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Stock code ： 4104

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SPOKESPERSON DEPUTY SPOKESPERSON Name : Wang Ming-Ting Name : Kao Shen Title : Vice General Manager Title : Vice Chairman Telephone : (02)2225-1888 ext.1688 Telephone : (02)2225-1888 ext.1689 Email : [email protected] Email : ac0001@ excelsior.com.tw

COMPANY ADDRESS & PHONE NUMBER

17F., No. 880, Zhongzheng Rd., Zhonghe Dist., New Taipei City 235, Taiwan (R.O.C.) Head Office 10F.-3, No. 303, Zhongming S. Rd., West Dist., Taichung City 403, Taiwan (R.O.C.) Taichung Office 13F., No. 458, Jianguo 1st Rd., Sanmin Dist., Kaohsiung City 807, Taiwan (R.O.C.) Kaohsiung Office No. 589, Sec. 3, Wenhua Rd., Rende Dist., Tainan City 717, Taiwan (R.O.C.) Tainan Office

STOCK TRANSFER AGENT AND REGISTRAR Name of agent : President Securities Corporation. Shareholder Services Department. Address : B1F., No. 8, Dongxing Rd., Songshan Dist., Taipei City 105, Taiwan (R.O.C.) Telephone : (02) 2746-3797 Website : http://www.pscnet.com.tw

AUDITORS FOR THE LATEST FINANCIAL STATEMENTS Name of Auditors : Tsao-Jen Wu, Wan-Wan Lin. CPA Firm : KPMG Taiwan Address : 68F, No. 7, Sec. 5, Xinyi Rd., Xinyi Dist., Taipei City, Taiwan 110, Taiwan (R.O.C.) Telephone : (02)8101-6666 Website : http://home.kpmg.com/tw

VENUE FOR TRADING THE COMPANY’S LISTED OVERSEAS SECURITIES AND INQUIRY METHOD For such overseas securities : None. Company Website : http://www.excelsiormedical.com.tw

Ⅰ . Report to Shareholders ........................................................................................................................ 3 Ⅱ . Company Profile ................................................................................................................................. 14 1. Date of Incorporation ................................................................................................................. 15 2. Company History ........................................................................................................................ 15 Ⅲ . Corporate Governance Report .......................................................................................................... 21 1. Organization ................................................................................................................................ 22 2. Directors and Management Team ............................................................................................ 25 3. Implementation of Corporate Governance ............................................................................. 38 4. Information on Fees to CPA ...................................................................................................... 87 5. Replacement of CPA ................................................................................................................... 88 6. The Company’s Chairman, Chief Executive Officer, Chief Financial Officer, and managers in charge of its finance and accounting operations did not hold any positions in the Company’s independent auditing firm or its affiliates in the past year ............................................................................................................................................ 88 7. Any Transfer of Equity Interests and/or Pledge of or Change in Equity Interests by a Director, Supervisor, Managerial Officer; or Shareholder with a Stake of More than 10 Percent during the Most Recent Fiscal Year or during the Current Fiscal Year up to the Date of Publication of the Annual Report ................................................................ 88 8. Information on Relationship between any of the Top Ten Shareholders ........................... 89 9. The number of shares of the same invested company held by the Company, the Company's directors, supervisors, and executive officers, and the businesses controlled directly or indirectly by the Company, and the consolidated shareholding ratio. .................................................................................................................. 91 Ⅳ . Capital Overview ................................................................................................................................ 92 1. Source of Capital ......................................................................................................................... 93 2. Shareholder Structure ................................................................................................................. 96 3. Distribution of Share Ownership .............................................................................................. 97 4. List of Major Shareholders ......................................................................................................... 97 5. Market Prices, Net Worth, Earnings and Dividends Per Share ........................................... 98 6. Dividend Policy and Implementation Status .......................................................................... 98 7. Impact of the Proposed Stock Dividends in Shareholders Meeting on Business Performances and EPS ........................................................................................................... 99 8. Employee Compensation and Directors’ Remuneration ...................................................... 99 9. Buyback of Treasury Stocks ..................................................................................................... 100 10. Issuance of Corporate Bonds ................................................................................................. 100 11.Issuance of preferred shares, global depositary receipts (GDR), employee stock option and employee restricted stock ................................................................................ 100 12.Issuance of New Shares Acquisition or Exchange of other Companys’ Shares.............. 100 13. Status of Capital Utilization Plan .......................................................................................... 100 Ⅴ . Business Overview ........................................................................................................................... 101 1. Business Scope ........................................................................................................................... 102 2. Market and Sales Overview ..................................................................................................... 119 3. Employees .................................................................................................................................. 131 4. Disbursements for Environmental Protection ...................................................................... 132 5. Labor Relations .......................................................................................................................... 132

Important Contracts .................................................................................................................. 135 VI. Financial Information ...................................................................................................................... 138 1. Five-Year Financial Summary ................................................................................................. 139 2. Five-Year Financial Analysis ................................................................................................... 143 3. Audit Committee’s Review Report ........................................................................................ 146 4. Financial Statements and Independent Auditors’ Report –the Company & Subsidiaries ............................................................................................................................ 147 5. Financial Statements and Independent Auditors’ Report – Parent Company ................ 240 6. Up to the Publication Date of this Annual Report, Has the Group Experienced Financial Turnover Difficulties ........................................................................................... 320 VII. Review and Analysis of Financial Status, Financial Performance, and Risk Management . 321 1. Financial Status .......................................................................................................................... 322 2. Financial Performance .............................................................................................................. 323 3. Cash Flows ................................................................................................................................. 324 4. Effect upon Financial Operations of Major Capital Expenditures from Recent Years ... 324 5. Investment Policies, Main Reasons for Profit or Loss and Improvement Plans from Recent Years, and Investment Plans for the Coming Year ............................................. 325 6. Risk Management and Assessment from Last Year up to the Time of Report Publication ............................................................................................................................. 328 7. Other Important Matters .......................................................................................................... 331 VIII. Special Disclosure .......................................................................................................................... 333 1. Information on Affiliated Enterprises .................................................................................... 334 2. Private Placement Securities from Last Year up to the Time of Report Publication ....... 342 3. Subsidiaries Holding or Disposal of the Company’s Stock List from Last Year up to the Time of Report Publication ........................................................................................... 342 4. Other Necessary Supplements ................................................................................................ 342 5. Matters that Have Significantly Affected Shareholders’ Equity and Share Prices Pursuant to Item 2, Paragraph 3, Article 36 of Securities and Exchange Act from Last Year up to the Time of Report Publication ............................................................... 343

`Ⅰ` . Report to Shareholders

Dear Shareholders,

First of all, I would like to thank you for sparing the time to attend the Company’s annual shareholders’ meeting. It allows our management team to elaborate on our 2020 business performance and the outlook, in person. I hereby represent our management team and the entire staff to express our sincere welcome to you. Your opinions and comments will be highly appreciated.

The COVID-19 pandemic that has spread rapidly across the globe since 2020 has had a severe impact on the global economy. Due to the proper control of the pandemic, its effect on Taiwan’s economy was relatively insignificant. However, the unlimited Quantitative Easing (QE) policy that the Federal Reserve System in the US took to save the stock markets and foreign exchange markets caused a huge amount of funds to flow to other countries, including Taiwan, which led to large fluctuations in Taiwan’s stock market and foreign exchange market. Our Company is a larger medical products and systematic integration channel in Taiwan. Due to the attributes of related business, compared with other industries, we were less affected by the change of the overall economy. We will take this favorable opportunity to actively evaluate and properly expand our share of the overseas Chinese market to maintain our competitive advantage in the future.

In prospect, the Company and our affiliates will continue to work toward diversified development, including the introduction of new generation dialysis machine, health care home appliances(including larger home appliances and air purifiers), and medical aesthetic such as Picoway picosecond laser, Pro U Alexandrite Laser, Animers, Hyadermis hyaluronic acid filler, AestheFill collagen filler, Prima Laser and DR CYJ hair product.

In terms of pharmaceutical logistics, besides striving to collaborate with international principals to actively obtain products, we also continue to introduce new drugs and healthcare supplements from international principals. In addition to continuously obtaining GMP and GDP certification for pharmaceuticals issued by the government, this year will apply for GMP and GDP certification for medical supplies to enhance our professional pharmaceutical logistics services. As for longterm care system 2.0, the Company will expand long-term care service locations by integrating medical services, caregivers and home-based services to build an integrated care network and model in response to the government's 10-year longterm care plan. Furthermore, the Company is also continuing to focus on the government's New Southbound Policy and is expanding to the dialysis market in southeast Asia, and plans to advance the dialysis product manufacturing market via dialysis solution plant in Malaysia.

The Company’s 2020 operating results and 2021 business plan are reported as follows:

I. Report on the 2020 operating results
2020 operating results
(1) Individual statement of comprehensive income

Unit: NT dollars in thousands

Item	2020	2019	Increase (decrease) percentage
Operatingrevenue	4,199,740	3,964,690	5.93%
Grossprofit	685,656	631,739	8.53%
Net operating income	319,114	263,303	21.20%
Non-operating income and expenses	353,895	335,459	5.50%
Profit before tax	673,009	598,762	12.40%
Profit after tax	571,670	514,755	11.06%
Other comprehensive income(loss)	(58,374)	8,307	(802.71%)
Total comprehensive income	513,296	523,062	(1.87%)

i. The increase in operating revenue, gross profit, and net operating income compared to the previous year were mainly due to the increase in sales of hemodialysis and surgery products.
ii. The increase in non-operating income and expenses compared to the previous year was mainly attributable to the influence of “Share of profit of subsidiaries, associates and joint ventures accounted for using equity method”.
iii. The increase in other comprehensive loss and the decrease in the total comprehensive income compared to the previous year was mainly attributable to the influence of “Exchange differences on translation”.

(2) Consolidated statement of comprehensive income

Unit: NT dollars in thousands

Item	2020	2019	Increase (decrease) percentage
Operatingrevenue	6,675,494	6,457,362	3.38%
Grossprofit	1,306,498	1,236,055	5.70%
Net operating income	529,070	464,039	14.01%
Non-operating income and expenses	300,313	282,786	6.20%
Profit before tax	829,383	746,825	11.05%
Profit after tax	669,086	622,274	7.52%
Other comprehensive income(loss)	(28,296)	23,915	(218.32%)
Total comprehensive income	640,790	646,189	(0.84%)

i. The increase in operating revenue, gross profit and net operating income compared to the previous year were mainly due to the increase in sales of hemodialysis and surgery products.
ii. The increase in non-operating income and expenses compared to the previous year was mainly attributable to the influence of “Share of profit of associates and joint ventures accounted for using equity method”.
iii. The increase in other comprehensive loss and the decrease in the total comprehensive income compared to the previous year was mainly attributable to the influence of “Exchange differences on translation”.
Status of budget implementation: this is not applicable since the Company did not prepare any financial forecast.

3. Status of cash flows

(1) Individual statement of cash flows

1) Individual statement of cash flows	1) Individual statement of cash flows	1) Individual statement of cash flows
Unit: NT dollars in thousands
Item	2020	Description
Beginning cash balance	749,196	The balance of the 2019 final account.
Net cash generated from operating activities	130,103	Mainly resulting from the current year profit from operations, the increase in inventories, and decrease in accounts payable.
Net cash used in investment activities	(104,185)	Mainly resulting from the investment under the equitymethod.
Net cash used in financing activities	(335,509)	Mainly resulting from the cash dividends distribution and the decrease in short-term borrowings.
Cash balance at the end of theyear	439,605	The balance of the 2020 final account.

(2) Consolidated statement of cash flows

Unit: NT dollars in thousands

		Unit: NT dollars in thousands
Item	2020	Description
Beginning cash balance	2,828,776	The balance of the 2019 final account.
Net cash generated from operating activities	869,433	Mainly resulting from the current year profit from operations and decrease in receivables.
Net cash used in investment activities	(414,850)	Mainly resulting from acquisition of financial assets at amortised cost and investmentproperty.
Net cash used in financing activities	(603,284)	Mainly resulting from cash dividends distribution and the decrease in short- term borrowings.
Impact of changes in exchange rates	(61,611)	Effect of Exchange rate changes.
Cash balance at the end of theyear	2,618,464	The balance of the 2020 final account.

4. Analysis and comparison of profitability

(1) Analysis of individual profitability

Item	2020	2019	Description
Return on assets (%)	6.7	6.2	The increase in profit after tax in 2020 mainly resulting from the increase in operating revenue and the increase in “Share of profit of subsidiaries, associates and joint ventures accounted for using equity method”.
Return on equity(%)	7.9	7.5	The increase in profit after tax in 2020 mainly resulting from the increase in operating revenue and the increase in “Share of profit of subsidiaries, associates and joint ventures accounted for using equity method”.
Ratio of before-tax profit to the paid-in capital(%)	47.7	46.7	The increase in profit before tax in 2020 mainly resulting from the increase in operating revenue and the increase in “Share of profit of subsidiaries, associates and joint ventures accounted for using equity method”.
Net profit margin (%)	13.6	13.0	The increase in profit after tax in 2020 mainly resulting from the increase in operating revenue and the increase in “Share of profit of subsidiaries, associates and joint ventures accounted for using equity method”.
Basic after-tax earnings per share (NT$) (note)	4.06	4.02	The increase in profit after tax in 2020 mainly resulting from the increase in operating revenue and the increase in “Share of profit of subsidiaries, associates and joint ventures accounted for using equity method”.

Note: analysis made according to the net profit after tax with weighted-average shares outstanding.

(2) Analysis of consolidated profitability

Item	2020	2019	Description
Return on assets (%)	4.9	4.6	The increase in profit after tax in 2020 mainly resulting from the increase in operating revenue and the increase in “Share of profit of associates and joint ventures accounted for usingequitymethod”.
Return on equity (%)	7.3	7.3	The increase in profit after tax in 2020 mainly resulting from the increase in operating revenue and the increase in`“`Share of profit of associates and joint ventures accounted for using equity method `”；`In addition, due to the increase in cash capital and non-controlling interests, the return on equity in the twoyears is nearlythe same.
Ratio of before-tax profit to the paid-in capital (%)	58.8	58.3	The increase in profit before tax in 2020 mainly resulting from the increase in operating revenue and the increase in “Share of profit of associates and joint ventures accounted for usingequitymethod”.
Net profit margin (%)	10.0	9.6	The increase in profit after tax in 2020 mainly resulting from the increase in operating revenue and the increase in “Share of profit of associates and joint ventures accounted for usingequitymethod”.
Basic after-tax earnings per share (NT$) (note)	4.06	4.02	The increase in profit after tax in 2020 mainly resulting from the increase in operating revenue and the increase in “Share of profit of associates and joint ventures accounted for usingequitymethod”.

Note: analysis made according to the net profit after tax with weighted-average shares outstanding.

5. R&D status

As the Company is not in the manufacturing industry, it has not set up a dedicated R&D division. Instead, its respective business divisions are responsible for expanding the business scopes through agencies and sales distributors of medical care-related sectors.

II. The 2021 business plan
Management guidelines
- (1) Reinforce investment deployment: The Company plans to further develop the medical market in Taiwan and actively seek for medical business partners. The Company plans to expand sources of profit by integrating the resources throughout the supply chain in the medical market and enhancing channel distribution via investments, while at the same time, actively expand to the dialysis market in Southeast Asia, and plan to advance the dialysis product manufacturing market via dialysis solution plant in Malaysia.
- (2) Brand strategy: Promote the privately-owned brand of the “ULTRACLEAN” Cubic Air, the Series of healthy home appliances, and cooperate with Korean leading bio-tech manufacturer, Caregen Co., Ltd. (hereafter referred to as “Caregen”) to promote DR CYJ hair-growth brand products.
- (3) Develop long-term care in communities: in line with the government's 10-year long-term care plan, the Company plans to establish an integrated long-term care network by actively planning and establishing a long-term care corporation and expanding of community-based longterm care service locations. In addition, the Company also aims to strengthen a tiered service and healthcare model which provides both medical and caring services to satisfy members of the public with caring needs.
- (4) Develop medical real estate and equipment lease service: by integrating the professional traits of asset management, the Company will continue to develop medical real estate and equipment lease services to maximize the synergies for its affiliates.
- (5) Hedge currency risk: As the global stock and foreign exchange markets are facing critical volatility, a large amount of capital flows into Taiwan, making the appreciation of the new Taiwan dollar and benefitting import industry. The company will reduce the currency risk by using foreign currency hedge instruments in the environment.
Expected sales of major products

In 2021, the Company will strive to increase the market share of hemodialysis and surgical products, introduce the relevant medical consumables and equipment, and integrate the resources of the Company and its affiliates to improve the overall operational performance, including

medical aesthetic, pharmaceutical logistics, long-term care, medical real estate, medical-related equipment lease service, and other items, while actively looking for strategic partners in Taiwan and overseas and expanding the sales business area of the Company.

III. Future corporate development strategies

In response to the changes of the market environment, while striving to increase the market share of hemodialysis and surgical products, the Company plans to continuously introduce the relevant medical consumables and equipment, cultivate the medical market channels, integrate the resources of its affiliates, use diversified extension of strategic alliances and strengthen competitiveness to achieve the goal of building a holistic healthcare holding company, and continue to provide comprehensive health service for the healthcare industry in the spirit of “attentiveness, independence, innovation, and forward-looking.”

The Company's affiliate, Dynamic Medical Technologies Inc. ("DMT"; TWSE code: 4138) is focused on trading, repair and maintenance of aesthetic lasers and light-based equipment in Taiwan, fillers for injections, and medical aesthetic-grade skincare products. DMT will strive to achieve its mission of providing exquisite beauty by continuing to focus on developing and introducing the latest and safest medical aesthetic products and provide comprehensive skin and body medical aesthetic-level products. Subsequent revenues will mostly come from Picoway picosecond laser, Pro U Alexandrite Laser, Animers, ANIMERS, Hyadermis hyaluronic acid filler, AestheFill collagen filler, Prima Laser, Fotona laser vaginal tightening and body sculpting series, CoolTech fat freezing equipment, and DR CYJ hair growth products.

The Company's affiliate, Arich Enterprise Co., Ltd. ("Arich"; TWSE code: 4173) is focused on pharmaceutical sales and logistics in Taiwan. Arich will actively seek for partnerships with pharmaceutical principals to expand the basis of pharmaceutical distribution and logistics. In addition to continuously obtaining GMP and GDP certification for pharmaceuticals issued by the government, this year will apply for GMP and GDP certification for medical supplies, stepping into the logistic service field of medical supplies. Concurrently, Arich will also collaborate with international principals to increase the market share of product, continue to introduce new drug and health supplements and health care-related products, enhance interactions with customers, and to provide more well-rounded and professional service.

Besides building the hardware and facilities for all-round nursing homes and providing healthcare management services, Asia Best Healthcare ("ABH"),

an affiliate of the Company, will work together to promote the sound development of Taiwan's long-term care system, and provide dignified and humane care for the elderly, the disabled, and the demented. In addition, the number of elderly people (65 years or older) in Taiwan reached 16.07% at the end of 2020, in line with the 10-year long-term care plan, ABH is actively setting up a long-term care corporation, expanding the service locations in communities, and building an integrated long-term care network. By integrating a daycare center and clinic that jointly cater to the health-related needs of the public and strengthening a tiered care and service model, ABH aims to provide continuous subsequent caring and housing to satisfy the public's healthcare needs. In addition, ABH is also expanding the service locations of long-term care and daycare centers and aspires to become the best healthcare company throughout Asia.

The Company has also invested in EG Healthcare Inc., has cultivated deeply in the Philippines for seventeen years, and because the domestic market demand for medical care in the Philippines has been growing steadily and its medical equipment industry has not yet flourished, the Company will continue to expand the local business of hemodialysis and relevant medical products, provide management consultation and healthcare education and training to improve the quality of its healthcare services, integrate the resources of the Company and its affiliates to develop different medical divisions and products, and use the experience learned in the Philippines to train the staff to become professionals for the manpower needed in Southeast Asia in the future, to lay the foundation for the competitive advantage of sustainable development in Southeast Asia market.

The companies has also invested in Renal Laboratories Sdn. Bhd, which engages in the production and manufacturing of dialysate, and Medi-Chem System Sdn. Bhd., which engages in the sales of medical products, may develop their markets in Southeast Asia in the future in line with the strategy of the Group. In addition to extending the production, manufacturing and sales of dialysis-related products to the Association of Southeast Asia Nations, we can further introduce the medical equipment and consumables needed in Malaysia to enlarge the overall source of profit.

Excelsior Asset Management Co., Ltd., an affiliate of the Company, will continue to acquire real estate that meet the operational needs of medical institutions or long-term care facilities. To achieve the goal of maximizing synergies for its affiliates, it also seeks to form stable long-term lease contracts with medical institutions or long-term care facilities, on top of gradually expanding to encompass lease services with medical equipment.

IV. The influences of the external competitive environment, regulatory environment and overall business environment

According to the research report of the Industrial Economics & Knowledge Center (IEK) of ITRI, the global population aged 65 years or older is expected to peak in 2011-2029. The National Development Council also announced that the proportion of the elderly in Taiwan exceeded 16% of the total population in 2020, and that Taiwan has become an “aged society” as defined by the World Health Organization (WHO). According to the information released by the Ministry of the Interior, as of the end of 2020, the number of elderly people (65 years or older) in Taiwan reached 3,787,315, for an increase of 180,188 compared to that at the end of 2019, and accounting for 16.07% of the total population (23,561,236); it is estimated that by 2026, the elderly population in Taiwan will reach 20%, making Taiwan a super-aged society. The drastic rise of elderly population has made it necessary for young and middle-aged people to seriously face the retired life and health care of their own and their elders, and plan in advance for the elderly health care to meet the needs of the future market. Therefore, in line with the “Ten-Year Long-Term Care Program”, “Long-Term Care Service Network Program”, and the “Long-Term Care Capacity Improvement Program” promoted by the Government, the Company will build a complete long-term health care system in stages.

With the increase in Taiwan’s national income and economic growth in recent years, people are paying more attention to their health, and as the result of population aging and the increase in the number of patients with chronic diseases such as obesity, diabetes, and hypertension, the demand for medical care and related products has increased significantly. Driven by the dynamic adjustment and growth trend of medical supply and demand structure, the Company can bring greater development opportunities to the medical industry.

Fu Hui-Tung, Chairman

`Ⅱ` . Company Profile

1. Date of Incorporation

March 15, 1988

2. Company History

March 1988
Enfield Medical Supply Ltd. was established and elected Hui-Tung Fu as the first chairman. The Company engaged in the sale of hemodialysis medical supplies, wound and ostomy medical products.
March 1989 In responding to business expansion, Enfield Medical Supply Ltd. was changed to Enfield Medical Co., Ltd.
February 1992 Established Taichung office to expand the sales channels, and built a maintenance team in central Taiwan.
May 1996
Established Kaohsiung office to expand the sales channels, and built a maintenance team in southern Taiwan.
January 1997 Completed intranet structure, and the management of operation entered into e-commerce.
October 1997 The IT department completed Internet structure and integrated the Internet and the Intranet. IT department began to replace out-of-date components and servers to solve the millennium bug crisis.
June 1998 The Company entered globalization era, joint venture with RTS Worldwide Holding Inc, a subsidiary company of Baxter International, and planed to establish “Jiate Excesior Co., Ltd.” to expand and manage hemodialysis related business.
July 1998 The Company was approved as a public company by Securities and Futures Commission, Ministry of Finance to improve management performance.
November 1999 Built internal resources to integrate, JDE information management system.
April 2000
Joint venture with Bexcom Co.,Ltd., Heye Investment Co.,Ltd., Chiayi Investment Co.,Ltd., established Bestchain Online Business Co., Ltd., and entered into the medical health e-commerce field.

October 2000

Invested Yusheng International Co., Ltd., and entered into the field of reverse osmosis water treatment equipment and maintenance for medical and biotechnology industry.
February 2001 The company was approved as “biotechnology stock” by Taipei Exchange, stock code is 4104 which officially qualified to list stock.
June 2001 1.Public trading could commence on June 8, 2001 pursuant to authorization from Taipei Exchange.
2.Invested in E-Young Technology Co., Ltd., entered into medical enginerring agency and maintenance field.
March 2003 Invested in Excelsior Healthcare Co., Limited, an overseas holding company in the British Virgin Islands, engaged in the investment and operation of the medical industry in Asia and overseas. The company established EG Healthcare, Inc. to develop medical-related industries in the Philippines.
August 2003 Invested in Visionfront Corporation, and entered into the ophthalmology field.
October 2003 Puchased Zhonghe Office to establish the Group headquarters.
April 2004 Invested in Dynamic Medical Technologies Inc., and entered into the aesthetic medical field.
March 2005 Purchased all shares of Jiate Excesior Co., Ltd. invested by RTS Worldwide Holding Inc., which is the subsidiary of Baxter International, and obtained channels of the entire hemodialysis of that company.
April 2005 The subsidiaries, E-Young Technology Co., Ltd. and Yusheng International Co., Ltd. merged, and the former is the surviving company.
January 2006 1.Upgraded internal resource to integrate ERP system for effectiveness.
2.To streamline the affiliates, Bestchain Healthtaiwan Co., Ltd. and Chiayi Applied Technology Co., Ltd. merged, and the former is the surviving company.

January 2007 The Company sold 51% shares of its subsidiary Jiate Excesior Co., Ltd. to Fresenius Medical Care Hong Kong Co., Ltd. joint venture to expand hemodialysis business.
April 2007 Invested in Bestsmile Co., Ltd., and entered into the field of dental management consultancy service.
May 2007
The subsidiary, Dynamic Medical Technologies Inc., invested in Great China Technology Development Limited into the international aesthetic medical field.
December 2007 The Company’s stock terminated the trading of its shares on Taipei Exchange and listed on the Taiwan Stock Exchange on December 31, 2007.
September 2008 Invested Asia Best Healthcare Co., Ltd. to expand the long-term care business in Greater China through the third place indirect investment.
November 2008 Signed a share exchange agreement with Jiuyu Investment Co., Ltd. and issued new shares due to acquisition of 51% shares of Arich Enterprise Co., Ltd. held by Jiuyu Investment Co., Ltd.
June 2009 The Company's name was formally changed from “Enfield Medical Co., Ltd.” to “Excelsior Medical Co., Ltd.”
December 2009 The subsidiary, Dynamic Medical Technologies Inc., initially offerd shares of stocks to the public in September, 2009, and its shares had acquired approval from Taipei Exchange to trade in the emerging stock market since December 28, 2009.
December 2010 The subsidiary, Dynamic Medical Technologies Inc., terminated the trading of its shares on TPEx emerging stock market and listed on Taipei Exchange on December 29, 2010.
February 2011 Established the subsidiary, Excelsior Medical Co., Limited (Hong Kong), to invest medical industry in China region.

May 2011

June 2011

December 2011

July 2012

November 2012

Yujia Medical Service Co., Ltd. was established as a joint venture through Excelsior Medical Co., Limited (Hong Kong) to develop medical industry in China region.

The subsidiarys, “E-Young Technology Co., Ltd.” and “Animation Medical Technologies Ltd.” merged, and the latter is the surviving company.
Established Remuneration Committee to implement corporate governance and integrity codes.
The subsidiary, Arich Enterprise Co., Ltd., initially offerd shares of stocks to the public in May 2012, and its shares had acquired approval from Taipei Exchange to trade in the emerging stock market since July 10, 2012.
1.The Company originally invested in Asia Best Healthcare Co., Ltd. through Excelsior Healthcare Co., Limited. Due to expansion of business in Greater China, the investment framework was restructured and shares of Asia Best Healthcare Co., Ltd. were transferred from Excelsior Healthcare Co., Limited to Excelsior Medical Co., Limited (Hong Kong).
2.Excelsior Medical Co., Limited (Hong Kong) carried out capital injection, and the shares were purchased by Excelsior Healthcare Co., Limited. After the capital injection of Excelsior Medical Co., Limited (Hong Kong), the Company and Excelsior Healthcare Co., Limited hold 44.7% and 55.3% of its shares respectively.
October 2013 The subsidiary, Arich Enterprise Co., Ltd., terminated the trading of its shares on TPEx emerging stock market and listed on Taipei Exchange on October 31, 2013.
October 2014 The Company and the subsidiary Dynamic Medical Technologies Inc. separately acquired 0.6% and 0.4% of Caregen Co., Ltd. shares in October 2014 to develop proprietary, patented peptide technology for hair growth, hair care treatment and to promote products from DR.CYJ brand.

October 2015

The Company established Shinkong Excelsior Asset Management Co., Ltd. as a joint venture. The parties conbined their respective advantageous resources to develop real estate investments in medical-related industries.
June 2016 Established Audit Committee to strengthen the Company’s corporate governance system.
July 2017 The Company merged with its subsidiary Animation Medical Technologies Ltd. to integrate group resource. The Com an was the survivin com an . p y g p y
December 2017 The Company acquired 100% of SinoExcelsior Investment Inc.(Its original name is Yujia Medical Service Co., Ltd.) from Sinopharm Group Co.,Ltd. through Excelsior Medical Co., Limited (Hong kong) upon the completion of this transation in order to expand to madical industries in China region.

November 2018

1.The Subsidiary, SinoExcelsior Investment Inc., adjusted its operation strategy to reduce capital and change its company name and business content. It was approved to chan e its re istered Chinese name. g g
2.The Subsidiary, Excelsior Healthcare Co., Limited established Excelsior Investment (Malatsia) Co., Ltd. to develo the Southeast Asia market. p

June 2019

3.Acquired 70% shares in RENAL LABORATORIES SDN. BHD. and MEDI CHEM SYSTEMS SDN. BHD. through the subsidiary, Excelsior Investment (Malatsia) Co., Ltd., By investing in dialysate manufacturer in Malaysia, the Company looks to expand into the hemodialysis market and enter into dialysis-related roducts manufacturin in Southeast Asia.
p g
Elections for the 12th board of directors (including inde endent directors in the shareholders’ meetin . p ) g

August 2019 The Company acquired 51% of the shares of Shinkong Excelsior Medical Asset Management Co., Ltd., increasing the Company's shareholding ratio from 49% to 100%, and the name of the subsidiary was changed to Excelsior Asset Management Co., Ltd..
October 2019 In October 2019, SinoExcelsior Investment Inc. adjusted management strategies and disposed its entire shares in Beijing Sinoexcelsior Investment Management Co., Ltd. and Shanghai Wanli Medical Cosmetology Clinic Co., Ltd., a 100% owned subsidiary of Beijing Sinoexcelsior.
January 2020 Issued 1,300 million shares for capital injection. Shares were issued at NT$45 per share, and NT$585,000,000 was raised. After the capital injection, share capital was NT$1,411,489,700.
April 2020 Arich Enterprise Co., Ltd. issued 30 million shares for capital injection. Shares were issued at NT$15 per share, and NT$450,000,000 was raised. After the capital injection, share capital was NT$745,743,550.
May 2020 The Company acquired normal saline permit license and outsourced manufacturing to ASTAR CHEMICAL & PHAR CO., LTD..

December 2020 The Company acquired import certificate of NIKKISO’s new model DBB-EXA ES hemodialysis machine approved by Ministry of Health and Welfare. The new model DBB-EXA ES hemodialysis machine added new functions, including online hemodialysis powder infusion and data output communication interface. In addition to meeting current medical requirements, also enhance the product’s sales strength by adding various functions.

January 2021

The Subsidiaries, Dynamic Medical Technologies Inc. and Arich Enterprise Co., Ltd. moved to the same buildin in favor of the Grou overall lannin . g p p g

`Ⅲ` . Corporate Governance Report

1. Organization

(1) Organizational chart

==> picture [663 x 433] intentionally omitted <==

(2) Department operations

Department operations	Department operations
Department		Responsibilities
Board of Directors		Decision-making over business strategies, reviewing legally stipulated regulations, laws and bylaws, reviewing budgets and other functional authorities pursuant to laws and the Shareholders’ Meeting.
Remuneration committee		Evaluate the remuneration policies of directors, supervisors, and managers, and to propose recommendations to the Board of Directors for references.
Audit committee		Composed of all independent directors, the Audit Committee assists the Board of Directors in supervising the quality and integrity in respect of implementation of relevant accounting, auditing, and financial reporting procedures and control over the Company’s finance.
Auditing office		In charge of investigating and evaluating the implementation of the Company’s internal control system and to assess operational efficiency, and to provide recommendations for improvement.
Chairman		Convene Board of Directors and supervise the General Manager to execute resolutions from the Board meetings.
General	manager	Implements policies and decisions from the Board of Directors and operational strategies; in charge of integrating the Company’s departments to expand businesses and to establish internal management system.
General Manager’s Office	General Manager’s Office	Monitor and manage the Company’s investment portfolio, research and propose overall business strategies, goals, and strategies and to collect management information, and analysis of matters related toproduct development.
	Public Relations Office	Acts as the Company’s spokesperson and channel of communications with external entities.
	Strategic Planning Office	In charge of promoting corporate image and market planning.
	Legal Office	In charge of reviewing and signing contracts and other relevant matters.
	Secretariat Office	In charge of receiving visitors, handle matters and agenda related to various inter-departmental meetings, and tasks assigned by the Chairman and General Manager.

Department	Department	Responsibilities
Human Resources Department	Human Resources Division	In charge of human resources management matters related to staff recruitment, employee development, compensation management, employee benefits and employee relations.
	IT Division	In charge of planning the information technology and management over relevant equipment.
Finance & Admin Department	Accounting Division	Responsible of accounting, tax, and supervision of subsidiaries.
	Finance & Admin Division	Cashier, finance planning, stock affair, and general administrative tasks.
	Sales service Division	Responsible for procurement and customer service.
Sales & Marketing Department	Product Development Division	In charge of new product development and introduction.
	Dialysis Business Division	In charge of planning, market research, and sales and purchase planning related to dialysis, Covidien, and medicalproducts.
	Medical Product Division	In charge of promoting blood bag and wound and ostomy products.
	Technical Service Division	After-sale repair and maintenance of medical device.
	Home Appliance Division	Planning, market research, and sales and purchase planning related to healthcare home appliances and other consumerproducts.
Overseas Business Department	Philippines Business Division	In charge of planning and investments in overseas markets.
	Malaysia Business Division
	China Business Division
	Project Division

2. Directors and Management Team

(1) Directors

A. Directors 2021/04/24 Unit: share

Title	Nationali ty/ Place of Incorpor ation	Name	Gen der	Date Elected	Term (Year s)	Date First Elected	Shareholding when Elected	Shareholding when Elected	Current Shareholding	Current Shareholding	Spouse & Minor Shareholding	Spouse & Minor Shareholding	Shareholding by Nominee Arrangement	Shareholding by Nominee Arrangement	Experience`（`Education`）`	Other Position	Executives, Directors or Supervisors Who are Spouses or within Two Degrees of Kinship	Executives, Directors or Supervisors Who are Spouses or within Two Degrees of Kinship	Executives, Directors or Supervisors Who are Spouses or within Two Degrees of Kinship	Remark (s) (Note)
							Shares	`％`	Shares	`％`	Shares	`％`	Shares	`％`			Title	Name	Relati on
Chairman	TW	Fu Hui- Tung	M	2019/06	3	2001/4	436,763	0.34%	469,993	0.33%	1,645	0.00%	3,819,438	2.71%	Master of Business Administration, University of Southern Queensland, Australia Laboratory Department,Central Taiwan University of Science and Technology (originally known as Department of Radiological Technology , ChungTai Junior College)	Chairman of Dynamic Medical Technologies Inc. Chairman of Arich Enterprise Co., Ltd. Director of Excelsior Beauty Co., Ltd. Chairman of Excelsior Group Holdings Co., Ltd. Chairman of Xuan Hui Investment Co., Ltd. Director of Bestchain Healthtaiwan Co., Ltd. Director of Visionfront Corporation Chairman of Excelsior Healthcare Co., Ltd. Chairman of Excelsior Medical Co., Limited (Hong Kong) Chairman of Excelsior Asset Management Co., Ltd. Chairman of Asia Best Healthcare Co., Ltd. Director of SinoExcelsior Investment Incorporation Chairman of Excelsior Investment (Malaysia) Co., Ltd Director of Excelsior Group Holdings Ltd. Director of CYJ International Co., Ltd. Director of Excelsior Health Foundation Director of Focus Health Co., Ltd.	Dire ctor	Fu Jo- Hsuan	Father and son	None
Director	TW	Excelsi or Group Holdin gs Co., Ltd.	-	2019/06	3	1998/4	13,860,296	10.82%	14,914,833	10.57%	`－`	`－`	`－`	`－`	N/A	None	None	None	None	None
Representat ive of juristic- person director	TW	Excelsi or Group Holdin gs Co., Ltd. Repres entativ e:Chen Tun- Ling	M	2019/06	3	2001/4	507,861	0.40%	546,500	0.39%	4,304	0.00%	`－`	`－`	Department of Medicine, Taipei Medical University Physician and Nephrologist Director of Feng Yuan Chen General Hospital Director of Shinshen Hospital Director of Jia Ping Clinic Director of Taiwan Society of Nephrology Director of Taiwan Society of NephrologyPublic Affairs Committee	Nephrologist (Director) of Jia Ming Clinic Honorary President of Taiwan Society of Dialysis Medical Technologists Nephrologist of Kaohsiung Yuoshen Hospital	None	None	None	None

Title	Nationali ty/ Place of Incorpor ation	Name	Gen der	Date Elected	Term (Year s)	Date First Elected	Shareholding when Elected	Shareholding when Elected	Current Shareholding	Current Shareholding	Spouse & Minor Shareholding	Spouse & Minor Shareholding	Shareholding by Nominee Arrangement	Shareholding by Nominee Arrangement	Experience`（`Education`）`	Other Position	Executives, Directors or Supervisors Who are Spouses or within Two Degrees of Kinship	Executives, Directors or Supervisors Who are Spouses or within Two Degrees of Kinship	Executives, Directors or Supervisors Who are Spouses or within Two Degrees of Kinship	Remark (s) (Note)
							Shares	`％`	Shares	`％`	Shares	`％`	Shares	`％`			Title	Name	Relati on
Representat ive of juristic- person director	TW	Excelsi or Group Holdin gs Co., Ltd. Repres entativ e:Kao Shen	F	2019/06	3	2018/12	219,121	0.17%	235,792	0.17%	`－`	`－`	`－`	`－`	Adjunct professor ,Shanghai University of Finance and Economics Zhejiang College Doctor of Accounting, Shanghai University of Finance and Economics Master degree ,National Taiwan University EMBA Department of Accounting, National Chung Hsing University Vice President of Excelsior Medical Co., Ltd. General Manager of Excelsior Medical Co., Ltd. General Manager of Jiate Excelsior Co., Ltd. Auditor,Deloitte & Touche	Chairman of SinoExcelsior Investment, Inc. General Manager of SinoExcelsior Investment, Inc. Director of CP Bo-Ai Inverstment Limited. Director of Beijing Taipingyang Bo-Ai Medical Treatment Management Consultant Co., Ltd. Director of Asia Best Healthcare Co.,Ltd . Chairman of EG Healthcare, Inc. Director of Renal Laboratories Sdn. Bhd. Director of Medi-Chem Systems Sdn. Bhd Director of Renal Management Sdn. Bhd Supervisor of Excelsior Investment Co., Ltd. Supervisor of Excelsior Group Holdings Co., Ltd. Director of Excelsior Health Foundation Director of Sinopharm Logistics Co.,Ltd. Supervisor of Visionfront Corporation	None	None	None	None
Director	TW	Wang Ming- Ting	M	2019/06	3	1998/05	47,792	0.04%	63,428	0.04%	`－`	`－`	`－`	`－`	Master of Business Administration, University of Southern Queensland, Australia Department of Accounting and Statistics, National Taichung College of Business Section Manager of Accounting Section and Examination Section, Taiwan Land Development Investment Trust Corporation Specialist of Bank Of Communications	Director of Dynamic Medical Technologies Inc. Director of Arich Enterprise Co., Ltd. Supervisor of Bestchain Healthtaiwan Co., Ltd. Director of Excelsior Investment Co., Ltd. Director of Excelsior Group Holdings Co., Ltd. Dirtctor of Xuan Hui Investment Co., Ltd. Dirtctor of Excelsior Asset Management Co., Ltd. General Manager of Excelsior Asset Management Co., Ltd. Supervisor of Excelsior Beauty Co., Ltd. Supervisor of CYJ International Taiwan Inc. Director of Join Fun Co., Ltd. Chairman of Arich Best Chain Co., Ltd. Director of Excelsior Health Foundation Supervisor of Chia En Long-term Care Corporation	None	None	None	None
Director	TW	Hsieh Yen- Sheng	M	2019/06	3	2013/06	595,865	0.46%	641,200	0.45%	184,372	0.13%	`－`	`－`	Master of Business Administration, University of Southern Queensland, Australia Department of Industrial Engineering, Chung Yuan Christian University	Chairman of Pu Yu Investment Co., Ltd. Director of Unimicron Technology Corp. Independent Director of Yufo Electronics Co. Ltd. Director of Quan Ren Zhong Yuan Yu Cheng Investment Co., Ltd. Director of Goldred Nanobiotech Co.,Ltd.	None	None	None	None

Title	Nationali ty/ Place of Incorpor ation	Name	Gen der	Date Elected	Term (Year s)	Date First Elected	Shareholding when Elected	Shareholding when Elected	Current Shareholding	Current Shareholding	Spouse & Minor Shareholding	Spouse & Minor Shareholding	Shareholding by Nominee Arrangement	Shareholding by Nominee Arrangement	Experience`（`Education`）`	Other Position	Executives, Directors or Supervisors Who are Spouses or within Two Degrees of Kinship	Executives, Directors or Supervisors Who are Spouses or within Two Degrees of Kinship	Executives, Directors or Supervisors Who are Spouses or within Two Degrees of Kinship	Remark (s) (Note)
							Shares	`％`	Shares	`％`	Shares	`％`	Shares	`％`			Title	Name	Relati on
Director	TW	Fu Jo- Hsuan	M	2019/06	3	2016/06	`－`	`－`	100,000	0.07%	`－`	`－`	`－`	`－`	Bachelor of Business Administration, Department of Information Management, National Central University Senior Advisor of Abeam Consulting Ltd. General Manager of Dynamic Medical Technologies Inc.	Chairman of Excelsior Investment Co., Ltd. Director of Excelsior Group Holdings Co., Ltd. General Manager of Excelsior Renal Service Co., Ltd. (Hong Kong) General Manager of Jiate Excelsior Co., Ltd. Director of Bestchain Healthtaiwan Co., Ltd. Director of Dynamic Medical Technologies Inc. Director of Excelsior Beauty Co., Ltd. Dirtctor of Xuan Hui Investment Co., Ltd. Dirtctor of Excelsior Asset Management Co., Ltd. Director of SinoExcelsior Investment Inc. Director of Renal Laboratories Sdn. Bhd. Director of Medi-Chem Systems Sdn. Bhd Director of Dynamic Medical Technologies (Hong Kong) Ltd. Chairman of CYJ International Taiwan Inc. Director of Medytox Taiwan Inc. Director of Excelsior Long-term Care Corporation Director of Chia En Long-term Care Corporation Director of Excelsior Health Foundation	Chai rma n	Fu Hui- Tung	Father and son	None
Independent Director	TW	Chan Tzu- Sheng	M	2019/06	3	2008/06	380	0.00%	408	0.00%	`－`	`－`	`－`	`－`	Department of Accounting and Statistics, Tamsui Institute of Business Administration Assistant Manager, Taiwan Cooperative Bank	Independent Director of Arich Enterprise Co., Ltd.	None	None	None	None
Independent Director	TW	Chang Wu-I	M	2019/06	3	2012/06	`－`	`－`	`－`	`－`	`－`	`－`	`－`	`－`	Researcher of International Tax Planning, Law School, Harvard University Master of Finance, National Chengchi University Bachelor of Economics, National Chung Hsing University Partner of Taxation Department, KPMG Taiwan Chairperson of KPMG Taiwan	Independent Director of Arich Enterprise Co., Ltd. Independent Director of Aerowin Technology Corp.	None	None	None	None
Independent Director	TW	Kuo Yu- Chia	M	2019/06	3	2016/06	`－`	`－`	`－`	`－`	`－`	`－`	`－`	`－`	Bachelor of Laws, National Taiwan University Master of Laws, George Washington University	Director of Teleport Access Services, Inc. Chairman of Kai Sen Investment Co. Ltd. Chairman of Kai Sen Management Consulting Co., Ltd. Supervisor of Excellent Water Appraisal & Co.	None	None	None	None

Note: Where the Chairman of the Board of Directors and the President or person of an equivalent post (the highest level manager) of a company are the same person, spouses, or relatives within the first degree of kinship, the reason for, reasonableness, necessity thereof, and the measures adopted in response thereto (such as increasing the number of independent director seats, and more than half of all directors must not concurrently serve as employees or managers) must be disclosed.

B. Major shareholders of the institutional shareholders

	April 24,2021	April 24,2021
Name of Institutional Shareholders	Major Shareholders	%
Excelsior Group Holdings Co., Ltd.	Fu Hui-Tung	35.74%
	Liao Mei-Hui	16.75%
	Excelsior Investment Co., Ltd.	16.41%
	EXCELSIOR GROUP HOLDINGS LTD.	12.89%
	Xuan Hui Investment Co., Ltd.	10.89%
	Wei XiangInvestment Co., Ltd.	1.31%
	Chou Wen-Lan	1.10%
	Li Ming-Chuan	1.06%
	Yen Kun-Piao	0.94%
	Fu Pi-Yun	0.75%

C. Major shareholders of the Company’s major institutional shareholders

April 24, 2021

		April 24,2021
Name of Institutional Shareholders	Major Shareholders	%
Excelsior Investment Co., Ltd.	Excelsior Group Holdings Co., Ltd.	31.20%
	Xuan Hui Investment Co., Ltd.	22.86%
	WangWei-Pin	21.90%
	Long Bon International Industrial Co.,Ltd.	8.00%
	Wei XiangInvestment Co., Ltd.	6.73%
	REIJU Construction Co Ltd.	2.00%
	Hsueh Fu-Chuan	1.63%
	Tsai Wen-Ching	1.06%
	LiangMing-Shu	1.06%
	Wu Sheng-Zhong	1.06%
EXCELSIOR GROUP HOLDINGS LTD.	Fu Hui-Tung	60.00%
	WangWei-Pin	40.00%
Xuan Hui Investment Co., Ltd.	Fu Hui-Tung	69.20%
	FuJo-Hsuan	30.76%
	WangMing-Ting	0.02%
	Liao Mei-Hui	0.02%
Wei Xiang Investment Co., Ltd.	WangWei-Pin	88.00%
	WangChun-Hsiang	11.00%
	WangLi-Ching	1.00%

D. Professional qualifications and independence analysis of directors and upervisors

Criteria Name	Meet One of the Following Professional Qualification Requirements, Together with at Least Five Years Work Experience	Meet One of the Following Professional Qualification Requirements, Together with at Least Five Years Work Experience	Meet One of the Following Professional Qualification Requirements, Together with at Least Five Years Work Experience	Independence Criteria (Note)	Independence Criteria (Note)	Independence Criteria (Note)	Independence Criteria (Note)	Independence Criteria (Note)	Independence Criteria (Note)	Independence Criteria (Note)	Independence Criteria (Note)	Independence Criteria (Note)	Independence Criteria (Note)	Independence Criteria (Note)	Independence Criteria (Note)	Number of Other Public Companies in Which the Individual is Concurrently Serving as an Independent Director
	An Instructor or Higher Position in a Department of Commerce, Law, Finance, Accounting, or Other Academic Department Related to the Business Needs of the Company in a Public or Private Junior College, College or University	A Judge, Public Prosecutor, Attorney, Certified Public Accountant, or Other Professional or Technical Specialist Who has Passed a National Examination and been Awarded a Certificate in a Profession Necessary for the Business of the Company	Have Work Experience in the Areas of Commerce, Law, Finance, or Accounting, or Otherwise Necessary for the Business of the Company	1	2	3	4	5	6	7	8	9	10	11	12
Fu Hui-Tung																None
Excelsior Group Holdings Co., Ltd. Representative:C hen Tun-Ling																None
Excelsior Group Holdings Co., Ltd. Representative:K ao Shen																None
WangMing-Ting																None
Hsieh Yen-Sheng																1
FuJo-Hsuan																None
Chan Tzu-Sheng																1
ChangWu-I																2
Kuo Yu-Chia																None

Note: Please tick the corresponding boxes that apply to the directors or supervisors during the two years prior to being elected or during the term of office. 1. Not an employee of the Company or any of its affiliates.

Not a director or supervisor of the Company or any of its affiliates. Not applicable in cases where the person is an independent director appointed in

accordance with the laws and regulations of the local country by, and concurrently serving as such at, a company and its parent or subsidiary or a subsidiary of the same parent.

Not a natural-person shareholder who holds shares, together with those held by the person’s spouse, minor children, or held by the person under others’ names, in an aggregate of 1% or more of the total number of outstanding shares of the Company or ranking in the top 10 in holdings.
A spouse, relative within the second degree of kinship, or lineal relative within the third degree of kinship, of a managerial officer under subparagraph 1 or any of the persons in the preceding two subparagraphs.
Not a director, supervisor, or employee of a corporate shareholder that directly holds 5% or more of the total number of issued shares of the company, or that ranks among the top five in shareholdings, or that designates its representative to serve as a director or supervisor of the company under Article 27, paragraph 1 or 2 of the Company Act. But not applicable in cases where the person is an independent director appointed in accordance with the laws and regulations of the local country by, and concurrently serving as such at, a company and its parent or subsidiary or a subsidiary of the same parent.
Not a director, supervisor, or employee of that other company that the company’s director seats or voting shares and those of any other company are controlled by the same person. But not applicable in cases where the person is an independent director appointed in accordance with the laws and regulations of the local country by, and concurrently serving as such at, a company and its parent or subsidiary or a subsidiary of the same parent.
Not a director (or governor), supervisor, or employee of that other company or institution that a chairperson, general manager, or person holding an equivalent position of the company and a person in any of those positions at another company or institution are the same person or are spouses. But not applicable in cases where the person is an independent director appointed in accordance with the laws and regulations of the local country by, and concurrently serving as such at, a company and its parent or subsidiary or a subsidiary of the same parent.
Not a director, supervisor, officer, or shareholder holding 5% or more of the shares, of a specified company or institution which has a financial or business relationship with the Company. But not applicable in cases where the person holds 20 percent or more and no more than 50 percent of the total number of issued shares of the Company or is an independent director appointed in accordance with the laws and regulations of the local country by, and concurrently serving as such at, a company and its parent or subsidiary or a subsidiary of the same parent.
Not a professional individual who, or an owner, partner, director, supervisor, or officer of a sole proprietorship, partnership, company, or institution that, provides auditing services to the company or any affiliate of the company, or that provides commercial, legal, financial, accounting or related services to the company or any affiliate of the company for which the provider in the past 2 years has received cumulative compensation exceeding NT$500,000, or a spouse thereof; provided, this restriction does not apply to a member of the remuneration committee, public tender offer review committee, or special committee for merger/consolidation and acquisition, who exercises powers pursuant to the Act or to the Business Mergers and Acquisitions Act or related laws or regulations.
Not having a marital relationship, or a relative within the second degree of kinship to any other director of the Company.
Not been a person of any conditions defined in Article 30 of the Company Act.
Not a governmental, juridical person or its representative as defined in Article 27 of the Company Act.

(3) Management team

2021/04/24 Unit: share

Title	Nationa lity	Name	Gend er	Date Effective	Shareholding	Shareholding	Spouse & Minor Shareholding	Spouse & Minor Shareholding	Shareholding	Shareholding	Experience`（`Education`）`	Other Position	Managers who are Spouses or Within Two Degrees of Kinship	Managers who are Spouses or Within Two Degrees of Kinship	Managers who are Spouses or Within Two Degrees of Kinship	Remar k(s) (Note)
					Shares	`％`	Shares	`％`	Shares	`％`			Title	Name	Relati on
General Manager	TW	Chang Ming- Cheng	M	2019/01/01	155,036	0.11%	`－`	`－`	`－`	`－`	College of Medicine, National Taiwan University Bachelor of Science in Department of Medical Technology Bachelor of Business Administration, University of Ottawa Product manager of B. BRAUN TAIWAN CO., LTD. Deputy General Manager of Excelsior Medical Co., Ltd. General Manager of EG Healthcare, Inc. General Manager of Jiate Excelsior Co., Ltd.	Director of Excelsior Renal Service Co., Ltd. (Hong Kong) Director of Jiate Excelsior Co., Ltd. Director of Dynamic Medical Technologies Inc. Director of Arich Enterprise Co., Ltd. Director of Visionfront Corporation Director of Renal Laboratories Sdn. Bhd. Director of Medi-Chem System Sdn. Bhd Director of Bestsmile Co., Ltd. Director of Arich Best Chain Co., Ltd. Director of Excelsior Health Foundation	None	None	None	None
Deputy General Manager	TW	Wang Ming- Ting	M	2000/10/01	63,428	0.04%	`－`	`－`	`－`	`－`	Master of Business Administration, University of Southern Queensland, Australia Department of Accounting and Statistics, National Taichung College of Business Section Manager of Accounting Section and Examination Section, Taiwan Land Development Investment Trust Corporation Specialist of Bank Of Communications	Director of Dynamic Medical Technologies Inc. Director of Arich Enterprise Co., Ltd. Supervisor of Bestchain Healthtaiwan Co., Ltd. Director of Excelsior Investment Co., Ltd. Director of Excelsior Group Holdings Co., Ltd. Dirtctor of Xuan Hui Investment Co., Ltd. Dirtctor of Excelsior Asset Management Co., Ltd. General Manager of Excelsior Asset Management Co., Ltd. Supervisor of Excelsior Beauty Co., Ltd. Supervisor of CYJ International Taiwan Inc. Director of Join Fun Co., Ltd. Chairman of Arich Best Chain Co., Ltd. Director of Excelsior Health Foundation Supervisor of Chia En Long-term Care Corporation	None	None	None	None
CFO	TW	Chou Cheng- Hsiao	M	2011/08/03	47,912	0.03%	`－`	`－`	`－`	`－`	Bachelor of Accountancy, National Chengchi University Assist Manager of Audit Department, Deloitte & Touche Taiwan Accounting Division manager of Excelsior Medical Co., Ltd.	Supervisor of Bestsmile Co., Ltd. Director of Visionfront Corporation Supervisor of SinoExcelsior Investment Inc. Supervisor of Arich Best Chain Co., Ltd. Supervisor of Excelsior Asset Management Co., Ltd. Supervisor of Asia Best Life Care Technology Co., Ltd. Director of Excelsior Health Foundation	None	None	None	None

Note: Where the chairperson of the board of directors and the general manager or person of an equivalent post (the highest level manager) of a company are the same person, spouses, or relatives within the first degree of kinship, an explanation shall be given of the reason for, reasonableness, necessity thereof, and the measures adopted in response thereto. For example, increase the number of independent directors, and a majority of the directors may not serve concurrently as an employee or managerial officer.

(4) Remuneration of directors, general managers and deputy general managers

A. Remuneration of directors and independent directors

Unit: NT$ thousands

Title	Name				Remun	eration	eration			Ratio of Total Remuneration (A+B+C+D) to Net Income (%) (Note 10)	Ratio of Total Remuneration (A+B+C+D) to Net Income (%) (Note 10)	Relevant Re	Relevant Re	muneration	Received by Directors Who are Also Employees	Received by Directors Who are Also Employees	Received by Directors Who are Also Employees	Received by Directors Who are Also Employees	Received by Directors Who are Also Employees	Ratio of Total Compensation (A+B+C+D+E+F+G) to Net Income (%) (Note 10)	Ratio of Total Compensation (A+B+C+D+E+F+G) to Net Income (%) (Note 10)	Remunerat ion from ventures other than subsidiarie s or from the parent company (Note 11)
		Base Compensation (A) (Note 2)		Severanc	e Pay (B)	Directors Compensation(C) (Note 3)		Allowances (D) (Note 4)				Salary, Bonuses, and Allowances (E) (Note 5)		Severanc	e Pay (F)	Employee Compensation (G) (Note 6)
		The Company	All Companies in the Consolidat ed Financial Statements (Note 7)	The Company	All Companies in the Consolidat ed Financial Statements (Note 7)	The Company	All Companies in the Consolidat ed Financial Statements (Note 7)	The Company	All Companies in the Consolidate d Financial Statements (Note 7)	The Company	All Companies in the Consolidat ed Financial Statements (Note 7)	The Company	All Companies in the Consolidat ed Financial Statements (Note 7)	The Company	All Companies in the Consolidat ed Financial Statements (Note 7)	The Company		All Companies in the Consolidated Financial Statements (Note 7)		The Company	All Companies in the Consolidat ed Financial Statements (Note 7)
																Cash	Stock	Cash	Stock
Chairman	Fu Hui-Tung	7,444	7,751	108	108	15,801	20,877	731	821	4.21%	5.17%	2,868	4,056	108	180	783	0	783	0	4.87%	6.05%	12,289
Director	Excelsior Group Holdings Co., Ltd.
Representa tive of juristic- person director	Excelsior Group Holdings Co., Ltd. Representative :Chen Tun- Ling
Representa tive of juristic- person director	Excelsior Group Holdings Co., Ltd. Representative :Kao Shen
Director	Wang Ming- Ting
Director	Hsieh Yen- Sheng
Director	Fu Jo-Hsuan
Independe nt Director	Chan Tzu- Sheng	0	480	0	0	2,388	2,388	192	222	0.45%	0.54%	0	0	0	0	0	0	0	0	0.45%	0.54%	0
Independe nt Director	Chang Wu-I
Independe nt Director	Kuo Yu-Chia
1. Please describe the policy, system, standard, and structure of remuneration to independent directors, and the correlation between duties, risk, and time input with the amount of remuneration:Compensations for the Company's Independent Directors are set in accordance with the Company's Articles of Incorporation, remuneration policy and procedures, and in reference to the Company's current operational scale and business conditions, and paid after approval from the Remuneration Committee and a resolutions from the Board of Directors.`。` 2. In addition to the above remuneration, director remuneration shall be disclosed as follows when received from companies included in the consolidated financial statements in the most recent year to compensate directors for their services, such as being independent contractors`：`None.

Please describe the policy, system, standard, and structure of remuneration to independent directors, and the correlation between duties, risk, and time input with the amount of remuneration:Compensations for the Company's Independent Directors are set in accordance with the Company's Articles of Incorporation, remuneration policy and procedures, and in reference to the Company's current operational scale and business conditions, and paid after approval from the Remuneration Committee and a resolutions from the Board of Directors. 。
In addition to the above remuneration, director remuneration shall be disclosed as follows when received from companies included in the consolidated financial statements in the most recent year to compensate directors for their services, such as being independent contractors ： None.

Remuneration grading table of directors and independent directors

Range of Remuneration	Name of Directors	Name of Directors	Name of Directors	Name of Directors
	Total of(A+B+C+D)		Total of(A+B+C+D+E+F+G)
	The Company (Note 8)	Companies in the Consolidated Financial Statements (Note 9)(H)	The Company (Note 8)	Companies in the Consolidated Financial Statements (Note 9)(H)
Less thanNT$ 1,000,000	Excelsior Group Holdings Co., Ltd., Excelsior Group Holdings Co., Ltd. representatives:Chen Tun-Ling, Hsieh Yen-Sheng, Chan Tzu-Sheng, Chang Wu-Yi,Kuo Yu-Chia	Excelsior Group Holdings Co., Ltd., Excelsior Group Holdings Co., Ltd. representatives:Chen Tun-Ling, Hsieh Yen-Sheng, Kuo Yu-Chia	Excelsior Group Holdings Co., Ltd., Excelsior Group Holdings Co., Ltd. representatives:Chen Tun-Ling, Hsieh Yen-Sheng, Chan Tzu-Sheng, Chang Wu-Yi,Kuo Yu-Chia	Excelsior Group Holdings Co., Ltd., Excelsior Group Holdings Co., Ltd. representatives:Chen Tun-Ling, Hsieh Yen-Sheng, Kuo Yu-Chia
NT$1,000,000 ~ NT$1,999,999	Wang Ming-Ting	Wang Ming-Ting, Chan Tzu- Sheng,ChangWu-Yi		Chan Tzu-Sheng, Chang Wu-Yi
NT$2,000,000 ~ NT$3,499,999
NT$3,500,000 ~ NT$4,999,999	Excelsior Group Holdings Co., Ltd. representatives:Kao Shen		Excelsior Group Holdings Co., Ltd. representatives:Kao Shen, Wang Ming-Ting
NT$5,000,000 ~ NT$9,999,999	Fu Jo-Hsuan	Excelsior Group Holdings Co., Ltd. representatives:Kao Shen, Fu Jo- Hsuan	Fu Jo-Hsuan	Excelsior Group Holdings Co., Ltd. representatives:Kao Shen, Fu Jo- Hsuan,WangMing-Ting
NT$10,000,000 ~ NT$14,999,999	Fu Hui-Tung	Fu Hui-Tung	Fu Hui-Tung	Fu Hui-Tung
NT$15,000,000 ~ NT$29,999,999
NT$30,000,000 ~ NT$49,999,999
NT$50,000,000 ~ NT$99,999,999
Greater than or equal to NT$100,000,000
Total	10	10	10	10

Note 1: The Directors' names should be listed separately (if a corporate shareholder, the corporate name and the representative's name should be listed separately), and the payments should be consolidated for disclosure. The amount of cash payment is disclosed in a summary. If the director is also the general manager or deputy general manager, this table and the following table (3-1) or (2-2) shall be filled in.
Note 2: The Director's remuneration for the most recent year (including salary, job allowances, Retirement Pension, various bonuses and incentives).

