JDS — Annual Report 2020

Nov 10, 2020

Jourdeness Group Limited and Subsidiaries

Consolidated Financial Statements for the Years Ended December 31, 2020 and 2019 and Independent Auditors’ Report

INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Shareholders Jourdeness Group Limited

Opinion

We have audited the accompanying consolidated financial statements of Jourdeness Group Limited and its subsidiaries (collectively referred to as the “Group”), which comprise the consolidated balance sheets as of December 31, 2020 and 2019, and the consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2020 and 2019, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Basis for Opinion

We conducted our audit of the financial statements for the year ended December 31, 2020 in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the Republic of China. We conducted our audit of the financial statements for the year ended December 31, 2019 in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants, Rule No. 1090360805 issued by the Financial Supervisory Commission of the Republic of China on February 25, 2020, and 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 Group in accordance with The Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements for the year ended December 31, 2020. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

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Key audit matters in the audit of the Group’s consolidated financial statements for the year ended December 31, 2020 are stated as follows:

- Impairment Assessment of Other Intangible Assets Customer Relationship and Goodwill

The accompanying consolidated financial statements for the year ended December 31, 2020 included customer relationship (classified as other intangible assets) of NT$721,075 thousand and goodwill of NT$548,152 thousand, for a total amount of NT$1,269,227 thousand, which represented 18% of total assets in the consolidated financial statements. The intangible assets of customer relationship and goodwill both resulting from the acquisition of assets and existing operations of beauty stores in mainland China, Taiwan and Malaysia for expanding the cosmetology services and the scale of Group’s operations. In accordance with IAS 36 “Impairment of Assets”, management assesses whether there is any indication that those assets have suffered any impairment loss at the balance sheet date. Determining whether those assets are impaired requires an estimation of the recoverable amount of the cash-generating unit to which those assets have been allocated, and the assumptions suffer from high uncertainty since they are subject to management’s judgments and affected by economic trends. Therefore, the impairment assessment of intangible assets was identified as one of the key audit matters.

Refer to Notes 4, 5, 15, 16 and 29 to the consolidated financial statements for the accounting policies, critical accounting judgments and key sources of estimation uncertainty and details of the information about the impairment of intangible assets of customer relationship and goodwill.

The audit procedures performed in response to the above key audit matter included the following:

1. We understood and assessed the reasonableness of the identification for impairment of those assets by management.

2. We evaluated the professional qualification, competency and independence of independent valuers engaged by the management.

3. We understood the process and basis for the estimation of sales growth rate and profit margin with regard to the future operating prospects of the asset’s cash-generating units.

4. We consulted our internal experts to assess the reasonableness and appropriateness of assumptions and methods used in the impairment test report provided by the independent valuers.

Revenue Recognition of Beauty and Body Spa Course Services

As of December 31, 2020, the carrying amount of the contract liabilities - current was NT$1,856,501 thousand, which represented 37% of total liabilities in the consolidated financial statements. For the year ended December 31, 2020, the revenue from beauty and body spa course services amounted to NT$1,136,782 thousand, which represented 42% of net revenue in the consolidated financial statements. The management recognized revenue arising from beauty and body spa course services based on independent actuarial reports. The assumptions of actuarial analyses were made according to the Group’s historical service experience, and the percentage of expected redemption rate of deferred courses was calculated as the number of courses actually rendered to customers relative to the number of courses expected to be rendered to customers, excluding the courses that had incurred refund liability during the effective period. Such underlying assumptions are subject to management’s objective judgments and estimates which are highly uncertain. Therefore, the revenue recognition of beauty and body spa course services was identified as one of the key audit matters.

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Refer to Notes 4, 5, 20 and 24 to the consolidated financial statements for the accounting policies, critical accounting judgments and key sources of estimation uncertainty, and details of the information about the recognition of revenue from beauty and body spa course services.

The audit procedures performed in response to the above key audit matter included the following:

1. We evaluated the professional qualifications, competency and independence of the independent actuaries engaged by the management.

2. We understood and sample tested the accuracy and completeness of the data used by management in performing actuarial analyses of the expected redemption rate of deferred courses.

3. We compared the methodologies and significant assumptions, including expected redemption rate and expected aggregate redemption rate of deferred courses, with specific historical data of the Group in order to assess the reasonableness of management’s judgments.

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

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

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

Those charged with governance, including the audit committee, are responsible for overseeing the Group’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

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

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

1. Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

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

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

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

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

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

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

We also provide those charged with governance with statements 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.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements for the year ended December 31, 2020 and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation preludes 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.

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The engagement partners on the audit resulting in this independent auditors’ report are Cheng-Chun Chiu and Tzu-Jung Kuo.

Deloitte & Touche Taipei, Taiwan Republic of China

March 29, 2021

Notice to Readers

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

For the convenience of readers, the independent auditors’ report and the accompanying consolidated financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language independent auditors’ report and consolidated financial statements shall prevail.

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JOURDENESS GROUP LIMITED AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

ASSETS CURRENT ASSETS Cash and cash equivalents (Notes 4 and 6) Financial assets at fair value through profit or loss - current (Notes 4, 7 and 19) Financial assets at amortized cost - current (Notes 4, 8 and 33) Trade receivables (Notes 4 and 9) Trade receivables from related parties (Notes 4, 9 and 32) Other receivables from related parties (Notes 4 and 32) Inventories (Notes 4, 10, 29 and 32) Other current assets (Notes 29 and 32) Total current assets NON-CURRENT ASSETS Financial assets at amortized cost - non-current (Notes 4, 8 and 33) Property, plant and equipment (Notes 4, 12, 29 and 33) Right-of-use assets (Notes 4 and 13) Investment properties (Notes 4, 14 and 32) Other intangible assets (Notes 4, 5, 16 and 29) Goodwill (Notes 4, 5, 15 and 29) Deferred tax assets (Notes 4 and 26) Other non-current assets (Notes 4, 17, 22 and 29) Total non-current assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term borrowings (Notes 4, 18, 32 and 33) Financial liabilities at fair value through profit or loss - current (Notes 4, 7 and 19) Contract liabilities - current (Notes 4, 20, 24 and 29) Notes payable Trade payables Trade payables to related parties (Note 32) Other payables (Note 21) Other payables to related parties (Note 32) Current tax liabilities (Notes 4 and 26) Lease liabilities - current (Notes 4 and 13) Current portion of long-term borrowings and bonds payable (Notes 4, 18, 19, 32 and 33) Other current liabilities (Note 32) Total current liabilities NON-CURRENT LIABILITIES Bonds payable (Notes 4 and 19) Long-term borrowings (Notes 4, 18, 32 and 33) Deferred tax liabilities (Notes 4 and 26) Lease liabilities - non-current (Notes 4 and 13) Net defined benefit liabilities - non-current (Notes 4 and 22) Guarantee deposits Total non-current liabilities Total liabilities EQUITY (Notes 4, 23 and 28) Share capital Ordinary shares Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Total retained earnings Other equity Exchange differences on translating foreign operations Unearned employee benefits Total other equity Total equity TOTAL		2020 Amount % $ 1,290,497 18 75 - - - 127,388 2 37,278 1 56,607 1 340,299 5 35,715 - 1,887,859 27 230,044 3 2,257,880 32 1,043,594 15 186,786 3 727,182 10 548,152 8 72,757 1 75,823 1 5,142,218 73 $ 7,030,077 100 $ 72,624 1 - - 1,917,192 27 288 - 35,872 1 - - 302,394 4 - - 64,096 1 335,821 5 753,441 11 31,475 - 3,513,203 50 - - 340,965 5 310,863 5 761,628 11 3,138 - 27,804 - 1,444,398 21 4,957,601 71 609,147 9 654,855 9 212,450 3 114,897 2 664,369 9 991,716 14 (96,579) (2) (86,663) (1) (183,242) (3) 2,072,476 29 $ 7,030,077 100		2019
				Amount % $ 837,860 13 3,045 - 292,740 5 160,235 3 12,845 - 26,922 - 320,245 5 28,985 - 1,682,877 26 253,461 4 1,890,916 29 1,064,135 17 121,700 2 780,908 12 522,188 8 73,095 1 80,650 1 4,787,053 74 $ 6,469,930 100 $ 76,449 1 150 - 1,902,040 29 478 - 28,280 1 686 - 303,627 5 1,677 - 236,540 4 316,455 5 - - 11,364 - 2,877,746 45 729,409 11 - - 115,057 2 689,962 11 - - 36,449 - 1,570,877 24 4,448,623 69 609,147 9 654,431 10 165,403 2 48,568 1 770,412 12 984,383 15 (114,897) (2) (111,757) (1) (226,654) (3) 2,021,307 31 $ 6,469,930 100

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

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JOURDENESS GROUP LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

OPERATING REVENUE (Notes 4, 5, 20, 24, 29 and 32) OPERATING COSTS (Notes 4, 10, 25 and 32) GROSS PROFIT OPERATING EXPENSES (Notes 4, 22, 25 and 28) Selling and marketing expenses General and administrative expenses Research and development expenses Total operating expenses PROFIT FROM OPERATIONS NON-OPERATING INCOME AND EXPENSES (Notes 4, 13, 25 and 32) Interest income Other income Other gains and losses Finance costs Total non-operating income and expenses PROFIT BEFORE INCOME TAX INCOME TAX EXPENSE (Notes 4 and 26) NET PROFIT FOR THE YEAR OTHER COMPREHENSIVE INCOME (LOSS) (Notes 4, 22 and 26) Items that will not be reclassified subsequently to profit or loss: Remeasurement of defined benefit plans Income tax relating to items that will not be reclassified subsequently to profit or loss		2020 Amount % $ 2,731,429 100 658,883 24 2,072,546 76 1,289,281 47 357,714 13 28,636 1 1,675,631 61 396,915 15 8,388 - 32,736 1 (8,180) - (52,740) (2) (19,796) (1) 377,119 14 119,394 4 257,725 10 (8,416) - 1,683 - (6,733) -		2019
				Amount % $ 3,252,265 100 760,502 24 2,491,763 76 1,426,206 44 345,415 10 28,102 1 1,799,723 55 692,040 21 17,175 1 14,255 - (6,859) - (65,727) (2) (41,156) (1) 650,884 20 180,418 6 470,466 14 3,109 - (621) - 2,488 -

(Continued)

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JOURDENESS GROUP LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

Items that may be reclassified subsequently to profit or loss: Exchange differences on translating foreign operations Other comprehensive income (loss) for the year, net of income tax TOTAL COMPREHENSIVE INCOME FOR THE YEAR EARNINGS PER SHARE (Note 27) Basic Diluted		2020 Amount % $ 18,318 - 11,585 - $ 269,310 10 $ 4.41 $ 3.98		2019
				Amount % $ (66,329) (2) (63,841) (2) $ 406,625 12 $ 8.05 $ 7.15
		$		$

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

(Concluded)

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JOURDENESS GROUP LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

Share Capital (Note 23) Capital Surplus (Notes 4 and 23) BALANCE AT JANUARY 1, 2019 $ 609,997 $ 660,696 Appropriation of 2018 earnings Legal reserve - - Special reserve - - Cash dividends distributed by the Company - - Net profit for the year ended December 31, 2019 - - Other comprehensive income (loss) for the year ended December 31, 2019, net of income tax - - Total comprehensive income (loss) for the year ended December 31, 2019 - - Issuance of restricted employee shares - - Cancelation of restricted employee shares (850) (6,265) BALANCE AT DECEMBER 31, 2019 609,147 654,431 Appropriation of 2019 earnings Legal reserve - - Special reserve - - Cash dividends distributed by the Company - - Other changes in capital surplus - 424 Net profit for the year ended December 31, 2020 - - Other comprehensive loss for the year ended December 31, 2020, net of income tax - - Total comprehensive income (loss) for the year ended December 31, 2020 - - Issuance of restricted employee shares - - BALANCE AT DECEMBER 31, 2020 $ 609,147 $ 654,855	Retained Earnings (Notes 4 and 23) Legal Reserve Special Reserve Unappropriated Earnings $ 112,651 $ 19,415 $ 653,862 52,752 - (52,752) - 29,153 (29,153) - - (274,499) - - 470,466 - - 2,488 - - 472,954 - - - - - - 165,403 48,568 770,412 47,047 - (47,047) - 66,329 (66,329) - - (243,659) - - - - - 257,725 - - (6,733) - - 250,992 - - - $ 212,450 $ 114,897 $ 664,369	Other Equity (Notes 4, 23 and 28) Exchange Differences on Translating Unearned Foreign Operations Employee Benefits $ (48,568) $ (144,973) - - - - - - - - (66,329) - (66,329) - - 26,101 - 7,115 (114,897) (111,757) - - - - - - - - - - 18,318 - 18,318 - - 25,094 $ (96,579) $ (86,663)	Total Equity $ 1,863,080 - - (274,499) 470,466 (63,841) 406,625 26,101 - 2,021,307 - - (243,659) 424 257,725 11,585 269,310 25,094 $ 2,072,476
		Exchange Differences on Translating Foreign Operations $ (48,568) - - - - (66,329) (66,329) - - (114,897) - - - - - 18,318 18,318 - $ (96,579)

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

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JOURDENESS GROUP LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax Adjustments for: Depreciation expenses Amortization expenses Expected credit loss recognized on trade receivables Net gain on fair value changes of financial assets and liabilities at fair value through profit or loss Finance costs Interest income Compensation costs of employee share options Loss on disposal of property, plant and equipment Property, plant and equipment transferred to expenses Loss on disposal of intangible assets (Gain) loss on lease modification Recognition of write-downs (reversal) of inventories Loss on disposal of inventories Changes in operating assets and liabilities Notes receivable Trade receivables Other receivables Inventories Other current assets Notes payable Trade payables Other payables Contract liabilities Other current liabilities Net defined benefit assets/liabilities Cash generated from operations Interest received Interest paid Income tax paid Net cash generated from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Purchase of financial assets at amortized cost Proceeds from sale of financial assets at amortized cost Purchase of financial assets at fair value through profit or loss Proceeds from sale of financial assets at fair value through profit or loss Net cash outflows on business combinations Payments for property, plant and equipment Proceeds from disposal of property, plant and equipment	2020 $ 377,119 563,480 108,536 - (234) 52,740 (8,388) 25,094 135 88 1,406 (3,044) 820 4,435 - 8,414 (29,685) (12,982) 13,854 (190) 6,906 (22,308) (68,999) 20,111 (1,076) 1,036,232 10,090 (43,972) (99,617) 902,733 (18) 321,088 - 3,068 (3,950) (521,354) 90	2019 $ 650,884 583,125 109,547 16 (1,148) 65,727 (17,175) 26,101 521 3,860 14 695 (1,602) 6,015 106 2,201 (24,208) (52,220) 31,460 194 248 14,524 (527,425) 2,621 (1,101) 872,980 15,994 (48,648) (58,431) 781,895 (100,269) 86,100 (116,162) 113,025 (26,363) (240,033) 3,634 (Continued)

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JOURDENESS GROUP LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

Increase in refundable deposits Decrease in refundable deposits Payments for intangible assets Decrease in other non-current assets Decrease (increase) in prepayments for equipment Net cash used in investing activities Net cash financing activities Proceeds from short-term borrowings Repayments of short-term borrowings Repayments of issuance cost of convertible bonds Proceeds from long-term borrowings Repayments of long-term borrowings Proceeds from guarantee deposits received Refund of guarantee deposits received Repayment of the principal portion of lease liabilities Dividends paid to owners of the Company Disgorgement of short-swing profits Net cash used in financing activities EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH AND CASH EQUIVALENTS HELD IN FOREIGN CURRENCIES NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR	2020 $ (8,425) 6,477 (3,310) 1,190 3,502 (201,642) - - - 354,773 - - (9,219) (350,975) (243,659) 424 (248,656) 202 452,637 837,860 $ 1,290,497	2019 $ (6,437) - (1,686) 2,596 (577) (286,172) 219,485 (213,465) (3,600) - (400,000) 3,317 - (373,320) (274,499) - (1,042,082) 16,346 (530,013) 1,367,873 $ 837,860

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

(Concluded)

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

JOURDENESS GROUP LIMITED AND SUBSIDIARIES

1. GENERAL INFORMATION

Jourdeness Group Limited (the “Company”) was incorporated in Cayman Islands in June 2010. The Company and its subsidiaries (collectively referred to as the “Group”) are mainly engaged in the beauty and body spa business (except medical cosmetology), manufacturing and sale of cosmetics, business management and consulting services.

The Company’s shares have been listed on the Taiwan Stock Exchange since October 21, 2015.

The consolidated financial statements are presented in the Company’s functional currency, the New Taiwan dollar.

2. APPROVAL OF CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements were approved by the Company’s board of directors on March 24, 2021.

3. APPLICATION OF NEW, AMENDED AND REVISED STANDARDS AND INTERPRETATIONS

• a. Initial application of the amendments to the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) (collectively, the “IFRSs”) endorsed and issued into effect by the Financial Supervisory Commission (FSC)

The initial application of the amendments to the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the IFRSs endorsed and issued into effect by the FSC did not have material impact on the Group’s accounting policies.

