AACL - Audit Report / Information 2024

Stock Code:2630

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) AIR ASIA CO., LTD.

Parent Company Only Financial Statements

With Independent Auditors’ Report For the Years Ended December 31, 2024 and 2023

Address: No. 1050, Jichang Rd., Rende Dist., Tainan City, Taiwan, R.O.C. Telephone: (06)2681911

The independent auditors’ report and the accompanying parent company only financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language independent auditors’ report and parent company only financial statements, the Chinese version shall prevail.

Contents
1. Cover Page
2. Table of Contents
3. Independent Auditors’ Report
4. Balance Sheets
5. Statements of Comprehensive Income
6. Statements of Changes in Equity
7. Statements of Cash Flows
8. Notes to the Parent Company Only Financial Statements
(1)
Company history
(2)
Approval date and procedures of the financial statements
(3)
New standards, amendments and interpretations adopted
(4)
Summary of material policies
(5)
Significant accounting assumptions and judgments, and major sources of
estimation uncertainty
(6)
Explanation of significant accounts
(7)
Related-party transactions
(8)
Pledged assets
(9)
Significant commitments and contingencies
(10) Losses Due to Major Disasters
(11) Subsequent Events
(12) Other
(13) Other disclosures
(a) Information on significant transactions
(b) Information on investees
(c) Information on investment in mainland China
(d) Major shareholders
(14) Segment information
9. Statements of significant account Page

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Contents 1. Cover Page 2. Table of Contents 3. Independent Auditors’ Report 4. Balance Sheets 5. Statements of Comprehensive Income 6. Statements of Changes in Equity 7. Statements of Cash Flows 8. Notes to the Parent Company Only Financial Statements (1) Company history (2) Approval date and procedures of the financial statements (3) New standards, amendments and interpretations adopted (4) Summary of material policies (5) Significant accounting assumptions and judgments, and major sources of estimation uncertainty (6) Explanation of significant accounts (7) Related-party transactions (8) Pledged assets (9) Significant commitments and contingencies (10) Losses Due to Major Disasters (11) Subsequent Events (12) Other (13) Other disclosures (a) Information on significant transactions (b) Information on investees (c) Information on investment in mainland China (d) Major shareholders (14) Segment information 9. Statements of significant account	Page
	1 2 3 4 5 6 7 8 8 8`～`10 10`～`27 27 28`～`54 54`～`55 55 55 55 55 56`～`57 57`～`58 58 58 58 58 59`～`71

Independent Auditors’ Report

To the Board of Directors of AIR ASIA CO., LTD.:

Opinion

We have audited the financial statements of AIR ASIA CO., LTD.(“the Company”), which comprise the balance sheet as of December 31, 2024 and 2023, the statement of comprehensive income, changes in equity and cash flows for the years then ended, and notes to the financial statements, including a summary of material accounting policies.

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and its financial performance and its cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing 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 Financial Statements section of our report. We are independent of the Company in accordance with The Norm of Professional Ethics for Certified Public Accountants 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 of our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.

1. Revenue recognition

Please refer to Note 4(n) “ Revenue recognition” , Note 5(a) “ Significant accounting assumptions and judgments, and major sources of estimation uncertainty” , and Note 6(t) “ Revenue from contracts with customers” to the financial statements.

Description of key audit matter:

Parts of the Company’s aircraft maintenance service and aircraft business maintenance management contracts recognize revenue when a performance obligation was satisfied over time. This method calculates the percentage of completion based on the goods and services transferred to the customer. As measuring the progress towards complete satisfaction of the performance obligation involves management’ s material judgement, we determined that the assessment of revenue recognition was one of the key areas our audit focused on.

3-1

How the matter was addressed in our audit procedures:

˙ Assessing and testing the effectiveness of the internal control design and execution regarding revenue recognition.
˙ Selecting material contracts as samples, inspecting revenue recognition terms and conditions of contracts, testing the material requisition record and employee time record to verify the correctness of actual input and verifying the correctness of the amount of revenue recognized.
˙ Sampling and performing a retrospective review to comparatively analyze the historical accuracy of judgments with reference to actual revenue in order to assess the rationality of the judgement and assumptions of the current period.
˙ Assessing whether the disclosure of revenue recognition was appropriate.
Valuation for slow-moving inventories

Please refer to Note 4(g) “Inventories”, Note 5(b) “Significant accounting assumptions and judgments, and major sources of estimation uncertainty”, and Note 6(e) “Inventories” to the financial statements.

Description of key audit matter:

The maintenance materials prepared by the Company to meet customer needs may lose their original benefits due to the obsolescence of aircraft models, causing inventories to became obsolete, resulting in a risk wherein the carrying value of inventories may exceed its net realizable value. Therefore, we determined that the valuation of slow-moving inventories was one of the key areas our audit focused on.

How the matter was addressed in our audit procedures:

˙ Understanding the obsolete inventories valuation policy used by management and comparing the actual status of obsolete inventories in the past to assess the accuracy of past management estimates.
˙ Acquiring inventories aging report, as well as sampling and verifying against inventories change documents to test the accuracy of inventories aging calculation.
˙ Recalculatin the provision for inventory and obsolescence based on the slow-moving inventories provision ratio applicable to the inventories age range.
˙ Assessing whether the disclosure of provision for inventory and obsolescence was appropriate.

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

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

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

Those charged with governance (including the Audit Committee) are responsible for overseeing the Company’s financial reporting process.

3-2

Auditors’ Responsibilities for the Audit of the Financial Statements

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

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:

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient and appropriate audit evidence regarding the financial information of the investment in other entities accounted for using the equity method to express an opinion on this financial statements. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion.

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

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

3-3

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

The engagement partners on the audit resulting in this independent auditors’ report are Su, Yen-Ta and Chen, Yung-Hsiang.

KPMG

Taipei, Taiwan (Republic of China) February 26, 2025

Notes to Readers

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

The independent auditors’ audit report and the accompanying parent company only financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language independent auditors’ audit report and parent company only financial statements, the Chinese version shall prevail.

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese)

AIR ASIA CO., LTD.

Balance Sheets

December 31, 2024 and 2023

(Expressed in Thousands of New Taiwan Dollars)

Assets Current assets: 1100 Cash and cash equivalents(note (6)(a)) 1139 Financial assets for hedging`－`current(note (6)(b)) 1140 Contract assets`－`current(note (6)(t)) 1170 Notes and trade receivables, net(notes (6)(c), (t)and (7)) 1200 Other receivables(note (6)(d)) 130X Inventories(notes (6)(b)and (e)) 1410 Prepayments(note (6)(f)) 1478 Refundable deposits`－`current(note (8)) 1479 Other current assets Total current assets Non-current assets: 1550 Investments accounted for using equity method 1600 Property, plant and equipment(notes (6)(g)and (8)) 1755 Right-of-use assets(note (6)(h)) 1780 Intangible assets(note (6)(i)) 1840 Deferred tax assets(note (6)(p)) 1955 Incremental costs of obtaining contracts`－`non-current(note (6)(t)) 1990 Other non-current assets(notes (6)(g), (j)and (8)) Total non-current assets Total assets	December 31, 2024 Amount % $ 152,289 3 2,630 - 1,364,969 24 1,411,862 24 2,604 - 1,348,862 23 125,978 2 88,381 2 5,585 - 4,503,160 78 3,261 - 822,121 14 222,646 4 6,617 - 53,863 1 11,943 - 143,246 3 1,263,697 22 $ 5,766,857 100	December 31, 2023 Amount % 251,055 5 793 - 1,181,069 21 1,445,016 26 2,119 - 1,051,800 19 141,324 3 113,866 2 29,387 1 4,216,429 77 3,164 - 756,171 14 244,666 5 14,509 - 53,944 1 13,428 - 174,680 3 1,260,562 23 5,476,991 100 December 31, 2024 Liabilities and Equity Amount % Current liabilities: 2100 Short-term loans(notes (6)(k)and (8)) $ 620,000 11 2126 Financial liabilities for hedging`－`current(note (6)(b)) - - 2130 Contract liabilities`－`current(note (6)(t)) 49,737 1 2170 Trade payables 480,087 8 2200 Other payables 303,074 5 2230 Current tax liabilities 37,530 1 2250 Provisions`－`current(note (6)(m)) 36,831 1 2280 Lease liabilities`－`current(note (6)(n)) 22,572 - 2320 Current portion of long-term loans(notes (6)(k)and (8)) 184,000 3 2399 Other current liabilities 8,727 - Total current liabilities 1,742,558 30 Non-Current liabilities: 2540 Long-term loans(notes (6)(k)and (8)) 364,000 7 2570 Deferred tax liabilities(note (6)(p)) 2,551 - 2580 Lease liabilities`－`non-current(note (6)(n)) 188,343 3 Total non-current liabilities 554,894 10 Total liabilities 2,297,452 40 Equity attributable to owners of the Company(notes (6)(b), (l), (p), (q)and (r)): 3110 Common stock 2,094,382 36 3200 Capital surplus 1,090,004 19 Retained earnings: 3310 Legal reserve 138,581 2 3320 Special reserve 3,420 - 3350 Unappropriated retained earnings 140,611 3 282,612 5 3400 Other equity 2,407 - Total equity 3,469,405 60 Total liabilities and equity $ 5,766,857 100	December 31, 2024		December 31, 2023
					Amount % 730,000 13 5,235 - 51,585 1 322,617 6 260,342 5 - - 29,651 1 21,277 - 134,750 2 14,553 - 1,570,010 28 271,000 5 - - 202,010 4 473,010 9 2,043,020 37 2,094,382 38 1,153,005 21 132,869 3 - - 57,135 1 190,004 4 (3,420) - 3,433,971 63 5,476,991 100

See accompanying notes to parent company only financial statements.

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese)

AIR ASIA CO., LTD.

Statements of Comprehensive Income

For the years ended December 31, 2024 and 2023

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

4000 Operating revenue(notes (6)(t)and (7)) 5000 Operating costs(notes (6)(b), (e), (n), (o), (r), (t), (u), (7)and (12)) 5900 Gross profit 6000 Operating expenses(notes (6)(c), (n), (o), (r), (u), (7)and (12)): 6100 Selling expenses 6200 Administrative expenses 6300 Research and development expenses 6450 Expected credit losses (profit) 6900 Operating profit 7000 Non-operating income and expenses(notes (6)(g), (l), (n)and (v)): 7100 Interest income 7010 Other income 7020 Other gains and losses 7050 Interest expense 7070 Share of loss of associates accounted for using equity method 7900 Profit before tax 7950 Less: Income tax expenses(note (6)(p)) Net profit 8300 Other comprehensive income(notes (6)(b), (p)and (q)): 8310 Components of other comprehensive income that will not be reclassified to profit or loss 8311 Gains on hedging instruments 8349 Less:income tax related to components of other comprehensive income that will not be reclassified to profit or loss 8360 Components of other comprehensive income that will be reclassified to profit or loss 8361 Exchange differences on translation of foreign financial statements 8399 Less: income tax related to components of other comprehensive income that will be reclassified to profit or loss 8300 Other comprehensive income, net 8500 Total comprehensive income Earnings per share (note (6)(s)) (in New Taiwan dollars) 9750 Basic earnings per share 9850 Diluted earnings per share	2024 Amount % $ 5,200,056 100 4,737,697 91 462,359 9 69,608 1 172,580 3 22,661 - (4) - 264,845 4 197,514 5 6,632 - 11,940 - 957 - (37,006) (1) (115) - (17,592) (1) 179,922 4 39,313 1 140,609 3 25,768 - 1,414 - 24,354 - 212 - 43 - 169 - 24,523 - $ 165,132 3 $ 0.67 $ 0.67	2023 Amount % 4,863,682 100 4,526,256 93 337,426 7 66,005 1 170,232 4 2,073 - 3,905 - 242,215 5 95,211 2 6,556 - 11,921 - (3,736) - (41,017) (1) (98) - (26,374) (1) 68,837 1 11,717 - 57,120 1 12,476 - (984) - 13,460 - 1 - - - 1 - 13,461 - 70,581 1 0.31 0.31

See accompanying notes to parent company only financial statements.

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese)

AIR ASIA CO., LTD.

Statements of Changes in Equity

For the years ended December 31, 2024 and 2023

(Expressed in Thousands of New Taiwan Dollars)

Common Stock	Capital surplus		Retained earnings			Other equity	Total
		Legal reserve	Special reserve	Unappropriated retained earnings	Exchange differences on translation of foreign financial statements	Gains (losses) on hedging instruments
$ 1,620,478 - - - - - - - 380,000 93,904 - - 2,094,382 - - - - - - - - $ 2,094,382	157,815	131,520	613	13,537	133	382	515 - 13,461 13,461 - - - - - - - (17,396) (3,420) - 24,523 24,523 - - - - (18,696) 2,407
	- -	- -	- -	57,120 -	- 1	- 13,460
	-	-	-	57,120	1	13,460
		1,349 - - - - - - -			- - - - - - - -
		132,869			134
		- -			- 169
		-			169
		5,712 - - - -			- - - - -
		138,581			303

See accompanying notes to parent company only financial statements.

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese)

AIR ASIA CO., LTD.