Note 3: The latest amount of Director's remuneration as passed by the board of directors.

Note 4: The latest annual business execution expenses of the Director (including transportation costs, special expenses, various subsidies, dormitory expenses, car expenses and other physical provisions). In case of the provision of expenses for housing, cars and other means of transportation or exclusive personal expenses, please disclose the nature and cost of the assets provided, the actual or fair market price of the rent, gasoline and other payments. If a driver is provided, please indicate the Company's relevant remuneration to the driver, but the amount should not be included in the remuneration.
Note 5: The latest salary, job allowances, Retirement Pension, various bonuses, incentives, car expenses, special expenses, various subsidies, dormitory expenses, car expenses and other physical provisions for the Director's other jobs (including the positions of General Manager, Deputy General Manager, Manager and other positions). In case of the provision of expenses for housing, cars and other means of transportation or exclusive personal expenses, please disclose the nature and cost of the assets provided, the actual or fair market price of the rent, gasoline and other payments. If a driver is provided, please indicate the Company's relevant remuneration to the driver, but the amount should not be included in the remuneration. According to IFRS 2's recognition of remuneration in "Share-Based Payments", the remuneration shall include employee stock options, restricted-right employee shares and share subscription from participation in cash capital increase.

Note 6: If a Director receives employee remuneration (including stock and cash) on his/her other job(s) (including the positions of General Manager, Deputy Manager, Manager and other positions) in the latest year, please disclose the amount of employee remuneration as passed by the board of directors in the latest year. If the amount cannot be estimated, it should be calculated based on the percentage of the actual amount distributed last year, and Appendix 1-3 should be filled out.
Note 7: The total remuneration paid by all the companies (including the Company) in the consolidated report to the Company's Director.
Note 8: The total remuneration paid by the Company to each Director; the Director’s name should be disclosed in the respective tier.
Note 9: The total remuneration paid by all the companies (including the Company) in the consolidated report to each of the Company's Directors should be disclosed, and the Director's name s should be disclosed in the respective tier.
Note 10: Net profit after tax refers to the net after-tax profit for the latest year. If the International Financial Reporting Standards have been adopted, then it is the net after-tax profit of the individual company or the respective financial statement.
Note 11: a. In this field the amount of remuneration paid to the Director by the Company's re-invested businesses other than the subsidiaries should be clearly indicated.
b.If the Director receives remuneration from the Company's re-invested businesses other than the subsidiaries, such remuneration should be incorporated into column I of the Remuneration Tiers Table, and the name of the field should be changed to "All re-invested businesses".
c.Remuneration refers to the compensation, reward (including that for an employee, director or supervisor) and business execution expenses received by the Company's Director for acting as a director, supervisor or manager of the Company's invested businesses other than the subsidiaries.
The contents of the remuneration disclosed in this table are different from those in the Income Tax Law. Therefore, this statement is for the purpose of disclosure but not for taxation.

B. Remuneration of the general manager and deputy general manager

Title	Name	Salary(A) (Note 2)	Salary(A) (Note 2)	Severance Pay (B)	Severance Pay (B)	Bonuses and Allowances (C) (Note 3)	Bonuses and Allowances (C) (Note 3)	Employee Compensation (D) (Note 4)	Employee Compensation (D) (Note 4)	Employee Compensation (D) (Note 4)	Employee Compensation (D) (Note 4)	Ratio of Total Compensation (A+B+C+D) to Net Income (%) (Note 8)	Ratio of Total Compensation (A+B+C+D) to Net Income (%) (Note 8)	Remunera tion from Ventures other than Subsidiari es or from the Parent Company (Note 9)
		The Company	All Companies in the Consolidated Financial Statements	The Company	All Companies in the Consolidated Financial Statements	The Company	All Companies in the Consolidated Financial Statements	The Company		All Companies in the Consolidated Financial Statements (Note 5)		The Company	All Companies in the Consolidat ed Financial Statements
								Cash	Stock	Cash	Stock
General Manager	Chang Ming- Cheng	7,226	8,341	216	288	797	870	3,398	0	3,398	0	2.04%	2.26%	100
Deputy General Manager	Wang Ming- Ting

Remuneration Grading Table of the General Manager and Deputy General Manager

Remuneration Grading Table of	the General Manager and Deputy General Manager	the General Manager and Deputy General Manager
Range of Remuneration	Name of General Manager and DeputyGeneral Manager
	The Company(Note 6)	All Companies in the Consolidated Financial Statements(Note 7)(E)
Less than NT$ 1,000,000
NT$1,000,000 ~ NT$1,999,999
NT$2,000,000 ~ NT$3,499,999
NT$3,500,000 ~ NT$4,999,999	Wang Ming-Ting
NT$5,000,000 ~ NT$9,999,999	Chang Ming-Cheng	Chang Ming-Cheng`,`Wang Ming-Ting
NT$10,000,000 ~ NT$14,999,999
NT$15,000,000 ~ NT$29,999,999
NT$30,000,000 ~ NT$49,999,999
NT$50,000,000 ~ NT$99,999,999
Greater than or equal to NT$100,000,000
Total	2	2

Note 1: The General Managers and Deputy General Managers’ names should be listed separately, and the payments should be consolidated for disclosure. If the Directors are also General Managers or Deputy General Managers, this table and the table above (1-1) or (1-2) shall be filled in.
Note 2: The latest amount of the General Manager’s and the Deputy General Managers’ remunerations (including salary, job allowances and severance payment).
Note 3: The latest annual business execution expenses of the General Manager and the Deputy General Managers (including transportation costs, special expenses, various subsidies, dormitory expenses, car expenses and other physical provisions). In case of the provision of expenses for housing, cars and other means of transportation or exclusive personal expenses, please disclose the nature and cost of the assets provided, the actual or fair market price of the rent, gasoline and other payments. If a driver is provided, please indicate the Company's relevant remuneration to the driver, but the amount should not be included in the remuneration. According to IFRS 2's recognition of remuneration in "Share-Based Payments", the remuneration shall also include employee stock options, restricted-right employee shares and share subscription from participation in cash capital increase.
Note 4: The employee remuneration (including stock and cash) distributed to the General Manager or Deputy General Manager as passed by the board of directors in the latest year. If the amount cannot be estimated, it should be calculated based on the percentage of the actual amount distributed last year, and Appendix 1-3 should be filled out. Net profit after tax refers to the net after-tax profit for the latest year. If the International Financial Reporting Standards have been adopted, then it is the net after-tax profit of the individual company or the respective financial statement.
Note 5: The total remuneration paid by all the companies (including the Company) in the consolidated report to the Company's General Manager and Deputy General Managers.
Note 6: The total remuneration paid by the Company to each General Manager and Deputy General Manager; the General Manager’s and the Deputy General Managers' names are to be disclosed in the respective tiers
Note 7: The total remuneration paid by all the companies (including the Company) in the consolidated report to each of the Company's General Manager and Deputy General Managers should be disclosed, and the General Manager’s and the Deputy General Managers’ names should be disclosed in the respective tier.
Note 8: Net profit after tax refers to the net after-tax profit for the latest year. If the International Financial Reporting Standards have been adopted, then it is the net after-tax profit of the individual company or the respective financial statement.
Note 9: a. In this field the amount of remuneration paid to the General Manager or the Deputy General Managers by the Company's re-invested businesses other than the subsidiaries should be clearly indicated.
b.If the General Manager and Deputy General Managers receive remuneration from the Company's re-invested businesses other than the subsidiaries, such remuneration should be incorporated into column D of the Remuneration Tiers Table, and the name of the field should be changed to "All re-invested businesses".
c.Remuneration refers to the compensation, reward (including that for an employee, director or supervisor) and business execution expenses received by the Company's General Manager or Deputy General Manager for acting as a director, supervisor or manager of the Company's re-invested businesses other than the subsidiaries.
The contents of the remuneration disclosed in this table are different from those in the Income Tax Law. Therefore, this statement is for the purpose of disclosure but not for taxation.

C.General Manager and Deputy General Manager

					Unit: NT$ thousands	Unit: NT$ thousands
Title		Name	Stock	Cash	Total	Ratio of Total Amount to Net Income (%)
Manager	General Manager	Chang Ming-Cheng	0	4,601	4,601	0.80%
	Deputy General Manager	Wang Ming-Ting
	CFO	Chou Cheng-Hsiao

Note : The latest amount of the manager’s employee remuneration as passed by the board of directors (including shares and cash) in the latest year. Net profit after tax refers to the net after-tax profit for the latest year. If the International Financial Reporting Standards have been adopted, then it is the net after-tax profit of the individual company or the respective financial statement.

(5) Performance assessment and remuneration policy of directors and managers

According to the Article 25 of the Company’s Articles of Association, the Company should contribute no less than 1% of the profit as employee compensation and no more than 5% as director remuneration when there is profit for the year. According to the Company’s Remuneration Committee Charter, the payment principles for directors and managers’ remuneration are as follows:

A. Performance assessments and compensation levels of directors and managers shall take into account the general pay levels in the industry. Also to be evaluated are the reasonableness of the correlation between the individual’s performance and this Company’s operational performance and future risk exposure.
B. Reasonableness shall be taken into account when the contents and amounts of the compensation of the directors and managers are set. It is not advisable for decisions on the compensation of the directors and managers to run contrary to financial performance to a material extent. It is not advisable for said compensation to be higher than that in the preceding year in the event of a material decline in profits or of long-term losses.

3. Implementation of Corporate Governance

(1) Board of directors

A total of 6 meetings (A) of the Board of Directors were held in the previous eriod. The attendance of directors were as follows: p

Title	Name	Attendance in Person(B)	By Proxy	Attendance Rate (%) `【Ｂ`/`Ａ】`
Chairman	Fu Hui-Tung	6	0	100%
Director	Excelsior Group Holdings Co., Ltd. Representative:Chen Tun-Ling	6	0	100%
Director	Excelsior Group Holdings Co., Ltd. Representative:Kao Shen	6	0	100%
Director	WangMing-Ting	6	0	100%
Director	Hsieh Yen-Sheng	6	0	100%
Director	Fu Jo-Hsuan	6	0	100%
Independent director	Chan Tzu-Sheng	5	1	83%
Independent director	Chang Wu-I	6	0	100%
Independent director	Kuo Yu-Chia	6	0	100%
Other mentionable items: 1.If any of the following circumstances occur, the dates of the meetings, sessions, contents of motion, all independent directors’ opinions and the company’s response should be specified: (1)Matters referred to in Article 14-3 of the Securities and Exchange Act: The Article 14-3 of the Securities and Exchange Act is not be applicable because the Company has established the Audit Committee. Please refer to the “Audit Committee” on page 41 of the Annual Report. (2)Except for the matters listed in the preceding paragraph, other resolutions from the Board of Directors in which an Independent Director has a dissenting or qualified opinion that has been recorded or documented: None.Please see page 80 for important resolutions from the Board of Directors in the most recent year as well as the current year up to the date of publication of the Annual Report. 2.If there are directors’ avoidance of motions in conflict of interest, the directors’ names, contents of motion, causes for avoidance and voting should be specified: (1) The 7th Meeting of the 12th term on January 17, 2020 i. Reviewing of amendment of year-end bonus for managers in 2019 by the Company’s Remuneration Committee. Resolution was approved without dissidence by the chairman and all other Directors in attendance (including Independent Directors). (Vice Chairman Kao Shen and Director Wang Ming-Ting recused themselves from the voting to prevent conflicts of interest). (2) The 7th Meeting of the 12th term on August 06, 2020 i. Reviewing and approving of the employees’ compensations for managers in 2019. Resolution was approved without dissidence by the chairman and all other Directors in attendance (including Independent Directors). (Vice Chairman Kao Shen did not participate in the vote due to official departure).

(3) The 13th Meeting of the 12th term on January 21, 2021
i. Reviewing and approving of the 2th employees’ compensations for managers in 2019. Resolution was approved without dissidence by the chairman and all other Directors in attendance (including Independent Directors). (Vice Chairman Kao Shen and Director Wang Ming-Ting recused themselves from the voting to prevent conflicts of interest).
ii. Reviewing of year-end bonus for managers in 2020 by the Company’s Remuneration Committee. Resolution was approved without dissidence by the chairman and all other Directors in attendance (including Independent Directors). (Vice Chairman Kao Shen and Director Wang Ming-Ting recused themselves from the voting to prevent conflicts of interest).

Except for the preceding resolutions, no other motions in conflict of interest.

3. Implementation of the Board of Directors

(3) The 13th Meeting of the 12th term on January 21, 2021 i. Reviewing and approving of the 2th employees’ compensations for managers in 2019. Resolution was approved without dissidence by the chairman and all other Directors in attendance (including Independent Directors). (Vice Chairman Kao Shen and Director Wang Ming-Ting recused themselves from the voting to prevent conflicts of interest). ii. Reviewing of year-end bonus for managers in 2020 by the Company’s Remuneration Committee. Resolution was approved without dissidence by the chairman and all other Directors in attendance (including Independent Directors). (Vice Chairman Kao Shen and Director Wang Ming-Ting recused themselves from the voting to prevent conflicts of interest). Except for the preceding resolutions, no other motions in conflict of interest. 3. Implementation of the Board of Directors	(3) The 13th Meeting of the 12th term on January 21, 2021 i. Reviewing and approving of the 2th employees’ compensations for managers in 2019. Resolution was approved without dissidence by the chairman and all other Directors in attendance (including Independent Directors). (Vice Chairman Kao Shen and Director Wang Ming-Ting recused themselves from the voting to prevent conflicts of interest). ii. Reviewing of year-end bonus for managers in 2020 by the Company’s Remuneration Committee. Resolution was approved without dissidence by the chairman and all other Directors in attendance (including Independent Directors). (Vice Chairman Kao Shen and Director Wang Ming-Ting recused themselves from the voting to prevent conflicts of interest). Except for the preceding resolutions, no other motions in conflict of interest. 3. Implementation of the Board of Directors	(3) The 13th Meeting of the 12th term on January 21, 2021 i. Reviewing and approving of the 2th employees’ compensations for managers in 2019. Resolution was approved without dissidence by the chairman and all other Directors in attendance (including Independent Directors). (Vice Chairman Kao Shen and Director Wang Ming-Ting recused themselves from the voting to prevent conflicts of interest). ii. Reviewing of year-end bonus for managers in 2020 by the Company’s Remuneration Committee. Resolution was approved without dissidence by the chairman and all other Directors in attendance (including Independent Directors). (Vice Chairman Kao Shen and Director Wang Ming-Ting recused themselves from the voting to prevent conflicts of interest). Except for the preceding resolutions, no other motions in conflict of interest. 3. Implementation of the Board of Directors	(3) The 13th Meeting of the 12th term on January 21, 2021 i. Reviewing and approving of the 2th employees’ compensations for managers in 2019. Resolution was approved without dissidence by the chairman and all other Directors in attendance (including Independent Directors). (Vice Chairman Kao Shen and Director Wang Ming-Ting recused themselves from the voting to prevent conflicts of interest). ii. Reviewing of year-end bonus for managers in 2020 by the Company’s Remuneration Committee. Resolution was approved without dissidence by the chairman and all other Directors in attendance (including Independent Directors). (Vice Chairman Kao Shen and Director Wang Ming-Ting recused themselves from the voting to prevent conflicts of interest). Except for the preceding resolutions, no other motions in conflict of interest. 3. Implementation of the Board of Directors	(3) The 13th Meeting of the 12th term on January 21, 2021 i. Reviewing and approving of the 2th employees’ compensations for managers in 2019. Resolution was approved without dissidence by the chairman and all other Directors in attendance (including Independent Directors). (Vice Chairman Kao Shen and Director Wang Ming-Ting recused themselves from the voting to prevent conflicts of interest). ii. Reviewing of year-end bonus for managers in 2020 by the Company’s Remuneration Committee. Resolution was approved without dissidence by the chairman and all other Directors in attendance (including Independent Directors). (Vice Chairman Kao Shen and Director Wang Ming-Ting recused themselves from the voting to prevent conflicts of interest). Except for the preceding resolutions, no other motions in conflict of interest. 3. Implementation of the Board of Directors	(3) The 13th Meeting of the 12th term on January 21, 2021 i. Reviewing and approving of the 2th employees’ compensations for managers in 2019. Resolution was approved without dissidence by the chairman and all other Directors in attendance (including Independent Directors). (Vice Chairman Kao Shen and Director Wang Ming-Ting recused themselves from the voting to prevent conflicts of interest). ii. Reviewing of year-end bonus for managers in 2020 by the Company’s Remuneration Committee. Resolution was approved without dissidence by the chairman and all other Directors in attendance (including Independent Directors). (Vice Chairman Kao Shen and Director Wang Ming-Ting recused themselves from the voting to prevent conflicts of interest). Except for the preceding resolutions, no other motions in conflict of interest. 3. Implementation of the Board of Directors	(3) The 13th Meeting of the 12th term on January 21, 2021 i. Reviewing and approving of the 2th employees’ compensations for managers in 2019. Resolution was approved without dissidence by the chairman and all other Directors in attendance (including Independent Directors). (Vice Chairman Kao Shen and Director Wang Ming-Ting recused themselves from the voting to prevent conflicts of interest). ii. Reviewing of year-end bonus for managers in 2020 by the Company’s Remuneration Committee. Resolution was approved without dissidence by the chairman and all other Directors in attendance (including Independent Directors). (Vice Chairman Kao Shen and Director Wang Ming-Ting recused themselves from the voting to prevent conflicts of interest). Except for the preceding resolutions, no other motions in conflict of interest. 3. Implementation of the Board of Directors
	Evalua tion Cycles	Evaluation Periods	Scope of Evaluatio n	Method of Evaluation	Evaluation Content
	Once a year.	2020/1/1- 2020/12/31	Cover the evaluatio n of the board as a whole, individua l directors and functional committe es.	Including the overall operation of the board of directors, individual directors and functional committees , and the participatio n, awareness of the duties and continuing education of directors to be evaluated.	(1)Evaluating the performance of the board of directors: Including participation in the operation of the company, the quality of the board of directors’ decision making, composition and structure of the board of directors, election and continuing education of the directors and internal control. (2)Evaluating the performance of individual directors: Including alignment of the goals and missions of the company, awareness of the duties of a director, participation in the operation of the company, management of internal relationship and communication, the director’s professionalism and continuing education and internal control. (3) Evaluating the performance of functional committees: Including participation in the operation of the company, awareness of the duties of the functional committee, improvement of quality of decisions made by the fnctional committee, makeup of the functional committee and election of its members and internal control.

Measures taken to strengthen the functionality of the Board of Directors in the current year and most recent year
(1) The Company has further established the “Standard Operating Procedures for the Handling of Requests” of Members of the Board of Directors on May 2, 2019 to facilitate the Directors to carry out their duties and to enhance the effectiveness of the Board.
(2) The Company has completed the performance evaluation of the Board of Directors and functional committees, and the self-evaluation of the Board of Directors for 2020, and results of which have been submitted to the Board of Directors.
(3) The Company has amended the “Regulations Governing Procedure for Board of Directors Meetings” on March 12, 2020 to specify the handling procedures for motions that present conflicts of interest to the Directors, thereby strengthening corporate governance.
(4) The Company has amended the “Regulations Governing the Evaluation of the Performance of the Board of Directors” on March 12, 2021 to specify the performance evaluation content of the Board of Directors and members.

(2) Audit committee

A total of 5 Audit Committee meetings (A) were held in the previous period. The attendance of the inde endent directors was as follows ： p

Title	Name	Attendance in Person(B)	By Proxy	Attendance Rate (%) `【Ｂ`/`Ａ】`
Independent director	Chan Tzu-Sheng	4	1	80%
Independent director	Chang Wu-Yi	5	0	100%
Independent director	Kuo Yu-Chia	5	0	100%
Other mentionable items: 1. If any of the following circumstances, the dates of the meetings, sessions, contents of motion, Audit Committee’s resolutions and the Company’s response to the Audit Committee’s opinion should be specified: (1) For items listed in Article 14-5 of the Securities and Exchange Act: Please see the below table. (2)Except the items in the preceding issues, other resolutions which was not approved by the Audit Committee but approved by two-thirds of all Board of Directors members: None. For items listed in Article 14-5 of the Securities and Exchange Act Board of Directors Session and Date Content Resolutio n of the Audit Committe e The Company’s Response to the Opinions of the Audit Committee The 8th meeting of the 12st term 2020.03.12 1.Preparation 2019 Internal Control System Statement of the Company. 2.The Company’s 2019 Financial Statements. 3.The Company’s 2019 earnings distribution proposal. 4.Proposal of amendment of “Articles of Incoporation.” 5.Proposal of amendment of “Assets Acquisition or Disposition Procedures.” 6.Proposal of amendment of “Rules of Procedure for Board of Directors Meetings.” 7.Proposal of amendment of “Audit Committee Charter.” 8.Proposal of amendment of “Remuneration Committee Charter.” 9.Proposal of endorsements for transacting counterparty Bestchain Healthtaiwan Co., Ltd. 10.The Company to provide endorsements/guarantees for new financing credit of NT$50 million from Xihu Branch of Bank SinoPac on behalf of Excelsior Asset Management Co., Ltd. 11.The Company to provide endorsements/guarantees for new financing credit of NT$50 million from Nanjing East Road Branch of Yuanta Bank on behalf of Excelsior Asset Management Co.,Ltd. Approved by the Audit Committee and submitted to the Board of Directors for approval. All motions were unanimously approved by all attending Directors without dissidence. The 9th meeting of the 12st term 2020.04.22 1.The Company’s participation in the subsidiary Arich Enterprise Co., Ltd.’s capital injection by issuance of new shares. 2.The Company to provide endorsements/guarantees for financing credit extension of NT$80 million from CitiBank Taiwan on behalf of Bestchain Healthtaiwan Co., Ltd. 3.The Company to provide endorsements/guarantees for new financing credit of NT$80 million from Zhonghe Approved by the Audit Committee and submitted to the Board of Directors All motions were unanimously approved by all attending Directors without dissidence.

		Branch of First Bank on behalf of Bestchain Healthtaiwan Co.,Ltd.	for approval.
The 10th meeting of the 12st term	2020.05.05	1.Proposal of the evaluation results for the independence and suitability of the Company’s CPA. 2.Routine review of the 2020 CPA audit fee. 3.The 2020 Q1 consolidated financial report. 4.The Company to provide contract performance guarantee for transacting counterparty Bestchain Healthtaiwan Co., Ltd. 5.The Company to provide endorsements/guarantees for financing credit extension of NT$100 million from Xihu Branch of Bank SinoPac on behalf of Bestchain Healthtaiwan Co.,Ltd.	Approved by the Audit Committee and submitted to the Board of Directors for approval.	All motions were unanimously approved by all attending Directors without dissidence.
The 11th meeting of the 12st term	2020.08.06	1.The 2020 Q2 consolidated financial report. 2.Proposal of amendment of “Procedures for Lending Funds to Other Parties.” 3.The Company to provide contract performance guarantee for transacting counterparty Bestchain Healthtaiwan Co., Ltd. 4.The Company to provide endorsements/guarantees for new financing credit of USD$2.5million from Citibank on behalf of Renal Laboratories Sdn. Bhd.. 5.The Company to provide endorsements/guarantees for new financing credit of USD$0.5million from Citibank on behalf of Medi-Chem Systems Sdn. Bhd.. 6.The Company to provide endorsements/guarantees for new financing credit of peso $50 million from Manila Branch of Cathay United Bank on behalf of EG Healthcare, Inc. 7.The Company to provide endorsements/guarantees for financing credit extension of NT$100 million from Corporate Banking Division of Cathay United Bank on behalf of Bestchain Healthtaiwan Co.,Ltd.	Approved by the Audit Committee and submitted to the Board of Directors for approval.	All motions were unanimously approved by all attending Directors without dissidence.
The 12th meeting of the 12st term	2020.11.10	1.The 2020 Q3 consolidated financial report. 2.To establish the Company’s 2021 audit plan. 3.The Company’s 2021 budget report. 4.The Company to provide contract performance guarantee for transacting counterparty Bestchain Healthtaiwan Co., Ltd. 5.The Company to provide contract performance guarantee for the subsidiary Renal Laboratories Sdn. Bhd.. 6.The Company to provide endorsements/guarantees for financing credit extension of NT$200 million from Taipei Branch of Taiwan Cooperative Bank on behalf of Bestchain Healthtaiwan Co., Ltd. 7.The Company to provide endorsements/guarantees for financing credit extension of NT$100 million from Nanjing East Road Branch of Hua Nan Bank on behalf of Bestchain Healthtaiwan Co.,Ltd.	Approved by the Audit Committee and submitted to the Board of Directors for approval.	All motions were unanimously approved by all attending Directors without dissidence.

If there are independent directors’ avoidance of motions in conflict of interest, the directors’ names, contents of motion, causes for avoidance and voting should be specified: None.
Communications between the independent directors, the Company’s chief internal auditor and CPAs (e.g. the items, methods and results of audits of corporate finance or operations, etc.): the Company convenes at least one Audit Committee meeting in each quarter, in which Independent Directors can directly communicate with the Company’s finance and accounting supervisor, audit supervisor, and CPA in regards to the Company’s financial and business status. When reviewing financial reports, the Independent Directors can further discuss with CPA as well as receive explanations from finance and accounting supervisors. Please see the Company’s website on the Shareholders section for relevant communications in 2020.

(3) The state of the Company’s implementation of corporate governance, any variance from the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies, and the reason for any such variance

Evaluation Item	Implementation status	Implementation status	Implementation status	Deviations from the “Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Explanation
A. Does the Company establish and disclose the Corporate Governance Best Practice Principles based on “Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies?”	V		1. To formulate a positive corporate governance system and to comply with the indicators of the corporate governance evaluation, the Company’s Board of Directors has enacted the “Corporate Governance Best Practice Principles” in reference to the regulations from the “Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies”collectively formulated by the Taiwan Stock Exchange and the Taipei Exchange (GreTai Securities Market) and in line with the Company’s current practices on May 7, 2015. 2. The Company has implemented the relevant standards in the “Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies” and its own “Corporate Governance Best Practice Principles” in day-to-day operations, and regularly reviews the status of implementing corporate governance and improves accordingly. There is no significant variance found in relevant implementations. Principles and standards on corporate governance have been disclosed on the Governance Section of the Company’s website (http://www.excelsiormedical.com.tw/) and the Market Observation Post System (MOPS).	Comply

Evaluation Item			Implementation status	Deviations from the “Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Explanation
B. Shareholding structure & shareholders’ rights
a. Does the Company establish an internal procedure for handling shareholder proposals, inquiries, disputes, and litigations? Are such matters handled according to the internal procedure? b. Does the Company maintain a register of major shareholders with controlling power as well as a register of persons exercising ultimate control over those major shareholders? c. Does the Company establish and enforce risk control and firewall systems with its affiliates?	V V V		Spokesperson and deputy spokesperson have been set up at the Company, Dynamic Medical Technologies Inc. (hereinafter “DMT”) and Arich Enterprise Co., Ltd. (hereinafter “Arich”) to answer suggestions from the shareholders. No disputes have occurred up to the date of publication of the Report. The Company, DMT, and Arich maintain a register of major shareholders with controlling power as well as register of persons exercising ultimate control over those major shareholders via the reporting on shares and pledges from insiders as as well as the shareholders' register provided by the Taiwan Depository & Clearing Corporation. On top of implementations in accordance with various procedures, the Company also enforce risk control mechanism through appointing legal representatives to participate in the decision-making and management of various affiliated businesses.	Comply Comply Comply

Evaluation Item	Implementation status	Implementation status	Implementation status	Deviations from the “Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Explanation
d. Does the Company stipulate internal rules that prohibit company insiders from trading securities using information not disclosed to the market?	V		The Company and DMT have both established “Procedures for Handling Material Inside Information” and disclosure of the handling of all material inside information is carried out accordingly. Arich has established the “Procedures for Ethical Management and Guidelines for Conduct” to specify the prohibition of relevant matters. In addition, to facilitate compliance with relevant regulations, “Handbook on Guidelines for Equity Transaction from Company Insiders” is distributed to all newly appointed Directors, Supervisors, and managers of the Company.	Comply
C. Composition and responsibilities of the Board of Directors
a. Has the Board of Directors drawn up policies on diversity of its members and implemented them?	V		According to the “Corporate Governance Best Practice Principles,” directors shall have the knowledge, skills, and experience necessary to perform their duties. To achieve the ideal goal of corporate governance, the board of directors shall possess the following abilities: 1. Ability to make operational judgments. 2. Ability to perform accounting and financial analysis. 3. Ability to conduct management administration, including the operation and management of subsidiaries. 4. Ability to conduct crisis management. 5. Knowledge of the industry. 6. An international market perspective. 7. Ability to lead.	Comply

Evaluation Item	Implementation status	Implementation status	Implementation status	Deviations from the “Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Explanation
			8. Ability to make policy decisions. The Company also diversified composition of the board of directors based on the “Procedures for Election of Directors” considering the company’s organizational culture and operational development. After the by-elections of Directors in June 2019, the Company had three independent directors accounting for 33%, two external directors accounting for 22%, and directors without the company managers accounted for more than one-half of the number of directors. The board of directors currently has a seat of female directors accounting for 11%. The Company also pays attention to gender equality in the composition of the board of directors. The target ratio of female directors in the future is 20% or more. The board of directors diversify policy on the composition of the board and exposes it on the company’s website and the Market Observation Post System (MOPS). In addition, DMT and Arich have also set up three seats of Independent Directors each, and all companies’ relevant practices are in line with applicable laws. Current composition and backgrounds of the Board Directors are described as the following:

		Implementation status	Implementation status	Implementation status	Implementation status	Implementation status	Implementation status	Implementation status	Implementation status	Implementation status	Implementation status	Implementation status	Implementation status	Implementation status	Implementation status	Implementation status	Implementation status
Yes	No					Explanation
		Title	Name	Cou ntry	Gen der	Age				Terms Years of Independen t Director			Note 1	Note 2	Note 3	Note 4	Note 5
						31 - 40	51 - 60	61 - 70	71 - 80	3 - 6 ye ar s	6 - 9 ye ar s	9 ye ar s or ab o ve
		Chairman	Fu Hui- Tung	TW	M			V					V	V
		Director	Chen Tun- Ling	TW	M			V					V	V
		Director	Kao Shen	TW	F		V						V	V	V
		Director	Wang Ming- Ting	TW	M				V				V	V	V
		Director	Hsieh Yen- Sheng	TW	M				V				V	V
		Director	Fu Jo- Hsuan	TW	M	V							V	V			V
		Independent Director	Chan Tzu- Sheng	TW	M				V			V		V	V
		Independent Director	Chang Wu-I	TW	M				V		V			V	V
		Independent Director	Kuo Yu- Chia	TW	M		V			V				V		V

Evaluation Item			Implementation status	Deviations from the “Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Explanation
b. In addition to the Remuneration Committee and Audit Committee set according to law, has the Company voluntarily set up other functional committees? c. Does the Company formu- late rules and procedures for the Board of Directors to regularly perform assess- ments of the Board of Direc- tors in each year, and sub- mits the results of such as- sessments to the Board meeting, and to use them as reference toward compensa- tions for individual Board members and nominations for re-elections? d. Does the Company regularly evaluate the independence of the CPA engaged by the Company?	V V	V	The Company has established the Remuneration Committee in December 2011 and the Audit Committee in June 2016. DMT has established the Remuneration Committee in December 2011 and the Audit committee in June 2012, while Arich has established the Remuneration Committee in December 2011 and Audit Committee in June 2012. The Company has established the “Regulations Governing the Evaluation of the Performance of the Board of Directors” and will regularly evaluate the performance of the Board in each year. Each Director will assess aspects including operations, culture, internal and external relationship management, and self-assessment of Directors, and results will be statistically compiled and submitted to the Board. The internal evaluation (Board of Directors, Audit Committee, Remuneration Committee, and Directors) for 2020 has been completed and results of which have been submitted to the Board of Directors on March 12, 2021. The Company has established the “Corporate Governance Best Practice Principles” and regularly evaluates the independence and suitability (Note 1) of the CPA based on the “Evaluation of the CPA’s Suitability and Independence” in each year. A Statement of Independence is also required of the CPA,and the evaluation results are also submitted to the	Other functional committees have not been set up, and all other corporate governance functions are carried out by each respective department based on their roles and functions. Comply Comply

Evaluation Item			Implementation status	Deviations from the “Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Explanation
			Board of Directors.
D. Does the TWSE/TPEx listed company have an adequate number of corporate governance personnel with appropriate qualifications based on the size of the company, business situations and management needs, and to appoint a chief corporate governance officer as the most senior officer to be in charge of corporate governance affairs (including but not limited to furnishing information required for business execution by directors and supervisors, handling matters relating to Board meetings and Shareholders' Meetings according to laws, and producing minutes of Board meetings and Shareholders' Meetings)?	V		The Company’s General Manager’s Office, and DMT’s and Arich’s Finance and Accounting Divisions serve as concurrent units to be in charge of corporate governance. They are responsible for providing timely information to shareholders on the MOPS or the Company’s website, furnishing information required for business execution by Directors, handling matters related to Board Meetings and Shareholders’ Meetings according to laws, and producing minutes of Board meetings and Shareholders’ Meetings and more.	Comply

Evaluation Item	Implementation status	Implementation status	Implementation status	Deviations from the “Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Explanation
E. Has the company established a channel to communicate with stakeholders (including but not limited to the shareholders, employees, customers and suppliers), and set up a stakeholder section on the Company’s website, and appropriately responded to the important corporate social responsibility issues that are essential to stakeholders?	V		The Company, DMT, and Arich have all established spokesperson system respectively, and have set up designated channels of communication and specified contact information including telephone number and email on the Shareholders section of respective Company websites. The Company has set up a Stakeholder Section at the following website: http://www.excelsiormedical.com.tw/contact.htm	Comply
F. Has the Company commissioned a professional stock affair agency to manage Shareholders’ Meetings and other relevant affairs?	V		The Company, DMT, and Arich have all appointed President Securities Corporation as the professional stock affair agency to manage Shareholders’ Meetings and other relevant affairs.	Comply
G. Information disclosure
a. Does the Company establish a website to disclose information on financial operations and corporate governance?	V		The Company, DMT, and Arich have all set up dedicated websites to disclose financial business and corporate governance information. The website of the Company is: http://www.excelsiormedical.com.tw	Comply

Evaluation Item	Implementation status	Implementation status	Implementation status	Deviations from the “Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Explanation
b. Does the Company adopt other means of information disclosure (such as establish-ing an English language website, delegating a profes-sional to collect and disclose Company information, im- plement a spokesperson sys-tem, and disclosing the pro-cess of investor conferences on the Companywebsite)?	V		The Company, DMT, and Arich have all set up dedicated personnel to be in charge of collecting and disclosing Company information, have implemented spokesperson system, and regularly held investor conferences. The above disclosure is on the company website to improve the transparency of company information.	Comply
c. Does the Company publish and file its annual financial report within two months af-ter the end of a fiscal year, and publish and file its fi-nancial reports for the first, second and third quarters as well as its operating status for each month before the specified deadline?	V		The Company, DMT, and Arich all publish and file annual financial report within three months after the end of a fiscal year, and publish and file financial reports for the first, second and third quarters as well as the operating status for each month before the specified deadline.	Partially comply

Evaluation Item	Implementation status	Implementation status	Implementation status	Deviations from the “Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Explanation
H. Does the Company have other important information on the implementation of corporate governance (including but not limited to rights and interests of employees, employee care, investor relations, supplier relations, rights of stakeholders, continuing education of Directors and Supervisors, implementation status of risk management policies and risk measurement standards, implementation status of customer policies, and purchase of liability insurance for Directors and Supervisors)?	V		1. Rights and interest of employees: On top of establishing the legally stipulated Employee Welfare Committee and Supervisory Committee of Labor Retirement Reserve to coordinate employee benefits and the planning, appropriations, safekeeping, usage, and related legal standards related to pension reserve as well as to serve as channels of communication with the Company, all measures to protect and implement employees' rights and benefits are carried out pursuant to legal standards. 2. Employee care: the Group is focused on the safety and physical and mental well-being of our employees. In terms of office design and furnishing, besides taking earthquake prevention, fire prevention, and soundproof into consideration to provide the most comfortable and safest environment to our employees, access control, security system, and surveillance cameras are also implemented on all entrances and exits on each floor. Moreover, we focus on sanitation and cleanliness of the office environment is emphasized and regularly carry out cleaning and disinfectant procedures. Air purifiers are also placed at each office to enhance the quality of workplace environment. Moreover, free health checkup is provided to each employee in each year in order to assist employees to be more aware of and to improve their health conditions. Whenever employees are faced with either difficulties, stress,or setbacks duringtheirpersonal lives or at work	Comply

Evaluation Item	Implementation status	Implementation status	Implementation status	Deviations from the “Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Explanation
			and require assistance or wish to report, the Company also arranges their immediate supervisors and the Human Resources Personnel as channels of communication to assist in problem-solving. 3. Investor relations: to protect the rights and interests of shareholders and for investors and the public to better understand the operating status of the Group, besides complying with applicable laws in disclosing relevant information on the MOPS, the Company, DMT, and Arich have further established the "Investors" section on respective company websites, and regularly update various share and financial information which the investors can query. 4. Supplier relations: the Group maintains positive interactions with all suppliers and appoints professional personnel to participate in product training and promotions with suppliers to learn about relevant knowledge on products and equipment. These engagements help to enhance quality, build partnerships, and create win-win for both parties. 5. Rights and interests of stakeholders: The websites of the Company, DMT and Arich have all established service mailbox and points of contact on the Investors section. Besides designating spokesperson and deputy spokesperson, the stock affair agency President Securities Corporation is also responsible for handlinginquiries and

Evaluation Item	Implementation status	Implementation status	Implementation status	Deviations from the “Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Explanation
			suggestions from shareholders and stakeholders of the Company. When an inquiry concerns a legal issue, a lawyer is appointed by the Company or a legal personnel will handle appropriately to maintain the rights and interests of stakeholders. 6. Continuing studies from Directors, Supervisors, and managers: The Company, DMT, and Arich provide applicable legal information and courses on professional knowledge organized by relevant units to Directors and managers from time to time, and the required continuing studies have been fulfilled in accordance with "Directions for the Implementation of Continuing Education for Directors and Supervisors of TWSE Listed and TPEx Listed Companies". Please see Note 2 for a summary of continuing studies for 2020. 7. Implementation status of risk management policies and risk measurement standards: various management methods and regulations have been enacted based on the specific industry characteristics of the Company, and risk management and measurement are carried out accordingly. 8. Implementation status of customer policies: The Company maintains positive relations and interactions with customers in order to maintain long-term, stable partnership, thereby creating win-win synergies for both the Companyand our customers.

Evaluation Item	Implementation status	Implementation status	Implementation status
	Yes	No	Explanation
			9. Purchase of liability insurance for Directors and Supervisors (1) The Company has purchased liability insurance for each Director, Supervisor, and important staff, and the insured terms are from November 2020 to November 2021, and the total insured amount is US$10 million. (2) DMT has purchased liability insurance for each Director, Supervisor, and important staff, and the insured terms are from February 2021 to February 2022, and the total insured amount is US$3 million. (3) Arich has purchased liability insurance for each Director, Supervisor, and important staff, and the insured terms are from December 2020 to December 2021,and the total insured amount is US$3 million.
I. Please provide information on the status of improvement regarding the results of Corporate Governance evaluation published by the TWSE Corporate Governance Center in the most recent year, and specify priorities and measures to improve those items that have not been improved yet: The Company will strengthen disclosure of relevant information on the Company's website to comply with standards of corporate governance. Other items that have not been improved yet will be gradually improved and implemented based on the Company'splans.

Note 1

Excelsior Medical Co., Ltd. Evaluation of the Independence and Competence of CPAs

Excelsior Medical Co., Ltd. Evaluation of the Independence and Competence of CPAs	Excelsior Medical Co., Ltd. Evaluation of the Independence and Competence of CPAs
Evaluation Indicators		Yes	No
Effect on independence from self-interest (refers to acquiring financial interests from an audit client or has a conflict of interest with audit client through other interests or relationships with the client)
The certified public accountant (CPA) doesn’t hold securities from the Company or its related companies.		v
The Companydoesn’t have a direct or indirect material financial interest with the CPA.		v
The Companydoesn’t have a material and intimate business relationshipwith the CPA.		v
The Companydoesn’t have apotential employment relationshipwith the CPA.		v
Effect on independence from self-review (Refers to reports or judgments submitted by the CPA for non-auditing services which constitute important basis in the audit or review process of financial information; or if a member of the audit service team had once served as the Company's director, supervisor, or a position in the Companywith significant influence over the audited case)
The original data isn’t prepared by the CPA used toward material or significant items for assurance engagement.		v
The CPA audit service team members haven’t served or had served within the past two years as the Company's directors, supervisors, managers, or other positions that could seriouslyimpact the audit.		v
The non-audit services performed by the CPA or its firm directly don’t affect a material item of the audit.		v
Effect of advocacy on independence (refers to when a member of the audit team acts as an advocate in support of the audit client's position or opinion,resultingin the CPA's objectivitybeingchallenged)
The CPA hasn’t advocated or mediated shares or other securities issued by the Company.		v
Except for legally authorized business, the CPA hasn’t made defense on behalf of the Companyfor legal cases or other disputes with anyother thirdparty.		v
Effect of familiarity on independence (refers to a close relationship with either the director, supervisor, or manager of the audit client, influencing a CPA or a member of the audit service team to be excessively concerned or sympathize with the audit client's interest)
A member of the audit service team isn’t a family member or relative of the Company's director, supervisor, or manager, or any other person in a position that could materiallyimpact the audit.		v
The CPA, who is a former partner from the firm, hasn’t joined the Company as a director, supervisor, manager, or in a key position to exert material influence over the audit within oneyear of disassociatingfrom the firm.		v
The CPA hasn’t accepted gifts of material value or preferential treatment from the Company's director,supervisors,managers,or substantial shareholders.		v
Effect on independence from threat. (refers to actual or perceived pressures, including attempts to exercise undue influence over members of the audit team and causing the members to be deterred from acting objectively or to clarify professional doubt)
The CPA and its firm hasn’t been threatened with litigation by the Company.		v
The CPA hasn’t provided audit assurance for the same company for seven consecutiveyears.		v
The CPA hasn’t been threatened with dismissal from a client engagement.		v
The Company hasn’t put pressure of reducing fees on any CPA to inappropriately contract the extent of the audit workperformed.		v
The CPA has issued a Statement of Independence?		v
Evaluation results	All of the aforementioned evaluation indicators comply with independence and competence.

Note 2 ： Directors’ training status:

Comp any	Title	Name	Date	Organizer	Course Name	Hours
Excelsior Medical Co., Ltd	Chairman	Fu Hui-Tung	2020/10/14	Securities and Futures Institute	Discussion about the Responsibilities of Directors and Supervisors based on Illegal Cases in Securities Market	3
			2020/10/16	Securities and Futures Institute	Enterprise Financial Crisis Warning and Type Analysis	3
	Director	Wang Ming-Ting	2020/07/17	Accounting Research and Development Foundation	Tracing “fund flows” in financial report scandals and case studyof related legal responsibility	3
			2020/08/21	Corporate Organization Association	Defense Against Hostile Takeover and Responsibilities of CompanyOwners	3
	Director	Hsieh Yen-Sheng	2020/09/21	Taiwan Stock Exchange Corporation	Corporate governance 3.0 - Sustainable Development Roadmap	3
			2020/09/30	Securities and Futures Institute	The 2020 Seminar on preventing insider trading and/or insider equitytrading	3
			2020/10/27	Securities and Futures Institute	5G technologies and application opportunities	3
	juristic-person director representative	Excelsior Group Holdings Co., Ltd. Representative:Chen Tun-Ling	2020/09/03	Securities and Futures Institute	The 2020 Seminar on preventing insider trading and/or insider equitytrading	3
			2020/11/13	Taiwan Stock Exchange Corporation	The 2020 directors’ and supervisors’ seminar of corporategovernance and enterprise integrity	3
	juristic-person director representative	Excelsior Group Holdings Co., Ltd. Representative:Kao Shen	2020/11/27	Taiwan Corporate Governance Association	Advanced Practice Sharing of Audit Committee - Towards 3.0	3
			2020/12/04	Securities and Futures Institute	Intellectual property rights management and company operatingrisks	3
	Director	Fu Jo-Hsuan	2020/10/14	Securities and Futures Institute	Discussion on Human Resources and M&A Integration Issues in the Process of Enterprise M&A	3
			2020/10/22	Securities and Futures Institute	Principles and Applications of Artificial Intelligence	3
			2020/11/24	Taiwan Corporate Governance Association	Corporate governance 3.0 - Sustainable Development Roadmap	3
	Independent Director	Chan Tzu-Sheng	2020/10/14	Securities and Futures Institute	The 2020 Seminar on preventing insider trading and/or insider equitytrading	3
			2020/10/16	Taiwan Stock Exchange Corporation	The 2020 directors’ and supervisors’ seminar of corporategovernance and enterprise integrity	3

Comp any	Title	Name	Date	Organizer	Course Name	Hours
	Independent Director	Chang Wu-I	2020/10/16	Taiwan Stock Exchange Corporation	The 2020 directors’ and supervisors’ seminar of corporategovernance and enterprise integrity	3
			2020/11/27	Taiwan Corporate Governance Association	Advanced Practice Sharing of Audit Committee - Towards 3.0	3
	Independent Director	Kuo Yu-Chia	2020/10/14	Securities and Futures Institute	The 2020 Seminar on preventing insider trading and/or insider equitytrading	3
			2020/10/16	Taiwan Stock Exchange Corporation	The 2020 directors’ and supervisors’ seminar of corporategovernance and enterprise integrity	3
Dynamic Medical Technologies inc.	Chairman	Fu Hui-Tung	2020/10/14	Securities and Futures Institute	Discussion about the Responsibilities of Directors and Supervisors based on Illegal Cases in Securities Market	3
			2020/10/16	Securities and Futures Institute	Enterprise Financial Crisis Warning and Type Analysis	3
	Director	Wang Ming-Ting	2020/07/17	Accounting Research and Development Foundation	Tracing “fund flows” in financial report scandals and case studyof related legal responsibility	3
			2020/08/21	Corporate Organization Association	Defense Against Hostile Takeover and Responsibilities of CompanyOwners	3
	Director	Fu Jo-Hsuan	2020/10/14	Securities and Futures Institute	Discussion on Human Resources and M&A Integration Issues in the Process of Enterprise M&A	3
			2020/10/22	Securities and Futures Institute	Principles and Applications of Artificial Intelligence	3
			2020/11/24	Taiwan Corporate Governance Association	Corporate governance 3.0 - Sustainable Development Roadmap	3
	Juristic-person director representative	Excelsior Medical Co., Ltd. Representative: Huang Chieh-Ching	2020/07/17	Accounting Research and Development Foundation	Tracing “fund flows” in financial report scandals and case studyof related legal responsibility	3
			2020/08/20	Accounting Research and Development Foundation	Common corporate governance deficiencies in enterprises and analysis of related laws and regulations	3
	Juristic-person director representative	Excelsior Medical Co., Ltd. Representative:Chang Ming-Cheng	2020/10/16	Taipei Exchange	The 2020 directors’ and supervisors’ seminar of corporategovernance and enterprise integrity	3
			2020/12/02	Taiwan Corporate Governance Association	16th International Corporate Governance Forum	3

Comp any	Title	Name	Date	Organizer	Course Name	Hours
	Juristic-person director representative	Excelsior Medical Co., Ltd. Representative: Xue Fu- Quan	2020/09/21	Taipei Exchange	Corporate governance 3.0 - Sustainable Development Roadmap	3
			2020/12/04	Securities and Futures Institute	Intellectual property rights management and company operatingrisks	3
	Independent Director	Chen Hsieh-Yu	2020/09/21	Taipei Exchange	Corporate governance 3.0 - Sustainable Development Roadmap	3
			2020/10/16	Taipei Exchange	The 2020 directors’ and supervisors’ seminar of corporategovernance and enterprise integrity	3
	Independent Director	Shih Mei-Hui	2020/10/15	The National Federation of CPA Associations of the R.O.C.	Practical discussion on the application of zero tax rate for business tax exportgoods and labor services	3
			2020/10/28	The National Federation of CPA Associations of the R.O.C.	Accounting Science Innovation Theory and Practice Application-Blockchain Accounting	3
			2020/11/25	The National Federation of CPA Associations of the R.O.C.	Company Law Practice and Case Analysis-Focusing on Common Disputes and the 2018 Company Law Amendment	7
	Independent Director	Yang Yu-Ming	2020/08/11	Securities and Futures Institute	The functions of the board of directors from the prevention of corporate fraud	3
			2020/08/24	Taipei Exchange	Seminar on the Promotion of Internal Equity Ownership of EmergingStocks	3
Arich Enterprise Co., Ltd.	Juristic-person Chairman representative	Excelsior Medical Co., Ltd. Representative: Fu Hui- Tung	2020/10/14	Securities and Futures Institute	Discussion about the Responsibilities of Directors and Supervisors based on Illegal Cases in Securities Market	3
			2020/10/16	Securities and Futures Institute	Enterprise Financial Crisis Warning and Type Analysis	3
	Juristic-person director representative	Excelsior Medical Co., Ltd. Representative: Wang Ming-Ting	2020/07/17	Accounting Research and Development Foundation	Tracing “fund flows” in financial report scandals and case study of related legal responsibility	3
			2020/08/21	Corporate Organization Association	Defense Against Hostile Takeover and Responsibilities of CompanyOwners	3
	Juristic-person director representative	Excelsior Medical Co., Ltd. Representative: Chang Ming-Cheng	2020/10/16	Taipei Exchange	The 2020 directors’ and supervisors’ seminar of corporategovernance and enterprise integrity	3
			2020/12/02	Taiwan Corporate Governance Association	16th International Corporate Governance Forum	3

Title	Name	Date	Organizer	Course Name	Hours
Juristic-person director representative	Excelsior Investment Co., Ltd. Representative: Xue Fu- Quan	2020/09/21	Taipei Exchange	Corporate governance 3.0 - Sustainable Development Roadmap	3
		2020/12/04	Securities and Futures Institute	Intellectual property rights management and company operatingrisks	3
Director	Dang Tian-Jian	2020/09/21	Taipei Exchange	Corporate governance 3.0 - Sustainable Development Roadmap	3
		2020/12/23	Taipei Exchange	Discussions on shareholding structure arrangements and offensive and defensive strategies in Board of Directors and shareholders’ meeting through examining recent competitions for the right of management.	3
Independent Director	Chang Wu-I	2020/10/16	Taipei Exchange	The 2020 directors’ and supervisors’ seminar of corporategovernance and enterprise integrity	3
		2020/11/27	Taiwan Corporate Governance Association	Advanced Practice Sharing of Audit Committee - Towards 3.0	3
Independent Director	Chan Tzu-Sheng	2020/10/14	Securities and Futures Institute	2020 Seminar on preventing insider trading and/or insider equitytrading	3
		2020/10/16	Taiwan Stock Exchange Corporation	The 2020 directors’ and supervisors’ seminar of corporategovernance and enterprise integrity	3
Independent Director	Yang Yu-Ming	2020/08/11	Securities and Futures Institute	The functions of the board of directors from the prevention of corporate fraud	3
		2020/08/24	Taipei Exchange	Seminar on the Promotion of Internal Equity Ownership of EmergingStocks	3

Note 2 ： Managers’ training records:

Company	Title	Name	Date	Organizer	Course Name	Hours
Excelsior Medical Co., Ltd	President	Chang Ming-Cheng	2020/10/16	Taipei Exchange	The 2020 directors’ and supervisors’ seminar of corporate governance and enterprise integrity	3
			2020/12/02	Taiwan Corporate Governance Association	16th International Corporate Governance Forum	3
	Vice General Manager	Wang Ming-Ting	2020/07/17	Accounting Research and Development Foundation	Tracing “fund flows” in financial report scandals and case study of related legal responsibility	3
			2020/08/21	Corporate Organization Association	Defense Against Hostile Takeover and Responsibilities of CompanyOwners	3
	Accounting Chief	Chou Cheng-Hsiao	2020/11/16 `至` 2020/11/17	Accounting Research and Development Foundation	Continuing Training Course for Principal Accounting Officers of Issuers, Securities Firms, and Securities Exchanges	12

(4) Composition, responsibilities, and operation of the Remuneration Committee

The Remuneration Committee assists the Board in discharging its responsibilities relating to the Company’s compensation and benefits policies, plans and programs, and the evaluation of the directors’ and executives’ compensation.

A. Members of the Remuneration Committee

Title	Criteria Name	Meets One of the Following Professional Qualification Requirements, Together with at Least Five Years’ Work Experience	Meets One of the Following Professional Qualification Requirements, Together with at Least Five Years’ Work Experience	Meets One of the Following Professional Qualification Requirements, Together with at Least Five Years’ Work Experience	Independence Criteria (Note)	Independence Criteria (Note)	Independence Criteria (Note)	Independence Criteria (Note)	Independence Criteria (Note)	Independence Criteria (Note)	Independence Criteria (Note)	Independence Criteria (Note)	Independence Criteria (Note)	Independence Criteria (Note)	Number of Other Public Companies in Which the Individual is Concurrently Serving as an Remuneratio n Committee Member	Remarks
		Holds the position of lecturer (or higher) at public or private college or university in business, law, finance,accou nting or company operations	Holds a license, obtained through national examination, for the position of judge, district attorney, lawyer, accountant, or similar	Work experience in business, law,finance n,accountin g or company operations	1	2	3	4	5	6	7	8	9	10
Independe nt Director	Chan Tzu- Sheng														1	None
Independe nt Director	Chang Wu-I														2	None
Other	Shih Mei-Hui														1	None

Note: Please tick the corresponding boxes that apply to the directors during the two years prior to being elected or during the term of office.
a. Not an employee of the company or any of its affiliates
b. Not a director or supervisor of the company or any of its affiliates. Not applicable in cases where the person is an independent director appointed in accordance with the laws and regulations of the local country by, and concurrently serving as such at, a company and its parent or subsidiary or a subsidiary of the same parent.
c. Not a natural-person shareholder who holds shares, together with those held by the person’s spouse, minor children, or held by the person under others’ names, in an aggregate of 1% or more of the total number of outstanding shares of the Company or ranking in the top 10 in holdings.
d. A spouse, relative within the second degree of kinship, or lineal relative within the third degree of kinship, of a managerial officer under subparagraph 1 or any of the persons in the preceding two subparagraphs.
e. Not a director, supervisor, or employee of a corporate shareholder that directly holds 5% or more of the total number of issued shares of the company, or that ranks among the top five in shareholdings, or that designates its representative to serve as a director or supervisor of the company under Article 27, paragraph 1 or 2 of the Company Act. But not applicable in cases where the person is an independent director appointed in accordance with the laws and regulations of the local country by, and concurrently serving as such at, a company and its parent or subsidiary or a subsidiary of the same parent.
f. Not a director, supervisor, or employee of that other company that the company’s director seats or voting shares and those of any other company are controlled by the same person. But not applicable in cases where the person is an independent director appointed in accordance with the laws and regulations of the local country by, and concurrently serving as such at, a company and its parent or subsidiary or a subsidiary of the same parent.

g. Not a director (or governor), supervisor, or employee of that other company or institution that a chairperson, general manager, or person holding an equivalent position of the company and a person in any of those positions at another company or institution are the same person or are spouses. But not applicable in cases where the person is an independent director appointed in accordance with the laws and regulations of the local country by, and concurrently serving as such at, a company and its parent or subsidiary or a subsidiary of the same parent.
h. Not a director, supervisor, officer, or shareholder holding 5% or more of the shares, of a specified company or institution which has a financial or business relationship with the Company.
i. Not a professional individual who, or an owner, partner, director, supervisor, or officer of a sole proprietorship, partnership, company, or institution that, provides auditing services to the company or any affiliate of the company, or that provides commercial, legal, financial, accounting or related services to the company or any affiliate of the company for which the provider in the past 2 years has received cumulative compensation exceeding NT$500,000, or a spouse thereof; provided, this restriction does not apply to a member of the remuneration committee, public tender offer review committee, or special committee for merger/consolidation and acquisition, who exercises powers pursuant to the Act or to the Business Mergers and Acquisitions Act or related laws or regulations.
j. Not been a person of any conditions defined in Article 30 of the Company Act.

B. Members of the Remuneration Committee
a. There are three members in the Remuneration Committee
b. The term of office for current members runs from 03 July 2019 through 17 June 2022 As of publication of the Annual Report, there had been a total of three meetings (A) of the RemunerationCommittee over the past fiscal year. Member attendance is detailed as below:

Title	Name	Attendance in Person(B)	By Proxy	Attendance Rate (B/A)
Convener	Chan Tzu- Sheng	2	1	67%
Committee Member	Chang Wu-I	3	0	100%
Committee Member	Shih Mei-Hui	3	0	100%
Other mentionable items: (a) If the board of directors declines to adopt or modifies a recommendation of the remuneration committee, it should specify the date of the meeting, session, content of the motion, resolution by the board of directors, and the Company’s response to the remuneration committee’s opinion (eg., the remuneration passed by the Board of Directors exceeds the recommendation of the remuneration committee, the circumstances and cause for the difference shall be specified): None. (b) Resolutions of the remuneration committee objected to by members or expressed reservations and recorded or declared in writing, the date of the meeting, session, content of the motion, all members’ opinions and the response to members’ opinion should be specified: None. (c)Operations of the Remuneration Committee in the most recentyear: Remuneration Committee Session and Date Content Resolution The Company’s handling of the opinion of the remuneration committee members The 7th Meet- ing in the 12th term 2020.01.171.The amendment of year-end bonus for managers in 2019. Approved by the Remuneration Committee. All motions were unanimously approved by all attending directors without dissidence. The 8th Meet- ing in the 12th term 2020.03.12 1.The distribution of employees’ compensations and Directors’ compensations for 2019. 2.The amendment of “Remuneration Committee Charter”. Approved by the Remuneration Committee. All motions were unanimously approved by all attending directors without dissidence. The 11th Meet- ing in the 12th term 2020.08.06 1. The distribution of directors’ compensations in 2019. 2.The distribution of employees’ compensations for managers in 2019. Approved by the Remuneration Committee. All motions were unanimously approved by all attending directors without dissidence.

