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UNIFLEX Audit Report / Information 2024

Oct 29, 2024

52315_rns_2024-10-29_5b34b320-9ee9-407e-b7f3-5018cb77b3b6.pdf

Audit Report / Information

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UNIFLEX TECHNOLOGY INC. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND

INDEPENDENT AUDITORS’ REPORT

DECEMBER 31, 2024 AND 2023

For the convenience of readers and for information purpose only, the auditors’ report and the accompanying financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. In the event of any discrepancy between the English version and the original Chinese version or any differences in the interpretation of the two versions, the Chinese-language auditors’ report and financial statements shall prevail.

~1~

UNIFLEX TECHNOLOGY INC.AND SUBSIDIARIES

DECEMBER 31, 2024 AND 2023 CONSOLIDATED FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS’ REPORT

TABLE OF CONTENTS

Contents Page
1.
Cover Page
2.
Table of Contents
3.
Declaration of Consolidated Financial Statements of Affiliated Enterprises
4.
Independent Auditors’ Report
5.
Consolidated Balance Sheets
6.
Consolidated Statements of Comprehensive Income
7.
Consolidated Statements of Changes in Equity
8.
Consolidated Statements of Cash Flows
9.
Notes to the Consolidated Financial Statements
(1)
History and Organization
(2)
The Date of Authorisation for Issuance of the Financial Statements
and Procedures for Authorisation
(3)
Application of New Standards, Amendments And Interpretations
(4)
Summary of Material Accounting Policies
(5)
Critical Accounting Judgements, Estimates and Key Sources of
Assumption Uncertainty		 1
2 ~ 3
4
5 ~ 11
12 ~ 13
14
15
16 ~ 17
18 ~ 66
18
18
18 ~ 19
20 ~ 30
30 ~ 31

~2~

Contents Page
(6)
Details of Significant Accounts
(7)
Related Party Transactions
(8)
Pledged Assets
(9)
Significant Contingent Liabilities and Unrecognised Contract
Commitments
(10) Significant Disaster Loss
(11) Significant Events after the Balance Sheet Date
(12) Others
(13) Supplementary Disclosures
(14) Operating Segment Information		 31 ~ 50
51 ~ 53
53
53
54
54
54 ~ 63
63 ~ 64
64 ~ 66

~3~

Representation Letter

In connection with the Consolidated Financial Statements of Affiliated Enterprises of Shareholders of Uniflex Technology Inc. (the “Consolidated FS of the Affiliates”), we represent to you that, the entities required to be included in the Consolidated FS of the Affiliates as of and for the year ended December 31, 2024 in accordance with the “Criteria Governing Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises” are the same as those required to be included in the Consolidated Financial Statements of Shareholders of Uniflex Technology Inc. and its subsidiaries (the “Consolidated FS of the Group”) in accordance with International Financial Reporting Standard 10. Additionally, the information required to be disclosed in the Consolidated FS of Affiliates is disclosed in the Consolidated FS of the Group. Consequently, Shareholders of Uniflex Technology Inc. does not prepare a separate set of Consolidated FS of Affiliates.

Very truly yours,

Uniflex Technology Inc.

By

Tseng Tzyy-Jang February 24, 2025

~4~

INDEPENDENT AUDITORS’ REPORT TRANSLATED FROM CHINESE

PWCR 24000292

To the Board of Directors and Shareholders of Uniflex Technology Inc.

Opinions

We have audited the accompanying consolidated balance sheets of Uniflex Technology Inc. and its subsidiaries (the “Group”) as at December 31, 2024 and 2023, and the related consolidated statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of material accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at December 31, 2024 and 2023, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the Financial Supervisory Commission.

Basis for opinion

We conducted our audits in accordance with the Regulations Governing Financial Statement Audit and Attestation Engagements of Certified Public Accountants and 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 Group in accordance with the Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

~5~

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the Group’s 2024 consolidated financial statements. These matters were addressed in the context of our audit of the consolidated financial statements as a whole and, in forming our opinion thereon, we do not provide a separate opinion on these matters.

Key audit matters for the Group’s 2024 consolidated financial statements are stated as follows:

Valuation of allowance for inventory valuation losses

Description

Refer to Note 4(13) for accounting policy on inventory valuation, Note5(2) for accounting estimates and assumption uncertainty in relation to inventory valuation, and Note 6(6) for description of allowance for inventory valuation losses. As at December 31, 2024, the Group’s inventory and allowance for valuation losses amounted to NT$352,189 thousand and NT$94,304 thousand, respectively.

The Group is primarily engaged in the manufacturing and sales of various kinds of printed circuit boards and other related products. As the inventories of such products are subject to rapid changes in science and technology and are susceptible to market price volatility, there is a high risk of inventory losses due to market value decline or obsolescence. The Group’s inventories are measured at the lower of cost and net realisable value. Inventory that is over certain age and individually identified as obsolete or damaged inventory is measured at net realisable value, which is calculated based on historical data on the inventory clearance information. Also, the Group’s measurement of net realisable value for obsolete or slow-moving inventories involves subjective judgment resulting in a high degree of estimation uncertainty and complicated calculation. Considering the Group’s inventories and the allowance for inventory valuation losses are significant to the consolidated financial statements, we considered the valuation of allowance for inventory valuation losses as a key audit matter.

~6~

How our audit addressed the matter

We performed the following audit procedures in respect of the above key audit matter:

  1. Assessed the reasonableness of policies and procedures related to the provision of allowance for inventory valuation losses based on our understanding of the Group’s operations and the characteristics of its industry, and was consistently applied in the comparative periods of financial statements.

  2. Reviewed the Group’s internal control process of inventory management and participated in the annual inventory count in order to assess the effectiveness of the classification of obsolete inventory and internal control over obsolete inventory.

  3. Verified the logical appropriateness of the inventory statement used to evaluate to confirm that the information in the statements is consistent with its policies.

  4. Verified if the market basis for measuring the net realisable value is consistent with the Group’s policies, randomly checked if the selling prices and net realisable values of individual inventories are calculated correctly, and recalculated and evaluated the reasonableness of allowance for inventory valuation losses.

Impairment assessment of property, plant and equipment

Description

Refer to Note 4(17) for accounting policy on impairment assessment of non-financial assets, Note 5(2) for accounting estimates and assumption uncertainty in relation to the impairment assessment of property, plant and equipment.

As at December 31, 2024, the Group’s property, plant and equipment amounted to NT$2,948,790 thousand, the accumulated depreciation and accumulated impairment amounted to NT$2,487,222 thousand and NT$56,857 thousand, respectively, the net amount to the Group’s property, plant and equipment was NT$404,711 thousand, constituting 22% of the consolidated total assets.

The Group applies the value-in-use model to evaluate the recoverable amount of the aforesaid property, plant and equipment. When determining the cash flows for future operations, it considered the forecasted sales growth rate by its outlook for future operations and calculated the weighted average capital cost rate as the discount rate.

~7~

Since the impairment assessment process involves subjective judgements and may lead to inappropriate accounting estimates, which is also an area where judgement must be exercised during the audit process, we identified the impairment assessment of property, plant and equipment as a key audit matter.

How our audit addressed the matter

We performed the following audit procedures in respect of the above key audit matter:

  1. Obtained the Group’s form for self-assessment on impairment of property, plant and equipment for the cash generating unit.

  2. Assessed the reasonableness of the sales growth rate used by the management in estimating the cash flows for future operations and compared it with historical data and industry trends.

  3. Verified if the weighted average capital cost rate used by the management, including assumptions such as the risk-free rate of return and risk premium, is consistent with the current situation of the Group and the industry, and re-executed and verified the calculation.

Other matter - Parent company only financial reports

We have audited and expressed an unqualified opinion with the other matter section on the parent company only financial statements of Uniflex Technology Inc. as at and for the years ended December 31, 2024 and 2023.

~8~

Responsibilities of management and those charged with governance for the consolidated financial statements

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

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

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

Auditors’ responsibilities for the audit of the consolidated financial statements

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

~9~

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

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

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

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

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

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

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

~10~

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

Chou, Hsiao-Tzu LIN, KUAN-HUNG

For and on behalf of PricewaterhouseCoopers, Taiwan February 24, 2025

------------------------------------------------------------------------------------------------------------------------------The accompanying consolidated financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles generally accepted in countries and jurisdictions other than the Republic of China. The standards, procedures and practices in the Republic of China governing the audit of such financial statements may differ from those generally accepted in countries and jurisdictions other than the Republic of China. Accordingly, the accompanying consolidated financial statements and independent auditors’ report are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic of China, and their applications in practice.

As the financial statements are the responsibility of the management, PricewaterhouseCoopers 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.

~11~

UNIFLEX TECHNOLOGY INC.AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 2024 AND 2023

(Expressed in thousands of New Taiwan dollars)

Assets Notes
6(1)
6(4) and 8
6(5)
6(5)
6(5) and 7
6(6) and 8
6(3)
6(7)(9) and 8
6(8) and 8
6(24)
6(7)
7		 December 31, 2024
AMOUNT
%
$
220,722
12
-
-
9,128
-
874,320
47
-
-
10,604
-
257,885
14
38,084
2
1,410,743
75
-
-
404,711
22
11,241
1
1,267
-
35,198
2
3,935
-
6,305
-
462,657
25
$
1,873,400
100		 December 31, 2023 December 31, 2023
AMOUNT
$
220,722
-
9,128
874,320
-
10,604
257,885
38,084
1,410,743
-
404,711
11,241
1,267
35,198
3,935
6,305
462,657
$
1,873,400		 AMOUNT
$
379,963
95,201
7,157
664,695
1,342
9,496
226,044
45,753
1,429,651
-
439,985
13,304
2,483
45,528
5,734
2,181
509,215
$
1,938,866		 %
Current assets
1100
Cash and cash equivalents
1136
Current financial assets at amortised
cost
1150
Notes receivable, net
1170
Accounts receivable, net
1180
Accounts receivable - related parties,
net
1200
Other receivables
130X
Inventories
1479
Other current assets, others
11XX
Total current Assets
Non-current assets
1517
Non-current financial assets at fair
value through other comprehensive
income
1600
Property, plant and equipment
1755
Right-of-use assets
1780
Intangible assets
1840
Deferred income tax assets
1915
Prepayments for equipment
1990
Other non-current assets, others
15XX
Total non-current assets
1XXX
Total assets		 20
5
-
34
-
1
12
2
74
-
23
1
-
2
-
-
26
100

(Continued)

~12~

UNIFLEX TECHNOLOGY INC.AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 2024 AND 2023

(Expressed in thousands of New Taiwan dollars)

Liabilities and Equity December 31, 2024
December 31, 2023
Notes
AMOUNT
%
AMOUNT
%
6(10) and 8
$
415,095
22
$
322,667
17
6(2)
-
-
-
-
396,459
21
350,025
18
7
39
-
32
-
6(11)
225,174
12
214,374
11
6(11) and 7
1,229
-
497
-
6(8) and 7
1,968
-
2,634
-
6(12) and 8
59,167
3
105,782
5
6,203
1
11,815
1
1,105,334
59
1,007,826
52
6(12) and 8
300,833
16
275,928
14
6(24)
382
-
620
-
6(8) and 7
1,005
-
2,369
-
45
-
45
-
302,265
16
278,962
14
1,407,599
75
1,286,788
66
6(15)
971,598
52
971,598
50
6(16)(17)
395
-
39,402
2
6(17)
(
440,461) (
23) (
270,986) (
14)
(
65,731) (
4) (
87,936) (
4)
465,801
25
652,078
34
9
11
$
1,873,400
100
$
1,938,866
100
Current liabilities
2100
Short-term borrowings
2120
Current financial liabilities at fair
value through profit or loss
2170
Accounts payable
2180
Accounts payable - related parties
2200
Other payables
2220
Other payables - related parties
2280
Current lease liabilities
2320
Long-term liabilities, current portion
2399
Other current liabilities, others
21XX
Total current Liabilities
Non-current liabilities
2540
Long-term borrowings
2570
Deferred income tax liabilities
2580
Non-current lease liabilities
2670
Other non-current liabilities, others
25XX
Total non-current liabilities
2XXX
Total Liabilities
Equity attributable to owners of
parent
Share capital
3110
Share capital - common stock
Capital surplus
3200
Capital surplus
Retained earnings
3350
Accumulated deficit
Other equity interest
3400
Other equity interest
3XXX
Total equity
Significant contingent liabilities and
unrecognised contract commitments
Significant events after the balance
sheet date
3X2X
Total liabilities and equity

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

~13~

UNIFLEX TECHNOLOGY INC.AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2024 AND 2023

(Expressed in thousands of New Taiwan dollars, except loss per share amount)