Statements of Cash Flows

For the years ended December 31, 2024 and 2023

(Expressed in Thousands of New Taiwan Dollars)

2024
Cash flows from (used in) operating activities:
Profit before tax
$ 179,922
Adjustments:
Adjustments to reconcile profit:
Depreciation expenses
100,368
Amortization expenses
15,260
Expected credit losses (profit)
(4)
Gains on valuation of financial assets at fair value through profit or loss
-
Interest expenses
37,006
Interest income
(6,632)
Share of loss of subsidiaries accounted for using equity method
115
Loss (gain) from disposal of property, plant and equipment
81
Gains on lease modification
(9)
Share-based compensation
-
Unrealized foreign exchange losses
2,070
Total adjustments to reconcile profit
148,255
Changes in operating assets and liabilities:
Changes in operating assets:
Increase in contract assets－current
(183,900)
Decrease (increase) in notes and trade receivables, net
33,650
Decrease (increase) in other receivables
(528)
Decrease (increase) in inventories
(297,062)
Decrease (increase) in prepayments
15,346
Decrease (increase) in other current assets
23,802
Decrease in incremental costs of obtaining contracts－non-current
1,485
Total changes in operating assets
(407,207)
Changes in operating liabilities:
Increase (decrease) in contract liabilities－current
(1,848)
Increase (decrease) in trade payables
156,064
Increase (decrease) in other payables
46,509
Increase in provisions－current
7,180
Increase (decrease) in other current liabilities
(5,826)
Total changes in operating liabilities
202,079
Net changes in operating assets and liabilities
(205,128)
Total adjustments
(56,873)
Cash generated from (used in) operations
123,049
Interest received
6,522
Interest paid
(37,360)
Income tax paid
(454)
Net cash generated from (used in) operating activities
91,757
Cash flows from (used in) investing activities:
Decrease (increase) in refundable deposits
25,485
Acquisition of property, plant and equipment
(62,541)
Proceeds from disposal of property, plant and equipment
69
Acquisition of intangible assets
(7,368)
Increase in other non-current assets
(47,907)
Net cash used in investing activities
(92,262)
Cash flows from (used in) financing activities:
Increase in short-term loans
1,461,368
Decrease in short-term loans
(1,571,368)
Increase in short-term notes payable
3,295,980
Decrease in short-term notes payable
(3,295,980)
Proceeds from long-term loans
377,000
Repayments of long-term loans
(234,750)
Payment of lease liabilities
(18,399)
Cash dividends
(111,002)
Cash capital increase
-
Net cash generated from (used in) financing activities
(97,151)
Effects of exchange rate changes on balance of cash held in foreign currencies
(1,110)
Net increase (decrease) in cash and cash equivalents
(98,766)
Cash and cash equivalents at the beginning of year
251,055
Cash and cash equivalents at end of year
$
152,289 2023
68,837
92,997
6,605
3,905
(45)
41,017
(6,556)
98
(315)
-
38,366
1,961
178,033
(267,218)
(242,409)
4,083
139,966
(29,244)
(24,193)
1,825
(417,190)
42,988
(64,644)
(364)
12,239
5,661
(4,120)
(421,310)
(243,277)
(174,440)
6,387
(40,007)
(555)
(208,615)
(56,757)
(62,525)
315
(5,157)
(131,582)
(255,706)
1,413,185
(1,808,185)
1,778,336
(2,328,040)
562,000
(400,000)
(16,919)
(58,338)
1,325,811
467,850
(2,121)
1,408
249,647
251,055

See accompanying notes to parent company only financial statements.

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese)

AIR ASIA CO., LTD.

Notes to the Parent Company Only Financial Statements For the years ended December 31, 2024 and 2023

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(1) Company history

AIR ASIA CO., LTD. (the “ Company” ).was incorporated as a company limited by shares under the Company Act of the Republic of China (R.O.C.) on January 19, 1955. The Company’ s registered and operating address is No. 1050, Jichang Rd., Rende Dist., Tainan City, Taiwan, R.O.C.

The Company’s principal activities consist of maintenances, renovation, upgrades and integrated logistic support services for the aircraft and related components.

The Company listed their shares on the Taiwan Stock Exchange on 22 February 2018.

(2) Approval date and procedures of the financial statements:

These financial statements were authorized for issuance by the Board of the Company on February 26, 2025.

(3) New standards, amendments and interpretations adopted:

(a) The impact of the IFRS Accounting Standards endorsed by the Financial Supervisory Commission, R.O.C. which have already been adopted.

The Company has initially adopted the following new amendments, which do not have a significant impact on its financial statements, from January 1, 2024:

●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”
●Amendments to IFRS 16 “Lease Liability in a Sale and Leaseback”
(b) The impact of IFRS issued by the FSC but not yet effective

The Company assesses that the adoption of the following new amendments, effective for annual period beginning on January 1, 2025, would not have a significant impact on its financial statements:

●Amendments to IAS 21 “Lack of Exchangeability”

(Continued)

AIR ASIA CO., LTD. Notes to the Parent Company Only Financial Statements

The following new and amended standards, which may be relevant to the Company, have been issued by the International Accounting Standards Board (IASB), but have yet to be endorsed by the FSC:

Standards or Effective date per Interpretations Content of amendment IASB IFRS 18 “Presentation and The new standard introduces three January 1, 2027 Disclosure in Financial categories of income and expenses, two Statements” income statement subtotals and one single note on management performance measures. The three amendments, combined with enhanced guidance on how to disaggregate information, set the stage for better and more consistent information for users, and will affect all the entities.

●A more structured income statement: under current standards, companies use different formats to present their results, making it difficult for investors to compare financial performance across companies. The new standard promotes a more structured income statement, introducing a newly defined ‘operating profit’ subtotal and a requirement for all income and expenses to be allocated between three new distinct categories based on a company’ s main business activities.
●Management performance measures (MPMs): the new standard introduces a definition for management performance measures, and requires companies to explain in a single note to the financial statements why the measure provides useful information, how it is calculated and reconcile it to an amount determined under IFRS Accounting Standards.
●Greater disaggregation of information: the new standard includes enhanced guidance on how companies group information in the financial statements. This includes guidance on whether information is included in the primary financial statements or is further disaggregated in the notes.

(Continued)

AIR ASIA CO., LTD. Notes to the Parent Company Only Financial Statements

The Company is evaluating the impact on its financial position and financial performance upon the initial adoption of the abovementioned standards or interpretations. The results thereof will be disclosed when the Company completes its evaluation.

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

●Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets Between an Investor and Its Associate or Joint Venture”
●IFRS 17 “ Insurance Contracts” and amendments to IFRS 17 “ Insurance Contracts”
●IFRS 19 “Subsidiaries without Public Accountability: Disclosures”
●Amendments to IFRS 9 and IFRS 7 “Amendments to the Classification and Measurement of Financial Instruments”
●Annual Improvements to IFRS Accounting Standards—Volume 11
●Amendments to IFRS 9 and IFRS 7 “Contracts Referencing Nature-dependent Electricity”

(4) Summary of material policies:

The material accounting policies presented in the parent company only financial statements are summarized below. Except for those specifically indicated, the following accounting policies were applied consistently throughout the periods presented in the parent company only financial statements.

(a) Statement of compliance

These parent company only financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers (hereinafter referred to as “the Regulations”).

(b) Basis of preparation

(i) Basis of measurement

Except for the hedging financial instruments are measured at fair value, the parent company only financial statements have been prepared on a historical cost basis.

(ii) Functional and presentation currency

The financial statements are presented in New Taiwan Dollar (NTD), which is the Company’s functional currency. All financial information presented in NTD has been rounded to the nearest thousand.

(Continued)

AIR ASIA CO., LTD. Notes to the Parent Company Only Financial Statements

(c) Foreign currencies

(i) Foreign currency transactions

Transactions in foreign currencies are translated into the respective functional currencies of Company entities at the exchange rates at the dates of the transactions. At the end of each subsequent reporting period, monetary items denominated in foreign currencies are translated into the functional currencies using the exchange rate at that date. Non-monetary items denominated in foreign currencies that are measured at fair value are translated into the functional currencies using the exchange rate at the date that the fair value was determined. Non-monetary items denominated in foreign currencies that are measured based on historical cost are translated using the exchange rate at the date of the transaction.

Exchange differences are generally recognized in profit or loss, except for those differences relating to the following, which are recognized in other comprehensive income:

1) an investment in equity securities designated as at fair value through other comprehensive income;
2) a financial liability designated as a hedge of the net investment in a foreign operation to the extent that the hedge is effective; or
3) qualifying cash flow hedges to the extent that the hedges are effective.
(ii) Foreign operations

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

When a foreign operation is disposed of such that control, significant influence, or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal. When the Company disposes of only part of its investment in an associate or joint venture that includes a foreign operation while retaining significant influence or joint control, the relevant proportion of the cumulative amount is reclassified to profit or loss.

When the settlement of a monetary receivable from or payable to a foreign operation is neither planned nor likely to occur in the foreseeable future, Exchange differences arising from such a monetary item that are considered to form part of the net investment in the foreign operation are recognized in other comprehensive income.

(Continued)

AIR ASIA CO., LTD. Notes to the Parent Company Only Financial Statements

(d) Classification of current and non-current assets and liabilities

The Company classifies the asset as current under one of the following criteria, and all other assets are classified as non current.

(i) It is expected to be realized, or intended to be sold or consumed, in the normal operating cycle;
(ii) It is held primarily for the purpose of trading;
(iii) It is expected to be realized within twelve months after the reporting period; or
(iv) The asset is cash or a cash equivalent (as defined in IAS 7) unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

The Company classifies the liability as current under one of the following criteria, and all other liabilities are classified as non current.

(i) It is expected to be settled in the normal operating cycle;
(ii) It is held primarily for the purpose of trading;
(iii) It is due to be settled within twelve months after the reporting period; or
(iv) The Company does not have the right at the end of the reporting period to defer settlement of the liability for at least twelve months after the reporting period.
(e) Cash and cash equivalents

Cash comprises cash on hand and demand deposits. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value. Time deposits which meet the above definition and are held for the purpose of meeting short-term cash commitments rather than for investment or other purposes should be recognized as cash equivalents.

Bank overdrafts that are repayable on demand and form an integral part of the Company’ s cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows.

(f) Financial instruments

Trade receivables and debt securities issued are initially recognized when they are originated. All other financial assets and financial liabilities are initially recognized when the Company becomes a party to the contractual provisions of the instrument. A financial asset (unless it is a trade receivable without a significant financing component) or financial liability is initially measured at fair value plus, for an item not at fair value through profit or loss (FVTPL), transaction costs that are directly attributable to its acquisition or issue. A trade receivable without a significant financing component is initially measured at the transaction price.

(Continued)

AIR ASIA CO., LTD. Notes to the Parent Company Only Financial Statements

(i) Financial assets

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

On initial recognition, a financial asset is classified as measured at amortized cost. Financial assets are not reclassified subsequent to their initial recognition unless the Company changes its business model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model.

1) Financial assets measured at amortized cost

A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as at FVTPL:

●it is held within a business model whose objective is to hold assets to collect contractual cash flows; and
●its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

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

2) Business model assessment

The Company makes an assessment of the objective of the business model in which a financial asset is held at portfolio level because this best reflects the way the business is managed and information is provided to management. The information considered includes:

●the stated policies and objectives for the portfolio and the operation of those policies in practice. These include whether management’s strategy focuses on earning contractual interest income, maintaining a particular interest rate profile, matching the duration of the financial assets to the duration of any related liabilities or expected cash outflows or realizing cash flows through the sale of the assets;
●how the performance of the portfolio is evaluated and reported to the Company’ s management;
●the risks that affect the performance of the business model (and the financial assets held within that business model) and how those risks are managed;

(Continued)

AIR ASIA CO., LTD. Notes to the Parent Company Only Financial Statements

●how managers of the business are compensated ─ e.g. whether compensation is based on the fair value of the assets managed or the contractual cash flows collected; and
●the frequency, volume and timing of sales of financial assets in prior periods, the reasons for such sales and expectations about future sales activity.

Transfers of financial assets to third parties in transactions that do not qualify for derecognition are not considered sales for this purpose, and are consistent with the Company’s continuing recognition of the assets.

3) Assessment whether contractual cash flows are solely payments of principal and interest

For the purposes of this assessment, ‘principal’ is defined as the fair value of the financial assets on initial recognition. ‘Interest’ is defined as consideration for the time value of money and for the credit risk associated with the principal amount outstanding during a particular period of time and for other basic lending risks and costs, as well as a profit margin.

In assessing whether the contractual cash flows are solely payments of principal and interest, the Company considers the contractual terms of the instrument. This includes assessing whether the financial asset contains a contractual term that could change the timing or amount of contractual cash flows such that it would not meet this condition. In making this assessment, the Company considers:

●contingent events that would change the amount or timing of cash flows;
●terms that may adjust the contractual coupon rate, including variable rate features;
●prepayment and extension features; and
●terms that limit the Company’s claim to cash flows from specified assets (e.g. nonrecourse features)
4)
Impairment of financial assets

The Company recognizes loss allowances for expected credit losses (ECL) on financial assets measured at amortized cost (including cash and cash equivalents, notes and trade receivables, other receivables and refundable deposit) and contract assets.

The Company measures loss allowances at an amount equal to lifetime ECL, except for the following which are measured as 12-month ECL:

●debt securities that are determined to have low credit risk at the reporting date; and
●other debt securities and bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition.

Loss allowance for trade receivables and contract assets are always measured at an amount equal to lifetime ECL.

(Continued)

AIR ASIA CO., LTD. Notes to the Parent Company Only Financial Statements

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECL, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis based on the Company’ s historical experience and informed credit assessment as well as forwardlooking information.

The Company assumes that the credit risk on a financial asset has increased significantly if it is more than 90 days past due.

The Company considers a financial asset to be in default when the financial asset is more than 1 year past due or the debtor is unlikely to pay its credit obligations to the Company in full.

The Company considers a time deposit (recorded as cash and cash equivalents and refundable deposit) to have low credit risk when only deal with financial institutions with good credit rating.

Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial instrument.

12-month ECLs are the portion of ECLs that result from default events that are possible within the 12 month after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months).

The maximum period considered when estimating ECLs is the maximum contractual period over which the Company is exposed to credit risk.

ECL are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e the difference between the cash flows due to the Company in accordance with the contract and the cash flows that the Company expects to receive).

At each reporting date, the Company assesses whether financial assets carried at amortized cost and debt securities at FVOCI are credit-impaired. A financial asset is ‘ credit-impaired’ when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. Evidence that a financial assets is credit-impaired includes the following observable data:

●significant financial difficulty of the borrower or issuer;
●a breach of contract such as a default or being more than 1 year past due;
●the lender of the borrower, for economic or contractual reasons relating to the borrower’s financial difficulty, having granted to the borrower a concession that the lender would not otherwise consider;
●it is probable that the borrower will enter bankruptcy or other financial reorganization; or
●the disappearance of an active market for a security because of financial difficulties.

