contracts, resulting in a decrease in right-ofuse assets of $17,154 thousand and $20,681 thousand for the years ended December 31, 2021 and 2020, respectively.

For the years ended December 31, 2021 and 2020, the Group leases storage room, machinery and parking space under operating lease, please refer to Note (6)(t).

• (l) Investment property

Investment properties are the assets hold by the Group. The period of rental investment properties that cannot be terminated originally is 15 years.

Cost or deemed cost: Balance as of January 1, 2021 Addition Disposal Balance as of December 31, 2021	Owned property Land Buildings $ 843,750 174,673 - 21,695 - (743) $ 843,750 195,625	Total 1,018,423 21,695 (743) 1,039,375
	Land $ 843,750 - - $ 843,750

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, UNLESS OTHERWISE SPECIFIED)

Balance as of January 1, 2020 Addition Balance as of December 31, 2020 Depreciation and impairment losses: Balance as of January 1, 2021 Depreciation for the year Disposal Balance as of December 31, 2021 Balance as of January 1, 2020 Depreciation for the year Balance as of December 31, 2020 Book value: Balance as of December 31, 2021 Balance as of January 1, 2020 Balance as of December 31, 2020 Fair Value: Balance as of December 31, 2021 Balance as of December 31, 2020

Owned property Land Buildings Total $ 688,419 109,032 797,451 155,331 65,641 220,972 $ 843,750 174,673 1,018,423 $ - 13,333 13,333 - 7,074 7,074 - (134) (134) $ - 20,273 20,273 $ - 8,823 8,823 - 4,510 4,510 $ - 13,333 13,333 $ 843,750 175,352 1,019,102 $ 688,419 100,209 788,628 $ 843,750 161,340 1,005,090 $ 1,146,306 $ 1,040,810

Land $ 688,419 155,331 $ 843,750 $ - - - $ - $ - - $ - $ 843,750 $ 688,419 $ 843,750

The fair value of investment properties was based on a valuation by a qualified independent appraiser. Fair value was measured using comparison approach, income approach and cost approach.

As of December 31, 2021 and 2020, the investment property of the Group had been pledged as collateral for bank borrowings, please refer to Note (8).

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, UNLESS OTHERWISE SPECIFIED)

(m) Intangible assets

The costs, amortization and impairment of the intangible assets of the Group for the years ended December 31, 2021 and 2020, were as follows:

Cost: Balance as of January 1, 2021 Additions Disposals Effect of movements in exchange rates Balance as of December 31, 2021 Balance as of January 1, 2020 Additions Disposals Effect of movements in exchange rates Balance as of December 31, 2020 Amortization and impairment loss: Balance as of January 1, 2021 Amortization Disposals Effect of movements in exchange rates Balance as of December 31, 2021 Balance as of January 1, 2020 Amortization Disposals Effect of movements in exchange rates Balance as of December 31, 2020 Book value: Balance as of December 31, 2021 Balance as of January 1, 2020 Balance as of December 31, 2020	Goodwill $ 56,197 - - (654) $ 55,543 $ 56,044 - - 153 $ 56,197 $ 28,346 - - (190) $ 28,156 $ 27,933 - - 413 $ 28,346 $ 27,387 $ 28,111 $ 27,851	Software 15,323 1,064 (2,470) (214) 13,703 13,132 4,317 (2,129) 3 15,323 11,368 2,136 (2,470) (179) 10,855 10,831 2,661 (2,129) 5 11,368 2,848 2,301 3,955	Other intangible assets 77,703 3,000 - - 80,703 79,335 - (1,632) - 77,703 76,856 1,078 - - 77,934 77,780 708 (1,632) - 76,856 2,769 1,555 847	Total 149,223 4,064 (2,470) (868) 149,949 148,511 4,317 (3,761) 156 149,223 116,570 3,214 (2,470) (369) 116,945 116,544 3,369 (3,761) 418 116,570 33,004 31,967 32,653

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, UNLESS OTHERWISE SPECIFIED)

1.Amortization

The amortization of intangible assets is included in the following statement of comprehensive income items:

Operating costs Operating expenses Total Short-term borrowings Secured bank loans Unsecured bank loans Total Unused short-term credit lines Range of interest rates	For the Years Ended December 31,	For the Years Ended December 31,
	2021 $ 1,078 2,136 $ 3,214 December 31, 2021 $ 254,616 225,350 $ 479,966 $ 4,679,302 0.70%~3.04%	2020
		708 2,661
		3,369
		December 31, 2020
		262,498 142,000
		404,498
		5,371,723
		0.85%~1.70%

• (n) Short-term borrowings

Please refer to Note (8) for details of the Group’s assets pledged as collateral for bank borrowings.

The Group’s interest risk and sensitivity analysis of financial assets and liabilities were disclosed in Note (6)(ac).

• (o) Other payables

Logistics services payable Others (p) Refund liabilities Refund liabilities	December 31, 2021 $ 2,253,633 467,592 $ 2,721,225 December 31, 2021 $ 14,713	December 31, 2020
		1,528,734 472,615
		2,001,349
		December 31, 2020
		30,438

For the medicine selling contract, the Group reduces its revenue by the amount of sales discounts and expected returns, and records it as refund liabilities.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, UNLESS OTHERWISE SPECIFIED)

• (q) Provisions

Provisions
Warranties Balance as of January 1, 2021 Additions Provisions reversed or used Effect of exchange rate changes Balance as of December 31, 2021 Balance as of January 1, 2020 Additions Provisions reversed or used Effect of exchange rate changes Balance as of December 31, 2020	December 31, 2021
	$ 25,735

Warranties

The provision for warranty claims represents the present value of management’s best estimate of the future outflow of economic benefits that will be required under the Group’s obligations for warranties under local sale of goods legislation. The estimate had been made on the basis of historical warranty trends and may vary as a result of other events affecting product quality.

• (r) Long-term borrowings

The details were as follows:

Secured bank loans Less: current portion Total Range of interest rates	December 31, 2020 $ 4,251 (4,251) $ - 4.45%~5.45%

• 1.There were no significant issuances, repurchases and repayments of long-term borrowing in 2021 and 2020.

• 2.Please refer to Note (8) for details of the Group’s assets pledged as collateral for bank borrowings.

• 3.The Group’s interest risk and sensitivity analysis of financial assets and liabilities were disclosed in Note (6)(ac).

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, UNLESS OTHERWISE SPECIFIED)

• (s) Lease liabilities

The carrying amounts of lease liabilities were as follows:

Current Non-current	December 31, 2021 $ 72,244 $ 209,782	December 31, 2020
		78,369
		225,457

For the maturities analysis, please refer to Note (6)(ac).

The Group added and modified parts of the lease contract, resulting in an increase in lease liabilities of $73,608 thousand and $159,080 thousand for the years ended December 31, 2021 and 2020, respectively.

The Group terminated and modified parts of the contract, resulting in a decrease in lease liabilities of $17,587 thousand and $20,792 thousand for the years ended December 31, 2021 and 2020, respectively.

The amounts recognized in profit or loss were as follows:

The amounts recognized in profit or loss were as follows:
Interest on lease liabilities Income from sub-leasing right-of-use assets Expenses relating to short-term leases COVID-19-related rent concessions	For the Years Ended December 31,
	2021 $ 2,708 $ 4,927 $ 8,981 $ 1,372	2020
		3,305
		4,897
		7,564
		-

The amounts recognized in the statement of cash flows for the Group were as follows:

Total cash outflow for leases	For the Years Ended December 31,	For the Years Ended December 31,
	2021 $ 87,324	2020
		86,468

1. Buildings leases

As of December 31, 2021, the Group leases buildings for its office space. The leases of office space typically run for a period of 2 to 10 years. Some leases include an option to renew the lease for an additional period of the same duration after the end of the contract term.

The Group sub-leases some of its right-of-use assets under operating leases; please refer to Note (6)(t).

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, UNLESS OTHERWISE SPECIFIED)

2. Other leases

The Group leases machinery and other equipment, with lease terms of 2 to 3 years. In some cases, the Group has options to purchase the assets at the end of the contract term.

The Group also leases storage room, machinery and parking space with contract terms of 1 to 3 years. These leases are short-term or leases of low-value items. The Group has elected not to recognize right-of-use assets and lease liabilities for these leases.

(t) Operating leases

Operating leases relate to leases and subleases of housing and leases of equipments with lease terms between 1 to 10 years. The leasees does not have bargain purchase options to acquire the leased housing and equipments at the expiration of the lease periods.

A maturity analysis of lease payments, showing the undiscounted lease payments to be received after the reporting date are as follows:

Within 1 year 1 to 5 years More than 5 years	December 31, 2021 $ 25,056 56,115 19,309 $ 100,480	December 31, 2020
		28,186 37,327 -
		65,513

• (u) Employee benefits

1.Defined benefit plans

Reconciliation of defined benefit obligation at present value and plan asset at fair value were as follows:

Present value of defined benefit obligations Fair value of plan assets Net defined benefit liabilities	December 31, 2021 $ 101,452 (100,999) $ 453	December 31, 2020 106,766 (98,132) 8,634

The Group makes defined benefit plan contributions to the pension fund account with Bank of Taiwan that provides pensions for employees upon retirement. The plans (covered by the Labor Standards Law) entitle a retired employee to receive retirement benefits based on years of service and average salary for the six months prior to retirement.

1) Composition of plan assets

The Group allocates pension funds in accordance with the Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund, and such funds are managed by the Bureau of Labor Funds, Ministry of Labor. With regard to the utilization of the funds, minimum earnings shall be no less than the earnings attainable from two-year time deposits with interest rates offered by local banks.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, UNLESS OTHERWISE SPECIFIED)

The Group’ s Bank of Taiwan labor pension reserve account balance amounted to $100,465 thousand as of December 31, 2021. For information on the utilization of the labor pension fund assets, including the asset allocation and yield of the fund, please refer to the website of the Bureau of Labor Funds, Ministry of Labor.

• 2) Movements in present value of the defined benefit obligations

The movements in present value of defined benefit obligations for the Group were as follows:

Defined benefit obligations as of January 1 Current service costs and interest Remeasurements on the net defined benefit obligation －Actuarial gains and losses arising from experience adjustments －Actuarial gains and losses arising from changes in demographic assumptions －Actuarial gains and losses arising from changes in financial assumptions Exchange differences on foreign plans Benefit paid Other adjustments Defined benefit obligations as of December 31	For the Years Ended December 31,	For the Years Ended December 31,
	2021 $ 106,766 4,424 (5,545) 4,789 (3,288) (247) (2,567) (2,880) $ 101,452	2020
		100,419 4,174 (2,713) 814 4,065 7 - - 106,766

• 3) Movements of defined benefit plan assets

The movements in the present value of the defined benefit plan assets for the Group were as follows:

Fair value of plan assets as of January 1 Interest income Remeasurement on the net defined benefit obilgation －Return on plan assets (excluding current interest) Contribution paid by the employer Exchange differences on foreign plans Benefits paid Fair value of plan assets as of December 31	For the Years Ended December 31,	For the Years Ended December 31,
	2021 $ 98,132 347 1,357 3,738 (8) (2,567) $ 100,999	2020 89,300 732 2,847 5,256 (3) - 98,132

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, UNLESS OTHERWISE SPECIFIED)

4) Expenses recognized in profit or loss

The expenses recognized in profit or loss for the Group were as follows:

Current service costs Net interest of net liabilities for defined benefit obligations Operating costs and expenses	For the Years Ended December 31,	For the Years Ended December 31,
	2021 $ 4,073 4 $ 4,077 $ 4,077	2020
		3,416 26
		3,442
		3,442

• 5) Actuarial assumptions

The principal actuarial assumptions at the reporting date were as follows:

Discount rate Future salary increasing rate	December 31, 2021 December 31, 2020 0.750% 0.350% 2.125%~3.750% 2.125%~3.750%

The expected allocation payment to be made by the Group to the defined benefit plans for the one-year period after the reporting date is $2,145 thousand.

