UMEC - Annual Report 2024 | FinancialReports.eu

2413

UNIVERSAL MICROELECTRONICS CO., LTD. PARENT COMPANY ONLY FINANCIAL STATEMENTS WITH REPORT OF INDEPENDENT AUDITORS FOR THE YEARS ENDED 31 DECEMBER 2024 AND 2023

Address: 3, 27TH RD., Taichung Industrial Park. Taichung, Taiwan, R.O.C. Telephone: 886-4-23590096

Notice to readers:

The reader is advised that parent company only financial statements have been prepared originally in Chinese. In the event of a conflict between these financial statements and the original Chinese version or difference in interpretation between the two versions, the Chinese language financial statements shall prevail.

Independent Auditors’ Report Translated from Chinese

To UNIVERSAL MICROELECTRONICS Co., Ltd.

Opinion

We have audited the accompanying parent company only balance sheets of UNIVERSAL MICROELECTRONICS Co., Ltd. (the “Company”) as of 31 December 2024 and 2023, and the related parent company only statements of comprehensive income, changes in equity and cash flows for the years ended 31 December 2024 and 2023, and notes to the parent company only financial statements, including the summary of materials accounting policies (together “the parent company only financial statements”).

In our opinion, the parent company only financial statements referred to above present fairly, in all material respects, the financial position of the Company as of 31 December 2024 and 2023, and its financial performance and cash flows for the years ended 31 December 2024 and 2023, in conformity with the requirements of the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Financial Statement Audit and Attestation Engagements of Certified Public Accountants and the Standards on Auditing of the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Company and its subsidiaries in accordance with the Norm of Professional Ethics for Certified Public Accountant of the Republic of China (the “Norm”), and we have fulfilled our other ethical responsibilities in accordance with the Norm. Based on our audits and the report(s) of the other auditors, 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 2024 parent company only financial statements. These matters were addressed in the context of our audit of the parent company only financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

1. Impairment of accounts receivable

As of 31 December 2024, gross accounts receivable and loss allowance by the Company amounted to NT$1,018,431 thousand and NT$0 thousand, respectively. Net accounts receivable accounted for 25 % of total assets, which was significant to the Company’s financial statements. Since the loss allowance of account receivables is measured by the expected credit loss for the duration of the account receivables, it is necessary to divide account receivables into groups in the process of measurement and analyze the application of related assumptions, including appropriate aging intervals and their respective loss rate. As the measurement of expected credit loss involves making judgment, analysis and estimates, and the result will affect the net account receivable, we therefore determined this a key audit matter.

Our audit procedures included, but not limited to, assessing the effectiveness of internal controls around accounts receivable management, including performing simple tests by sampling and understanding management’s assessment for expected credit losses of accounts receivable, identifying risk groups and determining appropriate aging intervals and the expected loss rate of each group, selecting samples to perform the accounts receivable confirmation, analyzing trends of changes in account receivable of prior and subsequent periods and turnover rates, reviewing the collection in subsequent period to assess their recoverability. We also assessed the adequacy of the disclosures related to accounts receivable in Notes 5 and 6.

2. Valuation for inventories (Including inventories of the subsidiaries under the equity method)

The amount of inventories of the Company and its subsidiaries was significant to the financial statements. Due to uncertainty arising from rapid changes in product technology, the provision for valuation loss, sluggish or obsolete inventories involves major judgments by the management. We therefore determined this a key audit matter.

Our audit procedures included, but not limited to, evaluate the effectiveness of the internal control established by the management for inventory, including performing simple tests and understanding the appropriateness of the management's assessment of inventory evaluation policies and methods, evaluating the management's stocktaking plan and conducting inventory inspections on the spot, obtain the inventory aging table and test the correctness of the inventory age, re-calculating the unit cost of inventories, and evaluating and testing net realizable value adopted by management. We also assessed the adequacy of the disclosures related to inventories in Notes 5 and 6.

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

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

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

Those charged with governance, including the audit committee, are responsible for overseeing the financial reporting process of the Company.

Auditors’ Responsibilities for the Audit of the Parent Company Only Financial Statements

Our objectives are to obtain reasonable assurance about whether the parent company only financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Standards on Auditing of 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 parent company only financial statements.

As part of an audit in accordance with Standards on Auditing of the Republic of China, we exercise professional judgment and professional skepticism throughout the audit. We also:

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

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control of the Company.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the ability to continue as a going concern of the Company. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the parent company only financial statements or, if such disclosures are 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 Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the parent company only financial statements, including the accompanying notes, and whether the parent company only financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the parent company only financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of 2024 parent company only financial statements and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Lo, Wen Chen

Huang, Ching Ya

Ernst & Young, Taiwan

11 March 2025

Notice to Readers

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

Accordingly, the accompanying parent company only financial statements and report of independent auditors are not intended for use by those who are not informed about the accounting principles or Standards on Auditing of the Republic of China, and their applications in practice. As the financial statements are the responsibility of the management, Ernst & Young cannot accept any liability for the use of, or reliance on, the English translation or for any errors or misunderstandings that may derive from the translation.

English Translation of Parent Company Only Financial Statements Originally Issued in Chinese UNIVERSAL MICROELECTRONICS CO., LTD.

PARENT COMPANY ONLY BALANCE SHEETS

31 December 2024 and 2023

(Expressed in Thousands of New Taiwan Dollars)

Assets	Notes	As of 31 December	As of 31 December
		2024	2023
Current assets Cash and cash equivalents Current financial assets at fair value through profit or loss Current financial assets at amortised cost Notes receivable, net Accounts receivable, net Accounts receivable due from related parties, net Other receivables Other receivable due from related parties, net Current tax assets Current inventories Prepayments Other current assets Total current assets Non-current assets Non-current financial assets at fair value through other comprehensive income Investments accounted for using equity method Property, plant and equipment Right-of-use assets Investment property, net Intangible assets Deferred tax assets Other non-current assets Total non-current assets	4,6(1) 4,6(2) 4,6(3) 4 4,6(4) 4,6(4),7 4 4,7 4 4,6(5) 7 6(6),7 4,6(7) 4,6(8) 4,6(9) 4,6(19) 4,6(10) 4 4,6(23) 7	$515,812 70,310 62,785 3,018 600,087 418,344 5,912 4,732 1,673 828,230 152,127 4,869	$443,592 3,177 - 454 550,835 434,037 12,456 207,306 - 1,255,009 126,889 35,593
		2,667,899	3,069,348
		187,497 540,336 526,765 5,720 102,302 6,947 34,295 15,076	201,649 407,973 513,888 1,001 102,778 12,062 45,552 287,779
		1,418,938	1,572,682

Total assets

$4,086,837 $4,642,030

(continued)

English Translation of Parent Company Only Financial Statements Originally Issued in Chinese UNIVERSAL MICROELECTRONICS CO., LTD.

PARENT COMPANY ONLY BALANCE SHEETS

31 December 2024 and 2023

(Expressed in Thousands of New Taiwan Dollars)

Notes	As of 31 December	As of 31 December
	2024	2023
4,6(11) 4,6(12) 6(17),7 6(13),7 4 4,6(19) 4,6(14) 4,6(14) 4,6(19) 4,6(15) 4,6(16)	$70,000 - 50,016 262,658 123,666 - 2,553 369,851 22,479	$228,000 79,944 59,291 554,451 165,404 39,703 826 513,310 20,002
	901,223	1,660,931
	1,232,517 3,213 209 508	912,432 189 49,434 1,015
	1,236,447	963,070
	2,137,670	2,624,001
	1,273,592 373,069 55,458 353,098 259,431	1,273,592 373,076 48,839 332,604 349,167
	667,987	730,610
	(359,330) (6,151)	(353,098) (6,151)
	1,949,167	2,018,029
	$4,086,837	$4,642,030

(The accompanying notes are an integral part of the parent company only financial statements)

English Translation of Parent Company Only Financial Statements Originally Issued in Chinese UNIVERSAL MICROELECTRONICS CO., LTD.

PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME

For the years ended 31 December 2024 and 2023

(Expressed in Thousands of New Taiwan Dollars, Except for Earnings per Share)

Notes	For theyears ended 31 December	For theyears ended 31 December
	2024	2023
4,6(17),7 4,6(20),7 4,6(20),7 6(18) 4,6(21),7 4,6(8) 4,6(23) 4,6(22) 6(24)	$3,714,431 (3,310,898)	$5,147,932 (4,641,034)
	403,533	506,898
	(177) 140	(140) 104
	403,496	506,862
	(69,559) (149,699) (214,435) 50	(80,812) (154,683) (201,076) 83
	(433,643)	(436,488)
	(30,147)	70,374
	7,271 19,931 74,047 (35,924) (120,614)	10,313 20,678 8,504 (35,557) 47,181
	(55,289)	51,119
	(85,436) 29,948	121,493 (15,007)
	(55,488)	106,486
	21,051 (22,321) (78) (4,210) 21,944 (4,389)	(3,256) (55,183) 124 10,073 (15,680) 3,136
	11,997	(60,786)
	$(43,491)	$45,700
	$(0.44)	$0.84
	$(0.44)	$0.84

(The accompanying notes are an integral part of the parent company only financial statements)

English Translation of Parent Company Only Financial Statements Originally Issued in Chinese UNIVERSAL MICROELECTRONICS CO., LTD.

PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY For the years ended 31 December 2024 and 2023 (Expressed in Thousands of New Taiwan Dollars)

Ordinaryshare	Capital surplus		Retained earnings	Retained earnings	Other equityinterest	Other equityinterest	Treasuryshares	Total equity
		Legal reserve	Special reserve	Unappropriated retained earnings	Exchange differences on translation of foreign financial statements	Unrealised gains (losses) on financial assets measured at fair value through other comprehensive income
$1,273,592	$373,076	$11,494 37,345	$135,032 197,572	$581,301 (37,345) (197,572) (63,411) 106,486 (2,605)	$(18,632) (12,544)	$(313,972) (45,637)	$(6,151)	$2,035,740 - - (63,411) 106,486 (60,786)
-	-	-	-	103,881	(12,544)	(45,637)	-	45,700
				(37,687)		37,687		-
$1,273,592	$373,076	$48,839	$332,604	$349,167	$(31,176)	$(321,922)	$(6,151)	$2,018,029
$1,273,592	$373,076 (7)	$48,839 6,619	$332,604 20,494	$349,167 (6,619) (20,494) (25,364) (55,488) 16,841	$(31,176) 17,555	$(321,922) (22,399)	$(6,151)	$2,018,029 - - (25,364) (7) - (55,488) 11,997
-	-	-	-	(38,647)	17,555	(22,399)	-	(43,491)
				1,388		(1,388)		-
$1,273,592	$373,069	$55,458	$353,098	$259,431	$(13,621)	$(345,709)	$(6,151)	$1,949,167

(The accompanying notes are an integral part of the parent company only financial statements)

English Translation of Parent Company Only Financial Statements Originally Issued in Chinese UNIVERSAL MICROELECTRONICS CO., LTD.

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS For the years ended 31 December 2024 and 2023

(Expressed in Thousands of New Taiwan Dollars)

Cash flows from operating activities: (Loss) profit from continuing operations before tax Adjustments: Adjustments to reconcile profit or loss: Depreciation expense Amortization expense Expected credit gain Net loss (gain) on financial assets or liabilities at fair value through profit or loss Interest expense Interest income Dividend income Share of loss (profit) of associates and joint ventures accounted for using equity method Gain on disposal of property, plan and equipment Loss on disposal of investments Unrealized loss from sales Realized profit on from sales Changes in operating assets and liabilities: (Increase) decrease in notes receivable (Increase) decrease in accounts receivable Decrease in other receivable Decrease in inventories Increase in prepayments Increase in other current assets Decrease in contract liabilities Decrease in accounts payable Decrease in other payable Increase in other current liabilities Decrease in net defined benefit liability Cash inflow generated from operations Interest received Dividends received Interest paid Income taxes paid (Continued) Net cash flows from operating activities	For theyears ended 31 December	For theyears ended 31 December
	2024 $(85,436) 70,902 17,610 (50) 1,797 35,924 (7,271) (5,209) 120,614 - - 177 (140) (2,564) (33,509) 212,027 426,779 (25,238) (288) (9,275) (291,793) (41,481) 2,477 (28,174) 357,879 6,951 5,209 (36,181) (8,769) 325,089	2023
		$121,493 63,399 12,109 (83) (922) 35,557 (10,313) (3,113) (47,181) (8) 10,274 140 (104) 11,287 236,271 141,310 89,989 (39,694) (263) (169,161) (80,742) (7,940) 9,502 (1,529)
		370,278 10,288 3,113 (35,593) (32,965)
		315,121

English Translation of Parent Company Only Financial Statements Originally Issued in Chinese UNIVERSAL MICROELECTRONICS CO., LTD.

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS(Continued) For the years ended 31 December 2024 and 2023

(Expressed in Thousands of New Taiwan Dollars)

Cash flows from investing activities: Acquisition of financial assets at fair value through other comprehensive income Proceeds from disposal of financial assets at fair value through other comprehensive income Acquisition of financial assets at amortised cost Acquisition of financial assets at fair value through profit or loss Proceeds from disposal of financial assets at fair value through profit or loss Acquisition of investments accounted for using equity method Proceeds from capital reduction of investments accounted for using equity method Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Acquisition of intangible assets Decrease in other financial assets Decrease (increase) in other non-current assets Net cash flows (used in) from investing activities Cash flows from financing activities: Decrease in short-term loans (Decrease) increase in short-term notes and bills payable Proceeds from long-term debt Repayments of long-term debt Payments of lease liabilities Decrease in other non-current liabilities Cash dividend distribution Net cash used in financing activities Net increase in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period	For theyears ended 31 December	For theyears ended 31 December
	2024 (10,000) 1,831 (62,785) (72,173) 3,243 (233,744) - (31,150) - (9,669) 31,012 220,382 (163,053) (158,000) (79,944) 1,049,078 (872,452) (2,627) (507) (25,364) (89,816) 72,220 443,592 $515,812	2023
		(22,400) - - (3,212) - - 233,743 (70,609) 1,238 (13,729) 172,587 (240,039)
		57,579
		(12,800) 34,999 973,585 (1,202,015) (2,289) (1,224) (63,411)
		(273,155)
		99,545 344,047
		$443,592

(The accompanying notes are an integral part of the parent company only financial statements)

UNIVERSAL MICROELECTRONICS CO., LTD. NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS

For the Year Ended 31 December 2024 and 2023

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

1. History and organization

UNIVERSAL MICROELECTRONICS Co., Ltd. (the Company) was incorporated in Republic of China (R.O.C) on 18 February 1984. The main activities of the Company include manufacturing and selling computer peripherals, connectors, wires and other parts. The shares of the Company commenced trading on Taiwan’s Over-the-Counter Market in 1998 and were listed on the Taiwan Stock Exchange on 11 September 2000. Its registered location and main operational base were situated at No. 3, Industrial Road 27, Nantun District, Taichung City.

2. Date and procedures of authorization of financial statements for issue

The parent company only financial statements of the Company for the years ended 31 December 2024 and 2023 were authorized for issue by the Company’s board of directors on 11 March 2025.

3. Newly issued or revised standards and interpretations

(1) Changes in accounting policies resulting from applying for the first time certain standards and amendments.

The Company applied for the first time International Financial Reporting Standards, International Accounting Standards, and Interpretations issued, revised or amended which are recognized by Financial Supervisory Commission (“FSC”) and become effective for annual periods beginning on or after 1 January 2024. The adoption of these new standards and amendments had no material impact on the Company.

(2) Standards or interpretations issued, revised or amended, by International Accounting Standards Board (“IASB”) which have been endorsed by FSC, and not yet adopted by the Company as at the end of the reporting period are listed below.

Items	New,Revised or Amended Standards and Interpretations	Effective Date issued byIASB
a	Lack of Exchangeability– Amendments to IAS 21	1 January2025

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(a) Lack of Exchangeability – Amendments to IAS 21

These amendments specify whether a currency is exchangeable into another currency and, when it is not, to determining the exchange rate to use and the disclosures to provide.

The abovementioned amendments are applicable for annual periods beginning on or after 1 January 2025 and have no material impact on the Company.

(3) Standards or interpretations issued, revised or amended, by IASB which have not been endorsed by FSC, and not yet adopted by the Company as at the end of the reporting period are listed below.

Items	New,Revised or Amended Standards and Interpretations	Effective Date issued byIASB
a	IFRS 10 “Consolidated Financial Statements” and IAS 28 “Investments in Associates and Joint Ventures” — Sale or Contribution of Assets between an Investor and its Associate or Joint Ventures	To be determined by IASB
b	IFRS 17 “Insurance Contracts”	1 January2023
c	IFRS 18 “Presentation and Disclosure in Financial Statements”	1 January 2027
d	Disclosure Initiative – Subsidiaries without Public Accountability: Disclosures(IFRS 19)	1 January 2027
e	Amendments to the Classification and Measurement of Financial Instruments – Amendments to IFRS 9 and IFRS 7	1 January 2026
f	Annual Improvements to IFRS Accounting Standards – Volume 11	1 January 2026
g	Contracts Referencing Nature-dependent Electricity – Amendments to IFRS 9 and IFRS 7	1 January 2026

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(a) IFRS 10 “Consolidated Financial Statements” and IAS 28 “Investments in Associates and Joint Ventures” — Sale or Contribution of Assets between an Investor and its Associate or Joint Ventures

The amendments address the inconsistency between the requirements in IFRS 10 Consolidated Financial Statements and IAS 28 Investments in Associates and Joint Ventures, in dealing with the loss of control of a subsidiary that is contributed to an associate or a joint venture. IAS 28 restricts gains and losses arising from contributions of non-monetary assets to an associate or a joint venture to the extent of the interest attributable to the other equity holders in the associate or joint ventures. IFRS 10 requires full profit or loss recognition on the loss of control of the subsidiary. IAS 28 was amended so that the gain or loss resulting from the sale or contribution of assets that constitute a business as defined in IFRS 3 between an investor and its associate or joint venture is recognized in full.

IFRS 10 was also amended so that the gains or loss resulting from the sale or contribution of a subsidiary that does not constitute a business as defined in IFRS 3 between an investor and its associate or joint venture is recognized only to the extent of the unrelated investors’ interests in the associate or joint venture.

(b) IFRS 17 “Insurance Contracts”

IFRS 17 provides a comprehensive model for insurance contracts, covering all relevant accounting aspects (including recognition, measurement, presentation and disclosure requirements). The core of IFRS 17 is the General (building block) Model, under this model, on initial recognition, an entity shall measure a group of insurance contracts at the total of the fulfilment cash flows and the contractual service margin. The carrying amount of a group of insurance contracts at the end of each reporting period shall be the sum of the liability for remaining coverage and the liability for incurred claims.

Other than the General Model, the standard also provides a specific adaptation for contracts with direct participation features (the Variable Fee Approach) and a simplified approach (Premium Allocation Approach) mainly for short-duration contracts.

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

IFRS 17 was issued in May 2017 and it was amended in 2020 and 2021. The amendments include deferral of the date of initial application of IFRS 17 by two years to annual beginning on or after 1 January 2023 (from the original effective date of 1 January 2021); provide additional transition reliefs; simplify some requirements to reduce the costs of applying IFRS 17 and revise some requirements to make the results easier to explain. IFRS 17 replaces an interim Standard – IFRS 4 Insurance Contracts – from annual reporting periods beginning on or after 1 January 2023.

IFRS 18 replaces IAS 1 Presentation of Financial Statements. The main changes are as below:

a. Improved comparability in the statement of profit or loss (income statement) IFRS 18 requires entities to classify all income and expenses within their statement of profit or loss into one of five categories: operating; investing; financing; income taxes; and discontinued operations. The first three categories are new, to improve the structure of the income statement, and requires all entities to provide new defined subtotals, including operating profit or loss. The improved structure and new subtotals will give investors a consistent starting point for analyzing entities’ performance and make it easier to compare entities.
b. Enhanced transparency of management-defined performance measures IFRS 18 requires entities to disclose explanations of those entity-specific measures that are related to the income statement, referred to as management-defined performance measures.
c. Useful grouping of information in the financial statements IFRS 18 sets out enhanced guidance on how to organize information and whether to provide it in the primary financial statements or in the notes. The changes are expected to provide more detailed and useful information. IFRS 18 also requires entities to provide more transparency about operating expenses, helping investors to find and understand the information they need.