(Continued)

AIR ASIA CO., LTD. Notes to the Parent Company Only Financial Statements

Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the assets.

The gross carrying amount of a financial asset is written off when the Company has no reasonable expectations of recovering a financial asset in its entirety or a portion thereof. For corporate customers, the Company individually makes an assessment with respect to the timing and amount of write-off based on whether there is a reasonable expectation of recovery. The Company expects no significant recovery from the amount written off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Company’ s procedures for recovery of amounts due. Based on its experience, there have been no corporate customer recoveries after 1 year past due.

5) Derecognition of financial assets

The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Company neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.

The Company enters into transactions whereby it transfers assets recognized in its statement of balance sheet, but retains either all or substantially all of the risks and rewards of the transferred assets. In these cases, the transferred assets are not derecognized.

(ii) Financial liabilities and equity instruments

1) Classification of debt or equity

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

2) Equity instrument

An equity instrument is any contract that evidences residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued are recognized as the amount of consideration received, less the direct cost of issuing.

3) Compound financial instruments

Compound financial instruments issued by the Company comprise convertible bonds denominated in NTD that can be converted to ordinary shares at the option of the holder, when the number of shares to be issued is fixed and does not vary with changes in fair value.

(Continued)

AIR ASIA CO., LTD. Notes to the Parent Company Only Financial Statements

The liability component of compound financial instruments is initially recognized at the fair value of a similar liability that does not have an equity conversion option. The equity component is initially recognized at the difference between the fair value of the compound financial instrument as a whole and the fair value of the liability component. Any directly attributable transaction costs are allocated to the liability and equity components in proportion to their initial carrying amounts.

Subsequent to initial recognition, the liability component of a compound financial instrument is measured at amortized cost using the effective interest method. The equity component of a compound financial instrument is not remeasured.

Interest related to the financial liability is recognized in profit or loss. On conversion at maturity, the financial liability is reclassified to equity and no gain or loss is recognized.

4) Financial liabilities

Financial liabilities are classified as measured at amortized cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held-for-trading, it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognized in profit or loss.

Other financial liabilities are subsequently measured at amortized cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognized in profit or loss. Any gain or loss on derecognition is also recognized in profit or loss.

5) Derecognition of financial liabilities

The Company derecognizes a financial liability when its contractual obligations are discharged or cancelled, or expire. The Company also derecognizes a financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognized at fair value.

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

6) Offsetting of financial assets and liabilities

Financial assets and financial liabilities are offset and the net amount presented in the statement of balance sheet when, and only when, the Company currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realize the asset and settle the liability simultaneously.

(Continued)

AIR ASIA CO., LTD. Notes to the Parent Company Only Financial Statements

(iii) Derivative financial instruments and hedge accounting

The Company holds derivative financial instruments to hedge its foreign currency exposures. Derivatives are initially measured at fair value. Any attributable transacion costs thereof are recognized in profit or loss as incurred. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are recognized in profit or loss in the statement of comprehensive income. When a derivative is designated as, and effective for, a hedging instrument, its timing of recognition in profit or loss is determined based on the nature of the hedging relationship. When the fair value of a derivative instrument is positive, it is classified as a financial asset, whereas when the fair value is negative, it is classified as a financial liability.

The Company designates certain derivative instruments as cash flow hedges. Hedges of foreign exchange risk on firm commitments are accounted for as cash flow hedges.

At inception of designated hedging relationships, the Company documents the risk management objective and strategy for undertaking the hedge. The Company also documents the economic relationship between the hedged item and the hedging instrument, including whether the changes in cash flows of the hedged item and hedging instrument are expected to offset each other.

The effective portion of changes in the fair value of derivatives and other qualifying hedging instruments that are designated and qualify as cash flow hedges is recognized in other － comprehensive income and accumulated under ‘ other equity gains (losses) on hedging instruments’, limited to the cumulative change in fair value of the hedged item from inception of the hedge. The gain or loss relating to the ineffective portion is recognized immediately in profit or loss.

Amounts previously recognized in other comprehensive income and accumulated in other equity are reclassified to profit or loss in the periods when the hedged item affects profit or loss, in the same line as the recognized hedged item. However, when the hedged forecast transaction results in the recognition of a non-financial asset or a non-financial liability, the gains and losses previously recognized in other comprehensive income and accumulated in other equity are removed from other equity and included in the initial measurement of the cost of the non-financial asset or non-financial liability. Furthermore, if the Company expects that some or all of the loss accumulated in other equity will not be recovered in the future, that amount is immediately reclassified to profit or loss.

The Company prospectively discontinues hedge accounting only when the hedging relationship ceases to meet the qualifying criteria; for instance, when the hedging instrument expires or is sold, terminated or exercised. When hedge accounting for cash flow hedges is discontinued, the amount that has been accumulated in other equity remains in equity until, for a hedge of a transaction resulting in the recognition of a non-financial item, it is included in the nonfinancial item’s cost on its initial recognition or, for other cash flow hedges, it is reclassified to profit or loss in the same period or periods as the hedged expected future cash flows affect profit or loss. If the hedged future cash flows are no longer expected to occur, then the amounts that gave been accumulated in other equity are immediately reclassified to profit or loss.

(Continued)

AIR ASIA CO., LTD. Notes to the Parent Company Only Financial Statements

(g) Inventories

Inventories are measured at the lower of cost and net realizable value. The cost of inventories is calculated using the weighted average method, and includes expenditure incurred in acquiring the inventories, production or conversion costs, and other costs incurred in bringing them to their present location and condition. In the case of manufactured inventories and work in progress, cost includes an appropriate share of production overheads based on normal operating capacity.

Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.

(h) Investment in subsidiaries

When preparing the parent company only financial statements, investment in subsidiaries which are controlled by the Company is accounted for using the equity method. Under the equity method, an investment in a subsidiary is initially recognized at cost and adjusted thereafter to recognized the Company’s share of profit or loss and other comprehensive income of the subsidiary as well as the distribution received. The Company also recognized its share in the changes in the equity of subsidiaries. In subsidiaries which are controlled by the Company is accounted for preparing the consolidated statment by each period.

Changes in a parent’s ownership interest in a subsidiary that do not result in the loss of control are accounted for within equity.

(i) Property, plant and equipment
(i) Recognition and measurement

Items of property, plant and equipment are measured at cost, which includes capitalized borrowing costs, less accumulated depreciation and any accumulated impairment losses.

If significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

Any gain or loss on disposal of an item of property, plant and equipment is recognized in profit or loss.

(ii) Subsequent expenditure

Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with the expenditure will flow to the Company.

(iii) Depreciation

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

Land is not depreciated.

(Continued)

AIR ASIA CO., LTD. Notes to the Parent Company Only Financial Statements

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

1)	Buildings and structures	3`～`50 years
2)	Machinery and equipment	2`～`20 years
3)	Transportation equipment	2`～`20 years
4)	Office equipment	2`～`15 years

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

(j) Leases

At inception of a contract, the Company assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

(i) As a lessee

The Company recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

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

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be reliably determined, the Company’s incremental borrowing rate. Generally, the Company uses its incremental borrowing rate as the discount rate.

Lease payments included in the measurement of the lease liability comprise the following:

－
fixed payments, including in-substance fixed payments;
－ variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;
－
amounts expected to be payable under a residual value guarantee; and
－ payments for purchase or termination options that are reasonably certain to be exercised.

(Continued)

AIR ASIA CO., LTD. Notes to the Parent Company Only Financial Statements

The lease liability is measured at amortized cost using the effective interest method. It is remeasured when:

－
there is a change in future lease payments arising from the change in an index or rate; or
－ there is a change in the Company’s estimate of the amount expected to be payable under a residual value guarantee; or
－ there is a change in the lease term resulting from a change of its assessment on whether it will exercise an option to purchase the underlying asset, or
－ there is a change of its assessment on whether it will exercise an extension or termination option; or
－
there is any lease modification.

When the lease liability is remeasured, other than lease modifications, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or in profit and loss if the carrying amount of the right-of-use asset has been reduced to zero.

When the lease liability is remeasured to reflect the partial or full termination of the lease for lease modifications that decrease the scope of the lease, the Company accounts for the remeasurement of the lease liability by decreasing the carrying amount of the right-of-use asset to reflect the partial or full termination of the lease, and recognize in profit or loss any gain or loss relating to the partial or full termination of the lease.

The Company presents right-of-use assets that do not meet the definition of investment and lease liabilities as a separate line item respectively in the statement of financial position.

If an arrangement contains lease and non-lease components, the Company allocates the consideration in the contract to each lease component on the basis of their relative stand-alone prices. However, the Company has elected not to separate non-lease components and account for the lease and non-lease components as a single lease component.

The Company has elected not to recognize right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or less and leases of low-value assets, including land, business premises, staff dormitory, and part of transportation equipment. The Company recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

(ii) As a lessor

When the Company acts as a lessor, it determines at lease commencement whether each lease is a finance lease or an operating lease. To classify each lease, the Company makes an overall assessment of whether the lease transfers to the lessee substantially all of the risks and rewards of ownership incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then the lease is an operating lease. As part of this assessment, the Company considers certain indicators such as whether the lease is for the major part of the economic life of the asset.

(Continued)

AIR ASIA CO., LTD. Notes to the Parent Company Only Financial Statements

(k) Intangible assets
(i) Recognition and measurement

Except for goodwill, intangible assets are acquired by the Company and have finite useful lives are measured at cost less accumulated amortization and any accumulated impairment losses.

(ii) Subsequent expenditure

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

(iii) Amortization

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

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

1) Software 1 ～ 10 years 2) Acquired special technology 1 years

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

(l) Impairment of non-financial assets

At each reporting date, the Company reviews the carrying amounts of its non-financial assets (other than inventories, contract assets and deferred tax assets) to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated.

For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or cash-generating units （ CGUs ） .

The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU.

An impairment loss is recognized if the carrying amount of an asset or CGU exceeds its recoverable amount.

Impairment losses are recognized in profit or loss. They are allocated first to reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other assets in the CGU on a pro rata basis.

(Continued)

AIR ASIA CO., LTD. Notes to the Parent Company Only Financial Statements

An impairment loss in respect of goodwill is not reversed. For other assets, an impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.

(m) Provisions

A provision is recognized if, as a result of a past event, the Company has a present obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation.

A provision for warranties is recognized when the underlying products or services are sold, based on historical warranty data and a weighting of all possible outcomes against their associated probabilities.

(n) Revenue recognition

(i) Revenue from contracts with customers

Revenue is measured based on the consideration to which the Company expects to be entitled in exchange for transferring goods or services to a customer. The Company recognizes revenue when it satisfies a performance obligation by transferring control of a good or a service to a customer. The accounting policies for the Company’ s main types of revenue are explained below.

1) Sale of goods

The Company recognizes revenue when control of the products has transferred, being when the products are delivered to the customer, the customer has full discretion over the channel and price to sell the products, and there is no unfulfilled obligation that could affect the customer’s acceptance of the products. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customer, and either the customer has accepted the products in accordance with the sales contract, the acceptance provisions have lapsed, or the Company has objective evidence that all criteria for acceptance have been satisfied.

A receivable is recognized when the goods are delivered as this is the point in time that the Company has a right to an amount of consideration that is unconditional.

2) Maintenance services

The Company provides aircraft maintenance services and related components. Revenue from providing services is recognized in the accounting period in which the services are rendered. The consideration promised in the contract includes fixed and variable amounts. For fixed-price contracts, revenue is recognized based on the actual service provided to the end of the reporting period as a proportion of the total services to be provided. The proportion of services provided is determined based on the actual maintenance hours spent relative to the total expected maintenance hours. The variable consideration is generally made and adjusted based on historical experience and any other known factors that would significantly affect the variable consideration.

(Continued)

AIR ASIA CO., LTD. Notes to the Parent Company Only Financial Statements

Estimates of revenues, costs or extent of progress toward completion are revised if circumstances change. Any resulting increases or decreases in estimated revenues or costs are reflected in profit or loss in the period in which the circumstances that give rise to the revision become known by management.

In case of fixed-price contracts, the customer pays the fixed amount based on a payment schedule. If the services rendered by the Company exceed the payment, a contract asset is recognized. If the payments exceed the services rendered, a contract liability is recognized.

The Company offers a standard warranty for aircraft maintenance services and related components to provide assurance that the service complies with the agreed upon specifications and has recognized warranty provisions for this obligation.

3) Financing components

The Company does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. As a consequence, the Company does not adjust any of the transaction prices for the time value of money.

(ii) Contract costs

1) Incremental costs of obtaining a contract

The Company recognizes as an asset the incremental costs of obtaining a contract with a customer if the Company expects to recover those costs. The incremental costs of obtaining a contract are those costs that the Company incurs to obtain a contract with a customer that it would not have incurred if the contract had not been obtained. Costs to obtain a contract that would have been incurred regardless of whether the contract was obtained shall be recognized as an expense when incurred, unless those costs are explicitly chargeable to the customer regardless of whether the contract is obtained.

The Company applies the practical expedient to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that the entity otherwise would have recognized is one year or less.

2) Costs to fulfil a contract

If the costs incurred in fulfilling a contract with a customer are not within the scope of another Standard (for example, IAS 2 Inventories, IAS 16 Property, Plant and Equipment or IAS 38 Intangible Assets), the Company recognizes an asset from the costs incurred to fulfil a contract only if those costs meet all of the following criteria:

a) the costs relate directly to a contract or to an anticipated contract that the Company can specifically identify;
b) the costs generate or enhance resources of the Company that will be used in satisfying (or in continuing to satisfy) performance obligations in the future; and
c) the costs are expected to be recovered.

(Continued)

AIR ASIA CO., LTD. Notes to the Parent Company Only Financial Statements

General and administrative costs, costs of wasted materials, labor or other resources to fulfil the contract that were not reflected in the price of the contract, costs that relate to satisfied performance obligations (or partially satisfied performance obligations), and costs for which the Company cannot distinguish whether the costs relate to unsatisfied performance obligations or to satisfied performance obligations(or partially satisfied performance obligations), the Company recognizes these costs as expenses when incurred.

