Stock Code:4104

EXCELSIOR MEDICAL CO., LTD.

PARENT COMPANY ONLY FINANCIAL STATEMENTS

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

Address: 17F., No.880, Zhongzheng Rd., Zhonghe Dist., New Taipei City 235, Taiwan, R.O.C. Telephone: (02)22251888

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

〜 1 〜

Contents 1. Cover Page 2. Table of Contents 3. Independent Auditors’ Report 4. Balance Sheets 5. Statements of Comprehensive Income 6. Statements of Changes in Equity 7. Statements of Cash Flows 8. Notes to the Financial Statements (1)Company History (2)Financial Statements Authorization Date and Authorization Process (3)New Standards, Amendments and Interpretations Adopted (4)Summary of Significant Accounting Policies (5)Significant Accounting Assumptions and Judgments, and Major Sources of Estimation Uncertainty (6)Explanation of Significant Accounts (7)Related Party Transactions (8)Pledged Assets (9)Significant Commitments and Contingencies (10)Losses due to major disasters (11)Subsequent events (12)Other (13)Other disclosures i) Information on significant transactions ii) Information on investees iii)Information on investment in mainland China iv) Major shareholders (14)Segment Information 10. List of major account titles	Page
	1 2 3 4 5 6 7 8 8 8～9 9～23 23 24～54 54～58 59 59 59 59 60 61～63 64～65 66～67 67 67 68～76

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

Page

1
2
3
4
5
6
7
8
8
8～9
9～23
23
24～54
54～58
59
59
59
59
60
61～63
64～65
66～67
67
67
68～76

〜 2 〜

==> picture [76 x 31] intentionally omitted <==

==> picture [168 x 19] intentionally omitted <==

KPMG

��110615��5�7�68�(��101��) �� Tel + 886 2 8101 6666 68F., TAIPEI 101 TOWER, No. 7, Sec. 5, �� Fax + 886 2 8101 6667 Xinyi Road, Taipei City 110615, Taiwan (R.O.C.) �� Web home.kpmg/tw

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, 2021 and 2020, 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, 2021 and 2020, 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 audits in accordance with the Regulations Governing Auditing and Certification of Financial Statements by Certified Public Accountants and the auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the 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.

〜 3 〜

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

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$138,000 thousand and NT$146,436 thousand, constituting 2% and 2% of the total assets at December 31, 2021 and 2020, respectively, and the related share of profit of subsidiaries, associates and joint ventures accounted for using the equity method amounted to NT$14,488 thousand and NT$29,466 thousand, constituting 2% and 4% 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.

〜 3-1 〜

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 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.

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.

〜 3-2 〜

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 WanWan Lin.

KPMG

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

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.

〜 3-3 〜

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

BALANCE SHEETS

DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

ASSETS Current assets: 1100 Cash and cash equivalents (Note (6)(a)) 1110 Current financial assets at fair value through profit or loss (Note (6)(b)) 1151 Notes receivable (Notes (6)(d)) 1170 Accounts receivable (Notes (6)(d)) 1180 Accounts receivable due from related parties (Notes (6)(d) and (7)) 1200 Other receivables (Notes (6)(d) and (7)) 130X Inventories (Note (6)(e)) 1470 Other current assets, others Non-current assets: 1517 Non-current financial assets at fair value through other comprehensive income (Note (6)(c)) 1550 Investments accounted for using equity method (Note (6)(f)) 1600 Property, plant and equipment (Notes (6)(h) and (8)) 1755 Right-of-use assets (Note (6)(i)) 1780 Intangible assets (Note (6)(j)) 1840 Deferred tax assets (Note (6)(p)) 1975 Net defined benefit asset (Note (6)(o)) 1980 Other non-current financial assets 1990 Other non-current assets, others TOTAL ASSETS	December 31, 2021 Amount % $ 507,977 6 - - 68,492 1 328,309 4 762,298 8 1,195 - 612,900 7 18,188 - 2,299,359 26 271,479 3 6,167,751 68 183,703 2 11,895 - 3,755 - 100,185 1 8,970 - 10,339 - 14,834 - 6,772,911 74 $ 9,072,270 100	December 31, 2020 Amount % 439,605 5 166 - 61,208 1 314,322 4 647,234 8 3,806 - 580,389 6 11,055 - 2,057,785 24 286,012 4 5,936,662 69 177,053 2 4,704 - 1,203 - 83,678 1 5,599 - 9,142 - 7,575 - 6,511,628 76 8,569,413 100 LIABILITIES AND EQUITY Current liabilities: 2100 Short-term borrowings (Note (6)(k)) 2120 Current financial liabilities at fair value through profit or loss (Note (6)(b)) 2150 Notes payable 2170 Accounts payable (Note (7)) 2200 Other payables (Notes (7)) 2230 Current tax liabilities 2280 Current lease liabilities (Note (6)(m)) 2399 Other current liabilities, others (Notes (6)(l) and (7)) Non-Current liabilities: 2570 Deferred tax liabilities (Note (6)(p)) 2580 Non-current lease liabilities (Notes (6)(m)) 2670 Other non-current liabilities, others Total liabilities Equity (Note (6)(q)): 3100 Share capital 3200 Capital surplus 3300 Retained earnings 3400 Other equity Total equity TOTAL LIABILITIES AND EQUITY	December 31, 2021	December 31, 2020 Amount % - - 46 - 396 - 620,193 8 162,233 2 38,988 - 1,800 - 9,895 - 833,551 10 141,842 2 2,957 - 166 - 144,965 2 978,516 12 1,411,490 16 3,276,107 38 3,017,380 35 (114,080) (1) 7,590,897 88 8,569,413 100
			Amount %
			$ 150,000 2 673 - 398 - 734,993 8 187,659 2 45,041 1 2,571 - 27,196 - 1,148,531 13 175,674 2 9,510 - 166 - 185,350 2 1,333,881 15 1,411,490 16 3,276,107 36 3,192,892 35 (142,100) (2) 7,738,389 85 $ 9,072,270 100

〜 4 〜

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

STATEMENTS OF COMPREHENSIVE INCOME

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

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

For the Y	ears End	ed December 31,	% 100 84
2021	% 100 84 16 3 3 16 5 3 - 8 8 - - - - 8 8 16 2 14 - 1 - - 1 (2) - - (2) (1) 13 4.30 4.28	2020 Amount 4,199,740 3,514,008 685,732 110,977 110,901 685,656 206,919 158,015 1,608 366,542 319,114 1,246 6,329 8,456 (560) 338,424 353,895 673,009 101,339 571,670 1,572 (18,238) 50,905 1,147 33,092 (110,137) (3,356) (22,027) (91,466) (58,374) 513,296
Amount $ 4,373,194 3,652,377 720,817 121,722 120,315 719,410 214,653 163,148 (2,625) 375,176 344,234 624 4,082 10,616 (572) 357,085 371,835 716,069 108,920 607,149 2,572 25,284 5,695 972 32,579 (73,200) (2,513) (14,640) (61,073) (28,494) $ 578,655 $ $
			16 3 3
			16
			5 3 -
			8
			8
			- - - - 8
			8
			16 2
			14 - - 1 - 1 (3) - (1) (2) (1) 13
			4.06
			4.04