The weighted average lifetime of the defined benefits plans is 10~13 years.

6) Sensitivity analysis

If the actuarial assumptions had changed, the impact on the present value of the defined benefit obligation shall be as follows:

December 31, 2021 Discount rate Future salary increasing rate December 31, 2020 Discount rate Future salary increasing rate	Influences on defined benefit obligations Increased 0.25% Decreased 0.25% and EG Healthcare Increased 1.00% and EG Healthcare Decreased 1.00% $ (2,095) 2,163 2,067 (2,013) $ (2,336) 2,378 2,303 (2,239)

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, UNLESS OTHERWISE SPECIFIED)

Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation by the amounts shown above. The method used in the sensitivity analysis is consistent with the calculation of the pension liabilities in the balance sheets.

There is no change in the method and assumptions used in the preparation of sensitivity analysis for 2021 and 2020.

2.Defined contribution plans

The Company allocates 6% of each employee’ s monthly wages to the labor pension personal account at the Bureau of Labor Insurance in accordance with the provisions of the Labor Pension Act. Under these defined contribution plans, the Company allocates a fixed amount to the Bureau of Labor Insurance without additional legal or constructive obligation.

The pension costs incurred from the contributions to the Bureau of the Labor Insurance amounted to $21,585 thousand and $19,980 thousand for the years ended December 31, 2021 and 2020, respectively.

The foreign Company’ s pension costs under the local laws were $2,245 thousand and $2,208 thousand for the years ended December 31, 2021 and 2020, respectively.

• (v) Income taxes

1.Income tax expense

The components of income tax in the years 2021 and 2020 were as follows:

Current tax expense Current period Adjustment for prior periods Deferred tax expense Origination and reversal of temporary differences Adjustment for prior periods Change in unrecognized deductible temporary differences Income tax expense from continuing operations	For the Years Ended December 31, 2021 2020 $ 101,070 95,616 1,213 (1,675) 102,283 93,941 52,088 65,716 (2,630) 491 (294) 149 49,164 66,356 $ 151,447 160,297
	2021 $ 101,070 1,213 102,283 52,088 (2,630) (294) 49,164 $ 151,447

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, UNLESS OTHERWISE SPECIFIED)

The amount of income tax recognized in other comprehensive income for 2021 and 2020 were as follows:

	For	the Years Ended	December 31,	December 31,
		2021	2020
Items that will not be reclassified subsequently to profit or
loss:
Remeasurement from defined benefit plans	$	(959)		394
Share of other comprehensive income of associates and
joint ventures accounted for using equity method,
components of other comprehensive income		1,720	(4,150)
	$	761	(3,756)
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translation	$	16,272	24,206

Reconciliation of income tax and profit before tax for 2021 and 2020 were as follows:

Profit before income tax Income tax using the Group’s domestic tax rate Adjustment in tax rate Permanent differences Tax-exempt income Unrecognized deductible temporary differences Unrecognized unused loss carryforwards Adjustments for prior periods-current tax expense Adjustments for prior periods-deferred tax expense Effect of foreign income tax Undistributed earnings additional tax Income tax expense

For the Years Ended December 31, 2021 2020 $ 873,736 829,383 $ 197,510 186,929 - (858) (39,847) (29,548) (290) (317) (721) (4,319) (3,788) 7,370 1,213 (1,675) (2,630) 491 - 1,212 - 1,012 $ 151,447 160,297

2021 $ 873,736 $ 197,510 - (39,847) (290) (721) (3,788) 1,213 (2,630) - - $ 151,447

• 2.Deferred tax assets and liabilities

1) Unrecognized deferred tax assets

Deferred tax assets have not been recognized in respect of the following items:

Tax effect of deductible temporary differences Tax losses	December 31, 2021 $ 21,464 76,924 $ 98,388	December 31, 2020
		20,594 85,311
		105,905

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(ENGLISH TRANSLATION OF CONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUDED IN CHINESE) EXCELSIOR MEDICAL CO., LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, UNLESS OTHERWISE SPECIFIED)

2) Recognized deferred tax assets and liabilities

Changes in the amount of deferred tax assets and liabilities for the years ended December 31, 2021 and 2020 were as follows:

Deferred tax assets: Balance as of January 1, 2021 Recognized in profit or loss Recognized in other comprehensive income Effect of movements in exchange rates Balance as of December 31, 2021 Balance as of January 1, 2020 Recognized in profit or loss Recognized in other comprehensive income Effect of movements in exchange rates Balance as of December 31, 2020 Deferred tax liabilities: Balance as of January 1, 2021 Recognized in profit and loss Recognized in other comprehensive income Recognized directly in equity Effect of movements in exchange rates Balance as of December 31, 2021 Balance as of January 1, 2020 Recognized in profit or loss Recognized in other comprehensive income Effect of movements in exchange rates Balance as of December 31, 2020	Deferred sales returns and allowance $ 11,273 (946) - - $ 10,327 $ 7,183 4,090 - - $ 11,273 $ - - - - - $ - $ - - - - $ -	Unrealized losses on inventories 22,745 896 - (74) 23,567 31,289 (8,416) - (128) 22,745 - - - - - - - - - - -	Unrealized gains on investment 23,313 (17,774) - - 5,539 25,368 (2,055) - - 23,313 139,085 33,332 - - - 172,417 106,425 32,660 - - 139,085	Loss carry- forwards 43,983 (11,486) - (4) 32,493 59,520 (15,462) - (75) 43,983 - - - - - - - - - - -	Others 114,171 1,568 15,317 (569) 130,487 96,568 (6,615) 24,222 (4) 114,171 17,875 (11,910) (1,716) 223 (194) 4,278 9,305 5,238 3,772 (440) 17,875	Total
						215,485 (27,742) 15,317 (647) 202,413 219,928 (28,458) 24,222 (207) 215,485 156,960 21,422 (1,716) 223 (194) 176,695 115,730 37,898 3,772 (440) 156,960

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(ENGLISH TRANSLATION OF CONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUDED IN CHINESE) EXCELSIOR MEDICAL CO., LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, UNLESS OTHERWISE SPECIFIED)

3.As of December 31, 2021, the Group’s unused prior-years loss carryforwards and the expiry years of the loss carryforwards were as follows:

Year of loss 2014 2015 2016 2017 2018 2019 2020 2021	Unused tax loss Year of expiry $ 7,842 2024 27,333 2020~2025 15,091 2021~2026 75,453 2022~2027 119,259 2023~2028 174,462 2024~2029 33,165 2025~2030 862 2031 $ 453,467

• 4.Assessment of tax

The Company’ s income tax returns for the years through 2019 were assessed by the Tax Administration.

• (w) Capital and other equity

• 1.Share capital

Number of shares authorized (in thousands) Shares authorized Number of shares issued and fully paid (in thousands) Shares issued	December 31, 2021 $ 200,000 $ 2,000,000 141,149 $ 1,411,490	December 31, 2020
		200,000
		2,000,000
		141,149
		1,411,490

A total of 10,000 thousand shares of the Company’ s authorized shares are reserved for the issuance of employee share options, convertible bonds with warrants and preferred shares with warrants.

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(ENGLISH TRANSLATION OF CONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUDED IN CHINESE) EXCELSIOR MEDICAL CO., LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, UNLESS OTHERWISE SPECIFIED)

2.Capital surplus

Capital surplus
Additional paid-in capital arising from ordinary share Additional paid-in capital arising from bond conversion Difference between consideration and carrying amount of subsidiaries acquired or disposed Changes in ownership interest in subsidiaries Changes in equity of associates accounted for using equity method Others	December 31, 2021 $ 1,822,584 1,072,079 98,181 238,946 457 43,860 $ 3,276,107	December 31, 2020
		1,822,584 1,072,079 98,181 238,946 457 43,860
		3,276,107

3.Retained earnings

The Company’s article of incorporation stipulates that Company’s profit after tax should first be used to offset the prior years’ deficits, including adjustment of unappropriated retained earnings. Of the remaining balance, 10% is to be appropriated as legal reserve, then the special surplus reserve shall be distributed or reversed according to the Laws acts and regulations approved by the Competent authority. The remainder, together with any undistributed retained earnings, including amount of adjusted retained earnings, shall be distributed by the Board of Directors and submitted to the stockholders’ meeting for approval. The distribution of dividends, bonus, legal reserve and capital surplus, distributed by way of cash, shall be decided during the Board meeting, approved by more than half of the directors, with two thirds of directors in attendance; thereafter, to be submitted in the shareholders’ meeting of the Company.

The Company’s Articles also stipulate a dividend policy which is as follows: According to the present and future development plans, the investment environment, capital requirements, domestic and overseas competition, and the benefit of shareholders, the Company should distribute dividends and bonuses to shareholders at no less than 20% of the remaining profit (which is the current net profit less losses of previous years, less the adjustment to retained earnings, and less the appropriation of earnings to the legal reserve). Dividends could be distributed in cash or shares, where cash dividends should not be less than 20% of the total dividends distributed.

According to the amendment of the R.O.C. Company Act in January 2012, the Company must retain 10% of its after-tax annual earnings as legal reserve until such retention equals the amount of total capital. When a company incurs no loss, it may, pursuant to a resolution by a shareholders’ meeting, distribute its legal reserve by issuing new shares or by distributing cash, and only the portion of legal reserve which exceeds 25% of capital may be distributed.