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(d) Disclosure Initiative – Subsidiaries without Public Accountability: Disclosures (IFRS 19)

This standard permits subsidiaries without public accountability to provide reduced disclosures when applying IFRS Accounting Standards in their financial statements. IFRS 19 is optional for subsidiaries that are eligible and sets out the disclosure requirements for subsidiaries that elect to apply it.

(e) Amendments to the Classification and Measurement of Financial Instruments – Amendments to IFRS 9 and IFRS 7

The amendments include:

(i) Clarify that a financial liability is derecognised on the settlement date and describe the accounting treatment for settlement of financial liabilities using an electronic payment system before the settlement date.
(ii) Clarify how to assess the contractual cash flow characteristics of financial assets that include environmental, social and governance (ESG)-linked features and other similar contingent features.

(iii)Clarify the treatment of non-recourse assets and contractually linked instruments.

(iv)Require additional disclosures in IFRS 7 for financial assets and liabilities with contractual terms that reference a contingent event (including those that are ESGlinked), and equity instruments classified at fair value through other comprehensive income.
(f) Annual Improvements to IFRS Accounting Standards – Volume 11
(i) Amendments to IFRS 1
(ii) Amendments to IFRS 7
(iii)Amendments to Guidance on implementing IFRS 7
(iv)Amendments to IFRS 9
(v) Amendments to IFRS 10 (vi)Amendments to IAS 7

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(g) Contracts Referencing Nature-dependent Electricity – Amendments to IFRS 9 and IFRS 7

The amendments include:

(i) Clarify the application of the ‘own-use’ requirements.
(ii) Permit hedge accounting if these contracts are used as hedging instruments.
(iii)Add new disclosure requirements to enable investors to understand the effect of these contracts on a company’s financial performance and cash flows.

The abovementioned standards and interpretations issued by IASB have not yet endorsed by FSC at the date when the Company’s financial statements were authorized for issue, the local effective dates are to be determined by FSC. As the Company is still currently determining the potential impact of the new or amended standards and interpretations listed under (c), it is not practicable to estimate their impact on the Company at this point in time. The remaining new or amended standards and interpretations have no material impact on the Company.

4. Summary of significant accounting policies

(1) Statement of Compliance

The parent company only financial statements of the Company for the year ended 31 December 2024 and 2023 have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers (“the Regulations”).

(2) Basis of Preparation

The Company prepared the parent company only financial statements in accordance with the Regulations. According to the Article 21 of the Regulation, which provided that the profit or loss and other comprehensive income for the period presented in the parent company only financial statements shall be the same as the profit or loss and other comprehensive income attributable to stockholders of the parent presented in the consolidated financial statements for the period, and the total equity presented in the parent company only financial statements shall be the same as the equity attributable to the parent company presented in the consolidated financial statements. Therefore, the Company accounted for its investments in subsidiaries using equity method and, accordingly, made necessary adjustments.

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

The parent company only financial statements have been prepared on a historical cost basis, except for financial instruments that have been measured at fair value. The parent company only financial statements are expressed in thousands of New Taiwan Dollars (NT$) unless otherwise stated.

(3) Foreign Currency Transactions

The Group’s consolidated financial statements are presented in NT$, which is also the Company’s functional currency. Items included in the financial statements are measured using that functional currency.

Transactions in foreign currencies are initially recorded by the Company at the respective functional currency rates prevailing at the date of transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency closing rates of exchange at the reporting date. Non-monetary items measured at fair value in foreign currencies are translated using the exchange rates at the date when the fair value is determined. Non-monetary items that are measured at historical cost in foreign currencies are translated using the exchange rates as at the dates of the initial transactions.

All exchange differences arising on the settlement of monetary items or on translating monetary items are taken to profit or loss in the period in which they arise except for the following:

(a) Exchange differences arising from foreign currency borrowings for an acquisition of a qualifying asset to the extent that they are regarded as an adjustment to interest costs are included in the borrowing costs that are eligible for capitalization.
(b) Foreign currency items within the scope of IFRS 9 Financial Instruments are accounted for based on the accounting policy for financial instruments.
(c) Exchange differences arising on a monetary item that forms part of a reporting entity’s net investment in a foreign operation is recognized initially in other comprehensive income and reclassified from equity to profit or loss on disposal of the net investment.

When a gain or loss on a non-monetary item is recognized in other comprehensive income, any exchange component of that gain or loss is recognized in other comprehensive income. When a gain or loss on a non-monetary item is recognized in profit or loss, any exchange component of that gain or loss is recognized in profit or loss.

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(4) Translation of financial statements in foreign currency

The assets and liabilities of foreign operations are translated into NT$ at the closing rate of exchange prevailing at the reporting date and their income and expenses are translated at an average rate for the period. The exchange differences arising on the translation are recognized in other comprehensive income. On the disposal of a foreign operation, the cumulative amount of the exchange differences relating to that foreign operation, recognized in other comprehensive income and accumulated in the separate component of equity, is reclassified from equity to profit or loss when the gain or loss on disposal is recognized. The following partial disposals are accounted for as disposals:

(a) when the partial disposal involves the loss of control of a subsidiary that includes a foreign operation; and
(b) when the retained interest after the partial disposal of an interest in a joint arrangement or a partial disposal of an interest in an associate that includes a foreign operation is a financial asset that includes a foreign operation.

On the partial disposal of a subsidiary that includes a foreign operation that does not result in a loss of control, the proportionate share of the cumulative amount of the exchange differences recognized in other comprehensive income is re-attributed to the noncontrolling interests in that foreign operation In partial disposal of an associate or joint arrangement that includes a foreign operation that does not result in a loss of significant influence or joint control, only the proportionate share of the cumulative amount of the exchange differences recognized in other comprehensive income is reclassified to profit or loss.

Any goodwill and any fair value adjustments to the carrying amounts of assets and liabilities arising on the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and expressed in its functional currency.

(5) Current and non-current distinction

An asset is classified as current when:

(a) The Company expects to realize the asset, or intends to sell or consume it, in its normal operating cycle
(b) The Company holds the asset primarily for the purpose of trading
(c) The Company expects to realize the asset within twelve months after the reporting period

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

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

All other assets are classified as non-current.

A liability is classified as current when:

(a) The Company expects to settle the liability in its normal operating cycle
(b) The Company holds the liability primarily for the purpose of trading
(c) The liability is due to be settled within twelve months after the reporting period
(d) The Group does not have the right at the end of the reporting period to defer settlement of the liability for at least twelve months after the reporting period.

All other liabilities are classified as non-current.

(6) Cash and cash equivalents

Cash and cash equivalents comprise cash on hand, demand deposits and short-term, highly liquid time deposits (including ones that have maturity within 3 months) or investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

(7) Financial Instruments

Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the instrument.

Financial assets and financial liabilities within the scope of IFRS 9 Financial Instruments are recognized initially at fair value plus or minus, in the case of a financial asset or financial liability not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition or issue of the financial assets or financial liabilities.

(a) Financial instruments: Recognition and Measurement

The Company accounts for regular way purchase or sales of financial assets on the trade date.

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

The Company classified financial assets as subsequently measured at amortized cost, fair value through other comprehensive income or fair value through profit or loss considering both factors below:

a. the Company’s business model for managing the financial assets
b. the contractual cash flow characteristics of the financial asset

Financial assets measured at amortized cost.

A financial asset is measured at amortized cost if both of the following conditions are met and presented as note receivables, trade receivables financial assets measured at amortized cost and other receivables etc., on balance sheet as at the reporting date:

a. the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows and
b. 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.

Such financial assets are subsequently measured at amortized cost (the amount at which the financial asset is measured at initial recognition minus the principal repayments, plus or minus the cumulative amortization using the effective interest method of any difference between the initial amount and the maturity amount and adjusted for any loss allowance) and is not part of a hedging relationship. A gain or loss is recognized in profit or loss when the financial asset is derecognized, through the amortization process or in order to recognize the impairment gains or losses.

Interest revenue is calculated by using the effective interest method. This is calculated by applying the effective interest rate to the gross carrying amount of a financial asset except for:

a. purchased or originated credit-impaired financial assets. For those financial assets, the Company applies the credit-adjusted effective interest rate to the amortized cost of the financial asset from initial recognition.
b. financial assets that are not purchased or originated credit-impaired financial assets but subsequently have become credit-impaired financial assets. For those financial assets, the Company applies the effective interest rate to the amortized cost of the financial asset in subsequent reporting periods.

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Financial asset measured at fair value through other comprehensive income

A financial asset is measured at fair value through other comprehensive income if both of the following conditions are met:

a. the financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and
b. 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

Recognition of gain or loss on a financial asset measured at fair value through other comprehensive income are described as below:

a. A gain or loss on a financial asset measured at fair value through other comprehensive income recognized in other comprehensive income, except for impairment gains or losses and foreign exchange gains and losses, until the financial asset is derecognized or reclassified.
b. When the financial asset is derecognized the cumulative gain or loss previously recognized in other comprehensive income is reclassified from equity to profit or loss as a reclassification adjustment.
c. Interest revenue is calculated by using the effective interest method. This is calculated by applying the effective interest rate to the gross carrying amount of a financial asset except for:
(i) Purchased or originated credit-impaired financial assets. For those financial assets, the Company applies the credit-adjusted effective interest rate to the amortized cost of the financial asset from initial recognition.
(ii)Financial assets that are not purchased or originated credit-impaired financial assets but subsequently have become credit-impaired financial assets. For those financial assets, the Company applies the effective interest rate to the amortized cost of the financial asset in subsequent reporting periods.

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Besides, for certain equity investments within the scope of IFRS 9 that is neither held for trading nor contingent consideration recognized by an acquirer in a business combination to which IFRS 3 applies, the Group made an irrevocable election to present the changes of the fair value in other comprehensive income at initial recognition. Amounts presented in other comprehensive income shall not be subsequently transferred to profit or loss (when disposal of such equity instrument, its cumulated amount included in other components of equity is transferred directly to the retained earnings) and these investments should be presented as financial assets measured at fair value through other comprehensive income on the balance sheet. Dividends on such investment are recognized in profit or loss unless the dividends clearly represent a recovery of part of the cost of investment.

Financial asset measured at fair value through profit or loss.

Financial assets were classified as measured at amortized cost or measured at fair value through other comprehensive income based on aforementioned criteria. All other financial assets were measured at fair value through profit or loss and presented on the balance sheet as financial assets measured at fair value through profit or loss.

Such financial assets are measured at fair value, the gains or losses resulting from remeasurement is recognized in profit or loss which includes any dividend or interest received on such financial assets.

(b) Impairment of financial assets

The Company recognizes a loss allowance for expected credit losses on debt instrument investments measured at fair value through other comprehensive income and financial asset measured at amortized cost. The loss allowance on debt instrument investments measured at fair value through other comprehensive income is recognized in other comprehensive income and not reduce the carrying amount in the balance sheet.

The Company measures expected credit losses of a financial instrument in a way that reflects:

a. an unbiased and probability-weighted amount that is determined by evaluating a range of possible outcomes;
b. the time value of money; and

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

c. reasonable and supportable information that is available without undue cost or effort at the reporting date about past events, current conditions and forecasts of future economic conditions.

The loss allowance is measured as follows:

a. At an amount equal to 12-month expected credit losses: the credit risk on a financial asset has not increased significantly since initial recognition or the financial asset is determined to have low credit risk at the reporting date. In addition, the Company measures the loss allowance at an amount equal to lifetime expected credit losses in the previous reporting period, but determines at the current reporting date that the credit risk on a financial asset has increased significantly since initial recognition is no longer met.
b. At an amount equal to the lifetime expected credit losses: the credit risk on a financial asset has increased significantly since initial recognition or financial asset that is purchased or originated credit-impaired financial asset.
c. For trade receivables or contract assets arising from transactions within the scope of IFRS 15, the Company measures the loss allowance at an amount equal to lifetime expected credit losses.
d. For lease receivables arising from transactions within the scope of IFRS 16, the Company measures the loss allowance at an amount equal to lifetime expected credit losses.

At each reporting date, the Company needs to assess whether the credit risk on a financial asset has increased significantly since initial recognition by comparing the risk of a default occurring at the reporting date and the risk of default occurring at initial recognition. Please refer to Note 12 for further details on credit risk.

(c) Derecognition of financial assets

A financial asset is derecognized when:

a. The rights to receive cash flows from the asset have expired
b. The Company has transferred the asset and substantially all the risks and rewards of the asset have been transferred
c. The Company has neither transferred nor retained substantially all the risks and rewards of the asset but has transferred control of the asset.

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

On derecognition of a financial asset in its entirety, the difference between the carrying amount and the consideration received or receivable including any cumulative gain or loss that had been recognized in other comprehensive income, is recognized in profit or loss.

(d) Financial liabilities and equity

Classification between liabilities or equity

The Company classifies the instrument issued as a financial liability or an equity instrument in accordance with the substance of the contractual arrangement and the definitions of a financial liability, and an equity instrument.

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. The transaction costs of an equity transaction are accounted for as a deduction from equity (net of any related income tax benefit) to the extent they are incremental costs directly attributable to the equity transaction that otherwise would have been avoided.

Financial liabilities

Financial liabilities within the scope of IFRS 9 Financial Instruments are classified as financial liabilities at fair value through profit or loss or financial liabilities measured at amortized cost upon initial recognition.

Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated as at fair value through profit or loss. A financial liability is classified as held for trading if:

a. it is acquired or incurred principally for the purpose of selling or repurchasing it in the near term
b. on initial recognition it is part of a portfolio of identified financial instruments that are managed together and for which there is evidence of a recent actual pattern of short-term profit-taking; or

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

c. it is a derivative (except for a derivative that is a financial guarantee contract or a designated and effective hedging instrument)

If a contract contains one or more embedded derivatives, the entire hybrid (combined) contract may be designated as a financial liability at fair value through profit or loss; or a financial liability may be designated as at fair value through profit or loss when doing so results in more relevant information, because either:

a. it eliminates or significantly reduces a measurement or recognition inconsistency; or
b. a group of financial assets, financial liabilities or both is managed and its performance is evaluated on a fair value basis, in accordance with a documented risk management or investment strategy, and information about the Company is provided internally on that basis to the key management personnel.

Gains or losses on the subsequent measurement of liabilities at fair value through profit or loss including interest paid are recognized in profit or loss.

Financial liabilities at amortized cost

Financial liabilities measured at amortized cost include interest bearing loans and borrowings that are subsequently measured using the effective interest rate method after initial recognition. Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through the effective interest rate method amortization process.

Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or transaction costs.

Derecognition of financial liabilities

A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires.

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified (whether or not attributable to the financial difficulty of the debtor), such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts and the consideration paid or payable, including any non-cash assets transferred or liabilities assumed, is recognized in profit or loss.

(e) Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount reported in the balance sheet if, and only if, there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, or to realize the assets and settle the liabilities simultaneously.

(8) Derivative instruments

The Company uses derivative instruments to hedge its foreign currency risks and interest rate risks. A derivative is classified in the balance sheet as assets or liabilities at fair value through profit or loss except for derivatives that are designated effective hedging instruments which are classified as derivative financial assets or liabilities for hedging.

Derivative instruments are initially recognized at fair value on the date on which a derivative contract is entered into and are subsequently remeasured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative. The changes in fair value of derivatives are taken directly to profit or loss, except for the effective portion of hedges, which is recognized in either profit or loss or equity according to types of hedges used.

When the host contracts are either non-financial assets or liabilities, derivatives embedded in host contracts are accounted for as separate derivatives and recorded at fair value if their economic characteristics and risks are not closely related to those of the host contracts and the host contracts are not designated at fair value though profit or loss.

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(9) Fair value measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

(a) In the principal market for the asset or liability, or
(b) In the absence of a principal market, in the most advantageous market for the asset or liability

The principal or the most advantageous market must be accessible to by the Company.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

(10) Inventories

Inventories are valued at lower of cost and net realizable value item by item.

Costs incurred in bringing each inventory to its present location and condition are accounted for as follows:

Raw materials – Purchase cost under weighted average cost method Finished goods and work in progress – Cost of direct materials and labor and a proportion

of manufacturing overheads based on normal operating capacity but excluding borrowing costs.

Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Rendering of services is accounted in accordance with IFRS 15 and not within the scope of inventories.

(11) Investments accounted for under the equity method

According to Article 21 of the Regulation, the Company’s investment in subsidiaries was presented as “Investments accounted for using equity method” and made necessary adjustments. The profit or loss during the period and other comprehensive income presented in the parent company only financial statements shall be the same as the allocations of profit or loss during the period and of other comprehensive income attributable to shareholders of the parent presented in the financial statements prepared on a consolidated basis, and the shareholders’ equity presented in the parent company only financial statements shall be the same as the equity attributable to shareholders of the parent presented in the financial statements prepared on a consolidated basis. The adjustment was considered the difference between investment in subsidiaries in consolidated financial statements according to IFRS 10 “Consolidated financial statements” and application of IFRS to different reporting entities, debit/credit “Investment accounted for using equity method”, “Share of profit or loss of subsidiaries, associates and joint ventures” or “Share of other comprehensive profit or loss of subsidiaries, associates and joint ventures” etc.

The Company’s investment in its associate is accounted for using the equity method other than those that meet the criteria to be classified as held for sale. An associate is an entity over which the Company has significant influence. Joint venture means the Company has rights to the net assets of the joint agreement (with joint controller).

Under the equity method, the investment in the associate or an investment in a joint venture is carried in the balance sheet at cost and adjusted thereafter for the post-acquisition change in the Company’s share of net assets of the associate or joint venture. After the interest in the associate or joint venture is reduced to zero, additional losses are provided for, and a liability is recognized, only to the extent that the Company has incurred legal or constructive obligations or made payments on behalf of the associate or joint venture. Unrealized gains and losses resulting from transactions between the Company and the associate or joint venture are eliminated to the extent of the Company’s related interest in the associate or joint venture.

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

When changes in the net assets of an associate or a joint venture occur and not those that are recognized in profit or loss or other comprehensive income and do not affect the Company’s percentage of ownership interests in the associate or joint venture, the Company recognizes such changes in equity based on its percentage of ownership interests. The resulting capital surplus recognized will be reclassified to profit or loss at the time of disposing the associate or joint venture on a pro-rata basis.

When the associate or joint venture issues new stock, and the Company’s interest in an associate or a joint venture is reduced or increased as the Company fails to acquire shares newly issued in the associate or joint venture proportionately to its original ownership interest, the increase or decrease in the interest in the associate or joint venture is recognized in additional paid-in capital and investment accounted for using the equity method. When the interest in the associate or joint venture is reduced, the cumulative amounts previously recognized in other comprehensive income are reclassified to profit or loss or other appropriate items. The aforementioned capital surplus recognized is reclassified to profit or loss on a pro rata basis when the Company disposes the associate or joint venture.

The financial statements of the associate or joint venture are prepared for the same reporting period as the Company. Where necessary, adjustments are made to bring the accounting policies in line with those of the Company.

The Company determines at each reporting date whether there is any objective evidence that the investment in the associate or an investment in a joint venture is impaired in accordance with IAS 28 Investments in Associates and Joint Ventures . If this is the case the Company calculates the amount of impairment as the difference between the recoverable amount of the associate or joint venture and its carrying value and recognizes the amount in the ‘share of profit or loss of an associate’ in the statement of comprehensive income in accordance with IAS 36 Impairment of Assets . In determining the value in use of the investment, the Company estimates:

(a) Its share of the present value of the estimated future cash flows expected to be generated by the associate or joint venture, including the cash flows from the operations of the associate and the proceeds on the ultimate disposal of the investment; or
(b) The present value of the estimated future cash flows expected to arise from dividends to be received from the investment and from its ultimate disposal.

Because goodwill that forms part of the carrying amount of an investment in an associate or an investment in a joint venture is not separately recognized, it is not tested for impairment separately by applying the requirements for impairment testing goodwill in IAS 36 Impairment of Assets .

