Except bonds payable measured at amortized cost, the management considered that the carrying amounts of financial assets and financial liabilities not measured at fair value approximate their fair values. The carrying amounts and fair value of bonds payable as of December 31, 2024 and 2025 were as follows:

 

 

The aforementioned fair value hierarchy of bonds payable was Level 3 which was determined based on discounted cash flow analysis with the applicable yield curve for the duration. The significant unobservable inputs is discount rates that reflected the credit risk.

 

		Level 1				Level 2				Level 3				Total
		NT$				NT$				NT$				NT$
Financial assets at FVTPL
Derivative financial assets
Swap contracts		$	-			$	4,282,512			$	-			$	4,282,512
Forward exchange contracts			-				258,362				-				258,362
Non-derivative financial assets
Quoted shares			2,898,751				-				-				2,898,751
Private-placement funds			-				-				1,503,382				1,503,382
Unquoted shares			-				-				863,484				863,484
Open-end mutual funds			590,346				-				-				590,346
Hybrid financial assets
Convertible notes			-				-				360,635				360,635
Others			-				-				74,570				74,570
		$	3,489,097			$	4,540,874			$	2,802,071			$	10,832,042
Financial assets at FVTOCI
Investments in equity instruments
Unquoted ordinary shares		$	-			$	-			$	12,846,151			$	12,846,151
TIB quoted ordinary shares			72,774				-				-				72,774
Unquoted preferred shares			-				-				14,808				14,808
Investments in debt instruments
Unsecured cumulative subordinate corporate bonds			-				-				1,025,760				1,025,760
Trade receivables, net			-				-				6,532,508				6,532,508
		$	72,774			$	-			$	20,419,227			$	20,492,001
Financial liabilities at FVTPL
Derivative financial liabilities
Swap contracts		$	-			$	179,967			$	-			$	179,967
Forward exchange contracts			-				63,785				-				63,785
Contingent considerations			-				-				589,117				589,117
		$	-			$	243,752			$	589,117			$	832,869
											(Continued)

 

 

		Level 1				Level 2				Level 3				Total
		NT$				NT$				NT$				NT$
Financial assets at FVTPL
Derivative financial assets
Swap contracts		$	-			$	3,412,108			$	-			$	3,412,108
Forward exchange contracts			-				248,813				-				248,813
Non-derivative financial assets
Quoted shares			2,277,680				-				-				2,277,680
Private-placement funds			-				-				1,435,095				1,435,095
Open-end mutual funds			971,952				-				-				971,952
Unquoted shares			-				-				822,065				822,065
Others			-				-				161,150				161,150
Hybrid financial assets
Equity-linked structured products			-				-				497,899				497,899
Convertible notes			-				-				345,730				345,730
Others			-				-				15,000				15,000
		$	3,249,632			$	3,660,921			$	3,276,939			$	10,187,492
Financial assets at FVTOCI
Investments in equity instruments
Unquoted ordinary shares		$	-			$	-			$	12,546,772			$	12,546,772
TIB quoted ordinary shares			47,934				-				-				47,934
Unquoted preferred shares			-				-				12,408				12,408
Investments in debt instruments
Unsecured cumulative subordinate corporate bonds			-				-				1,008,140				1,008,140
Trade receivables, net			-				-				6,182,804				6,182,804
		$	47,934			$	-			$	19,750,124			$	19,798,058
Financial liabilities at FVTPL
Derivative financial liabilities
Swap contracts		$	-			$	736,231			$	-			$	736,231
Forward exchange contracts			-				75,438				-				75,438
Accumulator contracts			-				-				13,751				13,751
Contingent considerations			-				-				569,948				569,948
		$	-			$	811,669			$	583,699			$	1,395,368
															(Concluded	)

 