(5) Fulfillment of CSR

5)Fulfillment of CSR
Evaluation Item	Implementation Status			Deviations from the “Corporate Social Responsibility Best Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Explanation
A. Has the company conducted risk assessments of environmental, social and corporate governance issues pertaining to company operations based on the materiality principle and establish the relevant risk management policies or strategies?	V		To prevent risk-related losses, the Company has established relevant management policies based on our business philosophies and materiality principle. The policies include fulfilling corporate social responsibilities, focusing on rights and interests of stakeholders, being committed to topics related to environment, social and governance, and to identify, evaluate, treat, monitor, and regularly track potential risks to the Company.	Comply
B. Has the company established exclusively (or concurrently) dedicated first-line managers authorized by the board to be in charge of proposing the corporate social responsibility policies and reportingto the board?	V		The Group has not yet to establish an exclusively dedicated unit, but relevant matters are jointly carried out by the General Manager’s Office, the Finance and Accounting Division, the Employee Welfare Committee and the Excelsior Health Foundation.	Partially Comply
C. Environmental issues
a. Has the company established proper environmental management systems based on the characteristics of their industries?	V		The Company is not a manufacturer and is therefore not applicable for ISO 14001 or other similar environmental management system certification. Nevertheless, the Company is dedicated to promoting environmental protection activities and strongly promotes water and power conservation to reduce damages and burdens to	Comply

Evaluation Item			Implementation Status	Deviations from the “Corporate Social Responsibility Best Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Explanation
			the environment. Products related to the Group do not generate waste, and the remaining garbage disposal is carried out in line with relevant regulations from the management committee of the office building. In addition, Arich Enterprise Co., Ltd. has established the “Employee Safety and Health Manual” as management guidelines for the workplace environment.
b. Does the company endeavor to utilize all resources more efficiently and use renewable materials which have low impact on the environment? c. Does the company evaluate the potential risks and opportunities in climate change with regard to the present and future of its business, and take appropriate action to counter climate change issues? d. Did the company take inventory of its greenhouse gas emissions, water consumption, and total weight of waste in the last two years, and implement policies on energy efficiencyand carbon dioxide	V V V		The Group views promoting energy and power- saving products while reducing redundant packaging as a priority. Internally, we also promote energy and water conservation to reduce the harms and burden on the environment. Global climate change has led to frequent abnormal weather conditions. The Company determines the potential risks from climate change on the Company, and develops response policies and action plans accordingly to reduce climate risks on business operations. The Company has established the “Company Energy Conservation and Carbon Reduction Management Procedures” and advocates that the temperature of air conditioner shall not be lower than 25 degree Celsius. Staff shall appropriately turn off the air conditioners and lights at office	Comply Comply Comply

Evaluation Item	Implementation Status	Implementation Status	Implementation Status	Deviations from the “Corporate Social Responsibility Best Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Explanation
reduction, greenhouse gas reduction, water reduction, or waste management?			areas that are either unmanned or with very few people; in addition, the replacement of lights shall be mostly for energy-saving LED lighting, and energy conservation and recycling are also promoted from time to time. The Company’s carbon dioxide emissions, already announced on the MOPS, were 363,237kg in 2019 and 337,896kg in 2020. In addition, the total water consumption shared by the office building was 21,488 cubic meters in 2019 and 28,981 cubic meters in 2020 and the total weight of waste shared by the office building was 22,710kg in both 2019 and 2020. In the future, we will continue to promote energy conservation, carbon reduction and greenhouse gas reductionpolicies as ourgoals.
D. Social issues
a. Has the company established appropriate management policies and procedures according to relevant regulations and the International Bill of Human Rights?	V		The Group complies with applicable laws and standards, including the Labor Standards Act and Act of Gender Equality in Employment. In addition, the Company has also established the “Employee Work Rules” to provide employees a friendly work environment through equal recruitment principles and mutually-respectful work attitude.	Comply

Evaluation Item	Implementation Status	Implementation Status	Implementation Status	Deviations from the “Corporate Social Responsibility Best Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Explanation
b. Has the company had reasonable employee benefit measures (including salaries, leave, and other benefits), and reflected business performance or results in employee compensations? c. Does the company provide a healthy and safe working environment and organize training on health and safety for its employees on a regular basis? d. Does the company provide its employees with career development and training sessions?	V V V		The Company has already established and implemented various employee benefit measures. Please refer to the description of “Chapter V. Business Overview-5. Labor Relations.” In addition, according to the Article 25 of the Company’s Articles of Association, the Company should contribute no less than 1% of the profit as employee compensation when there is profit for the year. Employee compensation amount in 2020 was NT$36,378,877. The Group views great importance to the safety of employees’ work environment and has participated in the annual publicity work of fire drill organized by the office building management committee. In addition, the Employee Welfare Committee has also been set up to organize various benefit measures, including annual employee health check and provides various allowances. Moreover, labor insurance, national health insurance, and group insurance are also filed in line with the law to protect employees' rights and interests. The Group regularly organizes “teaching by experience” training to effectively enhance employees’ occupational competences and to developtheirprofessional skills.	Comply Comply Comply

Evaluation Item	Implementation Status	Implementation Status	Implementation Status	Deviations from the “Corporate Social Responsibility Best Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Explanation
e. Does the company comply with relevant regulations and international standards in relation to customer health and safety, customer privacy, and marketing and labeling of products and services, and establish consumer right protection policy and grievance procedure?	V		The Company has established the “Handling Procedures for Reporting Illegal, Unethical and Dishonest Conduct” to fulfill corporate social responsibility in practice and to protect the privacy and rights of customers. The Procedures also include after-sale customer service and maintenance warranty. In addition, special areas for product registration and inquiry on maintenance progress are also available on the Company’s website, and a 0800 toll-free hotline is set up, where professional customer service personnel will be available to answer all queries. Furthermore, the Group is non-manufacturing, so there is no research and development or productionprocedures.	Comply
f. Does the company implement supplier management policies, requiring suppliers to follow relevant regulations on issues such as environmental protection, occupational health and safety, or labor and human rights? If so, describe the results.	V		Most of the Company’s major suppliers are medical principals in Europe, the United States, and Japan. Therefore, the Company always practices due care in evaluating whether the products comply with domestic and foreign legal requirements before purchases are made. In addition, during signing of contracts, based on the requirement in the “Ethical Corporate Management Best Practice Principles,” contracts shall clearly specify compliance with ethical corporate management policy and both shall strive to enhance the corporate social responsibilities.	Comply

Evaluation Item	Implementation Status	Implementation Status	Implementation Status	Deviations from the “Corporate Social Responsibility Best Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Explanation
E. Does the company refer to internationally accepted reporting standards or guidelines to compile reports that disclose non-financial information of the company, such as corporate social responsibility reports? Has the reports above obtained assurance from a third-party verification organization?		V	The Company has not yet compiled reports that disclose non-financial information such as the Corporate Social Responsibility (CSR) Report in reference to internationally accepted reporting standards or guidelines. However, the Company will continue to fulfill corporate social responsibilities and to establish relevant policies in accordance with laws and international trends.	Not yet met.
F. If the Company has established its own corporate social responsibility principles in accordance with “Corporate Social Responsibility Best Practice Principles for TWSE/TPEx Listed Companies,” please state the difference between actual practice and principles. The Company has established “Corporate Social Responsibility Best Practice Principles” and will actively fulfill corporate social responsibilities in practice to meet international trends for balanced environmental, social, and governance developments. The overall business activities of the Group are carried out in accordance with the regulations from “Corporate Social Responsibility Best Practice Principles.”
G. Other important information that helps to understand the status of corporate social responsibility practices: In addition to committing to core business development, the Company also pays great attention to social welfare and adheres the spirit of giving back to society. In 2020, we continued to carry out various donation activities, such as donating to Tainan Sin-Lau Hospital of Sin-Lau Medical Foundation, Camillian Saint Mary’s Hospital Luodong of the Presbyterian Church in Taiwan, Taiwan Society of Nephrology, Taiwan Wound Ostomy and Continence Nursing Association, Ministry of Health and Welfare Hengchun Tourism Hospital and blood centers throughout Taiwan. Moreover, Excelsior Health Foundation organized winter relief for underprivileged Groups and Solitary elders in Nantou and promoted community medical and healthcare development. By collaborating with local community groups to organize healthcare activities, and collaborating with domestic and foreign medical groups or academic institutions to train professionals in the medical/healthcare industry.

(6) Fulfillment of ethical corporate management

Evaluation Item	Implementation Status	Implementation Status	Implementation Status	Deviations from the “Corporate Social Responsibility Best Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Explanation
A. Establishment of ethical corporate management policies and programs a. Has the company established ethical corporate management policy approved by the board of directors and stated the ethical corporate management policy and practices in its regulations and external documents, as well as the commitment from the board of directors and executives to actively implement the policies? b. Has the company established mechanisms in place to assess the risk of unethical conduct, and regularly analyze and assess business activities with higher risk of unethical conduct within the scope of business? Has the company implemented programs to prevent unethical conduct based on the above and ensure the programs cover at least the matters described in Paragraph 2, Article 7 of the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies?	V V		The Company and DMT have both established “Ethical Corporate Management Best Practice Principles.” Alternatively, Arich has established the “Procedures for Ethical Management and Guidelines for Conduct.” All aforesaid principles and procedures have been approved by the Board of Directors, and the Auditing Office is in charge of establishing the ethical management policy and preventive actions as well as supervising their implementation, and regularly reports relevant progress to the Board. In order to prevent unethical conduct, the Company has established the “Handling Procedures for Reporting Illegal and Unethical Conduct,” enacted specific and effective reward and disciplinary system, and utilized the procedures to carry out relevant audits, analysis, and assessments.	Comply Comply

Evaluation Item	Implementation Status	Implementation Status	Implementation Status	Deviations from the “Corporate Social Responsibility Best Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Explanation
c. Has the company clearly established operating procedures, code of conduct, disciplinary actions, and appeal procedures in the programs against unethical conduct? Did the company carry out the implementation and regularly review and revise them?	V		The “Ethical Corporate Management Best Practice Principles” specifies prevention against various unreasonable transfer of interest, and appropriately organizes educational training and advocacy for directors, managers, and substantial business controllers. In addition, the Company has established the “Handling Procedures for Reporting Illegal and Unethical Conduct” and implement it.	Comply
B. Fulfill ethical corporate management a. Has the company evaluated business partners’ ethical records and included ethics-related clauses in business contracts?	V		The Group has established evaluation system for all transacting customers and suppliers. To fulfill ethical corporate management, when signing contracts with counterparties, rights and obligations of both parties are specified in detail along with compliance with the “Ethical Corporate Management Best Practice Principles.”	Comply

Evaluation Item	Implementation Status	Implementation Status	Implementation Status	Deviations from the “Corporate Social Responsibility Best Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Explanation
b. Has the company set up a unit responsible for ethical corporate management on a full-time basis under the Board of Directors which reports the ethical corporate management policy and programs against unethical conduct regularly (at least once a year) to the Board of Directors while overseeing such operations? c. Has the company established policies to prevent conflicts of interest and provide appropriate communication channels, and implement it? d. Has the company established effective accounting and internal control systems in place to implement ethical corporate management? Has the internal audit unit followed the results of unethical conduct risk assessments and devised audit plans to audit the systems accordingly to prevent unethical conduct, or has it hired a CPA toperform the audits?	V V V		Arich has specified its Finance and Administration Division to be in charge of establishing an ethical business management policy and preventive programs, and for internal auditors to be in charge of supervising relevant implementation and to prepare and submit audit reports to the Board of Directors. Though the other companies have not yet established dedicated units to promote ethical corporate management policy, corporate social responsibilities are fulfilled by all departments based on their respective duties and obligations, and the internal auditors are responsible for supervising relevant implementations. The Company has established the “Handling Procedures for Reporting Illegal and Unethical Conduct,” and internal personnel can report to their direct supervisors as well as submit whistle- blowing reports to responsible units in case of matters concerning conflict of interests. To ensure the implementation of ethical corporate management, the Group has established effective accounting and internal control systems and its compliance is regularly audited by the internal auditors.	Partially Comply Comply Comply

Evaluation Item	Implementation Status	Implementation Status	Implementation Status	Deviations from the “Corporate Social Responsibility Best Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Explanation
e. Does the company regularly hold internal and external educational trainings on ethical corporate management?	V		The Group irregularly promotes major policies including ethical corporate management in annual important meetings. The Company’s sales unit organized educational training related to ethical corporate management to 20 people, for 10 person-hour in 2020.	Comply
C. Operation of the whistle-blowing channel a. Has the company established both a reward/punishment system, set up convenient whistle-blowing channels and designated appropriate personnel for follow-up?	V		The Company has established the “Handling Procedures for Reporting Illegal and Unethical Conduct” and Company’s stakeholders such as shareholders and investors can report to the Company spokesperson and deputy spokesperson for matters related to violation of ethical corporate management and Codes of Ethical Conduct; customers, suppliers, and contractors can report to the CFO and audit supervisor, while Company employees can report to the HR department. After investigations, if the incident was found to be true, disciplinary actions will be taken based on the severityof the violation.	Comply

Evaluation Item	Implementation Status	Implementation Status	Implementation Status	Deviations from the “Corporate Social Responsibility Best Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Explanation
b. Has the company established standard operating procedures for investigating accusation cases, as well as follow-up actions and relevant post-investigation confidentiality measures?	V		In case Company employees discover unethical conduct such as a breach of ethics, unlawful act, or breach of fiduciary duty from any director, manager, employee, or person with substantial control, the employee shall submit substantial information on the incident and submit a whistle-blowing report to the unit responsible for receiving such reports. An investigation report will be submitted to the Board of Directors after investigation has been completed, and the Board of Directors shall determine the method of disciplinary action and listen to any appeals from the subject of the investigation.	Comply
c. Has the company provided proper whistleblower protection?	V		The Company shall keep the identity of whistleblowers and the content of reported cases confidential.	Comply
D. Strengthening information disclosure Has the company disclosed its ethical corporate management policies and the results of its implementation on the company’s website and MOPS?	V		The Company, DMT and Arich have established corporate websites that disclose information on corporate culture, management objectives, and ethical corporate management.	Comply

Implementation Status Deviations from the “Corporate
Evaluation Item Social Responsibility Best Practice Principles for TWSE/TPEx Listed Yes No Explanation
Companies” and Reasons
E. If the company has established the ethical corporate management policies based on the “Ethical Corporate Management Best Practice
Principles for TWSE/TPEx Listed Companies,” please describe any discrepancy between the policies and their implementation.
The Company, Dynamic Medical Technologies Inc., and Arich Enterprise Co., Ltd. have established “Ethical Corporate
Management Best Practice Principles” based on the “Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed
Companies,” and have implemented it indeed,so there are no difference.

F. Other important information to facilitate a better understanding of the company’s ethical corporate management policies (e.g., review and amend its policies).
a. As the basis for implementing ethical corporate management in practice, the Group adheres to the Company Act, the Securities and Exchange Act, the Business Entity Accounting Act, relevant policies for TWSE/TPEx listed companies and other business laws and bylaws pursuant to business conduct.
b. The Company, Dynamic Medical Technologies Inc., and Arich Enterprise Co., Ltd. have established “Procedures for Handling Material Inside Information” and disclosure of the handling of all material inside information is carried out accordingly. The following is a summary of the Procedures:
- (a)Designate an exclusive unit to be in charge of handling matters related to material inside information, and all documents related to material information comply with the Company’s internal approval processes.
- (b)The company’s directors, managers and employees shall exercise the due care and fiduciary duty of a good administrator and act in good faith when performing their duties, and shall sign confidentiality agreements. No director, manager, or employee with knowledge of material inside information of this company may divulge the information to others.
- (c)Any organization or person outside of the Company that is involved in any corporate action of the Company relating to a merger or acquisition, major memorandum of understanding, strategic alliance, other business partnership plans, or the signing of a major contract shall be required to sign a confidentiality agreement, and may not disclose to another party any material inside information of the Company thus acquired.
- (d)External disclosure of material inside information shall comply with the following principles: (i) the information disclosed shall be accurate, complete, and timely; (ii) there shall be a well-founded basis for the information disclosure; and (iii) the information shall be disclosed fairly.

Evaluation Item	Implementation Status	Implementation Status	Implementation Status
	Yes	No	Explanation

(e) Any disclosure of the Company’s material inside information, except as otherwise provided by law or regulation, shall be made by the Company’s spokesperson, or by a deputy spokesperson acting in such capacity in a confirmed sequential order. When necessary, the disclosure may be made directly by the responsible person of the Company. The Company’s spokesperson or deputy spokesperson shall communicate to outside parties only information within the scope authorized by the Company, and no personnel of the Company other than those serving as the Company’s responsible person, spokesperson, or deputy spokesperson maydisclose anymaterial inside information of the Companyto outsideparties without authorization.

(7) The Company shall disclose how to search for its corporate governance best practice principles or related regulations. Information on Corporate Governance is available under the Investor section at the Company’s website (http://www.excelsiormedical.com.tw.) Organization and operations of the internal audit, Articles of Incorporation, Regulations Governing the Acquisition and Disposal of Assets, and Regulations Making of Endorsements/Guarantees are disclosed and available for investors and other related parties to query.

Please see the Market Observation Post System (MOPS) for corporate governance policies and related standards and procedures
from Dynamic Medical Technologies Inc., and Arich Enterprise Co., Ltd.. (http://mops.twse.com.tw/mops/web/index)
(8) Other important information that will provide a better understanding of the state of the Company’s implementation of corporate governance may also be disclosed.

The Company, Dynamic Medical Technologies Inc., and Arich Enterprise Co., Ltd. have all established three seats of independent directors respectively, and all supervise the operations of corporate governance in practice through setting an Audit committee and Remuneration Committee. Material information and various matters to be declared by TWSE/TPEx listed companies are all announced on a timely basis, and on top of fulfilling the corporate governance system in practice, three companies also strive to achieve various indicators on the TWSE/TPEx listed companies information assessment.

(9) Internal control systems

A. Statement of internal control system

Excelsior Medical Co., Ltd. Statement of Internal Control System

Date: March 12, 2021

‐ Based on the findings of self assessment, the Company states the following with regard to its internal control system during the year 2020:

I. The Company fully understands that the establishment, implementation, and maintenance of Internal Control System (ICS) are the responsibilities of the Company's Board of Directors and managers, and have established the said system accordingly. The internal control system is designed to provide reasonable assurance for the effectiveness and efficiency of the operations (including profitability, performance and protection of assets), reliability, timeliness, and transparency of reporting, and compliance with applicable laws and regulations.
II. All ICS are bound by natural limitations and regardless of the robustness of designs, effective ICS can only provide reasonable assurance for the three objectives listed above.Efficacy of the ICS will also change with the changing environment or context. However, the ICS of the Company has self-monitoring mechanisms in place, and the Company will take corrective action against any defects identified.
III. The Company will refer to the Regulations Governing Establishment of Internal Control Systems by Public Companies (hereinafter referred to as “ ICS Regulations ” ) to identify assessment items for determining the effectiveness of ICS as well as the performance of design and implementation of the system. Based on the process of control, the assessment items specified in the Regulations divide the internal control system into five constituent elements: 1.control environment; 2. risk assessment; 3. control activities; 4. information and communications; and 5. monitoring activities. Each constituent element includes a certain number of items. For more information on such items, refer to the Regulations.
IV. The Company has evaluated the design and operating effectiveness of its internal control system according to the aforesaid Regulations.
V. Based on the findings of the evaluation mentioned in the preceding paragraph, the Company believes that as of December 31, 2020 its internal control system (including its supervision and management of subsidiaries), encompassing internal controls for knowledge of the degree of achievement of operational effectiveness and efficiency objectives, reliability of reporting, and compliance with applicable laws and regulations, is effectively designed and operating, and reasonably assures the achievement of the above-stated objectives.
VI. This statement will constitute the main content of the Company's Annual Report and the Prospectus and will be disclosed to the public. Any falsehood or concealment with regard to the above contents will entail legal liability under Articles 20, 32, 171 and 174 of the Securities and Exchange Act.

This statement has been approved on March 12, 2021, by the Board and out of the nine (9) Board members in attendance, none had objected to the statement and all consented to the content expressed herein.

EXCELSIOR MEDICAL CO., LTD.

Chairman ： Fu Hui-Tung

General Manager ： Chang Ming-Cheng

B. If CPA has been hired to carry out a special audit of the internal control system, the company shall furnish the CPA audit report: None.
(10)Conviction of corporate or employees’ wrongdoings, Company’s punishmenton employee for violation of internal control, major faults and improve mentsduring from last year up to the time of report publication: None.
(11) Major resolutions of the shareholders meeting and board of directors meeting from last year up to the time of report publication:
A. Major resolutions of the shareholders meeting

Classifi cation	Date	Major Resolutions	Resolution of the Shareholders Meeting	Implementation Status
Sharehol ders’ Meeting	2020.0 6.18	1.Adoption of the Company’s 2019 financial statements.	Voting results: 80,596,337 ballots in favor; 97.75% (including 10,746,784 ballots submitted through e-voting); 28,480 ballots against; 0.003% (including 28,480ballots submitted through e-voting); 1,828,123 ballots forfeit/did not vote; 2.22% (including 1,826,715 ballots submitted through e-voting); 0 void ballots; 0%. Ballots in favor have exceeded one-half of all voting rights, and the motion is passed without amendment.	Approved by resolution of the Shareholders’ Meeting.
		2.Adoption of the proposal for distribution of 2019 profits.	Voting results: 80,752,979 ballots in favor; 97.94% (including 10,903,426 ballots submitted through e-voting); 29,481 ballots against; 0.004% (including 29,481 ballots submitted through e-voting); 1,670,480 ballots forfeit/did not vote; 2.02% (including 1,669,072 ballots submitted through e-voting); 0 void ballots; 0%. Ballots in favor have exceeded one-half of all voting rights, and the motion is passed without amendment.	The Shareholders' Mee ting approved the distribution of NT$465,791,601 of cash dividends, or NT$3.3 per share. The distribution was completed on August 28,2020.
		3.Amending part of the articles of Incorporation	Voting results: 80,749,677 ballots in favor; 97.93% (including 10,900,124 ballots submitted through e-voting); 31,783 ballots against; 0.04% (including 31,783 ballots submitted through e-voting); 1,671,480 ballots forfeit/did not vote; 2.03% (including 1,670,072 ballots submitted through e-voting); 0 void ballots; 0%. Ballots in favor have exceeded one-half of all voting rights, and the motion is passed without amendment.	Approved by resolution of the Shareholders’ Meeting, and registration was completed on July 13, 2020.
		4.Amending part of the articles of the Company’s “Assets Acquisition or Disposition Procedures”.	Voting results: 76,240,477 ballots in favor; 92.46% (including 6,390,924 ballots submitted through e-voting); 4,539,983 ballots against; 5.51% (including 4,539,983 ballots submitted through e-voting); 1,672,480 ballots forfeit/did not vote; 2.03% (including 1,671,072 ballots submitted through e-voting); 0 void ballots; 0%. Ballots in favor have exceeded one-half of all voting rights, and the motion is passed without amendment.	Approved by resolution of the Shareholders’ Meeting.
		5.Release the prohibition on directors from participation in competition businesses.	Voting results: 80,641,152 ballots in favor; 97.80% (including 10,791,599 ballots submitted through e-voting); 140,133 ballots against; 0.17% (including 140,133 ballots submitted through e-voting); 1,671,655 ballots forfeit/did not vote; 2.03% (including 1,670,247 ballots submitted through e-voting); 0 void ballots; 0%. Ballots in favor have exceeded two-thirds of all voting rights, and the motion is passed without amendment.	Approved by resolution of the Shareholders’ Meeting.

B. Major resolutions of the Board of Directors’ Meetings from last year up to the time of report publication

The Company has convened nine Board of Directors meetings in 2020 up to the time of report publication. Major resolutions have been listed in the following:

Board of Directors’ Meetings	Board of Directors’ Meetings	Content	Opinion of the Independent Director	Dissenting Opinion or Qualified Opinion of Independent Directors	Company’s handling of the opinions of the Independent Directors	Resolution Result
The 7th Meeting in the 12th term	2020.1.1 7	1. Approved amendment of year-end bonus for managers in 2019.	Motions approved without amendment.	None	N/A	All motions were unanimously approved by all attending Directors without dissidence.
The 8th Meeting in the 12th term	2020.3.1 2	1. Approved the preparation of 2019 Internal Control System Statement of the Company. 2. Approved the distribution of employees' compensations and directors' compensations for 2019. 3. Approved the Company's 2019 Financial Statements. 4. Approved the Company's 2019 earnings distribution proposal. 5. Approved the amendment of "Articles of Incorporation". 6. Approved the amendment of "Regulations Governing the Acquisition or Disposal of Assets". 7. Approved the amendment of "Rules of Procedure for Board of Directors Meetings". 8. Approved the amendment of "Audit Committee Charter". 9. Approved the amendment of "Remuneration Committee Charter". 10. Approved the releasing the prohibition on some of the Company's Directors from participation in competitive business. 11. Approved the releasing the prohibition on the Company's managers from participation in competitive business. 12.Approved themotionto convene the Company's2020AnnualGeneral	Motions approved without amendment.	None	N/A	All motions were unanimously approved by all attending Directors without dissidence.

Board of Directors’ Meetings	Board of Directors’ Meetings	Content	Opinion of the Independent Director	Dissenting Opinion or Qualified Opinion of Independent Directors	Company’s handling of the opinions of the Independent Directors	Resolution Result
		Shareholders' meeting and to establish related matters including accepting shareholders' proposals. 13. Approved the motion for the Company to provide contract performance guarantee for transacting counterparty Bestchain Healthtaiwan Co., Ltd. 14. Approved the motion for the Company to provide endorsements/guarantees for new financing credit of NT$50 million from Xihu Branch of Bank SinoPac on behalf of Excelsior Asset Management Co., Ltd. 15. Approved the motion for the Company to provide endorsements/guarantees for new financing credit of NT$50 million from Nanjing East Road Branch of Yuanta Bank on behalf of Excelsior Asset Management Co., Ltd. 16. Approved the Company’s application for credit extension due to expiration of the syndicated credit line from Xihu Branch of Bank SinoPac. 17. Approved the Company’s application for credit extension due to expirationofthe syndicated creditlinefromCitibankTaiwan.
The 9th Meeting in the 12th term	2020.4.22	1. Approved the Company's participation in subsidiary Arich Enterprise Co., Ltd.'s capital injection by issuance of new shares. 2. Approved the motion for the Company to provide endorsements/guarantees for financing credit extension of NT$80 million from CitiBank Taiwan on behalf of Bestchain Healthtaiwan Co., Ltd. 3. Approved the motion for the Company to provide endorsements/guarantees for new financing credit of NT$80 million from Zhonghe Branch of First Bank on behalf of Bestchain Healthtaiwan Co., Ltd.	Motions approved without amendment.	None	N/A	All motions were unanimously approved by all attending Directors without dissidence.

Board of Directors’ Meetings	Board of Directors’ Meetings	Content	Opinion of the Independent Director	Dissenting Opinion or Qualified Opinion of Independent Directors	Company’s handling of the opinions of the Independent Directors	Resolution Result
The 10th Meeting in the 12th term	2020.5.5	1. Approved the evaluation results for the independence and suitability of the Company’s CPA. 2. Routine review of the 2020 CPA audit fee. 3. Approved the 2020 Q1 consolidated financial report. 4. Approved the motion for the Company to provide contract performance guarantee for transacting counterparty Bestchain Healthtaiwan Co., Ltd. 5. Approved the motion for the Company to provide endorsements/guarantees for financing credit extension of NT$100 million from Xihu Branch of Bank SinoPac on behalf of Bestchain Healthtaiwan Co., Ltd. 6. Approved the Company's application for credit extension due to expiration of the syndicated credit line from Regional Centers North District 2 of Cathay United Bank.	Motions approved without amendment.	None	N/A	All motions were unanimously approved by all attending Directors without dissidence.
The 11th Meeting in the 12th term	2020.8.6	1. Approved the 2020 Q2 consolidated financial report. 2. Approved amendments of “Procedures for Lending Funds to Other Parties”. 3. Approved the motion for the Company to provide contract performance guarantee for transacting counterparty Bestchain Healthtaiwan Co., Ltd. 4. Approved the motion for the Company to provide endorsements/guarantees for new financing credit of USD$2.5 million from Citibank on behalf of Renal Laboratories Sdn. Bhd.. 5. Approved the motion for the Company to provide endorsements/guarantees for new financing credit of USD$0.5 million from Citibank on behalf of Medi-Chem Systems Sdn. Bhd.. 6. Approved the motion for the Company to provide endorsements/guarantees for new financing credit of peso $50 million from Manila Branch of Cathay United Bank on behalf of EG Healthcare, Inc. 7.Approved themotion forthe Company to provide	Motions approved without amendment.	None	N/A	All motions were unanimously approved by all attending Directors without dissidence.

Board of Directors’ Meetings	Board of Directors’ Meetings	Content	Opinion of the Independent Director	Dissenting Opinion or Qualified Opinion of Independent Directors	Company’s handling of the opinions of the Independent Directors	Resolution Result
		endorsements/guarantees for financing credit extension of NT$100 million from Corporate Banking Division of Cathay United Bank on behalf of Bestchain Healthtaiwan Co., Ltd. 8. Approved the Company’s application for credit extension due to expiration of the syndicated credit line from Fu Hsing Branch of Chang Hwa Commercial Bank. 9. Approved the Company’s application for credit extension due to expiration of the syndicated credit line from Taipei Branch of Taiwan Cooperative Bank. 10. Approved the Company’s application for credit extension due to expiration of the syndicated credit line from Nanjing East Road Branch of Hua Nan Bank. 11. Approved the Company’s application for credit extension due to expiration of the syndicated credit line from Xihu Branch of Bank SinoPac. 12.Approved the Company’s application for new financing credit from Citibank Taiwan to meet future operational needs. 13.Approved the distribution of Directors’ compensations in 2019. 14.Approved the distribution of employees’ compensations for managers in 2019.
The 12th Meeting in the 12th term	2020.11.10	1. Approved the 2020 Q3 consolidated financial report. 2. Approved the Company’s 2021 audit plan. 3. Approved the Company’s 2021 budget report. 4. Approved the motion for the Company to provide contract performance guarantee for transacting counterparty Bestchain Healthtaiwan Co., Ltd. 5. Approved the motion for the Company to provide contract performance guarantee for the subsidiary Renal Laboratories Sdn. Bhd.. 6. Approved the motion for the Company to provide endorsements/guaranteesfor financing credit extensionofNT$200	Motions approved without amendment.	None	N/A	All motions were unanimously approved by all attending Directors without dissidence.

Board of Directors’ Meetings	Board of Directors’ Meetings	Content	Opinion of the Independent Director	Dissenting Opinion or Qualified Opinion of Independent Directors	Company’s handling of the opinions of the Independent Directors	Resolution Result
		million from Taipei Branch of Taiwan Cooperative Bank on behalf of Bestchain Healthtaiwan Co., Ltd. 7. Approved the motion for the Company to provide endorsements/guarantees for financing credit extension of NT$100 million from Nanjing East Road Branch of Hua Nan Bank on behalf of Bestchain Healthtaiwan Co., Ltd. 8. Approved the Company’s application for credit extension due to expiration of the syndicated credit line from Department of International ofMegaInternationalCommercial Bank.
The 13th Meeting in the 12th term	2021.01.21	1. Approved the amendment of "Regulations Governing the Acquisition or Disposal of Assets". 2. Approved the motion for the Company to provide contract performance guarantee for transacting counterparty Bestchain Healthtaiwan Co., Ltd. 3. Approved the motion for the Company to provide endorsements/guarantees for financing credit extension of NT$10 million from Taipei Branch of Taiwan Cooperative Bank on behalf of Bestsmile Co., Ltd. 4. Approved the motion for the Company to provide endorsements/guarantees for new financing credit of NT$100 million from Commercial Banking Office of Standard Chartered Bank on behalf of Bestchain Healthtaiwan Co., Ltd. 5. Approved the motion for the Company to provide endorsements/guarantees for new financing credit of NT$210 million from Corporate Banking Division of Cathay United Bank on behalf of Excelsior Asset Management Co., Ltd. 6. Approved the motion for the Company to provide endorsements/guarantees for new financing credit of NT$170 million from Nanjing East Road Branch of Hua Nan Bank on behalf of Excelsior Asset Management Co.,Ltd.(Revise amount to NT$50 million.)	Motions approved without amendment.	None	N/A	All motions were unanimously approved by all attending Directors without dissidence.

Board of Directors’ Meetings	Board of Directors’ Meetings	Content	Opinion of the Independent Director	Dissenting Opinion or Qualified Opinion of Independent Directors	Company’s handling of the opinions of the Independent Directors	Resolution Result
		7. Approved the Company’s application for credit extension due to expiration of the syndicated credit line from Zhonghe Branch of First Bank. 8. Approved distributions of the 2th employees’ compensations for managers in 2019. 9. Approved distributions ofyear-end bonus for managers in 2020.
The 14th Meeting in the 12th term	2021.3.12	1. Approved the preparation of 2020 Internal Control System Statement of the Company. 2. Approved the distribution of employees' compensations and directors' compensations for 2020. 3. Approved the Company's 2020 Financial Statements. 4. Approved the Company's 2020 earnings distribution proposal. 5. Approved the amendment of “Rules of Procedure for Shareholders Meetings”. 6. Approved the amendment of “Regulations Governing the Evaluation of the Performance of the Board of Directors,” “Rules Governing the Scope of Powers of Independent Directors,” “Audit Committee Charter” and “Remuneration Committee Charter.” 7. Approved the amendment of “Internal Control System” and “Internal Audit System.” 8. Approved the amendment of the Company’s “approved authority level.” 9. Approved the releasing the prohibition on some of the Company's Directors from participation in competitive business. 10.Approved the releasing the prohibition on the Company's managers from participation in competitive business. 11.Approved the motion to convene the Company's 2021 Annual General Shareholders’ meeting and to establish related matters including accepting shareholders' proposals. 12.Approved themotion forthe Company to provide contract performance	Motions approved without amendment.	None	N/A	All motions were unanimously approved by all attending Directors without dissidence.

Board of Directors’ Meetings	Board of Directors’ Meetings	Content	Opinion of the Independent Director	Dissenting Opinion or Qualified Opinion of Independent Directors	Company’s handling of the opinions of the Independent Directors	Resolution Result
		guarantee for transacting counterparty Bestchain Healthtaiwan Co., Ltd. 13.Approved the motion for the Company to provide endorsements/guarantees for financing credit extension of NT$100 million from CitiBank Taiwan on behalf of Bestchain Healthtaiwan Co., Ltd. 14.Approved the motion for the Company to provide endorsements/guarantees for new financing credit of NT$370 million from Taipei Branch of Taiwan Cooperative Bank on behalf of Excelsior Asset Management Co., Ltd. 15.Approved the Company’s application for credit extension due to expiration of the syndicated credit line from Citibank Taiwan.
The 15th Meeting in the 12th term	2021.5.7	1. Approved the evaluation results for the independence and suitability of the Company's CPA. 2. Approved the 2021 Q1 consolidated financial report. 3. Approved the amendment of “Internal Audit System.” 4. Approved the motion for the Company to provide contract performance guarantee for transacting counterparty Bestchain Healthtaiwan Co., Ltd.	Motions approved without amendment.	None	N/A	All motions were unanimously approved by all attending Directors without dissidence.

(12)Where, during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report, a director or supervisor has expressed a dissenting opinion with respect to a resolution approved by the board of directors, and said dissenting opinion has been recorded or prepared as a written declaration, disclose the principal content thereof: None.
(13)A summary of resignations and dismissals, during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report, of the Company’s chairman, general manager, principal accounting officer, principal financial officer, chief internal auditor, and principal research and development officer: None.

4. Information on Fees to CPA

formation on	Fees to CPA	Fees to CPA
Name of Accounting Firm	Name of CPA		Audit Period	Remarks
KPMG International	Wu Tsao- Jen	Lin Wan- Wan	2020.01-2020.12	None

Unit: NT$ thousands

Fees classification Range of amount	Fees classification Range of amount	Audit fee	Non-audit fee	Total
1	Less than NT$2,000,000		`ˇ`(Note)
2	NT$2,000,000 (inclusive) to NT$4,000,000	`ˇ`
3	NT$4,000,000 (inclusive) to NT$6,000,000			`ˇ`
4	NT$6,000,000 (inclusive) to NT$8,000,000
5	NT$8,000,000 (inclusive) to NT$10,000,000
6	NT$10,000,000(inclusive)or above

Note: non-audit fees were NT$800 in thousands, and included the following items:
(1) Review of transfer pricing; (2) Tax administrative appeal; (3) salary information checklist; (4) auditing the registered capital injection; (5) verification of direct tax deductions for business tax for concurrent businesspersons.

If the company has one of the following circumstances, the CPA expense shall be disclosed:

(1) If the non-audit fees paid to the CPA, the CPA's accounting firm and its affiliatedenterprises is more than one quarter of the audit fees, the amount of audit and non-audit fees and the content of non-audit services shall be disclosed:Not Applicable.
(2) If the accounting firm is changed and the audit fees paid in the year of the replacement is less than that of the previous year, the amounts of the audit fees before and after the replacement and the causes shall be disclosed: Not Applicable.

(3) If the audit fees were reduced more than 15% from that of the prior year, the reduction amount, percentage and reasons for the reduction of audit fees shall be disclosed: Not Applicable.

5. Replacement of CPA: Not Applicable.

The Company’s Chairman, Chief Executive Officer, Chief Financial Officer, and managers in charge of its finance and accounting operations did not hold any positions in the Company’s independent auditing firm or its affiliates in the past year: None.
Any Transfer of Equity Interests and/or Pledge of or Change in Equity Interests by a Director, Supervisor, Managerial Officer; or Shareholder with a Stake of More than 10 Percent during the Most Recent Fiscal Year or during the Current Fiscal Year up to the Date of Publication of the Annual Report:
(1) Changes in Shareholding of directors, supervisors, managers, and major shareholders

Unit: shares

shareholders				Unit: shares	Unit: shares
Title	Name	2020		As of May7,2021
		Holding Increase (Decrease)	Pledged Holding Increase (Decrease)	Holding Increase (Decrease)	Pledged Holding Increase (Decrease)
Chairman	Fu Hui-Tung	33,230	0	0	0
Director and major shareholder	Excelsior Group Holdings Co., Ltd.	1,054,537	0	0	0
Juristic-person director representative	Excelsior Group Holdings Co., Ltd. Representative:Chen Tun-Ling	38,639	0	0	0
Juristic-person director representative	Excelsior Group Holdings Co., Ltd. Representative:Kao Shen	16,671	0	0	0
Director and vice gerenal manager	Wang Ming-Ting	15,636	0	0	0
Director	Hsieh Yen-Sheng	45,335	0	0	0
Director	FuJo-Hsuan	100,000	0	0	0
Indepent Director	Chan Tzu-Sheng	28	0	0	0
Indepent Director	Chang Wu-I	0	0	0	0
Indepent Director	Kuo Yu-Chia	0	0	0	0
Gerenal Manager	Chang Ming-Cheng	103,891	0	0	0
CFO	Chou Cheng-Hsiao	35,912	0	0	0
Major shareholder	Excelsior Investment Co., Ltd.	1,115,245	0	0	0

Note 1: Shareholders with more than 10% of the Company’s shares shall be listed as major shareholders.

(2) Information on equity transfer or equity pledge: None.

8. Information on Relationship between any of the Top Ten Shareholders

As of April 24,2021(Last Record Date)

Name	Current Shareholding	Current Shareholding	Spouse’s/minor ’s Shareholding	Spouse’s/minor ’s Shareholding	Shareholding by Nominee Arrangement	Shareholding by Nominee Arrangement	Name and Relationship Between the Company’s Top Ten Shareholders, or Spouses or Relatives Within Two Degrees	Name and Relationship Between the Company’s Top Ten Shareholders, or Spouses or Relatives Within Two Degrees
	Shares	%	Shares	%	Shares	%	Name	Relation
Excelsior Investment Co., Ltd Director`：`FU JO- HSUAN	15,773,454 100,000	11.18% 0.07%	0 0	0 0	0 0	0 0	1. Excelsior Group Holdings Co., Ltd. And Xuan Hui Investment Co., Ltd. 2. Bestchain Healthtaiw an Co., Ltd 1.Excelsior Group Holdings Co., Ltd. 2.Bestchain Healthtaiwa n Co., Ltd 3.Xuan Hui Investment Co.,Ltd.	1. Investment company to Excelsior Investment Co. , Ltd. accounted for using equity method. 2. Investee of Bestchain Healthtaiwan Co., Ltd. accounted for using equity method. 1. Serves as a Director of Excelsior Group Holdings Co., Ltd. 2. Serves as a Director of Bestchain Healthtaiwan Co., Ltd. 3. Serves as a Director of Xuan Hui Investment Co.,Ltd.
Excelsior Group Holdings Co., Ltd Director`：`FU HUI- TUNG	14,914,833 469,993	10.57% 0.33%	0 1,645	0 0.00%	0 3,819,438 (Note 4)	0 2.71% (Note 4)	1.Excelsior Investment Co., Ltd 2.Bestchain Healthtaiw an Co., Ltd 3.Xuan Hui Investment Co., Ltd. 1.Bestchain Healthtaiwa n Co., Ltd 2.Xuan Hui Investment Co.,Ltd.	1. Investee of Excelsior Investment Co. , Ltd. accounted for using equity method. 2. Investee of Bestchain Healthtaiwan Co., Ltd. accounted for using equity method. 3. The same chairman as that of Xuan Hui Investment Co., Ltd. 1. Serves as a Director of Bestchain Healthtaiwan Co., Ltd. 2. Serves as Chairman of Xuan Hui Investment Co.,Ltd.
Bestchain Healthtaiwan Co., Ltd Director`：`ZHANG XIAN-ZHENG	13,865,245 35,000	9.82% 0.02%	0 0	0 0	0 0	0 0	1. Excelsior Group Holdings Co., Ltd. And Excelsior Investment Co., Ltd 2.Xuan Hui Investment Co., Ltd. None	1. Investment company to Bestchain Healthtaiwan Co., Ltd. accounted for using equity method. 2. Investment company to Bestchain Healthtaiwan Co., Ltd. accounted for using cost method. None
Arich Ivestment Co., Ltd. Director`：`CHANG CHUN-JEN	4,200,000 533	2.98% 0.00%	0 10,729	0 0.01%	0 0	0 0	None None	None None
Xuan Hui Investment Co., Ltd.	3,819,438	2.71%	0	0	0	0	1.Excelsior Group Holdings Co., Ltd.	1. The same chairman as that of Excelsior Group Holdings Co., Ltd.

Name	Current Shareholding	Current Shareholding	Spouse’s/minor ’s Shareholding	Spouse’s/minor ’s Shareholding	Shareholding by Nominee Arrangement	Shareholding by Nominee Arrangement	Name and Relationship Between the Company’s Top Ten Shareholders, or Spouses or Relatives Within Two Degrees	Name and Relationship Between the Company’s Top Ten Shareholders, or Spouses or Relatives Within Two Degrees
	Shares	%	Shares	%	Shares	%	Name	Relation
Director`：`FU HUI- TUNG	469,993	0.33%	1,645	0.00%	3,819,438 (Note 4)	2.71% (Note 4)	2.Excelsior Investment Co., Ltd. 3.Bestchain Healthtaiwa n Co., Ltd. 1.Excelsior Group Holdings Co., Ltd 2.Bestchain Healthtaiwa n Co.,Ltd	2. Investee of Excelsior Investment Co. , Ltd. accounted for using equity method. 3. Investee of Bestchain Healthtaiwan Co., Ltd. accounted for using cost method. 1. Serves as Chairman of Excelsior Group Holdings Co., Ltd. 2. Serves as a Director of Bestchain Healthtaiwan Co., Ltd.
LIN CHUN-YAO	1,465,000	1.04%	0	0	0	0	None	None
City Bank trusteeship of DFA securities account	969,706	0.69%	0	0	0	0	None	None
Taiwan Bank trusteeship of ING pension fund securities account	796,301	0.56%	0	0	0	0	None	None
HSIEH YEN- SHENG	641,200	0.45%	184,372	0.13%	0	0	None	None
TAIAN Insurance company. Director`：`LI SUNG-CHI	632,964 0	0.45% 0	0 0	0 0	0 0	0 0	None None	None None

Note 1: List out the top ten shareholders. For institutional shareholders, list out the names of the institutional shareholders and also the names of the representatives separately.

Note 2: The calculation of the proportion of shares in holding is based on the holding of shares by the person, spouse, children who are minors, or in the name of a third party.

Note 3: List out the shareholders who are institutions and natural persons, and disclose their relation in accordance with the Criteria for the Compilation of Financial statements by Securities Issuers. Note 4: Xuan Hui Investment Co., Ltd. holds 3,819,438 shares, with a shareholding ratio of 2.71%.

The number of shares of the same invested company held by the Company, the Company's directors, supervisors, and executive officers, and the businesses controlled directly or indirectly by the Company, and the consolidated shareholding ratio.

Ownership of Shares in Affiliated Enterprises

			March 31,2021/Unit: shares,%	March 31,2021/Unit: shares,%	March 31,2021/Unit: shares,%	March 31,2021/Unit: shares,%
Affiliated Enterprises (Note 1)	Ownership by the Company		Direct or Indirect Ownership by Directors/Supervisors/Ma nagers		Total Ownership
	Shares	%	Shares	%	Shares	%
Jiate Excelsior Co., Ltd.	1,607,200	49.0%	0	0.0%	1,607,200	49.0%
Bestchain Healthtaiwan Co., Ltd	41,150,196	44.7%	20,008,017	21.7%	61,158,213	66.4%
Arich Enterprise Co., Ltd.	29,829,742	40.0%	2,187,762	2.9%	32,017,504	42.9%
Dynamic Medical Technologies Inc.	11,550,425	38.5%	0	0.0%	11,550,425	38.5%
Excelsior Healthcare Co., Limited	39,411,623	100.0%	0	0.0%	39,411,623	100.0%
Bestsmile Co., Ltd.	1,150,874	98.0%	291	0.0%	1,151,165	98.0%
Visionfront Corporation	2,434,870	44.5%	35,750	0.6%	2,470,620	45.1%
Sunrise Health Care Company	2,085,547	24.0%	0	0.0%	2,085,547	24.0%
Excelsior Medical (HK) Co., Ltd.	53,154,741	64.4%	29,439,829	35.6%	82,594,570	100.0%
Excelsior Beauty Co., Ltd.	11,534,804	41.0%	15,154,496	53.9%	26,689,300	94.9%
Excelsior Asset Management Co., Ltd.	80,398,900	100.0%	0	0.0%	80,398,900	100.0%
Medifly Co., Ltd.	3,615,976	28.7%	0	0.0%	3,615,976	28.7%
Dynamic Medical Technologies (HongKong)Ltd.	0	0.0%	79,021,783	100.0%	79,021,783	100.0%
Guangzhou Dynamic Inc.	Note 2	0.0%	Note 2	100.0%	Note 2	100.0%
CYJ INTERNATIONAL COMPANY LIMITED	0	0.0%	2,150,000	50.0%	2,150,000	50.0%
Medytox Taiwan Inc.	0	0.0%	1,800,000	40.0%	1,800,000	40.0%
EG Healthcare Inc.	0	0.0%	5,293,454	99.9%	5,293,454	99.9%
Excelsior Renal Service Co., Limited	0	0.0%	73,375,728	49.0%	73,375,728	49.0%
Excelsior Investment (Malaysia)	0	0.0%	5,395,436	100.0%	5,395,436	100.0%
Renal Laboratories Sdn. Bhd.	0	0.0%	16,773,586	70.0%	16,773,586	70.0%
Medi-Chem Systems Sdn. Bhd.	0	0.0%	350,000	70.0%	350,000	70.0%
Renal Management Sdn. Bhd	0	0.0%	200,000	100.0%	200,000	100.0%
Sino Excelsior Investment Incorporation	Note 2	0.0%	Note 2	100.0%	Note 2	100.0%
Asia Best Healthcare Co., Ltd.	0	0.0%	352,254	51.3%	352,254	51.3%
CYJ International Taiwan Inc.	0	0.0%	9,792,000	80.0%	9,792,000	80.0%

Note 1: This table is based on the Company's investments accounted for using equity method. Note 2: The invested company has not issued shares, so there are no shares held.

`Ⅳ` . Capital Overview

1. Source of Capital

(1) Source of capital

Year /Month	Issue Price	Authorized capital stock	Authorized capital stock	Paid-in capital	Paid-in capital	Remarks	Remarks	Remarks
		Shares	Amount (NT$ in thousands)	Shares	Amount (NT$ in thousands)	Source of Capital	Capital Increase by Assets Other than Cash	Other
1988.01 1990.04 1991.06 1993.11 1993.11 1997.02 1997.05 1998.07 2001.06 2002.07 2003.01 2003.01 2003.02 2003.06 2004.05 2004.09 2005.04 2005.09 2006.04	10 10 10 10 10 10 35 10 10 10 10 50 10 10 10 10 10 10 10	500,000 2,500,000 6,500,000 11,500,000 12,000,000 16,000,000 19,990,000 60,000,000 60,000,000 70,000,000 70,000,000 70,000,000 70,000,000 100,000,000 100,000,000 103,000,000 103,000,000 112,650,000 112,650,000	5,000 25,000 65,000 115,000 120,000 160,000 199,900 600,000 600,000 700,000 700,000 700,000 700,000 1,000,000 1,000,000 1,030,000 1,030,000 1,126,500 1,126,500	500,000 2,500,000 6,500,000 11,500,000 12,000,000 16,000,000 19,990,000 30,000,000 36,000,000 43,058,057 43,073,660 53,073,660 53,074,050 62,316,544 62,470,676 68,047,942 68,257,948 70,671,307 72,161,419	5,000 25,000 65,000 115,000 120,000 160,000 199,900 300,000 360,000 430,580 430,737 530,737 530,741 623,165 624,707 680,479 682,579 706,713 721,614	Capital atestablishment Capital increase by cash Capital increase by cash Capital increase by cash Capital increase by earnings Capital increase by cash Capital increase by cash Capital increase by cash Capital increase by earnings and shares dividends Capital increase by earnings ,shares dividends and conversion of convertible bonds Conversion of convertible bonds Capital increase by cash Conversion price adjustment and issuance of additional shares Capital increase by earnings and shares dividends Conversion of convertible bonds Capital increase by earnings and shares dividends Conversion of convertible bonds Capital increase by earnings and shares dividends Conversion of convertible bonds	None None None None None None None None None None None None None None None None None None None	1998.07.17(87),TCZ(1) No. 59134 Convertible bonds of NTD 4,000,000 were converted into 64,834 ordinary shares. Convertible bonds of NTD 900,000 were converted into 15,603 ordinary shares. 2002.11.29,TCZ(1) No. 0910162126 Convertible bonds were adjusted and issued into more 390 ordinary shares. 2003.04.17,TCZ(1) No. 0920113020 Convertible bonds of USD 200,000 were converted into 154,132 ordinary shares. 2004.07.15, JGZYZ No.0930131436 Convertible bonds of USD 200,000 were converted into 210,006 ordinary shares. 2005.07.26, JGZYZ No. 0940128764 Convertible bonds of USD 1,370,000 were converted into 1,490,112 ordinaryshares.

Year /Month	Issue Price	Authorized capital stock	Authorized capital stock	Paid-in capital	Paid-in capital	Remarks	Remarks	Remarks
		Shares	Amount (NT$ in thousands)	Shares	Amount (NT$ in thousands)	Source of Capital	Capital Increase by Assets Other than Cash	Other
2006.07 2006.08 2006.10 2007.01 2007.04 2007.10 2009.01 2009.10 2010.01 2010.04 2010.08 2010.10 2010.11	10 10 10 10 10 10 10 10 10 10 10 10 78	112,650,000 112,650,000 112,650,000 112,650,000 112,650,000 112,650,000 112,650,000 200,000,000 200,000,000 200,000,000 200,000,000 200,000,000 200,000,000	1,126,500 1,126,500 1,126,500 1,126,500 1,126,500 1,126,500 1,126,500 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000	72,324,569 77,993,569 78,047,952 91,987,264 100,141,997 80,113,597 84,866,099 89,108,471 92,991,295 94,618,899 95,026,841 95,233,952 102,983,952	723,246 779,936 780,479 919,873 1,001,420 801,136 848,661 891,085 929,913 946,189 950,268 952,340 1,029,840	Conversion of convertible bonds Capital increase by earnings and shares dividends Conversion of convertible bonds Conversion of convertible bonds Conversion of convertible bonds Capital reduction by cash Issue new shares to acquire ordinary shares of Arich Conversion of convertible bonds Conversion of convertible bonds Conversion of convertible bonds Conversion of convertible bonds Conversion of convertible bonds Capital increase by cash	None None None None None None Stocks of other companies None None None None None None	Convertible bonds of USD 150,000 were converted into 163,150 ordinary shares. 2006.06.30, JGZYZ No. 0950127700 Convertible bonds of USD 50,000 were converted into 54,383ordinary shares. Convertible bonds of USD 11,880,000 were converted into 13,939,312ordinary shares. Convertible bonds of USD 6,950,000 were converted into 8,154,733ordinary shares. 2007.10.29, JGZYZ No. 0960052676 2008.12.22, JGZYZ No. 0970067548 Convertible bonds of NTD 207,200,000 were converted into 4,242,372 ordinary shares. Convertible bonds of NTD 185,600,000 were converted into 3,882,824 ordinary shares. Convertible bonds of NTD 77,800,000 were converted into 1,627,604 ordinary shares. Convertible bonds of NTD 19,500,000 were converted into 407,942 ordinary shares. Convertible bonds of NTD 9,900,000 were converted into 207,111 ordinary shares. 2010.10.19, JGZFZ No. 0990055485

Year /Month	Issue Price	Authorized capital stock	Authorized capital stock	Paid-in capital	Paid-in capital	Remarks	Remarks	Remarks
		Shares	Amount (NT$ in thousands)	Shares	Amount (NT$ in thousands)	Source of Capital	Capital Increase by Assets Other than Cash	Other
2012.10 2014.10 2015.09 2016.01	10 10 10 10	200,000,000 200,000,000 200,000,000 200,000,000	2,000,000 2,000,000 2,000,000 2,000,000	113,252,348 112,952,348 120,452,348 121,780,560	1,132,523 1,129,523 1,204,523 1,217,806	Capital increase by earnings Cancelation of treasury shares Capital increase by cash Conversion of convertible bonds	None None None None	2012.08.20, JGZFZ No. 1010036655 2014.10.03, JSSZ No. 10301207220 2015.06.16, JGZFZ No. 1040021860 Convertible bonds of NTD 52,200,000 were converted into 1,328,212 ordinary shares.
2016.05 2016.08 2016.11 2017.03 2017.08 2018.02 2018.05 2018.07 2018.11 2020.01	10 10 10 10 10 10 10 10 10 10	200,000,000 200,000,000 200,000,000 200,000,000 200,000,000 200,000,000 200,000,000 200,000,000 200,000,000 200,000,000	2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000	125,569,358 127,205,487 127,581,485 127,626,817 127,765,483 127,827,385 127,990,578 128,134,077 128,148,970 141,148,970	1,255,694 1,272,055 1,275,815 1,276,268 1,277,655 1,278,274 1,279,906 1,281,341 1,281,490 1,411,490	Conversion of convertible bonds Conversion of convertible bonds Conversion of convertible bonds Conversion of convertible bonds Conversion of convertible bonds Conversion of convertible bonds Conversion of convertible bonds Conversion of convertible bonds Conversion of convertible bonds Capital increase by cash	None None None None None None None None None None	Convertible bonds of NTD 148,900,000 were converted into 3,788,798 ordinary shares. Convertible bonds of NTD 64,300,000 were converted into 1,636,129 ordinary shares. Convertible bonds of NTD 14,100,000 were converted into 375,998 ordinary shares. Convertible bonds of NTD 1,700,000 were converted into 45,332 ordinary shares. Convertible bonds of NTD 5,200,000 were converted into 138,666 ordinary shares. Convertible bonds of NTD 2,200,000 were converted into 61,902 ordinary shares. Convertible bonds of NTD 5,800,000 were converted into 163,193 ordinary shares. Convertible bonds of NTD 5,100,000 were converted into 143,499 ordinary shares. Convertible bonds of NTD 500,000 were converted into 14,893 ordinary shares. 2019.12.11, JGZFZ No. 1080339288

April 24, 2021

(2) Type of stock

				April 24,2021
Type of Stock		Authorized Capital		Remarks
	Outstanding shares (Note)	Unissued Shares	Total Shares
Common Stock	141,148,970	58,851,030	200,000,000

Note:Issued outstanding shares by the Company are publicly traded on TWSE.

(3) Shelf-registration `：` None.

2. Shareholder Structure

Shareholder Structure	Shareholder Structure
				As of April 24,2021 Unit: shares. Domestic Natural Persons Foreign Institutions and Natural Persons Total 28,320 105 28,619
Item Amount	Government Agencies	Financial Institutions	Other Institutions	Domestic Natural Persons	Foreign Institutions and Natural Persons
Number of Shareholders	`－`	`－`	194	28,320	105
Shareholding (shares)	`－`	`－`	59,490,289	73,200,748	8,457,933	141,148,970
Percentage (%)	`－`	`－`	42.14	51.86	6.00	100.00

3. Distribution of Share Ownership

Common Stock

		As of April 24,2021 Unit: shares.	As of April 24,2021 Unit: shares.
Class of Shareholding	Number of Shareholders	Number of Shares Held	Shareholding Percentage(%)
1 `～` 999	13,775	1,035,215	0.73
1,000 `～` 5,000	11,906	23,176,873	16.42
5,001 `～` 10,000	1,584	11,579,466	8.20
10,001 `～` 15,000	503	6,062,870	4.30
15,001 `～` 20,000	251	4,528,248	3.21
20,001 `～` 30,000	240	5,925,918	4.20
30,001 `～` 40,000	92	3,238,285	2.29
40,001 `～` 50,000	70	3,235,268	2.29
50,001 `～` 100,000	116	8,065,728	5.71
100,001 `～` 200,000	40	5,648,060	4.00
200,001 `～` 400,000	18	4,653,495	3.30
400,001 `～` 600,000	13	6,289,750	4.46
600,001 `～` 800,000	4	2,702,118	1.92
800,001 `～` 1,000,000	1	969,706	0.69
Over 1,000,001	6	54,037,970	38.28
Total	28,619	141,148,970	100.00

Note: Preferred Shares: None.

4. List of Major Shareholders

List all shareholders with a stake of 5 percent or greater, and all shareholders who rank in the top 10 in shareholding percentage, and specify the number of shares and stake held by each shareholder on the list.

As of April 24,2021 Unit: shares.

Shares Name	Number of shares held	Shareholding percentage(%)
Excelsior Investment Co., Ltd.	15,773,454	11.18%
Excelsior Group Holdings Co., Ltd.	14,914,833	10.57%
Bestchain Healthtaiwan Co., Ltd.	13,865,245	9.82%
Arich Investment Co., Ltd.	4,200,000	2.98%
Xuan Hui Investment Co., Ltd.	3,819,438	2.71%
Lin,Jun-Yao	1,465,000	1.04%
CityBank trusteeshipof DFA securities account	969,706	0.69%
Taiwan Bank trusteeship of ING pension fund securities account	796,301	0.56%
Hsieh Yen-Sheng	641,200	0.45%
Taian Insurance Co.,Ltd.	632,964	0.45%

5. Market Prices, Net Worth, Earnings and Dividends Per Share

Unit: NT$

						Unit: NT$
Item	Year			2019	2020	As of May 7, 2021(Note 6)
Market Price per Share	Highest			55.80	63.80	59.50
	Lowest			45.85	46.00	54.30
	Average			51.04	55.68	56.88
Net Worth per Share	Before Distribution			54.21	53.78	51.11
	After Distribution			50.57	50.28(Note 1)	(Note 2)
Earnings per Share	Weighted Average Shares (thousand shares)			128,149	140,652	141,149
	Earnings Per Share	Before Adjustment		4.02	4.06	0.93
		After Adjustment		4.02	4.06(Note 1)	(Note 2)
Dividends per Share	Cash Dividends			3.3	3.5	(Note 2)
	Stock dividends		Dividends from Retained Earnings	0	0	(Note 2)
			Dividends from Capital Surplus	0	0	(Note 2)
	Accumulated Undistributed Dividends			0	0	0
Return on Investment Analysis	Price / Earning Ratio `（`Note 3`）`			12.70	13.71	(Note 2)
	Price / Dividend Ratio `（`Note 4`）`			15.47	15.91	(Note 2)
	Cash Dividend yield rate (%)(Note 5`）`			6.47	6.29(Note 1)	(Note 2)

Note 1 ： This dividend proposal has been approved by the Board of Diretors on March 12, 2021. Note 2 ： The earnings had not yet been finalized.

Note 3 ： Price / Earning Ratio = Average closing price per price / Earnings per Share Note 4 ： Price / Dividend Ratio = Average closing price per price / Cash dividend per Share Note 5 ： Cash Dividend yield rate = Cash dividends per share / Average closing price per price Note 6 ： Listed net worth per share and earnings per share are according to the report review

by CPA in the lastest quarter of the date of the publication of this annual report. Other columns show information for the current year as of the date publication of the annual report.

6. Dividend Policy and Implementation Status

(1) Dividend policy

According to Article 26 of the company’s Articles of Incorporation, The dividend policy as follows:

The Company sets up its dividend policy in conjunction with its current and future development plan and by taking the investment environment, capital requirements and local and foreign competition status into account, whereas the Company also concurrently considers shareholders’ interests. The annual dividend payable to shareholders from the cumulative distributable surplus shall be not less than 20% of current year after-tax profit. The shareholder dividend and bonus can be distributed by either cash or stock, in which the cash dividend shall be no less than 20% of the total dividend amount.

(2) Proposed distribution of dividend

Item Year	Cash dividends	Stock dividends
2016	2.49728671	None
2017	2.79329813	None
2018	3.0000	None
2019	3.3000	None
2020(Note)	3.5000	None

Note: This dividend proposal has been approved by the Board of Diretors on March 12, 2021.

(3) The material change in the expected dividend policy: None.

7. Impact of the Proposed Stock Dividends in Shareholders Meeting on Business Performances and EPS

Not applicable.

8. Employee Compensation and Directors’ Remuneration

(1) Scope of employee compensation and directors’ remuneration referred to in 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 preceding employee compensation shall be distributed by stock or cash, and the recipients shall cover the employees of subordinate companies the terms set up by the Board of Diretors. The preceding directors’ remuneration shall be paid in cash only.

Both the employee compensation and directors’ remuneration should be
approved by the Board of Directors and reported during the shareholders' meeting.
(2) The basis for estimating the remuneration to employees and directors for calculating the number of shares to be distributed as remuneration to employees, and the accounting treatment of the discrepancy, if any, between the actual distributed amount and the estimated figure, for the current period:

As adopted by the Company’s Board of Directors on March 12, 2021, 5% of the Company’s 2020 profits in an amount of NT$36,378,877, shall be distributed to employees as their compensation, whereas 2.5% of the profits in an amount of NT$18,189,439 shall be distributed to directors as their remuneration. The preceding amounts shall be distributed in cash.

If the amount of the annual individual financial report is still changed after the date of publication, there is a difference between the actual allotment amount and the estimated amount, it is classified as the profit and loss of the following year.

(3) Distribution of compensation approved by the Board of Directors

The 2020 Distribution report of employees’ compensations and directors remuneration approved by the Company’s Board of Directors on March 12, 2021. Approved appropriations were as follows:

A.The bonusus to em lo ees and remuneration to Directors p y

Item	Amount(NT$thousands)
Directors’ Remuneration	18,189
Employee Compensation in Cash	36,379
Employee Compensation in Stock	None

The aforementioned amounts of employees compensations and directors’ remuneration approved by the Company’s Board of Directors are totally the same with that accured expenses in the 2020 financial Statements.

B. Ratio of recommended employee stock bonus to capitalization of earnings: Not applicable.
(4) Information for employee compensation and directors’ remuneration in previous fiscal year:

On March 12, 2020, the Board of Directors of Company approved of employees’ and Directors’ compensations in 2019 of NT$32,365 in thousands and NT$16,183 in thousands respectively. There is no difference between the amounts recognized in the 2019 individual financial statements.

9. Buyback of Treasury Stocks:

None.

10. Issuance of Corporate Bonds:

None.

11.Issuance of preferred shares, global depositary receipts (GDR), employee stock option and employee restricted stock:

None.