• b. The IFRSs endorsed by the Financial Supervisory Commission (FSC) for application starting from 2021

New IFRSs Amendments to IFRS 4 “Extension of the Temporary Exemption from Applying IFRS 9” Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 “Interest Rate Benchmark Reform - Phase 2” Amendment to IFRS 16 “Covid-19 - Related Rent Concessions”	Effective Date Announced by IASB
	Effective immediately upon promulgation by the IASB January 1, 2021 June 1, 2020

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

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• c. New IFRSs in issue but not yet endorsed and issued into effect by the FSC

New IFRSs “Annual Improvements to IFRS Standards 2018-2020” Amendments to IFRS 3 “Reference to the Conceptual Framework” Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets between an Investor and its Associate or Joint Venture” IFRS 17 “Insurance Contracts” Amendments to IFRS 17 Amendments to IAS 1 “Classification of Liabilities as Current or Non-current” Amendments to IAS 1 “Disclosure of Accounting Policies” Amendments to IAS 8 “Definition of Accounting Estimates” Amendments to IAS 16 “Property, Plant and Equipment - Proceeds before Intended Use” Amendments to IAS 37 “Onerous Contracts - Cost of Fulfilling a Contract”

Effective Date Announced by IASB (Note 1)

January 1, 2022 (Note 2) January 1, 2022 (Note 3) To be determined by IASB January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 (Note 6) January 1, 2023 (Note 7) January 1, 2022 (Note 4) January 1, 2022 (Note 5)

• Note 1: Unless stated otherwise, the above New IFRSs are effective for annual reporting periods beginning on or after their respective effective dates.

• Note 2: The amendments to IFRS 9 will be applied prospectively to modifications and exchanges of financial liabilities that occur on or after the annual reporting periods beginning on or after January 1, 2022. The amendments to IAS 41 “Agriculture” will be applied prospectively to the fair value measurements on or after the annual reporting periods beginning on or after January 1, 2022. The amendments to IFRS 1 “First-time Adoptions of IFRSs” will be applied retrospectively for annual reporting periods beginning on or after January 1, 2022.

• Note 3: The amendments are applicable to business combinations for which the acquisition date is on or after the beginning of the annual reporting period beginning on or after January 1, 2022.

• Note 4: The amendments are applicable to property, plant and equipment that are brought to the location and condition necessary for them to be capable of operating in the manner intended by management on or after January 1, 2021.

• Note 5: The amendments are applicable to contracts for which the entity has not yet fulfilled all its obligations on January 1, 2022.

• Note 6: The amendments will be applied prospectively for annual reporting periods beginning on or after January 1, 2023.

• Note 7: The amendments are applicable to changes in accounting estimates and changes in accounting policies that occur on or after the beginning of the annual reporting period beginning on or after January 1, 2023.

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

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4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

• a. Statement of compliance

These consolidated financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and IFRSs as endorsed and issued into effect by the FSC.

• b. Basis of preparation

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

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

• 1) Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities;

• 2) Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for an asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and

• 3) Level 3 inputs are unobservable inputs for an asset or liability.

• c. Classification of current and non-current assets and liabilities

Current assets include:

• 1) Assets held primarily for the purpose of trading;

• 2) Assets expected to be realized within 12 months after the reporting period; and

• 3) Cash and cash equivalents unless the asset is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period.

Current liabilities include:

• 1) Liabilities held primarily for the purpose of trading;

• 2) Liabilities due to be settled within 12 months after the reporting period, and

• 3) Liabilities for which the Group does not have an unconditional right to defer settlement for at least 12 months after the reporting period.

Assets and liabilities that are not classified as current are classified as non-current.

• d. Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and the entities controlled by the Company (i.e., its subsidiaries). When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the Company. All intra-group transactions, balances, income and expenses are eliminated in full upon consolidation.

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Refer to Note 11, Table 5 and Table 6 for detailed information on subsidiaries (including percentages of ownership and main businesses).

e. Business combinations

Acquisitions of businesses are accounted for using the acquisition method. Acquisition-related costs are generally recognized in profit or loss as they are incurred.

Goodwill is measured as the excess of the sum of the consideration transferred and the fair value of the acquirer’s previously held equity interests in the acquiree over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed.

f. Foreign currencies

In preparing the financial statements of each individual group entity, transactions in currencies other than the entity’s functional currency (i.e., foreign currencies) are recognized at the rates of exchange prevailing at the dates of the transactions.

At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Exchange differences on monetary items arising from settlement or translation are recognized in profit or loss in the period.

Non-monetary items measured at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Exchange differences arising from the retranslation of non-monetary items are included in profit or loss for the period except for exchange differences arising from the retranslation of non-monetary items in respect of which gains and losses are recognized directly in other comprehensive income; in which cases, the exchange differences are also recognized directly in other comprehensive income.

Non-monetary items that are measured at historical cost in a foreign currency are translated using the exchange rate at the date of the transaction.

For the purpose of presenting consolidated financial statements, the functional currencies of the Company and its foreign operations (including subsidiaries in other countries that use currencies which are different from the currency of the Company) are translated into the presentation currency, the New Taiwan dollar, as follows: Assets and liabilities are translated at the exchange rates prevailing at the end of the reporting period; and income and expense items are translated at the average exchange rates for the period. The resulting currency translation differences are recognized in other comprehensive income.

g. Inventories

Inventories consist of raw materials, supplies, finished goods and work in progress and are stated at the lower of cost or net realizable value. Inventory write-downs are made by item, except where it may be appropriate to group similar or related items. The net realizable value is the estimated selling price of inventories less all estimated costs of completion and costs necessary to make the sale. Inventories are recorded at the weighted-average cost on the balance sheet date.

h. Property, plant and equipment

Property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment loss.

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Property, plant and equipment in the course of construction are measured at cost less any recognized impairment loss. Cost includes professional fees and borrowing costs eligible for capitalization. Such assets are depreciated and classified to the appropriate categories of property, plant and equipment when completed and ready for their intended use.

Except for freehold land which is not depreciated, the depreciation of property, plant and equipment is recognized using the straight-line method. Each significant part is depreciated separately. If a lease term is shorter than the assets’ useful lives, such assets are depreciated over the lease term. The estimated useful lives, residual values and depreciation methods are reviewed at the end of each reporting period, with the effects of any changes in the estimates accounted for on a prospective basis.

On derecognition of an item of property, plant and equipment, the difference between the sales proceeds and the carrying amount of the asset is recognized in profit or loss.

• i. Investment properties

Investment properties are properties held to earn rental and/or for capital appreciation include right-of-use assets and properties if the definition of investment properties is met. Investment properties also include land held for a currently undetermined future use.

Investment properties are initially measured at cost, including transaction costs. Subsequent to initial recognition, investment properties are measured at cost less accumulated depreciation and accumulated impairment loss.

Investment properties acquired through leases were initially measured at cost, which comprises the initial measurement of lease liabilities adjusted for lease payments made on or before the commencement date, plus initial direct costs incurred and an estimate of costs needed to restore the underlying assets, less any lease incentives received. These investment properties are subsequently measured at cost less accumulated depreciation and accumulated impairment loss and adjusted for any remeasurement of the lease liabilities.

Except for freehold land, the depreciation of all investment properties are recognized using the straight-line method.

For a transfer of classification from right-of-use assets to investment properties, the deemed cost of an item of property for subsequent accounting is its carrying amount.

On derecognition of an investment property, the difference between the net disposal proceeds and the carrying amount of the asset is included in profit or loss.

• j. Goodwill

Goodwill arising from the acquisition of a business is measured at cost as established at the date of acquisition of the business less accumulated impairment loss.

For the purposes of impairment testing, goodwill is allocated to each of the Group’s cash-generating units or groups of cash-generating units (referred to as “cash-generating units”) that is expected to benefit from the synergies of the combination.

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A cash-generating unit to which goodwill has been allocated is tested for impairment annually or more frequently when there is an indication that the unit may be impaired, by comparing its carrying amount, including the attributed goodwill, with its recoverable amount. However, if the goodwill allocated to a cash-generating unit was acquired in a business combination during the current annual period, that unit shall be tested for impairment before the end of the current annual period. If the recoverable amount of the cash-generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then pro rata to the other assets of the unit based on the carrying amount of each asset in the unit. Any impairment loss is recognized directly in profit or loss. Any impairment loss recognized for goodwill is not reversed in subsequent periods.

If goodwill has been allocated to a cash-generating unit and the entity disposes of an operation within that unit, the goodwill associated with the operation which is disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal and is measured on the basis of the relative values of the operation disposed of and the portion of the cash-generating unit retained.

• k. Intangible assets

• 1) Intangible assets acquired separately

Intangible assets with finite useful lives that are acquired separately are initially measured at cost and subsequently measured at cost less accumulated amortization and accumulated impairment loss. Amortization is recognized on a straight-line basis. The estimated useful lives, residual values, and amortization methods are reviewed at the end of each reporting period, with the effect of any changes in the estimates accounted for on a prospective basis.

• 2) Intangible assets acquired in a business combination

Intangible assets acquired in a business combination and recognized separately from goodwill are initially recognized at their fair value at the acquisition date. Subsequent to initial recognition, they are measured on the same basis as intangible assets that are acquired separately.

• 3) Derecognition of intangible assets

On derecognition of an intangible asset, the difference between the net disposal proceeds and the carrying amount of the asset is recognized in profit or loss.

• l. Impairment of property, plant and equipment, right-of-use asset and intangible assets other than goodwill

At the end of each reporting period, the Group reviews the carrying amounts of its property, plant and equipment, right-of-use asset and intangible assets, excluding goodwill, to determine whether there is any indication that those assets have suffered any impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. When it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. Corporate assets are allocated to the smallest group of cash-generating units on a reasonable and consistent basis of allocation.

The recoverable amount is the higher of fair value less costs to sell and value in use. If the recoverable amount of an asset or cash-generating unit is estimated to be less than its carrying amount, the carrying amount of the asset or cash-generating unit is reduced to its recoverable amount, with the resulting impairment loss recognized in profit or loss.

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When an impairment loss is subsequently reversed, the carrying amount of the corresponding asset, cash-generating unit or assets related to contract costs is increased to the revised estimate of its recoverable amount, but only to the extent of the carrying amount that would have been determined had no impairment loss been recognized for the asset, cash-generating unit or assets related to contract costs in prior years. A reversal of an impairment loss is recognized in profit or loss.

m. Financial instruments

Financial assets and financial liabilities are recognized when an entity in the Group becomes a party to the contractual provisions of the instruments.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issuance of financial assets and financial liabilities (other than financial assets and financial liabilities at FVTPL) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at FVTPL are recognized immediately in profit or loss.

1) Financial assets

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

• a) Measurement categories

Financial assets are classified into the following categories:

• i. Financial assets at FVTPL

Financial assets are classified as at FVTPL when such a financial asset is mandatorily classified or designated as at FVTPL. Financial assets mandatorily classified as at FVTPL include investments in equity instruments which are not designated as at FVTOCI and debt instruments that do not meet the amortized cost criteria or the FVTOCI criteria.

Financial assets at FVTPL are subsequently measured at fair value, and any interest earned on such financial assets are recognized in interest income; any remeasurement gains or losses on such financial assets are recognized in other gains or losses. Fair value is determined in the manner described in Note 31.

• ii. Financial assets at amortized cost

Financial assets that meet the following conditions are subsequently measured at amortized cost:

• i) The financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and

• ii) The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Subsequent to initial recognition, financial assets at amortized cost, including cash and cash equivalents, notes receivable at amortized cost, trade receivables and other receivables, are measured at amortized cost, which equals the gross carrying amount determined by the effective interest method less any impairment loss. Exchange differences are recognized in profit or loss.

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Interest income is calculated by applying the effective interest rate to the gross carrying amount of such a financial asset, except for:

• i) Purchased or originated credit-impaired financial assets, for which interest income is calculated by applying the credit adjusted effective interest rate to the amortized cost of such financial assets; and

• ii) Financial assets that are not credit impaired on purchase or origination but have subsequently become credit impaired, for which interest income is calculated by applying the effective interest rate to the amortized cost of such financial assets in subsequent reporting periods.

A financial asset is credit impaired when one or more of the following events have occurred:

• i) Significant financial difficulty of the issuer or the borrower;

• ii) Breach of contract, such as a default;

• iii) It is becoming probable that the borrower will enter bankruptcy or undergo a financial reorganization; or

• iv) The disappearance of an active market for that financial asset because of financial difficulties.

Cash equivalents include time deposits with original maturities within 3 months from the date of acquisition, which are highly liquid, readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. These cash equivalents are held for the purpose of meeting short-term cash commitments.

• b) Impairment of financial assets

The Group recognizes a loss allowance for expected credit losses on financial assets at amortized cost (including trade receivables).

The Group always recognizes lifetime expected credit losses (ECLs) for trade receivables. For all other financial instruments, the Group recognizes lifetime ECLs when there has been a significant increase in credit risk since initial recognition. If, on the other hand, the credit risk on a financial instrument has not increased significantly since initial recognition, the Group measures the loss allowance for that financial instrument at an amount equal to 12-month ECLs.

Expected credit losses reflect the weighted average of credit losses with the respective risks of default occurring as the weights. Lifetime ECLs represent the expected credit losses that will result from all possible default events over the expected life of a financial instrument. In contrast, 12-month ECLs represent the portion of lifetime ECLs that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date.

For internal credit risk management purposes, the Group determines that the following situations indicate that a financial asset is in default (without taking into account any collateral held by the Group):

• i. Internal or external information show that the debtor is unlikely to pay its creditors.

• ii. When a financial asset is more than specific days past due unless the Group has reasonable and corroborative information to support a more lagged default criterion.

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The Group recognizes an impairment gain or loss in profit or loss for all financial instruments with a corresponding adjustment to their carrying amount through a loss allowance account.

• c) Derecognition of financial assets

The Group derecognizes a financial asset only when the contractual rights to the cash flows from the asset expire or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party.

On derecognition of a financial asset at amortized cost in its entirety, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss.

• 2) Equity instruments

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

Equity instruments issued by an entity in the Group are recognized at the proceeds received, net of direct issue costs.

The repurchase of the Company’s own equity instruments is recognized in and deducted directly from equity. No gain or loss is recognized in profit or loss on the purchase, sale, issuance or cancellation of the Company’s own equity instruments.

• 3) Financial liabilities

• a) Subsequent measurement

Except for the following situations, all financial liabilities are measured at amortized cost using the effective interest method:

Financial liabilities at FVTPL

Financial liabilities are classified as at FVTPL when such financial liabilities are held for trading.

Financial liabilities held for trading are stated at fair value, and any remeasurement gains or losses on such financial liabilities are recognized in other gains or losses. Fair value is determined in the manner described in Note 31.

• b) Derecognition of financial liabilities

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

• 4) Convertible bonds

The component parts of compound instruments (i.e., convertible bonds) issued by the Group are classified separately as financial liabilities and equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

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On initial recognition, the fair value of the liability component is estimated using the prevailing market interest rate for similar non-convertible instruments. This amount is recorded as a liability on an amortized cost basis using the effective interest method until extinguished upon conversion or upon the instrument’s maturity date. Any embedded derivative liability is measured at fair value.

The conversion option classified as equity is determined by deducting the amount of the liability component from the fair value of the compound instrument as a whole. This is recognized and included in equity, net of income tax effects, and is not subsequently remeasured. In addition, the conversion option classified as equity will remain in equity until the conversion option is exercised; in which case, the balance recognized in equity will be transferred to capital surplus - share premiums. When the conversion option remains unexercised at maturity, the balance recognized in equity will be transferred to capital surplus - share premiums.

Transaction costs that relate to the issuance of the convertible notes are allocated to the liability and equity components in proportion to the allocation of the gross proceeds. Transaction costs relating to the equity component are recognized directly in equity. Transaction costs relating to the liability component are included in the carrying amount of the liability component.

n. Revenue recognition

The Group identifies contracts with customers, allocates the transaction price to the performance obligations and recognizes revenue when performance obligations are satisfied.

• 1) Revenue from the sale of goods

Revenue from the sale of goods comes from sales of beauty cosmetics. The main channels of distribution are franchise, directly-managed stores and internet. Sales of beauty cosmetics are recognized as revenue when the goods are delivered to the customer’s specific location. Before the goods are delivered to the customer, the transaction price received is recognized as a contract liability. When the goods have been delivered to the customer, the advance receipts is recognized as revenue.

• 2) Revenue from the rendering of services

The services revenue comes from beauty and body spa course services, and the Group provides beauty and body spa course services and charges for various courses. At the time of sale, the total amount of income from the beauty and body spa courses will be based on the ratio of number of courses in which customers actually attended to the overall number of courses, advanced receipts are recognized as a contract liability, then reclassified as revenue when services have been provided. At the end of each reporting period, the management recognized and adjusted beauty and body spa course services revenue based on the actuarial analyses of the Group’s historical service experience and the percentage of expected redemption rate of deferred courses was calculated as the number of courses actually rendered to customers relative to the number of courses expected to be rendered to customers, excluding the courses that had incurred refund liability during the effective period.

o. Leasing

At the inception of a contract, the Group assesses whether the contract is, or contains, a lease.