The Company recognize and reverse special reserve according to the regulation of Financial Supervisory Commission.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, UNLESS OTHERWISE SPECIFIED)

During the Board meeting on March 12, 2021, and the Board meeting on March 20, 2020, the Board approved to distribute the 2020 and 2019 earnings, respectively, as follows:

Dividends distributed to common shareholders Cash	2020 Dividend per share ($) Amount $ 3.50 494,021	2019	2019
	Dividend per share ($) $ 3.50	Dividend per share ($) 3.30	Amount
			465,792

The amount of cash dividends on the appropriations of earnings for 2021, and the amount of shares dividends of appropriation of earnings for 2021, had been approved and proprosed, respectively during the Board meeting on March 11, 2022, as follows:

Dividends distributed to common shareholders: Cash Share Total Other equity interest after tax Balance as of January 1, 2021 Exchange differences on translation of foreign financial statement Exchange differences on associates accounted for using equity method Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income, associates accounted for using equity method Disposal of investments in equity instrunents designated at fair value through other comprehensive income Balance as of December 31, 2021 Balance as of January 1, 2020 Exchange differences on translation of foreign financial statement Exchange differences on associates accounted for using equity method Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income, associates accounted for using equity method Disposal of investments in equity instruments designated at fair value through other comprehensive income Balance as of December 31, 2020		2021 Dividend per share ($) Amount 3.50 494,021 0.50 70,575 $ 564,596 Exchange differences on translation of foreign financial statements Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income Total $ (199,369) 85,289 (114,080) (92,720) - (92,720) 31,647 - 31,647 - 6,761 6,761 - 22,201 22,201 - 4,091 4,091 $ (260,442) 118,342 (142,100) $ (107,903) 51,554 (56,349) (138,342) - (138,342) 46,876 - 46,876 - 4,723 4,723 - 29,313 29,313 - (301) (301) $ (199,369) 85,289 (114,080)
	$	Exchange differences on translation of foreign financial statements $ (199,369) (92,720) 31,647 - - - $ (260,442) $ (107,903) (138,342) 46,876 - - - $ (199,369)

4.Other equity interest after tax

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, UNLESS OTHERWISE SPECIFIED)

5.Non-controlling interests after tax

	For	the Years Ended	the Years Ended	December 31,
		2021		2020
Balance, beginning of year	$	1,988,807		1,685,571
Shares attributed to non-controlling interests
Net income		115,140		97,416
Exchange differences on translation of foreign financial
statements			(9,502)	(8,475)
Unrealized gains or losses from financial assets measured
at fair value through other comprehensive income			1,476	38,979
Gains or losses on remeasurements of defined benefit			1,358	(426)
plans
Shares issued for cash by subsidiaries / others		-		269,259
Cash dividends of subsidiaries distributed to non-
controlling interests		(89,956)		(90,111)
Non-controlling interests of acquiring subsidiaries		-		(3,406)
Balance, end of year	$	2,007,323		1,988,807

• (x) Earnings per share

For the years ended December 31, 2021 and 2020, the basic and diluted earnings per share were calculated as follows:

1.Basic earnings per share

Profit attributable to ordinary shareholders of the Company Weighted average number of ordinary shares (basic) 2.Diluted earnings per share Profit attributable to ordinary shareholders of the Company Weighted average number of ordinary shares (basic) Effect of employee stock compensation Weighted average number of ordinary shares (diluted)	For the Years Ended December 31,	For the Years Ended December 31,
	2021 2020 $ 607,149 571,670 141,149 140,652 For the Years Ended December 31,	2020 571,670
		140,652
		2020 571,670
		140,652 767
		141,419

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(ENGLISH TRANSLATION OF CONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUDED IN CHINESE) EXCELSIOR MEDICAL CO., LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, UNLESS OTHERWISE SPECIFIED)

• (y) Revenue from contracts with customers

• 1.Disaggregation of revenue

Primary geographical markets: Taiwan Hong Kong China Philippines Malaysia Major products: Product revenue Medical equipment and Supplies Medicines Aesthetic medical equipment and Supplies Household appliances Other Repair and maintenance revenue Other operating revenue	For the Years Ended December 31,	For the Years Ended December 31,
	2021 $ 6,273,083 46,695 - 148,917 104,457 $ 6,573,152 $ 3,947,348 720,218 790,900 160,457 74,440 380,318 499,471 $ 6,573,152	2020
		6,351,482 71,858 130 136,218 115,806
		6,675,494
		3,833,073 1,108,050 799,957 119,381 78,279 359,575 377,179
		6,675,494

2.Contract balances

Trade receivables Less: allowance for impairment Total Contract liabilities	December 31, 2021 $ 4,567,791 (75,475) $ 4,492,316 $ 379,224	December 31, 2020 4,024,373 (72,628) 3,951,745 311,978	January 1, 2020 4,024,373 (72,628) 3,951,745 320,562

For details on trade receivables and allowance for impairment, please refer to note (6)(d).

The amount of revenue recognized for the years ended December 31, 2021 and 2020 that was included in the contract liability balance at the beginning of the period were $229,005 thousand and $225,979 thousand, respectively.

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(ENGLISH TRANSLATION OF CONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUDED IN CHINESE) EXCELSIOR MEDICAL CO., LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, UNLESS OTHERWISE SPECIFIED)

(z) Employee compensation and directors’ remuneration

In accordance with the Articles of Incorporation, the Company should contribute no less than 1% of the profit as employee compensation and no higher than 5% as directors’ remuneration when there is profit for the year. However, if the Company has accumulated deficits, the profit should be reserved to offset the deficits. The amount of compensation for employees may be paid by shares or cash, and the recipients may include the employees of the Company’s affiliated companies. The amount of remuneration to directors may only be paid in cash. Both the employee compensation and directors’ remuneration should be approved by the Board of Directors and reported during the shareholders’ meeting.

For the years ended December 31, 2021 and 2020, the Company estimated its employee compensation amounting to $38,706 thousand and $36,379 thousand, and directors’ remuneration amounting to $19,353 thousand and $18,189 thousand, respectively. The estimated amounts mentioned above are calculated based on the net profit before tax, excluding the compensation to employees and remuneration to directors of each period, multiplied by the percentage specified in the Company’ s articles. These remunerations were expensed under operating costs or operating expenses during 2021 and 2020. Related information would be available at the Market Observation Post System website. The aforesaid amounts are identical to those stated in parent-company-only financial statements.

(aa) Non-operating income and expenses

1.Interest Income

The details of other income were as follows:

The details of other income were as follows:
Interest income from bank deposits Interest income from lease payment receivable Other interest income	For the Years Ended December 31,
	2021 $ 8,777 1,421 494 $ 10,692	2020
		22,052 1,158 45
		23,255

2.Other income

The details of other income were as follows:

Dividend income Other income	For the Years Ended December 31,	For the Years Ended December 31,
	2021 $ 19,320 5,620 $ 24,940	2020
		23,231 9,017
		32,248

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(ENGLISH TRANSLATION OF CONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUDED IN CHINESE) EXCELSIOR MEDICAL CO., LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, UNLESS OTHERWISE SPECIFIED)

3.Financial costs

The details of financial costs were as follows:

Interest expenses Bank borrowings Others	For the Years Ended December 31,	For the Years Ended December 31,
	2021 $ 3,651 5,110 $ 8,761	2020
		7,439 3,329
		10,768

4.Other gains and losses

The details of other gains and losses were as follows:

The details of other gains and losses were as follows:
		For the Years Ended	December	31,
		2021	2020
(Losses) gains on disposal of property, plant, and equipment	$	(5)		(100)
Foreign exchange (losses) gains		(948)		935
Net gains or losses on financial assets (liabilities) measured at fair
value through profit or loss		(6,640)		(200)
Others		25,999	12,915
	$	18,406	13,550

• (ab) Reclassification adjustments of components of other comprehensive income

The details of reclassification of other comprehensive income were as follows:

Equity instruments at fair value through other comprehensive income Net changes in fair value Net changes of fair value reclassified to retained earnings Net gains or losses recognized in other comprehensive income	For the Years Ended December 31,	For the Years Ended December 31,
	2021 $ 10,607 (4,091) $ 6,516	2020
		47,551 301
		47,852

(ac) Financial instruments

1. Credit risks

1) Credit risk exposure

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

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, UNLESS OTHERWISE SPECIFIED)

2) Concentration of credit risk

To minimize credit risks of receivables, the Group periodically evaluates the customers’ financial positions and the possibility of collecting trade receivables. And, the impairment losses are always within the management’s expectation. As of December 31, 2021 and 2020, 45% and 43%, respectively, of notes receivable and accounts receivable were two customers. Thus, credit risk is significantly centralized.

2.Liquidity risks

The following are the contractual maturities of financial liabilities of the Group, excluding the impact of netting arrangements:

December 31, 2021 Non-derivative financial liabilities Long-term and short-term borrowings Payables Lease liabilities Derivative financial liabilities Foreign exchange forward contracts: Outflows Inflows December 31, 2020 Non-derivative financial liabilities Long-term and short-term borrowings Payables Lease liabilities Derivative financial liabilities Foreign exchange forward contrac Outflows Inflows	Carrying amount	Contractual cash flow	On Demand or Less than 1 month	1-3 months	3-6 months	6-12 months	1-2 years	More than 2 years
	$ 479,966 3,668,755 282,026 76,813 (76,140) $ 4,431,420 $ 408,749 2,883,615 303,826 t 11,404 (11,358) $ 3,596,236	479,966 3,668,755 282,026 76,813 (76,140) 4,431,420 408,749 2,883,615 303,826 11,404 (11,358) 3,596,236	9,616 3,305,175 6,494 45,716 (45,187) 3,321,814 235,706 765,588 6,827 11,404 (11,358) 1,008,167	435,350 270,169 12,214 31,097 (30,953) 717,877 170,917 397,987 13,230 - - 582,134	35,000 38,980 18,369 - - 92,349 2,126 1,648,940 19,556 - - 1,670,622	- 54,421 35,166 - - 89,587 - 70,911 38,756 - - 109,667	- - 65,194 - - 65,194 - 189 67,863 - - 68,052	- 10 144,589 - -
								144,599
								- - 157,594 - -
								157,594

The Group is not expecting that the cash flows included in the maturity analysis could occur significantly earlier or at significantly different amounts.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, UNLESS OTHERWISE SPECIFIED)

3.Market risks

1) Currency risks

The Group’s significant exposure to foreign currency risk of financial assets and liabilities were as follows:

as follows:
Functional currency	Exchange rate	Currency	December 31, 2021
			Foreign currency (in thousands) Carrying amount (TWD) $ 4,086 113,101 1,816 56,877 8,420 233,066 4,931,441 115,889 30,650 133,115 116,273 412,602 25,902 164,614 285,780 68,730 295 9,239 1,769 48,966
		USD EUR USD KRW CNY HKD MYR JPY EUR USD

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, UNLESS OTHERWISE SPECIFIED)

Functional currency	Exchange rate	Currency	December 31, 2020
			Foreign currency (in thousands) Carrying amount (TWD) $ 4,320 123,033 372,050 102,797 9,377 267,257 6,453,000 170,458 29,897 130,872 108,875 399,999 22,077 149,897 494,625 136,665
		USD JPY USD KRW CNY HKD MYR JPY

Since the Group has many kinds of currency, the information on foreign exchange gains or losses on monetary items is disclosed by total amount. For the years ended December 31, 2021 and 2020, foreign exchange gains or losses amounted to gains of $948 thousand and losses of $935 thousand, respectively.