(o) Employee benefits

(i) Defined contribution plans

Obligations for contributions to defined contribution plans are expensed as the related service is provided.

(ii) Short-term employee benefits

Short-term employee benefits are expensed as the related service is provided. A liability is recognized for the amount expected to be paid if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

(p) Share-based payment

The grant-date fair value of equity-settled share-based payment arrangements granted to employees is generally recognized as an expense, with a corresponding increase in equity, over the vesting period of the awards. The amount recognized as an expense is adjusted to reflect the number of awards for which the related service and non-market performance conditions are expected to be met, such that the amount ultimately recognized is based on the number of awards that meet the related service and non-market performance conditions at the vesting date.

For share-based payment awards with non-vesting conditions, the grant-date fair value of the sharebased payment is measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes.

Grant date of a share-based payment award is the date which the number of shares purchased by the employees was confirmed.

(q) Income taxes

Income taxes comprise current taxes and deferred taxes. Except for expenses related to business combinations or recognized directly in equity or other comprehensive income, all current and deferred taxes are recognized in profit or loss.

Current taxes comprise the expected tax payables or receivables on the taxable profits (losses) for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax payables or receivables are the best estimate of the tax amount expected to be paid or received that reflects uncertainty related to income taxes, if any. It is measured using tax rates enacted or substantively enacted at the reporting date.

(Continued)

AIR ASIA CO., LTD. Notes to the Parent Company Only Financial Statements

Deferred taxes arise due to temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their respective tax bases. Deferred taxes are recognized except for the following:

(i) temporary differences on the initial recognition of assets and liabilities in a transaction that is not a business combination and at the time of the transaction (i) affects neither accounting nor taxable profits (losses) and (ii) does not give rise to equal taxable and deductible temporary differences;
(ii) temporary differences related to investments in subsidiaries, associates and joint arrangements to the extent that the Company is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future; and
(iii) taxable temporary differences arising on the initial recognition of goodwill.

Deferred tax assets are recognized for the carry forward of unused tax losses, unused tax credits, and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefits will be realized.

Deferred taxes are measured at tax rates that are expected to be applied to temporary differences when they reserve, using tax rates enacted or substantively enacted at the reporting date.

Deferred tax assets and liabilities are offset if the following criteria are met:

(i) the Company has a legally enforceable right to set off current tax assets against current tax liabilities; and
(ii) the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on either:
- 1) the same taxable entity; or
- 2) different taxable entities which intend to settle current tax assets and liabilities on a net basis, or to realize the assets and liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.
(r) Earnings per share

The Company discloses the Company’s basic and diluted earnings per share attributable to ordinary shareholders of the Company. Basic earnings per share is calculated as the profit attributable to ordinary shareholders of the Company divided by the weighted average number of ordinary shares outstanding. Diluted earnings per share is calculated as the profit attributable to ordinary shareholders of the Company divided by the weighted average number of ordinary shares outstanding after adjustment for the effects of all potentially dilutive ordinary shares, such as convertible bonds and employee compensation.

(Continued)

AIR ASIA CO., LTD. Notes to the Parent Company Only Financial Statements

(s) Operating segments

The company discloses the operating segment information in the consolidated financial statements. Therefore, the Company does not disclose the operating segment information in the parent company only financial statements.

(5) Significant accounting assumptions and judgments, and major sources of estimation uncertainty:

In preparing these parent company only financial statements, management has made judgments and estimates about the future, including climate-related risks and opportunities, that affect the application of the accounting policies and the reported amount of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis and are consistent with the Company’s risk management and climate-related commitments where appropriate. Revisions to estimates are recognised prospectively in the period of the change and future periods.

Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities within the next financial year is as follows:

(a) Revenue recognition

The Company estimates the amount of variable consideration using the expected value method or the most likely amount and recognizes it as deduction of revenue in the same period the related revenue is recorded. The variable consideration is generally made and adjusted based on historical experience and any other known factors that would significantly affect the variable consideration. The adequacy of estimations is reviewed periodically. The delivery schedule of maintenance materials could result in significant adjustments to the estimation made.

Contract revenue are recognized by reference to the stage of completion of each contract. The stage of completion of a contract is measured based on the goods and services transferred to the customer. The difference between the input record of maintenance material requisition as well as employee time and the actual acceptance, could result in significant adjustments to the estimation made.

(b) Valuation of inventories

As inventories are stated at the lower of cost or net realizable value, the Company estimates the net realizable value of inventories for obsolescence and unmarketable items at the end of the reporting period and then writes down the cost of inventories to net realizable value. The net realizable value of the inventory is mainly determined based on assumption as to future demand within a specific time horizon. Due to the obsolescence of aircraft models, there may be significant changes in the net realizable value of inventories. Please refer to note 6(e) for further description on the valuation of inventories.

(Continued)

AIR ASIA CO., LTD.

Notes to the Parent Company Only Financial Statements

(6) Explanation of significant accounts:

(a) Cash and cash equivalents

December 31, 2024 Cash and cash on hand $ 844 Demand deposits 151,445 Time deposits - Cash and cash equivalents in the statement of cash flows $ 152,289	December 31, 2023
	849 188,796 61,410
	251,055

Please refer to note 6(w) for the exchange rate risk and sensitivity analysis of the financial assets and liabilities.

(b) Financial instruments used for hedging

The details of financial assets and liabilities for hedging were as follows:

December 31, 2024 Cash flow hedge: Financial assets for hedging`－`current: Forward exchange contracts $ 2,630 Financial liabilities for hedging`－`current: Forward exchange contracts $ -	December 31, 2023
	793
	5,235

－ (i) Cash flow hedge forward exchange contracts

The Company’s strategy is to use the forward exchange contracts to hedge its estimated foreign currency exposure in respect of forecasted purchases transactions. When actual purchase occurs, the amount accumulated in gains (losses) on the effective portion of cash flow hedge under other equity interest will be reclassified to non-current assets in the same period. The terms of forward foreign exchange contract are coordinated with the hedged item. The unexpired forward exchange contracts held by the Company were as follows:

Forward exchange purchased Forward exchange purchased Forward exchange purchased		December 31, 2024	December 31, 2024
	Contract Amount (in thousands) USD$ 3,783	Currency Maturity dates Average strike price TWD to USD 2025.01.10~2025.08.25 31.332~32.599 December 31, 2023
	Contract Amount (in thousands) USD$ 6,458 GBP$ 952	Currency TWD to USD TWD to GBP	Maturity dates Average strike price 2024.1.10~2024.11.25 29.138~31.965 2024.3.25 39.42~39.559

(Continued)

AIR ASIA CO., LTD. Notes to the Parent Company Only Financial Statements

(ii) The details arising from cash flow hedges for the years ended December 31, 2024 and 2023, were as follows:

Account Item Recognized in other comprehensive income during the period Reclassification from equity to decrease in inventories for the period	2024 $ 24,354 $ 18,696	2023
		13,460
		17,396

There was no ineffective portion of unsettled cash flow hedge recognized in profit or loss.

Notes receivable Trade receivables (including from related parties) Less: Loss allowance Total	December 31, 2024 $ - 1,415,821 (3,959) $ 1,411,862	December 31, 2023 372 1,448,938 (4,294) 1,445,016

The Company applies the simplified approach to provide for its expected credit losses, i.e. the use of lifetime expected loss provision for all receivables. To measure the expected credit losses, notes and trade receivables have been grouped based on shared credit risk characteristics and the days past due, as well as incorporated forward looking information. If the receivables of government in group 1 will be collected based on the central government budget, the amount of the receivables will be regarded as not overdue with no impairment risk. The loss allowance provision was determined as follows:

December 31, 2024	December 31, 2024
Gross carrying amount $ 1,322,423 $ 81,949 11,449 - - - - $ 93,398	Weighted-average loss rate 0.00% 2.18% 18.99% - - - -	Loss allowance provision
		-
		1,785 2,174 - - - -
		3,959

(Continued)

AIR ASIA CO., LTD. Notes to the Parent Company Only Financial Statements

Group 1 Current Group 2 Current 1 to 90 days past due 91 to 180 days past due 181 to 270 days past due 271 to 365 days past due More than 365 days past due			December 31, 2023
			Weighted-average loss rate 0.00% 0%~1.09% 20.18% - 50.98% 80.76% -	Loss allowance provision
				-
				905 2,874 - 273 242 -
				4,294

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

Balance at January 1 Impairment losses (gains) recognized Amounts written off Balance at December 31	2024 $ 4,294 (4) (331) $ 3,959	2023
		1,127 3,905 (738
		4,294

The aforementioned notes and trade receivables were not pledged as collateral or restricted in any way.

(d) Other receivables

Other receivables—income taxes refund Others Less: Loss allowance	December 31, 2024 $ 597 2,007 - $ 2,604	December 31, 2023
		751 1,368 -
		2,119

For further credit risk information, please refers to note 6(w).

(e) Inventories

Repair materials and others Finished goods	December 31, 2024 $ 992,109 356,753 $ 1,348,862	December 31, 2023
		736,130 315,670
		1,051,800

(Continued)

AIR ASIA CO., LTD. Notes to the Parent Company Only Financial Statements

The details of the cost of sales were as follows:

Inventory that has been sold and service costs Unallocated production overheads Write-down of inventories Write-off for inventories scrapped Losses on physical inventory	2024 $ 4,583,066 125,351 26,305 2,811 164 $ 4,737,697	2023
		4,358,624 123,797 40,825 2,551 459
		4,526,256

The inventories of the Company were not pledged as collateral or restricted in any way.

(f) Prepayments

The details of prepayments were as follows:

Prepayment for materials Prepayment of bank performance guarantee fees Prepayment`－`other	December 31, 2024 $ 102,401 7,570 16,007 $ 125,978	December 31, 2023
		123,221 6,280 11,823
		141,324

(g) Property, plant and equipment

The movement in cost, accumulated depreciation, and impairment loss of the property, plant and equipment was as follows:

Cost or deemed cost: Balance at January 1, 2024 Additions Disposals Reclassification Balance at December 31, 2024 Balance at January 1, 2023 Additions Disposals Reclassification Balance at December 31, 2023 Accumulated depreciation and impairment loss: Balance at January 1, 2024 Depreciation Disposal Balance at December 31, 2024	Land $ 275,211 - - - $ 275,211 $ 275,211 - - - $ 275,211 $ - - - $ -	Buildings and structures 723,850 7,196 - 30,023 761,069 690,176 7,423 (3,233) 29,484 723,850 459,708 21,812 - 481,520	Machinery and equipment 716,119 22,944 (4,680) 42,779 777,162 677,716 30,537 (8,280) 16,146 716,119 606,256 38,752 (4,680) 640,328	Office equipment 76,077 4,738 (2,588) - 78,227 72,430 7,852 (4,205) - 76,077 52,343 7,408 (2,588) 57,163	Transportation equipment 94,727 216 (287) 1,222 95,878 94,634 93 - - 94,727 70,256 4,340 (287) 74,309	Construction in process and testing equipment 58,750 24,367 (150) 4,927 87,894 41,147 17,603 - - 58,750 - - - -	Total 1,944,734 59,461 (7,705) 78,951 (Note) 2,075,441 1,851,314 63,508 (15,718) 45,630 (Note) 1,944,734 1,188,563 72,312 (7,555) 1,253,320

(Continued)

AIR ASIA CO., LTD. Notes to the Parent Company Only Financial Statements

Balance at January 1, 2023 Depreciation Disposals Balance at December 31, 2023 Carrying value: Balance at December 31, 2024 Balance at December 31, 2023 Balance at January 1, 2023	Land $ - - - $ - $ 275,211 $ 275,211 $ 275,211	Buildings and structures 444,395 18,546 (3,233) 459,708 279,549 264,142 245,781	Machinery and equipment 580,366 34,170 (8,280) 606,256 136,834 109,863 97,350	Office equipment 48,801 7,747 (4,205) 52,343 21,064 23,734 23,629	Transportation equipment 65,464 4,792 - 70,256 21,569 24,471 29,170	Construction in process and testing equipment - - - - 87,894 58,750 41,147	Total 1,139,026 65,255 (15,718) 1,188,563 822,121 756,171 712,288

－ Note: The amount of transferred from other non-current assets prepayment for equipment.

The capitalized borrowing costs related to the construction of the administration building amounted to $526 and $410, respectively, for the years ended December 31, 2024 and 2023, calculated using a capitalization rate of 1.47% and 1.86%, respectively.

Property, plant and equipment of the Company had been pledged as collateral or restricted, please refer to note 8.

(h) Right-of-use assets

The Company leases land, buildings and structures, and transportation equipment. Information about leases for which the Company as a lessee is presented below:

Land Cost: Balance at January 1, 2024 $ 281,821 Additions 299 Reduction (209) Balance at December 31, 2024 $ 281,911 Balance at January 1, 2023 $ 281,689 Additions 132 Reduction - Balance at December 31, 2023 $ 281,821 Accumulated depreciation and impairment loss: Balance at January 1, 2024 $ 74,223 Depreciation 14,965 Reduction (209) Balance at December 31, 2024 $ 88,979 Balance at January 1, 2023 $ 59,260 Depreciation 14,963 Reduction - Balance at December 31, 2023 $ 74,223	Buildings and structures 47,656 1,642 (651) 48,647 46,602 1,054 - 47,656 16,488 10,041 (651) 25,878 6,621 9,867 - 16,488	Transportation equipment 9,136 4,778 (3,191) 10,723 8,204 6,300 (5,368) 9,136 3,236 3,050 (2,508) 3,778 5,692 2,912 (5,368) 3,236	Total 338,613 6,719 (4,051) 341,281 336,495 7,486 (5,368) 338,613 93,947 28,056 (3,368) 118,635 71,573 27,742 (5,368) 93,947

(Continued)

AIR ASIA CO., LTD. Notes to the Parent Company Only Financial Statements

Land Carrying value: Balance at December 31, 2024 $ 192,932 Balance at December 31, 2023 $ 207,598 Balance at January 1, 2023 $ 222,429	Buildings and structures 22,769 31,168 39,981	Transportation equipment 6,945 5,900 2,512	Total 222,646
			244,666
			264,922

(i) Intangible assets

The details of intangible assets were as follows:

Acquired special technology Cost: Balance at January 1, 2024 $ - Additions - Reduction - Balance at December 31, 2024 $ - Balance at January 1, 2023 $ 5,037 Additions - Reduction (5,037) Balance at December 31, 2023 $ - Accumulated amortization: Balance at January 1, 2024 $ - Amortization for the year - Reduction - Balance at December 31, 2024 $ - Balance at January 1, 2023 $ 4,087 Amortization for the year 950 Reduction (5,037) Balance at December 31, 2023 $ - Carrying value: Balance at December 31, 2024 $ - Balance at December 31, 2023 $ - Balance at January 1, 2023 $ 950	Software 19,409 7,368 (5,208) 21,569 17,804 5,157 (3,552) 19,409 4,900 15,260 (5,208) 14,952 2,797 5,655 (3,552) 4,900 6,617 14,509 15,007	Total 19,409 7,368 (5,208)
		21,569
		22,841 5,157 (8,589)
		19,409
		4,900 15,260 (5,208)
		14,952
		6,884 6,605 (8,589)
		4,900
		6,617
		14,509
		15,957

(Continued)

AIR ASIA CO., LTD. Notes to the Parent Company Only Financial Statements

(j) Other non-current assets

The details of other non-current assets were as follows:

Prepayment for equipment Refundable deposits`－`non-current Other non-current assets`－`other	December 31, 2024 $ 106,103 12,300 24,843 $ 143,246	December 31, 2023
		111,955 44,667 18,058
		174,680

－ Refundable deposits non-current of the Company had been pledged as collateral or restricted, please refer to note 8.