• 1) The Group as lessor

Leases are classified as finance leases whenever the terms of a lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

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When the Group subleases a right-of-use asset, the sublease is classified by reference to the right-of-use asset arising from the head lease, not with reference to the underlying asset. However, if the head lease is a short-term lease that the Group, as a lessee, has accounted for applying recognition exemption, the sublease is classified as an operating lease.

Lease payments (less any lease incentives payable) from operating leases are recognized as income on a straight-line basis over the terms of the relevant leases.

2) The Group as lessee

The Group recognizes right-of-use assets and lease liabilities for all leases at the commencement date of a lease, except for short-term leases and low-value asset leases accounted for applying a recognition exemption where lease payments are recognized as expenses on a straight-line basis over the lease terms.

Right-of-use assets are initially measured at cost, which comprises the initial measurement of lease liabilities adjusted for lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs needed to restore the underlying assets, and less any lease incentives received. Right-of-use assets are subsequently measured at cost less accumulated depreciation and impairment losses and adjusted for any remeasurement of the lease liabilities. Right-of-use assets are presented on a separate line in the consolidated balance sheets.

Right-of-use assets are depreciated from the commencement dates to the earlier of the end of the useful lives of the right-of-use assets or the end of the lease terms.

Lease liabilities are initially measured at the present value of the lease payments. The lease payments are discounted using the interest rate implicit in a lease, if that rate can be readily determined. If that rate cannot be readily determined, the Group uses the lessee’s incremental borrowing rate.

Subsequently, lease liabilities are measured at amortized cost using the effective interest method, with interest expense recognized over the lease terms. When there is a change in a lease term, the Group remeasures the lease liabilities with a corresponding adjustment to the right-of-use-assets. However, if the carrying amount of the right-of-use assets is reduced to zero, any remaining amount of the remeasurement is recognized in profit or loss. Lease liabilities are presented on a separate line in the consolidated balance sheets.

p. Borrowing costs

Borrowing costs directly attributable to an acquisition, construction or production of qualifying assets are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization.

Other than that which is stated above, all other borrowing costs are recognized in profit or loss in the period in which they are incurred.

q. Employee benefits

1) Short-term employee benefits

Liabilities recognized in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related services.

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2) Retirement benefits

Payments to defined contribution retirement benefit plans are recognized as expenses when employees have rendered services entitling them to the contributions.

Defined benefit costs (including service cost, net interest and remeasurement) under defined benefit retirement benefit plans are determined using the projected unit credit method. Service cost (including current service cost), and net interest on the net defined benefit liabilities (assets) are recognized as employee benefits expense in the period in which they occur. Remeasurement, comprising actuarial gains and losses and the return on plan assets (excluding interest), is recognized in other comprehensive income in the period in which it occurs. Remeasurement recognized in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to profit or loss.

Net defined benefit liabilities (assets) represent the actual deficit (surplus) in the Group’s defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any refunds from the plans or reductions in future contributions to the plans.

• r. Share-based payment arrangements

Restricted shares for employees granted to employees

The fair value at the grant date of the restricted shares for employees is expensed on a straight-line basis over the vesting period, based on the Group’s best estimates of the number of shares or options that are expected to ultimately vest, with a corresponding increase in other equity - unearned employee benefits. It is recognized as an expense in full at the grant date if vested immediately.

When restricted shares for employees are issued, other equity - unearned employee benefits is recognized on the grant date, with a corresponding increase in capital surplus - restricted shares for employees.

At the end of each reporting period, the Group revises its estimate of the number of restricted shares for employees expected to vest. The impact of the revision of the original estimates is recognized in profit or loss such that the cumulative expenses reflect the revised estimate, with a corresponding adjustment to capital surplus - restricted shares for employees.

• s. Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.

1) Current tax

Income tax payable (recoverable) is based on taxable profit (loss) for the year determined according to the applicable tax laws of each tax jurisdiction.

According to the Income Tax Law in the ROC, an additional tax on unappropriated earnings is provided for in the year the shareholders approve to retain earnings.

Adjustments of prior years’ tax liabilities are added to or deducted from the current year’s tax provision.

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• 2) Deferred tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities and the corresponding tax bases used in the computation of taxable profit.

Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences and unused loss carryforwards to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized.

Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognized to the extent that it is probable that there will be sufficient taxable profits against which to utilize the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the assets to be recovered. A previously unrecognized deferred tax asset is also reviewed at the end of each reporting period and recognized to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liabilities are settled or the assets are realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

• 3) Current and deferred taxes for the year

Current and deferred taxes are recognized in profit or loss, except when they relate to items that are recognized in other comprehensive income or directly in equity; in which case, the current and deferred taxes are also recognized in other comprehensive income or directly in equity, respectively.

5. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

In the application of the Group’s accounting policies, management is required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered relevant. Actual results may differ from these estimates.

The Group considers the economic implications of the COVID-19 when making its critical accounting estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised if the revisions affect only that period or in the period of the revisions and future periods if the revisions affect both current and future periods.

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Key Sources of Estimation Uncertainty

a. Beauty and body course services revenue recognition

In principle, the total amount for the total number of the beauty and body spa course advanced receipt from customer is recognized as a contract liability, then reclassified as revenue when service is provided. At the end of each reporting period, the Group assesses the assumptions of the actuarial analyses, including the percentage of expected redemption rate of deferred courses calculated as the number of courses actually rendered to customers relative to the number of courses expected to be rendered to customers, excluding the courses that have incurred refund liability during the effective period, in order to adjust the revenue recognized.

b. Assessment of goodwill impairment

Determining whether goodwill is impaired requires an estimation of the value in use of the cash-generating units to which goodwill has been allocated. The calculation of the value in use requires management to estimate the future cash flows expected to arise from the cash-generating units and a suitable discount rate in order to calculate the present value. Where the actual future cash flows are less than expected, a material impairment loss may arise.

c. Assessment of customer relationship impairment

In assessing the impairment of customer relationship, management evaluates the cash flows and profit or loss of specific group of assets based on management’s objective judgment and industry characteristic. When there are changes in the economic trends or corporate strategies, a material impairment loss may arise.

6. CASH AND CASH EQUIVALENTS

Cash on hand Checking accounts and demand deposits Cash equivalents Time deposits		December 31	December 31
		2020 $ 3,512 1,142,982 144,003 $ 1,290,497	2019 $ 3,644 810,539 23,677 $ 837,860

The market rate intervals of cash in bank at the end of the reporting period were as follows:

Bank balance	December 31
	2020 2019 0.01%-2.025% 0.01%-3.10%

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7. FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS

Financial assets at FVTPL-current Financial assets mandatorily classified as at FVTPL Non-derivative financial assets - financial bonds Derivative financial liabilities (not under hedge accounting) Put option and redemption option of convertible bonds (Note 19) Financial liabilities at FVTPL-current Financial liabilities held for trading Derivative financial liabilities (not under hedge accounting) Put option and redemption option of convertible bonds (Note 19)		December	31
		2020 $ - 75 $ 75 $ -	2019 $ 3,045 - $ 3,045 $ 150

8. FINANCIAL ASSETS AT AMORTIZED COST

Current Financial products (a) Time deposits with original maturities of more than 3 months (b) Non-current Restricted time deposits (c) Restricted demand deposits (c)		December 31	December 31
		2020 $ - - $ - $ 228,000 2,044 $ 230,044	2019 $ 99,015 193,725 $ 292,740 $ 252,217 1,244 $ 253,461

a. Financial products were recognized when its subsidiaries, Jourdeness (Guangzhou) Cosmetics Co., Ltd. and Jourdeness (Guangzhou) Cosmetology Enterprise Management Co., Ltd., entered into principal protected interest rate linked investment product with the bank. At the end of the reporting period, outstanding financial products were as follows: (December 31, 2020: Nil.)

	December 31,
	2019
Annual rate of return	3.45%-3.55%
Maturity date	2020.02.28-
	2020.05.11

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The Group’s investment policy was to invest in both short-term financial products and structured deposits with low credit risk. The Group assessed the impact of credit risk on principal and benefits through understanding of the final destination of the funds and the value of collaterals. In assessing the financial deposits with low credit risk, no impairment loss was recognized for financial products.

• b. The interest rate for time deposit with original maturities of more than 3 months was 2.25% per annum as of December 31, 2019.

• c. The market interest rates for restricted time deposits and restricted demand deposits were ranging from 0.05% to 0.76% and 0.10% to 1.045% per annum as of December 31, 2020 and 2019, respectively.

• d. Refer to Note 33 for information relating to investments financial assets at amortized cost pledged as security.

9. NOTES RECEIVABLE AND TRADE RECEIVABLES

Trade receivables At amortized cost Gross carrying amount Less: Allowance for impairment loss Trade receivables from related parties (Note 32)		December 31	December 31
		2020 $ 127,998 (610) $ 127,388 $ 32,278	2019 $ 160,845 (610) $ 160,235 $ 12,845

The retail sales of the Group to individual consumers were usually settled through cash and credit card. Trade receivables mainly consist of payments due from banks for credit cards. The average credit period of sales of goods for other trade receivables was 90-180 days, and no interest was charged on trade receivables.

The Group measures the loss allowance for trade receivables at an amount equal to lifetime ECLs. The expected credit losses on trade receivables are estimated using a provision matrix by reference to the past default experience of the debtor and an analysis of the debtor’s current financial position, adjusted for general economic conditions of the industry in which the debtors operate and an assessment of both the current as well as the forecasted direction of economic conditions at the reporting date. As the Group’s historical credit loss experience does not show significantly different loss patterns for different customer segments, the provision for loss allowance based on past due status is not further distinguished according to the Group’s different customer base.

The Group writes off a trade receivable when there is information indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery, e.g. when the debtor has been placed under liquidation. For trade receivables that have been written off, the Group continues to engage in enforcement activity to attempt to recover the receivables due. Where recoveries are made, these are recognized in profit or loss.

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The following table details the loss allowance of trade receivables based on the Group’s provision matrix.

December 31, 2020

Not Past Due Less than 90 Days Gross carrying amount $ 126,911 $ 343 Loss allowance (Lifetime ECLs) - (1) Amortized cost $ 126,911 $ 342 December 31, 2019 Not Past Due Less than 90 Days Gross carrying amount $ 159,569 $ 490 Loss allowance (Lifetime ECLs) - (14) Amortized cost $ 159,569 $ 476	91 to 180 Days $ 121 (9) $ 112 91 to 180 Days $ 190 (17) $ 173	181 to 240 Days $ 29 (6) $ 23 181 to 240 Days $ 19 (2) $ 17	Over 241 Days $ 594 (594) $ - Over 241 Days $ 577 (577) $ -	Total $ 127,998 (610) $ 127,388 Total $ 160,845 (610) $ 160,235

The movements of the loss allowance of trade receivables were as follows:

Balance at January 1 Add: Net remeasurement of loss allowance Balance at December 31	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 610 - $ 610	2019 $ 594 16 $ 610

10. INVENTORIES

Raw materials Work in progress Finished goods Merchandise		December 31	December 31
		2020 $ 109,023 20,881 200,388 10,007 $ 340,299	2019 $ 124,352 15,956 167,611 12,326 $ 320,245

The cost of inventories recognized as cost of goods sold for the years ended December 31, 2020 and 2019 were as follows:

Cost of inventories sold Loss on disposal of inventories Inventory write-downs (reversed) Gain on physical inventory	For the Year Ended	For the Year Ended	December 31
		2020 $ 204,622 4,435 820 (343) $ 209,534	2019 $ 246,896 6,015 (1,602) (669) $ 250,640

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11. SUBSIDIARIES

Subsidiaries Included in the Consolidated Financial Statements

Investor Investee Nature of Activities The Company Bio-Jourdeness International Group Co., Ltd. (“Jourdeness International”) Beauty and body spa business and manufacture of cosmetics The Company Success United Limited (“Success”) Investment The Company Jourdeness Development Limited (“J Development”) Investment The Company Bio-Jourdeness Cosmetic Co. (MY) Sdn. Bhd. (“MY”) Beauty and body spa business Success Jourdeness (Guangzhou) Cosmetics Co., Ltd. (“Jourdeness (Guangzhou) Cosmetics”) Manufacture of cosmetics and beauty and body spa business J Development Jourdeness (Guangzhou) Cosmetology Enterprise Management Co., Ltd. (“Jourdeness (Guangzhou) Enterprise Management”) Consulting services of beauty and body spa business Jourdeness (Guangzhou) Enterprise Management Chengdu Jourdeness Enterprise Management Consulting Co., Ltd. (“Chengdu Enterprise Management”) Consulting services of beauty and body spa business. Jourdeness International Jourdenwell Biomed Co., Ltd. (“Jourdenwell Biomed”) Consulting services of beauty and body spa business

Proportion of Ownership (%) December 31 2020 2019 Remark 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 - 100.00 a 100.00 - b

Remarks:

• a. Considering the layout of mainland China market, the board of directors of Jourdeness (Guangzhou) Enterprise Management approved the liquidation of Chengdu Enterprise Management on July 5, 2017. In April of 2020, Chengdu Enterprise Management had completed the deregistration process.

• b. To expand the biotech and medical aesthetic market, the board of directors of Jourdeness International Management approved to establish a 100% owned subsidiary, Jourdenwell Biomed Co., Ltd., on March 6, 2020, and the total paid-up capital was NT$40,000 thousand and completed establishment registration on March 24, 2020.

12. PROPERTY, PLANT AND EQUIPMENT

Assets used by the Group Assets leased under operating leases		December 31	December 31
		2020 $ 2,113,007 144,873 $ 2,257,880	2019 $ 1,890,916 - $ 1,890,916

• 29 -

a. Assets used by the Group

Cost Balance at January 1, 2019 Additions Acquisitions through business combinations (Note 29) Disposals Reclassification Effect of foreign currency exchange differences Balance at December 31, 2019 Accumulated depreciation Balance at January 1, 2019 Depreciation expenses Acquisitions through business combinations (Note 29) Disposals Effect of foreign currency exchange differences Balance at December 31, 2019 Carrying amounts at December 31, 2019 Cost Balance at January 1, 2020 Additions Acquisitions through business combinations (Note 29) Disposals Transfers to assets leased under operating leases Reclassification Effect of foreign currency exchange differences Balance at December 31, 2020 Accumulated depreciation Balance at January 1, 2020 Depreciation expenses Acquisitions through business combinations (Note 29) Transfers to assets leased under operating leases Disposals Effect of foreign currency exchange differences Balance at December 31, 2020 Carrying amounts at December 31, 2020	Freehold Land $ 817,118 - - - - - $ 817,118 $ - - - - - $ - $ 817,118 $ 817,118 - - - - - - $ 817,118 $ - - - - - - $ - $ 817118	Buildings $ 978,865 872 - - 4,051 (13,923) $ 969,865 $ 346,246 57,051 - - (5,807) $ 397,490 $ 572,375 $ 969,865 - - (2,372 ) (94,622 ) - 5,951 $ 878,822 $ 397,490 49,126 - (12,247 ) (2,372 ) 3,005 $ 435,002 $ 443820	Machinery and Equipment $ 98,723 2,435 - (42 ) - (2,891) $ 98,225 $ 66,130 5,869 - (29 ) (2,183) $ 69,787 $ 28,438 $ 98,225 163 - (1,167 ) - 5,482 1,330 $ 104,033 $ 69,787 5,507 - - (1,067 ) 989 $ 75,216 $ 28817	Transportation Equipment $ 26,360 6,160 - (14,100 ) - (468) $ 17,952 $ 19,918 1,514 - (12,676 ) (194) $ 8,562 $ 9,390 $ 17,952 332 - (548 ) - - 161 $ 17,897 $ 8,562 2,418 - - (474 ) 105 $ 10,611 $ 7286	Office Equipment $ 209,978 18,411 597 (2,885 ) 3,705 (3,068) $ 226,738 $ 154,461 24,601 295 (2,609 ) (2,419) $ 174,329 $ 52,409 $ 226,738 8,792 302 (2,413 ) - 2,237 1,244 $ 236,900 $ 174,329 21,411 163 - (2,410 ) 1,255 $ 194,748 $ 42152	Other Equipment $ 35,657 109 - (235 ) - (1,313) $ 34,218 $ 27,580 2,416 - (66 ) (1,107) $ 28,823 $ 5,395 $ 34,218 48 - (357 ) - - 559 $ 34,468 $ 28,823 2,037 - - (309 ) 514 $ 31,065 $ 3403	Leasehold Improvements C $ 413,292 9,808 1,029 - 94,000 (12,122) $ 506,007 $ 129,510 91,317 - - (5,026) $ 215,801 $ 290,206 $ 506,007 2,134 1,783 - (34,075 ) 69,350 5,069 $ 550,268 $ 215,801 98,844 - - - 3,400 $ 318,045 $ 232223	onstruction in Progress and Machinery in Transit $ 33,251 190,369 - (2,273 ) (105,616 ) (146) $ 115,585 $ - - - - - $ - $ 115,585 $ 115,585 499,655 - - - (77,157 ) 105 $ 538,188 $ - - - - - - $ - $ 538188	Total $ 2,613,244 228,164 1,626 (19,535 ) (3,860 ) (33,931) $ 2,785,708 $ 743,845 182,768 295 (15,380 ) (16,736) $ 894,792 $ 1,890,916 $ 2,785,708 511,124 2,085 (6,857 ) (128,697 ) (88 ) 14,419 $ 3,177,694 $ 894,792 179,343 163 (12,247 ) (6,632 ) 9,268 $ 1,064,687 $ 2113007

In response to the demand of operation, the capital expenditures plan of Chiayi Dapunet factory had been proposed by the board directors in March 2018. For the year ended December 31, 2020, the plan’s contract price was $18,300,000 thousand.