2) Sensitivity analysis

The Group’s foreign exchange exposure to foreign currency risk arises from foreign currency exchange fluctuations on cash and cash equivalents, accounts receivables and accounts payables. Assuming other variables remain the same, a 1% depreciation or appreciation of the TWD against foreign currency for the years ended December 31, 2021 and 2020 would have increased or decreased the net profit after tax by $2,331 thousand and $2,721 thousand, respectively. The analysis is performed on the same basis for both periods.

3) Interest rate risk

The Group’s financial assets and financial liabilities with interest rate exposure risk were noted in the liquidity risk section.

The following sensitivity analysis is based on the exposure to the interest rate risk of derivative and non-derivative financial instruments on the reporting date. Regarding liabilities with variable interest rates, the analysis is based on the assumption that the amount of liabilities outstanding at the reporting date was outstanding throughout the year.

If the interest rate increases or decreases by 1%, assuming that all other variables remain constant, the Group’s profit will decrease or increase by $20,310 thousand and $7,609 thousand for the years ended December 31, 2021 and 2020, respectively. The changes are mainly due to floating rate bank deposits and borrowings of the Group.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, UNLESS OTHERWISE SPECIFIED)

4) Other price risks

Assuming that the analysis is performed on the same basis for both periods, if equity prices had been 1% higher/lower, pre-tax other comprehensive income for the years ended December 31, 2021 and 2020 would have increased/decreased by $7,015 thousand and $7,354 thousand, respectively, as a result of the changes in fair values of financial assets at fair value through other comprehensive income.

4.Fair value information

1) The categories and fair values of financial instruments

The fair value of financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income is measured on a recurring basis. The carrying amount and fair value of the Group’s financial assets and liabilities, including the information on fair value hierarchy were as follows; however, except as described in the following paragraphs, for financial instruments not measured at fair value whose carrying amount is reasonably close to the fair value, and lease liabilities, disclosure of fair value information is not required:

Book value Financial assets at fair value through other comprehensive income Domestic listed shares $ 90,528 Foreign listed shares 152,234 Domestic unlisted shares 149,478 Foreign unlisted shares 309,301 Sub-total 701,541 Financial assets at amortized cost Cash and cash equivalents 3,072,264 Time deposits with original maturity of more than 3 months 682,603 Receivables 4,493,316 Other financial assets 243,907 Sub-total 8,492,090 Total $ 9,193,631		December 31, 2021	December 31, 2021	December 31, 2021
			Fair value
		Level 1 90,528 152,234 - - 242,762 - - - - - 242,762	Level 2 - - - - - - - - - - -	Level 3 - - 149,478 309,301 458,779 - - - - - 458,779	Total
					90,528 152,234 149,478 309,301
					701,541
					- - - -
					-
					701,541

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, UNLESS OTHERWISE SPECIFIED)

Book value Financial liabilities at fair value through profit or loss Derivative financial liabilities $ 673 Financial liabilities at amortized cost Short-term and long-term borrowings 479,966 Payables 3,668,755 Lease liabilities 282,026 Sub-total 4,430,747 Total $ 4,431,420 Book value Financial assets at fair value through profit or loss Derivative financial assets $ 166 Financial assets at fair value through other comprehensive income Domestic listed shares 103,792 Foreign listed shares 194,205 Domestic unlisted shares 129,680 Foreign unlisted shares 307,760 Sub-total 735,437 Financial assets at amortized cost Cash and cash equivalents 2,618,464 Time deposits with original maturity of more than 3 months 774,526 Receivables 3,951,745 Other financial assets 305,798 Sub-total 7,650,533 Total $ 8,386,136		December 31, 2021	December 31, 2021	December 31, 2021
			Fair value
		Level 1 Level 2 Level 3 - 673 - - - - - - - - - - - - - - 673 - December 31, 2020			Total
					673
					- - -
					-
					673
			Fair value
		Level 1 - 103,792 194,205 - - 297,997 - - - - - 297,997	Level 2 166 - - - - - - - - - - 166	Level 3 - - - 129,680 307,760 437,440 - - - - - 437,440	Total
					166
					103,792 194,205 129,680 307,760
					735,437
					- - - -
					-
					735,603

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, UNLESS OTHERWISE SPECIFIED)

Book value Financial liabilities at fair value through profit or loss Derivative financial liabilities $ 46 Financial liabilities at amortized cost Short-term and long-term borrowings 408,749 Payables 2,883,615 Lease liabilities 303,826 Sub-total 3,596,190 Total $ 3,596,236		December 31, 2020	December 31, 2020	December 31, 2020
			Fair value
		Level 1 - - - - - -	Level 2 46 - - - - 46	Level 3 - - - - - -	Total
					46
					- - -
					-
					46

• 2) Valuation techniques for financial instruments not measured at fair value

The Group’s valuation techniques and assumptions used for financial instruments not measured at fair value are as follows:

• A.Financial assets measured at amortized cost

If the quoted prices in active markets are available, the market price is established as the fair value. However, if quoted prices in active markets are not available, the estimated valuation or prices used by competitors are adopted.

• B.Financial assets and financial liabilities measured at amortized cost

If there is quoted price generated by transactions, the recent transaction price and quoted price data is used as the basis for fair value measurement. However, if no quoted prices are available, the discounted cash flows are used to estimated fair values.

3) Valuation techniques for financial instruments measured at fair value

The Group considers the financial status, operating analysis, most recent transaction price, nonactive market quoted price of related equity instrument, and active-market quoted price of similar instrument, and other information, in determining the input value of its investee companies. Periodically updates of information and input value for the valuation model and any necessary adjustments of fair value are required to ensure that the results of estimation are reasonable.

A.Non-derivative financial instruments

If quoted prices in active markets are available, the prices are established as fair values, such as public quoted company stock.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, UNLESS OTHERWISE SPECIFIED)

For the Group’s financial instruments that have no active markets, the measurement of fair values is listed as follows:

Equity instrument that has no quoted price: The method of comparable Listed Company approach is used to estimate the fair value.The main assumption for the method is to determine the fair value by using the transaction price paid for an identical or a similar instrument of an investee.

• B.Derivative financial instruments

Derivative financial instruments are measured by using the common valuation models such as discounted cash flow model and Black-Scholes model.

4) Changes in level 3 of the fair value

Balance as of January 1, 2021 Total gains and losses recognized In other comprehensive income Reclassification and effect of movements in exchange rates Disposal Balance as of December 31, 2021 Balance as of January 1, 2020 Total gains and losses recognized In other comprehensive income Reclassification and effect of movements in exchange rates Balance as of December 31, 2020	Fair value through other comprehensive income
	unquoted equity instruments
	$ 437,440 40,716 (18,781) (596) $ 458,779 $ 534,887 18,942 (116,389) $ 437,440

For the years ended December 31, 2021 and 2020, total gains and losses included in “other gains and losses”, and “unrealized gains and losses from financial assets at fair value through other comprehensive income” were as follows:

other comprehensive income” were as follows:
		For the Years Ended	December 31,
		2021	2020
Total gains and losses recognized
In other comprehensive income, and presented in “unrealized	$	40,716	18,942
gains and losses from financial assets at fair value through
other comprehensive income”

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, UNLESS OTHERWISE SPECIFIED)

• 5) Quantified information for significant unobservable inputs (level 3) used in fair value measurement

The Group’ s financial instruments that use Level 3 inputs to measure fair value include “ － financial assets at fair value through other comprehensive income equity investments without active market”.

Quantified information of significant unobservable inputs was as follows:

Item	Valuation techniques	Significant non- observable inputs The relationship between significant Non-observable inputs and fair value ‧ EV/EBITOA Value Multiple (8 on December 31, 2021) EV/Revenue Value Multiple (2.22 and 1.94~2.26 on December 31, 2021 and 2020) ‧ P/B Value Multiple (1.14~4.74 and 1.13~3.98 on December 31, 2021 and 2020) ‧ Discount due to Lack of Market liquidity (15.36%~30.00% and 21.53%~30.00% on December 31, 2021 amd 2020) ‧ The estimated fair value would increase (decrease) if the value multiple is higher (lower) and the marketability discount is lower (higher)
Financial assets at fair value through other comprehensive income - equity instruments investments without an active market	Comparable Listed Companies Method

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, UNLESS OTHERWISE SPECIFIED)

• 6) Sensitivity analysis for fair values of financial instruments using Level 3 Inputs

The Group’ s fair value measurement on financial instruments is reasonable. However, the measurement would differ if different valuation models or valuation parameters are used. For financial instruments using level 3 inputs, if the valuation parameters are changed, the impact on net income or loss and other comprehensive income or loss will be as follows:

December 31, 2021 Financial assets at fair value through other comprehensive income Equity instruments without an active market Equity instruments without an active market December 31, 2020 Financial assets at fair value through other comprehensive income Equity instruments without an active market Equity instruments without an active market	Input Value Multiple Discount due to Lack of Market liquidity Value Multiple Discount due to Lack of Market liquidity	Variation	Impact on Fair Value Change on Other Comprehensive income or loss Favorable Change Unfavorable Change $ 24,204 (24,204) 32,288 (32,288) $ 56,492 (56,492) $ 22,973 (22,973) 30,951 (30,951) $ 53,924 (53,924)
			Favorable Change $ 24,204 32,288 $ 56,492 $ 22,973 30,951 $ 53,924
		5% 5% 5% 5%

(ad) Financial risk management

1.Overview

The Group has exposures to the following risks from its financial instruments:

• 1) credit risk

• 2) liquidity risk

3) market risk

The following likewise discusses the Group’s objectives, policies and processes for measuring and managing the above mentioned risks. For more disclosures about the quantitative effects of these risks exposures, please refer to the respective notes in the accompanying consolidated financial statements.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, UNLESS OTHERWISE SPECIFIED)

2.Risk management framework

The Board of Directors has overall responsibility for the establishment and oversight of the Group’ s risk management framework. The general manager, which reports to the Board of Directors, is responsible for the development of the Group-Wide risk management policy and related systems and reports regularly to the Board of Directors.

The Group’s risk management policies are established to identify and analyze the risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and changes in operation of the Group. The Group, through its training and management standards and procedures, aim to develop a disciplined and constructive control environment, in which all employees understand their roles and obligations.

The Group’s Board of Directors oversees how management monitors compliance with the Group’s risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Group. The Group’s Board of Directors is assisted in its oversight role by internal audit. The internal audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Board of Directors.

3.Credit risk

Credit risk refers to the risk that a counterparty would default on its contractual obligations resulting in financial loss to the Group. As at the end of the reporting period, the Group’ s maximum exposure to credit risk which will cause a financial loss to the Group due to failure of counterparties to discharge an obligation and financial guarantees provided by the Group could arise from:

• 1) The carrying amount of the respective recognized financial assets as stated in the consolidated balance sheets; and

• 2) The amount of contingent liabilities in relation to financial guarantee issued by the Group.