		Level 1				Level 2				Level 3				Total
		US$ (Note 4)				US$ (Note 4)				US$ (Note 4)				US$ (Note 4)
Financial assets at FVTPL
Derivative financial assets
Swap contracts		$	-			$	108,770			$	-			$	108,770
Forward exchange contracts			-				7,932				-				7,932
Non-derivative financial assets
Quoted shares			72,607				-				-				72,607
Private-placement funds			-				-				45,747				45,747
Open-end mutual funds			30,983				-				-				30,983
Unquoted shares			-				-				26,205				26,205
Others			-				-				5,138				5,138
Hybrid financial assets
Equity-linked structured products			-				-				15,872				15,872
Convertible notes			-				-				11,021				11,021
Others			-				-				478				478
		$	103,590			$	116,702			$	104,461			$	324,753
Financial assets at FVTOCI
Investments in equity instruments
Unquoted ordinary shares		$	-			$	-			$	399,961			$	399,961
TIB quoted ordinary shares			1,528				-				-				1,528
Unquoted preferred shares			-				-				396				396
Investments in debt instruments
Unsecured cumulative subordinate corporate bonds			-				-				32,137				32,137
Trade receivables, net			-				-				197,093				197,093
		$	1,528			$	-			$	629,587			$	631,115
Financial liabilities at FVTPL
Derivative financial liabilities
Swap contracts		$	-			$	23,469			$	-			$	23,469
Forward exchange contracts			-				2,405				-				2,405
Accumulator contracts			-				-				438				438
Contingent considerations			-				-				18,169				18,169
		$	-			$	25,874			$	18,607			$	44,481

For the financial assets and liabilities that were measured at fair value on a recurring basis, there were no transfers between Level 1 and Level 2 of the fair value hierarchy during the years ended December 31, 2024 and 2025.

 

 

		Financial Assets at FVTPL												Financial Assets at FVTOCI
Financial Assets		Equity Instruments				Debt Instruments				Hybrid Instruments				Equity Instruments				Debt Instruments				Total
		NT$				NT$				NT$				NT$				NT$				NT$
Balance at January 1		$	2,666,264			$	-			$	-			$	436,876			$	6,462,426			$	9,565,566
Recognized in profit or loss			(83,239	)			-				(113	)			-				-				(83,352	)
Recognized in other comprehensive income
Unrealized gains (losses) on financial assets at FVTOCI			-				-				-				215,914				(16,807	)			199,107
Effects of foreign currency exchange			5,053				-				-				1,605				-				6,658
Net increase in trade receivables			-				5,778,078				-				-				234,772				6,012,850
Trade receivables factored			-				(5,778,078	)			-				-				-				(5,778,078	)
Purchases			637,767				-				61,523				184,484				-				883,774
Disposal of subsidiary (Note 30)			-				-				-				(29,572	)			-				(29,572	)
Disposals			(681,870	)			-				-				(188,476	)			-				(870,346	)
Balance at December 31		$	2,543,975			$	-			$	61,410			$	620,831			$	6,680,391			$	9,906,607

 

		Financial Assets at FVTPL												Financial Assets at FVTOCI
Financial Assets		Equity Instruments				Debt Instruments				Hybrid Instruments				Equity Instruments				Debt Instruments				Total
		NT$				NT$				NT$				NT$				NT$				NT$
Balance at January 1		$	2,543,975			$	-			$	61,410			$	620,831			$	6,680,391			$	9,906,607
Recognized in profit or loss			(352,120	)			-				8,300				-				-				(343,820	)
Recognized in other comprehensive income
Unrealized losses on financial assets at FVTOCI			-				-				-				(9,397	)			(17,146	)			(26,543	)
Effects of foreign currency exchange			137,556				-				2,270				336,580				-				476,406
Net increase in trade receivables			-				1,167,287				-				-				895,023				2,062,310
Trade receivables factored			-				(1,167,287	)			-				-				-				(1,167,287	)
Transferred out of Level 3			-				-				-				(53,360	)			-				(53,360	)
Purchases			177,813				-				363,225				12,150,760				-				12,691,798
Disposals			(140,358	)			-				-				(184,455	)			-				(324,813	)
Balance at December 31		$	2,366,866			$	-			$	435,205			$	12,860,959			$	7,558,268			$	23,221,298