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Upon loss of significant influence over the associate or joint venture, the Company measures and recognizes any retaining investment at its fair value. Any difference between the carrying amount of the associate or joint venture upon loss of significant influence and the fair value of the retaining investment and proceeds from disposal is recognized in profit or loss. Furthermore, if an investment in an associate becomes an investment in a joint venture or an investment in a joint venture becomes an investment in an associate, the entity continues to apply the equity method and does not remeasure the retained interest.

(12) Property, plant and equipment

Property, plant and equipment is stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. Such cost includes the cost of dismantling and removing the item and restoring the site on which it is located and borrowing costs for construction in progress if the recognition criteria are met. Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item is depreciated separately. When significant parts of property, plant and equipment are required to be replaced in intervals, the Company recognized such parts as individual assets with specific useful lives and depreciation, respectively. The carrying amount of those parts that are replaced is derecognized in accordance with the derecognition provisions of IAS 16 Property, plant and equipment. When a major inspection is performed, its cost is recognized in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognized in profit or loss as incurred.

Depreciation is calculated on a straight-line basis over the estimated economic lives of the following assets:

Buildings	20`～`40 years
Machinery and equipment	6`～`10 years
Transportation equipment	5`～`10 years
Office equipment	3`～`10 years
Other Fixed Assets	2`～`13 years

An item of property, plant and equipment and any significant part initially recognized is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset is recognized in profit or loss.

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.

(13) Investment property

The Company’s owned investment properties are measured initially at cost, including transaction costs. The carrying amount includes the cost of replacing part of an existing investment property at the time that cost is incurred if the recognition criteria are met and excludes the costs of day-to-day servicing of an investment property. Subsequent to initial recognition, other than those that meet the criteria to be classified as held for sale (or are included in a disposal group that is classified as held for sale) in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations , investment properties are measured using the cost model in accordance with the requirements of IAS 16 Property, plant and equipment for that model. If investment properties are held by a lessee as rightof-use assets and is not held for sale in accordance with IFRS 5, investment properties are measured in accordance with the requirements of IFRS 16.

Depreciation is calculated on a straight-line basis over the estimated economic lives of the following assets:

Buildings 20 years

Investment properties are derecognized when either they have been disposed of or when the investment property is permanently withdrawn from use and no future economic benefit is expected from its disposal. The difference between the net disposal proceeds and the carrying amount of the asset is recognized in profit or loss in the period of derecognition.

The Company transfers properties to or from investment properties according to the actual use of the properties.

The Company transfers to or from investment properties when there is a change in use for these assets. Properties are transferred to or from investment properties when the properties meet, or cease to meet, the definition of investment property and there is evidence of the change in use.

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(14) Leases

The Company assesses whether the contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset for a period of time, the Company assesses whether, throughout the period of use, has both of the following:

(a) the right to obtain substantially all of the economic benefits from use of the identified asset; and
(b) the right to direct the use of the identified asset.

For a contract that is, or contains, a lease, the Company accounts for each lease component within the contract as a lease separately from non-lease components of the contract. For a contract that contains a lease component and one or more additional lease or non-lease components, the Company allocates the consideration in the contract to each lease component on the basis of the relative stand-alone price of the lease component and the aggregate stand-alone price of the non-lease components. The relative stand-alone price of lease and non-lease components shall be determined on the basis of the price the lessor, or a similar supplier, would charge the Company for that component, or a similar component, separately. If an observable stand-alone price is not readily available, the Company estimates the stand-alone price, maximizing the use of observable information.

Company as a lessee

Except for leases that meet and elect short-term leases or leases of low-value assets, the Company recognizes right-of-use asset and lease liability for all leases which the Company is the lessee of those lease contracts.

At the commencement date, the Company measures the lease liability at the present value of the lease payments that are not paid at that date. The lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be readily determined, the Company uses its incremental borrowing rate. At the commencement date, the lease payments included in the measurement of the lease liability comprise the following payments for the right to use the underlying asset during the lease term that are not paid at the commencement date:

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(a) fixed payments (including in-substance fixed payments), less any lease incentives receivable;
(b) variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;
(c) amounts expected to be payable by the lessee under residual value guarantees;
(d) the exercise price of a purchase option if the Company is reasonably certain to exercise that option; and
(e) payments of penalties for terminating the lease, if the lease term reflects the lessee exercising an option to terminate the lease.

After the commencement date, the Company measures the lease liability on an amortized cost basis, which increases the carrying amount to reflect interest on the lease liability by using an effective interest method; and reduces the carrying amount to reflect the lease payments made.

At the commencement date, the Company measures the right-of-use asset at cost. The cost of the right-of-use asset comprises:

(a) the amount of the initial measurement of the lease liability;
(b) any lease payments made at or before the commencement date, less any lease incentives received;
(c) any initial direct costs incurred by the lessee; and
(d) an estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease.

For subsequent measurement of the right-of-use asset, the Company measures the right-ofuse asset at cost less any accumulated depreciation and any accumulated impairment losses. That is, the Company measures the right-of-use applying a cost model.

If the lease transfers ownership of the underlying asset to the Company by the end of the lease term or if the cost of the right-of-use asset reflects that the Company will exercise a purchase option, the Company depreciates the right-of-use asset from the commencement date to the end of the useful life of the underlying asset. Otherwise, the Company depreciates the right-of-use asset from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term.

The Company applies IAS 36 “Impairment of Assets” to determine whether the right-ofuse asset is impaired and to account for any impairment loss identified.

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Except for those leases that the Company accounted for as short-term leases or leases of low-value assets, the Company presents right-of-use assets and lease liabilities in the balance sheet and separately presents lease-related interest expense and depreciation charge in the statements comprehensive income.

For short-term leases or leases of low-value assets, the Company elects to recognize the lease payments associated with those leases as an expense on either a straight-line basis over the lease term or another systematic basis.

Company as a lessor

At inception of a contract, the Company classifies each of its leases as either an operating lease or a finance lease. A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership of an underlying asset. A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership of an underlying asset. At the commencement date, the Company recognizes assets held under a finance lease in its balance sheet and present them as a receivable at an amount equal to the net investment in the lease.

For a contract that contains lease components and non-lease components, the Company allocates the consideration in the contract applying IFRS 15.

The Company recognizes lease payments from operating leases as rental income on either a straight-line basis or another systematic basis. Variable lease payments for operating leases that do not depend on an index or a rate are recognized as rental income when incurred.

(15) Intangible Assets

Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is its fair value as at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and accumulated impairment losses, if any. Internally generated intangible assets, excluding capitalized development costs, are not capitalized and expenditure is reflected in profit or loss for the year in which the expenditure is incurred.

The useful lives of intangible assets are assessed as either finite or indefinite.

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Intangible assets with finite lives are amortized over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortization method for an intangible asset with a finite useful life is reviewed at least at the end of each financial year. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset is accounted for by changing the amortization period or method, as appropriate, and are treated as changes in accounting estimates.

Intangible assets with indefinite useful lives are not amortized, but are tested for impairment annually, either individually or at the cash-generating unit level. The assessment of indefinite life is reviewed annually to determine whether the indefinite life continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis.

Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in profit or loss when the asset is derecognized.

A summary of the policies applied to the Group’s intangible assets is as follows:

Useful lives Amortization method used Internally generated or acquired	Patents	Computer software Other intangible Assets
	10 years Amortized on a straight-line basis over the period of the patent Acquired	10 years 2`～`5 years Amortized on a straight- line basis over the estimated useful life Amortized on a straight- line basis over the estimated useful life Acquired Acquired

(16) Impairment of non-financial assets

The Company assesses at the end of each reporting period whether there is any indication that an asset in the scope of IAS 36 Impairment of Assets may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an assets or cash-generating unit’s (“CGU”) fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

For assets excluding goodwill, an assessment is made at each reporting date as to whether there is any indication that previously recognized impairment losses may no longer exist or may have decreased. If such indication exists, the Company estimates the assets or cashgenerating unit’s recoverable amount. A previously recognized impairment loss is reversed only if there has been an increase in the estimated service potential of an asset which in turn increases the recoverable amount. However, the reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior years.

An impairment loss of continuing operations or a reversal of such impairment loss is recognized in profit or loss.

(17) Provisions

Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Where the Company expects some or all of a provision to be reimbursed, the reimbursement is recognized as a separate asset but only when the reimbursement is virtually certain. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.

The liability to pay a levy is recognizsed progressively if the obligating event occurs over a period of time.

(18) Treasury shares

Own equity instruments which are reacquired (treasury shares) are recognized at cost and deducted from equity. Any difference between the carrying amount and the consideration is recognized in equity.

(19) Revenue recognition

The Company’s revenue arising from contracts with customers are primarily related to sale of goods and rendering of services. The accounting policies are explained as follows:

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Sale of goods

The Company manufactures and sells goods. Sales are recognized when control of the goods is transferred to the customer and the goods are delivered to the customers. Revenue from the sale of goods is recognized based on the prices stipulated in the contracts.

The credit period of the Company’s sale of goods is from 10 to 150 days. For most of the contracts, when the Company transfers the goods to customers and has a right to an amount of consideration that is unconditional, these contracts are recognized as trade receivables. The Company usually collects the payments shortly after transfer of goods to customers; therefore, there is no significant financing component to the contract. For some of the contracts, the Company has transferred the goods to customers but does not has a right to an amount of consideration that is unconditional, these contacts should be presented as contract assets. Besides, in accordance with IFRS 9, the Company measures the loss allowance for a contract asset at an amount equal to the lifetime expected credit losses.

(20) Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective assets. All other borrowing costs are expensed in the period they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.

(21) Government grants

Government grants are recognized where there is reasonable assurance that the grant will be received and all attached conditions will be complied with. Where the grant relates to an asset, it is recognized as deferred income and released to income in equal amounts over the expected useful life of the related asset. When the grant relates to an expense item, it is recognized as income over the period necessary to match the grant on a systematic basis to the costs that it is intended to compensate.

Where the Company receives non-monetary grants, the asset and the grant are recorded gross at nominal amounts and released to the statement of comprehensive income over the expected useful life and pattern of consumption of the benefit of the underlying asset by equal annual installments. Where loans or similar assistance are provided by governments or related institutions with an interest rate below the current applicable market rate, the effect of this favorable interest is regarded as additional government grant.

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(22) Post-employment benefits

All regular employees of the Company are entitled to a pension plan that is managed by an independently administered pension fund committee. Fund assets are deposited under the committee’s name in the specific bank account and hence, not associated with the Company. Therefore, fund assets are not included in the Company’s parent company only financial statements.

For the defined contribution plan, the Company will make a monthly contribution of no less than 6% of the monthly wages of the employees subject to the plan. The Company recognizes expenses for the defined contribution plan in the period in which the contribution becomes due.

Post-employment benefit plan that is classified as a defined benefit plan uses the Projected Unit Credit Method to measure its obligations and costs based on actuarial assumptions. Re-measurements, comprising of the effect of the actuarial gains and losses, the effect of the asset ceiling (excluding net interest) and the return on plan assets, excluding net interest, are recognized as other comprehensive income with a corresponding debit or credit to retained earnings in the period in which they occur. Past service costs are recognized in profit or loss on the earlier of:

(a) the date of the plan amendment or curtailment, and
(b) the date that the Company recognizes restructuring-related costs or termination benefits

Net interest is calculated by applying the discount rate to the net defined benefit liability or asset, both as determined at the start of the annual reporting period, taking account of any changes in the net defined benefit liability (asset) during the period as a result of contribution and benefit payment.

(23) Income taxes

Income tax expense (income) is the aggregate amount included in the determination of profit or loss for the period in respect of current tax and deferred tax.

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Current income tax

Current income tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities, using the tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period. Current income tax relating to items recognized in other comprehensive income or directly in equity is recognized in other comprehensive income or equity and not in profit or loss.

The income tax for undistributed earnings is recognized as income tax expense in the subsequent year when the distribution proposal is approved by the Shareholders’ meeting.

Deferred tax

Deferred tax is provided on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.

Deferred tax liabilities are recognized for all taxable temporary differences, except:

(a) Where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination; at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and at the time of the transaction, does not give rise to equal taxable and deductible temporary differences.
(b) In respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint arrangements, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred tax assets are recognized for all deductible temporary differences, carry forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilized, except:

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(a) Where the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination; at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and at the time of the transaction, does not give rise to equal taxable and deductible temporary differences.
(b) In respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint arrangements, deferred tax assets are recognized only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilized.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted at the reporting date. The measurement of deferred tax assets and deferred tax liabilities reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities. Deferred tax relating to items recognized outside profit or loss is recognized outside profit or loss. Deferred tax items are recognized in correlation to the underlying transaction either in other comprehensive income or directly in equity. Deferred tax assets are reassessed at each reporting date and are recognized accordingly.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current income tax assets against current income tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

According to the temporary exception in the International Tax Reform – Pillar Two Model Rules (Amendments to IAS 12), information about deferred tax assets and liabilities related to Pillar Two income tax will neither be recognized nor be disclosed.

5. Significant accounting judgments, estimates and assumptions

The preparation of the parent company only financial statements require management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities, at the end of the reporting period. However, uncertainty about these assumption and estimate could result in outcomes that require a material adjustment to the carrying amount of the asset or liability affected in future periods.

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below:

(1) Fair value of financial instruments

Where the fair value of financial assets and financial liabilities recorded in the balance sheet cannot be derived from active markets, they are determined using valuation techniques including the income approach (for example the discounted cash flow model) or market approach. Changes in assumptions about these factors could affect the reported fair value of the financial instruments. Please refer to Note 12 for more details.

(2) Impairment of non-financial assets

An impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs to sell and its value in use. The fair value less costs to sell calculation is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date less incremental costs that would be directly attributable to the disposal of the asset or cash generating unit. The value in use calculation is based on a discounted cash flow model. The cash flows projections are derived from the budget for the next five years and do not include restructuring activities that the Company is not yet committed to or significant future investments that will enhance the asset’s performance of the cash generating unit being tested. The recoverable amount is most sensitive to the discount rate used for the discounted cash flow model as well as the expected future cash-inflows and the growth rate used for extrapolation purposes. The key assumptions used to determine the recoverable amount for the different cash generating units, including a sensitivity analysis, are further explained in Note 6.

(3) Pension benefits

The cost of post-employment benefit and the present value of the pension obligation under defined benefit pension plans are determined using actuarial valuations. An actuarial valuation involves making various assumptions. These include the determination of the discount rate and changes of the future salary etc. Please refer to Note 6 for more details.

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(4) Income tax

Uncertainties exist with respect to the interpretation of complex tax regulations and the amount and timing of future taxable income. Given the wide range of international business relationships and the long-term nature and complexity of existing contractual agreements, differences arising between the actual results and the assumptions made, or future changes to such assumptions, could necessitate future adjustments to tax income and expense already recorded. The Company establishes provisions, based on reasonable estimates, for possible consequences of audits by the tax authorities of the respective counties in which it operates. The amount of such provisions is based on various factors, such as experience of previous tax audits and differing interpretations of tax regulations by the taxable entity and the responsible tax authority. Such differences of interpretation may arise on a wide variety of issues depending on the conditions prevailing in the respective Group company's domicile.

Deferred tax assets are recognized for all carry forward of unused tax losses and unused tax credits and deductible temporary differences to the extent that it is probable that taxable profit will be available or there are sufficient taxable temporary differences against which the unused tax losses, unused tax credits or deductible temporary differences can be utilized. The amount of deferred tax assets determined to be recognized is based upon the likely timing and the level of future taxable profits and taxable temporary differences together with future tax planning strategies.

(5) Trade receivables – estimation of impairment loss

The Company estimates the impairment loss of accounts receivables at an amount equal to lifetime expected credit losses. The credit loss is the present value of the difference between the contractual cash flows that are due under the contract (carrying amount) and the cash flows that expects to receive (evaluate forward looking information). However, as the impact from the discounting of short-term receivables is not material, the credit loss is measured by the undiscounted cash flows. Where the actual future cash flows are lower than expected, a material impairment loss may arise. Please refer to Note 6 for more details.

(6) Inventories

Estimates of net realizable value of inventories take into consideration that inventories may be damaged, become wholly or partially obsolete, or their selling prices have declined. The estimates are based on the most reliable evidence available at the time the estimates are made. Please refer to Note 6 for more details.

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

6. Contents of significant accounts

(1) Cash and cash equivalents

Cash on hand Demand deposits Total	As of 31 December	As of 31 December
	2024	2023
	$538 515,274	$511 443,081
	$515,812	$443,592

(2) Current financial assets at fair value through profit or loss

Financial assets mandatorily at fair value through profit or loss: Stocks Corporate bonds Index bond fund Total	As of 31 December	As of 31 December
	2024	2023
	$33,325 36,985 -	$ - - 3,177
	$70,310	$3,177

Financial assets at fair value through profit or loss were not pledged.

(3) Current financial assets measured at amortised cost

Time deposits	As of 31 December	As of 31 December
	2024	2023
	$62,785	$ -

The Company classified certain financial assets as financial assets measured at amortised cost. Please refer to Note 12 for more details on credit risk management.

Financial assets measured at amortised cost were not pledged.

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(4) Accounts receivables and accounts receivable - related parties

Accounts receivables Less: loss allowance Subtotal Accounts receivable – related parties Total	As of 31 December	As of 31 December
	2024	2023
	$600,087 -	$552,745 (1,910)
	600,087 418,344	550,835 434,037
	$1,018,431	$984,872

Accounts receivables were not pledged.

Accounts receivables are generally on 10-150 day terms. The total carrying amount as of 31 December 2024 and 2023 were NT$1,018,431 thousand and NT$986,782 thousand, respectively. Please refer to Note 6(18) for more details on loss allowance of accounts receivables for the year ended 31 December 2024 and 2023. Please refer to Note 12 for more details on credit risk management.

(5) Inventories

Raw materials Supplies & parts Semi-finished products Work in progress Finished goods Total	As of31 December	As of31 December
	2024	2023
	$547,864 24,787 16,101 72,868 166,610	$868,889 36,140 27,207 78,377 244,396
	$828,230	$1,255,009

The cost of inventories recognized as operating costs for the years ended 31 December 2024 and 2023 were NT$3,310,898 thousand and NT$4,641,034 thousand, respectively. The loss from price recovery of inventories related to cost of goods sold were NT$5,117 thousand and NT$6,078 thousand.

No inventories were pledged.

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(6) Other current assets

Restricted deposit Temporary debits Other assets Total	As of31 December	As of31 December
	2024	2023
	$4,000 728 141	$35,012 473 108
	$4,869	$35,593

Please refer to Note 8 for more details on other current assets under pledge.

(7) Financial assets at fair value through other comprehensive income

Equity instrument investments measured at fair value through other comprehensive income – Non-current Listed companies stocks Emerging companies stocks Unlisted companies stocks Total	As of31 December	As of31 December
	2024	2023
	$90,833 41,935 54,729	$114,112 35,288 52,249
	$187,497	$201,649

The Company entered into a stock conversion agreement with Lightel Corporation on 28 September 2023, as the stock conversion reference date. The Company exchanged 5,082,027 shares of Lightel Technologics Inc. It held for 5,082,027 ordinary shares of Lightel Corporation. The fair value at the time of conversion was NT$57,306 thousand. The unrealized valuation loss accumulated at the time of conversion in the amount of NT$47,109 thousand, and the income tax benefit directly recognized in equity in the amount NT$(9,422) thousand was transferred from other equity to retained earnings.

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

The Company’s dividend income related to equity instrument investments measured at fair value through other comprehensive income for the years ended 31 December 2024 and 2023 are as follow:

Related to investments held at the end of the reporting period Related to investments derecognized during the period Dividends recognized during the period	Forthe years ended 31 December	Forthe years ended 31 December
	2024	2023
	$3,624 -	$3,113 -
	$3,624	$3,113

Financial assets at fair value through other comprehensive income were not pledged.