In order to minimize credit risk, the management of the Group has delegated a team responsible for determination of credit limits, credit approvals and other monitoring procedures to ensure that follow-up action is taken to recover overdue debts. In addition, the Group reviews the recoverable amount of each individual trade debt at the end of the reporting period to ensure that adequate impairment losses are made for irrecoverable amounts.

Please refer to Note (13)(a) for the information of guarantees and endorsements for subsidiaries as of December 31, 2021.

4.Liquidity risk

Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Group’s approach to managing liquidity is to ensure, as far as possible, that it always has sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, UNLESS OTHERWISE SPECIFIED)

5.Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices, and credit spreads will affect the Group’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return on risk.

The Group buys and sells derivatives, and also incurs financial liabilities, in order to manage market risks. All such transactions are carried out within the guidelines set by the Board of Directors and shareholder’ s meeting with the supervision of the internal audit department. Information concerning all market risks of the Group was as follows:

1) Currency risk

The Group had foreign currency sales and purchases, which exposed the Group to foreign currency risk. Exchange rate exposures were managed within approved policy parameters utilizing forward foreign exchange contracts.

• 2) Interest rate risk

The Group was exposed to interest rate risk because entities in the Group borrowed funds at both fixed and floating interest rates. The Group pays attention to changes in market interest rates in order to make plans to manage interest rate risk.

3) Other price risk

The Group was exposed to price risk through its investments in listed securities. The Group has appointed a special team to monitor and evaluate the price risk.

(ae) Capital Management

The Group’ s objectives for managing capital to safeguard the capacity to continue to operate, to continue to provide a return on shareholders, to maintain the interest of other related parties, and to maintain an optimal capital structure to reduce the cost of capital.

In order to maintain or adjust the capital structure, the Group may adjust the dividend payment to the shareholders, reduce the capital for redistribution to shareholders, issue new shares, or sell assets to settle any liabilities.

The Group use the debt-to-equity ratio to manage capital. This ratio is the total net debt divided by the total capital. The net debt from the balance sheet is derived from the total liabilities less cash and cash equivalents. The total capital and equity include share capital, capital surplus, retained earnings, and other equity plus net debt.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, UNLESS OTHERWISE SPECIFIED)

• (af) Investing and financing activities not affecting current cash flow

The Group’s investing and financing activities which did not affect the current cash flow in the year ended December 31, 2021 and 2020, were as follows:

For acquisitions of right-of-use assets by leasing, please refer to note 6(k).

Reconciliation of liabilities arising from financing activities were as follows:

Short-term and long-term borrowings Lease liabilities Total liabilities from financing activities Short-term borrowings Lease liabilities Total liabilities from financing activities	January 1, 2021 $ 408,749 303,826 $ 712,575 January 1, 2020 $ 1,221,666 241,209 $ 1,462,875	Cash flows 71,413 (75,635) (4,222) Cash flows (812,917) (75,599) (888,516)	Non-cash changes Acquisition Foreign exchange movement Others - (196) - 73,608 (815) (18,958) 73,608 (1,011) (18,958) Non-cash changes Acquisition Foreign exchange movement Others - - - 159,080 (72) (20,792) 159,080 (72) (20,792)	Non-cash changes Acquisition Foreign exchange movement Others - (196) - 73,608 (815) (18,958) 73,608 (1,011) (18,958) Non-cash changes Acquisition Foreign exchange movement Others - - - 159,080 (72) (20,792) 159,080 (72) (20,792)	December 31, 2021
					479,966 282,026
					761,992
					December 31, 2020
			Acquisition - 159,080 159,080	Foreign exchange movement - (72) (72)
					408,749 303,826
					712,575

(7) Related Party Transactions

• (a) Names and relationship with related parties

The followings are entities that have had transactions with related party during the periods covered in the consolidated financial statements.

the consolidated financial statements.
Name of related party	Relationship with the Group
Excelsior Investment Co., Ltd.	Entities with significant influence over the Group
Excelsior Group Holdings Co., Ltd.	〞
Jiate Excesior Co., Ltd. (Jiate)	Associate
Bestchain Healthtaiwan Co., Ltd. (Bestchain)	〞
Visionfront Corporation	〞
Excelsior Renal Service Co., Limited (ERS)	〞
Asia Best Healthcare Co., Limited (ABH)	〞
Medifly Co., Ltd.	〞
Asia Best Life Care Technology Co., Ltd.	〞
Excelsior Long Term Care Corporation Entity	〞

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, UNLESS OTHERWISE SPECIFIED)

Name of related party	Relationship with the Group
CYJ INTERNATIONAL COMPANY	Associate
LIMITED (CYJ)
Medytox Taiwan Inc.	〞
Arich Best Chain Co., Ltd.(Arich Best Chain)	〞
Exceed Healthcare Co., Ltd.	〞
SciVision Biotech Inc.	Other related parties
Excelsior Health Foundation	〞
Caregen Co., Ltd.	〞
RENAL HEALTHCARE SDN. BHD.	〞
Triple AI Technology Co., Ltd.	Other related parties before May 31, 2021
Arcos Bio-Tech Corporation	Other related parties before October 19, 2020

• (b) Significant transactions with related parties

• 1.Operating revenue

• 1) Sales revenue

The amounts of significant sales by the Group to related parties were as follows:

Associates - Bestchain Associates - ERS Associates - Others Other related parties	For the Years Ended December 31,	For the Years Ended December 31,
	2021 $ 1,948,018 777,052 24,830 - $ 2,749,900	2020
		1,789,712 762,596 23,688 373
		2,576,369

The aforementioned transactions, except the sales to Bestchain and ERS that were priced on a cost-plus basis, were conducted on normal commercial terms.

• 2) Repair and maintenance revenue

The amounts of significant repair and maintenance revenue by the Group to related parties were as follows:

Associates - ERS Associates	For the Years Ended December 31,	For the Years Ended December 31,
	2021 $ 89,352 1,539 $ 90,891	2020
		85,521 2,589
		88,110

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, UNLESS OTHERWISE SPECIFIED)

3) Other operating revenue-rental revenue

The amounts of significant other operating revenue-rental revenue by the Group to related parties were as follows:

Entities with significant influence over the Group Associates -ABH Associates -ERS Associates - Others Other related parties	For the Years Ended December 31,	For the Years Ended December 31,
	2021 $ 72 13,003 4,526 1,102 40 $ 18,743	2020
		72 12,720 4,704 950 96
		18,542

4) Other operating revenue-service revenue

The amounts of significant other operating revenue-service revenue by the Group to related parties were as follows:

Associates Other related parties	For the Years Ended December 31,	For the Years Ended December 31,
	2021 $ 12,801 132 $ 12,933	2020
		13,041 166
		13,207

2.Purchases from related parties

The amounts of significant purchases by the Group from related parties were as follows:

Associates Other related parties	For the Years Ended December 31,	For the Years Ended December 31,
	2021 $ 33,580 86,990 $ 120,570	2020
		9,059 108,825
		117,884

There is no significant difference in terms and conditions of the purchases from associates between those provided to the third parties.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, UNLESS OTHERWISE SPECIFIED)

3.Receivables from related parties

Receivables from related parties were as follows:

Accounted for as	Category of related party	December 31, 2021 $ 51 793 562,895 161,552 9,030 2,566 2 $ 736,889	December 31, 2020
Notes receivable Other notes receivable Accounts receivable Accounts receivable Accounts receivable Other receivables Other receivables	Associates Associates Associates - Bestchain Associates - ERS Associates - Others Associates Other related parties		34 362 455,825 159,022 8,970 2,682 8
			626,903

4.Payables to related parties

Payables to related parties were as follows:

Accounted for as	Category of related party	December 31, 2021 $ 20,904 81 12,643 $ 33,628	December 31, 2020
Accounts payable Accounts payable Other payables	Associates Other related parties Associates		4,674 10,968 10,460
			26,102

5.Property transactions

1) Disposals of property, plant and equipment

The disposals of property, plant and equipment to related parties were summarized as follows:

Category of related party	For the Years Ended December 31,	For the Years Ended December 31,	For the Years Ended December 31,
	2021 Disposal price Gains (losses) from disposal $ 95 95	2020
	Disposal price $ 95	Disposal price 95	Gains (losses) from disposal
Associates			95

6.Guarantee

As of December 31, 2021 and 2020, the Group provided associates guarantees for loans. The credit limit of the guarantees were $800,000 thousand and $661,200 thousand, respectively, and the amount utilized were $0 thousand and $76,000 thousand, respectively.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, UNLESS OTHERWISE SPECIFIED)

7.Lease

• 1) In 2018, the Group rent the office with Excelsior Renal Service Co., Limited. A four-year lease contract was signed, in which the rental fee is determined based on nearby office rental rates. The total value of the contract was $480 thousand. For the years ended December 31, 2021 and 2020, the Group recognized the amount of $1 thousand and $2 thousand as interest expense. As of December 31, 2021 and 2020, the balance of lease liabilities amounted to $20 thousand and $139 thousand, respectively.

• 2) In 2019, the Group rent the staff dormitory with RENAL HEALTHCARE SDN. BHD. A threeyear lease contract was signed, in which the rental fee is determined based on nearby office rental rates. The total value of the contract was $484 thousand. For the years ended December 31, 2021 and 2020 the Group recognized the amount of $4 thousands and $12 thousand as interest expense. As of December 31, 2021 and 2020, the balance of lease liabilities amounted to $0 thousand and $158 thousand, respectively.

8.Others

Associates and Other related parties Other revenue-rental revenue Other revenue Cost of goods sold Repair and maintenance costs Fright and warehousing expense Rent expense Other expense	For the Years Ended December 31, 2021 2020 $ 54 - 3,394 4,717 (288) (381) (3,392) - (49,182) (48,318) (830) (1,043) (25,761) (19,109) $ (76,005) (64,134)
	2021 $ 54 3,394 (288) (3,392) (49,182) (830) (25,761) $ (76,005)

The aforementioned rentals collected or paid quarterly or monthly were based on prevailing market rates.

As of December 31, 2021 and 2020, the Group had received collections in advance from associates for $220 thousand and $1,000 thousand, respectively.

The outstanding receivables from related parties are unsecured. For the years ended December 31, 2021 and 2020, no impairment loss was recognized for receivables from related parties.

The outstanding payables to related parties are unsecured.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, UNLESS OTHERWISE SPECIFIED)

• (d) Key management personnel compensation

Key management personnel compensation comprised:

Key management personnel compensation comprised:
Short-term employee benefits Post-employment benefit Share-based payment	For the Years Ended December 31,
	2021 $ 74,255 1,425 - $ 75,680	2020
		80,052 1,462 978
		82,492

(8) Pledged Assets

The carrying amount of pledged assets were as follows:

Pledged assets	Object	December 31, 2021 $ 53,702 200,171 89,859 1,002,235 $ 1,345,967	December 31, 2020
Current deposits and time deposits Notes receivableand other notes receivable Property, plant and equipment Investment property	Bank loans, bank guarantee and credit card document receiving service guarantee Guarantee of short-term loan or strengthening credit Bank loans 〞		181,570 173,612 97,822 929,196
			1,382,200

(9) Significant Commitments and Contingencies

(a) Unrecognized contractual commitments

1. As of December 31, 2021 and 2020, the unused letters of credit were $0 thousand and $82,607 thousand, respectively. The guarantee letters issued by banks for sales contract guarantee and purchase bid of hospital were $544,488 thousand and $544,488 thousand, respectively.