〜 5 〜

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

STATEMENTS OF CHANGES IN EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

	Retained earnings	Total equity 6,946,341 571,670 (58,374)
Legal reserve 727,039 - - - 51,476 - - - - - - 778,515 - - - 57,878 - - - - - 836,393	Special reserve 26,629 - - - - 29,720 - - - - - 56,349 - - - - 57,731 - - - - 114,080
		513,296
		- - (465,792) 7,823 585,000 4,229 -
		7,590,897 607,149 (28,494)
		578,655
		- - (494,021) 62,440 418 -
		7,738,389

〜 6 〜

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

STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Cash flows from operating activities: Profit before tax Adjustments: Adjustments to reconcile profit (loss): Depreciation expense Amortization expense Expected credit loss (gain) Net loss (gain) on financial assets or liabilities at fair value through profit or loss Interest expense Interest income Dividend income Share of profit of subsidiaries, associates and joint ventures accounted for using equity method 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 Other operating liabilities Total changes in operating liabilities Total changes in operating assets and liabilities Total adjustments Cash inflow generated from operations Interest received Income taxes paid Net cash flows from operating activities	For the Years Ended December 31, 2021 2020 $ 716,069 673,009 26,201 23,759 2,268 2,270 (2,625) 1,608 6,640 200 572 560 (624) (1,246) (4,082) (6,329) (357,085) (338,424) 121,722 110,977 (120,315) (110,901) (171) 400 (327,499) (317,126) (7,284) 8,238 (11,362) 991 (115,064) (22,063) 2,611 971 (57,644) (60,184) (799) (843) (7,133) 5,646 (196,675) (67,244) 2 (4,388) 114,800 (94,137) 25,398 4,050 17,301 1,864 - (28) 157,501 (92,639) (39,174) (159,883) (366,673) (477,009) 349,396 196,000 624 1,961 (71,874) (67,858) 278,146 130,103
	2021 $ 716,069 26,201 2,268 (2,625) 6,640 572 (624) (4,082) (357,085) 121,722 (120,315) (171) (327,499) (7,284) (11,362) (115,064) 2,611 (57,644) (799) (7,133) (196,675) 2 114,800 25,398 17,301 - 157,501 (39,174) (366,673) 349,396 624 (71,874) 278,146

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 of profit of subsidiaries, associates and joint ventures accounted for using equity method
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
Other operating liabilities
Total changes in operating liabilities
Total changes in operating assets and liabilities
Total adjustments
Cash inflow generated from operations
Interest received
Income taxes paid
Net cash flows from operating activities

For the Years Ended December 31,
2021
2020
$ 716,069
673,009
26,201
23,759
2,268
2,270
(2,625)
1,608
6,640
200
572
560
(624)
(1,246)
(4,082)
(6,329)
(357,085)
(338,424)
121,722
110,977
(120,315)
(110,901)
(171)
400
(327,499)
(317,126)
(7,284)
8,238
(11,362)
991
(115,064)
(22,063)
2,611
971
(57,644)
(60,184)
(799)
(843)
(7,133)
5,646
(196,675)
(67,244)
2
(4,388)
114,800
(94,137)
25,398
4,050
17,301
1,864
-
(28)
157,501
(92,639)
(39,174)
(159,883)
(366,673)
(477,009)
349,396
196,000
624
1,961
(71,874)
(67,858)
278,146
130,103

2021
$ 716,069
26,201
2,268
(2,625)
6,640
572
(624)
(4,082)
(357,085)
121,722
(120,315)
(171)
(327,499)
(7,284)
(11,362)
(115,064)
2,611
(57,644)
(799)
(7,133)
(196,675)
2
114,800
25,398
17,301
-
157,501
(39,174)
(366,673)
349,396
624
(71,874)
278,146

〜 7 〜

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

STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Cash flows from investing activities:
Proceeds from disposal of financial assets at fair value through other comprehensive income
Acquisition of financial assets at 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) from investing activities
Cash flows from financing activities:
Increase in short-term borrowings
Decrease in short-term borrowings
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

〜 7-1 〜

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

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

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

(1) Company History

Excelsior Medical Co., Ltd. (the Company) was incorporated on March 15, 1988 as a company limited by shares and registered under the Ministry of Economic Affairs, R.O.C. The address of the Company's registered office is 17F., No.880, Zhongzheng Rd., Zhonghe Dist., New Taipei City 235, Taiwan, R.O.C.. The Company 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 financial statements were authorized for issue by the Board of Directors on March 11, 2022.

(3) New Standards, Amendments and Interpretations Adopted:

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

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

●Amendments to IFRS 4 “Extension of the Temporary Exemption from Applying IFRS 9”
●Amendments to IFRS 9, IAS39, IFRS7, IFRS 4 and IFRS 16 “Interest Rate Benchmark Reform— Phase 2”
●Amendments to IFRS 16 “Covid-19-Related Rent Concessions beyond June 30, 2021”
(b) The impact of IFRS issued by the FSC but not yet effective

The Company assesses that the adoption of the following new amendments, effective for annual period beginning on January 1, 2022, would not have a significant impact on its financial statements:

－
●Amendments to IAS 16 “Property, Plant and Equipment Proceeds before Intended Use”
－
●Amendments to IAS 37 “Onerous Contracts Cost of Fulfilling a Contract”
●Annual Improvements to IFRS Standards 2018–2020
●Amendments to IFRS 3 “Reference to the Conceptual Framework”

〜 8 〜

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

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

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

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

●Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets Between an Investor and Its Associate or Joint Venture”
●IFRS 17 “ Insurance Contracts” and amendments to IFRS 17 “ Insurance Contracts”
●Amendments to IAS 1 “Classification of Liabilities as Current or Non-current”
●Amendments to IAS 1 “Disclosure of Accounting Policies”
●Amendments to IAS 8 “Definition of Accounting Estimates”
●Amendments to IAS 12 “Deferred Tax related to Assets and Liabilities arising from a Single Transaction”

(4) Summary of Significant Accounting Policies

The significant accounting policies presented in the 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.

〜 9 〜

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

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

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

(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;
2) a financial liability designated as a hedge of the net investment in a foreign operation to the extent that the hedge is effective; or
3) qualifying cash flow hedges to the extent that the hedges are effective.
2.Foreign operations

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

When a foreign operation is disposed of such that control, significant influence, or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal. When the 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.

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.

〜 10 〜

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

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

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

(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.
(e) 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 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.

〜 11 〜

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

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

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

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.

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

2) Fair value through other comprehensive income (FVOCI)

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.

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 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).

〜 12 〜

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

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

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

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.

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.

〜 13 〜

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

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

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

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.

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

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.

〜 14 〜

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

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

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

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.

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 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.

(g) 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.

(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.

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 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.

〜 15 〜

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

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

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

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.

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

Depreciation is calculated on the cost of an asset less its residual value and is recognized in profit or loss on a straight-line basis over the estimated useful lives of each component of an item of property, plant and equipment.

Land is not depreciated.

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

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

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

〜 16 〜

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

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

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

(k) Leases

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.