12.Issuance of New Shares Acquisition or Exchange of other Companys’ Shares

None.

13. Status of Capital Utilization Plan

(1) Finance plans:

For the period as of the quarter perceding the date of publication of the annual report, with respect to each uncompleted public issue or private placement of securities, and to such issues and placements that were completed in the most recent 3 years but have not yet fully yieded the planned benefits, the annual report shall provide a detailed description of the plan for each such public issue and private placement: Not applicable.

(2) Implementation Plans: Not applicable.

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`Ⅴ` . Business Overview

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1. Business Scope

(1) Major business scope
A.The Group’s primary business content

The Group operates in the following businesses:

a. Sales, repair and maintenance, lease of medical devices and medical management consultancy.
b. Sales of healthcare home appliances.
c. Sales, lease and maintenance of aesthetic medical devices, sales of body shaping devices, aesthetic consumables, and hair care products.
d. Sales, promotions, distribution and logistics services of medicine.
B.Percentage of sales revenue

Percentage of sales revenue	Percentage of sales revenue	Percentage of sales revenue
Unit: NT$thousands
Major Product Categories	2020	Percentage of Sales Revenue
Surgical consumables	1,475,340	22.10%
Dialyzers, blood tubing set and A.V. fistula needles	1,078,300	16.15%
Medicine	1,108,333	16.60%
Erythropoietin (EPO), concentrated solution andpowders	884,909	13.26%
Aesthetic consumables and spare parts	565,161	8.47%
Aesthetic medical devices	234,959	3.52%
Home appliances	119,381	1.79%
Medical devices	125,487	1.88%
Blood bags ,wound and ostomy products	178,281	2.67%
Others	905,343	13.56%
Total	6,675,494	100.00%

C.Current products and services

a. Dialyzers
b. Blood tubing set and A.V. fistula needles
c. Hemodialysis concentrated solution and powders and normal saline
d. Disinfectant for hemodialysis machine
e. Hemodialysis machine and RO central system
f. Erythropoietin (EPO) and anticoagulant etc.
g. Healthcare home appliances including air purifiers
h. Blood bags and related products
i. Wound and ostomy products
j. Agency sales of surgical products and consumables
k. Plasmapheresis machine
l. Self-pay medicine related to hemodialysis patients
m.Aesthetic medical devices

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n. Aesthetic consumables
o. Aesthetic dermal fillers
p. Skin and body imaging systems
q. Body shaping devices
r. Gynecological energy-based devices
s. Maintenance of aesthetic medical devices
t. Aesthetic clinic management consultancy
u. Hair care and body shaping services
v. Anti-aging cosmeceuticals
w. Sales and promotions of medicine related to OB/GYN, family medicine, urology, dermatology, ophthalmology, and psychiatry
x. Sales and promotions of medicine related to hair growth, digestive system, quit smoking, and ginkgo
y. Sales and promotions of oral hygiene, daily consumer products and beauty products
z. Comprehensive integrated distribution services including customer service, tender/bidding, information flow, cash flow and logistics

D. New products (services) to be developed

a. Medical consumables and devices related to wound caring
b. Medical consumables and devices related to blood banks
c. New home appliances products of own brand “ULTRACLEAN”
d. Agency and distribution of products from foreign renowned home appliances brands
e. New hemodialysis consumables products of own brand “FASFLO”
f. Sales of products and services related to hair growth and hair care products
g. Vaginal rejuvenation treatments
h. Skin care products
i. Develop in-house licensed prescription/non-prescription drugs
j. R&D of daily health consumer products
k. Develop new pharmaceutical distribution and logistics business
l. Agency and distribution of medical products from foreign renowned brands

(2) Industry overview

A.Current status and development of the industry

 Medical device sector

The Company is a comprehensive medical devices and comsumables provider. Our major businesses include trading of medical products used in hemodialysis treatment, surgeries and diagnosis, air purifiers, blood bags, and wound and ostomy products. Below is a summary of the domestic medical device industry and the hemodialysis industry that is the Company’s major products:

a. Overview and development in the medical device industry

Medical devices can broadly mean various products, and in the boundaries defined by Industrial Technology Research Institute’s Industrial Economics & Knowledge Center (IEK), could encompass diagnostic and monitoring devices, assistive and repair devices, surgical and treatment devices, in vitro diagnostic

103

devices (IVD), and other relevant medical products. Technologies involved in manufacturing medical devices include electronics, electrical engineering, biotechnology, biochemistry, medical engineering, measurement and chemical engineering. In addition, research and development (R&D) require extensive time, and product assurance and clinical testing are also required, creating high barrier to entry. In terms of the market, the medical device industry is significantly influenced by government policies; and in particular, policies on health insurance benefits will directly impact the market demand. Hence, the demand for medical devices mostly comes from regions with developed countries such as North America, Europe, and Japan. Additionally, since safety specification requirements and medical insurance benefit systems also vary from country to country, market penetration is very difficult. Nevertheless, after a product has been introduced to the market, thanks to patent and certification protection and the longer product life cycle, profits can be higher compared to other industries.

b. Overview and development in the hemodialysis industry

Hemodialysis, or more commonly known as kidney dialysis in Taiwan, is a critical life-supporting treatment for patients with chronic kidney disease. When a terminally ill kidney disease patient fails to filter wastes and water from his/her body due to gradual or complete loss of kidney functions, the patient would have to rely on hemodialysis machine to pump blood out to expose the wastes and excess to the dialysate through the hemodialysis machine. This process cleanses the blood and removes water to reduce symptoms of toxin overload. It is common for patients to receive three times of hemodialysis treatment in every week.

The first hemodialysis treatment in Taiwan began in 1963. Early the cost of hemodialysis machines was high, leading to staggering medical expenses. And the social insurance system was not yet complete; therefore, this high-tech medical treatment was not accessible to most of the unfortunate end-stage renal failure patients. Starting from 1984, the qualification for hemodialysis under labor insurance scheme gradually eased and hemodialysis treatment became increasingly common in Taiwan. The number of hemodialysis treatment patients rapidly grew, and according to statistics from the National Kidney Foundation R.O.C., as of the fourth quarter (Q4) in 2020, the cumulative number of patients receiving hemodialysis and peritoneal dialysis in Taiwan had reached more than 92,000 persons, and the demand for the hemodialysis market continues to grow. Benefiting from the gradual introduction of social insurance schemes including public employee insurance, labor insurance, and the National Health Insurance system that commenced in 1995, the medical expenses associated with hemodialysis for end-stage renal failure patients were greatly reduced, allowing them to receive long-term hemodialysis treatment. Taiwan’s hemodialysis market is gradually prospering; as the technology and quality of hemodialysis both become more mature, the survival rates of patients are also increasing accordingly. In addition, entities in hemodialysis treatment as well as the number of hemodialysis machines are also continuing to grow. The hemodialysis industry in Taiwan began to learn the operations and management style over hemodialysis centers from developed nations. In order

104

to enhance operational effectiveness and patient satisfaction for treatment, in addition to supplying the hardware facilities of hemodialysis centers, comprehensive medical device providers also began to provide softwares including personnel training, cost analysis, and medical quality analysis and more. Additionally, in recent years, certain end-stage renal failure patients are also opting for peritoneal dialysis treatment. Nevertheless, after a few years of receiving peritoneal dialysis treatment, most peritoneal dialysis patients still need to switch over to hemodialysis treatment to extend their lives.

 Aesthetic medical sector

Thanks to the development of technology, many more effective aesthetic medical devices with little downtime are launching. In addition, with the increase of aging population and acceptance of advanced aesthetic medical treatments from the public, the global aesthetic medical industry remains a booming industry. The demand from the Taiwanese aesthetic medical market comes from the pursuit of the latest technology and non-invasive treatment. The popularization and transparency of aesthetic medical information has led consumers to pay attention to the safety and cost performance ratio of the aesthetic medical treatments.

However, the COVID-19 epidemic in 2020 had a great impact on the global aesthetic medical supply chain, including upstream suppliers and downstream end-consumers. The global aesthetic medical market is dominated by European and American principals. However, these areas are where COVID-19 spread out seriously. In that case, the manufacture and exportation of aesthetic devices or spare parts are all delay. On the other hand, end-consumers also defer their aesthetic treatments.

 Pharmaceutical sales and distribution and logistics sector

The Group is a pharmaceutical channel distributor and most of our businesses concern the sales, promotions, and distribution logistics services of pharmaceutical products in Taiwan. In terms of pharmaceutical sales and promotions, we mostly sale pharmaceutical products to medical institutions, clinics, pharmacies, chain drugstores and hypermarkets based on the individual needs of such institutions. In terms of distribution logistics, besides providing warehousing and shipping of medicine that comply with applicable pharmaceutical regulations, we also provide well-rounded services including customer services, acting for pharmaceutical principals to tender hospital offers, information flow, cash flow, and logistics services. The following is a description of the market overview of the Company’s industry:

a. Pharmaceutical sales and distribution logistics

As the coverage of national health insurance (NHI) in Taiwan has nearly reached 100% and approximately a quarter of NHI’s total expenditures covers medicine, the National Health Insurance Administration has in effect become the biggest buyer of prescription drugs in Taiwan. Statistics from IMS Health indicated that, most of the revenues from Taiwan’s pharmaceutical market came from hospitals, clinics, and pharmacies. In recent years, the National Health Insurance Administration (NHIA) has been actively launching the “2nd

105

Generation NHI”, by encouraging hospitals to transfer patients to clinics and to release chronic illness prescription refill slip. In addition, due to pressures from financial loss, the NHIA has also been encouraging the public to practice selfpay for minor ailments. In 2019, the hierarchy of medical care will be implemented, in which 2% of the patients will be transferred to clinics so that clinics could acquire more patients. Nevertheless, the clinics could potentially lose the patients, if patients are switched from brand-name drugs at hospitals to locally-produced generic drugs at the clinics. Since clinics do not have restrictions on the number of medicine they could carry, doctors could be asked to prescribe both brand and generic drugs of the same ingredients, so that the market shares of both clinics and pharmacies could both grow in the future.

Though Taiwan’s pharmaceutical market continues to grow, but as the prices of NHI medicine continue to be reduced in each year, major global pharmaceutical principals have continued to outsource their sales and promotions and distribution logistics in consideration of costs and maintaining profit margins. To target the increasingly active global pharmaceutical market, and seeing that the international market has extended the quality management of medicine from manufacturing processes to logistics and distribution, the Ministry of Health and Welfare in Taiwan has also emphasized on the reinforced control over medicine distribution and logistics. A phased GDP compliance inspection has commenced since July 1, 2016, and subjects of which include manufacturers of modern medicine in Taiwan, logistics service providers that label and package modern medicine, and pharmaceutical retailers that hold medicine licenses. In particular, inspections for those with elevated risks, such as businesses with licenses for cold chain medicine and restricted medicine will be prioritized.

b. Industry development

The global pharmaceutical market was approximately valued at US$1.4 trillion in 2020. Data from The Industrial Economics & Knowledge Center (IEK) from the Industrial Technology Research Institute (ITRI) indicated that due to new medicine launch and market needs, the market will grow steadily at a compound annual growth rate (CAGR) of 7.2% from 2021 to 2026, and is expected to reach US$1.8 trillion by 2025. In 2019, the top 10 pharmaceutical markets account for 70% of the market share, and the ranking of such markets have largely remain unchanged. The largest five continue to be the US, China, Japan, Germany, and UK. In terms of CAGR over the next five years, the US market is expected to be 3.2%, China approximately 9.3%, Japan 2.6%, and UK dominating over the other five nations in Western Europe at 4.4% and the others between 2.1% to 2.8%. Brazil is expected to reach 4% and Canada at around 2.6%. In terms of treatment field, the market is still headed by cancer treatment in 2019, followed by diabetes and respiratory diseases. Rapidly growing fields from 2019 to 2023 are diabetes and anticoagulants, followed by cancer, autoimmunity, and immune diseases. From the field of clinical trial products, cancer, central nervous system, and cardiovascular are the top three respectively.

106

B.Correlations throughout the industry chain

 Medical device sector

a. As an integrated medical and healthcare channel provider, the Company’s primary operations are carried out using an “integrated resources” model to provide various services to customers on top of healthcare products. The Company also serves as a healthcare management consultant to medical institutions, and has established a healthcare-related channel system using a “healthcare management” model. The correlations throughout this channel system is shown in the following diagram:

==> picture [298 x 172] intentionally omitted <==

b. Health-related products that the Company sells are available at famous department stores throughout Taiwan, in addition to a tight network including chain electronic stores, hypermarkets, medical supplies shops, and blood centers. Product marketing is described as the following:

==> picture [435 x 191] intentionally omitted <==

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

Foreign Manufacturers
Distributors
department chain electronic medical
hypermarkets blood centers
stores stores supplies shops
Consumers
----- End of picture text -----

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 Aesthetic medical sector

Most of the energy-based aesthetic devices and dermal fillers in the aesthetic medical industry are developed by European and the American manufacturers. However, in recent years, Korean companies have begun to produce similar aesthetic medical products by imitating European and American companies, and won market share through offering lower prices. The aesthetic medical market has therefore been divided into high-end and low-priced market segmentations.

The following lists the upper, middle and lower reaches of the industry:

The relationship between the upper, middle and lower reaches of aesthetic devices and dermal fillers

==> picture [248 x 179] intentionally omitted <==

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

Foreign and domestic manufacturers
Agents /distributors
Aesthetic medical
Hospitals scales
centers
Consumers
----- End of picture text -----

 Pharmaceutical sales and distribution and logistics sector

The industry structure of Taiwan’s pharmaceutical market can be divided into upstream suppliers (medicine permit holders) such as local or foreign pharmaceutical pricipals or agents, midstream distributors or logistics providers, and downstream medical institutions. The Group is a pharmaceutical sales and distribution and logistics provider, which is in the midstream of the industry.

In terms of medicine sales and promotions, the pharmaceutical channel distributors will directly sell various pharmaceutical products based on the demand from medical institutions. Key operations include raising the image of pharmaceutical products, providing professional education related to treatment, disseminating the clinical use, effects, side effects and other clinical matters related to the medicine, organizing medical conferences and other promotional activities, and effectively and efficiently delivering various medicine from thousands of suppliers to distribution points located throughout Taiwan.

From the pharmaceutical channel distributors’ standpoint, there may be pharmaceutical manufacturers who provide distribution and logistics services, but since medical institutions ranging from hospitals, clinics, to pharmacies, have very diverse demands (for instance, mid to large-scale hospitals usually procure medicine through tender, demand from clinics vary from department to department, while pharmacies usually have sparse medicine needs), these services are usually provided to areas close to their sites of operation. Since pharmaceutical manufactures need to focus on R&D, manufacturing, and marketing of

108

pharmaceutical products, they cannot cater to individual demands from all medical institutions. Therefore, pharmaceutical channel distributors provide comprehensively-planned services ranging from inventory management, valueadded processing, logistics and delivery, customer complaint, and transportation and shipping within Taiwan. Pharmaceutical channel distributors are critical in supporting pharmaceutical manufacturers in selling their medicine to various medical institutions.

For the pharmaceutical manufacturers, collaborating with channel distributors can enhance the supply chain’s efficiency, thereby allowing them to focus on the R&D, manufacturing, and marketing of pharmaceutical products. Alternatively, by having medical institutions dealing with channel distributors and setting them as suppliers, the pharmaceutical supply can be more stabilized and helps medical institutions to save more on costs. This industry structure helps to integrate various channels, and links the resources throughout the supply chain, thereby helping each end of the industry to achieve optimized cost management.

The relationship between the upper, middle and lower reaches of pharmaceutical market

==> picture [402 x 352] intentionally omitted <==

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

Foreign Domestic
pharmaceutical pharmaceutical Import agent
principal principal
Distribution
and logistics
provider
Hospital Clinic Pharmacy Other sales
channels
Patients
or
Consumers
----- End of picture text -----

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C. Products development trends

 Medical device sector

a. Hemodialysis Products

The soaring material prices around the world have led to significant cost increase in imported consumables. With the exception of hemodialysis machines and dialyzers, most of the consumables can be made in Taiwan without relying on imports. However, the medical and healthcare industry still favor imported products. Therefore, we have opted for OEM from overseas suppliers for our own brand, and collaborated with locally produced sales package in marketing our products to achieve a competitive edge.

b. Surgical consumables and devices

As surgical treatments around the world advance toward minimally invasive surgeries, thereby reducing surgical treatment wounds and decreasing patients’ recovery time, agent for Covidien, which we sell and include surgical consumables ranging from surgical suture, auto suture, endoscopic surgical instruments, energy-based devices, radiofrequency ablation therapeutic devices, bipolar electrosurgical devices (Ligasure), to cordless ultrasonic dissection devices (Sonicision), is expected to continue to grow.

c. Healthcare home appliances products

As various pollutants exist in people’s day-to-day lives, ranging from secondhand smoke, industrial, to car exhaust, making people more prone to including allergies and respiratory diseases, the Company has launched our own “ULTRACLEAN” brand products, and is committed to advocate for using air purifiers along with air circulators, and have launched a line of trendy products that perfectly match home aesthetics, so that consumers can simultaneously enjoy both health and quality of life.

 Aesthetic medical sector

a. Aesthetic medical devices

According to Medical Insight’s 2020 Asia-Pacific Aesthetic Market Study, total Asia-Pacific sales of all aesthetic products reached nearly $2.6 billion in 2018 and are expected to increase by 10% annual growth rate from 2019 to 2023. Those show some of the most stable growth among Asia-Pacific markets compare to other areas.

The most popular aesthetic treatments in the Asia-Pacific market are dermatological treatments, including facial and body rejuvenation, pigmentations and vein treatments, and skin tightening treatments. Among all treatment options, non-invasive aesthetic treatments remain the top choice for consumers.

Aesthetic medical products that the Group sells include three major areas, namely, energy-based aesthetic devices, body shaping and skin tightening, and dermal fillers. In line with global market trends, the indications of aesthetic products have also been expanded to cover rejuvenation, skin whitening, scar removal, wrinkle treatment, to treating sagging skin at the same time, we have also sell body shaping devices such as LPG and cryolipolysis and continue to lead market trends and to provide diverse, quality services to customers.

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b. Dermal fillers

As the public’s demand and acceptance for minimally-invasive treatments grow, dermal fillers have become the fastest growing area in aesthetic medical treatments. According to Medical Insight’s 2021 analysis reports on the global dermal fillers market study, the total global market for all fillers (excluding cosmetic neurotoxins) approached USD$3 billion in 2019. The dermal fillers market is expected to have an annual growth rate of 8.4% from 2019 to 2024, and its total sales are expected to reach US$4.5 billion by 2024.

 Pharmaceutical sales and distribution and logistics sector

a. Pharmaceutical sales and promotions

With the emphasis on national health education and access to medical information, the general public has become more aware of self-medication. The non-prescription drugs market (e.g. comprehensive cold medicine, pain relief, hair growth products, quit smoking, deep scalp treatment, stomach medicine and antacids, skin creams, circulation supplements, eye drops etc.) has shown high levels of growth in each year. In the future, as the NHI’s budget narrows and the government encourages the public to practice self-medication, the ratio of non-prescription drugs expenses will continue to show significant growth.

b. Pharmaceutical distribution and logistics

To ensure the public’s safety and quality in medicine use, the pharmaceutical distribution and logistics industry is highly professional and concentrated. On top of building vast and complex pharmaceutical logistics supply chain system to understand the demands from downstream domestic medical channels and changes in upstream pharmaceutical suppliers, all distribution and logistics companies also need to receive permits, including the PIC/S GMP GDP from Ministry of Health and Welfare, international ISO certification, and pass rigorous audits from pharmaceutical principals.

D. Product market competition

 Medical device sector

a. Hemodialysis Products

As the hemodialysis is a mature industry, competition is intense both at home and abroad. The Company has achieved a competitive edge since we have acquired sales channels and adopted diversified agency or distributor strategies. Major products are separately described in the following:

(a)Dialyzers: the Company is an agent distributor for mostly AsahiKasei and FMC. Besides marketing the own brand Fasflo dialyzers, manufactured by AsahiKasei, we also sell numerous other brands in the market.

(b)Hemodialysis machine: we focus on Japanese-based Nikkiso brand, and we have also strengthened our market competitiveness by acquiring the FMC brand machine from our partner Fresenius.
(c)Blood tubing set and A.V. fistula needles: mostly focused on supplying the market and creating market segmentation by outsourcing the own brand Fasflo manufactured by JMS in Japan and Sunder Biomedical in Taiwan.

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(d)Dialysates, powders and normal saline: besides selling the imported Medivators brand from US, we have also created own brand Renabio and outsourced (OEM) to a renowned pharmaceutical manufacturer in Taiwan to reduce costs to expand the market, and achieve more effectiveness.
(e)Erythropoietin (EPO): competition is divided between long-term and shortterm EPO, and the Company is presently an agent for Kyowa Kirin longterm product. The comprehensive product line makes it more competitive than the others.
b. Surgical consumables and devices
(a)Outstanding cooperation with Covidien has prompted us to scale the market, and Covidien provides a comprehensive range of surgical consumables ranging from surgical suture, auto suture, endoscopic surgical instruments, energy-based devices, radiofrequency ablation therapeutic devices, bipolar electrosurgical devices (Ligasure), to cordless ultrasonic dissection devices (Sonicision).
(b)Blood bags: we sell Japan’s JMS brand and supply blood bags to blood centers throughout Taiwan and certain biotech companies for storing cord blood, approximately 40% of the market share.
(c)Wound and ostomy: we sell Hollister brand and supply wound and ostomy medical products to surgical patients in various hospitals around Taiwan.
c. Healthcare home appliances products
Launched a new line of ULTRACLEAN “Cubic Air” air purifiers, as well as own-brand products. To strengthen the competitive strength from product diversification, we also sell Japan’s Doshisa ,Recolte, Toffy, and Sweden’s Electrolux.

 Aesthetic medical sector

a. Aesthetic medical devices

Most of Taiwan's aesthetic medical devices are imported from overseas manufacturers. Most of the imports came from leading aesthetic laser brands from Europe and the USA. In recent years certain Korean and Chinese manufactured devices have also been imported to the Taiwan market, aiming lower-middle market segmentation. This situation has led to the end-user treatment price chaos, so we need to enhance consumers’ awareness of brand, quality, legally-imported products, and safety in order to maintain the highquality of Taiwan aesthetic medicial market.

The Group sells advanced machinery mostly that have received FDA approval. Besides selling the highly lauded and market-leading Ulthera HIFU device, the popular Picoway picosecond laser will also launch new handpiece and wavelengths in the second quarter of 2021, thereby injecting new sales drivers for the picosecond laser market. In addition, having received the first medical device (Dyanmis SP laser system) permit with the indication of “light to medium degree stress urinary incontinence” in Taiwan in 2018, its outstanding treatment effect has already built much reputation in the market and has been highly approved of and beloved by various medical centers. Furthermore, the reputable vascular laser "Vbeam" launched a new model

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“Prima” in 2020. Its convenient operation and dual-wavelength features greatly improve the patient’s comfortability during treatment, will drive the vascular laser market in Taiwan and enhance treatment quality.

b. Dermal fillers

Major players in the global dermal filler industry include Allergan, Galderma, and MerzAesthetics, while Taiwan’s major player is SciVision Biotech Inc. (products: hyaluronic acid fillers). In addition, the cosmetic surgery-grade collagen filler produced by Sunmax Biotechnology Co., Ltd., indicating that Taiwan’s R&D capability for certain dermal fillers are on par with international level. In addition, since collagen stimulators (more commonly known as “baby face shots” in Taiwan) are more naturalistic antiaging treatments, they have come to be much loved by end-users in recent years. Products in this category currently launched in the Taiwanese market include Sculptra , Ellanse and AestheFill (products launched in the second quarter of 2020). Currently, the aesthetic dermal filler market is still growing. The Group adopts an integrated marketing strategy for dermal fillers and aesthetic medical devices, thereby expanding the overall market demand and provides more choices for the aesthetic medical market.

In terms of hyaluronic acid fillers, the Group distributes two brands, “Hyadermis” and “Animers”. After dedicating development and operation, the Group’s sales for Hyadermis hyaluronic acid fillers has become an important brand in Taiwan’s aesthetic medical consumables in recent years through its “shaping” and “long lasting” product characteristics. “Animers” is a new geltype hyaluronic acid fillers with the features of “smooth injection feeling” and “soft skin touch”. These two brands are complementary and can help us to provide consumers with various choices.

In terms of collagen generation fillers, the Group distributes “AestheFill” brand. AestheFill is a dermal filler with a new form of stimulation to proliferate from body collagen (known as Sculptra/Ellanse on the market), which can safely and naturally stimulate the regeneration and newborn of body collagen. The biggest difference with hyaluronic acid fillers is that such product characteristics emphasizes natural growth and long-term effect rather than immediate sculpting. It is suitable for consumers who would like to go back to youth naturally and has the characteristic of market differentiation.

 Pharmaceutical sales and distribution and logistics sector

a. Industry competitors

(a)Pharmaceutical sales and promotions

Since there are many different types of medicine, each requiring different sales knowledge and vastly different channels, industry competitors have each sought for different niches. The similarities between different competitors are low, and likelihood of complete substitution is also low. Nevertheless, there are over 10,000 types of NHI-benefit medicine and over 1,000 industry competitors in Taiwan. Competitors are many and each with distinct selling points. There is no market monopoly or oligopoly; therefore, the in-depth knowledge and professionalism in a single department has become a key factor to stand out among competition.

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(b)Pharmaceutical distribution and logistics services

Since the targets of medicine sales are doctors/physicians at hospitals or clinics and pharmacists, the level of professionalism required and the hours of training for its sales reps are much higher than that of general industries. This is because medicine have patents, professionalism, and exclusive channels. Since the Company has long-term, stable professional training program, our employees are highly qualified and cohesive, we have a relatively high competitive edge. In case other companies wish to expand to this industry, besides acquiring distribution/agency from pharmaceutical principals, they will also need to recruit talented and experienced personnel and team. Therefore, this industry is relatively difficult to enter.

b. Potential market entrants

(a)Pharmaceutical sales and promotions

Since the pharmaceutical logistics and warehousing environment and channels experience require extremely high entry barriers, operating an international pharmaceutical management and channel service requires significant capital investments in order to build top-notch information technology facilities and automated equipment, to recruit and train professional personnel, and to continuously provide on-the-job employee training concerning local and foreign laws and quality management. As such, currently, the pharmaceutical logistics channel industry in Taiwan is concentrated and oligopoly exists in the market. In addition, to respond to demands from different medicine suppliers, diverse service systems and characteristics have been devised by different distributors. Substitution is low, and distribution and logistics companies need to form tight partnerships with pharmaceutical principals to be able to provide quality supply chain services.

(b)Pharmaceutical distribution and logistics services

To confirm applicable permits, including the PIC/S GMP GDP from Ministry of Health and Welfare, international ISO certification, and pass audits from a rigorous pharmaceutical principals, pharmaceutical distribution and logistics center needs to build adequate warehousing space for medicine storage and to flexibly adjust in line with market sales. This will allow them to make timely deliveries to the patients in medical institutions, clinics, and pharmacies. Furthermore, pharmaceutical distribution and logistics services also include integrations of participation in tendering processes at hospitals, price negotiation, low-temperature control, clinical and experimental medicine management, restricted medicine management, information flow, cash flow, logistics, and intelligence process flows. Therefore, it is difficult for the general provider to cross over to this industry without sufficient related experiences and economies of scale.

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(3) Technology and R&D overview

 Medical device sector

Though the Company is not a manufacturer, we separately plan R&D strategies based on products with National Health Insurance (NHI) coverage benefits and those without. Fields and businesses that are covered by NHI will plan and adjust future products based on the conditions and status of National Health Insurance Administration’s insurance benefit policy. In terms of the self-pay medical market, we maintain positive interactions with international companies and actively introduce and market the latest medical devices.

 Aesthetic medical sector

Though the Group is not a manufacturer, we do have several educators and product specialists who are dedicated to developing product strategies and providing technical guidance. In addition, operational assistants are also available to help clients to increase the use of consumables and products. In addition, we also actively assist medical institutions to organize professional training courses for laser devices, thereby maintaining positive cooperation with hospitals.

 Pharmaceutical sales and distribution and logistics sector

The major businesses that the Group is focused on sales and promotions of pharmaceuticals and professional pharmaceutical supply chain management services. We are focused on acquiring more agency to new products from principals and achieving innovations in distribution, logistics and warehousing management services and supply chain delivery services. The Group has set up product and business development departments that focus on new medicine developments from pharmaceutical principals, and actively evaluate and compete for distribution as well as the creation of new businesses.

In terms of pharmaceutical logistics management, on top of sending employees to participate in professional courses organized by the government and associations, we also receive on-site audits from international quality management experts and professional consulting advice from principals for multiple times in a year. We are aligned with international pharmaceutical management standards and maintain world-class quality standards. Moreover, we also continuously reform and enhance the service quality and benefits we provide to the principals and medical institutions through new systems, new equipment and new processes devised by inter-departmental service R&D programs.

(4) Short-term and long-term business plans

 Medical device sector

A. Short-term business development

In terms of hemodialysis, we will maintain the existing channels and scales of hemodialysis centers and increase the market shares of relevant devices and consumables. In addition, we will actively pursue for agency of medical products needed by other medical fields to develop diversified product marketing and sales.

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B. Long -term business development

Externally, the Company will integrate medical resources, introduce competitive new products related to medical and health care, increase number of strategic partners, continue to expand medical channels, and to expand to the rest of Asia from our base in Taiwan to solidify a long-term, profitable basis. Internally, we will simplify the organizational structure to reduce various administrative and marketing costs and increase operation performance.

 Aesthetic medical sector

A. Short-term business development

a. AestheFill brand operation

The Group actively expands product portfolio, and has launched AestheFill in the second quarter of 2020. AestheFill is a attractive product of Regen Biotech, Inc. from Korea. It is a dermal filler with a new form of stimulation to proliferate from body collagen (more commonly known as “baby face shots” in Taiwan), which can safely and naturally stimulate the regeneration and newborn of body collagen. AestheFill became sensation upon launch, and won the favor of doctors and consumers. the Group will continue to promote it to keep attention and increase share of voice.

b. Hya-Dermis brand operation

The Group is actively committed to the brand promotions and product sales of Hya-Dermis. By utilizing patented CHAP™ (Cross-linked Hyaluronic Acid Platform), the effects of Hya-Dermis are long-lasting and can support more shapely, contoured features. Since users can select suitable molecule sizes based on their intended injection area, Hya-Dermis has wider applications and offers a wider selection of choices to customers. In particular, the lidocaine-containing hyaluronic acid filler, “LA series”, can effectively enhance the comfort levels of treatment, and the comprehensive lineup can also fully cater to diverse customer needs. Besides continuing to enhance product characteristics to better meet market demands, the Group will also strengthen the marketing to end-users to increase product awareness and treatment adoption.

c. Animers brand operation

Another one of the Group’s newcomers, the locally-produced gel-type hyaluronic acid dermal filler “Animers” was launched in the third quarter of 2020. We are the exclusive agent for Animers in Taiwan. This product targets gel-type hyaluronic acid market, and its specific selling points are silky smooth injection process and soft skin texture. To offer diverse options to customers, we will penetrate the market with this new brand and product features in the future, along with its sister brand, Hya-Dermis. The two aforementioned consumables will serve to expand the Group’s existing product portfolio and customer groups, thereby enhancing our growth.

d. Ulthera brand operation

Ulthera, Inc. has the iconic, revolutionary ultrasound aesthetic device, the Ulthera System. It is currently the latest, most mainstream skin tightening device around the world. Since product launch at the end of 2013, Ulthera System’s performance in skin lifting has received extremely positive feedbacks from both professional users and consumers alike. In addition, the Group has

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launched its new application “SPT (see plan treat)” and “anti-counterfeit” in 2021. Cooperate with integrated marketing, including celebrity endorsements, to promote the sales of treatment consumables.

e. Laser brand operation

The Group currently sells Picoway picosecond laser from Candela Medical in the United States. It is presently the most advanced high-end pigmentation removal device satisfies the aesthetic medical needs of high-end customers with advantages that include enhanced treatment results, minimized side effects and short down time. This device is expected to launch a new upgraded model with new wavelengths and handpieces in Taiwan in the second quarter of 2021, thereby enhancing the picosecond laser market. In addition, to segment the market, the Group’s other laser brand, Fotona, has launched a picosecond sub-pulse laser, Starwalker, that targets a more affordable picosecond laser market.

The reputable vascular laser “Vbeam” launched a new model, “Prima” in the fourth quarter of 2020. Its convenient operations and dual-wavelength features greatly improve the patient’s comfortability during treatment, will drive the vascular laser and rosacea improvement market in Taiwan and enhance treatment quality.

f. DR CYJ brand operation

Non-medical and medical-like hair growth markets represent at least NT$10 billion of business opportunities each year in Taiwan, and grows at 1020% per year. To compete for this NT$10 billion blue ocean hair growth market, the Group and listed biotechnology Korean company Caregen Co., Ltd. (KOSDAQ: 214370) have formed a joint venture of in CYJ International Taiwan Inc., which markets a revolutionary hair growth product, “DR CYJ” and scalp treatment services in online platforms and 12 physical channels. The product has gained enormous success in the women’s hair growth market and significantly boosted its revenues. To provide diverse choices for consumers in their pursuit for beauty, the Group gradually extends treatments and products to skin care, face wash, and hair styling products. Daily beauty and skincare treatments have also been added to physical channels. To make facial and body treatments more comprehensive and to provide superior services to consumers, the Group has also introduced the 10th generation body shaping device from the high-end French brand, LPG.

g. Total solution treatment of body shaping

The Group provides body shaping total solution services for customers through our comprehensive body shaping product lines. Our body sculpture treatment total solution includes “LPG” from France, “Cooltech” cryolipolysis device from Spain and “StarFormer muscle toning device” which is scheduled to be launched in 2021, which applied body sculpture devices with physical measures, cold body sculpting and magnetic stimulation, respectively. These advanced devices make the Group able to provide customers with a total solution of body sculpture covering both inside and outside of the body.

h. Clinical trials and product registration of botulinum toxin in Taiwan

Medytox Taiwan, a joint investment between the Group and Korea’s listed biotech company Medytox Inc. (KOSDAQ: 086900), owns the brand Neuronox (Botulinum Toxin Type A), which has formally submitted a new

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drug registration application to Taiwan Food and Drug Administration in 2018. The registration is still ongoing, and once completed, the product’s high value-for-money is expected to generate much market buzz and to propel business growth.

In summary, the Group’s short-term goals are focused on expanding sales from product portfolio, and will be dedicated to trending aesthetic products and consumables with high growth and high margin in order to increase our profit margin. In addition, the Group will stabilize revenues and achieve business development by actively developing revenues from aesthetic medical consumables and other non-aesthetic medical products. By utilizing our strengths in repairs and maintenance teams, we will also strengthen customer service.

B. Long-term business development
a. Market leader in aesthetic medical products

As a market pioneer, the Group will continue to develop and introduce products that meet the latest and safest aesthetic medical trends to provide a comprehensive range of skin and slimming aesthetic medical products. We will expand our product range and contents to achieve the goal of becoming a leader in aesthetic medical market in Taiwan.

b. One-stop aesthetic treatment provider

The Group is actively developing e-commerce channels. Scalp and skin beauty products are sold through lively and diverse marketing strategies that meet customer needs. In addition, to provide head-to-toe “beauty services” for customers, we will actively integrate resources for beauty treatment services from Excelsior Beauty Clinics and DR CYJ and provide one-stop “beauty” experiences to customers.

In summary, the Group’s long-term development plan is focused on continuing to introduce competitive aesthetic consumables and products with new technologies and trends. We will develop and expand the channels for aesthetic treatment and enhance the Group’s overall competitiveness and professional image in the Asian aesthetic medical market.

 Pharmaceutical sales and distribution and logistics sector

A. Short-term business development Pharmaceutical sales and promotions

a. Prescription drugs

Consolidate existing medicines for internal medicine, family medicine, dermatology, and ophthalmology, such as high blood pressure, anti-infection, anti-allergic, and gastrointestinal medications. Continue to promote psychiatric and central nervous system drugs, such as the promotion of antidepressant, antibipolar and schizophrenia treatments. Expand the self-pay market for influenza antiviral treatment.

b. Non-prescription drugs

Refine operation of non- prescription drugs by expanding product lines at existing channels for hair growth products, scalp care, quit smoking, oral care, analgesics, cold medicine, stomach and antacids, circulation supplement, dermatological treatment and more.

Pharmaceutical distribution and logistics

a. Reinforce the Group own national cold chain and temperature-regulated

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delivery fleet. To ensure the quality and safety of temperature-sensitive products, temperature control and inspection will be conducted from purchasing, storage, packaging, tallying, to delivery to the medical institutions.

b. Besides serving the existing pharmaceutical principals and CDC, the Group will also adopt differentiated strategies to segment the market. Needs from various major hospitals will be aligned with the pharmaceutical principals in order to develop more competitive value chain services. The Company will strive to acquire distribution and logistics services from domestic and foreign pharmaceutical principals and clinical medicine companies.
B. Long-term business development

Pharmaceutical sales and promotions

Besides expanding the product lines to become more well-rounded, we will actively seek for strategic partners and plan to horizontally expand into other related specialist fields. Concurrently, by relying on the long-term development with the Excelsior Group, we will seek agency and development, and channel sales and promotions of related pharmaceutical products. The Group will introduce international high-quality medicine and medical supplies to local niche markets to achieve special synergistic, competitive strengths.

Pharmaceutical distribution and logistics

a. Build and expand high-quality, high-efficiency, and high-satisfaction international-scale temperature-controlled logistics center; sign long-term contracts with pharmaceutical principals and to develop more partners; connect the medical service systems of major hospitals throughout Taiwan to expand the value chain and to provide even more quality services.
b. Continue to invest toward developing automated IT and warehousing management system; maintain leading strengths and service standards by providing customized information and effective delivery; and provide even better information and more satisfying logistics services for pharmaceutical distribution and medical consumables.
c. Form strategic cooperation with local transportation companies to build an integrated logistics service with professional division of work and synergies in business. The Group will mutually expand and optimize the efficiency and quality of distribution and logistics services in Taiwan in order to enhance operational performance.

2. Market and Sales Overview

(1) Market analysis
A. Major products and service regions

Unit: NTD$ thousands

Year Region	2019	2019	2020	2020
	Sales amount	%	Sales amount	%
Domestic Sales	6,106,927	95%	6,351,482	95%
Export	350,435	5%	324,012	5%
Total	6,457,362	100%	6,675,494	100%

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B. Market share

 Medical device sector

a. Below are separate descriptions of the product market shares for sales and marketing of hemodialysis products that the Company sells, which are distributed to hemodialysis centers, hospitals and clinics throughout Taiwan:

Product Category	Product Brands	Market Share
Dialyzer	Asahikasei,FMC,Nikkiso	approximatrly 30%
Blood tubingset	FASFLO,Sunder
A.V. fistula needle	FASFLO
Dialysate	Medivators, CHI SHENG
Transducer Protector	Sunder
Hemodialysis machine	Nikkiso, FMC

b. Below are the market shares for the Company’s operating sites, including department stores and hypermarkets throughout Taiwan and online shopping:

Product Category	Product Brands	Market Share
Home air purifiers	Fasflo ULTRACLEAN and agencybrand	5%
DOSHISHA	Agencybrand	25%
Electrolux	Distribution brand	40%

c. Pursuant to request from Taiwan Blood Services Foundation, blood bags are in special specifications, and we represent JMS brand with the following market share:

share:
Product Category	Product Brands	Market Share
Blood bags	JMS	approximatrly 40%

d. The major products from the range of surgical consumables that the Company sells on behalf of Covidien are auto suture and energy-based devices. Currently, nearly all medical institutions with operating rooms in Taiwan are our customers, approximately accounts for 60% of the surgical consumables sales. The following table shows the Company’s market shares:

Product Category	Product Brands	Market Share
Auto suture and energy-based devices	Covidien	approximatrly 60%

 Aesthetic medical sector

Major operating revenues of the Group come from agency and distribution of aesthetic medical devices, and from providing maintenance services of such aesthetic medical devices. The Group also sells aesthetic consumables and spare parts of aesthetic medical devices, dermal filler and cosmeceuticals. Presently,

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peer information on industry competitors and production and sales information on similar industries in Taiwan does not exist. In addition, most of the Group's sales are within Asia, hence, according to the statistical data on the average Asian aesthetic medical market at approximately US$2.7 billion from Medical Insight Inc., we have estimated that the Group's market share in Asia in 2020 was approximately 1.2%.

 Pharmaceutical sales and distribution and logistics sector

Currently, we serve customers throughout Taiwan and the outlying islands including Penghu, Kinmen, and Mazu. Our customers include medical centers, regional hospitals, local hospitals, clinics, pharmacies, and hypermarkets. Based on data from IQVIA, in terms of promotions for specialized areas, the Group owns the No. 1 market share in marketing and promotions for specialized divisions such as erectile dysfunction, while our hair growth and quit smoking products have also achieved market leadership positions.

C. Future supply and demand of the market and its potential

 Medical device sector

a. Medical device market

In perspective of supply, major production regions for medical devices worldwide include America, Europe, and East Asia. In terms of country, the United States, Japan, and Germany are the key players in global medical devices industry. Since the aforementioned three countries have been developing this industry for many years and both scaled their businesses as well as continue to invest in R&D in each year to innovate products to satisfy the latest medical needs, as well as having achieved various product patents and certifications around the world, they can maintain their market leader positions in terms of supply in the precision medical devices market.

As for demand, most of the need for medical devices come from developed countries, and there is a high positive correlation between the medical and healthcare needs and income. As the economy grows, gross domestic product (GDP) increases and social medical insurance becomes more comprehensive, the percentage of medical expense on the national income also increases accordingly. Therefore, developed countries would have the highest need for healthcare.

The Industrial Economics & Knowledge Center (IEK) from the Industrial Technology Research Institute (ITRI) has also indicated in its research report on healthcare industry development that, as we approach an aging society, the need to care for patients with chronic illnesses and related medical expenses will increase year-by-year. The global populations of individuals aged 65+ will reach a peak between 2011 to 2029, and this will rapidly change the structure of the population pyramid, leading the percentage of overall medical and health expenditure on the GDP to grow in each year.

As the baby boom population, born after the World War II, begin to face the loss of physiological functions and require caring in the form of medical resources, and human lifespan is prolonged from the advancement of modern technology, thereby leading to substantial needs for medical devices and

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related healthcare products, the medical device industry is expected to show robust growth in line with aging societies and the gradual awareness for health around the world. b. Taiwan’s hemodialysis market

In terms of supply, according to the Total hemodialysis Out-Patient Professional Medical Service Quality Report from the National Health Insurance Administration and Taiwan Society of Nephrology, in the fourth quarter of 2020, there were 701 medical institutions that provided hemodialysis treatment, in which 303 were located in northern Taiwan, 202 in southern Taiwan, and 196 in central Taiwan. In terms of the scale of medical institutions, 21 of which were medical centers, 68 were regional hospitals, 172 were district hospitals, and 440 were primary clinics. As a whole, hemodialysis treatment at medical institutions in Taiwan shows a steady upward trend.

From a demand perspective, research data from IEK indicates that the number of Taiwanese hemodialysis patients will grow by 3 to 5% annually. In addition, securities researcher report also indicates that due to factors that include the drug use habits in the Taiwanese population, Taiwan has the world’s highest ratio of hemodialysis patients as well as the highest annual increase. Coupled with the aging society, it is expected that the number of hemodialysis patients will continue to grow at a compound annual rate of 2% to 3% in recent years. Thanks to the implementation of the National Health Insurance system, medical expenses for hemodialysis treatment for end-stage renal failure patients have largely decreased, and such patients can have access to long-term treatment. As the technology and quality of hemodialysis both continue to mature and the patients’ survival rates continue to grow accordingly; combined with the understanding and emphasis of the public for end-stage renal failure and how patients’ lives can be extended through hemodialysis technology, the number of patients have also grown in each year. Statistical data from the National Kidney Foundation R.O.C. indicates that, as the fourth quarter of 2020, there are as many as 92,000 hemodialysis patients in Taiwan. The annual growth rate of hemodialysis patients in the past five years has been approximately 2%, showing that the number of hemodialysis patients in Taiwan continues to show steady annual growth.

 Aesthetic medical sector

As for supply, most of the aesthetic medical devices and dermal fillers in Taiwan are mostly imported from Europe and the United States. In terms of demand, the market demand for aesthetic laser is highly positively correlated with income. The aforementioned demand can be classified as aesthetic medical treatments primed for anti-ageing from a more senior population, and those in pursuit of facial contour. In 2020, COVID-19 epidemic impact global aesthetic supply chain in terms of aesthetic devices supply and end-use treatment volume. According to Medical Insight’s 2020 global aesthetic market study, total sales of professional aesthetic products approached $12.4 billion in 2019. Through 2024, they will expand by 5.7% per year to $16.3 billion. In particular, body shaping/skin tightening, Botulinum toxin injectables, dermal fillers and gynecological rejuvenation aesthetic lasers have become growth drivers in the

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market.

Asia’s aesthetic medical market is expected to grow by 10% year-on-year between 2019 to 2023. Although COVID-19 epidemic impact global aesthetic medical market in 2020, Asian market is currently the most promising, and is growing faster than that of North America and Europe.

 Pharmaceutical sales and distribution and logistics sector

a. Pharmaceutical sales and promotions
(a)Estimates based on data from IQVIA have indicated that, the CAGR of pharmaceutical market in Taiwan can be maintained at steady 3-5%. Moreover, since Taiwan has reached an aging society and citizens’ average life expectancy can reach 80 years old, medicine use for chronic illnesses will gradually increase, making the pharmaceutical market in Taiwan a steadily growing market.
(b)Since the approval and launch of new medicine from major international pharmaceutical principals are often slow, coupled with patents from numerous best-selling medicine expiring, it has become necessary for many international principals to cut down on HR costs and operating expenses to effectively control costs in dealing with price competitions from generic drugs. Furthermore, as the expenditure of NHI medicine are reduced, many of the international pharmaceutical principals that operate in Taiwan are choosing to outsource their sales and promotions in the future. The possibility of collaborating with specialized channel distributors with high coverage is also increasing accordingly. In other words, having a specialized, long-term operated professional team is the critical factor to achieving specialized treatment fields. Besides creating the maximum value and benefits in the industry, it also makes the Group the most competitive, unique, and difficult to imitate or replace.
b. Pharmaceutical distribution and logistics
(a)Drastic changes in business models of pharmaceutical principals; increasingly reliant on outsourcing
- Since the approval and launch of new medicine from major
- international pharmaceutical principals are often slow, coupled with patents from numerous best-selling medicine expiring, it has become necessary for many international principals to cut down on costs in dealing with price competitions from generic drugs. In addition, under Taiwan’s National Health Insurance system, the National Health Insurance Administration has come to dramatically reduce medicine expenditure every other year, leading major foreign pharmaceutical principals to continuously dispose of their production facilities and warehouse in Taiwan. The principals have come to utilize external resources and strengths by outsourcing both pharmaceutical storage and management and delivery to large-scale professional logistics and distributors to significantly reduce their own operating costs and to enjoy quality services under a professional division of work system. Having established a trend of outsourcing distribution and logistics management, the multinational pharmaceutical principals can better focus on their core competences. Their reliance on distribution and logistics companies capable of accepting and

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integrating logistics and distribution services and have mapped out comprehensive, high-coverage channels, will only continue to grow. Providers capable of meeting compliant standards will also become more concentrated.

(b) Sustainable development of the National Health Insurance system

To promote the sustainable development of the NHI system, besides amending relevant benefits system, the National Health Insurance Administration has also reduced the expenditure of NHI medicine and materials/supplies. This has already impacted the revenues of medical institutions, and to reduce operating costs and enhance service quality, more and more hospitals have opted to outsource non-core businesses. Following this trend, hospitals will have even higher demands and form more partnerships with providers capable of integrating the pharmaceutical supply chain.

D. Competitive niches, favorable and unfavorable factors for future development and countermeasures
a.Competitive niche

 Medical device sector

Through establishing a comprehensive channel system using healthcare management model and building positive, symbiotic relations with both domestic and foreign medical manufacturers, the Company can solidify its position between the demand side and the supply chain and is in a better position to acquire quality products at lower price. As a whole, the Company has a more competitive niche over the other industry competitors.

 Aesthetic medical sector

Having built mutual-beneficial relations with both domestic and foreign aesthetic medical suppliers for many years, the Group has a firm presence in the supply and demand chains. Since we provide many products and services, including aesthetic medical devices, dermal fillers, aesthetic consumables, hair growth products, and repairs and maintenance of aesthetic medical devices, we can provide more diverse and competitive products and services to customers.

All engineers in our excellent repair and maintenance team have received equipment repairs and maintenance training from both principals and the Group. In addition, the Group has a complete range of parts and components, and all service calls can be completed within 48 hours. On top of positive reviews from customers regarding our quality and speed of repair/maintenance, we have also cooperated many accolades from the principals.

Equipped with a marketing and education/training team, most of our training concerns specifications and operation, advertising and promotions. We also organize various education and training courses for beauty consultants and nurses, and collaborate with the principals to instruct doctors to use aesthetic medical devices. In addition, we also partner with major medical centers throughout Taiwan to train doctors’ professional skills in laser treatment.

All in all, the Group’s core abilities lie in leading market trends, enhancing

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marketing services, providing quick repair/maintenance services, and sparing no effort in operational consultation. We provide continuous service to support customers’ market competitiveness, and have a better competitive edge over our industry competitors.

 Pharmaceutical sales and distribution and logistics sector

(a)Strong pharmaceutical sales network

The Group’s pharmaceutical sales network is extensive in both breadth and depth. Our customers include medical institutions of varying hierarchy, clinics, chain drugstores, single-store pharmacies, and hypermarkets (currently, we have nearly 10,000 customers and cover almost 12,000 sites), enabling us to provide strong channel coverage and specialized promotional teams of international service standards for principals.

To maintain competitive strength and quality customer service, all members of the sales team use the latest technological tools (e.g. tablet computers and cloud-based sales management system). Besides comprehensively providing real-time marketing information, the customer relations management (CRM) system also provides real-time updates on professional knowledge including international medical conferences, clinical reports, product information, and new medical knowledge to doctors and pharmacists, thereby enhancing our service speed and efficiency.

(b)High barriers to entry in professional fields

The Group has been deeply involved in the treatment of erectile dysfunction in family medicine and urology for many years. Due to the professional and experienced sales capabilities of the management team, this core expertise is not easy for competitors to copy, and they have maintained a leading the way for many years. Coupled with the reinforcement of peripheral products, the products are more complete and competitive.

(c)The Group’s highly integrated medical channel operations help to create synergies
Having years of experience in marketing and sales, our Marketing and Sales team works closely with various departments, including New Product Development, verification and Registration, Customer Service, Tender, Channel Development, Legal Compliance, and IT. We also actively participate in medical conferences in each year to understand the latest pharmaceutical development and seize new trends and opportunities in product development. In addition, by utilizing the Excelsior Group’s strong resources in Taiwan’s medical market, our expansions into various medical channels in Taiwan have been very competitive.
(d)High customer satisfaction

Having achieved high customer satisfaction over the years, our market shares have often trumped products in the same categories, which helped us to win positive recognition from the pharmaceutical principals. In addition, to give back to the community, we also strove to provide healthcare education to communities as well as continuing education for medical professionals, winning many praises from National Pharmacist Pharmacy.

(e)Service quality meets international standards Partners of the Group are all renowned major international

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pharmaceutical principals. Due to their rigorous requirements for pharmaceutical storage and delivery, audits from international quality management experts would be carried out by the pharmaceutical principals in each year. Relevant evaluation on service performance is also conducted. Our service performance and audit results have both satisfied our partners, indicating that besides meeting local service requirements, our service quality are also on a par with international standards.

b.Favorable factors affecting the Group’s development prospects

(a) Government actively supporting biotech industry, and medical industry has a favorable prospect

The “Three-Year Spring Plan of the Economy Development Vision 2015,” approved by the Executive Yuan in 2006, has listed the biotechnology industry as a “key development manufacturing industry”. The “Biotech and New Pharmaceutical Development Act,” announced in 2007, encourages private investment in an effort to focus on developing the biotech industry. It is expected to drive economic transformation in the future. Fundamentally speaking, the government’s proactive attitude will help to develop industries related to medical and healthcare.

(b) Increases in GDP, changes in lifestyle, and the aging society

In recent years, the national GDP in Taiwan has continuously increased in line with economic growth. The public is increasingly focused on healthcare, leading to significant increase in the demand for medical devices and products from related healthcare businesses. Statistical data from the Ministry of the Interior, Executive Yuan has indicated that, as of December 31, 2020, 3.78 million of Taiwan’s population was aged 65 or more. This new historical record accounts for 16% of the total population. It can be anticipated that the increasing severity of the aging population issue in Taiwan will expand the demand for domestic and foreign medical products, leading to even better development opportunities for healthcare related industries.

After going through public issuance processes, the Company and the Group are now aligned with the capital market and our shares are now either listed on the TWSE or the TPEx. These efforts indicate our operation efforts are obvious, and that our shareholding structure is robust. With sound management and indications of industry value, we can further cultivate the medical business in the future.

(d) Effective resource integration

The Company’s management philosophy is to build a comprehensive healthcare holding enterprise, and we are in substance an integrated channel distributors. Hence, the Company has adopted diverse agency means to acquire distribution rights of quality products through investments, and in line with diverse marketing and management and consulting services provided to medical institutions, we have extended our core business and cultivated the market channels, allowing us to effectively provide comprehensive services to our customers. In the future, we will guide highquality medical services around the world to enter multinational markets.

(e) Talent employee development, better benefits system, and building strong employee cohesion

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On top of continuously building our market competitiveness, we also strive toward developing talent employee. Through diverse training methods including new employee training, professional skills training, management skills training, and team-building, we have developed employees’ professional skills, leadership skills, innovative thinking, and management capabilities. Furthermore, to reward employees and to build teamwork, we also regularly organize activities such as annual employee travels and Excelsior Family Day to show teamwork among employees and to foster employee cohesion c.Unfavorable factors affecting the Group’s development prospects

(a) Risk of exchange rate fluctuations

The foreign exchange market experienced dramatic fluctuations in line with global economic changes in 2020. The Company is in an industry with foreign exchange needs, and holds different currencies due to different procurement sources. Therefore, we hold an appropriate portfolio of foreign exchange to seek for the greatest hedging possibility. Relevant countermeasures are as follows:

i. Purchase forward foreign exchange based on business needs.
ii. Building consensus with suppliers to mutually share foreign exchange risks; in case the fluctuation in foreign exchange increases, we will renegotiate product prices with suppliers, or to transact with the contracted, fixed exchange rate.
iii.Adding price differentials due to foreign exchange into the price quotation system to protect the Company’s interest.
iv.The finance department will adjust foreign exchange positions based on fluctuations in foreign exchange.
v. The hedging of foreign currencies are alternatives to one another, and can be procured using Euros, USD, and JPY, the Company will adjust our procurement portfolio based on their relations to NTD.
(b) High product concentration and reliance

Currently, the medical market in Taiwan mostly relies on imports, and we sign distribution contracts with overseas suppliers. In case changes to agency/distributor rights occur, the Company’s operations will be affected. Countermeasures to which are as follow:

i. Win over overseas quality suppliers through our sales performance, and to form a buyer’s market through our solid channel strengths, so that overseas suppliers will not easily consider changing distributors from a revenue perspective.
ii. Form cooperation with upstream suppliers to jointly operate and expand the market through profit-sharing.
iii.Co-host academic courses with foreign manufacturers, conduct clinical research with medical centers, and establish an Asia-Pacific Teaching Center so that manufacturers will be more reliant on the Company and would need to assist us to develop regional markets.
(c) NHI adopts global budget payment system and shrinks profitability from the medical industry

Though financial challenges for the National Health Insurance Administration were somewhat alleviated due to supplementary premium, but the medical institutions are still faced with pressures related to point

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values for NHI benefits, leading to unstable revenues in each specialization. This practice will impact the medical industries in Taiwan, and relevant countermeasures are listed as follows:

     - i. Reduce the ratio of NHI benefit products and introduce self-pay products such as healthcare home appliances and long-term care.

     - ii. Practice market segmentation through providing more luxurious and professional self-pay aesthetic medical services, and to expand the market to other overseas Chinese markets.

     - iii.In response to expected patent expiration of pharmaceutical products, on top of searching for new items to strengthen our product portfolio, by relying on our unique specialization marketing, we can also effectively, vertically integrate the resources from specialized products from upstream pharmaceutical principals with the demand from downstream end-users. This will also help the Group to practice effective cost control.

(2) Important uses of the main products and the production process
A. Major products in the medical industry include hemodialysis, healthcare home appliances, medical devices, blood bags, wound and ostomy and surgical consumables. Below are descriptions of their important uses:
- a. Hemodialysis products: a kidney disease patient cannot filter water and unwanted nitrogen, creatinine, and uric acide from the human body. By using the hemodialysis machine and dialyzer to filter blood, the patient can regain short-term physical functions.
- b. Healthcare home appliances: used to improve the air quality in the day-to-day lives.
- c. Blood bags: used to store blood.
- d. Wound and Ostomy: after gastrectomy, patients use ostomy in place of the anus or urethra in excrement.
- e. Surgical consumables and products: medical devices and consumables used on patients in surgeries.
B. Major products from aesthetic medical industry are energy-based aesthetic devices and consumables, which can convey beauty to the users once operated by professional doctors, so that users can achieve physical and mental well-being.
C. Major products from pharmaceutical sales, distribution and logistics industry are sales and promotions of prescription drugs, non-prescription drugs, and healthcare consumer products, which are coordinated with customer service, tender processes, information, cash flow, and warehousing and inventory logistics, thereby constructing a well-rounded supply chain integration service.
D. The Company and the Group are not manufacturers, and do not have production line processes.
(3) Supply of key material

Neither the company nor the group is a manufacturer, so it is not applicable.

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(4) Customers that accounted for more than 10% of the total sales in any of the last two years

A. Major customers’ information

Unit: NT$ thousands

	2019	2019	2019	2019		2020	2020		As of March	As of March	31,2021	31,2021	Description of Changes in the Last Two Years
Item	Name	Amount	Percent age of Net Sales (%)	Relations hip with Issuer	Name	Amount	Percent age of Net Sales (%)	Relationshi p with Issuer	Name	Amount	Percentag e of Net Sales (%)	Relations hip with Issuer
1	Bestchain Healthtaiwan Co.,Ltd.	1,596,110	28	Associate	Bestchain Healthtaiwan Co.,Ltd.	1,789,712	30	Associate	Bestchain Healthtaiwan Co.,Ltd.	467,388	33	Associate	`－`
2	Excelsior Renal Service Co.,Limited	726,854	13	Associate	Excelsior Renal Service Co.,Limited	762,596	13	Associate	Excelsior Renal Service Co.,Limited	186,647	13	Associate	`－`
	Othes	3,405,216	59		Othes	3,386,432	57		Othes	760,631	54
	Net Sales	5,728,180	100		Net Sales	5,938,740	100		Net Sales	1,414,666	100

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B. Major suppliers’ information

Unit: NT$ thousands

	2019	2019	2019	2019		2020	2020		As of March	As of March	31, 2021	31, 2021	Description of Changes in the Last Two Years
Item	Name	Amount	Percent age of Net purchas es(%)	Relationsh ip with Issuer	Name	Amount	Percent age of Net purchas es(%)	Relationshi p with Issuer	Name	Amount	Percentag e of Net purchases (%)	Relations hip with Issuer
1	MEDTRONIC (TAIWAN) LTD.	1,361,792	29	None	MEDTRONIC (TAIWAN) LTD.	1,493,651	30	None	MEDTRONIC (TAIWAN) LTD.	397,816	34	None	`－`
2	PFIZER LIMITED	604,838	13	None	PFIZER LIMITED	711,502	14	None	`－`	`－`	`－`	`－`	`－`
	Othes	2,769,244	58		Othes	2,738,540	56		Othes	787,506	66
	Net purchases	4,735,874	100		Net purchases	4,943,693	100		Net purchases	1,185,322	100

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(5) Production volume and value in the last two years: Not applicable.
(6) Sales volume and value in the last two years

Sales volume and value in the last two years	Sales volume and value in the last two years	Sales volume and value in the last two years	Sales volume and value in the last two years	Sales volume and value in the last two years
					Unit: NT$ thousands
Year	2019				2020
Sales Volume and Value Major Products	Domestic Sales		Exports		Domestic Sales		Exports
	Volume	Value	Volume	Value	Volume	Value	Volume	Value
Surgical consumables	2,093,190	1,440,607	0	0	2,379,034	1,475,340	0	0
Dialyzers, blood tubing set and A.V. fistula needles	10,819,385	1,055,715	605,720	45,566	11,207,111	1,068,129	198,836	10,171
Medicine	2,802,587	945,327	0	0	2,819,781	1,108,050	2,053	283
Erythropoietin (EPO), concentrated solution and powders	4,585,156	761,614	732,536	95,735	4,328,042	753,510	1,006,219	131,399
Aesthetic consumables and spareparts		472,355		79,055		510,179		54,982
Aesthetic medical devices	173	397,767	118	37,335	121	217,954	42	17,005
Home appliances	38,707	106,011	0	0	37,652	119,381	0	0
Medical devices	1,659	77,588	0	0	1,054	105,878	68	19,609
Blood bags ,wound and ostomy product	269,742	49,855	0	0	589,363	178,281	0	0
Others		800,088		92,744		814,780		90,563
Total	20,610,599	6,106,927	1,338,374	350,435	21,362,158	6,351,482	1,207,218	324,012

3. Employees

(1)The following table summarizes the company’s workforce as of the printing date of the annual report

the annual report	the annual report
Year Number of employees Manager level and above Staff level		2019	2020	As of March 31, 2021
	Manager level and above	74	93	92
	Staff level	530	664	670
Total		604	757	762
Average age		44.05	35.48	36.78
Averageyears of service		7.82	6.91	7.05
Education background	Ph.D	0.33%	0.26%	0.13%
	Master’s	5.63%	4.49%	4.33%
	Bachelors Degree	80.13%	76.75%	77.43%
	Senior High School	13.25%	11.76%	12.20%
	Below Senior High School	0.66%	6.74%	5.91%

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(2)Certification of employees whose jobs are related to the release of the company’s financial information

Certified Internal Auditor (CIA) ： 1 person.