(8) Investments accounted for using the equity method

The following table lists the investments accounted for using the equity method of the Company:

As of 31 December	As of 31 December	As of 31 December
2024 Amount % $242,853 100.00% 60,996 100.00% 4,825 84.78% 1,152 100.00% 39,400 99.99% 112,365 100.00% - 60.00% 461,591 78,745 23.55% $540,336	2023 Amount % $200,522 100.00% 58,313 100.00% 11,955 84.78% 1,229 100.00% 43,215 99.99% 31,481 25.73% - 60.00% 346,715 61,258 23.88% $407,973
Amount $242,853 60,996 4,825 1,152 39,400 112,365 - 461,591 78,745 $540,336	Amount $200,522 58,313 11,955 1,229 43,215 31,481 - 346,715 61,258 $407,973
		100.00% 100.00% 84.78% 100.00% 99.99% 25.73% 60.00% 23.88%

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(a)For the years ended 31 December 2024 and 2023, the Company recognized share of profit or loss of subsidiaries, associates and joint ventures, the details are as follows:

Investees	Forthe years ended 31 December	Forthe years ended 31 December
	2024	2023
UMEC Investment Co., Ltd. Tien Lung Investment Co., Ltd. Advanced Radar Technology Co., Ltd. Lightel Corporation UMEC JAPAN CO., LTD. UMEC USA, Inc. UMEC VIETNAM Co., Ltd. AMIT System Service Ltd. UEC System Solutions Corporation PT UMEC Green Tech Indonesia Total	$(108,532) 5,220 (7,130) 17,624 (37) (6,555) (21,204) - - -	$56,986 8,868 (8,426) 3,953 (21) (4,557) (7,557) (1,354) (711) -
	$(120,614)	$47,181

(b)For the year ended 31 December 2024 and 2023, the Company recognized exchange differences on translation of foreign operations accounted for using equity method, and the details are as follows:

Investees	Forthe years ended 31 December	Forthe years ended 31 December
	2024	2023
UMEC Investment Co., Ltd. UMEC JAPAN CO., LTD. UMEC USA, Inc. UMEC VIETNAM Co., Ltd. Total	$40,577 (40) 2,775 (21,368)	$(13,016) (89) 48 (2,623)
	$21,944	$(15,680)

(c)Investments in subsidiaries

Investing subsidiaries was expressed as “Investments accounted for under the equity method” in the parent company only financial statements and was made the adjustment which was necessary.

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

In the fourth quarter of the year ended 31 December 2022, the company engaged in debtto-equity swap for capital increase in UMEC VIETNAM Co., Ltd. In the second quarter of the year ended 31 December 2023, the company obtained the business license issued by the Vietnamese government and completed the capital increase, acquiring a 25.73% stake. In the first quarter of the year ended 31 December 2024, the investment structure was adjusted, transferring 74.27% of the shares held by Global Development Co. Ltd to be directly held by the company.

In the year ended 31 December 2023, UMEC Investment Co., Ltd. reduced its capital by 7,437 shares and the Company received a refund in the amount of NT$233,743 thousand.

(d)Investments in associates

The Company entered into a share conversion agreement with Lightel Corporation on 28 September 2023 as the share conversion reference date, whereby it exchanged 5,082,027 shares of Lightel technology, Inc. it held for 5,082,027 ordinary shares of Lightel Corporation.

The Company did not participate in the cash capital increase of AMIT System Service Ltd., in the third quarter of the year ended 31 December 2023, and its shareholding ratio decreased from 14.75% to 11.00%. As a result, the Company lost significant influence over AMIT System Service Ltd., and therefore reclassified it as a financial asset measured at fair value through other comprehensive income.

In the third quarter of the year ended 31 December 2023, the Company participated in the cash capital increase of UEC System Solutions Corporation, increasing its investment by NT$1,400 thousand. However, as the Company did not subscribe in proportion to its shareholding, its shareholding ratio decreased from 13.89% to 11.08%. Consequently, the Company lost significant influence over UEC System Solutions Corporation, and therefore reclassified the investment as financial asset measured at fair value through other comprehensive income.

The Company’s investments in the companies above are not individually material. The aggregate financial information of the Company’s share of its associates is as follows:

Investees	Forthe years ended 31 December	Forthe years ended 31 December
	2024	2023
Profit from continuing operations Other comprehensive loss (net of tax) Total comprehensive income	$17,624 (130)	$1,888 -
	$17,494	$1,888

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

The associates had no contingent liabilities or capital commitments as of 31 December 2024 and 2023.

(9) Property, plant and equipment

Land and land Improvements	Buildings	Machinery and equipment	Transportation equipment	Office equipment	Mold equipment	Other equipment $131,548 1,645 38,643 (379)	Construction in progress and equipment pending examination $70,932 2,666 (73,598) -	Total
$149,380 - - -	$506,099 - 73,597 -	$564,040 17,403 6,285 (9,967)	$8,933 - 3,949 -	$62,519 8,085 - (13,638)	$114,462 1,351 618 -			$1,607,913 31,150 49,494 (23,984)
$149,380	$579,696	$577,761	$12,882	$56,966	$116,431	$171,457	$ -	$1,664,573
$(449) - -	$(379,997) (17,939) -	$(438,992) (32,291) 9,967	(6,585) (777) -	(52,537) (5,930) 13,638	(110,048) (2,790) -	(105,417) (8,040) 379	$ - - -	$(1,094,025) (67,767) 23,984
$(449)	$(397,936)	$(461,316)	$(7,362)	$(44,829)	$(112,838)	$(113,078)	$ -	$(1,137,808)
$149,380 - - -	$495,055 770 10,614 (340)	$551,026 11,726 16,680 (15,392)	$8,483 - 1,490 (1,040)	$57,597 6,424 - (1,502)	$111,307 1,514 1,641 -	$116,754 1,964 13,151 (321)	$66,297 15,249 (10,614) -	$1,555,899 37,647 32,962 (18,595)
$149,380	$506,099	$564,040	$8,933	$62,519	$114,462	$131,548	$70,932	$1,607,913
$(449) - -	$(367,110) (13,171) 284	$(419,994) (33,216) 14,218	$(7,212) (413) 1,040	$(48,936) (5,103) 1,502	$(106,917) (3,131) -	$(100,116) (5,622) 321	$ - - -	$(1,050,734) (60,656) 17,365
$(449)	$(379,997)	$(438,992)	$(6,585)	$(52,537)	$(110,048)	$(105,417)	$ -	$(1,094,025)
$148,931	$181,760	$116,445	$5,520	$12,137	$3,593	$58,379	$ -	$526,765
$148,931	$126,102	$125,048	$2,348	$9,982	$4,414	$26,131	$70,932	$513,888

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Components of building that have different useful lives are the main building structure and air conditioning, which are depreciated 20~40 years and 10~15 years, respectively.

Please refer to Note 8 for more details on property, plant and equipment under pledge.

The company did not have any instances where interest capitalization was required for the acquisition of real estate, plants, and equipment.

(10) Investment property

Land $96,713 -	Buildings $9,514 -	Total $106,227 -
$96,713	$9,514	$106,227
$96,713 -	$9,514 -	$106,227 -
$96,713	$9,514	$106,227
$ - -	$(3,449) (476)	$(3,449) (476)
$-	$(3,925)	$(3,925)
$ - -	$(2,973) (476)	$(2,973) (476)
$-	$(3,449)	$(3,449)
$96,713	$5,589	$102,302
$96,713	$6,065	$102,778

Please refer to Note 8 for more details on investment property under pledge.

Investment properties held by The Company are not measured at fair value but for which the fair value is disclosed. The fair value measurements of the investment properties are categorized within Level 3.

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

The fair value of the investment properties held by the Company as of 31 December 2024 and 2023 amounted to NT$231,797 thousand. The aforementioned fair values were determined by independent external valuation experts and evaluated based on recent transaction prices of comparable properties obtained from the Ministry of the Interior's real estate transaction actual price inquiry. The valuation method employed was the comparison approach, with the primary input being the price per ping.

(11) Current borrowings

Unsecured bank loans Secured bank loans Total Interest rates applied Unsecured bank loans Secured bank loans	As of 31 December	As of 31 December
	2024	2023
	$70,000 -	$200,000 28,000
	$70,000	$228,000
	2024	2023
	1.88% - %	1.81% 1.81%

The Company’s unused short-term lines of credits amounted to NT$1,433,145 thousand and NT$1,296,130 thousand as of 31 December 2024 and 2023, respectively.

The short- term loans are guaranteed by time deposits, please refer to Note 8 for details.

(12) Short-term notes and bills payable

Nature	Guarantee or acceptance institution	As of 31 December	As of 31 December
		2024	2023
		$ - - -	$50,000 30,000 (56)
		$ -	$79,944

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Interest rates applied	As of 31 December	As of 31 December
	2024	2023
	- %	1.39%-1.51%

Short-term notes and bills payable represent credit borrowings were not pledged.

(13) Other payables

Wages and salaries payable Insurance expense payable Other payables to related parties Pension expense payable Payable on machinery and equipment Employee bonus payable Compensation due to directors Other payables, others Total	As of 31 December	As of 31 December
	2024	2023
	$62,322 8,514 8,855 15,960 1,668 - - 26,347	$70,913 8,884 7,449 5,175 13,770 13,859 2,508 42,846
	$123,666	$165,404

(14) Long-term borrowings

Details of long-term borrowings as at 31 December 2024 and 2023 are as follows:

Lenders	Maturitydate	As of 31 December	As of 31 December
		2024	2023
Mega International Commercial Bank Chang Hwa Commercial Bank Bank of Taiwan Hua Nan Commercial Bank Taichung Commercial Bank First Commercial Bank Taiwan Cooperative Bank Land Bank of Taiwan Subtotal Less: current portion Total	2033/11/13 2029/06/23 2029/07/22 2025/12/28 2027/06/17 2027/04/15 2025/08/02 2027/11/25	$879,939 386,098 135,417 100,000 42,000 36,152 22,762 -	$486,690 434,318 104,883 200,000 14,000 52,509 102,009 31,333
		1,602,368 (369,851)	1,425,742 (513,310)
		$1,232,517	$912,432

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Interest rates applied	As of 31 December	As of 31 December
	2024	2023
	2.02%-2.52%	1.85%-2.39%

Please refer to Note 8 for more details on property, plant and equipment and investment property under pledge.

(15) Post-employment benefits

Defined contribution plan

The Company adopt a defined contribution plan in accordance with the Labor Pension Act of the R.O.C. Under the Labor Pension Act, the Company will make monthly contributions of no less than 6% of the employees’ monthly wages to the employees’ individual pension accounts. The Company have made monthly contributions of 6% of each individual employee’s salaries or wages to employees’ pension accounts.

Pension expenses under the defined contribution plan for the years ended 31 December 2024 and 2023 were NT$34,719 thousand and NT$17,090 thousand, respectively.

Defined benefits plan

The Company adopt a defined benefit plan in accordance with the Labor Standards Act of the R.O.C. The pension benefits are disbursed based on the units of service years and the average salaries in the last month of the service year. Two units per year are awarded for the first 15 years of services while one unit per year is awarded after the completion of the 15th year. The total units shall not exceed 45 units. Under the Labor Standards Act, the Company contribute an amount equivalent to 2% of the employees’ total salaries and wages on a monthly basis to the pension fund deposited at the Bank of Taiwan in the name of the administered pension fund committee. Before the end of each year, the Company assess the balance in the designated labor pension fund. If the amount is inadequate to pay pensions calculated for workers retiring in the same year, the Company will make up the difference in one appropriation before the end of March the following year.

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

The Ministry of Labor is in charge of establishing and implementing the fund utilization plan in accordance with the Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund. The pension fund is invested in-house or under discretionary accounts, based on a passive-aggressive investment strategy for long-term profitability. The Ministry of Labor establishes checks and risk management mechanism based on the assessment of risk factors including market risk, credit risk and liquidity risk, in order to maintain adequate manager flexibility to achieve targeted return without overexposure of risk. With regard to utilization of the pension fund, the minimum earnings in the annual distributions on the final financial statement shall not be less than the earnings attainable from the amounts accrued from two-year time deposits with the interest rates offered by local banks. Treasury Funds can be used to cover the deficits after the approval of the competent authority. As the Company does not participate in the operation and management of the pension fund, no disclosure on the fair value of the plan assets categorized in different classes could be made in accordance with paragraph 142 of IAS 19. As of December 31, 2024, the Company's defined benefit plan is not expected to make any contributions in the next fiscal year.

The weighted average duration of the defined benefits obligation was 6.3 years as of 31 December 2024.

Pension costs recognized in profit or loss are as follows:

For the years ended 31 December

Current service costs Net interest on the net defined benefit liabilities (assets) Total	2024	2023 $31 467 $498
	$32 436
	$468

Reconciliations of defined benefit obligation and plan assets at fair value are as follows:

	As of
31 Dec. 2024	31 Dec. 2023	1 Jan.2023
$153,873 (153,664)	$167,784 (118,350)	$179,622 (131,915)
$209	$49,434	$47,707

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Reconciliation of liabilities (assets) of the defined benefit plan are as follows:

Defined benefit obligation	Plan assets at fair value	Net defined benefit liabilities (assets)
$179,622 31 1,797 -	$(131,915) - (1,330) -	$47,707 31 467 -
181,450	(133,245)	48,205
- - 4,167 -	- - - (911)	- - 4,167 (911)
4,167	(911)	3,256
(17,833) -	17,833 (2,027)	- (2,027)
167,784 32 1,678 -	(118,350) - (1,242) -	49,434 32 436 -
169,494	(119,592)	49,902
- (1,377) (8,290) -	- - - (11,384)	- (1,377) (8,290) (11,384)
(9,667)	(11,384)	(21,051)
(5,954) -	5,954 (28,642)	- (28,642)
$153,873	$(153,664)	$209

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

The principal assumptions used in determining the Company’s defined benefit plan are shown below:

Discount rate Expected rate of salary increases	As of 31 December	As of 31 December
	2024	2023
	1.25% 2.00%	1.00% 2.00%

Sensitivity analysis for significant assumption are shown below:

Forthe years ended 31 December	Forthe years ended 31 December	Forthe years ended 31 December	Forthe years ended 31 December
2024		2023
Defined benefit obligation increase	Defined benefit obligation decrease	Defined benefit obligation increase	Defined benefit obligation decrease
$ - 2,786 2,790 -	$2,664 - - 2,696	$ - 3,382 3,368 -	$3,222 - - 3,243

The sensitivity analyses above are based on a change in a significant assumption (for example: change in discount rate or future salary), keeping all other assumptions constant. The sensitivity analyses may not be representative of an actual change in the defined benefit obligation as it is unlikely that changes in assumptions would occur in isolation of one another.

There was no change in the methods and assumptions used in preparing the sensitivity analyses compared to the previous period.

(16) Equity

(a) Common stock

The Company’s authorized capital and the issued capital was NT$2,207,460 thousand and NT$1,273,592 thousand in a total of 220,746 thousand shares and 127,359 thousand shares as of 31 December 2024 and 2023. Each share has one voting right and a right to receive dividends.

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(b) Capital surplus

Additional paid-in capital Treasury share transactions Decrease through changes in ownership interests in subsidiaries Share of changes in net assets of associates and joint ventures accounted for using the equity method Total	As of31 December	As of31 December
	2024	2023
	$335,197 34,058 (564) 4,378	$335,197 34,058 (564) 4,385
	$373,069	$373,076

According to the Company Act, the capital reserve shall not be used except for making good the deficit of the company. When a company incurs no loss, it may distribute the capital reserves related to the income derived from the issuance of new shares at a premium or income from endowments received by the company. The distribution could be made in cash or in the form of dividend shares to its shareholders in proportion to the number of shares being held by each of them.

(c) Treasury stock

As of 31 December 2024 and 2023, the treasury stock held by the Company was NT$6,151 thousand, and the number of treasury stock held by the Company was 538 thousand.

In order to encourage employees, the Company decided to repurchase shares as treasury shares by the propose of the Board of Directors on March 25, 2020. The Company repurchased 538 thousand shares between March 26 and May 25, 2020. The range of the repurchased price is between $6.68 and $18.68.

As of 31 December 2024 and 2023, the treasury shares of the Company had not been transferred to employees.

According to the Securities and Exchange Act, the number of shares bought back under the preceding paragraphs might not exceed ten percent of the total number of issued and outstanding shares of the Company. The total amount of the shares bought back might not exceed the amount of retained earnings plus premium on capital stock plus realized capital reserve.

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

The Company's treasury stocks, as stipulated by securities trading regulations, should not be pledged nor entitled to receive dividends or voting rights.

(d) Retained earnings and dividend policies

According to the Company’s original Articles of Incorporation, current year’s earnings, if any, shall be distributed in the following order:

a. Payment of all taxes and dues;
b. Offset prior years’ operation losses;
c. Set aside 10% of the remaining amount after deducting items (a) and (b) as legal reserve;
d. Set aside or reverse special reserve in accordance with law and regulations; and
e. The distribution of the remaining portion, if any, will be recommended by the Board of Directors and resolved in the shareholders’ meeting.

As the Company is undergoing a growth stage, the policy of dividend distribution should reflect its long-term financial planning. The Board of Directors shall make the distribution proposal annually and present it at the Shareholder’s meeting every year. The distribution of shareholders dividend shall be allocated cash dividends to be distributed may not be less than 10% of total dividends to be distributed.

According to the Company Act, the Company needs to set aside amount to legal reserve unless where such legal reserve amounts to the total authorized capital. The legal reserve can be used to make good the deficit of the Company. When the Company incurs no loss, it may distribute the portion of legal serve which exceeds 25% of the paid-in capital by issuing new shares or by cash in proportion to the number of shares being held by each of the shareholders.

When the Company distributing distributable earnings, it shall set aside to special reserve, an amount equal to “other net deductions from shareholders” equity for the current fiscal year, provided that if the company has already set aside special reserve according to the requirements for the adoption of IFRS, it shall set aside supplemental special reserve based on the difference between the amount already set aside and other net deductions from shareholders’ equity. For any subsequent reversal of other net deductions from shareholders’ equity, the amount reversed may be distributed from the special reserve.

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

On 31 March 2021, the FSC issued Order No. Financial-Supervisory-SecuritiesCorporate-1090150022, which sets out the following provisions for compliance:

On a public company's first-time adoption of the IFRS, for any unrealized revaluation gains and cumulative translation adjustments (gains) recorded to shareholders’ equity that the company elects to transfer to retained earnings by application of the exemption under IFRS 1, the company shall set aside special reserve. For any subsequent use, disposal or reclassification of related assets, the special reserve in the amount equal to the reversal may be released for earnings distribution.

Details of the 2024 and 2023 earnings distribution and dividends per share as approved and resolved by the Board of Directors’ meeting and shareholders’ meeting on 11 March 2025 and 26 June 2024, respectively, are as follows:

Appropriation of earnings	Appropriation of earnings	Dividend per share (NT$)	Dividend per share (NT$)
For the years ended 31 December		For the years ended 31 December
2024	2023	2024	2023
$ - 6,232 -	$6,619 20,494 25,364	$ -	$0.2

Please refer to Note 6(20) for further details on employees’ compensation and remuneration to directors.

(17) Operating revenue

Revenue from contracts with customers Sale of goods Other operating revenue Total	For theyears ended 31 December	For theyears ended 31 December
	2024	2023
	$3,697,862 16,569	$5,128,196 19,736
	$3,714,431	$5,147,932

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Analysis of revenue from contracts with customers for the years ended 31 December 2024 and 2023 are as follows:

(a) Disaggregation of revenue

For the year ended 31 December 2024

	Magnetic	Information
	Component	and	Optical
	& Power	communicati	Communicati
	product	on product	on Product	Others
	department	department	Office	department	Total
Sale of goods	$2,237,831	$1,448,890	$11,141	$ -	$3,697,862
Other operating	-	-	-	16,569	16,569
revenues
Total	$2,237,831	$1,448,890	$11,141	$16,569	$3,714,431
For the	year ended 31	December 2023
	Magnetic	Information
	Component	and	Optical
	& Power	communicati	Communicati
	product	on product	on Product	Others
	department	department	Office	department	Total
Sale of goods	$2,789,844	$2,325,028	$13,324	$ -	$5,128,196
Other operating	-	-	-	19,736	19,736
revenues
Total	$2,789,844	$2,325,028	$13,324	$19,736	$5,147,932

The Company recognizes sales revenue when control of goods has been transferred to the customer at a point in time.