(k) Short-term and long-term loans

The details of short-term and long-term loans were as follows:

Unsecured bank loans – NTD Long-term unsecured bank loans – NTD Long-term secured bank loans – NTD Total Current Non-current Total Unused short-term loans credit lines Unused long-term loans credit lines Range of short-term loans interest rates Range of long-term loans interest rates Long-term loans due year Assets pledged are disclosed in note 8. (l) Bonds payable	December 31, 2024 $ 620,000 298,000 250,000 $ 1,168,000 $ 804,000 364,000 $ 1,168,000 $ 875,000 $ 679,640 1.878%~2.02775% 1.425%~2.1539% 2025~2034	December 31, 2023
		730,000 405,750 -
		1,135,750
		864,750 271,000
		1,135,750
		730,000
		428,000
		1.6953%~1.8356%
		1.9198%~2.003%
		2024~2026

The details of unsecured convertible bonds were as follows:

		December 31,
		2023
Total convertible corporate bonds issued	$	300,000
Cumulative converted amount		(300,000)
Corporate bonds issued balance at year-end	$	-

(Continued)

AIR ASIA CO., LTD. Notes to the Parent Company Only Financial Statements


Embedded derivative – put and redeem options, included in gains on financial
assets at fair value through profit or loss	$	45
Interest expense (effective interest rate of 1.28%)	$	856

On 10 July 2019, the Company issued second unsecured domestic convertible bonds amounting to $300,000. The major terms are as follows:

1) Interest rate: 0%.
2) Issue period: Five years, from July 10, 2019 to July 10, 2024.
3) Redemption on the maturity date: On the maturity date, the Company will redeem the bonds with additional interest payment on the basis of the amount of 102.5251% of the bond value that remain outstanding at the principal amount.
4) Redemption at the option of the Company:
a) The Company may redeem the bonds, in whole or in part, after 3 months (October 11, 2019) of the issuance and prior to forty days (May 31, 2024) before the maturity date, at the principal amount of the bonds if the closing price of the Company’s ordinary shares on the Taiwan Stock Exchange for a period of 30 consecutive trading days, is at least 130% of the conversion price.
b) The Company may redeem the bonds, in whole or in part, after 3 months (October 11, 2019) of the issuance and prior to forty days (May 31, 2024) before the maturity date, at the early redemption conversion price if at least 90% in principal amount of the bonds has already been exchanged, redeemed, purchased or cancelled.
5) Repurchase at option of the bondholders: Thirty months after the issuance of the convertible bonds (January 10, 2022) is the base date which bondholders redeem the bonds. Bondholders could request the Company for redemption of convertible bonds held at the principal amount of bonds with additional interest payment prior to thirty days of the base date. The amount after 30 months of issuance is 101.2547% of the principal amount.
6) Terms of conversion:
a) Underlying Securities: Common shares of the Company.
b) Conversion Period: The bonds are convertible at any time on or after October 11, 2019 and prior to July 10, 2024 into common shares of the Company.
c) Conversion price and adjustment: The conversion price based on July 2, 2019 was originally NT$21.9 per share. The conversion price will be subject to adjustments upon the occurrence of certain events set out in the indenture.

(Continued)

AIR ASIA CO., LTD. Notes to the Parent Company Only Financial Statements

For the year ended December 31, 2023, the relevant information about the convertible bonds issued by the Company were converted into common stock, please refer to note 6(q).

There were no such transaction for the year ended December 31,2024.

(m) Provisions

		Warranties
Balance at January 1, 2024	$	29,651
Provisions made during the year		16,619
Provisions used during the year		(4,593)
Provisions reversed during the year		(4,846)
Balance at December 31, 2024	$	36,831
Balance at January 1, 2023	$	17,412
Provisions made during the year		29,614
Provisions used during the year		(12,300)
Provisions reversed during the year		(5,075)
Balance at December 31, 2023	$	29,651

The provision for warranties relates mainly to maintenance services of aircraft and related components during the years ended December 31, 2024 and 2023. The provision is based on estimates made from historical warranty data associated with similar maintenance services. The Company expects to settle the majority of the liability over the next year.

(n) Lease liabilities

The carrying value of lease liabilities was as follows:

Current Non-current	December 31, 2024 $ 22,572 188,343 $ 210,915	December 31, 2023
		21,277 202,010
		223,287

For the maturity analysis, please refer to note 6(w).

The amounts recognized in profit or loss were as follows:

Interest on lease liabilities Expenses relating to short-term leases Expenses relating to leases of low-value assets, excluding short-term leases of low-value assets	2024 $ 2,201 $ 2,425 $ 59	2023
		2,310
		2,662
		-

(Continued)

AIR ASIA CO., LTD. Notes to the Parent Company Only Financial Statements

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

Total cash outflow for leases	2024 $ 23,084	2023
		21,891

(i) Real estate leases

The Company leases land and buildings for its maintenance factory and office space, which lease terms of two to ten years.

(ii) Other leases

The Company leases transportation equipment, with lease terms of three to five years.

The Company also leases land, business premises, staff dormitory and part of transportation equipment with contract terms of one to two years. These leases are short-term or leases of lowvalue items. The Company has elected not to recognize right-of-use assets and lease liabilities for these leases.

(o) Employee benefits

Defined contribution plans

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

The pension costs incurred from the contributions to the Bureau of the Labor Insurance amounted to $39,628 and $38,323 for the years ended December 31, 2024 and 2023, respectively.

(p) Income taxes

(i) The components of income tax expenses were as follows:

2024 Current tax expense Current period Corporate income tax $ 38,141 Adjustment for prior periods (3) 38,138 Deferred tax expense Origination and reversal of temporary differences 1,175 Income tax expense $ 39,313	2023 - -
	-
	11,717
	11,717

(Continued)

AIR ASIA CO., LTD. Notes to the Parent Company Only Financial Statements

The amounts of income tax expenses (benefits) recognized in other comprehensive income were as follows:

		2024	2023
Items that will not be reclassified subsequently to profit
or loss:
Gains (Losses) on hedging instruments	$	1,414		(984)
Items that may be reclassified subsequently to profit or
loss:
Exchange differences on translation of foreign
financial statement	$	43	-
Reconciliation of income tax expenses and profit before	tax for 2024 and 2023		were as follows:
		2024	2023
Profit excluding income tax	$	179,922	68,837
Income tax using the Company’s domestic tax rate		35,984	13,767
Non-deductible expenses		59		173
Tax incentives		(10)		(99)
Adjustment for prior periods		(3)	-
Others		3,283	(2,124)
Income tax expenses	$	39,313	11,717

(ii) Deferred tax assets and liabilities

Changes in the amount of deferred tax assets and liabilities for 2024 and 2023 were as follows:

Inventory valuation loss Deferred tax assets: Balance at January 1, 2024 $ 46,208 Recognized in profit or loss 5,261 Recognized in other comprehensive income - Balance at December 31, 2024 $ 51,469 Balance at January 1, 2023 $ 38,043 Recognized in profit or loss 8,165 Recognized in other comprehensive income - Balance at December 31, 2023 $ 46,208	Unused tax losses 1,968 (1,968) - - 27,280 (25,312) - 1,968	Others 5,768 (2,443) (931) 2,394 (131) 4,915 984 5,768	Total 53,944 850 (931) 53,863 65,192 (12,232) 984 53,944

(Continued)

AIR ASIA CO., LTD. Notes to the Parent Company Only Financial Statements

Deferred tax liabilities Balance at January 1, 2024 Recognized in profit or loss Recognized in other comprehensive income Balance at December 31, 2024 Balance at January 1, 2023 Recognized in profit or loss Balance at December 31, 2023	Unrealized gains		Others - 2,025 - 2,025 - - -	Total - 2,025 526 2,551 515 (515) -

(iii) Assessment of tax

The Company’ s income tax return for the years through 2022 were assessed by the tax authority.

(q) Capital and other equity

As of December 31, 2024 and 2023, the authorized common stock of the Company was $2,400,000 and $2,100,000, respectively, comprising 240,000 and 210,000 thousand shares, respectively, with a per value of $10 per share. The issued shares were both 209,438 thousand shares. All the capitals were fully received.

(i) Common stock

On March 22, 2023, the board of directors meeting resolved to issue 38,000 thousand new shares for cash, with a per value of $10 per share, amounting to $380,000. The Company has received approval from the Financial Supervisory Commission for this capital increase. On May 10, 2023, the board of directors meeting resolved the basis date of the increase capital to be August 1, 2023 and the registration procedures have been completed.

For the year ended December 31, 2023, the convertible bonds issued by the Company amounting to $93,904 was converted into 9,390 thousand shares of common stock and the related registration procedures have been completed.

(ii) Capital surplus

The balance of capital surplus at the reporting date was as follows:

December 31, 2024 Additional paid-in capital $ 978,788 Gain on disposal of assets 100,063 Expired conversion of convertible bonds 2,958 Expired employee share options 8,177 Other`－`disgorgement 18 $ 1,090,004	December 31, 2023
	1,041,789 100,063 2,958 8,177 18
	1,153,005

(Continued)

AIR ASIA CO., LTD. Notes to the Parent Company Only Financial Statements

The board of directors meeting resolved on February 29, 2024 to distribute cash dividends by its capital surplus in the amount of $63,001 (NT$ 0.30081 per share).

The board of directors meeting resolved on February 22, 2023 to distribute cash dividends by its capital surplus in the amount of $45,552 (NT$0.2811 per share).

According to the R.O.C. Company Act, capital surplus can only be used to offset a deficit, and only the realized capital surplus can be used to increase the common stock or be distributed as cash dividends. The aforementioned realized capital surplus includes capital surplus resulting from premium on issuance of capital stock and earnings from donated assets received. According to the Regulation Governing the Offering and Issuance of Securities by Securities Issuers, capital increases by transferring capital surplus in excess of par value should not exceed 10% of the total common stock outstanding.

(iii) Retained earnings

The Company’s Articles of Incorporation provide that the current net income, after deducting the previous years’ losses, shall set aside 10% as legal reserve and special reserve according to the relevant laws and other regulations of R.O.C. Then the balance is added up with the accumulated retained earnings in the previous year. The distribution of the remaining portion, if any, will be proposed by the board of directors for approval in the board of directors meeting.

If dividend is distributed in issued new shares, shall be made in accordance with the provisions of Article 240 of the Company Law. If dividend is distributed in cash, the board of directors shall be attended by two-thirds of the total directors, and resolved by a majority votes at the board of directors, to distribute dividends and bonuses in whole or in part to be paid in cash, and report to the shareholders’ meeting.

The Company’s dividend policy is based on the principle of stability and balance. In addition to considering the profit of the shareholders, the Company shall take into account the impact of the Company’s operations. The Company allocate the at least 50% annual distributable surplus to shareholders’ dividend according to factors such as financial, business and operational aspects. The distribution of surplus is prioritized by cash dividends and may also distributed by stock dividends. However, the proportion of stock dividends shall not higher than 50% of the total dividends.

1) Legal reserve

When a company incurs no loss, it may, pursuant to a resolution by a shareholders’ meeting, distribute its legal reserve by issuing new shares or by distributing cash, and only the portion of legal reserve which exceeds 25% of capital may be distributed.

2) Earning distribution

The amount of cash dividends of appropriations of earnings for 2023 and 2022 had been approved in the board meeting held on February 29, 2024 and February 22, 2023, respectively. These earnings were appropriated as follows:

(Continued)

AIR ASIA CO., LTD. Notes to the Parent Company Only Financial Statements

Dividends distributed to ordinary shareholders: Cash	2023 Amount $ 48,001	2022
		Amount
		12,786

The amount of cash dividends on the appropriations of earnings for 2024, had been approved during the board meeting on February 26, 2025, as follows:

Dividends distributed to ordinary shareholders: Cash	2024
	Amount
	$ 129,969

(iv) Other equity (net of tax)

Balance at January 1, 2024 Exchange differences on foreign operations Changes in fair value of hedging instrument Changes in fair value of hedging instrument reclassified to inventories Balance at December 31, 2024 Balance at January 1, 2023 Exchange differences on foreign operations Changes in fair value of hedging instrument Changes in fair value of hedging instrument reclassified to inventories Balance at December 31, 2023	Exchange differences on translation of foreign financial statements		Gains (losses) on hedging instruments	Total (3,420) 169 24,354 (18,696) 2,407 515 1 13,460 (17,396) (3,420)
	$ 134 169 - - $ 303 $ 133 1 - - $ 134		(3,554) 24,354 (18,696) 2,104 382 - 13,460 (17,396) (3,554)

(r) Share-based payment

For the year ended December 31, 2023, the Company had the following share-based payment arrangements:

－ Equity settled Cash capital increase reserved for employee subscription Grant date June 8, 2023 Number of shares granted 1,612,000 shares Recipients Employees of the Company Vesting conditions Immediately vested

(Continued)

AIR ASIA CO., LTD. Notes to the Parent Company Only Financial Statements

The Company used Black-Scholes option pricing model in measuring the fair value of the sharebased payment at the grant date. The measurement inputs were as follows:

Fair value at grant date (in dollars) Share price at grant date (in dollars) Exercise price (in dollars) Expected volatility (%) Expected life (years) Risk-free interest rate (%)		For the year ended December 31, 2023
		Cash capital increase reserved for employee subscription
		23.8 58.8 35 42.13 0.09 0.6275

Details of cash capital incrense reserved for employee subscription are as follows:

		For the year ended	December 31, 2023
		Weighted-average	Number of options
	exercise price (in dollars)		(shares)
Outstanding at January 1	$	-	-
Granted during the year		35	1,612,000
Exercised during the year		35	(1,268,453)
Expired during the year		35	(343,547)
Outstanding at December 31		-	-
Exercisable at December 31		-	-

The Company’ s compensation expenses stemming from the cash capital incrense reserved for employee subscription for the years ended December 31, 2023, amounting to $ 38,366, and recorded as operating costs and expenses as well as in the capital surplus-employee stock options.