No impairment assessment was performed for the years ended December 31, 2020 and 2019, as there were no indications of impairment.

The above items of property, plant and equipment are depreciated on a straight-line basis over the estimated useful lives as follows:

Buildings
Plant buildings and office	10 to 50 years
Others	5 to 10 years
Machinery and equipment	5 to 10 years
Transportation equipment	5 years
Office equipment	3 to 10 years
Other equipment	3 to 10 years
Leasehold improvements	1 to 10 years

Information about capitalized interest was set out in Note 25 (d).

Property, plant and equipment pledged as collateral for bank borrowings and performance guarantees were set out in Note 33.

• 30 -

b. Assets leased under operating leases (December 31, 2019: Nil.)

Cost Balance at January 1, 2020 Additions Transfers from assets used by the Group Balance at December 31, 2020 Accumulated depreciation and impairment Balance at January 1, 2020 Depreciation expenses Transfers from assets used by the Group Balance at December 31, 2020 Carrying amount at December 31, 2020	Buildings Equipment Leasehold Improvements $ - $ - $ - - 33,286 - 94,622 - 34,075 $ 94,622 $ 33,286 $ 34,075 $ - $ - $ - 2,449 2,144 270 12,247 - - $ 14,696 $ 2,144 $ 270 $ 79,926 $ 31,142 $ 33,805	Total $ - 33,286 128,697
		$ 161,983
		$ - 4,863 12,247
		$ 17,110
		$ 144,873

Operating leases relate to leases of equipment with lease terms for 1 year with an option to extend for another 1 year. The lessees have bargain purchase options to acquire the assets at the expiry of the lease periods. The lease contracts indicate that the lessees should make variable payments which shall be determined at a specific percentage of the respective lessee’s operating revenue.

Operating leases relate to leases of buildings and leasehold improvements with lease terms for 5 years. The lessees do not have bargain purchase options to acquire the assets at the expiry of the lease periods. The lease contracts indicate that the lessees should make the fixed lease payments.

The maturity analysis of lease payments receivable under operating lease payments was as follows:

			December 31,
			2020
Year	1		$ 11,498
Year	2		11,498
Year	3		7,646
Year	4		7,296
Year	5	onwards	6,080
			$ 44,018

No impairment assessment was performed for the year ended December 31, 2020, as there were no indications of impairment.

• 31 -

The above items of assets leased under operating leases are depreciated on a straight-line basis over the estimated useful lives as follows:

Buildings
Plant buildings and office	50 years
Others	5 to 10 years
Machinery and equipment	3 years
Leasehold improvements	10 to 12 years

Assets leased under operating leases pledged as collateral for bank borrowings and performance guarantees were set out in Note 33.

13. LEASE ARRANGEMENTS

• a. Right-of-use assets

Carrying amounts Land Buildings Transportation equipment Additions to right-of-use assets Depreciation charge for right-of-use assets Land Buildings Transportation equipment Income from the subleasing of right-of-use assets (presented in other income)		December 31	December 31	December 31
	2020 2019 $ 68,879 $ 69,622 967,500 983,968 7,215 10,545 $ 1,043,594 $ 1,064,135 For the Year Ended December 31
			2020 $ 534,825 $ 1,867 370,797 3,330 $ 375,994 $ 7,401	2019 $ 433,513 $ 1,950 395,964 1,665 $ 399,579 $ 1,601

The Group has been subleasing its leasehold office space located in Changhua, Taoyuan, Hsinchu, Kaohsiung, Chengdu and Xiamen to other Companies under operating leases. The related right-of-use assets are presented as investment properties (as set out in Notes 14 and 32). The amounts disclosed above with respect to the right-of-use assets do not include right-of-use assets that meet the definition of investment properties.

• 32 -

b. Lease liabilities

Carrying amounts Current Non-current		December 31	December 31
		2020 $ 335,821 $ 761,628	2019 $ 361,455 $ 689,962

Range of discount rate for lease liabilities was as follows:

Buildings Transportation equipment	December 31
	2020 2019 1.45%-6.25% 1.45%-6.25% 1.45% 1.45%

c. Material lease-in activities and terms

The Group leases certain land, buildings and transportation equipment for the use of offices with lease terms of 2 to 50 years. The Group does not have bargain purchase options to acquire the leasehold land and buildings at the end of the lease terms. In addition, the Group is prohibited from subleasing or transferring all or any portion of the underlying assets without the lessor’s consent.

d. Other lease information

Expenses relating to short-term leases Total cash outflow for leases	For the Year Ended	For the Year Ended	December 31
		2020 $ 7,230 $ (402,288)	2019 $ 2,300 $ (426,682)

Lease commitments (the Group as a lessee) with lease terms commencing after the balance sheet dates are as follows:

Lease commitments		December 31	December 31
		2020 $ 123,947	2019 $ 46,586

14. INVESTMENT PROPERTIES

Land Right-of-use assets		December 31	December 31
		2020 $ 116,942 69,844 $ 186,786	2019 $ 116,942 4,758 $ 121,700

• 33 -

Cost Balance at January 1, 2019 Transfers from right-of-use assets Effects of foreign currency exchange differences Balance at December 31, 2019 Accumulated depreciation Balance at January 1, 2019 Depreciation expenses Effects of foreign currency exchange differences Balance at December 31, 2019 Carrying amounts at December 31, 2019 Cost Balance at January 1, 2020 Transfers from right-of-use assets Effects of foreign currency exchange differences Balance at December 31, 2020 Accumulated depreciation Balance at January 1, 2020 Depreciation expenses Effects of foreign currency exchange differences Balance at December 31, 2020 Carrying amounts at December 31, 2020	Land Right-of-use Assets $ 116,942 $ - - 5,720 - (214) $ 116,942 $ 5,506 $ - $ - - 778 - (30) $ - $ 748 $ 116,942 $ 4,758 $ 116,942 $ 5,506 - 68,235 - 177 $ 116,942 $ 73,918 $ - $ 748 - 3,280 - 46 $ - $ 4,074 $ 116,942 $ 69,844	Total $ 116,942 5,720 (214) $ 122,448 $ - 778 (30) $ 748 $ 121,700 $ 122,448 68,235 177 $ 190,860 $ 748 3,280 46 $ 4,074 $ 186,786

The investment properties are depreciated using the straight-line method over their estimated useful lives as follows:

Right-of-use assets 2-12 years

• a. The Group’s vacant land in Taichung, including the land serial numbers of 0716-0000, 0716-0001, 0717-0000 and 0742-0000, were not for operation and lease in 2020 and 2019. There were no direct operating expenses of investment properties for the years ended in December 31, 2020 and 2019.

• b. The fair values of investment properties were $231,279 thousand and $137,888 thousand as of December 31, 2020 and 2019, respectively. The valuation was arrived at by reference to market evidence of transaction price for similar properties.

• 34 -

• c. Right-of-use assets included in investment properties are buildings located in Changhua, Taoyuan, Hsinchu, Kaohsiung, Chengdu and Xiamen and subleased under operating leases to other companies. The abovementioned investment properties were leased out for 2 to 10 years. The lessees do not have bargain purchase options to acquire the investment properties at the expiry of the lease periods.

The maturity analysis of lease payments receivable under operating leases of investment properties at December 31, 2020 was as follows:

Year 1 Year 2 Year 3 Year 4 Year 5 GOODWILL Cost Balance at January 1 Additional amounts recognized from business combinations occurring during the year (Note 29) Derecognized on disposal of a subsidiary Effect of foreign currency exchange differences Balance at December 31 Accumulated impairment losses Balance at January 1 and December 31 Carrying amounts at December 31		December 31	December 31
	2020 $ 23,721 21,769 21,156 21,156 16,902 $ 104,704 For the Year Ended		2019 $ 2,409 2,109 603 - - $ 5,121 December 31
		2020 $ 522,188 21,357 (1,406) 6,013 $ 548,152 $ - $ 548,152	2019 $ 520,514 19,814 - (18,140) $ 522,188 $ - $ 522,188

15. GOODWILL

At the end of the reporting period, the Group assessed the impairment of recoverable amount of goodwill based on value in use, which was calculated using the cash flow projections in the financial budgets and annual discount rate to reflect the relevant specific risk. No impairment loss of goodwill recognized for the years ended December 31, 2020 and 2019.

The Group obtained an independent valuation reports from external professional valuers for the years ended December 31, 2020 and 2019. According to the report, the Group had adjusted the calculated amount of original accounting treatment and provision since the acquisition date. Refer to Note 29 for detailed information.

• 35 -

16. OTHER INTANGIBLE ASSETS

Cost Balance at January 1, 2019 Additions Acquisitions through business combinations (Note 29) Disposals Effect of foreign currency exchange differences Balance at December 31, 2019 Accumulated amortization Balance at January 1, 2019 Amortization expenses Disposals Effect of foreign currency exchange differences Balance at December 31, 2019 Carrying amounts at December 31, 2019 Cost Balance at January 1, 2020 Additions Acquisitions through business combinations (Note 29) Disposals Effect of foreign currency exchange differences Balance at December 31, 2020 Accumulated amortization Balance at January 1, 2020 Amortization expenses Disposals Effect of foreign currency exchange differences Balance at December 31, 2020 Carrying amounts at December 31, 2020	Computer Software $ 31,259 1,686 - (6,878) (259) $ 25,808 $ 23,261 3,834 (6,864) (197) $ 20,034 $ 5,774 $ 25,808 3,310 - (11,092) 112 $ 18,138 $ 20,034 2,988 (11,092) 101 $ 12,031 $ 6,107	Customer Relationship $ 1,035,370 - 46,724 - (33,391) $ 1,048,703 $ 177,260 105,713 - (9,404) $ 273,569 $ 775,134 $ 1,048,703 - 43,130 - 13,932 $ 1,105,765 $ 273,569 105,548 - 5,573 $ 384,690 $ 721,075	Total $ 1,066,629 1,686 46,724 (6,878) (33,650) $ 1,074,511 $ 200,521 109,547 (6,864) (9,601) $ 293,603 $ 780,908 $ 1,074,511 3,310 43,130 (11,092) 14,044 $ 1,123,903 $ 293,603 108,536 (11,092) 5,674 $ 396,721 $ 727,182

Other intangible assets are amortized on a straight-line basis over their estimated useful lives as follows: Computer software 3 to 10 years Customer relationship 10 years

• 36 -

17. OTHER NON-CURRENT ASSETS

Refundable deposits Prepayments for equipment Net defined benefit assets (Note 22) Other		December	31
		2020 $ 75,685 127 - 11 $ 75,823	2019 $ 72,819 3,629 4,202 - $ 80,650

18. BORROWINGS

• a. Short-term borrowings

Secured borrowings Bank loans		December	31
		2020 $ 72,624	2019 $ 76,449

The Group provided its land and buildings as collateral (refer to Note 33), and key management personnel of the Group and Jourdeness International were the joint guarantor (refer to Note 32 and Table 2). The interest rate was 0.98% and 3.60% per annum as of December 31, 2020 and 2019, respectively.

• b. Long-term borrowings (December 31, 2019: Nil.)

	December 31,
	2020
Secured borrowings
Bank loans (1)	$ 322,286
Other loans (2)	32,487
	354,773
Less: Current portion of long-term borrowings	(13,808)
Long-term borrowings	$ 340,965

• 1) The Group provided its land as collateral (refer to Note 33), and key management personnel of the Group was the joint guarantor (refer to Note 32 and Table 2). The borrowing period is from June 2020 to May 2024. The interest rate was 1.215% per annum as of December 31, 2020.

• 2) Other borrowings are financing loans that the Group signed with the leasing company in August 2020 for the sale and leaseback of machinery and equipment, which there secured by the mortgage of machinery (refer to Note 33), and key management personnel of the Company and Jourdeness International were the joint guarantor (refer to Note 32 and Table 2). The borrowing period is from August 2020 to November 2023. The implied interest rate of the rent that the Group needs to pay according to the lease period is about 1.407%, and the principal and interest are repayable in monthly instalments from the date of appropriation.

• 37 -

19. BONDS PAYABLE

Secured domestic convertible bonds Less: Discounts on bonds payable Less: Current portion of bonds payable		December 31	December 31
		2020 $ 750,000 (10,367) 739,633 (739,633) $ -	2019 $ 750,000 (20,591) 729,409 - $ 729,409

First Unsecured Domestic Convertible Bonds

As of December 28, 2018, the Company issued 7,500 thousand, 0% NTD denominated unsecured convertible bonds in Taiwan, with an aggregate principal amount of $750,000 thousand.

Each bond entitles the holder to convert it into ordinary shares of the Company at a conversion price of $111. Conversion may occur at any time between March 29, 2019 and December 28, 2021. After the issuance of the convertible bonds, whenever the number of the Company’s ordinary shares increases, including but not limited to capital increase fund by cash (through public offering or private placement), by retained earnings or by capital reserves stock dividends, shares issued for consideration of merger and acquisition, stock split, and capital increase for participation in overseas ADRs other than the new shares issue upon exercise of the conversion or of the securities convertible into or entitled to subscribe ordinary shares or the new shares issue upon employee bonus, the conversion price shall be adjusted in accordance with Article 11 “Rules Governing Issue and Conversion of First Unsecured Domestic Convertible Bonds” (hereinafter referred to as the “Rules”).

In even that the Company issues any kind of securities (including privately placed securities), convertible into ordinary shares or with warrants to subscribe for ordinary shares at a conversion price or exercise price lower than the current market price per share, or issuance of the ordinary shares option which is not resulted from capital increase fund by cash, and the number of the Company’s ordinary shares is reduced due to capital reduction which is not resulted from the treasury stocks cancellation, the conversion price shall be adjusted in accordance with Article 11 “Rules Governing Issue and Conversion of First Unsecured Domestic Convertible Bonds” (hereinafter referred to as the “Rules”).

If the convertible bonds are not converted at maturity, the Company will redeem the convertible bonds at par value in cash as of December 28, 2021.

The conversion price of bonds shall be determined from the decision date to the actual date of issue. In the case of ex-dividend date, it shall be adjusted by the adjustment formula of conversion price. Since the Company applied for ex-dividend of July 26, 2020, the conversion price of bonds was adjusted to $101.5 per share in accordance with the Rules.

For the conversion of bonds from the day following three months after the date of issuance up till 40 days before the maturity date, if the closing price of the Company’s ordinary shares at the securities counter trading center exceeded the then convertible bond’s conversion price by more than or equal to 30% for 30 consecutive business days, or if the amount of Company’s outstanding circulating bonds falls below 10% of the total amount of original issuance, the Company may redeem all of the outstanding convertible bonds at par value in cash.

• 38 -

The convertible bonds shall be sold back to the base date of convertible bonds in advance on the maturity date of 2 years after the issuance. Bondholders may notify the Company in writing in accordance with the provisions of the issue and conversion measures to sell back to the Company with the par value of convertible bonds plus interest compensation.

The convertible bonds contain liability and equity components. The equity component was presented in equity under the heading of capital surplus - options. The effective interest rate of the liability component was 1.39% per annum on initial recognition.

The movements of principal debt instruments for 2020 and 2019 were as follows:

Liability component at January 1, 2019 Interest charged at an effective interest rate of 1.39% Liability component at December 31, 2019 Liability component at January 1, 2020 Interest charged at an effective interest rate of 1.39% Liability component at December 31, 2020 The movements of derivative financial instruments for 2020 and 2019 were as follows: Balance at January 1, 2019 Gain (loss) on fair value changes Balance at December 31, 2019 Balance at January 1, 2020 Gain (loss) on fair value changes Balance at December 31, 2020	$ 719,327 10,082
	$ 729,409
	$ 729,409 10,224
	$ 739,633
	$ (1,275) 1,125 $ (150) $ (150) 225 $ 75

As of December 31, 2020 and 2019, the face value of first unsecured domestic convertible bonds outstanding was both $750,000 thousand.