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

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be reliably determined, the 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

〜 17 〜

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

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

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

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 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 shortterm 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.

(ii) 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.

〜 18 〜

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

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

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

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.

2.Subsequent expenditure

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

3.Amortization

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

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

1) Computer software 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.

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.

〜 19 〜

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

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(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 standalone 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.

〜 20 〜

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

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(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.

〜 21 〜

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

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

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

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.

(q) 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 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 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.

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
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.

〜 22 〜

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

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

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

(r) 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.

(s) Operating Segments

Please refer to the consolidated financial report of Excelsior Medical Co., Ltd. for the years ended December 31, 2021 and 2020 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.

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.

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, 2021.

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).

〜 23 〜

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

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(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, 2021 $ 507,977 - $ 507,977	December 31, 2020
		439,096 509
		439,605

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

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

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

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:

Forward foreign exchange contracts purchased Forward foreign exchange contracts purchased		December 31, 2021
	Amount (in thousands) JPY 257,425 USD 515	Currency Maturity period JPY to TWD 2022.1~2022.3 USD to TWD 2022.1

Foreign exchange forward purchased Foreign exchange forward purchased		December 31, 2020
	Amount (in thousands) USD 107,538 USD 400	Currency Maturity period JPY to TWD 2021.2~2021.3 USD to TWD 2021.1

〜 24 〜

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

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(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, 2021 $ 26,512 98,319 146,648 $ 271,479	December 31, 2020
		30,397 128,802 126,813
		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, 2021 and 2020. The shares sold had a fair value of $40,172 thousand and $1,009 thousand, respectively. The Company realized a gain of loss $4,091 thousand and gain $301 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)(w).

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

(d) Notes receivable, accounts receivable and other receivables

Notes receivable Accounts receivable Other receivables Less: Loss allowance Net	December 31, 2021 $ 68,492 1,108,644 1,195 (18,037) $ 1,160,294	December 31, 2020 61,208 982,406 3,806 (20,850) 1,026,570

〜 25 〜

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

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(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, 2021	December 31, 2021	Loss allowance provision (13,774) (601) (24) - (3,638) (18,037) Loss allowance provision (16,604) (501) (29) - (3,716) (20,850)
	Gross carrying amount Weighted- average loss rate $ 1,174,053 1.59% 616 98.62% 24 100% - 100% 3,638 100% $ 1,178,331 December 31, 2020
		Weighted- average loss rate 1.59% 98.62% 100% 100% 100%

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

Balance as of January 1 Impairment losses recognized Impairment losses reversed Amounts written off Balance as of December 31	For the Years Ended December 31,	For the Years Ended December 31,
	2021 $ 20,850 - (2,625) (188) $ 18,037	2020 19,242 1,608 - - 20,850

〜 26 〜

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

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(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 :	December 31, 2021 $ 527,777 85,123 $ 612,900	December 31, 2020
		491,314 89,075
		580,389

Cost of goods sold Losses (reversal) on inventory valuation and obsolescence Repair and maintenance costs Others operating costs Total	For the Years Ended December 31, 2021 2020 $ 3,566,718 3,442,305 4,514 (14,610) 77,961 83,159 3,184 3,154 $ 3,652,377 3,514,008
	2021 $ 3,566,718 4,514 77,961 3,184 $ 3,652,377

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.

(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	December 31, 2021 $ 5,366,123 801,628 $ 6,167,751	December 31, 2020
		5,256,868 679,794
		5,936,662

1.Subsidiary

Please refer to the consolidated financial statements for the year ended of December 31, 2021.

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, 2021 $ 801,628	December 31, 2020
		679,794

〜 27 〜

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

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(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,	For the Years Ended December 31,
	2021 $ 95,714 23,333 $ 119,047	2020
		104,828 29,521
		134,349

(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.

(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, 2021 and 2020 were as follows:

Cost or deemed cost: Balance as of January 1, 2021 Additions Disposal and obsolescence Transfer from inventories Transfer to inventories Balance as of December 31, 2021 Balance as of January 1, 2020 Additions Disposal and obsolescence Transfer from inventories Transfer to inventories Transfer to expense Balance as of December 31, 2020 Depreciation and impairment losses: Balance as of January 1, 2021 Depreciation for the period Disposal and obsolescence Transfer to inventories Balance as of December 31, 2021 Balance as of January 1, 2020 Depreciation for the period Disposal and obsolescence Transfer to inventories Balance as of December 31, 2020		Land $ 75,758 - - - - $ 75,758 $ 75,758 - - - - - $ 75,758 $ 4,000 - - - $ 4,000 $ 4,000 - - - $ 4,000	Buildings 99,094 993 (2,165) - - 97,922 98,943 543 (392) - - - 99,094 43,369 2,096 (2,165) - 43,300 41,652 2,109 (392) - 43,369	Medical equipment 84,872 2,358 (912) 23,487 (3,301) 106,504 71,463 - (1,664) 15,817 (744) - 84,872 40,543 19,373 (912) (3,301) 55,703 26,854 16,025 (1,664) (672) 40,543	Miscellaneous equipment 12,921 1,660 (1,442) 1,646 - 14,785 23,068 377 (10,850) 726 - (400) 12,921 7,680 2,025 (1,442) - 8,263 16,676 1,854 (10,850) - 7,680	Total 272,645 5,011 (4,519) 25,133 (3,301)

						294,969
						269,232 920 (12,906) 16,543 (744) (400)
						272,645
						95,592 23,494 (4,519) (3,301)
						111,266
						89,182 19,988 (12,906) (672)
						95,592

〜 28 〜

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

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

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

Carrying amount: Balance as of December 31, 2021 Balance as of January 1, 2020 Balance as of December 31, 2020		Land $ 71,758	Buildings 54,622 57,291 55,725	Medical equipment 50,801 44,609 44,329	Miscellaneous equipment 6,522 6,392 5,241	Total 183,703

		$ 71,758				180,050
		$ 71,758				177,053

( 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:

Cost: Balance as of January 1, 2021 Additions Write-off Balance as of December 31, 2021 Balance as of January 1, 2020 Additions Write-off Balance as of December 31, 2020 Accumulated depreciation and impairment losses: Balance as of January 1, 2021 Additions Write-off Balance as of December 31, 2021 Balance as of January 1, 2020 Depreciation for the year Balance as of December 31, 2020 Carrying amount: Balance as of December 31, 2021 Balance as of January 1, 2020 Balance as of December 31, 2020	Buildings $ 11,682 10,174 (6,388) $ 15,468 $ 16,093 3,612 (8,023) $ 11,682 $ 6,978 2,707 (6,112) $ 3,573 $ 3,495 3,483 $ 6,978 $ 11,895 $ 12,598 $ 4,704	Other equipment 1,440 - (1,440) - 1,440 - - 1,440 1,440 - (1,440) - 1,152 288 1,440 - 288 -	Total 13,122 10,174 (7,828) 15,468 17,533 3,612 (8,023) 13,122 8,418 2,707 (7,552) 3,573 4,647 3,771 8,418 11,895 12,886 4,704

The Company added and modified parts of the lease contract, resulting in a increase in right of use assets of $9,868 thousand and an increase of $4,411 thousand to be recognized for the years ended December 31, 2021 and 2020, respectively.