There were no such transaction for the year ended December 31, 2024.

(s) Earnings per share

For the years ended December 31, 2024 and 2023, the Company’s earnings per share were calculated as follows:

Basic earnings per share: Profit attributable to common share holders of the Company Weighted-average number of shares	Unit 2024 $ 140,609 209,438 $ 0.67	of share: thousand 2023 57,120 183,406 0.31

(Continued)

AIR ASIA CO., LTD. Notes to the Parent Company Only Financial Statements

(t)	Diluted earnings per share: Profit attributable to common shareholders of the Company Effect of dilutive ordinary shares: Convertible bonds Profit attributable to common shareholders of the Company (diluted) Weighted-average number of shares Effect of dilutive ordinary shares: Remuneration to employees Convertible bonds Weighted-average number of shares (diluted) Revenue from contracts with customers (i) Disaggregation of revenue Primary geographical markets: Taiwan Asia Other Major services and timing of revenue recognition: At a point in time Repair supply pricing Outsourced repair and air material transaction Subtotal Over time Aircraft maintenance Fleet maintenance Components maintenance Subtotal Total

(Continued)

AIR ASIA CO., LTD. Notes to the Parent Company Only Financial Statements

(ii) Contract balances

Notes and trade receivables Less: Loss allowance Total Contract assets`－`Maintenance service Less: Loss allowance Total Contract liabilities`－`Maintenance service	December 31, 2024 $ 1,415,821 (3,959) $ 1,411,862 $ 1,364,969 - $ 1,364,969 $ 49,737	December 31, 2023 1,449,310 (4,294) 1,445,016 1,181,069 - 1,181,069 51,585	January 1, 2023 1,209,599 (1,127) 1,208,472 913,851 - 913,851 8,597

For details on notes and trade receivables and allowance for impairment, please refer to note 6(c).

For details on credit risk of contract assets, please refer to note 6(w).

The amount of revenue recognized for the years ended December 31, 2024 and 2023 that were included in the contract liability balance at the beginning of the period were $16,403 and $8,222, respectively.

The contract assets primarily relate to the Company’s rights to consideration in exchange for providing maintenance services to a customer but has not yet billed at the reporting date. The contract assets are transferred to receivables when the rights to consideration become unconditional.

The major change in the balance of contract assets and contract liabilities is the difference between the time frame in the performance obligation to be satisfied and the payment to be received.

(iii) Transaction price allocated to the remaining performance obligations

The Company has signed several multi-year military maintenance contracts with the military department of the government. Although the contract stated the budget, the actual performance obligation is based on the maintenance work order and recognized revenue based on each order. As of December 31, 2024, and 2023, the maintenance period of the work obtained were less than one year, thus, the Company applies the practical expedient of IFRS 15 and does not disclose information about the transaction price allocated to the remaining performance obligations of the contract.

(iv) Assets recognized from costs to obtain a contract

Incremental costs of obtaining contracts`－`non-current Less: accumulated amortization Total	December 31, 2024 $ 19,979 (8,036) $ 11,943	December 31, 2023 20,771 (7,343) 13,428

(Continued)

AIR ASIA CO., LTD. Notes to the Parent Company Only Financial Statements

The related expenses of stamp tax paid by the Company for the acquisition of the aircraft maintenance business are expected to be recoverable and therefore were recognized as assets and amortized over the contract period of the aircraft maintenance business. Amortization expenses of $3,448 and $3,549 were recognized for the years ended December 31, 2024 and 2023.

(u) Remunerations to employees

According to the Articles of Association, once the Company has annual profit, it should appropriate 1%~3% of the profit to its employees. When the Company still has an accumulated loss, the Company shall keep the profit for making up an accumulated loss.

The remunerations to employees amounted to $5,556 and $2,129 for the years ended December 31, 2024 and 2023, respectively. These amounts were calculated using the Company’s net income before tax without the remunerations to employees for each period, multiplied by the proposed percentage which is stated under the Company’s proposed Article of Incorporation. These remunerations were expensed under operating costs or expenses for each period.

Related information would be available at the Market Observation Post System website. The difference of $8 between the amount of the actual distributions for 2024 approved by the Board of Directors and the estimated amount in the financial statement was due to the difference in the estimated net income before tax. The Company accounted for the difference as a change in accounting estimate and recognized it in profit or loss in 2025. The amounts, as stated in the financial statements, are identical to those of the actual distributions for 2023.

(v) Non-operating income and expenses

(i) Other income

The details of other income were as follows:

Rent income Other income`－`others (ii) Other gains and losses The details of other gains and losses were as follows`：` Gains (losses) on disposals of propert, plant and equipment Foreign exchange gains, net Net gains on valuation of financial assets at fair value through profit or loss Handing fees Others	2024 $ 1,630 10,310 $ 11,940 2024 $ (81) 11,118 - (9,935) (145) $ 957	2023 1,150 10,771 11,921 2023 315 8,689 45 (12,776) (9) (3,736)

(Continued)

AIR ASIA CO., LTD. Notes to the Parent Company Only Financial Statements

(w) Financial instruments

(i) Credit risk

1) Credit risk exposure

The carrying amount of financial assets and contract assets represents the maximum amount exposed to credit risk.

2) Concentration of credit risk

As of December 31, 2024 and 2023, a few customers of the Company accounted for 86% and 88%, respectively, of accounts receivable. As of the end of the reporting period, the Company did not suffer any significant credit risk losses due to these customers. The Company periodically evaluates customers’ financial position and the possibility of recovery of receivables in order to reduce credit risk.

3) Credit risk exposure of receivables and other financial assets at amortized cost

For credit risk exposure on notes and trade receivables, and the details on loss allowance provision, please refer to note 6(c).

Other financial assets at amortized cost include other receivables and refundable deposit. There was no loss allowance recognized or reversed for the years ended December 31, 2024 and 2023. All of these financial assets are considered to have low risk, and thus, the impairment provision recognized during the period was limited to 12 months expected credit losses.

4) Contract assets

The Company’s customers are concentrated in the aircraft maintenance business. As of December 31, 2024 and 2023, the Company’s concentration of credit risk on government due to the aircraft maintenance business accounted for 99% of contract asset. However, since the counterparties are mainly government, there is no credit risk.

(ii) Liquidity risk

The following table shows the contractual maturities of financial liabilities, including estimated interest payments and excluding the impact of netting agreements.

December 31, 2024 Non-derivative financial liabilities With floating interest rates Non-interest-bearing liabilities Lease liabilities	Carrying amount	Contractual cash flows 1,194,706 783,161 224,408 2,202,275	Within 1 year 815,516 783,161 24,620 1,623,297	1-2 years 131,986 - 18,749 150,735	2-5 years 123,126 - 50,849 173,975	Over 5 years
	$ 1,168,000 783,161 210,915 $ 2,162,076					124,078 - 130,190
						254,268

(Continued)

AIR ASIA CO., LTD. Notes to the Parent Company Only Financial Statements

December 31, 2023 Non-derivative financial liabilities With floating interest rates Non-interest-bearing liabilities Lease liabilities Derivative financial liabilities Forward exchange contracts: Outflow Inflow	Carrying amount	Contractual cash flows 1,149,342 582,959 238,754 210,159 (204,924) 1,976,290	Within 1 year 874,016 582,959 23,439 210,159 (204,924) 1,485,649	1-2 years 187,985 - 19,104 - - 207,089	2-5 years 87,341 - 49,747 - - 137,088	Over 5 years
	$ 1,135,750 582,959 223,287 5,235 - $ 1,947,231					- - 146,464 - -
						146,464

The Company does not expect the cash flows included in the maturity analysis to occur significantly earlier or at significantly different amounts.

(iii) Currency risk

1) Exposure to foreign currency risk

The Company’s significant exposure to foreign currency risk was as follows:

Financial assets Monetary items USD Non-monetary items USD Financial liabilities Monetary items USD Non-monetary items USD GBP	December 31, 2024 Foreign currency Exchange rate NTD $ 4,253 32.785 139,445 3,783 32.785 124,036 5,223 32.785 171,224 - - - - - -	December 31, 2024 Foreign currency Exchange rate NTD $ 4,253 32.785 139,445 3,783 32.785 124,036 5,223 32.785 171,224 - - - - - -	December 31, 2023	December 31, 2023
	Foreign currency $ 4,253 3,783 5,223 - -	Exchange rate 32.785 32.785 32.785 - -	Foreign currency 6,249 919 5,534 5,539 952	Exchange rate NTD 30.705 191,881 30.705 28,218 30.705 169,908 30.705 170,075 39.15 37,271

2) Sensitivity analysis

The Company’ s exposure to foreign currency risk arises from the translation of the foreign currency exchange gains and losses on cash and cash equivalents, trade receivables, and trade and other payables that are denominated in foreign currency. As of December 31, 2024 and 2023, when the exchange rate of the NTD versus the USD and GBP increases or decreases by 1%, given no changes in other factors, profit after tax will decrease or increase by $254 for 2024, profit after tax will increase or decrease by $176 for 2023, the equity will increase or decrease by $21 for 2024 due to cash flow hedges, and the equity will decrease or increase by $36 for 2023 due to cash flow hedges. This analysis was performed on a consistent basis for both periods.

(Continued)

AIR ASIA CO., LTD. Notes to the Parent Company Only Financial Statements

Exchange gains or losses (including realized and unrealized) that resulted from monetary items translated to the functional currency were as follows:

NTD	2024	2024		2023
	Exchange gain (loss) $ 11,118	Average rate		Exchange gain (loss) Average rate 8,689 -
		-

(iv) Interest rate analysis

Please refer to the notes on liquidity risk management and interest rate exposure of the Company’s financial assets and liabilities.

The following sensitivity analysis is based on the exposure to the interest rate risk of derivative and non-derivative financial instruments on the reporting date. Regarding assets with variable interest rates, the analysis is based on the assumption that the amount of assets outstanding at the reporting date was outstanding throughout the year. The rate of change is expressed as the interest rate increases or decreases by 1% when reporting to management internally, which also represents the Company management’ s assessment of the reasonably possible interest rate change.

If the interest rate had increased or decreased by 1%, the Company’ s net profit would have decreased or increased by $9,344 and $9,086 for the year ended December 31, 2024 and 2023, respectively, with all other variable factors remaining constant. This is mainly due to the Company’s borrowing at floating rates.

(v) Fair value of financial instruments

1) Fair value hierarchy

The carrying amount and fair value of the Company’ s financial assets and liabilities, including the information on fair value hierarchy were as follows; however, except as described in the following paragraphs, for financial instruments not measured at fair value whose carrying amount is reasonably close to the fair value, and lease liabilities, disclosure of fair value information is not required:

	December 31, 2024 Fair Value	December 31, 2024 Fair Value	December 31, 2024 Fair Value
Carrying amount
	Level 1 - - - - - -	Level 2 2,630 - - - - -	Level 3 Total - 2,630 - - - - - - - - - -
$ 2,630 $ 152,289 1,411,862 2,007 88,381 12,300 $ 1,666,839

(Continued)

AIR ASIA CO., LTD. Notes to the Parent Company Only Financial Statements

		December 31, 2024 Fair Value Level 1 Level 2 Level 3 Total - - - - - - - - - - - - - - - - December 31, 2023 Fair Value Level 1 Level 2 Level 3 Total - 793 - 793 - - - - - - - - - - - - - - - - - - - - - 5,235 - 5,235 - - - - - - - - - - - - - - - -	December 31, 2024 Fair Value Level 1 Level 2 Level 3 Total - - - - - - - - - - - - - - - - December 31, 2023 Fair Value Level 1 Level 2 Level 3 Total - 793 - 793 - - - - - - - - - - - - - - - - - - - - - 5,235 - 5,235 - - - - - - - - - - - - - - - -
Carrying amount
$ 620,000 783,161 548,000 210,915 $ 2,162,076
	Carrying amount
		Level 1 - - - - - - - - - - -	Level 2 793 - - - - - 5,235 - - - -
$ 793 $ 251,055 1,445,016 1,368 113,866 44,667 $ 1,855,972 $ 5,235 $ 730,000 582,959 405,750 223,287 $ 1,941,996

The table above analyzes financial instruments carried at fair value by the levels in the fair value hierarchy. The different levels have been defined as follows:

－ Level 1: quoted prices (unadjusted) in active markets for identified assets or liabilities.
－ Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
－ Level 3: inputs for the assets or liability that are not based on observable market data (unobservable inputs).

There was no reclassification of levels during the years ended December 31, 2024 and 2023.

(Continued)

AIR ASIA CO., LTD. Notes to the Parent Company Only Financial Statements

2) Valuation techniques for financial instruments not measured at fair value

Financial liabilities measured at amortized cost

If there is quoted price generated by transactions, the recent transaction price and quoted price data is used as the basis for fair value measurement. However, if no quoted prices are available, the discounted cash flows are used to estimate fair values.