2. In January 2007, the Company sold 51% equity interest in Jiate Excelsior to a Hong Kong-based company and entered into a joint venture agreement with the Hong Kong-based company. Pursuant to the agreement, the parties had established a joint venture, Excelsior Renal Service, in Hong Kong, of which 49% is held by Excelsior Healthcare, a subsidiary of the Company, and 51% by the Hong Kong-based company. Excelsior Renal Service had established a branch in Taiwan to engage in the sale and lease of medical supplies and equipment. Pursuant to the agreement, the Hong Kong-based company shall also have a right to purchase all of the Company’ s equity interest in Jiate Excelsior and all of Excelsior Healthcare’ s equity interest in Excelsior Renal Service from the fifth anniversary of the date of the agreement at a price to be negotiated by the parties.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, UNLESS OTHERWISE SPECIFIED)

1. In January 2007, the Company entered into a supply agreement with the Hong Kong-based company mentioned in 2. above. Pursuant to the agreement, the Company shall purchase certain products from the Hong Kong-based company in agreed quantities at agreed prices annually. If the Company fails to purchase the agreed quantities in a year, the Company shall make an additional payment at specified percentages of the values of the under-purchased products.

2. In September 2010, the Company entered into a license agreement with 3-D Matrix, Ltd. (“3DM”) for ten years. The agreement may be automatically extended for two years unless otherwise notified by either party at least six month prior to the expiration date of the agreement and may be extended in the same manner thereafter. Pursuant to the agreement, 3DM shall grant the Company an exclusive right to develop, sell and manufacture the products mentioned in the agreement in Taiwan, and the Company shall pay a royalty at an agreed amount and shall pay agreed amounts for purchases of inventories within agreed periods after the approvals relating to the products are obtained from the health authorities.

(10) Losses due to major disasters : None.

(11) Subsequent events : None.

(12) Other

• (a) The employee benefits, depreciation, depletion and amortization expenses categorized by function were as follows:

By function By item	For the Years Ended December 31, 2021	For the Years Ended December 31, 2021	For the Years Ended December 31, 2021	For the Years Ended December 31, 2020	For the Years Ended December 31, 2020	For the Years Ended December 31, 2020
	Operating cost	Operating expense	Total	Operating cost	Operating expense	Total
Employee benefits Salary Labor and health insurance Pension Others Depreciation Amortization	184,320 17,246 9,579 11,380 144,881 1,178	352,519 29,296 18,328 17,992 53,752 3,143	536,839 46,542 27,907 29,372 198,633 4,321	173,453 14,585 8,202 9,845 111,561 807	365,401 26,373 17,428 13,450 51,130 3,969	538,854 40,958 25,630 23,295 162,691 4,776

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, UNLESS OTHERWISE SPECIFIED)

(13) Other disclosures

• (a) Information on significant transactions

The following is the information on significant transactions required by the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” for the Group for the year ended December 31, 2021:

1. Fund financing to other parties:

	1. Fund financing to other parties:	1. Fund financing to other parties:	1. Fund financing to other parties:	1. Fund financing to other parties:	1. Fund financing to other parties:	1. Fund financing to other parties:	1. Fund financing to other parties:	1. Fund financing to other parties:	1. Fund financing to other parties:	1. Fund financing to other parties:	1. Fund financing to other parties:	1. Fund financing to other parties:
	(Expressed in th												ousands of New Taiwan dollars)
Num- ber	Name of lender	Name of borrower	Account name	Related party	Highest balance of financing to other party during the period	Ending balance	Actual usage amount during the period	Range of interest rates during the period	Purposes of fund financing for the borrower (Note 2)	Transaction amount for business between two parties	Reasons for short -term financing	Allowance for bad debt	Collateral		Individual funding loan limits	Maximum limitation on fund financing
													Name	Value
1 S I	inoExcelsior nvestment Inc.	Excelsior Healthcare Co., Limited	Other receivables- Related parties	Yes	2,085	2,085	-	1.00%	2	-	Operating Capital	-	None	-	53,246	53,246

Note 1: The numbers denote the following:

1. 0 is issuer.

2. Investees are listed by names and numbered starting with 1.

Note 2: Purpose of fund financing for the borrower:

1. For those companies with business contact, please fill in 1.

2. For those companies with short-term financing needs, please fill in 2.

3. Note 3: Maximum limitation on fund financing:

4. The lender's each and total fund financial amount cannot exceed 40% of its net asset value that from the most recent reviewed report.

Note 4: The aforementioned inter-company transactions have been eliminated in the consolidated financial statements.

1. Guarantees and endorsements for other parties:

(Expressed in thousands of New Taiwan dollars)

No.	Endorsement/ guarantee provider	Counter	-party	Limitation on endorsement /guarantee amount provided to each guaranteedparty	Maximum balance for theyear	Ending balance	Amount actually drawn	Amount of endorsement/ guarantee collateralized by properties	Ratio of accumulated endorsement/guarantee to net equity per latest financial statements	Maximum endorsement guarantee amount allowance (Note 9)	Guarantee provided by parent company	Guarantee provided by a subsidiary	Guarantee provided to subsidiaries in Mainland China
		Name	Nature of relationship (Note 2)
0 0 0 0 0 0	The Company 〃 〃 〃 〃 〃	Excelsior Medical (HK) Co., Limited (Note 4) Excelsior Investment (Malaysia) Co., Ltd. (Note 4) Excelsior Asset Management CO., Ltd. (Note 4) EG Healthcare, Inc. (Note 4) Bestsmile Co., Ltd. (Note 4) Medi-Chem System Sdn. Bhd. (Note 4)	2 2 2 2 2 2	1,547,678 1,547,678 1,547,678 1,547,678 1,547,678 1,547,678	770,280 58,831 990,000 29,305 20,000 14,268	770,280 31,140 990,000 26,765 20,000 13,840	- - 75,350 9,635 10,000 -	- - - - - -	% 9.95 % 0.40 % 12.79 % 0.35 % 0.26 % 0.18	7,738,389 7,738,389 7,738,389 7,738,389 7,738,389 7,738,389	Y Y Y Y Y Y	N N N N N N	N N N N N N

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, UNLESS OTHERWISE SPECIFIED)

==> picture [466 x 195] intentionally omitted <==

----- Start of picture text -----

Counter-party
Limitation on Amount of Maximum
endorsement endorsement/ Ratio of accumulated endorsement Guarantee
Endorsement/ Nature of /guarantee amount guarantee endorsement/guarantee guarantee amount Guarantee provided to
guarantee relationship provided to each Maximum balance Amount actually collateralized by to net equity per latest allowance provided by parent Guarantee provided subsidiaries in
No. provider Name (Note 2) guaranteed party for the year Ending balance drawn properties financial statements (Note 9) company by a subsidiary Mainland China
0 The Company Renal Laboratories 2 1,547,678 71,338 69,200 - - 0.89 % 7,738,389 Y N N
Sdn. Bhd. (Note 4)
0 〃 Excelsior Renal 1 762,596 - - - - - % 7,738,389 N N N
Service Co., Limited
(Note 3)
0 〃 Bestchain 1 1,788,061 800,000 800,000 - - 10.34 % 7,738,389 N N N
Healthtaiwan Co., Ltd.
(Note 3)
1 Dynamic Medical Dynamic Medical 2 256,808 54,682 - - - - % 642,021 Y N N
Technologies Inc. Technologies (Hong
Kong) Ltd. (Note 6)
2 Excelsior Beauty Dynamic Medical 3 71,307 500 100 - - 0.03 % 178,268 N Y N
Co., Ltd. Technologies Inc.
(Note 7)
3 Arich Enterprise Taiwan Shionogi Inc. 1 169,779 - - - - - % 908,994 N N N
Co., Ltd. (Note 5)
Note 1: the description of number column:
1. 0 is issuer.
----- End of picture text -----

1. Investees are listed by name and numbered starting with 1.

2. Note 2: Relationship with the Company

3. The companies with which it has business relations.

4. Subsidiaries in which the Company directly or indirectly holds more than 50% of its total outstanding common shares.

5. The parent company which directly or indirectly holds more than 50% of its voting rights.

6. Subsidiaries in which the Company directly or indirectly holds more than 90% of its voting rights.

7. Companies in the same type of business and providing mutual endorsements/ guarantees in favor of each other in accordance with the contractual obligations in order to fulfill the needs of the construction project.

8. Shareholders making endorsements and/or guarantees for their mutually invested company in proportion to their shareholding percentage.

9. Companies in the same type of business providing guarantees of pre-sale contracts according to the regulation.

10. Note 3:For guarantee and endorsement to those companies with business contact, the maximum amount cannot exceed the trading amount between two parties for the current year.

11. Note 4:The total amount of guarantee and endorsement cannot exceed 20% of the Company’s net asset value from the most recent audited or reviewed report.

12. Note 5:For guarantee and endorsement from Arich to the Company with business contact, the maximum amount cannot exceed the trading amount between two parties for the most recent 24 months.

13. Note 6:The total amount of guarantee and endorsement cannot exceed 20% of Dynamic’s net asset value from the most recent audited or reviewed report.

14. Note 7:The total amount of guarantee and endorsement cannot exceed 20% of Excelsior Beauty Co., Ltd.’s net asset value from the most recent audited or reviewed report.

15. Note 8:The total amount of guarantee and endorsement cannot exceed the Company’s net asset value from the most recent audited or review report: Dynamic, Excelsior Beauty and Arich cannot exceed 50% of their net asset value from the most recent audited or reviewed report.

Note 9: The aforementioned inter-company transactions have been eliminated in the consolidated financial statements.