〜 29 〜

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

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

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

For the years ended December 31, 2021 and 2020, the Company leased storage room and parking space under operating lease, please refer to Note (6)(n).

(j) Intangible assets

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

Software Cost: Balance as of January 1, 2021 $ 3,573 Acquisition 713 Disposal (2,008) Balance as of December 31, 2021 $ 2,278 Balance as of January 1, 2020 $ 2,204 Acquisition 1,369 Disposal - Balance as of December 31, 2020 $ 3,573 Amortization and impairment loss: Balance as of January 1, 2021 $ 2,370 Amortization 761 Disposal (2,008) Balance as of December 31, 2021 $ 1,123 Balance as of January 1, 2020 $ 1,537 Amortization 833 Disposal - Balance as of December 31, 2020 $ 2,370 Carrying amount: Balance as of December 31, 2021 $ 1,155 Balance as of January 1, 2020 $ 667 Balance as of December 31, 2020 $ 1,203	Other intangible assets 18,442 3,000 - 21,442 19,442 - (1,000) 18,442 18,442 400 - 18,842 19,412 30 (1,000) 18,442 2,600 30 -	Total 22,015 3,713 (2,008) 23,720 21,646 1,369 (1,000) 22,015 20,812 1,161 (2,008) 19,965 20,949 863 (1,000) 20,812 3,755 697 1,203

〜 30 〜

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

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

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

1.Amortization

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

Operating costs Operating expenses Total	For the Years Ended December 31,	For the Years Ended December 31,
	2021 $ 400 761 $ 1,161	2020
		30 833
		863

(k) Short-term borrowings

Short-term borrowings
Unsecured bank loans Unused short term credit lines Range of interest rates	December 31, 2021 $ 150,000 $ 1,650,000 0.7%	December 31, 2020
		-
		2,400,000
		-

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)(w).

(l) Provisions

Warranties Balance as of January 1, 2021 Additions Provisions reversed or used Balance as of December 31, 2021 Balance as of January 1, 2020 Additions Provisions reversed or used Balance as of December 31, 2020	December 31, 2021	December 31, 2021		December 31, 2020
	$ 2,456			4,221

〜 31 〜

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

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

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

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.

(m) Lease liabilities

The carrying amount of lease liabilities were as follows:

Current Non-current	December 31, 2021 $ 2,571 $ 9,510	December 31, 2020
		1,800
		2,957

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

The Company added and modified parts of the contract, resulting in a increase in lease liabilities of $9,868 thousand and an decrease of $4,411 thousand for the years ended December 31, 2021 and 2020, 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 COVID-19-related rent concessions	For the Years Ended December 31,	For the Years Ended December 31,
	2021 $ 80 $ 161 $ 597 $ 141	2020
		107
		1,173
		905
		-

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

The amounts recognized in the statement of cash flows for the	Company were as follows:	Company were as follows:
Total cash outflow for leases	For the Years Ended December 31,
	2021 $ 3,080	2020
		4,805

1. Building leases

As of December 31, 2021, 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.

〜 32 〜

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

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

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

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.

(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:

Within 1 year 1 to 5 years	December 31, 2021 $ 4,401 69 $ 4,470	December 31, 2020
		5,069 -
		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:

Present value of defined benefit obligations Fair value of plan assets Net defined benefit (assets) liabilities	December 31, 2021 $ 78,776 (87,746) $ (8,970)	December 31, 2020 79,383 (84,982) (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 $87,331 thousand as of December 31, 2021. For information on the utilization of the labor pension fund assets, including the asset allocation and yield of the fund, please refer to the website of the Bureau of Labor Funds, Ministry of Labor.

〜 33 〜

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

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(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 Defined benefit obligation as of December 31	For the Years Ended December 31,	For the Years Ended December 31,
	2021 $ 79,383 758 (2,626) 3,807 (2,546) $ 78,776	2020
		77,275 1,090 (2,752) 629 3,141 79,383

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:

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 Fair value of plan assets as of December 31	For the Years Ended December 31,
	2021 $ 84,982 300 1,207 1,257 $ 87,746	2020 80,459 649 2,590 1,284 84,982

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,	For the Years Ended December 31,
	2021 $ 480 (22) $ 458	2020 471 (30) 441

〜 34 〜

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

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(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,
	2021 $ 458	2020
		441

5) Actuarial assumptions

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

Discount rate Future salary increasing rate	December 31, 2021 December 31, 2020 0.750% 0.350% 3.000% 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 $1,256 thousand.

The weighted average lifetime of the defined benefits plans is 11 years.

6) Sensitivity analysis

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

December 31, 2021 Discount rate Future salary increasing rate December 31, 2020 Discount rate Future salary increasing rate	Influences on defined benefit obligations Increased 0.25% Decreased 0.25% $ (1,622) 1,675 1,599 (1,557) $ (1,775) 1,837 1,748 (1,699)

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

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

2.Defined contribution plans

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

〜 35 〜

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

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

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

The pension costs incurred from the contributions to the Bureau of the Labor Insurance amounted to $7,105 thousand and $7,096 thousand for the years ended December 31, 2021 and 2020, respectively.

(p) Income taxes
1.Income tax expense

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

Current tax expense Current period Adjustment for prior periods Deferred tax expense Origination and reversal of temporary differences Income tax expense from continuing operations	For the Years Ended December 31, 2021 2020 $ 78,182 66,640 (255) (1,795) 77,927 64,845 30,993 36,494 $ 108,920 101,339
	2021 $ 78,182 (255) 77,927 30,993 $ 108,920

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

follows:
	For	the Years Ended	December 31,
		2021	2020
Items that will not be reclassified subsequently to profit or
loss:
Remeasurement from defined benefit plans	$	(514)		(315)
Unrealized gains (losses) on equity instruments at fair
value through other comprehensive income		(578)	(1,363)
Share of other comprehensive income of associates and
joint ventures accounted for using equity method,
components of other comprehensive income		120		531
	$	(972)	(1,147)
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translation	$	14,640	22,027

〜 36 〜

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

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

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

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

Profit before imcome tax Income tax using the Company’s statutory tax rate Permanent differences Tax-exempt income Undistributed earnings additional tax Adjustments for prior periods Income tax expense	For the Years Ended December 31,	For the Years Ended December 31,
	2021 $ 716,069 $ 143,214 (33,761) (278) - (255) $ 108,920	2020 673,009 134,602 (31,379) (297) 208 (1,795) 101,339

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, 2021 and 2020 were as follows:

Deferred tax assets: Balance as of January 1, 2021 Recognized in profit or loss Recognized in other comprehensive income Balance as of December 31, 2021 Balance as of January 1, 2020 Recognized in profit or loss Recognized in other comprehensive income Balance as of December 31, 2020 Deferred tax liabilities: Balance as of January 1, 2021 Recognized in profit and loss Recognized in other comprehensive income Balance as of December 31, 2021 Balance as of January 1, 2020 Recognized in profit or loss Recognized in other comprehensive income Balance as of December 31, 2020	Deferred sales returns and allowance $ 4,022 1,427 - $ 5,449 $ 1,350 2,672 - $ 4,022 $ - - - $ - $ - - - $ -	Unrealized losses on inventories 6,761 213 - 6,974 9,683 (2,922) - 6,761 - - - - - - - -	Unrealized gains on investment - - - - - - - - 139,085 33,332 - 172,417 106,425 32,660 - 139,085	Others 72,895 621 14,246 87,762 53,829 (3,177) 22,243 72,895 2,757 (78) 578 3,257 987 407 1,363 2,757	Total 83,678 2,261 14,246 100,185 64,862 (3,427) 22,243 83,678 141,842 33,254 578 175,674 107,412 33,067 1,363 141,842

〜 37 〜

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

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

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

3.Assessment of tax

The Company’ s income tax returns for the year through 2019 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

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

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

〜 38 〜

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

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(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.