(b) Contract balances

a. Contract assets – current

As of December 31 2024 and 2023, the company did not have any contract assets.

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

b. Contract liabilities - current

Sales of goods	2024.12.31	2023.12.31	2023.1.1
	$50,016	$59,291	$228,452

The significant changes in the Company’s balances of contract liabilities for the year ended 31 December 2024 and 2023 are as follows:

The opening balance transferred to revenue Increase in receipts in advance during the period (excluding the amount incurred and transferred to revenue during the period)	For the years ended 31 December	For the years ended 31 December
	2024 $(52,292) 43,017	2023
		$(199,812) 30,651

As of 31 December 2024, since the duration of all customer contracts for the sale of goods are shorter than one year, it is not required to disclose information related to unrecognized performance obligations.

(d) Assets recognized from costs to fulfil a contract

None.

(18) Impairment gains

The Company had no expected credit losses for the years ended 31 December 2024 and 2023.

Operating expenses –Impairment gains Accounts receivables	For the years ended 31 December	For the years ended 31 December
	2024 $50	2023
		$83

Please refer to Note 12 for more details on credit risk.

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

The Company measures the loss allowance of its trade receivables (including note receivables and trade receivables) at an amount equal to lifetime expected credit losses. The assessment of the Company’s loss allowance as at 31 December 2024 and 2023 are as follows:

The historical credit loss experience of accounts receivable indicates no significant difference in loss patterns among different customer groups. Therefore, the provision for expected credit losses is measured without distinguishing groups based on the expected credit loss rates. Relevant information is as follows:

31 December 2024

Gross carrying amount Loss ratio Lifetime expected credit losses Carrying amount	Not yet due(note)	Overdue <=30 days 31-60 days 61-90 days 91-120 days >=121 days Total
	$995,976 - % -	$22,090 $3,383 $ - $ - $ - $1,021,449 - % - % - % 3.58% 100% - - - - - -
	$995,976	$22,090 $3,383 $- $- $- $1,021,449

31 December 2023

Gross carrying amount Loss ratio Lifetime expected credit losses Carrying amount	Not yet due(note)	Overdue <=30 days 31-60 days 61-90 days 91-120 days >=121 days Total
	$966,860 - % -	$14,355 2,666 $226 $1,269 $1,860 $987,236 0.01% 0.05% 0.31% 3.63% 100% (2) (1) (1) (46) (1,860) (1,910)
	$966,860	$14,353 $2,665 $225 $1,223 $- $985,326

Note: The Company’s note receivables were not overdue.

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

The movement in the provision for impairment of note receivables and trade receivables during the years ended 31 December 2024 and 2023 are as follows:

As of 1 January 2024 Addition/(reversal) for the current period Write off due to uncollectibility As of 31 December 2024 As of 1 January 2023 Addition/(reversal) for the current period Write off due to uncollectibility As of 31 December 2023	Note receivables	Accounts receivables
	$ - - -	$1,910 (50) (1,860)
	$-	$-
	$ - - -	$1,993 (83) -
	$-	$1,910

(19) Leases
(a) The Company is a lessee

The Company leases various properties, including real estate such as land, buildings, office equipment and transportation equipment. The lease terms range from 1 to 3 years.

The Company’s leases effect on the financial position, financial performance and cash flows are as follow:

a. Amounts recognized in the balance sheet
i. Right-of-use asset

The carrying amount of right-of-use assets

Buildings Transportation equipment Office equipment Total	As of31 December	As of31 December
	2024	2023
	$5,533 - 187	$433 275 293
	$5,720	$1,001

During the years ended 31 December 2024 and 2023, The Company’s additions to right-of-use assets amounting to NT$7,378 thousand and NT$320 thousand, respectively.

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

ii. Lease liabilities

Lease liabilities Current Non-Current Total	As of 31 December	As of 31 December
	2024	2023
	$2,553 3,213	$826 189
	$5,766	$1,015

Please refer to Note 6(21)(d) for the interest on lease liabilities recognized during the years ended 31 December 2024 and 2023 and refer to Note 12(5) Liquidity Risk Management for the maturity analysis for lease liabilities.

b. Amounts recognized in the statement of profit or loss

Depreciation charge for right-of-use assets

Buildings Transportation equipment Office equipment Total	For theyears ended 31 December	For theyears ended 31 December
	2024	2023
	$2,278 275 106	$1,733 427 107
	$2,659	$2,267

c. Income and costs relating to leasing activities

The expenses relating to short-term leases	For theyears ended 31 December	For theyears ended 31 December
	2024	2023
	$352	$483

d. Cash outflow related to lessee and lease activity

During the years ended 31 December 2024 and 2023, the Company’s total cash outflows for leases amounting to NT$3,091 thousand and NT$2,806 thousand.

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(20) Summary statement of employee benefits, depreciation and amortization expenses by function for the years ended 31 December 2024 and 2023:

Function Nature		Forthe years ended 31 December	Forthe years ended 31 December	Forthe years ended 31 December	Forthe years ended 31 December
		2024			2023
	Operating costs	Operating expenses	Total	Operating costs	Operating expenses	Total
Employee benefits expense
Salaries	$192,910	$194,568	$387,478	$216,221	$201,756	$417,977
Laborandhealth insurance	22,989	20,585	43,574	23,757	20,491	44,248
Pension	13,733	21,454	35,187	8,035	9,553	17,588
Remunerationto directors	-	2,678	2,678	-	3,889	3,889
Other employee benefits expense	8,903	4,509	13,412	8,864	5,868	14,732
Depreciation	47,045	23,857	70,902	40,544	22,855	63,399
Amortization	1,932	15,678	17,610	2,910	9,199	12,109

For the years ended 31 December 2024 and 2023, the average number of employees of the Company were 729 and 762, respectively; the number of directors who were not concurrently employees were both 9 and 8, respectively.

For the years ended 31 December 2024 and 2023, the average of employees benefits expense of the Company were NT$666 thousand and NT$656 thousand ； the average of employees salaries of the Company were NT$538 thousand and NT$554 thousand, respectively. The Company’s average salary expense adjustment for the year ended 31 December 2024 decreased by 3%.

The Company had established an audit committee to replace the supervisor in accordance with the regulations, resulting in the non-recognition of the supervisor's remuneration.

The Company’s policy for compensation of directors, managers and employees is as follows:

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Implemented in accordance with the Company's Articles of Incorporation and the remuneration payment method for directors and functional members. The remuneration of directors shall be determined by the board of directors according to their participation in the operation of the company and the value of their contributions and with reference to the domestic industry standards. Owing that the manager's management ability, strategic planning and execution are the important forces to create the Company's operating performance. In order to closely integrate the personal goals of managers with the longterm and short-term business goals of the Company and the interests of shareholders, the principle of the Company's manager's salary policy is that the fixed salary is at a competitive level in the market, and the variable salary is based on the reasonable cooperation between the Company's operation and personal performance. And the Company also put emphasis on long-term incentive salaries and consideration of future risk for the purpose of encouraging managers to pay attention to the Company's long-term business goals and create a win-win-win situation for the Company, employees and shareholders. The employee remuneration and manager's remuneration for the distribution of the surplus shall be handled in accordance with the regulations of the Company's Articles of Incorporation.

The Company formulates working conditions and various salary and welfare measures for employees in accordance with government labor-related laws and regulations, and according to the job title, function, learning experience, performance, market conditions, future development of the company and other factors, taking into account the retention of outstanding colleagues and shareholders' rights, pay a market-competitive salary level, employee monthly compensation includes monthly salaries, bonuses based on performance, year-end bonuses based on business performance and individual achievements, and employee compensation as stipulated in the Articles of Association. The Company conducts regular performance evaluations of all employees to accurately assess their job performance as the basis for promotion, salary and bonus distribution, and talent development.

According to the Articles of Incorporation, no lower than 4% of profit of the current year is distributable as employees’ compensation and no higher than 3% of profit of the current year is distributable as remuneration to directors. However, when the Company has accumulated losses, they should have been covered in advance.

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Employee compensation may be distributed in the form of stocks or cash, and the recipients may include employees of subsidiary companies who meet certain conditions. The conditions and distribution methods should be determined by the Board of Directors. The distribution of employee compensation and director remuneration shall be approved by a resolution of the Board of Directors with the attendance of two-thirds or more of the directors and the consent of a majority of the attending directors and shall be reported to the shareholders' meeting. Information on the Board of Directors’ resolution regarding the employees’ compensation and remuneration to directors can be obtained from the “Market Observation Post System” on the website of the TWSE.

For the years ended 31 December 2024, there were no employees’ compensation and directors’ remuneration accrued as the Company generated loss before tax. Based on profit of 31 December 2023, the Company estimated the amounts of the employees’ compensation and remuneration to directors for the year ended of 31 December 2023 to be 10% and 1.82% of profit, respectively. The employees’ compensation and remuneration to directors for the year ended of 31 December 2023 amount to NT$13,778 thousand and NT$2,508 thousand respectively, recognized as salaries.

In the year ended 31 December 2023, actual distributions of employee remuneration and director remuneration amounted to NT$13,778 thousand and NT$$2,508 thousand, respectively. These amounts do not differ significantly from the expenses recognized in the year ended 31 December 2023 financial statements.

(21) Non-operating income and expenses

(a) Interest income

Financial assets at fair value through profit or loss Financial assets measured at amortised cost Total	For theyears ended 31 December	For theyears ended 31 December
	2024	2023
	$266 7,005	$ - 10,313
	$7,271	$10,313

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(b) Other income

Rental income Dividend income Other income - others Total	Forthe years ended 31 December	Forthe years ended 31 December
	2024	2023
	$660 5,209 14,062	$660 3,113 16,905
	$19,931	$20,678

(c) Other gains and losses

Foreign exchange gain, net Gain on disposal of property plant and equipment Loss on disposal of investments (Loss) gain of financial assets at fair value through profit or loss Other expense Total Finance costs Interest on loans from bank Interest on lease liabilities Total	Forthe years ended 31 December	Forthe years ended 31 December
	2024	2023
	$78,784 - - (1,797) (2,940)	$18,399 8 (10,274) 922 (551)
	$74,047	$8,504
	2024	2023
	$35,812 112	$35,523 34
	$35,924	$35,557

(d) Finance costs

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

UNIVERSAL MICROELECTRONICS CO., LTD.

(22) Components of other comprehensive income

For the year ended 31 December 2024

Not to be reclassified to profit or loss in subsequent periods: Remeasurements of defined benefit plans Unrealized gains (losses) from equity instruments investments measured at fair value through other comprehensive income Share of other comprehensive income of associates and joint ventures accounted for using the equity method To be reclassified to profit or loss in subsequent periods: Exchange differences resulting from translating the financial statements of foreign operations Total of other comprehensive income	Arising during theperiod	Reclassification adjustments duringtheperiod	Other comprehensive income	Income tax benefit (expense)	Other comprehensive income
	$21,051 (22,321) (78) 21,944	$ - - - -	$21,051 (22,321) (78) 21,944	$(4,210) - - (4,389)	$16,841 (22,321) (78) 17,555
	$20,596	$-	$20,596	$(8,599)	$11,997

For the year ended 31 December 2023

Not to be reclassified to profit or loss in subsequent periods: Remeasurements of defined benefit plans Unrealized gains (losses) from equity instruments investments measured at fair value through other comprehensive income Share of other comprehensive income of associates and joint ventures accounted for using the equity method To be reclassified to profit or loss in subsequent periods: Exchange differences resulting from translating the financial statements of foreign operations Total of other comprehensive income	Arising during theperiod	Reclassification adjustments duringtheperiod	Other comprehensive income	Income tax benefit (expense)	Other comprehensive income
	$(3,256) (55,183) 124 (15,680)	$ - - - -	$(3,256) (55,183) 124 (15,680)	$651 9,422 - 3,136	(2,605) (45,761) 124 (12,544)
	$(73,995)	$-	$(73,995)	$13,209	$(60,786)

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(23) Income tax

The main components of income tax expense (benefit) for the years ended 31 December 2024 and 2023 were as follows:

Income tax expense recognized in profit or loss

For theyears ended 31 December 2024 2023 Current income tax expense (income): Current income tax charge $476 $15,624 Adjustments in respect of current income tax of prior periods (33,082) 393 Deferred tax expense (income): Deferred tax expense (income) relating to origination and reversal of temporary differences 3,095 (1,010) Deferred tax income relating to origination and reversal of tax loss and tax credit (437) - Total income tax (income) expense $(29,948) $15,007 Income tax relating to components of other comprehensive income For theyears ended 31 December 2024 2023 Deferred tax expense (income): Remeasurements of defined benefit plans $4,210 $(651) Unrealized losses from equity instruments investments measured at fair value through other comprehensive income - (9,422) Exchange differences on translation 4,389 (3,136) Income tax relating to components of other comprehensive income $8,599 $(13,209)	For theyears ended 31 December	For theyears ended 31 December
	2024	2023
	$476 (33,082) 3,095 (437)	$15,624 393 (1,010) -
	$(29,948)	$15,007
Deferred tax expense (income): Remeasurements of defined benefit plans Unrealized losses from equity instruments investments measured at fair value through other comprehensive income Exchange differences on translation Income tax relating to components of other comprehensive income
	2024	2023
	$4,210 - 4,389	$(651) (9,422) (3,136)
	$8,599	$(13,209)

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Income tax charged directly to equity

Forthe years ended 31 December 2024 2023 Current income tax expense (income): Realized losses from equity instruments investment measured at fair value through other comprehensive income $ - $(9,422) Reconciliation between tax expense and the product of accounting profit multiplied by applicable tax rates is as follows:	Forthe years ended 31 December	Forthe years ended 31 December
	2024	2023
	$ -	$(9,422)

Accounting (loss) profit before tax from continuing operations At the Company’s statutory income tax rate Tax effect of revenues exempt from taxation Tax effect of expenses not deductible for tax purposes Tax effect of deferred tax assets/liabilities Corporate income surtax on undistributed retained earnings Adjustments in respect of current income tax of prior periods Others Total income tax expense recognized in profit or loss	Forthe years ended 31 December	Forthe years ended 31 December
	2024	2023
	$(85,436)	$121,493
	$(17,087) 23,405 362 724 - (33,082) (4,270)	$24,299 (245) 320 (9,807) 1,800 393 (1,753)
	$(29,948)	$15,007

Deferred tax assets (liabilities) relate to the following:

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

For the year ended 31 December 2024

Temporary differences Unrealized foreign exchange gains or losses Allowance for inventory valuation losses Unrealized impairment losses of prepayments to suppliers Impairment on financial assets measured at amortized cost Pension expense payable Exchange differences on translation of foreign operations Revaluations of financial assets and liabilities at fair value through profit or losses Unused tax losses Non-current liability – Defined benefit liability Deferred tax income (expense) Net deferred tax assets (liabilities) Reflected in balance sheet as follows: Deferred tax assets Deferred tax liabilities	Balance as of 1 January $5,016 7,444 1,826 10,249 9,196 9,352 7 - 2,462 $45,552 $45,552 $ -	Recognized in profit or loss $(4,190) 1,023 - - (301) - 373 437 - $(2,658)	Recognized in other comprehensive income $ - - - - - (4,389) - - (4,210) $(8,599)	Recognized in equity $ - - - - - - - - - $ -	Balance as of 31 December
					$826 8,467 1,826 10,249 8,895 4,963 380 437 (1,748)
					$34,295
					$34,295
					$ -

For the year ended 31 December 2023

Temporary differences Unrealized foreign exchange gains or losses Allowance for inventory valuation losses Unrealized impairment losses of prepayments to suppliers Impairment on financial assets measured at amortized cost Pension expense payable Exchange differences on translation of foreign operations Revaluations of financial assets and liabilities at fair value through profit or losses Unrealized gains (losses) from equity instruments investments measured at fair value through other comprehensive income Non-current liability – Defined benefit liability Deferred tax income (expense) Net deferred tax assets (liabilities) Reflected in balance sheet as follows: Deferred tax assets Deferred tax liabilities	Balance as of 1 January $4,732 6,228 1,826 10,249 9,502 6,216 191 - 1,811 $40,755 $40,755 $ -	Recognized in profit or loss $284 1,216 - - (306) - (184) - - $1,010	Recognized in other comprehensive income $ - - - - - 3,136 - 9,422 651 $13,209	Recognized in equity $ - - - - - - - (9,422) - $(9,422)	Balance as of 31 December
					$5,016 7,444 1,826 10,249 9,196 9,352 7 - 2,462
					$45,552
					$45,552
					$ -

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Unrecognized deferred tax assets

As of 31 December 2024 and 2023, deferred tax assets had not been recognized NT$230,468 thousand and NT$206,727 thousand, respectively.

The assessment of income tax returns

As of 31 December 2024, the assessment of the income tax returns of the Company is as follows:

The Company	The assessment of income tax returns
	Assessed and approved up to 2022

(24) (Loss) earnings per share

Basic earnings per share is calculated by dividing net profit for the year attributable to ordinary equity owners of the Company by the weighted average number of ordinary shares outstanding during the year.

Diluted earnings per share is calculated by dividing the net profit attributable to ordinary equity owners of the Company by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares.

(a) Basic (loss) earnings per share (Loss) profit (in thousand NT$) Weighted average number of ordinary shares outstanding for basic earnings per share (thousand shares) Basic (loss) earnings per share (NT$)	For theyears ended 31 December	For theyears ended 31 December
	2024	2023
	$(55,488)	$106,486
	126,821	126,821
	$(0.44)	$0.84

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(b) Diluted (loss) earnings per share (Loss) profit (in thousand NT$) (Loss) profit attributable to ordinary equity holders of the Company after dilution Weighted average number of ordinary shares outstanding for basic earnings per share (thousand shares) Effect of dilution: Employee compensation-stock (thousand shares) Weighted average number of ordinary shares outstanding after dilution (thousand shares) Diluted (loss) earnings per share (NT$)	For theyears ended 31 December	For theyears ended 31 December
	2024	2023
	$(55,488)	$106,486
	$(55,488)	$106,486
	126,821 -	126,821 473
	126,821	127,294
	$(0.44)	$0.84

There were no other transactions involving ordinary shares or potential ordinary shares between the reporting date and the completion of the financial statements.

7. Related party transactions

Information of the related parties that had transactions with the Company during the financial reporting period is as follows:

Name and nature of relationship of the related parties

Name of the relatedparties	Nature of relationship
Tien Lung Investment Co., Ltd. Advanced Radar Technology Co., Ltd. PT UMEC Green Tech Indonesia UMEC Investment Co., Ltd UMEC JAPAN CO., LTD. UMEC USA, INC. UMEC VIETNAM Co., Ltd. UMEC Company Ltd. Global Development Co. Ltd JA-LONG TECHNOLOGY CO., LTD.(Shenzhen)	Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Name of the relatedparties	Nature of relationship
UMEC Renlong Electronics Co., Ltd. (Meizhou) UMEC Fulong Electronics Co., Ltd. (Longyan) PORIS ELECTRONICS CO., LTD. Lightel Corporation Connection Technology Systems Inc. Lightel Technologics Inc.	Subsidiary Subsidiary Associate Associate Substantive related party Substantive related party

(1) Sales

Subsidiaries JA-LONG TECHNOLOGY CO., LTD.(Shenzhen) Others Associates Substantive related party Total	For theyears ended 31 December	For theyears ended 31 December
	2024	2023
	$565,606 3,802 - 1,576	$620,991 6,648 2,163 2,114
	$570,984	$631,916

The selling prices to related parties by the Company were not significantly different from those to regular customers. Accounts receivable were generally collected in the form of foreign currency checks or through T/T (wire transfer) within three months from the shipment month, except in cases where the financial condition of the related party required different arrangements.

(2) Purchases

JA-LONG TECHNOLOGY CO., LTD.(Shenzhen)	For theyears ended 31 December	For theyears ended 31 December
	2024	2023
	$1,459,597	$2,002,280

The purchase price from related parties by the Company was determined through mutual agreement based on market rates. The payment terms for purchases from related parties by the Company are comparable to those for regular suppliers, with a payment period of one to three months.