1. Information regarding securities held at balance sheet date (excluding investment in subsidiaries, associates and joint ventures):

(Expressed in thousands of New Taiwan dollars)

Name of holder	Category and name of security	Relationship with the Company	Account title		Ending balance	Ending balance		Peak Holding Percentage	Notes
				Number of shares	Book value	Percentage of shares	Market value
The Company 〞 〞 〞 〞 〞 〞	Stock SciVision Biotech Inc. 3-D Matrix, Ltd. Caregen Co., Ltd Gie Cheng Co., Ltd. Missioncare Co., Ltd. Rui Guang Healthcare Co., Ltd. Sunder Biomedical Tech. Co., Ltd. Linkon International Golf & Country Club	- - - - - - -	Fair value through other comprehensive income 〞 〞 〞 〞 〞 〞	534,525 288,400 39,657 3,795,000 1,580,526 2,423,951 2,279,578 1	26,512 36,345 61,974 34,497 21,068 27,027 54,756 9,300	% 0.81 % 0.53 % 0.37 % 17.25 % 1.09 % 7.15 % 3.80 % 0.10	26,512 36,345 61,974 34,497 21,068 27,027 54,756 9,300	% 0.81 % 0.71 % 0.52 % 17.25 % 1.09 % 7.15 % 3.80 % 0.10

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, UNLESS OTHERWISE SPECIFIED)

Name of holder	Category and name of security	Relationship with the Company	Account title	Ending balance	Ending balance	Ending balance	Ending balance	Peak Holding Percentage	Notes
				Number of shares	Book value	Percentage of shares	Market value
Excelsior Healthcare Co.Limited EG Healthcare, Inc. Dynamic Medical Technologies Inc. 〞 Dynamic Medical Technologies (Hong Kong) Ltd. Excelsior Beauty Co., Ltd. Arich Enterprise Co., Ltd.	Chai Tai Bo Ai Investment Limited The Orchard Golf & Country Club SciVision Biotech Inc. Caregen Co., Ltd. Stock Warrant Viveve Medical Inc. Stock Join Fun Co., Ltd. National Pharmaceutical Logistics Corp., Ltd.	- - Other related parties 〞 - - Board director of investee	Fair value through other comprehensive income 〞 〞 〞 Financial assets at fair value through profit or loss Fair value through other comprehensive income 〞	10,000 1 1,290,649 34,500 250 263,340 -	8,086 368 64,016 53,915 - 2,830 300,847	8.00 % - % 1.95 % 0.32 % - 19.00 % 17.65	8,086 368 64,016 53,915 - 2,830 300,847	8.00 % - % 1.95 % 0.32 % - 19.00 % 17.65

Note : Act as limited company, no outstanding share.

1. Accumulated buying/selling of the same marketable securities for which the amount reaches $300 million or 20% or more of paid-in capital: None.

2. Acquisition of real estate for which the amount reaches $300 million or 20% or more of paid-in capital : None.

3. Disposition of real estate for which the amount reaches $300 million or 20% or more of paid-in capital: None.

4. Buying/selling products with the amount reaches $100 million or 20% or more of paid-in capital:

(Expressed in thousands of New Taiwan dollars)

Name of company	Name of Counter-party	Relationship		Transaction details	Transaction details	Transaction details	Transactio different	ns with terms from others	Account/note receivable (payable)	Account/note receivable (payable)	Notes
			Purchase/ Sale	Amount	Percentage of total purchases/ sales	Credit period	Unit price	Credit period	Balance	Percentage of total accounts/ notes receivable (payable)
The Company 〞	Excelsior Renal Service Co., Limited Bestchain Healthtaiwan Co., Ltd.	Associates 〞	Sales 〞	(776,954) (1,946,276)	% (17.77) % (44.50)	Net 30-60 days Net 30-90 days	- -		161,552 562,276	% 13.72 % 47.77	Note 1 Note 1

Note 1:The unit price of cost of goods sold for the Company is based on cost-plus pricing approach by product that is lower than average; because, the expense of goods sold for related parties is lower than average price as well.

Note 2:The aforementioned inter-company transactions have been eliminated in the consolidated financial statements.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, UNLESS OTHERWISE SPECIFIED)

1. Accounts receivable from related parties for which the amount reaches $100 million or 20% or more of paid-in capital:

(Expressed in thousands of New Taiwan dollars)

Name of related party	Counter-party	Relationship	Balance of receivables from related party	Turnover rate	Past-due receivables from related party	Past-due receivables from related party	Subsequently received amount of receivables from related party	Allowances for bad debts
					Amount	Action taken
The Company 〞	Excelsior Renal Service Co., Limited Bestchain Healthtaiwan Co., Ltd.	Associates 〞	161,552 562,276	4.85 3.83	- -	- -	151,090 181,917	- -

Note: The aforementioned inter-company transactions have been eliminated in the consolidated financial statements.

1. Derivative transactions:

Please refer to Note (6)(b) and (6)(ac) for related information.

1. Business relationships and significant inter-company transactions:

Number	Name of the company	Name of the counter-party	Existing relationship with the counter-party		Transaction	details during 2021
				Account name	Amount	Terms of trading	Percentage of the total consolidated revenue or total assets
0 〞 1 〞	The Company 〞 Dynamic Medical Technologies Inc.	EG Healthcare Inc. 〞 Dynamic Medical Technologies (Hong Kong) Ltd.	1 1 3 3	Account Receivable Sales Account Receivable Sales	28,016 54,400 1,674 44,781	The same as the term for other general trading partners Usual terms and conditions The same as the term for other general trading partners Usual terms and conditions	% 0.19 % 0.83 % 0.01 % 0.68

Note 1:The numbers denote the following:

1. 0 represents the Company.

2. Subsidiaries are listed by names and numbered starting with 1.

Note 2:Relationship with the listed companies:

1. The Company to subsidiary

2. Subsidiary to the Company

3. Subsidiary to subsidiary

Note 3:The transaction amount is calculated as a proportion of the consolidated revenue or assets. If categorized as an asset or liability, the calculation is compared with the consolidated assets; if categorized as income or loss, the calculation is compared with the consolidated income or loss.

Note 4:The aforementioned inter-company transactions have been eliminated in the consolidated financial statements.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, UNLESS OTHERWISE SPECIFIED)

(b) Information on investees:

For the year ended December 31, 2021, the following is the information of investees (excluding investees in Mainland china):

(Amounts Expressed in Thousands of New Taiwan Dollars, Except for Share Data)

Name of the investor	Name of investee	Location	Major operations	Initial invest	ment amount	Ending balan	Ending balan	ce	Peak Holding Percentage	Net income (loss) of the investee	Investment income (losses)	Notes
				Ending balance	Beginning balance	Shares	Ratio of shares	Book value
The Company 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞	Jiate Excesior Co., Ltd. Bestchain Healthtaiwan Co., Ltd. Arich Enterprise Co., Ltd. Dynamic Medical Technologies Inc. Excelsior Healthcare Co., Limited Bestsmile Co., Ltd. Visionfront Corporation Sunrise Health Care Company Excelsior Medical (HK) Co., Limited Excelsior Beauty Co., Ltd. Excelsior Asset Management Co., Ltd. Medifly Co., Ltd.	New Taipei City New Taipei City New Taipei City New Taipei City British Virgin Islands New Taipei City New Taipei City New Taipei City Hong Kong New Taipei City New Taipei City Taichung	Sale, maintenance and lease of medical equipment, and medical management consultancy service Sale of medical equipment and medicines, interagation of warehousing and information Sale of medicines, and logistics service Sale, maintenance and lease of laser medical equipment for beauty treatment, and sale of consumables of beauty treatment and cosmetic products Investment business Sale of medical equipment, and medical management consultancy service Sale of medical equipment, and medical management consultancy service Sale of medical equipment, and medical management consultancy service Investment business Sale of aesthetic medical and cosmetic health-care products Sales of medical equipment, precision instrument and real estate Sale of medical equipment and medicines	5,279 277,647 380,856 180,300 1,244,687 32,093 44,069 18,806 1,588,746 91,984 780,525 31,899	5,279 277,647 380,856 180,300 1,244,687 32,093 44,069 18,806 1,588,746 91,984 780,525 31,899	1,607,200 45,265,215 29,829,742 11,550,425 39,411,623 1,150,874 2,434,870 2,085,547 53,154,741 11,534,804 80,825,500 3,615,976	% 49.00 % 44.68 % 40.00 % 38.50 % 100.00 % 98.02 % 44.47 % 23.97 % 64.36 % 41.02 % 100.00 % 28.66	19,853 640,758 725,159 507,317 1,753,523 1,971 22,870 28,300 1,608,764 146,523 622,866 89,847	% 49.00 % 44.68 % 40.00 % 38.50 % 100.00 % 98.02 % 44.47 % 23.97 % 64.36 % 41.02 % 100.00 % 28.66	(402) 182,840 55,305 123,206 130,678 (3,688) (875) 988 55,904 30,874 16,297 50,414	(197) 81,616 22,043 47,224 130,678 (3,614) (389) 237 35,980 12,762 16,297 14,448	Associates Associates (Note 1) Subsidiary (Notes 2、4) Subsidiary (Note 4) Subsidiary (Notes 4) Subsidiary (Note 4) Associates Associates Subsidiary (Note 4) Sub- subsidiary (Note 4) Subsidiary (Note 4) Associates

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, UNLESS OTHERWISE SPECIFIED)

Name of the investor	Name of investee	Location	Major operations	Initial invest	ment amount	Ending balan	Ending balan	ce	Peak Holding Percentage	Net income (loss) of the investee	Investment income (losses)	Notes
				Ending balance	Beginning balance	Shares	Ratio of shares	Book value
Excelsior Healthcare Co., Limited 〞 〞 〞 Dynamic Medical Technologies Inc. 〞 〞 Dynamic Medical Technologies (Hong Kong) Ltd. Excelsior Beauty Co., Ltd. Excelsior Medical (HK) Co., Limited Excelsior Investment (Malaysia) Co., Ltd 〞 MEDI- CHEM SYSTEMS SDN. BHD.	EG Healthcare, Inc. Excelsior Renal Service Co., Limited Excelsior Medical (HK) Co., Limited Excelsior Investment (Malaysia) Co., Ltd Dynamic Medical Technologies (Hong Kong) Ltd. Excelsior Beauty Co., Ltd. Medytox Taiwan Inc. CYJ INTERNATIONAL COMPANY LIMITED CYJ International Taiwan Inc. Asia Best Healthcare Co., Ltd. RENAL LABORATORIES SDN. BHD. MEDI-CHEM SYSTEMS SDN. BHD. RENAL MANAGEMENT SDN. BHD.	Philippines Hong Kong Hong Kong British Virgin Islands Hong Kong New Taipei City New Taipei City Hong Kong New Taipei City Cayman Islands Malaysia Malaysia Malaysia	Sale and lease of medical equipment, and medical management consultancy service Sale, maintenance and lease of medical equipment, and medical management consultancy service Investment business Investment business Sale and maintenance of medical equipment Sale of aesthetic medical and cosmetic health-care products Sale of cosmetic health-care products Sale and treatment of hair regrowth and conditioning Sale and treatment of hair protecting and conditioning Long-term care business Manufacture of medical equipment Sale of medical equipment Lease business	19,256 312,505 862,529 192,814 382,278 138,745 18,000 66,547 97,920 1,395,079 145,264 44,052 1,315	19,256 312,505 862,529 166,346 382,278 138,745 18,000 66,547 97,920 1,395,079 136,982 25,865 1,315	5,293,453 73,375,728 29,439,829 6,341,416 79,021,783 15,154,496 1,800,000 2,150,000 9,792,000 338,800 16,773,586 350,000 200,000	% 99.99 % 49.00 % 35.64 % 100.00 % 100.00 % 53.89 % 40.00 % 50.00 % 80.00 % 49.38 % 70.00 % 70.00 % 100.00	76,000 412,602 890,869 164,614 262,171 186,103 12 11,882 97,679 1,405,198 159,207 35,771 8,656	% 99.99 % 49.00 % 35.64 % 100.00 % 100.00 % 53.89 % 40.00 % 50.00 % 80.00 % 49.38 % 70.00 % 70.00 % 100.00	11,958 175,336 55,904 391 12,416 30,874 4,546 4,072 21,254 103,173 2,672 (391) 90	- - - - - - - - - - - - -	Sub- subsidiary (Note 4) Associates Subsidiary (Note 4) Sub- subsidiary (Note 4) Subsidiary (Note 4、5) Subsidiary (Note 1、4) Associates Associates Sub- subsidiary (Note 4) Associates Sub- subsidiary (Note 4) Sub- subsidiary (Note 4) Sub- subsidiary (Note 4)

Note 1:Including the adjustment made from the unrealized gain/loss with subsidiaries and associates.