 

						Financial Assets at FVTPL								Financial Assets at FVTOCI
Financial Assets						Equity Instruments				Hybrid Instruments				Equity Instruments				Debt Instruments				Total
						NT$				NT$				NT$				NT$				NT$
Balance at January 1						$	2,366,866			$	435,205			$	12,860,959			$	7,558,268			$	23,221,298
Recognized in profit or loss							196,009				(76,798	)			-				-				119,211
Recognized in other comprehensive income
Unrealized losses on financial assets at FVTOCI							-				-				(207,646	)			(17,620	)			(225,266	)
Effects of foreign currency exchange							(95,920	)			(4,818	)			(539,732	)			-				(640,470	)
Net decrease in trade receivables							-				-				-				(349,704	)			(349,704	)
Acquisitions through business combinations							-				-				357				-				357
Reclassification							30,639				-				-				-				30,639
Purchases							194,150				2,132,740				478,350				-				2,805,240
Disposals							(273,434	)			(1,627,700	)			(33,108	)			-				(1,934,242	)
Balance at December 31						$	2,418,310			$	858,629			$	12,559,180			$	7,190,944			$	23,027,063

 

						Financial Assets at FVTPL								Financial Assets at FVTOCI
Financial Assets						Equity Instruments				Hybrid Instruments				Equity Instruments				Debt Instruments				Total
						US$ (Note 4)				US$ (Note 4)				US$ (Note 4)				US$ (Note 4)				US$ (Note 4)
Balance at January 1						$	75,450			$	13,873			$	409,976			$	240,939			$	740,238
Recognized in profit or loss							6,248				(2,448	)			-				-				3,800
Recognized in other comprehensive income
Unrealized losses on financial assets at FVTOCI							-				-				(6,619	)			(562	)			(7,181	)
Effects of foreign currency exchange							(3,058	)			(154	)			(17,205	)			-				(20,417	)
Net decrease in trade receivables							-				-				-				(11,147	)			(11,147	)
Effects of foreign currency exchange							-				-				11				-				11
Reclassification							977				-				-				-				977
Purchases							6,189				67,987				15,249				-				89,425
Disposals							(8,716	)			(51,887	)			(1,055	)			-				(61,658	)
Balance at December 31						$	77,090			$	27,371			$	400,357			$	229,230			$	734,048

 

 

 

Financial Instruments		Valuation Techniques and Inputs
Derivatives - swap contracts and forward exchange contracts		Discounted cash flows - Future cash flows are estimated based on observable forward exchange rates at balance sheet dates and contract forward exchange rates, discounted at rates that reflected the credit risk of various counterparties.

 

153010.1157,80026,700851

 

 

		December 31
		2024				2025
		NT$				NT$				US$ (Note 4)
Financial assets
FVTPL
Mandatorily at FVTPL		$	10,832,042			$	10,187,492			$	324,753
Measured at amortized cost (Note 1)			191,953,553				219,695,988				7,003,379
FVTOCI
Equity instruments			12,933,733				12,607,114				401,885
Debt instruments			1,025,760				1,008,140				32,137
Trade receivables, net			6,532,508				6,182,804				197,093
Financial liabilities
FVTPL
Held for trading			243,752				825,420				26,312
Contingent considerations			589,117				569,948				18,169
Financial liabilities for hedging			12,456,104				9,282,400				295,901
Measured at amortized cost (Note 2)			344,543,769				459,199,442				14,638,172

 

 

 

The derivative instruments used by the Group were to mitigate risks arising from ordinary business operations. All derivative transactions entered into by the Group were designated as either hedging or trading. Derivative transactions entered into for hedging purposes must hedge risk against fluctuations in foreign exchange rates and interest rates arising from operating activities. The currencies and the amount of derivative instruments held by the Group must match its hedged assets and liabilities denominated in foreign currencies.

The Group’s risk management department monitored risks to mitigate risk exposures, reported unsettled position, transaction balances and related gains or losses to the Group’s chief financial officer on monthly basis.