The valuations of the liability part of the convertible bonds issued by the Company are valued by discounted cash flows.

3) Valuation techniques for financial instruments measured at fair value

Derivative financial instruments

Measurement of the fair value of derivative instruments is based on the valuation techniques generally accepted by market participants such as the discounted cash flow or option pricing models. Put options and redeem options of the convertible bonds are valued by Binary Tree. Fair value of forward currency is usually determined by the forward currency exchange rate.

(x) Financial risk management

(i) Overview

The Company have exposures to the following risks from its financial instruments:

1) Credit risk
2) Liquidity risk
3) Market risk

The following likewise discusses the Company’ s objectives, policies and processes for measuring and managing the above mentioned risks. For more disclosures about the quantitative effects of these risks’ exposures, please refer to the respective notes in the accompanying financial statements.

(ii) Structure of risk management

The Board of Directors has overall responsibility for the establishment and oversight of the risk management framework. The chairman is responsible for developing and monitoring the Company’s risk management policies. The chairman reports regularly to the Board of Directors on its activities.

(Continued)

AIR ASIA CO., LTD. Notes to the Parent Company Only Financial Statements

The Company’ s risk management policies are established to identify and analyze the risks faced by the Company, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company’s activities. The Company, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations.

The Company Audit Committee oversees how management monitors compliance with the Company’ s risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The Company Audit Committee is assisted in its oversight role by Internal Audit. Internal Audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Audit Committee.

(iii) Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company’s receivables from customers and bank deposits.

1) Trade receivables

The Company has established a credit policy under which each new customer is analyzed individually for creditworthiness before the Company’s standard payment and delivery terms and conditions are offered. The Company’s review includes external ratings, when available, and, in some cases, bank references. The Company rates major clients by other publicly available information and past transaction experience. Credit limits are established for each customer, and these limits are reviewed regularly. First-time customers, customers that have not traded for a long period, and customers that fail to meet the Company’s benchmark creditworthiness may transact with the Company only on a prepayment basis.

The Company evaluates the aging of trade receivables periodically, and accrues an allowance for doubtful accounts, if necessary. The allowance consists of a specific loss component that relates to individually significant risk exposures and a collective loss incurred but not yet identified. The collective loss allowance is determined based on historical payment statistics and forward looking information.

2) Bank deposit

The Company’s transactions resulted from external parties with good credit ratings; there are no noncompliance issues. The Company also has relationships with multiple financial institutions to diversify risk.

(Continued)

AIR ASIA CO., LTD. Notes to the Parent Company Only Financial Statements

(iv) Liquidity risk

The Company manages sufficient cash and cash equivalents to cope with its operations and mitigate the effects of fluctuations in cash flows. The Company’s management supervises the banking facilities and ensures compliance with the terms of loan agreements.

Loans and borrowings from the bank form an important source of liquidity for the Company. As of December 31, 2024 and 2023, the Company’ s unused credit line were amounted to $1,554,640 and $1,158,000 respectively.

(v) Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, and interest rates, will affect the Company’s income. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.

1) Currency risk

The Company is exposed to currency risk on sales and purchases that are denominated in a currency other than the functional currency of the Company, the NTD. The currencies used in these transactions are the USD and GBP.

Regarding other monetary assets and liabilities denominated in foreign currencies, when short-term imbalance occurs, the Company buys or sells foreign currencies at real-time exchange rates to ensure that the net risk of risk remains at an acceptable level.

The Company determines the existence of an economic relationship between the hedging instrument and hedged item based on the currency, amount and timing of their respective cash flows. The Company assesses whether the derivative designated in each hedging relationship is expected to be and has been effective in offsetting changes in cash flows of the hedged item using the hypothetical derivative method.

In these hedge relationships, the main sources of ineffectiveness are:

－ the effect of the counterparty and the Company’s own credit risk on the fair value of the forward foreign exchange contracts, which is not reflected in the change in the fair value of the hedged cash flows attributable to the change in exchange rates; and
－ changes in the timing of the hedged transactions.
2) Interest rate risk

The short-term and long-term borrowings of the Company are debts with floating interest rates. Therefore, changes in market interest rates will cause the interest rates of short-term and long-term borrowings to fluctuate, causing fluctuations in future cash flows.

(Continued)

AIR ASIA CO., LTD. Notes to the Parent Company Only Financial Statements

(y) Capital management

The Company’s objectives for managing capital to safeguard the capacity to continue to operate, to continue to provide a return on shareholders, to maintain the interest of other related parties, and to maintain an optimal capital structure to reduce the cost of capital.

In order to maintain or adjust the capital structure, the Company may adjust the dividend payment to the shareholders, reduce the capital for redistribution to shareholders, issue new shares, or sell assets to settle any liabilities.

The Company use the debt-to-equity ratio to manage capital. This ratio is the total net debt divided by the total capital. The net debt from the balance sheet is derived from the total liabilities less cash and cash equivalents. The total capital is the total equity plus net debt.

The Company’s debt-to-equity ratios at the reporting date were as follows:

Total liabilities Less: cash and cash equivalents Net debt Total equity Total capital Debt-to-equity ratio	December 31, 2024 $ 2,297,452 152,289 2,145,163 3,469,405 $ 5,614,568 % 38.21	December 31, 2023
		2,043,020 251,055
		1,791,965 3,433,971
		5,225,936
		% 34.29

As of December 31, 2024, the Company’s capital management strategy is consistent with the prior years.

(z) Investing and financing activities not affecting the current cash flow

The Company acquired right-of-use assets by leases for the years ended December 31, 2024 and 2023, please refer to note 6(h).

The convertible bonds issued by the Company were converted into common stock for the year ended December 31, 2023, please refer to note 6(q).

Reconciliation of liabilities arising from financing activities was as follows:

Short-term loans Long-term loans (included in current portion) Lease liabilities Total liabilities from financing activities	January 1, 2024 $ 730,000 405,750 223,287 $ 1,359,037	Cash flows (110,000) 142,250 (18,399) 13,851	Non-cash changes - - 6,027 6,027	December 31, 2024 620,000 548,000 210,915 1,378,915

(Continued)

AIR ASIA CO., LTD. Notes to the Parent Company Only Financial Statements

Short-term loans Short-term notes payable Long-term loans (included in current portion) Bonds payable Lease liabilities Total liabilities from financing activities	January 1, 2023 $ 1,125,000 549,704 243,750 149,673 232,720 $ 2,300,847	Cash flows (395,000) (549,704) 162,000 - (16,919) (799,623)	Non-cash changes - - - (149,673) 7,486 (142,187)	December 31, 2023 730,000 - 405,750 - 223,287
				1,359,037

(7) Related-party transactions

(a) Parent company and ultimate controlling party

Taiwan Aerospace Corporation is both the parent company and the ultimate controlling party of the Company. As of December 31, 2024 and 2023, it owns both 49.67% of all shares outstanding of the Company.

(b) Names and relationship with related parties

The followings are subsidiaries and other entities that have had transactions with related party during the periods covered in the parent company only financial statements.

Name of related party	Relationship with the Company
Apex Aviation Inc.	Substantive related party
Air Asia Company Ltd. (USA)	Subsidiary of the company

The amounts of significant sales by the Company to related parties were as follows:

2024 Other related parties $ 1,104	2023
	1,439

The sales price to the above related parties was determined through mutual agreement based on the market rates. The credit terms ranged from 15 to 60 days, the collection terms for related parties approximated the market terms. As of December 31, 2024 and 2023, the receivables from related parties were $12 and $0, respectively, which recorded as trade receivables.

(Continued)

AIR ASIA CO., LTD. Notes to the Parent Company Only Financial Statements

(d) Key management personnel compensation

Key management personnel compensation comprised:

2024 Short-term employee benefits $ 19,870 Post-employment benefits 668 $ 20,538	2023
	20,054 1,409
	21,463

(8) Pledged assets

The carrying amounts of assets pledged as security were as follows:

Pledged assets Refundable deposits`－`current Refundable deposits`－`non-current (Note1) Land Buildings and structures	Object December 31, 2024 Guarantee deposits and customs bond $ 88,381 Guarantee deposits 12,300 Short-term and long-term loans 255,076 Short-term and long-term loans 2,812 $ 358,569	December 31, 2023
		113,866 44,667 255,076 185,816
		599,425

Note 1: recorded as other non-current assets.

(9) Significant commitments and contingencies

(a) Unrecognized contractual commitments
(i) As of December 31, 2024 and 2023, the maintenance bond and customs bond offered by banks amounted to $2,020,980 and $1,967,822, respectively.
(ii) The Company signed contracts with domestic and foreign vendors for building and purchasing property, plant and equipment. As of December 31, 2024 and 2023, the contracts amounted to $556,605 and $547,453, respectively, and the unpaid payment was $427,708 and $458,422, respectively.
(b) Contingencies: None.

(10) Losses Due to Major Disasters: None

(11) Subsequent Events: None

(Continued)

AIR ASIA CO., LTD. Notes to the Parent Company Only Financial Statements

(12) Other:

(a) A summary of current-period employee benefits, depreciation, and amortization, by function, is as follows:

follows:
By funtion By item	2024			2023
	Cost of Sale	Operating Expense	Total	Cost of Sale	Operating Expense	Total
Employee benefits
Salary	631,731	141,191	772,922	619,666	138,096	757,762
Labor and health insurance	63,301	16,595	79,896	61,817	15,349	77,166
Pension	32,597	7,031	39,628	31,688	6,635	38,323
Remuneration of directors	-	2,280	2,280	-	2,280	2,280
Others	45,182	8,571	53,753	38,536	7,228	45,764
Depreciation	85,159	15,209	100,368	82,674	10,323	92,997
Amortization	13,838	1,422	15,260	5,909	696	6,605

The additional information of number of employees and employee benefits in the year 2024 and 2023 was as follows:

2024 Number of employees 1,124 Number of non-employee directors 10 Average employee benefits $ 849 Average employee salary $ 694 Adjustment of average employee salary % 1.61 Supervisor's remuneration $ 0	2023
	1,120
	10
	828
	683
	% 9.11
	0

The Company’ s salary and remuneration policy (including directors, supervisors, managers and employees) are as follows:

The Company’s salary and remuneration policy complies with the provisions of Article 7, Item 1 of the “ Measures for the Establishment and Exercising of Powers of the Company’ s Salary and Remuneration Committee when Stocks Are Listed or Traded in the Business Location of a Securities Firm” , and Article 7, Item 1 of the Company's "Organizational Rules for the Salary and Remuneration Committee", wherein they stipulate It is stipulated that the salary and remuneration of relevant directors and managers will be transparent, rationalized and institutionalized. Also, "Directors and Managers Remuneration Management Measures" are specially formulated, and the salary and remuneration committee meetings are held regularly in accordance with the "Remuneration Committee Organization Rules and Power Exercise Measures" to evaluate the remuneration policies and systems of the directors and managers of the Company, and make recommendations to the board of directors for their decision-making reference. The relevant information is as follows:

(i) The remuneration of the Company’ s directors is in accordance with the "Directors and Managers' Remuneration Management Measures". The remuneration of directors includes remuneration and business execution expenses.

(Continued)

AIR ASIA CO., LTD. Notes to the Parent Company Only Financial Statements

(ii) The remuneration of the general manager, deputy general managers, managers and employees includes salary, bonuses, employee compensation and employee stock options. Furthermore, the Company’ s “ Directors and Managers’ Compensation Management Measures” and “Remuneration Structure Measures”, refers to the usual level of payment in the industry, and considers the results of individual performance evaluation, the time invested, the responsibilities, the situation of achieving personal goals, the role performance of other positions, the salary and remuneration that the Company has given to the same position in recent years, and the assessment of the Company’s short-term and long-term business goals. In addition, the Company’s financial status assesses the rationality of the relationship between the personal performance and the Company’s operating performance and future risks, depending on the actual situation and related issues at any time. The law reviews the remuneration system in a timely manner in order to balance the Company’s sustainable operation and risk control.

(13) Other disclosures:

(a) Information on significant transactions:

The followings were the information on significant transactions required by the “ Regulations Governing the Preparation of Financial Reports by Securities Issuers” for the Company for the year ended December 31, 2024:

(i) Loans to other parties:None
(ii) Guarantees and endorsements for other parties:None
(iii) Information regarding securities held at the reporting date (subsidiaries, associates and joint ventures not included):None
(iv) Information regarding purchase or sale of securities for the period exceeding 300 million or 20% of the Company’s paid-in capital:None
(v) Information on acquisition of real estate with purchase amount exceeding 300 million or 20% of the Company’s paid-in capital:

Name of company	Name of property	Transaction date	Transaction amount	Status of payment	Counter-party	Relationship with the Company	If the counter-party is a related party, disclose the previous transfer information	If the counter-party is a related party, disclose the previous transfer information	If the counter-party is a related party, disclose the previous transfer information	If the counter-party is a related party, disclose the previous transfer information	References for determining price	Purpose of acquisition and current condition	Others
							Owner	Relationship with the Company	Date of transfer	Amount
The company	Administration building	2021.12.17	$ 285,672	Based on the construction progress	Sheng Guan construction Co., Ltd	Non-related parties	Not applicable	Not applicable	Not applicable	Not applicable	Market price	For the future operational use	None
`〝`	`〝`	2020.4.10	15,000	`〝`	Y.C.Tsai Architect & Associates	`〝`	`〝`	`〝`	`〝`	`〝`	`〝`	`〝`	`〝`
`〝`	`〝`	2020.11.23	22,857	`〝`	Creative Decoration Co., Ltd	`〝`	`〝`	`〝`	`〝`	`〝`	`〝`	`〝`	`〝`

(vi) Information regarding receivables from disposal of real estate exceeding 300 million or 20% of the Company’s paid-in capital:None

(Continued)

AIR ASIA CO., LTD. Notes to the Parent Company Only Financial Statements

(vii) Information regarding related-parties purchases and/or sales exceeding 100 million or 20% of the Company’s paid-in capital:None
(viii) Information regarding receivables from related-parties exceeding 100 million or 20% of the Company’s paid-in capital:None
(ix) Information regarding trading in derivative financial instruments:Note 6(b)
(b) Information on investees:

The followings are the information on investees for the years ended December 31, 2024 (excluding information on investees in Mainland China):

Name of investor	Name of investee	Main businesses and products	Original investment amount	Original investment amount	Balance as of December 31, 2024	Balance as of December 31, 2024	Balance as of December 31, 2024	Net income (losses) of investee	Investment income (loss) recognized	Note
			December 31, 2024	December 31, 2023	Shares (thousands)	Percentage of ownership	Carrying value
The Company	Air Asia Company Ltd. (USA)	Logistic service	6,699	6,699	10	% 100.00	3,261	(115)	(115)	-

(c) Information on investment in mainland China:None
(d) Major shareholders:

Major shareholders:
Shareholding Shareholder’s Name	Shares	Percentage
Taiwan Aerospace Corporation	104,029,402	% 49.67
Taiwan Sugar Corporation	19,898,469	% 9.50

Note1 ： The information on major shareholders, which is provided by the Taiwan Depository & Clearing Corporation, summarized the shareholders who held over 5% of total non-physical common stocks and preferred stocks (including treasury stocks ） on the last business date of each quarter. The registered non-physical stocks may be different from the capital stocks disclosed in the financial statement due to different calculation basis.
Note2 ： If shares are entrusted, the above information regarding such shares will be revealed by each trustors of individual trust account. The shareholders holding more than 10% of the total shares of the company should declare insider’s equity according to Securities and Exchange Act. The numbers of the shares declared by the insider include the shares of the trust assets which the insider has discretion over use. For details of the insider’s equity announcement please refer to the TWSE website.