Note 2:Including the amortization listed by the book value of net identified assets.

Note 3:According to the regulations, the Company are required to disclose the share of income/loss of investees.

• Note 4: The aforementioned inter-company transaction has been eliminated in the consolidated financial statement.

• Note 5: Dynamic Medical Technologies (Hong Kong) Ltd. has capital reduction by cash to offset company losses of $76,445 thousands and cancelled 19,755,455 shares of common stock in February 2021.

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(ENGLISH TRANSLATION OF CONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUDED IN CHINESE) EXCELSIOR MEDICAL CO., LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, UNLESS OTHERWISE SPECIFIED)

• (c) Information on investment in Mainland China:

• Information on investment in Mainland China:

(Amounts Expressed in Thousands of New Taiwan Dollars)

Name of the investee	Main Businesses and products	Total amount of pain-in capital	Method of investment (Note 1)	Accumulated outflow of investment from Taiwan as of January 1, 2020	Investme	nt flows	Accumulated outflow of investment from Taiwan as of December 31, 2020	Net income (loss) of the investee	Direct /indirect shareholding (%) by the Company	Peak Holding Percentage	Current investment gains and losses	Carrying Amount	Accumulated Inward Remittance of Earnings
					Out-flow	Inflow
Excelsior Healthcare (Shanghai) Corporation (Note 3) Shanghai Lintech Medicare Co. (Note 4) Pacific Beijing Bo-Ai Medical Management Consulting Co., Ltd. SinoExcelsior Investment Inc. (Note 5) Guangzhou Dynamic Inc. (Note 6) Beijing Dynamic Inc. (Note 7) National Pharmaceutical Logistics Corp., Ltd.	Sale and lease of medical equipment, and medical management consultancy service Sale and maintenance of medical equipment Investment business and medical management consultancy service Investment business, sale and lease of medical equipment, and medical management consultancy service Sale and maintenance of medical equipment Sale and maintenance of medical equipment Medical logistics	- - 84,187 291,579 44,346 - 370,493	(2) (2) (2) (2) (2) (2) (3)	30,240 29,213 80,327 947,845 119,574 34,424 66,603	- - - - - - -	- - - - - - -	30,240 29,213 80,327 947,845 119,574 34,424 66,603	- - (19,281) 3,228 (1,015) - 156,671	% - % - % 7.80 % 100.00 % 100.00 % - % 17.65	% - % - % 7.80 % 100.00 % 100.00 % - % 17.65	- - - 3,228 (1,015) - -	- - 8,086 133,115 11,053 - 300,847	- - - - - - 49,732

1. Limitation on investment in Mainland China:

Limitation on in	vestment in Mainland Ch	ina:
Company	Accumulated Investment in Mainland China as of December 31, 2020	Investment Amounts Authorized by Investment Commission, MOEA	Upper Limit on Investment (Note 8)
The Company Dynamic Arich	1,087,625 153,998 66,603	1,289,640 153,998 66,603	4,643,033 770,425 1,090,792

• Note 1: Investments in Mainland China are differentiated by the following four methods:

• (1) Direct investment in Mainland China with remittance through a third region.

• (2) Indirect investment in Mainland China through an existing investee company in a third region.

• (3) Other methods (i.e. entrusted Investment)

• Note 2: Recognition of investment gain or loss during current period is pursuant to the following:

• (1) If the corporation is in the set-up phase, notes are required.

• (2) Recognition basis of investment gains or losses is determined by the following three types, and related notes are required.

  • 1) Financial statements of the investee company were audited and certified by an international firm in cooperation with an R.O.C. accounting firm.

  • 2) Financial statements of the investee company were audited and certified by the external accountant of the parent company.

  • 3) Others

• Note 3: The liquidation procedure of Excelsior Healthcare (Shanghai) Corporation was completed in March 2016, and the investment had remitted to Excelsior Healthcare Co., Limited in the third place. As of December 31, 2021, the accumulated amount of investment from Taiwan has not been repatriated yet.

• Note 4: The disposal of Shanghai Lintech Medicare Co. was completed in December 2015. As of December 31, 2021, the original investment amount of $29,213 thousand from Taiwan has not been repatriated yet.

• Note 5: The current investment outflow is not included the direct investment amount of $207,380 thousand through the third region.

• Note 6: Guangzhou Dynamic Inc. reduced capital to cover losses amounting to $75,252 thousand in Apirl 2020.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, UNLESS OTHERWISE SPECIFIED)

Note 7: The liquidation procedure of Beijing Dynamic Inc. was completed in November 2018, and the investment had remitted to Dynamic Medical Technologies (Hong Kong) Ltd. in the third place. As of December 31, 2021, the accumulated amount of investment from Taiwan has not been repatriated yet. Note 8: (1)The upper limit on investment of the Company and Dynamic is the 60% of net value. (2)The upper limit on investment of Arich is the higher of $80,000 thousand or 60% of net value. Note 9: All amounts listed are disclosed in NTD. Note 10: The aforementioned inter-company transactions have been eliminated in the consolidated financial statements.

1. Significant transactions：

The significant inter-company transactions with the subsidiary in Mainland China, which were eliminated in the preparation of consolidated financial statements, are disclosed in “Information of significant transactions”.

• (d) Major shareholders:

Major shareholders:
Shareholding Shareholder’s Name	Shares	Percentage
Excelsior Investment Co., Ltd.	15,773,454	% 11.17
Excelsior Group Holdings Co., Ltd.	14,914,833	% 10.56
Bestchain Healthtaiwan Co., Ltd. (Bestchain)	13,865,245	% 9.82

(14) Segment Information

• (a) General information

Information reported to the chief operating decision maker for the purpose of resource allocation and assessment of segment performance focuses on the types of company. Specifically, the Group’ s reportable segments were as follows:

• 1.Excelsior segment - the Company.

• 2.Dynamic segment - Dynamic, Hong Kong Dynamic, Excelsior Beauty, Guangzhou Dynamic, and CYJ International Taiwan Inc..

• 3.Arich segment - Arich.

• 4.Other segment - Bestsmile, Excelsior Healthcare, EG Healthcare, Excelsior Investment (Malaysia), RENAL LABORATORIES SDN. BHD., MEDI-CHEM SYSTEMS SDN. BHD., RENAL MANAGEMENT SDN. BHD., Excelsior Asset, Hong Kong Excelsior and SinoExcelsior Investment.

• (b) Information about reportable segments and their measurement and reconciliations

The Group uses the internal management report that the chief operating decision maker reviews as the basis to determine resource allocation and make a performance evaluation. The internal management report includes profit before taxation, but not including any extraordinary activity and foreign exchange gain or losses because taxation, extraordinary activity, and foreign exchange gain or losses are managed on a group basis, and hence they are not able to be allocated to each reportable segment. In addition, not all reportable segments include depreciation and amortization of significant non-cash items. The reportable amount is similar to that in the report used by the chief operating decision maker.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, UNLESS OTHERWISE SPECIFIED)

The operating segment accounting policies are similar to those described in Note (4) “significant accounting policies” except for the recognition and measurement of pension cost, which is on a cash basis.

The Group’s operating segment information and reconciliation are as follows:

For the Years Ended December 31, 2021	Excelsior segment $ 4,306,026 67,168 624 $ 4,373,818 $ 572 28,469 $ 716,069 $ 4,141,741 57,999 1,246 $ 4,200,986 $ 560 26,029 $ 673,009	Dynamic segment 1,024,576 3,607 4,008 1,032,191 872 96,193 173,821 1,008,324 984 6,439 1,015,747 1,010 80,474 148,690	Arich segment 945,600 61 855 946,516 4,502 41,829 68,115 1,251,363 32 406 1,251,801 6,558 34,720 62,717	Others 296,950 26,638 6,192		Adjustment and Elimination	Total 6,573,152 - 10,692
Revenue Revenue from external customers Inter-segment revenue Interest revenue Total Interest expense Depreciation and amortization Reportable segment profit (loss) For the Years Ended December 31, 2020						- (97,474) (987) (98,461) (582) (10,000) (261,565) - (76,110) - (76,110) (231) (3,392) (233,310)
				329,780			6,583,844
				3,397 46,463			8,761 202,954
				177,296			873,736
				274,066 17,095 15,164			6,675,494 - 23,255
Revenue Revenue from external customers Inter-segment revenue Interest revenue Total Interest expense Depreciation and amortization Reportable segment profit (loss)
				306,325			6,698,749
				2,871 29,636			10,768 167,467
				178,277			829,383

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, UNLESS OTHERWISE SPECIFIED)

• (c) Product and service information

Revenue from the external customers of the Group was as follows:

Name of products and services Product revenue Medical equipment and supplies Medicines Aesthetic medical equipment and supplies Household appliances Others Repair and maintenance revenue Rental revenue Other operating revenue Total	For the Years Ended December 31,	For the Years Ended December 31,
	2021 $ 3,947,348 720,218 790,900 160,457 74,440 380,318 54,534 444,937 $ 6,573,152	2020
		3,833,073 1,108,050 799,957 119,381 78,279 359,575 33,230 343,949
		6,675,494

(d) Geographical information

By region Revenue from external customers: Taiwan Hong Kong China Philippines Malaysia Total By region Non-current assets： Taiwan Hong Kong China Philippines Malaysia British Virgin Islands Total	For the Years Ended December 31,	For the Years Ended December 31,
	2021 $ 6,273,083 46,695 - 148,917 104,457 $ 6,573,152 December 31, 2021 $ 1,763,581 232 7 32,102 201,362 10,277 $ 2,007,561	2020
		6,351,482 71,858 130 136,218 115,806
		6,675,494
		December 31, 2020
		1,630,565 1,615 87 31,705 219,402 10,574
		1,893,948

Non-current assets include property, plant and equipment, right-of-use assets, investment properties, intangible assets, and other assets, but do not include financial instruments, deferred tax assets, pension assets, and rights from insurance contracts.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, UNLESS OTHERWISE SPECIFIED)

• (e) Revenue from main customers

Revenue from main customers
Bestchain Excelsior Renal Service	For the Years Ended December 31,
	2021 $ 1,952,623 878,400 $ 2,831,023	2020
		1,795,253 860,245
		2,655,498

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