 

The Group’s activities exposed it primarily to the financial risks of changes in foreign currency exchange rates and interest rates. Gains or losses arising from fluctuations in foreign currency exchange rates of a variety of derivative financial instruments were approximately offset by those of hedged items. Interest rate risk was not significant due to the cost of capital was expected to be fixed.

There had been no change to the Group’s exposure to market risks or the manner in which these risks were managed and measured.

 

The Group had sales and purchases as well as investing and financing activities denominated in foreign currency which exposed the Group to foreign currency exchange rate risk. The Group entered into a variety of derivative financial instruments to hedge foreign currency exchange rate risk to minimize the fluctuations of assets and liabilities denominated in foreign currencies.

The carrying amounts of the Group’s foreign currency denominated monetary assets and liabilities (including those eliminated upon consolidation) as well as derivative instruments which exposed the Group to foreign currency exchange rate risk at each balance sheet date are presented in Note 40.

The Group was mainly subject to the impact from the exchange rate fluctuation in US$ and JPY against NT$, RMB or EUR. 1% fluctuation is used when reporting foreign currency exchange rate risk internally to key management personnel and represents management’s assessment of the reasonably possible change in foreign currency exchange rates. The sensitivity analysis included financial assets and liabilities and inter-company receivables and payables within the Group. The changes in profit before income tax due to a 1% change in US$ and JPY against NT$, RMB and EUR would be NT$148,000 thousand, NT$274,000 thousand and NT$149,000 thousand (US$4,750 thousand) for the years ended December 31, 2023, 2024 and 2025, respectively. Hedging contracts and hedged items have been taken into account while measuring the changes in profit before income tax. The abovementioned sensitivity analysis mainly focused on the foreign currency monetary items at each balance sheet date. As the year-end exposure did not reflect the exposure for the years ended December 31, 2023, 2024 and 2025, the abovementioned sensitivity analysis was unrepresentative of those respective years.

The Group’s hedging strategy was to lift borrowings denominated in foreign currencies to avoid exchange rate exposure from its investments in equity instruments denominated in foreign currencies (recognized under the line item of financial assets at FVTPL) and net investment in foreign subsidiary, Universal Scientific Industrial (France), which has EUR as its functional currency. Those transactions were designated as fair value hedges and a hedge of net investment in foreign operation, respectively. Hedge adjustments were made to totally offset the foreign exchange gains or losses from those equity instruments denominated in foreign currencies and foreign operations when they were evaluated based on the exchange rates on each balance sheet date.

The source of hedge ineffectiveness in these hedging relationships arose from the material difference between the notional amounts of borrowings denominated in foreign currencies and the fair value of investments in equity instruments denominated in foreign currencies and net investment in foreign operations. No other sources of ineffectiveness is expected to emerge from these hedging relationships.

 

 

Hedging Instrument/ Hedged Items		Line item in Balance sheet		Carrying Amount
				Asset				Liability
				NT$				NT$
Fair value hedge
Borrowings denominated in foreign currencies/ Financial assets at FVTPL		Financial liabilities for hedging - current		$	-			$	3,515,265
Hedge of net investment in foreign operation		Financial liabilities for hedging - current			-				8,940,839

 

		Change in Value Used for Calculating Hedge Ineffectiveness								Accumulated Gains or Losses in Other Equity								Carrying Amount of Hedged Item in Fair Value Hedge				Accumulated Amount of Fair Value Hedge Adjustments on Hedged Item
Hedging Instrument/ Hedged Item		Hedging Instrument				Hedged Item				Continuing Hedges				Hedge Accounting No Longer Applied				Asset				Asset
		NT$				NT$				NT$				NT$				NT$				NT$
Fair value hedge
Borrowings denominated in foreign currencies/ Financial assets at FVTPL		$	(243,954	)		$	243,954			$	-			$	-			$	2,834,608			$	323,983
Hedge of net investment in foreign operation			(562,598	)			562,598				923,574				-				-				-

 