4. Disbursements for Environmental Protection

Total losses (including damage awards) and fines for environmental pollution during the most recent years and up to the date of publication of the Annual Report, and the measures (including corrective measures) and possible expenditures to be made in the future: None.

Relevant information in response to the EU Restriction of Hazardous Substances (RoHS): Not applicable.

5. Labor Relations

(1)Employees’ welfare policies, continuing education, training, retirement system and its implementation, as well as employment negotiations, and employees’ rights and interests
A. Company benefits and measures
a.Labor insurance: carried out in accordance with regulations from the Labor Standards Act.
b.National health insurance (NHI): carried out in accordance with regulations from the National health Insurance Act.
c.Group insurance: The Company covers full group insurance, which includes employees' regular life insurance, accident insurance, hospital medical insurance and occupational injury insurance.
d.Employee health examination: To ensure the health and safety of our employees, the Company regularly organizes free health checkup in every year to assist employees to understand the subtle changes in their bodies.
e.Employee compensations: Pursuant to the Company’s Articles of Incorporation, in case profits are made in a year, the Board of Directors will propose no less than 1 percent of the profits as compensations for employees. The compensations will be approved by the Board of Directors meeting and submitted to the Shareholders' Meeting.
f.Year-end bonus: To be appropriated based on the Company’s operational performance of the year. The bonus will be appropriated before Lunar New Year and calculated based on the period of an employee's employment with the Company. Targets of bonus will be current employees at the time of distribution.
g.Employee benefits system and status (using the Company as an example)
- (a)1% was appropriated from the Company's total capital when it was founded. (b)0.075% is appropriated from the Company's total monthly operating revenue. (c)0.5% is appropriated from the monthly pay of each employee.
- (d)Benefits are used toward: benefits and subsidies (marriage, childbirth, employee’s birthday, funeral/disease subsidies, and emergency relief and more), activities (employee travels, birthday parties, club activities, and arts and cultural activities etc.), other benefits such as Dragon Boat Festival, MidAutumn Festival, and year-end party and more.
B. Continuing education and training
a. New recruits
- (a)The HR Office will walk the new recruits through work rules, provide a

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company overview, and introduce them to the office environment and acquaint them with coworkers on their first day at the Company.

  - (b)New employee training courses are regularly held by the HR Office, and the courses include: an introduction to the Company's organization and departments/responsibilities, various internal management procedures, Employee Welfare Committee, IT system, network environment, and NOTES system.

b. On-the-job training: annual training budget is prepared for all employees, and on-the-job training is coordinated by the HR Office on a quarterly basis.
c. Professional training: 1 or 2 sessions of professional training for Company products are provided by product manufacturers in each year.
d. The Group organizes “teaching by experience” internal training via the HR Office on a monthly basis. In addition, the Group also provides additional continuing studies courses to employees based on business needs
C. Retirement system and measures

Retirement system and measures: pursuant to regulations from the Labor Standards Act, 2% is appropriated from the total wage of employees applicable for the pension scheme on a monthly basis, and deposited at dedicated accounts at CTC pursuant to legal regulations. Starting from July 1, 2005, retirement system is implemented in compliance with applicable regulations from the Labor Pension Act.

D. Employment negotiations

We have always persisted in a mission to care for our employees. We adopt bilateral communications for policy advocacy, employee opinion and employee coaching, and we also regularly organize employment meeting as a channel of bilateral communications. This helps the Company to achieve mutual cooperation, quality improvements, employee competency enhancements, employment conditions improvements, as well as to protect employees’ rights and interests, enhance employees’ benefits, to look after their daily lives, and to assist the government to implement policies.

E. Measures for protecting employees’ rights

On top of establishing the legally stipulated Employee Welfare Committee and Supervisory Committee of Labor Retirement Reserve to coordinate employee benefits and the planning, appropriations, safekeeping, usage, and related legal standards related to pension reserve as well as to serve as channels of communication with the Company, all measures to protect and implement employees' rights and benefits are carried out pursuant to legal standards.

F. Employee code of conduct or ethics

The Company has formulated Employee Work Rules and Information Technology Security Policy as the basis for compliance during employees' day-today work and conduct. Employees shall abide by the following Ethical Corporate Management Best Practice Principles:

a.When engaging in commercial activities, employees shall not directly or indirectly offer, promise to offer, request or accept any improper benefits, including rebates, commissions, facilitation fees, or otherwise offer or accept improper benefits to or from customers, agents, contractors, suppliers, public

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servants, or other stakeholders. However, this is not limited to actions that comply with local regulations.

  - b.When making or offering donations and sponsorship, employees shall comply with relevant laws and regulations and internal operational procedures and shall not surreptitiously engage in bribery.

  - c.When directly or indirectly offering a donation to political parties or organizations or individuals participating in political activities, employees shall comply with the Political Donations Act and the Company's own relevant internal operational procedures, and shall not make such donations in exchange for commercial gains or business advantages.

  - d.Employees shall not directly or indirectly offer or accept any unreasonable presents, hospitality or other improper benefits to establish business relationship or influence commercial transactions.

G. Protective measures of employees’ work environment and employee safety, and implementations
To fulfill corporate social responsibility and to protect the safety of our employees, and seeking the provision of a safe, healthy, and comfortable work environment as our goal, the Company is fully committed to advocating for occupational safety and health policy to foster a positive awareness in our employees and to maintain their physical and mental health.

The following relevant measures have been implemented:

a.Strengthen occupational training to reduce potential workplace hazards and decrease occurrences of occupational hazards.
b.File labor insurance, national health insurance, and group insurance for employees and to establish an Employee Welfare Committee. Organize employee health checkup in every year
c.Participate in annual advocacy for fire drill practice organized by the Company’s office building committee to implement various disaster prevention and contingency responses.
d.Impose strict access control to ensure the personal safety of staff.
(2) Losses arising from labor disputes in the most recent year up to the publication date of this Annual Report and disclosure of potential current and future losses and countermeasures therefrom: None.

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6. Important Contracts

All important contracts that could affect shareholder rights as of the date of printing of the annual report, including supply and sales contracts, technical cooperation contracts, engineering contracts, long-term loan contracts and others. (1) The Company

Nature of contract	Counter party	Terms of contract	Content	Restrictive clauses
Procurement and agency / distribution contract	AA Company	2021/01/01~2021/12/31	Hemodialysis machine	None
Procurement and agency / distribution contract	AB Company	2019/11/01~2022/10/31	Hemodialysis and disinfectant solution	Restricted to sales in Taiwan
Procurement and agency / distribution contract	AC Company	2020/04/01~2025/03/31	Licensed distribution of dialyzers	Restricted to sales in Taiwan
Procurement and agency / distribution contract	AD Company	2020/10/01~2022/09/30	Agency for long-lasting Erythropoietin (EPO)	Restricted to sales in channels from hemodialysis clinics (with exception of package sales in hospitals)
Procurement and agency / distribution contract	AE Company	2020/10/01~2022/09/30	Cinacalcet	Restricted to sales in channels from hemodialysis clinics (with exception of package sales in hospitals)
Procurement and agency / distribution contract	AF Company	2020/01/01~2022/12/31	Hemodialysis blood tubing set and A.V. fistula needles	Restricted to sales in Taiwan
Procurement and agency / distribution contract	AG Company	2020/01/01~2022/12/31	Blood bags	Exclusive distribution in Taiwan
Procurement and agency / distribution contract	AH Company	2019/02/01-2019/12/31 (Contract negotiation)	Dialyzers, hemodialysis machine and hemodialysis consumables	Distribution channel limited to hemodialysis centers within ERS collaborative management
Procurement and agency / distribution contract	AI Company	2021/05/01~2022/04/30	Surgical device and consumables	None
Agency /Distribution contract	AJ Company	2016/01/01~2023/12/31	Hemodialysis blood tubing set	Exclusive distribution in Taiwan
Commissioned manufacturing Contract	AK Company	2015/01/01~2024/12/31	Production of hemodialysis concentrated solution	Including warehousing and logistics
Supply Agreements	AL Company	2021/01/01~2021/12/31	Blood bag distribution contract	None
Supply Agreements	AM Company	2019/02/01~2019/12/31 (Contract negotiation)	Dialyzers, hemodialysis machine and hemodialysis consumables	Restricted to sales in Taiwan
Supply Agreements	AN Company	2019/01/01~2021/06/30	Long- lasting Erythropoietin (EPO)	None
Package contract	AO Company	2017/07/01~2021/06/30	Hemodialysis consumables and device	None
Package contract	AP Company	2017/01/01~2022/12/31	Hemodialysis consumables and device	None
Package contract	AQ Company	2019/03/01~2025/02/28	Hemodialysis consumables and device	None
Package contract	AR Company	2020/12/01~2023/11/30	Hemodialysis consumables and device	None

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Nature of contract	Counter party	Terms of contract	Content	Restrictive clauses
Lease contract	AS Company	2018/01/01~2022/12/31	Lease for hemodialysis device	None
Joint venture contract	AT Company	2007/01	Establish joint venture in Hong Kong	Counterparty has the right to acquire all shares of the joint venture company of Jiate Excelsior Co., Ltd. and ERS, and the transaction price will be separately negotiated by both parties.

(2) Dynamic

~~Nature of~~ contract	~~Counter~~
		Terms of contract	Content	Restrictive clauses
	party

Procurement and agency / distribution contract	BA Company	June 19, 2018; contract shall continue in effect unless breach of contract or the contract has been terminated by either one of theparties.	Aesthetic medical device	Restricted to sales in Taiwan
Procurement and agency / distribution contract	BB Company	March 27, 2020; contract shall continue in effect until it has been terminated by either one of theparties.	Aesthetic medical device	Restricted to sales in Taiwan
Procurement and agency / distribution contract	BC Company	2020/01/01~2022/12/31	Aesthetic medical device	Restricted to sales in Taiwan
Procurement and agency / distribution contract	BD Company	January 4, 2007; contract shall continue in effect until it has been terminated by either one of the parties.	Aesthetic medical device	Restricted to sales in Taiwan
Procurement and agency / distribution contract	BE Company	2019/01/01~2021/12/31	Aesthetic medical device	Restricted to sales in Taiwan
Procurement and agency / distribution contract	BF Company	2016/02/28~2021/04/30 (Contract negotiation)	Aesthetic medical device	Restricted to sales in Taiwan
Procurement and agency / distribution contract	BG Company	2016/12/12~2026/12/11	Skin Care Products	Restricted to sales in Taiwan
Procurement and agency / distribution contract	BH Company	2017/04/10~2021/12/13	Aesthetic medical device	Restricted to sales in Taiwan
Procurement and agency / distribution contract	BI Company	2018/01/03~2020/12/31 (Contract negotiation)	Aesthetic medical device	Restricted to sales in Taiwan
Procurement and agency / distribution contract	BJ Company	2017/05/15~2022/05/14	Aesthetic medical device	Restricted to sales in China ,Macao and Hong Kong
Procurement and agency / distribution contract	BK Company	March 1, 2018; contract shall continue in effect until it has been terminated by either one of theparties.	Aesthetic medical device	Restricted to sales in Taiwan

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~~Nature of~~ contract Procurement and agency / distribution contract	~~Counter~~
		Terms of contract	Content	Restrictive clauses
	party

	BL Company	2020/08/01~2025/07/24	Distribution of dermal fillers	Restricted to sales in Philippines
Procurement and agency / distribution contract	SciVision Biotech Inc.	2018/11/01~2021/10/31	Distribution of dermal fillers	Restricted to sales in Taiwan
Procurement and agency / distribution contract	BM Company	2019/09/16~2024/09/15	Distribution of dermal fillers	Restricted to sales in Taiwan
Lease contract	Excelsior Asset Manageme nt Co.,Ltd.	2021/01~2030/12	Lease for Zhonghe office	None

(3) Arich

(3) Arich
Nature of contract	Counter party	Terms of contract	Content	Restrictive clauses
Distribution and Logistis agreement	CA Company	2020/12~2023/11	Distribution and logistics services of pharmaceutical products	Restricted to sales in Taiwan
Distribution and Logistis agreement	CB Company	2020/12~2023/11	Distribution and logistics services of pharmaceutical products	Restricted to sales in Taiwan
Distribution and Logistis agreement	CC Company	2020/12~2023/11	Distribution and logistics services of pharmaceutical products	Restricted to sales in Taiwan
Distribution and Logistis agreement	CD Company	2014/07~2021/06	Distribution and logistics services of pharmaceutical products	Restricted to sales in Taiwan
Distribution and Logistis agreement	CE Company	2021/01~2022/12	Distribution and logistics services of medical equipment and consumables	Restricted to sales in Taiwan
Distribution and Logistis agreement	CF Company	2021/01~2023/12	Distribution and logistics services of pharmaceutical products	Restricted to sales in Taiwan
Sales and Promotion agreement	CC Company	2017/06~2021/12	Sales and promotion services of pharmaceutical products	Restricted to sales in Taiwan
Sales and Promotion agreement	CG Company	2017/06~2021/12	Sales and promotion services of pharmaceutical products	Restricted to sales in Taiwan
Sales and Promotion agreement	CH Company	2012/01~2022/03	Sales and promotion services of pharmaceutical products	Restricted to sales in Taiwan
Sales and Promotion agreement	CI Company	2021/01~2021/12	Sales and promotion services of pharmaceutical products	Restricted to sales in Taiwan
Lease and commissioned services contract	Sankyu- Jvan An Internation al Logistics Co.,Ltd.	2020/01~2022/12	Warehousing lease at logistics center and commissioned logistics services	None
Lease contract	Excelsior Asset Manageme nt Co.,Ltd.	2021/01~2030/12	Lease for Zhonghe office	None

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VI. Financial Information

138

1. Five-Year Financial Summary

(1)Condensed balance sheet – IFRS
A. Condensed consolidated balance sheet

Unit: NT$ thousands

Year Item	Year Item	Financial Information for The Last Five Years	Financial Information for The Last Five Years	Financial Information for The Last Five Years	Financial Information for The Last Five Years	Financial Information for The Last Five Years	As of March 31, 2021
		2016	2017	2018	2019	2020
Current assets		12,437,971	10,530,890	9,939,278	8,614,685	8,501,800	8,721,005
Property, plant and equipment		271,012	270,490	286,345	560,863	534,339	629,409
Intangible assets		43,761	39,901	39,585	31,967	32,653	31,609
Other assets		4,073,310	4,110,198	3,715,662	4,557,469	4,935,840	4,887,764
Total assets		16,826,054	14,951,479	13,980,870	13,764,984	14,004,632	14,269,787
Current liabilities	Before distribution	7,680,897	6,406,076	5,105,976	4,829,102	4,019,932	4,775,293
	After distribution	7,999,964	6,763,993	5,490,423	5,294,894	4,513,953 (Note 2)	4,775,293 (Note 2)
Non-current liabilities		836,597	520,600	532,491	303,970	404,996	384,776
Total liabilities	Before distribution	8,517,494	6,926,676	5,638,467	5,133,072	4,424,928	5,160,069
	After distribution	8,836,561	7,284,593	6,022,914	5,598,864	4,918,949 (Note 2)	5,160,069 (Note 2)
Equity attributable to owners ofparent		6,512,521	6,416,469	6,806,841	6,946,341	7,590,897	7,213,523
Share capital		1,276,242	1,278,274	1,281,490	1,281,490	1,411,490	1,411,490
Capital surplus		2,825,966	2,804,995	2,812,704	2,816,807	3,276,107	3,276,107
Retained earnings	Before distribution	2,525,391	2,596,032	2,739,276	2,904,393	3,017,380	2,661,510
	After distribution	2,206,324	2,238,115	2,354,829	2,438,601	2,523,359 (Note 2)	2,661,510 (Note 2)
Other equity		(115,078)	(262,832)	(26,629)	(56,349)	(114,080)	(135,584)
Treasurystock		-	-	-	-	-	-
Non-controlling interests		1,796,039	1,608,334	1,535,562	1,685,571	1,988,807	1,896,195
Total equity	Before distribution	8,308,560	8,024,803	8,342,403	8,631,912	9,579,704	9,109,718
	After distribution	7,989,493	7,666,886	7,957,956	8,166,120	9,085,683 (Note 2)	9,109,718 (Note 2)

Note 1: The financial statements of the last five fiscal years have been audited by CPA, but the financial statements of 2021 Q1 have been reviewed by CPA.

Note 2: The appropriation of the 2020 earnings approved by the Board of Directors on March 12, 2021.

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B. Condensed parent company-only balance sheet

Unit: NT$ thousands

		Unit: NT$ thousands	Unit: NT$ thousands	Unit: NT$ thousands	Unit: NT$ thousands	Unit: NT$ thousands
Year Item		Financial Information for The Last Five Years
		2016	2017	2018	2019	2020
Current assets		2,737,734	2,451,238	2,536,134	2,319,603	2,057,785
Property, plant and equipment		158,072	173,537	185,825	180,050	177,053
Intangible assets		690	1,149	1,325	697	1,203
Other assets		5,226,672	5,246,106	5,517,184	5,944,251	6,333,372
Total assets		8,123,168	7,872,030	8,240,468	8,444,601	8,569,413
Current liabilities	Before distribution	1,118,641	975,854	944,271	1,381,462	833,551
	After distribution	1,437,708	1,333,771	1,328,718	1,847,254	1,327,572 (Note 2)
Non-current liabilities		492,006	479,707	489,356	116,798	144,965
Total liabilities	Before distribution	1,610,647	1,455,561	1,433,627	1,498,260	978,516
	After distribution	1,929,714	1,813,478	1,818,074	1,964,052	1,472,537 (Note 2)
Share capital		1,276,242	1,278,274	1,281,490	1,281,490	1,411,490
Capital surplus		2,825,966	2,804,995	2,812,704	2,816,807	3,276,107
Retained earnings	Before distribution	2,525,391	2,596,032	2,739,276	2,904,393	3,017,380
	After distribution	2,206,324	2,238,115	2,354,829	2,438,601	2,523,359 (Note 2)
Other equity		(115,078)	(262,832)	(26,629)	(56,349)	(114,080)
Treasurystock		-	-	-	-	-
Total equity	Before distribution	6,512,521	6,416,469	6,806,841	6,946,341	7,590,897
	After distribution	6,193,454	6,058,552	6,422,394	6,480,549	7,096,876 (Note 2)

Note 1: The financial statements for 2016-2020 have been audited by CPA. Note 2: The appropriation of the 2020 earnings approved by the Board of Directors on March 12, 2021.

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(2)Condensed statement of comprehensive income - IFRS

A. Condensed consolidated statement of comprehensive income

Unit: NT$ thousands

Year Item	Financial Information for The Last Five Years	Financial Information for The Last Five Years	Financial Information for The Last Five Years	Financial Information for The Last Five Years	Financial Information for The Last Five Years	As of March 31,2021
	2016	2017	2018	2019	2020
Operating revenue	6,205,758	6,095,337	6,345,031	6,457,362	6,675,494	1,629,331
Grossprofit	1,196,720	1,206,298	1,199,165	1,236,055	1,306,574	344,318
Net operating income	379,496	452,562	438,119	464,039	529,070	158,335
Operating revenue	6,205,758	6,095,337	6,345,031	6,457,362	6,675,494	1,629,331
Grossprofit	1,196,720	1,206,298	1,199,165	1,236,055	1,306,574	344,318
Net operating income	379,496	452,562	438,119	464,039	529,070	158,335
Non-operating income and expenses	199,118	101,675	210,381	282,786	300,313	43,247
Profit before tax	578,614	554,237	648,500	746,825	829,383	201,582
Profit from continuing operations	477,302	471,008	548,423	622,274	669,086	162,099
Loss from discontinuing operations	`－`	`－`	`－`	`－`	`－`	`－`
Profit	477,302	471,008	548,423	622,274	669,086	162,099
Other comprehensive income, net	( 247,902)	(177,740)	(48,389)	23,915	(28,296)	(49,102)
Total comprehensive income	229,400	293,268	500,034	646,189	640,790	112,997
Profit attributable to owners of parent	389,557	399,047	451,562	514,755	571,670	130,685
Profit attributable to non- controlling interests	87,745	71,961	96,861	107,519	97,416	31,414
Comprehensive income attributable to owners of parent	182,459	244,206	417,581	523,062	513,296	115,968
Comprehensive income attributable to non-controlling interests	46,941	49,062	82,453	123,127	127,494	(2,971)
Basic earnings per share	3.09	3.12	3.53	4.02	4.06	0.93

Note ： The financial statements of the last five fiscal years have been audited by CPA, but the financial statements of 2021 Q1 have been reviewed by CPA.

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B. Condensed parent company-only statement of comprehensive income

Unit: NT$ thousands

	Unit: NT$ thousands	Unit: NT$ thousands	Unit: NT$ thousands	Unit: NT$ thousands	Unit: NT$ thousands
Year Item	Financial Information for The Last Five Years
	2016	2017	2018	2019	2020
Operating revenue	3,404,487	3,561,288	3,733,339	3,964,690	4,199,740
Gross profit	474,765	619,761	603,321	631,739	685,656
Net operating income	165,028	267,803	279,606	263,303	319,114
Non-operating income and expenses	274,377	181,470	253,773	335,459	353,895
Profit before tax	439,405	449,273	533,379	598,762	673,009
Profit from continuing operations	389,557	399,047	451,562	514,755	571,670
Loss from discontinuing operations	`－`	`－`	`－`	`－`	`－`
Profit	389,557	399,047	451,562	514,755	571,670
Other comprehensive income,net	(207,098)	(154,841)	(33,981)	8,307	(58,374)
Total comprehensive income	182,459	244,206	417,581	523,062	513,296
Basic earnings per share	3.09	3.12	3.53	4.02	4.06

Note ： The financial statements for 2016-2020 have been audited by CPA.

(3) Auditors’ opinions from 2016 to 2020

Year	AccountingFirm	CPA	Audit Opinion
2020	KPMG	Wu Tsao-Jen and Lin Wan-Wan	Unqualified opinion with other matterparagraph
2019	KPMG	Wu Tsao-Jen and Lin Wan-Wan	Unqualified opinion with other matterparagraph
2018	KPMG	Wu Tsao-Jen and Lin Wan-Wan	Unqualified opinion with other matterparagraph
2017	KPMG	Wu Tsao-Jen and Lin Wan-Wan	Unqualified opinion with other matterparagraph
2016	KPMG	Wu Tsao-Jen and Lin Wan-Wan	Unqualified opinion with other matterparagraph

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2. Five-Year Financial Analysis

(1)Financial analysis - IFRS

A. Financial analysis on consolidated financial statements

Year Item	Year Item	2016	2017	2018	2019	2020	As of March 31,2021
Financial structure(%)	Debt ratio	50.6	46.3	40.3	37.3	31.6	36.2
	Ratio of long-term capital to property, plant and equipment	3,374.5	3,159.2	3,099.4	1,593.2	1,868.6	1,508.5
Solvency (%)	Current ratio	161.9	164.4	194.7	178.4	211.5	182.6
	Quick ratio	146.9	145.0	172.2	158.7	186.4	162.4
	Times interest earned	15.8	18.4	30.4	32.4	78.0	89.2
Operating performance	Accounts receivable turnover (times)	3.9	3.5	3.7	4.1	4.4	4.5
	Average collection period	93.1	105.2	98.1	89.7	82.4	81.7
	Inventory turnover (times)	4.7	4.6	4.8	5.6	6.3	6.0
	Accounts payables turnover(times)	4.3	4.3	5.0	5.0	5.5	5.9
	Average days in sales	78.0	80.2	75.6	65.2	57.9	61.1
	Property, plant and equipment turnover(times)	20.7	22.5	22.8	15.2	12.1	11.2
	Total assets turnover(times)	0.4	0.4	0.4	0.5	0.5	0.5
Profitability	Return on total assets(%)	3.1	3.1	3.9	4.6	4.9	4.6
	Return on equity (%)	5.8	5.8	6.7	7.3	7.3	6.9
	Pre-tax income to paid-in capital(%)	45.3	43.4	50.6	58.3	58.8	57.1
	Net margin(%)	7.7	7.7	8.6	9.6	10.0	9.9
	Earnings per share (NT$)	3.09	3.12	3.53	4.02	4.06	0.93
Cash flows	Cash flow ratio(%)	5.9	(7.6)	3.8	24.7	21.6	27.3
	Cash flow adequacyratio(%)	93.3	52.2	59.7	67.9	67.7	87.1
	Cash reinvestment ratio(%)	0.7	(9.9)	(2.6)	7.7	3.0	13.0
Leverage	Operating leverage	3.2	2.7	2.7	2.7	2.5	2.2
	Financial leverage	1.1	1.1	1.1	1.1	1.0	1.0
Analysis of deviation for the last two years over 20%: 1. Times interest earned increased mainly due to decrease in interest expenses because of repayments of short-term borrowings in 2020. 2.Property, plant and equipment turnover decreased mainly due to increase in the property, plant and equipment in 2020. 3.Cash reinvestment ratio decreased mainly due to the increase in net cash flows from operatingactivities in 2019.

143

B. Financial analysis on parent company-only financial statements

Year Item	Year Item	2016	2017	2018	2019	2020
Financial structure(%)	Debt ratio	19.8	18.5	17.4	17.7	11.4
	Ratio of long-term capital to property, plant and equipment	4,131.6	3,697.5	3,663.0	3,858.0	4,287.4
Solvency (%)	Current ratio	244.7	251.2	268.6	167.9	246.9
	Quick ratio	190.5	185.3	202.6	127.9	175.9
	Times interest earned	68.1	80.7	97.8	110.6	1202.8
Operating performance	Accounts receivable turnover (times)	3.7	3.5	3.7	4.0	4.1
	Average collection period	98.9	105.2	98.6	92.2	88.6
	Inventory turnover (times)	4.5	4.8	5.1	5.8	6.3
	Accounts payables turnover(times)	3.6	3.5	4.2	4.6	5.2
	Average days in sales	80.6	75.4	71.9	62.6	58.0
	Property, plant and equipment turnover(times)	21.1	21.5	20.8	21.7	23.5
	Total assets turnover(times)	0.4	0.5	0.5	0.5	0.5
Profitability	Return on total assets(%)	5.0	5.1	5.7	6.2	6.7
	Return on equity (%)	6.0	6.2	6.8	7.5	7.9
	Pre-tax income to paid-in capital(%)	34.4	35.2	41.6	46.7	47.7
	Net margin (%)	11.4	11.2	12.1	13.0	13.6
	Earnings per share (NT$)	3.09	3.12	3.53	4.02	4.06
Cash flows	Cash flow ratio(%)	28.7	1.5	29.6	17.2	15.6
	Cash flow adequacyratio(%)	52.2	34.5	48.7	39.8	33.7
	Cash reinvestment ratio(%)	0.2	(4.4)	(1.1)	(2.1)	(4.3)
Leverage	Operating leverage	2.9	2.3	2.2	2.4	2.1
	Financial leverage	1.0	1.0	1.0	1.0	1.0
Analysis of deviation for the last two years over 20%: 1.Debt ratio decreased mainly due to repayments of short-term borrowings with capital injection by cash in 2020. 2.Current ratio, quick ratio and times interest earned increased mainly due to repayments of short-term borrowings with capital injection by cash in 2020. 3.Cash reinvestment ratio decreased mainly due to the decrease in net cash flows from operatingactivities in 2020.

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Formula:

a. Financial structure

(a) Debt ratio = total liabilities / total assets
(b) Ratio of long-term capital to property, plant and equipment = (total equity +non-current liabilities) / net property, plant and equipment
b. Solvency
(a) Current ratio = current assets / current liabilities
(b) Quick ratio = (current assets – inventories – prepaid expenses) / current liabilities
(c) Times interest earned = net income before income tax and interest expenses / current interest expenses
c. Operating performance
(a) Accounts receivable (including accounts receivable and notes receivable from operation) turnover = net sales / average trade receivables (including accounts receivable and notes receivable from operation) balance
(b) Average collection period = 365 / accounts receivable turnover
(c) Inventory turnover = cost of goods sold / average inventory
(d) Accounts payables (including accounts payable and notes payable from operation) turnover = cost of goods sold / average trade payables (including accounts payable and notes payable from operation) balance
(e) Average days in sales = 365 / inventory turnover
(f) Property, plant and equipment turnover = net sales / average net property, plant and equipment
(g) Total assets turnover = net sales / average total assets

d. Profitability

(a) Return on total assets = (net income + interest expenses × (1-effective tax rate)) / average total assets
(b) Return on equity = net income / average total equity
(c) Net margin = net income / net sales
(d) Earnings per share = (profit attributable to owners of parents – preferred stock dividend) / weighted average number of shares outstanding

e. Cash flows

(a) Cash flow ratio = net cash flows from operating activities / current liabilities
(b) Cash flow adequacy ratio = five-year sum of net cash flows from operating activities/ five-year sum of (capital expenditures + inventory additions + cash dividends)
(c) Cash reinvestment ratio = (net cash flows from operating activities –cash dividends) / (gross property, plant and equipment + long-term investments + other non-current assets + working capital)

f. Leverage

(a) Operating leverage = (net operating revenue – variable operating costs and expenses) / net operating income

(b) Financial leverage = net operating income / (net operating income – interest expenses)

145

3. Audit Committee’s Review Report

Excelsior Medical Co., Ltd.

Audit Committee’s Review Report

The Board of Directors has prepared the Company’s 2020 Business Report, Financial Statements, and proposal for earning distribution. The CPA firm of KPMG has audit Excelsior Medical Co., Ltd. Financial Statements and has issued an audit report relating to the Financial Statements.

The Business Report, Financial Statements, and earning distribution proposal have been reviewed and determined to be correct and accurate by the Audit Comrnittee members of Excelsior Medical Co., Ltd.. According to Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Act, we hereby submit this report.

For your adoption.

The 2021 Annual Shareholders’ Meeting

Excelsior Medical Co., Ltd.

Chairman of the Audit Committee: Chan Tzu-Sheng

March 19, 2021

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4. Financial Statements and Independent Auditors’ Report –the Company & Subsidiaries

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, 2020 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 endorsed by the Financial Supervisory Commission, "Consolidated Financial Statements." 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 12, 2021

147

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, 2020 and 2019, 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, 2020 and 2019, 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 audit of the consolidated financial statements as of and for the year ended December 31, 2020 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. Furthermore, we conducted our audit of the consolidated financial statements as of and for the year ended December 31, 2019 in accordance with the Regulations Governing Auditing and Certification of Financial Statements by Certified Public Accountants, Rule No. 1090360805 issued by the Financial Supervisory Commission, 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:

Impairment Assessment on Receivables

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

148

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, 2020 and 2019, the total assets of these subsidiaries were NT$442,964 thousand and NT$231,936 thousand, constituting 3% and 2% of consolidated total assets, respectively. The total operating revenues of these subsidiaries for the year ended December 31, 2020 and 2019 were NT$252,013 thousand and NT$95,717 thousand, constituting 4% and 1% 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, 2020 and 2019, the carrying amounts of these investments were NT$546,435 thousand and NT$101,609 thousand, constituting 4% and 1% 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, 2020 and 2019, amounted to NT$107,286 thousand and NT$19,784 thousand, were constituting 17% and 3% 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, 2020 and 2019, 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.

149

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:

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

150

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 Wan-Wan Lin.

KPMG

Taipei, Taiwan (Republic of China) March 19, 2021

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

CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 2020 AND 2019

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

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	December 31, 2020	December 31, 2020	December 31, 2020
	Amount	%	Amount
8,501,800 61	4,019,932 28 4,829,102 35
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 -	- - 644 - 156,960 1 115,730 1 225,457 2 163,791 1 17,248 - 17,152 - 5,331 - 6,653 -
	404,996 3 303,970 2
	4,424,928 31 5,133,072 37
	1,411,490 10 1,281,490 9 3,276,107 24 2,816,807 21 3,017,380 22 2,904,393 21 (114,080) (1) (56,349) -
5,502,832 39
	7,590,897 55 6,946,341 51 1,988,807 14 1,685,571 12
	9,579,704 69 8,631,912 63
$ 14,004,632 100	$ 14,004,632 100 13,764,984 100

152

(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, 2020 AND 2019

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

For the Y	ears Ende	d December 31,	% 100 81
2020	% 100 80	2019
Amount $ 6,675,494 5,368,920		Amount 6,457,362 5,218,965
1,306,574 110,977 110,901	20 2 2	1,238,397 91,697 89,355	19 1 1
1,306,498	20	1,236,055	19
495,902 278,617 2,909	8 4 -	463,877 304,073 4,066	7 5 -
777,428	12	772,016	12
529,070	8	464,039	7
23,255 32,248 13,550 (10,768) 242,028	- - - - 4	44,638 26,645 45,006 (23,820) 190,317	1 - 1 - 3
300,313	4	282,786	5
829,383 160,297	12 2	746,825 124,551	12 2
669,086	10	622,274	10
681 47,852 26,868 3,756	- 1 - -	10,391 26,307 33,302 (4,774)	- - 1 -
71,645	1	74,774	1
(171,023) 46,876 (24,206)	(2) 1 -	(94,348) 31,315 (12,174)	(1) - -
(99,941)	(1)	(50,859)	(1)
(28,296)	-	23,915	-
$ 640,790	10	646,189	10
$ 571,670 97,416	9 1	514,755 107,519	8 2
$ 669,086	10	622,274	10
$ 513,296 127,494	8 2	523,062 123,127	8 2
$ 640,790	10	646,189	10
$	4.06		4.02
$	4.04		3.99

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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, 2020 AND 2019

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

			Equity attributable to owners of parent	Equity attributable to owners of parent			Equity attributable to owners of parent 6,805,209 514,755 8,307	Non-controlling interests 1,535,562 107,519 15,608	Total equity 8,340,771 622,274 23,915
Share capital Ordinary shares $ 1,281,490 - -	Capital surplus		Retained earnings		Total other equity interest Unrealized gains Exchange differences on translation of foreign financial statements (losses) from financial assets measured at fair value through other comprehensive income (61,536) 34,907 - - (46,367) 51,243
					Exchange differences on translation of foreign financial statements (61,536) - (46,367)
		Legal reserve 681,883 - -	Special reserve 262,832 - -	Unappropriated retained earnings
-	-	-	-	518,186	(46,367)	51,243	523,062	123,127	646,189
- - - - - - - -	- - - (176) 957 3,322 - -	45,156 - - - - - - -	- (236,203) - - - - - -	(45,156) 236,203 (384,447) (1,586) - - - 34,596	- - - - - - - -	- - - - - - - (34,596)	- - (384,447) (1,762) 957 3,322 - -	- - - - 113,049 - (86,167) -	- - (384,447) (1,762) 114,006 3,322 (86,167) -
1,281,490 - -	2,816,807 - -	727,039 - -	26,629 - -	2,150,725 571,670 (944)	(107,903) - (91,466)	51,554 - 34,036	6,946,341 571,670 (58,374)	1,685,571 97,416 30,078	8,631,912 669,086 (28,296)
-	-	-	-	570,726	(91,466)	34,036	513,296	127,494	640,790
- - - - 130,000 - - -	- - - 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 -
$ 1,411,490	3,276,107	778,515	56,349	2,182,516	(199,369)	85,289	7,590,897	1,988,807	9,579,704

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CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (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 Loss (gain) on disposal of property, plan and equipment Gain on disposal of subsidiaries 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, 2020 2019 $ 829,383 746,825 162,691 154,601 4,776 5,640 2,909 4,066 200 (32) 10,768 23,820 (23,255) (44,638) (23,231) (15,424) 4,152 3,322 (242,028) (190,317) 100 (906) - (13,167) 4,282 16,224 110,977 91,697 (110,901) (89,355) 71 (53,676)	For the Years Ended December 31, 2020 2019 $ 829,383 746,825 162,691 154,601 4,776 5,640 2,909 4,066 200 (32) 10,768 23,820 (23,255) (44,638) (23,231) (15,424) 4,152 3,322 (242,028) (190,317) 100 (906) - (13,167) 4,282 16,224 110,977 91,697 (110,901) (89,355) 71 (53,676)
	2020 $ 829,383 162,691 4,776 2,909 200 10,768 (23,255) (23,231) 4,152 (242,028) 100 - 4,282 110,977 (110,901) 71
	(98,489)	(108,145)
	47,359 65,028 196,476 (36,471) (866) (68,221) 6,182	115,047 (34,980) 1,085,152 149,014 (3,441) 53,528 9,213
	209,487	1,373,533
	(8,584) (5,773) (171,239) 191,162 (320) (938) (882)	(39,767) (4,293) 24,795 (712,503) (18,736) 5,633 (12,878)
	3,426	(757,749)
	212,913	615,784
	114,424	507,639
	943,807 23,111 (97,485)	1,254,464 42,287 (102,255)
	869,433	1,194,496

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(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, 2020 AND 2019 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Cash flows from investing activities: Acquisition of financial assets at fair value through other comprehensive income 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 Net cash flow from acquisition of subsidiaries Net cash flow from disposal of subsidiaries 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 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 decrease in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period	For the Years Ended December 31, 2020 2019 - (7,362) 1,006 57,295 (620,951) (406,787) 365,699 113,666 (320) - - 15,200 - (359,957) - 1,859 (30,716) (51,275) 285 2,740 (3,663) (58,031) 61,301 3,188 (4,317) (727) (209,877) - (101,376) - - 9,345 - (1,685) 411 - 127,668 140,311	For the Years Ended December 31, 2020 2019 - (7,362) 1,006 57,295 (620,951) (406,787) 365,699 113,666 (320) - - 15,200 - (359,957) - 1,859 (30,716) (51,275) 285 2,740 (3,663) (58,031) 61,301 3,188 (4,317) (727) (209,877) - (101,376) - - 9,345 - (1,685) 411 - 127,668 140,311
	2020 - 1,006 (620,951) 365,699 (320) - - - (30,716) 285 (3,663) 61,301 (4,317) (209,877) (101,376) - - 411 127,668
	(414,850)	(542,220)
	- (808,469) (4,448) - (20) (75,599) (465,792) 585,000 (10,593) 176,637	74,867 - (398,607) 6 - (71,225) (384,447) - (19,361) (86,167)
	(603,284)	(884,934)
	(61,611) (210,312) 2,828,776	(38,647) (271,305) 3,100,081
	$ 2,618,464	2,828,776

156

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EXCELSIOR MEDICAL CO., LTD. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

(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 12, 2021.

(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. (“FSC”) 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, 2020:

Amendments to IFRS 3 “Definition of a Business”
Amendments to IFRS 9, IAS39 and IFRS7 “Interest Rate Benchmark Reform”
Amendments to IAS 1 and IAS 8 “Definition of Material”
Amendments to IFRS 16 “COVID-19-Related Rent Concessions”
(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, 2021, would not have a significant impact on its consolidated financial statements:

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

157

(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, 2020 AND 2019

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

The following new and amended standards, which may be relevant to the Group, have been issued by the International Accounting Standards Board (IASB), but have yet to be endorsed by the FSC:

Standards or		Effective date per
Interpretations	Content of amendment	IASB
Amendments to IAS 1	The amendments aim to promote consistency	January 1, 2023
“Classification of Liabilities as	in applying the requirements by helping
Current or Non-current”	companies determine whether, in the
	statement of balance sheet, debt and other
	liabilities with an uncertain settlement date
	should be classified as current (due or
	potentially due to be settled within one year)
	or non-current.
	The amendments include clarifying the
	classification requirements for debt a
	company might settle by converting it into
	equity.
Amendments to IAS 37	The amendments clarify that the‘costs of	January 1, 2022
“Onerous Contracts－Cost	fulfilling a contract’comprises the costs
of Fulfilling a Contract”	that relate directly to the contract as follows:
	●the incremental costs – e.g. direct labor
	and materials; and
	●an allocation of other direct costs – e.g. an
	allocation of the depreciation charge for an
	item of property, plant and equipment used
	in fulfilling the contract.

The Group is evaluating the impact of its initial adoption of the abovementioned standards or interpretations on its consolidated financial position and consolidated financial performance. The results thereof will be disclosed when the Group completes its evaluation.

The Group does not expect the following other 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 16 Property, Plant and Equipmentt Proceeds before Intended Use
Annual Improvements to IFRS Standards 2018-2020
Amendments to IFRS 3 “Reference to the Conceptual Framework”
Amendments to IAS 1 “Disclosure of Accounting Policies”
Amendments to IAS 8 “Definition of Accounting Estimates”

158

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EXCELSIOR MEDICAL CO., LTD. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

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

(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
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.

(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.

159

(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, 2020 AND 2019

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

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：

.List of subsidiaries in the consolidated financial statements：
Name of Name of Principal Investor Subsidiary Activity	Shareholding	Note
	2020.12.31 2019.12.31
The Company Dynamic Medical Technologies Inc. (“Dynamic”) Sale, maintenance and lease of laser medical equipment for beauty treatment, and sale of consumables of beauty treatment and cosmetic products 〞 Bestsmile Co., Ltd. (“Bestsmile”) Sale of medical equipment, and medical management consultancy service 〞 Excelsior Healthcare Co., Limited (Excelsior Healthcare) Investment business 〞 Arich Enterprise Co., Ltd. (Arich) Sale of medicines, and logistics service 〞 Excelsior Asset Management Co., Ltd. (“Excelsior Asset”) Sales of medical equipment, precision instrument and real estate The Company and Excelsior Healthcare Excelsior Medical Co., Limited (Hong Kong) (“Hong Kong Excelsior”) Investment business Dynamic Dynamic Medical Technologies (Hong Kong) Ltd. (“Hong Kong Dynamic”) Retail and wholesale of medical equipment, cosmetic health-care products and medical herbs and academic training The Company and Dynamic Excelsior Beauty Co., Ltd. (“Excelsior Beauty”) Sale of aesthetic medical and cosmetic health-care products Hong Kong Dynamic Guangzhou Dynamic Inc. (“Guangzhou Dynamic”) Sale and maintenance of medical equipment 〞 Excelsior Beauty Limited of Hong Kong (“Hong Kong Excelsior Beauty”) Sale of professional weight-loss and cosmetic health-care products Excelsior Beauty CYJ International Taiwan Inc. (CYJ Taiwan) Sales and treatment of hair protecting and conditioning	38.50% 38.50% 98.02% 98.02% 100.00% 100.00% 40.00% 39.51% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 94.91% 94.91% 100.00% 100.00% - % 100.00% 80.00% 80.00%	Note 1 Note 1 Note 2

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EXCELSIOR MEDICAL CO., LTD. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

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

Name of Name of Principal Investor Subsidiary Activity	Shareholding	Note
	2020.12.31 2019.12.31
Excelsior Healthcare EG Healthcare, Inc. Sale and lease of medical equipment, and medical management consultancy service 〞 Excelsior Investment (Malaysia) Co., Ltd. Investment business Hong Kong Excelsior SinoExcelsior Investment Inc. ("SinoExcesior Investment") Medical management consultancy service Excelsior Investment (Malaysia) Co., Ltd. RENAL LABORATORIES SDN. BHD. Manufacture of medical equipment 〞 MEDI-CHEM SYSTEMS SDN. BHD. Sale of medical equipment MEDI-CHE M SYSTEMS SDN. BHD. RENAL MANAGEMENT SDN. BHD. Lease business	99.99% 99.99% 100.00% 100.00% 100.00% 100.00% 70.00% 70.00% 70.00% 70.00% 100.00% 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.
Note 2: Liquidation ended in January 2019.
Subsidiaries excluded from the consolidated financial statements: None.
(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.

161

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EXCELSIOR MEDICAL CO., LTD. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

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

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.

(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.

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EXCELSIOR MEDICAL CO., LTD. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

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

(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.

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.

163

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EXCELSIOR MEDICAL CO., LTD. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

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

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.

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).

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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, 2020 AND 2019

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

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.

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.

165

(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, 2020 AND 2019

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

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.

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.

166

(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, 2020 AND 2019

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

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.

(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.

167

(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, 2020 AND 2019

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

(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.

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:

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.

168

(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, 2020 AND 2019

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

(l) Leases
(i) Identifying a lease

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. To assess whether a contract conveys the right to control the use of an identified asset, the Group assesses whether:

1) the contract involves the use of an identified asset – this may be specified explicitly or implicitly, and should be physically distinct or represent substantially all of the capacity of a physically distinct asset. If the supplier has a substantive substitution right, then the asset is not identified; and
2) the customer has the right to obtain substantially all of the economic benefits from use of the asset throughout the period of use; and
3) the customer has the right to direct the use of the asset throughout the period of use only if either:
the customer has the right to direct how and for what purpose the asset is used throughout the period of use; or
the relevant decisions about how and for what purpose the asset is used are predetermined and:
- － the customer has the right to operate the asset throughout the period of use, without the supplier having the right to change those operating instructions; or
- － the customer designed the asset in a way that predetermines how and for what purpose it will be used throughout the period of use.

(ii) 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.

169

(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, 2020 AND 2019

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

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.

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;
－ amounts expected to be payable under a residual value guarantee; and
－
payments for purchase or termination options that are reasonably certain to be exercised.

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 straight-line basis over the lease term.

170

(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, 2020 AND 2019

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

(iii) 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.

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 a finance lease receivable at an amount equal to its net investment in the lease. Initial direct costs, such as lessors to negotiate and arrange a lease, are included in the measurement of the net investment. The interest income is recognized over the lease term based on a pattern reflecting a constant periodic rate of return on the net investment in the lease. The Group recognizes lease payments received under operating leases as income on a straight-line 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.

171

(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, 2020 AND 2019

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

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.

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.

172

(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, 2020 AND 2019

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

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.

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 stand-alone 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.

173

(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, 2020 AND 2019

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

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.

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) Share-based Payment

The grant-date fair value of equity-settled share-based payment arrangements granted to employees is generally recognized as an expense, with a corresponding increase in equity, over the vesting period of the awards. The amount recognized as an expense is adjusted to reflect the number of awards for which the related service and non-market performance conditions are expected to be met, such that the amount ultimately recognized is based on the number of awards that meet the related service and non-market performance conditions at the vesting date.

For share-based payment awards with non-vesting conditions, the grant-date fair value of the share-based payment is measured to reflect such conditions, and there is no true-up for differences between expected and actual outcomes.

The Group set the grant date on which the board of directors authorized the subscription price and the number of new shares to qualified employees.

174

(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, 2020 AND 2019

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

(s) 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 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.

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.

175

(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, 2020 AND 2019

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

(t) 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.

(u) 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.

Information about judgments made in applying accounting policies that have the most significant effects on the amounts recognized in the consolidated financial statements is as follows:

Judgment regarding actual control of investees

To determine whether the Group has substantive control over its investees, the Group has assessed relative shareholding ratio to other shareholders, degree of diversified ownership, director seats, potential voting rights, and any other factors that could influence the judgement.

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).

176

(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, 2020 AND 2019

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

(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, 2020 $ 1,756,766 861,698	December 31, 2019 1,586,972 1,241,804
	$ 2,618,464	2,828,776

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

(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, 2020 $ 166	December 31, 2019 -
	$ 46	-

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		December 31, 2020	Maturity period 2021.02~2021.03 2021.01
	Amount (in thousands) JPY 107,538 USD 400	Currency JPY against TWD USD against TWD

177

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EXCELSIOR MEDICAL CO., LTD. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

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

Equity investments at fair value through other comprehensive income Domestic listed shares Foreign listed shares Domestic unlisted shares Foreign unlisted shares Total	December 31, 2020 $ 103,792 194,205 129,680 307,760	December 31, 2019 115,303 174,161 153,089 247,532
	$ 735,437	690,085

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, 2020 and 2019. The shares sold had a fair value of $1,009 thousand and $57,550 thousand, respectively. The Group realized a gain of $301 thousand and $34,596 thousand, respectively, which was included in other comprehensive income, and thereafter, was transferred to retained earnings from other equity.

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

3.As of December 31, 2020 and 2019, the aforesaid financial assets were not pledged as collateral.

(d) Financial assets measured at amortized cost

Time deposits with original maturity of more than 3 months	December 31, 2020 $ 774,526	December 31, 2019 524,614

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 0.26%~1.76% and 0.66%~2.23% per annum as of December 31, 2020 and 2019, respectively.

178

(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, 2020 AND 2019

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

(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, 2020 $ 222,994 184,942 1,286,660 2,815 14,582 2,312,487 (72,628) (107)	December 31, 2019 277,061 225,191 1,338,712 19,314 14,490 2,466,550 (73,738) (365) 4,267,215
	$ 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.

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	December 31, 2020	December 31, 2020	December 31, 2020	Loss allowance provision (28,711) (2,102) (1,314) (1,217) (39,284) (72,628)
	Gross carrying amount $ 3,892,987 37,643 11,161 7,185 47,650	Weighted-aver age loss rate
		0.74% 5.58% 11.77% 16.94% 82.44%
	$ 3,996,626

179

(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, 2020 AND 2019

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

December 31, 2019	December 31, 2019	Loss allowance provision (24,435) (3,368) (1,381) (1,448) (43,106)
Gross carrying amount $ 4,192,338 57,358 8,813 8,190 48,894	Weighted-aver age loss rate
	0.58% 5.87% 15.67% 17.68% 88.16%
$ 4,315,593		(73,738)

The Group’s lease payment receivables were as follows:

December 31, 2020 Less than one year Between one and five years December 31, 2019 Less than one year Between one and five years	Gross investment inthe lease $ 6,549 9,689	Unearned finance income (753) (903)	Present value of minimum lease payments receivable 5,796 8,786 14,582 5,542 8,948 14,490
	$ 16,238	(1,656)
	$ 6,257 9,501	(715) (553)
	$ 15,758	(1,268)

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 1-5 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 6.00%~7.00% per annum as of December 31, 2020 and 2019.

The lease payment receivables as of December 31, 2020 and 2019 were neither past due nor impaired.

180

(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, 2020 AND 2019

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

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, 2020 2019 $ 73,738 71,738 31,727 13,749 (3,996) (1,926) (28,818) (9,683) (23) (140) $ 72,628 73,738
	2020 $ 73,738 31,727 (3,996) (28,818) (23)
	$ 72,628

As of December 31, 2020 and 2019, the receivables from installment sales were $3,603 thousand and $13,703 thousand, respectively, and the related unrealized interest income were $107 thousand and $365 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, 2020	December 31, 2020	December 31, 2020
Purchaser	Amount Derecognized $ 8,840	Amount Advanced Unpaid -	Amount Advanced Paid 8,840	Amount Recognized in Other Receivables -	Range of Interest Rate 1.25%-3.19% 1.77%-2.02%	Significant Transferring Terms
						None None
	$ 5,632	-	5,632	-

		December 31, 2019	December 31, 2019	December 31, 2019
Purchaser	Amount Derecognized $ 2,495	Amount Advanced Unpaid -	Amount Advanced Paid 2,495	Amount Recognized in Other Receivables -	Range of Interest Rate 3.89%-6.01% 1.70%-2.37%	Significant Transferring Terms
						None None
	$ 13,613	-	13,613	-

181

(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, 2020 AND 2019

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

(f) Inventories

Merchandise Inventory in-transit Total The details of cost of goods sold were as follows : Cost of goods sold (Reversal) losses on inventory valuation and obsolescence Loss on inventory scrapped Repair and maintenance costs Others operating costs Total	December 31, 2020 $ 762,161 89,075	December 31, 2019 766,067 87,118
	$ 851,236	853,185
	For the Years Ended December 31, 2020 2019 $ 4,920,695 4,684,140 (44,175) 31,121 4,795 20,717 117,596 118,717 370,009 364,270
	2020 $ 4,920,695 (44,175) 4,795 117,596 370,009
	$ 5,368,920	5,218,965

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.

(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 1.Associates	December 31, 2020 $ 2,492,993	December 31, 2019 2,368,562

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

Name of Associates	Nature of Relationship with the Group	Main operating location/ Registered Country of the Company	Proportion of shareholding and voting rights	Proportion of shareholding and voting rights
			December 31, 2020	December 31, 2019
Asia Best Healthcare	Long-term care and rehabilitation services	Cayman Islands	49.38%	49.38%

182

(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, 2020 AND 2019

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

1) Asia Best Healthcare:

Current assets Non-current assets Current liabilities Non-Current liabilities Net assets Net assets attributable to the Group Operating revenue Profit Other comprehensive income Total comprehensive income Dividends received	December 31, 2020 $ 1,156,129 3,978,430 (186,014) (2,178,146)	December 31, 2019 1,426,680 3,778,958 (247,640) (2,172,816)
	$ 2,770,399	2,785,182
	$ 1,404,421	1,414,743
	For the Years Ended December 31,
	2020 $ 287,505	2019
		317,880
	$ 124,426 65,634	90,663 30,067
	$ 190,060	120,730
	$ 29,974	26,308

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 Attributable to the Group: Profit Other comprehensive income Total comprehensive income	December 31, 2020 $ 1,088,572	December 31, 2019 953,819
	For the Years Ended December 31, 2020 2019 $ 180,588 144,748 43,123 51,569
	2020 $ 180,588 43,123
	$ 223,711	196,317

183

(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, 2020 AND 2019

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

2.Joint ventures

The Group’s financial information for investments in individually insignificant joint venture accounted for using equity method at the reporting date was as follows. These financial information are included in the consolidated financial statements.

Individually insignificant joint venture Attributable to the Group: Profit Other comprehensive income Total comprehensive income	December 31, 2019 $ - For the Years Ended December 31, 2019 $ 623 - $ 623

Before August 2019, the Group and the other shareholder held 49% and 51%, respectively, of the joint venture Excelsior Asset Management Co., Ltd. that is not individually significant.

Under the shareholders’ agreement, the Group and the other shareholder have the power to appoint two and three, respectively, of the five directors of Excelsior Asset Management Co., Ltd. Significant matters should be decided by more than two-thirds of directors present in the meeting, and the directors present in the meeting should be more than two-thirds of all directors. Therefore, the Group and the other shareholders of the joint venture have joint control over Excelsior Asset Management Co., Ltd., which the Group acquired its entire shares and gained control over it on August 2, 2019.

As of December 31, 2020 and 2019, the Group did not provide any investments accounted for using the equity method as collateral.

(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.

A part of ordinary shares issued for cash by the Group are available for subscription to employees of its subsidiaries. The changes in ownership interests in subsidiaries were recognized as capital surplus amounting to $957 thousand for the year ended December 31, 2019. For relevant information on share-based payment, please refer to Note (6)(x).

184

(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, 2020 AND 2019

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

(i) Material non-controlling interests of subsidiaries

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

Subsidiaries	Main operating location/ Registered Country of the Company	Proportion of shareholding and voting rights December 31, 2020 December 31, 2019 61.50% 61.50% 60.00% 60.50%
		December 31, 2020
Dynamic Arich	Taiwan Taiwan

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 Operating revenue Net income Other comprehensive loss Total comprehensive income Profit, attributable to non-controlling interests Comprehensive income, attributable to non-controlling interests	December 31, 2020 $ 1,537,172 605,663 (555,670) (123,968)
	$ 1,463,197
	$ 798,341
	2020 $ 1,009,308
	$ 116,642 (7,023)
	$ 109,619
	$ 69,215
	$ 65,286

185

(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, 2020 AND 2019

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

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 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, 2020 2019 $ 248,551 266,957 17,288 (312,053) (151,443) (137,917) (10,721) (4,646) $ 103,675 (187,659) $ 63,366 59,549 December 31, 2020 December 31, 2019 $ 3,399,123 3,306,348 548,687 451,658 (2,018,533) (2,443,440) (148,573) (51,871) $ 1,780,704 1,262,695 $ 1,068,400 763,776 For the Years Ended December 31, 2020 2019 $ 1,251,395 1,112,150 $ 47,249 60,628 62,295 38,836 $ 109,544 99,464 $ 28,421 36,672 $ 65,554 60,163 For the Years Ended December 31, 2020 2019 $ 559,557 564,438 (47,868) (40,175) (267,786) (436,946) $ 243,903 87,317 $ 26,745 28,003
	2020 $ 559,557 (47,868) (267,786)
	$ 243,903
	$ 26,745

186

(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, 2020 AND 2019

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

(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, 2020 and 2019 were as follows:

Land $ 147,595 - - - - - (2,486)	Buildings 268,045 543 (392) - - - (5,853)	Medical equipment 328,795 18,151 (22,979) 30,891 (15,592) - (2,028)	Miscellaneous equipment 322,307 9,431 (34,412) 11,264 (11,628) (400) (1,473)	Equipment to be inspected and construction in progress - 286 - - - - -	Total 1,066,742 28,411 (57,783) 42,155 (27,220) (400) (11,840)
$ 145,109	262,343	337,238	295,089	286	1,040,065
$ 75,758 73,564 - - - - - (1,727)	98,943 173,167 - - - - - (4,065)	257,705 63,049 22,439 (10,893) 35,239 (16,333) (20,186) (2,225)	251,331 92,115 28,836 (41,009) 17,536 (24,409) (1,180) (913)	7,524 2,476 - - - - (10,000) -	691,261 404,371 51,275 (51,902) 52,775 (40,742) (31,366) (8,930)
$ 147,595	268,045	328,795	322,307	-	1,066,742
$ 4,000 - - - - -	72,017 4,999 - (392) - (1,028)	199,532 42,756 2,567 (22,680) (12,658) (1,844)	230,330 32,892 1,715 (34,326) (10,827) (1,327)	- - - - - -	505,879 80,647 4,282 (57,398) (23,485) (4,199)
$ 4,000	75,596	207,673	218,457	-	505,726
$ 4,000 - - - - - - -	39,025 29,550 4,166 - - - - (724)	154,011 54,226 41,905 (202) (9,774) (14,101) (24,455) (2,078)	207,880 52,733 27,331 714 (40,294) (16,304) (923) (807)	- - - - - - - -	404,916 136,509 73,402 512 (50,068) (30,405) (25,378) (3,609)
$ 4,000	72,017	199,532	230,330	-	505,879

187

(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, 2020 AND 2019

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

Carrying amount: Balance as of December 31, 2020 Balance as of January 1, 2019 Balance as of December 31, 2019	Land $ 141,109	Buildings 186,747	Medical equipment 129,565	Miscellaneous equipment 76,632	Equipment to be inspected and construction in progress 286	Total 534,339
	$ 71,758	59,918	103,694	43,451	7,524	286,345
	$ 143,595	196,028	129,263	91,977	-	560,863

For information on the Group’s acquisition of property, plant and equipment through business combination, please refer to Note (6)(h) of the consolidated financial statements for the year ended December 31, 2019.

As of December 31, 2020 and 2019, 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:

Buildings $ 314,047 159,298 (21,421) (139)	Machinery and equipment 1,065 - - -	Other equipment 1,440 - - -	Total 316,552 159,298 (21,421) (139)
$ 451,785	1,065	1,440	454,290
$ 344,316 71,130 4,883 (68,792) (37,429) (61)	741 - 324 - - -	1,440 - - - - -	346,497 71,130 5,207 (68,792) (37,429) (61)
$ 314,047	1,065	1,440	316,552

188

(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, 2020 AND 2019

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

Buildings $ 76,046 76,717 (740) (57)	Machinery and equipment 383 529 - -	Other equipment 1,152 288 - -	Total 77,581 77,534 (740) (57)
$ 151,966	912	1,440	154,318
$ - 10,864 76,378 (9,730) (1,360) (106)	- - 383 - - -	- - 1,152 - - -	- 10,864 77,913 (9,730) (1,360) (106)
$ 76,046	383	1,152	77,581
$ 299,819	153	-	299,972
$ 344,316	741	1,440	346,497
$ 238,001	682	288	238,971

For information on the Group’s acquisition of right-of-use assets through business combination, please refer to Note (6)(h) of the consolidated financial statements for the year ended December 31, 2019.

The Group added and modified parts of the lease contracts, resulting in an increase in right-of-use assets of $159,298 thousand and $5,207 thousand for the years ended December 31, 2020 and 2019, respectively.

The Group terminated and modified parts of the lease contracts, resulting in a decrease in right-of-use assets of $20,681 thousand and $59,062 thousand for the years ended December 31, 2020 and 2019, respectively.

For the years ended December 31, 2020 and 2019, the Group leases storage room, machinery and parking space under operating lease, please refer to Note (6)(t).