20. CONTRACT LIABILITIES

Advance receipts of services Advance receipts of products Customer loyalty programs		December 31	December 31
		2020 $ 1,856,501 46,174 14,517 $ 1,917,192	2019 $ 1,831,738 59,330 10,972 $ 1,902,040

• 39 -

The movements of contract liabilities were as follows:

Advance receipts of services Balance at January 1 Acquisitions through business combinations (Note 29) Additions Transferred to revenue Effect of foreign currency exchange differences Balance at December 31 Advance receipts of products Customer loyalty programs Balance at December 31, 2020 and 2019	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 1,831,738 79,396 1,071,635 (1,131,023) 4,755 1,856,501 46,174 14,517 $ 1,917,192	2019 $ 2,247,520 74,625 1,073,702 (1,595,568) 31,459 1,831,738 59,330 10,972 $ 1,902,040

The contract liabilities were the performance obligation of delivering the goods or services to the customers.

On the balance sheet date, subsidiary Jourdeness International’s revenue recognition was based on historical service experience and the percentage of expected redemption rate of deferred courses, the percentage was calculated as the number of courses actually rendered to customers relative to the number of courses expected to be rendered to customers, excluding the courses that had incurred refund liability during the effective period within one year.

The key assumptions of expected aggregate redemption rate of deferred courses used in actuarial analyses were as follows:

The aging of courses 0-1 years 1-2 years 2-3 years 3-4 years 4-5 years 5-6 years 6-7 years 7-8 years 8-9 years 9-10 years Over 10 years	For the Year Ended December 31
	2020 2019 100.00% 100.00% 65.12% 63.98% 57.20% 55.95% 48.67% 47.36% 39.83% 38.50% 30.99% 29.72% 22.54% 21.40% 14.87% 13.92% 8.35% 7.67% 3.31% 2.95% 0.00% 0.00%

On the balance sheet date, subsidiary Jourdeness (Guangzhou) Enterprise Management’s revenue recognition was based on historical service experience and the percentage of expected redemption rate of deferred courses, the percentage was calculated as the number of courses actually rendered to customers relative to the number of courses expected to be rendered to customers.

• 40 -

The key assumptions of expected aggregate redemption rate of deferred courses used in actuarial analyses were as follows:

The aging of courses 0-1 years 1-2 years 2-3 years 3-4 years 4-5 years 5-6 years 6-7 years 7-8 years 8-9 years 9-10 years	For the Year Ended December 31
	2020 2019 71.72% 71.75% 62.11% 61.48% 52.36% 51.18% 42.95% 41.39% 34.19% 32.47% 26.27% 24.59% 19.28% 17.78% 13.22% 12.02% 8.04% 7.21% 3.66% 3.25%

On the balance sheet date, subsidiary Jourdeness (Guangzhou) Cosmetics revenue recognitions were based on historical service experience and the percentage of expected redemption rate of deferred courses, the percentage was calculated as the number of courses actually rendered to customers relative to the number of courses expected to be rendered to customers, excluding the courses that had incurred refund liability during the effective period within half a year.

The key assumptions of expected aggregate redemption rate of deferred courses used in actuarial analyses were as follows:

The aging of courses 0-0.5 years 0.5-2 years Over 2 years	For the Year Ended December 31
	2020 2019 100.00% 100.00% 44.47% 44.19% 0.00% 0.00%

On the balance sheet date, subsidiary MY’s revenue recognitions were based on historical service experience and the percentage of expected redemption rate of deferred courses, the percentage was calculated as the number of courses actually rendered to customers relative to the number of courses expected to be rendered to customers.

The key assumptions of expected aggregate redemption rate of deferred courses used in actuarial analyses were as follows:

The aging of courses 0-1 years 1-2 years Over 2 years	For the Year Ended December 31
	2020 2019 50.19% 51.60% 50.19% 51.60% 0.00% 0.00%

• 41 -

21. OTHER PAYABLES

Payables for salaries Payables for social security fund and housing provident fund Payables for purchase of equipment Payables for employee’s compensation Payables for levies Payables for employees’ benefits Payables for acquisition of beauty salons Others		December 31	December 31
		2020 $ 141,567 38,160 31,202 15,608 13,450 5,527 - 56,880 $ 302,394	2019 $ 166,500 26,382 8,146 10,367 18,095 5,254 3,658 65,225 $ 303,627

The Group’s subsidiaries in mainland China were required to pay the social security expenses and housing provident fund with a fixed percentage of total monthly salaries and wages in accordance with the “Social Insurance Law of the People’s Republic of China”. In addition, those subsidiaries had accrued the social security expenses and the housing provident fund based on actual monthly salaries and wages on the balance sheets date.

22. RETIREMENT BENEFIT PLANS

a. Defined contribution plans

The subsidiary, Jourdeness International, adopted a pension plan under the Labor Pension Act (LPA), which is a state-managed defined contribution plan. Under the LPA, an entity makes monthly contributions to employees’ individual pension accounts at 6% of monthly salaries and wages.

The employees of the Group’s subsidiaries in mainland China are members of a state-managed retirement benefit plan operated by the government of mainland China. The subsidiaries were required to contribute 20%-24% of monthly salaries per person to the retirement benefit scheme for the years ended December 31, 2020 and 2019, of which the subsidiaries were responsible for 12%-16% contributions.

b. Defined benefit plans

The defined benefit plans adopted by the subsidiary, Jourdeness International, in accordance with the Labor Standards Law is operated by the government of the Republic of China (ROC). Pension benefits are calculated on the basis of the length of service and average monthly salaries of six months before retirement. The subsidiary contributes amounts equal to 2% of total monthly salaries and wages to a pension fund administered by the pension fund monitoring committee. Pension contributions are deposited in the Bank of Taiwan in the committee’s name. Before the end of each year, the subsidiary assesses the balance in the pension fund. If the amount of the balance in the pension fund is inadequate to pay retirement benefits for employees who conform to retirement requirements in the next year, the subsidiary is required to fund the difference in one appropriation that should be made before the end of March of the next year. The pension fund is managed by the Bureau of Labor Funds, Ministry of Labor (the “Bureau”); the subsidiary has no right to influence the investment policy and strategy.

• 42 -

The amounts included in the consolidated balance sheets in respect of the Group’s defined benefit plans were as follows:

Present value of defined benefit obligation Fair value of plan assets Net defined benefit liabilities (assets) Movements in net defined benefit liabilities (assets) were as follows:		December	31
		2020 $ 66,984 (63,846) $ 3,138	2019 $ 56,012 (60,214) $ (4,202)

	Present Value		Net	Defined
	of the Defined		Benefit
	Benefit	Fair Value of	Liabilities
	Obligation	the Plan Assets	(Assets)
Balance at January 1, 2019	$ 56,572	$ (56,564)	$	8
Service cost
Current service cost	171	-		171
Net interest expense (income)	563	(570)		(7)
Recognized in profit or loss	734	(570)		164
Remeasurement
Return on plan assets (excluding amounts
included in net interest)	-	(1,977)		(1,977)
Actuarial loss - changes in demographic
assumptions	436	-		436
Actuarial loss - changes in financial
assumptions	1,915	-		1,915
Actuarial gain - experience adjustments	(3,483)	-		(3,483)
Recognized in other comprehensive income	(1,132)	(1,977)		(3,109)
Contributions from the employer	-	(1,265)		(1,265)
Benefits paid	(162)	162		-
Balance at December 31, 2019	$ 56,012	$ (60,214)	$	(4,202)
Balance at January 1, 2020	$ 56,012	$ (60,214)	$	(4,202)
Service cost
Current service cost	174	-		174
Net interest expense (income)	419	(455)		(36)
Recognized in profit or loss	593	(455)		138
Remeasurement
Return on plan assets (excluding amounts
included in net interest)	-	(1,963)		(1,963)
Actuarial loss - changes in demographic
assumptions	324	-		324
Actuarial loss - changes in financial
assumptions	11,064	-		11,064
Actuarial gain - experience adjustments	(1,009)	-		(1,009)
Recognized in other comprehensive income	10,379	(1,963)		8,416
Contributions from the employer	-	(1,214)		(1,214)
Balance at December 31, 2020	$ 66,984	$ (63,846)	$	3,138

• 43 -

Through the defined benefit plans under the Labor Standards Law, the Group is exposed to the following risks:

• 1) Investment risk: The plan assets are invested in domestic or foreign equity and debt securities, bank deposits, etc. The investment is conducted at the discretion of the Bureau or under the mandated management. However, in accordance with relevant regulations, the return generated by plan assets should not be below the interest rate of a 2-year time deposit with local banks.

• 2) Interest risk: A decrease in government and corporate bond interest rates will increase the present value of the defined benefit obligation; however, this will be partially offset by an increase in the return on the plans’ debt investments.

• 3) Salary risk: The present value of the defined benefit obligation is calculated with reference to the future salaries of plan participants. As such, an increase in the salaries of the plan participants will increase the present value of the defined benefit obligation.

The actuarial valuations of the present value of the defined benefit obligation were carried out by qualified actuaries. The significant assumptions used for the purposes of the actuarial valuations were as follows:

Discount rates Expected rates of salary increase	December 31
	2020 2019 0.40% 0.75% 3.00% 2.00%

If possible reasonable changes in each of the significant actuarial assumptions were to occur and all other assumptions were to remain constant, the present value of the defined benefit obligation would increase (decrease) as follows:

Discount rates 0.25% increase 0.25% decrease Expected rates of salary increase 0.25% increase 0.25% decrease		December	31
		2020 $ (2,291) $ 2,399 $ 2,331 $ (2,240)	2019 $ (1,934) $ 2,026 $ 1,995 $ (1,915)

The sensitivity analysis presented above may not be representative of the actual changes in the present value of the defined benefit obligation as it is unlikely that changes in the assumptions would occur in isolation of one another as some of the assumptions may be correlated.

Expected contributions to the plans for the next year Average duration of the defined benefit obligation		December	31
		2020 $ 1,274 14 years	2019 $ 1,295 14 years

• 44 -

23. EQUITY

a. Ordinary shares

Number of shares authorized (in thousands) Shares authorized Number of shares issued and fully paid (in thousands) Shares issued		December 31	December 31
		2020 100,000 $ 1,000,000 60,915 $ 609,147	2019 100,000 $ 1,000,000 60,915 $ 609,147

The holders of issued ordinary shares with a par value of $10 are entitled the right to vote and receive dividends.

• b. Capital surplus

May be used to offset a deficit, distributed as cash dividends, or transferred to share capital* Issuance of ordinary shares May be used to offset a deficit only Issuance of ordinary shares for cash which is reserved for employees Other May not be used for any purpose Employee restricted shares Employee share options		December 31	December 31
		2020 $ 441,993 945 6,303 180,251 25,363 $ 654,855	2019 $ 441,993 945 5,879 180,251 25,363 $ 654,431

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

c. Retained earnings and dividends policy

The shareholders of the Company held their regular meeting on June 25, 2019 and in that meeting, resolved the amendments to the Company’s Articles of Incorporation (the “Articles”). Under the dividends policy as set forth in the amended Articles, as the Company continues to grow and undertakes capital expenditure projects and business expansion, and for a sound financial planning of sustainable development, the Company may distribute dividends to shareholders in the form of cash and/or bonus shares. Shares may be distributed in lieu of the cash amount of any dividend according to the Company’s future expenditure budgets and funding needs. The issue of bonus shares is subject to the resolution of shareholders in their meeting for review and approval. The payment of cash dividend is subject to the resolution of the board of directors in their meeting for review and approval.

• 45 -

Unless otherwise provided in the Applicable Listing Rules, the net profit of the Company for each annual financial year shall be allocated in the following order and proposed by the board of directors to the shareholders in the general meeting for approval:

• 1) To make provision of the applicable amount of income tax pursuant to applicable tax laws and regulations;

• 2) To set off accumulated losses of previous years (if any);

• 3) To set aside ten percent (10%) as legal reserve pursuant to the Applicable listing rules unless the accumulated amount of such legal reserve equals to the total paid-up capital of the Company;

• 4) To set aside an amount as special reserve pursuant to the Applicable Listing Rules and requirements of the commission; and;

• 5) With respect to the earnings available for distribution (i.e., the net profit after the deduction of the items (1) to (4) above plus any previously undistributed cumulative retained earnings), the board of directors may present a proposal to distribute to the shareholders by way of dividends at the annual general meeting for approval pursuant to the Applicable Listing Rules. Dividends may be distributed in the form of cash dividends and/or bonus shares, the Group authorized the distribution of whole or a part of the distributable dividends and bonuses may be paid in cash at a meeting of the board of directors attended by two-thirds of the total number of directors; and in addition thereto a report of such distribution shall be submitted to the shareholders’ meeting. According to Cayman Islands laws, the amount of dividends shall be at least ten percent (10%) of net profit after the deduction of items (1) to (4) above. Cash dividends shall comprise a minimum of ten percent (10%) and a maximum of one hundred percent (100%) of the total dividends allocated to shareholders.

Under the dividends policy as set forth in the Articles before the amendments, unless otherwise provided in the Applicable Listing Rules, the net profits of the Company for each annual financial year shall be allocated in the following order and proposed by the board of directors to the shareholders in the general meeting for approval:

• 1) To make provision of the applicable amount of income tax pursuant to applicable tax laws and regulations;

• 2) To set off accumulated losses of previous years (if any);

• 3) To set aside ten percent (10%) as legal reserve pursuant to the Applicable listing rules unless the accumulated amount of such legal reserve equals to the total paid-up capital of the Company;

• 4) To set aside an amount as special reserve pursuant to the Applicable Listing Rules and requirements of the commission; and;

• 5) With respect to the earnings available for distribution (i.e., the net profit after the deduction of the items (1) to (4) above plus any previously undistributed cumulative retained earnings), the board of directors may present a proposal to distribute to the shareholders by way of dividends at the annual general meeting for approval pursuant to the Applicable Listing Rules. Dividends may be distributed in the form of cash dividends and/or bonus shares, and, subject to Cayman Islands law, the amount of dividends shall be at least ten percent (10%) of the net profit after the deduction of the items (1) to (4) above. Cash dividends shall comprise a minimum of ten percent (10%) and a maximum of one hundred percent (100%) of the total dividends allocated to shareholders.

For the policies on the distribution of employees’ compensation and remuneration of directors after the amendment, refer to employees’ compensation and remuneration of directors in Note 25(g).

• 46 -

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

Items referred to under Rule No. 1010012865 issued by the FSC should be appropriated to or reversed from a special reserve by the Company.

The appropriations of earnings for 2019 and 2018 were approved in the shareholders’ meetings on June 18, 2020 and June 25, 2019, respectively, were as follows:

Legal reserve Special reserve Cash dividends Cash dividends per share (NT$)	Appropriation of Earnings	Appropriation of Earnings	Appropriation of Earnings
	For the Year Ended		December 31
		2019 $ 47,047 $ 66,329 $ 243,659 $ 4.0	2018 $ 52,752 $ 29,153 $ 274,499 $ 4.5

The appropriation of earnings for 2020 had been proposed by the Company’s board of directors on March 24, 2021. The appropriation and dividends per share were as follows:

	For the Year	For the Year
		Ended
	December 31,
		2020
Legal reserve	$	25,773
Cash dividends	$	182,744
Cash dividends per share (NT$)	$	3.0

• d. Other equity items

Unearned employee benefit

In the meeting of shareholders, the shareholders approved a restricted share plan for employees (refer to Note 28).

Balance at January 1 Cancelation of shares Share-based payment expenses recognized Balance at December 31	For the Year Ended	For the Year Ended	December 31
		2020 $ (111,757) - 25,094 $ (86,663)	2019 $ (144,973) 7,115 26,101 $ (111,757)

• 47 -

24. NET REVENUE

a. Disaggregation of revenue

Type of goods or services Sale of goods Rendering of beauty and body spa course services Consulting service revenue Rendering of supporting services Royalty revenue Others	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 1,409,399 1,136,782 178,608 5,985 632 23 $ 2,731,429	2019 $ 1,567,244 1,596,852 82,624 843 4,695 7 $ 3,252,265

Refer to Note 4 for information about contract from customer.

b. Contract balances

The changes in the contract liabilities balances primarily result from the timing difference between the satisfaction of performance obligation and the customer’s payment (refer to Note 20).