Items Year ended December 31
2024
2023
Notes
AMOUNT
%
AMOUNT
%
6(18) and 7
$
1,966,140
100
$
1,541,212
100
6(6)(22)(23) and 7 (
1,921,231) (
98) (
1,553,910) (
101)
44,909
2 (
12,698) (
1)
6(22)(23)
(
69,229) (
4) (
65,928) (
4)
(
127,260) (
6) (
129,385) (
8)
(
82,593) (
4) (
77,903) (
5)
217
-
1,369
-
(
278,865) (
14) (
271,847) (
17)
(
233,956) (
12) (
284,545) (
18)
6(4)(19)
6,435
1
19,196
1
6(20)
18,691
1
15,790
1
6(2)(9)(21)
23,127
1
13,161
1
7
(
17,101) (
1) (
26,544) (
2)
31,152
2
21,603
1
(
202,804) (
10) (
262,942) (
17)
6(24)
(
5,678)
- (
8,043)
-
($
208,482) (
10) ($
270,985) (
17)
$
4,546
-
$
-
-
22,073
1 (
11,671) (
1)
6(24)
(
4,414)
-
2,334
-
17,659
1 (
9,337) (
1)
$
22,205
1 ($
9,337) (
1)
($
186,277) (
9) ($
280,322) (
18)
($
208,482) (
10) ($
270,985) (
17)
($
186,277) (
9) ($
280,322) (
18)
6(25)
($
2.15) ($
4.01)
6(25)
($
2.15) ($
4.01)
4000
Operating revenue
5000
Operating costs
5900
Gross profit (loss) from operations
Operating expenses
6100
Selling expenses
6200
Administrative expenses
6300
Research and development expenses
6450
Impairment loss (impairment gain
and reversal of impairment loss)
determined in accordance with IFRS
9
6000
Total operating expenses
6900
Operating loss
Non-operating income and expenses
7100
Interest income
7010
Other income
7020
Other gains and losses
7050
Finance costs
7000
Total non-operating income and
expenses
7900
Loss before income tax
7950
Income tax expense
8200
Loss for the year
8316
Unrealised gains from investments
in equity instruments measured by
fair value through other
comprehensive income
Components of other comprehensive
income (loss) that will be reclassified
to profit or loss
8361
Financial statements translation
differences of foreign operations
8399
Income tax related to the
components of other comprehensive
income that will be reclassified to
profit or loss
8360
Components of other
comprehensive income (loss) that
will be reclassified to profit or loss
8300
Other comprehensive income (loss)
for the year
8500
Total comprehensive loss for the year
Loss, attributable to:
8610
Owners of the parent
Comprehensive loss attributable to:
8710
Owners of the parent
9750
Basic loss per share
9850
Diluted loss per share

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

~14~

UNIFLEX TECHNOLOGY INC.AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY YEARS ENDED DECEMBER 31, 2024 AND 2023

(Expressed in thousands of New Taiwan dollars)

Equity attributable to owners of the parent

Year 2023
Balance at January 1, 2023
Loss for the year
Other comprehensive loss
Total comprehensive loss
Capital reduction to offset accumulated deficits
Issuance of shares
Share-based payments
Balance at December 31, 2023
Year 2024
Balance at January 1, 2024
Loss for the year
Other comprehensive income
Total comprehensive (loss) income
Capital surplus used to offset accumulated deficits
Balance at December 31, 2024		 Notes Share capital -
common stock		 Capital Surplus Surplus Accumulated
deficit		 Other Equity Interest Other Equity Interest Total equity
Additional paid-
in capital		 Changes in
ownership
interests in
subsidiaries		 Financial
statements
translation
differences of
foreign
operations		 Unrealised gains
(losses) from
financial assets
measured at fair
value through
other
comprehensive
income
6(15)
6(15)
6(14)
6(3)
6(16)		 $ 1,561,448
-
-
-
(
889,850)
300,000
-
$
971,598
$
971,598
-
-
-
-
$
971,598		 $
-
-
-
-
-
30,000
9,007
$
39,007
$
39,007
-
-
-
(
39,007)
$
-		 $
395
-
-
-
-
-
-
$
395
$
395
-
-
-
-
$
395		 ($
889,851)
(
270,985)
-
(
270,985)
889,850
-
-
($
270,986)
($
270,986)
(
208,482)
-
(
208,482)
39,007
($
440,461)		 ($
43,841)
-
(
9,337)
(
9,337)
-
-
-
($
53,178)
($
53,178)
-
17,659
17,659
-
($
35,519)		 ($
34,758)
-
-
-
-
-
-
($
34,758)
($
34,758)
-
4,546
4,546
-
($
30,212)		 $
593,393
(
270,985)
(
9,337)
(
280,322)
-
330,000
9,007
$
652,078
$
652,078
(
208,482)
22,205
(
186,277)
-
$
465,801

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

~15~

UNIFLEX TECHNOLOGY INC.AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2024 AND 2023

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM OPERATING ACTIVITIES
Loss before tax
Adjustments
Adjustments to reconcile profit (loss)
Depreciation expense (including right-of-use
assets)
Amortisation expense
Expected credit gain
Share-based payments
Interest expense
Interest income
Gains on disposals of property, plant and
equipment
Profit from lease modification
Gains on reversal of impairment loss on non-
financial assets
Changes in operating assets and liabilities
Changes in operating assets
Notes receivable, net
Accounts receivable
Accounts receivable - related parties
Other receivables
Inventories
Other current assets, others
Changes in operating liabilities
Accounts payable
Accounts payable - related parties
Other payables
Other payables - related parties
Other current liabilities
Cash outflow generated from operations
Interest received
Interest paid
Net cash flows used in operating activities		 Year ended December 31
Notes
2024
2023
($
202,804 ) ($
262,942 )
6(7)(8)(22)
94,018
130,251
6(22)
1,467
1,945
(
217 ) (
1,369 )
6(14)
-
9,007
17,101
26,544
6(19)
(
6,435 ) (
19,196 )
6(21)
(
492 ) (
1,770 )
6(8)
-
(
30 )
6(9)(21)
-
(
762 )
(
1,971 ) (
4,107 )
(
209,426 ) (
39,031 )
1,342
245
(
1,108 ) (
3,122 )
(
31,841 ) (
51,531 )
4,344
(
1,721 )
46,434
140,547
7
32
2,599
11,813
732
485
(
5,612 )
5,953
(
291,862 ) (
58,759 )
6,435
19,196
(
16,937 ) (
25,560 )
(
302,364 ) (
65,123 )

(Continued)

~16~

UNIFLEX TECHNOLOGY INC.AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2024 AND 2023

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from disposal of financial assets at fair
value through other comprehensive income
Acquisition of financial assets at amortised cost
Proceeds from disposal of financial assets at
amortised cost
Acquisition of property, plant and equipment
Proceeds from disposal of property, plant and
equipment
Increase in prepayments for equipment
Acquisition of intangible assets
Decrease (increase) in refundable deposits
Net cash flows from (used in) investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from short-term borrowings
Repayments of short-term borrowings
Proceeds from long-term borrowings
Repayments of long-term borrowings
Proceeds from issuing shares
Payments of lease liabilities
Net cash flows from financing activities
Effect of change in exchange rates
Net (decrease) increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year		 Year ended December 31
Notes
2024
2023
$
3,169
$
-
6(4)
-
(
95,201 )
6(4)
95,201
-
6(26)
(
39,823 ) (
27,031 )
492
2,532
(
3,936 ) (
18,749 )
(
161 )
-
578
(
476 )
55,520
(
138,925 )
6(27)
515,338
722,323
6(27)
(
430,748 ) (
699,069 )
6(27)
100,000
200,000
6(27)
(
121,710 ) (
248,648 )
6(15)
-
330,000
6(27)
(
2,873 ) (
3,866 )
60,007
300,740
27,596
10,358
(
159,241 )
107,050
379,963
272,913
$
220,722
$
379,963

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

~17~

UNIFLEX TECHNOLOGY INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2024 AND 2023

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

1. History and Organization

Uniflex Technology Inc. (the “Company”) and its subsidiaries (collectively referred herein as the “Group”) were incorporated as a Company limited by shares under the provisions of the Group Act of the Republic of China (R.O.C.) on November 19, 1990. The Company is primarily engaged in the manufacturing, processing, and sales of various printed circuit boards and electronic components. On August 19, 1999, the Company merged with Qiaosheng Industrial Co., Ltd.; on June 30, 2006, the Company merged with Shengtai Technology Co., Ltd. and Uniflex Dasheng Electronics Co., Ltd.; on June 30, 2014, the Company merged with Yaan Industrial Co., Ltd., after which the Company operates as a surviving Company. The Company’s ordinary share was listed on the Taiwan Stock Exchange on December 15, 2015.

  1. The Date of Authorisation for Issuance of the Financial Statements and Procedures for Authorisation

These consolidated financial statements were authorized for issuance by the Board of Directors on February 24, 2025.

3. Application of New Standards, Amendments And Interpretations

(1) Effect of the adoption of new issuances of or amendments to International Financial Reporting Standards (“IFRS[®] ”) Accounting Standards that came into effect as endorsed by the Financial Supervisory Commission (“FSC”)

New standards, interpretations and amendments endorsed by the FSC and became effective from 2024 are as follows:

2024 are as follows:
New Standards,InterpretationsandAmendments Effective date by
International Accounting
StandardsBoard
Amendments to IFRS 16, ‘Lease liability in a sale and leaseback’
Amendments to IAS 1, ‘Classification of liabilities as current or
non-current’
Amendments to IAS 1, ‘Non-current liabilities with covenants’
Amendments to IAS 7 and IFRS 7, ‘Supplier finance arrangements’		 January 1, 2024
January 1, 2024
January 1, 2024
January 1, 2024

The above standards and interpretations have no significant impact to the Group’s financial condition and financial performance based on the Group’s assessment.

~18~

(2) Effect of new issuances of or amendments to IFRS Accounting Standards as endorsed by the FSC

but not yet adopted by the Group

New standards, interpretations and amendments endorsed by the FSC effective from 2025 are as follows:

Effective date by International Accounting New Standards, Interpretations and Amendments Standards Board Amendments to IAS 21, ‘Lack of exchangeability’ January 1, 2025

The above standards and interpretations have no significant impact to the Group’s financial condition and financial performance based on the Group’s assessment.

(3) IFRS Accounting Standards issued by IASB but not yet endorsed by the FSC

New standards, interpretations and amendments issued by IASB but not yet included in the IFRS Accounting Standards as endorsed by the FSC are as follows:

Accounting Standards as endorsed by the FSC are as follows:
New Standards,InterpretationsandAmendments Effective date by
International Accounting
StandardsBoard
Amendments to IFRS 9 and IFRS 7, ‘Amendments to the classification
and measurement of financial instruments’
Amendments to IFRS 9 and IFRS 7, ‘Contracts referencing nature-
dependent electricity’
Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of assets
between an investor and its associate or joint venture’
IFRS 17, ‘Insurance contracts’
Amendments to IFRS 17, ‘Insurance contracts’
Amendment to IFRS 17, ‘Initial application of IFRS 17 and
IFRS 9 – comparative information’
IFRS 18, ‘Presentation and disclosure in financial statements’
IFRS 19, ‘Subsidiaries without public accountability: disclosures’
Annual Improvements to IFRS Accounting Standards－Volume 11		 January 1, 2026
January 1, 2026
To be determined by
International Accounting
Standards Board
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2027
January 1, 2027
January 1, 2026

Except for the following, the above standards and interpretations have no significant impact to the Group’s financial condition and financial performance based on the Group’s assessment. IFRS 18, ‘Presentation and disclosure in financial statements’

IFRS 18, ‘Presentation and disclosure in financial statements’ replaces IAS 1. The standard introduces a defined structure of the statement of profit or loss, disclosure requirements related to managementdefined performance measures, and enhanced principles on aggregation and disaggregation which apply to the primary financial statements and notes.

~19~

4. Summary of Material Accounting Policies

The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

(1) Compliance statement

The consolidated financial statements of the Group have been prepared in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers”, International Financial Reporting Standards, International Accounting Standards, IFRIC[®] Interpretations, and SIC[®] Interpretations that came into effect as endorsed by the FSC (collectively referred herein as the “IFRSs”).

(2) Basis of preparation

  • A. Except for the following items, the consolidated financial statements have been prepared under the historical cost convention:

  • (a) Financial assets and financial liabilities (including derivative instruments) at fair value through profit or loss.

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

  • B. The preparation of financial statements in conformity with “IFRSs” requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 5.

(3) Basis of consolidation

  • A. Basis for preparation of consolidated financial statements:

  • (a) All subsidiaries are included in the Group’s consolidated financial statements. Subsidiaries are all entities (including structured entities) controlled by the Group. The Group controls an entity when the Group is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Consolidation of subsidiaries begins from the date the Group obtains control of the subsidiaries and ceases when the Group loses control of the subsidiaries.

  • (b) Inter-Group transactions, balances and unrealised gains or losses on transactions between companies within the Group are eliminated. Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Group.

  • (c) Profit or loss and each component of other comprehensive income are attributed to the owners of the parent and to the non-controlling interests. Total comprehensive income is attributed to the owners of the parent and to the non-controlling interests even if this results in the noncontrolling interests having a deficit balance.

~20~

  • (d) Changes in a parent’s ownership interest in a subsidiary that do not result in the parent losing control of the subsidiary (transactions with non-controlling interests) are accounted for as equity transactions, i.e. transactions with owners in their capacity as owners. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognised directly in equity.

  • (e) When the Group loses control of a subsidiary, the Group remeasures any investment retained in the former subsidiary at its fair value. That fair value is regarded as the fair value on initial recognition of a financial asset or the cost on initial recognition of the associate or joint venture. Any difference between fair value and carrying amount is recognised in profit or loss. All amounts previously recognised in other comprehensive income in relation to the subsidiary are reclassified to profit or loss on the same basis as would be required if the related assets or liabilities were disposed of. That is, when the Group loses control of a subsidiary, all gains or losses previously recognised in other comprehensive income in relation to the subsidiary should be reclassified from equity to profit or loss, if such gains or losses would be reclassified to profit or loss when the related assets or liabilities are disposed of.

  • B. Subsidiaries included in the consolidated financial statements:

Name of
investor		 Name of
subsidiary		 Main business
activities		 Ownership(%) Ownership(%) Description
December 31,
2024		 December 31,
2023
The Company
The Company
Uniflex Investment
Limited		 Uniflex Investment
Limited
Uniflex Group
Limited
Uniflex Technology
(JiangSu) Limited
(Uniflex (JiangSu))		 Holding company
Holding company
Production and sales
of flexible printed
circuit board		 100.00%
100.00%
100.00%		 100.00%
100.00%
100.00%

  • C. Subsidiaries not included in the consolidated financial statements: None.

  • D. Adjustments for subsidiaries with different balance sheet dates: None.