(14) Segment information:

Please refer to the consolidated financial statement for the year ended December 31, 2024.

(Continued)

AIR ASIA CO., LTD.

Statement of cash and cash equivalents

December 31, 2024

(Expressed in thousands of New Taiwan Dollars)

Item Cash Bank deposits Total	Description Amount Cash on hand $ 81 Petty cash 763 844 Demand deposits 93,073 Foreign currency demand deposits (USD1,780,443.56`；`exchange rate at 32.785) 58,372 151,445 $ 152,289

`－` Statement of contract assets current

Client name Client A Other (Note1) Total	Description Amount Contract assets for maintenance services $ 1,324,682 `〃` 40,287 $ 1,364,969

Note1: The amount of individual client included in others does not exceed 5% of the account balance.

AIR ASIA CO., LTD.

Statement of trade notes and receivables, net

December 31, 2024

(Expressed in thousands of New Taiwan Dollars)

Client name Related-parties: Apex Aviation Inc. Non-related-parties: Client A Client B Other (Note1) Subtotal Less: Loss allowance Total	Description Amount Trade receivables for maintenance services $ 12 Trade receivables for maintenance services 1,082,834 `〃` 132,581 `〃` 200,394 1,415,821 (3,959) $ 1,411,862

Note1: The amount of individual client included in others does not exceed 5% of the account balance.

Statement of other receivables

Statement of other receivables, please refer to note 6(d).

AIR ASIA CO., LTD.

Statement of inventories

December 31, 2024

(Expressed in thousands of New Taiwan Dollars)

Item Finished goods Repair materials and others Less: Allowance for inventory devaluation and obsolescence Total Statement of	Amount Cost Market price Note $ 387,206 410,862 Market price is determined by net realizable value 1,219,003 1,232,462 `〃` 1,606,209 257,347 $ 1,348,862 other current assets

Item Other	Description Amount Temporary payments and advance payments $ 5,585

AIR ASIA CO., LTD.

Statement of changes in investments accounted for using the equity method

For the year ended December 31, 2024

(Expressed in thousands of New Taiwan Dollars)

Name of investee Air Asia Company Ltd. (USA)	Beginning Balance Shares Amount 10,000 $ 3,164	Ad	dition Amount -	Dec	rease Amount -	Investment income (loss) (115)	Exchange differences on translation of foreign financial statements 212		Ending Balan	ce Amount 3,261	Market v asset	alue or net s value Collateral Total amount or pledge 3,261 None
	Shares	Shares -		Shares -				Shares 10,000	Percentage % 100		Unit price USD 9.95
	10,000

AIR ASIA CO., LTD.

Statement of changes in property, plant and equipment

For the year ended December 31, 2024

(Expressed in thousands of New Taiwan Dollars)

Statement of changes in property, plant and equipment, please refer to note 6(g).

Statement of changes in right-of-use assets

Statement of changes in right-of-use assets, please refer to note 6(h).

Statement of changes in intangible assets

Statement of changes in intangible assets, please refer to note 6(i).

AIR ASIA CO., LTD.

Statement of other non-current assets

December 31, 2024

(Expressed in thousands of New Taiwan Dollars)

Statement of other non-current assets, please refer to note 6(j).

Statement of short-term borrowings

Type	Description Taipei Fubon Bank The Export-Import Bank of the Republic of China Taiwan Cooperative Bank Bank of Taiwan Taishin International Bank Total	Amount $ 100,000 200,000 100,000 120,000 100,000 $ 620,000	Contract period Within a year Within a year Within a year Within a year Within a year	Range of interest rates 1.9197% 2.02775% 1.8780% 1.8850% 1.9800%	Credit line Collateral 180,000 None 200,000 None 100,000 None 200,000 None 200,000 None
Credit loan Credit loan Credit loan Credit loan Credit loan

AIR ASIA CO., LTD.

Statement of trade payables

December 31, 2024

(Expressed in thousands of New Taiwan Dollars)

Client name Non-related-parties: Vendor A Vendor B Vendor C Vendor D Other (Note1) Total	Description Amount Trade payables due to purchasing goods $ 209,206 `〃` 36,861 `〃` 30,464 `〃` 28,449 `〃` 175,107 $ 480,087

Note1: The amount of individual client included in others does not exceed 5% of the account balance.

AIR ASIA CO., LTD.

`－` Statement of contract liabilities current, other

payables and other current liabilities

December 31, 2024

(Expressed in thousands of New Taiwan Dollars)

Item
Contract liabilities－current:
Unearned sales revenue
Other payables:
Salaries and bonuses payable
Pension and labor insurance payable
Employee compensation payable
Other
Other current liabilities:
Collection
Temporary credits Description
Amount
Unearned sales revenue
$
49,737
Salaries payable for December, year-end bonuses and
non-leaving pay
$ 205,179
Pension and labor insurance payable
26,347
Employee compensation payable
5,556
Interest, professional service fees, royalty fees and
sales tax payable
65,992
$
303,074
Withholding income tax, pension and labor insurance
$ 8,527
Other temporary credits
200
$
8,727

AIR ASIA CO., LTD.

Statement of provisions - current

December 31, 2024

(Expressed in thousands of New Taiwan Dollars)

－ Statement of provisions current, please refer to note 6(m).

Statement of lease liabilities

Item	Description Leases land Leases dormitory and office Car rental	Lease term 2018.07.01~2027.12.31 2023.01.01~2026.08.31 2022.10.31~2029.09.17	Discount rate Amount 1.00%~1.938% $ 202,223 1.938%~1.947% 1,667 1.800%~1.988% 7,025 $ 210,915
Land Buildings and structures Transportation equipment

AIR ASIA CO., LTD.

Statement of long-term loans and current portion of

long-term loans

December 31, 2024

(Expressed in thousands of New Taiwan Dollars)

Bank name Taiwan Cooperative Bank Yuanta Commercial Bank Taipei Fubon Bank The Export- Import Bank of the Republic of China	Description Unsecured loans Monthly interest payments and first installment starting from 3 months after one year maturity following the first drawdown, repaid by 12 installments, respectively, with every 3 months as one installment. Unsecured loans Monthly interest payments and first installment starting from 3 months after seven months maturity following the first drawdown, repaid by 6 installments, with every 3 months as one installment. Secured loans Monthly interest payments and first installment starting from two years, three years, and three years after one month maturity following the first drawdown, repaid by 60, 84 and 84 installments, respectively, with every month as one installment. Unsecured loans Monthly interest payments and repayment at maturity.	Amount One year due Longer than one- year due $ 50,000 25,000 134,000 - - 250,000 - 89,000 $ 184,000 $ 364,000	Amount One year due Longer than one- year due $ 50,000 25,000 134,000 - - 250,000 - 89,000 $ 184,000 $ 364,000	Contract period 2026.6.17 2025.11.30 2031.4.15, 2034.4.30 and 2034.8.23 2026.1.6 and 2026.7.20	Interest rate Collateral 2.1280% None 2.0700% None 1.4250% Land, buildings and structures 2.1118% and 2.1539% None
		One year due $ 50,000 134,000 - - $ 184,000

AIR ASIA CO., LTD.

Statement of operating revenue

For the year ended December 31, 2024

(Expressed in thousands of New Taiwan Dollars)

Statement of operating revenue, please refer to note 6(t).

AIR ASIA CO., LTD.

Statement of operating costs

For the year ended December 31, 2024

(Expressed in thousands of New Taiwan Dollars)

Item		Amount
Raw materials, beginning of year	$	752,153
Add: Raw materials purchased		3,895,569
Transferred from manufacturing expense		6,440
Less: Raw materials, end of year		1,052,714
Raw materials sold		101,397
Raw materials scrapped		2,811
Losses on physical inventery		164
Transferred to operating expenses		5,253
Raw materials used		3,491,823
Direct labor		411,713
Manufacturing expense		600,939
Manufacturing cost		4,504,475
Add: Work in process, beginning of year		189,813
Less: Work in process, end of year		166,289
Cost of finished goods		4,527,999
Add: Finished goods, beginning of year		340,876
Less: Finished goods, end of year		387,206
Cost of sale of finished goods		4,481,669
Add: Cost of sale of raw materials		101,397
Write-off for inventories scrapped		2,811
Unallocated production overheads		125,351
Provision for inventory obsolescence		26,305
Losses on physical inventory		164
Total	$	4,737,697

AIR ASIA CO., LTD.

Statement of operating expense

For the year ended December 31, 2024

(Expressed in thousands of New Taiwan Dollars)

Item	Selling expenses $ 46,434 3,715 2,198 851 2,931 8,388 267 2,002 26 2,796 $ 69,608	Administrative expenses 97,638 13,884 4,208 5,457 1,667 - 9,448 3,936 5,563 30,779 172,580	Research and development expenses 6,430 516 260 12 14 - 5,494 802 5,237 3,896 22,661	Total
Salary and wages Insurance expense Meal expense Taxes Entertainment expense Commission expense Depreciation expense Travelling expense Professional service fees Other expense Total				150,502 18,115 6,666 6,320 4,612 8,388 15,209 6,740 10,826 37,471
				264,849

Statement of non-operating income and expenses

Statement of non-operating income and expense, please refer to note 6(v).

AI assistant

AACL — Audit Report / Information 2024

52173_rns_2024-12-19_68d75c34-f1a9-4a48-a377-586af3aff625.pdf

Parent Company Only Financial Statements

Table of contents

Independent Auditors’ Report

Opinion

Basis for Opinion

Key Audit Matters

1. Revenue recognition

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

Auditors’ Responsibilities for the Audit of the Financial Statements

KPMG

Notes to Readers

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese)

AIR ASIA CO., LTD.

Balance Sheets

December 31, 2024 and 2023

(Expressed in Thousands of New Taiwan Dollars)

AIR ASIA CO., LTD.

Statements of Comprehensive Income

For the years ended December 31, 2024 and 2023

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

AIR ASIA CO., LTD.

Statements of Changes in Equity

For the years ended December 31, 2024 and 2023

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese)

AIR ASIA CO., LTD.

Statements of Cash Flows

For the years ended December 31, 2024 and 2023

(Expressed in Thousands of New Taiwan Dollars)

AIR ASIA CO., LTD.

Notes to the Parent Company Only Financial Statements For the years ended December 31, 2024 and 2023

(1) Company history

(2) Approval date and procedures of the financial statements:

(3) New standards, amendments and interpretations adopted:

AIR ASIA CO., LTD. Notes to the Parent Company Only Financial Statements

AIR ASIA CO., LTD. Notes to the Parent Company Only Financial Statements

(4) Summary of material policies:

(a) Statement of compliance

(b) Basis of preparation

(ii) Functional and presentation currency

AIR ASIA CO., LTD. Notes to the Parent Company Only Financial Statements

(c) Foreign currencies

AIR ASIA CO., LTD. Notes to the Parent Company Only Financial Statements

(f) Financial instruments

AIR ASIA CO., LTD. Notes to the Parent Company Only Financial Statements

(i) Financial assets

AIR ASIA CO., LTD. Notes to the Parent Company Only Financial Statements

AIR ASIA CO., LTD. Notes to the Parent Company Only Financial Statements

AIR ASIA CO., LTD. Notes to the Parent Company Only Financial Statements

5) Derecognition of financial assets

1) Classification of debt or equity

2) Equity instrument

3) Compound financial instruments

AIR ASIA CO., LTD. Notes to the Parent Company Only Financial Statements

4) Financial liabilities

5) Derecognition of financial liabilities

6) Offsetting of financial assets and liabilities

AIR ASIA CO., LTD. Notes to the Parent Company Only Financial Statements

(iii) Derivative financial instruments and hedge accounting

AIR ASIA CO., LTD. Notes to the Parent Company Only Financial Statements

(g) Inventories

(h) Investment in subsidiaries

(ii) Subsequent expenditure

(iii) Depreciation

AIR ASIA CO., LTD. Notes to the Parent Company Only Financial Statements

(j) Leases

(i) As a lessee

AIR ASIA CO., LTD. Notes to the Parent Company Only Financial Statements

AIR ASIA CO., LTD. Notes to the Parent Company Only Financial Statements

(ii) Subsequent expenditure

AIR ASIA CO., LTD. Notes to the Parent Company Only Financial Statements

(m) Provisions

(n) Revenue recognition

(i) Revenue from contracts with customers

1) Sale of goods

2) Maintenance services

AIR ASIA CO., LTD. Notes to the Parent Company Only Financial Statements

3) Financing components

AACL Audit Report / Information 2024