25. NET PROFIT FROM CONTINUING OPERATIONS

• a. Interest income

Bank deposits Financial assets at FVTPL Financial assets at amortized cost Other	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 2,243 1,834 3,367 944 $ 8,388	2019 $ 6,365 550 8,797 1,463 $ 17,175

b. Other income

Rental income (Note 13) Government grant income Others	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 16,425 1,112 15,199 $ 32,736	2019 $ 11,604 1,094 1,557 $ 14,255

• 48 -

c. Other gains and losses

Net foreign exchange gains (losses) Gain on valuation of financial assets/liabilities at FVTPL Loss on disposal of property, plant and equipment Others	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ (21) 234 (135) (8,258) $ (8,180)	2019 $ 3,914 1,148 (521) (11,400) $ (6,859)

d. Finance costs

Interest on obligations under finance leases Interest on convertible bonds Interest on bank loans Other interest expenses Less: Amounts of interest capitalization (included in property under construction) The related information was as follows:	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 41,025 10,224 2,687 90 (1,286) $ 52,740	2019 $ 49,088 10,082 6,539 18 - $ 65,727

Amounts of interest capitalization Rate of interest capitalization e. Depreciation and amortization Property, plant and equipment Right-of-use assets Investment properties Intangible assets An analysis of depreciation by function Operating costs Operating expenses	For the Year Ended	For the Year Ended	December 31
	2020 $ 1,286 1.215% For the Year Ended		2019 $ - - December 31
		2020 $ 184,206 375,994 3,280 108,536 $ 672,016 $ 10,949 552,531 $ 563,480	2019 $ 182,768 399,579 778 109,547 $ 692,672 $ 10,095 573,030 $ 583,125 (Continued)

• 49 -

An analysis of amortization by function Operating costs Selling and marketing expenses General and administrative expenses	For the Year Ended	For the Year Ended	December 31
		2020 $ 22 105,548 2,966 $ 108,536	2019 $ 263 105,602 3,682 $ 109,547 (Concluded)

f. Employee benefits expense

Post-employment benefits (Note 22) Defined contribution plans Defined benefit plans Share-based payments (Note 28) Equity-settled Other employee benefits Total employee benefits expense An analysis of employee benefits expense by function Operating costs Operating expenses	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 31,685 138 31,823 25,094 1,129,503 $ 1,186,420 $ 435,859 750,561 $ 1,186,420	2019 $ 54,792 164 54,956 26,101 1,215,500 $ 1,296,557 $ 492,570 803,987 $ 1,296,557

g. Employees’ compensation and remuneration of directors

According to the Articles of Incorporation of the Company, the Company accrues employees’ compensation at rates of no less than 1% and no higher than 5% of net profit before income tax, and accrued remuneration of directors at rates of no higher than 3% of net profit before income tax. The employees’ compensation and the remuneration of directors for the years ended December 31, 2020 and 2019, which were approved by the Company’s board of directors on March 24, 2021 and March 26, 2020, respectively, were as follows:

Accrual rate

Employees’ compensation Remuneration of directors Amount	For the Year Ended December 31
	2020 2019 1% 1% - -

Employees’ compensation Remuneration of directors	For the Year Ended December 31
	2020 2019 $ 3,148 $ 5,104 - -

• 50 -

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

The compensation of employees for the year ended December 31, 2019 has not been paid.

Information on the employees’ compensation and remuneration of directors resolved by the Company’s board of directors is available at the Market Observation Post System website of the Taiwan Stock Exchange.

26. INCOME TAXES RELATING TO CONTINUING OPERATIONS

a. Major components of income tax expense recognized in profit or loss are as follows:

Current tax In respect of the current year Income tax on unappropriated earnings Adjustments for prior years Deferred tax In respect of the current year Adjustments for prior years Income tax expense recognized in profit or loss	For the Year Ended	For the Year Ended	December 31
		2020 $ 94,506 5,520 (741) 99,285 22,220 (2,111) (20,109) $ 119,394	2019 $ 246,086 2,818 33,199 282,103 (64,185) (37,500) (101,685) $ 180,418

A reconciliation of accounting profit and income tax expense was as follows:

Profit before tax from continuing operations Income tax expense calculated at the statutory rate Nondeductible expense in determining taxable income Income tax on unappropriated earnings Income tax expense of earnings repatriation of subsidiaries Adjustments for prior years’ tax Others Income tax expense recognized in profit or loss	For the Year Ended	For the Year Ended	December 31
		2020 $ 377,119 $ 93,342 189 5,520 22,428 (2,852) 767 $ 119,394	2019 $ 650,884 $ 165,664 365 2,818 19,562 (4,301) (3,690) $ 180,418

In July 2019, the president of the ROC announced the amendments to the Statute for Industrial Innovation, which stipulate that the amounts of unappropriated earnings in 2018 and thereafter that are reinvested in the construction or purchase of certain assets or technologies are allowed as deduction when computing the income tax on unappropriated earnings. When calculating the tax on unappropriated earnings, the Group only deducts the amount of the unappropriated earnings that has been reinvested in capital expenditure.

• 51 -

b. Income tax recognized in other comprehensive income

c.	Deferred tax In respect of the current year Remeasurement on defined benefit plans Current tax assets and liabilities	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
			2020 $ (1,683)	2019 $ (621)

Current tax liabilities Income tax payable		December 31	December 31
		2020 $ 64,096	2019 $ 236,540

d. Deferred tax assets and liabilities

The movements of deferred tax assets and deferred tax liabilities were as follows:

For the year ended December 31, 2020

Deferred tax assets Temporary differences Write-down of inventory Deferred revenue Defined benefit obligations Payables for annual leave Payables for employees’ benefits Unrealized exchange losses Right-of-use assets Others Tax losses Deferred tax liabilities Temporary differences Deferred revenue Defined benefit obligations Amortization of prepayments for leases Property, Plant and Equipment Others	Opening Balance Recognized in Profit or Loss Recognized in Other Comprehensive Income f P $ 1,803 $ 243 $ - 16,253 234 - - 59 568 4,869 (22) - 1,315 45 - 1,056 2,608 - 12,788 (3,401) - 148 (148) - 38,232 (382) 568 34,863 (454) - $ 73,095 $ (836) $ 568 $ (109,184 ) $ (18,514) $ - (840 ) (275) 1,115 (4,607 ) (497) - (421 ) 8 - (5) 5 - $ (115,057) $ (19,273) $ 1,115	Reclassified rom Equity to rofit or Loss $ - - - - - - - - - - $ - $ (171,520 ) - - - - $ (171,520)	Exchange Differences Closing Balance $ 25 $ 2,071 (258 ) 16,229 - 627 - 4,847 23 1,383 - 3,664 140 9,527 - - (70 ) 38,348 - 34,409 $ (70) $ 72,757 $ (6,055 ) $ (305,273) - - (88 ) (5,192) 15 (398) - - $ (6,128) $ (310,863)

• 52 -

For the year ended December 31, 2019

Deferred tax assets Temporary differences Write-down of inventory Deferred revenue Defined benefit obligations Payables for annual leave Payables for employees’ benefits Unrealized exchange losses Right-of-use assets Others Tax losses Deferred tax liabilities Temporary differences Deferred revenue Defined benefit obligations Amortization of prepayments for leases Property, Plant and Equipment Others	Opening Balance Recognized in Profit or Loss Recognized in Other Comprehensive Income Exchange Differences $ 2,168 $ (327) $ - $ (38 ) 22,369 (5,831) - (285 ) 1 (1) - - 5,367 (498) - - 5,586 (4,220) - (51 ) 216 840 - - - 13,284 - (496 ) - 148 - - 35,707 3,395 - (870 ) - 34,863 - - $ 35,707 $ 38,258 $ - $ (870) $ (177,747) $ 64,413 $ - $ 4,150 - (219) (621) - (4,266) (520) - 179 (185) (242) - 6 - (5) - - $ (182,198) $ 63,427 $ (621) $ 4,335	Closing Balance $ 1,803 16,253 - 4,869 1,315 1,056 12,788 148 38,232 34,863 $ 73,095 $ (109,184) (840) (4,607) (421) (5) $ (115,057)

e. Income tax assessments

The income tax returns of the Company and Jourdenss International through 2018 have been assessed by the tax authorities. The Company’s subsidiary, Jourdeness International, disagreed with the tax authorities’ assessment of its 2018 tax returns and applied for a re-examination. Nevertheless, to be conservative, Jourdeness International provided its income tax for assessment by the tax authorities.

27. EARNINGS PER SHARE

Unit: NT$ Per Share

Basic earnings per share Diluted earnings per share	For	the Year Ended December 31	the Year Ended December 31
		2020 $ 4.41 $ 3.98	2019 $ 8.05 $ 7.15

• 53 -

The earnings and weighted average number of ordinary shares outstanding in the computation of earnings per share were as follows:

Net Profit for the Year

Profit for the period Effect of potentially dilutive ordinary shares Interest on convertible bonds Net gain on financial asset/liability at FVTPL Earnings used in the computation of diluted earnings per share	For the Year Ended	For the Year Ended	December 31
		2020 $ 257,725 10,224 (225) $ 267,724	2019 $ 470,466 10,082 (1,125) $ 479,423

The weighted average number of ordinary shares outstanding (in thousands of shares) is as follows:

Weighted average number of ordinary shares used in computation of basic earnings per share Effect of potentially dilutive ordinary shares: Convertible bonds Employees’ compensation Employees’ restricted shares Weighted average number of ordinary shares used in the computation of diluted earnings per share	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 58,470 7,389 51 1,407 67,317	2019 58,470 7,029 51 1,519 67,069

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

28. SHARE-BASED PAYMENT ARRANGEMENTS

Employee Restricted Shares

In the shareholder’s meeting on June 23, 2016, the shareholders approved a restricted share plan for employees with 2,900 thousand shares. On August 2, 2016, the above transaction was approved by the FSC. The Company issued 2,645 thousand and 110 thousand of the restricted shares on August 30, 2016 and December 28, 2016, respectively. The restrictions on the rights of employees who acquire the restricted shares but have not met the vesting conditions are as follows:

• a. The employees cannot sell, pledge, transfer, donate or, in any other way, dispose of these shares.

• b. The rights of attendance, proposal, speech and voting in shareholders meetings shall all be executed based on trust contracts signed by employees.

• c. During the vesting period, the Company agrees that the restricted employee shares can still receive shares and dividends regardless of whether the employees have achieved the vested conditions.

• 54 -

If an employee fails to meet the vesting conditions, the Company will recall and cancel the restricted shares without compensation.

The related information was as follows:

Employee Restricted Shares Balance at January 1 Options forfeited Balance at December 31	For the Year Ended December 31	For the Year Ended December 31
	2020 Number of Shares (In Thousands of Shares) 2,445 - 2,445	2019
		Number of Shares (In Thousands of Shares) 2,530 (85) 2,445

Information about outstanding employee restricted shares as of December 31, 2020 was as follows:

		Number of
		Shares
	Grant-date Fair	(In Thousands	Vesting Period
Grant-date	Value (NT$)	of Shares)	(Years)
August 18, 2016	$83.70	2,335	1-10
December 26, 2016	84.20	110	1-10

The calculation of employee restricted shares’ fair value was based on the closing price of the ordinary shares at the grant date.

Compensation costs of share-based payments arrangement recognized were $25,094 thousand and $26,101 thousand for the years ended December 31, 2020 and 2019, respectively.

29. BUSINESS COMBINATIONS

• a. Acquisition of assets and operations

For the year ended December 31, 2020

				Proportion of
				Voting Equity
				Interests	Consideration
		Principal Activity	Date of Acquisition	Acquired (%)	Transferred
10	beauty salons	Consulting services of	March 2020 to	100	$	640
	in mainland	beauty and body spa	December 2020
	China	business

• 55 -

For the year ended December 31, 2019

				Proportion of
				Voting Equity
				Interests	Consideration
		Principal Activity	Date of Acquisition	Acquired (%)	Transferred
11	beauty salons	Consulting services of	February 2019 to	100	$	2,233
	in mainland	beauty and body spa	December 2019
	China	business

In order to expand the Group’s operation and increase various aspects of beauty and body spa services, Jourdeness (Guangzhou) Cosmetics and Jourdeness International acquired 10 and 11 beauty salons in China in 2020 and 2019, respectively.

• b. Assets acquired and liabilities assumed at the date of acquisition

China

Current assets Inventories Non-current assets Property, plant and equipment (Note 12) Other intangible assets (Note 16) Other non-current assets Current liabilities Contract liabilities (Note 20)	Beauty Salons	Beauty Salons	Beauty Salons
	For the Year Ended December 31
		2020 $ 12,426 1,922 43,130 1,201 (79,396) $ (20,717)	2019 $ 6,538 1,331 46,724 2,451 (74,625) $ (17,581)

• c. Goodwill recognized on acquisition

Consideration transferred Plus: Fair value of identifiable net liabilities acquired Goodwill recognized on acquisition	Beauty Salons	Beauty Salons	Beauty Salons
	For the Year Ended December 31
		2020 $ 640 20,717 $ 21,357	2019 $ 2,233 17,581 $ 19,814

The goodwill recognized in the acquisitions of 10 and 11 beauty salons in 2020 and 2019 mainly represents the acquisition premium, consisting of customer relationship and net liabilities due from advance receipts included in the cost of the combinations. Acquisition premium included amounts attributed to the benefits of expected synergies, revenue growth, future market development and the assembled workforces. Except for the recognition of customer relationship as other intangible assets, these benefits are not recognized separately from goodwill because they do not meet the recognition criteria for identifiable intangible assets.

• 56 -

d. Impact of acquisitions on the results of the Group

The results of the acquirees since the acquisition date included in the consolidated statements of comprehensive income were as follows:

Revenue Profit	Beauty Salons	Beauty Salons	Beauty Salons
	For the Year Ended December 31
		2020 $ 33,400 $ 1,856	2019 $ 50,773 $ 531

Had these business combinations been in effect at the beginning of the annual reporting period, the Group’s revenue from continuing operations would have been $31,581 thousand and $30,991 thousand for the years ended December 31, 2020 and 2019, respectively; the profit from continuing operations would have been $2,692 thousand and $8,610 thousand for the years ended December 31, 2020 and 2019, respectively. This pro-forma information is for illustrative purposes only and is not necessarily an indication of the revenue and results of operations of the Group that actually would have been achieved had the acquisition been completed on January 1, 2020 and 2019, nor is it intended to be a projection of future results.

In determining the pro-forma revenue and profit of the Group had beauty salons been acquired at the beginning of the current reporting period, the management calculated net assets acquired on the basis of the fair values at the initial accounting for the business combination rather than the carrying amounts recognized in the respective pre-acquisition financial statements.

30. CAPITAL MANAGEMENT

In order to set out the appropriate capital structure, the Group manages its capital based on the industry scale, the growth of market and the development of products for determining an appropriate market share, and considers the working capital, business benefits and cash flow generated from the competitive products.

31. FINANCIAL INSTRUMENTS

• a. Fair value of financial instruments not measured at fair value

December 31, 2020

Financial liabilities Financial liabilities at amortized cost Convertible bonds	Carrying Amount $ 739,633			Fair Value	Fair Value
			Level 1 $ -	Level 2 $ -	Level 3 $ 738,200	Total $ 738,200

• 57 -

December 31, 2019

Financial liabilities Financial liabilities at amortized cost Convertible bonds	Carrying Amount $ 729,409			Fair Value	Fair Value
			Level 1 $ -	Level 2 $ -	Level 3 $ 729,771	Total $ 729,771

When the Group estimated the fair value of the liabilities component of convertible bonds, it assumed that the convertible bonds would be redeemed on December 28, 2021, and the risk-adjusted discount rates of 1.0393% and 1.1072% as of December 31, 2020 and 2019 were assessed by the borrowing interest rate of similar corporation, respectively.

Except as stated above, the management of the Group believes the carrying amounts of financial assets and financial liabilities recognized in the consolidated financial statements approximate their fair values or their fair values cannot be reliably measured.

• b. Fair value of financial instruments measured at fair value on a recurring basis

• 1) Fair value hierarchy

December 31, 2020 Financial liabilities at FVTPL Derivatives December 31, 2019 Financial assets at FVTPL Financial bonds Financial liabilities at FVTPL Derivatives	Level 1 $ - Level 1 $ 3,045 $ -	Level 2 $ - Level 2 $ - $ -	Level 3 $ 75 Level 3 $ - $ 150	Total $ 75
				Total $ 3,045
				$ 150

• 2) Reconciliation of Level 3 fair value measurements of financial instruments

2020

Financial assets Balance at January 1 Recognized in profit or loss (including in other gains and losses) Balance at December 31	Financial Assets at FVTPL
	Derivatives Debt Instruments $ - $ - 75 - $ 75 $ -

• 58 -

Financial liabilities Balance at January 1 Recognized in profit or loss (including in other gains and losses) Balance at December 31 2019	Financial Liabilities at FVTPL
	Derivatives Debt Instruments $ (150) $ - 150 - $ - $ -

Financial liabilities Balance at January 1 Recognized in profit or loss (valuation at FVTPL) Additions Repayments Balance at December 31	Financial Liabilities at FVTPL
	Derivatives Debt Instruments $ (1,275) $ - 1,125 - - 113,075 - (113,075) $ (150) $ -

• 3) Valuation techniques and inputs applied for Level 3 fair value measurement

The fair values of the host liability instrument and the conversion option derivative instrument, consisting of put option and redemption option of convertible bonds, were estimated using the Binomial Convertible Bonds Pricing Model. The significant parameters used in the evaluation model were as follows:

Volatility Risk-free rate of interest Risk discount rate Liquidity risk	December 31
	2020 2019 42.18% 30.94% 0.0571% 0.4833% 1.0393% 1.1072% 5.99% 4.10%

• c. Categories of financial instruments

Financial assets Financial assets at FVTPL Financial assets at amortized cost (1) Financial liabilities Financial liabilities at FVTPL Financial liabilities at amortized cost (2)	December 31
	2020 2019 $ 75 $ 3,045 1,817,499 1,656,882 - 150 1,319,076 950,457

• 59 -

• 1) The balances include financial assets measured at amortized cost, which comprise cash and cash equivalents, trade receivables (including related parties), other receivables (including related parties) and refundable deposits.