  • E. Significant restrictions:

Cash and short-term deposits of $55,232 deposited in Mainland China are under local foreign exchange control which restricts the capital to be remitted outside the borders (except for normal dividend distribution).

F. Subsidiaries that have non-controlling interests that are material to the Group: None.

(4) Foreign currency translation

Items included in the consolidated financial statements of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). The consolidated financial statements are presented in New Taiwan dollars, which is the Company's functional and the Group’s presentation currency.

~21~

  • A. Foreign currency transactions and balances

  • (a) Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions are recognised in profit or loss in the period in which they arise.

  • (b) Monetary assets and liabilities denominated in foreign currencies at the period end are retranslated at the exchange rates prevailing at the balance sheet date. Exchange differences arising upon re-translation at the balance sheet date are recognized in profit or loss.

  • (c) Non-monetary assets and liabilities denominated in foreign currencies held at fair value through profit or loss are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognised in profit or loss. Non-monetary assets and liabilities denominated in foreign currencies held at fair value through other comprehensive income are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognised in comprehensive income. However, non-monetary assets and liabilities denominated in foreign currencies that are not measured at fair value are translated using the historical exchange rates at the dates of the initial transactions.

  • (d) All foreign exchange gains and losses are presented in the statement of comprehensive income within ‘other gains and losses’.

  • B. Translation of foreign operations

  • (a) The operating results and financial position of all the group entities that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

    • i. Assets and liabilities for each balance sheet presented are translated at the closing exchange rate at the date of that balance sheet;

    • ii. Income and expenses for each statement of comprehensive income are translated at average exchange rates of that period; and

    • iii.All resulting exchange differences are recognised in other comprehensive income.

  • (b) When the foreign operation partially disposed of or sold is a subsidiary, cumulative exchange differences that were recorded in other comprehensive income are proportionately transferred to the non-controlling interest in this foreign operation. In addition, even when the Group retains partial interest in the former foreign subsidiary after losing control of the former foreign subsidiary, such transactions should be accounted for as disposal of all interest in the foreign operation.

(5) Classification of current and non-current items

  • A. Assets that meet one of the following criteria are classified as current assets; otherwise they are classified as non-current assets:

~22~

  • (a) Assets arising from operating activities that are expected to be realised, or are intended to be sold or consumed within the normal operating cycle;

  • (b) Assets held mainly for trading purposes;

  • (c) Assets that are expected to be realised within twelve months from the balance sheet date;

  • (d) Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are to be exchanged or used to settle liabilities more than twelve months after the balance sheet date.

  • B. Liabilities that meet one of the following criteria are classified as current liabilities; otherwise they are classified as non-current liabilities:

  • (a) Liabilities that are expected to be settled within the normal operating cycle;

  • (b) Liabilities arising mainly from trading activities;

  • (c) Liabilities that are to be settled within twelve months from the balance sheet date;

  • (d) It does not have the right at the end of the reporting period to defer settlement of the liability at least twelve months after the reporting period.

(6) Cash equivalents

Cash equivalents refer to short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Time deposits that meet the definition above and are held for the purpose of meeting short-term cash commitments in operations are classified as cash equivalents.

  • (7) Financial assets at fair value through profit or loss

  • A. Financial assets at fair value through profit or loss are financial assets that are not measured at amortised cost or fair value through other comprehensive income.

  • B. On a regular way purchase or sale basis, financial assets at fair value through profit or loss are recognised and derecognised using trade date accounting.

  • C. At initial recognition, the Group measures the financial assets at fair value and recognises the transaction costs in profit or loss. The Group subsequently measures the financial assets at fair value, and recognizes the gain or loss in profit or loss.

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

  • A. Financial assets at fair value through other comprehensive income comprise equity securities which are not held for trading, and for which the Group has made an irrevocable election at initial recognition to recognise changes in fair value in other comprehensive income and debt instruments which meet all of the following criteria:

  • (a) The objective of the Group’s business model is achieved both by collecting contractual cash flows and selling financial assets; and

  • (b) The assets’ contractual cash flows represent solely payments of principal and interest.

~23~

  • B. On a regular way purchase or sale basis, financial assets at fair value through other comprehensive income are recognized and derecognized using trade date accounting.

  • C. At initial recognition, the Group measures the financial assets at fair value plus transaction costs. The Group subsequently measures the financial assets at fair value:

  • (a) The changes in fair value of equity investments that were recognized in other comprehensive income are reclassified to retained earnings and are not reclassified to profit or loss following the derecognition of the investment. The Group recognizes the dividend income when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Group and the amount of the dividend can be measured reliably.

  • (b) Except for the recognition of impairment loss, interest income and gain or loss on foreign exchange which are recognised in profit or loss, the changes in fair value of debt instruments are taken through other comprehensive income. When the financial asset is derecognised, the cumulative gain or loss previously recognised in other comprehensive income is reclassified from equity to profit or loss.

(9) Financial assets at amortised cost

  • A. Financial assets at amortised cost are those that meet all of the following criteria:

    • (a) The objective of the Group’s business model is achieved by collecting contractual cash flows.

    • (b) The assets’ contractual cash flows represent solely payments of principal and interest.

  • B. On a regular way purchase or sale basis, financial assets at amortised cost are recognised and derecognised using trade date accounting.

  • C. At initial recognition, the Group measures the financial assets at fair value plus transaction costs. Interest income from these financial assets is included in finance income using the effective interest method. A gain or loss is recognised in profit or loss when the asset is derecognised or impaired.

  • D. The Group’s time deposits which do not fall under cash equivalents are those with a short maturity period and are measured at initial investment amount as the effect of discounting is immaterial.

  • (10) Accounts and notes receivable

  • A. Accounts and notes receivable entitle the Group a legal right to receive consideration in exchange for transferred goods or rendered services.

  • B. The short-term accounts and notes receivable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

~24~

(11) Impairment of financial assets

For debt instruments measured at fair value through other comprehensive income and financial assets at amortised cost, at each reporting date, the Group recognises the impairment provision for 12 months expected credit losses if there has not been a significant increase in credit risk since initial recognition or recognises the impairment provision for the lifetime expected credit losses (ECLs) if such credit risk has increased since initial recognition after taking into consideration all reasonable and verifiable information that includes forecasts. On the other hand, for accounts receivable or contract assets that do not contain a significant financing component, the Group recognises the impairment provision for lifetime ECLs.

(12) Derecognition of financial assets

The Group derecognises a financial asset when the contractual rights to receive the cash flows from the financial asset expire.

(13) Inventories

Inventories are stated at the lower of cost and net realisable value. Cost is determined using the weighted-average method. The cost of finished goods and work in progress comprises raw materials, direct labour, other direct costs and related production overheads allocated based on normal operating capacity. It excludes borrowing costs. The item by item approach is used in applying the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated cost of completion and the estimated costs necessary to make the sale.

(14) Property, plant and equipment

  • A. Property, plant and equipment are initially recorded at cost. Borrowing costs incurred during the construction period are capitalized.

  • B. Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.

  • C. Land is not depreciated. Other property, plant and equipment apply cost model and are depreciated using the straight-line method to allocate their cost over their estimated useful lives. 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 must be depreciated separately.

~25~

  • D. The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each financial year-end. If expectations for the assets’ residual values and useful lives differ from previous estimates or the patterns of consumption of the assets’ future economic benefits embodied in the assets have changed significantly, any change is accounted for as a change in estimate under IAS 8, ‘Accounting Policies, Changes in Accounting Estimates and Errors’, from the date of the change. The estimated useful lives of property, plant and equipment are as follows:

Buildings and structures 10~50 years Machinery and equipment 2~7 years Leased assets 5~10 years Other facilities 2~5 years

  • (15) Leasing arrangements (lessee) - right-of-use assets/lease liabilities

  • A. Leases are recognised as a right-of-use asset and a corresponding lease liability at the date at which the leased asset is available for use by the Group. For short-term leases or leases of lowvalue assets, lease payments are recognised as an expense on a straight-line basis over the lease term.

  • B. Lease liabilities include the net present value of the remaining lease payments at the commencement date, discounted using the incremental borrowing interest rate. Lease payments are comprised of fixed payments, less any lease incentives receivable.

    • The Group subsequently measures the lease liability at amortised cost using the interest method and recognises interest expense over the lease term. The lease liability is remeasured and the amount of remeasurement is recognised as an adjustment to the right-of-use asset when there are changes in the lease term or lease payments and such changes do not arise from contract modifications.

  • C. At the commencement date, the right-of-use asset is stated at cost comprising the amount of the initial measurement of lease liability.

    • The right-of-use asset is measured subsequently using the cost model and is depreciated from the commencement date to the earlier of the end of the asset’s useful life or the end of the lease term. When the lease liability is remeasured, the amount of remeasurement is recognised as an adjustment to the right-of-use asset.

  • D. For lease modifications that decrease the scope of the lease, the lessee shall decrease the carrying amount of the right-of-use asset and remeasure the lease liability to reflect the partial or full termination of the lease, and recognise the difference in profit or loss.

(16) Intangible assets

Intangible assets, mainly computer software, are stated at cost and amortized on a straight-line basis over its estimated useful life of 3 to 5 years.

~26~

(17) Impairment of non-financial assets

  • The Group assesses at each balance sheet date the recoverable amounts of those assets where there is an indication that they are impaired. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell or value in use. When the circumstances or reasons for recognizing impairment loss for an asset in prior years no longer exist or diminish, the impairment loss is reversed. The increased carrying amount due to reversal should not be more than what the depreciated or amortised historical cost would have been if the impairment had not been recognised.

(18) Borrowings

  • A. Borrowings comprise long-term and short-term bank borrowings. Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in profit or loss over the period of the borrowings using the effective interest method.

  • B. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a pre-payment for liquidity services and amortised over the period of the facility to which it relates.

(19) Accounts and notes payable

  • A. Accounts payable are liabilities for purchases of raw materials, goods or services and notes payable are those resulting from operating and non-operating activities.

  • B. The short-term accounts payable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

(20) Derecognition of financial liabilities

A financial liability is derecognised when the obligation specified in the contract is either discharged or cancelled or expires.

(21) Offsetting of financial instruments

Financial assets and liabilities are offset and reported in the net amount in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously.

(22) Employee benefits

  • A. Short-term employee benefits

Short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in respect of service rendered by employees in a period and should be recognised as expense in that period when the employees render service.

~27~

B. Pensions

(a) Defined contribution plans

For defined contribution plans, the contributions are recognised as pension expense when they are due on an accrual basis. Prepaid contributions are recognised as an asset to the extent of a cash refund or a reduction in the future payments.

(b) Defined benefit plans

  - i. Net obligation under a defined benefit plan is defined as the present value of an amount of pension benefits that employees will receive on retirement for their services with the Group in current period or prior periods. The liability recognised in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets. The net defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The rate used to discount is determined by using interest rates of government bonds (at the balance sheet date) instead.

  - ii. Remeasurements arising on defined benefit plans are recognised in other comprehensive income in the period in which they arise and are recorded as retained earnings.

  - iii. Past service costs are recognised immediately in profit or loss.

  • C. Employees’ and directors’ remuneration

  • Employees’ and directors’ remuneration are recognised as expense and liability, provided that such recognition is required under legal or constructive obligation and those amounts can be reliably estimated. Any difference between the resolved amounts and the subsequently actual distributed amounts is accounted for as changes in estimates. If employee compensation is paid by shares, the Group calculates the number of shares based on the closing price at the previous day of the board meeting resolution.

- (23) Employee share based payment

For the equity-settled share-based payment arrangements, the employee services received are measured at the fair value of the equity instruments granted at the grant date, and are recognized as compensation cost over the vesting period, with a corresponding adjustment to equity. The fair value of the equity instruments granted shall reflect the impact of market vesting conditions and nonvesting conditions. Compensation cost is subject to adjustment based on the service conditions that are expected to be satisfied and the estimates of the number of equity instruments that are expected to vest under the non-market vesting conditions at each balance sheet date. Ultimately, the amount of compensation cost recognized is based on the number of equity instruments that eventually vest.

~28~

(24) Income tax

  • A. The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or items recognised directly in equity, in which cases the tax is recognised in other comprehensive income or equity.

  • B. The current income tax expense is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Group and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in accordance with applicable tax regulations. It establishes provisions where appropriate based on the amounts expected to be paid to the tax authorities. An additional tax is levied on the unappropriated retained earnings and is recorded as income tax expense in the year the stockholders resolve to retain the earnings.

  • C. Deferred tax is recognised, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated balance sheet. Deferred tax is provided on temporary differences arising on investments in subsidiaries, except where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled.

  • D. Deferred tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized. At each balance sheet date, unrecognised and recognised deferred tax assets are reassessed.

  • E. Current income tax assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. Deferred tax assets and liabilities are offset on the balance sheet when the entity has the legally enforceable right to offset current tax assets against current tax liabilities and they are levied by the same taxation authority on either the same entity or different entities that intend to settle on a net basis or realise the asset and settle the liability simultaneously.

(25) Share capital

  • A. Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or stock options are shown in equity as a deduction, net of tax, from the proceeds.

~29~

  • B. Where the Company repurchases the Company’s equity share capital that has been issued, the consideration paid, including any directly attributable incremental costs (net of income taxes) is deducted from equity attributable to the Company’s equity holders. Where such shares are subsequently reissued, the difference between their carrying amount and any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, is included in equity attributable to the Company’s equity holders.

(26) Dividends

Dividends are recorded in the Company’s financial statements in the period in which they are resolved by the Company’s shareholders. Cash dividends are recorded as liabilities; stock dividends are recorded as stock dividends to be distributed and are reclassified to ordinary shares on the effective date of new shares issuance.