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(3) Accounts receivables

Subsidiaries JA-LONG TECHNOLOGY CO., LTD.(Shenzhen) Others Substantive related party Total	As of31 December	As of31 December
	2024	2023
	$417,132 769 442	$433,432 125 480
	$418,344	$434,037

(4) Other receivables

JA-LONG TECHNOLOGY CO., LTD.(Shenzhen) UMEC VIETNAM Co., Ltd. Tien Lung Investment Co., Ltd. Total	As of31 December	As of31 December
	2024	2023
	$923 1,220 2,589	$185,557 21,749 -
	$4,732	$207,306

Other receivables represent amounts due from related parties for goods collected on their behalf, expenses advanced on their behalf, equipment and raw materials purchased on their behalf, and funds lent to them.

(5) Prepayments

UMEC VIETNAM Co., Ltd.	As of31 December	As of31 December
	2024	2023
	$139,477	$112,709

(6) Temporary payments

UMEC JAPAN CO., LTD.

As of31 December	As of31 December
2024	2023
$611	$283

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(7) Prepayments for investments

Global Development Co. Ltd	As of31 December	As of31 December
	2024	2023
	$-	$233,743

(8) Unearned receipts

Others	As of31 December	As of31 December
	2024	2023
	$580	$480

(9) Other payables

UMEC Company Ltd. JA-LONG TECHNOLOGY CO., LTD.(Shenzhen) Advanced Radar Technology Co., Ltd. UMEC JAPAN CO., LTD. Total	As of31 December	As of31 December
	2024	2023
	$5,929 1,233 994 699	$4,728 - 2,166 555
	$8,855	$7,449

Other payables represent payments due to related parties for the purchase of equipment, payment of processing fees, and outstanding loans.

(10) Processing expense

UMEC VIETNAM Co., Ltd.	For theyears ended 31 December	For theyears ended 31 December
	2024	2023
	$141,002	$125,959

(11) Management service income

JA-LONG TECHNOLOGY CO., LTD.(Shenzhen) UMEC VIETNAM Co., Ltd. Total	For theyears ended 31 December	For theyears ended 31 December
	2024	2023
	$862 547	$876 522
	$1,409	$1,398

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

For the years ended 31 December 2024 and 2023, the company recorded management service income provided to subsidiaries in deduction of expenses of NT$25,627 thousand and NT$25,425 thousand and recorded in other income of NT$1,409 thousand and NT$1,398 thousand, respectively.

(12) Management expense

UMEC Company Ltd.	For theyears ended 31 December	For theyears ended 31 December
	2024	2023
	$20,610	$20,803

(13) Rent income

Advanced Radar Technology Co., Ltd.	For theyears ended 31 December	For theyears ended 31 December
	2024	2023
	$660	$660

The determination and collection of rental fees for the lease agreement were based on general market conditions.

(14) Royalty expense

For the years ended 31 December

Advanced Radar Technology Co., Ltd.

2024	2023
$2,504	$3,728

(15) Commissioned research expenses

Advanced Radar Technology Co., Ltd.

For theyears ended 31 December	For theyears ended 31 December
2024	2023
$8,571	$8,571

(16) Interest revenue

For the years ended 31 December

JA-LONG TECHNOLOGY CO., LTD.(Shenzhen)

2024	2023
$1,156	$2,722

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(17) Other expense

UMEC JAPAN CO., LTD.	For theyears ended 31 December	For theyears ended 31 December
	2024	2023
	$5,247	$6,089

(18) Key management personnel compensation

Short-term employee benefits Post-employment benefits Total	For theyears ended 31 December	For theyears ended 31 December
	2024	2023
	$19,159 709	$22,766 574
	$19,868	$23,340

8. Assets pledged as security

The following table lists assets of the Company pledged as security:

Items	Carryingamount 31 December 2024 31 December 2023 Secured liabilities	Carryingamount 31 December 2024 31 December 2023 Secured liabilities
	31 December 2024
Property, plant and equipment - land Property, plant and equipment - buildings Property, plant and equipment - machinery and equipment Investment property Other current assets - restricted deposit Total	$148,931 99,499 40,700 60,000 4,000	$148,931 Long-term borrowings 107,662 Long-term borrowings 50,678 Long-term borrowings 48,000 Long-term borrowings 35,012 Current borrowings $390,283
	$353,130

9. Significant contingencies and unrecognized contract commitments

The Company provided guarantees notes receivable NT$3,038,179 thousand for loan to banks for the year ended 31 December 2024.

10. Significant disaster loss

None.

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

11. Significant subsequent events

None.

12. Others

(1) Categories of financial instruments

Financial assets

Financial assets at fair value through profit or loss: Mandatorily measured at Fair value through profit or loss Financial assets at fair value through other comprehensive income Financial assets measured at amortised cost: Cash and cash equivalents (excluded cash on hand) Financial assets measured at amortised cost Notes receivable Accounts receivable Other receivables Other current assets - restricted deposit Guarantee deposits paid Subtotal Total	As of 31 December	As of 31 December
	2024	2023
	$70,310 187,497 515,274 62,785 3,018 1,018,431 10,644 4,000 1,619	$3,177 201,649 443,081 - 454 984,872 219,762 35,012 1,719
	1,615,771	1,684,900
	$1,873,578	$1,889,726

Financial liabilities

Financial liabilities at amortized cost: Current borrowings Short-term notes and bills payable Accounts payable Other payables Long-term borrowings (including current portion with maturity less than 1 year) Lease liabilities Total	As of 31 December	As of 31 December
	2024	2023
	$70,000 - 262,658 123,666 1,602,368 5,766	$228,000 79,944 554,451 165,404 1,425,742 1,015
	$2,064,458	$2,454,556

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(2) Financial risk management objectives and policies

The Company’s principal financial risk management objective is to manage the market risk, credit risk and liquidity risk related to its operating activates. The Company identifies measures and manages the aforementioned risks based on the Company’s policy and risk appetite.

The Company has established appropriate policies, procedures and internal controls for financial risk management. Before entering into significant transactions, due approval process by the Board of Directors and Audit Committee must be carried out based on related protocols and internal control procedures. The Company complies with its financial risk management policies at all times.

(3) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of the changes in market prices. Market prices comprise currency risk, interest rate risk and other price risk (such as equity risk).

In practice, it is rarely the case that a single risk variable will change independently from other risk variable, there are usually interdependencies between risk variables. However, the sensitivity analysis disclosed below does not take into account the interdependencies between risk variables.

Foreign currency risk

The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the Company’s operating activities (when revenue or expense are denominated in a different currency from the Company’s functional currency) and the Company’s net investments in foreign subsidiaries.

The Company has certain foreign currency receivables to be denominated in the same foreign currency with certain foreign currency payables, therefore natural hedge is received. The Company also uses forward contracts to hedge the foreign currency risk on certain items denominated in foreign currencies. Hedge accounting is not applied as they did not qualify for hedge accounting criteria. Furthermore, as net investments in foreign subsidiaries are for strategic purposes, they are not hedged by the Company.

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

The foreign currency sensitivity analysis of the possible change in foreign exchange rates on the Company’s profit is performed on significant monetary items denominated in foreign currencies as at the end of the reporting period. The Company’s foreign currency risk is mainly related to the volatility in the exchange rates for USD. The information of the sensitivity analysis is as follows:

When NTD strengthens/weakens against USD by 1%, the profit for the years ended 31 December 2024 and 2023 is decreased/increased by NT$11,013 thousand and NT$10,967 thousand, respectively.

Interest rate risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s loans and receivables at variable interest rates, bank borrowings with fixed interest rates and variable interest rates.

The Company manages its interest rate risk by having a balanced portfolio of fixed and variable loans and borrowings and entering into interest rate swaps. Hedge accounting does not apply to these swaps as they do not qualify for it.

The interest rate sensitivity analysis is performed on items exposed to interest rate risk as at the end of the reporting period, including investments and borrowings with variable interest rates and interest rate swaps. At the reporting date, a change of 10 basis points of interest rate in a reporting period could cause the profit for the years ended 31 December 2024 and 2023 to decrease/increase by NT$1,672 thousand and NT$1,654 thousand, respectively.

Equity price risk

The fair value of the Company’s listed, emerging and unlisted equity securities is susceptible to market price risk arising from uncertainties about future values of the investment securities. The Company’s listed, emerging and unlisted equity securities are classified under financial assets measured at fair value through profit or loss and financial assets measured at fair value through other comprehensive income. The Company manages the equity price risk through diversification and placing limits on individual and total equity instruments. Reports on the equity portfolio are submitted to the Company’s senior management on a regular basis. The Company’s Board of Directors reviews and approves all equity investment decisions.

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

At the reporting date, a change of 1% in the price of the listed equity securities measured at fair value through profit or loss could increase/decrease the Company’s profit for the years ended 31 December 2024 and 2023 by NT$333 thousand and NT$0 thousand, respectively.

At the reporting date, a change of 1% in the price of the listed and emerging companies stocks classified as equity instruments investments measured at fair value through other comprehensive income could have an impact of NT$1,328 thousand and NT$1,494 thousand on the equity attributable to The Company for the years ended 31 December 2024 and 2023, respectively.

Please refer to Note 12(8) for sensitivity analysis information of other equity instruments or derivatives that are linked to such equity instruments whose fair value measurement is categorized under Level 3.

(4) Credit risk management

Credit risk is the risk that a counterparty will not meet its obligations under a contract, leading to a financial loss. The Company is exposed to credit risk from operating activities (primarily for accounts receivables and notes receivables) and from its financing activities, including bank deposits and other financial instruments.

Credit risk is managed by each business unit subject to the Company’s established policy, procedures and control relating to credit risk management. Credit limits are established for all counter parties based on their financial position, rating from credit rating agencies, historical experience, prevailing economic condition and the Company’s internal rating criteria etc. Certain counter parties’ credit risk will also be managed by taking credit enhancing procedures, such as requesting for prepayment or insurance.

As of 31 December 2024 and 2023, amounts receivables from top ten customers represented 76% and 79% of the total accounts receivables of the Company. The credit concentration risk of other accounts receivables is insignificant.

Credit risk from balances with banks, fixed income securities and other financial instruments is managed by the Company’s treasury in accordance with the Company’s policy. The Company only transacts with counterparties approved by the internal control procedures, which are banks and financial institutions, companies and government entities with good credit rating. Consequently, there is no significant credit risk for these counter parties.

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(5) Liquidity risk management

The Company’s objective is to maintain a balance between continuity of funding and flexibility through the use of cash and cash equivalents, highly liquid equity investments, bank borrowings, convertible bonds and finance leases. The table below summarizes the maturity profile of the Company’s financial liabilities based on the contractual undiscounted payments and contractual maturity. The payment amount includes the contractual interest. The undiscounted payment relating to borrowings with variable interest rates is extrapolated based on the estimated interest rate yield curve as of the end of the reporting period.

Non-derivative financial liabilities

As of 31 December 2024 Loans Accounts payable Other payables Lease liabilities As of 31 December 2023 Loans Short-term notes and bills payable Accounts payable Other payables Lease liabilities	Less than 1year $444,507 262,658 123,666 2,650 $748,423 80,000 554,451 165,404 834	2 to 3years $735,480 - - 3,258 $458,016 - - - 192	4 to 5years $300,743 - - - $253,094 - - - -	> 5years $293,476 - - - $273,055 - - - -	Total
					$1,774,206 262,658 123,666 5,908 $1,732,588 80,000 554,451 165,404 1,026

Derivative financial liabilities

None.

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(6) Reconciliation of liabilities from financing activities

Reconciliation of liabilities for the year ended 31 December 2024:

As of 1 January 2024 Cash flow Non-cash change As of 31 December 2024	Current borrowings $228,000 (158,000) - $70,000	Short-term notes and bills payable $79,944 (79,944) - $ -	Long-term borrowings (including current portion with maturity less than 1year) $1,425,742 176,626 - $1,602,368	Lease liabilities $1,015 (2,627) 7,378 $5,766	Other non- current liabilities $1,015 (507) - $508	Total liabilities from financing activities
						$1,735,716 (64,452) 7,378
						$1,678,642

Reconciliation of liabilities for the year ended 31 December 2023:

As of 1 January 2023 Cash flow Non-cash change As of 31 December 2023	Current borrowings $240,800 (12,800) - $228,000	Short-term notes and bills payable $44,945 34,999 - $79,944	Long-term borrowings (including current portion with maturity less than 1year) $1,654,172 (228,430) - $1,425,742	Lease liabilities $2,984 (2,289) 320 $1,015	Other non- current liabilities $2,239 (1,224) - $1,015	Total liabilities from financing activities
						$1,945,140 (209,744) 320
						$1,735,716

(7) Fair values of financial instruments
(a) The methods and assumptions applied in determining the fair value of financial instruments:

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The following methods and assumptions were used by the Company to measure or disclose the fair values of financial assets and financial liabilities:

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(i) The carrying amount of cash and cash equivalents, accounts receivables, accounts payable and other current liabilities approximate their fair value due to their short maturities.
(ii) For financial assets and liabilities traded in an active market with standard terms and conditions, their fair value is determined based on market quotation price (including listed equity securities, beneficiary certificates, bonds and futures etc.) at the reporting date.
(iii)Fair value of equity instruments without market quotations (including private placement of listed equity securities, unquoted public company and private company equity securities) are estimated using the market method valuation techniques based on parameters such as prices based on market transactions of equity instruments of identical or comparable entities and other relevant information (for example, inputs such as discount for lack of marketability, P/E ratio of similar entities and Price-Book ratio of similar entities).
(iv) Fair value of debt instruments without market quotations, bank loans, bonds payable and other non-current liabilities are determined based on the counterparty prices or valuation method. The valuation method uses DCF method as a basis, and the assumptions such as the interest rate and discount rate are primarily based on relevant information of similar instrument (such as yield curves published by the Taipei Exchange, average prices for Fixed Rate Commercial Paper published by Reuters and credit risk, etc.)
(v) The fair value of derivatives which are not options and without market quotations, is determined based on the counterparty prices or discounted cash flow analysis using interest rate yield curve for the contract period. Fair value of option-based derivative financial instruments is obtained using on the counterparty prices or appropriate option pricing model (for example, Black-Scholes model) or other valuation method (for example, Monte Carlo Simulation).
(b) Fair value of financial instruments measured at amortized cost

The carrying amount of the Company’s financial assets and liabilities measured at amortized cost approximate their fair value.

Please refer to Note 12(8) for fair value measurement hierarchy for financial instruments of the Company.

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(8) Fair value measurement hierarchy
(a) Definition of fair value hierarchy

All asset and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, based on the lowest level input that is significant to the fair value measurement as a whole. Level 1, 2 and 3 inputs are described as follows:

Level 1 – Quoted (unadjusted) market prices in active markets for identical assets or liabilities that the entity can access at the measurement date

Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly

Level 3 – Unobservable inputs for the asset or liability

For assets and liabilities that are recognized in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization at the end of each reporting period.

(b) Fair value measurement hierarchy of the Company’s assets and liabilities

The Company does not have assets that are measured at fair value on a non-recurring basis. Fair value measurement hierarchy of the Company’s assets and liabilities measured at fair value on a recurring basis is as follows:

As of 31 December 2024

Financial assets at fair value: Stocks Corporate bonds Financial assets at fair value through other comprehensive income Equity instrument measured at fair value through other comprehensive income	Level 1 $33,325 36,985 132,768	Level 2 $ - - -	Level 3 $ - - 54,729	Total
				$33,325 36,985 187,497

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

As of 31 December 2023

Financial assets at fair value: Index bond fund Financial assets at fair value through other comprehensive income Equity instrument measured at fair value through other comprehensive income	Level 1 $3,177 149,400	Level 2 $ - -	Level 3 $ - 52,249	Total
				$3,177 201,649

Transfers between Level 1 and Level 2 during the period

During the years ended 31 December 2024 and 2023, there were no transfers between Level 1 and Level 2 fair value measurements.

Reconciliation for fair value measurements in Level 3 of the fair value hierarchy for movements during the period is as follows:

Beginning balance Total gains and losses recognized for the year: Amount recognized in OCI (presented in “unrealized gains (losses) from equity instruments investments measured at fair value through other comprehensive income”) Acquisition Reclassification Ending balance	Assets	Assets
	At fair value through other comprehensive income
	Stocks
	For theyears ended 31 December
	2024	2023
	$52,249 (7,520) 10,000 -	$134,767 (52,076) 22,400 (52,842)
	$54,729	$52,249

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Information on significant unobservable inputs to valuation

Description of significant unobservable inputs to valuation of recurring fair value measurements categorized within Level 3 of the fair value hierarchy is as follows:

As of 31 December 2024

Valuation Significant Quantitative Relationship between techniques unobservable inputs information inputs and fair value Sensitivity of the input to fair value Financial assets: At fair value through other comprehensive income Stocks Market Discount for lack of 30% The higher the 1% increase (decrease) in the discount approach marketability discount for lack for lack of marketability would result of marketability, in (decrease) increase in the the lower the fair Company’s equity by NT$547 value of the stocks thousand

As of 31 December 2023

Valuation Significant Quantitative Relationship between techniques unobservable inputs information inputs and fair value Sensitivity of the input to fair value

Financial assets: At fair value through other comprehensive income

Stocks Market Discount for lack of 30% The higher the 1% increase (decrease) in the discount approach marketability discount for lack for lack of marketability would result of marketability, in (decrease) increase in the the lower the fair Company’s equity by NT$522 value of the stocks thousand

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

As of 31 December 2024

Financial assets not measured at fair value but for which the fair value is disclosed: Investment properties (please refer to Note 6(10)) As of 31 December 2023 Financial assets not measured at fair value but for which the fair value is disclosed: Investment properties (please refer to Note 6(10))	Level 1 $ - Level 1 $ -	Level 2 $ - Level 2 $ -	Level 3	Total
			$231,797 Level 3	$231,797 Total
			$231,797	$231,797

(9) Significant assets and liabilities denominated in foreign currencies

Information regarding the significant assets and liabilities denominated in foreign currencies is listed below:

Financial assets Monetaryitems: USD Financial liabilities Monetaryitems: USD	As of 31 December 2024 Foreign currencies Foreign exchange rate NTD $40,081 32.785 $1,314,056 6,488 32.785 212,709	As of 31 December 2024 Foreign currencies Foreign exchange rate NTD $40,081 32.785 $1,314,056 6,488 32.785 212,709	As of 31 December 2023	As of 31 December 2023	As of 31 December 2023
	Foreign currencies $40,081 6,488	Foreign exchange rate 32.785 32.785	Foreign currencies $49,931 14,215	Foreign exchange rate 30.705 30.705	NTD
					$1,533,131 436,472

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

The Company has a number of different functional currencies; therefore, we are unable to disclose the exchange loss and gain of monetary financial assets and financial liabilities under each foreign currency that has significant impact. The Company recognized NT$78,784 thousand and NT$18,399 thousand foreign exchange gain for the years ended 31 December 2024 and 2023, respectively.

(10) Capital management

The primary objective of the Company’s capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximize shareholder value. The Company manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Company may adjust dividend payments to shareholders, return capital to shareholders or issue new shares.

13. Other disclosure

(1) Information at significant transactions and information on investees:
(a) Financing provided to others: Please refer to Attachment 1.
(b) Endorsement/Guarantee provided to others: Please refer to Attachment 2.
(c) Securities held (excluding the portion related to investments in subsidiaries, associated companies, and joint ventures): Please refer to Attachment 3.
(d) Individual securities acquired or disposed of with accumulated amount exceeding the lower of NT$300 million or 20 percent of the paid-in capital for the year ended 31 December 2024: None.
(e) Acquisition of individual real estate with amount exceeding the lower of NT$300 million or 20 percent of the paid-in capital: None.
(f) Disposal of individual real estate with amount exceeding the lower of NT$300 million or 20 percent of the capital stock: None.
(g) Related party transactions for purchases and sales exceeding the lower of NT$100 million or 20 percent of the capital stock: Please refer to Attachment 4.