189

(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, 2020 AND 2019

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

(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, 2020 Addition Balance as of December 31, 2020 Balance as of January 1, 2019 Acquisition through business combination Others Balance as of December 31, 2019 Depreciation and impairment losses: Balance as of January 1, 2020 Depreciation for the year Balance as of December 31, 2020 Balance as of January 1, 2019 Acquisition through business combination Depreciation for the year Others Balance as of December 31, 2019 Book value: Balance as of December 31, 2020 Balance as of January 1, 2019 Balance as of December 31, 2019 Fair Value: Balance as of December 31, 2020 Balance as of December 31, 2019	Owned property Land Buildings $ 688,419 109,032 155,331 65,641	Owned property Land Buildings $ 688,419 109,032 155,331 65,641
	Land $ 688,419 155,331
	$ 843,750	174,673
	$ 130,969 324,234 233,216	89,676 66,351 (46,995)
	$ 688,419	109,032
	$ - -	8,823 4,510
	$ -	13,333
	$ - - - -	26,436 7,462 3,286 (28,361)
	$ -	8,823
	$ 843,750	161,340
	$ 130,969	63,240
	$ 688,419	100,209

190

(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, 2020 AND 2019

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

In November 2015, the Group entered into a repurchase agreement with Excelsior Asset Management Co., Ltd. (“ Excelsior Asset” ) regarding the real estate in Taichung. Due to the characteristics of the repurchase agreement, the real estate transaction was considered as financing, in which the proceeds from the transaction was accounted for as debt and asset by the Group and Excelsior Asset. The real estate was recognized without any profit or loss. In August 2019, the Group acquired all shares of Excelsior Asset and signed an agreement of repurchase abandonment, wherein the net liability and asset from the transaction were reclassified to investment property.

For information on the Group’s acquisition of investment property through business combination, please refer to Note (6)(h) of the consolidated financial statements for the year ended December 31, 2019.

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, 2020 and 2019, the investment property of the Group had been pledged as collateral for bank borrowings, please refer to Note (8).

(m) Intangible assets

The costs, amortization and impairment of the intangible assets of the Group for the years ended December 31, 2020 and 2019, were as follows:

Goodwill $ 56,044 - - 153	Software 13,132 4,317 (2,129) 3	Other intangible assets 79,335 - (1,632) -
$ 56,197	15,323	77,703
$ 46,131 - 10,699 - (786)	13,236 727 - (818) (13)	79,335 - - - -
$ 56,044	13,132	79,335

191

(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, 2020 AND 2019

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

Goodwill $ 27,933 - - 413	Software 10,831 2,661 (2,129) 5	Other intangible assets 77,780 708 (1,632) -
$ 28,346	11,368	76,856
$ 12,926 - 15,712 - (705)	9,225 2,366 - (749) (11)	76,966 814 - - -
$ 27,933	10,831	77,780
$ 27,851	3,955	847
$ 33,205	4,011	2,369
$ 28,111	2,301	1,555

1.Amortization

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

income items:
Operating costs Operating expenses Total	For the Years Ended December 31, 2020 2019 $ 708 814 2,661 2,366 $ 3,369 3,180
	2020 $ 708 2,661
	$ 3,369

2.For information on the Group’s acquisition of intangible assets through business combination, please refer to Note (6)(h) of the consolidated financial statements for the year ended December 31, 2019.

192

(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, 2020 AND 2019

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

(n) Short-term borrowings

Secured bank loans Unsecured bank loans Total Unused short-term credit lines Range of interest rates	December 31, 2020 $ 262,498 142,000	December 31, 2020 $ 262,498 142,000	December 31, 2019 10,000 1,202,967 1,212,967 4,180,447 0.96%~3.65%
	$ 404,498
	$ 5,371,723
		0.85%~1.70%

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)(ad).

(o) Other payables

Logistics services payable Others Refund liabilities Refund liabilities	December 31, 2020 $ 1,528,734 472,615	December 31, 2019 1,300,798 508,973 1,809,771 December 31, 2019 28,146
	$ 2,001,349
	December 31, 2020 $ 30,438

(p) Refund liabilities

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.

(q) Provisions

Warranties Balance as of January 1, 2020 Additions Provisions reversed or used Effect of exchange rate changes Balance as of December 31, 2020	December 31, 2020 $ 15,104	December 31, 2020 $ 15,104

193

(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, 2020 AND 2019

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

Balance as of January 1, 2019 Additions Provisions reversed or used Effect of exchange rate changes Balance as of December 31, 2019	Warranties $ 17,237 17,348 (18,001) (2)
	$ 16,582

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)	December 31, 2019 8,699 (8,055)
	$ -	644
	4.45%~5.45%	5.50%~6.20%

1.There were no significant issuances, repurchases and repayments of long-term borrowing in 2020 and 2019.
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)(ad).
(s) Lease liabilities

The carrying amounts of lease liabilities were as follows:

Current Non-current	December 31, 2020 $ 78,369	December 31, 2019 77,418
	$ 225,457	163,791

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

194

(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, 2020 AND 2019

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

There were no significant issuances, repurchases and repayments of lease liabilities in 2020 and 2019.

The Group added and modified parts of the lease contract, resulting in an increase in lease liabilities of $159,080 thousand and $5,207 thousand for the years ended December 31, 2020 and 2019, respectively.

The Group terminated and modified parts of the contract, resulting in a decrease in lease liabilities of $20,792 thousand and $61,582 thousand for the years ended December 31, 2020 and 2019, respectively.

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 Expenses relating to leases of low-value, excluding short-term leases of low-value assets	For the Years Ended December 31, 2020 2019 $ 3,305 5,114	For the Years Ended December 31, 2020 2019 $ 3,305 5,114
	2020 $ 3,305
	$ 4,897	5,518
	$ 7,564	9,806
	$ -	42

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, 2020 2019 $ 86,468 86,187
	2020 $ 86,468

1. Buildings leases

As of December 31, 2020, 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).

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.

195

(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, 2020 AND 2019

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

(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, 2020 $ 28,186 37,327 -	December 31, 2019 32,025 50,242 4,440 86,707
	$ 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, 2020 $ 106,766 (98,132)	December 31, 2019 100,419 (89,300) 11,119
	$ 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.

The Group’s Bank of Taiwan labor pension reserve account balance amounted to $98,005 thousand as of December 31, 2020. 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.

196

(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, 2020 AND 2019

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

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 Defined benefit obligations as of December 31	For the Years Ended December 31, 2020 2019 $ 100,419 105,174 4,174 6,999 (2,713) (11,005) 814 571 4,065 2,857 7 19 - (4,196)	For the Years Ended December 31, 2020 2019 $ 100,419 105,174 4,174 6,999 (2,713) (11,005) 814 571 4,065 2,857 7 19 - (4,196)
	2020 $ 100,419 4,174 (2,713) 814 4,065 7 -
	$ 106,766	100,419

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, 2020 2019 $ 89,300 85,855 732 1,004 2,847 2,814 5,256 3,821 (3) 2 - (4,196)	For the Years Ended December 31, 2020 2019 $ 89,300 85,855 732 1,004 2,847 2,814 5,256 3,821 (3) 2 - (4,196)
	2020 $ 89,300 732 2,847 5,256 (3) -
	$ 98,132	89,300

197

(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, 2020 AND 2019

(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, 2020 2019 $ 3,416 5,696 26 299	For the Years Ended December 31, 2020 2019 $ 3,416 5,696 26 299
	2020 $ 3,416 26
	$ 3,442	5,995
	$ 3,442	5,995

5) Actuarial assumptions

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

Discount rate Future salary increasing rate	December 31, 2020 0.350%% 2.125%~3.750%	December 31, 2019
		0.800%~5.220% 2.125%~5.000%

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 $2,178 thousand.

The weighted average lifetime of the defined benefits plans is 11~14 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, 2020 Discount rate Future salary increasing rate December 31, 2019 Discount rate Future salary increasing rate	Influences on defined benefit obligations	Influences on defined benefit obligations
	Increased 0.25% and EG Healthcare Increased 1.00% $ (2,336) 2,303 $ (2,667) 2,715	Decreased 0.25% and EG Healthcare Decreased 1.00%
		2,378 (2,239) 2,842 (2,567)

198

(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, 2020 AND 2019

(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 2020 and 2019.

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 $19,980 thousand and $19,346 thousand for the years ended December 31, 2020 and 2019, respectively.

The foreign Company’s pension costs under the local laws were $2,208 thousand and $4,361 thousand for the years ended December 31, 2020 and 2019, respectively.

(v) Income taxes
1.Income tax expense

The components of income tax in the years 2020 and 2019 were as follows:

	For	the Years Ended	December 31,
		2020	2019
Current tax expense
Current period	$	95,616	119,243
Adjustment for prior periods		(1,675)	(660)
		93,941	118,583
Deferred tax expense
Origination and reversal of temporary differences		65,716	7,927
Adjustment for prior periods		491	52
Change in unrecognized deductible temporary differences		149	(2,011)
		66,356	5,968
Income tax expense from continuing operations	$	160,297	124,551

199

(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, 2020 AND 2019

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

The amount of income tax recognized in other comprehensive income for 2020 and 2019 were as follows:

For the Years Ended December 31, 2020 2019 Items that will not be reclassified subsequently to profit or loss: Remeasurement from defined benefit plans $ 394 (1,596) Unrealized gains (losses) on equity instruments at fair value through other comprehensive income (4,150) 6,370 $ (3,756) 4,774 Items that may be reclassified subsequently to profit or loss: Exchange differences on translation $ 24,206 12,174 Reconciliation of income tax and profit before tax for 2020 and 2019 were as follows: For the Years Ended December 31, 2020 2019 Profit before income tax $ 829,383 746,825 Income tax using the Group’s domestic tax rate $ 186,929 156,262 Adjustment in tax rate (858) (577) Permanent differences (29,548) (41,117) Tax-exempt income (317) (517) Unrecognized deductible temporary differences (4,319) (14,740) Unrecognized unused loss carryforwards 7,370 10,113 Adjustments for prior periods-current tax expense (1,675) (660) Adjustments for prior periods-deferred tax expense 491 52 Effect of foreign income tax 1,212 - Undistributed earnings additional tax 1,012 15,735 Income tax expense $ 160,297 124,551	For the Years Ended December 31, 2020 2019 $ 394 (1,596) (4,150) 6,370	For the Years Ended December 31, 2020 2019 $ 394 (1,596) (4,150) 6,370
	2020 $ 394 (4,150)
	$ (3,756)	4,774
		12,174
	2020 $ 829,383
	$ 186,929 (858) (29,548) (317) (4,319) 7,370 (1,675) 491 1,212 1,012	156,262 (577) (41,117) (517) (14,740) 10,113 (660) 52 - 15,735
	$ 160,297	124,551

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, 2020 $ 20,594 85,311	December 31, 2019 25,228 78,854 104,082
	$ 105,905

200

(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, 2020 AND 2019

(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, 2020 and 2019 were as follows:

Deferred sales returns and allowance	Unrealized losses on inventories	Unrealized gains on investment	Loss carry-forw ards	Others	Total
$ 7,183 4,090 - -	31,289 (8,416) - (128)	25,368 (2,055) - -	59,520 (15,462) - (75)	96,568 (6,615) 24,222 (4)	219,928 (28,458) 24,222 (207)
$ 11,273	22,745	23,313	43,983	114,171	215,485
$ 6,768 415 - -	23,797 7,543 - (51)	21,638 3,730 - -	65,026 (5,475) - (31)	81,484 5,413 9,671 -	198,713 11,626 9,671 (82)
$ 7,183	31,289	25,368	59,520	96,568	219,928
$ - - - -	- - - -	106,425 32,660 - -	- - - -	9,305 5,238 3,772 (440)	115,730 37,898 3,772 (440)
$ -	-	139,085	-	17,875	156,960
$ - - - -	- - - -	82,724 23,701 - -	- - - -	22,829 (6,107) (7,277) (140)	105,553 17,594 (7,277) (140)
$ -	-	106,425	-	9,305	115,730

201

(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, 2020 AND 2019

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

3.As of December 31, 2020, 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	Unused tax loss $ 14,049 46,631 15,107 107,415 165,170 178,623 32,818 $ 559,813	Year of expiry
		2024 2020~2025 2021~2026 2022~2027 2023~2028 2024~2029 2025~2030

4.Assessment of tax

The Company’s income tax returns for the years through 2018 were assessed by the Tax Administration.

(w) Capital and other equity

A resolution was passed by the Board of the Comapny on November 7, 2019, for issuance of 130,000 thousand shares, with a par value of $10 per share. The issuance price is $45. A part of shares are reserved for employees. For relative information, please refer to Note (6)(x). The issuance has been approved by the Securities and Futures Bureau of the Financial Supervisory Commission, R.O.C., with January 15, 2020, as the date of capital increase. The related registration procedures were completed, and all issued shares were paid up upon issuance.

1.Share capital

Number of shares authorized (in thousands) Shares authorized Number of shares issued and fully paid (in thousands) Shares issued	December 31, 2020 200,000	December 31, 2019 200,000
	$ 2,000,000	2,000,000
	141,149	128,149
	$ 1,411,490	1,281,490

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.

202

(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, 2020 AND 2019

(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, 2020 $ 1,822,584 1,072,079 98,181 238,946 457 43,860	December 31, 2019 1,367,584 1,072,079 98,181 234,979 124 43,860 2,816,807
	$ 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.

Items referred to under Rule No. 1010012865 issued by the FSC and the directive titled “Questions and Answers for Special Reserves Appropriated Following Adoption of IFRSs” should be appropriated to or reversed from a special reserve by the Company.

203

(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, 2020 AND 2019

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

During the Board meeting on March 20, 2020, and the shareholders’ meeting on June 18, 2019, the Board and shareholders approved to distribute the 2019 and 2018 earnings, respectively, as follows:

follows:
Dividends distributed to common shareholders Cash	2019 Dividend per share ($) Amount $ 3.30 465,792	2018 Dividend per share ($) Amount 3.30 384,447
	Dividend per share ($)	Dividend per share ($)
	$ 3.30	3.30

During the Board meeting on March 12, 2021, the Board approved the cash dividend to distribution of the 2020 earnings, as follows:

Dividends distributed to common shareholders: Cash	2020 Dividend per share ($) Amount $ 3.50 494,021	2020 Dividend per share ($) Amount $ 3.50 494,021
	Dividend per share ($)
	$ 3.50

4.Other equity interest after tax

Exchange differences on translation of foreign financial statements $ (107,903) (138,342) 46,876 - - -	Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income 51,554 - - 4,723 29,313 (301)	Total
		(56,349) (138,342) 46,876 4,723 29,313 (301)
$ (199,369)	85,289	(114,080)
$ (61,536) (77,682) 31,315 - - -	34,907 - - 16,142 35,101 (34,596)	(26,629) (77,682) 31,315 16,142 35,101 (34,596)
$ (107,903)	51,554	(56,349)

204

(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, 2020 AND 2019

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

5.Non-controlling interests after tax

For the Years Ended December 31, 2020 2019 Balance, beginning of year $ 1,685,571 1,535,562 Shares attributed to non-controlling interests Net income 97,416 107,519 Exchange differences on translation of foreign financial statements (8,475) (4,493) Unrealized gains or losses from financial assets measured at fair value through other comprehensive income 38,979 16,535 Gains or losses on remeasurements of defined benefit plans (426) 3,566 Shares issued for cash by subsidiaries / others 269,259 - Cash dividends of subsidiaries distributed to non-controlling interests (90,111) (87,552) Non-controlling interests of acquiring subsidiaries (3,406) 113,049 Equity value differences of subsidiaries under equity method - 1,385 Balance, end of year $ 1,988,807 1,685,571	For the Years Ended December 31,	For the Years Ended December 31,
		2019 1,535,562 107,519 (4,493) 16,535 3,566 - (87,552) 113,049 1,385
	$ 1,988,807	1,685,571

(x) Share-based payment
1.The Company

As of December 31, 2020, the Group had share-based payment arrangements as follows:

Grant date Number of shares granted Contract term Recipients Vesting conditions	Equity-settled
	Cash capital increase reserved for employee subscription
	2019.12.18 1,950,000 shares - Employees of the Company and a part of subsidiaries -

205

(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, 2020 AND 2019

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

1) Determining the fair value of equity instruments granted

The Group used Black-Scholes Model in measuring the fair value of the share-based payment at the grant date. The measurement inputs were as follows:

Fair value at grant date Share price at grant date Exercise price Expected volatility (%) Expected life (years) Expected dividend Risk-free interest rate (%)	2019 Cash capital increase reserved for employee subscription $ 8.72 53.70 45.00 9.83% 0.04 - % 0.60%

Expected volatility is based on the weighted average of historical volatility. The Company determined that there were no expected dividends. The risk-free rate is determined based on the rate of 1-3 month time deposits of Bank of Taiwan on the date of measurement. Service and non-market performance conditions attached to the transactions are not considered in determining the fair value.

2) Expense recognized in profit or loss

The Company incurred expenses and liabilities of share-based arrangements in 2020 and 2019 as follows:

Expenses resulting from cash-settled share-based payment to employees	For the Years Ended December 31, 2020 2019 $ - 3,322	For the Years Ended December 31, 2020 2019 $ - 3,322
	2020 $ -

206

(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, 2020 AND 2019

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

2.Arich

As of December 31, 2020, Arich had share-based payment arrangements as follows:

Grant date Number of shares granted Contract term Recipients Vesting conditions	Equity-settled
	Cash capital increase reserved for employee subscription
	2020.4.9 3,000,000 shares - Employees of Arich Enterprise Co., LTD. -

1) Determining the fair value of equity instruments granted

Arich used Black-Scholes Model in measuring the fair value of the share-based payment at the grant date. The measurement inputs were as follows:

Fair value at grant date Share price at grant date Exercise price Expected volatility (%) Expected life (years) Expected dividend Risk-free interest rate (%)	2020 Cash capital increase reserved for employee subscription $ 4.89 19.80 15.00 71.969% 0.04 - % 0.35%

Expected volatility is based on the weighted average of historical volatility. Arich determined that there were no expected dividends. The risk-free rate is determined based on the rate of 1-3 month time deposits of Bank of Taiwan on the date of measurement. Service and non-market performance conditions attached to the transactions are not considered in determining the fair value.

207

(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, 2020 AND 2019

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

2) Expense recognized in profit or loss

Arich incurred expenses and liabilities of share-based arrangements in 2020 as follows:

For the Year Ended December 31, 2020 Expenses resulting from cash-settled share-based payment to employees $ 4,152

(y) Earnings per share

For the years ended December 31, 2020 and 2019, 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) 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, 2020 2019 $ 571,670 514,755 140,652 128,149 For the Years Ended December 31, 2020 2019 $ 571,670 514,755 140,652 128,149 767 729 141,419 128,878
	2020 $ 571,670
	140,652 767
	141,419

2.Diluted earnings per share

(z) Revenue from contracts with customers
1.Disaggregation of revenue

Primary geographical markets: Taiwan Hong Kong China Philippines Malaysia	For the Years Ended December 31, 2020 2019 $ 6,351,482 6,106,927 71,858 73,017 130 70,911 136,218 110,772 115,806 95,735 $ 6,675,494 6,457,362
	2020 $ 6,351,482 71,858 130 136,218 115,806
	$ 6,675,494

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EXCELSIOR MEDICAL CO., LTD. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

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

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, 2020 2019 $ 3,833,073 3,608,106 1,108,050 958,838 799,957 992,944 119,381 106,011 78,279 62,281 359,575 246,283 377,179 482,899 $ 6,675,494 6,457,362
	2020 $ 3,833,073 1,108,050 799,957 119,381 78,279 359,575 377,179
	$ 6,675,494

(aa) 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, 2020 and 2019, the Company estimated its employee compensation amounting to $36,379 thousand and $32,365 thousand, and directors’ remuneration amounting to $18,189 thousand and $16,183 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 2020 and 2019. 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.

(ab) Non-operating income and expenses

1.Interest Income

The details of other income were as follows:

Interest income from bank deposits Interest income from lease payment receivable	For the Years Ended December 31, 2020 2019 $ 22,097 42,739 1,158 1,899 $ 23,255 44,638
	2020 $ 22,097 1,158
	$ 23,255

209

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EXCELSIOR MEDICAL CO., LTD. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

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

2.Other income

The details of other income were as follows:

Dividend income Other income	For the Years Ended December 31, 2020 2019 $ 23,231 15,424 9,017 11,221 $ 32,248 26,645
	2020 $ 23,231 9,017
	$ 32,248

3.Financial costs

The details of financial costs were as follows:

Interest expenses Bank borrowings Others	For the Years Ended December 31, 2020 2019 $ 7,439 14,574 3,329 9,246 $ 10,768 23,820
	2020 $ 7,439 3,329
	$ 10,768

4.Other gains and losses

The details of other gains and losses were as follows:

(Losses) gains on disposal of property, plant, and equipment Gain on disposal of subsidiaries Foreign exchange gains (losses) Net gains or losses on financial assets (liabilities) measured at fair value through profit or loss Impairment loss recognized on non-financial assets Others	For the Years Ended December 31, 2020 2019 $ (100) 52,061 - 13,167 935 (2,708) (200) 32 - (30,285) 12,915 12,739 $ 13,550 45,006
	2020 $ (100) - 935 (200) - 12,915
	$ 13,550

(ac) Reclassification adjustments of components of other comprehensive income

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

		For the Years Ended	December 31,
		2020	2019
Equity instruments at fair value through other comprehensive income
Net changes in fair value	$	47,551	(8,289)
Net changes of fair value reclassified to retained earnings		301	34,596
Net gains or losses recognized in other comprehensive income	$	47,852	26,307

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EXCELSIOR MEDICAL CO., LTD. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

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

(ad) Financial instruments
Credit risks
1) Credit risk exposure

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

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, 2020 and 2019, 43% and 39%, respectively, of notes receivable and accounts receivable were two major 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:

Carrying amount	Contractual cash flow	On Demand or Less than 1 month	1-3 months	3-6 months	6-12 months	1-2years	More than 2years
$ 408,749 2,883,615 303,826 11,404 (11,358)	408,749 2,883,615 303,826 11,404 (11,358)	235,706 765,588 6,827 11,404 (11,358)	170,917 397,987 13,230 - -	2,126 1,648,940 19,556 - -	- 70,911 38,756 - -	- 189 67,863 - -	- - 157,594 - -
$ 3,596,236	3,596,236	1,008,167	582,134	1,670,622	109,667	68,052	157,594
$ 1,221,666 2,869,049 241,209	1,221,666 2,869,049 241,209	1,213,638 1,127,010 6,476	1,343 268,280 13,064	2,014 1,458,313 19,305	4,027 13,309 38,573	644 2,137 63,047	- - 100,744
$ 4,331,924	4,331,924	2,347,124	282,687	1,479,632	55,909	65,828	100,744

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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EXCELSIOR MEDICAL CO., LTD. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

(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:

Functional currency	Functional currency	Currency	December 31, 2020 Foreign currency (inthousands) 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 December 31, 2019 Foreign currency (inthousands) Carrying amount (TWD) $ 8,731 261,756 799,552 220,676 7,795 60,716 5,126,917 134,325 28,878 124,320 103,629 398,867 18,505 130,143
Financial assets Monetary items TWD 28.480 TWD 0.276 HKD 7.754 Non-Monetary items TWD 0.026 USD 0.154 USD 0.129 USD 0.238 Financial liabilities Monetary items TWD 0.276 Functional currency Exchange rate		USD JPY USD KRW CNY HKD MYR JPY Currency

	TWD Functional currency
			Foreign currency (inthousands) $ 8,731 799,552 7,795 5,126,917 28,878 103,629 18,505
Financial assets Monetary items TWD 29.980 TWD 0.276 HKD 7.789 Non-Monetary items TWD 0.026 USD 0.144 USD 0.128 USD 0.235		USD JPY USD KRW CNY HKD MYR

212

(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, 2020 AND 2019

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

Functional currency	Functional currency	Exchange rate	Currency	December 31, 2019 Foreign currency (inthousands) Carrying amount (TWD) 431,975 119,170
				Foreign currency (inthousands) 431,975
Financial liabilities Monetary items TWD		0.276	JPY

	TWD

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, 2020 and 2019, foreign exchange gains or losses amounted to gains of $935 thousand and losses of $2,708 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, 2020 and 2019 would have increased or decreased the net profit after tax by $2,721 thousand and $3,577 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 $7,609 thousand and $1,015 thousand for the years ended December 31, 2020 and 2019, respectively. The changes are mainly due to floating rate bank deposits and borrowings of the Group.

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, 2020 and 2019 would have increased/decreased by $7,354 thousand and $6,901 thousand, respectively, as a result of the changes in fair values of financial assets at fair value through other comprehensive income.

213

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EXCELSIOR MEDICAL CO., LTD. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

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

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:

	December 31, 2020	December 31, 2020	December 31, 2020	Total 166
Book value $ 166		Fair value
	Level 1 -	Level 2 166	Level 3 -
	103,792 194,205 - -	- - - -	- - 129,680 307,760	103,792 194,205 129,680 307,760
735,437	297,997	-	437,440	735,437
2,618,464 774,526 3,951,745 305,798	- - - -	- - - -	- - - -	- - - -
7,650,533	-	-	-	-
$ 8,386,136	297,997	166	437,440	735,603

214

(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, 2020 AND 2019

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

	December 31, 2020	December 31, 2020	December 31, 2020	Total 46
Book value $ 46		Fair value
	Level 1 -	Level 2 46	Level 3 -
408,749 2,883,615 303,826	- - -	- - -	- - -	- - -
3,596,190	-	-	-	-
$ 3,596,236	-	46	-	46
	December 31, 2019			Total 115,303 174,161 153,089 247,532
		Fair value
	Level 1 115,303 39,895 - -	Level 2 - - - -	Level 3 - 134,266 153,089 247,532
690,085	155,198	-	534,887	690,085
2,828,776 524,614 4,267,215 262,480	- - - -	- - - -	- - - -	- - - -
7,883,085	-	-	-	-
$ 8,573,170	155,198	-	534,887	690,085

215

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EXCELSIOR MEDICAL CO., LTD. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

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

	December 31, 2019	December 31, 2019	December 31, 2019
Book value $ 1,221,666 2,869,049 241,209		Fair value		Total - - -
	Level 1 - - -	Level 2 - - -	Level 3 - - -
$ 4,331,924	-	-	-	-

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, non-active 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.

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.

216

(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, 2020 AND 2019

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

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, 2020 Total gains and losses recognized In other comprehensive income Reclassification and effect of movements in exchange rates Balance as of December 31, 2020 Balance as of January 1, 2019 Total gains and losses recognized In profit or loss In other comprehensive income Reclassification and effect of movements in exchange rates Balance as of December 31, 2019	Financial assets at fair value through profit or loss	Fair value through other comprehensive income unquoted equity instruments 534,887 18,942 (116,389)
	Derivative financial assets
	$ - - -
	$ -	437,440
	$ 21 (21) - -	361,495 - (14,209) 187,601
	$ -	534,887

For the years ended December 31, 2020 and 2019, 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:

	For the Years Ended	December	31,
	2020	2019
Total gains and losses recognized
In profit or loss, and presented in“other gains and losses”$	-		(21)
In other comprehensive income, and presented in	18,942	(14,209)
“unrealized gains and losses from financial assets at fair
value through other comprehensive income”

217

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EXCELSIOR MEDICAL CO., LTD. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

(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 fairvalue
Financial assets at fair value through other comprehensive income - equity instruments investments without an active market	Comparable Listed Companies Method	‧ EV/Revenue Value Multiple (1.94~2.26 and 1.71 on December 31, 2020 and 2019) ‧ EV/EBITA Value Multiple (14.95 on December 31, 2019) ‧ P/B Value Multiple (1.13~3.98 and 1.11~4.05 on December 31, 2020 and 2019) ‧ P/E Value Multiple (28.36 on December 31, 2019) ‧ Discount due to Lack of Market liquidity (21.53%~30.00% and 6.45%~33.53% on December 31, 2020 amd 2019)	‧ The estimated fair value would increase (decrease) if the value multiple is higher (lower) and the marketability discount is lower (higher)

218

(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, 2020 AND 2019

(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:

Input	Variation	Impact on Fair Value Change on Other Comprehensive income or loss Favorable Change Unfavorable Change $ 22,973 (22,973) 30,951 (30,951)	Impact on Fair Value Change on Other Comprehensive income or loss Favorable Change Unfavorable Change $ 22,973 (22,973) 30,951 (30,951)
		Favorable Change
Value Multiple Discount due to Lack of Market liquidity Value Multiple Discount due to Lack of Market liquidity	5% 5% 5% 5%	$ 22,973 30,951
		$ 53,924	(53,924)
		$ 58,032 19,677	(58,032) (19,677)
		$ 77,709	(77,709)

(ae) 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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EXCELSIOR MEDICAL CO., LTD. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

(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, 2020.

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.

220

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EXCELSIOR MEDICAL CO., LTD. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

(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.

(af) 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.

221

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EXCELSIOR MEDICAL CO., LTD. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

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

(ag) 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, 2020 and 2019, 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, 2020 Cash flows $ 1,221,666 (812,917) 241,209 (75,599)	Non-cash changes Acquisition Foreign exchange movement Others December 31, 2020 - - - 408,749 159,080 (72) (20,792) 303,826
	$ 1,462,875 (888,516)	159,080 (72) (20,792) 712,575
	January 1, 2019 Cash flows $ 1,110,000 (323,740) 342,713 (71,225)	Non-cash changes Acquisition Foreign exchange movement Others December 31, 2019 435,630 (224) - 1,221,666 5,207 1,331 (36,817) 241,209
	$ 1,452,713 (394,965)	440,837 1,107 (36,817) 1,462,875

(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.

Name of related party
Excelsior Investment Co., Ltd.
Excelsior Group Holdings Co., Ltd.
Jiate Excesior Co., Ltd. (Jiate)
Bestchain Healthtaiwan Co., Ltd. (Bestchain)
Visionfront Corporation
Sunrise Health Care Company
Excelsior Renal Service Co., Limited (ERS)
Asia Best Healthcare Co., Limited (ABH)
Asia Best Healthcare Co., Ltd Taiwan Branch
Medifly Co., Ltd.
Asia Best Life Care Technology Co., Ltd.
Excelsior Long Term Care Corporation Entity

Relationship with the Group

Entities with significant influence over the Group
〞
Associate
〞
〞
〞
〞
〞
〞
〞
〞
〞

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EXCELSIOR MEDICAL CO., LTD. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

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

Name of related party Relationship with the Group Asia Best Biomedical Co., Ltd. Associate before December 25, 2019 CYJ INTERNATIONAL COMPANY Associate LIMITED (CYJ) Medytox Taiwan Inc. 〞 Arich Best Chain Co., Ltd.(Arich Best Chain) 〞 Exceed Healthcare Co., Ltd. 〞 CYJ International Taiwan Inc. (CYJ Taiwan) Associate before October 1, 2019 Excelsior Asset Management Co., Ltd. Joint venture before August 2, 2019 (Excelsior Asset) Hung Shun Chen Investment Co., Ltd. Other related parties SciVision Biotech Inc. 〞 Excelsior Health Foundation 〞 Caregen Co., Ltd. 〞 RENAL HEALTHCARE SDN. BHD. 〞 Triple AI Technology Co., Ltd. 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, 2020 2019 $ 1,789,712 1,596,110 762,596 726,854 23,688 47,951 373 -	For the Years Ended December 31, 2020 2019 $ 1,789,712 1,596,110 762,596 726,854 23,688 47,951 373 -
	2020 $ 1,789,712 762,596 23,688 373
	$ 2,576,369	2,370,915

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

223

(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, 2020 AND 2019

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

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 - Bestchain	For the Years Ended December 31, 2020 2019 $ 85,521 70,754 2,589 5,345	For the Years Ended December 31, 2020 2019 $ 85,521 70,754 2,589 5,345
	2020 $ 85,521 2,589
	$ 88,110	76,099

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 - CYJ Taiwan Associates -ABH Associates -ERS Associates - Others Joint venture - Excelsior Asset Other related parties	For the Years Ended December 31, 2020 2019 $ 72 72 - 3,848 12,720 5,916 4,704 3,141 950 1,001 - 3,224 96 47	For the Years Ended December 31, 2020 2019 $ 72 72 - 3,848 12,720 5,916 4,704 3,141 950 1,001 - 3,224 96 47
	2020 $ 72 - 12,720 4,704 950 - 96
	$ 18,542	17,249

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 Joint venture - Excelsior Asset Other related parties	For the Years Ended December 31, 2020 2019 $ 13,041 14,724 - 1,750 166 -	For the Years Ended December 31, 2020 2019 $ 13,041 14,724 - 1,750 166 -
	2020 $ 13,041 - 166
	$ 13,207	16,474

224

(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, 2020 AND 2019

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

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, 2020 2019 $ 9,059 15,197 108,825 84,260 $ 117,884 99,457
	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.

3.Receivables from related parties

Receivables from related parties were as follows:

Accounted for as Category of related party	December 31, 2020 December 31, 2019 $ 34 56 362 1,687 455,825 456,715 159,022 146,371 8,970 21,010 2,682 3,992 8 - $ 626,903 629,831
Notes receivable Associates Other notes receivable Associates Accounts receivable Associates - Bestchain Accounts receivable Associates - ERS Accounts receivable Associates - Others Other receivables Associates Other receivables Other related parties

4.Payables to related parties

Payables to related parties were as follows:

Accounted for as Category of related party	December 31, 2020 December 31, 2019 $ 4,674 3,484 10,968 13,503 10,460 7,986 $ 26,102 24,973
Accounts payable Associates Accounts payable Other related parties Other payables Associates

225

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EXCELSIOR MEDICAL CO., LTD. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

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

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, 2020 2019 Disposal price Gains (losses) from disposal Disposal price Gains (losses) from disposal $ 95 95 57 54	For the Years Ended December 31, 2020 2019 Disposal price Gains (losses) from disposal Disposal price Gains (losses) from disposal $ 95 95 57 54
	2020 Disposal price Gains (losses) from disposal $ 95 95
	Disposal price $ 95	Disposal price 57
Associates

In November 2015, the Group entered into a purchase agreement with Excelsior Asset Management Co., Ltd. regarding the real estate in Xizhi. The transaction of disposal has been completed, resulting in an unrealized profit of $51,898 thousand in January 2016. On August 2, 2019, the Group acquired the remaining 49% shares of Excelsior Asset, wherein it had been reclassified from unrealized to realized profit.

6.Guarantee

As of December 31, 2020 and 2019, the Group provided associates guarantees for loans. The credit limit of the guarantees were $661,200 thousand and $761,200 thousand, respectively, and the amount utilized were $76,000 thousand and $100,000 thousand, respectively.

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, 2020 and 2019, the Group recognized the amount of $2 thousand and $4 thousand as interest expense. As of December 31, 2020 and 2019, the balance of lease liabilities amounted to $139 thousand and $257 thousand, respectively.
2) In 2019, the Group rent the staff dormitory with RENAL HEALTHCARE SDN. BHD. A three-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 $484 thousand. For the years ended December 31, 2020 and 2019 the Group recognized the amount of $12 thousands and $21 thousand as interest expense. As of December 31, 2020 and 2019, the balance of lease liabilities amounted to $158 thousand and $320 thousand, respectively.

226

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EXCELSIOR MEDICAL CO., LTD. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

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

8.Others

Associates and Other related parties Other revenue-rental revenue Other revenue Cost of goods sold Fright and warehousing expenses Rent expense Other expense Joint venture Other revenue Rent expense Other expense	For the Years Ended December 31, 2020 2019 $ - 279 4,717 2,350 (381) - (48,318) (40,410) (1,043) (1,066) (19,109) (18,509) $ (64,134) (57,356) $ - 2 - (1,402) - (120) $ - (1,520)
	2020 $ - 4,717 (381) (48,318) (1,043) (19,109)
	$ (64,134)
	$ - - -
	$ -

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

As of December 31, 2020 and 2019, the Group had received collections in advance from associates for $1,000 thousand and $120 thousand, respectively.

The outstanding receivables from related parties are unsecured. For the years ended December 31, 2020 and 2019, no impairment loss was recognized for receivables from related parties.

The outstanding payables to related parties are unsecured.

(d) Key management personnel compensation

Key management personnel compensation comprised:

Short-term employee benefits Post-employment benefit Share-based payment	For the Years Ended December 31, 2020 2019 $ 80,052 80,322 1,462 906 978 2,974 $ 82,492 84,202
	2020 $ 80,052 1,462 978
	$ 82,492

227

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EXCELSIOR MEDICAL CO., LTD. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

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

(8) Pledged Assets

The carrying amount of pledged assets were as follows:

Pledged assets	Object	December 31, 2020 December 31, 2019 $ 181,570 90,815 173,612 159,165 97,822 204,612 929,196 - $ 1,382,200 454,592
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 〞

(9) Significant Commitments and Contingencies

(a) Unrecognized contractual commitments

As of December 31, 2020 and 2019, the unused letters of credit were $82,607 thousand and $77,772 thousand, respectively. The guarantee letters issued by banks for sales contract guarantee and purchase bid of hospital were $544,488 thousand and $691,766 thousand, respectively.
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.
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.
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.

228

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EXCELSIOR MEDICAL CO., LTD. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

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

(10) Losses Due to Major Disasters : None.

(11) Subsequent Events : None.

(12) Others

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

were as follows:
By function By item	For the Years Ended December 31, 2020			For the Years Ended December 31, 2019
	Operating cost	Operating expense	Total	Operating cost	Operating expense	Total
Employee benefits Salary Labor and health insurance Pension Others Depreciation Amortization	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	155,446 15,627 8,847 10,862 87,209 914	360,276 25,679 20,855 14,143 67,392 4,726	515,722 41,306 29,702 25,005 154,601 5,640

(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, 2020:

Fund financing to other parties: None.
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 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) Renal Laboratories Sdn Bhd (Note 4)	2 2 2 2 2 2	1,518,179 1,518,179 1,518,179 1,518,179 1,518,179 1,518,179	88,091 100,000 59,215 20,000 14,745 73,725	58,831 100,000 29,305 10,000 14,240 71,200	- 100,000 - 10,000 1,282 1,282	- - - - - -	0.78% 1.32% 0.39% 0.13% 0.19% 0.94%	7,590,897 7,590,897 7,590,897 7,590,897 7,590,897 7,590,897	Y Y Y Y Y Y

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EXCELSIOR MEDICAL CO., LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

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

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 1 2 3	The Company 〃 Dynamic Medical Technologies Inc. Excelsior Beauty Co., Ltd. Arich Enterprise Co., Ltd.	Excelsior Renal Service Co., Limited (Note 3) Bestchain Healthtaiwan Co., Ltd. (Note 3) Dynamic Medical Technologies (Hong Kong) Ltd. (Note 6) Dynamic Medical Technologies Inc. (Note 7) Taiwan Shionogi Inc. (Note 5)	1 1 2 3 1	762,596 1,788,061 258,186 66,377 171,415	- 861,200 59,970 1,000 -	- 661,200 54,682 - -	- 76,000 - - -	- - - - -	- % 8.71% 4.24% - % - %	7,590,897 7,590,897 645,465 165,942 890,352	Y	Y

Note 1: the description of number column:

0 is issuer.
Investees are listed by name and numbered starting with 1.
Note 2: Relationship with the Company
The companies with which it has business relations.
Subsidiaries in which the Company directly or indirectly holds more than 50% of its total outstanding common shares.
The parent company which directly or indirectly holds more than 50% of its voting rights.
Subsidiaries in which the Company directly or indirectly holds more than 90% of its voting rights.
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.
Shareholders making endorsements and/or guarantees for their mutually invested company in proportion to their shareholding percentage.
Companies in the same type of business providing guarantees of pre-sale contracts according to the regulation.
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.
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.
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.
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.
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.
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.
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. Missioncare Asset Management Co., Ltd. Rui Guang Healthcare Co., Ltd.	- - - - - - -	Fair value through other comprehensive income 〞〞〞〞〞〞	492,650 297,400 55,500 3,795,000 1,580,526 669,473 2,423,951	30,397 23,747 105,055 21,138 21,827 6,936 24,021	0.81% 0.71% 0.52% 17.25% 1.09% 1.05% 7.15%	30,397 23,747 105,055 21,138 21,827 6,936 24,021	0.81% 1.01% 0.52% 17.25% 1.09% 1.05% 7.26%

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EXCELSIOR MEDICAL CO., LTD. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

(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		Peak Holding Percentage	Notes
				Number of shares	Book value	Percentage of shares	Market value
The Company 〞〞 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.	Arcos Bio-Tech Corporation Sunder Biomedical Tech. Co., Ltd. Linkon International Golf & Country Club 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. Stock 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 〞	51,014 2,279,578 1 10,000 1 1,189,539 34,500 250 263,340 -	294 44,247 8,350 28,026 404 73,395 65,403 - 2,867 279,330	2.71% 3.80% 0.10% 8.00% - % 1.95% 0.32% - % 19.00% 17.65%	294 44,247 8,350 28,026 404 73,395 65,403 - 2,867 279,330	3.03% 3.80% 0.10% 8.00% - % 1.95% 0.32% - % 19.00% 17.65%	Note

Note : Act as limited company, no outstanding share.

Accumulated buying/selling of the same marketable securities for which the amount reaches $300 million or 20% or more of paid-in capital: None.
Acquisition of real estate for which the amount reaches $300 million or 20% or more of paid-in capital : None.
Disposition of real estate for which the amount reaches $300 million or 20% or more of paid-in capital: None.
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	Transaction details	Transactions with terms different from others	Transactions with terms different 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 〞	(762,596) (1,788,061)	(18.16)% (42.58)%	Net 30-60 days Net 30-90 days	- -		159,022 455,219	15.24% 43.62%	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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EXCELSIOR MEDICAL CO., LTD. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

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

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 〞	159,022 455,219	4.99 3.93	- -	- -	157,085 300,359	- -

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

Derivative transactions:

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

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 2020	Transaction details during 2020	Transaction details during 2020	Transaction details during 2020
				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	Accounts Receivable Sales Accounts Receivable Sales	22,987 47,680 34,473 66,997	The same as the term for other general trading partners Usual terms and conditions The same as the term for other general trading partners Base on cost-plus pricing	0.16% 0.71% 0.25% 1.00%

Note 1: The numbers denote the following:

0 represents the Company.
Subsidiaries are listed by names and numbered starting with 1.

Note 2: Relationship with the listed companies:

The Company to subsidiary
Subsidiary to the Company
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.

232

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EXCELSIOR MEDICAL CO., LTD. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

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

(b) Information on investees:

For the year ended December 31, 2020, 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 Co., Limited (Hong Kong) 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	5,279 277,647 197,604 180,300 1,244,687 32,093 44,069 18,806 1,588,746 91,984 780,525 31,899	1,607,200 41,150,196 29,829,742 11,550,425 39,411,623 1,150,874 2,434,870 2,085,547 53,154,741 11,534,804 80,398,900 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%	34,939 510,099 710,324 510,182 1,683,345 5,585 23,259 28,064 1,604,550 136,313 606,569 83,433	49.00% 44.68% 40.00% 38.50% 100.00% 98.02% 44.47% 23.97% 64.36% 41.02% 100.00% 28.66%	30,256 170,165 47,249 115,995 114,217 (1,009) (1,328) 1,427 76,271 6,719 4,740 49,889	14,826 75,953 18,834 44,658 114,217 (989) (590) 342 49,088 3,047 4,740 14,298	Associates Associates (Note 1) Subsidiary (Notes 2、4) Subsidiary (Note 4) Subsidiary (Notes 4) Subsidiary (Note 4) Associates Associates Subsidiary (Note 4) Sub-subsidiar y (Note 4) Sub-subsidiar y (Note 4) Associates

233

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EXCELSIOR MEDICAL CO., LTD. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

(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 Co., Limited (Hong Kong) Excelsior Investment (Malaysia) Co., Ltd. 〞 MEDI-CHE M SYSTEMS SDN. BHD.	EG Healthcare, Inc. Excelsior Renal Service Co., Limited Excelsior Medical Co., Limited (Hong Kong) Excelsior Investment (Malaysia) Co., Ltd. Dynamic Medical Technologies (Hong Kong) Ltd. Excelsior Beauty Co., Ltd. Medytox Taiwan Inc. Excelsior Beauty Limited of Hong Kong 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 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 of professional weight-loss and 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	19,256 312,505 862,529 166,346 382,278 138,745 18,000 - 66,547 97,920 1,395,079 136,982 25,865 1,315	19,256 312,505 862,529 139,467 382,278 138,745 18,000 25,198 66,547 97,920 1,395,079 128,572 7,397 1,315	5,293,453 73,375,728 29,439,829 5,395,436 98,777,228 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%	70,349 399,999 888,536 149,897 257,027 174,001 1,192 - 9,864 80,778 1,404,421 168,133 39,093 9,154	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%	14,305 158,817 76,271 (1,295) 10,273 6,719 (1,414) - (2,993) (12,254) 124,426 1,376 (1,372) 256	- - - - - - - - - - - - - -	Sub-subsidiar y (Note 4) Associates Subsidiary (Note 4) Sub-subsidiar y (Note 4) Subsidiary (Note 4) Subsidiary (Note 1、4) Associates Sub-subsidiar y (Note 5) Associates Sub-subsidiar y (Note 4) Associates Sub-subsidiar y (Note 4) Sub-subsidiar y (Note 4) Sub-subsidiar y (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: Excelsior Beauty Limited of Hong Kong has completed liquidation procedure in January, 2020.

234

(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, 2020 AND 2019

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

1. 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	Investment flows	Investment 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 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	- - (55,283) 4,374 678 - 152,384	- % - % 7.80% 100.00% 100.00% - % 17.65%	- % - % 7.80% 100.00% 100.00% - % 17.65%	- - - 4,374 678 - -	- - 28,026 130,872 12,161 - 279,330	- - - - - - 49,732

2. Limitation on investment in Mainland China:

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	4,554,538 774,558 1,068,422

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, 2020, 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, 2020, 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.

235

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EXCELSIOR MEDICAL CO., LTD. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

(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, 2020, 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.

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, Hong Kong Excelsior Beauty and CYJ Taiwan.
3.Arich segment - Arich.
4.Hong Kong Excelsior segment - Hong Kong Excelsior and SinoExcelsior Investment.
5.Other segment - Bestsmile, Excelsior Healthcare, EG Healthcare, Excelsior Investment (Malaysia), RENAL LABORATORIES SDN. BHD., MEDI-CHEM SYSTEMS SDN. BHD., RENAL MANAGEMENT SDN. BHD. and Excelsior Asset.
(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.

236

(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, 2020 AND 2019

(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, 2020	Excelsior segment $ 4,141,741 57,999 1,246	Dynamic segment 1,008,324 984 6,439	Arich segment 1,251,363 32 406	Hong Kong Excelsior segment 1 - 13,005	Others
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, 2019
	$ 4,200,986	1,015,747	1,251,801	13,006	293,319 (76,110) 6,698,749
	$ 560 26,029 $ 673,009	1,010 80,474 148,690	6,558 34,720 62,717	- 16 76,271	2,871 (231) 10,768 29,620 (3,392) 167,467 102,006 (233,310) 829,383
	$ 3,926,744 37,946 4,408	1,177,946 249 8,361	1,111,607 543 605	25,070 148 27,241	215,995 - 6,457,362 5,627 (44,513) - 4,023 - 44,638
Revenue Revenue from external customers Inter-segment revenue Interest revenue Total Interest expense Depreciation and amortization Reportable segment profit (loss)
	$ 3,969,098	1,186,556	1,112,755	52,459	225,645 (44,513) 6,502,000
	$ 5,461 28,019 $ 598,762	1,215 65,013 157,975	13,292 31,454 74,651	1,934 3,253 34,740	2,038 (120) 23,820 34,550 (2,048) 160,241 82,691 (201,994) 746,825

237

(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, 2020 AND 2019

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

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, 2020 2019 $ 3,833,073 3,608,106 1,108,050 958,838 799,957 992,944 119,381 106,011 78,279 62,281 359,575 246,283 33,230 27,097 343,949 455,802 $ 6,675,494 6,457,362
	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, 2020 2019 $ 6,351,482 6,106,927 71,858 73,017 130 70,911 136,218 110,772 115,806 95,735 $ 6,675,494 6,457,362 December 31, 2020 December 31, 2019 $ 1,630,565 1,368,359 1,615 3,324 87 1,466 31,705 30,131 219,402 229,730 10,574 11,131	For the Years Ended December 31, 2020 2019 $ 6,351,482 6,106,927 71,858 73,017 130 70,911 136,218 110,772 115,806 95,735 $ 6,675,494 6,457,362 December 31, 2020 December 31, 2019 $ 1,630,565 1,368,359 1,615 3,324 87 1,466 31,705 30,131 219,402 229,730 10,574 11,131
	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	1,644,141

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.

238

(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, 2020 AND 2019

(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, 2020 2019 $ 1,795,253 1,604,385 860,245 810,261 $ 2,655,498 2,414,646
	2020
	$ 1,795,253 860,245
	$ 2,655,498

239

5.Financial Statements and Independent Auditors’ Report – Parent Company

Independent Auditors ’ Report

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

Opinion

We have audited the financial statements of Excelsior Medical Co., Ltd.(“the Company”), which comprise the balance sheets as of December 31, 2020 and 2019, the statements of comprehensive income, changes in equity and cash flows for the years then ended, and notes to the 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 financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2020 and 2019, and its financial performance and its cash flows for the year then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

We conducted our audit of the financial statements as of and for the year ended December 31, 2020 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. Furthermore, we conducted our audit of the financial statements as of and for the year ended December 31, 2019 in accordance with the Regulations Governing Auditing and Certification of Financial Statements by Certified Public Accountants, Rule No. 1090360805 issued by the Financial Supervisory Commission, 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 Financial Statements section of our report. We are independent of the Company 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 report 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 financial statements of the current period. These matters were addressed in the context of our audit of the 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:

Impairment Assessment on Receivables

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

Description of key audit matter:

The management of the Company 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.

240

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 Company’s disclosure for impairment of receivables.

Other Matter

We did not audit the financial statements of certain subsidiaries, associates and joint ventures, which represented investment in other entities accounted for using the equity method of the Company. Those statements were audited by other auditors, whose reports has been furnished to us, and our opinion, insofar as it relates to the amounts included for such entities, is based solely on the report of other auditors. The investments in such entities accounted for using the equity method were NT$146,436 thousand and NT$101,609 thousand, constituting 2% and 1% of the total assets at December 31, 2020 and 2019, respectively, and the related share of profit of subsidiaries, associates and joint ventures accounted for using the equity method amounted to NT$29,466 thousand and NT$19,784 thousand, constituting 4% and 3% of total profit before tax for the years then ended, respectively.

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

Management is responsible for the preparation and fair presentation of the financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Company’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 Company 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 Company’ s financial reporting process.

Auditor ’ s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the 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 financial statements.

241

Identify and assess the risks of material misstatement of the 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.
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 Company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
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 Company’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 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 Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient and appropriate audit evidence regarding the financial information of the investment in other entities accounted for using the equity method to express an opinion on the financial statements. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion.

242

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the 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 Wan-Wan Lin.

KPMG

Taipei, Taiwan (Republic of China) March 19, 2021

Notes to Readers

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

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

243

(ENGLISH TRANSLATION OF FINANCIAL STATEMENTS ORIGINALLY ISSUDED IN CHINESE)

EXCELSIOR MEDICAL CO., LTD.

BALANCE SHEETS

DECEMBER 31, 2020 AND 2019

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

December 31, 2020 Amount % $ 439,605 5 166 - 61,208 1 314,322 4 647,234 8 3,806 - 580,389 6 11,055 -	December 31, 2020	December 31, 2020	December 31, 2020
	Amount	%	Amount
2,057,785 24	833,551 10 1,381,462 17
286,012 4 5,936,662 69 177,053 2 4,704 - 1,203 - 83,678 1 5,599 - 9,142 - 7,575 -	141,842 2 107,412 1 2,957 - 9,192 - 166 - 194 -
	144,965 2 116,798 1
	978,516 12 1,498,260 18
	1,411,490 16 1,281,490 15 3,276,107 38 2,816,807 34 3,017,380 35 2,904,393 34 (114,080) (1) (56,349) (1)
6,511,628 76
	7,590,897 88 6,946,341 82
$ 8,569,413 100	$ 8,569,413 100 8,444,601 100

244

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

STATEMENTS OF COMPREHENSIVE INCOME

FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

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

For the Y	ears End	ed December 31,	% 100 84
2020	% 100 84	2019
Amount $ 4,199,740 3,514,008		Amount 3,964,690 3,330,609
685,732 110,977 110,901	16 3 3	634,081 91,697 89,355	16 2 2
685,656	16	631,739	16
206,919 158,015 1,608	5 3 -	208,502 165,637 (5,703)	5 4 -
366,542	8	368,436	9
319,114	8	263,303	7
1,246 6,329 8,456 (560) 338,424	- - - - 8	4,408 3,443 51,115 (5,461) 281,954	- - 1 - 7
353,895	8	335,459	8
673,009 101,339	16 2	598,762 84,007	15 2
571,670	14	514,755	13
1,572 (18,238) 50,905 1,147	- - 1 -	3,456 9,375 39,007 (2,836)	- - 1 -
33,092	1	54,674	1
(110,137) (3,356) (22,027)	(3) - (1)	(56,139) (1,456) (11,228)	(1) - -
(91,466)	(2)	(46,367)	(1)
(58,374)	(1)	8,307	-
$ 513,296	13	523,062	13
$	4.06		4.02
$	4.04		3.99

245

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

STATEMENTS OF CHANGES IN EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Share capital Ordinary shares $ 1,281,490 - -	Capital surplus		Retained earnings		Total other equity interest Exchange Unrealized gains (losses) from financial assets measured at fair differences on translation of foreign financial statements value through other comprehensive income (61,536) 34,907 - - (46,367) 51,243	Total other equity interest Exchange Unrealized gains (losses) from financial assets measured at fair differences on translation of foreign financial statements value through other comprehensive income (61,536) 34,907 - - (46,367) 51,243	Total equity 6,805,209 514,755 8,307
		Legal reserve 681,883 - -	Special reserve 262,832 - -	Unappropriated retained earnings
-	-	-	-	518,186	(46,367)	51,243	523,062
- - - - - - -	- - - (176) 957 3,322 -	45,156 - - - - - -	- (236,203) - - - - -	(45,156) 236,203 (384,447) (1,586) - - 34,596	- - - - - - -	- - - - - - (34,596)	- - (384,447) (1,762) 957 3,322 -
1,281,490 - -	2,816,807 - -	727,039 - -	26,629 - -	2,150,725 571,670 (944)	(107,903) - (91,466)	51,554 - 34,036	6,946,341 571,670 (58,374)
-	-	-	-	570,726	(91,466)	34,036	513,296
- - - - 130,000 - -	- - - 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 -
$ 1,411,490	3,276,107	778,515	56,349	2,182,516	(199,369)	85,289	7,590,897

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STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (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 (gain) 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 subsidiaries, associates and joint ventures accounted for using equity method Reversal of impairment gain 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 Accounts receivable due from related parties Other receivables Inventories Net defined benefit asset Other current assets Total changes in operating assets Changes in operating liabilities: Notes payable Accounts payable Other payables Other current liabilities Net defined benefit liability Deferred credits 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, 2020 2019 $ 673,009 598,762 23,759 26,206 2,270 1,813 1,608 (5,703) 200 (53) 560 5,461 (1,246) (4,408) (6,329) (3,443) - 3,322 (338,424) (281,954) - (64) 110,977 91,697 (110,901) (89,355) 400 (50,903)	For the Years Ended December 31, 2020 2019 $ 673,009 598,762 23,759 26,206 2,270 1,813 1,608 (5,703) 200 (53) 560 5,461 (1,246) (4,408) (6,329) (3,443) - 3,322 (338,424) (281,954) - (64) 110,977 91,697 (110,901) (89,355) 400 (50,903)
	2020 $ 673,009 23,759 2,270 1,608 200 560 (1,246) (6,329) - (338,424) - 110,977 (110,901) 400
	(317,126)	(307,384)
	8,238 991 (22,063) 971 (60,184) (843) 5,646	10,624 22,782 (53,155) (2,021) 56,450 - (6,079)
	(67,244)	28,601
	(4,388) (94,137) 4,050 1,864 - - (28)	4,180 (19,332) 1,181 (1,909) (745) (2,740) -
	(92,639)	(19,365)
	(159,883)	9,236
	(477,009)	(298,148)
	196,000 1,961 (67,858)	300,614 4,597 (68,221)
	130,103	236,990

247

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

STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Cash flows from investing activities: Acquisition of financial assets at fair value through other comprehensive income Proceeds from disposal of financial assets at fair value through other comprehensive income 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 investments accounted for using equity method Acquisition of property, plant and equipment Acquisition of intangible assets (Increase) decrease in other financial assets Increase 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 Increase in other payables to related parties Cash dividends paid Capital increased by cash Interest paid Payment of lease liabilities Net cash flows (used in) from financing activities Net decrease in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period	For the Years Ended December 31, 2020 2019 - (7,362) 1,006 57,295 (320) - - 15,200 (183,252) (626,469) (920) (1,415) (1,369) (196) (384) 2,103 (754) (2,145) 81,808 107,252	For the Years Ended December 31, 2020 2019 - (7,362) 1,006 57,295 (320) - - 15,200 (183,252) (626,469) (920) (1,415) (1,369) (196) (384) 2,103 (754) (2,145) 81,808 107,252
	2020 - 1,006 (320) - (183,252) (920) (1,369) (384) (754) 81,808
	(104,185)	(455,737)
	- (450,000) - (465,792) 585,000 (924) (3,793)	450,000 - 3,684 (384,447) - (5,097) (4,572)
	(335,509)	59,568
	(309,591) 749,196	(159,179) 908,375
	$ 439,605	749,196

248

(ENGLISH TRANSLATION OF FINANCIAL STATEMENTS ORIGINALLY ISSUDED IN CHINESE)

EXCELSIOR MEDICAL CO., LTD. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

(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 engaged primarily in the sale of medical supplies and equipment, medicines and home medical devices.

(2) Financial Statements Authorization Date and Authorization Process

The financial statements were authorized for issue by the Board of Directors on March 12, 2021.

(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. (“FSC”) which have already been adopted.

The Company has initially adopted the following new amendments, which do not have a significant impact on its financial statements, from January 1, 2020:

Amendments to IFRS 3 “Definition of a Business”
Amendments to IFRS 9, IAS39 and IFRS7 “Interest Rate Benchmark Reform”
Amendments to IAS 1 and IAS 8 “Definition of Material”
Amendments to IFRS 16 “COVID-19-Related Rent Concessions”
(b) The impact of IFRS issued by the FSC but not yet effective

The Company assesses that the adoption of the following new amendments, effective for annual period beginning on January 1, 2021, would not have a significant impact on its financial statements:

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

249

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

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

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

The following new and amended standards, which may be relevant to the Company, have been issued by the International Accounting Standards Board (IASB), but have yet to be endorsed by the FSC:

Standards or		Effective date per
Interpretations	Content of amendment	IASB
Amendments to IAS 1	The amendments aim to promote consistency	January 1, 2023
“Classification of Liabilities as	in applying the requirements by helping
Current or Non-current”	companies determine whether, in the
	statement of balance sheet, debt and other
	liabilities with an uncertain settlement date
	should be classified as current (due or
	potentially due to be settled within one year)
	or non-current.
	The amendments include clarifying the
	classification requirements for debt a
	company might settle by converting it into
	equity.
Amendments to IAS 37	The amendments clarify that the‘costs of	January 1, 2022
“Onerous Contracts－Cost	fulfilling a contract’comprises the costs
of Fulfilling a Contract”	that relate directly to the contract as follows:
	●the incremental costs – e.g. direct labor
	and materials; and
	●an allocation of other direct costs – e.g. an
	allocation of the depreciation charge for an
	item of property, plant and equipment used
	in fulfilling the contract.

The Company is evaluating the impact of its initial adoption of the abovementioned standards or interpretations on its financial position and financial performance. The results thereof will be disclosed when the Company completes its evaluation.

The Company does not expect the following other new and amended standards, which have yet to be endorsed by the FSC, to have a significant impact on its 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 16 Property, Plant and Equipment Proceeds before Intended Use
Annual Improvements to IFRS Standards 2018-2020
Amendments to IFRS 3 “Reference to the Conceptual Framework”
Amendments to IAS 1 “Disclosure of Accounting Policies”
Amendments to IAS 8 “Definition of Accounting Estimates”

250

(ENGLISH TRANSLATION OF FINANCIAL STATEMENTS ORIGINALLY ISSUDED IN CHINESE) EXCELSIOR MEDICAL CO., LTD. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

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

(4) Summary of Significant Accounting Policies

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

(a) Statement of compliance

These financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers (hereinafter referred to the Regulations).

(b) Basis of preparation
Basis of measurement

The 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 Company operation is determined based on the primary economic environment in which the entity operates. The 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.

(c) Foreign Currencies
1.Foreign currency transactions

Transactions in foreign currencies are translated into the respective functional currencies of Company 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;

251

(ENGLISH TRANSLATION OF FINANCIAL STATEMENTS ORIGINALLY ISSUDED IN CHINESE)

EXCELSIOR MEDICAL CO., LTD. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

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

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

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 Company 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 Company disposes of only part of its investment in an associate or joint venture that includes a foreign operation while retaining significant or joint control, the relevant proportion of the cumulative amount is reclassified to profit or loss.

(d) 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 Company 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.

252

(ENGLISH TRANSLATION OF FINANCIAL STATEMENTS ORIGINALLY ISSUDED IN CHINESE)

EXCELSIOR MEDICAL CO., LTD. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

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

(e) Cash and Cash Equivalents

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

(f) 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 Company 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.

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 Company 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.

253

(ENGLISH TRANSLATION OF FINANCIAL STATEMENTS ORIGINALLY ISSUDED IN CHINESE)

EXCELSIOR MEDICAL CO., LTD. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

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

2) Fair value through other comprehensive income (FVOCI)

On initial recognition of an equity investment that is not held for trading, the Company 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.