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

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

The Company recognize and reverse special reserve according to the regulation of Financial Supervicory Commision.

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

For the Years Ended December 31,	For the Years Ended December 31,	For the Years Ended December 31,
2020 Dividend per share ($) Amount $ 3.50 494,021	2019
Dividend per share ($) $ 3.50	Dividend per share ($) 3.30	Amount
		465,792

〜 39 〜

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

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

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

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

Dividends distributed to common shareholders Cash Stock Total Other equity interest after tax Balance as of January 1, 2021 Exchange differences on translation of foreign financial statement Exchange differences on subsidiaries accounted for using equity method Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income, associates accounted for using equity method Disposal of investments in equity instruments designated at fair value through other comprehensive income Balance as of December 31, 2021 Balance as of January 1, 2020 Exchange differences on translation of foreign financial statement Exchange differences on subsidiaries accounted for using equity method Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income, associates accounted for using equity method Disposal of investments in equity instruments designated at fair value through other comprehensive income Balance as of December 31, 2020	2021 Dividend per share ($) Amount $ 3.50 494,021 0.50 70,575 $ 564,596 Exchange differences on translation of foreign financial statements Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income Total $ (199,369) 85,289 (114,080) (58,560) - (58,560) (2,513) - (2,513) - 24,706 24,706 - 4,256 4,256 - 4,091 4,091 $ (260,442) 118,342 (142,100) $ (107,903) 51,554 (56,349) (88,110) - (88,110) (3,356) - (3,356) - (19,601) (19,601) - 53,637 53,637 - (301) (301) $ (199,369) 85,289 (114,080)
	$

Dividends distributed to common shareholders
Cash
Stock
Total
Other equity interest after tax
Balance as of January 1, 2021
Exchange differences on translation of foreign financial statement
Exchange differences on subsidiaries accounted for using equity method
Unrealized gains (losses) from financial assets measured at fair value through other
comprehensive income
Unrealized gains (losses) from financial assets measured at fair value through other
comprehensive income, associates accounted for using equity method
Disposal of investments in equity instruments designated at fair value through other
comprehensive income
Balance as of December 31, 2021
Balance as of January 1, 2020
Exchange differences on translation of foreign financial statement
Exchange differences on subsidiaries accounted for using equity method
Unrealized gains (losses) from financial assets measured at fair value through other
comprehensive income
Unrealized gains (losses) from financial assets measured at fair value through other
comprehensive income, associates accounted for using equity method
Disposal of investments in equity instruments designated at fair value through other
comprehensive income
Balance as of December 31, 2020

2021
Dividend per
share ($)
Amount
$ 3.50
494,021
0.50
70,575
$
564,596
Exchange
differences on
translation of
foreign financial
statements
Unrealized
gains (losses)
from financial
assets
measured at
fair value
through other
comprehensive
income
Total
$ (199,369)
85,289
(114,080)
(58,560)
-
(58,560)
(2,513)
-
(2,513)
-
24,706
24,706
-
4,256
4,256
-
4,091
4,091
$
(260,442)
118,342
(142,100)
$ (107,903)
51,554
(56,349)
(88,110)
-
(88,110)
(3,356)
-
(3,356)
-
(19,601)
(19,601)
-
53,637
53,637
-
(301)
(301)
$
(199,369)
85,289
(114,080)

4.Other equity interest after tax

〜 40 〜

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

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

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

(r) Earnings per share

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

1.Basic earnings per share

Profit attributable to ordinary shareholders of the Company Weighted average number of ordinary shares (basic) 2.Diluted earnings per share Profit attributable to ordinary shareholders of the Company Weighted average number of ordinary shares (basic) Effect of employee stock compensation Weighted average number of ordinary shares (diluted) Revenue from contracts with customers 1.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,	For the Years Ended December 31,
	2021 2020 $ 607,149 571,670 141,149 140,652 For the Years Ended December 31,	2020
		571,670
		140,652
		2020
		571,670
		140,652 767
		141,419

(s) Revenue from contracts with customers

〜 41 〜

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

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

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

(t) Employee compensation and directors’ remuneration

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

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

(u) Non-operating income and expenses
1.Interest income

The details of interest income were as follows:

The details of interest income were as follows:
Interest income from bank deposits Other interest income Total	For the Years Ended December 31,
	2021 $ 130 494 $ 624	2020
		1,201 45
		1,246

2.Other income

The details of other income were as follows:

The details of other income were as follows:
Dividend income	For the Years Ended December 31,
	2021 $ 4,082	2020
		6,329

〜 42 〜

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

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

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

3.Financial costs

The details of financial costs were as follows:

Interest expenses Bank borrowings Others	For the Years Ended December 31,	For the Years Ended December 31,
	2021 $ 492 80 $ 572	2020
		453 107
		560

4.Other gains and losses

The details of other gains and losses were as follows:

Foreign exchange gains (losses) Net gains or losses on financial assets (liabilities) measured at fair value through profit or loss Revenue from customs duty refunds Others Total	For the Years Ended December 31,	For the Years Ended December 31,
	2021 $ 1,116 (6,640) 11,609 4,531 $ 10,616	2020
		941 (200) - 7,715
		8,456

(v) Reclassification adjustments of components of other comprehensive income

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

Equity instruments at fair value through other comprehensive income Net changes in fair value Net changes of fair value reclassified to retained earnings Net gains or losses recognized in other comprehensive income	For the Years Ended December 31,	For the Years Ended December 31,
	2021 $ 29,375 (4,091) $ 25,284	2020
		(18,539) 301
		(18,238)

〜 43 〜

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

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

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

(w) Financial instruments

1. 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, 2021 and 2020, 64.86% and 62.30%, respectively, of notes receivable and accounts receivable were three 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	1-2 years	More than 2 years
$ 150,000 923,050 12,081 76,813 (76,140) $ 1,085,804 $ 782,822 4,757 t 11,404 (11,358) $ 787,625	150,000 923,050 12,081 76,813 (76,140) 1,085,804 782,822 4,757 11,404 (11,358) 787,625	- 729,201 338 45,716 (45,187) 730,068 423,554 303 11,404 (11,358) 423,903	150,000 163,487 317 31,097 (30,953) 313,948 329,225 522 - - 329,747	- 9,778 637 - - 10,415 29,845 324 - - 30,169	- 20,584 1,279 - - 21,863 198 651 - - 849	- - 2,578 - - 2,578 - 760 - - 760	- - 6,932 - -
							6,932
							- 2,197 - -
							2,197