• 2) The balances include financial liabilities at amortized cost, which comprise short-term loans, notes payable, trade payables (including related parties), other payables (including related parties), guarantee deposits, bonds payable and long-term loans.

• d. Financial risk management objectives and policies

The operations of the Group are affected by several financial risks, the risks include market risk (including foreign currency risk and interest rate risk), credit risk and liquidity risk. The Group’s overall risk management policy is focused on unpredictable events in the financial markets and seeks to reduce the potentially adverse effects on the Group’s financial position and financial performance.

The risk management work is carried out by the financial management function of the Group in accordance with the policies approved by the board of directors. The Group’s financial management function is responsible for identifying, assessing and evading financial risks by working closely with the Group’s operation management function.

1) Market risk

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

• a) Foreign currency risk

The Group is a multinational corporation, which exposed it to the financial risks of changes in foreign currency exchange rates (the main currencies are U.S. dollars and RMB). The relevant foreign currency risk arises from future commercial transactions, financial assets and liabilities denominated in foreign currencies, and net investments in the foreign operation institutions.

The Group holds investments from a number of foreign operating institutions resulting in foreign currency risk on net assets.

The Group’s operations are transacted in several non-functional currencies (the functional currencies of the Company and subsidiaries include the NTD, RMB and MYR); therefore, the Group is affected by the volatility of exchange rates. The carrying amounts of the Group’s foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period are set out in Note 35.

Sensitivity analysis

The Group’s sensitivity analysis mainly focuses on the foreign currency risk of U.S. dollars at the end of the reporting period. Assuming a 3% strengthening/weakening of the functional currency against U.S. dollars, the net income before tax for the year ended December 31, 2020 would have decreased/increased by $2,598 thousand; the net income before tax for the year ended December 31, 2019 would have increased/decreased by $310 thousand.

In management’s opinion, sensitivity analysis was unrepresentative of the inherent foreign exchange risk because the exposure at the end of the reporting period did not reflect the exposure during the period.

• 60 -

b) Interest rate risk

The Group was exposed to fair value and cash flow interest rate risk because the Group held both fixed and floating interest rate financial assets and financial liabilities. The management monitors fluctuations in market interest rate regularly. If it is needed, the management will perform necessary procedures to control significant interest rate risks from fluctuations in market interest rates.

The carrying amounts of the Group’s financial assets and financial liabilities with exposure to interest rates at the end of the reporting period were as follows:

Fair value interest rate risk Financial assets Financial liabilities Cash flow interest rate risk Financial assets Financial liabilities Sensitivity analysis	December 31
	2020 2019 $ 33,000 $ 373,634 1,869,569 1,735,827 1,471,032 986,533 394,910 76,449

The Group’s sensitivity analysis is based on the floating interest rates financial assets and financial liabilities at the end of the reporting period. If interest rates had been 0.5% higher/lower and all other variables were held constant, the net income before tax for the years ended December 31, 2020 and 2019 would have increased/decreased by $5,381 thousand and $4,550 thousand, respectively.

2) Credit risk

• a) Credit risk refers to the risk that the counterparty will default on its contractual obligations resulting in financial loss to the Group. The Group is required to manage and analyze the credit risk for each of its new customers before granting the payment terms and the delivery conditions in accordance with the internal credit policy. For internal risk control, the Group assesses the credit quality of customers by considering their financial status, past experience and other factors. The limitations of individual risk are set by the board of directors based on internal or external credit ratings and regular monitoring of the use of credit lines.

• b) There were no excess credit lines for the years ended December 31, 2020 and 2019, and the management did not expect any significant losses due to the counterparty default on its contractual obligations.

• c) The Group transacts with a large number of unrelated customers and, thus, no concentration of credit risk was observed. Credit risk arises from cash and cash equivalents, deposit in banks and trade receivables from customers. In addition, the credit risk is not high because the counterparty of liquidity is the bank with a high credit rating granted by the rating agency.

• d) The Group only deals with creditworthy counterparties as a means of mitigating the risk of financial loss. The Group monitors the exposure at default and the credit ratings of its counterparties continuously.

• 61 -

• 3) Liquidity risk

• a) The Group’s financial control center aggregates the cash flow forecasting performed by each operating entity and monitors the forecast of the Group’s liquidity requirements to ensure that it has sufficient funds to meet operational needs.

• b) The remaining cash held by each operating entity is invested in demand deposits and marketable securities when it exceeds the management of working capital. The selected instruments have appropriate maturity dates or sufficient liquidity to meet the above forecast and provide sufficient water level.

• c) The following table details the Group’s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The table has been drawn up based on the undiscounted cash flows of financial liabilities from the earliest date on which the Group can be required to pay.

December 31, 2020

On Demand or Less than 1 Year Non-derivative financial liabilities Non-interest bearing $ 128,647 Lease liabilities 343,966 Floating interest rate liabilities 72,624 Fixed interest rate liabilities 753,441 $ 1,298,678 Less than 1 Year 1-5 Years Lease liabilities $ 343,966 $ 735,465 December 31, 2019 On Demand or Less than 1 Year Non-derivative financial liabilities Non-interest bearing $ 108,150 Lease liabilities 368,599 Floating interest rate liabilities 76,449 Fixed interest rate liabilities - $ 553,198 Less than 1 Year 1-5 Years Lease liabilities $ 368,599 $ 681,795	1-5 Years $ 38,164 735,465 322,286 18,679 $ 1,114,594 5-10 Years $ 107,424 1-5 Years $ 36,449 681,795 - 729,409 $ 1,447,653 5-10 Years $ 67,588	5+ Years $ - 110,785 - -	5+ Years $ - 110,785 - -
		$ 110,785
		10 Years $ 3,361 5+ Years $ - 67,588 - -
		$ 67,588
			10 Years $ -

• 62 -

d) Financing facilities

Unsecured bank loan facilities Amount used Amount unused Secured bank loan facilities Amount used Amount unused Secured other loan facilities Amount used Amount unused		December 31	December 31
		2020 $ - 100,000 $ 100,000 $ 744,910 901,810 $ 1,646,720 $ 34,750 11,100 $ 45,850	2019 $ - 100,000 $ 100,000 $ 426,449 1,212,851 $ 1,639,300 $ - - $ -

32. TRANSACTIONS WITH RELATED PARTIES

Balances and transactions between the Company and its subsidiaries, which are related parties of the Company, have been eliminated on consolidation and are not disclosed in this note. Details of transactions between the Group and other related parties are disclosed below.

a. Related party name and category

Related Party Name

Related Party Category

Jourdeness Cosmetic., Sdn Bhd. (“Cosmetic”) Guangzhou Jourdenwell Medical Beauty Clinic Co., Ltd. (“Guangzhou Jourdenwell”) Wuhan Jourdenwell Medical Beauty Clinic Co., Ltd. (“Wuhan Jourdenwell”)

Chengdu Jinniu Jourdenwell Medical Beauty Clinic Co., Ltd. (“Chengdu Jinniu Jourdenwell”) Jourdenwell Chen Sufang Medical Beauty Clinic Co., Ltd. in Siming District, Xiamen (“Jourdenwell in Siming District, Xiamen”) Jourdenwell Medical Beauty Clinic Co., Ltd. in Yuelu District, Changsha (“Jourdenwell in Yuelu District, Changsha”)

Jourdenwell Health Management Medical Beauty Clinic (“Changhua Yuanlin Jourdenwell”) Jourdenwell Clinic (“Taichung Jourdenwell”) Taoyuan Jourdenwell Medical Beauty Clinic

Related party in substance Related party in substance

Related party in substance Related party in substance Related party in substance

Related party in substance

Related party in substance

Related party in substance Related party in substance

(“Taoyuan Jourdenwell”)

(Continued)

• 63 -

Related Party Name

Related Party Category

Hsinchu Jourdenwell Medical Beauty Clinic (“Hsinchu Jourdenwell”) Kaohsiung Jourdenwell Medical Beauty Clinic (“Kaohsiung Jourdenwell”) Coswift International Marketing Co., Ltd.) (“Coswift International’) Chen, Cheng-Hsiung

Chen, Cheng-Tzu

Chen, Chia-Chi

Related party in substance

Related party in substance

The chairman of the company is the spouse of the Company’s main management

Key management personnel (chairman of the Company) Key management personnel (director of the Company)

Key management personnel (general manager of the Company)

• b. Operating revenue

Line Item Related Party Category Sales of goods Related party in substance Other operating Related party in substance	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 14,965 32,126 $ 47,091	2019 $ 8,587 4,313 $ 12,900

The selling price of the Group to the related parties was negotiated among each other. The payment terms for the related parties were 60 days to 90 days after shipment of goods, and they were similar to those from the third party.

• c. Purchases of goods

Related Party Category The chairman of the company is the spouse of the Company’s main management d. Trade receivables from related parties Related Party Category Related party in substance	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 8,275 December	2019 $ 39,735 31
		2020 $ 37,278	2019 $ 12,845

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

• 64 -

e. Other receivables from related parties

Related Party Category/Name Related party in substance Guangzhou Jourdenwell Wuhan Jourdenwell Chengdu Jinniu Jourdenwell Others		December	31
		2020 $ 18,247 13,884 3,929 20,547 $ 56,607	2019 $ 10,012 9,485 6,101 1,324 $ 26,922

• f. Payables to related parties

Related Party Category The chairman of the company is the spouse of the Company’s main management The outstanding trade payables to related parties are unsecured. Other payables to related parties Related Party Category Related party in substance Other unearned revenue (reported as other current liabilities) Related Party Category Related party in substance		December	31
		2020 $ - December	2019 $ 686 31
		2020 $ - December	2019 $ 1,677 31
		2020 $ 24,219	2019 $ 133

• g. Other payables to related parties

• h. Other unearned revenue (reported as other current liabilities)

• i. Lease arrangement - the Group is lessor/sublease arrangements

The Group’s sublease arrangements under operating leases

The Group subleases its right-of-use assets of buildings to its associates, Chengdu Jinniu Jourdenwell and Jourdenwell in Siming District, Xiamen, under operating lease with lease terms of 2 and 3 years, Changhua Yuanlin Jourdenwell, Taoyuan Jourdenwell, Hsinchu Jourdenwell and Kaohsiung Jourdenwell, under operating lease with lease terms of 5 years. The rentals are based on similar asset’s market rental rates and fixed lease payments are received monthly. As of December 31, 2020 and 2019, the gross lease payments received were $104,704 thousand and $5,121 thousand, respectively.

The Group is lessor under operating leases

The Group leases out equipment to its associate - Guangzhou Jourdenwell under operating lease with lease terms of 4 years, and the rental is based on similar asset’s market rental rates and fixed lease payments are received monthly. As of December 31, 2020, the gross lease payment received was $8,754 thousand.

• 65 -

The Group leases out its buildings to its associate, Taichung Jourdenwell, under operating lease with lease terms of 5 years, and the rental is based on similar asset’s market rental rates and fixed lease payments are received monthly. As of December 31, 2020, the gross lease payment received was $35,264 thousand.

The Group leases out its equipments to its associates, Changhua Yuanlin Jourdenwell, Taichung Jourdenwell, Taoyuan Jourdenwell, Hsinchu Jourdenwell and Kaohsiung Jourdenwell, under operating lease with lease terms of 1 year. The lessees have bargain purchase options to acquire the assets at the expiry of the lease periods. The lease contracts indicate that the lessees should make variable payments which shall be determined at a specific percentage of the respective lessee’s operating revenue.

Lease income was as follows:

Related Party Category/Name Related party in substance Chengdu Jinniu Jourdenwell Jourdenwell in Siming District, Xiamen Guangzhou Jourdenwell Changhua Yuanlin Jourdenwell Others	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 1,637 1,713 4,057 1,387 2,996 $ 11,790	2019 $ 707 894 4,906 - - $ 6,507

• j. Endorsements and guarantees

Endorsements and guarantees given by related parties

Related Party Category Key management personnel Amount endorsed Amount utilized (reported as short-term and long-term borrowings) Compensation of key management personnel Short-term employee benefits Post-employment benefits Share-based payments		December 31	December 31	December 31
	2020 2019 $ 1,507,770 $ 1,439,500 $ 779,660 $ 426,449 For the Year Ended December 31
			2020 $ 23,906 339 7,520 $ 31,765	2019 $ 23,355 325 7,837 $ 31,517

l. Compensation of key management personnel

The remuneration of directors and key executives was determined by the remuneration committee based on the performance of individuals and market trends.

• 66 -

33. ASSETS PLEDGED AS COLLATERAL OR FOR SECURITY

The following assets were provided as collateral applications as follows:

Buildings Buildings Land Land Equipment Financial assets at amortized cost - trust time deposits Financial assets at amortized cost - pledged time deposits Financial assets at amortized cost - reserve bank deposits Financial assets at amortized cost - demand deposits		December 31 2020 2019 Collateral Applications $ 239,673 $ 245,995 Performance bond (a) and (c) 79,926 85,865 Guarantees of bank loans 216,067 216,067 Performance bond (a) and (c) 587,940 587,940 Guarantees of bank loans 31,142 - Guarantees of other bank loans 175,000 175,000 Performance bond (b) and (c) 53,000 77,217 Performance bond (a) and (c) 21 324 Membership installment payment plan 2,023 920 Property maintenance funds and margin loan account $ 1,384,792 $ 1,389,328
		2020 $ 239,673 79,926 216,067 587,940 31,142 175,000 53,000 21 2,023 $ 1,384,792

• a. Subsidiary Jourdeness International entrusts the credit bank to process the collection and payment from the credit card holder’s account. Since the service provided by Jourdeness International is of a pre-receipt nature, the failure of Jourdeness International to satisfy performance obligations will cause losses on the credit card bank. Therefore, Jourdeness International has agreed to provide time deposit as collateral to obtain credit line with credit bank, and the guaranteed amount is $53,000 thousand. In addition, Jourdeness International signed an agreement with National Credit Card Center of the ROC and Taishin International Bank, which agreed to obtain a comprehensive credit line by pledging buildings and land as collateral. The credit bank issues a performance statement with a guarantee amount of $350,000 thousand which is the guarantee for the credit card losses caused by Jourdeness International’s promise to pay for the bank’s default.

• b. For the purpose of strengthening the protection of consumer rights by Jourdeness International, in addition to the original performance bond, the “Guarantee Trust Deed Agreement” was approved by Jourdeness International’s board of directors on August 28, 2015. The agreement states that Jourdeness International needs to consider the liquidity and the enhancement of the guarantee reserve rate, and be responsible for trust management through the trust management bank, as well as 30% of the advance receipts which are based on the Jourdeness International’s recent audit report deducted by the performance bond as a guarantee reserve have to be remitted to the trust account. If Jourdeness International fails to perform its services or goods in accordance with the contract from customer, consumers can obtain relevant rulings through formal channels to ensure their remaining rights.

• c. The performance bonds provided by Jourdeness International were $578,000 thousand and $601,000 thousand as of December 31, 2020 and 2019, respectively, which had complied with the commitment guarantee amount as stated in (b) above.

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34. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

In addition to those disclosed in other notes, the capital expenditures that the Group has committed but not incurred are as follows:

Property, plant and equipment		December 31	December 31
		2020 $ 517,459	2019 $ 909,471

35. SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

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

December 31, 2020

		Foreign		Functional
	Currencies			Currencies	Carrying
		(In	Exchange Rate	(In	Amount (In
	Thousands)		(In Dollars)	Thousands)	Thousands)
Financial assets
Monetary items
USD	$	18,391	28.480 (USD:NTD)	$ 523,762	$ 523,762
RMB		22,150	4.377	96,952	96,952
Financial liabilities
Monetary items
USD		15,350	28.480 (USD:NTD)	437,168	437,168
December 31, 2019
		Foreign		Functional
	Currencies			Currencies	Carrying
		(In	Exchange Rate	(In	Amount (In
	Thousands)		(In Dollars)	Thousands)	Thousands)
Financial assets
Monetary items
USD	$	12,665	29.980 (USD:NTD)	$ 383,955	$ 383,955
Financial liabilities
Monetary items
USD		13,050	29.980 (USD:NTD)	391,239	391,239

For the years ended December 31, 2020 and 2019, net foreign exchange (losses) gains were $(21) thousand and $3,914 thousand, respectively. It is impractical to disclose net foreign exchange gains (losses) by each significant foreign currency due to the variety of the foreign currency transactions.