UNIVERSAL MICROELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(h) Receivables from related parties with amounts exceeding the lower of NT$100 million or 20 percent of capital stock: Please refer to Attachment 5.
(i) Financial instruments and derivative transactions: None.
(j) The business relationship, significant transactions and amounts between parent company and subsidiaries: Please refer to Attachment 6.
(2) Information on investees:

Names, locations, main businesses and products, original investment amount, investment as of 31 December 2024, net income (loss) of investee company and investment income (loss) recognized as of 31 December 2024 (exclude the information on investments in mainland China): Please refer to Attachment 7.

(3) Information on investments in mainland China
(a) The Company's investments in mainland China through Global Development Company Ltd. included names, main businesses and products, total amount of paidin capital, method of investment, Investment flow situation, percentage of ownership, investment income (loss) recognized, carrying value as of 31 December 2024, accumulated inward remittance of earnings as of 31 December 2024 and upper limit on investment in mainland China: Please refer to Attachment 8.
(b) Significant transactions through third regions with the investees in Mainland China: Please refer to Attachment 1,2,4,5 and 6.
(4) Information of major shareholders

Stocks Majorshareholders	Quantity of shares	Shareholding
OU, CHENG-MING	34,870,964	27.38%
OUMEIYA INVESTMENTCO.,LTD	12,693,541	9.96%

Attachment 1: Financing provided to others

No.	Lender	Counterparty	Financial statement account	Related Party	Maximum balance for the period	Ending balance	Actual amount provided	Interest rate	Nature of financing (Note 4)	Amount of sales to (purchases from) counter-party	Reason for short-term financing	Allowance for doubtful accounts	Collateral	Collateral	Limit of financing amount for individual counter-party	Limit of total financing amount
													Item	Value
0	The Company	JA-LONG TECHNOLOGY CO., LTD.(Shenzhen)	Other receivables	Y	$393,420	$393,420	$ -	0.00%	1	1,459,596	-	-	-	-	$779,667 (Note 1)	$779,667 (Note 1)
1	UMEC (B.V.I.)	JA-LONG TECHNOLOGY CO., LTD.(Shenzhen)	Other receivables	Y	98,355	98,355	-	0.00%	2	-	Need for operating	-	-	-	150,414 (Note 2)	150,414 (Note 2)
2	Global	JA-LONG TECHNOLOGY CO., LTD.(Shenzhen)	Other receivables	Y	65,570	65,570	-	0.00%	2	-	Need for operating	-	-	-	127,337 (Note 3)	127,337 (Note 3)

Note 1: JA-LONG TECHNOLOGY CO., LTD.(Shenzhen) had business transactions with the Company. The maximum loan amount extended to the Company was limited to 40% of the audited net worth of NT$1,949,167 thousand as of 31 December 2024. Individual loan amounts were limited to the extent of the business transactions between the two parties.

The business transaction amount referred to was the higher of the purchase or sales amount between the two parties. This year, the business transaction amount exceeded 40% of the Company's net worth as of 31 December 2024. Therefore, the individual loan amounts were limited to 40% of the audited net worth of NT$1,949,167 thousand as of 31 December 2024.

Note 2: The loan amount was calculated based on 60% of the audited net worth of UMEC (B.V.I.) as of 31 December 2024, which amounted to NT$250,690 thousand.

Note 3: The loan amount was calculated based on 60% of the audited net worth of Global as of 31 December 2024, which amounted to NT$212,229 thousand.

Note 4: To fill in the nature of the loan, please follow the instructions below:

(1) If there is a business transaction, please fill in "1".
(2) If there is a need for short-term financing, please fill in "2".

Attachment 2: Endorsement/Gua	Attachment 2: Endorsement/Gua	ranteeprovided to others	ranteeprovided to others	ranteeprovided to others	ranteeprovided to others	ranteeprovided to others	ranteeprovided to others	ranteeprovided to others	ranteeprovided to others	ranteeprovided to others	ranteeprovided to others	ranteeprovided to others	ranteeprovided to others
(Note 1) No.	Endorsor/ Guarantor	Receiving party		Limit of guarantee/endorsement amount for receiving party (Note 3)	Maximum balance for the period	Ending balance	Actual amount provided	Amount of collateral guarantee/ endorsement	Percentage of accumulated guarantee amount to net assets value from the latest financial statement	Limit of total guarantee/ endorsement amount (Note 4)	Parent company's guarantee/ endorsement amount to subsidiaries (Note 5)	Subsidiaries' guarantee/ endorsement amount to parent company (Note 5)	Guarantee/ endorsement amount to company in Mainland China (Note 5)
		Company name	Releationship (Note 2)
0	The Company	JA-LONG TECHNOLOGY CO., LTD.(Shenzhen)	2	$389,833	$223,900	$223,900	$ -	$ -	11.49%	$779,667	Y	N	Y
1	UMEC (B.V.I.)	The Company	2	62,673	32,785	32,785	-	-	13.08%	75,207	N	Y	N
2	Global	The Company	2	63,669	49,178	49,178	-	-	23.17%	74,280	N	Y	N

Note 1: The Company and its subsidiaries are coded as follows:
The Company is coded "0".
The subsidiaries are coded consecutively beginning from "1" in the order presented in the table above.
Note 2: According to the "Guidelines Governing the Preparation of Financial Reports by Securities Issuers" issued by the R.O.C. Securities and Futures Bureau, receiving parties should be disclosed as one of the following:
A company with which it does business.
A company in which the public company directly and indirectly holds more than 50% of the voting shares.
A company that directly and indirectly holds more than 50% of the voting shares in the public company.
A company in which the public company holds, directly or indirectly, 90% or more of the voting shares.
A company that fulfills its contractual obligations by providing mutual endorsements/guarantees for another company in the same industry or for joint builders for purposes of undertaking a construction project.
A company that all capital contributing shareholders make endorsements/guarantees for their jointly invested company in proportion to their shareholding percentages.
Companies in the same industry provide among themselves joint and several security for a performance guarantee of a sales contract for pre-construction homes pursuant to the Consumer Protection Act for each other.
Note 3: 1. Limit of guarantee/endorsement amount for for a single enterprise by the Company is limited to 20% of the Company's net worth of the financial report audited by the certified public accountants as of 31 December 2024, which amounts to NT$1,949,167 thousand.
Limit of guarantee/endorsement amount for for a single enterprise by UMEC (B.V.I.) is limited to 25% of UMEC (B.V.I.)'s net worth of the financial report audited by the certified public accountants as of 31 December 2024, which amounts to NT$250,690 thousand.
Limit of guarantee/endorsement amount for for a single enterprise by Global is limited to 30% of Global's net worth of the financial report audited by the certified public accountants as of 31 December 2024, which amounts to NT$212,229 thousand.
Note 4: 1. The total limit of guarantee/endorsement amount by the Company is limited to 40% of the Company's net worth of the financial report audited by the certified public accountants as of 31 December 2024, which amounts to NT$1,949,167 thousand.
The total limit of guarantee/endorsement amount by UMEC (B.V.I.) is limited to 30% of UMEC (B.V.I.)'s net worth of the financial report audited by the certified public accountants as of 31 December 2024, which amounts to NT$250,690 thousand.
The total limit of guarantee/endorsement amount by Global is limited to 35% of Global's net worth of the financial report audited by the certified public accountants as of 31 December 2024, which amounts to NT$212,229 thousand.
Note 5: "Y" for the listed (OTC) parent company guarantees/endorses for subsidiary, subsidiary guarantees/endorses for the listed (OTC) parent company or guarantee/endorse for companies in Mainland China.

Attachment 3: Securities held (Excluding subsidiaries, associates and joint ventures)

Holding Company	Type of securities	Name of securities	Relationshi p (Note 1)	Financial statement account		As of 31 December 2024	As of 31 December 2024		Note
					Shares	Carrying amount	Percentage of ownership (%)	Fair value
Tien Lung Investment Co., Ltd.	Stocks	LELON ELECTRONICS CORP.	-	Financial assets at fair value through profit or loss- current	484,153 shares	$39,362	0.29%	$39,362	-
				Subtotal		$39,362		$39,362
The Company	Stocks	Taiwan Semiconductor ManufacturingCompany,Ltd	-	Financial assets at fair value through profit or loss- current	31,000 shares	$33,325	0.00%	$33,325	-
				Subtotal		$33,325		$33,325
Tien Lung Investment Co., Ltd.	Stocks	GOODWAY MACHINE CORP.	-	Financial assets measured at fair value through other comprehensive income- noncurrent	34,327 shares	$2,334	0.03%	$2,334	-
Tien Lung Investment Co., Ltd.	Stocks	INTEGRATED DIGITAL TECHNOLOGIES,INC.	-	Financial assets measured at fair value through other comprehensive income- noncurrent	279,129 shares	-	0.97%	-	-
Tien Lung Investment Co., Ltd.	Stocks	Asia Pacific Microsystems, Inc.	-	Financial assets measured at fair value through other comprehensive income- noncurrent	62,044 shares	388	0.13%	388	-
Tien Lung Investment Co., Ltd.	Stocks	EVERMORE TECHNOLOGY, INC.	-	Financial assets measured at fair value through other comprehensive income- noncurrent	195,192 shares	-	2.22%	-	-
				Subtotal		$2,722		$2,722
The Company	Stocks	GOODWAY MACHINE CORP.	-	Financial assets measured at fair value through other comprehensive income- noncurrent	50,567 shares	3,439	0.05%	3,439	-
The Company	Stocks	Partner Tech Corp.	-	Financial assets measured at fair value through other comprehensive income- noncurrent	574,151 shares	13,917	0.76%	13,917	-
The Company	Stocks	Connection Technology Systems Inc.	-	Financial assets measured at fair value through other comprehensive income- noncurrent	4,481,726 shares	87,394	14.10%	87,394	-
The Company	Stocks	Asia Pacific Microsystems, Inc.	-	Financial assets measured at fair value through other comprehensive income- noncurrent	1,208,872 shares	7,670	2.57%	7,670	-
The Company	Stocks	EVERMORE TECHNOLOGY, INC.	-	Financial assets measured at fair value through other comprehensive income- noncurrent	457,921 shares	-	5.20%	-	-
The Company	Stocks	SysJust Co., Ltd.	-	Financial assets measured at fair value through other comprehensive income- noncurrent	221,015 shares	28,018	0.84%	28,018	-
The Company	Stocks	AESOPOWER, INC.	-	Financial assets measured at fair value through other comprehensive income- noncurrent	2,505,643 shares	4,172	9.64%	4,172	-
The Company	Stocks	Hannlync Technologies Inc.	-	Financial assets measured at fair value through other comprehensive income- noncurrent	700,000 shares	-	0.42%	-	-
The Company	Stocks	Silver PAC Inc.	-	Financial assets measured at fair value through other comprehensive income- noncurrent	1,809,609 shares	-	-	-	-
The Company	Stocks	Terasilic Co., Ltd.	-	Financial assets measured at fair value through other comprehensive income- noncurrent	535,523 shares	794	1.90%	794	-
The Company	Stocks	Phoenix 3 Venture Capital Co., Ltd.	-	Financial assets measured at fair value through other comprehensive income- noncurrent	2,000,000 shares	18,939	8.70%	18,939	-
The Company	Stocks	LIEN SHEN ELECTRONICS CORP.	-	Financial assets measured at fair value through other comprehensive income- noncurrent	500,000 shares	5,040	14.29%	5,040	-
The Company	Stocks	GaN Power Technology Co., Ltd.	-	Financial assets measured at fair value through other comprehensive income- noncurrent	3,000,000 shares	12,414	6.20%	12,414	-
The Company	Stocks	AMIT System Service Ltd.	-	Financial assets measured at fair value through other comprehensive income- noncurrent	301,036 shares	-	11.00%	-	-
The Company	Stocks	UEC System Solutions Corporation	-	Financial assets measured at fair value through other comprehensive income- noncurrent	1,640,000 shares	3,209	11.08%	3,209	-
The Company	Stocks	Millilab Co., Ltd.	-	Financial assets measured at fair value through other comprehensive income- noncurrent	1,000,000 shares	2,491	13.97%	2,491	-
				Subtotal		$187,497		$187,497

Note 1 ： Not required if the issuer of securities is not a related party.

Attachment 4: Related party transactions for purchases and sales exceeding the lower of NT$100 million or 20 percent of the capital stock

Related-party	Counter-party	Relationship	Intercompany Transactions	Intercompany Transactions	Intercompany Transactions	Intercompany Transactions	Details of non-arm's length transaction	Details of non-arm's length transaction	Notes and accounts receivable (payable)	Notes and accounts receivable (payable)
			Purchases (Sales)	Amount	Percentage of total consolidated purchase (Sales)	Credit period	Unit price	Credit period	Carrying amount	Percentage of total consolidated receivables (payable)
The Company	JA-LONG TECHNOLOGY CO., LTD.(Shenzhen)	Subsidiary	Purchase	$1,459,597	60.46%	Collected over a specific period	$ -	-	$ -	-%
The Company	JA-LONG TECHNOLOGY CO., LTD.(Shenzhen)	Subsidiary	Sales	565,606	15.23%	Collected over a specific period	-	-	417,132	40.84%
JA-LONG TECHNOLOGY CO., LTD.(Shenzhen)	The Company	Subsidiary	Sales	1,459,597	96.05%	Collected over a specific period	-	-	-	-%
JA-LONG TECHNOLOGY CO., LTD.(Shenzhen)	The Company	Subsidiary	Purchase	565,606	59.05%	Collected over a specific period	-	-	(417,132)	-73.24%

Attachment 5: Receivables from related parties with accounts exceeding the lower of NT$100 million or 20 percent of the capital stock

Related-party	Counter-party	Relationship	Amount	Average collection turnover	Overdue account receivable-related parties	Overdue account receivable-related parties	Collection in subsequent period	Allowance for doubtful debts
					Amount	Processingmethod
The Company	JA-LONG TECHNOLOGY CO., LTD.(Shenzhen)	Subsidiary	Accounts receivable $417,132	1.33	$ -	-	$ -	$ -

Attachment 6: The business relationship, significant transactions and amounts between parent company and subsidiaries

No. (Note 1)	Related-party	Counterparty	Relationship with the Company (Note 2)	Transactions	Transactions	Transactions	Transactions
				Account	Amount	Terms	Percentage of consolidated operating revenues or consolidated total assets(Note3)
0	The Company	UMEC VIETNAM Co., Ltd.	1	Processingfees	$141,002	(Note 4)	3.80%
0	The Company	UMEC VIETNAM Co., Ltd.	1	Prepayment	139,477	(Note 4)	3.41%
0	The Company	JA-LONG TECHNOLOGY CO., LTD.(Shenzhen)	1	Sales	565,606	(Note 4)	15.23%
0	The Company	JA-LONG TECHNOLOGY CO., LTD.(Shenzhen)	1	Accounts receivable	417,132	(Note 4)	10.21%
0	The Company	JA-LONG TECHNOLOGY CO., LTD.(Shenzhen)	1	Purchase	1,459,597	(Note 4)	39.30%

Note 1: The Company is coded "0".The subsidiaries are coded consecutively beginning from "1" in the order presented in the table above.

Note 2: Transactions are categorized as follows:

The holding company to subsidiary.
Subsidiary to holding company.
Subsidiary to subsidiary.

Note 3: The percentage with respect to the Company asset/liability for transactions of balance sheet items are based on each item's balance at period-end. For profit or loss items, interim cumulative balances are used as basis.

Note 4: The transaction terms include collecting payments over a specified period.

Attachment 7: Names, locations, main businesses and products, original investment amount, net income (loss) of investee company and investment income (loss) recognized: (Excluding investment in Mainland China)

Investor	Investee company	Address	Main businesses and products	Initial Investment	Initial Investment	Investment as of 31 December 2024	Investment as of 31 December 2024	Investment as of 31 December 2024	Net income (loss) of investee company	Investment income (loss) recognized	Note
				Ending balance	Beginning balance	Number of shares (shares)	Percentage of ownership (%)	Book value
The Company	UMEC (B.V.I.)	Vistra Corporate Services Centre, Wickhams Cay II, Road Town Tortola ,VG1110 ,BRITISH VIRGIN ISLANDS	Investment and holding company	$753,401	$753,401	22,961,020	100.00%	$242,853	$(107,502)	$(108,532)	(Note1)
The Company	Tien Lung Investment Co., Ltd.	1F., No. 37, Sec. 2, Meicun Rd., South Dist., Taichung City, Taiwan (R.O.C.)	Investment company	88,000	88,000	8,800,000	100.00%	60,996	5,220	5,220
The Company	ARadTek	8F-2, No.487, Dayou Rd., Taoyuan Dist., Taoyuan City, Taiwn (R.O.C.)	Manufacturing and sales of electronic parts and components	42,559	42,559	4,255,894	84.78%	4,825	(8,410)	(7,130)
The Company	PT UMEC Green Tech Indonesia	Ketapang Business Centre,Jl. Kh. Zainul Arifin No 20 Blok A16 Jakarta Barat, Indonesia 11140	Manufacturing and sales of electronic parts and components	3,757	3,757	-	60.00%	-	-	-
				USD 114,600	USD 114,600
The Company	UMEC (JAPAN)	No. 5-3, Osaki 3-chome, Shinagawa- ku, Tokyo	Promotion and sales of switch mode power supply, transformer and manufacturing and assembly of circuit board	1,368	1,368	-	100.00%	1,152	(37)	(37)
The Company	UMEC (USA)	1921 Ellen St #7 Sturgis,SD 57785,USA	R&D and sales of electromagnetic parts	43,013	43,013	499,999	99.99%	39,399	(6,555)	(6,555)
The Company	UMEC VIETNAM Co., Ltd.	B(B1)lot, Quang Chau Industrial Park, Bac Giang Province, Vietnam	Manufacturing and sales of switch mode power supply, transformer and circuit board	329,574	95,831	-	100.00%	112,364	(20,182)	(21,204)
The Company	Lightel Corporation	Oleander Way, 802 West Bay Road, P.O. Box 32052, Grand Cayman KY1-1208, Cayman Islands	Investment and holding company	57,306	57,306	5,082,027	23.55%	78,745	73,031	17,624
UMEC (B.V.I.)	UMEC (H.K.)	Unit B, 6/F, Levy Building, 61-63 Jingye Street, Kwun Tong, Kowloon, Hong Kong	Established in Hongkong to handle export shipping affairs of China.	7,523	7,523	1,782,000	100.00%	13,852	1,031	1,031
				HKD 1,782,000	HKD 1,782,000
UMEC (B.V.I.)	Global	P.O.Box 31119 Grand Pavilion, Hibiscus Way, 802 West Bay Road, Grand Cayman,KY1-1205 Cayman	Investment and holding company	761,102	761,102	23,214,961	100.00%	212,229	(110,090)	(110,090)
				23,214,961 USD	23,214,961 USD
Global	UMEC VIETNAM Co., Ltd.	B(B1)lot, Quang Chau Industrial Park, Bac Giang Province, Vietnam	Manufacturing and sales of switch mode power supply, transformer and circuit board	-	295,182	-	0.00%	-	(20,182)	1,023
				- USD	9,003,574 USD
Tien Lung Investment Co., Ltd.	ARadTek	8F-2, No.487, Dayou Rd., Taoyuan Dist., Taoyuan City, Taiwn (R.O.C.)	Manufacturing and sales of electronic parts and components	5,420	5,420	541,945	10.80%	615	(8,410)	(908)
Tien Lung Investment Co., Ltd.	PORIS ELECTRONICS CO., LTD.	11 F., No. 866-7, Zhongzheng Rd., Zhonghe Dist., New Taipei City, Taiwan (R.O.C.)	Electronic information supply services industry	10,400	10,400	1,201,637	33.55%	6,249	717	240

Note1 ： The investment income recognized in the current period includes the investment gains or losses generated by the investee company due to favorable or unfavorable market conditions.