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

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. On initial recognition, the Company 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 Company 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 receivables, guarantee deposit paid and other financial assets).

The Company 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 Company 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 Company’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.

254

(ENGLISH TRANSLATION OF FINANCIAL STATEMENTS ORIGINALLY ISSUDED IN CHINESE)

EXCELSIOR MEDICAL CO., LTD. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

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

12-month ECL are the portion of ECL that result from default events that are possible within the 12 months 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 Company 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 Company in accordance with the contract and the cash flows that the Company expects to receive). ECL are discounted at the effective interest rate of the financial asset.

At each reporting date, the Company 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 asset 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 charged 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 Company has no reasonable expectations of recovering a financial asset in its entirety or a portion thereof. For corporate customers, the Company 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 Company 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 Company’s procedures for recovery of amounts due.

5) Derecognition of financial assets

The Company 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 Company neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.

255

(ENGLISH TRANSLATION OF FINANCIAL STATEMENTS ORIGINALLY ISSUDED IN CHINESE)

EXCELSIOR MEDICAL CO., LTD.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

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

The Company 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 Company 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.

2) Equity instrument

3) Financial liabilities

4) Derecognition of financial liabilities

The Company derecognizes a financial liability when its contractual obligations are discharged or cancelled, or expire. The Company 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.

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 Company 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 Company 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.

256

(ENGLISH TRANSLATION OF FINANCIAL STATEMENTS ORIGINALLY ISSUDED IN CHINESE)

EXCELSIOR MEDICAL CO., LTD.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

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

(g) Inventories

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

(h) Investment in Associates

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

The financial statements include the Company’s share of the profit or loss and other comprehensive income of associates, after adjustments to align their accounting policies with those of the Company, from the date on which significant influence commences until the date on which significant influence ceases. The Company 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 Company and an associate are recognized only to the extent of unrelated Company’s interests in the associate.

When the Company’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 Company has incurred legal or constructive obligations or made payments on behalf of the associate.

(i) Investment in subsidiaries

The subsidiaries in which the Company holds their controlling interest are accounted for using equity method in the parent-company-only financial statements. Under equity method, the net income, other comprehensive income and equity in the parent-company-only financial statement are the same as those attributable to the owners of parent in the consolidated financial statements.

The changes in the ownership of the subsidiaries are recognized as equity transaction.

(j) Property, Plant, and Equipment
1.Recognition and measurement

Items of property, plant and equipment are measured at cost (including capitalized 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.

257

(ENGLISH TRANSLATION OF FINANCIAL STATEMENTS ORIGINALLY ISSUDED IN CHINESE)

EXCELSIOR MEDICAL CO., LTD. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

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

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

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 Company.

3.Depreciation

Land is not depreciated.

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

are as follows:
1) Buildings	5 years~55 years
2) Medical equipment	2 years~8 years
3) Other equipment	3 years~8 years

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

(k) Leases
(i) Identifying a lease

At inception of a contract, the Company 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. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether:

1) the contract involves the use of an identified asset – this may be specified explicitly or implicitly, and should be physically distinct or represent substantially all of the capacity of a physically distinct asset. If the supplier has a substantive substitution right, then the asset is not identified; and
2) the customer has the right to obtain substantially all of the economic benefits from use of the asset throughout the period of use; and
3) the customer has the right to direct the use of the asset throughout the period of use only if either:
the customer has the right to direct how and for what purpose the asset is used throughout the period of use; or

258

(ENGLISH TRANSLATION OF FINANCIAL STATEMENTS ORIGINALLY ISSUDED IN CHINESE) EXCELSIOR MEDICAL CO., LTD. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

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

the relevant decisions about how and for what purpose the asset is used are predetermined and:
- － the customer has the right to operate the asset throughout the period of use, without the supplier having the right to change those operating instructions; or
- － the customer designed the asset in a way that predetermines how and for what purpose it will be used throughout the period of use.
(ii) As a leasee

The Company 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 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 Company’s incremental borrowing rate. Generally, the Company uses its incremental borrowing rate as the discount rate.

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

－
fixed payments, including in-substance fixed payments; and
－ 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 Company’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 an extension or termination option; or
－
there is any lease modifications

259

(ENGLISH TRANSLATION OF FINANCIAL STATEMENTS ORIGINALLY ISSUDED IN CHINESE)

EXCELSIOR MEDICAL CO., LTD.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

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

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

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

(iii) As a leasor

When the Company 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 Company 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 Company considers certain indicators such as whether the lease is for the major part of the economic life of the asset.

When the Company 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 Company 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 Company applies IFRS15 to allocate the consideration in the contract.

The Company recognizes lease payments received under operating leases as income on a straight-line basis over the lease term as part of ‘other income’.

(l) 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 Company and have finite useful lives are measured at cost less accumulated amortization and any accumulated impairment losses.

260

(ENGLISH TRANSLATION OF FINANCIAL STATEMENTS ORIGINALLY ISSUDED IN CHINESE)

EXCELSIOR MEDICAL CO., LTD. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

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

2.Subsequent expenditure

3.Amortization

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

1) Computer software 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.

(m) Impairment of Non-Financial Assets

At each reporting date, the Company 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 cash generating units (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.

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

261

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EXCELSIOR MEDICAL CO., LTD.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

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

(n) Provisions

A provision is recognized if, as a result of a past event, the Company 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.

(o) Revenue

1.Revenue from contracts with customers

Revenue is measured based on the consideration to which the Company expects to be entitled in exchange for transferring goods or services to a customer. The Company 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 Company’s main types of revenue are explained below.

1) Sale of goods

The Company 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 Company has objective evidence that all criteria for acceptance have been satisfied.

The Company’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 Company has a right to an amount of consideration that is unconditional.

2) Services

The Company 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 stand-alone selling prices. The stand-alone selling prices will be determined based on the list prices at which the Company sells the services in separate transactions.

3) Financing components

The Company 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 Company does not adjust any of the transaction prices for the time value of money.

262

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EXCELSIOR MEDICAL CO., LTD.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

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

(p) 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 Company’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 Company, 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 Company 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 Company recognizes gains and losses on the settlement of a defined benefit plan when the settlement occurs.

3.Other long-term employee benefits

The Company’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 Company can no longer withdraw the offer of those benefits and when the Company 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 Company 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.

263

(ENGLISH TRANSLATION OF FINANCIAL STATEMENTS ORIGINALLY ISSUDED IN CHINESE)

EXCELSIOR MEDICAL CO., LTD. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

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

(q) Share-based Payment

The grant date fair value of equity-settled share based payment arrangements granted to employees is generally recognized as an expense, with a corresponding increase in equity, over the vesting period of the awards. The amount recognized as an expense is adjusted to reflect the number of awards for which the related service and non-market performance conditions are expected to be met, such that the amount ultimately recognized is based on the number of awards that meet the related service and non-market performance conditions at the vesting date.

For share based payment awards with non-vesting conditions, the grant-date fair value of the share-based payment is measured to reflect such conditions, and there is no true up for differences between expected and actual outcomes.

The Company set the grant date on which the board of directors authorized the subscription price and the number of new shares to qualified employees.

(r) Income Taxes

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 Company 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 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 Company 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

264

(ENGLISH TRANSLATION OF FINANCIAL STATEMENTS ORIGINALLY ISSUDED IN CHINESE)

EXCELSIOR MEDICAL CO., LTD. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

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

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.

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.

(s) Earnings per Share

The Company 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

Please refer to the consolidated financial report of Excelsior Medical Co., Ltd. for the years ended December 31, 2020 and 2019 for the operating segments information.

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

Uncertainty

In preparing these financial statements in conformity with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, 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.

Accounting policies which influence material judgment and has significant impact on prices recognized in parent-company-only financial statements is as follows:

To identify whether the Company has actual control to investee, please refer to the consolidated financial statements for the year ended December 31, 2020.

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 Company 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 Company 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)(d).

265

(ENGLISH TRANSLATION OF FINANCIAL STATEMENTS ORIGINALLY ISSUDED IN CHINESE)

EXCELSIOR MEDICAL CO., LTD. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

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

(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 statement of cash flows	December 31, 2020 $ 439,096 509	December 31, 2019 599,296 149,900
	$ 439,605	749,196

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

(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, 2020 $ 166	December 31, 2019 -
	$ 46	-

The Company uses derivative financial instruments to hedge the certain foreign exchange and interest risk the Company 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:

December 31, 2020

Forward foreign exchange contracts purchased Forward foreign exchange contracts purchased	Amount (in thousands) JPY 107,538 USD 400	Currency JPY to TWD USD to TWD	Maturity period 2021.2~2021.3 2021.1

266

(ENGLISH TRANSLATION OF FINANCIAL STATEMENTS ORIGINALLY ISSUDED IN CHINESE)

EXCELSIOR MEDICAL CO., LTD. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

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

Equity investments at fair value through other comprehensive income Domestic listed shares Foreign listed shares Domestic unlisted shares Total	December 31, 2020 $ 30,397 128,802 126,813	December 31, 2019 33,961 122,693 148,602 305,256
	$ 286,012

1.Equity investments at fair value through other comprehensive income

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

The Company has sold its common stocks designated at fair value through other comprehensive income because of operation strategies for the years ended December 31, 2020 and 2019. The shares sold had a fair value of $1,009 thousand and $57,550 thousand, respectively. The Company realized a gain of $301 thousand and $34,596 thousand, respectively, which is already included in other comprehensive income, and thereafter, was transferred to retained earnings from other equity.

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

3.As of December 31, 2020 and 2019, the aforesaid financial assets were not pledged as collateral.

(d) Notes receivable, accounts receivable and other receivables

Notes receivable Accounts receivable Trade receivables - fair value through other comprehensive income Other receivables Less: Loss allowance Net	December 31, 2020 $ 61,208 982,406 - 3,806 (20,850)	December 31, 2019 69,446 955,450 5,884 5,492 (19,242) 1,017,030
	$ 1,026,570

The Company 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.

267

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EXCELSIOR MEDICAL CO., LTD.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

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

The Company 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 was 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, 2020	December 31, 2020	Loss allowance provision (16,604) (501) (29) - (3,716) (20,850) Loss allowance provision (14,466) (776) (281) (191) (3,528) (19,242)
	Gross carrying amount
	$ 1,043,167 508 29 - 3,716
	$ 1,047,420
	Gross carrying amount	Weighted-aver age loss rate 1.40% 98.23% 100% 100% 100%
	$ 1,031,482 790 281 191 3,528
	$ 1,036,272

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

Balance as of January 1 Impairment losses recognized Impairment losses reversed Balance as of December 31	For the Years Ended December 31, 2020 2019 $ 19,242 24,945 1,608 - - (5,703) $ 20,850 19,242
	2020
	$ 19,242 1,608 -
	$ 20,850

268

(ENGLISH TRANSLATION OF FINANCIAL STATEMENTS ORIGINALLY ISSUDED IN CHINESE)

EXCELSIOR MEDICAL CO., LTD. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

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

(e) Inventories

Merchandise Inventory in-transit Total The details of cost of goods sold were as follows : Cost of goods sold (Reversal) losses on inventory valuation and obsolescence Repair and maintenance costs Others operating costs Total	December 31, 2020 $ 491,314 89,075	December 31, 2019 452,482 84,194
	$ 580,389	536,676
	For the Years Ended December 31, 2020 2019 $ 3,442,305 3,233,974 (14,610) 1,169 83,159 85,089 3,154 10,377
	2020 $ 3,442,305 (14,610) 83,159 3,154
	$ 3,514,008	3,330,609

(f) Investments accounted for using equity method

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

Subsidiaries Associates 1.Subsidiary	December 31, 2020 $ 5,256,868 679,794	December 31, 2019 4,997,154 543,922
	$ 5,936,662	5,541,076

Please refer to the consolidated financial statements for the year ended of December 31, 2020.

2.Associates

The Company’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, 2020 $ 679,794	December 31, 2019 543,922

269

(ENGLISH TRANSLATION OF FINANCIAL STATEMENTS ORIGINALLY ISSUDED IN CHINESE) EXCELSIOR MEDICAL CO., LTD. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

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

Attributable to Company: Profit Other comprehensive income Total comprehensive income	For the Years Ended December 31, 2020 2019 $ 104,828 79,254 29,521 35,198 $ 134,349 114,452
	2020 $ 104,828 29,521
	$ 134,349

3.Joint ventures

The Company’s financial information for investments in individually insignificant joint venture accounted for using equity method at the reporting date was as follows. These financial information are included in the financial statements.

Individually insignificant joint venture Attributable to Company: Profit Other comprehensive income Total comprehensive income	December 31, 2019 $ -
	For the Years Ended December 31, 2019 $ 623 -
	$ 623

Before August 2019, the Company and the other shareholder held 49% and 51%, respectively, of the joint venture Excelsior Asset Management Co., Ltd. that is not individually significant.

Under the shareholders’agreement, the Company and the other shareholder have the power to appoint two and three, respectively, of the five directors of Excelsior Asset Management Co., Ltd. Significant matters should be decided by more than two-thirds of directors present in the meeting, and the directors present in the meeting should be more than two-thirds of all directors. Therefore, the Company and the other shareholder of the joint venture have joint control over Excelsior Asset Management Co., Ltd., which the Company acquired its entire shares and gained control over it on August 2, 2019.

As of December 31, 2020 and 2019, did not provide any investments accounted for using the equity method as collateral.

(g) Changes in ownership interests in subsidiaries

The Company subscribed the shares issued for cash by its subsidiary Arich Enterprise Co., Ltd. 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 Enterprise Co., Ltd.. The changes in ownership interests in subsidiaries were recognized as capital surplus amounting to $3,967 thousand for the year ended December 31, 2020.

270

(ENGLISH TRANSLATION OF FINANCIAL STATEMENTS ORIGINALLY ISSUDED IN CHINESE)

EXCELSIOR MEDICAL CO., LTD. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

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

A part of ordinary shares issued for cash by the Company are available for subscription to employees of its subsidiaries. The changes in ownership interests in subsidiaries were recognized as capital surplus amounting to $957 thousand for the year ended December 31, 2019. For relevant information on share-based payment, please refer to Note (6)(r).

(h) Property, plant and equipment

The cost, depreciation, and impairment loss of the property, plant and equipment of the Company for the years ended December 31, 2020 and 2019 were as follows:

Land $ 75,758 - - - - -	Buildings 98,943 543 (392) - - -	Medical equipment 71,463 - (1,664) 15,817 (744) -	Miscellaneous equipment 23,068 377 (10,850) 726 - (400)	Total 269,232 920 (12,906) 16,543 (744) (400)
$ 75,758	99,094	84,872	12,921	272,645
$ 75,758 - - - -	98,943 - - - -	75,944 361 (5,354) 12,722 (12,210)	28,865 1,054 (6,851) - -	279,510 1,415 (12,205) 12,722 (12,210)
$ 75,758	98,943	71,463	23,068	269,232
$ 4,000 - - -	41,652 2,109 (392) -	26,854 16,025 (1,664) (672)	16,676 1,854 (10,850) -	89,182 19,988 (12,906) (672)
$ 4,000	43,369	40,543	7,680	95,592
$ 4,000 - - - -	39,025 2,627 - - -	29,424 14,716 (64) (5,354) (11,868)	21,236 2,291 - (6,851) -	93,685 19,634 (64) (12,205) (11,868)
$ 4,000	41,652	26,854	16,676	89,182
$ 71,758	55,725	44,329	5,241	177,053
$ 71,758	59,918	46,520	7,629	185,825
$ 71,758	57,291	44,609	6,392	180,050

As of December 31, 2020 and 2019, the property, plant and equipment of the Company had been pledged as collateral for long-term borrowings. Please refer to Note(8).

271

(ENGLISH TRANSLATION OF FINANCIAL STATEMENTS ORIGINALLY ISSUDED IN CHINESE) EXCELSIOR MEDICAL CO., LTD. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

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

(i) Right-of-use assets

The Company leases many assets including buildings and other equipment. Information about leases for which the Company as a lessee is presented below:

Buildings $ 16,093 3,612 (8,023)	Other equipment 1,440 - -	Total 17,533 3,612 (8,023)
$ 11,682	1,440	13,122
$ 16,057 36	1,440 -	17,497 36
$ 16,093	1,440	17,533
$ 3,495 3,483	1,152 288	4,647 3,771
$ 6,978	1,440	8,418
$ - 3,495	- 1,152	- 4,647
$ 3,495	1,152	4,647
$ 4,704	-	4,704
$ 16,057	1,440	17,497
$ 12,598	288	12,886

The Company added and modified parts of the lease contract, resulting in a decrease in right of use assets of $4,411 thousand and an increase of $36 thousand to be recognized for the years ended December 31, 2020 and 2019, respectively.

For the years ended December 31, 2020 and 2019, the Company leased storage room and parking space under operating lease, please refer to Note (6)(n).

272

(ENGLISH TRANSLATION OF FINANCIAL STATEMENTS ORIGINALLY ISSUDED IN CHINESE)

EXCELSIOR MEDICAL CO., LTD. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

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

(j) Intangible assets

The costs, amortization, and impairment of the Company for the years ended December 31, 2020 and 2019, were as follows:

Cost: Balance as of January 1, 2020 Acquisition Disposal Balance as of December 31, 2020 Balance as of January 1, 2019 Acquisition Balance as of December 31, 2019 Amortization and impairment loss: Balance as of January 1, 2020 Amortization Disposal Balance as of December 31, 2020 Balance as of January 1, 2019 Amortization Balance as of December 31, 2019 Carrying amount: Balance as of December 31, 2020 Balance as of January 1, 2019 Balance as of December 31, 2019	Software $ 2,204 1,369 -	Other intangible assets 19,442 - (1,000)	Total 21,646 1,369 (1,000) 22,015 21,450 196 21,646 20,949 863 (1,000) 20,812 20,125 824 20,949 1,203 1,325 697
	$ 3,573	18,442
	$ 2,008 196	19,442 -
	$ 2,204	19,442
	$ 1,537 833 -	19,412 30 (1,000)
	$ 2,370	18,442
	$ 849 688	19,276 136
	$ 1,537	19,412
	$ 1,203	-
	$ 1,159	166
	$ 667	30

1.Amortization

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

Operating costs Operating expenses Total	For the Years Ended December 31, 2020 2019 $ 30 136 833 688 $ 863 824
	2020 $ 30 833
	$ 863

273

(ENGLISH TRANSLATION OF FINANCIAL STATEMENTS ORIGINALLY ISSUDED IN CHINESE)

EXCELSIOR MEDICAL CO., LTD. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

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

(k) Short-term borrowings

Unsecured bank loans Unused short term credit lines Range of interest rates	December 31, 2020 $ -	December 31, 2020 $ -	December 31, 2019 450,000
	$ 2,400,000		2,350,000
		-	0.96%~0.98%

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

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

(l) Provisions

Warranties Balance as of January 1, 2020 Additions Provisions reversed or used Balance as of December 31, 2020 Balance as of January 1, 2019 Additions Provisions reversed or used Balance as of December 31, 2019	December 31, 2020 $ 4,221	December 31, 2020 $ 4,221	December 31, 2019 3,348

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 Company’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.

274

(ENGLISH TRANSLATION OF FINANCIAL STATEMENTS ORIGINALLY ISSUDED IN CHINESE)

EXCELSIOR MEDICAL CO., LTD. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

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

(m) Lease liabilities

The carrying amount of lease liabilities were as follows:

The carrying amount of lease liabilities were as follows:
Current Non-current	December 31, 2020 $ 1,800	December 31, 2019 3,769
	$ 2,957	9,192

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

There were no significant issuances, repurchases and repayments of lease liabilities in 2020.

The Company added and modified parts of the contract, resulting in a decrease in lease liabilities of $4,411 thousand and an increase of $36 thousand for the years ended December 31, 2020 and 2019, respectively.

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	For the Years Ended December 31, 2020 2019 $ 107 181	For the Years Ended December 31, 2020 2019 $ 107 181
	2020 $ 107
	$ 1,173	311
	$ 905	1,086

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

Total cash outflow for leases	For the Years Ended December 31, 2020 2019 $ 4,805 5,839
	2020 $ 4,805

1. Building leases

As of December 31, 2020, the Company leases buildings for its office space. The leases of office space typically run for a period of 2 to 5 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 Company sub-leases some of its right-of-use assets under operating leases; please refer to Note (6)(n).

2. Other leases

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

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

275

(ENGLISH TRANSLATION OF FINANCIAL STATEMENTS ORIGINALLY ISSUDED IN CHINESE) EXCELSIOR MEDICAL CO., LTD. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

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

(n) Operating leases

Operating leases relate to leasing and subleasing of real estate and leasing of equipment with lease terms between 1 to 5 years. The leasees do not have bargain purchase options to acquire the real estate and equipment 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:

after the reporting date are as follows:
Within 1 year 1 to 5 years	December 31, 2020 $ 5,069 -	December 31, 2019 5,866 69 5,935
	$ 5,069

(o) Employee benefits

1.Defined benefit plans

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

follows:
Present value of defined benefit obligations Fair value of plan assets Net defined benefit (assets) liabilities	December 31, 2020 $ 79,383 (84,982)	December 31, 2019 77,275 (80,459) (3,184)
	$ (5,599)

The Company 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 Company 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.

The Company’s Bank of Taiwan labor pension reserve account balance amounted to $84,982 thousand as of December 31, 2020. 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.

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

2) Movements in present value of the defined benefit obligations

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

Defined benefit obligation as of January 1 Current service costs and interest Remeasurement 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 Benefit paid Defined benefit obligation as of December 31	For the Years Ended December 31, 2020 2019 $ 77,275 77,693 1,090 1,341 (2,752) (3,640) 629 461 3,141 2,307 - (887)	For the Years Ended December 31, 2020 2019 $ 77,275 77,693 1,090 1,341 (2,752) (3,640) 629 461 3,141 2,307 - (887)
	2020 $ 77,275 1,090 (2,752) 629 3,141 -
	$ 79,383	77,275

3) Movements of defined benefit plan assets

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

Fair value of plan assets as of January 1 Interest income Remeasurement on the net defined benefit obligation －Return on plan assets (excluding current interest) Contribution paid by the employer Benefits paid Fair value of plan assets as of December 31	For the Years Ended December 31, 2020 2019 $ 80,459 76,676 649 871 2,590 2,584 1,284 1,215 - (887)	For the Years Ended December 31, 2020 2019 $ 80,459 76,676 649 871 2,590 2,584 1,284 1,215 - (887)
	2020 $ 80,459 649 2,590 1,284 -
	$ 84,982	80,459

4) Expenses recognized in profit or loss

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

Current service costs Net interest of net liabilities for defined benefit obligations	For the Years Ended December 31, 2020 2019 $ 471 467 (30) 3	For the Years Ended December 31, 2020 2019 $ 471 467 (30) 3
	2020 $ 471 (30)
	$ 441	470

277

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

Operating costs and expenses	For the Years Ended December 31,	For the Years Ended December 31,
	2020 $ 441	2019 470

5) Actuarial assumptions

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

Discount rate Future salary increasing rate	December 31, 2020 0.350%% 3.000%%	December 31, 2019
		0.800%% 3.000%%

The expected allocation payment to be made by the Company to the defined benefit plans for the one-year period after the reporting date is $1,284 thousand.

The weighted average lifetime of the defined benefits plans is 12 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, 2020 Discount rate Future salary increasing rate December 31, 2019 Discount rate Future salary increasing rate	Influences on defined benefit obligations	Influences on defined benefit obligations
	Increased 0.25% $ (1,775) 1,748 $ (1,803) 1,785	Decreased 0.25%
		1,837 (1,699) 1,868 (1,733)

There is no change in the method and assumptions used in the preparation of sensitivity analysis for 2020 and 2019.

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

2.Defined contribution plans

The pension costs incurred from the contributions to the Bureau of the Labor Insurance amounted to $7,096 thousand and $6,867 thousand for the years ended December 31, 2020 and 2019, respectively.

(p) Income taxes
1.Income tax expense

The components of income tax in the years 2020 and 2019 were as follows:

Current tax expense Current period Adjustment for prior periods Deferred tax expense Origination and reversal of temporary differences Income tax expense from continuing operations	For the Years Ended December 31, 2020 2019 $ 66,640 72,173 (1,795) (616) 64,845 71,557 36,494 12,450 $ 101,339 84,007
	2020 $ 66,640 (1,795)
	64,845
	36,494
	$ 101,339

The amount of income tax recognized in other comprehensive income for 2020 and 2019 were as follows:

follows:
	For	the Years Ended	December 31,
		2020	2019
Items that will not be reclassified subsequently to profit or
loss:
Remeasurement from defined benefit plans	$	(315)	(691)
Unrealized gains (losses) on equity instruments at fair
value through other comprehensive income		(1,363)	3,088
Share of other comprehensive income of associates and
joint ventures accounted for using equity method,
components of other comprehensive income		531	439
	$	(1,147)	2,836
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translation	$	22,027	11,228

279

(ENGLISH TRANSLATION OF FINANCIAL STATEMENTS ORIGINALLY ISSUDED IN CHINESE) EXCELSIOR MEDICAL CO., LTD. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

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

Reconciliation of income tax and profit before tax for 2020 and 2019 was as follows:

Profit before imcome tax Income tax using the Company’s statutory tax rate Permanent differences Tax-exempt income Unrecognized deductible temporary differences Undistributed earnings additional tax Adjustments for prior periods Income tax expense	For the Years Ended December 31,	For the Years Ended December 31,
	2020 $ 673,009	2019 598,762
	$ 134,602 (31,379) (297) - 208 (1,795)	119,752 (40,048) (517) (10,000) 15,436 (616)
	$ 101,339	84,007

2.Deferred tax assets and liabilities
1) Recognized deferred tax assets and liabilities

Changes in the amount of deferred tax assets and liabilities for the years ended December 31, 2020 and 2019 were as follows:

Deferred sales returns and allowance	Unrealized losses on inventories	Unrealized gains on investment	Others	Total 64,862 (3,427) 22,243
$ 1,350 2,672 -	9,683 (2,922) -	- - -	53,829 (3,177) 22,243
$ 4,022	6,761	-	72,895	83,678
$ 1,612 (262) -	4,450 5,233 -	- - -	36,648 6,205 10,976	42,710 11,176 10,976
$ 1,350	9,683	-	53,829	64,862
$ - - -	- - -	106,425 32,660 -	987 407 1,363	107,412 33,067 1,363
$ -	-	139,085	2,757	141,842
$ - - -	- - -	82,724 23,701 -	4,150 (75) (3,088)	86,874 23,626 (3,088)
$ -	-	106,425	987	107,412

280

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

3.Assessment of tax

The Company’s income tax returns for the year through 2018 were assessed by the Tax Administration.

(q) Capital and other equity

A resolution was passed by the Board of the Comapny on November 7, 2019, for issuance of 130,000 thousand shares, with a par value of $10 per share. The issuance price is $45. A part of shares are reserved for employees. For relative information, please refer to Note (6)(r). The issuance has been approved by the Securities and Futures Bureau of the Financial Supervisory Commission, R.O.C., with January 15, 2020, as the date of capital increase. The related registration procedures were completed, and all issued shares were paid up upon issuance.

1.Share capital

Number of shares authorized (in thousands) Shares authorized Number of shares issued and fully paid (in thousands) Shares issued	December 31, 2020 200,000	December 31, 2019 200,000
	$ 2,000,000	2,000,000
	141,149	128,149
	$ 1,411,490	1,281,490

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.

2.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, 2020 $ 1,822,584 1,072,079 98,181 238,946 457 43,860	December 31, 2019 1,367,584 1,072,079 98,181 234,979 124 43,860
	$ 3,276,107	2,816,807

281

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

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 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.

During the Board meeting on March 20, 2020, and the shareholders’ meeting on June 18, 2019, the Board and shareholders approved to distribute the 2019 and 2018 earnings, respectively, as follows:

Dividends distributed to common shareholders Cash	For the Years Ended December 31,	For the Years Ended December 31,	For the Years Ended December 31,	For the Years Ended December 31,
	2019 Dividend per share ($) Amount $ 3.30 465,792		2018 Dividend per share ($) Amount 3.00 384,447
	Dividend per share ($)		Dividend per share ($)
	$ 3.30		3.00

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EXCELSIOR MEDICAL CO., LTD.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

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

During the Board meeting on March 12, 2021, the Board approved the cash dividend to distribution of the 2020 earnings, as follows:

2020

Dividend per share ($) Amount

Dividends distributed to common shareholders Cash $

3.50 494,021

4.Other equity interest after tax

Exchange differences on translation of foreign financial statements $ (107,903) (88,110) (3,356) - - -	Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income 51,554 - - (19,601) 53,637 (301)	Total (56,349) (88,110) (3,356) (19,601) 53,637 (301)
$ (199,369)	85,289	(114,080)
$ (61,536) (44,911) (1,456) - - -	34,907 - - 12,463 38,780 (34,596)	(26,629) (44,911) (1,456) 12,463 38,780 (34,596)
$ (107,903)	51,554	(56,349)

283

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

(r) Share-based payment

As of December 31, 2020, the Company had share-based payment arrangements as follows:

Grant date Number of shares granted Contract term Recipients Vesting conditions	Equity-settled
	Cash capital increase reserved for employee subscription
	2019.12.18 1,950,000 shares - Employees of the Company and a part of subsidiaries -

Vesting conditions

1.Determining the fair value of equity instruments granted

The Company used Black-Scholes Model in measuring the fair value of the share-based payment at the grant date. The measurement inputs were as follows:

Fair value at grant date Share price at grant date Exercise price Expected volatility (%) Expected life (years) Expected dividend Risk-free interest rate (%)	2019 Cash capital increase reserved for employee subscription $ 8.72 53.70 45.00 9.83% 0.04 - % 0.60%

Expected volatility is based on the weighted average of historical volatility. The Company determined that there were no expected dividends. The risk free rate is determined based on the rate of 1-3 month time deposits of Bank of Taiwan on the date of measurement. Service and non-market performance conditions attached to the transactions are not considered in determining the fair value.

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EXCELSIOR MEDICAL CO., LTD.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

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

2.Expenses and liabilities recognized

The Company incurred expenses and liabilities of share-based arrangements in 2020 and 2019, respectively, as follows:

Expenses resulting from cash-settled share-based payment to employees

For the Years Ended December 31,	For the Years Ended December 31,
2020 $ -	2019 3,322

(s) Earnings per share

For the years ended December 31, 2020 and 2019, 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)	For the Years Ended December 31, 2020 2019 $ 571,670 514,755	For the Years Ended December 31, 2020 2019 $ 571,670 514,755
	2020 $ 571,670
	140,652	128,149

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) venue from contracts with customers Disaggregation of revenue Primary geographical markets Taiwan Major products: Product revenue Medical equipment and Supplies Medicines Household appliances Other Repair and maintenance revenue Other operating revenue	For the Years Ended December 31, 2020 2019 $ 571,670 514,755	For the Years Ended December 31, 2020 2019 $ 571,670 514,755
	2020 $ 571,670
	140,652 767	128,149 729
	141,419	128,878
	For the Years Ended December 31, 2020 2019 $ 4,199,740 3,964,690
	2020 $ 4,199,740
	$ 3,704,153 92,137 119,381 78,279 174,018 31,772	3,498,818 87,266 106,011 62,281 173,680 36,634
	$ 4,199,740	3,964,690

(t) Revenue from contracts with customers
1.Disaggregation of revenue

285

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EXCELSIOR MEDICAL CO., LTD. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

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

(u) Employee compensation and directors’ remuneration

(v) Non-operating income and expenses
1.Interest income

The details of interest income were as follows:

Interest income from bank deposits

2.Other income

The details of other income were as follows:

Dividend income

	For the Years Ended December	For the Years Ended December	31,
	2020	2019
$		1,246	4,408
	For the Years Ended December		31,
	2020	2019
$		6,329	3,443

286

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EXCELSIOR MEDICAL CO., LTD. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

(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, 2020 2019 $ 453 1,596 107 3,865 $ 560 5,461
	2020 $ 453 107
	$ 560

4.Other gains and losses

The details of other gains and losses were as follows:

Gains on disposal of property, plant, and equipment Foreign exchange gains (losses) Net gains or losses on financial assets (liabilities) measured at fair value through profit or loss Impairment reversal recognized on non-financial assets Others Total	For the Years Ended December 31, 2020 2019 $ - 51,156 941 (3,660) (200) 53 - 64 7,715 3,502 $ 8,456 51,115
	2020 $ - 941 (200) - 7,715
	$ 8,456

(w) Reclassification adjustments of components of other comprehensive income

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

		For the Years Ended	December 31,
		2020	2019
Equity instruments at fair value through other comprehensive income
Net changes in fair value	$	(18,539)	(25,221)
Net changes of fair value reclassified to retained earnings		301	34,596
Net gains or losses recognized in other comprehensive income	$	(18,238)	9,375

287

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EXCELSIOR MEDICAL CO., LTD.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

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

(x) Financial instruments
Credit risks
1) Credit risk exposure

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

2) Concentration of credit risk

To minimize credit risks of receivables, the Company 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, 2020 and 2019, 62.30% and 59.46%, respectively, of notes receivable and accounts receivable were three and two major customers. Thus, credit risk is significantly centralized.

2.Liquidity risks

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

Carrying amount	Contractual cash flow	On Demand or Less than 1 month	1-3 months	3-6 months	6-12 months	1-2years	More than 2years
$ 782,822 4,757 11,404 (11,358)	782,822 4,757 11,404 (11,358)	423,554 303 11,404 (11,358)	329,225 522 - -	29,845 324 - -	198 651 - -	- 760 - -	- 2,197 - -
$ 787,625	787,625	423,903	329,747	30,169	849	760	2,197
$ 450,000 877,661 12,961	450,000 877,661 12,961	450,000 530,948 385	- 231,800 771	- 103,787 869	- 11,126 1,744	- - 2,417	- - 6,775
$ 1,340,622	1,340,622	981,333	232,571	104,656	12,870	2,417	6,775

The Company 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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EXCELSIOR MEDICAL CO., LTD. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

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

3.Market risks
1) Currency risks

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

Functional currency	Functional currency	Currency	December 31, 2020 Foreign currency (inthousands) Carrying amount (TWD) $ 1,207 34,374 372,050 102,797 990 34,681 85,949 23,748 3,979,350 105,055 116,262 3,311,147 494,625 136,665 1,274 36,290 December 31, 2019 Foreign currency (inthousands) Carrying amount (TWD) $ 6,000 179,867 799,552 220,676 378 12,705 144,547 39,895 3,160,210 82,798 108,795 3,261,674
Financial assets Monetary items TWD 28.480 TWD 0.276 TWD 35.020 Non-Monetary items TWD 0.276 TWD 0.026 TWD 28.480 Financial liabilities Monetary items TWD 0.276 TWD 28.480 Functional currency Exchange rate		USD JPY EUR JPY KRW USD JPY USD Currency

	TWD TWD Functional currency
			Foreign currency (inthousands) $ 6,000 799,552 378 144,547 3,160,210 108,795
Financial assets Monetary items TWD 29.980 TWD 0.276 TWD 33.590 Non-Monetary items TWD 0.276 TWD 0.026 TWD 29.980		USD JPY EUR JPY KRW USD

289

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

Functional currency	Functional currency	Exchange rate	Currency	December 31, 2019 Foreign currency (inthousands) Carrying amount (TWD) 431,775 119,170 347 10,406 74 2,484
				Foreign currency (inthousands) 431,775 347 74
Financial liabilities Monetary items TWD TWD TWD		0.276 29.980 33.590	JPY USD EUR

	TWD TWD TWD

Since the Company 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, 2020 and 2019, foreign exchange gains or losses amounted to gains of $941 thousand and losses of $3,660 thousand, respectively.

2) Sensitivity analysis

The Company’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, 2020 and 2019 would have increased or decreased the net profit after tax by $9 thousand and $2,255 thousand, respectively. The analysis is performed on the same basis for both periods.

3) Interest rate risk

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

If interest had been 1% higher/lower, other variable remain the same, profit after tax in 2020 and 2019 would have increased/decreased by $3,511 thousand and $4,782 thousand, respectively, and it’s mainly because of variable interest rate deposit of the company.

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, 2020 and 2019 would have increased/decreased by $2,860 thousand and $3,053 thousand, respectively, as a result of the changes in fair values of financial assets at fair value through profit and loss and financial assets at fair value through other comprehensive income.

290

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EXCELSIOR MEDICAL CO., LTD.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

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

4.Fair value information

1) The categories and fair values of financial instruments

Financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income are measured on a recurring basis. The carrying amount and fair value of the Company’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:

	December 31, 2020	December 31, 2020	December 31, 2020	Total 166
Book value $ 166		Fair value
	Level 1 -	Level 2 166	Level 3 -
	30,397 128,802 -	- - -	- - 126,813	30,397 128,802 126,813
286,012	159,199	-	126,813	286,012
439,605 1,026,570 9,142	- - -	- - -	- - -	- - -
1,475,317	-	-	-	-
$ 1,761,495	159,199	166	126,813	286,178
$ 46	-	46	-	46
782,822 4,757	- -	- -	- -	- -
787,579	-	-	-	-
$ 787,625	-	46	-	46

291

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EXCELSIOR MEDICAL CO., LTD.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

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

	December 31, 2019	December 31, 2019	December 31, 2019	Total 33,961 122,693 148,602
		Fair value
	Level 1 33,961 39,895 -	Level 2 - - -	Level 3 - 82,798 148,602
305,256	73,856	-	231,400	305,256
749,196 1,017,030 8,758	- - -	- - -	- - -	- - -
1,774,984	-	-	-	-
$ 2,080,240	73,856	-	231,400	305,256
$ 450,000 877,661 12,961	- - -	- - -	- - -	- - -
$ 1,340,622	-	-	-	-

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

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

A. Financial assets measured at amortized cost

B. Financial assets and financial liabilities measured at amortized cost

292

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

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

3) Valuation techniques for financial instruments measured at fair value

The Company considers the financial status, operating analysis, most recent transaction price, non-active 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.

For the Company’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 fair values

Balance as of January 1, 2020 Total gains and losses recognized In other comprehensive income Reclassification Balance as of December 31, 2020 Balance as of January 1, 2019 Total gains and losses recognized In other comprehensive income Reclassification Balance as of December 31, 2019	Fair value through other comprehensive income unquoted equity instruments $ 231,400 (33,735) (70,852)
	$ 126,813
	$ 134,974 (19,696) 116,122
	$ 231,400

293

(ENGLISH TRANSLATION OF FINANCIAL STATEMENTS ORIGINALLY ISSUDED IN CHINESE)

EXCELSIOR MEDICAL CO., LTD. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

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

Total gains and losses recognized In other comprehensive income, and presented in “unrealized gains and losses from financial assets at fair value through other comprehensive income”	For the Years Ended December 31, 2020 2019 (33,735) (19,696)
	2020 (33,735)

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

The Company’s financial instruments that use Level 3 inputs to measure “fair value through ” other comprehensive income – equity investments without active market .

Quantified information of significant unobservable inputs was as follows:

The relationship Significant between significant non-observable Non-observable Item Valuation techniques inputs inputs and fair value Financial assets at fair Comparable Listed ‧ EV/Revenue ‧ The estimated value through other Companies Method Value Multiple (2.26 fair value would comprehensive income on December 31, increase (decrease) if － equity instruments 2020) the value multiple is investments without an ‧ higher (lower) and active market EV/EBITAVal the marketability discount is lower ue Multiple (14.95 on December 31, (higher) 2019)

‧ P/B Value Multiple (1.13~2.27 and 1.11~2.33 on December 31, 2020 and 2019)

‧ P/E Value Multiple (28.36 on December 31, 2019)

‧ Discount due to Lack of Market liquidity (26.13%~30.00% and 6.45%~30.00% on December 31, 2020 and 2019)

294

(ENGLISH TRANSLATION OF FINANCIAL STATEMENTS ORIGINALLY ISSUDED IN CHINESE)

EXCELSIOR MEDICAL CO., LTD. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

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

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

The Company’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:

Input	Variation	Impact on Fair Value Change on Other Comprehensive income or loss Favorable Change Unfavorable Change $ 8,126 (8,126) 11,293 (11,293)	Impact on Fair Value Change on Other Comprehensive income or loss Favorable Change Unfavorable Change $ 8,126 (8,126) 11,293 (11,293)
		Favorable Change
Value Multiple Discount due to Lack of Market liquidity Value Multiple Discount due to Lack of Market liquidity	5% 5% 5% 5%	$ 8,126 11,293
		$ 19,419	(19,419)
		$ 10,638 9,215	(10,638) (9,215)
		$ 19,853	(19,853)

(y) Financial risk management
1.Overview

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

1) credit risk
2) liquidity risk
3) market risk

The following likewise discusses the Company ’ 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 financial statements.

295

(ENGLISH TRANSLATION OF FINANCIAL STATEMENTS ORIGINALLY ISSUDED IN CHINESE)

EXCELSIOR MEDICAL CO., LTD. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

(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 Company’s risk management framework. The general manager, which reports to the Board of Directors, is responsible for the development of the Company-wide risk management policy and related systems and reports regularly to the Board of Directors.

The Company’s risk management policies are established to identify and analyze the risks faced by the Company, 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 Company. The Company, 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 Company’s Board of Directors oversees how management monitors compliance with the Company’s risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The Company’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 Company. As at the end of the reporting period, the Company s maximum exposure to credit risk which will cause a financial loss to the Company due to failure of counterparties to discharge an obligation and financial guarantees provided by the Company could arise from:

1) The carrying amount of the respective recognized financial assets as stated in the balance sheets; and
2) The amount of contingent liabilities in relation to financial guarantee issued by the Company.

In order to minimize credit risk, the management of the Company 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 Company 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 as of December 31, 2020.

4.Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’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 Company’s reputation.

296

(ENGLISH TRANSLATION OF FINANCIAL STATEMENTS ORIGINALLY ISSUDED IN CHINESE)

EXCELSIOR MEDICAL CO., LTD. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

(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 Company’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 Company 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 Company was as follows:

1) Currency risk

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

2) Interest rate risk

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

3) Other price risk

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

(z) Capital Management

The Company’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 Company 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 Company 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.

297

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EXCELSIOR MEDICAL CO., LTD.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

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

(aa) Investing and financing activities not affecting current cash flow

The Company’s investing and financing activities which did not affect the current cash flow in the year ended December 31, 2020 and 2019, were as follows:

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

Reconciliation of liabilities arising from financing activities were as follows:

Short-term borrowings Lease liabilities Total liabilities from financing activities Short-term borrowings Lease liabilities Total liabilities from financing activities	January 1, 2020 Cash flows $ 450,000 (450,000) 12,961 (3,793)	Non-cash changes Acquisition Others December 31, 2020 - - - 3,612 (8,023) 4,757
	$ 462,961 (453,793)	3,612 (8,023) 4,757
	January 1, 2019 Cash flows $ - 450,000 17,497 (4,572)	Non-cash changes Acquisition Others December 31, 2020 - - 450,000 36 - 12,961
	$ 17,497 445,428	36 - 462,961

(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 financial statements.

Name of related party
Excelsior Investment Co., Ltd.
Excelsior Group Holdings Co., Ltd.
Dynamic Medical Technologies Inc.
Dynamic Medical Technologies (Hong Kong)
Ltd.
Guangzhou Dynamic Inc.
Excelsior Beauty Co., Ltd.
Arich Enterprise Co., Ltd.
Bestsmile Co., Ltd.
Excelsior Healthcare Co., Ltd.
Excelsior Investment (Malaysia) Co., Ltd.
RENAL LABORATORIES SDN. BHD.
MEDI-CHEM SYSTEMS SDN. BHD.
RENAL MANAGEMENT SDN. BHD.
Excelsior Medical Co., Limited (Hong Kong)

Relationship with the Company

Entities with significant influence over the
Company
〞
Subsidiary
〞
〞
〞
〞
〞
〞
〞
〞
〞
〞
〞

298

(ENGLISH TRANSLATION OF FINANCIAL STATEMENTS ORIGINALLY ISSUDED IN CHINESE)

EXCELSIOR MEDICAL CO., LTD.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

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

Name of related party Relationship with the Company SinoExcelsior Investment Inc. Subsidiary EG Healthcare Inc. 〞 Excelsior Asset Management Co., Ltd. Joint venture before August 2, 2019 (Excelsior Asset) CYJ International Taiwan Inc. Associate before October 1, 2019 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. 〞 Arich Best Chain Co., Ltd. 〞 Exceed Healthcare Co., Ltd. 〞 Excelsior Long Term Care Corporation Entity 〞 Excelsior Osteology Co., Ltd. Associate before December 25, 2019 Hung Shun Chen Investment Co., Ltd. Other related parties SciVision Biotech Inc. 〞 Excelsior Health Foundation 〞 Triple AI Technology Co., Ltd. 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 Company to related parties were as follows:

Subsidiaries Associates－Bestchain Associates－ERS Associates－Others Other related parties	For the Years Ended December 31, 2020 2019 $ 52,450 27,749 1,788,061 1,592,769 762,596 726,854 22,636 22,003 373 39	For the Years Ended December 31, 2020 2019 $ 52,450 27,749 1,788,061 1,592,769 762,596 726,854 22,636 22,003 373 39
	2020 $ 52,450 1,788,061 762,596 22,636 373
	$ 2,626,116	2,369,414

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

299

(ENGLISH TRANSLATION OF FINANCIAL STATEMENTS ORIGINALLY ISSUDED IN CHINESE)

EXCELSIOR MEDICAL CO., LTD. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

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

2) Repair and maintenance revenue

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

Subsidiaries Associates－ERS Associates－Bestchain	For the Years Ended December 31, 2020 2019 $ 422 242 85,521 70,754 2,589 5,345	For the Years Ended December 31, 2020 2019 $ 422 242 85,521 70,754 2,589 5,345
	2020 $ 422 85,521 2,589
	$ 88,532	76,341

3) Other operating revenue-rental revenue

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

Entities with significant influence over the Company Subsidiaries Associates－ERS Associates－Others Other related parties	For the Years Ended December 31, 2020 2019 $ 72 72 1,331 5,094 2,661 2,290 1,903 2,013 96 47	For the Years Ended December 31, 2020 2019 $ 72 72 1,331 5,094 2,661 2,290 1,903 2,013 96 47
	2020 $ 72 1,331 2,661 1,903 96
	$ 6,063	9,516

4) Other operating revenue-service revenue

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

Subsidiaries－Dynamic Medical Technologies Inc. Subsidiaries－Others Associates－ERS Associates－ABH Associates－Bestchain Associates－Others Other related parties	For the Years Ended December 31, 2020 2019 $ 2,516 2,536 1,278 2,337 7,424 9,512 2,296 2,137 2,135 2,199 360 112 166 -	For the Years Ended December 31, 2020 2019 $ 2,516 2,536 1,278 2,337 7,424 9,512 2,296 2,137 2,135 2,199 360 112 166 -
	2020 $ 2,516 1,278 7,424 2,296 2,135 360 166
	$ 16,175	18,833

300

(ENGLISH TRANSLATION OF FINANCIAL STATEMENTS ORIGINALLY ISSUDED IN CHINESE) EXCELSIOR MEDICAL CO., LTD. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

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

2.Purchases from related parties

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

Associates

For	the Years Ended	December 31,
	2020	2019
$	9,014	6,473

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

3.Receivables from related parties

Receivables from related parties were as follows:

Accounted for as Category of related party	December 31, 2020 December 31, 2019 $ 24,721 14,257 455,219 455,067 159,022 146,371 8,272 9,476 56 130 420 466 8 - $ 647,718 625,767
Accounts receivable Subsidiaries Accounts receivable Associates－Bestchain Accounts receivable Associates－ERS Accounts receivable Associates－Others Other receivables Subsidiaries Other receivables Associates Other receivables Other related parties

4.Payables to related parties

Payables to related parties were as follows:

Accounted for as Category of related party	December 31, 2020 December 31, 2019 $ 4,666 1,931 5,187 4,454 16 3 $ 9,869 6,388
Accounts payable Associates Other payables Associates Other payables Subsidiaries

5.Property transactions

In November 2015, the Company entered into a purchase agreement with Excelsior Asset Management Co., Ltd. regarding the real estate in Xizhi. The transaction of disposal has been completed, resulting in an unrealized profit of $51,898 thousand in January 2016. On August 2, 2019, the Company acquired the remaining 49% shares of Excelsior Asset, wherein it had been reclassified from unrealized to realized profit.

301

(ENGLISH TRANSLATION OF FINANCIAL STATEMENTS ORIGINALLY ISSUDED IN CHINESE) EXCELSIOR MEDICAL CO., LTD. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

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

6.Guarantee

As of December 31, 2020 and 2019, the Company provided its subsidiaries guarantees for loans, with the credit limits of $224,745 thousand and $79,215 thousand, wherein the amounts utilized were $112,564 thousand and $12,998 thousand, respectively.

As of December 31, 2019 and 2018, the Company also provided its associates guarantees for loans, with the credit limits of $661,200 thousand and $761,200 thousand, wherein the amounts utilized were $76,000 thousand and $100,000 thousand, respectively.

As of December 31, 2020 and 2019, the Company provided its subsidiaries guarantees for investment project, with the credit limits of $58,831 thousand and $87,420 thousand, respectively, which were not yet utilized.

7.Lease
1) In 2018, the Company 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, 2020 and 2019, the Company recognized the amount of $2 thousand and $4 thousand as interest expense. As of December 31, 2020 and 2019, the balance of lease liabilities amounted to $139 thousand and $257 thousand, respectively.

8.Others

Others
Associates and Other related parties Fright and warehousing expenses	For the Years Ended December 31, 2020 2019 $ (48,318) (40,410)
	2020 $ (48,318)

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

As of December 31, 2020 and 2019, the Company had received collections in advance from associates for $1,000 thousand and $0 thousand as of 2020, respectively.

The outstanding receivables from related parties are unsecured. For the years ended December 31, 2020 and 2019, no impairment loss was recognized for receivables from related parties.

The outstanding payables to related parties are unsecured.

(d) Key management personnel compensation

Key management personnel compensation comprised:

Short-term employee benefits Post-employment benefit Share-based payment	For the Years Ended December 31, 2020 2019 $ 44,339 41,645 432 432 - 1,282	For the Years Ended December 31, 2020 2019 $ 44,339 41,645 432 432 - 1,282
	2020
	$ 44,339 432 -
	$ 44,771	43,359

302

(ENGLISH TRANSLATION OF FINANCIAL STATEMENTS ORIGINALLY ISSUDED IN CHINESE)

EXCELSIOR MEDICAL CO., LTD. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

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

(8) Pledged Assets

The carrying amounts of pledged assets were as follows:

Pledged assets	Object	December 31, 2020 December 31, 2019 $ - 507 - 101,486 $ - 101,993
Time deposits Property, plant and equipment	Bank guarantee Bank loans

(9) Significant Commitments and Contingencies

(a) Unrecognized contractual commitments

As of December 31, 2020 and 2019, the unused letters of credit were $33,390 thousand and $53,278 thousand, respectively. The guarantee letters issued by banks for sales contract guarantee were all $36,000 thousands.
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.
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.
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 months 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.

303

(ENGLISH TRANSLATION OF FINANCIAL STATEMENTS ORIGINALLY ISSUDED IN CHINESE) EXCELSIOR MEDICAL CO., LTD. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

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

(12) Others

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

were as follows:
By function By item	For the Years Ended December 31, 2020			For the Years Ended December 31, 2019
	Operating cost	Operating expense	Total	Operating cost	Operating expense	Total
Employee benefits Salary Labor and health insurance Pension Remuneration of directors Others Depreciation Amortization	38,695 3,534 2,072 - 1,527 3,223 130	155,577 11,092 5,465 26,664 5,877 20,536 2,140	194,272 14,626 7,537 26,664 7,404 23,759 2,270	39,820 3,611 2,092 - 1,554 6,085 236	168,914 10,688 5,245 24,538 5,666 20,121 1,577	208,734 14,299 7,337 24,538 7,220 26,206 1,813

For the years ended December 31, 2020 and 2019, the numbers of employees and their benefit expenses were as follows:

expenses were as follows:
Numbers of employees Numbers of directors who were non-employees The average employee benefits The average salaries and wages Average adjustment rate of employee salaries Remuneration received by supervisors	2020 206 8 $ 1,131 $ 981 (7.45)% $ -	2019
		205
		8
		1,206
		1,060
		9.05%
		-

The Company’s salary and remuneration policy (including directors, managers, and employees) is as follows:

The salary and remuneration of employee was agreed upon by labor and management, was adjusted in accordance with employee ’ s operating status, price level, contributions, abilities, and performance appraisal. The aforesaid salary and compensation shall not lower than the minimum wage approved by central competent authorities.

Wage means the remuneration which a worker receives for his/her services rendered, including wages, salaries and bonuses, allowances and any other regular payments regardless of the name which may be computed on an hourly, daily, monthly and piecework basis, whether payable in cash or in kind. Non-salary are non-regular payments in Article 10 of Enforcement Rules of the Labor Standards Act.

The salary and remuneration which the Company paid to directors and managers shall refer to their participation and contribution to the Company. The aforesaid salary and remuneration includes fixed salary, professional practice fee, pension, remuneration, and any bonus.

304

(ENGLISH TRANSLATION OF FINANCIAL STATEMENTS ORIGINALLY ISSUDED IN CHINESE)

EXCELSIOR MEDICAL CO., LTD. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

(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 Company for the year ended December 31, 2020:

Fund financing to other parties: None.
Guarantees and endorsements for other parties:

(Expressed in thousands of New Taiwan dollars)

No.	Endorsement/ guarantee provider	Counter-party	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 0 0 1 2 3	The Company 〃〃〃〃〃〃〃 Dynamic Medical Technologies Inc. Excelsior Beauty Co., Ltd. Arich Enterprise Co.,Ltd.	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) Renal Laboratories Sdn Bhd (Note 4) Excelsior Renal Service Co., Limited (Note 3) Bestchain Healthtaiwan Co., Ltd. (Note 3) Dynamic Medical Technologies (Hong Kong) Ltd. (Note 6) Dynamic Medical Technologies Inc. (Note 7) Taiwan Shionogi Inc. (Note 5)	2 2 2 2 2 2 1 1 2 3 1	1,518,179 1,518,179 1,518,179 1,518,179 1,518,179 1,518,179 762,596 1,788,061 258,186 66,377 171,415	88,091 100,000 59,215 20,000 14,745 73,725 - 861,200 59,970 1,000 -	58,831 100,000 29,305 10,000 14,240 71,200 - 661,200 54,682 - -	- 100,000 - 10,000 1,282 1,282 - 76,000 - - -	- - - - - - - - - - -	0.78% 1.32% 0.39% 0.13% 0.19% 0.94% - % 8.71% 4.24% - % - %	7,590,897 7,590,897 7,590,897 7,590,897 7,590,897 7,590,897 7,590,897 7,590,897 645,465 165,942 890,352	Y Y Y Y Y Y Y	Y

Note 1: the description of number column:

0 is issuer.
Investees are listed by name and numbered starting with 1.

Note 2: Relationship with the Company

The companies with which it has business relations.
Subsidiaries in which the Company directly or indirectly holds more than 50% of its total outstanding common shares.
The parent company which directly or indirectly holds more than 50% of its voting rights.
Subsidiaries in which the Company directly or indirectly holds more than 90% of its voting rights.
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.
Shareholders making endorsements and/or guarantees for their mutually invested company in proportion to their shareholding percentage.
Companies in the same type of business providing guarantees of pre-sale contracts according to the regulation.

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.

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.

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.

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.

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.

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

305

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EXCELSIOR MEDICAL CO., LTD.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

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

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	Ending balance	Ending balance	Notes
				Number of shares	Book value	Percentage of shares	Market value
The Company 〞〞〞〞〞〞〞〞〞 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.	Stock SciVision Biotech Inc. 3-D Matrix, Ltd. Caregen Co., Ltd Gie Cheng Co., Ltd. Missioncare Co., Ltd. Missioncare Asset Management Co., Ltd. Rui Guang Healthcare Co., Ltd. Arcos Bio-Tech Corporation Sunder Biomedical Tech. Co., Ltd. Linkon International Golf & Country Club 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. Stock 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 〞	492,650 297,400 55,500 3,795,000 1,580,526 669,473 2,423,951 51,014 2,279,578 1 10,000 1 1,189,539 34,500 250 263,340 -	30,397 23,747 105,055 21,138 21,827 6,936 24,021 294 44,247 8,350 28,026 404 73,395 65,403 - 2,867 279,330	0.81% 0.71% 0.52% 17.25% 1.09% 1.05% 7.15% 2.71% 3.80% 0.10% 8.00% - % 1.95% 0.32% - % 19.00% 17.65%	30,397 23,747 105,055 21,138 21,827 6,936 24,021 294 44,247 8,350 28,026 404 73,395 65,403 - 2,867 279,330	Note

Note : Act as limited company, no outstanding share.

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

306

(ENGLISH TRANSLATION OF FINANCIAL STATEMENTS ORIGINALLY ISSUDED IN CHINESE)

EXCELSIOR MEDICAL CO., LTD. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

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

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	Transaction details	Transactions with terms different from others	Transactions with terms different 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 〞	(762,596) (1,788,061)	(18.16)% (42.58)%	Net 30-60 days Net 30-90 days	- -		159,022 455,219	15.24% 43.62%	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.
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 〞	159,022 455,219	4.99 3.93	- -	- -	157,085 300,359	- -

Derivative transactions:

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

(b) Information on investees:

For the year ended December 31, 2020, 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	Net income (loss) of the investee	Investment income (losses)	Notes
				Ending balance	Beginning balance	Shares	Ratio of shares	Book value
The Company J L 〞 B H L 〞 A L	iate Excesior Co., td. estchain ealthtaiwan Co., td. rich Enterprise Co., td.	New Taipei City New Taipei City New Taipei City	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	5,279 277,647 380,856	5,279 277,647 197,604	1,607,200 41,150,196 29,829,742	49.00% 44.68% 40.00%	34,939 510,099 710,324	30,256 170,165 47,249	14,826 75,953 18,834	Associate Associate (Note 1) Subsidiary (Notes 2)

307

(ENGLISH TRANSLATION OF FINANCIAL STATEMENTS ORIGINALLY ISSUDED IN CHINESE)

EXCELSIOR MEDICAL CO., LTD.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

(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	Net income (loss) of the investee	Investment income (losses)	Notes
				Ending balance	Beginning balance	Shares	Ratio of shares	Book value
The Company 〞〞〞〞〞〞〞〞 Excelsior Healthcare Co., Limited 〞〞〞 Dynamic Medical Technologies Inc. 〞〞	Dynamic Medical Technologies Inc. Excelsior Healthcare Co., Limited Bestsmile Co., Ltd. Visionfront Corporation Sunrise Health Care Company Excelsior Medical Co., Limited (Hong Kong) Excelsior Beauty Co., Ltd. Excelsior Asset Management Co., Ltd. Medifly Co., Ltd. EG Healthcare, Inc. Excelsior Renal Service Co., Limited Excelsior Medical Co., Limited (Hong Kong) Excelsior Investment (Malaysia) Co., Ltd Dynamic Medical Technologies (Hong Kong) Ltd. Excelsior Beauty Co., Ltd. Medytox Taiwan Inc.	New Taipei City British Virgin Islands New Taipei City New Taipei City New Taipei City Hong Kong New Taipei City New Taipei City Taichung Philippines Hong Kong Hong Kong British Virgin Islands Hong Kong New Taipei City New Taipei City	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 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	180,300 1,244,687 32,093 44,069 18,806 1,588,746 91,984 780,525 31,899 19,256 312,505 862,529 166,346 382,278 138,745 18,000	180,300 1,244,687 32,093 44,069 18,806 1,588,746 91,984 780,525 31,899 19,256 312,505 862,529 139,467 382,278 138,745 18,000	11,550,425 39,411,623 1,150,874 2,434,870 2,085,547 53,154,741 11,534,804 80,398,900 3,615,976 5,293,453 73,375,728 29,439,829 5,395,436 98,777,228 15,154,496 1,800,000	38.50% 100.00% 98.02% 44.47% 23.97% 64.36% 41.02% 100.00% 28.66% 99.99% 49.00% 35.64% 100.00% 100.00% 53.89% 40.00%	510,182 1,683,345 5,585 23,259 28,064 1,604,550 136,313 606,569 83,433 70,349 399,999 888,536 149,897 257,027 174,001 1,192	115,995 114,217 (1,009) (1,328) 1,427 76,271 6,719 4,740 49,889 14,305 158,817 76,271 (1,295) 10,273 6,719 (1,414)	44,658 114,217 (989) (590) 342 49,088 3,047 4,740 14,298 - - - - - - -	Subsidiary Subsidiary Subsidiary Associate Associate Subsidiary Sub-subsidiary Subsidiary Associate Sub-subsidiary Associate Subsidiary Sub-subsidiary Subsidiary Subsidiary (Note 1) Associate

308

(ENGLISH TRANSLATION OF FINANCIAL STATEMENTS ORIGINALLY ISSUDED IN CHINESE)

EXCELSIOR MEDICAL CO., LTD.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

(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	Net income (loss) of the investee	Investment income (losses)	Notes
				Ending balance	Beginning balance	Shares	Ratio of shares	Book value
Dynamic Medical Technologies (Hong Kong) Ltd. 〞 Excelsior Beauty Co., Ltd. Excelsior Medical Co., Limited (Hong Kong) Excelsior Investment (Malaysia) Co., Ltd 〞 MEDI-CHEM SYSTEMS SDN. BHD.	Excelsior Beauty Limited of Hong Kong 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.	Hong Kong Hong Kong New Taipei City Cayman Islands Malaysia Malaysia Malaysia	Sale of professional weight-loss and 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	- 66,547 97,920 1,395,079 136,982 25,865 1,315	25,198 66,547 97,920 1,395,079 128,572 7,397 1,315	- 2,150,000 9,792,000 338,800 16,773,586 350,000 200,000	- % 50.00% 80.00% 49.38% 70.00% 70.00% 100.00%	- 9,864 80,778 1,404,421 168,133 39,093 9,154	- (2,993) (12,254) 124,426 1,376 (1,372) 256	- - - - - - -	Sub-subsidiary (Note 4) Associate Sub-subsidiary Associate Sub-subsidiary Sub-subsidiary Sub-subsidiary

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: Excelsior Beauty Limited of Hong Kong has liquidation completed in January, 2020.