Hedging Instrument/ Hedged Items

Line item in Balance sheet

Carrying Amount

Asset

Liability

NT$

US$ (Note 4)

NT$

US$ (Note 4)

Fair value hedge

Borrowings denominated in foreign currencies/ Financial assets at FVTPL

Financial liabilities for hedging - current

$   -

$   -

$   843,838

$ 26,900

Hedge of net investment in foreign operation

Financial liabilities for hedging - current

-

-

8,438,562

269,001

 

		Change in Value Used for Calculating Hedge Ineffectiveness								Accumulated Gains or Losses in Other Equity								Carrying Amount of Hedged Item in Fair Value Hedge				Accumulated Amount of Fair Value Hedge Adjustments on Hedged Item
Hedging Instrument/ Hedged Item		Hedging Instrument				Hedged Item				Continuing Hedges				Hedge Accounting No Longer Applied				Asset				Liability
		NT$				NT$				NT$				NT$				NT$				NT$
Fair value hedge
Borrowings denominated in foreign currencies/ Financial assets at FVTPL			$    (17,414	)			$    17,414				$    -				$    -				$    964,637				$    15,749
Hedge of net investment in foreign operation			1,117,589				(1,117,589	)			(194,015	)			-				-				-
		Change in Value Used for Calculating Hedge Ineffectiveness								Accumulated Gains or Losses in Other Equity								Carrying Amount of Hedged Item in Fair Value Hedge				Accumulated Amount of Fair Value Hedge Adjustments on Hedged Item
Hedging Instrument/ Hedged Item		Hedging Instrument				Hedged Item				Continuing Hedges				Hedge Accounting No Longer Applied				Asset				Liability
		US$ (Note 4)				US$ (Note 4)				US$ (Note 4)				US$ (Note 4)				US$ (Note 4)				US$ (Note 4)
Fair value hedge
Borrowings denominated in foreign currencies/ Financial assets at FVTPL			$    (555	)			$    555				$    -				$    -				$    30,750				$    502
Hedge of net investment in foreign operation			35,626				(35,626	)			(6,185	)			-				-				-

Except a portion of long-term borrowings and bonds payable at fixed interest rates, the Group was exposed to interest rate risk because group entities borrowed funds at floating interest rates. Changes in market interest rates led to variances in effective interest rates of borrowings from which the future cash flow fluctuations arise. The Group utilized financing instruments with low interest rates and favorable terms to maintain low financing cost, adequate banking facilities, as well as to hedge interest rate risk.

The carrying amounts of the Group’s financial assets and financial liabilities with exposure to interest rates at each balance sheet date were as follows:

For assets and liabilities with floating interest rates, a 100 basis point increase or decrease was used when reporting interest rate risk internally to key management personnel. If interest rates had been 100 basis points (1%) higher or lower and all other variables held constant, the Group’s profit before income tax for the years ended December 31, 2023, 2024 and 2025 would have decreased or increased approximately by NT$660,000 thousand, NT$1,049,000 thousand and NT$1,833,000 thousand (US$58,432 thousand), respectively.

 

The Group was exposed to equity price risk through its investments in financial assets at FVTPL and financial assets at FVTOCI. If equity price was 1% higher or lower, profit before income tax for the years ended December 31, 2023, 2024 and 2025 would have increased or decreased approximately by NT$46,500 thousand, NT$53,000 thousand and NT$50,000 thousand (US$1,594 thousand), respectively, and other comprehensive income before income tax for the years ended December 31, 2023, 2024 and 2025 would have increased or decreased approximately by NT$6,000 thousand, NT$129,000 thousand and NT$126,000 thousand (US$4,017 thousand), respectively.

 

Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in financial loss to the Group. The Group’s credit risk arises from cash and cash equivalents, contract assets, trade and other receivables and other financial assets. The Group’s maximum exposure to credit risk was the carrying amounts of financial assets in the consolidated balance sheets.

As of December 31, 2024 and 2025, the Group’s ten largest customers accounted for 47% and 50% of trade receivables, respectively. The Group transacts with a large number of unrelated customers and, thus, no concentration of credit risk was observed.