100

Attachment 8: Investment in Mainland China

Investee company	Main Businesses and Products	Total Amount of Paid-in Capital	Method of Investment	Accumulated Outflow of Investment from Taiwan as of 1 January 2024	Investment Flows	Investment Flows	Accumulated Outflow of Investment from Taiwan as of 31 December 2024	Net income (loss) of investee company	Percentage of Ownership	Investment income (loss) recognized	Carrying Value as of 31 December 2024	Accumulated Inward Remittance of Earnings as of 31 December 2024
					Outflow	Inflow
JA-LONG TECHNOLOGY CO., LTD. (Shenzhen)	Assembly, manufacturing and sales of switch mode power supply, transformer and circuit board	$578,655	Establishing a company through investment in a third jurisdiction and subsequently reinvesting in a company in mainland China.	$573,738	$ -	$ -	$573,738	$(56,585)	100.00%	$(56,585)	$216,956	$ -
		USD 17,650,000		USD 17,500,000			USD 17,500,000
UMEC Anhui Company Limited	Assembly, manufacturing and sales of switch mode power supply, transformer and circuit board	196,710	Establishing a company through investment in a third jurisdiction and subsequently reinvesting in a company in mainland China.	196,710	-	-	196,710	-	-%	-	(Note 4)	-
		USD 6,000,000		USD 6,000,000			USD 6,000,000
UMEC Renlong Electronics Co., Ltd. (Meizhou)	Manufacturing and sales of switch mode power supply and transformer	19,671	Establishing a company through investment in a third jurisdiction and subsequently reinvesting in a company in mainland China.	19,671	-	-	19,671	(30,197)	100.00%	(30,197)	(58,155)	-
		USD 600,000		USD 600,000			USD 600,000
UMEC Fulong Electronics Co., Ltd. (Longyan)	Manufacturing and sales of switch mode power supply and transformer	98,355	Establishing a company through investment in a third jurisdiction and subsequently reinvesting in a company in mainland China.	98,355	-	-	98,355	(24,273)	100.00%	(24,273)	33,213	-
		USD 3,000,000		USD 3,000,000			USD 3,000,000

Accumulated Investment in Main as of 31 December 202		land China 4	Investment Amounts Authorized by Investment Commission, MOEA (Note1)		Upper Limit on I		nvestment (Note2)
$888,474			$973,977		$1,169,500

Note 1: The Investment Commission of the Ministry of Economic Affairs has approved an investment amount of USD 29,708 thousand.

Note 2: According to Ministry of Economic Affairs, R.O.C., the Company's investment in Mainland China is not limited to 60% of net worth or consolidated net worth specified by the Investment Commission.

Note 3: The aforementioned amount in foreign currency will be converted into New Taiwan Dollars using the exchange rate on the balance sheet date.

Note 4: The company obtained the approval for deregistration from the Administration for Industry and Commerce of Ma'anshan City on November 16, 2018.

The liquidation process was completed on January 17, 2019, and the company received the notification letter of filing for deregistration from the Investment Commission of the Ministry of Economic Affairs on June 9, 2022.

101

UNIVERSAL MICROELECTRONICS CO., LTD.

THE CONTENTS OF STATEMENTS OF MAJOR ACCOUNTING ITEMS

FOR THE YEAR ENDED 31 DECEMBER 2024

ITEM	INDEX
STATEMENT OF CASH AND CASH EQUIVALENTS	1
STATEMENT OF FINANCIAL ASSETS MEASURED AT AMORTISED COST	2
STATEMENT OF ACCOUNTS RECEIVABLE	3
STATEMENT OF ACCOUNTS RECEIVABLE-RELATED PARTIES	Note 7(3)
STATEMENT OF OTHER RECEIVABLES-RELATED PARTIES	Note 7(4)
STATEMENT OF CURRENT INVENTORIES	4
STATEMENT OF FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME,NONCURRENT	5
STATEMENT OF CHANGES IN INVESTMENTS ACCOUNTED FOR UNDER THE EQUITY METHOD	6
STATEMENT OF CHANGES IN PROPERTY,PLANT AND EQUIPMENT	Note 6(9)
STATEMENT OF CURRENT BORROWINGS	7
STATEMENT OF ACCOUNTS PAYABLE	8
STATEMENT OF LONG-TERM BORROWINGS	Note 6(14)
STATEMENT OF NET OPERATING REVENUES	9
STATEMENT OF OPERATING COSTS	10
STATEMENT OF MANUFACTURING EXPENSES	11
STATEMENT OF OPERATING EXPENSES	12
STATEMENT OF NON-OPERATING INCOME AND EXPENSES	Note 6(21)
STATEMENT OF EMPLOYEE BENEFITS, DEPRECIATION AND AMORTIZATION	Note 6 (20)

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UNIVERSAL MICROELECTRONICS CO., LTD.

1. STATEMENT OF CASH AND CASH EQUIVALENTS

31 DECEMBER 2024

(In Thousands of New Taiwan Dollars)

Item	Description	Amount		Note
		Subtotal	Total
Cash on hand Cash in banks Total	Demand deposits`－`NTD Demand deposits`－`foreign currency Checking account deposits Time deposits	Mainly includes: USD 8,321 thousand EUR 318 thousand	$538 145,148 286,862 479 82,785 $515,812

UNIVERSAL MICROELECTRONICS CO., LTD.

STATEMENT OF FINANCIAL ASSETS MEASURED AT AMORTISED COST

31 DECEMBER 2024

(In Thousands of New Taiwan Dollars)

Item	Description	Amount	Note
Cash in banks	Time deposits	$62,785

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UNIVERSAL MICROELECTRONICS CO., LTD.

3. STATEMENT OF ACCOUNTS RECEIVABLE

31 DECEMBER 2024

(In Thousands of New Taiwan Dollars)

Client Name	Description	Amount	Note
Third parties: Client A Client B Client C Client D Client E Others (Note) Subtotal Less: loss allowance Accounts receivable, net		$104,156 91,172 43,929 34,032 33,331 293,467 600,087 - $600,087

(Note) The amount of individual client in others does not exceed 5% of the account balance.

UNIVERSAL MICROELECTRONICS CO., LTD.

4. STATEMENT OF CURRENT INVENTORIES

31 DECEMBER 2024

(In Thousands of New Taiwan Dollars)

Item	Description	Cost	Net Realizable Value	Note
Raw materials Supplies & parts Semi-finished products Work in progress Finished goods Total		$547,864 24,787 16,101 72,868 166,610 $828,230	$579,815 25,344 16,920 74,116 210,537 $906,732	Please refer to Note 4 (10) for more details on net realizable value

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UNIVERSAL MICROELECTRONICS CO., LTD.

5. STATEMENT OF FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME, NONCURRENT

FOR THE YEAR ENDED 31 DECEMBER 2024

(In Thousands of New Taiwan Dollars)

Name of Securities	As of 1 January2024	As of 1 January2024	Additions	Additions	Decrease	Decrease	Gains (losses) on valuation	As of 31 December 2024	As of 31 December 2024	Accumulated impairment	Collateral
	Shares	Fair Value	Shares	Amount	Shares	Amount		Shares	Fair Value
Listed companies stocks: GOODWAY MACHINE CORP. Connection Technology Systems Inc. Subtotal Emerging companies stocks: SysJust Co., Ltd. Partner Tech Corp. Subtotal Unlisted companies stocks: Asia Pacific Microsystems, Inc. EVERMORE TECHNOLOGY, INC. AESOPOWER, INC. Hannlync Technologies Inc. Silver PAC Inc. Terasilic Co., Ltd. Phoenix 3 Venture Capital Co., Ltd. LIEN SHEN ELECTRONICS CORP. GaN Power Technology Co., Ltd. AMIT System Service Ltd. UEC System Solutions Corporation Millilab Co., Ltd. Subtotal Total	50,567 4,481,726 221,015 649,151 1,208,872 457,921 2,505,643 700,000 1,809,609 535,523 2,000,000 500,000 3,000,000 301,036 1,640,000 -	$3,413 110,699	- - - - - - - - - - - - - - - 1,000,000	$ - - - - - - - - - - - - - - - 10,000	- - - (75,000) - - - - - - - - - - - -	$ - - - (443) - - - - - - - - - - - -	$26 (23,305)	50,567 4,481,726 221,015 574,151 1,208,872 457,921 2,505,643 700,000 1,809,609 535,523 2,000,000 500,000 3,000,000 301,036 1,640,000 1,000,000	$3,439 87,394	N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A	None None None None None None None None None None None None None None None None
		114,112					(23,279)		90,833
		17,858 17,430					10,160 (3,070)		28,018 13,917
		35,288					7,090		41,935
		6,979 - 3,158 - - 1,559 15,856 5,068 13,992 1,407 4,230 -					691 - 1,014 - - (765) 3,083 (28) (1,578) (1,407) (1,021) (7,509)		7,670 - 4,172 - - 794 18,939 5,040 12,414 - 3,209 2,491
		52,249		10,000		(443)	(7,520)		54,729
		$201,649		$10,000		$(443)	(23,709)		$187,497

Note `：`

In this period, 75,000 shares of Partner Technology Co., Ltd. were sold for a total of NT$1,832 thousand.
In this period, 1,000,000 shares of Millilab Co., Ltd. were issued for a total of NT$10,000 thousand.

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UNIVERSAL MICROELECTRONICS CO., LTD.

6. STATEMENT OF CHANGES IN INVESTMENTS ACCOUNTED FOR UNDER THE EQUITY METHOD

FOR THE YEAR ENDED 31 DECEMBER 2024

(In Thousands of New Taiwan Dollars)

Name	As of 1 January2024	As of 1 January2024	Additions	Additions	Decrease	Decrease	Changes in transaction volume for inflows and outflows	Investment income (loss)	Unrealized gains/losses on financial assets.	Exchange differences	Changes in accordance with the percentage of shareholding	As of 31 December 2024	As of 31 December 2024	As of 31 December 2024	Collateral
	Shares	Amount	Shares	Amount	Shares	Amount						Shares	%	Amount
UMEC Investment Co., Ltd. PT UMEC Green Tech Indonesia Tien Lung Investment Co., Ltd. Advanced Radar Technology Co., Ltd. UMEC JAPAN CO., LTD. UMEC USA, Inc. UMEC VIETNAM Co., Ltd. Lightel Corporation Total	22,961,020 114,600 8,800,000 4,255,894 - 499,999 - 5,082,027	$200,522 - 58,313 11,955 1,229 43,215 31,481 61,258	- - - - - - - -	$ - - - - - - 233,742 (Note 1) -	- - - - - - - -	$ - - (2,589) (Note 3) - - - - -	$(1,031) - - - - (37) - -	$(107,502) - 5,220 (7,130) (37) (6,554) (21,204) 17,624	$ - - 52 - - - - (130)	40,577 - - - (40) 2,775 (21,368) -	$110,287 - - - - - (110,287) (7) (Note 2)	22,961,020 114,600 8,800,000 4,255,894 - 499,999 - 5,082,027	100% 60% 100% 84.78% 100% 99.99% 100% 23.55%	$242,853 - 60,996 4,825 1,152 39,399 112,364 78,745	None None None None None None None None
		$407,973		$233,742		$(2,589)	$(1,068)	$(119,583)	$(78)	$21,944	$(7)			$540,336

Note `：`

In the fourth quarter of the year ended 31 December 2022, the company engaged in debt-to-equity swap for capital increase in UMEC VIETNAM Co., Ltd. In the second quarter of the year ended 31 December 2023, the company obtained the business license issued by the Vietnamese government and completed the capital increase, acquiring a 25.73% stake.In the first quarter of the year ended 31 December 2024, the investment structure was adjusted, transferring 74.27% of the shares held by Global Development Co. Ltd to be directly held by the company.
In this period, Lightel Corporation increased its capital. However, due to our company not subscribing according to the shareholding ratio, our shareholding ratio decreased from 23.88% to 23.55%.
In this period, Tien Lung Investment Co., Ltd. repatriated earnings totaling NT$2,589 thousand

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UNIVERSAL MICROELECTRONICS CO., LTD.

7. STATEMENT OF CURRENT BORROWINGS

31 DECEMBER 2024

			(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)
Type	Lending bank	Balance, End of Year	Contract Period	Financing limit	Collateral	Note
Credit loan	First Commercial Bank`－`TaichungBranch	$70,000	2024/11-2025/05	$70,000	None

As of 31 December Interest rates applied 2024 Unsecured bank loans 1.88%

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UNIVERSAL MICROELECTRONICS CO., LTD.

8. STATEMENT OF ACCOUNTS PAYABLE

31 DECEMBER 2024

(In Thousands of New Taiwan Dollars)

Vendor Name	Description		Amount	Note
Vendor A Others (Note)			$12,849 249,809 $262,658

(Note)The amount of individual client in others does not exceed 5% of the account balance.

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UNIVERSAL MICROELECTRONICS CO., LTD.

STATEMENT OF NET OPERATING REVENUES

FOR THE YEAR ENDED 31 DECEMBER 2024

(In Thousands of New Taiwan Dollars)

Item	Amount	Note
Magnetic Component & Power product Assembly of circuit board Optical cables Others Net operating revenues	$2,237,831 1,448,890 11,141 16,569 $3,714,431

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UNIVERSAL MICROELECTRONICS CO., LTD.

10. STATEMENT OF OPERATING COSTS

FOR THE YEAR ENDED 31 DECEMBER 2024

(In Thousands of New Taiwan Dollars)

Item Amount

Direct raw material: Raw material, beginning of year
Add：Raw material purchased
Transferred from work in progress
Less: Raw material, end of year
Cost of raw material sold
Updated standard cost
Transferred to expenses
Direct raw material used
Supplies & parts: Supplies & parts , beginning of year
Add：Supplies & parts purchased
Updated standard cost
Less: Supplies & parts, end of year
Cost of supplies & parts sold
Transferred to expenses
Supplies & parts used
Direct labor
Manufacturing expenses (Refer to 11)
Manufacturing cost
Add: Semi-finished goods, beginning of year
Semi-finished goods purchased
Transferred from work in progress
Transferred from expense
Less: Semi-finished goods, end of year
Cost of semi-finished goods sold
Updated standard cost
Semi-finished goods used
Add: Work in process, beginning of year
Transferred from finished goods
Reprocessing cost
Less: Work in process, end of year
Transferred to semi-finished goods
Transferred to raw material
Updated standard cost
Transferred to expenses $890,930
984,529
9,994
(579,633)
(735,144)
(3,585)
(564)
566,527
36,639
58,550
650
(25,362)
(12,853)
(19,512)
38,112
68,887
223,536
897,062
28,129
3,344
149,419
39
(17,129)
(10,360)
(417)
153,025
80,219
180,986
28,419
(73,869)
(149,419)
(9,994)
(734)
(4,034)

110

Item

Amount

Cost of finished goods
Add: Finished goods, beginning of year
Finished goods purchased
Less: Finished goods, end of year
Updated standard cost
Transferred to work in process
Transferred to expenses
Subtotal of cost of goods sold
Other operating costs
Cost of raw material sold
Cost of supplies & parts sold
Cost of semi-finished goods sold
Loss on valuation
Updated standard cost
Purchase price variance
Reprocessing cost
Direct labor cost variance
Manufacturing expense variance
Others
Subtotal
OperatingCosts

256,313
1,208,334
(174,574)
(2,325)
(180,986)
(7,699)
2,200,724
735,144
12,853
10,360
5,117
6,410
159,359
(28,419)
67,209
145,530
(3,389)
1,110,174
$3,310,898

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UNIVERSAL MICROELECTRONICS CO., LTD.

STATEMENT OF MANUFACTURING EXPENSES

FOR THE YEAR ENDED 31 DECEMBER 2024

(In Thousands of New Taiwan Dollars)

		(In Thousands of New Taiwan Dollars)
Item		Amount
Indirect labor Processing costs Depreciation Consumption of materials and tools Utilities Expenses Other expense Subtotal Manufacturing expense variance Total		$92,247 145,018 47,045 26,788 19,984 37,984 369,066 (145,530) $223,536

(Note) The amount of individual client in others does not exceed 5% of the account balance.

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UNIVERSAL MICROELECTRONICS CO., LTD.

STATEMENT OF OPERATING EXPENSES

FOR THE YEAR ENDED 31 DECEMBER 2024

(In Thousands of New Taiwan Dollars)

Item	Selling Expenses	Administrative Expenses	Research and Development Expenses	Expected credit gain	Total
Wages and salaries Insurance expense Depreciation Amortizations Commissions expense Import/export expense Professional service fees Instrument calibration fees R&D material expenses Others Total	$31,477 4,614 781 - 14,079 6,073 - - - 12,535 $69,559	$78,713 - 11,018 7,916 - - 14,726 - - 37,326 $149,699	$129,120 12,658 12,058 - - - - 14,142 16,396 30,061 $214,435	$ - - - - - - - - - (50) $(50)	$239,310 17,272 23,857 7,916 14,079 6,073 14,726 14,142 16,396 79,872 $433,643

(Note) The amount of individual client in others does not exceed 5% of the account balance.

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AI assistant

UMEC — Annual Report 2024

52064_rns_2024-11-13_1f7cee35-ec01-4041-a48f-2d8c959031e1.pdf

Independent Auditors’ Report Translated from Chinese

Opinion

Basis for Opinion

Key Audit Matters

1. Impairment of accounts receivable

2. Valuation for inventories (Including inventories of the subsidiaries under the equity method)

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

Auditors’ Responsibilities for the Audit of the Parent Company Only Financial Statements

Notice to Readers

English Translation of Parent Company Only Financial Statements Originally Issued in Chinese UNIVERSAL MICROELECTRONICS CO., LTD.

PARENT COMPANY ONLY BALANCE SHEETS

31 December 2024 and 2023

Total assets

PARENT COMPANY ONLY BALANCE SHEETS

31 December 2024 and 2023

English Translation of Parent Company Only Financial Statements Originally Issued in Chinese UNIVERSAL MICROELECTRONICS CO., LTD.

PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME

English Translation of Parent Company Only Financial Statements Originally Issued in Chinese UNIVERSAL MICROELECTRONICS CO., LTD.

English Translation of Parent Company Only Financial Statements Originally Issued in Chinese UNIVERSAL MICROELECTRONICS CO., LTD.

English Translation of Parent Company Only Financial Statements Originally Issued in Chinese UNIVERSAL MICROELECTRONICS CO., LTD.

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS(Continued) For the years ended 31 December 2024 and 2023

UNIVERSAL MICROELECTRONICS CO., LTD. NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS

1. History and organization

2. Date and procedures of authorization of financial statements for issue

3. Newly issued or revised standards and interpretations

UNIVERSAL MICROELECTRONICS CO., LTD.

(b) IFRS 17 “Insurance Contracts”

4. Summary of significant accounting policies

(2) Basis of Preparation

UNIVERSAL MICROELECTRONICS CO., LTD.

Financial assets measured at amortized cost.

UNIVERSAL MICROELECTRONICS CO., LTD.

Financial asset measured at fair value through profit or loss.

(b) Impairment of financial assets

(c) Derecognition of financial assets

(d) Financial liabilities and equity

Classification between liabilities or equity

Equity instruments

Financial liabilities

Financial liabilities at fair value through profit or loss

Financial liabilities at amortized cost

Derecognition of financial liabilities

(e) Offsetting of financial instruments

(8) Derivative instruments

(10) Inventories

UNIVERSAL MICROELECTRONICS CO., LTD.

(11) Investments accounted for under the equity method

UNIVERSAL MICROELECTRONICS CO., LTD.

(12) Property, plant and equipment

(13) Investment property

(14) Leases

Company as a lessee

UNIVERSAL MICROELECTRONICS CO., LTD.

Company as a lessor

(15) Intangible Assets

(16) Impairment of non-financial assets

(17) Provisions

(18) Treasury shares

(19) Revenue recognition

Sale of goods

(20) Borrowing costs

(21) Government grants

(22) Post-employment benefits

(23) Income taxes

UNIVERSAL MICROELECTRONICS CO., LTD.

Current income tax

Deferred tax

5. Significant accounting judgments, estimates and assumptions

Estimates and assumptions

(3) Pension benefits

(4) Income tax

(5) Trade receivables – estimation of impairment loss

(6) Inventories

6. Contents of significant accounts

UNIVERSAL MICROELECTRONICS CO., LTD.

(4) Accounts receivables and accounts receivable - related parties

(5) Inventories

UMEC Annual Report 2024