(27) Revenue recognition

  • A. The Group manufactures and sells various printed circuit boards and related products of electronic components. Sales are recognised when control of the products has transferred, being when the products are delivered to the wholesaler, the wholesaler has full discretion over the channel and price to sell the products, and there is no unfulfilled obligation that could affect the wholesaler’s acceptance of the products. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the wholesaler, and either the wholesaler has accepted the products in accordance with the sales contract, or the Group has objective evidence that all criteria for acceptance have been satisfied.

  • B. A receivable is recognized when the goods are delivered as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due.

(28) Operating segments

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The Group’s chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors that makes strategic decisions.

  1. Critical Accounting Judgements, Estimates and Key Sources of Assumption Uncertainty

The preparation of these consolidated financial statements requires management to make critical judgements in applying the Group’s accounting policies and make critical assumptions and estimates concerning future events. Assumptions and estimates may differ from the actual results and are continually evaluated and adjusted based on historical experience and other factors. Such assumptions and estimates have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year. The related information is addressed below:

~30~

(1) Critical judgements in applying the Group’s accounting policies

None.

(2) Critical accounting estimates and assumptions

  • A. Evaluation of inventories

As inventories are stated at the lower of cost and net realisable value, the Group must determine the net realisable value of inventories on balance sheet date using judgements and estimates. Due to the rapid technology innovation, the Group evaluates the amounts of normal inventory consumption, obsolete inventories or inventories without market selling value on balance sheet date, and writes down the cost of inventories to the net realisable value. Such an evaluation of inventories is principally based on the demand for the products within the specified period in the future. Therefore, there might be material changes to the evaluation.

As of December 31, 2024, the carrying amount of inventories was $257,885.

  • B. Impairment assessment of tangible assets

The Group assesses impairment based on its subjective judgement and determines the separate cash flows of a specific group of assets, useful lives of assets and the future possible income and expenses arising from the assets depending on how assets are utilised and industrial characteristics. Any changes of economic circumstances or estimates due to the change of Group strategy might cause material impairment on assets in the future.

At December 31, 2024, the Group recognised property, plant and equipment, net of impairment loss, amounting to $404,711.

6. Details of Significant Accounts

(1) Cash and cash equivalents

Cash:
Cash on hand and petty cash
Demand and checking accounts deposits
Time deposits
Cash equivalents-repurchased bonds		 December31,2024
151
$ 66,124
38,976
115,471
220,722
$		 December31,2023
174
$ 206,466
-
173,323
379,963
$

  • A. The Group transacts with a variety of financial institutions all with high credit quality to disperse credit risk, so it expects that the probability of counterparty default is remote.

  • B. The Group has no cash and cash equivalents pledged to others.

~31~

(2) Financial assets/liabilities at fair value through profit or loss

Items
Current items:
Financial liabilities mandatorily measured at
fair value through profit or loss
Derivarives-Forward foreign exchange
contracts		 December31,2024
-
$		 December31,2023
-
$
  • A. Amounts recognised in profit or loss in relation to financial assets/liabilities at fair value through profit or loss are listed below:
profit or loss are listed below:
Financial liabilities mandatorily measured at
fair value through profit or loss
Derivarives-Forward foreign exchange
contracts		 YearendedDecember31
2024
2023
-
$ 11,660)
($		 2023

  • B. The Group did not enter into contracts relating to derivative financial assets which were not accounted for under hedge accounting as at December 31, 2024 and 2023.

  • C. The Group has no financial assets/liabilities at fair value through profit or loss pledged to others as collateral.

  • D. Information relating to financial assets/liabilities at fair value through profit or loss is provided in Notes 12(3) and (4).

(3) Financial assets measured at fair value through other comprehensive income

Items December31,2024 December31,2023
Non-current items:
Equity instruments:
Unlisted stocks
Debt instruments:
Corporate bonds
Valuation adjustment		 ( 25,666
$ 4,546
30,212
30,212)

-
$		 ( 25,666
$ 9,092
34,758
34,758)

-
$
  • A. The Group has elected to classify equity and debt instrument investments that are considered to be strategic investments as financial assets at fair value through other comprehensive income. As at December 31, 2024 and 2023, the fair values of such investments were both $0.

~32~

  • B. Amounts recognised in profit or loss and other comprehensive income in relation to the financial assets at fair value through other comprehensive income are listed below:
Debt instruments at fair value through other
comprehensive income
Fair value change recognised in other
comprehensive income
(		 2024
4,546)
$		 2023
-
$

  • C. As at December 31, 2024 and 2023, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the financial assets at fair value through other comprehensive income held by the Group were both $0.

  • D. The Group held unsecured convertible bonds issued by the related party, Maruwa Corporation, and the acquisition cost amounted to JPY 30,000 thousand, which had been fully recognised as unrealised losses on financial assets in 2018, and the Group carried out collections starting from April 22, 2024. As at February 24, 2025, the Group had completed negotiations with Maruwa Corporation regarding the repayment schedule of corporate bonds, receiving JPY 15,000 thousand in bond repayments, and further adjusting the valuation of financial assets, thus recognizing other comprehensive loss of ($4,546).

  • E. The Group has no financial assets at fair value through other comprehensive income pledged to others as collateral.

  • F. Information relating to credit risk of financial assets at fair value through other comprehensive income is provided in Note 12(3).

(4) Financial assets at amortised cost

Financial assets at amortised cost
Items December31,2024 December31,2023
Current items:
Pledged time deposits		 -
$		 95,201
$
  • A. Amounts recognised in profit or loss in relation to financial assets at amortised cost are listed below:
below:
Interest income YearendedDecember31
2024
672
$		 2023
3,077
$

  • B. As at December 31, 2024 and 2023 without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the financial assets at amortised cost held by the Group was $0 and $95,201, respectively.

  • C. Details of the Group’s financial assets at amortised cost pledged to others as collateral are provided in Note 8.

~33~

  • D. Information relating to credit risk of financial assets at amortised cost is provided in Note 12(3). The counterparties of the Group’s investments in certificates of deposit are financial institutions with high credit quality, so the Group expects that the probability of counterparty default is remote.

(5) Accounts and notes receivable, net

Notes receivable
Accounts receivable
Less: Allowance for
uncollectible accounts
(		 December Related party
-
$ -
$ -
(
-
$ 31,2024		 December 31,2023
Non-related
party
9,128
$ 875,917
$ 1,597)

874,320
$		 Non-related
party
7,157
$ 666,491
$ 1,796)

664,695
$		 Related party
-
$
1,342
$ -
1,342
$
  • A. The aging analysis of accounts and notes receivable that were past due but not impaired is as follows:
follows:
Not past due
Up to 30 days
31 to 90 days
91 to180 days
Over 181 days		 December Notes
receivable
9,128
$ -
-
-
-
9,128
$ 31,2024		 December 31,2023
Accounts
receivable
873,400
$ 1,540
709
1
267
875,917
$		 Accounts
receivable
666,166
$ 743
80
-
844
667,833
$		 Notes
receivable
7,157
$ -
-
-
-
7,157
$

The above aging analysis was based on past due date.

  • B. As at December 31, 2024 and 2023, accounts and notes receivable were all from contracts with customers. And as of January 1, 2023, the balance of accounts receivable (including related parties) and notes receivable from contracts with customers amounted to $632,140.

  • C. Information relating to credit risk of accounts and notes receivable is provided in Note 12(3).

  • D. As at December 31, 2024 and 2023, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the Group’s notes and accounts receivable (including related parties) was $9,128 and $7,157; $874,320 and $666,037, respectively.

~34~

(6) Inventories

Raw materials
Work in progress
Finished goods
Merchandise
Raw materials
Work in progress
Finished goods
Merchandise		 December31,2024
Allowance for
Cost
valuation loss
111,727
$ 9,400)
($ 98,952
27,801)
(
139,839
57,066)
(
1,671
37)
(
352,189
$ (94,304)
$ December31,2023		 Bookvalue
102,327
$ 71,151
82,773
1,634
257,885
$
Allowance for
Cost
valuation loss
101,770
$ 11,095)
($ 91,123
26,780)
(
118,785
47,817)
(
58
-
311,736
$ 85,692)
($		 Bookvalue
90,675
$ 64,343
70,968
58
226,044
$

The cost of inventories recognized as expense for the year:

YearendedDecember31 YearendedDecember31 YearendedDecember31
2024 2023
Cost of goods sold $ 1,910,511 $ 1,559,065
Loss on (gain on reversal of) decline in market value 11,300 ( 50,247)
Scrap loss 17,829 27,533
Revenue from sale of scraps ( 49,435) ( 41,190)
Low capacity utilization 31,026 58,749
$ 1,921,231 $ 1,553,910

  • A. For the year ended December 31, 2023, the Group actively handled the loss on decline in market value and slow-moving inventory, resulting in a gain from price recovery.

  • B. As at December 31, 2024 and 2023, the inventory that was pledged to others as collateral for liabilities amounted to $0 and $79,035, respectively.

~35~

(7) Property, plant and equipment

At January 1
Cost
Accumulated depreciation and impairment
Opening net book amount as at January 1
Additions
Transfers
Depreciation charge
Net exchange differences
Closing net book amount as at December 31
At December 31
Cost
Accumulated depreciation and impairment		 2024

~36~

At January 1
Cost
Accumulated depreciation and impairment
Opening net book amount as at January 1
Additions
Disposals
Transfers
Depreciation charge
Reversal of impairment loss
Net exchange differences
Closing net book amount as at December 31
At December 31
Cost
Accumulated depreciation and impairment		 2023

A. Impairment information about the property, plant and equipment is provided in Note 6(9).

B. Information about the property, plant and equipment that were pledged to others as collateral is provided in Note 8.

C. As of December 31, 2024 and 2023, the amount prepaid by the Group for the purchase of equipment amounted to $3,935 and $5,734, respectively (listed as ‘Prepayments for equipment’ in the balance sheet of non-current assets).

~37~

－ (8) Leasing arrangements lessee

  • A. The Group leases various assets including land, buildings, machinery and equipment and business vehicles. Rental contracts are typically made for periods of 1 to 10 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose covenants, but leased assets may not be used as security for borrowing purposes.

  • B. Short-term leases with a lease term of 12 months or less comprise premises and machinery and equipment. Low-value assets comprise machinery and equipment. On December 31, 2024 and 2023, payments of lease commitments for short-term leases amounted to $6,190 and $3,152, respectively.

  • C. The carrying amount of right-of-use assets and the depreciation charge are as follows:

Land

Buildings

Transportation equipment (business vehicles)
Land

Buildings

Transportation equipment (business vehicles)		 December31,2024
December31,2023
Carryingamount
Carryingamount
$ 8,350 $ 8,301
2,510 4,877
381
126
11,241
$ 13,304
$ YearendedDecember31		 December31,2023
Carryingamount
$ 8,301
4,877
126
13,304
$
2024
Depreciation
charge
$ 264
2,453
297
3,014
$		 2023
Depreciation
charge
$ 259
3,539
246
4,044
$

  • D. For the years ended December 31, 2024 and 2023, the additions to right-of-use assets were $571 and $2,523, respectively.

  • E. The information on profit and loss accounts relating to lease contracts is as follows:

Items affecting profit or loss
Interest expense on lease liabilities

Expense on short-term lease contracts
Expense on leases of low-value assets
Gain on lease modification		 YearendedDecember31 YearendedDecember31
2024
$ 80

6,190
131
-		 2023
$ 110
3,152
143
30
  • F. For the years ended December 31, 2024 and 2023, the Group’s total cash outflow for leases were $9,274 and $7,271, respectively.

~38~

(9) Impairment of non-financial assets

  • A. The Group recognised gain on reversal of impairment loss for the years ended December 31, 2024 and 2023. Details of such gain are as follows:
Gain on reversal of impairment
loss-Machinery and equipment		 Recognised
in other
Recognised in
comprehensive
profitor loss
income
-
$ -
$ YearendedDecember31,2024		 YearendedDecember31,2023 YearendedDecember31,2023
Recognised in
profitor loss
-
$		 Recognised in
profitor loss
762
$		 Recognised
in other
comprehensive
income
-
$
  • B. Because some machinery had been sold for the year ended December 31, 2023, there was no impairment loss from previous year, and the Group recognized gain on reversal of impairment loss was $762.

(10) Short-term borrowings

loss was $762.
Short-term borrowings
Type ofborrowings
Bank borrowings
Unsecured borrowings
Secured borrowings
Type ofborrowings
Bank borrowings
Unsecured borrowings
Secured borrowings		 December 31,2024
115,000
$ 300,095
415,095
$ December31,2023
43,179
$ 279,488
322,667
$		 Interest raterange Collateral
2.46%~2.90%
2.54%~3.30%
Interest raterange		 None
Right-of-use assets,
land and plant
Collateral
3.80%
2.00%~3.60%		 None
Right-of-use assets,
land, plant and
pledged time deposits

The Group has the following undrawn borrowing facilities:

(11) Other payables
Floating rate
Expiring within one year
Salaries and bonuses payable
Mold expense payable
Repairs and maintenance expense payable
Payable on machinery and equipment
Import and export expenses payable
Outsourcing expense payable
Others		 December31,2024
158,904
$ December31,2024
92,185
$ 26,753
15,808
12,945
10,623
5,237
62,852
226,403
$		 December31,2023
321,226
$
December31,2023
85,589
$ 25,430
15,773
4,160
8,342
7,822
67,755
214,871
$

~39~

- (12) Long term borrowings

Bank secured borrowings
Non-financial institution borrowings
Less: current portion
(
Interest rate range		 December31,2024
360,000
$ -
59,167)

(
300,833
$ 2.48%~2.63%		 December31,2023
290,000
$ 91,710
105,782)

275,928
$ 2.35%~4.02%

  • A. In May 2021, the Group obtained a long-term financing of $80,000 and $50,000 from IBT Leasing CO., Ltd. and CDC Finance and Leasing Corp. by way of repurchasing inventory after sales, respectively. The contracts period was 2.5 years and 2 years, respectively, and monthly matured notes were issued for repayment from June 2021. For the information on the guarantee provided by the Group with inventory, please refer to Note 6(6). On November 25, 2023 and May 24, 2023, the Group fully repaid the loans from IBT Leasing Co., Ltd. and CDC Finance and Leasing Corp., respectively.