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

〜 44 〜

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

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

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

3.Market risks

1) Currency risks

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

Functional currency	Exchange rate	Currency	December 31, 2021
			Foreign currency (in thousands) Carrying amount (TWD) $ 2,785 77,089 144,757 34,814 962 30,142 151,122 36,345 2,637,191 61,974 122,292 3,385,047 295 9,225 285,780 68,730 916 25,354 December 31, 2020
		USD JPY EUR JPY KRW USD EUR JPY USD Currency
			Foreign currency (in thousands) 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
		USD JPY EUR JPY KRW USD

〜 45 〜

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

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

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

Functional currency	Exchange rate	Currency	December 31, 2020
			Foreign currency (in thousands) Carrying amount (TWD) 494,625 136,665 1,274 36,290
Financial liabilities Monetary items TWD TWD	0.276 28.480	JPY USD

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, 2021 and 2020, foreign exchange gains or losses amounted to losses of $4,731 thousand and gains of $941 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, 2021 and 2020 would have increased or decreased the net profit after tax by $310 thousand and $9 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.

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 interest had been 1% higher/lower, other variable remain the same, profit after tax in 2021 and 2020 would have increased/decreased by $4,062 thousand and $3,511 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, 2021 and 2020 would have increased/decreased by $2,715 thousand and $2,860 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.

〜 46 〜

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

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(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, 2021	December 31, 2021	December 31, 2021
	Fair value
Level 1 26,512 98,319 - 124,831 - - - - 124,831 - - - - -	Level 2 - - - - - - - - - 673 - - - 673	Level 3 - - 146,648 146,648 - - - - 146,648 - - - - -	Total
			26,512 98,319 146,648
			271,479
			- - -
			-
			271,479
			673
			- -
			-
			673

〜 47 〜

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

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

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

December 31, 2020	December 31, 2020	December 31, 2020
	Fair value
Level 1 - 30,397 128,802 - 159,199 - - - - 159,199 - - - - -	Level 2 166 - - - - - - - - 166 46 - - - 46	Level 3 - - - 126,813 126,813 - - - - 126,813 - - - - -	Total
			166
			30,397 128,802 126,813
			286,012
			- - -
			-
			286,178
			46
			- -
			-
			46

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

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.

〜 48 〜

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

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(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, 2021 Total gains and losses recognized In other comprehensive income Disposal Balance as of December 31, 2021 Balance as of January 1, 2020 Total gains and losses recognized In other comprehensive income Reclassification Balance as of December 31, 2020	Fair value through other comprehensive income unquoted equity instruments $ 126,813 38,615 (18,780) $ 146,648 $ 231,400 (33,735) (70,852) $ 126,813

〜 49 〜

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

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

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

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

gains and losses”, and“unrealized gains and losses from other comprehensive income”were as follows:		financial assets at fa	ir value through
		For the Years Ended	December 31,
		2021	2020
Total gains and losses recognized
In other comprehensive income, and presented in “unrealized	$	38,615	(33,735)
gains and losses from financial assets at fair value through
other comprehensive income”

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 between significant Valuation Significant nonNon-observable Item techniques observable inputs inputs and fair value Financial assets at fair Comparable Listed ‧ EV/EBITDA Value ‧ The estimated fair value through other Companies Method Multiple (8 on value would increase comprehensive income December 31, 2021) (decrease) if the － equity instruments ‧ EV/Revenue Value value multiple is investments without an higher (lower) and Multiple (2.22 and active market 2.26 on December the marketability discount is lower 31, 2020) (higher) ‧ P/B Value Multiple (1.14~2.19 and 1.13~2.27 on December 31, 2021 and 2020)

‧ Discount due to Lack of Market liquidity (15.36%~30.00% and 26.13%~30.00% on December 31, 2021 and 2020)

〜 50 〜

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

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

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

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

The 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:

December 31, 2021 Financial assets at fair value through other comprehensive income Equity instruments without an active market Equity instruments without an active market December 31, 2020 Financial assets at fair value through other comprehensive income Equity instruments without an active market Equity instruments without an active market	Input Value Multiple Discount due to Lack of Market liquidity Value Multiple Discount due to Lack of Market liquidity	Variation	Impact on Fair Value Change on Other Comprehensive income or loss Favorable Change Unfavorable Change $ 8,201 (8,201) 10,136 (10,136) $ 18,337 (18,337) $ 8,126 (8,126) 11,293 (11,293) $ 19,419 (19,419)
			Favorable Change $ 8,201 10,136 $ 18,337 $ 8,126 11,293 $ 19,419
		5% 5% 5% 5%

(x) 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.

〜 51 〜

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

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

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

2.Risk management framework

The Board of Directors has overall responsibility for the establishment and oversight of the 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, 2021.

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.

〜 52 〜

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

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

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

5.Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices, and credit spreads will affect the 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.

(y) 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.

〜 53 〜

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

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

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

(z) 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, 2021 and 2020, 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, 2021 $ - 4,757 $ 4,757 January 1, 2020 $ 450,000 12,961 $ 462,961	Cash flows 150,000 (2,403) 147,597 Cash flows (450,000) (3,793) (453,793)	Non-cash	changes Others - (447) (447) changes Others - (8,023) (8,023)	December 31, 2021 150,000 12,081
			Acquisition - 10,174 10,174 Non-cash
					162,081
					December 31, 2021 - 4,757
			Acquisition - 3,612 3,612
					4,757

(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	Relationship with the Company
Excelsior Investment Co., Ltd.	Entities with significant influence over the
	Company
Excelsior Group Holdings Co., Ltd.	〞
Dynamic Medical Technologies Inc.	Subsidiary
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 (HK) Co., Limited	〞

〜 54 〜

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

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

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

Name of related party	Relationship with the Company
SinoExcelsior Investment Inc.	Subsidiary
EG Healthcare Inc.	〞
Excelsior Asset Management Co., Ltd.	〞
(Excelsior Asset)
CYJ International Taiwan Inc.	〞
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	〞
Hung Shun Chen Investment Co., Ltd.	Other related parties before May 31, 2021
SciVision Biotech Inc.	Other related parties
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,	For the Years Ended December 31,
	2021 $ 63,023 1,946,276 776,954 24,132 - $ 2,810,385	2020
		52,450 1,788,061 762,596 22,636 373
		2,626,116

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

〜 55 〜

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

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(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,	For the Years Ended December 31,
	2021 $ - 89,352 1,539 $ 90,891	2020
		422 85,521 2,589
		88,532

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,	For the Years Ended December 31,
	2021 $ 72 421 2,483 1,987 40 $ 5,003	2020
		72 1,331 2,661 1,903 96
		6,063

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,	For the Years Ended December 31,
	2021 $ 2,516 1,181 7,470 1,086 2,135 1,829 132 $ 16,349	2020
		2,516 1,278 7,424 2,296 2,135 360 166
		16,175

〜 56 〜

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

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(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,	For the Years Ended December 31,
	2021 $ 17,179	2020
		9,014

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, 2021 $ 29,469 562,276 161,552 9,001 64 327 2 $ 762,691	December 31, 2020
Accounts receivable Accounts receivable Accounts receivable Accounts receivable Other receivables Other receivables Other receivables	Subsidiaries Associates－Bestchain Associates－ERS Associates－Others Subsidiaries Associates Other related parties		24,721 455,219 159,022 8,272 56 420 8
			647,718

4.Payables to related parties

Payables to related parties were as follows:

Accounted for as	Category of related party	December 31, 2021 $ 6,319 97 8,365 15 $ 14,796	December 31, 2020
Accounts payable Accounts payable Other payables Other payables	Associates Subsidiaries Associates Subsidiaries		4,666 - 5,187 16
			9,869

〜 57 〜

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

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

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

5.Guarantee

As of December 31, 2021 and 2020, the Company provided its subsidiaries guarantees for loans, with the credit limits of $1,119,805 thousand and $224,745 thousand, wherein the amounts utilized were $94,985 thousand and $112,564 thousand, respectively.