(c) Information on investment in Mainland China:

1. 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	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)	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	- - 84,187 291,579 44,346	(2) (2) (2) (2) (2)	30,240 29,213 80,327 947,845 119,574	- - - - -	- - - - -	30,240 29,213 80,327 947,845 119,574	- - (55,283) 4,374 678	- % - % 7.80% 100.00% 100.00%	- - - 4,374 678	- - 28,026 130,872 12,161	- - - - -

309

(ENGLISH TRANSLATION OF FINANCIAL STATEMENTS ORIGINALLY ISSUDED IN CHINESE)

EXCELSIOR MEDICAL CO., LTD.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

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

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	Current investment gains and losses	Carrying Amount	Accumulated Inward Remittance of Earnings
					Out-flow	Inflow
Beijing Dynamic Inc. (Note 7) National Pharmaceutical Logistics Corp., Ltd.	Sale and maintenance of medical equipment Medical logistics	- 370,493	(2) (3)	34,424 66,603	- -	- -	34,424 66,603	- 152,384	- % 17.65%	- -	- 279,330	- 49,732

Limitation on investment in Mainland China:

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 Medical Technologies Inc. Arich Enterprise Co., Ltd.	1,087,625 153,998 66,603	1,289,640 153,998 66,603	4,554,538 774,558 1,068,422

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 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.

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, 2020, 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 Medical Technologies Inc. is the 60% of net value. (2)The upper limit on investment of Arich Enterprise Co., Ltd. is the higher of $80,000 thousand or 60% of net value.
Note 9: All amounts listed are disclosed in NTD.
Significant transactions:

(d) 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

Please refer the consolidated financial statements for the year ended December 31, 2020.

310

EXCELSIOR MEDICAL CO., LTD.

STATEMENT OF CASH AND CASH EQUIVALENTS

DECEMBER 31, 2020

(Expressed in Thousands of New Taiwan Dollars)

Item	Description	Amount $ 67 171 289,481 11,895 102,797 34,681 4 149,377 509 149,886 $ 439,605
Cash Cash in bank Total	Petty cash Checking accounts Demand deposits Foreign deposits USD 418 thousand JPY 372,050 thousand EUR 990 thousand CNY 1 thousand Time deposits Subtotal

STATEMENT OF NOTES RECEIVABLE

Client Name	Description	Amount $ 7,992 5,823 47,393	Note
Youlin Industrial Ltd. Grant River Co., Ltd. Other Total			The year-end balance of each client does not exceed 5% of the account balance.
		$ 61,208

311

EXCELSIOR MEDICAL CO., LTD.

STATEMENT OF ACCOUNTS RECEIVABLE

DECEMBER 31, 2020

(Expressed in Thousands of New Taiwan Dollars)

Client Name	Description	Amount $ 455,219 159,022 32,993
Related Parties: Bestchain Healthtaiwan Co., Ltd. Excelsior Renal Service Co., Limited Other Subtotal Non-related Parties: Ikko Corporation Chung Shan Medical University Hospital Hi-Clearance Inc. Other Subtotal Total Less: Allowance for Impairment Net Amount	Payment for goods 〞〞〞〞〞〞
		647,234
		19,474 18,561 18,496 278,641
		335,172
		982,406 (20,850)
		$ 961,556

312

EXCELSIOR MEDICAL CO., LTD.

STATEMENT OF OTHER RECEIVABLES

DECEMBER 31, 2020

(Expressed in Thousands of New Taiwan Dollars)

Item	Description	Amount $ 272 134 78
Related Parties: Excelsior Renal Service Co., Limited Asia Best Healthcare Co., Limited Other Non-related Parties: Total	Advances paid for related parties 〞 Subtotal Interest receivable Other Subtotal
		484
		5 3,317
		3,322
		$ 3,806

STATEMENT OF INVENTORIES

Item	Amount Cost Net realized value $ 491,314 565,022 89,075 111,620	Amount Cost Net realized value $ 491,314 565,022 89,075 111,620
	Cost $ 491,314 89,075
Merchandise Inventory in-transit Total
	$ 580,389	676,642

313

EXCELSIOR MEDICAL CO., LTD.

STATEMENT OF CHANES IN FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

FOR THE YEAR ENDED DECEMBER 31, 2020

(Expressed in Thousands of New Taiwan Dollars)

Beginning balance Shares Fair value 473,000 $ 33,961 302,400 39,895 55,000 82,798 156,654 3,795,000 30,056 1,580,526 19,172 669,473 6,969 2,423,951 27,197 51,014 549 2,279,578 56,534 1 8,125 148,602 $ 305,256	Addition Shares Amount 23,650 - - - - 22,257 22,257 - - - 2,655 - - - - - - - - - 225 2,880 25,137	Addition Shares Amount 23,650 - - - - 22,257 22,257 - - - 2,655 - - - - - - - - - 225 2,880 25,137	Decrease Shares Amount 4,000 3,564 5,000 16,148 - - 19,712 - 8,918 - - - 33 - 3,176 - 255 - 12,287 - - 24,669 44,381	Decrease Shares Amount 4,000 3,564 5,000 16,148 - - 19,712 - 8,918 - - - 33 - 3,176 - 255 - 12,287 - - 24,669 44,381	Ending balance Shares Fair value 492,650 30,397 297,400 23,747 55,000 105,055 159,199 3,795,000 21,138 1,580,526 21,827 669,473 6,936 2,423,951 24,021 51,014 294 2,279,578 44,247 1 8,350 126,813 286,012	Ending balance Shares Fair value 492,650 30,397 297,400 23,747 55,000 105,055 159,199 3,795,000 21,138 1,580,526 21,827 669,473 6,936 2,423,951 24,021 51,014 294 2,279,578 44,247 1 8,350 126,813 286,012
	Shares 23,650 - - - - - - - - -		Shares 4,000 5,000 - - - - - - - -		Shares 492,650 297,400 55,000 3,795,000 1,580,526 669,473 2,423,951 51,014 2,279,578 1

		22,257		19,712		159,199
		- 2,655 - - - - 225		8,918 - 33 3,176 255 12,287 -		21,138 21,827 6,936 24,021 294 44,247 8,350
148,602		2,880		24,669		126,813
$ 305,256		25,137		44,381		286,012

314

EXCELSIOR MEDICAL CO., LTD.

STATEMENT OF CHANGES INVESTMENTS ACCOUNTED FOR USING

EQUITY METHOD

FOR THE YEAR ENDED DECEMBER 31, 2020

(Expressed in Thousands of New Taiwan Dollars)

Beginning balance Shares Amount 11,550,425 $ 506,633 17,612,921 496,938 1,607,200 20,685 35,708,258 397,779 39,411,623 1,626,378 1,150,874 6,574 2,434,870 23,849 2,085,547 27,703 53,154,741 1,612,294 11,534,804 146,508 80,000,000 601,829 3,228,550 73,906 $ 5,541,076	Addition Shares Amount - 45,600 12,216,821 231,546 - 14,826 5,441,938 112,320 - 114,483 - - - - - 361 - 49,201 - 3,047 398,900 4,740 387,426 15,338 591,462	Addition Shares Amount - 45,600 12,216,821 231,546 - 14,826 5,441,938 112,320 - 114,483 - - - - - 361 - 49,201 - 3,047 398,900 4,740 387,426 15,338 591,462	Decrease Shares Amount - 42,051 - 18,160 - 572 - - - 57,516 - 989 - 590 - - - 56,945 - 13,242 - - - 5,811 195,876	Decrease Shares Amount - 42,051 - 18,160 - 572 - - - 57,516 - 989 - 590 - - - 56,945 - 13,242 - - - 5,811 195,876		Ending balance	Amount 510,182 710,324 34,939 510,099 1,683,345 5,585 23,259 28,064 1,604,550 136,313 606,569 83,433	Market value o	r net assets value Total amount 567,126 748,727 34,979 536,523 1,706,597 5,585 23,259 28,064 1,604,550 136,134 814,492 83,580
	Shares - 12,216,821 - 5,441,938 - - - - - - 398,900 387,426		Shares		Shares 11,550,425 29,829,742 1,607,200 41,150,196 39,411,623 1,150,874 2,434,870 2,085,547 53,154,741 11,534,804 80,398,900 3,615,976	Percentage of ownership 38.50% 40.00% 49.00% 44.68% 100.00% 98.02% 44.47% 23.97% 64.36% 41.02% 100.00% 28.66%		Unit price 49.10 25.10 - - - - - - - - - -
			- - - - - - - - - - - -
$ 5,541,076		591,462		195,876			5,936,662		6,289,616

Note: Net assets value of unlisted companies was according to the report issued by the investee or the audit report of the investee.

315

EXCELSIOR MEDICAL CO., LTD.

STATEMENT OF ACCOUNTS PAYABLE

December 31, 2020

(Expressed in Thousands of New Taiwan Dollars)

Client Name	Amount $ 3,942 724	Note
Related Parties: Medifly Co., Ltd. Bestchain Healthtaiwan Co., Ltd. Subtotal Non-related Parties: Medtronic (Taiwan) Ltd. Asahi Kasei Kuraray Medical Co., Ltd. Chi Sheng Pharma & Biotech Co., Ltd. Sunder Biomedical Tech. Co., Ltd. Other Subtotal Total		The year-end balance of each client does not exceed 5% of the account balance.
	4,666
	160,884 128,377 57,208 41,525 227,533
	615,527
	$ 620,193

STATEMENT OF OTHER PAYABLES

Item	Description	Amount $ 67,514 28,729 18,189 8,959 3,235 2,448 33,159 $ 162,233
Other payables Total	Employee wages and bonuses payable Salaries and bonuses payable Remuneration payable of directors Compensated absence payable Insurance payable Professional fees payable Other

316

EXCELSIOR MEDICAL CO., LTD. STATEMENT OF OPERATING REVENUE

FOR THE YEAR ENDED DECEMBER 31, 2020

(Expressed in Thousands of New Taiwan Dollars)

Item Sales revenue Surgical supplies Artificial kidneys, blood tubing sets, lumbar puncture needles Erythropoietin, liquid medicines, powder medicines Blood bags Medical supplies Medical equipment Medicines Household appliances Other Subtotal Repair and maintenance revenue Other operating revenue Net	Quantity	Amount $ 1,475,340 1,068,129 753,510 178,281 123,450 105,443 92,137 119,381 78,279	Note
	2,379,034 pieces 11,207,111 pieces /pairs 4,328,042 doses/buckets/ packs 589,363 bags 3,551,612 packs/pieces 1,054 sets 1,808,498 pills 37,652 sets
		3,993,950 174,018 31,772
		$ 4,199,740

317

EXCELSIOR MEDICAL CO., LTD. STATEMENT OF OPERATING COSTS

FOR THE YEAR ENDED DECEMBER 31, 2020

(Expressed in Thousands of New Taiwan Dollars)

Item Cost of Goods Sold Inventory, January 1 Add: Purchase Transfer to inventory Other Less: transfer to property, plant and equipment Inventory, December 31 Cost of Goods Sold Repair and maintenance costs Other operating costs Reversal on invnetory valuation and obsolescence Operating costs	Amount $ 585,241 3,483,370 72 4,509 (16,543) (614,344) 3,442,305 83,159 3,154 (14,610) $ 3,514,008

318

EXCELSIOR MEDICAL CO., LTD.

STATEMENT OF SELLING EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 2020

(Expressed in Thousands of New Taiwan Dollars)

Item	Amount $ 62,096 49,065 13,759 11,590 70,409	Note
		The year-end balance of each account does not exceed 5% of the account balance. Note
	$ 206,919
Salary and wages expense Other		The year-end balance of each account does not exceed 5% of the account balance.
	$ 158,015

319

Up to the Publication Date of this Annual Report, Has the Group Experienced Financial Turnover Difficulties: None.

320

VII. Review and Analysis of Financial Status, Financial Performance, and Risk Management

321

1. Financial Status

(1) Comparative analysis of financial status

Unit: NT$ thousands

			Unit: NT$thousands	Unit: NT$thousands
Year Item	2020	2019	Difference
			Amount	`％`
Current assets	8,501,800	8,614,685	(112,885)	(1.31)
Property, plant and equipment	534,339	560,863	26,524	4.73
Intangible assets	32,653	31,967	686	2.15
Other assets	4,935,840	4,557,469	378,371	8.30
Total assets	14,004,632	13,764,984	239,648	1.74
Current liabilities	4,019,932	4,829,102	(809,170)	(16.76)
Non-current liabilities	404,996	303,970	101,026	33.24
Total liabilities	4,424,928	5,133,072	(708,144)	(13.80)
Equity attributable to owners ofparent	7,590,897	6,946,341	644,556	9.28
Share capital	1,411,490	1,281,490	130,000	10.14
Capital surplus	3,276,107	2,816,807	459,300	16.31
Retained earnings	3,017,380	2,904,393	112,987	3.89
Other equity	(114,080)	(56,349)	(57,731)	102.45
Treasurystock	—	—	—	—
Non-controlling interests	1,988,807	1,685,571	303,236	17.99
Total equity	9,579,704	8,631,912	947,792	10.98
Note: 1. Current liabilities and total liabilities in 2020 decreased mainly due to repayments of short-term borrowings with capital injection by cash. 2. Non-current liabilities in 2020 increased mainly due to increase in non- current lease liabilities. 3. Other equity in 2020 decreased mainly due to increase in loss of exchange differences on translation. 4. Equity attributable to owners of parent and total equity in 2020 increased mainly due to capital injection bycash.

(2) Future plan shall be described in the case of material impacts: No material impacts have been affected to the Company finance and business.

322

2. Financial Performance

(1) Comparative analysis of financial performance

Unit: NT$ thousands

Year Item	Financial Information for the last 2years	Financial Information for the last 2years	Difference	Difference
	2020	2019	Amount	`（％）`
Operatingrevenue	6,675,494	6,457,362	218,132	3.4
Grossprofit	1,306,498	1,236,055	70,443	5.7
Net operatingincome	529,070	464,039	65,031	14.0
Non-operating income and expenses	300,313	282,786	17,527	6.2
Profit before tax	829,383	746,825	82,558	11.1
Profit from continuing operations	669,086	622,274	46,812	7.5
Loss from discontinuing operations	—	—	—	—
Profit	669,086	622,274	46,812	7.5
Other comprehensive income, net	(28,296)	23,915	(52,211)	(218.3)
Total comprehensive income	640,790	646,189	(5,399)	(0.8)
Profit attributable to owners of parent	571,670	514,755	56,915	11.1
Profit attributable to non- controllinginterests	97,416	107,519	(10,103)	(9.4)
Comprehensive income attributable to owners ofparent	513,296	523,062	(9,766)	(1.9)
Comprehensive income attributable to non-controlling interests	127,494	123,127	4,367	3.5
Earningsper share	4.06	4.02	0.04	1.0
Analysis of deviation over 20% and amounts exceeding NT$10 million: 1.Other comprehensive income in 2020 decreased mainly due to increase in loss of exchange differences on translation.

(2) Analysis of gross profit deviation: Gross profit increase (decrease) didn’t reach 20%.

(3) Provide a sales volume forecast and the basis therefor, and describe the effect upon the Company’s financial operations as well as measures to be taken in response: Please see “Report to Shareholders.”

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3. Cash Flows

(1) Analysis of cash flows in the most recent year

Unit: NT$ thousands

Cash beginning balance (A)	Net cash flows from operating activities (B)	Net cash flows from non- operating activities(C)	Cash ending balance (deficit) (A)`＋`(B)`＋`(C)	Remedy for cash deficit	Remedy for cash deficit
				Investment plan	Financing plan
$2,828,776	$869,433	($1,079,745)	$2,618,464	`－`	`－`
Analysis of cash flows in 2020 1.Operating activities: Mainly due to profit from operations and the decrease in receivables. 2.Investing activities: Mainly due to acquisition of financial assets at amortized cost and acquisition of investment property. 3.Financing activities: Mainly due to cash dividends distribution and the decrease in short- term borrowings.

(2) Remedy for liquidity shortfall: No liquidity shortfall is expected.

(3) Analysis of cash flows for the coming year

Unit: NT$ thousands

Cash beginning balance (A)	Expected net cash flows from operating activities (B)	Expected net cash flows from non- operating activities (C)	Expected Cash ending balance (deficit) (A)`＋`(B)`＋`(C)	Remedy for cash deficit	Remedy for cash deficit
				Investment plan	Financing plan
$2,618,464	$668,845	($1,042,930)	$2,244,379	`－`	`－`
Analysis of cash flows in the coming year 1.Operating activities: Mainly due to profit from operation. 2.Investing activities: Mainly due to acquisition of financial assets at amortized cost and acquisition of property, plant and equipment. 3.Financing activities: Mainly due to cash dividends distribution and the decrease in short- term borrowings. 4.Remedyfor cash deficit: None.

Effect upon Financial Operations of Major Capital Expenditures from Recent Years:

None.

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5. Investment Policies, Main Reasons for Profit or Loss and Improvement Plans from Recent Years, and Investment Plans for the Coming Year

Information of investees

			Unit: NT$ thousands	Unit: NT$ thousands
Remarks Item	Policy	Main Reasons for Profit or Loss in 2020	Action Plan	Other Future Investment Plan
Arich Enterprise Co., Ltd.	Provide pharmaceutical distribution and logistics services in Taiwan to reduce channel and inventorycosts.	This company sells medicines from well-known pharmaceutical principals and Excelsior recognized investment income of NT$18,834 in thousands.	None	None
Dynamic Medical Technologies Inc.	Expand the aesthetic medical industry with high self-pay potential and market value.	This company has positive sales in aesthetic medical devices and consumables, and Excelsior recognized investment income of NT$44,658 in thousands.	None	None
Excelsior Healthcare Co., Limited	Establish investments and operations in overseas medical industry.	This company mainly invests in Excelsior Renal Service Co., Limited, EG Healthcare Inc., Excelsior Investment (Malaysia) Co., Ltd. and Excelsior Medical Co., Limited (Hong Kong) and has sound investment performance, leading Excelsior to recognize investment income of NT$114,217 in thousands.	None	Plan to develop the Southeast Asian market through investment.
Bestsmile Co., Ltd.	Dental management consultancy service and leasing of related devices.	This company is still in developing stage and benefits have not been fully realized. Excelsior recognized investment loss of NT$989 in thousands.	Expand to new business and to provide high- quality service.	None
Excelsior Medical Co., Limited (Hong Kong)	Establish investments and operations in long- term care business and sale of medical supplies sector.	This company mainly invests in Asia Best Healthcare Co., Ltd. and SinoExcelsior Investment Inc. and has sound investment performance. Excelsior recognized investment income of NT$49,088 in thousands.	None	None
Excelsior Beauty Co., Ltd.	Operating aesthetic medical and body sculpting services and sales of aesthetic medical consumables.	This company’s aesthetic medical business was impacted by COVID-19 epidemic, and Excelsior recognized investment income of NT$3,047 in thousands.	Actively promote sales of products and treatments, while strictly controlling operating expenses, and help investees reduce losses through the integration of channel operating resources.	None

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Remarks Item	Policy	Main Reasons for Profit or Loss in 2020	Action Plan	Other Future Investment Plan
Excelsior Asset Management Co., Ltd.	Leasing services of medical devices and real estate.	This company provides real estate lease services, and Excelsior recognized investment income of NT$4,740 in thousands.	None	None
EG Healthcare Inc.	Provide hemodialysis services in Philippines.	This company has sound business development at the Philippines, and Excelsior recognized investment income of NT$14,305 in thousands.	None	None
SinoExcelsior Investment Inc.	Provide medical supplies sale, lease, and medical management consultancy service in China.	This company disposed of its investee to reduce losses, and Excelsior recognized investment income of NT$4,374 in thousands.	None	None
Excelsior Investment (Malaysia) Co., Ltd.	Establish investments and operations in medical industry in Malaysia.	This company mainly invests in Renal Laboratories Sdn. Bhd. and Medi-Chem Systems Sdn. Bhd., and investment benefits have not been fully realized. Excelsior recognized investment loss of NT$1,295 in thousands.	Assist its investees in planning and implementing of operational strategies.	None
Renal Laboratories Sdn. Bhd.	Provide medical products manufacturing sevice in Southeast Asia.	This company produces hemodialysis products in Malaysia. Due to COVID-19 epidemic impact, Excelsior recognized investment income of NT$963 in thousands.	Improve manufacturing process, produce new products and expand export channels.	None
Medi-Chem Systems Sdn. Bhd.	Provide hemodialysis service in Malaysia.	This company sells hemodialysis and wound and ostomy products in Malaysia. Due to COVID-19 epidemic impact, Excelsior recognized investment loss of NT$960 in thousands.	Compete for new products agency and expand domestic channels.	None
Renal Management Sdn. Bhd.	Provide leasing and management consultancy service in Malaysia.	This company provides office lease to affiliates in Malaysia and Excelsior recognized investment income of NT$179 in thousands.	None	None

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Remarks Item	Policy	Main Reasons for Profit or Loss in 2020	Action Plan	Other Future Investment Plan
Dynamic Medical Technologies (Hong Kong) Ltd.	Actively develop sales of aesthetic medical devices and consumables market in Hong Kong and to invest in China.	COVID-19 epidemic and Hong Kong’s political economic impacted on revenue decreased compared with the previous year. However, operating profits were maintained by adjusting organization and controlling expenses. Moreover, this company recognized investment loss greatly decreased compared with the previous year, led to net profit in this year.	Actively promote product sales and conduct strict control over operating expenses. In addition, capital reduction to cover losses has been completed in February 2021, in order to improve the financial structure.	None
Guangzhou Dynamic Inc.	Actively develop sales of aesthetic medical devices and consumables market in China.	The reduction of business units has led to decrease in relevant personnel, marketing and management expenses, leading to netprofit in thisyear.	Completed capital reduction and improved operating losses in 2020.	None
CYJ International Taiwan Inc.	Sales of treatments and products related to hair growth and body shaping.	The impact of COVID-19 epidemic has significantly reduced aesthetic medical market demand. In the first half of the year, operation strategy was conservative, while adjusting organizational structure and conducting strict control over operating expenses. In the second half of the year, we changed operation strategy, and pitched to the petite bourgeoisie. Therefore, loss after tax greatly decreased compared with the previousyear.	Actively promote sales of products and treatments, while strictly controlling operating expenses.	None

Note: There are subsidiaries as of December 31, 2020.

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6. Risk Management and Assessment from Last Year up to the Time of Report Publication

(1) Effect of changes in interest rate, exchange rate and inflation on corporate finance, and future countermeasures

A. Interest rate

The Group’s interest expenses are mostly caused by short-term borrowings. The recent market rate is relatively low, and the Group also regularly evaluates the banks’ interest rates and maintains close relations with corresponding banks to seek a more favorable interest rate. Therefore, changes in interest rate have no significant impact on corporate finance.

B. Exchange rate

The Group reduces risks from exchange rate fluctuations by continuing to focus on fluctuations in the international financial market and to timely utilize foreign exchange forward contracts. For instance, for supplier contracts that denote prices in USD, the Group would purchase timely USD forward contracts and deposits in comprehensive consideration of the trends of USD and the amounts of imports. For denoted prices in Euro, the Group negotiates prices for the subsequent year using NTD in each year, and purchases timely Euro forward contracts and deposits in comprehensive consideration of the trends of Euro and the amounts of imports. Since the recent correlation between the Japanese Yen and the NTD is relatively low, and the Yen has adopted a quantitative easing policy, it is also considered a hedging currency. The Group also keeps a close eye on the exchange trends on the Yen and our actual needs, and in case of large appreciations, the Group will purchase timely forward contracts to hedge against possible risks based on actual needs.

C. Inflation

For the Group’s products that belong to health insurance reimbursement in accordance with the National Health Insurance Administration, inflation has no significant impact on corporate finance. But products that are categorized as sales of aesthetic medical devices and consumables, and health home appliances are prone to be impacted by market and inflation. Therefore, the Group keeps a close eye on the consumer price index (CPI) in the consumer market and adjusts product portfolio to encourage consumers to spend and to reduce the risk of inflation.

(2) Policies of high-risk, high-leverage investments, fund financing to other parties, endorsement guarantee and derivative commodity trading, and its main reasons for profit or loss and future countermeasures

The Group does not engage in high-risk, high-leverage investments.

The Group only loans funds to companies with inter-company business transaction or with necessary short-term financing need, and is carried out with “Regulations Governing Loaning of Funds.” However, as of December 31, 2020 and March 31, 2021, the Group has not loaned funds to others.

The Group only makes guarantees and endorsements to the parent company, subsidiaries and companies with inter-company business transaction, and is carried out with “Regulations Governing Making of Endorsements/Guarantees.” As of

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December 31, 2020, the Group’s endorsements/guarantees balance was NT$999,458 in thousands. As of March 31, 2021, the Group’s endorsements/guarantees balance is NT$1,693,302 in thousands.

The Group’s derivative transactions are all hedging in nature, and does not deal in transactive or speculative transactions.

(3) Future research & development projects and corresponding budget: The Group is non-manufacturing, so it is not applicable.
(4) Effects of and response to changes in policies and regulations relating to corporate finance and sales

To target the increasingly active global pharmaceutical market, and seeing that the International has extended the quality management of medicines from manufacturing processes to logistics and distribution, the Ministry of Health and Welfare in Taiwan has also set the reinforced control over pharmaceutical distribution and logistics as a key implementation policy, and phased implementation has commenced since July 2016. Full enactment has come into effect since December 31, 2018. Due to strict requirements for quality and safety, the entry barriers in this industry is extremely high. Only a few companies that continue to focus and invest in comprehensive PIC/S GMP and PIC/S GDP facilities, can become competitive enterprises with global counterparts. Moreover, the Group continues to acquire GMP and GDP accreditations for medicines approved by the government, and will apply GMP and GDP accreditations for medical supplies in this year. Enter into medical supplies sector, and cooperate with pharmaceutical principals to increase market share. Also, we continue to introduce new products related pharmaceutical and healthcare, strengthen interaction with each customer, and provide more comprehensive and complete professional services.

In response of the enactment of the “Long-term Care Services Act” in June 2017, various services that integrate medical, caring, housing, prevention and daily life support were in favor of Asia Best Healthcare Co., Ltd. to expand long-term care services to satisfy the needs of the aging population.

(5) Effects of and response to changes in technology and the industry relating to corporate finance and sales

The Group is an integrated channel provider of medical supplies industry, aesthetic medical industry, and pharmaceutical sales and distribution and logistics industry. Changes in technology and the industry will help to strengthen our supply chain relationship and help the Group to provide new products to satisfy customer needs. By focusing on relevant technological development trends in industries and investing capital and personnel to develop new businesses and new products, the Group hopes to enhance service quality and to lower operating costs.

(6) The impact of changes in corporate image on corporate risk management, and the Company’s response measures: The Group continues to develop business by maintaining a positive corporate image in providing medical and healthcare services.
(7) Expected benefits from, risks relating to and response to merger and acquisition plans: Not applicable.
(8) Expected benefits from, risks relating to and response to factory expansion plans: Not

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applicable.

(9) Risks relating to and response to excessive concentration of purchasing sources and excessive customer concentration

A. Purchase

In terms of the purchases of medical supplies and health home appliances, the company adopt a dual-brand marketing strategy by both importing from overseas brands and also outsource our own brand to OEMs. This helps the Company to appropriately disperse sources of purchase, and we maintain an adequate purchasing ratio for each supplier and product, and therefore, we do not have risks associated with concentration of purchases.

In terms of the purchases of aesthetic medical industry, the Group mainly acts as an agent of various aesthetic medical devices and consumables, and we actively pursue the latest aesthetic medical technologies and related products. We maintain an adequate purchasing ratio for each supplier and product, so we do not have risks associated with concentration of purchases.

In terms of the purchases of medicines, since the Group sells medicines from well-known pharmaceutical principals with high market shares and revenues, it is not possible to avoid concentration of purchases. To reduce the risk of concentrated purchases, the Group is already actively developing businesses from other pharmaceutical principals, and continue to develop new customers and to increase channel coverage ratio. Concurrently, we are also strengthening customer relationship and marketing strategies to consolidate our agency.

B. Sale

In terms of the sales of medical supplies, the Company’s sales to Bestchain Healthtaiwan Co., Ltd. (“Bestchain”) accounts for approximately 30%. The Company sells surgical consumables from its agency brand Covidien to Bestchain, and Bestchain’s sales team would then sell and distribute the products to various medical institutions. The Company’s sales to Excelsior Renal Service Co., Limited (“Excelsior Renal Service”) accounts for approximately 13%. Nevertheless, this sales strategy of hemodialysis products is for Excelsior Renal Service to compete for dialysis management service from various public and private medical institutions, and for the Company to provide relevant product sales. For hemodialysis center independently operated by medical institutions, the Company would directly sell to each medical institution and provide relevant after-sale services.

Most of the Group’s aesthetic medical devices and consumables are sold to dermatology departments and plastic surgery departments in major public and military hospitals, private dermatology clinics, private plastic surgery clinics, obstetrics and gynecology clinics, family medicine clinics, and pharmacies and chain drugstores in Taiwan. There are many counterparties, so there is no risk associated with concentration of sales.

In terms of the sales of medicines, most of which are sold to domestic medical institutions and pharmacies. There are many counterparties, so there is no risk associated with concentration of sales.

In recent years, the Group has been committed to diversifying operating risks

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through continuing to introduce products from international principals and by developing the product sales in each medical field. Presently, there is no clear indication of concentration of sales.

(10) Effects of, risks relating to and response to large shares transfers or changes in shareholdings by directors, supervisors, or shareholders with shareholdings of over 10%: None.
(11) Effects of, risks relating to and response to the changes in management rights: Not applicable.
(12) Litigious or non-litigious matters. List major litigious, non-litigious or administrative disputes that: (1) involve the company and/or any company director, any company supervisor, president, any person with actual responsibility for the firm, any major shareholder holding a stake of greater than 10 percent, and/or any company or companies controlled by the company; and (2) have been concluded by means of a final and unappealable judgment, or are still under litigation, where such a dispute could materially affect shareholders’ equity or the prices of the company’s securities, the company should disclose the facts of the dispute, related amounts, date, main parties involved and current status of the case up to the publication date of this annual report: None.
(13) Other major risks and measures: None.
(14) The organizational structure of risk management

The Group’s risk management of various activities is managed by each respective business management unit, and the internal auditing unit will propose and implement risk-oriented audit plans and review the existing or potential risks at each business. Below are descriptions of each risk management unit:

A. General Manager’s Office: Responsible for management decision-making and supervising and coordinating related matters from each department to reduce strategic risks.
B. Each business unit: Separately responsible for proposing operating strategies for their respective businesses and to seize market trends to reduce risk of business operations.
C. Finance and accounting division: Responsible for fund transfer and to stay on top of fluctuations in interest rates and exchange rates at all times to reduce risks of finance, exchange, and interest rates. The finance and accounting division has established a credit control mechanism to review credit limit, thereby reducing ratios of bad debt in account receivables.
D. IT Division: Responsible for the safety and management of physical assets and the safety protective measures of the internet to reduce information security risks.

7. Other Important Matters

Key Performance Indicator (KPI) of the Group

Since the Group is a relatively large-scale integrated channel provider in the domestic medical supplies industry, aesthetic medical industry, and pharmaceutical sales and distribution and logistics industry, our products encompass various sites ranging from medical institutions, department stores, and chain drugstores in Taiwan. Therefore, “accounts receivable turnover” and “inventory turnover” are key indicators

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that will affect the funds. The Group’s accounts receivable turnover was 4.4, with average collection period of 82 days in 2020. The inventory turnover in 2020 was 6.3, with average days in sales of 58 days. In addition, our new products agency and distribution market shares are non-financial KPI.

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VIII. Special Disclosure

333

1. Information on Affiliated Enterprises

(1) 2020 consolidated business report from affiliated enterprises
A. Organizational chart of affiliated enterprises

==> picture [477 x 330] intentionally omitted <==

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

Excelsior Medical Co., Ltd.
98.02% 39.51% 100% 38.50% 41.02% 100% 64.36%
Bestsmile Arich Excelsior Dynamic Excelsior Excelsior
35.64%
Co., Ltd. Enterprise Asset Medical Healthcare Medical Co.,
Co., Ltd. Management Technologies Co., Limited Limited
Co., Ltd. Inc. (Hong
Kong)
100% 53.89% 99.9% 100% 100%
Dynamic Medical Excelsior EG Excelsior SinoExcelsior
Technologies Beauty Co., Healthcare, Investment Investment
(Hong Kong) Ltd. Ltd. Inc. (Malaysia) Co., Ltd. Inc.
70% 70%
100% 80% Renal Medi-Chem
Laboratories Systems Sdn.
Guangzhou CYJ
Sdn. Bhd. Bhd.
Dynamic International
Inc. Taiwan Inc. 100%
Renal
Management
Sdn. Bhd.
----- End of picture text -----

B. Information of affiliated enterprises

Unit: unless otherwise stated, NT $ thousands

				NT$thousands
Enterprise Name	Startup Date	Address	Total Amount of Paid in Capital	Major Operations
Arich Enterprise Co., Ltd.	June 2,1980	14F.-5, No. 880, Zhongzheng Rd., Zhonghe Dist., New Taipei City 235, Taiwan (R.O.C.)	745,744	Sales of medicines, and logistics service
Dynamic Medical Technologies Inc.	October 9, 2003	14F., No. 880, Zhongzheng Rd., Zhonghe Dist., New Taipei City 235, Taiwan (R.O.C.)	300,000	Sales, lease and maintenance of aesthetic medical devices, and sales of aesthetic consumables and beauty products
Excelsior Healthcare Co., Limited	December 24, 2002	P.O. Box 3444, Road Town, Tortola, British Virgin Islands	USD$ 39,412 in thousands (Note 1)	Investment business
Bestsmile Co., Ltd.	June 15, 2007	16F.-5, No. 880, Zhongzheng Rd., Zhonghe Dist., New Taipei City 235, Taiwan (R.O.C.)	11,742	Sales of medical devices, and medical management consultancyservice
Excelsior Medical Co.,Limited	June 1, 2010	Room 1302-3, 13F Wing On Kowloon Centre,345	USD$ 82,595 in thousands	Investment business

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Enterprise Name	Startup Date	Address	Total Amount of Paid in Capital	Major Operations
(Hong Kong)		Nathan Road, Kowloon, HongKong	(Note 2)
Excelsior Beauty Co., Ltd.	August 15, 1979	14F.-1, No. 880, Zhongzheng Rd., Zhonghe Dist., New Taipei City 235, Taiwan (R.O.C.)	281,210	Sales of body shaping treatments and aesthetic medical products and consumables
Excelsior Asset Management Co., Ltd.	October 27, 2015	17F.-6, No. 880, Zhongzheng Rd., Zhonghe Dist., New Taipei City 235, Taiwan (R.O.C.)	803,989	Leasing services of medical devices and real estate
EG Healthcare, Inc.	July 31, 2003	14/F, Ramon Magsaysay Center, Roxas Boulevard, Manila, Philippines	PHP$52,935 in thousands (Note 3)	Sales and lease of medical devices, and medical management consultancyservice
SinoExcelsior Investment Inc.	January 13, 2011	Room 301-2, No.1089, Kang Ning Lu, Shanghai Shi, China	CNY$60,000 in thousands (Note 4)	Investment business, sales and lease of medical devices, and medical management consultancyservice
Excelsior Investment (Malaysia) Co., Ltd.	February 12, 2018	4thFloor Ellen Skelton Building, 3076 Sir Francis Drake Highway, Road Town, Tortola, British Virgin Islands	USD$ 5,395 in thousands (Note 5)	Investment business
Renal Laboratories Sdn. Bhd.	July 20, 1996	PT42, Lengkuk Teknologi 4, Persiaran Teknologi 4, Techpark@Enstek, 71760 Negeri Sembilan,Malaysia.	MYR$28,700 in thousands (Note 6)	Manufacture of medical devices and consumables in Southeast Asia
Medi-Chem Systems Sdn. Bhd.	October 22, 1985	No. 5 Lorong Perusahaan 3 Taman Industri Kimpal, Batu Caves,68100 Malaysia	MYR $500 in thousands (Note 7)	Provide hemodialysis products and services in Malaysia
Renal Management Sdn. Bhd.	June 5, 1992	No. 5 Lorong Perusahaan 3 Taman Industri Kimpal, Batu Caves,68100 Malaysia	MYR $200 in thousands (Note 8)	Lease and management consultancy service in Malaysia
Dynamic Medical Technologies (Hong Kong) Ltd.	January 25, 2007	Room 13, 4F, Block A, Focal Industrial Center, 21 Man Lok Street, Hung Hom, Kowloon,HongKong	HKD $98,777 in thousands (Note 9)	Sales and maintenance of medical devices
Guangzhou Dynamic Inc.	May 22, 2009	Room 1301,1310, No.363, Dongfeng Zhong Road, Yuexiu District, Guangzhou,China	CNY$ 10,400 in thousands (Note 10)	Sales and maintenance of medical devices
CYJ International Taiwan Inc.	December 8, 2014	14F.-2, No. 880, Zhongzheng Rd., Zhonghe Dist., New Taipei City 235, Taiwan (R.O.C.)	122,400	Sales of treatments and products related to hair growth and body shaping

Note 1: Exchange rate at time of funding in 2002 USD:NTD = 1:34.354 (US$600 in thousands); in 2005 USD:NTD = 1:31.999 (US$700 in thousands); in 2007 USD:NTD = 1:32.896 (US$250 in thousands); in 2008 USD:NTD = 1:31.787 (US$9,900 in thousands); first time in 2009 USD:NTD = 1:33.193 (US$2,420 in thousands); second time in 2009 USD:NTD = 33.777 (US$6,528 in thousands); in 2010 USD:NTD = 1:31.824 (US$5,808 in thousands); in 2011 USD:NTD = 1:29.75 (US$11,880 in thousands); in 2013 USD:NTD = 1:29.93

335

(US$1,326 in thousands).

Note 2: Exchange rate at time of funding in 2011 USD:NTD = 1:29.2383 (US$18,000 in thousands); first time in 2012 USD:NTD = 1:30.0560 (US$4,610); second time in 2012 Excelsior Healthcare Co., Limited funded US$27,990; in 2013 USD:NTD = 1:30.0600 (US$18,500 in thousands). First time in 2014 USD:NTD = 1:30.1500 (US$12,045 in thousands); second time in 2014 USD:NTD = 1:29.9900 (US$150 in thousands); 2018 US:NTD = 1:29.1900 (US$1,300 in thousands).
Note 3: Exchange rate at time of funding: in 2003 PH P:NTD = 1:0.6292.
Note 4: Exchange rate at time of funding in 2011 CNY:NTD = 1:4.505 (CNY 98,000 in thousands); first time in 2014 CNY:NTD = 1:4.712 (CNY 29,400 in thousands); second time in 2014 CNY:NTD = 1:4.922 (CNY 74,727 in thousands); exchange rate at time of capital reduction in 2018 CNY:NTD = 1:4.4640 (CNY 200,000 in thousands).
Note 5: Exchange rate at time of funding in 2018 USD:NTD = 1:30.8750 (US$500 in thousands); in 2019 USD:NTD = 1:31.115 (US$3,986 in thousands) ; in 2020 USD:NTD = 1:29.56 (US$909 in thousands).
Note 6: Exchange rate at time of funding in 2018 MYR:NTD = 1:7.6048 (MYR 597 in thousands); 2019 MYR:NTD = 1:7.7518 (MYR 16,000 in thousands).
Note 7: Exchange rate at time of funding in 2018 MYR:NTD = 1:7.6048 (MYR 973 in thousands).
Note 8: Exchange rate at time of funding in 2018 MYR:NTD = 1:7.6048 (MYR 200 in thousands).
Note 9: Exchange rate at time of funding: first time in 2007 HKD:NTD = 1:4.259 (HKD 1,020 in thousands); second time tin 2007 HKD:NTD = 1:4.230 (HKD 4,000 in thousands); first time in 2008 HKD:NTD = 1:3.984 (HKD 980 in thousands); second time in 2008 HKD:NTD = 1:3.894 (HKD 818 in thousands); third time in 2008 HKD:NTD = 1:3.893 (HKD 748 in thousands); first time in 2009 HKD:NTD = 1:4.265 (HKD 1,170 in thousands); second time in 2009 HKD:NTD = 1:4.329 (HKD 351 in thousands); third time in 2009 HKD:NTD = 1:4.208 (HKD 2,340 in thousands); fourth time in 2009 HKD:NTD = 1:4.139 (HKD 532 in thousands); in 2010 HKD:NTD = 1:3.7391 (HKD 7,800 in thousands); first time in 2011 HKD:NTD = 1:3.7801 (HKD 1,568 in thousands); second time in 2011 HKD:NTD = 1:3.6980 (HKD 10,000 in thousands); third time in 2011 HKD:NTD = 1:3.7154 (HKD 6,138 in thousands); 2012 HKD:NTD = 1:3.8456 (HKD 13,510 in thousands); 2013 HKD:NTD = 1:3.8344 (HKD 1,790 in thousands); 2014 HKD:NTD = 1:3.8442 (HKD 26,637 in thousands); 2015 HKD:NTD = 1:3.9413 (HKD 19,375 in thousands) . Capital reduction to cover losses in February 2021 was HKD 76,455 in thousands and the number of shares decreased by 19,755,445 shares .
Note 10: Exchange rate at time of funding: in 2009: CNY:NTD = 1:4.802 (CNY 2,030 in thousands); in 2010: CNY:NTD = 1:4.3973 (CNY 6,655 in thousands);

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first time in 2011: CNY:NTD = 1:4.5062 (CNY 1,315 in thousands); second time in 2011: CNY:NTD = 1:4.5615 (CNY 5,000 in thousands); in 2012, CNY:NTD = 1:4.723 (CNY 11,000 in thousands) ; in 2020, CNY:NTD = 1:4.264 (CNY 15,600 in thousands).

C. Information on shareholders who are the same as the controlled and affiliated entities: None.
D. Description of overall business scope of affiliates enterprises

The Company’s primary businesses are medical and healthcare products and related services, and major agency products include:

Hemodialysis machine and dialyzers: Hemodialysis products from Fresenius, Nikkiso and Asahi.

Solutions and powders: Hemodialysis products from Medivators and own-brand Renabio which outsource manufacturing to well-known domestic pharmaceutical factories OEM.

Air purifiers and health home appliances: Own-brand ULTRACLEAN and distribution brand Electrolux, etc.

Colostomy products: Hollister wound and ostomy medical products.

Blood bags: Japan’s JMS blood bag products.

Surgical products: Covidien surgical products.

Aesthetic medical laser devices: Sale and lease of aesthetic medical devices and

medical management consultancy services.

Besides supplying the above products, we also provide comprehensive repair and maintenance support system and IT service repair and consultancy system.

Businesses of affiliates enterprises:

a. Arich Enterprise Co., Ltd. : This company is a subsidiary invested by Excelsior to expand medicines sales business, and its major businesses include pharmaceutical sales and distribution logistics services.
b. Dynamic Medical Technologies Inc. : This company is a subsidiary invested by Excelsior to expand aesthetic medical devices sales, and owns agency or distribution rights for products from various well-known European, American, or Korean aesthetic medical brands. Its major businesses include sale, lease and maintenance of asthetic medical laser devices, and sale of aesthetic consumables and beauty products.
c. Excelsior Healthcare Co., Limited: This company is a subsidiary invested by Excelsior to expand to foreign medical and healthcare industries. Its major business is investment.
d. Bestsmile Co., Ltd. : This company is a subsidiary invested by Excelsior to expand sale and lease of dental medical devices. Its major businesses include lease of medical devices and medical management consultancy service.
e. Excelsior Medical Co., Limited (Hong Kong) : This company is an indirect

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subsidiary invested by Excelsior to expand to foreign medical and healthcare industries. Its major business is investment.

f. Excelsior Beauty Co., Ltd. : This is an indirect subsidiary that Excelsior established in Taiwan for professional body shaping and cosmetic healthcare products. Its major businesses include sales of body shaping treatmnts, cosmetic health care products and aesthetic medical consumables.
g. Excelsior Asset Management Co., Ltd. : This is a subsidiary that Excelsior invested to build physical channels for medical and healthcare industries. Its major businesses include sale, acquisition and lease for medical devices and real estate.
h. EG Healthcare, Inc. : This is an indirect subsidiary invested by Excelsior to expand to the medical and healthcare industry in the Philippines. Its major businesses include sale and lease of medical devices, and medical management consultancy service.
i. SinoExcelsior Investment Inc. : This is an indirect subsidiary that Excelsior invested in to expand to the medical and healthcare industry in China. Its major businesses include investment, sales and lease of medical devices and medical management consultancy service.
j. Excelsior Investment (Malaysia) Co., Ltd. : This is an indirect subsidiary that Excelsior invested in to expand to medical and healthcare industry in Malaysia. Its major business is investment.
k. Renal Laboratories Sdn. Bhd. : This is an indirect subsidiary that Excelsior invested to expand to hemodialysis product manufacturing and related businesses in Malaysia. Its major businesses include medical devices and consumables production and sales.
l. Medi-Chem Systems Sdn. Bhd. : This is an indirect subsidiary that Excelsior invested to expand to hemodialysis product sales and related businesses in Malaysia. Its major businesses include medical devices and consumables sales.
m. Renal Management Sdn. Bhd. : This is an indirect subsidiary that Excelsior invested to expand to the medical and healthcare industry in Malaysia. Its major businesses include real estate leasing and management consultancy service.
n. Dynamic Medical Technologies (Hong Kong) Ltd. : This is an indirect subsidiary that Excelsior invested to expand to the medical and healthcare industry in Hong Kong. Its major businesses include sales and maintenance of medical devices.
o. Guangzhou Dynamic Inc. : This is an indirect subsidiary that Excelsior invested to expand to the medical and healthcare industry in China. Its major businesses include sales and maintenance of medical devices.
p. CYJ International Taiwan Inc. : This is an indirect subsidiary that Excelsior set up in Taiwan for hair growth and professional body shaping treatments. Its major businesses include sales of products and treatments related hair growth and body shaping.

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E. Directors, supervisors, and general managers of affiliated enterprises

Unit: unless otherwise stated, shares; %

Enterprise Name	Title	Name or Representative	Shareholding	Shareholding
			Shares	Investment holding%
Arich Enterprise Co., Ltd.	Chairman Director Director Director Director Independent director Independent director Independent director General manager	Excelsior Medical Co., Ltd. Representative: Fu Hui-Tung Wang Ming-Ting Chang Ming-Cheng Excelsior Investment Co., Ltd. Representative: Xue Fu-Quan Lin Feng Co., Ltd. Representative: Dang Tian-Jian Chang Wu-I Chan Tzu-Sheng Yang Yu-Ming Zhang Xian-Zheng	29,829,742 2,000 50,000 - 1,538 30,768 1,260,000 - - - - 100,000	40.00% 0.00% 0.07% - 0.00% 0.04% 1.69% - - - - 0.13%
Dynamic Medical Technologies Inc.	Chairman Director Director Director Director Director Independent director Independent director Independent director General manager	Fu Hui-Tung Wang Ming-Ting Excelsior Medical Co., Ltd. Representative: Chang Ming-Cheng Huang Jie-Qing Xue Fu-Quan Fu Jo-Hsuan Chen Xie-Yu Shi Mei-Hui Yang Yu-Ming Wu Guo-Long	- - 11,550,425 3,000 15,034 - - - - - -	- - 38.5% 0.01% 0.05% - - - - - -
Excelsior Healthcare Co., Limited	Director	Fu Hui-Tung	- Excelsior Medical Co., Ltd. holds 39,411,623 shares.	- 100.00%
Bestsmile Co., Ltd.	Chairman Director Director Supervisor	Excelsior Medical Co., Ltd. Representative: Tsai Liang-Jia Excelsior Medical Co., Ltd. Representative: Chang Ming-Cheng Chang Jing-Kun Excelsior Investment Co., Ltd. Representative: Chou Cheng-Hsiao	1,150,874 1,150,874 - - 291 -	98.02% 98.02% - - 0.02% -
Excelsior Medical Co., Limited (Hong Kong)	Director	Fu Hui-Tung	- Excelsior Medical Co., Ltd. holds 53,154,741 shares. Excelsior Healthcare Co., Limited holds 29,439,829 shares.	- 64.36% 35.64%
Excelsior Beauty Co., Ltd.	Chairman Director Director Supervisor	Dynamic Medical Technologies Inc. Representative: Wu Guo-Long Fu Hui-Tung Fu Jo-Hsuan WangMing-Ting	15,154,496 - - - -	53.89% - - - -

339

Enterprise Name	Title	Name or Representative	Shareholding	Shareholding
			Shares	Investment holding%
Excelsior Asset Management Co., Ltd.	Chairman Director Director Supervisor General manager	Fu Hui-Tung Wang Ming-Ting Fu Jo-Hsuan Chou Cheng-Hsiao Wang Ming-Ting	- - - - - Excelsior Medical Co., Ltd. holds 80,398,900 shares.	- - - - - 100.00%
EG Healthcare, Inc.	Chairman Director Director Director Director General manager	Kao Shen Pan Cong-Ren Romarico I. Gatchalian Kara Mae Aurora R. Chua Addison B. Castro Pan Cong-Ren	1 1 1 1 1 1 Excelsior Healthcare Co., Limited holds 5,293,453 shares.	- - - - - - 99.99%
SinoExcelsior Investment Inc.	Chairman Director Director Supervisor General manager	Kao Shen Fu Hui-Tung Fu Jo-Hsuan Chou Cheng-Hsiao Kao Shen	- - - - - Excelsior Medical Co., Limited (Hong Kong) invested CNY$60,000 in thousands.	- - - - - 100.00%
Excelsior Investment (Malaysia) Co., Ltd.	Director	Fu Hui-Tung	- Excelsior Healthcare Co., Limited holds 5,395,436 shares.	- 100.00%
Renal Laboratories Sdn. Bhd.	Chairman Managing Director Director Director Director Director Director	Yong Tuan Heng Jason Nien Stanley Chang Kao-Shen Fu Jou-Hsuen Wong Huey Miin Beh Seok Koon	- - - - - - - Excelsior Investment (Malaysia) Co., Ltd. holds 16,773,586 shares. Renal Resources Sdn. Bhd.	- - - - - - - 70% 30%

340

Enterprise Name	Title	Name or Representative	Shareholding	Shareholding
			Shares	Investment holding%
			holds 7,188,679 shares.
Medi-Chem Systems Sdn. Bhd.	Chairman Managing Director Director Director Director Director Director	Yong Tuan Heng Jason Nien Stanley Chang Kao-Shen Fu Jou-Hsuen Wong Huey Miin Beh Seok Koon	- - - - - - - Excelsior Investment (Malaysia) Co., Ltd. holds 350,000 shares. Renal Resources Sdn. Bhd. holds 150,000 shares.	- - - - - - - 70% 30%
Renal Management Sdn. Bhd.	Chairman Managing Director Director	Yong Tuan Heng Jason Nien Kao-Shen	- - - Medi-Chem Systems Sdn. Bhd. holds 200,000 shares.	- - - 100%
Dynamic Medical Technologies (Hong Kong) Ltd.	Director Director	Fu Jo-Hsuan Wu Guo-Long	- - Dynamic Medical Technologies Inc. holds 98,777,228 shares.	- - 100.00%
Guangzhou Dynamic Inc.	Director Supervisor	Wu Guo-Long Jiang Zhi-Hao	- - Dynamic Medical Technologies (Hong Kong) Ltd. invested CNY$10,400 in thousands.	- - 100.00%
CYJ International Taiwan Inc.	Chairman Director Director Supervisor	Excelsior Beauty Co., Ltd. Representative: Fu Jo-Hsuan Tsai Liang-Jia CYJ INTERNATIONAL COMPANY LIMITED Representative: Jiang Zhi-Hao WangMing-Ting	9,792,000 0 0 2,448,040 0 0	80.00% 0% 0% 20.00% 0% 0%

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F. Operation results of affiliated enterprises

	Unit: NT$thousands,except earnings/(loss) per share	Unit: NT$thousands,except earnings/(loss) per share	Unit: NT$thousands,except earnings/(loss) per share	Unit: NT$thousands,except earnings/(loss) per share	Unit: NT$thousands,except earnings/(loss) per share	Unit: NT$thousands,except earnings/(loss) per share	Unit: NT$thousands,except earnings/(loss) per share	Unit: NT$thousands,except earnings/(loss) per share
Enterprise Name	Capital	Total Assets	Total Liabilities	Net Worth	Operating revenue	Net operating income/(loss)	Profit/(loss)	Earnings/(loss) per share
Arich Enterprise Co.,Ltd.	745,744	3,947,810	2,167,106	1,780,704	1,251,395	48,329	47,249	0.72
Dynamic Medical Technologies Inc.	300,000	1,663,795	372,865	1,290,930	797,276	124,561	115,995	3.87
Excelsior Healthcare Co.,Limited	1,244,687	1,719,024	12,427	1,706,597	0	(398)	114,217	2.90
Bestsmile Co.,Ltd.	11,742	21,103	15,405	5,698	7,732	(750)	(1,009)	(0.86)
Excelsior Medical Co., Limited (HongKong)	2,451,275	2,493,297	211	2,493,086	0	(407)	76,271	0.92
Excelsior BeautyCo.,Ltd.	281,210	522,005	190,121	331,884	109,526	18,584	6,719	0.24
Excelsior Asset Management Co., Ltd.	803,989	1,099,936	285,444	814,492	16,683	7,279	4,740	0.06
EG Healthcare Inc.	19,256	129,631	59,352	70,279	136,374	17,730	14,305	2.71
SinoExcelsior Investment Inc.	291,579	132,040	1,168	130,871	1	(578)	4,374	Note
Excelsior Investment (Malaysia) Co.,Ltd.	166,346	208,777	58,881	149,896	0	(782)	(1,295)	(0.24)
Renal Laboratories Sdn. Bhd.	194,859	186,555	16,487	170,068	96,908	659	1,376	Different denominations per share
Medi-Chem Systems Sdn. Bhd.	3,395	23,035	7,873	15,162	32,660	(3,703)	(1,372)	(2.74)
Renal Management Sdn. Bhd.	1,358	9,592	316	9,276	1,245	371	256	1.28
Dynamic Medical Technologies (HongKong)Ltd.	382,278	305,556	48,699	256,857	75,528	10,126	10,273	0.10
Guangzhou Dynamic Inc.	119,574	12,934	773	12,161	110	(155)	678	Note
CYJInternational Taiwan Inc.	122,400	224,313	126,992	97,321	137,061	(12,592)	(12,254)	(1.00)

Note: This company has no shares.

(2) Consolidated financial statements of affiliated enterprises: Same as consolidated financial statements.
(2) Reports of affiliated enterprises: None.
Private Placement Securities from Last Year up to the Time of Report Publication:

None.

Subsidiaries Holding or Disposal of the Company’s Stock List from Last Year up to the Time of Report Publication: None.
Other Necessary Supplements

Accounts of balance sheet evaluation method

(1) Loss allowance of accounts receivable

The Group has assessed accounts receivables for indicators of impairment at the end of each reporting period. Accounts receivables are considered to be impaired when there is objective evidence, as a result of one or more events that occurred after the initial recognition of the accounts receivables, that the estimated future cash flows of the accounts receivables have been affected. Such accounts receivables are assessed for impairment on a collective basis even if they were assessed not to be impaired individually.

The amount of the impairment loss recognized is the difference between the asset’s carrying amount and the present value of estimated future cash flows(after reflecting effects of collaterals or guarantees), discounted at the financial asset’s original effective interest rate. Accounts receivables where the carrying amount is reduced through the use of an allowance account. When accounts receivables are

342

considered uncollectible, they are written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognized in bad debt losses.

(2) Loss allowance of inventory valuation

A. Inventories are stated at the lower of cost or net realizable value. Inventory writedowns are made by item, except where it may be appropriate to group similar or related items. Net realizable value is the estimated selling price of inventories less selling expenses. Inventories are recorded at the weighted-average cost.
B. The Group policy on loss allowance of inventory valuation
- a. Inventories shall be stated at the lower of cost or net realizable value.
- b. Inventory cost shall be compared by each item against its net realizable value. Loss will be recognized for items with lower net realizable values than their respective inventory costs, and no recognition will be made for those whose net realizable values are higher than the inventory costs. For inventories that have been written-down to the net realizable value, in case net realizable values rises, it is necessary to write back the increase in the net realizable value of the inventory within the boundaries of the original write-off, and to recognize “Adjustments to Cost of Sales-Losses on inventory valuation.”
- c. For items that need to be scrapped in the inventory, 100% of the inventory balance will be recognized for reserve.
- d. In case of special circumstances or changes in industry, the Group may adjust inventory products based on their actual circumstances.
Matters that Have Significantly Affected Shareholders’ Equity and Share Prices Pursuant to Item 2, Paragraph 3, Article 36 of Securities and Exchange Act from Last Year up to the Time of Report Publication
(1) The Company carried out capital injection by issuing 13 million new shares at a premium of NT$45 per share, and raised NT$585,000,000, bringing the capital to NT$1,411,489,700 after the issuance.
(2) Arich Enterprise Co., Ltd. carried out capital injection by issuing 30 million new shares at a premium of NT$15 per share, and raised NT$450,000,000, bringing the capital to NT$745,743,550 after the issuance.

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CHAIRMAN Fu Hui-Tung

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AI assistant

EXCELSIOR — Annual Report 2020

52380_rns_2021-08-10_2c0804e9-0f16-4af0-a293-375256b41ad1.pdf

COMPANY ADDRESS & PHONE NUMBER

Contents

Ⅰ . Report to Shareholders

Dear Shareholders,

3. Status of cash flows

(2) Consolidated statement of cash flows

4. Analysis and comparison of profitability

(1) Analysis of individual profitability

5. R&D status

Ⅱ . Company Profile

1. Date of Incorporation

2. Company History

Ⅲ . Corporate Governance Report

1. Organization

(2) Department operations

2. Directors and Management Team

(1) Directors

A. Directors 2021/04/24 Unit: share

B. Major shareholders of the institutional shareholders

C. Major shareholders of the Company’s major institutional shareholders

D. Professional qualifications and independence analysis of directors and upervisors

(3) Management team

(4) Remuneration of directors, general managers and deputy general managers

A. Remuneration of directors and independent directors

Remuneration grading table of directors and independent directors

B. Remuneration of the general manager and deputy general manager

Remuneration Grading Table of the General Manager and Deputy General Manager

C.General Manager and Deputy General Manager

(5) Performance assessment and remuneration policy of directors and managers

3. Implementation of Corporate Governance

(1) Board of directors

3. Implementation of the Board of Directors

(2) Audit committee

Excelsior Medical Co., Ltd. Evaluation of the Independence and Competence of CPAs

(4) Composition, responsibilities, and operation of the Remuneration Committee

A. Members of the Remuneration Committee

(5) Fulfillment of CSR

(6) Fulfillment of ethical corporate management

(9) Internal control systems

A. Statement of internal control system

Excelsior Medical Co., Ltd. Statement of Internal Control System

Date: March 12, 2021

EXCELSIOR MEDICAL CO., LTD.

B. Major resolutions of the Board of Directors’ Meetings from last year up to the time of report publication

4. Information on Fees to CPA

5. Replacement of CPA: Not Applicable.

8. Information on Relationship between any of the Top Ten Shareholders

Ownership of Shares in Affiliated Enterprises

Ⅳ . Capital Overview

1. Source of Capital

(2) Type of stock

(3) Shelf-registration ： None.

2. Shareholder Structure

3. Distribution of Share Ownership

Common Stock

4. List of Major Shareholders

5. Market Prices, Net Worth, Earnings and Dividends Per Share

6. Dividend Policy and Implementation Status

(1) Dividend policy

(2) Proposed distribution of dividend

7. Impact of the Proposed Stock Dividends in Shareholders Meeting on Business Performances and EPS

8. Employee Compensation and Directors’ Remuneration

(3) Distribution of compensation approved by the Board of Directors

9. Buyback of Treasury Stocks:

10. Issuance of Corporate Bonds:

13. Status of Capital Utilization Plan

(1) Finance plans:

Ⅴ . Business Overview

1. Business Scope

D. New products (services) to be developed

(2) Industry overview

 Medical device sector

a. Overview and development in the medical device industry

b. Overview and development in the hemodialysis industry

 Aesthetic medical sector

 Pharmaceutical sales and distribution and logistics sector

a. Pharmaceutical sales and distribution logistics

EXCELSIOR Annual Report 2020

`Ⅰ` . Report to Shareholders

`Ⅱ` . Company Profile

`Ⅲ` . Corporate Governance Report

`Ⅳ` . Capital Overview

(3) Shelf-registration `：` None.

`Ⅴ` . Business Overview