  • B. In August 2021, the Group signed a twelve-year, a three-year and a one-year credit contract with The Shanghai Commercial & Savings Bank, Ltd., Chung Li Branch (SCSB), with a total amount of NT$350,000 and US$3,000, including a guaranteed long-term loan of NT$300,000 and a medium-term loan of NT$50,000 and an export O/A of US$3,000 actually allocated from August 2021 to December 2021 to purchase machinery and auxiliary facilities and supplement the medium-term working capital.

  • The above-mentioned credit contracts were signed with SCSB in August 2023 to change the credit line, from the original total amount of NT$350,000 and US$3,000 to NT$350,000 and NT$120,000. On December 29, 2023, the Group fully repaid the medium-term secured borrowings of NT$50,000.

  • C. In March 2023, the Group signed an extended medium-term credit line of NT$36,000 with Chang Hwa Bank (CHB). On September 23, 2023, the Group fully repaid the loans from Chang Hwa Bank (CHB).

  • D. In February 2023, the Group obtained a long-term financing of $50,000 and $30,000 from Chailease Finance Co., Ltd. and CDC Finance and Leasing Corp. by way of repurchasing of inventory after sales, respectively. The contracts period both were 2 years, and monthly matured notes were issued for repayment from March 2023. For the information on the guarantee provided by the Group with inventory, please refer to Note 6(6). On February 26, 2024, the Group fully repaid the above-mentioned borrowings from Chailease Finance Co., Ltd. and CDC Finance and Leasing Corp.

~40~

  • E. In March 2023, the Group obtained a long-term financing both of $50,000 from Robina Finance & Leasing Corp. and Shinshin Credit Corporation. by way of repurchasing of inventory after sales, respectively. The contracts period were 2 years and 17 months, respectively, and monthly maturing notes were issued for repayment from April 2023. For the information on the guarantee provided by the Group with inventory, please refer to Note 6(6). On March 12, 2024 and December 29, 2023, the Group fully repaid the above-mentioned borrowings from Robina Finance & Leasing Corp. and Shinshin Credit Corporation, respectively.

  • F. In March 2023, the Group obtained a long-term financing of $20,000 from CTBC Finance Co., Ltd. by way of repurchasing of machine after sales. The contracts were 2 years, and monthly matured notes were issued for repayment from April 2023. For the information on the guarantee provided by the Group with machinery and equipment, please refer to Note 8. On March 8, 2024, the Group fully repaid the borrowings from CTBC Finance Co., Ltd.

  • G. In May 2024, the Group signed a three-year credit contract with The Shanghai Commercial & Savings Bank, Ltd., Chung Li Branch (SCSB), with an amount of NT$100,000, and actually allocated in May 2024 to purchase machinery and equipment and auxiliary facilities and supplement the medium-term working capital.

(13) Pensions

  • A. The Company has a defined benefit pension plan in accordance with the Labor Standards Law, covering foreign employees who meet the Mid-Level skill worker standard under the Labor Standards Law. Under the defined benefit pension plan, two units are accrued for each year of service for the first 15 years and one unit for each additional year thereafter, subject to a maximum of 45 units. The Group contributes monthly an amount equal to 2% of the employees’ monthly salaries and wages to the retirement fund deposited with Bank of Taiwan, the trustee, under the name of the independent retirement fund committee. Also, the Company would assess the balance in the aforementioned labor pension reserve account by the end of December 31, every year. If the account balance is insufficient to pay the pension calculated by the aforementioned method to the employees expected to qualify for retirement in the following year, the Company will make contributions for the deficit by next March.

  • B. Effective July 1, 2005, the Company has established a defined contribution pension plan (the “New plan”) under the Labor Pension Act (the “Act”), covering all regular employees with R.O.C. nationality. Under the New Plan, the Company contributes monthly an amount not less than 6% of the employees’ monthly salaries and wages to the employees’ individual pension accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of employment. The pension costs under defined contribution pension plans of the Company for the years ended December 31, 2024 and 2023 were $10,892 and $10,645, respectively.

~41~

  • C. Pension plans of consolidated subsidiaries:

  • Uniflex Technology (JiangSu) has a defined contribution plan. Monthly contributions to an independent fund administered by the government in accordance with the pension regulations in the People’s Republic of China (PRC) are based on certain percentage of employees’ monthly salaries and wages. Other than the monthly contributions, Uniflex Technology (JiangSu) has no further obligations. The pension costs under defined contribution pension plans of Uniflex Technology (JiangSu) for the years ended December 31, 2024 and 2023, were $30,127 and $30,010, respectively. The other subsidiaries have no employees.

(14) Share-based payment

  • A. For the years ended December 31, 2024 and 2023, the Group’s share-based payment arrangements were as follows:

Type of arrangement Grant date Quantity granted Contract period Vesting conditions Cash capital increase 2023.12.18 2,502 thousand NA Vested immediately reserved for employee shares preemption

  • B. The fair value of stock options granted on grant date is measured using the Black-Scholes optionpricing model. Relevant information is as follows:

Exercise Fair value Type of Stock price price Expected Expected Expected Risk-free per unit arrangement Grant date (in dollars) (in dollars) price volatility option life dividends interest rate (in dollars) Cash capital 2023.12.18 $ 14.60 $ 11 43.49% 0.0027 year - 0.8194% $ 3.60 increase reserved for employee preemption

  • C. Expenses incurred on share-based payment transactions are shown below:
Equity-settled YearendedDecember31 YearendedDecember31
2024
-
$		 2023
9,007
$

(15) Share capital

  • A. As of December 31, 2024, the Company's authorized capital was $4,500,000, consisting of 450,000 thousand shares of ordinary share, and the paid-in capital was $971,598 with a par value of $10 (in dollars) per share. All proceeds from shares issued have been collected.

~42~

Movements in the number of the Company’s ordinary shares outstanding are as follows:

At January 1
Capital reduction to offset accumulated deficits
Cash capital increase
At December 31		 Unit: in thousand shares
2024
2023
97,160
$ 156,145
$ -
88,985)
(
-
30,000
97,160
$ 97,160
$ YearendedDecember31

  • B. To improve the financial structure and offset accumulated deficits, the shareholders at their annual shareholders’ meeting on May 24, 2023 adopted a resolution to reduce capital by 88,985 thousand shares with a capital reduction ratio of 56.99%. The effective date of capital reduction was set on June 30, 2023, and the capital reduction case had been registered.

  • C. The Board of Directors during its meeting on November 13, 2023 adopted a resolution to increase the Company’s capital by issuing 30,000 thousand ordinary shares with a par value of $10 (in dollars) per share and a price of NT$11 (in dollars) per share. The effective date of capital increase was set on December 27, 2023, and the capital increase case had been registered on January 17, 2024.

(16) Capital surplus

  • A. Pursuant to the R.O.C. Company Act, capital surplus arising from paid-in capital in excess of par value on issuance of ordinary shares and donations can be used to cover accumulated deficit or to issue new stocks or cash to shareholders in proportion to their share ownership, provided that the Company has no accumulated deficit. Further, the R.O.C. Securities and Exchange Act requires that the amount of capital surplus to be capitalized mentioned above should not exceed 10% of the paid-in capital each year. Capital surplus should not be used to cover accumulated deficit unless the legal reserve is insufficient.

  • B. The shareholders during its meeting on June 27, 2024, adopted a resolution to the deficit compensation plan for the year 2023, has been approved, with losses being offset by utilizing a capital reserve of $39,007.

(17) Retained earnings/(accumulated deficit)

  • A. Under the Company’s Articles of Incorporation, the current year’s earnings, if any, shall first be used to pay all taxes and offset prior years’ operating losses and then 10% of the remaining amount shall be set aside as legal reserve; however this is not required if total legal reserve equals total paid-in capital. After setting aside a special reserve in accordance with related laws and competent authority, the appropriation of the remaining earnings, along with the accumulated unappropriated earnings, shall be retained or distributed resolved by the shareholders.

~43~

  • B. The Company’s dividend policy is summarized below: The Company shall, in consideration of the Company's business environment and dividend distribution policy, take into account the Company’s current and future investment environment, capital needs, domestic and foreign competition, and capital budget and other factors, along with shareholders’ interests and the balance between dividends and long-term financial plans of the Company. Pursuant to existing regulations, the Board of Directors prepares an earnings distribution proposal every year and submits it to the shareholders for approval. Issuance of dividends to shareholders, of which dividends paid in cash are 10% to 100% of the total dividend and dividends paid in stocks are 0% to 90% of the total dividend.

  • C. Except for covering accumulated deficit or issuing new stocks or cash to shareholders in proportion to their share ownership, the legal reserve shall not be used for any other purpose. The use of legal reserve for the issuance of stocks or cash to shareholders in proportion to their share ownership is permitted, provided that the distribution of the reserve is limited to the portion in excess of 25% of the Group’s paid-in capital.

  • D. (a) In accordance with the regulations, the Company shall set aside special reserve from the debit balance on other equity items at the balance sheet date before distributing earnings. When debit balance on other equity items is reversed subsequently, the reversed amount could be included in the distributable earnings.

  • (b) The amounts previously set aside by the Company as special reserve on initial application of IFRSs in accordance with Order No. Financial-Supervisory-Securities-Corporate1010012865, dated April 6, 2012, shall be reversed proportionately when the relevant assets are used, disposed of or reclassified subsequently. Such amounts are reversed upon disposal or reclassified if the assets are investment property of land, and reversed over the use period if the assets are investment property other than land.

  • E. It was resolved by the shareholders' meeting of the Company on June 27, 2024 and May 24, 2023, respectively, to not distribute dividends to shareholders because the after-tax losses for the years ended December 31, 2023 and 2022.

(18) Operating revenue

The main business of the Group is the manufacturing, processing and sale of various printed circuit boards, which can be classified in a single product category. The Group derives revenue from the transfer of goods and services over time and at a point in time in the following geographical regions:

Taiwan
Mainland China		 YearendedDecember31 YearendedDecember31
2024
438,631
$ 1,527,509
1,966,140
$		 2023
333,901
$ 1,207,311
1,541,212
$

~44~

(19) Interest income

Interest income
Interest income from bank deposits
Other interest income		 YearendedDecember31
2024
3,014
$ 3,421
6,435
$		 2023
11,956
$ 7,240
19,196
$

(20) Other income

Other income
Government grants income
Other income - others		 YearendedDecember31
2024
12,961
$ 5,730
18,691
$		 2023
13,528
$ 2,262
15,790
$

(21) Other gains and losses

Foreign exchange gains
Gains on disposals of property, plant and equipment
Gain on reversal of impairment loss on
non-financial assets (Note)
Losses on financial assets and liabilities at fair
value through profit or loss
Others
(		 2024
2023
24,525
$ 23,955
$ 492
1,770
-
762
-
11,660)
(
1,890)

1,666)
(
23,127
$ 13,161
$ YearendedDecember31

Note: Please refer to Note 6(9) for the gain on reversal of impairment loss on non-financial assets.

(22) Expenses by nature

By function
Bynature		 2024 2024 2024 2023 2023 2023
Operation costs Operation
expenses		 Total Operation costs Operation
expenses		 Total
Employee benefit
expense		 570,093
$		 163,816
$		 733,909
$		 497,286
$		 168,714
$		 666,000
$
Depreciation charges
on property, plant and
equipment (including
right-of-use assets)		 89,865 4,153 94,018 124,463 5,788 130,251
Amortization charges
on intangible assets		 520 947 1,467 516 1,429 1,945

~45~

(23) Employee benefit expense

Wages and salaries
Labour and health insurance fees
Pension costs
Directors’ remuneration
Other personnel expenses		 YearendedDecember31 YearendedDecember31
2024
608,795
$ 46,192
41,019
1,975
35,928
733,909
$		 2023
546,972
$ 43,879
40,655
2,000
32,494
666,000
$

  • A. In accordance with the Articles of Incorporation of the Company, a ratio of distributable profit of the current year, shall be distributed as employees’ compensation and directors’ remuneration. The ratio shall be 1% to 20% for employees’ compensation and shall not be higher than 2% for directors’ remuneration. If the Company still has accumulated loss, it shall be used to cover the loss first.

  • B. For the years ended December 31, 2024 and 2023, the Company did not accrue employees’ compensation and directors’ remuneration due to the loss before tax. Information about employees’ compensation and directors’ remuneration of the Company as resolved at the meeting of Board of Directors will be posted in the “Market Observation Post System” at the website of the Taiwan Stock Exchange.