As of December 31, 2021 and 2020, the Company also provided its associates guarantees for loans, with the credit limits of $800,000 thousand and $661,200 thousand, wherein the amounts utilized were $0 thousand and $76,000 thousand, respectively.

As of December 31, 2021 and 2020, the Company provided its subsidiaries guarantees for investment project, with the credit limits of $801,420 thousand and $58,831 thousand, respectively, which were not yet utilized.

6.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, 2021 and 2020, the Company recognized the amount of $1 thousand and $2 thousand as interest expense. As of December 31, 2021 and 2020, the balance of lease liabilities amounted to $20 thousand and $139 thousand, respectively.
7.Others

Others
Associates and Other related parties Fright and warehousing expenses	For the Years Ended December 31, 2021 2020 $ (49,182) (48,318)
	2021 $ (49,182)

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

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

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

The outstanding payables to related parties are unsecured.

(d) Key management personnel compensation

Key management personnel compensation comprised:

Short-term employee benefits Post-employment benefit	For the Years Ended December 31,	For the Years Ended December 31,
	2021 $ 42,980 369 $ 43,349	2020
		44,339 432
		44,771

〜 58 〜

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

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

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

(8) Pledged Assets ： None.

(9) Significant Commitments and Contingencies

(a) Unrecognized contractual commitments
1. As of December 31, 2021 and 2020, the unused letters of credit were $53,228 thousand and $33,390 thousand, respectively. The guarantee letters issued by banks for sales contract guarantee were all $36,000 thousands.
2. In January 2007, the Company sold 51% equity interest in Jiate Excelsior to a Hong Kong-based company and entered into a joint venture agreement with the Hong Kong-based company. Pursuant to the agreement, the parties had established a joint venture, Excelsior Renal Service, in Hong Kong, of which 49% is held by Excelsior Healthcare, a subsidiary of the Company, and 51% by the Hong Kong-based company. Excelsior Renal Service had established a branch in Taiwan to engage in the sale and lease of medical supplies and equipment. Pursuant to the agreement, the Hong Kong-based company shall also have a right to purchase all of the Company’ s equity interest in Jiate Excelsior and all of Excelsior Healthcare’ s equity interest in Excelsior Renal Service from the fifth anniversary of the date of the agreement at a price to be negotiated by the parties.
3. 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.
4. 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.

〜 59 〜

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

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

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

(12) Other

(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, 2021			For the Years Ended December 31, 2020
	Operating cost	Operating expense	Total	Operating cost	Operating expense		Total
Employee benefits Salary Labor and health insurance Pension Remuneration of directors Others Depreciation Amortization	37,791 3,791 2,078 - 1,527 3,201 500	159,975 11,779 5,485 24,752 7,028 23,000 1,768	197,766 15,570 7,563 24,752 8,555 26,201 2,268	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
For the years ended December 31, 2021 and 2020, the numbers of employees expenses were as follows: 2021 Numbers of employees 206 Numbers of directors who were non-employees 8 The average employee benefits $ 1,159 The average salaries and wages $ 999 Average adjustment rate of employee salaries % 1.83 Remuneration received by supervisors $ -						and their benefit 2020 206
						8
						1,131
						981
						% (7.45)
						-

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.

〜 60 〜

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

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

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

(13) Other disclosures

(a) Information on significant transactions

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

Fund financing to other parties:

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

Note 1: The numbers denote the following:

0 is issuer.
Investees are listed by names and numbered starting with 1.

Note 2: Purpose of fund financing for the borrower:

For those companies with business contact, please fill in 1.
For those companies with short-term financing needs, please fill in 2.

Note 3: Maximum limitation on fund financing:

The lender's each and total fund financial amount cannot exceed 40% of its net asset value that from the most recent reviewed report.
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 guaranteed party	Maximum balance for the year	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 0 1 2 3	The Company 〃〃〃〃〃〃〃〃 Dynamic Medical Technologies Inc. Excelsior Beauty Co., Ltd. Arich Enterprise Co., Ltd.	Excelsior Medical (HK) Co., Limited (Note 4) Excelsior Investment (Malaysia) Co., Ltd. (Note 4) Excelsior Asset Management CO., Ltd. (Note 4) EG Healthcare, Inc. (Note 4) Bestsmile Co., Ltd. (Note 4) Medi-Chem System Sdn. Bhd. (Note 4) 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 2 1 1 2 3 1	1,547,678 1,547,678 1,547,678 1,547,678 1,547,678 1,547,678 1,547,678 762,596 1,788,061 256,808 71,307 169,779	770,280 58,831 990,000 29,305 20,000 14,268 71,338 - 800,000 54,682 500 -	770,280 31,140 990,000 26,765 20,000 13,840 69,200 - 800,000 - 100 -	- - 75,350 9,635 10,000 - - - - - - -	- - - - - - - - - - - -	% 9.95 % 0.40 % 12.79 % 0.35 % 0.26 % 0.18 % 0.89 % - % 10.34 % - % 0.03 % -	7,738,389 7,738,389 7,738,389 7,738,389 7,738,389 7,738,389 7,738,389 7,738,389 7,738,389 642,021 178,268 908,994	Y Y Y Y Y Y Y N N Y N N	N N N N N N N N N N Y N	N N N N N N N N N N N N

〜 61 〜

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

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

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

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. 7. 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 and Arich cannot exceed 50% of their net asset value from the most recent audited or reviewed report.
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 b	alance		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.	Stock SciVision Biotech Inc. 3-D Matrix, Ltd. Caregen Co., Ltd Gie Cheng Co., Ltd. Missioncare Co., Ltd. Rui Guang Healthcare Co., Ltd. Sunder Biomedical Tech. Co., Ltd. Linkon International Golf & Country Club Chai Tai Bo Ai Investment Limited The Orchard Golf & Country Club SciVision Biotech Inc. Caregen Co., Ltd. Stock Warrant Viveve Medical Inc.	- - - - - - - - - - Other related parties 〞 -	Fair value through other comprehensive income 〞〞〞〞〞〞〞〞〞〞〞 Financial assets at fair value through profit or loss	534,525 288,400 39,657 3,795,000 1,580,526 2,423,951 2,279,578 1 10,000 1 1,290,649 34,500 250	26,512 36,345 61,974 34,497 21,068 27,027 54,756 9,300 8,086 368 64,016 53,915 -	% 0.81 % 0.53 % 0.37 % 17.25 % 1.09 % 7.15 % 3.80 % 0.10 % 8.00 % 1.95 % 0.32 % -	26,512 36,345 61,974 34,497 21,068 27,027 54,756 9,300 8,086 368 64,016 53,915 -