• 68 -

36. SEPARATELY DISCLOSED ITEMS

• a. Information about significant transactions and b. information on investees

• 1) Financing provided to others (Table 1);

• 2) Endorsements/guarantees provided (Table 2);

• 3) Marketable securities held (excluding investments in subsidiaries, associates and joint ventures) (None);

• 4) Marketable securities acquired and disposed of at costs or prices of at least NT$300 million or 20% of the paid-in capital (None);

• 5) Acquisitions of individual real estate at costs of at least NT$300 million or 20% of the paid-in capital (None);

• 6) Disposals of individual real estate at prices of at least NT$300 million or 20% of the paid-in capital (None);

• 7) Total purchases from or sales to related parties amounting to at least NT$100 million or 20% of the paid-in capital (None);

• 8) Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital (Table 3);

• 9) Trading in derivative instruments (Notes 7 and 19);

• 10) Intercompany relationships and significant intercompany transactions (Table 4);

• 11) Information on investees (Table 5).

• c. Information on investments in mainland China

• 1) Information on any investee company in mainland China, showing the name, principal business activities, paid-in capital, method of investment, inward and outward remittance of funds, ownership percentage, net income of investees, investment income or loss, carrying amount of the investment at the end of the period, repatriations of investment income, and limit on the amount of investment in the mainland China area (Table 6).

• 2) Any of the following significant transactions with investee companies in mainland China, either directly or indirectly through a third party, and their prices, payment terms, and unrealized gains or losses (Tables 2 and 4):

  • a) The amount and percentage of purchases and the balance and percentage of the related payables at the end of the period.

  • b) The amount and percentage of sales and the balance and percentage of the related receivables at the end of the period.

  • c) The amount of property transactions and the amount of the resultant gains or losses.

  • d) The balance of negotiable instrument endorsements or guarantees or pledges of collateral at the end of the period and the purposes.

• 69 -

• e) The highest balance, the end of period balance, the interest rate range, and total current period interest with respect to financing of funds.

• f) Other transactions that have a material effect on the profit or loss for the year or on the financial position, such as the rendering or receipt of services.

• d. Information of major shareholders: List all shareholders with ownership of 5% or greater showing the name of the shareholder, the number of shares owned, and percentage of ownership of each shareholder (Table 7)

37. SEGMENT INFORMATION

Information reported to the chief operating decision maker was based on the types of business units. Business units include Jourdeness International, Jourdeness (Guangzhou) Cosmetics, Jourdeness Enterprise Management and MY.

The operating segments’ accounting policies were similar to the Group as detailed in Note 4. The operating segments’ profit or loss is measured in terms of profit or loss before tax and serves as the basis for assessing performance.

• a. Segment revenues and results

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

For the year ended December 31, 2020

Revenue from external customers Inter-segment revenue Consolidated revenue Segment income Interest income Other income Other gains and losses Finance costs Profit before tax	Jourdeness International $ 1,366,920 24,026 $ 1,390,946 $ 226,188	Jourdeness (Guangzhou) Cosmetics $ 1,248,041 14,007 $ 1,262,048 $ 211,353	Jourdeness Enterprise Management $ 25,889 4,017 $ 29,906 $ (4,417)	MY $ 53,069 - $ 53,069 $ 1,268	Other $ 37,510 - $ 37,510 $ (38,690)	Elimination $ - (42,050) $ (42,050) $ 1,213	Total $ 2,731,429 - $ 2,731,429 $ 396,915 8,388 32,736 (8,180) (52,740) $ 377,119

For the year ended December 31, 2019

Revenue from external customers Inter-segment revenue Consolidated revenue Segment income Other income Other gains and losses Finance costs Profit before tax	Jourdeness International $ 1,318,104 69,445 $ 1,387,549 $ 160,219	Jourdeness (Guangzhou) Cosmetics $ 1,796,403 10,501 $ 1,806,904 $ 546,802	Jourdeness Enterprise Management $ 31,636 4,225 $ 35,861 $ (9,574)	MY $ 106,122 - $ 106,122 $ 33,679	Other $ - - $ - $ (39,086)	Elimination $ - (84,171) $ (84,171) $ -	Total $ 3,252,265 - $ 3,252,265 $ 692,040 31,430 (6,859) (65,727) $ 650,884

The segment revenues were all generated from external customers. All intercompany transactions in 2020 and 2019 have been eliminated on consolidation.

Segment profit represented the profit before tax earned by each segment without interest income, rental revenue, gains or losses on disposal of property, plant and equipment and exchange gains or losses. This was the measure reported to the chief operating decision maker for the purpose of resource allocation and assessment of segment performance.

• 70 -

• b. Revenue from major products and services: Refer to Note 24.

• c. Geographical information

The Group’s revenue from continuing operations from external customers by location of operations and information about its non-current assets by location of assets are detailed below.

China Taiwan Other	Revenue from External Customers For the Year Ended December 31 2020 2019 $ 1,273,930 $ 1,828,039 1,404,430 1,317,777 53,069 106,449 $ 2,731,429 $ 3,252,265	Revenue from External Customers For the Year Ended December 31 2020 2019 $ 1,273,930 $ 1,828,039 1,404,430 1,317,777 53,069 106,449 $ 2,731,429 $ 3,252,265		Non-current Assets	Non-current Assets
				December 31
		2020 $ 1,273,930 1,404,430 53,069 $ 2,731,429		2020 $ 2,074,562 2,608,242 80,928 $ 4,763,732	2019 $ 2,216,111 2,076,312 91,053 $ 4,383,476

Non-current assets exclude those which are classified as financial instruments, deferred tax assets and defined benefit assets.

• d. Information about major customers

No single customer contributed 10% or more to the Group’s revenue in 2020 and 2019.

• 71 -

TABLE 1

JOURDENESS GROUP LIMITED AND SUBSIDIARIES

FINANCING PROVIDED TO OTHERS FOR THE YEAR ENDED DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

No.	Lender	Borrower	Financial Statement Account	Related Parties	Highest Balance for the Period (Note 3)	Ending Balance (Note 3)	Actual Borrowing Amount (Note 3)	Interest Rate	Nature of Financing	Business Transaction Amounts	Reasons for Short-term Financing	Allowance for Impairment Loss	Collateral	Collateral	Financing Limit for Each Borrower (Note 2)	Aggregate Financing Limits (Note 2)
													Item	Value
1	Bio-Jourdeness International Group Co., Ltd.	Jourdeness Group Limited	Other receivables from related parties	Yes	$ 592,384 (US$ 20,800 thousand)	$ 592,384 (US$ 20,800 thousand)	$ 364,544 (US$ 12,800 thousand)	-	Short-term financing	$ -	Operating capital	$ -	-	-	$ 657,321	$ 657,321

Note 1: The information of note column is as follows:

• a. The Company: 0.

• b. The subsidiaries are marked in numerical order from 1.

Note 2: The total amount of the financing provided by Bio-Jourdeness International Group Co., Ltd. to others, collectively and to any individual entity shall not exceed 40% of its net worth in recent audited (reviewed) financial statements. The Company’s net worth was calculated as of December 31, 2020.

Note 3: The calculation was based on the spot exchange rate of December 31, 2020.

Note 4: All intercompany transactions have been eliminated on consolidation.

• 72 -

TABLE 2

JOURDENESS GROUP LIMITED AND SUBSIDIARIES

ENDORSEMENTS/GUARANTEES PROVIDED FOR THE YEAR ENDED DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars)

No. (Note)	Endorser/Guarantor	Endorsee/Guarantee	Endorsee/Guarantee	Limits on Endorsement/ Guarantee Given on Behalf of Each Party (Notes 2 and 3)	Maximum Amount Endorsed/ Guaranteed During the Period (Note 3)	Outstanding Endorsement/ Guarantee at the End of the Period (Note 3)	Actual Borrowing Amount (Note 3)	Amount Endorsed/ Guaranteed by Collateral (Note 3)	Ratio of Accumulated Endorsement/ Guarantee to Net Equity in Latest Financial Statements (%)	Aggregate Endorsement/ Guarantee Limit (Note 2)	Endorsement/ Guarantee Given by Parent on Behalf of Subsidiaries (Note 4)	Endorsement/ Guarantee Given by Subsidiaries on Behalf of Parent (Note 4)	Endorsement/ Guarantee Given on Behalf of Companies in Mainland China (Note 4)
		Name	Relationship
1	Bio-Jourdeness International Group Co., Ltd.	Jourdeness Group Limited Jourdenwell Biomed Co., Ltd.	Parent Subsidiary	$ 821,652 821,652	$ 113,920 (US$ 4,000 thousand) 45,850	$ 113,920 (US$ 4,000 thousand) 45,850	$ 72,624 (US$ 2,550 thousand) 34,750	$ 120,000 33,750	5.50 2.21	$ 1,643,304 1,643,304	N Y	Y N	N N
2	Jourdeness (Guangzhou) Cosmetics Co., Ltd.	Jourdeness Group Limited	Parent	736,774	284,800 (US$ 10,000 thousand)	284,800 (US$ 10,000 thousand)	-	-	13.74	1,473,547	N	Y	N

Note 1: The information of note column is as follows:

a. The Company: 0.

b. The subsidiaries are marked in numerical order from 1.

Note 2: The total amount of the guarantee provided by the Company to others, collectively and to any individual entity shall not exceed 100% and 50% of its net worth, respectively. The Company’s net worth was calculated as of December 31, 2020.

Note 3: The calculation was based on the spot exchange rate of December 31, 2020.

Note 4: Endorsement/guarantee given by parent on behalf of subsidiaries marked as “Y”; endorsement/guarantee given by subsidiaries on behalf of parent marked as “Y”; endorsement/guarantee given on behalf of companies in mainland China marked as “Y”.

• 73 -

TABLE 3

JOURDENESS GROUP LIMITED AND SUBSIDIARIES

RECEIVABLES FROM RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL DECEMBER 31, 2020

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Company Name	Related Party	Relationship	Ending Balance (Note 1)	Turnover Rate		Overdue	Amount Received in Subsequent Period	Allowance for Impairment Loss
					Amount	Actions Taken
Bio-Jourdeness International Group Co., Ltd.	Jourdeness Group Limited	Parent	$ 364,640	-	$ -	-	$ 136,704	Note 1

Note 1: After valuation, it is not necessary to provide allowance for losses.

Note 2: After the end of the reporting period refers to the period from January 1, 2021 to March 29, 2021.

Note 3: All intercompany transactions have been eliminated on consolidation.

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TABLE 4

JOURDENESS GROUP LIMITED AND SUBSIDIARIES

INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT INTERCOMPANY TRANSACTIONS FOR THE YEAR ENDED DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars)

No. (Note 1)	Investee Company	Counterparty	Relationship (Note 2)	Transactions Details	Transactions Details	Transactions Details	Transactions Details
				Financial Statement Accounts	Amount	Transaction Terms	% of Total Sales or Assets (Note 3)
0	Jourdeness Group Limited	Bio-Jourdeness International Group Co., Ltd.	a	Other payables to related parties	$ 364,640	No significant difference to others	5
1	Bio-Jourdeness International Group Co., Ltd.	Jourdeness (Guangzhou) Cosmetic Co., Ltd. Bio-Jourdeness Cosmetic Co. (MY) Sdn. Bhd.	c c	Sales revenue Sales revenue	11,356 7,905	No significant difference to others No significant difference to others	- -

• Note 1: The information about the transactions between the Company and its subsidiaries is marked in the note column as follows:

• a. The Company: 0.

• b. The subsidiaries are marked in numerical order from 1.

Note 2: Investment types are as follows:

• a. The Company to the subsidiaries.

• b. The subsidiaries to the Company.

• c. Between the subsidiaries.

• Note 3: The ratio of transaction amounts to total sales revenue or assets was calculated as follows: (1) Asset or liability: The ratio was calculated based on the ending balance over the total consolidated assets; (2) Income or loss: The ratio was calculated based on the midterm accumulated amounts over the total consolidated sales revenue.

Note 4: All intercompany transactions have been eliminated on consolidation.

• 75 -

TABLE 5

JOURDENESS GROUP LIMITED AND SUBSIDIARIES

INFORMATION ON INVESTEES FOR THE YEAR ENDED DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Investor Company	Investee Company	Location	Business Content	Original Investment Amount	Original Investment Amount	As of	December 31, 2020	December 31, 2020	Net Income (Loss) of Investee	Share of Profit (Loss)	Note
				December 31, 2020	December 31, 2019	Number of Shares	%	Carrying Amount
The Company Bio-Jourdeness International Group Co., Ltd.	Bio-Jourdeness International Group Co., Ltd. Success United Limited Jourdeness Development Limited Bio-Jourdeness Cosmetic Co. (MY) Sdn. Bhd. Jourdenwell Biomed Co., Ltd.	Taiwan Samoa Hong Kong Malaysia Taiwan	Beauty and body spa business and manufacture of cosmetics Investment Investment Beauty and body spa business Consulting services of beauty and body spa business	$ 205,000 224,494 32,320 7,857 40,000	$ 205,000 224,494 32,320 7,857 -	20,500,000 6,529,401 1,000,000 1,100,750 4,000,000	100 100 100 100 100	$ 1,643,304 1,473,801 12,130 75,599 37,508	$ 156,221 130,206 (2,301) (93) (2,492)	$ 156,221 130,206 (2,301) (93) (2,492)	Note Note Note Note Note

Note: All intercompany transactions have been eliminated on consolidation.

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TABLE 6

JOURDENESS GROUP LIMITED AND SUBSIDIARIES

INFORMATION ON INVESTMENTS IN MAINLAND CHINA FOR THE YEAR ENDED DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Investee Company	Business Content	Paid-in Capital (Note 1)	Method of Investment	Accumulated Outward Remittance for Investment from Taiwan as of January 1, 2020	Investment Flows	Investment Flows	Accumulated Outward Remittance for Investment from Taiwan as of December 31, 2020	Net Income (Loss) of Investee	% Ownership of Direct or Indirect Investment	Investment Gain (Loss) (Note 6)	Carrying Amount as of December 31, 2020 (Note 6)	Accumulated Repatriation of Investment Income as of December 31, 2020 (Note 5)
					Outflow	Inflow
Jourdeness (Guangzhou) Cosmetics Co., Ltd. Jourdeness (Guangzhou) Cosmetology Enterprise Management Co., Ltd.	Manufacture of cosmetics and beauty and body spa business Consulting services of beauty and body spa business	$ 273,544 29,145	Note 2 Note 2	$ - -	$ - -	$ - -	$ - -	$ 149,233 454	100 100	$ 149,233 454	$ 1,473,547 12,174	$ 392,304 27,313

Accumulated Outward Upper Limit on the Amount of Investment Amounts Authorized Remittance for Investment in Investment Stipulated by by Investment Commission, Mainland China as of Investment Commission, MOEA MOEA December 31, 2020 (Note 3) $ - $ - $ -

• Note 1: The calculation was based on the spot exchange rate of December 31, 2020.

• Note 2: The company indirectly invested in subsidiaries in mainland China by investing via third region.

• Note 3: The company was incorporated in Cayman Islands and not restricted to “Guideline Governing the Review of Investment or Technical Cooperation in the Mainland Area.”

• Note 4: The board of directors of Jourdeness (Guangzhou) Cosmetics Co., Ltd. approved the payments of cash dividends amounting to $98,865 thousand (RMB23,500 thousand) and $97,819 thousand (RMB23,000 thousand) on May 15, 2020 and September 25, 2020, respectively, which were remitted to the Company via Success United Limited. The cumulative amount of remittance was $392,304 thousand as of December 31, 2020.

• Note 5: The board of directors of Jourdeness (Guangzhou) Enterprise Management approved the payments of cash dividends amounting to $27,313 thousand (RMB6,500 thousand) on May 11, 2020, which was remitted to the Company via Jourdeness Development Limited. The cumulative amount of remittance was $27,313 thousand as of December 31, 2020.

• Note 6: All intercompany transactions have been eliminated on consolidation. The basis for investment income (loss) recognition is the financial statements audited and attested by parent company’s CPA in the ROC.

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TABLE 7

JOURDENESS GROUP LIMITED

INFORMATION OF MAJOR SHAREHOLDERS DECEMBER 31, 2020

Name of Major Shareholder	Shares	Shares
	Number of Shares	Percentage of Ownership (%)
Corwin Investment Limited Lucky Asia International Ltd. Trimix International Limited Asia Sino Enterprises Co., Ltd.	16,204,441 4,487,185 3,808,843 3,332,058	26.60 7.36 6.25 5.47

• Note 1: The information of major shareholders presented in this table is provided by the Taiwan Depository & Clearing Corporation based on the number of ordinary shares and preference shares held by shareholders with ownership of 5% or greater, that have been issued without physical registration (including treasury shares) by the Company as of the last business day for the current quarter. The share capital in the consolidated financial statements may differ from the actual number of shares that have been issued without physical registration because of different preparation basis.

• Note 2: If a shareholder delivers the shareholdings to the trust, the above information will be disclosed by the individual truster who opened the trust account. For shareholders who declare insider shareholdings with ownership greater than 10% in accordance with the Security and Exchange Act, the shareholdings include shares held by shareholders and those delivered to the trust over which shareholders have rights to determine the use of trust property. For information relating to insider shareholding declaration, please refer to Market Observation Post System.

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