(24) Income tax

  • A. Income tax expense

  • (a) Components of income tax expense:

Components of income tax expense:
Current tax:
Current tax on profits for the year
Deferred tax:
Origination and reversal of temporary
differences
Income tax expense		 YearendedDecember31
2024
-
$ 5,678
5,678
$		 2023
-
$ 8,043
8,043
$
  • (b) The income tax (charge)/credit relating to components of other comprehensive income is as follows:
follows:
Currency translation differences YearendedDecember31
2024
2023
4,414
$ 2,334)
($		 2023

~46~

B. Reconciliation between income tax expense and accounting profit

YearendedDecember31 YearendedDecember31
2024 2023
Tax calculated based on loss before tax and ($ 40,561) ($ 52,588)
statutory tax rate
Effect of amount disallowed by tax regulation ( 1,925) 5,807
Taxable loss not recognised as deferred tax
assets 43,296 48,176
Temporary difference not recognised as
deferred tax assets 4,868 6,648
Income tax expense $ 5,678 $ 8,043

C. Amounts of deferred tax assets or liabilities as a result of temporary differences are as follows:

Deferred tax assets:
- Temporary difference:
Allowance for bad debts
Allowance for inventory
valuation losses
Currency translation
differences
Unrealized sales discounts
and allowances
- Deferred tax liabilities:
Unrealized exchange gains
 2024
Recognized
in other
Recognized in
comprehensive
January1
profitor loss
income
19,361
$ 5,008)
($ -
$ 12,592
921)
(
-
13,294
-
4,414)
(
281
13
-
45,528
$ 5,916)
($ 4,414)
($ 620)
($ 238
$ -
$ 620)
($ 238
$ -
$
44,908
$ 5,678)
($ 4,414)
($		 December31
14,353
$ 11,671
8,880
294
35,198
$
382)
($
382)
($
34,816
$

~47~

Deferred tax assets:
- Temporary difference:
Allowance for bad debts
Allowance for inventory
valuation losses
Currency translation
differences
Unrealized sales discounts
and allowances
- Deferred tax liabilities:
Unrealized exchange gains

 2023 2023 December31
19,361
$ 12,592
13,294
281
45,528
$ 620)
($ 620)
($ 44,908
$
Recognized in
January1
profitor loss
25,928
$ 6,567)
($ 13,678
1,086)
(
10,960
-
83
198
50,649
$ 7,455)
($ 32)
($ 588)
($ 32)
($ 588)
($ 50,617
$ 8,043)
($		 Recognized
in other
comprehensive
income
-
$ -
2,334
-
2,334
$ -
$ -
$
2,334
$
  • D. Expiration dates of unused tax losses and amounts of unrecognised deferred tax assets are as follows:
December 31,2024 December 31,2024
Year incurred
2016
2017
2018
2019
2020
2021
2022
2023 (Filed)
2024 (Estimated)		 Amount filed/
assessed
239,013
$ 196,298
274,009
376,896
342,680
170,012
263,477
419,424
213,154		 Unused amount
239,013
$ 196,298
274,009
376,896
342,680
170,012
263,477
419,424
213,154		 Unrecognised
deferred tax
assets
47,803
$ 39,260
54,802
75,379
68,536
34,002
52,695
83,885
42,631		 Expiry year
2026
2027
2028
2029
2030
2031
2032
2033
2034

~48~

December 31, 2023

Unrecognised
Amount filed/ deferred tax
Year incurred assessed Unused amount assets Expiry year
2016 $ 237,651 $ 237,651 $ 47,530 2026
2017 195,815 195,815 39,163 2027
2018 271,100 271,100 54,220 2028
2019 376,896 376,896 75,379 2029
2020 340,106 340,106 68,021 2030
2021 168,477 168,477 25,516 2031
2022 260,286 260,286 52,057 2032
2023 (Estimated) 299,448 299,448 59,890 2033
The amounts of deductible temporary difference that are not recognised as deferred tax assets
are as follows:
December31,2024
December31,2023
Deductible temporary differences $ 96,293
$		 93,410

  • E. The amounts of deductible temporary difference that are not recognised as deferred tax assets are as follows:

  • F. The Company’s income tax returns through 2022 have been assessed and approved by the Tax Authority.

  • (25) Loss per share

Authority.
Loss per share
Basic and diluted loss per
share
Loss attributable to ordinary
shareholders of the parent
(
Basic and diluted loss per
share
Loss attributable to ordinary
shareholders of the parent
(		 Year Weighted average
number of ordinary
shares outstanding
Loss per share
(sharein thousands)
(indollars)
97,160
2.15)
($ endedDecember31,2024
Retrospective
adjustment to
weighted average
number of ordinary
shares outstanding
Loss per share
(sharein thousands)
(indollars)
67,571
4.01)
($ endedDecember31,2023
Amount after tax
208,482)
$ Year
Amount after tax
270,985)
$


~49~

(26) Supplemental cash flow information

Investment activities with partial cash payments:

Investment activities with partial cash payments:
Purchase of property, plant and equipment
Add: Opening balance of payable on equipment
Less: Ending balance of payable on equipment
(
Cash paid during the year		 2024
2023
48,608
$ 19,169
$ 4,160
12,022
12,945)

4,160)
(
39,823
$ 27,031
$ YearendedDecember31
2024
48,608
$ 4,160
12,945)


39,823
$

(27) Changes in liabilities from financing activities

2024

2024 2024
At January 1
Changes in cash flow from
financing activities
Impact of changes in foreign
exchange rate
Changes in other non-cash items
At December 31
At January 1
Changes in cash flow from
financing activities
Impact of changes in foreign
exchange rate
Changes in other non-cash items
At December 31		 Short-term
Long-term
Lease
borrowings
borrowings
liabilities
322,667
$ 381,710
$ 5,003
$ 84,590
21,710)
(
2,873)
(
7,838
-
-
-
-
843
415,095
$ 360,000
$ 2,973
$ 2023		 Liabilities from
financing
activities-gross
709,380
$ 60,007
7,838
843
778,068
$
Short-term
Long-term
borrowings
borrowings
304,049
$ 430,358
$ 23,254
48,648)
(
4,636)
(
-
-
-
322,667
$ 381,710
$		 Lease
Liabilities from
financing
liabilities
activities-gross
7,465
$ 741,872
$ 3,866)
(
29,260)
(
-
4,636)
(
1,404
1,404
5,003
$ 709,380
$

~50~

7. Related Party Transactions

(1) Names of related parties and relationship

Names of related parties

Unimicron Technology Corp. (Unimicron)

Unimicron-FPC Technology (KunShan) Inc. (Unimicron-FPC) Advance Materials Corporation Maruwa Corporation (Maruwa)

Directors, independent directors, general managers and deputy general managers, etc.

Relationship with the Group

The parent company of the Company's corporate director Unimicron’s subsidiary

Unimicron is a director of the company Investee held by the Unimicron’s second-tier subsidiary Directors and key management of the Company

(2) Significant related party transactions

  • A. Operating revenue
Operating revenue
Sales of goods:
Other related parties
Related parties with a significant impact
on the Group		 YearendedDecember31
2024
3,317
$ 30
3,347
$		 2023
3,421
$ 312
3,733
$

The transaction price of the Group’s sales to the above-mentioned related parties are approximate to those for third parties, and the collection terms are 90 to 120 days after monthly billings.

  • B. Operating costs
Operating costs
Purchase of goods:
Other related parties
Related parties with a significant impact
on the Group
Processing cost:
Related parties with a significant impact
on the Group
Other related parties		 YearendedDecember31
2024
2023
35
$ 61
$ 10
-
45
$ 61
$ YearendedDecember31		 2023
61
$ -
61
$
2024
2,250
$ 715
2,965
$		 2023
468
$ 8
476
$

~51~

The transaction price of the Group’s purchase and processing cost from the above-mentioned related parties are approximate to those for third parties, and the payment terms are 120 days after monthly billings.

  • C. Receivables from related parties
monthly billings.
Receivables from related parties
Payables to related parties
Accounts receivable:
Other related parties
Accounts payable:
Others related parties
Other payables-Processing cost:
Related parties with a significant impact
on the Group
Others related parties		 December31,2024
-
$ December31,2024
39
$ 1,158
$ 71
1,229
$		 December31,2023
1,342
$
December31,2023
32
$
491
$ 6
497
$
  • D. Payables to related parties

E. Property transactions

  • (a) Acquisition of property, plant and equipment
Acquisition of property, plant and equipment
Related parties with a significant impact
on the Group		 YearendedDecember31
2024
298
$		 2023
3,590
$
  • (b) Disposal of property, plant and equipment

Year ended December 31

2024 2024 2023 2023
Disposal Gain Disposal Gain
proceeds ondisposal proceeds ondisposal
Other related parties $ - $ - $ 336 $ 336
Other non-current assets, others
December 31, 2024 December31,2023
Guarantee deposits paid:
Related parties with a significant impact
on the Group $ 70 $ 70

F. Other non-current assets, others

~52~

  • G. Lease transactions-lessee

  • (a) The Group leases the office from Unimicron Technology Corp. Rental contracts are typically made for periods from 2023 to 2028. Rents are paid on the 10[th] of the following month.

  • (b) Lease liabilities

    • (i) Outstanding balance:

Related parties with a significant impact on the Group

  • (ii)Interest expense

Related parties with a significant impact on the Group

  • (3) Key management compensation

Short-term employee benefits

December31,2024
December31,2023
1,254
$ 1,594
$ December31,2024
December31,2023
27
$ 16
$ 2024
2023
11,377
$ 11,744
$ YearendedDecember31		 December31,2024
December31,2023
1,254
$ 1,594
$ December31,2024
December31,2023
27
$ 16
$ 2024
2023
11,377
$ 11,744
$ YearendedDecember31		 December31,2024
December31,2023
1,254
$ 1,594
$ December31,2024
December31,2023
27
$ 16
$ 2024
2023
11,377
$ 11,744
$ YearendedDecember31
2024
11,377
$		 2023
11,744
$

8. Pledged Assets

The Group’s assets pledged as collateral are as follows:

Pledgedasset
Time deposit (financial
assets at amortised
cost-current)
Inventories
Property, plant and
equipment
- Land
- Building
- Machinery and
equipment		 December31,2024
December31,2023
-
$ 95,201
$ -
79,035
132,495
132,495
156,190
185,080
-
20,916
8,350
8,301
Bookvalue		 Nature ofpledge
December31,2024
-
$ -
132,495
156,190
-
8,350
Guaranteed borrowings
line
Guaranteed borrowings
line
Guaranteed borrowings
line
"
"

9. Significant Contingent Liabilities and Unrecognised Contract Commitments

Capital expenditure contracted for at the balance sheet date but not yet incurred is as follows:

Property, plant and equipment

but not yet incurred is as follows:
December31,2024
22,716
$		 December31,2023
13,279
$

~53~

10. Significant Disaster Loss

None.

11. Significant Events after the Balance Sheet Date

  • A. On February 24, 2025, the Board of Directors of the Group proposed that no surplus will be distributed due to the after-tax loss for the year ended December 31, 2024. As of February 24, 2025, the proposal of the deficit compensated for the year 2024 has not yet been approved by the shareholders.

  • B. The Group passed a resolution of the Board of Directors on February 24, 2025. In order to improve the financial structure and future operational development needs of Uniflex Technology Inc., the Group plans to reduce capital to make up for losses, with an amount of $440,460. As of February 24, 2025, it has not yet been approved by the shareholders.

  • C. In order to repay the loan, the Group approved the cash capital increase and issuance of ordinary shares on February 24, 2025, with a maximum issuance limit of 33,000 thousand shares and a par value of NT$10 per share.

  • D. In response to the Group's capital needs, the Group obtained a one-year credit line with several banks for a total amount of NT$180,000 and RMB$50,000, which was approved by the Board of Directors on February 24, 2025.

12. Others

(1) Strategies to improve operational and financial conditions

  • A. By adjusting the product portfolio and discontinuing the loss-making products, the Group will focus on the development of new technologies and diversify high-margin products in the future, and actively control operating costs and expenses, streamline the organization and staff, and reduce various expenses to enhance the Group’s profitability.

  • B. To effectively improve the financial structure of the Group and to supplement working capital, the Group's Board of Directors approved the proposed cash capital increase proposal on February 24, 2025. Please refer to Note 11.

(2) Capital management

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern to provide returns for shareholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

~54~

(3) Financial instruments

A. Financial instruments by category

Financial instruments by category
Financial assets
Financial assets at amortised cost:
Cash and cash equivalents
Financial assets at amortised cost
Notes receivable
Accounts receivable (including related
parties)
Other receivables
Guarantee deposits paid
Financial liabilities at fair value through profit
or loss
Financial liabilities designated as at fair value
through profit or loss on initial recognition
Financial liabilities
Financial liabilities at amortised cost:
Short-term borrowings
Accounts payable (including related parties)
Other payables
Long-term borrowings (including current
portion)
Lease liability		 December31,2024 December31,2023
220,722
$ -
9,128
874,320
10,604
6,305
1,121,079
$ -
$ 415,095
$ 396,498
226,403
360,000
1,397,996
$ 2,973
$		 379,963
$ 95,201
7,157
666,037
9,496
2,181
1,160,035
$ -
$ 322,667
$ 350,057
214,871
381,710
1,269,305
$ 5,003
$

  • B. Financial risk management policies

  • (a) The Group’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk, interest rate risk and price risk), credit risk and liquidity risk.

  • (b) Risk management is carried out by a central financial department (Group treasury) under policies approved by the Board of Directors. Group treasury identifies, evaluates and hedges financial risks in close co-operation with the Group’s operating units. The Board provides written principles for overall risk management, as well as written policies covering specific areas and matters, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.

~55~

  • C. Significant financial risks and degrees of financial risks

  • (a) Market risk

Foreign exchange risk

  • i. The Group operates internationally and is exposed to foreign exchange risk arising from the transactions of the Group and its subsidiaries used in various functional currency, primarily with respect to the USD and RMB. Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities.

  • ii. Management has set up a policy to require Group to manage their foreign exchange risk against their functional currency.

  • iii.The Group has certain investments in foreign operations, whose net assets are exposed to foreign currency translation risk.