 

The Group manages liquidity risk by maintaining adequate working capital and banking facilities to fulfill the demand for cash flow used in the Group’s operation and capital expenditure. The Group also monitors its compliance with all the loan covenants. Liquidity risk is not considered to be significant.

In the table below, financial liabilities with a repayment on demand clause were included in the earliest time band regardless of the probability of counter-parties choosing to exercise their rights. The maturity dates for other non-derivative financial liabilities were based on the agreed repayment dates.

To the extent that interest flows are floating rate, the undiscounted amounts were derived from the interest rates at each balance sheet date.

 

		On Demand or Less than 1 Month				1 to 3 Months				3 Months to 1 Year				1 to 5 Years				More than 5 Years
		NT$				NT$				NT$				NT$				NT$
Non-derivative financial liabilities
Non-interest bearing		$	66,577,698			$	39,954,390			$	18,126,780			$	4,707,506			$	1,177,870
Obligation under leases			167,887				185,848				801,002				2,676,514				5,572,038
Floating interest rate liabilities			9,865,888				15,650,230				13,152,601				115,539,867				7,894,775
Fixed interest rate liabilities			5,163,326				11,011,781				16,702,747				23,210,093				-
		$	81,774,799			$	66,802,249			$	48,783,130			$	146,133,980			$	14,644,683

		Less than 1 Year								1 to 5 Years								5 to 10 Years								10 to 15 Years								15 to 20 Years								More than 20 Years
		NT$								NT$								NT$								NT$								NT$								NT$
Obligation under leases		$	1,154,737							$	2,676,514							$	1,964,781							$	951,983							$	917,034							$	1,738,240

		On Demand or Less than 1 Month				1 to 3 Months				3 Months to 1 Year				1 to 5 Years				More than 5 Years
		NT$				NT$				NT$				NT$				NT$
Non-derivative financial liabilities
Non-interest bearing		$	75,853,604			$	46,653,157			$	23,722,468			$	34,607,140			$	68,696
Obligation under leases			128,731				210,673				841,489				3,048,712				7,384,494
Floating interest rate liabilities			19,644,085				6,892,644				9,202,843				200,799,083				6,380,428
Fixed interest rate liabilities			10,637,451				5,080,186				4,875,149				14,702,446				-
		$	106,263,871			$	58,836,660			$	38,641,949			$	253,157,381			$	13,833,618
		On Demand or Less than 1 Month				1 to 3 Months				3 Months to 1 Year				1 to 5 Years				More than 5 Years
		US$ (Note 4)				US$ (Note 4)				US$ (Note 4)				US$ (Note 4)				US$ (Note 4)
Non-derivative financial liabilities
Non-interest bearing		$	2,418,030			$	1,487,190			$	756,215			$	1,103,192			$	2,190
Obligation under leases			4,104				6,716				26,825				97,186				235,400
Floating interest rate liabilities			626,206				219,721				293,364				6,400,991				203,393
Fixed interest rate liabilities			339,096				161,944				155,408				468,678				-
		$	3,387,436			$	1,875,571			$	1,231,812			$	8,070,047			$	440,983

 

Further information for maturity analysis of obligation under leases was as follows:

		Less than 1 Year								1 to 5 Years								5 to 10 Years								10 to 15 Years								15 to 20 Years								More than 20 Years
		NT$								NT$								NT$								NT$								NT$								NT$
Obligation under leases		$	1,180,893							$	3,048,712							$	1,817,587							$	1,281,842							$	1,203,233							$	3,081,832
		Less than 1 Year								1 to 5 Years								5 to 10 Years								10 to 15 Years								15 to 20 Years								More than 20 Years
		US$ (Note 4)								US$ (Note 4)								US$ (Note 4)								US$ (Note 4)								US$ (Note 4)								US$ (Note 4)
Obligation under leases		$	37,645							$	97,186							$	57,940							$	40,862							$	38,356							$	98,242