〜 62 〜

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

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

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

Name of holder	Category and name of security	Relationship with the Company	Account title	Ending balance	Ending balance	Ending balance	Ending balance	Notes
				Number of shares	Book value	Percentage of shares	Market value
Excelsior Beauty Co., Ltd. Arich Enterprise Co., Ltd.	Stock Join Fun Co., Ltd. Stock National Pharmaceutical Logistics Corp., Ltd.	- Board director of investee	Fair value through other comprehensive income 〞	263,340 -	2,830 300,847	% 19.00 % 17.65	2,830 300,847	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	Transacti different	ons with terms from others	Account/note receivable (payable)	Account/note receivable (payable)	Notes
			Purchase/ Sale	Amount	Percentage of total purchases/ sales	Credit period	Unit price	Credit period	Balance	Percentage of total accounts/ notes receivable (payable)
The Company 〞	Excelsior Renal Service Co., Limited Bestchain Healthtaiwan Co., Ltd.	Associates 〞	Sales 〞	(776,954) (1,946,276)	% (17.77) % (44.50)	Net 30-60 days Net 30-90 days	- -		161,552 562,276	% 13.72 % 47.77	Note 1 Note 1

Note 1:The unit price of cost of goods sold for the Company is based on cost-plus pricing approach by product that is lower than average; because, the expense of goods sold for related parties is lower than average price as well.
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 re relate	ceivables from d party	Subsequently received amount of receivables from related party	Allowances for bad debts
					Amount	Action taken
The Company 〞	Excelsior Renal Service Co., Limited Bestchain Healthtaiwan Co., Ltd.	Associates 〞	161,552 562,276	4.85 3.83	- -	- -	151,090 181,917	- -

Derivative transactions:

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

〜 63 〜

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

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

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

(b) Information on investees:

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

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

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

〜 64 〜

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

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

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

Name of the investor	Name of investee	Location	Major operations	Initial invest	ment amount	Ending balan	Ending balan	ce	Net income (loss) of the investee	Investment income (losses)	Notes
				Ending balance	Beginning balance	Shares	Ratio of shares	Book value
Excelsior Healthcare Co., Limited 〞〞〞 Dynamic Medical Technologies Inc. 〞〞 Dynamic Medical Technologies (Hong Kong) Ltd. Excelsior Beauty Co., Ltd. Excelsior Medical (HK) Co., Limited Excelsior Investment (Malaysia) Co., Ltd 〞 MEDI-CHEM SYSTEMS SDN. BHD.	EG Healthcare, Inc. Excelsior Renal Service Co., Limited Excelsior Medical (HK) Co., Limited Excelsior Investment (Malaysia) Co., Ltd Dynamic Medical Technologies (Hong Kong) Ltd. Excelsior Beauty Co., Ltd. Medytox Taiwan Inc. CYJ INTERNATIONAL COMPANY LIMITED CYJ International Taiwan Inc. Asia Best Healthcare Co., Ltd. RENAL LABORATORIES SDN. BHD. MEDI-CHEM SYSTEMS SDN. BHD. RENAL MANAGEMENT SDN. BHD.	Philippines Hong Kong Hong Kong British Virgin Islands Hong Kong New Taipei City New Taipei City Hong Kong New Taipei City Cayman Islands Malaysia Malaysia Malaysia	Sale and lease of medical equipment, and medical management consultancy service Sale, maintenance and lease of medical equipment, and medical management consultancy service Investment business Investment business Sale and maintenance of medical equipment Sale of aesthetic medical and cosmetic health-care products Sale of cosmetic health-care products Sale and treatment of hair regrowth and conditioning Sale and treatment of hair protecting and conditioning Long-term care business Manufacture of medical equipment Sale of medical equipment Lease business	19,256 312,505 862,529 192,814 382,278 138,745 18,000 66,547 97,920 1,395,079 145,264 44,052 1,315	19,256 312,505 862,529 166,346 382,278 138,745 18,000 66,547 97,920 1,395,079 136,982 25,865 1,315	5,293,453 73,375,728 29,439,829 6,341,416 79,021,783 15,154,496 1,800,000 2,150,000 9,792,000 338,800 16,773,586 350,000 200,000	% 99.99 % 49.00 % 35.64 % 100.00 % 100.00 % 53.89 % 40.00 % 50.00 % 80.00 % 49.38 % 70.00 % 70.00 % 100.00	76,000 412,602 890,869 164,614 262,171 186,103 12 11,882 97,679 1,405,198 159,207 35,771 8,656	11,958 175,336 55,904 391 12,416 30,874 4,546 4,072 21,254 103,173 2,672 (391) 90	- - - - - - - - - - - - -	Sub-subsidiary Associate Subsidiary Sub-subsidiary Subsidiary Subsidiary (Note 1) Associate 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:Dynamic Medical Technologies (Hong Kong) Ltd. has capital reduction by cash to offset company losses of $76,445 thousands and cancelled 19,755,455 shares of common stock in February 2021.

〜 65 〜

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

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

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

(c) Information on investment in Mainland China:
Information on investment in Mainland China:

(Amounts Expressed in Thousands of New Taiwan Dollars)

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

Limitation on investment in Mainland China:

Limitation on investmen	t 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	4,643,033 770,425 1,090,792

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

(1) Direct investment in Mainland China with remittance through a third region.
(2) Indirect investment in Mainland China through an existing investee company in a third region.
(3) Other methods (i.e. entrusted Investment)
Note 2: Recognition of investment gain or loss during current period is pursuant to the following:
(1) If the corporation is in the set-up phase, notes are required.
(2) Recognition basis of investment gains or losses is determined by the following three types, and related notes are required.
- 1) Financial statements of the investee company were audited and certified by an international firm in cooperation with an R.O.C. accounting firm.
- 2) Financial statements of the investee company were audited and certified by the external accountant of the parent company.
- 3) Others
Note 3: The liquidation procedure of Excelsior Healthcare (Shanghai) Corporation was completed in March 2016, and the investment had remitted to Excelsior Healthcare Co., Limited in the third place. As of December 31, 2021, the accumulated amount of investment from Taiwan has not been repatriated yet.
Note 4: The disposal of Shanghai Lintech Medicare Co. was completed in December 2015. As of December 31, 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.

〜 66 〜

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

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

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

Note 7: The liquidation procedure of Beijing Dynamic Inc. was completed in November 2018, and the investment had remitted to Dynamic Medical Technologies (Hong Kong) Ltd. in the third place. As of December 31, 2021, the accumulated amount of investment from Taiwan has not been repatriated yet.

Note 8: (1)The upper limit on investment of the Company and Dynamic 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:

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

Please refer the consolidated financial statements for the year ended December 31, 2021.

〜 67 〜