  • iv. The Group’s businesses involve some non-functional currency operations (the Group’s functional currency: NTD; other certain subsidiaries’ functional currency: USD and RMB). The information on assets and liabilities denominated in foreign currencies whose values would be materially affected by the exchange rate fluctuations is as follows:

Financial assets
Monetary items
USD:NTD
USD:RMB
JPY:NTD
Financial liabilities
Monetary items
USD:NTD
USD:RMB
RMB:NTD		 December31,2024 December31,2024
Foreign currency
amount
(In thousands)
16,707
$ 133
15,346
1,572
2,843
2,953		 Exchangerate
32.78
7.3170
0.2101
32.78
7.3170
4.4800		 Book value
(NTD)
547,655
$ 4,360
3,224
51,530
93,194
13,229


~56~

December 31, 2023

Financial assets
Monetary items
USD:NTD
USD:RMB
Financial liabilities
Monetary items
USD:NTD
USD:RMB
RMB:NTD		 Foreign currency
amount
(In thousands)
18,584
$ 259
1,983
2,528
1,787		 Exchangerate
30.71
7.1123
30.71
7.1123
4.3179		 Book value
(NTD)
570,715
$ 7,954
60,898
77,635
7,716


  • v. The total exchange gain, including realized and unrealized arising from significant foreign exchange variation on the monetary items held by the Group for the years ended December 31, 2024 and 2023, amounted to $24,525 and $23,955, respectively.

  • vi. Analysis of foreign currency market risk arising from significant foreign exchange variation:

variation:
Financial assets
Monetary items
USD:NTD
USD:RMB
JPY:NTD
Financial liabilities
Monetary items
USD:NTD
USD:RMB
RMB:NTD		 YearendedDecember31,2024
Sensitivity analysis
Degree of
variation
1%
1%
1%
1%
1%
1%		 Effect on
profitor loss
5,477
$ 44
32
515
932
132		 Effect on other
comprehensive
income
-
$ -
-
-
-
-


~57~

Financial assets
Monetary items
USD:NTD
USD:RMB
Financial liabilities
Monetary items
USD:NTD
USD:RMB
RMB:NTD		 YearendedDecember31,2023 YearendedDecember31,2023 YearendedDecember31,2023
Sensitivityanalysis
Degree of
variation
1%
1%
1%
1%
1%		 Effect on
profitor loss
5,707
$ 80
609
776
77		 Effect on other
comprehensive
income
-
$ -
-
-
-


Price risk

  • i. The Group’s equity securities, which are exposed to price risk, are the held financial assets at fair value through other comprehensive income. To manage its price risk arising from investments in equity securities, the Group diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the Group.

  • ii. The Group’s investments in equity securities comprise shares issued by the domestic and foreign companies. The prices of equity securities would change due to the change of the future value of investee companies. If the prices of these equity securities had increased/decreased by 1% with all other variables held constant, other components of equity would have increased/decreased by $257, as a result of other comprehensive income on equity investments classified as at fair value through other comprehensive income.

Cash flow and fair value interest rate risk

  • i. The Group has short-term borrowings with floating interest rates. Due to the borrowings period is short, it is predicted that there will be no significant market risks.

  • ii. The Group's interest rate risk mainly arising from long-term borrowings issued at variable rates expose the group to cash flow interest rate risk which is partially offset by cash and cash equivalents held at variable rates. During 2024 and 2023, the Group’s borrowings at variable rate were mainly denominated in New Taiwan dollars.

  • iii.If the borrowing interest rate of New Taiwan dollars had increased/decreased by 0.1% with all other variables held constant, profit before tax for the years ended December 31, 2024 and 2023 would have increased/decreased by $360 and $290, respectively. The main factor is that changes in interest expense result in floating-rate borrowings.

~58~

(b) Credit risk

  • i. Credit risk refers to the risk of financial loss to the Group arising from default by the clients or counterparties of financial instruments on the contract obligations. The main factor is that counterparties could not repay in full the accounts receivable based on the agreed terms, and the contract cash flows of debt instruments stated at fair value through other comprehensive income.

  • ii. The Group manages their credit risk taking into consideration the entire group’s concern. For banks and financial institutions that conduct transactions, only those with an investment grade or higher can be accepted as trading partners. According to the Group’s credit policy, each local entity in the Group is responsible for managing and analysing the credit risk for each of their new clients before standard payment and delivery terms and conditions are offered. Internal risk control assesses the credit quality of the customers, taking into account their financial position, past experience and other factors. Individual risk limits are set based on internal or external ratings in accordance with limits set by general manager. The utilization of credit limits is regularly monitored. The major credit risk comes from the credit risk of wholesale and retail customers and includes receivables that have not yet been collected.

  • iii.The Group adopts the assumptions under IFRS 9, if the contract payments were past due over 30 days based on the terms, there has been a significant increase in credit risk on that instrument since initial recognition.

  • iv. The Group adopts the assumptions under IFRS 9, the default occurs when the contract payments are past due over 90 days.

  • v. The Group classifies customers’ accounts receivable in accordance with credit rating of customer. The Group applies the simplified approach to estimate expected credit loss under the provision matrix basis.

  • vi. The following indicators are used to determine whether the credit impairment of debt instruments has occurred:

  • (i) It becomes probable that the issuer will enter bankruptcy or other financial reorganisation due to their financial difficulties;

  • (ii) The disappearance of an active market for that financial asset because of financial difficulties;

  • (iii)Default or delinquency in interest or principal repayments.

~59~

  • vii. The Group used the forecastability of Taiwan Institute of Economic Research boom observation report to adjust historical and timely information to assess the default possibility of accounts receivable. On December 31, 2024 and 2023, the provision matrix is as follows:
is as follows:
December 31, 2024
Expected loss rate
Total book value
Loss allowance
December 31, 2023
Expected loss rate
Total book value
Loss allowance		 Not past
due		 Up to 30
days pastdue		 31 to 90
days pastdue		 91 to 180
days pastdue		 Over 180
days pastdue		 Total
0.03%~5%
873,400
$ 1,097
$ Not past
due		 0.03%~20%
1,540
$ 90
$ Up to 30
days pastdue		 0.03%~20%
709
$ 142
$ 31 to 90
days pastdue		 0.03%~20%
1
$ 1
$ 91 to 180
days pastdue		 100%
267
$ 267
$ Over 180
days pastdue		 875,917
$ 1,597
$ Total
0.03%~5%
666,166
$ 931
$		 0.03%~20%
743
$ 5
$		 0.03%~20%
80
$ 16
$		 0.03%~20%
-
$ -
$		 100%
844
$ 844
$		 667,833
$ 1,796
$

viii. For the years ended December 31, 2024 and 2023, movements in relation to the Group applying the simplified approach to provide loss allowance for accounts receivable are as follows:

follows:
2024
Accountsreceivable
At January 1 $ 1,796
Provision for impairment 6,913
Reversal of impairment loss ( 7,130)
Effect of foreign exchange 18
At December 31 $ 1,597
2023
Accountsreceivable
At January 1 $ 3,219
Provision for impairment 3,456
Reversal of impairment loss ( 4,825)
Write-offs ( 43)
Effect of foreign exchange ( 11)
At December 31 $ 1,796

(c) Liquidity risk

i. Cash flow forecasting is performed in the operating entities of the Group and aggregated by Group treasury. Group treasury monitors rolling forecasts of the Group’s liquidity requirements to ensure it has sufficient cash to meet operational needs. Such forecasting takes into consideration of the Group’s financial ratio targets and external regulatory and legal requirements.

~60~

  • ii. Surplus cash held by the operating entities over and above balance required for working capital management will be invested in interest bearing current accounts, time deposits and other cash equivalents, choosing instruments with appropriate maturities or sufficient liquidity to provide sufficient head-room as determined by the above-mentioned forecasts.

  • iii.The Group has the following undrawn borrowing facilities:

December 31, 2024 December 31, 2023 Floating rate Expiring within one year $ 158,904 $ 321,226

  • iv. The table below analyses the Group’s non-derivative financial liabilities and net settled or gross-settled derivative financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date for nonderivative financial liabilities and to the expected maturity date for derivative financial liabilities. The amounts disclosed in the table are the contractual undiscounted cash flows.
December 31, 2024
Non-derivative financial liabilities:
Short-term borrowings
Accounts payable (including
related parties)
Other payables (including related
parties)
Lease liability
Long-term borrowings (including
current portion)
December 31, 2023
Non-derivative financial liabilities:
Short-term borrowings
Accounts payable (including
related parties)
Other payables (including related
parties)
Lease liability
Long-term borrowings (including
current portion)		 Lessthan 1year
419,154
$ 396,498
226,403
2,044
68,227
Lessthan 1year
325,251
$ 350,057
214,871
2,727
114,688		 Between 1 year
and 5 years
-
$ -
-
1,051
220,155
Between 1 year
and 5 years
-
$ -
-
2,433
163,277		 Over5 years
-
$ -
-
-
133,272
Over5 years
-
$ -
-
-
171,480

~61~

(4) Fair value information

  • A. The different levels that the inputs to valuation techniques are used to measure fair value of financial and non-financial instruments have been defined as follows:

  • Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. A market is regarded as active where a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis.

  • 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 input of assets or liabilities.

  • B. Financial instruments not measured at fair value The carrying amounts of cash and cash equivalents, notes receivable, accounts receivable, other receivables, short-term borrowings, accounts payable and other payables are approximate to their fair values.

  • C. The related information on financial and non-financial instruments measured at fair value by level on the basis of the nature, characteristics and risks of the assets and liabilities at December 31, 2024 and 2023 are as follows:

  • (a) The related information of the natures of the assets and liabilities is as follows:

(There was no such transaction on December 31, 2024.)

December 31, 2023 Level 1
Level 2
Level 3		 Total
Liabilities
Recurring fair value measurements
Financial liabilities at fair value
through profit or loss
Derivative instruments -
$ -
$ $		 -
$		 -
The methods and assumptions the Group used to measure fair value are as follows:
i. When assessing non-standard and low-complexity financial instruments, for example,
debt instruments without active market, interest rate swap contracts, foreign exchange
swap contracts and options, the Group adopts valuation technique that is widely used by
market participants. The inputs used in the valuation method to measure these financial
instruments are normally observable in the market.
  • (b) The methods and assumptions the Group used to measure fair value are as follows:

~62~

  • ii. The output of valuation model is an estimated value and the valuation technique may not be able to capture all relevant factors of the Group’s financial and non-financial instruments. Therefore, the estimated value derived using valuation model is adjusted accordingly with additional inputs, for example, model risk or liquidity risk etc. In accordance with the Group’s management policies and relevant control procedures relating to the valuation models used for fair value measurement, management believes adjustment to valuation is necessary in order to reasonably represent the fair value of financial and non-financial instruments at the consolidated balance sheet. The inputs and pricing information used during valuation are carefully assessed and adjusted based on current market conditions.

  • iii.The valuation of derivative financial instruments is based on valuation model widely accepted by market participants, such as present value techniques and option pricing models. Forward exchange contracts are usually valued based on the current forward exchange rate. Structured interest derivative instruments are measured by using appropriate option pricing models (i.e. Black-Scholes model) or other valuation methods, such as Monte Carlo simulation.

  • iv. The Group takes into account adjustments for credit risks to measure the fair value of financial and non-financial instruments to reflect credit risk of the counterparty and the Group’s credit quality.

  • D. For the years ended December 31, 2024 and 2023, there was no transfer between Level 1 and Level 2.

13. Supplementary Disclosures

(1) Significant transactions information

  • A. Loans to others: Please refer to table 1.

  • B. Provision of endorsements and guarantees to others: None.

  • C. Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures): Please refer to table 2.

  • D. Acquisition or sale of the same security with the accumulated cost exceeding $300 million or 20% of the Group’s paid-in capital: None.

  • E. Acquisition of real estate reaching $300 million or 20% of paid-in capital or more: None.

  • F. Disposal of real estate reaching $300 million or 20% of paid-in capital or more: None.

  • G. Purchases or sales of goods from or to related parties reaching $100 million or 20% of paid-in capital or more: Please refer to table 3.

  • H. Receivables from related parties reaching $100 million or 20% of paid-in capital or more: Please refer to table 4.

~63~

  • I. Trading in derivative instruments undertaken during the reporting periods: Please refer to Notes 12(3) and 12(4).

  • J. Significant inter-Group transactions during the reporting periods: Please refer to table 5.

(2) Information on investees

Names, locations and other information of investee companies (not including investees in Mainland China): Please refer to table 6.

(3) Information on investments in Mainland China

  • A. Basic information: Please refer to table 7.

  • B. Significant transactions, either directly or indirectly through a third areas, with investee companies in the Mainland Area:

  • (a)Purchase amount and percentage and ending balance and percentage of payables: Please refer to Note 13(1)G.

  • (b)Sales amount and percentage and ending balance and percentage of receivables: Please refer to Note 13(1)G.

  • (c)Property transaction amounts and gains and loss arising from them: None.

  • (d)Balance and purpose of provision or endorsements/guarantees or collaterals at December 31, 2024: None.

  • (e)Maximum balance, ending balance and interest rate range and total amount of interest during the year ended and at December 31, 2024: None.

  • (f) Other significant transactions that affected the gains and losses or financial status for the period, i.e. rendering/receiving of service: None.

(4) Major shareholders information

Major shareholders information: Please refer to table 8.

14. Operating Segment Information

(1) General information

The Group operates business only in a single industry. The Board of Directors who allocates resources and assesses performance of the Group as a whole, has identified that the Group has only one reportable operating segment

(2) Measurement of segment information

The operating segment’s accounting policies are in agreement with the significant accounting policy summarized in Note 4 of the consolidated financial statements. The Group’s chief operating decision-maker assesses the performance based on the net operating profit.

~64~

(3) Segment Information

The segment information provided to the chief operating decision-maker for the reportable segments is as follows:

Revenue from external customers
Segment loss
(
Segment income, including depreciation
and amortization		 2024
2023
1,966,140
$ 1,541,212
$ 233,956)
$ 284,545)
($ 95,485
$ 132,196
$ YearendedDecmeber31,

(4) Reconciliation for segment income (loss)

Sales between segments are carried out at arm’s length. The revenue from external customers reported to the chief operating decision-maker is measured in a manner consistent with that in the statement of comprehensive income. A reconciliation of reportable segment income or loss to the income/(loss) before tax from continuing operations for the years ended December 31, 2024 and 2023 is provided as follows:

2023 is provided as follows:
YearendedDecmeber 31,
2024 2023
Reportable segments loss ($ 233,956) ($ 284,545)
Unappropriated amount:
Non-operating income and expenses 31,152 21,603
Loss before tax from continuing operations ($ 202,804) ($ 262,942)

(5) Information on products and services

The Company and its consolidated subsidiaries are engaged in manufacturing, process and sales of multi-layer and flexible printed circuit, which is the only single type of product.

(6) Geographical information

Geographical information for the years ended December 31, 2024 and 2023 is as follows:

Taiwan
China		 YearendedDecmeber31, YearendedDecmeber31, YearendedDecmeber31,
Non-current
Revenue
assets
438,631
$ 307,400
$ 1,527,509
120,059
1,966,140
$ 427,459
$ 2024		 2023
Revenue
438,631
$ 1,527,509
1,966,140
$		 Revenue
333,901
$ 1,207,311
1,541,212
$		 Non-current
assets
339,702
$ 123,985
463,687
$

~65~

(7) Major customer information

Major customer information of the Group for the years ended December 31, 2024 and 2023 is as follows:

ollows:
D company
A company
E company
F company
B company
C company		 YearendedDecmeber31,
Percentage
Revenue
of the account
577,503
$ 29%
547,886
28%
174,750
9%
90,086
5%
24,326
1%
1,291
0%
2024		 2023
Revenue
577,503
$ 547,886
174,750
90,086
24,326
1,291		 Revenue
471,774
$ 200,680
191,129
33,854
64,732
147,965		 Percentage
of the account
31%
13%
12%
2%
4%
10%

(Remainder of page intentionally left blank)

~66~

Uniflex Technology Inc. and subsidiaries

Loans to others

Year ended December 31, 2024

Table 1

Expressed in thousands of NTD (Except as otherwise indicated)

Maximum
outstanding
General
Is a
balance during
No.
ledger
related
the year ended
(Note 1)
Creditor
Borrower
account
party
December 31,2024		 Nature of

Balance at June
Actual amount
Interest
loan
December 31, 2024
drawn down
rate
(Note 2)
2,474
$ 2,463
$ When the interest
rates are drawn
based on the actual
loaned facility, the
market interest
rates will be
adjusted flexibly.
2		 Amount of
transactions
Reason
with the
for short-term
borrower
financing
-
$ Working capital		 Allowance
for
doubtful
accounts		 Coll ateral Limit on loans
granted to
a single party
(Note 3)		 Ceiling on
total loans
granted
(Note 3)		 Footnote
Item Value
1
Uniflex
Investment
Limited.
UNIFLEX
TECHNOLOGY
INC.
Other receivables
Yes
2,477
$		 -
$		 None -
$		 2,459,112 3,073,890

Note 1: The numbers filled in for the loans provided by the Company or subsidiaries are as follows:

  • (1)The Company is ‘0’.

  • (2)The subsidiaries are numbered in order starting from ‘1’.

Note 2: Fill in the nature of the loan as follows:

  • (1)Business transaction is labelled as “1”.

  • (2)Short-term financing is labelled as “2”.

Note 3: The calculation of the capital loans of the Company and its subsidiaries and the individual items and the total amount shall be in accordance with the "Procedures for Provision of Loans" stipulated by the Company and its subsidiaries.

For the companies having business relationship with the Company, financial limit on total loans shall not exceed the amount of business transactions occurred between the creditor and borrower in the most recent year.

For the companies having business relationship with the Company, financial limit on loans granted to a single party shall not exceed the amount of business transactions occurred between the creditor and borrower in the most recent year. Limit on loans to a single party with business transactions is the higher value of purchasing and selling during current year on the year of financing.

For short-term financing, the ceiling on total loans granted does not exceed 40% of the creditors’ net assets, limit on loans granted to a single party should not exceed 40% of the Company’s net assets.

For the foreign companies which the Company holds 100% of the voting rights directly or indirectly, limit on total loans shall not exceed 500% of the Company's net assets. For the foreign companies which the Company holds 100% of the voting rights directly or indirectly, limit on loans granted to a single party is 500% of the Company's net assets.

Note 4: The facility aprroved by the Board of Directors was consistent with the actual loaned facility.

Table 1, Page 1

Uniflex Technology Inc. and subsidiaries

Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures)

December 31, 2024

Table 2

Expressed in thousands of NTD (Except as otherwise indicated)

Securities held by Marketable securities Relationshipwith the securities issuer General ledger account As of December 31,2024 As of December 31,2024 Footnote
Number of shares
(in thousand shares)		 Book value Ownership (%) Fair value
UNIFLEX TECHNOLOGY INC.
UNIFLEX TECHNOLOGY INC.
UNIFLEX TECHNOLOGY INC.		 MARUWA CORPORATION's
bonds
Umt Technology Corp.
Pomiran Metalization Research
Co., Ltd.		 Companies invested by the parent
company of any corporate director
of the Company
None
None		 Financial assets at fair value
through other comprehensive
income - non-current
Financial assets at fair value
through other comprehensive
income - non-current
Financial assets at fair value
through other comprehensive
income - non-current		 -
-
1		 -
$ -
-		 0
19.83
0.01		 -
$ -
-

Table 1, Page 1

Uniflex Technology Inc. and subsidiaries

Purchases or sales of goods from or to related parties reaching NT$100 million or 20% of paid-in capital or more

Year ended December 31, 2024

Table 3
Purchaser/seller		 Counterparty Relationship with the
counterparty		 Transaction Transaction partytransactions
Differences in transaction
terms compared to third		 partytransactions
Differences in transaction
terms compared to third		 Notes and accoun Percentage of
total notes/accounts
receivable
(payable) (%)
Footnote
ts receivable(payable)
Expressed in thousands of NTD
(Except as otherwise indicated)		 Percentage of
total notes/accounts
receivable
(payable) (%)
Footnote
ts receivable(payable)
Expressed in thousands of NTD
(Except as otherwise indicated)
Purchases
(sales)		 Amount Percentage of
total purchases
(sales) (%)		 Credit term Unitprice Credit term Balance Percentage of
total notes/accounts
receivable
(payable) (%)
UNIFLEX TECHNOLOGY
INC.
Uniflex Technology
(JiangSu) Limited		 Uniflex Technology
(JiangSu) Limited
UNIFLEX TECHNOLOGY
INC.		 The Company’s
second-tier subsidiary
The Company’s parent
company		 Purchase
(Sales)		 530,072
$ 530,072)
(		 62
44)
(		 Collection of payments
based on capital needs
Collection of payments
based on capital needs		 Note 1
Note 1		 Note 1
Note 1		 505,291)
($ 505,291		 81)
(
60

Note 1: The transaction price is negotiated by both parties, and the terms of collection and payment are determined according to the Company's capital needs.

Table 1, Page 1

Uniflex Technology Inc. and subsidiaries

Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more

Year ended December 31, 2024

Table 4

Expressed in thousands of NTD (Except as otherwise indicated)

Creditor Counterparty Relationship
with the counterparty		 Balance as at
December31,2024		 Turnover rate Overdue receivables Overdue receivables Amount collected
subsequent to the
balance sheet date		 Allowance for
doubtful accounts
Amount Action taken
Uniflex Technology (JiangSu)
Limited		 UNIFLEX TECHNOLOGY INC. Parent company of
the Company		 505,291
$		 0.97 -
$		 - 99,692
$

Table 1, Page 1

Uniflex Technology Inc. and subsidiaries

Table 5

Significant inter-company transactions during the reporting periods

Year ended December 31, 2024

Expressed in thousands of NTD (Except as otherwise indicated)

Number
(Note 1)		 Companyname Counterparty Relationship (Note 2) Transaction Transaction
General ledger account Amount Transaction terms Percentage of
consolidated total
operating revenues or
total assets(Note3)
1
1		 Uniflex Technology (JiangSu) Limited
Uniflex Technology (JiangSu) Limited		 UNIFLEX TECHNOLOGY INC.
UNIFLEX TECHNOLOGY INC.		 2
2		 Sales revenue
Accounts receivable		 530,072
$ 505,291		 Collect or payment according
to the financial needs
"		 26.96%
26.97%

Note 1: The numbers filled in for the transaction company in respect of inter-company transactions are as follows:

  • (1) Parent company is ‘0’.

  • (2) The subsidiaries are numbered in order starting from ‘1’.

  • Note 2: Relationship between transaction company and counterparty is classified into the following three categories; fill in the number of category each case belongs to (If transactions between parent company and subsidiaries or between subsidiaries refer to the same transaction, it is not required to disclose twice. For example, if the parent company has already disclosed its transaction with a subsidiary, then the subsidiary is not required to disclose the transaction; for transactions between two subsidiaries, if one of the subsidiaries has disclosed the transaction, then the other is not required to disclose the transaction.):

  • (1) Parent company to subsidiary.

  • (2) Subsidiary to parent company.

  • (3) Subsidiary to subsidiary.

  • Note 3: Regarding percentage of transaction amount to consolidated total operating revenues or total assets, it is computed based on period-end balance of transaction to consolidated total assets for balance sheet accounts and based on accumulated transaction amount base on period-end of consolidated total operating revenues for income statement accounts.

Table 1, Page 1

Uniflex Technology Inc. and subsidiaries

Table 6

Information on investees Year ended December 31, 2024

Expressed in thousands of NTD (Except as otherwise indicated)

Investor Investee Location Main business
activities		 Initial investment amount Initial investment amount Shares held as at December 31,2024 Shares held as at December 31,2024 Shares held as at December 31,2024 Net profit (loss)
of the investee for
the year ended
December 31,2024		 Investment income (loss)
recognised by the Company
for the year ended
December 31,2024		 Footnote
Balance as at
December 31,2024		 Balance as at
December 31,2023		 Number of shares Ownership Book value
UNIFLEX
TECHNOLOGY
INC.
UNIFLEX
TECHNOLOGY
INC.		 Uniflex Investment
Limited
Uniflex Group
Limited		 British Virgin
Islands
British Virgin
Islands		 Holding Company
Holding Company		 1,032,570
$ 11,231		 1,032,570
$ 11,231		 22,517
1,100		 100%
100%		 614,778
$ -		 9,925
$ -		 9,925
$ -		 Note 1
Note 1

Note 1: It is recognized based on the evaluation for financial statements audited by the parent company's CPAs in Taiwan.

Table 1, Page 1

Table 7

Uniflex Technology Inc. and subsidiaries

Information on investments in Mainland China Year ended December 31, 2024

Expressed in thousands of NTD (Except as otherwise indicated)

Investee in
Mainland China		 Main business
activities		 Paid-in capital Investment
method
(Note 1)		 Accumulated
amount of
remittance from
Taiwan to
Mainland China
as of January 1,
2024		 Amount remitted
to Mainlan
Amount rem
to Taiwan
year ended Dece		 from Taiwan
d China/
itted back
for the
mber 31,2024		 Accumulated
amount of
remittance from
Taiwan to
Mainland China
as of
December 31,2024		 Net income of
investee for the
year ended
December 31,2024		 Ownership
held by the
Company
(direct or indirect)		 Investment income
(loss) recognised
by the Company
for the year ended
December31, 2024
(Note 2)		 Book value of
investments in
Mainland China
as of
December 31,2024		 Accumulated
amount
of investment
income
remitted back to
Taiwan as of
December 31,2024		 Footnote
Remitted to
Mainland China		 Remitted back
to Taiwan
Unipoint Technology
(KunShan) Corp.
Uniflex Technology
(JIANGSU) Limited
Companyn		 Manufacture and
sale of electronic
parts
Production and
sales of FPC
ame		 39,664
$ 983,400
from Taiwan to
Accumulated am
as of Decem		 (3)
(2)
Mainland China
ount of remittance
ber 31,2024		 7,867
$ 858,225
Investment am
Economic Af
Commission of
by the In		 -
$ -
ount approved
fairs(MOEA)
the Ministry of
vestment		 -
$ 7,867
$ -
858,225
imposed by the Investment
in Mainland China
Ceiling on investments
Commission of MOEA		 -
$ 9,960		 19.83
100.00		 -
$ 9,960		 -
$ 612,267		 -
$ -		 Note 2
Note 3
Uniflex Technology Inc. $ 1,098,800
 $ 1,098,800
 Note 4

Note 1: Investment methods are classified into the following three categories; fill in the number of category each case belongs to:

  • (1) Directly invest in a company in Mainland China

  • (2) Through investing in an existing company in the third area, which then invested in the investee in Mainland China. ( invested companies in third regions: Uniflex Investment Limited and Uniflex Group Limited)

Note 2: It has been assessed that it is impossible for Unipoint Technology(KunShan) Corp. to actually operate, and the Company has recognized the full amount as an investment loss.

Note 3: Uniflex (JiangSu) is recognized based on the evaluation for financial statements audited by the parent company's CPAs in Taiwan.

Note 4: The Company met the scope of operation made by the headquarter, thus, no limit was applicable on the Company's investments in Mainland China in accordance with "Regulations Governing the Permission of Investment or Technical Cooperation in Mainland Area" effective August 1, 2008.

Table 1, Page 1

Uniflex Technology Inc. and subsidiaries

Major shareholders information

December 31, 2024

Table 8

Expressed in thousands of NTD (Except as otherwise indicated)

(Except as otherwise indicated) (Except as otherwise indicated)
Name of major shareholders Shares
Number of shares held Ownership (%)
Unimicron Technology Corp.
Hsin Yang Investment Corp.
Taiwan Surface Mounting Technology Corp.		 12,989,716
10,885,165
7,454,497		 13.36%
11.20%
7.67%

Table 1, Page 1

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